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/?K. DRAFT
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,
ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
Wednesday. January 10, 1996, 5:30 P.M.
A meeting of the Finance, Administration and Human Resources 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 10, 1996 at 5:30 p.m., at the Districts' Administrative
Offices.
(1) ROLL CALL
The roll was called and a quorum declared present, as follows:
Committee Directors Present:
George Brown, Chair
Jan Debay
Burnie Dunlap
James Flora
John M. Gullixson
Wally Lynn
Thomas Saltarelli
Roger R. Stanton, Vice Chair
William G. Steiner
Peer Swan
Committee Directors Absent:
John C. Cox, Jr., Joint Chair
Other Directors Present
John Collins
Sal Sapien
Staff Present:
Donald F. McIntyre, General Manager
Blake P. Anderson, Assistant General Manager
Judith A Wilson, Assistant General Manager
Gary Hasenstab, Director of Human Resources
Ed Hodges, Director of Maintenance
Steve Hovey, Director of Information Technology
Bob Ooten, Director of Operations
David Ludwin, Director of Engineering
Gary Streed, Director of Finance
Nancy Wheatley, Director of Technical Services
Michelle Tuchman, Director of Communications
Michael D. White, Controller
Stephen V. Kozak, Financial Manager
Mike Peterman, Human Resources
Mike Herrera, Software Systems Manager
Greg Mathews, Principal Administrative Analyst
Terri Josway, Safety & Emergency Response Mgr.
Lenora Crane, Committee Secretary
Others Present:
Thomas L. Woodruff, General Counsel
(2) APPOINTMENT OF A CHAIRMAN PRO TEM
No appointment was necessary.
Minutes of Finance, Ac n. and Human Resources Committ
Page2
January 10, 1996
(3) PUBLIC COMMENTS
No comments were made.
(4) REPORTS OF THE COMMITTEE CHAIR, GENERAL MANAGER. ASSISTANT
GENERAL MANAGER(S), DIRECTOR OF FINANCEfTREASURER. DIRECTOR
OF HUMAN RESOURCES. DIRECTOR OF INFORMATION TECHNOLOGY
AND GENERAL COUNSEL
(a) Report of the Committee Chair
Committee Chair George Brown announced the order of the new business
items has been changed to allow items of more importance to be
presented. He indicated a Landfill Committee meeting, scheduled for 7:00
p.m., may result in some items on the FAHR Agenda being deferred to
another meeting.
(b) Report of the General Manager
Don McIntyre advised the Committee a report was placed before them
from the PDC Committee, item PDC96-05. This item was presented to the
PDC Committee on January 4, 1996, and deals with a recommendation
from the Ad Hoc Committee on Space Utilization to rehabilitate the old
laboratory building in order to house Human Resources and Engineering
employees. About 90% of the space will be used by the Human
Resources Department and there will be two to three offices for the
Engineering Department. Mr. McIntyre indicated the PDC Committee
reacted positively to this recommendation, since this will be a better use of
existing assets, though it may be slightly more expensive than the cost of
new trailers. Mr. McIntyre indicated this report was being made for the
Committee's information only.
Mr. McIntyre reminded the Committee that there will be a Workshop held
on January 27, 1996 in the morning and he will be sending a letter out to
solicit interest and participation.
(c) Report of Assistant General Manager -Operations
Blake Anderson stated he would update the Committee on the status of
the bankruptcy later in the meeting. He advised there will be a Landfill
meeting following the FAHR Committee meeting where discussion will
center on Due Diligence. He indicated there was a meeting held earlier in
the day with Orange County City Managers regarding the landfill issues,
and a meeting is scheduled for Thursday evening, January 11 with the
League of Cities, at the Red Lion in Costa Mesa, to discuss the acquisition
issues. Mr. Anderson advised he will continue to refine the numbers and
is reporting to the Landfill Committee tonight about where we are.
Minutes of Finance, Adr-,. and Human Resources Committ'}
Page3
January 10, 1996
Report of Assistant General Manager -Administration
Judy Wilson, Assistant General Manager, Administration, had no report.
(d) Report of the Director of Finance/Treasurer
(1) Finance Director/Treasurer Gary Streed updated the Committee on
the status of the Districts' COP program, referring to a graph
contained in the agenda package which shows the CSDOC COP
Rate History. Mr. Streed noted that the rates rise at the end of the
graph. Mr. Streed stated that the average daily rate paid in the first
two quarters of FY 1995-96 has been approximately 3. 76%,
however, as of today, the rates have dropped to 2.9% and 3.0%
which is right where we were in July and is very good news.
(2) Districts' Treasurer Gary Streed reviewed the Monthly Report from
PIMCO. Mr. Streed advised that next month PIMCO will have
representatives at the FAHR Committee meeting to go over the 1st
Quarter Report and to answer any questions the Committee may
have. The 1st Quarter Report will focus on the Liquid Operating
Monies and Long-Term Monies. The report indicates both funds
are performing a little better than the Index and the Districts are in
complete compliance with the Investment Policy.
(e) Report of the Director of Human Resources
The Director of Human Resources had no report.
(f) Report of the Director of Information Technology
The Director of Information Technology had no report.
(g) Report of General Counsel
General Counsel had no report.
(5) APPROVAL OF MINUTES
It was moved, seconded and duly carried to approve the draft minutes of the
November 8, 1995, meeting of the Finance, Administration and Human
Resources Committee and forward them to the Executive Committee for their
consideration and filed. The minutes were submitted to the Joint Boards at their
November 15, 1995 meeting.
Minutes of Finance, Ac' 'fl. and Human Resources Committ-";
Page4
January 10, 1996
(6) OLD BUSINESS
(7)
FAHR95-37 Consideration of motion to receive and file Quarterly Status
Matrix from Ernst & Young Administrative Function Review.
Gary Streed briefly reviewed the items enumerated in the Status Matrix pertaining
to the Finance, Human Resources and Information Technology Departments and
informed the Committee this report reflects positive progress for the departments
in meeting their recommended goals. Mr. Streed advised the Committee that
they will be updated of staff's progress on a quarterly basis.
After discussion on this item, it was moved, seconded and duly carried to approve
staff's recommendation to receive and file the Status Matrix.
FAHR95-45 Consideration of motion to review and file revised Joint Works
Budget Reviews prepared by staff for the quarter ended
September 30, 1995.
Gary Streed stated the Committee reviewed the preliminary reports at their
November meeting. The revised summary statements of the Joint Works
Operating Costs for the three months of fiscal year 1995-96, some comparative
graphics, and graphs of the Measurement Tracking and Activity Trends from the
1995-96 budgets, which were included in the agenda package, were also
reviewed by Mr. Streed. Mr. Streed advised this report will be brought before the
Committee on a quarterly basis and will be bound in a book for easy reference.
After some discussion on this item, it was moved, seconded and duly carried to
approve staff's recommendation to approve and file these revised reports and
approve the format for future quarterly reports.
NEW BUSINESS
(Please Note: Though the following items were acted on in another sequence,
the minutes will reflect them in numerical order for tracking purposes.)
FAHR96-01 Consideration of the following actions recommended by AIG
Financial Products Corp .• for replacement of Letter of Credit,
Refunding Certificates of Participation. Series 1992 as
follows:
(a) Consideration of motion authorizing staff to take all
necessary actions to expedite replacement of the
Standby Letter of Credit Agreement with The Industrial
Bank of Japan, with a Substitute Standby Certificate
Purchase Agreement with Barclays Bank.
Minutes of Finance, Adrr,. and Human Resources Committ')
Page 5
January 10, 1996
(b) Consideration of motion authorizing staff to retain the·
services of a bond counsel firm for this transaction as
recommended by General Counsel, in an amount not to
exceed $25,000. to be entirely reimbursed to the Districts
by AIG.
(c) Consideration of motion directing staff to submit all
necessary documents for this transaction to the Joint
Boards of Directors at their January 24, 1996 meeting. for
execution.
Steve Kozak, Financial Manager, advised the AIG Financial Products Corp.
(AIG), is the swap provider for the Series 1992 Series 1992 Refunding COPs.
AIG has served the Districts with a demand letter directing termination of the
existing Standby Letter of Credit Agreement with The Industrial Bank of Japan, in
accordance with the Liquidity Guarantee Agreement. AIG has designated
Barclays Bank to provide the replacement Facility, in the form of a Standby
Certificate Purchase Agreement. The LOC substitution for the 1992 Series
Refunding COPs is in the mutual best interest of the Districts and AIG.
After discussion on this matter, it was moved, seconded and duly carried to
recommend approval of AIG's recommended actions (a), (b) and (c) above to the
Executive Committee.
FAHR96-02 Consideration of a motion to purchase four (4) Compaq
server-class computers for use as Districts-wide network
servers from AmeriData (Specification No. E-262R-2) for a
total cost of $135,875 not including tax and 1% CMAS fees.
Information Technology Director Steve Hovey advised the Committee of the need
for an enterprise-wide network operating system and appropriate hardware to
support the system. He reviewed the specifications needed for such a system,
advising the existing Novell servers would not scale up in order to support present
and future computer related services and connectivity requirements.
After discussion on this matter, it was moved, seconded and duly carried to
recommend that the Executive Committee approve staff's recommendation to
award a purchase order to AmeriData {Specification No. E-262R-2) for $135,875
(not including tax and 1 % CMSA fees) to purchase four (4) Compaq server-class
computers for use as Districts-wide local area network servers.
FAHR96-03 Consideration of motion to provide standby and callback pay
provisions for Programmers.
Human Resources Director Gary Hasenstab advised that Standby and Callback
pay is provided to the Operations and Maintenance employees that Programmers
work with, and is appropriate compensation for being required to return to work
once the regular workday has ended and the employee has left the plant, and for
Minutes of Finance, Ac ·11. and Human Resources Committ' ----
Page 6
January 10, 1996
being available for immediate return to work. Programmers who are placed on
standby status or who are called back to work should also be entitled to these
pay bonuses. Mr. Hasenstab indicated the total annual cost of implementing
Callback and Standby pay for Programmers is $11,950.
After discussion on this matter, it was moved, seconded and duly carried to
recommend the Executive Committee approve staff's recommendation to extend
the Standby Pay and Callback pay provisions in other Memoranda of
Understanding t.9 the classification of Programmer in the Professional Group.
FAHR96-04 Consideration of motion to approve benefit coverage for
regular employees working a reduced work week.
Gary Hasenstab reported that the Districts' current Employee Benefit Program is
specifically limited to full-time employees by Resolution 95-105. Mr. Hasenstab
advised that extending employee benefits on a prorated basis to employees who
would like to work a reduced work week would enhance the Districts'
organizational flexibility through job sharing, more accurately match workload
requirements with work schedules, potentially reduce overtime costs and offer a
greater measure of equity to regular employees who do not work a 40-hour week.
After discussion on this item, it was moved, seconded and duly carried to table
this item until the February FAHR Committee meeting. The Committee indicated
an interest in receiving a copy of the Districts' Tuition Reimbursement Policy.
Further information on job sharing and part-time benefits was also requested,
before making a decision on this item.
FAHR96-05 Consideration of motion to approve revision of Resolution
95-105 to reflect agreement with bargaining units to rescind
provisions granting a one-percent salary increase to all
employees.
Gary Hasenstab reported that the Districts and a majority of represented
employees have agreed to rescind provisions of their respective MOUs granting a
one-percent salary increase to all employees to offset the employees' one-
percent cost to fund the retiree health premium subsidy. A Side Letter of
Agreement has been entered into to document that understanding. The revised
understanding is in the best interest of the employees and the Districts.
It was moved, seconded and duly carried to recommend the Executive
Committee approve staff's recommendation to amend Resolution 95-105 to
rescind a one-percent salary increase to fund the Retiree Medical Health
Premium since sufficient funds are available from an already existing Additional
Retiree Benefit Account (ARBA).
Minutes of Finance, Adrr,. and Human Resources CommittfY)
Page 7
January 10, 1996
FAHR96-06 Consideration of motion to receive and file staff reports
updating benchmarking and performance measurement
programs.
Judy Wilson, Assistant General Manager, Administration; Greg Mathews,
Principal Administrative Analyst; and Bob Ooten, Director of Operations each
reported on this item. The Districts will use benchmarking practices as a
systemic approach to optimizing operating efficiencies, identifying areas for short
and long-term cost containment, assuring environmental Compliance, and as a
tool for strategic planning. Recently, the departments have undertaken significant
actions to develop benchmarking and performance measurement strategies.
Activity Trends, as reflected in the FY 1995-96 Budget, are a first step in the
development of our benchmarking and performance measurement programs.
Other projects are underway, including tracking performance externally against
other wastewater agencies, increased utilization of automation, development of
more comprehensive benchmark and performance standards, and an evaluation
of privatization. Bob Ooten's visit to the privatized Indianapolis treatment plant
was also reviewed.
It was moved, seconded and duly carried to receive and file this report.
FAHR96-07 Consideration of status report on Legal Services Committee
Activities.
Judy Wilson reported that on December 13, 1995, the Steering Committee
reviewed a report (included in the agenda package) on the work of the Ad Hoc
Committee on Legal Services comprised of Directors John Gullixson, Tom
Saltarelli and former Joint Chair Bill Mahoney, and recommended this matter be
directed to the Finance, Administration and Human Resources Committee.
In addition, Ms. Wilson advised that staff has concluded its analysis of the
proposed Contracts Administrator position to ascertain its appropriate role and
function in the organization, and the extent to which outside legal counsel could
be relieved of routine review of contractual issues, were the position to be
established. It was concluded that approximately $68,000 in legal fees can be
saved, and $71,500 in salary savings can be realized, if this position is
consolidated with the Purchasing Manager position.
A "white paper" outlining the various options on the provision of legal services is
expected to be submitted to the Committee in February.
After discussion on this item, it was moved, seconded and duly carried to accept
staff's recommendation to continue with recruitment for a Contracts
Administrator/Purchasing Manager, and Human Resources was directed to
conduct a class survey of that position. The Committee requested that this item
be brought back if a problem should arise which will require further action.
Minutes of Finance, A~ ·TI. and Human Resources Committ' · •.
Page 8
January 10, 1996
FAHR96-08 Consideration of a motion adopting Districts' position on
SCAG's Regional Comprehensive Plan and Guide -Finance
Chapter and authorizing staff to report to SCAG.
Judy Wilson, Asst. General Manager Administration, reported that SCAG's
Regional Comprehensive Plan and Guide is to raise the economic performance of
the region to a higher level, while ensuring that environmental needs are met and
the quality of life for the region is enhanced. The Regional Comprehensive Plan
frequently provides the basis for new legislative efforts and mandates, therefore,
staff has been following this process and reviewing any recommendations which
could potentially impact the Districts' revenue base. SCAG has established a
February 1, 1996 deadline for comments or concerns.
Ms. Wilson reviewed the Finance Chapter language directed at special district
property taxes, and reported that the County Sanitation Districts currently receive
$31,162,000 a year in property taxes, representing 6. 7% of its total funding
sources including reserves. Property taxes have been primarily used for COP
debt service. Debt service on the COPs is approximately $34.6 million. If
property tax were not available for this purpose, user fees would need to be
increased by an average of $34.32 or 48%. Average user fees are currently
$71.31. There would be no change in user fees in Districts 13 and 14 since they
were formed subsequent to the passage of Proposition 13 and do not receive
property taxes.
After discussion on this item, it was moved, seconded and duly carried to approve
staffs recommendation to adopt a Districts' position on SCAG's Regional
Comprehensive Plan and Guide -Finance Chapter; sending formal comments to
SCAG emphasizing the importance of wastewater treatment to the environment
and public health, and that the use of property taxes to retire debt on priority
infrastructure is a reasonable and appropriate use of these funds and contributes
to enhanced property values.
Director Jan Debay requested that staff provide her with a copy of the Districts'
comments when they are formalized.
FAHR96-09 Consideration of motion to receive and file Staff Report dated
January 4, 1996 re the Joint Agreement of the County of
Orange, the Official Investment Pool Participants' Committee
and Each Option A Pool Participant: and consideration of
Resolution No. 96-approving said Agreement.
Blake Anderson, Assistant General Manager, Operations, reported that on
January 3, 1996, the Orange County Investment Pool (OCIP) Committee reached
final agreement with the County on all of the details of the "Joint Agreement of the
County of Orange, the Official Investment Pool Participants' Committee and Each
Option A Pool Participant" for the resolution of claims against the County of
Orange dated December 18, 1995. The Joint Agreement has been conveyed to
Minutes of Finance, Ad~ and Human Resources Committ~
Page 9
January 10, 1996
all Option A participants (the 190 schools, cities, special districts and other public
entities that signed the Option A version of the Comprehensive Settlement
Agreement that was approved in May 1995) for their individual consideration and
approval.
After discussion on this item the Committee moved, seconded and duly carried to
table this item until the February FAHR Committee meeting, since the County has
not yet filed a Financial Disclosure Statement.
(8) CLOSED SESSION
There was no closed session required.
(9) OTHER BUSINESS. IF ANY
None.
(10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A
SUBSEQUENT MEETING
No reports were requested.
(11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE
AGENDA FOR ACTION AND A STAFF REPORT
None.
(13) CONSIDERATION OF UPCOMING MEETING DATES AND ITEMS TO BE
DISCUSSED AT THOSE MEETINGS
The next Committee meeting is scheduled for Wednesday, February 14, 1996.
(14) ADJOURNMENT
The meeting was adjourned at 7:05 p.m.
~~
Lenora Crane
Finance, Administration and Human
Resources Committee Secretary
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\1996.MINIMFAHR1.96
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, Administration and Human Resources meeting held
on January 10, 1996, was duly posted for public inspection in the main lobby of the
Districts' offices on January 3, 1996.
IN WITNESS WHEREOF, I have hereunto set my hand this 1oth day of January, 1996.
Penny Kyle, Secretary each f he Boards of Directors of County
Sanitation Districts Nos. 1, 2, 3, , 6, 7, 11, 13 & 14 of Orange
County, California
Posted b, 1
By: ot-~~ ~
I
I 1996, 3 • 17
J:\WPDOC\FIN\CRANEIFPC.MTGIFAHR.96\CERT.POS\CERTP01.96
January 3, 1996
DISTRIBUTION
FAHR COMMITTEE MEETING PACKAGE
COMPLETE PACKAGES 41
Full Packages
Committee 11
Press 1
Tom Woodruff 1
Terry Andrus 1
Donald F. McIntyre 1
Blake P. Anderson 1
Judith A. Wilson 1
Jean Tappan 1
Corina Chaudhry 1
Gregg Mathews 1
Gary Hasenstab 1
Ed Hodges 1
Steve Hovey 1
Penny Kyle · 2
David Ludwin 1
Bob Ooten 1
Gary Streed 1
Nancy Wheatley 1
Dan Dillon 1
Jeff Esber 1
Steve Kozak 1
Mike White 1
Michelle Tuckman 1
Pat McNelly 1
Dan Tunnicliff (Bldg. 6) 1
Extras 5
Notice and Agenda Only: (11)
Posting 1
Gail Ca~ 1
Angela Holden 1
Clarice Marcin 1
Frankie Woodside 1
Patty Steeves 1
Fawn Elizondo 1
Guard Shack (Mark Esquer) 1
Extras 3
Treasurer's Report: Ron Zenk, Dist. 14
phone:
(714) 962-2411
mailing address:
P.O. Box 8127
Fountain Valley, CA
92728-8127
street address:
10844 Ellis Avenue
Fountain Valley, CA
92708-7018
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COUNTY 81--\1\JITATION DISTRICTS OF •RANGE COUNTY, CALIFORNIA
January 3, 1996
NOTICE OF MEETING
FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
COUNTY SANITATION DISTRICTS
NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14
OF ORANGE COUNTY, CALIFORNIA
WEDNESDAY, JANUARY 10, 1996 -5:30 P.M.
DISTRICTS' ADMINISTRATIVE OFFICES
10844 ELLIS AVENUE
FOUNTAIN VALLEY, CALIFORNIA 92708
A regular meeting of the Finance, Administration and Human Resources
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.
A Public Wastewater and Environmental Management Agency Committed to Protecting the Environment Since 1954
January 3, 1996
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
TENTATIVELY SCHEDULED
MEETING DATES
Finance,
Administration and
Human Resources Executive Committee
Committee Meetings Meetings Joint Board Meetings
January January 10, 1996 January 17, 1996 January 24, 1996
February February 14, 1996 February 21, 1996 February 28, 1996
March March 13, 1996 March 20, 1996 March 27, 1996
April April 10, 1996 April 17, 1996 April 24, 1996
May May 8, 1996 May 15, 1996 May 22, 1996
June June 12, 1996 June 19, 1996 June 26, 1996
July July 10, 1996 July 17, 1996 July 24, 1996
August None Scheduled None Scheduled August 28, 1996
September September 11, 1996 September 18, 1996 September 25, 1996
October October 9, 1996 October 16, 1996 October 23, 1996
November None Scheduled None Scheduled November 20, 1996
December None Scheduled None Scheduled None Scheduled
CS DOC D P .0. Box 8127 D Fountain Valley, CA 92728-8127 D Tel. (714) 962-2411 0 FAX (714) 962-3954
Ron Distribution After Meeting
Penny Kyle __
Lenora Crane
,,
ROLL CALL SHEET
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
MEETING DAT: January 10. 1996
COMMITTEE MEMBERS
GEORGE BROWN (Chair) .•••••••••••••••••••••
ROGER R. STANTON (Vice Chair) ••••••..•..••••
JAN DEBAY ••••••••••••••••••••••••••••.••.••
BURNIE DUNLAP •••••.••..••••••••••••••.....•
JAMES H. FLORA .....•••••••••••••.••••••••••.
JOHN M. GULLIXSON .••••••• ~ •..•...•••••••••.
WALLY LINN •••••••••..•••••••••••••.•••••..••
THOMAS SALTARELLI •••••••••••....•..•••••••
WILLIAM G. STEINER ••••••••••••••••••••••••.•
PEER A. SWAN (VJC) ••.....•••••.....•.••••••.
JOHN C. COX, JR. (JC)
OTHER DIRECTORS
-------· ........•................. -------......................... .
STAFF
PRESENT
DON MCINTYRE, GENERAL MANAGER •••••••..••••••••..•••••
BLAKE ANDERSON, ASST. GENERAL MANAGER •••..•...••••••
JUDITH WILSON, ASST. GENERAL MANAGER •••••••••..•••••••
NANCY WHEATLEY, DIRECTOR OF TECHNICAL SERVICES ••••••
GARY STREED, DIRECTOR OF FINANCE ....••••••••••••••••••
GARY HASENSTAB, DIRECTOR OF PERSONNEL ••••••..•••..••
ED HODGES, DIRECTOR OF MAINTENANCE ..••........•••••••
BOB OOTEN, DIRECTOR OF OPERATIONS •.•••••••••••.....••
DAVID LUDWIN, DIRECTOR OF ENGINEERING •••••••••••••.•••
STEVE HOVEY, DIRECTOR OF INFORMATION SERVICES ••.•••••
MICHELLE TUCHMAN, DIRECTOR OF COMMUNICATIONS ••.••••
STEVE KOZAK, FINANCIAL MANAGER ..•..•••••.•..•..•••••..
MIKE WHITE, CONTROLLER ••••........•••••••.........•••..
OTHERS
TOM WOODRUFF, GEN'L. COUNSEL ••••••••••••••••••••••••••
--------............•........................
ROLL1.96
TIME: 5:30 P .M.
ADJOURN ___ _
ABSENT
PRESENT
..
I
,
January 10, 1996
AGENDA
FINANCE, ADMINISTRATION AND HUMAN RESOURCES 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 10, 1996 -5:30 P.M.
!: ............................................................................................................................................................................................................................................... , ..................................... ____ ,. ....................... .
In accordance with the requirements of California Government Code Section 54954.2, this
• 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
the Committee subsequent to the posting of the agenda, or as set forth on a supplemental agenda
posted in the manner as above, not less than 72 hours prior to the meeting date.
. . .................................................................................. "1•·····"···•!"•• ............................................................... , ............................................. .__.................................................... .-......................... ,.
(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 ).
January 1 O, 1996
(4) The Committee Chairman, General Manager, Assistant General Manager(s),
Director of Finance/Treasurer, Director of Human Resources, Director of
Information Technology, and General Counsel may present verbal and/or written
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 Chair
(b) Report of General Manager
(c) (1) Report of Assistant General Manager -Administration
(2) Report of Assistant General Manager -Operations
(d) (1) Report of Director of Finance
(2) Report of Treasurer
( e) Report of Director of Human Resources
(f) Report of Director of Information Technology
(g) Report of General Counsel
(5) Approval of draft Finance, Administration and Human Resources Committee
Minutes for Meeting of November 8, 1995.
(6) Old Business.
FAHR.95-37 Consideration of motion to receive and file Quarterly Status Matrix
from Ernst & Young Administrative Function Review.
(Gary Streed, Steve Hovey, Gary Hasenstab)
FAHR95--45 Consideration of motion to review and file Joint Works Budget
Reviews prepared by staff for the quarter ended September 30,
1995. (Gary Streed)
(7) New Business.
FAHR96-01 Consideration of the following actions recommended by AIG
Financial Products Corp., for replacement of Letter of Credit,
Refunding Certificates of Participation, Series 1992 as follows:
(a) Consideration of motion authorizing staff to take all
necessary actions to expedite replacement of the Standby
Letter of Credit Agreement with The Industrial Bank of Japan,
with a Substitute Standby Certificate Purchase Agreement
with Barclays Bank.
-2-
January 10, 1996
(b) Consideration of motion authorizing staff to retain the
servrces of a bond counsel firm for this transaction as
recommended by General Counsel, in an amount not to
exceed $25,000, to be entirely reimbursed to the Districts by
AIG.
(c) Consideration of motion directing staff to submit all
necessary documents for this transaction to the Joint Boards
of Directors at their January 24, 1996 meeting, for execution.
(Steve Kozak)
FAHR96-02 Consideration of a motion to purchase four (4) Compaq server-
class computers for use as Districts-wide network servers from
AmeriData (Specification No. E-262R-2) for a total cost of $135,875
not including tax and 1% CMAS fees. (Steve Hovey)
FAHR96-03 Consideration of motion to provide standby and callback pay for
Programmers. (Gary Hasenstab)
FAHR96-04 Consideration of motion to approve benefit coverage for regular
employees working a reduced work week. (Gary Hasenstab)
FAHR96-05 Consideration of motion to approve revision of Resolution 95-105 to
reflect agreement with bargaining units to rescind provisions
granting a one-percent salary increase to all employees.
( Gary Hasenstab)
FAHR96-06 Consideration of motion to receive and file staff reports updating
benchmarking and performance measurement programs.
(Gary Streed)
FAHR96-07 Consideration of status report on Legal Services Committee
Activities. (Gary Streed)
FAHR96-08 Consideration of motion adopting Districts' position on SCAG's
Regional Comprehensive Plan and Guide -Finance Chapter and
authorizing staff to report to SCAG. (Judy Wilson)
FAHR96-09 Consideration of motion to receive and file staff report dated
January 4, 1996, re the Joint Agreement of the County of Orange, the
Official Investment Pool Participants' Committee and Each Option A
Pool Participant; and consideration of Resolution No. 96-_ approving
said Agreement. (Blake Anderson)
-3-
January 10, 1996
(8) Closed Session.
-··=~~=~0:~~~:~~~~:.•c°:~~~i.i~;;~~·~~;~~:Ei::~=~·:······1:::.,
closed session to consider matters of pending or potential litigation, or personnel matters,
pursuant to Government Code Sections 54956.9, 54957 or 54957.6.
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
r which are exempt from public disclosure under the California Public Records Act, may be
reviewed by the Committee during a permitted closed session and are not available for public
inspection. At such time as final actions are taken by the Committee on any of these subjects,
the minutes will reflect all required disclosures of information.
. ' ' .................................................................................................. , ......................................................... .. ....................................................................... ,_. ·-•--·•··-···
(a) Convene in closed session, 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.
(9) Other business, if any.
(10) Matters which a Director would like staff to report on at a subsequent meeting.
( 11) Matters which a Director may wish to place on a future agenda for action and a
staff report.
(12) Consideration of upcoming meeting dates and items to be discussed at those
meetings.
(13) Adjourn.
............. ....................................... ...................... , .................................................................................... -............................................................................................. .
Notice to Committee Members:
If you have any questions regarding the Agenda, or wish to place items on the Finance,
Administration and Human Resources Agenda, Committee members should contact the
Committee Chair or Secretary ten days in advance of the Committee meeting.
Committee Chair:
Secretary:
George Brown
Lenora Crane
(310) 431-2185
(714) 962-2411, Ext. 2501
(714) 962-3954 (FAX) \ •................................... , ............. , ........................................ -................................................................................................ .
-4-
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(4}(d)(1)
Director of Finance Report
Format
• Written Report
•overheads
•Slldes
• Flip Charts
Gary Streed
Anticipated Time 5 min.
FINANCE, ADMINJSTRATION AND HUMAN
RESOURCES COMMITTEE
(4}(d)(1 ):
Summary:
AGENDA FOR
JANUARY 10, 1996
Director of Finance Report
Since June 1995, the daily rate COP program remarketing agents have been
PaineWebber for the Series "A" and the 1993 Refunding COPs, and J.P. Morgan for the
Series "C" COPs. Most fixed rate Series "B" COPs have been refunded and the 1992
Refunding COPs have always been remarketed by PaineWebber in a weekly mode.
The attached graphs show the variable interest rates on each of the daily rate COPs
since the last report, and the effective fixed rate for the two refunding issues which are
covered by an interest rate exchange agreement commonly called a "swap."
Variable rates historically rise at the end of each calendar quarter, and especially at
year-end, because of business taxes and statements. The rates decline to prior levels
immediately in the following month. The average daily rate paid in the first two quarters
of FY1995-96 has been approximately 3.76%.
Staff will maintain our continuous rate monitoring and ongoing dialog with the
remarketing agents and rating agencies to keep the Committee fully informed about
developments in the program as they occur and at each meeting.
Staff Recommendation
Information only.
J:\WPDOC\FINICRANEIFPC.MTGIFAHR.96\COVERS.96\00F1.96
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Format
• Written Report
•OVerhead&
•Slides
•Fllp Charts
Originator __ _
Department Head Sign Off~
Garystreed
Anticipated Time 5 min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
(4)(d)(2):
Summary
AGENDA FOR
JANUARY 10, 1996
Treasurer"s Report
As previously reported, both PIMCO and Mellon signed their final contracts and began
managing our funds in September 1995.
Month-end reports are available from PIMCO on the sixth day after calendar month-end. Thus,
they are not available for the regular FAHR Committee mailing, but are distributed at the
meeting. Because there was no meeting in December, the November report is attached. The
PIMCO reports mirror our Investment Policy.
The Investment Policy adopted by the Joint Boards on May 24, 1995, includes reporting
requirements as listed down the PIMCO Monthly Report for the "Liquid Operating Monies" and
for the "Long-Term Operating Monies. n All of the Investment Policy requirements are being
complied with and performance to date exceeds the index rates.
State of Calif. LAIF
Bank of America
PIMCO -Short-term Portfolio
PIMCO -Long-term Portfolio
District 11 GO Bond Fund
Debt Service Reserves @ Trustees
Staff Recommendation
$1-1 ,443,353
241,095
60,356,395
234,421,057
11,886
33,883,435
$340,357,221
Staff recommends the Committee receive this report and the supplemental information which
will be available at the meeting, approve and forward the reports to the Executive Committee
and the Joint Boards.
J:IWPOOCIFINICRANEIFPC.MTGIFAHR.96\COVERS.96\TREAS1.96
January 10, 1996
S500
$400
!
1$300
'!
Js200
I
$100
Dee 6 Dec 31
CSDOC
TOTAL CASH & INVESTMENTS
Jan 31 Feb 28 Mar 31 Apr 30 May 31 June 30 July 31 Aug, 31 Sept 30 Oct 30 Nov. 30
J:IWPDOCIFINICRANEIFPC.MTG\FAHR.96\COVERS.96\TREAS1.96
.._
MONTHLY REPORT
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INVESTMENT MANAGEMENT PROGRAM
PIMCO'S PERFORMANCE MONITORING & REPORTING
(for the month ending November 30, 1995)
Liquid Operating Monies
14.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value:
Historical Cost:
14.1.2 MODIFIED DURATION Of Portfolio:
Of Index:
14.1.3 1 % INTEREST RATE CHANGE Dollar Impact (gain/loss) of 1 % Change:
14.1.4 REVERSE REPOS % of Portfolio in Reverse Repos:
(see attached schedule)
14.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days:
14.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality:
14.1. 7 SECURITIES BELOW "A" RATING % of Portfolio Below "A":
14.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance"
14.1.9 PORTFOLIO PERFORMANCE Portfolio Total Rate of Return:
1 Month:
3 Months:
12 Months:
Year-to-Date:
Index Total Rate of Return:
1 Month:
r:\markos \seymour\ocmoldom203.1 l 95
$60,814,921
$60,826,896
.15
.25 J_
$91,222 (.15%)
0%
88%
AA
0%
.49
----) -----
--
.44
MONTHLY REPORT
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INVESTMENT MANAGEMENT PROGRAM
Pll\fCO'S PERFORMANCE MONITORING & REPORTING
(for the month ending November 30, 1995)
Long Term Operating Monies
14.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value:
Historical Cost:
14.1.2 MODIFIED DURATION Of Portfolio:
Of Index:
14.1.3 1 % INTEREST RATE CHANGE Dollar Impact (gain/loss) of 1 % Change:
14.1.4 REVERSE REPOS % of Portfolio in Reverse Repos:
(see attached schedule)
14.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days:
14.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality:
14.1.7 SECURITIES BELOW "A" RATING % of Portfolio Below II A 11
:
14.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance"
14.1.9 PORTFOLIO PERFORMANCE Portfolio Total Rate of Return:
1 Month:
3 Months:
12 Months:
Year-to-Date:
Index Total Rate of Return:
1 Month:
r:\markos \seymour\ocmoltom203 .1195
~
$239,502,487
$237,004,461
2.15
2.40 -$5,149,303 (2.15%)
0%
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AA
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FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JANUARY 10, 1996
(5): Consideration of motion to approve the draft Finance,
Administration and Human Resources Committee Meeting
Minutes of November 8, 1995
Summary
Attached is a draft of the Finance, Administration and Human Resources Committee
meeting Minutes of November 8, 1995, for approval by the Committee.
Staff Recommendation
It is recommended that the minutes of the November 8, 1995, Finance, Administration
and Human Resources Committee meeting be approved. These minutes were
submitted to the Joint Boards at their November 15, 1995 meeting, and will be
forwarded to the Executive Committee for their consideration and filed.
J:IWPDOC\FIN\CRANE\FPC.MTGIFAHR.9611996.MINICVRMIN1.96
County Sanitation Districts
of Orange County, California
P.O. Box 8127 • 10844 Ellis Avenue
Fountain Valley, CA 92728-8127
Telephone: (714) 962-2411
DRAFT
MINUTES OF FINANCE,
ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
Wednesday, November 8, 1995, 5:30 P.M.
A meeting of the Finance, Administration and Human Resources Committee of the
County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County,
California was held on November 8, 1995 at 5:30 p.m., at the Districts' Administrative
Offices.
(1) ROLL CALL
The roll was called and a quorum declared present, as follows:
Committee Directors Present:
John C. Cox, Jr., Joint Chair
George Brown, Chair
Jan Debay
James Flora
Wally Lynn
Thomas Saltarelli
William G. Steiner
Peer Swan
Committee Directors Absent:
Burnie Dunlap
John M. Gullixson
Roger R. Stanton, Vice Chair
Other Directors Present:
John Collins
Don Griffin
Pat McGuigan
Staff Present:
Donald F. McIntyre, General Manager
Blake P. Anderson, Assistant General Manager
Judith A Wilson, Assistant General Manager
Gary Hasenstab, Director of Human Resources
Ed Hodges, Director of Maintenance
Steve Hovey, Director of Information Technology
Bob Ooten, Director of Operations
David Ludwin, Director of Engineering
Gary Streed, Director of Finance
Nancy Wheatley, Director of Technical Services
Michael D. White, Controller
Stephen V. Kozak, Financial Manager
Mike Peterman, Human Resources Supervisor
Others Present:
Thomas L. Woodruff, General Counsel
Terry Andrus, General Counsel
Dennis Vlasich, Keery Consulting Group
Michael Moreland, Moreland & Associates
Charles Acocella, Moreland & Associates
Julie Pritchard, Moreland & Associates
(2) APPOINTMENT OF A CHAIRMAN PRO TEM
No appointment was necessary.
Minutes of Finance, A in. and Human Resources Commi" ~
Page2
November 8, 1995
(3) PUBLIC COMMENTS
No comments were made.
(4) REPORTS OF THE COMMITTEE CHAIR. GENERAL MANAGER, ASSISTANT
GENERAL MANAGER(S), DIRECTOR OF FINANCE/TREASURER. DIRECTOR
OF HUMAN RESOURCES, DIRECTOR OF INFORMATION TECHNOLOGY
AND GENERAL COUNSEL
(a) Report of the Committee Chair
Committee Chair George Brown announced there would be an Executive
Committee meeting starting at 7:00 p.m., immediately after this meeting.
(b) Report of the General Manager
The General Manager, Donald F. McIntyre, reported that the staff
recommendation for a consultant to assist with the new Financial
Information System (FAHR95-38) had been distributed as advised in the
agenda. He also reminded the Directors of the Plant No. 2 tour scheduled
for Saturday, November 18. The General Manager and the Director of
Technical Services will be meeting with Directors to prepare for "Red
Team" meetings regarding excess capacity charges.
(c) Report of Assistant General Manager -Operations
Blake Anderson reported on the status of the staff and consultant work
with the County of Orange regarding the potential purchase of landfills. A
more detailed report was scheduled for the Executive Committee meeting
later in the evening. A County Board of Supervisors meeting on the topic
is scheduled for November 14, the day prior to our next Board meeting.
Report of Assistant General Manager -Administration
Judy Wilson introduced Mike Peterman whose employment as Personnel
Supervisor started this month.
(d) Report of the Director of Finance/Treasurer
(1) Finance Director/Treasurer Gary Streed updated the Committee on
the status of the Districts' COP program which he illustrated by
showing a graph of the variable interest rate history on each of the
daily rate COPs, and the effective fixed rate for the two refunding
issues. The two refunding issues are covered by an interest rate
exchange agreement commonly called a "swap." Mr. Streed noted
Minutes of Finance, Adrr,., and Human Resources Committe')
Page 3
November 8, 1995
that variable rates historically rise at the end of each quarter,
because of business taxes and statements, and usually decline to
prior levels immediately in the following month.
Staff will continue to keep the Committee fully informed about
developments in the program as they occur each month.
(2) Mr. Streed noted that October is the first full month of external
money management by Pacific Investment Management Company,
"PIMCO," the Districts' Investment Manager, and Mellon Trust
Company, Custodial Bank. A monthly report prepared by PIMCO
and Mellon was handed out at the beginning of the meeting. The
Committee reviewed the Monthly Report and the Portfolio Detail By
Sector and Portfolio Summary By Sector reports. In conclusion, Mr.
Streed advised that the total CSDOC cash and investments amount
to $337,832,649 as of October 31, 1995.
The Committee moved, seconded and duly carried a motion to
receive, approve and forward this report to the Executive
Committee and Joint Boards.
(e) Report of the Director of Human Resources
Gary Hasenstab had no report.
(f) Report of the Director of Information Technology
The Director of Information Technology, Steve Hovey, reported that the 60
personal computer purchases authorized last month had been completed
for a final cost approximately $11,000 less than that authorized.
(g) Report of General Counsel
General Counsel had no report.
(5) APPROVAL OF MINUTES
It was moved, seconded and duly carried to approve the draft minutes of the
October 11, 1995, meeting of the Finance, Administration and Human Resources
Committee.
Minutes of Fiflance, A ,in. and Human Resources Cammi' '9
Page4
November 8, 1995
(6) Consideration of PDC95-36 -Consideration of motion to solicit proposals
for Professional Planning. Design and Construction services for three
projects as follows:
~roject No. 1 :
Project No. 2:
Project No. 3:
Engineering Services for Investigation and Repair of
Ocean Outfalls
Management of Peak Hydraulic Discharge
Determination of Financial Charges
Dave Ludwin, Director of Engineering, and Tom Dawes of his staff gave a brief
presentation detailing three separate, but related projects which staff is
requesting authorization to solicit RFPs. Most of the proposed work is Master-
Plan related, and the land use data necessary for the Management of Peak
Hydraulic Discharge and Determination of Financial Charges is nearly identical.
Several different Professional Services Agreements will be required to complete
the projects.
After discussion on this item, it was moved, seconded and duly carried to
recommend the Executive Committee authorize staff to request proposals on the
three projects as noted above.
(7) OLD BUSINESS
FAHR95-24 Consideration of motion extending early retirement incentive
program provisions for all eligible employees:
(a) Consideration of motion to recommend a Board
Ordinance adopting the provisions of Government Code
Section 31641.04 authorizing all eligible Districts'
employees to receive two years additional service credit
for retirement purposes.
(b) Consideration that the Ordinance should specify that
provisions of the Early Retirement Incentive Program
would be effective January 1 through March 30, 1996,
and that the total cost-savings of positions filled at a
lower level or held vacant for a period of time shall
exceed the total actuarial cost of the additional service
credit granted and associated paid leave payoff costs.
..
Minutes of Finance, Adrr------1 and Human Resources Committe~
Pages
November 8, 1995
(c) Consideration that, for a period of five years, or until
such time as the full actuarially determined cost is paid
to OCERS. the Districts' Controller will conduct an
annual post-audit to verify that the savings exceed the
actuarial and associated costs attributable to the
additional service credit, and report the findings of that
audit to the Finance, Administration and Human
Resources Committee. The first report will be presented
during the fourth quarter of fiscal year 1996.
Gary Hasenstab reported that the cost of the 1995 program has already been
exceeded by avoided payroll costs for the first four months, and that the program
has been very successful.
After discussion on this matter, it was moved, seconded and duly carried to
recommend approval of the extension of the early retirement incentive program,
as indicated above, to the Executive Committee.
FAHR95-38 Consideration of motion authorizing selection of a consultant
and a professional services agreement for a New Financial
Information System. Phase Ill, Selection Process for
Hardware and Software: and Phase IV, Implementation and
Acceptance of the Selected Hardware and Software
Solutions.
Mike White, Controller, advised that the firm of Deloitte &Touche has been
selected to complete Phases I and II for the selection, acquisition and installation
of a new financial information system within the Districts' Finance Department. In
October 1995, the FAHR Committee approved the F.I.S. Request for Proposals
and authorized staff to solicit proposals for professional consulting services to
complete the project.
Mr. White reported that four (4) proposals were received on Friday, October 28,
1995, from Ernst & Young LLP, A.E.F. Consulting Systems, Intelligent Directions
Consulting, and Kerry Consulting Group. Interviews were conducted on
November 2 and 3, 1995. After interviewing and evaluating each of these
consulting firms, Kerry Consulting Group was found to offer the best services
consistent with the requirements of the project, and their bid was found to be .
within the amount budgeted for the project.
Mr. Dennis Vlasich was introduced and he described his experience, knowledge
and approach to projects of this type.
Minutes of Finance, A ~in. and Human Resources Comm;· ~
Page6
November 8, 1995
After discussion on this matter, it was moved, seconded and duly carried to
approve staff's recommendation to enter into a professional services agreement
with Kerry Consulting Group for a New Financial Information System, Phase II,
Selection Process for Hardware and Software; and Phase IV, Implementation and
Acceptance of the Selected Hardware and Software Solutions; for a sum not to
exceed $58,263.
8. NEW BUSINESS
FAHR95-44 Consideration of Resolution No. 95-, Revising Districts'
Procedure for Settlement of Claims Made Against the
Districts; Settlement of Claims Made by the Districts;
Collection of Delinquent Accounts Owing to the Districts;
Settlement of Civil or Administrative Actions; and Settlement
of Worker's Compensation Actions: and repealing Resolution
Nos. 93-13 and 90-89.
Gary Streed reported that the Directors approved Resolutions in 1990 and 1993
which established staff's authority to settle different types of claims by and
against the Districts. The purposes of this proposed Resolution are to combine
the existing authorities into one Resolution and to revise the dollar thresholds of
the authority levels. The authority levels proposed will parallel those recently
approved for purchases and other authority delegations in Resolution No. 95-62.
Mr. Streed summarized the proposed changes to be included in the proposed
resolution.
After discussion on this item, it was moved, seconded and duly carried to
recommend the Executive Committee approve a resolution amending claim
settlement procedures, and to direct staff to report annually on settlement
activities and results.
FAHR95-45 Consideration of motion to review, approve and file Joint
Works Budget Reviews prepared by staff for the quarter
ended September 30, 1995.
Gary G. Streed presented the Joint Works Budget reviews for the quarter ended
September 30, 1995. He reviewed the summary statements of the Joint Works
Operating Costs, the Joint Works Capital Improvement Program, and the costs of
the workers' compensation, public liability and health plan self-insurance funds for
the three months of fiscal year 1995-96, as well as some comparative graphics.
After discussion on this item, it was moved, seconded and duly carried to review,
approve and file these reports. Staff will report in January on labor charges
outside of the Treatment Plants.
Minutes of Finance, Adrr-~and Human Resources Committe~
Page 7
November 8, 1995
Summary reports for the Joint Works and the individual Districts will be
considered by the full Boards of Directors at their next meeting.
FAHR95-46 Consideration of motion to receive, approve and file the
Annual Audit Report submitted by Moreland & Associates,
Certified Public Accountants, and staff: the annual
Management Letter, the Auditor's Report to the Finance,
Administration and Human Resources Committee, and the
Appropriations Limit Report; and forward the Comprehensive
Annual Financial Report to the Executive Committee.
Mike White announced that the Districts' independent auditors, Moreland &
Associates, have completed their examination for 1994-95. Each year, the FAHR
Committee reviews the results of the audit and the corresponding management
letter. He advised that this year, the Comprehensive Annual Financial Report
(CAFR) has been completely prepared in-house, for the first time. The CAFR will
be submitted to the Government Finance Officers' Association (GFOA) for their
review. Michael Moreland, Partner and Charles Acocella, Senior Manager, and
Julie Pritchard, were in attendance and answered some of the Directors'
questions regarding the audit and the CAFR.
After some discussion, it was moved, seconded and duly carried to receive and
approve the: Annual Audit Report submitted by Moreland & Associates, Certified
Public Accountants, and staff; the annual Management Letter; the Auditor's
Report to the Finance, Administration and Human Resources Committee; and the
Appropriations Limit Report; and forward the Comprehensive Annual Financial
Report with an editorially revised transmittal letter to the Joint Boards.
(9) CLOSED SESSION
There was no closed session required.
(10) OTHER BUSINESS, IF ANY
None.
(11) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A
SUBSEQUENT MEETING
No reports were requested.
(12) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE
AGENDA FOR ACTION AND A STAFF REPORT
None.
Minutes of Finance, Ar· ·in. and Human Resources Commit· l
Pages
November 8, 1995
(13) CONSIDERATION OF UPCOMING MEETING DATES AND ITEMS TO BE
DISCUSSED AT THOSE MEETINGS
The next Committee meeting is scheduled for Wednesday, January 10, 1996.
(14) ADJOURNMENT
The meeting was adjourned at 7:00 p.m.
GGS:lc
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.95\FAHR.MIN\MFAHR11.95
!:!ill!!!!!
0 Written Report
•Ovemeads
•Slides
0 Flip Charts
OriginaloT"""'-IJ-=-;;::..
G. Streed, Stew, Hovey, Gary H
Department Head Sign Off~~=--
Gary Streed
Anticipated Time 5 Min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
FAHR95-37:
Summary:
AGENDA FOR
JANUARY 10, 1996
Consideration of Motion to receive and file Quarterly
Status Matrix from Ernst & Young Administrative
Function Review
The Ernst & Young reviews of the Human Resources and Finance Departments were
presented to the Executive Committee in February and July 1995. The Human
Resources Department includes divisions for Administration, Human Resources and
Training, and Safety and Emergency Response. The Finance Department is currently
made up of functional divisions for Administration and Finance, Accounting, and
Purchasing and Warehousing.
The Information Technology Department was formed in 1995-96 and separated from
the Finance Department while the Ernst & Young report was being completed. The
Information Technology Department includes divisions for Administration, Hardware
Support and Software and Plant Automation Support.
The Ernst & Young recommendations for all three departments, which are the bulk of
the Administrative organization, have been combined into one Status Matrix for the
FAHR Committee to review and monitor progress. Staff will update and submit this
report on a quarterly basis.
Staff Recommendation
Receive and file Status Matrix.
J:\WPDOCIFINICRANE\FPC.MTGIFAHR,98\COVERS.98\FAHR95.37A
FINANCE, ADMINISTRATION & HUMAN RESOURCES COMMITTEE
STATUS MATRIX
ERNST & YOUNG ADMINISTRATIVE FUNCTION REVIEW
INFORMATION TECHNOLOGY
January 1 O, 1996 ~
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1. Develop a Charter, Mission and Vision for Information Completed
Systems.
2. Finalize the RFP for the Strategic System Information Plan 12/31/95 A preliminary draft has been prepared. The final draft will
(SISP). be reviewed by outside experts.
3. Perform the SISP study. 3/96 Start study when RFP approved.
4. Review staffing and organization needs based on charter and This will begin when SISP is completed.
SISP.
5. Develop standards for all PC's and software products. Ongoing PC purchases are limited to the Gartner group "Tier 1 and
2" suppliers.
6. Develop a plan to and introduce the standards over a period of Alternative procurement methods including leases, and a
time to minimize disruption, maximize investment, and allow help desk service are being evaluated. Present methods of
training. procurement utilize state contracts for volume pricing.
7. Survey users to determine the need for and costs and benefits 1/1/96 Will be completed in conjunction with new training staff in
of information technology training. Human Resources.
8. Study impact of NT File Server. Completed
9. Implement NT File Server. 3/1/96 Implementation will be phased. Purchase of new servers to
be submitted to Joint Boards via Committee in January.
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January 10, 1996
FINANCE, ADMINISTRATION & HUMAN RESOURCES COMMITTEE
STATUS MATRIX
ERNST & YOUNG ADMINISTRATIVE FUNCTION REVIEW
FINANCE & ACCOUNTING
1. Select and Implement New Financial Information System.
2. Develop and Maintain Standard Financial Policies and
Procedures.
3. Improve Monthly Accounting Close Cycle Times.
4. Improve Budget Process and Organizational Focus.
5. Improve Payroll Process.
6. Outsource Deferred Compensation Plan (457).
7. Update Cost Allocation Plan .
8. Develop Internal Audit Program.
9. Improve Fixed Assets Process.
10. Eliminate Large Petty Cash Fund .
11. Improve User Billing Process.
-2-
9/30/97 I Kerry Consulting Group retained. RFP mailed. Bidder
conference 12/14/95. Proposals due 1/18/96.
1 /31 /96 I Assembled copies of current policies & procedures.
Revisions are underway where appropriate.
11/30/95 I Determining critical path accounting items. Should get
to within 5 working days when new F.I.S. is in place.
5/31 /96 I New Analyst positions filled 12/95. Budget manual
being prepared.
6/30/96 I Coordinate along with selection and implementation of
F.I.S. Payroll moved to Accounting July 95.
1 /31 /96 I Administration moving to Lincoln National.
6/30/96 I Preparing to use external consultant to prepare a plan.
6/30/96 I May outsource. Function should report to G.M.
2/28/96 I Identifying specific fixed asset problems, road blocks
and solutions.
9/30/95 I Developing new procedures for emergency cash
disbursements to replace petty cash checks.
3/31/96 I Have begun to move several commercial accounts to
actual billing. Additional changes being evaluated.
FINANCE, ADMINISTRATION & HUMAN RESOURCES COMMITTEE
STATUS MATRIX
ERNST & YOUNG ADMINISTRATIVE FUNCTION REVIEW
PURCHASING & WAREHOUSING
January 10, 1996 ~
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1. Implement and Maintain a Formal Supplier Rating Program. 12/95 In process to analyze off-the-shelf PC software package.
2. Align Buyers with Inventory Classes. Completed
3. Utilize Blanket Purchase Orders for Inventoried Items. 7/96 Current F.I.S. does not support this.
4. Increase Formal Bid Threshold. Completed Board action threshold raised to $50,000
5. Implement and Report Key Purchasing Performance Metrics. 3/96 Purchasing team and management developing metrics and
methods.
6. Contract with Suppliers of Low Cost Stock Items to Maintain 2/96 In process of eliminating low cost general hardware from
Bins at Point of Usage. inventory.
7. Categorize Inventory by ABC Classes. 12/95 Collecting historical inventory data needed.
8. Initiate a Cycle Counting Program to Measure/Maintain 1/96 This will be applied after ABC items are identified. 100%
Inventory Accuracy. count completed 12/95.
9. Review Requirement for Expanded Plant 2 Warehouse. Completed PDC recommended rehab of existing.
10. Aggressively Pursue Reduction of Excess and Obsolete Ongoing Need cooperation with other departments to record
Inventory. expenses. Method established not to increase cost/mg.
11. Develop and Implement a Data Retention/Maintenance Completed Changes made to current F.I.S.
Procedure.
12. Generate ABC, Excess Inventory and Obsolete Inventory Ongoing Accumulating ABC data, nonmovlng inventory reports
Management Reports. issued. Working with consultant programmer.
13. Implement and Report Key Warehousing Performance 12/96 Warehousing team and management developing metrics
Metrics. and methods.
14. Select and Implement New Finance System (Inventory and 6/96 See Accounting Division, item 1.
Purchasing).
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1.
2.
3.
4.
5.
6.
7.
8.
9.
FINANCE, ADMINISTRATION & HUMAN RESOURCES COMMITTEE
STATUS MATRIX
ERNST & YOUNG ADMINISTRATIVE FUNCTION REVIEW
HUMAN RESOURCES & TRAINING
J:;~:::.;;:;::i::ilrfI:tefh~fl&:'.v~u'~~:/~ec~~:metj~~ti;~,;J!:[[[::1:::[,,:Jfi::frt:l)i;';i:'.!.,}[tit~W:: ·,:tljf'~'a~f~\::,:):!; ::::!:::;l~i:r -~-t!iliiliL}::,11':itlfili:l :Jr:iiffll:ift.;J:!!1~!:[iiii11il!i;li1llill1:ill:iii:ifliiii!:iiiti!itii:!1:iil'
Develop integrated Human Resource policies and procedures 12/31/95 Completed.
and maintain on an annual basis in accordance with resolution
amendments.
Revise all Districts' Classification Specifications and review on 1/1/96 Completed. With the exception of Technical Services.
a three-year basis.
Improve the effectiveness of the Management Performance 3/31/96 Ongoing meetings with MPRP group. On schedule.
Review Program (MPRP) in managing and rewarding
performance, and providing performance review training to
managers and supervisors during the 3rd quarter.
Evaluate alternative base pay administration systems 6/30/96 Researching literature on broadbanding. On schedule.
including broadbanding and alternative reward strategies such
as variable pay in a staff report; present final report to Finance
Administration and Human Resources Committee.
Implement a quality program of comprehensive training in 3/31/96 Training Manager hired. Implementation of quality
management, supervisory, technical, safety and other areas. training programs will be ongoing. Training Supervisor
will start on 1/8. On schedule.
Maintain recruitment turnaround of 30 days for outside non-12/31/95 Metrics completed. Non-exempt recruitments currently
exempt and 65 days for outside exempt positions, and 30 take 134 days, exempt recruitments 94 days. Study
days for all promotional positions. underway to identify ways to address this problem.
Major effort will be taken to shorten these turnaround
times.
Conduct the welcome and tour day activity of the new hire Ongoing Completed. Ongoing.
orientation program bi-monthly.
Provide sexual harassment training by an outside source; 6/30/96 Completed.
evaluate the effectiveness of the training by monitoring formal
and informal complaints in a quarterly report.
Complete a revised Employee Handbook. 12/31/95 Delays in photo shoot will project us to mid-January.
Two weeks off schedule.
-4-
FINANCE, ADMINISTRATION & HUMAN RESOURCES COMMITTEE
STATUS MATRIX
ERNST & YOUNG ADMINISTRATIVE FUNCTION REVIEW
HUMAN RESOURCES & TRAINING
1 o. Develop and implement meaningful Human Resources
performance metrics and reporting criteria.
11 . Conduct a customer satisfaction survey of all Human
Resource customers and provide appropriate customer
service training to all Human Resources staff.
12. Ensure that all employee performance reviews and MPRP
reviews are completed in a timely manner.
13. Develop a new hire orientation video which includes new hire
information, safety info., and sexual harassment clip.
14. Evaluate the advisability of an employee services program to
address issues regarding wellness, child care, cafeteria,
and/or ATM's.
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT .96\STATSMTX.96
-5-
12/31/95 I Completed
12/31/95 I Completed. Results to be communicated by 12/20.
12/31 /95 I All reviews are in with the exception of about 3 MPRPs
from Tech. Services which were committed 12/8. May
be two weeks off schedule.
3/31/96 I Outline format no later than 1/15/96. Video consultant
to be identified no later than 1/31/96. On schedule.
3/31/96 I CosUBenefrt analysis being conducted. On schedule.
..
..
.,
Format
D Written Report
•Overheads
•Slides
•Flip Charts
Department Head Sign
Anticipated Time 10 Min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
FAHR95-45:
Summary:
AGENDA FOR
JANUARY 10, 1996
Consideration of motion to review and file revised Joint
Works Budget Reviews prepared by staff for the quarter
ended September 30, 1995.
The Committee reviewed preliminary reports at their November meeting. Attached are
revised summary statements of the Joint Works Operating Costs for the three months of
fiscal year 1995-96, some comparative graphics, and graphs of the Measurement
Tracking and Activity Trends from the 1995-96 budgets.
With one quarter of the year gone, 20% of the net joint operating budget has been
expended. Net costs are down $54,855 or .49% compared with the same period last
year. At the same time, flows have increased less than 1 %, resulting in a $3.20 per
million gallons decrease in the unit cost to treat and dispose of sewage, to $508.98 per
million gallons, $118.32 below the approved budget.
The graphical pages headed "Measurement Tracking" were included with the November
Agenda. These represent progress to date on the various projects that each of the
Divisions budgeted for the year.
A new graphical section headed "Activity Trends" is also included. Generally, these
measurable performance activities are the same as those proposed in the Budget. In a
few instances, however, the activities have been revised to better match the goals and
functions of the Divisions. Changes are expected throughout the year as our
experience and knowledge with performance measurements increases.
Staff Recommendation
Staff recommends that the Committee review, approve and file these revised reports,
and approve the format for future quarterly reports.
J:\WPDOC\FIN\CRANEIFPC.MTG\FAHR.96\COVERS.96\FAHR95.45A
January 10, 1996
FAHR95-45:
STAFF REPORT
Summary Financial Report for Three Months Ended
September 30, 1995
Transmitted herewith is the Summary Financial Report for three months ended September
30, 1995. The statements summarize the fiscal activities of the joint operations.
JOINT OPERATING
The Joint Operating fund accounts for operations, maintenance, and administrative
activities relative to the Districts' jointly-owned treatment and disposal facilities. The JO
expenditures along with the self-funded insurance program costs are monitored by the
Finance, Administration and Human Resources Committee and if some unexpected
expenditures are experienced, they are reviewed by the Committee.
Salaries and Wages -Approximately 12% of authorized positions were unfilled during the
quarter and, thus, some minor payroll savings have been realized to date as total salary
expenses are 21. 79% of the budget. These positions will not be filled until necessary, but
the vacancy rate is expected to decline in the balance of the year.
Employees' Benefits -Includes Retirement, Workers' Compensation, Unemployment
Insurance, Group Medical Insurance and Uniforms. The OCERS rate was increased for
1995-96.
Charqebacks to Districts and CORF -Payroll expenses are charged back to CORF
through the cost accounting system for work on the treatment plants' capital expansion
program, and to individual Districts for work on Districts' collection facilities capital
expansion projects as well as maintenance and repair of said systems. Source Control
Division charges to respective Districts are also included in these chargebacks. The
decrease in this category reflects our reduced capital improvement program for 1995-96.
Gasoline, Oil & Fuel -Includes all fuel for motor pool. A large portion is recovered through
our equipment billing system and included in revenue below.
Insurance -Budget amount includes Board and staff out-of-county travel policy, employee
fidelity, boiler, fire, earthquake and all risk insurance policies, and pro-rata cost of the self-
funded liability insurance program. Expense is in line with increased annual budget.
CS DOC [l P O Box 8127 [l Fountain Valley, CA 92728-8127 0 Tel. (714) 962-2411 0 FAX (714) 962-3954
FAHR95-45
Page2
January 10, 1996
Memberships -Includes the cost of membership in CASA, AMSA, SARFPA, WateReuse
and other organizations. Annual membership costs are recorded when paid.
Office Expense -This account includes various types of office supplies, postage,
stationery, computer supplies and related items.
Odor Control Chemicals -Primarily for influent and sludge odor control at treatment plant
sites. The main chemicals used to control odors are hydrogen peroxide and ferrous
chloride. Ferric chloride is used as a supplemental odor control chemical, and caustic
soda is also used in air scrubbers throughout the plants to reduce hydrogen sulfide
emissions. Use of chlorine has essentially been eliminated at the plants.
Chemical Coagulants -Expenditures for this item are required to dewater our biosolids
prior to disposal to comply with Regional Water Quality Control Board requirements.
Other Operating Supplies -Miscellaneous items such as solvents, cleaners, janitorial,
tools, lab chemicals, etc., purchased throughout the year.
Contractual Services -The major elements in this line item are payment for grit removal
and disposal and payment for removal and off-site beneficial reuse of biosolids or sludge.
These expenses which are a significant part of our total costs are right at the budget
projections.
Professional Services -Primarily consists of General Counsel's fees, other legal services,
audit fees, and miscellaneous consulting services. The decrease from 1994-95 reflects
the Ernst & Young costs of that year.
Printing and Publications -Includes all reproduction activities in-house, including copier
rental, and with outside services and recruitment advertising.
Equipment Rental
Outside Equipment Rental -Primarily for the rental of large cranes and equipment
necessary for removing and replacing major pumps, engines and other large
equipment during the course of maintenance and repair operations.
CSDOC Equipment Rental -Reflects the charges for District-owned equipment used
for overhead type activities. All equipment use is charged to the appropriate work
order and fund through the cost accounting system.
Repairs and Maintenance -This item includes parts and supplies for repair of plant
facilities. Escalating costs continue to have an impact on this item. Generally, this
account runs close to budget by year-end due to the unpredictability of major equipment
failures.
FAHR95-45
Page3
January 10, 1996
Research and Monitoring -Budget includes funds for the ocean monitoring contract
required by our NPDES pennit. Other projects include operational research and
evaluation of processes to develop optimum operating parameters, and also include the
Districts' annual share of participation in the Southern California Coastal Water Research
Project.
Travel, Meetings & Training -Major items are authorized by specific Board actions.
Expanding activities of regulatory agencies and the Clean Water Act reauthorization have
required additional staff and Board travel. Increased training is a focal point of this year's
budget and our annual goals. Training costs will increase in the second half of the year as
our program is implemented. These costs are reviewed separately by the Finance,
Administration and Human Resources Committee.
Utilities -The major item in the Utilities Expense Account is for natural gas purchased for
central power generation. Some power is still purchased for parts of the plants not served
by central generation. Total utilities expenses are in line with the budget, and are down
$150,833 from last year.
Other Expenses -For items not chargeable elsewhere such as freight, safety supplies,
grounds maintenance supplies, etc.
Prior Year's Expense -This account is required by the Unifonn Accounting System and
represents adjustments to an operating or non-operating account balance from the
previous year or payment of charges which could not be accrued at year end. Generally,
all expenses to this account are recorded in the first quarter.
Allocation to Districts and CORF -This is an account established in connection with the
cost accounting system and represents materials, supplies and services, overhead
chargebacks to the individual Districts and CORF.
GGS:lc
J:\WPDOCIFIN\CRANEIFPC.MTG\FAHR.95\STAFF.RPnSRFAHR95.45
12/18/95
1 . Net Salaries, Wages & Benefits
2. Odor Control & Chemical Coagulants
3. Contractual Services
4. Professional Services
5. Equipment Charges.
6. Repair & Maintenance
Materials & Services.
7. Research & Monitoring.
8. Utilities.
9. Other Materials, Supplies
& Outside Services.
10. Total Joint Operating Expenses
11. Revenues & Offsets.
12. NET JOINT OPERA TING EXPENSE
13. Gallonage Flow (MG)
14. Gallonage Flow (MGD)
15. Gallonage Charge ($'s/MG)
FPCR1294.XLS 4:11 PM
JOINT OPERATING FUND BUDGET REVIEW & SUMMARY
COMPARISON OF BUDGETED & ACTUAL EXPENDITURES
FISCAL YEAR TO DATE 1995-96
(A) (B) (Cl (D) (E)
Budget Expenditures Expenditures Increase % Increase
1995-96 through through or (Decrease)
9/30/95 9/30/94 (Decrease)
$28,667,000 $6,737,552 $5,930,738 $806,814 13.60 %
5,363,500 733,664 938,818 (205,154) (21.851%
7,269,500 1,631,781 1,706,920 (75,139) (4.40)%
1,512,600 321,803 473,831 (152,028) (32.08)%
235,700 56,936 83,605 (26,669) (31.90)%
4,209,900 841,028 959,624 (118,596) (12.36)%
3,095,000 338,480 619,117 (280,637) (45.33)%
3,375,500 567,467 718,300 (150,833) (21.00)%
4,451,300 825,912 772,459 53,453 6.92 %
$58, 180,000 $12,054,623 $12,203,412 ($148,789) (1.22)%
(3 ,800,000) (947,039) (1,040,973) (93,934) (9.02)%
$54,380,000 $11,107,584 $11,162,439 ($54,855) (0.49)%
86,688.61 21,807.71 21,794.23 13.48 0.06 %
236.85 237.04 236.89 0.15 0.06 %
$627.30 $509.34 $512.17 ($2.83) (0.55)%
(F) (G)
% Budget Remaining
Realized Budget
23.50 % $21,929,448
13.68 % 4,629,836
22.45 % 5,637,719
21.27 % 1,190,797
24.16 % 178,764
19.98 % 3,368,872
10.94 % 2,756,520
16.81 % 2,808,033
18.55 % 3,625,388
20.72 % $46, 125,377
24.92 % (2,852,961)
20.43 % $43,272,416
I
25.16 %
12/18/95
JOINT OPERATING FUND & WORKING CAPITAL FUND
SUMMARY BUDGET REVIEW -REVISED
3 MONTHS ENDED 9-30-95
DESCRIPrION
SALARIES, WAGES, & BENEFITS
1 SALARIES & WAGES
2 EMPLOYEE BENEFITS:
3 RIITIREMENT
4 WORKERS COMP
5 UNEMPLOYMENT INS
6 GROUP INSURANCE
7 UNIFORM RENT AL
8 TOT AL BENEFITS
9 SALARIES, WAGES, & BENEFITS
10 W.0. SALARIES & BEN. ALLOC.:
11 DIRECT CHARGES-CORF/DIST
12 COST ALLOC-CORF/DIST
13 W.O. SALARIES & BENEFITS
14 NET J.O. PAYROLL
MATERIALS, SUPPLIES, & SERVIC
15 GASOLINE, DIESEL & OIL
16 INSURANCE
17 MEMBERSHIPS
18 OFFICE EXPENSE -SUPPLIES
19 OFFICE AUTOMATION
20 OFFICE EXPENSE -OTHER
21 OPERATING SUPPLIES:
22 ODOR CONTROL CHEMICALS
23 SULFIDE CONTROL CHEMICALS
24 CHEMICAL COAGULENTS
25 LAB CHEMICALS & SUPPLIES
26 TOOLS
27 SOLV, PAINTS, &JAN. SUPPLIES
28 OTHER OPERATING SUPPLIES
29 CONTRACTUAL SERVICES:
30 GROUNDSKEEPING & JANITOR!
31 OUTSIDE LAB SERVICES
32 SOLIDS REMOVAL
33 OTHER WASTE DISPOSAL
34 OXYGEN PLANT OPER & MTCE
35 OTHER CONTRACTUAL SERVIC
36 PROFESSIONAL SERVICES:
37 LEGAL SERVICES
38 AUDIT & ACCOUNTING
39 ENGINEERING
A B ·--EXP
BUDGET THRU
1995-96 9-30-95
32,283,000 7,035,264
3,077,000 678,844
225,000 51,931
75,000 4,064
4,207,000 899,980
100,000 12,718
7,684,000 1,647,537
39,967,000 8,682,801
(6,875,000) (1,419,990)
(4,425,000) (525,259)
(11,300,000) (1,945,249)
28,667 ,000 6,737.552
F.S
175,000 29,353
1,250,000 363,707
58,000 28,400
203,100 28,286
157 ,500 30,347
102,300 18,000
2,103,500 245,769
1,715,000 246,097
1,545,000 241,798
509,000 85,109
125,400 24,439
146,000 27,842
207,500 51,780
213,000 21,705
150,000 9,364
5,425,000 1,373,753
140,000 13,009
510,000 127,764
831,500 86,186
600,000 187,414
70,000 15,844
289,000 27,797
40 OTHER PROFESSIONAL SERVICE 553,600 90,748
C D --%EXP
THRU REMAINING
9-30-95 BUDGET
21.79 25,247,736
22.06 2,398,156
23.08 173,069
5.42 70,936
21 .39 3,307,020
12.72 87,282
21.44 6,036,463
21.72 31 284,199
20.65 (5,455,010)
11 .87 (3,899,741)
17.21 (9,354,751)
23 .50 21.929,448
16.77 145,647
29.10 886,293
48.97 29,600
13 .93 174,814
19.27 127,153
17.60 84,300
11.68 1,857,731
14.35 1,468,903
15.65 1,303,202
16.72 423,891
19.49 100,961
19.07 118,158
24.95 155,720
10.19 191,295
6.24 140,636
25.32 4,051,247
9.29 126,991
25.05 382,236
10.37 745,314
31.24 412,586
22.63 54,156
9.62 261,203
16.39 462,852
FPC I 294A.XLS-12/l 8/95-5 :31 PM
PAGEi
E F G ---EXP INCR INCR
THRU (DECR) (DECR)
9-30-94 $ %
6,905,566 129,698 1.88
559,465 119,379 21.34
60,579 (8,648) (14.28)
9,827 (5,763) (58.64)
885,414 14,566 1.65
16,776 (<1,058) (24. 19)
1,532,061 115,476 7.54
8,437,627 245,174 2.91
(1,519,341) (99,351) (6.54)
(987,548) (462,2&9) (46.8])
(2,506.889) (561,640) (22.40)
5,930,738 806 ,814 13.60
46,620 (17,267) (37.04)
302,091 61,616 20.40
25,811 2,589 10.03
25,564 2,722 10.65
28,197 2,150 7.62
13,752 4,248 30.89
256,293 (10,524) (4. 11)
384,182 (138,085) (35.94)
298,343 (56,545) (18.95)
70,760 14,349 20.28
17,723 6,716 37.89
33,252 (5,410) (16.27)
43,212 8,568 19.83
29,354 (7,649) (26.06)
14,812 (5,448) (36.78)
1,429,411 (55,658) (3 .89)
16,839 (3,830) (22.74)
138,362 (10,598) (7.66)
78,142 8,044 10.29
195,805 (8,391) (4.29)
22,398 (6,554) (29.26)
0 27,797 100.00
255,628 (164,880) (64 .50)
12/18/95 PAGE2
JOINT OPERATING FUND & WORKING CAPITAL FUND
SUMMARY BUDGET REVIEW -REVISED
3 MONTHS ENDED 9-30-95
!!:. !! £ ~ & E Q
EXP %EXP EXP INCR INCR
BUDGET THRU THRU REMAINING THRU (DECR) (DECR)
DESCRIPTION .1995-96 9-30-95 9-30-95 BUDGET 9-30-94 $ 'K,
41 PRINTING & PUBLICATION:
42 REPRODUCTION-IN-HOUSE 219,100 22,367 10.21 196,733 19,161 3,206 16.73
43 PRINTING-OUTSIDE 60,500 3,664 6.06 56,836 1,888 1,776 94.07
44 PHOTO PROCESSING 32,700 5,834 17.84 26,866 6,406 (572) (8.93)
45 NOTICES & ADS 29,500 10,847 36.77 18,653 4,734 6,113 129.13
46 RENTS & LEASES:
47 OUTSIDE EQUIPMENT RENTAL 109,000 33,712 30.93 75,288 60,295 (26,583) (44.09)
48 DISTRICT EQUIPMENT RENTAL 126,700 23,224 18.33 103,476 23,310 (86) (0.37)
49 REPAIRS & MAINTENANCE:
50 MATERIALS 3,375,900 625,349 18.52 2,750,551 758,986 (133,637) (17.61)
51 SERVICE CONTRACTS 834,000 215,679 25.86 618,321 200,638 15,041 7.50
52 RESEARCH & MONITORING:
53 ENVIRONMENT AL MONITORING 2,375,000 288,335 12.14 2,086,665 425,019 (136,684) (32.16)
54 AIR QUALITY MONITORING 155,000 0 0.00 155,000 75,000 (75,000) (100.00)
55 RESEARCH 565,000 50,145 8.88 514,855 119,098 (68,953) (57.90)
56 TRAINING,TRAVEL & MEETINGS 647,500 90,253 13.94 557,247 22,453 67,800 301.96
57 UNCOLLECTABLEACCOUNTS 15,000 131 0.87 14,869 0 131 100.00
58 UTILITIES:
59 DIESEL FOR EMERG GENERATO 25,000 0 0.00 25,000 5,964 (5,964) (100.00)
60 POWER 1,075,000 204,998 19.07 870,002 220,298 (15,300) (6.95)
61 NATURAL GAS 1,400,000 245,545 17.54 1,154,455 302,810 (57,265) (18.91)
62 TELEPHONE 125,500 26,512 21.13 98,988 32,770 (6,258) (19.10)
63 WATER 750,000 90,412 12.05 659,588 156,458 (66,046) (42.21)
64 OTHER EXPENSES:
65 FREIGHT 79,700 10,317 12.94 69,383 9,061 1,256 13.86
66 GENERAL 539,000 72,451 13.44 466,549 132,976 (60,525) (45.52)
67 AQMD OPERATING FEES 250,000 36,078 14.43 213,922 58,893 (22,815) (38.74)
68 PRIOR YEARS EXPENSE 20,000 0 0.00 20,000 0 0 0.00
69 OTHER NON-OPER EXPENSE 94,500 14,837 15.70 79 ,663 18,948 (4,111) (21.70)
70 TOTAL MATLS, SUPP, & SERV 29,983,000 5,445,201 18.16 24,537,799 6,381,717 (936,516) (14.67)
71 COST ALLOC-CORF & OTHER (470,000) (128.130) 27.26 (341 ,870) (109,043) 19.087 17.50
72 NET J.O.-MATLS, SUPP, & SERV. 29,513 ,000 5,317,071 18.02 24,195,929 6,272,674 (955 ,603) (15 .23)
73 TOTALJ. 0. REQUIREMENTS 58,180,000 12,054,623 20.72 46,125,377 12,203,412 (148,789) (J .22)
74 NET REVENUES (3,800,000) (947,039) 24.92 (2,852,961 ) (1,040,973) (93,934) (9.02)
75 NET J.O. EXPENDITURES 54.380,000 11 ,107,584 20.43 43,272.416 11,162,439 (54,855) (0.49)
FPC1294A.XLS-\2/\8/95-5:3J PM
JOINT OPERATING FUND & WORKING CAPITAL FUND
BUDGET REVIEW
3 MONTHS ENDED 9/30/95
SUMMARY OF REVENUES
%
REV REV REV INCR INCR
BUDGET THRU THAU REMAINING THRU (DECAi (DECR)
DESCRIPTION 1995-96 9-30-95 9-30-95 BUDGET 9-30-94 s %
INTER DIST SEWER USE 1,450,000 411,692 28.39 1,038.308 427,391 (15,699) (3 .67)
WASTEHAULER 500,000 78,193 15.64 421,807 117,438 (39,245) (33.42)
IRWD SLUDGE DISPOSAL 650,000 206,000 31.69 444,000 209,393 (3,393) (1.52).
WASTE HAULER PENALTIES 0 0 0.00 0 0 (0) 0.00
SCRAP SALES 10,000 12,739 127.39 (2,739) 31,961 (19,222) (60. 14)
OTHER SALES 5,000 446 8.92 4,554 358 88 24.58
BIOSOLIDS REUSE 10,000 0 0.00 10,000 6,722 (6,722) (100.00)
RENTS & LEASES 70,000 1,000 1.43 69,000 750 250 33.33
INVESTMENT INTEREST 0 0 0.00 0 0 0 0.00
CONTRIBUTION IN AID 0 0 0.00 0 0 (0) 0.00
GENERAL NON-OPERATING 100,000 90,593 90.59 9,407 60,089 30,504 50.76
VEHICLE & EQUIP 200,000 48,152 24.08 151,848 51,560 (3,408) (6.61 l
MAILING FEE 5,000 0 0.00 5,000 0 (0) 0.00
SAMPLING CHARGES 250,000 51,170 20.47 198,830 75,632 (24,462) (32.34)
PRIOR YEAR INCOME 50,000 0 0.00 50,000 529 (529) (100.00)
POWER SALES 500,000 47,426 9.49 452,574 60,202 (12,776) (21.22)
TOT AL REVENUES 3,800,000 947,411 24.93 2,852,589 1,042.025 (94,614) {9.08)
Joint Works Operating Fund
1995-96 Summary Budget Review
Comparisons by Department
199-5-96
Department and Division 1993-94 1994-95 1994-95 Adopted Year to Date Budget%
Actual Budaet Actual Budaet 9/30/95 Realized
General Managers Department
Executive Management 569,751 1,009,300 1,410,640 763,700 295,258 38.66%
Board Secretary 70,207 208,000 58,560 143,600 25,785 17.96%
Management Support 54,700 0 0.00%
Communications 238,966 441,600 218,598 676 400 122,142 18.06%
Total 878,924 1,658.900 1,687,798 1,638,400 443,185 27.05%
Human Resources Department
Human Resources Administration 758,055 1,126,500 1,042,149 299,000 109,049 36.47%
Human Resources & Training 512,800 64,383 12.56%
Safety & Emergency Response 611 ,200 125,335 20.51%
Total 758,055 1,126,500 1,042,149 1,423,000 298,767 21 .00%
Finance Department
Finance Administration 1,420,950 1,413,800 1,510,739 1,549,000 453,775 29.29%
Accounting 555,449 815,600 817,506 1,042,800 252,183 24.18%
Purchasing & Warehousing 506,788 647,400 546,640 760 500 185,411 24.38%
Total 2,483,187 2,876,800 2,874,885 3,352,300 891 ,369 26.59%
Information Technology Department
Info Tech Administration 1,146,921 1,699,300 1,251,701 266,100 60,430 22.71%
Hardware Support 643,250 91,444 14.22%
Software & Plant Automation Support 642,250 293,195 45.65%
Total 1,146,921 1.699,300 1,251,701 1,551,600 445,069 28.68%
Maintenance Department
Maintenance Administration 832,102 1,107,100 1,083,020 265,000 77,135 29.11%
Maintenance Scheduling 496,400 110,258 22.21%
Plant Maintenance 3,290,595 3,458,100 3,197,821 3,261,300 835,150 25.61%
Collection Facilities Maintenance 299,426 365,900 249,469 342,300 110,628 32.32%
Mechanical Maintenance 4,898,622 5,574,700 5,192,640 5,816,600 1,091,580 18.77%
Electrical Maintenance 1,767,675 1,902,300 1,856,601 1,964,000 384,815 19.59%
Instrumentation Maintenance 2,346,636 2,713,800 2,581 ,127 2,975,100 591,200 19.87%
Total 13,435,056 15,121 ,900 14,160,678 15,120,700 3,200,766 21.17%
Operations Department
Operations Administration 1,241,700 282,269 22.73%
Plant Operations 15,601 ,211 15,840,800 14,862,879 22,957,600 4,449,635 19.38%
Total 15,601,211 15,840,800 14,862,879 24,199,300 4,731 ,904 19.55%
Technical Services Department
Technical Services Administration 243,052 256,200 193,053 833,100 154,417 18.54%
Environmental Management 9,057,047 10,533,300 10,163,150 4,921,400 599,983 12.19%
Environmental Sciences Lab 3,715,233 3,471,950 3,241,725 3,581,600 858,610 23.97%
Source Control 991 ,029 276,750 839,942 773,700 168,023 21.72%
Total 14,006.361 14,5381200 14,437,870 10,109,800 1,78\033 17.62%
Engineering Department
Engineering Administration 46,212 56,000 78,229 125,400 43,381 34.59%
Design Engineering 148,366 221,000 281,346 243,800 117,578 48.23%
Engineering Planning 54,200 57,986 106.99%
Construction Management 296.125 102,600 268,956 361,500 43,584 12.06%
Total 490,703 379,600 628,531 784,900 262,529 33-45%
Less Joint Operating Revenues {3,620,154) {3.700,000) {4,649,515) {3,800,000) {947,038) 24.92%
Net Joint Operating Expenses 45,180,264 49,542,000 46,296,976 54,380,000 11,107,584 20.43%
GALCHGTL.XLS 1/3/96
1/3/96
Joint Works Operating Fund
Divisional Contributions to Gallonage Charge
1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1995-96 1995-96
Actual Actual Actual Actual Actual Budget Target Yrto Date
Annual Flow in Million Gallons 98,046.36 82,938.27 84,999.62 84,321.90 88,489.60 86,688.61 86,688.61 21,807.71
2150 General Manager 12.02 9.03 8.45 6.76 15.94 8.81 8.33 13.54
2160 Board Secretary 0.34 2.12 0.77 0.83 0.66 1.66 1.46 1.18
2170 Management Support 1.50 3.70 2.69 2.83 2.47 0.63 0.43 0.00
2190 Communications 0.00 0.00 0.00 0.00 0.00 7.80 7.04 5.60
Total Management 13.87 14.85 11.90 10.42 19.07 18.90 17.26 20.32
2180 Personnel & Security 5.46 13.25 8.98 8.99 11.78 0.00 0.00 0.00
2510 HR Administration 0.00 0.00 0.00 0.00 0.00 3.45 3.45 5.00
2520 HR & Training 0.00 0.00 0.00 0.00 0.00 5.92 5.25 2.95
2530 Safety & Emerg Response 0.00 0.00 0.00 0.00 0.00 7.05 6.51 5.75
Total Human Resources 5.46 13.25 8.98 8.99 11.78 16.42 15.20 13.70
2210 Dir of Finance 7.57 10.94 13.79 16.85 17.07 17.87 18.80 20.81
2220 Accounting 5.50 7.63 6.57 6.59 9.24 12.03 11.35 11.56
2230 Purchasing & Warehousing 5.39 6.66 6.25 6.01 6.18 8.77 8.22 8.50
Total Finance 18.46 25.23 26.61 29.45 32.49 38.67 38.37 40.87
2240 Information Services 6.29 10.13 11.79 13.60 14.15 0.00 0.00 0.00
2410 Info Tech Administration 0.00 0.00 0.00 0.00 0.00 3.07 2.87 2.77
2420 Hardware Support 0.00 0.00 0.00 0.00 0.00 7.42 6.27 4.19
2430 Software Support 0.00 0.00 0.00 0.00 0.00 7.41 6.58 13.44
Total Information Serv/Tech 6.29 10.13 11.79 13.60 14.15 17.90 15.72 20.41
3310 Director of O & M 11 .05 9.25 9,56 9.87 12.24 0.00 0.00 0.00
Total Dir of O & M 11.05 9.25 9.56 9.87 12.24 0.00 0.00 0.00
3310 Director of Maintenance 0.00 0.00 0.00 0.00 0.00 3.06 2.88 3.54
3320 Mice Scheduling 0.00 0.00 0.00 0.00 0.00 5.73 5.36 5.06
3330 Plant Mtce 34.10 39.27 42.21 39.02 36.14 37.62 37.28 38.30
3340 Collections 4.08 7.72 3.52 3.55 2.82 3.95 3.04 5.07
3350 Mechanical 50.90 55.40 59,80 58.09 58.68 67.10 63.84 50.05
3360 Electrical 13.94 17.79 17.66 20.96 20.98 22.66 22.05 17.65
3370 Instrumentation 14.66 19.21 22.51 27.83 29.17 34.32 32.68 27.11
Total Maintenance 117.67 139.39 145.71 149.46 147.79 174.43 167.13 146.77
3410 Dir of Operations 0.00 0.00 0.00 0.00 0.00 14.32 13.82 12.94
33/3480 Plant Operations 146.42 162.76 192.77 185.02 167.96 264.83 258.96 204.04
Total Operations 146.42 162.76 192.77 185.02 167.96 279.15 272.78 216.98
3510 Dir of Tech Sevices 3.59 3.92 4.13 2.88 2.18 9.61 6.55 7.08
3520 Compliance 29.58 34.44 31 .89 30.82 40.30 0.00 0.00 0.00
3530 Cons, Reel, Reuse 51.87 74.98 71.35 68.29 68.03 0.00 0.00 0.00
3540 Air Quality 0.00 5.09 5.65 8.30 6.51 0.00 0.00 0.00
3550 Environmental Mgmt 0.00 0.00 0.00 0.00 0.00 56.77 55.26 27.51
3580 Laboratory 21.78 33.13 38.07 44.06 36.63 41.32 40.36 39.37
3590 Source Control 9.01 14.82 8.17 11 .75 9.49 8.93 8.70 7.70
Total Tech Services 115.83 166.38 159.26 166.11 163.16 116.62 110.87 81.67
3710 Dir of Engr 1.45 4.54 0.72 0.55 0.88 1.45 1.09 1.99
3720 Planning & Design (Design @ 95-96) 5.01 7.89 2.64 1.76 3.18 2.81 1.10 5.39
3730 Engineering Planning 0.00 0.00 0.00 0.00 0.00 0.63 0.00 2.66
3750 Instr & Controls 0.00 1.97 0.00 0.00 0.00 0.00 0.00 0.00
3790 Constr Mgmt 5.59 6.86 2.89 3.51 3.04 4.17 3.43 2.00
Total Engineering 12.04 21.26 6.24 5.82 7.10 9.05 5.62 12.04
Total Expenses 447.10 562.49 572.83 578.74 575.73 671 .14 642.96 552.77
Less Revenues (21.91) (43.03) (34.51) (42.93) (52.54) (43.84) (43.84) (43.43)
Net JO Expenses 425.19 519.46 538.31 535.81 523.19 627.30 599.13 509.34
GALCHGSM XLS 5:01 PM
1990-91
1991-92 ~ 7\ '_ ..-1 \ \ \ I
95-96 YTD
Total Revenues
Total Management
Total Human Resources
Total Finance
Total Information Servffech
Total Engineering
Total Tech Services
Total Maintenance
Total Operations
'-'C..-·
0 0 o .9
~ .....
~ g
Dollars per Million Gallons
~ N 0 0 o 0
~ N (J1
0 o 0
~ c..> 0 0 0 0
-w (0
O>
0 m "'O
)>
~ 3: m z ~ r-
cn
:I: )>
:::0 m
0 "Tl
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)> r-r-0 z )>
G') m
0 ::J: )>
:::0 G') m en
12/16/95
Ill II)
II) >, 0 C.
E w
II)
E i= = ::I
LL
County Sanitation Districts
Staffing Trends
750 .---------------------------------r-------------.------------------,
I
I I
I I 730 -.. ------------------------, --------------------· -----r --------------------------,.--------------------.---:---
710 + -
690
I I
I
----------------~--------------------------, -----------------------7 -.
I
I
I
I ·----•---------------,--------------------------r-------------------------,--------------------------1 I
I
I
670 t --------~ .. -. --------~ ----------------~ ---------------T
650 ,-
630
610. ------·------·--• ---
590
570 ~
550
6/30/92
I ~-,--
6/30/93
I
I ---.-------------------------~--------------------------
r -
I
I ··r--------------------
1
,--------------------------
1
I -,------------------
-,----
I
---------------------------,----------------... --------... -"
6/30/94 6/30/95 9/30/95
I -+-Authorized ---Actual I
*FAHR_met1 Chart 1 12:24 PM
12/16/95
County Sanitation Districts
Joint Operating Costs Per Million Gallons
$800
I ' $750 ,_ -----------------------~---------~--------------
$700 -1------• ------------------------~-----------------------1--------------
$650 ----------------~---------------------
1/)
C
.2 $600 ra Cl
C ~ $550
E -Cl) ... $500 .!! --------------------.... --"'1 -... ----~ --------------·---
0 C
I I
$450 '·-----------------------J _______________________ _
$400 , __ ---------------------' I --------·-----·-···----1 -' 1 .. : -..,
I I
$350 I -----------------------~---------------------· -,------------------------
$300
1991-92 1992-93 1993-94 1994-95 1995-96
I ~ 9/30 Cost/mg ---6/30 Cost/mg [
*FAHR_met2 Chart 1 12:23 PM
12/16/95
22,000
21,800
21,600
21,400
21,200
U)
C ..2 21,000 ,_
fll (!)
C ,2 20,800
i
20,600
20,400
20,200
20,000
19,800
Sep-91
*FAHR_met2 Chart 2
I
County Sanitation Districts
Total Flows Year to Date
I I ----------------•---------·-------------~-----------------------~-----------------~ I
J
I I
I
I ---------------,4 --.. --------------------,---. ---1 -----------------------
I
---·-,
I
--------------------1 ------.. -------.... ~ -----~ -.... -----------------------
I
I
I
I
-.. -. --·-------..... '--:------------/ ----------: ---------.--------------
1
---------------r ..
•---•----------L-
;--:/ ----------·------------: ----.. ---------,_ ---------
I I I
-----• ------------------------•--------... ----_. -----~ ~ ---~ ---..... ------------. -------·-
I --------------~,--
Sep-92
------·--------------a ---I
-----------------~------------------------c-----------------------, ·I I
Sep-93
Quarter Ended
Sep-94 Sep-95
12:21 PM
)
Measurement Tracking
100
90
80
70
J!l 0 5; 60 ._ E a, a, 50 .c ... E :::i ::, Ill z :g 40 :lii
30
20
10
0
Ahead
Districts-Wide Measurement Tracking
102 Measurement Projects
On Track Done Behind Not Started On Hold Canceled
As part of the fiscal year 1995-96 budget process, performance measurement projects were
established for all departments/divisions within the organization. The chart above shows a status
summary, as of the end of the first quarter, of all the performance measurement projects approved in
the 1995-96 budget document. Below is a tabular summary of this chart:
Ahead
13
On Track
60
Done
5
Behind
8
Not Started
8
On Hold
8
Canceled
0
The following pages present a status of each departments/divisions performance measures as of the
end of the first quarter.
Page 1
Measurement Tracking
Executive Management
9 Measurement Projects
9
8
7
6
J!I .... C: 0 a, 5 ._ E il f! E :::i 4 :::i t/1 z Ill G) :e
3
2
Ahead On Track Done
Measurement Title % Complete
Complete Consolidation Study. (1) 10%
Improve management skills of managers and supervisors. 20%
Support Boards consideration of committee structure change. (2) 0%
Represent Districts' interests in Orange County bankruptcy. 75%
Improve agency communication. (3) 25%
Direct work on Districts' Strategic Plan. 5%
Create climate that promotes change. 10%
Establish clear goals for the departments and all subordinate units. 100%
Renew NPDES ocean discharge permit. 20%
Behind On Hold
Status Start
On Track 7/1/95
On Track 7/1/95
On Hold 7/1/95
On Track 7/1/95
On Track 7/1/95
On Track 7/1/95
On Track 7/1/95
Done 7/1/95
On Track 7/1/95
(1 )-Feasibility analysis for Consolidation is underway and will be presented to the Executive Committee in February, 1996.
(2)-Board consideration of Committee structure is scheduled for December meeting.
(3)-Communications manager has been hired and will begin work November 13.
Page2
End
12/31/95
Measurement Tracking
J!l
-C: 0 cu .. E 1l f E :, :, en z i :e
Ahead
Measurement Title
Board Secretary
2 Measurement Projects
On Track Done Behind Not Started
% Complete Status
On Hold
Streamline procedures for preparing agenda and minutes. 25% On Track
Provide regular updates of Director info. to mgmt. and Committee seer. 25% On Track
Communications
4 Measurement Projects
Start
7/1/95
7/1/95
Canceled
End
12/31/95
12/31/95
4 ~---------------------------------------
-'E3 +----------------------------------------0 cu .. E ilf2 ~-----------------------------E :, :, en z i :e
Ahead
Measurement Title
On Track
Establish and organize Communications Office.
Done
Define Communications Office Mission & develop work plan.
Prepare Communications Office Procedures Manual.
Behind
Develop a biannual publication for public officials and comm. leaders.
Page 3
Not Started On Hold
% Complete Status
95% On Track
100% On Track
0% On Hold
0% On Hold
Start
7/1/95
7/1/95
7/1/95
12/31/09
Canceled
End
9/1/95
12/31/95
2/1/96
12/31/95
Measurement Tracking
Finance Administration
4 Measurement Projects
4-,----------------------------------------
... ~3 +-------------0 GI ._ E
~2!2 +-------------E::,
::, (II z::: ~
Ahead
Measurement Title
On Track Done
Replace variable rate borrowing remarketing agent to reduce costs.
Complete implementation of treasury management functions.
Provide safe, liquid and productive cash and investment program.
Improve comprehensive budget process started in 1994-95.
Behind Not Started On Hold
% Complete Status
100% Done
100% Done
100% Done
5% Behind
Accounting
3 Measurement Projects
Ahead On Track Done
Measurement Title
Oversee installation of a new integrated Financial Info. System.
Develop Districts'-wide Finance policy & procedure manual.
Develop Districts'-wide comprehensive budget manual.
Page4
Behind Not Started On Hold
% Complete Status
15% On Track
15% On Track
5% On Track
Start
7/1/95
7/1/95
1/1/95
7/1/95
Start
7/1/95
7/1/95
7/1/95
Canceled
End
12/31/95
12/31/95
9/30/95
6/30/96
Canceled
End
12/31/96
4/30/96
12/31/95
Measurement Tracking
4
!I 3 -C: 0 QI ... E QI QI 2 .Cl ... E ::::i ::I Ill z m
:!:
0
Ahead
Measurement Title
On Track
Purchasing & Warehousing
4 Measurement Projects
Done Behind Not Started
% Complete Status
On Hold
Compete revision of bidders list applic. to tie to commodity code listing.
Establish annual contracts to reduce need for in-house inventory.
Establish ABC analysis for classifying and analyzing inventory.
Develop policy on removal of misc. low cost hardware from inventory.
60% On Track
10% On Track
15% On Track
75% Ahead
Information Technology Administration
4 Measurement Projects
Start
7/1/95
7/1/95
1/1/95
7/1/95
Canceled
End
1/31/96
3/31/96
3/31/96
12/31/95
4~-------------------------------------
-~3 ~-------------------------------------0 QI
i~2 ~----------------------E ::::i ::, Ill z m :!:
Ahead
Measurement Title
On Track
Develop Information Systems Master Plan
Done Behind
Develop Performance Measurement survey for IT Department users.
Obtain adequate working space for IT Department staff.
Create formal Policies and Procedures Manual for IT Department.
Page 5
Not Started On Hold
% Complete Status
0% On Hold
0% Not Started
5% On Track
0% Not Started
Start
7/1/95
7/1 /95
7/1/95
7/1/95
Canceled
End
Measurement Tracking
Hardware Support
3 Measurement Projects
3
J!I -C 0 GI 2 ._ E -8 2! E ::i ::i en z ca GI :E
0
Ahead On Track Done Behind
Measurement Title
Install auxiliary PBX for Plant 2 to provide added telephone capabilities.
Establish annual contracts to reduce need for in-house inventory.
Establish ABC analysis for classifying and analyzing inventory.
Not Started On Hold
% Complete Status
10% On Track
5% On Track
0% Not Started
Software & Plant Automation
4 Measurement Projects
4
-J!I 3 C 0 GI ._ E -8 2! 2 E ::i ::i en 2 ca GI :E
0
Ahead On Track Done Behind
Measurement Title
Extend CMMS application to include data for Warehouse & Auto Shop.
Provide software support for installation of new FIS.
Replace Plant Automation System at Plant 2 with new technology.
Install Districts-wide integrated network.
Page6
Not Started On Hold
% Complete Status
0% On Hold
0% Not Started
33% On Track
0% Not Started
Start
7/1/95
7/1/95
1/1/95
Start
7/1/95
7/1/95
7/1/95
7/1/95
Canceled
End
12/31/95
1/31/96
6/30/96
Canceled
End
1996-97
3/31/96
6/30/96
Measurement Tracking
Human Resources Administration
3 Measurement Projects
Ahead On Track Done Behind Not Started On Hold
Measurement Title
Develop and implement a Districts-wide training program.
Develop and publish an Employee Handbook.
Improve the quality of the Management Performance Review Program.
% Complete
5%
95%
5%
Status
On Track
On Track
On Track
Human Resources & Training
3 Measurement Projects
J!! 0 C: .. e 2 +-------1: l!! E ::i ::, Ill z :g
:E O -+------>--
Ahead
Measurement Title
On Track Done
Develop and implement training opportunities and programs.
Improve and refine management and professional staff evaluations.
Conduct Districts-wide attitude survey.
Behind Not Started On Hold
% Complete Status
25% On Track
5% On Track
0% On Track
Safety & Emergency Response
3 Measurement Projects
J!! ~ C:
0 G) 2 +-------~ ~ E ::i ::, Ill z :g
:E O +------~
Ahead
Measurement Title
On Track Done
Develop safety training programs based on needs assessment.
Develop and implement an integrated Emergency Response Plan.
Conduct industrial hygiene evaluations to determine hazards.
Page 7
Behind Not Started On Hold
% Complete Status
100% Done
5% On Track
1% On Track
Start
7/1/95
7/1/95
7/2/95
Start
7/1/95
7/1/95
7/1/95
Start
7/1/95
7/1 /95
7/1/95
Canceled
End
Canceled
End
Canceled
End
Measurement Tracking
Maintenance Administration
3 Measurement Projects
Ahead On Track Done
Measurement Title
Emphasize preventive maintenance tasks to reduce life cycle costs.
Implement remaining Emst & Young O&M recommendations .
Continue building the computer database for the CMMS.
Behind Not Started On Hold
% Complete
80%
80%
80%
Status
On Track
Ahead
On Track
Maintenance Scheduling
2 Measurement Projects
J!!
-C: 0 Q) ... E 1l ~ E :::i ::I (II z ill
==
Ahead
Measurement Title
On Track Done
Identify optimum preventive maintenance rates to reduce costs.
Benchmark equipment down time and establish acceptable targets.
Page 8
Behind Not Started On Hold
% Complete Status
3% Behind
10% On Track
Start
7/1/95
7/1/95
1/1/95
Start
7/1/95
7/1/95
Canceled
End
12/31/95
Canceled
End
Measurement Tracking
Plant Maintenance
4 Measurement Projects
Ahead On Track Done Behind
Measurement Title
Develop a valve exercising plant maintenance program.
Develop a valve change plant maintenance program for critical areas.
Investigate applicable certification programs for the various crafts.
Develop an area assignment sys. to leverage field crew resources.
Not Started On Hold
% Complete Status
5% On Track
8% On Track
10% On Track
12% On Track
Collection Facilities Maintenance
4 Measurement Projects
4
.l!l 3 0 C: Cl) ... E Cl) Cl) 2 .c ... E ::3 ::3 (II z :3
:E
0
Ahead On Track Done Behind
Measurement Title
Develop a CMMS data base for pump stations & a plant maint. listing.
Continue to investigate alternate chemicals for cheaper order control.
Contract for line cleaning in some of the Districts' Assmt. Districts.
Expand a root control program for District No. 7 sewer system.
Page 9
Not Started On Hold
% Complete Status
60% Ahead
50% On Track
60% On Track
40% On Track
Start
7/1/95
7/1/95
7/1/95
7/1/95
Start
7/1/95
7/1/95
7/1/95
7/1/95
Canceled
End
6/30/96
6/30/96
6/30/96
6/30/96
Canceled
End
6/30/96
6/30/96
1/31/96
Measurement Tracking
Mechanical Maintenance
3 Measurement Projects
Ahead On Track Done Behind
Measurement Title
Initiate tracking program for repetitive breakdowns of digester pumps.
Reduce costs by expanding central generation engines maintenance.
Start cross training of personnel between plants.
Not Started On Hold
% Complete
100%
50%
75%
Status
Ahead
On Track
Ahead
Electrical Maintenance
4 Measurement Projects
... ~ 3 0 Cl) .. E 1l I!! 2 E::,
::, Ill z :g . :I!:
0
Ahead
Measurement Title
On Track Done
Complete CMMS database with regard to NC systems.
Develop a predictive maint. program for electric equipment.
Develop a 12-Kilovolt meter and relay database.
Privatize Central Generation Generator Maintenace to reduce costs.
Page 10
Behind Not Started On Hold
% Complete Status
90% Ahead
25% On Track
70% Ahead
90% Ahead
Start
7/1/95
7/1/95
7/1/95
Start
7/1/95
7/1/95
7/1/95
7/1/95
Canceled
End
6/30/96
Canceled
End
2/28/96
3/31/96
6/30/96
11/30/95
Measurement Tracking
.!I -r:: 0 GI 2 ._ E 1l I!! E :::i ::I Ill z :g
== 0
Instrumentation Maintenance
3 Measurement Projects
Ahead On Track Done Behind Not Started On Hold
Measurement Title
Develop activity code within CMMS to track staff efforts.
Privatize maintenance services for the 13 influent flow meters.
Develop a charting process for recording preventative maint. backlog.
% Complete Status
10% On Track
90% Ahead
75% Ahead
Technical Services Administration
4 Measurement Projects
4
.l!l 3 -r:: 0 GI ... E 1l I!! 2 E :::i ::I Ill z :g
== 0
Ahead On Track Done Behind
Measurement Title
Improve coverage of legislation & improve assmt. of compliance regs.
Develop imprvmnt. teams & begin implementing EY recommendations.
Develop compliance assmt. on discharges from treatment plants.
Standardize biosolids inspection protocals & optimize staff usage.
Page 11
Not Started On Hold
% Complete Status
50% On Track
75% On Track
15% On Track
5% Behind
Start
7/1/95
7/1/95
7/1/95
Start
7/1/95
7/1/95
7/1/95
7/1/95
Canceled
End
6/30/96
3/31/96
1/31/96
Canceled
End
12/31/95
6/30/96
6/30/96
3/31/96
Measurement Tracking
Ahead On Track
Measurement Title
Environmental Management
3 Measurement Projects
Done Behind Not Started
% Complete Status
On Hold
Devel.op a 10-year synthesis of ocean monitoring program findings.
Conduct a study of biotrickling filters for the removal of pollutants.
Prepare a 1995 Air Toxics Emssion Inventory Plan and Report.
5% On Track
80% Ahead
60% Ahead
Environmental Sciences Laboratory
3 Measurement Projects
Ahead On Track Done
Measurement Title
Develop expanded air analysis capabilities
Reduce labor costs for metals analyses of wastewater.
Reduce labor costs for organic analyses of wastewater.
Behind
Page 12
Not Started On Hold
% Complete Status
20% Behind
0% Not Started
0% Not Started
Start
7/1/95
7/1/95
7/1/95
Start
7/1/95
7/1/95
7/1/95
Canceled
End
2/28/96
2/28/96
2/28/96
Canceled
End
Measurement Tracking
Source Control
3 Measurement Projects
Ahead On Track Done Behind Not Started On Hold
Measurement Title
Evaluate the EPA Effluent Guidelines for regulating industrial users.
Finalize the results of the non-industrial source sampling.
Develop a program to regulate small-quantity dischargers.
% Complete Status
40% On Track
20% On Track
20% On Hold
Operations Administration
3 Measurement Projects
Ahead
Measurement Title
Reduced natural gas cost.
Increase staff training.
On Track
Improve employee communications.
Done
Page 13
Behind Not Started On Hold
% Complete Status
20% On Track
30% Ahead
20% On Track
Start
7/1/95
7/1/95
7/1/95
Start
7/1/95
7/1/95
7/1/95
Canceled
End
6/30/96
6/30/96
6/30/96
Canceled
End
6/30/96
6/30/96
6/30/96
Measurement Tracking
Plant Operations
4 Measurement Projects
Ahead On Track Done Behind Not Started On Hold
Measurement Title
Study staffing produdivity per Ernst & Young review.
Reduce overtime.
Run Treatment plant cost-effedively.
Reduce biosolids disposal cost.
% Complete
0%
25%
25%
10%
Engineering Administration
2 Measurement Projects
Status
Not Started
On Track
On Track
Behind
Ahead On Track Done Behind Not Started On Hold
Measurement Title
Modify Planning & Design organization for E & Y recommendations
Implement all 14 recommendations in CIP Report
Page 14
% Complete
50%
30%
Status
Behind
Behind
Start
7/1/95
7/1/95
7/1/95
7/2/95
Start
7/1/95
7/1/95
Canceled
End
Canceled
End
6/30/96
Measurement Tracking
Design Engineering
5 Measurement Projects
5
.!I 4 -C: 0 GI ... E 3 GI GI ~ ... E ::s 2 ::s en z m
==
0
Ahead On Track Done
Measurement Title
Complete 75% of conn permits in 1day, 90% in 3 days, 100% in 5
Design facilities which satisfy customer
Track and manage $33.5 million CORF project budget
Comply with adopted Master Plan
Improve submittal process on all new design projects
Behind Not Started On Hold
% Complete Status
NIA On Track
NIA On Track
NIA On Track
NIA Behind
NIA On Track
Engineering Planning
3 Measurement Projects
Ahead On Track
Measurement Title
Comply with adopted Master Plan
Track and manage budget and schedule
Update "as-built" information
Done
Page 15
Behind Not Started On Hold
% Complete Status
NIA On Track
NIA On Track
5% On Track
Start
711/95
711195
711195
711195
711/95
Start
711195
711195
711195
Canceled
End
6130196
6/30196
6/30196
6130196
6/30196
Canceled
End
6130196
6130196
6130196
Measurement Tracking
Construction Management
3 Measurement Projects
Ahead On Track Done
Measurement Title
Revise record drawing process on all new construction projects
Improve shop drawing and submittal process on new projects
Construction personnel to keep current on codes and standards
Page 16
Behind Not Started On Hold
% Complete Status
50% On Hold
50% On Hold
25% On Track
Start
7/1/95
7/1/95
7/1/95
Canceled
End
6/30/96
6/30/96
6/30/96
Activity Trends-Executive Management
Joint Operating expenses are 22% of budget through the first quarter. Budget savings have been realized
on chemicals as new contract prices have declined. Green acres project water prices have also declined
as a result of the renegotiated agreement for 1995-96. Natural gas use is decreasing as we gain
experience with the Central Generation Facilitites.
Overall, salaries have increased by only 1.88% as a result of last year's early retirement program and
approximately 12% vacancy rate in authorized positions. Labor charge outs to CORF capital
improvements have decreased as the program has been scaled back for 1995-96.
700
600
500
400 a 95-96 Budget
•95-96 Target
• 1st Qtr. Actual 300
200
100
0 Treatment Cost,
$ per MG
Page 1
236.85 236.85 237.04
Average Daily Flow,
MGD
Activity Trends-Executive Management
Board Secretary:
The initial preparation times submitted for Joint Board agenda packages and minutes as reflected in the 95-96 Budget were
estimates made without baseline data. Beginning in July, 1995, the Board Secretary's Office has tracked actual time spent on
these tasks. The first quarter reflects actual hours spent on the Joint Board agenda package and minutes. The differentiation
between estimates and actuals was unanticipated. However, during the course of this three month period, the agenda and minute
process has been streamlined. Examples include: 1) Alternate Directors do not receive the entire agenda package and, 2) the
elimination of three-hole punched paper. It is expected future actual time spent will be somewhat reduced as a result of the change.
45.0
40.0
35.0
30.0
25.0
a 95-96 Budget 20.0 • 1st Qtr. Actual 15.0
10.0
5.0
0.0
Communications:
41 .5
20.0
Agenda Prep. Time,
Hrs.
17.5
4.0
Completion of Minutes,
Hrs.
The number of tours during the first quarter of any fiscal year are typically low as schools, the largest segment of our tour audience,
are not in session during July and August. The number of people contacted was extraordinarily high during the first quarter as it
includes those individuals who visited the County Sanitation Districts of Orange County booth at the Orange County Fair. The
number of people contacted during the remainder of fiscal 1995-96 will average approximately 600 per quarter. The number of
informational materials provided is also extraordinarily high due to our participation in the Orange County Fair. The division was on
target for the number of newsletters published. While these statistics reflect the activities of the Communications Division during the
first quarter, we are currently developing new activity trends that better reflect the attainment of our goals and objectives.
350
300
250
200
a 95-96 Budget
•1st Qtr. Actual 150
100
100
50 20
0
No. of Tours &
Presentations
90
No. of People
Contacted
X 100
Page2
320
200
n orma 1ona
Materials
Provided X 100
25
No. of Employee
Newsletters
Published
Activity Trends-Finance
Finance Administration:
The required coverage ratio for senior lien debt, the ratio of certain revenues to the debt service costs, is 1.25. Because property
taxes and user fees are received after the first quarter of the fiscal year, and principal payments are made in August, the ratio will
improve during the remainder of the year. Investment interest earnings are running slightly ahead of the budgeted yield as the
economy improves. Performance should improve even more as PIMCO manages our portfolio. Variable interest rates required to
remarket the COP issues have been favorable during the first quarter, as the "Orange County" penalty has declined and investors
are more comfortable with our credit. The number of COP issues outstanding is not expected to change this year as no new debt
was budgeted.
7.00
6.00
5.00
4.00
a 95-96 Budget
• 1st Qtr. Actual 3.00
2.00
1.00
0.00
Accounting:
2.28
Sr. Debt Svc.
Coverage Ratio
6.31%
6.00%
Yield% on
Invested
Reserves
4.75
Avg. COP
Interest Rate %
(Variable)
6
Outstanding
COP Issues
6
Accounts payable warrants, payroll warrants and industrial user bills issued per full time equivalent (FTE) are all running ahead of
the budgeted numbers. This means each FTE is processing more than anticipated. Journal entries processed per FTE are running
slightly below the number anticipated in the budget, reflecting a need to make fewer adjustments.
6,000
5,000
4,000
3,000
a 95-96 Budget
• 1st Qtr. Actual 2,000
1,000
0
3,750
962
Accounts Payable
Warrants Issued
Per FTE
5,900
1,528
Payroll Warrants
Processed
PerFTE
Page 3
4,100
1,134
Industrial
User Bills
Processed
Per FTE
952
Journal Entries
Processed
PerFTE
Activity Trends-Finance
Purchasing & Warehousing:
Purchase orders issued per Full-time Equivalent (FTE) is slightly below an expected quarterly trend as procedural changes impacted
purchase order issuance. Historically, capital budget purchases have been very heavy at the beginning of the fiscal year as
equipment required to meet goals, replace outdated tools, and improve efficiency is requisitioned. However, due to changes in
signature authority guidelines, budgetary changes, and Districts' reorganization, most divisions began requesting purchases late in
the quarter. The number of bids per FTE has greatly exceeded initial quarterly estimates as several RFPs were added for
maintenance and professional services formerly handled in-house including security service and the servicing of generators, cranes,
and hoists; etc.. Warehouse issues per FTE are lower than this year's estimations, but in line with last year's actual. This is partially
attributable to the Districts-wide commitments to reduce the Joint Operating Expense budget by 10% and to reduce the number of
items kept in the warehouses.
20.000 18.670
15.000
095-96 Budget 10.000
• 1st Qtr. Actual
5.000
0.000 +,---'----
P. O.'s Issued Per
FTEX 10
4.225
15
Written Bids
PerFTE
Page4
7
11.429
2.274
Warehouse
Issues Per FTE
X 100
Activity Trends-Information Technology
Information Technology Administration:
Computer Users Supported per Full-Time Equivalent (FTE) is based on the number of staff members in Information
Technology Department (ITD) tasked with providing direct support. The initial benchmark of 13 FTE Users per staff member
is too low, and based on our experience should approximate 25. The current 38 FTE Users/staff reflects what we believe to
be an understaffing issue that has a direct impact on our ability to adequately support the Districts' computer users. This
figure will be lowered when a contract is approved for outsourcing some of the hardware and software support, thereby
allowing in-house staff to conduct tasks not easily contracted. Hardware Work Orders per FTE represent the number of Work
Orders completed divided by the number of ITD staff assigned to such requests. The original benchmark of 17 was based
solely on estimates as opposed to actual data. The current figure of 26 represents an accurate figure that will continue to be
monitored closely. Nevertheless, work orders are more the 50% greater than projections and also represent a potential
staffing issue deserving further analyses.
40 38
30
20 a 95-96 Budget
• 1st Qtr. Actual
10
0 +----'--
Hardware Support:
Computer Users
Supported per FTE
26
Hardware Work
Orders per FTE
30
13 12
2
Plant Automallon
Programable Logic Additional Data
Controllers Installed Points Installed
The phone directory numbers maintained per FTE indicates the number of PBX or telephone lines serviced. Unexpected
expansion in this system has resulted in more numbers maintained than those reflected in the Activity Trend estimates for FY
1995-96. Similarly, due to the increasing use of technology, we have more personal computers than initially estimated. This
case is also reflected in the Card Readers graphic. Hardware work orders per FTE also reflect an unanticipated increase.
Because of the additions of the aforementioned devices, work orders to install and maintain them have also increased. It
• should be noted that existing staff have absorbed these heretofore unpredicted duties and responsibilities.
100.0 94
90.0
80.0
70.0
60.0 50
50.0 a 95-96 Budget 40.0 •1st Qtr. Actual 25 30.0
20.0 13.0 15.9 12 8
10.0
0.0 Personal Hardware Work Card Readers
Directory Numbers Computer Orders/FTE Maintained/FTE
Maintained/FTE Maintained/FTE
X 10
Page 5
Activity Trends-Information Technology
Software & Plant Automation:
Software work orders per FTE is above FY 1995-96 Activity Trend estimates and will likely continue to increase. Prior to this fiscal
year, lnfoITTiation Technology (IT) utilized manual work orders. This process as been networked and automated via a Maintenance
Management System (MMS) that allows other divisions to direct work orders to IT electronically. The ease of directing work orders
to IT coupled with additional internal controls requiring staff to be more stringent in documenting requests for service (e.g. quick
service call) accounts for the increase. The number of network users supported per FTE results from additional computer purchases
and implementation. The vast majority of desktop computers are networked to one of several servers and thus require on-going
network troubleshooting, maintenance, repair and upgrade.
60 57
50
40 38
O 95-96 Budget 30
• 1st Qtr. Actual 20
7 9
10
0
Software Work Network
Orders/FTE Users Supported/FTE
Page6
Activity Trends-Human Resource
Human Resources Administration:
After further research, the Activity Trends in the FY 1995-96 Budget required refinement to more accurately portray the performance
of the Human Resources Department. Employees supported by each HR position is slightly below the goal. Increased cross-
training and decreased regulation should foster goal attainment within the next 12-24 months. However, Human Resources training
as a percentage of operating expense generally reflects National benchmari<s.
9.0
8.0
7.0
6.0
5.0
a 95-96 Budget 4.0
• 1st Qtr. Actual 3.0
2.0
1.0
0.0
Human Resources & Training:
8.3
Employees Supported
Per Human Resource
Employee
X 10
2.6% 2.3%
HR/Training as a %
of Operating Expense
The Districts recruitment time or "time to fill" numbers for new positions exceeds the National average by two to four times. This is
partially due to the proportionally significant number of new hires (some within new classifications) occurring relatively
simultaneously over the course of the last several months. Additional internal process controls should cut these numbers in half
prior to July, 1996. Posting periods, physical exams, supervisory delays, and notices to previous employers all play a part in the
notably high numbers. Turnover compares favorably to the benchmark for utility agencies and falls below the expected turnover
ratio of 10% nationally for private organizations. The Districts' cost per hire is better than other utility districts and private
organizations both in non-exempt and exempt recruitment. Exempt employee hours are significantly lower primarily since in-house
staff are used instead of executive search firms.
a 95-96 Budget
•1st Qtr. Actual
140 134
120
100 94
80
60
40
20
0 +----
No. of Recruitment No. of Recruitment
Days For Exempt Days For Non-Exempt
Employees Employees
Page 7
Employee
Turnover
Cost Per Exempt Cost per Non-Exempt
Employee Hired Employee Hired
X 100 X 100
Activity Trends-Human Resource
Safety & Emergency Response:
During the 1st Quarter, workers' compensation claims where below the quarterly projection of eleven (11 ), and there were no lost
work day cases. Additionally, the Total Injury Rate was 6.1 as opposed to last year's 8.7-a 30% decrease. The Districts' accident
experience is even more significant when compared to the 16.3 industry average for Total Injury Rate, and is notably lower than the
two previous years. We believe this can be attributed to the successful implementation of new safety programs and improvement in
existing programs during the last several quarters. The job hazard analysis is a process designed to inform contractors and District
personnel of potential hazards which may be encountered during a job. Job site safety compliance audits and regulatory compliance
audits are on target based on annual projections.
45
40
35
30
25
20
15
10
5
45
0 _ _.___
No. of
Workers' •95-96 Budget Comp. Claims •1st Qtr. Actual
30
14
Job Site
Safety
Compliance
Audits
Regulatory
Compliance
Audits
PageB
Lost Work
Day Rate
0.0
8.7
Total Injury
Rate
20
Job Hazard
Analysis
X 10
Activity Trends-Maintenance
Maintenance Administration:
As stipulated in the following maintenance sections, one of the primary focuses of the Maintenance Department in Fiscal Year 1995-
96 is to develop a solid database for our Computerized Maintenance Management System (CMMS), thereby devoting more time to
a total Planned Maintenance philosophy. The trends we develop this fiscal year will be utilized to project future expectations. The
graph portrays the impact of CMMS implementation and resource allocation on the Maintenance Department, as well as the
temporary freezing of authorized positions (both discussed in further detail in the respective maintenance divisions). We still
anticipate achieving a 2:1 ratio of preventive maintenance (pm) tasks versus corrective maintenance (cm) tasks. This ratio is widely
accepted and considered progressive based on many maintenance industry benchmarks/standards.
60.0
50.0
40.0
30.0
20.0
10.0
a 95-96 Budget
• 1st Qtr. Actual
Preventive
Maintenance
Tasks Completed
X 1000
Maintenance Scheduling:
Corrective Maint.
Tasks
Completed
X 1000
Preventive
Maintenance
Backlog
X 100
Corrective
Maintenance
Backlog
X 100
Corrective
Maintenance
Suspended
X 10
Equipment Records
Entered into
Computer
X 1000
The Planning & Scheduling Division is a new unit this fiscal year, and as such, did not have reliable baseline data to develop
accurate Activity Trend benchmarks. The goals stipulated in the FY 1995-96 budget are only reasonable estimates of new job duties
to establish future parameters. Development of new PM SOP's has been transferred to the respective disciplines who indicate they
will solicit our help if needed. Reduction of obsolete inventory is less than what would be expected in a first quarter trend as this Is
a pilot project under on-going development. Disciplines have been reluctant to remove "unneeded" stock because they believed the
item costs would be deducted from their budgets. Nevertheless, recommended reductions from existing stock should exceed
$150,000 for the 2nd/3rd quarter period. As a result of benchmarking preventive maintenance on major facility accouterments, our
scheduled PM program for Primary/Secondary basins and digesters meets or exceeds our initial estimates. The disciplines should
be implementing such PM programs commencing January, 1996. Pump Station maintenance scheduling is currently undergoing
revision/review.
a 95-96 Budget
• 1st Qtr. Actual
30
25
20
15
10
5
10
0
0 -+-_.__.___--I_...__
Develop New
Preventive
Maintenance
S.O.P.'s x 10
Reduce
Obsolete
Inventory, $
X 10,000
29
Perform Preventive Maintenance on:
Primary Digester Secondary
Basins Cleaning Basins
Page 9
5
0
Pump
Stations
Activity Trends-Maintenance
Plant Maintenance:
During the first quarter of FY 1995-96, emphasis was placed on the continued development of the Computerized Maintenance
Management System (CMMS) database and its requisite inventory items. Approximately 77% and 66% respectively of the annual
target for "Pieces of Equipment-Computerized" and "Preventive Maintenance Instructions" have been achieved the first quarter.
Preventive and corrective tasks completed are well within targeted parameters. It should be noted that accurate metrics from
previous years are not available for comparative purposes and FY 1995-96 Activity Trends were best estimates only. Trends
developed this fiscal year will be utilized for future projections.
600.0
500.0
400.0
300.0
200.0 ·-
100.0
0.0 _.......__
Preventive
Maintenance Tasks
Completed a 95-96 Budget x 1 o
• 1st Qtr. Actual
Corrective
Maintenance
Tasks
Completed x 10
Collection Facilities Maintenance:
Preventive
Maintenance
Backlog
Corrective
Maintenance
Backlog
550.0
Pieces of
Equipment
in Computer
Database X 10
Computerized
Preventive
Maintenance
Instructions
Similar to other maintenance divisions, Collection Facilities is implementing the CMMS system. Preventive and corrective
maintenance figures are much higher than annual estimates as the CMMS system came on-line for this Division sooner than
expected. Computerized pieces of equipment are 83% complete, while PM instructions are 86% finished. Manhole inspections per
staff is also higher than expected. Finally, spills reported are below projections and represent a positive trend that will hopefully
continue.
50
45 a 95-96 Budget
40 • 1st Qtr. Actual
35
30 25
25
20
15
10
5
0
Manhole Preventive
Inspections Tasks
Per Employee Completed
X 100 X 100
Corrective
Tasks
Completed
X 10
50
30
0
Preventive Corrective
Maintenance Maintenance
Backlog Backlog
Page 10
21.519.7
Pieces of
Equip.
Computerized
X1,000
35
Active
Preventive Spills
Maintenance Reported
Instruction x 10
Activity Trends -Maintenance
Mechanical Maintenance
During the first quarter of FY 1995-96, emphasis was placed on the continued development of the Computerized Maintenance
Management System (CMMS) database and its requisite inventory items. Approximately 83% of the annual target for "Pieces of
Equipment-Computerized" has been achieved this quarter. It should be noted we have also incorporated the Auto Shop into the
CMMS. The rapid expansion of this database has resulted in a higher than anticipated preventive maintenance backlog.
Furthermore, efforts to complete the Inventory database required a shift in resources. Preventive maintenance and corrective tasks
completed are well within targeted parameters and we have considerably improved our corrective maintenance backlog when
compared against estimated annual Activity Trend projections. The Division has maintained a 11 % vacancy rate in order to meet the
10% reduction in the Joint Operating Expense budget.
80.0 095-96 Budget 75.0
70.0 • 1st Qtr. Actual
60.0
50.0
40.0 35.0
27.0 29.9
30.0
20.0
10.0
0.0
Preventive Corrective Preventive Corrective Pieces of Computerized
Maintenance Tasks Maintenance Maintenance Maintenance Equipment Preventive
Completed Tasks Backlog Backlog in Computer Maintenance
X 100 Completed X 10 X 10 Database Instructions
X 100 X 100 X 100
Electrical Maintenance:
During the first quarter of FY 1995-96, emphasis was placed on the continued development of the Computerized Maintenance
Management System (CMMS) database and its requisite inventory items. Approximately 94% of the annual target for "Pieces of
Equipment-Computerized" has been achieved this quarter. The rapid expansion of this database has resulted in a higher than
anticipated preventive maintenance backlog. Furthermore, efforts to complete the inventory database required a shift in resources
resulting in lower production in the Preventive Tasks Completed category. Conversely, corrective tasks completed are well within
targeted parameters and we have considerably improved our corrective maintenance backlog when compared against estimated
annual Activity Trend projections. The Division has maintained a 15% vacancy rate in order to meet the 10% reduction in the Joint
Operating Expense budget. Some positions will be filled in the third quarter and allow us to focus on improving the preventive
maintenance tasks completed and PM backlog.
80
80 74.7 75
70 65
60 0 95-96 Budget
50 •1st Otr. Actual
40 33 32.5 29.5
30 20.0
20 10.3
10
0
Preventative Corrective Preventative Pieces of Preventative
Maintenance Tasks Maintenance Corrective Equip. Maintenance Maintenance Maintenance Completed Tasks Completed Computerized Instructions Backlog Backlog X 100 X 100 X 10 X100 Computerized
X 100
Page 11
Activity Trends-Maintenance
Instrumentation Maintenance:
During the first quarter of FY 1995-96, emphasis was placed on the continued development of the Computerized Maintenance
Management System (CMMS) database and its requisite inventory items. Approximately 102% of the annual target for "Pieces of
Equipment-Computerized" has been achieved this quarter. Because of the development of new facilities, our inventory has
increased and thus exceeded initial Activity Trend estimates in this category. Furthermore, efforts to complete the inventory
database required a shift in resources. The rapid expansion of this database has resulted in a higher than anticipated preventive
maintenance backlog. Preventive maintenance and corrective tasks completed are well within targeted parameters. The Division
has maintained a 22% vacancy rate in order to meet the 10% reduction in the Joint Operating Expense budget. Many positions will
be filled in the third quarter and allow us to focus on improving the preventive maintenance backlog as well as provide supporting,
comprehensive documentation to the CMMS database.
100.0
80.0
60.0
40.0
20.0
095-96 Budget
• 1st Qtr. Actual
60.0
0.0 +-......... -
Preventive
Maintenance Tasks
Completed
X 100
Corrective
Maintenance
Tasks
Completed X 100
Preventive
Maintenance
Backlog
X 10
Page 12
Corrective
Maintenance
Backlog
95.0 97.1
Pieces of
Equipment
in Computer
Database X 100
Computerized
Preventive
Maintenance
Instructions X 100
Activity Trends-Technical Services
Environmental Management:
The Ocean Monitoring Baseline Program is a fixed-price contract worth $1.48 million that extends into FY 1996-97 and will not be
fully expended until that time. No charges were invoiced during the first quarter as a contract was not signed. The target number of
field samples collected during the year for the baseline Ocean Monitoring Program (OMP) is 1284 samples of which 903 (70%) were
collected in July. Typically, the bulk of collection is accomplished in mid-Summer, with remaining samples collected throughout the
year. Fully 95% of the expected July samples were collected with the remaining five percent due to the lack of target species for
bioaccumulation and histopathology testing. Each year the Districts contribute funds to the Southern California Coastal Water
Research Project (SCCWRP) under a joint-powers agreement and expend additional funds for OMP special studies. Program
expenditures as reflected are below a standard quarterly trend, however this trend will more closely approximate budget as the we
progress into the year. One of the special studies conducted by Environmental Management is the characterization of water quality
within our study area utilizing a fixed grid of 32 stations. The target number of samples each quarter is 96 of which 100% were
collected in the first quarter of FY 1995-96. It should be noted that the Activity Trends for Air Quality are not appropriate for
quarterly reporting. This includes the tracking of the annual air pollution and emission fee and the amount of criteria pollutant
emissions generated by the Districts. The figures are calculated once annually as required by the SCAQMD, and requires
significant resources that are not expended until year's end.
400.0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
• 95-96 Budget
• 1st Qtr. Actual
$148.6
$0.0
Ocean Monitoring
Baseline Program
X 10,000
128.4
Monitoring
Samples
X 10,000
$310.0
oint
Powers Agreement
Contribution
X 1,000
Page 13
$245.0
$1.4
'Ocean omtonng
Special Studies
Cost
X 1,000
384
96
Water Quality
Samples Taken
Activity Trends-Technical Services
Environmental Sciences Laboratory:
The Activity Trends noted in the FY 1995-96 Budget do not adequately quantify the duties and responsibilities of the Environmental
Sciences Laboratory (ESL). These are under review by the new Lab Manager. However, the following graph summarizes, in
modified format, those activities identified as FY 95-96 benchmarks. As noted in the analysis of sample type by month, the first
quarter data generally reflects the annual average experienced with the exception of August. The August "spike" is due to the larger
number of marine monitoring and NPDE$ samples tested in this month. Quality assurance efforts represent a significant portion of
laboratory sample analysis, and approximate 22% of this workload.
9000
8000
7000
S:6000 a.
~5000
0
ti;4000 .c E ~ 3000
2000
1000
Nov-94
Source Control:
It) It)
CIO CIO
Jan-95
Analysis of Sample Type by Month in the ESL
Mar-95 May-95
Month
Jul-95
... ... N CIO
Sep-95
N ... r, ...
7192 avg.
~Source
Control
-Air
-Special
Projects
-Marine
Monitoring
c:::J NPDES
c:::J Process
Control
--Average
Work Load
The new and renewed permit issuance activity is 74% of the annual budgeted item due to the scheduling of the permit renewals.
Permit issuance is typically lower during the first quarter of every fiscal year. The routine sampling and inspection of facilities are
91 % of the benchmark and are well within the expected trend. The downstream surveillance and Strike Force activities exceed the
estimate by nearly 25% due to the increased need for further investigation of illegal dischargers. Enforcement actions are 90% of
the activity trend benchmark due to fewer violations during the first quarter. Remaining activity trends portrayed are within the
expected range of variability. In summary, the overall performance of the Source Control activities relative to the FY 1995-96
Activity Trend estimates are 97%, ranging from 7 4% to 127%.
300.0
250.0
192.0
200.0 163.6
150.0
100.0
50.0
0.0
Routine Sampling and Downstream Newand Inspection of Surveillances, Renewed Permitted and Non-Strike Force Permits Issued permitted Dischargers X 10 X 10
a 95-96 Budget
• 1st Qtr. Actual
76.0
Enforcement
Actions &
Administrative
Orders
Page 14
Pretreatment
Program
Reports
266.8
116
Permittee, Regulation
Enforcement of Small
&General Quantity
Correspondence Dischargers
X 10
Activity Trends-Operations
Plant Operations:
Activity trends for the first quarter FY 1995-96 are tracking as expected when compared against 1995-96 annual estimates. Actual
expenditures for chemicals ran approximately seven percent below annual estimates. Lower per unit costs for caustic soda and
hydrogen peroxide were achieved by price negotiations with vendors. Actual plant operation division cost of $216 per million gallons
is approximately 19% below the annual estimate of $265 per million gallons. Budget savings have been realized through the
aforementioned unit costs on chemicals and staff vacancies which resulted in labor savings.
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
23.7 23.7
0.0 +-_.._ __
Influent Flow in
Tens of Millions
of Gallons
Per Day
Biosolids
Production
in Pounds per
Million Gallons
X 100
84.0
Energy Usage in kW x 100
Plant One Plant Two
Page 15
$54.3
Chemical
Costs
X 100,000
a 95-96 Budget
•1st Qtr. Actual
Plant Operation
Division Cost
Per Million Gallons
X 10
Activity Trends-Engineering
Engineering Administration:
Further review of the FY 1995-96 Budget Activity trends resulted in additional quantification of activities. The original Capital
Outlay Revolving Fund (CORF) forecast was $33.5 million of which $27 .4 million was the direct responsibiltiy of the Engineering
Department. This $27.4 million budget has now been revised to $19 million through June 30, 1996 due to several factors. The
primary factor is that several projects have been delayed including the primary rehabilitation projects and the Plant 2 Maintenance
Building. These project delays have also impacted first quarter results. The Plant 2 Warehouse has been delayed indefinitely, and
budgets for some projects have been revised downward to more accurately reflect estimates of construction costs.
• 95-96 Budget
• 95-96 Projected
• 1st Qtr. Actual
Design Engineering:
30
25
20
15
10
5
0
$27.4
$19.1
C.O.R.F. Expenditures
(in millions)
Further review of the Design Engineering functions is resulting in modification of the FY 1995-96 Activity Trend information as
reflected below. The number of connection permits issued a well as number of design submittals reviewed represents fluctuating
workload that may not hold to predictable quarterly patterns. Both trends are "ahead" of schedule yet annual projections are still
anticipated. Most Capital Outlay Revolving Fund (CORF) projects will be bid late this fiscal year because budget uncertainties
delayed establishing priorities and finalization of bid documents. Similarly, Collection Projects (by individual District) were delayed
as well.
40
40
35
30
25
20 16
15
10
5
0
No. of Connection
Permits Issued
35.0
8.5
No. of Submittals
Reviewed
X 10
Page 16
16
2
Budgeted CORF
Projects Bid
• 95-96 Budget
•1st Qtr. Actual
2 0
Budgeted
Collection
Projects Bid
Activity Trends-Engineering
Engineering Planning
Further review of the FY 1995-96 Budget Activity trends resulted in additional quantification of activities. The development of the
Strategic Plan was assigned to the Engineering Planning Division in July, 1995. In the first quarter, the components of the plan
were developed and the ground work laid for phase implementation. Phase I includes three projects: the rehabilitation of our
existing ocean outfall, a study on ways to manage peak discharges, and a review of financial charges. A detailed work scope for
these projects was prepared in the first quarter and later submitted to the Boards through the committee structure. The Board of
Directors authorized issuance of Requests for Proposals and it is expected that a Professional Services Agreement will be approved
in the third quarter.
STRA_TEGIC PLAN 1995-1998
1996 1996 1997 1998
MAY JW,, JUL AOO C AN
PROJECT NO.. 2:,, PREPARE Rl!PORT OH MA.HAGEIIENT OF P£AIC FLOW
PA:0.JECT. N0.1. FINANCIAL CKARD.Eft AND FEE IICHEDUI...E
Construction Management
The amount budgeted for CORF engineering construction projects in the first quarter is low compared to the remaining quarters in
FY 1995-96. This was due to the uncertainty surrounding the County bankruptcy and the ultimate delay of projects. These
estimated budget expenditures are based on the original CORF of $33.5 million and will be re-calculated for next fiscal quarter.
Actual amounts expended are slightly less than estimated budget expenditures for the first three months. It should be noted one of
the construction contracts has been delayed due to the contractor's less than adequate scheduling and performance, and has
somewhat impacted estimated expenditures. Our change orders are below annual estimates due to aforementioned project delays
as well as improved project planning.
$20.0
$15.0
$10.0
$5.0
$.0
$18.9
$1.1
CORF
Construction
Projects
Page 17
a 95-96 Budget
• 1st Qtr. Actu
5.0%
1.2%
Dollar Amount of
Change Orders as a
% of Construction Contract
al
)
.E!m!!fil • Written Report
•Overheads
•Slides
• Flip Charts
Originator ~
/'ev~a~l'lr
Department Head Sign Off~
Gary Streed
Anticipated Time 5 Min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JANUARY 10, 1996
FAH R96""'01 : Consideration of the following actions recommended by AIG
Financial Products Corp., for replacement of Letter of Credit, Refunding Certificates of
Participation, Series 1992 as follows:
(a) Consideration of motion authorizing staff to take all necessary actions to expedite
replacement of the Standby Letter of Credit Agreement with The Industrial Bank of Japan,
with a Substitute Standby Certificate Purchase Agreement with Barclays Bank.
(b) Consideration of motion authorizing staff to retain the services of a bond counsel firm for
this transaction as recommended by General Counsel, in an amount not to exceed $25,000, to
be entirely reimbursed to the Districts by AIG.
(c) Consideration of motion directing staff to submit all necessary documents for this
transaction to the Joint Boards of Directors at their January 24, 1996 meeting, for execution.
Summary:
AIG Financial Products Corp. (AIG), is the swap provider for the Series 1992 Refunding COPs,
wherein AIG pays the Districts a floating interest rate equal to the interest rate on the COPs, and the
Districts pays AIG a fixed interest rate. AIG has served the Districts with a demand letter directing
termination of the existing Standby Letter of Credit Agreement of The Industrial Bank of Japan, in
accordance with the Liquidity Guarantee Agreement. AIG has designated Barclays Bank to provide
the replacement Facility, in the form of a Standby Certificate Purchase Agreement.
The Liquidity Guarantee Agreement between AIG and the Districts permits AIG to demand the
termination and replacement of the Letter of Credit (LOC) when the short-term rating of the LOC
provider falls below "A-1+" (S&P) or "VMIG-1" (Moody's), which is the case with the rating of the
Industrial Bank of Japan.
AIG is directing this LOC replacement because securities such as the Districts' 1992 Series
Refunding COPs, supported by the LOC from The Industrial Bank of Japan, have been pricing at a
premium, whereas securities supported by liquidity facilities provided by non-Japanese banks are
pricing without the same premium. AIG is in the process of replacing the Japanese LOCs which
support a number of securities issued by other public agencies in California.
The LOC substitution for the 1992 Series Refunding COPs is in the mutual best interest of the
Districts and AIG.
Staff Recommendation
Staff recommends the FAHR Committee approve AIG Financial Products Corporation's
recommended actions above.
J:IWPOOC\FIN\CRANE\FPC.MTGIFAHR.96\COVERS.96\FAHR96.01
AlG Financial Products Corp.
1 oc Nyala Fa,m. WestpOrt. CT 06880
(203) 222-4700 (800l 248-SWA?
Fax: 12031 222-4780 Telex: 910-2409432 AIG FPC
Danie 1. Spence, Esq.
Rourke, Woodruff & Spradlin
701 South Parker Street
Orange, CaJjfornia 92668
December 5. 1995
County Sanitation Districts Nos. 1,2.3.5,6,7 and 11 of Orclllge County, California
Refunding Certificates cf Participation, 1992 Series
Dear Ms. Spence:
Reference is made to your le.teer of December 4th to me requesting a written staterncnl of Lhe grounds on
which AIG Financial Products Corp. directs termination of the existing Standby Agreement of The Industrial Bank
of Japan, Limited. Please note that while under the Liquidity Guarnnty Agreement by and among the Districts and us
no such statement of grounds is required in order for us to direct termination of .he existing Standby Agreement.,
please note that we are directing this replacement because sccuritie.s, such a~ the Cenificates, supported by liquidity
facililies as provided by the Industrial Bank of Japan. Limited have, parrJcularly d1L"1.Ilg 1995, been priced at a
premium which is not ret1ected in the pricing of similar securities supported by liquidity facilities of Mn-Japanese
banks. Since the Bank wrote the initial facility in December of 1992, the long-term debt ratings of The Industrial
Bank of Japfill, Limited have been reduced to th.e A category from each of Moody's and Standard & Poor's and the
shorHem1 rating of Standard & Poor's of IBJ and of the Certificates has been reduced from A-1+ to A-1. I would
submit tlnt this substitution is in the mutual best interest of the Di.strict~ and of AlG Fmancial Products. Corp_
I hope the foregoing is helpful for your purposes. As I discussed with you today, keeping on the agenda for
the Joint Board meeting of December 13 is crucial for the substicution of Barclays to OC<.'1ir by year-end.
Very truly yours,
~
cc: Thomas L. Woodruff, Esq. Francis J. Coughlin, Jr.
Steven Kozak
----~/~'J' ______ _
•':I-. • -,_.1 _ -,µ..---~ '1--h IT../ =• T\...., r _jT .... , =-i.1
.E2!ml!! •Written Report
•Overheads
•Slides
•Flip Charts
~,;~
Department Head Sign Off
Steven J. Hovey
Anticipated Time 5 Min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JANUARY 10, 1996
FAHR96-02: Consideration of a motion to purchase four (4) Compaq
server-class computers for use as Districts-wide network
servers from AmeriData (Specification No. E-262R-2) for a
total cost of $135,875 not including tax and 1 % CMAS fees.
Summary
The Districts presently support office automation applications (word processing,
spreadsheets, etc.) from six Novell 3.12 file servers. Each department has its own
server with the following exceptions; Administration shares Engineering's server and
Purchasing shares Human Resources' server.
Sharing of data, applications, printers and other resources across the Districts' network
has worked adequately in the past but has become very cumbersome with the Novell
servers. This is due to the fact that Novell 3.12 is designed as a "departmental" server
rather than an "enterprise" server. The Districts need an enterprise-wide network
operating system and the appropriate hardware platform to support it.
Staff recognized that the existing Novell servers would not scale up in order to support
present and future computer-related services and connectivity requirements. These
future services include E-mail, modem pool sharing, group scheduling, desktop faxing,
document tracking and automatic document archival.
Besides hosting standard office applications, the new network must also allow any
desktop computer to connect to a variety of dedicated server computers. These servers
include the Plant Automation, Maintenance Management, Laboratory Information and
the new Financial Information systems being selected.
Based on journal reviews, GartnerGroup projections and technical specifications staff
has determined that the Microsoft NT Server software package meets all present and
foreseeable requirements.
) )
In conjunction with consultants from Quickstart of Newport Beach, staff did a review of
existing and future applications in order to size the hardware. Based on this review, four
server-class PCs will be adequate to support the Districts' needs. Details concerning
these PCs may be found in the appendices.
Staff Recommendation
An October 25, 1995, Board resolution authorized the Districts to purchase computers
through the California Multiple Awards Schedule (CMAS). In accordance with CMAS
regulations, it is not necessary to go through the bid process if purchases are being
made through the CMAS.
Staff recommends that the purchase be awarded to AmeriData. AmeriData was
selected since it is an authorized Compaq CMAS distributer with whom the Districts has
had some business experience. In addition, AmeriData has an Orange County office.
The brand of computer selected was Compaq. It was selected based on it being a
GartnerGroup recommended Tier 1 fTier 2 vendor and the only major manufacturer with
a rack-mounted configuration with the features required by the NT Server
implementation planned.
Staff recommends award of a purchase order to AmeriData for $135,875 (not including
tax). Payment of a one percent (1 %) State of California CMAS fee of $1,464.05 is also
required. Staff is also requesting authorization to execute/approve said purchase order.
J:\WPDOC\FINICRANEIFPC.MTGIFAHR.96\COVERS.96\FAHR96.02
January 10, 1996
FAHR96-02:
Summary
STAFF REPORT
Consideration of a motion to purchase four (4) Compaq server-
class computers for use as Districts-wide network servers
from AmeriData (Specification No. E-262R-2) for a total cost of
$135,875 not including tax and 1 % CMAS fees.
The Districts presently support office automation applications (word processing,
spreadsheets, etc.) from six Novell 3.12 file servers. Each department has its own
server with the following exceptions; Administration shares Engineering's server and
Purchasing shares Human Resources' server.
Sharing of data, applications, printers and other resources across the Districts' network
has worked adequately in the past but has become very cumbersome with the Novell
servers. This is due to the fact that Novell 3.12 is designed as a "departmental" server
rather than an "enterprise" server. The Districts needs an enterprise-wide network
operating system and the appropriate hardware platform to support it.
Staff recognized that the existing Novell servers would not scale up in order to support
present and future computer-related services and connectivity requirements. These
future services include E-mail, modem pool sharing, group scheduling, desktop faxing,
document tracking and automatic document archival.
Besides hosting standard office applications, the new network must also allow any
desktop computer to connect to a variety of dedicated server computers. These servers
include the Plant Automation, Maintenance Management, Laboratory Information and
the new Financial Information systems being selected.
Based on journal reviews, GartnerGroup projections and technical specifications staff
has determined that the Microsoft NT Server software package meets all present and
foreseeable requirements.
In conjunction with consultants from Quickstart of Newport Beach, staff did a review of
existing and future applications in order to size the hardware. Based on this review,
four server-class PCs will be adequate to support the Districts' needs. Details
concerning these PCs may be found in the appendices.
CSDOC O P.O.Box8127 0 FountainValley,CA92728-8127 •Tel. (714)962-2411 0FAX(714)962-3954
FAHR96-02
Page2
January 10, 1996
Budget Considerations
The Districts have budgeted $340,000 for Network System Integration in the 1995-1996
Capital Outlay Revolving Fund.
Technical Criteria
The four Microsoft NT servers are Compaq 133Mhz Pentium computers. They are
identical to each other except for the amounts of Random Access Memory (RAM) and
disk drive space. The amount of RAM and disk drive space depends on the intended
function of the particular server.
Compaq .was selected as a computer vendor for the following reasons:
1. Compaq is a GartnerGroup Tier 1 /Tier 2 vendor and builds a high-quality, reliable
product.
2. Compaq is the only Tier 1 /Tier 2 vendor manufacturing rack-mount computers.
This is important since floor space is at a premium in the computer room.
3. Compaq has the majority of the Intel-based server market.
In order to minimize downtime, a number of fail-safe/redundant features are
incorporated into the servers. These features are:
1. Error Correcting RAM -This hardware allows the detection and correction of
errors in RAM on the fly.
2. Disk Mirroring -Each of the server's system disk will be protected by a technique
called "mirroring." Mirroring provides an active duplicate of the system disk. If
the system drive crashes control is transferred immediately to the standby disk
without interrupting services.
3. RAID-5 Drives -RAID stands for "Redundant Array of Inexpensive Disks." This
technology allows a series of disks to be treated as a single large disk. If one of
the component drives fails, the other disks in the array take over its function and
service continues without interruption.
4. Dual Power Supplies -This option allows the servers to be powered from two
sources.
FAHR96-02
Page3
January 10, 1996
Staff Recommendation
An October 25th Board resolution authorized the Districts to purchase computers
through the California Multiple Awards Schedule (CMAS). In accordance with CMAS
regulations, it is not necessary to go through the bid process if purchases are being
made through the CMAS.
Staff recommends that the purchase be awarded to AmeriData. AmeriData was
selected since it is an authorized Compaq CMAS distributer with whom the Districts has
had some business experience. In addition, AmeriData has an Orange County office.
Staff recommends award of a purchase order to AmeriData for $135,875 (not including
tax). Payment of a one percent (1 %) State of California CMAS fee of $1,464.05 is also
required. Staff is also requesting authorization to execute/approve said purchase order.
J:\WPDOC\FIN\CRANE\FPCMTG\FAHR.96\STAFFRPT.96\SRFAHR96.02 Originator: M. Herrera; Dept. Hd. S. Hovey
1
.Es!!!!m!
D Written Report
•Overheads
•Slides
D Flip Charts
Originator ~
Garymstab
Department Head Sign~
Gary Hasenstab
Anticipated Time 5 Min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JANUARY 10, 1996
FAHR96-03: Consideration of motion to provide standby and callback
pay provisions for Programmers.
Summary
As automation of the treatment plants has progressed, demands upon the Plant
Automation Group in the Information Technology Department have increased
substantially during off-hours. At the present time, staff Programmers work an average
of 18 hours of overtime per week, and are called back to work after having left the plant
an average of five to seven times a month. Callback situations typically involve
assisting the Maintenance Department in solving problems related to plant automation
instrumentation. With few exceptions, this overtime occurs during system modification
or installation. Such instances are expected to generally decrease beginning twelve to
twenty-four months from now.
While the Programmer classification is in the Professional Employees Group,
employees in that class are non-exempt according to Fair Labor Standards Act (FLSA)
guidelines. The Professional Employees Memorandum of Understanding does not have
a Standby or Callback pay provision to provide authority for properly compensating
Programmers who are called back to work in accordance with the callback provisions of
the FLSA. Employees entitled to Standby pay typically volunteer for such duty and are
on standby for a period of one week.
Both Standby and Callback pay is provided to the Operations and Maintenance
employees that Programmers work with, and is appropriate compensation for being
required to return to work once the regular workday has ended and the
employee has left the plant and for being available for immediate return to work.
Programmers who are placed on standby status or who are called back to work should
also be entitled to these pay bonuses.
Budget Information
The total annual cost of implementing Callback and Standby pay for Programmers is
$11,950.
Staff Recommendation
Extend the Standby Pay and Callback Pay provisions in other Memoranda of
Understanding to the classification of Programmer in the Professional Group.
J:\WPDOC\FIN\CRANE\FPCMTG\FAHR.96\COVERS.96\FAHR96.03
January 10, 1996
STAFF REPORT
FAHR96-03: Standby and Callback Pay for Programmers
BACKGROUND
As automation of the treatment plants has progressed, demands upon the Plant
Automation Group in the Information Technology Department have increased
substantially during off-hours. At the present time, staff Programmers work an average
of 18 hours of overtime per week, and are called back to work after having left the plant
an average of five to seven times a month. Callback situations typically involve
assisting the Maintenance Department in solving problems related to plant automation
instrumentation. With few exceptions, this overtime occurs during system modification
or installation. Such instances are expected to generally decrease beginning twelve to
twenty-four months from now.
While the Programmer classification is in the Professional Employees Group,
employees in that class are non-exempt according to Fair Labor Standards Act (FLSA)
guidelines. The Professional Employees Memorandum of Understanding does not have
a Standby or Callback pay provision to provide authority for properly compensating
Programmers who are called back to work in accordance with the callback provisions of
the FLSA. Employees entitled to standby pay typically volunteer for such duty and are
on standby for a period of one week.
Callback pay is currently provided to the Operations and Maintenance employees that
Programmers work with, and is appropriate compensation for being required to return to
work once the regular workday has ended and the employee has left the plant.
Operations and Maintenance employees are also entitled to standby pay when required
to be available for immediate return to work. Since Programmers who are assigned
standby duty are also required to carefully manage their time away from work,
entitlement to standby pay is appropriate and equitable.
RECOMMENDATION
In order to provide employees classified as Programmer appropriate compensation for
being assigned to standby status on a regular basis, and to comply with the callback
provisions of the FLSA, it is recommended that the following provisions be added to the
Professional Memorandum of Understanding through a Side Letter of Agreement.
Callback Pay. When an employee is called back to work by Districts' management
without prior notice, and the employee has completed their normal work shift and left the
work station, or when prior notice is given but the work begins on the same day
CS DOC O P.O. Box 8127 0 Fountain Valley, CA 92728-8127 • Tel. (714) 962-2411 0 FAX (714) 962-3954
FAHR96-03
Page2
January 10, 1996
at least three hours after completion of the regular shift, the employee shall receive a
minimum of three hours of call back pay. The three hours minimum, whether or not
actually worked, shall be paid at the rate of one and one half times the regular hourly
rate. Employees who are called back a second time within a normal shift period are
considered to be working for the duration of that shift.
Standby Pay. Standby is time during which an employee is not required to be at the
work location or at the employee's residence but is required to be available for
immediate return to work. Standby assignments shall first be made on a voluntary basis.
A volunteer standby list shall be established by classification and job location. Standby
assignments shall be made from the list of employees who are competent and
experienced, in alphabetical order, on a rotating basis. In the event that no one
volunteers, the Districts shall assign standby by job classification and work location from
employees who are competent and experienced on a rotational basis. An employee
placed on standby shall be compensated at the rate of one hundred dollars per week,
and will receive Callback pay when they are actually called to work.
The total cost for providing Callback pay, assuming five instances of callback per month
at an average hourly rate of $25.00, is $6,750 annually. This amount is in addition to
the present overtime cost, since the majority of callback situations are resolved within
an hour. The total maximum cost to place one programmer on standby status is $100
per week for 52 weeks, or $5,000 annually. The total annual cost of implementing both
Callback and Standby pay for Programmers is $11,950. This amount is in addition to
the amount currently paid for overtime.
GH:ps
J:\WPOOC\FIN\CRANE\FPC.MTGIFAHR.96\STAFFRPT.96\SRFAHR96.03
fQm!fil
D Written Report
DOVerheads
•Slides
•Flip Charts
OriginatN-
Gary~slab
Department Head Sign Off~
Gary Hasenstab
Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JANUARY 10, 1996
FAHR96-04: Consideration of motion to approve benefit coverage for
regular employees working a reduced work week.
Summary
The Districts' current Employee Benefit Program is specifically limited to full-time
employees by Resolution 95-105. That Resolution specifies in the Definitions Article that
regular full-time employees are entitled to benefits as set forth in the resolution, and in
Section 38 that ''The Districts shall provide health insurance coverage ... for the benefit
of regular full-time employees." A similar provision will be found in each of the
Memoranda of Understanding with the various employee groups.
Extending employee benefits on a prorated basis to employees who would like to work a
reduced work week would enhance the Districts' organizational flexibility through job
sharing, more accurately match workload requirements with work schedules, potentially
reduce overtime costs and offer a greater measure of equity to employees who do not
work a 40-hour week.
The current budget has a total of thirteen part-time positions, including one
Storeskeeper Assistant in Finance, seven Part-time Assistants in Technical Services,
and five Part-time Construction Inspectors in Engineering. The Districts' Employee
Benefit Program could be extended to part-time employees on a prorated basis as
follows.
Budget Considerations
The annual cost of prorating benefits to part-time employees, based on all thirteen
positions working between 30 and 40 hours per week, and using the figure of 19
percent of payroll as the cost of non-time off benefits, is $54,000. That amount would
drop to $36,000 if the average number of hours worked was between 20 and 30 per
week, which is a more probable number.
J:\WPDOC\FIN\CRANBFPC.MTGIFAHR.96\COVERS.96\FAHR96.04
.,
Recommendation
Provide part-time employees with entitlement to employee benefits prorated on the
basis of 75 percent if the employee works on average between 30 and 40 hours per
week on average, and 50 percent if the employee works between 20 and 30 hours per
week. Amend the provisions of Resolution 95-105 to allow the proration of benefits to
part-time employees, and authorize Staff to amend MOU's, health plan Summary Plan
Documents and other administrative policy and procedure manuals as necessary.
J:IWPDOC\FIN\CRANBFPC.MTGIFAHR.96\COVERS.96\FAHR96.04
January 10, 1996
FAHR96-04:
BACKGROUND
STAFF REPORT
Consideration of Motion to Approve Benefit Coverage for
Regular Employees Working a Reduced Work Week
The Districts' current Employee Benefit Program, including all insurance and paid time
off provisions, is specifically limited to full-time employees by Resolution 95-105
Providing for Classification, Compensation, and Other Terms and Conditions of
Employment. That Resolution specifies in the Definitions Article that regular full-time
employees are entitled to benefits as set forth in the resolution, and in Section 38 that
''The Districts shall provide health insurance coverage ... for the benefit of regular full-
time employees." A similar provision will be found in each of the Memoranda of
Understanding with the various employee groups. The Definition Article also states that
"Part-time employees are not entitled to benefits."
Extending employee benefits on a prorated basis to employees who would like to work a
reduced work week would enhance the Districts' organizational flexibility through job
sharing, more accurately match workload requirements with work schedules, potentially
reduce overtime costs and offer a greater measure of equity to employees who do not
work a 40-hour week. In the last fiscal year eight employees who returned from
maternity leave requested a reduced work week. Employees returning from a disability
leave have been allowed to work a reduced work week pursuant to doctors' orders to
facilitate frequent visits to a doctor or otherwise ease the transition back to a full
schedule.
The current budget has a total of thirteen part-time positions, including one
Storeskeeper Assistant in Finance, seven Part-time Assistants in Technical Services,
and five Part-time Construction Inspectors in Engineering.
The Districts' Employee Benefit Program could be extended to part-time employees on
a prorated basis as follows. The specific means of prorating each benefit is shown on
Attachment 1.
The annual cost of prorating benefits to part-time employees, based on all thirteen
positions working between 30 and 40 hours per week, and using the figure of 19
percent of payroll as the cost of non-time off benefits, is $54,000. That amount would
drop to $36,000 if the average number of hours worked was between 20 and 30 per
week, which is a more probable number.
CS DOC O P.O. Box 8127 0 Fountain Valley, CA 92728-8127 0 Tel. (714) 962-2411 0 FAX (714) 962-3954
FAHR96-04
Page2
January 10, 1996
RECOMMENDATION
Amend the provisions of Resolution 95-105 as follows:
1. Amend Article I, "Definitions", to provide part-time employees with the
benefits set forth in Section 19, ''Vacations", Section 20, "Sick Leave", Section
23, "Personal Leave", Section 37, "Holidays", Section 39, "Insurance", and
Section 60, "Severance Pay, on a prorated basis as follows:
Hours of work per week Percent Benefit Subsidy
0-under 20
20-under 30
30-40
None
50 percent
75 percent
2. Authorize Staff to amend MOU's, health plan Summary Plan Documents and
other administrative policy and procedure manuals as necessary to be
consistent with recommendation 1.
FAHR96-04 ATTACHMENT 1
PRORATION OF PART-TIME BENEFITS
Benefit
Vacation and Personal Leave
Sick Leave
Holidays
Leaves of Absence
Personal
Medical and Family
Military
Jury Duty
Witness
Bereavement
Insurance
Medical
Dental
Life
Short Term Disability
Long Term Disability
Workers' Compensation
Tuition Assistance Program
Retirement
Proration
Accrued at 50% and 75% of the full-time rate
II
Paid as 4 hours (50%) or 6 hours (75%)
Covered by accrued time off as requested
II
II
It
It
Paid as 4 hours (50%) or 6 hours (75%)
Districts' contribution reduced by 25% or 50%
II
II
II
II
Compensation would be based on average earnings
Reimbursement reduced by 75% or 50%
Retirement benefit is based on actual hours worked
GH:ps
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.04
Formal
D Written Report
•Overheads
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0 Flip Charts
Originator L
Gary 'j'JJJstab
Department Head Sign Off._~....;....;;_-
Gary Hasenstab
Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
FAHR96-05:
Summary
AGENDA FOR
JANUARY 10, 1996
Consideration of motion to approve revision of
Resolution 95-105 to reflect agreement with bargaining
units to rescind provisions granting a one-percent
salary increase to all employees.
During the 1993-94 negotiations with the Districts' bargaining units, an agreement with
the Orange County Employees Retirement System was made to implement the retiree
medical health premium offset program. Since negotiations, provisions of the original
program altered circumstances to the extent that a revised understanding is in the best
interests of the employees and the Districts.
The Districts and a majority of represented employees have agreed to rescind
provisions of their respective MOUs granting a one-percent salary increase to all
employees to offset the employees' one-percent cost to fund the retiree health premium
subsidy. A Side Letter of Agreement has been entered into to document that
understanding.
Staff Recommendation
Amend Resolution 95-105 to rescind a one-percent salary increase to fund the Retiree
Medical Health Premium since sufficient funds are available from an already existing
Additional Retiree Benefit Account (ARBA).
J:\WPOOC\FINICRANEIFPC.MTGIFAHR.96\COVERS.96\FAHR96.05
'· •
January 10, 1996
FAHR96-05:
BACKGROUND
STAFF REPORT
Revision of Resolution 95-105 to Reflect Agreement with
Bargaining Units to Rescind Provisions Granting a One-Percent
Salary Increase to All Employees
In the course of 1993-94 negotiations with each of the Districts' bargaining units, an
understanding was reached to enter into an agreement with the Orange County
Employees Retirement System (OCERS) to implement the retiree medical health
premium offset program as established by the County of Orange. Agreement with
OCERS has been reached. However, since the 1993-94 negotiations, provisions of the
original program and other circumstances have altered to the extent that a revised
understanding is in the best interests of the employees and the Districts.
Under the program originally proposed by the County of Orange, and as discussed at
length at each of the bargaining tables, employees were to contribute one percent of
their salary into an Additional Retiree Benefit Account (ARBA) that was also to be
funded by "excess" monies in the OCERS Unallocated Fund Balance and an initial
contribution by the County equal to one percent of payroll. The County also agreed to a
one percent salary increase to offset the employees' cost.
As the program actually evolved, OCERS determined they would not manage ARBA
funds beyond those generated by the Unallocated Fund Balance excess. The one
percent employee contribution was therefore retained by the County in a special fund,
and is treated as taxable earnings. This results in a net loss to the employee not
contemplated in the original program.
The Districts' ARBA fund balance is currently in excess of $2 million, which is more than
adequate to fund the retiree health premium subsidy of $1 O per month for every year of
service up to a maximum of $250 into the foreseeable future without the need for
additional funding. Because of this, it is not necessary for the Districts to establish a
special fund with the one percent employee contribution, nor to contribute an initial
amount equal to one percent of payroll, for our program to remain viable.
The Districts and a majority of represented employees have therefore agreed to rescind
provisions of their respective MOU's granting a one percent Salary increase
CSDOC • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • Tel. (714) 962-2411 • FAX (714) 962-3954
FAHR 96-05
Page2
January 10, 1996
to all employees to offset the employees' one percent cost to fund the retiree health
premium subsidy. A Side Letter of Agreement has been entered into to document that
understanding.
Cost Avoidance -$260,000 a year to the Districts.
RECOMMENDATION
It is therefore recommended that the following provisions of Resolution 95-105 be
amended as indicated.
1. Section 2. Upon the effective date of the agreement with the Orange
County Employee Retirement System to implement the retiree medical
health premium offset prograi'fl, salary ranges for all employee
olassifications shall be increased one peroent in aooordanoe with the
pro11isions of Seotion 46 of this resolution. In addition, salary ranges Yt1ill be
Jurther adjusted in aooordanoe with the :follo\·t'ing schedule:
2. Section 47. The Districts have entered into an agreement with the Orange
County Employee Retirement System (OCERS) to implement the retiree
medical health premium offset program established by the County of
Orange wherein the cost of health premiums are offset by $1 O per month
for every year of service up to a maximum of 25 years or $250 per month.
Upon the effooti1.«e date of the agreement, each employee will pa'.,' one
peroent of his or her salaf)1 to OGERS to fund the abo¥e program.
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J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.05
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Efil!!!fil • Written Report
•Overheeds
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FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JANUARY 10, 1996
F AH R96-06: Consideration of motion to receive and file staff reports
updating benchmarking and performance measurement
programs.
Summary
The Districts will use benchmarking practices as a systemic approach to optimizing
operating efficiencies, identifying areas for short and long-term cost containment,
assuring environmental compliance, and as a tool for strategic planning. Recently, the
departments have undertaken significant actions to develop benchmarking and
performance measurement strategies. Activity Trends, as reflected in the FY 1995-96
Budget, are a first step in the development of our benchmarking and performance
measurement programs. Other projects are underway, including tracking performance
externslly against other wastewater agencies, increased utilization of automation,
development of more comprehensive benchmark and performance standards, and an
evaluation of privatization.
As we progress with these programs, critical performance indicators will ultimately be
devised at the unit/process level, and will allow us to provide comprehensive operational
data that measure unit cost, efficiency and effectiveness.
Staff Recommendation
Information item only.
J:\WPOOC\FINICRANEIFPC.MTGIFAHR.96\COVERS.96\FAHR96.06
'
January 10, 1996
STAFF REPORT
FAHR96-06: Benchmarking and Performance Measurement Update
Background
Benchmarking and performance measurement have always been conducted to some
degree at the Districts since inception; however, the formal incorporation of these
processes into our organizational culture, and the inclusion of a performance-based
philosophy into day-to-day operations, has not occurred until recently. The
organizational restructuring beginning in FY 1994-95, and the Performance
Measurements Assessment Report completed mid-year by Ernst & Young, resulted in
significant revision to the Districts' Budget document. Beginning in fiscal year 1995-96,
Activity Trends and Performance Measures were included in the adopted annual budget
documentation in an effort to identify levels of service provided, productivity, and the
funding necessary to achieve service delivery objectives. The FY 1995-96 Budget
represented an important first step in developing our benchmarking and performance
measurement programs.
I. ACTIONS UNDERWAY
Projects are currently underway to further develop our benchmarking and performance
measurement programs and to provide the most cost-effective services while
maintaining our commitment to excellence in wastewater and environmental
management.
•
Quarterly Reporting
Quarterly reporting of current division-level Activity Trends, and a comparison of
actuals versus estimated annual performance (as reflected in the FY 95-96
Budget) has begun 1. This information provides managers and policy-makers an
overview of operations and performance trends, and ultimately translates into the
"cost of doing business" as reflected in the department cost allocation graphic
shown in the attached Exhibit 1. It should be noted that the first quarter cost per
million gallons treated is 19% below FY 95/96 projections and 15% below the
revised annual target of $599 per million gallons treated.
1First Quarter Report is provided under separate cover.
CS DOC O P .0. Box 8127 0 Fountain Valley, CA 92728-8127 0 Tel. (714) 962-2411 0 FAX (714) 962-3954
FAHR96-06
Page2
January 10, 1996
•
Cooperative Study with EBMUD & Sacramento Regional
Tracking performance externally against other wastewater agencies and the
benchmark "industry best practice," will be critical to establishing meaningful
metrics. The benchmarking process at the Districts will coincide with a
cooperative study between three facilities: CSDOC, Sacramento Regional
County Sanitation District (Sacramento Regional) and East Bay Municipal Utilities
District (EBMUD). This joint agency benchmarking study has been through the
RFP approval process and will commence early next fiscal year. The project will
provide unit-specific operating costs and operation and maintenance
performance measures, and will compare these three wastewater treatment
organizations on a cost-per-million-gallons basis. This study will be an extension
of the EBMUD Benchmarking Study completed in April 1995 which was used to
compare unit costs for chemicals, labor, and energy for five treatment processes
at seven participating facilities, including the Districts.
Performance Measurement/Benchmarking
The Operations Department has begun to integrate performance expectations
into their work plan and is an example of a department using benchmarking
practices as a systemic approach to optimizing plant operating efficiencies,
identifying areas for short and long-term cost reduction, assuring full compliance
with environmental regulations, and as a tool for strategic planning. A critical
component of benchmarking will be implementing a concise set of performance
measurements at the division level, unit process level, and ultimately the task
level. Measuring, evaluating and managing Operations' performance to meet or
exceed optimal efficiency targets will be a critical goal in the forthcoming fiscal
year.
Computerized Maintenance Management System (CMMS)
Maintenance staff have been consistently working toward completion of the
Computerized Maintenance Management System database and are
approximately 80% complete with the inventory input. This automated system
will provide more thorough performance-based information thereby allowing us to
examine in further detail those factors that impact the delivery of plant and
infrastructure maintenance services.
Financial Information System
Operational and financial information (i.e., flows, budget vs actual, division
contribution to cost, etc.), that provide a framework for performance
measurement are available in a number of separate reports currently generated
FAHR96-06
Page3
January 10, 1996
•
within the Districts; however, organization of this data into useful information
requires manual manipulation, calculation, and report generation. An integrated
Financial Information System (FIS) will be the backbone of technology needed to
support more timely information retrieval and automatic generation of progress
reports. Currently proposals are being sought for a vendor to implement the FIS
over the next twelve months.
Privatized Service Delivery
Ultimately, benchmarks and performance must be measured against agencies
performing similar responsibilities in the private sector. Privatization of various
services represents a viable alternative (as reflected in our recent contracting of
Security) and potentially provides additional opportunities to improve the cost-
effectiveness of operations. The Director of Operations, Bob Ooten, recently
traveled to the Indianapolis wastewater treatment plants and the AMSA
Conference on Privatization. He has prepared a report on this trip which
highlighted the importance of technology, scheduling, cross-training, preventive
and predictive maintenance, performance monitoring and communications.
These visits provided an important framework to further understand contract
services as recipient and provider.
II. FUTURE WORK PROGRAMS
Although significant strides have been made in developing benchmarking and
performance measurement strategies, the complexity and scope of such programs
require an on-going and multi-year commitment. The following items are examples of
approaches that will be utilized over the course of the next twelve to eighteen months to
further identify means to improve the efficiency and effectiveness of the Districts'
operations.
Refinement of Activity Trends
Additional refinement of the existing budgetary Activity Trends is needed. As
more comprehensive operational information is requested and gathered, it is
becoming increasingly apparent that more appropriate performance
measurements are available. Exhibit 2 is an example of various indicators for
measuring performance, identifying costs, etc., particularly for activities
encompassing wastewater maintenance and operations tasks. Although we
have currently incorporated several of these indices in the present budget, many
have not been included. For the FY 1996-97 Budget, indicators such as those
reflected in the attached exhibit will be used to provide better and more
comprehensive information. Furthermore, "administrative" indices of similar
FAHR96-06
Page4
January 10, 1996
•
•
scope will be developed for departments such as Human Resources,
Engineering, Communications and Information Technology. It is intended that for
FY 96-97, three to five refined Activity Trends will be included in each division's
budget documentation.
Team Building
An important component in the re-engineering or "re-inventing" of an organization
or process is employee participation and buy-in. Without such support,
implementation of benchmarks and performance-based programs becomes
difficult, thus risking opportunities for the greatest success. A number of division
level employee-based committees will assist with the creation of performance
measures and appropriate benchmarks. Currently, the Operations Department
has assembled a Cost Reduction Team to identify processes which can be
improved for operational efficiency and effectiveness. These committees,
meeting periodically with the administrative and financial analysts and/or
department heads, will be an important resource, and will help ensure the timely
integration of performance standards and benchmarks into day-to-day Districts
operations.
Efficiency, Effectiveness & Cost Reduction Studies
As shown in Exhibit 3, there have been significant expenditure increases in
Personnel, Maintenance and Other categories within the Joint Operating budget
over the last ten years. Annual percentage changes have averaged +5.6%
adjusted for the CPI. One component of this increase is the 70% growth in staff
since Fiscal Year 1985/86.
The data portrayed in the exhibit raise potential issues and concerns relative to
the growth of the Districts. As such, the information will be used to help identify
and prioritize programmatic areas for thorough uniUcost studies. Comprehensive
operational analysis at the division and/or unit level (dependent upon scope) will
be performed by in-house staff to understand the underlying factors contributing
to growth, develop appropriate performance measures and benchmarks, as well
as to determine means to improve efficiency and effectiveness. It is expected
that one such study will be completed per quarter, with implementation of agreed
upon recommendations occurring within the following twelve month period. The
sequence of division/department studies has yet to be determined; however,
those divisions with adequate existing information for thorough analysis and with
comparatively large budgetary increases will be the initial focus of effort.
FAHR96-06
Page 5
January 10, 1996
Miscellaneous
In addition to the previous items, other performance enhancement and
benchmarking opportunities will be pursued as time is available. In brief, special
projects will be periodically undertaken organization-wide in an effort to improve
the efficiency and effectiveness of operations while simultaneously accomplishing
our primary mission.
Financial Impact
It is difficult to estimate the financial impact of this long-term program as it is in the initial
stages of development. Nevertheless, various organization development specialists
indicate that implementation of comprehensive performance-based programs,
benchmarking and productivity improvements can result in a cost savings of 6%-11 % of
the operational budget. Based on Fiscal Year 1995/96, such savings would equate to
$3.49-$6.40 million annually.
Staff Recommendation
This is an information item only.
GRM/LAA:gm
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.06
EXHIBIT 1
Department Contrib·utions to Gallonage Charge
(First Quarter FY 95/96)
I I I
Human Management Resources Finance
$20/mg $13/mg $41/mg
* Adjusted for $43/mg Revenues
LAA/GM:dk
p:\home\opsec\realwrld\fahr2_95.ppt
Districts Net Joint
Operating Expenses
*$509/mg
I
I I
Information Operations
Technology ,_ --§!~Sjrr,9 ---
$20/mg Solids Disposal
$63/mg
~ I
Technical Maintenance Services $147/mg $81/mg
I
Engineering
$12/mg
CSDOC
Revision 12/27/95
Exhibit 2
Inputs:
Total cost of operations
Cost per capita of wastewater treated
Number and treatment capacity of plants and level of
treatment provided by each
Miles of infrastructure (pipeline)
Number of employee hours or Full-time Equivalents (FTE)
Outputs:
Miles of sewer pipe maintained, repaired and inspected
(by geographic area)
Percentage of miles maintained requiring repair
Percentage of above repaired this year
Miles of new sewer constructed
Square footage of facilities constructed/acreage improved
Number of service calls completed (by District)
Number/types of maintenance work orders performed
Amount of wastewater treated (by treatment type):
Primary treatment
Secondary treatment
Dry tons of sludge produced
To allow comparison of costs to other departments and
other wastewater entities
To provide a picture of the size of operations for which the
entity is responsible
To indicate time spent on providing the service
To indicate amount of infrastructure maintained, repaired,
and inspected
To indicate the increase in the infrastructure to meet the
needs of industry and the community in general
To indicate the level of work performed on existing system
beyond general maintenance
To indicate the flow through the system and the relative
volumes requiring various treatments
To indicate the volume of dry sludge produced
Outcomes:
Number of main stoppages per 100 miles of sewer main
(by District)
Average service response time (in hours)
Number of complaints (by District)
Number of days effluent exceeded federal and/or state
standards--number of violations of discharge permit
(include reasons for noncompliance)
Number of days influent exceeded treatment plant
capacity
Number of gallons effluent that did not meet federal
standards/total number of gallons processed through
system
Quality of water in receiving body downstream from
discharge
Infiltration and inflow ratio
Efficiency;
Percentage of repairs and Preventive Maintenance
completed within goal time
Percentage of line staff hours applied to actual
maintenance tasks/plant operations
To determine how well the infrastructure is maintained
To indicate the quality of service, particularly from the
customer's perspective
To indicate the ability of treatment process to remove
pollution adequately
To indicate the condition of the infrastructure and the
effectiveness of the maintenance program
To indicate ability of the service group to clear calls within
goal time
To indicate the productivity and cost-effectiveness of
personnel
Efficiency (cont.J:
Wastewater treatment cost per MGD treated (by treatment
type):
Primary treatment
Secondary treatment
Sludge disposal or use cost/dry ton
Revenue from sales of by-products less costs
Explanatory;
Description of what the receiving body is used for
Population served
Square miles served
Average daily flow/maximum daily treatment capacity (by
treatment plant)
Debt service coverage ratio
Projected needed capacity in 5 years/current capacity
To indicate the cost of providing the service and for
comparison with other wastewater entities
To provide information on the system's impact on the
environment
To allow the reader to understand the size and
demographics of the system
To indicate the extent of excess capacity
To show ability to pay debt
To indicate the need for future expansion and funding
Total revenues from customer billings/total operating costs I To determine how much subsidization, if any, is occurring
and debt service
GM:jt
C:\GMATHEWS\WPFILESIPERFORM\FAHRIFAHREXB.1_2
~
EY
FY 85/86
FY 86/87
FY 87/88
FY 88/89
FY 89/90
FY 90/91
FY 91/92
FY 92/93
FY 93/94
FY 94/95
10 Year Increases Exhibit 3
Data below reflect 10-year history of operating costs and the percentage(%) change in Personnel, Utilities, Maintenance & Other Costs (Research,
Contracts, Supplies, etc.). Percentage changes have also been adjusted for the Consumer Price Index factor in the given Fiscal Year. Data are also
presented for cost per million gallons (MG) based on average annual gallons treated.
Personnel '% Change
$10,238 -
$11,426 11.6%
$ 13,279 16.2%
$ 13,945 5.0%
$16,334 17.1%
$ 20,796 27 .3%
$22,352 7.5%
$24,660 10.3%
$24,715 0.2%
$ 25,861 = 4.6%
Utilities
$ 4,766
$ 5,002
$ 4,539
$ 5,025
$ 5,036
$ 5,018
$ 5,424
$ 6,740
$ 4,042
$ 2,630
Dollars in Thousands -Joint Operating
% Change Majht/Oth % Change' SUM
-$ 8,698 -$ 23,702
5.0%1 $11,177 28.5% $27,605
-9.3%1 $14,069 25.9% $31,887
10.7% $17,607 25.1%, $36,577
0.2% $18,349 4.2% $39,719
-o.4% $ 1 s,s3s 2.e¾l $ 44,649
8.1% $19,802 5.1% $47,578
24.3% $18,921 -4.4% $ 50,321
-40.0% $18,870 -0.3% $47,627
-34.9% $ 22,791 20.8% $ 51 ,282
% Change
16.5%
15.5%
14.7%
8.6%
12.4%
6.6%
5.8%
-5.4%
7.7%
~ A_~;:~----£~~
3.0%
4.3%
4.8%
5.2%
5.2%
3.5% •.
3.1%
1.5%•·
1.6%•,,
,_;.~-~;:;-
::tS.f~$.
fWl.'¼
9.9¾
-i4% t:2%
_,3-:i:~
>~4'% ·••,: ::' "<f" ~.6.9?o
~.1%
ilM.G:
$269
$304
$339
$380
$406
$455
$574
$594
$565
$578
% Chg $/MG MGD Treated
241
12.7% 249
11.5% 258
12.1% 264
7.0% 268
12.0% 269
26.3% 227
3.5% 232
-4.9% 231
2.4% 243
10 }'_r AVE. 11.1%, -4.0% I _ 12.0%, 9.1% 3.6% 5Ji°lo
*These numbers have not been adjusted for Joint Operating revenues.
Data below show the change in actual Full-time (FT) staffing levels and attendant percentage growth/decline in personnel
as of June 30th of the Fiscal Year.
Personnel Changes
FY FT Act. 0/q Change
FY 85/86 335 -
FY 86/87 353 5.4%
FY 87/88 382 8.2%
FY 88/89 418 9.4%
FY 89/90 487 16.5%
FY 90/91 542 11.3%
FY 91/92 579 6.8%
FY 92/93 581 0.3%
FY 93/94 587 1.0%
FY 94/95 572 -2.6%
10 yr AVE. 6.3% _I
10YRCOST.XLS
..
; .
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Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
FAHR96-07:
Summary
AGENDA FOR
JANUARY 10, 1996
Consideration of status report on Legal Services Committee
Activities
At its December 13, 1995 meeting, the Steering Committee, at the request of Joint Chair, John
Cox, received a report on the work of the Ad Hoc Committee on Legal Services. (Attached is a
copy of the December 6, 1995, memorandum which was on the Steering Committee Agenda). The
Steering Committee has recommended that this matter be directed to the Finance, Administration
and Human Resources Committee.
Currently, the staff is conducting an analysis of the proposed Contracts administrator position to
ascertain its appropriate role and function in the organization, and the extent to which outside legal
counsel could be relieved of routine review of contractual issues if this position were to be
established. This analysis is expected to be completed in mid-January and a "white paper"
outlining the various options on the provision of legal services should be completed in time for the
February FAHR meeting.
Staff Recommendation
This report is intended to formally submit this matter to the Finance, Administration and Human
Resources Committee pursuant to the Steering Committee recommendation.
J:\WPDOC\FIN\CRANBFPC.MTG\FAHR.96\COVERS.96\FAHR96.07
December 6, 1995
TO~
FROM:
MEMORANDUM
Members of the Steering Committee
Donald F. McIntyre
General Manager
SUBJECT: Committee on Legal Services
Pursuant to a request from Joint Chair John Cox for a status report on this Committee's
activities, this memorandum has been prepared.
In early October, a committee on legal services was established to review the Districts'
legal services and consider ways and means of containing costs. Committee members
are Directors John Gullixson and Tom Saltarelli, and former Joint Chair Bill Mahoney.
To date, two meetings have been held. The first meeting was held on October 11 and
included staff members Don McIntyre, Blake Anderson and Judy Wilson. Tom
Woodruff, General Counsel, was not in attendance, as he was on vacation at the time.
The issues raised at the October 11, 1995 meeting included: the cost of special
counsel for litigation; the feasibility of retaining an in-house counsel and paralegal to
review routine legal matters; training Districts' staff to monitor legal costs and request
work only when necessary; the option of having an attorney from Rourke, Woodruff and
Spradlin on-site for extended office hours during the week to improve access and reach
closure on issues more quickly.
At the close of the October 11, 1995 meeting, the staff was requested to review first
quarter billings from Rourke, Woodruff and Spradlin and determine which tasks could be
done by a competent in-house attorney and paralegal and which would need to be
contracted. It was agreed that upon Tom Woodruff's return from vacation he would be
asked to conduct a similar analysis. This work was to be completed by the end of
November and a follow-up meeting was to be scheduled to include Tom Woodruff.
The follow-up meeting was held on November 29, 1995. The staff prepared an analysis
assuming a three-person staff including an attorney, a secretary and a paralegal, with
the assumption that all litigation, source control, air quality, and labor law work would
continue to be contracted out. Savings were estimated at approximately $120,000.
Tom Woodruff prepared an extensive report outlining opportunities for future savings to
include the use of a contracts administrator to handle routine contract review; continuing
to train Districts' staff to prudently use legal services; continuing to use paralegal
services as a cost-effective alternative to attorneys where appropriate.
CSDOC O P.O. Box 8127 0 Fountain Valley, CA 92728-8127 0 Tel. (714) 962-2411 0 FAX (714) 962-3954
Members of the Steering Committee
Page2
December 6, 1995
After several hours of discussion, the Committee requested that a detailed option paper
be prepared for review. It was also agreed that no firm consensus had been reached
and further meetings would be required.
Among the options to be reviewed in the proposed "white paper" are:
• Establishing the position of Contracts Administrator and continuing to follow Tom
Woodruff's recommendations for continued cost containment;
• Converting the Contracts Administrator position to an attorney position and
assigning this person routine contract review, routine legal work, review of billings
by outside counsel and special counsel, and other routine legal work as time is
available;
• If the proposed workload supports a full-time Contracts Administrator, filling this
position and also hiring a full-time attorney to do the routine legal work and
review of outside legal billings.
Among the issues which were to be examined in the "White Paper" were reporting
relationships, i.e. how would an inside counsel relate to the outside General Counsel: If
the inside legal counsel reports to the General Manager, how does this relate to the
General Counsel, who reports to the Boards? Another issue requiring more information
is the duties and responsibilities of the proposed Contracts Administrator and how many
person-hours these duties entail.
It was agreed the staff would evaluate the workload of the proposed Contracts
Administrator and further survey the staff on their current and anticipated legal needs.
The "White Paper" will be prepared this month and be circulated to the Committee for
review and comment. Because this issue is quite complex, it was agreed that a
decision of this nature should not be rushed. The Committee plans to meet again in
January to develop a recommendation for the Boards.
DFM:JAW:jt
J:\WPOOC'IFIN\CRANBFPC.MTGIFAHR.96\120695.M1
c: Director John Gullixson
Director Tom Saltarelli
Bill Mahoney
fg!!!!.!!
• Written Report
• Overheads
•Slides
•Alp Charts Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
FAHR96-08:
Summary
AGENDA FOR
JANUARY 10, 1996
Consideration of a motion adopting Districts' position on
SCAG's Regional Comprehensive Plan and Guide -Finance
Chapter and authorizing staff to report to SCAG.
The goal_of SCAG's Regional Comprehensive Plan and Guide is to raise the level of economic
performance of the region to a higher level, while ensuring that environmental needs are met and
the quality of life for the region is enhanced. The Public Finance Chapter is not mandated. It was
provided for information and advisory purposes; however, since the Regional Comprehensive Plan
frequently provides the basis for new legislative efforts and mandates, staff has been following this
process and reviewing any recommendations which could potentially impact the Districts' revenue
base. SCAG has established a February 1, 1996 deadline for comments or concerns. In its
Finance Chapter, SCAG has included ten •Principles and Options for Improving the system of
Public Finance: Of particular concern to the Districts is Principle No. 6, which states: "Special
Districts with Independent Means to Raise Revenues Should Not Drain Property Taxes from
Cities and Counties Unless the Transfer Serves Appropriate Government Policy
Objectives."
The report goes on to state that MSpecial district property taxes have often been used to support
voter approved debt. To the extent that values depend on the viability of the district owned and
operated infrastructure, their use of property taxes is a reasonable revenue source and provision
must be made to ensure security for the repayment of this debt:
Currently, the Districts receive $31,162,000 a year in property taxes representing 6.7% of its total
funding sources including reserves. Property taxes have been primarily used for COP debt
service. Debt service on the COPs is approximately $34.6 million. If property tax were not
available for this purpose, user fees would need to be increased by an average of $34.32 or 48%.
Average user fees are currently $71.31. There would be no change in user fees in Districts 13 and
14 since they were formed subsequent to the passage of Proposition 13 and do not receive
property taxes.
Staff Recommendation
Given the importance to the Districts of retaining property tax to service debt and maintaining user
fees at a reasonable level, the Districts should send formal comments to SCAG. Comments
should emphasize the importance of wastewater treatment to the environment and public health,
and that the use of property taxes to retire debt on priority infrastructure is a reasonable and
appropriate use of these funds and contributes to enhanced property values.
J:IWPDOCIFINICRANE\FPC.MTGIFAHR.96\COVERS.96\FAHR96.08
January 10, 1996
FAHR96-08:
Background
STAFF REPORT
Districts' Position on SCAG's Regional Comprehensive
Plan and Guide -Finance Chapter
The Regional Comprehensive Plan and Guide (RCPG) is a publication of SCAG. Most of the
Chapters in the RCPG are mandated by Federal funding programs and local actions must be
consistent with the adopted RCPG in order to be eligible to receive funding. The Public Finance
Chapter is non-mandated and has been provided for information and advisory purposes. The
RCPG is still in draft. The staff received this draft on December 15. Because these issues are
of extreme importance to the fiscal foundation of the Districts, it was deemed advisable to bring
this report to the attention of the Board through the FAHR Committee. Policy comments
provided by the Joint Chair should receive a high level of attention from SCAG. February 1,
1996, is the closing for comments, therefore, there was sufficient time to bring this matter
through the Committee cycle to the full Board.
Although the Public Finance Chapter is advisory in nature, its policy recommendations will
receive significant attention at both the local and state level. The major thrust of the report is
that the fiscal system of California has become a dysfunctional patchwork. Since the passage
of Proposition 13 and the reallocation of property tax through the State, fiscal responsibility and
accountability have been diffused. Property tax, which had traditionally been a local source of
revenue to provide property-related services, is now in the control of state government and
subject to a subvention-type process. In recent years, with the very deep recession, this
situation has been exacerbated as the State moved first to help itself to the funds and also
shifted responsibilities to locals--often without increased resources. To address this situation,
the Public Finance Chapter recommends sweeping changes in fiscal policy. Ten basic
principles guide the recommendations in the draft Public Finance Chapter. (Attachment #1 to
this report lists these ten principles.)
Of particular concern to the Districts is Principle No. 6 "Special Districts With Independent
Means to Raise Revenues Should Not Drain Property Taxes from Cities and Counties Unless
the Transfer Serves Appropriate Governmental Policy Objectives." The report notes that there
were 855 special districts in Southern California as of FY '93. Although it is suggested that the
special districts should be weaned from the property tax to make that revenue available for
other purposes, it acknowledges that such a shift is not simple. The report states: "Special
district property tax revenues have often been used to support voter approved debt. To the
extent that property taxes depend on the viability of district owned and operated infrastructure,
their use of property taxes is a reasonable revenue source, and provision must be made to
ensure security for the repayment of this debt."
SCAG is recommending that the subregional entities would have the authority to eliminate
property taxes as a method of funding. The special districts would then be required to readjust
their user fees to support their services. The SCAG report also suggests three other options for
further study:
CS DOC D P.O. Box 8127 • Fountain Valley, CA 92728-8127 • Tel. (714) 962-2411 0 FAX (714) 962-3954
FAHR96-08
Page2
January 10, 1996
• Encourage special district mergers with financial incentives where counterproductive
duplication of services is occurring.
• Collapse special districts entirely as recommended in the past by the County
Supervisors Association (CSAC).
• Make all districts subsidiaries of local government so that citizens could look, for
accountability purposes, only to the state or a locality and to no other tier or agency with
additional or alternative authority.
The California Special District Association has argued that special districts that enhance
property wealth should not be excluded from sharing property taxes.
Potential Impact on CSDOC
As noted in the summary of this report, the Districts' property taxes, approximately $31.6 million,
are primarily used to meet debt service on its Certificates of Participation {see attachment No. 2
to this report). If the Districts were to lose this revenue source and still maintain its current
service levels, user fees would need to be increased an average of 48% (see attachment No. 2
for complete detail on the consequences for each district).
Other Related Developments
In addition to the SCAG recommendations regarding special districts' funding, a more sweeping
recommendation on special districts has been put forward by State Assemblyman Curt Pringle
(R-Garden Grove). Assemblyman Curt Pringle's proposal would place a measure on the
November 6, 1996 ballot to consolidate the sanitation and water special districts in Orange
County into a single County-wide Water/Sanitation District. This has been recommended by
Assemblyman Curt Pringle as a cost saving measure and an effort to improve accountability.
The CSDOC Steering Committee has recommended that Joint Chair, John Cox, communicate
the Districts' position on this bill, including the current efforts underway to consolidate the nine
Districts through the LAFCO process.
Finally, in a related development, the Orange County Division of the League of California Cities
will be considering a proposal to form a separate Council of Governments (COG) at its January
11 meeting. The potential membership could include cities, the County, Sanitation Districts,
OCTA, Orange County Business Council and schools. The role of the COG would be to
address subregional and regional issues, prepare demographic projections, and provide input
into all SCAG activities, including the Regional Comprehensive Plan and Guide. If this COG
were to be established, it would appear to be the likely subregional entity to have "the authority
to eliminate property taxes" for various special districts within its jurisdictions should the SCAG
proposal actually be implemented. Given the importance of these issues to the Districts, this
initiative also needs to be followed carefully. The schedule for implementation of the proposed
COG assumes the development and formation of a Joint Powers Authority by the end of
February, 1996.
FAHR96-08
Page 3
January 10, 1996
Conclusion
Given the current economic and political climate, it should come as no surprise that special
districts are under scrutiny. It is important that sufficient information is provided to the policy
makers at the local and state level so that they can understand the mission of this agency. The
importance which effective wastewater treatment plays in maintaining the environment and
public health must be underscored. The infrastructure financed through Certificates of
Participation is certainly needed for economic growth and for the protection and enhancement
of property values. These points need to be made in formal comments to SCAG on the RCPG.
On the other hand, not every existing special district in Southern California deserves to exist
without change. There are many examples of special districts which are very local, duplicative,
and offer little in the way of regional problem solving. CSDOC should avoid finding itself in the
untenable position of defending all special districts. The message needs to be one of careful
study, consolidation where appropriate, and support for those districts which are providing
important regional service. Not all special districts should be treated exactly the same. There
are significant differences among special districts. CSDOC should work to distinguish its role
and mission as an agency with a critical regional function, which needs to have a predictable
and reasonable financial foundation.
Recommendation
The District should send formal comments to SCAG on the Public Finance Chapter of the
Regional Comprehensive Plan and Guide, emphasizing the importance of wastewater treatment
to the environment and public health and supporting the use of property taxes to retire debt on
priority infrastructure as a reasonable and appropriate use of these funds.
JAW:cmc
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.08
January 10, 1995
Principles and Options
for
Attachment No. 1
Improving the system of Public Finance
1) Different Local Finance Models Can Be Followed in Different Parts of the State.
2) Any Reallocation of Sources of Revenues Must Insure that the State, at the Time of
Implementation, Does not Collect more Total Tax Revenue Under the New system that it
Did Previously, Although the Burden may Be Shifted Among Groups of Taxpayers.
3) Flexible Fiscal Management is Needed at the Scale of the Subregion and the Region.
4) Revenue Incentives Need to be Restructured to Maximize the Attraction and
Maintenance of Quality Jobs in the Region.
5) To the Extent that the State Continues to Mandate Functions on the Localities the State
Must Raise and Provide the Necessary Revenues to Local Authorities. Local
Governments May, at Their Option, Contract with the State to Provide the Services So
Mandated.
6) Special Districts With Independent Means To Raise Revenues Should Not Drain
Property Taxes from Cities and Counties Unless The Transfer Serves Appropriate
Governmental Policy Objectives.
7) Incentives Should Be Created or Disincentives Removed to Encourage Subregional or
Regional Service Delivery Where it is Demonstrably Less Expensive, More Efficient and
Improves the Business Climate.
8) Dedicated Sources of Revenues for Local Services Should Be Created.
9) The System Adopted Should Be Understandable and Reinforce the Capacity for Public
Accountability.
1 O) Market Pricing Should Be A Preferred Approach to Financing Government Services and
Allocating Service Levels.
JAW:cmc
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\ATFAHR96.07
• . -, ATTACHMENT No . 2
1/3/96
(
User Fee Increases Needed for COP Service
To Replace Property Taxes
1995-96 Budgeted COP Service No. Of Taxes For 1995-96 Potential Tax Loss
Budgeted COP (Debt) Made From Equivalent COP Serv Single Fam Revised %Change
ECQpiaxe~ s~~i!;;e ·e[Ql2 Ta~e~ Qwelling Units Per !;Q!.! !.!~er Fee SEB Fee ~
1 $ 2,105,000 $ 4,289,000 $ 2,105,000 73,847 $ 28.50 $ 83.24 $ 111 .74 34.24%
2 9,515,000 11,392,000 9,515,000 274,504 34.66 71.52 106.18 48.47%
3 10,615,000 10,694,000 10,615,000 285,750 37.15 73.89 111.04 50.27%
5 2,415,000 2,013,000 2,013,000 27,590 72.96 96.75 169.71 75.41%
6 1,225,000 1,468,000 1,225,000 43,682 28.04 76.47 104.51 36.67%
7 3,230,000 2,401,000 2,401,-000 106,000 22.65 50.09 72.74 45.22%
11 2,041,000 2,160,000 2,041,000 52,000 39.25 60.00 99.25 65.42%
13 27,000 8,175 100.00 100.00 0.00%
Total $ 31,146,000 $ 34,444,000 $ 29,915,000 871,548 $ 34.32 $ 71.31 $ 105.63 48.13%
COP _TAX.1.XLS 9:19 AM
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• Overt\eads
• Slides
• Flip Charts Anticipated Time 15 Minutes
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
FAHR96-09:
Summary
AGENDA FOR
JANUARY 10, 1996
Consideration of motion to receive and file Staff Report
dated January 4, 1996 re the Joint Agreement of the
County of Orange, the Official Investment Pool
Participants' Committee and Each Option A Pool
Participant; and consideration of Resolution No. 96-_
approving said Agreement.
On the afternoon of January 3, 1996, the Orange County Investment Pool (OCIP)
Committee reached final agreement with the County on all of the details of the "Joint
Agreement of the County of Orange, the Official Investment Pool Participants'
Committee and Each Option A Pool Participant" for the resolution of claims against the
County of Orange dated December 18, 1995. The Joint Agreement has been conveyed
to all Option A participants (the 190 schools, cities, special districts and other public
entities that signed the Option A version of the Comprehensive Settlement Agreement
that was approved in May 1995) for their individual consideration and approval. The
attached staff report outlines the major features of the Joint Agreement. Copies of the
conveyance letter from Pillsbury Madison & Sutro and the executive summary of the
Joint Agreement are attached. To obtain a copy of the entire Joint Agreement, call
Corina Chaudhry at (714) 962-2411, extension 2003.
Staff Recommendation
Staff recommends that the Finance, Administration and Human Resources Committee
receive and file the staff report, and recommend approval of the Joint Agreement to the
Joint Boards of Directors.
J:\WPDOC\GMIBANDERSOIFAHR196.09A
January 4, 1996
FAHR96-09:
STAFF REPORT
Consideration of motion to receive and file Staff Report dated
January 4, 1996 re the Joint Agreement of the County of Orange,
the Official Investment Pool Participants' Committee and Each
Option A Pool Participant; and consideration of resolution
approving said Agreement.
The OCIP Committee has approved the "Joint Agreement of the County of Orange, the
Official Investment Pool Participants' Committee and Each Option A Pool Participant."
This has been a very lengthy process. Meetings were held throughout the summer to
develop a platform which would be the basis for paying off all of the County's vendors,
bond holders and non-governmental creditors. These meetings resulted in the OCIP
Committee first approving the Joint Agreement on September 7. The September
version of the Joint Agreement formed the basis of the legislation which was approved
by the legislature and signed into law by Governor Wilson in late-September. The Joint
Agreement moves revenues of certain County agencies and the OCTA into accounts
that will be used for paying off new borrowings which will be used to pay off the various
creditors mentioned above, and improves the order in which Option A participants
receive litigation proceeds from the lawsuits against Merrill Lynch and others. It also
removes all future recourse against the County by the Option A participants who sign
the Joint Agreement.
The September legislation did not check with all of the details of the Joint Agreement.
Naturally, the OCIP Committee insisted that the Joint Agreement be amended to
coincide with the state laws that had been passed to support it and was also concerned
that the errata of the September Joint Agreement be corrected.
Unfortunately, bankruptcy counsel for the County did not agree with the concerns of the
OCIP Committee and he delayed any substantive and constructive action necessary to
amend the Joint Agreement and resolve the impasse. When Judge Ryan originally
directed the County to amend its complaint against Merrill Lynch because the County
had not adequately demonstrated that it even had proper standing to sue Merrill Lynch
regarding the commingled investment pool, the Joint Agreement became valueless
because the ability of the Option A participants to receive any litigation proceeds from
the County's efforts was suddenly thrown into serious question. The OCIP Committee
had no reason to continue to press for amending a Joint Agreement whose very basis
was in such peril.
Fortunately, on December 1, 1995 Judge Ryan ruled that the County's amended
pleading was sufficient and that the County could proceed with the suit against Merrill
Lynch. Interest in amending the Joint Agreement was renewed by both the County and
CSDOC • P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411
Staff Report
Page 2
January 4, 1996
the OCIP Committee and, as a result of intense efforts by the attorneys and financial
professionals working for the OCIP Committee and the County, the December 18
amended Joint Agreement was approved in principle with the assumption that the
pending side letters between the County and the Cities Subcommittee and between the
County and the TCA would be subsequently approved by all relevant parties. The side
letters have been approved, and after a flurry of letters between the attorneys, the Joint
Agreement was approved for distribution on January 3 and has been conveyed to the
Option A participants for their consideration and approval. Price Waterhouse is
handling the distribution and will be receiving the approval/disapproval results from each
of the approximately 190 councils and boards that must decide on the Joint Agreement.
Impact on the Sanitation Districts
The Joint Agreement is favorable to the interests of the Sanitation Districts. Under the
Comprehensive Settlement Agreement of May 1995, the Option A participants (which
includes the Sanitation Districts) were entitled to share in the first layer of the litigation
proceeds 2: 1 with the County. Under the Joint Agreement, the County is now in the
third layer of litigation receipts. Schools will receive the first $55 million in litigation
proceeds, the non-school Option A participants will receive the second layer of
proceeds up to $325 million, and the County will receive the third layer of proceeds up
to $176 million. Layers four through seven are a combination of splits between the
Option A participants, the OCTA, and the County. OCTA's share will be a payback for
the $15 million per year it loses under the Joint Agreement.
In exchange for this improvement in the Option A's position in the litigation "receiving
line", the OCIP participants give up any further recourse against the County other than
the litigation proceeds. However, assuming that the secured and unsecured claims that
were fully allowed by the County under the terms of the CSA are, in fact, of limited value
because of the County's dire financial position, giving them up in favor of an improved
litigation position is prudent. It can be argued that only the litigation proceeds will
provide any further payback to the Sanitation Districts and the other Option A
participants. Today we have received approximately 80% of our original deposits that
were held by the County. Assuming that the litigation (or settlement) with Merrill Lynch
and the others goes reasonably well, we may approach 90% of our original deposits.
There is more good news. The Joint Agreement and its supporting letter from the
County's bankruptcy counsel provides that the withheld proceeds now being held by the
County will be released. The amount due to the Sanitation Districts will be listed in the
final Price Waterhouse documents which Sanitation Districts' staff does not have at the
time of this writing. We will report on this amount at the meeting.
r
Staff Report
Page 3
January 4, 1996
Most importantly, the Joint Agreement will provide the necessary funds for the County to
repay all of its non-government creditors. This is done by a net $15 million per year
reallocation of OCTA revenues to the County, and a total of $12 million per year ($4
million each) from Harbors, Beaches and Parks, Flood Control, and the Orange County
Development Agency. For the Sanitation Districts, this is a very favorable part of the
agreement. The repayment of all outstanding bonds by the County will remove the
cloud of default once and for all from the name "Orange County."
The Joint Agreement also provides that the County will use Thomas Hayes to oversee
the disbursement of revenues under the Joint Agreement. It also provides that the
County will not seek or support any diversion of revenue from any signing Option A Pool
Participant for the purpose of financing the repayment of claims in the County's Plan of
Adjustment. This particular provision is important because, as you may recall, the
County had advocated that the property tax revenues of the Sanitation Districts be
reallocated to the County for just that purpose.
Staff will provide additional details at the meeting of the Committee.
Staff Recommendation
Staff recommends that the Finance, Administration and Human Resources Committee
approve the Joint Agreement.
BPA:jt
J:IWPDOC\GM\BANDERSOIFAHR9609.SRA
•.
LOS ANGELES
NEW YORK
SACRAMENTO
SAN FRANCISCO
WASHINGTON, OC
TOKYO
WRITER'S OFFICE AND
DIRECT OIAL NUMBER
(619) 544-3177
LAW OFFICES OF
PILLSBURY MADISON & SUTRO LLP
SUITE 1800
IOI WEST BROADWAY
SAN DIEGO, CALIFORNIA 92101-B201
TELEPHONE 1619) 234-5000
FACSIMILE (6191 236-1995
December 27, 1995
TO: ORANGE COUNTY INVESTMENT POOL
PARTICIPANTS' DISTRIBUTION LIST
Re: In re County of Orange, Case No. SA94-22272-JR
MENLO PARK
ORANGE COUNTY
SAN DIEGO
SAN JOSE
HONG KONG
"JOINT AGREEMENT" PROPOSED BY THE COUNTY OF ORANGE FOR
THE RESOLUTION OF POOL-RELATED CLAIMS OF OPTION A POOL
PARTICIPANTS, AND OTHER RELATED MATTERS
Dear Pool Participant:
Enclosed herewith you will find an execution copy of an
agreement entitled JOINT AGREEMENT OF THE COUNTY OF ORANGE, THE
OFFICIAL INVESTMENT POOL PARTICIPANTS' COMMITTEE AND EACH OPTION
A POOL PARTICIPANT FOR RESOLUTION OF CLAIMS AGAINST THE COUNTY
OF ORANGE ("Joint Agreement") along with an Executive Summary
relating to that agreement.
This proposed Joint Agreement by the County is intended to
address the treatment of the remaining claims of Option A Pool
Participants allowed under the Comprehensive Settlement
Agreement ("CSA"), and to address certain other specific matters
related to the interests of Pool Participants.
While the Joint Agreement is not a Plan of Adjustment, if
executed by your government entity, it will have material impact
on your right to participate in the Plan of Adjustment process,
and will, to a large extent, define your entitlements under the
Plan of Adjustment. This is obviously a very important
document. It is technically drafted and requires your
attention, along with the specific advice of your own financial
and legal professionals.
As with the Comprehensive Settlement Agreement, the
financial and legal professionals of the OCIP Committee are
unable to act as advisors to you on an individual basis.
Rather, the financial and legal advisors to the OCIP
Committee have prepared the Executive Summary which accompanies
20846332
December 27, 1995
Page 2
this letter to assist you in understanding the Joint Agreement.
The impact of the Joint Agreement will be different for
virtually every individual government agency and, as a result,
the analysis required must be done by each agency on an
individual basis.
To put the Joint Agreement in context, it is important to
briefly review the history of this case as it pertains to Pool
Participants.
On December 6, 1994, the County of Orange filed two
separate bankruptcy cases: one for the County (In Re County of
Orange, Bankruptcy Case No. SA94-22272-JR) and one for an entity
of the County entitled The Orange County Investment Pools (In Re
Orange County Investment Pools, Bankruptcy Case No. SA94-22273-
JR). The filing of these two separate bankruptcy cases was
intended by the County to identify the separate assets and
interests of the Pools as opposed to the rights of general
creditors of the County of Orange. There may have also been a
political interest in attempting to distance the County of
Orange from the operations of the Treasurer's Office in
connection with the investment decisions leading up to the
$1.64 billion loss sustained by the Pool.
Shortly after the filing of the bankruptcy cases, the
County announced its intent to challenge the entitlement of Pool
Participants to recover their deposits in the Pool under the
provisions of California law intended to protect Pool
Participant deposits from invasion by a County under
circumstances mirroring those in this case. (California
Government Code§ 27100.1, and others.) Long term denial of
access by Pool Participants to their deposits in the Orange
County Investment Pools threatened the economic viability of a
substantial number of Pool Participants.
After the filing of the two bankruptcy cases, the United
States Trustee for the Central District of California, Marcy
Tiffany, formed a special committee to represent Pool depositors
in the Pool case. This committee consists of seven members:
Chairman, Stan Oftelie of the Orange County Transportation
Authority ("OCTA"); Andrew Czerny of the Orange County Water
District; Blake Anderson of the Orange County Sanitation
District; Paul Brady, City Manager of the City of Irvine
(representing a special subcommittee of Orange County cities);
John Nelson, Assistant Superintendent of the Orange County
Department of Education (representing a special subcommittee of
Orange County schools); Walter Kreutzen of the Transportation
Corridor Agencies; and Michael Martello, City Attorney of the
City of Mountain View (representing a special subcommittee of
20846332
December 27, 1995
Page 3
non-Orange County agencies). This committee became known as the
OCIP Committee.
The OCIP Committee began meeting almost daily in early
January and crafted, along with the County, an interim funding
mechanism to meet-the emergency needs of Pool Participants. The
intent of that facility was to provide the minimal funding
required to keep the constituent agencies of the OCIP
financially alive during the time necessary to resolve the
dispute between the OCIP Committee and the County regarding Pool
Participants' entitlement to their deposits in the investment
pools. That interim facility operated successfully through May
of 1995 and disbursed over $900,000,000. During that same
period of time, the Pool Committee conducted extensive financial
analysis and legal research on the issue of whether Pool
Participants could recover all their deposits from the Orange
County Investment Pools, leaving the County to bear the entire
$1.64 billion loss against their December 6, 1994 deposit
balance of approximately $2.3 billion.
There was support for that position, including the specific
intent of Government Code§ 27100.1, the reliance of Pool
Participants upon the County for investment policies and capital
protection, and the revelation of numerous financial
irregularities relating to Pool Participants' interests in the
Pools pre-bankruptcy (the skimming of interest, misallocation of
assets, and other similar activities). In other words, there
were good legal and equitable arguments for requiring the County
to sustain the loss in the Investment Pools from its own deposit
balance.
However, there was another side to the argument.
Notwithstanding the culpability of the County for the
intentional and unintentional losses in the Pools, certain
principles that apply generally in bankruptcy cases, though
never specifically applied to a case of this type, provided the
possibility for a different result.
These arguments, in brief, start with the general disfavor
trust interests are accorded in bankruptcy cases, because such
interests run contrary to general bankruptcy concepts of
equitable distribution to similar claimants. Additionally, the
legal foundation for the trust position asserted by Pool
Participants in this case was uniquely a matter of California
law. There was thus the potential for statutory interpretation,
and Tenth Amendment Constitutional issues, to be in controversy.
Specifically, it was unclear whether California was entitled to
structure a unique distribution priority for municipal entities
in bankruptcy inconsistent with general bankruptcy principles.
20846332
December 27, 1995
Page 4
In other words the issue presented a case of first
impression with billions of dollars, and the economic lives of
the Pool Participants, at stake, and good arguments on both
sides. 1 Moreover, a number of Pool Participants had municipal
financings coming due in June of 1995 for which a substantial
portion of their Pool deposits were required. Litigation of the
trust issue, even if successful at the trial court level, would
if appealed probably not produce an actual disbursement of funds
by the County within the timeframe necessary to meet the June 30
1 As most of you know, the issue of the trust status of the
Orange County Investment Pools was recently litigated in the
context of a Motion to Dismiss brought by Merrill, Lynch,
Pierce, Fenner & Smith in the case filed against it by the
County. Among other arguments, Merrill Lynch contended that,
under California Government Code§ 27100.1, the assets in the
Orange County Investment Pools belonged to Pool Participants,
not the County. Further, any losses sustained by the Pool would
be losses of the Pool Participants, not the County.
On December 1, 1995, Bankruptcy Judge John Ryan addressed
for the first time the critical trust issue in the context of
the Merrill Lynch motion. Judge Ryan denied the motion. In his
opinion, Judge Ryan specifically found that here where the trust
managed by the County is assumed to be insolvent, and where
deposits can not be definitively traced, the trust fails and the
Pool assets become assets of the County of Orange. Judge Ryan
concluded that the protection to Pool Participants under
Government Code§ 27100.1 failed because it was inconsistent
with the federal bankruptcy principle of equitable, uniform
distribution of assets in insolvent estates.
While it is unclear whether this decision would have been
the same had it been litigated earlier, and it is equally
unclear whether it will withstand appeal, at least on the face
of it a good argument can be made that had the OCIP Committee
elected to litigate the trust theory back in May of this year,
the court would have made the same findings, in which case the
County would have had access to the entire $5.3 billion proceeds
from the sale of the Pool securities. The County would then
have been entitled to distribute those proceeds to its unsecured
creditors, including all municipal noteholders, vendors and all
labor claimants, along with Pool Participants. Under those
circumstances, the recovery by Pool Participants would have been
much less than the $4.1 billion in cash recovered so far. The
County's "fresh start" may have occurred months ago at the cost
of the financial vitality of numerous Pool Participants.
20846332
December 27, 1995
Page 5
deadline for Pool Participants having municipal obligations
maturing at that time.
The Pool Committee crafted with the County a "settlement"
of its collective claims of entitlement to all Pool Participant
deposits under the trust theory in an agreement entitled the
"Comprehensive Settlement Agreement" ("CSA"). Under this
agreement, approximately 80% of non-school deposit balances and
90% of school deposit balances have been or should shortly be
released. The remaining account balances would be allowed in
full; however, there would be different repayment entitlements
on those balances. A portion of the remaining balance would be
entitled to general unsecured creditor treatment with a credit
enhancement from recoveries from third party litigation
("Settlement Secured Claims"), and another portion would be in a
subordinated position ("Repayment Claims"). This compensation
package was available to Pool Participants agreeing to assign
and collectivize their claims against third party defendants.
Most Pool Participants elected this option. Fourteen Pool
Participants, primarily non-Orange County entities, elected a
different package of compensation, retaining their third-party
litigation rights.
Approximately $4.1 billion dollars has been distributed to
Pool Participants to date in accordance with the CSA.
The County has since been unsuccessful in obtaining
taxpayer funding to refill the $1.64 billion dollar hole left by
the losses sustained by the Pool, and the amounts of deficit
hidden until the filing of the bankruptcy case. The County was
successful in obtaining the agreement of noteholders to the idea
of "rolling" their obligations from fiscal 1994-1995 into fiscal
1995-1996, a procedure which on its face appears to contradict
several government code statutes and Constitutional provisions.
The OCIP Committee raised these issues before the Bankruptcy
Court, without success, and those issues are now on appeal.
Since August of this year, the County has attempted to
craft a Plan of Adjustment which would allow it to emerge from
bankruptcy. For a number of reasons, including its diminished
credit rating and its inability to obtain any tax revenue from
its citizens, the County's plan for recovery inevitably turned
back to the revenues and assets of Pool Participants whose
financial condition and operations were more regularly
conducted, and whose economic health was more vital.
The initial assault by the County was across the board to
the interests of virtually all Pool Participants. Legislative
realities circumscribed the County's efforts. Ultimately, a
20846332
December 27, 1995
Page 6
legislative package was approved which, in essence, calls for
the State to divert a net amount of $15 million per year for
15 years from the Orange County Transportation Authority and
$12 million per year for 20 years from Harbors, Beaches and
Parks, the Flood Control District, and the County Development
Agency. These diverted funds will be pledged to finance the
issuance of new municipal debt, the proceeds of which will be
used to pay off the "rolled" municipal debt and other
obligations of the County.
While the legislative package is still violative of the
interests of some Pool Participants, and will have an impact on
transportation and on future infrastructure construction in
Orange County, it was considered the least destructive of the
various alternatives that were considered by the legislature.
However, this limited invasion of Pool Participants' assets was
crafted with certain expectations relating to the remaining
claims of Pool Participants. Namely, it was anticipated that
Pool Participants would be willing to relieve the County of
their remaining Pool-Related Claims (approximately $850 million)
and have those claims become recourse only against third party
litigation recoveries. Were this assumption not correct, the
County was prepared to argue that further invasions of Pool
Participants' assets and/or tax revenues would be required to
enable the County to pay all of its obligations under the Plan
of Adjustment. The next level of asset and/or tax diversion
would have been at the expense of cities and special districts,
and the representatives of those constituencies on the OCIP
Committee were insistent on avoiding that possibility.
The concept of making the remaining Pool Participant Pool-
Related Claims non-recourse to the County, but recourse against
third party litigation recoveries, is incorporated into the
Joint Agreement. In addition to the concepts described above,
other related issues, and nonrelated issues of importance to
specific Pool Participant constituencies, are also addressed in
the Joint Agreement.
Of particular concern to Orange County cities is the
treatment of, and access to, Pool Participant interests in
certain County Administered Accounts ("CAAs"). These are
accounts kept on the books and records of the County which hold
funds on behalf of Pool Participants, and sometimes the County,
for specific purposes. Under the CSA, the CAAs were deemed to
have suffered percentage losses in the Pools similar to the
losses deemed to have occurred to the deposit balances of
specific Pool Participant agencies. The remaining balances in
these County-administered accounts are, in many cases, owned in
part by Pool Participants. However, Pool Participants have not
20846332
December 27, 1995
Page 7
had access to these funds since the filing of the bankruptcy
case on December 6, 1994, and absent agreement with the County,
the County has no inclination to release these funds to Pool
Participants until the case is concluded, probably not earlier
than June of next year. In addition, certain CAAs have funds
which reflect unique interests of parties, like the Eminent
Domain account, and the treatment of these accounts in a manner
inconsistent with the treatment of other CAAs was also a matter
of great interest to the Committee. The Joint Agreement
requires the County to immediately distribute the cash balances
in numerous CAA's to Pool Participants, to the extent of their
undisputed claims against those accounts. It further provides a
mechanism for recovering the deficiencies in those accounts.
The Joint Agreement also announces, as part of the
financial limitations of the County of Orange, the
discontinuation of the Arterial Highway Funding Program ("AHFP")
by the County of Orange. This program, previously in existence
for over 40 years, provided disbursement of approximately
$3.5 million a year by the County of Orange to various Orange
County cities for the maintenance and improvement of certain
roads and highways. The program was administered by the Orange
County Transportation Authority. It is the intent of the County
to confirm with Pool Participants that the AHFP will be
discontinued. Pool Participants acknowledge in the Joint
Agreement the County's discontinuation of the program and agree
that the OCTA will not be obligated in the future to fund the
AHFP.
It was important to the OCIP Committee that third-party
litigation be conducted in an environment insulated from
political influences in County politics. The Committee has
agreed to accept Thomas w. Hayes as the representative entitled
to make all critical decisions relating to the litigation. The
Joint Agreement describes the scope of Mr. Hayes' authority and
relationship to the County and the Committee.
The Option B Pool Participants expressed concerns that the
Joint Agreement not be inadvertently construed in a manner
adverse to the claims they hold under the CSA. In response,
specific language has been added to confirm that there are no
third-party beneficiaries to the agreement, nor is the agreement
intended to adversely affect the interests of third parties,
including Option B Pool Participants.
The Joint Agreement establishes a priority schedule for
disbursement of third-party litigation proceeds. Of note to
Pool Participants is the fact that Orange County schools receive
a priority in excess of $50 million from the first distributions
20846332
December 27, 1995
Page 8
of litigation proceeds available for Pool Participants. This
priority was granted to schools in response to the Committee's
interests in re-establishing the financial stability of the
school system, and to respond to the interest of the State
legislature to bring the schools into compliance with funding
requirements necessary to prevent state intervention.
The Joint Agreement provides for the establishment of a
five-person monitoring committee to ensure that the Plan of
Adjustment conforms to the provisions of the Joint Agreement, so
that the parties executing the Joint Agreement without the
benefit of the information normally available in the Plan of
Adjustment and/or Disclosure Statement, will be protected from
inadvertent mistake, manipulation or surprise. The Committee is
comprised of two representatives of the County, two
representatives of the Pool Committee (one of which must be a
cities representative), and Mr. Hayes. This committee ceases
its function upon the confirmation of the County's Plan of
Adjustment.
There are a number of other important provisions in the
Joint Agreement which apply to the interests of various Pool
Participants, and a careful reading of the Agreement is
required.
On Monday, December 18, the OCIP Committee considered the
final draft of the Joint Agreement and approved the agreement
with its support for distribution to Pool Participants as soon
as possible. It is hoped that each Pool Participant entity will
give this matter its earliest and fullest consideration and will
act on it as promptly as possible.
As with the CSA, the financial and legal representatives of
the Committee are available to you to answer your questions in
connection with your deliberations.
This Joint Agreement constitutes the next major step in the
case on behalf of Pool Participants. It has been closely
considered by the Committee and its professionals. While it is
not a completely attractive approach in that it does not assure
payment of the remaining claims of Pool Participants, it does
have some benefits which you might want to consider as part of
your deliberations, including the following:
1. The County undertakes not to seek any further
diversion of Pool Participants' assets or tax revenues in
connection with this case. This is of particular interest to
Orange County cities and special districts;
20846332
December 27, 1995
Page 9
2. With respect to entities having interests in CAAs,
those parties signing the Joint Agreement will have immediate
access to their account balances, while those not signing the
Joint Agreement may not have immediate access to those balances;
3. With respect to schools, there is a distribution
priority from litigation proceeds in excess of $50 million;
4. With respect to all Pool Participants, those signing
the Joint Agreement will avoid the possible appointment of a
State Trustee,2 and will receive the priority of distribution
of litigation proceeds set forth in the Agreement.
These considerations are benefits to which Pool
Participants would not be automatically entitled under a Plan of
Adjustment, or otherwise.
Ultimately, each entity needs to be prepared to weigh the
prospect of losing recourse status for its allowed claims
against the County in return for a different percentage of
litigation proceeds. This is a difficult analysis because it is
impossible at this point to know what the actual value of Pool
Participants' remaining claims are against the County, because
we do not know the County's capacity to make payment on those
claims.
Likewise, it is impossible at this stage of the litigation
to be able to value the Merrill Lynch, or recently filed Peat
Marwick, litigation. Those litigations could prove to be very
valuable. On the other hand, they could be defeated in their
entirety by technical defenses which have yet to be surfaced.
What can be said is that, as of this date, the County's
Second Amended Complaint has survived a motion to dismiss by
Merrill Lynch, and the comments of the Judge at the hearing on
the motion to dismiss were such that it does not appear that the
Complaint, or its principal component parts, are subject to
immediate dismissal on technical grounds. No responsive
pleadings have yet been filed in the Peat Marwick litigation.
There is likely to be other litigations filed by the County
against brokers and professionals relating to pre-bankruptcy
actions.
2 Under the recovery legislation enacted in October of this
year, a State Trustee could, under certain conditions, be
appointed by the Governor for the County and for any Pool
Participant to facilitate the Plan of Adjustment.
20846332
December 27, 1995
Page 10
The Orange County bankruptcy case is moving into its final
stage with the submission and confirmation of a Plan of
Adjustment. The County filed its Plan of Adjustment on
Thursday, December 21. The bankruptcy court extended the time
for the County to file its Disclosure Statement, which is the
narrative description of the Plan of Adjustment with related
projections and financial material, until January 19, 1996. It
is the intent of the County to obtain confirmation of the Plan
of Adjustment by May of 1996.
If the Joint Agreement is approved by overwhelming numbers
of Option A Pool Participants, and the Plan of Adjustment is
confirmed incorporating the material elements of the Joint
Agreement, the County will likely emerge from this bankruptcy
case by the summer of 1996. Thereafter, third party litigation
will be prosecuted by the Representative on behalf of the County
and Pool Participants.
This case continues to be a monumental effort on the part
of the OCIP Committee. The members of the Committee have placed
the collective interests of the community above their own, and
have established a disciplined and successful course and
direction for Pool Participants as a united constituency. This
Joint Agreement is being presented to you as the next step in
the bankruptcy process and it has been approved unanimously by
the OCIP Committee.
If you have any questions, or would like to have a further
presentation by the financial or legal professionals of the
Committee, please telephone me as soon as possible. If your
municipal entity supports the Joint Agreement, an appropriately
executed signature page must be returned to Price Waterhouse
LLP, attention Bernar Burke, 575 Anton Boulevard, Suite 1100,
Costa Mesa, CA 92626.
Thank you for your continued courtesies and support in this
case.
Very sincerely,
\. Patrick--C-. Shea
PCS/wpc
cc: Official Committee of Pool Participants and Counsel
20846332
..
EXECUTIVE SUMMARY
of
JOINT AGREEMENT OF THE COUNTY OF ORANGE,
THE OFFICIAL INVESTMENT POOL PARTICIPANTS' COMMITTEE,
AND EACH OPTION A POOL PARTICIPANT
FOR RESOLUTION OF CLAIMS AGAINST THE COUNTY OF ORANGE
(THE "JOINT AGREEMENT")
THIS EXECUTIVE SUMMARY IS BEING PROVIDED TO YOU FOR
YOUR CONVENIENCE ONLY, AND IS NOT INTENDED TO BE, AND
SHOULD NOT BE, RELIED UPON BY YOU IN DETERMINING
WHETHER TO ENTER INTO THE JOINT AGREEMENT. YOU SHOULD
CAREFULLY REVIEW THE JOINT AGREEMENT IN ITS ENTIRETY
WITH YOUR COUNSEL AND OTHER PROFESSIONALS. THIS
EXECUTIVE SUMMARY IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE JOINT AGREEMENT. IN THE EVENT OF ANY
INCONSISTENCY BETWEEN THE JOINT AGREEMENT AND THIS
EXECUTIVE SUMMARY, THE TERMS OF THE JOINT AGREEMENT
SHALL CONTROL.
THE JOINT AGREEMENT WILL AFFECT THE RIGHTS OF ALL
OPTION A POOL PARTICIPANTS WHO SIGN THE JOINT AGREEMENT
AS THOSE RIGHTS CURRENTLY EXIST UNDER THE COMPREHENSIVE
SETTLEMENT AGREEMENT RE ORANGE COUNTY INVESTMENT POOLS
(THE "CSA"). IN MANY CASES, THAT EFFECT MAY BE
ADVERSE.
INTRODUCTION
In response to the voters' def eat of the Measure R
Sales Tax proposal, the County of Orange (the "County") has
engaged in the process of developing an alternative recovery plan
which relies, in part, upon the diversion of future tax revenues
from other local governmental entities within the County.
Included among those from which the County sought reappropriation
by the California State Legislature was the Orange County
Transportation Authority (the "OCTA"). In order to limit the
County's access to the assets and revenues of special districts
and cities, most of which suffered substantial losses as a result
of the collapse of the orange county Investment Pools, the Orange
County Investment Pool Parti cipants Committee (the "Pool
Committee") has negotiated the terms of the accompanying Joint
Agreement.
Of particular note to Option A Pool Participants is
Paragraph 12 of the Joint Agreement in which the County agrees,
G\Z006663F.NAF
122195 -1-
except for the recovery legislation that was passed in September
of 1995:
"not to request of the Legislature, nor otherwise
support if requested or approved by any entity other
than the County, the diversion of revenue allocated to
the undersigned Option A Pool Participant for the
purpose of financing the repayment of claims in the
County's debt adjustment case or the payment of claims
under the County's Plan of Adjustment."
This provision is intended to make it politically difficult for
the County to seek, and to provide substantial moral suasion
against the County seeking, further diversions of revenues from
other local governmental entities within the County. However, this
provision does not seek to preclude the County from seeking such
reappropriations in response to natural disasters or other cir-
cumstances beyond the payment of claims against the County in
connection with its bankruptcy proceeding.
The Joint Agreement may, in some cases, improve the
status of the remaining outstanding claims of an Option A Pool
Participant which signs the Joint Agreement ( a "Participating
Option A Pool Participant"); and, in other cases, it may worsen
it. Each Option A Pool Participant should consider carefully the
impact of the Joint Agreement upon its rights under the CSA and
applicable law and the potential benefits to be derived by such
Pool Participant from the provisions of the Joint Agreement.
CONSENSUS LEGISLATION
In accordance with the Joint Agreement, the California
State Legislature passed on September 15, 1995, and Governor
Wilson subsequently signed into law, several bills which will,
upon becoming effective:
1. Reallocate to the County $38 million of
sales tax revenue currently allocated to the OCTA or
the Orange County Transit District for a period of 15
years beginning July 1, 1996;
2. Reallocate to the OCTA $23 million of
the county's yearly apportionment of Motor Vehicle Fuel
Taxes for a 16 year period beginning July 1, 1997;
3. Reallocate to the County $4 million of
property taxes per year for a period of 20 years (plus
G\Z006663F.NAF
122195 -2-
)
increments in such taxes in (a) and (b) below)
beginning July 1, 1996 from each of:
(a) the County Harbors, Beaches and
Parks Fund;
(b) the County Flood Control Fund; and
(c) the County Development Agency.
The effect of this legislation will be to divert $15 million per
year for 15 years (a total of $225 million) from the OCTA to the
County, along with $12 million per year for 20 years ($240
million in total) from County-controlled agencies to the county
to fund the issuance of new municipal debt. The proceeds of the
new debt issue will be used to pay off the County's pre-
bankruptcy note holders and certain other creditors.
Such legislation is to take effect only if a Plan of
Adjustment for the County consistent with the Joint Agreement is
confirmed in the County's bankruptcy or upon the appointment of
a trustee for the County by the Governor as described in the last
paragraph of this Executive Summary. Under the recovery legis-
lation, all revenues received by the County pursuant to such
legislation must be used for the performance of the County's
obligations under its Plan of Adjustment. If any of the diver-
sions from Flood Control, Harbors, Beaches and Parks, or the
Redevelopment Agency are successfully challenged, the County is
required to make up the shortfall from the County general
account.
TERMS OF THE PLAN OF ADJUSTMENT
The Joint Agreement requires the County to prepare and
file as soon as possible, and by no later than January 1, 1996,
a Plan of Adjustment which contains, in substance, the terms and
conditions specified in the Joint Agreement. Under the Joint
Agreement, participating Option A Pool Participants waive all
rights to object to, and agree to accept, any county Plan of
Adjustment which contains provisions incorporating the material
terms in the Joint Agreement. Importantly, under the Joint
Agreement, the County's Plan may provide for payment in full of
the allowed claims of all County vendors, employees and short
term note debt. It also permits the County to restore up to $15
million in reserve for County Certificates of Participation which
have previously been depleted.
Under the CSA, Settlement Secured Claims are "allowed
general unsecured claims against the County." Repayment Claims
G\Z006663F.NAF
122195 -3-
are defined under the CSA as "allowed .•• claims" against the
County as well, but the holder of a Repayment Claim
"shall not be entitled to receive • • . any payment
. . . from the County • . . [ other than from the
proceeds of the litigation of Pool-Related Claims (as
defined in the CSA) against third parties] until after
the payment in full of all Senior Claims against the
County and the payment in full of all interest on such
Senior Claims which accrues or matures after the County
Petition Date. • 11
The "Senior Claims" to which Repayment Claims are subordinated
under the CSA include the vendor and employee claims and the
short term notes which may be paid in full under the County's
Plan pursuant to the Joint Agreement, the $275 million in
Recovery Bonds issued by the County, the proceeds of which were
paid to Option A Pool Participants in June of this year, and
Option A Pool Participants' Settlement Secured Claims. Under the
CSA, the County may also restore a portion of the losses suffered
by county Administered Accounts in advance of making any payment
on Repayment Claims other than from the proceeds of the Pool-
Related Claim litigation.
Under the Joint Agreement, both settlement Secured
Claims and Repayment Claims would become non-recourse claims.
This means that they would no longer be debts for which the
County would be responsible. Rather, holders of Settlement
Secured Claims and Repayment Claims could look only to the
proceeds of third-party litigation of Pool-Related Claims and to
the $50 million litigation fund to be set up under the Joint
Agreement to prosecute those claims.
A five member Orange County Recovery Committee ( 11 OCRA 11 )
is to be appointed to evaluate the County's Plan of Adjustment
for consistency with the Joint Agreement and the CSA. Its
members will be Mr. Hayes, two individuals appointed by the
County and two individuals appointed by the Pool Committee, one
of whom is to be a city representative. The OCRA would be
disbanded once the County's Plan of Adjustment is confirmed.
POOL-RELATED CLAIMS LITIGATION
The County's Plan must also provide for the appointment
of a Representative under Section 1123 (b) (3) (B) of the Bankruptcy
Code to "enforce, prosecute and collect upon" all of the County's
and Option A Pool Participants' Pool-Related Claims against the
brokerage houses, banks and professionals which are, at least in
part, responsible for the losses in the Orange County Investment
Pools. The Representative is required to keep the Pool Committee
and its counsel informed concerning the progress of such litiga-
G\Z006663F.NAF
122195 -4-
tion, including in the manner specified in Exhibit 6 to the CSA.
However, the Representative would have
"the sole and absolute discretion in all matters
concerning the prosecution, collection, settlement and
compromise of Pool-Related Claims subject only to such
jurisdiction as may be retained by the Bankruptcy Court
pursuant to the Plan of Adjustment."
Under the Joint Agreement, the Representative also has "sole and
absolute discretion" in determining what portions of the net
proceeds from the litigation of such claims are to be distributed
and when, although the legislation recently passed by the
California State Legislature requires that all interest earned
on the Litigation Fund be distributed annually. The
Representative will initially be Mr. Tom Hayes.
DISTRIBUTION OF LITIGATION PROCEEDS
Under the CSA net proceeds from Pool-Related Claims
litigation are to be distributed approximately 62% (rather than
65% had all Pool Participants elected Option A under the CSA) to
the holders of Settlement Secured Claims and approximately 38%
to the County until all Settlement Secured Claims are paid in
full (a total of $525,457,359). Then, approximately 62% of the
net proceeds of such litigation are to be distributed to the
holders of Repayment Claims and approximately 38% to the County
until the Repayment Claims are paid in full (a total of an addi-
tional approximately $798,367,684). Thereafter, the County is
entitled to retain all of the net proceeds of such litigation
until it has received at least $236.7 million.
Under the Joint Agreement, the first $54.7 million in
the net proceeds of such litigation would be paid to satisfy
Repayment Claims held by the Option A Pool Participants listed
on Exhibit 1 to the CSA (the "Schools"). The next $325 million
of the net proceeds of such Pool-Related Claim litigation would
be paid to the holders of Settlement Secured Claims to repay
those claims in full. This means that holders of settlement
Secured Claims would fare worse under the Joint Agreement until
approximately $144 million in net litigation proceeds have been
collected; then they would fare better until the Settlement
Secured Claims are paid in full.
After all Settlement Secured Claims are paid in full,
the next $202. 8 million of net litigation proceeds would be
distributed solely to the County, $22 million of which may be
used by the county solely to settle the claims of the Option B
Pool Participants. Thereafter, the next $713 million in net
litigation proceeds would be distributed 61. 59% to the holders
of Repayment Claims and approximately 38. 41% to the County.
G\Z006663F.NAF
122195 -5-
Accordingly, under the Joint Agreement, holders of Repayment
Claims, other than the Schools, would be in a worse position than
they would be under the CSA until such claims are .paid in full.
After $1. 295. 5 billion in net litigation proceeds has been
collected, in order to restore a portion of the funds diverted
from the OCTA under the recovery legislation described above, the
OCTA would receive approximately 43% of the next $525 million in
net litigation proceeds and the County would retain the balance.
Thereafter, net litigation proceeds would be split between
Option A Pool Participants and the County 61.59%/38.41%.
Under the Joint Agreement any portion of the $50
million Litigation Fund which is not used in pursuing Pool-
Related Claims would also be available for distribution in
accordance with the scheme described above. No such fund is
established under the CSA.
Lastly, the Joint Agreement requires the County to
apply the first net litigation proceeds it receives under the
scheme described above to repay the claims of Option A Pool
Participants against certain enumerated County Administered
Accounts which the Pool Committee and the County have identified
as containing the funds of some Option A Pool Participants. No
such provision exists under the CSA.
TREATMENT OF CLAIMS AGAINST COUNTY ADMINISTERED ACCOUNTS
Promptly after execution and Bankruptcy Court approval
of the Joint Agreement, the County is required to distribute to
those Option A Pool Participants that sign the Joint Agreement,
to the extent they are lawfully entitled to such amounts under
applicable non-bankruptcy law and to the extent of any portion
of a claim therefor is not being disputed by the County, all
amounts which remain, after allocation of the Orange County
Investment Pool losses, and including both pre-and post-
petition interest earned on the cash balances therein, in 54
specified County Administered Accounts and such other accounts
as the Pool Committee and the County may jointly agree. In
return, Participating Option A Pool Participants agree not to
object to any other distributions from such accounts to those who
are legally entitled to those distributions. Under Paragraph
B(i) of the Joint Agreement, the County's Plan of Adjustment must
provide that
"all claims based upon ... deficiencies
Administered Accounts resulting from .
in County
losses in
. held by the
as such claims
the Orange County Investment Pools ..
County will receive the same treatment"
held by Option A Pool Participants.
G\Z006663F.NAF
122195 -6-
However, under the Joint Agreement, the Plan may provide for the
payment of such claims to Option A Pool Participants over a
period of 20 years without interest. The Joint Agreement calls
for all Participating Option A Pool Participants to also waive
any post-petition, post-confirmation and post-effective date
interest on their claims for recovery of the deficits in the
County Administered Accounts.
The County also waives its rights to interest on the
deficits in all County Administered Accounts and agrees that the
$13.4 million County Administered Account deficit claims of the
Schools with respect to 19 unapportioned tax accounts maintained
by the County shall be paid before the county's own claims.
Participating Non-School Option A Pool Participants would agree
to a similar time of payment priority for the schools.
MISCELLANEOUS CONTRACTUAL PROVISIONS
Participating Option A Pool Participants and the Pool
Committee agree to suspend and, upon Bankruptcy court approval
of the County's Plan of Adjustment, to dismiss with prejudice all
appeals they have pending relating to the Bankruptcy Court's
Order of June 27, 1995 approving the County's compromise with its
short term note holders regarding the validity of their note debt
and approving the roll-over of that debt to June 30, 1996. It
is a condition to the effectiveness of the Joint Agreement, which
the County has the sole ability to waive, that the Orange County
Cities Subcommittee separately agree to do so as well.
The Joint Agreement also confirms the discontinuation
of the County's Arterial Highway Financing Program (the "AHFP").
Under that program the County provided funding of over $3 million
per year, administered by the OCTA, for distribution to Orange
county cities for the repair and improvement of roads and high-
ways throughout the County. The parties to the Joint Agreement
specifically agree that the AHFP will not be funded in the future
by either the County or the OCTA.
There are also provisions in the Joint Agreement for
the accounts of the Schools Subcommittee and the Orange County
Cities Subcommittee in the Professional Fee Reserve established
under the CSA to be replenished with a portion the Withheld
Proceeds ($2 million and $1.2 million, respectively) which would
otherwise be distributed under the CSA to Schools and Option A
orange county Cities.
The Joint Agreement would become effective only if:
a. signed by all Option A Pool Participants
(a condition which the County can waive); and
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b. the Joint Agreement is approved by the
Bankruptcy Court.
TREATMENT OF POOL PARTICIPANTS WHO DO NOT SIGN JOINT AGREEMENT
Paragraph 20 of the Joint Agreement provides that there
are to be no third party beneficiaries of the Joint Agreement and
that the Joint Agreement is not intended to waive any claims
against or adversely affect the rights of any person or entity
which is not a party to the agreement. Other than that, the
Joint Agreement is silent as to the effect of the agreement upon
Option A Pool Participants which choose not to sign it or upon
Option B Pool Participants (which are not being asked to sign the
agreement). This means that Option A Pool Participants holding
Settlement Secured Claims would not benefit from the County's
agreement to permit net proceeds from Pool-Related Claims
litigation to be applied first to such claims, nor would such
Pool Participants' Settlement Secured or Repayment Claims be
voluntarily made non-recourse or subordinated other than as
provided now in the CSA.
However, the bills passed by the state Legislature
include a mechanism for the appointment of a trustee by the
Governor if the County fails to file a Plan of Adjustment con-
sistent with the Joint Agreement by January 1, 1996 or if the
Governor determines that as of May 1, 1996 or at any time there-
after the County, the Committee of Unsecured Creditors and the
Pool Committee "have failed to reach substantial agreement on the
terms of a plan of adjustment and the timely confirmation of the
plan appears unlikely." The trustee would have not only all of
the powers of the Board of Supervisors, but also, "solely to the
extent necessary to prevent denial of confirmation of the plan
of adjustment . . . " the following powers, among others, of Non-
County Pool Participants which are governmental entities:
a. to vote to accept or reject the Plan of
Adjustment; and
b. to subordinate or otherwise restructure
Pool Participants' claims against the County which are
based upon investment losses in the Pools.
In other words, if a trustee is appointed for the County, that
trustee could, but would not be required to, agree to the treat-
ment of a Pool Participant's claims against the County in the
manner specified in the Joint Agreement or in a manner which is
better or worse than that specified in the Joint Agreement. The
only constraint upon the trustee in exercising such powers on
behalf of Pool Participants is that he "not act in a manner
inconsistent with the fair treatment of any [such Pool
Participants)."
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122195 -8-
(12)
Upcoming Meetings
Fonnat
•Written Report
•Overheads
•Slides
•Flip Charts
(12):
Summary
Anticipated Time __ _
FIN ANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JANUARY 10, 1996
Consideration of upcoming meetings and items to be discussed at
those meetings.
The calendar of future meetings is on the back of the Notice of Meeting each month. The next Finance,
Administration and Human Resources Committee meeting is scheduled for Wednesday, February 14,
1996. .
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 only once
at the start of a process.
Review of Legal Service Options and Ad Hoc Committee Report
Review Responses to F.I.S. RFP Process
Revised Employee Handbook
Quarterly Training Program Update
Hardware Maintenance Contract for Personal Computers
Help Desk Services Contract for Personal Computers
Review Commercial Bank Selection
Quarterly Communication Program Update
Quarterly Investment Program Report by PIMCO
Fiscal Policy Assumptions for 1996-97 Budget
Quarterly JO and CORF Budget Review for 12/31/95
Initiate Long-term Financial Plan Review
Staff Recommendation
Information only item.
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\COVERS.96\CALEN1 .96