HomeMy WebLinkAbout1996-03-1311 .•.
In the OffCt ~. S~r~ta~ County Sanitallon Districi(s -,~/
No(s) 1,va,, ?l, >;0 ?, l~~-f/7
MAR271996 DRAFT
County Sanitation Districts
of Orange County, California
P.O. Box 8127 • 10844 Ellis Avenue
Fountain Valley, CA 92728-8127
Telephone: (714) 962-2411
Bv P£ I I MINUTES OF FINANCE,
ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
Wednesday. March 13. 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
March 13, 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
John C. Cox, Jr., Joint Chair
Jan Debay
James Flora
John M. Gullixson
Wally Lynn
Roger R. Stanton, Vice Chair
William G. Steiner
Peer Swan
Committee Directors Absent:
Burnie Dunlap
Thomas Saltarelli
Staff Present:
Donald F. Mcintyre, General Manager
Blake P. Anderson, Assistant General Manager
Judith A. Wilson, Assistant General Manager
Steve Hovey, Director of Information Technology
Mike Peterman, Acting Director of Human Resources
Gary Streed, Director of Finance
Michelle Tuchman, Director of Communications
Nancy Wheatley, Director of Technical Services
Michael D. White, Controller
Steve Kozak, Financial Manager
Linda Eisman, Training Manager
Terri Josway, Safety & Emergency Response Mgr.
Lenora Crane, Committee Secretary
Others Present:
Tom Woodruff, General Counsel
Howard Slavin, Attorney
(2) APPOINTMENT OF A CHAIRMAN PRO TEM
No appointment was necessary.
(3) PUBLIC COMMENTS
No comments were made.
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Minutes of Finance, Adn ! and Human Resources Committe_
Page2
March 13, 1996
(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
The Committee Chair had no report.
(b) Report of the General Manager
The General Manager informed the Committee that Gary Hasenstab has
terminated, and Mike Peterman has been appointed as Acting Director of Human
Resources.
(c) Report of Assistant General Manager -Operations
The Assistant General Manager of Operations indicated he would have a verbal
report later in the meeting when the landfill item is addressed.
Report of Assistant General Manager -Administration
The Assistant General Manager of Administration had no report.
(d) Report of the Director of Finance/Treasurer
Finance Director/Treasurer Gary Streed updated the Committee on the status of
the Districts' Certificates of Participation (COPs). Mr. Streed advised that the
variable rates have declined since the staff report was mailed; dropping below 3%
to 2.60% and 2.75%.
Mr. Streed also informed the Committee that staff will be receiving RFPs on the
Financial Information System on Tuesday and will report back to the Committee
with the results at the next meeting.
(e) Report of the Director of Human Resources
The Acting 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 indicated he would present a report during the closed session.
_., ~
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Minutes of Finance, Admin. and Human Resources Committee
Page 3
March 13, 1996
(5) APPROVAL OF MINUTES
It was moved, seconded and duly carried to approve the draft minutes of the
February 14, 1996, meeting of the Finance, Administration and Human Resources
Committee.
(6) OLD BUSINESS
FAHR96-04 Consideration of motion to approve Resolution No. 96-. extending
benefit coverage for regular employees working a reduced work
week.
This item was sent back to Committee from the Joint Boards' February 28, 1996
meeting. Mr. Peterman restated staffs recommendation to: "Provide part-time
employees with entitlement to employee benefits prorated on the basis of 75% if the
employee works on average between 30 and 40 hours per week; and 50% 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 MOUs, health plan Summary Plan Documents, and other
administrative policy and procedure manuals as necessary."
Mr. Peterman handed out a revised attachment which illustrated "Cost of Part-time
Benefits and Areas of Savings by Offering Part-time Benefits," and responded to the
Committee's questions. The benefit factor is 26%, not 24% as indicated on the original
attachment.
General Counsel Tom Woodruff clarified the legalities of establishing a benefit program
for part-time employees, and explained the difference between a contract with an
independent contractor and a personal services contract with a regular employee
working a reduced work week.
After several motions and amendments to the motions, it was moved, seconded and
unanimously approved to give staff the discretion, on a case-by-case basis, to approve
the staff recommendation on a prorated basis through the use of personal services
contracts.
FAHR96-15 Consideration of motion to review. approve and file the Mid-Year
Report prepared by staff for the period ending December 31, 1996.
Mike White, Controller, stated that last month staff presented to the Committee the
Districts' first comprehensive Mid-Year Report for the period ending December 31, 1995.
Because of time constraints, the Committee asked that the report be resubmitted at the
March meeting. The full report was presented to the Joint Boards on February 28, 1996.
Starting with a brief review, Mr. White stated the report consolidates both the financial
and operational accomplishments of the Districts at the midpoint of the 1995-96 fiscal
year. Mr. White reviewed the major categories of the report and answered questions
from the Committee. Vice Joint Chair Peer Swan asked that future reports include side-
by-side line item expense comparisons by quarter.
I Minutes of Finance, Admin. and Human Resources Committee
Page4
March 13, 1996
After discussion, it was moved, seconded and duly carried to approve and file the
1995-96 Mid-Year Report.
(7) NEW BUSINESS
FAHR96-19 Consideration of motions to receive and file staff report regarding
review of Districts' risk management and insurance activities;
direct staff to solicit formal proposals for general liability insurance
through Robert F. Driver Associates and from the Special Districts
Risk Management Authority CSDRMAl and the California Sanitation
Risk Management Authority (CSRMAl: evaluate the proposals and
return to the FAHR Committee with recommendations for a general
liability insurance program as part of the FY 1996-97 budget; direct
staff to prepare a Risk Management Work Plan for FY 1996-97, and
keep the Committee informed with periodic progress reports.
Steve Kozak, Financial Manager, gave an overview of the Districts' risk management .
insurance program, practices and activities. He reported on current industry benchmarks
and made specific recommendations for short-term improvements and a proposed work
plan to guide future review and monitoring of the program.
It was requested that staff look into Stop-Loss coverage in the $250,000 to $500,000
range.
After discussion, it was moved, seconded and duly carried to approve staffs
recommendation.
FAHR96-20 Consideration of motion to receive and file staff report regarding
preparation for possible financing of Solid Waste Management
System Acquisition: and to direct staff to develop and circulate
Request for Proposals to assemble a solid waste financing team so
that, if needed, the Districts is ready to proceed immediately.
In preparation of the potential landfill acquisition, a team to develop the capital financing
program is required which would consist of a Financial Advisor, Underwriter(s), Bond
Counsel and Solid Waste Engineer. The formation of the financing team is contingent on
the County's consideration of the MOU. If the County responds favorably to the MOU
and its terms, then a 60-day closing period will be entered into to finalize the deal,
otherwise the process will end.
Assistant General Manager of Operations Blake Anderson updated the Committee on
developments concerning the landfill acquisition and his presentations to cities, their staff
and their counsels.
Blake and his team attended a meeting of the County Board of Supervisors on March 12,
1996. The Supervisors discussed the issue of tipping fees and voted 5-0 to lower tipping
fees from $35 per ton to $27 per ton. Blake indicated that after considerable discussion,
he made a presentation regarding the Districts' proposal. The Supervisors then went
I
Minutes of Finance, Adm1n. and Human Resources Committee
Page 5
March 13, 1996
into Executive Session and referred the matter back to County staff requesting the item
be brought back on March 19 with their recommendations. No vote was made on the
Districts' offer, since this was a general discussion, however, it was clear during the
discussion that three Supervisors did not like the Districts' offer, indicating it was not
generous enough.
Directors Steiner and Stanton both commended Blake Anderson and his staff for the
excellent due diligence they put forth regarding the acquisition. Joint Chair John Cox
advised that there will be a Landfill Ad Hoc Committee meeting on March 29, 1996, and
a formal recommendation will be made at that time regarding whether to proceed with
pursuing the landfill acquisition.
After several motions and amendments to the motions, it was moved, seconded, and
duly carried with 5 ayes, 3 nays, and 1 abstention to: Authorize staff to prepare RFPs
and form a financing team to stand ready to go forward, if needed, to finance the landfill
acquisition.
FAHR96-21 Consideration of motion to receive and file Treasurer's Report for
the month of January 1996.
The month ended January 1996 Performance Monitoring Reports for Liquid and Long-
term Operating Monies indicated that total investments amount to $363,038,032. All
Investment Policy requirements are being complied with and performance to date
exceeds the index rates.
It was moved, seconded and duly carried to approve and forward this report to the Joint
Boards.
FAHR96-22 Staff Summary Report on the organization of the Communications
Division. the results of the Internal Communications Audit and an
overview of new and/or expanded programs to reach both internal
and external audiences.
Michelle Tuchman, Communications Director, gave a slide presentation and reported on
the organization of the Communications Division, how the division is structured, the
services the division provides and the efforts underway to reach both internal and
external audiences. Michelle reviewed an Internal Communications Audit made of 260
Districts employees and its results. Another audit will be conducted in one year.
It was moved, seconded and duly carried to receive and file this report.
(8) CLOSED SESSION
The Chair reported the need for a closed session as authorized by Government Code
Section 54956.9(a) to discuss and consider the item that is specified as Item (8)(b) on
the published Agenda.
The Committee convened in closed session at 7:07 p.m. pursuant to Government Code
Section 54956.9(a). Confidential Minutes of the Closed Session held by the Committee
have been prepared in accordance with California Government Code Section 54957.2
and are maintained by the Board Secretary in the Official Book of Confidential Minutes of
Board and Committee Closed Meetings.
-~ .. ,
Minutes of Finance, Adm111. and Human Resources Committee
Page 6
March 13, 1996
(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, April 10, 1996.
(14) ADJOURNMENT
The meeting was adjourned at 8:00 p.m.
~~~
Finance, Administration and Human
Resources Committee Secretary
J:\WPDOC\FIN\CRANE\FPC.MTG\FAH R.96\1996.MI N\MF AH R3.96
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 March 13, 1996, was duly posted for public inspection in the main lobby of the
Districts' offices on March 7, 1996.
IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of March, 1996.
Posted: fX.Jl-Le-JL,..
By:
_;}he , I ./(/(/
of the Boards of Directors of County
, 5, 6, 7, 11, 13 & 14 of Orange
1 , 1996, ~ ,' tJ-0 AM§
~U __ /
J:IWPOOC\FINICRANE\FPC.MTGIFAHR.96\CERT.POS\CERTP03.96
March 7, 1996
DISTRIBUTION
FAHR COMMITTEE MEETING PACKAGE
COMPLETE PACKAGES 45
Full Packages
Committee 11
Press 1
Tom Woodruff 1
Terry Andrus 1
Donald F. Mcintyre 1
Blake P. Anderson 1
Judith A. Wilson 1
Corina Chaudhry 1
Greg Mathews 1
Gary Hasenstab 1
Patty Steeves 1
Mike Peterman 1
Linda Eisman 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
Cymantha Atkinson 1
Mike White 1
Brad Cagel 1
Michelle Tuchman 1
Pat McNelly 1
Dan Tunnicliff (Bldg. 6) 1
Gail Cain 1
Extras 5
Notice.& Agenda Only: (13)
Posting 1
Jean Tappan (INCLUDE M1Ns.) 1
Angela Holden 1
Clarice Marcin 1
Frankie Woodside 1
Patty Steeves 1
Carolyn Snyder 1
Fawn Elizondo 1
Guard Shack (Mark Esquer) 1
Extras 3
Treasurer's Report: Ron Zenk, Dist. 14
phone:
[714} 962-2411
111alrrng address:
P.O. Box 8127
Fountain Valley, CA
82728-81 27
street addreas:
10044 Ellis Avenue
Fount.sin Valley, CA
B2706-701B
Member
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Orange
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~, ":
COUNTY SJ-\1~ITATION DISTRICTS OF 0RAl\JGE COUNTY, CALIFORNIA
March 6, 1996
NOTICE OF MEETING
FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
COUNTY SANITATION DISTRICTS
NOS.1, 2, 3, 5, 6, 7, 11, 13AND 14
OF ORANGE COUNTY, CALIFORNIA
WEDNESDAY. MARCH 13, 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
March 6, 1996
FINANCE.ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
TENTATIVELY SCHEDULED
MEETING DATES
Finance, Administration
and Human Resources
Committee Meetings Joint Board Meetings
March March 13, 1996 March 27, 1996
April April 10, 1996 April 24, 1996
May May 8, 1996 May 22, 1996
June June 12, 1996 June 26, 1996
July July 10, 1996 July 24, 1996
August None Scheduled August28, 1996
September September 11, 1996 September 25, 1996
October October 9, 1996 October 23, 1996
November None Scheduled November 20, 1996
December None Scheduled December 18, 1996
January January 8, 1997 January 22, 1997
CSDOC D P.O. Box 8127 D Fountain Valley, CA 92728-8127 D Tel. (714) 962-2411 D FAX (714) 962-3954
. I
March 13, 1996
AGENDA
FINANCE. ADMINISTRATION ANl'D HUMAN RESOURCES COMMIIT-EE
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:. MARC.fl 13. 1996 -5:30 P.M.
r···'·--·--·-· .... ····--·····-·----·--"'·--·····--·-·-·--·······-······-····················-···············-···~·-····-·-·---··········-~-·--··"'·-----; ..........•••........••..
.
!. 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.
i ~',;======·:· 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.
~ ••.••• ., ...... ,. .. ,. .................... -• .,l-.................................. , ............. ~ .. , .... '"' .. -•• ~"'l-·· .. -·~'!'·•--·-·-··-···"1·····--··i•f'•••,"-'-"-"''"'".J'·····.,. .......... ~ •• ; ......... ~ .... "l .......... e •• ,., ......... .., •• ~ ••.• 1!'.,:
(1) Roll Call
(2) Appointment of Chairman pro tern, if necessary.
(3) PUbJie 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).
March 13, 1996
( 4) The Committee Chairman, General Manager, Assistant General Manager( s ),
Director of FinancefTreasurer, 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) Report of Director of FinancefTreasurer
(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 February 14, 1996.
(6) Old Business.
FAl"IR96-04 Consideration of Resolution No._, extending benefit coverage to
regular employees working a reduced work week.
(Mike Peterman)
FAHR96-15 Review of the Mid-Year Financial & Operational Report for the
period ending December 31,1995. (Mike White)
(7) New Busihess.
EAHR96-19 Consideration of motions to receive and file staff report regarding
review of Districts' risk management and insurance activities;
direct staff to solicit formal proposals for general liability insurance
through Robert F. Driver Associates and from SDRMA and
CSRMA; evaluate the proposals and return to the FAHR
Committee with recommendations for a general liability insurance
program as part of the FY 1996-97 budget; direct staff to prepare a
Risk Management Work.Plan for FY 1996-97, and keep the
Committee informed with periodic progress reports. (Steve Kozak)
-2-
March 13, 1996
FAHR96-20 Consideration of motion to receive and file staff report regarding
preparation for possible financing of Solid Waste Management
System Acquisition; and to direct staff to develop and circulate
Request for Proposals to assemble a solid waste financing team so
that, if needed, the Districts is ready to proceed immediately.
(Steve Kozak)
FAHR96-2·1 Consideration of motion to receive and file Treasurer's Report for
the month of January 1996. (Gary Streed)
FAHR96-22 Consideration of motion to receive and file staff summary report on
the organization of the Communications Division, the results of the
Internal Communications Audit, and an overview of new and/or
expanded programs to reach both internal and external audiences.
(Michelle Tuchman)
(8) Closed Session.
Closed Session: During the course of conducting the business set forth on this
agenda as a regular meeting of the Committee, the Chair may convene the Committee in
closed session to consider matters of pending real estate negotiations, pending or potential
litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9,
54957 or 54957.6, as noted.
:.::====:::.~:, Reports relating to (a) purchase and sale of real property; (b) matters of pending or ::.l::::::::: potential litigation; (c) employee actions or negotiations with employee representatives; or
which are exempt from public disclosure under the California Public Records Act, may be
reviewed by the Committee during a permitted closed session and are not available for public
inspection. At such time as final actions are taken by the Committee on any of these subjects,
the minutes will reflect all required disclosures of information.
~...... ... .. .... •... ... ..... .. ............................................ , ........ ~···· ··•·• ··-·· .......... ~ ........ _9;'" .................. •·•·· ........................................................................ ..1 ...................... :
(a) Convene in closed session.
(b) Confer with Special Counsel and General Counsel re status of litigation,
Patterson vs. County Sanitation Districts of Orange County, Orange
County Superior Court Case Nos. 738179, 738622 and 741371
(Government Code Section 54956.9(a).
(c) Reconvene in regular session.
( d) Consideration of action, if any on matters considered in closed session.
-3-
March 13, 1996
(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.
! ................... · ........................ •·••·• ...................... ·-·· ......... ..:-... --·-· ........................................... ·-·· . ·-· ... -.... ·-· .. ·-· ...... ~-..... ~· -. -.. "!,. .......... -•• ·-· .............. -~
1 i ! Notice to..Committee Members: j
i::· If you have any questions regarding the Agenda, or wish to place items on the Finance, l,:
Administration and Human Resources Agenda, Committee members should contact the . l Committee Chair or Secretary ten days in advance of the Committee meeting. l
! Committee Chair: George Brown (310) 431-2185 ~ ~ Secretary: Lenora Crane (714) 962-2411, Ext. 2501 i
1 (714) 962-3954 (FAX) !
.. "l ..................................................................................................... -••••••••••••••••••.••• ,.~ ••••• _ ••. ., ••• "' • ._ ......... __________________ '";••-·----· .. ·············'
J:\WPDOC\FIN\CRANEIFPC.MTG\FAHR.96\AGENDA.96\AGENDA3.96
-4-
ROLL CALL SHEET
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
MEETING DATE: March 13. 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) ........................ .
-------···························
STAFF
DON MCINTYRE, General Manager .............. .
BLAKE ANDERSON, Asst. Gen'I. Mgr. -Ops. . ..... .
JUDITH WILSON, Asst. Gen'I. Mgr. -Admin. . ...... .
NANCY WHEATLEY, Director of Tech. Srvs ........ .
GARY STREED, Director of Finance .............. .
ED HODGES, Director of Maintenance ............ .
BOB OOTEN, Director of Operations .............. .
DAVID LUDWIN, Director of Engineering .......... .
STEVE HOVEY, Director of Info. Srvs .............. .
MICHELLE TUCHMAN, Director of Communications ..
STEVE KOZAK, Financial Manager ............... .
MIKE WHITE, Controller ........................ .
GREG MA THEWS, Principal Administrative Analyst .. .
MIKE PETERMAN, Acting Director of Human Res .... .
TERRI JOSWAY, Safety & Emergency Response Mgr.
LENORA CRANE, Committee Secretary ........... .
OTHERS
TOM WOODRUFF, GEN'L. COUNSEL ............ .
HOWARD SLAVIN, ATTORNEY ................. .
Distribute After Meeting to:
Penny Kyle, Board Secretary
Lenora Crane, Finance
ROLL3.96
TIME: 5:30 P.M.
ADJOURN: __ _
•'
Format
0 Written Report
OOVerheads
OSlldes
0 Flip Charts Anticipated Time 5 min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
MARCH 13, 1996
(4)(d): Director of Finance Report
Summary
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, as they did again this year.
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:IWPOOC\FlNICRANEIFPC.MTG\FAHR.96\COVERS.96\00F3.96
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FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
MARCH 13, 1996
{ 5): Consideration of motion to approve the draft Finance,
Administration and Human Resources Committee Meeting
Minutes of February 14, 1996.
Summary
Attached is a draft of the Finance, Administration and Human Resources Committee
meeting Minutes of February 14, 1996, for approval by the Committee.
Staff Recommendation
It is recommended that the minutes of the February 14, 1996, Finance, Administration
and Human Resources Committee meeting be approved. These minutes were
submitted to the Joint Boards at their February 28, 1996 meeting, and no further action
is required.
J:\WPOOC\FINICRANE\FPC.MTGIFAHR.96\1996.MINICVRMIN3.96
.,
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, February 14. 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 February 14, 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:
John C. Cox, Jr., Joint Chair
George Brown, Chair
Jan Debay
James Flora
John M. Gullixson
Wally Lynn
Thomas Saltarelli
Roger R. Stanton, Vice Chair
William G. Steiner
Peer Swan
Committee Directors Absent:
Burnie Dunlap
Other Directors Present:
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
Steve Hovey, Director of Information Technology
Bob Ooten, Director of Operations
Gary Streed, Director of Finance
Nancy Wheatley, Director of Technical Services
Ed Hodges, Director of Maintenance
Michael D. White, Controller
Steve Kozak, Financial Manager
Linda Eisman, Training Manager
Greg Mathews, Principal Administrative Analyst
Terri Josway, Safety & Emergency Response Mgr.
Mike Peterman, Human Resources Supervisor
Isiah Mitchell, Training Supervisor
Cymantha Atkinson, Financial Analyst
Lenora Crane, Committee Secretary
Others Present:
Tom Woodruff, General Counsel
Ruthann Moomy, Callan Associates, Inc.
Rita Seymour, PIMCO
Gordon Hally, PIMCO
(2) APPOINTMENT OF A CHAIRMAN PRO TEM
No appointment was necessary.
Minutes of Finance, Ar in. and Human Resources Commit' 1
Page2
February 14, 1996
(3) PUBLIC COMMENTS
No comments were made.
(4) REPORTS OF THE COMMITTEE CHAIR. GENERAL MANAGER. ASSISTANT
GENERAL MANAGER($), DIRECTOR OF FINANCE/TREASURER. DIRECTOR
OF HUMAN RESOURCES. DIRECTOR OF INFORMATION TECHNOLOGY
AND GENERAL COUNSEL
(a) Report of the Committee Chair
The Committee Chair had no report.
(b) Report of the General Manager
The General Manager had no report.
(c) Report of Assistant General Manager -Operations
The Assistant General Manager -Operations had no report.
Report of Assistant General Manager -Administration
Judy Wilson, Assistant General Manager, Administration, announced that
a manila envelope was placed before each Director containing the
Districts' new Employee Handbook, a red book entitled "Human Resources
Policies and Procedures," and a copy of the Resolution adopted by the
Boards. Every Districts' employee was sent this information, and all of our
managers and supervisors will receive training on the policies and
procedures. This will ensure that everyone is in compliance and has a
good understanding of what is expected.
(d) Report of the Director of Finance/Treasurer
Finance DirectorfTreasurer Gary Streed referred to his report contained in
the agenda package which provided a history of the Districts' refunding on
its variable rate debt. With the successful substitution of the Liquidity
Providers on the 1992 Refunding COPs, Moody's has restored the
Districts' Aaa rating. The average daily rate paid in the first six months of
FY 1995-96 has been approximately 3. 76%. As of today, that rate has
dropped to 3.05%, with 3.25% on the refunding.
Mr. Streed advised that the Treasurer's Report will be given later in the
evening and will appear as a New Business numbered item, in order to
facilitate carrying it forward to the Joint Boards.
1 Minutes of Finance, Adrr') and Human Resources Committe"}
Page 3
February 14, 1996
In conclusion, Mr. Streed indicated that expanded reports will be given by
Callan Associates, the Districts' third-party Investment Advisor, and Pacific
Investment Management Company, the Districts' External Money
Manager, regarding the Districts' performance over the first six months.
(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
January 10, 1996, meeting of the Finance, Administration and Human Resources
Committee.
(6) OLD BUSINESS
FAHR96-04 Consideration of motion to approve Resolution No. 96-.
extending benefit coverage for regular employees working a
reduced work week.
This item was brought back to Committee from the January 10, 1996 meeting
with a request for further information. In this supplemental report, Mr. Hasenstab
reported on the three areas raised by the Committee at the last meeting,
specifically, retirement benefits, prevalence of part-time employment in Orange
County and other industries, and job sharing. Mr. Hasenstab reported that part-
time employees working a minimum of 20 hours are currently covered under the
Social Security Act at 7.65% of their hourly rate. Social Security vs. the Districts'
retirement system would mean a cost avoidance of $6,400. Public agencies
surveyed by the League of California Cities indicated 38% of them provide part-
time benefits to their employees, with approximately 90% of other industries
providing these benefits. Time-off benefits are prorated based upon hours
worked. Job sharing has its pros and cons. To avoid problems, many of these
employees sign agreements regarding their benefits so there will be no issue.
The Districts' current Employee Benefit Program is specifically limited to full-time
employees by Resolution 95-105. 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
Minutes of Finance, Ar in. and Human Resources Commit '
Page4
February 14, 1996
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. Staff recommended providing part-time employees with
entitlement to employee benefits prorated on the basis of 75 percent, if the
employee works on average 30 to 40 hours per week, and 50 percent, if the
employee works 20 to 30 hours per week.
After discussion, it was moved, seconded and duly carried, with two abstentions,
two nays, and four ayes, to recommend amending 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, to the Joint Boards of
Directors for further consideration.
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 this item had
been held over from the FAHR Committee's January 10, 1996 meeting pending
receipt of the County's Financial Disclosure Statement. That statement has been
released and the Joint Agreement, the Disclosure Statement and Plan of
Adjustment are coincident with each other. Mr. Anderson advised that the
Districts are about 6% of the Pool claims, with about $1.3 billion in total claims.
By approving the Agreement, it allows the County to improve its position, it
improves our place in line in receiving litigation proceeds from Merrill Lynch and
others, and gives the schools super priority in that litigation recovery. On an
immediate basis, withheld proceeds of $6.2 million held by the County under the
existing Comprehensive Agreement would be released to the Districts, and the
undisputed portion of the County Administered accounts amounting to $1.3
million will be released immediately.
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 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.
Minutes of Finance, Adrr,-) and Human Resources Committef')
Pages
February 14, 1996
After discussion on this item the Committee moved, seconded and duly carried
with one nay vote, to recommend that the Joint Boards approve the "Joint
Agreement Proposed by the County of Orange for the Resolution of Pool-Related
Claims of Option A Pool Participants, and Other Related Matters."
(7) 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.)
FAHR96-1 O Consideration of motion to renew Boiler & Machinery
Insurance for the period March 1. 1996 to March 1. 1997. with
American Manufacturers Mutual Insurance (Kemper
Insurance Group). in an amount not to exceed $79.698.
Steve Kozak, Financial Manager, reported that the Districts' Boiler & Machinery
insurance coverage is due for renewal on March 1, 1996. Robert F. Driver
Associates, the Districts' Broker-of-Record, recommends the Districts renew its
Boiler and Machinery Insurance with Kemper Insurance for a renewal period
effective March 1, 1996 to March 1, 1996, in an amount not to exceed $79,698.
The renewal premium adjustment will allow for increases in Districts' property
values and is only $2,307 higher than last year's. Driver's recommendation is
based on their recent survey which indicates there is a limited number of
available underwriters still providing Boiler and Machinery coverage and, those
that still do provide this coverage are imposing high deductibles and premiums for
large underwritings such as the Districts.
It was moved, seconded and duly carried to recommend renewal of Boiler &
Machinery Insurance for the period March 1, 1996 to March 1, 1997, with
American Manufacturers Mutual Insurance (Kemper Insurance Group), in an
amount not to exceed $79,698.
FAHR96-11 Consideration of motion to receive and file PIMCO's First
Quarterly Performance Report. Investment Management
Program.
Steve Kozak introduced Rita Seymour and Gordon Hally of Pacific Investment
Management Company (PIMCO), the Districts' external money manager, who
gave an overview of their company's background, services, processes,
procedures, reporting techniques and strategies.
Also in attendance was Ruthann Moomy, of Callan Associates, Inc., the Districts'
third-party Investment Advisor. Ms. Moomy described Callan's responsibilities to
the Districts' and reviewed the Districts' First Quarterly Performance Report.
It was moved, seconded and duly carried to receive and file this report.
Minutes of Finance, Ac .n. and Human Resources Commit'
Page6
February 14, 19.96
FAHR96-12 Consideration of motion to receive and file staff summary
report on training.
Judy Wilson introduced Linda Eisman who was hired in November 1995, to fill the
position of Training Manager. Linda Eisman summarized the Districts' Training
Program for the Committee using a slide presentation. Terri Josway, the
Districts' Safety & Emergency Response Manager, demonstrated the use of a
multi-media computer program on hazard awareness as a training tool. The
program allows for testing with a pre-test and post-test feature. The cost to
operate this equipment is expected to be as little as $1 per employee. The
Training Program is aimed at addressing past problems identified in the Ernst &
Young Study completed in 1995, along with recommendations made in other past
studies. A centralized record keeping system has begun, and a Training Advisory
Committee with representation across departments was formed in September
1995.
Ms. Eisman introduced Isiah Mitchell, who was recently hired to fill the newly
established Training Supervisor position. This position supports the Training
Manager position. The Training Division will be coordinating and centralizing
training functions, identifying cost-effective methods and providing data base
administration and management of Districts-wide training.
It was moved, seconded and duly carried to receive and file this item.
FAHR96-13 Consideration of motion to waive Districts' policy in order to
retain former employee on a work-order basis.
The Districts' Human Resources Policies and Procedures states that any former
employee who retires from the agency and forms a business in which he or she is
sole proprietor, may not be retained to provide service directly to the Districts for
a period of one year subsequent to their last day of employment. Ms. Tuchman
requested a waiver of this policy in order to retain Corinne Berenson on a work-
order basis.
Ms. Berenson, a long-time employee, has been working part-time since April
1995. Her in-depth knowledge of the agency makes her a valuable asset.
Providing support on an as-needed basis represents a significant savings to the
Districts over part-time employment.
It was moved, seconded and duly carried to waive the Districts' policy in order to
retain Corrine Berenson on a work-order basis.
~ Minutes of Finance, Adrr-) and Human Resources Committe'_...._)
Page7
February 14, 1996
FAHR96-14 Consideration of motion to receive and file Treasurer's
Report for the month of December 1995.
Gary Streed, Districts' Treasurer, reviewed the quarter ended December 31, 1995
Performance Monitoring Reports. Total investments amount to $367,805,049.
All Investment Policy requirements are being complied with and performance to
date exceeds the index rates.
It was moved, seconded and duly carried to approve and forward this report to
the Joint Boards.
FAHR96-15 Consideration of motion to review. approve and file the Mid-
Year Report prepared by staff for the period ending
December 31. 1996.
Mike White, Controller, introduced his report enclosed in the agenda packet. The
bound book is the Districts' first comprehensive Mid-Year Report for the period
ending December 31, 1995. The report consolidates both the financial and
operational accomplishments of the Districts at the midpoint of the 1995-96 fiscal
year.
Due to time constraints, it was moved, seconded and duly carried to table this
report until the March 13, 1996 meeting.
FAHR96-16 Consideration of motion to approve proposed update to the
Districts' Fiscal Policy Statements.
Mike White explained that the Fiscal Policy Statements are used to formally
define the goals for the financial operations of the Districts and provide the
Directors with tools for financial decision-making. The Fiscal Policy was used as
a guide in the 1995-96 budget, which also included the status of the Districts'
compliance with each of those statements. After reviewing the adopted Fiscal
Policy statements, staff is proposing five additional policy statements to ensure
the Policy is current and relevant to today's operations. Mr. White reviewed the
additional Fiscal Policy Statements.
After discussion on this item, it was moved, seconded and duly carried to adopt
the proposed update to the Districts' Fiscal Policy Statements with a change to
the statement regarding training opportunities to read, "To provide training
opportunities for available jobs within the organization, to the extent possible, for
those employees ... n
Minutes of Finance, A< ·n. and Human Resources Commit' 1
Page 8
February 14, 1996
FAHR96-17 Consideration of motion to review and approve 1996-97
Budget Assumptions for use in preparation of Districts' 1996-
97 Budget.
Mike White advised that certain assumptions are necessary as a foundation for
developing the Districts' budget. The assumptions guide the Board of Directors
and Districts' staff in determining the level of wastewater treatment services that
will be provided to the community and how these services will be funded.
After review and discussion of the 1996-97 Budget Assumptions, it was moved,
seconded and duly carried to approve the 1996-97 Budget Assumptions and their
use in the preparation of the 1996-97 Budget, with a change to the fourth Budget
Assumption to read, " ... earnings on the investment of the Districts' idle
operating cash and reserves will be budgeted at six percent."
FAHR96-18 Consideration of motion to waive Districts' policy in order to
retain former employee on a work-order basis.
The Districts' Human Resources Policies and Procedures states that any former
employee who retires from the agency and forms a business in which he or she is
sole proprietor, may not be retained to provide service directly to the Districts for
a period of one year subsequent to their last day of employment. Mr. Hovey
requested a waiver of this policy in order to retain Steve Fanizza on a work-order
basis.
Mr. Fanizza, a Districts' employee of five years standing, recently resigned his
position as Programmer Analyst to further his career as an independent software
consultant. Mr. Hovey requested Mr. Fanizza be retained on a work-order basis
in order to minimize the impact of Mr. Fanizza's resignation and to provide
uninterrupted support to Technical Services only until a permanent replacement is
recruited.
It was moved, seconded and duly carried to waive the Districts' policy in order to
retain Steve Fanizza on a work-order basis.
(8) CLOSED SESSION
There was no closed session required.
(9) OTHER BUSINESS. IF ANY
None.
Minutes of Finance, Adrr) and Human Resources Committe~
Page 9
February 14, 1996
(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, March 13, 1996.
(14) ADJOURNMENT
The meeting was adjourned at 7:15 p.m.
Lenora Crane
Finance, Administration and Human
Resources Committee Secretary
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\1996.MINIMFAHR2.96
)
Format
D Written Report
D Overheads
D Slides
D Flip Charts
Originator p
Department Head Sign Off 'J.7t'U
Anticipated Time i c 1\'\ ' N
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
March 13, 1996
FAHR96-04: Consideration of Resolution No. , Extending Benefit
Summary
Coverage for Regular Employees Working A Reduced Work
Week
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 eight part-time positions, including one
Storeskeeper Assistant in Finance and seven Part-time Assistants in Technical
Services. The actual part-time headcount for District employees is seven. The
Districts' Employee Benefit Program could be extended to part-time employees on a
prorated basis.
Conclusion
Providing part-time benefits to employees can be revenue neutral in its application. It
simply provides Districts' management with one more tool to effectively and efficiently
manage staff while attracting and retaining valuable human resources.
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.
g:\wp\hr\hr\steeves\fahr\ptben296.cov
March 4, 1996
FAHR96-04:
STAFF REPORT
Consideration Of Resolution No. ·' Extending Benefit
Coverage For Regular Employees Working A Reduced Work
Week
Questions and Clarification from the February 28 Board Meeting
1. The Board asked for the full cost/benefit analysis that staff used for its
projections on how part-time benefits were perceived to be revenue neutral to
the Districts.
Attached to this submittal is Table A which reveals that the cost of providing
benefits to current part-time employees is equal to $25, 720. Additional
estimates for six more part-time positions for fiscal year 1996-97 would raise
the grand total to $68,086.
Table B shows staff's projections for savings by the Districts. One job share
arrangement indicates a $4,853 savings by hiring a second employee at
bottom of range. The Table also indicates a $61,290 savings based on a
status change of four full-time employees to part-time, 30 hour per week
employees. These positions would not involve a job share arrangement.
Staff believes that part-time benefits are a win-win situation for the Districts.
Costs are not significant to provide part-time benefits since there are resulting
savings to offset these costs.
2. The Board indicated that it would like to know why there is a perceived
overtime problem that would justify the need to utilize part-time workers. The
Board also questioned why staff came up with part-time benefits as a solution
to that problem.
Due to a combination of policies including overtime and compensatory time,
the Districts have a "snowballing" effect when administering overtime. The
following example explains the situation that exists when staff converts
overtime into compensatory time "at the rate of 1 % hours for every hour
worked" as allowed in the MOUs.
CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411
FAHR96-04
Page 2
March 4, 1996
Employee A receives permission to work 12 hours of overtime. He/She
converts those hours into 18 hours of compensatory time. Employee A
then takes 18 hours off. In departments with minimum staffing levels,
Employee B would be required to work 18 hours of overtime to cover for
Employee A. Employee B then converts those hours into 27 hours of
compensatory time. This can go on and on up to the cap of 45 hours.
Providing prorated benefits to part-time employees will enable the Districts'
staff to attract and retain part-time workers to combat the "snowballing" effect.
g:\wp\hr\hr\steeves\fahr\ptben296
Table A -Cost of Part-time Benefits
Current Part-time employees
Job Title
PT Asst.
PT Asst.
PT Asst.
PT Asst.
PT Asst.
PT Asst.
Design Engineer I
TotaJ
Hrs. Worked
Additional estimate for 96-97 PT employees
Job Title Hrs. Worked
Sr. Comp Analyst
Sr. Comp Analyst
Exec. Asst. I
Environ. Spec. II
Clerk
Eng. Aide I
Total
20
20
35
35
35
30
30
20
20
30
30
30
30
Benefit Factor
24%
24%
24%
24%
24%
24%
24%
Benefit Factor
24%
24%
24%
24%
24%
24%
Eligible for: Cost of Benefits
12% $ 1,363
12% $ 1,282
18% $ 2,932
18% $ 2,785
18% $ 2,447
18% $ 2,603
18% $ 3,628
$ 17,039
Eligible for: Cost of Benefits
12% $ 3,011
12% $ 2,400
18% $ 5,989
18% $ 6,689
18% $ 4,049
18% $ 5,108
$ 27,246
Table B -Areas of Savings by Offering Part-time Benefits
Job Share Savings by Splitting at Bottom of Range
Job Title
Sr. Comp Analyst
Total
$
$
Split Salary
Part-time Savings Due to NOT Rehiring for Split Duties
Job Title Hours Worked PT Benefit Savings
Exec. Asst. I 30 $ 4,658
Environ. Spec. II 30 $ 5,202
Clerk 30 $ 3,149
Eng. Aide .I 30 $ 3,973
Total $ 16 983
New Entry Salary
$ -
Paid Time-off Savings
$ 1,008
$ 1,125
$ 681
$ 859
$ 3,674
Annual Savings
$ 4,853
$ 4,853
Salary Savings
$ 11,092
$ 12,386
$ 7,498
$ 9,459
$ 40,435
!Grand Total
Total cost to the Districts would be approximately $1,944
Page 1
Paid time off Total
$ 1,032 $ 2,395
$ 971 $ 2,252
$ 1,269 $ 4,201
$ 1,205 $ 3,989
$ 1,059 $ 3,506
$ 1,314 $ 3,917
$ 1,831 $ 5,459
$ 8,680 $ 25,720
Paid time off Total
$ 2,280 $ 5,292
$ 1,817 $ 4,217
$ 3,024 $ 9,013
$ 3,376 $ 10,065
$ 2,044 $ 6,093
$ 2,578 $ 7,686
$ 15,120 $ 42,366
!Grand Total Is 68,oa6 I
Total
$ 16,809
$ 18,768
$ 11,373
$ 14,339
$ 61,290
Is 66,142 I
Format
D Written Report
DOvefheads
D Slides
0 Flip Charts
Department Head Sign
Anticipated Time ---
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
MARCH 13, 1996
FAHR96-15: Review of the Mid-Year Financial & Operational Report
for the period ending December 31, 1995.
Summarv
Last month, staff presented the Districts' first comprehensive Mid-Year Report for the
period ending December 31, 1995 to the Committee. This report is a consolidation of
both the financial and operational accomplishments of the Districts at the mid-point of
the 1995-96 fiscal year. Because of time constraints, the Committee asked that the
report be resubmitted at the March meeting.
Contained within the Mid-Year Financial Report are budget summary reviews of the
Joint Operating & Working Capital Funds, the Capital Outlay Revolving Fund, individual
Districts, and the self-insurance funds. Contained within the Mid-Year Operational
Report is the status of the Activity Trends and Projects previously identified in the
1995-96 Approved Budget.
As indicated within the Overview Section of this report, 44.25 percent or $24,060,000 of
the 1995-96 net joint operating budget of $54,380,000 has been expended. In addition,
the Districts are still only at 48.26 percent of the "target" budget of $49,860,000.
The cost per million gallons for the second quarter alone was $603.09, which is slightly
higher than the annual targeted amount of $599.00, but below the approved budget of
$627.30. However, the cost per million gallons for the first half of the year is still low at
$555.87, due to the unusually low first quarter total of only $508.98.
Some of the factors contributing to the increase of $94.11 cost per mg from the second
quarter's total of $603.09 over the first quarter's total of $509.98 include:
• Environmental Monitoring increased 257.27 percent, or $34.74 cost per mg
over the first quarter. This majority of this increase is primarily attributable
to the timing of payments made for ocean monitoring, since out of the $1.3
million costs incurred to date, only $268,000 was recognized in the first
"") l
quarter. Although total environmental monitoring costs are $78,000 less
than last year at this time, this line item is currently at 55.51 percent of the
total budget and will have to be carefully monitored over the remainder of
the year.
• Although Repair Materials increased 67.91 percent, or $20.22 cost per mg
over the first quarter, this line item is still at 49.63 percent of budget at
mid-year. Staff will be challenged to keep this line item within the total
$3,375,900 budget, since an additional $500,000 of material relating to plant
automation computer maintenance has now been identified that had not
previously been considered during the preparation of the budget.
• Research increased 580.65 percent, or $13.59 cost per mg over the first
quarter. The majority of this increase is related to the increase in payments
made to Southern California Coastal Water Research Project Authority
(SCCWRPA). Although the Research line item is currently at 69.28 percent
of total budget, staff believes that the costs booked-to-date reflect a greater
portion of the total annual cost and that the year end total cost will
approximate the budget of $565,000.
Staff Recommendation
Staff recommends that the Committee approve and file the 1995-96 Mid-Year Report.
J:\WPDOC\FIN\CRANEIFPC.MTGIFAHR.96'1COVERS.96\FAHR96.15A
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0 Written Repott
OOverheads
OSlides Gary Streed
0 Flip Charts Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
MARCH 13, 1996
FAHR96-19: Consideration of motions to receive and file staff report
regarding review of Districts' risk management and insurance
activities; direct staff to solicit formal proposals for general liability insurance through
Robert F. Driver Associates and from the Special Districts Risk Management Authority
(SDRMA) and the California Sanitation Risk Management Authority (CSRMA); evaluate
the proposals and return to the FAHR Committee with recommendations for a general
liability insurance program as part of the FY 1996-97 budget; direct staff to prepare a
Risk Management Work Plan for FY 1996-97, and keep the Committee informed with
periodic progress reports.
Summary
A staff report regarding a review of the Districts' risk management and insurance
activities, including recommendations for follow-up actions, is submitted for
consideration by the Finance, Administration and Human Resources Committee.
Staff Recommendation
Staff recommends that the Finance, Administration and Human Resources Committee:
1 . Receive and file staff this report.
2. Direct staff to solicit formal proposals for general liability insurance through
Robert F. Driver Associates and from SDRMA and CSRMA; evaluate the
proposals and return to the FAHR Committee with recommendations for a
general liability insurance program as part of the FY 1996-97 budget.
3. Direct staff to prepare a Risk Management Work Plan for FY 1996-97, and keep
the Committee informed with periodic progress reports.
J:\WPOOC\FINICRANE\FPC.MTGIFAHR.96\COVERS.96\FAHR96.19
. I
March 13, 1996
FAHR96-19:
BACKGROUND
STAFF REPORT
Consideration of Staff Report Regarding Review of Districts'
Risk Management and Insurance Activities.
The Districts' current risk management program and practices consist of a combination
of self-insurance and commercial insurance as a result of Fiscal Policy Committee
recommendations which were implemented by the Joint Boards of Directors.
The Public Liability and Workers' Compensation Self-Insurance Plans have been in
existence since July 1979. Excess liability insurance was also in place at that time, and
was purchased each year until 1986, when faced with major increases in premiums,
reductions in coverages, and difficulties in placing and maintaining coverage, the Joint
Boards of Directors implemented a fully self-insured general and vehicle public liability
program.
For FY 1995-96, the Public Liability Self-Insurance Fund has an ending reserves
balance of $3.4 million. The ending reserves balance for the Workers' Compensation
Self-Insurance Fund is $756,000 for the same period. In addition, the FY 1995-96
budget contains approximately $1.5 million for insurance premiums placed through the
Districts' Broker of Record, Robert F. Driver Associates. Attachment "A" presents a
schedule of insurance policies currently in force.
Although the Districts' risk management program has been reviewed annually for
budgetary purposes, in recent years there has not been a regular review of the policies
that guide the program and how the changes within our operations affect the program's
structure. For this reason, staff is bringing forward a review of the existing program,
complete with industry benchmarks, specific recommendations for short-term
improvements, and a proposed work plan to guide future review and monitoring of the
program.
THE DISTRICTS' APPROACH TO RISK MANAGEMENT
In the past, it was standard practice for organizations to reserve funds to compensate
for an occasional aberrational year. However, today's complex regulatory environment,
the uncertainties in the insurance market in response to recent natural catastrophes,
CSDOC 0 P.O.Box8127 0 FountainValley,CA92728-8127 OTel. (714)962-2411 0FAX(714)962-3954
FAHR 96-19
Page2
March 13, 1996
and the trend involving large settlement awards require innovative approaches to the
management of risk. Therefore, it is increasingly important to take a longer view with
respect to managing and financing risk, and identify, implement, and monitor flexible
risk control alternatives.
As noted above, financial pressures on the insurance industry have escalated in recent
years, creating tight and expensive markets. While this is an important cost
consideration as we review the District's risk management program, we nonetheless
must focus on assessing how risk exposures have changed, and identifying the financial
implications of those changes. The program should look at what kind of risk financing
we should do based on the Districts' own needs and requirements, rather than the
demands of the insurance market.
As an initial step towards improving the program, or re-engineering the Districts'
approach to risk management, it is critical that the Districts evaluate if the current
approach to risk management is the most effective, given today's environment. Staff
initiated this evaluation of the current risk management program, using a combination of
benchmarking and alternatives analysis to prepare this report, and to formulate
recommendations for further action.
BENCHMARKING AND THE DISTRICTS1 RISK MANAGEMENT PROGRAM
In general terms, benchmarking can be defined as a coordinated effort to develop a
clear sense of where a particular program stands, at what level to set targets for
improvement, and how to redesign processes for maximum performance.
To develop a clearer understanding of the Districts' existing risk management program,
several key comparisons were reviewed using a recent study, "Cost of Risk Evaluation
(CORE) in State and Local Government," conducted by the Public Risk Management
Association (PRIMA) and Deloitte & Touche LLP. In that the CORE is a stand-alone
study, it does not identify trends which may have occurred over time. Additionally, the
study included general purpose governments of all sizes as well as special purpose
districts in its survey. As such, study conclusions are general in nature, and in some
cases, may require interpretation relative to a large operation such as the Districts.
Nonetheless, the CORE survey is a comprehensive benchmarking tool that can be used
to analyze costs and make comparisons concerning insurance limits, retentions, and
premiums. The CORE study is one of the most recent cost of risk studies available.
FAHR 96-19
Page3
March 13, 1996
Summary Comparisons
The CORE study surveyed almost 300 governmental agencies, ranging from very large
metropolitan and state governments, to small cities and towns. Respondents also
included county governments, school districts, and special districts across the nation.
The study reports that the average overall cost of liability, workers' compensation, and
property risk, as a percentage of budget, is approximately 0.007 percent.
Applying this 0.007 percent factor to the Districts' FY 1995-96 operating budget results
in a benchmark cost of $450,000. By comparison, the Districts' FY 1995-96 budget
includes $1.8 million for liability, workers' compensation, and property insurance; of
which $1.4 million funds the Districts' All-Risk Property and Earthquake insurance
premium (including in-lieu payments to reserves). The Districts' All-Risk premium cost
is approximately 90% of total insurance premium costs given the Districts' proximity to
known earthquake fault lines, and the continuing tightening of the All-Risk insurance
market.
The CORE study reports that most government agencies have both a risk management
function and a safety and loss control function, with most conducting in-house safety
programs focusing on employee safety. The Districts share this philosophy with the risk
management function managed by the Finance Division, and the safety program
managed by the Safety and Emergency Response Division in Human Resources.
Coordination of the Districts' risk management and safety programs is augmented by
the Districts' Safety Committee, whose membership consists of a cross-section of
departmental staff, including Finance. Additionally, risk management and safety
program staff have initiated discussions to organize a Districts' Risk Management Task
Force to address Districts-wide loss control and risk management issues.
Property Findings
The CORE study indicated that 90% of respondents maintain a property damage (other
than automobile physical damage) retention level of $100,000 or less. Auto physical
damage retentions were $10,000 or less. The Districts' property damage retention level
is $250,000 under the existing All-Risk Property and Earthquake Insurance Program,
which does not include auto liability.
The survey found that approximately 77% of all property losses were $100,000 or less.
Further, almost half of all property claims were $25,000 or lower.
FAHR 96-19
Page4
March 13, 1996
The CORE survey states that all-risk property coverage is purchased by approximately
80% of public agencies, as opposed to obtaining coverage only for specified individual
perils such as fire or windstorm. The Districts tracks directly with this benchmark. The
Districts' All-Risk insurance provides a $200 million blanket loss limit, with a $30 million
sublimit for earthquake coverage.
The Districts also purchases Boiler & Machinery (B&M) property insurance, as do 80%
of the agencies surveyed in the CORE study. The Districts' B&M policy provides a $100
million loss limit, with a $25,000 deductible. The CORE survey did not provide a
benchmark measure for this specific insurance coverage.
Liability Findings
The CORE study reports that liability costs make up approximately 34% of the total cost
of risk, making liability coverage the second largest cost category, after workers'
compensation. The benchmark study indicates almost 70% of the agencies surveyed
purchase primary general liability limits averaging approximately $6 million, and
excess/umbrella limits of $10 million. The most common general liability deductible is
$100,000. These agencies also obtain an average of $2 million public officials -, coverage.
By comparison, the Districts is entirely self-insured for general liability coverage with
$3.4 million in reserves. The Districts ceased excess liability insurance coverage in
1986. The Districts does maintain a $2 million limit for Fidelity/Faithful Performance,
covering Members of the Boards of Directors and Districts' staff.
Workers' Compensation Findings
The CORE study states that the average cost of workers' compensation risk financing
averages 1.1 % (0.011) of payroll, with the most common workers' compensation
retention being $250,000.
Applying the 1.1 % cost factor to the Districts' FY 1995-96 payroll results in a benchmark
comparison of 0.008% of payroll for the Districts. As noted earlier, the Districts currently
maintain a $756,000 self-insurance reserve for the primary layer of workers'
compensation coverage. This is supplemented with a $1 million Excess Workers'
Compensation policy which has a $250,000 retention.
FAHR 96-19
Page 5
March 13, 1996
Preliminary Benchmarking Conclusions
The comparison of the Districts' existing risk management and insurance program to the
benchmarks identified in the CORE study indicate that the Districts track reasonably
well with current practices in the following areas:
• Implementation of risk management function.
• Implementation of in-house safety program.
• Maintaining a variety of specialty insurance coverages.
• Achieving and sustaining a low rate of workers' compensation costs.
At the same time, this initial benchmarking exercise indicates that we can target areas
of the Districts' existing risk management program for improvement by developing a
Risk Management Work Plan.
The Risk Management Work Plan for FY 1996-97 would include items such as
developing and implementing a risk management monitoring and reporting component
for the Districts' new Financial Information System; developing executive summary
reports for monthly loss runs; preparation of a risk management and insurance Policies
& Procedures Manual; and preparation of an Annual Risk Management Report.
REVIEW OF AVAILABLE ALTERNATIVES
Continuing the evaluation of the Districts' existing risk management program, staff
researched alternatives to the current self insurance/commercial insurance strategy.
Staff directed specific attention to alternatives to the Districts' current Public Liability
Self-Insurance Fund.
General liability insurance is designed to cover only liability for property damage and
bodily injury. Because the Districts is solely self-insured for general liability, a single
catastrophic accident, or large settlement award, could entirely wipe out the Districts'
self-insurance fund.
Through strong operational safety and maintenance programs, the Districts has had
few significant losses in recent years. It is important, however, to remain aware of the
potential for an accident or other emergency incident to occur, despite proactive risk
management practices. While it is true that the Districts have enjoyed a sustained
period of low liability claims and losses, this trend, in and of itself, is no guarantee of
similar experience in the future. Random natural disasters can and do devastate local
communities, including public infrastructure such as roadways, bridges, water and
wastewater treatment facilities. The goal is to maintain appropriate levels of insurance
to protect the Districts given the unknown, the nature, timing, or magnitude of these
FAHR 96-19
Pages
March 13, 1996
Although the Districts have $3.4 million set aside in a self-insurance fund for such
incidents, it is possible that any one major incident could severely impact the reserve
level. The Districts have been judicious in past years by annually budgeting monies to
the self-insurance fund in an amount equal to the premium cost of the general liability
insurance in 1986, when the cost was $260,000. However, in light of what we know
today, the Districts would be advised to consider augmenting the self-insurance fund
with some form of excess/umbrella coverage for catastrophic events. This level of
protection would be a prudent safeguard that would be extremely valuable for the
Districts to have in place as part of a recovery plan for emergencies.
Therefore, it is prudent to review the extent of the Districts' exposure to catastrophic
liability risk, evaluate prevailing marketplace conditions, and compare the financial
implications of the Districts' self-insured position to a combined self-insured and
excess/umbrella insurance program.
ALTERNATIVES
General liability insurance, whether basic or excess coverage, is available through a
variety of programs and in various combinations of limits and self-retentions. This
section of the report focuses on preliminary comparisons between the alternative of
brokered excess coverage and coverage obtained through specialized insurance pools.
Excess General Liability Policy
The Districts could purchase an excess general liability insurance policy each year.
Robert F. Driver Associates estimated that an excess general liability policy having a
$23 million per occurrence and annual aggregate limit, with a $2 million per loss
self-funded retention, would cost approximately $200,000 per year.
Special District Risk Management Authority
The Special District Risk Management Authority (SDRMA) was formed as a shared risk
pool in 1986 to meet the liability insurance needs of special districts. The stated
mission of SDRMA is to specifically provide affordable, renewable insurance and risk
management services to California special districts.
Staff worked with SDRMA to complete a preliminary coverage review. SDRMA
recommended that the Districts maintain commercial carriers for Property and Boiler
and Machinery (B&M) insurance, and reduce the risk exposure of the Districts'
self-insurance fund by obtaining coverage for general liability, auto liability, and E&O
FAHR 96-19
Page7
March 13, 1996
from a risk-sharing pool. SDRMA estimated that excess general liability coverage
through SDRMA membership, having a $20 million per occurrence and annual
aggregate limit, and a $100,000 per loss self-funded retention, would cost
approximately $226,000.
California Sanitation Risk Management .Authority
Like SDRMA, the California Sanitation Risk Management Authority (CSRMA) was
formed as a shared risk pool in 1986. CSRMA is an association of California
wastewater agencies whose mission is to protect member resources by stabilizing risk
costs in a reliable, economical, and beneficial manner while providing broad coverage
and quality risk management services.
In initial discussions with CSRMA, they indicated that through CSRMA membership, the
Districts could participate in the Authority's pooled liability program with an excess limit
of $10 million above the Districts' existing $3.4 million self-insurance retention, and
purchase an additional $1 O million layer via an umbrella policy for approximately
$250,000 per year.
Association of Metropolitan Sewerage Agencies
In January, a consultant approached the Association of Metropolitan Sewerage
Agencies (AMSA) with a proposal that would involve a group discount broker providing
property, liability, and other lines of insurance to AMSA member agencies at significant
cost savings on paid premiums. In turn, AMSA contacted the Districts to determine our
interest in a pilot study which would evaluate the discount broker proposal. Staff has
indicated our interest in participating in their study. The AMSA study is slated to begin
in March.
CONCLUSIONS
At this point in the evaluation of the Districts' existing risk management program, staff
recommends that the Committee direct staff to solicit formal proposals for general
liability insurance through Robert F. Driver Associates, and from SDRMA and CSRMA,
evaluate the proposals, and return to the FAHR Committee with recommendations for a
general liability insurance program as part of the FY 1996-97 budget.
With respect to the future of the Districts' risk management program, staff recommends
that a Risk Management Work Plan be drafted to guide the ongoing development of the
program. The Work Plan would act as an agenda and a master schedule to coordinate
program improvements. The focus of this effort will be to identify and recommend the
most effective and efficient risk management strate9ies possible.
FAHR 96-19
Page 8
March 13, 1996
STAFF RECOMMENDATIONS
1. Receive and file staff this report.
2. Direct staff to solicit formal proposals for general liability insurance through
Robert F. Driver Associates and from SDRMA and CSRMA; evaluate the
proposals and return to the FAHR Committee with recommendations for a
general liability insurance program as part of the FY 1996-97 budget.
3. Direct staff to prepare a Risk Management Work Plan for FY 1996-97, and keep
the Committee informed with periodic progress reports.
SK:lc
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.19
Attachment
POLICY
COVERAGE
Boiler and
Machinery
Travel and
Accident
POLICY
LIMITS IUS$l
$100,000,000 Per
Occurrence Combined
Limit
Sublimits:
-$250,000 Increased
Cost of Construction/
Demolition
-$250,000 Expediting
Expenses, Ammonia
Contamination and
Water Damage
-$100,000 Hazardous
Substance
-Class 1 -$100,000 Per
Person, All Employees
and Directors
-$400,000 Aggregate
any one accident
INSSCH3.XLS
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INSURANCE SCHEDULE
POLICY
PERIOD
1-Mar-96
to
1-Mar-97
16-May-93
to
16-May-96
AS OF SEPTEMBER 1995
INSURANCE
CARRIER
Kamper
Insurance
Group
(3XL 13183900)
Heritage
Life
Insurance
Company
(SR14816-
LBQXK-01)
ANNUAL
PREMIUM
$79,698
$780
(3-Year
Pre-Paid
Premium)
Paga 1 of 4
SIR/DEDUCTIBLE
RETENTION
-$25,000 Deductible
-$100,000 Deductible for
Motors, Engines, and
Turbines over 500 HP, and
Digastars and Reactors
None
A TTT AC HM ENT
RISKS COVERED
Production machines, public utility
equipment, business interruption,
and earthquake resultant damage.
Accidental Death end
Dismemberment While
Traveling Outside Orange County.
2/29/96
POLICY
COVERAGE
Excess
Workers'
Compensation
Faithful
Performance
Bond
POLICY
LIMITS US$
-$1,000,000 Excess
Workers' Comp. each
accident/each employee
for disease.
-$1,000,000 Employer's
Liability
-Statutory Workers'
Compensation
-Includes Allocated
Claims Expenses
-$2,000,000 Per Loss
Employee Dishonesty,
Faithful Performance,
and Computer Fraud
for all Employees and
Directors
-$1,000,000 Per Loss
Depositor's Forgery
INSSCH2.XLS
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INSURANCE SCHEDULE
POLICY
PERIOD
1-May-95
to
1-May-96
1-Mar-94
to
1-Mar-97
AS OF SEPTEMBER 1995
INSURANCE
CARRIER
National
Union Fire
Insurance
Company
(4156013)
The Hartford
Insurance
Company
(PE8JL6769)
ANNUAL
PREMIUM
$21,662
$4,670
Page 2 of 4
SIR/DEDUCTIBLE
RETENTION
-$250,000 Workers'
Compensation &
Employers' Liability
-Includes Allocated
Claims Expenses
$5,000 Deductible
RISKS COVERED
Specific Excess Insurance for
self-insurer of Workers' Compensation
in the State of California. ,
Public Employee Dishonesty
(AKA Fidelity Bond), including Faithful
Performance, Computer Fraud, and
Depositor's Forgery
2/27/96
I
~
POLICY
COVERAGE
Property
Insurance
POLICY
LIMITS (US$1
$200,000,000 Blanket
loss limit per
occurrence
($30,000,000
sublimit and in
annual aggregate
for the perils
of earthquake and
flood!.
INSSCH1 .XLS
POLICY
PERIOD
26-Jun-96
to
26-Jun-96
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INSURANCE SCHEDULE
INSURANCE
CARRIER
Group of
10 Carriers
(See Attached)
AS OF SEPTEMBER 1995
ANNUAL
PREMIUM
$1,377,461
Page 3 of 4
SIR/DEDUCTIBLE
RETENTION
-6% per Unit of Insurance
subject to $260,000
minimum/$30,000,000 maximum
earthquake.
-$26,000 Flood and All Other
Perils.
RISKS COVERED
All Risk including earthquake and
flood on all real property and personal
property, underground tunnels, piping,
utilities, ocean outfall, lift and pumpin, •
stations, business interruption, rents, --"
(including bond revenue payments),
electronic data processing media
and extra expense, contractors
equipment, vehicles (including
collision), transit, demolition and
increased cost of construction,
contingent liability, valuable papers,
automatic coverage, debris removal,
extra expense and accounts
receivable all per manuscript form.
(NOTE: underground piping is
limited to on-site at Plants 1 and 2
plus the connecting lines between
the Plants.I
2/27/96
_)
.. ..
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
ALL RISK PROPERTY AND EARTHQUAKE INSURANCE PROGRAM
Effective: 25 June 95 to 25 June 96
SCHEDULE OF INSURANCE COMPANIES. PREMIUMS & FEES
PARTICIPATION & NAME OF CARRIER ANNUAL PREMIUM
A. $7,500.000 PRIMARY LAVER !ALL RISK INCLUDING EO & FLOOD!
Reliance Insurance Co.
Lexington Ins. Co.
CNA Ins. Co.
$3,000,000
$2,500,000
$2,000,000
$210,000
$175,000
$164,000
B. $2.500,000 EXCESS OF $7.500.000 LAYER (ALL RISK INCLUDING EO & FLOOD!
RLI Insurance Co. $2,500,000 $100,000
C. $10,000.000 EXCESS OF $10,000,000 LAYER (ALL RISK INCLUDING EO & FLOOD)
Agricultural Ins. Co.
Royal Insurance Co.
Reliance Insurance Co.
Fireman's Fund
Associated International
$2,500,000
$2,500,000
$2,000,000
$2,000,000
$1,000,000
$81,250
$81,250
$65,000
$65,000
$32,500
0. $5.000.000 EXCESS OF $20.000.000 LAYER (ALL RISK INCLUDING EO & FLOOD!
Essex Insurance Co. $5,000,000 $125,000
E. $5.000.000 EXCESS OF $25.000,000 LAYER (ALL RISK INCLUDING EQ & FLOOD!
Westchester Fire Ins. Co. $5,000,000
F. $15.000,000 EXCESS OF $30.000.000 LAYER (NO EARTHQUAKE!
Fireman's Fund Ins. Co. $15,000,000
G. $155.000,000 EXCESS OF $45.000,000 LAYER (NO EARTHQUAKE)
Fireman's Fund Ins. Co. $155,000,000
TOTAL PREMIUM
CIGA
Taxes and Fees
1995 GRAND TOTAL PREMIUM COST
INSCH495.XLS Page 4 of 4
$87,500
$90,000
$81,000
$1,358,000
$5,907
$13,544
$1,377,451
3/7 /96
•,
;
fg!!!!!!
D Written Report
DOverheads
OSlides Gary Streed
D Flip Charts Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
MARCH 13, 1996
FAHR96-20: Consideration of motion to receive and file staff report regarding
preparation for possible financing of Solid Waste
Management System Acquisition; and to direct staff to develop and circulate Request
for Proposals to assemble a solid waste financing team so that, if needed, the Districts
is ready to proceed immediately.
Summarv
A capital financing program would be used for the Solid Waste Management System
acquisition and related Capital Improvement Program. In preparation for this, staff is
initiating the process to establish a financing team to develop the Solid Waste
Management System capital financing program. Financing team professionals would
be compensated only if a financing transaction takes place.
Staff Recommendation
1. Receive and file this report.
2. Direct staff to develop and circulate Request for Proposals to assemble a solid
waste financing team so that, if needed, the Districts is ready to proceed
immediately.
J:IWPOOC\FINICRANE\FPC.MTGIFAHR.96\COVERS.96\FAHR96.20
"
March 13, 1996
FAHR96-20:
Background
STAFF REPORT
Consideration of staff report regarding preparations for
possible financing program for Solid Waste Management
System Acquisition
On February 14, 1996, the Joint Boards of Directors approved the Memorandum of
Understanding (MOU) regarding the terms and conditions of acquisition of the Orange
County Solid Waste Management System and directed staff to submit the MOU to the
County of Orange. Staff submitted the MOU on February 23, 1996, and the County is
currently in the process of considering the proposal.
Capital Financing Program
The MOU constitutes the basis of the Districts' offer to the County to acquire the landfill
system. As such, the MOU is predicated on two critical factors; commitment of 90%
waste stream flow control by the cities, and the implementation of a capital financing
program by the new Solid Waste Management Sanitation District (SWMSD-99).
It is important to note that the financing would be secured by a pledge of revenue based
on the receipts of the waste management disposal facilities (landfill tipping fees). No
wastewater revenues or reserves would be used or pledged to support the solid waste
financing program. Also of interest is that the capital financing program strategy is
based on the assumption that investment grade ratings would be required for the solid
waste issue. To ensure this, a minimum of 90% flow control is required.
All financial projections and cashflow analyses that support the MOU for acquisition of
the waste system are based on the commitment of 90% of the Orange County waste
stream. Currently, the County's system is without waste flow agreements, and cities
and their haulers may use the Orange County landfills at their convenience, choosing to
leave the local system whenever a short-term lower rate can be secured. If the
proposed SWMSD-99 is to finance the system, it is imperative that a steady waste
stream is committed, therefore ensuring a reliable and predictable revenue stream. The
Districts' staff is holding a series of regional workshops with local elected officials and
city managers to discuss the issue of flow control and to ask cities to commit their waste
stream. A March 22, 1996, deadline has been set to secure 90% flow control.
CSDOC 0 P.O. Box 8127 0 Fountain Valley, CA 92728-8127 0 Tel. (714) 962-2411 0 FAX (714) 962-3954
FAHR96-20
Page2
March 13, 1996
The other factor central to the MOU is the use of a capital financing program to finance
acquisition of the system and fund the capital improvement program (CIP) for the
SWMSD-99. Currently, the County is paying for its landfill CIP on a pay-as-you-go
basis because it is difficult to secure debt financing without a secured waste stream.
Pay-as-you-go financing directly impacts the system's rates, with significant increases
being needed in years in which large capital projects are planned. The new SWMSD-99
would use a capital financing program for the system acquisition and the CIP, which
would allow for a more predictable rate increase pattern.
Financing Team
In preparation for the potential landfill acquisition, staff is initiating the process to
establish a team to develop the capital financing program. The team would consist of
the following financing professionals:
Financial Advisor:
Underwriter(s):
Bond Counsel:
Solid Waste Engineer:
To assist in identifying capital financing
alternatives and planning the debt program.
To purchase and resell the securities.
To certify the legal authority of the bond issue.
To render an opinion on the feasibility of the
improvements in connection with the issue.
Staff is preparing a Request for Proposals (RFP) for each of the specialities and
updating the Districts' RFP mailing lists.
Timing
While staff feels that it is prudent to begin the background work for the capital financing
program, the need for the team is entirely contingent on the County's consideration of
the MOU. If the County responds favorably to the MOU and agrees to its terms, the
Districts and the County will enter into a 60-day closing period to finalize the deal.
However, if the County rejects the Districts' offer, the process would likely end at that
time.
Staff recommends that the Committee direct staff to proceed with development and
circulation of RFPs to assemble a solid waste financing team so that, if needed, the
Districts is ready to proceed immediately.
FAHR96-20
Page3
March 13, 1996
Recommendations
1. Receive and file this report.
2. Direct Staff to develop and circulate Request for Proposals to assemble a Solid
Waste Financing team so that, if needed, the Districts is ready to proceed
immediately
SK:CA:lc
J:\WPOOCIFIN\CRANE\FPC.MTGIFAHR.96\STAFFRPT.96\SRFAHR96.20
Proposal Requirements
Request for Proposals (RFP)
Selection of Bond Counsel
For
Solid Waste Management System Financing Program
1.0 General lnfonnation
1.1 Introduction
J
The County Sanitation District~ of drange County is proposing the formation of a county-
wide Solid Waste Management S~nitation District to assume the solid waste authority for
waste disposal a.ptl' l~ndUll .:mana'1ement now governed by the County of Orange. The
goal is to increase-lq:_Pal co~tfol of the waste management system by establishing direct
local governance Qy ~the .customers of the waste disposal system. The new district would
be formed unde('Califomi~:fl-lealth and Safety Code 4700 et seq, and would be governed
by a 33 member board riepresenting all cities and sanitary districts in the County. By
restructuring 99.vernance of the system, the communities using the local disposal system
would controHi1e-operations, management, finances and liability of these disposal
facilities. The new district would be called the Solid Waste Management Sanitation
District of Orange County (SWMSD-99).
All financial projections and cashflow analyses that support the concept of the new solid
waste district are predicated upon the use of a capital financing program to both finance
acquisition of the system and fund the capital improvement program (CIP) for the
SWMSD-99. Currently, the County is paying for its landfill CIP on a pay-as-you-go basis
because it is difficult for the County to secure debt financing without a secured waste
stream. Pay-as-you-go financing directly impacts the system's rates, with significant
increases being needed in years in which large capital projects are planned. The new
SWMSD-99 would use a capital financing program for the system acquisition and the
CIP, which would allow for a more predictable user rate pattern.
It is important to note that the financing would be secured solely by a pledge of revenue
based on the receipts of the waste management disposal facilities (landfill tipping fees).
No wastewater revenues or reserves would be used or pledged to support the solid
waste financing program. Also of interest is that the capital financing program strategy is
based on the assumption that investment grade ratings would be required for the solid
waste issue. To ensure this, a minimum of 90% flow control is required.
In preparation for the potential landfill acquisition, staff is initiating the process to
establish a financing team to develop the capital financing program. On February 14,
1996 the Joint Boards of Directors approved the Memorandum of Understanding (MOU)
regarding the terms and conditions of acquisition of the County's waste disposal system
and directed staff to submit the MOU to the County of Orange. Staff submitted the MOU
on February 23, 1996 and the County is currently in the process of considering the
proposal. Initial Board of Supervisors review is scheduled for March 12, 1996.
While staff feels that it is prudent to begin the background work for the capital financing
program, the need for the team is entirely contingent on the County's consideration of
the MOU. If the County responds favorably to the MOU and agrees to its terms, the
Districts and the County will enter into a 60-day closing period to finalize the deal.
However, if the County rejects the Districts' offer, the process would likely end at that
time. The proposed solid waste management system financing program and the use of
the financing team professional is contingent on the County and the Districts entering
into an agreement for the transfer of the waste disposal system.
1.2 Intent of Request for Proposal
The Districts are seeking proposals f rolll,.firJTl,~"'-qJ:iified to serve in the capacity of Bond
Counsel to provide Bond Counsel servi!:es fo r :P,S ose1d 'solid waste management
system transaction(s). J '·~.· ~
2.0 Scope of Work ~mr:
··1*'
The Districts are seeking the sef.v1c~s.o(qualified Bond Counsel. The selected legal firm
will assist the Districts, in the.·~xecrition4of future bond transactions for the solid waste
management system finam;:ing pr~gr~m. The duties of the Bond Counsel shall include,
but may not be limited to:,fii 2j"~ 'l" ~·1:---"1 .. ·~ f •'°'L-:.f... • 1. Conduct an.finaly~1s of ,the legal aspects of future bond financings.
ii -i:--·!~¥1.
2. Draft all bond documents including trust agreements, resolutions and assignment
agree!rients. .i
~~"",u;.'"""
3. Provide"alegal opinion regarding the tax-exemption of the bonds and other
issues as may be required to facilitate the issuance of the bonds, including, but
not limited to preference, bankruptcy and enforceability opinions.
4. Review and evaluate the legal and tax aspects of the structure of the transaction
as proposed by the financial advisor and senior underwriter. Provide legal
assistance and input as required.
5. Make presentations to the Districts' Board of Directors, as necessary.
2.1 Bond Counsel Qualifications
The Districts will select a financing team which, in its sole opinion, is most capable of
performing the services described in this RFP. To be considered for the work, a
proposer must demonstrate knowledge of or experience in similar solid waste financing
projects. Additionally, the firms must have references which can attest to the quality of
the firm's past work and its record in meeting project timetables.
2.2. Assigned Professionals
This section shall include a staffing plan and a letter from the Senior Managing Partner
or designee of the proposer to guarantee that the key personnel indicated in the
organizational chart will be assigned to this project unless their employment is
terminated. If substitutes or back-up personnel are planned on a contingency basis,
they should be indicated on the organizational chart.
Page 2 of 8
The Districts reserve the right to investigate the qualifications of all firms under
consideration and to confirm any part of the information furnished by a proposer, or to
require other evidence of managerial, legal or technical capabilities which are
considered necessary for the successful performance of the contract.
3.0 Proposal Contents
All proposals shall be in the format described below. In order to ensure that each
proposal is reviewed and scored property, it is imp'ortant that each proposer follow the
format with care. Proposals should be as br:i_ef];!:md concise as possible, responses are
not to exceed twenty (20) pages. Propbsals .:ex~eeding"i20 pages shall be deemed non-
responsive. Lists and tables summariziQg expen"li~,._may be provided in appendices
not counted under the 20-page limit: =
1.
2.
3.
4.
5.
6 .
.. v
Cover Letter
Qualifications of the Firm
Assigned Professionals ,_,,¥
Recommended Le.g~l/Busrn~ss Approach
Cost/Pri~~ropoi:a!,~. Fi rn'r
Statemeht"ofl~onflict of Interest •;1 111 ~ -oi!ibl ~~··if -~
For a proposal to'be corjsJdered, a firm must respond to the following questions:
:[
A. ~ CoverTetter 1
1. The cover letter should not exceed three (3) single-spaced pages and
should be signed by a principal of the proposing firm. The letter should summarize the
major points contained in the proposal, as well as provide the name and phone number
of the key contact person. The cover letter should be signed by an authorized
representative of the firm who may contractually bind the firm and negotiate on behalf of
the firm. Please indicate that the proposal is valid for 90 days.
B. Qualifications of the Firm
1. Describe any relevant experience, indicating issuers and transactions for
which your firm has served (indicate if bond or underwriters' counsel) and brief details of
the transaction. Please limit data on relevant experience to the following categories:
a. Short-term borrowings
b. Long-term debt restructuring
c. Certificates of Participation (COPs)
d. Variable Rate Structures
e. Revenue Bonds
Use the data from a recognized source such as the Bond Buyer or Securities Data
Corporation, cite the 1993, 1994 and 1995 rankings for your firm as bond counsel in
California as well as nationally.
2. For each category, indicate the issuer, the role of your firm (as bond
counsel or underwriters' counsel), the par amount and date of the issue.
Page 3 of 8
3. Describe why you believe your firm is the best candidate to serve as
Bond Counsel for the Districts' proposed solid waste management system financing
program. What factors do you feel should weigh most heavily in this selection? Please
include any additional information that you believe is relevant to the selection process.
C. Assigned Professionals
1. State the name, home office location, telephone number, background,
and relevant experience for all individuals, including tax counsel, who will
be assigned to this engagement. Describe the_ role and responsibility of each individual;
identify the individual charged with the ~,,y-toJ~~~ responsibility for this engagement as
well as the individual who will attend qfflcial Jffeetir:igs c;>f'the Districts when requested.
Provide .an organizational chart outliniVg .!'ow yO'Lif:team _ will execute the Dist~cts'
tran_sact1on~. I~ ~he firm. has more t~a~~-;je ""'~ffice, .'dent1fy the office from which ~~ch
designated 1nd1v1dual will be operating~ Pl.1:r~i~_e bnef resumes for each, emphasizing
recent relevant solid waste man~geitbi~J, an'9.;imulti-jurisdictional experience; especially
recent California experience. 4St aofb~f-~~sociations to which professionals assigned
to the engagement belong. l.:jst any aq_~fflonal licenses or certifications that you believe
are relevant to the Districts, -includi,~g_,NASD, NYSE, and SEC licenses.
-'-". .--[~c;J~ -·~ ,J"'•"'"
2. lf youf fim1--'do'e!:! not have the necessary expertise or resources in your
Los Angeles/Orang~1~904ntr:ar~a office, please describe the arrangements your firm will
make to provide bond coT:u'isel services on a continuous and uninterrupted basis.
-¥ [ 1 ; '
~I;,. .,u
3. ~l~rovid~·no more than three (3) client references for the professionals
assigned to tniS'l engagement. Indicate the names, telephone numbers and transactions
11IJH ;1 completed for each reference.
D. Firm Legal/Business Approach
1. Describe your understanding of the Carbone decision, and discuss your
firm's recommendations for structuring flow control for the proposed solid waste
financing program, in light of Carbone.
2. Discuss your firm's view on how bond documents can be structured to
protect the bondholders while providing greatest flexibility to the Districts. Are there
specific provisions that you would recommend? If yes, please describe.
3. Describe your firm's view on secondary market disclosure? What steps
should the Districts take to protect itself while ensuring adequate disclosure? Is there a
need for separate disclosure counsel?
E. Cost/Price Proposal
1. Please describe the basis on which you propose to be compensated.
provide an estimate of your expected total fee as well as the components making up that
fee. It is the Districts' intention to compensate counsel based on flat, not-to-exceed,
contingent fee per transaction. State the specific circumstances, if any, for which your
firm might seek additional compensation. Any additional expenses or compensation in
excess of this not-to-exceed fee will be at the sole discretion of the Districts and will be
Page 4 of 8
,,....\ ~
I I
negotiated on a transaction by transaction basis. Provide a not-to-exceed fee for the
following transactions, including an estimate of the hours required by the assigned
professionals for each type of transaction, and how the hours are managed (assume a
$100 million financing).
Traditional Certificates of Participation
Refunding Certificates of Participation
Revenue Bonds
The Districts will reimburse counsel for reasonable expenses. These expenses may
include: printing, munifacts, advertising, overjapeing debt statement, CUSIPl~!CICDAC, travel, .messenger/T,ail/(i~-e~. and duplication/faxing/telepho~e ..
Any add1t1onal expenses will only be h,onore_q wit~ tt,he expressed consent of the D1stncts
prior to the time a transaction is price~ lr;idicate .. ~tother expenses for which your firm
would seek reimbursement. The Distn-""1'.will not reimburse bidders for either computer
or word processing time. "1=-r·
2. The Districts intend to reirri'~~~cocinsel for work done outside of a defined
transaction on an hourly basis: Pl~ase 'provide the hourly rates for the lead Attorney,
Tax Counsel and other p~o{~Tsio~als a'ssigned to such projects or assignments. Please
indicate if these _ra!r.s a~~;,tpe traWtional hourly rates charged by the key professionals of
your firm or if a percentag·~ di~count will be offered to the Districts in performing such
projects or assig~m~~;t~-"'; -~t
, ,u •L:. -
F. Statern,ent of Conflict of Interest
bll .-:
If at any time~ft~~-January 1, 1992, your firm participated in any financial transaction
with the Counly ol Orange, any agencies governed or controlled by the County of
Orange, and/or the Orange County Treasurer, please provide the following information
for each transaction:
a. For debt and similar issuances: the date and amount of each; the principal
parties; and the role of your firm.
b. For investments: the date and amount of each; the type of investment; the
principal parties; and the role of your firm.
Proposals which do not meet these qualifications will not be considered beyond
preliminary evaluation.
4.0 Technical Proposal Evaluation Process:
The overall evaluation process will be performed by a Proposal Evaluation Team (the
"Team"). The evaluation criteria set forth at the end of this section will be the sole basis
for determining the technical acceptability of proposals. The technical proposal should
be specific and complete in every detail.
4.1 The proposers, whose written proposals are determined to be within the competitive
range by the Team, may be interviewed or asked to enter into contract negotiations.
Upon evaluation of the proposals and outcome of negotiations, the Team will make a
recommendation for contract award.
Page 5 of 8
The Districts may:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Reject any or all proposals.
Issue subsequent requests for proposals.
cancel the request for proposal.
Appoint alternate members of the Team.
Remedy technical errors in the request for proposals.
Approve or disapprove the use of particular firms.
Establish a short list of proposers eligible.L.fOr interviews after review of written
proposals by the Team and con!l~er~ij~f.[ of its r~commendations.
Modi~ any requirements cont~lrie~ _ritnf.1 ~Q~ R,~P and reques~ .revised
subm1ttals from proposers det~J.:m_1n'ed to bJi..;;;,_withm the compet1t1ve range.
Negotiate with any, all or none ~~lhe proposers.
Solicit best and final offers from al · e or none of the proposers.
"1~1: Award a contract to one o~··m.:,~;~ppro :. · ers.
Accept the written prop_osal _aS'l'ari~ffer, without negotiation and issue a notice to
proceed. r'°" '"'
This RFP does not com~itJhe .Qr~fricts ~b:rr(gotiate a contract, nor does it obligate the Districts
to pay for any costs incurre(;t'."jn pr~paration and submittal of proposals or in anticipation of a
contract. The Districts res~.r:ves-the:{ight to contract with any of the firms responding to this RFP
based solely upon its ju1dgmenr9nhe qualifications and capabilities of that firm.
No informatio~ relati?ij to th~,_r~sults of the RFP process will be released until after the
recommendations by:lhe lieam. ·1:_JJL~
4.2 Proposal Evaluation Criteria
The Districts anticipates selecting firms first for its senior managing underwriter positions.
All firms not selected as senior managing underwriter and who requested consideration for
co-manager will be evaluated for co-managing underwriter positions. The criteria for
evaluating includes, but is not limited to the following:
1. Experience of the firm with solid waste management system
financings and with California long-term debt financings.
2. Demonstrated competence of the individuals assigned to the
financing, including references.
3. Cost/Price Proposal.
4. Approach to the requirements as indicated in the written
proposal.
5. Understanding of the legal structure, and statutory restrictions for
issuance of tax-exempt solid waste system bonds.
Page 6 of 8
5.0 Role Definitions
6.0
6.1
7.0
A. Firm's Responsibility
The selected firm shall furnish the necessary professional, technical and clerical
personnel to provide services required.
The selected firm will appoint and make known to the Districts a Project Manager
who will be responsible for all coordination between the Districts and the bond
counsel. ...
B. Districts' Responsibility
The Districts shall provide guidelin -
Steve Kozak, Financial Manj ge,l;lsha -manage the project for the Districts.
-~ ::-
•Ll ,['1
Jc ~~W I :
Prohibited Activities:
PROPOSERS, TH1EJR AGENTS-i1\ND/OR ASSOCIATES SHALL REFRAIN FROM
CONTACTING OR-~~LICl~ING DISTRICTS' OFFICIALS REGARDING THIS RFP
DURING THE SELECli:ION 'PROCESS. FAILURE TO COMPLY WITH THIS
PROVISION MAilf RESOL;{ IN DISQUALIFICATION OF THE PROPOSER.
J
Proposal Su,ltmittal ·"1
F
A complete submittal will consist of an original and ten (10) copies of the proposal
documents. All submittals must be received and time stamped by the Districts, at the
address provided below no later than 4:00 p.m. local time on . Proposals
received after 4:00 p.m. local time will not be considered. FACSIMILE COPIES WILL
NOT BE ACCEPTED.
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
ATTN: STEVE KOZAK, FINANCIAL MANAGER
10844 ELLIS AVENUE
FOUNTAIN VALLEY, CA 92728-8127
8.0 Additional Information and Changes
No oral modifications of this RFP shall be valid. Any modifications shall be written by
RFP addendum, and signed by the Districts' Director of Finance.
9.0 Confidential Data
Proposer shall clearly mark each page of its proposal that contains trade secrets or
other confidential commercial or financial information which the proposer believes should
not be disclosed outside of the Districts. No part of any proposal will be disclosed
outside the Districts prior to contract award.
J:\WPDOC\FIN\CRANEIFPC.MTGIFAHR.96\STAFFRPT.96\BCRFP&NM
Page 7 of 8
DISTRICTS' BOND COUNSEUUNDERWRITERS' COUNSEL SELECTION SCHEDULE
l "it
Request for Proposals are mail~d via Certified Mail to Distribution
List. f;;;:-·
~ Pre-proposal conference o be~held~at 9:00 a.m. ~:~j~:.·t;r
istricts by 4:00 p.m.
Districts' Rl!view o , 1ttee review proposals and develop short list
of firms to'-f:>e .interviewed for consideration by Districts' Finance and
Personnel Comrnittee. -~ . _ -r· ~J.l!. iii4~r
Lr-districts~ fin~nce and Personnel Committee considers Review
, Committee' recommendation and determines short list of firms to be
.1 ;> intervf~wed as well as composition of Selection Committee.
Districts' Selection Committee interviews short list of firms, or and
"· p6ssibly makes selection of Bond Counsel and Underwriters'
Counsel.
Joint Boards approve selection of Bond Counsel and Underwriters'
Counsel.
Page 8 of 8
Proposal Requirements
Request for Proposals (RFP)
!'-:!
.f.Y:HG ~·
Selection of lndependi ntj ift!asib.ility Engineer
I. ·•l -·~ ·!i;c.: r; I ~7• Ulr:-..Or .. ~
Solid Waste Management~-.stem Financing Program
1, .
1.0 General Information ··-.
1.1 Introduction
The County Sanitati<>,,n Districts: of Orange County is proposing the formation of a county-wide Solid .:1.--.J Waste Management]~~nit~ti_p'n District to assume the solid waste authority for waste disposal and
landfill management h,OW governed by the County of Orange. The goal is to increase local control of
the waste management system by establishing direct local governance by the customers of the waste
disposal system. The new district would be formed under California Health and Safety Code 4700 et
seq, and would be governed by a 33 member board representing all cities and sanitary districts in the
County. By restructuring governance of the system, the communities using the local disposal system
would control the operations, management, finances and liability of these disposal facilities. The new
district would be called the Solid Waste Management Sanitation District of Orange County
(SWMSD-99).
All financial projections and cashflow analyses that support the concept of the new solid waste district
are predicated upon the use of a capital financing program to both finance acquisition of the system
and fund the capital improvement program (CIP) for the SWMS0-99. Currently, the County is paying
for its landfill CIP on a pay-as-you-go basis because it is difficult for the County to secure debt financing
without a secured waste stream. Pay-as-you-go financing directly impacts the system's rates, with
significant increases being needed in years in which large capital projects are planned. The new
SWMSD-99 would use a capital financing program for the system acquisition and the CIP, which would
allow for a more predictable user rate pattern.
It is important to note that the financing would be secured solely by a pledge of revenue based on the
receipts of the waste management disposal facilities (landfill tipping fees). No wastewater revenues
or reserves would be used or pledged to support the solid waste financing program. Also of interest
is that the capital financing program strategy is based on the assumption that investment grade ratings
would be required for the solid waste issue. To ensure this, a minimum of 90% flow control is required.
In preparation for the potential landfill acquisition, staff is initiating the process to establish a financing
team to develop the capital financing program. On February 14, 1996 the Joint Boards of Directors
approved the Memorandum of Understanding (MOU) regarding the terms and conditions of acquisition
of the County's waste disposal system and directed staff to submit the MOU to the County of Orange.
Staff submitted the MOU on February 23, 1996 and the County is currently in the process of
considering the proposal. Initial Board of Supervisors review is scheduled for March 12, 1996.
While staff feels that it is prudent to begin the background work for the capital financing program, the
need for the team is entirely contingent on the County's consideration of the MOU. If the County
responds favorably to the MOU and agrees to its terms, the Districts and the County will enter into a
6CH:iay dosing period to finalize the deal. However, if the q6unty rejects the Districts' offer, the process
would likely end at that time. The proposed s!>Ud Y,as~e management system financing program :.'..:,:· .:=-~=-=-f and the use of financing team professiol'lals i~-cpnt!ng~nt on the County and the Districts
entering into an agreement for the transfert he waste disposal system.
1.2 Intent of Request for Proposal
r.q; ,,,-~
The Districts are seeking proposals from-firros alified to serve as an independent feasibility engineer
to provide and "Independent Engine~ring Rep_ol1" for inclusion in the offering documents for the solid
waste management system financihg prQgr~m.
2.0 Scope of Work
-i;_,' .•.
The Districts is seeking the se/vices of an independent feasibility engineer to perform the following
tasks and provide a~~;lndepe-ndent Engineering Report."
""' ""l:"-
Task 1 -Review of Contracts. Agreements and Documents
The independent feasibility consulting engineer (the "Engineer'') will undertake a review of all relevant
contracts, agreements and documents related to the Solid Waste Management System (the "System").
In undertaking this review, the Engineer will identify concerns regarding the financial and technical risk
of operating and maintaining the System. The primary focus will be to identify terms and conditions
which could affect The Districts' ability to finance the acquisition and capital requirements of the
System. The review will include the following:
1. Review State and County statutes related to operating the Orange County solid waste
management system.
2. Review Memoranda of Understanding (MOUs) with host cities and any other inter-jurisdictional
agreements that apply to the system.
3. Review waste flow control methods being implemented by the Districts'. This review will
consider recent Federal and State actions that have been made regarding flow control.
4. Review all relevant solid waste management plans, such as the Integrated Waste Management
Plan, Source Reduction and Recycling Element, Permit Design and Operating documents.
5. Review other pertinent and relevant documents as required.
Page 2
'f
Task 2 -Evaluation of Solid Waste Supplv and Sources
The Engineer will review the quantity and composition of solid waste to be delivered to the landfill
system for the purpose of determining the useful life of the landfill system, including additional permitted
capacity, the level of tipping fees, and potential quantities of recycled material.
The Engineer will identify whether there are any a_lt~rnative means of waste disposal for waste
generated within the geographical boundari~j;, of~~jl~ CounJy based on independent review of
information obtained from the County, the Stat~ of Calif""'· · and private sector sources. ~
The Engineer will determine the quantity of sp . ,!W,aste under the control of the Districts', absent the
enactment of any flow control legislation wh~l\aPPJ1'!'.}.P the County. If no flow control is enacted, the
Engineer will evaluate the level of tippinQjee!;lh!t ~h' be charged to attract specified waste tonnages
to the landfill system and will identify if th~e i!!G°dii;lEfffbm this level of tipping fee can be expected, when
combined with other income, to meef;the;1finanCial obligations of the landfill system.
lT 1~L. ~
I I '"""if"
The specific subtasks sl;l,~l,l 1inclqc!.e the fClllowing:
"'"'. "-c~jt ,, i~~~
1. The Supply c>rSolid Waste
~t l~~f.~1.
a) rtA review t r.the supply of solid waste will be undertaken to determine the amount
':of solid;waste being generated within the County. This will be accomplished, in ~p·att, by reviewing the current disposal records of the County of Orange. The
purpose will be to identify a current per capita generation rate.
b) A review will be made of the latest population projections for the County for the
purpose of determining the current solid waste generation rate per capita and
identifying the trends which may have developed with regard to changes in the
per capita rate.
c) A survey will be undertaken of the tipping fees being charged at alternative
disposal sites outside the geographic boundaries of the County. A comparison
will be made of the projected cost of disposal at such sites, including the cost of
transportation versus the cost of disposal to the landfill system.
d) A review will be made of seasonal fluctuations in the generation of solid waste.
2. Source of Solid Waste -A review of information obtained from the County and other
sources regarding the potential sources of solid waste to the landfill system by category,
absent the enactment of flow control, will include consideration of:
a) The quantity of municipal solid waste generated by the cities, the commercial
sector, other incorporated areas and the unincorporated area of the County.
b) The status of privately owned alternative disposal facilities within an
economically viable hauling distance of Orange County, both in operation and
in various stages of planning.
Page 3
c) A determination of the anticipated hauling distances for current service
recipients of the landfill system, and identification of the current transportation
costs which the private haulers are experiencing.
Task 3 -Review and Analysis of Project Costs and Revenues
The Engineer will review the projected capital costs ~n~ operating and maintenance expenses of the
System with the Districts' and its design engiA·eerstlO~identify ,if such costs have been prepared in .,..~ .. ! ]? accordance with generally accepted enginee ·n prac!rce~_ a,fl'd are reasonable for the purposes of
financing. ~ ~'.0"f'
The Engineer will estimate the required le~e ¥ .. P-_erating revenues associated with tipping fees
necessary to pay operating expenses and~~~hseryice on bonds to be issued, and identify the level
of interest income on reserve funds, ·lba~ed~'.Ot;l1olnformation provided by the Districts. All of this
information will be utilized to determip e th1 ov~~ll economics of the solid waste management system.
_:' !!l'.1! :!ii·
Based on available inforrr,iil~i?n; Jt,l_~i;_Engine·er will develop a series of sensitivity analyses of projected
operating results, including ftleJeve,Coqipping fees and service charges required to allow the Districts
to meet the cost of the op~ratlr;ig'-cand maintenance costs of the landfill system and to make the annual
debt service payments. This af\alysis will serve as the basis for the projected operating results to be . • ..1. included in the offering docum~ts for the financing program.
fir!Jgj' .I-I:
Projected operating'1~~ults-Will be developed which will include consideration of operating revenues
from tipping fees and interest income on reserve funds, annual operating and maintenance expenses,
and annual debt service payments.
1. This analysis will be undertaken in close coordination with the Districts, who will provide
information concerning the size of the debt service reserve fund, the need for any
reserve and contingency funds, interest rates on the bonds, interest earnings on the
reserve fund during the construction period, and debt service coverage requirements.
2. Projected operating results will be developed for use in the offering documents and
projections of operating results for the life of the landfill system will be developed.
Task 4 -Review of Landfill Design
The Engineer will review landfill design parameters, and the projected site volumes for each landfill in
the system. The review will include the following:
1. Review information provided by the Districts regarding the current size, condition,
location, and the present use of the landfill sites.
2. Review the design of the landfill system, including construction; surface water drainage
control; groundwater protection control; leachate generation collection, treatment, and
disposal; and gas migration control for each landfill site.
3. Review the Operating Plan for the landfill system.
Page4
4. Review the basis for the estimated useful life of the landfill system.
5. Review the construction schedule for the landfill system.
6. Review Closure Plans for each of the landfills.
7. Review the financial obligation to admini~tlr closed landfills.
'.ffib .
8. Review the potential financial natfil"itY regaffdi_ng ~r:a-eironmental effects of the existing and
closed landfills. -"'l~lj,¥
__ ""p erating Permits of the Project
The Engineer will review the status of ~ll required i~vironmental and operating permits required from
federal, state and local agencies to _gQ'nstr;µct and operate the components of the landfill system. The
Engineer will address the present s~atus @Lcompliance for each of these permits.
' , -="~ ;r. "I ---~mp,. jC'
For any permits which h~Je-Tiot ~~q· Qbtained at the time of a financing transaction, the Engineer will
provide an opinion as tq ,th'e:.fl~elihood, from a technical perspective, of obtaining such permits. A
review will be made of ·pendin{;f~d/or future changes in environmental legislation and requirements
which could impact the operation of the landfill system.
Task 6 -Assumptio·ns,anci11bpinion
The Engineer will provide Opinions and Conclusions on matters customarily provided in "Independent
Engineering Report," which would be included in offering documents. This will include a detail of all
the principal Assumptions and Considerations used to arrive at the Opinion and Conclusions.
Task 7 -Preparation of Report
The Engineer will prepare up to four (4) drafts and one final copy of the Engineer's Report setting forth
the principal findings, conclusions, and summarizing the Engineer's review and analyses. The Report
will need to be signed by a registered engineer licensed in California. The Report will be prepared with
a scope, and in a format suitable for inclusion in offering documents.
Task 8 -Presentations
The Engineer will attend meetings while preparing the Report. The meetings may include "all-hand"
finance meetings, meetings with Districts' staff, public hearings and meetings with the rating agencies,
bond insurers and conference calls with the prospective bond purchasers.
2.1 Engineering Qualifications
The Districts will select the firm which, in its sole opinion, is most capable of performing the services
described in this RFP. To be considered for the work, a proposer must demonstrate knowledge of and
experience in similar projects.
Pages
The Districts reserves the right to investigate the qualifications of all firms under consideration and to
confirm any part of the information furnished by a proposer, or to require other evidence of managerial,
engineering or technical capabilities which are considered necessary for the successful performance
of the contract.
3.0 Proposal Contents
.,¥,,. _,,/
All proposals shall be in the format described bej()w.-1tr.io'~der to ensure that each proposal is reviewed
and scored proper1y, it is important that eactlJ>roi:>,i9sei:~fd!!q~ii the format with care. Proposals should
be as brief and concise as possible, respor::i~~ ·are not to~ exceed twenty (20) pages. Proposals
exceeding the page limit shall be deemed non~resppnsive . Lists and tables summarizing experience
may be provided in appendices not counted 6nder ~:""appropriate page limit:
3.1.A.
A.
B.
Cover Letter
Qualifi~tions of the_. Fitm "'~t
1. Expener;!ce ~ ::;;:! ..•. -
2. Engin~~,rl!JQ G~t~~'~ """ ·
3. Assigned Professiaiilals
4. Recommerade~Project Approach
Cover;Letter
ITd.
The cover letter sho~ld1~nq_fe'xceed three (3) single-spaced pages and should be signed by a principal
or officer of the proposing firm. The letter should summarize the major points contained in the proposal,
as well as provide the name and phone number of the key contact person. The cover letter should be
signed by an authorized representative of the firm who may contractually bind the firm and negotiate
on behalf of the firm. Please indicate that the proposal is valid for 90 days.
3.2.B. Qualifications qf the Finn
For a proposal to be considered, a firm must respond to the following questions:
B.1. Experience
This section shall describe the firm and its experience relevant to the Districts' needs for the
project. It shall include a description of the firm's past or current assignments which
demonstrate experience as an independent feasibility engineer for projects similar to the
Districts' solid waste system financing program.
1. Provide a brief description of your firm, including the organization of your firm. Include
a description of the lines of authority and interrelationships.
B.2. Engineering Criteria
1. Describe your experience with solid waste management system and project financing
programs.
Page 6
\
'
2. Provide descriptions of projects you have performed which are similar in character and
nature to this project.
3. Describe your experience with development of Independent Engineering Reports for
inclusion in offering documents for bond financing transactions.
4. Describe your experience with wast · ,eirm analysis and projections for solid waste
management systems.
B.3. Assigned Professionals
This section shall include a staffinQ,R#an arr _sa)etter signed by a principal or officer of the firm
to guarantee that the key personn.~l-in~l9!ted . .irf the organizational chart will be assigned to this
project unless their employment1ls tel11li'pated. If substitutes or back-up personnel are planned
on a contingency basis, they;6s'hould bEfmdicated on the organization chart. #l.. . ::--
rl l---"-
1. ln~i.tate th~opfofeslrorials from your firm that would be assigned to the Districts' y...!.,..,.. f r· solicj: waste Q1an_agement system financing program, their home office location,
their role~~and their project hours as a percentage of your team's effort. Who will
!>e' the ino.i'<i,dual that would have primary responsibility for executing the Districts
·e rproject? "' Provide brief resumes for each, emphasizing recent relevant solid ~rtw~s.te ~anagem.ent and independent engineering experience; especially recent
~S,~IJfo'm1a expenence.
2. Provide three, and only three, client references for the key professionals
assigned to this project. Indicate the names, telephone numbers and projects
completed for each ·reference.
B.4. Recommended Engineering Approach
Discuss your firm's recommended approach to the project. The Districts is seeking firms that
can demonstrate a broad understanding of, and background in issues relevant to developing
and implementing a financing program for solid waste management systems.
Proposals which do not meet these qualifications will not be considered beyond
preliminary evaluation.
3.3 Compensation
Please provide your total proposed project cost broken down by approximate hours for each
task. Include hourly rates for all classifications assigned to the projects.
Page 7
3.4 Acceptance of Terms and Conditions
4.0
4.1
Each proposal must include a statement signed by a principal or officer of the firm, indicating
that the submitting firm agrees to meet the conditions outlined in this RFP together with
attachments. If any qualifying conditions are required, they should be specified in this signed
statement.
Technical Proposal Evaluation Proce~$s i ,
The overall evaluation process will be l~~9~e}~$-'f>;~posal Evaluation Team {the "Team").
The evaluation criteria and weightin_gl~wl!kbe the sole basis for determining the technical
acceptability of proposals. The tee nicaf. pr:§:P.osal should be specific and complete in every
d t ·1 ~;· e a1. ,. ~~· ,-'
The proposers, whose writtetl prgposals are determined to be within the competitive range by I. . the Team, may 'be asked to enter,~ioto contract negotiations. Upon evaluation of the proposals
and outcome of negotiatidras, the"feam will make a recommendation for contract award.
. •I· ;i.. '\a1'•!j;!.
The Districts may: or• T ::r
.1·
'c 1. .#Reject a~y or all proposals.
2. ~1:1ss~e $l!lbsequent requests for proposals.
3. ··· µ,§...,,~lltel the request for proposal
4. Appoint alternate members of the Team.
5. Remedy technical errors in the request for proposals.
6. Approve or disapprove the use of particular firms.
7. Establish a short list of proposers eligible for interviews after review of written
proposals by the Team and consideration of its recommendations.
8. Modify any requirements contained within the RFP and request revised
submittals from proposers determined to be within the competitive range.
9. Negotiate with any, all or none of the proposers.
10. Solicit best and final offers from all, some or none of the proposers.
11. Award a contract to one or more proposers.
12. Accept the written proposal as an offer, without negotiation and issue a notice
to proceed.
This RFP does not commit the Districts to negotiate a contract, nor does it obligate the Districts
to pay for any costs incurred in preparation and submittal of proposals or in anticipation of a
contract. The Districts reserves the right to contract with any of the firms responding to this RFP
based solely upon its judgment of the qualifications and capabilities of that firm.
No information relating to the results of the RFP process will be released until after the
recommendations by the Team.
4.2 Proposal Evaluation Criteria
The criteria for evaluating the proposals includes, but is not limited to the following:
Page 8
A. Experience of firm in successfully completing similar projects.
B. Experience of personnel to be assigned to the engagement.
C. Approach to project.
D. Schedule.
E. Cost.
5.0 Role Definitions:
A. Firm's Responsibility
B.
".Jn:iE' . The selected firm shall,1lt.1~1filL.t ~ necessary professional, technical and clerical
personnel to provide s~r\iice.:..S~;9uired .
The selected firm,..wJll aRP,o[!lM:md make known to the Districts a Project Manager who
will be re.~.Pqvsible ~9Lall 1cci°ordination between the Districts and the Engineer.
Districts' R~:o'ns;Jfilt ·~-"" ~.--,
The Qistricts shall1provide guidelines for the subject services .
. f.>
Steve' KoZ'a·k~ Financial Manager, shall manage the project for the Districts.
6.0 Prohibited Activities
6.1 PROPOSERS, THEIR AGENTS AND/OR ASSOCIATES SHALL REFRAIN FROM
CONTACTING OR SOLICITING DISTRICTS' OFFICIALS REGARDING THIS RFP
DURING THE SELECTION PROCESS. FAILURE TO COMPLY WITH THIS
PROVISION MAY RESULT IN DISQUALIFICATION OF THE PROPOSER.
7.0 Proposal Submittal
A complete submittal will consist of an original and ten (10) copies of the proposal documents.
All submittals must be received and time stamped by the Districts Office of Contracts, at the
address provided below no later than 4:00 p.m. local time on . Proposals
received after 4:00 p.m. will not be considered. FACSIMILE COPIES WILL NOT BE
ACCEPTED.
County Sanitation Districts of Orange County
Attn: Steve Kozak, Financial Manager
10844 Ellis Avenue
Fountain Valley, CA 92728-8127
Page 9
8.0 Additional Information and Changes
9.0
All requests for additional infonnation should be in writing and sent to the address above. No
oral modifications of this RFP shall be valid. Any modifications shall be written by RFP
addendum, and signed by the Districts' Director of Finance.
Confidential Data
.Jiu. ~ ' Proposer shall clear1y mark each p~ge of." ropg~~I that contains trade secrets or other
c~nfidential ~mmercial _or ~nancial l~feJl"ation wtll'ch th~ prop?ser believe~ should ~ot_ be
disclosed outside of the Districts. No part-iaf, any proposal will be disclosed outside the D1stncts
prior to contract award. ·F ~
Page 10
INDEPENDENT ENGINEER SELECTION SCHEDULE
Event
Request for Proposals are mailed to Distribution List
Pre-proposal conference to Q!3 held .~t 10:00 a.m.
1.f_lr ,,.µ:t•~~LJ'~ . 4"
~-=:i-E"
Proposals are due at the DIS ' ts by 4:00 p.m .
..;;r ff
Districts' Review Cocnm1 e~l ~y.1ews proposals and develops short list of
firms to be interv\~wed for consideration by Districts' Finance and Human
Resource Committee r ,,
:.~ 4=' Distri~_§'', Fina~C;e. add1f:iuman Resource Committee considers Review
Comrrtitt"ee recdtnrljlendation and determines short list of firms to be
inte~i~weq~~s,1'!/ell as composition of Selection Committee.
r~
Olstricts' Selection Committee interviews short list of firms, and makes
seleciiOR Of firm. '.<!:·-.---
Joint Boards approve selection of Independent Engineer.
Page 11
Proposal Requirements
Request for Proposals (RFP)
Selection of Underwriter(s)
For ,'1,
Solid Waste Managemen~~~y~te'r'n Fi~ancing Program
1.0 General Information
1.1 Introduction
;-; ..Ji? !-
The County Sanitation Distrjcts 01f Qr11nge County is proposing the formation of a county-
wide Solid Waste: Manag,~m~nt Sanitation District to assume the solid waste authority for
waste disposal and landfill management now governed by the County of Orange. The
goal is to increase local contror of the waste management system by establishing direct
local governance-by theLcustomers of the waste disposal system. The new district would
be formed un~~r Califo~ia Health and Safety Code 4700 et seq, and would be governed
by a 33 memBer board1-epresenting all cities and sanitary districts in the County. By
restructuring gQ:vemance of the system, the communities using the local disposal system
would control the operations, management, finances and liability of these disposal
facilities. The new district would be called the Solid Waste Management Sanitation
District of Orange County (SWMSD-99).
All financial projections and cashflow analyses that support the concept of the new solid
waste district are predicated upon the use of a capital financing program to both finance
acquisition of the system and fund the capital improvement program (CIP) for the
SWMSD-99. Currently, the County is paying for its landfill CIP on a pay-as-you-go basis
because it is difficult for the County to secure debt financing without a secured waste
stream. Pay-as-you-go financing directly impacts the system's rates, with significant
increases being needed in years in which large capital projects are planned. The new
SWMSD-99 would use a capital financing program for the system acquisition and the
CIP, which would allow for a more predictable user rate pattern.
It is important to note that the financing would be secured solely by a pledge of revenue
based on the receipts of the waste management disposal facilities (landfill tipping fees).
No wastewater revenues or reserves would be used or pledged to support the solid
waste financing program. Also of interest is that the capital financing program strategy is
based on the assumption that investment grade ratings would be required for the solid
waste issue. To ensure this, a minimum of 90% flow control is required.
In preparation for the potential landfill acquisition, staff is initiating the process to
establish a financing team to develop the capital financing program. On February 14,
1996 the Joint Boards of Directors approved the Memorandum of Understanding (MOU)
regarding the terms and conditions of acquisition of the County's waste disposal system
and directed staff to submit the MOU to the County of Orange. Staff submitted the MOU
on February 23, 1996 and the County is currently in the process of considering the
proposal. Initial Board of Supervisors review is scheduled for March 12, 1996.
While staff feels that it is prudent to begin the background work for the capital financing
program, the need for the team is entirely contingent on the County's consideration of
the MOU. If the County responds favorably to the MOU and agrees to its tenns, the
Districts and the County will enter into a 60-day closing period to finalize the deal.
However, if the County rejects the Districts' offer, the process would likely end at that
time. The proposed solid waste managemenLSYcS.fem financing program and the use of
!he financing team professional is conti~gent~p'~,he CoY,nty and the Districts entering
into an agreement for the transfer oft , e waste·;d~~ifa,Vsystem.
1.2 Intent of Request for Proposal
The Districts are seeking proposals!~~m inns qualified to serve in the capacity of senior
managing and/or co-managing .i:NldefWiit~r(s) to provide underwriting services for
proposed solid waste management sys_fem transaction(s).
. $ ,.,
[. t:lr{.!-
The Dis~ricts, in i~~.o:.~_ple~~~1:~tiolll, reserv~s the right to detennine the number of
underwnters and the._i:ole ·of·each underwnter. ~;~ ... l~
The Districts, in;its ~ol~~is~r;tion, reserves the right to detennine the ultimate
composition of.the underWrlting team based on the proposals that are received.
Regardless of'the ultirrrate composition of this underwriting team, the Districts, in its sole
discretion, alsg re.serves the right to establish a selling group of any composition for any
future transaction if it deems that such a selling group, for policy and/or financial
reasons, is beneficial to the Districts.
All respondents will be considered for the senior, book running manager, unless
otherwise indicated, and the selection of co-managers will be from the candidates that
were not selected for senior, book running manager or have otherwise indicated that
they only wish to be considered for a co-manager role.
2.0 Scope of Work
The Districts is seeking the services of qualified underwriters to assist the Districts
develop and implement a solid waste management system capital financing program. It
is anticipated that the senior book running manager will be involved in all aspects of the
financing, including the development and execution of the technical, financial, marketing
and credit strategies.
The duties of the book running senior-managing underwriter shall include, but not be
limited to, the following:
A. Work with the Districts' staff, General Counsel, bond counsel, financial advisor,
and feasibility engineer to develop and evaluate the legal and financial structure
for proposed solid waste management system transaction(s). Review and
evaluate financing alternatives available to the Districts for the solid waste
management system, and make recommendations on specific financial products
to meet the Districts' capital financing objectives at the lowest cost and consistent
with the Districts' risk profile.
Page 2of14
B.
c.
D.
E.
Assist with the selection of financial services necessary for proposed
transactions.
Work with the Districts staff to prepare the strategy for, and support presentations
to rating agencies, bond insurers and investors, as necessary.
Market the bonds at the lowest possible interest cost.
dlH" . .,,_,,rtrlil' .
Development and Execution o')gr -t-~~:tg Underwnters
The senior underwriter(s) will .·spons1 l~ffor the development of an
Agreement Among Underwrite , {&U) that is consistent with the objectives of
the Districts. This AAU will b.e· disla~~!~d at least one week prior to the sale of
any bonds. We have concl . hat;!ltne following formulas for gross spread,
participation, allocation/brde .. J~l:fllity, and retention will best serve the Districts
goals. Please ensure~tha~ the appropriate documents reflect this position.
~ ~ _d~-
1. Gross Sprel:id. Th~Tiistricts reserves the right to review and approve all
fees and lfxp~ ses ~.nd request their substantiation. -:-' -~i""·
a.""'" Ea : y in the financing schedule the Districts advisor will establish
""' expense guidelines with the book-running senior manager. The expenses
co~p'~n_ent o.f~tne underwriting spread r:nu~t be fi_nalized by the boo_k:running
semor ... man-ager and approved by the D1stncts pnor to the day of pnc1ng. In addition~computer expenses and syndicate member expenses must be
supported with documentation. An estimate of the expense component must be
provided to the Districts by the book-running senior manager no later than two
days prior to the day of pricing. In general, the Districts does not reimburse the
book-running senior manager for clearance fees.
b. Ear1y in the financing process the Districts will discuss with the
book-running senior manager the maximum underwriting risk component which
will be considered after the pricing of the securities is completed. There will be
no consideration of the actual underwriting risk component, if any, of the
underwriting spread until after the order period closes. At that time, the Districts,
its financial advisor, and the book-running senior manager will review the book of
orders and discuss the need for including underwriting risk in the underwriters'
spread for any unsold bonds. If it is determined that underwriting risk would be
appropriate, the Districts will determine the level of that fee, not exceeding the
previously-set maximum. There will be no negotiation of underwriting risk after
the verbal award has been given by the Districts to the syndicate. Any
underwriters' risk component must be approved by the Districts.
c. The Districts will set the management fee and how it will be
distributed early in the financing process. In general, the management fee will
not necessarily be distributed to the managers on the basis of liability, but on
management work performed. In certain cases, it is possible that there will be no
management fee.
Page 3of14
d. Maximum takedowns will be set by the Districts in consultation
with the financial advisor, and the book-running senior manager. Final proposed
takedowns for all maturities must be included as part of the proposed pricing
tenns faxed by the book-running senior manager to the Districts at least one day
prior to the pre-pricing conference call. All takedowns are subject to review and
approval by the Districts.
2. Allocation of Bonds. Ear1y in the financing schedule the Districts will
detennine the general bond allocatiO'Jfu.gq,,.fS the Districts wishes to achieve for
the _Particular financing. These ~9als~l!.f.e. disqu~sed with the boo~-running.
senior manager. As the financing st,ructUre, 1s finalized and the credit market mto
which the Districts' bonds will ~"~old is ~tilated, the Districts, its financial
advisor, and the book-running ~!= manager will discuss how the Districts bond
allocation goals will be met. (' · ring and sale by the managers and in the
dealings among the man~ge •' owing procedures should be followed: ,_-• ff r
a. Reten.t~n ~houlq · e given out three business days prior to pricing.
The amount of retention .should· be up to 25% of the term bonds. In addition to
the tenn b:onds,,a::riitention~may be given out on serial maturities dependent
_[ --TO:l.
upon market ori diti'ons, A consensus scale and structure will be discussed at
that time. 9·.1
-* .[
""b. Nb'individual manager shall receive more than 50% of any
desigO,ated order. Designated orders for bonds in excess of $1 million shall be
allocat~df.:lmong at least three other managers.
c. Priority of Orders:
I. Firm Net Orders Up to 50% of Finn's Liability
ii. Group Orders
iii. Net Designated Orders (As per MSRB Rules)
iv. Member Orders (Filled on a percentage basis up to
liability)
All Finns will be able to fill priority orders up to 50% of their liability
position. For example, if firm "A" has a $10 million liability position and $2 million
in initial retention, such firm would receive bonds to fill $3 million in additional
priority orders.
d. Firms will provide the name of their account to the Districts, at the
time of the order.
6. Make presentations to the Districts' staff and Board, as necessary.
7. Maintain and support a secondary market in the Districts' securities.
Page 4of14
2.1 Underwriting Qualifications
The Districts will select the firms which, in its sole opinion, are most capable of performing the
services described in this RFP. To be considered for the work, a proposer must demonstrate
knowledge of and experience in similar projects.
Additionally, firms must have:
Adequate financial resources to unde~rite!j:and market the bonds; and
References which can attest to U1e ti" Jlf of the firm's past work and its record in
meeting project time tables.
The Districts reserves the right to investigate ! .
and to confirm any part of the information fu!Jlis
of managerial, financial or technical capa_t>il' ·
successful performance of the contractl · l'
,~'
3.0 Proposal Contents
.. mdlll-
alifications of all firms under consideration -.b~ a proposer, or to require other evidence
· r k 'are considered necessary for the
All proposals shall be in ltte:ifo.rma 1 'e.scribed below. In order to ensure that each proposal is
reviewed and scored propert~1]j~_important that each proposer follow the format with care.
Proposals should be aslbrief ah~. concise as possible, responses are not to exceed twenty (20)
pages. Proposals exseeding trae ''page limit shall be deemed non-responsive. Lists and tables
summarizing experie.tii·c~ may,J)e provided in appendices not counted under the appropriate
page limit: · l:k
3.1.A.
A
B.
c.
Cover Letter
Qualifications of the Firm
1. Experience
2. Financial Criteria
3. Assigned Professionals
4. Recommended Financing Approach
5. Marketing
Statement of Fiduciary Responsibility Standards
Cover Letter
The cover letter should not exceed three (3) single-spaced pages and should be signed by a
principal or officer of the proposing firm. The letter should summarize the major points
contained in the proposal, as well as provide the name and phone number of the key contact
person. The cover letter should be signed by an authorized representative of the firm who may
contractually bind the firm and negotiate on behalf of the firm. Please indicate that the proposal
is valid for 90 days.
3.2.B. Qualifications of the Firm
For a proposal to be considered, a firm must respond to the following questions:
Page 5of14
B.1. Experience
This section shall describe the finn and its experience relevant to the Districts'
needs for the project. It shall include a description of the finn's past or current
assignments that demonstrates experience as a senior-managing or
co-managing Underwriter for issuers similar to the Districts.
1. Provide a brief description of your finn, including the organization of your
public finance department, muoicipal bond department, and sales
organization. Include a 9jscrip.ti§'1 of the lines of authority and
interrelationships. Why~15 ttii.s 6~piz~onal structure advantageous to
the Districts for the proj~?;?'"What-~ysfem of profit center accounting
does your finn use to allo-'1~t~ costs and revenues of the various
municipal bond functio
2. Describe the expene ce-ofy~ur finn as managing underwriter and . . I co-managing !!tiderwrit~.r for the following types of financings since
Ja~,.uary 11. ~h991 .(l'..,;1 . t"''
iJ. n#. _,;~r
a. -,1i!.,_;r~si1cifi:1enn borrowings
b. 1t;:Eong.:Turm debt restructuring
~· Certificates of Participation (COPs)
Variable Rate Securities
Revenue Bonds
:..,,, y=t:'il~"-
"•For each category, indicate the issuer, the role of your finn (as senior
manager or co-manager), the par amount and date of the issue. Select
one example for each of the above categories (a) through (e), and
provide a brief description of the approach taken by your finn in
structuring and marketing that financing.
For each category, using the data from a recognized source such as
Securities Data Corporation, cite your 1993, 1994 and 1995 rankings
(indicate both credit to senior book running manager and credit to each
manager).
3. Has your finn recently (in the past three years) been the subject of an
investigation by the SEC, NASO, NYSE or any other state or federal
organization relating to the municipal industry? If so, please concisely
describe the investigation; including its nature and purpose, and its
outcome.
B.2. Financial Criteria
1. Indicate the finn's current total capital and net capital, and the change
from last year.
Page 6of14
2. Because future financings may be of considerable size, it may be
necessary for the senior manager to underwrite the bonds without firm
orders and hold bonds in inventory. Indicate your firm's maximum
underwriting commitment in 1993, 1994 and 1995 and proposed
commitment to the Districts.
3. Over the last three years, what has been the average amount of your
firm's capital allocated to municipal finance operations? Of this amount,
how much has been for negoti~teg-llunderwriting? Competitive
underwriting? Secondary• ariet activities?
~'if~·
4. Describe the ownershiP,,1 ~reClit ra Ira, ,,·capitalization and date of formation
of any subsidiary or afftli4~-tpat is included in your proposal. Describe
the. obl!gation for the):~,~r~nt~~.anizaUon(s) or other entity(s) to guarantee
obligations of the s_t.lb~~~ry);" ·
I ,_, ·•-~~ --J...;;r
8.3. Assigned Profession~!.? t
TI ..,.-
1 ~ ft=~ T.t ..
This section shallTl:fclude-s-'slaffing plan and a letter signed by a principal or
' I officer of th~firm to -guarantee that the key personnel indicated in the orga~izational e~~i;:~ _wHf be assigned to this project unless their emplo~ment is
terminated. If sobstttutes or back-up personnel are planned on a contingency
basis,;!Pey should be indicated on the organization chart.
-CT
1. ~fi-ndi_cate the professionals from your firm that would be assigned to solid
waste management system transactions of the Districts, their home office
location, their role, and their project hours as a percentage of your team's
effort. Who will be the individual that would have primary responsibility
for executing the Districts transactions? Provide brief resumes for each,
emphasizing recent relevant solid waste management and multi-
jurisdictional financing experience; especially recent California
experience. List the NASO, NYSE, and SEC licenses of each individual
assigned to the Districts.
2. Provide three, and only three, client references for the key professionals
assigned to this financing. Indicate the names, telephone numbers and
transactions completed for each reference.
3. Provide a list of three firms and lead attorney that you would consider
using as Underwriter's Counsel.
8.4. Recommended Financing Approach
This component shall provide each respondent an opportunity to discuss the
current issues facing the Districts relative to capital financing for a solid waste
management system, and the potential creative solutions which might provide additional
benefits to the Districts in this regard. The Districts is seeking firms that can
demonstrate a broad understanding of background in financings relevant to solid waste
management system financings from understanding of credit. Demonstrating a clear
comprehension of the relationship of these factors and the ability to integrate them into
Page 7of14
the overall policy directives of the Districts will be a significant factor in being selected as
senior manager(s}. The proposer may submit any innovative ideas it has used
successfully on past projects.
1. Discuss your firm's view on the following issues related to any future bond
transactions or debt restructurings:
a. What steps, if any, should be taken to establish a credit rating for
the solid waste manaQ!:JTl~nt system? What challenges or
difficulties would1 ou Elfittcjpate o~ behalf of the Districts in future
co_mmunication!fiith ftJEf'iiiJ1~_g~gencies? Should all three ratings
(Fitch, S&P, M · ·S) be r~~u!ae·sted? If so, why? If not, why not?
b. How should aJci -. ,,bond program be structured? Should ~1t:::P1o' :I. "l!':::1!=ff';r;7 long-term defil'.be fixed ""or variable rate? F~l:~irr
c. What dihe1:_'(.mique ideas or suggestions might your firm offer to
proviffe n~w~or-alternative funding sources for the proposed solid
.jg~=1 wa:t.e management system financing program, including any cash
""""" ;JQ flow ~or=yield enhancement techniques?
1. "'·-8\~rr ..
d:-ThJ';Districts wishes to retain underwriting firms with broad
"' municipal finance experience. Does your firm have a group that
8.5. Marketing
~specializes in structuring and marketing derivative security
'"" · products such as interest rate swaps, inverse floaters, etc? If not,
what has been your firm's experience with the use of derivative
products? Do you recommend that the Districts issue derivative
securities such as structured yield curve notes or enter into
interest rate swaps to lower its interest cost? What target savings
should the Districts consider appropriate before utilizing these
products? Describe your proposed derivative securities structure,
including a complete discussion of the benefits and risks of this·
program to the Districts.
1. Assuming current market conditions, offer a proposed structure on a $100
million new money solid waste management system transaction using
terms and serials. Develop alternative maturity and redemption
schedules. What call features would your firm propose, and what effect
will these call features have on the issue's pricing? Given the strength of
the Districts' bonds, how short of a call can the Districts sell at no cost?
2. Describe your strategy for marketing the bonds. What do you see as the
appropriate mix between institutional and retail sales? Please describe
your firm's institutional and retail distribution capabilities. What portion of
the bonds do you expect to be placed with California investors, and what
portion will be sold nationally? Would your firm be willing to give
California retail investors the highest priority? Would this be helpful in
Page 8of14
3.3
producing the lowest borrowing cost possible? If so, how would you
propose maximizing the retail investor demand?
3. Describe your commitment to and method for maintaining a secondary
market in the Districts' securities.
C. Statement of Fiduciary Responsibility Standards
1. If at any time after January 1, ,;1.9~2. your firm participated in any financial
transaction with the Coujlty of~2!'~,nge, a!'y agencies governed or
controlled by the Counw-of Qrang~,::.af1.~/or the Orange County Treasurer,
please provide the foll®l g inforthatwn for each transaction: '•
a. F~r ~ebt and:~~fnila~, ~ ~y.ances: the date and amount of each; the
pnnc1pal padi~stand Jhe role of your firm.
,. "' ~··"' tlr' r. ~t:-
b. For in,~estr;ients_; the date and amount of each; the type of
investment:· ihe1-principal parties; and the role of your firm.
~'*=-;:-7,.,...~. ""'::'-"
Proposals which-Uo1·not meet these qualifications will not be considered beyond
preliminary evaluafion~i· =t
Compensatior:f
=4~!· '
Please provid~tl.your't6°tal proposed gross spread on a not-to-exceed basis for a $100
million financingusing the structures provided below. Separately identify the various
components.
Traditional Certificates of Participation:
Refunding Certificates of Participation:
Revenue Bonds:
In submitting your cost/price proposals for the outlined transactions, please refer to the
following guidelines:
Management Fee: The bid for this fee will be on a firm basis. The Districts
expects that the bid for a management fee will remain constant over the life of the
engagement. Indicate that this fee is firm for the next two years. The bid should
be solely for the investment banking services of the bidder and should not include
any management fee for either co-senior or co-managers. While for purposes of
this RFP, the Districts has asked bidders to assume a $100 million financing, this
fee is not subject to further negotiation regardless of the potential size of future
financings.
Takedown: The Districts recognizes that this fee will. be determined by market
conditions at the time of pricing. Please provide an estimate of your proposed takedown
for the above referenced transactions assuming current market conditions.
Page 9of14
Underwriter Risk: The Districts recognizes that this fee will be detennined by market
conditions at the time of pricing. Please provide an estimate of your proposed risk for
the above referenced transactions assuming current market conditions.
Expenses: The Districts will reimburse the senior manager only for expenses. These
expenses will include: underwriter's counsel, printing, federal funds, CUSIP/DTC, travel,
messenger/mail/fed-ex, and faxing/telephone. Any additional expenses will only be
honored with the expressed consent of the Dlstrjcts prior to the time a transaction is
priced. Indicate any other expenses foG,w hicRlyour finn would seek reimbursement.
The ~istricts v.:m not reimburse bidderf'for _,!ith-ef5o~~-f;llter or word processin.g tim~.
Provide an estimate for the above ref~re ced tran:sact1ons for each expense item hsted
above.
3.4 Acceptance of Tenns and Conditi(:)
1:-:.
Each proposal must include atstat~ment signed by a principal or officer of the finn,
indicating that the submittiTit1 firnf'agrees to meet the conditions outlined in this RFP
together with att~chmen~~.~lf arly;;-qualifying conditions are required, they should be ~ ~--!-specified in this slgm~d_statem~nt.
..;_ ;;· !-.ii_
4.0 -i~ Technical PrOJ?OSal Evaluation Process
4.1
·? ·r
The overall e~luation-~1rocess will be perfonned by a Proposal Evaluation Team (the
''Team"). Theeval uation criteria and weighting set forth at the end of this section will be
the sole basis for detennining the technical acceptability of proposals. The technical
proposal should be specific and complete in every detail.
The proposers, whose written proposals are detennined to be within the competitive
range by the Team, may be asked to enter into contract negotiations. Upon evaluation
of the proposals and outcome of negotiations, the Team will make a recommendation for
contract award.
The Districts may:
1. Reject any or all proposals.
2. Issue subsequent requests for proposals.
3. Cancel the request for proposal
4. Appoint alternate members of the Team.
5. Remedy technical errors in the request for proposals.
6. Approve or disapprove the use of particular finns.
7. Establish a short list of proposers eligible for interviews after review of written proposals
by the Team and consideration of its recommendations.
8. Modify any requirements contained within the RFP and request revised submittals from
proposers detennined to be within the competitive range.
9. Negotiate with any, all or none of the proposers.
10. Solicit best and final offers from all, some or none of the proposers.
11. Award a contract to one or more proposers.
12. Accept the written proposal as an offer, without negotiation and issue a notice to proceed.
Page 10of14
4.2
This RFP does not commit the Districts to negotiate a contract, nor does it obligate the
Districts to pay for any costs incurred in preparation and submittal of proposals or in
anticipation of a contract. The Districts reserves the right to contract with any of the firms
responding to this RFP based solely upon its judgment of the qualifications and
capabilities of that firm.
No information relating to the results of the RFP process will be released until after the
recommendations by the Team.
Proposal Evaluation Criteria
1Ti1
;:-r • 1·r<"
The Districts anticipates selecting fi~1JE~t for its"'s~n'ior managing underwriter
positions. All firms not selected as sehto_n,managing underwriter and who requested
consideration for co-manager will be, evaf~ted, for co-managing underwriter positions.
The criteria for evaluating the prQp·or s. inclµCles, but is not limited to the following:
Senior Manager
a.
b.
c.
d.
e.
f.
g
. '\" i.~~ ""' Structure and ra'j~proaar"to s-olid waste management system financings for the
Districts. -,;.,
Demonstrated expenence in successfully structuring and bringing solid waste
management system and other complex credits to mark.et. . .~
Experience, qualifications, location and availability of the personnel assigned to this
engagement.
Marketing strength with institutional buyers and retail investors.
Knowledge, experience and understanding of California solid waste management
credits.
Demonstrated ability and commitment of the firm to underwrite up to a $200 million
bond issue.
Demonstrated mark.et presence in underwriting California municipal debt.
Co-Managers
a. Demonstrated mark.et presence in underwriting California municipal debt.
b. Demonstrated distribution to the California tax-exempt retail securities mark.et.
Page 11of14
c. Knowledge and familiarity with California solid waste management system
bonds.
d. Experience and qualifications of the personnel assigned to this engagement.
e. Structure and Approach to Districts' solid waste system financings.
5.0 Role Definitions:
A. Firm's Responsibility
The selected firm(s) shall .-fu~i~.111 the necessary professional, technical and
clerical personnel to pro~ide~seT'tlg.es required.
'i
The selected firm(sl will appo,iht and make known to the Districts a Project
Manager who wit(pe resp=on-Sible for all coordination between the Districts and
the Underw~ter.
B. District~! -Respo~~ility
The Dlistricts shall provide guidelines for the subject services.
f ...... -1 f l "--7 , I t
Steve KOZak, Financial Manager, shall manage the project for the Districts.
6.0 Prohibited Activities
6.1 PROPOSERS, THEIR AGENTS AND/OR ASSOCIATES SHALL REFRAIN FROM
CONTACTING OR SOLICITING DISTRICTS' OFFICIALS REGARDING THIS RFP
DURING THE SELECTION PROCESS. FAILURE TO COMPLY WITH THIS
PROVISION MAY RESULT IN DISQUALIFICATION OF THE PROPOSER.
7 .0 Proposal Submittal
A complete submittal will consist of an original and ten (10) copies of the proposal
documents. All submittals must be received and time stamped by the Districts Office of
Contracts, at the address provided below no later than 4:00 p.m. local time on ___ _
___ . Proposals received after 4:00 p.m. will not be considered. FACSIMILE COPIES
WILL NOT BE ACCEPTED.
County Sanitation Districts of Orange County
Attn: Steve Kozak, Financial Manager
10844 Ellis Avenue
Fountain Valley, CA 92728-8127
Page 12of14
8.0 Additional Information and Changes
All requests for additional information should be in writing and sent to the address
above. No oral modifications of this RFP shall be valid. Any modifications shall be
written by RFP addendum, and signed by the Districts' Director of Finance.
9.0 Confidential Data
Proposer shall clearly mark each page of its BJ:ORO'Sal that contains trade secrets or
other confidential commercial or financial infQtli'lation which the proposer believes should
not ~e disclo~ed_outsi~e of the Distric~~: No p=aftff~!J¥''proposal will be disclosed
outside the D1stncts pnor to contract awai:d. "li·~-
J!IWPDOC\FINICRANEIFPC.MTGIFAHR.
Page 13of14
UNDERWRITER SELECTION SCHEDULE
Request for Proposals are mailed via Certified Mail to Distribution List
Pre-proposal conference to be held at""1o:OO a.m.
Districts' Review Committe:e re 1ews proposals and develops short list of ~ :.L. .. ....:..:..:.:.J firms to be interviewed foroc-oi;ts1Cleration by Districts' Finance and
Personnel Committee" ·· ~ · I' .I -;.r ~·
Districts' Finance anirPei-sonnel Committee considers Review Committee ,,,_..,.;....,. -1•=""""'1-recoril"'~n.datj~li: and determines short list of firms to be interviewed as well
as compo'Sitiorl'cof Selection Committee . . ,__,,:?-
I'
Districts' Selection Committee interviews short list of firms, and makes ~election . of firm( s).
Ll
JolnfBoards approve selection of Underwriter(s).
Page 14of14
·~
I
Proposal Requirements
Request for Proposals (RFP)
Selection of Financial Advisor
For
Solid Waste Management Syste!P Financing Program
1.0 General lnfonnation
1.1 Introduction
,I
The County Sanitation Distri9.f'~ ot Ora~.ge County is proposing the formation of a county-
wide Solid Waste Management Sanitalion District to assume the solid waste authority for
waste disposal anfi·r1andfflt:m.ana~ement now governed by the County of Orange. The
goal is to increas-e·loc~,f cdntjiol of the waste management system by establishing direct
local governance ~-t~e~stdmers of the waste disposal system. The new district would
be formed under'Califo~if'Health and Safety Code 4700 et seq, and would be governed
by a 33 member board representing all cities and sanitary districts in the County. By
restructuring rQ.~e~~D~ of the system, the communities ~si~~ the local di~posal system
would controlii.ll'le ·operat1ons, management, finances and hab11tty of these disposal
facilities. The 'new district would be called the Solid Waste Management Sanitation
District of Orange County (SWMS0-99).
All financial projections and cashflow analyses that support the concept of the new solid
waste district are predicated upon the use of a capital financing program to both finance
acquisition of the system and fund the capital improvement program (CIP) for the
SWMSD-99. Currently, the County is paying for its landfill CIP on a pay-as-you-go basis
because it is difficult for the County to secure debt financing without a secured waste
stream. Pay-as-you-go financing directly impacts the system's rates, with significant
increases being needed in years in which large capital projects are planned. The new
SWMSD-99 would use a capital financing program for the system acquisition and the
CIP, which would allow for a more predictable user rate pattern.
It is important to note that the financing would be secured solely by a pledge of revenue
based on the receipts of the waste management disposal facilities (landfill tipping fees).
No wastewater revenues or reserves would be used or pledged to support the solid
waste financing program. Also of interest is that the capital financing program strategy is
based on the assumption that investment grade ratings would be required for the solid
waste issue. To ensure this, a minimum of 90% flow control is required.
In preparation for the potential landfill acquisition, staff is initiating the process to
establish a financing team to develop the capital financing program. On February 14,
1996 the Joint Boards of Directors approved the Memorandum of Understanding (MOU)
regarding the terms and conditions. of acquisition of the County's waste disposal system
and directed staff to submit the MOU to the County of Orange. Staff submitted the MOU
on February 23, 1996 and the County is currently in the process of considering the
proposal. Initial Board of Supervisors review is scheduled for March 12, 1996.
While staff feels that it is prudent to begin the background work for the capital financing
program, the need for the team is entirely contingent on the County's consideration of
the MOU. If the County responds favorably to the MOU and agrees to its terms, the
Districts and the County will enter into a 60-day closing period to finalize the deal.
However, if the County rejects the Districts' offer, the process would likely end at that
time. The proposed solid waste management system financing program and the use of
the financing team professional is contingent on the County and the Districts entering
into an agreement for the transfer of the waste disposal system.
1.2 Intent of Request for Proposal
The Districts are seeking proposals fror.o'lifirm,Sd!9,~lified Jo serve in the capacity of
financial advisor for the proposed soli!:I waste man.§g~ment system transaction(s).
~t~;:-
2.0 Scope of Work
The financial advisor shall be av.aii~~.:l~ .e ermined by the Districts to provide
analysis, consultation and support ta r de~l1opment and implementation of the solid
waste management financingpro~ra"?.r The financial advisor may be requested to
provide assistance staff in the followi'ng areas: _.n.lii· -·~
A. Propose -~f=1ve so .. :ons to funding, financing, cash flow and other monetary
challenges'T~la~e~Jo""tfie solid waste management system financing program.
~I ~~~
B. Assistf'staff in s,Pliciting proposals for bond counsel, underwriter(s), issuing and
paying:O:~ge1JlS', 11iquidity providers, trustee, printers etc., if necessary. ~~jrli
C. Assist in the structuring of a bond issue including: rating agency preparations,
the size and timing of bond sale, bond callability, bond maturities, reserve fund,
capitalized interest, and other matters which may assist in obtaining the lowest
interest cost for the issue. ·
D. Provide advice, written analysis and assistance regarding the benefits of possible
credit enhancements.
E. Prepare written reports before and after pricing indicating market comparable
(including gross spread, management fee and takedown comparables) and
overall market conditions.
F. Serve as the Districts' agent with respect to the pricing of the bonds and
minimizing the costs of issuance.
G. Provide oral and/or written updates to the Finance, Administration and Human
Resources Committee and the Joint Board of Directors, as required.
H. Assist the Districts staff in the review of all bond allocations to assure equity
among the co-managers and assist in the preparation of a written report
supporting the bond allocation process.
I. Other matters as needed.
Page2
2.1 Financial Advisor Qualifications
The Districts will select the firms which, in its sole opinion, are most capable of performing the
services described in this RFP. To be considered for the work, a proposer must demonstrate
knowledge of and experience in similar projects.
The Districts reserves the right to investigate the qualifications of all firms under consideration
and to confirm any part of the information furnished by a proposer, or to require other evidence
of managerial, financial or technical capabilities which are"considered necessary for the
successful performance of the contract. "
3.0 Proposal Contents
All proposals shall be in the format describe .. · I , . order to ensure that each proposal is
reviewed and scored properly, it is importa ea_c proposer follow the format with care.
Proposals should be as brief and concise as p _ ssiBie, responses are not to exceed twenty (20)
pages. Proposals exceeding the pag.e' lilljlft shall' be deemed non-responsive. Lists and tables
summarizing experience may be,,prbvid~dc ip appendices not counted under the appropriate
I. ·t· ·m·, ·,-, i =· page 1m1. -'-'~ . · ; "'1.tl!, '";.-.,ti ·-=
~I
A. Cover Letter,~~"~ .n!: .:-..Jlf'
B. Qualifications of;tme·flrm
1. Exe.~rience 'l'"'--
2. Fin~r:tcial Advisor Criteria
3. As~ighe-d Professionals
4. Recommended Financing Approach
C. Statement of Fiduciary Responsibility Standards
3.1.A. Cover Letter
The cover letter should not exceed three (3) single-spaced pages and should be signed by a
principal or officer of the proposing firm. The letter should summarize the major points
contained in the proposal, as well as provide the name and phone number of the key contact
person. The cover letter should be signed by an authorized representative of the firm who may
contractually bind the firm and negotiate on behalf of the firm. Please indicate that the proposal
is valid for 90 days.
3.2.B. Qualifications of the Firm
For a proposal to be considered, a firm must respond to the following questions:
8.1. Experience
Indicate the experience of your firm for the following types of financing since
January 1, 1991.
1. Short-term borrowings.
2. Long-term debt restructuring.
3. Certificates of Participation (COPs).
Page 3
4. Variable Rate Securities.
5. Revenue Bonds.
For each category, indicate the date of issue, the issuer, the credit ratings and
the size of the transaction.
Using the data from a recognized source such as Securities Data Corporation,
cite the 1993, 1994, and 1995 year to date.;rankings for negotiated issues for
your firm in California and nationally. · ,"'El'"
4lli~
B.2. Financial Advisor Criteria
1. Provide a concise list of the se c~s· and the work products that your firm
proposes to provide to the Qj~Jl;!ct :·. '~,. scribe the overall relationship you
envision in your role as ~rnan~ial:·advisor to the Districts. What unique services or
products would you prpvid~?u Wb~t specific benefits do you feel your team will
bring? ~~ ~ • ~ ~· Jt ·~ ",~-
2. Describe=!l~·proeeS:s your firm will use to understand the Districts' financing
needs and for prop·os'mg appropriate solutions.
m·~..., ·1·
3. Descrit:>~ your fiefn1~· knowledge, experience and resources in tracking and
monitQ'fing the i~-exempt and taxable bond markets (including fixed rate, L".l-'Tt ,_ varia~J~':rate-and derivative products), the swap market, and the government
securfffes"rrfarket.
4. Describe a specific situation(s) where the firm applied their advisory skills and
abilities in the following areas:
A. Responsiveness and attentiveness to clients needs
B. Creative ability
C. Knowledge and understanding of municipal market conditions and trends
D. Analytic capability
E. Oral and written communication skills
5. Cite examples where the assigned personnel have analyzed transactions
proposed to utilize derivatives and have both recommended for and against the
use of derivatives in the transaction. Describe the circumstances and state the
reasons for each decision.
6. How will you ensure that the Districts receive the best price for any bonds,
financings involving swaps and other derivative products? How will you evaluate
the success of these pricings?
Page4
7. Disclose all compensation/fee arrangements (formal or informal) that your firm or
any of its individuals has with the following parties: swap providers, investment
contract providers, verification agents, financial advisory firms, investment
banking firms, any other consultants or financial institutions and law firms.
8.3. Assigned Professionals
This section shall include a staffing plan and a letter signed by a principal or
officer of the firm to guarantee that th~. k~yipersonnel indicated in the
organizational chart will be assign.ed i~~ilis project unless their employment is -~. ·]·"'1" " terminated. If substitutes or badk-u.Q1pe~onnel ·are planned on a contingency
basis, they should be indicated o .'tne orgaoiZ~tion chart.
1.
2.
Indicate the professiodals . . ·;your firm that would be assigned to future
transactions of theJ:ii§1:ticts;·1 !tfeir home office location, their role, and their
project hours as/a Pr(c~~~efe of your team's effort. Who will be the
individual that would ha1ie 'primary responsibility for executing the
Districts' tr~l)sac1i~ry~_;?.='' Provide brief resumes for each, emphasizing
recent relev.~nt CS1ifdmia solid waste management, and multi-
juns~iS.li?n~J ·~n_cincing experience. List any licenses of individuals who
wouldll>;~'·assfgn·ed to the Districts.
:re·· ---..£
.,. ?ij ... ~Provide three, and only three, client references for the key professionals
_:J~assigne'o to this financing. Indicate the names, telephone numbers and
1l!f:~ra.nsactions completed for each reference.
8.4. Recommended Financing Approach
Discuss your firm's approach to the project. The Districts is seeking firms that
can demonstrate a broad understanding of, and background in, issues relevant to
developing and implementing a financing program for solid waste management
systems.
3.3 Compensation
The Districts' expects to receive monthly billings statements from its financial advisor.
1. Given your proposed scope of services and work products, discuss your
proposed fee arrangement. State if your firm is willing to accept a contract based
on a fixed cost not-to-exceed basis. If yes, provide an estimate of that fixed
price. If you propose to be compensated on the basis of time and materials,
provide a schedule of the hourly billing rates for team members, a list of the types
of expenses for which you would expect to be reimbursed, and your estimate of
total fees and expenses.
2. If your firm charges a separate transaction fee, estimate the fees for a bond issue
assuming an issue size of $100 million.
Pages
3. Please indicate all of the financial advisory fees that your firm charged on its (3)
three most recent transactions. Include the date, the name of the issuer and the
type of services performed.
3.4 Acceptance of Terms and Conditions
Each proposal must include a statement signed by a principal or officer of the firm,
indicating that the submitting firm agrees to meet the conditions outlined in this RFP
together with attachments. If any qualifying condjfions are required, they should be
specified in this signed statement.
4.0 Technical Proposal Evaluation Proc ~
The overall evaluation process will bE!1p , !'TTled by a Proposal Evaluation Team (the
''Team"). The evaluation criteria.~'<f~!li9h'i1·ng set forth at the end of this section will be
the sole basis for determining tJfe te_cHni~l1ifacceptability of proposals. The technical
proposal should be specific and <;p'h'lplete in every detail.
i.:!.:-'* ~ ~ ~ir.] -
4.1 The proposers, wh~b~e Y(,~Jiftep proposals are determined to be within the competitive
range by the Team;~may b~.sked to enter into contract negotiations. Upon evaluation
of the proposals and out~~e of negotiations, the Team will make a recommendation for
contract award.,-9_1,. '"'
.'ii !:::: ~-tt ... The Districts1may: , J
J~~!:iF~·-
1. Reject any or all proposals.
2. Issue subsequent requests for proposals.
3. Cancel the request for proposal
4. Appoint alternate members of the Team.
5. Remedy technical errors in the request for proposals.
6. Approve or disapprove the use of particular firms.
7. Establish a short list of proposers eligible for interviews after review of
written proposals by the Team and consideration of its recommendations.
8. Modify any requirements contained within the RFP and request revised
submittals from proposers determined to be within the competitive range.
9. Negotiate with any, all or none of the proposers.
10. Solicit best and final offers from all, some or none of the proposers.
11. Award a contract to one or more proposers.
12. Accept the written proposal as an offer, without negotiation and issue a
notice to proceed.
This RFP does not commit the Districts to negotiate a contract, nor does it obligate the
Districts to pay for any costs incurred in preparation and submittal of proposals or in
anticipation of a contract. The Districts reserves the right to contract with any of the firms
responding to this RFP based solely upon its judgment of the qualifications and
capabilities of that firm.
No information relating to the results of the RFP process will be released until after the
recommendations by the Team.
Pages
4.2 Proposal Evaluation Criteria
The criteria for evaluating each of the proposals are provided below.
1. Understanding the Districts' immediate and long-term financing objectives.
2. Experience in providing creative and innovative approaches to municipal finance.
,-;"-
'\ ·"~ 3. Firm resources and accessibility f ktif'~ ·~rsonnel to Districts staff during the
engagement. · ~irt
4. Team and experience on simjl~ .r
5. Qualification of key person_n18'~lss1gn:e & .J'I :f:' -,.,,_
6. Reasonable fees. -F .;· '·
-l
5.0 Role Definitions:
A.
The sel~cted tirrp s) shall furnish the necessary professional, technical and
clerical personnel to provide services required.
""t1:__:_,__' '
The selected firm(s) will appoint and make known to the Districts a Project
Manager who will be responsible for all coordination between the Districts and
the Underwriter.
B. Districts' Responsibility
The Districts shall provide guidelines for the subject services.
Steve Kozak, Financial Manager, shall manage the project for the Districts.
6.0 Prohibited Activities
6.1 PROPOSERS, THEIR AGENTS AND/OR ASSOCIATES SHALL REFRAIN FROM
CONTACTING OR SOLICITING DISTRICTS' OFFICIALS REGARDING THIS RFP
DURING THE SELECTION PROCESS. FAILURE TO COMPLY WITH THIS
PROVISION MAY RESULT IN DISQUALIFICATION OF THE PROPOSER.
Page7
7.0 Proposal Submittal
A complete submittal will consist of an original and ten (10) copies of the proposal
documents. All submittals must be received and time stamped by the Districts Office of
Contracts, at the address provided below no later than 4:00 p.m. local time on ____ _
__ . Proposals received after 4:00 p.m. will not be considered. FACSIMILE COPIES
WILL NOT BE ACCEPTED.
County Sanitation Districts.of 0range County
+ "" Attn: Steve KozaK,. Fin:ar:icial Manager 10844J~liis A~Efifue. . ""Ji'" 11,L -1 ml:; ....... ";:::.
Fountain Valle'· CA 92'72~--8127
8.0 Additional Information and Changes
All requests for additional information §'hO\J , ·e in writing and sent to the address above.
No oral modifications of this REP shali" be;vaiid. Any modifications shall be written by RFP
addendum, and signed by the lDistdets~ _Ofrector of Finance. 1~,r,_, t!!:u1r 1ii;;: ·
9.0 Confidential Data '":I "l't. ~-:-~ ."
Proposer shall cleany marlq~a-eh page of its proposal that contains trade secrets or other
confidential com,Jlercial o~financial information which the proposer believes should not be
disclosed outsic;f~,of th~. Districts. No part of any proposal will be disclosed outside the
Districts prior to ~Q_tract award.
J:\WPDOCIFIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\RFPFA
Page 8
FINANCIAL ADVISOR SELECTION SCHEDULE
Request for Proposals are mailed via Certified Mail to Distribution List
:rt
A
Pre-proposal conference to1'6e b
·n ,,:r
Districts' Review Comrpittee; eviews proposals and develops short list of
firms to be intef'Viewel!'t for consideration by Districts' Finance and Human
Resources 9errjmittee_0eii1.i':f
·l~_tBJk1·: 't.,.··· ~
District~'t'inans.( :.~dministration and Human Resources Committee consi.c.;ters--~~~ie~ Committee recommend~~ion and det~rmines sh_ort list of
firms to be rnt~rviewed as well as composition of Selection Committee.
-~1
Dt ·~5rselection Committee interviews short list of firms, and makes
selection of firm(s).
Joint Boards approve selection of Financial Advisor.
Page 9
Fonnat
D Written Report
D overheads
OSlides
0 Flip Charts
Onginato~~
Department Head Sign~
Gary Streed
Anticipated Time 5 min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
MARCH 13, 1996
FAHR96-21: Consideration of motion to receive and file Treasurer's
Report for the month of January 1996.
Summary
Both Pacific Investment Management Co., PIMCO, and Mellon Trust began their professional
external management of our funds in September 1995.
In order to give the Directors an opportunity to review the month-end reports available from
PIMCO, and to avoid distribution at the meeting, reports from the prior month are included with
the agenda. Quarterly presentations are made to the Committee by both PIMCO and our third-
party independent consultant, Callan Associates.
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." 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
$ 11,824,809
606,215
60,832,895
256,252,307
2,232
33,519,574
$363, 038, 032
Staff recommends the Committee receive, approve ~nd forward this report to the Joint Boards.
J:\WPOOC\FIN\CRANBFPC.MTGIFAHR,96\COVERS.96\FAHR96.21
March 13, 1996
CS DOC
TOTAL CASH & INVESTMENTS 1995 -1996
_)
400
350
300
I! .!! 250
0 Q
'O 200 • c ~ 150
i
100
50
0
June 30 July 31 Aug. 31 . Sept. 30 Oct. 30 Nov. 30 Dec. 31 Jan. 31
J:\WPDOCIFINICRANEIFPC.MTG\FAHR.96\COVERS.96\FAHR96,21
MONTHLY REPORT
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INVESTMENT MANAGEMENT PROGRAM
PIMCO'S PERFORMANCE MONITORING & REPORTING
(for the month ending January 31, 1996)
Liquid Operating Monies
14.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value:
Historical Cost:
14.1.2 MODIFIED DURATION Of Portfolio:
Oflndex:
14.1.3 1 % INTEREST RA TE CHANGE Dollar Impact (gain/loss) of 1% Change:
14.1.4 REVERSE REPOS %·of Portfolio in Rever.se 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:
$61,394,854
$61,434,674
'11
.25
$67,534 (.11 %)
0%
90%
AA+
0%
.45
1.44
-----
.45
.45
MONTHLY REPORT
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INVESTMENT MANAGEMENT PROGRAM
PIMCO'S PERFORMANCE MONITORING & REPORTING
(for the month ending January 31, 1996)
Long Term Operating Monies
.ii-PORTFOLIO COST AND MARKET VALUE Current Market Value: l 14.1.1 ! Historical Cost:
I 1~.1.2 MODIFIED DURATION Of Portfolio:
Of Index:
1~.1.3 1%INTERESTRATECHANGE Dollar Impact (gain/loss) of 1 % Change:
lf.1.4 REVERSE REPOS % of Portfolio in Reverse Repos:
(see attached schedule)
I 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"
11.1.9 PORTFOLIO PERFORMANCE Portfolio Total Rate of Return:
1 Month:
3 Months:
12 Months:
Year-to-Date:
Index Total Rate of Return:
1 Month:
..
$266,059,747
$222,510,310
2.4
2.4
$6,412,040 (2.4%)
0%
NA
AA+
0%
.91
3.12
------
.91
.89
Fonnat Originator A r
o Written Report
o Overheads
Mlche~~ru
Department Head Sign o~-~
o Slides Michelle Tuchman
o Flip Charts Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
MARCH 13, 1996
FAH R96-22: Staff Summary Report on the organization of the Communications Division,
the results of the Internal Communications Audit and an overview of new
and/or expanded programs to reach both internal and external audiences.
Summarv
A Communications Division was organized last summer under the General
Management Department to better meet the communications and graphics needs of the
Districts. The following information is a report on how the division is structured, the
services the division provides and the efforts currently underway to reach both internal
and external audiences.
Budget Information
There is no budgetary impact.
Staff Recommendation
An informational item only.
j:lwpdoclcommsec\michelle\template.96
March 13, 1996
FAHR96-22:
Background
STAFF REPORT
Summary Report on the Communications Division
organization, the results of the Internal Communications Audit
and an overview of new and/or expanded communications
programs.
A Communications Division, within the General Management Department, was
established in the FY '95-'96 budget to centralize five functions -internal and external
communications, graphic services, photocopying, the Mail Room and the receptionist's
duties. Director of Communications, Michelle Tuchman, was hired in November to
manage and coordinate these functions.
Since that time, emphasis has been placed on assessing individual job responsibilities
within the Division and, if necessary, reassigning those responsibilities to add greater
operational efficiency and enhance employee productivity. Three budgeted positions -
a senior office aide, a clerk and an intern -were eliminated and a part-time employee
was placed on work-order basis. Discussions continue on converting the recently
vacated position of administrative assistant to Communications Coordinator, a move
that would enable the division to better meet internal communications needs.
Following an assessment by the Director of Communications, it was decided that
employee communications was the area of immediate need. Therefore, the biggest and
most visible effort within the last half of fiscal 1996 will be the refinement and further
development of our internal communications program.
External communications are also vital to the implementation of such issues as the
NPDES permit renewal and the update of the Districts' strategic plan. To reach specific
stakeholders several programs are being planned for the remainder of fiscal 1996 as
well as fiscal 1997.
Communications Audit
An Internal Communications Audit was conducted in January to more accurately gauge
employees' perceptions, concerns, morale and attitude. Some 260 employees
responded to the audit, the largest number of respondents to any employee survey. We
believe this response rate emphasizes the importance employees place on
communications.
CSDOC D P.0.Box8127 D FountainValley,CA92728-8127 DTel. (714)962-2411 0FAX(714)962-3954
FAHR96-22
Page2
March 13, 1996
Audit highlights include the following:
More than 70% of the respondents agree or somewhat agree with the statement,
"We've gone through some tough years at the Districts, but I think things are improving."
When asked if they believe "Morale at the Districts is improving," 35% said they
disagree while 40% said they somewhat agree.
Nearly 80% feel communications at the Districts is improving, and 62% agree or
somewhat agree with the statement, "The Districts cares about me and what I think."
Employees say the Districts' mission, goals and objectives have been clearly
communicated to them, with supervisors, managers and departmenUdivision meetings
being the first choices for the sources of accurate, reliable information.
The News Pipeline, our employee newsletter, is an important communications vehicle,
but greater emphasis needs to be placed on publishing Districts' future plans, policies
and procedures, proposed expansion and/or changes in Districts' operation, and
management philosophy.
The Internal Communications Audit will be conducted again in January 1997 and the
results compared as a benchmark to the effectiveness of our employee communications
programs.
Communications Action Team
A Communications Action Team, comprised of 1.0 volunteer members representing the
Districts' eight departments, was formed in February. The purpose of the Team is to
assist the Communications Division in its continuing assessment of the Districts' internal
communications needs, to suggest new programs and services to meet those needs
and to form the foundation of the Districts' employee communications network.
The Communication Action Team received the results of the Communications Audit and
will use those results to recommend new and/or expanded programs and services.
Expanded and Improved Programs
The following programs will be expanded and improved during the last half of fiscal
1996 and will continue to be evaluated on an ongoing basis for effectiveness and
responsiveness to employee needs:
FAHR96-22
Page 3
March 13, 1996
-The News Pipeline
-Regularly scheduled (formal) meetings with upper management
-An employee suggestion/comment/complaint program that ensures
confidentiality
-The NEWSLine
New Programs
Bulletin Boards -A bulletin board program was established in January to provide a
communications vehicle that both management and staff can use and share. Some 22
bulletin boards were installed throughout the Districts. The Communications Division is
the coordinating unit and the group responsible for updating information and maintaining
the boards.
Informal Meetings with Management -Management will be visiting work sites
throughout the plants to further facilitate two-way communications, to give employees
the opportunity to showcase their work areas, and to further break down barriers
between management and staff.
Graphic Services
It is also a goal of the Communications Division to produce and provide programs and
services that assist employees in improving their presentation skills. To that end,
regularly scheduled workshops and seminars will be conducted. "How to Plan an
Effective Presentation" was February's workshop; "How to Give an Effective
Presentation" is scheduled for March.
External Audiences
The following external audiences have been identified, and various programs and
communications vehicles, like Quarterly Board Workshops, have and will continue to be
planned to reach these audiences:
-the Boards of Directors
-the general public
--stakeholders (including environmentalists)
-government representatives (state and local)
-Orange County businesses
-the media
-schools/educators
FAHR96-22
Page4
March 13, 1996
Summary
The Districts has made significant strides within the first half of fiscal 1996 to improve its
internal communications program. Feedback from employees is positive, although we
believe significant improvements can -and will -be made to our communications
vehicles.
j:\wpdoc\commsec\michelleltemplate.96a Page 4 of 4
Communications Audit
January 1996
RETURN TO DIV. 2190
BY FEBRUARY 1
How long have you been with the Districts?
D less than a year D 1-5 years D 6-10 years
D 16-20 years D 21 years or more
Which of the following describes your job classification?
D Administrative/Clerical D Technical D Supervisor/Manager
D Operators D Maintenance D Professional
We've gone through some tough years at the Districts,
but I think things are improving.
D strongly agree D agree D somewhat agree
Morale at the Districts is improving.
D strongly agree D agree D somewhat agree
Communications at the Districts is improving
D strongly agree D agree D somewhat agree
The Districts cares about me and what I think.
D strongly agree D agree D somewhat agree
If I have a question about a policy or procedure,
I know where to get an answer.
D strongly agree D agree D somewhat agree
The Districts' mission, goals and objectives
have been clearly communicated to me.
D strongly agree · D agree D somewhat agree
The Districts is a good place to work.
D strongly agree D agree D somewhat agree
D disagree
D disagree
D disagree
D disagree
D disagree
D disagree
D disagree
D 11-15 years
D Department Head
D strongly disagree
D strongly disagree
D strongly disagree
D strongly disagree
D strongly disagree
D strongly disagree
D strongly disagree
Commwrications Audit
Page2
I usually receive information about what's going on at the Districts from:
(please rank 1-9 with 1 being the highest ranking)
My supervisor/manager
Department/division meetings
The News Pipeline
The NEWS Line
Memos
The grapevine
My fellow employees
Rumors
Newspapers
I would rather receive information about the Districts from:
(please rank 1-9 with 1 being the highest ranking)
My supervisor/manager
Department/division meetings
The News Pipeline
The NEWS Line
Memos
The grapevine
My fellow employees
Rumors
Newspapers
Please rank the following list of communication sources for importance and accuracy
(please rank 1-9 with 1 being the highest)
My supervisor/manager
Department/division meetings
The News Pipeline
The NEWS Line
Memos
The grapevine
My fellow employees
Rumors
Newspapers
Importance Accuracy
, .
How would you rate the overall content of The News Pipeline?
D Excellent D Good D Fair D Poor
When you receive The News Pipeline, how much do you read?
D Almost all of it D about half of it D Only selected articles D little, if any, of it
Does The News Pipeline keep you up-to-date with Districts news?
D Always D Most of the time D Sometimes D Rarely
Communications Audit
Page4
Do you think The News Pipeline maintains a good balance of information?
D Always D Most of the time D Sometimes D Rarely
Would you like to see The News Pipeline expanded?
D Yes D No
How often would you like to see The News Pipeline distributed?
D Bi-weekly (as it is now) D Monthly D Quarterly
Would you like to see an employee newsletter that has more department features and stories
about fellow employees?
D Yes D No
How frequently do you call the NEWS Line?
D once a week D every other week D once a month D never
Did you attend last summer's Family Day?
D Yes D No D No,Because _________________ _
Did you attend last summer's CSDOC Picnic?
D Yes D No D No, Because _________________ _
Did you attend the CSDOC Holiday Party?
D Yes D No D No, Because _________________ _
Would you like to see more events like Family Day?
D Yes D No
ATTACHMENT 2
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
Communications Audit
Results
I
Question 1: How long have you been with the Districts?
Under 1 year 6%
1 -5 years 31%
6 -10 years 41%
11 -15 years 12%
16 -20 years 6%
Over 20 years 5%
I
Question 2: Which of the following describes your job classification?
Administrative/Clerical 21%
Professional 18%
Technical 18%
Supervisor/Manager 16%
Maintenance 16%
Operators 6%
Department Head 2%
I
Question 3: We've gone through some tough years at the Districts but I think
things are improving.
Strongly agree 6%
Agree I 33%
Somewhat agree 38%
Disagree 19%
Strongly disagree 4%
I
Question 4: Morale at the Districts is improving.
Strongly agree 1%
Agree I 17%
Somewhat agree 40%
Disagree 35%
Strongly disagree 7%
I
Question 5: Communications at the Districts is improving.
Strongly agree 7%
Agree I 28%
Somewhat agree 42%
Disagree 21%
Strongly disagree 2%
I
Page 1 of 7
Communications Audit
Results
Question 6: The Districts cares about me and what I think.
Strongly agree 4%
Agree 23%
Somewhat agree 39%
Disagree 28%
Strongly disagree 6%
Question 7: If I have a question about a policy or procedure, I know where to
get an answer.
Strongly agree 6%
Agree 44%
Somewhat agree 34%
Disagree 14%
Strongly disagree 2%
Question 8: The Districts' mission, goals and objectives have been clearly
communicated to me.
Strongly agree 9%
Agree 42%
Somewhat agree 34%
Disagree 13%
Strongly disagree 2%
Question 9: The Districts is a good place to work.
Strongly agree 24%
Agree 49%
Somewhat agree 23%
Disagree 4%
Strongly disagree 3%
Page 2 of 7
Communications Audit
Results
Question 1 O: I usually receive information about what's going on at the Districts
from: (1=Highest Ranking)
My supervisor/manager 1
My fellow employees 2
Department/division meetings 3
Memos 4
The News Pipeline 5
The grapevine 6
Rumors 7
The NEWSLine 8
Newspapers 9
Question 11 I would rather receive information about the Districts from:
(1=Highest Ranking)
My supervisor/manager 1
Department/division meetings 2
Memos 3
The News Pipeline 4
The NEWSLine 5
My fellow employees 6
The grapevine 7
Newspapers 8
Rumors 9
Question 12: Please rank the following list of communication sources for
importance and accuracy: (1=Highest Ranking)
I mgJ1.rtaac:.e. Ac;.,ura~
My supervisor/manager 1 1
Department/division meetings 2 2
Memos 3 3
The News Pipeline 4 4
The NEWSLine 5 5
My fellow employees 6 6
Newspapers 7 8
The grapevine 8 7
Rumors 9 9
Page 3 of 7
Communications Audit
Results
I
Question 13: The amount of information I receive on the Districts' future plans is:
Too Much 4%
Too Little 54%
Just Right 38%
No Answer 4%
I
Question 14: The amount of information I receive on the Districts' policies and
procedures is:
Too Much 6%
Too Little 54%
Just Right 35%
No Answer 5%
I
Question 15: The amount of information I receive on proposed expansion change
in the Districts' operation is:
Too Much 4%
Too Little 64%
Just Right 26%
No Answer 6%
I
Question 16: The amount of information I receive on management philosophy is:
Too Much 11%
Too Little 50%
Just Right 26%
No Answer 13%
I
Question 17: The amount of information I receive on job related information is:
Too Much 1%
Too Little 50% '
Just Right 43%
No Answer 6%
I
Question 18: The amount of information I receive on job advancement
opportunities is:
I
Too much 0%
Too Little 53%
Just Right 37%
No Answer 10%
Page 4 of 7
Communications Audit
Results
Question 19: The amount of information I receive on the effect of external issues
on my job is:
Too Much 2%
Too Little 62%
Just Right 21%
No Answer 15%
Question 20: The amount of information I receive on news of other
departments/divisions is:
Too Much 2%
Too Little 64%
Just Right 25%
No Answer 9%
Question 21: The amount of information I receive on the Districts' stand on
current issues is:
Too Much 0%
Too Little 64%
Just Right 26%
No Answer 10%
Question 22: The amount of information I receive on the Districts'
community involvement is:
Too Much 1%
Too Little 51%
Just Right 37%
No Answer 11%
Question 23: The amount of information I receive on personnel
changes/promotions is:
Too Much 2%
Too Little 35%
Just Right 59%
No Answer 4%
Page 5 of 7
Communications Audit
Results
Question 24: The amount of information I receive on human interest news
on co-workers is:
Too Much 3%
Too Little 33%
Just Right 55%
No Answer 9%
Question 25: The amount of information I receive on general Districts' news is:
Too Much 2%
Too Little 41%
Just Right 53%
No Answer 4%
Question 26: How would you rate the overall content of The News Pipeline?
Excellent 18%
Good 61%
Fair 19%
Poor 2%
Question 27: When you receive The News Pipeline, how much do you read?
Almost all of it 79%
About half of it 9%
Only selected articles 9%
Little, if any, of it 3%
Question 28: Does The News Pipeline keep you up-to-date with the Districts'
news?
Always 9%
Most of the time 57%
Sometimes 31%
Rarely 3%
Question 29: Do you think The News Pipeline maintains a good balance of
information?
Always 9%
Most of the time 61%
Sometimes 26%
Rarely 4%
Page 6 of 7
Communications Audit
Results
Question 30: Would you like to see The News Pipeline expanded?
Yes 70%
No 30%
Question 31 : How often would you like to see The News Pipeline distributed?
Bi-weekly (as it is now) 82%
Monthly 16%
Quarterly 2%
Question 32: Would you like to see an employee newsletter that has more
department features and stories about fellow employees?
Yes 62%
No 38%
Question 33 : How frequently do you call the NEWSLine?
Once a week 11%
Every other week 6%
Once a month 41%
Never 42%
Question 34: Did you attend last summer's Family Day?
Yes 29%
No 71%
Question 35: Did you attend last summer's CSDOC Picnic?
Yes 16%
No 84%
Question 36: Did you attend the CSDOC Holiday Party?
Yes 18%
No 82%
Question 37: Would you like to see more events like Family Day?
Yes 63%
No 37%
Page 7 of 7
Format
0 Written Report
OOverheads
OSlides
0 Flip Charts
(12):
Summary
Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
MARCH 13, 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, April 10, 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 Subcommittee Report
Employer/Employee Relations Resolution
Consideration of 1996-97 User Fees, Connection Fees, Annexation Fees
Quarterly Ernst & Young Status Report
pi
Consideration of Broad-banding Classifications and Pay-for-Performance Compensation
1996-97 Budget Update
Consideration of Authority for Contract Name Changes
Review Responses to F.l.S. RFP Process
Review Commercial Bank Selection Alternatives
Quarterly Treasury & Investment Report
Quarterly Budget Review
Personnel Classification Studies
Quarterly Training Program Status Report
1996-97 Budget Update
Consideration of Landfill Financing Team
Consideration of 1996-97 Budget Recommendations
Quarter! Communications Pro ram U ate
Staff Recommendation
Information only item.
J:IWPDOC\FINICRANEIFPC.MTGIFAHR.96\COVERS.96\CALEN3.96