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Home My WebLink About1996-06-12DRAFT County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 -'JUN 2 6199r By .,t]K, I MINUTES OF FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Wednesday. June 12. 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 June 12, 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 Burnie Dunlap Thomas Saltarelli William G. Steiner Wally Linn Committee Directors Absent: James Flora John M. Gullixson Roger R. Stanton, Vice Chair Peer Swan, Vice Joint Chair Others Present Staff Present: Donald F. McIntyre, General Manager Judith A. Wilson, Assistant General Manager Ed Hodges, Director of General Services Admin. David Ludwin, Director of Engineering Bob Ooten, Director of Operations & Maintenance Mike Peterman, Director of Human Resources Michelle Tuchman, Director of Communications Mahin Talebi, Source Control Manager Steve Kozak, Financial Manager Mike White, Controller Linda Eisman, Training Manager Brad Cagle, Principal Financial Analyst-Budget Lenora Crane, Committee Secretary Others Present: Tom Woodruff, General Counsel None Dennis Vlasich, Kerry Consulting Group Don McLean, Robert F. Driver Co. (2) APPOINTMENT OF A CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS No comments were made. Minutes of Finance, Ad,. . 1. and Human Resources Committ Page2 June 12, 1996 (4) REPORTS OF THE COMMITTEE CHAIR. GENERAL MANAGER, ASSISTANT GENERAL MANAGER($), DIRECTOR OF FINANCE/TREASURER. DIRECTOR OF HUMAN RESOURCES, DIRECTOR OF GENERAL SERVICES ADMINISTRATION, DIRECTOR OF COMMUNICATIONS AND GENERAL COUNSEL (a) Report of the Committee Chair The Committee Chair had no report. (b) Report of the General Manager Don McIntyre briefly reported to the Committee on several important items: • This week all of the Districts' bargaining units have agreed to the health plan which had been approved by the Joint Boards at their last meeting. • Director John Collins underwent back surgery today, and has come through the operation successfully. He will be discharged from the hospital tomorrow. • SAWPA's board has approved our agreement and will now move on to five agencies for their individual ratification. • A paragraph will be added to the letter to the Board scheduled to come out next week regarding the Districts' involvement in the Balsa Chica beach closure issue. (c) Report of Assistant General Manager -Administration The Assistant General Manager of Administration Judy Wilson announced two personnel changes: • Mike Peterman has been permanently appointed the Districts' Personnel Director, effective last Friday, June 7, 1996. Mike competed in a very strong pool of candidates and did very well. • The resignation of Steve Hovey, Information Technology Manager, has been accepted by the Districts. We will be recruiting to fill that vacant position. Judy further reported that Linda Eisman, Training Manager, has just completed and distributed the Districts' first annual Training Calendar. Linda Eisman advised that she is working with the Safety Program Minutes of Finance, Admin. and Human Resources Committee Page 3 June 12, 1996 Manager to define safety requirements. Some of the dates for those training sessions will be added to the calendar later and redistributed. Report of Assistant General Manager -Operations The Assistant General Manager of Operations had no report. (d) Report of the Director of Finance/Treasurer (e) (f) The Director of FinancefTreasurer's written report was contained in the agenda package. Steve Kozak, Financial Manager, reviewed the report for the Committee. He indicated that at the time our report was prepared, the variable rates were traded at 4.7%, which was at end of the month. Today we were down between 3.10% and 3.15%. Report of the Director of Human Resources The Director of Human Resources had no report. Report of the Director of General Services Administration The Director of General Services Administration had no report. (g) Report of the Director of Communications Michelle Tuchman, Director of Communications, reported that tomorrow evening the first public participation meeting will be held regarding the Districts' Strategic Plan. Staff has sent out over 1,300 invitations, the press has been notified and Public Notices have been placed in the Register, Times and Orange County Business Journal. The meeting will be held in the Multi-Purpose Room at McGarvin Middle School, on Thursday, June 13, 1996, between 5:00 p.m. and 7:00 p.m. Approximately 150 people are expected to attend. (g) Report of General Counsel General Counsel Tom Woodruff reported on the Pringle Bill consolidation effort. There is a good chance that sanitation will not be part of the bill. Mr. Woodruff also updated the Committee on recent meetings by water agencies and the outcome of those meetings. Changes and specific amendments are being proposed to AB2109. The next hearing on the bill is set for July 3 before the Local Government Committee. Minutes of Finance, Admin. and Human Resources Committee Page4 June 12, 1996 (5) APPROVAL OF MINUTES It was moved, seconded and duly carried to approve the draft minutes of the May 8, 1996, meeting of the Finance, Administration and Human Resources Committee. (Please Note: Though the following items may have been acted on in another sequence, the minutes will reflect them in numerical order for tracking purposes.) (6) OLD BUSINESS (7) FAHR96-29 Consideration of motion to approve renewal of the Districts' All-Risk Property Insurance Program for 1996-97, including earthquake, flood, personal property and business interruption coverage with: a $200 million All-Risk limit: a $30 million earthquake sub-limit, with deductibles of $25,000 for all perils except earthquake, and 5% per unit ($250,000 min.) for earthquake, for a total premium not to exceed $1.4 million. Steve Kozak, Financial Manager, noted that this item was originally presented to the Committee on May 8, 1996. A status report and additional information requested by the Committee is being presented tonight. Mr. Kozak introduced Don McClean of Robert F. Driver Company, the Districts' current Broker-of- Record. Mr. Kozak reviewed Mr. McClean's aggressive marketing efforts to obtain All-Risk Insurance at the not-to-exceed $1.4 million premium cost authorized at the last meeting. Mr. Kozak reviewed the 1995-96 Schedule of Insurance Companies, Premiums, Commissions and Fees. Premium reductions will be about 9.5%. Mr. Kozak noted that additional confirmations are expected over the next few days, and insurance is expected to be in place for the next fiscal year. It was moved, seconded, and duly carried to approve staff's recommendation. NEW BUSINESS FAHR96-35 Consideration of motion to receive and file Treasurer's Report for the month of April 1996. The month ended April 1996 Performance Monitoring Reports for Liquid and Long-term Operating Monies indicated that total investments amount to $386,761,323. Minutes of Finance, Admin. and Human Resources Committee Page 5 June 12, 1996 Steve Kozak reported that in addition to the above information presented each month, the Districts has gone on-line with Mellon Trust, our custodial services bank for our investment program. We are now able to present the Committee with actual portfolio consolidation statements without delay. The Committee will also receive the historical cost of the portfolio and the market value from both PIMCO, our investment manager, and Mellon Trust. Variations will occur at the close of the month due to pending trades, slightly different methodologies and evaluation methods. FAHR96-36 Consideration of motion recommending approval of the proposed 1996-97 Joint Works Budgets and forwarding them to the Joint Boards as follows: Joint Works Operating/Working Capital Worker's Compensation Self-Insurance Public Liability Self-Insurance Joint Works Capital Outlay Revolving $48, 700,000 275,000 385,000 44,895,000 This item was reported on by both General Manager Don McIntyre and Controller Mike White, with both utilizing a computerized slide system for their visual presentations. Mr. McIntyre advised that the proposed budget has been presented to the PDC and OMTS Committees. If the 1996-97 proposed budget is approved by the FAHR Committee, the entire budget, including the individual Districts, will be forwarded to the Joint Boards for consideration at their June 26, 1996 meeting. Don McIntyre gave an overview of the proposed 1996-97 budget and identified two major changes in the Districts' organizational charting. Mr. McIntyre reviewed the proposed actions to reduce costs, such as cross-training, retraining for reassignments, attrition, early retirement incentives, etc. All vacant positions have been eliminated from the budget. Staffing is maximized at 624 for next year, and costs per MGD are expected to remain at $555. Mr. McIntyre further reported on the Districts' proposed actions to become more competitive, the Districts' critical goals, and reviewed budget charts identifying expected areas where money will be expended and where the revenue is to be derived. Mr. McIntyre advised that fees may have to be increased next year. Controller Mike White then gave an in-depth report of the Districts' 1996-97 Proposed Budget, going through each of the ten major sections of the budget and identifying new areas added to this year's budget. The Committee suggested that the various "reserves" be renamed or identified as earmarked for specific projects when next year's budget is prepared. It was also noted that a budget should be used as a guide. It does not necessarily have to be totally expended and, on the other hand, if it is not enough, staff should not be reluctant to come back with reasons why it should be increased. Minutes of Finance, Admin. and Human Resources Committee Page6 June 12, 1996 The Chair suggested that those Committee members who have questions regarding specific areas in the budget contact staff directly. The Committee complimented staff for the excellent job they did preparing this year's proposed budget. After discussion on this item, it was moved, seconded and duly carried to recommend that the Joint Boards of Directors approve the proposed Joint Works Operating, Joint Works Capital and Self-Insurance Fund Budgets for 1996-97. FAHR96-37 Consideration of motion to receive and file staff report regarding current commission-based compensation structure for Districts' Broker of Record. Steve Kozak stated that this item was first presented to the Committee at its May 8, 1996 meeting, and has been brought back this month with additional information. Mr. Kozak reviewed the annual compensation received by Driver Associates for each fiscal year since 1992-93. Mr. Kozak introduced Don McClean of Robert F. Driver Associates who described the current insurance market, and answered questions from the Committee regarding his company's commission structure. Mr. McClean advised that his company has two offices, and the staff that handled the Districts' health benefits package is not as efficient as his office which handles property and all-risk insurance. Mr. McClean made it clear that his company is more concerned about their reputation and providing continued services than about generating moderate increases in their premium income. As reported to the Committee in May, Mr. Kozak advised that staff is preparing a Request for Proposals (RFP) for insurance broker services. The RFP is being configured to allow firms to propose to provide services for liability, property, casual & miscellaneous insurance, and/or employee health insurance. The RFP will request firms to provide compensation proposals under both commission and flat fee structures. After discussion among the Committee members, it was moved, seconded and duly carried to receive and file this report. FAHR96-38 Consideration of motion to accept the proposal submitted by J.D. Edwards: authorize staff to enter into negotiations with J.D. Edwards for a new financial information system: and to present a negotiated agreement, in an amount not to exceed $1,525,000, to the Joint Boards for approval at the July 24, 1996 meeting. 'r Minutes of Finance, Admin. and Human Resources Committee Page 7 June 12, 1996 Mr. White introduced Dennis Vlasich of Kerry Consulting Group, the company selected to complete Phase Ill, Selection Process for the Finance Information System Hardware and Software; and Phase IV, Implementation and Acceptance of the Selected Hardware and Software Solutions. This item will complete Phase Ill in the FIS process. Mr. Vlasich gave a slide presentation of the process followed in acquiring the financial information system. He reviewed the lengthy RFP process which included two RFP releases, and the evaluation process. J.D. Edwards demonstrated all of the required computer module applications and was unanimously recommended by the evaluation team. Although J. D. Edwards was the second lowest priced vendor, they ranked number one when evaluating the three firms based on a price per functionality point system. J. D. Edwards is the most responsible vendor, has the most credible proposal and gave the best demonstration. After discussion, it was moved, seconded and duly carried to approve staff's recommendation. FAHR96-39 Consideration of motion to modify the Professional Services Agreement with Kerry Consulting Group to an amount not to exceed $47,757 for services rendered in performing Phase IV of the FIS proiect, an increase of $23,567, to provide for financial and human resources process and procedure reengineering oversight not originally included in the scope of work. Mike White stated that Kerry Consulting Group is the company selected to complete Phases Ill and IV of the Financial Information System project. Phase Ill was the vendor selection process, which has just been concluded. Kerry Consulting will be working on Phase IV of the FIS project which is the implementation process. Recent site visits to review software installations revealed an opportunity to save significant staff costs in the future by reengineering the financial and human resource processes currently in place. Mr. White advised a change order in the amount of $23,567 to Phase IV of the Kerry Consulting Group contract is requested to accomplish this work. It was moved, seconded and duly carried to approve staff's recommendation. FAHR96-40 Labor Negotiations -Information Only Mike Peterman, Director of Human Resources, reported on the status of the Request for Information and Qualifications (RFIQ) for a labor negotiator. He advised that bids were solicited from five firms with two firms responding by the Minutes of Finance, Admin. and Human Resources Committee Page 8 June 12, 1996 deadline (William Hamilton and Associates, and Liebert, Cassidy & Frierson). A third bid was received from William Avery after the close of bids. The selection process will take place on July 1, 1996, with the selection committee comprised of Don McIntyre, Ed Hodges, Bob Ooten, Michelle Tuchman and Mike Peterman. Mr. Peterman advised that labor contract proposals will be presented at the July FAHR Committee meeting in closed session. After discussion on this item, it was moved, seconded and duly carried to authorize staff to rebid this RFIQ with a five-day time frame for firms to resubmit bids. (8) CLOSED SESSION The Chair reported to the Committee the need for a closed session, as authorized by Government Code Sections 54957.6, to discuss and consider the items that are specified as Item (8)(b)(1 )(a), (2) and (3) on the published Agenda. The Committee convened in Closed Session at 8:00 p.m. 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. A report of actions taken will be publicly reported at the time the approved action becomes final re Agenda Item 8(b)(3). No action was taken re Agenda Item 8(b)(2). At 8:20 p.m., the Committee reconvened in regular session. It was moved, seconded and duly carried to approve the agreement reached among the General Manager and Director of Human Resources and all employee organizations, in accordance with the prior authority approved by the Boards of Directors. (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. t Minutes of Finance, Admin. and Human Resources Committee Page 9 June 12, 1996 (12) CONSIDERATION OF UPCOMING MEETING DATES AND ITEMS TO BE DISCUSSED AT THOSE MEETINGS The next Committee meeting is scheduled for Wednesday, July 10, 1996. (13) .ADJOURNMENT The meeting was adjourned at approximately 8:22 p.m. ~~ Finance, Administration and Human Resources Committee Secretary J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\1996.MIN\MFAHRS.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 June 12, 1996, was duly posted for public inspection in the main lobby of the Districts' offices on June 6, 1996. Posted: By: IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of June, 1996. e Boards of Directors of County , 6, 7, 11, 13 & 14 of Orange ~ & ,1996, ;..';J(JA.M./0 ~~ J:IWPDOC\FIN\CRANEIFPC.MTGIFAHR.96\CERT.POS\CERTP06.96 phone: (714) 962,t!411 malling .address: RO Box 8127 Fountain Valley, CA 92728,8127 SU>eet address: 10844 EIits Avenue fountair't Valley, CA 92708-701 8 Memb"er Agencies • Cities Mfiftaim Brea Buena Park. Cypress Founrain Valley Fuller con Huntington Beach Irvine La Habra La Palma Los Alamitos Newpo,.r; Beaah Orange Plaaent.ia Santa Ana Sea/ Beach Stanton Tustin VIiia Park Yor/;la Unda County of Orange Sanitary Districts Costa 'Mesa Garden Grave Midway City Water Districts Irvine Ranah COUNTY ~NITATION DISTRICTS OF •R~GE COUNTY, CALIFORNIA June 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, JUNE 12. 1996-5:30 P.M. DISTRICTS' ADMINISTRATIVE O.FFICES 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 June 6, 1996 FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE TENTATIVELY SCHEDULED MEETING DATES Finance, Administration and Human Resources Committee Meetings Joint Board Meetings June June 12, 1996 June 26, 1996 July July 10, 1996 July 24, 1996 August None Scheduled August 28, 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 February February 12, 1997 February 26, 1997 March March 12, 1997 March 26, 1997 April April 9, 1997 April 23, 1997 May May 14, 1997 May 28, 1997 June June 11, 1996 June 25, 1996 June 12, 1996 AGENDA FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMlTTEE 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, JUNE 12. 1996 -5:30 P.M. In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the Districts' Administrative Offices not less than 72 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the Office of the Board Secretary. In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency item or that there is a need to take immediate action which need came to the attention of the Committee subsequent to the posting of the agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. . . . . '············----·--·-··-··············--·· ••, ........................................................................................................................................ ~·-···-----··••-•·· ............ .-................................ ' ............... • ( 1 ) Roll Call (2) Appointment of Chairman pro tern, if necessary. (3) Public Comments: All persons wishing to address the Committee on specific agenda items or matters of general interest should do so at this time. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to five minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Committee except as authorized by Section 54954.2(b). June 12, 1996 (4) The Committee Chairman, General Manager, Assistant General Manager(s), Director of Finance/Treasurer, Director of Human Resources, Director of General Services Administration, Director of Communications, 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) Report of Assistant General Manager -Administration ( d) Report of Assistant General Manager -Operations (e) Report of Director of Finance/Treasurer (f) Report of Director of Human Resources (g) Report of Director of General Services Administration (h) Report of Director of Communications (i) Report of General Counsel (5) Approval of draft Finance, Administration and Human Resources Committee Minutes for Meeting of May 8, 1996. (6) Old Business. FAHR96-29 Consideration of motion to approve renewal of the Districts' All-Risk Property Insurance Program for 1996-97, including earthqwake, fire, flood, personal property and business interruption coverage with a $200 million All-Risk limit, a $30 million earthquake sub-limit, with deductibles of $25,000 for all perils except earthquake, and 5% per unit ($250,0Q0 minimum) for earthquake, for a total premium not to exceed $1.4 million. (Steve Kozak) (7) New Business. FAHR96-35 Consideration of motion to receive and file Treasurer's Report for the month of April 1996. (Gary Streed) FAHR96-36 Consideration of motion recommending approval of the proposed 1996-97 Joint Works Budgets and forwarding them to the Joint Boards as follows: Joint Works Operating/Working Capital Worker's Compensation Self-Insurance Public Liability Self-Insurance Joint Works Capital Outlay Revolving {Don Mclntyre\Mike White) $48,700,000 275,000 385,000 44,895,000 June 12, 1996 FAHR96-37 Consideration of motion to receive and file staff report regarding current commission-based compensation structure for Districts' Broker-of-Record. (Steve Kozak) FAHR96-38 Consideration of motion to accept proposal submitted by J.D. Edwards; authorize staff to enter into negotiations with J.D. Edwards for a new financial information system; and to present a negotiated agreement, in an amount not to exceed $1,525,000, to the Joint Boards for approval at the July 24, 1996 meeting. (Mike White/Dennis Vlasich) FAHR96-39 Consideration of motion to modify Professional Services Agreement with Kerry Consulting Group to an amount not to exceed $47,757 for services rendered in performing Phase IV of the FIS project, an increase of $23,567, to provide for financial and human resources process and procedure reengineering oversight not originally included in the scope of work. (Mike White) FAHR96-40 Labor Negotiations -Information Only (8) Closed Session. ••·••••·•• .. ••• ....................... .i .......... , ........................................................................ 1 ................ -.......... 11, .......... , .......... L •••••••••••••·•-. ,.-• ..... _., ·•••' • '•••-••' •••••'"••••••• • Closed Session: During the course of conducting the business set forth on this agenda as a regular meeting of the Committee, the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a} purchase and sale of real property; (b} matters of pending or potential litigation; (c} employee actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Committee during a permitted closed session and are not available for public inspection. At such time as final actions are taken by the Committee on any of these subjects, the minutes will reflect all required disclosures of information. ; 1 ................................................................ L •.••·••••-••---%> ..................................... •••••-••---•••••-•••••••-••••--•·•••·•• , ........................... ; (a) Convene in closed session, if necessary. (b) (1) Confer with Districts' representatives (General Manager, General Counsel, Director of Personnel and Director of Finance) concerning status of negotiations with employee group representatives on salaries, benefits and terms of employment (Section 54957.6). (a) Confidential Employees June 12, 1996 (2) Confer with General Counsel re status of litigation: Louis Sangermano v. County Sanitation Districts of Orange County, California, Orange County Superior Court Case No. 732680 {Government Code Section 54956.9{a). (3) Confer with Ad Hoc Committee re Landfill Billings (Government Code Section 54956.9). {c) Reconvene in regular session. (d) Consideration of action, if any, on matters considered in closed session. (e) Report on discussion taken in closed session, as required. (9) Other business, if any. (10) Matters which a Director would like staff to report on at a subsequent meeting. ( 11) Matters which a Director may wish to place on a future agenda for action and a staff report. (12) Consideration of upcoming meeting dates and items to be discussed at those meetings. (13) Adjourn. Notice to Committee Members: If you have any qµestions regarding the Agenda, or wish ,to place items on the Finance, Administration and Human Resources Agenda, Colllrnittee members should contact the Committee Chair or Secretary ten days in advance of the Committee me.eting. Committee Chair: George Brown (310) 431-2185 Secretary: Lenora Crane (714) 962-2411, Ext. 2501 (714) 962-3954 (FAX) ____ .,.__ ............... "'!•······ ............................ -, ........................................................................................................................................................... ._ ....... -•• --........................... . ROLL CALL SHEET FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING DATE: June 12.1996 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. . ...... . ED HODGES, Director of Gen'I. Srvs. Admin ........ . DAVID LUDWIN, Director of Engineering .......... . BOB OOTEN, Director of Operations & Maintenance .. MIKE PETERMAN, Acting Director of Human Res .... . GARY STREED, Director of Finance .............. . MICHELLE TUCHMAN, Director of Communications .. NANCY WHEATLEY, Director of Tech. Srvs ........ . STEVE KOZAK, Financial Manager ............... . GREG MATHEWS, Principal Administrative Analyst .. . MIKE WHITE, Controller ........................ . LENORA CRANE, Committee Secretary. . ......... . -----------............... . OTHERS TOM WOODRUFF. GEN'L. COUNSEL ............ . DENNIS VLASICH. KERRY CONSULTING GRP. . .. . ------------............. . c: Penny Kyle L. Crane TIME: 5:30 P.M. ADJOURN: P.M. '· / Format • Written Report •Overheads •Slldes • Fllp Charts Originator _ ___,__ Department Head Sign~~ K GarySreed Anticipated Time 6 min. FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR JUNE 12, 1996 (4)(e): 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\FlNICRANE\FPC.MTGIFAHR.96\COVERS.96\DOFS.96 "'tl n m ~ C ~ ~ l> RATE(¾) ~ A ~ (D ~ m ~ ~ 0 ~ ~ ~ ~ ~ ~ ~ ~ 8 8 g g g g O ~ :I: 04-Oct-95 X ffi en I ' I , E :--i I I l (D ~ 11-Oct-95 : 1 , X , - I I I I I g 18-Oct-95 I I I X I O I I I I I ~ I I I I ....1rr,, 25-Oct-95 , ' x 1 , : ~ I -01-Nov-95 I 1 ' X 1 m I I ! I .. I I I 8i 08-Nov-95 1 1 .XI' I I 15-Nov-95 l :, Xl I I 22-Nov-95 : : ">f + 1 I I 29-Nov-95 1 1 x ' I I "'tl I I ., 06-Dec-95 1 X 5· I 1· (D ' ~ 13-Dec-95 1 X CD I I ! g: I I m 20-Dec-95 , , x -, I t I (") I I I 27-Dec-95 1 l ' en + I I C 03-Jan-96 : j : O ~ 10-Jan-96 ' x ' (") ,, I I S: 17-Jan-96 : X ~ Q ' ' l I )> tc t I I g: 24-Jan-96 1 1 x , --f ' I i ' m I I : I 31-Jan-96 1 , x 1 :::C: + I I l ' I I I -07-Feb-96 1 1 1 ):{ , en I I I I I I --f ~ 14-Feb-96 ' 1 ' X 1 0 G) I ,I I f I I I I t i I "Tl ~ 21-Feb-96 , 1 ' x 1 ~ 0) I I I I l I ........ ~ I ',I I I I 28-Feb-96 , , , x 1 ~ . l : m I 06-Mar-96 , , m-"' , , X , ...,. I I ,. I J l ' "' X 1 1 ~ I 1 0 l 13-Mar-96 1 . , 1 X' 1 en , , 1 J 1 ~ 0 1 I I --f G1 20-Mar-96 , 1 , XI' 1 CD I I ~ 27-Mar-96 : : XI :i: I I {:l 03-Apr-96 1 : x : I l 1 O-Apr-96 1 : x : L 17-Apr-96 , 1 x I I I 24-Apr-96 : ,: X I I I 01-May-96 : i XI I I 0B-May-96 : : XI I I 15-May-96 : : : x 1 , I I I 22-May-96 1 , I ,>-, I I j I I I I 29-May-96 .1..-___ __,_ ____ _,_ ____ L__ _ ___,,..~--x FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR JUNE 12, 1996 (5): Consideration of motion to approve the draft Finance, Administration and Human Resources Committee Meeting Minutes of May 8, 1996. Summary Attached is a draft of the Finance, Administration and Human Resources Committee meeting Minutes of May 8, 1996, for approval by the Committee. Staff Recommendation It is recommended that the minutes of the May 8, 1996, Finance, Administration and Human Resources Committee meeting be approved. These minutes were submitted to the Joint Boards at their May 22, 1996 meeting, and no further action is required. J:\WPDOC\FINICRANE\FPC.MTGIFAHR.96\1996.MINICVRMINB.96 REVISED DRAFT MINUTES OF FINANCE, County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Wednesday, May 81 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 May 8, 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: Roger R. Stanton, Vice Chair John C. Cox, Jr., Joint Chair Jan Debay Burnie Dunlap James Flora John M. Gullixson Wally Lynn Thomas Saltarelli William G. Steiner Peer Swan Committee Directors Absent: George Brown, Chair Other Directors Present: John Collins Staff Present: Donald F. McIntyre, General Manager Blake P. Anderson, Assistant General Manager Judith A Wilson, Assistant General Manager Ed Hodges, Director of General Services Admin. David Ludwin, Director of Engineering Gary Streed, Director of Finance Mike Peterman, Director of Human Resources Michelle Tuchman, Director of Communications Steve Kozak, Financial Manager Linda Eisman, Training Manager Dawn McKinley, Sr. Human Resources Analyst Mike White, Controller Isiah Mitchell, Training Supervisor Terri Josway, Safety & Emergency Response Mgr. Others Present: Tom Woodruff, General Counsel (2) APPOINTMENT OF A CHAIR PRO TEM (3) In the absence of Chair Brown, Vice Chair Roger R. Stanton was appointed Chair Pro Tern. PUBLIC COMMENTS No comments were made. Minutes of Finance, Ac· ,1. and Human Resources Committ Page2 May 8, 1996 (4) REPORTS OF THE COMMITTEE CHAIR, GENERAL MANAGER, ASSISTANT GENERAL MANAGER(Sl, 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 Don McIntyre gave a brief verbal report and slide presentation on the proposed upcoming 1996-97 Operating Budget. He noted that the Steering Committee had an opportunity to review progress on the proposed budget last month. Since then, staff has been able to bring the budget down from the proposed 640 FTE to 624 total staffing for this upcoming budget period. Costs per mgd are expected to remain at $555, which is the same cost for mgd as expected for 1995-96. Don announced that the proposed budget will be presented to the Committee at their June 12th meeting. (c) Report of Assistant General Manager -Administration The Assistant General Manager of Administration had no report. Report of Assistant General Manager -Operations The Assistant General Manager of Operations had no report. (d) Report of the Director of Finance/Treasurer The Director of FinancefTreasurer's written report was contained in the agenda package. (e) Report of the Director of Human Resources (f) The Acting Director of Human Resources had no report. Report of the Director of General Services Administration The Director of General Services Administration had no report. (g) Report of General Counsel General Counsel had no report. ) ~~ Minutes of Finance, Ac.,._ .. ,h. and Human Resources Commih ' Page 3 May 8, 1996 (5) APPROVAL OF MINUTES It was moved, seconded and duly carried to approve the draft minutes of the April 10, 1996, meeting of the Finance, Administration and Human Resources Committee. (6) Consideration of PD&C96-17 -Consideration of motion to recommend approval of the requested Capital Outlay Revolving Fund for Fiscal Year 1996-97. David Ludwin handed out two booklets prepared for the Committee's review and reported on the 1996-97 CORF budget. A slide presentation was given by David Ludwin and Gary Streed. Mr. Ludwin reviewed the projects and noted that 85% of the budget would go toward construction, 8% toward planning and research and 7% toward design. Mr. Streed reviewed the costs to the individual Districts, total capital requirements and how these requirements will be met this year without an increase in sewer service fees. Total Capital Improvement Funding is expected to be $44,895,000 this year, an increase of 34% from last year's request. Following discussion, it was moved, seconded, and duly carried to recommend approval of the proposed Capital Outlay and Revolving Fund (CORF) budget. (7) OLD BUSINESS FAHR96-07 Consideration of motion to receive and file status report on Legal Services Committee Activities relative to in-house General Counsel Services. Judy Wilson gave a brief report of the activities to date re the Steering Committee's desire to review in-house General Counsel activities and the formation of the AD Hoc Committee on Legal Services. Judy introduced Greg Mathews who reported in more detail on these activities. Based on various analyses such as cost of proposed in-house legal services, quantitative vs. qualitative issues, staffing utilization, availability, reporting relationships and financial impact, one Attorney, one Paralegal, and one Legal Secretary would be required to operate an in-house office. Duties and responsibilities would focus on the performance of general legal services representing approximately 2,500 hours annually of legal workload. An in-house General Counsel Office is estimated to save the Districts approximately $45,500 annually in offset contract legal fees. Tom Woodruff advised that the possibility of an in-house counsel was looked at one year ago with no changes made. Mr. Woodruff expressed no objection to a study of in-house counsel as a cost-saving method for the Districts. Tom further Minutes of Finance, Ad, , t and Human Resources CommittL _ J Page4 May 8, 1996 advised he is currently working with Marc Dubois, the new Contracts and Purchasing Manager, who filled the position on March 11, 1996. Tom stated that Marc is already doing an excellent job. Following discussion among the Directors, it was moved, seconded and duly carried to receive and file this status report. Director Gullixson indicated he would like this issue placed on the agenda for a future meeting, and perhaps form an Ad Hoc Committee to review attorney billings. FAHR96-11 Consideration of motion to receive and file PIMCO's Second Quarterly Performance Report, Investment Management Program, for the period January 1. 1996 to March 31, 1996. Steve Kozak summarized PIMCO's Second Quarterly Performance Report, Investment Management Program, for the period January 1, 1996 to March 31, 1996, and Callan Associates' second quarterly performance review for the same period. PIMCO is the Districts' contracted external money manager and Callan Associates is the Districts' independent investment advisor. Mr. Kozak advised that market fluctuations resulted in higher interest rates and a drop in the price of securities during the last quarter. The capital gain and loss from the last two quarters have offset one another. PIMCO is in compliance with the Districts' Investment Program. Mr. Kozak advised that there have been changes in the government code which will be incorporated into the Districts' Investment Policy, and will be brought before the Committee in July for their annual review. The Districts will be fully on- line with Mellon Trust, the Districts' Custodial Bank, enabling us to receive "real time" information. It was moved, seconded and duly carried to receive and file this report. FAHR96-26 Consideration of motion to accept staff's recommendation regarding future funding of Management Performance Review Plan. Dawn McKinley, Sr. Human Resources Analyst, provided a follow-up report and slide presentation to her initial report to the FAHR Committee on April 10, 1996. She indicated the FY96/97 merit fund will be distributed in July 1996 according to the FY96/97 Merit Bonus Guidelines. 5.0 percent of the payroll pool (totaling $569,415) was recommended to fund the FY97/98 MPRP reviews in July 1997. Three (3.0%) percent of the pool was proposed to be distributed as a non-base building merit bonus, and 2.0 percent, or an amount equal to CPI, whichever is lower, was proposed to be distributed to provide a base building market adjustment. The actual dollar amounts to be Minutes of Finance, At. .. ,1n. and Human Resources Commi~ Page 5 May 8, 1996 (8) distributed are estimated to be $204,547, to be distributed to employees for meritorious performance which is estimated to be 1.85 percent of the management payroll. Some portion of equity issues will also be met with the merit pool funds. Dawn indicated that this proposal is subject to "meet and confer" with the professional and supervisory bargaining units. Their current contract expires on January 31, 1997. Negotiations will be underway in fall of 1996. The approval of this item will ensure that a pool of money is established for performance awards in July 1997 for continued implementation of a merit pay program, and will provide Board support for a performance-based pay program. After considerable discussion, it was moved, seconded and duly carried to approve staff's recommendation with a 2% funding for the Bonus Pool rather than 3%. There was one nay vote. The Committee requested this item be brought and included with other issues in the meet and confer process. 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.) FAHR96-27 Consideration of motion to receive and file Treasurer's Report for the month of March 1996. The month ended March 1996 Performance Monitoring Reports for Liquid and Long-term Operating Monies indicated that total investments amount to $359,143,505. All Investment Policy requirements are being followed and met. There was no discussion on this item. It was moved, seconded and duly carried to approve and forward this report to the Joint Boards. FAHR96-28 Consideration of motion to accept staff's recommendation re adoption of new health benefit plan. Mike Peterman, Acting Director of Human Resources, reported that staff reviews the health benefit insurance plans on an annual basis to determine if the benefits and costs are consistent with market survey information from other agencies, cities and districts. It was concluded that the Northwestern National Life health plan was significantly overpriced and claims payment experience was less than satisfactory. The Districts' broker-of-record, Robert F. Driver Company, was asked in January to obtain estimates for health, dental and vision insurance. After employee informational meetings, MetraHealth was the clear front runner. Delta Dental provided a quotation which would allow the Districts to convert its self-insured plan to fully insured at a slightly higher rate of $1,000 per month. Minutes of Finance, Ad •.... t and Human Resources Committ~-1 Page 6 May 8, 1996 Staff also requested our broker to investigate vision insurance and is proposing to offer vision coverage to all employees regardless of the plan they choose at a cost of $99,324 annually. Net savings to the Districts after all of these changes are estimated to be $688,687. The Committee expressed dissatisfaction with Robert F. Driver's past performance in obtaining competitive health benefit packages and noted that the Districts have not been well served in this area of insurance. Following discussion among the Directors, it was moved, seconded, and after a hand vote, duly carried to approve staff's recommendation to accept the change in the health benefit plan, but to withhold the vision insurance benefit to the collective bargaining process. The changes are as follows: Revision of Resolution 95-105 to reflect agreement with represented employee units to substitute the Metra Health Point-of-Service plan for the Northwestern National Life medical coverage; fund dependent medical premiums at 80% and employee-only coverage at 100%; convert dental insurance from self-funded to fully-insured through Delta Dental; and amend the Memoranda of Understanding with the Districts' bargaining units, and other plan documents accordingly, effective July 1, 1996. FAHR96-29 Consideration of motion to consider alternatives for renewal of All-Risk Property Insurance (including Fire. Flood and Earthquake Coverage) for FY 1996-97. Steve Kozak gave an overview of the Districts' current All-Risk Property Insurance, including fire, flood and earthquake which expires at the end of June 1996, and presented two renewal options provided by the Districts' broker of record, Robert F. Driver Company. After discussion on this item, it was moved, seconded, and duly carried to authorize staff to bind over our current coverage, and negotiate with Robert F. Driver to reduce the cost of coverage, and report back next month. The Committee further requested that staff provide information on Robert F. Driver's commission structure and what commission they are requesting on each of the insurances they provide us. FAHR96-30 Consideration of a motion to renew Excess Workers· Compensation Insurance for the period May 1996 to May 1999, with the California Municipal Excess Workers' Compensation (CAMEXl Program. Steve Kozak briefly reported that the Districts' Broker-of-Record, Robert F. Driver Company, and staff reviewed Excess Workers' Compensation insurance alternatives and learned that the current policy underwriter, American International Group (AIG), has changed its underwriting philosophy and was Minutes of Finance, A:Jn. and Human Resources Cammi:-) Page 7 May 8, 1996 proposing an approximate 35% increase in renewal rates. Driver considered other insurance carriers and, following negotiations with five firms, secured Continental Casualty Company (CNA) for the CAMEX program effective with the May 1996 renewal. The renewal is for a term of three years with a rate guarantee, but the policy is subject to a payroll audit. No additional premium is due unless payroll is increased by more than 10%. After brief discussion, it was moved, seconded and duly carried to renew Excess Workers' Compensation and Employer's Liability Insurance for the period May 1996 to May 1999 with the California Municipal Works' Compensation (CAMEX) Program for a premium of $22,678, which could be adjusted based on a payroll audit. FAHR96-31 Consideration of responses to the Request for Proposals to develop a General Liability Risk Management Program for the Districts. Steve Kozak reviewed the responses received from the Request for Proposals to develop a General Liability Risk Management Program for the Districts effective July 1, 1996. He further provided a summary comparison of the proposals received from the Special District Risk Management Authority, the California Sanitation Risk Management Authority, and Robert F. Driver Company. In response to questions, Gary Streed and Tom Woodruff advised that every year since 1986 the Committee has evaluated purchasing this insurance, however, premiums have consistently been very high. The rates quoted this year seem very reasonable. After discussion among the Committee members, it was moved, seconded and duly carried to: 1) Select the proposal submitted by Robert F. Driver to secure Comprehensive General Liability and Excess Liability insurance coverage for the Districts with a Self Insured Retention of $100,000, and a premium cost of approximately $118,750, and recommend approval to the Joint Boards of Directors with an effective date of July 1, 1996; and 2) Directed staff to further investigate the issue of "Known Events Risk Transfer." FAHR96-32 Consideration of motion to receive and file quarterly staff Summary Report of Training and for the Quarter ended March 31, 1996. Linda Eisman presented a brief Quarterly Staff Summary Report of Training for the Quarter ended March 31, 1996. She also gave a brief slide presentation. Linda indicated the Districts are in the process of centralizing and improving . I Minutes of Finance, Ad, . I. and Human Resources Commitk Page 8 May 8, 1996 District-wide training by implementing a Districts' Training Plan which includes required safety, technical and other training needs. She reviewed some of the major projects underway such as safety training, certification programs and the MPRP program. It was moved, seconded and duly carried to receive and file this report. FAHR96-33 Consideration of motion to approve payment of final billing amounts for the Landfill Acquisition due diligence consultant team. Blake Anderson, Assistant General Manager-Operations, reviewed the final billing amounts for the consulting team who worked on the proposed acquisition of the Orange County Solid Waste Management System. Payment of these invoices would bring the total amount expended on consulting services for the landfill acquisition project to approximately $401,737.59. Staff and General Counsel efforts are estimated at an additional $100,000. The Board authorized $100,000 of the consulting work performed by Clements Environmental. Clements performed additional work amounting to $69,945.28. No written agreements were made for the work performed by the other two consultants. Blake advised the Committee that the Districts is still waiting for a response from the County regarding refunding our $100,000. The Districts may offer to provide the reports prepared by these consultants to the County. After discussion, it was moved, seconded, and duly carried to: 1. Approve the payment of $69,945.28 to Clements Environmental. 2. Form an Ad Hoc Committee comprised of Directors Swan, Gullixson and Saltarelli to review the billings of Price Waterhouse and Saybrook Capital in more detail. 3. Bring this item back to the FAHR Committee next month. FAHR96-34 Consideration of motion to review and approve the Third Quarter Report prepared by staff for the period ended March 31, 1996. Mike White gave a brief review of the Third Quarter Report of financial and operational expenditures for the period ended March 31, 1996. He advised that 65.74% or $35,747,000 of the 1995-96 net joint operating budget of $54,380,000 has been expended. In addition, the Districts are at only 71.70 % of the target budget of $49,860,000. After a brief discussion on this matter, it was moved, seconded and duly carried to approve the Financial and Operational Report for the third quarter ended March 31, 1996. " '\ ----, Minutes of Finance, Ac,.,, ,,h. and Human Resources Commit\. · Page 9 May 8, 1996 The Committee complimented Mike White for the improved format and information contained in the quarterly report. (9) CLOSED SESSION General Counsel reported to the Committee the need for a closed session, as authorized by Government Code Section 54956.9 to discuss and consider the item that is specified as Item (9)(b) on the published Agenda. The Committee convened in Closed Session at 8:50 p.m. pursuant to Government Code Section 54956.9. At 9:15 p.m. the Committee reconvened in regular session. Confidential minutes of the closed session held by the Finance, Administration and Human Resources 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. The Chair reported that an Ad Hoc Committee comprised of Directors Dunlap, Gullixson and Saltarelli had been formed to review the professional services invoices from R. Craig Scott & Associates, and to report to the FAHR Committee in June. (10) OTHER BUSINESS, IF ANY None. (11) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING No reports were requested. (12) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND A STAFF REPORT Item FAHR96-07 to be brought back at a future meeting. (13) CONSIDERATION OF UPCOMING MEETING DATES AND ITEMS TO BE DISCUSSED AT THOSE MEETINGS The next Committee meeting is scheduled for Wednesday, June 12, 1996. Minutes of Finance, Adi .... l. and Human Resources Committb .... 1 Page 10 May 8, 1996 (14) ADJOURNMENT The meeting was adjourned at approximately 9:20 p.m. =~ Finance, Administration and Human Resources Committee Secretary J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\1996.MIN\MFAHRS.96 ffilm.fil • Written Report •overheads •Slides •Flip Charts Originator~ ~),~A, Department Head Sign Off~ Gary Streed Aillicipaled Time __ _ FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR JUNE 12, 1996 F AH R96-29: Consideration of motion to approve renewal of the Districts' All-Risk Property Insurance Program for 1996-97, including earthquake, flood, personal property and business interruption coverage with: a $200 million All-Risk limit; a $30 million earthquake sub-limit, with deductibles of $25,000 for all perils except earthquake, and 5% per unit ($250,000 min.) for earthquake, for a total premium not to exceed $1.4 million. Summary At the Committee's May meeting, staff reported that the Districts' current All-Risk property insurance, including fire, flood and earthquake coverage, expires at the end of June. Staff further reported that Robert F. Driver Associates, the Districts' Broker of Record, had made preliminary inquiries of the major All-Risk insurance carriers in anticipation of our renewal, and presented two renewal options for consideration by the Districts. The Committee selected Option "A," and directed Robert F. Driver to maintain existing levels of property insurance coverage (i.e., $200 million All-Risk limit, with a $30 million earthquake sub- limit) at a premium similar to that of last year ($1.37 to $1.4 million). The attached schedule presents summary information about the FY 1995-96 All-Risk insurance renewal cycle, including details on commission payments to Robert F. Driver Associates. The latest information from Driver regarding placement commitments with the carriers will be presented to the Committee at the meeting. Commission amounts can be expected to be similar to those of last year. The estimated premium cost for FY 1996-97 is $1.37 million. Staff Recommendation Staff recommends that the Finance, Administration and Human Resources Committee approve renewal of the Districts' All-Risk Property Insurance Program for 1996-97 including earthquake, flood, personal property and business interruption coverage, with a $200 million All-Risk limit, and a $30 million earthquake sub-limit, with deductibles of $25,000 for all perils except earthquake and 5% per unit ($250,000 min.) for earthquake, for a total premium not to exceed $1.4 million. J:IWPDOCIFINICRANEIFPC.MTGIFAHR.96\COVERS.96\FAHR96.29A COUNTY SANITATION DISTRICTS OF ORANGE COUNTY ALL RISK PROPERTY AND EARTHQUAKE INSURANCE PROGRAM FOR FY 1995-96 SCHEDULE OF INSURANCE COMPANIES, PREMIUMS. COMMISSIONS & FEES PARTICIPATION & NAME OF CARRIER ANNUAL PREMIUM A. $7,500.000 PRIMARY LAYER !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 EQ & FLOOD! RU Insurance Co. $2,500,000 $100,000 C. $10.000.000 EXCESS OF $10,000.000 LAYER (ALL RISK INCLUDING EQ & 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 D. $5,000.000 EXCESS OF $20,000,000 LAYER (ALL RISK INCLUDING EQ & 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 LA YER (NO EARTHQUAKE) Fireman's Fund Ins. Co. $155,000,000 TOTAL COMMISSION (Included in Total Premium) TOTAL PREMIUM CIGA Taxes and Fees 1995 GRAND TOTAL PREMIUM COST INSCH495.XLS $87,500 $90,000 $81,000 $1,358,000 $5,907 $13,544 $1,377,451 COMMISSION $10,500 $8,750 $14,000 $5,000 $8,125 $2,437 $3,250 $3,250 $1,625 $6,250 $4,375 $4,500 $4,075 $76,137 5/29/96 Format • Written Report •overheads •Slides • Flip Charts Originator __ _ Department Head Sign Off ~nor/ ~ Anticipated nme 5 min. FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR JUNE 12, 1996 FAHR96-35: Consideration of motion to receive and file Treasurer's Report for the month of April 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 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 the1 Investment Policy requirements are being complied with and performance to date exceeds the index rates. Historical cost and the current market values, "mark-to-market," are shown as estimated by both PIMCO and Mellon Trust. The slight differences are caused by differing assumptions regarding marketability at the estimate date. Attached are schedules showing the detail and summary for both the short-term and long-term portfolio investments. 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 $19,209,049 1,908,757 51,893,683 280,224,589 8,399 33,516,846 $386,761 ,323 Staff recommends the Committee receive, approve and forward this report to the Joint Boards. J:\WPDOC\FINICRANEIFPC.MTG\FAHR.96\COVERS.96\FAHR98.35 June 12, 1996 400 350 300 I! .!250 0 C '5200 • C ~ 150 :iE 100 50 CSDOC TOTAL CASH & INVESTMENTS 1995 -1996 0 ~--+-----,£-----r"----,,C-----r'----+----r=------,-,=-----r"--------,"'--------;"--.../ June 30 July 31 Aug. 31 Sept. 30 Oct. 30 Nov. 30 Dec. 31 Jan. 31 Feb. 29 Mar. 31 Apr. 30 J:\WPOOC\FIN\CRANE\FPC.MTGIFAHR.96\COVERS.961FAHR96.35 MONTHLY REPORT COUNTY SANITATION DISTRICTS OF ORANGE COUNTY INVESTMENT AUNAGEMENT PROGRAM PrnCO'S PERFORMANCE MONITORING & REPORTING (for the month ending April 30, 1996) Liquid Operating Monies 14.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • PIMCO • Mellon 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 Reverse Repos: ( see attached schedule) 14.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days: 14.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality: 14.1.7 SECURITIES BELOW "A" RATING % of Portfolio Below "A": 14.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance" 14.1.9 PORTFOLIO PERFORMANCE Portfolio Total Rate of Return: 1 Month: 3 Months: 12 Months: Year-to-Date: Index Total Rate of Return: 1 Month: C:IOFFICE\WPWIMWPDOCS'l'IMCORPT1LQDAPR.WPD $52,143,374 $52,161,744 $52,218,994 ) .10 .25 $52,143 (.10%) - 0% 82% AAA 0% .2 .44 1.31 -·----- 1.77 .41 MONTHLY REPORT COUNTY SANITATION DISTRICTS OF ORANGE COUNTY INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ending April 30, 1996) Long Term Operating Monies 14.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • PIMCO • Mellon 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 Reverse Repos: ( see attached schedule) 14.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days: 14.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality: 14.1.7 SECURITIES BELOW "A" RATING % of Portfolio Below "A": 14.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance" 14.1.9 PORTFOLIO PERFORMANCE Portfolio Total Rate of Return: 1 Month: 3 Months: 12 Months: Year-to-Date: Index Total Rate of Return: 1 Month: C:,,OFFICE\WPWIMWPDOCSIJ'IMCORPT'LTAPR.WPD $279,155,927 $279,640,896 $282,838,191 - 2.58 2.3 $7,202,222 (2.58%) 0% NA AAA 0% \ ~ -.30 -1.46 ------- -.56 -.11 OCSG000l00 CSDOC-CONSOLIDATED PORTFOLIO DISTRIBUTION CASH & CASH EQUIVALENTS CASH COMMERCIAL PAPER -DISCOUNT FEDERAL HOME LOAN MORTGAGE -LE FNMA ISSUES -LESS THN lYR FED HM LOAN BNK -LESS THN lYR FEDERAL FARM CREDIT BANK -LES BSDT RESERVE DEPOSIT ACCOUNTS CANADIAN GOVERNMENT SHORT TERM TOTAL CASH & CASH EQUIVALENTS FIXED INCOME SECURITIES U.S. GOVERNMENTS U.S. AGENCIES BANKING & FINANCE INDUSTRIAL TOTAL FIXED INCOME SECURITIES OTHER PORTFOLIO ASSETS PAYABLES/RECEIVABLES TOTAL OTHER PORTFOLIO ASSETS NET PORTFOLIO ASSETS MELLON TRUST PORTFOLIO SUMMARY BY SECTOR 30-APR-1996 % OF UNREALIZED COST MARKET VALUE TOTAL GAIN/LOSS -1. 43 -1.43 0.00% 0.00 21,797,187.75 21,797,187.75 6.57% 0.00 9,419,085.01 9,419,085.01 2.84% 0.00 11,653,544.89 11,653,544.89 3.51% 0.00 3,051,473.81 3,051,473.81 0.92% 0.00 9,429,688.89 9,429,688.89 2.84% 0.00 807,677.00 807,677.00 0.24% 0.00 6,375,807.58 6,375,807.58 1.92% 0.00 ------------------------------------------------------------- 62,534,463.50 62,534,463.50 18.85% 0.00 91,326,196.85 90,048,340.00 27.14% -1,277,856.85 134,518,625.00 132,849,312.00 40.04%--1,669,313.00 29,677,836.61 29,657,966.55 8.94%--19,870.06 14,061,150.00 13,780,695.00 4.15%--280,455.00 ------------------------------------------------------------- 269,583,808.46 266,336,313.55 80.27% -3,247,494.91 2,931,862.51 2,931,862.51 0.88% 0.00 ------------------------------------------------------------- 2,931,862.51 2,931,862.51 0.88% 0.00 ESTIMATED ANNUAL INCOME 0.00 0.00 0.00 0.00 0.00 0.00 30,287.89 0.00 ---------------- 30,287.89 6,126,875.00 8,700,040.00 2,085,397.00 1,202,250.00 ---------------- 18,114,562.00 0.00 ---------------- 0.00 .... BASE: USD HBll00 CURR YIELD 0.00 0.00 0.00 0.00 0.00 0.00 3.75 0.00 ------- 0.05 6.80 6.55 7.03 8.72 ------- 6.80 0.00 ------- 0.00 •=========-======= ======== -======= =•====== m=-============== ================ ======= 335,050,134.47 331,802,639.56 100.00% -3,247,494.91 18,144,849.89 5.47 Page 1 MELLON TRUST OCSG000100 CSDOC-CONSOLIDATED PORTFOLIO DETAIL BY SECTOR BASE: USO 30-APR-1996 HBllOO MARKET % OF UNREALIZED ESTIMATED CUR SHARES/PAR SECURITY DESCRIPTION PRICE MARKET VALUE TOTAL COST GAIN/LOSS ANNUAL INCOME YLD CASH & CASH EQUIVALENTS CASH 0 CASH 1.000 -1. 43 0.00 -1.43 0.00 0.00 0.0 ---------------------------------------------------------------------------- SUBTOTAL CASH -1.43 0.00 -1. 43 0.00 o.oo 0.0 COMMERCIAL PAPER -DISCOUNT 1,800,000 AMERICAN TEL & TL DISC 98.469 1,772,437.50 0.53 1,772,437.50 0.00 0.00 0.0 08/09/1996 5,000,000 AMERITECH CORP DISC 97.355 4,867,769.44 1.47 4,867,769.44 0.00 0 .00 . 0 06/20/1996 900,000 AMOCO CO DISC 98.983 890,847.50 0.27 890,847.50 0.00 0.00 o.o 06/13/1996 1,200,000 CANADIAN WHEAT BD DISC 98.640 1,183,685.33 0.36 1,183,685.33 0.00 0.00 0 .0 07/10/1996 300,000 DU PONT DE NEMOUR DISC 98.942 296,824.50 0.09 296,824.50 0.00 o.oo 0.0 05/31/1996 700,000 FORD MTR CR CO DISC 98.644 690,506.25 0.21 690,506 .·25 0.00 0.00 0.0 06/26/1996 1,300,000 GENERAL ELEC CAP DISC 98.336 1,278,373.06 0.39 1,278,373.06 0.00 0.00 0.0 08/06/1996 1,100,000 MINNSTA MNG & MFG DISC 99.367 1,093,036.39 0.33 1,093,036.39 0.00 0.00 0.0 05/21/1996 500,000 PITNEY BOWES CC DISC 99.027 495,132.50 0 .15 495,132.50 0.00 0.00 0.0 06/14/1996 1,000,000 PITNEY BOWES CC DISC 98.787 987,872.78 0.30 987,872.78 0 .00 0.00 , . 0 07/22/1996 2,000,000 SOUTHWSTN PUB SVC DISC 99.392 1,987,836.67 0.60 1,987,836 .67 0 .00 0 .00 o.o 05/20/1996 500,000 SOUTHWSTN PUB SVC DISC 99.465 497,325.00 0.15 497,325.00 0.00 o.oo 0.0 05/03/1996 2,800,000 WAL MART STORES DISC 99.665 2,790,608.33 0.84 2,790,608.33 0.00 0.00 0.0 05/22/1996 3,000,000 WESTERN AUST TRSY DISC 98.831 2,964,932.50 0.89 2,964,932.50 0.00 0.00 0.0 05/15/1996 SUBTOTAL COMMERCIAL PAPER -DISCOUNT 21,797,187.75 6.57 21,797,187.75 0.00 0.00 0.0 FEDERAL HOME LOAN MORTGAGE -LESS THAN 1 YR Page 1.1 OCSG000l00 CSDOC-CONSOLIDATED MELLON TRUST PORTFOLIO DETAIL BY SECTOR 30-APR-1996 SHARES/PAR SECURITY DESCRIPTION 6,500,000 FED HOME LN MTG CORP DISC ,NYS MAT 05/29/1996 3,000,000 FHLMC DISC NTS MAT 05/16/1996 MARKET PRICE 99.305 98.808 SUBTOTAL FEDERAL HOME LOAN MORTGAGE FNMA ISSUES -LESS THN lYR 1,800,000 FEDERAL NATL MTG ASSN DISC 06/14/1996 10,000,000 FEDERAL NATL MTG ASSN DISC NTS MAT 05/14/1996 98.871 98.739 SUBTOTAL FNMA ISSUES -LESS THN lYR FED HM LOAN BNK -LESS THN lYR 3,100,000 FEDERAL HOME LN BK CONS DISC MAT 08/12/1996 98.435 SUBTOTAL FED HM LOAN BNK -LESS THN FEDERAL FARM CREDIT BANK -LESS THAN 1 YEAR 2,500,000 FEDERAL FARM CR BK CONS DISC 99.596 MAT 05/28/1996 7,000,000 FEDERAL FARM CR BK CONS DISC 99.140 MAT 06/28/96 SUBTOTAL FEDERAL FARM CREDIT BANK - BSDT RESERVE DEPOSIT ACCOUNTS 807,677 BSDT RESERVE DEPOSIT ACCOUNT- PUBLIC II 100.000 SUBTOTAL BSDT RESERVE DEPOSIT ACCOUN CANADIAN GOVERNMENT SHORT TERM 4,397,000 ALBERTA PROVINCE DISC 05/08/1996 2,100,000 CANADA GOVT DISC 06/03/1996 97.669 99.110 MARKET VALUE 6,454,846.67 2,964,238.34 9,419,085.01 1,779,681.00 9,873,863.89 11,653,544.89 3,051,473.81 3,051,473.81 2,489,888.89 6,939,800.00 9,429,688.89 807,677.00 807,677.00 4,294,488.83 2,081,318.75 Page 2.1 %' OF TOTAL 1.95 0.89 2.84 0.54 2.98 3.51 0.92 0.92 0.75 2.09 2.84 0.24 0.24 1.29 0.63 COST 6,454,846.67 2,964,238.34 9,419,085.01 1,779,681.00 9,873,863.89 11,653,544.89 3,051,473.81 3,051,473.81 2,489,888.89 6,939,800.00 9,429,688.89 807,677.00 807,677.00 4,294,488.83 2,081,318.75 UNREALIZED GAIN/LOSS 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 BASE: USD HBll00 ESTIMATED CUR ANNUAL INCOME YLD 0.00 0.0 0.00 0.0 0.00 0.0 0.00 ,,o / 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 ) 0.00 0.0 30,287.89 3.7 30,287.89 3.7 0.00 0.0 0.00 0.0 OCSG000l00 CSDOC-CONSOLIDATED SHARES/PAR SECURITY DESCRIPTION MELLON TRUST PORTFOLIO DETAIL BY SECTOR 30-APR-1996 MARKET PRICE % OF MARKET VALUE TOTAL SUBTOTAL CANADIAN GOVERNMENT SHORTT 6,375,807.58 1.92 TOTAL CASH & CASH EQUIVALENTS FIXED INCOME SECURITIES U.S. GOVERNMENTS 75,500,000 US TREASURY NOTES 07.125% 09/30/1999 DD 09/30/94 13 ,000,000 US TREASURY NOTES 05.750% 10/31/2000 DD 10/31/95 SUBTOTAL U.S. GOVERNMENTS U.S. AGENCIES 10,000,000 FED NATL MTG ASSN MTN 5.640% 02/20/2001 DD 02/20/96 39,600,000 FEDERAL HOME LN BK CONS BOS 6.490% 09/13/2000 DD 09/13/95 15,000,000 FEDERAL HOME LN MTG CORP DEBS 5 .990% 03/06/2001 DD 03/06/96 25,000,000 FEDERAL HOME LN MTG DEB 6.720% 10/02/2000 DD 10/02/95 25,000,000 FEDERAL NATL MTG ASSN DEB 6 .850% 05/26/2000 DD 05/26/95 20,000,000 FEDERAL NTAL MTG ASSN 6 .375% 10/13/2000 DD 10/10/95 62,534,463.50 18.85 102.484 77,375,420.00 23.32 97.484 12,672,920.00 3.82 90,048,340.00 27.14 95.687 9,568,700.00 2.88 98.922 39,173,112.00 11 .81 96.984 14,547,600.00 4 .38 99 .255 24,813,750.00 7.48 100.047 25,011,750.00 7 .54 98.672 19,734,400.00 5.95 COST 6,375,807.58 62,534,463.50 78,223,618.72 13,102,578.13 BASE: USD HBll00 UNREALIZED ESTIMATED CUR GAIN/LOSS ANNUAL INCOME YLD 0.00 0.00 0.0 0.00 30,287.89 0.0 -848,198.72 5,379,375.00 1 -429,658.13 747,500.00 5.9 91,326,196.85 -1,277,856.85 6,126,875.00 6.8 9,593,750.00 -25,050.00 564,000 .00 5.8 39,890,500.00 -717,388.00 2,570,040 .00 6.5 14,554,687.50 -7,087.50 898,5qo.oo 6.1 25,000,000.00 -186,250.00 1,680,000.00 6.7 25,351,562.50 -339,812.50 1,712,500.00 6.8 20,128,125 .00 -393,725.00 1,275,000 .00 .4 ---------------------------------------------------------------------------- SUBTOTAL U.S. AGENCIES 132,849,312.00 40 .04 134,518,625 .00 -1,669,313.00 8,700 ,040 .00 6 .5 BANKING & FINANCE 1,500,000 CHRYSLER FINL MTN TR# 00201 101.564 1,523,460.00 0.46 1,534,950 .00 -11,490.00 122,400 .00 8.0 8.160% 01/31/1997 DD 01/11/95 465,000 CHRYSLER FINL MTN TR# 00224 101.607 472,472.55 0 .14 475,972.61 -3,500.06 37,572 .00 7.9 8.080% 01/31/1997 DD 01/31/95 1,500,000 CHRYSLER FINL MTN TR# 00258 101 .287 1,519,305.00 0.46 1,522,140.00 -2,835.00 110,700 .00 7.2 7.380% 03/17/1997 DD 03/03/95 2,900,000 CHRYSLER FINL MTN TR# 00306 101.641 2,947,589.00 0.89 2,952,896.00 -5,307.00 210,830.00 7 .1 Page 3.1 MELLON TRUST OCSG000l00 CSDOC-CONSOLIDATED PORTFOLIO DETAIL BY SECTOR SHARES /PAR SECURITY DESCRIPTION 1,000,000 7,10 0,00 0 7.270% 04/13/1998 DD 04/13/95 CHRYSLER FINL MTN TR# 00335 6.260% 07/20/1998 DD 07/18/95 FORD MOTOR CR MTN TR# 00177 VAR/RT 03/30/1999 DD 03/30/94 4 ,000 ,00 0 FORD MTR CR MTN TRANCHE #TR 96 FLTG/RT 11/09/1998 DD 11/08/93 3,000,000 GMAC MED TERM NTS 8.625% 1/10/2000 DD 1/10/95 3,700 ,000 GENERAL MTRS ACCEP MTN TR00324 8 .375% 02/03/1999 DD 0/03/95 1,000,0 00 LEHMAN BROS INC SR SUB NTS 7.000% 5/15/1997 DD 5/27/94 2,000 ,000 SEARS DC CORP MTN SER II 9.000% 08/01/1996 DD 08/01/91 1,000 ,000 SEARS ROEBUCK MTN# TR 00491 7.690% 02/27/1998 DD 02/28/95 SUBTOTAL BANKING & FINANCE INDUSTRIAL 1,500,000 CHRYSLER CORP DEB 10.400% 08/01/1999 9,000,000 PHILIP MORRIS COS NT 9.250% 02/15/2000 2,500 ,000 SEARS ROEBUCK & CO NT 8.550% 08/01/1996 SUBTOTAL INDUSTRIAL TOTAL FIXED INCOME SECURITIES OTHER PORTFOLIO ASSETS PAYABLES /RECEIVABLES 0 INTEREST RECEIVABLE MARKET PRICE 99.655 99.156 100.599 106.205 104.542 100.644 102.520 102.351 104.735 107.718 100.602 1 .000 SUBTOTAL PAYABLES/RECEIVABLES 3 0-APR-1996 % OF MARKET VALUE TOTAL 996,550.00 0.30 7,040,076.00 2.12 4,023,960.00 1.21 3,186,150.00 0.96 3,868,054.00 1.17 1,006,440.00 0.30 2,050,400.00 0.62 1,023,510.00 0.31 29,657,966.55 8.94 1,571,025.00 0.47 9,694,620.00 2.92 2,515,050.00 0.76 13,780,695.00 4.15 266,336,313.55 80 .27 2,931,862.51 0.88 2,931,862.51 0.88 Page 4.1 .. • BASE: USD HBll00 UNREALIZED ESTIMATED CUR COST GAIN/LOSS ANNUAL INCOME YLD 993,160.00 3,390.00 62,600 .00 6.2 6,999,748.00 40,328.00 402,570 .00 5.7 3,970,480.00 53,480.00 243,200.00 6.0 3,227,070.00 -40,920.00 258,750 .00 8.1 3,911,640 .00 -43,586.00 309,875 .00 .. . 0 1,007,520.00 -1,080.00 70,000 .00 6.9 2,050,400.00 0.00 180,000.00 8.7 1,031,860.00 -8,350 .00 76,900 .00 7.5 29,677,836.61 -19,870.06 2,085,397.00 7.0 1,603,320.00 -32,295.00 156,000.00 9.9 9,903,780.00 -209,160.00 832,500.00 8 .5 2,554,050.00 -39,000.00 213,750.00 , 5 ) 14,061,150.00 -280,455.00 1,202,250.00 8.7 269,583,808.46 -3,247,494.91 18,114,562.00 6.8 2,931,862.51 0 .00 0 .00 0 .0 2,931,862.51 0.00 0.00 0.0 OCSG000l00 CSDOC-CONSOLIDATED SHARES/PAR SECURITY DESCRIPTION TOTAL OTHER PORTFOLIO ASSETS NET PORTFOLIO ASSETS MELLON TRUST PORTFOLIO DETAIL BY SECTOR 30-APR-1996 MARKET PRICE MARKET VALUE 2,931,862.51 % OF TOTAL 0.88 331,802,639.56 100.00 Page 5.1 COST 2,931,862.51 BASE: USD HBll00 UNREALIZED ESTIMATED CUR YLD GAIN/LOSS ANNUAL INCOME 0.00 0.00 0.0 335,050,134.47 -3,247,494.91 18,144,849.89 5.4 E2!!!w • Written Report •Overheads •Slides • Flip Charts Department Head Sign Gary Streed Anticipated Time 15 Min. FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR JUNE 12, 1996 FAH R96-36: Consideration of motion recommending approval of the proposed 1996-97 Joint Works Budgets and forwarding them to the Joint Boards as follows: Summary Joint Works Operating/Working Capital Worker's Compensation Self-Insurance Public Liability Self-Insurance Joint Works Capital Outlay Revolving $48,700,000 275,000 385,000 44,895,000 A proposed Budget for 1996-97 is enclosed for the Committee members' consideration. It has been presented to the Planning, Design and Construction Committee and the Operations, Maintenance and Technical Services Committee for their review. If approved by the Finance, Administration and Human Resources Committee, the proposed Budget for 1996-97 will be forwarded to the Joint Boards. The entire budget, including the individual Districts, is being presented for Board consideration in June. Although each Standing Committee will have an opportunity to review the proposal, it remains the responsibility of the Finance, Administration and Human Resources Committee to recommend approval of the Joint Works budgets. Staff Recommendation Staff recommends approval of the proposed Joint Works Operating, Joint Works Capital and Self-Insurance Fund Budgets for 1996-97. J:\WPOOC\FIN\CRANE\FPC.MTGIFAHR.96\COVERS.96\FAHR96.36C June 12, 1996 STAFF REPORT FAHR96-36: 1996-97 Budget Recommendations A proposed Budget for 1996-97 is enclosed for the Committee members' consideration. It has been presented to the Planning, Design and Construction Committee and the Operations, Maintenance and Technical Services Committee for their review. If approved by the Finance, Administration and Human Resources Committee, the proposed Budget for 1996-97 will be forwarded to the Joint Boards. Prior to last year, the Fiscal Policy Committee had approved the Joint Works Budgets in parts, then recommended the total Joint Works Operating, Capital and Self-Insurance Fund Budgets to the Executive Committee. When the Joint Works Budgets were approved by the Joint Boards, they were included in the individual Districts' budgets which were considered the following month. This year, for the second time, the entire budget, including the individual Districts, is being presented for consideration in June. Although each Standing Committee will have an opportunity to review the proposal, it remains the responsibility of the Finance, Administration and Human Resources Committee to recommend approval of the Joint Works budgets. The general format of the budget document has been retained from 1995-96. It is our intent that this format will be more informative and useful for the Directors and others who use the document. Section 4, "Summary-Joint Operating," Section 7, "Self- Insurance Funds," and Section 8, "Joint Capital Improvement Program," are the three sections that contain the budgets the Committee has approved in the past. . There is extensive text, and even pictures for the capital projects, in each of these sections. Two additional sections contain further detail. Section 5, "Division Budgets," includes four pages for each division. These pages show the organizational structure, staffing trends, a service overview, an analysis of the budget changes and a Joint Works Operating expenditure trend. This level of detail is intended to better explain what services are performed by each Division and Department. Section 9, "Debt Service," includes the background and retirement schedules for all of the Districts' Certificates of Participation. Staffing detail, Gann appropriation lin_,it, budget glossary, and miscellaneous statistics are included in the "Appendices." The Self-Insurance Fund budgets and overview are found in Section 7. CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e {714) 962-2411 • FAHR93-36 Page2 June 12, 1996 The following table summarizes the total Joint Works budgets for operations, maintenance and capital improvements for the past two years and the proposals for 1996-97: Approved Approved Proposed 1994-9S 1995-96 1996-97 Joint Operating Fund $49,542,000 $54,380,000 $48,700,000 Capital Outlay Revolving Fund 67,805,000 33,530,000 44,895,000 Seff-fnsurance Funds 904,000 1,016.000 660,000 Total 1116.251,000 $68,926.000 $94,255,000 Percent Change from 1993-94 (4.44%) (28.14%) (23.83%) Percent Change from 1994-9S (24.80%) (20.29%) Percent Change from 1995-96 5.99% -- While this Committee has not been responsible for approving or reviewing the individual District budgets in the past, it is charged with the overall borrowing/financial plan. The proposed budget again includes no COP issue for 1996-97, instead we are funding the capital improvement program from reserves. Delaying borrowing until next year allows us to postpone user fee increases to repay the debt and avoid higher required revenue ratios. The effect on budgeted reserve levels is shown below: Approved Approved Proposed 1994-9S 1995-96 1996-97 Beginning Reserves $435,401,000 $332,850,000 $365,538,000 Ending Reserves 493,145,000 314,166,000 347,386,000 Future projected borrowings can be seen in Section 3, Page 12 on line 69 of the All Districts Summary Cash Flow Statement, and Reserve balances are on the following page on lines 89 and 99. Staff will review the Joint Works and Self-Insurance Fund Budget recommendations and the rest of the document at the meeting. Recommendation Staff recommends approval of the proposed Joint Works Operating, Joint Works Capital and Self-Insurance Fund Budgets for 1996-97. GGS:lc J:IWPDOC\FINICRANE\FPC.MTGIFAHR.98\STAFFRPT.8SISRFAHR96.36 r ~ • Written Report •Overheads •Slides • Flip Charts Anticipated Time __ _ FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR JUNE 12, 1996 FAHR96-37: Consideration of motion to receive and file staff report regarding current commission-based compensation structure for Districts' Broker of Record. Summary In considering proposed insurance coverage for All-Risk Property insurance and General Liability insurance at their May 8, 1996 meeting, the Finance, Administration & Human Resources Committee discussed the subject of compensation paid to the Districts' Broker of Record, Robert F. Driver Associates. The Committee directed staff to review the current commission structure and return to the Committee in June with a report summarizing the findings. Compensation Structure In May 1992, following a competitive RFP process involving large insurance brokerage firms, the Joint Boards selected Robert F. Driver (Driver) to serve as the Broker of Record for the Districts' property/casualty insurance needs. Driver was to be compensated for their services on the basis of the insurance industry's standard commission practices. At that time, staff recommended that compensation be commission-based because it was felt that this approach would enable the Districts to receive support services without incurring additional fees or hourly charges. Staff believed that the commission structure would produce a lower overall fee for services. In August 1993, the Joint Boards approved revised commission rates for Driver. These changes resulted in Driver's overall commission rate being lowered from 10.4% in 1992-93, to 7.8% in 1993-94. Today's commission rate structure remains essentially the same. Driver's overall commission rate for the 1995-96 renewal cycle was 6.4%. The attached table shows the comparative changes in premiums and commissions from 1992-93 to 1995-96, by type of policy. In late 1993, Robert F. Driver also assumed Broker of Record responsibilities relating to employee health care insurances. At that time, we were self-insured for indemnity-type coverage and also offered two HMOs. Driver received a quarterly employee benefits consulting fee of $5,400 from the time they began providing employee health insurance broker services in late 1993, until June 1995. The following information is presented for placement of employee medical insurance, since we have reinstated a purchased indemnity type of plan: Annual Employee Health Effective Commission % Commission Plan Date Amount Northwestern National 1 Feb 94 3.0 $72,000 Proposed MetraHealth 1 July 96 2.0 $30,000 Broker of Record Request for Proposal As was reported at the May FAHR Committee meeting, staff is preparing a Request for Proposals (RFP) for insurance broker services. In order to maximize selection alternatives for the Districts, the RFP is being configured to allow firms to propose to provide services for liability, property, casualty & miscellaneous insurances, and/or employee health insurance. In addition, the RFP will request firms to provide compensation proposals under both commission and flat fee structures. Staff Recommendation Receive and file this report. J:\WPDOC\FIN\CRANE\FPC.MTGIFAHR.961COVERS.96\FAHR96.37 FAHR96-37 JUNE 12, 1996 REVIEW OF CURRENT COMPENSATION STRUCTURE FOR ROBERT F. DRIVER ASSOCIATES (PROPERTY/CASUAL TY INSURANCE) I 1992-93 COMPENSATION I 1993-94 COMPENSATION I 1994-95 COMPENSATION ;:~:, ' e;• T~-:of P~iillx, Premium Commission Commission Premium Commission Commission Premium Commission Commission "' Amount "' Amount "' Amount Ptopert? .. "$645,169 10% $63,750 "$1,097,512 7.7% $80,000 $1,117,500 7.05% $78,784 EXC8$S livorkeis'C~mp 36,775 10% 3,676 ... 24,491 10.0% 2,449 29,436 0.00% """"3,590 ~~~fp~rf~i~. 3,706 20% 741 """2,011 20.0% 402 !l,670 20.0% 934 Soller,,~ Ma~lilntiry 77,496 15% 11,625 ""'49,287 15.0% 7,393 64,544 15.0% 12,682 trafei,•'1d.-64~~· ··o 0% 0 ""780 15.0% 117 0 0.0% 0 c;c,ilr'M.ol'.construct1~ ~ N/A N/A .... 60,000 10.0% ..MQ2 ~ NIA NIA :, --- Tami $763,146 12J"' $79,792 $1,234.081 ~% $96,361 $1,234,150 ~% $95,989 ,n 1nclu<1el r~g.,nd F~ , ~iin•Y~i:P~j,ai~ efi,rriiuni (93-96)-... " ,,· ~"T~rm'f~mlum Through·31]/91l. ;, ,,i•. , , ·.f ' · . .... Es~ pplY,~~ .oiJ pla(lned FY,}99~~-1-~•v,•'cOl'\ffllCII~~; p(o]octs and current engineer esjlmatos, •~"Flat t::harge Included in Premium :?, · . •• .(<:· -:-;: J:\WPDOCIFINICRANE'IFPC.MTGIFAHR.88\COVERS.86\FAHRIM!.37 .. ATTACHMENT J I 1995-96 COMPENSATION Premium Commission Commission 'I(, Amount $1,358,000 5.6" $76,137 22,678 12.5% 2,834 4,670 20.0% 934 77,377 15.0% 11,606 0 0.0% 0 74.284 1.Q.Q% ~ $1,537,009 ~% $~9~ Formal • Written Report •overheads •Slides • Flip Charis Department Head Sign FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR June 12, 1996 FAHR96-38: Consideration of motion to accept the proposal submitted by J.D. Summary Edwards; authorize staff to enter into negotiations with J.D. Edwards for a new financial information system; and to present a negotiated agreement, in an amount not to exceed $1,525,000, to the Joint Boards for approval at the July 24, 1996 meeting. The process of acquiring a new financial infonnation system began with the completion of the request for proposal (RFP) by Deloitte & Touche in October 1995. Kerry Consulting Group (KCG) was selected to complete Phase Ill, Selection Process for the Finance lnfonnation System Hardware and Software, and Phase IV, Implementation and Acceptance of the Selected Hardware and Software Solutions. After simplifying the RFP prepared by Deloitte & Touche, KCG released it to over 50 vendors on December 8, 1995. Proposals were due back to the Districts by January 18, 1996. Three vendors submitted proposals, of which only one was deemed to be complete. Staff made the decision to further revise the RFP and rerelease it. An initial screening RFP was released on February 12, and was due back to the Districts by March 19. Five vendors submitted initial proposals and committed the necessary resources in responding to the Secondary Disclosure, which was due on May 8. A computer evaluation team, consisting of 13 staff members representing the different software applications used throughout the Districts, was fanned to further evaluate the vendor proposals by making on-site visits at other local government installations. Site visits narrowed the field to three vendors. J.D. Edwards was the only vendor able to demonstrate all required computer module applications, and was the best solution of the three. On May 23, 1996, the Evaluation Team unanimously recommended J.D. Edwards. Although J.D. Edwards was the second lowest priced vendor, they did rank number one when evaluating the three firms based on a price per functionality point system. Budget Impact The proposed 1996-97 Capital Outlay Revolving Fund budget includes a total of $1,700,000 for a new FIS over the next two years. Staff Recommendation Staff recommends that the Finance, Administration, and Human Resources Committee accept the proposal submitted by J.D. Edwards, authorize staff to enter into negotiations with J.D. Edwards for a new financial information system, and to present a negotiated agreement, in an amount not to exceed $1,525,000, to the Joint Boards for approval at the July 24, 1996 meeting. J:\WPDOC\FIN\CRANE\FPC.MTGIFAHR.96\COVERS.98\FAHR96.38 June 12, 1996 STAFF REPORT FAHR96-38: Selection of Financial Information System History The existing financial information system was designed in 1977 and its useful life cycle has expired long ago. The current system has limited processing capability, a lack of disk storage space, a lack of corporate support for the operating system, and an inability to accommodate new users and applications. In Ernst & Young's review of the Districts' Finance Function in July 1995, no single issue arose more often than the limitations of the financial information system. In their report, Ernst & Young noted that the current system lacks key functionality including a report generator, on-line processing, and the ability to establish automated standard journal entries. KPMG Peat Marwick's Internal Control Report dated June 10, 1995, concluded that the Districts would benefit from an integrated financial information system that combined the Human Resource and Payroll functions. Such a system would eliminate duplication and ensure consistency of Human Resource and Payroll information. Their report also mentioned the need for an encumbrance system and a dynamic job cost accounting system that would allow for increased visibility of budgetary spending, and reduce the possibility of certain projects exceeding budgets. The formal process of acquiring a new financial information system began in February 1994 with a professional consulting agreement with Deloitte & Touche to perform a financial information needs assessment {Phase I) and for the development of specifications for a formal request for proposal (Phase II). Upon the completion of the request for proposal (RFP) by Deloitte & Touche in October 1995, Kerry Consulting Group (KCG) was selected to complete Phase Ill, Selection Process for the Finance Information System Hardware and Software, and Phase IV, Implementation and Acceptance of the Selected Hardware and Software Solutions. KCG's assessment of the RFP prepared by Deloitte & Touche was that it was very thorough in identifying the functionality requirements of the new system. However, the 230 pages of narrative responses being required of the proposing FIS vendors was not vendor-friendly. KCG also pointed out that the FIS market is currently a seller's market CSDOC e P.O.Box8127 e FountainValley,CA92728-8127 e (714)962-2411 FAHR96-38 Page2 June 12, 1996 and vendors are responding only to those RFP's that require little time to complete and provide the highest probability of being selected. KCG, therefore, converted the Deloitte & Touche RFP from a narrative response format to an objective checklist response format in order to encourage participation. The RFP was released to over 50 vendors on December 8, 1995, with proposals due back to the Districts by January 18, 1996. About 10 vendors made inquiries on the RFP process but only one vendor actually made an on-site visit. By January 25, 1996, only three vendors submitted proposals of which only one was deemed to be complete. Staff and KCG were disappointed in the low number of proposals received. Two factors contributing to the low response were (1) the process was conducted over the Christmas and New Year Holidays; a time period where a lot of vendor account representatives were scheduled for vacations and; (2) the revised RFP was still too complex to entice responses from vendors. Staff and KCG were uncomfortable focusing in on only one FIS vendor. We believed that a higher number of responses would result in a better representation of what was currently available in state-of-the-art financial information systems. Staff then made the decision to extend the RFP deadline, and further simplify and reissue the RFP. The RFP was broken down into two components. The first component was issued as an initial screening, limited the number of functionality questions to the 20 most critical per financial module, and required that vendors only identify the recommended hardware platform configuration without committing to price. The secondary disclosure process required the answers to the remaining functionality questions and fixed pricing on the proposed hardware solution. The initial screening was released on February 12 and was due back to the Districts by March 19. Again, the initial RFP disclosure was issued to more than 50 vendors. About 12 vendors became actively involved in the process by either calling or making on-site visits. Five vendors submitted initial proposals and, after finding out that their chances of winning the award were now up to 20 percent, all committed the necessary resources in responding to the Secondary Disclosure, which was due on May 8. Of the five vendors submitting proposals, two withdrew during the site visitation phase of the process. The proposals of the three remaining vendors were deemed to be complete and consisted of: • J.D. Edwards and Company ............................... $1,385,874 • PeopleSoft ............................................ $2,314,538 • SCT ................................................... $681,458 FAHR96-38 Page 3 June 12, 1996 These three finalists were put through an extensive background check and were rated by: • Financials-Are they financially stable? Will they still be in business in 5 years? • Experience-Have they done projects of similar scope? • Proximity-Accessibility of resources to respond to problems? • Capacity-Are they over committed on other projects? Do they have time for us? • Commitment-Is local government financial systems their strategic product? • References-What do other installed sites say about them? • Supportability-Are they providing ongoing user support? The Evaluation Team A computer evaluation team consisting of 13 staff members representing the different software applications used throughout the Districts was formed to further evaluate the vendor proposals by making on-site visits to the Metropolitan Water District of Southern California in Los Angeles, the Southern California Water Company in San Dimas, and the City of Poway in San Diego County. These site visits were the focal point of the evaluation team's efforts. Their purpose was to obtain answers to the following questions: • Were the other local governments pleased with the vendors? • Was the software being used in the same manner that we intend to use it? • Did the software do what the vendors said it would do? • What features exist that were not requested, but really enhanced their system. • How difficult was it to install, manage and operate on a daily basis? • What were the maintenance and staffing requirements? After the site visits, each vendor was asked to prepare their own demonstration of their product. These vendor-controlled presentations were made at their offices or in our Board Room. These demonstrations gave each vendor a chance to answer questions from the site visits and to show new or future features which may be beneficial to the Districts. It should be noted that the finalists were considered equal prior to the site visits, and vendor demonstrations and that price was not considered a factor at that time. FAHR96-38 Page4 June 12, 1996 Selecting a Vendor The Evaluation Team discussed each site visit in detail and, although no vendor was superior in every functionality requirement, J.D. Edwards was the only vendor able to demonstrate all required computer module applications and was the best solution of the three. J. D. Edwards had the best Capital Projects Management, Job Cost System, and Budget packages. On May 23, the Evaluation Team unanimously selected J.D. Edwards based on the following considerations: • Long term success and employee satisfaction at the So. Calif. Water Co. • Strong financial and budget applications. • Compatibility with Windows NT. • Ease of creating reports, graphs and presentations from data within the system. • The ability to effectively integrate with our Oracle-based Computerized Maintenance Management System using their new client-server product. Although J.D. Edwards was the second lowest priced vendor, they did rank number one when evaluating the three firms based on a price per functionality point. Hardware The J.D. Edwards system currently runs on an IBM AS/400 platform. This hardware platform is not included in the Districts' current computer architecture and will not directly support the Oracle database utilized by the Districts' Computerized Maintenance Management System. However, J.D. Edwards is introducing their new open-system client server product that has compatibility with all major databases, including Oracle. Their new client server product will coexist on the same database as with their old product so that implementation of the new product can be achieved one application at a time. Their new client server product is being released in phases with the financial applications due to be released in August 1996, and their Human Resource/Payroll modules due to be released December 1997. J.D. Edwards has proposed an IBM platform system within their proposal. Staff has made follow up inquires with J.D. Edwards on their willingness to sell us their new client server product for the financial systems along with the Human Resource/Payroll version running on the IBM platform. It would then be statrs intentions to convert to the Human Resource/Payroll version when it becomes available. J.D. Edwards has expressed a willingness to sell us a mixture of software at the quoted prices within their proposal. However, a 1 O percent license fee would be required for each application not originally purchased and subsequently upgraded at a later date. These changes to the original proposal will be negotiated if the Committee approves staff's recommendation. FAHR96-38 Page5 June 12, 1996 Budget Issues The 1993-94 budget originally proposed a new purchasing and accounting financial information system for a total of $1,500,000. In the intervening years, consultants have been hired and the budget has been modified as the process and project have evolved. The proposed budget for 1996-97 includes an appropriation of $1,700,000 over a two-year period to purchase and implement a new FIS. RECOMMENDATION Staff recommends that the Finance, Administration, and Human Resource Committee accept the proposal submitted by J.D. Edwards, authorize staff to enter into negotiations with J.D. Edwards for a new financial information system, and to present a negotiated agreement, in an amount not to exceed $1,525,000, to the Joint Boards for approval at the July 24, 1996 meeting. MW:lc J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.38 .E2!mfil •Written Report •Overheads •Slides • Flip Charts FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR JUNE 12, 1996 FAH R96-39: Consideration of motion to modify the Professional Services Agreement with Kerry Consulting Group to an amount not to exceed $47,757 for services rendered in performing Phase IV of the FIS project, an increase of $23,567, to provide for financial and human resources process and procedure reengineering oversight not originally included in the scope of work. Summary Kerry Consulting Group (KCG) was selected to complete Phases Ill and Phases IV of the Financial Information System (FIS) Project. Phase Ill was the vendor selection process, which has just been concluded. Due to the lack of response on the initial release of the FIS RFP, staff made the decision to extend the RFP deadline and further simplify and reissue the RFP. KCG simplified the RFP originally prepared by Deloitte & Touche by breaking it down into two components. The first component was issued as an initial screening, limited the number of functionality questions to the 20 most critical per financial module, and required that vendors only identify the recommended hardware platform configuration without committing to price. The secondary disclosure process then required the answers to the remaining functionality questions and fixed pricing on the proposed hardware solution. The reissuance of the two-part RFP led to the successful collection of five vendor proposals. It is now time to begin work on Phase IV, the implementation process. As a consequence of recent site visits to review software installations, the staff sees an opportunity to save significant staff costs in the future by reengineering the Finance and Human Resource processes currently in place. A change order in the amount of $23,567 to Phase IV of the Kerry Consulting Group contract is requested to accomplish this work. Staff Recommendation Staff recommends that the Finance, Administration, and Human Resource Committee modify the Professional Services Agreement with Kerry Consulting Group to an amount not to exceed $47,757 for services rendered in performing Phase IV of the FIS project, an increase of $23,567, to provide for financial and human resources process and procedure reengineering oversight not originally included in the scope of work. Total compensation to KCG, including changes in scope, will be approximately $5,500 below the original proposal of the second bidder. June 12, 1996 FAHR96-39: BACKGROUND STAFF REPORT Consideration of Motion to Expand Services Agreement with Kerry Consulting Group Kerry Consulting Group (KCG) was selected to complete Phases Ill and Phases IV of the Financial Information System (FIS) Project. Phase Ill is the Selection Process for the Finance Information System Hardware and Software, and Phase IV is the Implementation and Acceptance of the Selected Hardware and Software Solutions. Phase Ill was to be accomplished through the issuance of the RFP that was originally developed by Deloitte & Touche. While conducting the installed site visit portion of the FIS selection process and learning from other local governments during on-site visits, it has become apparent to staff that additional benefits can be obtained from reengineering of the financial and human resource procedures and processes used by the Districts. We believe these are opportunities to save significant staff costs in the future. The current processes used by the Districts were developed around the current FIS system, a system designed in 1977. In order to take full advantage of the functionality capabilities of the new financial information system, such as paperless requisitioning, the Districts will need to re- engineer the financial and human resource processes currently in place. These services, which were not considered in the original project, can be provided through KCG at a cost of $23,567. RECOMMENDATION Staff recommends that the Finance, Administration, and Human Resource Committee modify the Professional Services Agreement with Kerry Consulting Group to an amount not to exceed $47,757 for services rendered in performing Phase IV of the FIS project, an increase of $23,567. MW:lc J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.39 CSDOC • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411 Format • Written Report • Overheads • Slides • Flip Charts Originator .AA/Ip Department Head Sign Off~ Anticipated Time I O M 11-l FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR JUNE 12, 1996 FAHR96-40: Labor Negotiations -Information Only Summary At last month's FAHR Committee meeting, the Board directed staff to provide an update regarding the labor negotiation process and the status of the Request for Information and Qualifications (RFIQ) for the labor negotiator. Bids were solicited from five firms including: 1) Liebert, Cassidy & Frierson, 2) Littler, Mendelson, Fastiff & Tichy, 3) William Hamilton and Associates, 4) Mitchell, Silberberg & Knupp, and 5) William Avery & Associates. Two firms responded by the deadline; William Hamilton and Associates and Liebert, Cassidy & Frierson. Districts' staff plan to have the Labor Negotiator selected by July 1, 1996. The selection committee will include Don McIntyre, Ed Hodges, Bob Ooten, Michelle Tuchman, and Mike Peterman. Labor contract proposals will be presented at the July FAHR Committee in closed session. Staff Recommendation No recommendation -information only. A:\FAHR9640 Request for Qualifications ("RFQn) for Labor Negotiator SECTION I -INTRODUCTION AND INSTRUCTIONS TO BIDDER A. Introduction The County Sanitation Districts of Orange County ("Districts") invites you to submit a proposal to conduct the Districts' labor negotiations from June, 1996 through January 1997. The Bidder is expected to submit a proposal which includes detailed information on the Bidders qualifications, references, history, knowledge, and any other detailed experience that would prove useful in determining the most qualified labor negotiator. B. Background The Districts currently have six (6) bargaining units: 1) Supervisory, 2) Professional, 3) Engineering, 4) Technical Services, 5) Administrative/Clerical, and 6) Operations and Maintenance. Memorandums of Understanding (MOUs) with Engineering, Technical Services, Administrative/Clerical, and Operations and Maintenance expire November 21, 1996. MOUs with Professionals and Supervisors expire January 31, 1997. The Supervisory and Professional groups were formed as recently as 1993. The Engineering, Technical Services, and Administrative/Clerical groups are represented by the Orange County Employees Association. The Operations and Maintenance group is represented by the International Union of Operating Engineers Local 501, AFL/CIO. The Districts have a good relationship with all six of its bargaining units. The last negotiation period in 1993 was relatively non-adversarial. C. Proposed Time Schedule 05/01/96 05/16/96 06/03/96 (To Be Determined) 02/01/97 RFQ Mailing Bidders' Conference Proposal Due Date -5 :00 p.m. Evaluation Preliminary Negotiation To Boards of Directors Proposed Award Date Estimated Project Start-up Contract Implementation Date Page I CSDOC • P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411 D. Instructions to Bidder and Procedures for Submittal 1. Proposal must be accompanied by a cover letter signed by an authorized representative. 2. Bidder must provide seven (7) copies of the proposal. 3. Each Bidder will submit two (2) sealed packages. One package will contain the proposal as outlined in this RFQ. The second sealed package will contain the cost estimate to complete the Districts' negotiations. Clearly identified proposals are due by 2:00 p.m. PST on June 3, 1996 and shall be delivered in sealed packages at: COUNTY SANITATION DISTRICTS OF ORANGE COUNTY 10844 Ellis A venue Fountain Valley, California 92708 ATTN: Mike Peterman, Human Resources Director RE: Labor Negotiations Request for Qualifications 4. A Bidders' Conference will be held at 10:00 a.m. on May 16. 1996 in the Administration Building, Conference Room B. Please acknowledge receipt of this RFQ and indicate your intent to attend the Bidder's Conference. Your attendance to the Bidders' Conference is highly recommended. The purpose of this Bidders' Conference is to famiiiarize Bidders with the County Sanitation Districts of Orange County and to answer questions on the RFQ. 5.. Should your firm elect not to bid, please return the complete proposal package accompanied with a letter confirming your proposal declination to the address set forth in Paragraph 3, Phone: (714) 962-2411 Ext. 2105; Fax: (714) 962-0427. 6. Proposal must be valid for a period of one (1) year from the due date. Proposal may not be withdrawn after the submission date. 7. The County Sanitation Districts of Orange County reserves the right to negotiate with any Bidder as necessary to serve the best interests of the Districts and negotiate the final agreement with the best qualified Bidder. 8. Bidder's proposal must not be marked as confidential or proprietary to Bidder. The Districts may refuse to consider a proposal so marked. 9. All proposals will become the property of the Districts. Information in the proposals will become public property and subject to disclosure laws. The Districts reserve the right to make use of any information or ideas in the proposals. Page2 10. The Districts reserve the right to reject any and all proposals. No obligation, either expressed or implied, exists on the part of the Districts to make an award or to pay any costs incurred in the preparation or submission of a proposal. All costs associated with the preparation or submission of proposals covered by this RFQ are solely the responsibility of the Bidder. 11. The Bidder judged most qualified to the Districts' requirements may be asked to give an oral presentation on their proposal to Districts' staff. Bidder should be prepared to make the presentation within at least five (5) calendar days after notification and be prepared to discuss all aspects of the proposal in detail. 12. The evaluation criteria and subsequent award shall be at the sole discretion of the Districts. E. Evaluation Process and Criteria 1. Process 2. The process for evaluation and rating of proposals received in response to this RFQ will consist of three (3) phases: a. The first phase will be a basic preliminary review of the responsiveness of Bidder's proposal to ensure that all the requirements of the RFQ are met and response items answered. This includes qualifications, experience, administrative, and references areas. b. The second phase will consider the merits of Bidder's proposal and may include a presentation by the Bidder to the Districts evaluation panel. c. The third phase will be a business analysis which includes review of exceptions, and terms and conditions in Bidder's proposal. Criteria Bidder's proposal will be evaluated on the basis of the response to all questions and requirements in this RFQ. The Districts may use some or all of the following criteria in its evaluations but is not necessarily limited to same. I. Understanding of Scope of Work a. Responsiveness to Needs Presented in Scope of Work b. Responsiveness to the Requirements of the Project c. Demonstrated Understanding of the Project 11. Work Plan a. Methodology b. Ability to Meet Needs Page3 III. ~ IV. Company Management a. Organization Chart b. Business Practices V. Experience/Expertise a. Company Experience b. Personnel Experience c. References The criteria as set forth herein for the evaluation -of proposals are in random sequence and are not to be considered in any rank or order of importance. Any responses to the Districts other than those through the Human Resources Director are unauthorized and will be considered invalid. SECTION II -PROPOSAL RESPONSE REOUJREMENTS Proposal must be concise and with sufficient detail to allow accurate evaluation and comparative analysis. Response items must be indexed in the following order: A. Cover Letter Proposal must be accompanied by a cover letter, signed by an individual authorized to bind the proposing entity. The Districts' RFQ cover page and the Bidder's Compliance Statement, filled-in and signed, must be included with Bidder's Proposal. B. Company Data C. Bidder mus submit the following information: a. Official name and address: Indicate what type of entity, (e.g., corporation, company, partnership, sole proprietorship, combination, etc.). Also, list officers and partners. b. Federal Employer I.D. Number c. Complete address for mailed funds: name and address of person to receive notices who is authorized to make decisions or represent the Company and in what capacity. Validity of Proposal State the length of time for which proposal shall remain valid. The Districts requires a period of at least one (1) year. Page4 D. .._ __ ,,, Statement of Compliance Include in this section, a statement of compliance with terms and conditions in this RFQ or a listing of exceptions and suggested changes, along with any cost impact and schedule changes. Proposal shall certify either (1) or (2): ( 1) This proposal is in strict compliance with said RFQ and no exceptions thereto are proposed. (2) This proposal is in strict compliance with said RFQ except for those proposed exceptions listed in a separate enclosure hereto. Toe enclosure must include for each proposed exception: a. Reasons for submitting the proposed exception; and, b. Any impact the proposed exception may have on cost, scheduling, or other areas. E. Narrative To include a summary of what is being proposed and a complete plan of action with an explanation of how the Bidder proposes to execute the work and services. F. Implementation Plan/Project Schedul.e 1. Implementation Plan: Submit detailed plan and recommendations for 2. Project Schedule: implementation. Provide a preliminary proposed schedule with major milestones, showing the time required to complete each phase of the work and services. G. Resumes of Project Personnel Include resumes of key personnel that will be assigned to this project. H. Oreanization Chart Include organization chart that reflects titles of key staff assigned to the project. Page 5 I. J. References Submit the names, addresses, and telephone numbers of three (3) clients for whom comparable projects have been completed. Bidder shall also submit the following information: 1. A copy of the Bidder's Articles oflncorporation and Bylaws, and any partnership papers. 2. Number of years Bidder has been in business under the present business name. 3. Number of years of experience the Bidder has had in providing required, equivalent, or related services. 4. A description of Bidder's operation, facilities, business, objectives, number of employees (both nationally and locally), and previous experience and qualifications relating to services required in this RFQ. Include, where relevant, copies of formal evaluations conducted by or for the Bidder within the last three (3) years. 5. Relevant comparable contracts completed during the last five (5) years indicating: Year, Type of Contract, and Contracting Agency. 6. Any failures or refusals to complete a contract and explanation. 7. Financial interests in other lines of business. Confidentiality Proposals shall include a Confidentiality Statement which provides for the confidentiality of the negotiation, information and records not accessible to public record. K. Cost Containment The proposal shall include the statement "Negotiator shall cooperate with the Districts to actively restrain all controllable costs and to avoid expenses to the Districts whenever possible, consistent with the level of expertise required." L. Dispute Resolution The proposal shall include the statement "Any controversy or claim arising out of, or arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration pursuant to the rules and procedures of the American Arbitration Association unless otherwise agreed to." Page6 T l M. Non-Exclusivity The proposal shall include the statement, "It is understood that the agreement does not constitute an exclusive arrangement. Further, it is understood that the Districts may contract with other entities for the provision of similar services." 1/vtL~ Mike Peterman Date Acting Director of Human Resources F:\HOME\PETERMAN\CSDOC\LABOR\RFQFORM.429 Page7 ~ • Written Report • Overheads •Slides • Flip Charts (12): Summary FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE AGENDA FOR JUNE 12, 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, July 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. No meeting is currently scheduled. Consideration of RFP for Classification Studies Review Commercial Bank Selection Alternatives Consideration of Broker-of-record for Property and Personnel Insurances Consideration of Staff Report on Early Retirement Incentives Staff Recommendation Information only item. J:\WPDOC\FIN\CRANEIFPC.MTGIFAHR.96\COVERS.96\CALEN6.96