HomeMy WebLinkAbout1996-07-10FILED In the Office of the Seereta
County Sanitation District(s
No(s) /1/. fl
County Sanitation Districts
of Orange County, California
P.O. Box 8127 • 10844 Ellis Avenue
Fountain Valley, CA 92728-8127
Telephone: (714) 962-2411
DRAFT
.. 24199r MINUTES OF FINANCE,
ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
Wednesday, July 10, 1996, 5:30 P.M.
A mf3eting 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
John M. Gullixson
Wally Linn
Thomas Saltarelli
William G. Steiner
Roger R. Stanton, Vice Chair
Peer Swan, Vice Joint Chair
Committee Directors Absent :
Burnie Dunlap
James Flora
Other Directors Present:
John Collins, PDC Chair
Staff Present:
Donald F. McIntyre, General Manager
Judith A. Wilson, Assistant General Manager
Ed Hodges, Director of General Services Admin.
Bob Ooten, Director of Operations & Maintenance
Mike Peterman, Director of Human Resources
Gary Streed, Director of Finance
Michelle Tuchman, Director of Communications
Steve Kozak, Financial Manager
Mike White, Controller
Greg Mathews, Principal Administrative Analyst
Linda Eisman, Training Manager
Frankie Woodside, Assistant Committee Secretary
Others Present:
Tom Woodruff, General Counsel
Nick Nichols, Labor Counsel
Janet Houston, League of Cities
(2) APPOINTMENT OF A CHAIR PRO TEM
No appointment was necessary.
(3) PUBLIC COMMENTS
No comments were made.
I
Minutes of Finance, Adn .. ,' and Human Resources Committe
Page 2
July 10, 1996
(4) REPORTS OF THE COMMITTEE CHAIR. GENERAL MANAGER, ASSISTANT
GENERAL MANAGER(S), DIRECTOR OF FINANCE/TREASURER. DIRECTOR
OF HUMAN RESOURCES, DIRECTOR OF GENERAL SERVlCES
ADMINISTRATION, DIRECTOR OF COMMUNICATIONS AND GENERAL
COUNSEL
(a) Report of the Committee Chair
The Chair introduced Frankie Woodside, who is Executive Assistant to
Ed Hodges and the Committee's Assistant Secretary. Frankie was present
to take the minutes of this evening's meeting. The Chair had no further
report.
(b) Report of the General Manager
The General Manager had no report.
(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
Gary Streed reported that the daily COP rates traditionally go up at the end
of the month and down at the beginning of the month. When this report
was mailed, only the end of the month rates were available. The latest
rates indicate they have gone down approximately 1. 7%. Mr. Streed also
reported on the status of the preliminary negotiations with J.D. Edwards
regarding the Financial Information System.
(e) Report of the Director of Human Resources
The Director of Human Resources had no report.
(f) Report of the Director of General Services Administration
The Director of General Services updated the Committee on the CNG
project. In May, the low bidder on the project was Nova. Their costs were
approximately $200,000 higher than our engineer's estimate. In June,
Nova filed for bankruptcy and wanted out of their contract. The next
apparent low bidder was approximately $300,000 higher than Nova. As a
Minutes of Finance, Admin. and Human Resources Committee
Page 3
July 10, 1996
result, staff is in the process of bringing this item back to the PDC
Committee and recommending that the project be rebid. Staff is working
with the Gas Company to bring project costs closer to the original
engineer's estimate.
Mr. Hodges also reported on discussions currently underway with potential
users and advised that the National Renewal Energy Laboratory contacted
the Districts with a plan to participate and invest $130,000 into the project.
(g) Report of the D1rector of Communications
The Director of Communications had no report.
(g) Report of General Counsel
General Counsel had no report.
(5) APPROVAL OF MINUTES
It was moved, seconded and duly carried to approve the draft minutes of the
June 12, 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)
FAHR96-40 Labor Negotiations -Information-Only.
Mike Peterman, Director of Human Resources, reported that this item is an
information-only item. Mike advised that under the "closed session" portion of the
meeting, he will present draft labor proposals that have been developed by
Division management and Department Heads and will review the selection of our
negotiator. Mr. Peterman introduced Nick Nichols as the Districts' choice to
represent the Districts with the Professional and Supervisory group.
NEW BUSINESS
FAHR96-41 Consideration of motion to receive and file Treasurer's
Report for the month of May 1996.
Mr. Streed advised that the Treasurer's report included in the agenda package
indicated the cash and investment position at the end of May 1996. There has
been a $1.5 million improvement in market value at the end of June.
Minutes of Finance, Admin. and Human Resources Committee
Page 4
July 10, 1996
Performance Monitoring Reports for Liquid and Long-term Operating Monies
indicated that total investments continue to outperform the benchmarks.
FAHR96-42 Consideration of motion to authorize the General Manager to
enter into a contractual agreement with a commercial broker
to lease 4 :!: acres of land located at Plant 1, and 30:!: acres of
land located at Plant 2 for a period of up to 1 O years. .
Ed Hodges, Director of General Services Administration, advised that the Districts
are now at the point where vacant land can be considered for alternative revenue
productive uses. In 1966 the City of Fountain Valley approached the Districts
with a proposal to lease a portion of Plant 1 for a ten-year period to be used as
their city yard. Boznanski and Company was retained to evaluate the market
value and fair rental value of the parcels located at Plant 1 and Plant 2.
Boznanski and Company's report concluded that the highest and best use of the
vacant land would be as a storage yard, nursery, Christmas tree farm, etc. The
report concludes that the anticipated yearly annual rental range for the Plant 1
property could be $6.80 to $7.25 per square foot and at Plant 2 could be $5.00 to
$5.50 per square foot. This could result in an annual income of $327,000 to
$539,000 not including any brokerage fee. Since the time of this evaluation, the
City of Fountain Valley has made other arrangements, however, staff feels the
land can still be leased for the uses noted above.
After discussion on this item, a motion was made to: Authorize staff to prepare a
"business opportunity solicitation" and mail to commercial real estate brokers;
authorize staff to retain a real estate expert to evaluate the proposals; and
directed staff to return to the appropriate Committee with an evaluation, including
any costs involved in cleaning up the sites to make them leasable, and any
environmental liability that may be involved. The Committee further
recommended that staff contact the cities of Fountain Valley and Huntington
Beach regarding authorized uses of the land that is to be leased. Commissions
will be negotiated.
FAHR96-43 Consf deration of motion authorizing the Human Resources
Department to issue a Request for Proposal (RFP) for
professional consultant services to conduct a study to
determine the feasibility of broadbanding.
Mike Peterman, Director of Human Resources, gave a report and slide
presentation. He advised that the Districts' current classification structure has
146 separate job classifications. There is a different job title for every fourth
employee. Management believes this specialization is contrary to the goals of a
productive and flexible workforce. Mr. Peterman reviewed the broadbanding
salary management system and how job families with up to twelve classifications
can be reduced to two or three bands.
Minutes of Finance, Admin. and Human Resources Committee
Page 5
July 10, 1996
After discussion among the Committee members, it was moved, seconded and
duly carried to authorize staff to issue a Request for Proposal (RFP) for
professional consultant services to conduct a study to determine the feasibility of
broadbanding, and that the consultant will meet with the Committee prior to doing
any substantial work as well as presenting the results of the study to the
Committee.
FAHR96-44 Consideration of motion to adopt Resolution No. 96-
amendinq Resolution No. 95-105 re the Districts' Alcohol and
Controlled Substances Policy and Testing Program.
Human Resources Director Mike Peterman passed out a copy of the County
Sanitation Districts' Substance Abuse and Alcohol Misuse Plan. Mr. Peterman
advised the Plan has been prepared to comply with the Department of
Transportation Omnibus Transportation Employee Testing Act which requires
every driver who operates a commercial motor vehicle in interstate or intrastate
commerce, and is subject to commercial driver's license requirements, to be
subject to an Anti-Drug and Alcohol Program. This program implements federal
legislation.
After discussion, it was moved, seconded and duly carried to recommend that the
Joint Boards approve Resolution No. 96-_, amending Resolution No. 95-105.
FAHR96-45 Consideration of motion approving Joint Powers Agreement
Establishing the Orange County Council of Governments.
Judy Wilson reported that Orange County Council of Governments (COG) was
officially formed in June 1996 when the requisite number of cities approved the
Joint Powers Agreement (JPA) establishing this organization. The JPA for the
COG provides for an organization of 21 voting members. These include Orange
County's 12 delegates to SCAG and one member each from organizations such
as Orange County Division of the League of Cities; County of Orange; Orange
County Transportation Authority; Independent Special Districts of Orange
County/Water Agencies representative; Orange County Cities AQMD
representative and County of Orange AQMD representative; an at-large Orange
County City; and the County Sanitation Districts of Orange County. Also included
are two non-voting members representing the private sector and the universities.
Judy introduced Janet Houston of the League of Cities who reviewed some of the
issues that would be brought before the COG and the processes that will be set
up to review those issues. It's likely there will be amendments to the JPA after all
the issues are discussed.
The COG is not intended to be another layer of government. Rather, it was
intended to replace the Orange County Regional Advisory and Planning Council
(RAPC), which has existed since 1991.
Minutes of Finance, Admin. and Human Resources Committee
Page 6
July 10, 1996
There are no membership dues required. The COG will not require new staff and
instead will tap into existing staff resources from member entities. The COG's
expenses will be covered through funds made available to the Orange County
subregion from SCAG. August 15th will be the first meeting of the COG.
After discussion on this item it was moved, seconded and duly carried, with 5 aye
votes and 2 nay votes, to recommend that the Joint Boards of Directors approve
the Joint Powers Agreement establishing the Orange County Council of
Governments.
(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 Items (8)(b)(1) and (2) on the published Agenda. The Committee
convened in Closed Session at 6:42 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
Items 8(b)(1) and (2).
At 7:30 p.m., the Committee reconvened in regular session.
(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.
(12) CONSIDERATION OF UPCOMING MEETING DATES AND ITEMS TO BE
DISCUSSED AT THOSE MEETINGS
The next Committee meeting is scheduled for Wednesday, September 11, 1996.
)
Minutes of Finance, Admin. and Human Resources Committee
Page 7
July 10, 1996
(13) ADJOURNMENT
The meeting was adjourned at approximately 7:32 p.m.
~~
Lenora Crane
Finance, Administration and Human
Resources Committee Secretary
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\1996.MIN\MFAHR7.96
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 July 10, 1996, was duly posted for public inspection in the main lobby of the Districts'
offices on July 3, 1996.
Posted:
By:
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of July, 1996.
Penny Kyle, Secreta
Sanitation Districts
County, California
f ac the Boards of Directors of County
3, 5, 6, 7, 11, 13 & 14 of Orange
.......,~...-.-.a::.____t3 ____ , 1996,~/P.M.
~~
J:IWPDOCIFINICRANEIFPC.MTGIFAHR.96\CERT.POS\CERTP07.96
phone:
(714) 962-2411
mailing address:
P.O. Box 8127
Fountain Valley, CA
92728-8127
street address:
10844 Ellis Avenue
Fountain Valley, CA
92708-7018
Member
Agencies •
Cities
Anaheim
Brea
Buena Park
Cypress
Fountain Valley
Fullerton
Huntington Beach
Irvine
La Habra
La Palma
Los Alamitos
Newport Beach
Orange
Placentia
Santa Ana
Seal Beach
Stanton
Tustin
Villa Park
Yorba Linda
County of Orange
Sanitary Districts
Costa Mesa
Garden Grove
Midway City
Water Districts
Irvine Ranch
COUNTY \,)ANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA
July 3, 1996
NOTICE OF MEETING
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
COUNTY SANITATION DISTRICTS
NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14
OF ORANGE COUNTY, CALIFORNIA
WEDNESDAY. JULY 10. 1996 -5:30 P.M.
DISTRICTS' ADMINISTRATIVE OFFICES
10844 ELLIS AVENUE
FOUNTAIN VALLEY, CALIFORNIA 92708
A regular meeting of the Finance, Administration and Human Resources
Committee of the Joint Boards of Directors of County Sanitation Districts Nos.
1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, will be held at the
above location, time and date.
A Public Wastewater and Environmental Management Agency Committed to Protecting the Environment Since 1954
July 3, 1996
FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
TENTATIVELY SCHEDULED
MEETING DATES
Finance, Administration
and Human Resources
Committee Meetings Joint Board Meetings
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, 1997 June 25, 1997
July July 9, 1997 July 23, 1997
CS DOC e P .0. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411
ROLL CALL SHEET
~ I I
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
MEETING DATE: July 10, 1996
COMMITTEE MEMBERS
GEORGE BROWN (Chair) ...................... .
ROGER R. STANTON (Vice Chair) ............... .
JAN DEBAY .................................. .
BURNIE DUNLAP ............................. .
JAMES H. FLORA ............................. .
JOHN M. GULLIXSON ......................... .
WALLY LINN ................................. .
THOMAS SALTARELLI ......................... .
WILLIAM G. STEINER ......................... .
PEER A. SWAN (VJC) ......................... .
JOHN C. COX, JR. (JC) ........................ .
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, Director of Human Resources .... .
GARY STREED, Director of Finance .............. .
MICHELLE TUCHMAN, Director of Communications ..
NANCY WHEATLEY, Director of Tech. Srvs ........ .
STEVE KOZAK, Financial Manager ............... .
MIKE WHITE, Controller ........................ .
BRAD CAGLE, Principal Financial Analyst-Budget ... .
GREG MATHEWS, Principal Administrative Analyst .. .
LINDA EISMAN, Training Manager ............... .
LENORA CP.ANE, Committee Secretary. . ......... . -----------............... .
OTHERS
TOM WOODRUFF, General Counsel ----------................ .
.:.,._ _________ ................ .
c: Penny Kyle
L. Crane
TIME: 5:30 P.M.
ADJOURN: P.M.
July 10, 1996
AGENDA
FINANCE._ ADMINISTRA_TION AND HYMAN RESOURCES COMMITTEE
COUNTY SANITATION DISTRICTS
NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14
OF ORANGE COUNTY, CALIFORNIA
DISTRICTS' ADMINISTRATIVE OFFICES
10844 ELLIS AVENUE
FOUNTAIN VALLEY, CALIFORNIA 92708
REGULAR MEETING
WEDNESD'.AY, JULY 10. 1996 -5:·30 P.M.
1•·-~~~~~~-~~:~.~~~;;; ;~·;;;~;;:;;;;~;;;;;;c;~~~l;~;:;:···--····1:
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 .
....... ,.,.w .............................. , ......................... , .............................. v .......... -·-··---•-·· .............. _.,., ... ,_."""-•·· .. •• ........................ _ ................. I"' .................. • ........... -~ • ., .............. i" ............................ I"' .... •
( 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).
July 10, 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 June 12, 1996.
(6) Old Business.
FAHR96-40 Labor Negotiations -Information Only
(Mike Peterman)
(7) New Business.
FAl:IR96-41 Consideration of motion to receive and file Treasurer's Report for
the month of May 1996.
(Gary Streed)
FAHR96-42 Consideration of motion to authorize the General Manager to
enter into a contractual agreement with a commercial broker to
lease 4± acres of land located at Plant 1, and 30± acres of land
located at Plant 2 for a period of up to 1 O years.
(Ed Hodges)
FAHR96-43 Consideration of motion authorizing the Human Resources
Department to issue a Request for Proposal {RFP) for
professional consultant services to conduct a study to determine
the feasibility of broadbanding.
(Mike Peterman)
,·
l .
July 10, 1996
FAHR96-44 Consideration of motion to adopt Resolution No. 96-_
amending Resolution No. 95-105 re the Districts' Alcohol and
Controlled Substances Policy and Testing Program.
(Mike Peterman)
FAHR96-45 Consideration of motion approving Joint Powers Agreement
Establishing the Orange County Council of Governments.
(Judy Wilson)
(8) Closed Session.
If'" a • ., ........ _.· .. ,,.... • ................ •'1••·__,.-0, ••·•<f ·•·••1"• .. •···•·-••·••• .... •-.. -•.• .......... w.••••• ..... •--••-•-•---•LOO ............. -. ......... _.._ ........................ -•--•-••--•--,o.-•.••''•._·•• ,••••
j==·=.,· 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 i
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.
•···•• ......................................................... _..................... ..................... • ..... , ............................. ,.. ............................ .,. ................ , ............................ J .................. 1
(a) Convene in closed session.
(b) (1) 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).
(2) Confer with Districts' Negotiator re meet and confer; and negotiations
for the establishment of salaries, compensation or fringe benefit.
(Government Code Section 54957.6).
(c) Reconvene in regular session.
(d) Consideration of action, if any, on matters considered in closed session.
(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.
July 10, 1996
(13) Adjourn.
·1 --~:~y:~:~:::;:::::::~l::··::··:.:::·~~-=h··:·:l:=-~-~:-::·:~-:::n~~,.1
!::::· Administration and Human Resources Agenda, Committee members should contact the :=:.::. Committee Chair or Secretary ten days in advance of the Committee meeting. -
Committee Chair: George Brown (310) 431-2185 ! Secretary: Lenora Crane (714) 962-2411, Ext. 2501 I
i (714) 962-3954 (FAX) ~ 1 •11••······-··· .................. -.• ..,•••. ,••09·••.a•-1 •• .. ····• ................................................ , ·······--····-····-·· '••······ ....... , .................... _ •••••••••••• •
Format
• Written Report
•overheads
• Slldes
• Flip Charts
Originator __ _
C.rystreed
Department Hud Sign on __ _
Garystreed
Anticipated Time 6 min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JULY 10, 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
remarket!ng 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\FINICRANE\FPC.MTGIFAHR.96'COVERS.96\DOF7.96
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FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JULY 10, 199~
( 5): Consideration of motion to approve the draft Finance,
Administration and Human Resources Committee Meeting
Minutes of June 12, 1996.
Summary
Attached is a draft of the Finance, Administration and Human Resources Committee
meeting Minutes of June 12, 1996, for approval by the Committee.
Staff Recommendation
It is recommended that the minutes of the June 12, 1996, Finance, Administration and
Human Resources Committee meeting be approved. These minutes were submitted to
the Joint Boards at their June 26, 1996 meeting, and no further action is required.
J:IWPDOC\FINICRANE\FPC.MTGIFAHR.96\1996.MINICVRMIN6.96
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, 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, L and Human Resources Committ1..
Page2
June 12, 1996
(4) REPORTS OF THE COMMITTEE CHAIR, 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
(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 Finance!Treasurer'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 BUS·INESS
(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 staffs 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 ConsideraUon of motion to accept the proposal submitted by J.O.
Edwardsi 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.
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
qf 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 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 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.
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, 1 ~96.
(13) ADJOURNMENT
The meeting was adjourned at approximately 8:22 p.m.
@#¥-~
Lenora Crane
Finance, Administration and Human
Resources Committee Secretary
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\1996.MINIMFAHRS.96
Format
• Written Report
• Overheads
D Slides
D Flip Charts
Originator ~
Department Head Sign Off_....:....c....;-'---
Anticipated Time 3o l'\1/,Y
FINANC_E, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JULY 10, 1996
FAHR96-40: Labor Negotiations -Information Only
Summary
Through the end of our labor contract period that ends with Local 501 and OCEA in
November and the Professional and Supervisory Groups in January, staff will provide
the FAHR Committee with monthly updates on the negotiation progress.
Staff will be selecting the labor negotiator prior to the Committee meeting on July 10.
He or she will be in attendance at the meeting to go over the proposed time schedule
and approach to this year's negotiations. Draft labor proposals have been prepared
with the input of the Districts' management team and will be discussed in closed
session with the contract negotiator.
Staff Recommendation
No recommendation -information only.
A:\LABORNEG.FAH
1
'
Format
• Written Report
•Overheads
•Slides
• Flip Charts
Originat~r
Department Head Sign
8
Ga eed
Anticipated Time 5 min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JULY 10, 1996
FAHR96-41: Consideration of motion to receive and file Treasurer's
Report for the month of May 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 left most column of the PIMCO Monthly Report for the "Liquid
Operating Monies" and for the "Long-Term Operating Monies." All of the Investment Policy
requirements are being complied with and performance to date exceeds the index rates.
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
Staff recommends the Committee receive, approve and forward this report to the Joint Boards.
J:\WPOOC\FINICRANE\FPC.MTGIFAHR.96\COVERS.96\FAHR96.41
July 10, 1996
400
350
300
I! .!!250 0 C
'S200 • C
~150
i
100
50
0
CSDOC
TOTAL CASH & INVESTMENTS 1995 -1996
June 30 July 31 Aug. 31 Sept 30 Oct 30 Nov. 30 Dec. 31 Jan. 31 Feb. 29 Mar. 31 Apr. 30 May 31
J:IWPOOC\FINICRANE\FPC.MTGIFAHR.96\COVERS.96\FAHR96,41
MONTHLY REPORT
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INVESTMENT MANAGEMENT PROGRAM
PIMCO'S PERFORMANCE MONITORING & REPORTING
(for the month ending May 31, 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:
Of Index:
14.1.3 1 % INTEREST RATE CHANGE Dollar Impact (gain/loss) of 1% Change:
14.1.4 REVERSE REPOS % of Portfolio in Reverse Repos:
(see attached schedule)
14.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days:
14.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality:
14.1.7 SECURITIES BELOW "A" RATING % of Portfolio Below "A":
14.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance"
14.1.9 PORTFOLIO PERFORMANCE Portfolio Total Rate of Return:
1 Month:
3 Months:
12 Months:
Year-to-Date:
Index Total Rate of Return:
1 Month:
C;\OFFIC:E\WPWIN\WPDOCs\PIMCORP'l\!.TMAY.Wl'D
$279,087,873
$279,499,989
$284,390,406 _/
2.54
2.40
$7,088,832 (2.54%)
0%
NA
AAA
0%
~
-.02
-.73
------
-.59
-.07
MONTHLY REPORT
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INVESTMENT MANAGEMENT PROGRAM
PIMCO'S PERFORMANCE MONITORING & REPORTING
(for the month ending May 31, 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:
Of Index:
14.1.3 1 % INTEREST RATE CHANGE Dollar Impact (gain/loss) of 1 % Change:
14.1.4 REVERSE REPOS % of Portfolio in Reverse Repos:
( see attached schedule)
14.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days:
14.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality:
14.1.7 SECURITIES BELOW "A" RATING % of Portfolio Below "A":
14.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance"
14.1.9 PORTFOLIO PERFORMANCE Portfolio Total Rate of Return:
1 Month:
3 Months:
12 Months:
Year-to-Date:
Index Total Rate of Return:
1 Month:
C:\OFFICEIWPWIMWPDOCSIJ'IMCORPT\LQDMAY.WPD
$52,379,587
$52,421,205
$52,465,922 ,,-
.14
.25
$73,331 (.14%)
0%
100%
AAA
0%
' I
-~
.45
1.34
------
2.23
.43
OCSG000l00
CSDOC-CONSOLIDATED
MELLON TRUST
PORTFOLIO SUMMARY BY SECTOR
31-MAY-1996
BASE: USD
HBll00
% OF UNREALIZED ESTIMATED CURR
PORTFOLIO DISTRIBUTION COST MARKET VALUE TOTAL GAIN/LOSS ANNUAL INCOME YIELD
:ASH & CASH EQUIVALENTS
CASH
COMMERCIAL PAPER -DISCOUNT
FEDERAL HOME LOAN MORTGAGE -LE
FED LAND BANK -LESS THN lYR
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
~IXED INCOME SECURITIES
U.S. GOVERNMENTS
U.S. AGENCIES
BANKING & FINANCE
INDUSTRIAL
TOTAL FIXED INCOME SECURITIES
)THER PORTFOLIO ASSETS
PAYABLES/RECEIVABLES
0.78
27,276,311.13
3,286,176.67
3,293,339.50
11,633,231.00
8,577,874.09
6,939,800.00
290,264.00
2,579,269.31
63,876,266.48
91,326,196.85
134,518,625.00
29,677,836.61
14,061,150.00
269,583,808.46
3,400,240.91
0.78
27,276,311.13
3,286,176.67
3,293,339.50
11,633,231.00
8,577,874.09
6,939,800.00
290,264.00
2,579,269.31
63,876,266.48
89,404,720.00
131,990,062.00
29,561,154.70
13,688,750.00
264,644,686.70
3,400,240.91
0.00%
8.22%
0.99%
0.99\
3.50\
2.58\
2.09%
0.09%
0.78%
19.24%
26.94\
39.77%
8.91%
4.12%
79.73%
1.02%
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-1,921,476.85
-2,528,563.00
-116, 681. 91
-372,400.00
-4,939,121.76
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
10,884.90
0.00
10,884.90
6,126,875.00
8,700,040.00
2,085,397.00
1,202,250.00
18,114,562.00
0.00
0.00
0.00
0.00
0 .00
0.00
0.00
0.00
3.75
0 .00
0.02
6.85
6.59
7.05
8.78
6.84
0.00
TOTAL OTHER PORTFOLIO ASSETS 3,400,240.91 3,400,240.91 1.02\ 0.00 0.00 0.00
==~=========~~===~ ~~=========r====
NET PORTFOLIO ASSETS 336,860,315.85 331,921,194.09 100.00% -4,939,1:21.76 18,125,446.90 5.46
Page 1
_)
OCSGOOOlOU
~SDOC-CONSOLIDATED
SHARES/PAR SECURITY DESCRIPTION
~ASH & CASH EQUIVALENTS
CASH
0 CASH
SUBTOTAL CASH
COMMERCIAL PAPER -DISCOUNT
500,000 AMERICAN TEL & TL DISC
08/16/1996
1,800,000 AMERICAN TEL & TL DISC
08/09/1996
5,800,000 AMERICAN TEL & TL DISC
08/22/1996
5,000,000 AMERITECH CORP DISC
06/20/1996
900,000 AMOCO CO DISC
06/13/1996
1,200,000 CANADIAN WHEAT BD DISC
07/10/1996
1,100,000 CANADIAN WHEAT BD DISC
08/09/1996
300,000 COCA COLA CO DISC
06/07/1996
2,100,000 COMWLTH BK AUST A DISC
08/20/1996
300,000 ELEC FRANCE SVC DISC
08/23/1996
700,000 FORD MTR CR CO DISC
06/26/1996
1,700,000 FORD MTR CR CO DISC
08/29/1996
900,000 GENERAL ELEC CAP DISC
07/02/1996
1,300,000 GENERAL ELEC CAP DISC
08/06/1996
1,100,000 HEWLITT PACKARD DISC
08/20/1996
600,000 KFW INTL FIN INC DISC
08/06/1996
MELLON TRUST
PORTFOLIO DETAIL BY SECTOR
31-MAY-1996
MARKET
PRICE
1.000
98.775
98.469
98.656
97.355
98.983
98.640
98.633
99.898
98.653
98 .668
98.644
98.580
99.514
98.336
98.673
98.601
\-OF
MARKET VALUE TOTAL
0.78 0.00
0.78 0.00
493,875.00 0.15
1,772,437.50 0.53
5,722,035.11 1.72
4,867,769.44 1.47
890,847.50 0.27
1,183,685.33 0,36
1,084,967.59 0.33
299,693 .17 0.09
2,071,717.67 0.62
296,003 .58 0.09
690,506.25 0.21
1,675,860.48 0.50
895,627.50 0.27
1,278,373 .06 0.39
1,085,402.08 0.33
591,608.34 0.18
Page 1.1
COST
0.78
0.78
493,875.00
1,772,437.50
5,722,035.11
4,867,769.44
890,847.50
1,183,685.33
1,084,967.59
299,693 .17
2,071,717.67
296,003.58
690,506.25
l,675,86t.48
895,627.50
1,278,373.06
l,085,'.102.08
591,608.34
UNREALIZED
GAIN/LOSS
0 .00
0.00
0 .00
0 .00
0.00
o.oo
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: USO
HBllOO
ESTIMATED CUR
ANNUAL INCOME YLD
0.00 0.0
0.00 0.0
0.00 0.0
0.00 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
0 .00 0 .0
0.00 0 .0
0.00 O.v
0.00 0 .0
0.00 0 .0
0.00 0 .0
0.00 0 .0
0.00 0 .0
OCSG000l00
CSDOC-CONSOLIDATED
SHARES/PAR SECURITY DESCRIPTION
MELLON TRUST
PORTFOLIO DETAIL BY SECTOR
31-MAY-1996
MARKET
PRICE
%-OF
MARKET VALUE TOTAL COST
BASE: USO
HBll00
UNREALIZED ESTIMATED CUR
GAIN/LOSS ANNUAL INCOME YLD
---------------------------------------------------------------------------------------------~------------------------------------
500,000 PITNEY BOWES CC DISC 99.027
06/14/1996
500,000 PITNEY BOWES CC DISC 98.990
07/23/1996
1,000,000 PITNEY BOWES CC DISC 98.787
07/22/1996
400,000 SHELL OIL SER A DISC 99.487
06/06/1996
SUBTOTAL COMMERCIAL PAPER -DISCOUNT
FEDERAL HOME LOAN MORTGAGE -LESS THAN 1 YR
3,300,000 FED HOME LN MTG CORP DISC NTS
MAT 06/28/1996
99.581
SUBTOTAL FEDERAL HOME LOAN MORTGAGE
FED LAND BANK -LESS THN lYR
3,300,000 FED FARM CR BK CONS DISC NTS
MAT 06/13/1996
99.798
SUBTOTAL FED LAND BANK -LESS THN lY
FNMA ISSUES -LESS THN lYR
10,000,000 FEDERAL NATL MTG ASSN DISC
08/23/1996
1,800,000 FEDERAL NATL MTG ASSN DISC
06/14/1996
98.536
98.871
SUBTOTAL FNMA ISSUES -LESS THN lYR
FED HM LOAN BNK -LESS THN lYR
3,100,000 FEDERAL HOME LN BK CONS DISC 98.435
MAT 08/12/1996
2,500,000 FEDERAL HOME LN BK CONS DISC 98.671
MAT 08/28/1996
3,100,000 FEDERAL HOME LN BK CONS DISC 98.698
MAT 08/14/1996
SUBTOTAL FED HM LOAN BNK -LESS THN
495,132.50
494,949.58
987,872.78
397,946.67
27,276,311.13
3,286,176.67
3,286,176.67
3,293,339.50
3,293,339.50
9,853,550.00
1,779,681.00
11,633,231.00
3,051,473.81
2,466,777.78
3,059,622.50
8,577,874.09
Page 2.1
0 .15 495,132.50 0.00 0.00 0. 0
0.15 494,949.58 0.00 0.00 0.0
0.30 987,872.78 0.00 0.00 0.0
0.12 397,946.67 0.00 0.00 0.0
8.22 27,276,311.13 0.00 0.00 0
0.99 3,286,176.67 0.00 0.00 0.0
0.99 3,286,176.67 0.00 0.00 0.0
0.99 3,293,339.50 0.00 0.00 0.0
0.99 3,293,339.50 0.00 0.00 0.0
2.97 9,853,550.00 0.00 0.00 o.o
0.54 1,779,681.00 0.00 0.00 0
3.50 11,633,23f.oo 0.00 0.00 0.0
0.92 3,051,473.81 0.00 0 .00 0.0
0.74 2,466,777.78 0.00 0.00 0.0
0.92 3,059,622.50 0.00 0.00 0.0
2.58 8,577,874.09 0.00 0.00 0.0
UC.SGUUUJ.UU
CSDOC-CONSOLIDATED
MELLON TRUST
PORTFOLIO DETAIL BY SECTOR
31-MAY-1996
SHARES/PAR SECURITY DESCRIPTION
FEDERAL FARM CREDIT BANK -LESS THAN 1 YEAR
7,000,000 FEDERAL FARM CR BK CONS DISC
MAT 06/28/96
MARKET
PRICE
99.140
SUBTOTAL FEDERAL FARM CREDIT BANK -
BSDT RESERVE DEPOSIT ACCOUNTS
290,264 BSDT RESERVE DEPOSIT ACCOUNT-
PUBLIC II
100.000
SUBTOTAL BSDT RESERVE DEPOSIT ACCOUN
CANADIAN GOVERNMENT SHORT TERM
2,100,000 CANADA GOVT DISC
06/03/1996
500,000 CANADA GOVT DISC
06/05/1996
99.110
99.590
SUBTOTAL CANADIAN GOVERNMENT SHORTT
TOTAL CASH & CASH EQUIVALENTS
?IXED INCOME SECURITIES
U.S. GOVERNMENTS
75,500,000 US TREASURY NOTES 101.766
07.125% 09/30/1999 DD 09/30/94
13,000,000 US TREASURY NOTES 96.703
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 EDS
6.490% 09/13/2000 DD 09/13/95
15,000,000 FEDERAL HOME LN MTG CORP DEBS
94.953
98.297
96.250
% OF
MARKET VALUE TOTAL
6,939,800.00 2.09
6,939,800 .00 2.09
290,264.00 0.09
290,264.00 0.09
2,081,318.75 0.63
497,950.56 0.15
2,579,269.31 0.78
63,876,266.48 19.24
76,833,330.00 23.15
12,571,390.00 3.79
89,404,720.00 26.94
9,495,300 .00 2.86
38,925,612.00 11.73
14,437,500.00 4.35
Page 3.1
COST
6,939,800.00
6,939,800.00
290,264.00
290,264.00
2,081,318.75
497,950.56
2,579,269.31
63,876,266.48
78,223,618.72
13,102,57f .13
91,326,196.85
9,593,750.00
39,890,500.00
14,554,687.50
UNREALIZED
GAIN/LOSS
0.00
0 .00
0.00
0.00
0.00
0.00
0.00
0 .00
-1,390,288.72
-531,188 .13
-1,921,476.85
-98,450.00
-964,888.00
-117,187.50
BASE: USD
HBll00
ESTIMATED CUR
ANNUAL INCOME YLD
0.00 0.0
0.00 0.0
10,884.90 3.7
10,884.90 3.7
0.00 0.0
0.00 0.0
0.00 0.0
10,884.90 0 .0
5,379,375.00 7
747,500.00 5.9
6,126,875.00 6:8
564,000.00 5.9
2,570,040.00 6.6
898,500.00 6.2
OCSGOOOlOO
CSDOC-CONSOLIDATED
SHARES/PAR SECURITY DESCRIPTION
MELLON TRUST
PORTFOLIO DETAIL BY SECTOR
31-MAY-1996
MARKET
PRICE
% OF
MARKET VALUE TOTAL COST
•
BASE: USO
HBllOO
UNREALIZED ESTIMATED CUR
GAIN/LOSS ANNUAL INCOME YLD
----------------------------------------------------------------------------------------------------------------------------------
5 .990% 03/06/2001 DD 03/06/96
25,000,000 FEDERAL HOME LN MTG DEB 98.755 24,688,750.00 7.44 25,000,000.00 -311 ,250.00 1,680,000.00 6.8
6.720% 10/02/2000 DD 10/02/95
25,000,000 FEDERAL NATL MTG ASSN DEB 99.422 24,855,500.00 7.49 25,351,562.50 -496,062.50 1,712,500.00 6. 8
6.850% 05/26/2000 DD 05/26/95
20,000,000 FEDERAL NTAL MTG ASSN 97 .937 19,587,400.00 5.90 20,128,125.00 -540,725.00 1,275,000 .00 6 .5
6.375% 10/13/2000 DD 10/10/95
----------------------------------------------------------------------------
SUBTOTAL U.S. AGENCIES 131,990,062.00 39. 77 134,518,625.00 -2,528,563.00 8,700,040.00 6
BANKING & FINANCE
1,500,000 CHRYSLER FINL MTN TR# 00201 101.355 1,520,325.00 0.46 1,534,950.00 -14,625.00 122,400.00 8 . 0
8 .160% 01/31/1997 DD 01/11/95
465,000 CHRYSLER FINL MTN TR# 00224 101.398 471,500.70 0.14 475,972.61 -4,471.91 37,572.00 7.9
8.080% 01/31/1997 DD 01/31/95
1,500,000 CHRYSLER FINL MTN TR# 00258 101.113 1,516,695.00 0.46 1,522,140.00 -5,445 .00 110,700.00 7.3
7.380% 03/17/1997 DD 03/03/95
2,900,000 CHRYSLER FINL MTN TR# 00306 101.315 2,938,135.00 0.89 2,952,896.00 -14,761.00 210,830 .00 7 .1
7.270% 04/13/1998 DD 04/13/95
1,000,000 CHRYSLER FINL MTN TR# 00335 99.293 992,930.00 0.30 993,160 .00 -230.00 62,600.00 6.3
6.260% 07/20/1998 DD 07/18/95
7,100,000 FORD MOTOR CR MTN TR# 00177 99.140 7,038,940.00 2.12 6,999,748.00 39,192.00 402,570.00 5 .7
VAR/RT 03/30/1999 DD 03/30/94
4,000,000 FORD MTR CR MTN TRANCHE #TR 96 100.092 4,003,680.00 1. 21 3,970,480.00 33,200.00 243,200.00 6 . 0
FLTG/RT 11/09/1998 DD 11/08/93
3,000,000 GMAC MED TERM NTS 105.337 3,160,110.00 0.95 3,227,070.00 -66,960.00 258,750.00 8 .1
8.625% 1/10/2000 DD 1/10/95
3,700,000 GENERAL MTRS ACCEP MTN TR00324 103.887 3,843,819.00 1.16 3,911,640.00 -67,821.00 309,875.00 8 . u
s.375% 02/03/1999 DD o/oJ/95
1,000,000 LEHMAN BROS INC SR SUB NTS 100.482 1,004,820.00 0.30 l,007,52f>.OO -2,700.00 70,000 .00 6 .9
7 .000% 5/15/1997 DD 5/27/94
2,000,000 SEARS DC CORP MTN SER II 102.520 2,050,400.00 0.62 2,050,400.00 0.00 180,000.00 8.7
9 .000% 08/01/1996 DD 08/01/91
1,000,000 SEARS ROEBUCK MTN# TR 00491 101.980 1,019,800.00 0.31 1,031,860.00 -12,060.00 76,900.00 7.5
7.690% 02/27/1998 DD 02/28/95
----------------------------------------------------------------------------
SUBTOTAL BANKING & FINANCE 29,561,154.70 8.91 29,677,836.61 -116,681.91 2,085,397.00 7.0
INDUSTRIAL
1,500,000 CHRYSLER CORP DEB 104 .439 1,566,585.00 0.47 1,603,320 .00 -36,735 .00 156,000 .00 9. 9
Page 4.1
)
OCSG000l00
CSDOC-CONSOLIDATED
SHARES/PAR SECURITY DESCRIPTION
-----------------------------
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
)THER PORTFOLIO ASSETS
PAYABLES/RECEIVABLES
0 INTEREST RECEIVABLE
SUBTOTAL PAYABLES/RECEIVABLES
TOTAL OTHER PORTFOLIO ASSETS
NET PORTFOLIO ASSETS
MELLON TRUST
PORTFOLIO DETAIL BY SECTOR
31-MAY-1996
MARKET % OF
PRICE MARKET VALUE TOTAL
106.811 9,612,990.00 2.90
100.367 2,509,175.00 0.76
13,688,750 .00 4.12
264,644,686.70 79.73
1.000 3,400,240.91 1. 02
3,400,240.91 1. 02
3,400,240.91 1.02
331,921,194.09 100.00
Page 5.1
BASE: USO
HBll00
UNREALIZED ESTIMATED CUR
COST GAIN/LOSS ANNUAL INCOME YLD
9,903,780.00 -290,790.00 832,500.00 8.6
2,554,050.00 -44,875.00 213,750.00 8.5
14,061,150.00 -372,400 .00 1,202,250.00 8.7
269,583,808.46 -4,939,121.76 18,114,562.00 6 .~
3,400,240.91 0.00 0.00 0.0
3,400,240.91 0.00 0.00 0.0
3,400,240.91 0.00 0.00 0 .0
336,860,315.85 -4,939,121.76 18,125,446.90 5.4
t
Format
~ Written Report
D Overheads
~ Slides
0 Flip Charts
Originator _f. .......... fl ____ _
Department Head Sign orr fd,tfdges
Ed Hodges
Anticipated Time ___ _
FINANCE ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
July 10, 1996
F AH R96-42: Consideration of motion to authorize the General Manager to
enter into a Contractual Agreement with a Commercial Broker
to lease 4± acres of land located at Plant 1 and 30± acres of
land located at Plant 2 for a period of up to 1 O years.
Summary
Attached for your guidance and information is the Valuation Opinion from Bozanski and
Company, a real property appraisal firm, regarding 4± acres of land located north of
Garfield Avenue and east of Ward Avenue at Plant 1, in the City of Fountain Valley, and
30± acres of land located, in the City of Huntington Beach, on the most northerly corner
of Plant 2, bordered by Brookhurst Street on the west, the Santa Ana River bed on the
east and south of the extension of Banning Avenue.
The yearly leased fee rental of the subject properties would be anticipated in the range
of 6% to 7.5% of the fair market value. This relates to an annual rental range of $6.80
to $7.25 psf for the Plant 1 property, resulting in an annual income of $71,000 to
$95,000 and $5.00°fo $5.50 psf for the Plant 2 property, resulting in an annual rental
range income in the amount of $327,000 to $539,000, excluding any brokerage fee.
The report concludes that because these sites may be necessary for long-term District
needs and therefore not suitable for permanent improvements, the highest and best
use of this vacant land would be as a storage yard, nursery, or Christmas tree farm.
(This complete report is available upon request.)
Budgetary Impact
These revenues have not been anticipated in the FY '96-97 budget. If the Districts are
successful in leasing these sites, it would increase annual revenue in the range of
$398,000 to $634,000, not including any commercial brokerage lease fees.
Staff Recommendation
Staff is requesting authority to prepare a request for qualifications and solicit proposals
from commercial brokers in the Orange County area to assist in the lease of this land.
Additionally, staff recommends that the General Manager be authorized to enter into an
agreement, in a form acceptable to General Counsel, with a commercial broker to lease
the above referenced land for a period of up to 10 years.
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\COVERS.96\FAHR96.42
..
June 5, 1996
FAHR96-42:
STAFF REPORT
Consideration of motion to authorize the General Manager to
enter into a Contractual Agreement with a Commercial Broker
to lease 4± acres of land located at Plant 1 and 30± acres of
land located at Plant 2 for a period of up to 10 years.
Asset management provides an opportunity to increase revenues to the Districts. For
the past 10 years, flows have remained the same; yet during the late 1980's and early
1990's an aggressive building program was pursued. The Districts are now at the point
where vacant land can be considered for alternative revenue productive uses.
In early 1996, staff was approached by the City of Fountain Valley with a proposal to
lease a portion of Plant 1, for a ten year period, that they could use as their city yard.
As a result of that request, staff retained Boznanski and Company to evaluate the
market value and the fair rental value of a 4± acre parcel located at Plant 1 and a 30±
acre parcel of Plant 2. Attached for your guidance and information are the cover letter
and Summary of Salient Facts and conclusions for the two reports. Complete copies of
their reports are available, upon request.
The report concluded that the highest and best use of the vacant land would be as a
storage yard, nursery, Christmas tree farm , etc. The report concludes that the
anticipated yearly annual rental range for the Plant 1 property could be $6.80 to $7.25
per square foot. This could result in an annual income of $71,000 to $95,000, not
including any brokerage fee. Additionally, the anticipated yearly annual rental range for
the Plant 2 property could be $5.00 to $5.50 per square foot. This could result in an
annual income of $327,000 to $539,000, not including any brokerage fee.
The typical published brokerage fees for leasing improved property is as follows:
• 5% of the total base rental for the first 60 months in which base rent is to be
paid, plus
• 2 1/2% of the base rental for the next 60 months in which base rent is to be paid,
plus
• 1 1/2% of the total base rental for the remainder of the term.
Their rates are merely illustrative of the commercial brokerage lease market and show
an order of magnitude expense that must be factored into any lease arrangement.
Given the scope of the parcel and the long term nature of the lease, staff believes that
any brokerage agreement should be competitively bid and negotiated as further savings
may be realized.
CSDOC e P.O Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411
FAHR96-42
Page2
June 5, 1996
Since the time that this evaluation was made, the City of Fountain Valley has decided to
make other arrangements. However, staff believes that there are potential users (ie:
nurseries, tree farm, storage yards, etc.) that might benefit from such a lease.
BUDGET INFORMATION
These revenues have not been anticipated in the FY '96-97 budget. If the Districts are
successful in leasing these sites, it would increase our annual revenue in the range of
$398,000 to $634,000, not including any commercial brokerage lease fees.
RECOMMENDATION
Therefore, staff is requesting authority to prepare a request for qualifications and solicit
proposals from commercial brokers in the Orange County area to assist in the lease of
this land. Additionally, staff recommends that the General Manager be authorized to
enter into an agreement, in a form acceptable to General Counsel, with a commercial
broker to lease the above referenced land for a period of up to 10 years.
EEH:fw
R:\WPDOC\331 0\EH\FAHR\96-42.SR
CARL W. BOZNANSKI
Di\NIEL H. HERRON
BIAKE E. BOZNANSKI
BIWE J. VAN HORN
~c-Jtuta
MARK W. LINNES
ROBMDDON
MICHAEL A. TAYLOR
Ms. Judith A. Wilson
,,....._,_)
Boznanski & Company
PROPERTY VAWATION & CONSULTATION
283 NORTH RAMPART S11lEET
SUrrEA
ORANGE. CAUFORNIA 92668-1850
March 29, 1996
Re: Valuation Opinion -
nllPHONES
(714) 634-3813
(213) 623-8471
FAX
(714) 634-4026
Chief Administrative Officer
County Sanitation Districts
Portion of Plant 2
Huntington Beach, California
of Orange County
10844 Ellis Avenue
Fountain Valley, California 92708-7018
Dear Ms. Wilson:
File No. 1260.02
In accordance with the written authoriz.ation we have received, Boznanski and Company,
a real property appraisal firm, has evaluated the market value and the fair rental value of
the fee simple interest of land underlying a portion of Plant 2 as owned by the County
Sanitation Districts of Orange County, in the City of Huntington Beach, as existing. Our
date of value is current, as of March 29, 1996.
The subject site occupies the northerly mqst 30± acres of Plant 2, in the City of
Huntington Beach. It is bordered by Brookhurst Street on the west, the Santa Ana River
bed on the east, and south of the extension of Banning A venue. This site is generally
triangular in shape. This parcel is zoned for industrial uses . • Once the property's fee value is determined, our task here is to establish an interim
rental value of thi3"'30 acre parcel as leased out for some restricted use. The site would
have one access, as existing opposite Banning Avenue. Permanent buildings would not
be permitted. The anticipated base lease term would be for 10 years with possible
options to extend The site apparently has no sewer readily available, with nominal
electricity and water nearby.
Based on the investigation and analysis outlined in the accompanying report, and
subject to the certification and contingent an~iting conditions attached to this
report, we conclude that the market valu ;itfi\ fee simple interest in the 30 acre
Plant 2 subject property, located in ll,i~tl~~ Beach, California, as of March 29,
1996, is in the rounded range of $5 ., , · $5.50 psf.
$6,534,000 to $7,187,000
County Sanitation Districts of
Orange County
-2-March 29, 1996
The anticipated yearly leased fee rental of the subject property would be anticipated
to be in the range of 5% to 7.5% of the fair ~uirket value thus relating to an annual
rental range of: ~'\,
~$539,000
Considering that we are only evaluating the underlying land here, and that there are no
improvements existent, only the Market Approach based on sales of vacant land, would
have application in this analysis. Thus, the traditional Market Approach to improved
property, and the Cost-Summation Approach would have no direct application here sinci"""
both of these techniques assume some type of improvements, which are non-exist1iere. ,/
The Income Approach is utilized by considering the net operating income that ~ be
achieved from the subject property based on observed rates of return.
We have also considered the requirements established by the Financial Institutions
Reform, Recovery and Enforcement Act (FIRREA) and the Uniform Standards of
Professional Appraisal Practice (USP AP). Among other factors, this pertains to report
preparation, value discounting during absorption period and takes into account
discounting of unusual lease and sales teI'll_lS observed in the marketplace.
Any significant changes to the site size or configuration, to the improvements in size or
quality, or any other material information supplied to us in this analysis, as further
identified herein, could affect our valuation cqnclusion and would require a re-evaluation
of our analysis.
Following this letter is a self-contained appraisal report·which describes the subject area
and the conditions of this appraisal, identifies the subject property and its characteristics
and then specifically enumerates the methodology used in valuing the subject property.
We retain a copy of this report, together with worksheets, documents and other data upon
which our conclusions and opinion of value are based.
We certify that we have no past, present or contemplated future interest in this property
and that we have acted in accordance with accepted ethics and standards in our
profession.
County Sanitation District of
Orange County
-3-. April 1,1996
Thank you for this opportunity to provide appraisal services.
CWB/bjv
R spectfully sub~,ftf •
'·•
Carl W. Boznanski, C.
Principal Appraiser
President
Certified General Appr
CA# AG010837
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
PROPERTY ADDRESS:
DATE OF VALUE:
INTEREST APPRAISED:
OWNER:
PROPERTY:
ASSESSOR'S PARCEL NOS.:
SITE SIZE:
ZONE:
USE TYPE:
I:IlGHEST AND BEST USE:
"As Though Vacant Land":
"As Improved": • VALUE INDICATIONS:
Cost Approach:
Market Approach (Land):
Annual Rental Value:
East side of Brookhurst Street opposite
Banning Avenue, Hwitington Beach
March 19, 1996
Fee Simple
County Sanitation District of Orange County
156-181-2, 3 and 3
30 acres (Portion of larger sanitation district
operating plant)
M-1-A-CZ (Restricted Manufacturing
District -Coastal Zone); City of Huntington
Beach
Vacant
Short term use as a storage yard, nursery,
Chri~tmas tree farm, etc.
Not applicable
NIA · -, :~
S¥34J)J)9)to. $7,187,000
~~eo to $539,000 V
CARL W. BOZNANSKI
Di\NIEL H. HERRON
BLAKE E. BOZNANSKI
BIWE J. VAN HORN
ValadoeCoMtaltub
MARK W. UNNES
ROBPADDON
MICHAEL A. TAYLOR
Ms. Judith A. Wilson
Boznanski & Company
PROPERTY VALUATION & CONSULTATION
283 NORnl RAMPART SlREET
SlJrreA
ORANGE, CALIFORNIA 92668-1850
March 29, 1996
Re: Valuation Opinion-
Portion of Plant 1
TELEPHONES
(714) 63,1.3813
(213) 623-8471
FAX
(714) 634-4026
Chief Administrative Officer
County Sanitation Districts Fountain Valley, California
of Orange County
10844 Ellis Avenue
Fountain Valley, California 92708-7018
Dear Ms. Wilson:
File No. 1260.01
In accordance with the written authorization we have received, Boznanski and Company,
a real property appraisal finn, has evaluated the market value of the fee simple interest of
land underlying Plan 1 as owned by the County Sanitation Districts of Orange County, in
the City of Fountain Valley, as existing. Our date of value is current, as of March 29,
1996. .
The subject property is located on a 4± acre rectangularly shaped parcel of land located
north of Garfield Avenue and east of Ward Avenue in the City of Fountain Valley. It is an
integral part of a 110± acre site, commonly known as Plant 1 of the County Sanitation
Districts of Orange County. We looked to the highest and best use of this industrially
zoned property to be for a light industrial and business park purposes.
Once the property's fee value is determined, our task here is to establish an interim
rental value of this 4 acre parcel as leased out for some restricted use. The site would
have one access off of Garfield Avenue. Nominal permanent buildings would be
permitted. The anticipated base lease term would be for 10 years with possible options to
extend The site apparently has no water or sewer readily available, with nominal
electricity nearby.
Based on the investigation and analysis outlined in the accompanying report, and
subject to the certification and contingent and limiting conditions attached to this
report, we conclude that the market value o~e simple interest in the existing 4±
acre Plant 1 subject property, located !~tain Valley, California, as of March
29, 1996, is in the rounded range of$6F ,o $7.25 psf, or:
Sl,18Sj0 to $1,263,000
County Sanitation Districts of
Orange County
March 29, 1996
~ The anticipated yearly leased fee rental of tbf~~ect property would be anticipated
to be in the range of 6% to 7.5% of thM ~~\rket value thus relating to an annual
rental range of $71,000 to $95,000. ~\'-:.,
Considering that we are only evaluating the underlying land here, and that there are no
improvements existent, only the Market Approach based on sales of vacant land, would
have application in this analysis. Thus, the traditional Market Approach to improved
property, and the Cost-Summation Approach would have no direct application here since
both of these techniques assume some type of improvements, which are non-exist here.
The Income Approach is utilized by considering the net operating income that can be
achieved from the subject property based on observed rates of return.
We have also considered the requirements established by the Financial Institutions
Reform, Recovery and Enforcement Act (FIRREA) and the Uniform Standards of
Professional Appraisal Practice (USP AP). Among other factors, this pertains to report
preparation, value discounting during absorption period and takes into account
discounting of unusual lease and sales terms observed in the marketplace.
Any significant changes to the site size or configuration, to the improvements in size or
quality, or any other material information supplied to us in this analysis, as further
identified herein, could affect our valuation conclusion and would require a re-evaluation
of our analysis.
Following this letter is a self-contained appraisal report which describes the subject area
and the conditions of this appraisal, identifies the subject property and its characteristics
and then specifically enumerates the methodology used in valuing the subject property.
We retain a copy of this report, together with worksheets, documents and other data upon
which our conclusions and opinion of value are based.
We certify that we have no past, present or contemplated future interest in this property
and that we have acted in accordance with accepted ethics and standards in our
profession.
. ' .. ,
1
County Sanitation District of
Orange County
-3-March 29, 1996
Thank you for this opportunity to provide appraisal services.
CWB/bjv
Respectfully submitted,
,
Principal Appraiser
President
Certified General App ser
CA# AG010837
SUMMARY OF SALIENT FACTS AND CONCLUSIONS
PROPERTY ADDRESS:
DATE OF VALUE:
INTEREST APPRAISED:
OWNER:
PROPERTY:
ASSESSOR'S PARCEL NO:
SITE SIZE:
ZONE:
USE TYPE:
HIGHEST AND BEST USE:
"As Though Vacant Land":
"As Improved":
VALUE INDICATIONS:
Market Approach:
Annual Rental Value:
North side of Garfield Avenue east of Ward
Street, Fountain Valley
March 29, 1996
Fee Simple
County Sanitation Districts of Orange
County
156-101-03 (Portion)
4 acres (Portion of larger 110± acre
Sanitation District operating plant)
M-1 (Manufacturing District); City of
Fountain Valley
Vacant
NIA
Format
• Written Report
• Overheads
isndes
• Flip Charts
Originator /1(\,~~
Department Head Sign Off ~
Anticipated Time 10 mins.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JULY 10, 1996
FAH R96-43: Authorize Human Resources Department to issue Request for
Proposal (RFP) for professional consultant services to conduct a
study to determine feasibility of broadbanding
Summary
The Districts' current classification structure has 146 separate job classifications. That equates to a
different job title for every fourth employee. Management believes this specialization is contrary to the
goals of a productive and flexible workforce.
The rapidly changing technological environment is forcing organizations to continually expand the skills of
employees. Companies need generalists who can adapt and change as an organization evolves.
Specialized professional services are increasingly being contracted out.
Broadbanding is a salary management system in which several existing salary ranges with widths of 40-50
percent are collapsed into a few very wide salary ranges with widths of 100 percent or more. These wider
salary ranges are commonly referred to as Mbands.R It is foreseeable that the Districts can reduce job
families with up to twelve classifications to two or three through broadbanding. For many organizations,
broadbanding supports a dramatic change in the organization's culture, fosters a flatter organization,
creates a broadly skilled workforce, encourages teamwork, and supports career development
opportunities.
It is recommended that an outside consultant be brought in to evaluate the Districts' objectives for
designing a broadbanding program and to evaluate the existing pay administration program to determine if
broadbanding will support the agency's objectives. A consultant will have experience with what can go
right and what can go wrong with broadbanding.
Fiscal Impact
Staff has budgeted $40,000 for this study, and is asking for approval to solicit bids from qualified
consultants. Human Resources staff will closely monitor the study and will provide much of the
administrative assistance in order to minimize costs.
Recommendation
Authorize Human Resources Department to issue Request for Proposal (RFP) for professional consultant
services to conduct a study to determine feasibility of broadbanding.
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\COVERS.96\FAHR96.43
July 10, 1996
STAFF REPORT
FAHR96-43: Authorize Human Resources Department to issue Request for Proposal
(RFP) for professional consultant services to conduct a study to determine
feasibility of broadbanding
BACKGROUND
What is Broadbanding?
Broadbanding is a salary management system in which several existing salary ranges with
widths of 40-50 percent are collapsed into a few very wide salary ranges with widths of 100
percent or more. These wider salary ranges are commonly referred to as "bands." Typically,
there are no midpoints or control points within the salary ranges, but rather market points or
zones which indicate the market value of a particular job.
For some organizations, the purpose for broadbanding is simply to reduce the number of salary
ranges and widen pay ranges to simplify the job evaluation process and reduce administrative
bureaucracy. For other organizations, broadbanding supports a dramatic change in the
organization's culture, fosters a flatter organization, creates a broadly skilled workforce,
encourages teamwork, and supports career development opportunities. Where properly
implemented, broadbanding can decrease the emphasis on racing up the corporate ladder and
focus on "getting the job done."
William M. Mercer, a leading compensation and human resource consulting firm, conducts an
annual planning survey of 3,000 organizations, public and private, covering all industry
segments. According to the survey, 12% of organizations use broadbanding and 31% are
considering implementing broadbanding.
Research shows that broadbanding is used by various types of organizations. Hewitt
Associates LLC conducted a major research study for the American Compensation Association
in which approximately 116 companies that had implemented broadbanding were interviewed.
The companies ranged in size from 65 to 127,000 employees, with revenues between $7.5
million to $44 billion, and were from both manufacturing and nonmanufacturing industries,
including government and utilities.
Broad Grades vs Career Bands
Some organizations follow what is known as "the traditional" view of broadbanding by installing
"broad grades" to promote organization flexibility and to streamline salary administration.
Organizations that use broad grades are more likely to have traditional salary administration
CSDOC • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411
FAHR96-43
Page2
July 10, 1996
practices using midpoints, zones or control points within bands. These organizations reduce
their number of pay levels just slightly, creating bands that are only about twice as wide as the
original salary grades.
Other organizations use "career bands" to enhance career mobility and promote significant
cultural change. Organizations that use career bands tend to reduce the number of pay levels
more dramatically and install bands that are three to eight times wider than the previous salary
ranges. They are also less likely to use traditional control points within bands. Career banding
is most typically associated with broadbanding and is the most widely used design option.
Number of Bands
Companies that implement broadbanding typically reduce the number of salary ranges by one-
third to one-half the original number of ranges. The number of bands is determined by the
number of "value-added" contribution tiers that exist within an organization. The contribution
tiers reflect the various levels of employee contributions -for example, "Administrative Support,"
"Professional," and "Management." Organizations that implement broadbanding typically have
four (4) broad grades or two (2) career bands for executive management; three (3) broad
grades or three (3) career bands for exempt employees; and, four (4) broad grades or two (2)
career bands for nonexempt employees.
A general profile is developed for each band describing the characteristics of the jobs assigned
to it. Jobs are assigned to a band by comparing the job descriptions to the band profiles.
Zones
A common approach to controlling movement within a band involves the creation of zones.
Each band is divided into zones (typically three zones) and jobs are placed in a zone based on
market value. Movement within the zone is based on performance. Movement into a higher
zone requires attainment of successively more demanding and valued skills or competencies
which may be acquired through training, experience, additional education or lateral career
development moves within a zone. Skill sets for each zone are developed to guide the
manager in determining when movement to a higher zone is appropriate.
Employee Performance, Career Planning and Band Movement
A performance management system that rewards employees for successful achievement of
performance objectives that support the overall mission of the organization should be in place to
support the broadbanding effort. An effective training program that identifies an employee's
career planning goals also must be in place to support the broadbanding effort. The
combination of an effective performance management system, an effective training program and
a salary administration system that encourages lateral moves, rewards employees for the
acquisition of skills or competencies, and rewards for promotional opportunities will support an
organization's objective to become flatter, more broadly skilled, encourage teamwork, and
promote career development.
FAHR96-43
Page 3
July 10, 1996
Employees will move up bands if they continue to perform at a high level and are willing to move
laterally within a band. High growth employees will consistently exceed expectations and will
experience a lot of intra-band moves, typically every two years. A growth employee will
consistently exceed expectations, but not have as many intra-band moves. A stable employee
will meet expectations and have no intra-band moves. Performance will become an integral
part of career opportunities within the broadbanding system.
Impact on Costs
Many people assume that broadbanding will increase payroll costs, however, research indicates
that this is not the case. In a study conducted by Hewitt Associates, 70% of the companies
questioned through a survey regarding their experience with broadbanding indicated that their
payroll costs were no harder to control under bands than under the previous system. Although
jobs have wider pay ranges and managers have more discretion with broadbanding, they
receive no more money for salary increases than they did before and they must still manage
within the same budget restrictions. They are forced to manage their compensation costs. One
organization claims to have reduced spending on salary increases with broadbanding because
their managers were more sensitive to market value of jobs and were not willing to pay above-
market rates.
Scope of Work for Study
It is recommended that an outside consultant be retained to evaluate the Districts' objectives for
designing a broadbanding program and to evaluate the existing pay administration program to
determine if broadbanding will support the agency's objectives. A consultant will have
experience with what can go right and what can go wrong with broadbanding. If it is determined
that broadbanding can be an effective salary administration tool, the consultant will, with
assistance from Districts' staff, design a broadbanding program; conduct a salary and
classification study to determine where the most appropriate bands exist and what the actual
market values are of the jobs within those bands; and, develop profiles for the bands. Districts'
staff will act as technical advisor to the consultant and employees will be asked to participate on
broadbanding design teams.
The schedule for the study will be as follows:
7/25/96
8/16/96
By 8/21/96
8/22/96
8/26/96
10/26/96
Recommendation
RFP Mailing
Proposal Due Date -5:00 p.m.
Selection Committee Evaluation
Proposed Award Date
Estimated Project Start-up
Project Completion Date
Recommend Boards approval issuing a Request for Proposals (RFP) to conduct a study to
determine the feasibility of broadbanding within the Districts.
MP
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.43
Format
• Written Report
• Overheads
• Slides
• Flip Charts
Originator~
Department Head Sign Off~
Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JULY 10, 1996
F AH R96-44: Alcohol and Controlled Substances Policy and Testing
Program
Summary
The Omnibus Transportation Employee Testing Act requires every driver who operates
a commercial motor vehicle in interstate or intrastate commerce, and is subject to
commercial driver's license requirements, to be subject to an Anti-Drug and Alcohol
Program. The Program states that the Districts will supply educational materials to
explain the policies and procedures, specify conduct prohibited by the regulations,
conduct random substance abuse testing, and advise employees of available
resources. This Program implements federal legislation.
A copy of the County Sanitation Districts of Orange County Substance Abuse and
Alcohol Misuse Plan will be available at the meeting.
Recommendation
Approve Resolution No. 96-_ amending Resolution No. 95-105.
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\COVERS.96\FAHR96.44
July 10, 1996
STAFF REPORT
FAHR9644: Alcohol and Controlled Substances Policy and Testing Program
Summary
The Omnibus Transportation Employee Testing Act requires every driver who operates a commercial
motor vehicle in interstate or intrastate commerce, and is subject to commercial driver's license
requirements, to be subject to an Anti-Drug and Alcohol Program. The Program states that the Districts
will supply educational materials to explain the policies and procedures, specify conduct prohibited by the
regulations, conduct random substance abuse testing, and advise employees of available resources. This
Program implements federal legislation.
A copy of the County Sanitation Districts of Orange County Substance Abuse and Alcohol Misuse Plan will
be available at the meeting.
Background
The Omnibus Transportation Employee Testing Act of 1991 requires alcohol and drug testing of safety
sensitive employees in the aviation, motor carrier, railroad and mass transit industries. The Department of
Transportation published rules mandating anti-drug and alcohol misuse prevention programs in February
of 1994. These rules require employers with safety sensitive employees, including the Districts, to
implement those regulations. The job classifications that are affected by the DOT requirement include
Line Cleaners and Equipment Operators. The incumbents in these classifications are required to have a
commercial license which enables them to drive or operate the Districts' large trucks, cranes, vehicles, etc.
The regulations require that the Districts:
1. Provide educational materials that explain the policies and procedures with respect to meeting the
requirements;
2. Specify conduct prohibited by the regulations;
3. Establish a program of pre-employment and random substance abuse testing;
4. Advise employees of resources available in resolving problems associated with the misuse of
alcohol or other controlled substances.
Recommendation
Approve Resolution No. 96-_ am mending Resolution No. 95-105.
MP
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.44
CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411
~
• Written Report
• Overheads
D Slides
o Flip Charts
Origiaa~,t--
Oepartment Head Sign Off __ _
Gary Streed
Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
FAHR96-45:
Summary
AGENDA FOR
JULY 10, 1996
Approval of Joint Powers Agreement Establishing the
Orange County Council of Governments.
The Orange County Council of Governments (COG), was officially formed in June, 1996 when
the requisite number of cities approved the Joint Powers Agreement (JPA) establishing this
organization. The JPA for the COG provides for an organization of 21 voting members. These
include: Orange County's 12 delegates to SCAG; and one member each from the following:
Orange County Division of the League of Cities; County of Orange; Orange County
Transportation Authority; Independent Special Districts of Orange County/Water Agencies
representative; Orange County Cities AQMD representative and County of Orange AQMD
representative; an at-large Orange County City; and the County Sanitation Districts of Orange
County. Also included are two non-voting members representing the private sector and the
universities.
The COG is not intended to be another layer of government. Rather, it was intended to replace
the Orange County Regional Advisory and Planning Council (RAPC), which has existed since
1991. The COG's functions will include issues such as air quality attainment strategies,
providing subregional input to SCAG in it's development of mandated regional plans, review of
legislation pertaining to regional issues, liaison with the private sector, performing regional
housing needs assessments, and developing data for studies and planning activities.
Budget Impact
There are no membership dues required. The COG will not require new staff and instead will
tap into existing staff resources from member entities. The COG's expenses will be covered
through funds made available to the Orange County subregion from SCAG.
Staff Recommendations
Aµprove the Joint Powers Agreement establishing the Orange County Council of Governments.
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\COVERS.96\FAHR96.45
June 26, 1996
FAHR96-45:
1. Background
STAFF REPORT
Approval of Joint Powers Agreement Establishing the Orange
County Council of Governments.
Efforts to do regional consensus-building and planning in Orange County date back to 1973
with the establishment of the Intergovernmental Coordinative Council. In 1980, a Subregional
Planning Council was formed to be replaced in 1987 by the City/County Working Group. The
current Regional Advisory and Planning Council (RAPC) was formed in 1991.
Subsequent to the bankruptcy, local jurisdictions and agencies have been re-examining
traditional roles and responsibilities. In January, 1996, the Orange County Division of the
League of Cities passed a resolution directing its staff to develop a Joint Powers Agreement
(JPA) forming a Council of Governments (COG) for consideration by the cities, the county and
other affected public agencies. This resolution was passed as a consequence of a
recommendation made by the Orange County City Manager's Association. In response to the
bankruptcy and the expectation that the County of Orange would be reducing its role in regional
issues, the City Manager's Association convened a task force to determine the most effective
means of comprehensively addressing regional planning.
The Task Force reviewed various models for addressing regional planning issues and
recommended the formation of a COG. The COG was intended to provide an arena for public
agencies to exchange ideas and information, conduct studies, and build consensus among
members on regional and subregional issues, as well as advocating Orange County interests at
the regional, state, and federal level.
11. Issues Regarding Formation of the COG
The formation of the COG required the approval of the JPA by a majority of cities representing
a majority of the population. This threshold was reached on June 3, 1996. To date, 24 cities
have approved the agreement (this includes all Districts' participating agencies/cities with the
exception of Anaheim, Garden Grove, Seal Beach and Yorba Linda). Although the cities have
been supportive of the COG's formation, other agencies and interests have indicated concerns.
County of Orange
The County has not taken action on the JPA. Jan Mittermeier, County CEO, has expressed
concerns about the purpose and functions of the COG, in particular, a concern that the COG
may get into the direct delivery of services. Since the COG can also compete for federal and
state grants, she has also indicated a concern that it may syphon off funds that might otherwise
go to the County.
CSDOC • P.O. Box 8127 • Fountain Vallev. CA 92728-8127 • (714) 962-2411
FAHR96-45
Page 3
June 26, 1996
also maintained that because the MOU for the Cal State Fullerton Center for Demographic
Analysis requires that its work products be reviewed by RAPC, RAPC must continue to exist
unless the MOU is specifically amended. She further noted that the County is currently paying
more than half of the costs of the Center and is not ready to support the COG at this time. At
this writing, meetings are underway between the County Counsel and League Counsel as well
as among the funding partners of the Center for Demographic Analysis to resolve these issues.
The Executive Management Committee of RAPC will be meeting on July 1 O to review progress
on these issues. Districts' staff will brief the FAHR Committee at the July 10 FAHR Committee
regarding these discussions.
RECOMMENDATION:
The Orange County Council of Governments is now established. The Joint Powers Agreement
provides for representation by the Sanitation Districts. The Districts have been an active
participant in RAPC. Assuming that the COG is the successor agency, and noting the Districts
need to be well informed about regional planning issues, it is recommended that the attached
Joint Powers Agreement be approved.
JAW:cmc
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\STAFFRPT.96\SRFAHR96.45
JOINT POWERS AGREEMENT
ESTABLISHING THE
ORANGE COUNTY COUNCIL OF GOVERN:MENTS
This presentation reflects the Agreement made between the Member Agencies (listed in
Exhibit 2) hereinafter collectively or individually referred to as "Member Age!1cies."
RECITALS
A. Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the
California Government Code authorizes two (2) or more public agencies to jointly exercise
any power common to them.
B. Each Member Agency and party to this Agreement is a (governmental) entity
established by law with full powers of government in legislative, administrative, financial
and other related fields.
C. Member Agencies realize the urgent need for areawide planning and
coordination in order to provide advice to public entities on a range of issues that affect
multiple interests.
D. Member Agencies believe that the joint exercise of their powers will provide
an organization capable of conducting studies and projects designed to improve and
coordinate common governmental responsibilities and services on an areawide and regional
basis through the establishment of a council of governments.
E. Member Agencies wish to create a unified subregional organization which
will improve Orange County's abilities to be represented in the southern California region,
the State of California and the nation on issues and matters that affect collective Orange
County interests.
F. Member Agencies believe that an Orange County Council of Governments
is best suited to accomplish the preparation of subregional plan components mandated by
1
a. To exercise jointly the common powers of its members to manage and
administer any implementation agreement or program;
b. To make and enter into contracts;
c. To contract for the services of engineers, planners, financial consultants and
others and apart therefrom to employ such other persons, as it deems
necessary;
d. To adopt rules, regulations, policies, bylaws and procedures governing the
operation of OCCOG;
e. To apply for grants under any federal, state, regional or local programs as
needed to achieve member objectives;
f. To receive gifts, contributions and donations of property, funds, services
and other forms of financial assistance from persons, firms, corporations
and any governmental entity;
g To the extent not specifically provided in this Agreement, to exercise any
powers authorized by the member agencies to achieve the OCCOG 's
objectives.
3 .1 Membership
SECTION 3
ORGANTZA TIQN
The parties to OCCOG shall be each public entity which has executed or
hereafter executes this agreement, or any addenda, ainendment, of
supplement thereto, and which has not, pursuant to provisions hereof,
withdrawn from the OCCOG.
Other entities within Orange County may petition to become a member of
the OCCOG by submitting to the Board of Directors (The Board) a resolution
adopted by its governing body. The Board shall review the petition for
membership and shall vote to approve or disapprove the petition. If the petition is
approved by a majority of the Board the petitioning entity shall become a member of
theOCCOG.
The names and addresses of the member parties at any time shall be shown
on Exhibit 2, attached, as amended or supplemented from time to time.
3
4.2 SCAG District Representatives
For OCCOG members who are appointed as SCAG district representatives,
participation/membership in SCAG is not a prerequisite for OCCOG membership.
For SCAG District representatives to OCCOG who are not members of SCAG,
OCCOG membership will be detennined by the jurisdiction(s) that constirute the
SCAG District. This applies to both City and County representatives.
4.3 AQMD Governing Board Representatives
The AQMD representatives to OCCOG shall be the Orange County Cities and the
County of Orange representatives to the Governing Board of the South Coast Air
Quality Management District. Should the Cities AQMD Governing Board position
be vacant, the vacancy on OCCOG shall be filled through the City Selection
Process of the Orange County Division, League of California Cities. Should the
County's AQMD Governing Board position be vacant, the vacancy on OCCOG
shall be filled by the Orange County Board of Supervisors.
4.4 Appointments by Member Agencies
OCCOG representatives for the County of Orange (1 member), the Orange County
Transportation Authority (1 member), the Orange County Transportation Corridor
Agencies (1 member), and the Orange County Sanitation Districts (1 member) will
be appointed by these agencies' governing boards.
The representative (1 member) from the Orange County Division, League of
California Cities will be appointed by that organization's Executive Steering
Committee.
The at-large representative of the Orange County Cities will be selected annually by
Orange County Cities through the City Selection Committee.
The Independent Special Districts of Orange County (ISDOC) / water agency
representative will be determined by its Board of Directors .
4.5 Private Sector Representation
An ex-officio, non-voting representative from the private sector (as determined by
the OCCOG) will be determined by that private sector entity.
5
elected official shall represent that agency on the OCCOG Board of Directors.
Procedures for filling open OCCOG member positions will follow those described
in this Sections 4.2, 4.3, and 4.4.
4.11 Officers
Chair: The Chair of the Board shall be elected annually at the first regular meeting
of each calendar year. Any Board member may be authorized to represent the
Board upon approval by the Chairman.
Vice Chair: The Vice Chair of the Board shall be elected annually at the first regular
meeting of each calendar year, and have all the powers to act in the place of the
Chair in the Chair's absence.
4.12 Quorum
A majority of appointed voting directors shall constitute a quorum for acting on the
business of the Board. If such number of Board members is an even number, a
majority shall be one more than half the number of appointed directors to the Board.
4.13 Meetings
Regular Meetings: Regular meetings of the Board shall be held every month
according to a schedule approved by the Board at its first meeting each calendar
year.
Special Meetings: Special meetings may be called by the Chairman or a quorum of
Board members.
· Brown Act: All meetings shall be called and conducted in accordance with the
Ralph M. Browri Act.
4.14 Bylaws
Bylaws providing additional details pertaining to the conduct of OCCOO and its
support structure will be established and approved by the OCCOG Board.
7
5.2 Funding
Funding for the Council's operation will be provided by monies provided to Orange
County from the Southern California Association of Governments, member and/or
non-member agency financial contributions, grants, and other sources authorized
and approved by the OCCOG Board of Directors.
5.3 Assignment of Additional Responsibilities
In addition to the initial OCCOG tasks identified in Exhibit I, additional
responsibilities will be undertaken by OCCOG in accordance with the-following
procedures.
a. Requests to Examine Issues and Provide Input/Recommendations:
Requests from non-member and member agencies may be made to OCCOG to
examine activities and provide recommendations. The OCCOG shall assign the
Executive Management Committee the task of examining staffing/funding issues
and providing recommendations to OCCOG on how and whether it might choose to
pursue the request. In addition to considering potential staffing/funding
constraints, the EMC will also base its recommendations, and the OCCOG shall
consider, on whether the request/issue has strong countywide support among
OCCOG members and can reduce or eliminate duplication, improve efficiencies and
otherwise achieve countywide consensus and OCCOG objectives.
b. Assignment of Responsibilities to OCCOG: Should requests from member
and/or non-member agencies be made for the OCCOG to assume responsibility for
delivery of services, development of plans, programs or similar activities, the
OCCOG would assume said responsibilities upon a 2/3 vote of its Board of
Directors, with concurrence of the affected agency (ies).
9
6.6 Accounts and Reports
The OCCOG shall establish and maintain such records and accounts which are
deemed necessary to account for and report on the various sources of funds,
expenditures, grants, programs and projects and, as may be required by good
accounting practice, the State Controller or the United States Government. The
books and records of the OCCOG shall be open to inspection by representatives of
the members agencies at all reasonable times.
SECTION?
INDEMNITY
7 .1 Hold Harmless and Indemnity
Each party hereto agrees to indemnify and hold the other parties harmless from all
liability for damage, actual or alleged, to persons or property arising out of or
resulting from negligent acts or omissions of the indemnifying party of its
employees.
7 .2 The member agencies, and their employees, officers, members and directors will
not be liable to OCCOG (or anyone who may claim any right because of a
relationship with OCCOG) for any acts or omissions related to the service to
OCCOG described in Section 5.1. OCCOG and its members will indemnify and
hold the members harmless from any obligations, costs, claims, judgments,
attorney's fees, and/or attachments in any way connected with the services provided
to OCCOG under this agreement.
8.1 Termination
SECTION 8
TERMINATION AND DlSSOLUTION
The OCCOG shall continue to exercise the joint powers herein until the termination
of this Agreement and any extension thereof or until the parties shall have mutually
rescinded this Agreement; providing, however, that the OCCOG and this agreement
shall continue to exist for the purposes of disposing of all claims, distribution of
assets and all other functions necessary to conclude the affairs of the OCCOG.
Termination shall be accomplished by a majority action of the Board.
11
EXHIBIT I
INITIAL OCCOG RESPONSIBILITIES
1. Demographic activities in conjunction with California State University (or
successor) as described in attached Memorandum of Understanding
2. Air Quality Activities
• Input to development of Transportation Control Measures for Air Quality
Management Plans. Market incentive plans and technologies promotion and
implementation.
• Monitoring regional, state and federal air quality plans and requirements
• Liaison with SCAG, SCAQMD and others on air quality issues
3. Orange County Input to SCAG Activities
• Regional Comprehensive Plan & Guide development and implementation
• Input to development of long-range transportation plans prepared by
transportation commissions ·
• Preparation of other long-range plans/strategies as agreed by affected
officials
4. Intergovernmental coordination with public and private sectors
5. Legislative Review/Outreach/Interface on activities affecting member agencies
6. Regional Housing Needs Assessment
13
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as evidenced
by the signatures below.
ORANGE COUNTY COUNCIL OF GOVERNMENTS
DATED: ________ _
ATTEST:
DATED: _________ _
cogsignaturcpage
13
By:
Chair
Attest:
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Reed Royalty
Executive Vice President
Orange County Taxpayers Association
30205 Hillside Terrace
San Juan Capistrano, CA 92675
June 21, 1996
Subject: Orange County Council of Governments
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HU:-ITINGTOl'i H t:1-1 Dear Reed;
IRVINE
I.A HABRA
I.A PAL'dA
I.AGUNA HF'..AC:H
1.AGliN.\ lflu..-;
1.AGlJ~A NIGUEi
I.AKE FORFST
LOS AI.AMl'l'OS
MISSION VIFJO
NtWPOK'r 8~C:H
ORANC:F.
Thank you so much for arranging on short notice for Division President
Laurann Cook and myself to meet with you and your members recently. We appreciate
the opportunity to discuss this issue and answer questions. Thank you as well for your
correspondence dated June 11, 1996 in which you provided some concerns and
recommendations from an OCTax Committee convened to review the Council of
Governments (COO) Joint Powers Agreement. Although the COG ~ officially
formed, I believe that some of your points, specifically as they pertain to contracting
and conflict of interest, can be addressed in the bylaws that wiU be developed once the
COG formally convenes (scheduled foe August 15, 1996). Following is a response to
the points made in your transmittal.
1'1./1.Ct."NTIA s~ c:r.EMENTF.t 1. OCTax Suggestion (Recitals, Paragraph C): Delete "planningt' or
sAN 11/AN cM•1 · KANO define to exempt land use planning. The use o.f the word ~'planning" here has
.SANTA MA no context with or relation to land use planning. The COG will be an advisory agency
sr.Ai. a•:1oc.11 to ics members; it is not proposed generally or specifically anywhere in the JP A that
~•ANTI>N land use planning and/or decision-making will be a COG responsibility.
Tl!STIN
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WF.S'l'MINSn:It
YORBA I.INDA
2. OCTax Suggestion (Recitals, Paragraph F): Narrow recital to derme
specific functions. Delete the words "and solutions". This recital, as is the
case with recitals generally, is not intended to provide a specific listing of COO
responsibilities. Such a list can be found as Exhibit I of the JPA. Rather, the .recital
expresses a recogniz.ed need for improved coordination among governmental entities
for addressing issues of common concern. Developing recommendations and solutions
to identified problems should be the logical, practical result of such endeavors. I am
sure developing solutions that could result in improved coordination and cost-savings
among agencies is a goal common to both of our organizations.
3. OCTax Suggestion (Section 2.1, subsections b and c): The COG
should abide by the provisions of the Public Contracts Code that require
competitive bids. This could be an appropriate component of the COG's bylaws.
which will be developed by the COG members .
4. OCTax Suggestion (Section 4.10): Expand the Section to protect
again.:it conflicts of interesL This could be considered as the COG's bylaws are
developed.
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Janice M. Mittenneier
Chief Executive Officer
County of Orange
10 Civic Center Plaza, 3rd Floor
Santa Ana. CA 92701-4062
June l9, 1996
JUN 27 '96 14:46
Subject: County of Orange Comments re: Orange County Council of Govemrnenrs
Dear Jan:
It has been brought to my attention that at last week's Executive Management
Committee meeting. after I left the room. you stated I bad not responded to your April
16, 1996 letter in which you raised questions regarding the Council of Governments
(COO) proposal. I hope you recall tbe meeting held on April 17, 1996 at Fountain
Valley Ciry Hall at which Division President Laurann Coo~ your staff member
Kathleen Freed, you and I were in attendance. In confening with President Cook we
agn:e that our recollection of that meeting is that, after extensive discussion of your
concerns and issues. it was recognized that we would have to agree to disagree on the
issue of the COG. President Cook and I promised to keep the lines of communication
open and to demonstrate through action that the County of Orange could benefit from
participation in the COG. Both President Cook and I left the meeting feeling we had· ·
made a substantial effort to respond to your concerns but realized that a difference of
opinion existed abouc which, at this time, we could do nothing more. Subsequent to
that date, Division Second Vice President Bev Pmry and myself also met with you and
there have been at least two other meetings whcte we were both m attendance and the
COG was discussed. I regret any misunderstanding on my part which led to my belief
~ the personaJ meeting with lbe President of the Division and myself and these other
meetings were an adequate response to your April 16 letter. Please consider this letter
and itS anachments my written reply.
As noted above, the COO proposal has been carefully developed with the
a.ssistacce of numerous City-elected officials, aecutive management and technical staff
during the course of the last year, Like the County of Orange, Orange County cities
also put forth considerable effort to addn!.ss the bankruptcy, and significant attentiqn
has been fqcused on developing solutions to respond to the Cotmty's fiscal ~risis.
Despite these pressing demands. during the last year Cities convened a
Restructuring Supercommittcc comprised of City-elected officials to examine and make
recommendations on a number of restructuring issues, including privatization and use
of assets. a county charter, and a restructured system for the delivery of setVices to
Orange County residents (this effort was modeled after the Division's Transportation
Super Committee oftbe late 1980'sheaded up by then Santa Ana Mayor Dan Young).
The Division. in September 1995, adopted che Supen:ommittee's report which included
a recolll11le'ndation that a COG be established. A list of individuals who provided input
to the Super Committee is attached. (As a follow-up to the recommendations of the
Restructuring Supcrcom.minec, the Division's Executive Steering Committee. in
developing itS arinuaJ Strategic Plan. identified the formation of a COO as one of its top
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791 Pffi JUN 27 '96 14:46
Response to Specific Comments Contained in Mittermeier
Correspondence
Comment:
Response:
Comment:
Response:
Corr,ment:
Response:
Comment:
Response:
1ne role of the COG in restructuring discussions should be the subject
of the restructuring effort, nor the forum for rhese activitie$,
The current emphasis of the COG is to perform activities currently under
the purview of the Regional Advisory and Planning Council. As such.
the COG proposal is first seen as a way to improve on how RAPC
activities h.a.ve been performed in the past. with an eye to improving
Orange County's standing in the region in influencing the development
of policy affecting all of the COG participams. Regarding the COG as a
restructuring forum. it seems clear that if real "restructuring" is to occur
in che County it must be accomplished with input from and reYiew by an
number of interests, not from a single entity. The COG would provide
an ideal forum in which such discussions should occur.
What regi.orral pimu,ing will the COG engag~ in aml how will it
coordinate with other regional plannirrg efforts?
The COG proposal is to focus on six topical areas which arc for the
most part currently performed by RAPC. As has been discussed for
months. the identification of these activities was based on the fact that
there is an immediare need for attention to be focused on them, no single
agency focuses on them and that collective cost-savings can be achieved
in coordinating staff resources to enrnine issues of mutual concern.
Will IM COG puntu SCAG ngional planning grant funds for
rransponanon in Orange County? .
Funds cum:ntly provided by SCAG to Orange County, which are now
used for a variety of projects under RAPC, have been identified as a
source of funding for the COG. As an example. the COO proposal
does not envision that the COG Will engage in ~portation planning.
as that is a function cum::ntly performed at the subregional level by
OCTA Transportation-related activities which may be outside the
purview of OCT A but where OCT A might benefit from local input could
logically be cxaminP1i through the COG.
ls it the intent that the COG would pursiu pi4m,ing funds for use by the
uniu of local guvemnumt that currently provith the urvices? How do
we avoid competitive grant proposa.Ls from a new COG and regional
service provider? ·
COG funding, as previously noted. will be provided in part through
subregional allocations made available from SCAG. Orange County's
objective is to utilize these funds in the most efficient manner possible,
and it is anticipated mat the COG will provide a focal point for such
791 P08 JUN 2? '';;lb 14: 4"(
meetings will be publicly noticed and participation and input will be
encouraged.
f2!!!!!!
c Written Report
C 0Yeftleads
CSlides
a Flip Charts
(12):
Summary
Origin~tor a .
1
Department Head Sig
treed
Anticipated Time __ _
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
JULY 10, 1996
Consideration of upcoming meetings and items to be discussed at
those meetings.
The calendar of future meetings is on the back of the Notice of Meeting each month.
The next Finance, Administration and Human Resources Committee meeting is
scheduled for Wednesday, September 11, 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 Annual Review of the Districts' Investment Policy
Consideration of RFP for Classification Studies
Consideration of Commercial Bank Selection
Consideration of Broker-of-record for Property and Personnel Insurances
Consideration of Staff Report on Early Retirement Incentives·
Consideration of Revisions to Purchasing Resolution
Consideration of Staff Report on ABC Inventory System
Consideration of Meet-and-Confer Process and Status
Consideration of Purchase of LAN Server for Communication
Consideration of Revised Personal Responsibility In Daily Effort (PRIDE} Program
Consideration of Policy to Implement Cost Recovery for Information Requests
Consideration of Employee Recognition and Wellness Program
Consideration of Meet-and-Confer Process and Status
Staff Recommendation
Information only item.
J:IWPOOCIFIN\CRANEIFPC.MTGIFAHR,96\COVERS.98\CALEN7.116