HomeMy WebLinkAbout1996-08-07,.
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By
County Sanitation Districts
of Orange County, California
P.O. Box 8127 • 10844 Ellis Avenue
Fountain Valley, CA 92728-8127
Telephone: (714) 962-2411
A~1996 DRAFT
MINUTES OF FINANCE, -~ A:DMINISIRATION AND HUMAN RESOURCES COMMITTEE
Wednesday. August 7. 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 August 7, 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 J. Collins, Joint Chair
Jan Debay
John M. Gullixson
Wally Linn
Thomas Saltarelli
Roger R. Stanton, Vice Chair
William G. Steiner
Peer Swan, Vice Joint Chair
Committee Directors .Absent :
Burnie Dunlap
James Flora
Other Directors Present:
None
Staff Present:
Donald F. Mcintyre, General Manager
Judith A. Wilson, Assistant General Manager
Blake P. Anderson, 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
Nancy J. Wheatley, Director of Technical Services
Michelle Tuchman, Director of Communications
Steve Kozak, Financial Manager
Mike White, Controller
Tom Dawes, Engineering Supervisor
Lenora Crane, Committee Secretary
Others Present:
Terry C. Andrus, General Counsel
Dan Cassidy, Broadbanding
Barry Newton, Broadbanding Consultant
Kevin J. Murphy, City Mgr., Newport Beach
Steve Conklin, Dir. of Engrg., OCWD
Craig Scott, R. Craig Scott & Associates
Nancy Whitehead, R. Craig Scott & Associates
The Chair called for a motion to change the order of the agenda, because two
Committee Members had to leave early to attend another meeting. The Closed Session
items listed on the agenda would be split into two sessions.
Minutes of Finance, A\ ,·n. and Human Resources Commi\-----,·
Page 2
August 7, 1996 I I
It was moved, seconded, and unanimously approved to revise the order of the agenda.
(2) CLOSED SESSION
The Committee convened in closed session at 5:45 p.m. as authorized by
Government Code Sections 54956.9, to discuss and consider the item specified
as Item (8)(b)(1) on the published Agenda. 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. No reportable action was taken re Agenda Item (8)(b)(1 ).
At 6:25 p.m., the Committee reconvened in regular session.
(3) APPOINTMENT OF A CHAIR PRO TEM
No appointment was necessary.
(4) PUBLIC COMMENTS
No comments were made.
(5) REf:>ORTS 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 Chair had no 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.
' I
Minutes of Finance, Admin. and Human Resources Committee
Page 3
August?, 1996
(d) Report of the Director of Finance/Treasurer
The Treasurer's Report was included in the Agenda Package.
(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 Ed Hodges reported that an offer has
been made and accepted by Chris Dahl, who is presently the Director of
Information Services at the Orange County Water District, to become the
Districts' new Manager of Information Technology. Mr. Dahl will join the
Districts later this month.
(g) Report of the Director of Communications
The Director of Communications had no report.
(g) Report of General Counsel
General Counsel had no report.
(6) APPROVAL OF MINUTES
It was moved, seconded and duly carried to approve the draft minutes of the
July 10, 1996, meeting of the Finance, Administration and Human Resources
Committee.
(7) OLD BUSINESS
FAHR96-11 Consideration of motion to receive and file Quarterly
Investment Management Program Report for the period April 1
through June 30, 1996.
Steve Kozak summarized PIMCO's Quarterly Investment Management Program
Report. The investment program is in compliance and is tracking with the
benchmarks. The long-term fund, based on PIMCO's long-term investing
approach, slightly underperformed this quarter. The liquid portfolio performed
very well. Annualizing the returns for both portfolios, the liquid portfolio's
annualized yield is 5.9% and the long-term fund is 6.2%. Annualizing the income
from the investment program, the liquid fund would return an estimated $2.9
million and the long-term fund about $18.6 million.
Minutes of Finance, Admin. and Human Resources Committee
Page 4
August?, 1996
In response to Chair Brown's questions, Mr. Kozak advised that he is receiving
information from PIMCO on a timely basis and is reviewing the information very
carefully. Also, Callan Associates, the Districts' investment advisor, does an
independent review of the raw data they receive from Mellon Trust, the Districts'
custodial bank.
The Chair advised Mr. Kozak that the Board wants to insist that he continue to
review Districts' investments very carefully and not just accept opinions and
recommendations, in order to avoid the same problems the County had.
It was moved, seconded and duly carried to receive and file this report.
FAHR96-40 Labor Negotiations -Information Only.
Mike Peterman, Director of Human Resources, advised that this item will be
discussed under closed session. He introduced Mr. Barry Newton, the selected
Broadband Consultant. Mr. Newton has done similar work for the cities of Tustin
and Newport Beach and some private firms. He is also a broadbanding instructor
at the UCI Extension Program. Mike advised that Mr. Newton will be giving a
brief description of his proposal in closed session.
This was an information-only report and was received and filed.
(8) NEW BUSINESS
FAHR96-46 Consideration of motion to receive and file Treasurer's
Report for the month of June 1996.
Short and Long-Term Operating Monies indicated that total investments amount
to $385, 129,885. All Investment Policy requirements are being followed and met.
It was moved, seconded and duly carried to approve and forward this report to
the Joint Boards.
FAHR96-47 Consideration of motions relative to the Basic Integrated
Reuse Project proposed by OCWD. IRWD and the City of
Newport Beach:
1. Modify the existing Agreement between District 14 and
the other Districts to provide that the 1996-97 flow
excludes up to 3.2 mgd, providing the three-party BIRP
is approved.
Minutes of Finance, Admin. and Human Resources Committee
Page 5
August7, 1996
2. Modify the existing Agreement between all Districts and
OCWD for Green Acres Project CGAPl water to include a
long-term commitment to purchase and to supply
reclaimed water at a mutually agreeable price which
reflects potential OCWD savings and which does not
exceed the costs of operations and maintenance
(currently $89/AF).
3. Maintain the June 30, 1997 equity sale from District 14 to
the other Districts calculated on the basis of excluding
up to 3.2 mgd for approximately four months as an inter-
District payable/receivable of approximately $4.8 million,
and transfer the funds in 1999-2000 in order to eliminate
the negative cash flow impacts on the other Districts
from the accelerated flow reduction.
4. Authorize staff to begin negotiations with parties to the
three-party agreement to allow for disposal of excess
reclaimed water.
Blake Anderson, Assistant General Manager, Operations, introduced Kevin
J. Murphy, City Manager of Newport Beach and Steve Conklin, Director of
Engineering, Orange County Water District, who were in attendance to answer
any questions the Committee may have regarding this item. Blake also advised
that Director Swan would answer any questions regarding the Irvine Ranch
Water District.
Blake gave a slide presentation and an overview of the reclaimed water
programs currently in place. The Orange County Water District, Irvine Ranch
Water District and the City of Newport Beach are the three parties involved in the
proposed reclaimed water project. The water project is called the Basic
Integrated Reuse Project (BIRP) and would provide wide use of reclaimed water
produced by IRWD, especially in winter months when IRWD demands for
reclaimed water are low. Under this proposed MOU agreement, IRWD would
pump up to 8 mgd of treated effluent to OCWD's Green Acre Project (GAP)
pipelines for reclamation purposes and would pay for the intertie to OCWD. The
City of Newport Beach has sponsored and encouraged the development of the
BIRP, and will benefit by the expanded use of reclaimed water within the City and
by satisfying those opposed to the Wetland Water Supply Project (WWSP). The
City will spend about $500,00 for retrofits to OCWD. The CSDOC's agreement
with the OCWD to purchase reclaimed GAP water would also need to be
renegotiated and amended. The amendment to the Districts' agreement would
guarantee reclaimed water supplies and eliminate the need for the Districts to
find an alternate source.
Minutes of Finance, Admin. and Human Resources Committee
Page 6
August?, 1996
Gary Streed reviewed the CORF adjustment required to exclude 3.2 mgd from
the equity calculation and eliminate negative cash flow on the other Districts from
the accelerated flow reduction.
Mr. Murphy of Newport Beach advised that the three parties are attempting to
construct the intertie project so that the intertie GAP flow occurs before
October 1, 1997. The CORF portion related to CS DOC is required to be in place
by October 1, 1996, so that IRWD, which has a permit to discharge into the Bay,
does not need to do so.
Director Jan Debay, as well as Joint Chair Collins, commended staff for setting
such a good example of cooperation between agencies to make reclaimed water
use an important issue.
After discussion on this matter, it was moved, seconded and duly carried to
approve staff's recommendations
Director Peer Swan requested that his abstention from discussion and voting be
made a matter of record.
FAHR96-48 Consideration of Resolution No. 96-, Amending Personnel
and Salary Resolution No. 95-105, to adopt a Districts'
Firearms and Weapons Policy.
Mike Peterman advised that with acts of violence in the workplace becoming
increasingly more prevalent in today's society, staff believe it would be prudent to
adopt a firearms and weapons policy. The proposed policy would prohibit
firearms, explosives, and knives on Districts' premises, in Districts' vehicles, in
private vehicles parked on Districts' property, and in the possession of Districts'
employees while on duty or performing related business assignments.
During discussion on this matter, the Committee felt a more detailed no tolerance
policy should be written. Counsel advised a more detailed policy would need to
be addressed during the meet-and-confer process.
It was moved, seconded and duly carried to approve staff's recommendation with
the understanding that staff negotiate a more detailed no tolerance Firearms and
Weapons Policy during the meet-and-confer process.
Minutes of Finance, Admin. and Human Resources Committee
Page 7
August?, 1996
(9) CLOSED SESSION
The Committee convened in closed session at 7:05 p.m. as authorized by
Government Code Sections 54957.6, to discuss and consider the item specified
as Item (8)(b)(2) on the published Agenda. 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. No reportable action was taken re Agenda Item (8)(b)(2).
At 7:45 p.m., the Committee reconvened in regular session.
(10) OTHER BUSINESS. IF ANY
None.
(11) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A
SUBSEQUENT MEETING
No reports were requested.
(12) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE
AGENDA FOR ACTION AND A STAFF REPORT
None.
(13) CONSIDERATION OF UPCOMING MEETING DATES AND ITEMS TO BE
DISCUSSED AT THOSE MEETINGS
The next Committee meeting is scheduled for Wednesday, September 11, 1996.
(14) ADJOURNMENT
The meeting was adjourned at approximately 7:47 p.m.
~~
Lenora Crane
Finance, Administration and Human
Resources Committee Secretary
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\1996.MIN\MFAHRB.96
ST ATE 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 August 7, 1996, was duly posted for public inspection in the main lobby of the
Districts' offices on July 30, 1996.
Posted:
By:
IN WITNESS WHEREOF, I have hereunto set my hand this 7th day of August, 1996.
Penny Kyle, Secretary, r'e 6. of the Boards of Directors of County
Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 & 14 of Orange
County, California
~I ,1996,~PM
~~ Signature
J:\WPDDC\FINICRANEIFPC.MTGIFAHR.96\CERT.PDS\CERTP08.96
I
August 7, 1996
AGENDA
FINANCE. ADMINISTRATION AND HUMAN RESOURCE$ COMMITTl:E
COUNTY SANITATION DISTRICTS
NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14
OF ORANGE COUNTY, CALIFORNIA
DISTRICTS' ADMINISTRATIVE OFFICES
10844 ELLIS AVENUE
FOUNTAIN VALLEY, CALIFORNIA 92708
REGULAR MEETING
WEDNESDAY, AUGUST 7. 1996 -5:30 P.M.
:--·······-···-······ .. --·-··· .. ·······----···-·····'""·····················-·········· .................... :.-............................................................................... , .................. : . .
! In accordance with the requirements of California Government Code Section 54954.2, this i
l agenda has been posted in the main lobby of the Districts' Administrative Offices not less than 72 l
~ 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. l
In the event any matter not listed on this agenda is proposed to be submitted to the
Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an
emergency item or that there is a need to take immediate action which need came to the attention of
the Committee subsequent to the posting of the agenda, or as set forth on a supplemental agenda
posted in the manner as above, not less than 72 hours prior to the meeting date.
: ..................... --............................................................................... _ ... _.,.,. ............................................. ..._ ........................................... ..._ ........................ ,.. ...................................... ;·
(1) Roll Call
(2) Appointment of Chairman pro tern, if necessary.
(3) Public Comments: All persons wishing to address the Committee on specific
agenda items or matters of general interest should do so at this time. As
determined by the Chairman, speakers may be deferred until the specific item is
taken for discussion and remarks may be limited to five minutes.
Matters of interest addressed by a member of the public and not listed on this
agenda cannot have action taken by the Committee except as authorized by
Section 54954.2(b ).
August?, 1996
(4) The Committee Chairman, General Manager, Assistant General Manager(s),
Director of FinancefTreasurer, 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 FinancefTreasurer
(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 July 10, 1996.
(6') Old Business.
FAHR96-11 Consideration of motion to receive and file Quarterly Investment
Management Program Report for the period April 1 through
June 30, 1996. (Steve Kozak)
FAHR96-40 Labor Negotiations -Information Only
(Mike Peterman)
(7) New Business.
FAHR96-46 Consideration of motion to receive and file Treasurer's Report for
the month of June 1996.
(Gary Streed)
FAHR96-47 Consideration of motions relative to the Basic Integrated Reuse
Project proposed by OCWD, IRWD and the City of Newport
Beach:
1. Modify the existing Agreement between District 14 and the
other Districts to provide that the 1996-97 flow excludes up
to 3.2 mgd, providing the three-party BIRP is approved.
August?, 1996
2. Modify the existing Agreement between all Districts and
OCWD for Green Ac~es Project (GAP) waterito include a
long-term eommitment to purchase and to suppl¥ reclafmed
w.ater at a mutually agreeable price which reflects potentl~I
QCWD savin@s and which dc:>es not exceed the eo~ts of
operations and maintenance (currently $89/mg).
3. Maintain the June 30, 1997 equity sale from District 14 to the
other Districts calculated on the basis of excluding 3.2 mgd
for four months as an inter-District payable/receivable of
approximately $4.8 million, and transfer the funds in
1999-2000 'in erder to eliminate the negative cash flow
impacts on the other Districts from the accelerated flow
reduction.
4. Authorize staff to begin negotiations with parties to the
three-party agreement to allow for disposal of excess
reclaimed water. (Tom Dawes/Gary Streed)
FAHR9648 Consideration of Resolution No. 96-_, Amending Personnel and
Salary Resolution No. 95-105, to adopt a Districts' Firearms and
Weapons Policy. (Mike Peterman)
(8) Closed Session.
~ ••• -.............. ,. .................................................................................................. ,.. ..................................... .l"t.!"'""'"'"·'""'"'" ......................................................................... ~~::;
Clo-sed Session: During the course of conducting the business set forth on this
agenda qs·a.regular meeting of the Committee, the Chair may convene the Committee in
clased session to consider matters of Rending real eState negotiations, pending or·potenti.al
litigation, or personnel matters, pursuant to Government Cocle Se'ctio.ns 54956.8, 54956.9.,
54957 or 54957 .6, as noted.
Reports relating to (a) purchase and sale of real property; (b) matters of pending or
potential litigation; (c) employee actions or negotiations with employee representatives; or
which are exempt from public disclosure under the California Public Records Act, may be
reviewed by the Committee during a permitted closed session and are not available for public
inspection. At such time as final actions are taken by the Committee on any of these subjects,
the minutes will reflect all required disclosures of information. . :
; ;. ....... ..i ......... --•• -• -...... ~-· -............. ~ ... -• -... ·-......... -............. -.................................... ·-·· -................... --• -........... ----.... ·-· ........ -..... -................ -.... :
(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]).
August 7, 1996
(2) Confer with Districts' Negotiator and broadbanding consultant 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.
(13) Adjourn.
Notiee·to Committee Members:
If you have any questions regarding the Agenda, or wish to place items on the Finance,
Administration and Human Resources Agenda, Committee members should contact the
Committee Chair or Secretary ten days in advance of the Committee meeting.
Committee Chair: George Brown (310) 431-2185
Secretary: Lenora Crane (714) 962-2411, Ext. 2501
. (714) 962-3954 (FAX) ~ ...... ···--............................................................................................ ······-· .... -.... -·· .. ·-·--.................................... ·-· ..................... ,. .......................... ------· ..... .
phone:
(7141962-2411
mailing address:
P.O. Box 8 127
Fo1Jnta1n Valley, DA
92726-8127
street addres5:
10844 Ellis Avenue
Fdunc.aln Valley, CA
9270&7018
Mern~er
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Anaheim
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Fountain Valley
Fill/er tan
Hunting/ion Besah
Irvine
Ls Habra
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COUNTY r_)NITATION DISTRICTS OF ORJGE COUNTY, CALIFORNIA
July 31, 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. AUGUST 7, 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 ta Protecting the Environment Since 1954
July 31, 1996
FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
August
September
October
November
December
January
February
March
April
May
June
July
August
TENTATIVELY SCHEDULED
MEETING DATES
Finance, Administration
and Human Resources
Committee Meetings Joint Board Meetings
August?, 1996 August28, 1996
September 11, 1996 September 25, 1996
October 9, 1996 October 23, 1996
None Scheduled November 20, 1996
None Scheduled December 18, 1996
January 8, 1997 January 22, 1997
February 12, 1997 February 26, 1997
March 12, 1997 March 26, 1997
April 9, 1997 April 23, 1997
May 14, 1997 May 28, 1997
June 11, 1997 June 25, 1997
July 9, 1997 July 23, 1997
None Scheduled August27, 1997
CSDOC • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411
ROLL CALL SHEET
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
MEETING DATE: AUGUST 7. 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 J. COLLINS (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 ........................ .
TOM DAWES, Engineering Supervisor ............ .
GREG MATHEWS, Principal Administrative Analyst .. .
LINDA EISMAN, Training Manager ............... .
LENORA CRANE, Committee Secretary. . ......... .
-----------............... .
OTHERS
TOM WOODRUFF. General Counsel ............. .
KEVIN J. MURPHY. City Manager. Newport Beach .. .
STEVE CONKLIN, Dir. of Engrg .. OCWD
c: Penny Kyle
L. Crane
TIME: 5:30 P .M.
ADJOURN: P.M.
I '
f
Format
o Written Report
o Overheads
o Slides
o Flip Charts
Originator __ _
Gfni'li-d I
Department Head Sign ~~ '\
GafyStreed
Anticipated Time 5 min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
AUGUST 7, 1996
{4)(e): Director of Finance Report
Summary
Since June 1995, the daily rate COP program remarketing agents have been
PaineWebber for the Series "A" and the 1993 Refunding COPs, and J.P. Morgan for the
Series "C" COPs. Most fixed rate Series "B" COPs have been refunded and the 1992
Refunding COPs have always been remarketed by PaineWebber in a weekly mode.
The attached graphs show the variable interest rates on each of the daily rate COPs
since the last report, and the effective fixed rate for the two refunding issues which are
covered by an interest rate exchange agreement commonly called a "swap."
Variable rates historically rise at the end of each calendar quarter, and especially at
year-end, because of business taxes and statements. The rates decline to prior levels
immediately in the following month, as they did again this year.
Staff will maintain our continuous rate monitoring and ongoing dialog with the
remarketing agents and rating agencies to keep the Committee fully informed about
developments in the program as they occur and at each meeting.
Staff Recommendation
Information only.
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FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
AUGUST 7, 1996
( 5): Consideration of motion to approve the draft Finance,
Administration and Human Resources Committee Meeting
Minutes of July 10, 1996.
Summary
Attached is a draft of the Finance, Administration and Human Resources Committee
meeting Minutes of July 10, 1996, for approval by the Committee.
Staff Recommendation
It is recommended that the minutes of the July 10, 1996, Finance, Administration and
Human Resources Committee meeting be approved. These minutes were submitted to
the Joint Boards at their July 24, 1996 meeting, and no further action is required.
J:IWPDOCIFINICRAN~PC.MTG\FAHR.96\1996.MINICVRMIN7.96
DRAFT
County Sanitation Districts
of Orange County, California
P.O. Box 8127 • 10844 Ellis Avenue
Fountain Valley, CA 92728-8127
Telephone: (714) 962-2411
MINUTES OF FINANCE,
ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
Wednesday. July 10. 1996. 5:30 P.M.
A meeting of the Finance, Administration and Human Resources Committee of the
County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County,
California was held on July 10, 1996 at 5:30 p.m., at the Districts' Administrative Offices.
(1) ROLL CALL
The roll was called and a quorum declared present, as follows:
Committee Directors Present:
George Brown, Chair
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.
(4) REPORTS OF THE COMMITTEE CHAIR. GENERAL MANAGER. ASSISTANT
Minutes of Finance, Adi . ,'. and Human Resources Committt.
Page 2
July 10, 1996
(4) REPORTS OF THE COMMITIEE CHAIR. GENERAL MANAGER. ASSISTANT
GENERAL MANAGER($), DIRECTOR OF FINANCE/TREASURER. DIRECTOR
OF HUMAN RESOURCES. DIRECTOR OF GENERAL SERVICES
ADMINISTRATION. DIRECTOR OF COMMUNICATIONS AND GENERAL
COUNSEL
(a) Report of the Committee Chair
The 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 Setvices 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 Director 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
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.
(7) 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 JO! acres of
land located at Plant 2 for a period of up to 10 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 Consideration of motion authorizing the Human Resources
Department to issue a Request for Proposal (RFPl for
professional consultant se1Vices 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. 96-68
amending 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. 96-68, 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
Page6
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 B(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
I
Fonnat
o Written Report
a Overheads
CJ Slides
o Flip Charts
Originato~
Department Head Sign Off~ . (
GarjStreed
Anticipated Time 5 mins.
FINANCE, ADMINISTRATION AND HUMAN
RESOU.RCES COMMITTEE
AGENDA FOR
AUGUST 7, 1996
F AH R96-11 : Consideration of motion to receive and file Quarterly
Investment Management Program Report for the period
April 1 through June 30, 1996
Summary
On September 7, 1995, the Districts' Treasury Bill investments matured and funds were
wired to PIMCO, the Districts' newly contracted external money manager. The funds
were invested to maximize safety, liquidity, diversification, flexibility, and yield.
This item transmits the quarterly investment management report for April through
June 1996.
Staff Recommendation
Receive and file this information-only report.
J:IWPDOCIFINICRANE\FPC.MTGIFAHR.96\COVERS.96\FAHR96.11 C
August 7, 1996
STAFF REPORT
FAHR96-11: Consideration of motion to receive and file Quarterly Investment
Management Program Report for the period April 1 through
June 30, 1996
Background
The Districts' Investment Policy, adopted by the Joint Boards on May 24, 1995, includes
monthly and quarterly reporting requirements in Section 14.0 for the Districts' two investment
portfolios. These two funds, the "Liquid Operating Monies," and the "Long-Term Operating
Monies," are managed by PIMCO, the Districts' external money manager.
The ongoing monitoring of the Districts' investment program by staff and Callan Associates, the
Districts' independent investment advisor, indicates that the Districts' investments are in
compliance with the Districts' adopted Investment Policy and the California Government Code,
and overall performance has tracked with benchmark indices. In addition, sufficient funds are
available for the Districts to meet its operating expenditure requirements for the next six months.
Quarterly performance reports prepared by PIMCO and Callan Associates are attached for your
reference.
Portfolio Performance Summary
The following table presents a summary of the performance of both of the Districts' portfolios for
the period April 1 through June 30, 1996.
'"""" . T.ofut Rateibi Retuhi ---.\ . --. -
1 month
3 months
6 months
Since inception
30 Sept 95
·-·-· ·>:·:-:-·--
Portfolio Performance Summary
Second Quarter 1996
Liquid Operating Monies(%)
.. :;.:; ..
.·. ·,·,
0.5
1.3
2.7
4.2
Long-Term Operating Monies(%)
1.0
0.6
0.4
3.6
:;-';f):;t-_., .. ,.·_ " :v.::·:
,Benchmark
3 Month
6 Month
9 Month
Market Value per PIMCO
30 June 96
Estimated Current Yield
30 June 96
I Quarterly Contributions
I Estimated Annual Income
-·-----:-:-:·
1.3 0.8
2.6 0.7
4.0 3.7
$52,612,904 $281,775,947
5.9% 6.2%
-0-$17.0M
$2.9M $18.6M
CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411
..
...
FAHR96-11
Page 8
August 7, 1996
Market Recap
The focus of the market in the second quarter was on speculation regarding the potential for the
Federal Reserve to tighten interest rates. As a result of these investors' fears, together with
higher than expected economic growth, interest rates were driven up. The surge in economic
growth sent yields on all but the shortest maturity Treasury issues up 20 to 40 basis points, with
intermediate rates experiencing the greatest increase.
The keystone of PIMCO's fixed-income strategy is their long-term approach to investing.
PIMCO continued to maintain a slightly above-index duration1 target for the Long-Term
Operating Monies portfolio (2.5 years vs. 2.4 years for the Merrill Lynch 1-5 Year
Corporate/Government Bond Index), which reflects their bullish forecast for a downward trend in
interest rates over the long run. While the above-index duration detracted from performance in
March, the strategy enhanced portfolio returns in the month of June. Overall, this portfolio
slightly underperformed the benchmark for the quarter (3.6% vs. 3.7%).
PIMCO continued to maintain a below-index duration target for the Liquid Operating Monies
portfolio (34 days vs. 90 days for Three-Month Treasuries). With investments in agency
discount notes, high-quality commercial paper, and short-term corporate notes, the portfolio
slightly outperformed the benchmark for the quarter (4.2% vs. 4.0%).
Comparative marked-to-market ending values of the portfolios are shown in the following table:
Long-Term
Quarter Ending Li~id Operating onies ($M) Operatin~ Monies
($ )
30 Sept. 95 60.2 234.2
31Dec.95 61.1 263.6
31Mar.96 51.9 262.9
30 Jun. 96 52.6 281.B
Annual Review of Investment Policy
The first annual review of the Districts' Investment Policy is scheduled for the September 1996
FAHR Committee Meeting pursuant to Section 15 of the Investment Policy and the California
Government Code.
Recommendation
Receive and file this information-only report.
SK: le
J:\WPDOCIFIN\CRANE\FPC.MTGIFAHR.96\STAFFRPT.96\SRFAHR96.11C
1 Duration is a measure of the timing of the cash flows to be received from a portfolio of fixed Income securities. It is a
useful indicator of the market risk or price sensitivity of a portfolio for given changes in interest rates.
County Sanitation Districts
·of Orange 'County
STRATEGY REVIEW FOR THE PERIOD
APRIL 1 -JUNE 30, 1996
FINANCE, ADMINISTRATION ,& HUMAN RES.OURCES COMMITTEE
AUGUST 7, 1996
Post Office Box 6430
84_0 Ne\:Vport Center Drive
Newport Beach
California 92658-6430
714 . 640-3031
'I
AGENDA
BOND MARKET REVIEW
)
II PERFORMANCE I PORTFOLIO REVIEW
Ill CURRENT OUTLOOK I STRATEGY
_)
PACIFIC INVESTMENT MANAGEMENT COMPANY
RATES INCREASED ON SIGNS OF GROWTH
YIELDS CONTINUED TO INCREASE
DURING THE SECOND QUARTER
• Surging economic growth led
to expectations of Fed
tightening
HIGHER YIELDS REDUCE
BOND PRICES
7
June 30, 19~9~6-------------:r------=
5
Maturity 0
Duration 0
Cl. 100 -
8
OJ 00 c::: ctl ..c u 50
5
4.2
54
10
7.0
96
Mar 31, 1996 I
-----------------------------
Dec31, 1995
114
30
12.5
OL__-'="""""'-----'---""=L---'-....,,.....__.._
3 Mos. 2 Yrs. 3 Yrs. 5 Yrs. 1 O Yrs. 30 Yrs.
I D 2ND QTR. ~ 6 MOS.1
SOURCE: Bloomberg
PACIFIC INVESTMENT MANAGEMENT COMPANY
STRATEGY RECAP -
PERFORMANCE RELATIVE TO INDEX
Long-Term Operating Fund -Second Quarter 1996
DURATION 1J»
MATURITY MIX 1J»
SECTOR I ISSUE 1J»
ABOVE MARKET
SIMILAR TO INDEX
GREATER POSITION IN AGENCY
BONDS IN PORTFOLIO THAN
IN INDEX
SHORTER MATURITY CORPORATE
EXPOSURE IN PORTFOLIO THAN
IN INDEX
2
DETRACTED FROM PERFORMANCE
NO IMPACT ON PERFORMANCE
POSITIVE IMPACT ON PERFORMANCE
• Agency returns better than
Treasury returns
• Intermediate maturity
corporates underperformed
Treasury returns
PACIFIC INVESTMENT MANAGEMENT COMPANY
REVIEW OF PERFORMANCE
Through June 30, 1996
Long-Term Operating Fund
Since
6/30/96 Inception
Market Value 9/30/95 6 Mos . 3 Mos.
$281,775,947 Sanitation Districts of _)
Orange County (l-T) (%) 3.6 0.4 0.6
Merrill 1 -5 Year
Gov't. I Corp. Index (%) 3.7 0.7 0.8
Liquid Operating Fund
Since
6/30/96 Inception
Market Value 9/30/95 6 Mos. 3 Mos.
$52,612,904 Sanitation Districts of
Orange County (Liq-op) (%) 4.2 2.7 1.3
3 Month T-Bill (%) 4.0 2.6 1.3
3
PACIFIC INVESTMENT MANAGEMENT COMPANY
CURRENT OUTLOOK AND STRATEGY
MODERATE GDP GROWTH
• Recent surge unsustainable
COMPETITION CONTROLS INFLATION
• To remain below 3%
BOND MARKET OFFERS VALUE
• Market expectations too pessimistic
• High real rates
ABOVE BENCHMARK DURATION TO
CAPTURE PRICE GAINS AS RATES FALL
MATURITY MIX CONSISTENT WITH INDEX
SECTOR CONCENTRATION:
• Focus on agencies
• Underweight Treasuries
• Hold short-term corporates
4
)
PACIFIC INVESTMENT MANAGEMENT COMPANY
1
l
l
l
1
_J
_J
_l
J
J
CALLAN AS SOCIA TES INVESTMENT MEASUREMENT REVIEW
County Sanitation Districts of Orange County
June 30, 1996
The following statistical analysis was prepared by Callan Associates Inc. utilizing secondary data from
statements provided by the plan trustee and/or custodian, CAI computer software and selected
information in CAI' s database. This report may also contain returns and valuations from outside
sow·ces as directed by the client. CAI assumes no responsibility for the accuracy of these valuations or
return methodologies. Reasonable care has been taken to assure the accuracy of the CAI computer
software and database. CAI disclaims responsibility, financial or otherwise for the accuracy or
completeness of this report. Copyright 1996 by Callan Associates Inc.
1
1
l
·1
l
CAILAN ASSOCIATES INVESTMENT MEASUREMENT REVIEW
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
JUNE 30, 1996
Market Performance
Measures of Market Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Fund Performance
Performance to Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Performance vs. Active Cash Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Performance vs. Defensive Fixed-Income Style .................................. 5
Fund Profile
Portfolio Characteristics Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Portfolio Characteristics Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Definitions
Market Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Fixed-Income Management Style Groups ....................................... 9
Fixed-Income Portfolio Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1
l
J
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
MEASURES OF MARKET PERFORMANCE
JUNE 30, 1996
U.S. stocks rang up another good gain in the second quarter of 1996, with indexes hitting
record highs in both April and May before settling back a bit in June. Bonds, however,
managed only slightly positive returns as interest income was almost entirely offset by
lower prices. Signs that the economy was gaining strength led by vigorous job growth and
low unemployment, helped push stocks higher, but accompanying concerns that rising
inflation and a tighter monetary policy from the Federal Reserve would soon follow kept
bonds under pressure. Forecasters expect annualized GDP growth of 4.0% for the quarter,
compared to the previous quarter's 2.2%.
Domestic stocks performed well again last quarter, though returns were below those of the
preceding five quarters. The return on the S&P 500 stock Index was 4.53%. Of the stocks
in the Index, those with positive returns surpassed those with negative returns by about 3 to
2. Leading performers among the ten stock sectors were consumer staples and technology,
with returns of 7 .55% and 7 .08%, respectively. The weakest sector, and the only one with a
negative return, was raw and intermediate materials at -5.83%. For the first half of 1996,
the S&P 500 Index returned 10.24%.
Among other stock indices, the Dow Jones Industrial Average returned 1.75% and 11.70%
for the quarter and six months, respectively. The S&P "Mid Cap" 400 Stock Index returned
2.82% and 9.25% and the NASDAQ Index returned 7.67% and 12.81 %. Results for the
Callan Indices indicated the best average gains among the largest and smallest stocks. The
Callan Broad 2000 returned 4.27% and 10.19%, while the Callan Micro 1000 returned
10.05% and 17.83%. Within the Broad 2000, the Large 150 returned 5.26% and 11.02%,
while the Medium 350 returned 2.57% and 8.74%, and the Small 1500 returned 3.75% and
9.72%.
The Morgan Stanley Capital International EAFE Index, which is composed of
representative stock issues from Europe, Australia, and the Far East, returned 3.19% and
8.74% for the quarter and six months on a local currency basis. Returns adjusted for
conversion to U.S. dollars were 1.58% and 4.51 %. This included dollar-based returns of
2.62% and 6.43% for the European component of the Index and returns of 0.56% and
2.64% for the Pacific Rim component. The Salomon Non-U.S. Government Bond Index
earned 2.58% and 3.55% in U.S. dollars hedged against currency fluctuations. On an
unbedged basis, the dollar's 1996 gains hurt results. Returns were 0.40% and -1.28%.
Domestic bond returns were narrowly positive, reflecting somewhat higher interest rates.
Rates rose 37 basis points on 30-year Treasuries and 27 basis points on Moody's seasoned
AAA corporates. Rates on 5-year Treasuries went up 55 basis points. The Lehman
Brothers Government/Corporate Bond Index returned 0.47% for the quarter and -1.88% for
the six months. Results for the long component were 0.07% and -5.99%, while the
intermediate component returned 0.63% and -0.21 %. The Salomon High Yield Bond Index
returned 1.37% and 2.93%.
Treasury Bills earned 1.29% for the quarter and 2.57% for the six months. The Consumer
Price Index for Urban Wage Earners and Clerical Workers rose at an annual rate of 3.16%
during the quarter, down from the previous quarter's 5.43%.
Standard & Poor's 500 Stock Index
Sectors
Last Quarter (3/96-6/96) Last Six Months (12/95-6/96)
Consumer Sta pies 7.55% Industrial Equipment & Services 14.22%
Technology 7.08 Consumer Cyclical 12.39
Industrial Equipment & Services 5.78 Technology 12.23
Public Utilities 5.03 Consumer Staples 11.79
Energy 4.95 Energy 10.59
Consumer Cyclical 3.90 Financial 10.28
Miscellaneous 1.71 Transportation 8.17
Financial 1.53 Raw & Intermediate Materials 7.14
Transportation 1.22 Miscellaneous 7.05
Raw & Intermediate Materials -5.83 Public Utilities 0.11
S&P 500 4.53% S&P 500 10.25%
Industry
Best
Last Quarter (3/96-6/96) Last Six Months (12/95-6/96)
Manufactured Housing 26.03% Retail Stores (Apparel) 46.79%
Shoes 24.74 Shoes 41.86
Retail Stores (Apparel) 18.28 Oil & Gas Drilling 39.38
Tobacco 17.84 Hotel -Motel 38.98
Beverages (Soft Drinks) 16.76 Beverages (Soft Drinks) 31.19
Oil (Exploration & Production) 15.99 Electronics (Defense) 29.82
Electronics (Semicons & Cmpnts) 15.68 Computer Software & Services 27.35
Communications (Equipment) 15.38 Personal Loans 27.00
Cosmetics 15.34 Communications (Equipment) 23.64
Oil & Gas Drilling 12.72 Manufactured Housing 21.80
Worst
J
Last Quarter (3/96-6/96) Last Six Months (12/95-6/96)
Broadcast Media -5.78% Savings & Loan 0.33%
Chemicals (Specialty) -5.89 Telephone -2.50
J
Health Care (Miscellaneous) -5.90 Home Furnishings & Appliances -2.83
Containers (Metal & Glass) -7.26 Health Care (Miscellaneous) -3.72
Aluminum -7.54 Machine Tools -5.02
Health Care (HMO's) -7.56 Steel -9.92
Machine Tools -10.52 Broadcast Media -10.22
Steel -11.94 Health Care (HMO's) -11.97
Gold Mining -13.22 Homebuilding -12.26
Truckers -16.30 Truckers -15.86
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
PERFORMANCE TO DATE
Periods Ended Last
June 30, 1996 Quarter
Liquid Operating Monies 1.37%
Long Term Operating Fund 0.80
Total Fund 0.90
Market Indicators
Government/Corporate 1-5 Year Index 0.86%
1-3yr Govt/Corp Index 1.03
Merrill Lynch 1-Syr Govt/Corp 0.82
Lehman Brothers G/C Int 0.63
Treasury Bills 1.29
Median Rates of Return
Active Cash Management Database 1.31%
Defensive Fixed-Income Style 1.01
Ranlring (l=Best,lOO=Worst)
vs. Active Cash Management Database
Liquid Operating Monies 19
vs. Defensive Fixed-Income Style
Long Term Operating Fund 86
Last
112
Year
2.78%
0.59
0.98
0.78%
1.41
0.73
(0.21)
2.57
2.61%
1.38
16
91
For explanation of market indicators and comparable funds see end of report.
Last
3/4
Year
4.31%
3.81
3.86
3.72%
3.97
3.73
3.31
3.93
4.25%
3.94
37
69
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
PERFORMANCE VS. ACTIVE CASH MANAGEMENT DATABASE
PERIODS ENDED JUNE 30, 1996
5.5% -
5.0% -
4.5% -
4.0% -T~
3.5% -
3.0% -
• A
2.5% -T.:Jill
2.0% -
1.5% -~· T~
1.0% -
Last
Last 1(2
Quarter Year
ACTIVE CASH T T .MANAGEMENJ' DATABASE
10th Percentile 1.46 2.8.8
25th Percentile 1.35 2.72
Median 1.31 2.61
75th Percentile 1.26 2.42
90th Percentile 1.14 2.13
Treasury Bills 1.29 2.57
Liquid Operating Monies A 1.37 2.78
Ranking 19 16
(l=Best.lOO=Worst)
-----. A
Last
3/4
Year
T
5.09
4.34
4.25
4.17
4.01
3.93
4.31
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
PERFORMANCE VS. DEFENSIVE FIXED-INCOME STYLE
PERIODS ENDED JUNE 30, 1996
4.5% -
4.0% -
3.5% -
3.0% -
2.5% -
2.0% -
1.5% -
1.0% -~+::::)
-+ •A MI:~
Vil G/C • A 0.5% -Int
0.0% -
~ Int
-0.5% -
Last
Last 1/2
Quarter Year
DEFENSIVE T T FIXED-INCOME STYLE
10th Percentile 1.26 2.03
25th Percentile 1.13 1.65
Median 1.01 1.38
75th Percentile 0.98 1.22
90th Percentile 0.75 0.71
Merrill Lynch 1-Syr Govt/Corp 0.82 0.73
Lehman Brothers G/C Int 0.63 (0.21)
Long Term Operating Fund A 0.80 0.59
Ranking 86 91
(l=Best.lOO=Worst)
~~t:::::.t
~
Last
3/4
Year
T
4.38
4.22
3.94
3.77
3.66
3.73
3.31
3.81
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
LONG TERM OPERATING FUND
PORTFOLIO CHARACTERISTICS SUMMARY
JUNE 30, 1996
Sector Allocation
Treasuries 33%
Corporates
12%
Long Term Operating Fund
Duration Distribution
60%
51.6%
50%
40%
30% 23.6%
20% ------------_IJ! ... 4'.i'll ----13:0'%"
10%
1.4%
0%
<1.0 1.0-1.5 1.5-2.0 2.0-2.5 2.5-3.0
Years Duration
Quality Distribution
Other
1%
Agencies
9%
Treasuries 77%
Corporates
f3%
Lehman Govt/Corp 1-5 Years
Weighted Average Duration
0 Long Term Operating Fund: 2.74
0 Lehman Govt/Corp 1-5 Years: 2.33
21.8%
12.7% 13.6%12.8%
3.0-3.5 3.5-4.0 4.0+
Weighted Average Quality
100%r-~~-,-~~~-,-~~~.-~~----,,---~~-,-~~-1 0 Long Term Operating Fund: Aal
0 Lehman Govt/Corp 1-5 Years: Aaa
79.0% ---~ -------
40.5% -----
7.9%
I
Aaa
------------------------------------
0.0%
Aal
0.9% 1.8% 1.5% 3.2% 4.0% 2.9% ~ 1.8% 0.4% 2.7%
Aa2 Aa3
Moody's Rating
Al A2 A3 <A3
* All Statistics shown on the page are dependent on the securities in the portfolio being recognized (by their Cusip)
and priced. In this case 97% of the securities in the portfolio (by market value) were recognized and priced.
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
LONG TERM OPERATING FUND
PORTFOLIO CHARACfERISTICS DETAIL
JUNE 30, 1996
Weighted Average Portfolio Characteristics
Total Fund, By Asset Class and By Sector
F.nding Pen:ent
Maiket of Effective Effective OA OA
Sector Vaine Portfolio CouPon Manuitv Yield Duration Convexity Quality
Total Fund $270,835,436 100.0% 6.76 3.52 6.(i() 2.74 (0.17) Aaa
Agencies $132,850,836 49.1% 6.47 4.25 6.88 3.05 (0.44) Aaa
Corporates $31,723,359 11.7% 8.18 2.50 6.59 2.14 0.07 A2
Treasuries $89,813,965 33.2% 6.93 3.40 6.37 2.95 0.11 Aaa+
Total Fixed-Income $254,388,l(j() 93.9% 6.84 3.74 6.67 2.90 (0.18) Aaa
Cash Equivalents $16,447 ;J:l6 6.1% 5.52 0.25 5.52 0.25 0.00 Aaa
5 Largest Holdings
F.nding Pen:ent
Market of Effi:dive OA OA
Issuer Name Issue Name Sector Vabre Portfolio Yield Dora ti on Ccovexitv Quality
United States Treas Nts Nt 7.125% 9/30/1999 Treasuries $78,503,378 29.0% 6.36 2.82 0.10 Aaa+
Federal Home Ui Bks Deb 6.49% 9/13/2000 Agencies $39,931,848 14.7% 6.91 3.01 (0.34) Aaa+
Federal Natl Mtg Assn Deb 6.850% 5/26/00 Agencies $25,162,493 9.3% 6.88 2.67 (1.15) Aaa
Feder3.l Home Ui Mtg Corp Deb 6.720%10/02/00 Agencies $25,251,584 9.3% 7.02 2.84 (0.14) Aaa
Federal Natl Mtg Assn Deb 6.375%10/13/00 Agencies $20,001,250 7.4% 6.80 3.18 (0.13) Aaa
5 Lowest Rated Holdings (Moody's Rating)
F.nding Pen:eot
Market of Effective OA OA
Issuer Name Issue Name Sector Value Portfolio Yield Dutatioo Ccovexitv Oualitv
Lehman Bros Inc Nt 7.00% 5/15/1997 Corporates $1,014,284 0.4% 6.22 0.82 0.01 Baal
Gen Mtrs Accep Corp #00231 Mtn 8.625% 1/10/2000 Corporates $3,240,488 1.2% 6.86 2.96 0.11 A3
Gen Mtrs Accep Tr #324 Mtn 8.375% 2/03/1999 Corporates $3,934,829 1.5% 6.68 2.26 0.07 A3
Chrysler Finl Mtn 6.26% 7 /20/1998 Corporates $1,015,152 0.4% 6.62 1.85 0.04 A3
Chrysler Finl Mtn 7.27% 4/13/1998 Corporates $3,008,333 1.1% 6.52 1.61 0.03 A3
5 Longest Duration Holdings
F.nding Pen:ent
Market of Effecsive OA OA
Issuer Name Issue Name Sector Value Portfolio Y-reld Duration Ccovexi!l'. Quality
FnmaMtn 5.640 2/20/2001 Agencies $9,783,334 3.6% 6.74 3.74 (0.06) Aaa
United States Treas Nts Nt5.75% 10/31/2000 Treasuries $12,788,718 4.7% 6.44 3.73 0.17 Aaa+
Federal Home Ui Mtg Corp Deb 5.990% 3/06/01 Agencies $14,841,671 5.5% 6.75 3.55 (0.62) Aaa
Federal Natl Mtg Assn Deb 6.375%10/13/00 Agencies $20,001,250 7.4% 6.80 3.18 (0.13) Aaa
Federal Home Ui Bks Deb 6.49% 9/13/2000 Agencies $39,931,848 14.7% 6.91 3.01 (0.34) Aaa+
5 Holdings with Highest Effect Yield
F.nding Pen:eot
Market of Effective OA OA
Issuer Name Issue Name Sector Value Portfolio Yield Dutation Ccovexi!X Quality
Federal Home Ui Mtg Corp Deb 6.720%10/02/00 Agencies $25,251,584 9.3% 7.02 2.84 (0.14) Aaa
Federal Home Ui Bks Deb 6.49% 9/13/2000 Agencies $39,931,848 14.7% 6.91 3.01 (0.34) Aaa+
Federal Natl Mtg Assn Deb 6.850% 5/26/00 Agencies $25,162,493 9.3% 6.88 2.67 (l.15) Aaa
Gen Mtrs Accep Corp #00231 Mtn 8.625 % 1/10/2000 Corporates $3,240,488 1.2% 6.86 2.96 0.11 A3
Philip Morris Cos Inc Nt 9.250% 02/15/2000 Corporates $9,964,120 3.7% 6.81 2.97 0.11 A2
*All Statistics shown on the page are dependent on the securities in the portfolio being recognized (by their Cusip)
and priced. In this case 97% of the securities in the portfolio (by market value) were recognized and priced.
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FIXED-INCOME MARKET INDICATORS
The market indicators included in this report are regarded as measures of equity or fixed-income
performance results. The returns shown reflect both income and capital appreciation.
90-Day U.S. Treasury Bills provide a measure of riskless return. The rate of return is the
average interest rate available on the beginning of each month for a Treasury Bill maturing in
ninety days.
Lehman Brothers Govt/Corp Intermediate Index is one of the components of the
Government/Corporate Index which includes only bonds with maturities between one to ten
years.
Merrill Lynch 1-5 Year Government/Corporate represents bonds with maturities between one
and five years that are issued by the U.S. Treasury and U.S. Agencies, and by Corporations with
investment grade credit ratings. As of year end 1995, the index covered 2,785 issues.
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FIXED-INCOME MANAGEMENT STYLE GROUPS
Active Cash -Managers whose objective is to achieve a maximum return on short-term
financial instruments through active management. The average portfolio maturity is typically
less than one year. ·
Active Duration -Managers who aggressively employ interest rate anticipation in setting
portfolio duration. Portfolios are actively managed so that large changes in duration are made
in anticipation of interest rate changes in hopes of profiting from downward rate movements
and minimizing losses from upward rate movements.
Core Bond -Managers who construct portfolios to approximate the investment results of the
Lehman Brothers Government/Corporate Bond Index or the Lehman Brothers Aggregate Bond
Index with a modest amount of variability in duration around the index. The objective is to
achieve value added from sector and/or issue selection.
Defensive -Managers whose objective is to minimize interest rate risk by investing
predominantly in short to intermediate term securities. The average portfolio duration is similar
to the duration of the Merrill Lynch 1-3 Year Bond Index.
Extended Maturity -Managers whose average portfolio duration is greater than that of the
Lehman Brothers Government/Corporate Bond Index. These portfolios exhibit risk/return
characteristics similar to the long-bond portion of the Lehman Brothers Government/Corporate
Index, called the Lehman Brothers Government/Corporate Long Bond Index. Variations in
bond portfolio characteristics are made to enhance performance results. This results in an
aggressive risk/return profile that embraces interest rate risk in search of both high yields as
well as capital gains.
High Yield -Managers whose investment objective is to obtain high current income by
investing primarily in non-investment grade fixed-income securities. Due to the increased level
of default risk, security selection focuses on credit-risk analysis.
Intermediate -Managers whose objective is to lower interest rate risk while retaining reasonable
yield levels by investing primarily in intermediate term securities. The average portfolio
duration is similar to that of the duration of the Lehman Brothers Intermediate
Government/Corporate Bond Index.
Money Market -Open-end mutual funds that invest in low-risk, highly liquid, short-term
financial instruments and whose net asset value is kept stable at $1 per share. The average
portfolio maturity is 30 to 60 days.
Mortgage -Managers who invest primarily in mortgage-backed securities including agency
(FHLMC, GNMA, FNMA) and private issue pass-throughs, asset-backed securities, and
mortgage derivatives (REMICS/CMOs, IOs, POs). Funds may also contain a small percentage
of U.S. Treasuries.
STIF -Bank investment funds in low-risk, highly liquid, short-term financial instruments. The
average portfolio maturity is 30 to 60 days.
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FIXED-INCOME PORTFOLIO CHARACTERISTICS
All Portfolio Characteristics are derived by first calculating the characteristics for each security,
and then calculating the market value weighted average of these values for the portfolio.
Allocation by Sector -Sector allocation is one of the tools which managers often use to add
value without impacting the duration of the portfolio. The sector weights exhibit can be used to
contrast a portfolio's weights with those of the index to identify any significant sector bets.
Average Coupon -The average coupon is the market value weighted average coupon of all
securities in the portfolio. The total portfolio coupon payments per year are divided by the total
portfolio par value.
Average Moody's Rating for Total Portfolio -A measure of the credit quality as determined by
the individual ecurity ratings. The ratings for each security from Moody's Investor Service
are compiled into a composite rating for the whole portfolio. Quality symbols range from Aaa+
(highest investment quality -lowest credit risk) to C (lowest investment quality -highest credit
risk).
Average Option Adjusted (Effective) Convexity-Convexity is a measure of the portfolio's
exposure to interest rate risk. It is a measure of how much the duration of the portfolio will
change given a change in interest rates. Generally, securities with negative convexities are
considered to be risky in that changes in interest rates will result in disadvantageous changes in
duration. When a security's duration changes it indicates that the stream of expected future
cash-flows has changed, generally having a significant impact on the value of the security. The
option adjusted convexity for each security in the portfolio is calculated using models developed
by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows
for the security based on various interest rate scenarios. Expected cash-flows take into account
any .put or call options embedded in the security, any expected sinking-fund paydowns or any
expected mortgage principal prepayments.
Average Option Adjusted (Effective) Duration -Duration is one measure of the portfolio's
exposure to interest rate risk. Generally, the higher a portfolio's duration, the more that its
value will change in response to interest rate changes. The option adjusted duration for each
security in the portfolio is calculated using models developed by Lehman Brothers and Salomon
Brothers which determine the expected stream of cash-flows for the security based on various
interest rate scenarios. Expected cash-flows take into account any put or call options embedded
in the security, any expected sinking-fund paydowns or any expected mortgage principal
prepayments.
Average Price -The average price is equal to the portfolio market value divided by the number
of securities in the portfolio. Portfolios with an average price above par will tend to generate
more current income than those with an average price below par.
Average Years to Expected Maturity -This is a measure of the market-value-weighted-average
of the years to expected maturity across all of the securities in the portfolio. Expected years to
maturity takes into account any put or call options embedded in the security, any expected
sinking-fund paydowns or any expected mortgage principal prepayments.
1
FIXED-INCOME PORTFOLIO CHARACTERISTICS
Average Years to Stated Maturity-The average years to stated maturity is the market value
weighted average time to stated maturity for all securities in the portfolio. This measure does
not take into account imbedded options, sinking fund paydowns, or prepayments.
Current Yield -The current yield is the current annual income generated by the total portfolio
market value. It is equal to the total portfolio coupon payments per year divided by the current
total portfolio market value.
Effective Yield -The effective yield is the actual total annualized return that would be realized
if all ecurities in the portfolio were held to their expected maturities. Effective yield is
calculated as the internal rate of return, using the current market value and all expected future
interest and principal cash flows. This measure incorporates sinking fund paydowns, expected
mortgage principal prepayments, and the exercise of any "in-the-money" imbedded put or call
options.
Weighted Average Life -The weighted average life of a security is the weighted average time to
payment of all remaining principal. It is calculated by multiplying each expected future
principal payment amount by the time left to the payment. This amount is then divided by the
total amount of principal remaining. Weighted average life is commonly used as a measure of
the investment life for pass-through security types for comparison to non-pass-through
securities.
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CALLAN ASSOCIATES APPENDIX REPORT
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
JUNE 30, 1996
Fund Assets and Growth Detail
Liquid Operating Monies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Long Term Operating Account ............................................... 5
Total Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
LIQUID OPERATING MONIES
ASSET ALLOCATION ($000)
Quarter Eguities Fixed-Income
Ended: Amount Percent Amount Percent
09195 0 0.0% 4661 7.7%
12/95 0 0.0% 4723 7.7%
03/96 0 0.0% 51949 100.0%
06/96 0 0.0% 52659 100.0%
Cash & Eguiv. Total
Amount Percent Amount
55498 92.3% 60159
56393 92.3% 61116
0 0.0% 51949
0 0.0% 52659
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
LIQUID OPERATING MONIES
ASSET FLOWS ($000)
Net New Investment
Qu~r Fixed-Cash&
Ended: Equities Income :Equiv.
09195
12/95 0 (90) 90
Total
Fund
0
03/96 0 (10000) 0 (10000)
06/96 0 0 0 0
Quarterly Turnover
(Lower of Pur/Sales
Div by: Avg Value)
Fixed-
Eqyities Income
0.0% 0.0%
0.0% 3.6%
0.0% 0.0%
...,
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
LIQUID OPERATING MONIES
QUARTERLY FACTORS
Quarter Fixed-Total 90-Day
Ended: Equities Income Fund T-Bills
09195
12195 1.0197 1.0149 1.0133
03/96 1.0139 1.0139 1.0126
06/96 1.0137 1.0137 1.0129
Ell
Merrill 1-5 Merrill 1-3
Govt/Corp Govt/Corp
1.0297 1.0252
0.9991 1.0038
1.0082 1.0103
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COUNfY SANITATION DISTRICTS OF ORANGE COUNfY
LIQUID OPERATING MONIES
CUMULATIVE RESULTS
Quarter Fixed-Total 90-Day
Ended: ~uities Income Fund T-Bills
09195 100.00 100.00 100.00 100.00
12/95 100.00 101.97 101.49 101.33
03/96 100.00 103.39 102.90 102.61
06/96 100.00 104.80 ' 104.31 103.93
Ill
Merrill 1-5 Merrill 1-3
Govt/Com Govt/Com
100.00 100.00
102.97 102.52
102.88 102.91
103.73 103.97
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
LONG TERM OPERATING ACCOUNT
ASSET ALLOCATION ($000)
Quarter muities Fixed-Income
Ended: Amount Percent Amount Percent
09195 0 0.0% 193392 82.5%
12/95 0 0.0% 239388 90.8%
03/96 0 0.0% 263155 100.0%
06196 0 0.0% 282434 100.0%
Cash&~uiv. Total
Amount Percent Amount
40908 17.5% 234300
24328 9.2% 263716
0 0.0% 263155
0 0.0% 282434
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
LONG TERM OPERATING ACCOUNT
ASSET FLOWS ($000)
Net New Investment
Quarter Fixed-Cash& Total
Ended: Equities Income Equiv. Fund
09195
12/95 0 38982 (17146) 21836
03/96 0 0 0 0
06196 0 17000 0 17000
Quarterly Turnover
(Lower of Pur/Sales
Div by Avg Value)
Fixed-
Equities Income
0.0% 10.4%
0.0% 0.0%
0.0% 0.0%
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
LONG TERM OPERATING ACCOUNT
QUARTERLY FACTORS
Quarter Fixed-Total 90-Day
Ended: Equities Income Fund T-Bills
09195
12/95 1.0352 1.0320 1.0133
03/96 0.9979 0.9979 1.0126
06/96 1.0080 1.0080 1.0129
Merrill 1-5 Merrill 1-3
Govt/Corp Govt/Coro
1.0297 1.0252
0.9991 1.0038
1.0082 1.0103
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
LONG TERM OPERATING ACCOUNT
CUMULATIVE RESULTS
Quarter Fixed-Total 90-Day
Ended: J;;guities Income Fund T-Bills
09/95 100.00 100.00 100.00 100.00
12/95 100.00 103.52 103.20 101.33
03/96 100.00 103.30 102.98 102.61
06196 100.00 104.13 103.81 103.93
Merrill 1-5 Merrill 1-3
Govt/Com Govt/Com
100.00 100.00
102.97 102.52
102.88 102.91
103.73 103.97
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
TOTAL FUND
ASSET ALLOCATION ($000)
Quarter ~uities Fixed-Income
Ended: A.mount Percent Amount Percent
09195 0 0.0% 198053 67.3%
12/95 0 0.0% 244111 75.2%
03/96 0 0.0% 315104 100.0%
06196 0 0.0% 335092 100.0%
Cash & E.guiv. Total
Amount Percent A.mount
96406 32.7% 294458
80721 24.8% 324832
0 0.0% 315104
0 0.0% 335092
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COUNfY SANITATION DISTRICTS OF ORANGE COUNfY
TOTAL FUND
ASSET FLOWS ($000) ·
Net New Investment
Quarter Fixed-Cash& Total
Ended: Equities Income Equiv. Fund
09195
12/95 0 38892 (17056) 21836
03/96 0 (10000) 0 (10000)
06/96 0 17000 0 17000
Quarterly Turnover
(Lower of Pur/Sales
Div b~ Avg Value)
Fixed-
Equities Income
0.0% 10.2%
0.0% 1.2%
0.0% 0.0%
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
TOTAL FUND
QUARTERLY FACTORS
Quarter Fixed-Total 90-Day
Ended: Egnities Income Fund T-Bills
09195
12/95 1.0348 1.0285 1.0133
03/96 1.0008 1.0008 1.0126
06/96 1.0090 1.0090 1.0129
Merrill 1-5 Merrill 1-3
Govt/Corp Govt/Corp
1.0297 1.0252
0.9991 1.0038
1.0082 1.0103
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COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
TOTAL FUND
CUMULATIVE RESULTS
Quarter Fixed-Total 90-Day
Ended: Equities Income Fund T-Bills
09195 100.00 100.00 100.00 100.00
12/95 100.00 103.48 102.85 101.33
03/96 100.00 103.56 102.93 102.61
06/96 100.00 104.49 103.86 103.93
Merrill 1-5 Merrill 1-3
Govt/Com Govt/Corp
100.00 100.00
102.97 102.52
102.88 102.91
103.73 103.97
CIATES., ..
Atlanta Consulting Office
Six Concourse Parkway, Suite 2900
Atlanta, Georgia 30328
Phone: (770) 804-5585
Chicago Consulting Office
123 N. Wacker Drive, Suite 970
Chicago, lllinois 60606
Phone: (312) 346-3536
Denver Consulting Office
550 East 8th Avenue
Denver, Colorado 80203
Phone: (303) 861-1900
New York Consulting Office
163 Madison Avenue
Morristown, New Jersey 07960
Phone: (201) 993-9595
San Francisco Consulting Office
71 Stevenson Street, Suite 1300
San Francisco, California 94105
Phone: (415) 974-5060
Format
o Written Report
o Overheads
o Slides
o Flip Charts
Originator .... ~
Department Head Sign Off " t '
Anticipated Time IS-Wli"'"
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
AUGUST 7, 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.
At the last FAHR Committee, staff presented its plans to hire a broadbanding consultant
to conduct a study of the Districts' compensation structure. The objectives of the study
will be to identify methods of increasing workforce flexibility while shifting from a "step"
or seniority system to a merit and skill based system. The results of this study will
provide useful for the labor negotiating team during this year's negotiations. The
Committee agreed to do the study but asked that the consultant meet with the them
before the study was conducted. The broadbanding consultant and our labor
negotiator, Dan Cassidy, will be at the meeting to answer questions during closed
session.
Staff Recommendation
No recommendation -information only.
A:\LABORNEG.FAH
Fonnat
o Written Report
o Overheads
DSlides
o Flip Charts
Originator __ _
Department Head Sign J~7 A --~
Anticipated Time 5 min.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
AUGUST 7, 1996
FAHR96-46: Consideration of motion to receive and file Treasurer's
Report for the month of June 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.
Immediate post-month reports are available from the Treasurer. 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 uliquid
Operating Monies" and for the ulong-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, umark-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.
Balances csooc June 30, 1996
State of Calif. LAIF $ 14,209,049
Bank of America 3,639,897
PIMCO -Short-term Portfolio 52,326,660
PIMCO -Long-term Portfolio 281,426,635
District 11 GO Bond Fund 9,721
Debt Service Reserves @ Trustees 33,517,923
$385, 129,885
Staff Recommendation
Staff recommends the Committee receive, approve and forward this report to the Joint Boards.
J:IWPDOC\FINICRANE\FPC.MTGIFAHR.96\COVERS.96\FAHR96.46
August 7, 1996
400
350
300
r? .!! 250
0 c
'0200 .,, c ~150
:E
100
50
CS DOC
TOTAL CASH & INVESTMENTS 1995 -1996
July 31 Aug. 31 Sept. 30 Oct. 30 Nov. 30 Dec. 31 Jan. 31 Feb. 29 Mar. 31 Apr. 30 May 31 June 30
J:\WPDOCIFINICRANEIFPC.MTGIFAHR.96\COVERS,96\FAHR96,46
MONTHLY REPORT
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INVESTMENT MANAGEMENT PROGRAM
PIMCO'S PERFORMANCE MONITORING & REPORTING
(for the month ending June 30, I 996)
Liquid Operati11g Mo11ies
14.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate:
• PIM CO • Mellon
Historical Cost:
14.1.2 MODIFIED DURATION Of Portfolio:
Oflndex:
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:IOFFICF.\lfPll'IMll'l'VOCSJ'IMCORPTV.(!IJJUN. WP[)
$52,612,904
$52,65 8,612
$52, 708,614 -
.11
.25
$57,874 (.11%)
0%
99%
AAA
0%
),.
.45
1.34
------
2.68
.42
MONTHLY REPORT
COUNTY SANITATION DISTRICTS OF ORANGE COUNTY
INVESTMENT MANAGEMENT PROGRAM
PIMCO'S PERFORMANCE MONITORING & REPORTING
(for the month ending June 30, 1996)
Long Term Operati11g Monies
14.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate:
• PIM CO • Mellon
Historical Cost:
14.1.2 MODIFIED DURATION Of Portfolio:
Oflndex:
14.1.3 1 % INTEREST RA TE CHANGE Dollar Impact (gain/loss) of 1 % Change:
14.1.4 REVERSE REPOS % of Portfolio in Reverse Repos:
(see attached schedule)
14.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days:
14.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality:
14.1.7 SECURITIES BELOW "A" RA TING % 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:IOFF ICE\WPWIN\\\ PDOC.5\PLMCO!lPTILT Jilli. W PD
$281,775,947
$282,433,488
$285,929,711 _j
2.5
2.4
$7,044,399 (2.5%)
0%
NA
AAA
0%
~
.96
.64
-------
.37
.86
v..._.._......,.vvu.1..vv
CSDOC-CONSOLIDATED
SHARES/PAR SECURITY DESCRIPTION
CASH & CASH EQUIVALENTS
CASH
0 CASH
SUBTOTAL CASH
COMMERCIAL PAPER -DISCOUNT
500,000 AMERICAN TEL & TL DISC
08/16/1996
5,800,000 AMERICAN TEL & TL DISC
08/22/1996
1,800,000 AMERICAN TEL & TL DISC
08/09/1996
1,200,000 CANADIAN WHEAT BD DISC
07/10/1996
1,100,000 CANADIAN WHEAT BD DISC
08/09/1996
2,100,000 COMWLTH BK AUST A DISC
08/20/1996
300,000 ELEC FRANCE SVC DISC
08/23/1996
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
2,500,000 ONTARIO HYDRO DISC
09/09/1996
1,000,000 PITNEY BOWES CC DISC
07/22/1996
500,000 PITNEY BOWES CC DISC
07/23/1996
500,000 SOUTHWSTN PUB SVC DISC
07/19/1996
MELLON TRUST
PORTFOLIO DETAIL BY SECTOR
30-JUN-1996
MARKET
PRICE
1.000
98.775
98.656
98.469
98.640
98.633
98.653
98.668
98.580
99.514
98.336
98.673
98.601
98.675
98.787
98.990
99.684
MARKET VALUE
1. 58
1. 58
493,875.00
5,722,035.11
1,772,437.50
1,183,685.33
1,084,967.59
2,071,717.67
296,003.58
1,675,860.48
895,627.50
1,278,373.06
1,085,402.08
591,608.34
2,466,877.78
987,872.78
494,949.58
498,419.17
% OF
TOTAL
0.00
0.00
0.15
1. 71
0.53
0.35
0.32
0.62
0.09
0.50
0.27
0.38
0.32
0.18
0.74
0.29
0.15
0.15
COST
1.58
1. 58
493,875.00
5,722,035.11
1,772,437.50
1,183,685.33
1,084,967.59
2,071,717.67
296,003.58
1,675,860.48
895,627.50
1,278,373.06
1,085,402.08
591,608.34
2,466,877.78
987,872.78
4 9 4 I .9 4 9 • 5 8
498,419.17
Page 1
BASE: USO
HBllOO
UNREALIZED ESTIMATED CURR
YLD GAIN/LOSS ANNUAL INCOME
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
I 0.00 0 . 00 ~-.'00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0 .00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 10 I
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0 .00
0.00 0.00 0.00
0.00 0 .00 0.00
0.00 0.00 0.00
MELLON TRUST JCSGOOOlOO
~SDOC-CONSOLIDATED PORTFOLIO DETAIL BY SECTOR
SHARES/PAR SECURITY DESCRIPTION
3,500,000 WAL MART STORES DISC
07/03/1996
MARKET
PRICE
99.809
SUBTOTAL COMMERCIAL PAPER -DISCOUNT
TREASURY BILLS -LESS THN lYR
5,000,000 US TREASURY BILLS
06/26/1997 DD 06/27/96
94.393
SUBTOTAL TREASURY BILLS -LESS THN 1
FEDERAL HOME LOAN MORTGAGE -LESS THAN 1 YR
5,000,000 FED HOME LN MTG CORP DISC NTS
MAT 07/24/1996
2,100,000 FEDERAL HOME LN MTG CORP DISC
MAT 09/05/1996
99.617
98.644
SUBTOTAL FEDERAL HOME LOAN MORTGAGE
FNMA ISSUES -LESS THN lYR
700,000 FED HOME LN MTG CORP DISC NTS
08/12/1996
10,000,000 FEDERAL NATL MTG ASSN DISC
08/23/1996
99.310
98.536
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
3,100,000 FEDERAL HOME LN BK CONS DISC 98.698
MAT 08/14/1996
500,000 FEDERAL HOME LN BK CONS DISC 97.662
MATURES 11/12/1996
2,500,000 FEDERAL HOME LN BK CONS DISC 98.671
MAT 08/28/1996
SUBTOTAL FED HM LOAN BNK -LESS THN
REPURCHASE AGREEMENTS
30-JUN-1996
% OF
MARKET VALUE TOTAL
3,493,301.40 1.04
26,093,013.95 7.79
4,719,669.45 1. 41
4,719,669.45 1.41
4,980,861.ll 1. 49
2,071,518.75 0.62
7,052,379.86 2.10
695,170.10 0.21
9,853,550.00 2.94
10,548,720.10 3.15
3,051,473.81 0.91
3,059,622.50 0.91
488,311.ll 0.15
2,466,777.78 0.74
9,066,185.20 2.71
..
BASE: USD
HBllOO
UNREALIZED ESTIMATED CURR
COST GAIN/LOSS ANNUAL INCOME YLD
3,493,301.40 0.00 0.00 0.00
26,093,013.95 0.00 0 .00 0.00
4,719,669.45 0.00 0.00 0.00
4,719,669.45 0.00 0.00 0
4,980,861.ll 0.00 0.00 0.00
2,071,518.75 0.00 0.00 0.00
7,052,379.86 0.00 0.00 0.00
695,170.10 0.00 0.00 0.00
9,853,550.00 0 .00 0.00 0.00
10,548,720.10 0.00 0.00 0.00
3,051,473.81 0.00 0.00 0.00
3,059,622.50 0.00 0.00 0.00
488, 311.11 0.00 0.00 0.00
2,466,777.78 0.00 0.00 0.00
9,066,185.20 0.00 0.00 0.00
Page 2
MELLON TRUST •t..::::iGU U U 1.U U
'SDOC-CONSOLIDATED PORTFOLIO DETAIL BY SECTOR
MARKET
SHARES/PAR SECURITY DESCRIPTION PRICE
6,200,000 GOLDMAN SACHS LP REPO 100.000
05.300% 07/01/1996 DD 06/28/96
SUBTOTAL REPURCHASE AGREEMENTS
BSDT RESERVE DEPOSIT ACCOUNTS
489,516 BSDT RESERVE DEPOSIT ACCOUNT-
PUBLIC II
100.000
SUBTOTAL BSDT RESERVE DEPOSIT ACCOUN
TOTAL CASH & CASH EQUIVALENTS
IXED INCOME SECURITIES
U.S. GOVERNMENTS
75,500,000 US TREASURY NOTES
07.125% 09/30/1999 DD 09/30/94
13,000,000 US TREASURY NOTES
05.750% 10/31/2000 DD 10/31/95
SUBTOTAL U.S. GOVERNMENTS
U.S. AGENCIES
10,000,000 FED NATL MTG ASSN MTN
5.640% 02/20/2001 DD 02/20/96
39,600,000 FEDERAL HOME LN BK CONS BDS
6.490% 09/13/2000 DD 09/13/95
15,000,000 FEDERAL HOME LN MTG CORP DEBS
5.990% 03/06/2001 DD 03/06/96
25,000,000 FEDERAL HOME LN MTG DEB
6.720% 10/02/2000 DD 10/02/95
25,000,000 FEDERAL NATL MTG ASSN DEB
6.850% 05/26/2000 DD 05/26/95
20,000,000 FEDERAL NTAL MTG ASSN
6.375% 10/13/2000 DD 10/10/95
SUBTOTAL U.S. AGENCIES
102.187
97.406
95.781
98.891
97.031
99.345
99.984
98.625
30-JUN-1996
% OF
MARKET VALUE TOTAL
6,200,000.00 1. 85
6,200,000.00 1. 85
489,516.00 0.15
489,516.00 0.15
64,169,486.14 19.15
77,151,185.00 23.02
12,662,780.00 3.78
89,813,965.00 26.80
9,578,100.00 2.86
39,160,836.00 11.69
14,554,650.00 4.34
24,836,250.00 7.41
24,996,000.00 7.46
19,725,000.00 5.89
132,850,836.00 39.65
BASE: USD
HBllOO
UNREALIZED ESTIMATED CURR
COST GAIN/LOSS ANNUAL INCOME YLD
6, 200, ooo. ·oo 0.00 328,600.00 5.30
6,200,000.00 0.00 328,600.00 5.30
489,516.00 0.00 18,356.85 3.75
489,516.00 0.00 18,356.85 7 )
64,169,486.14 0.00 346,956.85 0.54
78,223,618.72 -1,072,433.72 5,379,375.00 6.97
13,102,578.13 -439,798.13 747,500.00 5.90
91,326,196.85 -1,512,231.85 6,126,875.00 6.82
9,593,750.00 -15,650.00 564,000.00 5 .89
39,890,500.00 -729,664.00 2,570,040.00 l ~
14,554,687.50 -37.50 898,500.00 6 .17
25,000,000.00 -163,750.00 1,680,000.00 6 .76
25,351,562.50 -355,562.50 1,712,500.00 6.85
20,128,125.00 -403,125.00 1,275,000.00 6.46
134,518,625.00 -1,667,789.00 8,700,040.00 6.55
Page 3
•CSGOOOlOO
'SDOC-CONSOLIDATED
SHARES/PAR SECURITY DESCRIPTION
BANKING & FINANCE
1,500,000 CHRYSLER FINL MTN TR# 00201
8.160% 01/31/1997 DD 01/11/95
465,000 CHRYSLER FINL MTN TR # 00224
8.080% 01/31/1997 DD 01/31/95
1,500,000 CHRYSLER FINL MTN TR # 00258
7.380% 03/17/1997 DD 03/03/95
2,900,000 CHRYSLER FINL MTN TR# 00306
7.270% 04/13/1998 DD 04/13/95
1,000,000 CHRYSLER FINL MTN TR # 00335
6.260% 07/20/1998 DD 07/18/95
7,100,000 FORD MOTOR CR MTN TR# 00177
VAR/RT 03/30/1999 DD 03/30/94
4,000,000 FORD MTR CR MTN TRANCHE #TR 96
FLTG/RT 11/09/1998 DD 11/08/93
3,000,000 GMAC MED TERM NTS
8.625% 1/10/2000 DD 1/10/95
3,700,000 GENERAL MTRS ACCEP MTN TR00324
8.375% 02/03/1999 DD 0/03/95
1,000,000 LEHMAN BROS INC SR SUB NTS
7.000% 5/15/1997 DD 5/27/94
2,000,000 SEARS DC CORP MTN SER II
9.000% 08/01/1996 DD 08/01/91
1,000,000 SEARS ROEBUCK MTN# TR 00491
7.690% 02/27/1998 DD 02/28/95
SUBTOTAL BANKING & FINANCE
INDUSTRIAL
1,500,000 CHRYSLER CORP DEB
10.400% 08/01/1999
9,000,000 PHILIP MORRIS COS NT
9.250% 02/15/2000
2,500,000 SEARS ROEBUCK & CO NT
8.550% 08/01/1996
SUBTOTAL INDUSTRIAL
MELLON TRUST
PORTFOLIO DETAIL BY SECTOR
30-JUN-1996
MARKET
PRICE
101.088
101.133
100.894
101.595
99.672
99.875
100.145
105.860
104.253
100.534
102.520
102.210
104.291
107.218
100.180
% OF
MARKET VALUE TOTAL
1,516,320.00 0.45
470,268.45 0.14
1,513,410.00 0.45
2,946,255.00 0.88
996,720.00 0.30
7,091,125.00 2.12
4,005,800.00 1. 20
3,175,800.00 0.95
3,857,361.00 1.15
1,005,340.00 0.30
2,050,400.00 0.61
1,022,100.00 0. 31
29,650,899.45 8.85
1,564,365.00 0.47
9,649,620.00 2.88
2,504,500.00 0.75
13,718,485.00 4.09
TOTAL FIXED INCOME SECURITIES 266,034,185.45 79.39
COST
1,534,950.00
475,972.61
1,522,140.00
2,952,896.00
993,160.00
6,999,748.00
3,970,480.00
3,227,070.00
3,911,640.00
1,007,520.00
2,050,400.00
1,031,860.00
29,677,836.61
1,603,320.00
9,903,780.00
2,554,050.00
14,061,150.00
BASE: USD
HBllOO
UNREALIZED ESTIMATED CURR
YLD GAIN/LOSS ANNUAL INCOME
-18,630.00 122,400.00 8 .07
-5,704.16 37,572.00 7 .99
-8,730.00 110,700.00 7 .31
-6,641.00 210,830.00 7.16
3,560.00 62,600.00 ?
91,377.00 402,570.00 5 .68
35,320.00 243,200.00 6.07
-51,270.00 258,750.00 8.15
-54,279.00 309,875.00 8.03
-2,180.00 70,000.00 6 .96
0.00 180,000.00 8.78
-9,760.00 76,900.00 7.52
-26,937.16 2,085,397.00 7
-38,955.00 156,000.00 9.97
-254,160.00 832,500.00 8.63
-49,550.00 213,750 .00 8 .53
-342,665.00 i,202,250.00 8.76
269,583,808.46 -3,549,623.01 18,114,562.00 6.81
Page 4
'C.SGOOOlOU
'SDOC-CONSOLIDATED
SHARES/PAR SECURITY DESCRIPTION
)THER PORTFOLIO ASSETS
PAYABLES/RECEIVABLES
0 INTEREST RECEIVABLE
SUBTOTAL PAYABLES/RECEIVABLES
TOTAL OTHER PORTFOLIO ASSETS
NET PORTFOLIO ASSETS
MELLON TRUST
PORTFOLIO DETAIL BY SECTOR
30-JUN-1996
MARKET ~ OF
PRICE MARKET VALUE TOTAL
1.000 4,888,428.01 1. 46
4,888,428.01 1. 46
4,888,428.01 1.46
335,092,099.60 100.00
BASE: USD
HBllOO
UNREALIZED ESTIMATED CURR
COST GAIN/LOSS ANNUAL INCOME YLD
4,888,428.01 0.00 0.00 0.00
4,888,428.01 0.00 0.00 0 .00
4,888,428.01 0.00 o.oo r 'l
338,641,722.61 -3,549,623.01 18,461,518.BS 5.51
Page 5
Fonnat
o Written Report
o Overheads
o Slides
o Flip Charts
~A{) Originators __ _
Tom Dawes, Gary Streed
Asst.. Genl. Mgr. Sign Off __ _
Judy Wilson
Anticipated Time 15 Mins.
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
AUGUST 7, 1996
F AH R96-4 7: Consideration of motions relative to the Basic Integrated Reuse
Project proposed by OCWD, IRWD and the City of Newport Beach:
1. Modify the existing Agreement between District 14 and the other Districts to
provide that the 1996-97 flow excludes up to 3.2 mgd, providing the three-party
BIRP is approved.
2. Modify the existing Agreement between all Districts and OCWD for Green Acres
Project (GAP) water to include a long-term commitment to purchase and to supply
reclaimed water at a mutually agreeable price which reflects potential OCWD
savings and which does not exceed the costs of operations and maintenance
(currently $89/mg).
3. Maintain the June 30, 1997 equity sale from District 14 to the other Districts
calculated on the basis of excluding 3.2 mgd for four months as an inter-District
payable/receivable of approximately $4.8 million, and transfer the funds in 1999-
2000 in order to eliminate the negative cash flow impacts on the other Districts
from the accelerated flow reduction.
4. Authorize staff to begin negotiations with parties to the three-party agreement to
allow for disposal of excess reclaimed water.
Summary
At the July 24, 1996 Joint Boards meeting, the Directors referred a request from the City of
Newport Beach to the F AHR Committee. The request is for temporary flow accommodations for
District No. 14, exempting flows of 3.2 mgd from the calculations determining the Districts'
contributions to CORF and the annual Joint Works equity sale.
The Orange County Water District, Irvine Ranch Water District, and the City of Newport Beach
have a tentative agreement for reclaimed water reuse which is contingent upon several actions
by the Sanitation Districts. The actions and the tentative agreement are fully discussed in the
attached staff report.
Staff Recommendation
Staff recommends that the Committee approve three actions for consideration by the Joint
Boards in August:
1. Modify the existing Agreement between District 14 and the other Districts to provide that
the 1996-97 flow excludes up to 3.2 mgd, providing the three-party BIRP is approved.
2. Modify the existing Agreement between all Districts and OCWD for Green Acres Project
(GAP) water to include a long-term commitment to purchase and to supply reclaimed
water at a mutually agreeable price which reflects potential OCWD savings and which
does not exceed the costs of operations and maintenance (currently $89/mg).
3. Maintain the June 30, 1997 equity sale from District 14 to the other Districts calculated
on the basis of excluding 3.2 mgd for four months as an inter-District payable/receivable
of approximately $4.8 million, and transfer the funds in 1999-2000 in order to eliminate
the negative cash flow impacts on the other Districts from the accelerated flow
reduction.
4. Authorize staff to begin negotiations with parties to the three-party agreement to allow
for disposal of excess reclaimed water.
J:\WPDOCIFINICRANE\FPC.MTGIFAHR,96\COVERS.96\FAHR96.47
August 7, 1996
STAFF REPORT
FAHR96-47: Consideration of actions relative to the Basic Integrated Reuse
Project proposed by OCWD, IRWD and the City of Newport Beach
I. SUMMARY
The Orange County Water District (OCWD), the Irvine Ranch Water District
(IRWD), and the City of Newport Beach (City), are proposing to implement a
reclaimed water project called the Basic Integrated Reuse Project (BIRP). The
goal of the BIRP is to provide wide use of reclaimed water produced by JRWD,
especially in winter months when IRWD demands for reclaimed water are low.
II. BACKGROUND
In winter months, IRWD cannot use or store all the reclaimed water the agency is
capable of producing at its Michelson Water Reclamation Plant. Therefore,
historic practice has been to send higher amounts of untreated wastewater to
CSDOC for treatment and disposal, since IRWD could not discharge treated
wastewater to San Diego Creek. IRWD recently developed a plan to discharge
approximately 5 mgd of treated wastewater into nearby duck ponds and water
fowl habitat, with subsequent discharge to San Diego Creek and the Upper
Newport Back Bay. IRWD has received from the Santa Ana Regional Water
Quality Control Board an NPDES permit for both a demonstration phase (2
years) and, if successful, a subsequent permanent phase. This project, called
the Wetland Water Supply Project (WWSP), met opposition from the City and
several groups including "Defend the Bay." As an alternative to the WWSP, the
BIRP has been proposed by IRWD, OCWD and the City.
Instead of discharging the treated effluent to the duck ponds, wildlife habitat, San
Diego Creek, and Upper Newport Back Bay, IRWD would pump up to 8 mgd of
treated effluent to OCWD's Green Acre Project (GAP) pipelines for reclamation
purposes. In order for that to happen, IRWD, OCWD and the City are proposing
execution of a Memorandum of Understanding and subsequent agreement which
binds each agency to require certain actions and expend certain funds. The
BIRP, if enacted, will also require CSDOC to amend an agreement with OCWD.
CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411
FAHR96-47
Page2
August?, 1996
Ill. DESCRIPTION OF THE BASIC INTEGRATED REUSE PROJECT
The BIRP is an alternative to WWSP. IRWD projects up to 8 mgd may be
surplus reclaimed water within the next five years, particularly during winter
months when irrigation demands for reclaimed water are lowest. CSDOC is
OCWD's highest use GAP customer. CSDOC uses on average approximately
4.2 mgd of reclaimed water year-round, with single-pass cooling of equipment as
the largest use of reclaimed water. Under the BIRP, IRWD reclaimed water
would be substituted for OCWD-produced GAP water. This would allow OCWD
to reduce production during winter months and, in fact, it appears that the GAP
water treatment plant can be removed from service each winter for approximately
four months. The IRWD reclaimed water is higher quality than GAP water due to
a lower dissolved mineral content.
IV. EFFECTS ON CSDOC
Under an agreement dated June 1993, CSDOC agreed to purchase reclaimed
GAP water from OCWD "at cost," and to provide OCWD with secondary effluent
at no charge. "At cost" has meant the cost to OCWD to operate and maintain the
facilities to convert our secondary effluent to reclaimed water. For fiscal year
1995-96, CSDOC was charged $89.00 per acre-foot, with an annual cost of
approximately $472,000. The agreement also provides that OCWD can
terminate delivery of water to CS DOC upon 24-months notice. This clause was
included to allow OCWD the opportunity to sell reclaimed water for other
purposes at a higher cost at OCWD's discretion. The clause would require
CSDOC to find an alternate water source or reduce water requirements for
reclaimed water, if other OCWD customers were found.
CSDOC uses reclaimed water for a variety of treatment plant processes and for
site irrigation. The largest use is for cooling various pieces of equipment most
associated with our Central Generation projects. However, as noted above,
CSDOC faces the possible future loss of GAP water. In anticipation of that
possibility, CSDOC has studied two alternate courses of action, both of which
would require significant capital funding. The first course of action is to reduce
the use of reclaimed water by eliminating all or some single pass cooling. This
could be accomplished by installing closed loop cooling systems with either air
cooling or heat exchangers. The second alternative is to build and operate our
own reclaimed water system using our secondary water as a source. Both of
these alternatives, either separately or together, would be costly and would add
extra equipment and operations and maintenance activities not directly
associated with the Districts' core business of wastewater treatment .
Under the BIRP, reclaimed water supplies would be guaranteed and the need for
reducing our use or finding an alternate source eliminated. The cost of the future
CSDOC alternatives have not been refined, but a capital cost projection estimate
FAHR96-47
Page 3
August?, 1996
in the range of $2 million is probably reasonable. One condition of the three-
party BIRP Agreement is that CSDOC agrees to purchase 4.2 mgd from October
through March at "a rate per acre foot equal to OCWD's cost to treat secondary
water to tertiary standard." Although the three-party BIRP Agreement does not
include the Districts, the price of water must be agreed upon.
V. TERMS OF THE DRAFT THREE PARTY MEMORANDUM OF
UNDERSTANDING (MOU)
The MOU that staff has reviewed provides schedules for the accomplishment of
certain tasks which will lead to an agreement to implement the BIRP. The three
parties, IRWD, OCWD, and City agree in the MOU to: 1) develop agreements
and permits which will provide for an intertie between IRWD's Michelson Water
Reclamation Plant and GAP lines which currently terminate in MacArthur
Boulevard, just southeasterly of Red Hill Avenue; 2) the construction of a
proposed GAP extension into Newport Beach, to be paid for by OCWD; and 3)
an IRWD intertie within University Avenue which will link to the new GAP
extension at Jamboree Road and University Drive. The GAP extension will
provide outlets within Newport Beach as far south as Fashion Island for future
customers. The City will guarantee that certain city customers now utilizing city
potable water will switch to reclaimed water. These two projects, the IRWD
intertie, and the GAP extension, constitute the majority of the physical work
necessary for the BIRP.
The MOU also provides that OCWD will accept from 4.6 mgd up to 7.8 mgd of
reclaimed water, up to 3.2 mgd more than it now delivers to customers during the
winter months. OCWD will pay IRWD fifty-percent of the price that CSDOC pays
OCWD for the reclaimed water. Currently, this is OCWD's operations and
maintenance cost to produce the water; $89.00 per acre foot although OCWD
has proposed $112 for 1996-97. A separate agreement between OCWD and
CSDOC specifies the formula that determines operating costs. If OCWD can sell
additional water, it will pay IRWD for the additional water at the fifty-percent rate,
otherwise it will accept the added water from IRWD at no additional cost.
Separately, plans are being developed for the disposal of any added water
(discussed below).
The estimated cost to OCWD is about $6 million for the GAP Extension. The
estimated capital cost to IRWD for the intertie segment is about $2.1 million.
IRWD will also incur the additional costs to treat up to 7.8 mgd to reclaimed water
standards rather than to have the Districts treat to ocean discharge standards.
(This would reduce District 14's operating costs and revenues.) There is an
unknown added cost, probably to OCWD, for disposal of excess reclaimed water.
The City of Newport Beach may pay about $1 million of retrofits. There are no
capital requirements for CSDOC under the BIRP.
FAHR96-47
Page 4
August?, 1996
The method for disposal of reclaimed water that cannot be utilized by OCWD in
winter months has not been finalized. One option is to discharge the water into
the Santa Ana River. A second option, which appears to be gaining favor, is to
discharge the excess water to CSDOC's ocean disposal system. Since the water
would already be pressurized by OCWD and at Plant No. 2, it could be directly
injected to the outfall pipeline and not require pumping by CSDOC. However, an
intertie costing OCWD and/or IRWD about $250,000 would be required to make
the necessary connection. The capacity of the GAP transmission line to Plant
No. 2 and into the outfall would be approximately 2.5 mgd. Operating costs to
CSDOC would be minimal.
Discharge to the Santa Ana River would require a permit to be issued by the
Regional Water Quality Control Board to the discharger, either OCWD or IRWD.
The reclaimed water could be discharged through the Districts' ocean outfall
under two different scenarios. If it is put into the Districts' system upstream of the
Districts' outfall sampling location, the Districts would request a modification of its
ocean discharge permit and assume responsibility for the discharge. Under
these conditions, the Districts must have a permit with IRWD, just as it does with
large industrial dischargers, to control the quality of the reclaimed water. If the
reclaimed water is discharged into the outfall system downstream of the Districts'
effluent sampling location, the discharger, IRWD, would apply for a separate
ocean discharge permit through the Districts' outfall system. In either case,
impact of the additional flow through the ocean discharge system must be
evaluated. However, the volume is small enough that its impact is likely to be
minimal and, because of the quality, positive to the extent it is evident at all.
Compliance with CEQA requirements for the connection to the outfall would be
the responsibility of either IRWD or OCWD.
VI. A DISCUSSION OF PROS AND CONS OF BIRP
From staffs' perspective, the Basic Integrated Reuse Project appears beneficial
to the three implementing parties and to CSDOC, presuming that a favorable rate
is negotiated with OCWD. Following is a brief discussion of some of the benefits
and downside of the proposed BIRP that staff has identified:
1. Irvine Ranch Water District
IRWD will benefit by minimizing the opposition of various parties to the
Wetland Water Supply Project. Additionally, the high quality IRWD
reclaimed water will generally be used in a reclamation project that has the
potential for expansion. IRWD is arguably the public agency with the most
impressive water reclamation record in the state. This project would
certainly advance their mission.
IRWD would need to treat wastewater for OCWD at a higher cost than they
pay to have us treat it.
FAHR96-47
Page 5
August?, 1996
IRWD will incur certain capital charges that may not occur under the
WWSP for the intertie. The BIRP will not change IRWD's ultimate
CORF contribution because it is an alternative to surface disposal as
a part of the WWSP.
2. Orange Countv Water District
The Orange County Water District will save money if its GAP Water
Treatment Plant is not operated during the winter months. An OCWD staff
report estimates annual savings of $152,000. During these same months, a
higher quality reclaimed water source will be provided by IRWD.
OCWD will benefit by the expansion of the GAP distribution system, and
with the subsidies provided, actually enjoy a marginal cost benefit for the
expansion.
OCWD operating costs will not increase because of BIRP and, thus, GAP
water costs to the Districts should remain constant, or even decrease as a
result of OCWD savings, priced in accordance with the 1993 GAP
Agreement between OCWD and the Districts.
3. City of Newport Beach
The City has sponsored and encouraged the development of the BIRP, and
will benefit by the expanded use of reclaimed water within the City and by
satisfying those opposed to the WWSP. The City will spend about $500,000
for retrofits.
4. Countv Sanitation Districts of Orange Cauntv
CSDOC will benefit by lower wastewater treatment costs in the range of
$200,000 per year primarily for avoided chemical and energy costs, since
not as much effluent will have to be treated to secondary treatment levels for
water reclamation. However, the greatest benefit will be the avoidance of
future capital requirements for water reclamation and/or water reduction.
OCWD's request that we commit for a 15 or 20-year term to our present
water usage will negate the requirements for these future capital
expenditures. CSDOC will also benefit by the use of the higher quality
reclaimed water, and may enjoy additional savings by expanded use of this
reclaimed water in chemical systems that currently cannot use the lower
quality GAP water.
Operational savings realized from less wastewater treatment will be partially
offset by a higher cost to the remaining Districts, since the administrative
portion and other fixed costs of the treatment costs will be spread over a
smaller flow base.
FAHR96-47
Page 6
August?, 1996
The CSDOC unit cost for GAP water purchased from OCWD could
decrease to reflect the $152,000 annual savings that result from shutting
down the GAP treatment plant. This would need to be negotiated.
Diversion of IRWD flows to either the WWSP or the BIRP will result in
reduced capital contributions from District No. 14, and in increased
purchases of Joint Works Treatment Facilities from District No. 14.
Assuming the capital improvement program set forth in the 1996-97 Budget
(which will be revised by the Strategic Plan), the reallocation of capital
improvement costs through 2020 will be:
District No. Reallocation @ 4.6 mgd
1 $2,413,366
2 7,009,107
3 7,278,596
5 919,148
6 1,046,674
7 2,165,533
11 1,607,306
13 247,833
14 {22 ,687,563)
Total $ 0
The proposed three-party agreement provides that IRWD will not discharge to the
WWSP during 1996-97 while the additional GAPll facilities are being constructed,
if the Districts will modify our agreement to calculate the District No. 14 capital
contribution method for one year. The three-party agreement requires the
Districts to agree to treat 3.2 mgd during the six winter months, but to exclude
those gallons from the calculations (operations, maintenance and treatment costs
would be paid). The capital contribution calculation is based upon a three-year
moving average of flows from each of the Districts. The District 14 flow is
specially calculated to be three times the actual flow for the four highest months
of the year. The impacts of reducing these flows for water that would otherwise
have been diverted are limited to the four years that it takes the moving average
to catch up.
FAHR96-47
Page 7
August?, 1996
During this period, the net capital contributions to JWTF and the annual equity
sale/purchase amount to $7,413,451 for District No. 14, whether the other
Districts agree to adjust the 1996-97 flow or not. The difference is the timing of
the contributions.
Cost to Other
Include All Flow Adj. 96-97 Flow Districts
1996-97 $ 118,184 $(4,683,315) $ 4,801 ,499
1997-98 (4,289,652 (4,756,246) 466,594
1998-99 674,572 539,278 135,294
1999-00 (3.916,555) 1.486,832 (5,403,387)
Total $(7,413,451) ~(7,413,451) $ o
Clearly, over the four-year period the additional costs to the other Districts to adjust
the 1996-97 flow net to zero. There is, however, the time value of money to
consider as the costs shift to the first year. The costs are primarily made up of the
annual JWTF equity purchase from District 14, because of the advanced reduction
in flows. District No. 14 should carry a receivable from the other Districts for the
period, and the other Districts should retain possession of, and interest earnings
on, those funds in order to adjust for the time value of first year's equity sale.
VII. STAFF RECOMMENDATION
As noted above, the Districts are not a party to the proposed three-party
agreement, but execution of the agreement depends upon some actions by the
Districts. Staff recommends that the Districts agree, in concept, to take the
following actions:
1. Modify the existing Agreement between District 14 and the other Districts
to provide that the 1996-97 flow excludes up to 3.2 mgd, providing the
three-party BIRP is approved.
2. Modify the existing Agreement between all Districts and OCWD for Green
Acres Project (GAP) water to include a long-term commitment to purchase
and to supply reclaimed water at a mutually agreeable price which reflects
potential OCWD savings and which does not exceed the costs of
operations and maintenance (currently $89/mg).
FAHR96-47
Page 8
August?, 1996
3. Maintain the June 30, 1997 equity sale from District 14 to the other
Districts calculated on the basis of excluding 3.2 mgd for four months as
an inter-District payable/receivable of approximately $4.8 million, and
transfer the funds in 1999-2000 in order to eliminate the negative cash
flow impacts on the other Districts from the accelerated flow reduction.
4. Authorize staff to begin negotiations with parties to the three-party
agreement to allow for disposal of excess reclaimed water.
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JOINT BOARDS OF DIRECTORS
REGULAR MEETING
JULY 24, 1996
ALL DISTRICTS:
Agenda Item (21 ): Consideration of motion to receive and file letter request
dated July 15, 1996 from City of Newport Beach for
temporary flow accommodations for County Sanitation
District No. 14, exempting certain excess flows from Capital Outlay Revolving Fund
charges, and refer request to Finance, Administration and Human Resources Committee
for evaluation and recommendation.
Summary
The City of Newport Beach has requested that the County Sanitation Districts of Orange County
(CSDOC) approve an accommodation whereby the Joint Works Treatment and Disposal
Facilities accept temporary flows from County Sanitation District No. 14 without charging the
normal contribution to the Capital Outlay Revolving Fund. The City of Newport Beach (City) is
making this request as part of a three-way agreement among the City, the Orange County
Water District (OCWD), and the Irvine Ranch Water District (IRWD) which will eliminate
discharges of treated wastewater to the Newport Back Bay via implementation of a reuse water
project called the Basic Integrated Reuse Project (BIRP). The goal of BIRP is to provide
beneficial use of reclaimed water produced by IRWD and eliminate discharge of reclaimed
water to the Back Bay.
Background
The Directors will recall that last year the flow agreement between CSD 14 and the Joint Works
was modified to include a provision whereby CSD 14's share of the Capital Outlay Revolving
Fund (CORF) would be based on the highest four months of recorded use. Separately IRWD,
which pays all of CSD 14 charges, has proposed and received approval for a project to
discharge treated wastewater into nearby duck ponds and ultimately to the Newport Back Bay.
This would allow IRWD to maximize reclamation during winter months when land disposal
options are limited and reduce flows treated to the CSDOC Joint Works. The net result to
CSDOC will be less flow from IRWD during the winter months; the period which would most
likely determine IRWD's share of the CORF Budget. The BIRP is an alternative to the disposal
of reclaimed water to the marshes and the Newport Back Bay.
The City of Newport Beach and others have not supported the disposal of reclaimed water to
the Newport Back Bay and have together with OCWD proposed an alternative project, the
BIRP. Under the BIRP, surplus reclaimed water will be sold to OCWD for use in their Green
Acres Project (GAP) Reclaimed Water Distribution System. OCWD distributes reclaimed water
for irrigation and other purposes. By placing IRWD's surplus reclaimed water into this
distribution system, discharges to the duck ponds, San Diego Creek and the Newport Back Bay
would be eliminated. IRWD will agree to this under certain conditions, one of which affects
CSDOC. This condition is the acceptance by CSDOC of additional wastewater on a temporary
basis without including the wastewater in the calculations which determine CSD 14's share of
CORF. IRWD will pay the operational charges associated with the collection treatment and
disposal of the surplus wastewater.
Temporary acceptance of excess wastewater is requested because the BIRP cannot be
implemented prior to the coming winter season.
Affect on CSDOC
Staff has identified two ways in which this proposal affects CSDOC. First, the short-term
accommodation of excess IRWD flows will have little effect on District financing. IRWD will
either discharge reclaimed water to the Newport Back Bay, or alternatively, send an equal
amount of wastewater to CSDOC. If it goes to the Newport Back Bay, CSDOC would not
receive a CORF funding; therefore, IRWD is requesting the same funding formula if wastewater
is temporarily diverted to CSDOC. IRWD will pay operational charges (which has the effect of
lowering cost for the remaining Districts since operational charges include fixed costs).
CSDOC has available capacity to accept these additional flows and the addition of these flows
will have no material effect on CSDOC's wastewater collection, treatment and disposal facilities.
The second way in which the BIRP affects CSDOC is the availability of a long-term, secure
reclaimed water source. Reclaimed water is the largest water supply used in the Districts'
operations, with an average daily usage of approximately 4.2 mgd. This water is used for a
variety of industrial purposes including irrigation, equipment cooling, washdowns, and chemical
make-up. Currently, CSDOC supply secondary treated water to OCWD, which provides tertiary
treatment and distribution through the GAP system. Our current agreement provides that
OCWD can terminate delivery of reclaimed water to CSDOC upon 24 months notice. This
clause was included to allow OCWD the opportunity to sell reclaimed water for other purposes
at a higher cost, at OCWD's discretion. CSDOC pays only an operating cost for the GAP water,
currently $89 per acre-foot (annual charges are about $650,000).
If the BIRP is approved, OCWD has requested that CSDOC enter into a long-term supply
agreement, of at least 15 years, under which we would be guaranteed the reclaimed water
source. Our long-term plans have anticipated that we would someday lose the GAP water
source and would, therefore, be forced to either build and operate a costly reclaimed water
system of our own and/or reduce reclaimed water usage by constructing expensive, closed-loop
water cooling systems to reduce water usage. Under this proposal we will not have to spend
those capital funds (probably in the range of $2 million dollars), nor operate a water reclamation
system. Therefore, the staff believes that the BIRP has long-term benefits to CSDOC.
Recommendation
Refer item to Finance and Human Resources Committee for an evaluation and
recommendation.
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July 15, 1996
Mr. Donald F. Mcintyre
General Manager
Orange County Sanitation Districts
10844 Ellis
Fountain Valley, CA 92728
Dear Mr. Mcintyre:
CITY OF NEWPORT BEACH
(714) 644-3000
Thank you for meeting with City representatives last week to discuss the status
of our negotiations with the Irvine Ranch Water District (IRWD) and the Orange
County Water District (OCWD) regarding the implementation of an alternative to
the Wetlands Water Supply Project (WWSP). As you know, the Santa Ana
Regional Water Quality Control Board (SARWQCB) on July 1st approved the
WWSP two year demonstration permit which would permit the discharge of
reclaimed water into San Diego Creek and Newport Bay beginning October 1,
1996. The parties are close to reaching agreement on the alternative and there
is a key provision which will require your Board's approval prior to
implementation of the alternative. We would respectively ask that you agendize
this matter at your earliest convenience. The details of the request follow in the
paragraphs below.
The alternative project which we have discussed with you and your staff would
construct a pipeline that would permit the transmission of reclaimed water from
IRWD's facilities to the OCWD facilitie:s in Fountain Valley. Today the total
OCWD demand for the reclaimed water is 4.6 mgd while the excess winter
IRWD flow is 7.8 mgd. Today there is an excess flow of 3.2 mgd and in the
future it is anticipated that an increased demand for reclaimed water would
gradually dissipate the 3.2 excess flow.
In the interim the parties have discussed with your staff the construction of a
intertie to allow the discharge of the 3.2 mgd into the CSDOC outfall facilities.
We will need approval by your Board once design details are developed and as
our three party agreement requires obtaining the necessary governmental
permits prior to this discharge into the outfall. I've attached the latest draft of the
agreement which has been negotiated between the parties for your review and I
City Hall• 3300 Newport Boulevard •Newport Beach, California 92663-3884
anticipate that the individual entities will act on the document in the next few
days in order to meet the rigorous timetable in the document.
One factor that can assist in deferring the discharge of reclaimed water into San
Diego Creek while the implementation of the alternate project is pursued is to
neutralize capital costs associated with the transmission of IRWD's excess flows
to CSDOC. In late 1995 IRWD and CSDOC reached a new agreement on how
to calculate the Capital Outlay Revolving Fund (CORF) charges. The new
agreement provides that the annual flow is calculated by multiplying the actual
flow for the highest four months by three to determine a twelve month flow.
Naturally, if IRWD were discharging into San Diego Creek and the Upper
Newport Bay during the wintertime peak excess flow, then the CORF charges
would be substantially reduced.
In our agreement in Section 5 you'll note in Subsection A that it requires in the
initial period of the agreement, prior to the construction of the permanent
pipeline transmitting the reclaimed water to OCWD, that CSDOC calculate the
CORF charges as though IRWD were discharging in San Diego Creek and the
Upper Newport Bay, which they would legally be entitled to do through permit of
the SARWQCB. It is my understanding that IRWD will pay operational charges
for these excess flows. In the second wintertime season of October 1 , 1997 to
March 31, 1998 the pipeline connecting IRWD to OCWD, plus the outfall facility
for excess flows, are anticipated to be in place and the calculation could
transition as flow in the alternate project occur.
We would appreciate your consideration of this request expeditiously by your
Board to implement our agreement on a timely basis. If you have any questions
please, don't hesitate to contact my office at 644-3000. Thank you for your
assistance.
Sincerely,
DATE:
TO:
FROM:
SUBJECT:
INTER-OFFICE MEMORANDUM
July 15, 1996
Board of Directors
William R. Mills Jr.
AGREEMENT AMONG IRWD, OCWD AND CITY OF NEWPORT
BEACH FOR THE GREEN ACRES PHASE 2 INTERTIE PROJECT
As indicated in Agenda Item 6 forthe July 17, 1996 Board Meeting, an agreement was reached at
staff level on July 15 for the above. A copy of the agreement is attached for your review and
consideration.
I have been informed that the IRWD Board and the Newport Beach City Council are expected to
meet and take action regarding the agreement prior to the OCWD Board Meeting on July 17. If the
two governing bodies do not approve the agreement prior to our board meeting, I will present the
item for information only.
I have also been informed that the City has scheduled a media briefing at 11 :00 a.m., July 16. Mr.
Kevin Murphy, Newport Beach City Manager has asked that I and representatives from IRWD
attend that presentation. Mr. Murphy has indicated that he wishes to announce that the three
parties have reached tentative agreement, subject to approval by the governing bodies of each
party. He will then provide details of the agreement.
Details of the agreement (that impact OCWD), as attached, are as follows:
Project Commitments
1. City obtains end-user agreements.
2. OCWD obtains commitment from CSDOC to take 4.2 mgd for a period of 15 years.
3. OCWD designs and constructs Green Acres Project in Newport Beach (paid for with State
low-interest loan).
4. IRWD designs and funds lntertie pipeline .
5. OCWD is construction manager for construction of Green Acres and lntertie pipelines.
6. City funds $500,000 worth of user hook-up costs. OCWD funds the balance (estimated at
$600,000).
To: Board 1.. .Jirectors
Subject: Agreement Among IRWD, OCWD and City of Newport Beach for the
Green Acres Phase 2 lntertie Project
July 15, 1996
Page 2
7. City or IRWD will obtain a connection from Green Acres pipeline to CSDOC outfall, paying
all costs.
8. All three parties will share cost of retaining a project consultant to manage and expedite
project through permitting and design as necessary. Total cost of consultant shall not
exceed $90,000.
9. If winter reclaimed water demands change significantly to impact OCWD or IRWD's ability
to meet their obligations, both parties will meet to identify a mutually beneficial resolution.
Basic Flow Commitments
1. OCWD will take 4.6 mgd of reclaimed water from IRWD from October 1 to March 31 each
year for 15 years, subject to receipt of commitment from CSDOC.
2. IRWD will supply 4.6 mgd on a continuous basis for 15 years. If IRWD cannot provide 4.6
mgd, IRWD will pay OCWD 50% of CSDOC price for shortage.
Additional Flow Commitments
1. OCWD will accept an additional 3.2 mgd during same time frame subject to City or IRWD
obtaining pipeline connection to CSDOC for disposal of excess flows.
2. IRWD will provide an additional 3.2 mgd (beyond the basic 4.6 mgd) to meet OCWD's peak
commitments for up to 15% of any 24-hour period.
Pricing Commitment
1. OCWD will pay IRWD 50% of the price paid by CSDOC for water purchased, up to 4.6
mgd. (Current CSDOC price is $89/AF.)
2. IRWD receives no payment for water provided to OCWD in excess of 4.6 mgd unless
OCWD receives payment for that water. If OCWD receives payment, then IRWD and
OCWD determine the cost sharing.
Impact on OCWD Finances
The project as currently structured has a benefit-cost ratio of 1.5. This equates to a positive impact
on the RA; that is, a potential reduction.
At the OCWD Board Meeting, I will apprise the Board of the latest developments regarding the
project. I will also make a presentation on the project economics and other aspects of the project.
AGENDA ITEM SUBMITTAL
MEETING DATE: July 17, 1996
TO: Board of Directors
FROM: William R. Mills Jr.
Staff Contact: S. Conklin/J. Kennedy
Budgeted: No
Program/Line Item No.: 901-5042-720. 70-01 /
GAP2NB
Cost Estimate: $ 0 (FY1996-97)
$5,600,000 (FY1997-98)
General Counsel Approval: Required
Engineers/Feasibility Report Approved:
Addressed herein
CEOA Compliance: R91-5-116 5/1/91
Approved Negative Declaration
SUBJECT: GREEN ACRES PHASE 2 INTERTIE PROJECT AGREEMENT WITH IRWD AND
CITY OF NEWPORT BEACH
SUMMARY
It is anticipated that an agreement between OCWD, Irvine Ranch Water District (IRWD),
and the City of Newport Beach (City), will be reached by Monday July 15 regarding the
Green Acres Phase 2 lntertie Project. In anticipation of that, the City has requested that
OCWD staff bring the agreement to the Board on July 17 for consideration. A copy of the
proposed agreement will be hand delivered to Board members on July 15 for review. A
presentation on the projects economics and on key elements of the agreement will be
made at the Board meeting.
RECOMMENDATION
1. Approve and execute the lntertie agreement with IRWD and City.
2. Authorize staff to proceed with the Green Acres Phase 2 Newport Beach Project.
DISCUSSION/ANALYSIS
On May 15, 1996 the Board reviewed the· proposed agreement regarding the Green Acres
Phase 2 Newport Beach lntertie project. The Board approved the project in concept
however specific questions were asked which are provided in Section 1 of this report along
with the corresponding answer. Section 2 of this report provides specific economic data for
the project before and after the intertie agreement.
Section 1 Previous Board Meeting
The following questions were asked at the May 15, 1996 Board meeting.
1. What is the impact of this project on our 1996-97 budget?
The project will have no impact to the 1996-97 budget because it will take several
months to prepare engineering drawings and award a construction contract. Funds for
this work were previously approved in this years budget. Construction funds of
approximately $5.6 million ($6. 1 million minus IRWD or City $0.5 million contribution)
will need to be budgeted for fiscal year 1997-98. Six hundred thousand dollars
($600,000) of this money will need to come from our reserves next fiscal year. The
remainder will come from the state in the form of a low-interest loan.
2. What is the impact of the project on the Replenishment Assessment?
The benefit cost ratio of this project is greater than 1 .0 thus the project will have a net
savings to the District. Table 3 of Attachment A indicates a benefit cost ratio of 1 .56.
Attachment B indicates that the net savings to the District are approximately $104,000
annually, or equivalent to an RA reduction of about $0.33 per AF.
3. How does the project affect our annual debt payments ?
This project will qualify for a state loan at 2.8% interest. The annual debt payment will
be $328,000 annually. Our current total annual debt payment for all previous capital
work is approximately $17 .5 million. Thus if this agreement is approved our annual
debt obligation will increase 1.9%. Alternately, the Board could choose to retire an
amount of our long term debt equivalent to the new state loan. The retired debt would
be at a much higher interest rate than the state loan interest rate.
4. Is IRWD required or committed to provide us water ?
Per the proposed agreement IRWD is required to provide water to us or pay an
equivalent amount of money for any lost savings.
Section 2 Project Economic Analysis
Original Project (without lntertie}
The original Phase 2 expansion of the Green Acres Project into the Cities of Newport Beach
and Huntington Beach has been part of the District's long-range goals to increase the use of
reclaimed water, especially along the coastal areas. Such a project would:
1. Increase local supplies
2. Reduce our dependency on MWD
3. Decrease coastal pumping
4. Reduce the demands on the potable system.
However in the current economic climate the overall financial benefits of the project are not
quite significant enough to justify proceeding with the work. Table 2 of Attachment A
indicates that the projects benefit/cost ratio is currently calculated at under 1 .0.
As shown on Table 2 the District would borrow approximately $4.2 million from the State at
2.8% interest over 20 years. The annual payment on these funds is $328,258. The current
total annual debt payment for all previous District projects is approximately $17. 5 million.
In addition to this borrowed money the District would need to lower reserves next fiscal year
by $0.6 million to fund the end user retrofitting cost.
Project wit h lntertje Agreement
The proposed lntertie agreement with IRWD and the City would change the original project's
economics to have a positive effect upon the District. Those changes include:
1. The City will contribute $500,000 towards the necessary end user hook-up
retrofitting cost; thus the District would only lower reserves by $600,000.
2. The City would obtain the six end user agreements which will save
significant OCWD staff time.
3. IRWD will provide the District with water that costs 50% of what it normally
costs our Green Acres Plant to produce over each winter period.
4. The Green Acres Plant will be shut down four months every winter saving
the District approximately $152,000 annually.
These financial arrangements increase the projects benefit/cost ratio to 1.56 as shown on
Table 3 of Attachment A. A benefit/cost ratio over 1.0 by definition indicates that the
District will save money by proceeding with the project. Savings of approximately
$104,000 annually have been calculated as shown on Attachment B.
Due to the likely scheduling of the project, it is probable that no adjustments are necessary
to this years current budget. The necessary funds to proceed ahead with the project would
be budgeted in fiscal year 1997-98.
A secondary benefit of proceeding with only the Newport Beach segment of Phase 2 is that
the project is smaller and will now qualify for a different State loan program with significantly
less project hurdles and requirements. The amount of time and paperwork to receive the
funds will be greatly reduced. In addition there will be less construction contract
requirements which may lead to receiving lower bids.
Attachment A was discussed with the Orange County Ground Water Producers Technical
Advisory Committee on May 28, 1996 and they are in support of the project.
Phase 2 H1mtingtoo Beach Project
Table 4 of Attachment A includes the current marginal economic analysis of expanding the
Green Acres system into Huntington Beach. Under current assumptions and on its own
(Huntington Beach work only) the benefit cost ratio of this project is less than 1 .0 thus the
project is not economically justified. The significant assumptions for this project are (1) the
amount of ultimate users which is currently estimated on Table 1 of Attachment A, (2) how
much previous pipeline work, which totals $1 .9 million and was funded by the City and a
developer, should be included in the marginal analysis and not considered sunk cost, and (3)
the amount of funds that the City can commit to assisting with end user retrofit cost. These
assumptions significantly affect the economics of the project. District and City of
Huntington Beach staffs have met and reviewed the project's economics. Both agree and
recommend that the Huntington Beach project not proceed until such uncertainties as the
amount of firm water demands, etc., can be determined.
7-17-10.BOD
GREEN ACRES PROJECT -PHASE 11
YEAR 2001 MARGINAL COST ANALYSIS
The attached tables calculate the marginal benefits of proceeding forward with the Green
Acres Phase II Project (GAP2) into the Cities of Newport Beach and Huntington Beach from
this point in time. In addition the benefits of proceeding forward with the Newport Beach
segment as they are effected by the Irvine Ranch/Newport Beach intertie MOU are
calculated.
The basic assumption for this analysis is that certain cost and expenses have already been
committed via contract or paid for and are thus sunk cost and should not be included in
the marginal calculations. These funds will not be recovered if the District chose not to
go forward with the GAP2 projects. Examples of these sunk cost include the design cost
for the phase II pipelines which have already been committed and the $ 5 million paid for
the Santa Ana reservoir.
The figures used in this analysis have been inflated 4 percent annually or projected to the
year 2001 since that is the estimated time that the complete amount of demands will come
on line. Thus the analysis is an estimate of the projects benefit cost ratio in the year 2001
A summary of the tables provided is shown below:
TABLE DESCRIPTION
1 Planned Users of Reclaimed Water
2 GAP2 -Newport Beach
3 GAP2 -Newport Beach with MOU benefits
4 GAP2 -Huntington Beach
Table 1 provides the estimated total demands and users for GAP2. A total of 1,911 afy
of demands are expected by the year 2001.
Table 2 calculates the marginal benefits for constructing the GAP2 -Newport Beach
project. In Section I the estimated capital cost for GAP2 is divided into two parts. The
first part is those capital costs that are eligible for a state loan which total approximately
$4. 98 million.
The Santa Ana reservoir and pump station retrofitting costs are estimated at $1.9 million.
Attachment A
This cost is allocated to two sets of end users of which approximately 41 % is attributed
to GAP2 -Newport Beach as shown in the following table. The remainder of this expense
is allocated to remaining GAP phase I night time users.
Cost of Retrofit work $1,900,000
Project Acre-feet Percentage Total Cost
Newport Beach Phase II 827 40.8 $775, 185
Phase I Night Infill Users 1200 59.2 $1, 124,815
2027 100 $1,900,000
All of the reservoir retrofit cost could be allocated to the 1200 acre-feet of Phase I infill
users since this work was originally contemplated to bring them on line. However now
that the Newport Beach work may occur before or at the same time as the infill users and
to be more conservative in the Phase II analysis, the retrofit cost has also been spread over
the Newport Beach user category.
The remaining capital costs or second part of Section I which totals $1 . 1 million are related
to Newport Beach end user retrofitting expenses. These items are not eligible for the state
loan and thus would be financed using District reserves or traditional Certificates of
Participation. The total annual debt service or loss in interest income is estimated at
$418,437.
Section II of Table 2 estimates the annual operation and maintenance cost for GAP2.
These costs include maintenance on the new pipelines, maintenance of the Santa Ana
reservoir, the cost of producing and pumping the GAP2 water from the Fountain Valley
plant, and the cost of pumping the water from the Santa Ana reservoir. The line item
"Project Plant & Reservoir pumping" includes the estimated cost of $90/af to make GAP2
water and the estimated cost of $25/af to pump it from the Santa Ana reservoir. These
costs were also inflated by 4% annually to obtain estimated year 2001 cost. The annual
maintenance cost is approximately $119, 196.
Section Ill of Table 2 predicts probable project revenues. The GAP2 water is estimated to
be sold for 80% of the cost of producing groundwater to the two cities which is currently
$192.88/af. This unit price was inflated at 4% to the year 2001 and multiplied by the
estimated 827 at of Newport Beach demands. The project will also be eligible for the
MWD LAP program. In spite of the marginal cost analysis approach the project would likely
be eligible for the entire $250 MWD subsidy because the overall estimated unit cost for
GAP2 water is expected to be relatively high after past capital cost are included in the
Attachment A
calculations as allowed by MWD.
Section IV of Table 2 quantifies the two District year 2001 savings by implementing GAP2
which are as follows:
This new water will reduce the amount of water that the District needs to import.
Using the 75% Basin Production Percentage, 75% of the cost of importing water
will be saved. The cost of this water is the MWD Seasonal Storage rate minus the
replenishment assessment received by the District.
The GAP water will also reduce the amount of pumping along the coastline where
seawater intrusion is a problem. Therefore less Water Factory 21 (WF21) water will
be needed tor injection. The estimated unit cost of WF21 water is $600 per at. It
is estimated that on average 20% of WF21 water is eventually used as a potable
supply which reduces the purchase of necessary imported water. A savings of
20% of WF21 water cost minus the replenishment assessment received will be
realized.
Both of these savings have been adjusted down to account f~r the effects of each
other so that savings were not double counted.
Table 3 provides a marginal cost analysis for constructing the GAP2 Newport Beach
portion after the effects of the potential Irvine Ranch/Newport Beach MOU are considered.
The MOU causes three changes to Table 2 which are:
1. The Newport Beach Retrofit cost is reduced to $600,000 because IRWD will pay
$500,000 of this estimated expense. In addition the City of Newport Beach will take the
lead in securing the six necessary end user agreements which will save significant amounts
of District staff time. ·
2. Water Sales have been reduced by the amount of money that will be paid to IRWD
when their water is being used which is $45 per acre-foot.
3. Savings of approximately $152,760 will be realized by OCWD by shutting down the
GAP plant for a portion of thE! year when IRWD water is being taken.
Table 4 estimates the benefits of constructing the Huntington Beach portion of GAP2.
Attachment A
TABLE 1
GREEN ACRES PROJECT (PHASE 2)
Green Acres Project -Phase 2
Planned Users
Huntington Beach
1. Seacliff Golf Course
2. Meadowlark Golf Course
3. Huntington Central Park
4. Holly Seacliff Development
4. Langenbeck Park
5. Murdy Park
Subtotal
Future Undeveloped Sites:
7. Bolsa Chica Development (Yr. 2000)
8. Harriett M. Wieder Regional Park (Yr. 2002)
Subtotal
Newport Beach
1. Big Canyon Golf Course
2. Newport Beach Country Club
'3. Eastbluff Community Greenbelt
4. COM High School Field
5. Bonita Creek Park
6. Eastbluff City Park
Subtotal
Huntington Beach Total
Newport Beach Total
Phase 2 Total
Ultimate
Demand (AFNr.)
338
·222
157
99
37
--1fL
872
107
105
212
300
288
155
39
27
~
827
1,084
827
1,911
• Day time user (i.e .• receives all water between 6 a.m. and 9 p.m.).
(5121196)
Attachment A
TABLE2
GREEN ACRES -PHASE II -NEWPORT BEACH
YEAR 2001 MARGINAL UNIT COST ESTIMATE
Total Year 2001 Water Demands
I. ESTIMATED 1997 CAPITAL COST
Huntington Beach Pipeline
Newport Beach Pipeline
Santa Ana Reservoir & Pumpstation
Sub total
827 afy
$0
$4,200,000
$775,185
$4,975,185
Amortized annual state loan payments ......................... ... . ... . $328,258
at 2.8% over 20 years
OCWD's Huntington Beach Retrofits
Newport Beach Retrofits
Sub Total
$0
$1, 100,000
$1,100,000
Amortized annual debt payments ......................................... $90,180
at 6.5% over 25 years
Total Capital Cost $6,075, 185
Total Annual Debt Payments ................................................ $418,437
II. ESTIMATED YEAR 2001 ANNUAL OPERATION
& MAINTENANCE COST 11>
Huntington Beach Pipeline
Newport Beach Pipeline
Santa Ana Reservoir
Project Plant & Reservoir pumping
Subtotal Annual O&M cost
$0
$9,921
$2,295
$106,980
$119,196
ANNUAL PROJECT COST
ANNUAL UNIT COST
Ill. PROJECT REVENUES
Water Sales 12> 827 x $217
MWD Subsidy 827 x $250
Revenues Subtotal
$179,429
$206.750
$386, 179
ANNUAL PROJECT COST
ANNUAL UNIT COST
IV. PROJECT COST SAVINGS
Decreased purchase of import recharge water
Decreased injection of water factor 21 water
(3)
(4)
$537,633
$650
$151,454
$183
$96 /af
$71 /af
$167 /af
!TOTAL ANNUAL NET UNIT COST $17
!UNIT COST B/C RATIO 0.91
(1) Inflation factor 4.0%
(2) Gap water sold at 80% of groundwater rate, inflated to year 2001
(3) 60°.(, of year 2001 estimated recharge cost to OCWD -.60 x ($290 SS rate -$130 R.A.)
(4) 15% of Water Factory 21 Injection water -.15 x ($600/af -$130 R.A.)
Attachment A 07/12/96
TABLE 3
GREEN ACRES -PHASE II -NEWPORT BEACH
YEAR 2001 MARGINAL UNIT COST ESTIMATE
Total Year 2001 Water Demands
I. ESTIMATED 1997 CAPITAL COST
Huntington Beach Pipeline
Newport Beach Pipeline
Santa Ana Reservoir & Pumpstation
Sub total
827 afy
$0
$4,200,000
$775,185
$4,975, 185
Amortized annual state loan payments .................................. .
at 2.8% over 20 years
OCWD's Huntington Beach Retrofits
Newport Beach Retrofits
Newport Beach Contribution
Sub Total
$0
$1, 100,000
{$500,000)
$600,000
Amortized annual debt payments ........................................... .
at 6.5% over 25 years
Total Capital Cost $5,575, 185
Total Annual Debt Payments ................................................. .
II. ESTIMATED YEAR 2001 ANNUAL OPERATION
& MAINTENANCE COST (1)
Huntington Beach Pipeline
Newport Beach Pipeline
Santa Ana Reservoir
Project Plant to Produce Water
Subtotal Annual O&M cost
$0
$9,921
$2,295
$106,980
$119,196
ANNUAL PROJECT COST
Ill. PROJECT REVENUES
Water Sales (2)
Lost Water Sales (3)
MWD Subsidy
ANNUAL UNIT COST
827 x
1,694 x
827 x
Revenues Subtotal
$217
($45)
$250
$179,429
($76,226)
$206,750
$309,953
ANNUAL PROJECT COST
ANNUAL UNIT COST
IV. PROJECT COST SAVINGS
Decreased purchase of import recharge water (4)
Decreased injection of water factor 21 water (5)
$96 /af
$71 /af
$328,258
$49,189
$377,447
$496,643
$601
$186,690
$226
$167 /af which ='s $137,696
Shut down of GAP for 4 months savings
late RATIO
(1) Inflation fac4.0%
(2) Gap water sold at 80% of groundwater rate, inflated to year 2001
(3) Water sales to IRWD during the winter for their water per MOU
(4) so•.4 of year 2001 estimated recharge cost to OCWD -.60 x ($290 SS rate -$130 R.A.)
(5) 15% of Water Factory 21 Injection water-.15 x ($600faf -$130 R.A.)
Attachment A
$152,760
1.56
07/12/96
TABLE4
GREEN ACRES -PHASE II -HUNTINGTON BEACH
YEAR 2000 MARGINAL UNIT COST ESTIMATE
Total Year 2001 Water Demands
I. ESTIMATED 1997 CAPITAL COST
Huntington Beach Pipeline
Newport Beach Pipeline
Santa Ana Reservoir & Pumpstation
Sub total
1,084 afy
$5,360,000
$0
$0
$5,360,000
Amortized annual state loan payments ................................... $353,647
at 2.8% over 20 years
OCWD's Huntington Beach Retrofits
Previous Huntington Beach pipeline work
Newport Beach Retrofits
Sub Total
$350,000 (1)
$1,900,000
$0
$2,250,000
Amortized annual debt payments ........................................... $184,458
at 6.5% over 25 years
Total Capital Cost $7,610,000
Total Annual Debt Payments ························-·-······················ $538, 106
II. ESTIMATED YEAR 2001 ANNUAL OPERATION
& MAINTENANCE COST l2l
Huntington Beach Pipeline
Newport Beach Pipeline
Santa Ana Reservoir
Project Plant & Reservoir pumping
Subtotal Annual O&M cost
$29, 156
$0
$0
$140,226
$169,382
ANNUAL PROJECT COST
ANNUAL UNIT COST
Ill. PROJECT REVENUES
Water Sales (3)
MWD Subsidy
IV. PROJECT COST SAVINGS
1,084 x
1,084 x
Revenues Subtotal
$217
$250
$235,189
$271,000
$506,189
ANNUAL PROJECT COST
ANNUAL UNIT COST
Decreased purchase of import recharge water <•>
Decreased injection of water factor 21 water (SJ
$707,488
$653
$201,299
$186
$96 lat
$71 /af
$167 /af
!TOTAL ANNUAL NET UNIT COST $19
!UNIT COST B/C RATIO 0.90
(1) Assumes HB will pay 50% of estimated retrofit cost of $700,000
(2) Inflation factor 4.0%
(3) Gap water sold al 80% of groundwater rate, Inflated to year 2001
(4) 75°.4 of year 2001 estimated recharge cost to OCWD -.60 x ($290 SS rate -$130 R.A.)
(5) 20% of Water Fa.ctory 21 Injection water -.15 x ($600/af-$130 R.A.)
Attachment A 07/12/96
~ )>
0 :t s: m z
-f m
BUDGET EFFECTS OF IRWD INTERTIE MOU AND
CONSTRUCTION OF GAP PHASE II INTO NB
Item
Capital Improvement
Program (funds
borrowed from State)
Debt Service on State
Loan
OCWD Capital Cost
Annual Maintenance .... . ....... _.. ~
Project Revenues
(water sales & MWD
Subsidy)
Project Savings {less
water purchase &
WF21 injection)
GAP Shutdown
Savings
This Year (1996-97) Next Year (19.97-98)
$0 $5,575,185
~--,,. l"'#'lo • ... .. .... • ....
$0
$0
$0
,.,,.. •• , ....... /'.A ......... ~ ~~ .............
$0
$0
$0
•••••••••••••·-~•••••••••••••• •• ' ••••••• •••••••~•••••••••••••••••••••••••••••••• •••••••••••••••••••••••••••••••·•••••••••·•••u•••••••••••••••••••••••••••••••••••••••••••t••••••••••••••••••••••••
Net Effect to District
Potential RA Reduction
Future Years
Annual
($328,258)
($49,189)
($119,196)
$309,953
$137,696
$152,760
$103,766
$0.33
~ > 0 :c
3: m z -t m
BUDGET EFFECTS OF CONSTRUCTING GAP PHASE II INTO HB
Item
Capital Improvement
Program (funds
borrowed from State)
Debt Service on State
Loan
OCWD Capital Cost
Annual Maintenance
Project Revenues
(water sales & MWD
Subsidy)
Project Savings (less
water purchase &
WF21 injection)
Net Effect to District
Potential RA Increase
This Year (1996-97)
$0
$0
$0
$0
$0
$0
Next Year (1997-98)
$7,610,000
Future Years
Annual
($353,647)
($184,458)
($169,382)
$506,189
$181,028
($20,270)
$0.07
CJ Written Report
CJ Overheads
CJ Slides
CJ Flip Charts
Originator~ Department Head Sign Off
Anticipated Time ; r-..
FINANCE, ADMIN ISTRATION AND HUMAN
RESOURCES COMMITTEE
FAHR96-48:
Summary
AGENDA FOR
AUGUST 7, 1996
Firearms and Weapons Policy
With acts of violence in the workplace becoming increasingly more prevalent in today's
society, staff believes it would be prudent to adopt a firearms and weapons policy. The
proposed policy would prohibit firearms, explosives, and knives on Districts' premises, in
Districts' vehicles, in private vehicles parked on Districts' property and in the possession
of Districts' employees while on duty or performing related business assignments.
The exact text of the policy would read as follows:
The Sanitation Districts are firmly committed to providing a workplace that is safe,
secure and free from threats or acts of violence. In keeping with this commitment, the
Districts prohibit weapons such as firearms, explosives, and knives on Districts'
premises, in Districts' vehicles, in private vehicles parked on Districts' properly and in
the possession of Districts' employees while on duty or performing related business
assignments. Knives traditionally used as tools, are only considered weapons when
used in a threatening manner. Knives not reasonably or traditionally used as tools for
Districts' work are considered weapons.
Employees are required to report any incident involving weapons to their supervisor. An
investigation of the matter will immediately occur and Districts' management will take
appropriate action, which will include having the weapon removed, removing the
employee from Districts' premises and imposing disciplinary action up to and including
termination against any employee who violates this policy.
Recommendation
Approve Resolution No. 96-_ amending Resolution No. 95-105.
J:\WPDOC\FIN\CRANE\FPC.MTG\FAHR.96\COVERS.96\FAHR96.48
Format
o Written Report
o Overheads
o Slides
o Flip Charts
(12):
Summary
Department Head Sign
Anticipated Time -1..Mi!h._
FINANCE, ADMINISTRATION AND HUMAN
RESOURCES COMMITTEE
AGENDA FOR
AUGUST 7, 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.
-:-:-_-_ .. -·:-:-:-:-:-·-·
··NOVEMBER
Consideration of Annual Review of the Districts' Investment Policy
Consideration of RFP for Classification Studies
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 Broker-of-record for Property and Personnel Insurances
Consideration of Meet-and-Confer Process and Status
Consideration of Commercial Bank Selection
Consideration of First Quarter Investment Program Update
Consideration of First Quarter Training Program Update
Consideration of First Quarter Budget & Performance Review
Consideration of Annual Financial Report (CAFR)
Consideration of Results of Broadbanding Study
Consideration of Meet-and-Confer Process and Status .. . .
Staff Recommendation
Information only item.
J:IWPDOCIFIN\CRANE\FPC.MTG\FAHR.96\COVERS.96\CALEN8.96