The URL can be used to link to this page

Home My WebLink About1996-11-13. I -~- 1 { f 1ee. of ~he Secretary 1 • . u)nly Sanitat1an District(s) ots ~.i3 -~t<?,'4ll 1a ,py NOV 2 01996 DRAFT /J_ & MINUTES OF FINANCE, County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 By ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Wednesday, November 13. 1996, 5:30 P.M. A meeting of the Finance, Administration and Human Resources Committee of the County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California was held on November 13, 1996 at 5:30 p.m., at the Districts' Administrative Offices. 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 Burnie Dunlap James Flora John M. Gullixson Wally Linn Thomas Saltarelli Roger R. Stanton, Vice Chair William G. Steiner Peer Swan, Vice Joint Chair Committee Directors Absent : John C. Cox, Jr. (PJC) Other Directors Present: None Staff Present: Donald F. McIntyre, General Manager Judith A. Wilson, Assistant General Manager Mike Peterman, Director of Human Resources Gary Streed, Director of Finance Bob Ooten, Director of Operations & Maintenance Michelle Tuchman, Director of Communications Steve Kozak, Financial Manager Mike White, Controller Linda Eisman, Training Manager Greg Mathews, Principal Admin. Analyst Marc Dubois, Contracts/Purchasing Manager Linda Heller, Purchasing Division Secretary Lenora Crane, Committee Secretary Others Present: Tom Woodruff, General Counsel Russ Patton, MOU Consultant Susan Cotton, Money Matters Chuck Acocello, Moreland & Associates Mike Moreland, Moreland & Associates Kristie Thomas, Moreland & Associates Ruthann Moomey, Callan Associates, Inc. APPOINTMENT OF A CHAIR PRO TEM No appointment was necessary. PUBLIC COMMENTS No comments were made. Minutes of Finance, Admi1 ... hd Human Resources Committee Page 2 November 13, 1996 APPROVAL OF MINUTES It was moved, seconded and duly carried to approve the draft minutes of the October 9, 1996 meeting of the Finance, Administration and Human Resources Committee. REPORT OF THE COMMITTEE CHAIR The Chair advised that Director Collins had a few items to report. Director Collins updated the Committee on two issues: • Director Collins and Nancy Wheatley met with SAWPA regarding the terms of the proposed agreement with them. SAWPA represents several wastewater collection agencies east of us. The agreement will go before the Joint Boards in the near future. • A few weeks ago L.AFCO had an item on their agenda to restructure the Districts. After contacting them regarding this issue, they have reconsidered and will give the Districts some time to reorganize on our own. The Districts have until late Spring to follow up with them on this issue. REPORT OF THE GENERAL MANAGER The General Manager indicated he would be reporting to the Committee in closed session on the status of the disciplinary actions which are the result of the recent workplace investigations. REPORT OF ASSISTANT GENERAL MANAGER -ADMINISTRATION The Assistant General Manager of Administration reported last month that revenues were about $2 million below budget projections. After investigation, she has found the following: • Property Taxes There has been a decrease in revenue from property taxes, due to an increase in the assessment appeals process. Assessed valuation continues to be relatively flat. Districts 1, 2, 3, 6, 7 and 11 all had decreases in assessed valuation. The only Districts with significant increases in assessed valuation were Districts 13 and 14, however, the Districts receive no property tax allocation from them. (District 5 had a 1 % increase in assessed valuation.) • User Fees The other part of the shortfall is due to recent actions taken by firms such as Ad Valorem and Revenue Enhancement who are reviewing charges on clients' property tax bills for a percent of the savings. These firms have filed over fifty claims in the past year-and-a-half, representing clients such as Fedco and Price Club. Total refunds to date are approximately $1.1 million. The companies they represent are generally companies with large square footage and low water usage. Efforts to replace the current user fee schedule with one based on categories of land use should result in more accurate billings and fewer claims filed. ,.---,., \ Minutes of Finance, Adm,. ~nd Human Resources Committee Page 3 November 13, 1996 Judy Wilson also advised, with the passage of Proposition 218 in the November election, General Counsel has been asked to take a careful look at the initiative. It appears that we will need to do the required notice, even if we are merely extending the current user fee schedule. The effective date of the initiative is July 1997. The Districts should adopt a new fee schedule in the spring to avoid the notification expense. General Counsel will have a report for the December FAHR meeting. REPORT OF ASSISTANT GENERAL MANAGER-OPERATIONS The Assistant General Manager of Operations had no report. REPORT OF THE DIRECTOR OF FINANCE Mr. Streed advised that two handouts were placed before the Committee. One of the handouts was from Ruthann Moomey of Callan Associates. Ms. Moomey will give a presentation regarding the Quarterly Investment Portfolio Report and, specifically, will review the new policy duration of the long-term portfolio. The other handout was prepared by Gary Streed which addresses a recent article in the Orange County Register. The handout which Mr. Streed prepared contains correct figures and information which was not accurately stated in the newspaper article which depicted Special Districts as being "flushed with cash." Mr. Streed advised that the Committee's January 1997 meeting is currently scheduled for January 8, 1997. Since the New Year holiday falls on the first Wednesday of the month, the OMTS meeting is being moved to January 8. In order to avoid a conflict, Mr. Streed requested the Committee's permission to move the FAHR meeting to January 15. The Committee had no objection to moving the meeting date. Gary Streed reported that the Districts' daily COP rates were included in the agenda package mailed to the Committee. Since the mailing, as usually happens, the rates have decreased and are now down to 3.40 and 3.50 percents. REPORT OF THE DIRECTOR OF HUMAN RESOURCES The Director of Human Resources had no report. REPORT OF THE DIRECTOR OF GENERAL SERVICES ADMINISTRATION The Director of General Services had no report. REPORT OF THE DIRECTOR OF COMMUNICATIONS The Director of Communications reported that the second Planning Advisory Committee will be held November 14, at the Districts from 9:00 a.m. to 11 :00 a.m. Recent articles which appeared in the Times and Register regarding our workplace investigation were published on different dates. Calls were made to the newspapers, but only one reporter from the Times returned a call. Minutes of Finance, Admir, .,1d Human Resources Committee Page4 November 13, 1996 On November 6, 1996, the City Managers Association met at the Districts. There were 37 guests. Dave Ludwin, Ed Hodges and Linda Eisman participated. The next meeting of the Ad Hoc Committee re Strategic Plan is scheduled for Thursday, December 5, at 5:00 p.m. The next meeting of the Rate Advisory Committee is scheduled for Thursday, December 12, at 9:00 a.m. REPORT OF GENERAL COUNSEL General Counsel had no report. DISCUSSION ITEMS (Nos. 1-9) 1. FAHR96-64 2. FAHR96-65: 3. FAHR96-66: RECEIVE AND FILE TREASURER'S REPORTS FOR THE MONTH OF OCTOBER 1996 (All Districts) MOTION: It was moved, seconded and duly carried to receive and file the Treasurer's Report for the month of October 1996, and forward to the Joint Boards. RECEIVE AND FILE QUARTERLY INVESTMENT MANAGEMENT PROGRAM REPORT FOR THE PERIOD JULY 1 THROUGH SEPTEMBER 30, 1996 (All Districts) COMMITTEE DISCUSSION: Steve Kozak and Ruthann Moomey gave the presentation. During discussion, it was agreed to allow Mr. Kozak to develop program alternatives for the possible extension of maturities and duration benchmarks for the Districts' Long-Term Investment Portfolio. The Committee further requested that Tom Woodruff supplement the staff report with copies of the sections of the Government Code which relate to the types of investments that the Committee has responsibility for. The Committee requested that this item be brought before them in January. MOTION: It was moved, seconded and duly carried to receive and file this information-only report. RESOLUTION ADOPTING A PURCHASING SYSTEM AND POLICIES AND PROCEDURES GOVERNING PURCHASES OF SUPPLIES, SERVICES AND EQUIPMENT AND REPEALING RESOLUTION NO. 86-81 (All Districts): The Contracts/Purchasing Manager and General Counsel recommend the adoption of a new purchasing resolution to streamline processes, reduce expenditures and provide increased staff efficiency. MOTION: It was moved, seconded and duly carried to recommend the Joint Boards adopt a new Purchasing Resolution repealing Purchasing Resolution No. 86-81. ,-------.., Minutes of Finance, Adm,. 1nd Human Resources Committee Page 5 November 13, 1996 4. FAHR96-67: 5. FAHR96-68: 6. FAHR96-69: EMPLOYMENT STATUS REPORT (All Districts): Total head count for October 1996 at the Districts. COMMITTEE DISCUSSION: Mike Peterman advised that total head count was 597.25 at the time this report was prepared. The numbers have changed in the last couple of weeks. There have been ten resignations. Don McIntyre interjected that the actual figure is now 588 and will be going down to 562. The early retirement figures are not included in this count, since those are expected to take place in January, February and March 1997. Judy Wilson advised that 8 people are expected to retire. The Committee requested staff to generate a report which shows changes in the budget due to accelerated retirement and how these changes affect the work plan with a compressed staff. MOTION: It was moved, seconded and duly carried to receive and file the Employment Status Report. SELECTION OF DISTRICTS' COMMERCIAL BANK (All Districts). MOTION: It was moved, seconded and duly carried to recommend that the Joint Boards approve the selection of Union Bank of California to serve as the Districts' commercial bank for a three (3) year period commencing on January 1, 1997, with the Districts' option to renew for an additional two (2) years thereafter. RECEIVE, APPROVE AND FILE THE DISTRICTS' COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FOR THE YEAR ENDED JUNE 30, 1996 THAT WAS PREPARED BY STAFF AND AUDITED BY MORELAND & ASSOCIATES, CERTIFIED PUBLIC ACCOUNTS; ANNUAL MANAGEMENT LETTER; AUDITOR'S REPORT TO FAHR COMMITTEE; AND THE APPROPRIATIONS LIMIT REPORT; AND FORWARD THE COMPREHENSIVE ANNUAL FINANCIAL REPORT TO THE JOINT BOARDS {All Districts): COMMITTEE DISCUSSION: Mike Moreland addressed the Committee's questions and advised that the areas that the audit found the Districts not to be in compliance with are due to new requirements of the California Government Code which went into effect on January 1. These areas have to do with rendering reports within 30 days. He stated that this is not unusual because even smaller entities cannot get the information in time. It is important to recognize these are new legislations and staff is trying to follow them. Staff initially had problems with the new requirements and efforts have been made to ensure these violations do not happen in the future. Staff advised that the Investment Policy has been adopted annually and will also come into compliance by being reviewed on time. MOTION: It was moved, seconded and duly carried to receive, approve and file: 1.) Comprehensive Annual Financial Report for the year ended June 30, 1996; 2.) the annual Management Letter and the Auditor's Report to the Finance, Administrative and Human Resources Committee; 3.) and the Appropriations Limit Report; and 4.) forward the Comprehensive Annual Financial Report to the Joint Boards. Minutes of Finance, Admh. ..ild Human Resources Committee Page 6 November 13, 1996 7. FAHR96-70: 8. FAHR96-71: 9. FAHR96-72: CLOSED SESSION REVIEW, APPROVE AND FORWARD THE 1995-96 FINANCIAL AND OPERATIONAL REPORT FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 1996 TO THE JOINT BOARDS (All Districts). COMMITTEE DISCUSSION: Mike White and Greg Mathews reported on the District's financial and operational status. MOTION: It was moved, seconded and duly carried to approve and forward the 1996-97 Financial and Operational Report for the First Quarter Ended September 30, 1996 to the Joint Boards. PROGRESS REPORT ON IMPLEMENTATION OF THE NEW FINANCIAL INFORMATION SYSTEM (FIS) (All Districts). MOTION: It was moved, seconded and duly carried to receive and file this information-only report. RECEIVE AND FILE STAFF SUMMARY REPORT ON TRAINING FOR FIRST QUARTER FISCAL YEAR 1996-97 (All Districts). MOTION: It was moved, seconded and duly carried to receive and file the staff summary report on training for first quarter fiscal year 1996-97. 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 item that is specified as Items (8)(b)(1) on the published Agenda. The Committee convened in Closed Session at 7:30 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 listed under Closed Session as items (a)(1) and (a)(2). At 8:42 p.m., the Committee reconvened in regular session. OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS. IF ANY There were none. MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. ~ Minutes of Finance, Adm. ~nd Human Resources Committee Page 7 November 13, 1996 MATTERS WHICH A DIRECTOR MAY WlSH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. FUTURE MEETING DATES The next Finance, Administration and Human Resources Committee Meeting is scheduled for Wednesday, December 11, 1996. ADJOURNMENT The meeting was adjourned at 8:45 p.m. Submitted by: ~~ Finance, Administration and Human Resources Committee Secretary H:\WP .DTA \FIN\221 0\CRANE\FPC.MTG\FAHR.96\1996.MIN'MFAHR11.96 STATE OF CALIFORNIA) ) ss. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Notice and the Agenda for the Finance, Administration and Human Resources meeting held on November 13, 1996, was duly posted for public inspection in the main lobby of the Districts' offices on November 6, 1996. IN WITNESS WHEREOF, I have hereunto set my hand this 13th day of November, 1996. Posted: By: of the Boards of Directors of County , 3, 5, 6, 7, 11, 13 & 14 of Orange \_,·-A_tt.//)J/; __ ~ ____ &_, 1996, 3 ,· 3 <A.M6v &~ Signature H:IWP.DTAIFIN\2210\CRANEIFPC.MTGIFAHR.96\CERT.POS\CERTPO11.96 phone: (714] 96'2-2.411 malling addre&S: RO. Box 81 ~:7 Fountain ValliaY, CA 9272&8127 street; address: 10844 Ellis Avenue Fountain Vair~, CA 927!)8-70~ 8 Manibel' Agencfes • Cities AntJhefm Brea Btiena Park G.fprtiss Fovntililln Valley Ful/arcon Runtington Be~sh lrvirre. La Habra UI Palma l os A,/arnlto,s Ne""(port Beach arat1ge Pfacenllla Sanes Ana Ses.l BFJach stancan Tustin V;'/la Pavk Yorba Linda County of Orange Sanitarv Districts Costs Mess Garden Grave Midway City Water Districts Irvine RanG/1 COUNTY JANITATION DISTRICTS OF •RJGE COUNTY, CALIFORNIA November 6, 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, NOVEMBER 13. 1996. 1996 -5:30 P.M. DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 A regular meeting of the Finance, Administration and Human Resources Committee of the Joint Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, will be held at the above location, time and date. A Public Wastewater and Environmental Management Agency Committed to Protecting the Environment Since 1954 November 6, 1996 FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE TENTATIVELY SCHEDULED MEETING DATES Finance, Administration and Human Resources Committee Meetings Joint Board Meetings November November 13, 1996 November 20, 1996 December December 11 , 1996 December 18, 1996 January January 8, 1997 January 22, 1997 February February 12, 1997 February 26, 1997 March March 12, 1997 March 26, 1997 April April 9, 1997 April 23, 1997 May May 14, 1997 May 28, 1997 June June 11, 1997 June 25, 1997 July July 9, 1997 July 23, 1997 August August 13, 1997 August 27, 1997 September September 10, 1997 September 24, 1997 October October 8, 1997 October 22, 1997 November November 12, 1997 November 19, 1997 December December 10, 1997 December 17, 1997 AGENDA REGULAR MEETING OF THE FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13AND 14 OF ORANGE COUNTY, CALIFORNIA WEDNESDAY, NOVEMBER 13, 1996 AT 5:30 P.M. ROLL CALL ADMINISTRATIVE OFFICES 10844 Ellis Avenue Fountain Valley, California 92708 APPOINTMENT OF CHAIR PRO TEM, IF NECESSARY AGENDA In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the Districts' Administrative Offices not less than 72 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the Office of the Board Secretary. In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an emergency item or that there is a need to take immediate action which need came to the attention of the Committee subsequent to the posting of the agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. PUBLIC COMMENTS All persons wishing to address the Finance, Administration and Human Resources Committee on specific agenda items or matters of general interest should do so at this time. As determined by the Chair, 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). November 13, 1996 RECEIVE, FILE AND APPROVE MINUTES OF PREVIOUS MEETING Rec©mmended Action: Receive, file and approve draft minutes of the October 9, 1996, Finance, Administration and Human Resources Committee meeting. REPORT OF COMMITTEE CHAIR REPORT OF GENERAL MANAGER REPORT OF ASSISTANT GENERAL MANAG.liR-ADMINISTRATION REPORT OF ASSISTANT GENERAL MANAGER-OPERATIONS REPORT OF DIRECTOR OF FINANCE REPORT OF DIRECTOR OF HUMAN RESOURCES REPORT OF DIRECTOR OF GENERAL SERVICES ADMINISTRATION REPORT OF DIRECTOR OF COMMUNICATIONS REPORT OF GENERAL COUNSEL DISCUSSION ITEMS -(Items 1-9) 1. FAHR96-64: RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF OCTOBER 1996 (All Districts) RECOMMENDED ACTION: Receive and file Treasurer's Report for the month of October 1996. (Gary Streed -2 minutes) 2. FAHR96-65: RECEIVE AND FILE QUARTERLY INVESTMENT MANAGEMENT PROGRAM REPORT FOR THE PERIOD JULY 1 THROUGH SEPTEMBER 30, 1996 (All Districts) RECOMMENDED ACTION: Receive and file this information-only report. (Steve Kozak, Ruthann Moomey -10 minutes) 3. FAHR96-66: RESOLUTION ADOPTING A PURCHASING SYSTEM AND POLICIES AND PROCEDURES GOVERNING PURCHASES OF SUPPLIES, SERVICES AND EQUIPMENT AND REPEALING RESOLUTION NO. 86-81 (All Districts): The Contracts/Purchasing Manager and General Counsel recommend the adoption of a new purchasing resolution to streamline processes, reduce expenditures and provide increased staff efficiency. 2 November 13, 1996 RECOMMENDED ACTION: Adopt new Purchasing Resolution repealing Purchasing Resolution No. 86-81. (Marc Dubois -10 minutes) 4. FAHR96-67: EMPLOYMENT STATUS REPORT (All Districts): Total head count for October 1996 at the Districts. RECOMMENDED ACTION: 1) Receive and file the Employment Status Report. (Mike Peterman -5 minutes) 5. FAHR96-68: SELECTION OF DISTRICTS' COMMERCIAL BANK (All Districts). RECOMMENDED ACTION: Approve the selection of Union Bank of California to serve as the Districts' commercial bank for a three (3) year period commencing on January 1, 1997, with the Districts' option to renew for an additional two (2) years thereafter. (Mike White -10 minutes) 6. FAHR96-69: RECEIVE, APPROVE AND FILE THE DISTRICTS' COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FOR THE YEAR ENDED JUNE 30, 1996 THAT WAS PREPARED BY STAFF AND AUDITED BY MORELAND & ASSOCIATES, CERTIFIED PUBLIC ACCOUNTS; ANNUAL MANAGEMENT LETTER; AUDITOR'S REPORT TO FAHR COMMITTEE; AND THE APPROPRIATIONS LIMIT REPORT; AND FORWARD THE COMPREHENSIVE ANNUAL FINANCIAL REPORT TO THE JOINT BOARDS (All Districts): RECOMMENDED ACTION: Staff recommends the Committee receive, approve and file the Comprehensive Annual Financial Report for the year ended June 30, 1996, annual Management Letter; Auditor's Report to the Finance, Administrative and Human Resources Committee; and the Appropriations Limit Report; and forward the Comprehensive Annual Financial Report to the Joint Boards. (Mike White, Mike Moreland -20 minutes) 7. FAHR96-70: REVIEW, APPROVE AND FORWARD THE 1995-96 FINANCIAL AND OPERATIONAL REPORT FOR THE FIRST QUARTER ENDED SEPTEMBER 30, 1996 TO THE JOINT BOARDS (All Districts). RECOMMENDED ACTION: Staff recommends that the Committee review, approve and forward the 1995-96 Financial and Operational Report for the First Quarter Ended September 30, 1996 to the Joint Boards. (Mike White, Greg Mathews -20 minutes) 3 November 13, 1996 8. FAHR96-71: PROGRESS REPORT ON IMPLEMENTATION OF THE NEW FINANCIAL INFORMATION SYSTEM (FIS) (All Districts). RECOMMENDED ACTION: Receive and file this information-only report. (Mike White -5 minutes) 9. FAHR96-72: RECEIVE AND FILE STAFF SUMMARY REPORT ON TRAINING FOR FIRST QUARTER FISCAL YEAR 1996-97 (All Districts). RECOMMENDED ACTION: Receive and file staff summary report on training for first quarter fiscal year 1996-97. (Linda Eisman -10 minutes) CLOSED SESSION During the course of conducting the business set forth on this agenda as a regular meeting of the Committee, the Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employee actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Committee during a permitted closed session and are not available for public inspection. At such time as final actions are taken by the Committee on any of these subjects, the minutes will reflect all required disclosures of information. (a) Convene in closed session. (1) Confer with Districts' Negotiator re meet and confer; and negotiations for the establishment of salaries, compensation or fringe benefit (Government Code Section 54957 .6). (2) Workplace Investigation (Government Code Section 54957). (b) Reconvene in regular session. (c) Consideration of action, if any, on matters considered in closed session. OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING 4 November 13, 1996 MA TIERS WHICH A bl RECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT FUTURE MEETING DATES The next Finance, Administration and Human Resources Committee Meeting is scheduled for December 11, 1996. NOTICE TO COMMITTEE MEMBERS If you have any questions on the agenda or wish to place any items on the agenda, Committee members should contact the Committee Chair or Secretary ten days in advance of the Committee meeting. Committee Chair: Comm. Secretary: Asst. Comm. Secretary: le George Brown Lenora Crane Frankie Woodside (310) 431-2185 (714) 962-2411, Ext. 2501 (714) 962-3954 (FAX) (714) 962-2411, Ext. 3001 H:\WP .DTA\FIN\221 0\CRANE\FPC.MTG\FAHR.96\AGENDA.96\AGENDA 11.96 5 ROLL CALL FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING DATE: November 13. 1996 COMMITTEE MEMBERS GEORGE BROWN (Chair) ROGER R. STANTON (Vice Chair) JOHN C. COX (PJC) 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, DirectorofTech. Srvs. STEVE KOZAK, Financial Manager MIKE WHITE, Controller GREG MATHEWS, Principal Administrative Analyst MARC DUBOIS, Contracts/Purchasing Manager LINDA EISMAN, Training Manager BARBARA COLLINS, Senior Lab Analyst LENORA CRANE, Committee Secretary LINDA HELLER, Purchasing Division Secretary OTHERS TOM WOODRUFF, General Counsel DAN CASSIDY, MOU Consultant RUSS PATTON, MOU Consultant RUTHANN MOOMEY, Callan Associates, Inc. MIKE MORELAND, Moreland & Associates c: Penny Kyle L. Crane TIME: 5:30 P.M. ADJOURN: P.M. OMTS: PDC: FAHR: 11-13-96 EXEC: STEER: JT.BDS: ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGENl) ITEM TRANSMITTAL CONTACT FOR INFORMATION 2210, Gary G. Streed, Ext. 2500 Division No., Name, and Extension RECEIVE AND FILE DRAFT FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MINUTES FOR THE MEETING HELD OCTOBER 9, 1996. Recommended Action(s): 1. Receive and file draft Finance, Administration and Human Resources Committee minutes for the meeting held October 9, 1996. CEQA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on_ and Notice of Determination filed on _ BUDGET INFORMATION NIA CURRENT YEAR TOTAL BUDGETED AMT.: $ BUDGET AMOUNT SOURCE: Schedule/Line Item: NIA AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION ORIGINAL BID, PO, CONTRACT AMOUNT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent Limited Term CONCURRENCES: Date /01½Ab S ure Date D partment ead (Or Oesignee) t, --...._ ' ' ,,, . ~h l l c....:..,..___.-.. " Sign ure Date Assistant General Manager (Or Designee) DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET TO-DATE BUDGET BALANCE TOTAL EXPENDITURES (Total Budget plus Transfers) NIA NIA NIA CHANGE ORDERS, AMOUNT AMENDED PROJECT FUNDS PREV. REQUESTED THIS AMOUNT APPROVED AIT REQUIRES BOARD POLICY ACTION? NO YES NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: 1. Draft Minutes of FAHR Committee Meeting held 10-9-96. To Jt. Bds.: 1. ADDITIONAL INFORMATION (Background and/or Summary) Attached is a draft of the Finance, Administration and Human Resources Committee meeting minutes of October 9, 1996. These minutes were submitted to the Joint Boards at their October 23, 1996 meeting. GGS:lc c: Department Head AGM-Administration AGM-Operations General Manager H:\WP .OTA \FIN\2210\CRANE\FPC.MTG\FAHR.96\NOV.AIT\MIN1011 .96 Revision: 8/28/96 Page 2 of2 REVISED DRAFT MINUTES OF FINANCE, County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Wednesday, October 9, 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 September 11, 1996 at 5:30 p.m., at the Districts' Administrative Offices. ROLL CALL The roll was called and a quorum declared present, as follows: Committee Directors Present: George Brown, Chair John J. Collins, Joint Chair Burnie Dunlap John M. Gullixson Wally Linn Thomas Saltarelli Roger R. Stanton, Vice Chair William G. Steiner Peer Swan, Vice Joint Chair Committee Directors Absent : John C. Cox, Jr. (PJC) Jan Debay James Flora Other Directors Present: Sheldon S. Singer 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. Mike Peterman, Director of Human Resources Gary Streed, Director of Finance Michelle Tuchman, Director of Communications Mahin Talebi, Source Control Manager Steve Kozak, Financial Manager Mike White, Controller Linda Eisman, Training Manager Penny Kyle, Board Secretary Lenora Crane, Committee Secretary Others Present: Tom Woodruff, General Counsel APPOINTMENT OF A CHAIR PRO TEM No appointment was necessary. Minutes of Finance, Adr i and Human Resources Committe. Page2 October 9, 1996 PUBLIC COMMENTS No comments were made. APPROVAL OF MINUTES It was moved, seconded and duly carried to approve the draft minutes of the September 11, 1996 meeting of the Finance, Administration and Human Resources Committee. · REPORT OF THE COMMITTEE CHAIR The Chair had no report. REPORTOFTHEGENERALMANAGER The General Manager had no report. REPORT OF ASSISTANT GENERAL MANAGER-ADMINISTRATION The Assistant General Manager of Administration reported that in reviewing the Districts' portion of the County property taxes, she noticed they were significantly lower than what we predicted. Reassessments of parcels may be the reason for the lower than expected revenue. Ms. Wilson advised she will be investigating this further and expects to bring back a report to the Committee next month. REPORT OF ASSISTANT GENERAL MANAGER -OPERATIONS The Assistant General Manager of Operations had no report. REPORT OF THE DIRECTOR OF FINANCE The Director of Finance reported that the Districts' daily COP rates were included in the agenda package mailed to the Committee, and he would be presenting the Treasurer's Report for the months of August and September later in the meeting. REPORT OF THE DIRECTOR OF HUMAN RESOURCES The Director of Human Resources had no report. REPORT OF THE DIRECTOR OF GENERAL SERVICES ADMINISTRATION The Director of General Services had no report. ,, ,'\ ~ Minutes of Finance, Adi I. and Human Resources Committ.. Page 3 October 9, 1996 REPORT OF THE DIRECTOR OF COMMUNICATIONS The Director of Communications had no report. REPORT OF GENERAL COUNSEL General Counsel had no report. DISCUSSION ITEMS (Nos. 1-9) 1. FAHR96-55 RECEIVE AND FILE TREASURER'S REPORTS FOR THE MONTHS OF AUGUST AND SEPTEMBER 1996 (All Districts) COMMITTEE DISCUSSION: The Director of Finance provided the Committee with a hand-out report for the month of September which indicated the cash balance for September on the back of the report. Mr. Streed advised that the report has been enhanced to include a column for Estimated Yield for each investment type. Chair Brown stated he would be interested in the estimated yield for the Deferred Compensation investments on future reports. MOTION: It was moved, seconded and duly carried to receive and file the Treasurer's Report for the months of August and September 1996, and forward to the Joint Boards. 2. FAHR96-56: ESTABLISH ANNUAL FEES FOR MAILING AGENDA MATERIALS (All Districts): Board Secretary's Office recommends adoption of a resolution establishing fees for providing agenda-related materials to the general public. COMMITTEE DISCUSSION: In response to the Committee, Ms. Kyle indicated she is requesting a Board Resolution establishing an annual fee of $135 for the costs of mailing agenda- related materials to the general public. Newspapers will continue to receive their packages free of charge. Approximately 52 individuals are currently sent agenda packages on a monthly basis. One-time requests for individual agenda packages would be free of charge. Agenda notices and agendas will remain free of charge. Tom Woodruff advised this charge is legal and consistent with what other public agencies are charging. The Boards recently adopted a policy allowing up to 100 copies of public records to be provided free of charge, with a ten cents per copy charge over that amount. MOTION: It was moved, seconded and duly carried to recommend that the Boards adopt a resolution approving the establishment of Minutes of Finance, Ad. .J. and Human Resources CommittL .I Page 4 - October 9, 1996 annual fees for mailing agenda-related material to the general public; and that the Board Secretary report back in six months to apprise the Committee of any complaints to the Districts. 3_ FAHR96-57: RESULTS OF FINANCE DEPARTMENT CUSTOMER SERVICE SURVEY (All Districts): Staff Summary Report of the results of the Finance Department's Customer Service Survey conducted in August and September of this year. COMMITTEE DISCUSSION: Gary Streed reviewed the results of the Finance Department Customer Service Survey. In response to the Committee, Mr. Streed advised that the low 21 % response rate may indicate that most employees are satisfied, and many employees may find Finance to be somewhat mysterious to them and may not have bothered to respond. Mr. Streed reported that the response to question No. 4 concerning deferred compensation may be because some MOUs do not include matching funds for employees who participate in the plan. All managers in the Finance Department have been given copies of the survey response, and the results will be published in the employees' newsletter with a notation thanking those employees who participated. MOTION: It was moved, seconded and duly carried to receive and file this information-only item. 4. FAHR96-58: TEMPORARY DISCHARGE AGREEMENT WITH IRVINE RANCH WATER DISTRICT (IRWD) FOR THE DISCHARGE OF GROUNDWATER FROM THE EASTERN TRANSPORTATION CORRIDOR PROJECT TO THE DISTRICTS' SEWERAGE SYSTEM (District 14): Technical Services Department requests approval of a Temporary Discharge Agreement with IRWD for the discharge of groundwater by Silverado Constructors during the approximate two-year Eastern Transportation Corridor construction project. COMMITTEE DISCUSSION: Mr. Streed reported on this item. The Committee indicated its concern regarding Silverado discharging high flows and storm water during winter months into the Districts' system during peak flow periods, adding to the Districts' peak flow problem. The Committee was also concerned that all the conditions of the agreement have not been worked out prior to being brought before the Committee. Minutes of Finance, Ad.~. and Human Resources Committ1 l Page 5 October 9, 1996 MOTION: It was moved, seconded and duly carried to recommend that the Joint Boards authorize execution of Temporary Discharge Agreement with IRWD for the discharge of groundwater from Silverado Constructors during the approximate two-year Eastern Transportation Corridor construction project; and further recommends that District 14 be authorized, at their discretion, to request Silverado Constructors to stop pumping during peak flows. The staff was requested to include a copy of the agreement in the Joint Boards' agenda package. 5. FAHR96-59: APPROVE PROPOSED COST/BENEFIT TEMPLATE FOR ALL COST-SAVINGS OR INCOME-GENERATING CIP PROJECTS (All Districts). COMMITTEE DISCUSSION: Mr. Streed reported on this item. He advised that no inflation factor was built into the model at this time. The Committee felt an interest rate of return on projects should be included in the model. It was agreed that projects can be categorized as: 1) Cost saving/revenue generating; and 2) Non- revenue generating projects. MOTION: It was moved, seconded and duly carried to approve the proposed CosUBenefit Template, including interest rate of return, for all cost-savings or income-generating CIP Projects; to set an interest rate twice a year; considering this issue at the FAHR Committee every six months. 6. FAHR96-60: AMENDMENT TO THE FIRST AMENDED AND RESTATED AGREEMENT FOR UTILIZATION OF RECLAIMED WASTEWATER AGREEMENT, DATED JUNE 9, 1993, WITH ORANGE COUNTY WATER DISTRICT RE 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 DOES NOT EXCEED THE COSTS OF OPERATIONS AND MAINTENANCE (CURRENTLY $89/AF) (All Districts): MOTION: It was moved, seconded and duly carried to recommend that the Joint Boards: 1) Approve a tentative GAP water pricing agreement; and 2) Authorize the General Manager to enter into a final agreement with the OCWD in a form approved by General Counsel. Minutes of Finance, Adr. J and Human Resources Committc Page6 October 9, 1996 7. FAHR96-61: AMENDMENT NO. 3 TO THE AGREEMENT FOR PURCHASE AND SALE OF CAPACITY RIGHTS IN TREATMENT, DISPOSAL AND SEWER FACILITIES BETWEEN DISTRICTS 1, 2, 3, 5, 6, 7, 11 AND 13 AND DISTRICT 14 (All Districts): An amendment to exclude certain flows from the calculation of shares. COMMITTEE DISCUSSION: Finance Director Gary Streed reported that there would be no Districts-wide financial impact due to the proposed Amendment No. 3, and the Amendment negates the four-year cash-flow impacts of an early flow diversion by District 14. During discussion, it was noted that the City of Newport Beach requested that the Districts participate in this project. MOTION: It was moved, seconded and duly carried to recommend that the Joint Boards approve the proposed Amendment No. 3 to the Agreement for Purchase and Sale of Capacity Rights in Treatment, Disposal and Sewer Facilities between Districts 1, 2, 3, 5, 7, 11 and 13 and District 14. 8. FAHR96-62: EMPLOYMENT STATUS REPORT (All Districts): Total head count for September 1996 at the Districts. MOTION: It was moved, seconded and duly carried to receive and file the Employment Status Report. 9. FAHR96-63: COMMUNICATIONS SITE LEASE AGREEMENT WITH COX COMMUNICATIONS, LEASE NO. L-XXX (All Districts). COMMITTEE DISCUSSION: General Services Administration Director Ed Hodges advised that the proposed lease is expected to generate $1,500 per month in new revenue for the Districts, and recommended that a lease for a ten-year term and four, five-year, mutually agreeable extensions, be approved with Cox Communications. The Committee requested that staff make sure all insurance requirements are complied with and that the Districts' are not liable for any injuries to cable employees. Further discussion took place regarding the possibility of Cox Communications sub-leasing the lease site. The Committee felt a clause should be included in the agreement which will require Districts' approval of any sub-lease agreements with Cox Communications and which will include revenue sharing with the Districts, should a sub-lease agreement • Minutes of Finance, Ad. 1. and Human Resources Committ1l Page 7 October 9, 1996 CLOSED SESSION take place. Further concern was expressed regarding the aesthetics of the site, if additional towers are installed or equipment is placed on the pole by sub-leasers. The Committee requested that staff investigate if such conditions will be in compliance with local ordinances. MOTION: It was moved, seconded and duly carried to recommend that the Joint Boards approve a lease agreement with Cox Communications, with a prohibition clause included therein, which will require Districts' approval of any sub-lease agreements made by Cox Communications, and which will be subject to revenue sharing with the Districts, and compliance with local ordinances. 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 item that is specified as Items (8)(b)(1) on the published Agenda. The Committee convened in Closed Session at 6:40 p.m. Confidential Minutes of the closed session held by the Committee have been prepared in accordance with California Government Code Section 54957 .2 and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A report of actions taken will be publicly reported at the time the approved action becomes final re Agenda Item 8(b)(1 ). At 7:45 p.m., the Committee reconvened in regular session. OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS. IF ANY There were none. MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. Minutes of Finance, Adr. ,! and Human Resources Committe Page 8 October 9, 1996 FUTURE MEETING DATES The next Finance, Administration and Human Resources Committee Meeting is scheduled for Wednesday, November 13, 1996. ADJOURNMENT The meeting was adjourned at 7:48 p.m. Submitted by: Lenora Crane Finance, Administration and Human Resources Committee Secretary H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\1996.MIN\MFAHR10.96 OMTS: PDC: FAHR: 11-13-96 EXEC: STEER: JT.BDS: ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN[l ITEM TRANSMITTAL CONTACT FOR INFORMATION 2210, Gary G. Streed, Ext. 2500 Division No., Name, and Extension RECEIVE AND FILE REPORT OF DIRECTOR OF FINANCE (All Districts) Recommended Action(s): 1. Receive and file this information-only Report of Director of Finance. CEQA REVIEW: Project is Exempt: NOT APPLICABLE DATE OF MOST RECENT~ ACTION ON THIS SPECIFIC ITEM: Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on _ and Notice of Determination filed on _ BUDGET INFORMATION NIA CURRENT YEAR CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET TOTAL BUDGETED AMT.: BUDGET AMOUNT TO-DATE BUDGET BALANCE TOTAL SOURCE: EXPENDITURES (Total Budget plus Transfers) Schedule/Line Item: NIA NIA NIA NIA AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION ORIGINAL BID, PO, CHANGE ORDERS, AMOUNT AMENDED PROJECT CONTRACT FUNDS PREV. REQUESTED THIS AMOUNT AMOUNT APPROVED AIT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO REQUIRES BOARD POLICY ACTION? NO If YES, state number: _ Permanent Limited Term If YES, explain in ADDITIONAL INFORMATION section CONCURRENCES: ATTACHMENTS TO AGENDA (List) To Committee: 1. Graph -COP Rate History Report Date s ture Date To Jt. Bds.: 1. Department ead (Or Designee) ~"(~ U . ./J--1 i<A Sign t e Date Assistant General Manager (Or Designee) ADDITIONAL INFORMATION (Background and/or 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 graph shows 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. 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. GGS:lc c: Department Head AGM-Administration AGM-Operations General Manager H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\NOV.AIT\DIRFIN.RPT Revision: 8/28/96 Page 2 of 2 :c "C ;...:--C ro in > "C -I RATE(%) LU X m ro a. (") m 0 _.. N ~ .i,. en 0) CT r-0 0 0 0 0 0 0 '< :;:; 0 0 0 0 0 0 0 "Tl z 3-Apr-96 :5" )> LU i ::, z 0 (") 10-Apr-96 .!I> m _.. Iv _.. N ~ _.. 17-Apr-96 0 <D ;ii; _a> 0 24-Apr-96 N ~ en ex, ::5 "C ~ 1-May-96 s: -I m 8-May-96 :c en -I (0 15-May-96 .Q! r 22-May-96 -c I 29-May-96 LU :i" <D 5-Jun-96 ~ i (") <D CT 12-Jun-96 I 0 CT I !ll -c + 19-Jun-96 ~ <-26-Jun-96 --f :u m s: 3-Jul-96 0 :c -ro LU 10-Jul-96 CJ) ::, ' --f ' + 17-Jul-96 0 ' ~ )> 24-Jul-96 G) :::c C/l :E 31-Jul-96 m LU "C -c + 7-Aug-96 0 :::c C/l 14-Aug-96 --f 0 0 ~, 21-Aug-96 ::, C/l !J 28-Aug-96 4-Sep-96 11-Sep-96 18-Sep-96 25-Sep-96 2-Oct-96 9-Oct-96 16-Oct-96 23-Oct-96 30-Oct-96 MEETING DATE OMTS: PDC: FAHR: 11-13-96 EXEC: STEER: JT.BDS:11-20-96 DISTRICT NO. ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN'\ ITEM TRANSMITTAL CONTACT FOR INFORMATION ~ (Initials of Originator) 2210, Gary G. Streed, Ext. 2500 Division No., Name, and Extension RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF OCTOBER 1996 (All Districts) Recommended Action(s): 1. Receive and file Treasurer's Report for the month of October 1996. (This report will be handed out at the meeting, in accordance with the Boards' Investment Policy.) CEQA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on_ and Notice of Determination filed on_ BUDGET INFORMATION N/A CURRENT YEAR TOTAL BUDGETED AMT.: BUDGET AMOUNT SOURCE: CORF JO DISTRICTS Schedule/Line Item: N/A AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION ORIGINAL BID, PO, CONTRACT AMOUNT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: Permanent Limited Term CONCURRENCES: Date (J 2-'f" · nature Date Department Head (Or Designee) ~~ (Glu..,;__ Sigiiui:e Date Assistant General Manager (Or Designee) DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET TO-DATE BUDGET BALANCE TOTAL EXPENDITURES (Total Budget plus Transfers) N/A N/A N/A CHANGE ORDERS, AMOUNT AMENDED PROJECT FUNDS PREV. REQUESTED THIS AMOUNT APPROVED AIT REQUIRES BOARD POLICY ACTION? NO If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: To Jt. Bds.: ADDITIONAL INFORMATION (Background and/or Summary) The Districts have used Pacific Investment Management Co. (PIMCO), as our professional external money manager, and Mellon Trust as our third-party custodian since September 1995. The October report will be available at the meeting in accordance with the Board-approved Investment Policy, and in conformance to the Government Code requirement to have monthly reports reviewed within 30 days of month end. Quarterly presentations are made by PIMCO and/or our third-party independent consultant, Callan Associates, when requested by the Committee. GGS:lc c: Department Head AGM-Administration AGM-Operations General Manager H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\NOV.AIT\FAHR96.64 Revision: 8/28/96 Page 2 of2 ., PDC: FAHR: 11/13/96 EXEC: STEER: JT.BDS: 11/20/96 ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: ,~ AGENl l ITEM TRANSMITTAL 2210, Steve Kozak, 2504 Division No., Name, and Extension RECEIVE AND FILE QUARTERLY INVESTMENT MANAGEMENT PROGRAM REPORT FOR THE PERIOD JULY 1 THROUGH SEPTEMBER 30, 1996 (All Districts) Recommended Action{s): Receive and file this information-only report. CEQA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on_ and Notice of Determination filed on_ BUDGET INFORMATION N/A TOTAL BUDGETED AMT.: $ SOURCE: CORF JO DISTRICTS Schedule/Line Item: AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION CURRENT YEAR BUDGET AMOUNT N/A ORIGINAL BID, PO, CONTRACT AMOUNT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent Limited Term Date /0 ·· 2,g ... 9(c re ~~ partment ead (Or Designee) ~, c..u~ /0/29/96 Sig~ Date Assistant General Manager (Or Designee) DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: CURRENT YEAR- TO-DATE EXPENDITURES N/A CHANGE ORDERS, FUNDS PREV. APPROVED 9/25/96 YEAR-TO-DATE BUDGET BALANCE N/A AMOUNT REQUESTED THIS AIT REQUIRES BOARD POLICY ACTION? YES Board Resolution No. 96-79 ATTACHMENTS TO AGENDA (List) To Committee: 1. Staff Report 2. Investment Policy To Jt. Bds.: 1. Staff Report 2. Investment Policy REVISED BUDGET TOTAL (Total Budget plus Transfers) NIA AMENDED PROJECT AMOUNT ADDITIONAL INFORMATION (Background and/or Summary) On September 7, 1995, the Districts' Treasury Bill investments matured and funds were wired to PIMCO, the Districts' external money manager. The Districts' funds are invested to maximize safety, liquidity, diversification, flexibility, and yield. This item transmits the quarterly investment management report for the period July through September 1996. SK:lc c: Director of Finance AGM-Administration AGM-Operations General Manager General Counsel H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\NOV.AIT\FAHR96.65 Revision: 8/28/96 Page2of2 November 13, 1996 STAFF REPORT FAHR96-65: Consideration of motion to receive and file Quarterly Investment Management Program Report for the period July 1 through September 30, 1996 Background The Districts' Investment Policy, adopted by the Joint Boards on September 25, 1996, includes monthly and quarterly reporting requirements in Section 15.0 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 July 1 through September 30, 1996. Portfolio Performance Summary Third Quarter 1996 Liquid Operating Monies{%) Long-Term Operating Monies(%) ; --.-.-•-.• -- Total Rafe,nfRe.hlr'i'l -·;::-:-: ''' 3 month 1.3 1_9 6 months 2_7 2.5 9 months 4.1 2.3 Since inceftion 5.6 5.5 30 Sept 9 •-· .... , . '.:'Bench:qiar.k 3 Month 1.3 1.7 6 Month 2.6 2.5 9 Month 3_9 2.3 Market Value ier P!MCO $14,159,145 $287,057,199 30 eptember 96 Estimated Current Yield 5.8 6.2% 30 September 96 I Quarterly Deposits/Withdrawals ($39.0M) -0- I Estimated Annual Income $0.BM $19.0M CSDOC e P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411 FAHR96-65 Page 2 November 13, 1996 Market Recap Fears that the Federal Reserve would tighten interest rates continued to fuel uncertainty in the market. Reports of moderating growth and tame inflation led the Federal Reserve to hold their policy stable at their September 26 Federal Open Markets Committee (FOMC) meeting. Overall, bond yields ended essentially unchanged from the beginning of the quarter. The keystone of PIMCO's fixed-income strategy is their long-term approach to investing. PIMCO continued to maintain a slightly above-index duration1 target for the Long-Term Operating Monies portfolio (2.4 years vs. 2.3 years for the Merrill Lynch 1-5 Year Corporate/Government Bond Index), which reflects their continued bullish forecast for a downward trend in interest rates over the long run. The above-index strategy contributed to the portfolio performing better than its benchmark this quarter (1.9% vs. 1. 7%), and enhanced overall portfolio returns following a difficult first half of 1996. PIMCO continued to maintain a below-index duration target for the Liquid Operating Monies portfolio (36 days vs. 90 days for the Salomon Three-Month Treasury Bill Index). With investments in agency discount notes, high-quality commercial paper, and short-term corporate notes, the portfolio performed on its benchmark for the quarter (1.3%). Comparative marked-to-market ending values of the portfolios are shown in the following table: Quarter Ending Liquid Operating Mohies ($M) Long-Tenn Operating Monies ($M) 30 Sept. 95 60.2 234.2 31 Dec. 95 61 .1 263.6 31 Mar. 96 51 .9 262.9 30Jun. 96 52.6 281.8 30 Seot. 96 14.2 287.1 Investment Policy The first annual review of the Districts' Investment Policy was conducted at the September 1996 FAHR Committee Meeting pursuant to Section 15 of the Investment Policy and the California Government Code. A spiral-bound copy of the Districts' updated Investment Policy is attached for your reference. 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. FAHR96-65 Page 3 November 13, 1996 Recommendation Receive and file this information-only report. SK:lc H:\WP.DTA\FIN\2210\CRANE\FPCMTG\FAHR.96\STAFFRPT.96\SRFAHR96.65 Attachment c· ( County Sanitation. Distr,icts of Orange County STRATEGY REVIEW FOR THE PERIOD I JULY 1 -SEPTEMBER 30, 1996 FINANCE, ADMINISTRATION & HUMAN RESOURCES COMMITTEE NOVEMBER 13, 1996 I , Post Office Box 6430 840 Newport Center Drive Newport Beach California 92658-6430 714 • 640-3031 AGENDA BOND MARKET REVIEW ( II PERFORMANCE/ PORTFOLIO REVIEW Ill CURRENT OUTLOOK/ STRATEGY ( PACIFIC INVESTMENT MANAGEMENT COMPANY ( RATES END THIRD QUARTER UNCHANGED, AFTER FIRST HALF SURGE • YIELDS WHILE VOLATILE END 3RD QUARTER ESSENTIALLY UNCHANGED FROM 2ND QUARTER LEVELS • Economic data diverse • Expectations for slower growth build • Market reacts positively to Fed's decision to leave policy unchanged at September 24 FOMC meeting • POSITIVE BOND MARKET RETURNS RESULT FROM COUPON INCOME • Stable yields eliminate price component of total return -;ft ~ 6 Q) ;:;: 0:::-~~~-----·· .. -- June '96 --······· .,.,., ... s~----------------------------~ Maturity 0 Duration 0 150 100 0.. -:3. Cl) tlO 50 C "' 5 4.2 10 7.0 94 LU 30 12 .5 ..c u • I I II 11 2.1.'" , ~JIJI ,,,_, ol , m ..JI , -5 -1 -1 .1 •l -13 -50 ~_ ........ ____ ...__ ___ ........ ____ .,__ ___ _L ____ .,__ ___ _L _ ___. 3 Mos. 1 Yr. 2 Yrs. 3 Yrs. 5 Yrs. 10 Yrs. 30 Yrs. • 3RD QTR. ~ 9 MONTHS I SOURCE: Bloomberg PACIFIC INVESTMENT MANAGEMENT COMPANY STRATEGY RECAP - PERFORMANCE RELATIVE TO INDEX • long-Term Operating Fund -Third Quarter 1996 DURATION • MATURITY MIX • SECTOR/ ISSUE • ABOVE MARKET SIMILAR TO INDEX • GREATER POSITION IN AGENCY BONDS IN PORTFOLIO THAN IN INDEX • GREATER POSITION IN CORPORATE BONDS IN PORTFOLIO THAN IN INDEX 2 • • • NEUTRAL NEUTRAL POSITIVE IMPACT ON PERFORMANCE • Agency returns better than Treasury returns • Corporate returns better than Treasury returns PACIFIC INVESTMENT MANAGEMENT COMPANY ( r STRATEGY RECAP - PERFORMANCE RELATIVE TO INDEX • Liquid Operating Fund -Third Quarter 1996 DURATION • MATURITY MIX • SECTOR/ ISSUE • BELOW MARKET SIMILAR TO INDEX • GREATER POSITION IN AGENCY NOTES IN PORTFOLIO THAN IN INDEX • GREATER POSITION IN COMMERCIAL PAPER IN PORTFOLIO THAN IN INDEX 3 • • • SLIGHTLY HURT PERFORMANCE NEUTRAL POSITIVE IMPACT ON PERFORMANCE • Agency returns better than Treasury returns • Commercial paper enhances yield PACIFIC INVESTMENT MANAGEMENT COMPANY REVIEW OF PERFORMANCE Through September 30, 1996 • Long-Term Operating Fund Since Inception YTD 9/30/95 9 Mos. 3 Mos. 9/30/96 Market Value Sanitation Districts of $287,057,199 Orange County (L-T) (%) 5.5 2.3 1.9 Merrill 1 -5 Year Gov't. I Corp. Index (%) 5.5 2.5 1.7 • Liquid Operating Fund Since Inception YTD 9/30/95 9 Mos. 3 Mos. 9/30/96 Market Value Sanitation Districts of $14,159,145 Orange County (Liq-op) (%) 5.6 4.1 1.3 3 Month T-Bill (%) 5.3 3.9 1 .3 4 PACIFIC INVESTMENT MANAGEMENT COMPANY CURRENT OUTLOOK AND STRATEGY • SLOWER, NON-INFLATIONARY GROWTH • INFLATION KEPT IN CHECK BY COMPETITION • BOND MARKET ATTRACTIVE • No need for Fed to tighten • Long rates trend lower ~ • ABOVE BENCHMARK DURATION TO CAPTURE PRICE GAINS AS RATES FALL • MATURITY MIX CONSISTENT WITH INDEX • SECTOR CONCENTRATION: • Focus on agencies • Underweight Treasuries • Focus on corporates 5 PACIFIC INVESTMENT MANAGEMENT COMPANY ' MEETING DATE OMTS: PDC: FAHR: 11 /13/96 EXEC: STEER: JT.BDS: ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGENl ITEM TRANSM ITTAL CONTACT FOR INFORMATION /h ,fJ . (Initials of Originator) 2230, Marc Dubois, Ext. 2650 Division No., Name, and Extension RESOLUTION ADOPTING A PURCHASING SYSTEM AND POLICIES AND PROCEDURES GOVERNING PURCHASES OF SUPPLIES, SERVICES AND EQUIPMENT AND REPEALING RESOLUTION NO. 86-81 (All Districts): The Contracts/Purchasing Manager and General Counsel recommend the adoption of a new purchasing resolution to streamline processes, reduce expenditures and provide increased staff efficiency. Recommended Action(s): Adopt new Purchasing Resolution repealing Purchasing Resolution No. 86-81 . CEQA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on _ and Notice of Determination filed on _ BUDGET INFORMATION TOTAL BUDGETED AMT.: N/A SOURCE: CORF JO DISTRICTS Schedule/Line Item: AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION CURRENT YEAR BUDGET AMOUNT N/A ORIGINAL BID, PO, CONTRACT AMOUNT NIA WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, stale number: _ Permanent Limited Term Date DATE OF MOST RECENT~ ACTION ON THIS SPECIFIC ITEM: NOT APPLICABLE CURRENT YEAR- TO-DATE EXPENDITURES N/A CHANGE ORDERS, FUNDS PREV. APPROVED N/A YEAR-TO-DATE BUDGET BALANCE N/A AMOUNT REQUESTED THIS AIT N/A REQUIRES BOARD POLICY ACTION? NO REVISED BUDGET TOTAL (Total Budget plus Transfers} N/A AMENDED PROJECT AMOUNT N/A If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: 1. Proposed Resolution To Jt. Bds.: 1. ADDITIONAL INFORMATION (Background and/or Summary) After a thorough evaluation of the current Purchasing Resolution, the Districts' Contracts/Purchasing Manager and General Counsel recommend the adoption of a new purchasing resolution which dramatically streamlines processes, reduces expenditures and provides for increased staff efficiency well beyond current levels. The proposed Purchasing Resolution's emphasis is directed toward review and approval processes, flexibility in standard purchase awards and to accommodate Purchasing's strategy to incorporate "Best Practices" in daily procurement and contract activity District-wide. Enclosed is a "red-line" version of the proposed Purchasing Resolution with highlighted additions and line-through deletions for the Committee's review. The significant changes can be summarized as follows: 1. Recognizes position titled "Contracts Administrator/Purchasing Manager." 2. Includes disposition of surplus and by-products by methods other than "sale." 3. Adds review, approve and maintain active insurance documents for all suppliers on site to duties. 4. Includes recent Board-approved language regarding change in company name without further Board action. 5. Allows Contracts Administrator/Purchasing Manager, rather than Director of Finance, to sign PO's requiring Board approval. 6. Allows staff to order supplies, equipment and services that are included within the adopted budget without Board approval. 7. Retains that all public works contracts would continue to be approved by the Board. 8. Allows renewal agreements, if included in original Board action, to be executed without annual Board action. 9. Allows informal bids to be obtained by fax as well as traditional methods. 10. Allows blanket orders for inventory stock items. MDD:lh c: Department Head AGM-Administration AGM-Operations General Manager H:\WP .OTA \FIN\221 0\CRANE\FPC.MTG\FAHR.96\NOV.AIT\FAHR96.66 Revision: 8/28/96 Page 2 of2 RESOLUTION NO. __ PURCHASING AND CONTRACTS AWARD RESOLUTION A JOINT RESOLUTION OF THE BOARDS OF DIRECTORS OF COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13, AND 14 OF ORANGE COUNTY, CALIFORNIA, ADOPTING A PURCHASING SYSTEM AND POLICIES AND PROCEDURES GOVERNING PURCHASES OF SUPPLIES, SERVICES AND EQUIPMENT, AND REPEALING RESOLUTION NO. 86-81 * * * * * * WHEREAS, California Government Code Section 54202 requires that every local agency shall adopt policies and procedures, including bidding regulations, governing purchases of supplies, services and equipment and that purchases of supplies, services and equipment by the local agency shall be in accordance with said duly adopted policies; and WHEREAS, California Government Code Section 54204 requires that if the local agency is other than a city, county or city and county, policies provided for in Section 54202 of said Code shall be adopted by means of a written rule or regulation, copies of which shall be available for public distribution; and WHEREAS, in order to establish efficient procedures for the purchase of supplies, services and equipment and the letting of public works contracts at the best possible cost commensurate with quality and delivery needs, together with other relevant factors, to exercise positive financial control over purchases, to clearly define authority for the purchasing function and to establish bidding procedures, a purchasing system for the Districts and the Joint Administrative Organization, hereinafter referred TLW:pj:#34250:Draft No. 5:10/17/96 1 to as "Districts", beyond what is required by said Sections of the Government Code, is desirable and in the best public interest. NOW, THEREFORE, BE IT RESOLVED that the Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, DO HEREBY DETERMINE, ORDER AND RESOLVE: ARTICLE I GENERAL J~fDEX Sl&tJ.'.g __ :Jrr;.l ~&~,,t~lg~pygr@ SeAntittlfflj l~r~n.~~lfig1ffli~tif:glllf:tgf.(Q)1iin~i~~J~gJfi:9.o_lt ~1$.flirrJ~t l~l:iltjitt~l$l: s:~'.Pftci&::J\n: ~i~P.f.gr§tf¥e.1:e::e.:culmDJi Section 1: System Adoption. In order to establish efficient procedures for the purchase of supplies, services and equipment, and the letting of public works contracts at the best possible cost commensurate with quality and delivery needs and other relevant factors, to exercise positive financial control over purchases, to clearly define authority for the purchasing function, to establish bidding procedures and in pursuance of Section 54202 of the Government Code of the State of California, a purchasing system is hereby adopted. Section 2: Purchasing Division: Director of Finance Authority. There is hereby vested in the Purchasing Division (hereinafter referred to as "Purchasing"), under the TLW:pj:#34250:Draft No. 5:10/17196 2 general supervision and direction of the Director of Finance, the authority for the purchase of supplies, services and equipment, letting of public works contracts and establishment of rules, procedures and administrative policies relative thereto. The Director of Finance may delegate or assign any or all of the following duties to the Contracts Administrator/Purchasing Manager: (a) [~ purchase or contract for supplies, services and equipment required by any Department or Division, in accordance with purchasing procedures prescribed by this Resolution; such administrative regulation! as Purchasing shall adopt for the internal management and operation of Purchasing; and such other rules and regulations as shall be adopted by the Boards of Directors. (b) !l§ negotiate and recommend execution of contracts for the purchase of supplies, services and equipment; for construction pj public works projects; and for the saler/.l.f/i.q_§]_(}Jf.i1 of surplus property and by-products of the sewage treatment process. purchase orders and other related documents, the original executed copies of which shall be delivered to the Board Secretary for custodianship. (d) Aet ufo re are for the Districts, the needed &tanoardsiin8::is'''.1icifibaf1onsl ,., ... ,,, p p .-, .... · .. • .. ~ ... , .. •.-.-.w.,•,w • .-,.-,,.-,,w,..,•J? .. m.•,•,,;,.· •• ·.·•·•••••"••••••'••,.••' pf quality in supplies, services, equipment and construction at the best cost and under the most favorable conditions, with due consideration to delivery and other relevant factors. (e) ffi'tj discourage uniform bidding and endeavor to obtain as full and open competition as possible on all purchases and sales. ll.W:pj:134250:Dl'lft No. 5:10117/96 3 (f) ®9 prepare rules, regulations, procedures and administrative policies, and revisions thereto, governing the purchase of supplies, services and equipment;. and for the lettin of ublic works construction contracts lwJlccloid~rtcifY''''ul'.lftffe'fF'm.v1siO:asiaf) g P ·,.·.wX-,.,·.·.v.Whw, . .',hW<o>'•"'···:·,.~ .• -,N.~w.· •• · •• ·.-X'J;l,,,,_.,w.w.-.=Nllh•'··-=w••··•.-. il~Ua\:ta!»-1 and salesai~si11lfn of surplus property and by-products . .,.,........._,.., ............ ~9.,,,,·.-• ........ .-; v.·A.v,::.l':;;-.-.-.v-•.-,..-.. ,~...ffl.w, (g) Ii prepare rules, regulations, procedures and administrative policies, and revisions thereto, governing the warehousing of inventories. (h) l[q keep informed of current developments in the field of purchasing, imit&IJW.f~µJI IJ.:limUlll;(q prices, market conditions and new products. (i) ;fg prescribe and maintain such forms as reasonably necessary to the operatior.IITl:tam:en1~UW'a of this Resolution and other rules and regulationsJmfi'.ffi~ m\i:tr11i~: U) Ii develop specifications to establish minimum standards for all purchases. (k) Mg supervise the inspection of all supplies, services and equipment purchases to insure conformance with specifications. (I) fiffi provide for transfer of surplus or unused supplies and equipment between Departments as needed. (m) (~ have custodianship and control of all inventories and surplus property. (n) !fl maintain a bidders' list, vendors' catalog file, and records needed for efficient operation of the Purchasing Division. n.W:pJ:#34250:Draft No. 5:10/17196 4 \ t6}fgj ii~m&fffliti such other and future duties as, in the Director's discretion, are incidental and necessary to the conduct of the Division. Ef,ql filllfilimlltlfJIIffl[$Jilti~J~;x:~, 'Jpjgjfii~Itifilof@l~mlffl.ilmi B.il€.1.liltirlil1.r-J.illftltt!.!U];~pjjJBiIElltorlJ,g}J§ia;ii11t~I-i:ltftitBI !iv,;;lm~·:,m:1s+.--atbflSuieHEsfni?¥~'?ij!<an·::~:,a'#EJW~ts~,~dtWc'fo'W1¥¥if§:fet'.¥~'e'\:'.a1''·t,1%riHo:;,,~.s\tf~''.;i;i.e'''~fJects~i@ m-~.; .. /;),.-.--.~:; ..... · ... ·.--Cc..•.;~u•-·-'.:-w;.:;-;~., ... .,:,,.~MY.J~:/· ., .. ~~j'.'~---.•••~._. ...... ~, .. ~:;e,~-~{••+.-.-.. •••-~}'~:~.-.·.••''°·-...... Jb.t~;~.-.. J~~•••••;;i,..~~~-~J~),.-o.•,·,'•·•· ->:-..¥».•Ji.-r·.·•c.:r ~~d.m111~lii]tongfilg$J~i.(tlt6f.il~,w.ftg},5ttg,gift~lt.11~m~~lfilifir:2fatiin~J:1~titg!Ji~ttttf&nfg}\f i®.~ ~gt£lliiiieiJ.lienii~lira'1g§nJh:lfit=~e.t:i.tffli.icircrtase19. ;Be:m{4i eomtre4titR;Jtf!i§ wnt¢hleao~~mtra1na&itieI~ffl-regss1~11nwxwt1011mtt1i]:»Jata@endroDJott®t®rtglffl ~gf.~§.mgatiz§fl!4l!t'2§;;~~~9.f{ii;~JlntJ?ffimig&f~:igh$J~fJl llriili:itm~~l~;~isinm,gQtif~nalb.:g)J I?II~il~,,qtigr§ltffit~~,:$.;l§gf.lM'.?.ni§~I.I:§~slgil?J'rr~1}llm\itl~ftliitliifilili5:itfl Section 3: Requisitions. All employees of the Districts who need or require supplies, services aftd'.jp equipment to carry out the defined duties of their positions, shall submit requisitions for purchases or warehouse requisitions to Purchasing on standard requisition forms and in accordance with the adopted rules, regulations, procedures and policies of the Purchasing Division. Section 4: Cooperative Procurement. (a) The Districts, through Purchasing, may participate in or sponsor, conduct and/or administer a Cooperative Procurement Agreement for the acquisition of procured items ~li fWI¢:~i with any other public agency purchasing unit, in accordance with an agreement between the Districts and the other public agency. (b) The Districts, through Purchasing, may sell to, acquire from, or use any n.W:pj:134250:Oralt No. 5:10/17/96 5 property belonging to another public agency, including the cooperative use of supplies or services. ARTICLE II PURCHASES: SUPPLIES, SERVICES AND EQUIPMENT [~if{~!Wlt ffiU.lli$.§gijfl[fifjllllfb11tU!:llm£ftl~gg@JizilI$'.l.rvJ1l§~1 ~e.[tf~Js.1~ Hwraffi§§fmiJJlr:i~ S:ecftil¥9~~ mwr~tt~~~~!t1m:~lf.ta~~l1ft?:lt.fiJfl ~i1$I(§i!®} 11mmtmi.rJiri~ijntiiurill~~~ti11griin.?.tiiJJ1~«to'.a1~1 ~e.§fi~d1ifl i ~lS.~]~l1M~rflt!ezqjij]!ff~~1tt?.wl~tie~a.11i ij§$f[ijMilfflitl![~l]ltt1 B,gg!!llil:;i 11;mE.itf.~tj'.rllilltl'ti!ril s .. ~.J.'_~''_:'_:_~.t.·i,:A .. ,J.:,1.1a.-:::·_i_i r6~!1tn&w«an~i.11rs1r1~ ,,, ~,;.~ ·• ~<t O < c ·~ \t.:;..~:ti!'.:..,,: ............ t::~::: ...... :J~.:-=:• .. •..-u~1/,•;~;,~ Section 5. Purchases: Bidding Requirements. Except as hereinafter provided, purchasing of supplies, services or equipment shall be by bid procedures as set forth herein, when the purchase is estimated to have values greater than Twenty-Five Thousand ($25,000.00) Dollars; aftd the commodities or services may be obtained from more than one vendor; are not standardized as to price; and no emergency exists. Section 6: Purchases: Emergency. Whenever an emergency arises which is, TLW:pj:#34250:Oraft No. 5:10/17/96 6 ' ( .. or may be a threat to the continued required operations of the wastewater treatment plants and facilities owned by the Districts, or when purchases are immediately necessary for the preservation of life or property, or to avoid a threat to the public health or safety, the Division may purchase supplies, services or equipment required for immediate use, in an amount greater than Twenty-Five Thousand ($25,000.00) Dollars without observing the procedures set forth in this Resolution. In such event, Purchasing tKtAVfiiifl€.(f;:liiJill'iififlltlliil¥Jtim shall advise the District Chairman and/or Chairman Pro Tern, or the Joint Chairman and/or Vice Joint Chairman, as appropriate, of the action taken, and such action shall be ratified by the Boards of Directors at their next regular meeting. Section 7: Purchases: Standardized Prices and Specialized Services. In purchases of supplies, services or equipment in which the items to be purchased have a demonstrated uniformity in price, or it is determined that there is a sole source, or the provider of services is determined to be uniquely qualified to perform specialized services, Purchasing may make such purchases without observing the bidding procedures of Section 441! below. Section 8: Purchase Orders. Purchases of all supplies, services or equipment shall be made by purchase order and may also require a formal written contract, when determined necessary or appropriate by the Contracts Administrator/Purchasing Manager. To ensure that all policies and procedures governing purchase orders and contracts are followed, all contracts or purchase orders less than Fifty Thousand ($50,000.00) Dollars will be executed by the Contracts Administrator/Purchasing TLW:pj:#34250:Draft No.6:10/22/96 7 Manager. After appro~·al by the Boards of Directors, all cemtracts or purehase orders in the amount of Fifty Thousand ($50,000.00~ Dollars al"ld above, will be e,cecuted by the Directer of Finance, or his designee, except purehases for computer hardware, sefr.Nare, and communication equipment, whieh will be e,cecuted by the Information Technology Director, or his designee. Purchasing and employees requisitioning supplies and equipment shall be responsible that orders and requisitions are in conformity with the spirit and intent of this Resolution and that no purchase has been broken into smaller units to evade any requirement of this Resolution. Purchasing shall retain, in its files, one copy of all purchase orders issued during two (2) years preceding, on which copy of the purchase order, there shall be a list of bidders and prices bid for the materials or equipment purchased, or if no bids or quotations were taken or received, a full statement as to the reason therefor. A record of all sales or surplus property and by-products shall also be maintained by Purchasing upon or in which is maintained the record of the bids received for the property or by-products sold, or if bids were not taken or received, a full explanation thereof. Such records shall be maintained for two (2) years after the sale. Section 9: Purchases: Formal Contract Procedures. Except as otherwise provided by SeetieFI 8 above, puFChases and contracts for supplies, services or equipment and for publie ·works, of estimated values greater than Fifty Thousand ~$50,000.00) Dollars, shall be written contract and purchase order agreement with the lowest possible bidder, awarded by the Boards of Directors, pursuant te the proeedures prescribed nerein. TLW:pj:#34250:Draft No.6:10/22/96 8 Section 49~: Purchases: Encumbrances of Funds. Except in cases of emergency, no purchase order shall be issued for any supplies, services or equipment, unless there exists an unencumbered appropriation balance in the fund against which said purchase is to be charged. Section 4#.WQ: Bidding Procedure: purchases and Sales Greater Than $50,000.00. Except as otherwise provided tf§.;Sl~'i!Ufl herein, purchases of supplies, equipment and services and the sale of persoAal propefty of estimated value greater than Fifty Thousand ($50,000.00) Dollars shall be by written contract or purchase order agreement with the lowest responsible bidder, pursuant to the procedures prescribed herein. 'FJlitR-li'i!~f!!.t9fttftifiDl~l&iiitilthi'-1Ji@fflf§'t:liii£@"lftri'1trJJ!ftlJ"th»tP"!P..d!!t.@~ fllif!N.tfAflJ;flflifq/~111i1JiJl{llilJIJlJl,fff1tfi'JJgTff.l6i.lffliltL~Jlif~ WlJJ1filiitllf!i!l!J1f§/flutlfiilM§.:ttfgJ~r.-:dfJ[fl#Jli/lftifiliJIJlilfYlfL~oJllfl/filq'f.JJf!Xrt{tif;).l. rJt1,Jf,,fjgg.f.flflXiJ,r;!p,~?JBJlltS,~:&.6.5'.t~1mJJi/fJf}Jtill,lf~$,,fliJE.Kai:~Ulitst11£~t!twJiifl.afb iifJiiiiJjitZfJJfltiif~~s9JifiiiJlfJJ[lf/Q,ni~'il&@if.tl£iflgfi'.'ililiifi'Qtij[(liifllilJf}i fiifK~i§P.fit&.iI~;~; ?fffiJf1fig"flfJJiifS1li.m$.liltrJ,!Eii.t"flt~fiiilifi.ii)iil.l!/ili.tgfitt&J.l~§UWJf tgfifi:~~lilfiif.lfi.j lffr.[6Jll1Plcl{g~tfJ.fqtif.ti~ (a) Notice Inviting Bids. The notice inviting bids shall include a general description of the articles or services to be purchased or sold, shall state where bid forms and specifications may be secured, and the time and place for opening bids. (1) Publjshed Notice. The notice inviting bids shall set a da~e for the opening of bids. The notice shall be published one (1) time at least ten (10) days TLW:pj:134250:Oraft No. 5:10/17196 9 before the date for the opening of the bids. Notice shall be published in a newspaper of general circulation, printed and published within the Districts~~irllffl'.u(fgn. (2) Bidders List. Purchasing may also solicit sealed bids from all qualified, responsible prospective suppliers whose names are on the Bidders List maintained by the Districts, or who have requested their names to be added thereto. (3) Bulletin Boards. Purchasing shall also advertise pending purchases or sales by a notice posted on a public bulletin board in the Purchasing Division Offi ceflln}(l~!fitlJ.l~:~mJit§f/l,il[(IJlttflrtflt?li {fliJliJ!l.iJttl211.IilfiJ'ii111fgfjiyjJffiiJ1 (b) Bidder's Security. When deemed necessary by the Division, bidder's security may be prescribed in the contract specifications or in the public notice inviting bids. Bidders shall be entitled to the return of bid security upon the full execution of an awarded contract or issuance of a purchase order, by the successful bidder. A successful bidder shall forfeit his bid security upon refusal or failure to execute the contract within the prescribed time after the notice of award of contract has been mailed[~lf&:~f~rJJjJ;l».~I?.t?Jffi.:r. unless the Districts are responsible for tfte~ delay !d%.tngr: p,IJffiil~i~fiffig. The Boards of Directors may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsive, responsible bidder. If the Boards of Directors award the contract to the next lowest bidder, an amount of the lowest bidder's security shall be teFteited to the Districts, and the surplus,if any, shall be returned to the lowest bidder to equal the difference berween the low bid and the a·warded bid. :8[6~1!.td1~£M~l16~tw~~'.ffi!lti~l:rlw.r6fa.~1iWlfflgl TlW:pj:fl-4250:0ralt No. 5:10/17/96 10 <I l;l,ij~ilfitil[l11Jitt~1t&IIJ~g[{9J1til~iiim~illlm:am~iiBtgJlf;lm~lI:i@f.Illmll.im.figj !$JfflEit1fiffJ.I[~ (c} Bjd Opening Procedure. Sealed bids shall be submitted to the Contracts Administrator and Secretary of the Boards of Directors, and shall be identified as bids on the envelope. Bids shall be opened in public by the Contracts Administrator or his designated representative at the time and place stated in the public notices. A tabulation of all bids received shall be open for public inspection during regular business hours for a period of not less than thirty (30} calendar days after the bid opening. (d) Rejection of Bids. In their discretion, the Boards of Directors may reject any and all bids presented and readvertise for bids. If all bids are rejected, the Boards of Directors, by majority vote, may declare that the materials or supplies may be acquired at a lower cost by negotiation in the open market and authorize the purchase in that manner. (e) A-vvard of Contracts. A purchase order or 'Written fonflal contract shall be a·warded by the Boards of Directors to the lo·,~·est responsible bidder, e~cept as otherwise provided herein. (e} Tie Bids. If two or more bids received are for the same total amount or unit price, (with quality and service being equal), and if the public interest will not be best served by a delay of readvertising for bids, the Boards of Directors may accept the one they choose or accept the lowest bid made by negotiation with the tie bidders at the time of the award. Tl.W:pj:#34250:Drall No. 5:10/17/96 11 (f) Performance Bonds. Purchasing shall have authority to require a faithful performance bond, a labor and materials bond and/or a warranty bond, before entering into a contract in an amount as it shall find reasonably necessary to protect the best interests of the Districts. If the Purchasing Division requires any of these bonds, the form and amount of the bond shall be described in the notice inviting bids and in the contract specifications. (g) Exception. Notwithstanding the provisions of subsections (a) through (f) above, the Purchasing Division may award a contract to purchase supplies, equipment or services in an amount greater than Fifty Thousand ($50,000.00) Dollars without obtaining bids and following the procedures set forth above when the e-'oR&a:cls~; fA,'.8m?''tstra~81iPurchasin f11'"a:'"·a~'"'e't Dh·ision determines that: ~ ..... w.·,.,JJL., .. ·.·••'•v~.•l , •. w.w g J,f:~J:ll,P.:.,,'ll, .. wH (1) By purchasing immediately, it can avoid an imminent price increase or realize a substantial price discount that is available on a short term basis only; or (2) It can obtain equipment or supplies immediately that might not otherwise be available at such time as purchasing procedures could be completedj :fir 1~3_:-_·•~-~1r1aii£AntP/!im.t¥ri'1r1JJ1r1qn;,1111i/i:ltJWmew1rorisewtaest6Jt~Kts1Jaii!JsI .\'! !(/: ., ·"'······ ..... :,:,., .... ~. ,. ,:.h~:~5';;;.'J,:~~"''.•.•Y~~--,······•.;,...,.il -.• ,~-~-.. ·l:?,.,•,;, ...... ~-~~ .• , •• :J ... :,.., .. ;, .. ,, .... .-:, .. , ... 5 .. -.... ·--~--... -'. ... ·,.·,•,·.5<,,., ••• ,,: i/f-Jf.)i.lif/§fgf§'fiftii/fli.qlfl!,lfflflf!ilfJJJJlt,l wJlll&tJJJ@Jll/tlii'.fftl'.?fil~ff.gfl.ilfl1'11irt?JJJp;pJrJm~l [tm.»Ylfllfl/li!it.1Jff/igi/1fli?liJJIIu:tfftt'JJt 6,~~JlfllJJlii.t~rf..4'.t.'ftlltid.r.?tli~l f. iJgffflll6.~g~f All such purchases shall be ratified by the Boards of Directors at their next TLW:pj:#34250:Draft No. 5:10/17/96 12 '- regular meeting. Seetier, 12: Pufchases: Open Market Pfocedufe Sales Less thar, $50,000.00. Sl2tr2atjfJi ~l'~n!f§lt~~tef2~fflfff~rlfrf$lia'sU::~}l~~115'8le 'O~QW Purchases of supplies, equipment and services, aFtd the sale ef sur=plus District persenal preperty of an estimated value in the amount of Fifty Thousand ($50,000.00) Dollars or less on which bidding is not required by state law, may be made by the Purchasing Division in the open market without observing the procedures prescribed by Section 44 l~!~ above. The procedures to be used for these purchases are as follows: (a) Minimum Number of Bids. Open market purchase shall, whenever possible, be based on at least three (3) bids and shall be awarded to the lowest responsible bidder. (b) Solicitation of Bids. Bids shall be solicited by written requests to prospective vendors or purchasers and/or by telephone, :{ll§.'$}]nili1.@/iilfdlliilfli and/or by public notice posted on a public bulletin board in the Purchasing Division Offices. (c) Receipt of Bids. Bids shall be submitted to the Purchasing Division, who shall keep a public record of all open market orders and bids for a period of two (2) years after the submission of bids or the placing of orders. (d) Purchases Less Than $1,000,00. The Purchasing Division may purchase supplies, equipment and services of a value in the amount of One Thousand ($1,000.00) Dollars or less per purchase order, without observing the procedures prescribed in this Section when, in its discretion, it is determined that observing such TLW:pj:#34250:Draft No. 5:10/17/96 13 procedures would not result in a lower overall cost to the Districts. Section 43:~/2: Blanket Purchase Orders. The Purchasing Division may issue annual· blanket purchase orders for recurring purchases of miscellaneous supplies that; Because of economic considerations are not carried in stock in the Districts• warehouse: fbl tPl lh~i,},:i;f/;~tilirriitW/6.llttafff:.Abilim~ttJBl~nU.tYd~af/;J;fi,.r;:1riVin.t6r.;fZluimi?f1½ 'l--·.:.--..-.-)~!:M~'.Mlr.< . .-.~ •..... ,::.~ ... ---.,.M:t,-l,❖•'··•·-'•'.W-U: ... ~-M1.,(,!,-.·-•.-.·.,:.,, . ..:-Ji,,#J ... ._.*.:,.:Mls.~.-."A,,V,l',,',l.,.•:❖ ••• ~:},l',-.. • .... .-;f.:;,!f;~~~«:: ........ :r •• ~· ••••••• -•••••• !.'ZK: .. -....-... -.: .. -.. -.-... 1;.JJ.J;. and for miscellaneous services, where such purchase of supplies and services in the aggregate will exceed an estimated value of Fifty Thousand ($50,000.00) Dollars from a single vendor during the budget year, without observing the procedures prescribed in Section 441l when, in its discretion, it is determined that such blanket purchase orders are at a cost favorable to the Districts and will result in more efficient procurement of such items. Blanket purchase orders shall be in conformity with the spirit and intent of this Resolution. The Purchasing Division shall, at the beginning of each budget year, file a list of such purchase orders and the estimated annual amount with the Director of Finance. Section 441~3: Inspection and Testing. The supplies and equipment delivered, and contractual services performed, shall be inspected to determine their conformance with the specifications set forth in the purchase order or contract. Purchasing shall have authority to request professional services, or to require chemical and physical TLW:pj:134250:Draft No. 5:10/17/96 14 tests of samples submitted with bids and samples of deliveries which are necessary to determine their quality and conformance with specifications. Section +sil: Purchases -Negotiated Contracts. Notwithstanding other provisions of this Resolution, the Boards of Directors may, when it appears in the best interests of the Districts, authorize the Staff to negotiate and award a contract for purchase of supplies, equipment or ~ervices without observing the procedures prescribed in Sections 11 and 13 above~~~11.l,J][~f}j~4 (a) When such authorization has been granted for purchase of supplies, equipment or services of an estimated value in the amount of Fifty Thousand {$50,000.00) Dollars or greater, the Staff shall obtain the concurrence of the District Chairman and/or Chairman Pro Tern, or the Joint Chairman and/or Vice Joint Chairman, as appropriate, prior to awarding such purchase. (b) Whenever any contract for supplies, equipment or services has been entered into between the Districts and a person or entity providing such supplies, equipment or services, and Purchasing determines that it is in the best interest of the Districts to continue said contract with such person or entity, Purchasing may, in its discretion, negotiate an extension of such contract without observing the procedures prescribed in Sections 11 and 12~Q~l;i1JJi~ at?ove, provided the amount of the extension does not exceed Fifty Thousand ($50,000.00) Dollars. In the event the extension is in an amount greater than Fifty Thousand ($50,000.00) Dollars, it shall be approved and awarded by the Boards of Directors. This Section shall not apply to the letting of public works construction contracts in excess of Twenty-Five Thousand TLW:pJ:134250:0raft No. 5:10/17/96 15 ($25,000.00) Dollars. ARTICLE Ill SALES'flll5f!'.i1IJ1i OF SURPLUS PROPERTY 1&-m&~ s,:.J.i~·:,ttia_;_:·_:_~_t,~-_Jm.t ~e~tJSt1wwns:ms1iartt~HrAmemlili: .. -...... !1.§:.L.. ~.,. .. Hi,!J~, ...... ,❖ •• ,,.~~M,,N,,·,•,y,_,,1':el.,;.-~,b,:,,,,,fe!!: ... ,-.w,,ym:\'l. iS~4f~~ij? S:~j$1Q~¥ifjlg}U~ff ~.Jijfl~tlA:J;~-... :,; ~~-·---~•;-..,1.~~:;:it~M .. -.. ~:~t;::3:.~~:9.J~~~ Section 4:6:i~: Surplus Supplies and Equipment. All departments and/or divisions shall submit to Purchasing, at such times and in such form as it shall prescribe, reports showing all supplies and/or equipment which are no longer used or which have become obsolete or worn out. Purchasing shall have authority, pursuant to the provisions of this Resolution, to selli or exchange for; or trade in on new supplies cannot be used by any other Department or Division, or which have become unsuitable for Districts' use. Section :4:ttf:§: Sale of Real Property. No real property of the Districts may be sold, or any negotiations leading to such sale may be made, without prior approval of the Boards of Directors. TLW:pj:#34250:Draft No. 5:10117196 ARTICLE IV PROFESSIONAL SERVICES 16 Section +a.ti: Professional Seryjces Agreement. All contracts for the retention of architectural, engineering and similar, related professional services shall be governed by the Policy of the Boards of Directors Establishing Procedures for the Selection of Professional, Engineering and Architectural Services, Resolution No. 90-43, dated May 9, 1990. ~Eli• 1uamt1r1in~nn~11mrm1:f:J:£lt:11tu:1:~'~ liitliaii;J liijlfilliilJ.ifl~1tflltffl!tii.!I ~g!lffliJI~ IIOOf.11m~,JI@:~~g{.g~'lmili@ft~ s!ctt.rn~~ ltlllllr~•1ar~~1m~llPl~1~tfi~1mitlfin~~rij1~11fum Section z&'ifIS: Public Works Contract Defined. Public works contracts are herein defined as contracts with duly licensed contractors in the State of California for the furnishing of labod and materialSi and equipment li.tit.J1Pc.m!lm1I{lgn.f{ft~l liB.i.i.§w;yJ for the erection, construction, alteration, repair, improvement of wastewater collection, treatment and disposal facilities, and any other public building, structure or improvement necessary to the operation of the Districts, in an amount greater than Twenty-Five Thousand ($25,000.00) Dollars, as per Public Contract Code Sections 20783 et seq. §gffufiQ Rfill!)IleiWofRg~wa:1fficf{j[j[eglrrrieaf&~fi~@tf[~:-Jfl'i,l!l~1t~Uli~'bl f.@E:I~l{l~liill'.~t~~l~f~~lll1:m&iJ§~t1~~;~f~illiir:lfitli~§1i6lq~,@B-~l[(l,~iit~l9Jil1 BIIwa1111111-~Jitf~~~,lt@lr.iml1l!tilffl}Jfil~lr.~Jmm!IJ!llJf.at1~l[t.&11 TLW:pj:#34250:Draft No. 5:10/17/96 17 IJAilJ,lm.f-~Wllfi!Uffi1l&lfiQBiollPa~l~wiiti'¢.f~tJgl!S~'.~.~iffliillli:lil! Section 2+2'.0: Bidding Procedure -Public Works Construction Greater Than $25,000,00. Procedures for soliciting bids and awarding contracts for public works projects for more than Twenty-Five Thousand ($25,000.00) Dollars, shall be by written contract with the lowest responsible bidder, pursuant to the procedures prescribed herein and in accordance with applicable provisions of tne Public Contracts Code lf~Q@~U.il,§J of the State of California. (a) Notice Inviting Bids. Notice inviting bids shall distinctly describe the work to be performed, shall state where bid forms and specifications may be secured, and the time and place for receiving and opening sealed bids. (1) Published Notice. Notice inviting bids shall set a date for the opening of bids. The first publication or posting of the notice shall be at least ten (10) calendar days before the date for the opening of the bids. Notice shall be published at least two (2) times, not less than five (5) days apart, in a newspaper of general circulation, printed and published within the Districts. (2) Mailed Notice. Unless the work to be done is proprietary, notice inviting bids shall be mailed to all contractors on the Districts' list of bidders for the category of work being bid and all trade journals l.@i.~~gJ4J?.Jl$.t!tOQfm~ specified for Orange County by the California Uniform Construction Cost Accounting Commission no iiSi!ll'.@tfSploJ~fflfrtii less than thirty (30) calendar days before the date of opening of bids. (3) Bidders Ust. Purchasing may also solicit sealed bids from all TLW:pj:#34250:Drall No. 5:10/17/96 18 .. qualified, responsible, prospective suppliers whose names are on a Bidders List that may be maintained by Districts. (b) Bidder's Securjty. When deemed necessary by the Purchasing Division, bidder's security may be prescribed in the contract specifications and in the public notice inviting bids. Bidders shall be entitled to return of bid security, upon full execution by the successful bidder of an awarded contract by the Districts. A successful bidder shall forfeit its bid security upon refusal or failure to execute the contract within the prescribed time after the notice of award of contract has been mailedfl§llflf@R.~[~1Jm:l:tif, unless the Districts are responsible for the delaYi1illB~t pj~inl.1e.Jlll.im~-The Boards of Directors may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsive, responsible bidder. If the Boards of Directors award the contract to the next lowest bidder, an amount of the lowest bidder's securit §~fitaltoffi13lff&refm:Jt ;W''''"~"Iamc'.ia~ between the Y •.. M~ .. w.•.---.·.········"'·········~.-. • ., ••. ·.······w········,w·,··~···-Jlll .. ,=····•.w.w.w.,-.,S low bid and the awarded bid, shall be forfeited to the Districts, and the surplus, if any, shall be returned to the lowest bidder te equal the diff-eFence. (c) Bid Opening Procedure. Sealed bids shall be submitted to the Contracts Administrator and Secretary of the Boards of Directors and shall be identified as a bid, on the envelope. Bids shall be opened in public by the Contracts Administrator or his designee at the time and place stated in the public notice. A tabulation of all bids received shall be open for public inspection during regular business hours for a period of not less than thirty (30) calendar days after the bid opening. (d) Rejection of Bjds. In their discretion, the Boards of Directors may reject TlW:pj:134250:0raft No. 5:10117/96 19 any and all bids presented and readvertise for bids. If, after the opening of bids, all bids are rejected, the Boards of Directors, on a Resolution adopted by a four-fifths (4/5} vote, may declare that the work can be performed more economically by day labor, or the materials or supplies furnished at a lower price in the open market and may have the work done in a manner stated in the Resolution in order to take advantage of this lower cost. (e} Tie Bids. If two or more bids received are for the same total amount or unit price {with quality and service being equal) and if the public interest will not be best served by a delay or readvertising for bids, the Boards of Directors may accept the one ttffi'.ey chooses, or accept the lowest bid made by negotiation with the tie bidders at the time of the award. (f) No Bids. If no bids are received, the Districts may have the work done by force account; may readvertise for bids pursuant to the procedures herein; or may select a contractor by negotiation. (g) Emergencies. Whenever an emergency arises which is, or may be, a threat to the continued operation of the wastewater facilities, support facilities and/or administrative facilities operated by the Districts, a contract for the repair or replacement of the public facility may be ordered by the General Manager without complying with the provisions of this Resolution or the Public Contracts Code. This authority is hereby delegated to the General Manager, or his designee, by the Boards of Directors pursuant to the authority of Public Contract Code Section 22050. In such event, the General Manager shall advise the District Chairman and/or Chairman Pro lt.W:pJ:134250:0raft No. 5:10/17/96 20 'II' Tern, or the Joint Chairman and/or Vice Joint Chairman, as appropriate, of the action taken, and such action shall be confirmed by a four-fifths (4/5) vote of the Boards of Directors at their next regular meeting. (h) Performance Bonds. The Purchasing Division shall require a faithful performance bond and a labor and materials bond. A warranty bond may be required before entering into a contract in an amount up to one hundred (100%) percent of the amount of the contract, as it shall find reasonably necessary to protect the best interests of the Districts. The form and amount of the bond shall be described in the notice inviting bids, or in the contract specifications. (i) Cost Records. Cost records shall be kept in the manner provided in Sections 4000 to 4007, inclusive, of the California Government Code. ARTICLE VI MISCELLANEOUS .~Nffi!-X S§P.!!~mn~1,1r t.lg,qgqgjpU@b;;gi iiPliJ@I~~ §~@,t~i.tu; S'i~QD.~t S.~i§.tI@tt~@i~tflijffut.11.Ii.i.§~ IE§lfll lflif~Elf Section 2:2~1: Noncompliance. Any transaction failing to comply with this Resolution in any respect is voidable in the discretion of the Boards of Directors, and any employee willfully and knowingly violating any provision of this Resolution may be TI.W:pj:1'34250:Draft No. 5:10117/96 21 subject to disciplinary action. Section 26:U : Seyerabjjjty. If any section, subsection, subdivision, sentence, clause ·or phrase of this Resolution is for any reason held to be unconstitutional or otherwise invalid, such invalidity shall not affect the validity of the entire Resolution or any of the remaining portions thereof. The Boards of Directors hereby declare that they would have passed this Resolution, and each section, subsection, subdivision, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses or phrases be declared unconstitutional or otherwise invalid. Section 242-B: Repeal of Conflicting Rules. Resolution No. 86-81 and all Resolutions or motions, or portions thereof in conflict herewith, are hereby rescinded and made of no further effect. SecUon 252§: Effective Date. This Resolution shall take effect immediately upon adoption by the Boards of Directors. PASSED AND ADOPTED at a regular meeting held ___ _ ll.W:pj:134250:Draft No. 5:10117/98 22 PDC: FAHR: 11113196 EXEC: STEER: JT.BDS: All AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: ,,-------.\ AGENl 1 ITEM TRANSMITTAL @ CONTACT FOR INFORMATION 2520, Mike Peterman, Ext. 2105 Division No., Name, and Extension EMPLOYMENT STATUS REPORT: Total headcount for October, 1996 at the Districts. Recommended Action(s): Receive and file the Employment Status Report. CEQA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on_ and Notice of Determination filed on_ BUDGET INFORMATION TOTAL BUDGETED AMT.: $ N/A SOURCE: CORF JO DISTRICTS Schedule/Line Item: AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION CURRENT YEAR BUDGET AMOUNT NIA ORIGINAL BID, PO, CONTRACT AMOUNT NIA WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent Limited Term CONCURRENCES: Signature Date Division rv,anager j_Or Design -7/l{~~~ . v r.r----. 10 -3i-1b Signature Date Department Head (Or Designee) ~·w~~ iature Date Assistant General Manager (Or Designee) DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: NIA CURRENT YEAR- TO-DATE EXPENDITURES NIA CHANGE ORDERS, FUNDS PREV. APPROVED NIA YEAR-TO-DATE BUDGET BALANCE NIA AMOUNT REQUESTED THIS AIT NIA REVISED BUDGET TOTAL (Total Budget plus Transfers) NIA AMENDED PROJECT AMOUNT NIA REQUIRES BOARD POLICY ACTION? NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: 1. October 1996 Employment Status Report. To Jt. Bds.: 1. CSDOC e PO Rnv R1 ?7 e Fnoont,.in v,.11.,v CA !'l?7?R-R1 ?7 e 171 '1\ !'lR?-?'111 ADDITIONAL INFORMATION (Background and/or Summary) The Districts have a Full-time equivalent (FTE) headcount of 597.25 as of October 29, 1996. The actual body count is 607. The current FTE headcount is equivalent to a 4.5% reduction from the budgeted 624 positions. The one month turnover rate for October, 1996 was .33%. Staff will maintain a monthly monitoring of changes to keep the Committee fully informed about changes as they occur. ps c: Department Head AGM-Administration AGM-Operations General Manager H:\WP.DTA\HR\2520\STEEVES\1196.AIT Revision: 8/28/96 Page 2 of 2 Employment Status Report Run Date: 29-Oct-96 Regular Regular Total Regular Part-time Part-time Actual Vacant Total Full-tJme 20hours 30hours Contract Intern LOA Headcount Positions Positions 2150 -General Management Administration 6 0 0 0 0 0 6 0 6 2160 -Board Secretary 3 0 0 0 0 0 3 0 3 2190 -Communications 8 0 0 0 0 1 9 0 9 Total General Management 17 0 0 0 0 1 18 0 18 2210 -Finance Administration 4 0 0 0 0 0 4 0 4 2220 -Accounting 20 0 0 0 0 0 20 0 20 2230 -Purchasing & Warehousing 16 0 1 0 0 0 17 0 17 Total Finance 40 0 0.75 0 0 0 41 0 41 2410 -General Services Administration 5 0 0 0 1 0 6 1 7 2420 -IT Hardware Support 4 0 0 1 0 0 5 0 5 2430 -IT Software Support 9 0 0 0 0 0 9 1 10 2440 -Plant Automation Support 6 0 0 0 0 0 6 0 6 2450 -Collection Facilities Maintenance 29 0 0 0 0 0 29 2 31 2460 -Plant Facilities 44 0 0 0 0 1 45 1 46 Total General Services Admin. 97 0 0 1 0.5 1 100 5 105 2520 -Human Resources 5 2 0 0 0 0 7 0 7 2530 -Safety & Emergency Response 5 0 0 0 1 0 6 0 6 2540 -Education & Training 6 0 0 0 0 0 6 0 6 Total Human Resources 16 1 0 0 0.5 0 19 0 19 3410 -Operations & Maintenance Admin. 13 0 0 1 4 0 18 2 20 3420 -0 & M Scheduling 6 0 0 0 0 0 6 0 6 3430 -Plant Operations 1 39 0 0 0 0 0 39 2 41 3440 -Plant Operations 2 53 0 1 0 0 1 55 1 56 3450 -Mechanical O & M 60 0 0 0 0 0 60 3 63 3460 -Electrical O & M 26 0 0 0 0 1 27 0 27 3470 -Instrumentation O & M 33 0 0 0 0 0 33 0 33 3490 -Central Generation Operations 13 0 0 0 0 0 13 0 13 Total Opera.lions 243 0 0.75 1 2 2 251 8 259 3510 -Technical Services Administration 3 0 0 0 4 0 7 1 8 3550 -Environmental Compliance & Monitoring 19 0 1 2 1 0 23 0 23 3580 -Environmental Science Labroratories 30 1 2 0 0 2 35 2 37 3590 -Source Control 39 0 0 0 0 1 40 0 40 Total Technical Services 91 0.5 2.25 2 2.5 3 105 3 108 3710 -Engineering Administration 2 0 0 0 0 0 2 0 2 3720 -Design Engineering 24 0 0 0 2 0 26 1 27 3730 -Engineering Planning 6 0 0 0 0 0 6 0 6 3790 -Construction Management 34 0 0 4 1 0 39 0 39 Total Engineering 66 0 0 4 1.5 0 73 1 74 Total 51affing 570 1.5 3.76 8 7 7 607 17 624 H:lexcel.dtalhr\steeves\empdiv.xls Total FTE Count 597.25! , For BCL Sec.. l • COMM. INFO. ITEM • COMM. ACTION ITEM • JT. BOS. CONSENT • JT. BOS. DISCUSSION (NON-CONSENn • PUBLIC HEARING ____ JT. BOS. MEETING DATE ____ JT. BOS. AGENDA ITEM NO. MEETING DATE OMTS: PDC: FAHR: 11-13-96 EXEC: STEER: JT.BDS: COMM. ID. NO. OMTS ___ _ P0C _____ _ FAHR 91, -b 9 EXEC ____ _ STEER ___ _ DISTRICT NO. ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN. \ ITEM TRANSMITTAL CONTACT FOR INFORMATION Av,,/ (Initials of Originator) I 2220, Michael D. White, Ext. 2520 Division No., Name, and Extension Consideration on the selection of the Districts' commercial bank. Recommended Action(s): Approve the selection of Union Bank of California to serve as the Districts' commercial bank for a three (3) year period commencing on January 1, 1997 with the Districts' option to renew for an additional two (2) years thereafter. CECA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on _ and Notice of Determination filed on_ BUDGET INFORMATION TOTAL BUDGETED AMT.: SOURCE: CORF JO DISTRICTS Schedule/Line Item: AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION CURRENT YEAR BUDGET AMOUNT N/A ORIGINAL BID, PO, CONTRACT AMOUNT N/A WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent _ Limited Term s· ture epartment Head (Or Designee) ~ w d<Jp. , o J 3 t Ir, Sig re Date Assistant General Manager (Or Designee) DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: N/A CURRENT YEAR- TO-DATE EXPENDITURES N/A CHANGE ORDERS, FUNDS PREV. APPROVED N/A YEAR-TO-DATE BUDGET BALANCE N/A AMOUNT REQUESTED THIS AIT N/A REVISED BUDGET TOTAL (Total Budget plus Transfers) N/A AMENDED PROJECT AMOUNT N/A REQUIRES BOARD POLICY ACTION? NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: 1. Attachment A To Jt. Bds.: 1. Attachment A Additional Information: Background Prior to the Orange County bankruptcy in December of 1994, the County Treasurer reviewed and signed the accounts payable and payroll warrants of the Districts, transferred funds from the Districts' investment funds held with the County into the Districts' designated bank account with Bank of America, and reconciled the Bank of America bank account statement against the Districts' investment funds with the County. Following the County bankruptcy, the Board of Directors authorized the Districts' Finance Director to serve as the Districts' Treasurer and to establish the policies, systems, and procedures necessary for performing all cash management functions in-house. This process had to be completed in a relatively short period of time in order for the Districts to be able to pay claims on Districts' check stock. In order to expedite the process, commercial banking services were sole sourced in January 1995 to Bank of America, the bank that was already familiar with our size and banking needs. Staff has now completed a competitive bid process to ensure that all of the Districts' commercial banking needs have been addressed and that these services are being obtained at the lowest possible cost to the Districts. Proposal For Commercial Banking Services In September 1996, Susan Cotton, of Money Matters, Inc., was contracted to perform a cash management review of the Districts' operations, develop a request for proposal (RFP) for commercial banking services, send RFPs to qualified banks in close proximity to the Districts, respond to questions submitted by bidders, structure and parti cipate in interviews of short-list candidates. and prepare comparative evaluation of bids for the Districts' review and final selection. Ms. Cotton is a Certified Cash Manager and was previously a Vice-President with First Interstate Bank and oversaw the Bank's Government Unit. Following the review of the cash management operations, the RFP was developed and released on September 12, 1996. Listed below is a table on the schedule for the selection of a commercial bank: Activity Due Date For Vendor Questions Release of Responses to Vendor Questions Proposal Due Date Bank Interviews Finalist Notified Recommendation to Finance Committee Bank Award by Joint Boards Commencement of Contract September 20, 1996 Week of September 23, 1996 October 4, 1996 Week of October 14, 1996 Week of October 21, 1996 November 13, 1996 November 20, 1996 January 1, 1997 The request for proposal was submitted to five regional commercial banks that were in close proximity to the Districts. These five banks consisted of Bank of America, Sanwa Bank, Sumitomo Bank of California, Union Bank of California, and Wells Fargo Bank. All five banks submitted proposals to the Districts for consideration. These proposals were reviewed by the Districts' Director of Finance, Controller, Finance Manager, and Ms. Cotton. Based upon these reviews, it was determined that Sumitomo Bank and Wells Fargo Bank should not be considered any further for the following reasons: H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\NOV.AIT\FAHR96.68 Revision: 8/28/96 Page 2 of 3 Sumitomo Bank- • It was determined that Sumitomo was not an approved State depository. • No Government Services Unit, just one person who handles public agency accounts. • Proposal did not indicate the bank's ability to provide for two requisite cash management services, end of the day sweep account or positive pay. • The RFP requested five references, but only two were provided. Wells Fargo- • No Government Services Unit dedicated to serving public agency clients. • Concerns on the impacts to customers on the acquisition/conversion with First Interstate Bank. • Wells Fargo's proposal was the highest pricing of the five banks. Recommended Vendor For Commercial Banking Services Bank interviews for the three finalists were conducted on Wednesday, October 16, by the Controller, Finance Manager, and Ms. Cotton. It was at these interviews that staff discovered that Sanwa's sweep account service was actually an intra-day sweep, requiring controlled disbursements on a bank account address in the State of Tennessee, as opposed to an end of the day sweep whereby any excess of funds are automatically transferred into an overnight investment such as a repurchase agreement or U.S. Treasury obligations. Sanwa's intra-day sweep service in essence defeats the purpose of utilizing such a cash management service. In addition, Sanwa's fees were the highest of the three remaining banks. Of the two remaining banks, Bank of America and Union Bank of California were very comparable in the fact that both maintained Government Services Groups and offered end-of-day sweeps and positive pay services. However, there were three main factors that identified Union Bank of California as the best bank for providing commercial banking services to the Districts. Union Bank of California's fees were the lowest of all proposing vendors, and their end-of-the-day sweep account offers two investing options, overnight repurchase agreements that are backed with U.S. Treasury securities and are collateralized at 102 percent or a Treasury Money Market Fund that is rated AAA for credit quality by both Standard and Poor's and Moody's. Bank of America currently offers only the overnight repurchase agreement option. But the most compelling reason is that Union Bank of California can guarantee same day acceptance on all warrants issued by the County to the Districts because County checks are drawn against Union Bank of California. Staff estimates that the Districts' lose approximately $49,000 a year in interest because the County insists on disbursing all property tax and user fee apportionment by warrant instead of by electronic disbursement (wire transferring of funds). Since the County does not disburse these warrants until late morning or early afternoon on Fridays, the Districts' lose three days of interest because it takes a minimum of one banking day before County checks drawn on another bank are accepted. Included in Attachment A is a listing of the 19 most important factors used in developing a comparative analysis between the three finalist banks. As shown within this attachment, Union Bank of California is rated the best on 1 O of these factors and tied as the best on another 4. The second alternative, Bank of America, is rated the best on 3 of these factors and is tied as the best on another 5. Staff therefore recommends the selection of Union Bank of California to serve as the Districts' commercial bank for a three (3) year period commencing on January 1, 1997 with the Districts' option to renew for an additional two (2) years thereafter. Mw c: Department Head AGM-Administration AGM-Operations H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96WOV.AIT\FAHR96.68 Revision: 8/28/96 Page 3 of3 County Sanitation Districts of Ora, ·de County -Banking Services RFP ; October 22, 1996 $1 ,045 3 years Monthly 91 Day T-Bill less .10% 4.98% $400 $1,200 Govt. Services Los Angeles 300 Yes Yes Repos / Treas. 4.6 -5.5% Yes 10 pm Excellent -Bill Hill Retiring -Existing Bank -Best Pricing -No Conversion -Best Proposal Many Branches -OC Check Clearing Solution ATTACHMENT A (Comparative Analysis of Bids) $1 ,119 Union 3 years BofA Annual Sanwa 91 Day T-Bill BofA/ Sanwa 5.06% BofA $450+ BofA $1,000 Union Local Branch Union Huntington Beach ? -small clientele BofA / Union No BofA / Union No BofA / Union N/A Union N/A Union No Union 6 pm Union Fair -Good Union -No Auto. Sweep Union -No Govt. Group -No Depth in Market -Cash Mgmt.not as strong -Good Local Branch BofA / Union -Some Clients in OC For Bd. Sec. Us, ·, • COMM. INFO. ITEM • COMM. ACTION ITEM • JT. BOS. CONSENT • JT. BOS. DISCUSSION (NON-CONSENn • PUBLIC HEARING ____ JT. BOS. MEETING DATE ____ JT. BOS. AGENDA ITEM NO. MEETING DATE OMTS: PDC: FAHR: 11 /13/96 EXEC: STEER: JT.BDS: COMM. ID. NO. OMTS ____ _ PDC FAHR-_(Ji...,..&,--,-9-·- EXEC _____ 1 STEER ___ _ DISTRICT NO. ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEND ITEM TRANSMITTAL © CONTACT FOR INFORMATION (Initials of Originator) 2220, Michael D. White, 2520 Division No., Name, and Extension Consideration of motion to receive, approve and file the Comprehensive Annual Financial Report for the year ended June 30, 1996 that was prepared by staff and audited by Moreland & Associates, Certified Public Accountants; the annual Management Letter; the Auditor's Report to the Finance, Administrative and Human Resources Committee; and the Appropriations Limit Report; and forward the Comprehensive Annual Financial Report to the Executive Committee. Recommended Action(s): Staff recommends the Committee receive, approve and file the Comprehensive Annual Financial Report for the year ended June 30, 1996 and forward it to the Joint Boards. CEQA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on_ and Notice of Determination filed on_ BUDGET INFORMATION TOTAL BUDGETED AMT.: N/A SOURCE: N/A Schedule/Line Item: NIA AMOUNT OF TRANSFER: N/A Schedule/Line Item: NIA AIT/PROJECT COST INFORMATION CURRENT YEAR BUDGET AMOUNT N/A ORIGINAL BID, PO, CONTRACT AMOUNT N/A WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? N/A If YES, state number: Permanent Limited Term DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: N/A CURRENT YEAR- TO-DATE EXPENDITURES N/A CHANGE ORDERS, FUNDS PREV. APPROVED N/A YEAR-TO-DATE BUDGET BALANCE N/A AMOUNT REQUESTED THIS AIT N/A REVISED BUDGET TOTAL (Total Budget plus Transfers) N/A AMENDED PROJECT AMOUNT N/A I REQUIRES BOARD POLICY ACTION? NO If YES, explain in ADDITIONAL INFORMATION section 0MTSC0MM. Meeting Date: Approved: Amended: Forwarded to: Summary: /o 2c; ff, Date r,o zc,(f k, Date Date ATTACHMENTS -, AGENDA (list) To Committee: 1. Comprehensive Annual Financial Report for the year ended June 30, 1996. 2. Annual Management Letter. 3. Staffs Responses to the Annual Management Letter. 4. Auditor's Report to the F.A.H.R. Committee. 5. Appropriations Limit Report. To Jt. Bds.: 1. Comprehensive Annual Financial Report for the year ended June 30, 1996. 2. Annual Management Letter. 3. Staffs Responses to the Annual Management Letter. 4. Auditor's Report to the F.A.H.R. Committee. 5. Appropriations Limit Report. PDCC0MM. FAHRC0MM. JQIN<f" BOARDS The Districts' independent auditors, Moreland & Associates, have completed their examination of the Districts' financial statements for the year ended June 30, 1996 and have again issued an unqualified opinion on the Districts•· financial statements. Each year, the FAHR Committee reviews the results of the audit and the corresponding management letter. Michael Moreland, Partner, and Chuck Acocello, Senior Manager, will attend the meeting to respond to any questions of Directors. This year, staff has again prepared the a Comprehensive Annual Financial Report that incorporates the audited financial statements. This report, including the audited financial statements, were completely prepared in-house. For the last two years, the Districts' has earned the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA). This year's report will again be submitted to GFOA for their review in anticipation of another award. The Comprehensive Annual Financial Report, including the auditor's opinion letter, the management letter, staffs responses to the management letter, the Auditor's report to the FAHR, and the Auditor's Appropriations Limit Report are attached. If you should have any questions prior to the meeting, please call Gary Streed at (714) 962-2411, ext.2500; or Mike White, ext. 2520. Staff and the auditors will make a brief presentation at the meeting. Staff Recommendation: Staff recommends the Committee receive, approve and file the Comprehensive Annual Financial Report for the year ended June 30, 1996 and forward it to the Joint Boards. / c: Department Head AGM-Administration AGM-Operations General Manager C:\WPDATA \FAHR\96CAFRAIT Revision: 8/28/96 Page 2 of2 Moreland&~ CERTIFIED PUBLIC ACCOUNTANTS September 6, 1996 The Finance, Administration and Human Resources Committee of the County Sanitation Districts of Orange County 10844 Ellis Avenue Fountain Valley, CA 92827-8127 1201 DOVE STREET, SUITE 680 NEWPORT BEACH, CALIFORNIA 92660 (714} 221-0025 2111 PALOMAR AIRPORT ROAD, SUITE 150 CARLSBAD, CALIFORNIA 92009 (619} 431-8476 The Finance, Administration and Human Resources Committee: We have audited the combined financial statements of the County Sanitation Districts of Orange County (Districts) for the year ended June 30, 1996, and have issued our report thereon dated September 6, 1996. Under generally accepted auditing standards, we are providing you the attached information related to our audit Our responsibility under generally accepted auditing standards is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement and are fairly presented in accordance with generally accepted accounting principles. Because of the concept of reasonable assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud and defalcations, may exist and not be detected by us. In addition, we considered the internal control structure of the Districts. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control structure. Significant Accounting Policies The significant accounting policies of the Districts are described in Note 1 to the combined financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year. We noted no significant, unusual transactions during the year, or transactions for which there is a lack of authoritative guidance or consensus. Management Judgments and Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based upon management's current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. The judgments and estimates which may significantly -~ The Finance, Adminis1 10n and Human Resources Committee of the County Sanitation Districts of Orange County September 6, 1996 Page 2 effect the District's combined financial statements include establishing appropriate reseives for material liabilities such as general liability and workers' compensation claims. During our audit of the combined financial statements, we performed procedures to determine the reasonableness of the estimates used by management. These procedures included but were not limited to reviewing a third party administrator's report summarizing the liability needed for claims against the Districts' and inquiries of the Districts' Attorney. Based on these and other procedures performed, we were able to conclude that the liabilities recorded by management were reasonable. Significant Audit Adjustments As a result of our audit related testwork, we proposed no corrections of the financial statements that, in our judgment, either individually or in the aggregate, had a significant effect on the Districts' financial reporting process. Other Information in Documents Containing Auclited Financial Statements Our responsibility for other information in documents containing the Districts' combined financial statements and our report thereon does not extend beyond financial information identified in our report, and we have no obligation to perform any procedures to corroborate other information contained in these documents. We have, however, read the other information included in the Districts' comprehensive annual financial report; and no matters came to our attention that cause us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or its manner of presentation, appearing in the financial statements. Disagreements With Management There were no disagreements with management on financial accounting and reporting matters that, if not satisfactorily resolved, would have caused a modification to our report on the Districts' 1996 financial statements. Consultation With Other Accountants We are not aware of any instances where management has consulted with or obtained opinions, written or oral, from other independent accountants during the past year that were subject to the requirements of Statement on Auditing Standards No. 50, Reports on the Application of Accounting Principles. • ----' The Finance, Adminis, ion and Human Resources Committee of the County Sanitation Districts of Orange County September 6, 1996 Page 3 Major Issues Discussed With Management Prior to Retention We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Districts' auditors. These discussions occurred in the normal course of our professional relationship. This information is intended solely for the use of the Finance, Administration and Human Resources Committee and the Joint Board of Directors of the Districts, and should not be used for any other purpose. However, we understand that this document may be public information. November 13, 1996 MEMORANDUM TO: Finance, Administration and Human Resource Committee FROM: Michael D. White, Controller SUBJECT: Management Letter Comments for the Year Ended June 30, 1996 As a part of their engagement, Moreland & Associates was asked to prepare a management letter for your review. The purpose of a management letter is to comment upon, and to make recommendations that may improve internal controls or other phases of financial operations. The letter has been completed and is enclosed. This memo will supplement the comments with staff's understanding of the recommendations and will advise the Committee of any actions taken or being taken to implement the recommendations where appropriate. Staff is pleased to report that the auditors noted no matters that they considered to be of a material weakness. Investments The auditors noted that current investment procedures of the Districts' only include the review of monthly investment reports prepared by Mellon Trust, the Districts' custodian bank, to ensure that the p~ior month's ending balance was properly carried forward as the beginning balance of the following month's report, and that the reported transactions were in conformance to the Districts' investment policy. The auditors also recommended that the Districts obtain and retain broker/dealer confirmation notices for all investment transactions as evidence of reported investment transactions. Staff concurs with the Auditors recommendation and have now contacted the Districts' investment managers, Pacific Investment Management Company, requiring them to notify all broker/dealers who provide services on the purchase or sale of securities on behalf of the Districts' account to provide confirmation notices on all completed transactions directly to the Districts. In addition, staff will reconcile these notices against the Mellon Trust report at month end. CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411 Management Letter for the Year Ended June 30, 1996 Page 2 November 13, 1996 Treasurer's Report and Investment Policy The Auditors noted that the Treasurer's Reports for the last half of the fiscal year 1995-96 did not comply with the reporting requirements of California Government Code Section 53646 , effective January 1, 1996 and recommended that the Districts' comply with California Government Code Section 53646; and that the annual investment policy to the Board of Directors was not rendered within the required time frame of one year. As of the October Treasurer's Report, the Districts' were in compliance with the reporting requirements of the California Government Code Section 53646, which includes: • a statement of the Districts' ability to meet expenditure requirements for the subsequent six months. • rendering the Treasurer's report to the Board of Directors within thirty days of month end. • reporting on all cash and investments held by the Districts including amounts held with the County of Orange, the amounts held in the worker's compensation bank account, and amounts within the Districts' deferred compensation account. The Districts' Treasurer will also ensure that the next annual investment policy will be rendered to the Board of Directors within the required time frame of one year, or by September 1997. C:\WPDATA\FAHR\MGTL TRSP.AIT September 6, 1996 The Finance, Administration and Human Resources Committee of the County Sanitation Districts of Orange County 10844 Ellis Avenue Fountain Valley, CA 92827-8127 12U1 DOVE STREET, SUITE 680 NEWPORT BEACH, CALIFORNIA 92660 {714) 221-0025 2111 PALOMAR AIRPORT ROAD, SUITE 150 CARLSBAD, CALIFORNIA 92009 (619) 431-8476 The Finance, Administration and Human Resources Committee: We have audited the combined financial statements of the County Sanitation Districts of Orange County (Districts) as of and for the year ended June 30, 1996, and have issued our report thereon dated September 6, 1996. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. In planning and performing our audit of the combined financial statements of the Districts for the year ended June 30, 1996, we considered its internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the combined financial statements and not to provide assurance on the internal control structure. The management of the Districts is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of combined financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. The Finance, Ad.minis. }on and Human Resources Committee of the County Sanitation Districts of Orange County September 6, 1996 Page 2 Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under the standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the combined financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. However, we noted the following matters of less significance involving the internal control structure. INVESTMENTS During our testing of investment transactions, we noted that the Districts place heavy reliance on their custodial agent to properly post all investment transactions to the custodial records. Current investment procedures include reviewing monthly investment reports prepared by the custodial agent to ensure that the prior month's ending balance was properly carried forward as the beginning balance in the subsequent month's report, and the reported transactions were in conformance to the Districts' investment policy. The Districts do not obtain and compare broker/dealer confirmations to the reported investment transactions to ensure proper posting of the transaction. We recommend the Districts obtain and retain broker/dealer confirmation notices for all investment transactions as evidence of reported investment transactions. TREASURER'S REPORTS AND INVESTMENT POLICY We noted that the March, April, May and June 1996 Treasurer's Reports and the annual Investment Policy did not comply with California Government Code Section 53646, effective January 1, 1996 as follows: 1. The Treasurer's Reports did not include a statement of the Districts' ability to meet expenditure requirements for the subsequent six months. 2. The Treasurer's Reports were not rendered to the Board of Directors within thirty days of month end. 3. The Treasurer's Reports did not report all cash and investments held by the Districts. The excluded information included: a. the cash balance held by the County of Orange in the Orange County Investment Pool; • The Finance, Administr~n and Human Resources Committee of the County Sanitation Districts of Orange County September 6, 1996 Page 3 b. the cash balance in the workers' compensation account; and c. the deferred compensation account balance. 4. An annual investment policy was not rendered to the Board of Directors within one year of the previous policy. (The previous policy was effective May 24, 1995 and the replacement policy was prepared for submittal to the Board in September 1996.) We recommend the Districts' Treasurer's Reports be prepared and rendered in compliance with California Government Code Section 53646. We also recommend that the annual investment policy be rendered to the Board of Directors within the required time frame of one year. This report is intended for the information of management and the Finance, Administration and Human Resources Committee of the Districts. This restriction is not intended to limit the distribution of this report, which is a matter of public record. We would like to express our appreciation for the courtesy and assistance extended to us during our audit by all of your staff. We would be pleased to discuss with you at your convenience the matters contained in this letter or any other matters which you would like to discuss. Moreland &~6ociale<Y CERTIFIED PUBLIC ACCOUNTANTS September 6, 1996 The Finance, Administration and Human Resources Committee of the County Sanitation Districts of Orange County 1201 DOVE STREET, SUITE 680 NEWPORT BEACH, CALIFORNIA 92660 (714) 221-0025 2111 PALOMAR AIRPORT ROAD, SUITE 150 CARLSBAD, CALIFORNIA 92009 (619) 431-8476 Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets We have applied the procedures enumerated below to the accompanying Appropriations Limit worksheet No. 6 (or other alternative computation) for each of the County Sanitation Districts #1, 2, 3, 5, 6, 7, and 11 of Orange County (Districts) for the year ended June 30, 1996. These procedures, which were agreed to by the Districts and the League of California Cities (as presented in the League publication entitledArticleXIIIB Appropriations Limitation Uniform Guidelines) were performed solely to assist the Districts in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. This engagement to apply agreed-upon procedures was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the specified users of the report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: 1. We obtained the completed worksheets No. 1 through No. 7 ( or other alternative computations) and determined that the limit and annual adjustment factors were adopted by resolution of the Board of Directors. We also determined that the population and inflation options were selected by a recorded vote of the Board of Directors. 2. For the accompanying Appropriations Limit worksheet No. 6, we added line A, last year's limit, to line E, total adjustments, and agreed the resulting amount to line F, this year's limit. 3. We agreed the current year information presented in the accompanying Appropriations Limit worksheet No. 6 to the other worksheets described in No. 1 above. 4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit worksheet No. 6 to the prior year appropriations limit adopted by the Board of Directors during the prior year. We were not engaged to, and did not, perform an audit, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit worksheet No. 6 ( or other alternative computation). Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the use of the Districts and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. However, this report is a matter of public record and its distribution is not limited. ~ -~ I . COUNTY SANI'.1ATION DISTRICTS OF ORANGE COuJ.'ITY, DISTRICT #1 APPROPRIATIONS UMIT WORKSHEET #6 FY 1995-96 BUDGET AMOUNT A. LAST YEAR'S UMIT $2,628,147 I B. ADJUSTMENT FACTORS 1. Population % .28%1 2. Inflation% 4.72% Total Adjustment % 5.01%1 C. ANNUAL ADJUSTMENT $131,853 I D. OTHER ADJUSTMENTS: Assumed Responsibility (Lost Responsibility) (Transfer to Private) (Transfer to Fees) Sub-total E. TOTAL ADJUSTMENTS $131,853 I F. CURRENT YEAR LIMIT s2,160,ooo 1 A. B. C. D. E. F. ) j COUNTY SANl'lATION DISTRICTS OF ORANGE COul'ITY, DISTRICT #2 APPROPRIATIONS UMIT WORKSHEET #6 IAST YEAR'S UMIT ADJUSTMENT FACTORS 1. Population % 2. Inflation% Total Adjustment % ANNUAL ADJUSTMENT OTHER ADJUSTMENTS: Assumed Responsibility (Lost Responsibility) (Transfer to Private) (Transfer to Fees) Sub-total TOTAL ADJUSTMENTS CURRENT YEAR UMIT FY 1995-96 BUDGET AMOUNT $9,897,392 I 1.77% 4.72% 6.57%1 $650,60 8 I $650,608 I 1 s10,54s,ooo 1 A. B. C. D. E. F. ) ,..---...__ \ j COUNTY SANI'lATION DISTRICTS OF ORANGE COu.NTY, DISTRICT #3 APPROPRIATIONS LIMIT WORKSHEET #6 LAST YEAR'S LIMIT ADJUSTMENf FACTORS 1. Population % 2. Inflation% Total Adjustment % ANNUALADJUSTMENf OTHER ADJUSTMENfS: Assumed Responsibility (Lost Responsibility) (Transfer to Private) (Transfer to Fees) Sub-total TOTAL ADJUSTMENfS CURRENf YEAR LIMIT FY 1995-96 BUDGET AMOUNf 1 s13,6o5,671 I 1.92% 4.72% 6.73%! $915,329 I $915,329 J 1 s14,s21,ooo 1 A. B. C. D. E. F. ) ) COUNTY SANI'.1ATION DISTRICTS OF ORANGE COu1-ITY, DISTRICT #5 APPROPRIATIONS LIMIT WORKSHEET #6 LAST YEAR'S UMIT ADJUSTMENT FACTORS 1. Population % 2. Inflation% Total Adjustment % ANNUAL ADJUSTMENT OTHER ADJUSTMENTS: Assumed Responsibility (Lost Responsibility) (Transfer to Private) (Transfer to Fees) Sub-total TOTAL ADJUSTMENTS CURRENT YEAR UMIT FY 1995-96 BUDGET AMOUNf $2,460,324 I 1.08% 4.72% 5.85%1 $143,676 I $143,676 I $2,604,000 1 A. B. C. D. E. F. I I COUNTY SANI'1n.TION DISTRICTS OF ORANGE COv ... -ITY, DISTRICT #6 APPROPRIATIONS LIMIT WORKSHEET #6 FY 1995-96 BUDGET LAST YEAR'S LIMIT ADJUSTMENT FACTORS 1. Population% 2. Inflation% Total Adjustment % ANNUAL ADJUSTMENT OTIIBR ADJUSTMENTS: Assumed Responsibility (Lost Responsibility) (Transfer to Private) (Transfer to Fees) Sub-total TOTAL ADJUSTMENTS CURRENT YEAR LIMIT AMOUNT $1,s90,1111 1.45% 4.72% 6.23%1 $98,829 I $9s,s29 1 $1,689,ooo 1 A. B. C. D. E. F. -\ ~ I ,, COUNTY SANI1ATION DISTRICTS OF ORANGE COLll'ITY, DISTRICT #7 APPROPRIATIONS LIMIT WORKSHEET #6 FY 1995-96 BUDGET LAST YEAR'S LIMIT ADJUSTMENT FACTORS 1. Population% 2. Inflation% Total Adjustment % ANNUAL ADJUSTMENT OTIIBR ADJUSTMENTS: Assumed Responsibility (Lost Responsibility) (Transfer to Private) (Transfer to Fees) Sub-total TOTAL ADJUSTMENTS CURRENT YEAR LIMIT AMOUNT $4,366,555 I 5.08% 4.72% 10.04%1 $438,445 I $438,445 I s4,8o5,ooo 1 A. B. C. D. E. F. ') 1 COUNTY SANI1.r.1.IION DISTRICTS OF ORANGE CO'L ... ~TY, DISTRICT #11 APPROPRIATIONS LIMIT WORKSHEET #6 FY 1995-96 BUDGET LAST YEAR'S LIMIT ADJUSTMENT FACTORS 1. Population% 2. Inflation% Total Adjustment % ANNUAL ADJUSTMENT OTHER ADJUSTMENTS: Assumed Responsibility (Lost Responsibility) (Transfer to Private) (Transfer to Fees) Sub-total TOTAL ADJUSTMENTS CURRENT YEAR LIMIT AMOUNT $2,992,414 I .27%1 4.72~ 5.00%1 $149,586 I $149,586 I $3,142,0001 For Bd, Sec; U1 • COMM. INFO. ITEM • COMM. ACTION ITEM • JT. BOS. CONSENT • JT. BOS. DISCUSSION (NON-CONSENn • PUBLIC HEARING ____ JT. BOS. MEETING DATE ____ JT. BOS. AGENDA ITEM NO. MEETING DATE COMM. ID. NO. OMTS: OMTS PDC: PDC 'i. FAHR: 11/13/96 FAHR 'J.fi_-1tJ EXEC: EXEC STEER: STEER JT.BDS: DISTRICT NO. ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGENC"\ ITEM TRANSMITTAL (j) CONTACT FOR INFORMATION 2220, Michael D. White, 2520 Division No., Name, and Extension Consideration of motion to review, approve and file the Financial and Operational Report for the First Quarter Ended September 30, 1996. Recommended Action{s): Staff recommends that the Committee review, approve and forward the 1995-96 Financial and Operational Report for the First Quarter Ended September 30, 1996 to the Joint Boards. CEQA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on _ and Notice of Determination filed on _ BUDGET INFORMATION TOTAL BUDGETED AMT.: $ SOURCE: CORF JO DISTRICTS Schedule/Line Item: AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION CURRENT YEAR BUDGET AMOUNT NIA ORIGINAL BID, PO, CONTRACT AMOUNT N/A WILL PROJECT REQUIRE ADDITIONAL PERSONNEL 7 NO If YES, state number: _ Permanent Limited Term /0/:->0£~ Date ad (Or Designee) ~ @';::;;-i, Ct)~~ /6 /st(?" Siture Date Assistant General Manager (Or Designee) DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: N/A CURRENT YEAR- TO-DATE EXPENDITURES N/A CHANGE ORDERS, FUNDS PREV. APPROVED N/A YEAR-TO-DATE BUDGET BALANCE N/A AMOUNT REQUESTED THIS AIT N/A REVISED BUDGET TOTAL (Total Budget plus Transfers) N/A AMENDED PROJECT AMOUNT N/A REQUIRES BOARD POLICY ACTION? NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: 1. Financial and Operational Report for the Quarter Ended September 30, 1996. To Jt. Bds.: 1. Financial and Operational Report for the Quarter Ended September 30, 1996. ~ OMTS c,..-M. PDC COMM. FAH ' OMM. JOINT BOARDS Meeting Date: l I -Approved: -: .. ~ I ' Amended: Foiwaraed to: I I - I 1, Attached, in a separately bound document, is the Districts' First Quarter Financial and Operational Report for the Quarter Ended June 30, 1996. This report is a consolidation of both the financial and operational accomplishm~nts ·of the Districts' as of the end of the first quarter of fiscal year 1996-97. Contained within this report are budget summary reviews of the Joint Operating, the Capital Outlay Revolving Fund, individual District Funds, and the Self-Insurance Funds. Also contained within this report is the status of the divisional performance objectives and workplan milestones identified in the 1996-97 Approved Budget. As indicated within the Overview Section of this report, 24.06 percent or $11,717,772 of the 1996-97 net joint operating budget of $48.7 million has been expended. Although net costs have increased 5.49 percent in comparison with the same period last year, the Districts' are still at 24.06 percent of the budget. The total cost per million gallons at September 30, 1996 is $524 based on flows of 22,345 million gallons. This is $32 or 5.76 percent below the budgeted cost per million gallons of $556. I~ c: Department Head AGM-Administration AGM-Operations General Manager C:\WPDATA\FAHR\1 STQTRPT.AIT Revision: 8/28/96 Page 2 of 2 For Bd. Sec. • COMM. INFO. ITEM • COMM. ACTION ITEM • JT. BOS. CONSENT • JT. BOS. DISCUSSION (NON-CONSENTI • PUBLIC HEARING ____ JT. BOS. MEETING DATE ____ JT. BOS. AGENDA ITEM NO. MEETING DATE OMTS: PDC: FAHR: 11/13/96 EXEC: STEER: JT.BDS: COMM. ID. NO. OMTS. ____ _ PDC_--..-r-----,-,,- FAHR q,-1/ EXEC._ ___ _ STEER. ___ _ DISTRICT NO. ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN. \ ITEM TRANSMITTAL ® CONTACT FOR INFORMATION /u,J/ (Initials of Originator) 2220, Michael D. White, 2520 Division No., Name, and Extension Progress report on the implementation of the new financial information system. Recommended Action(s): Information Only. CEQA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on _ and Notice of Determination filed on_ BUDGET INFORMATION TOTAL BUDGETED AMT.: $ SOURCE: CORF JO DISTRICTS Schedule/Line Item: AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION CURRENT YEAR BUDGET AMOUNT N/A ORIGINAL BID, PO, CONTRACT AMOUNT N/A WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent _ Limited Term DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: N/A CURRENT YEAR- TO-DATE EXPENDITURES N/A CHANGE ORDERS, FUNDS PREV. APPROVED N/A YEAR-TO-DATE BUDGET BALANCE N/A AMOUNT REQUESTED THIS AIT N/A REVISED BUDGET TOTAL (Total Budget plus Transfers) N/A AMENDED PROJECT AMOUNT N/A REQUIRES BOARD POLICY ACTION? NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) -+-+--'=;....,:..,:;.-"--'~=:P---,,L.......C...---+c~"""""'-'------/-O__;_j_J> t( 'Y(;, To Committee: 1. None. Date r(~ Si ature To Jt. Bds.: 1. None. Department Head (Or Designee) ~-w~M Signte Date Assistant General Manager (Or Designee) ADDITIONAL INFORMATION: Background At the July 24, 1996, the Joint Board of Directors authorized the General Manager to execute a contract for a new financial information system with J.D. Edwards and Company, and approved the purchase of the hardware and hardware operating system from the California Multiple Awards Schedule (CMAS) for a combined amount not to exceed $1,485,000. Contract negotiations were completed with J.D. Edwards resulting In a signed contract totaling $1,239,901 for software licenses, system installation, training, and data conversion. The IBM AS/400 hardware and hardware operating system was purchased from CMAS for a total of $169,652. The total system cost of $1,409,553 is $75,447 below the Board authorized amount. Project Scheduling and Status We have completed a Project Scheduling Workshop meeting with J.D. Edwards and the Kerry Consulting Group, the Districts' implementation consultant. for the purpose of accomplishing the following objectives: • Development of a high level strategy for implementation. • Development of the application phase sequencing. • Identification of the data to be converted and the methodology of conversion (manually or automated). • Identification of the required interfaces with other computerized systems. • Development of a plan for Redesign of the Districts' businesses processes to match with, and take advantage of, the J.D. Edwards financial system. • Identification of the required resources from all parties. • Identification of the required training. • Establishment of the project timeline. As a result of the Project Scheduling Workshop, the following project time line was established: Phase Phase I Phase II Phase Ill Phase IV Applications Payroll/H.R. Benefits Budgeting Human Resource Safety & Training General Ledger Accounts Payable Cash Receipts/Accounts Receivable Fixed Assets Purchasing Inventory Management Job Cost Contract Management One World Projected Completion Date January 1, 1997 February 1, 1997 June 30, 1997 September 30, 1997 June 30, 1998 A detailed project implementation plan is currently in development that identifies all staffing requirements, when the different staffing components will be needed, training participants, when training is to take place, data conversion responsibilities, when the conversion is to be performed, work flow analysis requirements , and when it is to be completed and incorporated into the software processes. H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\NOV.AlnFAHR96.71 Revision: 8/28/96 Page 2 of3 Eight staff members have recently cc....,oleted a two week payroll and human resor"'~S benefit training program at the J.D. Edwards training facility in Costa Me This group will next be focusing on the Cl \rsion of employee data from the Districts' old financial information system into the new J.D. Edwards financial information system. Hardware Implementation The IBM AS/400, the hardware platform that runs the J.D. Edwards software applications, was delivered to the Districts' on October 25, 1996. This platform resides within the first floor of the Control Center along with all of the other minicomputers and network servers of the Districts. IBM representatives installed the IBM hardware operating system on October 30, and we are currently scheduling a date with J.D. Edwards technicians for installing the J.D. Edwards software applications onto the IBM AS/400. wv/ c: Department Head AGM-Administration AGM-Operations General Manager C:\WPDATA\FAHR\FISUPDAT.AIT Revision: 8/28/96 Page 3 of 3 OMTS: PDC: FAHR: 11/13/96 EXEC: STEER: JT.BDS: ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN :--'\ ITEM TRANSMITTAL ® 2540, Linda Eisman, Ext. 2104 Division No., Name, and Extension RECEIVE AND FILE STAFF SUMMARY REPORT ON TRAINING FOR FIRST QUARTER FISCAL YEAR 96/97. Recommended Acti on(s): Receive and file staff summary report on Training for first quarter fiscal year 96/97. CEQA REVIEW: Project is Exempt: NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on _ and Notice of Determination filed on_ BUDGET INFORMATION N/A CURRENT YEAR TOTAL BUDGETED AMT.: $ BUDGET AMOUNT SOURCE: CORF JO DISTRICTS Schedule/Line Item: N/A AMOUNT OF TRANSFER: Schedule/Line Item: AIT/PROJECT COST INFORMATION ORIGINAL BID, PO, CONTRACT AMOUNT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent Limited Term Signature Department Head (Or Designee) ~-wc..R.....1;.,. ture Date 1,-s-rb Date Date Assistant General Manager (Or Designee) DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET TO-DATE BUDGET BALANCE TOTAL EXPENDITURES (Total Budget plus Transfers) N/A N/A N/A CHANGE ORDERS, AMOUNT AMENDED PROJECT FUNDS PREV. REQUESTED THIS AMOUNT APPROVED AIT REQUIRES BOARD POLICY ACTION? NO If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: 1. Staff summary report on Training for first quarter fiscal year 96/97. To Jt. Bds.: 1. ADDITIONAL INFORMATION (Background and/or Summary) Attached is a staff summary report on Training for first quarter fiscal year 96/97. LE:dm c: Department Head AGM-Administration AGM-Operations General Manager H:\WP .OTA \HR\2540\MARTINEZ\FORMS\AIT-FORM Revision: 8/28/96 Page 2 of 2 November 5, 1996 BACKGROUND STAFF REPORT Human Resources Training Summary Report (First Quarter FY 96/97) From July 1, 1996 through September 30, 1996 the Human Resources Training Division conducted a total of 127 classes at a total cost of $90,274.15. This averaged out to be approximately $711.00 per class. Total attendance was 2,266 which averages to a cost of training of approximately $39.84 per student. Training efforts during the first quarter of FY 96/97 were focused primarily in the following areas: • Bringing the Districts' workforce into OSHA compliance by providing training to meet regulatory safety requirements • Providing training in Human Resources Policies and Procedures and Prevention of Sexual Harassment • Providing training on the Districts' new Windows NT system and customizing other computer training to meet specific local needs • Providing customized management training programs for the Executive Management Team, Division Managers and Supervisors • Establishment of effective cross-training and skill-based pay programs in support of workforce flexibility • Providing training to meet individual departmental needs as identified in the Districts Annual Training Plan • Ensuring the establishment of Individual Development Plans (IDPs) and providing IDP training to all Districts personnel • Establishing an Employee Wellness Program with informational seminars on related issues CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411 Quarterly Human Resour ,. J Training Summary Report Page 2 of 6 November 4, 1996 MAJOR PROGRAMS SAFETY TRAINING PROGRAM • Developed Safety Training Matrix in which 51 training areas for 212 job classification titles were identified • Established and implemented an Immediate Needs Safety Training Program designed to address critical areas where employees were at high risk • High Voltage Electrical Safety • Pure Oxygen Safety Training • Manlift Training • Crane Operator Safety Training • Forklift Operator Safety Training • Lockout/Tagout Training • Confined Space (Initial and Refresher) • SCBA Training (Respiratory Training) • CPR/First Aid, Blood borne Pathogens • Alcohol/Substance Abuse Training • Identified areas for Safety Division to establish of policies that will ensure equipment operators meet OSHA training requirements prior to operating equipment • Identified and began implementation of Phase 2 (non-critical areas) • Executive SEMS Training • Integrated Emergency response Program • Back Injury Prevention • Office Safety • Fire Safety Training • Injury, Illness and Prevention Program • Defensive Driving FUTURE SAFETY GOALS • Certify in-house trainers through the American Red Cross as CPR instructors so we may train "as required" • Gradually certify in-house trainers to conduct safety training in other areas deemed feasible by the Training and Safety Division • Redesign some existing safety training curricula for more cost effective Quarterly Human ResoL. ..,as Training Summary Report Page 3 of 6 November 4, 1996 application, i.e., evaluate alternative delivery systems, modify content to shorten length of training, etc. TRAINING MANAGEMENT AND REPORTING SYSTEM The Human Resources Training Division has implemented an automated database and tracking system. This system provides a centralized record keeping system for all Districts training, tracks associated costs, and generates informational reports. Its features include, but are not limited to the following: • Maintains individual training records showing all training an employee received, date and status of training. Copies of records can be furnished upon request to the employee, their supervisor or Department Head. These reports are distributed to all Departments at the end of each quarter. • Provides lists of all mandated training required by employee name, position and job title. Tracks expiration and renewal dates • Generates lists of employees who have not been trained in a particular area and require training. These lists are used to schedule training classes and identify for managers those personnel who are required to attend • Generates a Training Summary Report to show courses conducted, number of attendees, total classes per course, class hours, tuition costs and expenses during any specified time period. • Provides a listing all training by category, i.e., all safety training, computer, management, etc. and employees who have been trained in each course or category • Tracks evaluations and produce reports showing percentages • Tracks percentage of Training Expenditures and costs by Department • Tracks percentage of Training costs by category • Tracks technical certifications and renewal dates • Tracks employees who have Individual Development Training Plans and identify those still required to Departments INDIVIDUAL DEVELOPMENT PLANS (IDP) Quarterly Human Resour...._l Training Summary Report Page 4 of 6 November 4, 1996 • Established Individual Development Training Plans for all employees • Developed an Individual Development Plan (IDP) Handbook and distributed to all employees to help them and their supervisor better understand and follow the IDP process • Conducted training on IDPs for all employees • Reviewed plans and provided one-on-one training to employees and supervisors who had difficulty in understanding the process HUMAN RESOURCES TRAINING PROGRAMS We have established quarterly human resources training on District policies and procedures. These training sessions are conducted by the Human Resources Director and are required by the General Manager for Department Heads, Managers and Supervisors. Their focus is to keep Districts Management up-to-date on all human resources issues, policies and standardize procedures. We have completed Prevention of Sexual Harassment Training for the calendar year and are providing refresher training in late Spring and early Summer 1997. We have provided training on Prevention of Violence in the Workplace for Supervisors and Managers. This training focused on recognizing signs of potential violence, understanding District policies and procedures, and dealing with violence at the work site. We have also provided and coordinated other types of training as identified by individual departments in their annual training plan, i.e., Project Management Training using Primavera software, miscellaneous technical training, etc. We are currently developing the curriculum for a follow up MPRP training class. The class will be based on input provided by supervisors and managers during their training sessions and quarterly meetings with the General Manager. Training will be conducted in January through March 1997. CROSS TRAINING AND SKILL-BASED PAY The Human Resources Training Division has taken a major role in establishing effective cross-training and skill-based pay programs for District personnel in support of workforce flexibility. EMA was contracted in August of 1996 for Phase Two, "The Reinvention of Operations and Maintenance." The contract encompasses the following tasks: • Review of the Plant Automation Task Force Report Quarterly Human ResoL ~s Training Summary Report Page 5 of 6 November 4, 1996 • Develop Framework for Workforce Flexibility System • Form Core Teams and Work Teams • Assist in Preparation of phase three staging that outlines the scope, schedule and costs related to reinvention of the Operations and Maintenance Department EMA's strength lies more in mentoring the organization in the reengineering process, not designing and ensuring an effective training program. This is where the Districts training staff will need to play an important role. We are currently working with EMA and the Districts Assessment and Reinvention Team (D.A.R.T.) to develop a Strategy and Implementation Plan for the Districts. We are also working independently with EMA to ensure the objectives required for each D.A.R.T. training session are established and accomplished. We will be working closer with EMA and be heavily if not primarily involved in team training as the teams are formed. We will also establish training criteria and conduct on-site evaluations of the effectiveness of the program on a continuous basis, make recommendations and revisions as identified to ensure success of the cross-training program. We will also be working closely with D.A.R.T. and the Operating Engineer's Union, Local 501 to develop and implement a framework for Workforce Flexibility and the development of a Skill-based Pay Program. This will require the training staff to identify core competencies; develop and implement all training plans; and if needed, design an apprenticeship or equivalent program to meet the demands required of workforce flexibility. WELLNESS PROGRAM We have conducted a number of seminars open to all employees on various topics focused on helping our employees to maintain good health. These topics include: Quitting Smoking, Stress Management, Controlling High Blood Pressure, Controlling Cholesterol, Dealing with Change, Nutrition and Weight Control, Dealing with Financial Pressures and Coping with Career and Child-rearing Demands. These seminars are currently being offered during lunch times. Most are free of charge and sponsored through the Employee Assistance Program. COMPUTER TRAINING One of our goals this year has been to train all of our personnel on the Windows NT system as it is implemented. We are using a "just in time" approach and training personnel in each Department in accordance with the Information Technology Division's Implementation Plan. We have also requested an approved listing of software Quarterly Human Resour _ J Training Summary Report Page 6 of 6 November 4, 1996 programs the District will continue to use or be using in the future from the Information Technology Division to ensure we do not waste training dollars. Since they are currently working on the list, we have put a system in place to coordinate departmental training requests for computer training with the Information Technology Manager as identified by Departments in the Annual Training Plan. We have changed the Districts traditional practice of procuring computer training "as is" and ensure that training is now customized to meet our needs. As a re.suit, training evaluations have improved from "poor" ratings to "excellent" or "very good." SUPERVISOR TRAINING Our focus as a result of the recent Investigations is to develop a "Basic Supervisor" course for all supervisors. This course will focus on how to recognize and deal with drug and alcohol abuse problems; legal and ethical responsibilities; and emphasize the basics of how to supervise ( i.e., knowing where your employees are and what they are doing, field supervision, time-keeping, disciplining procedures, how to document performance; District policies and procedures, etc.). LE:dm H:\WP.DTA\HR\2540\MARTINEZ\FORMS\AITRPT2-.96 ~ ( EVALUATION OF CLASSES EXCELLENT (580) 29% POOR (1) 1% ADEQUATE (40) 2% July 1, 1996 to September 30, 1996 20% VERY GOOD (940) 48% PERCENTAGE OF TRAINING EXPENDITURES BY DEPARTMENT ENGINEERING 12% July 1, 1996 to September 30, 1996 (Total Expenditures= $90,274.15} GSA HR 4% O&M 56% •O&M •TECH SVCS • ENGINEERING •GM •FINANCE GSA •HR (~ ( PERCENT AGE OF TRAINING COSTS BY CATEGORY COMPUTER 19% JOB SKILLS/ TECHNICAL 28% 16% SAFETY 37% July 1, 1996 to September 30, 1996 .. ' November 13, 1996 _., 1o.8ci/lifisJ~;;:;t Consideration of Broker-of-Record for Property and Personnel ·.·· ·· · ·. '·. J Insurance Action "''t---------------------------+---------u i Consideration of Renegotiated MOUs (501 & OCEA) ' Consideration of Progress Report on Implementation of IT Audit Recommendations .,.:: Consideration of Progress Report on Removal of Obsolete . :-Inventory \fJA'NUARY ·· Consideration of Recommended Risk Management Work : Plan Consideration of Budget Assumptions and Fiscal Policies ·-'.Status Report on User Fees and Capital Program ': Consideration of Renegotiated MOUs (Professional & .,.,.,." . . .. __ : Supervisory) : • < ' :.- Action Information Information Action Action Information Only Action Action FEBRUARY: { Consideration of Network Hardware Upgrade ', ·1--------------------------+---------11 ' Consideration of Second Quarter Investment Program Update Consideration of Second Quarter Budget and Performance Review Consideration of Results of Broadbanding Study Consideration of Second Quarter Training Program Update Consideration of Results of Mid-Year Communications Audit H:IWP .DTAIFIN\2210\CRANEIFPC.MTGIFAHR.96\NOV.AlnCAL 11.96 CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411 Action Information Only Information Only Information Only Information Only