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1996-12-11
f I ,. :..:u th Qf, tee of the Secretal)' .~~~1 Ja£ita~nt,~~~-(ik_# 1 DEC 1 81996 DRAFT County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 Pr:., MINUTES OF FINANCE, By _ _!_:.t..::-!...--,A\rD:;-;M;;-;INISTRATION AND HUMAN RESOURCES COMMITTEE Wednesday, December 11, 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 December 11, 1996 at 5:30 p.m., at the Districts' Administrative Offices. ROLL CALL The roll was catted and a quorum declared present, as follows: Committee Directors Present: George Brown, Chair John J. Collins, Joint Chair Jan Debay Burnie Dunlap Thomas Saltarelli Roger R. Stanton, Vice Chair William G. Steiner Peer Swan, Vice Joint Chair Committee Directors Absent : John C. Cox, Jr. (PJC) James Flora John M.-Gullixson Wally Linn Other Directors Present: Eva Miner Bradford Staff Present: Donald F. McIntyre, General Manager Judith A. Wilson, 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 Greg Mathews, Principal Admin. Analyst Steve Kozak, Financial Manager Mike White, Controller Chris Dahl, Information Technology Manager Rob Thompson, Engineer Lenora Crane, Committee Secretary Others Present: Tom Woodruff, General Counsel Russ Patton, MOU Consultant APPOINTMENT OF A CHAIR PRO TEM No appointment was necessary. PUBLIC COMMENTS No comments were made. APPROVAL OF MINUTES It was moved, seconded and duly carried to approve the draft minutes of the November 13, 1996 meeting of the Finance, Administration and Human Resources Committee. Minutes of Finance, Admin .d Human Resources Committee Page 2 December 11, 1996 REPORT OF THE COMMITTEE CHAIR The Chair had no report. REPORT OF THE GENERAL MANAGER The General Manager had no report. REPORT OF ASSISTANT GENERAL MANAGER-ADMINISTRATION The Assistant General Manager of Administration had no report. REPORT OF ASSISTANT GENERAL MANAGER -OPERATIONS The Assistant General Manager of Operations had no report. REPORT OF THE DIRECTOR OF FINANCE Gary Streed reported that the Districts' daily COP rates were included in the agenda package mailed to the Committee. Referring to the FAHR Calendar, Mr. Streed advised that at the last meeting, the Directors approved moving the January meeting to the 15th, because the holiday will back up the other Committees meetings. There was discussion about meeting at 6:00 p.m. on the 15th, due to conflicts with two other tentatively scheduled meetings. Those meetings have been canceled, therefore, the FAHR meeting will be at 5:30 p.m. on January 15. Mr. Streed further advised that the February meeting falls on a holiday and stated it has been tentatively moved to February 19; the third Wednesday of the month. 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 Communication reported on an article that appeared in Sunday's Orange County Register, on page one, about the Districts' recent workplace investigation. As a result of that article, U.S.A. Today quoted one sentence from the Register article in their Monday paper. Ms. Tuchman announced that the Rate Advisory Committee will be holding their third meeting at the Districts on Thursday, December 12, 1996, from 9 a.m. to 12 p.m. in the Board Room. Also, the Orange County Council of Governments will hold their second meeting at the Districts in the afternoon of the 12th from 1 p.m. to 3 p.m. I< Minutes of Finance, Adm: nd Human Resources Committee Page 3 December 11, 1996 REPORT OF GENERAL COUNSEL General Counsel passed out a memo and reported on the Implementation of Proposition No. 218. In his review of the proposition, Mr. Woodruff found 218 is not very clearly written and much of it is not related to the Districts. However, Mr. Woodruff concluded from his review that sewer service is clearly property related. Therefore, those provisions of 218 dealing with property related services will apply to the Districts. Mr. Woodruff advised that a vote of the people is not required whenever sewer rates are raised. However, we must comply with all of the procedural requirements, many of which the Districts already do. Notification will have to be made to all property owners whenever sewer service fees are raised. The cost of these mailings is estimated to be anywhere from $250,000 to $300,000. Mr. Woodruff addressed the impact of 218 on Capital Facilities Connection charges, which is a combination of Capital Facilities and Connection charges. INTRODUCTION BY JOINT CHAIR COLLINS Joint Chair Collins introduced and welcomed Eva Miner Bradford, Council Member from the City of La Palma, as a new member on the Board, and who served, as a valued member, for a few years on the Districts' Board of Directors in the past. DISCUSSION ITEMS (Nos. 1-5) 1. FAHR96-73: 2. FAHR96-74: RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF NOVEMBER 1996 (All Districts) COMMITTEE DISCUSSION: The Director of Finance provided the Committee with a hand-out report for the month of November in compliance with the Districts' policy. He noted that a few cash accounts have been separated out, and the performance of the deferred compensation fund's various portfolios has been added. There are changes in the deferred compensation law which will be addressed at the next Committee meeting. MOTION: It was moved, seconded and duly carried to receive and file the Treasurer's Report for the month of November 1996, and forward to the Joint Boards. SELECTION OF INSURANCE BROKER(S) OF RECORD FOR THE DISTRICTS' PROPERTY/CASUAL TY/LIABILITY AND EMPLOYEE MEDICAL INSURANCE PROGRAMS (All Districts) COMMITTEE DISCUSSION: Steve Kozak reported on the Property/Casualty/Liability broker of record recommendation. Mr. Kozak summarized the RFP process. In response to the Committee, Mr. Kozak advised that John Burnham & Company would be the Districts' second choice. Mike Peterman reported on the Employee Medical Insurance Programs broker of record recommendation. Discussion took place regarding the performance of Robert F. Driver Company as the Districts' past health insurance broker of record. It was noted that Drivers' San Diego office Minutes of Finance, Admin Page 4 j Human Resources Committee December 11, 1996 3. FAHR96-75: handled the Districts' health insurance in the past, and did not perform well in that area. However, their liability insurance office in Irvine does an outstanding job. Burnham Benefits Insurance Services was recommended as the Districts' Employee Medical/Health Care Insurance Broker of Record. Mr. Peterman advised that their representative has direct experience with Metra Health, the Districts' Health Insurance Provider, with whom we have a rate guarantee for three years. We have had problems with Metra Health also, and it will be a significant benefit to have a company that knows the inner workings of Metra Health. The Committee requested a separate vote for each of the broker of record programs due to the level of concern by the Committee regarding Robert F. Driver's past performance as the Districts' Medical Insurance Broker of Record . MOTION: It was moved, seconded and duly carried with four (4) Ayes and three (3) Nays, to recommend the Joint Boards approve the selection of Robert F. Driver Associates to serve as the Districts' Property/Casualty/Liability Insurance Broker of Record for a three-year period commencing on January 1, 1997, with the Districts' option to renew for an additional two years thereafter; MOTION: It was moved, seconded and unanimously carried to recommend the Joint Boards approve the selection of Burnham Benefits Insurance Services to serve as the Districts' Employee Medical/Health Care Insurance Broker of Record for a three-year period commencing on January 1, 1997, with the Districts' option to renew for an additional two years thereafter. STATE OF THE INFORMATION TECHNOLOGY DIVISION (All Districts) COMMITTEE DISCUSSION: Information Technology Director Ed Hodges introduced Chris Dahl, Information Technology Manager, and Rob Thompson, Manager of Plant Operations. Mr. Dahl gave a slide presentation of the internal audit findings performed by Greg Mathews, Principal Administrative Analyst, and discussed actions taken as a result of the audit such as organizational changes to the Division and implementation of new programs, policies and procedures. Upon conclusion of Mr. Dahl's presentation, the Committee commended Mr. Dahl for an excellent presentation. Director Dunlap expressed the Committee's appreciation that Information Technology is not automating the plants for the sake of automation, but for the bottom line of improving the Districts' services and ability to be more productive. Manpower requirements at the Booster Station have been reduced by five positions due to automation. Bob Ooten will have the station manned during this winter's peak flows to be sure it is working satisfactorily. The elimination of these positions moves the Districts ahead a little faster than anticipated at reducing the number of FTEs. -\ -, Minutes of Finance, Admir --ld Human Resources Committee Page 5 December 11, 1996 4. FAHR96-76: 5. FAHR96-77: CLOSED SESSION MOTION: It was moved, seconded and duly carried to receive and file this information-only item. EMPLOYMENT STATUS REPORT (All Districts): Total head count for November 1996 at the Districts. COMMITTEE DISCUSSION: Mr. Peterman advised that the total FTEs is 559. 75, with a total number of people of 570. There are 54 vacancies. Don McIntyre advised that most of the 54 vacancies will not be filled, because it would not be logical to fill them when we are looking at a 15% staffing reduction. He advised we will use temporary hires, if necessary. Judy Wilson reported that in the O&M area where we lost a number of employees, we are looking at the application of plant automation, may go to a six-to-six work schedule, and may even consider contracting out collections for small lines. Mike Peterman advised a head count report will be brought to the Committee each month. In response to Director Swan, Don McIntyre advised that the Districts is developing a five-year staffing plan which is expected to be completed next quarter, and will be brought before the Committee when completed. MOTION: It was moved, seconded and duly carried to receive and file the Employment Status Report. REAL PROPERTY LEASE AGREEMENT WITH VILLAGE NURSERIES L.P., AT PLANT NO. 1, SPECIFICATION NO. L-018 (All Districts) COMMITTEE DISCUSSION: Ed Hodges, General Services Administration Director, reported on this item. In response to Committee questions, he advised the lease site in not in a desirable location, which accounts for the lower than market income per acre. The agreement does contain a good liability clause. MOTION: It was moved, seconded and duly carried to: 1) Recommend the Joint Boards authorize execution of the Real Property Lease Agreement with Village Nurseries at a lease rate favorable to the Districts; 2) Directed staff to review Village Nurseries' financials in making a lease rate decision; and 3) Include in the Lease Agreement a 30-day cancellation clause with cause, and a 6-months cancellation clause for any reason. 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 under "Closed Session" as Item (a)(1) on the published Agenda. The Committee convened in Closed Session at 7:00 p.m. Minutes of Finance, Admin d Human Resources Committee Page 6 December 11, 1996 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 item (a)(1 ). At 7:30 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. FUTURE MEETING DATES The next Finance, Administration and Human Resources Committee Meeting is scheduled for Wednesday, January 15, 1997, at 5:30 p.m. ADJOURNMENT The meeting was adjourned at 7:32 p.m. Submitted by: ~~ Lenora Crane Finance, Administration and Human Resources Committee Secretary H:\WP .OTA \FIN\221 O\CRANE\FPC.MTG\FAHR.96\1996.MIN\MFAHR 12.96 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 December 11, 1996, was duly posted for public inspection in the main lobby of the Districts' offices on December 4, 1996. IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of December, 1996. Posted: Penny Kyle, Secreta Sanitation Districts County, California _._~--'--------'-/ __ , 1996, By: Gts~ Signature ~ H:IWP.DTAIFINl2210\CRANE\FPC.MTG\FAHR.96\CERT.POS\CERTP012.96 f the Boards of Directors of County , 5, 6, 7, 11, 13 & 14 of Orange November 12, 1996 DISTRIBUTION FAHR COMMITTEE MEETING PACKAGE Full Agenda Package Committee & Mailing List Donald F. McIntyre Blake P. Anderson Judith A. Wilson Brad Cagel Gail Cain Corina Chaudhry Dan Dillon Marc Dubois Linda Eisman Jeff Esber Ed Hodges Steve Kozak Penny Kyle David Ludwin Greg Mathews Chris Dahl Bob Ooten Mike Peterman Gary Streed Michelle Tuchman Dan Tunnicliff (H.R.) Nancy Wheatley Mike White Extras Notice, Agenda, Mins., Etc. 14 1 1 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 1 1 6 10 Posting 1 Jean Tappan (include Mins) 1 Angela Holden 1 Frankie Woodside 1 Cindy Griego-Sands 1 Fawn Elizondo 1 Guard Shack (Ed Hodges) 1 Extras 3 (3-hole punched) (3-hole punched) (3-hole punched) (3-hole punched) Ron Zenk, Dist. 14 Treasurer's Report Only le H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\DISTRIB.96\DIST. phone: l714J 962-2411 mailing address: RO. Box 81 27 Fountain Valley, CA 9.2728'8127 street at!dress: 10844 EHfs Ayenue Fountain Valley, CA 9270&7018 MeJllber A9ehcles Anahelm Bree Buena Park Cypress FalJn~m Valley Fullerton Huntington FiJeaoh Irvine La Habra La Palma Las Alamitos Nf3WPOrt Beaoh Orange P/Elcencfa San/;B An(! -Seal Beeah ~nton TuscTn VIiia Perk Yorba Unds County of Orange S~111t;a11\l Districts CasliB Mesa ~ar'clan Gral/8 tvl/dway City Weter Olstrlcts lr:vine Ranch COUNTY ~NITATION DISTRICTS OF •RA~E COUNTY, CALIFORNIA December 4, 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. DECEMBER 11.1996-5:30 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 December 4, 1996 FINANCE. ADM[NISTRATION AND HUMAN RESOURCES COMMITTEE TENTATIVELY SCHEDULED MEETING DATES Finance, Administration and Human Resources Joint Board Meetings Committee Meetings December December 11, 1996 December 18, 1996 January January 15, 1997 January 22, 1997 February February 19, 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, DECEMBER 11, 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). December 11, 1996 RECEIVE, FILE AND APPROVE MINUTES OF PREVIOUS,MEETING Recommended Actjon: Receive, file and approve draft minutes of the November 13, 1996, Finance, Administration and Human Resources Committee meeting. REPORT OF COMMITTEE CHAIR REPORT OF GENERAL MANAGER REPORT OF ASSISTANT GENERAL MANAGER -ADMINISTRATION REPORT OF ASSISTANT GENERAL MANAGER-OPERATIONS REPORT OF DIRECTOR OF FINANCE (a) Monthly COP Performance Monitoring REPORT OF DIRECTOR OF HUMAN RESOU.RCES REPORT OF DIRECTOR OF GENERAL SERVICES ADMINISTRATION REPORT OF DI RECTOR OF COMMUNICATIONS REPORT OF GENERAL COUNSEL (a) Implementation of Proposition No. 218 DISCUSSION ITEMS -(Items 1-5) 1. FAHR96-73: RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF NOVEMBER 1996 (All Districts) RECOMMENDED ACTION: Receive and file Treasurer's Report for the month of November 1996. (Gary Streed -2 minutes) 2. FAHR96-74: SELECTION OF INSURANCE BROKER(S) OF RECORD FOR THE DISTRICTS' PROPERTY/CASUAL TY/LIABILITY AND EMPLOYEE MEDICAL INSURANCE PROGRAMS (All Districts) RECOMMENDED ACTION: 1) Approve the selection of Robert F. Driver Associates to serve as the Districts' Property/Casualty/Liability Insurance Broker of Record for a three (3) year period commencing on January 1, 1997, with the Districts' option to renew for an additional two (2) years thereafter. 2) Approve the selection of Burnham Benefits Insurance Services to serve as the Districts' Employee Medical/Health Care Insurance Broker of Record for a three (3) year period commencing on January 1, 1997, with the Districts' option to renew for an additional two (2) years thereafter. (Steve Kozak -5 minutes) 2 December 11, 1996 3. FAHR96-75: STATE OF THE INFORMATION TECHNOLOGY DIVISION (All Districts) RECOMMENDED ACTION: Receive and file this information-only item. (Chris Dahl -15 minutes) 4. FAHR96-76: EMPLOYMENT STATUS REPORT (All Districts): Total head count for November 1996 at the Districts. RECOMMENDED ACTION: Receive and file the Employment Status Report. (Mike Peterman -5 minutes) 5. FAHR96-77: REAL PROPERTY LEASE AGREEMENT WITH VILLAGE NURSERIES LP., AT PLANT NO. 1, SPECIFICATION NO. L-018 (All Districts) RECOMMENDED ACTION: Authorize execution of the Real Property Lease Agreement with Village Nurseries, for a 10-year period effective December 1, 1996, through November 30, 2006, for $1,600 per year in years 1-2, $3,200 per year in years 3-4, $4,000 per year in years 5-6, $4,800 per year in years 7-8, and $5,600 per year in years 9-10. (Ed Hodges -5 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). (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 3 December 11, 1996 MATTERS WHICH A DIRECTOR WOUL.D LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING MATTERS WHICH A DIRECTOR 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 tentatively scheduled for January 15, 1997, at 6:00 p.m., immediately following an Ad Hoc Committee Re Strategic Plan. The February meeting schedule falls on the Lincoln's Birthday holiday for the Districts. Staff recommends rescheduling the meeting to February 19, 1997, the third Wednesday of the month. 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: George Brown Lenora Crane Frankie Woodside (310) 431-2185 (714) 962-2411, Ext. 2501 (714) 962-3954 (FAX) (714) 962-2411, Ext. 3001 le H:\WP.OTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\AGENDA.96\AGENDA12.96 4 ROLL CALL FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING DATE: December 11. 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, Director of Tech. Srvs. STEVE KOZAK, Financial Manager MIKE WHITE, Controller GREG MATHEWS, Principal Administrative Analyst LINDA EISMAN, Training Manager LENORA CRANE, Committee Secretary OTHERS TOM WOODRUFF, General Counsel DAN CASSIDY, MOU Consultant RUSS PATTON, MOU Consultant c: Penny Kyle L. Crane TIME: 5:30 P.M. ADJOURN: P.M. • '· • • MEETING DATE OMTS: PDC: FAHR: 12/11/96 EXEC: STEER: JT.BDS: ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGENr', 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 NOVEMBER 13, 1996 (All Districts) Recommended Action(s): 1. Receive and file draft Finance, Administration and Human Resources Committee minutes for the meeting held November 13, 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 N/A 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 tr 1,r( -~ Date g ture 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 YES NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: 1. Draft Minutes of FAHR Committee Meeting held 11-13-96. 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 November 13, 1996. These minutes were submitted to the Joint Boards at their November 20, 1996 meeting. GGS:lc c: Department Head AGM-Administration AGM-Operations General Manager H:\WP.DTA\FIN\221 0\CRANE\FPC.MTG\FAHR.96\0EC.AIT\MIN1113.96 Revision: 8/28/96 Page 2 of2 • I - ' I 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, 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, Admir. 1d 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 LAFCO 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, ..ind 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, Admi, .1d Human Resources Committee Page 4 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. F AHR96-64 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, Admi• ..ind 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 hd Human Resources Committee Page6 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, Adm1 .Jnd Human Resources Committee Page 7 November 13, 1996 MATTERS WHICH A DIRECTOR MAY WISH 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: Lenora Crane Finance, Administration and Human Resources Committee Secretary H:\WP.DTA\FIN\221 0\CRANE\FPC.MTG\FAHR.96\1996.MINIMFAHR11.96 MEETING DATE OMTS: PDC: FAHR:12-11-96 EXEC: STEER: JT.BDS:12-18-96 DISTRICT NO. 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 BOARD 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 N/A 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: N/A N/A NIA N/A 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 I( ature To Jt. Bds.: 1. epartment Head (Or Designee) ~·we£. .. :.... ,1(2.s-/9, Si ure 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\DEC.AIT\DIRFIN.RPT Revision: 8/28/96 Page 2 of2 l :::i:: "U ;...:-C al =ii ~ "C RATE(%) Q) z m al )> 9 I\) (,) .i,,. C. z 0, (1) 0 0 0 0 0 0 0 C" (") '< 0 0 0 0 0 0 0 m 3-Apr-96 "11 1G 5· I\) Q) ~ ::, g 1 0-Apr-96 -- n ;,c:: _ro 0 ~ ~ 17-Apr-96 -~ ~ ~ ~ 24-Apr-96 -- _m ~ -i 0 m 1-May-96 -:.,;.. :::i:: --.I en )> -i 8-May-96 s: CJ 0 15-May-96 -(") 22-May-96 · + 29-May-96 • "U 5-Jun-96 Q) 5· (1) 12-Jun-96 ~ (1) 0 C" 19-Jun-96 --C" !!? 0 26-Jun-96 -"'C + ~ 3-Jul-96 - '-10-Jul-96 -f :u m s: 17-Jul-96 :::c: -0 (0 24-Jul-96 "' Q) ::, -f 31-Jul-96 · 0 + 7-Aug-96 ~ )> 14-Aug-96 ;tJ Gi m en 21-Aug-96 --"'C :E Q) 0 "C 28-Aug-96 • · ;tJ -f 4-Sep-96 - + 11-Sep-96 en 0 n 18-Sep-96 ., G) (1) ::, 25-Sep-96 •· en :E Q) 2-Oct-96 "C 9-Oct-96 16-Oct-96 23-Oct-96 •. 30-Oct-96 - 6-Nov-96 - 13-Nov-96 20-Nov-96 - 27-Nov-96 MEETING DATE OMTS: PDC: FAHR: 12-11-96 EXEC: STEER: JT.BDS:12-18-96 DISTRICT NO. ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN[\ ITEM TRANSMITTAL CONTACT FOR INFORMATION 2210, Gary G. Streed, Ext. 2500 Division No., Name, and Extension RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF NOVEMBER 1996 (All Districts) Recommended Action(s): 1. Receive and file Treasurer's Report for the month of November 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 I( U (~~ re Date D partment ad (Or Designee) ~'we-Ls~ i ature 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 November 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. The Districts' investments are in compliance with the Districts' adopted Investment Policy, and the California Government Code. In addition, sufficient funds are available for the Districts to meet its operating expenditure requirements for the next six months. GGS:lc c: Department Head AGM-Administration AGM-Operations General Manager H:\WP.DTA\FIN\2210\CRANE\FPC.MTGIFAHR.96\DEC.AlnFAHR96.73 Revision: 8/28/96 Page 2 of 2 PDC: FAHR: 12/11/96 EXEC: STEER: JT.BDS: 12/18/86 ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN ll ITEM TRANSMITTAL CONTACT FOR INFORMATION 2210, Steve Kozak, 2504 Division No., Name, and Extension SELECTION OF INSURANCE BROKER(S) OF RECORD FOR THE DISTRICTS' PROPERTY/CASUAL TY/LIABILITY AND EMPLOYEE MEDICAL INSURANCE PROGRAMS (All Districts) Recommended Action(s): 1) Approve the selection of Robert F. Driver Associates to serve as the Districts' Property/Casualty/Liability Insurance Broker of Record for a three (3) year period commencing on January 1, 1997, with the Districts' option to renew for an additional two (2) years thereafter. 2) Approve the selection of Burnham Benefits Insurance Services to serve as the Districts' Employee Medical/Health Care Insurance Broker of Record for a three (3) year period commencing on January 1, 1997, with the Districts' option to renew for an additional two (2) years thereafter. 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: JO Line Items: Property/Liability Insurance Broker Employee Medical Insurance Broker AMOUNT OF TRANSFER: Schedule/Line Item: N/A AIT/PROJECT COST INFORMATION 1997-98 Property Broker 1997-98 Medical Broker CURRENT YEAR BUDGET AMOUNT $100,000 $ 30,000 -0- ORIGINAL BID, PO, CONTRACT AMOUNT N/A WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO YES If YES, state number: _ Permanent Limited Term Z. I>EC '3b Date ;1-~ ~~_;;;;_----"+--'1---4:e,,,..'----------+-::t-:-" Si nature Department Head (Or Designee) ~w~~ ature Date Assistant General Manager (Or Designee) DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: CURRENT YEAR- TO-DATE EXPENDITURES $40,000 $12,000 CHANGE ORDERS, FUNDS PREV. APPROVED NIA May 1992 YEAR-TO-DATE BUDGET BALANCE $60,000 $18,000 AMOUNT REQUESTED THIS AIT $90,000 $60,000 REVISED BUDGET TOTAL (Total Budget phn; Transfers) $100,000 $ 30,000 AMENDED PROJECT AMOUNT N/A REQUIRES BOARD POLICY ACTION? NO YES NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: 1. Attachment "A" 2. Attachment "B" To Jt. Bds.: 1. Attachment "A" 2. Attachment "B" ADDITIONAL INFORMATION (Background and/or Summary) BACKGROUND In May 1992, following a competitive Request for Proposal (RFP) process involving large insurance brokerage firms, the Joint Boards selected Robert F. Driver Associates of Newport Beach ("Driver") to serve as the Broker of Record for the Districts' property and casualty insurance needs. In late 1993, Robert F. Driver Company of San Diego was assigned Broker of Record responsibilities for employee medical insurance. The insurance premium cost figures shown above in the Budget Information section, include Driver's brokerage commission fees. In March 1996, the Finance, Administration and Human Resources Committee ("Committee") considered a staff report involving a preliminary benchmarking analysis of the Districts' risk management and insurance programs. In May, the Committee authorized staff to conduct a new RFP for Insurance Broker of Record services, citing the value of periodically returning to the marketplace to confirm that the Districts are receiving competitive professional services. Staff has completed a competitive proposal process to ensure that the Districts' receive a high level of risk management, and property/casualty/liability and employee medical/health care insurance broker services, at competitive price levels. This item reports on the results of the RFP process for selection of Insurance Broker(s) of Record effective January 1, 1997. RFP PROCESS Staff prepared a comprehensive RFP covering both property/casualty/liability and employee medical insurance brokerage and related risk management services. The RFP provided all firms with the opportunity to submit proposals in one or both of these speciality areas. On September 26, the RFP was sent to eleven (11) large and regional insurance brokerage firms. On October 18, the Districts received three (3) property/casualty/liability insurance broker proposals, and five (5) employee medical insurance broker proposals from five (5) firms. A Proposal Review Team, consisting of the Districts' Human Resources Director, Employee Benefits Coordinator, Purchasing/Contracts Manager, and Financial Manager, evaluated the eight (8) written proposals. The Review Team determined that three (3) of the proposals were non-responsive to the Districts' RFP, and removed them from further review. On November 21, the Review Team conducted interviews with the following five finalist proposers: Property/Casualty/Liability Broker of Record Employee Medical/Health Care Broker of Record John Burnham & Company Burnham Benefits Insurance Services Robert F. Driver Associates HCM Benefits, Inc. Marsh & McLennan RESULTS OF PROPOSAL EVALUATION The following presents an overview of the five finalist's proposals, each of which was responsive to the minimum requirements of the RFP. The proposals are summarized in Attachment "A." Details of the cost proposals, both fee-based and commission-based options, are summarized in Attachment "B." I. Property/Casualty/Liability Broker of Record • John Burnham & Company John Burnham & Company ("Burnham"), ranked as the 40th largest independent insurance firm in the U.S., has been doing business in California for more than 100 years. Burnham has maintained an office in Irvine for more than 25 years. Their corporate office is in San Diego. Burnham's recent average annual premium volume, for both private and public sector clients, is approximately $160 million. H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\DEC.AlnFAHR96.74 Revision: 8/28/96 Page 2 of4 • The Burnham proposal was resr ive with a level of service that included bot' · surance brokerage and risk managment consulting services. JWever, the Proposal Review Team expres _. concerns about Burnham's limited experience serving public agencies of similar size and scope to the Districts. In addition, the Burnham proposal relied heavily on a single subcontractor, located in San Francisco, to provide risk managment consulting services. The Burnham cost proposal, under the fee-based option, is $100,000 minimum annually, which would include the fees of the independent risk management consultant. Burnham indicated that they could work with the Districts to develop a commission-based fee proposal. Robert F. Driver Associates Robert F. Driver Associates ("Driver; , described as the largest public agency insurance broker in California, was established almost 20 years ago in Newport Beach. Driver is a division of The Robert Driver Company, Inc., which was founded in 1925 in San Diego (corporate office). Driver's recent average annual premium volume is approximately $75 million; over 95% of which was placed solely for public agencies. Driver provides insurance and risk management services to more than 130 special districts in California, including approximately 12 wastewater treatment agencies, from their Newport Beach office. Driver's brokerage capabilities include access to the major insurance underwriters, and development of several speciality insurance products. Driver presented a comprehensive proposal, including a level of service consistent with maintaining the high level of brokerage services that they currently provide to the Districts. Also, Driver has developed an effective working relationship with the Districts' General Counsel, and third-party claims administrator, Carl Warren & Company. The Driver proposal also demonstrated their ability and willingness to increase their scope of work to respond to the expanded needs of the Dristricts. Driver's expanded scope of work would include such areas of risk management consulting as: Risk and loss probability analysis, loss control stduies, construction and vendor contracts review, and policy and procedures development. The Driver cost proposal, under both fee-based and commission options, is $90,000 annually, including the enhanced scope of work. • Marsh & McLennan Marsh & McLennan Companies ("Marsh"), described as the world's largest broker, has been a licensed broker in California for more than 50 years. The Marsh family of companies has specialty offices throughout the U.S. The Marsh service office in Newport Beach was opened 24 years ago. Marsh's recent average annual premium volume is approximately $15 billion for U.S. clients. Marsh's large premium volume is directly related to the considerable size of the company and its insurance buying power. On the other hand, to manage its size, Marsh has centralized its insurance marketing and consulting services. Since 1992, insurance placement is handled through five regional offices, for the most part, using standardized forms of insurance. Similarly, Marsh's consulting service resources are located in various offices across the U.S. The Proposal Review Team expressed concerns about the impact of Marsh's size and structure on the ongoing access and availability of providing services to the Districts, as well as, how such widely dispersed services would be coordinated, over the long run. The Marsh cost proposal, under both fee-based and commission options, is $92,000 annually including 100 hours allocated for loss control consulting. II . Employee Medical/Health Care Broker of Record • Burnham Benefits Insurance Services Burnham Benefits Insurance Services ("BBIS"), part of John Burnham & Company, has provided employee benefits insurance services from their Irvine office for over 25 years. Burnham's recent average annual premium volume is approximately $194 million. BBIS proposed a flexible level of service through their account team, including claims handling and employee benefits consulting. The consulting services would include employee benefits wokflow analysis for Human Resources, employee communications planning, and preparation of a comprehensive strategic business plan for obtaining, delivering, and administering employee medical/healkth care benefits going forward. H:\WP .OTA \FIN\221 O\CRANE\FPC.MTG\FAHR.96\DEC.AlnFAHR96.74 Page 3 of 4 The strategic plan would be develope,., o.,,y the BBIS principal-in-charge, whose bac' ,und Includes prior account manager experience with both MetraHealth anl Jrthwestern/ReliaStar. Initially, the busine~ ,an would focus on developing a set of actions to resolve the problems that exist with MetraHealth's service delivery. The BBIS cost proposal ranges from $50,000 to $60,000 in the first year (fee-based), to an estimated $90,000 (commission). • HCM Benefits HCM Benefits, Inc. ("HCM"), formerly called Cal-Surance Group Benefits, was formed in 1962. HCM has been under its current management for 22 years. The HCM office is located in Torrance. HCM's recent average annual premium volume is approximately $250 million. HCM proposed a flexible level of service through their account team, including claims handling. Also, HCM emphasized the role of ongoing communications with employees about the coverages and uses of their benefits package. HCM included examples of various employee informational and educational materials that they prepared for other clients. The HCM cost proposal ranges from a baseline $84,000 (fee-based) to an estimated $90,000 (commission), plus certain add-ons. CONCLUSIONS The following presents a summary of the conclusions and recommendations of the Proposal Review Team. I. Property/Casualty/Liability Broker of Record The Proposal Review Team recommends the selection of Robert F. Driver Associates to serve as the Districts' Broker of Record for property/casualty/liability insurance. Reasons for this recommendation include: Driver submitted a comprehensive written proposal, and made an effective team presentation during their interview. Driver has assigned senior members of their staff to serve the Districts. Both the Driver firm , as well as the account service team assigned to the Districts, have substantial experiehce with the risk management and insurance issues confronting the wastewater industry in California. Driver presented a lower cost proposal, and it included an enhanced scope of work. II. Employee Medical/Health Care Broker of Record The Proposal Review Team recommends the selection of Burnham Benefits Insurance Services to serve as the Districts' Broker of Record for employee medical\health care insurance. Reasons for this recommendation include: Burnham submitted a written proposal that was both responsive to the immediate needs of the Districts, and presented a long-term approach to enhancing the Districts' management of employee medical benefits. Burnham would assign a prihcipal-in- charge whose background includes work experience with MetraHealth and ReliaStar. Burnham presented the lower cost proposal. The Proposal Review Team also concluded that the Professional Services Agreements with both Driver and Burnham should be structured to provide for an annual review of the not-to-exceed compensation limit, and an annual review of work scopes. This flexibility is essential for cost control, and for managing the level of consultant resources so as to more effectively meet the Districts' needs, as those needs change over time. RECOMMENDED ACTION 1. Approve the selection of Robert F. Driver Associates to serve as the Districts' Property/Casualty/Liability Insurance Broker of Record for a three (3) year period commencing on January 1, 1997, with the Districts' option to renew for an additional two (2) years thereafter. 2. Approve the selection of Burnham Benefits Insurance Services to serve as the Districts' Employee Medical/Health Care Insurance Broker of Record for a three (3) year period commencing on January 1, 1997, with the Districts' option to renew for an additional two (2) years thereafter. SVK c: Department Head A GM-Administration AGM-Operations General Manager H:\WP.DTA\FIN\2210\CRANE\FPC.MTG\FAHR.96\DEC.AlnFAHR96.74 Page 4 of 4 ATTACHMENT "A" _J1{1,·:: ~r~~~~~~~~;ai=aJ!¥~~J : :, ,.,sa,\;:~. 1Nsur{Al{QJ;t aRQKe.~ 0F iE~:o.Ro .s.eRvice1s1l 1\ C":!. "]¾::\~ ' :~ "ti ,IJ!:r_::: !'i: ;ii;; f NAME Of FIRM C ,rr, ~~·'-=,F, F· "'-"' ,,., •• . ~-" . . . . =•" .,,,, -~ I -" . ' .. ,.,. ~. • . :,e:c .. "' EXPERIENCE·QF'.PROPO.SED'SERVICI;. ; : ·""'.,,, ,,. -:/' , . ·-,. ' ... SCOPE Of SERVICES°}}~=' .. ~• . . ,;:i TEAM " J " ,·:ec;c ..... ,L•·~ ·~2:-=•E~·EE.Qff(C.E.IIQCA,TIQN•.i,:i;il Property/Casualty/Liability Broker of Record ' "''! ,:; t JQhh EM.hhc!ini .&. ~ompany Insurance brokerage & marketing, and risk management consulting through an independent consultant in San Francisco . Ri;,bert.~. IJriv.er ,;i Comprehensive; extensive experience A~c;lcfafes , ·· marketing and brokering wastewater · . , risks to underwriters, and expanded ""· level of risk management consulting from the Newport Beach office M '" sh'& e: •n .. ~r ... ,, .... Mcl.Lenn::in ,.,, '•i:!."! ~iJ~fi7. I !! ,!, ,I.;· ·:.:.....:·::! Insurance brokerage & marketing, and risk management consulting through specialty offices located throughout the U.S. Employee Medical/Health Care Broker of Record "'Burn ha nr , s~riefits .: lfisuranrie-· .,secyices ! .'::ijj! -, ( 1 :j' ·':jjj1;i!ii"7i:i: Ii-•·····-1::fCM e· ··errts. ~61'.:{~ :n! ~Q,c;I ,!I• r,:; .0 Comprehensive; insurance brokerage & marketing; claims handling; and risk management consulting from the Irvine office Insurance brokerage & marketing, and claims handling H:\WP.DTAIFIN\2210\CRANEIFPC.MTGIFAHR.96\DEC.Al'T\INSRECAP.OOC Limited public agency experience Irvine, San Diego & San Francisco Extensive, including numerous California I Newport Beach wastewater agencies. Senior staff assigned to Districts who possess extensive experience with wastewater agency risks, and with CSDOC operations Moderate public agency experience High level of insurance brokerage & marketing experience, and depth of resources. Background of principal-in-charge includes experience with MetraHealth and Reliastar High level of insurance brokerage & marketing experience Newport Beach, Los Angeles & out of state Irvine Torrance ij; . - ATTACHMENT "8" ~ 11;; w11ln M ,. l '1 ~·.!11l• l1,1i •• !1 1/U l1r:. : I •fll' -.ilL.t...... ••• 't.-~ -:: 7=:t,g!ii'~ up: -cp:;::·;~ =" .. ....:!·-~~-:: . ;;IFll";c111 ;-"'~~ ~iv p tl~·~U'~.M~~~~~-,~1~Q,~;lljm~Re~Q.S:~~$,~"-~ "~..:Zc:,;;~,; . -" ..... :~• "~•:::i~.•~~~RA~_¢~~~~~gn~"c'o~fu\i~E~~i~J$~~" ;.:_:_::1!;-:_ .. .-~ NAME OF FIRM _:: :)t'.FEE~RROPo!sAf::;::~:J'~lf;~-~, K,,d,cbMM1s_s1ci'&:PR'deQ~Jd:"" ~/1~'.,_. ;L , ~;~,"'diJN~Es-,i Ice 'I Property/Casualty/Liability Broker of Record I, •'"'ITC _ ,~, .. _ '""," " :Jr"tl: JohriBun:1nan:1 & Co. it ;;: ~ -=::: 1 Rt b~~-F~b-'vet Inc: ._,, .,. __ , .. n. _ , -::1 __...,. t: !l:. ·be o $100,000 minimum annually ., o Includes Erin Oberly's fees (independent risk mgmt. consultant) o $90,000 annual fee ,Matsh at Mctehnao ~:7~:c. . '' ~. o $92,000 annual fee ·:1:,r :F :4-:::3i_ ~ ~~ :.:.. * .!/ t ·i--J;•;::::.: it:•--:..:..:~:fli.::'.ai: ~!li· _.J.!'=:. o Includes 100 loss control consulting hours Employee Medical/Health Care Broker of Record !:lG!tfn ~-JM&lrtf~e~·efrtJ:, ,, I o $50,000 to $60,000 first year ··· ... :=.•: . ..!!":;f::.1::;1,:-::;.t·;: _ :1;;. :·: :!1· :.. I 1nsuranc1l-Se:iYice's, y = ·1· ·.:.:-. -:-.: : .'.°!",1.i. ~!':; -~ ::-:: :·• ':! .. :;..:--:. ~ , ~CMi ~~q~:rii{,~c;k "' ~ '"' '.~: -~ijf:}_i;: ···;=·::::!~: ;•J-! ttt:~\j(''.':j~ J~ij:~-:~~ a'" I o $7,000 base monthly fee ($84,000); plus o 50/50 sharing of any premium savings H:\WP .OTA \FIN\221 0\CRANE\FPC.MTG\FAHR.96\DEC.AIT\INS$COST.DOC o Can work with Districts to develop a commission based fee o Approximately 6% annual cap ($90,000 for 1996) o $92,000 annual cap o 2 to 3% of premium o Medical Coverages: 3% of premium o Ancillary Coverages: Carrier's standard commission scales o Can structure incentive provisions o Can structure incentive fee program o Possible further premium reductions o Gain sharing programs tied to marketing and/or loss control results o Would negotiate fees annually J 1, • COMM. INFO; ITEM • COMM. ACTION ITEM • J~BDS.CONSENT • JT. BOS, DISCUSSION (NON-CONSENl) • PUBLIC HEARING 1 ____ JT. BOS. MEETING DATE -~--JT. BDS. AGENDA ITEM NO. MEETING DATE OMTS: PDC: FAHR: 12/11/96 EXEC: STEER: JT.BDS: COMM. ID. NO. OMTS ___ _ PD!:;-=---=--,----,-...., FAftR· flh-]C EXEC. ____ _ STEER. ____ _ DISTRICT NO. All AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: State of the Information Technology Division Recommended Action(s): --~ AGEN[. 1 , ITEM TRANSMITTAL ' CONTACT FOR INFORMATION 2410, Chris Dahl, 2800 Cl) (Initials of Originator) Division No., Name, and Extension This is an informational item only and there are no recommended actions. 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 CURRENT YEAR TOTAL BUDGETED AMT.: $ BUDGET AMOUNT SOURCE: CORF JO DISTRICTS Schedule/Line Item: $0 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: ~/).~ Signature Divisio~ ~aJ~er (Or Designee) cl"" /¥aMiP/> ~ Signature U 1 ' Date Department Head (Or Designee) ~--:;;;),. C,,U~.S M. s· ture Assistant General Manager (Or Designee) Date 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) $0 $0 $0 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: ToJt. Bds.: OMTS C \1. PDCCOMM. FAH: ::>MM. JOINT BOARDS Meeting Date: Approved: Am~nded: Ferwarded to"': ADDITIONAL INFORMATION (Background and/or Summary) In May, 1996, the Districts completed an internal audit of the Information Technology division. During the course of this investigation, it was determined that the Information Technology division was not operating as efficiently as possible. Additionally, there was a need for improving some of the policies and procedures affecting the way that the division conducts its business and interfaces with its internal customers. As part of the audit, staff conducted a survey of the divisions internal customers. The anonymous survey was randomly distributed to seventy-one (71) users of IT services; fifty-five (55) individuals responded resulting in a 77% response rate. The results of that survey helped provide the framework for some of the recommendations that have or are being implemented. Subsequent to the audit, the Districts have hired a new Manager of Information Technology, Chris Dahl. The division has recently been reorganized and now has a help desk. IT has shown a dramatic increase in its productivity in the past 6 months and is fast becoming a model for customer support. Chris Dahl, the Manager of Information Technology, will be presenting a brief overview of the division, the results of the internal audit and the status of the division relative to implementing the recommendations contained in the audit report. Budget Information The implementation of all of the recommendations was accounted for in this years JO Budget and no additional monies are needed. Staff Recommendation This is an informational item only. c: Department Head AGM-Administration AGM-Operations General Manager A:\IT.AIT Revision: 8/28/96 Page 2 of 2 • COMM. INFO. ITEM • COMM. ACTION ITEM • JT.BDS.CONSENT • JT. BDS. DISCUSSION (NON-CONSENl) 0 PUBLIC HEARING For Bd. Sec, U "'!!l!Y ____ JT. BDS. MEETING DATE ____ JT. BDS. AGENDA ITEM NO. AGEN~ I ITEM TRANSMITTAL @ MEETING DATE COMM. ID. NO. DISTRICT NO. CONTACT FOR INFORMATION ___ (Initials of Originator) OMTS: OMTS PDC: PDC FAHR: 12/11/96 FAHR 2w·7fl. EXEC: EXEC All 2520, Mike Peterman, Ext. 2105 STEER: STEER Division No., Name, and Extension JT.BDS: AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: EMPLOYMENT STATUS REPORT: Total headcount for November, 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 N/A ORIGINAL BID, PO, CONTRACT AMOUNT NIA WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent _ Limited Term CONCURRENCES: Signature Date ;mn1£;$ Signature Date Department Head (Or Designee) <!ii:__,, ~;;;i.: ul~ 11 f u. 1 H ~ture Date ssistant 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. November 1996 Employment Status Report. To Jt. Bds.: 1. CSDOC • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411 OMTS Cl"lMM. PDCCOMM. FM,..,,COMM. JOINT BOARDS Meeting Date: \ ----Approved: Amended: Forwarded to: ADDITIONAL INFORMATION (Background and/or Summary) The Districts have a Full-time equivalent (FTE) headcount of 559.75 as of November 25, 1996. The actual body count is 570. The current FTE headcount is equivalent to a 11.5% reduction from the budgeted 624 positions. The one month turnover rate for November, 1996 was 6. 7%. 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\OPEN\1196.AIT Revision: 8/28/96 Page 2 of 2 Employment Status Report Run Date: 26-Nov-96 -: -Regular Regular -· ,i Total Regular Part-time Patt-time Actual Vacant Total >." .• Full-time 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 14 0 1 0 0 1 16 1 17 Total Finance 38 0 0.75 0 0 1 40 1 41 2410 -General Services Administration 6 0 0 0 1 0 7 0 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 14 0 0 0 0 0 14 17 31 2460 -Plant Facilities 39 0 0 0 0 2 41 5 46 Total General Services Admin. 78 0 0 1 0.5 2 82 23 105 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. 12 0 0 1 4 2 19 1 20 3420 -O & M Scheduling 6 0 0 0 0 0 6 0 6 3430 -Plant Operations 1 35 0 0 0 0 1 36 5 41 3440 -Plant Operations 2 46 0 0 0 0 1 47 9 56 3450 -Mechanical O & M 55 0 0 0 0 0 55 8 63 3460 -Electrical O & M 27 0 0 0 0 0 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 Operations 227 0 0 1 2 4 236 23 259 3510 -Technical Services Administration 3 0 0 0 5 0 8 0 8 3550 -Environmental Compliance & Monitoring 20 0 1 1 1 0 23 1 24 3580 -Environmental Science Labroratories 30 1 2 0 0 1 34 3 37 3590 -Source Control 38 0 1 0 0 0 39 0 39 Total Technical Services 91 0.5 3 1 3 1 104 4 108 3710 -Engineering Administration 2 0 0 0 0 0 2 0 2 3720 -Design Engfneering 24 0 0 0 2 0 26 0 26 3730 -Engineering Planning 6 0 0 0 0 0 6 0 6 3790 -Construction Management 32 1 0 4 0 0 37 3 40 Total Engineering 64 0.5 0 4 1 0 71 3 74 Total Staffing -~ _,_ '"'."."'~' -~"!i -'* 531 ·-2 3.75 z 7 7 9 570 64 624 ,,:-. H:lexcel.etalhr'.openlempdiv,x1s 559.75! • ForBa. sec, 11 ,.!: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: 12/11/96 EXEC: COMM. ID. NO. OMTS _____ _ R1'0 FAA"-R---=9,-(e----,-7"""" EXEC ___ _ I STEER: S~EER _____ : JT.BDS: ' DISTRICT NO. All AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN L } ITEM I TRANSMITTAL CONTACT FOR INFORMATION 2410, Ed Hodges, 3005 (Initials of Originator) Division No., Name, and Extension Approving Real Property Lease at Plant No. 1, Specification No. L-018, with Village Nurseries L.P. Recommended Action(s): 1. Authorize execution of the Real Property Lease Agreement with Village Nurseries, for a 10-year period effective December 1, 1996 through November 30, 2006, for $1,600 per year in years 1-2, $3,200 per year in years 3-4, $4,000 per year in years 5-6, $4,800 per year in years 7-8 and $5,600 per year in years 9-10. 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 $0 ORIGINAL BID, PO, CONTRACT AMOUNT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, stale number: _ Permanent CONCURRE~CES: Signi;~ Division Manager (Or Designee) !'.~ Signature Department Head (Or Designee) ~ u)~.SM.. i ture _ Limited Term Date 1\-2..7 -l'f tr Date Date Assistant General Manager (Or Designee) DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: October 1991 CURRENT YEAR- TO-DATE EXPENDITURES $0 CHANGE ORDERS, FUNDS PREV. APPROVED YEAR-TO-DATE BUDGET BALANCE $0 AMOUNT REQUESTED THIS AIT REVISED BUDGET TOTAL (Total Budget plus Transfers) $1,600.00 In additional $ AMENDED PROJECT AMOUNT l REQUIRES BOARD POLICY ACTION? NO YES NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section ATTACHMENTS TO AGENDA (List) To Committee: 1. Real Property Lease To Jt. Bds.: OMTS 1 1M. PDCCOMM. JOINT BOARDS Meeting Date: Approved: Amended: Forwarded to: ADDITIONAL INFORMATION (Background and/or Summary) The Districts own a strip of land containing approximately four acres located west of the west bank of the Santa Ana River south of Garfield Avenue to south of Yorktown Avenue in the City of Huntington Beach. In October 1991, the Districts entered into a five year real property lease agreement at Plant No. 1 with Village Nurseries L.P., a California Limited Partnership, specification number L-013-1. The term of that agreement expired on October 31, 1996. The terms set forth in that agreement were very generous for Village Nurseries. Under the terms of the original agreement, Village Nurseries was to pay the Districts, the sum of One Thousand ($1 ,000.00) Dollars per annum. Additionally, they were responsible for all of the upkeep and maintenance of the approximately four acre parcel. In mid October, staff contacted the Southern California Edison corporation to investigate how much they charge for their land leases under power lines in the Orange County area. SCE stated that they receive between $800 to $2,200 per acre per year depending on the property. In mid October, staff began negotiations with Village Nurseries to renew the terms of the agreement and increase the annual payment. Attached for your guidance and information is a copy of the proposed new lease. The new lease will increase the annual lease rate from $250 per acre to $400 per acre beginning at the inception of the lease. Beginning in year three, the rate will increase to $800.00 per acre per year with a subsequent $200.00 per acre per year increase every two years for the remainder of the lease. A ten-year term is proposed, with four, five-year mutually negotiated options. All of the other terms remain the same. Budget Information The proposed lease will generate $1,600 a year in new revenue for the Districts for years 1-2. Additionally, it will generate $3,200 a year in years 3-4, $4,000 a year for years 5-6, $4,800 a year in years 7-8, $5,600 in a year years 9-10. This revenue was not anticipated in the FY 96-97 Budget. Staff Recommendation Staff recommends that the FAHR recommend to the Joint Boards that the Districts enter into this lease with Village Nurseries for a term of 10 years and four, five-year extensions to the lease terms that will be mutually negotiable. c: Department Head AGM-Administration AGM-Operations General Manager A:\VILLNUR.AIT Page 2 of 2 Revision: 8/28/96 REAL PROPERTY LEASE COUNTY SANITATION DISTRICT PLANT NO. 1 FOUNTAIN VALLEY, CALIFORNIA SPECIFICATION NO. L-018 COUNTY SANITATION DISTRICT NO. 1, of Orange County, California, a public agency, and subdivision of the State of California, acting for itself and as Agent of County Sanitation District Nos. 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, hereinafter referred to as "Landlord," in consideration of the covenants and agreements contained herein, does hereby lease that certain real property described in Section 15 below, to (the "Leasehold") Village Nurseries, a limited partnership, whose local address is 10500 Garfield Avenue, Huntington Beach, California 92646, hereinafter referred to as "Tenant"; and Tenant hereby leases from Landlord that certain real property (the Leasehold). 1. TERM: That the term of said lease shall be for a maximum of ten years beginning December 1, 1996, and ending November 30, 2006, cancelable upon 30-days written notice by the Districts in the event of a determination by Districts of a need for the use of said Leasehold property. Additionally, the lease may be extended in four, five-year, mutually negotiable increments. 2. RENTAL: That the lease payment for the first ten years shall be $1,600.00 per year in years 1- 2, $3,200 per year in years 3-4, $4,000 per year in years 5-6, $4,800 per year in years 7-8 and $5,600 per year in years 9-10. Said sum shall be payable on the date the term commences, to wit, December 1, 1996, and on December 1st of each succeeding year during the term of this lease. Said rental amount will not be adjusted during the Lease period of ten years. 3. MAINTENANCE: Tenant shall allow no noxious weeds to go to seed and shall at all times keep the premises free from weeds, grasses and rodents. Tenant shall maintain the premises in as good condition as the same now are or may hereafter be put, and upon termination of this Lease, shall deliver possession of the same to Landlord in substantially the same condition as it received them and free of weeds, debris and improvements. Tenant shall not commit waste of the premises. 4. ASSIGNMENT: Tenant shall not assign this Lease without the prior written consent of Landlord, which shall not be unreasonably withheld. Landlord does expressly acknowledge that it is the intent of Tenant to grow and store nursery stock in containers on the site. 5. ENTRY: Tenant shall permit Landlord or its agent to enter upon the premises at all reasonable times for the purposes of inspecting said premises, maintaining, or repairing the Landlord's facilities and appurtenances installed on, in, or through the premises. 6. ALTERATIONS: Tenant shall not change nor alter the premises in any material manner except as described in Section 3 without the prior written consent of Landlord. Tenant shall develop the leasehold property only in accordance with the Master Plan approved by the City of Huntington Beach. Any permit required for the conduct of Tenant's business or occupancy of the Leasehold shall be solely the obligation of Tenant to acquire. Growing of crops in the land is not recommended, and therefore, shall not be allowed without prior written consent of Landlord. If Tenant receives written permission from Landlord to grow crops, Tenant is to regulate the use of said premises so that any such growing crops can be removed on the termination date of this Lease unless Tenant has received written consent of Landlord to extend the term of this Lease for the purpose of harvesting a growing crop. Said extension must be granted before any such crop is planted. 7. UTILITIES: Tenant agrees to be responsible for providing any and all utilities required by Tenant during the term of this Lease. 8. BREACH: In the event Tenant shall default in any of its agreements herein contained or subsequently mutually agreed to by the parties, and if after written notice to Tenant, such default shall continue for thirty (30) days, Tenant shall forfeit all rights under this Lease; in such event, Landlord or its agents may, at its option, terminate this Lease and take immediate possession by action of forceable entry and detainer or may avail themselves of any legal remedies they may then possess. 9. INSOLVENCY: If Tenant has either (a) a receiver appointed to take possession of all or substantially all of the assets of Tenant, and (b) takes or submits to any action under any insolvency or bankruptcy act and for a period of thirty (30) days does not terminate or remove any such appointment, assignment, or action, then and in that event, the Lease shall be considered terminated automatically and without further notice, and all growing crops on sa id leased premises shall become the property of Landlord as of the date of termination. 10. TERMINATION BY LANDLORD: The parties hereto recognize that the Landlord is a public agency providing sanitary sewage collection, treatment, and disposal service for the major portion of the County of Orange, and in the event of substantially changed conditions requiring the use of the premises or a portion thereof, for a public purpose related to wastewater operations, or in the event of any emergency that could endanger the public health or safety, the Landlord shall have the right to terminate and cancel this Lease upon one month's written notice given to Tenant. In the event of such termination and cancellation by Landlord, no damages, direct, indirect or consequential shall be payable by Landlord to Tenant. Tenant expressly waives any claim for damages other than the offset of rent as provided herein. In the event of termination as described above or at some other future termination date of this Lease, Landlord and Tenant shall, in advance of termination date, mutually determine and agree thereto in writing if said alternations, structures, improvements, or facilities shall become the property of landlord upon termination of this Lease; and if so determined to become the property of Landlord, Tenant hereby agrees to leave same upon vacating said premises. Landlord reserves the right from time to time to make alterations or improvements deemed necessary pursuant to this provision. 11. NOTICE: Whenever, under the terms of this Lease, any notice is to be given to either of the parties or whenever Tenant is to make rental payments to Landlord, the same shall be given or made by enclosing the same in a sealed envelope with first class postage prepaid and by mailing through the U.S. Postal Service such envelope as follows: LANDLORD: TENANT: County Sanitation District No. 1 of Orange County, California P.O. Box 8127 Fountain Valley, CA 92728-8127 Village Nurseries P.O. Box 9669 Brea, CA 92622 12. USE AND COMPLIANCE WITH LAW: Tenant intends to use said premises solely for growing and storing nursery stock in containers. Tenant shall, at its sole cost and expense, comply with all the requirements of all municipal, state, and federal authorities now in force or which may hereafter be in force pertaining to the use of said premises and shall faithful observe in the use of the premises all municipal ordinances and regulations and state and federal statutes and regulations now in force or which may hereafter be in force, and obtain necessary permits or licenses therefor. Tenant shall be responsible for, and pay directly, any and all taxes, fees, charges, and assessments levied in connection with the use of said premises. The judgment of any court of competent jurisdiction or the admission of Tenant in any action or proceeding against Tenant, whether Landlord be a party thereto or not, the Tenant has violated any such ordinance or statute in the use of premises shall be conclusive of that fact as between Landlord and Tenant. 13. LANDLORD TO BE HELD HARMLESS: Tenant, as a material part of the consideration to be rendered to Landlord, hereby agrees that it will hold Landlord exempt and harmless from any damage or injury to any person or to the property of any person arising from the use of the premises by the Tenant or from the failure of the Tenant to keep the premises in good condition and repair as herein provided. 14. LIABILITY INSURANCE: Tenant further agrees to acquire and keep in force during the life hereof, at Tenant's expense, public liability insurance in companies and through brokers acceptable to Landlord to protect against any liability to the public, incident to the use of or resulting from any accident occurring in or about the premises. The liability coverage pursuant to said insurance to be not less than One Million ($1,000,000.00) Dollars combined single limit per occurrence. Said insurance coverage obtained by Tenant shall name Landlord, its officers, agents and employees additional insureds. Tenant shall provide Landlord Certificates of Insurance as evidence of said coverage in a form approved by Landlord's General Counsel. 15. DESCRIPTION OF LEASED PREMISES: Landlord represents that the leasehold to Tenant is a strip of land containing approximately four acres of land located west of the west bank of the Santa Ana River south of Garfield Avenue to south of Yorktown Avenue in the City of Huntington Beach. Landlord further represents that the approximately four (4) acres are shown and delineated on Exhibit "A", attached hereto. IN WITNESS WHEREOF, the parties hereto have subscribed their signatures this 18th day of December 1996. Approved as to Form: General Counsel Date COUNTY SANITATION DISTRICT NO. 1 OF ORANGE COUNTY, CALIFORNIA, for itself and as contracting agent for County Sanitation Districts Nos. 2, 3, 5, 6, 7, 11, 13 and 14 for Orange County, California BY ___________ _ Chairman, Board of Directors BY ___________ _ Secretary, Board of Directors VILLAGE NURSERIES, L.P. BY _____________ _ GENERAL MANAGER --· ... ---~ ,._ ··-··-·· I co !! / ' \ ' - ,_ ,. POR. SEC. 5, T. 6 S., R. 10 W. --========J::r-TL I '':200' f ---------------------- p:I ~ H t,:j HQ H- ' > CD IO ~ ~ :s "'t ~ ij ~ Q: ~ ,,,,. ---~ -- -._ .~-.t:.:3,!-. .,~'-.i~l L.r\cLE. ·-.... -.. ;-·,.,,,. ·- PAfiCEL NO. :...r:;.,...\_3£= ~ ([) Cle tty Oil Co. FL ... 0 . P .O • 80:11 540$0 Loa Angeles, Calif. -------------------®© Southern California Edl~ ----------------\.:!:;/ · (j)@ · Count:r Sanitation Dla~CWl : WARO t ( MARCH 1969 ("'\h MARCH 1970) +rA_'VA OR ()7 -._ 1Dttvr,c41.. ___ :,zo.oo @ .RS 86-J ., .. ~ . • .. -- r4.rr ~u,11n11 :JR ?"\ SIJM)A, .~4- -...._ -....... I j 0 II 5.J llC 09 -...._ -....... ~ 139-I I ~ -....... -....... : STREET -...._ ( COOK r:1•?-11\ PAGO~~co,z"" CHR•~:.,,.s _,2~ -- •O•' 1'.i :s; ,q .. ~ ~~- l!>.3 ~ ) ,,,, , ... ,,_., NOTE-ASSESSOR$ Bu B LOT NUA:BER SHOWN IN CIRC ... , '-" "' ; \ -\ I I / ASSESSOR's MAP BOOK 155 PAGE 31 COUNTY OF ORANl ""&4':o-t-_t;R.~~WN ~ December 4, 1996 ... ·::d -~ = -~ Action Consideration of Review of Staffing for CSDOC Subsequent to Information ~;i ",~,W~"~f :::::::::::; ~::::::::n~ompliance with Federal Laws " ,ui ":" ,/ , ~----,'.~ Consideration of Progress Report on Removal of Obsolete Inventory :r.: !j ?#~= Action Information '.~i/1 ~;: .rt,,~ ~t,,~U:-Consideration of Status Report on User Fees and Capital Program Ill~~;:,;,. ':~:tl[;;n/10!::;;m;:;;~ Consideration of Rene otiated MO Us Professional & Su erviso Information Action tjliH::· --~'.=-~:;i~:.iti_t=?l:;~::.;·;;::;:J :iiFEB-81:JA'RYltii Tour of new Human Resources Office Area Information :::L '"' .... ·::,s,:q;s:'li------------------------------i-------• ::HL:1: = .. :-:: ::::. · ·---, ~; ·,,.,. Consideration of Second Quarter Investment Program Update Action .. Consideration of Approval of Fiscal Policies for Fiscal Year 97-98 Budget Action Consideration of Budget Assumptions and Fiscal Policies Action Consideration of Land Lease at Plant No. 2 Action Information Information Information date Information ·.::/;::::::::: :::!.·. , rn M'Al/i,Q_f,1 -:'ii Consideration of Report on Implementation of Risk Management Task Information ''-:!"' ::· · ·· _ __,_--·I Force 1------------------------------t---------11 J Consideration of 1997-98 User Fees, Connection Fees, Annexation Fees Action ~ Consideration of Fiscal Year 97-98 Districts-wide Training Program :i'c------------------------------------11 ·:rr :,1,. •,"'· Jiih, i ;;::!\i:W Consideration of Report on Integrated Emergency Response Plan 11-:1: ,,:: _ ::,ii. -~!!i!{m:,wr Information Information H:IWP .DTAIFIN\221 0\CRANEIFPC.MTG\FAHR.96\DECAJnCAL 12.96 CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411