Loading...
HomeMy WebLinkAbout1997-09-10DRAFT County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 MINUTES OF FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Wednesday, September 10, 1997, 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 Wednesday, September 10, 1997, 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 Barry Denes Norman Z. Eckenrode Mark Leyes Mark A. Murphy Thomas R. Saltarelli Mark Schwing Peer Swan, Vice Joint Chair Committee Directors Absent : William G. Steiner Other Directors Present: James Ferryman Chris Norby Margie Rice Charles Sylvia Staff Present: Gary Streed, Director of Finance Mike Peterman, Director of Human Resources Ed Hodges, Director of General Services Administration Bob Ooten, Director of Operations & Maintenance Chris Dahl, Director of Information Technology Michelle Tuchman, Director of Communications Gregg Mathews, Principal Administrative Analyst Mike White, Controller Steve Kozak, Financial Manager Marc Dubois, Contracts/Purchasing Manager Lisa Lorey, Human Resources Manager Terri Josway, Safety & Emergency Response Manager Lenora Crane, Committee Secretary Others Present: Tom Woodruff, General Counsel Rita Seymour, PIMCO Jeff Stone, Budget Manager, City of Anaheim Charlene Jung, Treasurer, City of Anaheim APPOINTMENT OF A CHAIR PRO TEM No appointment was necessary. PUBLIC COMMENTS No comments were made. APPROVAL OF MINUTES The minutes of the July 9, 1997 meeting of the Finance, Administration and Human Resources Committee were approved as drafted. ,,-, Minutes of Finance, Adn :and Human Resources Committee Page2 September 1 O, 1997 REPORT OF THE COMMITTEE CHAIR The Committee Chair had no report. REPORT OF THE GENERAL MANAGER In his absence, General Manager Don Mcintyre requested that Gregg Mathews report to the Committee on the following items: • Item No. 6: FY 96/97 Year-End Performance Objective and Workplan Report: Mr. Mathews reported that the General Manager found this to be a very interesting report. It is a culmination of several quarterly reports provided to the FAHR Committee over the course of the last fiscal year. It includes all of the data and results of the data that appeared in last year's budget and workplan. One noteworthy component is that, based on last year's results, the Districts completed and met 82% of its internal performance objectives and 87% of its workplan items. Mr. Mathews stated that staff continues to struggle with the format and presentation of this material, in an effort to make it user-friendly to staff and the Directors, and any suggestions on how to improve in this area are welcome. • Item 9: Districts' Assessment and Reinvention Team (OARD Phase Ill Status Report: Mr. Mathews advised that the Districts is spending a significant amount of effort re- engineering our operation with employee-driven committees. The Phase Ill report basically summarizes our progress to date, as well as future plans for the DART Committee. REPORT OF ASSISTANT GENERAL MANAGER The Assistant General Manager had no report. REPORT OF THE DIRECTOR OF FINANCE • Finance Director Gary Streed introduced Rita Seymour of Pacific Investment Co. (PIMCO), the Districts' external money manager, who was present to answer any questions concerning the quarterly investment management report or the investment policy. Jeff Stone, Budget Manager, City of Anaheim, and Charlene Jung, Treasurer, City of Anaheim, were present at the request of Director Zemel who was unable to attend. Mr. Streed advised that the monthly Treasurer's report, the quarterly investment report, and the annual investment report would all be discussed this evening, and was a good opportunity for anyone wishing to learn more about the Districts' financial program. • Mr. Streed advised the Committee that the monthly Treasurer's Report was distributed prior to the meeting in accordance with policy. The unrealized gains or losses included in the report is a new reporting requirement. The current report shows a loss which will be absorbed because of the "hold to maturity'' policy. REPORT OF THE DIRECTOR OF HUMAN RESOURCES Mike Peterman, Director of Human Resources, reported on three issues: • The Districts passed the AQMD audit on the rideshare program, even after some incentives originally in the plan were removed during the meet and confer process. It appears that the Minutes of Finance, Adr ,;and Human Resources Committee Page 3 September 10, 1997 AQMD is backing off on some of their stricter requirements. As a result, the Districts is doing a great job. • The Districts formed a labor management committee consisting of all three unions to discuss the broadbanding issue. A second meeting was held today. Mr. Peterman advised that broadbanding eliminates the current seniority or step system and replaces it with a system based on pay for skills and performance. Broadbanding would also eliminate a number of classifications, creating a more generalized workforce instead of a specialized one. Agreement has been reached with the committee to work through the issues as a team. A formal report will be presented to the Committee in October. • The computer loan program, implemented one month ago to issue loans to employees to purchase computers at 5% interest, has been very successful. We have already met our $150,000.00 limit. Out of 550 employees, 60 employees have taken advantage of the program, and it is expected another 60 will apply for a loan over the next year or two. Loans are to be paid back through payroll deductions. In July, the Committee directed staff to return when the $150,000 cap was reached. Mr. Peterman requested the Committee's guidance in order to increase the program by an additional $150,000, and questioned whether the Committee could act on the request tonight or should it wait until the next Committee or Joint Boards meeting. Mr. Peterman stated that this is the most cost-effective computer training program the Districts has, since employees are given an incentive to learn new computer skills and programs on their own time. After a brief discussion, the Committee advised that since this item was not on the Agenda, it could not be acted on tonight, but it should be brought before the Steering Committee at its meeting of September 24. Mr. Peterman was directed to prepare a proposal with several alternatives. The Steering Committee will then be able to make a recommendation to the Joint Boards. . REPORT OF THE DIRECTOR OF GENERAL SERVICES ADMINISTRATION Ed Hodges, Director of General Services Administration, reported that Item No. 8, Notification of Award of Contract for Sewer Line Cleaning, appearing on the Consent Calendar, is a receive and file item and concerns District No. 7. Mr. Hodges stated he will be contacting the District 7 Directors during the week to discuss this item, since it will appear on the Joint Boards agenda for District 7 to vote on. REPORT OF THE DIRECTOR OF COMMUNICATIONS Michelle Tuchman, Communications Director reported on the following: • The Districts is going to be the lead agency of a tri-agency project with Los Angeles County Sanitation Districts and the City of Los Angeles, to develop public awareness for water conservation during major rainstorms such as El Nino. The first meeting is scheduled for next Tuesday. Media attention has been given to the fact that three major agencies are working together on a project on a regional basis. The three agencies will be sharing staff and monetary resources. Minutes of Finance, Adr -~and Human Resources Committee Page 4 September 10, 1997 • A new program to train employees as tour guides has been developed. In the past, the Districts has been inundated with requests for Plant tours, especially during the school season. The Districts sometimes schedule up to six tours a week, with only two employees giving the tours, which normally last one-and-one-half hours. Those employees interested in giving one tour a month were requested to sign up for training after first obtaining their supervisor's approval. About 40 employees have indicated an interest, and 20 employees have already started training. There is a two-part training program, and we are currently in the second phase. • Our wastewater primer has been updated which describes what goes on at the Districts' plants. A copy is available for any Directors interested. REPORT OF GENERAL COUNSEL General Counsel Tom Woodruff reported that the California Supreme Court handed down an ominous decision regarding the California Employees' Retirement System Act of 1937, as a result of a case filed in Ventura County. The essence of the decision was that it was determined that certain benefits afforded to employees must be added to the dollar value of their salary compensation so as to determine the net final compensation. This final compensation is the basis for paying the retirement benefits. The decision will affect all 1937 Act public employee retirement systems, and all member public agencies. The agencies will be affected by being required to make additional payments to the retirement systems. A full report will be given at the next FAHR Committee meeting. There will be no impact in the next 30 days. CONSENT CALENDAR ITEMS (1 -9) 1. FAHR97-54: 2. FAHR97-55: 3. FAHR97-56: 4. FAHR97-57: RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF AUGUST 1997 (All Districts): The Treasurer's Report was handed out at the FAHR Committee 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. RECOMMENDED ACTION: Receive and file Treasurer's Report for the month of August 1997 and forward to the Joint Boards. CERTIFICATES OF PARTICIPATION (COP) REPORT (All Districts): RECOMMENDED ACTION: Receive and file this information-only item. EMPLOYMENT STATUS REPORT (All Districts): Total head count at the Districts as of August 20, 1997 RECOMMENDED ACTION: Receive and file this information-only item. INVESTMENT MANAGEMENT PROGRAM REPORT FOR THE PERIOD APRIL 1 THROUGH JUNE 30, 1997 (All Districts) RECOMMENDED ACTION: Receive and file this information-only report. Minutes of Finance, Adr ·)and Human Resources Committee Page 5 September 10, 1997 5. FAHR97-58: 6. FAHR97-59: 7. FAHR97-60: 8. FAHR97-61: 9. FAHR97-62: COST AVOIDANCE AS A RESULT OF THE DISTRICTS' INDUSTRIAL HYGIENE PROGRAM (All Districts) RECOMMENDED ACTION: Receive and file this information-only status report. FY 96/97 YEAR-END PERFORMANCE OBJECTIVE AND WORKPLAN REPORT COVERING THE PERIOD ENDED JUNE 30, 1997 (All Districts) RECOMMENDED ACTION: Review, approve and forward the 1996-97 Year-End Report for the period ended June 30, 1997, to the Joint Boards. REPORT ON NEGOTIATED CHEMICAL PURCHASES AND COST REDUCTIONS (All Districts) RECOMMENDED ACTION: Receive and file this information-only report. NOTIFICATION OF AWARD OF CONTRACT FOR SEWER LINE CLEANING OF THE 8 THRU 12 INCH DIAMETER LOCAL SEWERS IN THE IRVINE BUSINESS COMPLEX-SPECIFICATION NO. 9798-3 (District 7) RECOMMENDED ACTION: Receive and file this information-only report. DISTRICTS' ASSESSMENT AND REINVENTION TEAM (DART) PHASE Ill STATUS REPORT (All Districts): The Executive Summary for Phase Ill Status Report was prepared to update the Directors on the status of Phase Ill tasks. RECOMMENDED ACTION: Receive and file this information-only report. MOTION: Moved, seconded and carried to approve the recommended actions for items specified as 1 through 9 under "Consent Calendar." ACTION ITEMS (Nos. 10 -11) 10. FAHR97-63: SECURITY SERVICES-SPECIFICATION NO. P-177 (All Districts): COMMITTEE DISCUSSION: Ed Hodges, Director of General Services Administration, gave the presentation and answered questions from the Committee. He advised that for the past six years the Districts has out sourced the security at the Plants. For the past four years, Wakenhut has been the security contractor. The bid received for our current proposal is for security to cover both plants on a 24-hour basis . One guard will be stationed at Plant 1 between the hours of 5:30 a.m. and 5:30 p.m., Monday through Friday. There will be one period in the morning and afternoon when the guard shack will be vacant and the guard will make complete rounds of both plants. Between the hours of 5:30 p.m. and 5:30 a.m., and all day Saturday and Sunday, the guard service will provide continual rounds of both treatment plants. ,~ Minutes of Finance, Adr ; and Human Resources Committee Page 6 September 10, 1997 11 . FAHR97-48: During discussion, Mr. Hodges and Operations and Maintenance Director Bob Ooten, described past incidents of theft at the Plants and past nuisance incidents at Plant 2. General Counsel reviewed some provisions in the Districts' Purchasing Resolution, internal bidding policies and the authority of the Purchasing/Contracts Administrator, in order to provide the Committee with some alternatives. After lengthy discussion, the Committee felt that it would be a better insurance measure to retain a guard at each plant, since we have hundreds of millions of dollars in Plant assets, and, therefore, it would not be prudent to reduce security to such a low level. Mr. Hodges pointed out that two full-time guards would require an increase in the budget for these services. MOTION: Moved, seconded and carried to: 1) Authorize the Purchasing/Contracts Administrator to renegotiate the proposed contract with Wakenhut Corporation for the services of two security guards, for a one-year period beginning September 16, 1997, with the provisions for four (4) one-year extensions, in an amount not to exceed the estimated annual cost of $200,000, and 2) Leave it to the discretion of the Purchasing/Contracts Administrator to rebid the project, if necessary ANNUAL REVIEW OF THE DISTRICTS' INVESTMENT POLICY STATEMENT AND DELEGATION OF INVESTMENT AUTHORITY TO THE DIRECTOR OF FINANCE/TREASURER (All Districts) COMMITTEE DISCUSSION: Director of Finance Gary Streed provided the Committee with an overview and history of the Districts' investment program. This item was considered by the Joint Boards at their meeting of July 30. The Directors sent the proposed policy back to the FAHR Committee for further study and consideration, to be brought back to the Boards in September, and placed a moratorium on investing in reverse repurchase agreements until they consider approving the final policy. The Committee was reminded that at the Board meeting, Director Spitzer and others expressed concern regarding the appropriateness of using reverse repurchase agreements in our policy. Mr. Streed advised that many of the Boards' questions have been answered in the staff report. Mr. Streed further advised the Committee that a limited number of copies of the publication, "An Elected Official's Guide to Investing," published by the GFOA, are available to the Directors, upon request, and were originally distributed to them several months ago. The Committee took considerable time to review the Districts' Investment Policy document and investing mechanisms such as reverse repurchase agreements. Mr. Streed, Mr. Kozak, Rita Seymour of PIMCO, and General Counsel Tom Woodruff, answered questions from the Committee and representatives from the City of Anaheim, in detail regarding the Districts' investment policies and defined investment terms. The Committee briefly discussed PIMCO's credentials as one of the country's top financial investment firms, their investment strategies relating to public clients such as the Sanitation Districts, and their function in making the actual investment decisions in accordance with the Boards' policy. Minutes of Finance, Adr.)and Human Resources Committee Page 7 September 10, 1997 MOTION: Moved, seconded and carried with 6 Ayes and 3 Nos. to: 1. Approve the Districts' Investment Policy Statement, including the revisions recommended in the staff report. 2. Renew the delegation of investment authority to the Districts' Director of Finance/Treasurer for 1997-98. 3. Recommend that the Joint Boards of Directors adopt Resolution No. 97-XX for adoption of the Districts' Investment Policy Statement, and renewal of investment authority for 1997-98. 4. The Districts may enter into short-term (90-day) reverse repurchase agreements upon the recommendation of our external money managers, with a report back to the Committee; and 5. The Districts may not enter into long-term reverse repurchase agreements without approval of the Joint Boards of Directors. INFORMATIONAL PRESENTATIONS None. CLOSED SESSION None. OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY None. MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING None. MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT None. FUTURE MEETING DATES The next Finance, Administration and Human Resources Committee Meeting is scheduled for Wednesday, October 8, 1997, at 5:30 p.m. . . Minutes of Finance, Adr Page 8 September 10, 1997 ADJOURNMENT and Human Resources Committee The meeting was adjourned at 7:35 p.m. Submitted by: rP.-~~QA) ~ l{~ Finance, Administration and Human Resources Committee Secretary H:\WP .OT A \FIN\221 O\CRAN E\FAH R\F AHR.97\SEPT\MIN9-97 .DOC l 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 September 10, 1997, was duly posted for public inspection in the main lobby of the Districts' offices on September 4, 1997. IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of September 1997. Penny Kyle, Secri t ry o ach of the Boards of Directors of County Sanitatio ist ri s Nos. 1, 2, 3, 5, 6, 7, 11, 13 & 14 of Orange County, Ca ornia Posted: By: \\lead\data2\wp.dta\fin\221 O\crane\FAH RIFAHR.97 \SEPT\CERTPO 7 97 .doc DISTRIBUTION FAHR COMMITTEE MEETING PACKAGE Full Agenda Package Committee 15 & Mailing List Donald F. Mcintyre 1 Blake P. Anderson 1 Dan Dillon 1 Marc Dubois 1 Linda Eisman 1 JeffEsber 1 Ed Hodges 1 Steve Kozak 1 Penny Kyle 2 David Ludwin 1 Greg Mathews 1 Chris Dahl 1 Bob Ooten 1 Mike Peterman 1 Gary Streed 1 Michelle Tuchman 1 Terri Josway 1 Dan Tunnicliff (H.R.) 1 Nancy Wheatley 1 Mike White 1 Laurie Arnold 1 Gail Cain 1 Bob Geggie 1 Corina Chaudhry 1 Lenora Crane 1 File 1 Extras 3 Notices and Agenda 13 Posting 1 Jean Tappan (include Mins) 1 Angela Holden 1 Frankie Woodside 1 Patricia Magnante 1 Janet Gray 1 Fawn Elizondo 1 Debra Lecuna 1 Guard Shack (Ed Hodges) 1 Extras 3 (3-hole punched) (3-hole punched) (3-hole punched) Ron Zenk, Dist. 14 Treasurer's Report Only le \\1.EAD\OAT A2\WP .OTA \FIN\221 O\CRANE\F AHR\OISTLST.97 phone: (714] 962-2411 malfing address: P.0: Box 8127 Fbuntain Vallel9, CA 9272a-B127 street address: 10844 Ellis Avenue Fol,lht;lil!'l V~lle:y,, GA 9270S,.7018 Member Agencies • Cities 'Anaheim Bree Buena Park Cypress Fbuntsm Valley Ful/er&an - H1mcmgton Beach Irvine La Habra La Palms Los Alamiws Newport -Seseh Orange Placentia 'Si;lnta Ana Seal lfJesch Stanton Tusdn Ville Perl< Yorba Unda County of Orange SQnltary Districts Costs Mesa Gar'den Gr.•ove Midway City Water Districts Irvine Rench COUNTY C)NITATION DISTRICTS OF ORLJE COUNTY, CALIFORNIA September._ 3, 1997 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. SEPTEMBER 10, 1997 -5:30 P.M. DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 A regular meeting of the Finance, Administration and Human Resources Committee of the Joint Boards of Directors of County Sanitation Districts Nos. 1; 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, will be held at the above location, time and date. A Public Wastewater and Environmental Management Agency Committed ta Protecting the Environment Since 1954 FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Month September October November December January February March April May June July August September TENTATIVELY SCHEDULED MEETING DATES FAHR Committee Joint Board Meetings Meetings September 10, 1997 September 24, 1997 October 8, 1997 October 22, 1997 November 12, 1997 November 19, 1997 December 10, 1997 December 17, 1997 January 14, 1998 January 28, 1998 - February 11, 1998 February 25, 1998 March 11, 1998 March 25, 1998 April 8, 1998 April 22, 1998 May 13, 1998 May 27, 1998 June 10, 1998 June 24, 1998 July 8, 1998 July 29, 1998 NONE SCHEDULED August26,1998 September 9, 1998 September 30, 1998 I 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, SEPTEMBER 10, 1997 AT 5:30 P.M. ROLL CALL ADMINISTRATIVE OFFICES 10844 Ellis Avenue Fountain Valley, California 92708 APPOINTMENT OF CHAl'R 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). September 10, 1997 RECEIVE. FILE AND APPROVE MINUTES ©F PREVIOUS MEETING Recommendea Action: Receive, file and approve draft minutes of the July 9, 1997, Finance, Administration and Human Resources Committee meetings. REPORT OF COMMITTEE CHAIR REPORT.OF GENERAL MANAGER REPORT o'r= ASSIS1iA:NT GENERAL MANAGER RF.:PORT OF DIRECTOR OF FINANCE REPORT OF bl RECTOR OF HUMAN RESOURCES REPORT OF DIRECTOR 0F GEN6RAL SERVICES ADMINISTRATION REPORT OF DIRECTOR OF COMMUNICATIONS REPORT OF GENERAL COUNSEL CONSENT CALENDAR ITEMS !Ail matters placed on the cons.ent calendar are ,considered as not ~equirtngdlscussion or further. explanatfon a,nd ··~·1 !unless any particular item is requested to be removed from the consent calendar by a Director, staff member or · I member of the public in attendance, there will be no separate discussion of these items. All items on the consent t l calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included i ~on the consent calendar. All items removed from the consent calendar shall be considered in the regular order of J ~business. J II Members of the public who wish to remove an item from the consent calendar shall, upon recognition by the chair, l i state their name, address and designate by number the item to be removed from the consent calendar... ·---·-·-··-···"---·,--,---,,.·-1 1 • 1 , 1 !The Chair will detennine if any items are to be deleted from the consent calendar. L-·-·-··--···-·"1"···-"t-""~--······ .. --·-r---·--··--~·-··--. -·-··--~····-·-_..__..........,...._,.. 1. FAHR97-54: RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF AUGUST 1997 (All Districts): The August Treasurer's Report will be handed out at the FAHR Committee 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. RECOMMENDED ACTION: Receive and file Treasurer's Report for the month of August 1997 and forward to the Joint Boards. 2. FAHR97-55: CERTIFICATES OF PARTICIPATION {COP) REPORT (All Districts): RECOMMENDED ACTION: Receive and file this information-only item. -2- ' September 10, 1997 CONSENT CALENDAR (Continued) 3. FAHR97-56: EMPLOYMEN::r STATUS REPORT (All Districts): Total head count at the Districts as of August 20, 1997. RECOMMENDED ACTION: Receive and file this information-only item. 4. FAHR97-57: INVESTMENT MANAGEMENT PR.OGRAM REPORT FOR THE PERIOD APRIL 1 THROUGH JUNE 30. 1991' (All Districts) RECOMMENDED ACTION: Receive and file this information-only report. 5. FAHR97-58: COST AVOIDANCE AS A RESULT OF THE DISTRICTS' INDUSTRIAL HYGIENE PROGRAM (All Districts) RECOMMENDED ACTION: Receive and file this information-only status report. 6. FAHR97-59: FY96/97 YEAR-ENO PERF-(:)RMANCE eBJEGTIVE AND WORKPLAN REPORT COVERING THE PERIOD ENDED JUNE 30, 1997 (All Districts) RECOMMENDED ACTION: Review, approve and forward the 1996-97 Year-End Report for the period ended June 30, 1997, to the Joint Boards. 7. FAHR97-60: REPORT ON NEGOTIATED· CHEMICAL PURCHASES AND GOST REDUCTIONS (All Districts) RECOMMENDED ACTION: Receive and file this information-only report. 8. FAHR97-61 : NOTIFICATION OF AWARD OF CONTRACT FOR SEWER LINE CLEANJN'G OF THE S THRU 12 INCH DIAMETER LOCAL-·SEWERS IN THE IRVINE BUSINESS GOMPLEX -SPECl'FICAl'JON NO. 9798-3 (District 7) RECOMMENDED ACTION: Receive and file this information-only report. 9. FAHR97-62: DISTRICTS' ASSESSMENT AND REJNVE.NTION. TEAM (OARD PHASEI Ill STATUS REPORT (All Districts): The Executive Summary for Phase II Status Report has been prepared to update the Directors on the status of Phase Ill tasks. RECOMMENDED ACTION: Receive and file this information-only report. END OF CONSENT CALENDAR -3- September 10, 1997 Consideration of items deleted from Consent Calendar, if any. Consideration of one motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same. ACTION ITEMS 10. FAHR97-63: SECURITY SERVleES-SP'ECI PICATION NO. P-177 (All Districts) RECOMMENDED ACTION: The General Manager award a contract to the Wackenhut Corporation to provide security services at the daily rate of $286.12, for a one-year period, beginning September 16, 1997, with provisions for four (4) one-year extensions. The estimated annual cost is $97,936.80. (Ed Hodges -10 minutes) 11. FAHR97-48: ANNUAL REVIEWOFTHE DISTRICTS' INVESTMENT POLICY STATEMENT AND DELEGATIQN OF INVESTMENT AUTHORITY liO THE DIRECTOR OF FIN~N.CE!TREASLJRER (All Districts) RECOMMENDED ACTION: 1. Review and approve the Districts' Investment Policy Statement, including the revisions recommended in the report; 2. Renew the delegation of investment authority to the Districts' Director of Finance!Treasurerfor 1997-98; and 3. Recommend that the Joint Boards of Directors adopt Resoh,.1tion No. 97-XX for adoption of the Districts' Investment Policy Statement, and renewal of investment authority for 1997-98. (Steve Kozak-15 minutes) INFORMATl'ONAL PRESENTATIONS None. CLOSED SESSION jDuring the course ofe pnduq:ting the business sefforth on'~his agenda as a regular meetfng otthe Committee, the ·1 'I Chair may convene the Committee in closed session to consider matters of pending real estate negotiations, pending 1 or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or · 1 54957.6, as noted. l ,Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employee I lactioris or negotiations with employee representatives; or which are exempt from public disclosure under the i !California Public Records Act, may be reviewed by the Committee during a permitted closed session and are not i f available for public inspection. At such time as final actions are taken by the Committee on any of these subjects, the i l~inutes will refl~~~!!.!!9.uired disclosures of_inform~ti~n. J -4- -September 10, 1997 12_ Closed Session a. Convene in closed session, if necessary. b. Reconvene in regular session. c. Consideration of action, if any, on matters considered in closed session. d. Report on discussion taken in closed session, as required. OTHER BUSINESS, COMMUN'ICATIONS OR SUPPLEMENTAL AGENDA ITEMS, rF ANY MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTl:JRE AGENDA FOR ACTION AND STAFF REPORT FUTURE MEETING DATES The next Finance, Administration and Human Resources Committee Meeting is scheduled for October 8, 1997. NOTICE TO COMMITTEE MEMB~RS fif you h-ave ;~;·~~estions ~n the age~lila or ~sh to pla~e any items on the age~.d~: Committe~ memb;~··should ! contact the Committee Chair or Secretary ten days in advance of the Committee meeting. i !Committee Chair: j Comm. Secretary: l ·L,,_., _ ___,.. __ , le George Brown (562) 431-2185 Lenora Crane (714) 962-2411, Ext. 2501 , ,.--.. ~ ..... ..,._. ___ ,, __ .~_..,,..__.._ __ j71~1 9~?~~-~FAX} .......... _ .. _,_., __ _ \\LEAO\OATA2\WP.DTA\FIN\2210\CRANE\F AHR\FAHR.97\SEPT\AGENDA.OOC -5- ) ROLL CALL FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING DATE: September 10, 1997 TIME: 5:30 P .M. ADJOURN: P.M. COMMITTEE MEMBERS GEORGE BROWN (CHAIR) .............................................................................. . JOHN J. COLLINS (JC) .................................................................................. .. JAN DEBAY ........................................................................................................ . BARRY DENES .................................................................................................. . NORMAN ECKENRODE .................................................................................... . MARKLEYES .................................................................................................... .. MARK MURPHY ................................................................................................. . THOMAS SALTARELLI ..................................................................................... .. MARK SCHWING .............................................................................................. .. WILLIAM STEINER ............................................................................................. . PEER SWAN ..................................................................................................... .. STAFF DON MCINTYRE, General Manager ................................................................... . BLAKE ANDERSON, Assistant General Manager ............................................... == CHRIS DAHL, Director of Information Technology ............................................... __ ED HODGES, Director of General Services Administration ................................. __ 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 Technical Services .......................................... == STEVE KOZAK, Financial Manager ...................................................................... __ MIKE WHITE, Controller ...................................................................................... __ GREG MATHEWS, Principal Administrative Analyst ........................................... __ MARC DUBOIS, Contracts/Purchasing Manager ................................................. __ LINDA EISMAN, Training Manager ....................................................................... __ NICK ARHONTES, Maintenance Manager........................................................... __ TERRI JOSWAY, Safety & Emergency Response Mgr ....................................... __ LISA LOREY, Human Resources Manager .......................................................... __ LENORA CRANE, Committee Secretary .............................................................. __ OTHERS TOM WOODRUFF, General Counsel ................................................................. .. Penny Kyle Debra Lecuna DRAFT County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728..a127 Telephone: (714) 962-2411 MINUTES OF FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Wednesday. July 9. 1997. 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 Wednesday, July 9, 1997, 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 Barry Denes Norman Z. Eckenrode Thomas R. Saltarelli Mark Schwing Peer Swan, Vice Joint Chair Committee Directors Absent : Mark A. Murphy William G. Steiner Other Directors Present: None APPOINTMENT OF A CHAIR PRO TEM No appointment was necessary. PUBLIC COMMENTS No comments were made. APPROVAL OF MINUTES Staff Present: Donald F. Mcintyre, General Manager Judith A. Wilson, Assistant General Manager Mike Peterman, Director of Human Resources Gary Streed, Director of Finance Michelle Tuchman, Director of Communications Chris Dahl, Information Technology Manager Barbara Collins, Senior Administrative Analyst Linda Eisman, Training Manager Lisa Lorey, Human Resources Manager Terri Josway, Safety & Emergency Response Manager Dan Tunnicliff, Safety & Emergency Response Supvr. Steve Kozak, Financial Manager Mike White, Controller Lenora Crane, Committee Secretary Others Present: Tom Woodruff, General Counsel It was moved, seconded and duly carried to approve the draft minutes of the June 11, 1997 meeting of the Finance, Administration and Human Resources Committee. Minutes of Finance, Admi1 11d Human Resources Committee Page 2 July 9, 1997 REPORT OF THE COMMITTEE CHAIR The Committee Chair had no report. REPORT OF THE GENERAL MANAGER • General Manager Don Mcintyre reported that he sent a fax to the Directors today regarding AB 769 -Consolidation of the Districts. He advised that the bill was signed by the Governor today. There will be a meeting of the Executive Committee in September to approve the LAFCO plan. Director Collins noted that the bill is not effective until January. The hearing process for LAFCO will be after January 1, 1998. REPORT OF ASSISTANT GENERAL MANAGER -ADMINISTRATION Assistant General Manager Judy Wilson had no report. REPORT OF ASSISTANT GENERAL MANAGER -OPERATIONS The Assistant General Manager of Operations had no report. REPORT OF THE DIRECTOR OF FINANCE • Finance Director Gary Streed advised the Committee that the monthly Treasurer's Report was distributed prior to the meeting in accordance with policy. Total cash and investments total $390 Million, including deferred compensation, and we are in compliance with all of the Investment Policy guidelines. • Tax apportionments will be started in November. • Since the Agenda was mailed, COP rates have gone down. Interest rates are one half of what they were when the report was mailed. They were 4% at the mailing and are now at 2%. REPORT OF THE DIRECTOR OF HUMAN RESOURCES The Director of Human Resources had no report. REPORT OF THE DIRECTOR OF GENERAL SERVICES ADMINISTRATION The Director of General Services Administration had no report. REPORT OF THE DIRECTOR OF COMMUNICATIONS • Communications Director Michelle Tuchman reported that since word has gotten out that AB 769 has been signed, we received phone calls from two reporters from the Register and one reporter from the Times. The Times reporter spoke to Director Collins and the other two reporters from the Register have spoken to Judy Wilson. Michelle anticipates there will be articles in the "Metro" sections of either or both of those two newspapers tomorrow. • . Minutes of Finance, Adm. md Human Resources Committee Page 3 July 9, 1997 • Michelle reported that some of her staff has spent the day setting up the Districts' booth at the Orange County Fair which opens on Friday and will run from the 11th through the 27th. She invited those Directors who can find the time to stop by building number 8 at the Fair. She also advised that tickets can be picked up at her office. Metropolitan Water District of Orange County (MWDOC) will be helping staff the booth and has donated an ultra low-flush toilet for the display model. The public will be given information about the low-flush toilet exchange program at the Fair. A 4' x 6' stylized model of all of the Districts' treatment processes has been set up. REPORT OF GENERAL COUNSEL General Counsel had no report. CONSENT CALENDAR ITEMS (1 -D 1. FAHR97-45: 2. FAHR97-46: 3. FAHR97-47: 4. FAHR97-48: RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF JUNE 1997 (All Districts): The Treasurer's Report was handed out at the FAHR Committee 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. RECOMMENDED ACTION: Receive and file Treasurer's Report for the month of June 1997 and forward to the Joint Boards. CERTIFICATES OF PARTICIPATION (COP) REPORT (All Districts): RECOMMENDED ACTION: Receive and file this information-only item. EMPLOYMENT STATUS REPORT (All Districts): Total head count at the Districts as of June 19, 1997 RECOMMENDED ACTION: Receive and file this information-only item. ANNUAL REVIEW OF THE DISTRICTS' INVESTMENT POLICY STATEMENT AND DELEGATION OF INVESTMENT AUTHORITY TO THE DIRECTOR OF FINANCEfTREASURER (All Districts) RECOMMENDED ACTION: Staff recommends that the Finance, Administration & Human Resources Committee adopt a motion to recommend that the Joint Boards of Directors adopt Resolution No. 97-XX. -Minutes of Finance, Admi1 :1d Human Resources Committee Page 4 July 9, 1997 5. FAHR97-49: 6. FAHR97-50: DECLARATION OF DISTRICTS' OFFICIAL INTENT TO REIMBURSE THE DISTRICTS' EXISTING CAPITAL RESERVE FUNDS FOR CERTAIN EXPENDITURES MADE IN ADVANCE OF, AND IN ANTICIPATION OF, CAPITAL IMPROVEMENT EXPENDITURES FROM PROCEEDS OF A FUTURE INDEBTEDNESS ISSUE {All Districts) RECOMMENDED ACTION: Staff recommends that the Finance, Administration & Human Resources Committee adopt a motion to recommend that the Joints Boards of Directors adopt Resolution No. 97-XX. 1997-98 FINANCIAL INFORMATION SOFTWARE UPDATE AND SOFTWARE MAINTENANCE AGREEMENT WITH THE DISTRICTS' FINANCIAL INFORMATION SOFTWARE VENDOR, J.D. EDWARDS, IN THE AMOUNT OF $55,384.87 (All Districts) RECOMMENDED ACTION: Staff recommends that the Finance, Administration, and Human Resources Committee accept the 1997-98 financial information software update and software maintenance agreement with the Districts' financial information vendor, J.D. Edwards, in the amount of $55,384.87, and recommend approval by the Joint Boards at the July 30, 1997 meeting. • Director Swan requested that staff include in the COP report a chart that shows the aggregates of each of the remarketing agents at the end of the month. They should be pretty close, he noted. This will allow the Committee the opportunity to compare the remarketing agents' performance at the end of the month. MOTION: A motion was made, seconded and unanimously carried to approve the recommended actions for items specified as 1 through 6 under "Consent Calendar." ACTION ITEMS (Nos. 7 -9) 7. FAHR97-51: FINANCIAL ASSISTANCE PROGRAM FOR PURCHASE OF COMPUTER EQUIPMENT (All Districts): COMMITTEE DISCUSSION: Barbara Collins, Senior Administrative Analyst, GSA, advised that a computer purchase assistance program will allow Districts' employees the opportunity to work with a computer at home to enhance their computer literacy and skills, and increase their cross- training capabilities. Barbara advised that a recent survey of 450 cities, with responses from 218 of those agencies, sh.awed 40.4% of the respondent cities already have some type of financial assistance programs; 82% offer a program at no interest; 84% have programs with 24-month or more pay-back periods. A survey of cities and special districts within the CSDOC Districts showed 30.4% of the cities have computer purchase assistance programs, 80% of the water districts have programs, with the sanitary sewer districts having none. A survey of sanitation districts in California and Nevada indicated that 18.2% of those districts have programs. Minutes of Finance, Adm.~nd Human Resources Committee Page 5 July 9, 1997 8. FAHR97-52: In response to Committee questions regarding computer purchases, credit worthiness, priority lists, and loan repayments, staff advised that an employee would need to purchase software, a monitor and a printer to properly function with the computer. Monitors and printers have become relatively inexpensive. Any equipment to be purchased with the loan money must first be approved by Chris Dahl, Information Technology Manager. The loan must be paid through payroll deductions over 24 months. The employee is to make a 10% down payment on computer purchases. If an employee leaves the Districts, the loan must be paid off by deductions from the employee's last paycheck and using accumulated leave, if necessary. The maximum loan amount per employee will be $3,000. If the aggregate maximum loan fund is expended, a waiting list will be established until the fund is replenished through payroll deductions. The Irvine Ranch Water Districts' program will be our model. The program will initially be established on a first come, first serve basis. However, adjustments may be made later, if it is necessary to establish a priority list. During discussion, the Directors agreed such a program would be of enormous benefit to the Districts by enhancing the skills of its employees and creating a more efficient work force. Prior to the final motion, several motions were made and failed. MOTION: A motion was moved, seconded, and approved with 5 ayes and 2 nays to recommend that the Joint Boards establish a computer financial assistance program for Districts' employees with the following terms: • Maximum loan of $3,000 • 10% down payment • 24 months repayment period • Interest rate of 5% per year • Aggregate maximum loan fund of $150,000 • Equipment purchased must be compatible with Districts' equipment SEWER SERVICE CHARGES-PROPOSITION 218 (All Districts) COMMITTEE DISCUSSION: Gary Streed advised that the County Tax Collector collects the Districts' sewer service fees as a separate line item on the property tax bill. Since this is a special assessment, the County has requested that the Districts sign a certificate that indemnifies and holds the County harmless to any challenges based upon the provisions of Proposition 218. General Counsel Tom Woodruff informed the Committee that he received a faxed memo yesterday from the County Auditor which was sent to cities, schools and special districts indicating that he has backed off, on the advise of County Counsel, of his original request. The County Auditor does, however, have a smaller certificate which he is asking the Joint Chair to sign indicating that the assessments have been adopted in accordance with law and are legal and valid. Mr. Woodruff advised he is concerned that they are asking the Joint Chair to certify as to a matter of Minutes of Finance, Admh .:ld Human Resources Committee Page 6 July 9, 1997 9. FAHR97-53: law. This is putting the Directors in an impossible position. Mr. Woodruff felt that this request probably will also be withdrawn, since many of the other government agencies will not be supportive of it. MOTION: It was moved, seconded, and duly carried to refer this item to the Steering Committee at their meeting of July 30, 1997. AUTHORIZE STAFF TO NEGOTIATE AN AGREEMENT WITH R. W. BECK TO DEVELOP ASSUMPTIONS AND STRATEGIES TO IMPLEMENT A REPLACEMENT FUND FOR FIXED ASSETS FOR AN AMOUNT NOT TO EXCEED $75,000 (All Districts) COMMITTEE DISCUSSION: Mr. Streed advised that during the user fee and budget processes, several Directors requested a formal review of the Districts' accumulated funds policies. R. W. Beck is a firm that has experience in this area, they know a lot about Orange County, they know the soil conditions, earthquake faults and political conditions. R. W. Beck recently completed a model for the Irvine Ranch Water District. A firm proposal can be negotiated later this month after they complete a site visit to review records. Mr. Streed advised that initial discussions indicate the project can be completed by September 1997 at a cost not to exceed $75,000. Director Swan advised that he recommended this firm highly. They are based in Seattle. They did an extensive job for the Irvine Ranch Water District. Its a computer model which allows all kinds of variables to be plotted. Director Eckenrode questioned if equipment replacement would be included in this model and staff indicated it would be. Staff advised annual depreciation is about 3% for assets in the ground. We depreciate, but do not fund the depreciation. This program will clear up misconceptions that the public and media may have regarding the Districts' accumulated fund balances. Judy Wilsoh announced that the reserves study is being moved to the October FAHR Committee meeting in order to allow time for the study to be completed in September. MOTION: It was moved, seconded and duly carried to authorize staff to negotiate an agreement with R. W. Beck to develop assumptions and strategies to implement a Replacement Fund for fixed assets for an amount not to exceed $75,000. Minutes of Finance, Adm.~nd Human Resources Committee Page 7 July 9, 1997 INFORMATIONAL PRESENTATIONS '\ I 10. SAFETY AND EMERGENCY RESPONSE STATUS REPORT (All Districts) COMMITTEE DISCUSSION: Dan Tunnicliff advised that since fiscal year 1995-96, the Safety and Emergency Response Division has been working on three critical programs: 1) The Integrated Emergency Response Program, which includes specific training for emergency response personnel. Dan advised that the Districts have been conducting table top exercises, which are classroom responses to specific emergency scenarios, since February. Functional exercises which are specific activations of components of the IERP are in the planning phase; 2) The Industrial Hygiene Monitoring Program which looks at hazards in the workplace; and 3) The Hazardous Energy Control Procedures Needs Assessment Program which is to ensure that employees are protected from stored energy such as electrical, hydraulic, pneumatic and mechanical energy during maintenance and repair. Dan gave a status report and slide presentation on each of these critical programs. Mike Peterman, Human Resources Director, advised the Committee that the work plan for this fiscal year for the Safety and Emergency Response Division will not only include table top exercises, but requires participation in full-scale exercises, particularly concerning critical incidents, with local emergency response agencies. Terri Josway, Safety & Emergency Response Manager, exhibited the Districts' Emergency Response Plan and advised the Directors that copies are available upoo request. CLOSED SESSION The Chair reported the need for a closed session, as authorized by Government Code Sections 54957.6, to discuss and consider the item specified under "Closed Session" as Item 11 (a) on the published Agenda. The Committee convened in closed session at 6:20 p.m. At 6:42 p.m., the Committee reconvened in regular session. Confidential Minutes of the Closed Session held by the Committee have been prepared in accordance with California Government Code Section 549057 .2 and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. 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, Admi, ~1d Human Resources Committee Page 8 July 9, 1997 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, September 10, 1997, at 5:30 p.m. ADJOURNMENT The meeting was adjourned at 6:45 p.m. Submitted by: ~~ ceoracrane Finance, Administration and Human Resources Committee Secretary H:\WP.OTA\FIN\221 O\CRANE\FAHR\FAHR.97\JUL Y\7MIN.97 .. MEETING DATE OMTS: PDC: FAHR: 09/10/97 EXEC: STEER: JT.BDS: ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: . AGEN. ~ ITEM TRANSMITTAL CONTACT FOR INFORMATION (Originator) 210, Gary G. Streed, Ext. 2500 Division No., Name, and Extension RECEIVE AND FILE CERTIFICATES OF PARTICIPATION (COP) REPORT (All Districts) Recommended Action(s): 1. Receive and file this information-only COP Report of the Director of Finance. 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_ CURREN..T BUDGET/COST INFORMATION TOTAL BUDGETED AMT.: $ SOURCE: CORF JO DISTRICTS Schedule/Line Items: AMOUNT OF TRANSFER: Schedule/Line Item: TOTAL PROJECT BUDGET INFORMATION First Year in Budget: Master Plan Estimate: Year of First Costs: THIS AITNENDOR/PROJECT COST INFORMATION CURRENT YEAR BUDGET AMOUNT N/A ORIGINAL BUDGET TOTAL N/A ORIGINAL BID, PO, CONTRACT AMOUNT N/A WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _Permanent _ Limited Term Revised 05/14/97 H:\WP.DTA\FIN\2210\CRANE\FAHR\FAHR.97\SEPT\FAHR97.55 DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: CURRENT YEAR- TO-OATE EXPENDITURES N/A PREVIOUS BUDGET CHANGES N/A CHANGE ORDERS, FUNDS PREV. APPROVED N/A N/A YEAR-TO-DATE BUDGET BALANCE N/A BUDGET CHANGE THISAIT N/A AMOUNT REQUESTED THIS AIT NIA REVISED BUDGET TOTAL (Total Budget plus Transfers) N/A REVISED TOTAL PROJECT BUDGET $0.00 AMENDED PROJECT AMOUNT $0.00 REQUIRES BOARD POLICY ACTION? NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section Page 1 of2 3 scPrq:;- oate Signature Date Assistant General Manager (Or Designee) ADDITIONAL INFORMATION (Background and/or Summary) ATTACHMENTS TO C..uMMITTEE AGENDA (List): 1. Graph -COP Rate History Report ATTACHMENTS TO JOINT BOARDS AGENDA (List) 1. 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 "8" 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 Revised 05/14197 H:\WP.DTA\FIN\2210\CRANE\FAHR\FAHR.97\SEPnFAHR97.55 Page 2 of2 ~ "'C c iil "'O in )> Q) x -I RATE(%) iil (") m c. m C" '< !:: ~ 0 ..a. ~ (..) ~ U'I en "Tl 0 :;· 0 0 0 0 0 0 Q) i! 0 0 0 0 0 0 0 :::l 'ii 02-Jan-97 _fil z ~ )> z (") :.i m ~ 16-Jan-97 ~ ~ 0 ~ ~ "" )> ;;;>\ ~ ~ 30-Jan-97 -l m ::i: en :-t 13-Feb-97 <O "-I 27-Feb-97 ++ 13-Mar-97 )>-O 27-Mar-97 (") -Q) G>§· 0 (1)(1> "'O ~~ 1 O-Apr-97 en ::c "Oo-0-m )> Cll "'O -I ..., -I m 24-Apr-97 -m :c s: -m~ mo ++ 08-May-97 ::c ::c --< (f)C... ~ ::c o~ """'m o . 22-May-97 "'O ~ 0 ::::iO ::c .., cng -I :E ::I 05-Jun-97 Q) "O 19-Jun-97 03-Jul-97 17-Jul-97 31-Jul-97 14-Aug-97 - For Bd. Sec. UF m:: AGEN r-'-~ ' lllllll& 0 ~""' 0 COMM. INFO. ITEM ) ... ~ ~ 1 CZ::> "' ITEM -" 0 COMM. ACTION ITEM ~ 0 JT. BOS. CONSENT TRANSMITTAL ~: 0 JT. BOS. DISCUSSION ~~. (NON-CONSENT) 0 PUBLIC HEARING ~ JT. BOS. MEETING DATE JT. BOS. AGENDA ITEM NO. 3. MEETING DATE COMM. ID. NO. DISTRICT NO. CONTACT FOR INFORMATION OMTS: --OMTS (OriginatoT) PDC: POC FAHR: 9/10/97 FAHR ~ "J,-S{; 2520, Mike Peterman, Ext. 2105 EXEC: -EXEC All 1 l rf STEER STEER: Division No., Name, and Extension JT.BDS: AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: EMPLOYMENT STATUS REPORT: Total headcount at the Districts as of August 20, 1997. Recommended Action(s): 1. Receive and file the Employment Status Report. CEQA REVIEW: Project is Exempt: NOT APPLICABLE DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC Date Notice of Exemption Filed: ITEM: Negative Declaration Approved on Final EIR Approved on _ and Notice of Determination filed on -N/A CURRENT BUDGET/COST CURRENT YEAR CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET INFORMATION BUDGET AMOUNT TO-DATE BUDGET BALANCE TOTAL EXPENDITURES (Total Budget plus Transfers) TOTAL BUDGETED AMT.: $ N/A N/A N/A N/A SOURCE: CORF JO DISTRICTS Schedule/Line Items: AMOUNT OF TRANSFER: Schedule/Line Item: TOTAL PROJECT BUDGET ORIGINAL PREVIOUS BUDGET BUDGET CHANGE REVISED TOTAL INFORMATION BUDGET TOTAL CHANGES THISAIT PROJECT BUDGET First Year in Budget: N/A N/A N/A $0.00 Master Plan Estimate: Year of First Costs: THIS AITNENDOR/PROJECT COST ORIGINAL BID, CHANGE ORDERS, AMOUNT AMENDED INFORMATION PO, CONTRACT FUNDS PREV. REQUESTED THIS PROJECT AMOUNT APPROVED AIT AMOUNT N/A N/A N/A $0.00 WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO REQUIRES BOARD POLICY ACTION? NOT APPLICABLE If YES, state number: _ Permanent -Limited Term If YES, explain in ADDITIONAL INFORMATION section Revised 05114197 Page 1 of 2 H :\WP. OTA \HR\2520\STEEVES\AIT\997 .AIT CSDOC e P 0 . Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411 CONCURRENCES: Signature Date .D~vi.~,ion~ M/ a.n~gFr ~.r ~~ig,neffil_ , . , .. I l L_ \,ci_1.__;\. 1 ".L ~~~ ~~~~ Signature S zs-']7 Date Assistant General Manager (Or Designee) ADDITIONAL INFORMATION (Background and/or Summary) ATIACHMENTS TO COMMITTEE AGENDA (List): 1. August 20, 1997 -.. 'loyment Status Report. 2. Performance to -ar Staffing Plan ATTACHMENTS TO JOINT BOARDS AGENDA (List) 1. The Districts have a Full-Time Equivalent (FTE) headcount of 545.75 as of August 20, 1997. The actual body count is 564. The current FTE headcount is equivalent to a 2.5% reduction from the budgeted 559.75 positions. The one-month turnover rate for August 1997 was .35%. There were five full-time external hires during the month of August; two engineers, one for Division 490 -Plant Automation and one for Division 720 -Design & Planning Engineering,and three Collection Facilities Worker I for Division 420 -Collection Facilities Maintenance. There were also two part-time external hires for Intern positions for Division 620 -Environmental Compliance & Monitoring. Internal or external recruitment is in process for seven full-time and four part-time positions. The Districts are currently seeking internal or external candidates for the following replacement positions: Engineer (Construction Management}, Programmer Analyst (Programming, Data Base & Comm.}, Senior Engineer (Design Engineering), Warehouse Supervisor and Part-time Secretary (Purchasing & Warehouse}, Associate Engineer II (Environmental Compliance & Monitoring},-Project Specialist (General Services Administration}, Operations Supervisor (Plant 1 Operations), Part-time Lab Assistant (Environmental Sciences Laboratory), and two intern positions (Safety, O&M Process Support). It is projected that after filling these positions, the Districts FTE headcount will be 549.50. /ps c: Department Head AGM-Administration AGM-Operations General Manager Revised 05/14/97 H:\WP .DTA\HR\2520\STEEVES\Aln997 .AIT Page 2 of 2 Employment Status Report Run Date: 20-Aug-97 Regular Regular Total Regular Part-time Part-time FTE Vacant FTE FTE Full-time 20 hours 30hours Contract /ntem LOA Count Positlons 97-98 98-99 11 O -General Management Administration 6 0 0 0 0 0 6 0 6 5.5 Total General Management 6 -0 0 0 0 0 6 0 6 5.5 210 -Finance Administration 4 0 0 0 0 0 4 0 4 4 220 -Accounting 18 0 0 0 0 1 19 0 19 18 230 -Purchasing & Warehousing 11 0.5 0 0 0 1 12.5 3.5 16 16 Total Finance 33 0.5 0 0 0 2 35.5 3.5 39 38 310 -Communications 9 0 0.75 0 0 0 9.75 0 9.75 9.75 Total Communications 9 0 0.75 0 0 0 9.75 0 9.75 9.75 41 O -General Services Administration 4 0 0 0 0.5 1 5.5 0 4 4 420 -Collection Facilities Maintenance 16.5 0 0 0 0 0 16.5 1 17.5 18.5 430 -Plant Maintenance 39.5 0 0 0 0 0 39.5 1 40.5 38.5 460 -End Users Support 8 0 0 2 0 0 10 0 9 11 470 -Programming, Data Base & Comm. 8 0 0 0 0 0 8 2 10 11 490 -Plant Automation 6 0 0 0 0 0 6 1 7 7 Total General Services Admin. 82 0 0 2 0.5 1 85.5 5 88 90 510 -Human Resources Administration 5 0.5 0.75 0 0 0.5 6.75 0 6.75 6.75 520 -Education & Training 5 0 0.75 0 0 0 5.75 0.25 6 6 530 -Safety & Emergency Response 5 0 0 0 0 0 5 0.5 5.5 5.5 Total Human Resources 15 0.5 1.5 0 0 0.5 17.5 0.75 18.25 18.25 - 610 -Technical Services Administration 4 0 0 0 0.5 0 4.5 0.5 5 6 620 -Environmental Compliance & Monitoring 17 0 0.75 1 0.5 1 20.25 1 21.25 21.5 630 -Environmental Sciences Laboratory 33 1 -0 0 0.5 0 34.5 0.5 35 30 640 -Source Control 37 0 0.75 0 0 0 37.75 1 38.75 37.75 Total Technical Services -91 1 1.5 1 1.5 1 97 3 100 95.25 710 -Engineering Administration 2 0 0 0 0 0 2 1 3 3 720 -Planning & Design Engineering 25 0 1.5 0 0.5 1 28 3 31 31 730 -Construction Management 30 0 0 5 0.5 0 35.5 2 37.5 38 Total Engineering 57 0 1.5 5 1 1 65.5 6 71.5 72 610 -0 & M Administration 2 0 0 0 0 0 2 0 2 2 820 -0 & M Process Support 11 0 0 1 0.5 0 12.5 0 12.25 11.25 830 -Plant 1 Operations 36 0 0 0 0 2 38 0 37 37 840 -Plant 2 Operations 43 0 0 0 0 0 43 0 42 40 650 -Mechanical Mice 54.5 0 0 0 0 0 54.5 0 54.5 50.5 860 -Electrical & Instrumentation Mtce 58.5 0 0 0 0 0 58.5 0 58.5 58.5 670 -Cogeneration 13 0 0 0 0 0 13 0 13 13 880 -Air Quality & Special Projects 7 0 0 0 0.5 0 7.5 0.5 8 8 Total Operations & Maintenance 225 0 0 1 1 2 229 0.5 227.25 220.25 Total Staffing 518 2 5.25 9 4 7.5 545.75 18.75 559.75 549 H:lexcel.etalhr\steeves\empdiv.xls Performance to 5-Y ear Staffing Plan 640~-------------------~ 620 I-+-FTE Headcount I 600~-6=;*==.----------!==============-----------j 580-r----~=-----=-------------------t ........ 560 -1--------19:::::-::a~---=------· _-_ .. -____::.· I _. ._ • ... . -. ~ ·-............. _ . 540 -i--------~~ ........ ~~--------~ 520-;---------------------~ 500-+---------------------~ 480---r--T---,------.--.--,---,--~-----,---.--.--,-~~---,------.-~-,---.---r--T~ J A S 0 N D J F M A M J J A S 0 N D J F M A M J I FY 96-971 I FY 97-98 I _) MEETING DATE OMTS: PDC: FAHR: 9/10/97 EXEC: STEER: JT.BDS: 9/24/97 AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGENl ITEM TRANSMITTAL CONTACT FOR INFORMATION (Originator) 210, Steve Kozak, 2504 Division No., Name, and Extension INVESTMENT MANAGEMENT PROGRAM REPORT FOR THE PERIOD APRIL 1 THROUGH JUNE 30, 1997 (All Districts) Recommended Action(s}: 1. 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 _ CURRENTBUDGETICOST CURRENT YEAR INFORMATION BUDGET AMOUNT TOTAL BUDGETED AMT.: $ N/A SOURCE: CORF JO DISTRICTS Schedule/Line Items: AMOUNT OF TRANSFER: Schedule/Line Item: TOTAL PROJECT BUDGET ORIGINAL BUDGET INFORMATION TOTAL First Year in Budget: NIA Master Plan Estimate: Year of First Costs: THIS AITNENDOR/PROJECT COST ORIGINAL BID, PO, INFORMATION CONTRACT AMOUNT N/A WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent -Limited Term Revised 05114197 H:\WP.DTA\FIN\2210\CRANE\FAHR\FAHR.97\SEPnFAHR97-57.DOC DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: 01/22/97 CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET TO-DATE BUDGET BALANCE TOTAL EXPENDITURES (Total Budget plus Transfers) N/A N/A N/A PREVIOUS BUDGET BUDGET CHANGE REVISED TOTAL CHANGES THISAIT PROJECT BUDGET N/A N/A $0.00 CHANGE ORDERS, AMOUNT AMENDED FUNDS PREV. REQUESTED THIS PROJECT APPROVED AIT AMOUNT N/A NIA $0.00 REQUIRES BOARD POLICY ACTION? NO If YES, explain in ADDITIONAL INFORMATION section Page 1 of2 Date Date Signature Date Assistant General Manager ADDITIONAL INFORMATION (Background and/or Summary) ATTACHMENTS TO .,MITTEE AGENDA (List): 1. Staff Report 2. PIMCO Report 3. Callan Report ATTACHMENTS TO JOINT BOARDS AGENDA (List) 1 . Staff Report 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 in compliance with the Districts' adopted Investment Policy, and the California Government Code. SK:lc c: Department Head AGM-Administration AGM-Operations General Manager Revised 05/14197 H:\WP.DTA\FIN\221 O\CRANE\FAHR\FAHR.97\SEPT\FAHR97-57.DOC Page 2 of2 September 10, 1997 STAFF REPORT Consideration of motion to receive and file Quarterly Investment Management Program Report for the period April 1 through June 30, 1997 Background Section 15.0 of the Districts' Investment Policy includes monthly and quarterly reporting requirements 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 that 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 the Districts' portfolios managed by PIMCO for the period April 1 through June 30, 1997. Portfolio Perfonnance Sunvnary Quarter Ended June 30, 1997 Liquid Operating Monies(%) Long-Term Operating Monies(%) Total R"ate:'Oft;Retur,ri .. .... ft! = . :; ,;;.,.: .. ....... ll •... =--" ::_·~-· ... ;Yi;.f,., 3 month 1.4 2.6 6 months 2.7 3.2 9 months 4.1 5.5 Since inception 30 Sept 95 5.6 6.3 Benchmark' " Ji~ ~ .. 3 Month 1.3 2.5 6 Month 2.6 2.9 9 Month 3.9 5.1 Market Value per PIMC030 June 97 $17.1M $321 .3M Estimated Current Yield30 June 97 5.54% 6.54% Quarterly Deposits (Withdrawals) $12.4M Estimated Annual Income $0.9M $21 .0M CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411 I .. FAHR97-57 Page 2 September 10, 1997 Market Recap The second quarter of 1997 saw the surging economic expansion of the first quarter subside to a moderate pace of growth, due to contractions in consumer spending. This moderation decreased the threat of inflation, which eased fears that the Federal Reserve would further tighten the Fed Funds target rate above the 5.5% level which they established in March. At their May meeting, the Fed held the rate constant. Fixed income showed a stronger performance over the first quarter; their positive returns reflecting a mild easing of interest rates. PIMCO continued a below-index duration during the second quarter for the Long-Term Operating Monies portfolio, emphasizing U.S. Treasury and Agency securities, and high-quality corporate sector securities. This contributed to the portfolio performing slightly better than its benchmark again this quarter (2.6% vs. 2.5%). PIMCO continued to maintain a below-index duration for the Liquid Operating Monies portfolio, and emphasized high-quality Commercial Paper investments, which contributed to the portfolio slightly outperforming its benchmark (1.4% vs. 1.4%) this quarter. Comparative marked-to-market quarter-end portfolio values are shown in the table below. On April 17, 1997, $12.4 million, received through the County Tax Collector's apportionment cycle, was deposited in the Liquid Operating Monies portfolio. Liquid Long-Tenn Operating Monies Operating Monies Quarter Ending ($M) ($M) 30 Sept. 96 14.2 287.1 31Dec.96 14.4 311.5 31Mar.97 4.5 313.2 30June 97 17.1 321.3 Recommendation Receive and file this information-only report. SK:lc \'Jead\data2\wp.dta\fin\221 O\crane\F AH R\F AH R.97\STAFFRPT.97\srfahr97-57.doc For Bd. Sec. Use Ontv D COMM. INFO. ITEM D COMM. ACTION ITEM D JT.BDS.CONSENT 0 JT. BOS. DISCUSSION (NON-CONSENn D PUBLIC HEARING ----JT. BOS. MEETING DATE ----JT. BOS. AGENDA ITEM NO. MEETING DATE OMTS: PDC: FAHR: 09/10/97 EXEC: STEER: JT.BDS: COMM. ID. NO. OMTS. ____ _ PDC _ _.0_~- FAHR i1·S"i; EXEC. ____ _ STEER. ___ _ DISTRICT NO. All AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGENDA,-.,, ITEM TRANSMITTAL CONTACT FOR INFORMATION (Originator) 530, Terri Josway, 2140 Division No., Name, and Extension Cost avoidance as a result of the Districts' Industrial Hygiene Program. Recommended Action(s): 1. Receive and file this information-only 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_ CURRENT BUDGET/COST CURRENTYEAR INFORMATION BUDGET AMOUNT TOTAL BUDGETED AMT.: $100,000 SOURCE: JO $100,000 Schedule/Line Items: 530 AMOUNT OF TRANSFER: Schedule/Line Item: TOT AL PROJECT BUDGET ORIGINAL INFORMATION BUDGET TOTAL First Year in Budget: 1996-97 Master Plan Estimate: 225,000 Year of First Costs: 1996 THIS AITNENDOR/PROJECT COST ORIGINAL BID, PO, INFORMATION CONTRACT AMOUNT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO ~-<4· ~~ Originator (/ ~),J..5/f7 r Date CON~ENCES: ( l.R.. .J 14. \. J_e,_,,,, ~ Signature ~ Divis_icr)v'lan~er (9f Designet;f\ I V[AXlw.Jl 4 1L 'Ltli-'11'' e:j-2 5 ~l7 ~t:~.e ~~~~ Date ~ ? .. J-/~~/ Signature Date '?/J.!, fl 1 d'ate Assistant General Manager (Or Designee) 8/25/97 H:\wp.dta\hr\2530~osway\lndustrial Hygiene\0997 FAHR Report.doc DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: 07/24/96 CURRENT YEAR- TO-DATE EXPENDITURES $5,157.06 PREVIOUS BUDGET CHANGES CHANGE ORDERS, FUNDS PREV. APPROVED YEAR-TO-DATE BUDGET BALANCE $94,842.~4 BUDGET CHANGE THISAIT AMOUNT REQUESTED THIS AIT REQUIRES BOARD POLICY ACTION? NO ATTACHMENTS TO COMMITTEE AGENDA (List): 1. REVISED BUDGET TOTAL - (Total Budget plus Transfers) N/A REVISED TOTAL PROJECT BUDGET $0.00 AMENDED PROJECT AMOUNT $0.00 ATTACHMENTS TO JOINT BOARDS AGENDA (List) 1. Page 1 of 6 ADDITIONAL INFORMATION (Backgrouort and/or Summary) I In July 1996, the Districts retained Clayton Environmental Consultants, Inc. to conduct industrial hygiene- related services. The field of industrial hygiene is concerned with the control of occupational health hazards that arise in the work environment. This is achieved through the anticipation, recognition, evaluation, and control of those environmental factors or stressors which may cause employee illness, injury, or discomfort. Industrial hygiene activities include surveys, measurements, evaluations, controls, and recommendations. During FY1996-97, ten industrial hygiene projects were completed at a one-time cost of $79,954. The scope of the projects ranged from CalOSHA compliance issues to addressing employee complaints. The work completed during FY1996-97 will help reduce the Districts annual manpower cost by approximately $185,000. The majority of the annual savings are due to the reclassification of many permit required confined spaces in both plants and the pump stations. The reclassification of the confined spaces will allow a reduction in the number of employees required to be on-site during an entry. This savings was calculated using information from the Computerized Maintenance Management System. The annual cost avoidance for these tasks was calculated by identifying the frequency and duration of specific job tasks and the number of employees required to perform the work. Table 1 provides a description of each project, the cost of the project, comments concerning the project, and the anticipated cost avoidance and/or benefit. Table 2 is a summary of the data used to calculate the annual cost avoidance of reclassifying permit required confined spaces. During FY1997-98, the Safety and Emergency Response Division intends to complete the evaluation of the remaining Permit Required Confined Spaces, implement an ergonomic program, evaluate Source Control Inspectors exposures during routine work at various industries, and respond to employee complaints. Implementation of these programs and collection of data will ensure regulatory compliance and assist in the defense of workers' compensation claims. The Industrial Hygiene Program budget for this fiscal year is $100,000. It is anticipated that the Industrial Hygiene Program budget for future years will be approximately $25,000 to respond to employee complaints, collect data for new CalOSHA regulations, and ensure employee safety during emergency situations. 8/25/97 \llead\data2\wp.dta\hr\2530~osway\lndustrial Hygiene\0997 FAHR Report.doc Page 2 of 6 Table 1 1996-97 Industrial Hygiene Program Project Cost of Comments Annual Cost Avoidance or Study Benefit Dewatering Air Evaluation $12,059 Since 1991, employees have complained about the air Benefit: Employee safety and quality in dewatering and the study was conducted to well being. determine if their was potential for adverse health effects. Outcome: The data from the evaluation indicated that there were no adverse health exposures from the normal process. Laboratory Roof Emissions $5,237 Prior to the study, all activity in the fume hoods was Cost Avoidance: Evaluation stopped during maintenance, which required roof Approximately $2,356 access. (2.2 year payback). Outcome: The study determined that maintenance activities could take place while the laboratory fume 76 (annual employee hours) X hoods were in full operation, which results in no down 1.24 (Benefits) X $25.00 time for the laboratory. (Averaoe Salary) = $2,356.00 Noise Survey $29,497 CalOSHA requires that employers complete a Benefit: The study provided comprehensive noise survey to determine potential the documentation for employee exposure to noise. development of a hearing conservation program and The average cost of a workers compensation claim for compliance with CalOSHA hearing loss is $5,000. Regulations. Outcome: CalOSHA compliance and three additional work areas have been posted as requiring hearing protection based on the data. Confined Space Evaluation $19,771 A provision exists in the CalOSHA Permit Required Benefit: The study provided Confined Space (PRCS) standard that allows the the documentation necessary Districts to reclassify the space if certain criteria are met. for the reclassification of many Industrial hygiene surveys were conducted to determine of the Districts' PRCSs. which PRCSs could be reclassified and entered under alternate-method work procedures. Cost Avoidance: (83 permit required confined spaces have been Approximately $182,000. reclassified). See Table 2 for details. Outcome: Safe confined space entry with less staff time. Carpenter Shop Ventilation $500 An industrial hygiene review of a new ventilation system Benefit: The design review by System designed in-house to reduce employee exposure to a qualified person. particulates. Outcome: Proper desion of svstem. 8/25/97 \\lead\data2\wp.dta\hr\2530~osway\lndustrial Hygiene\0997 FAHR Report.doc Page 3 of 6 Table 1 1996-97 Industrial Hygiene Program (continued) Project Cost of Comments Annual Cost Avoidance or Study Benefit Paint Shop Exposure $223 Determination of employee exposures while working Benefit: Employee safety, Evaluation within the Spray Paint Booth. This data is used to select well being, compliance with the appropriate respiratory protection. CalOSHA Respirator Outcome: Proper respiratory protection selection. Protection reQulations. Source Control Inspector $180 Employees have complained about the air quality of Benefit: Employee safety and Exposure various industries while conducting routine inspections. well being. The first phase of this study was to gain information regarding employee concerns. Outcome: Addressed employee concerns. Laboratory Spills $640 Employees complained about the air quality in an area of Benefit: Employee safety and the laboratory after a chemical spill occurred. Clayton well being. reviewed information regarding the spilled chemical, interviewed employees, provided recommendations regarding cleanup, reviewed existing spill cleanup procedures, and provide recommendations for a laboratory spill cart. Outcome: Proper spill procedures. Ergonomic Evaluation $5,058 Several computer workstations were reviewed to Benefit: Employee safety, determine what, if any, ergonomic improvements could well being, and potential be made and to determine cumulative trauma disorder workers compensation claims (CTD) risk factors. avoidance. The average cost of a workers compensation claim for a CTD is $8,000. Outcome: Improvement of workstation comfort. Confined Space Training $990 Confined Space training was required on short notice to Benefit: Support for provide a class for the contractor assisting emergency services. Instrumentation staff in replacement of the flow meters for the Outfall. Number trained: 10 Outcome: Training provided to ensure a safe entry into the space. Management of Projects $5,439 Meetings to discuss potential projects and oversight of Benefit: Coordination of projects in progress. projects. Outcome: Better utilization of resources and reduce potential duplication of efforts. Total Cost $79,594 $184,356 8/25/97 \\lead\data2\wp.dta\hr\2530\josway\lndustrial Hygiene\0997 FAHR Report.doc Page 4 of 6 Table 2 Alternate Method Savings for Permit Required Confined Spaces (PRCSs) Division Location Structure Task Staff Task Frequency Total Manpower Total Req'd Duration per Year Hours Cost1 Annual for PRCS (hours) (days) per Year (hourly) Cost 420 Coll. Pump Stations with Fixed Ventilation Systems Maint 2 5 192 1920 26.016 $49,951 (Drypit) 420 Coll. Pump Station Run Task Maint 2 4 192 1536 26.016 $39,961 420 Coll. Pump Station Valve Pit (Valve Exercise) Maint 2 4 56 448 26.016 $11,655 420 Coll. Wet Well Pump Stations Maint 2 6.50 10 130 26.016 $3,382 420 Coll. Wet Well Pump Stations (cleaning) Maint 2 5.50 40 440 26.016 $11,447 Total $116,396 430 1 M&D Structure Paint 2 9 3 54 26.016 $1,405 430 1 Effluent Junction Box Paint 2 9 3 54 26.016 $1,405 430 1 Sunflower Pump Station Paint 2 9 0.67 12 26.016 $312 430 2 Headworks Meter Pit Paint 2 9 3 54 26.016 $1,405 430 2 OOBS Valve Pit Paint 2 9 3.33 60 26.016 $1 ,561 430 2 Outfall Meter Probes (manholes) Paint 2 9 2 36 26.016 $937 430 2 Outfall Vent Vault Paint 2 9 0.50 9 26.016 $234 430 2 P&Q Primary Basin Pump Room Valve Vault Paint 2 9 0.50 9 26.016 $234 430 2 Plant Water Station Check Valve Pit Paint 2 9 1 18 26.016 $468 430 1,2 Primarv Clarifier Bladder Valves (manholes) Paint 2 9 16 288 26.016 $7,493 Total $15,454 850 1 M&D Structure Maint 2 1 4 8 26.016 $208 850 1 Effluent Junction Box Maint 2 2 2 8 26.016 $208 850 2 OOBS Valve Pit Maint 2 2 2 8 26.016 $208 850 2 Outfall Vent Vault Maint 2 2 2 8 26.016 $208 850 1 Final Clarifier Basins Maint 2 2 2 8 26.016 $208 850 1 Final Aeration Basins Maint 2 2 2 8 26.016 $208 850 1 Sunflower Pump Station Maint 2 2 2 8 26.016 $208 850 2 Plant Water Station Check Valve Pit Maint 2 24 4 192 26.016 $4,995 Total $6,452 8/25/97 \\lead\data2\wp.dta\hr\2530\josway\lndustrial Hyglene\0997 FAHR Report.doc Page 5 of 6 I I Table 2 Alternate Method Savings for Permit Required Confined Spaces (PRCSs) Division Location Structure Task Staff Task Frequency Req'd Duration per Vear for PRCS (hours) (days) 860 1 M&D Structure Maint 2 1 4 860 1 M&D Structure Maint 2 4 24 860 1 M&D Structure Ma int 2 1 26 860 1 Sunflower Pump Station Maint 2 1 1 860 2 OOBS Valve Pit Maint 2 4 2 860 1,2 12 kV Vaults Maint 2 4 50 860 1,2 480 kV Vaults Maint 2 4 61 860 Coll. Pump Stations with Fixed Ventilation Systems Maint 2 4 54 (Drypit) Total Total Potential Savin as c: Department Head AGM-Administration AGM-Operations General Manager 8/25/97 l 1997-98 Manpower Cost= average 501 hourly rate (20.37x1. 03)x(1 .24) 2 Total Annual Cost = (Staff Req'd for PRCS)x(Task Duration)x (FrequencyperYearyx(ManpowerCoslj \\lead\data2\wp.dta\hr\2530~osway\lndustrlal Hyglene\0997 FAHR Report.doc Page 6 of 6 Total Manpower Total Hours Cost1 Annual per Year (hourly) Cost 8 26.016 $208 192 26.016 $4,995 52 26.016 $1,353 2 26.016 $52 16 26.016 $4 16 400 26.016 $10,406 488 26.016 $12,696 432 26.016 $11 ,239 $43,655 $181,956 D COMM. INFO. ITEM D COMM. ACTION ITEM D JT.BOS.CONSENT D JT. BOS. DISCUSSION (NON-CONSENl) D PUBLIC HEARING For Bd Ses;. Ur 'i. ----JT. BOS. MEETING DATE I• !• -JT. BOS. AGENDA ITEM NO. MEETING DATE OMTS: PDC: FAHR: 09-10-97 EXEC: STEER: JT.BDS: 09-24-97 COMM. ID. NO. OMTS ____ _ •PDC ' FAHR Cf 7 • f9 EXEC ____ _ STEER. ___ _ DISTRICT NO. All AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: I AGENC ' I ITEM TRANSMITTAL lo. CONTACT FOR INFORMATION (Originator) 110, Greg Mathews, 2006 Division No., Name, and Extension FY 96-97 Year End Performance Objective and Workplan Report covering the period ended June 30, 1997. Recommended Action(s): 1. Staff recommends that the Committee review, approve and forward the 1996-97 Year-End Report for the period ended June 30, 1997, 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_ CURRENT BUDGET/COST INFORMATION TOTAL BUDGETED AMT.: SOURCE: Schedule/Line Items: AMOUNT OF TRANSFER: Schedule/Line Item: TOTAL PROJECT BUDGET INFORMATION First Year in Budget: Master Plan Estimate: Year of First Costs: THIS AITNENDOR/PROJECT COST INFORMATION CURRENT YEAR BUDGET AMOUNT NIA ORIGINAL BUDGET TOTAL NIA ORIGINAL BID, PO, CONTRACT AMOUNT NIA WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent _ Limited Term H:\WP.DTA\ADMIN\2150\MATHEWS\FAHR\091097.AIT DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: Approval of 3rd Quarter Performance Report -5114197 CURRENT YEAR· TO-DATE EXPENDITURES NIA PREVIOUS BUDGET CHANGES NIA CHANGE ORDERS, FUNDS PREV. APPROVED NIA YEAR-TO-DATE BUDGET BALANCE NIA BUDGET CHANGE THISAIT NIA AMOUNT REQUESTED THIS AIT NIA REVISED BUDGET TOTAL (Total Budget plus Transfers) NIA REVISED TOTAL PROJECT BUDGET $0.00 AMENDED PROJECT AMOUNT $0.00 REQUIRES BOARD POLICY ACTION? NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section Page 1 of2 CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411 r--·· 1.}s.Jq Date Signature Date Division Manager (Or Designee) Date Signa ure Assistant General Manager (Or Designee) ADDITIONAL INFORMATION (Background and/or Summary) TTACHMENTS TO CC' °lTTEE AGENDA (List): 1. Third Quarter Finar. Jnd Operational Report for the period ended June 30, 1997. ATTACHMENTS TO JOINT BOARDS AGENDA (List) 1. Third Quarter Financial and Operational Report for the period ended June 30, 1997. Attached, in a separately bound document, is the Districts' End of Year Workplan and Performance Report - FY '96-97. This report covers the period ended June 30, 1997. Contained within this report is the status of the divisional performance objectives and workplan milestones identified in the 1996-97 approved budget and workplan document. This report is a summary of operational accomplishments of the Districts' through June 30, 1997. c: Department Head AGM-Administration AGM-Operations General Manager H:\WP.DTA\ADMIN\2150\MATHEWS\FAHR\091097.AIT Page 2 of 2 MEETING DATE OMTS: PDC: FAHR: 9-10-97 EXEC: STEER: JT.BDS: All AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN. A ITEM TRANSMITTAL CONTACT FOR INFORMATION (Originator) 230, Marc Dubois, ext. 2650 Division No., Name, and Extension Report on negotiated chemical purchases and cost reductions. Recommended Action(s): 1. Receive and file this information-only report of Contracts/Purchasing Manager. CEQA REVIEW: Project is Exempt: YES NO NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on_ and Notice of Determination filed on _ CURRENT BUDGET/COST CURRENT YEAR INFORMATION BUDGET AMOUNT TOTAL BUDGETED AMT.: $3,469,000 $3,469,400 SOURCE JO DISTRICTS Schedule/Line Items: Chemicals AMOUNT OF TRANSFER: Schedule/Line Item: TOTAL PROJECT BUDGET ORIGINAL BUDGET INFORMATION TOTAL First Year in Budget: NIA Master Plan Estimate: Year of First Costs: THIS AITNENDOR/PROJECT COST ORIGINAL BID, PO, INFORMATION CONTRACT AMOUNT Projected Budget Savings NIA WILL PROJECT REQUIRE ADDITIONAL PERSONNEL NO If YES, state number: _ Permanent _ Limited Term Revised 05/14197 \\LEAD\DATA2\WP.DTA\FIN\2230\DUBOIS\AlnCHEMPURCHASES.DOC DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: NIA CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET TO-DATE BUDGET BALANCE TOTAL EXPENDITURES (Total Budget plus Transfers) NIA NIA $3,469,400 PREVIOUS BUDGET BUDGET CHANGE REVISED TOTAL CHANGES THIS AIT PROJECT BUDGET NIA NIA NIA CHANGE ORDERS, AMOUNT AMENDED FUNDS PREV. REQUESTED THIS PROJECT APPROVED AlT AMOUNT NIA $3,088,400 $3,088,400 REQUIRES BOARD POLICY ACTION? YES NO NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section Page 1 of3 Date ATTACHMENTS T"' ~OMMITTEE AGENDA (List): 1. ATTACHMENTS TO JOINT BOARDS AGENDA (List) 1. . -21-97- Date -7 Signature Assistant General Manager (Or Designee) ADDITIONAL INFORMATION (Background and/or Summary) The Districts' Contracts/Purchasing Manager has recently negotiated and/or bid three (3) major chemical contracts (caustic soda, ferric chloride and hydrogen peroxide) with the goal of significantly reducing chemical costs. The foundation for the successful cost reduction can, in part, be attributed to the flexibility provided by the new Purchasing Resolution No. 96-87 which was adopted in November of 1996. The most recent chemical contracts are summarized as follows: 1. The Districts' annual requirement for caustic soda had a contract expiration date of August 31, 1997 with three (3) annual renewal options remaining. The contract price with Western States Chemical, Inc. was $214.90 per dry ton delivered with an estimated annual cost of $644,700 based upon an approximate annual usage of 3,000 dry tons. After several negotiations with Western States Chemical, Inc., a new price of $178.00 per dry ton delivered was agreed upon. This negotiated price resulted in a 17% decrease from the previous contract price, for an estimated annual savings of $110, 700. The negotiation also resulted in the new price becoming effective during the remaining two (2) months of the current contract period (July 1, 1997 through August 31, 1997) for an additional savings of $18,450.00. The negotiation secured a total savings of $129, 150 from the previous contract. 2. The Districts' annual requirement for ferric chloride has a contract expiration date of November 30, 1997 with three (3) annual renewal options remaining. The contract price with Kemiron Pacific, Inc. was $241.20 per dry ton delivered, including tax, with an estimated annual cost of $1,809,000 based upon an approximate annual usage of 7,500 dry tons. Negotiations with Kemiron Pacific, Inc. concluded with a new price of $234.23 per dry ton delivered, including tax. This negotiated price resulted in a 4% decrease from the previous contract price, for an estimated annual savings of $52,275. The negotiation also resulted in the new price becoming effective during the remaining three (3) months of the current contract period (September 1, 1997 through November 30, 1997) for an additional savings of $13,068.75. The negotiation secured a total savings of $65,343. 75 from the previous contract. 3. The Districts' annual requirement for hydrogen peroxide has a contract expiration date of September 30, 1997 with no renewal periods available. The current contract price with FMC Corporation is $2.24 per gallon with an estimated cost of $854, 100 based upon an approximate annual usage of 365,000 gallons. The Districts recently solicited competitive bids for a new contract and the results are as follows: Revised 05/14197 H:\WP.DTAIFIN\2230\DUBOIS\AIT\CHEMPURCHASES.DOC Page 2 of3 Vulcan Chemical Degussa Corporation SoCo-Lynch Corporation Holchem, Inc. Western States Chemical, Inc. $2.09 per gallon $3.44 per gallon No Bid No Bid No Bid The competitive bid price of $2.09 per gallon resulted in a 7% decrease from the previous contract price for an estimated annual savings of $54, 750. c: Department Head AGM-Administration A GM-Operations General Manager Revised 05/14197 H:\WP.DTA\FIN\2230\DUBOIS\AIT\CHEMPURCHASES.DOC Page 3 of3 : -.. --..... ,, Fo(~!;!.S!:.£. lr:!h!: AGEN .. ~" D COMM. INFO. ITEM - D COMM. ACTION ITEM ITEM - D JT. BOS. CONSENT TRANSMITTAL D JT. BOS. DISCUSSION (NON.CONSENT) D PUBLIC HEARING JT. BOS. MEETING DATE JT. BOS. AGENDA ITEM NO. -8. .. MEETING DATE COMM. ID. NO. DISTRICT NO. CONTACT FOR INFORMATION OMTS: OMTS ' , (Original* PDC: PDC ~Z-"flZ '-__;ff\~~ FAHR: 9/10/97 FAHR 7 Nick Arhont , x3011 EXEC: EXEC STEER: STEER Division No., Name, and Extension JT.BDS: AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: Notification of Award of contract for Sewer Line Cleaning of the 8 thru 12 inch diameter local sewers in the Irvine Business Complex, Specification No. 9798-3. Recommended Action(s): 1. Information only item. CEQA REVIEW: Project is Exempt: YES NO X NOT APPLICABLE Date Notice of Exemption Filed: Negative Declaration Approved on Final EIR Approved on_ and Notice of Determination filed on _ CURRENT BUDGET/COST CURRENT YEAR INFORMATION BUDGET AMOUNT TOTAL BUDGETED AMT.: $ 237,600 $237,600 SOURCE: DISTRICTS Schedule/Line Items: 97/98 Budget Section 4- Page 13 AMOUNT OF TRANSFER: None Schedule/Line Item: TOTAL PROJECT BUDGET ORIGINAL INFORMATION BUDGET TOTAL First Year in Budget: Master Plan Estimate: Year of First Costs: THIS AITNENDOR/PROJECT COST ORIGINAL BID, PO, INFORMATION CONTRACT AMOUNT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? X NO YES If YES, state number: _ Pennanent Revised 05/14/97 A:\AIT-IBC Limited Tenn - DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: Feb.26, 1997 Item 20(f) CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET TO-DATE BUDGET BALANCE TOTAL EXPENDITURES (Total Budget plus Transfers) $0 $237,600 $237,600 PREVIOUS BUDGET BUDGET CHANGE REVISED TOTAL CHANGES THISAIT PROJECT BUDGET $0.00 CHANGE ORDERS, AMOUNT AMENDED FUNDS PREV. REQUESTED THIS PROJECT APPROVED AIT AMOUNT $31,590.00 $31,590.00 REQUIRES BOARD POLICY ACTION? YES NO X NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section Page 1 of 2 9-3-<T/ Date CONCURRENCES: Date -~-/7- Srgnature Date Assistant General Manager (Or Designee) ADDITIONAL INFORMATION (Background and/or Summary) ATTACHMENTS TO C ',llTTEE AGENDA (List): 1. Bid Summary date-. .. Jgust 20, 1997 ATTACHMENTS TO JOINT BOARDS AGENDA (List) 1. None In accordance with the Collection Facilities O&M Division's 97/98 work plan, local sewers in District 7 in the 8 thru 12 inch diameter sizes will be cleaned by contractors. The first phase of work to be awarded is the Irvine Business Complex. Sewer mapping , a cleaning sequence and specifications were developed as part of Specification No. 9798-3. Bids were advertised for and received by the Districts in accordance with the Purchasing and Contracts Award Resolution. Five bids were received on August 20, 1997. The prices ranged from $0.27 to $1.86 per linear foot. The Irvine Ranch Water District is the lowest responsive bidder. A Purchase Order valid for 12 months will be issued to the Irvine Ranch Water District as the lowest responsive bidder for the specified work at a fixed unit price of 27 cents per linear foot. Additionally, the Districts can exercise an option for up to two additional years if mutually acceptable terms can be reached. This work will be managed by the Districts Collection Facilities O&M staff. The value of this phase of the work is estimated at $31,590. During the approval of the FY 97/98 Joint Operating Fund Budget, FAHR requested to be advised of the award of this particular work as an information only item. Budget Information Sufficient monies were budgeted in this years budget. $700,000 was included in this years District 7 Operating Fund for Trunk Maintenance (section 6, page 62). Of this $700,000, staff included an amount of $237,600.00 to clean the small lines (8 to12 inches) in District 7. This number was based on an estimate of $0.25/linear foot to clean the estimated 180 miles of small lines in District 7. · This AIT is for cleaning 22 of the estimated 180 miles of small lines. The remainder of the cleaning of small lines in District 7 (the City of Tustin and the unincorporated area) is projected to be bid in December 1997 or January 1998. Recommendation This is an informational item only. NJA:fw cc: Department Head Assistant General Manager General Manager Revised 05/14197 H:\WP .DT A \GSA \2450\ARHONTES\SPECS\AJT-I BC. Page 2 of 2 August20, 1997 MEMORANDUM TO: Edwin E. Hodges Director of General Services Administration FROM: Marc D. Dubois Contracts/Purchasing Manager SUBJECT: Sewer Line Cleaning Specification No. 9798-3 Sealed bids were opened on Tuesday, August 19, 1997, for providing Sewer Line Cleaning, Specification No. 9798-3, for a one-year period beginning October 1, 1997. The table below details the bid tabulatic:>n. ,COMPAN)' !Jntt R!!t!! 8" !,!nltRg.tg 1Q" !.!DlfRi!t!! 12" Dia, Pia~ m!C !:!Ii! Pia~ Q!I: Dli! f?li;ui ~r Total ,. ... LJF LJF LJF Irvine Ranch Water District $0.27 $0.27 $0.27 $31,590 PSSI $0.37 $0.37 $0.37 $43,290 National Plant Services, Inc. $0.39 $0.405 $0.45 $47,520 Hoffman Southwest $0.49 $0.50 $0.52 $58,330 United Pumping Service, Inc. $1.86 $1.86 $1.86 $217,620 Staff recommends the award of a contract to the Irvine Ranch Water District, the bidder with the lowest cost for providing sewer line cleaning with 10% CCTV, per the unit prices shown above, for a one year period b · · tober 1, 1997. ns and Maintenance H:\WP .OTA\FIN\2230\BIDS\9798-3.TAB MEETING DATE OMTS: PDC: FAHR: 09/10/97 EXEC: STEER: JT.BDS: All AGENDA WORDING AND RECOMMENDED Acr10N(S): Agenda Wording: AGE Nii-A ITEM TRANSMITTAL CONTACT FOR INFORMATION (Originator) 110, Greg Mathews, 2006 840, Doug Cook, 6000 Division No., Name, and Extension DISTRICTS' ASSESSMENT AND REINVENTION TEAM (DART) PHASE 111 STATUS REPORT. The Executive Summary for Phase Ill Status Report has been prepared to update the Directors on the status of Phase Ill tasks. Recommended Action(s): 1. Receive and file Executive Summary of the DART's Phase Ill 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_ CURRENT BUDGET/COST CURRENT YEAR INFORMATION BUDGET AMOUNT TOTAL BUDGETED AMT.: $ SOURCE: CORF JO DISTRICTS N/A Schedule/Line Items: AMOUNT OF TRANSFER: Schedule/Line Item: TOTAL PROJECT BUDGET ORIGINAL BUDGET INFORMATION TOTAL First Year in Budget: Master Plan Estimate: Year of First Costs: THIS AITNENOOR/PROJECT COST ORIGINAL BID, PO, INFORMATION CONTRACT AMOUNT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent _Limited Term Revised 04/10197 H:\WP.DTA\AGENDA\FAHR\091097 AIT-GM.DOC 'DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: N/A CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET TO-DATE BUDGET BALANCE TOTAL EXPENDITURES [Total Budget plus Transfers) N/A N/A N/A PREVIOUS BUDGET BUDGET CHANGE REVISED TOTAL CHANGES THIS AIT PROJECT BUDGET $0.00 CHANGE ORDERS, AMOUNT AMENDED FUNDS PREV. REQUESTED THIS PROJECT APPROVED AIT AMOUNT $0.00 REQUIRES BOARD POLICY ACTION? NOT APPLICABLE If YES, explain in ADDITIONAL INFORMATION section Page 1 of2 Signature Date Division Manager (Or Design J D te Signature Date Assistant General Manager {Or Designee) ATTACHMENTS TO COMMITTEE AGENDA (list): 1. Executive Summary dated 913/97 ATTACHMENTS TO JOINT BOARDS AGENDA (list) 1. ADDITIONAL INFORMATION (Background and/or Summary) The attached Executive Summary provides a synopsis of the information contained in a July 1997 internal status report on DART's efforts. DART is currently involved in the tasks surrounding Phase II of a five-phase Districts' reinvention project. The summary briefly describes the activities and progress made by DART over the course of the last several months. GM:jt c: Department Head AGM-Administration AGM-Operations General Manager Revised 04/10/97 \\LEAD\DATA2\WP.DTA\AGENDA\FAHR\091097 AIT-GM.DOC Page 2 of2 Districts Assessment and Reinvention Team (DART) Phase Ill Status Report Executive Summary The following Executive Summary provides a synopsis of the information contained in a July 1997 internal status report on Districts Assessment and Reinvention Team (DART) efforts. DART is currently involved in the tasks surrounding Phase Ill of a five-phase Districts' re-invention project. The subsequent paragraphs briefly describe the activities and progress made by DART over the course of the last several months. Overview In February 1996 the Operations Department commissioned the services of EMA, an industrial and automation re-engineering firm, to perform a competitiveness evaluation. This consulting engagement was a part of the Districts' on-going re-engineering efforts. The limited study was designed to determine our competitiveness with potential contract operations firms that have had success operating wastewater treatment facilities at reduced costs compared to their public-sector counterparts. Based on EMA's professional opinion, the Districts had a potential competitive gap of approximately $12 million dollars annually Districts-wide. The responsibility for this gap was generally shared by operations and maintenance functions and those organizations classified as support services (e.g. Finance, Technical Services, Engineering, Human Resources, etc.). It should be noted that although a several million dollar competitive gap was indicated when compared to private sector operations, it was also indicated that in comparison to other public-sector wastewater treatment facilities the Districts compared very favorably. Nevertheless, the identified competitive gap was notable and catalyzed renewed efforts in business re-engineering practices. As a result of the study, the Districts Assessment and Reinvention Team (DART), composed of union and non-union employees, was formed in September 1996 to further address the identified competitive gap. Working with EMA, from October 1996 through January 1997, the DART members developed a strategic plan to outline the steps necessary to close the competitive gap. This Phase II project identified three major issues that needed to be addressed. These include: • New and upgraded technology in the areas of plant automation and information systems. • The adoption of various types of workforce work distribution and skill September 3, 1997 I CSDOC • P.O. Box 8127 •Fountain Valley, CA 92728-8127 • (714) 962-2411 enhancement strategies in the operations and maintenance areas. • The development of an accountable oversight steering committee to ensure quality based re-engineering efforts are implemented through employee participation and to ensure progress is communicated to Districts' stakeholders to keep them involved in the re-invention efforts. To address the identified issues, Phase Ill began in January 1997 to achieve two goals: • Further modernization and increased utilization of automation throughout the Districts' two main processing facilities (Plant 1 and Plant 2). • The examination and eventual incorporation of progressive work practice techniques and one technological enhancement. Work practice techniques include the implementation of "Area Work Teams" or enterprise teams, the adoption of Work Force Flexibility as defined by EMA, and the implementation of broad banding classification and pay systems. The technological enhancement is focused on the review and potential upgrade of the Districts' Computerized Maintenance Management System (CMMS). The following further identifies progress made in the current Phase Ill DART re- engineering program. Phase Ill Progress Report In January and February 1997, the original DART team that was formed to work on the Phase II strategic plan was reorganized with additional staff members into four specialized task teams. The mission of the teams was to accomplish the above Phase Ill goals. The four teams went through team-building training in March and April of 1997 and have been conducting data collection and analyses from April 1997 to the present. The team members (comprising fifty-two (52) Districts' employees) roles, responsibilities and progress are identified as follows: • Treatment Plant Improvement Team (TPIT) -The team working on plant optimization has begun its review and assessment of plant operations to develop data that will assist the Plant Automation Group and Engineering Department on the forthcoming Plant Reinvention/Automation Capital Improvement Project, Job No. J-42. This project is slated for construction in calendar 1999. The team is devetoping plant "as is" process data and wHI determine the "could be" or "should be" automation alternatives based on costs/benefits and other analyses. September 3, 1997 2 TPIT will also focus efforts in other optimization areas including reduction of chemical consumption, reduction in utilities, increased gas production, improved biosolids and effluent quality, etc. These efforts are being coordinated with the Operations & Maintenance Process Support Division. • Adaptive Work Force Team (AWF) -This team is working on operations and maintenance practices to increase efficiency and effectiveness through increased staff and departmental flexibility. The team is tasked with implementing the Work Force Flexibility concept as defined by EMA. In brief, a draft cross-training model has been completed whereby Districts' O&M line personnel (operators, mechanics, electricians, instrument technicians, pipe fitters and GSA maintenance staff) of varying and diverse technical skills would be cross-trained to perform new tasks. Personnel in distinct technical disciplines largely perform these tasks, associated with day-to-day duties and responsibilities. Such a cross-training program should significantly reduce down time spent waiting for specific skills and trades and enhance staffs' ability to work as teams. The Districts' maintenance groups have already moved forward in the combining of the instrumentation and electrical divisions as well as mechanical maintenance and pipe fitting divisions in order to expedite the cross training. As a pilot project, the AWF has also established an O&M process area team in a digester, dewatering, and solids work area of Plant No. 2. The experience gained from this pilot project will be applied to other plant area teams as they are developed. A target date of February 1998 has been slated for cross-training efforts to begin with all maintenance and operations disciplines. The AWF will also be working with the Human Resources Broad banding Steering Committee to determine how to best implement the broad banding classification and compensation concept within a cross-training environment. • Computerized Maintenance Management System Team (CMMS) -The CMMS team has conducted an internal survey of Districts' staff that frequently utilize the CMMS software. Based on the survey and other needs analysis tools being utilized, the CMMS team will be in a position to: 1) report on the perceived customer needs for a CMMS product, 2) detail the operating capabilities of our existing CMMS software and, 3) determine whether the current system can effectively provide for the necessary service needs for these customers or whether a new system is needed. This report is expected in the fall of 1997. • Administrative Practices Team (APT) -The purpose of the APT is to examine the administrative functions of the Districts with regard to reducing labor costs, cycle times, duplication of service, and non-essential functions. Additionally, the team is to examine inter-departmental relationships and functions in order to improve efficiencies and streamline administrative work practices. The team is September 3, 1997 3 working on both large and smaller scope projects and has had success eliminating the Emergency Overtime Report (found unnecessary). APT is currently reviewing the Records Retention and Destruction policies and practices (Resolution 90-118). These teams will continue to perform essential functions to help optimize Districts' operations. Based on DART projections, it is estimated that approximately $1.9 million will be spent (beginning July 1997) in in-house labor and consulting services over the course of the next 12-18 months. This includes approximately 22,000 staff hours in cross training. This investment in time and services is designed to achieve on-going annual operations and maintenance savings of approximately $6 million compared to FY 1995/96 costs. This is summarized in the table below: Operations & Maintenance Re-engineering Efforts on Work Practices and Resulting Staff Decreases GSA Re-engineering Efforts on Work Practices and Resulting Staff Decreases Implementation of Technology TOTAL: $3.32 Million $0.85 Million $1.96 Million $6.13 Million It should be noted that due to retirements, the results of the investigation, etc. over the course of the last year, several staffing reductions have already occurred and a portion of the above annual savings have been realized because many positions remain largely unfilled. These staffing reductions have generally preceded the implementation of re-engineering efforts designed to compensate for reduced staff levels. It is important that such re-engineering efforts continue as the existing operations, maintenance and GSA staffing levels are impacting the timely completion of scheduled work. Corrective maintenance, for example, is significantly higher than desired when compared to corrective/preventive maintenance goals. Additionally, overtime for operators has exceeded targeted performance objectives. It is critical, therefore, that to maintain the long-term integrity of the plants and the infrastructure, re-engineering efforts must continue. September 3, 1997 4 In addition to the operations and maintenance competitive gap, there is an administrative gap as well. It is clear that administrative re-engineering is required. To that end, the Administrative Practices Team, the Internal Audit Team residing in the General Manager's Office, and other department-level employee committees are working toward identifying those areas for improvement and implementing new work practices to increase efficiency and effectiveness. September 3, 1997 5 )> 0 -I -0 z --I m s: en f:or Bit Sec,, I 1ll'. AGEN( .. D COMM. INFO. ITEM I ITEM - D COMM. ACTION ITEM . D JT. BOS. CONSENT TRANSMITTAL D JT. BOS. DISCUSSION (NON..CONSENn D PUBLIC HEARING ·--JT. BOS. MEETING DATE II JT. BOS. AGENDA ITEM NO. -/() MEETING DATE COMM. 10. NO. DISTRICT NO. CONTACT FOR INFORMATION tt-J (Initials of Originator) OMTS: ©MTS PDC: PDC FAHR: 9/10/97 FAHR 9.1-h.·~. 410, Ed Hodges , 3005 EXEC: EXEC All STEER: STEER ·• --Division No., Name, and Extension JT.BDS: AGENDA WORDING AND RECOMMENDED ACTiON(S): Agenda Wording: Security Services -Specification No. P-177 - Recommended Action(§): The General Manager award a contract to The Wackenhut Corporation, to provide security services at the daily rate of $286.12, for a one-year period beginning September 16, 1997, with provisions for four (4) one-year extensions. The estimated annual cost is $97,936.80. 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_ CURRENT BUDGET/COST CURRENT YEAR INFORMATION BUDGET AMOUNT TOTAL BUDGETED AMT.: $130,000.00 $130,000 SOURCE: CORF Schedule/Line Items: AMOUNT OF TRANSFER: Schedule/Line Item: TOTAL PROJECT BUDGET ORIGINAL INFORMATION BUDGET TOTAL First Year in Budget: Master Plan Estimate: Year of First Costs: THIS AITNENDOR/PROJECT COST ORIGINAL BID, PO, INFORMATION CONTRACT AMOUNT WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO If YES, state number: _ Permanent - Revised 01/14/97 H:\WP.DTA\GSA\2410\HODGES\FAHR\SEP97.FAH Limited Term 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) -$23,802 $106,197.76 $106, 197.76 PREVIOUS BUDGET BUDGET CHANGE REVISED TOTAL CHANGES THIS AIT PROJECT BUDGET $0.00 CHANGE ORDERS, AMOUNT AMENDED PROJECT FUNDS PREV. REQUESTED THIS AMOUNT APPROVED AIT $97,936.80 $97,936.80 REQUIRES BOARD POLICY ACTION? NO If YES, explain in ADDITIONAL INFORMATION section Page 1 of 4 CONCURRENCES: ATTACHMENTS TO I )DA (List) To Committee: 1. Bid Tabulation Signature Date Division Ma ager (Or Designee) Z' To Jt. Bds.: 1. ADDITIONAL INFORMATION (Background and/or Summary) The Districts have out sourced the security of the Plants for approximately 6 years. For the last 4 years, the security contract has been given to the Wackenhut Corporation. In July, 1997, staff prepared Specification No. P-177 for security services. The original contract with Wackenhut called for approximately 26,500 hours of service. This included enough time for three (3) full time guards, providing around the clock service. Staff believes that this level of service is no longer needed. As a result, Specification No P-177, decreased the total amount of service from 26,500 hours to 8,760 hours. The new level of service will provide for one full time guard to be located at the Plant 1 guard shack from the hours of 5:30 am to 5:30 pm, Monday thru Friday. During this time the guard will make one complete round of the treatment plants in the morning and one in the afternoon. Additionally, between the hours of 5:30 pm and 5:30 am and all day Saturday and Sunday, the guard service will provide continual rounds of the treatment plants. On August 5, 1997, sealed bids were received from five (5) Security Companies. Two (2) of the five (5) companies submitted "no-bids". Of the remaining three (3) companies, the bids ranged from $268.12 per day to $284.16. The lowest responsive bidder was the Wackenhut Corporation. Budget Information This years CORF budget included $130,000.00 for Security Services. Staff Recommendation The General Manager award a contract to The Wackenhut Corporation, to provide security services at the daily rate of $286.12, for a one-year period beginning September 16, 1997, with provisions for four (4) one-year extensions. The estimated annual cost is $97,936.80. EEH:fw c: Department Head AGM-Administration AGM-Operations General Manager Revised 01/14/97 H:\WP .DTA\GSA\241 O\HODGES\FAHR\SEP97.FAH Page 2of4 August 18, 1997 MEMORANDUM TO: Edwin E. Hodges Director of General Services Administration FROM: Marc D. Dubois Contracts/Purchasing Manager SUBJECT: Security Services Specification No. P-177 Sealed bids were opened on Tuesday, August 5, 1997, for providing Security Services, Specification No. P-177, for a one-year period beginning September 16, 1997. The table below details the bid tabulation. I COMPANY I UNIT RATE I DAILY RATE I The Wackenhut Company $11.18 $268.32 American Protective Services, Inc. $11.76 $282.24 Burns International Security Services $11.84 $284.16 Baaden Security Management, Inc. ---No-Bid Shield Security, Inc. ---No-Bid Staff recommends the award of a contract to The Wackenhut Corporation, the proposer with the lowest cost for providing security services at the daily rate of $268.32, for a one-year period beginning September 16, 1997, with provisions for four (4) one-year extensions. The estimated annual ost is $97,936.80. H:\WP.DTA\FIN\2230\BIDS\P177SEC.TAB CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-8127 e (714) 962-2411 MEETING DATE OMTS: PDC: FAHR: 09/10/97 EXEC: STEER: JT.BDS: 09/24/97 ALL AGENDA WORDING AND RECOMMENDED ACTION(S): Agenda Wording: AGEN ' ITEM TRANSMITTAL CONTACT FOR INFORMATION (Originator) 210, Steve Kozak, 2504 Division No., Name, and Extension ANNUAL REVIEW OF THE DISTRICTS' INVESTMENT POLICY STATEMENT AND DELEGATION OF INVESTMENT AUTHORITY TO THE DIRECTOR OF FINANCE/TREASURER Recommended Action(s): 1. Review and approve the Districts' Investment Policy Statement, including the revisions recommended in this report. 2. Renew the delegation of investment authority to the Districts' Director of Finance/Treasurer for 1997-98. 3. Recommend that the Joint Boards of Directors adopt Resolution No. 97-XX for adoption of the Districts' Investment Policy Statement, and renewal of investment authority for 1997-98. CEQA REVIEW: Project is Exempt: NOT APPLICABLE DATE OF MOST RECENT BOARD ACTION ON THIS SPECIFIC ITEM: Date Notice of Exemption Filed: July 30, 1997 Negative Declaration Approved on Final EIR Approved on _ and Notice of Determination filed on - CURRENTBUDGETICOST CURRENT YEAR CURRENT YEAR-YEAR-TO-DATE REVISED BUDGET INFORMATION BUDGET AMOUNT TO-DATE BUDGET BALANCE TOTAL EXPENDITURES (Total Budget plus Transfers) TOTAL BUDGETED AMT.: $21,958,000 $21,958,000 N/A N/A N/A SOURCE: CORF JO DISTRICTS Schedule/Line Items: AMOUNT OF TRANSFER: Schedule/Line Item: TOTAL PROJECT BUDGET ORIGINAL BUDGET PREVIOUS BUDGET BUDGET CHANGE REVISED TOTAL INFORMATION TOTAL CHANGES THISAIT PROJECT BUDGET First Year in Budget: Revenue Master Plan Estimate: producing program $21,958,000 Year of First Costs: THIS AITNENOOR/PROJECT COST ORIGINAL BID, PO, CHANGE ORDERS, AMOUNT AMENDED INFORMATION CONTRACT FUNDS PREV. REQUESTED THIS PROJECT AMOUNT APPROVED AIT AMOUNT $0.00 WILL PROJECT REQUIRE ADDITIONAL PERSONNEL? NO YES REQUIRES BOARD POLICY ACTION? YES If YES, state number: _ Permanent -Limited Term If YES, explain in ADDITIONAL INFORMATION section Revised 05/14197 \\LEAO\DATA2\WP.DTA\FIN\2210\CRANE\FAHR\FAHR.97\SEPnFAHR97-48B.DOC Page 1 of2 Date Date -( 97 Date -Y-7,? -~ra ~ Assistant General Manager (Or Designee) ADDITIONAL INFORMATION (Background and/or Summary) ATTACHMENTS TO ~MITTEE AGENDA (List): 1. Investment Polic, .rement' 2. Board Resolution No. 97-XX ATTACHMENTS TO JOINT BOARDS AGENDA (List) 1 . Investment Policy Statement 2. Board Resolution No. 97-XX In July, the FAHR Committee recommended adoption of Board Resolution No. 97-27, for approval of the Districts' Investment Policy Statement and the delegation of investment authority to the Director of Finance/Treasurer for 1997-98, to the Joint Boards of Directors. After discussion among the Directors at the July 30, 1997 Joint Boards meeting, the annual review of the Districts' Investment Policy Statement and the delegation of investment authority, was referred back to the FAHR Committee for further study and consideration, to be brought back before the Joint Boards in September; and a moratorium was placed on investing in reverse repurchase agreements until the Joint Boards vote to adopt a final policy on reverse repurchase agreements. The attached staff report is presented in response to the issues discussed at the July 30, 1997 Joint Boards meeting. Recommended Action Staff recommends that the Finance, Administration & Human Resources Committee adopt a motion to: 1. Review and approve the Districts' Investment Policy Statement, including the revisions recommended in this report; 2. Renew the delegation of investment authority to the Districts' Director of Finance/Treasurer for 1997-98; and 3. Recommend that the Joint Boards of Directors adopt Resolution No. 97-XX for adoption of the Districts' Investment Policy Statement, and renewal of investment authority for 1997-98. SK:lc \1Jead\data2\wp.dta\fin\221 O\crane\F AHR\F AHR.97\SEPT\fahr97-48b.doc c: Department Head AGM-Administration AGM-Operations General Manager Revised 05/14197 \\LEAD\DATA2\WP.DTA\FIN\2210\CRANE\FAHR\FAHR.97\SEPT\FAHR97-48B.DOC Page 2of2 --=~i=======================-=======-===4~11~1111 PLEASE NOTE Copies of the Investment Policy were included in the July F AHR Committee agenda packet. Additional copies will be available at the September 10, 1997 F AHR Committee meeting. Thank you. ==··--·-·==··=-=====-=.i-_,,:;·;:::~ RESOLUTION NO. 97-XX AUTHORIZING THE DISTRICTS' TREASURER TO INVEST AND/OR REINVEST DISTRICTS' FUNDS. AND ADOPTING DISTRICTS' INVESTMENT POLICY STATEMENT AND PERFORMANCE BENCHMARKS A JOINT RESOLUTION OF THE BOARDS OF DIRECTORS OF COUNTY . SANITATION DISTRICT NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE . COUNTY, CALIFORNIA, AUTHORIZING THE DISTRICTS' TREASURER TO INVEST AND/OR REINVEST DISTRICTS' FUNDS, AND ADOPTING . DISTRICTS' INVESTMENT POLICY STATEMENT AND PERFORMANCE BENCHMARKS ••••••••••••••• WHEREAS, on December 8, 1994, the Boards of Directors adopted Resolution No. 94-156, appointing the Director of Finance as Treasurer of County Sanitation District Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California; and, WHEREAS, on September 25, 1996, the Boards of Directors adopted Resolution No. 96-79, readopting the Districts' Investment Policy Statement, and establishing specific performance benchmarks and objectives, together with a schedule of frequency of investment performance reports; and, WHEREAS, pursuant to California Government Code Section 53607, the Boards of Directors may delegate authority to invest and/or reinvest Districts' funds to the Treasurer for a one-year period; and, WHEREAS, pursuant to California Government Code Section 53646, the Districts are required to review their Investment Policy annually and readopt their Policy at a public meeting, which Policy will establish specific performance benchmarks and objectives, and specific monitoring and reports. NOW, THEREFORE, the Boards of Directors of County Sanitation District Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, DO HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That the authority of the Boards of Directors to invest or reinvest Districts' surplus funds, or to sell or exchange securities so purchased, or to deposit for safekeeping the funds and investments of the Districts with depositories, as provided for in California Government Code SeGtions 53608 and 53630, is hereby delegated to the Districts' Treasurer for a one-year period commencing on the date this Resolution is adopted, as authorized by California Government Code Section 53607. Section 2: That the Boards of Directors hereby adopt the Investment Policy Statement of the County Sanitation Districts of Orange County, California, as set forth in Exhibit "A," attached hereto and incorporated herein by reference. Section 3: That the Boards of Directors hereby adopt the following specific performance benchmarks for their two investment funds in accordance with Section 14.0 of the Districts' Investment Policy: LIQUID OPERATING MONIES: The Short-Term Operating Fund will be compared to the three month T-Bill rate, and the Callan Active Cash Flow Income Style Group. The Callan Active Cash Flow Income Style Group represents a peer group of managers who operate with a maximum maturity of one year. LONG-TERM OPERATING MONIES: The Long-Term Operating Fund will be compared_ to the Merrill Lynch Government and Corporate One-to-Five Year Maturity Index and to the Callan Defensive Fixed Income Style Group. Section 4: That the Boards of Directors hereby adopt a performance monitoring and reporting schedule, as required by Section 15.0 of the Districts' Investment Policy, which schedule is attached hereto as Exhibit "B," and incorporated herein by reference. PASSED AND ADOPTED at regular meeting held September 24, 1997. H:\wp.dta\fin\221 O\crane\RESOS\fahr97-48breso.doc September 10, 1997 STAFF REPORT ANNUAL REVIEW OF THE DISTRICTS' INVESTMENT POLICY STATEMENT AND DELEGATION OF INVESTMENT AUTHORITY TO THE DIRECTOR OF FINANCE/TREASURER BACKGROUND On July 9, 1997, the Finance, Administration & Human Resources (FAHR) Committee, in their capacity as the oversight committee for the Districts' investment program, completed their annual review of the Districts' Investment Policy Statement and the delegation of investment authority to the Director of Finance/Treasurer for FY 1997-98. The FAHR Committee recommended adoption of Board Resolution No. 97-27, for approval of the Districts' Investment Policy Statement and the delegation of investment authority to the Director of Finance/Treasurer for FY 1997-98, to the Joint Boards of Directors. After discussion among the Directors at the July 30, 1997 Joint Boards meeting, the annual review of the Districts' Investment Policy Statement and the delegation of investment authority, was referred back to the FAHR Committee for further study and consideration, to be brought back before the Joint Boards in September; and a moratorium was placed on investing in reverse repurchase agreements until the Joint Boards vote to adopt a final policy on reverse repurchase agreements. This report is presented in response to the issues discussed at the July 30, 1997 Joint Boards meeting. The issues include: Reverse Repurchase Agreements, Commercial Paper ratings, collateral for Secured Time Deposits, and collateral pricing. REVERSE REPURCHASE AGREEMENTS Reverse Repurchase Agreements (Reverse Repos) are generally two simultaneous short term financial transactions in which the owner of a security essentially sells that security to a third party and agrees to buy it back at a fixed price at a specified time in the future. When the transaction is concluded, the security owner has actually used the security as collateral for a loan. At the end of the agreement period, the owner regains possession of the security and the lender is repaid the loan amount plus interest. Use of a reverse repurchase agreement would be appropriate to preserve the capital invested in a particular security. This could occur if the Districts had a cash requirement that exceeded our short-term investments in cash equivalents. In such a case, we could sell a longer term security and use the proceeds of the sale. If the market conditions had changed since the purchase of the security and the market value was less than the purchase price, a sale would result in a loss of principal. In this case, Section 8.13 of the proposed and existing CSDOC Investment Policy would allow a reverse repurchase agreement. CSDOC e P.O. Box 8127 e Fountain Valley, CA 92728-a127 e (714) 962-2411 FAHR97-48 Page 2 of 5 September 10, 1997 An investment that would be sold at a loss could still be pledged as security for a short term loan. The Districts' Investment Policy requires that the loan period must match the maturity of the investment. When the loan and the investment both matured, the investment would be redeemed and the proceeds used to satisfy the loan. In this way the market loss on the security would be avoided, the full yield of the investment would be realized, and the cost to the Districts is reduced to the difference between the realized yield and the interest paid on the loan. The Districts' Investment Policy subjects reverse repurchase agreements to several stringent requirements and safeguards: • An agreement is limited to a 90-day term, • An agreement must mature on the exact date funds are unconditionally available for repayment, • Proceeds of reverse repurchase agreements shall be used solely to provide/supplement portfolio liquidity, • An agreement must be covered by a Master Repurchase Agreement in the form of the agreement developed by the Public Securities Association, • A long-term agreement must be preauthorized by the Board of Directors, • No more than 20% of the portfolio may be invested in reverse repurchase agreements, • All agreements must be included in a schedule indicating their maturity and the cash flow for repayment in monthly and quarterly Treasurer's reports. The reverse repurchase agreement authorization is intended to augment overall portfolio yield in a safe and prudent manner and to protect principal. It is not to be used as a tool to plan major market strategies, to speculate on market and interest rate movements or to provide funds for additional investments. The 20% of portfolio value for reverse repurchase agreements is the same maximum provided in Section 53601 of the Government Code, but no agreements have been made during the time that the Directors have delegated investment authority to the Districts' Director of Finance/ Treasurer. No change is recommended to the 20% investment constraint for reverse repurchase agreements found in the Government Code. ANNUAL REVIEW OF INVESTMENT POLICY Section 53646 of the California Government Code (the "Code") requires local government agencies to review their investment policy annually, and readopt their policy at a public meeting. Likewise, the Districts' Investment Policy Statement includes the requirement that the Districts shall review its Investment Policy annually (Sections 1.2 and 16.1). The following discussion presents a review of selected sections of the Districts' Investment Policy in response to topics discussed by the Joint Boards. FAHR97-48 Page 3 of 5 September 10, 1997 Commercial Paper Commercial Paper (CP) is a short-term, unsecured, negotiable promissory note issued by business, and usually backed by a line of credit with a bank. Maximum maturities do not exceed 270 days. Board discussion about Section 8.3, Commercial Paper, of the Districts' Investment Policy centered on the rating requirement specified in Section 8.3. Currently, a credit rating of "P1" from Moody's or "A 1" from S&P is required for the Districts' money manager to purchase CP. The concern expressed was that the "or" potentially could allow the purchase of split-rated CP, which could add a higher degree of risk to the portfolio. The following revised Section 8.3 is recommended for approval to specifically address this concern: Commercial paper of "prime" quality and rated "P1" by Moody's Investor Services (Moody's), and rated "A1" by Standard & Poor's Corporation (S&P), and issued by a domestic corporation organized and operating in the United States with assets in excess of $500 million and having a rating of "A" or better on its long-term debt as provided by Moody's or S&P. Purchases of eligible commercial paper may not exceed 180 days to maturity from the date of purchase. Purchases of commercial paper shall not exceed 15% of the market value of the portfolio, except that a maximum of 30% of the market value of the portfolio may be invested in commercial paper, so long as the average maturity of all commercial paper in the portfolio does not exceed 31 days. No more than 5% of the market value of the portfolio, or 10% of the issuer's outstanding paper, may be invested in commercial paper issued by any one eligible corporation. Secured (Collateralized) Time Deposits Secured time deposits are deposits in banks which are collateralized by acceptable securities. Discussion at the July Board meeting about Section 8. 7 .1, Secured (Collateralized) Time Deposits, focused on the need to clearly define acceptable collateral in this Section. The following revised Section 8. 7 .1 is recommended for approval to specifically address this concern: Secured (collateralized) time deposits issued by a nationally or state-chartered bank or state or federal savings and loan association, as defined by Section 5102 of the California Financial Code, and having a net operating profit in the two (2) most recently completed fiscal years. Collateral must comply with Chapter 4, Bank Deposit Law, Section 16500 et seq., and Chapter 4.5, Savings and Loan Association and Credit Union Deposit Law, Section 16600 et seq., of the California Government Code. Thus, collateral will be maintained at a level of at least 110% of deposits. To ensure internal consistency with the adoption of the above revisions, staff also recommends approval of the following revised Section 8.7.2 of the Districts' Investment Policy: FAHR97-48 Page 4 of 5 September 10, 1997 Negotiable certificates of deposit issued by a nationally or state-chartered bank or state or federal savings and loan association, as defined by Section 5102 of the California Financial Code; and which shall have a rating of "A" or better on its long-term debt as provided by Moody's or S&P; or which shall have the following minimum short- term ratings by at least two (2) rating services: "P1" for deposits by Moody's, "A 1" for deposits by S&P, or comparably rated by a nationally recognized rating agency which rates such securities; or as otherwise approved by the Districts' Boards of Directors. Banker's Acceptances While not the subject of Board discussion on July 30, 1997, staff recommends the following revision to further clarify Investment Policy safeguards in compliance with the Government Code: Add the following as item (d) to Section 8.4: ... and (d) no more than 30% of the total portfolio may be invested in the banker's acceptances of any one (1) commercial bank. Collateralization Board discussion about collateralization centered on defining "how to price collateral," and "how often to reprice collateral for repurchase agreements." Section 9_ of the Investment Policy, entitled "Collateralization," states that collateralization will be required for secured time deposits and for Repurchase Agreements. Specific collateralization requirements for these investments are then more fully described in specific subsections of Section 8, Authorized and Suitable Investments, of the Investment Policy. For example, the collateral requirements for secured time deposits are described in Section 8.7.1, discussed above. The following revised Section 8.12.1 is recommended for approval to specifically address the matter of pricing and repricing of collateral for repurchase agreements: All repurchase agreements shall be collateralized with securities eligible for purchase under this Policy. In order to anticipate market changes and to provide a level of security for all repurchase agreement transactions, collateralization shall be maintained at a level of at least 102% of market value of the principal and accrued interest, and shall be adjusted no less than weekly. Additionally, staff recommends the following revision to the beginning of Section 9, to more clearly state the general collateral requirements of the Districts' Investment Policy: FAHR97-48 Page 5 of 5 September 10, 1997 Generally, the value to secure deposits under this Policy shall comply with Section 53652 of the California Government Code. ANNUAL DELEGATION OF INVESTMENT AUTHORITY Effective January 1, 1997, SB 109 introduced a new compliance requirement for local government investment programs. Section 53607 of the Code now states that governing boards of local agencies may only delegate authority to invest and/or reinvest agency funds to the agency's Treasurer for a one-year period. Prior to enactment of SB 109, the Code did not contain a time limitation on the delegation of investment authority for local agencies. As such, on December 8, 1994, the Districts' Boards of Directors adopted Resolution No. 94-156, appointing the Director of Finance as the Districts' Treasurer, and delegating investment authority to the Director of Finance/Treasurer. That action remains in effect. With adoption of attached Resolution No. 97-XX, the Joint Boards would renew its delegation of investment authority to the Director of Finance/Treasurer for a one-year period in compliance with the requirements of SB 109. In the future, the Joint Boards will consider similar actions along with the annual reconsideration of the Districts' Investment Policy. RECOMMENDED ACTION Staff recommends that the Finance, Administration & Human Resources Committee adopt a motion to: 1. Review and approve the District's Investment Policy Statement, including the revisions recommended in this report; 2. Renew the delegation of investment authority to the Districts' Director of Finance/Treasurer for 1997-98; and 3. Recommend that the Joint Boards of Directors adopt Resolution No. 97-XX for adoption of the District's Investment Policy Statement, and renewal of investment authority for 1997-98. SK:lc H:\wp.dta\fin\221 O\crane\F AHR \F AHR .97\STAFFR PT.97\srfahr97-48b.doc FAHR .CALENDAR ' ' September 10, 1997 Reserves and Replacement Study Action CNG Station Update and Revision Action Fleet Reduction Program Action HR Policies and Procedures Action Delegation of Authority Action External Relations/Communications Strategy Information Collection Systems/Local Cities Information Communications Audit Information Adoption of Comprehensive Annual Financial Report Action :!Ii T RFP for Selection of Financing Team Action First Quarter Financial and Performance Report Information Worker's Comp. Report -First Quarter Information G.l.S. Service Action ·'I ,._. Status Report -Meetings with Rating Agencies Information Industry-Standards Benchmark Report Information ill CSDOC • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411