HomeMy WebLinkAbout1998-04-08In the Office ~fthe Secrai)
County Sanftat~,,n ~st0:1J.."' No(s) /, ~,3_ tc,Jlt;!:'L3
APR 2 21998 DRAFT
7
County Sanitation Districts
of Orange County, California
P.O. Box 8127 • 10844 Ellis Avenue
Fountain Valley, CA 92728-8127
Telephone: (714) 962-2411
K, MINUTES OF FINANCE,
By _.:.........:_:_' ---11cAt:tDMINISTRATION AND HUMAN RESOURCES COMMITTEE
Wednesday, April 8, 1998. 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, April 8, 1998, 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
John M. Gullixson
Mark Leyes
Mark A. Murphy
Thomas R. Saltarelli
Committee Directors Absent :
Peer Swan, Vice Joint Chair
William G. Steiner
Other Directors Present:
None
APPOINTMENT OF A CHAIR PRO TEM
No appointment was necessary.
PUBLIC COMMENTS
No comments were made.
Staff Present:
Don McIntyre, General Manager
Blake Anderson, Assistant General Manager
Gary Streed, Director of Finance
Chris Dahl, Director of Information Technology
Mike Peterman, Director of Human Resources
Michelle Tuchman, Director of Communications
Greg Mathews, Principal Administrative Analyst
Mike White, Controller
Steve Kozak, Financial Manager
Jim Herberg, Engineering Supervisor
Doug Stewart, Engineering Manager
Doug Cook, Chief Operator
Jon Thomsic, Senior Engineer
Ryal Wheeler, Foreman
Bill Webster, Senior Operations officer
John Swindler, Information Technology Supervisor
Gerald Jones, Maintenance Manager
Lisa Lorey, Human Resources Manager
Lenora Crane, Committee Secretary
Others Present:
Tom Woodruff, General Counsel
Toby Weissert, Carollo Engineers
Stephen Sheldon, Sheldon & Associates
Adam Probolsky, Adam D. Probolsky & Associates
Minutes of Finance, Admin. and Human Resources Committee
Page2 ) )
April 8, 1998
APPROVAL OF MINUTES
The minutes of the March 11, 1998, meeting of the Finance, Administration and Human
Resources Committee were approved as drafted.
REPORT OF THE COMMITTEE CHAIR
The Committee Chair had no report.
REPORT OF THE GENERAL MANAGER
The General Manager had no report.
REPORT OF THE ASSISTANT GENERAL MANAGER
The Assistant General Manager had no report.
REPORT OF THE DIRECTOR OF FINANCE
• Gary Streed, Director of Finance, advised that the Treasurer's Report was distributed prior to
the meeting in accordance with the Districts' policy.
• A letter from the City of Garden Grove was also distributed prior to the meeting dealing with
user fees and the RAC process, for the Committee's information.
REPORT OF THE DIRECTOR OF HUMAN RESOURCES
The Director of Human Resources advised that there would be a closed session regarding labor
relations with the Supervisory and Professional employees.
REPORT OF THE DIRECTOR OF COMMUNICATIONS
• Director of Communications Michelle Tuchman stated that the Groundwater Replenishment
System luncheon will be held at the Districts on Thursday, April 30th. It is being held at the
Districts because we can accommodate more people in our Board Room than the Water
District can.
• Last year Elected Officials' Day was held in May. We have been unable to find a day in May
which would accommodate everyone's schedule, therefore, it has been postponed until later
in the year.
REPORT OF GENERAL COUNSEL
General Counsel had no report.
Minutes of Finance, Admin. and Human Resources Committee
Page 3 'l
April 8, 1998
CONSENT CALENDAR ITEMS (1 -3)
1. FAHR98-25: RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF
MARCH 1998, AND FORWARD TO THE JOINT BOARDS: 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.
2. FAHR98-26: Receive and file Certificates Of Participation (COP) Report
3. FAHR98-27: Receive and file Employment Status Report
END OF CONSENT CALENDAR
MOTION: Moved, seconded and duly carried to approve the recommended actions for
items specified as 1 through 3 under Consent Calendar.
The Chair requested that staff present Item No. 1 O on the Supplemental Agenda out of order.
OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY
10. FAHR98-32: Sewer Service User Fee Ordinance
General Manager Don McIntyre introduced Stephen Sheldon and Adam Probolsky, counsel
retained by the Revenue Enhancement Group, to speak on their behalf. Revenue
Enhancement's major concern is the time frame their clients can receive restitution for fees
they feel they have been overcharged. Mr. Sheldon expressed his appreciation to Mr.
McIntyre, Mr. Streed and Mr. Woodruff for the time they have spent meeting with him and
conversing with him on the phone. Mr. Sheldon gave the Committee an overview of the
situation which he said was comprised of "90% public policy and 10% law." In conclusion,
he advised that his client would like the Districts to reinstate the 4 year limitation for both
rebates and refunds, and have no distinction between the two. He suggested the Districts
increase the number of use categories so the problem does not occur as often. Mr. Sheldon
requested that this item be brought to the full Board for their consideration.
Upon discussion and questioning of the two legal representatives, the Committee members
felt potential litigation was involved and discussion should take place in closed session. The
Committee unanimously agreed to go into Closed Session on this item.
CONVENE IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.9
The Committee convened in closed session at 6:00 p.m., as authorized by Government
Code Section 54956.9, to discuss and consider item 10 on the published Supplemental
Agenda.
At 6:17 p.m. the Committee reconvened in Regular Session. It was moved, seconded and
duly carried to direct staff to bring additional reports regarding this issue back to the FAHR
Committee at its next regularly scheduled meeting.
Confidential Minutes of the Closed Session held by the Committee have been prepared in
accordance with California Government Code Section 54957.2 and are maintained by the
Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed
Meetings.
Minutes of Finance, Admin. and Human Resources Committee
Page4 '\
ApriI8, 1998 1
The following items were presented out of Agenda order, however, they are reported in order for
continuity purposes.
ACTION ITEMS (Nos. 4 -6)
4. FAHR98-28: Adopt Resolution No. 98-XX which:
(1) Repeals the Deferred Compensation Program in its entirety.
(2) Approves of salary range increases in the amounts necessary for the
General Manager to provide salary increases to those individuals in an
amount exactly equal to the amounts previously paid by the Districts to
those individuals through the Deferred Compensation Program.
(3) Ensures that any former employees who terminated employment prior to
the vesting of the deferred contribution, with the resulting forfeiture of
those sums back to the Districts, would not be entitled to now receive
those sums.
Director John Collins (JC) requested that his abstention from discussion and voting on this
matter be made a matter of record, as well as his absence from the conference room during
the Committee's consideration of this item.
MOTION: It was moved, seconded and duly carried to recommend that the Joint Boards
adopt Resolution No. 98-XX.
5. FAHR98-29: Receive and file Sewer Service User Fee Status Report
MOTION: Received and filed.
6. FAHR98-30: Receive and file Reserves Policy Status Report
MOTION: Received and filed.
INFORMATIONAL PRESENTATIONS
David Ludwin, Director of Engineering, advised that items 7 and 8 are related informational
items. Item No. 7 is a presentation about Information Technology and Plant Automation, and
how we are applying data information and integrating systems to make it all useful to staff.
He advised that Item 8 was presented to the Planning, Design and Construction Committee
(PDC) last week (April 2) with the intent to award the J-42 Professional Service Agreement (PSA)
to begin the work. A protest from the unsuccessful consultant, Westin Engineering, was
received (a copy of the protest letter was handed out to the Committee prior to the meeting). As
a result, the PDC Committee went into closed session to discuss the protest and what should be
done. The Committee's decision was to direct staff to reissue the RFP to the four consultants
previously found qualified. Those consultants are: Westin Engineering, Parsons Engineering
Sciences, Montgomery Watson and Malcom Pirnie. Staff had recommended that the PSA be
awarded to Parsons Engineering. Staff will be doing rework on the RFP and expects up to a
three-month delay before the PSA is brought back to the PDC Committee and Board for final
approval.
Minutes of Finance, Admin. and Human Resources Committee
Page5 ')
April 8, 1998
7. FAHR98-31: Office and Plant Computerization Overview
Chris Dahl, Director of Information Technology, provided the Committee with a gold colored
handout prior to the meeting which contained information on Information Technology projects
and a list of acronyms and their definitions. He presented an overview of the current state of
the use of information technology in the Districts' office and plant environments. He reviewed
some of the reasons why the Districts is interested in information technology, what the
Districts' approach is to new technology, and the "frontier'' projects.
Bill Webster, Senior Operations Supervisor and Grade V Operator, gave a brief overview of
the recent past, current status, and near term future of the Districts' automation and control
systems. His presentation contained an overview of the Districts' CRISP system, a Plant 2
historical overview of remote process control systems, and a brief description of the J-42
project and where we are headed.
8. PDC98-11: Informational Presentation re J-42 Reinvention and Automation Project
Doug Stewart, Engineering Manager, advised that the J-42 project is a collaborative effort
with Engineering as the leader with input from O&M and Plant Automation. He discussed
automation of the treatment plants and the productivity gains expected. He summarized the
J-42 project, the four phases required to implement the project over the next five years,
benefits of the project, the project's time table of scheduled activities, projected staffing levels
as a result of automation of the plants, and the project's budget information.
General Manager Don McIntyre advised that this report would not normally go to the FAHR
Committee, since it is a PDC Committee item. However, since it is a very important project
with a large dollar amount estimated to cost about $25 million overall, it is being presented to
the standing committees. The project is fundamental to what the Districts is trying to do
relating to reengineering the Plants, and is the key to how we expect to reduce staffing levels.
9. CLOSED SESSION
The Chair reported the need for a closed session, as authorized by Government Code
Section 54957.6, to discuss and consider the item specified under "Closed Session" as Item
9(a) on the published Agenda. The Committee convened in closed session at 7:35 p.m.
At 7:45 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
Meetings. No action was take re Agenda Item 9(a).
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.
Minutes of Finance, Admin. and Human Resources Committee
P~e6 ·~ ~
April 8, 1998
FUTURE MEETING DATES
The next Finance, Administration and Human Resources Committee Meeting is scheduled for
Wednesday, May 13, 1998, at 5:30 p.m.
ADJOURNMENT
The meeting was adjourned at 7:46 p.m.
Submitted by:
~ ~
Lenora Crane
Finance, Administration and Human
Resources Committee Secretary
H:\WP.DTA\FIN\210\CRANE\FAHR\FAHR98\APR\4-98MIN.DOC
l J
CITY OF GARDEN GROVE, CALIFORNIA
11222 ACACIA PARKWAY, P.O. BOX 3070, GARDEN GROVE, CALIFORNIA 92642
GARDEN GROVE
April 6, 1998
Mr. Don McIntyre, General Manager
County Sanitation Districts of Orange County
Administration Building
10844 Ellis A venue
Fountain Valley, CA 92728
RE: OUR MEETING OF MARCH 19, 1998
Dear Mr. McIntyre:
(714) 741-5100
I appreciate the opportunity to meet with you and the Strategic Plan Ad Hoc Committee to
discuss Garden Grove's concerns regarding the Strategic Plan for Capital Improvements and
CSDOC's proposed rate structure. As I said in the meeting, Garden Grove applauds the efforts
of the Sanitation District; the work of the Planning Advisory Committee and the Rate Advisory
Committee have been outstanding.
The Ad Hoc Committee asked that we offer our thoughts on the issues that could be addressed in
an economic impact analysis of the proposed rate structure. We believe an independent
economic modeling study would include an analysis that identifies, at a minimum, the following
points:
• What is the elasticity of demand and how does the proposed rate structure impact it?
• How would ·development be inhibited by the rate structure?
• What industries would achieve a breakpoint in costs and where would this occur?
• Which industries would be prompted to relocate as a result of the proposed rates and would
this impact the revenues of the Sanitation District, creating alternative Capital Facility needs,
therefore, changing the rate structure?
• Can an incentive structure be incorporated into the rates which would assist impacted
-businesses yet not be detrimental to the Sanitation District?
Of course, you may wish to include other areas in the study which would assist your efforts. For
instance, this study could permit you to develop the nexus for the rate structure and review those
other issues necessary to complete your economic analysis.
Orange County Sanitatior',..--Strict
April 6, 1998
Page 2
I appreciate your willingness to approach the various cities and the county to assemble a
technical advisory committee comprised from the communities served by the Sanitation District.
When you convene this committee you may be assured that Garden Grove will be there.
I was advised that your office sent a notice to the City announcing your establishment of a
Technical Assistance Center to assist businesses and industries. This is a very important step in
working with the business community to help them improve operations and streamline doing
business in Orange County. This high level of customer service by the Sanitation District will
certainly help improve the image of Orange County as a good place to do business.
Thank you for the opportunity to meet with the Strategic Plan Ad Hoc Committee. If you need
any additional information or want to discuss our comments further, please call me at the above
nwnber, Les Jones at 741-5375 or Mark Asturias at 741-5123.
Sincerely,
~
CityM~~R .
GLT:MA:mi
c: Mayor Bruce Broadwater
Mayor pro tern Mark Leyes
Les Jones
Mark Asturias
(p/econdev/mark/sanitati/sandis 17)
STA TE 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 April 8, 1998, was duly posted for public inspection in the main lobby of the Districts'
offices on April 2, 1998.
IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of April 1998.
Posted:~ cP.
By:~ (cinature
Penny Kyle, Secrethrlv of Jach of the Boards of Directors of
County Sanitation of~~ic s Nos. 1, 2, 3, 5, 6, 7, 11, 13· & 14
of Orange County, Calif rnia
, 1998, ~.''f5A.M.(.£)
~·
\\radonldata1\wp.dta\fin\210\crene\FAHRIFAHR98\APR\Backup of CERTPO4-98.wbk
SUPPLEMENTAL AGENDA
REGULAR MEETING OF THE
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
AGENDA
COUNTY SANITATION DISTRICTS
NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14
OF ORANGE COUNTY, CALIFORNIA
WEDNESDAY, APRIL 8, 1998, AT, 5:30 P.M.
ADMINISTRATIVE OFFICES
10844 Ellis Avenue
Fountain Valley, California 92708
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.
10. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS,
IFANY:
FAHR98-32 Consider revisions to Ordinance that defines rebates and refunds and their
respective years of eligibility.
(Stephen Sheldon -15 minutes)
H:IWP.DTAIFIN\210\streed\SUPP4-9BAGENDA.DOC
FAHR CO MMi lTEE,,1 Meeting Oat~
4/8/98
AGENDA REPO RT Item Numb.er
10
County Sanitation Districts of Orange County, California
FROM: Gary Streed, Director of Finance
SUBJECT: Sewer Service User Fee Ordinance (FAHR98-32)
GENERAL MANAGER'S RECOMMENDATION
Consider revisions to the Ordinance that defines rebates and refunds and their
respective years of eligibility
SUMMARY
To Jt. Bds.
Item Number
In November 1997, the Committee recommended an Ordinance to clarify the
distinctions between rebates and refunds for sewer service user fees collected as a
separate line item on the property tax bill. The Boards adopted the Ordinance and it
became effective January 16, 1998. Since that time the Committee and the Joint
Boards has heard oral presentations from a corporate citizen urging the Ordinance be
repealed.
At the February Board meeting, the General Manager was directed to meet with the
citizen. No change in position or posture resulted from that meeting. Prior to the March
Board meeting, at which the General Manager was scheduled to report the results, new
representatives from the protesting firm requested another meeting.
That meeting was held April 2, 1998, after the FAHR Agenda was mailed. The new
representatives, Mr. Stephen Sheldon and Mr. Adam Probolsky, indicated that they had
discussed the Ordinance with several Directors, and that there seemed to be some
confusion regarding it's content and impact. The representatives and their client have
requested an agendized open discussion among the Board members as soon as
possible.
PROJECT/CONTRACT COST SUMMARY
Annual sewer service user fees collected as a separate line item on the property tax bill
are approximately $60 million. Reduction adjustments of $7.5 million were made in
1996-97 and of $5.6 million in the first seven months of 1998-99 prior to the adoption of
the Ordinance.
H:lwp.dta\fin\21 O\streedlfahr rev 4-8.doc.dot
Revised: 1/5/98 Page 1
BUDGET IMPACT
D This item has been budgeted. (Line item: )
D This item has been budgeted, but there are insufficient funds.
X This item has not been budgeted.
D Not applicable (information item)
ADDITIONAL INFORMATION
Enclosed are copies of the Ordinance, the original staff report for the adoption and a
subsequent staff report from the February FAHR Committee discussion. Also enclosed
is an excerpt from the General Counsel's detailed opinion memorandum of October
1997, which was the legal foundation for the Boards' action.
ALTERNATIVES
Reaffirm the previous actions and the existing Ordinance.
Modify the existing Ordinance.
Repeal the existing Ordinance.
CEQA FINDINGS
N/A
ATTACHMENTS
Agenda Report, Joint Boards, 12/17 /97
Agenda Report, FAHR Committee, 2/11/98
Ordinance No. 134, an example of each District's Ordinance
General Counsel Memorandum excerpt, 10/7/97
H:lwp.dtalfin\21 O\streed\fahr rev 4-6.doc.dot
Revised: 1 /5/98 Page 2
t • ~J
JOINT BOARDS OF DIRECTORS
AGENDA REPORT
County Sanitation DiSbicts of Orange County, California
FROM:
.
Gary Streed, Director of Finance
Originator: Penny Kyle, Board Secretary
Meeting Date
Item Number
SUBJECT: Adoption of Ordinances relative to exemptions, rebates and refunds
of sanitary sewer service charges.
GENERAL MANAGER'S RECOMMENDATION
Public hearing relative to the following proposed Ordinances of the Boards of
Directors of County Sanitation Districts Nos. 1, 2, 3, S, 6, 7, 11 & 13 of Orange
County, California, amending ordinances relative to exemptions, rebates and
refunds of sanitary sewer service charges:
1 134
2 224
3 327
5 535
6 630
7 737
11 1126
13 1319
1. Open hearing
2. Verbal report of General Counsel
3. Receive and file written comments, if any
4. Oral public comments, if any
5. Staff response to comments
6. Close hearing
SUMMARY
District Nos. 1, 2, 3, 5, 6, 7, 11, and 13 should adopt an ordinance to amend the
current ordinance governing sewer service user fees in order to distinguish
between rebates and refunds of annual sewer service user fees collected as a
separate line item on the annual property tax bill.
1~.-~119117 Joont a,,_. AIT•IDE~ 14 doc
R--· 10,171117
ToJt. 8ds.
12/17/97
Item Number
14
PROJECT/CONTRACT COST SUMMARY
N/A
BUDGET IMPACT
D This item has been budgeted. (Line item: )
D This item has been budgeted, but there are insufficient funds.
~ This item has not been budgeted.
D Not applicable (information item}
At this time it is impossible to determine savings or expenses.
ADDITIONAL INFORMATION
The Sanitation District's annual sewer service fees are assessed to each
user connected to the sewerage system and are collected as a separate line
item on the property tax bill. The fees are calculated for each connected
parcel based upon information available from the County Assessors'
database .. Within a District, all single family residences are charged a
uniform fee, and multifamily residences are charged a lesser fee for each
unit Non-residential users are assessed a fee based upon the square
footage of the developed quilding area on each parcel. .
The actual type or amount of sewerage system use at a commercial/industrial
building is not a factor in the annual fee collected as a separate line item on the
property tax bill. This fee is the same per 1,000 square feet of development for
every non-residential user in the District. However, there are approximately
1,000 users who are issued a permit by our Source Control Division, whose fees
are established based upon actual quantities and strength of flow discharged to
the sewerage system. These users are commonly termed Class I and Class II
users in reference to the type of permit issued. Class I users are generally those
who are subject to Federal Categorical Pretreatment Standards, and have a daily
discharge exceeding 25,000 gallons. Class II users are high volume users
whose discharge includes other than sanitary waste, but who are not subject to a
Class I permit.
It should also be noted that one of the recommendations coming forward from
the Rate Advisory Committee, formed as a part of the Strategic Plan effort, will
be a change to more than 20 categories of non-residential users. This increase
in categories is expected to result in assumed quantity and strength by category
that more closely approximates the actual, and in charges that are more
appropriate for each category of user.
llleadldata2',,,i,.dlalagenda\19117 Jllint Boenla AITalDECIIIMI 14 doc
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In the meantime, the current District fee ordinances each provide for adjustments
to the calculated fees in the event the property owner/user can prove an inequity
exists between the fee assessed and the amount of wastewater discharged.
Such inequities may include, but are not limited to, the following instances:
A. The owner's parcel is not connected to a sewer;
8. The use of the parcel differs from the indicated use;
C. The principal water use is agricultural;
D. Any other use, wherein the amount of wastewater discharged to the
District's system is significantly less on a regular basis than the
amount that would normally be expected to be discharged by the
class of property in question.
Determination of any adjustments, rebates or refunds is vested in the General
Manager of the District, or his designee. The Finance Director and staff have
been administering this program with the guidance of the General Counsel.
Because the fees are collected on the property tax bill, the Government Code
specifies that refunds must be granted for up to the four-year period preceding
the refund request.
Even though the Districts' rates and rate structure had not changed in several
years, the Districts experienced a significant increase in the number and amount
of adjustment requests during 1996-97. This increase can be primarily attributed
to an influx of consultants .. The consulting firms mail a letter to businesses in the
county proposing they can lower their sewer service fees based upon their
understanding and knowledge of our Ordinance. Typically, the consultant is paid
a percentage of the reductions. A table showing the adjustments granted during
each of the past four years follows. The amounts indicated for each fiscal year
are the total adjustments and may include amounts charged in the prior four
years. Also reported is the percentage of adjustments granted during the year to
the total assessment for the year.
Fiscal Year Adjustment Percentage
1993-94 $ 170,011 .3%
1994-95 59,039 .1%
1995-96 364,741 .6%
1996-97 7,514,456 12.4%
There were approximately 750 adjustments made during fiscal 1996-97, most of
them were for the maximum four-year period. One might expect that the
adjustment per user would decline in the future as those with the most to request
should have been the earliest to be processed and their four year window has
been adjusted. Not surprisingly, not one user or consultant has notified staff that
the average cost charged on their property tax bill was below the proper charge
for their discharge.
llleadlda~ dlalag-•1111117 Joont llo•nla AITalOEC\llem 14.doc
R __ , 111117197 Page 3
In response to staffs concerns and requests, General Counsel has re-reviewed
the applicable Government Code. This month, General Counsel has issued an
opinion that distinguishes between a "rebate" and a "refund". In essence, the
difference is that a "refund" is due in the case of a billing error, such as billing a
parcel that had no sewer service, while a "rebaten is due when the sewer use has
been inappropriately determined. The significance of this opinion is that only the
refund requests are allowed for four-years; rebate requests are allowed only ·
during whatever time period is specified in the Districts' enabling ordinance.
General Counsel has ruled that a sewer service user fee assessed in accordance
with the adopted ordinance based upon the building square footage carried in the
County Assessor's database is only a billing error if the square footage is
incorrect, if the parcel is undeveloped or unsewered or if the use is not non-
residential. This means that sewer service user fee adjustments requested on
the basis of water use are not required for the four-year period, but rather for the
shorter period established by District Ordinance.
Because this ruling results in a change in the past practices, General Counsel
and staff are requesting that the ordinances be modified to clearly distinguish
between rebates and refunds and to define the adjustment period for both.
Because this revision is in the form of an ordinance, it will require two readings
and a published public notice. The revised adjustment period will be effective for
all requests received after January 1, 1998, the effective date of the revised
ordinance.
ALTERNATIVES
CEQA FINDINGS
ATTACHMENTS
Proposed ordinance
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FAHR COMMITTEE Meeting Date
02/11/98
AGENDA REPORT Jtemt,~mber
County Sanitation Districts of Orange County, California
FROM: Gary Streed, Director of Finance
SUBJECT: COMMERCIAL USER FEE ADJUSTMENT ORDINANCE
GENERAL MANAGER'S RECOMMENDATION
The General Manager has recommended that the Committee be informed of
recent events regarding commercial user fees. No action is proposed at this
time.
SUMMARY
At the January Committee meeting, the Director of Finance advised the Directors
he had notified all of the firms that are in the business of processing applications
for adjustments to the Districts' commercial user fees which are collected on the
property tax bill, of the Ordir,ance which became effective January 16, 1998. The
Ordinance changes clarified the distinction between refunds and rebates, and the
period for which each could be granted. Significantly, the period for refunds is
four years, and the period for rebates is one year. The General Manager,
General Counsel and staff, have since met with a representative for some of
these firms, along with his counsel. The General Manager wants the Committee
to be aware of the information and proposals received.
PROJECT/CONTRACT ·COST SUMMARY
Annual Sewer Service User Fees are collected as a separate line item on the
property tax bill. Rates have been adopted by each District for three categories:
Single family residential, multi-family residential and non-residential. The rates
are different in each District, but the total annual fees received are approximately
$60 million. Adjustments resulting in a deaease of $7 .5 million were made in
1996-97, and the seven-month total of refunds/rebates this year is $5.6 million.
These adjustments were all made prior to the adoption of the new ordinance
distinguishing rebates and refunds, and most of them have covered a four-year
period.
\\ladllnldala1-.p.claVtnl21oia-lFAHRIFAHR~..adj.dac
A...-1: 11511111
To Jt. Bds.
Item Number
BUDGET IMPACT
D This item has been budgeted
D This item has been budgeted, but there are insufficient funds. 0 This item has not been budgeted.
~ Not applicable (information item)
ADDITIONAL INFORMATION
Historical Cost Impact
When the Committee reviewed the adjustment history and recommended the
clarifying Ordinance in November, staff reported adjustments resulting in refunds
for the previous four years as follows:
1993-94
1994-95
1995-96
1996-97
$ 170,011
59,039
364,741
7,514,456
Staff reported that the dramatic increase was the result of a heightened
awareness brought about by the emergence of firms that marketed their ability to
obtain reductions and adjustments in the user fees levied. Staff also reported
that we expected to see a drop-off in the value of the adjustments, because most
of the ones already processed were for the maximum four-year period and were
for the comparues wilh tile larger charges. Although the seven-month
adjustments of $S.6 million are a significant amount, the predicted trend is
occurring:
July
August
September
October
November
December
January
$2,075,953
1,038,019
664,798
548,452
406,649
385,841
480,851
Position of User Representative{s)
173
146
114
79
53
81
65
The meeting referred to in the summary above with the owner and counsel for
•a; a: ea E: :l:a:&.,iCI It e: asp reviewed four concerns they (and according to
them other similar firms) have which adversely impact their client, namely:
1) Changing the eligible period for a rebate from four years to one yeD.is unfai~.
inequitable, and in violation of law. •
\~ldala1""".cllallnl21lllclwlelFAHRIFAHR881F~cloc
R ...... : 1151111 Page2
4 (
2) The Districts' $15.00 per application, administrative charge is invalid.
3) The Districts should process the request for rebate even if the client fails to
produce the water records.
4) The Districts should use a standard rate to allow for landscaping, rather than
demanding the property to prove extraordinary high water use.
As a summary, theazw .. ac E::I.W.a9:!!Jl! illlbk,epresentative declared in
absolute terms that if the Districts did not repeal the recently adopted Ordinances
and go back to the prior practices, it would file suit against the Districts to have
the ordinances set aside. General Counsel will be recommending meeting in
closed session after any public discussion to review this threat.
ALTERNATIVES
This is an informational presentation. If the Committee should desire to take any
action after the presentation, the alternative actions could be:
• Affirm the previous action and existing Ordinance.
• Modify the Ordinance.
• Repeal the Ordinance. .
• Take no action.
The General Counsel will be prepared to discuss the process and timing required
to take any of these or other alternatives if the Directors desire.
CEQA FINDINGS
NIA
ATTACHMENTS
None.
GGS:lc
\'ndan"'-1MP, ... Wln\21aa.n.,,FAHRY'AHR1181F'E~.cloc
R.....t 1151111 Page3
ORDINANCE NO. 134
AN ORDINANCE OF THE BOARD OF DIRECTORS OF COUNTY
SANITATION DISTRICT NO. 1 OF ORANGE COUNTY,
CALIFORNIA AMENDING ORDINANCE NO. 133 RELATING TO
EXEMPTIONS, REBATES AND REFUNDS OF SANITARY
SEWER SERVICE CHARGES
The Board of Directors of County Sanitation District No. 1 of Orange County,
California, does hereby ORDAIN as follows:
Section 1: Section 5 of Ordinance No~ 133 is hereby amended to read as
follows:
"Section 5: A Exemptions. It is the intent of the District that
the legal owner(s) of parcels of real property, otherwise subject to
the levy and payment of the sewer use charges as prescribed
herein, be relieved, in whole or in part, from the payment of said
charges, in certain circumstances and under conditions proscribed
herein, and be entitled to either a rebate or a refund with respect to
charges paid, as more specifically set forth in Subparagraphs B
and C below, provided an inequity is established or a billing error is
proven, as specified in Subparagraph B or C.
B. Application for Rebate. Any property owner
may apply to the District for a rebate of sewer use charges paid to
the District by establishing that an unfair valuation of the property
has been made by the District. An applicant for a rebate must
1
establish, by proof satisfactory to the General Manager of the
District, or his designee, that an inequity exists between the
amount of the charge paid and the amount of wastewater
discharged to the District's system, resulting in an unfair valuation.
Satisfactory proof shall establish that either:
(1) The principal water use is agricultural or
horticultural; or
(2) The property is devoted to any other
use wherein the amount of wastewater discharged to the District's
system is significantly less on a regular basis than the amount that
would normally be expected to be discharged by the class of
property in question.
Satisfactory proof shall include, but not be limited to,
documentation showing actual water usage for each billing cycle
during the entire period for which the rebate is sought.
The amount of any r_ebate shall not reduce the
charge payable by any property owner, whose property is
connected to District's system, to less than the single family
residential charge shown on Table A.
An appfication for a rebate shall be deemed a
claim and be governed by the provisions of California Government
Code Sections 935 et $eq., and shall be presented to the District,
2
as provided in the Government Tort Claims Act, Government Code
Sections 915 et seq., not later than one ( 1 ) year after the mailing of
the property tax bill by the County Tax Collector, and the claim for
rebate may only be made with respect to amounts paid or payable
under such property tax bill.
A claim for rebate under this Subparagraph is
not deemed a claim for refund, and California Revenue & Taxation
Code Sections 5096 and 5097 are not applicable.
C. Application for Refund. Any property owner
may apply to the District for a refund of sewer use charges paid to
the District by establishing that the amount paid was pursuant to an
error in the amount billed or the amount paid. The applicant for a
refund must submit proof satisfactory to the General Manager of
the District, or his designee,-that a billing error has been made by
the District, or the County Tax Collector. Such proof shall include,
but not be limited to, proof that:
(1) The owner's parcel of property is not
connected to the District's system; or
(2}' -The property has not been classified in
the proper land use category; or
(3) A clerical error has been made.
Applications for refund$ are governed by the provisions of
3
California Revenue ·& Taxation Code Sections 5096 and 5097,
allowing for refunds for a period of four (4) years from the date of
payment of the second installment of the bill claimed to be
incorrect.
D. Determjnation. All applications for rebates or
refunds of the sewer use charge will be determined by the General
Manager of the District, or his designee, who, based on the
submitted proof, may grant a full or partial rebate or refund.
E. Administrative Fee. At the time of filing the
application for rebate or refund, the property owner shall pay
District an administrative fee for the processing of such application.
The amount of the fee shall be an amount established by District's
Director of Finance from time to time, which amount shall not be
less than $15.00."
Sectjon 2: Section 7 of Ordinance No. 133 is hereby amended to read as
follows:
"Section 7. Method of Collection.
A. Pursuant to the authority granted by California
Health & Safety Code Section 5473, and except as otherwise
provided in Subparagraph B below, all charges established herein
shall be collected on the County Tax Roll in the same manner, by
the same persons, anc;:J at the same time as, together with, and not
4
separately from, its general taxes. The County Tax Collector is
authorized and hereby ordered to make said collections in
accordance with the terms and conditions of agreements between
the County of Orange and the District.
B. In the event District determines that, due to
billing or payment error, or to inequity in the amount billed, a
property owner has underpaid annual sanitary sewer service
charges payable to District, District, within four (4) years after the
date of mailing of the tax bill, in the case of billing or payment error,
or within one (1) year after the date of mailing of the tax bill, in the
case of billing inequity, may:
( 1 ) collect the amount of any deficiency
directly on the County Tax Roll;
(2) off-set the amount of any deficiency
against any amounts that District determines is owing, by District,
to the property owner, as a rebate or refund under this Ordinance;
or
(3) submit, directly to the property owner, a
bill for the amount of any deficiency, which shall be due and
payable within thirty (30) days of the invoice date and which, if not
paid, shall become a lien on said property."
5
Section 3: Seyerability. If any provision of this Ordinance or the application to
any person or circumstance is held invalid by order of court, the remainder of the
Ordinance or the application of such provision to other persons or other circumstances
shall not be affected.
Section 4: Effective Date. This Ordinance shall become effective on
January 16, 1998.
Section 5: Certification. The Secretary of the Board shall certify to the
adoption of this Ordinance and shall cause a summary of the same to be published in a
newspaper of general circulation in the District, as required by law.
PASSED AND ADOPTED by the Board of Directors of County Sanitation District
No. 1 of Orange County, California, at a regular meeting held December 17, 1997.
~-.;~s_Q"'~
Chairman of the Board'ot Diectors
County Sanitation District No. 1 of Orange
County, California
6
STATE OF CALIFORNIA )
)SS.
COUNTY OF ORANGE )
I, PENNY KYLE, Secretary of the Board of Directors of County Sanitation District
No. 1 of Orange County, California, do hereby certify that the above and foregoing
Ordinance No. 134 was passed and adopted at a regular meeting of said Board on the
17th day of December, 1997, by the following vote, to wit:
AYES: Pat McGuigan, Chair; James M. Ferryman; Mark A. Murphy;
Todd Spitzer
NOES: None
ABSENT: Thomas R. Saltarelli
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of
December, 1997.
Penny Kyle l · 1
Secretary of the Bq9rd of Directors of County
Sanitation District No. 1 of Orange County,
California
H:\WP.DTA\ADMIN\BS\ORDINANCES\97\13:H:ERTIFICATION.OOC
MEMORANDUM
TO:
FROM:
Gary G. Streed, Finance Director
General Counsel
DATE: October 7, 1997
RE: User Fee Refunds/Rebates
BACKGROUND:
We have reviewed several user fee refund issues in the ast few years, most of
them due to requests or claims from · __ In responding to the
most recent demands o a brief review of some of the more
significant of the previous y addressed issues might be helpful.
In 1994, we were asked whether the Districts had to pay interest on refunds that
were due on account of incorrect billings. On August 3, 1994, we provided a memorandum
to Wayne Sylvester to the effect that when the amounts of fees collected were incorrect
and refunds were due, the Districts had to pay interest on the refunds, unless the Districts
could claim that refunds were due for some reason other than assessor error or an
incorrect assessment not occasioned by the act or omission of the property owner. We
also stated that cl user could file a claim for refund up to four years after his payment was
made (Revenue and Taxation Code section 5097). In addition, we noted that we had
looked at arguments that the Districts could adopt a shorter limitations period, but that we
had rejected them due to Health & Safety Code section 5473.8, which requires the
application of the Revenue and Taxation Code provisions on refunds.
In 1996, the issue arose as to what event triggered the running of the four-year
statute of limitations under section 5097. On November 20, 1996, we sent you a
memorandum to the effect that there was a split of authority in the case law. We
recommended that the Districts adopt the view that the running of the statute of limitations
was triggered by the actual date of payment of the second installment of the bill claimed
to be incorrect, rather than by the delinquent date of the second installment of the bill.
2093-300
52479_1
Most recent! , as we understand, the Districts have been facing rebate claims from
perta_ining to four-year periods. The claims, apparently,
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page2
have been based on requests for the reduction of user fees determined by the application
of an alternate valuation procedure under District Ordinance No. 133. Mr. Esber of your
office has asked us whether the Districts can charge for underpayments in the four-year
periods, if the alternate valuation procedure shows overpayments in some years, and
underpayments in others.
In the opinion below, we do address the issues raised by Mr. Esber. However, in
our review, we have found some bases for distinguishing between the types of claims
presently being made by due to "unfair" valuations, and the
types of claims previously addressed, due to incorrect billings. Claims due to "unfair"
valuations are claims for "rebates", under District ordinances. Claims due to
incorrect billings, on the other hand, are claims for "refunds", under the Revenue
and Taxation Code. The Districts may be able to save a considerable amount of money,
if, at this time, they assert such distinctions, and alter their previous rebate practices in the
alternate valuation context. This will be more thoroughly discussed below, in addition to
the issues raised by Mr. Esber.
FACTS:
-. . .... ' --has been requesting user fee rebates, for
comhlercial users, based on District rebate procedures which permit alternate valuations
based on actual usage, rather than square footage. At least one I!
!!IIRrequest covers a period of four years, three of which would show overpayments y
t~er, but one of which would show an underpayment by the user, if the alternate
valuation procedure were applied to each year of the four-year period in question. The
documentation presented in support of claims based on actual usage is often spotty.
ISSUES:
1. Four-Year Rebates/Collection of Underpayments. Can the Districts apply the
a~ternate valuation procedure under Ordinance No. 133 retroactively for each of the
preceding four years (even if the applicant has requested the application for only some of
those years) and thereby offset against the claimed rebate amount for "overpayments," the
amount of any "underpayment" for any of the four years?
2.
be made?
2093-300
52479_1
Rebate Substantiation. What documentation is required before a rebate may
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 3
SHORT ANSWERS:
1. Four-Year Rebates/Collection of Underpayments. In this particular context,
requests for rebate are being made based on a District-permitted alternate valuation
procedure, not on billing error. It is arguable that, in this context, the Districts should be
denying the rebate requests altogether, on the basis that they are untimely filed under
District Ordinance Nos. 119 and 133. These ordinances require a property owner to
appeal the amount of the fee within 120 days after the mailing of the property tax bill to the
property owner (though, as discussed below, the Districts should offer to accept a late
claim up to one year from the date of the payment of the fee). Arguably, these types of
rebate requests are not properly made under Revenue and Taxation Code section 5096,
applicable to billing errors, and therefore, the four-year statute of limitations under Revenue
,\ and Taxation Code section 5097 does not apply. t
\ 'if
) If, due to the fact that the relevant statutes are subject to interpretation and the
Districts have granted alternate-valuation based rebates over four-year periods in the past,
the Districts desire to continue the practice, then it is appropriate to consider whether to
bill the users for prior years in which underpayments are shown, based on the alternate
valuation procedure. There is support for this in Ordinance No. 133, which permits the
Districts to bill the users directly when the Districts have determined that the amount
previously billed on the tax bill was "inequitable." However, no limitations period is
expressed in the ordinance. A four-year limitations period seems fair and i~ probably
legally defensible.
2. Rebate Substantiation. Ordinance No. 133, Section 5, requires that
"satisfactory proof' be provided to the General Manager, that an inequity exists between
the amount of the charge and the amount of wastewater discharged into the Districts'
system. An example is when the amount of wastewater dischar:ged is "significantly less
on a regular basis" than the amount normally expected to be discharged by the class of
property in question (i.e., normal discharge per square foot). The ordinance is not more
specific with regard to documentary requirements. Therefore, it is within the Districts'
discretion to determine what is "satisfactory proof' to show that usage was "significantly
less on a regular basis." We recommend that the Districts require documentation for
every single billing cycle during the period for which a rebate is sought, apd state
that anything less is not "satisfactqry proof."
2093-300
52479_1
J
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page4
ANALYSIS:
1. AUTHORITY FOR REBA TES:
A. 120-Day Rebate Period under Ordinance Nos. 133 and 119
Ordinance No. 133, Section 2, establishes sewer service charges based on
certain square footage rates, as of July 1, 1997. However, Ordinance No. 133, Section
5, provides that any property owner may appeal the levy of the charges, and, if the
charges have been paid to the tax collector, "the owner may submit a claim for rebate
to the District on the forms prescribed and approved by the District, within one hundred
twenty (120) days after the annual property tax bill is mailed."
Section 5 also provides that the General Manager may grant a partial or full
rebate based on "satisfactory proof' that an inequity exists between the amount of the
charge and the amount of wastewater discharged to the Districts' system. Enumerated
inequities include the discharge, to the Districts' system, of significantly less wastewater
"on a regular basis than the amount that would normally be expected to be discharged
by the class of property in question." Presumably, the normal expectation is the square
footage amount.
Ordinance No. 119, Article 7, Section 705, which has been in effect for a
number of years, contains appeal and rebate provisions that are substantially the same
as those contained in Ordinance No. 133, Section 5.
These ordinances clearly permit appeals of the type being made by i&d{s ri
Q C l • However, they also clearly require that the appeals be submitted
to the Districts within 120 days after the annual bills are mailed. Therefore, the Districts
should not grant any rebates for four-year periods based on these ordinances.
Whether Revenue and-Taxation Code section 5097, on the other hand, requires
rebates for four-year periods in the rebate-for-fairness context is addressed below.
2093-300
52479_1
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 5
B. Four-Year Statute of Limitations under Rev. & Tax. Code Section 5097
(1) Application of sections 5096-97
It would appear tha •• must be claiming rebates for
four-year periods based on Revenue and Taxation Code section 5097. Were the
claims ones for refunds based on billing error, this would be consistent with our
previously expressed opinions as to the application of the four-year statute of
limitations. However, as indicated at the outset, the current context is distinguishable,
because the requests in question at this time are not for refunds based on errors in
either the amount billed or the amount paid, but rather are for rebates based on
arguments that the amounts billed are unfair.
2093-300
52479_1
Revenue and Taxation Code section 5096 provides as follows:
"Any taxes paid before or after delinquency shall be refunded if they were:
(a) Paid more than once.
(b) Erroneously or illegally collected.
(c) Illegally assessed or levied.
(d) Paid on an assessment in excess of the ratio of assessed
value to the full value of the property as provided in Section 401
by reason of the assessor's clerical error or excessive or
improper assessments attributable to erroneous property
information supplied by the assessee.
( e) Paid on an assessment of improvements when the
improvements did not exist on the lien date.
(f) Paid on an assessment in excess of the equalized value of
the property as determined pursuant to Section 1613 by the
county board of equalization.
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 6
(g) Paid on an assessment in excess of the value of the
property as determined by the assessor pursuant to Section
469."
(Revenue and Taxation Code section 5096.)
It is important to note that the Districts' charges in question were not collected
either erroneously or illegally (and also that none of the other bases for refund apply).
They were collected deliberately, pursuant to properly adopted ordinances that based
fees on square footage. The fact that those ordinances also permit the users to request
rebates, if they can show to the satisfaction of the Districts that the fees were unfair,
does not mean that the fees were collected either erroneously or illegally, or that any
limitations period other than that contained in the Districts' ordinances with respect to
rebates should apply. It would therefore appear that the four-year statute of
limitations set forth in section 5097 does not apply.
However, as you may recall, Health & Safety Code section 5473.8 provides that,
with respect to District charges collected on the tax roll: "All laws applicable to the levy,
collection and enforcement of general taxes of the entity, including, but not limited to,
those pertaining to the matters of ... correction, ... [and] refund ... are applicable to such
charges .... " We have previously discussed this section as supporting the proposition
that section 5097 applies to District refunds. However, the context then in question
pertained to billing errors of such a nature that section 5096 also applied.
Assuming section 5096 is indeed inapplicable in the present context, and also
that the appeal and limitations procedures of Ordinance Nos. 133 and 119 are valid, all
rebates based on inequity. as opposed to refunds based on error, should be processed
only under the procedures set forth in Ordinance Nos. 133 and 119, and the four-year
limitations period should not be applied.
(2) Validity of District Rebate Procedures
As you know, Health & Safety Code section 5471 permits the Districts, pursuant
to "an ordinance approved by a two-thirds vote of the members of the legislative body
thereof, to prescribe, revise and collect, fees ... or other charges ... for services and
facilities furnished by it.. .. " Health & Safety Code section 5473, in turn, permits the
Districts to have the charges collected on the tax roll "in the same manner, by the same
2093-300
52479_1
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 7
persons, and at the same time as, together with and not separately from, its general
taxes .... "
These sections permit the Districts to adopt ordinances of the nature of
Ordinance Nos. 133 and 119. Section 7 of Ordinance No. 133 should not be construed
as being invalid because it creates an appeals procedure and a limitations period not
found in the Revenue and Taxation Code provisions on refunds. While, per Health &
Safety Code section 5473.8, and the terms of Ordinance No. 133 itself, the Revenue
and Taxation Code provisions on refund apply, there is no reason to assume that the
Districts cannot, by ordinance, fill a void left by the Revenue and Taxation Code. The
rebate based on an alternate valuation procedure is only permitted, if at all, under
District ordinance, not under the Revenue and Taxation Code. Therefore, the
procedural and limitations provisions of those ordinances should apply. In other
words, assuming that the distinction between claims for refund based on errors
and claims for rebate based on the application of alternate valuation procedures
is a valid one, Revenue and Taxation Code section 5096 applies to the former, but
not the latter, and Ordinance Nos. 133 and 119 apply to the latter.
This construction is feasible under Government Code section 935(a), which
provides that:
"Claims against a local public entity for money or damages
which are excepted by Section 905 [such as claims under the
Revenue and Taxation Code or other statute prescribing
procedures for the refund, rebate or adjustment of any tax, fee
or charge]. .. , and which are not governed by any other statutes
or regulations expressly relating thereto, shall be governed by
the procedure prescribed in any charter, ordinance or regulation
adopted by the local public entity."
(Government Code section 935(a).)
We had previously addressed this provision in 1994, when we considered
whether the Districts, by their own ordinance, could establish a statute of limitations
different from the one established in Revenue and Taxation Code section 5097.
Because Health & Safety Code section 5473.8 compels the application of Revenue and
Taxation Code procedures, the conclusion was that it was unlikely that the Districts
2093-300
52479_1
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 8
could do so.
However, the context at the time was also one in which it was assumed that
section 5096 applied to permit refunds on account of billing errors. If the argument is
raised that, in this context, section 5096 is inapplicable and the Revenue and Taxation
Code does not provide an applicable procedure, the result is arguably different. In this
context, then, Government Code section 935 may permit the Districts to establish
procedures and limitations periods that apply when the request is for a rebate based on
an alternate valuation procedure, rather than for a refund due to a billing error.
Of course, to the extent that section 935 governs, all the requirements of that
section must be met. One of the requirements, found in subdivision (c), is that the
ordinance may not require a shorter time for the presentation of a claim than the time
provided in Government Code section 911.2. Government Code section 911.2
provides as follows:
"A claim relating to a cause of action for death or for injury to
person or to personal property or growing crops shall be
presented as provided in Article 2 ( commencing with Section
915) of this chapter not later than six months after the accrual of
the cause of action. A claim relating to any other cause of
action shall be presented as provided in Article 2 ( commencing
with Section 915) of this chapter not later than one year after
the accrual of the cause of action."
(Government Code section 911.2.)
If a claim for a user fee rebate is construed as a claim for injury to personal
property, the six month provision should apply. If, on the other hand, a claim for a user
fee rebate is not so construed, then the one-year provision should apply. In support of
the latter construction, see Pasadena Hotel Development Venture v. City of Pasadena,
119 Cal. App. 3d 412,415 (1981), in which the court noted that a city tax refund claim
filing deadline of one year after the making of the payment sought to be refunded met
"the requirement of section 935, subdivision (c), that such period may not be shorter
than one year after the accrual of the cause of action. (See section 911.2.)"
2093-300
52479_1
If we assert, at this time, that the applicable rebate period in this context is
f
•
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 9
governed by District ordinance, rather than by Revenue and Taxation Code section
5097, then the Districts should advise•~•••••••Bla.that, on further
evaluation, the four-year limitations perio-ci"does not apply in this particular context, but
that the Districts will grant an extension of time to file a claim, until the date one year
after the payment of the fee in question.
C. Documentation Required for Rebate
As stated above, Ordinance No. 133, Section 5 provides that: (a) the General
Manager may grant a partial or full rebate based on "satisfactory proof' that an inequity
exists between the amount of the charge and the amount of wastewater discharged to
the District's' systems, and (b) enumerated inequities include the discharge, to the
Districts' system, of significantly less wastewater "on a regular basis than the amount
that would normally be expected to be discharged by the class of property in question."
It is within the Districts' discretion to determine what documentation constitutes
satisfactory proof.
We understand that sometimes claims for rebate for a given year are
substantiated by documentation showing actual usage for only a portion of the year in
question, or that claims for rebate for a period of several years are substantiated by
documentation showing actual usage for only some, but not all, of those years. We
also understand that the Districts, from time to time, may have permitted claims for
rebate based on such limited documentation.
For example, a claimant might state that his actual usage was less in the year in
question, but provide as proof documentation for only eight of twelve months of the
year, and ask the Districts to take an average based on the eight months. What if
documentation for the other four months would have shown that actual usage for the
full year was equal to or greater than the amount determined based on square footage?
As another example, a claimant might state that his actual usage for the preceding four
years was less than that determined by the square footage method, but provide as
proof documentation for only two of the four years, and ask the Districts to take an
average based on the two years .. What if documentation for the other two years would
have shown that actual usage for the four years was equai to or greater than the
amount determined based on square footage?
2093-300
52479_1
It would be reasonable to requ'ire complete documentation for all twelve months
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 10
of each one-year period for which a rebate is sought. However, it is a matter of District
policy, whether the Districts are willing to accept, as "satisfactory proof' of actual usage
for the year in question, documentation that in fact only covers intermittent periods
within that year. However, based on Ordinance No. 133, Section 7, which permits
appeals of annual bills, we recommend that rebates be considered only with
respect to actual usage over one-year periods for which documentation for each
billing cycle is provided, and that averages not be taken.
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 11
Mr. Gary G. Streed
Finance Director
October 7, 1997
_____ P_a .... g .... e_1_2 ______ _
, --•------"""' 1.acr.,.o<rin:Or."', -----•J .. --···
CONCLUSION:
As previously stated, the time appears ripe for the Districts to argue that different
procedures apply in the rebate due to alternate valuation context, than in the refund
due to error context, and to urge that the limitations period of Ordinance No. 133
applies in the former context, though with an extension of the 120-day period to 365
days from payment of the fee, for "late" claims. Even with the extension to one year,
this should make most rebate requests untimely. This may also eliminate the Districts'
concern about collection of underpayments.
While the argument about the inapplicability of the four~year statute of limitations
under Revenue and Taxation Code section 5097 is untested in the courts, and going to
one year would constitute a change in position by the Districts, we suggest that the
Districts nonetheless adopt such a position, in an effort to drastically reduce the
Districts' rebate of moneys. Pursuant to our recent discussions, the best way to
2093-300
52479_1
"
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 13
accomplish this change in position may be to amend Ordinance No. 133. The
amendment should: (1) specifically distinguish between refunds due to billing error and
rebates due to the application of alternate valuation procedures, (2) apply separate
limitations periods for each (i.e., four years for errors and one year for fairness issues),
(3) possibly eliminate some of the contexts in which rebates due to fairness issues (as
opposed to refunds due to fil[Q[) are available at all, (4) specify that the Districts may
collect for underpayments four years retroactively, (5) clarify that offsets may be made
against rebates claimed under the alternate valuation procedure, and (6) make
requirements of satisfactory proof more specific and otherwise update procedural
requirements as necessary.
We note that while the issues currently raised ,. . -,________.., -. --
are based upon the actual amount of wastewater discharged versus normal usage,
there are three other grounds for rebate, under Ordinance No. 133, Section 5, that
perhaps should also be considered when the ordinance is amended. Section 5 also
permits applications for rebates when: (1) the parcel of property is not connected to the
Districts' system, (2) the use of the parcel differs from the use indicated by the charge,
or (3) the principal water use is agricultural. The first two instances would seem best
characterized as errors, to which the four-year statute of limitations for refunds should
be applied. The third instance would appear to be best characterized as another
fairness issue, however, to which the one-year limitations period should be applied. We
suggest that the Districts adopt these positions via the amendment.
At least until such time as the amendment is adopted, the issue of the collection
of underpayments remains. While supplemental billings for underpayments are
permitted under Ordinance No. 133, as discussed above, Section 7 does not specify
the period of years for which subsequent billings may be made, and we have yet to do
extensive research on this issue. However, note that Revenue and Taxation Code
section 4831 permits subsequent billings due to error to be made over a four-year
period. Were that provision applied by analogy, the Districts would be permitted to
adjust tax bills for underpayment for the full four-year period over which rebates were
also claimed. This would seem to be fair. If it is your intent to adopt such a policy, we
will expand our research a bit to prove a definitive opinion.
Recognizing that we have raised numerous issues outside of the scope of the
initial request, we have not done extensive research on these issues. Please let us
2093-300
52479_1
Mr. Gary G. Streed
Finance Director
October 7, 1997
Page 14
know what your initial feelings are with regard to the matters discussed herein, and we
will determine how best to proceed.
cc: Mr. Donald F. McIntyre
Mr. Jeffrey Esber
Thomas F. Nixon, Esq.
Danie I. Spence, Esq
2093-300
52479_1
~OMAS L. WOODRUFF
GENE LCOUNSE
phone:
(714) 962-2411
mailing address:
P.O Box 8127
Fournajn Valley, GA
92728-8127
street address:
10844 811::; Averiµe
Fountain Valley, c,t,.~
9270B-7018
Member
Agencies •
Cities
Anaheim
Bree-
Buena Park
Cypress
Por1nealn VaJJey
Fullerton
H11mfngton Bea.oh
,Jrvme
La /!ial:Tr-a
La Palms
Las Alamitos
Newport Besch
Orarnie
Placanliia
Santa Ana
Seal Beach
SGa11ton
Tustin
Villa Pai·k
Yarb.r UnPa
County of Orange
Sanitary Distrfcts-
Costa Mesa
Garden Grove
Mfdway City
Water Districts
lrVf'IBc Rench
COUNTY n1TATION DISTRICTS OF •RA~E COUNTY, CALIFORNIA
April 2, 1998
NOTICE OF MEETING
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
COUNTY SANITATION DISTRICTS
NOS. 1, 2, 3~ 5;~, 7, 11, 13 AND 14
OF ORANGE COUNTY, CALIFORNIA
WEDNESDAY, APRIL 81 1998 -5:30 P.M .
DISTRICTS' ADMINISTRATIVE OFFICES
10844 ELLIS AVENUE
FOUNTAIN VALLEY, CALIFORNIA 92708
A regular meeting of the Finance, Administration and Human Resources
Committee of the Joint Boards of Directors of County Sanitation Districts
Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, will be
held at the above location, time and date.
A Public Wastewater and Environmental Management Agency Committed to Protecting the Environment Since 1954
FINANCE. ADMINISTRATION AND HUMAN RESOURCES
COMMITTEE
TENTATNELYSCHEDULED
MEETTNG DATES
FAHR Committee Joint Board
Month. Meetings: Meetings
April April 8, 1998 April 22, 1999·
May May 13, 19.98 May 27, 1998
June June 10, 1998 June 24, t998
July July 8, 1998 July 22, 1998
August None Scheduled August 26, 1998
September September 9, 1998 September 23, 1998
October October 14, 1998 October 28, 1998
November None Scheduled November 18, 1998
December December 9, 1998 December16,1998
January None Scheduled January 27, 1999
February February 10, 1999 February 24, 1999
March March 10, 1999 March 24, 1999
April April 14, 1999 April 28, 1999
ROLL CALL
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
MEETING DATE: April 81 1998 TIME: 5:30 P.M.
ADJOURN: P.M.
COMMITTEE MEMBERS
GEORGE BROWN (CHAIR) .......................................................... .
JOHN J. COLLINS (JC) ................................................................. .
JAN DEBAY .................................................................................. .
BARRY DENES ............................................................................. .
NORMAN ECKENRODE ............................................................... .
JOHN M. GULLISON ...•.••••••••••••••.•••••..••....•••••.••.•••••.••••.........•••••••••
MARKLEYES ..•••.•.•.••..•••••••••••••.••••••..•••....•••••••.•••••••••••••.•.•.•••••••••••
MARK MURPHY ........•..•••••••••••••.•.••.....•.•.•••••..••••...•...........•••••••••••.
THOMAS SALTARELLI ................................................................ .
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 •••..•••........••.••.
TERRI JOSWAY, Safety & Emergency Response Manager .....••••••
MARC DUBOIS, Contracts/Purchasing Manager ........................... .
JIM HERBERG, Engineering Supervisor ...................................... ..
DOUG STEWART, Engineering Manager ....................................... .
ED TORRES, O&M Air Quality/Special Projects Manager ••••.•........
DOUG COOK, Chief Operator ........................................................ .
LISA LOREY, Human Resources Manager ...... -........................... .
JON THOMSIC, Senior Engineer .................................................... .
LENORA CRANE, Committee Secretary .......•........................•....•...
OTHERS
TOM WOODRUFF, General Counsel ............................................... __
TOBY WEISSERT, Carollo Engineers ............................................. __
c: Debra Lecuna
Penny Kyle
AGENDA
REGULAR MEETING OF THE
FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
ROLL CALL
COUNTY SANITATION DISTRICTS
NOS.1, 2, 3, 5, 6, 7, 11, 13AND 14
OF ORANGE COUNTY, CALIFORNIA
WEDNESDAY, APRIL 8, 1998, AT, 5:30 P.M.
ADMINISTRATIVE OFFICES
10844 Ellis Avenue
Fountain Valley, California 92708
APPOINTMENT OF CHAIR PRO TEM, IF NECESSAR¥
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).
April 8, 1998
RECEIVE, FILE AND APPROVE MINUTES OF PREVIOUS MEETING
Recommended Action: Consideration of motion to receive, file and approve draft minutes of the
March 11, 1998, Finance, Administration and Human Resources Committee meeting.
REPORT OF COMMITTEE CHAIR
REPORT OF GENERAL MANAGER
R'EPORT OF DIRECTOR OF FINANCE
REPORT OF DIRECTOR OF HUMAN RESOURCES
~EPORT OF DIRECTOR OF COMMUNICATIONS
REPORT OF GENERAL COUNSEL
CONSENT CALENDAR ITEMS
All matters placed on the consent calendar are considered as not requiring discussion or further explanation and
unless any particular item is requested to be removed from the consent calendar by a Director, staff member or
member of the public in attendance, there will be no separate discussion of these items. All items on the consent
calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions
included on the consent calendar. All items removed from the consent calendar shall be considered in the regular
order of business.
Members of the public who wish to remove an item from the consent calendar shall, upon recognition by the chair,
state their name, address and designate by number the item to be removed from the consent calendar.
The Chair will determine if any items are to be deleted from the consent calendar.
Consideration of motion to approve all agenda items appearing on the Consent Calendar not
specifically removed from same, as follows:
1. FAHR98-25: Receive and file Treasurer's Report for the month of March 1998: The
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.
2. FAHR98-26 . Receive and file Certificates of Participation (COP) Monthly Report
3. FAHR98-27: Receive and file. Employment Status Report
END OF CONSENT CALENDAR
Consideration of items deleted from Consent Calendar, if any.
-2-
,
April 8, 1998
ACTION ITEMS
4. FAHR98-28: Adopt Resolution No. 98-XX which:
(1) Repeals the Deferred Compensation Program in its entirety.
(2) Approves of salary range increases in the amounts necessary for the
General Manager to provide salary increases to those individuals in an
amount exactly equal to the amounts previously paid by the Districts to
those individuals through the Deferred Compensation Program.
(3) Ensures that any former employees who terminated employment prior to
the vesting of the deferred contribution, with the resulting forfeiture of those
sums back to the Districts, would not be entitled to now receive those
sums.
(Mike Peteman\Tom Woodruff -15 minutes)
5. FAHR98-29: Receive and file Sewer Service User Fee Status Report
(Gary Streed -10 minutes)
6. FAHR98-30: Receive and file Reserves Policy Status Report
(Gary Streed -10 minutes)
INFORMATIONAL PRESENTATIONS
7. FAHR98-31: Office and Plant Computerization Overview
(Chris Dahl-10 minutes)
8. PDC98-11: Informational Presentation re J-42 Reinvention and Automation Project
(David Ludwin\Doug Stewart -30 minutes)
-3-
April 8, 1998
CLOSED SESSION
euring the course of conducting the business set forth on this agenda as a regular meeting_ of the Committee1 the Ghair j
may c-onvene the Committee in closed session to consider matters of pending real estate negotiations, pending or j
potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, j
as noted. '
Reports relating to •( a) purchase and sale of real property; (b) matters of pending or potential litigation; ( c) employee
actions or negotiations ·with employee representatives; or whicn are exempt from public disclosure under the·,California
Public Records Act, may be reviewed by the Committee during a permitted closed session and are not available for
public inspection. At s'-'ch time as final actfons are taken by the Committee on any of these subjects, the minutes will
reflect all re.· utred disqlos'-'res of information. '-----------~------------------,-.,--------,.---.. • .. ,--·-·--------------·--·-·
9. Convene in closed session.
a. Confer with Districts' Negotiator re Pending MOU Labor Negotiations with Supervisory
and Professional Employees (Government Code Section 54957.6).
b. Reconvene in regular session.
c;-Consideration of action, if any, on matters considered in closed session.
OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY
MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSE:QUENT
MEETING
MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR
ACTION AND STAFF REPORT
FUTURE= MEETING DATES
The next Finance, Administration and Human Resources Committee Meeting is scheduled for
May 8, 1998
NOTICE TO COMMITTEE MEMBERS
If you have any questions on the agenda or wish to place any items on the agenda, Committee members should
contact the Committee Chair or Secretary ten days in advance of the Committee meeting.
Committee Chair:
Comm. Secretary:
le
George Brown
Lenora Crane
(5,62) 431-2185
(714):962-2411, Ext. 2501
(714)' 962-3954 (FAX)
\\RADONIDATA 1\WP DTA\FIN\210\CRANE\FAHR\FAHR98\APR\4-98AGENDA.OOC
-4-
DRAFT
MINUTES OF FINANCE,
County Sanitation Districts
of Orange County, California
P.O. Box 8127 e 10844 Ellis Avenue
Fountain Valley, CA 92728-8127
Telephone: (714) 962-2411
ADMINISTRATION AND HUMAN RESOURCES COMMITTEE
Wednesday, March 11, 1998, 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, March 11, 1998, 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
John M. Gullixson
Mark Leyes
Mark A. Murphy
Thomas R. Saltarelli
William G. Steiner
Committee Directors Absent :
Peer Swan, Vice Joint Chair
Other Directors Present:
None
APPOINTMENT OF A CHAIR PRO TEM
No appointment was necessary.
PUBLIC COMMENTS
No comments were made.
Staff Present:
Don McIntyre, General Manager
Blake Anderson, Assistant General Manager
Gary Streed, Director of Finance
Ed Hodges, Director of General Services Administration
Mike Peterman, Director of Human Resources
Michelle Tuchman, Director of Communications
Greg Mathews, Principal Administrative Analyst
Mike White, Controller
Steve Kozak, Financial Manager
Jim Herberg, Engineering Supervisor
John Swindler, Information Technology Supervisor
Lisa Lorey, Human Resources Manager
Lenora Crane, Committee Secretary
Others Present:
Tom Woodruff, General Counsel
Ron Gatti, Valic
Judy Davis, Valic
Toby Weissert, Carollo Engineers
Minutes of Finance, Admiri ~nd Human Resources Committee
Page 2 '
March 11, 1998
APPROVAL OF MINUTES
The minutes of the February 11, 1998, meeting of the Finance, Administration and Human
Resources Committee were approved as drafted.
REPORT OF THE COMMITTEE CHAIR
The Committee Chair had no report.
REPORT OF THE GENERAL MANAGER
• General Manager Don McIntyre requested that Ed Hodges, Director of General Services
Administration, show a videotape taken of a City of Santa Ana sewer line.
Mr. Hodges described a sewage spill which occurred in the Santa Ana area a few weeks ago
during one of our recent rain storms. Districts' staff examined our lines to determine if we
were the cause, however, no obstructions were found in our lines. With the help of the City
of Santa Ana, a contractor was hired to run a camera into the city line and videotape the 8"
clay pipe line, which is approximately 30-35 years old. The area where the city line is located
borders Edinger and Warner and Bristol and Maine Streets. The video showed clear water
being infiltrated into the sewer line through broken cracks in the pipe. The pipe was also
found to be sagging in spots and contained offset joints.
Don McIntyre advised that this may be a bigger issue, especially if similar problems exist in
many other locations in our service area. He stated that if infiltration and inflow can be
mitigated, we would probably reduce our mgd by 50 mgds or more. We are trying to
convince the cities that they should be addressing these issues and need to repair their
sanitary sewers. As part of the Strategic Plan, the Districts should be prepared to provide
matching funds to encourage and help cities deal with these issues.
REPORT OF THE DIRECTOR OF FINANCE
• Gary Streed, Director of Finance, identified the documents which were placed before each
Director prior to the meeting, which included the Treasurers' Report, revised RAC schedules
and colored hand-outs regarding Item No. 9 on the Agenda.
• Mr. Streed further advised the Committee that the COP rates are down to 1.05% today.
REPORT OF THE DIRECTOR OF HUMAN RESOURCES
The Director of Human Resources had no report.
REPORT OF THE DIRECTOR OF COMMUNICATIONS
• Director of Communications Michelle Tuchman reported that on Thursday, March 26, 1998,
there will be a luncheon meeting for City Managers and their Public Works staff. The video
presented by Mr. Hodges this evening will be shown at the meeting, and another topic for
discussion will be the groundwater replenishment system.
Minutes of Finance, Admin. and Human Resources Committee
Page 3 ')
March 11, 1998
• In today's Times, the Metro Section had a picture of a sign stating, "Beach Closed," which
appeared to look like is in the Districts' service area. Ms. Tuchman said she spoke to the
reporter who ran the article and found out she is new to the Times, and did not realize that
the location was not in our service area. Michelle spoke to her again and suggested she
might like to run another article about whether the beaches would be open over the weekend
and reiterate the problem, and suggested she speak to an official at the Health Department
for further details.
REPORT OF GENERAL COUNSEL
• General Counsel updated the Committee regarding the Orange County Employees'
Retirement System actions relative to the Ventura decision and its impact on Districts'
employees, particularly as it relates to the Districts' Deferred Compensation Program. There
was no action by the Districts' Board at their last meeting because of events taking place at
OCERS. Mr. Woodruff has had two conferences with OCERS and some issues are still not
resolved, however, their goal is for a positive outcome. Mr. Woodruff is expecting a
Memorandum of Understanding from them next week. Mr. Woodruff advised he will bring this
item back to the FAHR in April.
The Committee Chair gave Mr. Woodruff the option of bringing this item to the Joint Boards, if
he is prepared to do so by then.
CONSENT CALENDAR ITEMS (1 -3)
1. FAHR98-18: RECEIVE AND FILE TREASURER'S REPORT FOR THE MONTH OF
FEBRUARY 1998, AND FORWARD TO THE JOINT BOARDS: 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.
2. FAHR98-19: Receive and file Certificates Of Participation (COP) Report
3. FAHR98-20: Receive and file Employment Status Report
END OF CONSENT CALENDAR
MOTION: Moved, seconded and duly carried to approve the recommended actions for
items specified as 1 through 3 under Consent Calendar.
ACTION ITEMS (Nos. 4-6)
4. FAHR98-21: Approve second amendment to County Sanitation Districts of Orange County,
California, Deterred compensation Plan as amended 1994
MOTION: It was moved, seconded and approved, with Director Collins abstaining, to
recommend that the Joint Boards approve second amendment to County Sanitation Districts
of Orange County, California, Deferred compensation Plan as amended 1994.
Minutes of Finance, Admin :and Human Resources Committee
Page 4 \
March 11, 1998
5. FAHR98-22: Receive and file FY 1997/98 Joint Operating Legal Fees Update
MOTION: It was moved, seconded and duly carried to receive and file this report.
6. FAHR98-23: Receive and file the Second Quarter Workers' Compensation and Accident
Report for FY 1997/98.
MOTION: It was moved, seconded and duly carried to receive and file this report.
INFORMATIONAL PRESENTATIONS
7. FAHR98-24: RAC User Fee Structure Evaluations
Mr. Streed updated the Committee on the progress that is being made in revising the
Districts' commercial user fee structure. He reviewed some of the work the Rate Advisory
Committee has made in this area to expand the number of categories. The goal of the
commercial user fee study is to change the number of categories to more accurately reflect
uses, and to maintain the projected total level of sewer service user fees. Increasing the
number of categories is also expected to reduce the number of appeals and fee reduction
claims and adjustments. Mr. Streed noted that it is expected that there will be more fee
reductions with the new rate structure than increases.
Mr. Streed reviewed the revised schedules that were placed before the Directors just prior to
the meeting, which included a Summary Comparison of Rate Structures by District, a
Comparison of Residential Sewer Service Rates by agency, a Comparison of Commercial
Rates by commercial categories, and a Property Use Category Proposal Comparison table.
In response to the Committee, Mr. Streed stated that the Districts' Sewer Service Rates are
the lowest of all the agencies surveyed because, under our 301 H Permit, we discharge less
than full secondary treatment, therefore, our costs are less and our fees should be less.
Mr. McIntyre advised the Committee that a statewide report on user fees made by Black and
Veach is available for any of the Directors wishing to compare our fees on a broader range.
The Committee was also advised that the reason the Districts cannot charge market value for
sewer services, is because Proposition 218 states we cannot charge more than the cost to
provide the service.
Mr. Streed said that the connection fee study and proposals are expected to be completed
and brought to the FAHR Committee in June and the user fees in May.
Chairman Brown complimented Mr. Streed on an excellent report, and advised the
Committee that this is a small step forward in a very complex process.
The Chair requested that staff present Item No. 9 on the Supplemental Agenda out of order.
OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY
9. OMTS98--006: Authorize staff to enter into a Lease Agreement with the County of Orange
for installation of an 800 MHz system at Plant No. 2 for a period of twenty (20) years.
I
Minutes of Finance, Admin. and Human Resources Committee ~
Page 5 ') ,
March 11, 1998
MOTION: It was moved, seconded and duly carried to recommend that the Joint Boards
authorize staff to enter into a Lease Agreement with the County of Orange for installation of
an 800 MHz system at Plant No. 2 for a period of twenty (20) years.
8. CLOSED SESSION
The Chair reported the need for a closed session, as authorized by Government Code
Section 54957 .6, to discuss and consider the item specified under "Closed Session" as Item
8(a) on the published Agenda. The Committee convened in closed session at 7:00 p.m.
No action was taken re Agenda Item 8(a).
At 7:20 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
Meetings.
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, April 8, 1998, at 5:30 p.m.
ADJOURNMENT
The meeting was adjourned at 7:22 p.m.
Submitted by:
n a Crane
Fina ce, Administration and Human
Resources Committee Secretary
H:\WP.DTA\FIN\210\CRANE\FAHR\FAHR98\MAR\3-98MIN.DOC
FAHR COMMITTEL I Meeting Date ToJt. Bds.
04/08/98
AGENDA REPORT Item Number Item Number ~-
County Sanitation Districts of Orange County, California
FROM: Gary Streed, Director of Finance
Originator: Steve Kozak, Financial Manager
SUBJECT: CERTIFICATES OF PARTICIPATION (COP) MONTHLY REPORT
(FAHR98-26)
GENERAL MANAGER'S RECOMMENDATION
Receive and file Certificates of Participation (COP) Monthly Report
SUMMARY
Since June 1995, the daily rate COP program remarketing agents have been
PaineWebber for the Series "A" and the 1993 Refunding COPs, and J.P. Morgan for
the Series "C" COPs. Most fixed rate Series "8" COPs have been refunded and the
1992 Refunding COPs have always been remarketed by PaineWebber in a weekly
mode.
PROJECT/CONTRACT COST SUMMARY
None.
BUDGET IMPACT
D This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted.
rg) Not applicable (information item)
ADDITIONAL INFORMATION
Two graphical, and one tabular, reports are attached. The first graph entitled,
"CS DOC COP Rate History Report," 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."
H:lwp.dta'lin\210\crane\FAHRIFAHR98\APRIFAHR98-26.doc
Revised: 115198 Page 1
I
The second bar chart entitled, "Comparative Daily COP Rate History Report," shows
the performance of the Districts' Daily Rate COPs as compared to a composite index
rate, which represents the average rate of six similar variable rate daily reset
borrowings.
The table entitled, "Daily COP Rate Comparisons," shows the monthly variable interest
rate performance of the Districts' Daily Rate COPs as compared to the composite
index. Estimated annual interest payments calculated for a standard $100 million par
amount, are also shown.
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.
ALTERNATIVES
None.
CEQA FINDINGS
None.
ATTACHMENTS
1. Graph -Comparative Daily COP Rate History Report
2. Graph -CSDOC COP Daily Rate History Report
3. Tabular-Daily COP Rate Comparison
GGS:SK:lc
H:lwp.dtaVin\210\cranelFAHRIFAHR98\APRIFAHR98-26.doc
Revised: 115198 Page2
Prepared by Finance, 4/1/98, 9:49 AM
-~ 0 -
CSDOC COP DAILY RATE HISTORY REPORT
MARCH 1998
6--.-----------------------------------------,
5 -+-----------------------------------------1
4 -+--------------h-----------------------------1
w I-3 I / \ £: H ,. 'O' \ If ~ F.I \ /I I • l ~
2 -+---------------------------------H---------1
1
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I I I I I I I I I I I I I I I I I I ~ ~ C> C> Q. Q. .. .. > > (,) (,) (,) C C .0 .0
DATE ::, :::, ::, :::, :::, a, a, (,) (,) 0 0 a, a, a, l'IS l'IS a, a, l'IS l'IS ""') ""') ""') <t <t en U) 0 0 2 2 C C C ""') ""') LL LL ~ ~ I I I N (0 0 I I I I I I I I I I I I I I I I I
0 or-M M ..... 0 "I:!' co N II) a, M r,.. or-"It' co or-II') or-II)
or-N ..... N 0 N 0 ..... 0 "I""" M ..... N ..... N ..... N
--+-PaineWebber -tr-J.P. Morian -AIGSwap --M-SocGen wap
G:\excel.dta\fin\2220\geggi\Finance\RA TEH 1ST .97
Prepared by Finance, 4/1 /98, 9:49 AM
COMPARATIVE DAILY COP RATE HISTORY REPORT
MARCH 1998
6.00 ..------------------------------------------------..
5.00 ·.
4.00 I I
-~
~ 3.00
< ix:
2.00
1.00
.. .,,~ .. .,., ......... ,.,,. --.,.«_._., .. ...,..,_,.,., . .,.....,,,,..,.,,. .!E 0.00
DATE r--r--r--r--r--r--CX) CX) CX) CX) CX) CX) en en en en en en en en en 0) en en
"'5 ci a: +" > u-c .c ..... ..... >,. c :::, (I) u 0 (I) Ill (I) Ill a. Ill :::, ...., <( en 0 z 0 ...., u. ~ <( ~ ....,
ll'ilCSDOC D COMPOSITE INDEX
G :\excel .dte\ fi n\22 20\geggi\Fi ne nee \d ail ye opi ntrate .xis
J
I
Prepared by Finance, 4/1/98, 9:50 AM
Jul-97
Aug-97
Sep-97
Oct-97
Nov-97
Dec-97
Jan-98
Feb-98
Mar-98
Apr-98
May-98
Jun-98
AVERAGE
DAILY COP RATE COMPARISONS(%)
JUL, 1997 -MAR, 1998
csooc
$100M $98.SM $46M
Series"A" Series"C" Series 93 Ref
Paine Webber J.P. Morgan Paine Webber
3.17 3.12 3.17
3.17 3.20 3.17
3.53 3.63 3.53
3.46 3.51 3.46
3.68 3.69 3.68
3.29 3.35 3.29
3.09 3.09 3.09
2.50 2.60 2.50
2.77 2.80 2.77
3.18% 3.22% 3.18%
ESTIMATED ANNUAL INTEREST
PAYMENTS PER $100M PAR AMOUNT $ 3,184,444 $ 3,221,111 $ 3,184,444
"FOOTNOTE
Composite index consists of the following COP transactions:
. IRWD, Series 86, $60M, Smith Barney
. IRWD, Series 93 "A" Refunding, $87.6M, Bankers Trust
. IRWD, Series 93 "B" Refunding, $41.8M, J.P. Morgan
. IRWD, Series 95 Refunding, $117.8M, PaineWebber
Composite
Index•
3.10
3.05
3.60
3.38
3.68
3.33
3.10
2.53
2.80
3.17%
$ 3,174,444
. Western Riverside Co. Reg. Wastewater Auth., Series 96, $25.4M, PaineWebber
. Orange Co., Irvine Coast Asst. Dist. 88-1, $94 .SM, J.P. Morgan
G:\excel.dta\fin\2220\geggi\Finance\COPdaily$rate comparison
#
~
I
.I ),
FAHR COMMITTEr
AGENDA REPORT
County Sanitation Districts of Orange County, California
FROM: Mike Peterman, Director of Human Resources
Originator: Patti Steeves, Human Resources Analyst
SUBJECT: EMPLOYMENT STATUS REPORT (FAHR98-27)
GENERAL MANAGER'S RECOMMENDATION
Receive and file the Employment Status Report.
SUMMARY
Total headcount at the Districts as of March 17, 1998 is 541.75.
PROJECT/CONTRACT COST SUMMARY
N/A
BUDGET IMPACT
D This item has been budgeted.
D This item has been budgeted, but there are insufficient funds.
D This item has not been budgeted.
~ Not applicable (information item)
ADDITIONAL INFORMATION
Meeting Date To Jt. Bds.
4/8/98
Item Number Item Number 3.
The Districts have a full-time equivalent (FTE) headcount of 541.75 as of March 17,
1998. The actual number of employees is 552. The current FTE count is equivalent to
a 3.2% reduction from the budgeted 559.75 positions.
There were no external hires or reassignments during the month of March.
ALTERNATIVES
None.
\lradonldata1M1p.dtallin\210\cranelFAHRIFAHR98\APRIFAHR98-27.doc
Revised: 1/5198 Page 1
CEQA FINDINGS
None.
ATTACHMENTS
1. March 17, 1998 Employment Status Report.
2. Performance to 5-Year Staffing Plan.
\lladonldata1'1Np.dta\lin\2101cnlne\FAHR\FAHR98\APR\FAHR9&-27.doc
RMed: 115198 Page2
·,ployment Status Report
Run Dale: 17-Mar-98
) R"flU/ar R"flu/ar Tola/ Vacant Posl1Jons
Reguw P11rt-Ume Put.Ume FTE ~ FTE FTE FTE FTE FTE wlfn 5 yr pllln
. Ful~me ZOhours 30hours Conlnl<=t Inion, LOA Count FY17•98 91-98 118-99 91M)O 00-01 01-C2 ~·
110 • General Management Ad min 4.00 0.00 0.00 0.00 0.00 0.00 4.00 2.00 6.00 5.50 5.50 5.50 5.50 1.50
Total General Management 4.00 0.00 0.00 0.00 0.00 0.00 4.00 2.00 6.00 5.50 5.50 5.50 5.50 1.50
210 • Finance Administration 4.00 o.oo 0.00 0.00 0.00 0.00 4.00 0.00 4.00 4.00 4.00 4.00 4.00 0.00
220 • Accounting 19.00 o.oo 0.00 0.00 0.00 0.00 19.00 0.00 19.00 18.00 17.50 16.00 14.50 ·1 .50
230 • Purchasing & Warehousing 12.00 1.00 0.00 0.00 0.00 2.00 15.00 1.00 16.00 16.00 15.00 15.00 15.00 0.00
-Total Finance 35.00 1.00 0.00 0.00 0.00 2.00 38.00 1.00 39.00 38.00 36.50 35.00 33.50 •1.50
310 -Communications 8.00 0.00 0.75 0.00 0.00 1.00 9.75 0.00 9.75 9.75 9.75 9.75 9.75 0.00
Total Communications 8.00 0.00 0.75 0.00 0.00 1.00 9.75 0 9.715 9.75 9.75 9.75 9.75 0.00
410 • General Services Admin 5.00 0.00 0.00 0.00 0.00 0.00 5.00 0.00 5.00 5.00 5.00 5.00 5.00 0.00
420 -Collection Facilities Mtce 15.50 0.00 0.00 0.00 0.00 1.00 16.50 2.00 18.50 18.50 18.50 18.50 18.50 2.00
430 -Plant Maintenance 39.50 0.00 0.00 0.00 0.00 0.00 39.50 0.00 39.50 3B.50 28.50 28.50 27.50 -11.00
Total General Services 60.00 0.00 0.00 0.00 0.00 1.00 61.00 2.00 63.00 62.00 52.00 52.00 51.00 -9.00
460 -End Users Support 9.00 0.00 0.00 0.00 0.00 0.00 9.00 0.00 9.00 11.00 12.00 12.00 12.00 3.00
470 -Program, Data Base & Comm 9.00 0.00 0.00 0.00 0.00 0.00 9.00 1.00 10.00 11 .00 13.00 13,00 13.00 4,00
490 -Plant Automation 8.00 0.00 0.00 0.00 0.00 0.00 8.00 0.00 8.00 8.00 8.00 8.00 8.00 0.00
~,
Total Information Technology 26.00 0.00 0.00 0.00 0.00 0.00 28.00 1.00 27.00 30.00 33.00 33.00 33.00 7.00
510 -Human Resources Admin 5.00 1.00 0.75 0.00 0.00 0.00 8.75 0.00 6.75 6.75 6.75 6.75 6.50 0.00
520 -Education & Training 3.00 0.00 0.75 0.00 0.00 0.00 3.75 2.25 6.00 6.00 6.00 6.00 5.00 2.25
530 -Safety & Emergency Response 5.00 0.00 0,00 0.00 a.so 0.00 5.sd 0.00 5.50 5.50 5.50 5.00 5.00 0.00
Total Human Resources 13.00 1.00 1.50 0.00 0.50 0.00 16.00 2.26 18.215 18.25 18.25 17.75 16.5 2.25
610 -Technical Services Admin 2.00 0.00 0.75 0.00 0.50 0.00 3.25 0.75 4.00 6.00 5.00 5.00 5.00 1.75
620 -Environmental Compliance & Mo 18.00 0.00 0.00 0.50 1.00 2.00 21.50 -0.25 21.25 21.50 18.50 18.50 18.50 -3.00
630 -Environmental Laboratory 31.00 1.50 0.00 o.oo 0.50 1.00 34.00 1.00 35.00 30.00 29.00 29.00 28.00 -5.00
640 -Source Control 35.00 0.00 0.75 0.00 0.00 1.00 36.75 2.00 38.75 36.75 35.75 34.75 33.75 -1.00
Total Technical Services 86.00 1.50 1.50 0.50 2.00 4.00 96.50 3.50 99.00 94.25 88.25 87.25 85.25 -7.25
710 -Engineering Administration 3.00 0.00 0.00 0,00 0.00 0.00 3.00 0.00 3.00 3.00 3.00 3.00 3.00 0.00
720 -Planning & Design Engineering 28.00 0.00 0.75 0.00 0.50 0.00 29.25 1.75 31.00 31.00 31.00 31.00 31 .00 1.75
730 -Construction Management 35.00 0.00 0.00 1.00 0.00 0.00 38.00 1.50 37.50 3B.00 37.00 37.00 37.00 1.00
Total Engineering 66.00 0.00 0.75 1.00 0.50 0.00 68.25 3.26 71.50 72.00 71.00 71.00 71.00 2.75
810 -0 & M Administration 2.00 0.00 0.00 0.00 0.00 0.00 2.00 0.00 2.00 2.00 2.00 2.00 2.00 0.00
820 -0 & M Process Support 9.00 0.00 0.00 0.25 1.00 0.00 10.25 1.00 11.25 10 25 9.25 8.25 8.25 -1.00
830 -Plant 1 Operations 35.00 0.00 0.00 0.00 0.00 2.00 37.00 0.00 37.00 37.00 35.00 35.00 35.00 -2.00
840 -Plant 2 Operations 43.00 0.00 0.00 0.00 0.00 0.00 43.00 -1.00 42.00 40.00 36.00 36.00 36.00 -7.00
850 -Mechanical Mtce 53.50 0.00 0.00 0.00 o.oo 0.00 53.50 1.00 54.50 50.50 47.50 46.50 44,50 -6.00
860 -Electrical & Instrumentation Mtce 57.50 0.00 0.00 0.00 o.oo 1.00 58.50 0.00 58.50 58.50 57.50 56.50 56.50 -1.00
870 -Cogeneration 11.00 0.00 0,00 0.00 0.00 0.00 11.00 2.00 13.00 13.00 13.00 13.00 13.00 2.00
880 -Air Quality & Special Projects 7.00 0.00 0.00 0.00 1.00 0.00 8.00 0.00 8.00 8.00 7.00 7.00 7.00 -1.00
Total Operations & Maintenance 218.00 0.00 0.00 0.25 2.00 3.00 223.25 3.00 226.25 219.25 207.25 204.25 202.25 -16.00
Total Staffing 1516.00( 3.501 4.501 1.761 6.001 11.00 641.76 18 659.76 649.00 , 621.50 616.50 607.76 -20.26
g:\excel dla\hr\51 0\sleeves\EMPDIV98
Performance to 5-Y ear Staff mg Plan
570 .....------------------------------------,
560 ·--------. ----·-----..
550
J
• . -.
540 I ./ .-:=...,., y .... • ·-. .. --• I ' ... ....
530 • ... ' • • .... ... ..
520 '•
..._ FfE Headcount _)
510 • 5 Year Staffmg Plan
500 -t--r-----,-~r--,---r-----,--.-,---.----r-r-+-----,-----.----.--r----.------.-------.-r---r---.-~_J
J A S O N D J F M A M J J A S O N D J F M A M J
I FY 97-98 I FY 98-99
•,1
' j
FAHR COMMITTEE
AGENDA REPORT
County Sanitation Districts of Orange County, california
FROM: Mike Peterman, Director of Human Resources
Originator: Lisa Lorey, Manager, Human Resources
Meeting Date
04/08/98
Iterrif,umber
SUBJECT: AMENDMENTS TO RESOLUTION 97-36 POLICIES AND
PROCEDURES -DEFERRED COMPENSATION PROVISION
(FAHR98-28)
GENERAL MANAGER'S RECOMMENDATION
Approve the attached Resolution that does the following:
1. Repeals the Deferred Compensation Program in its entirety.
2. Approves of salary range increases in the amounts necessary for the General
Manager to provide salary increases to those individuals in an amount exactly
equal to the amounts previously paid by the Districts to those individuals
through the Deferred Compensation Program.
3. Ensures that any former employees who terminated employment prior to the
vesting of the deferred contribution, with the resulting forfeiture of those sums
back to the Districts, would not be entitled to now receive those sums.
SUMMARY
To be able to make deferred compensation contributions included as
compensable earnings toward the OCERS retirement benefit calculation, staff
recommends rescinding the Deferred Compensation Program, which includes
matching and non-matching compensation to the employee's deferred
compensation account.
A full report from General Counsel to the Joint Chairman and the members of the
Finance, Administration and Human Resources Committee is attached and
explains the reasons why this action is necessary.
PROJECT/CONTRACT COST SUMMARY
None
\lradonldata1 M!).dlallin\210'c:rane\FAHRIFAHR98\APRIFAHR96-28.doc
Reonsed: 115198 Page 1
ToJt. Bds.
04/22/98
Item Number
BUDGET IMPACT
D This item has been budgeted. D This item has been budgeted, but there are insufficient funds.
D This item has not been budgeted.
C8;1 Not applicable
ADDITIONAL INFORMATION
N/A
ALTERNATIVES
See attached Report from General Counsel dated April 1, 1998.
CEQA FINDINGS
N/A
ATTACHMENTS
1. Resolution amending Resolution No. 97-36
2. Revised Salary Schedule
3. Report from General Counsel dated April 1, 1998.
4. Letter (Facsimile) from OCERS Attorney dated March 24, 1998
\lradonldata1\Np.dta\lin\210lcrane\FAHRIFAHR98\APRIFAHR98-28.doc
Revised: 115A18
"
Page2
RESOLUTION NO. 98-_
REPEALING RESOLUTION NO. 95-81 (DEFERRED
COMPENSATION PROGRAM)
AMENDING RESOLUTION NO. 97-36 (HUMAN
RESOURCES POLICIES AND PROCEDURES)
A JOINT RESOLUTION OF THE BOARDS OF DIRECTORS
OF COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6,
7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA,
REPEALING RESOLUTION NO. 95-81 RE AMENDED
DEFERRED COMPENSATION PROGRAM FOR
EXECUTIVE MANAGEMENT GROUP EMPLOYEES AND
MANAGEMENT, PROFESSIONAL SUPERVISORY
EMPLOYEES, AND AMENDING RESOLUTION NO. 96-36
AMENDING THE DISTRICTS' HUMAN RESOURCES
POLICIES AND PROCEDURES MANUAL
•••••••••••••••••••••
The Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11,
13 and 14 of Orange County, California, do hereby FIND and DETERMINE:
A In conjunction with Districts' Deferred Compensation Plan, the Districts,
by Resolutions Nos. 76-19, 84-132, 86-29, 87-113, and 95-81, adopted by the Boards
of Directors on January 14, 1976, July 11, 1984, February 13, 1986, August 8, 1987,
and July 26, 1995, respectively, have previously approved, a Deferred Compensation
Program (the "Program") as a portion of their employees' comprehensive compensation
package of benefits, with specific financial compensation contributions to the credit of
the individual deferred compensation accounts of employees within the Executive
Management, Management, Professional and Supervisory Employees of Districts; and,
2092-700
60902_1 1
B. Districts' adopted Program providing for the payment to individual
employees on a matching and non-matching basis, has, at all times, been determined
by Districts to be a component part of the total compensation earnable and paid to
those eligible Districts' employees; and,
C. At all times since the adoption of the Program, Districts have, for
accounting and payroll purposes, added the matching and non-matching funds payable
to the individual employee's deferred compensation account to the base salary of the
employee, and thereafter, deducted the matching and non-matching funds from the
individual's bi-weekly payroll; and,
D. In accordance with Districts' determination, Districts have, at all times,
reported the amount of contributions made by Districts, including both matching and
non-matching funds ("matching and non-matching funds"), to the Orange County
Employees Retirement System ("OCERS"), and have paid to OCERS the full amount of
all required employer and employee retirement fund contributions, which funds have
been recognized and accepted by OCERS resulting in a fully-funded status for all
compensation amounts reported; and,
E. A decision of the California Supreme Court in the case of Ventura County
Deputy Sheriffs' Assn. v. Board of Retirement, has ruled that in the absence of specific
statutory authorization within the County Employees Retirement Law of 1937 ("CERL"},
California Government Code Sections 31450 et seq., contributions by an employer
member agency to an individual employee's Deferred Compensation Plan Account are
not to be included in the amount of compensation upon which retirement benefits shall
2092-700
60902_1 2
be determined for retired employees; and,
F. The Board of Retirement of OCERS has determined that Districts have
deducted from the employee's/member's wages the amounts contributed to the
employee per the Program thus can be considered remuneration paid in cash, and
therefore compensation as defined in CERL. However, the Board of Retirement of
OCERS has also determined that Districts' contribution to the employee's deferred
compensation account is made solely because of an employee election to defer
payment of said compensation, and the employee has no discretion to obtain and
utilize those funds for other individual purposes, thus failing to meet the requirements
of CERL, as set forth by the California Supreme Court; and,
G. The Boards of Directors have determined that they do not wish to cause a
financial loss to any Districts' employee, whether retired, or active, by removing or
diminishing any amounts of compensation or benefits to which the retiree or employee
has obtained a vested right and interest; and,
H. The Boards of Directors have determined that to avoid possible legal
challenges, the interests of Districts and their employees can be protected without loss
to the employee or cost to Districts by terminating the existing Program and substituting
therefor the payment to the employees of the same amount of money that had been
paid to them pursuant to the Program by means of increasing the base salary and
allowing for voluntary determination by the individual employee of the amount the
employee wishes to defer; and,
2092-700
60902_1 3
I. All amounts paid to current individual employees as "Districts' Matching
Funds Contributions" or "Districts Non-Matching Funds Contributions" at any time since
the inception of the Program to the present date are determined and reaffirmed as
being a part of total compensation earnable by the individual employee, with the
intention that said amounts would be included in the total compensation upon which
retirement benefits for the employees would be determined.
NOW, THEREFORE, the Boards of Directors of County Sanitation Districts Nos.
1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California,
DO HEREBY DETERMINE, RESOLVE AND ORDER:
Section 1: Resolution No. 95-81 establishing the Amended Deferred
Compensation Program for Executive Management Group Employees and
Management, Professional and Supervisory Employees, is hereby repealed.
Section 2: Resolution No. 97-36 re Human Resources Policies and
Procedures is hereby amended by amending Policy No. C150.00 as follows:
"Policy No. C150.00 is hereby amended by repealing
Section 7.1 ".
Section 3: Resolution No. 97-36 re Human Resources Policies and
Procedures is hereby amended by amending Policy No. C10.00 as follows:
2092-700
60902_1
Policy No. C10.00 is hereby amended to read:
"Section 4.8 is added to read:
"Section 4.8. The established salary ranges set forth on
Exhibit A for Executive Management, Management,
4
Supervisory and Professional Employees shall be adjusted
and increased by a percentage equal to the actual amounts
contributed by Districts to individual employees in each of
those classifications, as of the date of this Resolution, as
matching and non-matching portions of deferred
compensation pursuant to the adopted Deferred
Compensation Program, which Program is concurrently
being repealed by this Resolution. This amendment is
necessary to comply with the decision of the California
Supreme Court and the Board of Retirement of Orange
County Retirement System to discontinue the allowing of the
deferred compensation amounts contributed by employers
to be reported as compensation earnable for retirement
purposes. The adjusted ranges set forth on amended
Exhibit "A" insure that all employees within the classification
are authorized to receive pay in the same total amounts as
presently provided."
Section 4: Resolution No. 97-36 re Human Resources Policies and
Procedures is hereby amended by substituting Exhibit "A" dated April 22, 1998 and is
hereby approved.
Section 5: From and after the date of adoption of this Resolution, all salary
paid in accordance with the increases provided for herein to individuals in the
2092-700
60902_1 5
Executive Management Group, Management, Supervisory and Professional
Employees, shall vest upon payment. All amounts described in Resolution No. 95-81,
as "Districts' Matching Funds Contributions", or "Districts' Non-Matching Funds
Contributions", that have been previously deposited into the respective individual's
deferred compensation account of current employees of Districts, shall be deemed
vested as of the date of adoption of this Resolution. Nothing in this Resolution shall be
deemed to reinstate "Districts' Matching Funds Contributions" or "Districts' Non-
Matching Funds Contributions" of former employees of Districts whose unvested
deferred compensation account benefits contributed by Districts were forfeited on
termination of employment with Districts.
2092-700
60902_1
PASSED AND ADOPTED at a regular meeting held April 22, 1998.
6
'
ds111n;e
<412198
Pay
Range
1027
1012
1012
Minimum
3,443
3,150
3,150
Classifications By Pay Range
Confidential
Maximum Classifications
4,286 Executive Assistant II
3,922 Executive Assistant i
3,922 Human Resources Assistant
dsnmge
<1/21118
Classifications By Pay Range
Professional
Pay
Range Minimum Maximum Classifications
E11 4,769 7,017 Engineer
E9 4,32B 6,495 Principal Administrative Analyst
E9 4,32B 6,495 Principal Engineering Associate
E9 4,32B 6,495 Project Specialist
E9 4,32B 6,495 Regulatory Specialist
E9 4,32B 6,495 Scientist
EB 4,116 6,057 Associate Engineer Ill
EB 4,116 6,057 Principal Environmental Specialist
E7 3,925 5,776 Programmer Analyst
E7 3,925 5,776 Computer Hardware Specialist
E7 3,925 5,776 Telecommunications Specialist
E6 3,735 5,441 Senior Human Resources Analyst
E6 3,735 5,441 Principal Laboratory & Research Analyst
E6 3,735 5,441 Senior Administrative Analyst
E5 3,559 5,235 Associate Engineer II
E5 3,559 5,235 Senior Accountant
ES 3,559 5,235 Senior Financial Analyst
E4 3,390 4,993 Safety Representative
E4 3,390 4,993 Programmer
E4 3,390 4,993 Senior Buyer
E3 3,225 4,704 Associate Engineer I
E2 3,077 4,4B1 Human Resources Analyst
E1 2,923 4,272 Accountant
E1 2,923 4,272 Buyer
E1 2,923 4,272 Financial Analyst
E1 2,923 4,272 Management Analyst
clsrange
4/2198
Classifications By Pay Range
Supervisory
Pay
Range Minimum Maximum Classifications
E14 5,517 8,120 Engineering Supervisor
E13 5,262 7,740 Environmental Management Supervisor
E13 5,262 7,740 Senior Engineer
E12 5,013 7,376 Compliance Supervisor
E12 5,013 7,376 Laboratory Supervisor
E12 5,013 7,376 Senior Scientist
E11 4,769 7,017 Senior Operations Supervisor
E11 4,769 7,017 Information Technology Supervisor
E9 4,328 6,754 Maintenance Supervisor
E9 4,328 6,754 Operations Supervisor
E9 4,328 6,754 Principal Accountant
E9 4,328 6,754 Principal Financial Analyst
E9 4,328 6,754 Source Control Supervisor
E9 4,328 6,754 Supervising Construction Inspector
EB 4,116 6,057 Training Supervisor
E7 3,925 5,776 Foreman
E7 3,925 5,776 Maintenance Planner
E7 3,925 5,776 Contracts & Purchasing Supervisor
E5 3,559 5,235 Supervising Source Control Inspector
E4 3,390 4,993 Warehouse Supervisor
clsrange
412/98
Classifications By Pay Range
Management
Pay
Range Minimum Maximum Classifications
E16 6,090 8,953 Construction Manager
E16 6,090 8,953 Engineering Manager
E16 6,090 8,953 Environmental Compliance & Monitoring Manager
E16 6,090 8,953 Laboratory Manager
E16 6,090 8,953 Source Control Manager
E15 5,798 8,529 Controller
E15 5,798 8,529 Financial Manager
E15 5,798 8,529 Plant Automation Manager
E14 5,517 8,120 Chief Scientist
E13 5,262 7,740 Accounting Manager
E13 5,262 7,740 Chief Operator
E13 5,262 7,740 Safety/Emergency Response Manager
E12 5,013 7,376 Maintenance Manager
E12 5,013 7,376 Operations Manager
E12 5,013 7,376 Contracts & Purchasing Manager
E12 5,013 7,376 Senior Regulatory Specialist
E10 4,535 6,681 Secretary to the Boards of Directors
E10 4,535 6,681 Training Manager
E9 4,328 6,495 Human Resources Manager
LAW OFFICES OF
WOODRUFF, SPRADLIN & SM~
A PROFESSIONAL CoRPORATlON
TO:
FROM:
DATE:
RE:
MEMORANDUM
Joint Chairman and Members of Finance,
Administration and Human Resources Committee
General Counsel
April 1, 1998
Status Report and Recommendation re
Deferred Compensation Program
As you are aware, your Management and this Office have been reporting to you over the past
several months about both management and legal issues that have arisen as a result of the decision
by the California Supreme Court in the case of Ventura County Deputy Sheriffs' Assn. v. Board of
Retirement of Ventura County Employees Retirement Association. Attached hereto is my detailed
Memorandum to your Committee dated January 13, 1998, which, in virtually all respects, remains
unchanged. The discussion that follows herein addresses the three enumerated options, as well as
a fourth and recommended option.
During the past three months, we have been working with the Staff at OCERS, together with
their Special Legal Counsel, Mr. Harvey L. Leiderman, in an effort to bring a resolution of this that
would satisfy both the Districts' existing Program requirements, the legal requirements as set forth
in Ventura, and the policy directions from your Committee and the Boards of Directors.
There are three basic categories of District employees who are impacted by this decision and
changes that are being implemented by OCERS-namely:
1. Retired employees;
2. Active employees who have participated in the Program; and
3. Future employees.
The Staff and Special Counsel for OCERS are acutely aware of the differing issues that
apply to each of these groups of employees, and I would indicate to you that the actions to date by
the Board of Retirement and their Special Counsel and Staff have been extremely cooperative in
trying to design a methodology, in conjunction with my office, to insure that no individual is financially
harmed, that the Districts do not incur a financial loss, and that both OCERS and the Districts are
legally protected and in compliance with the requirements of law. As noted below, I believe they
have submitted options that accomplish all three of these objectives.
Joint Chairman and Members of Finance,
Administration and Human Resources Committee
April 1, 1998
Page2
SUMMARY AND RECOMMENDATION
The recommendation of the General Manager and the undersigned is that the Districts adopt
a Resolution that does the following:
1. Repeals the Deferred Compensation Program in its entirety.
2. Approves of salary range increases in the amounts necessary for the General
Manager to provide salary increases to those individuals in an amount exactly equal to the amounts
previously paid by the Districts to those individuals through the Deferred Compensation Program.
3. Insures that the Districts' contributions on behalf of any former employees who
terminated employment prior to the vesting of the deferred contribution, with the resulting forfeiture
of those sums back to the Districts, would not be entitled to now receive those sums.
DISCUSSION
Re Retired Employees
OCERS is taking the position that insofar as all employees who have retired and who in fact
retire prior to July 1, 1998, will continue to have their retirement benefits calculated on the total
amount of compensation previously reported to OCERS and funded by payment of both the
employer's and employee's shares. They simply deem this to be a fair and equitable determination,
and there is no loss to OCERS, since these amounts have been fully funded, and there will be no
cost to the Districts or their employees.
They are willing to have this determination apply to any employees who retire prior to July
1, 1998, thus insuring that any individuals in that category would not have their anticipated benefits
reduced as a result of deducting the deferred compensation contributions.
Re Active Employees
Provided, that the Districts adopt a Resolution establishing a new base compensation
amount for the individual employees equal to the prior combined amounts of base salary plus
employer matching and non-matching deferred compensation contributions, OCERS will, for legal
and administrative purposes, consider that all sums that have been previously paid as deferred
compensation, and reported to OCERS with the required employer's and employee's share of
contributions be deemed to be ordinary salary compensation, thus insuring that the individual
employees will not have their anticipated retirement benefits reduced by a reduction in the value of
their total compensation.
Upon adoption of a Resolution adjusting the salary ranges for the active employees, the
existing level of total compensation will remain unchanged from the perspective of OCERS'
retirement benefit calculations.
Joint Chairman and Members of Finance,
Administration and Human Resources Committee
April 1, 1998
Page 3
Re Future Employees
By repealing the existing Resolution authorizing a deferred compensation program, there will
be no employer or matching or non-matching contributions available, and thus no program benefit
for new employees. It will simply reside with Management to make a determination as to the specific
salary level to be offered and provided to new employees, taking into consideration that existing
employees' rates are being adjusted upwards to compensate for the loss of the employer matching
and non-matching contributions.
RECOMMENDATION
By separate Memorandum, the policy issue regarding the resolution of this issue is being
made by your General Manager, and this opinion makes no recommendation re the policy. Provided
that the recommendation is accepted and approved, it is the recommendation of this office that the
Boards adopt the Resolution that is included herewith, which is, in effect, an Option No. 4 (as
distinguished from the three set forth in the January 13, 1998 Memorandum). That Option being to
repeal the Deferred Compensation Program in its entirety, and simply substitute an adjusted increase
in base salary for the existing amounts that have been paid as "Employer Matching or Employer Non-
Matching Deferred Compensation Contributions". This does eliminate all vesting, which is part of
the policy issue being addressed by the General Manager, but it does avoid any potential legal
challenge of a contractual breach between the Districts and groups of their employees, or wrongfully
taking away vested rights of employees in the form of actual dollars contributed and anticipated
retirement benefit proceeds.
TLW:pj
cc: Mr. D.F. McIntyre
Mr. B.P. Anderson
Mr. G.G. Streed
THOMAS L. WOODRUFF
GENERAL COUNSEL
)
APR-01-1998 15:53 WOODRUFF SPRADLIN & SMART
STEEFEL
LEVITT
&WEISS
714 835 7787 P.11/12
ONE m.tBARCADER.O CBNTBR • 301ll FLOOR· SAN FRANCISCO, CA 94111-3784
Tel~ 4151788--0900 • ~: 415nBB-2019
By Eacsimile and Mail
Thomas L. WOQdruff, Esq.
Danie 1. Spence, F.sq.
Woodruff, Spradlin & Smart
701 S. Parker Street, Suite 7000
Orange, California 928684720
March 24. 1998
Re: Ap_plication of Resolution 98-001 to Sanitation District
Dear Mr. Woodruff and Ms. Spence:
This letter responds to your request for a determination of the treatment of
certain nsupplcmental salary" payments to Orange County Sanitation District C;District")
employees under the terms of Resolution 98-001, ~opted by the Board of Retirement of the
Orange County Employees Retirement System ("OCERSn). Specifically, you ask whether
the subject payments will be inclUded as "compensation" and ncompensation earn.able" for
purposes of calculating an employee's "final compensation'' on which retirement benefits are
based.
Our analysis is based on the following facts that you have represented to us:
1. The "supplemental salary" payments in question are shown on the
employee's pay stub as having been added to base salary and simultaneously deducted from
base salary and transferred into a. Deferred Compensation Trust Fund established by the
District for the benefit of its employees.
2. The payments in question are never made available to the employee at .
the time that they are "paid" to him or her; that is. no employee may elect to take the
payments in cash rather than have the money paid into the Deferred Compensation Trust
Fund.
3. No other payments, from either employee or employer, are made into
the Deferred Compensation Trust Fund.
APR-01-19913 15:54 WOODRIJFF SPRADLIN & SMART ?14 835 7787 P.12/12
Thomas Woodlul'f, Bsq.
Danie Spenoe, Esq.
Man::h 24, 1998
P.-ge-2
STEEFRI...
LEVITT
&WEISS
11. The "~pplewental salary'' payments a1-e iwl taxable income tn the
employee.
1" 5. Since at lca&t lWM>, the DimicL has p:ild. OVC( to UCF.RS awoum
rcpre.scntim!: both employer anrl ewployee retirement contributious uu lhe "supplerncntal
sawy· J.'llymenls in qu.~1ion, and OCEKS MS lx-co ireating the p11ymcnt.s ~s qualffyi.ng
•UJITipensatlon• :md "comr,el'lSation eMmable" for rctin::ment ht:nefil purposes.
6. Since litbrnaL}' 6, 1998 and the Board ofRetirelllClll's adoption of
Resolution No. 98-001, 11.: District bas been "impounding" the "61JPPlcmental 1111lary"
payJl.112lts, awaiting OCE.RS' defcmlinaliun as to how to proceed..
As we have dir.c:ussed at leDRth, Ycg1nm County -~eriffs' Asi.n. v. Bo11.td_Qf
Rsttr@m;nt {(1997) IG Cll.l. 41.h '183). by it! explicit lailg~e, has adopted 11. "rcmictive
deflniLiun" of "compensation" (as ,et for:1.h in Govet'IllmU Cod.c ~tinn 31460) that does not
lnclndc employer c:olllri'butions to dcfeaed compe11sation pbi..w. Venrui:a at 494. The
11atu1ory cJefurlUon of "compematioa" :ii.1.1:ording to Ymwm "rccngnitt:s tl.aL bUI for the
employee's election ro Ji:fm-paymem of wages, {defeuw cumpensadon deduction~J would be
"'1l1Unenilo.n paid .in c,uh' 115 part of 11.K: ~mployee's rcptar wage,;• (emJJW1$is added).
~ contim,es, "[t]bat cannot be ~d of a cnunty contriool.iun to 311 employee's detcm-sl
COJ11pt:1L'll!lion plan." Similllrly, .u:ct1rdwg Lr,) lhe plan document!l ynu h,ive sup~li~ tu us,
and as claritial hy our disi:u."iOD&, Ule snmc is true of the Diiilrict's "supPlementa.l salary"
~-ll~ employee cannot elect to ft.C.Cive tl.11:: ''liUlJP!emeDml sal.aiy" a., Midi1ioual wa~ in
lieu of the paymcnf targc:ltld for the Deferred. l.!omrensation T1wl Fund).
It i" importmL to note as well lbat even though :i;upplememal &3laly may h11~
h-P.u "~ to" gatmy for payroll acc.ow:itiug purposes. llJld tbcn dtduotr.d frum salary, that
accourwne proccdun: is .uul uisposltivo Of the i911UC. Chara.ctel'i.:t.i.ag the money 8S "salary"
wm not dlc~ il.6 tre:nment for retirement law pl.lJl)OlleS. ~ ffurtRnn v. Uoani of
Adminimation of PF.RS (1997) S9 Cal. App. 4th 131U (rtating 111111 even when waees arc
•nominally ...-.haracterv.ed as st\lQry, that ~ouJd JlOl ... end lbe inquiry').
It app~ lh:lt until tbc Supreme Court•~ claritic2tion of epf1lici1ble law iu
V~.1JIJ.a'.&, tbe sub&eQ.uent Hud,on ca,e aw.l OCBRS' RcsoJution 9.R-001, the District made
employer and cn1pluyee comributions to OCilRS 011 "i11.1Pl)lememal ealary" paymews..
Further, up until now OCliRS has included "supplement.Al ~1ary• iu "cumpenwion
eam:ibJe• fnr retiring Dwtrict CDIPloy~ who ra:eivl:11 the paymems.
TOTAL P.12
APR--01-1998 15:59
Thoims Woodruff. Esq.
Danie Spepce, Esq.
M:m:h 14, 1 ~8
Page 3
WCIJDRUFF SPRADLIN & SMART 714 835 7787 P.01/02
STEErF.L
LEVIIT
&. wmss
The qw:sdon, then., ~ 1»:.w .W")uld OCERS now trea.t. •~upplement,111 R111acy"
payments for ~ who ha\'C received It In the pail and may receive it in the tuture? The:
fnllnwil>g WOUid be OUI rewunueudati.om tn the Holltd of Retirement:
EmJloyeec who RI.ire 1-r.tnrc Julx 1. 1998: RaioluLi.uu 98..001 will he
implemenn:u wi or 11hnut July 1, 191)8, tetro111,:live to Octobr.r I. 19'17. For lboee empluyc:I."$
who had rctiff:d before ~. they bec:Jimc vested in their specific bar.fits upon
nnmuent. E.mplnyoc., n:tirini since Ve1111n bu.t be.fore JuJy 1. l?'JS Will !law~ for a
long time on recelvln,q ~lirr.weot credit tor their •aupplement:J .. itlary" and w,n have fully
paw for the hcncttt. We believe it fair ual appropriate to trclll: these employees the i;aor. ""'
those retiring pre--Vc:uwl'a and we would recommend there bl.'! JllJ change in the trcatmeru of
"suppk:mcnt;il 11alary" u additional "COIIIJ.llmliatiori.• and ~compcnsotion eamabh::" fo( these
retirees.
EmplQ)'eg hiIM iiftcr Pcbmm 6, 199&: Wich rt:gard tn employees whom the
District hire., t'rom the d.ate Resolution 98-001 wa~ a.doplcd (February 6, 1998) furward, no
contribut1om should be .llladc tll UCERS attributable to •ijupple.Ulental silhny" payments :ind
such Pllymcnl5 will oo longer be incluJt:J ln the emplnyccg' ''comperu;ation" and
•compcnsatiuu earnable".
EruployeP.~ retiring oftcr July I. 1998: .Employees who were hired before
Fchruuy 6. 1998. but will DOl Rt.in: before July 1, 1 ~J8, olready ha\le IDllde c:unuib11ticm~ to
OCBRS bii~c:d in part on t'hcir "supplemenrat salary", as baH the Pimict. Tllcy will not be
entitled rn .ba.ve "supplemental s:aluy• wduded in their rctircmem llendia.. As 10 cbe
contributiom Lu the retirement system previously made, OCERS could .11dnpt one of the
following approucbes:
1. OCERS could refund the contriblltions to both tJie c:wployec aDit
~pfoyer tb11t it received baecd on me IIDJJloy~•s :tiupplemcntal ~111ary.
2. OCBRS could retaiD the ewployce'io; "ciceM" contributiom anributed tu
the "supplcmentlll ~y•. crmiting the cxa:ss lO the employee'i; Manbe1' Contribution
Ar.c.(llmt. Since it is likely tb:lt OCERS will him: to begin c.oUr.r.ring increased contn'butioru:
from all active# crupluyc:e$ to help p.11y the cnst of the new Vemura benefits, i.br. "t:.J r.t:s~•
c(ll'ltnlmtjonq made by District employees could be: IIPl:-'lil'JI 110 •~ to mitigate the expected
Increased '-Vntribul.i.011 rarci;. OC.::liR8 would refimd the employer·~ c:uuuibution.
3. Or.F.RS cnuld treG1 lbe "exceu" comn"butium llli "voluntary
contribution&" J)Ul'Ruant to Gove:rwne.nr C'.odc Sccti.on 3lfll7, thereby lncreasiD,g =ipluy1:1:
bencfm beyond that allowed by options (1) mu (2), above, (buf lt:11.'I t.han under tb.e previous
I
I
APR---01-1998 16=00
Tho~ Woodruff, Esq.
Danie Spence, &q.
March 24, 199R
Page 4
WOODRUFF SPRADLIN & SMART 714 835 7787
STEBFBL
LHVfIT
&WEISS
U"Catmc:nt). Under this approach, I.ht. employee woU¥1 n111.:1:i~ 11. fa~cr retirement betrfi1
than is olberWlse i.va.ilablc, albeit not as laq\,c: u was 1111ticipD.ted pre-Vnlior.1. QCERS
would .refund the employer's cu.ntributinn.
Bcaides actfon thlll OCF.RS couki Ullre, Uu: other ~ltcmative wOllld l,t:. fur the
District to actmlly i.nc:TUSC all affected rmployccs' llftlaries by the anwwit that tw been
pn:vicm~ly chattcterlzed :.u; •snpplemcntal salary," and 111aint.11in cont.noutloll6 .it 11.i~ pre-
YeJ\Olr.l l~vc:1. Under ttti.a option, employees electing to pi1Jticip11lc: in the ncterred
Comp('.mation·Trust Fund wouM receive the benefil.8 they ant,eipn.ted and no furllier change
in thelr bexdit calc.ulations would~ n:quittd.
The Oistru;t should co.ult with its own Wt advilion before mnkin& a
detcnnining boW It willlu:s to proceed in this matter.
We I.rust ttw; re.,ponds to yotJr inquiry. Please advise as how 10th/! Di!ltrict
wii.b:s to proca:d with rei:2,ld to active crnploycca who will uot .1Ctire hcfore July 1, 1998 so
that we Dll!Y advuie ~ Bo.1n:I of R.ctircmem.
cc: Raymond A. Flc:uiliig, Administmtor
Tim Marnell
Robin M. Scbacbttt, E.,q,
Harvey L. Le.ldennan, Esq.
[JJ071.C0dJJlffll
Very tmly youn,
P.02/02
TOTAL P.02
l'
"
J
FAHR COMMITTEE Meeting Date
04/08/98
AGENDA REPORT Item Number s-:
County Sanitation Districts of Orange County, California
FROM: Gary Streed, Director of Finance
SUBJECT: SEWER SERVICE USER FEE STATUS REPORT (FAHR98-29)
GENERAL MANAGER'S RECOMMENDATION
Receive and file Sewer Service User Fee Status Report.
SUMMARY
At the last Committee meeting, the Directors discussed the proposed changes to
the sewer service user fee structure based upon the Rate Advisory Committee
(RAC) input to the Strategic Plan.
The purpose of this status report is to update the Committee members with
answers to some of their earlier concerns, issues that have surfaced since the
meeting, and plans for the future.
No formal action is requested at this time.
PROJECT/CONTRACT COST SUMMARY
N/A
BUDGET IMPACT
D This item has been budgeted.
D This item has been budgeted, but there are insufficient funds.
D This item has not been budgeted.
[gl Not applicable (information item)
ADDITIONAL INFORMATION
At the March FAHR Committee Meeting, the Directors reviewed the revised
results of a proposed sewer service user fee structure. Staff reported that rates
could be reduced for the Single-Family Residential (SFR) category in most
\lradonldala1wp.dtalfin\210\crane\FAHRIFAHR98\APRIFAHR98-29.doc
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ToJt. Bds.
Item Number
Districts, as a result of changing the relationship between SFR flow and flow for
Multi-Family Residential (MFR) units from 60% to 70% per unit, and increasing
the number of non-residential categories while basing their charges on average
flow and strength per 1,000 square feet. Both changes bring the charges closer
to actual use.
A continuing question from the Directors has been, 'What is the impact on an
individual business?" As promised, staff has prepared a report by District, by
property use code, and finally by assessor's parcel number, that shows the
annual change in fees. Because this report is 1,488 pages long, with 20-25
parcels on each page, it has not been included. However, it will be available at
the meeting and copies can be prepared for those Directors who so request.
We have researched the issue of grease traps and interceptors for restaurants,
with the intent of passing along our savings from reduced grease removal costs.
We have found that grease removal processes are not currently required
throughout the service area. The County of Orange did require diversion in the
past, but has discontinued the requirement for health related issues. However,
accumulated grease can be sold by restaurants to commercial processors. One
such processor has estimated that 80% of the County's 5,000 restaurants do this.
Unfortunately, there is no official inspection or monitoring process. Generally,
inspection occurs only after a local sewer blockage or other event raises the
issue. Since there is no universal enforcement, the devices that are installed
may not be operating properly. If the Committee would like to pursue this, we
could evaluate a rate reduction program that is based upon some documentation
from the user of the amount of grease that is diverted, and an estimate of the
sewer cleaning savings.
Staff attempted to attend a meeting of the Western Car Wash Association, that
was reported to deal with waste disposal, but were rebuffed by the organizer.
The sewer service fee rate for a car wash is based upon an average daily flow of
3,700 gallons per day, per 1,000 square feet. Recycling is assumed to reduce
the average discharge to 2,700 gallons. Data collected by staff indicates a range
of reduction from 71 % to 80%. Staff will propose a rate for car washes that
recycle which is 75% of the regular rate. We will notify the Western Car Wash
Association separately, and will include this feature in our notice. It will be the
user's responsibility to provide documentation to the Districts.
A feature of the Districts' revenue program, adopted in conformance with the
Federal Clean Water Act, is the ability to issue permits to specific types of users.
The Drrectors are well aware of the Class I and Class II permits issued to
industrial and commercial users who discharge high quantities or high-strength
waste. The Technical Services Department and Source Control Division have
reported routinely to the Board of Directors. Another class of users, Class Ill,
was also defined. These users essentially discharge residential or domestic
strength waste, but in quantities greater than the average. This category of users
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R.-...ed: 115198 Page2
,;
was certainly necessary before sanitary sewer service fees were adopted in each
District and was still needed when there was only one non-residential rate per
1 , 000 square feet.
Today, there are approximately 200 Class Ill permittees, consisting of
restaurants, laundromats, hotels/motels, postal offices, mobile home parks, etc.
Of course, with only 200 permittees, not all of the users in any category are
permitted. The total fees generated in 1996-97 for these users was nearly
$600,000. This is an average of $3,000 per permit. There are at least four
points of significance:
1 . With the adoption of a revised rate structure, the fees for the types of users
currently under Class Ill permit will increase per 1,000 square feet.
2. The average projected annual increase for a restaurant based on the new
structure is just over $2,000.
3. Previous discussions with the Committee that focused on the 739% proposed
rate increase for restaurants, did not include the Class Ill fees already paid.
4. There is probably no need to continue the Class Ill permit process after the
expanded and more accurate rate structure is adopted. This will simplify the
billing and payment process for these 200 users.
Staff recommends creation of another user category to be called "Mixed Use."
This category would be made up of users like shopping centers and strip malls
whose use is significantly different from the average. The rates and fees would
be calculated on the basis of the tenant mix within the center. That is, the square
footage and rate for each actual tenant would be added to compute the total
charge. A center with more than one restaurant, or with a car wash, could fall
into this category, for example. The parameters for this class are still being
developed and may include some minimum flow or charge.
Analysis of the proposed changes has revealed a potential problem in our current
billing system. Non-residential parcels are selected for fees based upon the size
of the developed area. Parcels that indicate "no improvements" are excluded
from the billing process. In 1997-98, there were 39,946 parcels of the District-
wide 505,061 that showed no improvements, or approximately 8%. The ''wholly
exempt" property type is for parcels that are exempt from property ta>ces. These
parcels include schools, churches, and publicly owned uses. There were 5,064
out of 5,469 "wholly exempt" parcels with no improvements. This is not
surprising, as the Assessor's Office does not need improvements for these
parcels as no assessed value is calculated. Unfortunately, the result is that
many governmental facilities are not currently being charged for sewer service
fees in accordance with our Ordinance. Staff has started to identify these parcels
H:lwp.dlaVin\210\cnlnelFAHRIFAHR98\APR\FAHR98-29.doc
RIIYised: 115198 Page3
and will be placing appropriate fees in the files. This action will generate tax bills
for many civic facilities that currently receive no tax bill.
Finally, one of our citizens from Garden Grove has recently raised the additional
issue of rates for MFR and mobile homes. He reports to have population data
that indicates that MFR rates should be greater than 70% of the SFR rate and
closer to 90%. He also reports population data that shows mobile home rates
should be closer to 50% of SFR. The proposed structure would treat MFR and
mobile homes the same, and use a rate equivalent to 70% of the SFR rate.
Currently the rate is 60%. Staff will be meeting with the citizen and with our
consultants to resolve these discrepancies.
ALTERNATIVES
N/A
CEQA FINDINGS
N/A
ATTACHMENTS
1 . Summary Comparison of Rate Structures
2. Property Use Category Proposal Comparison
GGS:lc
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..
4/2/98 Page 1
Summary Comparison of Rate Structures
Annual Sewer Service User Fees
Adopted Adjusted
Dist Rate Rate Adoi:1ted Fee "Adjusted" Fee Increase (Deer) No Parcels No Units No Sg Feet No Bldgs
S F Residential
District 1 91 .36 87.50 2,479,810 2,375,037 (104,773) 27,143
District 2 73.00 71 .00 8,459,640 8,227,868 (231,772) 115,885
District 3 75.00 71.50 11,393,018 10,861,343 (531,675) 151,907
District 5 96.75 84.50 1,409,788 1,231,288 (178,500) 14,571
District 6 78.00 71.00 1,495,303 1,361,109 (134,194) 19,171
District 7 55.00 51 .25 1,863,084 1,736,055 (127,028) 33,874
District 11 70.00 70.00 2,177,709 2,177,709 (0) 31,110
District 13 100.00 100.00 665,230 665,230 {O) 6,652
Total SFR 29,943,582 28,635,639 {1 ,307,9432 400,314
M F Residential (a).60% (a). 70%
District 1 54.82 61.25 931,132 1,032,246 101,115 3,758 15,045
District 2 43.80 49.70 2,820,610 3,142,467 321,857 11,653 59,471
District 3 45.00 50.05 3,258,202 3,628,468 370,266 10,439 69,650
District 5 58.05 59 .15 556,025 578,901 22,876 3,411 8,195
District 6 46 .80 49.70 857,395 918,577 61,182 2,894 17,540
District 7 33.00 35.88 595,922 644,100 48,178 2,081 17,477
District 11 42.00 49.00 546,125 633,619 87,494 2,740 12,493
District 13 60.00 70.00 63,180 73,654 10,474 48 1 049
Total MFR 9,628,590 10,652,031 1,023,441 37,024 200,920 0.00 0.00
Commercial
District 1 2,898,156 2,925,111 26,955 5,081 92,056,514 36,447
District 2 7,148,980 7,265,655 116,676 16,222 381,542,316 144,926
District 3 5,658,736 5,873,017 214,281 12,485 404,791,508 178,495
District 5 550,206 740,402 190,196 2,680 51,711,844 20,990
District 6 969,869 1,041,505 71,636 2,641 64,486,626 27,932
District 7 2,731,502 2,828,300 96,798 5,178 145,572,978 41,834
District 11 745,325 686,490 (58,835) 2,880 80,787,849 36,583
District 13 64,035 50,799 (13,236) 1,286 16,638,468 71276
Total Commercial 20?66,809 21 ,411,280 644,471 481453 11237,588, 103 494,483
use fee struct2 adj sfr 12:58 PM Summary
4/2/98
Dist
Grand Total
District 1
District 2
District 3
District 5
District 6
District 7
District 11
District 13
Total
use fee struct2 adj sfr
Adopted Adjusted
Rate Rate
Summary Comparison of Rate Structures
Annual Sewer Service User Fees
Adopted Fee "Adjusted" Fee Increase (Deer) No Parcels
6,309,098 6,332,395 23,297 35,982
18,429,229 18,635,990 206,761 143,760
20,309,956 20,362,828 52,872 174,831
2,516,019 2,550,591 34,572 20,662
3,322,567 3,321,191 (1,377) 24,706
5,190,508 5,208,455 17,947 41,133
3,469,159 3,497,818 28,659 36,730
792,445 789,683 (2 ,762) 7,986
60,338,982 60,698 ,950 359,969 485,791
12:58 PM
Page2
No Units No Sq Feet No Bldgs
15,045 92,056,514 36,447
59,471 381,542,316 144,926
69,650 404,791,508 178,495
8,195 51,711,844 20,990
17,540 64,486,626 27,932
17,477 145,572,978 41,834
12,493 80,787,849 36,583
1,049 16,638,468 7,276
200,920 1,237,588,103 49_4,483
Summary
4/2/98 Page 1 of4
Annual Sewer Service Use Fee
Property Use Category Proposal Comparison
Assessor Current % Of SFR Revised % Of SFR No.Of Total $ Change % Rate Chg Average$
Use Code Description Per 1000 sf or unit Per 1000 sf or unit Parcels From Adopted From Adopted Change
0 CONVERSION-C/1, RURAL PC 100.0% 70% 247 $ (15,157) (30%} $ (61)
1 VACANT LAND PARCEL 0.0% 0% 9,565 0%
2 ONE RESIDENCE 100.0% 100% 400,314 (1,307,943) 0% (3)
3 TWO OR MORE RESIDENCES 60.0% 70% 6,361 177,321 17% 28
4 MISCELLANEOUS IMPROVEMENT 100.0% 100% 1,644 (78,875} 0% (48)
5 COMMON AREA PARCEL 0.0% 0% 160 0%
6 "HOLD" PARCEL 0.0% 0% 1 0%
7 MOBILEHOME 60.0% 70% 8,723 (763) 17%
8 EQUIVALENT TO VACANT 0.0% 0% 6 (75) 0% (13)
10 DUPLEX ONLY 60.0% 70% 5,405 31,238 17% 6
11 TRIPLEX ONLY 60.0% 70% 1,954 25,386 17% 13
12 04-UNITS ONLY 60.0% 70% 6,789 136,013 17% 20
13 5 TO 16 UNITS 60.0% 70% 4,054 162,323 17% 40
14 17 TO 25 UNITS 60.0% 70% 580 48,385 17% 83
15 26-40 UNITS ONLY 60.0% 70% 369 60,307 17% 163
16 41-99 UNITS ONLY 60.0% 70% 549 171,067 17% 312
17 100 OR MORE UNITS 60.0% 70% 426 291,129 17% 683
18 DEVELOPED WITH A MIX OF FORMS 70.0% 100% 3,993 464,544 43% 116
19 SFR WITH 1 OR 2 RENTAL UNITS 100.0% 170% 45 (10,318) 70% (229)
20 AMUSEMENT PARKS 71.5% 144% 8 660 101% 83
21 AUTOMO8ILE DEALERSHIP 71.5% 41% 216 (67,626) (43%} (313}
22 AUTO REPAIR SHOP 71 .5% 41% 535 (52,778) (43%) (99}
23 AUTOMOTIVE Sl=RVICE 71.5% 41% 364 (42,067} (43%} (116}
24 USED CAR LOT 71 .5% 41% 109 (9,037} (43%} (83}
26 AIRPORT AND RELATED BUILDINGS 71 .5% 53% 7 (678} (26%) (97)
28 BOWLING ALLEYS 71.5% 112% 13 11,431 57% 879
29 CONVENTIONAL CAR WASH 71 .5% 796% 82 105,184 1013% 1,283
30 COIN OPERATED CAR WASH 71 .5% 151% 40 3,567 111% 89
32 CEMETERY & RELATED BUILDINGS 71.5% 101% 52 1,680 41% 32
33 CHURCH BUILDINGS 71 .5% 20% 768 (159,636} (72%} (208)
34 DORMITORY 71 .5% 97% 12 4,212 36% 351
35 ENTERTAINMENT CENTER 71 .5% 144% 13 44,108 101% 3,393
36 FINANCIAL BUILDINGS 71 .5% 41% 309 (59,844} (43%} (194}
use fee struct2 adj sfr 1:04 PM EDU Factors April
4/2/98 Page 2 of 4
Annual Sewer Service Use Fee
Property Use Category Proposal Comparison
Assessor Current% Of SFR Revised % Of SFR No.Of Total S Change % Rate Chg Average$
Use Code Description Per 1000 sf or unit Per 1000 sf or unit Parcels From Adopted From Adopted Change
37 FRATERNAL BUILDINGS 71 .5% 51% 72 (11,177) (29%) (155)
38 FUNERAL HOME 71 .5% 101% 19 2,085 41% 110
39 GOLF COURSE 71 .5% 41% 132 (8,782) (43%) (67)
40 HEALTH CLUB 71 .5% 29% 23 (19,695) (59%) (856)
42 HOSPITAL 71.5% 97% 54 38,819 36% 719
43 HOTEL 71.5% 97% 73 98,960 36% 1,356
44 LUMBER/CONSTR MATL YARD 71 .5% 17% 5 (76%)
45 MARINAS 71 .5% 53% 13 (1,348) (26%) (104)
47 SUPERMARKET 71 .5% 151% 68 85,169 111% 1,252
48 CONVENll=NCE MARKET 71.5% 151% 134 21,476 111% 160
50 SINGLE MEDICAL BLDGS TO 3 STORIES 71.5% 124% 883 172,421 73% 195
51 SMALL 'MEDICAL CENTER 71 .5% 124% 49 36,971 73% 755
52 MEDICAL CENTER COMPLEX 71 .5% 124% 7 3,043 73% 435
53 HIGH RISE MEDICAL 71.5% 124% 43 27,576 73% 641
54 CONVERTED RESIDENCE TO MEDICAL 71 .5% 124% 24 1,504 73% 63
55 MOBILE HOME PARK 60.0% 70% 298 148,328 17% 498
56 MOTELS AND MOTOR HOTELS 71 .5% 97% 396 144,557 36% 365
57 MOTORCYCLE/SMALL VEHICLE BLDG 71 .5% 41% 14 (550) (43%) (39)
58 NURSERIES (PLANTS) 71.5% 10% 41 (6,556) (86%) (160)
60 NURSING HOME 71.5% 102% 40 14,875 43% 372
61 CONVALESCENT HOSPITALS 71.5% 102% 69 49,107 43% 712
62 CONVERTED RES USED AS NURSING 71.5% 102% 15 1,054 43% 70
63 LOW RISE RETIREMENT BUILDING 71 .5% 97% 25 18,804 36% 752
64 HIGH RISE RETIREMENT BUILDING 71.5% 97% 13 21,547 36% 1,657
65 SINGLE OFFICE BLDGS TO 3 STORIES 71.5% 82% 3,658 82,623 15% 23
66 SMALL OFFICE CENTER 71 .5% 82% 134 15,415 15% 115
67 OFFICE COMPLEX 71.5% 82% 19 5,910 15% 311
68 HIGH RISE OFFICE 71 .5% 82% 179 48,254 15% 270
69 CONVERTED RESIDENCE TO OFFICE 71.5% 82% 364 2,846 15% 8
71 PARKING GARAGE 71.5% 17% 46 (50,086) (76%) (1,089)
72 PAVED PARKING LOT 71.5% 17% 579 (4,253) (76%) (7)
73 RECREATION 71.5% 144% 39 19,091 101% 490
74 RECREATION VEHICLE PARK 71 .5% 27% 13 (2,333) (62%) (179)
use fee struct2 adj sfr 1:04 PM EDU Factors April
,-L
4/2/98 Page 3 of 4
Annual Sewer Service Use Fee
Property Use Category Proposal Comparison
Assessor Cui 1·ent % Of SFR Revised % Of SFR No Of Total $ Change % Rate Chg Average$
Use Code Description Per 1000 sf or unit Per 1000 sf or unit Parcels From Adopted From Adopted Change
76 RESTAURANT-TAKE OUT 71.5% 300% 291 78,848 320% 271
77 RESTAURANT -COFFEE SHOP 71 .5% 600% 520 533,926 739% 1,027
78 RESTAURANT -DINNER HOUSE 71.5% 600% 460 997,049 739% 2,167
79 RESTAURANT -CONVERSION FROM SF 71.5% 600% 6 9,732 739% 1,622
81 PRE-SCHOOLS, NURSERY OR CARE 71.5% 82% 136 3,824 15% 28 ) 82 PRIVATE SCHOOLS 71.5% 82% 75 6,873 15% 92
83 AUTOMOTIVE SERVICE STATION 71.5% 41% 543 (18,892) (43%) (35)
84 MARINE SERVICE STATION 71.5% 41% 0 (43%)
85 COMBIN: SERV STN/RESTAURANT 71.5% 100% 0 40%
86 COMBIN:SERVICE STATION/CONVIENCE 71 .5% 41% 55 (1,821) (43%) (33)
88 CONVENIENCE SHOPPING CENTER 71.5% 151% 462 396,736 111% 859
89 NEIGHBORHOOD SHOPPING CENTER 71.5% 53% 516 (184,906) (26%) (358)
90 COMMUNITY SHOPPING CENTER 71 .5% 53% 288 (134,414) (26%) (467)
91 REGIONAL SHOPPING CENTER 71.5% 138% 66 212,354 93% 3,217
92 SKATING RINKS 71 .5% 112% 3 1,926 57% 642
94 DEPARTMENT STORE 71.5% 41% 19 (17,312) (43%) (911)
95 DISCOUNT STORE 71.5% 41% 62 (55,141) (43%) (889)
96 UNATTACHED SINGLE STORE 71.5% 41% 1,386 (181,331) (43%) (131)
97 STRIP STORE 71.5% 41% 1,199 (217,117) (43%) (181)
98 STORE WITH OFFICES OR LIV QTR 71 .5% 82% 373 13,447 15% 36
99 STORE W/ OFFICE UPSTAIRS 71 .5% 82% 20 805 15% 40
100 DRIVE-IN THEATER 71.5% 10% 10 (893) (86%) (89) J 101 UNATTACHED THEATER 71.5% 51% 27 (9,708) (29%) (360)
103 CHEMICAL TANK AND BULK STORAGE 71.5% 100% 7 1,105 40% 158
104 FOOD PROCESSING PLANT 71.5% 100% 24 21,931 40% 914
105 COLD STORAGE PLANT 71 .5% 100% 18 12,123 40% 674
106 FACTORY 71.5% 100% 167 191,699 40% 1,148
107 LIGHT INDUSTRIAL -SINGLE TENANT 71.5% 100% 2,056 538,783 40% 262
108 LIGHT INDUSTRIAL -MUL Tl TENANT 71.5% 100% 880 273,326 40% 311
109 RESEARCH AND DEVELOPMENT 71.5% 100% 32 18,624 40% 582
110 WAREHOUSE -SINGLE TENANT 71 .5% 17% 3,430 (2,217,840) (76%) (647)
111 WAREHOUSE -MUL Tl TENANT 71.5% 17% 1,808 (812,487) (76%) (449)
112 STEEL BUILDING 71.5% 17% 149 (55,808) (76%) (375)
use fee struct2 adj sfr 1:04 PM EDU Factors April
4/2/98 Page 4 of 4
Annual Sewer Service Use Fee
Property Use Category Proposal Comparison
Assessor Current % Of SFR Revised% Of SFR No. Of Total $ Change % Rate Chg Averc1ge $
Use Code Description Per 1000 sf or unit Per 1000 sf or unit Parcels From Adopted From Adopted Change
113 MINI-WAREHOUSE 71.5% 17% 138 (108,204) (76%) (784)
114 INDUSTRIAL PARK 71.5% 100% 362 222,309 40% 614
115 RECREATIONAL VEHICLE STORAGE 71.5% 17% 13 (98) (76%) (8)
116 TRUCK TERMINAL 71.5% 17% 24 (21,792) (76%) (908)
118 GOVERNMENTAL USE VACANT/DEVELO 71.5% 82% 6,692 (45,195) 15% (7)
119 PUBLIC UTILITY 71.5% 100% 13 398 40% 31
120 WATER MUTUAL OR COMPANY 71.5% 100% 85 1,230 40% 14
121 PARCEL OF MINIMAL OR NO VALUE 0.0% 0% 1,117 (708) 0% (1)
122 SUBSURFACE PARCELS 0.0% 0% 351 (207) 0% (1)
124 OIL/MINERAL RIGHTS 0.0% 0% 3 0%
125 MINERAL RIGHTS EQUIPMENT 0.0% 0% 0 0%
126 VACANT COMMON AREA-IMP ALLOC 0.0% 0% 0 0%
201 HOME OWNERS EXEMPTION ADD'M 0.0% 0% 0 0%
666 UNASSIGNED VACANT 71 .5% 0% 490 (47,587) (100%) (97)
888 CONVERSION-COMPOSITE PROP 71.5% 100% 161 64,968 40% 404
485,791 $ 359,969
use fee struct2 adj sfr 1:04 PM EDU Factors April
FAH_R COMMITTEE
AGENDA REPORT --....,.. ...,.
County Sanitation Districts of Orange County, California
FROM: Gary Streed, Director of Finance
SUBJECT: RESERVES POLICY STATUS REPORT (FAHR98-30)
GENERAL MANAGER'S RECOMMENDATION
Receive and file Reserves Policy Status Report.
SUMMARY
Meeting Date
04/08/98
Item~~mber
During last year's sewer service fee rate and budget adoption process, some of
the Directors requested an independent review of our existing reserves policy.
Public Financial Management (PFM), a municipal financial advisory firm, was
already at work on portions of the Strategic Plan and offered to perform this
study.
A part of the study was to includ~ analysis of the need for, and size of, a capital
replacement reserve. The Seattle engineering firm, R. W. Beck, was hired to
prepare a computer module to help in this evaluation.
Staff and consultants from PFM and R. W. Beck are finalizing and combining
these two reports. Final reports and recommendations will be presented at the
May Committee meeting. No formal action is requested tonight.
PROJECT/CONTRACT COST SUMMARY
N/A
BUDGET IMPACT
D This item has been budgeted.
D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted.
lg] Not applicable (information item)
H:lwp.dtaVin\210'crane\FAHRIFAHR98\APRIFAHR98-30.doc
Revised: 11'5t'98 Page 1
ToJt. Bds.
Item Number
ADDITIONAL INFORMATION
At the November 1997, FAHR Committee meeting, the Directors reviewed a
computer model of replacement needs and funding. This model was developed
by R. W. Beck, a Seattle engineering consulting firm with experience and
expertise in this area. During the past few months, the model has been refined
to provide results that are easier to understand and to simplify the process to
evaluate alternatives. A final report is expected for the May Committee meeting,
but highlights can be summarized as:
• "Near-term" replacement needs are limited.
• Current replacement value of facilities is approximately $2.250 billion, while
cost is $1.000 billion.
• Major refurbishment and replacement needs, approximately $100 million,
occur in both 2017 and 2018.
• Annual needs peak in 2034 at nearly $180 million.
• District No. 7 is currently unique with exposure to local sewer replacement
with a current replacement cost of $75 million.
• Capital replacement needs were not included in the 1997 rate adjustments.
The Committee directed staff to include capital replacement needs in the revised
policy and to plan to meet these needs with a combination of borrowing and pay-
as-you-go funding.
In December 1997, the Committee reviewed a portion of the work done by Public
Financial Management. The Directors considered a preliminary survey of 23
other public agencies and their accumulated funding. The survey included:
• Budget levels
• Debt Service Levels
• Value of Treatment Facilities
• Uses of Insurance
• Near-term Capital Project Funding
• "Bond" Ratings
• Discretionary Reserves
The results of that survey confirmed our expectation that our reserve structure
needed to be modified. Most agencies reported lower total reserves than ours,
because of their policy to assign accumulated funds to specific near-term
projects. The Districts have shown the current year outlay only, even when a
project spans several years. While useful for cash flow analysis, this p~actice
H:\wp.dtaVinl210'cranelFAHRIFAHR98\APRIFAHR98-30.doc
Rellised: 115198 Page2
inflates reported "reserves." The Districts have each accumulated funds for
catastrophic loses without regard for insurance or FEMA coverage. While this
practice was conservative and warranted in 1990, today's experience indicates a
lesser amount would be acceptable. Other agencies have also segregated funds
for certain longer-term replacement and refurbishment needs. This need was the
topic for the R.W. Beck study and the Committees' direction to incorporate these
needs in a future policy. While these needs are great, they can be met from a
planned borrowing and saving program.
Finally, it is important to remember that although we generally talk about the
Districts' total reserves, we do not make it perfectly clear that these are the funds
of nine (9) separate entities. Each of these Districts currently has unique needs,
funding abilities and total accumulated funds. When the current policy was
adopted, and up until just this calendar year, the individual Districts did not have
a policy or practice of outright loans to other Districts. This independence had
made it necessary for each District to provide for its own contingencies, and
some did this better than others. The ability to help each other through the
emergencies and other negative cash flows will delay formal debt issues and will
allow overall total reserves to decrease.
Staff and consultants from R.W. Beck and PFM are finalizing and combining
these two reports. Final reports and recommendations will be presented at the
May FAHR Committee meeting.
ALTERNATIVES
N/A
CEQA FINDINGS
NIA
ATTACHMENTS
None
GGS:lc
H:lwp.dta'lin\210lciane\FAHRIFAHR981APRIFAHR98-30.doc
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FAHR COM_MITTEE ,-';
,,--..,_ Meeting Date To Jt. Bds. \
04/08/98
AGENDA REPORT ltemf umber Item Number
County Sanitation Districts of Orange County, California
FROM: Chris Dahl, Director of Information Technology
SUBJECT: OFFICE AND PLANT COMPUTERIZATION OVERVIEW (FAHR98-31)
GENERAL MANAGER'S RECOMMENDATION
Receive and file Office and Plant Computerization Overview presentation.
SUMMARY
Staff will present the current state of the use of information technology in both the office
and plant environments. This presentation will be given in combination with the J-42
Plant Reinvention project.
PROJECT/CONTRACT COST SUMMARY
Informational item only.
BUDGET IMPACT
D This item has been budgeted. D This item has been budgeted, but there are insufficient funds. 0 This item has not been budgeted.
~ Not applicable (information item)
ADDITIONAL INFORMATION
None.
ALTERNATIVES
NIA
\lraclonldata1wp.dtalfinl210\crane\FAHR\FAHR98\APRIFAHR98-31.doc
Revised: 11519B Page 1
CEQA FINDINGS
NIA
ATTACHMENTS
None
\lraclonldata11wp.dtallinl21 Cl'crane\FAHRIFAHR98\APRIFAHR98-31.doc
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l , PDC COMMITTEE
AGENDA REPORT
Meeting Date To Jt. Bds.
04/0S/98 o 'I 22. /c;B
Item Number
County Sanitation Districts of Orange County, California
FROM: David Ludwin, Director of Engineerih
Originator: Jonathan K. Thomsic, Plant Automation/Instrumentation
SUBJECT: Professional Services Agreement for Plant Automation & Reinvention
Project, Job Number J-42
GENERAL MANAGER'S RECOMMENDATION
1. Approve Professional Services Agreement for Plant Automation & Reinvention,
Phase 1, Job No. J-42 with Parsons Environmental Services for $6,118,499.00.
SUMMARY
J-42 is the Plant Reinvention and Automation Project that will increase plant automation
to an optimum level. It is a capital project that will implement physical changes to the
plant process control systems and equipment to support both Operations and
Maintenance reinvention. J-42 will also provide control systems information essential for
both short term and long term planning. The first two phases of J-42 are designed to
identify, qualify and prioritize reinvention construction projects through a cost/benefit
analysis. Although there is insufficient specific information on costs and savings at this
time, the following estimates of cost savings and benefits have been developed.
The treatment plants can be more productively operated through automation of the
treatment plants. Six years after project completion J-42 will reach the break even point,
then realize savings estimated at approximately $3,380,000 per year with savings
increases during the subsequent years. The main measurable cost reduction is from
FTE reduction, estimated to be eighteen FTE's at the conclusion of the project. In
addition, this project provides several other benefits:
1. This project will provide Maintenance with the information required to better
manage plant assets.
2. Operations will obtain the information required to understand, control and
optimize the wastewater process.
3. J-42 will provide the data to assist the DART team "bottom up" plant reinvention.
4. J-42 provides the vehicle for gathering and organizing essential records on the
existing plant infrastructure.
5. The project will lead to reduction in the plant operating and maintenance costs:
a) Reduced chemical usage.
b) More efficient operation.
c) Better decision-making.
\lradonldata1 \wp,dtaleng\JOBS & CONTRACTSIJ-42\board_presentation\J-42 Agenda Report09 doc
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d) Enhanced plant safety.
e) Increased plan~ r:eliab>ility.
6. The proje.ct will reduce design and cor:istruction costs for plant modifications,
since better as~built information will be available.
J-42 will be implemented in four phases over the next five years. Phase 1 will:
• Field verify and document the existing plant automation and control systems.
• Develop and implement an Electronic Document Management system to organize
and manage project information.
• Use a workshop setting to review each process area and develop solid reinvention
recommendations for changes and upgrades to the plants.
This PSA includes all Phase 1 activities for a total cost of $6,118,499. Phase 1 is fully
described in the Contract Scope of Work.
Phase 2 is the pre-design phase and will create a list of construction projects that are
proved beneficial and are Board approved; Phase 2 will include:
• Refine, prioritize and cost-justify Phase 1 recommendations.
• Unify and coordinate recommendations into an overall plan.
•· Generate design Request for Proposal.
Phase 3 will consist of design for the cost-effective projects identified in Phase 2.
Phase 4 will consist of construction projects for the process areas.
PROJECT/CONTRACT COST SUMMARY
Original Budget
Previously Authorized
This Authorization
Addenda to Date
Percent Change
Amended PSA Price
BUDGET IMPACT
$25,760,000
0
8,481,499
0
0%
$6,118,499
~ This item has been budgeted. (line item: C.4.d.) D This item has been budgeted, but there are insufficient funds.
D This item has not been budgeted.
D Not applicable (information item)
\lradonldata1\wp.dtalengUOBS & CONTRACTSU-42\board_presentationl.J-42 Agenda Report09,doc
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;
~ )
The budget category for this project is plant reinvention. See the attached BUDGET
INFORMA T/ON TABLE for detailed budget information.
ADDITIONAL INFORMATION
The Plant Reinvention and Automation Project is structured to identify and implement
plant automation upgrades and process improvements that make sense when the
benefits are compared to the cost. Different elements of J-42 will 1) collect accurate
information about the existing plant control systems, 2) make available the information
to all interested personnel, 3) bring together plant technicians with consultant experts in
a series of workshops to brainstorm plant improvements, 4) analyze, cost justify and
prioritize a project list for the process improvements and automation projects, 5) submit
projects to the Board for design approval, 6) complete the design work, and 7) build the
automation enhancements and treatment plant control system upgrades.
J-42 is a capital project that will implement physical changes to the plant process and
control systems to support Operations and Maintenance reinvention. Approximately
one-third of the J-42 budget will provide new information about the treatment process
that is essential for short term and long term planning of the plant control systems.
Engineers cannot accurately, effectively or efficiently plan, design or build without
complete, accurate information. In the past comprehensive, automation drawings were
not developed; thus, Engineering has neither a comprehensive set of drawings
depicting the overall control system workings nor detail drawings showing how and
where control elements are interconnected. Phase 1 of J-42 will create a type of
documentation never before available to District engineers, the baseline drawing set.
Baseline drawings will provide complete and accurate information that will change over
the years as the facilities are modified. The remaining two-thirds of the J-42 budget will
be used for design and construction of automation and process improvement projects
identified and developed in Phases 2, 3 and 4. Expenditures for capital improvements
will result in tangible reductions in cost that are to be determined and that are the result
of real improvements in process control or increased plant automation.
Project Benefits
The May 1996 EMA Competitiveness Assessment Report indicates significant savings
can be realized by automating plant processes to streamline operations and free up
Operations personnel for other work. J-42 will provide improvements with cost reduction
in five of six areas mentioned in the EMA report. We estimate that savings of
$3,380,000 per year (measured during the fifth year after project completion) will result
directly or indirectly from J-42 projects (see Savings Table in the attachments for further
information). The Districts are doing this project for several productivity reasons:
• The Districts will experience an FTE reduction due to the automation of many
portions of the plant. Preliminary estimates by Operations indicate that a reduction of
eighteen FTE's is possible. The truck solids handling facility that is now in design is
\lradonldata1 lwp.dtaleng\JOBS & CONTRACTSIJ-42\board_presentation\J-42 Agenda Report09.doc
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an example of how automation reduces FTE's. This is a truck loading facility that is
not automated and so must have an operator in attendance four days a week during
the truck loading process. By automating the truck loading process, no operator
need attend the loading process other than for unusual or emergency conditions.
• The project will provide Maintenance with the information they require for proper
asset management. There are devices available that allow Maintenance to monitor
equipment. For example, vibration monitors can be installed that allow Maintenance
to predict pump failures before they happen. This will allow Maintenance to fine tune
their preventive maintenance program to prevent failures. J-42 will connect existing
monitors to the control system and install new monitors where they are required for
proper asset management.
• All instruments and process equipment will be uniquely tagged. The
nameplate/process information will be entered into the existing Computerized
Maintenance Management System (CMMS) thereby allowing tracking of each
component's maintenance history. As an example of how this will be used; if a
particular motor has a history of failure, it may be discarded and replaced rather than
repaired.
• Operations will obtain real-time information (as it is running) required to manage,
optimize and control the wastewater process. Many operating parameters are not
monitored at this time. Many chemical feed systems, diversion gates, motor speeds,
etc. are not automatically controlled --Operations sets the rate and lets them run.
This results in less effective and efficient control with chemical delivery rates set
above optimum to guarantee that no statutory violations occur. J-42 will install
automatic controls so that just the right amount of chemical is delivered, or just the
right amount of wastewater is diverted, or just the right temperatures are maintained
for the optimal treatment of the wastewater.
• Operations will use the consolidated control systems documentation to train
operators on the process. Operators now receive training on individual processes
from the O&M manuals. The O&M manuals are an excellent source of individual
process area information but do not contain overall systems information. J-42 will
provide current, comprehensive overall drawings that will fill this gap.
• J-42 will provide the data to assist the DART team's plant reinvention. Through a
series of workshops and with the use of the newly developed process and control
documentation, the DART's Treatment Plant Improvement Teams will be able to
assist in the reinvention and help make recommendations for automation
improvements. The project consultant will provide invaluable expertise and an
outside point-of-view that, when coupled with our technicians' familiarity with the
plants, will optimize process control.
• Currently we do not have any consolidated document that shows how the plants
work. Limited information is scattered over many construction drawings and other
information is missing. There are incomplete and unorgan•zed sets of wiring
diagrams. There are no drawings that depict the internal workings of the process
controllers. J-42 will gather and organize the information and essential records on
the existing plant infrastructure and convert them into an electronic format that is
l\radon\data1 lwp.dtalang\JOBS & CONTRACTSIJ-42\board_presentation\J-42 Agenda Report09,doc
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) ,.----.,_\
!
organized and easy to use. J-42 will also create a change management tool so that
Engineering will be able to maintain drawings into the future.
• J-42 will double the number of monitored process points. Better information leads to
better decision-making and better control system strategy.
• Due to a lack of complete documentation it is not always clear what will happen
during abnormal operating conditions. J-42 will provide plant documentation that will
enhance plant safety. Plant safety will also increase because the automated
processes will have predefined failure states so that if a failure occurs, the results
will be more predictable.
• The design phase will build in redundancy and back-up controls so that a failure in
the primary control system will cause an alarm and will also activate the back-up
controls. Repairs will be made at the convenience of the maintenance group and will
not be rushed into place. Control system reliability will subsequently increase as a
result of the J-42 improvements.
• Currently we direct each design consultant and every contractor to do a thorough
site investigation as part of their contract. Staff can not currently supply supporting
automation documentation because there are no accurate drawings. This project will
reduce design and construction costs for plant automation modifications since we
will have accurate drawings available to support the work. An estimate of the
reduction in design costs is approximately $900,000 per year ($60,000,000/year
construction costs x 1 % control system design cost x 150% premium due to poor
documentation).
The project is divided into four phases to allow a systematic approach to developing
information needed in subsequent phases. Since there is much that we do not have
documented about the existing facilities relative to control and automation, and we do
not know the full scope of the changes that might be implemented; we would not be
able to put together a design contract scope of work that would be comprehensive and
accurate. By breaking the project into phases, we can develop baseline information and
then put together subsequent cost-justified designs and construction contracts. In
Phase 1 we will document existing plant control system condition, build an electronic
document control system and identify potential automation projects. In Phase 2 we will
further refine the automation projects list and eliminate the projects that do not meet our
cosUbenefit criteria. Phase 3 is the, design phase and Phase 4 is the construction
phase.
Proposed Schedule
Following is a preliminary schedule for J-42 activities:
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J-42 Project Schedule
1998 1999 2000 2001 2002 2003
11111111111 1111 111111 1 11 11111111 1 1111 111 1111 11 11 1111111 11 1111 1111
Phase 1
Documentation
EDMS
Workshops
Phase 2
Prelim Eng. Report
Phase 3
Design
Phase4
Construction
I
I I
I
I
I
I
I
I I I I I I I
I
I I I I I
The starting date and duration of the Phase 3 and 4 work is somewhat indeterminate,
as we do not know the magnitude or quantity of the projects that will be identified for
construction.
Consultant Selection Procedure
I
The May, 1996 EMA Competitiveness Assessment Report first suggested the Districts
"Implement a program to reengineer maintenance and operations philosophy and
procedures." and "Develop an Automation Pla n for the treatment plants and collection
system, based on a redefined philosophy of operation." In January 1997 a committee of
division managers convened in order to lay the foundations of the project and outline
the scope of work. By August 1997 the committee had reached agreement on the
current methodology for proceeding with the project.
Eighteen firms were invited in September 1997 to submit a list of their qualifications to
perform the documentation and reinvention. Six firms were short-listed and invited to
submit proposals. Four firms submitted proposals and were selected for oral interviews.
The proposal reviews and interviews were conducted by a team of District staff that
included representatives from Engineering, Operations, Maintenance, Plant Automation
Group and Management. Two firms, Westin Engineering and Parsons Engineering
Sciences were determined to be nearly equal in capability, with Westin being the
consensus first choice. Montgomery Watson and Malcolm Pirnie did not demonstrate
the ability to perform the work to our satisfaction and were not considered further. It was
the consensus of the review team that Westin Engineering seemed to have a better
approach to assure an accurate field verification and documentation effort; although
their proposed man hour estimate and fee was substantially greater than Parsons.
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I I
)
Westin had a proposed fee of $6.4 million and Parsons a proposed fee of $4.4 million.
Through a series of negotiation sessions with Westin, scope and approach were
clarified and unknowns were identified. Staff was unable to negotiate any reduction in
Westin's proposed fee for the agreed upon scope and staff could not justify the apparent
differential cost of approximately 2 million dollars between them and Parsons. As a
result, negotiations with Westin were terminated and staff began discussions with
Parsons. It should be noted that additional effort was identified as a result of the
proposals and interviews, and would have added to the base proposed fee of $6.4
million by Westin.
During the negotiations with Parsons it was discovered that their proposal assumed a
limited field verification effort that was deemed inadequate for our needs. After clarifying
our requirements and including additional work identified during the proposal evaluation,
the negotiations were successfully concluded at a final cost of $6,118,499. The revised
scope and fee will assure the level of accuracy we will require for a thorough field
verification and documentation effort and was substantially less than the proposed fee
submitted by Westin. It also includes the additional scope that was identified during the
proposal reviews and interviews that would have had to be added to Westin's contract,
increasing their proposed cost. See attached REVIEWER COMMENTS for additional
information on the selection process and reviewer reasons for their selections.
ALTERNATIVES
No Action -The NO ACTION alternative will:
• Continue the present practice of poor plant documentation for the control system.
This will result in continuing higher design costs, reduced safety, reduced reliability,
higher maintenance and repair costs, and higher training costs.
• Prevent the identification of cost-effective process improvements. This will result in
continuing higher chemical costs and continuing process inefficiencies.
• Prevent the implementation of coordinated, advanced automation. This will result in
continuing lowered utilization of operating personnel; expedited operation will not be
possible.
CEQA FINDINGS
This project is exempt from CEQA requirements per CEQA Section 15262.
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ATTACHMENTS
BUDGET INFORMATION TABLE
SAVINGS TABLE
SQQ, PROPOSAL, ORAL INTERVIEW and FINAL SELECTION SCORES
REVIEWER COMMENTS
PHASE 1 TO 4 DETAILS
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BUDGET INFORMATION TABLE
Project Title: Plant Reinvention / Automation Project
Job No.: J-42
Staff, All Phases NIA $ 5,986,430 ~~~tit~~ $ 5,986,430 $ -;~$!.-~1300,000 $ 2,300,000 I $ 166,000 I 3%
~-~ ;.~, lit-· . . -I, • . i:
Walkdown, Ph 1 NIA $ 6,118,499 -~~!~~ $ 6,118,499 $ -~f ~if;1,1 a';4'9.9 $ 6,118,499 I $ -I 0%
· ,;:lt~ll>..:.~ , ,' , .
Pre-design, Ph 2 NIA $ 240,000 ;,,:4i~ ~,J:;~ $ 240,000 $ -:l ~,:.-;,~~! -$ -I $ -I 0%
Design, Ph 3 NIA $ 1,534,281 1:._~~iA $ 1,534,281 l~I $ -lt$,:~~Zl ~;: I $ -I $ -I 0%
Construction, Ph 4 NIA $ 7,377,781 ,-m~,f~ $ 7,377,781 Ill $ -p;$ ~~,~~}l '>:. I $ -I $ -I 0%
:-&J.r~: ~·~
Contingency NIA $ 4,503,009 ,,,, •:• .~~,-$ 4,503,009 Ill $ -I $;,_~-:tP,~11:!, ~-I $ -I $
~
TOTAL 1 $ 2s,1so,ooo I $ 2s,1so,ooo !($·~ ~~i.~I $ 2s,1so,ooo 111 $ -1 $""8,41.ar499'·1 $ a,41a,499 1 $ 1ss,ooo 1 3%
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SAVINGS TABLE
The Savings Table below is an estimate of the savings that may be obtained from the automation activities of J-42.
Year I Cost Reduce design $$ Reduce FTE Reduce chem Year Total CUMULATIVE
usage TOTALS:
Year1 -$2,826,000 $0 $0 $0 $0 -$2,826,000
Year2 -$8,485,000 $450,000 $0 $0 $0 -$10,861,000
Year3 -$6,390,000 $900,000 $300,000 $258,000 -$4,932,000 -$15,793,000
Year4 -$4,757,000 $900,000 $540,000 $430,000 -$2,887 ,000 -$18,680,000
Years -$3,302,000 $900,000 $540,000 $602,000 -$1,260,000 -$19,940,000
Year6 -$60,000 $900,000 $840,000 $774,000 $2,454,000 -$17,486,000
Year7 -$60,000 $900,000 $1,080,000 $860,000 $2,780,000 -$14,706,000
Year8 -$60,000 $900,000 $1,320,000 $860,000 $3,020,000 -$11,686,000
Year9 -$60,000 $900,000 $1,440,000 $860,000 $3,140,000 -$8,546,000
Year10 -$60,000 $900,000 $1,560,000 $860,000 $3,260,000 -$5,286,000
Year11 -$60,000 $900,000 $1,680,000 $860,000 $3,380,000 -$1,906,000
Year12 -$60,000 $900,000 $1,800,000 $860,000 $3,500,000 $1,594,000
Year13 -$60,000 $900,000 $1,800,000 $860,000 $3,500,000 $5,094,000
TOTALS: -$26,240,000 $10,350,000 $12,900,000 $8,084,000 $5,094,000 $5,094,000
Eighteen Operator FTE reductions are projected as a result of J-42 Automation and Reinvention activities. Additional
savings accrue after year 7 because an increase in flows will not require an increase in staff.
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?'
SOQ, PROPOSAL, ORAL INTERVIEW and FINAL SELECTION SCORES
Following is the Districts rating of the Statement of Qualifications (SQQ) that were
submitted by responding firms. Westin and Parsons earned the best scores.
614 655 656
Ranking 4 3 2 1
No. 1 Ratings 1 2 3 5
Remove
High/Low 438 465 498 499
Modified
Ranking 4 3 2 1
Raw Average 73.0 76.8 81.9 82.0
Ranking 4 3 2 1
Evaluators ranking of the written proposals only. Parsons and Westin scored the same
number of points.
Ranking 3 1 (tie)
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Final ranking placed Westin first, Parsons second.
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REVIEWER COMMENTS
Following are unedited comments from the reviewers. This information was compiled
after the final oral presentations and discussion.
Reviewer 1
I felt that all Consultants were well qualified for this project. Westin replaced Parsons as
my first choice because of their as-built presentation (which represents 75% of the
project effort) coupled with stated reduction in as-built hours estimate. The
Westin/Mangan as-built presentation was superior because they demonstrated a level
of detail that confirmed they have done this before; they have developed all of the flow-
chart procedures necessary for a 100% accurate walk-down; and they are best able to
estimate the extent of the effort required to document our plant. I have personal
knowledge that Westin experts will do an exceptional job in the EDMS portion of the
project. Parsons is my close second choice. Parsons showed superior abilities in
reinvention and in walk-down abilities but was somewhat weak in EDMS. The
Montgomery-Watson proposal was non-responsive with eleven exceptions to the scope
of work and thirteen items that we did not ask for. Malcolm-Pirnie met the scope of work
but only minimally.
Reviewer 2
My first choice was Westin for the following reasons. First, Mangan presented the most
Professional approach to the documentation product. They have developed standards
and presented their approach in the most convincing manner. They had the best
method of achieving 100% accuracy that the scope requested. Second, I liked their
idea concerning the Client advocate and believe they picked the right person to do the
job. They had operations experience on the team with JCE who also has operations
experience as a new part of their business. I believe the O and M staff will work with
the JCE team, which is critical because the DART Members choice to cooperate and
share their knowledge is key to this projects success.
My second choice was Parsons. My major concern is that they are large and will "do it
to us, rather than working with the staff. What I liked about them was their experience
in a documentation project like this. They did note that they had major problems on the
Alaskan project and did not convince me that they had corrected their approach. They
do provide a fresh approach to reinvention. They have the potential to be cost effective
based on hours.
Brown was a weak spot for the other two teams. Brown was not convincing to me, or
not nearly as much as Mangan. JMM's project manger was tentative. He did not seem
prepared. Malcolm Pirnie proposed to expand the scope of reengineering . They called
Tom A. Mr. reinvention but I did not here enough good ideas about how to automate the
plant from his presentation
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Reviewer 3
1. Parsons
• Their As-Built Project Engineer, Norm Morishige, has relevant experience
and will be very hands-on.
• Their approach to EDMS database integration sounds good. Their Integrated
DataBase (IDB) effort would be step on the path toward the integration of
other databases. However, if we proceed with Parsons, we must further
investigate the EDMS implementation capabilities of CH2M Hill and Strategic
Frameworks.
• Their number of hours is nearly half that of Westin --a significant cost
savings for the Districts. --
2. Westin
• In their proposal, the EDMS setup (task 7) is listed with a duration of only one
day, with only 438 hours dedicated throughout the life of the project. They-
were unable to explain why their EDMS hours were so low. The level of
effort they will put into this portion is suspect. The I.T. Department cannot
assume this task.
• They sent a Chief Engineer to address the database integration, but he did
not really know much about it. Their I.T. person did not attend the
presentation. If we proceed with Westin, we must further investigate their
EDMS implementation capabilities.
• Although Mr. Mangan presented the As-Builting portion well, he is not listed
as part of the project team (he will not be a hands-on participant), and I don't
know the capabilities of Joe Boyles.
• Considering past experience at the Districts, I am concerned about Alan
Carrie as a Project Manager.
3. Montgomery Watson (not a viable alternative)
• Bentley Systems had an excellent demonstration, but this proprietary object-
oriented technology may not be the right choice for the Districts.
• They were unable to explain why their EDMS hours were so high.
• They did not show competence or emphasis on the As-Builting portion.
4. Malcolm Pirnie (not a viable alternative)
• Their plan to install an "interim solution" for EDMS, then replace it later, is a
poor approach. Their assertion, that "open architecture" would make this
painless, shows that they cannot be taken seriously.
• Their Integrated Access System (IAS) was presented, but is actually a red
herring. It is not included in their proposal and I do not believe that they have
the ability to deliver such a system. The intranet interface they presented is
also not part of their proposal.
• They did not show competence or emphasis on the As-Builting portion.
Reviewer4
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Westin best as-building set-up, Carollo knows the plants, Bob Gilette is a good
facilitator. Need to see more on the re-invention side and software like the
Bentley Systems software.
Parsons best apparent grounding in reality, ($), suspect they are the least costly, liked
their project approach. Not much there on the re-invention side and thought
Lee & Roe was weak as a walkdown group.
M.Watson liked their re-invention stuff, they and M.Pirnie were the best from that
standpoint and I'd like to introduce Bentley Sys. to Westin because I very
much like the software package the have. Don't think Sachs Electric is up to
the as-building job.
M.Pirnie best of the best in the re-invention set-up, liked their 4 phases for the re-
invention, and did a good job of linking the whole agency into the process,
which we will someday have to do ourselves. Did not like Brown Automation
as an as-built group.
Reviewer 5
1. Parsons
• I liked the overall as-builting approach and the fact it was proven on previous jobs.
• I liked the project management tools and controls together with a flat organization
chart.
• I liked the planning they want to put in place to force discipline in maintaining our
as-builts.
• I liked the fact that their entire staff is local.
• I liked how documents were created in the EDMS environment, with the use of an
integrating database.
• I liked the plan for specialist in l&C and Process engineering to come up with initial
reinvention ideas before the first workshop. This will stimulate DART thinking.
• I liked the demonstrated familiarity with intelligent P&ID's, logics, loops and
datasheets.
• I liked the low man hour estimate.
• I do not feel comfortable with the proposed l&C optimization staff, better staff are
available.
• I do not feel comfortable with CH2MHill as the database integrator.
2. Westin
• I liked Mangan's overall as-builting approach and the fact it was proven on previous
jobs, but it is costly.
• I liked how documents were created in the EDMS environment from the beginning.
• I liked the familiarity with P&ID's, logics, loops and datasheets.
• I liked the use of a professional facilitator.
• I liked the client advocate idea, but the proposed individual is based in Northern
California.
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• I do not feel comfortable with the project management approach. This team consists
of three independent and strong management structures, under a weak overall
manager.
• I do not feel comfortable with the non-local staff content. Many key people are from
Northern California or Detroit.
• I do not feel comfortable turning over the reinvention evaluation and engineering
assistance to Carollo Engineers who did most of our existing plant design. Carollo
Engineers has tended to be defensive in the past. Defensiveness stifles creativity.
• The network evaluations were not included as a part of phase 1. (Neither were the
man hour estimates).
• I do not feel comfortable with 20% of the hours as non-value added
(overhead/management).
3. Montgomery Watson
• I liked the proposed facilitation method.
• They seemed well qualified for the reinvention.
• I liked the local staffing.
• I did not feel comfortable with Brown Automation's as-builting approach. No
procedures were present, on questioning them I am convinced the overall approach
had not been thought through. Since this is 75% of the work, this is a fatal flaw.
• They rewrote the scope of work and added many unnecessary "nice to have"
features.
4. Malcolm Pirnie
• I think they totally missed the mark and should in no way be considered. The as-
built procedures were not thought through and the IT piece was terrible. The
reinvention piece at best was unremarkable.
In summation, my number one choice was Parsons, my number two choice was Westin.
I believe either company can do the job. But Parsons' man hour estimate is much lower
and the technical/management proposal is marginally better.
Reviewer 6
Westin/Mangan/Carrollo:
I believe Westin et al has the most thought through and comprehensive approach to the
as-built process of all the teams. I liked the presentation by Bill Gabris and Dick
Mangan. Top notch proposal and presentation. This is the majority of the work in
phase L
I thought that their client advocate approach was excellent, both with Bob Gillette as
client advocate and Marilyn Snider as the facilitator. I believe this team has the best
chance of making the workshop process a success.
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I think the EDMS portion of their proposal is weak. This needs further discussion with
them during negotiations.
Hours on this proposal are high compared to others. Needs further development during
negotiations as to specific assumptions in their proposal vs. Districts scope of work.
This comment can be made for all the firms.
Overall, the Westin team is my first choice and is way ahead of the rest of the pack.
Reviewer 7
1. Westin
2. Parsons
3. Montgomery Watson
4. Malcolm Pirnie
1. Both Parsons and Westin appeared to have the best grasp of the scope of
work, especially the Westin proposal. The issues were clearly identified and
acknowledged.
2. The Westin proposal included information regarding the as-builting portion
of the work that was important, including standards development and maintenance of
the drawings at the completion of the project. Parsons also included information
regarding their methodology on as-builting which appeared to be more fundamentally
sound than either Malcolm-Pirnie or Montgomery Watson.
3. Both Westin and Parsons appear to have assembled a team that has the
capable resources in order to complete the tasks outline in the RFP. The teams
assembled by Montgomery and Malcolm-Pirnie seem less capable, especially in the as-
builting and database areas. The inclusion of the "client advocate" with an operations
background in the Westin team structure I thought was and idea that addressed the
reinvention process particularly well.
4. Montgomery seems to have reworked the scope to reflect the services
they can provide rather than the services we requested them to provide. While
interesting, it seems to substitute style for substance.
5. Both Montgomery and Malcolm use the same company for as builting.
This is not a problem, however the company chosen doesn't appear to have the
resources effectively perform the work, nor do they provide the level of detail in the as-
builting methodology to allow one to feel confident in their proposed performance.
Reviewer 8
Westin (Mangan in particular) presented a systematic approach to P&ID data collection
and retrieval systems. Parsons needs to articulate their position on this better. Their
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presentation on how they would handle the P&ID section of the contract was weak in
comparison to Mangan. I am confident that Parsons would do a fine job overall for us.
They have the resources and the technical ability to give us a first rate product.
Reviewer 9
WESTIN
Westin had the best overall project team and approach. Westin is a firm that
specializes in Instrumentation & Controls and Electronic Document Management
Systems engineering and consulting. Their proposed Project Manager is experienced in
1 & C projects, including projects with CSDOC. Mangan is a firm that specializes in as-
bullting of I & C and electrical as well as electrical and I & C engineering. They are a
known quantity to CSDOC, having done high quality work for us. Carollo is a design
firm that is very familiar with Districts' projects and plant designs. This may be a
downside to their approach, since Carollo may be too close to the plant designs to get
"outside of the box" for reinvention. Their approach to the EDMS integration needs to
be further clarified to assure it meets the needs of CSDOC. Their manhour estimate is
high compared to the other three firms. This needs to be clarified and an acceptable
level of effort for the proposed scope of work. The Westin team can get this project
done to our satisfaction.
PARSONS
Parsons has a good team and approach. They would be doing the as-builting task with
their staff who has experience with a large as-builting project, i.e. Aleyeska Pipeline in
Alaska. They indicated they had stumbled in that project but had learned some
valuable lessons, but they did not elaborate on those lessons. Their PM is a civil
engineer; not an I & C engineer which may be a negative. Their presentation lacked
any depth in the area of reinvention; although the proposed team is qualified.
MW
MW presented many added scope items that were not requested in the RFP. They did
not present their approach to the as-builting in enough detail to get comfortable with
either their approach or the final deliverables. Their presentation did not reflect a true
understanding of the requested work. The Bentley Software for intelligent P & IDs they
demonstrated was well received and could be considered for our application. I would
not select MW for the project.
MP
MP did not offer a very strong team. I did not have an acceptqble level of comfort with
their proposed Project Manager. He did not show any real understanding of the work
and in my opinion would not be dynamic enough to get this project completed
satisfactorily. They spent too much time discussing EDMS open architecture which was
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..
1 • not requested, nor needed for this project, and spent very little time explaining their
approach to the as-built task. In lillY opinion, they did not demonstrate that they could
accomplish this project.
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l PHASE 1 TO 4 DETAIL
Following is a more detailed description of the work to be performed during phases
1 to 4:
Phase 1 work
Teams will visit each instrument, control panel, and equipment item in order to
document actual field conditions. Each item will be tagged with a number and bar code.
Instrument information such as the manufacturer, model, the current calibration, etc will
be documented for addition to the maintenance database. Terminal blocks, field wiring,
marshalling cabinets, etc will also be documented. Abandoned and/or unused cable,
equipment, instruments will be identified for removal. Information about the PLC control
computers will be identified and documented.
Information required for the drawings, such as process pipe sizes, flow direction,
installed instruments will be collected and documented. Intelligent drawings will be
created and will be both internally linked and externally linked to the Computerized
Maintenance Management System (CMMS) and the Electronic Document Management
System (EDMS). Several types of drawings will be created:
• Process and Instrumentation Diagrams (P&IDs) symbolically show the process and
associated instruments. These drawings are useful for describing the process as a
whole and for understanding how the process is monitored and controlled.
• Loop Drawings show the physical layout of all instruments and control circuits.
These drawings are useful for troubleshooting and repair (Maintenance), and for
development of the control strategies (Operations).
• Control Logic Diagrams (CLDs) are symbolic drawings of the hard-and soft-control
logic used to regulate the processes. These drawings are useful for understanding
normal and abnormal operating control and are used by Operations.
• Instrument Data Sheets are information sheets tailored to each type of instrument,
which provide necessary instrument information.
• Mechanical Data Sheets are information sheets tailored to each type of equipment,
which provide necessary equipment information.
"Hot links" or Hyperlinks will allow the technicians viewing the drawings to jump to
related documents such as the loop drawing, Instrument Data Sheets, maintenance
system information or repair manuals.
Operations and Maintenance personnel will be trained on reading drawings and the
drawings will be used in the future for training O&M personnel. P&ID drawings are used
throughout industry to illustrate process workings. This project will provide training to
Districts personnel on reading P&ID drawings and in using the drawings for everyday
work. P&ID drawings are the best vehicle available for training new Operations and
Maintenance personnel on the intricacies of the process.
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Some processes are so complex that they cannot be understood without reference to
accurate P&IDs, ILDs and CLDs. Examples are oxygen generation, power generators,
gas compressors, and digester control. Accurate ILDs are absolutely essential for
troubleshooting, modifying and updating control circuits. Without accurate diagrams the
technicians must work blindly and slowly in order to prevent mistakes.
The Electronic Document Management System will allow universal access to
documentation that is now scattered throughout the facilities. The EDMS will allow
"dissemination with control" of documentation and updates that is not now possible.
The Electronic Document Management System (EDMS) will allow universal access,
with control, to control system documents. Workflow will be controlled; document
locations will be controlled; archiving will be controlled. Documents will be accessible
from any computer attached to the Districts' Intranet via Microsoft Explorer.
A workshop setting will be used to review each process area and develop solid
recommendations for changes and upgrades to the plants. Information gathering and
documentation is 75% of Phase 1 of this project but has little immediate payback. The
information that is gathered will be used to reinvent the treatment plants. The
Consultant will analyze the existing control system functionality using the as-built
documents. Experts with extensive knowledge of wastewater treatment process and
operations will conduct this work. The control objectives for the processes will be
identified along with the adequacy of the existing control systems to optimize plant
cost/performance. Recommendations to be included in the report will consider:
• Alternative operational philosophies
• Experiences gained at other treatment plants
• Additional instrumentation and controls
• Modifications to existing equipment
• Deficiencies
• Compatibility with the Districts' standardization objectives
• High maintenance control systems.
Reinvention for each of the eight Process Areas will culminate in a three day workshop.
The Districts DART team recommendations will be investigated and integrated into the
Consultants report. A "Fatal Flaw" approach will be used to identify non-practical
alternatives; all remaining alternatives will be ranked by practicality, cost effectiveness,
reliability and compatibility with existing systems.
Phase 2 work
At the conclusion of Workshop 1 for each process area we will have (for the first time) a
rough list of the plant changes that we may want to make. We will then contract with a
consultant to refine, prioritize and cost-justify the change list. The workshop
environment will again be used to bring consultant and District personnel together for
final decisions and discussions. Extensive changes will be scheduled for many plant
areas; the changes to one area will affect other areas of the plant. It is essential that the
changes be master planned and coordinated in order to prevent conflict and receive the
most "bang for the buck". Design Request for Proposals (RFP) will result from the
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, Phase 2 work. There will be a single RFP created for each process area for each plant.
This will keep the designs consistent from plant to plant and result in the lowest possible
design cost. The Board will review the RFPs' prior to release to ascertain the
cost/benefit ratio and project payback.
Phase 3 work
Phase 3 will consist of the normal design process for each of the eight process areas of
each plant. The design Consultants may or may not be the same firm that does the
Phase 1 or 2 work. We estimate that between two and three million dollars will be spent
on design; also, we know that design costs will be reduced as a percentage of
construction costs from prior years because we will have accurate documentation of the
existing facilities in place. The design documents will be delivered so that they will be
easily integrated into our document control system.
Phase 4 work
Phase 4 will consist of our normal construction process. We estimate that twelve million
dollars will be available for automation improvements. Automation projects will not
occur equally in all process areas as some process areas have already been automated
and some process areas are scheduled to be automated during the next two years.
Significant progress towards optimizing the process and reducing the operations
personnel count will occur in five years as a result of the J-42 effort.
l\tadonldata11wp.dla\engUOBS & CONTRACTSU-42\board_presentalionU-42 Agenda Report09.doc
Revised: 3/1 B/9B Page 22
April 8, 1998
Adoption of Revised Sewer Service Rate Structure
DART Final Report Information
Quarterly Investment Program Report Information
Third-Quarter financial & Operational Report Information
Adoption of "Reserves" funding Policy Action
Renewal of All-Risk Property Insurance Action
Adoption of 1998-99 Budgets Action
Adoption of Revised Annexation Fee Schedule Action
Adoption of Revised Connection Fee Schedule Action
Adoption of DART Adaptive Workforce Compensation Action
~~~:, I Annual Renewal of Investment Policy Action
Extension of Declaration of Intent re COPs Action
Additional Deferred Comp Plan (Section 401 a) Action