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Home My WebLink About2004-07-14phone: (7141·962-2411 fax: !714] 982-0356 www.ocsd.com malling address: Ria. BQX 8127 Fountain \Jalrey, CA 92728:-8127 street: add"ess: 10844 Ellis Avenue Feunnaln Valley. CA 82708-7018 Member Agencies • Cities A'qs!l,elm Brea Buens ParK Cypress Eountram Valley Fiil/ere&.on Cetde.11 Grove Huncmgaon Beach lr,vlne I.a HabNI ta Palms Los Alamitos Newpotc Beach ONmoe Plscent:1s Sante Ana. Ses/ Beech Stanton li,Jscm VI/le Pl1rk 'ttif!b(I Linda County of Oran_ge Sanitary Districts Oosca Mess Midway Clty Water Dis tricts ORANGE COUNTY SANITATION DISTRICT Jufy 14, 2004 NOTICE OF MEETING CANCELLATION FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JULY 14, 2004 -5:00 P.M. DISTRICT'S ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 Please note that the regular meeting of the Finance, Administration and Human Resources Committee of the Board of Directors of Orange County Sanitation District, to be held at the above location, date and time has been cancelled. "To maintain world-class leadership in wastewater and water resource management. " STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Notice and the Agenda for the Finance, Administration, and Human Resources Committee meeting to be held on z(fiv ;LI , 200:/_, was duly posted ( 0 L - for public inspection in the main lob y of the District's offices on fx:itr/ f; 2oal . ........... 0-CJ ___ _ r- IN WITNESS WHEREOF, I have hereunto set my hand this iJ1 J {L ) 6 Penny M. Kyl 1 , Secretary ? Board of Directors Orange County Sanitation District G :\WP .OT A\ADMIN\BS\FORMS\AGENDA CERTIFICATION-FAHR COMMITTEE.DOC day of pboar. (714) 962-2411 tu: (714) 962-0356 -.ocad.cam ..alng llddrwss: P.8. Box 8127 Fountain Valley, CA 92728-8127 -.iaddn1$S: 10844 8fis A>l8ntle Fclwltam Valley: ~ 92708-7018 Citlu Arwheim 8 /:-88 Bwns Psrk Cypress rauntaln "41/ley FtJJ/erti:Jn 6erden &ave ~tTBBBcil Irvine lJJ Hltbrs ls Palms Los Alamitos Nrwporc S.ach Orange Placentia Saf1'11-Aoa Seal Beach &anton Tustin Vi(ls Parle Yorba Linda Dlurlcts Costa Mess Midwey Gity Jrvme Ranch •RANGE COUNTY SANITATION DISTRICT July 7, 2004 NOTICE OF MEETING FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JULY 14, 20.04-5:00 P.M. DISTRICT'S ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 WWW.OCSD.COM A regular meeting of the Finance, Administration and Human Resources Committee of the Board of Directors of the Orange County Sanitation District, will be held at the above location, date and time. To maintain world-class leadership in wastewater and water resource management. FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING DATES FAHR Committee Meeting Date July 14, 2004 August -Dark September 8, 2004 October 13, 2004 November 10, 2004 December 8, 2004 January -Dark February 9, 2005 March 9, 2005 April 13, 2005 May 11, 2005 June 8, 2005 Board Meeting Dates *July 21, 2004 August25,2004 September 22, 2004 October 27, 2004 *November17,2004 *December15,2004 January 26, 2005 February 23, 2005 March 23, 2005 April 27, 2005 May 25, 2005 June 22, 2005 *Meetings being held the third Wednesday of the month. ROLL CALL FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Meeting Date: July 14. 2004 Time: 5:00 p.m. Adjourn: ___ _ COMMITTEE MEMBERS Brian Brady (Chair) Roy Moore (Vice Chair) -Patricia Bortle Mike Duvall Bill Dalton Shirley McCracken Joy L. Neugebauer James W. Silva Steve Anderson (Board Chair) Jim Ferryman (Board Vice Chair) OTHERS Tom Woodruff, General Counsel Don Hughes STAFF Blake Anderson, General Manaoer Carol Beekman, Director of Communications & Administrative Services David Ludwin, Director of Engineering Bob Ooten, Director of O & M Lisa Tomko, Director of Human Resources Garv Streed, Director of Finance/Treasurer Patrick Miles, Director of Information Technology Robert Ghirelli, Director of Technical Services Mike White, Controller Penny Kyle, Committee Secretary c: Lenora Crane AGENDA REGULAR MEETING OF THE FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JULY 14, 2004, AT 5:00 P.M. ADMINISTRATIVE OFFICE 10844 Ellis Avenue Fountain Valley, California 92708 www.ocsd.com Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the District's 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. Items 1'1-J0t P0sted: 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 because there is a need to take immediate action, which need came to the attention of the Committee subsequent to the posting of 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. Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Board Secretary's office at (714) 593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Items Continued: Items may be continued from this meeting without further notice to a Committee meeting held within five (5) days of this meeting per Government Code Section 54954.2(b)(3). Meetin"q Adiournment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955 (posted within 24 hours). (1) ROLL CALL (2) APPOINTMENT OF CHAIR PRO TEM. IF NEzCESSARY Book page I July 14, 2004 (3) 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 three 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). (4) REPORT OF COMMITTEE CHAIR (5) REPORT OF GENERAL MANAGER (6) REPORT OF DIRECTOR OF FINANCE (7) REPORT OF DIRECTOR OF HUMAN RESOURCES (8) REPORT OF DIRECTOR OF COMMUNICATIONS & ADMINISTRATIVE SERVICES (9) REPORT OF GENERAL COUNSEL (10) CONSENT CALENDAR ITEMS Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same, as follows: ~•,•--• .. •••••H•••••••,..•••,...u•••,.-••••••• .. ••on.-.••. ••• 0 ••••••· .... • .. •••• .. •• .. •• .. •· .. ••••••••• .. ••U••••••••• .. o,.,.,,,,,, • .,.,,,-.. ,,_.,,,uo• ... •.....:•• ... •••ow•oo•••••••••••••••••..-•--••n•,_,,l,,,.-,:""' .. ••••••• .. ,...•••••••••._.ut••.oHoo .. ••""•••"'. ••• .• .... •• .. •••••• .. •••'1,, [All matters placed on the consent calendar are considered as not requiring discussion or further explanation and l l unless any particular item is requested to be removed from the consent calendar by a Director or staff member, j )here will be no separate discussion of these items. All items on the consent calendar will be enacted by one j ]action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All ! ptems removed from the consent calendar shall be considered in the regular order of business. j ! ~ jThe Chair will determine if any items are to be deleted from the consent calendar. ! ;• .. ••••••••••••nnu,_.,,,.,,,,.,.,,,,,, .. ,,,,,...,, .. ._ ..... ,,, .. ,,.n oooo<>•M·••••••,-•••-•,_...•••"· ·•·•• .... •••••·•,..• ..... , •• ,.... ................ , ••••_,', • , ooo,oon••••••••·•• .. • .. ••• .. ••-•-••...,·•••H••••uoi••" . .,,,, ..... ,,...," ••• • •• .. •••••....... ...... ~U••n•••••••••••u•••••: a. Approve minutes of the June 9, 2004, Finance, Administration and Human Resources Committee meeting. b. FAHR04-61 Recommend to the Board of Directors to receive and file Treasurer's Report for the month of June 2004. The Treasurer's Report will be C!iistributed 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 Book page 2 July 14, 2004 c. FAHR04-62 Receive and file Certificates of Participation (COP) Monthly Report. d. FAHR04-63 Receive and file Employment Status Report as of June 17, 2004. e. FAHR04-64 Receive and file OSHA Incidence Rates and Workers' Compensation Claims and Costs Report. f. FAHR04-65 Recommend to the Board of Directors to adopt Resolution No. OCSD 04- _, Amending Resolution No. OCSD 98-33, Amending Human Resources Policies and Procedures Manual. END OF CONSENT CALENDAR Consideration of items deleted from Consent Calendar, if any. (11) ACTION ITEMS a. FAHR04-66 Receive, file and approve staff's responses to the Internal Audit Report issued on May 8, 2004 by the District's contracted internal auditors, Moss, Levy & Hartzheim. (Mike White -15 minutes) b FAHR04-67 Approve Change Order No. 1 to the Purchase Order No. 43620 issued to Moss, Levy & Hartzheim as the District's internal auditor for fiscal year 2004/05, for an amount not to exceed $19,260. (Mike White -5 minutes) c. FAHR04-68 Recommend to the Board of Directors to adopt Resolution No. OCSD 04-_, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for FY 2004-05; and Repealing Resolution No. OCSD 03-17. d. FAHR04-69 Recommend to the Board of Directors to adopt Ordinance No. OCSD-24, Adopting Revised Table G re Permittee Charges for Use and Reaffirming All Other Charges, an Ordinance of the Board of Directors of Orange County Sanitation District, Establishing Sanitary Sewer Service Charges; Establishing Capital Facilities Capacity Charges; Adopting Miscellaneous Charges and Fees Relating to Industrial Chargers, Source Control Permittees and Wastehaulers; and Repealing Ordinance No. OCSD 22 (Gary Streed -30 minutes) (12) INFORMATIONAL PRESENTATIONS a. FAHR04-70 Communications Services Strategic Plan Quarterly Update 3 Book page 3 July 14, 2004 (Carol Beekman -15 minutes) (13) CLOSED SESSION • •-••...,••~H•Hoh,.•-••••• .. •• ... • "' • ........ ••-••H••..i•••Mo•••-••••••·•• .. •••••••~• ....... •"14"•• ... ·• .. ••••••·-••• .... •• .. u•• .. ••• .. •"000,,,_,,,,_,.,,o...,. , . .-.,, ... , .... _,, .. ..__, .... H ..... _,_,,,..,,,,,,_,,,,0,,-.., ...... ,, ...._.,,u ,,,,o ••••'" -• <o < .,,, ... ~,, .... , .. ,,, 0 ! During the course of conducting the business set forth on this agenda as a regular meeting of the ! ! Committee, the Chair may convene the Committee in closed session to consider matters of pending real \· f estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code I i Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. L i i ! Reports relating. to (a) pumhase and sale-of real property; (b) matters of penqing or potential litigation; (c) j ! ernployee actions or negotiations with employee rep_res~r:,tatives; or which are exempt from public disclosure i j under the California Public Records Act, may be reviewed by the Committee during a permitted closed l i s·esslofl ahd are no1 available f6r public in-spection. At such time as final actions <!.re taken by the Committee 1 ! on any of these sul:>j~cts, the minutes Will reflect all required disclosures of information. j ~ U~OHOOH•-•-•••u••• ................ • ,...,,uu • •~••uo•••• .... ••• ...... _, .......... •••••• .... ••••••• .. •••OO••-••••••• .. •••••• .... ••• .......... '"tl"'"'''___.,,,,o.,.n•••·••• .. ••• .. •• • •••••• .. ••••n••••o• .. ••-o•·••• ................ ••••••• .. •· .. ,r •••••· • "·'"'••••-~••H,o ! a. Convene in closed session. b. Reconvene in regular session. c. Consideration of action, if any, on matters considered in closed session. (14) OTHER BUSINESS, COMMUNICATIONS CH SUPPLEMENTAL AGENDA ITEMS, IF ANY (15) MATTERS WHICH A DI RECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT (16) FUTURE MEETING DA"fES The next Finance, Administration and Human Resources Committee Meeting is scheduled for September 8, 2004, at 5 p.m. (17) ADJOURNMENT : .......... ~................. .. ........... ~ ......... ,. , .. • •• , .... , ... • .................................. ~ •• ~• •·•• • ......... •-·••~·•••--.. ••• .. • ...... H .............. T .... H ........... , ... , .... r•••r0 •••--~ ....... ,..._ .................... , •• ., •• .... , .. ~ .............................. : ! Notice to Committee Members: ! i 1 i i j For any questions on the agenda or to place any items on the agenda, Committee members should contact the i }Committee Chair or Secretary ten days in advance of the Committee meeting. \ : i I committee Chair: Brian Brady (949) 453-5300 i \J::onimlttee Secretary: Penny Kyle (714) 593-7130 pkyle@ocsd.com \ jGen~ral Manager Blake Anderson (714) 593-7110 banderson@ocsd.com ! \Director of Finance Gary Streed (714) 593-7550 gstreed@ocsd.com \ ]Director of Human Resources Lisa Tomko (714) 593-7145 ltomko@ocsd.com ! jDirector of Communications & Carol Beekman (714) 593-7120 cbeekman@ocsd.com ( l Administrative_ Services ................................... -........................... , .................. _ ............................................ _ ..... -........................... _............... .............................. ! H:\dept\agenda\FAHR\FAHR2004\0704\01.3.071404 FAHR Agenda.doc 4 Bookpage4 July 7, 2004 FAHR COMMITTEE AGENDA CALENDAR Month Item Action August No meeting scheduled September General Manager Approved Purchases Action September SWAP Status Report (4th Quarter) Action September Investment Management Report (4th Quarter) Action October Communication Plan Quarterly Update Information October Consider Structure of 2005-06 COP Offering Action November FY03/04 Comprehensive Annual Financial Report Action November Investment Management Report (1 st Quarter) Action November SWAP Status Report (1 st Quarter) Action November Financial Report (1 st Quarter) Action November Employee Reclassification Recommendations Action Book page 5 MINUTES OF FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING Orange County Sanitation District Wednesday, June 9, 2004, 5:00 p.m. A meeting of the Finance, Administration and Human Resources Committee of the Orange County Sanitation District was held on June 9, 2004, at 5:00 p.m., in the District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: (2) FAHR COMMITTEE MEMBERS: Directors Present: Brian Brady, Chair Roy Moore, Vice Chair Bill Dalton Mike Duvall Joy Neugebauer James W. Silva Shirley McCracken, Board Chair Steve Anderson, Vice Board Chair Directors Absent: Patricia Bortle APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS There were no public comments. (4) REPORT OF THE COMMITTEE CHAIR STAFF PRESENT: Blake Anderson, General Manager Gary Streed, Director of Finance/Treasurer Lisa Tomko, Director of Human Resources Mike White, Controller Jeff Reed, Human Resources Manager Lisa Arosteguy, Human Resources Supervisor Jan Collins, Senior Human Resources Analyst Penny Kyle, Committee Secretary OTHERS PRESENT: Tom Nixon, General Counsel Don McLean Don Hughes Bob Lockhart Chair Brady reported that the FAHR Committee would be meeting on July 14 at 5:00 p.m. (5) REPORT OF THE GENERAL MANAGER Blake Anderson advised that Sacramento was discussing different proposals that would include a much larger take of the District's ad valorem taxes, and reported he would keep the Directors apprised. Book page 6 Minutes of the Finance, Administration and Human Resources Committee Meeting Page 2 June 9, 2004 (6) REPORT OF DIRECTOR OF FINANCE/TREASURER The Director of Finance/Treasurer had no report. (7) REPORT OF DIRECTOR OF HUMAN RESOURCES Lisa Tomko, Director of Human Resources, announced that Jan Collins was leaving employment with the District and moving out of state. Her replacement had begun employment earlier that month. (8) REPORT OF COMMUNICATIONS SERVICES MANAGER The Communications Services Manager was not present. (9) REPORT OF GENERAL COUNSEL Tom Nixon, General Counsel, reported the District has been served with a lawsuit by SAWPA that attempts to establish the term sheet as a binding agreement. He advised the lawsuit would be defended very aggressively, and depositions for the principals would be scheduled in the near future. (10) CONSENT CALENDAR ITEMS a. Approve minutes of the May 12, 2004, Finance, Administration and Human Resources Committee meeting, as corrected. b. FAHR04-46 Recommend to the Board of Directors to receive and file Treasurer's Report for the month of May 2004. c. FAHR04-47 Receive and file Certificates of Participation (COP) Monthly Report. d. FAHR04-48 Receive and file Employment Status Report as of May 26, 2004. e. FAHR04-49 Receive and file OSHA Incidence Rates and Workers' Compensation Claims and Costs Report. f. FAHR04-50 Receive and file report of General Manager approved purchases in amounts exceeding $50,000 in accordance with Board purchasing policies. g. FAHR03-51 Receive and file SWAP Report for the quarter ended March 31, 2004. h. FAHR04-52 Receive and file update on Health Insurance Benefit Program for FY04/05 (Information only). i. FAHR04-53 Recommend to the Board of Directors to authorize the General Manager to issue a purchase order contract to Dharma Consulting to provide continuing professional services to assist executive and senior staff with ongoing strategic planning, executive management team coaching and team development; and staff team building, for a monthly amount not to Book page 7 Minutes of the Finance, Administration and Human Resources Committee Meeting Page 3 June 9, 2004 MOTION: exceed $15,000 for a maximum of nine months effective July 1, 2004. It was moved, seconded and duly carried to approve the recommended actions for items specified as 1 0(a) through (i) under Consent Calendar. END OF CONSENT CALENDAR (11) ACTION ITEMS a. FAHR04-54 Recommend to the Board of Directors to adopt Resolution No. OCSD 04- MOTION: _, Amending Resolution No. OCSD 98-33, Amending Human Resources and Policies Procedures Manual, providing for: (1) Change the title of current classification Communications Services Manager at pay grade 94 {$8,001 -$10,001) to Director of Communications and Administrative Services. There is no recommended pay grade change at this time; (2) Create the Security and Risk Management Specialist classification at pay grade 82 ($5,949 -$7,436); (3) Create the Assistant Board Secretary classification at pay grade 67 ($4,108 -$5,135); (4) Create the Planner/Scheduler classification at pay grade 80 ($5,663 - $7,079); (5) Create the Cost Estimator classification at pay grade 80 ($5,663 - $7,079); (6) Revise the Storekeeper job family as follows: (a) Create the Lead Storekeeper classification at pay grade 62 ($3,630 -$4,538); (b) Change the title of the current classification Storekeeper II at pay grade 58 ($3,290 -$4, 112) to Senior Storekeeper. There is no recommended pay grade change at this time; (c) Change the title and pay grade of the current classification Storekeeper I at pay grade 54 ($2,980 -$3,725) to Storekeeper at pay grade 52 ($2,837 -$3,546); and, ( d) Delete the classification of Storekeeper Assistant at pay grade 46 ($2,445 -$3,056). It was moved, seconded and duly carried to recommend approval to the Board of Directors. Book page 8 Minutes of the Finance, Administration and Human Resources Committee Meeting Page4 June 9, 2004 Chair Brady reported that Item 11 (b) would be considered after Items 11 (c) -(g). c. FAHR04-56 Recommend to the Board of Directors to renew the District's Excess MOTION: Workers' Compensation Insurance for the period July 1, 2004 through June 30, 2005, in an amount to be determined. Don McLean, the District's insurance broker, reported on the excess workers' compensation insurance market, and advised that the renewal premium should not exceed $210,000 per year, an increase of approximately 28%. He reported bids were requested from several insurance carriers but to date none had responded. It was moved, seconded and duly carried to recommend approval to the Board of Directors to renew the District's Excess Workers' Compensation Insurance for the period July 1, 2004 through June 30, 2005, in an amount not to exceed $210,000. d. FAHR04-57 Recommend to the Board of Directors to renew the District's Excess MOTION: General Liability Insurance Program tor the period July 1, 2004 through June 30, 2005, in an amount to be determined. Don McLean of Driver Alliant reported CAMEL (California Municipal Excess Liability Program) has not released their renewal premium. However, he anticipates it will be available to present to the Board of Directors at the June 23rd meeting. He forecasted the increase would not exceed $425,000, an increase of approximately 35%. It was moved, seconded and duly carried to recommend approval to the Board of Directors to renew the District's Excess General Liability Insurance Program tor the period July 1, 2004 through June 30, 2005, in an amount not to exceed $425,000. e. FAHR04-58 Recommend to the Board of Directors to renew the District's Boiler & MOTION: Machinery Insurance Program for the period July 1, 2004 through June 30, 2005, in an amount not to exceed $27,654. It was moved, seconded and duly carried to recommend approval to the Board of Directors. f. FAHR04-59 Recommend to the Board of Directors to renew the District's All-Risk MOTION: Property and Flood Insurance Program for the period July 1, 2004 through June 30, 2005, in an amount not to exceed $729,388. It was moved, seconded and duly carried to recommend approval to the Board of Directors. Book page 9 Minutes of the Finance, Administration and Human Resources Committee Meeting Page 5 June 9, 2004 g. FAHR04-60 Recommend to the Board of Directors to direct staff to proceed to MOTION: evaluate non-residential parcels to determine if they have been undercharged for annual sewer service user fees and , if so, to collect the proper charges on the property tax bill in the future. Bob Lockhart of Revenue Enhancement Group addressed the Directors and thanked Director Duvall for visitin g his organization. He stated he did not agree with the facts as stated in Director Duvall's May 24th report regarding the Register and Kimberly-Clark. Mr. Lockhart had no opinion regarding how many years to go back for over/under charges. His only concern was the possibility of creating two distinct classes if the Board approved to not go back for four years. Director Duvall discussed his findings with the Committee after his meetings with Mr. Lockhart and District staff, and the three options available to resolve the issue. He advised he had received a new proposal from Revenue Enhancement Group for $1.8 million to review 20,000 parcels at a cost of $90 per parcel. He noted that the opportunity had been missed to include the updated information on the property tax roll for this year. Directors then discussed the pros and cons of preparing an RFP, sole- sourcing the project, or to direct staff to do the work for a cost of approximately $750,000. Blake Anderson, General Manager, reported staff was ready to move forward with the project, and if they discovered they were not able to complete the task in a timely and efficient manner, they would advise the FAHR Committee. He felt it was important that District staff perform the person-to-person contact that would be required in this project. A motion was moved and seconded to direct staff to improve the database in-house over an extended time period using temporary employees and to determine at a later time the number of years to go back for under/over charges. A substitute motion was moved and seconded to direct staff to conduct a formal RFP process, compare the results to the costs to complete the process in-house and return to the FAHR Committee with a recommendation. The substitute motion failed by a vote of six nays and two ayes. It was moved, seconded and duly carried to recommend approval to the Board of Directors direct staff to improve the database in-house over an extended time period using temporary employees and to determine at a later time the number of years to go back for under/over charges. Book page 10 Minutes of the Finance, Administration and Human Resources Committee Meeting Page6 June 9, 2004 b. FAHR04-55 Recommend to the Board of Directors to approve proposed Operating, MOTION: Capital, Debt/COP Service and Self-Insurance Budgets for 2004/05, as follows: Net Joint Works Operating/Working Capital Worker's Compensation Self Insurance General Liability and Property Self-Insurance Collection System Operating Net Capital Improvement Program Debt/COP Service $83,614,140 735,000 1,141,000 22,605,790 231,223,600 41,917,000 Di rector of Flnance[freasurer Gary Streed and Mike White, Controller, reviewed the basic elements of the proposed FY 04/05 Budget. Directors commended Mr. Streed and his staff for a well-prepared and easy to use document. It was moved, seconded and duly carried to recommend approval to the Board of Directors. (12) INFORMATION PRESENTATIONS There were none. (13) CLOSED SESSION There was no closed session. (14) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There were none. (15) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. (16) CONSIDERATION OF UPCOMING MEETINGS The next FAHR Committee meeting is scheduled for July 14, 2004 at 5 p.m. (17) ADJOURNMENT The Chair declared the meeting adjourned at 6:49 p.m. Book page 11 Minutes of the Finance, Administration and Human Resources Committee Meeting Page 7 June 9, 2004 Submitted by: '.ti1c1t , H:\dept\agenda\FAHR\FAHR2004\0604\060904 FAHRdraft Minutes.doc Book page 12 FAHR CO MM ITTEE Meeting Date To Bd. of Dir. 07/14/04 AG ENDA REPORT Item Number Item Number FAHR04-62 Orange County Sanitation District FROM: Gary G. Streed, Director of Finance Originator: Michael D. White, Controller SUBJECT: CERTIFICATES OF PARTICIPATION (COP) MONTHLY REPORT -JUNE 2004 GENERAL MANAGER'S RECOMMENDATION Receive and file Certificates of Participation (COP) Monthly Report for the month of June 2004. SUMMARY The District began issuing Certificates of Participation (COPs) on a variable interest rate basis in 1990. These variable rate COPs were a part of our long-term financing plan which also included some more traditional fixed rate borrowing. In 1992 and 1993, some of the fixed rate COPs were refunded and replaced with synthetic-fixed rate COPs. These are variable interest rate COPs that are also subject to a long-term fixed-rate interest exchange agreement (SWAP). The SWAP provides the maximum interest rate to be paid by the District, and is less costly than traditional fixed rate borrowing. In August 2000, the entire financing program was restructured and modernized to incorporate and take advantage of the consolidation of District books of account and revenue structure. This process has reduced the number of COP issues from five to three; 1992 Refunding COPs, 1993 Refunding COPs and 2000 Refunding COPs. The 2000 COPs can be divided into Series A and Series B, if additional remarketing agents are desired. In August 2003, the District issued $280 million of fixed rate COPs, Series 2003, that have varying coupon rates that are matched against the varying maturity dates. The true interest cost for the entire issue is 5.15 percent. Variable interest rate COPs can be put back on the market by the buyer each day. When this happens, they must be remarketed or sold to another buyer. This process, called remarketing, is generally provided by a municipal bond underwriter. The remarketing agent sets the interest rate they believe is required to sell the COPs. Some issuers believe that having more than one remarketing agent promotes competition and results in lower interest costs. Staff has monitored variable interest rate issues of other agencies since the inception of our program. The attached charts are described in the "Additional Information" section of this agenda report. They are provided monthly to compare our actual interest rates to a composite index, and to other selected issuers of similar credit quality, and with COP issues of similar amounts. Many variables affect interest rates, but staff expects our rates to be among the lowest. Book page 13 PRIOR COMMITTEE/BOARD ACTIONS N/A 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. D This item has not been budgeted. [gl Not applicable (information item) ADDITIONAL INFORMATION The first graph entitled, "OCSD COP Rate History Report," shows the actual variable interest rates paid 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 "swap." The second bar chart entitled, "Comparative Daily COP Rate History Report," shows the performance of the District's Daily Rate COPs as compared to a composite index rate, which represents the average rate of six similar variable rate daily reset borrowings. The third bar chart entitled, "COP Rate History, Comparison of Hi@hest '& Lowest Rates," compares the perfQrr:nance (monthly averag~e interest rate) 0f the District's Daily Rate COPs with the highest and l0west monthly average rates from among six similar variable rate daily reset COPs. The table entitled, "COP Rate History, Comparison of M01ithly Averages," shows the monthly \lariable interest rate performance of the District's Daily Rate COPs as compi,ared 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 liquidity requirements. The rates tend to decline to prior levels immediately in the following month. Staff maintains continuous rate-monitoring and ongoing dialog with the remarketing agents to keep the Committee fully informed about developments in the program as they may occur. ATTACHMENTS 1. Graph -OCSD CQP Daily Rate Hist9ry Report 2. Graph -Comparative Daily COP Rate History Report 3. Graph -COP Rat~ History, Comparison of Highest .& Lowest Rates 4. Taoular -COP Rate History, Comparison of Monthly Averages GGS:MW:BG H:ldeptlagenda\FAHRIFAHR2004\0704\04-62.COP.doc Revised: 06/04/03 Book page 14 Page2 ---I 170-unr-£Z I I 170-unr-5 I I 170-i{ew-gz I I 170-J{ew-u I I 170•JdV·8Z I I 170•JdV·17~ I-I I >, 0::: 170•Jew-~£ ~~ 0 I o..:.::: C") a, I ma, a. 170•JeW•L~ ·s w I ~N I --m .__ 0::: PO-Jew-£ a, en I Cl) a, , __ > I O.'- 170-qa.:1•8~ ct~ I 3, 0::: Cl) 0. I C: co ~ ~ PO•qa.:1-17 a, 3 0 0W 00 0 0-en 170-uer-~z Cl)<{ -N I :c w 170-uer-L I w z I-£0-:>aa-17z ·co ~ :::J D -, eo-:>aa•o~ >,a, :x:o Q>co (U•-a. £0•AON·9 sro > 0 -c~o a,.Oo 0 £0·AON·Z~ X CO-·-·c-c LL CO C M>co-C . £0·t:>Q·6Z ONC"> 00)0) en N. - en en en 0 Q) Q) Q) £0·J:>O-S~ ·c·c·c Q) Q) Q) 0 C/)C/)C/) £0·t:>Q-~ +++ I'- £O•das•H 0) i-..: (/) :i: eo-das-£ w I-~ ~ CL 00 eo-6nv-oz Q) C'") u M C: ro .._f C: 0 eo-6nv-g ~ 0 ·c, ~ Cl .... Q) ;:::: £0•1nr-ez .9 ai 0 N u C: N ~ ro C: £0•1nr-5 C: u:: ~ ~ >, cg M N .... 0 .l'9 .0 "l:! "O (%) 3.l'o'~ w <ii ~ I-u X ro < _;!1 Q. ~ C 0 CL Book page 15 t:ti 0 0 ~ "O i:., c,q 0 -°' Prepared by Finance, 7/1/2004, 3:38 PM I -::!:! 0 - COMPARATIVE DAILY COP RATE HISTORY REPORT June 2004 4.00 ...--....:-----------------~l----, 3.00 -1-----------------------------------------------1 ~ 2.00 <( 0:: 1.00 . OJ 111, u1 rr 1 m .111 , 111 , m , ~1 J, , J 1 , .1 I DATE 8 8 8 8 8 8 g g g g g g ~ ~ ci ~ > u c ~ ~ ~ ~ c ~ ~ m O o ID ro ID ro ~ ro ~ ' ~ ~ Z o , ~ 2 ~ 2 , El OCSD COP Series '93 and 2000 •COMPOSITE INDEX G:\excel.dtalfin\2220\geggi\Finance\dailycopintrate.xls -~ 0 -w ~ 1.5 1.25 1 - 0.75 0.5 I ••••• HIGH LOW ISB/IRWD ~fBYbllBWP ttl Jan, 04 Feb, 04 COP DAILY RATE HISTORY COMPARISON OF HIGHEST & LOWEST RATES •• ••• ::: ••• ••• ••• ••• ••• ••• ••• ... ••• ... ., ii·:: • • • • :.: ••• ••• ... ••• ••• ••• ••• ••• ••• ••• Mar, 04 llllII Ili 11111. it[~l~~j[[t Apr, 04 !If !I 111111 1 !!!! 1\111 May, 04 IPW/IRWD I IPW/IRWO I IPW/OCSD I IPW/OCSD I Mffil'.l llRWQMfBYLIIBWQMERVl IIRWQMEBYLOBWQ Iii Highest rate • OCSD COP Series '00-PW • OCSD COP Series '93-PW • Lowest rate :l: • • ; . ; i • • ••• ••• ••• tt ti: pi 1ft ;•• tt :: •• :: IPW/0CSD MfRVUIRWQ Jun, 04 G:\excel .dta\fin\2220\geggi\Finance\RA TEHI ST_ HI LO _bargraph Prepared by Finance, 7/1/2004, 3:38 PM 7 to 0 ~ "C ~ -00 Prepared by Finance, 7/1/2004, 3:38 PM Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 AVERAGE DAILY COP RATE HISTORY COMPARISON OF MONTHLY AVERAGES JUL 2003 -JUN 2004 OCSD $218.6M $46M Series 2000 Series 93 Ref Composite Paine Webber PaineWebber Index* 0.67 0.67 0.68 0.77 0.77 0.76 0.89 0.89 0.88 0.89 0.89 0.88 1.06 1.06 1.05 1.00 1.00 0.99 0.88 0.88 0.87 0.87 0.87 0.86 0.94 0.94 0.92 1.01 1.01 1.00 1.05 1.05 1.03 1.02 1.02 1.00 0.92% I 0.92% 0.91% ESTIMATED ANNUAL INTEREST PAYMENTS PER $100M PAR AMOUNT $ 920,833 f $ 920.833 I$ 910,000 * FOOTNOTE Composite index consists of the following COP transactions: . IRWD, Series 86-COP, 88, 95, $106.1M, Solomon Smith Barney . IRWD, Series C-Ref 93-B, 85-B, $62.1 M, Lehman Brothers . IRWD, Series 91, 93, 85, $93.0M, PaineWebber . IRWD, Series 89, C-Ref 93-A, C-Ref 95, $70.9M, Merrill Lynch . Western Riverside Co. Reg. Wastewater Auth., Series 96, $25.4M, PaineWebber . Orange Co., Irvine Coast Asst. Dist. 88-1 , $94.5M, J.P. Morgan G:\excel.dta\fin\2220\geggi\Finance\COPdaily$rate comparison FAHR COMMITTEE Meeting Date 07/14/04 AGENDA REPORT Item Number FAHR04-63 Orange County Sanitation District FROM: Lisa Tomko, Director of Human Resources Originator: Lisa Arosteguy, Human Resources Supervisor SUBJECT: EMPLOYMENT STATUS REPORT AS OF JUNE 17, 2004 (FISCAL YEAR 2003-2004 EMPLOYMENT FIGURES) GENERAL MANAGER'S RECOMMENDATION Receive and file the Employment Status Report SUMMARY The number of full-time equivalent (FTE) employees at the District is 571. 75 as of June 17, 2004. PRIOR COMMITTEE/BOARD ACTIONS NIA 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. D This item has not been budgeted. t8] Not applicable (information item) ADDITIONAL INFORMATION The actual number of employees (headcount) was 582 as of June 17, 2004. To Bet of Dir. Item Number • Shane Milligan promoted from Maintenance Worker to a Mechanic (Regional Assets and Services) H:\dept\agenda\FAHRIFAHR2004\0704\04-63.Emp Status Rapt.doc Revised: 06/04/03 Book page 19 Page 1 There were two new hires: • Associate Engineer Ill (O&M Process Engineering) • Principal Human Resources Analyst (Human Resources Administration) There were two terminations: • Principal Human Resources Analyst (Human Resources Administration) • Human Resources Analyst (Employee Development) ALTERNATIVES N/A CEQA FINDINGS N/A ATTACHMENTS 1. June 17, 2004 Employment Status Report 2. Performance compared to budgeted FTE's H:\deptlagenda\FAHRIFAHR2004\0704\04-63.Emp Status Rapt.doc Revised: 06/04/03 Bookpage20 Page2 to 0 0 :,;-- "c:J i t-> - DIV 110 General Management Admin 120 Administrative Services 130 Communication Services General Management Totals 210 Finance Administration 220 Accounting 230 Purchasin~ W_arehousing Finance Totals 510 Human Resources Admin Interns Intern Program (510) 520 Employee Development 530 Safety & Health 640 Human Resources 640 Planned Recruitments Human Resources Totals 610 Technical Services Ad min 620 Environmental Comp & Mont 630 Environmental Laboratory 640 Source Control Technical Services Totals 1710 Engineering Admin :7 40 Planning 750 Project Management Office 760 En_gine_e,ring & Construction Engine_l!ri_rl_g Totals 810 O&M Administration 420 Collection Facilities Mtce 430 F acililies Maintenance 820 O&M Process Support 830 Plant 1 Operations 840 Plant 2 Operations 850 Mechanical Maintenance 860 Electrical & Instrumentation Mtce 880 Air Quality_ & Special Projects Operations & Maintenance Totals 910 IT Administration 930 Customer & Network Support 940 Programming & Database Sys 950 Process Controls Integration Information Technology Totals GRAND TOTAL FTEs HEADCOUNT REG 2.00 7.00 7.00 16.00 2.00 18.00 19.00 39.00 5.00 3.00 7.00 6.00 2.00 23.00 2.00 21 .00 36.00 40.00 99.00 3.00 14.00 14.00 48.00 79.00 3.00 29.00 32.00 14.00 40.00 46.00 56.00 54.00 11.00 285.00 2.00 17.00 12.00 13.00 44.00 585.00 585 EMPLOYMENT STATUS REPORT AUTHORIZED FTE ACTUAL FTE Recruitments '};;r,.:;:;,:,:,.;~I 0.50 0.75 0.50 0.50 0.50 0.50 9.00 9.00 1.00 1.00 0.75 0.75 0.50 0.75 0.50 0.75 11.50 1.50 == 23 2 TOTAL 2.00 7.50 7.00 16.50 2.00 18.00 19.50 39.50 5.00 9.00 3.00 7.00 6.00 2.00 32.00 2.00 21.00 37.00 40.00 100.00 3.00 14.00 14.75 48.00 79.75 3.00 29.00 32.00 14.50 40.75 46.00 56.00 54.00 11.00 286.25 2.00 17.00 12.00 13.00 44.00 REG 0 50 0 75 LOA 2 00 5 00 7 00 14.00 2 00 17 00 17 00 36.00 4 00 200 6_00 6 00 1.00 19.00 2_00 1800 35 00 40.00 95.00 3 00 13.00 11.00 47 00 74.00 3 00 26.00 3200 14.00 38,00 45.00 56.00 53,00 11.00 278.00 2.00 14.00 11,00 11.00 38.00 554.00 = 0 50 0.50 0.50 0,50 1.00 550 5.50 0 50 2 00 2.50 9.50 554 __ 1_9_ ---- 1-00 1.00 2 00 2.00 1 50 1 00 1.50 1.00 0.75 1 00 0.75 1.00 1 00 1.00 2.25 6.00 = 3 --6- TOTAL 2.00 6.50 7.00 15.50 200 17.50 17.50 37.00 400 5.50 2.00 6.00 6.00 1 00 24.50 2 00 20.50 37 00 40.00 99.50 3.00 1300 12.50 4800 76.50 300 26.00 3200 14.00 38 75 45.00 5600 54.00 1100 279.75 2 00 15.00 1100 11.00 39.00 1 00 mo 2.00 2,00 2.00 1.00 2.00 1.00 1.00 5.00 1.00 1.00 2.00 3 00 1,00 4.00 2 00 2.00 4.00 i .G(1 1.00 G,::·;t: :~ (/J :~.f;(j 1 :.:: J/,·~: 1 (/J 1 (/: ·1 ..'.~G .. o ~·:v 1 f/j i:.:h, ~.2.~~ :~f;('i C ~?. U; 1 .(:Ci {:;,[;() ?J. ?, t:(! IU)D '"'"°'""" m O ACffiAUff : ' S.o="" TOTAL I TOTAL I Total 598.00 571 75 19_00 +I 'l of;;l Vac;;;tefr~s r,:: '.: ~ : ~:: ~: t:! :!t::: ·. i.25 H:\540\open\Recruiting_shared\03-04 Position Control-EMT REPORT 6/24/2004 STAFFING REPORT 600 590 580 570 -1 -- II to I 560 0 0 Iii el :,;-' 'e I 550 ~ (1) N I t ·-• N -II " 540 530 520 510 AUG I SEP I OCT I NOV DEC JAN FEB MAR APR MAY JUN --+-AUTHORIZED I 596 596 I 596 I 596 596 596 596 596 596 596 598 FTE -•ACTUAL I 544.75 I 544.25 I 545.25 I 548.25 I 552.25 I 558.25 I 558.75 I 559.75 I 564.75 I 567.75 571.75 FTE FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Lisa L. Tomko, Director of Human Resources Originator: Jim Matte, Safety & Health Supervisor Meeting Date To Bd. of Dir. 07/14/04 Item Number Item Number FAHR04-64 SUBJECT: OSHA INCIDENCE RATES AND WORKERS' COMPENSATION CLAIMS AND COSTS REPORT GENERAL MANAGER'S RECOMMENDATION Receive and file the OSHA Incidence Rates and Workers' Compensation Claims and Costs Report. SUMMARY Safety and Health Division staff track OSHA Incidence Rates for DART* Cases (DART Incidence Rate) and Total Accidents (Total Injury Frequency Rate). There were seven DART Cases District-wide for the period of January-May 2004. The industry average is 4.5 for the DART Case Incidence Rate while the District Incidents Rate was 3.03 for the period of January-May 2004. There were eight OSHA Recordable Accidents District- wide for the period of January-May 2004. The industry average is 7.3 for the Total Injury Frequency Rate while the District Incidents Rate was 3.46 for the period of January-May 2004. The Division also tracks the District's Workers' Compensation Claims and Costs. The District's claim count for Fiscal Year 2003-2004 is 14. The costs associated with these claims for year-to-date is $70,712, which includes medical bills, temporary disability payments, legal costs and a claim reserve account. * DART -Days Away, Restricted or Transfer; replaces Lost Work Day. PRIOR COMMITTEE/BOARD ACTIONS N/A PROJECT/CONTRACT COST SUMMARY N/A Revised: 06/04/03 Book page 23 Page 1 BUDGET IMPACT • • ~ This item has been budgeted. (Line item: ) This item has been budgeted, but there are insufficient funds. This item has not been budgeted. Not applicable (information item) ADDITIONAL INFORMATION The District had seven DART cases and one other injury that required only medical treatment for the period of January-May 2004. The reporting period is for 45 days prior to committee meeting. ALTERNATIVES N/A CEQA FINDINGS N/A ATTACHMENTS 1. OSHA Incidence Rates Reports for DART Cases and Total Injuries 2. Workers' Compensation Claims and Costs · Revised: 06/04/03 Book page 24 Page2 Safety and Health Division DART Cases District-Wide There were seven DART Cases in January-May 2004 (DART-Days Away, Restricted or Transfer; replaces Lost Work Day.) ~ 25 ::l 20 ~ 15 0 11 10 E 5 ~ 0 2000 DARTCases - 2001 2002 Calendar Year 2003 2004 OSHA Incidence Rates District-Wide The industry average is 4.5 and the DART Incidence Rate for the District was 3.03 for January- May 2004. The OSHA DART Case Incidence Rate is calculated by multiplying the number of injuries by 200,000 and dividing the sum by total hours worked. The rate is also based on the data for the calendar year so the rate will change as the number of hours worked increases. .S! co c::: Q) u C Q) 32 u -= 2000 OSHA Incidence Rates DART Cases 2001 2002 Calendar Year 2003 2004 Book page 25 Total Injuries District-Wide There were eight OSHA Recordable Accidents in January-May 2004 40 ci.!!3 30 ._ C Q) Q) ~~ :::I 0 z <( 0 Total OSHA Recordable Accidents 2000 2001 2002 calendar Year 2003 2004 OSHA Incidence Rates District-Wide The Total Injury Frequency Rate is a combination of the DART Cases and the cases that require Other Medical Treatment. The industry average for Total Injury Frequency rate is 7.3 and the District rate was 3.46 for January-May 2004. First Aid cases are not included in the calculation of this rate. OSHA Incidence Rate Total Injuries 2000 2001 2002 Calendar Year 2003 2004 Book page 26 Workers' Compensation Claims and Costs The Workers' Compensation Claims and Costs are reported by fiscal year. The DART and Total Injury graphs shown above are calendar year rates as required for OSHA recordkeeping. All claims and medical invoices are reviewed by a third party to ensure that proper medical treatment is provided for injured employees and the costs for the treatment are within established guidelines. The medical bills reviewed July 2003 -May 2004 totaled $264, 113.19. Medical treatment costs are charged to the fiscal year in which the injury occurred. All open claims have the potential to incur additional costs. After the medical review process, the amount was reduced to $144,237.76, which resulted in savings of $119,875.43 for this reporting period. Workers Compensation Claims and Costs Fiscal Period Claim Count Open Claims Total Incurred 7 /1 /85 -6/30/86 38 0 $270,794 7 /1 /86 -6/30/87 53 0 $99,933 7 /1 /87 -6/30/88 51 0 $173,583 7 /1 /88 -6/30/89 41 0 $153,481 7 /1 /89 -6130/90 61 0 $292,489 7/1/90-6/30/91 76 0 $121,978 7/1/91 -6/30/92 58 2 $224,712 7/1/92 -6/30/93 58 0 $93,198 7 /1 /93 -6/30/94 47 0 $217,922 7 /1 /94 -6/30/95 46 0 $276,359 7 /1 /95 -6/30/96 46 1 $191,323 7 /1 /96 -6/30/97 36 1 $377,924 7 /1 /97 -6/30/98 45 1 $1,026,722 7 /1 /98 -6/30/99 38 2 $263,274 7/1/99 -6/30/00 43 2 $346,859 7 /1 /00 -6/30/01 32 3 $433,748 7/1/01 -6/30/02 30 7 $354,951 7 /1 /02 -6/30/03 18 4 $118,034 7 /1 /03 -6/30/04 14 6 YTD $70,712 "Total Incurred" includes medical bills, temporary disability payments to employees, legal costs, and a claim reserve account. Book page 27 FAHR COMMITTEE Meeting Date To Bd. of Dir. 7/14/04 7/21/04 AGENDA REPORT Item Number Item Number FAHR04-65 Orange County Sanitation District FROM: Lisa Tomko, Director of Human Resources Originator: Lisa Arosteguy, Human Resources Supervisor SUBJECT: CHANGES AND ADDITIONS TO HUMAN RESOURCES POLICIES AND PROCEDURES AS AUTHORIZED BY RESOLUTION 98-33. GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 04-XX, amending Resolution No. OCSD 98-33, amending Human Resources Policies and Procedures Manual. SUMMARY The attached policies are routine updates or additions to maintain consistent language with the Memorandums or Understanding (MOU) and/or new legislation or to explain procedures more clearly. PRIOR COMMITTEE/BOARD ACTIONS Human Resources Policies and Procedures Manual revisions were presented at the February 2004 FAHR and Board of Directors meetings. 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. D This item has not been budgeted. [gJ Not applicable (information item) ADDITIONAL INFORMATION Policy Number From and Subject B150.00 Recruitment Current Language. D11.00 Military Leave H:\dept\agenda\FAHR\FAHR2004\0704\04-65.HR Policies.doc Revised: 06/14/04 N/A To Revised Language. Current Language. Book page 28 Reason for Change Revisions to Internal Process; Housekeeping New Individual Policy - Previously incorporated in Leave of Absence Policy Page 1 ALTERNATIVES NIA CEQA FINDINGS NIA . ATTACHMENTS 1. Resolution No. OCSD 04-XX 2. B150.00, Recruitment 3. D11.00, Military Leave H:ldeptlagenda\FAHRIFAHR2004\0704\04-65.HR Policies.doc Revised: 06/14104 Page2 Book page 29 RESOLUTION NO. OCSD 04-XX AMENDING RESOLUTION NO. OCSD 98-33 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AMENDING THE HUMAN RESOURCES POLICIES AND PROCEDURES ***************************** The Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That Exhibit "A" of Resolution No. OCSD 98-33 is hereby amended by amending Policy No. 8150.00, Recruitment, set forth in Attachment No. 1, attached hereto and incorporated herein by reference. Section 2: That Exhibit "A" of Resolution No. OCSD 98-33 is hereby amended by adding Policy No. 011.00, Military Leave, set fourth in Attachment No. 2, attached hereto and incorporated herein by reference. Section 3: That all other terms and conditions of Resolution No. OCSD 98-33, as previously recommended, shall remain in full force and effect. Section 4: That all future amendments to Resolution No. OCSD 98-33 be made by Resolution. PASSED AND ADOPTED at a regular meeting held July 21, 2004. ATTEST: Board Secretary H:\deptlagenda\FAHRIFAHR2004\0704\04-65.HR Policies.doc Revised: 06/14/04 Chair Book page 30 Page 3 Q .. -- Subject: 1.0 Orange County Policy Number: 8150.00 Sanitation District Effective Date: July 21, 2004 March 24, 2004 RECRUITMENT AND SELECTION Supersedes: March 24, 2004 February 25, 2004 Approved by: Lisa L. Tomko PURPOSE 1.1 The purpose of this policy is to establish uniform guidelines and procedures for Orange County Sanitation District's (OCSD's) recruitment activities. 2.0 ORGANIZATIONAL UNITS AFFECTED 2.1 This policy applies to all OCSD departments, divisions, sections and employees. 3.0 DEFINITIONS 3.1 Recruitment is the process of attracting qualified individuals to apply for jobs that are open within the organization, whether internal or external. 3.2 Internal recruitment means considering only present employees as applicants for job openings within the organization. 3.3 Open recruitment means attracting applicants from outside the organization, as well as internally to apply for job openings within the organization. 3.4 Planned Recruitment is the process of recruiting a candidate for a position held by an existing District employee who plans to retire or leave the agency. 3.5 Probationary Period -Initial as defined in applicable MOU provisions, includes at least the first 6 months or 26 weeks of employment with OCSD beginning with the date of hire. This period is regarded as an extension of the hiring process, and provides an opportunity for both the employee and OCSD management to assess, over a substantial period of time, whether or not the hiring decision was appropriate. 3.6 Probationary Period -Promotional as defined in applicable MOU provisions, includes at least the first 6 months or 120 days of employment with OCSD, beginning with the effective date of promotion. This period is regarded as an extension of the selection process, and provides an opportunity for both the employee and OCSD management to assess, over a substantial period of time, whether or not the decision was appropriate. "At-will" employees do not serve a promotional probationary period. Page 1 of 10 Book page 31 3.7 3.8 Probationary Period -Reassignment or Lateral Transfer as defined in applicable MOU provisions, includes at least the first 26 weeks of employment with OCSD, beginning with the effective date of the reassignment or lateral transfer. This period provides an opportunity for both the employee and OCSD management to assess, over a substantial period of time, whether or not the decision was appropriate. Relative is any person related by one of the following familial relationships to any employee at the agency: spouse, mother, father, brother, sister, child, grandmother, grandfather, grandchild, cousin, aunt, uncle, mother-in-law, father- in-law, brother-in-law or sister-in-law. 4.0 POLICY 4.1 It is OCSD's policy to provide nondiscriminatory, lawful and consistent guidelines and procedures to its agency recruitment processes, whether internal or open. 5.0 PROCEDURE 5.1 PERSONNEL REQUISITION 5.1.1 A personnel requisition is the first step for the hiring manager/supervisor to communicate staffing needs to Human Resources; however, if the recruitment requires testing (hands-on, written, essay, etc.) as part of the interview process, the testing methods must be reviewed for validity and reliability by Human Resources prior to the initiation of a personnel requisition. 5.1.2 The hiring supervisor completes the personnel requisition and receives the appropriate signatures required before sending it to Human Resources. 5.1.3 Human Resources reviews the requisition to make sure the qualifications are appropriate for the position. If changes are necessary, Human Resources will work with the appropriate manager/supervisor. 5.2 EMPLOYMENT OPPORTUNITY BULLETINS/POSTINGS 5.2.1 The recruiter prepares the employment opportunity bulletin, also known as a posting. Each posting will include the following information: • Wage range • Department • Brief job description • Required qualifications • Desired qualifications • Posting/closing dates • Procedure for applying • Brief benefits overview 5.2.2 The recruiter provides the draft posting to the hiring manager for approval. Page 2 of 10 Book page 32 5.2.3 Upon approval, all job postings (except Intern positions) are advertised as internal recruitments for ten business days unless authorized by the HR Di rector and extenuating circumstances apply. During the internai posting process, if there a.Fe' is at least twe one internal applicants an,d #ley he/she meets the minimum qualifications for the position, tRGse that applicants will be Interviewed. It an internal applicant is not selected or if there are no internal applicants, the position shall be advertised as an external recruitment. 5.2.4 Department representatives are provided with postings tor communication within their designated departments. 5.2.5 Bulletin boards at Plant No. 1 where Employment Opportunity Bulletins will be regularly posted are located in the Control Center, and Warehouse, outside the Human Resources Office and in the Administration Building lunchroom. 5.2.6 Internal Job Announcement Notifications are sent via e-mail to all OCSD employees tor internal and external recruitments. 5.2. 7 Employment Opportunity bulletin boards at Plant No. 2 are located in the Operations Center, Maintenance Office, Maintenance lunchroom and Warehouse. 5.2.8 Employment Opportunity Bulletins may also be found in other convenient areas throughout both plants. 5.3 ADVERTISING 5.3.1 Advertising for positions at OCSD ensures positions are filled with the best-qualified candidate for the job. 5.3.2 All positions are advertised on the Internet. Technical and hard-to-fill positions are advertised on trade specific websites. 5.3.3 Trade magazines and other forms of advertising may be used for hard- to-fill or specialized positions. 5.4 APPLICANT SCREENING 5.4.1 Resumes or applications that are received are reviewed and selected tor further consideration only if they meet the minimum job requirements. 5.4.2 The recruiter forwards copies of the resumes or applications of qualified applicants to the hiring supervisor for review. Originals remain in HR in the Recruiting files. 5.4.3 All materials (e.g., applications, resumes, interviewer notes, interview packets, packets, etc.) submitted by applicants/candidates during the interview process are confidential and are considered OCSD property and must be returned to Human Resources upon completion of the hiring process. Page 3 of 10 Book page 33 5.5 INTERVIEW PROCESS 5.5.1 The interview panel members are selected along with the interview date(s). Applicants are scheduled, interview questions are prepared, and the interview panel conducts the actual interview. 5.5.2 The recruiter and the hiring supeNisor work together to select the interview panel. However, the recruiter makes the final decision to ensure consistency. The ideal interview panel will include the hiring supervisor, one employee within the department, two individuals outside the department, and the recruiter, or another member of the Human Resources Department. Normally, subordinates within the hiring department are not included in the interview panel. 5.5.3 The recruiter and the hiring manager work together to establish a set of quesfions for the candidates. 5.5.4 The recruiter prepares interview packets and distributes them to the interview panel. Packets include: • An overview of the interview process • A copy of the interview schedule • A copy of the employment bulletin opportunity/posting • Copies of candidate applications • Interview questions and evaluation forms for each candidate 5.5.5 The interview panel will meet at least one half hour before the interview. The panel will finalize the interview questions that are recommended by the hiring supervisor and the recruiter. The panel may add or delete questions. The panel will gain an understanding from the hiring supervisor about the criteria with which to select the ideal candidate, and adopt the appropriate criteria. 5.5.6 The recruiter facilitates the interview process. When interviews are completed, the interview panel members evaluate each candidate interviewed. The top three candidates are identified and ranked in order of preference based on the criteria established prior to the interview. The recruiter collects the documentation at the end of the interview process. 5.5.7 The final candidate is selected from the top three candidates when a majority decision is reached. If a majority decision cannot be reached, the General Manager or designee will make the final determination based on the input of the hiring supervisor, the panel, and the HR representative. If a majority decision is reached, and the hiring supervisor does not agree with the final decision, he or she may appeal for a final decision from the General Manager or designee. 5.6 RECRUITMENT APPEALS PROCESS 5.6.1 Employees should bring recruitment process and decision-making issues to the attention of the Human Resources Manager as soon as possible. The manager will review the issue and provide a written response within five business days from the issue notification date. Page 4 of 10 Book page 34 5.6.2 If the issue is not resolved to the employee's satisfaction, the employee may file a written statement concerning the problem to the Director of Human Resources within ten business days of receipt of the manager's decision. Upon request by either party, a meeting may be held to discuss the issue and establish remedies. 5.6.3 The employee will be provided a written response from the Director of Human Resources within ten business days after their statement is received. The decision of Human Resources is final (see policy F50,00, Problem Solving Procedure and F60.00, Grievance Procedure). 5.6.4 Time limits may be extended for cause upon mutual consent of the parties. 5.7 EMPLOYMENT OFFERS 5.7.1 The recruiter and hiring supervisor determine an appropriate starting salary for all candidates, except those designated as "at-will" employees, based on a Salary Offer Analysis. This analysis will include the applicant's: • Qualifications • Years of experience • Educational background • Salary history • Parity within the department 5.7.2 The HR Compensation Analyst reviews the recommended salary, and approves or makes additional recommendations. All salary offers that are either at or beyond step 4 of the range will require the approval of the Human Resources Director (or designee). Under no circumstances should panel members (excluding the HR representative) or any other OCSD employee discuss salary offers with candidates or make promises of any kind. HR staff are the only employees authorized to engage in salary discussions with job candidates. 5.7.3 The recruiter completes a status change form for the candidate and initiates the background investigation. Background investigation results are provided to the candidate by OCSD's background screening firm. 5.7.4 When the status change form is approved and the background investigation is clear, the recruiter makes a verbal employment offer to the candidate, which is contingent upon results of a pre-employment physical and drug screening. Upon acceptance of the employment offer, the recruiter sends regret letters to unsuccessful candidates. Internal candidates are contacted personally prior to receiving regret letters. 5.7.5 The recruiter schedules the pre-employment physical for the candidate, works with the supervisor to establish a potential start date and prepares a formal offer letter for the candidate. 5.7.6 When the Safety Manager (or designee) has cleared the pre- employment physical results, the recruiter will contact the applicant to confirm the employment offer. 5.7.7 The recruiter coordinates the candidate's start date. Page 5 of 10 Book page 35 5.7.8 In the event thai a candidate ls selected and voluntarily or invQluntarily vaf;;ates the positiom pri6r to completing the r,equlred six• month probatjonary peri0cf, the HR Department, at the request of the· hiring, mana~er. may ,exercise -the opfa:m to extend an ofter to the second candidate from the er ginat interview process. 5.8 PLANNED RECRUITMENT 5.8.1 In instances where an existing District employee plans to retire or leave the agency, the Department Head may request to initiate the planned recruitment process by notifying the HR Director or designee. If approved, HR shall begin the recruitment process for the anticipated vacancy using the internal recruitment process. HR must have a minimum of six months notice to consider a planned recruitment, a signed memo from the existing District employee stating his/her retirement or leave date, and at least one budgeted but vacant position that the District can borrow from. 5.8.2 The Planned Recruitment process will be initiated, as scheduling permits, prior to the f8tifee individual leaving the District in order to allow for an adequate amount of cross training. 5.8.3 If a candidate is selected from the internal recruitment process, the candidate shall remain in his/her existing position with the same salary and benefits while cross-training in the new position as scheduling permits. 5.8.4 The candidate shall assume the salary, benefits and full range of duties of the vacant position the first business day that the position is vacant The position used to initiate the planned ~ecruitment will then be returned to the "pool" within the Division 540 full-time equivalent (FTE) budget for use with other planned reeruitments. 5.8.5 The date the candidate assumes the vacant position shall be the first day of the candidate's six-month probationary period. The six-month probationary period will be uti'lized as an opportunity for the candidate and District m.anagement to assess Whether or not the decision was appropriate. The candidate may be returned to his/her previous position if the decision is determined to be inappropriate. 5.8.6 If a candidate is not selected from the internal recruitment process, the position will be posted for external candidates immediately to ensure an adequate amount of time for cross-training. 6.0 EXCEPTIONS 6.1 EMPLOYMENT OF FORMER EMPLOYEES 6.1.1 Employment of former employees for full-time equivalent or part-time positions shall be subject to and conducted in accordance with this policy. 6.1.2 Employment of a former employee is subject to the approval of the General Manager and the Director of Human Resources. Page 6 of 10 Book page 36 6.1.3 In all cases, approval of the General Manager and the Director of Human Resources shall be received prior to an offer of employment to a former employee. 6.1.4 OCSD policy prohibits the rehire of former full-time, regular employees or probationary status employees who: were terminated for workplace misconduct; resigned while charges were pending against the employee; resigned while serving a suspension; failed to provide two weeks written notice in advance of resignation, unless approved by the Director of Human Resources or designee; or failed to return to work following an absence without leave of 40 consecutive work hours without notifying the immediate supervisor or human resources and providing an acceptable reason for their absence. 6.1.5 The General Manager may, with the written approval of the Board Chair, employ on a part-time or as-needed basis, a former employee retired from OCSD when the individual possesses knowledge and expertise of unique and particular benefit to OCSD and when the services are required. The length of service performed in any one year shall be limited In accordance with the provisions prescribed by the Orange County Employees' Retirement System (currently 120-day maximum). 6.1.6 Part-time or as-needed service shall be compensated at the same current hourly rate of the retired employee's position classification, or it no such classification exists, at a rate not to exceed that paid for the most comparable classification. The retired employee shall not be entitled to receive any benefits otherwise payable to OCSD employees. In the event any employment under this provision involves work assignments outside of Orange County, the current expense reimbursement policy established for regular employees will apply. 6.1. 7 If any former employee commences doing business wherein the employee, his/her spouse, or members of liis/her immediate family are sole proprietors, or majority or controlling shareholders or owners of a corporation, partnership or other business entity, such business shall not be retain ed as an independent contractor or consultant to provide service directly to OCSD for a period of one year after leaving OCSD's employment. Thereafter, said business entity shall be allowed to contract with OCSD upon compliance with all resolutions and regulations of OCSD then in effect, relating to the procurement of services. 6.1.8 If any former employee becomes employed by any firm or business entity in which the former employee, his/her spouse or members of his/her immediate family own less than the majG>rity or controlling interest in said entity, said entity shall not be prohibited from co ntracti ng with the OCSD. However, the former employee shall not perform work on OCSD projects for a period of one year after leaving OCSD employment; nor shall such former employee contact OCSD officers or employees for the purpose of attempting to influence any OCSD decision, including but not limited to, the award of contract, issuance of permits, or compromise of administrative civil penalties, for a like period of one year. Said services shall be obtained only in accordance with all rules and procedures of OCSD relating to procurement. Page 7 of 10 Book page 37 6.1.9 Any OCSD employee who receives an offer of employment or a request to discuss potential employment tram any person or business entity periorming services for OCSD shall report such .contact to his or her immediate supervisor, who shall decide whether any change in assignment is necessary or appropriate while the offer or d_iscussions are pending. 6.1.1 O The prohibitions of this policy may he waived by the Finance, Administration and Human Resources Committee of the Boards of Directors if, on a case-by-case basis, it is determined to be in the best interests of OCSD to do so. 6.2 EMPLOYMENT OF RELATIVES 6.2.1 Except as otherwise provided by law, no employee, prospective employee or applicant shall be denied employment or benefits of employment solely on the basis of his or her familial relationship with an employee of the agency or a member of the Board of Directors. 6.2.2 OCSD will make reasonable efforts to assign job duties to eliminate any potential for an adverse impact on supervision, safety, security or morale, or potential conflicts of interest. 6.3 LATERAL TRANSFERS 6.3.1 Employees may req uest a lateral transfer to a vacant position in the same classification in another department providing they have demonstrated at least six months of continuous competent or above performance in their current position, and the transfer is of benefit to OCSD. 6.3.2 Employees who wish to be considered for a lateral transfer should notify Human Resources in writing of their intent. In the event a transfer is approved and accepted by the employee, the department from which the employee is transferring may determine the effective date based upon operational requirements and a reasonable period of time to acquire a suitable replacement. 6.3.3 Lateral transfers do not normally involve increased levels of duties and responsibilities, or otherwise qualify as promotions, and therefore do not involve salary adjustments. 6.3.4 In the event an adjustment appears warranted based on extenuating circumstances, the adjustment must have written approval from the department head prior to being extended to the employee. 7 .0 PROVISIONS AND CONDITIONS 7.1 The interview process for Intern positions shall be an abbreviated version of the process outlined in section 5.5 and will be administered by the appropriate division manager/supervisor and a Human Resources representative. 7.2 OCSD's Board of Directors must approve unbudgeted positions for new hires or promotions before any internal or open recruitment effort is initiated. Page 8 of 10 Book page 38 7.3 Hiring an individual into a budgeted position requires the approval of the Department Head and General Manager. 7.4 Promoting an individual into a budgeted position requires the approval of the Division Manager, Department Head or General Manager. 7.5 OCSD retains the right to refuse to place a relative under the direct supervision of an OCSD employee where such has a potential for creating an adverse impact on supervision, safety, security or morale. 7.6 OCSD retains the right to refuse to place relatives in the same department, division, or facility where such has a potential for creating an adverse impact on supervision, safety, security or morale, or involves potential conflicts of interest. 7.7 Employees on Performance Improvement Plans are not eligible for promotional opportunities. 7.8 INITIAL PROBATIONARY PERIOD 7.8.1 All persons hired by OCSD, except those designated as "at-will" employees, are considered to be probationary employees for a period of at least the first 26 weeks or 6 months of employment, depending upon the applicable MOU provisions, beginning with their date of hire. This probationary period is regarded as an extension of the hiring process, and provides an opportunity for both the employee and OCSD's management to assess, over a substantial period of time, whether or not the hiring decision was appropriate and resulted in a relationship that adequately meets the needs of both the individual and OCSD. 7.8.2 The probationary period may be extended by mutual agreement between OCSD and the employee, prior to the expiration of the probationary period. An employee's probationary period may be extended when there is a need to further assess the individual's abilities to satisfactorily perform the duties required for their job classification. Probationary employees may be released by OCSD at any time during the probationary period (including any extension) without cause or reason. 7.8.3 A probationary employee's work performance is closely monitored during this period to ensure that the employee understands the duties, responsibilities and management expectations of the position, and to allow an opportunity for the supervisor or manager to provide proper direction and guidance. Employees who do not demonstrate the potential for meeting performance expectations for their position within a reasonable period of time may be released prior to the completion of the Probationary Period. Probationary employees shall serve at the will of OCSD during this period. In the event of release of a probationary employee, the employee shall not be entitled to receive any severance pay. 7.9 PROMOTIONAL PROBATIONARY PERIOD 7.9.1 All promoted employees, except those designated as "at-will" employees, shall serve a promotional probationary period lasting at least 120 days or 6-months, depending upon the applicable MOU provisions, beginning with the effective date of promotion. This period is regarded as an extension of the selection process, and provides an opportunity for both Page 9 of 10 Book page 39 the employee and OCSD management to assess, over a substantial period of time, whether or not the decision was appropriate. 7.10 REFERENCE CHECKS 7.10.1 Employment with OCSD is contingent upon a pre-employment screening process which includes a physical examination, drug/alcohol test and background investigation. Candidates must also be able to provide documentation authorizing their legal right to work in the United States as per the Immigration Reform and Control Act of 1986. 7 .10.2 OCSD may verify information contained in the job application of a prospective employee with the prospective employee's authorization. 7.10.3 Inquiries to OCSD employees regarding reference or employment verification checks of former or present employees shall be discussed with or referred to Human Resources prior to any response. 8.0 RELATED DOCUMENTS 8.1 501, OCEA and SPMT memorandums of understanding (MOUs) 8.2 Human Resources Intern Program guidelines 8.3 Policy F50.00, Problem Solving Procedure 8.4 Policy F60.00, Grievance Procedure 8.5 Policy C180.00, At-Will Policy Page 10 of 10 Book page 40 ~ Orange County Policy Number: D11.00 f~ _-'"~ v · Sanitation District Effective Date: July 21, 2004 Subject: MILITARY LEAVE Supersedes: Approved by: Lisa L. Tomko 1.0 PURPOSE 1.1 The purpose of this policy is to support employees who serve in the National Guard and Reserve branches of the United States Armed Forces. 2.0 ORGANIZATIONAL UNITS AFFECTED 2.1 This policy applies to all OCSD employees who serve in the National Guard and Reserve branches of the United States Armed Forces. 3.0 POLICY 3.1 GENERAL INFORMATION 3.1.1 OCSD provides leave of absence to employees who are fulfilling military duty requirements as Reservists or National Guard members. 3.2 LEA VE WITH PAY 3.2.1 Employees on military leave (i.e., active duty), who have one year or more service with OCSD, are entitled to full pay for the first thirty (30) calendar days of military leave, up to to a maximum of one hundred-sixty (160) hours of pay, in any fiscal year. 3.2.2 National Guard members on military leave (i.e., active duty), regardless of their length of service with OCSD, are entitled to full pay for the first thirty (30) calendar days of military leave, up to to a maximum of one hundred-sixty (160) hours of pay, in any fiscal year. 3.2.3 Employees on temporary military leave (i.e., training), who have one year or more of service with OCSD, are entitled to full pay for the first thirty (30) calendar days of temporary military leave, up to to a maximum of one hundred-sixty (160) hours of pay, in any fiscal year. 3.2.4 In determining the one year of service with OCSD, all military service shall be counted as service with OCSD. 3.3 LEAVE WITHOUT PAY 3.3.1 Employees who are required to attend scheduled reserve drill periods or other inactive duty reserve obligations are entitled to military leave without pay. Employees may, at their option, elect to use vacation or personal leave time to attend the scheduled reserve drill periods or to perform other inactive duty reserve obligations. Employees who participate in weekend military drill Page 1 of 3 Book page 41 duty are not eligible for leave with pay, but may request to have their regular work schedule changed to accommodate the required time off. 3.4 BENEFITS 3.4.1 Health insurance coverage, in accordance with plan documents, shall continue while employees are engaged in military duty. 3.4.2 Time spent on a military leave of absence will be credited to "length of service" requirements for leave accruals and retirement benefits. 3.4.3 Employees are entitled to receive pay for OCSD holidays that occur while employees are engaged in military duty. Holiday pay hours shall be included in the maximum one hundred-sixty (160) hours of paid military leave (i.e., active or training) per fiscal year. 3.5 RETURN TO WORK 3.5.1 Employees are obligated to provide prompt notification of their intent to return to work. Employees who are on a military leave of absence are guaranteed reemployment in accordance witti the Uniformed Services Employment and Reemployment Rights ·Act (USERRA). Employees returning to work shall be restored to their former position or a position of similar status and pay. Employees who are released from military duty with a dishonorable or bad conduct discharge do not qualify for protection under USERRA. 3.6 STATE OR NATIONAL EMERGENCY 3.6.1 Employees called to active duty because of a State or National emergency are entlt'led to full pay for the first thirty (30) calendar days, up to a maximum of one hundred-sixty (160) hours of pay, of such order. Thereafter employees shall receive the difference between their pay with OCSD and their military pay (including allowances). Employees shall continue to receive all leave time accruals (personal leave, vacation, sick) and health insurance coverage in effect at the time they were called to active service. Employees shall continue to receive credit towards "length of service" requirements for retirement benefits. These benefits shall remain in effect for the full duration of the active military assignment. 4.0 PROCEDURE 4.1 Unless precluded by military necessity, employees must provide as much advance notice as possible regarding their military obligation by completing a Leave of Absence form available from the Human Resources Department. 4.2 Employees should provide a copy of their orders, annual drill schedule or other documentation to their immediate supervisor and to the Human Resources Department in a timely manner and if possible, before they begin their assignment. 5.0 PROVISIONS AND CONDITIONS 5.1 Provisions of California's Military and Veterans Code, Sections 389 et seq., and the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. Sections 4301 et seq. shall govern military leave. Page 2 of 3 Book page 42 5.2 As per the California Military and Veterans Code, Section 395.03, no more than the pay for a period of thirty (30) calendar days shall be allowed under the provisions of Section 395.01 or 395.02 for any one military leave of absence or during any fiscal year, except as otherwise authorized by resolution number 01-20, approved by OCSD's Board of Directors on October 24, 2001. 6.0 RELATED DOCUMENTS 6.1 California Military and Veterans Code 6.2 Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) 6.3 OCSD Resolution 01-20 Page 3 of 3 Bookpage43 FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Gary G. Streed, Director of Finance Originator: Michael D. White, Controller Meeting Date To Bel. of Dir. 07/14/04 Item Number Item Number FAHR04-66 SUBJECT: RESPONSES TO INTERNAL AUDIT REPORT ISSUED ON MAY 8, 2004 GENERAL MANAGER'S RECOMMENDATION Receive, approve, and file staff's responses to the Internal Audit Report issued on May 8, 2004 by the District's contracted internal auditors, Moss, Levy & Hartzheim. SUMMARY In February 2004, the Finance, Administration and Human Resources (FAHR) committee appointed Moss, Levy, & Hartzheim to serve as the District's contracted internal auditors for FY 2003-04. At the May 2004 FAHR meeting, the auditors presented their second report to the committee on findings, potential effects and related recommendations from their interim work during April 2004. The attached memorandum recaps the contracted internal auditors' eight (8) findings, effects, and recommendations and staff's responses to these 8 items. PRIOR COMMITTEE/BOARD ACTIONS In order to remain independent of staff, the auditors presented their written report directly to the committee without previously providing staff with a copy. At the May FAHR meeting, the committee directed staff to provide a written response to the auditors report. PROJECT/CONTRACT COST SUMMARY NIA BUDGET IMPACT D This item has been budgeted. (Line item: ) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. ~ Not applicable (information item) ATTACHMENTS Memorandum to FAHR dated July 14, 2004. H:ldeptlagenda\FAHRIFAHR200410704104-66.lntemal Audit Response.doc Revised: 06/04/03 Bookpage44 Page 1 July 14, 2004 TO: FROM: MEMORANDUM Finance, Administration and Human Resources Committee Michael D. White, Controller SUBJECT: Responses to Internal Audit Report Issued on May 8, 2004 In February 2004, the Finance, Administration and Human Resources (FAHR) committee appointed Moss, Levy, & Hartzheim to serve as the District's contracted internal auditors for FY 2003-04. At the May 8, 2004 FAHR meeting, the auditors presented their second report to the committee on findings, potential effects and related recommendations from their work performed during April 2004. In order to remain independent of staff, the auditors presented their written report directly to the committee without previously providing staff with a copy. At the May FAHR meeting, the committee directed staff to provide a written response to the auditors report. Below is a listing of the auditors findings contained within their May 8, 2004 report along with staff responses. A. Voided Checks Finding -Signature Portion of Voided Checks: During our review of voided checks, we noted that the signature portions of the voided checks are not removed. Effect: There is a possibility that the voided checks could be used if the signature portion is not removed. Recommendation: All voided checks should be properly defaced and the signature portion removed. OCSD • P.O. Box 8127 • Fountain Valley, CA 92728-8127 • (714) 962-2411 Book page 45 Response to Contracted Internal Auditors Report of May 8, 2004 July 14, 2004 Page 2 of 7 Staff Response: Staff is in agreement with the recommendation. Our policy and practice is to deface all voided checks. After receiving the auditors' report, staff reviewed every voided check in the file and found that most had the signature portion removed but all had been properly defaced so that no bank would honor them if they had been presented. The signature portion has now been removed from all voided checks and staff will make a concerted effort to ensure that all future voided checks are defaced in this manner. B. Cell Phone Invoices Finding -Cell Phone Invoices: During our test of cell phone invoices, we noted that one employee had only marked outgoing calls as personal, was over his base minutes by $89.10, and reimbursed the District only $10. Effect: Employees could be receiving personal calls and not reimbursing the District for them. Recommendation: Better monitoring of incoming calls or a change in the cell phone policy to allow for a certain number of incoming calls per month. Staff Response: CeH phones are provided to employees in order to more effectively accomplish OCSD business, as authorized by HR Policy E80.00, Cellular Telephone. The program provides for approved personal use of cell phones and includes provisions on reimbursement to OCSD for personal phone calls. This provision allows employees who utilize a personal cell phone to have just one phone rather than maintaining a second phone for personal use. The finding by the auditors occurred under the previous rate plan the District had with AT&T. Under this plan, each phone had a separate number of "any time" minutes with the requirement that personal phone calls be reimbursed to the District. In February 2004, the District implemented a new program with regard to the procurement and use of cell phones. This new program, established through Cingular, changed the way the District administers business service and personal use plans, and the overall cellular billing structure resulted in significant cost savings to the organization. Bookpage46 Response to Contracted Internal Auditors Report of May 8, 2004 July 14, 2004 Page 3 of 7 The District switched from individual plans to a "pooled minutes" plan. The pooled minutes are for official business use ONLY. Under the "pooled minute plan", the Information Technology Department monitors the total minutes used and the minutes used by each individual District employee in order to control costs. However, total base minutes are billed by Cingular to the agency as a whole and not allocated to individual users. If an employee elects to use the OCSD issued cell phone for personal use, they must elect and authorize (through a payroll deduction) the purchase of optional personal coverage, including one or more of the following options: • $10.00 per month for 215 minutes (includes free long distance) from home area. • $10.00 per month for Unlimited Nights and Weekends (includes free long distance) from home area. • $5.00 per month for 5,000 cell-to-cell minutes (only for calling Cingular cell phones) from home area. Note that these are the actual costs that OCSD pays for these services and an employee who elected all of these services would pay $25 per month. The Information Technology Department monitors the monthly cellular bill to ensure that there are no apparent abuses by any individual assigned a cell phone and that employees, through payroll deductions, are paying for the personal use of the cell phone. Managers and Supervisors are expected to minimize the personal use of cell phones during working hours. C. Retentions Finding -Reduction of Retentions: During our review of internal controls, we noted that the District can reduce construction retentions to 5% after 50% of the project is complete. Effect: This could expose the District to a liability if the construction is not completed on time or is not up to the specifications of the District. This also reduces the amount of "penalty'' the Contractor would face for nonperformance. Recommendation: The District should always retain 10% of construction contracts until the Notice of Completion has been filed and accepted by the Board of Directors. Book page 47 Response to Contracted Internal Auditors Report of May 8, 2004 July 14, 2004 Page 4 of 7 Staff Response: As the auditors noted, the reduction of retained amounts is permissible, but there is no legal requirement to reduce the construction retentions below 10%. However, there have been intangible benefits obtained from certain contractors when retentions have been reduced and no issues or problems have ever occurred from a contractor as a result of lowering the retention from 10% to 5%. In most cases, the retention was not reduced until well after 50% completion. Experience shows that when the contractor knows that there is a practice of lowering the retention as the project draws near to completion, they are more inclined to perform at the highest level in order for them to be able to receive these funds. It makes good business sense to work with contractors and to be allowed the flexibility on a case-by- case basis to lower retention requirements. Staff also believes that more advantageous construction bids are received when the contractor is aware of the District's practice of lowering retentions upon showing good faith in performance. D. Construction Management Finding #01 -Financial Statements of IPMC: During our review of the construction management contract with IPMC, we noted that the District did not receive a financial statement of I PMC. Effect: Risk of non-performance of the contract and inability of the District to collect any damages or cost overruns if IPMC were to cease operating. Recommendation: The District should always request and analyze financial statements of contractors that the District is entering into long-term contracts with. Staff Response: Integrated Program Management Consultants (IPMC), a joint venture of Parsons Infrastructure & Technology Group, Inc. and CH2M Hill, Inc., was required to provide us with the number of employees (22,000), annual revenue ($4 billion), and past and current clients for references. Additional research by staff determined that the parent companies were ranked by Engineering News Record in 2004 as the No. 6 and No. 7 design firms in the world, respectively, based on revenue generated. They were also required to provide insurance coverage of $1 million for Errors & Omissions, $2 million for general liability, and $1 million for workers' compensation. Bookpage48 Response to Contracted Internal Auditors Report of May 8, 2004 July 14, 2004 Page 5 of 7 Although the District does not require bidders to provide financial statements for the purpose of ascertaining financial condition, the District does require performance bonds on construction bids and errors and omission insurance on professional service contracts. Finding #D2 -Monthly Invoices of IPMC: During our review of the construction management contract with IPMC, we noted that IPMC submits a monthly invoice to the District with a category of "Other Direct Costs", which includes travel, transportation, lodging, and meals. Effect: IPMC could pass through costs not related to the District, without proper monitoring by the District. Recommendation: The District should carefully review the "Other Direct Costs" submitted by IPMC for reasonableness according to the contract between the District and IPMC. Staff Response: The District requires supporting documentation from all vendors for each item that is over $25 as listed on the invoice including travel, transportation, lodging, and meals. All supporting documentation for each item on the IPMC invoices greater than $25 had previously been obtained and carefully reviewed by staff. This is our standard practice. E. Fixed Assets Finding #E1 -Fixed Assets Not Removed From Fixed Asset Listing: During our test of fixed assets, we noted that eight assets sold in 2001 were not removed from the fixed asset system until 2003, and two assets sold in February 2003 were not removed until October 2003. Effect: Overstatement of fixed assets that were not fully depreciated, could occur. Overpayment of insurance premiums could also occur if the District uses the fixed asset list to set its insurance coverage limits. Bookpage49 Response to Contracted Internal Auditors Report of May 8, 2004 July 14, 2004 Page 6 of 7 Recommendation: The Fixed Asset Accountant should remove fixed assets sold at auction immediately upon receipt of sale agreement from the auction house. Staff Response: Staff concurs with the auditors' finding and, prior to their discovery, staff had already identified this issue and had worked diligently to bring our business process up to date. The delay was due to the fixed asset computer system conversion coupled with the turnover of the fixed asset accountant position. At the time of the auditors' finding, all property disposals received had been reviewed and processed. There currently is no back log in the removal of fixed assets that have been sold or scrapped. Finding #E2 -Missing Sales Remittances from Auction Houses: During our test of fixed assets, we noted that eight fixed assets were sold, but there were no sales remittance or sales advices from the auction house on file. Effect: Without proper documentation, improper sales of fixed assets or misappropriations of funds could occur. Recommendation: We recommend that the District require auction houses to remit a sales remittance or sales advice upon sale of fixed assets. Staffs Response: As noted in the response to "Finding #E1", some fixed asset deletions were not completed in a timely manner primarily due to the fixed asset computer conversion and staff turnover within the fixed asset section. When the concerted effort was made over this past year to update the fixed assets listing for fixed asset deletions, every effort was made to find the appropriate documents and match them with the disposal sheets. Most of those documents were found and matched. A few were not as noted by the internal auditors. All disposals and required documentation are now kept current. Book page 50 Response to Contracted Internal Auditors Report of May 8, 2004 July 14, 2004 Page 7 of 7 F. Debit/Credit Memos Finding -Pre-numbered Debt/Credit Memos: During our review of internal control, we noted that debit memos and credit memos are not pre-numbered. Effect: Since debit memos and credit memos are printed off the computer with no pre-printed number, there is no way to track the documents. Therefore, unauthorized use of the documents could occur. Recommendation: Press printed pre-numbered debit memos and credit memos should be used. Staff Response Although debit and credit memos are not printed onto pre-preprinted, numbered stock, all debit and credit memos are accounted for. The numbers for the debit and credit memos are assigned in numerical order by the computer system, and all debit and credit memos are filed by staff in numerical sequence. Whenever a debit or credit memo is prepared, the approver reviews the printed number and verifies that it is the next number in the sequence. Staff believes that using pre-printed, numbered stock would be an additional cost to the District without providing any additional internal control. Book page 51 FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Gary G. Streed, Director of Finance Originator: Michael D. White, Controller Meeting Date To Bd. of Dir. 7/14/04 Item Number Item Number FAHR04-67 SUBJECT: RENEWAL OF CONTRACTED INTERNAL AUDITING SERVICES WITH MOSS, LEVY & HARTZHEIM FOR FISCAL YEAR 2004-05 GENERAL MANAGER'S RECOMMENDATION Approve Change Order No. 1 to Purchase Order No. 43620 issued to Moss, Levy & Hartzheim as the District's contracted internal auditors for fiscal year 2004-05, for an amount not to exceed $19,260. SUMMARY At the direction of the Committee, staff solicited a request for proposal (RFP) to provide 300 hours of Internal Auditing Services for fiscal year 2003-04, with the option of auditing the following two years at the Committee's discretion. Moss, Levy & Hartzheim was the firm selected to perform internal auditing services in fiscal year 2003-04 at a total cost not to exceed $19,780. Moss, Levy & Hartzheim's has now submitted a proposal to perform internal auditing services for fiscal year 2004-05. Since their last proposal was low bid and their new proposal is even lower, staff does not believe any significant cost savings could be achieved by opening up the bid process. If the Committee has been satisfied with the quality and timeliness of the work performed by Moss, Levy & Hartzheim, it would be appropriate now to app~ove the second year option. PRIOR COMMITTEE/BOARD ACTIONS In February 2004, Moss, Levy & Hartzheim was selected to service as the District's contracted internal auditors through June 30, 2004. PROJECT/CONTRACT COST SUMMARY Although not the primary consideration at the time, Moss, Levy & Hartzheim was the lowest all-inclusive maximum price on 300 hours of internal auditing services for fiscal year 2003-04, as follows: Moss, Levy & Hartzheim Lance, Soll & Lunghard Vavrinek Trine Day & Co. Conrad & Associates H:\dept\agenda\FAHR\FAHR2004\0704\04-67.Moss Levy Renewal.doc Revised: 06/04/03 Book page 52 $19,780 27,680 30,775 31,150 Page 1 Moss, Levy & Hartzheim is now proposing to perform 300 hours of internal auditing services for fiscal year 2004-05 at a cost not to exceed $19,260, a reduction of 2.6 percent from the prior year. BUDGET IMPACT ~ This item has been budgeted. (Line item: ) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) ALTERNATIVES Decline the second year option renewal for internal auditing services from Moss, Levy & Hartzheim and direct staff to solicit bids from other qualified certified public accounting firms on a new three-year internal auditing services contract. ATTACHMENTS 1. Moss, Levy & Hartzheim's proposal for internal auditing services for the fiscal year ended June 30, 2005. H:\deptlagenda\FAHR\FAHR2004\0704\04-67.Moss Levy Renewal.doc Revised: 06/04/03 Bookpage53 Page2 1 i ,, • '·ri ORANGE COUNTY SANITATION DISTRICT SEALED DOLLAR COST BID PROPOSAL FOR INTERNAL AUDITING SERVICES For the Fiscal Year Ending June 30, 2005 Submitted by: Moss, Levy & Hartzheim 9107 Wilshire Blvd. Suite 320 Beverly Hills, CA 90210 Phone: (310) 273-2745 Fax: (310) 273-1689 Email: mlhbh@ pacbell.net Submitted on: June 16, 2004 Contact Persons: Robert M. Moss, C.P .A. Ron A. Levy, C.P .A. Craig A. Hartzheim, C.P.A. Book page 54 ' 1 ·, l. NAME OF FIRM: CONTACT PERSON: TELEPHONE: Compensation: AUDIT PROPOSAL SUMMARY FOR 2004-2005 Moss. Levy & Hartzheim 9107 Wilshire Blvd. Suite 320 Beverly Hills. CA 90210 Robert M. Moss, C.P .A. (310) 273-2745 1. Total All-inclusive Maximum Price Internal Audit Services Discount -20% Total All-inclusive Maximum Price Fiscal Year 2004-2005 $ 24,075 (4,815) $ 19,260 Under penalties of perjury, I declare that I am entitled to represent the firm, empowered to submit the bid, and I am an authorized signer. There are no and have never been any financial interests between any officials or employees of the Orange County Sanitation District and Moss, Levy & Hartzheim. Respectfully submitted, MOSS, LEVY & HARTZHEIM ~~~,? Robert M. Moss, C.P .A. Managing Partner Moss, Levy & Hartzheim is an equal opportunity employer Book page 55 ·, " ] i l -... . l ORANGE COUNTY SANITATION DISTRICT SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE FISCAL YEAR 2004-05 INTERNAL AUDITING SERVICES Standard Quoted Hourly Hourly Hours Rates Rates Partners 35 $ 175 $ 145 $ Managers 60 125 110 Supervisory Staff 95 90 75 Staff 95 75 50 Other (specify): Clerical 15 50 35 Subtotal 300 Out-of-pocket expenses: Meals and lodging Transportation Other (specify): Discount Total all-inclusive maximum price for fiscal year 2004-05 audit $ Total 5,075 6,600 7,125 4,750 525 24,075 NIA NIA (4,815) 19,260 Note: All out-of-pocket expenses are included in the fee. No costs will be passed on to the District. Book page 56 -' ] I ! 1 ORANGE COUNTY SANITATION DISTRICT RATES FOR ADDITIONAL PROFESSIONAL SERVICES AND MANNER OF PAYMENT Rates per hour for other services requested: STANDARD QUOTED HOURLY HOURLY RA'JES RATES A. Partner $ 175 $ 145 B. Manager 125 llO C. Supervisory Staff 90 75 D. Staff 75 50 E. Clerical 50 35 Progress payments will be made on the basis of hours of work completed during the course of the engagement in accordance with the firm's dollar cost bid proposal. Interim billings shall cover a period of not less than one calendar month. Book page 57 FAHR COMMITTEE Meeting Date To Bd. of Dir. 7/14/04 7/21/04 AGENDA REPORT Item Number Item Number Orange County Sanitation District FROM: Gary G. Streed, Director of Finance/Treasurer Originator: Michael D. White, Controller FAHR04-68 SUBJECT: ANNUAL REVIEW AND ADOPTION OF THE DISTRICT'S INVESTMENT POLICY STATEMENT AND DELEGATION OF INVESTMENT AUTHORITY TO THE DIRECTOR OF FINANCE/TREASURER GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 04-XX, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for FY 2004-05; and Repealing Resolution No. OCSD 03-17. SUMMARY This agenda item presents the annual review of the District's Investment Policy Statement to the Finance, Administration and Human Resource Committee (FAHR) for consideration in the Committee's capacity as the oversight committee for the Investment Policy (Section 16.2). With adoption of the attached Resolution, the Board of Directors would readopt the District's current Investment Policy Statement, portfolio performance benchmarks, and monitoring and reporting requirements for FY 2004-05. The District's Investment Policy Statement is recommended for adoption for FY 2004-05 with two policy clarifications from FY 2003-04, as discussed further below. There have been no legislative revisions to the State Government Code since the adoption of the FY 2003-04 Investment Policy. The submitted Investment Policy Statement has received the Investment Policy Certification of Excellence Award from the Municipal Treasurer's Association of the United States and Canada. PRIOR COMMITTEE/BOARD ACTIONS The District's current Investment Policy Statement was reviewed and approved by FAHR on July 9, 2003, and adopted by the Board of Directors on July 23, 2003 (Resolution No. 03-17). PROJECT/CONTRACT COST SUMMARY N/A H:ldeptlagenda\FAHR\FAHR2004\0704\04-68.Annual Investment Policy Update.doc Revised: 06/04/03 Book page 58 Page 1 BUDGET IMPACT D This item has been budgeted. (Line item: ) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. [8] Not applicable (information item) ADDITIONAL INFORMATION Background The Investment Policy governs the investment activities of Pacific Investment Management Company (PIMCO), the District's external money manager, on behalf of the District. On May 28, 1999, the District's Investment Policy Statement received the Investment Policy Certification of Excellence Award from the Municipal Treasurer's Association of the United States and Canada. A copy of the letter of certification is included each year in the annual Investment Policy document. The District received its first Award of Excellence for the Investment Policy Statement in December 1996. MTA recommends re-certification only when an investment policy statement undergoes major revisions. The Investment Policy document itself consists of the Investment Policy Statement and the following eight appendices: A. Summary of Investment Authorization 8. Treasury Management Procedures C. Investment Manager Certification D. Investment Pool Questionnaire (LAIF) E. Board Resolution No. OCSD-03-17 F. Sample Monthly & Quarterly Investment Program Monitoring Reports G. Sections of the California Government Code Pertinent to Investing Public Funds H. Glossary of Investment Terms This document will be updated and delivered to FAHR Committee members following the adoption of the District's investment policy statement. Annual Review of Investment Policy The Investment Policy includes the requirement that the District shall review its Investment Policy annually (Sections 1.2 and 16.1 ). Likewise, Section 53646 of the California Government Code (the "Code") requires local agencies to review their investment policy annually, and readopt their policy at a public meeting. This staff report presents the annual review of the District's Investment Policy Statement to the FAHR Committee for consideration in the Committee's capacity as the oversight committee for the District's investment program (Section 16.2). With adoption of the H:ldept\agenda\FAHR\FAHR2004\0704\04-68.Annual Investment Policy Update.doc Revised: 06/04/03 Bookpage59 Page2 attached Resolution, the Board of Directors would re-adopt the District's current Investment Policy Statement, portfolio performance benchmarks, and monitoring and reporting requirements. The District's Investment Policy Statement is recommended for adoption for FY 2004-05 with three clarification changes from FY 2003-04. The first change, underlined on page 6, Section 8.6, clarifies that notes, bonds, and other obligations are permissible investments, as allowed within the California Government Code and as authorized by Board Minute Order dated January 22, 1997 authorizing the District's external money managers, PIMCO, to purchase securities with a stated maturity of more than five (5) years from the date of purchase. The second change is also underlined on page 6, within Section 8.5 and Section 8.6, increasing the combined total of investments in medium term notes and long term notes to 35 percent from 30 percent. This change is recommended by Callan & Associates, the District's investment advisor because this is the distribution weight used in the District's benchmark index, the Merrill Lynch Government and Corporate One to Five Year Maturity Index. The third, and last change, is underlined on page 11, Section 12.2 allowing PIMCO to purchase individual securities for the Long Term Operating Monies portfolio that are permitted by the policy with a stated maturity of more than five (5) years as long as the investment meets the investment objectives of the portfolio and does not exceed the maximum average duration requirement for all securities within the Long Term Operating Monies portfolio, now requested to be set at five (5) years or less. As previously described in staff's presentation at the time of the original change, January 27, 1997, duration is a better measure of risk than final maturity. Further, the Board believed that the investment manager was in a position to manage the portfolio with an overall duration target through the use of both shorter and longer dated securities, or in other words, the duration of the total portfolio was the key, and the combination of individual securities should be delegated to PIMCO. There have been no legislative revisions to the State Government Code since the adoption of the FY 2003-04 Investment Policy. However, staff will continue to monitor pending legislative and regulatory proposals in the public finance area for their potential impact on the District's existing financial programs. Annual Delegation of Investment Authority Effective January 1 , 1997, Section 53607 of the Code states that governing boards of local agencies may only delegate authority to invest and/or reinvest agency funds to the agency's Treasurer for a one-year period. With adoption of the attached Resolution, the Board of Directors would renew its delegation of investment authority to the Director of Finance/Treasurer for a one-year period in compliance with the requirements of Section 53607. Each year, the Board of Directors will consider similar actions along with the annual reconsideration of the District's Investment Policy. H:\dept\agenda\FAHRIFAHR2004\0704\04-68.Annual Investment Policy Update.doc Revised: 06/04/03 Book page 60 Page 3 ATTACHMENTS 1. Proposed Resolution No. OCSD 04-XX 2. Exhibit A -OCSD's FY 2004-05 Investment Policy Statement 3. Exhibit B -Performance Monitoring & Reporting H:ldeptlagenda\FAHR\FAHR2004\0704\04-68.Annual Investment Polley Update.doc Revised: 06/04/03 Book page 61 Page4 ORANGE COUNTY SANITATION DISTRICT INVESTMENT POLICY STATEMENT Proposed for Review and Approval By Finance, Administration and Human Resources Committee On July 14, 2004 And for Adoption By Board of Directors On July 21, 2004 Book page 62 Section 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0 15.0 16.0 Appendix TABLE OF CONTENTS Topic Policy ...................................................................................... 1 Scope ...................................................................................... 1 Standard of Prudence ............................................................. 1 Investment Objectives ............................................................. 2 Delegation of Authority ............................................................ 2 Ethics and Conflicts of Interest ............................................... 3 Authorized Financial Dealers and Institutions ......................... 3 Authorized and Suitable lnvestments ...................................... 5 Collateralization ....................................................................... 9 Safekeeping and Custody ..................................................... 10 Diversification ........................................................................ 10 Maximum Maturities .............................................................. 11 Internal Control ..................................................................... 12 Performance Objectives and Benchmarks ............................ 12 Reporting ............................................................................... 13 Investment Policy Adoption and Revision ............................. 14 A. Summary of Investment Authorization B. Treasury Management Procedures C. Investment Manager Certification D. Investment Pool Questionnaire (LAIF) E. Board Resolution No. OCSD-02-XX, Authorizing the District's Treasurer to Invest and/or Reinvest District Funds, and Adopting Investment Policy and Performance Benchmarks F. Monthly & Quarterly Investment Program Monitoring Reports G. Sections of the California Government Code Pertinent to Investing Public Funds H. Glossary of Investment Terms Book page 63 1.0 Policy: ORANGE COUNTY SANITATION DISTRICT INVESTMENT POLICY STATEMENT It is the policy of the Orange County Sanitation District (OCSD) to invest public funds in a manner which ensures the safety and preservation of capital while meeting reasonably anticipated operating expenditure needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the investment of public funds. 1.1. This Investment Policy is set forth by OCSD for the following purposes: 1 .1 .1. To establish a clear understanding for the Board of Directors, OCSD management, responsible employees and third parties of the objectives, policies and guidelines for the investment of the OCSD's idle and surplus funds. 1.1.2. To offer guidance to investment staff and any external investment advisors on the investment of OCSD funds (see Appendix "A"). 1.1.3. To establish a basis for evaluating investment results. 1 .2. OCSD establishes investment policies which meet its current investment goals. OCSD shall review this policy annually, and may change its policies as its investment objectives change. 2.0 Scope: This Investment Policy applies to all financial assets of OCSD; except for the proceeds of OCSD's capital projects financing program, which are invested in accordance with provisions of their specific bond indentures; and such other funds excluded by law or other Board-approved covenant or agreement. These funds are accounted for by OCSD as Enterprise Funds as represented in OCSD's Comprehensive Annual Financial Report. 3.0 Standard of Prudence: The standard of prudence to be used by OCSD internal staff, and any authorized investment advisor(s), shall be as described in Section 53600.3 of the California Government Code as follows: Except as provided in subdivision (a) of Section 27000.3, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, Page 1 of 14 Book page 64 prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law. 4.0 Investment Obiectives: The primary objectives of OCSDs investment activities, in priority order, and as described in Section 53600.5 of the California Government Code, shall be: 4.1 Safety: The safety and preservation of principal is the foremost objective of the investment program of OCSD. Investments shall be selected in a manner that seeks to ensure the preservation of capital in OCSD's overall portfolio. This will be accomplished through a program of diversification, more fully described in Section 11.0, and maturity limitations, more fully described in Section 12.0, in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. 4.2 Liquidity: The investment program will be administered in a manner that will ensure that sufficient funds are available for OCSD to meet its reasonably anticipated operating expenditure needs. 4.3 Return on Investments: The OCSD investment portfolio will be structured and managed with the objective of achieving a rate of return throughout budgetary and economic cycles, commensurate with legal, safety, and liquidity considerations. 5.0 Delegation of Authority: 5.1 Authority to manage OCSD's investment program is derived from the California Government Code Sections 53600 et seq. and Sections 53635 et seq. The Board of Directors hereby delegates management responsibility for the OCSD investment program to it's Director of Finance/ Treasurer, who shall establish written procedures for the operation of the investment program, consistent with this Policy. The Controller/Assistant Treasurer shall be responsible for day-to-day administration, monitoring, and the development of written administrative procedures for the operation of the investment program consistent with this Policy. The current treasury management procedures are presented in Appendix "B ." No person may engage in an investment transaction except as provided under the terms of this Policy and the procedures established by the Treasurer. The Treasurer shall be responsible for all transactions undertaken by OCSD internal staff, and shall establish a system of controls to regulate the activities of internal Page 2 of 14 Book page 65 staff and external investment advisors engaged in accordance with Section 5.3. 5.2 The administrative procedures for the operation of OCSD's investment program will provide for, but not be limited to, the following: 5.2.1 Formats for monthly and quarterly reports to the Finance, Administration and Human Resources Committee, and the Board of Directors. 5.2.2 Compliance with generally accepted accounting principles of the Government Accounting Standards Board. 5.2.3 Establishment of benchmarks for performance measurement. 5.2.4 Establishment of a system of written internal controls. 5.2.5 Establishment of written procedures for competitive bids and offerings of securities that may be purchased or sold by internal OCSD staff. 5.2.6 Establishment of a Desk Procedures Manual for treasury operations and management. 5.3 The Board of Directors of OCSD may, in its discretion, engage the services of one or more registered investment advisors to assist in the management of OCSD's investment portfolio in a manner consistent with OCSD's objectives. Such external investment advisors, which shall be selected through a competitive process, shall be granted discretion to purchase and sell investment securities in accordance with this Investment Policy. Such advisors must be registered under the Investment Advisers Act of 1940, or be exempt from such registration. 6.0 Ethics and Conflicts of Interest: 6.1 Officers and employees of OCSD involved in the investment process shall refrain from personal business activities that could conflict with proper execution of OCSD's investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the General Manager any material financial interests in financial institutions that conduct business within OCSD's boundaries, and they shall further disclose any large personal financial/investment positions, the performance of which could be related to the performance of positions in OCSD's portfolio. 7.0 Authorized Financial Dealers and Institutions: 7.1 For investment transactions conducted by OCSD internal staff, the Treasurer Page 3 of 14 Book page 66 will maintain a list of financial institutions authorized to provide investment services to OCSD, including "primary" or regional dealers that qualify under Securities and Exchange Commission Rule 15C3-1 (Uniform Net Capital rule), and Federal or State of California chartered banks. No public deposit shall be made except in a qualified public depository as established by State law. All financial institutions which desire to become qualified bidders for investment transactions with OCSD must supply the following for evaluation by the Treasurer: 7.1.1. Audited financial statements for the institution's three (3) most recent fiscal years. 7 .1 .2. A statement, in the format prescribed by the Government Finance Officers Association (GFOA). certifying that the institution has reviewed OCSD's Investment Policy and that all securities offered to the Districts shall comply fully and in every instance with all provisions of the California Government Code and with this Investment Policy. The current statement is presented in Appendix "C." 7 .1 .3. A statement describing the regulatory status of the dealer, and the background and expertise of the dealer's representatives. Selection of financial institutions, broker/dealers, and banks authorized to engage in transactions with OCSD shall be made through a competitive process. An annual review of the financial condition of qualified institutions will be conducted by the Treasurer. 7 .2 Selection of broker/dealers used by external investment advisors retained by OCSD, shall be in compliance with contract provisions between OCSD and any external investment advisors, and shall be in substantially the following form: Use of Securities Brokers: Neither the Investment Advisor nor any parent, subsidiary or related firm shall act as a securities broker with respect to any purchases or sales of securities which may be made on behalf of OCSD, provided that this limitation shall not prevent the Investment Advisor from utilizing the services of a securities broker which is a parent, subsidiary or related firm, provided such broker effects transactions on a "cost only" or "nonprofit" basis to itself and provides competitive execution. The Investment Advisor shall provide the Districts with a list of suitable independent brokerage firms (including names and addresses) meeting the requirements of Government Code Section 53601.5, and, unless otheiwise directed by OCSD, the Investment Advisor may utilize the service of any of such independent securities brokerage firms it deems appropriate to the extent that such firms are competitive with respect to price of services and execution. Page 4 of 14 Book page 67 8.0 Authorized and Suitable Investments: All investments shall be made in accordance with the California Government Code including Sections 16429.1 et seq., 53600 et seq., and 53684, and as described within this Investment Policy. Permitted investments under this Policy shall include: 8.1 Securities, obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by the US Government, a federal agency, or a US Government-sponsored enterprise pursuant to Section 53601 (e) of the California Government Code. Investment in mortgage-backed bonds and CMOs is not governed by this Section 8.1 , even if such bonds are issued by agencies of the US Government. See Section 8.2 for conditions of purchase of mortgage- backed securities. See Section 8.12 for conditions of purchase of CMOs. 8.2 Mortgage-backed securities issued by an agency of the US Government, which are backed by pools of mortgages guaranteed by the full faith and credit of the U.S. Government, or an agency thereof. Purchase of mortgage derivatives, which include interest-only payments (IOs) and principal-only payments (POs); inverse floaters, and RE-REMICs (Real Estate Mortgage Investment Conduits), is hereby prohibited. 8.3 Commercial paper of "prime" quality and rated "P1 11 by Moody's Investor Services (Moody's), and rated 11A 111 by Standard & Poor's Corporation (S&P), and issued by a domestic corporation organized and operating in the United States with assets in excess of $500 million and having a rating of 11A11 or better on its long-term debt as provided by Moody's or S&P. Purchases of eligible commercial paper may not exceed 270 days to maturity from the date of purchase. Purchases of commercial paper shall not exceed 15% of the market value of the portfolio, except that a maximum of 30% of the market value of the portfolio may be invested in commercial paper, so long as the average maturity of all commercial paper in the portfolio does not exceed 31 days. No more than 5% of the market value of the portfolio, or 10% of the issuer's outstanding paper, may be invested in commercial paper issued by any one (1) eligible corporation. 8.4 Banker's acceptances issued by institutions, the short-term obligations of which are rated a minimum of 11P1 11 by Moody's, or 11A 111 by S&P provided that: (a) the acceptance is eligible for purchase by the Federal Reserve System; (b) the maturity does not exceed 180 days; (c) no more than 40% of the total portfolio may be invested in banker's acceptances; and (d) no more than 30% of the total portfolio may be invested in the banker's acceptances of any one (1) commercial bank. 8.5 Medium term (or corporate) notes of a maximum of five (5) years maturity issued by corporations organized and operating within the United States, or issued by depository institutions licensed by the United States, or any state, and operating within the United States with assets in excess of $500 million, Page 5 of 14 Book page 68 and which is rated in a rating category of "A" or better on its long-term debt as provided by Moody's or S&P. Notes eligible for investment under this section shall be rated at least "A3' or better by Moody's, or "A-" or better by S&P. If, at the time of purchase, an eligible note is rated in a rating category of 11A" or better by only one rating agency, the note shall also be rated at least "BBB" by the other rating agency. If, after purchase, the rating of an eligible note in a rating category of "A" or better, is downgraded to "BBB," the external investment advisor shall notify the District of the downgrade, and shall present an analysis and recommendations as to the disposition of the note consistent with the investment objectives of this Investment Policy. The above restrictions pertain to the "direct issuer' and do not extend to the parent corporation of the direct issuer. No more than 35% of the portfolio may be invested in both medium term notes, as described here in 8.5, and notes, bonds, or other obligations, as described in 8.6. 8.6 Notes, bonds, or other obligations that are at all times secured by a valid first priority security interest in securities of the types listed by California Government Code Section 53651 as eligible securities for the purpose of securing local agency deposits having a market value at least equal to that required by California Government Code Section 53652 for the purpose of securing local agency deposits. The securities serving as collateraJ shall be placed by delivery or book entry into the custody of a trust company or the trust department of a bank that is not affiliated with the issuer of the secured obligation, and the security interest shall be perfected in accordance with the requirements of the Uniform Commercial Code or federal regulations applicable to the types of securities in which the security interest is granted. No more than 35% of the portfolio may be invested in securities described in 8.5 and 8.6. 8. 7 Shares of mutual funds investing in securities permitted under this policy and under Section 53601 (k) of the California Government Code. Such funds must either: (1) attain the highest ranking, or the highest letter and numerical rating, provided by not less than two of the three largest nationally recognized rating services; or (2) have an Investment Advisor registered with the Securities and Exchange Commission with not less than five (5) years of experience investing in the securities and obligations authorized under this Policy and under California Government Code Section 53601, and with assets under management in excess of $500 million. The purchase price of shares of beneficial interest purchased pursuant to this policy, and the California Government Code may not include any commission that the companies may charge, and shall not exceed 15% of the District's surplus money that may be invested pursuant to this section. However, no more than 10% of the District's surplus funds may be invested in shares of beneficial interest of any one (1) mutual fund pursuant to this section. 8.8 Certificates of deposit: 8.8.1 Secured (collateralized) time deposits issued by a nationally or Page 6 of 14 Book page 69 state-chartered bank or state or federal savings and loan association, as defined by Section 5102 of the California Financial Code, and having a net operating profit in the two (2) most recently completed fiscal years. Collateral must comply with Chapter 4, Bank Deposit Law, Section 16500 et seq., and Chapter 4.5, Savings and Loan Association and Credit Union Deposit Law, Section 16600 et seq., of the California Government Code. 8.8.2 Negotiable certificates of deposit (NCDs) issued by a nationally or state-chartered bank or state of federal savings and loan association, as defined by Section 5102 of the California Financial Code; and which shall have a rating of "A" or better on its long-term debt as provided by Moody's or S&P; or which shall have the following minimum short-term ratings by at least two (2) rating services: "P1" for deposits by Moody's, "A 1" for deposits by S&P, or comparably rated by a nationally recognized rating agency which rates such securities; or as otherwise approved by the District's Board of Directors. 8.8.3 To be eligible to receive local agency money, a bank, savings association, federal association, or federally insured individual loan company shall have received an overall rating of not less than "satisfactory" in its most recent evaluation by the appropriate federal financial supervisorial agency of its record of meeting the credit needs of California's communities, including low and moderate income neighborhoods, pursuant to Section 2906 of Title 12 of the United States Code. 8.9 Taxable or tax-exempt municipal bonds issued by the State of California or its subdivisions. Such securities must be rated "A3" or higher by Moody's, or "A-" or higher by S&P; or as otherwise approved by the Districts' Board of Directors. 8.10 The State of California Local Agency Investment Fund (LAIF). The LAIF is an investment alternative for California's local governments and special districts managed by the State Treasurer's Office. LAIF is more fully described in the Glossary (See Appendix "H. ") The District shall use LAIF as a short-term cash management facility. Investment of District funds in LAIF shall be subject to investigation and due diligence prior to investing, and on a continual basis to a level of review pursuant to Section 3.0, Standard of Prudence, of this Policy. See Appendix "D" for investment pool questionnaire. 8.11 The Orange County Treasurer's Money Market Commingled Investment Pool (OCCIP). The OCCIP is a money market investment pool managed by the Orange County Treasurer's Office. OCCIP is more fully described in the Glossary. (See Appendix "H.") The District has no funds invested in OCCIP at this time. Investment of District funds in OCCIP would be subject to investigation and due diligence prior to investing, and on a continual basis to a level of review pursuant to Section 3.0, Standard of Prudence, of this Policy. Page 7 of 14 Book page 70 8.12 Collateralized mortgage obligations (CMOs) issued by agencies of the US Government which are backed by pools of mortgages guaranteed by the full faith and credit of the U.S. Government. or an agency thereof, and asset- backed securities rated "Aaa" by Moody's and "AAA" by S&P. Selection of mortgage derivatives, which include interest-only payments (IOs) and principal-only payments (POs); inverse floaters, and RE-REMICS (Real Estate Mortgage Investment Conduits), is hereby prohibited. Securities eligible for purchase under this Section 8.11 shall be issued by an issuer having a rating on its unsecured long-term debt of "A" or higher. Combined purchases of mortgage-backed securities, CMOs and asset-backed securities as authorized under within Section 8.0, may not exceed 20% of the total Long-Term Operating Monies portfolio. 8.13 Repurchase agreements provided that: 8.13.1 All repurchase agreements shall be collateralized with securities eligible for purchase under this Policy. In order to anticipate market changes and to provide a level of security for all repurchase agreement transactions, collateralization shall be maintained at a level of at least 102% of the market value of the repurchase agreements, and shall be adjusted no less than weekly. 8.13.2 All repurchase agreements must be the subject of a Master Repurchase Agreement between OCSD and the provider of the repurchase agreement. The Master Repurchase Agreement shall be substantially in the form developed by The Bond Market Association. 8.14 Reverse repurchase agreements provided that: 8.14.1 No more than five percent (5%) of OCSD's portfolio shall be invested in reverse repurchase agreements, and there shall be no long-term reverse repurchase agreements unless otherwise authorized by the Districts' Board of Directors. 8.14.2 The maximum maturity of reverse repurchase agreements shall be ninety (90) days. 8.14.3 Reverse repurchase agreements shall mature on the exact date of a known cash flow which will be unconditionally available to repay the maturing reverse repurchase agreement. 8.14.4 Proceeds of reverse repurchase agreements shall be used solely to supplement portfolio income or to provide portfolio liquidity, and shall not be used to speculate on market movements. 8.14.5 All reverse repurchase agreements must be the subject of a Page 8 of 14 Book page 71 Master Repurchase Agreement between OCSD and the provider of the reverse repurchase agreement. The Master Repurchase Agreement shall be substantially in the form developed by The Bond Market Association. 8. 15 Sales of OCSD-owned securities in the secondary market may incur losses in order to improve the risk or return characteristics of the portfolio, to prevent anticipated further erosion of principal, or when trading for securities that result in an expected net economic gain to OCSD. 8.16 If securities owned by the OCSD are downgraded by either Moody's or S&P to a level below the quality required by this Investment Policy, it shall be OCSD's policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. If a decision is made to retain the downgraded securities in the portfolio, their presence in the portfolio will be monitored and reported monthly to the OCSD General Manager, the Finance, Administration and Human Resources Committee and Board of Directors. 9.0 Collateralization: Generally, the value to secure deposits under this Policy shall comply with Section 53652 of the California Government Code. Collateralization will be required for secured time deposits, as more fully described in Section 8.7.1; and repurchase agreements, as more fully described in Section 8.12.1 . Collateral will always be held by an independent third- party, as more fully described in Section 10.1. The right of collateral substitution is granted. 10.0 Safekeeping and Custody: 10.1 All securities transactions, including collateral for repurchase agreements, entered into by, or on behalf of OCSD, shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by OCSD's third-party custodian bank, which shall be selected through a competitive process, or that agent's representative, or in the agent's account at the Federal Reserve Bank, or within clearing corporations in the U.S., and evidenced by book entry statements. 11.0 Diversification: OCSD will diversify its investments by security type, issuer, and financial institution in accordance with the following: 11 .1 There is no limit on investment in securities issued by or guaranteed by the full faith and credit of the U.S. government. 11 .2 No more than 20% of the portfolio may be invested in securities of a single Page 9 of 14 Book page 72 agency of the U.S. government, which does not provide the full faith and credit of the U.S. government. 11.3 No more than 5% of the portfolio may be invested in securities of any one issuer, other than the U.S. government or its agencies. Investment in mutual funds is not governed by this Section 11.3. See Section 11.8 for conditions of purchase of mutual funds. 11.4 No individual holding shall constitute more than 5% of the total debt outstanding of any issuer. 11.5 No more than 40% of the portfolio may be invested in banker's acceptances. 11.6 No more than 15% of the portfolio may be invested in commercial paper, except that 30% of the portfolio may be so invested so long as the average maturity of all commercial paper in the portfolio does not exceed 31 days. 11. 7 No more than 30% of the portfolio may be invested in medium-term (corporate) notes. 11.8 No more than 15% of the portfolio may be invested in mutual funds. However, no more than 10% of the District's portfolio may be invested in shares of beneficial interest of any one (1) mutual fund. 11.9 No more than 30% of the portfolio may be invested in negotiable certificates of deposit. 11 .10 No more than 10% of the portfolio may be invested in eligible municipal bonds. 11 .11 No more than 20% of the Long Term Operating Monies portfolio may be invested in a combination of mortgage-backed securities, CMOs and asset- backed securities. Mortgage-backed securities, CMOs and asset-backed securities may only be purchased by the Districts external money managers , Pacific Investment Management Company (PIMCO), with prior Board approval (authorized by Board Miniute Order, January 22, 1997), and may not be purchased by the District's staff. 11.12 No more than the lesser of 15% of the portfolio or the statutory maximum may be invested in LAI F. 11.13 No more than 15% of the portfolio may be invested in the Orange County Investment Pool. 11 .14 No more than 20% of the portfolio may be invested in repurchase agreements. 11 .15 No more than 5% of the portfolio may be invested in reverse repurchase agreements. Page 10 of 14 Book page 73 12.0 Maximum Maturities: To the extent possible, OCSD will attempt to match its investments with reasonably anticipated cash flow requirements. The Treasurer shall develop a five-year cash flow forecast, which shall be updated quarterly. Based on this forecast, the Treasurer shall designate, from time-to-time, the amounts to be allocated to the investment portfolio. OCSD monies invested in accordance with this Policy are divided into two (2) categories: 12.1 Liquid Operating Monies. Funds needed for current operating and capital expenditures are known as Liquid Operating Monies. 12.1.1 The maximum final stated maturity of individual securities in the Liquid Operating Monies account portfolio shall be one (1) year from the date of purchase. 12.1.2 The average duration of the Liquid Operating Monies account portfolio shall be recommended by the Treasurer based on the Districts' cash flow requirements, but may never exceed 180 days. 12.2 Long Term Operating Monies. Funds needed for longer term purposes are known as the Long Term Operating Monies. 12.2.1 Except for the purchase of securities by the District's external money manger, PIMCO, the maximum final stated maturity of individual securities in the Long Term Operating Monies account portfolio shall be five (5) years from the date of purchase. PIMCO may purchase any security that is permitted under Section 8.0 of this policy, including those which may have a stated maturity of more than five (5) years from the date of purchase when , in the opinion of PIMCO, such an investment meets the investment objectives of this portfolio and the duration requirements are met below. 12.2.2 The duration of the Long Term Operating Monies account portfolio shall be recommended by the Treasurer based on the Districts' five- year cash flow forecast, but may never exceed 60 months. 12.2.3 The duration of the Long Term Operating Monies account portfolio shall never exceed 120% of the duration as established in accordance with Section 12.2.2. 12.2.4 The duration of the Long Term Operating Monies account portfolio shall never be less than 80% of the duration as established in accordance with Section 12.2.2 Page 11 of 14 Book page 74 13.0 Internal Control: 13.1 The Treasurer shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. The current treasury management procedures are presented in Appendix 118.11 14.0 Pertormance Obiectives and Benchmarks: 14.1 Overall objective. The investment portfolio of OCSD shall be designed with the overall objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with investment risk constraints and reasonably anticipated cash flow needs. 14.2 The Liquid Operating Monies. The investment performance objective for the Liquid Operating Monies shall be to earn a total rate of return over a market cycle which exceeds the return on a market index approved by the Finance, Administration and Human Resources Committee, and by the District's Board of Directors, when the duration of the portfolio is established. This market index is more fully described in Board Resolution No. OCSD-00-16 (see Appendix "E"). 14.3 The Long Term Operating Monies. The investment performance objective for the Long Term Operating Monies shall be to earn a total rate of return over a market cycle which exceeds the return on a market index selected by the Finance, Administration and Human Resources Committee and approved by the Districts' Board of Directors, when the duration of the portfolio is established. This market index is more fully described in Board Resolution No. OCSD-00-16 (See Appendix "E"). 15.0 Reporting: 15.1 Monthly and quarterly investment reports shall be submitted by the Treasurer to the Finance, Administration and Human Resources Committee which shall forward the reports to the District's Board of Directors. The monthly reports shall be submitted to the Finance, Administration and Human Resources Committee within 30 days of the end of the month in accordance with California Government Code Sections 53607, 53646, and this Investment Policy. The quarterly reports shall provide clear and concise status information on the District's portfolios at the end of each reporting period, including performance measures using the benchmarks described in Section 14.0 of this Investment Policy. Sample monthly and quarterly reports are presented in Appendix "F." These reports shall contain listings of individual securities held at the end of each reporting period, and shall disclose, at a minimum, the following information about the risk characteristics of OCSD's portfolio: Page 12 of 14 Book page 75 15.1.1 15.1.2 Cost and accurate and complete market value of the portfolio. Modified duration of the portfolio compared to Benchmark. 15.1.3 Dollar change in value of the portfolio for a one-percent (1 %) change in interest rates. 15.1.4 Percent of portfolio invested in reverse repurchase agreements, and a schedule which matches the maturity of such reverse repurchase agreements with the cash flows which are available to repay them at maturity. 15.1 .5 For the Liquid Operating Monies account only, the percent of portfolio maturing within 90 days. 15.1.6 Average portfolio credit quality. 15.1 . 7 Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities. 15.1.8 State that all investments are in compliance with this policy and the California Government Code, or provide a listing of any transactions or holdings which do not comply with this policy or with the California Government Code. 15.1.9 Time-weighted total rate of return for the portfolio for the prior three months, twelve months, year to date, and since inception compared to the Benchmark returns for the same periods. 15.1.1 O State that sufficient funds are available for OCSD to meet its operating expenditure requirements for the next six months, or if not, state the reasons for the shortfall. 15.2 OCSD's Treasurer shall meet quarterly with the Finance, Administration and Human Resources Committee to review investment performance, proposed strategies and compliance with this Investment Policy. External investment advisors may be required to attend said meetings at the discretion of the Chairman of the Finance, Administration and Human Resources Committee. 16.0 Investment Policy Adoption and Revision: 16.1 The Investment Policy of OCSD shall be reviewed by the Finance, Administration and Human Resources Committee and shall be adopted by resolution of the Board of Directors of OCSD. The Policy shall be reviewed on an annual basis in accordance with California Government Code Section 53646, and this Investment Policy, by the Finance, Administration and Human Resources Committee, which shall recommend revisions, as appropriate, to the Board of Directors. Any modifications made thereto shall Page 13 of 14 Book page 76 be approved by the Board of Directors. 16.2 The Finance, Administration and Human Resources Committee shall serve as the oversight committee for the District's Investment program and shall adopt guidelines for the ongoing review of duration, quality and liquidity of the District's portfolio. Page 14 of 14 Book page 77 APPENDIX 11A11 SUMMARY OF INVESTMENT AUTHORIZATION INTERNAL AND EXTERNAL MANAGERS SHORT TERM OPERATING FUND INVESTMENT U.S. Treasuries Federal Agencies Mortgage-backed Commercial paper Banker's Accept. Medium Term Notes Mutual Funds Negotiable CDs Municipal Bonds LAIF OCIP CMOs Asset-backed Repurchase Agree. Reverse Repos INTERNAL OK Fixed coupon, fixed mat. NO OK OK Fixed coupon, fixed mat.* Money Market Only** Fixed coupon, fixed mat.* OK* OK OK NO NO OK OK* EXTERNAL OK OK NO OK OK OK Money Market Only OK NO NO NO NO NO OK OK LONG TERM OPERATING PORTFOLIO INVESTMENT U.S. Treasuries Federal Agencies Mortgage-backed Mutual Funds Negotiable CDs Municipal Bonds LAIF OCIP CMOs Asset-backed Repurchase Agree. Reverse Repos INTERNAL OK Fixed coupon, fixed mat. NO Money Market Only** Fixed coupon, fixed mat.* OK* OK OK NO NO OK OK* EXTERNAL OK OK OK OK OK OK NO NO With Board Approval With Board Approval OK OK *With prior approval of the Finance, Administration and Human Resources Committee. **Using financial institutions approved by the Finance, Administration and Human Resources Committee. G:\WP.DTAIFIN\220\WHITE\TREASURY MGMT\INVESTMENT POLICY\2002-03\INVESTPLY-FINAL.DOC Book page 78 RESOLUTION NO. OCSD-04-XX AUTHORIZING THE DISTRICT S TREASURER TO INVEST AND/OR REINVEST DISTRICT'S FUNDS , AND ADOPTING DISTRICT'S INVESTMENT POLI CY STATEMENT AND PERFORMANCE BENCHMARKS A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT, AUTHORIZING THE DISTRICT'S TREASURER TO INVEST AND/OR REINVEST DISTRICT'S FUNDS, AND ADOPTING DISTRICT'S INVESTMENT POLICY STATEMENT AND PERFORMANCE BENCHMARKS; AND REPEALING RESOLUTION NO. OCSD 03-17 *************** WHEREAS, on July 23, 2003, the Board of Directors adopted Resolution No. 03-17, readopting the District's Investment Policy Statement, and establishing specific performance benchmarks and objectives, together with a schedule of frequency of investment performance reports; and, WHEREAS, pursuant to California Government Code Section 53607, the Board of Directors may delegate authority to invest and/or reinvest District's funds to the Treasurer for a one-year period; and, WHEREAS, pursuant to California Government Code Section 53646, the District is required to review its Investment Policy annually and readopt its Policy at a public meeting, which Policy will establish specific performance benchmarks and objectives, and specific monitoring and reports. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That the authority of the Board of Directors to invest or reinvest District's surplus funds, or to sell or exchaAge securities so purchased, or to deposit for safekeeping the funds and investments of the Districts with depositories, as provided for in California Government Code Sections 53608 and 53630, is hereby delegated to the District's Treasurer for a one-year period commencing on the date this Resolution is adopted, as authorized by California Government Code Section 53607. Book page 79 PASSED AND ADOPTED by a vote of not less than two-thirds of the Board of Directors of the Orange County Sanitation District at a Regular Meeting held -------- CHAIR, BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT ATTEST: SECRETARY, BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT THOMAS L. WOODRUFF DISTRICT GENERAL COUNSEL WS&S-TLW:pj:188361;07/06/04 31 Book page 80 ' FAHR COMMITTEE Meeting Date To Bel. of Dir. 07-14-04 07-21-04 AGENDA REPORT Item Number Item Number FAHR04-69 Orange County Sanitation District FROM: Blake P. Anderson, General Manager Originator: Gary G. Streed, Director of Finance/Treasurer SUBJECT: 2004-05 SEWER SERVICE USER FEES FOR PERMIT USERS GENERAL MANAGER'S RECOMMENDATION Recommend to the Board of Directors to adopt Ordinance No. OCSD-24, Adopting Revised Table G re Permittee Charges for Use and Reaffirming All Other Charges, an Ordinance of the Board of Directors of Orange County Sanitation District, Establishing Sanitary Sewer Service Charges; Establishing Capital Facilities Capacity Charges; Adopting Miscellaneous Charges and Fees Relating to Industrial Chargers, Source Control Permittees and Wastehaulers; and Repealing Ordinance No. OCSD 22. SUMMARY Since the inception of the Permit User Fee program in 1970, users of the District's system that discharge high volumes or high strength wastewater have been required to obtain a discharge permit (either a Class I or Class II) and to pay extra fees for the cost of service. The fees are initially calculated based on the flow, BOD and SS of the user. That calculated fee is reduced by the property tax paid by the user to the District. Certain changes in the property tax program in California and the calculation of the Permit User rates have caused staff to re-evaluate this program and our practices. There are approximately 500 Permit Users that pay for sewer services based upon their actual flow, BOD and SS. The individual user rates for each of these parameters has been calculated for the past few years based upon net revenue requirements for O&M and the CIP, after subtracting other projected revenues, including property taxes, from our total annual revenue and spending requirements. Staff believes that it is necessary to either discontinue allowing the tax credit to Permit Users or to modify the computation of the rates for flow, BOD and SS. Staff recommends changing the computation of the individual rates so that they are calculated prior to subtracting property tax revenue, and to continue the practice of allowing each Permit User credit for its actual property tax payment during the billing process. This change will result in higher rates for flow, BOD and SS than have been adopted for 2004-05 as the total District funding needs used in the calculation will increase by $28 million (the amount of the property tax subtraction in the calculation). Permit Users will again be paying for the cost to provide their service based upon actual use and will be given a credit, or rate reduction for their actual property tax payments up to the calculated annual fee. Book page 81 This action is proposed as an urgency Ordinance so that the rates may be effective for 2004-05. PRIOR COMMITTEE/BOARD ACTIONS Ordinance No. OCSD-22. PROJECT/CONTRACT COST SUMMARY The proposed 5-year Class I and Class II and Special Purpose Discharge Permittee rates are shown below. The rates shown for 2003-04 are the rates that were previously ad0pted arid they are not proposed to change. The rates that were adopted and itnplemented for 2004-05 will be replaced by those shown. The rates for future fiscal years will be presented to the Board for consideration each year, along with the residential rates, for authorization and implementation, and may change based upon future changes in property tax allocations. Flow (*) BOD (**) ss (***) (*) (**) (***) Actual 2003-04 $316.38 $216.13 $207.35 Proposed 2004-05 $500.20 $298.89 $275.47 Per million gallons of flow Future 2005-06 $564.42 $337.47 $312.18 ·Future 2006-07 $697.94 $404.32 $370.94 Per thousand pounds of Biochemical Oxygen Demand Per thousand pounds of Suspended Solids Future 2007-08 $785.31 $455.46 $419.61 This change is projected to generate approximately $1.8 million of additional Permit User Fees for 2004-05 based upon the actual discharges of 2002-03, the last data available. This additional revenue will be used to reduce or defer future rate increases. BUDGET IMPACT IZI This item has been budgeted. (Line item: ) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item). Applies to future budget periods ADDITIONAL INFORMATION The attached staff report includes additional information regarding the Permit User program and the reasons for this recommendation. H:\dept\agenda\FAHR\FAHR2004\0704\04-69.Ordinance 24.doc Revised: 06/04/03 Book page 82 Page2 ALTERNATIVES The attached staff report includes discussion of alternatives including no change and eliminating the credit for property taxes. Another alternative could be to use the rates already adopted for 2004-05 and to change the rate calculation methodology for 2005-06. Such a delay would avoid the urgency Ordinance but would also continue the practice of reducing individual Permit User calculated fees by property taxes that had already reduced the rates for flow, BOD and SS. CEQA FINDINGS NIA ATTACHMENTS 1 . Staff Report including examples 2. Schedule of Impact on All Permit Users 3. Table G-Redline version 4. Proposed Ordinance No. OCSD-24 GGS:lc H:\dept\agenda\FAHRIFAHR2004\0704\04-69.Ordinance 24.doc Revised: 06/04/03 Book page 83 Page 3 July 14, 2004 Staff Report Property Taxes and Sewer User Fees Since the inception of the Permit User Fee program in 1970, the Permit Users have been granted a credit against their calculated fees based upon flow, BOD and SS for the property taxes they have paid to the District. Certain changes in the property tax program in California and the calculation of the Permit User rates have caused staff to re-evaluate this program and our practices. A change in practice is recommended. Property Taxes Property taxes are levied pursuant to the State Constitution and are based solely upon assessed property values. Property taxes are collected from all properties, developed or not, connected to sewers or not. Property taxes are intended to be used for the benefit of the local area. Property taxes received by the County are apportioned pro rata to various public agencies based upon a statutory formula adopted following the passage of Proposition 13 in 1978. Property taxes received by the OCSD are currently used entirely to repay outstanding debt and interest; they are not used for operations and maintenance. OCSD receives a small share of the annual "1 % basic levy" property tax collected within our service area. For every $100 collected, the District receives approximately $2.50. OCSD does not set property tax rates, collect property taxes or control the allocation or apportionment of property taxes. It is important to keep in mind that the State can change the allocation at any time. User Fees Property taxes are included as one of the sources of funds received in the annual OCSD budget. As such they are considered, along with interest income, connection fees and other revenues when annual sewer service user fees are calculated and established. Thus, user fee rates which were established to provide sufficient revenues to cover the cost of service including O&M, CIP and debt service have actually been reduced by anticipated property tax and other revenues. These reduced rates produce revenues that by themselves do not recover the full cost of service. OCSD -P.O. Box 8127 -Fountain Valley. CA 92728-8127 -(714) 962-2411 Book page 84 Property Taxes and Sewer User Fees Page 2 of 5 July 14, 2004 These reduced user fee rates are used as the basis to compute the annual rates for Permit Users. When multiplied by the actual flow, BOD and SS discharge for each user, they result in a total charge for the net cost of service, already reduced by property taxes, interest income, connection fees and other revenues. Presumably if all users were charged according to this method and using these net rates, the total of all the calculated fees plus property taxes, interest, connection fees and other revenues would equal the annual cash requirements for O&M, CIP and debt service. Of course it is not that simple. For one thing, the annual cash requirement budget is not completely funded by annual revenues. Most years there are either draws on accumulated funds or new borrowing. For example, the net rate calculated for a SFR in 2003-04 using the above method was $152.69, but the actual adopted rate was only $100.00. This reduction was possible because $280 million of new debt was issued during the year. By extension, then if all users had been billed using the net rates that have been reduced even further by allowing for new borrowing or use of "savings" or reserves, then the total calculated revenues would have been only 2/3 of the actual total requirements. Permit User Credits There are approximately 500 Permit Users that pay for sewer services based upon their actual discharge of flow, BOD and SS. Ordinance OCSD-01 requires that Permit Users be provided a credit for the property tax and sewer service user fees that are paid to the District and collected as a separate line item on the property tax bill. This has been a feature of the Permit User program from the beginning and was intended to ensure that the total of all fees and taxes received from the Permit User does not exceed the actual cost of service. The original Permit User rates for flow, BOD and SS were adopted in 1970, prior to the implementation of sewer service user fees collected on the tax bill and prior to the change in property tax rate calculation and allocation caused by Proposition 13. It was appropriate at the outset to assure Permit Users that they were not paying twice for the same service; once as property tax and again as a Permit User fee . These original Permit User rates were based upon the full cost of treatment and were not reduced by property taxes or other revenues. That reduction came as a part of each Permit User's annual fee reconciliation. As general sewer service user fees began to be collected as a separate line item on the property tax bills in 1982, these rates were established at rates that would allow the District to collect sufficient revenues to meet the net O&M, capital and debt service requirements remaining after all other sources of revenue. This means that property tax revenues have already reduced the General User rates Book page 85 Property Taxes and Sewer User Fees Page 3 of 5 July 14, 2004 and total revenues. These rates were computed differently from the Permit User rates that began in 1970. In 1999, subsequent to the Strategic Plan and the Rate Advisory Committee work, the General User fee rates were restructured. They were still based upon collecting revenues to cover our net requirements. As a part of the new rate adoption, the Permit User fee rates were tied to and based upon the General User rates. This connecting of the rates resulted in lower Permit User rates as these were no longer based upon total costs, but upon net requirements. The language in Ordinance OCSD-01 that provides for credit for property taxes paid by Permit Users was not changed at that time and remains in place today. The Issue All of these changes have put us in the position of allowing the Permit User two credits for property taxes. The first credit is included in the Permit User rate calculation; these rates will only raise the revenues needed to meet total requirements less property taxes and other revenues. The second credit comes during the annual Permit User fee calculation process when the actual property taxes paid by the individual Permit User are subtracted from the total calculated fees for actual flow, BOD and TSS for the year. This issue is the result of OCSD attempting to combine charges based solely upon property value with charges based upon use. Options 1) Discontinue Property Tax Credit: Continue with the current method of calculating Permit User rates based upon net requirements and based upon the residential sewer service fee collected on the property tax bill, but discontinue the practice of reducing the calculated Permit User total annual fee by that User's property tax payments. This method retains the features of the State and County property tax allocation and appropriation based upon property value and authorized by the State Constitution. However, since property taxes are a function of property values, they are affected by recent property purchases and sales. This option could result in a Permit User with very high property taxes based upon value and a high Permit User fee based upon use paying considerably more than it pays today as well as more than the cost of sewer service and debt service. This option seems to favor older businesses at the expense of new businesses in the service area. This method would also require a change to Ordinance OCSD-01 . 2) Calculate Rates Before Tax Revenues: Change the method of calculating the Permit User rates for flow, BOD and SS so that no reduction is made for total anticipated property taxes. This would result in rates that more closely reflect the Book page 86 Property Taxes and Sewer User Fees Page 4 of 5 July 14, 2004 cost of providing service. New borrowing, use of reserves and interest income would still keep these rates below the actual cost of service. These rates would be about one-third greater than current rates. This would allow us to continue the current practice of providing an offset to the calculated Permit User Fee for the amount of the property taxes paid by that user without providing double credit as we do today. No refunds would be made for property taxes that exceed the calculated actual cost of service. 3) Refund '"Excess" Property Taxes: Change the method of calculating the Permit User rates for flow, BOO and SS so that no reduction is made for total anticipated property taxes, as above. Allow credit, and issue refunds, for all of the property t axes that exceed the actual calculated Permit User charge. This would put the Permit User on a pure fee for service basis. Since the current rates are based upon net requirements, this would result in lower rates for Permit Users than for other users. No other user receives a return of property taxes when their fees are adjusted, even if they are not connected to the system. This option creates the possibility for a user with no current discharge to receive a 100% property tax refund resulting in no property taxes being paid for the COP service for facilities that are available to serve the property. This option could also create some property owners paying less than the 1 % basic property tax provided in the State Constitution. These seem to be undesirable results. 4) "Cost of Service" Rates with "Excess" Property Tax Refunds: Change the way Permit User rates are calculated so that they recover the full cost of collection, treatment and disposal and are not reduced by property taxes, borrowing, use of reserves or by other revenues. There are options within this option that might allow reduction tor some of the revenues, but not all of them. This change would significantly increase the rates, but it could be accompanied by a policy and practice change that would allow full credit for all property taxes paid. This change and credit could be appropriate as the rates and resultant fees would include the full cost of service and would not have been reduced by other sources of funds. No refunds would be made for taxes that might exceed the calculated cost of service. Potential Permit User Rates Adopted No Rate Reduction for No Rate Reduction No Rate Reduction for 2004-05 Rates Property Tax for Any Current Any Current Revenues or in Ordinance Used for COP Service Revenues Reserves (1) (2 & 3) (4) (4) Flow, mg $368.58 $500.20 $751.57 $1 ,073.19 BOD, 1000# $248.55 $298.89 $376.08 $ 384.15 ss, 1000# $238.45 $275.47 $350.47 $ 356.41 Eguiv SFR Rate $115.00 $155.25 $188.18 $ 220.16 Rates for permit users can be changed by the Board without having a Proposition 218 election and approval process because they are not deemed to be an Book page 87 Property Taxes and Sewer User Fees Page 5 of 5 July 14, 2004 incident of property ownership but are deemed to be a charge related solely to a request for service. The statutory Ordinance adoption process, including a notice to the affected Permit Users, would still be required. No changes are proposed for residential rates. The various options described and shown in the table above have been applied to the actual quantities and property taxes of our Permit Users in 2002-03 in an attempt to quantify their impact. Three attached schedules show the impact of the various options in dollars to Permit Users with low, average and high property tax allocations. The second attachment is a listing of each of our Permit Users in 2002-03 showing their property tax allocations (reduced by the proposed 40% shift to the State) and the combined calculated Permit User fee and property tax they would have paid us under the existing rate calculation methodology and the proposed methodology. While the actual discharge quantities and the rates for flow, BOD and SS will change for 2004-05, the relative differences and the impact will be consistent. GGS:lc H:\dept\fin\21 0\CRANE\FAHR\FAHR2004\JUL Y\Staff Report_2004-05 Property Taxes and Sewer User Fees FAHR 7- 04.doc Book page 88 6/29/2004 Permit User Rates Adjusted To Eliminate Property Tax Credit A B 8-A=C D D+C Would Be Calculated No Tax Tax Adopted SSF Rates Raised By b4 adj to sfr credit ded'n Reduction SSF Rates W/o Tax Cr Tax Red'n 2003-04 Flow 498.79 682.76 183.97 316.38 500.35 16,787,263 BOD 326.40 396.76 70.36 216.13 286.49 12,208,445 ss 313.95 365.68 51 .73 207.35 259.08 9,156,934 38,152,642 2004-05 Flow 540.45 672.07 131 .62 368.58 500.20 12,010,325 BOD 358.54 408.88 50.34 248.55 298.89 8,734,695 ss 346.42 383.44 37.02 238.45 275.47 6,553,058 27,298,078 2005-06 Flow 634.75 769.77 135.02 429.40 564.42 12,320,575 BOD 412.83 464.47 51 .64 285.83 337.47 8,960,263 ss 396.27 434.23 37.96 274.22 312.18 6,719,451 28,000,289 2006-07 Flow 648.86 846.55 197.69 500.25 697.94 18,039,213 BOD 438.63 514.24 75.61 328.71 404.32 13,119,394 ss 426.37 481.96 55.59 315.35 370.94 9,840,208 40,998,814 2007-08 Flow 664.94 867.46 202.52 582.79 785.31 18,479,950 BOD 467.64 545.09 77.45 378.01 455.46 13,438,659 ss 460.16 517.11 56.95 362.66 419.61 10,080,947 41 ,999,557 H:\dept\fin\21 0\CRANE\FAHR\FAHR2004\JUL Y\Attachment_ 1_Rate calcs for tax adjustment 7-2004 FAHR.xls Book page 89 6/29/2004 2002-03 Permit Users Impact of Rate Change For Property Taxes Estimated Calculated Total "Excess" Calculated Total Payment "Excess" OCSD 60% Permit User Payment Property Permit User Including Property Permit Permit User Name Share of Fee Including Taxes Fee Property Taxes Taxes Number Property 2002-03 Property Above NO TAX Above Tax Taxes Use Charge REDUCTION Use Charge 2-2-058 DISNEYLAND RESORT 559,204 374,719 559,204 184,485 472,744 559,204 86,460 2-1-028 STREMICKS HERITAGE FOODS LLC 3,635 564,646 564,646 694,885 694,885 2-1-274 ALSTYLE APPAREL-ACTIVEWEAR MFG. CO. INC. 3,875 488,492 488,492 616,099 616,099 2-1-029 MC P FOODS INC. 251 309,590 309,590 383,176 383,176 3-1-072 HOUSE FOODS AMERICA CORPORATION 284,033 284,033 351,131 351,131 2-1-425 KIMBERLY-CLARK WORLDWIDE, INC. 19,607 244,106 244,106 319,007 319,007 7-1-240 ROYAL TY CARPET MILLS INC. 155 211,966 211,966 269,293 269,293 2-1-284 NOR-CAL BEVERAGE CO. INC. (MAIN) 1,898 191,326 191,326 237,206 237,206 2-1-047 KNOTTS BERRY FARM FOODS 2,041 180,651 180,651 223,654 223,654 3-1-390 U.S. DYEING & FINISHING INC. 660 161,050 161,050 207,403 207,403 2-1-024 AERA ENERGY LLC 264 142,006 142,006 196,244 196,244 3-1-085 DEAN FOODS CO. OF CALIF. INC(MILK PLANT) 1,418 130,241 130,241 161,212 161,212 2-1-049 FULLERTON CUL TU RED SPECIAL TIES 959 129,346 129,346 160,251 160,251 3-1 -075 VAN LAW FOOD PRODUCTS, INC. 554 119,873 119,873 146,542 146,542 2-1-283 NOR-CAL BEVERAGE CO. INC. (TETRA) 115,914 115,914 144,115 144,115 1-1-278 CHROMA SYSTEMS PARTNERS 1,252 106,458 106,458 139,159 139,159 52-2-742 DISNEYLAND RESORT -DCA 810 100,923 100,923 127,283 127,283 3-1-102 DAE SHIN USA, INC. 1,180 97,239 97,239 125,365 125,365 3-1-033 SABA TEXTILES INC. 1,009 95,662 95,662 123,405 123,405 3-1-330 SEVEN-UP BOTTLING COMPANY 766 92,671 92,671 115,942 115,942 7-1-054 B. BRAUN MEDICAL INC. 15,072 84,765 84,765 115,657 115,657 3-1-092 Y2K TEXTILE CO., INC. 1,996 84,757 84,757 110,013 110,013 2-1-045 SUNDOR BRANDS INC. A PROCTER & GAMBLE CO 5,122 82,688 82,688 103,196 103,196 57-1-292 JAZZ SEMICONDUCTOR 43,092 77,472 77,472 107,921 107,921 3-1-057 AMERIPEC INC. 584 73,892 73,892 92,205 92,205 11-2-022 BOEING COMPANY (GENERAL FAC) 5,970 69,319 69,319 86,408 86,408 2-2-068 UCI MEDICAL CENTER 67,363 67,363 84,957 84,957 3-1-322 EXPO DYEING AND FINISHING INC. 656 66,994 66,994 87,508 87,508 1-1-075 IRWD OATS 60,089 60,089 84,163 84,163 2-2-067 ST. JOSEPH HOSPITAL 218 56,431 56,431 71,170 71 ,170 2-2-057 CALIF STATE UNIV@ FULLERTON 54,733 54,733 71,722 71,722 6-2-001 FAIRVIEW STATE HOSPITAL 53,747 53,747 67,226 67,226 2-2-054 ANGELICA TEXTILE 268 52,902 52,902 69,079 69,079 3-1-083 DEAN FOODS CO. OF CALIF, INC.(ICE CREAM) 615 52,006 52,006 63,984 63,984 6-1-110 WEST NEWPORT OIL COMPANY 0 49,087 49,087 62,609 62,609 3-1-295 PEPSI-COLA BOTTLING GROUP 3,837 46,280 46,280 57,846 57,846 2-1-674 STEPAN COMPANY 2,670 42,356 42,356 52,723 52,723 1-2-018 UWMC HOSPITAL CORPORATION 8,038 40,181 40,181 50,675 50,675 2-2-367 GRANDE TORTILLA INC. 205 39,852 39,852 48,729 48,729 2-1-575 PRECISION ANODIZING AND PLATING INC. 308 39,400 39,400 48,749 48,749 2-1-656 STEINER CORP. OBA AMERICAN LINEN SUPPLY 39,148 39,148 49,034 49,034 6-2-003 HOAG MEMORIAL HOSPITAL PRESBYTERIAN 38,330 38,330 48,341 48,341 2-2-061 ANAHEIM MEMORIAL MEDICAL CENTER 35,565 35,565 44,854 44,854 7-1-056 TODDS ENTERPRISES 424 35,058 35,058 43,179 43,179 7-1-024 MARUCHAN, INC. 890 34,262 34,262 42,855 42,855 1-2-139 EL METATE FOODS, INC. 317 29,924 29,924 36,663 36,663 3-2-085 SUNCLIPSE, INC. OBA CORRU KRAFT II 2,347 29,052 29,052 35,745 35,745 7-1-013 CITY OF TUSTIN WATER SERVICE (17TH ST.) 27,700 27,700 38,807 38,807 2-2-654 SIOUX HONEY ASSOCIATION CO-OP 890 27,688 27,688 34,333 34,333 1-2-008 GOGLANIAN BAKERIES 790 27,509 27,509 33,754 33,754 3-1-068 K U A TEXTILES INC. 650 27,135 27,135 34,406 34,406 7-1-172 GEMINI INDUSTRIES INC. 97 26,425 26,425 31,575 31,575 2-2-694 DON MIGUEL MEXICAN FOODS INC. 303 25,543 25,543 31,910 31,910 1-1-210 ITT CANNON, A DIVISION OF ITT INDUSTRIES 14,959 14,229 14,959 731 18,929 18,929 2-1-246 DYNAMIC DETAILS INC. 28 23,861 23,861 31,430 31,430 3-1-050 CLEUGH'S RHUBARB COMPANY 216 22,539 22,539 28,186 28,186 3-1-029 RALPHS GROCERY COMPANY (BAKERY) 2,715 22,534 22,534 28,004 28,004 1-2-156 EL TORO MEAT SHOP 128 22,357 22,357 27,590 27,590 2-1-715 WORLD CITRUS WEST 1,811 20,272 20,272 25,222 25,222 3-1-270 JOINT FORCES TRAINING BASE.LOS ALAMITOS 19,408 19,408 24,885 24,885 3-1-065 JOHN A. THOMAS 17,979 17,979 22,723 22,723 3-2-016 WEST ANAHEIM MEDICAL CENTER 1,968 17,880 17,880 22,550 22,550 Page 1 of 8 H:\dept\fin\21 ffi~E\FAHij()AHR2004\JUL Y\Attachment_2_2002-03 recon and rates for FAHR.xls oo · page 6/29/2004 2002-03 Permit Users Impact of Rate Change For Property Taxes Estimated Calculated Total "Excess" Calculated Total Payment "Excess" OCSD 60% Permit User Payment Property Permit User Including Property Permit Permit User Name Share of Fee Including Taxes Fee Property Taxes Taxes Number Property 2002-03 Property Above NO TAX Above Tax Taxes Use Charge REDUCTION Use Charge 1-1-016 ORANGE COUNTY REGISTER 8,584 17,278 17,278 21,799 21,799 7-1-057 EDWARD LIFESCIENCES LLC 2,810 17,072 17,072 22,086 22,086 2-1-081 FAIRCHILD FASTENERS 833 17,009 17,009 22,001 22,001 7-1-047 UNION INCORPORATED 16,902 16,902 21,523 21,523 7-1-021 LOS ANGELES TIMES COMMUNICATIONS LLC 8,296 15,874 15,874 20,056 20,056 7-1-175 PACKARD-HUGHES INTERCONNECT SYSTEMS 994 15,050 15,050 20,379 20,379 2-1-073 CITY OF ANAHEIM -WATER SERVICES 14,962 14,962 18,055 18,055 3-1-026 KC A ELECTRONICS INC. 3,217 14,900 14,900 20,187 20,187 2-2-088 TAC WEST, INC. 14,373 14,373 18,208 18,208 3-1-315 PILKINGTON AEROSPACE 2,361 14,296 14,296 18,158 18,158 2-2-565 PLACENTIA LINDA COMMUNITY HOSPITAL 2,855 14,210 14,210 17,922 17,922 1-1-235 MICRO SEMI CORP. 1,892 13,985 13,985 18,620 18,620 2-2-066 ST. JUDE MEDICAL CENTER 13,608 13,608 17,162 17,162 2-2-239 CHILDREN'S HOSPITAL OF ORANGE COUNTY 13,493 13,493 17,017 17,017 52-1-746 HARRYS DYE & WASH INC 182 13,453 13,453 17,489 17,489 3-2-265 LOS ALAMITOS GENERAL HOSPITAL 3,871 13,122 13,122 16,550 16,550 2-2-434 LA PALMA INTERCOMMUNITY HOSPITAL 1,095 13,111 13,111 16,536 16,536 2-1-470 WEYERHAEUSER COMPANY 7,751 10,559 10,559 13,324 13,324 2-1-393 DANONE WATERS OF N. A. -SANTA ANA 12,349 12,349 16,881 16,881 3-2-060 GERARD TILE 690 11,819 11,819 14,287 14,287 2-2-016 BRIDGFORD FOODS CORPORATION 766 11,436 11,436 14,379 14,379 2-2-229 U.W.M.C. HOSPITAL CORPORATION 3,883 11,329 11,329 14,288 14,288 3-2-229 COLUMBIA HUNTINGTON BEACH HOSPITAL 906 11,261 11,261 14,202 14,202 2-2-083 HEAL TH CARE APPAREL SERVICES 442 11,130 11,130 14,374 14,374 51-1-366 TTM TECHNOLOGIES #1 162 11,108 11,108 14,468 14,468 3-1-140 BECKMAN COULTER, INC. 6,432 10,272 10,272 13,211 13,211 2-1-530 ORANGE COUNTY METAL PROCESSING 50 10,343 10,343 13,462 13,462 2-1-041 IDEAL ANODIZING INC. 264 10,337 10,337 12,775 12,775 11-1-013 NUEVO ENERGY CO (HB) 193 9,809 9,809 12,465 12,465 2-1-395 IDEAL UNIFORM RENTAL SERVICE 9,556 9,556 11,929 11,929 2-1-446 MARCEL ELECTRONICS INT. 162 9,487 9,487 12,696 12,696 52-2-745 WASTE MANAGEMENT OF OC TRANSFER 393 9,377 9,377 11,694 11,694 3-1-084 TREND OFFSET PRINTING SERVICES INC. 9,185 9,185 11,585 11,585 3-1-091 LINFINITY MICROELECTRONICS INC. 3,241 9,006 9,006 12,376 12,376 2-1-138 FROZSUN FOODS, INC. 163 8,743 8,743 11,099 11,099 3-2-234 ULTRA WHEEL COMPANY 1,212 8,503 8,503 11 ,166 11,166 3-2-010 ANAHEIM GENERAL HOSPITAL 1,997 8,461 8,461 10,671 10,671 2-1-618 S & S POLISHING/PLATING 11 7,620 7,620 9,875 9,875 2-2-259 CHAPMAN MEDICAL CENTER 1,253 7,611 7,611 9,599 9,599 2-1-477 MULTI-FINELINE ELECTRONIX INC. 847 7,583 7,583 10,021 10,021 1-1-330 TEXTRON AEROSPACE 4,539 4,153 4,539 387 5,414 5,414 51-2-356 INTERNATIONAL FOOD SOLUTIONS, INC 712 7,557 7,557 9,437 9,437 3-1-036 PRIMATEX INDUSTRIES OF CA INC 335 7,557 7,557 9,804 9,804 2-1-341 AP W ENCLOSURE SYSTEMS LLC SOUTH 4,473 1,258 4,473 3,215 1,662 4,473 2,811 6-1-004 I C N PHARMACEUTICALS INC. 2,585 7,286 7,286 9,837 9,837 7-1-235 PRUDENTIAL OVERALL SUPPLY 215 7,191 7,191 9,049 9,049 7-1-051 MEDTRONIC HEART VALVES, INC. 527 7,031 7,031 8,933 8,933 2-1-069 HARTE-HANKS SHOPPERS 1,330 6,843 6,843 8,611 8,611 3-1-070 COOPER AND BRAIN INC. 4 6,788 6,788 9,100 9,100 7-1-009 JEFFERSON SMURFIT CORPORATION (U.S.) 2,349 6,647 6,647 8,359 8,359 2-1-399 INTEC PRODUCTS INC. 219 6,602 6,602 8,052 8,052 3-1-137 ARROWHEAD PRODUCTS CORPORATION 2,682 6,473 6,473 8,394 8,394 7-2-009 TUSTIN HOSPITAL AND MEDICAL CENTER 6,352 6,352 8,010 8,010 3-1-200 GEORGIA PACIFIC CORPORATION 3,808 5,467 5,467 6,843 6,843 2-1 -559 PRO-TECH 6,341 6,341 8,537 8,537 3-2-061 VENCOR INC OBA VENCOR HOSP-ORANGE COUNTY 1,284 6,284 6,284 7,925 7,925 3-1-035 WINONICS (BREA) 603 6,262 6,262 8,475 8,475 2-1-260 PC A METAL FINISHING, INC. 99 6,232 6,232 8,430 8,430 1-1-024 BURROWS IND. OBA MINUTEMAN PUMPING 177 6,215 6,215 7,771 7,771 3-1-043 GOODWIN COMPANY 142 6,122 6,122 7,632 7,632 2-1-426 KIRKHILL RUBBER CO (SOUTH) 828 5,998 5,998 7,695 7,695 1-1-051 CULLIGAN WATER CONDITIONING 5,875 5,875 7,982 7,982 Page 2 of 8 H:ldeptlfin\21 icwE\FAHijfAHR2004\JUL Y\Attachment 2 2002-03 recon and rates for FAHR.xls oo page -- 6/29/2004 2002-03 Permit Users Impact of Rate Change For Property Taxes Estimated Calculated Total "Excess" Calculated Total Payment "Excess" OCSD 60% Permit User Payment Property Permit User Including Property Permit Permit User Name Share of Fee Including Taxes Fee Property Taxes Taxes Number Property 2002-03 Property Above NO TAX Above Tax Taxes Use Charge REDUCTION Use Charge 7-1-268 CITY OF TUSTIN, WATER SERVICE (MAIN ST.) 5,855 5,855 8,142 8,142 2-1-319 PAYTON TECHNOLOGY CORP 5,848 5,848 7,826 7,826 53-2-371 NAVAL WEAPONS STN SEAL BCH CD 043 5,617 5,617 7,084 7,084 2-1-279 KODAK PROCESSING LABS 143 5,464 5,464 7,198 7,198 52-1-747 DRS TECHNOLOGIES INC 1,093 5,397 5,397 7,247 7,247 2-1-392 DANONE WATERS OF N. A. -ANAHEIM 656 5,361 5,361 7,476 7,476 7-1-033 ENTHONE INC. 211 5,314 5,314 6,650 6,650 2-2-319 SUNCLIPSE, INC. (CORRUGATOR PLANT) 1,032 5,293 5,293 6,500 6,500 2-2-219 BREA COMMUNITY HOSPITAL 3,175 3,733 3,733 4,708 4,708 1-1-023 UNIVERSAL CIRCUITS INCORPORATED 647 5,256 5,256 7,119 7,119 2-1-735 WINONICS, INC. 59 5,165 5,165 7,139 7,139 2-1-133 CIRTECH INC. 160 5,125 5,125 6,577 6,577 6-1-115 HIXSON METAL FINISHING 41 5,122 5,122 7,055 7,055 2-1-067 ARTISTIC PLATING & METAL FINISHING INC. 260 5,085 5,085 6,782 6,782 2-1-079 HAWK INDUSTRIAL UNIFORM 114 5,048 5,048 6,445 6,445 1-1-025 EMBEE INC. #2 25 4,936 4,936 6,708 6,708 1-1-310 S P S TECHNOLOGIES 2,954 2,386 2,954 568 3,103 3,103 2-2-693 S.B. THOMAS INC. 742 4,890 4,890 6,089 6,089 57-1-295 ASTECH ENGINEERED PRODUCTS 118 4,817 4,817 6,600 6,600 1-1-262 PIONEER CIRCUITS 315 4,768 4,768 6,320 6,320 3-1-089 DELPHI AUTOMOTIVE SYSTEMS 2,234 4,563 4,563 6,067 6,067 2-2-222 WEST AMERICAN RUBBER COMPANY INC. 1,163 4,500 4,500 5,831 5,831 3-1-034 SHEPARD BROTHERS INC. 316 4,453 4,453 5,512 5,512 3-1-114 WESTERN YARN DYING 248 4,437 4,437 5,786 5,786 11-1-021 BRINDLE/THOMAS OIL COMPANY 59 4,425 4,425 5,570 5,570 7-2-006 SUNSET ENVIRONMENTAL, INC. #2 164 4,327 4,327 5,296 5,296 2-2-073 NELCO PRODUCTS, INC. 283 4,319 4,319 5,667 5,667 51-1-359 TTM TECHNOLOGIES, INC 642 4,298 4,298 5,577 5,577 57-1-297 RAYNE DEALERSHIP CORP 4,241 4,241 5,798 5,798 3-1-105 AIR INDUSTRIES CORP.-KNOTT 1,856 4,188 4,188 5,281 5,281 3-1-060 CARGILL INC. 1,107 4,172 4,172 5,405 5,405 1-1-068 FABRICATION CONCEPTS CORPORATION 776 4,140 4,140 5,302 5,302 11-1-089 CAL-AURUM INDUSTRIES INC. 226 3,980 3,980 5,531 5,531 3-1-021 CATALINA CYLINDERS A DIV. OF APP 638 3,916 3,916 5,112 5,112 2-1-365 JOHNSON CONTROLS BATTERY INC. 2,174 3,887 3,887 5,182 5,182 1-1-136 ALPHANETICS INC. 102 3,878 3,878 5,221 5,221 7-1-162 ELECTROLURGY INC. 67 3,822 3,822 5,124 5,124 2-1-080 CEROMET INC. 311 3,813 3,813 4,795 4,795 11-2-092 CAMBRO MANUFACTURING 934 3,808 3,808 4,803 4,803 2-2-199 Y K K (U.S.A) INC. 2,284 2,230 2,284 54 3,012 3,012 1-1-046 MARKLAND MANUFACTURING, INC. 487 3,751 3,751 5,038 5,038 52-1-755 PRIVATE LABEL LABORATORIES 413 3,721 3,721 4,600 4,600 2-1-664 STATEK CORPORATION 290 3,600 3,600 4,632 4,632 2-1 -520 OMNI METAL FINISHING, INC. 130 3,558 3,558 4,847 4,847 6-1-144 VELIE CIRCUITS INC. 88 3,555 3,555 4,780 4,780 52-1-748 CALIF CONSOLIDATED WATER PURIFICATION 249 3,526 3,526 4,410 4,410 2-1-105 DUCOMMUN AEROSTRUCTURES 2,083 2,044 2,083 38 2,646 2,646 2-1-153 MICROMETALS INC. #2 792 3,418 3,418 4,438 4,438 3-1-171 CROCKETT CONTAINER CORP. 676 3,411 3,411 4,250 4,250 3-1-093 GRAPHIC PACKAGING CORP. 2,043 1,020 2,043 1,023 1,287 2,043 756 1-1-049 LAM LIGHTING INC. 2,040 701 2,040 1,339 884 2,040 1,156 2-1-714 MONOGRAM SYSTEMS 1,979 3,102 3,102 3,910 3,910 3-1 -011 MEAD PACKAGING 1,906 2,491 2,491 3,136 3,136 2-1-706 UNIVERSAL ALLOY CORP. 855 3,161 3,161 4,147 4,147 53-1-391 MAGNETIC METALS CORP 944 3,114 3,114 3,872 3,872 2-1-253 LINGO INDUSTRIES INC. 64 3,057 3,057 3,825 3,825 2-1-653 WEIDMANN WATER CONDITIONERS, INC. 20 3,031 3,031 4,083 4,083 2-2-385 SIERRA SPRING WATER COMPANY 68 2,953 2,953 4,018 4,018 11-1-002 PRECISION RESOURCE, CALIF DIV 626 2,946 2,946 3,783 3,783 2-1-384 J & H DEBURRING INC. #2 25 2,946 2,946 3,615 3,615 7-1-035 ALUMINUM FORGE -DIV. OF ALUM. PRECISION 164 2,916 2,916 3,606 3,606 6-1-008 SANMINA CORPORATION (AIRWAY) 1,571 2,908 2,908 3,938 3,938 Page 3 of 8 H:\dept\fin\21 ~~EIFAHijiAHR2004\JUL Y\Attachment 2 2002-03 recon and rates for FAHR.xls oo , page -- 6/29/2004 2002-03 Permit Users Impact of Rate Change For Property Taxes Estimated Calculated Total "Excess" Calculated Total Payment "Excess" OCSD60% Permit User Payment Property Permit User Including Property Permit Permit User Name Share of Fee Including Taxes Fee Property Taxes Taxes Number Property 2002-03 Property Above NO TAX Above Tax Taxes Use Charge REDUCTION Use Charge 2-1-337 ELECTRONIC PRECISION SPECIALTIES INC. 121 2,908 2,908 3,974 3,974 2-2-320 SVG THERMCO SYSTEMS INC. 583 2,876 2,876 3,627 3,627 53-1-392 CRC RIM INC 1,590 2,766 2,766 3,633 3,633 2-1-249 AMERICAN CIRCUIT TECHNOLOGY INC. 322 2,758 2,758 3,704 3,704 11-1-012 ACCURATE METAL FABRICATORS 2,722 2,722 3,432 3,432 1-1-155 ANOMIL ENT. OBA DANCO METAL SURFACING 150 2,682 2,682 3,540 3,540 2-1-197 BOEING COMPANY -BLDG 271 1,606 1,981 1,981 2,514 2,514 6-1-007 MESA CONSOLIDATED WATER DISTRICT 2,667 2,667 3,462 3,462 3-1-052 B I TECHNOLOGIES, INC. 1,554 1,600 1,600 2,056 2,056 1-1-055 ANODYNE INC. 24 2,545 2,545 3,371 3,371 57-1-296 COSMOTRONIC CORP 26 2,524 2,524 3,255 3,255 2-1-077 COPPER CLAD MULTILAYER PRODUCTS INC. 2,491 2,491 3,281 3,281 2-1-123 TAYLOR-DUNN MANUFACTURING COMPANY 1,464 1,264 1,464 201 1,595 1,595 1-1-027 EMBEE INC. #1 30 2,431 2,431 3,325 3,325 5-2-003 RENAL RESEARCH INSTITUTE, LLC 2,392 2,392 3,017 3,017 6-1-135 EATON CORPORATION 192 2,384 2,384 3,001 3,001 2-1-031 EXCELLO CIRCUITS MANUFACTURING CORP. 153 2,370 2,370 3,178 3,178 11-1-113 SPEEDY CIRCUITS, FACILITY #2 120 2,360 2,360 3,130 3,130 3-1-167 COASTLINE METAL FINISHING CORP. 230 2,360 2,360 3,177 3,177 2-1-323 CIRCUIT ACCESS 55 2,347 2,347 2,943 2,943 2-1-075 VILLA PARK ORCHARDS ASSOCIATION 474 2,321 2,321 2,896 2,896 1-1-026 EMBEE INC. #3 30 2,271 2,271 3,084 3,084 2-1-290 CONTINUOUS COATING CORPORATION 402 2,263 2,263 3,059 3,059 1-1-354 WEBER PRECISION GRAPHICS 162 2,257 2,257 2,828 2,828 7-1-059 TOYOTA RACING DEVELOPMENT 242 2,237 2,237 2,831 2,831 7-1-011 RICOH ELECTRONICS INC. 116 2,230 2,230 2,913 2,913 2-1-703 ULTRA PURE METAL FINISHING, INC. 118 2,200 2,200 2,909 2,909 2-1-226 BRISTOL INDUSTRIES 684 2,176 2,176 2,872 2,872 7-1-038 NEWPORT CORPORATION 1,303 1,807 1,807 2,279 2,279 2-1-566 PLATECORP #2, INC. 176 2,094 2,094 2,834 2,834 7-1-008 RICOH ELECTRONICS #2 795 2,090 2,090 2,626 2,626 52-2-741 METRO WATER DISTRICT OF SO CA 2,070 2,070 2,615 2,615 2-1-174 AP W ENCLOSURE SYSTEMS, LLC 468 2,029 2,029 2,611 2,611 7-1-029 REVERE TRANSDUCERS, INC. 1,184 787 1,184 397 1,020 1,184 164 7-1-053 PRINTRONIX, INC. 1,184 1,785 1,785 2,259 2,259 6-1-009 SANMINA CORPORATION (REDHILL) 1,061 1,947 1,947 2,659 2,659 6-1-006 AMETEK AEROSPACE 292 1,846 1,846 2,367 2,367 52-2-744 SMT DYNAMICS 1,796 1,796 2,273 2,273 2-1-535 ORANGE COUNTY PLATING CO., INC. 18 1,784 1,784 2,422 2,422 1-1-038 ALUMINUM PRECISION PRODUCTS INC. CENTRAL 1,783 1,783 2,260 2,260 2-1-063 CARTEL ELECTRONICS 1,773 1,773 2,355 2,355 2-1-213 BLACK OXIDE INDUSTRIES INC. 55 1,765 1,765 2,381 2,381 52-1-753 GENERAL CERAMICS LLC 1,748 1,748 2,246 2,246 2-1-336 ELECTRON PLATING Ill INC. 131 1,726 1,726 2,368 2,368 2-1-681 SUNCLIPSE INC. 1,032 1,425 1,425 1,791 1,791 1-1-037 CHROME TECHNOLOGY, INC. 217 1,716 1,716 2,285 2,285 2-1-052 KIRKHILL RUBBER CO (SOUTH) 1,026 1,026 1,026 1,026 1,026 3-1-010 BAZZ HOUSTON CO. 343 1,703 1,703 2,236 2,236 7-1-050 PRIME TECHNOLOGIES, INC. 245 1,689 1,689 2,176 2,176 2-1-048 CALIFORNIA CUSTOM SHAPES, INC. 168 1,683 1,683 2,149 2,149 3-1-110 ALL METALS PROCESSING OF O.C. INC. 290 1,676 1,676 2,189 2,189 3-1-120 LINDBERG HEAT TREATING CO.-ALUMATHERM 706 1,676 1,676 2,250 2,250 1-1-069 SOUTH COAST CIRCUITS #3 63 1,666 1,666 2,218 2,218 7-2-217 0 CB REPROGRAPHICS 106 1,664 1,664 2,099 2,099 3-2-325 WATERMAN 9 1,661 1,661 2,319 2,319 2-1-289 CREST COATING INC. 272 1,651 1,651 2,094 2,094 7-1-055 INTEGRATED AEROSPACE, INC. 1,637 1,637 2,066 2,066 3-1-107 HANSON-LORAN CO., INC. 276 1,622 1,622 2,052 2,052 3-2-348 TRIM-LOK I R.T.P. 959 1,610 1,610 2,160 2,160 2-1-150 ANAHEIM PLATING & POLISHING INC. 96 1,588 1,588 2,125 2,125 3-1-090 BEARING INSPECTION INC. 946 896 946 50 1,130 1,130 2-1-236 FOAMEX L.P. 1,569 1,569 1,981 1,981 Page 4 of 8 H:\dept\fin\21~~EIFAHij:fAHR2004\JUL Y\Attachment 2 2002-03 recon and rates for FAHR.xls oo -page -- 6/29/2004 2002-03 Permit Users Impact of Rate Change For Property Taxes Estimated Calculated Total "Excess" Calculated Total Payment "Excess" OCSD60% Permit User Payment Property Permit User Including Property Permit Permit User Name Share of Fee Including Taxes Fee Property Taxes Taxes Number Property 2002-03 Property Above NO TAX Above Tax Taxes Use Charge REDUCTION Use Charge 2-1-199 CLASSIC PLATING INC. 1,556 1,556 2,100 2,100 2-1-379 DATA AIRE INC. #2 923 418 923 505 529 923 394 52-1-758 ESSEX ELECTRIC INC 915 1,506 1,506 1,926 1,926 2-1-078 MILBANK WEST INC. 250 1,514 1,514 1,938 1,938 53-1-394 BOIENG COMPANY (CYPRESS) 888 1,384 1,384 1,746 1,746 2-2-251 SOUTH COAST WATER 299 1,474 1,474 1,922 1,922 1-1-138 ACCURATE CIRCUIT ENGINEERING 63 1,395 1,395 1,780 1,780 3-1-104 ARNOLD ELECTRONICS, INC. #1 22 1,386 1,386 1,902 1,902 1-1-142 DATA ELECTRONIC SERVICES INC. 75 1,381 1,381 1,845 1,845 1-1-257 GALLADE CHEMICAL INC. 178 1,348 1,348 1,741 1,741 1-1-260 PLEION CORPORATION #2 796 814 814 1,042 1,042 2-1-093 ECONOLITE CONTROL PRODUCTS INC. 353 1,313 1,313 1,670 1,670 1-1-100 ALUMINUM PRECISION PRODUCTS INC.-SUSAN 124 1,304 1,304 1,676 1,676 2-2-390 GUNTHER ATHLETIC SERVICE 22 1,304 1,304 1,720 1,720 1-1-115 ACTIVE PLATING INC. 1,295 1,295 1,749 1,749 2-1-480 MURRIETTA CIRCUITS INC. 88 1,272 1,272 1,658 1,658 2-2-370 HAMILTON MATERIALS 112 1,268 1,268 1,599 1,599 3-1-073 ALLOY DIE CASTING CO. 456 1,267 1,267 1,630 1,630 6-2-109 CITY OF NEWPORT BEACH 1,263 1,263 1,650 1,650 53-1-395 PERFORMANCE MACHINE INC 1,238 1,238 1,561 1,561 2-1-134 CYTECH ENGINEERIED MATERIALS 1,224 1,224 1,545 1,545 2-1-381 HARTWELL CORPORATION 466 1,214 1,214 1,546 1,546 11-1-018 BOEING COMPANY (GRAHAM) 1,193 1,193 1,505 1,505 2-1-137 SERRANO WATER DISTRICT 1,193 1,193 1,459 1,459 3-2-015 SOUTHERN CALIFORNIA EDISON 1,176 1,176 1,497 1,497 7-1-034 IRVINE SENSORS CORP. 699 191 699 508 247 699 452 2-2-184 LACEY CUSTOM LINENS 40 1,162 1,162 1,458 1,458 2-1-576 PRECISION PAINTING 284 1,142 1,142 1,381 1,381 2-1-325 DUNHAM METAL PROCESSING 19 1,114 1,114 1,426 1,426 1-1-050 VERTEQ PROCESS SYSTEMS INC. 1,097 1,097 1,448 1,448 1-1-013 RB C TRANSPORT DYNAMICS CORP. 298 1,092 1,092 1,377 1,377 11-1-132 TIODIZE COMPANY, INC. 96 1,089 1,089 1,487 1,487 3-1-152 CANNON EQUIPMENT WEST INC. 437 1,082 1,082 1,379 1,379 3-1-236 HYATT DIE CASTING & ENGINEERING CORP. 630 572 630 57 722 722 11-1-015 CITY OF HUNTINGTON BEACH FIRE DEPARTMENT 1,041 1,041 1,399 1,399 7-1-279 SEMICOA SEMICONDUCTORS 137 1,009 1,009 1,329 1,329 2-1-428 KRYLER CORPORATION 998 998 1,383 1,383 2-1-252 ALL METAL PAINT STRIPPING INC. #2 598 68 598 530 85 598 513 11-2-024 GARG-OIL PRODUCTION LLC 139 989 989 1,390 1,390 57-1-294 FMH INVESTOR GROUP 370 984 984 1,270 1,270 2-1-413 QUALITY ALUMINUM FORGE# 2 77 977 977 1,244 1,244 51-1-368 BRASSTECH, INC 974 974 1,228 1,228 2-1-062 CADILLAC PLATING 137 973 973 1,311 1,311 2-1-185 HIGHTOWER PLATING & MANUFACTURING CO. 473 971 971 1,309 1,309 2-1-402 JELLCO CONTAINER INC. 576 731 731 919 919 2-1-359 KC A ELECTRONICS, INC. 519 959 959 1,263 1,263 2-1-168 ANAHEIM EXTRUSION CO. INC. 569 501 569 68 632 632 3-1-311 SCIENTIFIC SPRAY FINISHES, INC. 25 944 944 1,234 1,234 53-1-393 GARAN PRECISION ENGINEERING 556 735 735 927 927 2-2-248 SCISOREK & SON FLAVORS, INC. 375 909 909 1,160 1,160 2-1-169 TAORMINA INDUSTRIES INC. #4 524 906 906 1,154 1,154 2-1-389 ADVANCE TECH PLATING INC. #2 126 904 904 1,183 1,183 1-1-275 REID METAL FINISHING 134 896 896 1,191 1,191 7-1-037 AVIATION EQUIPMENT STRUCTURES, INC. 535 292 535 243 369 535 166 2-1-672 STAINLESS MICRO-POLISH INC. 93 887 887 1,203 1,203 1-1-042 L & N UNIFORM SUPPLY COMPANY,INC.(CLEAN) 874 874 1,099 1,099 2-2-096 ANAHEIM TRUCK DEPOT #2 BIN WASH 524 656 656 828 828 2-1-111 ALLIED PACIFIC METAL STAMPING 476 869 869 1,096 1,096 2-1-121 FINELINE CIRCUITS & TECHNOLOGY INC. 118 861 861 1,112 1,112 2-1-424 KINSBURSKY BROTHERS SUPPLY INC. 71 856 856 1,116 1,116 3-1-013 AIR INDUSTRIES CORP. (CHAPMAN) 508 618 618 779 779 2-1-427 H. KOCH & SONS COMPANY 492 172 492 320 226 492 266 Page 5 of 8 H:\dept\fin\21 ~~NEIFAHijf AHR2004\JUL Y\Attachment_2_2002-03 recon and rates for FAHR.xls oo 'page 6/29/2004 2002-03 Permit Users Impact of Rate Change For Property Taxes Estimated Calculated Total "Excess" Calculated Total Payment "Excess" OCSD 60% Permit User Payment Property Permit User Including Property Permit Permit User Name Share of Fee Including Taxes Fee Property Taxes Taxes Number Property 2002-03 Property Above NO TAX Above Tax Taxes Use Charge REDUCTION Use Charge 2-1-505 NEVILLE CHEMICAL COMPANY 0 812 812 1,091 1,091 1-1-133 ALMATRON ELECTRONICS, INC. 107 810 810 1,077 1,077 1-1-054 SOUTH COAST CIRCUITS #2 800 800 1,047 1,047 2-1-092 ELECTRORACK PRODUCTS CO. INC. 471 572 572 724 724 52-1-751 UOP LLC 768 768 1,032 1,032 1-1-070 ORANGE CONTAINER, INC. 766 766 958 958 2-1-383 NU-TEC POWDER COATING 196 764 764 960 960 1-2-016 PACIFIC QUARTZ, INC. 66 764 764 971 971 2-1-102 AMERIMAX BUILDING PRODUCTS INC. 266 763 763 997 997 51-1-365 SOUTH COAST CIRCUITS #4 72 760 760 1,044 1,044 3-1-012 TAYCO ENGINEERING, INC. 756 756 953 953 2-1-094 NOLLAC OIL COMPANY 12 738 738 997 997 1-1-062 ELECTROSERVICES 2000 INC. 174 730 730 1,002 1,002 2-1-090 SUPERIOR PLATING 680 680 931 931 3-1-106 FULLERTON PLATING 398 109 398 289 147 398 251 3-1-027 IP C CAL FLEX INC. 123 651 651 842 842 11-1-017 HB OIL OPERATIONS TRUST 22 651 651 847 847 57-1-293 NEWPORT PRECISION OPTICS 636 636 806 806 2-1-064 SECHRIST INDUSTRIES, INC. 633 633 793 793 51-1-363 WHEEL SERVICES GROUP, INC 632 632 849 849 2-1-286 HARBOR TRUCK BODIES INC, 378 493 493 624 624 3-1-260 LA HABRA PLATING CO. INC. 15 626 626 874 874 2-1-297 CUSTOM ENAMELERS INC. 143 624 624 820 820 7-2-003 SUNSET ENVIRONMENTAL, INC. #1 246 623 623 786 786 2-1-282 THERMAL-VAC TECHNOLOGY 620 620 810 810 1-1-044 SOUTH BAY CHROME SALES/CHROME EFFECTS 126 617 617 823 823 1-1-030 SOUTH COAST CIRCUITS, INC. 79 617 617 831 831 2-1-433 LEACH INTERNATIONAL 156 607 607 823 823 2-1-176 PLEGEL OIL COMPANY (BLATTNER-A.HA) 168 603 603 838 838 2-1-501 SANMINA CORPORATION 116 601 601 796 796 3-1-042 GENERAL CONTAINER CORPORATION 349 407 407 516 516 53-1-396 WEYERHAEUSER COMPANY #2 566 566 714 714 2-1-172 GEORGE A. JONES, IMPERIAL #2 WELL 29 555 555 757 757 2-1-619 SF PP, L.P. 32 546 546 690 690 3-2-124 GARDNER LITHOGRAPH, INC. 327 372 372 473 473 11-2-134 CAPRO OIL COMPANY 22 542 542 761 761 2-1-276 RT I ELECTRONICS, INC. 8 533 533 673 673 11-2-005 SOUTH COAST OIL CORPORATION 182 506 506 711 711 1-1-065 SELECT CIRCUITS 278 498 498 652 652 3-1-341 SOLDERMASK, INC. 132 481 481 601 601 1-1-283 MASK TECHNOLOGY INC. 126 470 470 625 625 2-1-596 QUALITY ALUMINUM FORGE 175 461 461 608 608 2-1-318 BRIGHT ARMOUR PLATING 78 453 453 619 619 7-1-058 CITY OF TUSTIN -MAINTENANCE YARD 448 448 566 566 2-1-702 UNITED CIRCUIT TECHNOLOGY INC. 57 448 448 587 587 2-1-563 PICOFARAD INC. 62 426 426 546 546 52-1-754 RTR INDUSTRIES 46 423 423 534 534 52-1-749 MILLENNIUM CIRCUITS SERVICES CORP 423 423 546 546 51-1-367 SANTA ANA PLATING (CNK CAPITAL) 44 422 422 533 533 2-1-243 D & S CUSTOM PLATING INC. 42 416 416 553 553 2-1-203 AERA ENERGY LLC #2 246 87 246 158 110 246 135 7-1-141 CHEEK ENGINEERING & STAMPING 244 236 244 8 307 307 2-1-192 AR OSERVICE 243 265 265 337 337 57-1-291 TOYOTA RACING DEVELOPMENT #2 242 405 405 512 512 2-1-022 DITTY DRUM COMPANY, INC. 27 402 402 540 540 1-1-011 MARGARETIS TEXTILE SERVICE 233 386 386 487 487 1-1-118 BA F INDUSTRIES 231 327 327 419 419 1-1-064 EFT FAST QUALITY SERVICE, INC. 88 362 362 490 490 11-1-024 CEMPI INDUSTRIES INC. 175 361 361 466 466 2-1-202 TRANSLINE TECHNOLOGY INC. 213 170 213 43 227 227 52-1-752 CD VIDEO INC 354 354 465 465 1-2-021 MARK OPTICS INC. 66 354 354 448 448 Page 6 of 8 H:ldeptlfin\211ifcR~NE\FAHij~AHR2004\JUL Y\Attachment 2 2002-03 recon and rates for FAHR.xls oo -~~ -- 6/29/2004 2002-03 Permit Users Impact of Rate Change For Property Taxes Estimated Calculated Total "Excess" Calculated Total Payment "Excess" OCSD 60% Permit User Payment Property Permit User Including Property Permit Permit User Name Share of Fee Including Taxes Fee Property Taxes Taxes Number Property 2002-03 Property Above NO TAX Above Tax Taxes Use Charge REDUCTION Use Charge 52-1-757 LINVATEC CORPORATION 38 349 349 441 441 1-1-284 OLYMPIC POWDER COATINGS INC. 108 349 349 451 451 3-1-094 BASIC ELECTRONICS, INC. 201 277 277 350 350 1-1-072 CAL-TRONICS CIRCUIT INC. -SANTA ANA 333 333 439 439 7-1-020 ALL TEK CIRCUIT INC. 328 328 448 448 2-1 -187 RIGIFLEX TECHNOLOGY INC. 87 322 322 426 426 11-1-001 MILLETT INDUSTRIES 322 322 408 408 52-1-756 IKON POWDER COATING 304 304 390 390 11-1-007 M_S. BELLOWS 52 302 302 378 378 2-1 -016 SANTANA SERVICES 15 300 300 383 383 52-1-759 AQUARIAN COATINGS CORP 21 300 300 378 378 51-1-361 GORILLAS POLISHING AND PLATING 150 299 299 400 400 2-1-401 INDEPENDENT FORGE 175 292 292 371 371 1-1-074 LAM-PLATE TECH INC. 118 291 291 393 393 3-1-049 LOGI GRAPHICS, INC. 144 290 290 391 391 2-1 -061 MORAVEK BIOCHEMICALS INC. 3 285 285 381 381 6-1-002 CRITERION MACHINE WORKS 140 283 283 359 359 2-1 -015 PACIFIC UTILITY PRODUCTS INC. 169 277 277 367 367 3-1-062 DERM COSMETICS LAB'S INC. 169 260 260 325 325 3-1-056 A & G ELECTROPOLISH 167 214 214 290 290 2-1-272 CIRCUIT TECH INC. 115 269 269 348 348 1-1-008 PRECISION CIRCUITS WEST INC. 268 268 351 351 2-1-581 PRECON, INC. 34 257 257 326 326 1-1-265 PRECIOUS METALS PLATING 93 255 255 342 342 1-1 -036 ALLOY TECH ELECTROPOLISHING INC. 152 199 199 267 267 2-1-171 KENLEN SPECIALITIES INC. 126 253 253 337 337 2-1-673 STRIP CLEAN COMPANY 14 252 252 338 338 11-1 -129 SPEEDY CIRCUITS, DIV OF PJC 247 247 312 312 52-1-750 A&A DEBURRING AND TUMBLING 243 243 310 310 1-1-066 AQUA-CON COMPANY 50 238 238 321 321 11-1-124 ROCK INDUSTRIES, INC. 97 231 231 301 301 1-1-277 PRECISION POWDERCOATING INC_ 138 88 138 50 115 138 22 1-2-013 MEDEVA PHARMACEUTICALS CA, INC. 131 205 205 258 258 2-1-403 SUPERIOR PROCESSING 128 203 203 277 277 2-1-189 CENTRAL POWDER COATING 211 211 272 272 2-1-314 PERFORMANCE POWDER, INC. 204 204 264 264 5-1-008 BASIN MARINE INC. 18 203 203 265 265 52-2-743 BRIDGEMARK CORP-DOWLING #2 202 202 284 284 2-1-088 A & R POWDER COATING INC. 195 195 261 261 2-1-237 UNITED CUSTOM POLISHING & PLATING 49 187 187 248 248 2-1-201 BURLINGTON ENGINEERING INC. 61 184 184 237 237 2-1-572 POWDERCOAT SERVICES INC. #1 25 183 183 238 238 3-1-186 PURE-CHEM PRODUCTS COMPANY INC. 70 180 180 228 228 3-2-205 S & COIL CORPORATION 106 106 106 106 106 2-1-152 ADVANCE TECH PLATING INC. 168 168 226 226 2-1-229 DETAILS INC #3, OBA DYNAMIC DETAILS INC. 100 92 100 8 116 116 1-1-073 X Z X ELECTRONICS 97 121 121 156 156 11-2-025 PIER OIL COMPANY 35 157 157 221 221 1-1-032 VICTORY CIRCUITS INC_ 157 157 200 200 2-1-070 PACIFIC IMAGE TECHNOLOGY, INC. 151 151 206 206 2-1-158 ELECTRO METAL FINISHING CORPORATION 91 145 145 183 183 2-1-166 VEECO ELECTRO FAB INC. #2 89 67 89 22 92 92 7-1-158 DYE TECHNIQUE INC. 26 144 144 181 181 2-1-343 ENGRAVERS INK CO 85 89 89 112 112 2-1-033 S M T DYNAMICS LLC 139 139 182 182 1-1-071 AUTO-CH LOR SYSTEM OF WASHINGTON, INC. 62 130 130 162 162 2-1-573 POWDERCOAT SERVICES INC. #2 25 125 125 157 157 3-2-181 O'DONNELL OIL COMPANY 65 10 65 55 12 65 53 2-2-093 OLIVE OIL CO. 65 66 66 87 87 51-1-362 A&K DEBURRING AND TUMBLING 108 108 137 137 2-1-074 POWDERCOAT SERVICES INC. #4 104 104 137 137 6-1-138 RAILMAKERS, INC. 51 104 104 131 131 Page 7 of 8 H:\deptlfln\210£ft ~E\FAHijtfAHR2004\JUL Y\Attachment_2_2002-03 recon and rates for FAHR.xls oo -page 6/29/2004 2002-03 Permit Users Impact of Rate Change For Property Taxes Estimated Calculated Total "Excess" Calculated Total Payment "Excess" OCSD 60% Permit User Payment Property Permit User Including Property Permif Permit User Name Share of Fee Including Taxes Fee Property Taxes Taxes Number Property 2002-03 Property Above NO TAX Above Tax Taxes Use Charge REDUCTION Use Charge 2-1-281 MTS MICROELECTRONICS INC. 99 99 125 125 2-1-569 POWDERCOAT SERVICES INC. #3 97 97 124 124 3-1-017 EXQUISITE DESIGNS INC. 93 93 129 129 2-1-346 ACROBURR INC. #2 55 93 93 122 122 7-1-040 WINTEC, LLC 90 90 114 114 7-1-018 WESCO SERVICES 84 84 107 107 11-2-259 PETRO PRIZE 7 81 81 114 114 52-1-761 DATA SOLDER INC 69 69 87 87 2-1-352 GOMTECH ELECTRONICS 27 62 62 83 83 2-1-082 TECHPLATE ENGINEERING CO. INC. 62 62 78 78 2-2-029 COLUMBINE ASSOCIATES 12 52 52 72 72 2-2-731 SHERWIN D. YOELIN 6 50 50 68 68 11-2-295 WILLIAM J. SCOTT 28 28 28 28 28 53-2-372 DR SMOOTHIE ENTERPRISES 44 44 56 56 3-2-236 BRINDLEfTHOMAS 41 41 58 58 3-1-058 STAR POWDER COATING 9 35 35 44 44 11-2-265 WILVIAN JEWELL RENNER 17 17 16 1 17 16 1-1-047 HI-TECH STENCILS 27 27 34 34 2-1-421 REMEDY ENVIRONMENTAL SERVICES 24 24 30 30 52-1-760 MIRACLE STRIPPING & PLATING, INC 23 23 30 30 52-1-763 CUSTOM POWDER COATINGS 20 20 25 25 11-2-009 SIGNAL ASSOCIATES 3 19 19 27 27 11-2-147 W. M. ELLIOTT 7 7 7 7 7 11-2-103 ALEXANDER OIL COMPANY 3 3 3 3 3 11-1-019 SOUTH COAST OIL COMPANY 11-2-020 SUNSET BEACH SANITARY DIST 908.290 7,014,795 7,211,333 196,538 8,901 ,010 8.995,795 94,785 Page 8 of 8 H:\dept\fin\21 m.cRANEIF. AHBIFAHR2004\JUL Y\Attachment 2 2002-03 recon and rates for FAHR.xls Hook~~~ -- 6/29/2004 High Property Tax Paying Permit User Example of Options 03-04 Adopted Rates Net Requirements 2002-03 Unit Of )escr Quantitiy Measure Rates Fees w 354 mg 316.38 111,999 D 731 1,000 # 216.13 157,991 731 1,000 # 207.53 151 ,704 421 ,694 s = min chg) rrent Practice (taxe ·mit User reconciliat perty taxes paid perty taxes refunded feet based ssf on ta ion x bill refund :al paid ion < REFUND Option "mit User reconciliat ,perty taxes paid ,perty taxes refunded feet based ssf on tax refund :al paid bill on credit for taxes rmit User reconciliati 1perty taxes paid 1perty taxes refunded feet based ssf on tax bill refund tal paid 932,000 48,000 48 000) 932,000 932,000 (510,306 I 48,000 -o C' '10) 421,694 Option 1 374,000 932,000 48,000 1,354,000 03-04 Rates Without Reduction for Funding From: Property Taxes COPs, Reserves Any Revenues and Prop Taxes or Reserves Rates Fees Rates Fees Rates Fees 500.35 177,124 751.57 266,056 1,073.19 379,909 286.49 209,424 376.08 274,914 384.15 280,814 259.08 189,387 350.47 256,194 356.41 260,536 575,936 797,1 64 921 ,259 Option 2 932,000 932,000 932,000 48,000 48,000 48,000 '18 000) ( le. {WC J (48 0001 932,000 932,000 932,000 Option 3 Option 4 932,000 932,000 932,000 (356,064) I 1 ;_ 8 (10,741 1 48,000 48,000 48,000 148,0uul 145 J(.;( I t4-ilOGO} 575,936 797,164 921,259 527,936 749,166 873,259 932,000 932,000 932,000 48,000 48,000 48,000 1,507,936 1,729,166 1,853,259 H:\dept\fin\21 0\CRANE\FAHR\FAHR2004\JUL Y\Attachment_3_Permit User Rate for taxes.xlshigh tax example Bookpage98 6/29/2004 Moderate Property Tax Paying User Example of Options 03-04 Adopted Rates 03-04 Rates Without Reduction for FundinQ From: Net Requirements Property Taxes COPs, Reserves Any Revenues 2002-03 Unit Of and Prop Taxes or Reserves Descr Quantitiy Measure Flow 16 mg BOD 35 1,000 # ss 32 1,000 # Current Practice (taxe Permit User reconciliat property taxes paid property taxes refunde sq feet based ssf on ta s = min chg) ion d x bill ssf refund Total paid Tax REFUND Option Permit User reconciliat property taxes paid property taxes refunde sq feet based ssf on ta ion d x bill ssf refund Total paid taxes No credit to User for Permit User reconciliat property taxes paid property taxes refunde sq feet based ssf on ta ssf refund Total paid ion d x bill Rates Fees 316.38 5,062 216.13 7,565 207.53 6,641 19,268 14,306 8,516 ~ "-.,r. I _! 19,268 14,306 0 8,516 ~3 ")I } 19,268 Option 1 10,752 14,306 8,516 33,574 Rates Fees Rates Fees Rates 500.35 8,006 751.57 12,025 1,073.19 286.49 10,027 376.08 13,163 384.15 259.08 8,291 350.47 11 ,2 15 356.41 26,323 36,403 Option 2 3,501 13,581 14,306 14,306 8,516 8,516 26,323 36,403 Option 3 Option 4 3,501 13,581 14,306 14,306 8,516 8,516 26,323 36,403 17,807 27,887 14,306 14,306 8,516 8,516 40,629 50,709 H:\dept\fin\210\CRANE\FAHR\FAHR2004\JUL Y\Attachment_3_Permit User Rate for taxes.xlslow tax example Book page 99 Fees 17,171 13,445 11 ,405 42,021 19,199 14,306 8,516 42,021 19,199 14,306 8,516 42,021 19,199 14,306 8,516 42,021 6/29/2004 Low Property Tax Paying User Example of Options 03-04 Adopted Rates 03-04 Rates Without Reduction for Fundino From: Net Requirements Property Taxes COPs, Reserves Any Revenues 2002-03 Unit Of Proposed and Prop Taxes or Reserves Descr Quantltiy Measure Flow 16 mg BOD 35 1,000 # ss 32 1,000 # Current Practice (taxe Permit User reconciliat property taxes paid property taxes refunde sq feet based ssf on ta s = min chg) ssf refund Total paid ion d x bill ion Tax REFUND Option Permit User reconciliat property taxes paid property taxes refunde sq feet based ssf on ta d ssf refund Total paid x bill No credit to User fort Permit User reconciliat property taxes paid property taxes refunded sq feet based ssf on ta axes ion x bill ssf refund Total paid Rates Fees 316.38 5,062 216.13 7,565 207.53 6,641 19,268 5,752 5,000 8,516 19,268 5,752 5,000 0 8,516 19.268 Option 1 10,752 5,000 8,516 24,268 Rates Fees Rates Fees Rates 500.35 8,006 751.57 12,025 1,073.19 286.49 10,027 376.08 13,163 384.15 259.08 8,291 350.47 11 ,215 356.41 26,323 36,403 Option 2 12,807 22,887 5,000 5,000 8,516 8,516 26,323 36,403 Option 3 Option 4 12,807 22,887 5,000 5,000 8,516 8,516 26,323 36,403 17,807 27,887 5,000 5,000 8,516 8,516 31 ,323 41,403 H:\dept\fin\21 0\CRANE\FAHR\FAHR2004\JUL Y\AttachmenL3_Permit User Rate for taxes.xlslow tax example Book page 100 Fees 17,171 13,445 11,405 42,021 28,505 5,000 8,516 42,021 28,505 5,000 8,516 42,021 33,505 5,000 8,516 47,021 REDLINE OF PROPOSED CHANGES TABLE G CLASS I AND CLASS II PERMlTTEES AND SPECIAL PURPOSE DISCHARGE PERMITTEES CHARGES FOR USE Class I and II Permit User FY 2003-04 FY 2004.-05 FY 2005-06 FY 2006-07 Flow(*) $316.38 $3€l8 .58 $429.40 $500.25 $500L20 $564.42 $697.94 B.O.D. (**) $216.13 $248.55 $285.83 $328.71 $298.89 $337.47 $404.32 S.S. (***) $207.35 $23!l45 $274.22 $315.35 $275.47 $312.18 $370.94 Domestic Equivalent $100.00 $115.00 $132.00 $153.00 S'1ecial Pur'1ose Discharge Permit Flow(*) B.O.D. (**) S.S.(***) Domestic Equivalent (*) Flow (**) B.O.D. (***) S.S. FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 $316.38 $368.58 $429.40 $500.25 $500.20 $564.42 $697.94 $216.13 ~41U:i5 $~ $a2i.71 $298.89 $337.47 $404.32 $207.35 $238.45 $274.22 $315.35 $275.47 $312.18 $370.94 $100.00 $115.00 $132.00 $153.00 Per million gallons of Flow Per thousand pounds of Biochemical Oxygen Demand Per thousand pounds of Suspended Solids FY 2007-08 $582.79- $785.31 $378.Q~ $455.46 $362.66 $419.61 $175.00 FY200T-08 $582.79 $785.31 w~ $455.46 $3€l2.ee $419.61 $175.00 All properties located within Revenue Area No. 14 pay no annual service fees. District costs relating to providing service to these properties are billed by OCSD directly to the Irvine Ranch Water District, the local agency providing the local sewer service. Book page 101 ORDINANCE NO. OCSD-24 ADOPTING REVISED TABLE G RE PERMITTEE CHARGES FOR USE AND REAFFIRMlNG ALL OTHER CHARGES AN ORDINANCE OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ESTABLISHING SANITARY SEWER SERVICE CHARGES; ESTABLISHING CAPITAL FACILITIES CAPACITY CHARGES; ADOPTING MISCELLANEOUS CHARGES AND FEES RELATING TO INDUSTRIAL CHARGERS, SOURCE CONTROL PERMITTEES AND WASTEHAULERS; AND REPEALING ORDINANCE NO. 22 WHEREAS, the Board of Directors of the Orange County Sanitation District ("District") has previously adopted Ordinance No. OCSD-22, establishing annual Sanitary Sewer Service Charges for all uses, establishing Capital Facilities Capacity Charges to be imposed when properties either newly-connect to the District's system, or expand the use of the property previously connected to the .Qistrict; establishing miscellaneous industrial discharger fees, source control/non-compliance sampling fees, and wastehauler charges, which Ordinance is presently in full force and effect; and WHEREAS, for purposes of improved efficiency and effectiveness of the District's operations, it is the intent, by the adoption of this Ordinance, to re-enact the existing Ordinance that establishes sanitary sewer service charges and capital facilities fees, and to provide for increases in certain miscellaneous charges and fees. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District does hereby ORDAIN: Section I. Fees and Charges Ordinance -Adopted ARTICLE I: TABLE OF CONTENTS RECITAL OF FINDINGS Section 1.01, Findings -Declaration of Intent ARTICLE II: SANITARY SEWER SERVICE CHARGES Section 2.01, Purpose and Scope Section 2.02, Annual Sanitary Sewer Service Charge WS&S -TLW:pj: 1 88361 ;07 /06/04 1 Book page 102 FAHR COMMITTEE Meeting Date 7/14/04 AGENDA REPORT Item Number FAHR04-70 Orange County Sanitation District FROM : Carol Beekman, Director of Communications and Administrative Services SUBJECT: Communications and Administrative Services Strategic Plan FY 2004-05 GENERAL MANAGER'S RECOMMENDATION For information only SUMMARY The FY 2004-05 strategic plan now includes goals, objectives, strategies and tactics for all programs in both Communications and Administrative Services in this annual document. PRIOR COMMITTEE/BOARD ACTIONS Communications Services Strategic Plan FY 2003-04 presented to FAHR in October 2003. Received and filed by Board October 2003. Quarterly updates provided in January and April 2004. PROJECT/CONTRACT COST SUMMARY NIA BUDGET IMPACT D This item has been budgeted. (Line item: ) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. [8J Not applicable (information item) ADDITIONAL INFORMATION Highlights of results from 2003-04 plan include: -Launched MyOCSD intranet site February 2004. -Legislative advocacy assisted Technical Services in securing $1 million in federal funding to improve water quality. -Biosolids Advisory Committee formed. -Construction outreach program increased from 2 to 14 projects. Book page 103 To Bd. of Dir. Item Number -Fats, oils, and grease community outreach and education tool box under development. -Research phase of Corporate Identity program initiated. 50th Anniversary celebration activities planned and implemented from January -June 2004. Pipeline newsletter frequency increased to monthly distribution. Highlights planned for 2004-05: Communications Services: -Facilitate Biosolids Advisory Committee meetings and input to board. -Focus community outreach programs on careers in wastewater. -Broaden community outreach for construction outreach programs. -Present research on Phase 1 of Corporate Identity program. -Provide internal and external audiences with clear, relevant and useful information about OCSD. -Support legislative advocacy to secure additional funding for OCSD's secondary treatment. -Continue public outreach programs with OCWD for Groundwater Replenishment System. Administrative Services: -Implement new outsourcing program for reprographics to increase level of service. -Provide timely and complete information to Board of Directors. -Provide policies and procedures to manage OCSD's records and information. -Ensure compliance with California Public Records Act. ALTERNATIVES N/A CEQA FINDINGS N/A ATTACHMENTS Communications and Administrative Services Strategic Plan FY 2004-05 included with this packet. Book page 104 ORANGE COUNTY SANITATION DISTRICT (714)962-2411 Mailing Address: P.O. Box 8127 Fountain Valley, California 92728-8127 Street Address: 10844 Ellis Avenue Fountain Valley, California 92708-7018 OCSD 2/13/03