HomeMy WebLinkAbout2013-05-09 - Board of Directors Meeting Agenda Packet
AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS REGULAR MEETING
Thursday, May 9, 2013, 8:30 AM
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
2. PLEDGE OF ALLEGIANCE
3. ROLL CALL
Gary T. Melton, President
Robert R. Kiley, Vice President
Michael J. Beverage
Ric Collett
Phil Hawkins
4. ADDITIONS/DELETIONS TO THE AGENDA
5. PUBLIC COMMENTS
Any individual wishing to address the Board is requested to identify themselves and state the matter on which
they wish to comment. If the matter is on the agenda, the Board will recognize the individual for their comment
when the item is considered. No action will be taken on matters not listed on the agenda. Comments are limited
to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to five
minutes.
6. SPECIAL RECOGNITION
6.1. Recognition of Employees for Their Service to the District
· Jorge Lopez, Maintenance Distribution Operator II (5 Years)
· Cody Nottingham, Maintenance Distribution Operator II (5 Years)
· Matt Ostiz, Maintenance Worker I (5 Years)
· Cheryl Kielty, Customer Service Representative II (15 Years)
6.2. Recognize Staff for Receipt of Distinguished Budget Presentation Award for FY 2012/13
from the Government Finance Officers Association
7. COMMITTEE REPORTS
7.1. Citizens Advisory Committee
(Beverage)
· Minutes of meeting held April 22, 2013 at 8:30 a.m.
· Meeting scheduled May 20, 2013 at 8:30 a.m.
8. CONSENT CALENDAR
All items listed on the consent calendar are considered to be routine matters, status reports, or documents
covering previous Board instructions. The items listed on the consent calendar may be enacted by one motion.
There will be no discussion on the items unless a member of the Board, staff, or public requests further
consideration.
8.1. Minutes of the Board of Directors Workshop Meeting held April 18, 2013
Recommendation: That the Board of Directors approve the minutes as presented.
8.2. Minutes of the Board of Directors Special Meeting held April 19, 2013
Recommendation: That the Board of Directors approve the minutes as presented.
8.3. Minutes of the Board of Directors Regular Meeting held April 25, 2013
Recommendation: That the Board of Directors approve the minutes as presented.
8.4. Payments of Bills, Refunds, and Wire Transfers
Recommendation: That the Board of Directors ratify and authorize disbursements in
the amount of $605,622.15.
8.5. Progress Payment No. 1 for the Yorba Linda Blvd. Pump Station Project
Recommendation: That the Board of Directors approve Progress Payment No. 1 in
the net amount of $80,197.10 to ECI, Inc. for construction of the Yorba Linda Blvd.
Pump Station Project, Job No. 2008-17B.
8.6. Investment Report for Period Ending March 31, 2013
Recommendation: That the Board of Director's receive and file the Investment
Report for the Period Ending March 2013.
9. ACTION CALENDAR
This portion of the agenda is for items where staff presentations and Board discussions are needed prior to
formal Board action.
9.1. Approval of Change Order No. 1 for the 2012 Waterline Replacement Phase II Project
Recommendation: That the Board of Directors approve Change Order No. 1 in the
amount of $29,764.11 and no additional days to TBU Construction Inc., for
construction of the 2012 Waterline Replacement Phase II Project, Job No. 2011-20.
9.2. Draft 2013 Water Quality Report
Recommendation: That the Board of Directors approve the 2013 Water Quality
Report and authorize staff to make this report available on the District's website
pursuant to the new State and Federal law regarding CCR's electronic delivery.
9.3. Implementation of a Consolidated Storage and Backup Solution
Recommendation: That the Board of Directors authorize the Acting General
Manager to execute a Professional Services Agreement with MR2 Solutions in the
amount of $69,976.87, for the hardware, software and installation costs for a
Consolidated Storage and Backup Solution.
9.4. Award of Contract for Operations and Efficiency Study
Recommendation: That the Board of Directors approve a Professional Services
Agreement with Koff & Associates, Inc., for preparation of an Operations and
Efficiency Study, for a total fee not to exceed $31,900, in accordance with the
attached proposal, dated March 18, 2013, and updated project schedule dated April
23, 2013.
9.5. Adopting a Public Investment Policy
Recommendation: That the Board of Directors adopt Resolution No. 13-06 Setting
Forth a Public Funds Investment Policy and Rescinding Resolution No. 11-24.
10. DISCUSSION ITEMS
This portion of the agenda is for matters that cannot reasonably be expected to be concluded by action of the
Board of Directors at the meeting, such as technical presentations, drafts of proposed policies, or similar items for
which staff is seeking the advice and counsel of the Board of Directors. Time permitting, it is generally in the
District’s interest to discuss these more complex matters at one meeting and consider formal action at another
meeting. This portion of the agenda may also include items for information only.
10.1. Well #18 Engine Overhaul
11. REPORTS, INFORMATION ITEMS, AND COMMENTS
11.1. President's Report
11.2. Directors' Report
· Anaheim Water Sustainability Campus Dedication Ceremony - May 7, 2013 (Kiley)
11.3. Acting General Manager's Report
11.4. General Counsel's Report
11.5. Future Agenda Items and Staff Tasks
12. COMMITTEE REPORTS CONTINUED
12.1. Executive-Administrative-Organizational Committee
(Melton/Kiley)
· Meeting scheduled May 21, 2013 at 4:00 p.m.
12.2. Finance-Accounting Committee
(Hawkins/Melton)
· Minutes of meeting held April 22, 2013 at 12:00 p.m.
· Meeting scheduled May 31, 2013 at 8:30 a.m.
12.3. Personnel-Risk Management Committee
(Collett/Beverage)
· Minutes of meeting held May 8, 2013 at 4:00 p.m. (To be provided at the next regular
Board meeting.)
· Meeting scheduled May 14, 2013 at 4:00 p.m.
12.4. Planning-Engineering-Operations Committee
(Kiley/Hawkins)
· Minutes of meeting held May 6, 2013 at 4:00 p.m. (To be provided at the next regular
Board meeting.)
· Meeting scheduled June 6, 2013 at 3:00 p.m.
12.5. Public Affairs-Communications-Technology Committee
(Beverage/Collett)
· Minutes of meeting held May 7, 2013 at 4:00 p.m. (To be provided at the regular Board
meeting.)
· Meeting scheduled May 22, 2013 at 3:00 p.m.
12.6. YLWD-City of Placentia Joint Agency Committee
(Melton/Hawkins)
· Meeting scheduled June 17, 2013 at 9:30 a.m.
12.7. YLWD-City of Yorba Linda Joint Agency Committee
(Kiley/Beverage)
· Minutes of meeting held April 17, 2013 at 6:00 p.m. (To be provided at the next regular
Board meeting.)
· Meeting scheduled June 19, 2013 at 6:00 p.m.
12.8. YLWD-MWDOC-OCWD Joint Agency Committee
(Beverage/Melton)
· Meeting scheduled May 28, 2013 at 4:00 p.m.
13. INTERGOVERNMENTAL MEETINGS
13.1. MWDOC/MWD Workshop Board - May 1, 2013 (Melton/Staff)
13.2. OCWD Board - May 1, 2013 (Kiley)
13.3. WACO - May 3, 2013 (Hawkins/Kiley)
13.4. YL City Council - May 7, 2013 (Kiley)
14. BOARD OF DIRECTORS ACTIVITY CALENDAR
14.1. Meetings from May 10, 2013 - June 30, 2013
15. CLOSED SESSION
The Board may hold a closed session on items related to personnel, labor relations and/or litigation. The public is
excused during these discussions.
15.1. Conference with Legal Counsel – Pending Litigation
Pursuant to Subdivision (a) of Section 54956.9 of the California Government Code
Name of Case: ACWA/JPIA, et al. vs. Insurance Company of the State of Pennsylvania,
et al. (OC Superior Court - Case No. 00486884)
15.2. Conference with Legal Counsel - Anticipated Litigation
Significant Exposure to Litigation Pursuant to Paragraph (2) of Subdivision (d) of Section
54956.9 of the California Government Code Related to Line Break at 1301 North Rose
Drive, Placentia CA 92870
Number of Potential Cases: One
16. ADJOURNMENT
16.1. The next Regular Board of Directors Meeting will be held Thursday, May 23, 2013 at
8:30 a.m.
Items Distributed to the Board Less Than 72 Hours Prior to the Meeting
Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items
and are distributed to a majority of the Board less than seventy-two (72) hours prior to the meeting will be available for
public inspection in the lobby of the District’s business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870,
during regular business hours. When practical, these public records will also be made available on the District’s internet
website accessible at http://www.ylwd.com/.
Accommodations for the Disabled
Any person may make a request for a disability-related modification or accommodation needed for that person to be
able to participate in the public meeting by telephoning the Executive Secretary at 714-701-3020, or writing to Yorba
Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature of the disability and
the type of accommodation requested. A telephone number or other contact information should be included so the
District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should
make the request with adequate time before the meeting for the District to provide the requested accommodation.
ITEM NO. 7.1
AGENDA REPORT
Meeting Date: May 9, 2013
Subject:Citizens Advisory Committee
(Beverage)
· Minutes of meeting held April 22, 2013 at 8:30 a.m.
· Meeting scheduled May 20, 2013 at 8:30 a.m.
ATTACHMENTS:
Name:Description:Type:
042213_-_CAC_Minutes.docx CAC Mtg Minutes 04/22/13 Backup Material
1
MINUTES OF THE
YORBA LINDA WATER DISTRICT
CITIZENS ADVISORY COMMITTEE MEETING
Monday, April 22, 2013 8:30 a.m.
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
The April 22, 2013 meeting of the Yorba Linda Water District’s Citizens
Advisory Committee was called to order by Chair Daniel Mole at 8:30 a.m.
The meeting was held in the Training Room at the District’s Administration
Building located at 1717 East Miraloma Avenue, Placentia, California 92870.
2. ROLL CALL
COMMITTEE MEMBERS PRESENT
Daniel Mole, Chair Bill Guse
Rick Buck, Vice Chair Fred Hebein
Lindon Baker Joe Holdren
Carl Boznanski Modesto Llanos
Oscar Bugarini, Sr. Cheryl Spencer-Borden
YLWD DIRECTORS PRESENT YLWD STAFF PRESENT
Michael J. Beverage, Director Steve Conklin, Acting General Manager
Damon Micalizzi, Public Information Officer
OTHER VISITORS
Mark Shock
3. PUBLIC COMMENTS
Mr. Mole suggested that the District look into having consultants and contractors
carry identification or credentials that identify them as doing official work for the
District, as residents are being extra vigilant in the wake of recent burglaries in
North Orange County.
Mr. Shock announced that he attended the Joint Agency meeting between the
City of Yorba Linda and the District on April 17th and noted that he was pleased
to see the two entities collaborate for the better of the Community. Some
discussion ensued regarding the items considered and discussed by the Joint
Committee including the Cielo Vista / Esperanza Hills Developments.
Mr. Shock also mentioned that he attended MWDOC’s State Water Project
Inspection Trip and suggested that Committee Members take advantage of future
opportunities to attend.
Mr. Micalizzi informed the Committee that the Southern California Edison will be
sending a representative to the Board meeting on April 25th to provide an update
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on the San Onofre Nuclear Generating Station and potential energy issues for
the upcoming summer months. The Committee was encouraged to attend.
Ms. Borden requested that the Committee be provided monthly updates on
current projects. The Committee will now receive via e-mail the monthly status
report on projects, prepared for the Planning-Engineering-Operations Committee.
4. PRESENTATIONS
4.1. YLWD Public Affairs – 2013 and Beyond
Mr. Micalizzi presented to the Committee a recap of the District’s Public
Affairs accomplishments over the past year. This included a look at some
of the initiatives, as well as a synopsis of the District’s strategic
communications plan for the future, highlighting the importance of the
CAC in assisting the District with disseminating information and educating
the community on issues pertaining to water supply locally and regionally.
The Committee suggested the District remind the public that District Board
Meetings are videotaped and audio-recorded and that copies of these are
available upon request.
5. DISCUSSION ITEMS
5.1. Committee Structure and Bylaws
Mr. Mole opened a discussion about the future of the CAC. After some
discussion, the Committee decided to collaborate via email about several
matters over the next months, including the number of Committee
members, whether or not to impose term limits and mandates for
attendance. The Committee will revisit this item in the coming meetings
and implement any changes when the District moves into the next Fiscal
Year. The Committee once again reviewed their Mission Statement and
post Mr. Micalizzi’s presentation, looked ahead at pending items that will
be coming before the Committee, as well as the CAC’s role in providing
feedback to the Board and assisting with informing the greater
Community.
5.2. Rescheduling of May CAC Meeting
With the next CAC Meeting scheduled to fall on a District holiday, Director
Beverage proposed that the next meeting be moved forward one week, to
May 20th, so that the Committee could receive a presentation on the draft
budget and provide input before it is presented for final approval to the
Board. The Committee unanimously approved this scheduling change.
5.3. Future Agenda Items
Budget for FY 2013/14
OCTA Lakeview Grade Separation Project
Organizational and Efficiency Study Findings
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6. ADJOURNMENT
6.1. The meeting was adjourned at 10:45 a.m. The next Citizens Advisory
Committee meeting is scheduled to be held Monday, May 20, 2013 at 8:30
a.m.
ITEM NO. 8.1
AGENDA REPORT
Meeting Date: May 9, 2013
Subject:Minutes of the Board of Directors Workshop Meeting held April 18, 2013
STAFF RECOMMENDATION:
That the Board of Directors approve the minutes as presented.
ATTACHMENTS:
Name:Description:Type:
041813_BOD_Workshop_-_Minutes.doc BOD Mtg Minutes 04/18/13 Minutes
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
RC/RK 5-0
1
MINUTES OF THE
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS WORKSHOP MEETING
Thursday, April 18, 2013, 8:30 a.m.
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
The April 18, 2013 Yorba Linda Water District Board of Directors Workshop
Meeting was called to order by President Melton at 8:30 a.m. The meeting was
held in the Board/Training Room at the District’s Administration Building located
at 1717 East Miraloma Avenue in Placentia, California 92870.
2. PLEDGE OF ALLEGIANCE
President Melton led the pledge.
3. ROLL CALL
DIRECTORS PRESENT STAFF PRESENT
Gary T. Melton, President Steve Conklin, Acting General Manager
Robert R. Kiley, Vice President John DeCriscio, Acting Operations Manager
Michael J. Beverage Gina Knight, HR and Risk Manager
Ric Collett Stephen Parker, Finance Manager
Phil Hawkins Art Vega, Acting IT Manager
Damon Micalizzi, Public Information Officer
Cindy Botts, Management Analyst
Annie Alexander, Executive Secretary
ALSO PRESENT
Gene Hernandez, Councilmember, City of Yorba Linda
4. PUBLIC COMMENTS
None.
5. DISCUSSION ITEMS
5.1. Budget Workshop Presentation for FYs 2013/14 thru 2016/17
Mr. Conklin opened the presentation, describing the status of the draft
proposed budget at this time, the forecast for the next two fiscal years,
and that borrowing may be needed, along with further rate increases
starting in FY 2015/16. Mr. Parker continued the presentation, describing
budget assumptions and the various elements that make up the budget.
A brief recess was declared at 10:40 a.m.
The meeting was reconvened at 10:50 a.m.
Following an extensive discussion, the Board directed staff to use the
District’s existing $7 million Line of Credit to pay for charges relating to
2
capital improvement projects in progress, and to notify the Board when the
Line of Credit has been drawn down to approximately $4 million. Further,
the Board requested staff to return to the May 23, 2013 regular Board
meeting and further discuss the request to fund and hire a Safety Officer.
At that same meeting, staff will present the draft budget document for FY
2013/14, with the goal of bringing the final budget document to the Board
for approval on June 13, 2013.
6. ADJOURNMENT
6.1. The meeting was adjourned at 11:37 a.m. A Special Board of Directors
Meeting has been scheduled Friday, April 19, 2013 at 2:00 p.m. The next
Board of Directors regular meeting will be held Thursday, April 25, 2013 at
8:30 a.m.
Steve Conklin
Board Secretary
ITEM NO. 8.2
AGENDA REPORT
Meeting Date: May 9, 2013
Subject:Minutes of the Board of Directors Special Meeting held April 19, 2013
STAFF RECOMMENDATION:
That the Board of Directors approve the minutes as presented.
ATTACHMENTS:
Name:Description:Type:
041913_BOD_Special_-_Minutes.doc BOD Mtg Minutes 04/19/13 Minutes
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
RC/RK 5-0
1
MINUTES OF THE
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS SPECIAL MEETING
Friday, April 19, 2013, 2:00 p.m.
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
The April 19, 2013 Special Meeting of the Yorba Linda Water District Board of
Directors was called to order by President Melton at 2:00 p.m. The meeting was
held in the Training Room at the District’s Administration Building located at 1717
East Miraloma Avenue in Placentia, California 92870.
2. PLEDGE OF ALLEGIANCE
President Melton led the pledge.
3. ROLL CALL
DIRECTORS PRESENT STAFF PRESENT
Gary T. Melton, President Steve Conklin, Acting General Manager
Robert R. Kiley, Vice President Art Vega, Acting IT Manager
Michael J. Beverage Annie Alexander, Executive Secretary
Ric Collett
Phil Hawkins
OTHER ATTENDEES
Kurt Sjoberg, Principal, Sjoberg Evashenk Consulting, Inc.
Georg Krammer, Chief Executive Officer, Koff & Associates, Inc.
Katie Kaneko, President, Koff & Associates, Inc.
4. PUBLIC COMMENTS
None.
5. ACTION CALENDAR
5.1. Operations and Efficiency Study Consultant Interviews
Mr. Sjoberg introduced himself and provided the Board with an overview
of his background and work experience. He also spoke about other
members of the project team including his partner, Ms. Marianne
Evashenk, and Ms. Lynda McCallum, the firms Project Manager. Mr.
Sjoberg then explained the firm’s approach to the project. The first phase
would primarily consist of information gathering which would take
approximately 3 weeks to complete and cost 20-25% of the District’s total
budget for the project. The firm would present its results to the Board
along with recommended areas of focus. The Board would then be asked
to provide direction as to which areas or issues the firm should
concentrate on during the second phase of the project. Following
completion of this phase, the resulting product would be a work plan listing
short-, mid- and long-term goals for improvement and increased efficiency
2
within the District. Mr. Sjoberg then responded to questions from the
Board regarding matters that would be examined during the first phase,
the interview process, the number of other projects the firm was currently
working on, and the time and budget estimated to complete the second
phase.
Mr. Sjoberg left the meeting following his presentation.
A recess was declared at 3:20 a.m.
The meeting was reconvened at 3:25 p.m.
Ms. Kaneko and Mr. Krammer joined the meeting and began their
presentation. They took turns introducing themselves and provided an
overview of their individual background and work experience. They also
provided additional background information regarding the other members
of their project team. Ms. Kaneko and Mr. Kramer explained the
firm’s approach to the project including data collection, the interview and
survey process, review and comparison of the District’s organizational
structure, and implementation of the resulting recommendations. They
both then responded to questions from the Board regarding the interview
process, the number of other projects the firm was currently working on,
and the time and budget estimated to complete the project.
Ms. Kaneko and Mr. Krammer left the meeting following their presentation.
The Board and staff then discussed the proposals presented by the two
firms as well as their qualifications, focus, and cost estimates for
completion of the study.
Following this discussion, it was the consensus of the majority of the
Board to select Koff & Associates to perform the study.
Director Collett made a motion, seconded by Director Kiley, determining
that Koff & Associates was the firm most qualified to prepare the Study,
directing staff to meet with the firm to negotiate the final scope and fee for
the Study, and to return to the Board for consideration of award of a
Professional Services Agreement for preparation of the Study. Motion
carried 5-0.
6. ADJOURNMENT
6.1. The meeting was adjourned at 4:35 p.m. The next Regular Board of
Directors Meeting will be held Thursday, April 25, 2013 at 8:30 a.m.
Steve Conklin
Board Secretary
ITEM NO. 8.3
AGENDA REPORT
Meeting Date: May 9, 2013
Subject:Minutes of the Board of Directors Regular Meeting held April 25, 2013
STAFF RECOMMENDATION:
That the Board of Directors approve the minutes as presented.
ATTACHMENTS:
Name:Description:Type:
042513_BOD_-_Minutes.doc BOD Mtg Minutes 04/25/13 Minutes
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
RC/RK 5-0
1
MINUTES OF THE
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS REGULAR MEETING
Thursday, April 25, 2013, 8:30 a.m.
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
The April 25, 2013 Regular Meeting of the Yorba Linda Water District Board of
Directors was called to order by President Melton at 8:30 a.m. The meeting was
held in the Board Room at the District’s Administration Building located at 1717
East Miraloma Avenue in Placentia, California 92870.
2. PLEDGE OF ALLEGIANCE
President Melton led the pledge.
3. ROLL CALL
DIRECTORS PRESENT STAFF PRESENT
Gary T. Melton, President Steve Conklin, Acting General Manager
Robert R. Kiley, Vice President John DeCriscio, Operations Manager
Michael J. Beverage Gina Knight, HR and Risk Manager
Ric Collett Stephen Parker, Finance Manager
Phil Hawkins Art Vega, Acting IT Manager
Damon Micalizzi, Public Information Officer
Annie Alexander, Executive Secretary
ALSO PRESENT
Eddy Beltran, Senior Counsel, Kidman Law LLP
Pat Buttress, Government Affairs Manager, Southern California Edison
Mark Schock
4. ADDITIONS/DELETIONS TO THE AGENDA
None.
5. PUBLIC COMMENTS
There were no public comments made at this time.
Mr. Conklin stated that he wanted to recognize Mr. DeCriscio as the District’s
new Operations Manager. Mr. Conklin explained that Mr. DeCriscio had gone
through the evaluation process and had been the unanimous choice of the
outside review panel. Mr. Conklin stated that Mr. DeCriscio brought 20 years of
experience with him and that he was thrilled that Mr. DeCriscio had chosen to
accept the position. The Board congratulated Mr. DeCriscio on his promotion to
this position. Mr. DeCriscio thanked the Board and Mr. Conklin for giving him this
opportunity and provided a brief summary of his work history with the District.
Mr. DeCriscio then concluded his comments and expressed his enthusiasm for
being selected to serve in this new position.
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6. PRESENTATIONS
6.1. San Onofre Nuclear Generating Station (SONGS) – Provided by Pat
Buttress, Government Affairs Manager, Southern California Edison (SCE)
Ms. Buttress introduced herself and provided an overview of her
background and 29 years of work experience with SCE. She then
provided the Board with a short video and PowerPoint presentation
regarding grid reliability and the role that the San Onofre station plays in
providing electricity throughout Southern California.
Following the video, Director Beverage asked if staff could obtain a copy
of the presentation to be shared with the District’s Citizen Advisory
Committee. Ms. Buttress explained that while she may be unable to
provide the District with a copy due to copyright concerns, she would be
happy to provide the presentation to the Committee at a future meeting.
Ms. Buttress continued her presentation and commented on the benefits
of renewable power as well as the need for alternate power sources like
the San Onofre station to help maintain an electrical base load. She noted
that when this plant was on line, it provided 24% of the power used to
serve SCE’s customers throughout the state. Combined with the Diablo
Canyon plant in San Luis Obispo, these two nuclear facilities can provide
37% of the state’s electricity.
Ms. Buttress then provided additional details related to the recent
voluntary shutdown of Unit 3 at the San Onofre station and the
considerable efforts being made to get the plant back online.
Ms. Buttress concluded her presentation and responded to questions from
the Board regarding the opinions of various legislators on the matter.
The Board expressed their appreciation for Ms. Buttress’ presentation.
7. CONSENT CALENDAR
Director Beverage requested to remove Item No. 7.4. from the Consent
Calendar.
Director Beverage made a motion, seconded by Director Kiley, to approve the
remainder of the Consent Calendar. Motion carried 5-0.
7.1. Minutes of the Board of Directors Regular Meeting held April 11, 2013
Recommendation: That the Board of Directors approve the minutes as
presented.
7.2. Payments of Bills, Refunds and Wire Transfers
Recommendation: That the Board of Directors ratify and authorize
disbursements in the amount of $1,370,136.70.
3
7.3. Progress Payment No. 2 for the 2012 Waterline Replacement Project,
Phase II
Recommendation: That the Board of Directors approve Progress
Payment No. 2 in the net amount of $416,052.50 to TBU, Inc. for
construction of the 2012 Waterline Replacement Project, Phase II, Job No.
2011-20.
ITEMS REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION
7.4. Terms and Conditions for Water and Sewer Service with the City of Yorba
Linda
Director Beverage asked for clarification as to why the construction cost of
540 feet of a 39” steel water main on the property was going to be at the
District’s expense. Mr. Conklin explained that per a pre-annexation
agreement between the District and the property owner (Placentia-Yorba
Linda Unified School District (PYLUSD)), YLWD would be responsible for
the design and construction costs for relocation of the Bryant Cross
Feeder pipeline prior to construction of a park on this land. This
stipulation is not part of the Terms and Conditions being presented to the
Board for consideration. Mr. Conklin further explained that the City of
Yorba Linda was working in conjunction with PYLUSD on this project as
the City plans to maintain the landscape following construction of the park.
Director Collett made a motion, seconded by Director Hawkins, to approve
the Terms and Conditions for Water and Sewer Service with the City of
Yorba Linda, Job No. 201302. Motion carried 5-0.
8. ACTION CALENDAR
8.1. Sole-Source Proposal for Fairmont Booster Station Upgrade Project
(FBSU) SCADA Integration Services
Mr. Conklin explained that a critical part of this project was the SCADA
integration services. Due to time constraints, this matter is being
presented directly to the Board for consideration without prior review by
the Planning-Engineering-Operations (PEO) Committee. Director
Hawkins stated that the PEO Committee members had previously advised
staff to continue to do what they could to move the FBSU project forward
as quickly as possible.
Director Beverage made a motion, seconded by Director Hawkins, to
authorize execution of a Professional Services Agreement with RKI for a
not-to-exceed amount of $35,000 to provide SCADA Integration Services
for the FBSU Project, in accordance with RKI’s proposal of April 15, 2013.
Motion carried 5-0.
9. REPORTS, INFORMATION ITEMS, AND COMMENTS
9.1. President’s Report
President Melton did not have any comments at this time.
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9.2. Directors’ Report
MWD/MWDOC State Water Project Inspection Trip – April 12-13,
2013 (Collett)
Director Collett reported on his attendance at this event and noted
that it had been a very enlightening tour, especially in relation to the
issues with the Delta. He also commended MWD on the
maintenance of their facilities.
9.3. Acting General Manager’s Report
Mr. Conklin stated that he had also had the opportunity to attend the
MWD/MWDOC inspection trip last year. He then reported on the topics
discussed during the initial Joint Agency Committee meeting with the City
of Yorba Linda. The next Committee meeting has been scheduled for
June 19, 2013 at 6:00 p.m.
Mr. Conklin then reported on the status of negotiations with the firm
selected to perform the District’s Operations and Efficiency Study. Staff
plans to present a Professional Services Agreement with Koff &
Associates (K&A) for consideration by the Board at the meeting on May 9,
2013. Staff has also requested a revised project schedule from K&A
based on that start date.
Mr. Conklin stated that the District would be participating in a business
expo at Costco scheduled May 4, 2013. Staff will be providing an
information booth and water station for the event. Mr. Micallizzi noted that
even though the event is a fundraiser for the Children’s Miracle Network,
the District was not charged an entrance fee as it is a public agency and
would be providing bottled water for the event.
Mr. Conklin further reported that Mr. Jim Wiezel, lead counsel for
ACWA/JPIA, would be here April 26 to tour the District’s facilities in the
Hidden Hills area. Mr. DeCriscio will lead the tour and will be
accompanied by Mr. Andrew Gagen from Kidman Law LLP.
Mr. Conklin concluded his report and asked Mr. DeCriscio to provide the
Board with a status update of the repair work at the Placentia-Yorba Linda
Hospital. Mr. DeCriscio explained that while putting in the service lines,
staff had to hire a professional plumber to run some additional plumbing.
During this process, a State inspector stopped by and requested that the
District perform additional or “super-chlorination.” Staff expects to be able
to bring the service back online on Friday following receipt and evaluation
of the test results. Mr. Conklin then responded to questions from the
Board regarding the working relationship between District and hospital
staff.
9.4. General Counsel’s Report
Mr. Beltran stated that he did not have anything to report and that the
Closed Session would not be needed.
5
9.5. Future Agenda Items and Staff Tasks
Director Kiley requested that a discussion regarding the District’s gift
policy be added to the agenda for the next Executive-Administrative-
Organizational Committee meeting.
10. COMMITTEE REPORTS
10.1. Executive-Administrative-Organizational Committee
(Melton/Kiley)
Minutes of the meeting held April 16, 2013 at 4:00 p.m. were
provided in the agenda packet.
Next meeting is scheduled to be held May 21, 2013 at 4:00 p.m.
10.2. Finance-Accounting Committee
(Hawkins/Melton)
Minutes of the meeting held April 22, 2013 at 12:00 p.m. will be
provided at the next regular Board meeting.
Date and time of meeting in May yet determined. (The next
meeting was subsequently scheduled for May 31, 2013 at 8:30
a.m.)
10.3. Personnel-Risk Management Committee
(Collett/Beverage)
Minutes of the meeting held April 9, 2013 at 4:00 p.m. were
provided in the agenda packet.
Next meeting is scheduled to be held May 8, 2013 at 4:00 p.m.
10.4. Planning-Engineering-Operations Committee
(Kiley/Hawkins)
Minutes of the meeting held April 8, 2013 at 3:00 p.m. were
provided in the agenda packet.
Next meeting is scheduled to be held May 2, 2013 at 3:00 p.m.
(This meeting was subsequently rescheduled to May 6, 2013 at
4:00 p.m.)
10.5. Public Affairs-Communications-Technology Committee
(Beverage/Collett)
Next meeting is scheduled to be held May 7, 2013 at 4:00 p.m.
6
10.6. YLWD-City of Placentia Joint Agency Committee
(Melton/Hawkins)
Date and time of meeting in May yet to be determined.
10.7. YLWD-City of Yorba Linda Joint Agency Committee
(Kiley/Beverage)
Minutes of the meeting held April 17, 2013 at 6:00 p.m. will be
provided at the next regular Board meeting.
Directors Beverage and Kiley provided a brief summary of the
matters discussed during the meeting.
Date and time of next meeting yet to be determined. (The next
meeting was subsequently scheduled for June 19, 2013 at 6:00
p.m.)
10.8. YLWD-MWDOC-OCWD Joint Agency Committee
(Beverage/Melton)
Next meeting is scheduled to be held May 28, 2013 at 4:00 p.m.
10.9. Citizens Advisory Committee
(Beverage)
Minutes of the meeting held April 22, 2013 at 8:30 a.m. will be
provided at the next regular Board meeting.
Date and time of meeting in May yet to be determined. (The next
meeting was subsequently scheduled for May 20, 2013 at 8:30
a.m.)
11. INTERGOVERNMENTAL MEETINGS
11.1. YL City Council – April 16, 2013 (Collett)
Director Collett attended and remarked on two presentations related to
wildfires provided during the meeting. The first was provided by the
Orange County Fire Authority regarding Wildfire Awareness Week and the
second was provided by an organization called Hills for Everyone
regarding the history of fires in the wildfire interface zone. Director Collett
further commented on a status update of the Cielo Vista/Esperanza Hills
Project, the Landscape Maintenance Assessment District (LMAD), and
City landscape easements in the Bryant Ranch area which were also
discussed during the meeting.
Director Kiley noted that at the Joint Agency Committee meeting with the
City of Yorba Linda, Director Beverage had made the suggestion that a
staff member be assigned as a District liaison to work with the LMAD
Committee.
7
11.2. MWDOC Board – April 17, 2013 (Melton/Staff)
Director Melton attended but did not have any District related business to
report.
11.3. OCWD Board – April 17, 2013 (Staff)
Mr. Conklin reported that staff had attended the meeting. During the
meeting, the OCWD Board voted to set the Replenishment Assessment at
$276 per acre foot and the Basin Production Percentage (BPP) at 70%.
Mr. Conklin noted that if the BPP is raised to 75% as projected, it may
help soften some of the opposition to the Environmental Impact Report for
the District’s request for annexation.
11.4. YL Planning Commission – April 24, 2013 (Hawkins)
Director Hawkins attended and commented on a presentation regarding
future projects, including the construction of a gas station at Costco, which
was provided during the meeting.
12. BOARD OF DIRECTORS ACTIVITY CALENDAR
12.1. Meetings from April 26, 2013 – May 31, 2013
The Board reviewed the activity calendar and made no changes.
13. CONFERENCES, SEMINARS, AND SPECIAL EVENTS
13.1. Anaheim Public Utilities Water Sustainability Campus Dedication
Ceremony – May 7, 2013
Director Kiley expressed an interest in attending this event.
Director Hawkins made a motion, seconded by Director Collett, to
authorize Director attendance at this event if desired. Motion carried 5-0.
(No Closed Session was held.)
14. CLOSED SESSION
14.1. Conference with Legal Counsel – Pending Litigation
Pursuant to Subdivision (a) of Section 54956.9 of the California
Government Code
Name of Case: ACWA/JPIA, et al vs. Insurance Company of the
State of Pennsylvania, et al (OCSC – Case No.
00486884)
14.2. Conference with Legal Counsel – Anticipated Litigation
Significant Exposure to Litigation Pursuant to Paragraph (2) of Subdivision
(d) of Section 54956.9 of the California Government Code Related to Line
Break at 1301 North Rose Drive, Placentia CA 92870
Number of Potential Cases: One
8
15. ADJOURNMENT
15.1. The meeting was adjourned at 9:47 a.m. The next Regular Board of
Directors Meeting will be held Thursday, May 9, 2013 at 8:30 a.m.
Steve Conklin
Board Secretary
ITEM NO. 8.4
AGENDA REPORT
Meeting Date: May 9, 2013 Budgeted:Yes
To:Board of Directors Cost Estimate:$605,622.15
Funding Source:All Funds
From:Steve Conklin, Acting General
Manager
Presented By:Stephen Parker, Finance
Manager
Dept:Finance
Prepared By:Maria Trujillo, Accounting
Assistant I
Subject:Payments of Bills, Refunds, and Wire Transfers
SUMMARY:
Section 31302 of the California Water Code says the District shall pay demands made against it
when they have been approved by the Board of Directors. Pursuant to law, staff is hereby
submitting the list of disbursements for Board of Directors' approval.
STAFF RECOMMENDATION:
That the Board of Directors ratify and authorize disbursements in the amount of $605,622.15.
DISCUSSION:
The wire and major items on this disbursement list are as follows: A wire of $93,777.07 to
ACWA/JPIA for May 2013 health premium; a check of $80,197.10 to Environmental Construction
Inc for Yorba Linda Blvd Booster Station progress payment; and, a check of $48,073.48 to Southern
California Edison for April services rendered on various sites. The balance of $154,787.54 is routine
invoices.
The Accounts Payable check register total is $376,835.19; Payroll No. 9 total is $228,786.96; and,
the disbursements of this agenda report are $605,622.15. A summary of the checks is attached.
STRATEGIC PLAN:
FR 1-F: Continue to Record and Report the Fairly Stated Financial Activities of the District in a
Timely and Transparent Manner to the Board of Directors and Member Agencies
PRIOR RELEVANT BOARD ACTION(S):
The Board of Directors approves bills, refunds and wire transfers semi-monthly.
ATTACHMENTS:
Name:Description:Type:
CkReg50913_BOD.pdf Check Register Backup Material
13-CS_509.doc Cap Sheet Backup Material
13_CC_509.xls Credit Card Summary Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
RC/RK 5-0
RC abstained from voting on the payment
made to Placentia Disposal as listed on the
Credit Card Summary as he has a financial
interest with the vendor.
.
May 9, 2013
CHECK NUMBERS:
Void Check 61100 $ (440.93)
Computer Checks 61185—61254 $ 283,499.05
$ 283,058.12
WIRES:
W-42613 ACWA/JPIA $ 93,777.07
TOTAL OF CHECKS AND WIRES $ 376,835.19
PAYROLL NO. 9:
Direct Deposits $ 144,481.74
Third Party Checks 5563—5573 $ 44,803.14
Payroll Taxes $ 39,502.08
TOTAL OF PAYROLL $ 228,786.96
----------------------------------------------------------------------------------------------------------------------
DISBURSEMENT TOTAL: $ 605,622.15
==================================================================
APPROVED BY THE BOARD OF DIRECTORS MINUTE ORDER AT BOARD
MEETING OF MAY 9, 2013
==================================================================.
Date Vendor Name Amount Description
04/16/13 Online Information Svcs 398.63 ONLINE Utility Exchange
04/16/13 Staples 1,220.38 Surface Pro Tablet
04/16/13 Home Depot 48.28 Rock Chips
04/17/13 AWWA 28.00 Dues Maldonado
04/17/13 Stefano's 42.16 Lunch/OPS Mgr Interview panel
04/18/13 PayPal 39.00 Webinar/Affordable Care HR-Hansen
04/18/13 Light Bulbs Etc 83.92 Light bulbs
04/18/13 Home Depot 48.28 Rock Chips
04/22/13 OCWD 1,500.00 OC Wtr Summ/Directors,Admin,CAC
04/22/13 Orange County Hose Co 2,076.60 Fire Hose etc
04/22/13 Westside Bldg Material 259.54 Chip brush etc
04/22/13 Harrington Industrial 1,066.17 CL2 parts
04/23/13 Cleverbridge Inc 99.95 Spector Pro software/Monitor PC
04/23/13 C.Wells Pipeline 1,890.66 Cla-Valve parts
04/23/13 Wells Supply 10.80 Gasket
04/24/13 Los Angeles Times 176.80 Delivery through 4/14
04/24/13 Costco Online 337.34 Coffee etc/District
04/24/13 Mail Finance 313.93 Postage meter lease May-Aug
04/24/13 Inland Group 3,911.31 Spring Newsletter
04/24/13 Placentia Disposal 480.66 Disposal March
04/24/13 Wells Supply 12,452.74 WHS stock
Cal Card Credit Card
U S Bank
04/16/2013-04/29/13
04/24/13 Wells Supply 12,452.74 WHS stock
04/29/13 Graybar 1,432.57 SCADA component
04/29/13 C.Wells Pipeline 277.56 Gasket
04/29/13 C.Wells Pipeline 49.14 Hydrant part
TOTAL 28,244.42
ITEM NO. 8.5
AGENDA REPORT
Meeting Date: May 9, 2013 Budgeted:Yes
Total Budget:$2.6M
To:Board of Directors Cost Estimate:$2.3M
Funding Source:All Water Funds
From:Steve Conklin, Acting General
Manager
Account No:101-2700
Job No:200817B
Presented By:Steve Conklin, Acting General
Manager
Dept:Engineering
Reviewed by Legal:No
Prepared By:Joe Polimino, Project Engineer CEQA Compliance:MND
Subject:Progress Payment No. 1 for the Yorba Linda Blvd. Pump Station Project
SUMMARY:
Work has begun on the construction of the Yorba Linda Blvd. Pump Station Project. The project
consists of three electric motor driven vertical turbine pumps, flow control valves, a motor control
center, various yard piping and a new masonry block building.
STAFF RECOMMENDATION:
That the Board of Directors approve Progress Payment No. 1 in the net amount of $80,197.10 to
ECI, Inc. for construction of the Yorba Linda Blvd. Pump Station Project, Job No. 2008-17B.
DISCUSSION:
In accordance with the contract documents, ECI Inc. submitted a request for Progress Payment No.
1, in the amount of $84,418.00 for completed work through April 30, 2013. During this period, the
contractor mobilized equipment on site, surveyed in various control points and began excavation of
the building footing and transformer pad. They also began excavation for the pump cans and meter
vault. The status of the construction contract with ECI Inc. is as follows:
The current contract is $1,581,179.00 and 365 calendar days starting April 1, 2013.
If approved, Progress Payment No. 1 is $84,418.00 (5.3% of the total contract amount), less
5% retention of $4,220.90 for a net payment of $80,197.10.
If approved, total payments to date including retention will be $84,418.00 (5.3% of the total
contract amount).
As of April 30, 2013, 30 calendar days were used (8.2% of the contract time).
Staff reviewed the contractor's progress payment and recommend approval. A copy of Progress
Payment No. 1 is attached for your reference.
PRIOR RELEVANT BOARD ACTION(S):
On December 20, 2012, the Board of Directors authorized the President and Secretary to execute a
construction agreement between Environmental Construction, Inc. (ECI), and the Yorba Linda
Water District for the Construction of the Yorba Linda Blvd Pump Station Project in the amount of
$1,581,179.00.
ATTACHMENTS:
Name:Description:Type:
ECI_YL_Blvd._PS_Progress_Pay_Request_1.pdf ECI Progress Pay Request No 1 YL Blvd PS Project Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
RC/RK 5-0
ITEM NO. 8.6
AGENDA REPORT
Meeting Date: May 9, 2013
To:Board of Directors
From:Steve Conklin, Acting General
Manager
Presented By:Stephen Parker, Finance
Manager
Dept:Finance
Prepared By:Delia Lugo, Senior Accountant
Subject:Investment Report for Period Ending March 31, 2013
SUMMARY:
Government Code Section 53607, et, seq., requires the person delegated to invest funds to make a
quarterly report of the investments to the legislative body.
STAFF RECOMMENDATION:
That the Board of Director's receive and file the Investment Report for the Period Ending March
2013.
DISCUSSION:
Staff is submitting the Investment Report for the Period Ending March 2013 for your review and
approval. This report ends the third quarter for FY 2012/13. The Investment Portfolio Report
presents the market value and percent yield for all the District investments by institution. The
Investment Report Summary includes budget and actual interest and average term portfolio
information as well as market value broken out by reserve categories. The total average portfolio
yield for the month of March 2013 was 0.66%.
PRIOR RELEVANT BOARD ACTION(S):
Investment reports are presented to the Board of Directors on a quarterly basis. The Investment
Report for the Period Ending December 31, 2012, was received and filed by the Board of Directors
on February 14, 2013.
ATTACHMENTS:
Name:Description:Type:
Invst_Rpt_3-13.xlsx Investment Report for Period Ending March 2013 Backup Material
Invst_Agenda_Backup_-Mar_2013.xlsx Investment Agenda Backup - March 2013 Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
RC/RK 5-0
Market %Percent
Value Cost of Total Institution Yield
Checking Account:
117,495$ 117,495$ Wells Fargo Bank
117,495$ 117,495$ 0.70%Total0.00%
Money Market Accounts:
54,950$ 54,950$ Wells Fargo Money Market0.05%
1,539,760 1,539,760 Bank of the West0.35%
1,594,710$ 1,594,710$ 9.45%Total0.34%
Federal Home Loan Bank:
2,146,2522,147,096$ US Bank (2008 Bond Reserve)1.35%
2,146,252$ 2,147,096$ 12.71%1.35%
Pooled Investment Accounts:
2,034,493$ 2,034,493$ Local Agency Investment Fund0.29%
740,874 740,874 CalTRUST Short Term0.30%
10,250,100 10,224,874 CalTRUST Medium Term0.67%
13,025,466$ 13,000,240$ 77.15%0.59%
Yorba Linda Water District
Investment Portfolio Report
March 31, 2013
13,025,466$ 13,000,240$ 77.15%0.59%
16,883,923$ 16,859,542$ 100%Total Investments 0.66%
Per Government Code requirements, the Investment Report is in compliance with the Yorba
Linda Water District's Investment Policy, and there are adequate funds available to meet
budgeted and actual expenditures for the next six months.
3/31/13
________________________________
Delia Lugo, Senior Accountant
Below is a chart summarizing the yields as well as terms and maturities for the month of March 2013:
Avg. PortfolioAvg. Portfolio# of
Month Yield WithoutYield WithDays to
of 2013 CalTRUST CalTRUST Maturity
March0.61%0.66%72
Below is are charts comparing operating fund interest for current and prior fiscal years.
Actual Interest 3/31/20123/31/2013
Monthly - March 29,417$ 8,058$
Year-to-Date 189,289$ 85,729$
Budget 2011/20122012/2013
Interest Budget, March YTD 142,500$ 112,500$
Interest Budget, Annual 190,000$ 150,000$
Interest earned on investments is recorded in the fund that owns the investment.
The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds
is as follows:
February 2013% AllocMarch 2013% Alloc
Fund DescriptionBalance2/28/2013Balance3/31/2013
Water Operating Reserve2,425,961$ 14.14%2,913,971$ 17.38%
Water Emergency Reserve1,006,8045.87%1,007,5096.01%
Water Capital Project Reserve 7,923,881 46.19%7,759,937 46.28%
Investment Summary Report
Investment Summary Comparison Between Current and Previous Month
Water Capital Project Reserve 7,923,881 46.19%7,759,937 46.28%
Water Reserve for Debt Service1,329,8817.75%619,3023.69%
Maintenance Reserve187,0291.09%200,5291.20%
COP Revenue Bond 2008 - Reserve2,164,39812.62%2,146,25212.80%
Sewer Operating16,2310.09%16,2420.10%
Sewer Emergency Reserve1,005,7975.86%1,006,5026.00%
Sewer Capital Project Reserve1,095,4336.39%1,096,1846.54%
17,155,415$ 100.00%16,766,428$ 100.00%
Water Operating186,157 (60,565)
Sewer Operating154,692 178,060
340,849 117,495
Totals 17,496,264$ 16,883,923$
Wells Fargo Bank Checking
ITEM NO. 9.1
AGENDA REPORT
Meeting Date: May 9, 2013 Budgeted:Yes
Total Budget:$1.12 M
To:Board of Directors Cost Estimate:$1.5 M
Funding Source:Water Capital
Reserves
From:Steve Conklin, Acting General
Manager
Account No:101-2700
Job No:2011-20
Presented By:Steve Conklin, Acting General
Manager
Dept:Engineering
Reviewed by Legal:No
Prepared By:Joe Polimino, Project Engineer CEQA Compliance:Exempt
Subject:Approval of Change Order No. 1 for the 2012 Waterline Replacement Phase II
Project
SUMMARY:
Work is proceeding on construction of the 2012 Waterline Replacement Phase II Project. Submitted
for consideration is construction Change Order No. 1.
STAFF RECOMMENDATION:
That the Board of Directors approve Change Order No. 1 in the amount of $29,764.11 and no
additional days to TBU Construction Inc., for construction of the 2012 Waterline Replacement
Phase II Project, Job No. 2011-20.
COMMITTEE RECOMMENDATION:
The Planning-Engineering-Operations Committee will discuss this matter at its meeting scheduled
May 6, 2013 and will provide its recommendation at the Board meeting.
DISCUSSION:
In accordance with the contract documents, TBU Construction, Inc. has submitted Change Order
No. 1 due to changed additions and modifications, as well as District-initiated changes requested
during the course of construction to date. A copy of Change Order No. 1 is attached for your review
and details are provided below for items resulting in a substantial cost change to the contract.
Item 1: While excavating the trench for the new waterline, at the location of Tamarisk Dr./ Fircrest
Dr., the contractor encountered unforeseen wet soil conditions. The existing material proved to be
too wet to use for backfill material, therefore, Class II material had to be purchased and imported for
suitable pipeline backfill. The cost of this item is $10,923.47 and no additional days.
Item 4: While reviewing the approved plans for the Cresthill PRV, the Operations Department
requested the following changes be made to the design, for an additional $15,983.60 and no
additional days: Requested upsized piping from 2” Copper to 4” Ductile Iron Pipe (DIP) to match
existing piping arrangement and to maximize flow. Changed pipe material from Copper to DIP
because of soil conditions in the area. Changed all 2” gate valves to 4” Gate valves to match
upsized piping. Added a 4” Pressure Relief Valve at the downstream side of the PRS to replace and
relocate an existing 4” Pressure Relief Valve, to protect 17 residences not protected before from
high pressure that could damage existing house plumbing. Added vault vents, for ventilation to help
prevent moisture buildup inside vault to protect piping from corrosion and added two pressure
gauges for pressure readings of the upstream and downstream sides of the pressure reducing
valve.
The status of the construction contract with TBU Construction Inc. is as follows:
The current contract is $1,359,300.11 and 370 calendar days starting February 1, 2013.
If approved, Change Order No. 1 adds $29,764.11 (2.2% of the current contract amount) and
0 calendar days.
If approved, the revised construction contract amount is $1,389,064.22 and 370 calendar
days.
Staff and RBF Engineers, the District's design engineer, reviewed the change order request items
and recommend approval.
STRATEGIC PLAN:
SR 3-A: Complete Implementation of Five Year Capital Improvement Plan from FY 2011-2015 with
adopted amendments
PRIOR RELEVANT BOARD ACTION(S):
The Board authorized the President and Secretary to execute a construction agreement in the
amount of $1,359,300.11 for the 2012 Waterline Replacement Project, Phase II with TBU Inc., on
November 21, 2012. The Board has approved two progress payments to date for this project, the
last of which was approved on April 25, 2013.
ATTACHMENTS:
Name:Description:Type:
Signed_CO_1_Cover_Sheet.pdf Change Order 1 TBU Construction, Phase II Project Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
RK/RC 5-0
ITEM NO. 9.2
AGENDA REPORT
Meeting Date: May 9, 2013 Budgeted:Yes
Total Budget:$900
To:Board of Directors Cost Estimate:$900
Funding Source:All Water Funds
From:Steve Conklin, Acting General
Manager
Presented By:Steve Conklin, Acting General
Manager
Dept:Engineering
Reviewed by Legal:N/A
Prepared By:Derek Nguyen, Water Quality
Engineer
CEQA Compliance:N/A
Subject:Draft 2013 Water Quality Report
SUMMARY:
Since 1990, California public water utilities have been required to provide annual water quality
reports to their customers. This report is also known as the Consumer Confidence Report (CCR)
which covers water quality testing and analysis from January to December of the previous calendar
year. State and Federal laws require that this annual water quality report be provided to every
customer by July 1 to ensure that customers are informed of the quality of their drinking water.
STAFF RECOMMENDATION:
That the Board of Directors approve the 2013 Water Quality Report and authorize staff to make this
report available on the District's website pursuant to the new State and Federal law regarding
CCR's electronic delivery.
COMMITTEE RECOMMENDATION:
The Public-Affairs-Communications-Technology-Committee considered this item at its May 7, 2013
meeting and will provide its recommendation to the Board.
DISCUSSION:
State and Federal laws require that the District prepare an annual water quality report and make it
available to its customers by July 1 of each year. This annual water quality report covers water
quality monitoring, testing and analysis conducted from January to December of the previous
calendar year. The purpose of this report is to inform customers of the quality of the water they are
receiving. in March 2013, State and Federal laws allow electronic delivery of the annual water
quality report. As a result, the District will save cost in printing and distribution and will make the
report available via District's website. Hard copies of the report are still available upon request.
In 2012, the District conducted over 23,000 analyses to ensure that its water met all State and
Federal drinking water regulations. In some cases, the District goes beyond what is required by
State and Federal laws, by providing additional monitoring for contaminants of concern. Staff is
pleased to report that the District has never violated any drinking water regulation from both the
State and Federal standards. Attached is a draft copy of the District's 2013 Water Quality Report.
PRIOR RELEVANT BOARD ACTION(S):
In May 2012, the Board of Directors approved and authorized distribution of the District's 2012
Water Quality Report to its customers.
ATTACHMENTS:
Name:Description:Type:
330685_WaterQualityReport_R1.pdf Backup Material Backup Material
000000_WaterQualityReport_Inside.pdf Backup Material Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
MB/PH 5-0
2013 WATER QUALITY REPORT
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What are Water Quality Standards?
Drinking water standards established by the U.S. EPA and CDPH set limits for
substances that may affect consumer health or aesthetic qualities of drinking
water. The chart in this report shows the following types of water quality standards.
• Maximum Contaminant Level (MCL): The highest level of a contaminant
that is allowed in drinking water. Primary MCLs are set as close to the PHGs
(or MCLGs) as is economically and technologically feasible.
• Maximum Residual Disinfectant Level (MRDL): The level of a disinfectant
added for water treatment that may not be exceeded at the consumer’s tap.
• Secondary MCLs are set to protect the odor, taste, and appearance of
drinking water.
• Primary Drinking Water Standard: MCLs for contaminants that affect
health along with their monitoring and reporting requirements and water
treatment requirements.
• Regulatory Action Level (AL): The concentration of a contaminant, which,
if exceeded, triggers treatment or other requirements that a water system
must follow.
How are Contaminants Measured?
The District samples and tests it water sources throughout the year. Contaminants
are measured in:
• Parts per million (ppm) or milligrams per liter (mg/l)
• Parts per billion (ppb) or micrograms per liter (µg/l)
• Parts per trillion (ppt) or nanograms per liter (ng/l)
Parts per million: Parts per billion: Parts per trillion:
1 second in 12 days 1 second in 32 years 10 drops in a Rose Bowl-sized pool
1 penny in $10,000 1 penny in $10 million 1-second in 32,000 years
1 inch in 16 miles 1 inch in 16,000 miles 1 inch in 16 million miles
What is a Water Quality Goal?
In addition to mandatory water quality standards, U.S. EPA and CDPH have set
voluntary water quality goals for some contaminants. Water quality goals are
often set at such low levels that they are not achievable in practice and are not
directly measurable. Nevertheless, these goals provide useful guidance and
directions for water management practices. The chart in this report includes three
types of water quality goals:
• Maximum Contaminant Level Goal (MCLG): The level of a contaminant in
drinking water below which there is no known or expected risk to health.
MCLGs are set by U.S. EPA.
• Maximum Residual Disinfectant Level Goal (MRDLG): The level of a
disinfectant added for water treatment below which there is no known or
expected risk to health. MRDLGs are set by U.S. EPA.
• Public Health Goals (PHG): The level of a contaminant in drinking water
below which there is no known or expected risk to health. PHGs are set by
the California Environmental Protection Agency – Office of Environmental
Health Hazard Assessment.
Imported Water Assessment
In December 2002, Metropolitan Water District of Southern California (MWD)
completed a source water assessment of its Colorado River and State Water
Project supplies. Colorado River supplies are considered to be most vulnerable to
contamination by recreational uses, urban/storm water runoff, industrial runoff,
increasing urbanization in the watershed and wastewater contamination. State
Water Project supplies are considered to be most vulnerable to urban/storm
water runoff, and wildlife, agriculture, recreation and wastewater contamination.
A copy of the assessment can be obtained by contacting MWD by phone at
213.217.6850
Groundwater Assessment
The District completed an assessment of its Wells No. 1,
5, 7, 10, and 12 in January 1999. The wells are considered
most vulnerable to contaminants produced by the following
activities: gas stations; dry cleaners; metal plating/finishing/
fabricating plants; plastic/synthetic producers; underground
injection of commercial/industrial discharges; underground
storage tanks; agricultural drainage; fertilization, pesticide and
herbicide application; automobile-body and repair shops; and
chemical/petroleum processing/storage.
YOUR 2013 WATER QUALITY REPORT
Since 1990, California public water utilities have been providing annual Water
Quality Reports to their customers. This year’s report also known as the “Consumer
Confidence Report,” covers water quality testing from January to December 2012.
The Yorba Linda Water District’s annual Water
Quality Report is prepared in compliance
with the regulations called for in the 1996
reauthorization of the Safe Drinking Water
Act (SDWA). The reauthorization charged the
United States Environmental Protection Agency
(USEPA) with updating and strengthening the
tap water regulatory program.
USEPA and the California Department of Public
Health (CDPH) are the agencies responsible for
establishing water quality standards. To ensure that your tap water is safe to drink,
USEPA and CDPH prescribe regulations that limit the amount of certain contaminants
in water provided by water systems.
The State and Federal governments require that this annual water quality report be
provided to every customer to insure that you are informed of the quality of your
water. The District is committed to safeguarding its water supply and, as in years
past, the water delivered to your home meets the standards required by the state
and federal regulatory agencies.
In 2012, we conducted over 23,000 analyses to
ensure that your water is clean and safe to drink.
We are proud to report that our water system
has never violated any water quality standard
from both the State and Federal drinking water
regulations. In some cases, the District goes
beyond what is required by providing additional
monitoring for contaminants that may have
health risks.
We encourage you to read this report and to
contact us with any questions you may have.
Contaminants That May Be Present In Source Water:
• Microbial contaminants, such as viruses and bacteria, which may come from
sewage treatment plants, septic systems, agricultural livestock operations, and
wildlife. Cryptosporidium is a microscopic organism that when ingested can
cause diarrhea, fever, and other gastrointestinal maladies. The organism comes
from animal and/or human waste and may be found in surface (imported)
water. A standard treatment process that includes sedimentation, filtration, and
disinfection can eliminate cryptosporidium contamination.
• Pesticides and herbicides that may come from a variety of sources such as
agriculture, urban storm water runoff and residential uses.
• Inorganic contaminants, such as salts and metals that can be naturally occurring
or result from urban storm water runoff, industrial or domestic wastewater
discharges, oil and gas production, mining or farming.
• Organic chemical contaminants, including synthetic and volatile organic
chemicals that are by-products of industrial processes and petroleum production,
and can also come from gas stations, urban storm water runoff, agricultural
application and septic systems.
• Radioactive contaminants that can be naturally occurring or be the result of
oil and gas production and mining activities.
To learn more about the potential health effects of
contaminants listed in this report, call the EPA’s Safe Drinking
Water Hotline at 1-800-426-4791 or by accessing the EPA’s
internet web site at www.epa.gov/safewater
WHAT YOU NEED TO KNOW ABOUT YOUR
WATER, AND HOW IT MAY AFFECT YOU
Water System Information
Yorba Linda Water District is an independent special
district that provides water and sewer service to most
of the City of Yorba Linda and to portions of Anaheim,
Brea, Placentia and unincorporated Orange County. For
more information about the District or your water service,
please call Water Quality Engineer Derek Nguyen at 714.
701.3115.
The Yorba Linda Water District Board of Directors’
regularly scheduled meetings are held on the second
and fourth Thursday of each month at 8:30 a.m. in the
District boardroom located at 1717 E. Miraloma Avenue,
Placentia, California 92870
Sources of Supply
The District’s water supply is a blend of groundwater from our own wells and water
imported from Northern California and the Colorado River by the Metropolitan
Water District of Southern California (MWD). The source water for our wells is a
natural aquifer that is replenished with water from the Santa Ana River, local
rainfall and imported water. Managed by the Orange County Water District, the
groundwater basin is approximately 350 square miles in area and lies beneath most
Radon Advisory
Radon is a radioactive gas that you cannot see, taste, or smell. It is found throughout
the world. Radon can move through the ground and into homes through cracks and
holes in the foundation. Radon can build up to high levels in all types of homes.
Radon can also get into indoor air when released from tap water from showering,
washing dishes, and other household activities. Compared to radon entering the
homes through soil, radon entering the home through tap water will, in most cases,
be a minor source of radon in indoor air. Radon is a known human carcinogen.
Breathing air containing radon can lead to lung cancer. Drinking water containing
radon may also cause increased risk of stomach cancer.
If you are concerned about radon, test the air in your home. Testing is inexpensive
and easy. You may want to consider modification to your home if the level of radon
in your air is 4 picoCuries per liter of air (pCi/L) or higher. There are simple ways to
fix a radon problem that are not too costly. For additional information, you can call
the EPA’s Radon Hotline (800-SOS-Radon).
The EPA proposed MCL for radon is 300 pCi/L. The proposal will provide flexibility
to the states on how to limit exposure to radon by allowing states to focus efforts
on the greatest radon risks-those in indoor air-while also reducing the risks from
radon in drinking water. The states’ option for radon compliance is as follows:
First Option: States can choose to develop enhanced state programs to address
the health risks from radon in indoor air. These programs are known as Multimedia
Mitigation (MMM) Programs. Individual water systems reduce radon levels in
drinking water to 4,000 pCi/L or lower. EPA is encouraging states to adopt this
option because it is the most cost effective way to achieve the greatest radon risk
reduction.
Second Option: If a state chooses not to develop an MMM program, individual
water systems in that state would be required to either reduce radon in their
system’s drinking water to 300 pCi/L or develop individual local MMM programs
and reduce levels in drinking water to 4,000 pCi/L.
Fluoride
The District does not add fluoride to its groundwater supplies. Naturally occurring
fluoride is present in the aquifer, but not at a level that provides dental health
benefits.
In 1995, the California Legislature passed a bill mandating that all large water
agencies fluoridate their supplies, but only if the state or “somebody” provided the
agencies with the funds to do so. To date, the state has not come up with the funds
to implement fluoridation.
MWD commenced fluoridation of the drinking water it supplies to Southern
California in November of 2007. The District purchases approximately half of its
water from MWD. Because of MWD’s decision and the District’s dual sources of
water (groundwater and import), YLWD is faced with a situation where some of its
customers will receive water fluoridated by MWD, some will receive non-fluoridated
water, and some will receive a blend of fluoridated and non-fluoridated water.
If you wish to know the approximate level of fluoride in your tap water, or
specific water service area, please call Derek Nguyen, Water Quality Engineer, at
714.701.3115. Additional information about the fluoridation of drinking water can
be found through the following sources:
• U.S, Centers for Disease Control and Prevention, 1-888-CDC-2306
www.cdc.gov/Oralhealth/factsheet/fl-background.html
• American Dental Association
www.ada.org/public/topics/fluoride/fluor-links.html
• American Water Works Association www.awwa.org
Special Risk Populations
Some individuals may be more vulnerable to the effects of possible contaminants
in drinking water than the general population. Persons who are undergoing
chemotherapy, persons who have undergone organ transplants, some elderly
persons, infants, persons infected with HIV/AIDS, or persons with other immune
system disorders can be particularly at risk. These persons should seek advice
from their health care providers about drinking water. The USEPA/Center for
Disease Control guidelines on appropriate means to lessen the risks of infection
by cryptosporidium or other microbial contaminants are available from the Safe
Drinking Water Hotline (1-800-426-4791).
of northern and central Orange County. The Yorba Linda Water District and more than
20 cities and retail water districts pump from the groundwater basin to provide water
to homes and businesses. Your water source depends on where you live or work
within the boundaries of our community. To find out which water source is provided
to your home or business, please visit the District’s website: http://www.ylwd.com.
Local Groundwater (chlorine disinfection)
The District obtains approximately half of its water supplies from wells located with-
in the District. The District’s groundwater sources include: Well No. 1, Well No. 5,
Well No. 7, Well No. 10, Well No. 12, Well No. 18 and Well No. 19, which are located
within Placentia city limits; and Well No. 11, Well No. 15 and Well No. 20 which are
located within Anaheim city limits
Imported Water (chloramine disinfection)
The District obtains the remainder of the water from local
wholesaler Municipal Water District of Orange County
(MWDOC). MWDOC obtains water from regional supplier
Metropolitan Water District of Southern California (MWD).
MWD obtains water from Northern California via the
California Aqueduct, and from the Colorado River via the
Colorado River Aqueduct. MWD owns and operates the
Robert B. Diemer water treatment plant located just north
of western Yorba Linda where the water is treated to meet
drinking water standards.
Basic Information about Drinking Water Contaminants
The sources of drinking water (both public tap water and bottled water) include
rivers, lakes, streams, ponds, reservoirs, springs, and groundwater. As water travels
over the surface of the land or through the ground, it dissolves naturally occurring
minerals and, in some cases, radioactive material. Water also picks up substances
resulting from the presence of animals or from human activity.
Drinking water, including bottled water, may reasonably be expected to contain at
least small amounts of some contaminants. The presence of contaminants does not
necessarily indicate that water poses a health risk.
Chemical MCL PHG
(MCLG)
YLWD Average
Groundwater
Range of
Detections
Most Recent
Sampling Date
MCL
Violations?Typical Source of Contaminant
RADIOLOGICALS
Gross Alpha (pCi/L)15 0 8.31 5.95 - 13.0 2012 No Erosion of natural deposits
Uranium (pCi/L)20 0.43 8.27 6.68 – 12.80 2012 No Erosion of natural deposits
Total Radon 222 (pCi/L) NS n/a ND ND – 449.0 2012 No “see note related to radon”
Total Radium 228 (pCi/L)5 0.019 0.1 ND – 2.31 2012 No Erosion of natural deposits
ORGANIC CHEMICALS
Bromoform NS n/a 0.02 ND – 1.20 2012 No Chlorination of water
Chloroform NS n/a 0.32 ND – 4.40 2012 No Chlorination of water
INORGANIC CHEMICALS
Arsenic (ppb)10 0.004 3.81 ND – 12.10 2012 No Erosion of natural deposits
Barium 1000 2000 11.22 ND – 101.00 2012 No Erosion of natural deposits
Fluoride (ppm)2 1 0.49 0.43 – 0.61 2012 No Erosion of natural deposits
Perchlorate (ppb)6 6 2.5 ND – 3.46 2012 No Rocket fuel and military applications
Nitrate as NO3 (ppm)45 45 9.77 4.10 – 13.69 2012 No Fertilizers, Septic Tanks
Nitrate+Nitrite as N (ppm)10 10 2.21 0.92 – 3.10 2012 No Fertilizers, Septic Tanks
SECONDARY STANDARDS
Color (units)15 n/a 0.89 ND – 5.0 2012 No Natural Organic Materials
Chloride (ppm)500*n/a 116.96 110.0 – 137.0 2012 No Erosion of natural deposits
Manganese (ppb)50 n/a 8.96 ND – 97.50 2012 No Erosion of natural deposits
Specific Conductance (µmho/cm)1600*n/a 1056.67 1010.0 – 1140.0 2012 No Erosion of natural deposits
Sulfate (ppm)500*n/a 147.56 135.0 – 165.0 2012 No Erosion of natural deposits
Total Dissolved Solids (ppm)1000*n/a 646.00 600.0 – 726.0 2012 No Erosion of natural deposits
Turbidity (ntu)5*n/a 0.3 ND – 1.3 2012 No Erosion of natural deposits
Odor (TON)3*n/a ND ND < 1 2012 No Natural Organic Materials
Zinc (ppm)5*n/a ND ND – 161.0 2012 No Erosion of natural deposits
UNREGULATED CONTAMINANTS REQUIRING MONITORING
Alkalinity, total (ppm as CaCO3)n/r n/a 218.67 209.0 – 243.0 2012 No Erosion of natural deposits
Bicarbonate (as HCO3) (ppm)n/r n/a 266.44 255.0 – 296.0 2012 No Erosion of natural deposits
Boron (ppb)NL = 1000 n/a 0.26 0.21 – 0.29 2012 No Erosion of natural deposits
Calcium (ppm)n/r n/a 99.77 85.10 – 122.0 2012 No Erosion of natural deposits
Hardness, total (grains/gal)n/r n/a 19.0 17.8 – 21.5 2012 No Erosion of natural deposits
Chromium 6 (ppb)n/a 0.02 0.1 0.2 – 1.0 2012 No Industrial discharge, natural deposits
Hardness, total (ppm as CaCO3)n/r n/a 337.11 304.0 – 410.0 2012 No Erosion of natural deposits
Total Organic Carbon (ppm)n/r n/a 1.02 0.76 – 1.57 2012 No Natural Organic Materials
Magnesium (ppm)n/r n/a 21.36 18.40 – 24.90 2012 No Erosion of natural deposits
pH (pH units)n/r n/a 7.81 7.60 – 7.90 2012 No Erosion of natural deposits
Bromide (ppm)n/r n/a 0.16 0.14 – 0.20 2012 No Erosion of natural deposits
Potassium (ppm)n/r n/a 5.32 4.50 – 8.10 2012 No Erosion of natural deposits
Sodium (ppm)n/r n/a 91.84 84.80 – 103.00 2012 No Erosion of natural deposits
Vanadium (ppb)50 n/a 3.67 3.10 – 4.50 2012 No Erosion of natural deposits
ABBREVIATIONS:
ppb = parts-per-billion; ppm = parts-per-million; pCi/L = picocuries per liter; ntu = nephelometric turbidity units; ND = not detected; n/a = not applicable; n/r = not
regulated; < = average less than detection limit for reporting purposes; MCL = Maximum Contaminant Level; MCLG = federal MCL Goal; PHG = California Public Health
Goal; TON = Threshold Odor Number; *Contaminant is regulated by a secondary standard to maintain aesthetic qualities (taste, odor, color).
Disinfection-by-Products MCL
(MRDL/MRDLG)
Average
Amount
Range of
Detections
MCL
Violations?
Typical Source of Contaminant
Chlorine Residual (ppm)(4/4)1.58 0.06 – 2.50 No Disinfectant Added for Treatment
Haloacetic Acids (ppb)60 20.1 12.3 – 26.3 No Byproducts of Chlorine Disinfection
Total Trihalomethanes (ppb) 80 49.8 38.2 – 60.6 No Byproducts of Chlorine Disinfection
Aesthetic Quality
Color (units)15*ND ND – 3.00 No Erosion of natural deposits
Turbidity (ntu)5*0.11 ND – 1.21 No Erosion of natural deposits
Odor (TON)3*ND ND – 1.00 No Erosion of natural deposits
Microbiological
Total Coliform (non-fecal coliform)5%ND ND No Naturally present in environment
2012 YORBA LINDA WATER DISTRICT DISTRIBUTION SYSTEM WATER QUALITY
Chemical Action Level
(AL)
Health
Goal
90th Percentile
Value
Sites Exceeding AL
Sample AL Violation?Typical Source of Contaminant
Lead (ppb)15 2 ND None No Internal corrosion of plumbing system, discharge from
industrial manufacturers, erosion of natural deposits.
Copper (ppm)1.3 0.17 0.48 None No Internal corrosion of plumbing system, discharge from
industrial manufacturers, erosion of natural deposits.
Chemical MCL PHG or
(MCLG)
Average
Amount
Range of
Detections
MCL
Violation?Typical Source of Contaminant
RADIOLOGICALS
Alpha Radiation (pCi/L)15 (0)3.0 ND – 3.0 No Erosion of natural deposits
Beta Radiation (pCi/L)50 (0)ND ND – 4.0 No Decay of natural and man-made deposits
Uranium (pCi/L)20 0.43 2.0 ND – 2.0 No Erosion of natural deposits
DISINFECTION-BY-PRODUCTS
Total Trihalomethanes (ppb)80 n/a 45 40 – 50 No By-product of drinking water chlorination
Haloacetic Acids (ppb)60 n/a 16 1.3 – 23 No By-product of drinking water chlorination
Total Chlorine Residual (ppm)4 4 2.3 1.5 – 2.8 No Drinking water disinfectant added for treatment
INORGANIC CHEMICALS
Aluminum (ppb)200 600 150 ND – 340 No Residual from water treatment process; natural deposits erosion
Arsenic (ppb)10 0.004 ND ND No Erosion of natural deposits, glass and electronic wastes
Barium (ppb)1000 2000 ND ND No Erosion of natural deposits, oil and metal refineries discharge
Fluoride (ppm)2 1 0.8 0.7– 0.8 No Water additive for dental benefits
Perchlorate (ppb)6 6 ND ND No Industrial waste discharge
Nitrate as Nitrogen (ppm)10 10 ND ND No Fertilizers, septic tank or natural deposits
SECONDARY STANDARDS
Chloride (ppm)500 n/a 90 87 - 93 No Natural deposits, seawater influence
Color (units)15 n/a 1 ND - 1 No Naturally-occurring organic materials
Odor Threshold (TON)3 n/a 2 ND - 2 No Naturally-occurring organic materials
Specific Conductance (µS/cm)1600 n/a 780 340 - 930 No Substances form ions in water, seawater influence
Sulfate (ppm)500 n/a 160 150 - 170 No Natural deposits, industrial wastes
Total Dissolved Solids (ppm)1000 n/a 500 490 - 520 No Natural deposits, seawater influence
Turbidity (NTU)5 n/a ND ND No Soil runoff
UNREGULATED CHEMICALS
Alkalinity (ppm)NL = 1000 n/a 98 53 - 120 No Naturally present in water
Boron (ppb)NL = 1000 n/a 130 130 No Natural deposits, industrial wastes
Calcium (ppm)n/a n/a 51 49 - 53 No Natural deposits
Chlorate (ppb)NL = 800 n/a 55 ND - 80 No By-product of drinking water chlorination, industrial processes
Chromium VI (ppb)n/a 0.02 ND ND No Industrial waste discharge, natural deposits
Corrosivity (Al)n/a n/a 12.2 12.2 No Elemental balance in water, affected by temperature, other factors
Hardness (ppm)n/a n/a 210 84 - 270 No Naturally dissolved minerals
Magnesium (ppm)n/a n/a 21 21 No Natural deposits
pH (pH Units)n/a n/a 8.1 7.9 – 8.4 No Hydrogen Ion Concentration
Potassium (ppm)n/a n/a 4 4 No Natural deposits
Sodium (ppm)n/a n/a 80 80 - 81 No Natural deposits
Total Organic Carbon (ppm)n/a n/a 2.4 2.0 – 2.7 No Man-made and natural deposits
Vanadium (ppb)NL = 50 n/a ND ND No Naturally-occurring, industrial discharge
N-Nitrosodimethylamine NL = .01 0.003 ND ND – 6.7 No By-product of drinking water chloramination
2012 METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
TREATED SURFACE WATER
2012 YORBA LINDA WATER DISTRICT GROUNDWATER QUALITY LEAD AND COPPER ACTION LEVELS AT RESIDENTIAL TAPS
NOTE:
Every three years, at least 37 residences are tested for lead and copper at-the-tap. The most recent set of samples were collected in September 2012. None of the samples collect-
ed exceeded the Action Levels for both Lead and Copper. The regulatory action level is the concentration at which, if exceeded in more than ten percent of homes tested, triggers
treatment or other requirements that a water system must follow. The Yorba Linda Water District complied with the lead and copper action levels.
ABBREVIATIONS:
AI = aggressive index; AL = action level; MCL = maximum contaminant level; MCLG = maximum contaminant level goal; n/a = not applicable; ND = not detected; NL =
notification level; NTU = nephelometric turbidity units; NL = Notification Level; pCi/L = picocuries per liter; PHG = Public Health Goal; ppb = parts per billion or micro-
grams per liter (µg/L); ppm = parts per million or milligrams per liter (mg/L); ppt = parts per trillion or nanograms per liter (ng/L); µS/cm = microSiemen per centimeter or
micromho per centimeter (µmho/cm)
ABBREVIATIONS AND FOOTNOTES:
8 locations in the distribution system are tested quarterly for total Trihalomethanes and Haloacetic acids; 37 locations are tested monthly for color, odor and turbidity. MRDL
= Maximum Residual Disinfectant Level; ND = not detected; MRDLG = Maximum Residual Disinfectant Level Goal; ntu = nephelometric turbidity units; *Contaminant is
regulated by a secondary standard to maintain aesthetic qualities (taste, odor, color).
ABBREVIATIONS:
AI = aggressive index; AL = action level; MCL = maximum contaminant level; MCLG = maximum contaminant level goal; n/a = not applicable; ND = not detected; NL =
notification level; NTU = nephelometric turbidity units; NL = Notification Level; pCi/L = picocuries per liter; PHG = Public Health Goal; ppb = parts per billion or micrograms
per liter (µg/L); ppm = parts per million or milligrams per liter (mg/L); ppt = parts per trillion or nanograms per liter (ng/L); µS/cm = microSiemen per centimeter or micromho
per centimeter (µmho/cm)
Vulnerability assessments of potential sources of contamination for Wells
11 and 15 were completed in April 2003. These groundwater sources are
considered most vulnerable to the following activities not associated with
detected contaminants: chemical/petroleum processing/storage; metal
plating/finishing/fabricating; and plastics/synthetics production.
A vulnerability assessment of potential sources of contamination for
Well 19 and Well 18 were completed in May 2004 and September 2005,
respectively. A vulnerability assessment study for Well 20 was completed in
June 2011. The groundwater sources are considered most vulnerable to the
following activities not associated with detected contaminants: gas stations;
dry cleaners; metal plating/finishing/fabricating plants; plastic/synthetic
producers; underground injection of commercial/industrial discharges;
underground storage tanks; agricultural drainage; fertilization, pesticide and
herbicide application; automobile-body and repair shops; sewer collection
systems; food processing, and chemical/petroleum processing/storage.
A copy of the complete assessment is available at Department Public of
Health District Office at 605 West Santa Ana Blvd., Building 28, Room 325,
Santa Ana, CA 92701.
Measurements
In order to ensure that tap water is
safe to drink, EPA and CDPH prescribe
regulations that limit the amount of
certain contaminants in water provided
by public water systems.
The tables below list all the drinking
water contaminants that the District
detected during the 2012 calendar year. The presence of these contaminants
in the water does not necessarily indicate that the water poses a health risk.
Unless otherwise noted, the data presented in this table is from testing done
for the period January 1 through December 31, 2012. The CDPH requires
monitoring for certain contaminants less often than every year because the
concentrations of these contaminants are not expected to vary significantly
from year to year. Thus, some of the data, though representative of current
water quality, is more than one year old. The District contracts with state
certified, independent laboratories to perform most of the District’s water
quality testing.
ITEM NO. 9.3
AGENDA REPORT
Meeting Date: May 9, 2013 Budgeted:Yes
Total Budget:$70,000
To:Board of Directors Cost Estimate:$69,977
Funding Source:Water Operating
Fund
From:Steve Conklin, Acting General
Manager
Account No:1-0010-2120-00
Presented By:Art Vega, Acting IT Manager Dept:Information
Technology
Reviewed by Legal:Pending
Prepared By:Rick Walkemeyer, SCADA
Administrator
CEQA Compliance:N/A
Subject:Implementation of a Consolidated Storage and Backup Solution
SUMMARY:
For the Board's review and consideration is the Implementation of a Consolidated Storage and
Backup Solution. This project was discussed in the IT Workshop held in December 2011 as a future
project and budgeted this fiscal year under capital outlay. The benefits of this project would be:
Improved performance reading data for servers
Simplified and more reliable backups.
Reduced cost for new servers using this storage method.
The ability to quickly allocate more storage to a server when needed.
A scalable solution in which more storage capacity can be readily added.
A centralized more reliable data store with redundant components in case of failure.
STAFF RECOMMENDATION:
That the Board of Directors authorize the Acting General Manager to execute a Professional
Services Agreement with MR2 Solutions in the amount of $69,976.87, for the hardware, software
and installation costs for a Consolidated Storage and Backup Solution.
COMMITTEE RECOMMENDATION:
The Public Affairs-Communications-Technology Committee will discuss this matter at its meeting
scheduled May 7, 2013 and will provide its recommendation at the Board meeting.
DISCUSSION:
The District currently has multiple servers each hosting its own files/databases depending on its
function. When a new server is purchased, the amount of storage needed to store files / databases
needs to be determined. At times, this has been a problem as not enough storage was purchased
and IT has to scramble for solutions. Furthermore, our current backup solution is nearing the end of
expected useful life and no longer meets our needs.
The District's file server, which stores shared District staff and departmental files, has had multiple
storage failures in the past 2 years with multiple hard disks failing. IT staff on these occasions
worked late into the next morning to replace and restore the files to ensure District staff would have
access to these files. This file server was purchased in June 2005, is running out of space and is
well past the end of expected useful life.
With this proposed technology update, data would be stored in a centralized location in what is
known as a Storage Area Network (SAN). The SAN would be used to store the files in the District's
file server so the existing server can be retired from service. Further, when a new server is
purchased, the storage needed for its files/databases would be allocated in the SAN. If the amount
allocated is not enough, more can easily be allocated. When the SAN runs out of space, a new SAN
can be purchased and stacked with existing, working as one storage solution. Using this method,
servers will be able to obtain data faster, providing improved performance. Most District servers
would be setup using this new method. Lastly, the backup solution would be directly connected to
that SAN instead of multiple servers making this solution less complicated and more reliable.
In order to determine the District's storage requirements and allowing for future growth, a storage-
needs assessment was performed. Specialized software was used to monitor, calculate and assist
District staff in determining storage needs.
The storage-needs assessment findings were shared with four different IT consulting vendors,
which offerred solutions from three different hardware vendors. IT staff discussed our needs with
Nexus and their recommendation was the NetApp SAN and backup solution. MR2's
recommendation was an EqualLogic SAN and a Dell backup and storage solution. Finally, Xiologix
recommended EMC's VNCe series solution. Below are the cost quotes from the vendors for the
purchase, installation and training of District IT staff in the use of the SAN.
* Missing some of the required backup software.
MR2 was able to provide the District with the best priced solution within our budget. They also
seemed to better understand our needs compared to the other vendors. District IT staff is also more
familiar with their solution. As such, MR2 Solutions is the recommended provider.
Should the PACT Committee support Staff's recommendation followed by Board approval on May 9,
the goal would be to complete the implementation of this solution by the end of this fiscal year, June
30 2013. Staff believes this a achievable, subject to committee and Board approval.
Quote From:
Item
Total Cost:
Nexus
*NetApp FAS2220 HA,
$ 79,644.01
MR2 Solutions EqualLogic PS6100X, AppAssure Backup software for VMware &
servers, Dell DL2200 Backup-storage.
$ 69,976.87
XioLogix
*EMC VNCe3150,Veeam Backup, EMC Data
Domain DD620-12 Backup storage.
$ 79,299.68
XioLogix
EMC VNC 5300, Veeam Backup software, EMC Data Domain
DD620-12Backup storage. (Alternative Quote).
$ 96,821.47
STRATEGIC PLAN:
OE 1-A: Identify the Current Functionality of Existing Technology and Determine if it is Being
Utilized to Full Capacity
ATTACHMENTS:
Name:Description:Type:
PSA_MR2_Work_Signed_-_REVISED.pdf PSA with MR2 Solutions Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
RC/PH 5-0
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PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE YORBA LINDA WATER DISTRICT
AND
MR2 Solutions, Inc.
PROJECT/SITE: Storage Consolidation, and/or Back-up Software & Hardware Solution
DATE: 3/15/2013
THIS PROFESSIONAL SERVICES AGREEMENT (“Agreement”) is made and entered into
on November 14, 2012 by and between the YORBA LINDA WATER DISTRICT, a local
public agency, created and operating under authority of Division 12 of the California Water
Code (“District”), and MR2 Solutions, Inc. (“Consultant”) (collectively referred to herein as the
“Parties”).
RECITALS
WHEREAS, District is engaging in the Project described in the Scope of Work attached as
Exhibit “A”; and
WHEREAS, District requires a professional consultant with the requisite knowledge, skill,
ability and expertise to provide the necessary services for District during all phases of the Project
to which the specialized services of Consultant are appropriate; and
WHEREAS, Consultant represents to District that it is fully qualified and available to perform
the services for and as requested by District; and
NOW, THEREFORE, in consideration of the mutual promises, covenants, and terms and
conditions herein, the Parties agree as follows:
AGREEMENT
1.0. SCOPE OF WORK. The services to be provided by Consultant (“Work”) are called out
in the Scope of Work attached as Exhibit “A” and incorporated herein by reference. All such
Work shall be performed in accordance with the highest professional standards and in such a
prompt and continuous fashion as not to impede or delay the overall completion of the Project.
1.1. Project Manager. Consultant acknowledges that continuous and effective
communication between District, Consultant, and other consultants (as appropriate) is
necessary to the successful completion of the Project. Consultant may also be required to
furnish copies of its work product and communications to others as requested by District.
Consultant’s primary contact with District shall be through District’s Project Manager.
District’s primary contact with Consultant shall be through the Consultant’s Project
Manager, designated on Consultant’s Proposal for Professional Design Services attached
as Exhibit “A” and incorporated herein by reference. When requested by District,
Consultant’s Representative shall attend Project meetings and will undertake, as a part of
its professional responsibility under this Agreement, to coordinate its activities with all
appropriate individuals and consultants.
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1.2. Use of Designs and Drawings. All work product of Consultant, whether created
solely by Consultant or in cooperation with others, is prepared specifically and expressly
for District and all right, title, and interest therein shall be owned by District. District
shall make available to Consultant such information, documents, graphs, studies, etc.,
which District possesses or has access to, which are relevant to Consultant’s Work
pursuant to this Agreement.
1.3. Review. Consultant shall furnish District with reasonable opportunities from time
to time to ascertain whether the Work of Consultant is being performed in accordance
with this Agreement. All Work done and materials furnished shall be subject to final
review and approval by District. District’s interim review and approval of Consultant’s
work product shall not relieve Consultant of its obligations to fully perform this Agreement.
1.4. Commencement of Work. The Project start date is to be determined.
1.5. Time Is Of The Essence. Consultant shall perform all Work with due diligence
as time is of the essence in the performance of this Agreement. Time limits applicable for
the performance of Consultant’s Work are established in proposal.
2.0 COMPENSATION. As compensation for performance of the Work specified under the
Scope of Work (Exhibit “A”), District shall pay Consultant an amount not to exceed that
contained in Consultant’s Cost of Support and Services (Exhibit “B”). Payment will be made at
the rates set forth in Consultant’s Fee Schedule, which is also attached on Exhibit “B” and
incorporated herein by reference. Costs or expenses not designated or identified in the Fee
Schedule shall not be reimbursable unless otherwise provided in this Agreement.
2.1. Invoicing. Consultant shall submit an invoice within ten (10) days after the end
of each month during the term of this Agreement describing the Work performed for
which payment is requested. District shall review and approve all invoices prior to
payment. District shall pay approved invoices within thirty (30) days of receipt.
Consultant agrees to submit additional documentation to support the invoice if requested.
If District does not approve an invoice, District shall send a notice to Consultant setting
forth the reason(s) the invoice was not approved. Consultant may re-invoice District to
cure the defects identified by District. The revised invoice will be treated as a new
submittal. District’s determinations regarding verification of Consultant’s performance,
accrued reimbursable expenses, if any, and percentage of completion shall be binding and
conclusive. Consultant’s time records, invoices, receipts and other documentation
supporting the invoices shall be available for review by District upon reasonable notice
and shall be retained by Consultant for three (3) years after completion of the Project.
2.2. Extra Services. Before performing any services outside the scope of this
Agreement (“Extra Services”), Consultant shall submit a written request for approval of
such Extra Services and receive written approval from District. District shall have no
responsibility to compensate Consultant for any Extra Services provided by Consultant
without such prior written approval.
3.0 TERMINATION. District may terminate this Agreement at any time upon ten (10)
days written notice to Consultant. Should District exercise the right to terminate this Agreement,
District shall pay Consultant for any Work satisfactorily completed prior to the date of
termination, based upon Consultant’s Fee Schedule. Consultant may terminate this Agreement
upon ten (10) days written notice to District in the event of substantial failure by District to
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perform in accordance with the terms hereof through no fault of Consultant; or in the event
District fails to pay Consultant in accordance with the terms in Section 2.0; or if Consultant’s
Work hereunder is suspended for a period of time greater than ninety (90) days through no fault
of Consultant.
3.1. Withholding Payment. In the event District has reasonable grounds to believe
Consultant will be materially unable to perform the Work under this Agreement, or if
District becomes aware of a potential claim against Consultant or District arising out of
Consultant’s negligence, intentional act or breach of any provision of this Agreement,
including a potential claim against Consultant by District, then District may, to the fullest
extent allowed by law, withhold payment of any amount payable to Consultant that
District determines is related to such inability to complete the Work, negligence,
intentional act, or breach.
4.0. SAFETY. Consultant shall conduct and maintain the Work so as to avoid injury or
damage to any person or property. Consultant shall at all times exercise all necessary safety
precautions appropriate to the nature of the Work and the conditions under which the Work is to
be performed, and be in compliance with all applicable federal, state and local statutory and
regulatory requirements including State of California, Department of Industrial Relations
(Cal/OSHA) regulations. Consultant is responsible for the safety of all Consultant personnel at
all times during performance of its Work, including while on District property.
5.0 INDEMNIFICATION.
5.1. When the law establishes a professional standard of care for the Consultant’s
services, to the fullest extent permitted by law, Consultant will defend, indemnify and
hold harmless District, its directors, officers, employees, and authorized volunteers from
and against all claims and demands of all persons that arise out of, pertain to, or relate to
the Consultant’s negligence, recklessness, or willful misconduct in the performance (or
actual or alleged non-performance) of the Work under this agreement. Consultant shall
defend itself against any and all liabilities, claims, losses, damages, and costs arising out
of or alleged to arise out of Consultant’s performance or non-performance of the Work
hereunder, and shall not tender such claims to District nor to its directors, officers,
employees, or authorized volunteers, for defense or indemnity.
5.2. Other than in the performance of professional services, to the fullest extent
permitted by law, Consultant will defend, indemnify and hold harmless District, its
directors, officers, employees and authorized volunteers from and against all claims and
demands of all persons arising out the performance of the Work (including the furnishing
of materials), including but not limited to claims by the Consultant, Consultant’s
employees and any subconsultants for damages to persons or property, except for
damages resulting from the willful misconduct or active negligence of District, its
directors, officers, employees, or authorized volunteers.
5.3. Consultant shall defend, at Consultant's own cost, expense and risk, any and all
such aforesaid suits, actions or other legal proceedings of every kind that may be brought or
instituted against District or any of its directors, officers, employees, or authorized
volunteers, with legal counsel reasonably acceptable to District. Consultant shall pay and
satisfy any judgment, award or decree that may be rendered against District or any of its
directors, officers, employees, or authorized volunteers, in any and all such aforesaid suits,
actions, or other legal proceedings for which Consultant is obligated to defend, indemnify
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and hold harmless District, its directors, officers, employees and authorized volunteers
under this Agreement.
5.4. Consultant shall reimburse District or its directors, officers, employees, and
authorized volunteers, for any and all legal expenses and costs incurred by each of them in
connection therewith or in enforcing the indemnity herein provided. Consultant’s
obligation to indemnify shall not be restricted to insurance proceeds, if any, received by
District or its directors, officers, employees, or authorized volunteers.
6.0 INSURANCE REQUIREMENTS. Prior to execution of this Agreement, and at any
time thereafter on request, Consultant shall provide executed certificates of insurance and policy
endorsements acceptable to District evidencing the required coverage and limits for each
insurance policy. Each insurance policy shall be primary insurance as respects District, its
affiliated organizations and its and their respective officers, directors, trustees, employees,
agents, consultants, attorneys, successors and assigns (collectively, the “Covered Parties”) for all
liability arising out of the activities performed by or on behalf of Consultant. Any insurance,
pool coverage, or self-insurance maintained by Covered Parties shall be excess of Consultant’s
insurance and shall not contribute to it. Each insurance policy shall provide, or be endorsed to
provide, a waiver of rights of subrogation against Covered Parties. Each insurance policy shall
provide, or be endorsed to provide, that coverage shall not be cancelled except after thirty (30)
days prior written notice by U.S. Mail (ten (10) days for non-payment of premium) has been
given to District. Unless otherwise approved by District, each insurance provider shall be
authorized to do business in California and have an A.M. Best rating (or equivalent) of not less
than “A: VII.” Consultant shall provide and maintain at all times during the performance of this
Agreement the following insurance: (1) Commercial General Liability (“CGL”) insurance; (2)
Automobile Liability insurance; (3) Workers’ Compensation and Employer’s Liability insurance;
and (4) Errors and Omissions (“E&O”) liability insurance.
6.1. Commercial General Liability. Each CGL policy shall identify Covered Parties
as additional insured, or be endorsed to identify Covered Parties as additional insured
using ISO policy form “CG 00 01” with an edition date prior to 2004, or the exact
equivalent. Coverage for additional insured shall not be limited to vicarious liability.
Defense costs must be paid in addition to limits. Each CGL policy shall have liability
coverage limits of at least $1,000,000 per occurrence for bodily injury, personal injury
and property damage, and either at least (a) $2,000,000 aggregate total bodily injury,
personal injury and property damage applied separately to the Project; or at least (b)
$5,000,000 general aggregate limit for all operations. CGL insurance and endorsements
shall be kept in force at all times during the performance of this Agreement and all
coverage required herein shall be maintained after the term of this Agreement so long as
such coverage is reasonably available.
6.2. Automobile Liability. Each Automobile Liability policy shall require coverage
for “any auto” and shall have limits of at least $1,000,000 for bodily injury and property
damage, each accident, and shall use ISO policy form “CA 00 01,” including owned,
non-owned and hired autos, or the exact equivalent. If Consultant owns no vehicles, this
requirement may be satisfied by a non-owned auto endorsement to the CGL policy
described above. Automobile Liability insurance and endorsements shall be kept in force
at all times during the performance of this Agreement and all coverage required herein
shall be maintained after the term of this Agreement so long as such coverage is
reasonably available.
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6.3. Workers’ Compensation/Employer’s Liability. Consultant shall cover or
insure the existence of coverage under the applicable laws relating to Workers’
Compensation insurance, all of their employees employed directly by them or through
subconsultants at all times in carrying out the Work contemplated under this Agreement,
in accordance with the “Workers’ Compensation and Insurance Act” of the California
Labor Code and any amendatory Acts. Consultant shall provide Employer’s Liability
insurance with limits of at least $1,000,000 each accident, $1,000,000 disease policy
limit, and $1,000,000 disease each employee.
By Consultant’s signature hereunder, Consultant certifies that it is aware of the
provisions of Section 3700 of the California Labor Code, which requires every employer
to be insured against liability for Workers’ Compensation or to undertake self-insurance
in accordance with the provisions of that code, and that Consultant will comply with such
provisions before commencing Work under this Agreement. Upon the request of District,
subconsultants must provide certificates of insurance evidencing such coverage.
6.4. Errors and Omissions. Each E&O policy shall have limits of at least $1,000,000
per claim and $1,000,000 aggregate. Architects’ and Engineers’ coverage is to be
endorsed to include contractual liability. E&O insurance and endorsements shall be kept
in force at all times during the performance of this Agreement and all coverage required
herein shall be maintained after the term of this Agreement so long as such coverage is
reasonably available.
7.0. INDEPENDENT CONTRACTOR. The Parties agree that the relationship between
District and Consultant is that of an independent contractor and Consultant shall not, in any way,
be considered to be an employee or agent of District. Consultant shall not represent or otherwise
hold out itself or any of its directors, officers, partners, employees, or agents to be an agent or
employee of District. District will not be legally or financially responsible for any damage or
loss that may be sustained by Consultant because of any act, error, or omission of Consultant or
any other consultant, nor shall Consultant make any claim against District arising out of any such
act, error, or omission.
7.1. Taxes and Benefits. Consultant shall be solely responsible for the payment of all
federal, state and local income tax, social security tax, Workers’ Compensation
insurance, state disability insurance, and any other taxes or insurance Consultant, as an
independent contractor, is responsible for paying under federal, state or local law.
Consultant is not eligible to receive Workers’ Compensation, medical, indemnity or
retirement benefits through District, including but not limited to enrollment in CalPERS.
Consultant is not eligible to receive overtime, vacation or sick pay.
7.2. Permits and Licenses. Consultant shall procure and maintain all permits, and
licenses and other government-required certification necessary for the performance of its
Work, all at the sole cost of Consultant. None of the items referenced in this section shall
be reimbursable to Consultant under the Agreement.
7.3. Methods. Consultant shall have the sole and absolute discretion in determining
the methods, details and means of performing the Work required by District. Consultant
shall furnish, at its own expense, all labor, materials, equipment, tools and transportation
necessary for the successful completion of the Work to be performed under this
Agreement. District shall not have any right to direct the methods, details and means of
the Work; however, Consultant must receive prior written approval from District before
assigning or changing any assignment of Consultant’s project manager or key personnel
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and before using any subconsultants or subconsultant agreements for services or
materials under this Agreement and any work authorizations.
8.0. NOTICES. Any notice may be served upon either Party by delivering it in person, or by
depositing it in a U.S. Mail Deposit Box with the postage thereon fully prepaid, and addressed to
the Party at the address set forth below:
District: Steven Conklin, Interim General Manager
Yorba Linda Water District
P.O. Box 309
Yorba Linda, California 92885-0309
Primary Consultant: Basil Buencamino - MR2 Solutions
Secondary (Backup) Consultant: Hugo Nieto – MR2 Solutions
Any notice given hereunder shall be deemed effective in the case of personal delivery, upon
receipt thereof, or, in the case of mailing, at the moment of deposit in the course of transmission
with the United States Postal Service.
9.0 ASSIGNMENT. Neither Consultant nor District may assign or transfer this Agreement,
or any part thereof, without the prior written consent of the other Party, which shall not be
unreasonably withheld.
10.0 ATTORNEY’S FEES. In the event of any action arising out of, or in connection with,
this Agreement, or the Work to be performed hereunder, the prevailing Party shall be entitled to
have and recover, in addition to damages, injunctive or other relief, its reasonable costs and
expenses, including without limitation, its attorney’s fees.
11.0. BINDING ARBITRATION. Within thirty (30) days after service of a civil action on
either Party arising out of, or in connection with, this Agreement, either Party may elect to
submit the action to binding arbitration before the Judicial Arbitration and Mediation Service
(“JAMS”), located in Orange County. The Parties agree that upon an election to arbitrate, any
civil action filed will be stayed until arbitration proceedings have concluded. Upon submission
of the matter to JAMS, the submitting Party shall obtain from JAMS a list of three (3) randomly
selected arbitrators and serve said list upon the other Party. In the event that there are more than
two parties to the action, the number of arbitrators randomly selected and included in the list
shall be increased by two for each additional party involved. Upon service of the randomly
selected list of arbitrators, each party shall have twenty (20) days to eliminate two arbitrators
from the list and return it to JAMS, with the selected arbitrator being the remaining name on the
list. Should more than one name remain on the list, JAMS will randomly select the arbitrator
from the names remaining on the list. Arbitration shall be scheduled for hearing on the merits no
later than six (6) months after the date the arbitrator is selected. All parties shall be permitted to
conduct discovery as provided by the current rules of the California Code of Civil Procedure. All
costs of JAMS or of the arbitrator for Work shall be divided equally among the Parties, unless
otherwise ordered by the arbitrator. In an arbitration to resolve a dispute under this provision, the
arbitrator’s award shall be supported by law and substantial evidence.
12.0 WARRANTY. Consultant warrants that the Work to be rendered pursuant to this
Agreement shall be performed in accordance with the standards customarily provided by an
experienced and competent professional rendering the same or similar services.
13.0 FORCE MAJEURE. Upon written notice by the owing Party, the respective duties and
obligations of the Parties hereunder (except District’s obligation to pay Consultant such sums as
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may become due from time to time for Work rendered by it) shall be suspended while and so
long as performance thereof is prevented or impeded by strikes, disturbances, riots, fire,
governmental action, war acts, acts of God, or any other cause similar or dissimilar to the
foregoing which are beyond the reasonable control of the Party from whom the affected
performance was due.
14.0 ENTIRE AGREEMENT. This Agreement, and the attached Exhibits, represent the
entire and integrated agreement between District and Consultant and supersedes all prior
negotiations, representations, or agreements, either written or oral. This Agreement may be
amended only by written instrument signed by both District and Consultant.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be entered into as
of the day and year written above.
District: Consultant:
Yorba Linda Water District
By: By:
Steve Conklin, Interim General
Manager
Ron Salazar –General Manager
APPROVED AS TO FORM:
McCormick, Kidman and Behrens, LLP
By:
Arthur G. Kidman,
General Counsel
Attachments: Exhibit A: Scope of Work/Services
Exhibit B: Fee Schedule
Exhibit C: Hardware & Software Quote
MR2 Solutions, Inc.
18662 MacArthur Blvdl, Suite 390
Irvine Ca 92612
Tel: (949) 474-4495 Fax: (949) 474-4435
Tuesday, April 30, 2013
STATEMENT OF WORK
(EXHIBIT A)
Rick Walkmeyer
Yorba Linda Water District
1717 East Miraloma Avenue
Placentia Ca 92870
Network Virtualization Proposal & Technology Refresh
Based on previous meetings and conversations, the purpose of this project is to accomplish the following
objectives:
1) Refresh servers and storage technology
2) Design a virtualized network environment for enhanced data protection strategy and provide business
continuity solution for the company. This service provides for the installation of VMWare ESX
software on up to three (3) hosts; integration with Dell external storage device, integration into a Virtual
Center Console with the creation of up to 6-8VMs utilizing pre-defined image templates which is a
function of the virtual center
3) Consolidate and centralize storage to a robust, scalable and high performance SAN
4) Consolidate old, stand-alone servers to a redundant, high availability and virtualized server environment
with automatic server fail-over.
The services outlined above will be provided during the hours of 8:00am to 6:00pm – Monday through Friday.
Not Included with this Service are as follows:
• De-installation or re-installation of product(s) or business application(s)
• Installation and support of all business applications running on existing network infrastructure. We may
assist and support the end-user in installing & configuring business applications in the VMWare
environment.
The following tasks will be performed as part of the proposed services for Yorba Linda Water District.
1) Data Consolidation and Centralized Storage Implementation (Dell EQUALLOGIC)
a. Initialized both SANs by providing (Member name, Group name, IP SAN addresses and define
storage pool(s)).
b. Create volumes based on a consolidated data requirements including (SQL, Exchange, Linux,
ERP, CRM, File & Print, etc.)
c. Create schedules for volume snapshots and/or volume collections
d. Install and configure switches for high-data processing environment including the
following parameters (Flow control, Jumbo Frame, Unicast, etc.)
e. Plan for data migration from multiple server sources to the SAN.
f. Setup and install Microsoft iSCSI initiator on servers to enable SAN volumes to be mounted
back to the physical servers.
g. Assist end-user in the initial stages of the actual data migration. Customer to complete the
entire data migration.
h. Setup and configure both EqualLogic arrays for data replication. Perform side by side
replication between the two SAN for initial seeding of data to be replicated off-site.
2) Server Consolidation and Virtualization (Dell PowerEdge servers)
a. Setup and install three (3) VMWare Vsphere ESX host servers – Vanilla installation
b. Setup and install VMware Virtual Center software (Separate physical box recommended)
c. Create virtual server machines based on newly defined network infrastructure schematics
d. Configure server Vmotion / DRS to setup automatic server fail-over between ESX hosts.
MR2 Solutions, Inc.
18662 MacArthur Blvdl, Suite 390
Irvine Ca 92612
Tel: (949) 474-4495 Fax: (949) 474-4435
e. Prepare for server migration of the following server functions (Domain controller, print servers,
MS Exchange server, Blackberry Server, SQL Server, CRM, File & Print servers, Engineering
apps, Citrix or MS Terminal Server)
f. Determine any other existing servers that can be virtualized and identify existing physical
servers not eligible for virtualization
g. Create dedicated volume for VMWare for centralized storage of all virtual machine images
including VMDKs & VMFS data for enhanced management
h. Configure Host Clustering
3) Integrate Dell EqualLogic data volumes with the virtualized servers
a. Connect external Dell EqualLogic volume to VMs through iSCSI initiator
b. Test new network environment with virtualized servers and SAN EqualLogic
c. Make necessary adjustment
d. Plan and schedule for final network cutover.
e. Conduct product orientation session and review the associated documentation with the
customer. This overview does not replace system overview (sanity check) to be conducted by
Dell team
f. Obtain customer acknowledgement of the services performed.
g. Perform System Documentation on configured parameters covering ESX Hosts servers, Dell
EqualLogic array & Switches
4) Re-architecting the Network Backup Equipment
a. Design various VLANs network structures according to the various requirements of the
applications including, SAN, telephone, DMZs, production network, etc.
b. Configure each VLAN according to the required parameters of various applications (if
necessary)
c. Methodically consolidate and migrate existing port connections from old equipment to the new
Switching equipment if necessary.
MR2 Solutions, Inc.
18662 MacArthur Blvdl, Suite 390
Irvine Ca 92612
Tel: (949) 474-4495 Fax: (949) 474-4435
EXHIBIT B
CONSULTANTS’S FEE SCHEDULE
Standard Terms:
• Estimated days for setup and installation: 8 business days ($12,000)
• Project Daily Rate: $1500
• Travel fee (waived)
• Net 30 Invoice term
• 4-hour work (billing) increment
• In addition MR2 will include 8 hour of training workshop on Dell EqualLogic Auto-snapshot Manager,
Replication workshop, Group Manager Administration (free of charge)
• Dell Channel Team will provide a post installation review with customer for some Q&A session
Billing Term: T&M Service Contract Billing Rate: $1500/ per Engineer Full Day
Scheduled visit Emergency Call Date Scheduled:
Customer Authorization Signature
Date: / /
MR2 Solutions, Inc.
18662 MacArthur Blvdl, Suite 390
Irvine Ca 92612
Tel: (949) 474-4495 Fax: (949) 474-4435
EXHIBIT C
HARDWARE & SOFTWARE PROPOSAL
Q U O T E
Number YLWD42213
Date 04/22/1318662 MacArthur Blvd, Suite 400, Irvine, Ca 92612
t. 949-474-4495 f. 949-474-4435
BillTo Ship To Your Sales Rep
Yorba Linda Water District Yorba Linda Water District
Rick Walkemeyer Rick Walkemeyer
1717 East Miraloma Avenue
Placentia, CA 928701717 East Miraloma Avenue
Placentia, CA 92870
714-701-3086PhonePhone 714-701-3086
FaxFax
Terms P.O. Number Ship Via
NET 30
Line Qty Description Unit Price Ext. Price
1
Storage Virtualization Data Protection Project
2 1 $37,198.00 $37,198.00STORAGE
Dell EqualLogic PS6100X, Mainstream Performance, 10K SAS
Drives
21.6TB capacity, 10K SAS, 24x 900GB
Dual Controllers, HA with failover
INFO Channel Partner Installation Required
Asynchronous Replication
Snaps/Clones with integration for MS SQL, Exchange, Hyper V
and VMware
SAN HQ multi group monitoring software
RackRails, RapidRails for Dell Rack
Power Cord, C13 to C14, PDU Style, 12 Amps, 2 meter, Qty 1
Power Cord, C13 to C14, PDU Style, 12 Amps, 2 meter, Qty 1
3 1 $6,216.48 $6,216.48SUPPORT
ProSupport: 7x24 HW / SW Tech Support and Assistance, 3
Year NBD
4 $43,414.48
SubTotal
5 1 $9,800.00 $9,800.00BACKUP STORAGE
DL2200 Perf, 2xE5620 Proc, 2x500GB HD, H700i (224-9308)
32GB Memory (8x4GB), 1333MHz Dual Rank RDIMMs for 2
Processors LV (317-5908)
6 x 3TB 7200RPM NL SAS 3.5 inch Hard Drives (342-3025)
Windows Server 2008 R2 SP1, Standard Edition, Includes 5
CALS (421-5425)
PRICES SUBJECT TO CHANGE - PRICES BASED UPON TOTAL PURCHASE - ALL DELIVERY, TRAINING OR CONSULTING SERVICES TO BE BILLED AT PUBLISHED RATES FOR EACH
ACTIVITY INVOLVED - GENERALLY ALL HARDWARE COMPUTER COMPONENTS PROPOSED ABOVE ARE COVERED BY A LIMITED ONE YEAR WARRANTY, COVERING PARTS AND LABOUR
FOR HARDWARE ONLY AND ON A DEPOT BASIS - WE SPECIFICALLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED
WARRANTIES OR WITH REGARD TO ANY LICENSED PRODUCTS. WE SHALL NOT BE LIABLE FOR ANY LOSS OF PROFITS, BUSINESS, GOODWILL, DATA, INTERRUPTION OF BUSINESS,
Page 1 of 2
Line Qty Description Unit Price Ext. Price
CommVault Simpana 9.0 Advanced Dedupe Edition with No
License (421-4793)
ReadyRails Sliding Rails with Cable Management Arm
(330-6276)
Dell Hardware Limited Warranty Plus On Site Service Initial
Year (922-5857)
Pro Support : Next Business Day Onsite Service After Problem
Diagnosis, 2Year Extended (927-1232)
ProSupport : 7x24 HW / SW Tech Support and Assistance , 3
Year (927-1272)
Dell Hardware Limited Warranty Plus On Site Service Extended
Year (929-6508)
Pro Support : Next Business Day Onsite Service After Problem
Diagnosis, Initial Year (931-4970)
Dell ProSupport. For tech support, visit
http://support.dell.com/ProSupport or call 1-800-945-3355
(989-3439)
Power Cord, NEMA 5-15P to C13, 15 amp, wall plug, 10 feet /
3 meter (310-8509)
Power Cord, NEMA 5-15P to C13, 15 amp, wall plug, 10 feet /
3 meter (310-8509)
6 3 $575.52 $1,726.56APPASSURE
LICENSE
AppAssure Backup and Replication for Windows Server Version
5 - Physical Servers
7 12 $617.18 $7,406.16
AppAssure Backup and Replication for VMWare (Priced per
Socket) Version 5 - Virtual Servers
*3 Temporary 90 day keys for Windows Servers*
8 1 $2,158.20 $2,158.20MAINTENANCE
Dell Pro Support for Appassure
9 1 $288.00 $288.00SERVICES
Remote Installation Services - Basic
10
*Contact Sales Rep: Chris Moynier 949-474-4495 x230
SubTotal $64,793.40*Sales tax and fees applicable upon order
Name ______________________________ Date _____________
Purchase Order # _______________________________________
Signature _____________________________________________
*Tax $5,183.47
$0.00*Shipping
Total $69,976.87
PRICES SUBJECT TO CHANGE - PRICES BASED UPON TOTAL PURCHASE - ALL DELIVERY, TRAINING OR CONSULTING SERVICES TO BE BILLED AT PUBLISHED RATES FOR EACH
ACTIVITY INVOLVED - GENERALLY ALL HARDWARE COMPUTER COMPONENTS PROPOSED ABOVE ARE COVERED BY A LIMITED ONE YEAR WARRANTY, COVERING PARTS AND LABOUR
FOR HARDWARE ONLY AND ON A DEPOT BASIS - WE SPECIFICALLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED
WARRANTIES OR WITH REGARD TO ANY LICENSED PRODUCTS. WE SHALL NOT BE LIABLE FOR ANY LOSS OF PROFITS, BUSINESS, GOODWILL, DATA, INTERRUPTION OF BUSINESS,
Page 2 of 2
ITEM NO. 9.4
AGENDA REPORT
Meeting Date: May 9, 2013 Budgeted:Yes
Total Budget:$45,000
To:Board of Directors Cost Estimate:$32,000
Funding Source:All Water Funds
From:Steve Conklin, Acting General
Manager
Account No:1-2010-0780-00
Presented By:Steve Conklin, Acting General
Manager
Dept:Administration
Reviewed by Legal:Yes
Prepared By:Steve Conklin, Acting General
Manager
CEQA Compliance:N/A
Subject:Award of Contract for Operations and Efficiency Study
SUMMARY:
In its April 18, 2013 Special Board Meeting, following interviews of two firms, the Board selected
Koff & Associates, Inc.(K&A), as the firm to prepare the Operations and Efficiency Study for the
District. In response, staff of the District and K&A have come to terms for a Professional Services
Agreement for the Study for the Board's consideration.
STAFF RECOMMENDATION:
That the Board of Directors approve a Professional Services Agreement with Koff & Associates,
Inc., for preparation of an Operations and Efficiency Study, for a total fee not to exceed $31,900, in
accordance with the attached proposal, dated March 18, 2013, and updated project schedule dated
April 23, 2013.
DISCUSSION:
In accordance with the Board's direction, a process was developed and completed to identify a
professional firm with the necessary experience and qualifications to prepare an Operations and
Efficiency Study. That process started with 20 firms and culminated in a Special Board meeting on
April 18, 2013, in which two short-listed firms made presentations to the Board on their
qualifications, experience and approach to the preparation of the Study. Following consideration of
the two firms and their presentations, the Board selected Koff & Associates for the project.
STRATEGIC PLAN:
OE 2-A: Identify Core Inefficiencies
ATTACHMENTS:
Name:Description:Type:
Koff_Proposal.pdf Koff Proposal Backup Material
UPDATED_Project_Schedule_04_23_13.pdf Updated Project Schedule Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
MB/PH 5-0
KOFF & ASSOCIATES, INC.
Human Resource Consulting Since 1984
PROPOSAL
For An
ORGANIZATIONAL AND EFFICIENCY STUDY
FOR THE
YORBA LINDA WATER DISTRICT
Submitted by:
KOFF & ASSOCIATES, INC.
6400 Hollis Street, Suite 5
Emeryville, CA 94608
510.658.KOFF (5633) - voice
800.514.5195 - toll free
510.652.5633 - fax
E-mail: gkrammer@koffassociates.com
Contact Person
Georg Krammer
Chief Executive Officer
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
KOFF & ASSOCIATES, INC.
Human Resource Consulting Since 1984
March 18, 2013
Mr. Steve Conklin
Acting General Manager
Yorba Linda Water District
1717 E. Miraloma Avenue
Placentia, CA 92870
Dear Mr. Conklin:
Thank you for the opportunity to respond to your Request for Proposals. We are most interested
in assisting your District with this important study and are committed to giving this project the
highest priority. Meeting your needs is our number one goal.
Koff & Associates, Inc., a California corporation, is a woman-owned experienced public-sector
consulting firm that has been conducting similar studies for special districts (water, wastewater,
community services, education, library, fire, air quality management, housing, transportation,
solid waste, hospital, and higher education districts), cities, counties, and courts for almost thirty
years. Koff & Associates has achieved a reputation for working successfully with management,
employees, and union representatives. We believe in a high level of dialogue and input from
employees and management and our proposal speaks to that level of effort. That extra effort has
resulted in close to 100% implementation of all of our organizational studies.
Koff & Associates is a small firm that accepts only as much work as our own staff can handle.
This assures a high level of quality control, excellent communication between clients and our
office, commitment to meeting timelines and budgets, and a consistent high-caliber work
product.
As Chief Executive Officer of the firm, I would assume the role of Project Director and be
responsible for the successful completion of this project. I can be reached at the Emeryville
address and phone number listed below. My e-mail address is: gkrammer@koffassociates.com.
Please call if you have any questions or wish additional information. We look forward to the
opportunity to provide professional service to your District.
Sincerely,
Georg S. Krammer
Chief Executive Officer
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
KOFF & ASSOCIATES, INC.
Human Resource Consulting Since 1984
PROPOSAL
For An
ORGANIZATIONAL AND EFFICIENCY STUDY
FOR THE
YORBA LINDA WATER DISTRICT
TABLE OF CONTENTS
Page No.
1. Understanding of the Project 1
2. Study Objectives 2
3. Firm Profile and Qualifications 3
4. Project Team 4
5. Work Plan and Methodology 9
6. Expectations of District Support 15
7. Project Schedule 15
8. Proposed Project Cost 16
9. Insurance Requirements 18
KOFF & ASSOCIATES, INC.
Human Resource Consulting Since 1984
UNDERSTANDING OF THE PROJECT
The Yorba Linda Water District desires consulting assistance to conduct an
organizational review of the entire District in order to identify areas where the District
might be able to operate more efficiently and effectively. The District seeks to take under
advisement the consultant’s recommendations and implementation plan and initiate
changes that will result in improvements to organizational effectiveness, internal and
external communications, and workflow between departments. The District is interested
in an evaluation of organizational structure and chain of command.
The District is comprised of six (6) departments, including 1) Administration, 2)
Engineering, 3) Finance, 4) Human Resources, 5) Information Technology, and 6)
Operations. The District has a staff of seventy-six (76) full-time and three (3) part-time
employees.
The study’s purpose is to initially conduct an analysis of the District’s organizational
structure to ensure operational efficiency. This will include studying reporting
relationships, span of control, staffing levels, and comparing the District’s organizational
structure to that of other comparable districts. The final work product will be an
integrated organizational structure that will allow for potential future District growth,
career growth, and effective customer service delivery.
A second level of effort will be to analyze process and operational efficiencies, including
studying available resources, deficiencies, and redundancies. The process includes
orientation and briefing sessions with employees, management, and employees; the
completion of a position assessment questionnaire by employees; interviews/focus group
meetings with a representative sample of employees in each assignment/classification
within the District; and interviews with supervisors and managers to obtain additional
information.
Finally, the study will look at options and make recommendations for improved
efficiencies and customer service, including the potential integration of functions
between the District’s departments, identification of synergies, a review of staffing ratios
against work load, and various aspects of customer service provision by the District. The
study will also include a trend analysis regarding the results of a comprehensive survey to
identify industry best practices within the above-mentioned comparator agencies.
The study will contain specific recommendations for organizational and operational
changes, an analysis of cost impacts associated with the proposed changes, a suggested
timeline for implementation, and an implementation plan.
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
Organizational Study Proposal
Page 2 of 18
March 18, 2013
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
The study includes a significant number of meetings with the District’s project team,
management, staff, and employees, as well as the Executive Committee of the Board, and
the full Board of Directors. We have expertise in labor/management relations and
understand the importance of active participation by all stakeholders to ensure a
successful outcome. The meetings and “stakeholder touch-points” that we recommend
ensure understanding of the project parameters, enhance accurate intake and output of
information and improve a collaborative and interactive approach that will result in
greater buy-in for the study recommendations. This interactive approach, although time-
consuming, has resulted in almost 100% implementation success of Koff & Associates’
studies.
STUDY OBJECTIVES
Operational Objectives
To carefully analyze the scope and level of duties and responsibilities, processes and
assignments, requirements for successful work performance (including required
competencies), and other factors of the District’s assignments/positions/
classifications;
To conduct a comprehensive position assessment, including review of existing
documentation, position assessment questionnaire completion, employee
interviews/focus groups, management interviews, analysis of existing positions
and working situations, and other professional methods, as appropriate;
To identify organizational and workload issues during interviews with employees/
focus groups including consideration of technology and automation potential and
improvements as well as the addition of other operational tools;
To provide for growth and flexibility of assignment, where feasible, as well as
adequate career paths that will foster career service within the District and provide
a clearly designed organizational structure, reporting relationships, and logical
classification series/job families that are reflective of industry best practices;
To review and make recommendations to update the District’s employee
performance management system that holds employees accountable to the core
competencies and values the organization’s wishes to instill, as well as,
established annual goals and objectives; and
To identify operational issues by analyzing financial results of the District against
industry and market trends; specifically related to operating revenue and expenses.
Best Management Practices and Performance Measures Objectives
To review and make recommendations regarding a pool of comparator agencies
that are not only similar in size, resources, and service provision to the Yorba
Linda Water District, but also reflect the high level of forward thinking and
ingenuity, diversity, customer service, and community engagement that the
District is looking to model itself after;
Organizational Study Proposal
Page 3 of 18
March 18, 2013
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
To collect accurate organizational and operational data from the approved group
of comparator agencies and to ensure that this information is analyzed in a
manner that is clear and comprehensible to the Executive Committee, Board of
Directors, management, and employees;
To collect information from each of the comparator agencies regarding
organizational structure, position allocations, work assignments, resources used
(including human, financial, and technology resources), operational and customer
service data;
To prescribe best management practices that are reflective of industry knowledge
and the approved group of comparator agencies;
To recommend strategies to incorporate industry and market best practices into
day-to-day operations; and
To identify opportunities to leverage departmental efforts to improve overall
synergy throughout the District.
Overall Objectives
To review and understand all current documentation, policies, procedures,
practices, organizational charts, budgetary and financial data, and related
information so that the recommended implementation plan(s) can be operationally
incorporated with a minimum of disruption;
To review, analyze, and make recommendations that will enhance organizational
effectiveness and improve customer service;
To ensure sufficient documentation throughout the study and to develop a sound
and realistic implementation strategy so that the plan can be implemented and
maintained in a competent and fair manner.
To conduct a start-up meeting with the Project Team to finalize study plans and
timetables; conduct briefing and orientation sessions with employees and
management in order to educate and explain the scope of the study and describe
what are and are not reasonable study expectations and goals;
To work collaboratively and effectively with the District and its stakeholders
while at the same time maintaining control and objectivity in the conduct of the
study;
To ensure sufficient documentation of the study processes and methodologies so
that the District can integrate, maintain, and administer the plans after the initial
implementation in a competent and fair manner; and
To provide effective ongoing communications throughout the duration of the project.
FIRM PROFILE AND QUALIFICATIONS
Koff & Associates, Inc. is a majority woman-owned, State-registered small business,
public sector human resources consulting firm that was founded in 1984 and has been
assisting special districts, cities, and counties for almost thirty years. We are familiar
with the various organizational structures, agency missions, operational and budgetary
requirements, and staffing expectations.
Organizational Study Proposal
Page 4 of 18
March 18, 2013
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
We have extensive experience working in both union and non-union environments
(including serving as the management representative in negotiation meetings), working
with City Councils, Boards of Supervisors, Merit Boards, Joint Power Authorities, and
Boards of Directors.
The firm’s areas of focus are organizational, classification, and compensation studies and
industry/market surveys (approximately 70% of our workload); development of strategic
management tools; performance management; best practices policy/procedure
development and employee handbooks; executive search and staff recruitments; human
resources audits; public agency mergers and separations; and serving as off-site HR
Director for our smaller public agencies that need the expertise of an HR Director but do
not need a full-time, on-site professional.
Without exception, all of our organizational, classification, and compensation studies
have successfully met all of our intended commitments; communications were successful
with employees, supervisors, management, and union representatives; and we were able
to assist each agency in successfully implementing our recommendations. All studies
were brought to completion within stipulated time limits and proposed budgets.
The firm’s growing list of clients is indicative of its reputation as being a quality
organization that can be relied upon for producing comprehensive, sound, and cost-
effective recommendations and solutions. Koff & Associates, Inc. has a reputation for
being "hands-on" with the ability and expertise to implement its ideas and
recommendations through completion in both union and non-union environments.
Koff & Associates, Inc. relies on our stellar reputation and on the recommendations and
referrals of current clients to attract new clients. Our work speaks for itself and our
primary goal is to provide professional and technical consulting assistance with integrity,
honesty, and a commitment to excellence.
PROJECT TEAM
Project chart and professional qualifications of staff that will be included in this study are:
Organizational/Project Chart
Georg Krammer, CEO
Catherine Kaneko, President
(Principals of K&A)
Gail Koff,
Managing Director
Mike Harary,
Project Manager
Alyssa Thompson,
Project Manager
Anne Hayes,
Associate
Kathy Crotty,
Administrative
Assistant
Lori Worden,
Associate
Patty Howard,
Senior Associate
Organizational Study Proposal
Page 5 of 18
March 18, 2013
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
K&A’s team consists of nine (9) members, as shown above in our organizational
structure. All members of our team have worked on multiple comprehensive
organizational, classification, and/or compensation studies and are well acquainted with
the wide array of organizational structures, as well as the challenges and issues that arise
when conducting studies like this.
No portion of this engagement will be assigned to subcontractors.
Georg S. Krammer, M.B.A., S.P.H.R.
Chief Executive Officer
Georg brings over fifteen (15) years of management-level human resources experience to
Koff & Associates with an emphasis in organizational development; classification and
compensation design; market salary studies; executive and staff recruitment; performance
management; and employee relations, in the public sector, large corporations and small,
minority-owned businesses.
After obtaining a Master of Arts in English and Russian and teaching credentials at the
University of Vienna, Austria, Georg came to the United States to further his education
and experience and attained his Master of Business Administration from the University of
San Francisco. After starting his HR career in Wells Fargo’s college recruiting
department, he moved on to HR management positions in the banking and high-tech
consulting industries. With his experience as a well-rounded senior HR generalist, his
education in business and teaching, and his vast experience with public sector HR
programs and functions, Georg’s contribution to K&A’s variety of projects greatly
complements our consulting team. Georg joined K&A in 2000 and has been the firm’s
Chief Executive Officer since 2005.
Georg will be key personnel for this project and assigned as Project Director for this
project and coordinate all of K&A’s efforts. He will attend all meetings with the District
and be responsible for all work products and deliverables.
Catherine “Katie” Kaneko, C.P.A., P.H.R.
President
Katie brings over twenty (20) years of management level human resources experience to
Koff & Associates, Inc., both as a human resources director and as a management
consultant in the hi-tech industry as well as the public sector. She has extensive
experience in compensation including equity plans and performance incentive programs,
survey design and reporting, recruitment in both the public and private sector; staffing;
classification and job analysis; compensation and job evaluation techniques, employee
relations, retention strategies, infrastructure development; coaching; policy and procedure
development; mergers and acquisitions; change management and employee training.
Organizational Study Proposal
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March 18, 2013
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
With a Bachelor in Business Administration, Katie started her career as a Certified Public
Accountant (CPA) in an international accounting/consulting firm. She transitioned into
Human Resources within the firm to become the Human Resources Director of the San
Francisco office. She then moved into the hi-tech industry where she served in
leadership positions for high-growth, startup, and organizations in transition. Her
primary focus in recent years has been in classification, compensation, and recruitment
services in the public sector.
Katie’s experience provides a broad knowledge of human resource management within
diverse organizations. Her background provides her a strong ability to understand the big
picture, identify problems and solutions, and effectively implement them. Her skill set
complements our current consultant base with additional levels of service areas. Katie
joined K&A in 2000 and has been the firm’s President since 2005.
Katie will provide consultant support throughout the study, including internal
organizational analyses, the external market survey, development of recommendations,
and implementation strategies.
Gail Koff
Managing Director
Gail Koff, Principal of Koff & Associates, Inc. for 21 years and now the Managing
Director, has over thirty-five (35) years of human resource management experience, most
of which have been serving the needs of public agencies. Gail’s prior experience, after
receiving her degree from Boston University, includes serving as the Personnel Director
for one of California's largest sanitary districts, Central Contra Costa Sanitary District as
well as the Personnel Director for the California College of Arts and Crafts.
She has spent twenty-one (21) years in her own firm providing consulting assistance to
cities, counties and special districts. She specializes in strategic development;
labor/management issues; classification and job analysis; compensation design and pay
for performance strategies; executive search; employee handbooks and policy direction;
performance management; and organizational efficiency issues.
Gail is familiar with the unique problems of public agencies and has worked extensively
with publicly elected Councils, Boards, Commissions, numerous unions, and
management and employee groups.
Gail works closely with the staff throughout the entire process to ensure success. She is
actively engaged throughout the study’s progress to ensure quality control, ti meliness,
and meeting client expectations.
Organizational Study Proposal
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March 18, 2013
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
Alyssa Thompson
Project Manager
Alyssa earned her bachelor’s degree in Psychology with a minor in Sociology-
Organization Studies from the University of California, Davis and is currently working
on her PhD in Organizational Psychology from Alliant International University. She
brings with her over ten (10) years of human resources experience in compensation data
gathering and analysis, classification analysis and development, performance
management, affirmative action program development, and recruitment. Alyssa also has
experience in designing and conducting quantitative and qualitative research studies.
Since joining the firm in 2007, Alyssa has worked on over sixty (60) organizational,
classification, compensation, recruitment, and other special human resources projects. She
has worked on classification and/or compensation projects for numerous clients, such as
the Cities of Monterey, Palo Alto, Campbell, Piedmont, El Cerrito, Emeryville, Sausalito,
Novato, Napa, Santa Rosa, Tracy, Madera, Ione, Newman, Patterson, Orange, Menifee,
Poway, Tigard (OR), and the Towns of Windsor, Danville and Apple Valley, as well as,
the Marin Municipal Water District, Dublin San Ramon Services District, Midpeninsula
Regional Open Space District, Central Contra Costa Sanitary District, Mid-Peninsula
Water District, Purissima Hills Water District, South Tahoe Public Utility District,
Orange County Sanitation District, South Coast Water District, Moulton Niguel Water
District, Ventura Regional Sanitation District, Truckee Donner Recreation and Park
District, Berkeley Unified School District, California School Boards Association,
Housing Authority of Texarkana Texas, Housing Authority of the County of San
Bernardino, San Diego Housing Commission, San Francisco Housing Authority, and the
Counties of San Mateo and Tehama.
Alyssa has also participated in several recruitment efforts for various positions ranging
from entry-level to executive management. Alyssa has participated in various special
projects like conducting exit interviews, retirement benefits studies, and human resources
audits.
Mike Harary
Project Manager
Mike Harary brings over twenty-five (25) years of HR experience “to the table,”
currently serving as the Assistant Human Resources Director for the City of Orange and
working of our team on a part-time basis. For the past 15 years, Mike has been involved
in all aspects of HR for Orange, including serving as Chief Negotiator for the City. Mike
manages the City’s recruitment and selection, employee benefits, labor relations,
classification and compensation, and general Human Resources functions.
Prior to Orange, Mike worked for the City of La Mirada for almost 10 years, working his
way up from Personnel Intern to Personnel Analyst. Mike possesses a Bachelor’s Degree
in Business Administration emphasizing in Human Resources Management from
Organizational Study Proposal
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March 18, 2013
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
California State University, Long Beach, and a Masters of Business Administration also
from Cal State Long Beach.
Mike has played a key role in developing and implementing CalPACS, a regional,
internet-based, comprehensive salary and benefits survey website for local agencies. For
his efforts in this successful venture, Mike received the 2005 “Moving Forward Award”
by the California Public Employers Labor Relations Association (Cal-PELRA). Mike
also served as the President of the Orange County Employee Relations Committee.
Anne Hayes
Firm Associate
Anne is the newest member to our team and earned a Bachelor’s degree in Mathemat ics
and Economics from the University of California, Santa Barbara.
Before joining Koff & Associates, she worked in the private sector for more than 10
years, with 5 years in a management role. She transitioned to a non -profit organization,
which specialized in providing labor relations representation to public sector employers,
where she gained extensive experience in data gathering and analysis, specifically in the
areas of classification, compensation and benefit analysis for public sector agencies.
Since joining K&A one year ago, Anne has been an integral part of project teams
working on classification and/or compensation studies for the Mount San Antonio
Community College District, Cutler Orosi Joint Unified School District, Livermore
Amador Valley Transit Authority, Orange County Transportation Authority, Alameda
County Waste Management Agency, South Tahoe Public Utility District, Purissima Hills
Water District, City of El Cerrito, and City of Novato.
Patty Howard
Senior Associate
Patty’s 21 years of public sector, management-level Human Resources experience
includes 14 years with the County of El Dorado and 7 years with the City of Rocklin. She
has worked in all areas of human resources management including recruitment &
selection, classification & compensation, employee relations, labor negotiations, and
EEO investigations. She is also a seasoned trainer having developed and presented
Supervisory and Lead Worker training (multiple training modules), harassment and
discrimination prevention, and new employee orientation for employees in all job
classifications. She has also obtained specialized training and certification in order to
conduct Stephen Covey’s “7 Habits of Highly Effective People”.
Patty has a Masters Degree in Public Administration with an emphasis in Human
Resources Management. In addition, she has been earned her IPMA-CP, a certification
awarded specifically to Human Resources professionals in the public sector from the
International Public Management Association – Human Resources (IPMA-HR) and holds
Organizational Study Proposal
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March 18, 2013
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
a Masters in Labor Relations Certificate from the California Public Employers Labor
Relations Association (CALPELRA).
Lori Worden
Firm Associate
Lori is the newest member of our team. Prior to joining Koff & Associates, she spent
over a decade in internal HR consulting roles for a number of large public agencies,
including the Administrative Office of the Courts and the University of California
system. Lori obtained her Master’s degree in Industrial & Organizational Psychology
from CSU Long Beach and went on to earn a Juris Doctorate degree (emphasis in
employment and labor law) at Golden Gate University.
Lori learned tricks of the trade on a job classification consolidation project within the
California courts system, spurred by the unification of the Municipal and Superior
Courts.
Lori’s career path led her from the courts to the University of California system, where
she conducted total compensation and organizational studies, developed and analyzed
compensation and benefits data for collective bargaining, and contributed to
improvements to the position management and HRMIS system. One of her career
highlights was the development of a new campus-wide classification and compensation
structure for UC Merced. The project was based on pioneering work in the area of
classification and compensation using a market based model created by UC Berkeley.
Kathy Crotty
Administrative Assistant
Kathy is our resident data entry, office administrative, and technical “guru” and has been
with the firm for over five years. She will be heavily involved with the technical aspects
of the project and assist our professional staff at each phase of each project.
WORK PLAN AND METHODOLOGY
This section of the proposal identifies the actual work scope. We believe that our
detailed explanation of methodology and work tasks clearly identifies our approach and
comprehensiveness.
A. INITIAL DOCUMENTATION REVIEW/MEETING WITH PROJECT TEAM
This phase includes identifying the key client project team, contract ad ministrator, and
reporting relationships. Our team will meet with the client team to create the specific
work plan and work schedule; reaffirm the primary objectives; determine deadline dates;
determine who will be responsible for coordinating/scheduling communications with
employees and management; and develop a timetable for conducting the same. Also
included will be the gathering of written documentation including assembling the current
organizational charts, class descriptions, operational budgets, documentation on current
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6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
operational practices, information regarding in-house and outsourced/contracted services,
and any other relevant documentation.
This initial step will also include a discussion of our methodology and the components of
the survey instrument that will be used when comparing the Yorba Linda Water District
to other, comparable agencies. We recommend meeting with District management as
well as an employee focus group and/or employee representation to discuss the major
elements of the study and which areas (organizational, operational, etc.) will be studied.
We are flexible in regards to the inclusion of employees and/or employee representation
but have found that their buy-in through the process usually avoids conflict at the end of
the study.
We will respond to any questions.
B. DETERMINE COMPARATOR AGENCIES
The selection of comparator agencies is considered a critical step in the study process.
Using the following factors to identify appropriate comparators, we will receive approval
before proceeding with the survey. The factors that we review when selecting and
recommending appropriate comparator agencies include:
Organizational type and structure – While various agencies may provide
overlapping services and employ some staff having similar duties and responsibilities,
the role of each agency is somewhat unique, particularly in regard to its relationship
to the citizens it serves and level of service expectation. During this iterative process,
previous comparator agencies that have been utilized and the advantages and
disadvantages of including them and/or others will be discussed.
Similarity of population served, agency demographics, agency staff, and
operational and capital improvement budgets – These elements provide guidelines in
relation to resources required (staff and funding) and available for the provision of
agency/departmental services. They also speak to the diversity of the community that
they serve and the common issues that the District might face to best serve that
community.
Scope of services provided – While having an agency that provides all of the services
at the same level of citizen expectation is ideal for comparators, as long as the
majority of services are provided in a similar manner, sufficient data should be
available for analysis.
C. DEVELOPMENT OF POSITION ASSESSMENT AND SURVEY QUESTIONNAIRES
The study will contain two major surveys: 1) an analysis of current roles, duties,
responsibilities, and processes within the District and 2) a study of organizational and
operational best practices of agencies that are comparable.
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6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
For both surveys, we will develop a survey instrument/questionnaire to ensure that the
right questions are asked. The internal District survey will be structured similar to a
position assessment questionnaire and include questions regarding roles, duties,
responsibilities; processes, efficiencies, and time/frequency; and competencies,
knowledge, skills, and abilities required to perform jobs successfully.
The industry/market study will include questions regarding organizational structure,
ratios of staffing, and other resources to assignments and expected work products, best
management practices, and performance measures.
It is our recommendation to review the two survey instruments/questionnaires in a
collaborative manner including management and employees (and/or employee
representation, if the District is open to this approach). Again, the more stakeholder buy-
in that can be obtained at the front-end regarding the structure and process of the study,
the more successful the final outcome of the study will be.
D. ORIENTATION MEETINGS WITH EMPLOYEES AND DISTRIBUTION OF POSITION
ASSESSMENT QUESTIONNAIRES
We will facilitate several orientation meetings with employees (within the same
timeframe, for cost containment purposes) and distribute the Position Assessment
Questionnaires for purposes of the internal survey. While this meeting may not be
mandatory, it is highly recommended, as it forms the beginning of the educational
process that continues throughout the study. Project processes will be explained,
expectations will be clarified, and elements that are not a part of the study will also be
covered. Questions will be answered and hints for completing the questionnaire will be
given. The questionnaires shall be handed out with the incumbents’ current class
descriptions attached so employees can use them as a tool for completing the
questionnaires.
We recommend that employees complete separate questionnaires but giving employees in
the same classification the option of collaborating on completing a questionnaire
together, if the employees feel that their daily assignments are similar enough. However,
one critical piece we hope to determine through this process is whether certain
employees’ duties and tasks have changed compared to their peers in the same
classification. If so, we want to be able to analyze those separately. While we realize
that individual questionnaires per employee will be a time-consuming process, our goal is
to analyze the questionnaires and identify trends regarding processes, efficiencies,
staffing, and what works and what doesn’t work within each functional area of
assignment.
Employees complete the questionnaire, send it to their supervisor/ manager for rev iew,
comment, and signature, and then send it to our office for analysis.
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6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
E. POSITION ASSESSMENT QUESTIONNAIRE REVIEW AND EMPLOYEE/
SUPERVISORY/MANAGEMENT FOCUS GROUPS/INTERVIEWS
Upon receipt of the questionnaires, they will be reviewed and analyzed along with other
documentation, including any information regarding time keeping, efficiency
measurements, and process descriptions. As mentioned above, the goal is to identify
certain trends regarding processes, efficiencies, staffing, and what works and what
doesn’t work within each functional area of assignment.
Based on those trends, we would then design which types of focus groups will be needed
to delve into those trends and obtain more information. The assumption is that some
individual employee interviews may be needed to clarify certain information that was
contained, or perhaps we found to be missing, in the position assessment questionnaires.
Focus group meetings/interviews will also be held with supervisory and management
staff, who will clarify their own responsibilities as well as confirm the information we
have received in the focus groups/interviews with their staff. Some focus groups may
include both employees and management, depending on what the goal for that particular
focus group is.
Interviews will include the eighteen (18) senior and mid-managers referenced in the RFP.
The goal of the focus groups/interviews and the review additional documentation is to
identify/determine the following:
Assignments, responsibilities, duties, and tasks;
Process efficiencies, time spent, and frequency of the above;
Competencies, knowledge, skills, and abilities required to perform the above;
Reporting relationships and span of control;
Staffing ratios;
Available resources, including deficiencies and redundancies; and
Equipment, computer and automation technologies used.
F. INDUSTRY/MARKET DATA COLLECTION
Our firm does not collect market data by merely sending out a written questionnaire. We
find that such questionnaires are often delegated to the individual in the department with
the least experience in the organization and given a low priority. We conduct all of the
data collection and analysis ourselves to ensure validity of the data and quality control.
Typically, we collect organizational charts, classification descriptions, employee
allocation lists, policies and procedures, performance measurement plans, and other
information via websites or in person, by telephone, email, or facsimile. With this prior
knowledge and our experience in the public human resources field, our professional staff
will then schedule appointments preferably in person, with knowledgeable individuals to
answer specific questions. We find that the information collected using these methods
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6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
has a very high validity rate and is generally substantiated before management,
employees, as well as governing bodies.
The goal of the industry/market survey is to obtain information on the following:
Organizational structure, reporting relationships, span of control, and staffing
levels;
Operational requirements, infrastructure, services and ratios of staffing to
population served and other productivity measures;
Outsourcing and in-sourcing practices per functional area of assignment;
Resources available, including human, financial, technological resources;
Computer and automation technologies used to improve operating efficiencies
and/or customer service, including an evaluation of existing systems (i.e., pros
and cons);
Best management practices and standards; and
Performance measures and measurement tools per functional area of assignment;
G. DATA AND TREND ANALYSIS
Surveying approximately eight (8) comparator agencies should yield sufficient data and
information to identify industry/market trends. Especially including agencies in the study
that are known to be on the cutting edge of providing the highest quality services will
uncover trends for best management practices that will be invaluable to the District.
We will analyze the data and trends from the market survey and incorporate tho se into
our recommendations for organizational and operational changes for the District.
H. DEVELOPMENT OF RECOMMENDATIONS AND IMPLEMENTATION STRATEGIES
Depending on the results of the internal and external assessments, we will develop
specific recommendations for organizational and operational changes for the District.
Recommendations and implementation strategies will include the following (as
appropriate):
Organizational restructuring, including re-assigning reporting relationships,
streamlining classification series/progressions, and re-organizing functional areas
of assignment;
Staffing levels, including ratios of staff to workloads, as well as, ratios of “rank-
and-file” staff to supervisory and management staff;
Outsourcing and in-sourcing opportunities, including areas of assignment at the
divisional, functional, and specific task levels;
Process efficiencies, including redundancies and deficiencies, as well as,
assignments of functions and tasks;
Equipment and computer and automated technologies: while we are not
management information systems or information technology experts, we will
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6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
report the results of the market survey and identify any trends in this area,
including feedback regarding the successfulness of current and/or newly
implemented systems used by the comparator agencies;
Best management practices, including trends observed in the identified survey
market, as well as, a transition roadmap from current practices to industry best
practices, as appropriate; and
Performance measures, including how to develop a balanced scorecard between
organizational goals, departmental goals, and work productivity goals and how
individual performance measures for all District staff should relate to those.
It should be noted that the development of recommendations and, especially,
implementation strategies will be as collaborative a process with District management, as
the District wishes. We are most receptive to District input, especially when it comes to
the organizational and operational realities of addressing potential District deficiencies
and implementing new policies/procedures/rules/practices, etc. Especially, when it
comes to developing timelines, input from the District will be elicited to create realistic
roadmaps.
Our suggested plans for changes will be prioritized based on importance/urgency, will
include suggested timelines for implementation, and will also include an analysis of
potential cost impacts associated with the proposed changes.
Draft recommendations and implementation plans will be discussed with the management
team prior to developing an Interim Report.
I. MANAGEMENT REVIEW/REANALYSIS AND FEEDBACK
We will share our findings and recommendations with departmental stakeholders before
our report, recommendations, and implementation plans are finalized. Our experience
has been that this can be one of the most critical phases of the project to ensure that
deliverables are vetted through the individuals who are most familiar with departmental
operations.
J. PREPARATION OF DRAFT FINAL AND FINAL REPORT AND DELIVERABLES
A Draft Interim Report of the Organizational Study will be completed and submitted to
the District for review and comments. The report will provide detailed internal and
external survey findings, documentation, and recommendations. The report will include
a set of all survey instruments and documentation, data and trend analysis results, as well
as recommendations and the implementation issues surrounding our recommendations.
Once all of the District’s questions/concerns are addressed and discussed, a Final
Organizational Study Report will be created and submitted in bound format.
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6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
K. PRESENTATION TO THE PROJECT TEAM AND/OR DISTRICT MANAGER/COUNCIL
In addition to ongoing periodic meetings and communication with the Project Team, The
Executive Committee, management, employees, and other stakeholders throughout the
various phases of the study, as well as continuous status reports per email and conference
calls, our proposal includes one final presentation to the Board of Directors.
EXPECTATIONS OF DISTRICT SUPPORT
In order to conduct this study in the most timely and cost-effective manner, we expect
support in the following areas:
Timely provision of written documentation, such as current organizational charts,
employee allocation lists, class specifications, budget documents, operational
procedures and records, work assignments and schedules, requests for audits, etc.;
Assistance in the notification and scheduling of orientation and other meetings with
management and employees, and the provision of adequate space for employee focus
groups/interviews;
Assistance in the compilation of current class descriptions with the Position
Assessment Questionnaire; collecting and forwarding questionnaires; and in ensuring
that materials are completed and returned in a timely manner;
Assistance in scheduling Project Team, management, employee audit, and other
meetings; and
Meeting agreed to timelines.
PROJECT SCHEDULE
Our professional experience is that an organizational study for this siz e
organization/department and the desired scope of work will take approximately four to
five (4-5) months to complete, allowing for adequate Position Assessment Questionnaire
completion, time for focus groups and interviews, market survey data collection and
analysis, development of recommendations and implementation strategies, review steps
by the District, the development of final reports, and presentations.
The following is a suggested timeline based on contract award around mid-April:
Project Task Date of
Completion
2013
A. Initial Meeting with Project Team/Document Review by April 19
B. Determination of Comparator Agencies by April 26
C. Development of Survey Questionnaires by May 3
D. Employee Orientation Meetings by May 10
E. Position Assessment Questionnaire Review and Employee/
Supervisory/Management Focus Groups/Interviews
by June 7
F. Industry Market Data Collection by June 7
Organizational Study Proposal
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6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
G. Data and Trend Analysis by June 21
H. Development of Recommendations/Implementation Strategies by July 12
I. Management Review, Reanalysis/Feedback by July 26
J. Draft Final Report and Final Report and Recommendations by August 23
K. Final Presentations to Executive Committee and Board of
Directors
As Scheduled
PROPOSED PROJECT COSTS
We have found that, often times, our proposals address a very high level of time
commitment, which sometimes results in a higher proposal cost. We believe that our
methodology and implementation success rate is attributable to the significantly greater
level of contact we have with the Board of Directors, employees, and management. The
time we commit to working with the stakeholders (Project Team meetings, orientations,
meetings with employees and managers via interviews/focus groups, etc.) results in a
significantly greater buy-in throughout the process and with the final study results and
recommendations.
Our firm has never had a formal appeal to any of our studies in almost thirty years. It has
been our experience that the money and time invested in stakeholder touch-points
throughout the study are money and time saved during implementation. Numerous times
our firm has been hired after an agency has gone through an unsuccessful study with
another consultant, whose results were rejected or appealed and whose implementation
was very controversial. The result was a divided organization with hostility and
animosity between employees/employee representation and management. Every time our
firm was hired after such a bad experience, study stakeholders were amazed at our open
and all-inclusive process, our efforts to elicit equal stakeholder input, and our
development of recommendations that were accepted as fair and reasonable and
understood by employees, management, union representation, and the governing body.
In these economic times, the tendency may be to select the firm with the lowest cost
proposal but it has been our experience that ultimately the price can be much higher
considering the additional time and lost goodwill that can result from utilizing a less
involved process.
Our clients always provide us feedback that our process was professional,
comprehensive, understandable, timely, and inclusive. Employees, although not
necessarily always happy with our recommendations, have always indicated that we
listened to their issues and concerns and were available for discussion, as required.
Although time consuming, we also drive the process to ensure that timelines are met and
schedules are maintained.
We want to emphasize that we provide an all-inclusive lump-sum cost amount for the
entire study and do not believe in under-pricing the effort or change orders along the way,
unless the District requests an obvious and identifiable additional level of effort.
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6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
However, we’re also aware that budgets are often limited and that public agencies must
be economically conservative.
As mentioned in the scope of work, we recommend an informal employee review and
appeals process but are providing two cost options below in case the District decides
against undergoing this step of the process.
Option 1 Option 2
Organizational Study Hours Hours
A. Initial Meeting with Project Team/Document Review 20 20
B. Determination of Comparator Agencies 10 10
C. Development of Survey Questionnaires 20 20
D. Employee Orientation Meetings 16 16
E. Position Assessment Questionnaire Review and
Employee/ Supervisory/Management Focus
Groups/Interviews
Option 1: assuming that most employees will be involved
Option 2: only the 18 senior and mid-managers will be
interviewed, depending on the District’s preferences
40 20
F. Survey Market Data Collection: assuming 8 comparator
agencies
50 50
G. Data and Trend Analysis 20 20
H. Development of Recommendations/Implementation Plans 40 40
I. Management Review, Reanalysis/Feedback
Option 1: Senior and Mid-management
Option 2: Senior Management only
18 12
J. Final Reports and Recommendations 24 24
K. Final Presentation 10 10
Additional meetings with the Project Team, Management,
Executive Committee and/or the Board of Directors
12 12
Total Professional Hours 280 254
Combined composite rate: $105/Hour $29,400 $26,670
Expenses: $2,500 $2,500
Expenses include but are not limited to duplicating and
binding documents and reports, phone, supplies, FAX,
postage, mileage, hotels, air fare, per diem, etc.
TOTAL LUMP SUM FOR PROJECT: $31,900 $29,170
*Additional consulting will be honored at composite rate
of $105/hr.
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6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
INSURANCE REQUIREMENTS
We will submit support of this level of coverage and endorse the District with our
General Liability insurance coverage upon award of contract if desired:
Workers’ Compensation: Statutory Limits
Automobile Insurance: $1 Million per accident
Errors and Omissions: $1Million per occurrence
General Liability: $1Million per occurrence
This proposal is valid for 90 days.
Respectfully Submitted,
By: KOFF & ASSOCIATES, INC.
State of California
March 18, 2013
Georg S. Krammer Date
Chief Executive Officer
KOFF & ASSOCIATES, INC.
Human Resource Consulting Since 1984
UPDATED PROJECT SCHEDULE
For An
ORGANIZATIONAL AND EFFICIENCY STUDY
FOR THE
YORBA LINDA WATER DISTRICT
Submitted by:
KOFF & ASSOCIATES, INC.
6400 Hollis Street, Suite 5
Emeryville, CA 94608
510.658.KOFF (5633) - voice
800.514.5195 - toll free
510.652.5633 - fax
E-mail: gkrammer@koffassociates.com
Contact Person
Georg Krammer
Chief Executive Officer
6400 Hollis Street, Suite 5, Emeryville, CA 94608 TEL 510-658-KOFF (5633) FAX 510-652-KOFF (5633)
www.KoffAssociates.com
PROJECT SCHEDULE
Our professional experience is that an organizational study for this size
organization/department and the desired scope of work will take approximately four to
five (4-5) months to complete, allowing for adequate Position Assessment Questionnaire
completion, time for focus groups and interviews, market survey data collection and
analysis, development of recommendations and implementation strategies, review steps
by the District, the development of final reports, and presentations.
The following is a suggested timeline based on contract award on May 9, 2013:
Project Task Date of
Completion
2013
A. Initial Meeting with Project Team/Document Review by May 17
B. Determination of Comparator Agencies by May 24
C. Development of Survey Questionnaires by May 31
D. Employee Orientation Meetings by June 14
E. Interview Board Members, Managers, and Mid-managers by June 14
F. Position Assessment Questionnaire Review and Employee/
Supervisory/Management Focus Groups/Interviews
by August 2
G. Industry Market Data Collection by July 19
H. Data and Trend Analysis by August 2
I. Development of Recommendations/Implementation Strategies by August 23
J. Management Review, Reanalysis/Feedback by September 6
K. Draft Final Report and Final Report and Recommendations by September 20
L. Final Presentations to Executive Committee and Board of
Directors
As Scheduled
ITEM NO. 9.5
AGENDA REPORT
Meeting Date: May 9, 2013
To:Finance-Accounting Committee
From:Steve Conklin, Acting General
Manager
Presented By:Stephen Parker, Finance
Manager
Dept:Finance
Reviewed by Legal:Yes
Prepared By:Stephen Parker, Finance
Manager
Subject:Adopting a Public Investment Policy
STAFF RECOMMENDATION:
That the Board of Directors adopt Resolution No. 13-06 Setting Forth a Public Funds Investment
Policy and Rescinding Resolution No. 11-24.
COMMITTEE RECOMMENDATION:
The Finance-Accounting Committee discussed this item at its meeting held April 22, 2013 and
supports staff's recommendation.
DISCUSSION:
The California Government Code says "the treasurer or chief fiscal officer of a local agency may
annually render to the legislative body of that local agency and any oversight committee of that local
agency, a statement of investment policy, which should be considered at a public meeting." As
such, the attached resolution is being presented to the Board.
This fiscal year, the California Municipal Treasurer's Association (CMTA) came out with an
Investment Policy Certification Program. As staff investigated what it would take to have the
District's policy meet the standards of the certification program, it became apparent that
considerable changes were necessary, as the previous policy had not had a significant "makeover"
in well over a decade. Staff believes that this proposed policy will meet the standards of CMTA's
Certification Program.
The majority of the changes to the policy offer clarity of District policies and procedures and have
the District's policy conforming with best practices. The policy reflects the California Government
Code's (CGC) allowable investments and the Districts' allowable investments side by side. As the
majority of the District's previously authorized investments had limits at the CGC threshold, there
were no significant changes to authorized investments. The exception being that CD Placement
Service was added as an authorized investment. CD Placement Service allows the District to place
money in one investment that then splits that investment into CD's within FDIC limits at a number of
financial institutions.
Legal counsel has completed a review of the new policy, and a number of minor corrections were
made to ensure that the District's policy was written as clearly as possible, clear of inconsistencies
and had correct references to the CGC. The current policy includes all changes that were made
based on legal counsel's recommendation. A red-line version of the policy that was submitted to and
supported by the Finance-Accounting Committee is attached to highlight the changes proposed by
legal counsel.
STRATEGIC PLAN:
FR 2-C: Implement an Approach to Ensure Reserves are Responsibly Funded
PRIOR RELEVANT BOARD ACTION(S):
The District's current investment policy was adopted by Resolution No. 11-24 on December 22,
2011.
ATTACHMENTS:
Name:Description:Type:
Resolution_No__13-06_Investment_Policy.docx Resolution Backup Material
Investment_Policy_May_2013.docx Investment Policy Backup Material
Investment_Policy_May_2013_red-line.pdf Investment Policy - red line Backup Material
Approved by the Board of Directors of the
Yorba Linda Water District
5/9/2013
PH/RK 5-0 Roll Call
Resolution No. 13-06 Setting Forth Public Funds Investment Policy and Rescinding Resolution No. 11-24 1
RESOLUTION NO. 13-06
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE YORBA LINDA WATER DISTRICT
SETTING FORTH PUBLIC FUNDS INVESTMENT POLICY
AND RESCINDING RESOLUTION NO. 11-24
WHEREAS, California Government Code (CGC) Section 53600 sets forth guidelines
for the investment of public funds and
WHEREAS, the current Yorba Linda Water District (Yorba Linda Water District or
District) Investment Policy was adopted by Resolution No. 11-08 on
December 22, 2011; and
WHEREAS, the District is in possession of public funds that are not required for
immediate expenditure, and are available for investment; and
WHEREAS, a policy setting forth guidelines for the investment of said funds is
necessary for compliance with the principles of sound financial
management; and
WHEREAS, the Board of Directors of the Yorba Linda Water District desire to adopt
the Investment Policy set forth herein.
NOW, THEREFORE, BE IT RESOLVED by Board of Directors of the Yorba Linda
Water District as follows:
Section 1. Exhibit 1 (Investment Policy – Yorba Linda Water District) is hereby
adopted and deemed implemented concurrent with passage and adoption
of this Resolution.
Section 2. That Resolution 11-24 is hereby rescinded immediately upon adoption of
this Resolution.
PASSED AND ADOPTED this 9th day of May 2013 by the following called vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Gary Melton, President
Yorba Linda Water District
Resolution No. 13-06 Setting Forth Public Funds Investment Policy and Rescinding Resolution No. 11-24 2
ATTEST:
Steven R. Conklin, Secretary
Yorba Linda Water District
Reviewed as to form by General Counsel:
Arthur G. Kidman, Esq.
Kidman Law, LLP
INVESTMENT POLICY
BOARD OF DIRECTORS
Gary T. Melton, President
Robert R. Kiley, Vice President Michael J. Beverage, Board Member
Ric Collett, Board Member Phil Hawkins, Board Member
Steven R. Conklin, Acting General Manager
May 2013
TABLE OF CONTENTS
Section 1 Policy
Section 2 Scope
Section 3 Delegation of Authority
Section 4 Investment Objectives
Section 5 Prudence
Section 6 Ethics and Conflicts of Interest
Section 7 Authorized Broker/Dealers
Section 8 Authorized Investments
Section 9 Review of Investment Portfolio
Section 10 Investment Pools
Section 11 Collateralization
Section 12 Safekeeping and Custody
Section 13 Diversification and Maximum Maturities
Section 14 Internal Controls
Section 15 Performance Standards
Section 16 Reporting
Section 17 Investment Policy Adoption
Appendix “A” Description of Authorized Investments and Restrictions
Appendix “B” Glossary
Investment Policy – May 2013
1
SECTION 1: POLICY
1.1 It is the policy of the Yorba Linda Water District (“District”) 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.
1.2 The purpose of this policy is to provide guidelines for the prudent
investment of funds of the District and to outline the policies for maximizing
the efficiency of the District’s cash management. The District’s goal is to
enhance the economic status of the District consistent with the prudent
protection of the District’s investments. This investment policy has been
prepared in conformance with all pertinent existing laws of the State of
California.
SECTION 2: SCOPE
2.1 This Investment Policy applies to all funds and investment activities of the
District, except for the proceeds from capital project financing instruments,
which are invested in accordance with provisions of their specific
documents. These funds are accounted for as Enterprise Funds and are
identified in the District’s Comprehensive Annual Financial Report.
SECTION 3: DELEGATION OF AUTHORITY
3.1 The authority of the Board of Directors to invest funds is derived from
Section 53601 of the California Government Code (“CGC”). Section 53607
of the CGC grants the Board of Directors the authority to delegate that
authority, for a one-year period, to the District’s Treasurer. Therefore,
management responsibility for the investment program is hereby delegated
to the District’s Treasurer, who shall be responsible for all transactions
undertaken and shall establish a system of controls to regulate the activities
of subordinate officials and their procedures in the absence of the Treasurer.
The Treasurer shall establish procedures for the management of investment
activities, including the activities of staff consistent with this Policy.
3.2 The Treasurer may retain the services of an outside investment advisor or
manager as approved by the Board to assist with the District’s investment
program. Any investment advisor selected shall make all investment
Investment Policy – May 2013
2
decisions and transactions in strict accordance with State law, and this
Policy.
SECTION 4: INVESTMENT OBJECTIVES
4.1 The primary objectives, in priority order, of the District’s investment
activities shall be:
4.1.1 Safety: Safety and preservation of principal is the foremost objective
of the investment program. Investments shall be selected in a manner
that seeks to ensure the preservation of capital in the District’s overall
portfolio. This will be accomplished through a program of
diversification and maturity limitations, more fully described in
Section 13, in order that potential losses on individual securities do
not exceed the income generated from the remainder of the portfolio.
4.1.2 Liquidity: The District’s investment portfolio will remain
sufficiently liquid to enable the District to meet all operating
requirements which might be reasonably anticipated. Securities
should mature concurrent with cash needs to meet anticipated
demands.
4.1.3 Return on Investments: The District’s investment portfolio shall be
designed with the objective of attaining the best yield or returns on
investments, taking into account the investment risk constraints and
liquidity needs. Return on investment is of secondary importance
compared to the safety and liquidity objectives.
SECTION 5: PRUDENCE
5.1 The standard of prudence to be used by the designated representative shall
be the “prudent investor” standard and shall be applied in the context of
managing the overall portfolio. The meaning of the standard of prudent
investor is explained in CGC Section 53600.3, which states that “when
investing, reinvesting, purchasing, acquiring, exchanging, selling or
managing public funds, a trustee shall act with care, skill, 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
Investment Policy – May 2013
3
aims, to safeguard the principal and maintain the liquidity needs of the
agency.”
5.2 The Treasurer and delegated investment officers, acting in accordance with
District procedures and the Policy and exercising due diligence, shall be
relieved of personal responsibility for an individual security’s credit risk or
market price changes, provided deviations from expectations are reported in
a timely fashion and appropriate action is taken to control adverse
developments.
5.3 Investments shall be made with judgment and care - under circumstances
then prevailing - which persons of prudence, discretion and intelligence
exercise in the management of their own affairs, not for speculation, but for
investment, considering the probable safety of their capital as well as the
probable income to be derived.
SECTION 6.0: ETHICS AND CONFLICTS OF INTEREST
6.1 Officers and employees involved in the investment process shall refrain
from personal business activity that could conflict with proper execution of
the investment program, or which could impair their ability to make
impartial investment decisions. Employees and investment officials shall
disclose to the District’s General Manager any material financial interests in
financial institutions that conduct business with the District’s boundaries,
and they shall further disclose any large personal financial/investment
positions that could be related to the performance of the District.
SECTION 7: AUTHORIZED BROKER/DEALERS
7.1 The Treasurer will maintain a list of authorized broker/dealers and financial
institutions that are approved for investment purposes. Broker/dealers will
be selected for credit worthiness and must be authorized to provide
investment services in the State of California. These may include “primary”
dealers or regional dealers that qualify under Securities & Exchange
Commission Rule 15(C)3-1 (uniform net capital rule). No public deposit will
be made by the broker/dealer except in a qualified public depository as
established by the established state laws. Before a financial institution or
broker/dealer is used, they are subject to investigation and approval by the
Treasurer or his/her designated representative, and must submit the
following:
Investment Policy – May 2013
4
7.1.1 Certification of having read and understood this investment policy
resolution and agreeing to comply with the District’s investment
policy;
7.1.2 Proof of Federal Investment Regulatory Authority certification;
7.1.3 Proof of State of California registration;
7.1.4 Audited financial statements for the institution’s three (3) most recent
fiscal years;
7.1.5 References of other public-sector clients that similar services are
provided to.
7.2 If a third party investment advisor is authorized to conduct investment
transactions on the District’s behalf, the investment advisor may use their
own list of approved independent broker/dealers and financial institutions.
The investment advisor’s approved list must be made available to the
District upon request.
SECTION 8: AUTHORIZED INVESTMENTS
8.1 The District is provided a broad spectrum of eligible investments under the
CGC Sections 53601 et seq. Authorized investments shall also include, in
accordance with CGC section 16429.1 et seq., investments into the Local
Agency Investment Fund (LAIF) and the Orange County Treasurer’s
Commingled Investment Pool in accordance with CGC section 53684.
Within the investments permitted by the CGC, the District seeks to further
restrict eligible investment to the investments listed in Section 8.3 below.
Percentage holding limits listed in this section apply at the time the security
is purchased. Ratings, where shown, specify the minimum credit rating
category required at purchased without regard to +/- or 1,2,3 modifiers, if
any.
8.2 The purchase of any investment permitted by the CGC, but not listed as an
authorized investment in this Policy is prohibited without the prior approval
of the Board of Directors.
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8.3 Within the context of these limitations, the following investments are
authorized:
TABLE 1
Permitted Investments*/
Deposits
CA Government Code
% of Portfolio Limits /
Maturity Limits
YLWD
% of Portfolio Limits /
Maturity Limits
Bank Deposits#
No % limit, 5 years
No % limit, 5 years
CD Placement Service#
30% limit, 5 years
30% limit, 5 years
Local Agency Investment Fund
(LAIF)^
No % or maturity limit
No % or maturity limit
County Pooled Investment Funds^
No % or maturity limit
No % or maturity limit
Joint Powers Authority Funds
(CalTRUST & CAMP)^
No % or maturity limit
No % or maturity limit
U.S. Treasury Obligations
No % limit, 5 years
No % limit, 5 years
U.S. Agency Obligations
No % limit, 5 years
No % limit, 5 years
Negotiable Certificates of Deposit#
30% portfolio, 5 years
30% portfolio, 5 years
Money Market Funds*
20%, 10% per issuer, no limit
20%, 10% per issuer, no limit
Medium-Term (or Corporate) Notes*
30% portfolio, 5 years
30% portfolio, 5 years
Bankers Acceptances*
40%, 30% per issuer, 180
days
10% max, 5% per issuer, 180
days
Commercial Paper*
25%, 10% per issuer, 270
days
25% max, 5% per issuer, 270
days
* Please see Appendix A for more detailed descriptions and additional restrictions
^ Please see Section 10 for additional restrictions
# Please see Section 11 for additional restrictions
Investment Policy – May 2013
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SECTION 9: REVIEW OF INVESTMENT PORTFOLIO
9.1 The securities held by the District must be in compliance with Section 8
Authorized Investments at the time of purchase. The Treasurer shall at least
quarterly review the portfolio to verify that all securities are in compliance
with Section 8 Authorized Investments. In the event a security held by the
District is subject to a credit rating change that brings it below the minimum
credit ratings specified in Appendix A Authorized Investments, the
Treasurer should notify the Finance-Accounting Committee - and through
the Committee’s minutes, the Board - of the change. The course of action to
be followed will then be decided on a case-by-case basis, considering such
factors as the reason for the change, prognosis for recovery or further rate
drops, and the market price of the security.
SECTION 10: INVESTMENT POOLS
10.1 A thorough investigation of any investment pool or mutual fund is required
prior to investing, and on a continual basis. The investigation will, at a
minimum, obtain the following information:
10.1.1 A description of eligible investment securities, and a written
statement of investment policy and objectives;
10.1.2 A description of interest calculations and how it is distributed, and
how gains and losses are treated;
10.1.3 A description of how the securities are safeguarded (included the
settlement processes), and how often the securities are priced and the
program audited;
10.1.4 A description of who may invest in the program, how often and what
size deposit and withdrawal are allowed;
10.1.5 A schedule for receiving statements and portfolio listings;
10.1.6 Are reserves, retained earnings, etc. utilized by the pool/fund;
10.1.7 A fee schedule and when and how it is assessed;
Investment Policy – May 2013
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10.1.8 Is the pool/fund eligible for bond proceeds and/or will it accept such
proceeds.
SECTION 11: COLLATERALIZATION
11.1 Bank Deposits: Under provisions of the CGC, California banks and savings
and loan associations are required to secure the District’s deposits by
pledging eligible securities with a value of 110% of principal and accrued
interest. State law also allows financial institutions to secure District
deposits by pledging first trust deed mortgage notes having a value of 150%
of the District’s total deposits.
11.2 Waiver of Security: The Treasurer, at his/her discretion and in accordance
with CGC section 53653, may waive security for the portion of any deposits
as is insured pursuant to federal law.
SECTION 12: SAFEKEEPING AND CUSTODY
12.1 All security transactions entered into by the District shall be conducted on a
delivery-versus-payment basis. Securities will be held by a third party
custodian designated by the Treasurer and evidenced by safekeeping
receipts. The only exception to the foregoing shall be depository accounts
and securities purchases made with (i) local government investment pools,
and (ii) money market mutual funds, since those purchased securities are not
deliverable.
SECTION 13: DIVERSIFICATION AND MAXIMUM MATURITIES
13.1 The District will diversify its investments by security type and institution.
With the exception of U.S. Treasuries, U.S. Agency Securities, FDIC
Insured Certificates of Deposit and authorized pools, no more than 30% of
the District’s total investment portfolio will be invested in a single security
type or with a single financial institution.
13.2 To the extent possible, the District will attempt to match its investments with
anticipated cash flow requirements. Unless matched to a specific cash flow
and approved in advance by the Board of Directors, the District will not
directly invest in securities maturing more than 5 years from the date of
purchase.
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SECTION 14: INTERNAL CONTROLS
14.1 The external auditors will annually review the investments and general
activities associated with the investment program. This review will provide
internal control by assuring compliance with the Investment Policy and
District policies and procedures.
SECTION 15: PERFORMANCE STANDARDS
15.1 The investment portfolio will be designed with the objective of obtaining a
rate of return throughout budgetary and economic cycles, commensurate
with the investment risk constraints and the cash flow needs.
15.2 The District’s investment strategy is passive. The performance of the
District’s investment portfolio will be evaluated and compared to an
appropriate benchmark in order to assess the success of the investment
portfolio relative to the District’s Safety, Liquidity and Return on
Investments objectives. This review will be conducted annually with the
Finance-Accounting Committee.
SECTION 16: REPORTING
16.1 Subject to CGC sections 53607 and 53646(b), the Treasurer will provide
monthly investment reports to the District’s Finance-Accounting Committee
(and through the Committee’s minutes, to the Board of Directors) and
quarterly reports to the Board of Directors which provide a clear picture of
the status of the current investment portfolio. The reports shall comply with
the reporting requirements of CGC sections 53607 and 53646(b),
respectively.
SECTION 17: INVESTMENT POLICY ADOPTION
17.1 The District’s Investment Policy will be adopted by resolution of the Board
of Directors. The policy will be reviewed on an annual basis and
modification, if any, must be approved by the Board of Directors.
Investment Policy – May 2013
9
APPENDIX “A”
DESCRIPTION OF AUTHORIZED INVESTMENTS AND RESTRICTIONS
The following descriptions of authorized investments, maximum maturities and
limits are included here to assist in the administration of this policy.
1) BANK DEPOSITS
The District may make bank deposits in accordance with California
Government Code section 53630 et seq., which requires collateral. Per
California Government Code Section, there are three classes of deposits: (a)
inactive deposits, (b) active deposits and (c) interest-bearing active deposits.
The collateral requirements apply to both active deposits (checking and
savings accounts) and inactive deposits (non-negotiable time certificates of
deposit). The maximum maturity shall be five years. No limit will be
placed on the percentage total invested in this category.
2) CD PLACEMENT SERVICE – Government Code Sections 53601.8 and
53653.8
The District may invest in collateralized certificates of deposits in
accordance with the requirements in California Government Code Sections
53601.8 and 53635.8. Purchases of certificates of deposit pursuant to
Government Code Sections 53601.8, 53653.8, and 53601 shall not, in total,
exceed 30 percent of District’s investment portfolio. The maximum
maturity is limited to five years.
3) THE STATE LOCAL AGENCY INVESTMENT FUND (LAIF) –
Government Code Section 16429.1
The LAIF is a special fund in the California State Treasury and an
investment alternative for California’s local governments and special
districts created and governed pursuant to CGC Section 16429.1 et seq. and
managed by the State Treasurer’s Office. The District, with the consent of
the Board of Directors, is authorized to remit money not required for the
District’s immediate need, to the State Treasurer for deposit in this fund for
the purpose of investment. Principal may be withdrawn on one day’s notice.
The fees charged by LAIF are limited by statute. Investment of District
funds in LAIF shall be subject to investigation and due diligence prior to
Investment Policy – May 2013
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investing, and on a continual basis to a level of review described in Section
10 Investment Pools. No limit will be placed on the percentage total in this
category.
4) ORANGE COUNTY TREASURER’S COMMINGLED INVESTMENT
POOL (OCCIP) – Government Code Section 53684
The OCCIP is a money market investment pool managed by the Orange
County Treasurer’s Office. OCCIP is more fully described in the glossary at
Appendix B. 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
described in Section 10 Investment Pools. There is no maturity limit. No
limit will be placed on the percentage total in this category.
5) THE INVESTMENT TRUST OF CALIFORNIA (CALTRUST) –
Government Code Section 53601(p)
The Investment Trust of California (CalTRUST) is a local government
investment pool organized as a joint powers authority pursuant to California
Government Code Section 6509.7. Wells Capital Management, a wholly-
owned subsidiary of Wells Fargo, is the portfolio manager for each of the
CalTRUST funds. Investment of District funds in CalTRUST shall be
subject to investigation and due diligence prior to investing, and on a
continual basis to a level of review described in Section 10 Investment
Pools. No limit will be placed on the percentage total in this category.
6) CALIFORNIA ASSSET MANAGEMENT PROGRAM (CAMP) –
Government Code Section 53601(p)
The Trust is currently governed by a Board of five Trustees, all of whom are
officials or employees of Public Agencies. The Trustees are responsible for
setting overall policies and procedures for the Trust. The Program’s
Investment Adviser and Administrator is Public Financial Management, Inc.
The amounts deposited in this category shall be limited to bond proceeds
and are to be invested for the purpose of arbitrage management only. The
District has no funds invested in CAMP 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 described in Section
10 Investment Pools. Proceeds may be invested in the Treasury Portfolio
Investment Policy – May 2013
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and/or the Money Market Portfolio. There is no maturity limit. No limit
will be placed on the percentage total in this category.
7) U.S. TREASURY OBLIGATIONS – Government Code Section 53601(b)
United States Treasury notes, bonds, bills or certificates of indebtedness, or
those for which the faith and credit of the United States are pledged for the
payment of principal and interest. The maximum maturity shall be limited
to five years. No limit will be placed on the percentage total invested in this
category.
8) U.S. AGENCY OBLIGATIONS – Government Code Section 53601(f)
Federal agency or United States government-sponsored enterprise senior
debt obligations, participations, mortgaged-backed securities or other
instruments, including those issued by or fully guaranteed as to principal and
interest by Federal agencies or United States government-sponsored
enterprises. Examples of these securities include Federal National Mortgage
Association, Federal Farm Credit Bank, Federal Home Loan Mortgage
Corporation and Federal Home Loan Bank. The maximum maturity shall be
limited to five years with no limit placed on the percentage total in this
investment category.
9) NEGOTIABLE CERTIFICATES OF DEPOSIT – Government Code
Section 53601(i)
Investments are limited to deposits issued by a nationally or state-chartered
bank, a savings association or a federal association (as defined by Section
5102 of the Financial Code), a state or federal credit union, or by a state-
licensed branch of a foreign bank.
Individual investments shall be limited to Federal Deposit Insurance
Corporation-insured limits of $250,000. Purchases of certificates of deposit
pursuant to Government Code Sections 53601.8, 53653.8, and 53601 shall
not, in total, exceed 30 percent of District’s investment portfolio. The
maximum maturity is limited to five years.
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10) MONEY MARKET FUNDS – Government Code Section 53601(l)(2)
Shares of a beneficial interest issued by diversified management
companies that are money market funds registered with the Securities and
Exchange Commission.
The company shall have met either of the following criteria: (A) attained
the highest ranking or the highest letter and numerical rating provided by
not less than two nationally recognized rating services and (B) retained an
investment adviser registered or exempt from registration with the
Securities and Exchange Commission with not less than five years of
experience managing money market mutual funds with assets under
management in excess of five hundred million dollars ($500,000,000).
There is no maturity limit. A maximum of 20 percent of the portfolio may
be invested in this category, and a maximum of 10 percent of the portfolio
may be invested in any single issuer.
If the District has funds invested in a money market fund, a copy of the
fund’s information statement shall be maintained on file. In addition, the
Treasurer should review the fund’s summary holdings on a quarterly basis.
11) MEDIUM-TERM (OR CORPORATE) NOTES – Government Code
Section 53601(k)
Medium-term notes are defined as all corporate and depository institution
debt securities with a maximum remaining maturity of five years or less.
The corporation must be domestic, the notes must be domestic and the
notes must be issued in the United States. The corporation must be rated A
or its equivalent or better by a nationally recognized rating service. The
maximum maturity is limited to five years and the maximum percentage
allowable for investment is 30 percent of the investment portfolio in the
aggregate.
12) BANKERS’ ACCEPTANCES – Government Code Section 53601 (g)
Bankers’ acceptances, otherwise known as bills of exchange or time drafts,
are drawn on and accepted by a commercial bank. Purchases are limited to
bankers’ acceptances issued by domestic or foreign banks, which are
eligible for purchase by the Federal Reserve System. Eligible bankers’
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acceptances are restricted to issuing financial institutions with a short-term
debt rating of at least “A-1” or its equivalent by a nationally recognized
rating service. The maximum term may not exceed 180 days and the
maximum percentage allowable for investment is 10 percent of the
portfolio in the aggregate, and 5% for an individual issuer.
13) COMMERCIAL PAPER – Government Code Section 53601(h)
Commercial paper rated the highest ranking or of the highest letter and
number ratings as provided for by a nationally recognized rating service.
The entity that issues the commercial paper shall meet either of the
following two sets of criteria: (1) The corporation shall be organized and
operating within the United States, shall have total assets in excess of
$500,000,000, and shall have debt, other than commercial paper, if any,
that is rated A or higher by a nationally recognized rating service. (2) The
corporation shall be organized within the United States as a special
purpose corporation, trust, or limited liability company, has program wide
credit enhancements including, but not limited to, over collateralization,
letters of credit, or surety bond; has commercial paper that is rated “A-1”
or higher, or equivalent by a nationally recognized statistical-rating
organization. Eligible commercial paper may not exceed 270 days’
maturity and may not represent more than the 25 percent of the investment
portfolio in the aggregate, and 5% for an individual issuer.
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APPENDIX “B”
GLOSSARY
AGENCIES: Federal agency securities and/or Government-sponsored enterprises.
ASKED: The price at which securities are offered.
BANKERS’ ACCEPTANCE (BA): A draft or bill or exchange accepted by a
bank or trust company. The accepting institution guarantees payment of the bill, as
well as the issuer.
BENCHMARK: A comparative base for measuring the performance or risk
tolerance of the investment portfolio. A benchmark should represent a close
correlation to the level of risk and the average duration of the portfolio’s
investments.
BID: The price offered by a buyer of securities. (When you are selling securities,
you ask for a bid.) See Offer.
BROKER: A broker brings buyers and sellers together for a commission.
CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity
evidenced by a Certificate. Large-denomination CD’s are typically negotiable.
COLLATERAL: Securities, evidence of deposit or other property, which a
borrower pledges to secure repayment of a loan. Also refers to securities pledged
by a bank to secure deposits of public monies.
COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official
annual report of the District. It includes five combined statements for each
individual fund and account group prepared in conformity with GAAP. It also
includes supporting schedules necessary to demonstrate compliance with finance-
related legal and contractual provisions, extensive introductory material, and a
detailed Statistical Section.
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COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the
bondholder on the bond’s face value. (b) A certificate attached to a bond
evidencing interest due on a payment date.
DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions,
buying and selling for his own account.
DEBENTURE: A bond secured only by the general credit of the issuer.
DELIVERY VERSUS PAYMENT: There are two methods of delivery of
securities: delivery versus payment and delivery versus receipt. Delivery versus
payment is delivery of securities with an exchange of money for the securities.
Delivery versus receipt is delivery of securities with an exchange of a signed
receipt for the securities.
DERIVATIVES: (1) Financial instruments whose return profile is linked to, or
derived from, the movement of one or more underlying index or security, and may
include a leveraging factor, or (2) financial contracts based upon notional amounts
whose value is derived from an underlying index or security (interest rates, foreign
exchange rates, equities or commodities).
DISCOUNT: The difference between the cost price of a security and its maturity
when quoted at lower than face value. A security selling below original offering
price shortly after sale also is considered to be at a discount.
DISCOUNT SECURITIES: Non-interest bearing money market instruments that
are issued a discount and redeemed at maturity for full face value (e.g., U.S.
Treasury Bills.)
DIVERSIFICATION: Dividing investment funds among a variety of securities
offering independent returns.
DURATION: A measure of the sensitivity of the price (the value of principal) of a
fixed-income investment to a change in interest rates. Duration is expressed as a
number of years. Rising interest rates mean falling bond prices, while declining
interest rates mean rising bond prices.
FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to
supply credit to various classes of institutions and individuals, e.g., S&L’s, small
business firms, students, farmers, farm cooperatives, and exporters.
Investment Policy – May 2013
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FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal
agency that insures bank deposits, currently up to $250,000 per entity.
FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded.
This rate is currently pegged by the Federal Reserve through open-market
operations.
FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale
banks (currently 12 regional banks), which lend funds and provide correspondent
banking services to member commercial banks, thrift institutions, credit unions and
insurance companies. The mission of the FHLBs is to liquefy the housing related
assets of its members who must purchase stock in their district Bank.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA, like
GNMA was chartered under the Federal National Mortgage Association Act in
1938. FNMA is a federal corporation working under the auspices of the
Department of Housing and Urban Development (HUD). It is the largest single
provider of residential mortgage funds in the United States. Fannie Mae, as the
corporation is called, is a private stockholder-owned corporation. The
corporation’s purchases include a variety of adjustable mortgages and second
loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid
and are widely accepted. FNMA assumes and guarantees that all security holders
will receive timely payment of principal and interest.
FEDERAL RESERVE SYSTEM: The central bank of the United States created
by Congress and consisting of a seven member Board of Governors in Washington,
D.C., 12 regional banks and about 5,700 commercial banks are members of the
system.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or
Ginnie Mae): Securities influencing the volume of bank credit guaranteed by
GNMA and issued by mortgage bankers, commercial banks, savings and loan
associations, and other institutions. Security holder is protected by full faith and
credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA
or FHA mortgages. The term “pass-throughs” is often used to describe Ginnie
Maes.
LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into
cash without a substantial loss of value. In the money market, a security is said to
Investment Policy – May 2013
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be liquid if the spread between bid and asked prices is narrow and reasonable size
can be done at those quotes.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all
funds from political subdivisions that are placed in the custody of the State
Treasurer for investment and reinvestment.
MARKET VALUE: The price at which a security is trading and could
presumably be purchased or sold.
MASTER REPURCHASE AGREEMENT: A written contract covering all
future transactions between the parties to repurchase—reverse repurchase
agreements that establishes each party’s rights in the transactions. A master
agreement will often specify, among other things, the right of the buyer-lender to
liquidate the underlying securities in the event of default by the seller borrower.
MATURITY: The date upon which the principal or stated value of an investment
becomes due and payable.
MONEY MARKET: The market in which short-term debt instruments (bills,
commercial paper, bankers’ acceptances, etc.) are issued and traded.
OFFER: The price asked by a seller of securities. (When you are buying
securities, you ask for an offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases and sales of government and
certain other securities in the open market by the New York Federal Reserve Bank
as directed by the FOMC in order to influence the volume of money and credit in
the economy. Purchases inject reserves into the bank system and stimulate growth
of money and credit; sales have the opposite effect. Open market operations are the
Federal Reserve’s most important and most flexible monetary policy tool.
PORTFOLIO: Collection of securities held by an investor.
PRIMARY DEALER: A group of government securities dealers who submit
daily reports of market activity and positions and monthly financial statements to
the Federal Reserve Bank of New York and are subject to its informal oversight.
Primary dealers include Securities and Exchange Commission (SEC)-registered
securities broker-dealers, banks, and a few unregulated firms.
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PRUDENT PERSON RULE: An investment standard. In some states the law
requires that a fiduciary, such as a trustee, may invest money only in a list of
securities selected by the custody state—the so-called legal list. In other states the
trustee may invest in a security if it is one which would be bought by a prudent
person of discretion and intelligence who is seeking a reasonable income and
preservation of capital.
QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not
claim exemption from the payment of any sales or compensating use or ad valorem
taxes under the laws of this state, which has segregated for the benefit of the
commission eligible collateral having a value of not less than its maximum liability
and which has been approved by the Public Deposit Protection Commission to
hold public deposits.
RATE OF RETURN: The yield obtainable on a security based on its purchase
price or its current market price. This may be the amortized yield to maturity on a
bond the current income return.
REPURCHASE AGREEMENT (REPO): A holder of securities sells these
securities to an investor with an agreement to repurchase them at a fixed price on a
fixed date. The security “buyer” in effect lends the “seller” money for the period of
the agreement, and the terms of the agreement are structured to compensate him
for this.
SAFEKEEPING: A service to customers rendered by banks for a fee whereby
securities and valuables of all types and descriptions are held in the bank’s vaults
for protection.
SECONDARY MARKET: A market made for the purchase and sale of
outstanding issues following the initial distribution.
SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to
protect investors in securities transactions by administering securities legislation.
SEC RULE 15(C)3-1: See Uniform Net Capital Rule.
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STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises
(FHLB, FNMA, SLMA, etc.) and Corporations, which have imbedded options
(e.g., call features, step-up coupons, floating rate coupons, derivative-based
returns) into their debt structure. Their market performance is impacted by the
fluctuation of interest rates, the volatility of the imbedded options and shifts in the
shape of the yield curve.
TREASURY BILLS: A non-interest bearing discount security issued by the U.S.
Treasury to finance the national debt. Most bills are issued to mature in three
months, six months, or one year.
TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued
as direct obligations of the U.S. Government and having initial maturities of more
than 10 years.
TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities
issued as direct obligations of the U.S. Government and having initial maturities
from two to 10 years.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission
requirement that member firms as well as nonmember broker-dealers in securities
maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called
net capital rule and net capital ratio. Indebtedness covers all money owed to a firm,
including margin loans and commitments to purchase securities, one reason new
public issues are spread among members of underwriting syndicates. Liquid capital
includes cash and assets easily converted into cash.
YIELD: The rate of annual income return on an investment, expressed as a
percentage. (a) INCOME YIELD is obtained by dividing the current dollar income
by the current market price for the security. (b) NET YIELD or YIELD TO
MATURITY is the current income yield minus any premium above par or plus any
discount from par in purchase price, with the adjustment spread over the period
from the date of purchase to the date of maturity of the bond.
INVESTMENT POLICY
BOARD OF DIRECTORS
Gary T. Melton, President
Robert R. Kiley, Vice President Michael J. Beverage, Board Member
Ric Collett, Board Member Phil Hawkins, Board Member
Steven R. Conklin, Acting General Manager
May 2013
TABLE OF CONTENTS
Section 1 Policy
Section 2 Scope
Section 3 Delegation of Authority
Section 4 Investment Objectives
Section 5 Prudence
Section 6 Ethics and Conflicts of Interest
Section 7 Authorized Broker/Dealers
Section 8 Authorized Investments
Section 9 Review of Investment Portfolio
Section 10 Investment Pools
Section 11 Collateralization
Section 12 Safekeeping and Custody
Section 13 Diversification and Maximum Maturities
Section 14 Internal Controls
Section 15 Performance Standards
Section 16 Reporting
Section 17 Investment Policy Adoption
Appendix “A” Description of Authorized Investments and Restrictions
Appendix “B” Glossary
Investment Policy – May 2013
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SECTION 1: POLICY
1.1 It is the policy of the Yorba Linda Water District (“District”) 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.
1.2 The purpose of this policy is to provide guidelines for the prudent
investment of funds of the Yorba Linda Water District (“District”) and to
outline the policies for maximizing the efficiency of the District’s cash
management. The District’s goal is to enhance the economic status of the
District consistent with the prudent protection of the District’s investments.
This investment policy has been prepared in conformance with all pertinent
existing laws of the State of California.
SECTION 2: SCOPE
2.1 This Investment Policy applies to all funds and investment activities of the
District, except for the proceeds from capital project financing instruments,
which are invested in accordance with provisions of their specific
documents. These funds are accounted for as Enterprise Funds and are
identified in the District’s Comprehensive Annual Financial Report.
SECTION 3: DELEGATION OF AUTHORITY
3.1 The authority of the Board of Directors to invest funds is derived from
Section 53601 of the California Government Code (“CGC”). Section 53607
of the CGC grants the Board of Directors the authority to delegate that
authority, for a one-year period, to the District’s Treasurer. Therefore,
management responsibility for the investment program is hereby delegated
to the District’s Treasurer, who shall be responsible for all transactions
undertaken and shall establish a system of controls to regulate the activities
of subordinate officials and their procedures in the absence of the Treasurer.
The Treasurer shall establish procedures for the management of investment
activities, including the activities of staff consistent with this Policy.
3.2 The Treasurer may retain the services of an outside investment advisor or
manager as approved by the Board to assist with the District’s investment
program. Any investment advisor selected shall make all investment
Investment Policy – May 2013
2
decisions and transactions in strict accordance with State law, and this
Policy.
SECTION 4: INVESTMENT OBJECTIVES
4.1 The primary objectives, in priority order, of the District’s investment
activities shall be:
4.1.1 Safety: Safety and preservation of principal is the foremost objective
of the investment program. Investments shall be selected in a manner
that seeks to ensure the preservation of capital in the District’s overall
portfolio. This will be accomplished through a program of
diversification, more fully described in Section 11, and maturity
limitations, more fully described in section 12Section 13, in order that
potential losses on individual securities do not exceed the income
generated from the remainder of the portfolio.
4.1.2 Liquidity: The District’s investment portfolio will remain
sufficiently liquid to enable the District to meet all operating
requirements which might be reasonably anticipated. Securities
should mature concurrent with cash needs to meet anticipated
demands.
4.1.3 Return on Investments: The District’s investment portfolio shall be
designed with the objective of attaining the best yield or returns on
investments, taking into account the investment risk constraints and
liquidity needs. Return on investment is of secondary importance
compared to the safety and liquidity objectives.
SECTION 5: PRUDENCE
5.1 The standard of prudence to be used by the designated representative shall
be the “prudent investor” standard and shall be applied in the context of
managing the overall portfolio. The meaning of the standard of prudent
investor is explained in CGC Section 53600.3, which states that “when
investing, reinvesting, purchasing, acquiring, exchanging, selling or
managing public funds, a trustee shall act with care, skill, 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
Investment Policy – May 2013
3
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.”
5.2 The Treasurer and delegated investment officers, acting in accordance with
District procedures and the Policy and exercising due diligence, shall be
relieved of personal responsibility for an individual security’s credit risk or
market price changes, provided deviations from expectations are reported in
a timely fashion and appropriate action is taken to control adverse
developments.
5.3 Investments shall be made with judgment and care - under circumstances
then prevailing - which persons of prudence, discretion and intelligence
exercise in the management of their own affairs, not for speculation, but for
investment, considering the probable safety of their capital as well as the
probable income to be derived.
SECTION 6.0: ETHICS AND CONFLICTS OF INTEREST
6.1 Officers and employees involved in the investment process shall refrain
from personal business activity that could conflict with proper execution of
the investment program, or which could impair their ability to make
impartial investment decisions. Employees and investment officials shall
disclose to the District’s General Manager any material financial interests in
financial institutions that conduct business with the District’s boundaries,
and they shall further disclose any large personal financial/investment
positions that could be related to the performance of the District.
SECTION 7: AUTHORIZED BROKER/DEALERS
7.1 The Treasurer will maintain a list of authorized broker/dealers and financial
institutions that are approved for investment purposes. Broker/dealers will
be selected for credit worthiness and must be authorized to provide
investment services in the State of California. These may include “primary”
dealers or regional dealers that qualify under Securities & Exchange
Commission Rule 15(C)3-1 (uniform net capital rule). No public deposit will
be made by the broker/dealer except in a qualified public depository as
established by the established state laws. Before a financial institution or
broker/dealer is used, they are subject to investigation and approval by the
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4
Treasurer or his/her designated representative, and must submit the
following:
7.1.1 Certification of having read and understood this investment policy
resolution and agreeing to comply with the District’s investment
policy;
7.1.2 Proof of Federal Investment Regulatory Authority certification;
7.1.3 Proof of State of California registration;
7.1.4 Audited financial statements for the institution’s three (3) most recent
fiscal years;
7.1.5 References of other public-sector clients that similar services are
provided to.
7.2 If a third party investment advisor is authorized to conduct investment
transactions on the District’s behalf, the investment advisor may use their
own list of approved independent broker/dealers and financial institutions.
The investment advisor’s approved list must be made available to the
District upon request.
SECTION 8: AUTHORIZED INVESTMENTS
8.1 The District is provided a broad spectrum of eligible investments under the
CGC Sections 53684 and 53601 et seq.53601 et seq. Authorized
investments shall also include, in accordance with CGC section 16429.1 et
seq., investments into the Local Agency Investment Fund (LAIF) and the
Orange County Treasurer’s Commingled Investment Pool in accordance
with CGC section 53684. Within the investments permitted by the CGC, the
District seeks to further restrict eligible investment to the investments listed
in Section 8.3 below. Percentage holding limits listed in this section apply at
the time the security is purchased. Ratings, where shown, specify the
minimum credit rating category required at purchased without regard to +/-
or 1,2,3 modifiers, if any.
8.2 The purchase of any investment permitted by the CGC, but not listed as an
authorized investment in this Policy is prohibited without the prior approval
of the Board of Directors.
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8.3 Within the context of these limitations, the following investments are
authorized:
TABLE 1
Permitted Investments*/
Deposits
CA Government Code
% of Portfolio Limits /
Maturity Limits
YLWD
% of Portfolio Limits /
Maturity Limits
Collateralized Bank Deposits#
No % limit, 5 years
No % limit, 5 years
Certificates of DepositCD Placement
Service#
No 30% limit, 5 years
No 30% limit, 5 years
Local Agency Investment Fund
(LAIF)^
No % or maturity limit
No % or maturity limit
County Pooled Investment Funds^
No % or maturity limit
No % or maturity limit
Joint Powers Authority Funds
(CalTRUST & CAMP)^
No % or maturity limit
No % or maturity limit
U.S. Treasury Obligations
No % limit, 5 years
No % limit, 5 years
U.S. Agency Obligations
No % limit, 5 years
No % limit, 5 years
Negotiable Certificates of Deposit#
30% portfolio, 5 years
30% portfolio, 5 years
Money Market Funds*
20%, 10% per issuer, no limit
20%, 10% per issuer, no limit
Medium-Term (or Corporate) Notes*
30% portfolio, 5 years
30% portfolio, 5 years
Bankers Acceptances*
40%, 30% per issuer, 180
days
10% max, 5% per issuer, 180
days
Commercial Paper*
25%, 10% per issuer, 270
25% max, 5% per issuer, 270
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days
days
* Please see Appendix A for more detailed descriptions and additional restrictions
^ Please see Section 10 for additional restrictions
# Please see Section 11 for additional restrictions
SECTION 9: REVIEW OF INVESTMENT PORTFOLIO
9.1 The securities held by the District must be in compliance with Section 8
Authorized Investments at the time of purchase. The Treasurer shall at least
quarterly review the portfolio to verify that all securities are in compliance
with Section 8 Authorized Investments. In the event a security held by the
District is subject to a credit rating change that brings it below the minimum
credit ratings specified in Section 8Appendix A Authorized Investments, the
Treasurer should notify the Finance-Accounting Committee - and through
the Committee’s minutes, the Board - of the change. The course of action to
be followed will then be decided on a case -by-case basis, considering such
factors as the reason for the change, prognosis for recovery or further rate
drops, and the market price of the security.
SECTION 10: INVESTMENT POOLS
10.1 A thorough investigation of any investment pool or mutual fund is required
prior to investing, and on a continual basis. The investigation will, at a
minimum, obtain the following information:
10.1.1 A description of eligible investment securities, and a written
statement of investment policy and objectives;
10.1.2 A description of interest calculations and how it is distributed, and
how gains and losses are treated;
10.1.3 A description of how the securities are safeguarded (included the
settlement processes), and how often the securities are priced and the
program audited;
10.1.4 A description of who may invest in the program, how often and what
size deposit and withdrawal are allowed;
10.1.5 A schedule for receiving statements and portfolio listings;
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10.1.6 Are reserves, retained earnings, etc. utilized by the pool/fund;
10.1.7 A fee schedule and when and how it is assessed;
10.1.8 Is the pool/fund eligible for bond proceeds and/or will it accept such
proceeds.
SECTION 11: COLLATERALIZATION
11.1 Bank Deposits: Under provisions of the CGC, California banks and savings
and loan associations are required to secure the District’s deposits by
pledging governmenteligible securities with a value of 110% of principal
and accrued interest. State law also allows financial institutions to secure
District deposits by pledging first trust deed mortgage notes having a value
of 150% of the District’s total deposits.
11.2 CertificatesWaiver of Deposit/Negotiable Certificates of
DepositSecurity: The market value of securities that underlay certificates
of deposit shall be valued at 110% of the market value of principal and
accrued interest. The Treasurer, at his/her discretion and in accordance with
CGC section 53653, may waive the collateral requirementsecurity for the
portion of any deposits upas is insured pursuant to the maximum dollar
amount which are covered by the Federal Deposit Insurance
Corporationfederal law.
SECTION 12: SAFEKEEPING AND CUSTODY
12.1 All security transactions entered into by the District shall be conducted on a
delivery-versus-payment (DVP) basis. Securities will be held by a third
party custodian designated by the Treasurer and evidenced by safekeeping
receipts. The only exception to the foregoing shall be depository accounts
and securities purchases made with (i) local government investment pools,
and (ii) money market mutual funds, since those purchased securities are not
deliverable.
SECTION 13: DIVERSIFICATION AND MAXIMUM MATURITIES
13.1 The District will diversify its investments by security type and institution.
With the exception of U.S. Treasuries, U.S. Agency Securities, FDIC
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Insured Certificates of Deposit and authorized pools, no more than 30% of
the District’s total investment portfolio will be invested in a single security
type or with a single financial institution.
13.2 To the extent possible, the districtDistrict will attempt to match its
investments with anticipated cash flow requirements. Unless matched to a
specific cash flow and approved in advance by the Board of Directors, the
District will not directly invest in securities maturing more than 5 years from
the date of purchase.
SECTION 14: INTERNAL CONTROLS
14.1 The external auditors will annually review the investments and general
activities associated with the investment program. This review will provide
internal control by assuring compliance with the Investment Policy and
District policies and procedures.
SECTION 15: PERFORMANCE STANDARDS
15.1 The investment portfolio will be designed with the objective of obtaining a
rate of return throughout budgetary and economic cycles, commensurate
with the investment risk constraints and the cash flow needs.
15.2 The District’s investment strategy is passive. The performance of the
District’s investment portfolio will be evaluated and compared to an
appropriate benchmark in order to assess the success of the investment
portfolio relative to the District’s Safety, Liquidity and Return on
Investments objectives. This review will be conducted annually with the
Finance-Accounting Committee.
SECTION 16: REPORTING
16.1 Subject to the CGC Section 41004,sections 53607 and 53646(b), the
Treasurer will provide monthly investment reports to the District’s Finance-
Accounting Committee (and through the Committee’s minutes, to the Board
of Directors) and quarterly reports to the Board of Directors which provide a
clear picture of the status of the current investment portfolio. The report
should include comments on market conditions, discussions regarding
changes in portfolio balances and possible changes in the portfolio structure
going forward. Schedules in the monthly reports should include at a
Investment Policy – May 2013
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minimum the following: The reports shall comply with the reporting
requirements of CGC sections 53607 and 53646(b), respectively.
16.1.1 A list of individual securities held at the end of the previous reporting
period by authorized investment category;
16.1.2 Average life and final maturity of all investments listed;
16.1.3 Interest rates on said investments;
16.1.4 Par value, amortized book value and market value;
16.1.5 Percentage of the portfolio represented by each investment category.
SECTION 17: INVESTMENT POLICY ADOPTION
17.1 The District’s Investment Policy will be adopted by resolution of the Board
of Directors. The policy will be reviewed on an annual basis and
modification, if any, must be approved by the Board of Directors.
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APPENDIX “A”
DESCRIPTION OF AUTHORIZED INVESTMENTS AND RESTRICTIONS
The following descriptions of authorized investments, maximum maturities and
limits are included here to assist in the administration of this policy.
1) COLLATERALIZED BANK DEPOSITS
Cash will be deposited only in Federal Deposit Insurance Corporation or
Federal Savings and Loan Insurance Corporation (FSLIC) insured
institutions or fully collateralized certificates of deposit. Collateral for a
given investment must be 110 percent of principal for government securities
collateral and 150 percent of principal for first mortgage collateral. The
institution must maintain a net worth to asset ratio of at least 3.0 percent, and
a positive earnings record. The bank or savings and loan must be located in
California.The District may make bank deposits in accordance with
California Government Code section 53630 et seq., which requires
collateral. Per California Government Code Section, there are three classes
of deposits: (a) inactive deposits, (b) active deposits and (c) interest-bearing
active deposits. The collateral requirements apply to both active deposits
(checking and savings accounts) and inactive deposits (non-negotiable time
certificates of deposit). The maximum maturity shall be five years. No limit
will be placed on the percentage total invested in this category.
2) CERTIFICATES OF DEPOSITCD PLACEMENT SERVICE –
Government Code SectionSections 53601.8 and 53653.8
The District may invest in collateralized certificates of deposits issued by
commercial banks and savings and loans (Government Code Sections
53601(h) and 53635(h)). A written depository contract is requiredin
accordance with all institutions that hold District deposits. Securities placed
in a collateral pool must provide coverage for at least 110 percent of all
deposits that are placedthe requirements in the institution. Acceptable pooled
collateral is governed by California Government Code Section 53651. All
banks are required to provide the District with a regular statementSections
53601.8 and 53635.8. Purchases of certificates of pooled collateral. This
report will state that they are meeting the 110 percent collateral rule
(Government Code Section 53652(a)), a listing of all collateral with location
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and market value, plus an accountability of the total amount of deposits
secured by the pool.
Deposits of up to $250,000 are allowed in any institution that insures its
deposits with the FDIC, regardless of Moody’s Investors Service or Standard
and Poor’s Corporation ratings. As per section 53638 of the California
Government Code, any deposit pursuant to Government Code Sections
53601.8, 53653.8, and 53601 shall not, in total, exceed that total paid-up
capital and surplus of any depository bank, nor shall the deposit exceed the
total net worth of any institution. As long as deposits are within FDIC
limits, no limit will be placed on the percentage total invested in this
category30 percent of District’s investment portfolio. The maximum
maturity is limited to five years.
3) THE STATE LOCAL AGENCY INVESTMENT FUND (LAIF) –
Government Code Section 16429.1
The LAIF is a special fund in the California State Treasury and an
investment alternative for California’s local governments and special
districts created and governed pursuant to CGC Section 16429.1 et seq. and
managed by the State Treasurer’s Office. The District, with the consent of
the Board of Directors, is authorized to remit money not required for the
District’s immediate need, to the State Treasurer for deposit in this fund for
the purpose of investment. Principal may be withdrawn on one day’s notice.
The fees charged by LAIF are limited by statute. 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 described in Section
10 Investment Pools. No limit will be placed on the percentage total in this
category.
4) ORANGE COUNTY TREASURER’S
COMMINGELDCOMMINGLED INVESTMENT POOL (OCCIP) –
Government Code Section 53684
The OCCIP is a money market investment pool managed by the Orange
County Treasurer’s Office. OCCIP is more fully described in the glossary at
Appendix B. 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
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described in Section 10 Investment Pools. There is no maturity limit. No
limit will be placed on the percentage total in this category.
5) THE INVESTMENT TRUST OF CALIFORNIA (CALTRUST) –
Government Code Section 53601(p)
The Investment Trust of California (CalTRUST) is a local government
investment pool organized as a joint powers authority pursuant to California
Government Code Section 6509.7. Wells Capital Management, a wholly-
owned subsidiary of Wells Fargo, is the portfolio manager for each of the
CalTRUST funds. Investment of District funds in CalTRUST shall be
subject to investigation and due diligence prior to investing, and on a
continual basis to a level of review described in Section 10 Investment
Pools. No limit will be placed on the percentage total in this category.
6) CALIFORNIA ASSSET MANAGEMENT PROGRAM (CAMP) –
Government Code Section 53601(p)
The Trust is currently governed by a Board of five Trustees, all of whom are
officials or employees of Public Agencies. The Trustees are responsible for
setting overall policies and procedures for the Trust. The Program’s
Investment Adviser and Administrator is Public Financial Management, Inc.
The amounts deposited in this category shall be limited to bond proceeds
and are to be invested for the purpose of arbitrage management only. The
District has no funds invested in CAMP 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 described in Section
10 Investment Pools. Proceeds may be invested in the Treasury Portfolio
and/or the Money Market Portfolio. There is no maturity limit. No limit
will be placed on the percentage total in this category.
7) U.S. TREASURY OBLIGATIONS – Government Code Section 53601(b-d)
United States Treasury notes, bonds, bills or certificates of indebtedness, or
those for which the faith and credit of the United States are pledged for the
payment of principal and interest. The maximum maturity shall be limited
to five years. No limit will be placed on the percentage total invested in this
category.
8) U.S. AGENCY OBLIGATIONS – Government Code Section 53601(f)
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Federal agency or United States government-sponsored enterprise senior
debt obligations, participations, mortgaged-backed securities or other
instruments, including those issued by or fully guaranteed as to principal and
interest by Federal agencies or United States government-sponsored
enterprises. Examples of these securities include Federal National Mortgage
Association, Federal Farm Credit Bank, Federal Home Loan Mortgage
Corporation and Federal Home Loan Bank. The maximum maturity shall be
limited to five years with no limit placed on the percentage total in this
investment category.
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9) NEGOTIABLE CERTIFICATES OF DEPOSIT – Government Code
Section 53601(i)
Investments are limited to deposits issued by a nationally or state-chartered
bank, a savings association or a federal association (as defined by Section
5102 of the Financial Code), a state or federal credit union, or by a state -
licensed branch of a foreign bank.
Individual investments shall be limited to Federal Deposit Insurance
Corporation-insured limits of $250,000. Purchases of certificates of deposit
pursuant to Government Code Sections 53601.8, 53653.8, and 53601 shall
not, in total, exceed 30 percent of District’s investment portfolio. The
maximum maturity is limited to five years and the maximum percentage
allowable for investment is 30 percent of the investment portfolio in the
aggregate.
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10) MONEY MARKET FUNDS – Government Code Section 53601(l)(2)
Shares of a beneficial interest issued by diversified management
companies that are money market funds registered with the Securities and
Exchange Commission.
The company shall have met either of the following criteria: (A) attained
the highest ranking or the highest letter and numerical rating provided by
not less than two nationally recognized rating services and (B) retained an
investment adviser registered or exempt from registration with the
Securities and Exchange Commission with not less than five years of
experience managing money market mutual funds with assets under
management in excess of five hundred million dollars ($500,000,000).
There is no maturity limit. A maximum of 20 percent of the portfolio may
be invested in this category, and a maximum of 10 percent of the portfolio
may be invested in any single issuer.
If the District has funds invested in a money market fund, a copy of the
fund’s information statement shall be maintained on file. In addition, the
Treasurer should review the fund’s summary holdings on a quarterly basis.
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11) MEDIUM-TERM (OR CORPORATE) NOTES – Government Code
Section 53601(k)
Medium-term notes are defined as all corporate and depository institution
debt securities with a maximum remaining maturity of five years or less.
The corporation must be domestic, the notes must be domestic and the
notes must be issued in the United States. The corporation must be rated A
or its equivalent or better by a nationally recognized rating service. The
maximum maturity is limited to five years and the maximum percentage
allowable for investment is 30 percent of the investment portfolio in the
aggregate.
12) BANKERS’ ACCEPTANCES – Government Code Section 53601 (g)
Bankers’ acceptances, otherwise known as bills of exchange or time drafts,
are drawn on and accepted by a commercial bank. Purchases are limited to
bankers’ acceptances issued by domestic or foreign banks, which are
eligible for purchase by the Federal Reserve System. Eligible bankers’
acceptances are restricted to issuing financial institutions with a short-term
debt rating of at least ” “A-1” or its equivalent by a nationally recognized
rating service. The maximum term may not exceed 180 days and the
maximum percentage allowable for investment is 3010 percent of the
portfolio in the aggregate, and 5% for an individual issuer.
13) COMMERCIAL PAPER – Government Code Section 53601(h)
Commercial paper rated the highest ranking or of the highest letter and
number ratings as provided for by a nationally recognized rating service.
The entity that issues the commercial paper shall meet either of the
following two sets of criteria: (1) The corporation shall be organized and
operating within the United States, shall have total assets in excess of
$500,000,000, and shall issuehave debt, other than commercial paper, if
any, that is rated A or higher by a nationally recognized rating service. (2)
The corporation shall be organized within the United States as a special
purpose corporation, trust, or limited liability company, has program wide
credit enhancements including, but not limited to, over collateralization,
letters of credit, or surety bond; has commercial paper that is rated “A-1”
or higher, or equivalent by a nationally recognized statistical-rating
organization. Eligible commercial paper may not exceed 270 days’
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maturity and may not represent more than the 25 percent of the investment
portfolio in the aggregate, and 5% for an individual issuer.
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APPENDIX “B”
GLOSSARY
AGENCIES: Federal agency securities and/or Government-sponsored enterprises.
ASKED: The price at which securities are offered.
BANKERS’ ACCEPTANCE (BA): A draft or bill or exchange accepted by a
bank or trust company. The accepting institution guarantees payment of the bill, as
well as the issuer.
BENCHMARK: A comparative base for measuring the performance or risk
tolerance of the investment portfolio. A benchmark should represent a close
correlation to the level of risk and the average duration of the portfolio’s
investments.
BID: The price offered by a buyer of securities. (When you are selling securities,
you ask for a bid.) See Offer.
BROKER: A broker brings buyers and sellers together for a commission.
CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity
evidenced by a Certificate. Large-denomination CD’s are typically negotiable.
COLLATERAL: Securities, evidence of deposit or other property, which a
borrower pledges to secure repayment of a loan. Also refers to securities pledged
by a bank to secure deposits of public monies.
COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official
annual report of the District. It includes five combined statements for each
individual fund and account group prepared in conformity with GAAP. It also
includes supporting schedules necessary to demonstrate compliance with finance-
related legal and contractual provisions, extensive introductory material, and a
detailed Statistical Section.
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COUPON: (a) The annual rate of interest that a bond’s issuer promises to pay the
bondholder on the bond’s face value. (b) A certificate attached to a bond
evidencing interest due on a payment date.
DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions,
buying and selling for his own account.
DEBENTURE: A bond secured only by the general credit of the issuer.
DELIVERY VERSUS PAYMENT: There are two methods of delivery of
securities: delivery versus payment and delivery versus receipt. Delivery versus
payment is delivery of securities with an exchange of money for the securities.
Delivery versus receipt is delivery of securities with an exchange of a signed
receipt for the securities.
DERIVATIVES: (1) Financial instruments whose return profile is linked to, or
derived from, the movement of one or more underlying index or security, and may
include a leveraging factor, or (2) financial contracts based upon notional amounts
whose value is derived from an underlying index or security (interest rates, foreign
exchange rates, equities or commodities).
DISCOUNT: The difference between the cost price of a security and its maturity
when quoted at lower than face value. A security selling below original offering
price shortly after sale also is considered to be at a discount.
DISCOUNT SECURITIES: Non-interest bearing money market instruments that
are issued a discount and redeemed at maturity for full face value (e.g., U.S.
Treasury Bills.)
DIVERSIFICATION: Dividing investment funds among a variety of securities
offering independent returns.
DURATION: A measure of the sensitivity of the price (the value of principal) of a
fixed-income investment to a change in interest rates. Duration is expressed as a
number of years. Rising interest rates mean falling bond prices, while declining
interest rates mean rising bond prices.
FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to
supply credit to various classes of institutions and individuals, e.g., S&L’s, small
business firms, students, farmers, farm cooperatives, and exporters.
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FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal
agency that insures bank deposits, currently up to $250,000 per entity.
FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded.
This rate is currently pegged by the Federal Reserve through open-market
operations.
FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale
banks (currently 12 regional banks), which lend funds and provide correspondent
banking services to member commercial banks, thrift institutions, credit unions and
insurance companies. The mission of the FHLBs is to liquefy the housing related
assets of its members who must purchase stock in their district Bank.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA, like
GNMA was chartered under the Federal National Mortgage Association Act in
1938. FNMA is a federal corporation working under the auspices of the
Department of Housing and Urban Development (HUD). It is the largest single
provider of residential mortgage funds in the United States. Fannie Mae, as the
corporation is called, is a private stockholder-owned corporation. The
corporation’s purchases include a variety of adjustable mortgages and second
loans, in addition to fixed-rate mortgages. FNMA’s securities are also highly liquid
and are widely accepted. FNMA assumes and guarantees that all security holders
will receive timely payment of principal and interest.
FEDERAL RESERVE SYSTEM: The central bank of the United States created
by Congress and consisting of a seven member Board of Governors in Washington,
D.C., 12 regional banks and about 5,700 commercial banks are members of the
system.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or
Ginnie Mae): Securities influencing the volume of bank credit guaranteed by
GNMA and issued by mortgage bankers, commercial banks, savings and loan
associations, and other institutions. Security holder is protected by full faith and
credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA
or FHA mortgages. The term “pass-throughs” is often used to describe Ginnie
Maes.
LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into
cash without a substantial loss of value. In the money market, a security is said to
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be liquid if the spread between bid and asked prices is narrow and reasonable size
can be done at those quotes.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all
funds from political subdivisions that are placed in the custody of the State
Treasurer for investment and reinvestment.
MARKET VALUE: The price at which a security is trading and could
presumably be purchased or sold.
MASTER REPURCHASE AGREEMENT: A written contract covering all
future transactions between the parties to repurchase—reverse repurchase
agreements that establishes each party’s rights in the transactions. A master
agreement will often specify, among other things, the right of the buyer -lender to
liquidate the underlying securities in the event of default by the seller borrower.
MATURITY: The date upon which the principal or stated value of an investment
becomes due and payable.
MONEY MARKET: The market in which short-term debt instruments (bills,
commercial paper, bankers’ acceptances, etc.) are issued and traded.
OFFER: The price asked by a seller of securities. (When you are buying
securities, you ask for an offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases and sales of government and
certain other securities in the open market by the New York Federal Reserve Bank
as directed by the FOMC in order to influence the volume of money and credit in
the economy. Purchases inject reserves into the bank system and stimulate growth
of money and credit; sales have the opposite effect. Open market operations are the
Federal Reserve’s most important and most flexible monetary policy tool.
PORTFOLIO: Collection of securities held by an investor.
PRIMARY DEALER: A group of government securities dealers who submit
daily reports of market activity and positions and monthly financial statements to
the Federal Reserve Bank of New York and are subject to its informal oversight.
Primary dealers include Securities and Exchange Commission (SEC)-registered
securities broker-dealers, banks, and a few unregulated firms.
Investment Policy – May 2013
22
Investment Policy – May 2013
23
PRUDENT PERSON RULE: An investment standard. In some states the law
requires that a fiduciary, such as a trustee, may invest money only in a list of
securities selected by the custody state—the so-called legal list. In other states the
trustee may invest in a security if it is one which would be bought by a prudent
person of discretion and intelligence who is seeking a reasonable income and
preservation of capital.
QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not
claim exemption from the payment of any sales or compensating use or ad valorem
taxes under the laws of this state, which has segregated for the benefit of the
commission eligible collateral having a value of not less than its maximum liability
and which has been approved by the Public Deposit P rotection Commission to
hold public deposits.
RATE OF RETURN: The yield obtainable on a security based on its purchase
price or its current market price. This may be the amortized yield to maturity on a
bond the current income return.
REPURCHASE AGREEMENT (REPO): A holder of securities sells these
securities to an investor with an agreement to repurchase them at a fixed price on a
fixed date. The security “buyer” in effect lends the “seller” money for the period of
the agreement, and the terms of the agreement are structured to compensate him
for this.
SAFEKEEPING: A service to customers rendered by banks for a fee whereby
securities and valuables of all types and descriptions are held in the bank’s vaults
for protection.
SECONDARY MARKET: A market made for the purchase and sale of
outstanding issues following the initial distribution.
SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to
protect investors in securities transactions by administering securities legislation.
SEC RULE 15(C)3-1: See Uniform Net Capital Rule.
Investment Policy – May 2013
24
STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises
(FHLB, FNMA, SLMA, etc.) and Corporations, which have imbedded options
(e.g., call features, step-up coupons, floating rate coupons, and derivative-based
returns) into their debt structure. Their market performance is impacted by the
fluctuation of interest rates, the volatility of the imbedded options and shifts in the
shape of the yield curve.
TREASURY BILLS: A non-interest bearing discount security issued by the U.S.
Treasury to finance the national debt. Most bills are issued to mature in three
months, six months, or one year.
TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued
as direct obligations of the U.S. Government and having initial maturities of more
than 10 years.
TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities
issued as direct obligations of the U.S. Government and having initial maturities
from two to 10 years.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission
requirement that member firms as well as nonmember broker-dealers in securities
maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called
net capital rule and net capital ratio. Indebtedness covers all money owed to a firm,
including margin loans and commitments to purchase securities, one reason new
public issues are spread among members of underwriting syndicates. Liquid capital
includes cash and assets easily converted into cash.
YIELD: The rate of annual income return on an investment, expressed as a
percentage. (a) INCOME YIELD is obtained by dividing the current dollar income
by the current market price for the security. (b) NET YIELD or YIELD TO
MATURITY is the current income yield minus any premium above par or plus any
discount from par in purchase price, with the adjustment spread over the period
from the date of purchase to the date of maturity of the bond.
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ITEM NO. 10.1
AGENDA REPORT
Meeting Date: May 9, 2013 Budgeted:No
To:Board of Directors Cost Estimate:$30,000
Funding Source:Water Capital
Reserves
From:Steve Conklin, Acting General
Manager
Presented By:John DeCriscio, Operations
Manager
Dept:Operations
Reviewed by Legal:N/A
Prepared By:John DeCriscio, Operations
Manager
CEQA Compliance:N/A
Subject:Well #18 Engine Overhaul
SUMMARY:
Per District Resolution No. 13-03, District staff must inform the Board of Directors when it is necessary
to perform Non-Scheduled Capital Assets Repairs and staff will be charging those costs to the
Maintenance Reserve Account. Such work is needed for the natural-gas engine powering Well #18.
COMMITTEE RECOMMENDATION:
This matter will be discussed with the Planning-Engineering-Operations Committee at its May 6, 2013
meeting and their comments will be provided to the Board.
DISCUSSION:
In August 2012, Well #18 stationary gas engine was taken off line for repair work. Both cylinder heads
were replaced and the cylinder liner walls were inspected. Wear in the cylinder liner walls indicated
piston and liner replacements would be necessary in about 8000 hours or approximately one year
depending on the amount of run time of this well. Currently Well #18 is out of service due to one of the
cylinder heads having failed.
In August 2012 a complete overhaul was considered but because of budget constraints staff elected
to replace just the cylinder heads at a cost of $11,500 versus $27,000 -$30,000 for an overhaul. The
original repair cost was charged to Operations Stationary Gas Engine expense account. Normally
cylinder heads last about 12,000- 20,000 hours and an engine overhaul interval is about 50,000
hours.
Staff determined that the stationary gas engine should be overhauled now at 45,000 hours because
it's possible that worn cylinder liners might cause premature failure of the cylinder head. Replacing
just one cylinder head at this time may not provide the reliability we want for summer pumping needs.
Further due to the cost, staff will be charging this overhaul to the Maintenance Reserve Account,
which was established for these type of necessary but unanticipated repairs.
ITEM NO. 12.2
AGENDA REPORT
Meeting Date: May 9, 2013
Subject:Finance-Accounting Committee
(Hawkins/Melton)
· Minutes of meeting held April 22, 2013 at 12:00 p.m.
· Meeting scheduled May 31, 2013 at 8:30 a.m.
ATTACHMENTS:
Name:Description:Type:
042213_FA_-_Minutes.doc FA Mtg Minutes 04/22/13 Minutes
1
MINUTES OF THE
YORBA LINDA WATER DISTRICT
FINANCE-ACCOUNTING COMMITTEE MEETING
Monday, April 22, 2013 12:00 p.m.
1717 E Miraloma Ave, Placentia CA 92870
1. CALL TO ORDER
The April 22, 2013 meeting of the Yorba Linda Water District’s Finance-
Accounting Committee was called to order by Director Hawkins at 12:00 p.m.
The meeting was held in the Admin Conference Room at the District’s
Administration Building located at 1717 East Miraloma Avenue in Placentia,
California 92870.
2. ROLL CALL
COMMITTEE STAFF
Director Phil Hawkins, Chair Steve Conklin, Acting General Manager
Director Gary T. Melton Stephen Parker, Finance Manager
3. PUBLIC COMMENTS
None.
4. ACTION CALENDAR
4.1. Investment Report for Period Ending March 31, 2013
Mr. Parker presented the March Investment Report to the Committee. Mr.
Parker covered the changes in the current month – primarily a semi-
annual debt service payment, and pointed out that the current yield was
0.63%. The Committee had a few other questions that Mr. Parker
answered, and the Committee supported the investment Report going to
the full Board on the Consent calendar.
4.2. Adopting a Public Investment Policy
Mr. Parker explained that this fiscal year the California Municipal
Treasurer’s Association (CMTA) began an Investment Policy Certification
Program. As staff looked into the requirements, it was determined that the
District’s investment policy had not had a large-scale updating in over a
decade, and a number of best practices established by CMTA were not in
place. As such, staff spent a considerable amount of time updating the
District’s policy so that it could be submitted for the Certification Program.
While significant changes were made to the policy, Mr. Parker described
the majority of them as clarifying policies and procedures and conforming
to best practices, rather than changing what investments the District might
participate in.
2
Mr. Parker noted that the only investment added in the policy from the
previous version was authorizing investments in Certificates of Deposit,
which while not specifically authorized, had already been used by the
District as an investment option. Mr. Parker further noted that Legal
Counsel had not yet completed their review of the policy, and if significant
changes were proposed by legal counsel, Mr. Parker would come back to
the Committee with the changes. If not, Mr. Parker would present any
legal counsel-recommended changes to the full Board along with this a
resolution and investment policy. The Committee supported moving the
Investment Policy on to the full Board at the next meeting after Legal
Counsel’s review.
5. DISCUSSION ITEMS
5.1. March 2013 Budget to Actual Results
Mr. Parker presented the March Budget to Actual Results. Mr. Parker
pointed out that Water Other-Non-Operating Revenues were above the
annual budget this month due to the MWDOC refund received. In
addition, Water Supplies and Services are trending at budget, while Sewer
Supplies and Services are over budget due to a couple of Maintenance
Expense items (Asphalt Paving and Line Repairs). The remaining items
were similar to prior months. The Committee had a few other questions
that Mr. Parker answered.
5.2. Draft Reserve Policy for FY 2013/14
Mr. Parker explained the revision to the reserve policy from what had
previously been submitted to the Committee. As he was preparing for the
Budget Workshop, Mr. Parker noticed that the reserves detailed in the
Reserve Policy did not include a reserve currently utilized by the District –
the Debt Service Reserve. Mr. Parker proposed that the Reserve Policy
be updated to include a Debt Service Reserve, and that it be established
at an amount of one year’s debt service payments. As the District is
currently funding the annual needs in their rates, this change would not
propose an increase in annual funding. To establish the reserve initially,
money would be moved over from the Operating Reserve. The inclusion
of the reserve in the policy would increase the minimum reserve threshold,
but would not increase the annual funding recommendation. The
Committee supported the new language, and Mr. Parker stated that the
same language would come back to the Committee in the following
meeting as an Action Item before going on to the full Board.
5.3. Broker Dealer Approval
Mr. Parker informed the Committee that staff had vetted Peter Becker with
Time Value Investments, Inc. as a broker/dealer. He added that once the
proposed investment policy was adopted, he would begin using the
District’s four vetted broker/dealers to begin diversifying the District’s
portfolio. The Committee approved this.
3
5.4. CalPERS Rate Increase (Verbal Report)
Mr. Parker reported that the CalPERS Pensions and Health Benefits
Committee voted last week to adopt staff recommended revisions to
Amortization Periods and Smoothing Methods for Retirement Trust Funds.
This item will go to the full CalPERS Board for a vote on Wednesday, April
24th, and if adopted, will increase rates for employers. The employer
increases will amount to a little less than 50% over the next 7 years. It
was explained that approximately half of that increase was previously
known from last years’ decision to change the investment return
assumption from 7.75% to 7.5%. Mr. Parker added that the District’s low
pension benefit might allow it to see an even lower increase, and stated
that he would provide more information to the Board as it became
available.
5.5. Future Agenda Items and Staff Tasks
None
6. ADJOURNMENT
6.1. The meeting was adjourned at 1:10 p.m. The next Finance-Accounting
Committee meeting is scheduled to be held Friday, May 31, 2013 at 8:30
a.m.
ITEM NO. 14.1
AGENDA REPORT
Meeting Date: May 9, 2013
Subject:Meetings from May 10, 2013 - June 30, 2013
ATTACHMENTS:
Name:Description:Type:
BOD_-_Activities_Calendar.pdf Backup Material Backup Material
Event Date Attendance by:
May 2013
Personnel-Risk Management Committee MeetingTue, May 14Collett/Beverage
MWDOC BoardWed, May 15Melton
OCWD BoardWed, May 15Kiley
Yorba Linda Planning CommissionWed, May 15Melton
Harassment Prevention TrainingThu, May 16Beverage/Melton
Harassment Prevention TrainingThu, May 16Collett
OC Water SummitFri, May 17Collett/Kiley/Melton
Citizens Advisory Committee MeetingMon, May 20Beverage
Exec-Admin-Organizational Committee MeetingTue, May 21Melton/Kiley
Yorba Linda City CouncilTue, May 21Collett
Pub Affairs-Communications-Tech Committee MeetingWed, May 22Beverage/Collett
Board of Directors Regular MeetingThu, May 23
District Offices ClosedMon, May 27
Joint Committee Meeting with MWDOC and OCWDTue, May 28Beverage/Melton
Yorba Linda Planning CommissionWed, May 29Hawkins
ISDOCThu, May 30Collett
Finance-Accounting Committee MeetingFri, May 31Hawkins/Melton
June 2013
Pub Affairs-Communications-Tech Committee MeetingMon, Jun 3Beverage/Collett
Yorba Linda City CouncilTue, Jun 4Kiley
MWDOC/MWD WorkshopWed, Jun 5Melton
OCWD BoardWed, Jun 5Kiley
Planning-Engineering-Operations Committee MeetingThu, Jun 6Kiley/Hawkins
WACOFri, Jun 7Hawkins/Kiley
Personnel-Risk Management Committee MeetingTue, Jun 11Collett/Beverage
Yorba Linda Planning CommissionWed, Jun 12Melton
Board of Directors Regular MeetingThu, Jun 13
Joint Committee Meeting with City of PlacentiaMon, Jun 17Melton/Hawkins
Exec-Admin-Organizational Committee MeetingTue, Jun 18Melton/Kiley
Yorba Linda City CouncilTue, Jun 18Collett
MWDOC BoardWed, Jun 19Melton
LAFCOWed, Jun 19Beverage
OCWD BoardWed, Jun 19Kiley
Joint Committee Meeting with City of Yorba LindaWed, Jun 19Kiley/Beverage
Citizens Advisory Committee MeetingMon, Jun 24Beverage
Finance-Accounting Committee MeetingMon, Jun 24Hawkins/Melton
Yorba Linda Planning CommissionWed, Jun 26Hawkins
Board of Directors Regular MeetingThu, Jun 27
7:00PM
8:30AM
8:30AM
8:30AM
5:30PM
6:00PM
8:30AM
12:00PM
4:00PM
7:00PM
8:30AM
9:30AM
4:00PM
6:30PM
4:00PM
6:30PM
8:30AM
5:30PM
3:00PM
7:30AM
4:00PM
7:00PM
11:30AM
8:30AM
8:30AM
4:00PM
6:30PM
3:00PM
8:30AM
7:00AM
8:30AM
5:30PM
7:00PM
10:00AM
1:00PM
7:30AM
Board of Directors Activity Calendar
Time
4:00PM
5/2/2013 7:29:08 AM
ITEM NO. 14.2.
Request to add the following item to the agenda as there is a need to take
immediate action on this item and the need for action came to staff’s attention
subsequent to the agenda being posted.
14.2. CONFERENCES, SEMINARS, AND SPECIAL EVENTS
City of Placentia Green Business Expo – May 18, 2013
OCWD 80th Anniversary Legislative Reception – June 3, 2013
Recommendation: That the Board of Directors authorize Director
attendance at these events if desired.
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
ITEM NO. 14.2.
Backup Material Distributed Less Than 72 Hours Prior to the Meeting
ITEM NO. 14.2.
Backup Material Distributed Less Than 72 Hours Prior to the Meeting