DOC: District No. 2; Book 56; May 23, 2018; RM; Page 1 of 7

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1 MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 2 HELD AT THE OFFICE OF THE DISTRICT May 23, :30 o clock, P.M. The Board of Directors of County Sanitation District No. 2 of Los Angeles County met in regular session. There were present: Absent: Also present: Stephen Sham, Director from Alhambra Sally Ann Flowers, Director from Artesia Ali Saleh, Alternate Director from Bell Pedro Aceituno, Alternate Director from Bell Gardens Ray Dunton, Director from Bellflower Grace Hu, Temporary Alternate Director from Cerritos Janna Zurita, Alternate Director from Compton Sean Ashton, Director from Downey Dee Andrews, Alternate Director from Long Beach Joe Buscaino, Alternate Director from Los Angeles City Vanessa Delgado, Director from Montebello Juli Costanzo, Alternate Director from San Gabriel Maria Belen Bernal, Director from South Gate William J. Davis, Alternate Director from Vernon Cathy Warner, Alternate Director from Whittier Kathryn Barger, Alternate Director from Los Angeles County David Armenta, Chairperson, Alternate Director from Pico Rivera Oralia Y. Rebollo, Director from Commerce Stephen Lam, Director from Monterey Park Jennifer Perez, Director from Norwalk Diane J. Martinez, Director from Paramount Kimberly S. Christensen, Secretary to the Board A letter from the City of Cerritos stating that Ms. Grace Hu, a member of the City Council of the City of Cerritos, was appointed to serve as temporary alternate Director from said city, to attend the meeting of May 23, 2018, only, is in the file in the Secretary s office. RE: PUBLIC COMMENTS ITEMS NOT POSTED ON AGENDA An announcement was made that this was the time for public comment. The Secretary called upon the following speaker who requested to address the Board: Mr. Earle Hartling, Recycling Coordinator, Technical Services Department, addressed the Board regarding employee negotiations. As reported in the Status Report, the Chief Engineer and General Manager responded to comments and updated the Directors on the subject matter. C O N S E N T A G E N D A Upon motion of Director Davis, duly seconded and unanimously carried, the Consent Agenda was approved as follows: RE: DIRECTOR FROM CITY OF PARAMOUNT A certificate from the City Clerk of the City of Paramount was presented to the Secretary stating that at a meeting of the City Council held April 3, 2018, Ms. Diane Martinez was elected Mayor of the City of Paramount, which is the designation of the presiding officer of the governing body of that city and automatically places Ms. Martinez on this Board, was accepted and ordered filed. DOC: District No. 2; Book 56; May 23, 2018; RM; Page 1 of 7

2 RE: MINUTES RE: DISTRICT EXPENSES The minutes of the regular meeting held May 9, 2018, were approved. The following expenses for the month of February 2018 were presented and approved: Local District Expenses: Operations & Maintenance (O & M) $ 103, Capital 201, District No. 2 s Share of Allocated Wastewater Expenses for O & M and Capital: Joint Administration 302, Technical Support 480, Joint Outfall 1,541, Solid Waste System Expenses: Operations & Maintenance (O&M) 12,779, Allocated Expenses 788, Capital 4,820, Stormwater Expenses: Operations & Maintenance (O & M) 11, Total Expenses $21,028, RE: LEGAL SERVICES PAYMENT AND REIMBURSEMENT OF EXPENSES ADVANCED An invoice dated April 27, 2018, from Lewis Brisbois, Bisgaard & Smith LLP, in the amount of $156, for legal services rendered and reimbursement of expenses advanced in various Districts matters during the month of March 2018, was approved, and the Chief Engineer and General Manager was authorized to have a warrant drawn in full payment of the invoice, the charges to be distributed to the affected Districts. JOINT WATER POLLUTION CONTROL PLANT POWER SERVICE FOR CONSTRUCTION OF EFFLUENT OUTFALL TUNNEL - APPROVAL OF PLANS AND CALL FOR BIDS FOR CONSTRUCTION OF R E G U L A R A G E N D A The Joint Water Pollution Control Plant Effluent Outfall Tunnel (Project) was previously approved by the Board. The Project involves construction of approximately seven miles of 18-foot diameter tunnel and appurtenant structures to allow for the inspection of the existing tunnels, provide redundancy for critical wastewater infrastructure, and ensure capacity for future growth. The Project requires a large electrical power service for the tunnel boring machine and ventilation and ancillary systems. Due to the complexities of obtaining a large utility power service, tunneling contractors have indicated that a power service installed by others prior to the commencement of the tunneling operation would reduce project cost and schedule risk. The project will construct a new 34.5-kV substation consisting of District-furnished electrical switchgear and associated structural foundation, appurtenant substructures and security fencing. Electrical switchgear bid summary/recommendation to award was attached to the agenda. These items are consistent with the Districts Guiding Principles of commitment to operational excellence and to protect facility assets through prudent maintenance programs. A recommendation was made to approve the plans for the Joint Water Pollution Control Plant Power Effluent Outfall Tunnel and authorize the Chief Engineer and General Manager to establish a date for the receipt of bids for construction of the work. Upon motion of Director Andrews, duly seconded and unanimously carried, the Board of Directors of County Sanitation District No. 2 of Los Angeles County found and determined that it will be to the interest and for the advantage of the District and that the public interest requires construction of the Joint Water Pollution Control Plant Power Service Effluent Outfall Tunnel. The detailed plans and specifications for construction of the project were approved, adopted, and ordered filed; the Chief Engineer and General Manager was authorized to establish a date for receipt of bids for construction of the project; and the Secretary was authorized and instructed to advertise for bids for construction of the work, to publish the notices as required by law, and to receive, open, and tabulate bids at the District Office and thereafter to submit the bids to this Board for such action and disposition as the Board deems necessary and appropriate. District No. 2; Book 56; May 23, 2018; RM; Page 2 of 7

3 JOINT WATER POLLUTION CONTROL PLANT - ELECTRICAL SWITCHGEAR REPORT ON BIDS AND AWARD OF ORDER Two bids were received on February 20, 2018, at the District s office for electrical switchgear for the Joint Water Pollution Control Plant Effluent Outfall Tunnel project, per the summary that was attached to the agenda. A recommendation was made to authorize the Chief Engineer and General Manager, in her capacity as Purchasing Agent, to award a purchase order to the low bidder, Myers Power Products, Inc., in the amount of approximately $346,468. Upon motion of Director Andrews, duly seconded and unanimously carried, the Purchasing Agent was authorized to issue a purchase order to Myers Power Products, Inc., for one electrical switchgear for the construction of the Joint Water Pollution Control Plant Effluent Outfall Tunnel, in the amount of approximately $346,468, in accordance with the bids received February 20, JOINT OUTFALL H UNIT 8M RELIEF TRUNK SEWER REHABILITATION BETWEEN MANHOLES H1484 AND H AWARD CONTRACT NO TO SANCON ENGINEERING, INC. ORDER SECRETARY TO EXECUTE The Joint Outfall H Unit 8M Relief Trunk Sewer Rehabilitation Between Manholes H1484 and H1485 project will consist of lining approximately 760 feet of 39-inch diameter corroded concrete pipe sewer constructed in The work is located within the City of West Covina, as shown on the map that was attached to the agenda. This item is consistent with the Districts Guiding Principles of commitment to operational excellence and to protection of facility assets through prudent maintenance programs. The bid summary/recommendation to award was attached to the agenda. The bids received at the District s office on May 10, 2018, for construction of the project are as follows: BIDDER TOTAL BID Sancon Engineering, Inc. $491, Insituform Technologies, LLC $583, The bid of Sancon Engineering, Inc., was the lowest bid received, and that Sancon Engineering, Inc., was the lowest, regular, responsible bidder for the work, and a recommendation was made to award a contract to Sancon Engineering, Inc., at the unit prices and lump sum stated in its bid amounting to approximately $491,500. Furthermore, a recommendation was made to order the Secretary to review the surety bonds for performance and payment and, if sufficient, execute a contract with Sancon Engineering, Inc., for construction of the project. Upon motion of Director Andrews, duly seconded and unanimously carried, Contract No for construction of the Joint Outfall H Unit 8M Relief Trunk Sewer Rehabilitation Between Manholes H1484 and H1485 was awarded to the lowest, regular, responsible bidder, to wit: Sancon Engineering, Inc., at the unit prices and lump sum stated in its bid amounting to approximately $491,500. Furthermore, the Board of Directors of County Sanitation District No. 2 of Los Angeles County ordered the Secretary to review the surety bonds for performance and payment, and execute the contract with Sancon Engineering, Inc., for construction of the project. JOINT WATER POLLUTION CONTROL PLANT DEMOLITION OF DIGESTION TANKS KLM - AWARD CONTRACT NO TO ZUSSER COMPANY, INC. ORDER SECRETARY TO EXECUTE As previously discussed with the Boards, forecasting a countywide increase in food waste recycling pursuant to state requirements and following the success of codigestion of food waste with biosolids in the Joint Water Pollution Control Plant (JWPCP) Food Waste Recycling Demonstration Project, the District is proceeding with the Food Waste Receiving and Digestion Program at the JWPCP. The initial phase of the Program is the demolition of Digestion Tanks KLM and ancillary facilities to accommodate construction of the Food Waste Facility. The JWPCP Demolition of Digestion Tanks KLM project will include demolition of all associated structural, mechanical and electrical facilities, and relocation of piping. The bid summary/recommendation to award was attached to the agenda. This item is consistent with the Districts Guiding Principles of commitment to operational excellence and maximizing the use of our assets and resources. The bids received at the District s office on April 26, 2018, for construction of the project are as follows: DOC: District No. 2; Book 56; May 23, 2018; RM; Page 3 of 7

4 BIDDER TOTAL BID Zusser Company, Inc. $2,887, Ampco Contracting, Inc. $2,989, PCL Construction, Inc. $3,487, Penhall Company $3,540, National Demolition Contractors $3,662, The bid of Zusser Company, Inc., was the lowest bid received and that Zusser Company, Inc., was the lowest, regular, responsible bidder for the work, and a recommendation was made to award a contract to Zusser Company, Inc., at the lump sum stated in its bid amounting to approximately $2,887,287. Furthermore, a recommendation was made to order the Secretary to review the surety bonds for performance and payment and, if sufficient, execute a contract with Zusser Company, Inc., for construction of the project. Upon motion of Director Warner, duly seconded and unanimously carried, Contract No for construction of the Joint Water Pollution Control Plant Demolition of Digestion Tanks KLM was awarded to the lowest, regular, responsible bidder, to wit: Zusser Company, Inc., at the lump sum stated in its bid amounting to approximately $2,887,287. Furthermore, the Board of Directors of County Sanitation District No. 2 of Los Angeles County ordered the Secretary to review the surety bonds for performance and payment, and execute the contract with Zusser Company, Inc., for construction of the project. RE: INSURANCE - UMBRELLA GENERAL LIABILITY COVERAGE - ALL OPERATIONS AUTHORIZE ISSUANCE OF PURCHASE ORDER TO AON RISK SERVICES, INC. Proposals were solicited from 11 companies through Aon, the Districts insurance broker, for renewal of umbrella general liability insurance, which covers wastewater, solid waste management, and power generation operations. Two companies provided quotes. GAAC, the Districts current carrier, offered the lowest premium which is the same as last year. The recommended coverage is for one year with a $25 million limit. The Districts procure $1 million of underlying automobile liability insurance and self-insure the first $1 million of general liability exposure, which has been the most cost-effective approach for this type of coverage. This item is consistent with the Districts Guiding Principle of commitment to fiscal responsibility and prudent financial stewardship. A recommendation was made to authorize a payment to Aon Risk Services, Inc., for umbrella general liability insurance coverage from Great American Assurance Company for all Districts operations at an annual premium of $504,900. Upon motion of Director Zurita, duly seconded and unanimously carried, the Purchasing Agent was authorized to issue a purchase order to Aon Risk Services, Inc., for umbrella general liability insurance coverage for all Districts operations at an annual premium of $504,900. RE: JOINT ADMINISTRATION PROFESSIONAL SECURITY CONSULTING SERVICES AUTHORIZE ISSUANCE OF PURCHASE ORDER TO KROLL CYBER SECURITY LLC Staff recommends hiring a security expert to assess the current state of physical and cyber security within the agency and identify needed improvements. A Request for Qualifications was sent to 19 security firms and three firms responded. A Request for Proposals was sent to those three firms. All three firms submitted proposals and were interviewed. Proposals were ranked by qualifications, approach and costs. Kroll Cyber Security LLC, was highest ranked and is expected to provide services that result in the lowest overall cost to implement security improvements. This item is consistent with the Districts Guiding Principles of providing reliable and responsible services with safety first and protecting financial and facility assets through prudent investment and maintenance programs. A recommendation was made to authorize the Chief Engineer and General Manager, in her capacity as Purchasing Agent, to issue a purchase order to Kroll Cyber Security LLC, in the the amount of approximately $325,000 to provide professional security consulting services for a two-year period related to assessing the Districts security. Upon motion of Director Saleh, duly seconded and unanimously carried, the Purchasing Agent was authorized to issue a purchase order to Kroll Cyber Security LLC, to provide professional security consulting services for a two-year period related to assessing the Districts security, at a cost of approximately $325,000. District No. 2; Book 56; May 23, 2018; RM; Page 4 of 7

5 SAN JOSE CREEK EAST WATER RECLAMATION PLANT BULK CHLORINE - AUTHORIZE EXTENSION OF PURCHASE ORDER TO THATCHER COMPANY OF CALIFORNIA, INC. In May 2017, subsequent to competitive bids, the Board authorized a purchase order to Sierra Chemical Co., sole bidder, to furnish and deliver commercial grade chlorine to the San Jose Creek Water Reclamation Plant (WRP) (East and West). In accordance with the specifications, Thatcher Company of California, Inc., who recently purchased Sierra Chemical, has agreed at our request to extend this agreement through the end of the calendar year at the existing unit price of $478 per ton for the San Jose Creek East WRP. An extension at this time would be in the best interest of the Districts. This is the last anticipated purchase of chlorine, which is used to disinfect tertiary treated effluent in accordance with regulatory requirements, as the new replacement disinfection system, which utilizes Sodium Hypochlorite, is being constructed and should be in operation by the end of This item is consistent with the Districts Guiding Principle of commitment to fiscal responsibility and prudent financial stewardship. A recommendation was made to authorize the Chief Engineer and General Manager, in her capacity as Purchasing Agent, to issue a seven-month extension of a purchase order to Thatcher Company of California, Inc., in the amount of approximately $191,200 to furnish and deliver bulk chlorine to the San Jose Creek East WRP. Upon motion of Director Andrews, duly seconded and unanimously carried, the Purchasing Agent was authorized to extend the purchase order, for a seven-month period, with Thatcher Company of California, Inc., to furnish and deliver bulk chlorine to the San Jose Creek East Water Reclamation Plant, at a cost of approximately $191,200. LONG BEACH WATER RECLAMATION PLANT CONCRETE AND PROTECTIVE REPAIR-PHASE I - SANCON ENGINEERING; INC. - CONTRACT NO APPROVE CHANGE ORDER NO. 1 - EXTRA WORK A recommendation was made to approve Change Order No. 1 for extra work to Contract No with Sancon Engineering, Inc., for the construction of the Long Beach Water Reclamation Plant Concrete and Protective Repair-Phase I, resulting in payment of $230, since this work is necessary to meet the requirements of the District. After the primary sedimentation tanks were drained to perform contract work, it was determined that the sludge collection equipment upper return rails were severely deteriorated and required replacement to ensure reliable operation. The contractor was directed to replace the upper return rails. This item is consistent with the Districts Guiding Principles of commitment to operational excellence and protection of financial and facility assets through prudent investment and maintenance programs. The claims have been reviewed and the work determined to be beyond the scope of the plans and specifications. Upon motion of Director Andrews, duly seconded and unanimously carried, Change Order No. 1 to Contract No with Sancon Engineering, Inc., for construction of the Long Beach Water Reclamation Plant Concrete and Protective Repair-Phase I, resulting in a payment of $230,863.40, was approved. RE: FINANCIAL MANAGEMENT SURCHARGE PROCESSING VAHAN SERVICES, INC. AUTHORITY TO SETTLE SURCHARGE - OBLIGATION AND SECURE COLLECTION The Vahan Services, Inc., company does not dispute the surcharge amount due; however, it is not in a financial position to submit payment in full and has expressed a willingness to pay the balance in monthly installments. This item is consistent with the Districts Guiding Principle of commitment to fiscal responsibility and prudent financial stewardship. A recommendation was made to authorize settlement of the industrial wastewater surcharge obligations of Vahan Services, Inc., in the principal sum of $95,846.94, plus penalty and interest; and to authorize the Chief Engineer and General Manager and District Counsel to take all the appropriate steps to secure collection of all past due amounts, including the authority to institute litigation, stipulate to judgment, and execute a settlement agreement that provides for a payment of the indebtedness on a periodic basis. Upon motion of Director Andrews, duly seconded and unanimously carried, settlement of the industrial wastewater surcharge obligations due from Vahan Services, Inc., in the principal sum of $95,846.94, plus penalty and interest, was authorized; and the Chief Engineer and General Manager and District Counsel were authorized to take all the appropriate steps to secure collection of all past due amounts now due together with any amounts that may later become due, including the authority to institute litigation, stipulate to judgment, and execute a settlement agreement that provides for a payment of the indebtedness on a periodic basis. DOC: District No. 2; Book 56; May 23, 2018; RM; Page 5 of 7

6 RE: FINANCIAL PLANNING AN ORDINANCE PRESCRIBING FEE AND CHARGE RATES FOR SOLID WASTE MANAGEMENT ACTIVITIES AT THE PUENTE HILLS MATERIALS RECOVERY FACILITY,THE SOUTH GATE TRANSFER STATION, AND THE DOWNEY AREA RECYCLING AND TRANSFER FACILITY - ADOPT FIND EXEMPT FROM CEQA An Ordinance Prescribing Fee and Charge Rates for Solid Waste Management Activities at the Puente Hills Materials Recovery Facility (MRF), the South Gate Transfer Station, and the Downey Area Recycling and Transfer (DART) Facility (Ordinance) was presented for the Board s consideration. This matter was previously discussed with the Personnel Committee and subsequently with the Directors, and a letter describing the recommendation was provided to the Directors prior to a public hearing and the introduction of the Ordinance on May 9, A copy of the letter and the proposed Ordinance accompanied the agenda. The Ordinance would increase the municipal solid and inert waste (MSW) rate at the Puente Hills MRF from $58.40 per ton to $61.40 per ton. The MSW rate at the South Gate Transfer Station would increase from $63.16 per ton to $66.16 per ton. The MSW rate at DART would increase from $62.49 per ton to $65.49 per ton. Changes to the rates for hard-to-handle, bulky items, minimum load charges and pull-offs at the various sites are also proposed. The new rates would become effective July 1, This item is consistent with the Districts Guiding Principles of commitment to fiscal responsibility and prudent financial stewardship, and to plan for both short- and long-term needs to minimize the need for significant rate increases. A recommendation was made to adopt the Ordinance and find that the Ordinance is exempt from the California Environmental Quality Act Under Public Resources Code Section 21080(b)(8) because rates and charges are for the purpose of meeting operational expenses, purchasing equipment, and funding capital projects necessary to maintain services within existing service areas. Upon motion of Director Warner, duly seconded and unanimously carried, An Ordinance Prescribing Fee and Charge Rates for Solid Waste Management Activities at the Puente Hills Materials Recovery Facility (MRF), the South Gate Transfer Station, and the Downey Area Recycling and Transfer (DART) Facility, was adopted by County Sanitation District No. 2 of Los Angeles County, by the following vote: AYES: NOES: ABSTAIN: ABSENT: Directors Sham, Flowers, Saleh, Aceituno, Dunton, Hu, Zurita, Ashton, Andrews, Buscaino, Delgado, Costanzo, Bernal, Davis, Warner, Barger, and Armenta None None Directors Rebollo, Lam, Perez, and Martinez An Ordinance Prescribing Fee and Charge Rates for Solid Waste Management Activities at the Puente Hills Materials Recovery Facility (MRF), the South Gate Transfer Station, and the Downey Area Recycling and Transfer (DART) Facility, was adopted. Furthermore, the Board found that adoption of the Ordinance is exempt from the California Environmental Quality Act under Section of State Guidelines for Implementation of CEQA on the basis that CEQA does not apply to the modification of rates or other charges by the District which are for the purpose of meeting operating expenses, purchasing equipment, and funding capital projects necessary to maintain services within existing service areas; and that the proposed rate increases are for the purpose of (1) meeting operating expenses, including employee wage rates and fringe benefits, (2) purchasing or leasing supplies, equipment, or materials, (3) meeting financial reserve needs and requirements, or (4) obtaining funds for capital projects necessary to maintain service within existing service areas, as reported to the Board of Directors by the Chief Engineer and General RE: TULARE LAKE COMPOSTING FACILITY - LICENSE AGREEMENT MEMORANDUM OF LICENSE AGREEMENT - TULARE LAKE RECLAMATION DISTRICT NO. 761 AND SANDRIDGE PARTNERS, L.P. - CONTRACTS NOS AND APPROVE Approximately half of the agricultural lands associated with the Tulare Lake Compost facility include a tile drainage system to remove excess water from the crop root zone, with the tile drainage system routed via canals along the eastern border of the District s property to evaporation basins for disposal. All but approximately one mile of the canals conveying the tile drainage water to the evaporation basins are located on property owned by Tulare Lake Reclamation District No. 761 (RD 761). The License Agreement (Agreement) would provide a permanent right for the District to continue to convey its drainage water across RD 761 land. Additionally, Sandridge recently entered into an agreement with the City of Lemoore (Lemoore) and Leprino Foods Company (Leprino) to convey their effluent to a new location for reuse. The alignment for the conveyance coincides with the alignment for the District No. 2; Book 56; May 23, 2018; RM; Page 6 of 7

7 District s tile drainage water along the eastern border of the District s property. The License Agreement would provide a ten-year license, with options for two 12-year renewals, for Sandridge to convey the Lemoore and Leprino effluent across a one-mile section of the District s land. As a condition of the License Agreement, Sandridge is required to provide separation of the tile drainage water and the effluent. The Memorandum of License Agreement (Memorandum) will be used to record the License Agreement. This item is consistent with the Districts Guiding Principle to protect facility assets. A recommendation was made to approve and order executed a License Agreement and Memorandum of License Agreement with Tulare Lake Reclamation District No. 761 and Sandridge Partners, L.P. Upon motion of Director Zurita, duly seconded and unanimously carried, the Board of Directors of County Sanitation District No. 2 of Los Angeles County found and determined that it would be to the advantage of the District to enter into a License Agreement and a Memorandum of License Agreement with Tulare Lake Reclamation District No. 761 (RD 761) and Sandridge Partners, L.P., providing for a permanent right for the District to continue to convey its drainage water across RD 761 land, as set forth in the Agreements and under terms and conditions contained therein. All the terms and conditions of the License Agreement and a Memorandum of License Agreement, Contracts Nos and 5121, respectively, dated May 23, 2018, were accepted and approved, and the Chairperson and Secretary were authorized to execute the Agreements on behalf of the District. Upon motion of Director Andrews, duly seconded and unanimously carried, the meeting adjourned. DAVID ARMENTA Chairperson ATTEST: KIMBERLY S. CHRISTENSEN Secretary /ak DOC: District No. 2; Book 56; May 23, 2018; RM; Page 7 of 7