AGENDA. RECOMMENDATION: Approve Minutes of the March 14, 2018 Administration Committee Meeting.

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1 Orange County Sanitation District Regular Meeting of the ADMINISTRATION COMMITTEE Wednesday, April 11, :00 P.M. Administration Building Board Room Ellis Avenue Fountain Valley, CA (714) AGENDA CALL TO ORDER: PLEDGE OF ALLEGIANCE: DECLARATION OF QUORUM: (Clerk of the Board) PUBLIC COMMENTS: If you wish to address the Committee on any item, please complete a Speaker s Form (located at the table outside of the Board Room) and submit it to the Clerk of the Board or notify the Clerk of the Board the item number on which you want to speak. Speakers will be recognized by the Chairman and are requested to limit comments to three minutes. REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Committee Members. These reports are for information only and require no action by the Committee. CONSENT CALENDAR: The Consent Calendar Items are considered to be routine and will be enacted, by the Committee, after one motion, without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1. APPROVAL OF MINUTES (Clerk of the Board) RECOMMENDATION: Approve Minutes of the March 14, 2018 Administration Committee Meeting CONFLICT OF INTEREST CODE (Clerk of the Board) RECOMMENDATION: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 18-XX entitled, A Resolution of the Board of Directors of Orange County Sanitation District adopting a Conflict of Interest Code which supersedes all prior Conflict of Interest Codes and amendments previously adopted. 04/11/2018 Administration Committee Agenda Page 1 of 3

2 UNON-CONSENT: 3. PROPOSED PURCHASING ORDINANCE NO. OCSD-XX (Lorenzo Tyner) URECOMMENDATION:U Recommend to the Board of Directors to: A. Introduce Ordinance No. OCSD-XX, entitled An Ordinance of the Board of Directors of the Orange County Sanitation District Establishing Requirements and Procedures for the Purchase of Goods, Services, and Public Works Projects; and Repealing Ordinance No. OCSD-47 ; B. Motion to read Ordinance No. OCSD-XX by title only and waive reading of said entire Ordinance on April 25, 2018; C. Set May 23, 2018 as the date for the second reading and adoption of Ordinance No. OCSD-XX; and D. Direct the Clerk of the Board to publish summaries of the Ordinance as required by law. UINFORMATION ITEMS:U 4. STATUS OF PROPERTY-LIABILITY INSURANCE RENEWALS (Celia Chandler) UDEPARTMENT HEAD REPORTS:U UCLOSED SESSION: None. UOTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: UADJOURNMENT: The next Administration Committee meeting is scheduled for Wednesday, May 9, 2018 at 5:00 p.m. 04/11/2018 Administration Committee Agenda Page 2 of 3

3 Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board s office at (714) at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Agenda Posting: In accordance with the requirements of California Government Code Section , this agenda has been posted outside the main gate of the Sanitation District s Administration Building located at Ellis Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all, or a majority of the Board of Directors, are available for public inspection in the office of the Clerk of the Board. Agenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A. Lore Clerk of the Board (714) klore@ocsd.com For any questions on the agenda, Committee members may contact staff at: General Manager James Herberg (714) jherberg@ocsd.com Assistant General Manager Bob Ghirelli (714) rghirelli@ocsd.com Assistant General Manager Rob Thompson (714) rthompson@ocsd.com Director of Finance and Lorenzo Tyner (714) ltyner@ocsd.com Administrative Services Director of Human Resources Celia Chandler (714) cchandler@ocsd.com 04/11/2018 Administration Committee Agenda Page 3 of 3

4 MINUTES OF THE ADMINISTRATION COMMITTEE ITEM NO. 1 Orange County Sanitation District Wednesday, March 14, 2018 at 5:00 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Committee Chairman Wanke on March 14, 2018 at 5:00 p.m. in the Administration Building of the Orange County Sanitation District. Committee Chairman Wanke led the Flag Salute. A quorum was declared present as follows: COMMITTEE MEMBERS PRESENT: Chad Wanke, Chairman Donald P. Wagner, Vice-Chairman Jim Ferryman Peter Kim Richard Murphy Steve Nagel Charlie Nguyen Glenn Parker Erik Peterson (Alternate) Teresa Smith Greg Sebourn, Board Chairman David Shawver, Board Vice-Chairman COMMITTEE MEMBERS ABSENT: Sal Tinajero STAFF PRESENT: Bob Ghirelli, Assistant General Manager Rob Thompson, Director of Engineering Celia Chandler, Director of Human Resources Jim Colston, Director of Environmental Services Lorenzo Tyner, Director of Finance & Administrative Services Kelly Lore, Clerk of the Board Jennifer Cabral Mike Dorman Al Garcia Randall Kleinman Man Nguyen Ddaze Phuong Roya Sohanaki Richard Spencer Mike White OTHERS PRESENT: Brad Hogin, General Counsel PUBLIC COMMENTS: None. REPORTS: Director of Finance and Administrative Services, Lorenzo Tyner stated that for the 25th consecutive year, Orange County Sanitation District received the Certificate of Achievement for Excellence in Financial Reporting for the FY 2017 CAFR. Committee Chair Wanke did not provide a report. 03/14/2018 Administration Committee Minutes Page 1 of 3

5 CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the February 14, 2018 Administration Committee Meeting. AYES: Ferryman, Kim, Nagel, Parker, Sebourn, Shawver, T. Smith, Wanke and Wagner NOES: None ABSTENTIONS: Murphy and Peterson (Alternate) ABSENT: Nguyen and Tinajero INFORMATION ITEMS: 2. SUPERVISORY CONTROL AND DATA ACQUISITION (SCADA) SYSTEM AT PLANT NO. 1, PLANT NO. 2, AND PUMP STATION (Rob Thompson) Assistant General Manager Rob Thompson introduced Engineering Manager Mike Dorman who provided an informative PowerPoint presentation regarding the SCADA system including: Network architecture; processes; logic controllers; maintainability plan, Human Machine Interface system; network equipment and the future implementation and upgrade schedules. Director Nguyen arrived at 5:15 p.m. 3. BUSINESS CONTINUITY PROGRAM UPDATE (Celia Chandler) Principal Financial Analyst Randall Kleinman provided a PowerPoint presentation regarding the necessity of a continuity of operations in the event of an emergency, the planning efforts completed by staff in preparation of the plan, and the essential functions of the plan. 4. FY AND FY ORANGE COUNTY SANITATION DISTRICT BUDGET UPDATE (Lorenzo Tyner) Mr. Tyner introduced Controller Mike White who provided a PowerPoint presentation regarding the revenues and reserves for Fiscal Years and including: Four major categories of revenues; Fees and charges; General User Fees; Ten largest Industrial user; Property tax rise with continuing economic recovery; debt proceeds; reserve policy summary and criteria summary. Mr. White, Mr. Tyner and Mr. Assistant General Manager Rob Thompson responded to questions regarding the reserve factors, planning for catastrophic events, protection of assets and fee determination. 03/14/2018 Administration Committee Minutes Page 2 of 3

6 DEPARTMENT HEAD REPORTS: None. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Board Chairman Sebourn announced that General Manager Jim Herberg is absent due to the passing of his mother. ADJOURNMENT: Committee Chair Wanke declared the meeting adjourned in memory of Mrs. Marie Herberg, at 5:46 p.m. to the next regularly scheduled meeting of Wednesday, April 11, 2018 at 5:00 p.m. Submitted by: Kelly A. Lore, MMC Clerk of the Board 03/14/2018 Administration Committee Minutes Page 3 of 3

7 ADMINISTRATION COMMITTEE AGENDA REPORT Orange County Sanitation District Meeting Date 04/11/18 Item Number 2 To Bd. of Dir. 04/25/18 Item Number FROM: James D. Herberg, General Manager Originator: Kelly A. Lore, Clerk of the Board SUBJECT: 2018 CONFLICT OF INTEREST CODE GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 18-XX entitled, A Resolution of the Board of Directors of Orange County Sanitation District adopting a Conflict of Interest Code which supersedes all prior Conflict of Interest Codes and amendments previously adopted. BACKGROUND The last biennial review, and formal amendment, to the Orange County Sanitation District s Conflict of Interest Code was completed in March of Although the Political Reform Act requires that every local agency review its Conflict of Interest Code biennially (which would bring forth the next amendment in 2019), staff is proposing this new amendment in order to reflect the current positions of those designated employees that are required to file statements of economic interests RELEVANT STANDARDS Political Reform Act, Government Code Sections 81000, et seq. California Government Code Sections Fair Political Practices Commission (2 Cal. Code of Regs. Section 18100, et seq.) PROBLEM The position of Principal Financial Analyst has been eliminated and all employees within that position have been reclassified to Principal Staff Analyst. These positions are required to file statements of economic interest. PROPOSED SOLUTION Staff recommends that the Board of Directors adopt the updated 2018 Conflict of Interest Code to reflect the following changes: Deletion of Principal Financial Analyst (reclassified to Principal Staff Analyst) Addition of Principal Staff Analyst (deletion of Principal Financial Analyst) If approved by the Board, the newly approved code will be forwarded to the County of Orange for amendment approval. Page 1 of 2

8 TIMING CONCERNS The changes in position control have taken place and therefore cannot wait until a future meeting. RAMIFICATIONS OF NOT TAKING ACTION Non-compliance with state law. PRIOR COMMITTEE/BOARD ACTIONS March Board of Directors amended the Conflict of Interest Code and approved Resolution No. OCSD BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENTS The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website ( with the complete agenda package: Draft Resolution No. OCSD 18-XX 2018 DRAFT Conflict of Interest Code Page 2 of 2

9 RESOLUTION NO. OCSD 18-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ADOPTING A CONFLICT OF INTEREST CODE WHICH SUPERSEDES ALL PRIOR CONFLICT OF INTEREST CODES AND AMENDMENTS PREVIOUSLY ADOPTED WHEREAS, the Political Reform Act of 1974, Government Code Section et seq. ( the Act ), requires a local government agency to adopt a Conflict of Interest Code pursuant to the Act; and WHEREAS, the Orange County Sanitation District ( District ) has previously adopted a Conflict of Interest Code and that Code now requires updating; and WHEREAS, amendments to the Act have in the past and foreseeably will in the future require conforming amendments to be made to the Conflict of Interest Code; and WHEREAS, the Fair Political Practices Commission has adopted a regulation, 2 California Code of Regulations, Section 18730, which contains terms for a standard model Conflict of Interest Code, which, together with amendments thereto, may be adopted by public agencies and incorporated by reference to save public agencies time and money by minimizing the actions required of such agencies to keep their codes in conformity with the Political Reform Act; and WHEREAS, the reorganization of the District workforce resulted in the reclassification of a position; and WHEREAS, the District s existing Conflict of Interest Code must be amended in order to reflect the current positions of those designated employees that are required to file statements of economic interests OCSD 18-XX

10 NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. The terms of 2 California Code of Regulations, Section 18730, any amendments to it duly adopted by the Fair Political Practices Commission, and all additional guidance by the Fair Political Practices Commission, are hereby incorporated by reference and, together with the 2017 Conflict of Interest Code for the Orange County Sanitation District, including Exhibits A and B in which members and employees are designated and disclosure categories are set forth, constitute the Conflict of Interest Code of the Orange County Sanitation District. Section 2. The provisions of all Conflict of Interest Codes and Amendments thereto previously adopted by the Orange County Sanitation District are hereby superseded. Section 3. The Filing Officer is hereby authorized to forward a copy of this Resolution to the Clerk of the Orange County Board of Supervisors for review and approval by the Orange County Board of Supervisors as required by California Government Code Section PASSED AND ADOPTED at a regular meeting of the Board of Directors held April 25, Gregory C. Sebourn, PLS Board Chairman ATTEST: Kelly A. Lore, MMC Clerk of the Board OCSD 18-XX

11 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 18-XX was passed and adopted at a regular meeting of said Board on the 25th day of April 2018, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 25th day of April Kelly A. Lore, MMC Clerk of the Board of Directors Orange County Sanitation District OCSD 18-XX

12 2018 CONFLICT OF INTEREST CODE FOR THE ORANGE COUNTY SANITATION DISTRICT The Political Reform Act, Government Code Sections 81000, et seq., requires state and local government agencies to adopt and promulgate Conflict of Interest Codes. The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs. Section 18730) which contains the terms of a standard Conflict of Interest Code, which may be incorporated by reference in an agency s code. After public notice and hearing, it may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730, any amendments to it duly adopted by the Fair Political Practices Commission, and all additional guidance by the Fair Political Practices Commission, are hereby incorporated by reference. This regulation and the attached Appendix designating officials and employees and establishing disclosure categories, shall constitute the Conflict of Interest Code of the Orange County Sanitation District. Designated employees shall file statements of economic interests with the District s Clerk of the Board who will make the statements available for public inspection and reproduction (Government Code Section 87500). Upon receipt of the statements of the Orange County Sanitation District Board of Directors, Orange County Sanitation District Financing Corporation, General Manager, General Counsel, Assistant General Manager, Director of Engineering, Director of Finance & Administrative Services, Director of Operations & Maintenance, Director of Environmental Services, Director of Human Resources, and the Clerk of the Board, the Filing Officer shall make and retain a copy and forward the original of these statements to the Clerk of the Orange County Board of OCSD XX-4

13 Supervisors. Statements for all other designated employees will be retained by the Filing Officer. The following designated employees shall file statements of economic interests electronically with the Clerk of the Orange County Board of Supervisors: Orange County Sanitation District Board of Directors, Orange County Sanitation District Financing Corporation, General Manager, General Counsel, Assistant General Manager, Director of Finance and Administrative Services, Director of Engineering, Director of Finance & Administrative Services, Director of Operations & Maintenance, Director of Environmental Services, Director of Human Resources, and the Clerk of the Board. The District s Filing Officer (Clerk of the Orange County Sanitation District Board of Directors) will thereafter verify the completion of the filing statements. If the District s Filing Officer receives any statements of economic interests by other means, the Filing Officer shall make and retain a copy and forward the original of these statements to the Clerk of the Orange County Board of Supervisors. Statements for all other designated employees will be retained by the District s Filing Officer OCSD XX-5

14 EXHIBIT A ORANGE COUNTY SANITATION DISTRICT LIST OF DESIGNATED POSITIONS CONFLICT OF INTEREST CODE Designated Positions Accounting Supervisor Assistant General Manager Buyer Capital Improvement Program Project Manager Chief Plant Operator Clerk of the Board Construction Inspection Supervisor Construction Inspector Consultant Contracts & Purchasing Manager Contracts Administrator Contracts Supervisor Controller Deputy Clerk of the Board Director of Engineering Director of Environmental Services Director of Finance & Administrative Services Director of Human Resources Director of Operations & Maintenance Engineer Engineering Manager Engineering Supervisor Environmental Laboratory & Ocean Monitoring Manager Environmental Supervisor Facilities Manager General Counsel General Manager Human Resources & Risk Manager Human Resources Supervisor Information Technology Manager Information Technology Supervisor Information Technology Systems & Operations Manager Laboratory Supervisor Maintenance Manager Maintenance Superintendent Disclosure Categories OC-05 OC-01 OC-05 OC-41 OC-05 OC-05 OC-05 OC-10 OC-30 OC-05 OC-05 OC-05 OC-05 OC-05 OC-41 OC-41 OC-41 OC-41 OC-41 OC-29, OC-41 OC-05 OC-05 OC-05 OC-29 OC-05 OC-01 OC-01 OC-11 OC-11 OC-08 OC-08 OC-08 OC-21 OC-05 OC OCSD XX-6

15 Maintenance Supervisor Materials Control Supervisor Operations Manager Operations Supervisor Orange County Sanitation District Financing Corporation Board of Directors Principal Accountant Principal Contracts Administrator Principal Financial Analyst (deletion) (reclassified as Principal Staff Analyst) Principal Human Resources Analyst *Principal Staff Analyst (addition) Public Affairs Supervisor Purchasing Supervisor Safety & Health Supervisor Secretary of the Orange County Financing Corporation Senior Buyer Senior Construction Inspection Supervisor Senior Construction Inspector Senior Contracts Administrator Senior Engineer Senior Scientist Source Control Supervisor Treasurer of the Orange County Financing Corporation OC-05 OC-05 OC-05 OC-05 OC-01 OC-41 OC-05 OC-12 OC-11 OC-05; OC-12 OC-05 OC-05 OC-05 OC-05 OC-05 OC-05 OC-10 OC-05 OC-05 OC-21 OC-29 OC-41 *The following amendments are made: Principal Staff Analyst (OC-05; OC-12) ADDITION Principal Financial Analyst (OC-12) DELETE (Reclassified to Principal Staff Analyst) OCSD XX-7

16 EXHIBIT B ORANGE COUNTY SANITATION DISTRICT Disclosure Category OC-01 OC-05 OC-08 OC-10 OC-11 OC-12 DISCLOSURE CATEGORIES CONFLICT OF INTEREST CODE Disclosure Description All interests in real property in Orange County or the District, as well as investments, business positions and sources of income (including gifts, loans and travel payments). All investments in, business positions with and income (including gifts, loans and travel payments) from sources that provide services, supplies, materials, machinery, equipment (including training and consulting services) used by the department or District, as applicable. All investments in, business positions with and income (including gifts, loans and travel payments) from sources that develop or provide computer hardware/software, voice data communications, or data processing goods, supplies, equipment, or services (including training and consulting services) used by the department or District, as applicable. All investments in, business positions with and income (including gifts, loans and travel payments) from sources that are engaged in any real estate activity including, but not limited to real estate appraisal, development, construction, planning/architectural design, engineering, sales, brokerage, leasing, lending, insurance, rights of way, and/or studies; and/or property or facilities management/maintenance/custodial and utility services as used by the department or provides capital for the purchase of property used or sold by Orange County or the District. All interests in real property in Orange County or located entirely or partly within District boundaries, as well as investments in, business positions with and income (including gifts, loans and travel payments) from sources that are engaged in the supply of equipment related to (i) recruitment, employment search & marketing, classification, training, or negotiation with personnel; (ii) employee benefits; and (iii) health and welfare benefits. All interests in real property in Orange County, as well as investments in, business positions with and income (including gifts, loans and travel payments) from sources that invest funds or engage in the business of insurance including, but not limited to insurance companies, carriers, holding companies, underwriters, brokers, solicitors, agents, adjusters, claims managers and actuaries; from financial institutions including but not limited to, banks, savings & loan associations and credit unions or sources that have filed a claim, or have a claim pending, against Orange County OCSD XX-8

17 EXHIBIT B ORANGE COUNTY SANITATION DISTRICT Disclosure Category OC-21 OC-29 OC-30 OC-41 DISCLOSURE CATEGORIES CONFLICT OF INTEREST CODE Disclosure Description All investments in, business positions with and income (including gifts, loans and travel payments) from sources that provide laboratory or chemical related goods, supplies, equipment, or services (including training and consulting services). All investments in, business positions with and income (including gifts, loans and travel payments) from sources that are subject to inspection or regulation by the department. Consultants shall be included in the list of designated employees and shall disclose pursuant to the broadest category in the code subject to the following limitation: The Department Head/Director/General Manager/Superintendent/etc. may determine that a particular consultant, although a designated position, is hired to perform a range of duties that is limited in scope and thus is not required to fully comply with the disclosure requirements in this section. Such written determination shall include a description of the consultant s duties and, based upon that description, a statement of the extent of disclosure required. The determination of disclosure is a public record and shall be filed with the Form 700 and retained by the Filing Officer for public inspection. All interests in real property in Orange County or the District, as applicable, as well as investments in, business positions with and income (including gifts, loans and travel payments) from sources that provide services, supplies, materials, machinery, vehicles, or equipment (including training and consulting services) used by the department or District, as applicable OCSD XX-9

18 ADMINISTRATION COMMITTEE AGENDA REPORT Orange County Sanitation District Meeting Date 04/11/18 Item Number 3 To Bd. of Dir. 04/25/18 Item Number FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance & Administrative Services SUBJECT: PROPOSED PURCHASING ORDINANCE NO. OCSD-XX GENERAL MANAGER'S RECOMMENDATION Recommend to the Board of Directors to: A. Introduce Ordinance No. OCSD-XX, entitled An Ordinance of the Board of Directors of the Orange County Sanitation District Establishing Requirements and Procedures for the Purchase of Goods, Services, and Public Works Projects; and Repealing Ordinance No. OCSD-47 ; B. Motion to read Ordinance No. OCSD-XX by title only and waive reading of said entire Ordinance on April 25, 2018; C. Set May 23, 2018 as the date for the second reading and adoption of Ordinance No. OCSD-XX; and D. Direct the Clerk of the Board to publish summaries of the Ordinance as required by law. BACKGROUND The proposed Purchasing Ordinance sets forth the requirements that apply to the Orange County Sanitation District's (Sanitation District) purchase of goods and services. These requirements are currently set forth in Ordinance No. OCSD-47. The proposed Ordinance updates and reorganizes the requirements set forth in Ordinance No. OCSD-47 and clarifies several individual requirements and procedures. The Ordinance, for example, modifies procedures whereby an aggrieved bidder or proposer may protest the solicitation process and/or the award of a contract and permits the Sanitation District more flexibility to award master contracts best suited to the Sanitation District s needs. Purpose. The Ordinance is designed to ensure that (1) the Sanitation District complies with state law requirements governing procurement; (2) the Sanitation District obtains quality goods and services at the lowest price and/or the best overall value; (3) purchasing decisions are transparent for the public; and (4) the procurement process is fair to prospective contractors while serving the interests of the Sanitation District's ratepayers. The Ordinance also delegates spending authority to the Standing Committees and the General Manager within specified limits Page 1 of 4

19 Competitive Selection in General. Depending on the nature of the procurement, the Ordinance generally requires the Sanitation District to select contractors based on either competitive bids or competitive proposals. Under a competitive bid process, the Sanitation District issues a notice inviting bids. Prospective contractors then submit sealed bids and the Sanitation District awards the contract to the lowest responsive, responsible bidder. Under a competitive proposal process, the Sanitation District issues a request for proposals. Prospective contractors then submit sealed proposals and the Sanitation District awards the contract to the proposal that best meets the criteria specified in the request for proposals. The winning proposal may or may not be the proposal that offered the lowest price. Exceptions to Competitive Selection. In exceptional circumstances, the Ordinance allows the Sanitation District to select contractors without any competitive process. The Ordinance allows the Sanitation District, for example, to award a contract on a "sole source" basis when the goods or services in question are unique or only available from one source. The Ordinance also allows the Sanitation District to award contracts without any competitive process as may be necessary to respond to an emergency. Types of Procurements. The Ordinance sets forth different requirements for four types of procurements: (1) goods and services (other than professional services); (2) professional services (other than professional design services); (3) professional design services; and (4) public works construction. The Ordinance generally requires the Sanitation District to purchase goods and services, other than professional design services, based on the lowest price. In contrast, however, the Ordinance generally requires the Sanitation District to award professional design service contracts to the most qualified firm, so long as the proposed price is fair and reasonable. Finally, pursuant to State law, the Ordinance generally requires the Sanitation District to award contracts for public works construction to the lowest responsive, responsible bidder. Master Contracts. The Ordinance revises the procedures to award master contracts to pre-qualified firms to allow the Sanitation District increased flexibility to identify a variety of disciplines and categories of services required and enable the Sanitation District to select a single firm due to a unique qualification or circumstance, subject to the best interests of the Sanitation District. This Ordinance also increases the task order dollar limits to maximize the effectiveness of this procurement tool and establishes a lower threshold of $25,000 below which the Director of Engineering may solicit a proposal from a single firm for low cost and/or specialized work. Bid Protests. The Ordinance requires procedures whereby a bidder or proposer may challenge the Sanitation District's solicitation process and/or the proposed award of a contract. A bidder or proposer may challenge the solicitation process on the grounds that a free and open competition has not taken place, or cannot take place, and/or that a particular specification or requirement is impractical, unduly restrictive, or ambiguous. A bidder or proposer may also challenge the proposed award of a contract on the grounds that a free and open competition has not taken place. Delegation of Spending Authority. In the interest of efficiency, the Ordinance delegates specified spending authority to the General Manager for task orders. The Ordinance Page 2 of 4

20 increases the threshold at which the General Manager may approve task orders to $300,000, including contingencies. General Manager Policies and Procedures. Under the proposed Ordinance, the General Manager will continue to adopt detailed policies and procedures governing procurement in order to implement the requirements of the Ordinance. The proposed revisions to the existing policies and procedures are also provided for the Board s review. RELEVANT STANDARDS CA Public Contract Code Section CA Government Code Section 4526; Ensure the public s money is wisely spent PROBLEM The Sanitation District last updated its Purchasing Ordinance in 2015 and now requires amendments to the existing requirements to improve its efficiency to purchase goods and services required by the Sanitation District. PROPOSED SOLUTION Adopt an Ordinance with the new proposed purchasing requirements and authority based on Sanitation District s staff thorough review and analysis of the limitations of the existing ordinance. TIMING CONCERNS April Presentation to Operations Committee. April Introduction of the Ordinance to Administration Committee. April Introduction and first reading of the Ordinance to the Board of Directors. May Second Reading and Adoption of the Ordinance. June 23, Ordinance takes effect. RAMIFICATIONS OF NOT TAKING ACTION Existing Purchasing Ordinance will remain in effect without modifications. PRIOR COMMITTEE/BOARD ACTIONS April Informational presentation to Operations Committee. ADDITIONAL INFORMATION Under Government Code Section 54202, the Sanitation District must adopt policies and procedures governing the purchase of supplies and equipment. Government Code Section 4526 applies to the purchase of professional services from private architects, landscape architects, engineers, environmental professionals, land surveyors, and Page 3 of 4

21 construction managers. Under Section 4526, the Sanitation District must select the specified professionals based on demonstrated competence and the professional qualifications necessary for the satisfactory performance of the services required. Section 4526 allows the Sanitation District to adopt, by Ordinance, procedures ensuring that the specified services are engaged based on demonstrated competence and professional qualifications at fair and reasonable prices. Under Public Contract Code Section 20783, the Sanitation District must award contracts for public works construction worth more than $35,000 to the lowest responsive, responsible bidder. The Public Contract Code otherwise imposes a variety of requirements on the award of public works construction contracts. CEQA Adoption of the Ordinance is not a "project" subject to CEQA because it constitutes general policy and procedure making that will not result in any physical impact on the environment. FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website ( with the complete agenda package: Draft Ordinance No. OCSD-XX (redline & clean) Ordinance Matrix Page 4 of 4

22 ORDINANCE NO. OCSD-47XX AN ORDINANCE OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT ESTABLISHING REQUIREMENTS AND PROCEDURES FOR THE PURCHASE OF GOODS, SERVICES, AND PUBLIC WORKS PROJECTS; AND REPEALING ORDINANCE NO. OCSD OCSD-47XX-1

23 CONTENTS Article 1. General Provisions... 5 Section Purpose and Scope... 5 A. Purpose... 5 B. Scope... 5 Section Title... 5 Section Definitions... 5 Section Rules and Guidelines... 5 Section Budgeted Funds... 6 Section The Purchasing Manager... 6 A. Duties... 6 B. Requests for Procurement Section Exceptions to Competitive Selection... 6 A. Sole Source Procurement....6 B. Emergency Procurement Section Evaluation Committees... 7 Section Severability... 7 Article 2. Goods and Services... 7 Section Purpose and Scope...7 A. Purpose B. Scope Section Selection Process...8 A. Competitive Sealed Bids...8 B. Award... 8 C. Equal Bids... 8 Section Exceptions... 8 A. Small Procurements... 8 B. Cooperative Purchases... 9 C. Multi-Step Sealed Bidding... 9 D. Competitive Sealed Proposals... 9 E. Critical Time-Sensitive Procurements F. Renewals OCSD-47XX-2

24 G. Sole Source and Emergency Procurements H. Master Contracts; Maintenance and Repair Services Less Than or Equal to $100, Article 3. Professional Services Section Purpose and Scope A. Purpose B. Scope Section Selection Process A. Request for Proposals Evaluation and Ranking of Proposals C. Negotiation of Contract Section Exceptions A. Sole Source and Emergency Procurements Contractors Reporting to the Board C. Procurements of $5,000 or less D. Master Contracts; Professional Services Less Than or Equal to $100, Article 4. Professional Design Services Section Purpose and Scope A. Purpose Scope Section Selection Process A. Competitive Selection Professional Design Services Greater Than $200, C. Master Contracts; Professional Design Services Less Than or Equal to $200, Section Exceptions A. Sole Source and Emergency Procurements B. Continuation of Services C. Procurements of $5,000 or less Article 5. Public Works Projects Section Purpose and Scope A. Purpose Scope OCSD-47XX-3

25 Section Selection Process A. Design-Bid-Build B. Design-Build...20 C. Prequalification...20 Section Exceptions...21 A. Emergencies and Calamities B. Specification of Brand or Trade Name Article 6. Protests Section Solicitation Protests Section Award Protests Section Delay in Award Section Remedies Section Public Documents Article 7. Delegation of Authority to Award Contracts Section Award Authorization A. Delegation by General Manager B. Original Contracts and Contingencies C. Amendments and Change Orders Section Task Orders Section Time Extensions to Public Works Projects Article 8. Ethics Section Unlawful Consideration Prohibited Section Conflicts of lnterest A. Compliance with the Political Reform Act B. Compliance with Government Code C. Requirements Applicable to Consultants Article 9. Definitions Article 10. Miscellaneous Section Noncompliance Section Effective Date Section Repeal of Ordinance No. OCSD Section Certification and Publication OCSD-47XX-4

26 NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District does hereby ORDAIN: Article 1. General Provisions Section Purpose and Scope A. Purpose. This Ordinance is intended to: B. Scope. (1) Comply with certain provisions of Sstate law requiring the District to adopt written purchasing procedures; (2) Ensure that the District complies with Sstate law governing the award of Contracts for Goods, Services, and Public Works Projects; (3) Establish procedures to ensure that the District obtains quality goods and competent services at the best price and/or the best value; (4) Delegate certain spending authority to District employees in the interest of efficient administration; (5) Ensure that purchasing decisions are transparent for the public; and (6) Ensure that Contracts are awarded through a process that is fair to prospective Contractors and in the best interests of the District. This Ordinance governs the purchase of Goods, Services and the award of Contracts for Public Works Projects. Section Title This Ordinance may be referred to as the District's "Purchasing Ordinance." Section Definitions As used throughout this Ordinance, the terms set forth in Article 9 shall have the meanings as defined therein, unless the context in which they are used clearly requires a different meaning, or a different definition is prescribed for a particular Article or provision. Section Rules and Guidelines The General Manager shall implement the requirements of this Ordinance through policies, rules, and guidelines governing the purchase of Goods and Services, and the award of Contracts for Public Works Projects OCSD-47XX-5

27 Section Budgeted Funds No Contract for the purchase of Goods, Services, or Public Works Projects shall be awarded unless and until the General Manager identifies funds in the current budget that are allocated to the purchase. Section The Purchasing Manager A. Duties. Consistent with the provisions of this Ordinance, the Purchasing Manager shall: (1) Conduct or supervise the procurement of, all Goods, Services, and Public Works Projects purchased by the District; and obtainreceive from Contractor all bids, proposals or other solicitation results; (2) Supervise and control inventories of supplies and materials. (1)(3) For each procurement, the Purchasing Manager shall determine Determine the type of procurement, term of the contract including number of renewals and any other contractual provisions necessary and in the best interest of the District. B. Requests for Procurement. When a Department desires to procure Goods and/or Services, the Department Director shall file a written Requisition, in advance of a procurement process, with the Purchasing Manager. The Requisition shall describe the Goods and/or Services to be acquired. Public Works procurements do not require a written Requisition, but will require the appropriate written approvals documented through a completen Engineering Capital Project Charter Budget Approval Form or an equivalent document. The Requisition shall describe the Goods and/or Services to be acquired. Section Exceptions to Competitive Selection Depending on the nature of the Contract and/or the circumstances, certain provisions of this Ordinance require that Contracts for Goods and/or Services be awarded based on Competitive Sealed Bids or Competitive Sealed Proposals. This Section 1.07 establishes certain general exceptions to competitive selection requirements for the procurement of Goods and Services. The exceptions set forth in this Section 1.07 do not apply to the award of Contracts for the construction of Public Works Projects. A. Sole Source Procurement Notwithstanding any other provision of this Ordinance, a Contract for Goods and/or Services may be awarded based on Sole Source Procurement, without soliciting bids or proposals as might otherwise be required, if the General Manager or his designee determines in writing that it is in the best interest of the District to award the Contract because the Goods and/or Services are (1) of a unique nature based on their quality, durability, availability, fitness or qualifications for a particular use; or (2) only available from one source. OCSD-47XX-6

28 B. Emergency Procurement. Notwithstanding any other provision of this Ordinance, a Contract for Goods and/or Services may be awarded through Negotiated Procurement, without soliciting bids or proposals as might otherwise be required, if the General Manager or his designee determines in writing that the District urgently needs the OCSD-47XX-7

29 Goods and/or Services in order to respond effectively to an emergency. For purposes of this Section 1.07, emergency procurements are those purchases that are required to prevent immediate interruption or cessation of necessary services or to safeguard life, property, or the public health and welfare. In addition, emergency procurements as used in this Section also include critical time sensitive purchases where time is of the essence, and the District does not have sufficient time to solicit bids or proposals. For emergency procurements greater than $100,000, the General Manager shall obtain the concurrence of the Chair of the District's Board of Directors or, if the Chair is unavailable, the Vice Chair, and such action shall be ratified by the Board of Directors at its next regular meeting. Section Evaluation Committees Evaluation committees convened in connection with procurements under this Ordinance shall generally be composed of District employees. In exceptional circumstances, however, the General Manager may appoint one or more persons not employed by the District to an evaluation committee if the General Manager determines that (1) evaluating proposals in connection with a particular procurement requires specialized expertise not available among District employees; (2) the procurement will impact another agency, and that agency desires to place a representative on the evaluation committee; or (3) it is otherwise in the District's interest to do so. Section Severability If any provision of this Ordinance, or any application thereof to any person or circumstance, is held invalid, such invalidity shall not affect any other provision of this Ordinance or application to any person or circumstance which can be given effect without the invalid provision or application. The provisions of this Ordinance are declared to be severable. Article 2. Goods and Services Section Purpose and Scope A. Purpose. California Government Code Sections et seq. requires the District to adopt written policies and procedures, including bidding requirements, governing the purchase of Goods and Services. This Article is intended to comply with Section B. Scope. The provisions of this Article 2 apply to Contracts for the purchase of Goods and Services other than Contracts for Professional Services (governed by Article 3) Professional Design Services (governed by Article 4), and Contracts for Public Works Projects (governed by Article 5). Section Selection Process C. Subject to the exceptions set forth in Section 2.03, the award of Contracts for the purchase of Goods and Services shall be based on Competitive Sealed Bidsthe competitive procurement methods set forth below. For each procurement, the Purchasing Manager shall OCSD-47XX-8

30 determine the type of procurement, term of the contract including number of renewals and any other contractual provisions necessary and in the best interest of the District. A. Competitive Sealed Bids. Subject to the exceptions set forth in Section 2.03, the award of Contracts for the purchase of Goods and Services shall be based on Competitive Sealed Bids. For each procurement, the Purchasing Manager shall: (1) Publish a Notice Inviting Bids that contains (a) a description of the Goods and/or Services required, (b) a description of the selection process, (c) bidder's security requirement, if applicable, (d) performance bond requirements, if applicable, and (e) such provisions, renewals, terms, and conditions, consistent with this Ordinance, that the Purchasing Manager determines are necessary, desirable, and/or advantageous to the District; Open Receive the Competitive (2) Sealed Bbids publicly at the time and place designated in the Notice Inviting Bids, and record the amount of each bid; and (3) Determine whether the bids are responsive to the Notice Inviting Bids. B. Award.: (4) After the bids are opened, take one of the following actions may be taken: (1)i. Award the Contract to the lowest Responsive and Responsible Bidder; (2)ii. Reject any and all bids presented and/or re-advertise the bid; or (3)iii. Declare that the Goods and/or Services may be acquired at a lower cost by negotiation in the open market and authorize the procurement in that manner. C.B. Equal Bids. If two or more Responsible Bidders submit the same lowest bid, the District may, in its discretion, accept either bid or a lower bid, if any, as may be obtained from one of the bidders through negotiation. C. Multi-Step Sealed Bidding. If the Purchasing Manager determines that it is impractical to initially prepare a description to support an award based on price, a process involving multi-step sealed bids may be utilizedthe Purchasing Manager may determines that a prequalification process is necessary and desirable for a particular procurement. The multi-step sealed bidding process requires the Purchasing Manager to involves (1) issueing a Request for Qualifications n Invitation for Bids requesting the submission of un-priced offersqualifications; and (2) issueing a subsequent InvitationNotice Inviting for Bids for priced offers from those vendors Contractors whose initial un-priced offerssubmissions were OCSD-47XX-9

31 deemed qualified under the criteria set forth in the initial InvitationRequest for Qualifications for Bids. Award under this process shall be based on the lowest Responsive and Responsible Bidder. D. Competitive SealedRequest for Proposals. If the Purchasing Manager determines in writing that the Competitive Sealed Bids procedure is not practical and/or not advantageous for the District in a particular case, one or more Contracts subject to this Article may be awarded based on Competitive Sealed Proposals. The Competitive SealedRequest for Proposals process may be used (1) for Goods and/or Services that prove difficult to quantify or describe, where proposers are provided the opportunity to offer different approaches or solutions; and/or (2) for critical, routine or recurring goods or services that require consideration of the broadest possible range of competing services, products and materials available, fitness of purpose, performance reliability, standardization, life cycle costs, delivery timetables, reliable supply, support logistics, diversification of available sources and/or other similar factors in addition to the price in the award of these contracts. Award under this process shall be based upon criteria that provide the best value for the District, wherein best value is not solely determined by price. Section Exceptions A. For this Section 2.03, the award of Contracts for the purchase of Goods and Services shall be based on the procurement methods set forth below. For each procurement, the Purchasing Manager shall determine the type of procurement, term of the contract including number of renewals and any other contractual provisions necessary and in the best interest of the District B.A. Small Procurements. (1) Procurements of $5,.000 $10,000 or Less. Contracts subject to this Article 2 with an estimated value of $5,000 $10,000 or less may be awarded without Competitive Sealed Bids if the Purchasing Manager determines that a Competitive Sealed Bids process would not result in a lower overall cost to the District. (2) Procurements of $50,000 or Less. Contracts subject to this Article 2 with an estimated value of $50,000 or less may be awarded by (a) soliciting at least three bids from identified vendors, and (b) awarding the Contract to the lowest Responsive and Responsible Bidder. If the Purchasing Manager cannot obtain at least three bids, the Contract may be awarded to the lowest Responsive and Responsible Bidder as long as the Purchasing Manager determines that the bid amount is fair and reasonable. (3) (3) Piecemealing Prohibited. Procurements shall not be artificially divided into different individual Contracts so as to keep each Contract amount below one of the monetary thresholds set forth in this Part A OCSD-47XX-10