We re here for you. Orange County Sanitation District Five-Year Strategic Plan November 2011

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1 Orange County Sanitation District Five-Year Strategic Plan Charles Gober Construction Inspector Proud OCSD Employee Since 2004 We re here for you.

2 Orange County Sanitation District Five-Year Strategic Plan

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4 Table of Contents OCSD Board of Directors Message from the General Manager ii iii Executive Summary 1 The Beyond 2012 Planning Framework 2 Overview 3 Mission Statement 4 Vision Statement 5 Core Values 6 Risk Register 7 Strategic Goals & Levels of Service 8 Goals Completed Since Environmental Stewardship 12 Business Principles 14 Wastewater Management 16 Workplace Environment 18 Appendix A: New Issue Paper 20 Appendix B: Previous Issue Papers 26 Appendix C: Glossary 41 i

5 OCSD Board of Directors Chair Vice Chair City Anaheim Brea Buena Park Cypress Fountain Valley Fullerton Garden Grove Huntington Beach Irvine La Habra La Palma Los Alamitos Newport Beach Orange Placentia Santa Ana Seal Beach Stanton Tustin Villa Park Yorba Linda Sanitary/Water Districts Costa Mesa Sanitary District Midway City Sanitary District Irvine Ranch Water District Orange County Board of Supervisors Larry Crandall Troy Edgar Active Director Harry Sidhu Roy Moore Fred Smith Prakash Narain Larry Crandall Sharon Quirk Silva Bill Dalton Joe Carchio Jeffrey Lalloway Tom Beamish Mark Waldman Troy Edgar Steven Rosansky Jon Dumitru Constance Underhill Sal Tinajero Michael Levitt David Shawver John Nielsen Brad Reese John Anderson James M. Ferryman Joy L. Neugebauer John Withers Janet Nguyen ii

6 Message from the General Manager Five Year Strategic Plan Update The past year posed another set of challenges for the Orange County Sanitation District, but our Board of Directors piloted us through and pushed for greater efficiencies and cost savings. Indeed, our State and Country continue to struggle economically but OCSD remains committed to our daily mission of protecting the public health and environment for the 2.5 million people we serve. One year from now, we will complete our half billion dollar upgrade to full secondary treatment ensuring that the water going to the ocean and the Groundwater Replenishment System is of the highest quality. One year ago, we made significant organizational changes to meet future challenges and ensure we are providing service to the tax payers of Orange County in a manner they have come to expect efficiently and effectively. We are proud that during these challenging times, we continue to innovate. Three major milestones occurred in 2011, including the start up of the fuel cell research project, groundbreaking for the Santa Ana River Interceptor relocation project and the commissioning of our new secondary treatment facilities to ensure their readiness to meet the December 2012 consent decree deadline. This strategic plan update recognizes our austere times. Specifically focused on internal operations and our back to basics philosophy to support our mission and vision, we continue to evolve and improve without adding staff and holding the line on costs. Our Board continues to drive our staff to make the most of existing resources. Last year we focused on preparing ourselves for the future, always recognizing the times we face and this year we continue that trend. Our Board continues to stress that staff focus on cost savings and driving efficiency at every level, and it is part of our everyday culture. I thank our Board of Directors for their support and leadership, and I am proud of our 2011 Strategic Plan Update that charts a course for the coming year. Also thank you to the Executive Management Team and our outstanding employees who are here protecting public health and the environment for our ratepayers. Respectfully submitted, James D. Ruth General Manager iii

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8 Executive Summary Five Year Strategic Plan Update In November 2007, the Board of Directors adopted a new comprehensive strategic plan to steer OCSD s efforts and engage the organization to envision service levels and operational needs for the next five years. The strategic plan is being updated to continue looking at a five year horizon. This year s update took a slightly different course as we made the decision to focus on our internal operations to make the most of tax dollars and continue our drive towards greater efficiencies. Driven by our mission, vision and core values, this 2011 Strategic Plan update maintains our aggressive efforts to meet the sanitation, health, and safety needs of the 2.5 million people we serve in a cost effective manner, while protecting the environment where we live. Since 2007, 79 percent of the strategic goals identified in the five year plan have been completed. As a result of the discussion at the October 19 workshop, four new goals were added, one modification to existing levels of service was made and a continuation of a previous goal was included in the plan. New Goals: Full Cost Recovery: Urban runoff division program Implement a direct charging mechanism to recover the cost of urban runoff treatment starting July 1, 2013 when the new rate structure is in place. Ocean Protection Undertake studies to determine the cause of benthic community changes near the ocean outfall and take corrective action to return affected areas to reference conditions. Updating the sewer service fee five year rate plan Prepare an updated five year rate schedule for Board consideration to go into effect July 1, Modification to Levels of Service: The level of service for biosolids will continue to be 95 percent recycled, with an exception of up to 12 percent to landfill during peak solids production through Continuation of previous Goal: Providing ongoing leadership development Maximize the development of a pool of dedicated and talented employees ready to lead OCSD into the future. The issue papers describing these goals and level of service are contained in Appendix A. This strategic plan continues to chart a focused roadmap of success for the future of the Orange County Sanitation District. It addresses critical issues and challenges, and communicates clear and concise future direction to OCSD staff. 1

9 Beyond 2012 Planning Framework In 2010, the General Manager directed the management team to take a critical look at how OCSD is allocating its resources to support its mission. During that summer, the executive team adopted a comprehensive approach to priority setting, strategic planning and budgeting, known as the Beyond 2012 Strategic Planning Framework. The planning framework is illustrated below and shows how the Board of Directors play a critical role in strategic planning and resource allocation. In 2011, staff will focus on fully implementing the planning framework that will unify and align our mission with strategic planning and budgeting. The strategic planning effort starts with the Board of Directors setting overall policy and priorities for the Sanitation District. Based on that policy direction, staff develops the annual operational plan and budget. 2

10 Overview Five Year Strategic Plan Update Since 1954, the Orange County Sanitation District has provided wastewater treatment to the residents and businesses of northern and central Orange County. It is the third largest wastewater treatment agency west of the Mississippi River. During fiscal year , OCSD collected and treated over 200 million gallons of wastewater each day, recycled 100 percent of its biosolids and reclaimed over 80 million gallons per day. In July 2002, the Board of Directors approved disinfecting the effluent and proceeding with the planning, design, and construction of facilities that will ultimately allow OCSD effluent to meet Federal Clean Water Act secondary treatment standards. The current disinfection program includes over $5 million annually for chemicals, while the estimated capital construction cost to meet secondary treatment standards is $649 million. OCSD is currently in the midst of a $2.9 billion, 20 year capital improvement program with an budget of nearly $130 million. Reclamation Plant No. 1 in Fountain Valley In addition to OCSD s partnership in the Groundwater Replenishment System and secondary treatment expansion, our capital improvement program includes critical rehabilitation of aging collection systems and treatment plant facilities, and upgrades to provide enhanced odor control and reduced air emissions. Against this backdrop of challenging issues, and to meet the large and complex needs of providing services to 2.5 million people in the most effective and efficient way possible, the strategic planning process began in 2007 to continually map a five year strategy. Treatment Plant No. 2 in Huntington Beach Beginning with gathering input from the staff, with the leadership of the Board of Directors, OCSD revisited its mission, vision, and values to allow all levels of the organization to take ownership in the strategic planning process. The original plan was adopted in November This is the fourth annual update to this five year strategic plan. 3

11 OCSD Mission Statement The Mission Statement is the basic foundation that defines why we exist. We protect public health and the environment by providing effective wastewater collection, treatment, and recycling. 4

12 OCSD Vision Statement Five Year Strategic Plan Update The Vision Statement supports the Mission Statement by expressing a broad philosophy of what the Orange County Sanitation District strives to achieve now and in the future in the delivery of services to our customers, vendors, other agencies, the general public, and each other. The Orange County Sanitation District is committed to: Making decisions in an open and honest way to produce optimum financial, environmental and societal results. Cooperating with other stakeholders to protect the ocean and regional water resources for the people we serve. Beneficially recycling wastewater, biosolids and other resources using safe and effective processes and systems. Developing the best possible workforce by providing employees with opportunities to advance their careers through enhanced growth, responsibility, and professional development. 5

13 Core Values The Core Values support the Mission and Vision Statements by expressing the values, beliefs, and philosophy that guides our daily actions. They help form the framework of our organization and reinforce our professional work ethic. Honesty, Trust and Respect We aspire to the highest degree of integrity, honesty, trust, and respect in our interaction with each other, our suppliers, our customers, and our community. Teamwork and Problem Solving We strive to reach OCSD goals through cooperative efforts and collaboration with each other and our constituencies. We work to solve problems in a creative, cost effective and safe manner, and we acknowledge team and individual efforts. Leadership and Commitment We lead by example, acknowledging the value of our resources and using them wisely and safely to achieve our objectives and goals. We are committed to act in the best interest of our employees, our organization, and our community. Learning/Teaching We continuously develop ourselves, enhancing our talents, skills, and abilities, knowing that only through personal growth and development will we continue to progress as an agency and as individuals. Recognition/Rewards We seek to recognize, acknowledge, and reward contributions to OCSD by our many talented employees. 6

14 Risk Register Five Year Strategic Plan Update The Risk Register is an annual compilation of the various risks facing the Orange County Sanitation District, as seen by the Sanitation District s management team. The 2011 Risk Register Update was conducted as the world was reeling from the effects of the Japanese and New Zealand earthquakes. The Japanese earthquake, in particular, brought home that one disaster could have multiple consequences; including earthquake, tsunami, nuclear mishap and even supply chain problems. The world also continued to make a slow recovery from the financial crash of In addition to spotting downside risks, management was asked to also identify opportunities items that had an upside where the risk was that the opportunity might be missed. The 2011 Risk Register Update identified these as the top risks: Disaster and aftermath refers to natural disasters and their consequences, such as the need for business continuity, with earthquakes being the most frequently mentioned natural disaster. California financial instability/california takes property taxes away points to the continuing monetary turmoil in California state government and the possibility that decisions by the state could impact OCSD funds collected for state assistance. Lack of support for rate increases refers to the risk that the public might not be disposed to provide support if rate increases are needed in Retirement of experienced employees reflects the fact that many OCSD employees are nearing or are eligible for retirement. Difficult economy refers to the possibility that tight economic times may continue to affect the District s opportunities to invest, borrow, and make necessary purchases. The top opportunities for the 2011 update are: Hire good staff refers to the opportunity to find and hire competent and experienced people during a time when many are available. Be prepared for emergencies and aftermath involves the opportunity to become ready to respond to a variety of emergencies that may arise in the future. Train staff for new facilities and tasks, as well as further transition planning and training as new construction finishes and comes online, and as long time employees retire, there is an opportunity to prepare OCSD and its staff for these changes. Staff is in the process of developing plans to mitigate the identified risks and take advantage of the opportunities. For example, the Sanitation District recently completed a major reorganization of its staff to streamline its operations and eliminate duplicative functions as we prepare to commission full secondary treatment in We modified our hiring process by moving to an open recruitment approach to accelerate the hiring of employees who are needed to operate and maintain the new facilities coming online in the next two years. In addition, we negotiated labor agreements with our employees bargaining units that will keep salary and budget costs at a reasonable level for the next several years. 7

15 Strategic Goals & Levels of Service On the following pages are the strategic goals and levels of service for the next five years. New goals for this report are noted and all goals include a projected completion time. The levels of service standards are measures of service that are seen by our customers as high priorities. Goals and levels of service are divided into four areas: Environmental Stewardship OCSD participates collaboratively in the protection of regional water resources for the benefit of the people we serve. Business Principles OCSD makes every decision based on short and long term environmental, societal, and financial impacts (the triple bottom line). Wastewater Management OCSD beneficially reuses and recycles water and other resources using safe and effective wastewater systems. Workplace Environment OCSD provides an environment of partnership, growth, opportunity, responsibility and accountability. 8

16 Goals completed since adoption of the 2007 five-year plan Environmental Stewardship 1. Contaminants of Potential Concern (CPC) Complete three phase testing and analysis of 550+ CPC, prepare report on findings and recommendations, develop initial source control strategy if there are CPCs identified that require control. Completed FY Management System for Environmental Compliance Implement a management control system for environmental compliance information that incorporates a dashboard style report. Completed FY Engine Emission Compliance Complete study to evaluate alternatives for complying with lower emission limits in the South Coast Air Quality Management s Rule Initiate planning and design of demonstration testing of the most promising technology(s) identified in the study. Completed FY Fuel Cell Evaluation Start up 300 kw demonstration unit. Completed FY10 11 a. Evaluate cost feasibility of replacing or supplementing CGS engines with fuel cells. Completed FY Climate Change/Environmental Footprint Initiative Develop an overall strategy for responding to climate change regulations and proactively adapting to the effects of climate change including identification and mitigation of greenhouse gases and adapting to any impacts to our facilities and operations. Completed FY a. Develop models to estimate greenhouse gas and traditional pollutant emissions for determination of our environmental footprint. (Functional predictive greenhouse gas model completed.) Completed in FY Reclaiming Santa Ana River Interceptor Line (SARI) Flows Meet with stakeholders, develop a list of obstacles that need to be overcome to reclaim the SARI Line and develop a strategy to obtain regulatory approval of reclaiming SARI Line flows. This goal was cancelled in FY due to inability to obtain regulatory approval. 9

17 Business Principles 1. Sewer Rate for Green Development Submit for Board approval an amendment to sewer rate ordinance with incentives for green developments. Completed FY Complete Facilities Master Plan Update Complete a comprehensive update of the Facilities Master Plan and obtain Board approval. Completed FY Enterprise Information Technology Strategic Plan Complete a District wide Information Technology Strategic Plan. Completed FY Updating OCSD s Risk Register Review and update OCSD s risk register to include an assessment of technical, regulatory, financial, and political risks (among others) and possible mitigation strategies. Completed FY Annex Unincorporated Areas With Board concurrence, annex unincorporated areas into OCSD s service area. Completed FY Review Interagency Agreements Conduct a comprehensive review of agreements with the Santa Ana Watershed Project Authority and Irvine Ranch Water District, and, if appropriate, reopen for discussion. Completed FY Strategic Business Plan With Board concurrence, annually update and implement the Strategic Plan and Business Plan. Completed FY Business Accountability Charters Create Business Accountability Charters for each department, consistent with those developed by managers and supervisors. Completed FY Chemical Supplies Develop a Chemical Sustainability Plan that provides OCSD with options for obtaining wastewater treatment chemicals during chemical shortages, emergencies or complete stoppages. Completed FY Full Cost Recovery Conduct a comprehensive review of the Sanitation District s Urban Runoff Program to ensure a fair share recovery of costs for services. Completed in FY

18 Wastewater Management Five Year Strategic Plan Update 1. Groundwater Replenishment System Maximize the production of GWR System product water to augment and protect the Orange County groundwater basin with a goal of 70 mgd. Completed FY Sustainable Biosolids Program Complete new in county Compost Take Back Program Plan strategy. Completed FY a. Evaluate the feasibility of deep injection/methane recovery including commissioning a study of the geological formations below Plants 1 and 2, and availability and acceptability of any existing wells. Completed FY b. Evaluate option of processing some biosolids at the City of Los Angeles Terminal Island demonstration well. Completed FY Implement Energy Master Plan After the completion of the plan, assess final recommendations to ensure adequate power resources and energy management. Completed FY Disinfection of Final Effluent Develop a cost effective program to sustain protection of public health associated with bacteria in the effluent and incorporate program elements into our NPDES Permit. Completed in FY Workplace Environment 1. Space Planning Study Recommendations Complete relocation of staff housed in Information Technology Trailers to the Administration Building, Control Center and Building 6. Completed FY Improve the Sanitation District Security Provide long term security enhancements at both treatment plants and within OCSD s Collections System. Completed FY Safety and Health Strategic Plan Develop and implement a Safety and Health Strategic Plan for all OCSD activities. Completed FY Human Resources Strategic Plan Design, develop and implement human resources policies, practices, systems and tools to ensure OCSD has a workforce that meets future needs of OCSD and the public it serves. Completed FY Succession Plan Implement the Succession Management Plan including management training and the creation of a Leadership Academy. Completed FY North County Yard Open the North County Maintenance Yard and complete the relocation of selected staff and equipment to the facility. Implement flex space for added agency wide needs as appropriate. This goal was cancelled in FY and the facility will be leased or sold. 11

19 Environmental Stewardship Goals OCSD participates collaboratively in the protection of regional water resources for the benefit of the people we serve. 1. Santa Ana River Interceptor Line Relocation Work in conjunction with the County of Orange and the Federal Government to relocate the Santa Ana River Interceptor Line by June Targeted for completion in FY Engine Emission Compliance Implement capital improvements or operational modifications in order to achieve compliance. Targeted for completion in FY Fuel Cell Evaluation Evaluate performance and fuel clean up effectiveness. Targeted for completion in FY Environmental Stewardship Levels of Service OCSD will protect public health and the environment FY Results Level of Service Target Accept dry weather urban runoff diversion flows without imposing fees. 1.5 mgd Up to 4 mgd Maximum off site odor impact Reclamation Plant No. 1 Treatment Plant No D/T 48 D/T 14 D/T by D/T by 2018 Air emissions health risk to community and employees, per one million people (for each treatment plant) 9 < 10 No Notices of Violation (NOVs) with air, land, and water permits 1 0 OCSD will be a good neighbor Odor complaint response: Treatment Plants within 1 hour Collection System within 1 working day Number of odor complaints: Reclamation Plant No. 1 Treatment Plant No. 2 Collection System *These numbers do not reflect those odors listed as, cannot determine source. (added in FY ) FY Results 100% 100% Level of Service Target 100% 100% Respond to collection system spills within 1 hour 100% 100% 12

20 Both the fuel cell and a hydrogen fueling station have been installed and operational at Plant No. 1. The research project consists of constructing a fuel cell to utilize a portion of OCSD s digester gas (a renewable resource ) at Plant No. 1 to generate both electricity for on site use and extract hydrogen gas for fueling automobiles. This technology could potentially replace the central power generation system engines, thus reducing air emissions while producing power, heat, and hydrogen fuel. 13

21 Business Principles Goals OCSD makes every decision based on short and long term environmental, societal, and financial impacts (the triple bottom line). 1. Local Sewer Services Transfer back to cities and sanitary districts the local sewer assets that are not serving a true regional purpose. Targeted for completion in FY Full Cost Recovery (new) Implement a direct charging mechanism to recover the full cost of urban runoff treatment starting July 1, 2013 when the new rate structure is in place. Targeted for completion in FY Five Year Rate Plan (new) Prepare an updated 5 year rate schedule for Board consideration to go into effect July 1, Targeted for completion in FY

22 Business Principles Levels of Service Five Year Strategic Plan Update OCSD will exercise sound financial management FY Results Level of Service Target COP service principal and interest < O&M expenses < O&M expenses Annual user fees Sufficient Sufficient to cover all O&M requirements Actual collection, treatment, and disposal costs per million gallons in comparison with the budget 8.70% under budget 10% of budget Annual variance from adopted reserve policy % Budgeted reserves Maintain AAA Bond Rating 100% 100% OCSD will be responsive to our customers FY Results Level of Service Target Respond to public complaints or inquiries regarding construction projects within 1 working day New connection permits processed within one working day 100% > 90% 100% >90% OCSD Dollars per Year $700 $600 $500 $400 Comparison of Single-Family Residence Rates (July 2010) $613 $300 $244 $200 $100 $ $141 LACSD Oro Loma IRWD Sacramento OCSD East Bay MUD Union Dublin Fresno Comparison Agencies Contra Costa City of LA Vallejo San Diego San Francisco 15

23 Wastewater Management Goals OCSD beneficially reuses and recycles water and other resources using safe and effective wastewater systems. 1. Sustainable Biosolids Program Conduct research to reduce the amount of biosolids produced and increase digester gas production. Targeted for completion in FY Odor Control Implement odor control projects at Plant 1 (trickling filters) and Plant 2 (solids loading facility) by Targeted for completion in FY and FY Ocean Protection (new) Undertake studies to determine the cause of benthic community changes near the ocean outfall and take corrective action to return affected areas to reference conditions. Targeted for completion in FY A portion of the treated wastewater from our two treatment plants is released over four miles out into the ocean at a depth of two hundred feet below the surface of the water. To ensure that the marine environment and public health are protected, the Orange County Sanitation District has maintained an extensive ocean monitoring program for over 25 years. 16

24 Wastewater Management Levels of Service Five Year Strategic Plan Update OCSD will provide a safe reliable effluent for recycling Concentration of emerging chemical constituents of concern in Plant No. 1 secondary effluent Meet GWRS specification requirements for Plant 1 secondary effluent FY Results Level of Service Target NDMA < 150 ppt 1,4 Dioxane < 5 ppb 5 NTU Thirty day geometric mean of total coliform bacteria in effluent after initial dilution of 250: < 1,000 mpn Compliance with core industrial pretreatment requirements 100% 100% Meet secondary treatment standards OCSD will manage flows reliably BOD 29 mg/l TSS 24 mg/l FY Results BOD 100 mg/l BOD 30 mg/l by 2012 TSS 55 mg/l TSS 30 mg/l by 2012 Level of Service Target Frequency of unplanned use of emergency one mile (78 inch diameter) outfall 0 0 per year during dry weather less than once per 3 years in peak wet weather Sanitary sewer spills per 100 miles 0.23 < 2.1 Contain sanitary sewer spills within 5 hours 100% 100% OCSD s effluent will be recycled FY Results Level of Service Target Provide up to 104 mgd specification effluent to the Groundwater Replenishment System 82.7 mgd 104 mgd OCSD will implement a sustainable biosolids management program National Biosolids Partnership Certification for Biosolids Environmental Management System Percent of biosolids recycled *Exception: Percent of biosolids recycled during peak solids production through 2017 FY Results 5 Year Recertification July % recycled 0% landfill 100% recycled* 0% landfill Level of Service Target Maintain certification > 95% recycled < 5% landfill > 88% recycled* < 12% landfill Respond to all biosolids contractor violations within a week of violation notice 100% 100% 17

25 Workplace Environment Goals OCSD provides an environment of partnership, growth, opportunity, responsibility and accountability. 1. Providing Ongoing Leadership Development Maximize the development of a pool of dedicated and talented employees ready to lead OCSD into the future. Targeted for completion in FY BLAST is an internal program that is being developed by employees for employees with the ongoing support from management. BLAST continuously promotes and offers opportunities for lifelong learning in an effort to build OCSD s bench for future leadership positions. 18

26 Workplace Environment Levels of Service OCSD will take care of its people FY Results Level of Service Target Training hours per employee per year Employee injury incident rate accidents per 100 employees 5 Industry average 4.6 Meet mandatory OSHA training requirements 95.5% >95% Hours worked since last lost work day 70,000 1,000,000 Achieve annual agency target of days away from work, days of restricted work activity, or job transferred as a result of a workrelated injury or illness The Orange County Sanitation District s Plant No. 1 received Plant of the Year award from the California Water Environment Association in

27 Appendix A: New Issue Papers In preparation for the October 19, 2011 Board of Director Strategic Planning Workshop to discuss the proposed goals for 2011, staff prepared five issue papers related to the new goals. The appendix includes issue papers on the following topics: Revisiting OCSD s 95 percent recycling level of service for biosolids management Full cost recovery: Urban runoff diversion program Evaluation of natural community decline around ocean outfall Leadership of the future Updating the sewer service fee five year rate plan 20

28 Revisiting OCSD s 95 percent Recycling Level of Service for Biosolids Management Should OCSD consider landfill options for biosolids? Why is this issue important to the District? OCSD s Board Resolution (OCSD 06 10) supports biosolids reuse and encourages its member agencies to use OCSD compost. This policy is implemented through a 95 percent recycling Level of Service goal. OCSD s solids are increasing from a historic average of 650 tons per day to a peak of about 800 tons per day until dewatering centrifuges are installed at both plants and the Irvine Ranch Water District manages its own solids. These projects are all scheduled for completion by The use of in county landfills for OCSD s biosolids could potentially reduce the costs of managing solids during this interim period. Goals Use landfills as a biosolids management option during the interim peak production period when there is a clear advantage to OCSD to do so. Clear advantages include: costs, problems with existing contractors, weather, and other management challenges. Change short term diversion goals to allow greater amounts of biosolids going to the landfill during the interim period. Continue to investigate and evaluate the use of landfills as a biosolids management option and at the same time consider the triple bottom line (environmental, financial, and societal), State of California s recycling policies, greenhouse gas emissions, and our recent survey of stakeholders to prioritize biosolids management. Recognize that there is an interest by the County of Orange to work with OCSD to utilize local landfills as a potential biosolids management option. Continue dialogue with the County of Orange and local agencies to build relationships and partnerships for local landfill options. Utilize landfills that use biogas recovery and energy production. Desired outcome Allow the use of landfills as a biosolids management option during the interim peak production period. Develop a biosolids management strategy that benefits both OCSD and local county landfills. Continue recycling biosolids and utilizing them for their nutrients, carbon sequestration, and energy values. Maintain a diversity of biosolids options. Maintain operational flexibility. Maintain fail safe biosolids management options and capacity, including locally. 21

29 Full-Cost Recovery: Urban Runoff Diversion Program Should OCSD charge the County of Orange the cost of providing urban runoff treatment or continue to absorb the costs within our budget? Why is this issue important to the District? In September 2000, the Board of Directors adopted a dry weather urban runoff policy to assist in remediation of the public health and environmental problems associated with urban runoff. The original resolution and its subsequent amendment, (Resolution No ), initially waived all fees and charges associated with the urban runoff discharges for flows below 4 million gallons per day (MGD). During the past 11 years, the District has treated a total of 5.8 billion gallons of urban runoff from the city of Huntington Beach, Orange County Public Works, city of Newport Beach, Irvine Ranch Water District, and The Irvine Company. The District s urban runoff treatment cost for was $976,593 based upon a reported discharge flow of 538 million gallons. These treatment costs are projected to increase steadily. While the program has been successful in reducing beach contamination, OCSD continues to provide benefits to agencies without capturing the cost of delivering this service, while our costs increase as we move to full secondary treatment in The Board of Directors directed staff to review this matter during its discussion of the 2010 strategic plan update and to return with a recommendation for this year s strategic plan update. Because of the current economic environment, OCSD must review this program and ensure that our agreements provide full cost recovery for the treatment of urban runoff from participating agencies and cities. Goals Meet with participating agencies and cities to explain the issues and costs associated with the current Urban Runoff Diversion Program. Amend the District s Fee Ordinance to include Urban Runoff User charges to the appropriate agency or agencies. Recover the cost of providing the service from the agencies currently receiving the benefit. Desired Outcome Charge the County of Orange, the NPDES permit holder of the Municipal Separate Storm Sewer Systems (MS4s), for Urban Runoff costs starting July 1, 2013 when the new rate structure is in place. 22

30 Evaluation of Natural Community Decline Around Ocean Outfall Should OCSD reconsider its use of chlorine disinfection? Why is this issue important to the District? The Clean Water Act requires the District to protect the natural communities that live around the ocean outfall pipe. Communities of small animals that live in the sediments in the vicinity of the outfall pipe began changing in 2005, and showed significant degradation by Changes in small animal populations have been seen up to one half mile beyond the pipe. The District is at risk of being non compliant with its ocean discharge permit requirements unless this trend is reversed. Ocean monitoring data shows this trend is not caused by usual sewage contaminants and is not the result of natural changes occurring in the ocean environment. There are no discernible changes over time in animal populations at clean reference areas, nor are other treatment plants (POTWs) experiencing similar occurrences, including those POTWs that disinfect their effluent. There appears to be a strong correlation between these changes and the District s use of chlorine as a disinfectant. Total chlorine use and daily maximum chlorine residual concentrations correlate to the changes we are seeing in the communities of small animals. The use of chlorine as an anti fouling agent for the Groundwater Replenishment System s (GWRS) reverse osmosis membrane filters may also be a contributing factor. There is also a correlation with decreased final effluent flows discharged out the ocean outfall as a result of water going to GWRS. If chlorine byproducts, and their interactions with the more concentrated solids during periods of low flow are determined to be significant causes of these changes, staff would recommend discontinuing effluent disinfection to eventually reverse these adverse effects in the ocean around our outfall. Such a recommendation would be controversial because some interest groups believe disinfection prevents beach water contamination, despite evidence to the contrary. Goals Determine if chlorine is the cause of the decline and changes in animal communities near the outfall. Develop and implement mitigation strategies to reverse the decline. Communicate results to regulators and stakeholders and seek approval to cease chlorine disinfection if shown to be the cause. Desired Outcomes Definitive identification of the source(s) of the decline and changes. Successful mitigation of the cause(s). Return affected area to reference conditions. 23

31 Leadership of the Future Should OCSD continue devoting resources toward leadership development programs to meet future challenges of employee attrition? Why is this issue important to the District? During the past year, we have experienced increasing numbers of employees retiring, resulting in a rapid loss of institutional knowledge. We expect this trend to continue. Currently, fifty six percent of all managers and supervisors are eligible to retire. Five year projections indicate that the retirement eligibility trend will continue. The Board has indicated that future leadership is important to maintaining service levels and ensuring our continued success. Building a bench of leaders is an important initiative that helps meet this challenge of staff attrition. The retirement impact coincides with plans to reduce the overall number of OCSD management positions; a direction given by the Board to maintain our financial strength and sustainability. While these events are complementary, they emphasize the importance of developing a pool of individuals who possess skillful and competent abilities to be eligible to compete for future leadership positions. Leadership development efforts can also aid in retaining talent. Goals Apply Workforce Planning Assessments to advanced development efforts. Strengthen staffing processes. Improve talent management programs. Increase accessibility of leadership development programs. Support initiatives that provide the essential skills needed to develop successful leaders. Ensure programs reinforce core values, promote fairness and equity, and are inclusive and open to all. Partner with other organizations to share resources aimed at leadership development. Desired outcome Enhance and accelerate the development of diverse, dedicated, and talented employees ready to lead OCSD into the future. 24

32 Updating the Sewer Service Fee Five-Year Rate Plan Should OCSD develop a new five year rate plan in 2013? Why is this issue important to the District? Long term financial planning is critical to meeting the objectives of the District s long term strategic plan. In February 2008, the Board approved a five year rate plan to meet the objectives of the five year strategic plan including the design and construction of full secondary treatment facilities by December 2012 as mandated by the U. S. Court Consent Decree. This rate plan is set to expire June 30, As a result, the District will need to establish a new rate plan. The benefits of implementing a five year rate plan include the assurance that funding will be available to support the initiatives contained within the five year strategic plan. It also provides our rate payers the ability to plan for future business expenses and personal finances. Approving a five year rate plan for sewer service fees is fiscally advisable considering the preparation and cost of annual public notices to our 550,000 rate payers. Lastly, it provides sustainability of wastewater collection and treatment services into the future. Goals Identify key stakeholders impacted by sewer service fee rates and develop an outreach strategy. Prepare an updated sewer service fee rate study for the regional and local areas served. Utilizing the sewer service fee rate study, update the 10 year forecast. Prepare a Proposition 218 Notice which includes sewer service fee rates for the next five years. Present the proposed five year sewer service fee rate schedule to the Board for approval. Desired outcome The establishment of a new five year sewer service fee rate schedule that balances users fees, service levels and the use of debt to ensure the sustainability of the Orange County Sanitation District. 25

33 Appendix B: Previous Issue Papers Due to the complex nature of many of the challenges that went into the preparation of this Strategic Plan, a series of issue papers were created to assist in better understanding the issues facing the Orange County Sanitation District. Included in this appendix are past year position papers on the following subjects: 2010 Issue Paper: Full Cost Recovery: Urban Runoff Diversion Program 2009 Issue Papers: Providing Ongoing Leadership Development Assessing and Mitigating the Risks of Chemical Supply Shortages Full Cost Recovery: External agreements 2008 Issue Papers: Groundwater Replenishment System Disinfection of Final Effluent Environmental Footprint Initiative Updating OCSD s Risk Register Human Resources Strategic Plan 2007 Issue Papers: Biosolids Management Groundwater Replenishment System Air Quality Odor Control Proposition 218 Notification 26

34 Full-Cost Recovery: Urban Runoff Diversion Program November 2010 Why is this issue important to the District? Dry weather urban runoff is contaminated water that is generated from day to day activities such as over irrigating lawns, washing cars and hosing down driveways. This untreated, bacteria laden water flows into storm drains and eventually makes its way to the Pacific Ocean. A 1999 Huntington Beach closure investigation found this runoff may have caused or contributed to shoreline contamination and high bacteria levels. As part of a regional best management practice, OCSD agreed to reroute the dry weather urban runoff from storm water pump stations and storm channels located in the cities of Huntington Beach and Newport Beach into OCSD s sewer system for treatment. The Urban Runoff Program began in December 1999 and was formalized in September 2001 with a Board approved resolution that allowed up to 10 million gallons per day of runoff into the District s system and waived any fees associated with the approved discharge of urban runoff into OCSD s sewer system if the total volume of all dry weather urban runoff discharges does not exceed four million gallons a day. This threshold was established to accommodate the expected volume of runoff from coastal cities that were experiencing beach contamination problems. While the program has been successful in reducing beach contamination, OCSD continues to provide benefits to agencies without fully capturing the cost of delivering this service. As the district moves to full secondary treatment in 2012, the cost of providing this service will increase. And, in light of the current economic environment and requirements of Proposition 218, OCSD must review this program and ensure that our agreements provide full cost recovery from participating agencies. Goals Meet with all affected parties to understand the issues and costs associated with the Urban Runoff Diversion Program. Conduct a comprehensive review of the Urban Runoff Program to delineate the costs and benefits of moving to a full cost recovery business model. Negotiate new agreements that ensure all agencies are paying a fair share for services provided by the District. Desired Outcome Finalize agreements that are comprehensive and agreeable to all agencies and ensure a fair share recovery of costs for District services. 27

35 Providing Ongoing Leadership Development November 2009 Why is this issue important to the District? As baby boomers begin to retire in significant numbers over the next five years, the nation s workforce will begin to experience a shortage in qualified leaders. OCSD will be impacted by this trend as well. For example, by 2015 around half the current managers and supervisors will be eligible for retirement. While the District has pursued an aggressive strategy to strengthen and grow future leaders through its Profession of Management and Leadership Academy programs, this clearly will not be enough. By next year all management staff will have completed these programs and the Succession Management program will be fully established. However, these tools are only a foundation and in order to maintain a world class organization, the District needs to take its leadership development to the next level. A broader leadership development program needs to be implemented to identify and train future leaders. Goals Identify key employees that will lead OCSD into the future. Define and build upon the essential qualities needed to develop successful leaders for OCSD s future. These qualities will focus on dealing with change, motivating others, enhancing morale and promoting productivity and job satisfaction, among others. Identify what other organizations are doing and what incentives and training might be needed to build a talented and stable leadership team. Develop a new model for addressing OCSD s operational, environmental regulatory and leadership priorities in an era of limited resources and greater public scrutiny. Desired outcome Maximize the development of a pool of dedicated and talented employees ready to lead OCSD into the future. 28

36 Assessing and Mitigating the Risks of Chemical Supply Shortages November 2009 Why is this issue important to the District? OCSD uses large volumes of several chemicals to mitigate odors, enhance primary settling of solids, reduce bacteria formation in the activated sludge plants, flocculate solids to enhance dewatering, and disinfect and then dechlorinate the effluent prior to discharge into the receiving waters. These wastewater treatment chemicals play a critical role in protecting public health and the environment. OCSD and other large wastewater treatment agencies require large volumes of chemicals that can only be provided by one supplier or a very limited number of suppliers. All of these large agencies have also experienced price increases and chemical shortages in recent years. Goals Investigate the domestic and global chemical markets for typical wastewater and odor chemicals. Identify possible causes of disruptions in the chemical supply chain. Identify potential temporary suppliers capable and willing to provide chemicals during shortages. Identify viable alternative chemicals that can be substituted for current OCSD chemicals during shortages. Identify not only the procurement costs, but the transportations costs, of possible temporary or alternative chemical procurements. Identify quality control assurances of chemicals procured outside the country. Desired outcome Develop a Chemical Sustainability Plan that provides OCSD with options for obtaining wastewater treatment chemicals during chemical shortages, emergencies or complete stoppages. 29

37 Full-Cost Recovery: External agency agreements November 2009 Why is this issue important to the District? The District has several existing agreements with external agencies including the Santa Ana Watershed Project Authority (SAWPA) and the Irvine Ranch Water District (IRWD) which were originally signed in the 1970 s and 1980 s. There are other existing agreements signed between these agencies in the last 20 years. When many of these agreements were signed, the District often provided funds and resources to assist other agencies in improving the water quality and health of the citizens of the watershed. In this pursuit, OCSD allowed benefits to agencies without fully developing an equitable cost sharing model. While this was well intended and generated results, the District s mission was overly broad. Now, through a series of more focused efforts, OCSD has developed a mission specific Strategic Plan with detailed goals and objectives. The combination of the District s new enhanced strategic focus, more stringent regulatory requirements (Federal Clean Water Act secondary treatment standards) and new economic realities (economic environment in general and requirements of Proposition 218), OCSD must review its external agreements and ensure that these agreements provide full cost recovery from the agencies with which it does business. District staff has already began working with these agencies to ensure the District is recovering the full costs of services provided. Goals Continue to meet with SAWPA and IRWD staff for consensus or agreement on major issue resolution. Continue to include future planning issues that may impact new agreements. When possible, consolidate small agreements into more comprehensive future agreements. Negotiate new agreements that ensure all agencies are paying a fair share for services provided by the District. Desired outcome Finalize agreements that are comprehensive and agreeable to all agencies and ensure a fair share for District services. 30

38 Groundwater Replenishment System November 2008 Five Year Strategic Plan Update Why is this issue important to OCSD? The Orange County Sanitation District (OCSD) has shared in construction costs for Phase 1 of the Groundwater Replenishment (GWR) System with the Orange County Water District (OCWD), each agency paying equal shares of 50 percent. The first phase has been constructed to reclaim up to 70 million gallons per day (mgd) of water, and will defer the need for OCSD to construct a new ocean outfall. Ultimate planning for the GWR System allows for reclaiming up to 130 mgd. The major GWR System pipelines and other components have been sized to accommodate this expansion; however, the advanced water purification facilities are sized for 70 mgd. OCSD has not committed additional funding for expanding the GWR System beyond the present phase. The GWR System began operation in January 2008, and is presently producing about 45 mgd of product water, reducing OCSD s ocean discharge flow from 225 mgd to 180 mgd. Completion of the Steven Anderson Lift Station (formerly Ellis Avenue Pump Station) will increase the amount of treated secondary effluent (specification water) available to the OCWD, allowing GWR System production to increase to near 70 mgd. Goals Continue to strive for 104 mgd supply of specification water for reclamation with no planned OCSD capital cost contribution for expansion of the GWR System; Complete construction of Steven Anderson Lift Station in the fourth quarter of FY and Continue to study the potential for treating flow from the Santa Ana River Interceptor at Reclamation Plant No. 1 to increase the supply of specification water for reclamation. Desired Outcome Maximizing the production of GWR System product water to augment and protect the Orange County groundwater basin with a goal of 70 mgd of product water by the end of FY