0506 ocs dannual_web
TRANSCRIPT
Making Everyday Possible
2005/06 Annual Report
Orange County Sanitation District
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Table of ContentsLetter from the General Manager 1Caring for your Neighborhood 3Protecting your Environment 7Serving your Business 11Looking to the Future 15OCSD Financial Results 18Looking Ahead 21OCSD Board of Directors 22
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Letter from the General ManagerThe Orange County Sanitation District has spent the past 50 years making everyday possible by protecting
the health and the environment of the people we serve. This year, with the support and leadership of the Board
of Directors, we added to an impressive list of accomplishments.
■ We were awarded the prestigious 2005 Governor’s Environmental and Economic Leadership Award in
Ecosystem and Watershed Management.
■ We celebrated the completion of the first of seven major milestones when our massive trickling filters began
operations as part of our commitment to move to full secondary treatment by 2012.
■ Through our creative resourcefulness, staff implemented 67 new proposals resulting in savings of $10 million.
We also reaffirmed our $2.4 billion capital improvement program and reduced the proposed capital
improvement budget by $490 million by deferring, rescoping or eliminating various projects. This change
allowed us to reduce next year’s proposed sewer rate increase from 20 percent to 9.8 percent.
We’re proud of these and many other accomplishments because we strive every day to work in the best interests
of the community while continuing to maintain our fiduciary responsibility.
Our future offers many challenges, but that’s what brings out the best in us. There’s no question the Sanitation
District can and will meet those challenges. We’ll continue to focus on protecting the environment, researching
new technologies, looking for ways to increase productivity and investing in our work force to prepare them
for what lies ahead.
Combined, these efforts will allow us to play an important role in making every day possible for the people
of Orange County.
1OCSD - Making Everyday Possible
James D. RuthGeneral Manager, Orange County Sanitation District
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Caring for “There have been lots of changes in Orange County over the
years and although things here are bigger and more complicated
than it used to be, we still wouldn’t want to live anywhere else.
There’s always something to do all the time, every single day of
the year. That makes this a great place to be for people like us
and our family.”Larry and Margaret MurpheyFountain Valley
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your Neighborhood
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“What we do is real important for everybody who lives in the
areas that we take care of. Things would not be as nice as they
are if we didn’t do the best job we could all the time. That’s
why I take pride in my work, knowing that I’m helping make
the lives of other people better every day.”Ray NavarroOCSD Maintenance Worker
Working for you every single dayEvery single day, much of what we do goes by with little
fanfare. But without fail, we work hard to protect the
lives and lifestyles of the 2.5 million people we’re charged
with serving.
Quite simply, we do that by treating about 240 million
gallons of wastewater – enough to fill Anaheim Stadium
three times – every day. Nearly 80 percent of that water
comes from homes – sinks, toilets, showers, laundry and
dishwashers. The rest
comes from businesses,
retail stores, hotels,
offices, restaurants,
manufacturers and
other industries.
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5OCSD - Making Everyday Possible
For over 50 years, we’ve made
sure this essential system works
24 hours a day, seven days
a week. That’s no small task,
considering we safely collect,
treat and dispose of wastewater
from 470 square miles in central
and northwestern Orange County. It’s a big job covering
a big area, making us the third largest wastewater agency
west of the Mississippi River.
Our 644 employees maintain a complex system of pipes,
pumps stations and processing facilities so that people
can go about living, working and playing without giving
us more than a passing thought. But the reality is that
Orange County’s sewer system is a multi-billion dollar
public investment that must be constantly monitored to
preserve the public’s health and the quality of life. We
oversee a large and diverse network of facilities including
581 miles of pipelines, 16 pumping stations, treatment
plants in Fountain Valley and Huntington Beach and a
58-foot ocean monitoring boat out of Newport Harbor.
We work hard, we work smart and we’re efficient in what
we do. We reclaim up to 10 million gallons of treated
water every day, which is ultimately used for landscape
irrigation and injection into the seawater intrusion barrier.
We operate our own central power plant that generates
more than 14,000 kilowatts of energy every day from
burning natural gas and methane gas. We also recycle
more than 230,000 tons of biosolids every year for
agricultural uses.
Our rate payers benefit from the efforts of our Board and
staff. Residential user fees average less than $14 per
month, one of the lowest rates in the state. That is quite an
accomplishment since the average Californian spends
more than double that amount for sewer service. In short,
we have dedicated
ourselves to taking care
of you every single day,
doing our part in making
everyday possible for
the people we serve.
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“I love going out to the beach whether its for a long quiet walk,
or to do some sketching or to just play in the surf. For me
the beach is one of the most beautiful, natural advantages about
living in Orange County and that’s why I try to come here
as often as I can.”Yuri CampbellNewport Beach
Protecting
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your Environment
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Reaching out to the communityWe think the best way to
protect our environment is
by partnering with other
agencies and the public
to keep Orange County
clean and safe. Our
employees actively work at forming strong coalitions for
the sole purpose of ensuring our beaches, ocean waters
and wildlife are protected.
For more than 30 years, we’ve partnered with the United
States Environmental Protection Agency and the California
Regional Water Quality Control Board in an extensive
ocean monitoring program. Our ocean monitoring vessel,
the 58-foot Nerissa, crisscrosses 35 square miles of ocean
“The environmental protection work we do must be complemented
by teaching others to protect the environment as well. Taking
care of special places like our beaches and the oceans at our back
door is a big job and we can’t do it alone. The more people
get involved, the easier it is to preserve and protect a place we all
call home.”Jeff ArmstrongOCSD Senior Scientist
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along 11 miles of coastline, from Seal Beach to Corona
Del Mar. Sampling locations include 17 shoreline
water quality stations, 17 offshore water quality stations,
49 stations to assess bottom-dwelling organisms and
sediment chemistry, and nine trawl stations to evaluate
fish and macro-invertebrate communities.
We participate in special regional studies that cover a
much broader area ranging from Point Conception,
west of Santa Barbara, to Mexico. We also work closely
with the University of Southern California Sea Grant
Program, Scripps Institution of Oceanography, the
University of California, Los Angeles and other universities.
Public education is a critical part of our outreach efforts.
By educating the public, they help us by becoming
ambassadors for cleaner air, land and water. With that
in mind, this year we launched
a pharmaceutical outreach
program called “No Drugs
Down the Drain” to teach
people the right way to dispose
of their prescriptions and
medications. Almost one million
information cards were
distributed to pharmacies.
We also contacted 300
home-owner associations,
and worked with the
media to raise awareness
about this growing environmental concern.
Another way we educated the public was through the
creation of our Fats, Oils and Grease Program, because
one of the largest causes of beach closures are sewer
overflows caused by fats, oils and grease.
We also think it’s important for the public to understand
the importance of wastewater treatment in protecting
public health and the environment. To accomplish this,
we conducted 70 tours of our treatment plant facilities for
close to 1,000 people over the past year. More than
70 employees also volunteered 635 hours of community
service by participating in speaking engagements and
working on events such as Earth Day, Arbor Day and
the Children’s Water Festival.
9OCSD - Making Everyday Possible
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Serving “Orange County is a great place to own a restaurant because
the opportunities for success are everywhere. Part of that success
comes from wanting to do your part for the community by
taking the right steps to ensure this is a better place for all of us
at the end of the day. So we appreciate the checks, the balances
and safeguards put in place to protect our families, our homes
and our businesses.”Zov KaramardianOwner, Zov’s Bistro, Tustin
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your Business
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Our scientific approach protects the publicA big part of our job at OCSD is protecting the public’s
health by closely monitoring treatment processes at our
plants and working with businesses to prevent problems
before they occur.
Our award-winning source control program closely
regulates the amount of toxic pollutants that can enter the
sewer by issuing permits
to businesses to ensure
that pollutants are
eliminated or significantly
reduced in the sewer
system. Businesses that
“We are always working towards finding better ways to balance
protection of public health with the business needs and the
lifestyles of the people of Orange County. Two of our current
goals include developing ways to test for previously undetectable
levels of contaminants in recycled water, and same-day
bacteria testing methods for beach water.”Charlie McGeeOCSD Lab Supervisor
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release wastewater into our
sewers must meet strict
regulations and are routinely
sampled and inspected. If
violations occur, the District
responds swiftly with warnings,
fines and criminal charges.
An integral part of our compliance and monitoring efforts
are centered around OCSD’s state-of-the-art Environmental
Sciences Laboratory. It is staffed by highly qualified and
experienced professionals to ensure businesses meet all
regulations for water quality as well as monitoring OCSD’s
air emissions and the processing of biosolids.
Each year, our lab analyzes more than 100,000 samples,
testing for bacteria and over 100 other compounds that
can be harmful to people and the environment. That
means we can guarantee only highly treated wastewater
is released through our 200 foot deep, five mile long
ocean pipeline.
As part of our compliance and testing efforts, we also
take samples from the ocean at 17 sites extending up to
six miles offshore. We also test ocean sediments to assess
bottom-dwelling organisms and sediment chemistry. The
combined analysis from these samplings gives us a clear
picture of the health of the ocean on a daily basis and
helps us protect people and marine life from potential
harmful situations.
Research projects are currently under way to improve our
operations by identifying new or different processes or
equipment that can be used. For example, laboratory
processing methods currently require 24 hours to complete.
During this time, swimmers may be exposed to poor
water quality, placing their health in jeopardy. To alleviate
that, OCSD is working with the Southern California
Coastal Water Research
Project Authority to
develop new, more rapid
assessment methods that
would allow for same-day
water quality warnings.
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Looking “Clean air, nice beaches and parks, and lots of outdoor activities
all year round. Those are some important reasons why we
live in Orange County. It’s very important to my husband and
I that this area stays that way for my children as they grow
up. We care deeply that everything possible is being done to
ensure that they’ll have a healthy place to call home for many
years to come.”Erin and Mathew BaxterLa Habra
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to the Future
15OCSD - Making Everyday Possible
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Making tomorrow possibleOur commitment to
preserve a healthy way
of life for the people of
Orange County extends
well into the future with
an aggressive, ongoing
series of capital improvements, programs and partnerships.
More than $2.4 billion in projects are already being built
or in the planning stages over the next several years as
part of our Capital Improvement Program. This includes
almost 140 projects at both of our treatment plants, 16
pump stations and 44 large sewer trunklines. We also
have a number of cooperative projects underway to help
local cities upgrade their sewers.
“My children are my world and their future means everything to
me. That brings special meaning to my work because I make sure
emissions we’re releasing from generators are within health and
safety standards. By doing my job, I’m doing my part to make
sure my children grow up in a clean and healthy environment, and
that keeps me motivated to do my job well every day.”Chloe DaoOCSD Engineer
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During the past year alone, we completed 16 capital
improvement projects and laid 20,000 feet of new
pipe. These accomplishments were highlighted by the
commissioning of a new trickling filter facility, the first in
a series of milestone events as part of the district’s move
to full secondary treatment.
Another important project that will protect our future is
in the final phases of construction. The Groundwater
Replenishment System, a jointly funded project of OCSD
and the Orange County Water District, is slated to begin
operation in Fall 2007. It will produce 70 million gallons
of purified water every day and return it to the Orange
County Groundwater Basin, either by injection along the
coast to protect the basin from seawater intrusion, or by
percolation in ponds in Anaheim. As a result, Orange
County will have a quality, reliable, local water supply
for decades to come.
Our ability to effectively protect
the region’s environment well into
the future was also strengthened
by the creation of a partnership
with EnerTech Environmental, Inc.
this past year. The 10 year
agreement with four
5-year options calls for
OCSD to supply EnerTech
with 200 daily tons of
biosolids that will be
recycled into a high-grade
renewable fuel to augment a nearby cement plant’s
power supply. Ash from the fuel will be used as a cement
additive resulting in zero solid waste. EnerTech is building
a facility in Rialto, and they expect to begin converting
biosolids to fuel by early 2008.
Complementing this new energy efficient effort is our
ongoing program of generating electric power from gases
produced by the wastewater treatment process. Recycling
captured methane generates more than 14,000 kilowatts
of energy daily, roughly the equivalent of enough power
to supply the needs of a city the size of Brea or Cypress.
Instead, we use this power to run our central generation
power plants. This year, OCSD saved $8.3 million in
power that would otherwise have to be purchased from
Southern California Edison.
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18 Making Everyday Possible - OCSD
OCSD Financial Results■ The Capital Improvement Program (CIP) is a series of large construction improvements in progress or planned
over the next several years that will allow the District to provide an appropriate level of service to our rate
payers. The CIP provides for the management and implementation of these improvements. The outlay for the
CIP in FY 2005-06 was $260.8 million.
■ Debt Service is the cost of repaying long-term debt. Long-term debt financing allows the District to complete
large multi-year capital projects by providing funds not always immediately available. The outlay for debt
service in FY 2005-06 was $41.9 million.
■ Operating Expenses allocates resources to operate, maintain and manage our sewage collection, treatment
and disposal system and any associated administrative or technical requirements. Operating expenses for
FY 2005-06 were $109.7 million.
■ Intradistrict Transfers are expenditures related to other affiliated agencies. Intradistrict Transfers for FY 2005-06
were $9.3 million.
■ The District’s “AA” Rating is one of the highest for a government agency. To maintain this rating, the District
adheres to its 2001 Debt Policy and coverage ratios requirements. This Board-adopted policy serves as a
guide in the management of existing debts and in the issuance of future debt.
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19OCSD - Making Everyday Possible
Where the money comes from Where the money goes
BeginningDesignatedReserves$472M
52%
CIP$260.8M
29%
Debt$41.9M
5%
Operating$109.7M
12% Intradistrict$9.3M
1%
EndingDesignatedReserves$490M
53%
Fees$185M
20%
Property Tax$40M
4%
Interest$10.4M
1%
Debt Proceeds$200M
22%
Other$4.3M>1%
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20 Making Everyday Possible - OCSD
OCSD Financial Results (continued)
In FY 2005-06, total revenues increased $41.5 million, or a 22.7 percent increase over the prior year,
primarily due to the $33.4 million in service charges.
District total expenses increased $18.6 million, or 10.6 percent primarily due to increases of $7.5 million
in depreciation, $7.3 million in non-operating expense, and $3.8 million in operating expenses. The
increase in depreciation is due to the recent completion of $141.9 million in construction project assets that
have entered their first year of depreciation. Operating expenses alone have increased only 3.7 percent
over the prior year.
Net assets increased $47.9 million, or 4.6 percent, to $1,089 million in FY 2005-06 over the prior year. Net
capital assets increased $189.5 million, or 16.1 percent, due primarily to the continuing Capital Improvement
Program that includes construction of the Groundwater Replenishment System. The Groundwater Replenishment
System project continued to move forward with an estimated commissioning slated for Fall 2007. This joint
project with the Orange County Water District will be the largest water reclamation project in the nation and
divert up to 70 million gallons of water a day from the District’s ocean discharge during peak winter storms.
The District has budgeted $248.6 million for this project through FY 2007-08. Through FY 2005-06,
$150.9 million had been incurred including an additional $83.7 million in outlays for FY 2005-06.
Long-term liabilities increased $186.4 million, or 30.6 percent due to the issuance of $200 million in
bonded debt to assist in the financing of the District’s 10-year $2.4 billion Capital Improvement Program.
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21OCSD - Making Everyday Possible
Looking AheadIn June 2006, the Board of Directors approved the District’s FY 2006-07 operating and capital improvement
budget at $545.1 million, or a 19.5 percent increase over the prior year. This overall increase is comprised
of a $6.5 million, or 5.1 percent increase in the operating budget, an $11.1 million, or 20.3 percent
increase in debt service requirements, and a $70.9 million, or 26.2 percent increase in cash outlays for
construction projects.
The increases in both debt service and CIP outlays is related to the completion of the District’s $2.4 billion
Capital Improvement Program including the Board’s mandate to meet secondary treatment standards by
December 31, 2012. Increases in the operating budget consist of the following:
■ Salaries and Benefits, $4.8 Million – Costs will increase $1.8 million as a result of existing collective
bargaining agreement impacts, including health and welfare increases. The other significant impact is a
$2.4 million, or 25 percent increase in retirement premiums. Our rising retirement premiums are consistent
with increased costs throughout California.
■ Operating Materials and Supplies, $1.4 Million – As the requirement for better quality effluent increases,
so does the need for chemicals (primarily bleach) to treat the region’s wastewater. These chemical increases
reflect price increases of 34 percent partially offset by staff’s optimization of treatment facilities.
■ Repairs & Maintenance, $2.2 Million – Various repairs at the OCSD operation plants, including diffuser
replacement and digester cleaning, will increase the repairs and maintenance budget.
■ Contractual Services, $2.9 Million – The major component of this category are biosolids removal and
transportation costs. These costs continue to increase as acceptable locations for biosolids disposal become
less accessible.
■ Utilities, $2.7 Million – Despite reductions by using natural gas, total utilities costs will increase due to rising
electricity costs.
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22 Making Everyday Possible - OCSD
Steve AndersonChair, Board of Directors
City of La Habra
James M. FerrymanVice Chair, Board of DirectorsCosta Mesa Sanitary District
Harry SidhuCity of Anaheim
Roy MooreCity of Brea
Patsy MarshallCity of Buena Park
Phil LuebbenCity of Cypress
Larry CrandallCity of Fountain Valley
Don BankheadCity of Fullerton
Bill DaltonCity of Garden Grove
Dave SullivanCity of Huntington Beach
Sukhee KangCity of Irvine
Mark WaldmanCity of La Palma
Ken ParkerCity of Los Alamitos
Tod RidgewayCity of Newport Beach
Carolyn CaveccheCity of Orange
Norman Z. EckenrodeCity of Placentia
Alberta ChristyCity of Santa Ana
Charles AntosCity of Seal Beach
David ShawverCity of Stanton
Doug DavertCity of Tustin
Rich FreschiCity of Westminster
Michael DuvallCity of Yorba Linda
Joy L. NeugebauerMidway City Sanitation District
Darryl MillerIrvine Ranch Water District
James SilvaOrange County
Board of Supervisors
OCSD Board of Directors Fiscal Year 2005-06
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Orange County Sanitation District10844 Ellis Avenue
Fountain Valley, CA 92708(714) 962-2411www.ocsd.com
District OfficialsJames D. Ruth
General Manager
Dr. Robert P. GhirelliAssistant General Manager
Nicholas J. ArhontesDirector of Operations and Maintenance
James D. HerbergDirector of Engineering
Edward M. TorresDirector of Technical Services
Lorenzo TynerDirector of Finance and Administrative Services
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