2. Table of Contents
Letter from the General Manager 1
Caring for your Neighborhood 3
Protecting your Environment 7
Serving your Business 11
Looking to the Future 15
OCSD Financial Results 18
Looking Ahead 21
OCSD Board of Directors 22
3. Letter from the General Manager
The 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.
James D. Ruth
General Manager,
Orange County Sanitation District
OCSD - Making Everyday Possible 1
4. 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 Murphey
Fountain Valley
6. Working for you every single day
Every 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.
“ 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 Navarro
”
OCSD Maintenance Worker
7. For over 50 years, we’ve made We work hard, we work smart and we’re efficient in what
sure this essential system works we do. We reclaim up to 10 million gallons of treated
24 hours a day, seven days water every day, which is ultimately used for landscape
a week. That’s no small task, irrigation and injection into the seawater intrusion barrier.
considering we safely collect, We operate our own central power plant that generates
treat and dispose of wastewater more than 14,000 kilowatts of energy every day from
from 470 square miles in central burning natural gas and methane gas. We also recycle
and northwestern Orange County. It’s a big job covering more than 230,000 tons of biosolids every year for
a big area, making us the third largest wastewater agency agricultural uses.
west of the Mississippi River.
Our rate payers benefit from the efforts of our Board and
Our 644 employees maintain a complex system of pipes, staff. Residential user fees average less than $14 per
pumps stations and processing facilities so that people month, one of the lowest rates in the state. That is quite an
can go about living, working and playing without giving accomplishment since the average Californian spends
us more than a passing thought. But the reality is that more than double that amount for sewer service. In short,
Orange County’s sewer system is a multi-billion dollar we have dedicated
public investment that must be constantly monitored to ourselves to taking care
preserve the public’s health and the quality of life. We of you every single day,
oversee a large and diverse network of facilities including doing our part in making
581 miles of pipelines, 16 pumping stations, treatment everyday possible for
plants in Fountain Valley and Huntington Beach and a the people we serve.
58-foot ocean monitoring boat out of Newport Harbor.
OCSD - Making Everyday Possible 5
8. Protecting
“ 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 Campbell
Newport Beach
10. Reaching out to the community
We 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 Armstrong
OCSD Senior Scientist
11. along 11 miles of coastline, from Seal Beach to Corona information cards were
Del Mar. Sampling locations include 17 shoreline distributed to pharmacies.
water quality stations, 17 offshore water quality stations, We also contacted 300
49 stations to assess bottom-dwelling organisms and home-owner associations,
sediment chemistry, and nine trawl stations to evaluate and worked with the
fish and macro-invertebrate communities. media to raise awareness
about this growing environmental concern.
We participate in special regional studies that cover a
much broader area ranging from Point Conception, Another way we educated the public was through the
west of Santa Barbara, to Mexico. We also work closely creation of our Fats, Oils and Grease Program, because
with the University of Southern California Sea Grant one of the largest causes of beach closures are sewer
Program, Scripps Institution of Oceanography, the overflows caused by fats, oils and grease.
University of California, Los Angeles and other universities.
We also think it’s important for the public to understand
Public education is a critical part of our outreach efforts. the importance of wastewater treatment in protecting
By educating the public, they help us by becoming public health and the environment. To accomplish this,
ambassadors for cleaner air, land and water. With that we conducted 70 tours of our treatment plant facilities for
in mind, this year we launched close to 1,000 people over the past year. More than
a pharmaceutical outreach 70 employees also volunteered 635 hours of community
program called “No Drugs service by participating in speaking engagements and
Down the Drain” to teach working on events such as Earth Day, Arbor Day and
people the right way to dispose the Children’s Water Festival.
of their prescriptions and
medications. Almost one million
OCSD - Making Everyday Possible 9
12. 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 Karamardian
Owner, Zov’s Bistro, Tustin
14. Our scientific approach
protects the public
A 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 McGee
”
OCSD Lab Supervisor
15. release wastewater into our six miles offshore. We also test ocean sediments to assess
sewers must meet strict bottom-dwelling organisms and sediment chemistry. The
regulations and are routinely combined analysis from these samplings gives us a clear
sampled and inspected. If picture of the health of the ocean on a daily basis and
violations occur, the District helps us protect people and marine life from potential
responds swiftly with warnings, harmful situations.
fines and criminal charges.
Research projects are currently under way to improve our
An integral part of our compliance and monitoring efforts operations by identifying new or different processes or
are centered around OCSD’s state-of-the-art Environmental equipment that can be used. For example, laboratory
Sciences Laboratory. It is staffed by highly qualified and processing methods currently require 24 hours to complete.
experienced professionals to ensure businesses meet all During this time, swimmers may be exposed to poor
regulations for water quality as well as monitoring OCSD’s water quality, placing their health in jeopardy. To alleviate
air emissions and the processing of biosolids. that, OCSD is working with the Southern California
Coastal Water Research
Each year, our lab analyzes more than 100,000 samples,
Project Authority to
testing for bacteria and over 100 other compounds that
develop new, more rapid
can be harmful to people and the environment. That
assessment methods that
means we can guarantee only highly treated wastewater
would allow for same-day
is released through our 200 foot deep, five mile long
water quality warnings.
ocean pipeline.
As part of our compliance and testing efforts, we also
take samples from the ocean at 17 sites extending up to
OCSD - Making Everyday Possible 13
16. 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 Baxter
La Habra
18. Making tomorrow possible
Our 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 Dao
”
OCSD Engineer
19. During the past year alone, we completed 16 capital agreement with four
improvement projects and laid 20,000 feet of new 5-year options calls for
pipe. These accomplishments were highlighted by the OCSD to supply EnerTech
commissioning of a new trickling filter facility, the first in with 200 daily tons of
a series of milestone events as part of the district’s move biosolids that will be
to full secondary treatment. recycled into a high-grade
renewable fuel to augment a nearby cement plant’s
Another important project that will protect our future is
power supply. Ash from the fuel will be used as a cement
in the final phases of construction. The Groundwater
additive resulting in zero solid waste. EnerTech is building
Replenishment System, a jointly funded project of OCSD
a facility in Rialto, and they expect to begin converting
and the Orange County Water District, is slated to begin
biosolids to fuel by early 2008.
operation in Fall 2007. It will produce 70 million gallons
of purified water every day and return it to the Orange Complementing this new energy efficient effort is our
County Groundwater Basin, either by injection along the ongoing program of generating electric power from gases
coast to protect the basin from seawater intrusion, or by produced by the wastewater treatment process. Recycling
percolation in ponds in Anaheim. As a result, Orange captured methane generates more than 14,000 kilowatts
County will have a quality, reliable, local water supply of energy daily, roughly the equivalent of enough power
for decades to come. to supply the needs of a city the size of Brea or Cypress.
Instead, we use this power to run our central generation
Our ability to effectively protect
power plants. This year, OCSD saved $8.3 million in
the region’s environment well into
power that would otherwise have to be purchased from
the future was also strengthened
Southern California Edison.
by the creation of a partnership
with EnerTech Environmental, Inc.
this past year. The 10 year
OCSD - Making Everyday Possible 17
20. 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.
18 Making Everyday Possible - OCSD
21. Where the money comes from Where the money goes
Other
$4.3M
>1% Debt Proceeds CIP
$200M $260.8M
22% 29%
Interest
Beginning $10.4M Ending
Designated 1% Designated
Reserves Reserves
$472M Property Tax $490M
52% $40M Debt 53%
4% $41.9M
5%
Fees
Operating
$185M
20% $109.7M
Intradistrict
12%
$9.3M
1%
OCSD - Making Everyday Possible 19
22. 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.
20 Making Everyday Possible - OCSD
23. Looking Ahead
In 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.
OCSD - Making Everyday Possible 21
24. OCSD Board of Directors Fiscal Year 2005-06
Steve Anderson Don Bankhead Charles Antos
Chair, Board of Directors City of Fullerton City of Seal Beach
City of La Habra
Bill Dalton David Shawver
James M. Ferryman City of Garden Grove City of Stanton
Vice Chair, Board of Directors
Dave Sullivan Doug Davert
Costa Mesa Sanitary District
City of Huntington Beach City of Tustin
Harry Sidhu
Sukhee Kang Rich Freschi
City of Anaheim
City of Irvine City of Westminster
Roy Moore
Mark Waldman Michael Duvall
City of Brea
City of La Palma City of Yorba Linda
Patsy Marshall
Ken Parker Joy L. Neugebauer
City of Buena Park
City of Los Alamitos Midway City Sanitation District
Phil Luebben
Tod Ridgeway Darryl Miller
City of Cypress
City of Newport Beach Irvine Ranch Water District
Larry Crandall
Carolyn Cavecche James Silva
City of Fountain Valley
City of Orange Orange County
Board of Supervisors
Norman Z. Eckenrode
City of Placentia
Alberta Christy
City of Santa Ana
22 Making Everyday Possible - OCSD
25.
26. District Officials
James D. Ruth
General Manager
Dr. Robert P. Ghirelli
Assistant General Manager
Nicholas J. Arhontes
Director of Operations and Maintenance
James D. Herberg
Director of Engineering
Edward M. Torres
Director of Technical Services
Lorenzo Tyner
Director of Finance and Administrative Services
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, CA 92708
(714) 962-2411
www.ocsd.com
