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Home My WebLink About2003-07-23phone: (714) 962-2411 fax: (714) 962-0356 www.ocsd.com mailing address: P.O Box 8127 Fountain Valley, CA 92728-8127 street address: 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Member Agencies • Cities Anaheim Brea Buena Park Cypress Fountain Valley Fullerton Garden Grove Huntington Beach Irvine La Habr a La Palma Los Alamitos Newport Beach Orange Placentia Santa Ana Seal Beach Stanton Tustin Villa Park Yorba Linda County of Orange Sanitary Districts Costa Mesa Midway City Water Districts Irvine Ranch July 16, 2003 ORANGE COUNTY SAN ITATION D ISTR ICT NOTICE OF MEETING BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT WEDNESDAY, JULY 23, 2003 -7:00 P.M. DISTRICT'S ADMINISTRATIVE OFFICES 10844 Ellis A venue Fountain Valley, California 92708 The Adjourned Regular Meeting of the Board of Directors of th e Orange County Sanitation District will be held at the abo ve locatio n, t im e an d date. PDC COMMITTEE -Thursday, August 7, 2003 at 5:00 p.m. JOINT GROUNDWATER REPLENISHMENT SYSTEM COOPERATIVE COMMITTEE -Monday, August 11 , 2003 at 5:30 p.m . @OCWD FAHR COMMITTEE -Wednesday, August 13, 2003 at 5:00 p.m. STEERING COMMITTEE -Wednesday, August 27, 2003 at 5:00 p .m . To maint ain world-class leadership in wastewat er and water resource management. BOARD MEETING DATES Board Meeting August27,2003 September 24, 2003 October 22, 2003 *November 19, 2003 *December 17, 2003 January 28, 2004 February 25, 2004 March 24, 2004 April 28, 2004 May 26, 2004 June 23, 2004 *July 21, 2004 *Meetings are being held on the third Wednesday of the month G:\wp.dta\admin\BS\Agenda\2003 Meeting Notices\MN7 .2.doc ROLL CALL BOARD OF DIRECTORS ORANGE COUNTY SANI TATION DISTRICT MEETI NG DAT E: 7/23/03 TIME: 7:00 p.m . / .. a...P cf~· f.3t/S-? 0 (S IMONIAN) .................... AN DE RSON ................... --1L::_ MJI ,,,. __ / (W IL SON) ........................ BANKHE AD ................... __L v' v (SWAN) ............................ BRADY ........................ ___L_ v ~ (YOST ) ............................ CAMPB ELL ................... ~ _L_ ~ (AM BRIZ) .......................... CAVE CCH E ................... _fu_ Cl/ ~ (GARC IA) ......................... CHR IS TY ..................... _.k'.'.'.:.. _L ./ (CRANDALL) .................... COLLI NS ...................... _L _) "361t L_ ___L_ (BOARDMAN) ................. COOK .......................... ____._L ~ __ ----L (BROADWATE R) ............. 'BALTON ....................... _iL_. _L_ v (S HAWVER) .................... DONAH U E ..................... ~ ,')"33?e-v (W IL SON) ........................ DUVALL...................... ____k:'.'.'.:_ ./ __L_ (U N DERHILL) ................... ECKENRO DE ................. ___iL_ / ___L_ (SC HA F ER) ...................... FERRYMAN ................... _iL_ _L__ __L_ (PO E) ................................ JEMPSA.. .. . . . . .. . . . . .. . . . . .. / __L._ _.L_ (DAVERT) ......................... KAWAS H IMA............... v _L_ a/ (SH EA) ............................. KROM ........................ / _L_ __L_ (DOW) ............................. MARS HA LL .................. v _L_ ./ (H ERNAND EZ) ................. MCCRACKE N ............... CU a_... a./ (FRESCH I) ....................... MC GOWAN ................. _ v ..L__ ~ (BEAU MAN) ..................... MOORE ........................ ~ ~ ___L_ (EPP ERSO N ) ................... NEUGEBAUER. ............. _ _L_ _L_ _L (KEENAN) ....................... ~ PIERCY ........................ _L .')3SJ.ip 15"?4?! / (WEBB) ............................ R IDGEWAY ................... _QL__ ()./ -1J.L... (SM IT H , CHUCK) ............. SI LVA ........................... _tL. _L_ ~ (HERMAN) ........................ WALKER. ...................... _L ~ _ _L ~1Wt~ g<-/f JUeef /~~ Lr7U'Jv ;'(~~ STAFF: Anderso n / Beekman v Ghire ll i v Ky le v Ludwin / Mathews Mi les v Ooten ,/ Tomko v Streed v OT HERS: Woodruff v Nixon , 07 /23 /03 G:\wp.dta\admi n\BS\DIRECTOR\Directors Roll Call.doc SIGN -IN SHEET ORA NG E CO UNTY SA N ITA TION DI STRI CT 7 J:) 3 /o s B OA RD MEETING ~---'-~1'--~-;,_.=.~~~~~~~- NAME ORGANIZATION/FIRM (please print) (please print) fJI tW k.-/!.a~vi,t;f) W oLSj) ~ a. flj-*C1 - 0-: /[ ~(_(_ d~ //~ f!1 . .1 .#1gi,/ fl _1J11P (>,{H:f;~ ~ ~(/t1-fv,1;17t1 <;~~ I H:\WP.DT A\ADMIN\BS\FORMS\SIGN -1 N FORM.DOC Orange County Sanitation District MINUTES ADJOURNED REGULAR MEETING JULY 2, 2003 ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708-7018 Minutes for Board Meeting Page2 07/02/03 ROLL CALL An adjourned regular meeting of the Board of Directors of the Orange County Sanitation District was held on July 2, 2003, at 5:30 p.m., in the District's Administrative Offices. Following the Pledge of Allegiance the roll was called and the Secretary reported a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS x Shirley McCracken, Chair Bob Hernandez x Steve Anderson, Vice Chair Steve Simonian x Don Bankhead Leland Wilson x Brian Brady Darryl Miller x Patricia Campbell Paul Yost x Carolyn Cavecche Steve Ambriz x Alberta Christy Mike Garcia x John Collins Larry Crandall x Debbie Cook Connie Boardman x Bill Dalton Bruce Broadwater x Brian Donahue David Shawver x Michael Duvall Keri Lynn Wilson x Norman Z. Eckenrode Constance Underhill x James M. Ferryman Arlene Schafer x Alice B. Jempsa Marilynn M. Poe x Tony Kawashima Doug Davert x Beth Krom Christina Shea x Patsy Marshall Jim Dow x Robert McGowan Richard A. Freschi x Roy Moore John Beauman x Joy Neugebauer Grace Epperson x Anna L. Piercy Tim Keenan x Tod Ridgeway Don Webb x Jim Silva Chuck Smith x Paul Walker Larry Herman STAFF MEMBERS PRESENT: Blake P. Anderson, General Manager; Penny Kyle, Board Secretary; Carol Beekman; Bob Ghirelli; Jim Herberg; Greg Mathews; Patrick Miles; Bob Ooten; Gary Streed; Lisa Tomko; Jim Burror; Jennifer Cabral; Lynn Jensen; Jeff Reed OTHERS PRESENT: Thomas L. Woodruff, General Counsel; Jim Adams; Randy Fuhrman; Garry Brown; Doug Korthof; Darrell A. Neita; Greg Jewell; Don Hyatt; Terry E. Lane; Mary Clyburn; G. Van Orie; Adol Meda; Fred Young; Jan Vandersloot; Patrick Shea; Rich von Langen; Florence Leach; Margaret Murphey; Larry Murphey; Myron Staffelbach; Setelo P. Makoni; Les Jones; Paul Durazo; Larry Porter; Joey Racano; Don Schulz; Ken Hansen; Joan Minutes for Board Meeting Page3 07/02/03 Irvine Smith; Steve Bone; Doug Traub; Wendy Deelez; Dan Bruns; Andy Casario; Terry Martin; Mike Cline; Jim Raff REPORT OF THE CHAIR The Chair had no report. REPORTOFTHEGENERALMANAGER General Manager Blake Anderson reported that at the June 25th meeting 53 people commented regarding the adoption of an ordinance to increase sewer use fees, of which most were opposed to increasing the rates. The Directors voted on two separate motions to raise the rates that did not pass. Reconsideration to adopt the proposed ordinance is required in order to set appropriate user fees to generate revenue for the capital improvement program, implementation of full secondary treatment, disinfection of the effluent, as well as the groundwater replenishment system. The costs of these programs will be an estimated $2.1 billion over the next 10 years, and another $300 million in the following 1 O years, for a total of $2.4 billion. Mr. Anderson noted the District had never spent this amount of money in such a short period of time. To put it into perspective, the District would be doing for the next 10 years what it did in the last 50 years. It was also noted that the District's user rates are in the bottom 5% of user rates charged across the United States. REPORT OF THE GENERAL COUNSEL General Counsel Thomas L. Woodruff reported briefly on the process and procedure regarding the continuation of the public hearing from the meeting held on June 25, 2003. It was noted those who wished to give testimony that did not speak at the June 25th meeting would be given the opportunity to speak first, to be followed by those who wish to re-address the board with new or additional comments not addressed in the previous week's comments. At the conclusion of public testimony, and closing of the public hearing, consideration to adopt the ordinance would then take place and the ordinance would be adopted if approved by an affirmative 17 votes. However, if an alternative motion is made to establish a different rate structure or duration of the rates, it would be considered a first reading of the ordinance, to be followed by a second reading and adoption at the July 23rd board meeting. There would not be a public hearing on July 23rd. 6. a. CONSENT CALENDAR MOVED, SECONDED AND DULY CARRIED: Read all Ordinances by title only, and waive reading of entire Ordinances. NON-CONSENT CALENDAR 8. Continuation of consideration to adopt proposed Ordinance No. OCSD-20, An Ordinance of the Board of Directors of Orange County Sanitation District, Adopting Revised Sanitary Sewer Service Charges; Reaffirming Established Capital Facilities Minutes for Board Meeting Page4 07/02/03 Capacity Charges; Reaffirming Established Miscellaneous Charges and Fees Relating to Industrial Dischargers, Source Control Permittees and Wastehaulers; and Repealing Ordinance Nos. OCSD-18 and OCSD-19: a. OPEN MEETING: The Chair declared the hearing opened at 5:54 p.m. MOVED, SECONDED AND DULY CARRIED: Receive and file additional written comments distributed in the Directors' meeting folders, and those placed in their notebooks. PUBLIC COMMENTS: Public comments were received by the following who were opposed to the rate increase: Paul Durazo; Florence Leach Public comments were received by the following who focused on a compromise to the proposed rate increase: Darrell A. Nolta; Joey Racano Public comments were received by the following who were in support of the rate increase: Jim Adams; Garry Brown; Randy Fuhrman; Donald Hyatt; Joan Irvine Smith; Steve Bone; Doug Traub; Greg Jewell; Doug Korthoff; Jan Vandersloot. b. CLOSE HEARING: The Chair declared the hearing closed at 6:25 p.m. c. Directors entered into discussion regarding: a) the cost to repay borrowed monies for the capital improvement program; b) the level of District's reserves and their designated purpose; and c) the size of the CIP. Annual review of the rates was also discussed, and it was noted there is no legal requirement to annually notice and approve increased rates, with the approval of a multi-year rate structure ordinance. d. MOVED AND SECONDED: To adopt Ordinance No. OCSD-20, An Ordinance of the Board of Directors of Orange County Sanitation District, Adopting Revised Sanitary Sewer Service Charges; Reaffirming Established Capital Facilities Capacity Charges; Reaffirming Established Miscellaneous Charges and Fees Relating to Industrial Dischargers, Source Control Permittees and Wastehaulers; and Repealing Ordinance Nos. OCSD-18 and OCSD-19. In response to Directors' questions, Jim Herberg, Engineering Manager, provided clarification for the increase to the Capital Improvement Program (CIP) from $271 million to $423 million and the difference between the 50/50 level of treatment plan and full secondary (a difference of $152 million). He also noted that the CIP has 132 projects scheduled for the next 20 years, which were the subject of a workshop held in April 2003. Approximately 100 of those projects would be active within the next five years. A large number of these are rehabilitation projects which underwent an independent review to determine their level of ranking in terms of compliance, safety, risk of spills/failure, full secondary treatment, and the groundwater replenishment system project. Staff also responded that the rate structure was developed to provide payment according to flow and strength of discharge. Minutes for Board Meeting Pages 07/02/03 Ayes: Nays: Absent: Ayes: Nays: Absent: A roll call vote was then taken on this motion to adopt Ordinance No. OCSD-20. After additional discussion, the motion failed by a vote of 16 ayes and 9 nays, as follows: Patricia Campbell; John Collins; Debbie Cook; Brian Donahue; Mike Duvall; Jim Ferryman; Alice Jempsa; Tony Kawashima; Beth Krom; Shirley McCracken; Bob McGowan; Roy Moore; Anna Piercy; Tod Ridgeway; Jim Silva; Paul Walker Steve Anderson; Don Bankhead; Brian Brady; Carolyn Cavecche; Alberta Christy; Bill Dalton; Norm Eckenrode; Patsy Marshall; Joy Neugebauer N/A In response to Directors' questions, General Counsel confirmed that the proposed ordinance could be approved as introduced with a contingency added to the record that an annual rate increase must be reaffirmed by a vote of 17 Directors or more, prior to implementing the increase in said rates established by the Ordinance for each subsequent year. Directors briefly discussed the implications of a simple majority vote vs. a super (two-thirds) majority vote. MOVED, SECONDED AND DULY CARRIED: Adopt Ordinance No. OCSD-20, as introduced by action of the Board of Directors on May 28, 2003, without modification or amendment; and provided further that upon adoption of this Ordinance the Board of Directors shall conduct an annual review of the prescribed increases in the Sanitary Sewer Service Charges set forth in Article II, Section 2.02, Table A of said Ordinance, and said rate of charges is to be reaffirmed by an affirmative vote of two-thirds of the members of the Board of Directors prior to implementing the increased charges set forth in said Ordinance, by the following vote (17 ayes, 8 nays): Brian Brady; Patricia Campbell; John Collins; Debbie Cook; Brian Donahue; Mike Duvall; Jim Ferryman; Alice Jempsa; Tony Kawashima; Beth Krom; Shirley McCracken; Bob McGowan; Roy Moore; Anna Piercy; Tod Ridgeway; Jim Silva; Paul Walker Steve Anderson; Don Bankhead; Carolyn Cavecche; Alberta Christy; Bill Dalton; Norm Eckenrode; Patsy Marshall; Joy Neugebauer N/A 9. MOVED, SECONDED AND DULY CARRIED: Adopt Resolution No. OCSD 03-13, Directing the County Tax Collector to Include Sanitary Sewer Service Charges on Fiscal Years 2003/04 through 2007/08 Property Tax Bills, and Repealing Resolution No. OCSD 02-10. I • Minutes for Board Meeting Page6 07/02/03 Directors Anderson, Bankhead, Cavecche, Christy, Eckenrode, Marshall and Neugebauer opposed. 10. Direct staff to evaluate, as follows, and report back to the Board of Directors at a future date but no later than May 2004: 1 . A water usage-based or other methodology-based user fee program for residential users; 2. The user fee structure for condominiums vs. that associated with the single family residential rate (SFR) and the multi-family residential rates (MFR); and, 3. The legal and policy implications of establishing a low-income user fee subsidy program. Directors briefly discussed fair and equitable assessment based on use but were concerned with an assumption the agency would be chronicling personal habits of residents, and perhaps the Board should re-evaluate anything of that nature. MOVED, SECONDED AND DULY CARRIED: Delay consideration of directing staff to evaluate a water usage-based user fee program for residential users; user free structure for condominiums vs. single family and multi family residential rates; and the legal and policy implications of establishing a low-income user fee subsidy program. 11. PUBLIC COMMENTS Darrell A. Neita expressed concern regarding a blocked storm drain which contributed to a hot spot at the mouth of the Santa Ana River, and a structure placed in the same location. Joey Racano addressed the Directors stating the epicenter of the 1933 Long Beach earthquake was Brookhurst and Pacific Coast Highway. He suggested the District move away from utilizing an outfall and the District's effluent be sent to AES. ADJOURNMENT: The Chair declared the meeting adjourned at 7:44 p.m. Secretary of the Board of Directors of Orange County Sanitation District $ 14,300 $ Phase 2 -Preliminary Design (Studies & Permittin $ 49,266 $ Phase 3 -Desi n $ 7 13,000 $ Phase 4 - Construction/Installation $ 2,959.421 $ Ph ase 5 Commissionin $ 123,674 $ Phase 6 -Close-Out $ 30,918 $ Conlin en $ 236 ,7 38 $ PROJECT TOTAL $ 4 ,127,317 $ I Reimbursable Costs I PROJECT NET 1$ 4,127,317 I $ 713 ,000 2,959.42 1 4,127,317 $ BUDGET INFORMATION TABLE FACILITIES MODIFICATIONS FOR ODOR CONTROL JOB NO. J-71-3 14,300 ·;;-, 49,266 $ 49,266 $•, - 780,847 $ 713,000 $ 67,847 2,959.42 1 $ -$ 2.491 ,918 123,674 $ 30,918 $ 168,891 ~· $ $ 4 ,127,317 $ 776,566 $ 2,559,765 I I $ $ $ $ $ $ $ $ 4,127,317 I $ .. 4,127,317 I , I$ 776,566 I $ 2,559,765 I $ EDMS/Doc Class/ClassfTemplate/Job BudgetlBudget Information Table (003717909) _, 14.300 $ 14 ,26 1 100% 49,266 $ 1,603 0 % 780,847 $ 578,779 74 % 2,491 ,918 $ 19,605 1% $ 0% $ 0% 0% 3,336,331 $ 611 ,042 18 % 3,336.331 I $ 611,042 J 18% July 23, 2003 MEMORANDUM TO: Board of Directors FROM: Bob Ooten Director of Operations & Maintenance SUBJECT: Level of Secondary Treatment and Disinfection Progress Data on the level of treatment progress and its impacts on the final effluent are attached. Historical trends for final effluent percent of secondary treatment for biochemical oxygen demand (BOD) and total suspended solids are shown. In addition, current data for the month's BOD, suspended solids and disinfection effectiveness is shown on a schematic of the treatment system. The Operations divisions continue to make in-plant adjustments and improvements to existing processes to advance toward secondary treatment standards. The final effluent result for the month of June was a blend of 66% secondary treatment and 34% primary treatment, which exceeds the target of 64% secondary treatment. During the 12 months prior to the Board's decision of July 17, 2002, the District's final effluent quality averaged 51 ppm TSS and 72 ppm BOD. The secondary treatment goal is 30/30 ppm BOD and TSS. The final effluent continues to be successfully disinfected using the temporary facility's disinfection system, which has been in operation since August 12, 2002. The disinfection system is significantly reducing the total coliform, fecal coliform, enterococci bacteria and viruses. June 2003 results for total coliform averaged about 3,900 MPN/100 ml down from an average bacteria level in the final effluent of 25,000,000 MPN/100 ml prior to disinfection. The final effluent had a maximum 0.15 ppm chlorine residual averaged over six hours on one day, which is well below the 1.45 ppm compliance limit. Up to date daily and 30-day average bacteria data is reported on the Web @ www.ocsd.com. A future feature on the Web will be an explanation of spikes in data that approach or slightly exceed targets or goals. RJO:pjm G:\wp.dta\om\810\FINAL\RJO\BOARD Handouts\042303\M-042303 Board Packet Cover Letter.doc Attachments (2) OCSD e P.O. Box 8127 e Fountain Valley, CA 9272B-8127 e (714) 962-2411 ppm 100 90 80 70 60 50 50 40 30 20 10 0 Jul Aug 2002 Ora11ge Cou11ty Sa11itatio11 District Operational Treatment Levels Revision 7/16/03 Final Effluent Monthly Data & 12-Month Running Average Percent Secondary Treatment 70% --.. ------..... . 60% 55% -- 50% ·- 45% Jul 2002 Aug Total Suspended Solids (TSS) in Final Effluent Sep Oct 1998 Permit Limit = 60 ppm 36 ... __ ;3L .. 37 .. 34 ---· -36---... ·35· 33 Nov Dec Jan 2003 ppm 100 90 80 73 70 60 50 40 30 6% Feb Mar Apr May Jun Biochemical Oxygen Demand (BOD) in Final Effluent 58 56. 56 .. 56 Secondary Standard Goal = 30 ppm 20 Secondary Standard Goal = 30 ppm 10 0 Sep Oct Nov Dc:c Jan Feb Mar Apr May Jun .Jul Aug Sep Oct Nov Dec Jan Feb Maf Apr May 2003 2002 2003 59 Jun Orange County Sanitation District Operational Treatment Levels Fiscal Year 2001-02 Ending June 2002 (Prior to July 17 Board decision) 47% 53 % Secondary ..,_..,. __ ___. Ocean Pipeline Final Effluent: BOD= 72 ppm TSS = 51 pp m Ocean Discharge Permit Limit: BOD = 100 ppm T SS = 60 ppm Progress to Secondary Standards Month: June 2003 34% 66% Secondary ...,__.....,. __ ..... Di sinfecti on & Dechlor lnatlon Or>11ne: Aug 12, 2002 Ocean Pipeline Bacteria Reduction: 99 .998% G oal : 99 .3 % Reductio n Chlorine Level Daily Maximum: 0.15 ppm Da il y M aximum 1.45 ppm (Ave rag e of Eig ht S ampl es) Final Effluent: BOD= 59 ppm TSS = 32 ppm Final Efflue nt Go BOD= 3 0 ppm T S S = 30 p pm RE: AG EN DA ITEM NO. 3 BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT DISTRICT'S ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CA 92708 REGULAR MEETING July 23, 2003 -7:00 P.M. Minute excerp ts h ave been received as set fort h be low. Pursuan t to Reg u la r Agenda Item No . 3, it is appropriate to rece ive and file said exce rpts : 3. Consideration of m otion to rece ive and file minute exce rpts from the follow ing re appointment of active a nd alternate Directors, as fo ll ows: City/Agency Sea l Beach Irvine Ranch Wate r Di stri ct Active Di rector Patri cia Ca m pbe ll Bri a n Bra dy G :\wp.dta\agenda\Board Agendas\2003 Board Agendas\072303 supple mental.doc Altern ate Dire c tor Pa ul Yost Peer Swan ,. July 23, 2003 CONFIDENTIAL MEMORANDUM To: Board of Directors From : Lisa Tomko Director of Human Resources Subject: Local 501 and OCSD Meet and Confer Process Re: Deferral of Closed Session Item Local 501 represents specific classifications of non-exempt employees in the Operations and Maintenance Department. The Memorandum of Understanding (MOU) between Local 501 and the District expired November 28, 2002 . Local 501 presented an initial proposal to the District on August 28 , 2002 , which initiated the meet and confer process . The District has been engaged in the meet and confer process with Local 501 since September 3 , 2002 . At the July 9, 2003 FAHR Committee meeting, staff and the District's special labor counsel reported on the status of the meet and confer process with Loca l 501. The report identified that the District and Local 501 had reached tentative agreement (T/A) on a proposed Memorandum of Understanding (MOU) on July 2, 2003. Also included in the staff report were updates on the authorized subjects included within the scope of bargaining according to the direction the FAHR Committee had previously provided . The Committee was advised that upon reaching the T/A, the Local 501 business agent, David Hamilton , and bargaining unit representatives committed to endorsing and making positive recommendations to bargaining unit members on the proposed MOU . Additionally, the FAHR Comm itte e was informed of Local 501 's i ntended schedule for voting the T/A, which encompassed the period of July 9 , 2003 through July 15, 2003 . The Committee directed that the T /A be recommended onto the Board of Directors for consideration, pend ing the outcome of the Local 501 vote. Due to internal union issues, voting concluded on the proposed MOU on July 17, 2003 . Local 501 counted ballots according to union rules, which resulted in a rejection of the T/A by what was described as a na rrow margin of four (4) votes. Based on the outcome of Local 501 's vote , staff will seek further direction from the FAHR Committee during closed session at the meeting scheduled for August 13 , 2003 on the desired course of action ; therefore, the closed session meet and confer related item regardi ng salaries, benefits , and terms and cond iti ons for employees represented by Internationa l Un io n of Operating Eng ineers , Local 501 will be deferred to a future Board Meeting. "\"' ·' (' .... July 23, 2003 TO: FROM: SUBJECT: M·EMORANDUM Board of Directors Robert P. Ghirelli, D.Env. ~ Director of Technical Services Fog Control Study Phase I Report In April 2002, the Board of Directors approved funding for Phase I of a Fats, Oils, and Grease (FOG) Control Study. Approval of the May 2003 final report is on tonight's board meeting agenda. The purpose of Phase I of the study was to determine the necessary elements of an effective FOG control program. OCSD and each of its member agencies are required by December 2004 to establish a FOG control program as mandated by the Regional Water Quality Control Board, Santa Ana Region (RWQCB). Please find attached an electronic copy of the final FOG Control Study Phase I Report. Your staff have been a great help in guiding the work of the consultant who prepared the report. The report contains six sections: 1. The Executive Summary recaps all the pertinent findings, conclusions, and recomme"-dations contained with the body of the report. 2. Section 1 introduces the subject of FOG control and the terms used throughout the report. 3. Sections 2 and 3 discuss the background of the issues and the research approach. 4. Section 4 summarizes the local conditions and practices within each jurisdiction. 5. Section 5 discusses major regional agencies and associations within Orange County and their potential roles in a FOG control program. 6. Section 6 contains the details of the individual building blocks that should be considered in assembling a FOG control program. An additional copy of the report is being distributed to key staff in your city for their use in preparing recommendations on how best to comply with the RWQCB requirements. If you or your staff have any questions, please call me at (714) 593-7400 or contact the OCSD staff members who worked on the project: Adriana Renescu or Mark Kawamoto, at (714) 593- 7435 and (714) 593-7424, respectively. RPG:MK:mb G:\wp.dta\ts\640\becerra\memos\cover memo for cd's.com Attachments c: M. Talebi A. Renecu STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Notice and Agenda for the Regular Board Meeting of Orange County Sanitation District to be held on ~ d 3 . 2003, was duly posted for public inspection in the main ab by of the Districts' offices on ?'" /? , 2003. ' ,I) ;df-- IN WITNESS WHEREOF, I have hereunto set my hand this ..LL_ day of ff 1----. 2003. Pen District G:\WP.DTA\ADMI N\BS\FOR M S\AGE NDA CERT I FICATIO N.DOC LAW OFFICES OF WOODRUFF, SPRADLIN & SMART A PROFESSIONAL CORPORATION MEMORANDUM TO: Chair and Members of the Board of Directors Orange County Sanitation District FROM: General Counsel DATE: July 16, 2003 -------~- ------------~---~~----- ---------Penny K i -------------- Board S .Vie (2 co • ecretary Pies no l b a e/) RE: Summary of Board Action Re Sewer Service Fee Ordinance Recognizing that there is at least some question as to the precise effect of the Board's actions, I have received a request from a few Directors to summarize and clarify the procedural and substantive aspects of the Board's decision to adopt Ordinance No. OCSD-20, amending the sewer service charges. 1. On May 28, 2003, Ordinance No. OCSD-20 was introduced by action of the Board in the form as submitted by Staff and the Office of General Counsel which included a provision, establishing incremental increases of sewer service charges in amounts of approximately 15% per year for the next five consecutive years. This would constitute the first of two required readings. 2. On June 25, 2003, the Board opened and conducted the Public Hearing and heard testimony concerning the proposed Ordinance as introduced. Following an unsuccessful motion to introduce a modified Ordinance, and an unsuccessful motion to adopt the introduced Ordinance, the Board reopened the Public Hearing and continued it to an Adjourned Regular Meeting of the Board scheduled for July 2, 2003. 3. On July 2, 2003, the Board continued with the Public Hearing, and heard testimony from 14 persons. Following the closing of the Public Hearing and discussion by the Board, a motion to adopt Ordinance No. OCSD-20, as introduced on May 28, 2003, without modification or amendment, was seconded. Said motion failed by a vote of 16 ayes and 9 nos. 4. After further brief discussion, a motion was made by Director Ridgeway, duly seconded, to adopt Ordinance No. OCSD-20, as introduced on May 28, 2003, without modification or amendment, but subject to the condition that upon adoption it would be required for the Board to have an annual review of the prescribed increases as set forth in the Ordinance, and that said scheduled increase must be reaffirmed by an affirmative vote of 2/3 Chair and Members of the Board of Directors July 16, 2003 Page2 of the Members of the Board of Directors prior to implementing the increased charges as set forth in said Ordinance. Summary Ordinance No. OCSD-20 has been adopted and provides for the increase in sewer service rates from the previous amount of $87.50 per year to the rate of $100.00 per year for Fiscal Year 2003-2004. The Ordinance further provides that the rates will increase approximately 15% each year over the next four consecutive years, but prior to the otherwise automatic implementation date of July 1st of each year, the Board will have scheduled, in its regular noticed meeting, a review of the prescribed increases. This will be accompanied by a report by the General Manager and the Finance Department indicating whether the rate of increase is, in fact, necessary and still recommended by Staff. Upon receipt of that information and review by the Board, an affirmative vote of 213 of the Members will be required prior to having the Ordinance provisions implemented in the amounts set forth. It will not be possible for the Board to increase the rates without further individual notices. TLW:jlo THOMAS L. WOODRUFF GENERAL COUNSEL phone: C714l 962-2411 fax : (714) 962-0356 www.ocsd.com mailing address: PO. Box 8127 Fountain Valley, CA 92728-8127 street addres s : 10844 Ellis Avenue Fountain Valley. CA 92708-7018 Member Agencies • Cit ies Anaheim Brea Buena Park Cypress Fountain Valley Fullerton Garden Grove Huntington Beach lrvme Ls Habra Ls Palms Los Alami tos Newport Beach Orange Placentia Santa Ana Sea/ Beach Stanton Tustin Villa Park Yorba Lmda County of Orange S a nitary Districts Costa Mess Midway City Wate r Di s tricts lrvme Ranch ORANGE COUNTY SANITAT ION DISTR ICT July 16, 2003 To the Chair and Members of the Board of Directors Subject: Board Letter The following are items that you may find interesting. If you need additional information on any of the items, please call me . OCSD is First in Nation to Receive Biosolids EMS Certification! The Orange County Sanitation District is the first public wastewater agency in the nation to be certified under the National Biosolids Partnership EMS program . The partnership is sponsored by EPA , the Water Environm ent Federation and the Association of Metropolitan Sewerage Agencies. The Orange County Sanitation District has been independently certified by KEMA-Registered Quality, Inc. as having an effective bi osolids environmental management system that supports continually improving environmental performance, meeting regulato ry compliance obligations, utilizing good management practices , and creating meaningful opportunities for public participation and is in conformance with the requirements of the National Biosolids Partnership (N BP ). Ceremonies are being planned to formally present the award to District officials, either here in Orange County or in Washingto n , D.C . Disinfection Update Our final effluent continues to be successfully disinfected using the temporary faci lity disinfection system, which has now bee n in operation since August 2002. T he disinfection system is significantly reducing the total co lifo rm , fecal coliform , enterococci bacteria and v iruses. June 2003 results for total coliform averaged about 3,900 MPN/100 ml (which is about 22 MPN/100 ml after dilution at the outfall diffuser) with a maximum daily value of 30 ,000 MPN/100 ml (which is 167 MPN/10 0 ml after dilution by the o utfall diffuser). The total co liform regulation o r standard after dilution at the outfall is 1,000 MPN/100 ml at the three mile lin e offshore. The final effluent had a maximum 0.15 ppm chlorine residual averaged over six hours on one day, which is we ll below the 1.45 ppm daily maximum compliance limit. Additional disinfection data is reported on the Web at www.ocsd .com . The upgraded bleach/dech lo rination facilities were approved by the Board of Directors in January 2003 and constru ction will be completed in the fall of 2003. These upgraded bleach and dechlorination facilities will be used until we determine the long-term technology that wi ll be used for disinfection and design and construct the n ew facilities. To maintain world-class leadership m wastewat er and water resource management. • Board of Directors Page 2 July 16, 2003 Secondary Treatment Standards Update All operationally available secondary treatment facilities are online. We continue to make in-plant adjustments and improvements to existing processes to advance toward secondary treatment standards. The final effluent is a blend of 67% secondary treatment and 33% primary treatment, which surpasses our target of 64% secondary treatment. During the 12 months prior to the Board 's decision of July 17 , the District's final effluent quality averaged 51 ppm TSS and 72 ppm BOD. During June 2003, it averaged 32 ppm TSS and 59 ppm BOD. The secondary treatment goal is 30/30 ppm BOD and TSS . Mohave County, Arizona Biosolids Update For the past two years, OCSD has been land applying a portion of its Class B biosolids in Mohave County, Arizona, in accordance with all of EPA's standards set forth in the "503 Regulations" required by the federal Clean Water Act. In response to public concerns , a community meeting sponsored by the Mohave County Board of Supervisors was held in May 2003 to discuss biosolids land application. A panel of biosolids stakeholders including OCSD staff , Arizona Department of Environ mental Protection, a state representative, County officials, an Arizona Agricultural Exten sion agent, and a Kings County Supervisor spoke to a crowd of approximately 300 people. The public lodged complaints of illness in ch ildren and adults that they blamed on the area 's biosolids activities. The Supervisors asked the Mohave C ou nty Health Department to interview the approximately 60 residents who have turned in reports claiming illness caused by the use of biosolids and to re port back on July 2 1, 2003. Residents of the Mohave Valley have raised the possibility of a class action lawsuit for damages related to these all eged biosolids-related illnesses (see attached news article). OCSD and its biosolids contractor Synagro ceased operations i n Mohave County and moved the land application operations to Synag ro's Fort Mohave farm on the California side of the Colorado River. On June 2, 2003, the Mohave County Board of Supervisors adopted an emergency interim ordinance that bans the land application of Class B biosol ids, with a grandfather clause that allows for existing permitted sites to continue to use Class B biosolids. It is expected that an ordinance will be brought before the Board of Supervisors for adoption at their August 4 , 2003 meeting that wo uld effective ly b an the land application of Class B biosolids on the existing permitted sites and only allow for the use of Class A Excep tional Qu ality biosolids . Synagro has threatened to s ue over the ban on Class B biosolids. Please note that while Synagro is developing oth e r options for OCSD's biosolids management, existing contracts with Tule Ranch, Yakima, and California Soil Products provide OCSD with more than adequate biosolids management capacity. Board of Directors Page3 July 16 , 2003 AB 1427 (Maddox) Biosolids Study California's biosolids regulatory policies and those of the 58 counties have produced a contradictory and unpredictable approach to effectively managing the 2 million tons of municipal biosolids produced annually in this state. A new state-wide policy must be developed. OCSD is sponsoring AB 1427 (Maddox) as a first step t owa rd a co herent and uniform statewide biosolids management policy that would acknowledge local interests , support the beneficial reuse of biosolids, and protect public health and the environment. AB 1427 has made it through the Assembly and the Senate Environmental Quality Committee and now awaits a hearing in the Senate Appropriations Committee. AB 1427 will require the California Environmental Protection Agency to conduct a study to determine the feasibility of establishing a statewide policy on biosolids treatment, disposal, and recycling. The study will also examine alternative technologies to treat and recycle biosolids and identify markets that can use treated biosolids. The California Farm Bureau Federation and the California League of Food Processors support this legislation. For the sake of moving the legislation through the legislature , we have agreed to be named as the funding agency for the study- estimated to cost $200,000. We are seeking co-funding support from CASA and our sister agencies. There 's much at stake here. For exa mple , our biosolids management costs are now over $5 million more per year than just four years ago- as a direct result of o rdinance changes in Kern and Kings Counties. GWRS Unit Ill Pipeline Bid Results Progress continues on GW RS-the single largest water reclamation project in the co untry . When com pleted in 2007, it will produce 70 million gallons per day of new water that will be the highest quality water supply in Southern California . The Unite Ill pipeline runs from Katella Avenue to Anaheim Lakes . Th e ap parent low bidder is Ken Thompson, In c. at $16 ,999,000. The engineer's estimate for this phase of the work was $19,500 ,000. The Water District staff is in th e process of evaluating the seven bids re ce ived on thi s project. Arrowhead Ill: January 9-11, 2004 Ea rly planning efforts for the third annual Orange County Leadership Symposium are underway. In th e past, the symposium has dealt with issues such as eff ectiv e leadership , effective communication , and effective teams. Public policy iss ues specific to OC are not part of the symposium. Th e symposium is designed for the memb ers of th e boards and city councils here in OC , but in keeping with Brown Act req uirements , the symposium will be open to others. Everyone attend ing the sy mpo s ium will pay a reg istration fe e . Th ere is much left to be decided about next year's symposium , but here's an ea rly heads-up o n what's likel y to be finali zed over the next few months. Board of Directors Page4 July 16 , 2003 The Symposium is proposed to be held at the UCLA Conference Center, as it has been for the last two years. The Center has been reserved for late Friday afternoon January 9 through noon Sunday January 11. A refundable deposit is now holding these dates. We evaluated a coup le of ve nu es here in OC and came to the conclu sion that the UCLA Confe rence Center remains a real bargain , considering the overall costs of lod ging, food, and meeting space. It also offers qualities that are valuable to the retreat process: contin uity , focus and quiet. Frankly, every OC venue has the same distinct disadvantage: It is too easy to "bail out" of the retreat process-both literally and figuratively . We plan to use a new facilitator to bring a fresh approach to the process and to bring a set of new concepts to the symposium. We have already had a conve rsation with Dr. Eric Allenbaugh , an author and lecturer on leadership principles . He has done work here in OC in both the corporate and public sector. A decision has not yet been made. The planning committee now consists of a representative of the OC C ity Managers Association plus the GM/CEO/ED from OCSD, TCA, LAFC O, the OC Division of the League, OCTA , and OCFA. We intend to ask for input from a few of the board/city co uncil members who attended A rrowhead II as planning continues to take shape . We also have in mind the concept of pre-symposium meetings , as suggested by Dr. Allenbaugh. Perhaps half of the people planning to attend Arrowhead Ill would agree to meet locally in groups of five or so, a few weeks before the January symposium. Lasting an hour or so , the purpose of the meetings would be to prospectively gather ideas and information from each of the attendees to make the symposium as close to a "1 O" as pos s ible. A budg et is unde r deve lopment and we expect that the cost will be born e by a combination of sponsorship funds from the participating agencies plus a registration fee for each attendee . Several Sanitation District directors attended Arrowhead I and Arrowhead II. If yo u are undecided about attendi ng Arrowhead Ill , I s uggest that you tal k to one of them. I wi ll prov id e updates to the Board from time to time as details become avai lab le during over the next six months . National Water Research Institute (NWRI) Blue Ribbon Advisory Panel for Secondary Treatment NWRI has offered to convene a blue ribbon panel to conduct a periodic review o f the Sanitation District's move to secondary treatment standards. NWRI has a history of providing third party peer review panels to review public utiliti es and government agen c ies regarding sci entific and technical matters . The panel will focus its efforts in three main areas: review progress toward achieving full secondary; review opportunities for optimizing existin g treatment faci lities ; and, identify R&D needs and Board of Directors Page 5 July 16, 2003 help the district fill those needs. The panel will serve as a neutral third party to communicate with the public about our progress toward secondary treatment. Panelists will be drawn from academia, public and private sector wastewater professionals, and public members representing various interest groups. NWRI will appoint the panelists and cover all costs associated with the meetings . The first meeting of the panel is tentatively scheduled for September 29-30 , 2003, in Orange County. The panel will meet twice a year during the secondary treatment construction period to receive progress reports and technical presentations from District staff and report out its findings . NWRI was founded in 1991 by a group of Southern Californ ia agencies in partnership with the Joan Irvine Smith and Athalie R. Clarke Foundation to promote the protection of water supplies through cooperative research work. GWR System Wins Public Education Award The Groundwater Replenishment (GWR) System , a joint project of the Orange County Water District (OCWD) and Orange County Sanitation District (OCSD), received a first place award for its public outreach program from the Public Relations Society of America, Orange County. The GWR System was honored for engaging in a comprehensive public outreach program design ed to communicate with all 783,000 households in the service area. Program elements included minority outreach , community relations, media relations , government relations , advertising, business outreach and collateral d evelopment. The judges from the Public Relatio ns Society of America gave the GW R System program a near perfect score and deemed it ... ''very thorough and impressive." Because of the program , the GWR System has strong community support from interests throughout Orange County including health , science, education, government, business , e nvironmental , water industry, community groups and individuals. FOG Control Study Fats , oils and grease (FOG) are a major co ntributor to sewer line blockages that lead to sewer spills . FOG control is one of the required elements con tained i n the General Waste Discharge Requirements (WDRs) issued by the Regional Water Quality Board to OCSD, cities and agencies. In April 2002, the District's Board of Directors authorized the FOG Phase I study to create the basic program elements of an effective FOG control program. The Phase I study report, completed in May 2003, recommends 12 building blocks for agencies to use in building their FOG control program. Board of Directors Page 6 July 16, 2003 In addition to the building blocks, the Phase I report identifies three significant technologies that could enhance and optimize the program , but which lack sufficient objective technical information and operational experience to be included as recommended options in the FOG control program. The report recommends field- testing of automatic grease traps, biological additives , and intercept or monitoring devices in Phase II of the study. The OMTS committee approved the Phase II program and it is on tonight's board meeting agenda for approval by the Board of Directors. After July 23, 2003, an electronic copy of the report may be obtained from the District's Internet site (www.ocsd .com) or by contacting Maria Becerra in the District's Source Control Di v ision at (7 14) 593-7413. Fat, Oil and Grease (FOG) Communications Planning In vitation letters were mailed out to the County of Orange, the cities and sanitation agencies in Orange County the week of July 7. The letter invited them to participate in the development of educational tools for a communications plan as required by the RWQCB. December 30, 2004 is th e deadline for establish ing and implementing a program. Included in the package were two sample program estimates and a Notice of Intent for Participation. The letter asked that th e notice be returned to OCSD by August 15, 2003. For more information , contact Carol Beekm an at 714-593-7120 or Sonja Wassgren at 714-593-7122. FOG Grant Application OCSD is requesting $250 ,000 from the Regional Water Quality Control Board (RWQCB) through Proposition 13 Water Pollution Preventi on grant funds. This funding will fund Phase II of the FOG Control Study Program, which will involve multiple pilot test applications for th e chosen techno logi es to test and measure the performance of various new or relati vely unproven technologies. These technologies were identified in the first phase of this program , which began in May 2002 and is now nearing completion. This phase was fully funded by OCSD. When complete , this study will assist the development of regional FOG control programs that will address SSO incidents by controlling the amounts of fats , oils, and grease released into the sewer system within Orange County through the use of treatment technology, education , and permitting. CSO and SSO Report to Congress On July 8, 2003, the U.S. Environmental Protection Agency (EPA) held a meeting at the Huntington Beach Public Library to provide stakeholders with an opportunity to Board of Directors Page 7 July 16 , 2003 discuss progress on EPA's 2003 Report to Congress (RTC ) on the Impacts and Control of Combined Sewer Overflows (CSOs) and Sanitary Sewer Overflows (SSOs). This report , due in Decem ber 2003 , will investigate environmental and human health impacts of CSOs and SSOs , resources spent by municipalities to control these impacts , and technologies for controlling these impacts. Attended by over 120 members of the regulated c ommun ity, pub lic health officials, representatives of environmental groups, and the general public , participants we re asked to comment on preliminary findings of the 2003 report and to discuss the report's implications for national policy. EPA presented the results of the data collection thus far, requested ve rificatio n of information and data sources, and solicited input on research implications. This meeting was a companion meeting to the stakeholders meeti ng of June 24-25, 2003, in Washington, D .C. The same information was presented at both meetin gs , though some issues were presented in slightly less detail at th e July 8th meeting t o allow for adequate discussion of key issues and concerns. If you have any questions regarding the RTC , this meeting, o r the D.C. meeting , please contact Kevin DeBell , EPA Office of Wastewater Management, debell.kevin @e pa.gov, 202-564-0040. OCSD staff will continue to monitor the progress of t he RTC through AMSA, and directly as possible . EPA is monitoring progress of our region 's WDR compliance project and how OCSD assists and networks w ith its satellite ci t ies and sewering agencies . We see the ATC as a precursor to EPA imple menting the proposed new SSO rule "cMOM", possi bl y in 2004 . Chino Annexes Dairy Area As we have reported several times in the last few years, the Chino Dairy Preserve has over 300,000 dairy animals existing in a 25-squa re-mi le area. It is the largest single dairy herd in the United States. Dairy manure and wash water are two of the biggest problems facing our watershed. We have worked cooperatively with several publi c agencies in the upper watershed to help manage some of these impacts. And , to no one's surprise , some of that may change in th e next decade as the dairies move away. As yo u travel 1-15 between Highways 60 and 91, I'm sure you have noticed all of the new houses appearing on the east side of the preserve. The re 's more of that ahead . In mid-July, the City of Chino officially acquired jurisdiction over 5, 216 acres of dairy and farmland as LAFCO took the final step in approving the annexation. Chino staff and officials have worked for more than three years to ann ex the land. Working with master developer Lewis Operating Corp ., Chino officials plan to transform the former Board of Directors Page 8 July 16 , 2003 San Bernard in o County Dairy Preserve into a master-planned commun ity ca ll ed the Preserve. Lew is is the largest land owner in the preserve . After c ity officia ls process the necessary maps, homes will start appearing as early as next year on the west side of the preserve. Warner Avenue Project -Community Outreach A community meeting was held July 9 at Meadowlark Golf Course in Huntington Beach to answer questions about the Warner Avenue sewer project. Approximately 5 ,000 letters were mailed to local businesses , schools and residences to notify them of the meeting and 1 O people attended that evening. After a brief presentation by OCSD staff , the City of Huntingto n Beach representative and the contractor answered questions about traffic, road closures , and work hours , etc. Construction is scheduled to begin late July to early August. Articles of Interest I have also included several additional published articles that yo u might find interesting. If you would like additional information on any of the above items, please call me. Blake P. Anderson General Manager BPA:jt G:\WP.DTAIADMIN\GM\LETTERS TO THE BOARD\03107 1603 BOARD LETTER.DOC Attachments Mr. Michael Moore · Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92728 Dear Mr. Moore, KEMA:I( July 8, 2003 KE MA-Registered Quality, Inc. has completed the Third Party Verification Audit of the Biosolids Environmental Management System being used by Orange County Sanitation District in managing its biosolids activities. The results of our independent audit verify that Orange County Sanitation District's Biosolids EMS meets the expectations and requirements of the National Biosolids partnership's EMS for Biosolids. We are pleased to be able to issue the following certification statement concerning your Biosolids EMS: "The Orange County Sanitation District has been independently certified by KEMA- Registered Quality Inc. as having an effective biosolids environmental management system that supports continually improving environmental petformance, meeting regulatory compliance obligations, utilizing good management practices, and creating meaningful opporlunities for public participation and is in conformance with the requirements of the National Biosolids Partnership." A full report of the results of our audit and our certificate will be issued in the near future. Congratulations on this outstanding achievement. Yours /Xtruly, I;·~ i r / (' I-(llL C Jor k- . H. Pierre Salle President -KEMA-Registered Quality Inc. KEMA -Registered Quality. Inc. 4377 Countv Line Road Chalfont Pi.. 189! 4 215-997-4::1 f 21 ~,-~·&7-3&06 fa}: \'-.rvr,:,.;. ~ro~sc:. ccm ) ,_ I "' ... ' 'Sludge Wars' author learns biosolids use in Mohave Valley worse than previously thought Pediatrician is conducting cluster study· of health problem 8)' THOM McGRAHAM in Mohave Valley in recent months Hee Scarr Writer is now conducting a cluster study to MOHAVE VALLEY -The determine if there is a direct connec - auth or of a book soon to be pub- 1 is hed . ..Sludge Wars:· visited Mohave Valley last week and, after inrcrvic.:win £ four different familie s , lcarnl'd th a t the hazardous health sit- uation caused by spreadi ng of class- B hum :m waste s ludgc on farmlands in th:it region is worse than he previ - ously had thou g ht. In fact . Tony Oliviera of Kings County. Calif.. the author. said a pediatrician in the reg ion who has eitamin~d a number of sick children tion between land application of the human waste biosolids or sludge and serious symptoms of respiratory and other problems affecting the health of children . Oliviera indicated that a num - ber o f residents of Mohave Valley are thinking poss ibly of leveling a class action law s uit against the .. generators and spreaders " of class - B sludge in Mohave Valley. TI1ere is even a report that one of the auor· neys hired by Enn Brod:.ov ich is In itia ting duster study ... ... . .... being or already has been coniacted by a re s ident or residents of Mohave Valley. If a class action lawsuil materializes. however. Oliviera said he will not be part of il because it would be .. inappropriate and unpro- fe ssional .. for him to do so. He said the book he is writing is necessary. neverth eless. because use of class -B sludge is a "nalional problem ." Acc o rding to Oliviera, the con - sensus opinion eitprc ssed by all of the adults m tht: four familie s he interviewed la st week for his book was that "if they they had a choice. Stt Sludge, Page 5 ----_!J I I l I . I I ~~-; ~:': ·~ ~' IJ·'t 1'.·· '.' ~ ·:, ~rP1 i!P '!J H arol .. 1 Co Hrr1 -i an~~ l:-: r :13 J,~Jn \·.1J :;>J." ccA1 f1..?r 1:1 : :··\••.::cl 1 lt1 .t1·r · :1.-J , ni.11 • 1,f u nh ... 11 !11.i b lit h\Jv.:c l I« h . ~ • ..,, .J ~ ,,_,:.ui: c ! .. 1•r1.,1d .n l 0 1 c l ,.· B :.lu J J•' ,)n !:Hr r ! :·. ! · ., .. ~." : ,. r . · '\~ :. 1 . n tr ::· ir':orv1+ :.H1CJ I d'',:~··: ~ .. • 1 LX.'U ~. f·.~ J4.". ·:., \1P:; t1Ht•<! .. S l1..u~~t '" \'.' ll .. '''I•· 1' i ., · : · :1 ~··-1 .... • 1 •• ·1: ·: .. Jf~:,: ~·~· r;n :J:· :: :t :"" • .i :·· .. i.. : : .. s · ... ut ! :: ..,:.· · ::...':.",.: ~~·. :. ,~~o ~r ~.: 1~ ·· r .. ~.-rd ·'"~m, Sludge ... !lw~ -.1,nuldn·1 lin· hc:n:. That tells. ~ Oll '-'lftl\.'fhjng:• < >h' 11.!ra. who is curr~nrly an adm&111~tr:uiv~ judge rm 1hc.· C:1lifc.\1ni•1 St:tH• 1\ppt:als Bo;trd fm I laz:ml, •11\ W;t'>h.'. -.;1id rhcrt~ 1 lm.'t' 111.1.rur 1~-.uc.·.;. .:m;mat i 11:: II nm use ot ""~''·'" B IO\\ t=radc. hum~m W<t'>h: ~Judge: tlil' environmental rssu~. lht· soc:i<tl j,.;ui: and thl." ~~(l· nomi1.: '''U<-' ... Th~·,c.· guy" •m.· (11tl) h1 i11µ111r 11u, ht•rt• ri~:ht nnv.· for l'Co· rn111111: 11.·.1 ... 011:-:· 111.· \..'Xpl;tirwd .. \\ tn \\ ould ynu driH· all the.• \\a~ ~•< h''~ till' tks'"·rl d-40 .tntl 1-1) I lrom Rt\t•rsidc or <>r:mgl! Counry lo brin~ it 1 'lud!!C) lw1·1.•'! It's '-'hc•tp~r h"l hrin~. II h1.·rl·.'· '\a1d Oli\ ic:ra. rcf<.·r· t in,g h.• s~ n;sgro. lhl: ~omp;m)· lh:11 ·~ p:)id b~ s1.·wa~c prol:cssors in Calif,1r111;1 tq tr.import low-gnu.k ~ludgc \JUl of that stale becausl· Califomi;1\ wasrt· <.h~pos~d l'apal·iry is \c..'\t•rd~ t.W~rla\cd dUc._'. to thl· !-=f\.".Ut·s 111rlu\ l)t rte.'" r~:"idc.·nr.' anti 'I'""'" ··Jhl.'y1c \.'c._•rtainly uol hrmt!lll:.' 11 hl'll' to imprn' t' tlw ~·m & ror1tt1n11. .md I dd11 ·1 c~m .. • wfl;tt any· ttnc ,;n '·th·: L11111t·1 ·,not bnn~ing it here w improve his propt:"ny.'' ~:1id ()1iv1t.·1;1. \\ht1 ,, a hu-..111c-.,m.1n ·r .1rmn 111 Kings ( •Jlllll.•. l ',1!tf .. Tht·y'rt.· hri11riri!! 1r lit·rt· I(' 111:.ik~ mitth:~ ;rnd. c\k•ty. i um.kr..;r:111d 1h:.it. l'u: Oran.1..•1: CQurH\ and Continued from Page J Syn;1~10 arl" hringin~ it her~· for '-"':o· nomi': n .. ·~'~ons. I lhink th~fl' 1~ a r'"·'·cr<>al on lht! et~onl)mk si<k of lhi!' rh;1t th~y ~•re not even thinking of:' ~~-tid Oli\·icra. ··Fanning i.s (lJll~ one p;.art of your husint.-s' hc:rc and in my ;tt\.'a t'f tht• \\ orld. form in!! j, tht• m;l_jt'r p;ut. .. Oli\ i~ra ~;iid in Km:;.s Count~. lhl"rC ·~ xoo.noo ad c._·~ of hmuland. "Wh~·• I'm w1tnesl'ing here, l•mnin~ '' not th~ m;sjor pan. You oin· ;* l"m ''' arc-a. Pt>1.1pk , .. ho n •rm.~ hl'll-' dur me the \\ IUll'f timl· vou call . . "-twv .. tmd-.,, right"! Pl'oplc come hcii: for rtw Colorado Ri\W. Pc:opk l"OllK~ hl·rc tor 1~;,ming. Four out of hmr f:m11lic:-. \\l.* t;tlk(."d to said of the) had thi..• dh)l\.:l'. lht.•y would live \Ortlc\1. here d!\c hecausc of 1his problem. There's ;1 rcvcrM.~ ~idl· of the economic~ of thi~:· he s.aid. Olivier:t is atS\) a professor of cconomrc~ and tt!achcs at a commu- nal~ Co1k~!l' in Kin~' County. "The l·1.·orht1Uh.' th:u Jll' hrin!!mg it t ,Jud;.:t.·' h~1t.· ~m· f•tl''-' \*CllllOIJIK~. It·~ a t1..~mpor;1ry hand aid bc~::Hl!'>C' < >r;m~ ... · ( ·vutll} ~md Sou1lwrn < «1lilnrni.1 have 11<.1 pl:K·c tCl g1) with II. So. s~ nat-•ro '1; joh j, l\l g<> :1.rmmd ;111d find ;1 '" ~o with it." he -.;mf Oln 11.·1 :1 ~atd he "is1lcd one h 1 >mt.· \'. hl'rl' thcr~ \\.~l\ ;i thrcc-yt·ar ••id °''Y '' !1n is -..id, lkforc hi~ fom· 11: mP\ d fwm Tt•\a'. lhl· ymmg'h'f --------------------.. -.. ·-·· \\. ~•s ncvt.•r side Ohvit·ra bdicvcs th\.· hn~ '' sick rnosl liJ...c:ly ht."Clll'•~· <:b!'.s · B sludge has f.x:cn appltt.·d nn forrnl:tnd :tpproxun:lldy 50 fo,·t from llu.· backyard where the l'<l! us\.!d to pl;,y, hut bc~am:e oi tht.' olf 1.•n,frc odor and tx·causc he.· 1s -.i, I... tlw hoy '"·;m no 11.m~cr go our '"k .md pby ~md must rcm;1111 u:sidc.:. < >livicr:.i. in hi' sc~'Jnd term as•• mt.•mt'l·r of 1h1.· Kings County B1)~1h! t1I Supt.'f\ 1sor~. ~~iid his COUIH~ ':-- ordm~llK«' h:mnin~ the u~'"! of cl;1ss H ,Jmlg1.· J1h'hrhit' up£r:uJcd <:la\s-:\ ... tudµi.· html ht:in!! ;\pplicd withm , .... o mi ks or rcsiJ\.."nt1al homes and :-.d1oob for lhl· 'cry rc;tson of the ;1ff\.'Cl the mah.~rial j, having on the: : oung boy's health. Thi: federal E1wironmcm~1l l'rotc.~\.·tion 1\gerK·y forbids sprcadin~ .:i( da,~-B oc even lhc. higher grade i.·las~-A ~lud~t." from being applied whik the wind is blowing ycr Oil\ ic.."ra \\ iln~·ss~:d Synagro worker' ;sppl~ rn1: \lud:1 c.~ on forml.snJ ).,,, \\ L·t· k \\ ht.~11 th•: wind ";,, hlo\\ In!-' \\ i11,1 hh>'-' Ill:! a\:ro~~ farmlands cm .:.in~ J•Jlh,•gt.·n.., for mile~ inh..> orh~·1 ... om mun ii 11..·s. ( >livicra pointc.:d out .11 :1 llll'c:tin~ '>t·n:ral weeks ago. Synagro. a~ it ha'\ been n:port· ,·J. '' th1.· ":omran~ lx•ing paid t'~ < )r JUg1.· Coum ~ h> lo\.·~1tc rur•ll :m:a .. and tamwrs in :\ri1.ona and 01hc1 .. t.•lt'' "hn an· \1.-iliing to !le paid 10 St•t SludJ?t 2. PaJ?l• ~ Sludge 2 ... . have class-8 human waste sludge spread on ·lheir fann fields because a number of rural counties in California have already banned the use of class-B sludge and there aren •1 any sites in lhat state that will allow dumping of the material. The latest is Rivenide County. Calif., which has banned use of class-B biosolids. There are eight ·farmers in Mohave Valley who. reportedly, have either used class-B sludge in lhe past as fertilizer or are now using class-B sludge to fertilize their fann lands. Oliviera has been commis- sioned to write a book about low- grade sludge and its hannful effects on human beings and animals. ~ludge"Wars .. inarg-ete-ctfor 'pU.1>ti"- aaion possibly as early as "August For the first book. concentrating Continued rrom Pap 3 research for his book on Orange County, Calif., Mohave County Ariz... and his own Kings County in June 27 ·July 3. 2clo31Page S C&lifornia near Fresno. 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"Budd:v-'' Morgon General Manager 'Noter Works & Sanitary Sewer Br.lord .\l\.-;;'tgomer1, A~ 'lice President 'N!Biam ~-Schr.itz Gen.era! Counsel ~-Jo!·theost Ohio Regivnal SeNer District ::iev~lot'd, OH Treasurer Donn:;; R. \A/heeler General Manager Hampton Roads Sanitation District Virginia Beach, VA Secretary Dick Champion, Jr. Director Water Pollution Control Department Independence, MO Executive Diredor Ken Kirk June 30, 2003 Edward Torres, Environmental Manager County Sanitation District of Orange County 10844 Ellis A venue Fountain Valley, CA 92728-8127 Dear Ed: amsa Association of Metropolitan Sewerage Agencies It is with great pleasure that I formally reappoint you as Co-Chair of AMSA 's Air Quality Committee. You will serve in this capacity collaboratively with Greg Adams, who will also serve as Co-Chair of the Committee. The issues addressed by the Air Quality Committee are of critical importance to AMSA 's members. I believe, through your leadership, AMSA' s work in this arena will continue to be highly effective. On behalf of all of AMSA' s members, thank you for your continuing service. Sincerely, Thomas R. "Buddy" Morgan AMSA President cc: Blake Anderson KenKirk :s1t5 Jdfe;:son Pface, NW, Washington, DC 20036-2505 • 202.833.2672 • 202.833.4657 FAX i.n.fo@amsa-deanwater.org • http://www.amsa-cleanwater.org ~;:?::ri.;t '¥> MONTHLY UPDATE July 2003 A Message from the Executive Director ... SOUTHERN CALIFORNIA ALLIANCE OF PUBLICLY OWNED TREATMENT WORKS At the risk of having you believe me to be older than I am , I was recently reminded of a time in our country's history when Japan was THE dominant economic force in the world and the United States' economy was defined by how lopsided the balance of trade between our two economies was . Yes, Japan, Inc ., was a formidable economic presence, and they kicked our collective derriere in practically any industry you can name . And in the course of doing so , they kicked us right back into something we had forgotten -the pursuit of excellence . From cars to cartoons and from fast food to financial services, we started to become more customer driven and quality focused. Economists will argue until their dying day about the forces that brought about America's resurgent economy, but in my humble opinion , the day we stopped blaming the Japanese for buying up half of our golf courses and started emulating many of their more admirable business practices, was the day we stepped out of our economic malaise. So I'm sitting in the SCAP Strategic Planning meeting we had all day on June 5th and it hits me -kaizen . Continuous improvement. In that room , on that day, twenty people had gathered to assist with the SCAP kaizen process. If you are ever involved in a strategic planning process, and you don't have some tough issues on the table , I will bet you good money that you have just taken part in an exercise in futility. No organization on earth is so good that they wouldn 't benefit from scrutiny of closely held beliefs and practices . SCAP included . Upcoming Meetings Air Quality Committee: Tuesday, August 12, 10:00 a.m. -Noon, Los Angeles County Sanitation Districts, Whittier So, tough questions were asked . Basic premises were examined. Is SCAP valuable to its members? How? Are we duplicating what other organizations do? What do we do if a major financial sponsor is lost? And my personal favorite : Who could possibly replace me when I retire? At the end of the day, we didn't have all the answers . But we do have clear direction from the Board on what they consider important to SCAP's continuous improvement, and a set of 20 measurable goals that I am to schedule out for completion over the next 4-6 months. But the thing that I will take away from this experience is something that continues to delight me after more than 40 years in this industry -the caliber of the minds and hearts of people that populate our community. I wish you all could be present at our meetings, I really do. Allow me a moment here to talk about the Board members, because I want you all to get a sense of the personalities and what a priceless gift we all have received because of their diversity. I won't use names, because it really isn 't important; what is important are the qualities they bring to our organization. Most of them are Rationals . Remember the Kiersey Temperament Sorter that we all were subjected to years ago? You've got the Rationals (intuitive thinkers), the Idealists (intuitive feelers), the Artisans 30200 RANCHO VIEJO ROAD , SUITE B • SAN JUAN CAPISTRANO, CA 92675 • EM A IL: kris@scap .occoxmail.com •PHONE: (949) 489-7676 •FAX: (949) 489-0150 •WEBSITE: scap1.org Monthly Update 2 July 2003 (sensing perceivers) and the Guardians {sensing judgers). It's not a big surprise that most of these people are engineers and rational thinkers. But they aren't stereotypes either. One is an Idealist and frequently reminds the others that whatever SCAP does, it must be open and transparent in its dealings with others and mindful of the public and their right to know what we are doing. In the next sentence, he is advocating fighting until the last man stands for the right to continue land application of biosolids. Another one is an Artisan -a risk taker, spontaneous and funny and diffuses tense situations with a light word when needed. And while you might think that the Rationals march lock step with one another, you'd be wrong. One thinks outside the box all the time and opens up vistas that no one else considered. Another is the mastermind, planting the seeds of an idea and watching as others bring it to its fullest realization. And yet another one acts as the facilitator, listening intently to others and then concisely summarizing all of the ideas presented in such a manner as to provide avenues for agreement between those who couldn't find them prior to that. I have received many moments of pleasure in my career, but as I sat in that room listening to the recommended actions that had been developed, I experienced the particular joy that comes with the realization that you are surrounded by the best, and because of that, the best would be achieved. Readers will note that something is missing from my column this month; namely, comments by the Editor. I feel I must take advantage of this omission. If you recall, in the June newsletter, the Editor made a point of stating that I, Simon Legree, had never allowed her to take a vacation in some seven years. She went on to state that I finally had given in and she would be taking an extended vacation in the latter part of June, first part of July, resulting in this newsletter arriving some ten days late. Well, now that she has experienced how the other half lives, she advises me she is taking another vacation in August; however, prior to the newsletter effort. I must give this some extensive thought. .. Kaizen, Ray Miller Strategic Planning Session/Board of Directors Meeting Board Develops List of Recommended Actions As a result of the Strategic Planning Session and Board Meeting held June 5-6, eight key areas were identified by the Board as strategic issues for the coming year. Under each issue, several tasks were outlined for completion by SCAP staff and/or committees. Among the highest priority tasks were: Finance: Prepare a report detailing new or additional sources of revenue besides increasing member dues and the actions required in the event of the loss of a major funding member. SCAP staff is also to prepare an Annual Report detailing accomplishments gained during the year and to hold an annual recognition lunch or dinner for member agencies, legislators and regulators to recognize industry contributions. Monthly Update 3 July 2003 Water Issues: A policy for d~aling with urgent issues or requesting action from SCAP members will be developed. More information on how to deal with mandatory minimum penalties, as well as a listing of penalties that have been levied, will be included on the SCAP website. Expansion of the SCAP permit database program, using grant funds or member agency staff forces, will be examined. Collection Systems: A report addressing the scope of services this new committee will be providing will be drafted. The report will include the sources of funding, adequacy of funding and details of the services that will be offered to members. Information regarding private laterals and potentially innovative ways to deal with reducing spills from them will also be addressed in a report. Biosolids: A strategy for preserving existing land application options and developing biosolids technology will be developed by the committee and submitted to the Board for approval. The strategy will address the needs of small communities, won't impede the efforts of agencies within their own regions and will assess the potential for payment of host fees. A workshop(s) on EMS audit outcomes will also be held. Air Quality: A report detailing enforcement actions will be developed and posted on the SCAP website, with the intention of encouraging enforcement consistency between air boards. Organizational Overlap: A report to the Board will be prepared that includes a table with the Mission Statement and skill sets for each wastewater association. A Master Calendar that lists all of the organizations' meetings and events will be posted on the SCAP website. A "Leadership Summit" with all the associations and their Boards will be held to discuss issues that could be worked on jointly. Associate Memberships: A bylaws change that would allow Associate Members will be examined and presented to the Board. Succession: A plan to find a successor to the Executive Director will be prepared by January 2004. Board Elects New Officers John Pastore, General Manager of the Lee Lake, Fairbanks Ranch, Rancho Santa Fe and Whispering Palms Community Service Districts was elected Chair of the Board of Directors, replacing Kamil Azoury of the Goleta Sanitary District. Blake Anderson of Orange County Sanitation District was elected Vice Chair. David Caretto of SOCWA remains Secretary/Treasurer, while Jerry Smith of the Montecito Sanitary District was asked to remain the Assistant Secretary/Assistant Treasurer until his retirement. The Board expressed its appreciation to Kamil for his leadership; Kamil served as SCAP Chair for 2% years and is only the second SCAP Chair -Chuck Carry of LACSD served as the first. Board Adopts FY 2003/2004 Budget The SCAP Board recommended the adoption of a FY 03/04 budget of $439,000. This budget represents a 5% increase from the previous year's budget of $419,475. No increase in dues was required. Contracts for consultants (Ray Miller, Mary Jane Foley, Lisa Ohlund) for the new fiscal year were also approved. Monthly Update 4 July 2003 Water Issues SWRCB Proposes Big NPDES/WDR Fee Increase After doubling fees last year and capping them at $20,000, the SWRCB is poised to adopt a new fee schedule that would include a new formula for determining fees and setting new maximums for NPDES and WDR permits. Under ABX1 10, the statutory cap on fees for NP DES and WDRs was eliminated. Fees for WDRs will continue to be assessed on the basis of a facility's Threat and Complexity rating. Fees for WDRs will increase throughout the scale from 90% to 100%, to a minimum of $800 and a maximum of $38,000. The fee table for NPDES discharges assessed on the basis of permitted flow will be replaced with the following formula: Fee= ($1,000 + 2139 *Flow) to maximum. The maximum fee for POTWs will be $50,000 (except as specified below); facilities enrolled in a pretreatment program will be subject to an additional $10,000 surcharge (it is not clear if this is per plant or per agency). All discharges with a permitted flow of 100 million gallons per day (mgd) or greater shall pay a flat fee of $100,000. The fee increase is retroactive to July 1. 2003. A workshop on the fee increase will be held on August 11, 2003 at the South Coast Air Quality Management District (SCAQMD) office in Diamond Bar starting at 10:00 a.m. Please let SCAP know if you plan on attending. We would like to coordinate presentations. SCAP, through a recent Alert, has asked its member agencies to respond to a questionnaire identifying the fiscal impact of the proposed fee increases. Update from EPA Headquarters on the Nutrient Criteria Development Schedule In their original guidance to the states, EPA was asking for nutrient criteria plans to be developed by 2004. That has changed. While there is no set time frame, EPA does not want to go beyond 2007. Additionally, in a memorandum from Bob Waylan dated November 11, 2002, EPA gives states much more flexibility in the development of the plans. There is a lot of recognition that Homeland Security and other big programs have cut programs to the states. EPA Headquarters is now more aware that states have less money than they would like. Headquarters is also aware that the Region IX program cannot be funded at the level that was initially anticipated in their previous work plans. EPA Makes Additions to 303( d) List Inland Empire Utilities Agency has Moved! IEUA's new address: 6075 Kimball Avenue Chino, CA 91710 Tel: (909) 993-1600 Fax: (909) 597-8875 Mailing address: P.O. Box 9020 Chino Hills, CA 91709 www.ieua.org On June 5, EPA formally notified SWRCB that they were approving 99% of the 303(d) listings submitted by the state; however, they were adding 5 additional water bodies and associated pollutants and additional pollutants for 15 waters that are already listed. Monthly Update 5 July 2003 For SCAP member agencies, these additions include: Reach 4 of Calleguas Creek, Reaches 1 & 3 of the San Gabriel River and Reach 4 of Coyote Creek (located within the LA Regional Board area) and Bolsa Chica, Anaheim Bay and Huntington Harbour (located within the Santa Ana Regional Board area). The EPA submitted a 22-page letter explaining their rationale for overruling the SWRCB. As SCAP members know, our members petitioned their Regional Boards for inclusion in the review of data and listing process and in some cases submitted extensive comments on the listings. SCAP members in Region 4 met with SWRCB staff members and heard their approach and submitted directly to them on many of the frustrating aspects of the listing process. According to their letter, EPA will solicit public comments on the additions to California's list; and, following consideration of any comments received, will transmit the final list to California for incorporation in the state's water quality management plan. While these additions may not directly affect your agency at this time, we urge all SCAP members to review the rationale used by EPA in making this decision. The Water Issues Committee will be following this issue closely. LARWQCB Basin Plan Amendment for Inland Surface Water Ammonia Objectives Approved Our thanks to Beth Bax of LACSD for submitting this report: The Regional Board approved revised Basin Plan objectives for ammonia based on EPA's updated criteria on April 25, 2002. The revised objectives were approved by the State Board on April 30, 2003 and were approved by the Office of Administrative Law and EPA in June 2003. The Basin Plan objectives for ammonia were based on "Ambient Water Quality Criteria for Ammonia - 1984," developed by EPA, which contains criteria for protection of freshwater aquatic life. The EPA's new 1999 criteria reflect research and data analyzed since 1985, and represent a revision of several elements in the 1984 guidance, including the relationship between ammonia toxicity, pH and temperature, and the recognition of increased sensitivity of early life stage forms of fish to ammonia toxicity. The 1984 criteria were based on un-ionized ammonia, while the 1999 criteria are expressed only as total ammonia. The 1999 criteria includes calculations for an average one-hour concentration objective, based on the pH of the receiving waters, and a thirty-day average objective of total ammonia, based on the pH and temperature of the waterbody. The most significant differences between the 1984 and 1999 criteria are: • Acute criteria are no longer temperature-dependent but remain dependent on pH and fish species present; • There is a greater recognition of the temperature dependence of the chronic criteria, especially at low temperatures; • An Early Life Stage (ELS) chronic criterion was introduced; • Chronic criteria are no longer dependent on the presence or absence of specified fish species, but remain dependent on pH and temperature; and Monthly Update 6 July 2003 • A 30-day averaging perio_d for the ammonia chronic criteria replaced the 4-day averaging period. As a result of different scientific methods being used to derive the criteria, the resulting ammonia objectives are slightly higher than the previous objectives. Though it is unclear as to how exactly the ammonia receiving water objectives will be applied as limits to POTWs, the refined criteria will probably afford POTWs slightly higher ammonia limits. California Watershed MOU Signed A memorandum of understanding was signed between Cal/EPA and the SWRCB to establish a framework for intra-departmental coordination of watershed program issues. Required by legislation (AB 2534, Pavley) the MOU has two major goals: 1. Improve coordination and integration of watershed policies, funding, and program implementation. 2. Provide advice and recommendations to the agency secretaries for awarding grants for local watershed plans and projects for the benefit of local watershed management efforts. The new Integrated Watershed Management Program (IWMP), established by the Pavley legislation, is the framework for implementation of the MOU, and the California Watershed Council (CWC) is the forum for public participation in this implementation. The IWMP is funded by $57M from Prop 40. The ewe will make recommendations to, and be co-chaired by, the secretaries for Cal/EPA and SWRCB; a public member, agreed to by both secretaries, will also be appointed as a co-chair. The CWC will be a partnership of executive level representatives of state agencies, the public, regional, and local watershed groups, interested federal and local governmental agencies, tribal nations, water management organizations, and other organizations. Meetings of the CWC will be open to the public, will provide an equal opportunity for all attendees to participate, and will be held at least twice per year. BASMAA/BACWA Pesticide Public Service Announcement Available The Bay Area Stormwater Management Agencies Association and the Bay Area Clean Water Agencies have produced a Pesticide PSA that lists environmentally friendly ways of approaching pest management around homes and businesses. The PSA is in a Word text file format, and is suitable for inclusion in billing inserts and/or newsletters or forwarding to the various media outlets. Air Quality Emergency Standby Diesel Engines Under Attack at SCAQMD At the June 4th SCAQMD meeting, the Board considered an update to the Minor Source BACT (Best Available Control Technology) Guidelines for Emergency Diesel Engines. SCAP has been discussing this issue with both CARB and SCAQMD because of impacts to the interruptible power agreements between wastewater and water agencies and the utility companies. Monthly Update 7 July 2003 In an unprecedented attack, parents of children who attend an elementary school near a seniors' living facility that maintains two standby generators came out en masse to complain that the proposed guidelines only address new diesel engines and don't address existing engines. In the process of presenting their concerns about their children's health, extensive misinformation was presented, as well as requests for continuous monitoring and extensive controls on the emergency engines. Comparisons were made to the siting of a nuclear power plant and that "desperate times call for desperate measures." Representatives from the National Resources Defense Council (NRDC) and the Coalition for Clean Air were also present and made extensive comments on the proposed guidelines that echoed many of the parents' comments. One commenter specifically asked that the SCAQMD not allow emergency engines to be used in conjunction with interruptible rate services. Due to these comments, the Board directed staff to not only update the guidelines, but to 1) require generators that are to be used for interruptible electric service programs to meet MSBACT for spark- ignition emergency engines, as recommended by staff; and 2) to direct staff to come back to the Board at a later date with options to address the issue of emergency diesel engines near sensitive receptors, taking into consideration the points that were raised in public comment on this item. Risk Management Plans Due for Resubmittal As was noted in SCAP's April Alert regarding this subject, both the USEPA's Risk Management Program (RMP) regulation and the CalARP regulation require that an owner/operator of a stationary source with a covered (hazardous material) process, such as chlorine or sulphur dioxide, must revise, update and resubmit their RMP to the USEPA and their local Administering Agency (AA) or CUPA within five years of its initial submission date. This means that for those facilities that submitted their RMP(s) on June 21, 1999, it will be necessary to revise and update their RMP(s) for resubmission by June 11, 2004, including revisiting their PHA, OCA, prevention program elements, response plans, etc., even if there have been no process changes in the past five years. The USEPA will be clarifying details of this 5-year resubmission requirement shortly. CalARP requirements could vary from AA to AA. During recent audits of these programs by the state, citations have been handed out over issues such as not having a post 9-11-01 vulnerability assessment, not having reflected changed earthquake codes, and not having conducted the mandatory staff training required of all RMPs. SCAP is studying the feasibility of again conducting a joint effort to update these programs. If you are interested in participating, please visit the SCAP website at scap1 .org and fill out the survey form (under SCAP Alerts 4/30/03) or contact Linda at the SCAP office at (949) 489-7676. CARB Holds Public Consultation Meeting on Proposed ATCM for Stationary Diesel Engines On June 5, CARB presented its proposed Air Toxics Control Measure (ATCM) to reduce particulate matter emissions from stationary diesel engines. The proposed ATCM is relatively unchanged from previous versions that have been proposed, except that some provisions were added for limited participation in the interruptible power contracts (variously referred to as 1-6 or IPC) program. While the IPC provisions were welcomed, as a practical matter the emissions reductions required may not be achievable on older engines. The presentation can be viewed at: http://www.arb.ca.gov/diesel/presentations.htm. Monthly Update 8 July 2003 Title V Ad Hoc Committee Update Information coming out of the Title V Ad Hoc Committee indicates that if you are subject to Title V and you have rental equipment or certain contractors using equipment for more than 72 hours in a quarter, that use has to be reported for your site and meet Title V requirements. Some contractors, such as landscaping, construction and demolition will not be covered under the requirements. Air Quality Committee to Meet with Supervisor Jim Silva Representatives from the Air Quality Committee will be meeting with Orange County Supervisor Jim Silva; who also acts as the Orange County representative to the SCAQMD Board. Committee members will be informing Supervisor Silva about air quality issues facing POTWs, such as the Environmental Justice Cumulative Impacts problems, emergency diesel engines, composting and biosolids air issues, and the 2003 Air Quality Management Plan. Input on Biofilters Wanted The Air Quality Committee is very interested in developing a testing protocol for biofilters that everyone can agree upon. If your agency has information on this subject, or testing data for voes, total voes, and sulphur compounds, please contact Greg Adams at (562) 699-7411 x2113. Public Relations PR Committee Holds Workshop SCAP members attending the June 19th PR Committee Workshop expressed appreciation for the three excellent spe~kers who shared some timely information with them. Linda Homscheid of the South Coast Water District discussed the Administrative Complaint received by the District and how the District responded both to the Regional Board and to their public. During the six- month period that the District worked to resolve the issues related to the Complaint, they concurrently negotiated a settlement offer with the Regional Board that included funding environmental programs targeted at improving local ocean water quality. These programs included expanding a kelp restoration program, funding an ocean-water testing lab at a middle school and continuing an ocean water-testing program at a high school. Dennis Woods of Carollo Engineers spoke on the highly successful public information campaign that the City of Oceanside used to dispel fears among neighbors of their wastewater plant regarding the plant's expansion. In a unique twist-many of the neighbors did not know about the plant, as it was not disclosed to them during the purchase of their property, and the City had to first deal with that issue before dealing with the expansion. Their strategy -meeting regularly with neighbors and addressing their concerns by upgrading plant features and bringing in an odor consultant-worked; they are well on their way with the construction. A copy of his PowerPoint presentation is available from the SCAP office. Monthly Update 9 July 2003 Jonathan Volzke was a former editor and reporter with the Orange County Register and now publishes his own paper, the Capistrano Dispatch. Jonathan provided interesting insight into the day-to-day workings of a newspaper, including tips on dealing with news reporters just learning the business, and established reporters looking for information. He advised when to meet with the paper's editorial board (when your concerns are about a subjective opinion of the paper -not because you've been getting a lot of press about your agency) and the importance of getting inaccurate information corrected by the paper (because it will be carried on in future stories unless there is a correction). He suggests touring your local newspapers and sitting in on story meetings (how stories are assigned to each reporter). When meeting with a reporter, always have a list of statistics ready for them to take with them (size of plant, number of people served, number of board members, etc.) and translate all acronyms. Collection Systems SCAP Collection Systems Committee Underway with 10 Members Chair Nick Arhontes of OCSD announced that SCAP has signed up 10 initial members to the Committee, as efforts are underway to form the committee and establish the services it will provide to members. Membership in this committee is open to all existing SCAP members for no additional fee; non-SCAP members can belong for a $500 annual fee. New SCAP members include: the cities of Anaheim, Glendale, Placentia, Rialto, and Santa Monica, Goleta West Sanitary District and Otay Water District. SCAP members also participating are Orange County Sanitation District, City of San Diego and the Rancho Santa Fe CSD. Biosolids Thanks to Deirdre Hunter, OCSD, for sending the following: Arizona Countv's Biosolids Ban to Remain In Place Pending New Ordinance fMohavn oany Nows. coml The biosolids ban in Mohave County remains in place while new ordinances are being considered. Another public hearing has been set for August 4th. During the July 7th regular meeting of the Mohave County Board of Supervisors, supervisors listened to a number of complaints from Mohave Valley area residents before voting to readdress a resolution banning all biosolids and to draft a proposed ordinance to give the county the power to regulate its use. Regulating would also give the county, through the Health Department, the authority to test soils and wells for contamination. To cover the cost of testing, the county would also collect fees from companies seeking permits. A "model" ordinance currently being considered includes a fee of $25,000 "per site application," however, that number is only a starting point. Supervisors asked the Health Department to interview the some 60 residents who have turned in reports claiming they have been plagued by illness they believe was caused by the use of biosolids. Biosolids applied in Mohave Valley by Synagro come from California sewer treatment plants, and are classified, from the least refined to the highest-B, A, and EQ. The county's proposed ban ordinance would prohibit the application of A and B biosolids, but does not include EQ compost, commonly found in garden shops. Monthly Update 10 July 2003 White read into the record a fax from the law firm Salmon, Lewis & Weldon of Phoenix, representing Synagro, challenging the board's authority to ban sewage sludge. "For nearly two years, Synagro has been applying biosolids to farmers in Mohave County for use as a fertilizer and soil amendment ... It is our position ... the Board lacks the authority to regulate biosolids in Arizona ... the ordinance is preempted by existing State law; and ... in direct conflict with numerous State statutes ... " Should Mohave County move ahead with an ordinance, the letter states, "Synagro will have no choice but to defend its interests through any legal means available." The board voted to direct staff to publish the proposed licensing ordinance and the Health Department to report on the 60 claims of illnesses received. A public hearing on the ordinances has been set for Aug. 4th. Thanks to Dindo Carillo of OCSD for these news briefs: EPAIWERF Join Forces to Address Biosolids Research Needs (Waste News.html The federal government is setting up a committee to address gaps in research involving land application of biosolids to ensure protection of public health and the environment. The Water Environment Research Foundation and the U.S. Environmental Protection Agency will bring together individuals with working knowledge and practical experience with biosolids. The committee will meet at a Biosolids Research Summit in Alexandria July 28-30. The group will address research gaps identified by the National Research Council in a 2002 report, which recommended that the EPA update the scientific basis of regulations covering biosolids. Pennsylvania County Commissioners Hear Protests to Biosolids Use (Tribune Democrat> Somerset County commissioners are stepping into a controversial proposal to dump Johnstown sludge in Larimer Township, a day after two of the three township supervisors quit in disgust. The commissioners yesterday said they unanimously oppose the idea, which has been met with heavy protest in the rural community in_ the southern part of the county. The board also is pledging to look at how treated sludge -technically called biosolids -may be regulated or banned altogether. Township officials also have been looking into whether a local ordinance could be used to stop the sludge, which might be spread on a farm off Route 160. The proposal from Carnegie Mellon Prof. Red Whittaker, a part-time farmer in the township, was made public in April. The sludge plan still is preliminary, and paperwork for state permits has not been filed. But after months of debate, Supervisors Robert Sines and Gerald Kennell abruptly resigned Monday night. They cited personal issues and the sludge controversy. More than 100 people showed up at Monday's township meeting, some of them members of a new organization calling itself Citizens Environmental Watch Group. Township resident Sandra Lepley, a leader of the group, said members want to educate the public about "possible risks" associated with biosolids, including health problems. Lepley said the group is planning a public forum later this month or early next month. "We've been meeting, we've been talking and we've been doing a lot of research," Lepley said in a telephone interview from her home. "We know what happens with farming fertilizer," she said. "We don't know what happens with this, and there are no long-term studies." .. Monthly Update 11 July 2003 County commissioners used much the same reasoning after meeting Monday with a Penn State professor. Commissioners cited a July report from National Research Council that said federal regulations on sludge "are based on outdated science" and should be re-evaluated. But the same report also said there's no documentation of a "causal association" between biosolids and health problems. Tests show that material meets federal "Class A" standards, meaning it has no detectable levels of pathogens such as viruses. EPA Fines Firm $70.000 for Application Violations fWaste News.html A Ventura County company has been ordered to pay the U.S. Environmental Agency nearly $70,000 for applying Class B biosolids to oat hay crops in 1996 and 1997 at nearly 10 times the accepted agronomic rate. The Clean Water Act forbids the application of sewage sludge fertilizer at a rate exceeding the amount of nitrogen a crop can take up. On May 19, an administrative law judge ruled that Tri-County Builders Supply violated the rule. Tri-County was a subcontractor to the city of San Buenaventura when the overapplication took place in a field in Rancho Canada Larga, according to the EPA. The city settled the case by paying $104,000. Tri-County challenged the fine brought against it, saying it was allowed to apply the biosolids at a higher rate as a one-time application to restore drastically disturbed land, but the administrative judge upheld the EPA's decision. Planned Tree Farm To Use Waste From Treatment Plant tKVAL-TV News -Eugene. Oregon> A multi-million dollar marriage between trees and sludge is planned for north Eugene. It is a unique plan to use the bi-product from the sewage treatment process, known as biosolids. The Metropolitan Wastewater Management Commission offers biosolids as free fertilizer to local farmers. But some of it will soon have a new use. Six hundred acres next to the biosolids facility in north Eugene will become a hybrid poplar tree farm. Next spring the fields will be home to the first of a planned 24,000 poplar trees, thriving on biosolids and reclaimed water from the sewage treatment plant Hybrid poplars grow very fast. In about eight years they will be harvested with the wood used as cores for plywood, decorative trim, even frames for some furniture. Selling the wood will help pay for the project, but the trees' primary purpose will be to use the biosolids. Managers will have better control over when and how much biosolids will be applied, rather than relying completely on local farmers as a market for the product. Pipelines to the field have to be built, and it is yet to be determined who will operate the tree farm for the local wastewater management group. But it is believed that it will become the largest waste reclamation project of its kind. The $5 million dollar price tag for this project will be paid for by the sewer fees collected in Eugene, Springfield and unincorporated Lane County. Augusta Dairv Awarded $550.000 in Sewage Sludge Lawsuit <Augusta Chronicle> Monthly Update 12 July 2003 Jurors on June 24th awarded $550,000 to Boyceland Dairy after a two-week trial in which the Boyce family accused the city of Augusta of poisoning its crops and cattle with sewage sludge. The award -a fraction of the $12.5 million sought by the Burke County family-fell far short of what the plaintiffs say is needed to help their dairy recover from its problems, however. The Boyces contended in a breach-of-contract lawsuit that the city's sewage sludge, applied to their land as free fertilizer from 1986 to 1998, contained heavy metals that contaminated their pastures. Those metals, they claimed, weakened immune systems in cattle and contributed to what some of their witnesses described as "unprecedented" mortality with no apparent cause. The city's defense team, which rested its case Friday after calling only two of its 10 witnesses, contended that the Boyces' problems were linked to poor management and common cow ailments such as Johna's disease. Jurors heard two weeks of testimony -mostly from the plaintiffs' witnesses -in the Richmond County Superior Court civil trial, then deliberated for eight hours Monday without reaching a verdict. Tuesday's deliberations took only an hour. Despite the jury award, the city has a request pending before Judge Carlisle Overstreet to dismiss the case over claims the statute of limitations for such a lawsuit has expired. The city faces a similar lawsuit from another farm that received Augusta's sewage sludge. R.A. McElmurray & Sons, of Hephzibah, filed a lawsuit in February 2001; a week after the Boyceland Dairy lawsuit was filed. No trial date has been scheduled in that case. New Jersey Regulators May Expand Use of Sludge as a Fertilizer. <Newsday> New Jersey's Agricultural Development Committee has proposed lifting a long-standing ban on fertilizing farms in the Farmland Preservation Program with sludge. The state Department of Environmental Protection may also follow suit and use sludge-fertilizer on other state-controlled land, but that decision won't be made until further study is done on the potential health risks involved with the plan. The current proposals would only allow the use of sludge that lives up to the federal standards of "exceptional quality," and farms in the preservation program would not be able to use sludge on food crops -only on sod, nursery plants and animal feed. Advocates note that sludge disposal costs have soared since it was banned from oceans and state landfills a decade ago, and many studies have since failed to find any link between sludge-based fertilizer, known as biosolids, and health problems. However, some environmentalists and scientists have attacked the plan. They note that besides human waste, the sludge may also contain various contaminants, such as fire retardants, heavy metals and detergent ingredients. The Agricultural Development Committee has scheduled a July 28 hearing on the matter, and a vote on the proposal could come as soon as Aug. 28. Thirteen plants in New Jersey now make sludge into fertilizer and, in 2001 about 47 percent of the 214,000 tons of sludge generated in New Jersey became fertilizer. The rest was used to cover landfills, incinerated or shipped out of state for disposal or recycling. Nationwide, about 60 percent of sludge is . applied to land, according to the National Academy of Sciences. Monthly Update 13 Non Sequitur Business Basics: Put goals in writing. If you can't put in on a sheet of paper ... you probably can't do it. Hire people smarter than you ... this shows you're smarter than they are. The best way to determine what motivates people? Ask them! Maintain an "action oriented" environment. All people act out of self-interest. Link individual and organizational goals. Find the squeaking wheels and don't oil them. A goal without a deadline is not really a goal ... it's a wish. Have an active rather than a reactive style. Focus on a few -"high impact" priorities. Deal with "causes" not "symptoms" in solving problems . July 2003 -MANAGEMENT MAGIC, Ideas to Help You Build and Manage a Winning Team. i I "' AGENDA BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT DISTRICT'S ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CA 92708 REGULAR MEETING July 23, 2003 -7:00 P .M. I In accordance with the requirements of California Government Code Section 54954 .2, this agenda has been posted in the main lobby of the District's Administrative Offices not less than 72 hou rs prior to the meeting date and time above. All written materials relat ing to each agenda item are available for public inspection in the office of the Board Secretary. In the event any matter not listed on this agenda is proposed to be submitted to the Board for discussion and/or action, it will be done in compliance with Section 54954.2{b) as an emergency item , or that there is a need to take immediate action which need came to the attention of the District subsequent to the posting of the agenda, or as set forth on a supplemental agenda posted not less than 72 hours prior to the meeting date . All current agendas and meeting minutes are also available via Orange County Sanitation's Internet site located at www.ocsd.com . Upon entering the District 's web site, please navigate to the Board of Directors section . 1 . Invocation and Pledge of Allegiance 2 . Roll Call 3 . Consideration of motion to receive and file minute excerpts of member agencies relating to appointment of Directors , if any. (See listing in Board Meeting folders) 4 . Appointment of Chair pro tern , if necessary 5. Public Comments: All persons wishing to address the Board on specific agenda items or matters of general interest should do so at this time. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to three minutes . Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Board of Directors except as authorized by Section 54954 .2(b). 07/23/03 6. The Chair, General Manager and General Counsel present verbal reports on miscellaneous matters of general interest to the Directors. These reports are for information only and require no action by the Directors . a. Report of Chair; consideration of Resolutions or commendations , presentations and awards b. Report of General Manager c. Report of General Counsel Page 2 ' 7. If no corrections or amendments are made, the minutes for the regular meeting held on June 25, 2003, and the adjourned regular meeting held on July 2, 2003 , will be deemed approved as mailed and be so ordered by the Chair. (Minutes for July 2, 2003 to be distributed at the 07/23103 Board Meeting.) 8. Ratifying payment of claims of the District, by roll call vote, as follows: ALL DISTRICTS 06/15/03 06/30/03 Totals $11 ,313,496 .37 $7 ,004,259.16 DIRECTORS: Pursuant to Government Code Section 84308, you are required to disclose any campaign contribution greater than $250 received in the past twelve months from any party to a contract involving OCSD . This requires that you identify the contributor by name. Further, you may not participate in the decision making process to award a contract to such party. For reference, you are directed to the Register of Warrants as to all current contractors/vendors with OCSD. For the specifics of Government Code Section 84308 , please see your Director's Handbook or call the office of General Counsel. CONSENT CALENDAR All matters placed on the Consent Calendar are considered as not requiring discussion or further explanation and unless any particular item is requested to be removed from the Consent Calendar by a Director, staff member or member of the public in attendance , there will be no separate discussion of these items. All items on the Consent Calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All items removed from the Consent Calendar shall be considered in the regular order of business. Members of the public who wish to remove an item from the Consent Calendar shall , upon recognition by the Chair, state their name, address and designate by number the item to be removed from the Consent Calendar. The Chair will determine if any items are to be deleted from the Consent Calendar. 9. Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same , as follows : 1 ·-, 07/23/03 Page 3 a. (1) Receive and file petition requesting annexation of 2. 77 acres to Orange County Sanitation District (OCSD) in the vicinity of Foothill Blvd. and Skyline Drive, in an unincorporated area of Orange County; and , (2) Adopt Resolution No. OCSD 03-15 , authorizing initiation of proceedings to annex said territory to OCSD (Proposed Annexation No. OCSD-30 -Selman Annexation). b. (1) Receive and file petition requesting annexation of 1.30 acres to Orange County Sanitation District (OCSD) in the vicinity of Orange Park Blvd. and Meads Avenue, in an unincorporated area of Orange County; and (2) Adopt Resolution No. OCSD 03-16, authorizing initiation of proceedings to annex said territory to OCSD (Proposed Annexation No. OCSD-31 -Matiasevich Annexation). END OF CONSENT CALENDAR 10. Consideration of items deleted from Consent Calendar, if any. NON-CONSENT CALENDAR 11 . STEERING COMMITTEE Consent Calendar a. Order draft Steering Committee Minutes for the meeting held on June 25, 2003 to be filed. Non-Consent Calendar b. Review and consideration of agenda items considered by the Steering Committee re the July 23, 2003 meeting. c. Consideration of items deleted from Steering Committee Consent Calendar, if any . 12. OPERATIONS , MAINTENANCE AND TECHNICAL SERVICES COMMITTEE Consent Calendar a. Order draft Operations, Maintenance and Technical Services Committee Minutes for the meeting held on July 2, 2003 to be filed. b. Receive and file Draft Long Term Biosolids Master Plan , Job No. J-40-7, dated June 2003, prepared by CH2M Hill , Inc. c. Recommend to the Board of Directors to: 07/23/03 Page4 (1) Receive and file Phase I FOG Control Study Report Executive Summary; (2) Approve a sole source Consultant Services Agreement with Environmental Engineering & Contracting , Inc., to conduct Phase II of the FOG Control Study, for an amount not to exceed $300,000 , providing for an expected reimbursement from participating agencies in an amount up to $270,000; and , (3) Authorize the District to enter into agreements with the County of Orange and the co-permittees for funding of the Phase II of the FOG Control Study, in a form approved by General Counsel. Non-Consent Calendar d. Consideration of items deleted from OMTS Consent Calendar, if an y. 13 . PLANNING , DESIGN AND CONSTRUCTION COMMITTEE (PDC ) PDC Consent Calendar a. There was no meeting held in July, 2003. PDC Non-Consent Calendar This item was not considered at the June 25 , 2003 Board Meeting : b . Approve Sewer Service Transfer Agreement for Irvin e Business Complex/Tustin Marine Corps Air Facility , with Irvine Ranch Water District, in a form approved by General Counsel. 14 . FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE (FAHR ) FAHR Consent Calendar a. Order draft Finance, Administration and Human Resources Committee Minutes for the meeting held on July 9, 2003 to be filed . b . Receive and file T reasurer's Report for the month of June 2003. c . Receive and file staff report re placement of FY 2003-04 Excess Workers ' Compensation and General Liability Insurance Renewals. d. 1) Approve an increase to the Temporary Employment Services Purc hase Order contract authority for an additional $350 ,000 , increasing the total authorized amount from $1,500 ,000 to an amount not to exceed $1 ,850,000 to pay additional expenditures for FY02/03; and , . .... ,... ,. 07/23/03 Page 5 2) Approve an increase to the Temporary Employment Services Purchase Order contract from $1,000 ,000 to an amount not to exceed $1 ,850,000 for FY03/04. e. Adopt Resolution No. OCSD 03-18 , a Resolution of the Board of Directors of Orange County Sanitation District, Authorizing the Execution and Delivery by the District of an Installment Purchase Agreement, a Trust Agreement and a Continuing Disclosure Agreement in connection with the Execution and Delivery of Orange County Sanitation District Certificates of Participation , Series 2003 ; Authorizing the Execution and Delivery of Such Certificates Evidencing Principal in an Aggregate Amount of Not-to-Exceed $280 ,000 ,000; Approving a Notice of Intention to Sell; Authorizing the Distribution of an Official Notice Inviting Bids and an Official Statement in connection with the Offering and Sale of Such Certificates and Authorizing the Execution of Necessary Documents and Certificates and Related Actions. f. Adopt Resolution No . OCSD03-17, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for FY 2003/04; and Repeal ing Resolution No. OCSD 02-13. FAHR Non-Consent Calendar g . Consideration of items deleted from FAHR Consent Calendar, if any. 15. JOINT GROUNDWATER REPLENISHMENT SYSTEM COOPERATIVE COMMITTEE (JCC) JCC Consent Calendar a. Order Joint Groundwater Replenishment System Cooperative Committee Minutes for the meeting held on May 12, 2003 and June 9, 2003 to be filed. JCC Non-Consent Calendar b. Consideration of items deleted from JCC Consent Calendar, if any. 16. (1) Approve plans and specifications for Facilities Modification for Odor Control II , Job No . J-71-3, on file at the office of the Board Secretary; (2) Receive and file bid tabulation and recommendation for Facilities Modification, Job No. J-71-3; and, (3) Award a construction contract to J.F. Shea Construction , Inc. for Facilities Modification for Odor Control 11 , Job No. J -71-3, for an amount not to exceed $1 ,899,875 . 17. Recess by Board of Directors , Orange County Sanitation District 07/23/03 Page 6 18. Call to Order, Board of Directors , Orange County Sanitation District F inancing Corporation . a. Roll Call b . If no corrections or amendments are made, the Minutes for the meeting held on June 26, 2002 , will be deemed approved , and be so ordered by the Chair. c . Report of the Director of Finance d. Adopt Resolution No. FC-02, Authorizing the Execution and Delivery by the District of an Installment Purchase Agreement, a Trust Agreement and a Continuing Disclosure Agreement in connection with the Execution and Delivery of Orange County Sanitation District Certificates of Participation , Series 2003, Authorizing the Execution and Delivery of such Certificates Evidencing Principal in an Aggregate Amount of Not to Exceed $280 ,000 ,000, Approving a Notice of Intention to Sell, Authorizing the Distribution of an Official Notice Inviting Bids and an Official Statement in connection with the Offering and Sale of Such Certificates and Authorizing the Execution of Necessary Documents and Certificates and Related Actions . 19. Adjourn, Board of Directors , Orange County Sanitation District Financing Corporation . 20. Rec onvene , Board of Directors , Orange County Sanitation District 21 . CLOSED SESSION : During the course of conducting the business set forth on this agenda as a regul a r meeting of the Board , the Chair may convene the Board in closed session to consider matters of pending real estate negotiations, pending or potential litigation , o r personnel matters, pursuant to Government Code Sections 54956 .8, 54956.9, 54957 or 54957.6, as noted. Reports re lating to (a) purchase and sale of real property; (b) matters of pending or potential litigation ; (c) employment actions or negotiations with employee repre s entatives; or which are exempt from public disclosure under the California Public Record s Act , may be reviewed by the Board during a permitted closed s es sion and are not available for public inspection. At such time as the Board takes fin al action on any of these subjects , the minutes will reflect all required disclosures of information . a. Convene in closed session , if necessary 1. Confer with General Counsel -Potential Litigation . Significant exposure to litig ation pursuant to Government Code Section 54956.9(b): Two (2) potential cases. t i • 07/23/03 Page 7 2 . Confer with Lisa Tomko , Human Resources Director and Steve Filarsky, Special Labor Counsel , re salaries, benefits, and terms and conditions for employees represented by International Union of Operating Engineers, Local 501 (Government Code Section 54957 .6). 3 . Confer with Real Property Negotiator (Government Code Section 54956 .8): Property: 9736 Ellis Avenue , Fountain Valley, Ca . 92708 District Negotiator: Thomas L. Woodruff, General Counsel Negotiating Party: Valentine M. Callens Under Negotiation: Instruct for price, terms , and conditions for the pu rchase , sale, exchange, or lease of subject property. 4. Confer with Real Property Negotiator (Government Code Section 54956.8): Property : 9479 Ellis Avenue , Fountain Valley, Ca. 92708 District Negotiator: Thomas L. Woodruff, General Counsel Negotiating Parties: Ricky and Marcy Betita Under Negotiation: Instruct for price, terms , and conditions for the pu rchase , sale, exc hange, or lease of subject property. 5 . Confer with Real Property Negotiator (Government Code Section 54956 .8): Property : 9465 Ellis Avenue , Fountain Valley, Ca. 92708 District Negotiator: Thomas L. Woodruff, General Counsel Negotiating Parties: Dan and Jean Godwin Under Negotiation: Instruct for price, terms , and conditions for the purchase, sale, exchange , or lease of subject property." 6. Confer with General Counsel -Potential Litigation . In itiation of Litigation pursuant to Government Code Section 54956 .9(c): One (1) potential matter b. Reconvene in regular session c . Consideration of action , if any, on matters considered in closed session 22. Matters which a Director may wish to place on a future agenda for action and staff report. 23. Other business and communications o r supplemental agenda items, if any 24. Future Meeting Date : The next Board of Directors regular meeting is scheduled for August 27, 2003, at 7:00 p .m. 25. Adjournments 07/23/03 Page 8 :''"'''''''''''''''''''''''''''"''''''''''''''''''''''''''''''"'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''"'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''"''; l NOTICE TO DIRECTORS: To place items on the agenda for the Regular Meeting of the Board of l ! Directors , items shall be submitted to the Board Secretary no later than the clos e of busines s 14 days ! !preceding the Board meeting . The Board Secretary s hall include on the agenda all items submitted by ! ! Directors, the General Manager and General Coun sel and all formal communicat ions. ! : : ! Ge nera l Ma nager Bl ake Anderson (7 14) 593-711 0 ban derson @ocsd .com ! !Board Secretary Penn y Kyle (7 14) 593-7130 pkvle@ocsd.com ! !Director/Engineering David Ludwin (714) 593-7300 d ludwin @ocs d.com ! !Director/Finance/Treasurer Gary Streed (714) 593-7550 gstreed @o csd.com ! !Director/Human Res ources Li s a Tomko (714) 593-7145 ltomko@ ocsd.com ! !Direc tor/Information Tec hnolog y Pat ric k Mil es (71 4) 593-7280 pmiles@ocsd .com i ! Director/Op e rations & ! i Maintenance Bob Ooten (7 14) 593-7020 ro ote n @ocs d.com i !Dire ctor/Tec hnical Se rvices Bob Ghirelli (714) 593-7400 rghi relli @ocs d.co m ! !Admini strative Services Mg r. Greg Mathews (7 14) 593-7104 gmathews@ocsd.co m ! !communication s Se rvices Mgr. Carol Beek man (714) 593-7120 cbeek man@ocsd .com ! [§~.r:i~.~~! .. Qg.~.!"!.~.~! ............................................. .Ib9.r.!"!.~.~ .. ~: .. Y.Y.<?g.9.~~.~ ................. (?.~.~) .. ?.§~~g~9.?. ...... tlw@ wss-la'!'.com ........................................... ! In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting , please contact the Board Secretary's office at (714) 593-7130 at least 48 hours prior to the meeting to allow the District to make reasonable arrangements to ensure accessibility to this meeting . G:\wp.dta\admin\BS\Agenda\072303 draft a gen da.doc ... • Orange County Sanitation District (Revised) MINUTES BOARD MEETING JUNE 25, 2003 ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708-7018 Revised Minutes for Board Meeting Page2 06/25/03 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was held on June 25, 2003, at 7:00 p.m., in the District's Administrative Offices. Following the Pledge of Allegiance and invocation the roll was called and the Secretary reported a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS x Shirley McCracken, Chair Bob Hernandez Steve Anderson, Vice Chair x Steve Simonian x Don Bankhead Leland Wilson x Brian Brady Darryl Miller x Patricia Campbell Paul Yost x Carolyn Cavecche Steve Ambriz x Alberta Christy Mike Garcia x John Collins Larry Crandall x Debbie Cook Connie Boardman x Bill Dalton Bruce Broadwater x Brian Donahue David Shawver x Michael Duvall Keri Lynn Wilson x Norman Z. Eckenrode Constance Underhill A James M. Ferryman Arlene Schafer x Alice B. Jempsa Marilynn M. Poe x Tony Kawashima Doug Davert x Beth Krom Christina Shea x Patsy Marshall Jim Dow x Robert McGowan Richard A. Freschi x Roy Moore John Beauman x Joy Neugebauer Grace Epperson x Anna L. Piercy Tim Keenan x Tod Ridgeway Don Webb x Jim Silva Chuck Smith Paul Walker x Larry Herman STAFF MEMBERS PRESENT: Blake P. Anderson, General Manager; Penny Kyle, Board Secretary; Carol Beekman; Bob Ghirelli; Jim Herberg; Greg Mathews; Patrick Miles; Bob Ooten; Gary Streed; Lisa Tomko OTHERS PRESENT: Thomas Nixon, Assistant General Counsel; Doug Korthof; Jan Vandersloot; Joey Racano; Mike Garcia; Greg Jewell; Darrell A. Nolta; Eileen Murphy; Greg Woodside; Dale Lechtman; Max Ralsten; Daphne Jennings; Minnie Capuana; Delores O'Neill; Stuart Jaffe; Larry Porter; Randall Bojan; Steve Jackson; Anna Triem; Maxine Musser; Terry Revised Minutes for Board Meeting Page3 06/25/03 Lane; Mike Wehner; Richard Lenell; Eileen Jurak; Robert C. Klocher; Roger K. Luchau; Kevin King; David C. Dunn; Thuytrang Le; Vincent Nguyen; Barbara J. Charnock; Thelma Pooler; Ralph Pooler; Mary Erckmann; Juan Hernandez; Don McGregor; Vikram Redd; W. Mullen; Robert Weymar; A. Kessler; Pat Stout; Mr. & Mrs. A.G. Gross; John Albright; Larry Richey; Teri Larsen; Paul Ozolins; Don Schulz; Shirlee Olesen; B.G. Olesen; Dick Byers; Cliff Chappell; Nick Caicos; Tony Flores; Vanessa Collacolt; Frank B. Gooday; Joan Irvine Smith; Leslie Quirk; Flint H. Smith; Marion E. McArthur; John McArthur; Martin Eckmann; Marilyn Roso; Susanne Hernandez; Warren White; Toby Weissert; Roger Stewartson; Linda Nichols; Vlado Sankovich; Buemt Unsenbach; Chris Mukai; Luis Coronado; Bette Lilly; John Cook; Charles Sandberg; Travis Sandberg; Paul Dye; Thom Coughran; Howard Cromer; Ruthann Doezie; Ralph A. Ardia; Jean E. Ardia; Reynaldo Lugo; Donald F. Hyatt; Tom & Marge England; Marlene Weishert; Emil J. Vodonilk; Larry Gallup; Irwin Haydock; S. Mulbright; S.R. Arcenberg; Steve Holden; Matt Pettinso; Art Perry; Lola Glass; Marilynn Pike; R. H. McDonald; Janice Pilkenton; Randy Worrel; Mike Worrel; Don Tanaka; Jim Weisheit; Mike Wellborn; Charles T. Hause; Peter J. Woodington; Brad Westeman; Bill Hunter; Virgil Hamilton; Ray E. Clark; David L. Cooks; Reginald Thatcher; Charlotte Norwood; Bill Norwood; Nora Dowd; Grant Bartolet; Harold Faber; Dean Reinemann; Peer Swan; Don Bevans; Glenda Paulsen Bevans; Fred Booth; Phillip Knypstra; Andrew Casmir; Bob & Marie Wood; Vic & Judy Edge; Henry Lulli; Beatrice Calderon; Florence Leach; Rob Nelson; Margaret Murphey; Larry Murphey; Bill Tappan; Judy Maddox; Cathy Steiger; Sophie Yocius; Janyce Rudisel; Dean Albright; Carol Collacott; Elaine Vittera; Kathy Sivor; Darrell Vitters; Paul G. Glaab; Grant Hoag; Rose Weisz; Diane Moldenhaus; Mary Jacobs; Charles Jackson; Donald R. Burchordt; David A. Murray; Alex C. Nixon; Al Magers; Helen Psaros; George Psaros; Carol Jackson; Keke Lee; Edward Lee; Jonathan Sanchez; Steffany Mathis Haertsch; Joseph Haertsch; Terri Rhoades; Jeani Garvin; Gary Martinez; Beverley Bushore; Marlene Wedner; Mike Wedner; Araksya Haprielian; Herbert Pronn; Jay Hosey; Terry O'Toole; Nancy Tooley Rogala; Rich ten Bosch; Marva C. Zubas; Thomas J. LaPorte; Sandra Mark; Steve Kiser; Linda Martin; A. Romano; G. Vu; Rocklin C. Cave; Pamela S. Burelsmith; Cornelius M. Corinado, Jr., Anne L. Stahlman; Stanley Zubas; Barbara Bramlage; Gerald Bramlage; Robert Mark; Karen Smith; Barbara Flaharty; Suzanne Edwards; Sidney Liptz; Helaine Liptz; Robert J. Coronado; Rudolph Stahlman; Dan Gooch; Louis Clark; Alejandro Carv; Patricia J. Walker; Rudolf Goetz; Dave Stairs; Stan Wlasick; Jim Orr; Scott Graham; Les Jones; Tom Peters REPORT OF THE CHAIR Chair McCracken thanked the Directors for making the decisions that would allow the District to continue conducting business in an efficient, sustainable and reliable manner, and maintaining the respect the District has earned over the past 49 years. She noted that it would take hard work for all to meet the December 2012 deadline for full secondary treatment. The standing committees scheduled for July was reviewed, noting that the PDC Committee would be dark; the FAHR Committee would meet in July and August because of meet and confer issues; and the July gth Ad Hoc Committee re Urban Runoff was rescheduled to be held on July 23rd, from 11:00 a.m. to 1:00 p.m., at the Irvine Ranch Water District (IRWD) San Joaquin Wildlife Sanctuary (also known as the Duck Club) to visit the wetlands natural treatment site operated by IRWD. All Directors were invited to attend. She requested those Directors who wished to attend to contact Jean Tappan, the General Manager's secretary. Revised Minutes for Board Meeting Page4 06/25/03 REPORT OF THE GENERAL MANAGER General Manager Blake Anderson announced a ribbon-cutting ceremony would be held for the initial portion of the GWRS microfiltration plant on July 14 at 4 p.m. at the Water District. All Directors were invited to attend. The Directors were referred to two items placed in their meeting folders that evening. The first item was the routine monthly report on the level of secondary treatment and disinfection progress. The effluent continues to be successfully disinfected to meet AB411 standards at the end of the outfall. The second item is a summary of the public comments received regarding the rate increase. The written comments were separated into notebooks according to city/agency, and were available for the Directors to review. REPORT OF THE GENERAL COUNSEL Assistant General Counsel Tom Nixon reported that the Superior Court ruled in favor for the Sanitation and Water Districts in the Pall Corp. vs. OCSD/OCWD lawsuit on the bid protest. ELECTION OF CHAIR Assistant General Counsel Tom Nixon briefly reviewed the provisions of the District's Rules of Procedure relating to nomination and election of the Chair and Vice Chair. This being the annual meeting fixed by the Board at which elections are held for the office of Chair of the Orange County Sanitation District, Counsel then declared the nominations open. Director Shirley McCracken was nominated as candidate for the office of Chair of the Orange County Sanitation District at the May Board meeting. There being no other nominations, a motion was made, seconded and duly adopted to close nominations. There being no other nominations, the vote was polled and the Secretary cast the unanimous ballot for Director Shirley McCracken as the Chair of the Orange County Sanitation District. ELECTION OF VICE CHAIR It was announced that the election of the Vice Chair of the Orange County Sanitation District was in order. Nominations were then called for the post, whereupon Director Steve Anderson was nominated. There being no other nominations, a motion was made, seconded and duly adopted to close nominations. A motion was then duly made, seconded and adopted to cast the unanimous ballot for Director Steve Anderson as the Vice Chair of the Orange County Sanitation District. APPROVAL OF MINUTES The Chair ordered that the minutes of the regular meeting held May 28, 2003, be deemed approved, as mailed. .. -q ~· Revised Minutes for Board Meeting Pages 06/25/03 RATIFICATION OF PAYMENT OF CLAIMS MOVED, SECONDED AND DULY CARRIED: Ratify payment of claims set forth on exhibits "A" and "B", attached hereto and made a part of these minutes. ALL DISTRICTS 05/15/03 05/31/03 Totals $9,033,209.88 $6,028,246.06 Director Cavecche abstained from discussion and voting on Warrant No. 53035; Director Dalton abstained from discussion and voting on Warrant No. 52736. Abstentions were pursuant to California Government Code Section 84308. 9. a. CONSENT CALENDAR MOVED, SECONDED AND DULY CARRIED: Reject the bids received on April 29, 2003, for Gas Compressor Building Upgrades at Plant No. 2, Job No. P2-79-1, due to bids exceeding the Engineer's Estimate. b. MOVED, SECONDED AND DULY CARRIED: Approve Addendum No. 2 to the Professional Services Agreement with RBF Consulting to perform a topographic field survey of the Santa Ana River Interceptor pipeline at critical river crossings, to comply with the Regional Water Quality Control Board tentative Cease and Desist Order, for an additional amount of$ 36,507.00, increasing the total amount not to exceed $ 75, 776.00. c. MOVED, SECONDED AND DULY CARRIED: Adopt Resolution No. OCSD 03-12, Establishing the Annual Appropriations Limit for Fiscal Year 2003-04 for the District in accordance with the Provisions of Division 9 of Title 1 of the California Government Code. NON-CONSENT CALENDAR 11. Consideration of the following actions relative to proposed Ordinance No. OCSD-20, An Ordinance of the Board of Directors of Orange County Sanitation District, Adopting Revised Sanitary Sewer Service Charges; Reaffirming Established Capital Facilities Capacity Charges; Reaffirming Established Miscellaneous Charges and Fees Relating to Industrial Dischargers, Source Control Permittees and Wastehaulers; and Repealing Ordinance Nos. OCSD-18 and OCSD-19: a. OPEN MEETING: The Chair declared the meeting opened at 7:15 p.m. MOVED, SECONDED AND DULY CARRIED: Receive and file approximately 1082 written comments in opposition to and in support of the increase in rates. Tom Nixon, Assistant General Counsel, provided the Directors with a brief review of the Ordinance process and the impacts of Proposition 218. Several of the written comments received referenced Proposition 218 and its impact on the Revised Minutes for Board Meeting Page6 06/25/03 proposed Ordinance. He noted that sewer service fees are exempt from Proposition 218. However, as a safety measure, the District has complied with the notice requirements imposed by Proposition 218 by providing notice of the proposed rate increases and the public hearing to the affected property owners. Proposition 218 provides that an agency is authorized to increase user fees unless a majority of the owners of affected properties present written protests against the fees. In the absence of a majority protest, the District may exercise its discretion to increase fees as long as the revenue raised does not exceed the District's cost of providing the service, and the revenue raised is used to pay for the cost of providing the sewer service. Gary Streed, Director of Finance, provided the Directors with a detailed presentation on the sewer service rate structure, cash flow summary, the District's reserves policy, and possible alternative considerations to the rate structure. In response to Directors' questions, Mr. Streed stated the residential and multi- family residential user fee revenue represents two-thirds of the user fees, and businesses representing the remaining one-third. After the COP issue planned for August, the District will have $628,465,000 in outstanding Certificates of Participation. A Director noted that with the approval of the 15% increase every year, by the year 2012 the District would need to borrow an additional $800 million and would owe a debt of $1,411,382,000. Directors questioned if a water usage comparison had ever been done based on water bills. A study had been done several years ago, but it was determined at that time it would be very difficult and expensive to establish. It was also reported there are approximately 40 different water agencies that use various methods of billing the District would need to work with to get the information needed. Assuming the knowledge could be shared, staff would then need to develop a methodology to determine the amount of water use and equate it to sewer use. It was also pointed out that consideration of reducing rates for senior citizens would not be allowed as fees must be based on use, not age. It was also noted that to bill/collect user fees based on water usage could be very expensive. PUBLIC COMMENTS: Public comments were received by the following who were opposed to the rate increase at approximately 15% per year for each of the next five years: Donald E. Bevans; Phillip Knypstra; Judy Edge; Bob Wood; Beatrice Calderon; Charles Sandberg; Florence Leach; Paul Durazo; Bob Doezie; Ralph Ardia; Janice Pilkenton; Dean Albright; Charles Hause; George Lindegren; Emil Vodonic; Reginald Thatcher; Bill Norwood; Nora Dowd; Grant Bartolet; Harold Faber; Eileen Murphy; Steve Holden; Matt Petteruto; Harold Glass; Darrell Nolte; Marilynn Pike; Arnie Pike; Robert Weymar; Pat Stout; Maxwell Ralsten; Bob Olesen; Tony Flores; Steve Jackson; Mark Leyes; Helen Psaros; George Psaros; Herbert Pronia; Joe Vu; Peer Swan Revised Minutes for Board Meeting Page7 06/25/03 Public cemments were received by the following who focused on a compromise to the proposed rate increase: Jan Vandersloot; Joey Racano; Rob Nelson; Doug Korthof; Greg Jewell; Daniel P. Gooch Public comments were received by the following that were in support of the rate increase: Tom England; Marge England; Irwin Haydock; Linda Nicholes; Charles Chappell; Larry Porter; Alex Mintzer; b. CLOSE PUBLIC HEARING: The Chair declared the public hearing closed at 10:13 p.m. c. MOVED AND SECONDED: To approve a revised Ordinance to reflect a rate increase of 14.3% for one year. d. Directors then entered into a lengthy discussion, citing numerous reasons to approve or to oppose the rate increase of 15% for five years. Director Jempsa advised she would have to leave the meeting without her vote due to family health matters. It was moved and seconded to end debate. The motion failed by a hand vote of 8 ayes. Debate on the rate increase continued. It was explained that the five-year rate structure would be reviewed annually to determine if the structured rate increase would be required, or if it could be reduced, and those rates would then be reaffirmed by the Board of Directors on an annual basis. There was concern expressed that the five-year rate program would not require public hearings on the rates on an annual basis. Some were concerned the rate increases would drive businesses out of Orange County. A substitute motion: MOVED AND SECONDED: To consider adoption of Ordinance No. OCSD-20, as introduced. This procedural motion to consider a motion to adopt Ordinance No. OCSD-20 in place of the prior motion was approved by a majority vote. Assistant General Counsel Nixon advised the next order of consideration is first to read the Ordinance by title only, followed by consideration of adoption of Ordinance No. OCSD-20 as introduced on May 28, 2003. 1. MOVED, SECONDED AND DULY CARRIED: Read Ordinance No. OCSD-20 by title only and waive reading of said entire Ordinance. 2. MOVED AND SECONDED: To adopt Ordinance No. OCSD-20, An Ordinance of the Board of Directors of Orange County Sanitation District, Adopting Revised Sanitary Sewer Service Charges; Reaffirming Established Capital Facilities Capacity Charges; Reaffirming Established Miscellaneous Charges and Fees Relating to Industrial Dischargers, Source Control Permittees and Wastehaulers; and Repealing Ordinance Nos. OCSD-18 and OCSD-19. Revised Minutes for Board Meeting Page8 06/25/03 Ayes: Nays: Absent: Ayes: Nays: Absent: A roll call vote was then taken on this motion to adopt Ordinance No. OCSD-20. After additional discussion, the motion failed (2/3 approval required) by a vote of 14 ayes and 9 nays, as follows: Patricia Campbell; John Collins; Debbie Cook; Brian Donahue; Mike Duvall; Larry Herman; Tony Kawashima; Beth Krom; Shirley McCracken; Bob McGowan; Roy Moore; Anna Piercy; Tod Ridgeway; Jim Silva Don Bankhead; Brian Brady; Carolyn Cavecche; Alberta Christy; Bill Dalton; Norm Eckenrode; Patsy Marshall; Joy Neugebauer; Steve Simonian Jim Ferryman; Alice Jempsa The Directors then returned to the discussion of the original motion for a proposed revised Ordinance with a rate increase of 14.3% for one year only. MOVED, SECONDED AND DULY CARRIED: To read this Ordinance by title only and waive the reading in its entirety. Assistant General Counsel Nixon clarified that the motion to approve a rate increase of 14.3% for one year would constitute a material change to the Ordinance, and, if approved, would be considered a first reading. Gary Streed clarified that changing to a one-year rate increase at this time could create some uncertainty in the minds of lenders as to future ability to raise fees to pay additional debt. It was also noted that a choice would need to be made to either do less, draw down the reserves, or increase borrowing. The motion to introduce (see, Paragraph c. above) the Ordinance providing for a rate increase of 14.3% for one year was voted upon and failed by a vote of 5 ayes and 18 nays, as follows: Brian Brady; Carolyn Cavecche; Norm Eckenrode; Bob McGowan; Joy Neugebauer Don Bankhead; Patricia Campbell; Alberta Christy; John Collins; Debbie Cook; Bill Dalton; Brian Donahue; Mike Duvall; Larry Herman; Tony Kawashima; Beth Krom; Patsy Marshall; Shirley McCracken; Roy Moore; Anna Piercy; Tod Ridgeway; Jim Silva; Steve Simonian Jim Ferryman; Alice Jempsa Directors then discussed the possibility of postponing the adoption of a rate increase and the Ordinance until the July 23rct Board meeting. Gary Streed advised the final date to submit the fees to the County Tax Collector for inclusion on the tax bills would be August 11. Directors then discussed reconsidering the original motion. Revised Minutes for Board Meeting Page9 ... -06/25/03 After lengthy discussion, Directors decided to then consider the balance of the agenda, and to return to this item when concluded. 12. Item delayed. 13. STEERING COMMITIEE MINUTES: A verbal report was presented by Director McCracken, Chair of the Steering Committee, re the June 25, 2003 meeting. The Chair ordered the draft Steering Committee Minutes for the meeting held on May 28, 2003 to be filed. 14. OPERATIONS. MAINTENANCE AND TECHNICAL SERVICES COMMITIEE Consent Calendar a. MOVED, SECONDED AND DULY CARRIED: Order draft Operations, Maintenance and Technical Services Committee Minutes for the meeting held on June 4, 2003 to be filed. b. MOVED, SECONDED AND DULY CARRIED: Approve combining the contract for Sodium Hypochlorite, Specification No. C-148, issued to Pioneer Americas, with the contract for Purchase of Bleach, Specification No. C-2002-98BD, also issued to Pioneer Americas, for a combined total annual amount not to exceed $5, 167 ,000, for a one year period effective August 11, 2003 through August 10, 2004, providing for a unit rate increase of 0.68% ($0.00315 per gallon), for a total unit price of $0.4635/gallon, including sales tax and delivery, and providing for four one-year renewal options currently contained within the contract, with the approved 10% annual cost escalation if necessary, for Specification No. C-2002-98BD. c. MOVED, SECONDED AND DULY CARRIED: Approve Amendment No. 1 to the agreement with U. S. Metro Group, Inc., for Janitorial Services, Specification No. S-2001-58, authorizing an additional amount of $24,000 per year for additional services, increasing the total annual amount not to exceed $343,978. d. MOVED, SECONDED AND DULY CARRIED: Award a contract to Sancen Technologies, Inc. for repair of 42-lnch Sewer Pipe at Treatment Plant No. 2, Specification No. S-2003-129BD, for an amount not to exceed $169,000. e. MOVED, SECONDED AND DULY CARRIED: Authorize the General Manager to negotiate and award a sole source contract with US Peroxide, Inc., for application of a proprietary chemical process consisting of hydrogen peroxide regenerated iron for odor and corrosion control in the Miller-Holder, Knott and Baker-Gisler trunklines, for the period August 1, 2003 through July 31, 2004, for a not-to-exceed unit price of $1.15/gallon for ferrous chloride and $1.85/gallon for hydrogen peroxide, for an estimated annual amount not to exceed $2,748,000, excluding State of California sales tax, with four one-year renewal options. Revised Minutes for Board Meeting Page 10 06/25/03 f. MOVED; SECONDED AND DULY CARRIED: (1) Receive and file Dairy Washwater Project Report, Phase I, dated May 21, 2003; and, (2) Approve Amendment No. 2 to the Agreement No. AKB-00-015 with Santa Ana Watershed Project Authority (SAWPA), Inland Empire Utilities Agency of San Bernardino County (IEUA), Western Municipal Water District of Riverside County 0/VMWD), and the Milk Producers Council (MPC) providing for Phase II to the pilot program to sewer dairy washwater to the Santa Ana Regional Interceptor (SARI) providing for changes in responsibilities for the project, in a form approved by General Counsel. g. MOVED, SECONDED AND DULY CARRIED: Receive and file Operations and Maintenance Annual Report 2002, dated October 30, 2002. 15. PLANNING. DESIGN AND CONSTRUCTION COMMITTEE A verbal report was presented by Director Donahue, Chair of the Planning, Design and Construction Committee, re the June 5, 2003 meeting. Consent Calendar a. MOVED, SECONDED AND DULY CARRIED: Order the draft Planning, Design and Construction Committee Minutes for the meeting held on June 5, 2003 to be filed, as corrected. b. MOVED, SECONDED AND DULY CARRIED: Ratify Change Order No. 2 to Bushard Trunk Sewer Rehabilitation, Job No. 1-2-4, with Steve P. Rados, Inc., authorizing an addition of $107, 724, and a time extension of two calendar days, increasing the total contract amount to $30,260,934. c. MOVED, SECONDED AND DULY CARRIED: Ratify Change Order No. 7 to Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37, with Margate Construction, authorizing an addition of $14,750, increasing the total contract amount to $70,949,278. d. MOVED, SECONDED AND DULY CARRIED: Ratify Change Order No. 4 to Solids Storage and Truck Loading Facility at Plant No. 2, Job No. P2-60, with JW Contracting Corporation, authorizing an addition of $83,262, increasing the total contract amount to $10,775,287. e. MOVED, SECONDED AND DULY CARRIED: Approve Addendum No. 4 to the Professional Services Agreement with Carollo Engineers, P .C., for Electrical Power System Studies, Job No. J-25-4, providing for a reduction in the Scope of Work, reducing the total amount not to exceed $2,225,292.42. f. MOVED, SECONDED AND DULY CARRIED: (1) Approve a budget amendment of $133,250 for Supplement No. 1 to the 1999 Strategic Plan Final Program Revised Minutes for Board Meeting Page 11 • 06/25/03 Environmental Impact Report, Job No. J-40-5, for a total project budget of $565,250; and, (2) Approve Addendum No. 2 to the Professional Services Agreement with Environmental Science Associates for additional environmental services for an additional amount of $178,500, increasing the total amount not to exceed $372,500. g. MOVED, SECONDED AND DULY CARRIED: Approve Professional Services Agreement with Fluor Daniel Corporation for Electrical Equipment Refurbishment and Protection, Job No. SP-81, providing for engineering services to replace various existing electrical power distribution equipment, for an amount not to exceed $85,500. h. MOVED, SECONDED AND DULY CARRIED: Approve Addendum No. 9 to the Professional Services Agreement with Lee & Ro, Inc., for Secondary Treatment Facilities Process at Plant No. 2, Job No. P2-47-3, providing for modifications to the scope of work for an additional amount of $63,439, increasing the total amount not to exceed $2,408,636. i. MOVED, SECONDED AND DULY CARRIED: Approve Addendum No. 4 to the Professional Services Agreement with Black & Veatch Corporation for Effluent Pump Station Annex, Job No. J-77, providing for additional design engineering services for an additional amount of $372,300, increasing the total amount not to exceed $4,387 ,823. Non-Consent Calendar j. Item continued to July 23, 2003. 14. FINANCE. ADMINISTRATION AND HUMAN RESOURCES COMMITTEE Consent Calendar a. MOVED, SECONDED AND DULY CARRIED: Order the draft Finance, Administration and Human Resources Committee Minutes for the meeting held on June 11, 2003 to be filed. b. MOVED, SECONDED AND DULY CARRIED: Receive and file Treasurer's Report for the month of May 2003. c. MOVED, SECONDED AND DULY CARRIED: Approve SAFETY-POL-110- Radiation Safety, as provided for in Resolution No. OCSD 02-5, regarding the District's Injury and Illness Prevention Program Policy. Revised Minutes for Board Meeting Page 12 06/25/03 d. MOVED; SECONDED AND DULY CARRIED: Response to the Board of Directors inquiry during the March 26th Board meeting on item FAHR03-18, temporary employment services. e. MOVED, SECONDED AND DULY CARRIED: Approve the Westminster Redevelopment Agency's proposed settlement and release agreement, in a form approved by General Counsel. f. MOVED, SECONDED AND DULY CARRIED: Adopt Resolution No. OCSD 03-14, Declaration of Official Intent to Reimburse Certain of the District's Capital Reserve Funds for Expenditures Made in Advance for FY 2003-04 Capital Improvement Projects from Proceeds of a Future Long-Term Financing. g. MOVED, SECONDED AND DULY CARRIED: Apply for membership with the California Public Entity Insurance Authority and approve the District's Excess Workers' Compensation Insurance for the period July 1, 2003 through June 30, 2004, in an amount not to exceed $168,720. h. MOVED, SECONDED AND DULY CARRIED: Authorize the General Manager to purchase the District's Excess General Liability Insurance Program for the period July 1, 2003 through June 30, 2004, in an amount not to exceed $400,000. i. MOVED, SECONDED AND DULY CARRIED: Renew the District's Boiler & Machinery Insurance Program for the period May 15, 2003 to July 1, 2004, in an amount not to exceed $89,676. j. MOVED, SECONDED AND DULY CARRIED: Renew the District's All-Risk Property and Fire Insurance Program for the period July 1, 2003 through June 30, 2004, in an amount not to exceed $716,494. Non-Consent Calendar k. MOVED, SECONDED AND DULY CARRIED: Approve proposed Operating, Capital, Debt/COP Service and Self-Insurance Budgets for 2003/04, as follows: Net Joint Works Operating/Working Capital Worker's Compensation Self Insurance General Liability and Property Self-Insurance Collection System Operating Capital Improvement Program Debt/COP Service $77,009,500 580,000 2,371,000 12,500,500 201,453,000 36,950,000 15. GROUNDWATER REPLENISHMENT SYSTEM JOINT COOPERATIVE COMMITTEE Item continued to July 23, 2003. • ·~ Revised Minutes for Board Meeting Page 13 06/25/03 18. Consider approval of Amendment No. 3 to the Professional Services Agreement with Integrated Program Management Consultants, a joint venture of Parsons Infrastructure & Technology Group, Inc. and CH2M Hill, Inc., authorizing: (1) An increase to the five-year agreement in the amount of $35,000,000, for a total amount not to exceed $50,000,000; (2) An increase for the first year of the agreement for an additional amount of $150,000, increasing the total amount not to exceed $4, 185,27 4 for FY2002/03; and, (3) Establish an amount not to exceed $12,484,750 for year two of the contract, FY2003/04. MOVED, SECONDED AND DULY CARRIED: Following a brief report by Jim Herberg, Engineering Manager, and some discussion by Directors, it was approved, as follows, to: (1) Not consider Item 18(1 ); (2) An increase for the first year of the agreement for an additional amount of $150,000, increasing the total amount not to exceed $4, 185,27 4 for FY2002/03; and (3) Establish an amount not to exceed $12,484,750 for year two of the contract, FY2003/04. 19. PUBLIC COMMENTS Doug Korthoff addressed the Board regarding the Brown Act and possible violations. During public comments, he also expressed appreciation for not engaging with the public during the comment period. 11. Agenda Item ( 11) was revisited and Chair McCracken asked for a motion to reconsider the adoption of Ordinance No. OCSD-20. MOVED, SECONDED AND DULY CARRIED: To reconsider the failed prior motion (see Item 11, Paragraph d.2. above) to adopt Ordinance No. OCSD-20, as introduced by approved motion of the Board of Directors on May 28, 2003. An Ordinance of the Board of Directors of Orange County Sanitation District, Adopting Revised Sanitary Sewer Service Charges; Reaffirming Established Capital Facilities Capacity Charges; Reaffirming Established Miscellaneous Charges and Fees Relating to Industrial Dischargers, Source Control Permittees and Wastehaulers; and Repealing Ordinance Nos. OCSD-18 and OCSD-19. The motion carried by a show of 18 hands. REOPEN PUBLIC HEARING: Chair McCracken then reopened the public hearing at 12:37 a.m., June 26, 2003. MOVED, SECONDED AND DULY CARRIED: To continue to an adjourned regular meeting to be held on July 2, 2003, at 5:30 p.m., with the public meeting open, consideration of the adoption of Ordinance No. OCSD-20, an Ordinance of the Board of Revised Minutes for Board Meeting Page 14 06/25/03 Directors of Orange County Sanitation District, Adopting Revised Sanitary Sewer Service Charges; Reaffirming Established Capital Facilities Capacity Charges; Reaffirming Established Miscellaneous Charges and Fees Relating to Industrial Dischargers, Source Control Permittees and Wastehaulers; and Repealing Ordinance Nos. OCSD-18 and OCSD-19. 20. There was no closed session. ADJOURNMENT: The Chair declared the meeting adjourned at 12:38 a.m., June 26, 2003, to an Adjourned Regular Meeting on Wednesday, July 2, 2003, at 5:30 p.m., to consider proposed Ordinance No. OCSD 20. Warrant No. Vendor ~~~~~~~~~~~~~~~ Accounts Pavable -Warrants 52626 Air Products & Chemicals 52627 ADS Environmental Services, Inc. 52628 Black & Veatch Corporation 52629 Brown & Caldwell 52630 Carollo Engineers 52631 Coral Energy Resources, LP. 52632 Ciba Specialty Chemicals Corporation 52633 DWG Associates 52634 Health Science Associates 52635 IPMC c/o Parsons 52636 J.F. Shea Construction, Inc. 52637 Kaiser Foundation Health Plan 52638 Kemlron Pacific, Inc. 52639 Lee & Ro, Inc. 52640 Malcolm Pirnie, Inc. 52641 Margate Construction, Inc. 52642 Orange County Water District 52643 Pacific Process Equipment, Inc. 52644 Pioneer Americas, Inc. 52645 Pixelpushers, Inc. 52646 Southern California Edison 52647 Southern Contracting Company 52648 Systime Computer Corp. 52649 Techno Coatings 52650 Tule Ranch 52651 U.S. Peroxide 52652 Waste Markets Corp. 52653 Weld-It Company 52654 A-Plus Systems 52655 Ace Restoration & Waterproofing, Inc. 52656 Great American Printing Co. 52657 Advanced Engine Technology Corporation 52658 Airborne Express 52659 Airgas -West 52660 Airgas Safety 52661 Alhambra Foundry Co., Ltd. 52662 American Airlines 52663 American Chemical Society 52664 American Red Cross 52665 Amrican Air Filter, Inc. 52666 Appleone Employment Service 52667 Arch Wireless 52668 Ashbrook Corporation 52669 Awards & Trophies Company 52670 Axeda Systems, Inc. 52671 ASSE American Soc. of Safety Engineers 52672 AT&T Universal Biller 52673 American Telephone & Telegraph Corp. 5267 4 AT & T Wireless Services -Airtime Claims Paid From 05/01/03 to 05/15/03 Amount $ 25,758.02 77,584.66 116,400.42 52,878.31 148,105.66 73,343.13 30,508.75 26,903.65 51,993.65 440,584.00 1,638, 111.84 42,059.80 162,921.44 112,616.49 194,934.64 1,863, 124.00 254,710.82 30,277.75 238,003.76 46,268.00 73,113.64 69,305.00 86,100.00 43,984.50 150,366.81 67,896.53 27,085.70 35,990.66 305.00 3,203.00 533.37 1,256.11 149.63 189.97 938.80 1,316.71 4,880.00 123.00 274.00 1,504.34 7,098.53 1,911.57 211.33 55.48 5,323.00 140.00 3,182.00 159.89 3,954.98 Description O & M Agreement Oxy Gen Sys MO 8-8-89 Professional Services J-73-2 Engineering Services J-77, P2-85 & SP-73 Engineering Services P1-37 Engineering Services J-39, P1-60, P2-60 & Microfiltration Demo. Project Natural Gas Cationic Polymer Professional Services -Oxygen Plant Replacement/Rehabilitation Assessment Professional Services -Asbestos Study Professional Services -Program Project Management Construction J-35-2 & J-87 Medical Insurance Premium Ferric Chloride MO 9-27-95 Professional Services P2-47-3, J-71-7, P1-93, 5-43-1, 5-22-R1 Professional Services 1-10 & J-79 Construction P1-37 GWRS Project J-36 Pump & Pump Parts Sodium Hypochlorite Internet Site Redesign, On-Line Tech. Spec., Scope of Work Library & Temp. Services Power Construction J-33-1 Professional Services -J D Edwards One World XE Implementation Painting Services -Fiberglass Chemical Tanks & Scrubbers Residuals Removal MO 3-29-95 Hydrogen Peroxide Maint. Agreement -Grit & Screenings Removal & Digester Bed Mat'I. Removal Aluminum Truck Tank, w/Pump System, Mounted to OCSD Truck Cab & Chassis Notices &Ads Construction -Installation of Ramp Between Primary Basins 1 & 2 Paper Engine Parts & Supplies Air Freight Lab Supplies Safety Supplies & Equipment Manhole Frames & Covers Travel Services Membership CPR Training & Miscellaneous Supplies Filters Temporary Employment Services Pagers, Service & Airtime Mechanical Parts & Supplies Plaques Software Maintenance & Support -@aGlance Prof. Edition Membership Telephone Service Telephone Service Cellular Telephone Service Page 1of6 EXHIBIT A Warrant No. Vendor ~~~~~~~~~~~~~~~ 52675 AT&T Wireless Services 52676 AWSI 52677 Ballantyne Temp Service 52678 Basic Chemical Solutions 52679 Battery Specialties 52680 Bush & Associates, Inc. 52681 C&H Distributions, Inc. 52682 California Auto Collision 52683 California Bank & Trust 52684 Caltrol, Inc. 52685 Carf Warren & Co. 52686 Charles P. Crowley Co. 52687 Clickguard Corporation 52688 Compressor Components Of California 52689 Consolidated Elect. Distributors, Inc. 52690 Consolidated Reprographlcs 52691 Corporate Express 52692 County of Orange -Auditor Controller 52693 CA Dept of Health Services 52694 CA Emissions Program 52695 CASA 52696 CASQA -California Stormwater Quality 52697 CGvL Engineers 52698 CMAA 52699 L.A. County Sanitation District No. 70 52700 CWEA Membership 52701 David's Tree Service 52702 Dell Direct Sales, LP. 52703 Denios, Inc. 52704 Diamond H Recognition 52705 E. Sam Jones Distributors, Inc. 52706 Ecology Control Industries 52707 Employee Benefits Specialists, Inc. 52708 Enchanter, Inc. 52709 Equapac 52710 Excel Door & Gate Company, Inc. 52711 Executive Programs Harvard University 52712 FedEx Corporation 52713 Fisher Scientific Company, L.L.C. 52714 Foodcraft Coffee & Refreshment Services 52715 Franklin Covey 52716 Fry's Electronics 52717 Full Spectrum Analytics 52718 Global Environmental Network, Inc. 52719 WW Grainger, Inc. 52720 Great Western Sanitary Supplies 52721 GU International 52722 Hach Company 52723 Harold Primrose Ice 52724 Herb's Blackforest Bakery & Dell Claims Paid From 05/01/03 to 05/15/03 Amount 3,365.92 133.00 10,440.00 10,575.49 412.47 4,642.00 370.48 833.82 7,700.00 2,249.54 300.00 483.99 316.24 8,911.50 1,402.91 975.47 418.67 1,895.71 4,415.00 13.50 15,000.00 99.00 1,382.70 55.00 3,400.00 92.00 650.00 8,510.10 726.10 1,143.05 126.07 9,956.35 634.90 3,600.00 2,131.52 17,893.00 9,500.00 259.63 6,490.81 444.92 20.41 747.60 680.81 1,375.00 499.74 703.01 979.98 67.03 74.00 34.25 Description Wireless Phone Services Department of Transportation Training Program Temporary Employment Services Sodium Blsulfite Batteries Surveying Services MO 6-25-97 4-Wheel Drum Truck/Cradle Combo Dolly Truck Repairs -V-453 Construction J-33-1 A, Retention Motor Insurance Claims Administrator Valves Printer Service Agreement Coll Cleaning & Testing Electrical Supplies Printing Services Office Supplies Maint. Agreement -Repair/Installation of Base, Handheld & Vehicle Radios Annual Fee -Environmental Laboratory Accreditation Program Vehicle Smog Testing Transmission City of Vacaville Pledge for Litigation Service Publication P1-94 Professional Services Engineering Training Registration (Construction Mgmt. Assoc. of America) Olfactometry Lab Expense Membership -Calif. Water Environment Assoc. Tree Malnt. Service (5) Computers, (5) Monitors & Hardware/Software Mechanical Parts & Supplies Employee Service Awards Electrical Supplies Hazardous Waste Disposal Reimbursed Prepaid Employee Medical & Dependent Care Ocean Monitoring MO 5-24-95 Hydrochloric Acid Roll-Up Door Removal, Replacement & Installation at Pit. 2 Dewatering Bldg. Engineering Training Registration, Kennedy School of Government Air Freight Lab Parts & Supplies Meeting Supplies Office Supplies Computer Supplies Instrument Service On-Site Training -Traffic Control Safety Course Electrical Parts & Supplies Janitorial Supplies Instrument Supplies Lab Supplies Ice For Samples Meeting Expenses Page 2 of 6 ~ EXHIBIT A Warrant No. Vendor ~~~~~~~~~~~~~~~ 52725 Hilti, Inc. 52726 The Holman Group 52727 Home Depot 52728 Hub Auto Supply 52729 City of Huntington Beach 52730 Industrial Distribution Group 52731 Information Resources 52732 Interstate Battery Systems 52733 Iron Mountain Off-Site Data Protection 52734 Irvine Ranch Water District 52735 Irvine Technology Corporation 52736 Jay's Catering 52737 Kent Fluid Power Div. of AIT 52738 Kforce Professional Staffing 52739 Lab Support 52740 Lucci's Gourmet Foods, Inc. 52741 LINJER 52742 Margate Construction, Inc. 52743 MarVac Electronics 527 44 MassMutual Michel Financial Group 527 45 McJunkin Corporation 527 46 McMaster-Carr Supply Co. 52747 Me and My EV 527 48 Medlin Controls Co. 527 49 Midway Mfg & Machining Co. 52750 Mission Uniform Service 52751 Nextel Communications 52752 Ninyo & Moore Corporate Accounting 52753 The Norco Companies 52754 NAS Associates, Inc. 52755 Office Depot Business Services Div. 52756 Orange County Wellness Coalition 52757 Orange Courier 52758 Orange Fluid System Technologies, Inc. 52759 Oxygen Service Company 52760 OCB Reprographlcs 52761 P.L. Hawn Company, Inc. 52762 SBC 52763 Pacific Mechanical Supply 52764 Pacific Parts & Controls 52765 Partners Consulting Services 52766 Paul Pitt 52767 PenValve 52768 The Perkin Elmer Corp. 52769 Pre-Paid Legal Services, Inc. 52770 Primary Source 52771 Project Partners 52772 R W Beck, Inc. 52773 R. Fox Construction, Inc. 5277 4 Red Wing Shoes Claims Paid From 05/01/03 to 05/15/03 Amount 1,387.82 865.08 164.79 394.85 27.16 552.62 500.00 1,435.91 231.75 6.69 18,100.00 1,013.54 67.13 21,380.52 4,326.39 132.63 4,582.96 20,545.00 24.79 1,345.08 1,721.48 1,240.91 5,989.74 616.42 13,525.50 5,817.91 3,543.96 427.38 170.78 1,680.55 3,433.05 45.00 12.65 1,433.13 129.30 19,095.98 1,126.53 734.63 122.87 10,705.23 15,225.00 1,822.31 377.81 245.02 478.40 11,361.86 17,384.08 1,681.16 7,764.40 168.09 Description Mechanical Parts & Supplies Employee Assistance Program Premium Misc. Repair & Maintenance Material Truck Parts Water Use Tools Human Resources Service -Background Checks Batteries Offsite Back-Up Tape Storage for NT Server Water Use Temporary Employment Services Meeting Expenses Mechanical Parts & Supplies Temporary Employment Services Temporary Employment Services Meeting Expense Professional Service -DART MO 9-22-99 Construction -Hose Racks at OAF & Secondary Clarifiers Electrical Parts & Supplies Executive Disability Plan Premium Electrical Parts & Supplies Mechanical Parts & Supplies Mechanical Parts & Supplies Instrument Supplies Pump Repairs Uniform Rentals Cellular Phones & Air Time Professlonal Services -Materials Testing MO 6-24-98 Mall Delivery Service Lab Services Office Supplies Human Resources Meeting Registration Courier Services Mechanical Parts & Supplies Specialty Gases · Printing Service -MO 1/26/00 Electrical Supplies Telephone Services Plumbing Supplies Computer Hardware/Software FIS On-Site Support -One World XE Migration Project Prof. Services -Ramp for Pit. 1 Secondary Treatment Activated Sludge Facility Mechanical Parts & Supplies Lab Parts & Supplies Employee Legal Service Insurance Premium Office Furniture Temporary Employment Services Professional Services P1-90 Construction -Modifications to Pit. 2 Hydrogen Peroxide Facilities Reimbursable Safety Shoes Page 3of6 EXHIBIT A Warrant No. Vendor ~~~~~~~~~~~~~~~ 52775 RemedyTemp, Inc. 52776 Retrofit Parts & Components, Inc. 52777 RPM Electric Motors 52778 RSA Sutter Soil Products 52779 Safety-Kleen 52780 Sancon Engineering, Inc. 52781 Science Applications Intl., Corp. 52782 Seavisual Consulting, Inc. 52783 Shureluck Sales & Engineering 52784 Smardan Supply Company/Orange Coast 52785 Smith Pipe & Supply 52786 Smith-Emery Company 52787 Southern califomia Water 52788 Voided Check 52789 Strategic Diagnostics, Inc. 52790 Sunset Ford 52791 Sunset Industrial Parts 52792 SPEC Services, Inc. 52793 Tashiro Choi & Associates 52794 Team Scopellite Co. 52795 Teksystems 52796 Teletrac, Inc. 52797 Terminix International Co. 52798 Thomas Gray & Assoc. 52799 Thompson Industrial Supply, Inc. 52800 ThyssenKrupp Elevator 52801 Time Warner Communication 52802 Times Community News 52803 Tony's Lock & Safe Service & Sales 52804 The Trane Company 52805 Tropical Plaza Nursery, Inc. 52806 Truck & Auto Supply, Inc. 52807 Truesdail Laboratories, Inc. 52808 US Filter Corporation 52809 U.S. Metro Group, Inc. 52810 Undersea Graphics, Inc. 52811 United Parcel Service 52812 UC Regents 52813 US Equipment Co., Inc. 52814 Vallen Safety Supply Company 52815 The Vantage Group, L.L.C. 52816 Vapex, Inc. 52817 Varian, Inc. 52818 Verizon California 52819 Villa Ford 52820 VWR Scientific Products Corporation 52821 The Wall Street Journal 52822 Water 3 Engineering, Inc. 52823 Waxle Sanitary Supply 52824 WEF -Registration Dept. Claims Paid From 05/01/03 to 05/15/03 Amount 567.58 288.00 5,089.42 1,430.00 470.79 2,102.50 2,250.51 8,415.00 130.92 25.25 464.62 2,018.50 73.13 647.96 59.74 40.06 18,038.56 50.00 4,816.00 18,914.00 245.00 1,320.00 180.00 6,875.02 1,280.00 40.47 250.00 17.82 386.89 10,844.52 775.15 50.00 215.00 24,785.00 10,000.00 1,124.07 590.00 2,061.90 4,100.00 12,120.00 6,575.00 73.60 3,631.42 17,504.26 1,212.26 171.32 21,434.51 292.65 595.00 Description Temporary Employment Services Mechanical Parts & Supplies Motor & Sump Pump Repairs Soil Materials Chemical Cleaners Pumping Service on Air Jumpers Meter Mooring Professional Services -Ocean Outfall Instrumentation Mechanical Parts & Supplies Plumbing Supplies Plumbing Supplies Professional Services P1-37 & J-90 Water Use Lab Equipment Power Supply Repairs Automotive Parts & Supplies Mechanical Supplies Engineering Services J-33-1 Translation Into Spanish & Proofreading of "Don't Be A Sewer Blocker'' Construction -Pit. 2 OOBS Shower Rehabilitation Temporary Employment Service Monthly Air-Time Service Fee & Software/Hardware Maint. For Vehicle Tracking Sys. Pest Control Lab Supplies & Analysis Mechanical Supplies Elevator Maintenance Cable Services Notices &Ads Locks & Keys Computer Hardware/Software Contract Groundskeeping MO 5-11-94 Automotive Supplies Lab Services Service Agreement -Lab Purification System Janitorial & Floor Maintenance at Plants 1 & 2 Contract Service -Outfall Inspection Parcel Services Human Resources Training Registration Filters, 011 & Coolant Employee Safety Glasses Temporary Employment Service Maintenance/Calibration/Certification of Odor Control Instrumentation Lab Supplies Telephone Services (1) 2003 F-150 Extended Pick-Up Truck Lab Parts & Supplies Subscription Engineering Service J-67 Janitorial Supplies 0 & M Meeting Registration Page4 of6 I{ EXHIBIT A Claims Paid From 05/01/03 to 05/15/03 WarrantNo. _v_e_n_d_or ________________________ ~ ____ Am ___ o_un_t,__ __ 52825 WEF 402.00 52826 WEFTEC 595.00 52827 Xerox Corporation 10,446.34 52828 Gary L. Aguirre 180.00 52829 Blake Anderson 112.00 52830 Karen I. Baroldi 104.16 52831 George A. Charette 102.68 52832 Mark H. Kawamoto 342.15 52833 Cynthia A. O'Neil 120.99 52834 Gary A. Pons 415.00 52835 Warren L. Stemln 1, 120.01 52836 Sonja A. Wassgren 559.39 52837 Orange County Sanitation District 1, 750.12 52838 CSMFO 120.00 52839 UC Regents 395.00 52840 Blue Cross of California 273,847.93 52841 Orange County Sanitation District 546,050.58 52842 Airgas Safety 737.81 52843 ARMA International, Inc. 190.00 52844 American Telephone & Telegraph Corp. 85.84 52845 Court Order 626.20 52846 Caltrol, Inc. 5, 193.55 52847 Court Order 150.00 52848 Consolidated Elect. Distributors, Inc. 156.24 52849 Consumers Pipe & Supply Co. 976.56 52850 Cortech Engineering 2,075.42 52851 Court Trustee 69.12 52852 CWEA 339.25 52853 CWEA Specialty Conference 150.00 52854 E. Sam Jones Distributors, Inc. 344.09 52855 Edinger Medical Group, Inc. 760.00 52856 Employee Benefits Specialists, Inc. 7,983.20 52857 Court Order 525.00 52858 Fisher Scientific Company, L.L.C. 416.30 52859 Forestry Suppliers 191.03 52860 Fortis Benefits Insurance Company 21,047.43 52861 Franchise Tax Board 411.68 52862 George T. Hall 1,816.87 52863 Hydraulic Institute 235.00 52864 Industrial Distribution Group 791.99 52865 Internal Revenue Service 325.00 52866 Intl. Union of Oper. Eng AFL-CIO Local 501 3,280.14 52867 Kristen Cummings, Leg. Assistant 725.19 52868 Management Technologies 475.00 52869 McMaster-Carr Supply Co. 1,062.40 52870 National Bond & Trust 2,243.05 52871 National Water Research Institute 17,500.00 52872 NetVersant of Southern Callfomla 1,267.60 52873 Ocean View School District 53.00 52874 OneSource Distributors, Inc. 54.20 Description Membership -Water Environment Federation 0 & M Meeting Registration Fax & Copier Leases MeetingfTralnlng Expense Reimbursement MeetingfTralnlng Expense Reimbursement MeetlngfTralnlng Expense Reimbursement MeetingfTrainlng Expense Reimbursement MeetingfTralnlng Expense Reimbursement MeetingfTralnlng Expense Reimbursement MeetingfTralnlng Expense Reimbursement MeetingfTrainlng Expense Reimbursement MeetingfTraining Expense Reimbursement Petty Cash Reimb. Accounting Training Registration Human Resources Training Registration Medical Insurance Premium Payroll EFT Reimbursement Safety Supplies Membership Telephone Service Wage Garnishment Valve Wage Garnishment Electrical Supplies Plumbing Supplies Pump Wage Garnishment Publication Air Quality Meeting Registration Electrical Supplies Medical Screening Reimbursed Prepaid Employee Medical & Dependent Care Wage Garnishment Lab Supplies Compost Thermometers Long-Term & Short-Term Disability Ins. Premium Wage Garnishment Pressure Transmitter Publication Mechanical Parts & Supplies Wage Garnishment Dues Deduction Legislative Advocate -April 14th OCSD Tour Renewal of NPDES Ocean Discharge Permit Lab & Mechanical Supplies & Tools U.S. Savings Bonds Payroll Deductions Professional Services -Prop 13 Water Softener Pilot Program Security System Maintenance Meeting Expense -Use of Meeting Facilities for Neighborhood Meeting Electrical Parts & Supplies Page 5of6 EXHIBIT A Warrant No. Vendor ~~~~~~~~~~~~~~~ 52875 Orange Fluid System Technologies. Inc. 52876 OCDM Marketing 52877 OCEA 52878 Pacific Bell/WorldCom 52879 Court Order 52880 Parts Unlimited 52881 Court Order 52882 Peace Officers Council of CA 52883 Permaseal 52884 Ryan Herco Products Corp. 52885 Court Order 52886 So. Cal. Gas Company 52887 Southern California Edison 52888 Summit Steel 52889 SBC 52890 Thompson Industrial Supply, Inc. 52891 Tuthill Energy Systems. c/o Mckenna 52892 United Way 52893 Verizon California 52894 VWR Scientific Products Corporation 52895 The Wall Street Journal 52896 WEF 52897 WEFTEC 52898 County of Orange -Auditor Controller 52899 Nicholas J. Arhontes 52900 Jennifer M. Cabral 52901 Philip F. Cordova 52902 Steven R. DeWllde 52903 Larry Gibson 52904 Denise M. Martinez 52905 Yvonne L. Schwab 52906 Jean E. Tappan 52907 Steven M. Thornburg 52908 County of Orange -Auditor Controller Total Accounts Payable ·Warrants Pavroll Disbursements 29861 -29861 Interim Paycheck 29862 -29984 Employee Paychecks 85048 -85538 Direct Deposit Statements Total Payroll Disbursements Wire Transfer Pavments Chase Bank of Texas. National Association Chase Bank of Texas. National Association Chase Manhattan Bank Lloyds TSB Bank pie Total Wire Transfer Payments Total Claims Paid 05/01/03 • 05/15/03 Claims Paid From 05/01/03 to 05/15/03 Amount 1,576.58 652.25 524.61 15.98 40.00 401.02 296.00 1,485.00 396.52 703.08 721.50 16,588.55 8,563.60 4,146.97 26.11 2,433.19 206.04 305.00 6,446.60 496.57 203.65 401.00 250.00 810.00 329.99 164.48 250.00 132.00 324.00 235.00 453.00 179.30 250.00 600.00 $ 7,724,113.37 $ $ $ $ $ 1,549.73 161,439.65 836.065.98 999.055.36 40,428.91 122,294.38 73,110.82 74,207.04 310,041.15 9,033.209.88 Description Mechanical Parts & Supplies Processing Fees -Public Notice Malling & Postage Dues Deduction Telephone Service Wage Garnishment Truck Supplies Wage Garnishment Dues Deduction Lube Compound Plumbing Supplies Wage Garnishment Natural Gas Power Metal Telephone Services Mechanical Parts & Supplies Steam Turbine Oil Filters & Covers Employee Contributions Telephone Services Lab Supplies SubscripUon Membership -Water Environment Federation Compliance Meeting Registration Sewer Service Fee Administration Meeting/Training Expense Reimbursement Meeting!Tralnlng Expense Reimbursement Meeting/Training Expense Reimbursement Meeting!Tralnlng Expense Reimbursement Meeting!Tralnlng Expense Reimbursement Meeting/Training Expense Reimbursement Meetlng!Tralnlng Expense Reimbursement Meeting!Tralnlng Expense Reimbursement Meeting!Tralning Expense Reimbursement Sewer Service Fee Administration Termination Paycheck Biweekly Payroll 05/14/03 Biweekly Payroll 05/14/03 April Interest Payment on 1993 Certificates of Participation Societe Generate April Swap Payment on 1993 Certificates of Participation Commitment Fee on Series 2000 Certificates of Participation (211-4/30/03) Letter of Credit Fee for 1992 Refunding COPs (2/1-5/1/03) Page 6of 6 ~ EXHIBIT A Claims Paid From 05/16/03 to 05/31/03 Warrant No. Vendor ~~~~~~~~~~~~~~~ Accounts Payable • Warrants 52909 Applied Ocean Sciences 52910 Ballantyne, Inc. 52911 Brown & Caldwell 52912 CH2MHill 52913 IPMC c/o Parsons 52914 Jamison Engineering Contractors, Inc. 52915 Kemiron Pacific, Inc. 52916 Kforce Professional Staffing 52917 Lee & Ro, Inc. 52918 Malcolm Pirnie, Inc. 52919 Orange County Water District 52920 Pacific Investment Management Co. 52921 Painewebber Incorporated 52922 Pioneer Americas, Inc. 52923 Pixelpushers, Inc. 52924 Voided Check 52925 Tule Ranch 52926 U.S. Peroxide 52927 Water Environment Federation 52928 Parsons Engineering Science, Inc. 52929 Steve P Rados, Inc. 52930 Union Bank of California 52931 Advance Business Graphics 52932 Agilent Technologies, Inc. 52933 Air & Waste Management Assoc. 52934 Airborne Express 52935 Airco Filter Service 52936 Airgas -West 52937 Airgas Safety, Inc. 52938 Alfa-Laval, Inc. 52939 Alhambra Foundry Co., Ltd. 52940 AliMed, Inc. 52941 Allied Packing & Rubber, Inc. 52942 American Express 52943 American Seal & Packing 52944 Appleone Employment Service 52945 Aquarium Doctor 52946 Aquatic Bioassay And Consulting Labs, Inc. 52947 Arch Wireless 52948 Auto Shop Equipment Co., Inc. 52949 AT & T Wireless Services -Airtime 52950 AT&T Wireless Services 52951 AWSI 52952 BakerTanks 52953 Bar Tech Telecom, Incorporated 52954 Battery Specialties 52955 Bell Pipe & Supply Co. $ Amount 31,176.46 30,372.00 145,111.94 135,645.84 525,499.00 33,478.22 214,543.86 28,933.42 74,718.59 53,104.08 59,112.98 144,878.00 31,409.06 127,591.48 27,998.50 111,497.11 191,492.08 30,000.00 130,428.48 544,861.80 60,540.20 149.99 1,292.69 900.00 331.25 477.79 624.95 1,248.72 1,338.30 1,975.06 101.87 73.58 23,744.52 491.09 4,442.64 97.90 7,000.00 3,556.25 450.00 64.64 129.87 343.00 5,762.89 3,330.26 251.53 233.49 Description Professional Services J-85 Temporary Employment Services Engineering Services 2-41, CMOM/WDR Program & Outfall Sonic Flow Meter Eval. Professional Services J-40-7 Professional Services -Program Project Management Construction -Roof Replacement, STOOBR Pumps, Gas Flaps Installation Ferric Chloride MO 9-27-95 Temporary Employment Services Professional Services 5-49, 5-50, 5-51 & 5-52 Professional Services J-79 GAP Water Use MO 10-23-96 Investment Management Service Res. 95-97 COP Remarketing Agreement Sodium Hypochlorite Internet Site Redesign, On-Line Technical Sepe. & Scope of Work Library Residuals Removal MO 3-29-95 Hydrogen Peroxide Professional Services -Biosolids Audit Engineering Services J-42 Construction 1-2-4 Construction 1-2-4, Retention Stationery & Office Supplies Lab Parts & Supplies Air Quality Meeting Registration Air Freight Filters Lab Parts & Supplies Safety Supplies & Tools Electrical Parts & Supplies Manhole Frames & Covers Computer Supplies Mechanical Parts & Supplies Purchasing Card Program, Misc. Supplies & Services Injectable Packing Material Temporary Employment Services Human Resources Aquarium Service Whole Effluent Toxicity Testing Pagers, Service & Airtime ( 1) Above Ground Auto Lift Cellular Telephone Service Wireless Phone Services Department of Transportation Training Program Tank Rentals Telephone Equipment Refurbishment Batteries Piping Supplies Page 1of9 EXHIBITS Claims Paid From 05/16/03 to 05/31/03 Warrant No. Vendor ~~~~~~~~~~~~~~~ 52956 Bernstein Communications 52957 BioMerieux Vitek, Inc. 52958 Boyte Engineering Corporation 52959 Bush & Associates, Inc. 52960 BC Wire Rope & Rigging 52961 Cal State University of Fullerton 52962 California Auto Collision 52963 California Relocation Services, Inc. 52964 Caltrol, Inc. 52965 Cambridge Isotope Labs 52966 Cameron Welding Supply 52967 Capital Appraisal Service 52968 C.R. Nelson P.E. 52969 Carollo Engineers 52970 Cathcart Garcia von Langen Engineers 52971 Center for Creative Growth 52972 Chapman House, Inc. 52973 City of Yorba Linda 5297 4 Clean Street 52975 Cllckguard Corp. 52976 Cole-Parmer Instrument Co. 52977 Commercial Roof Management, Inc. 52978 Communications Performance Group, Inc. 52979 Communications Supply Corp. 52980 Compressor Components Of California 52981 Computer Protection Technology, Inc. 52982 Con-Way Western Express 52983 Consolidated Elect. Distributors, Inc. 52984 Construction Engineering Services 52985 Consumers Pipe & Supply Co. 52986 Contemporary Controls 52987 Cooper Cameron Corporation 52988 Cooper Energy Systems 52989 Corporate Express Imaging 52990 Corporate Express 52991 Cortech Engineering 52992 Cost Containment Solutions 52993 Counterpart Enterprises, Inc. 52994 County of Orange -Auditor Controller 52995 County Wholesale Electric Co. 52996 Crane Veyor Corp. 52997 Culligan of Orange County 52998 Cytec Industries 52999 CA Emissions Program 53000 Ciba Specialty Chemicals Corporation 53001 Dapper Tire Co. 53002 David Kirby Company 53003 David's Tree Service Amount 54.00 1,030.50 13,734.99 2,346.00 207.35 15.00 3,193.92 135.00 785.60 1,769.19 298.12 95.00 1,700.00 4,967.00 6,639.32 2,000.00 550.00 125.00 600.00 379.70 2,426.15 1,950.00 23,053.18 84.03 3,237.00 11,455.28 1,160.06 3,921.94 5,000.00 644.68 1,297.22 29.52 12,692.03 2.402.09 4,653.49 10,354.66 2,590.20 2,806.26 87.50 599.71 1,961.32 37.50 7,431.15 24.60 10,262.11 213.12 685.00 6,100.00 Description Publication Lab Supplies Engineering Services 1-2-4 Surveying Services MO 6-25-97 Mechanical Parts, Supplies & Service Publication Vehicle Repairs -V-510 Office Moving Services Electrical Parts & Supplies Lab Parts & Supplies Welding Supplies Vehicle Accident Claim Appraisal Service Engineering Consultant 2-41 Professional Services -RAS Pumping Study Engineering Services P2-82 Professional Services -O & M Management Coaching Team Building Training Software Meeting Room Expense -Public Outreach Re Contract 2-41 Plant 2 Street Sweeping Services Printer Service Agreement Instrument Parts & Supplies Roof Repairs Professional Services -Hazardous Energy Control Project Electrical Parts & Supplies Coil Cleaning & Testing Computer Maintenance Freight Electrical Supplies Software Upgrade -Expedition Plumbing Supplies Instrument Parts & Supplies Mechanical Parts & Supplies Engine Repairs & Maintenance Computer Supplies Office Supplies Pumps Worker's Comp. Services Mechanical Parts & Supplies Encroachment Permit Electrical Parts & Supplies Crane Repairs Maint. Agreement -Cen Gen Water Softener System Anionic Polymer Spec. No. 9798-18 Vehicle Smog Testing Transmission Cationic Polymer Truck Tires Replace Magnetic Strips on Cabinets Tree Maint. Service Page2of9 "' •• EXHIBIT B Claims Paid From 05/16/03 to 05/31/03 Warrant No. _v_e_nd_o_r _________________________ -~-Am~o_u_n_t~- 53004 Del Mar Analytical 5,030.00 53005 Dell Direct Sales, L.P. 11,722.78 53006 Department of Consumer Affairs 160.00 53007 Dept. of Fish and Game 94.50 53008 Dunn-Edwards Corporation 375.50 53009 E. Sam Jones Distributors, Inc. 156.95 53010 Ecology Control Industries 2,376.89 53011 Electra-Bond, Inc. 2,343.57 53012 Elliott Bay Design Group 89.35 53013 Employee Benefits Specialists, Inc. 712.25 53014 Enchanter, Inc. 3,600.00 53015 Environmental & Occupational Risk Mgmt 2,459.17 53016 Environmental Sampling Supply, Inc. 242.52 53017 Environmental Science Assoc. 8,290.98 53018 Ewing Irrigation Industrial 829.96 53019 ENRG 42.40 53020 ENS Resources, Inc. 15,000.00 53021 EQ Laboratories Inc. 468.00 53022 FedEx Corporation 251.89 53023 Ferguson Valve Actuation 261.81 53024 FileNET Corporation 2,600.00 53025 First American Real Estate Solutions 647.50 53026 Fisher Scientific Company, L.L.C. 4,611.18 53027 Flat and Vertical, Inc. 540.00 53028 Flo -Systems, Inc. 8, 106.81 53029 Foodcraft Coffee & Refreshment Services 308.26 53030 Forensic Analytical 30.00 53031 Fountain Valley Camera 15.46 53032 Franklin Covey 13.19 53033 Fry's Electronics 478.30 53034 Full Spectrum Analytics 832.00 53035 Ganahl Lumber Company 1, 785.4 7 53036 Garratt-Callahan Company 1,497 .13 53037 George Yardley Co. 215.59 53038 Gerhardt's, Inc. 2,211.03 53039 Golden State Controls 1, 113.44 53040 Government Institutes, Inc. 97 .59 53041 WW Grainger, Inc. 251.66 53042 Graybar Electric Company 14.01 53043 Graybar Electric Company 30.09 53044 Great Western Sanitary Supplies 106.03 53045 Hach c/o Ponton Industries 7 ,269.89 53046 Harold Primrose Ice 55.50 5304 7 Harrington Industrial Plastics, Inc. 422.41 53048 Hasler, Inc. 232.74 53049 Hatch & Kirk, Inc. 3,235.56 53050 Henry Company -Sealants Division 159.09 53051 Herman Miller Workplace Resource 1,781.96 Description Analysis of Biosolids and Wastewater (8) Monitors Membership Membership Paint Supplies Electrical Supplies Hazardous Waste Disposal Powder Coating of (1) Tank Naval Architecture Marine Engineering Services Reimbursed Employee Medical & Dependent Care Ocean Monitoring and Outfall Inspection & Maintenance Lab Parts & Supplies Lab Parts & Supplies Professional Services J-40-5 Plumbing Parts & Supplies Pit. 1 Natural Gas Station Maintenance Professional Services -Legislative Advocate Lab Parts & Supplies Air Freight Mechanical Parts & Supplies Engineering Training Registration Orange County Property Information Lab Supplies Concrete Cutting Pump Parts & Supplies Meeting Supplies Asbestos Analysis & Microscopy Services Photo Supplies Office Supplies Computer Supplies Vacuum Pump Repairs Lumber/Hardware Chemicals Plumbing Supplies Mechanical Parts & Supplies Electrical Parts & Supplies Publication Electrical Parts & Supplies Electrical Supplies Mechanical Parts & Supplies Janitorial Supplies Lab Parts & Supplies Ice For Samples Mechanical Parts & Supplies Meter Rental Charges & Misc. Supplies -lntellitouch System Complete Mail System Engine Generator Control Supplies Sealant Electrical Supplies "'· Page3 of9 EXHIBITS Warrant No. Vendor ~~~~~~~~~~~~~~~ 53052 Hill Brothers 53053 Hilti, Inc. 53054 Home Depot 53055 Hopkins Technical Products 53056 Hub Auto Supply 53057 Hydrotex 53058 Industrial Distribution Group 53059 Industrial Threaded Products, Inc. 53060 Information Resources 53061 IBM Corporation 53062 Interstate Battery Systems 53063 Ionics Instrument Business Group 53064 Irvine Technology Corporation 53065 lsco, Inc. 53066 ISi, Inc. 53067 J & J Machinery Moving, Inc. 53068 J.G. Tucker and Son, Inc. 53069 Jake's Collision 53070 Jay's Catering 53071 CSC Parts Sales/Johnson Controls, Inc. 53072 Johnstone Supply 53073 K P Concepts 5307 4 Katmar Promotions 53075 Keith S. Richman, Assemblyman 53076 Konnie K. Gallery 53077 KW Communications Consulting 53078 L & N Uniform Supply Co. 53079 Lab Safety Supply, Inc. 53080 Lab Support 53081 Law/Crandall 53082 Lexis-Nexis 53083 Lifecom-Safety, Inc. 53084 London Bridge Trading Co., Ltd. 53085 Lucci's Gourmet Foods, Inc. 53086 Lustre-Cal 53087 LINJER 53088 M. J. Schiff & Associates, Inc. 53089 Manatt, Phelps & Phillips, L.L.P. 53090 Mandie Motors 53091 McKenna Engineering & Equipment Co., Inc. 53092 McMaster-Carr Supply Co. 53093 McRay Industries, Inc. 53094 Mechanical Seal Repair, Inc. 53095 Medlin Controls Co. 53096 Midway Mfg & Machining Co. 53097 Mission Abrasive & Janitorial Supplies 53098 Mission Uniform Service 53099 Montgomery Watson Claims Paid From 05/16/03 to 05/31/03 Amount 10,899.15 512.90 912.77 314.64 373.91 1,002.41 19,338.81 76.42 615.00 8,143.91 1,446.76 837.10 19,364.00 775.80 2,613.00 3,600.00 2,274.06 2,377.40 739.89 715.94 416.92 1,338.20 1,369.43 204.00 160.01 2,925.25 1,586.05 114.42 2,453.69 4,867.50 29.34 604.63 2,404.16 193.50 387.90 4,577.37 992.00 5,000.00 105.00 277.00 1,472.64 8,224.16 123.91 429.34 18,628.44 124.56 6,356.44 2,330.00 Description Chemicals -Odor & Corrosion Control -Newport Trunkline Mechanical Supplies Misc. Repair & Maintenance Material Mechanical Parts & Supplies Truck Parts Lube Oil Tools, Paint, Locks & Mechanical Parts & Supplies Mechanical Parts & Supplies Human Resources Service -Background Checks Maintenance Agreement AS-400 Batteries Lab Parts & Supplies Temporary Employment Services Lab Parts & Supplies Service Agreement -Communication Equipment Auger Moving Service Instrument Parts & Supplies Vehicle Repairs -V-404 Meeting Expenses Mechanical Parts & Supplies Electrical Supplies Graphic Supplies Graphic Supplies Legislative Advocacy Expense Frames Community Outreach Re Bushard Trunkline Repl. Proj. & Warner Ave. Relief Sewer (100) 0 & M Baseball Caps with District Logo Lab Parts & Supplies Temporary Employment Services Professional Services -Soil Testing P-182 Books & Publications Safety Supplies Professional Services -Comprehensive Noise Survey at Pits. 1 & 2 Meeting Expense OCSD Electrical Shop Property Tags Professional Service -DART MO 9-22-99 Professional Services -Corrosion Study Strategic Planning & Advocacy Towing Services Filters Mechanical Parts & Supplies Mechanical Parts & Supplies Mechanical Parts & Supplies Instrument Supplies Mechanical Parts, Supplies & Repairs Janitorial Supplies Uniform Rentals Professional Services -Emission Modeling & Analysis Page4of9 EXHIBITS Warrant No. Vendor ~~~~~~~~~~~~~~~ 53100 Morton Salt 53101 MAACO Auto Painting & Bodyworks 53102 MOS Consulting 53103 NetVersant of Southern California 53104 New Hermes, Inc. 53105 New Pig 53106 Newark Electronics 53107 Nickey Petroleum Co., Inc. 53108 Ninyo & Moore Corporate Accounting 53109 Nu-Way Laser Engraving 5311 O NCG Porter Novelli, Inc. 53111 NRG Energy, Inc. 53112 0. C. Windustrial Co. 53113 Office Depot Business Services Div. 53114 OneSource Distributors, Inc. 53115 Operation Technology, Inc. 53116 Orange Fluid System Technologies, Inc. 53117 Oxygen Service Company 53118 OCB Reprographics 53119 01 Analytical 53120 P.L. Hawn Company, Inc. 53121 Pace Analytic Services 53122 Pacific Computer Expansions, Inc. 53123 Pacific Marine & Industrial 53124 Pacific Mechanical Supply 53125 Pacific Process Equipment, Inc. 53126 Parker Hannifin Corporation 53127 Parkhouse Tire Co. 53128 Parsons Engineering Science, Inc. 53129 Partners Consulting Services 53130 Parts Unlimited 53131 The Perkin Elmer Corp. 53132 Power Electro Supply Co., Inc. 53133 Power Lift Corporation 53134 Primary Source 53135 Profit Techniques, Inc. 53136 Projects Partners 53137 PCG Industries 53138 PCl-WEDECO Environmental Technologies 53139 PCS Express 53140 PFE International, Inc. 53141 R W Beck, Inc. 53142 Rainbow Disposal Co. 53143 Rainin Instrument Co., Inc. 53144 Regents of Univ. of California 53145 RemedyTemp, Inc. 53146 Retrofit Parts & Components, Inc. 53147 Ricoh Business System Claims Paid From 05/16/03 to 05/31/03 Amount 778.98 869.97 8,283.60 1,968.19 824.61 551.72 331.38 6,071.91 442.68 111.45 21,406.25 6,659.62 5,977.94 3,464.76 169.18 1,890.00 3,148.93 2,855.07 5,750.24 105.13 2,047.21 1,300.00 3,838.06 569.52 2,764.41 975.73 499.21 1,647.18 1,528.00 14,100.00 135.39 102.79 304.45 1,727.23 11,653.63 2,500.00 13,066.19 875.00 1,081.90 110.00 930.96 1,845.42 2,126.12 499.70 20,425.52 833.40 830.06 1,623.90 Description Salt Vehicle Painting Prof. Services -Surveying Various Capital Projects Security System Maintenance Mechanical Supplies Spill Absorbent Materials Electrical Parts & Supplies Oil & Grease and Pump Out Unleaded Fuel Tank Professional Services -Materials Testing MO 6-24-98 Steel Tags Professional Services -Biosolids Outreach Program Rocker Exhaust Mechanical Parts & Supplies Office Supplies Electrical Parts & Supplies Engineering Training Registration Mechanical Parts & Supplies Specialty Gases Printing Service -MO 1/26/00 Lab Supplies Electrical Supplies Lab Analyses Software Mechanical Parts & Supplies Mechanical Parts & Supplies Mechanical Parts & Supplies Filters Tires Engineering Services J-42 FIS On-Site Support -One World XE Migration Project Truck Supplies Lab Parts & Supplies Electrical Supplies (1) Fork Mounted Ridged Boom Office Furniture Professional Services-Division 820 Team Building Services Temporary Employment Services Refurbish Shaft Seal Areas for High Rate Mix Pump Repair & Calibrate Ozone Scrubber Courier Service Service for lntellitouch System -Computer Mail Center & Software Professional Services P1-90 Trash Removal Lab Parts & Supplies Professional Services J-85 Temporary Employment Services Mechanical Parts & Supplies Lease of Color Copier, Maintenance & Service Page 5of9 EXHIBIT B Warrant No. Vendor ~~~~~~~~~~~~~~~ 53148 Rios, Eddie 53149 Roto Rooter -N.O.C.#11 53150 Ryan Herco Products Corp. 53151 RBF Engineers 53152 RPM Electric Motors 53153 Schwing America, Inc. 53154 Science Applications Intl., Corp. 53155 Sears, Theresa 53156 Seavisual Consulting, Inc. 53157 Sencore Electronics 53158 Shureluck Sales & Engineering 53159 Siemens Milltronics Process 53160 Sigma-Aldrich, Inc. 53161 Skalar, Inc. 53162 Smith-Emery Company 53163 Snap On Industrial 53164 SoftChoice 53165 Southern California Edison 53166 Southern California SETAC 53167 Southwest Air Balance Corp. 53168 Sparkletts 53169 Spectrum Video, Inc. 53170 Spex Certiprep, Inc. 53171 State Water Resources Control Board 53172 Steven Enterprises, Inc. 53173 Strata International, Inc. 53174 Summit Steel 53175 Sunset Ford 53176 Sunset Industrial Parts 53177 Surveyor Services 53178 Sy Nielson Service, Inc. 53179 Symcas-TSG 53180 Systems Source, Inc. 53181 Systime Computer Corp 53182 SPX Valves & Control 53183 T & C Industrial Controls, Inc. 53184 Team Scopellite Co. 53185 Teksystems 53186 Terminix International Co. 53187 The Library Store, Inc. 53188 The Orange County Register 53189 Thermal Finned Tube Processors, Inc. 53190 Thermo Elemental 53191 Thomas Gray & Assoc. 53192 Thomas V. Gerllnger 53193 Thompson Industrial Supply, Inc. 53194 Tierra Tractor 53195 Tiferina, Albert Claims Paid From 05/16/03 to 05/31/03 Amount 1,229.92 194.75 172.40 18,629.10 1,037.33 27.51 22,284.52 427.42 7,155.00 397.32 1,188.08 1,131.38 300.22 75.30 1,208.50 299.59 9,695.57 90.70 50.00 2,380.00 1,634.91 2,084.48 3,338.16 700.00 1,833.80 505.46 1,553.03 104.61 3,024.79 195.51 125.00 1,384.18 11,354.70 14,909.00 255.96 897.56 3,044.00 14,337.00 175.00 22.35 1,740.54 2,957.00 13,956.86 330.00 3,415.00 224.47 7,600.00 166.51 Description User Fee Refund Re Septic Tanks Spray Booth Repairs Lab Parts & Supplies Professional Services 2-24-1 & 5-49 Motor Repairs Pump Supplies Ocean Monitoring & Meter Mooring & P1-79 User Fee Refund Re Septic Tanks Professional Services -Ocean Outfall Instrumentation Instrument Repair & Calibration Service Mechanical Parts & Supplies Instrument Parts & Supplies Lab Parts & Supplies Lab Supplies Soil Testing MO 7-13-94 Tools (1) Computer -HP Designjet Power Compliance Meeting Registration Air Testing Primary Scrubbers Drinking Water/Cooler Rentals Professional Services -Board Room Audio Visual Design, Hardware & Equipment Lab Parts & Supplies Storm Water Permit Stationery & Office Supplies Chemicals Metal Automotive Parts & Service Mechanical Parts & Supplies Stationery & Office Supplies Lab Calibration Service SCADA System VAX Service Agreement (22) Office Chairs Professional Services -J D Edwards One World XE Implementation Mechanical Parts & Supplies Electrical Supplies Construction -OOBS Shower Rehabilitation Temporary Employment Services Pest Control Lab Parts & Supplies Notices&Ads Heat Exchanger Rebuild & Testing Ins. Parts & Supplies Leak Test Analysis Lab Analyses Mechanical Supplies Weed Abatement User Fee Refund Re Septic Tanks Page 6of 9 ' EXHIBIT B Warrant No. Vendor ~~~~~~~~~~~~~~~~ 53196 Todd Painting, Inc. 53197 Townsend Public Affairs 53198 Southern California Trane Service 53199 Tri-State Seminar On-the-River 53200 Tropical Plaza Nursery, Inc. 53201 Truck & Auto Supply, Inc. 53202 Turblex, Inc. 53203 Tyco Valves & Controls, LP. 53204 US Filter Corporation 53205 U. S. Geological Survey 53206 Ultra Scientific 53207 United Parcel Service 53208 United States Treasury 53209 Uriarte, Frank or Tillean 53210 UC Regents 53211 US Equipment Co., Inc. 53212 The Vantage Group, L.L.C. 53213 Vapex, Inc. 53214 Varian Associates, Inc. 53215 VWR Scientific Products Corporation 53216 The Wackenhut Corporation 53217 Waco Filter 53218 Wally Machinery and Tool Supply, Inc. 53219 Water Systems Cleaning Co. 53220 WateReuse Association 53221 Waxie Sanitary Supply 53222 West Coast Safety Supply Co. 53223 Wilson Supply, Inc. 53224 Watson Wyatt Data Services 53225 WEF 53226 Xerox Corporation 53227 XESystems, Inc. 53228 Zee Medical 53229 Unity Constructors 53230 Gerardo Amezcua 53231 Catherine M. Biele 53232 Kimberly C. Christensen 53233 Deirdre E. Hunter 53234 Chandra R. Johannessen 53235 Vladimir A. Kogan 53236 Charles D. McGee 53237 Peter M. Morrison 53238 William F. Pierce 53239 Antonino Pira 53240 George L. Robertson 53241 John W. Swindler 53242 Mahin Talebi 53243 Michael Vuong Claims Paid From 05/16/03 to 05/31/03 Amount 8,975.93 5,000.00 350.18 180.00 7,029.67 237.93 13,245.76 560.96 1,159.00 500.00 233.65 2,788.81 1,260.01 1,408.71 10,000.00 54.38 23,572.00 2,892.00 1,560.98 8,169.89 19,161.59 3,566.83 900.46 2,995.00 600.00 286.79 778.98 446.21 399.00 170.00 4,945.38 1,934.12 1,014.38 23,084.00 114.79 128.44 548.97 144.34 957.53 257.00 536.97 541.61 199.71 1,557.63 713.43 155.13 1,091.66 117.79 Description Painting Services -Bldg. 6 Legislative & Executive Advocate -Grant Funding Electrical Parts & Supplies O & M Meeting Registration Contract Groundskeeping MO 5-11-94 Automotive Parts & Supplies Failure Analysis of Aeration Blowers Valves Service Agreement -Lab Purification System Professional Services -Disinfection Project Current Meter Lab Parts & Supplies Parcel Services Professional Services J-85 -Naval Post Graduate School User Fee Refund Re Septic Tanks Professional Services -Plume Modeling Mechanical Parts & Supplies Temporary Employment Service Instrument Parts & Supplies Lab Parts & Supplies Lab Parts & Supplies Security Guards Mechanical Parts & Supplies Mechanical Parts & Supplies Scrubber Maintenance & Cleaning Service Source Control Meeting Registration Janitorial Supplies Mechanical Parts, Supplies & Tools Mechanical Parts & Supplies Publication Membership (Water Environment Federation) Fax & Copier Leases and Stationery & Office Supplies Computer Hardware/Software Safety Supplies Construction 7·14-4 Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement MeetingfTraining Expense Reimbursement MeetingfTraining Expense Reimbursement MeetingfTraining Expense Reimbursement MeetingfTralning Expense Reimbursement MeelingfTraining Expense Reimbursement MeetingfTraining Expense Reimbursement MeetingfTraining Expense Reimbursement MeetlngfTraining Expense Reimbursement MeetingfTraining Expense Reimbursement MeetingfTraining Expense Reimbursement MeetingfTraining Expense Reimbursement Meetingrrraining Expense Reimbursement Page 7of9 EXHIBITS Warrant No. Vendor ~~~~~~~~~~~~~~~ 53244 Ken H. Wong 53245 Paula A. Zeller 53246 Aquarium of the Pacific 53247 Orange County Sanitation District 53248 Mini Mailers, Inc. 53249 Internal Revenue Service 53250 Peace Officers Council of CA 53251 Delta Dental 53252 Orange County Sanitation District 53253 Sancon Engineering, Inc. 53254 Southern California Edison 53255 Woodruff, Spradlin & Smart 53256 Orange County Sanitation District 53257 Allied Packing & Rubber, Inc. 53258 American Telephone & Telegraph Corp. 53259 Court Order 53260 C.R. Nelson P .E. 53261 Center for Creative Growth 53262 City of Fountain Valley 53263 Court Order 53264 Compressor Components Of California 53265 Consumers Pipe & Supply Co. 53266 Court Trustee 53267 Employee Benefits Specialists, Inc. 53268 Court Order 53269 Five Star Metals, Inc. 53270 Franchise Tax Board 53271 Internal Revenue Service 53272 Intl Union of Oper Eng AFL-CIO Local 501 53273 Irvine Ranch Water District 53274 Kristen Cummings, Leg. Assistant 53275 McMaster-Carr Supply Co. 53276 Mee Analytical System 53277 Midway Mfg & Machining Co. 53278 National Bond & Trust 53279 OCEA 53280 Court Order 53281 Court Order 53282 Patriot Video Productions 53283 Richard Hawk & Company 53284 City of Seal Beach Finance Dept. 53285 Shureluck Sales & Engineering 53286 Court Order 53287 So. Cal. Gas Company 53288 Southern California Edison 53289 Summit Steel 53290 SBC 53291 Thompson Industrial Supply, Inc. Claims Paid From 05/16/03 to 05/31/03 Amount 179.06 133.06 195.15 1,741.15 1,629.70 150.00 1,494.00 50,926.44 560,968.33 30,600.00 81,131.87 175,512.11 25,613.08 56.38 231.98 626.20 950.00 2,000.00 23,307.12 150.00 1,248.00 2,526.68 69.12 7,983.20 525.00 327.26 100.00 175.00 3,281.91 48.28 725.19 153.86 5,145.33 2,160.39 2,243.05 524.61 40.00 296.00 516.59 4,000.00 188.78 1,085.91 721.50 8,552.19 26.81 84.43 1,295.19 4,334.93 Description Meetingffraining Expense Reimbursement Meeting/Training Expense Reimbursement Reimbursable Employee Activity Expense Petty Cash Reimb. Notice of Preparation -5-58 Mailing & Postage Expense Wage Garnishment Dues Deduction Dental Insurance Plan Payroll EFT Reimbursement Construction -Manhole Rehabilitation & Pump Out of (3) Air Jumpers Power Legal Services MO 7-26-95 Worker's Comp. Reimb. Mechanical Supplies Telephone Service Wage Garnishment Engineering Consultant 2-41 Professional Services -O & M Management Coaching Water Use Wage Garnishment Coil Cleaning & Testing & Compressor Parts Plumbing Supplies Wage Garnishment Reimbursed Prepaid Employee Medical & Dependent Care Wage Garnishment Mechanical Parts & Supplies Wage Garnishment Wage Garnishment Dues Deduction Water Use Legislative Advocacy Expense Mechanical Parts & Supplies Toxicity Analysis Mechanical Repairs & Maintenance Services U.S. Savings Bonds Payroll Deductions Dues Deduction Wage Garnishment Wage Garnishment Video Supervisor Safety Training Water Use Mechanical Parts & Supplies Wage Garnishment Natural Gas Power Metal Telephone Services Mechanical Parts & Supplies Page8of9 .., EXHIBITB Warrant No. Vendor ~~~~~~~~~~~~~~~ 53292 U.S Postal Service 53293 United Way 53294 Verizon California 53295 Vision Service Plan 53296 Weather & Wind Instrument Co. 53297 Nicholas J. Arhontes 53298 Lisa Arosteguy 53299 Richard A. Castillon 53300 James E. Colston 53301 John D. Linder 53302 David A. Ludwin 53303 Denise M. Martinez 53304 Edward M. Torres 53305 Michael D. White Total Payroll Disbursements Payroll Disbursements 29985 -30084 Employee Paychecks 85539 -86027 Direct Deposit Statements Total Payroll Disbursements Wire Transfer Payments U.S. Bank Total Wire Transfer Payments Total Claims Paid 05/16/03-05/31/03 Claims Paid From 05/16/03 to 05/31/03 Amount 5,000.00 305.00 1,672.34 8,907.12 1,026.78 211.52 673.13 95.28 469.74 486.44 476.19 540.98 728.72 735.69 $ 4,691,669.46 $ 149,928.61 879,759.64 $ 1,029,688.25 $ 306,888.35 $ 306,888.35 $ 6,028,246.06 Description Postage Employee Contributions Telephone Services Vision Service Premium Wind Sock Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Biweekly Payroll 05/28/03 Biweekly Payroll 05/28/03 May Interest Payment on Series 2000 Certificates of Participation Page 9 of 9 EXHIBITS BOARD OF DIRECTORS Meeting Date To Bel. of Dir. 7/23/03 AGENDA REPORT Item Number Item Number 8 Orange County San itation District FROM: Gary Streed , Director of Finance Originator: Lenora Crane , Executive Assistant SUBJECT: PAYMENT OF CLAIMS OF THE ORANGE COUNTY SANITATION DISTRICT GENERAL MANAGER'S RECOMMENDATION Ratify Payment of C laims of the District by Roll Call Vote . CONFLICT OF INTEREST NOTIFICATION Pursuant to Government Code Section 84308 , you are required to disclose any campaign contribution greater than $250 received in the past twelve months from any party to a contract involving the Orange County Sanitation District. Further, you may not participate in the decision making process to award a contract to such party. For reference , you are directed to the Register of Warrants as to all current contractors/vendors with the District. For the specifics of Government Code Section 84308 , please see your Directo r's Handbook or call the office of General Counsel. SUMMARY See attached listing. PRIOR COMMITTEE/BOARD ACTIONS N/A ATTACHMENTS 1. Copies of Claims Paid reports from 06/01 /03 -06/15/03 and 06/16/03 -06/30/03 C:\Documents a nd Settings\pope\Local Setting s\Temporary Internet Files\OLK3FE\ltem 8.Claim s Paid .d oc Revised : 06/04/0 3 Claims Paid From 06/01/03 to 06/15/03 Warrant No. Vendor ~~~~~~~~~~~~~~~ Accounts Payable -Warrants 53306 Air Products & Chemicals 53307 Aquatic Bioassay And Consulting Labs, Inc. 53308 Basic Chemical Solutions 53309 Black & Veatch Corporation 53310 Brown & Caldwell 53311 Carollo Engineers 53312 Coral Energy Resources, L. P. 53313 County of Orange -Auditor Controller 53314 General Petroleum 53315 Kaiser Foundation Health Plan 53316 Kemiron Pacific, Inc. 53317 Orange County Water District 53318 Pacific Blue Micro 53319 Parsons Engineering Science, Inc. 53320 Pioneer Americas, Inc. 53321 Sancon Engineering, Inc. 53322 Skalar, Inc. 53323 Southam Califomia Edison 53324 Synagro Composting 53325 Tule Ranch 53326 U.S. Peroxide 53327 The Wackenhut Corporation 53328 Waste Markets Corp. 53329 lnsituforrn Technologies, Inc. 53330 J.F. Shea Construction, Inc. 53331 Margate Construction, Inc. 53332 Oved Dagan Construction Co. 53333 Acroprint Time Recorder Company 53334 Agilent Technologies, Inc. 53335 Airborne Express 53336 Airgas -West 53337 Airgas Safety 53338 Alfa-Laval, Inc. 53339 Alhambra Foundry Co., Ltd. 53340 AliMed, Inc. 53341 Allometrics 53342 American Public Works Association 53343 American Red Cross 53344 Nicholas J. Arhontes 53345 Atlantis Pool Care 53346 Awards & Trophies Company 53347 AGM Electronics, Inc. 53348 American Telephone & Telegraph Corp. 53349 AT & T Wireless Services-Airtime 53350 BakerTanks 53351 Ballantyne, Inc. 53352 Bush & Associates, Inc. 53353 SEC-Building Electronic Controls, Inc. Amount $ 25,758.02 36,239.48 35,819.91 40,118.78 196,757.71 618,806.70 56,619.33 25,000.00 28,192.52 42,229.38 80,264.09 1, 175,474.11 47,710.00 183,173.54 213,185.34 33,805.50 37,093.64 70,259.96 51,353.16 185,442.04 109,445.18 26,145.66 25,104.25 233,872.56 1 ,012,085.63 3,500,408.00 219,252.00 69.04 2,059.65 150.64 44.80 2,274.43 1,618.76 3,439.38 76.95 1,501.39 3,550.00 350.00 360.02 500.00 114.42 373.37 62.52 3,323.62 2,626.89 6,960.00 2,076.00 308.04 Description 0 & M Agreement Oxy Gen Sys MO 8-8-89 Toxicity Testing Sodium Bisulflte Engineering Services P1-76 Engineering Services 2-41 & P1 -37 Professional Services P1 -60, P2-60, P2-66 & Microfiltration Demo. Project Natural Gas Construction -Removal of 21 • Sewerline for Construction Access Unleaded Gasoline, Lubricants & Oil Medical Insurance Premium Ferric Chloride MO 9-27-95 GAP Water Use & GWRS Joint Project Software & Maintenance Agreement -Cisco Smart Net Engineering Services J-35-1 Sodium Hypochlorite Construction -Sewer Repairs & Manhole Rehabilitation at Various Locations Lab Instruments, Parts & Supplies Power Residuals Removal MO 3-29-95 Residuals Removal MO 3-29-95 Professional Services -Collection Sys. Odor & Corrosion Control Chem. Add. Study Security Guards Maint. Agreement -Grit & Screenings Removal & Digester Bed Mafl. Removal Construction 5-29-R1 Construction J-35-1 & J-87 Construction P1-37 Construction J-90 Repair of Time Recorder Lab Parts & Supplies Air Freight Demurrage Safety Supplies Electrical Parts & Supplies Manhole Frames & Covers Computer Supplies Lab Instruments, Parts & Supplies Membership CPR Classes & Supplies Meeting/Training Expense Reimbursement Service Agreement -Admin. Bldg. Atrium Plaques Electronic Supplies Telephone Service Cellular Telephone Service Tank Rentals Temporary Employment Services Surveying Services MO 6-25-97 Fire Alarm System Maintenance & Quarterly Inspection Page 1of7 EXHIBIT A Warrant No. Vendor ~~~~~~~~~~~~~~~~ 53354 Califomia Relocation Services, Inc. 53355 Cardlock Fuels 53356 Carl Warren & Co. 53357 Clickguard Corporation 53358 Coast Transmission 53359 Color Arts, Inc. 53360 Commercial Roof Management, Inc. 53361 Communications Supply Corp. 53362 Computer Protection Technology, Inc. 53363 CompuMaster On-site 53364 Consolidated Elect. Distributors, Inc. 53365 Consumers Pipe & Supply Co. 53366 Cooper Cameron Corporation 53367 Corporate Express 53368 Cortech Engineering 53369 Counterpart Enterprises, Inc. 53370 Voided Check 53371 Voided Check 53372 County Wholesale Electric Co. 53373 Cytec Industries 53374 CCP Industries 53375 CGvL Engineers 53376 Ciba Specialty Chemicals Corporation 53377 CMF Corporation 53378 CR&R, Inc. 53379 CWEA Membership 53380 Dapper Tire Co. 53381 David's Tree Service 53382 Dell Computer 53383 Diamond H Recognition 53384 E. Sam Jones Distributors, Inc. 53385 Eastech Badger 53386 Eberhard Equipment 53387 Electra-Bond, Inc. 53388 Embarcadero Technologies, Inc. 53389 Empire Pipe Cleaning & Equipment, Inc. 53390 Enchanter, Inc. 53391 Eurotherm Group Companies 53392 Emedco 53393 Filarsky & Watt, L.L.P. 53394 First American Real Estate Solutions 53395 Fisher Scientific Company, L.L.C. 53396 Flat and Vertical, Inc. 53397 Foodcraft Coffee & Refreshment Services 53398 Franklin Covey 53399 Fry's Electronics 53400 City of Fullerton 53401 FLW, Inc. 53402 G. E. Supply Company Claims Paid From 06/01/03 to 06/15/03 Amount 202.30 942.83 104.16 140.58 1,958.44 1,210.40 900.00 8.46 13,088.66 5,000.00 968.20 1,836.78 208.86 4,358.11 4,892.11 328.33 703.40 17,930.67 8,342.01 7,805.06 18,620.93 6,087.88 3,235.00 276.00 1,072.26 11,050.00 16,576.26 782.21 295.78 2,999.66 708.94 4,067.57 3,090.28 21,809.35 5,400.00 756.50 502.24 3,467.50 647.50 14,956.12 660.00 369.14 617.65 654.87 118.86 1,042.28 375.35 Description Office Moving Services Fueling District Vehicles at Local Gas Stations Insurance Claims Administrator Printer Service Agreement Vehicle Repairs V-478 Construction Decals -GWRS Project Construction -O & M Building Roof Repairs Freight Computer Maintenance -(10) Battery Replacements On-Site Training -PowerPoint Electrical Supplies Plumbing Supplies Engine Supplies Office Supplies Pump Supplies Mechanical Parts & Supplies Electrical Parts & Supplies Anionic Polymer Spec. No. 9798-18 Janitorial Supplies Professional Services P1 -94 Cationic Polymer Lab Parts & Supplies Container Rentals Membership -Calif. Water Environment Assoc. Truck Tires Tree Maint. Service Computers Employee Service Awards Electrical Supplies Repairs & Calibration of Flow-Meters Mechanical Parts & Supplies Impeller Maintenance -Sandblasting & Fusion Bond Coating Software Maintenance Sewerline Cleaning -Various Locations Ocean Monitoring MO 5-24-95 Inst. Parts & Supplies Identification Signs Prof. Services -SPMT Labor Negotiation Meetings & Special Services Orange County Property Information Lab Parts & Supplies Concrete Cutting Meeting Supplies Office Supplies Computer Supplies Water Use Instrument Parts & Supplies Electrical Parts & Supplies Page 2 of 7 ~· EXHIBIT A. ,0 I Warrant No. _v_e_n_d_o_r ------------- 53403 Ganahl Lumber Company 53404 George Hamilton Jones, Inc. 53405 George Yardley Co. 53406 Gierlich·Mitchell, Inc. 53407 Global Environmental Network, Inc. 53408 Golden State Controls 53409 Goldenwest Window Service 5341 O John G. Gonzalez 53411 WW Grainger, Inc. 53412 Graybar Electric Company 53413 Guarantee Records Management 53414 GPM Pumps, Inc. 53415 Haaker Equipment Company 53416 Harrington Industrial Plastics, Inc. 53417 Hello Direct, Inc. 53418 High Impact Training 53419 Hill Brothers 53420 Hilti, Inc. 53421 The Holman Group 53422 Home Depot 53423 Hopkins Technical Products 53424 Horizon Technology 53425 Hub Auto Supply 53426 City of Huntington Beach 53427 HI Standard Automotive 53428 Industrial Distribution Group 53429 Industrial Threaded Products, Inc. 53430 Interstate Battery Systems 53431 lntratek Computer, Inc. 53432 Iron Mountain 53433 Irvine Ranch Water District 53434 J & L Industrial Supply 53435 J.G. Tucker and Son, Inc. 53436 Jamison Engineering Contractors, Inc. 53437 Jay's Catering 53438 Johnstone Supply 53439 K.P. Lindstrom, Inc. 53440 Kent Fluid Power Div. of AIT 53441 Kforce Professional Staffing 53442 Lab Safety Supply, Inc. 53443 Lee & Ro, Inc. 53444 Lifecom-Safety, Inc. 53445 Long Beach Line-X 53446 Lucci's Gourmet Foods, Inc. 53447 M. J. Schiff & Associates, Inc. 53448 MarVac Electronics 53449 McMaster-Carr Supply Co. 53450 Measurement Control Systems, Inc. 53451 Michael's Roofing Claims Paid From 06/01/03 to 06/15/03 Amount 223.00 350.00 753.56 15,224.22 1,187.50 138.35 2,462.00 638.90 816.29 57.86 24.36 12,969.20 900.03 692.97 90.56 4,250.00 18,053.91 970.20 866.70 59.25 1,190.93 122.18 198.34 16,652.88 232.62 1,346.32 7,224.66 495.11 1,800.00 151.88 6.69 141.44 7,668.72 10,484.00 1,173.97 26.10 2,665.00 96.97 475.20 326.39 9,206.25 565.61 347.38 362.38 5,091.04 60.24 2,509.20 4,423.96 1,600.00 Description Lumber/Hardware Appraiser Litigation Services -Project 5-50 Electrical Supplies Mechanical Parts & Supplies Trench Safety Training Inst. Parts & Supplies Window Cleaning Service -Spec. #990015 Meeting/Training Expense Reimbursement Safety Storage Cabinet Electrical Supplies Off-Site Records Storage (2) Pump Assemblies Automotive Parts & Repair Service Flow Meters Telephone Headsets Forklift Operator Safety Training Chemicals -Odor & Corrosion Control -Newport Trunkline Mechanical Parts & Supplies Employee Assistance Program Premium Misc. Repair & Maintenance Material Installation & Calibration of Chlorine Analyzer Lab Parts & Supplies Automotive Parts & Supplies Water Use Automotive Parts, Supplies & Repairs Mechanical Parts, Paint Supplies & Tools Fasteners Batteries Network & Server Maintenance Bid Document Storage Fees P1-37 Water Use Mechanical Parts, Supplies & Tools Instrument Parts, Supplies & Cylinder Gases Construction -Repair Underground Pipe Leak at 0.0.B.S. Wetwell Area Meeting Expenses Pump Supplies Environmental Consulting Services MO 12-9-90 Automatic Drain Filters Temporary Employment Services Lab Parts & Supplies Professional Services P1 -93 Instrument Calibration & Repairs Spray-On Truck Bed Liner Meeting Expense Professional Services -Corrosion Study Electrical Parts & Supplies Mechanical & Electrical Parts & Supplies Mechanical Parts, Calibration & Repairs Roof Repairs to l.T. Trailer Complex Page 3 of 7 0 EXHIBIT A Warrant No. Vendor ~~~~~~~~~~~~~~~~ 53452 Mid-West Associates 53453 Midway Mfg & Machining Co. 53454 Milltronics, Inc. 53455 Minarik 53456 Mission Uniform Service 53457 Montgomery Watson 53458 Peter M. Morrison 53459 MARMAC Field Services, Inc. 53460 MCA Technologies, Inc. 53461 MOS Consulting 53462 National Notary Association 53463 National Plant Services, Inc. 53464 National Safety Council 53465 National Technology Transfer, Inc. 53466 Newark Electronics 53467 Nickey Petroleum Co., Inc. 53468 The Norco Companies 53469 Numatic Engineering 53470 NCG Porter Novelli, Inc. 53471 NRG Energy, Inc. 53472 0. C. Windustrial Co. 53473 Office Depot Business Services Div. 53474 OneSource Distributors, Inc. 53475 Orange County Hose Company 53476 Orange County Vector Control District 53477 Orange Courier 53478 Ortiz Fire Protection 53479 Oxygen Service Company 53480 OCB Reprographics 53481 Pacific Mechanical Supply 53482 Parker Supply Company 53483 Patriot Video Productions 53484 PenValve 53485 The Perkin Elmer Corp. 53486 PinnacleOne Institute 53487 Hach c/o Ponton Industries 53488 Power Design 53489 Pre-Paid Legal Services, Inc. 53490 Primary Source 53491 Profit Techniques, Inc. 53492 Projects Partners 53493 Putzmeister -America 53494 PCS Express 53495 Realtime Systems Corporation 53496 RemedyTemp, Inc. 53497 Retrofit Parts & Components, Inc. 53498 Richard Hawk & Company 53499 Ricoh Business System 53500 Rockwell Automation -Entek Claims Paid From 06/01/03 to 06/15/03 Amount 1,915.16 13,642.38 18.00 597.37 4,609.77 1, 105.50 551.36 12,386.58 501.74 17,596.80 45.00 12,535.00 535.94 12,185.00 2,384.32 1,770.85 173.18 369.03 20,389.15 2,425.81 365.76 1,171.99 77.02 574.55 3,303.40 40.25 3,615.00 2,080.Q1 9,621.85 2,555.40 1,556.73 198.82 1,297.44 7,043.20 24,970.00 2,362.03 4,599.23 478.40 24,835.12 2,000.00 10,844.04 333.03 235.60 9,468.75 1,914.38 1,314.89 4,000.00 3,247.80 1,872.24 Description Pump Supplies Parts Machining Services Freight Instrument Supplies Uniform Rentals Professional Services -Emission Modeling & Analysis Meeting/Training Expense Reimbursement Professional Services -Emergency Operation Center Modifications Instrument Supplies Surveying Services Membership Vacuum Truck Services On-Site Training -Defensive Driving Electrical Code Training Computer Hardware/Software Mechanical Oil Mail Delivery Service Cylinders Professional Services -Public Relations Biosolids Outreach Program Mechanical Parts & Supplies Mechanical Parts & Supplies Office Supplies Electrical Parts & Supplies Hose Supplies Pest Control Courier Services Service Agreement-Testing/Certification, Qtrly. Inspection & Repair of Fire Sprinklers Specialty Gases Printing Service -MO 1/26/00 Plumbing Supplies Pump Supplies Video Mechanical Parts & Supplies Lab Parts & Supplies Legal Services -J-33-1 A Claim Lab Parts & Supplies Electrical & Computer Hardware Supplies Employee Legal Service Insurance Premium Office Furniture 0 & M Training Registration Temporary Employment Services Mechanical Parts & Supplies Courier Service Software/Hardware Maintenance Agreement & Support Temporary Employment Services Mechanical Parts & Supplies Supervisor Safety Training Color Copier Lease Computer Software/Hardware Page 4 of 7 ~" EXHIBIT A, Cl' .P•', 0 Claims Paid From 06/01 /03 to 06/15/03 Warrant No. Vendor Amount Descril!tion 53501 Rosemount, Inc. 3,083.36 Instrument Supplies 53502 Rosen Electrical Equipment Corp. 3,227.31 Electrical Supplies 53503 Ryan Herco Products Corp. 841.08 Pump Supplies 53504 RPM Electric Motors 2,997.17 Motor & Pump Repairs 53505 Scicon Technologies Corp. 3,565.78 Instrument Parts & Supplies 53506 Seaventures 3,500.00 Ocean Monitoring Vessel 53507 Shamrock Supply Co., Inc. 4,674.41 Tools 53508 Smardan Supply Company/Orange Coast 42.86 Plumbing Supplies 53509 SoftChoice 2,654.64 One-World Training Manuals & Software 53510 South Coast Air Quality Management Dist. 3,870.00 Annual Emission, Operation & Misc. Fees 53511 Southern Counties Oil Co. 9,984.44 Diesel Fuel 53512 Spectrum Video, Inc. 1,463.75 Professional Services -Board Room Audio-Visual Design 53513 Stanley Steamer International, Inc. 448.50 Carpet Cleaning Services 53514 Stryper Technologies 19,235.00 (2) Computers 53515 Sulfa Treat 1,764.74 Instrument Parts & Supplies 53516 Summit Steel 2,906.99 Metal 53517 Sunset Ford 16.54 Vehicle Supplies 53518 Sunset Industrial Parts 2,834.64 Mechanical Supplies 53519 SPEC Services, Inc. 19,757.09 Engineering Services J-33-1 53520 SPEC Services, Inc. 23,321.n Engineering Services J-33-1 53521 SPX Valves & Control 2,975.07 Valve Plugs 53522 Taylor-Dunn 684.18 Electric Cart Parts 53523 Teksystems 10,446.00 Temporary Employment Services 53524 Termlnix International Co. 1, 165.00 Pest Control 53525 Tetra Tech, Inc. 931.78 Professional Services 7-37 53526 The Orange County Register 468.00 Notices & Ads 53527 The Walking Man, Inc. 575.00 Public Notice Door Hangers -Warner Ave. Relief Sewer, 11-22 53528 Thomas Gray & Assoc. 19.08 Freight 53529 Thomas V. Garlinger 900.00 Lab Analyses 53530 Thompson Industrial Supply, Inc. 95.32 Mechanical Supplies 53531 ThyssenKrupp Elevator Corporation 1, 160.00 Elevator Maintenance 53532 Tifco Industries 161.00 Mechanical Parts, Supplies & Tools 53533 Time Warner Communication 40.47 Cable Services 53534 Times Community News 225.00 Notices & Ads 53535 Tire's Warehouse 600.52 Tires 53536 Tony's Lock & Safe Service & Sales 148.40 Locks& Keys 53537 Southern California Trane Service 177.88 Electrical Parts & Supplies 53538 Tropical Plaza Nursery, Inc. 13,636.89 Contract Groundskeeping MO 5-11-94 53539 Truck & Auto Supply, Inc. 155.82 Automotive Supplies 53540 Turblex, Inc. 9,522.92 (1) Cutler Hammer, Panel Mate Power Pro 53541 U.S. Metro Group, Inc. 24,785.00 Janitorial & Floor Maintenance at Plants 1 & 2 53542 Ultra Scientific 325.14 Lab Supplies 53543 The Unisource Corporation 7,660.75 Office Supplies 53544 United Rentals, Inc. 1,069.72 Submersible Electric Pump Rental 53545 Board of Regents 1,790.00 0 & M Training Registration 53546 Vallen Safety Supply Company 1,639.40 Safety Supplies 53547 Vapex, Inc. 1,918.00 Instrument Parts & Supplies 53548 Verizon 116.56 Telephone Service 53549 Verizon California 99.27 Telephone Services Page 5 of 7 EXHIBIT A Warrant No. Vendor 53550 Verne's Plumbing 53551 Village Nurseries 53552 VWR Scientific Products Corporation 53553 Water Systems Cleaning Co. 53554 Waxie Sanitary Supply 53555 West Coast Safety Supply Co. 53556 Wilhelm Electric Co., Inc. 53557 Wilson Supply, Inc. 53558 Watson Wyatt Data Services 53559 WEF 53560 Xerox Corporation 53561 California Bank & Trust 53562 Cora Constructors 53563 Southern Contracting Company 53564 Patrick 8. Carnahan 53565 Barbara A. Collins 53566 Philip F. Cordova 53567 James D. Herberg 53568 Michael D. Moore 53569 Robert Ooten 53570 Gary A. Pons 53571 Steven M. Thornburg 53572 Linda Losurdo 53573 Orange County Sanitation District 53574 Phonsiri, Vanh 53575 Reliastar 53576 Blue Cross of California 535n Orange County Sanitation District 53578 Parsons Infrastructure & Tech. Group 53579 Airgas Safety, Inc. 53580 American Airlines 53581 Blake Anderson 53582 Ashbrook Corporation 53583 American Telephone & Telegraph Corp. 53584 Court Order 53585 Black & Veatch Corporation 53586 California Bike Commute 53587 Court Order 53588 Consumers Pipe & Supply Co. 53589 Convey Compliance Systems, Inc. 53590 County of Orange -Auditor Controller 53591 County of Orange -Auditor Controller 53592 Court Trustee 53593 CWEA Membership 53594 Department of Motor Vehicles 53595 Digiterra, Inc. 53596 Employee Benefits Specialists, Inc. 53597 Court Order 53598 Franchise Tax Board Claims Paid From 06/01/03 to 06/15/03 Amount 2,510.00 44.18 6,673.19 4,140.00 171.14 2,500.36 11,480.00 1,020.53 399.00 592.00 7,807.70 1,382.00 11,340.00 12,434.00 946.36 709.30 407.70 210.00 252.00 922.74 1, 195.50 457.60 1,238.68 1,635.71 1,249.06 9,438.40 2n,551.30 552,117.62 79,980.00 48.52 6,304.00 190.80 211.33 543.25 626.20 130.00 298.00 150.00 1,810.08 370,01 107.68 140.82 69.12 92.00 24.00 96.98 7,983.20 525.00 100.00 Description Service Contract-Testing & Cert. Backflow Devices at Pits. 1 & 2 & Pump Sta. Landscaping Supplies Lab Supplies Cleaning Services -Scrubber 1 at Pit. 2 Janitorial Supplies Mechanical Parts & Supplies Installation of (2) Underground Telephone Conduits at Seal Beach Pump Station Mechanical Parts & Supplies Publication Membership -Water Environment Federation Fax & Copier Leases Construction J-33-1 A, Retention Construction 7-7-2 Construction J-33-1 A Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Petty Cash Reimb. Employee Computer Loan Program Employee Medical Health Premium Medical Insurance Premium Payroll EFT Reimbursement Professional Services J-40-9 Safety Supplies Travel Services Meeting/Training Expense Reimbursement Mechanical Parts & Supplies Telephone Service Wage Garnishment Publication T-Shirts-Employees Bike to Work Day Wage Garnishment Mechanical Parts & Supplies Software Maint. Agreement -Repair/Installation of Base, Handheld & Vehicle Radios Maint. Agreement -Repair/Installation of Base, Handheld & Vehicle Radios Wage Garnishment Membership -Calif. Water Environment Assoc. Vehicle Decals Computer Keyboard Reimbursed Prepaid Employee Medical & Dependent Care Wage Garnishment Wage Garnishment Page 6 of 7 ~ EXHIBIT A Claims Paid From 06/01/03 to 06/15/03 Warrant No. _v_e_nd_o_r ________________ Am __ o_un_t __ 53599 Hasler, Inc. 930.96 53600 lntelaCard, L.L.C. 148.18 53601 lntemal Revenue Service 325.00 53602 Interstate Battery Systems 354.94 53603 Intl. Union of Oper. Eng. AFL-CIO Local 501 3,283.68 53604 Manleys Boller, Inc. 112.17 53605 McMaster-Carr Supply Co. 208.53 53606 National Bond & Trust 2, 148.34 53607 OCEA 524.61 53608 Court Order 40.00 53609 Court Order 296.00 5361 O Peace Officers Council of CA 1,503.00 53611 PenValve 61.53 53612 Richard Hawk & Company 1,159.00 53613 Shureluck Sales & Engineering 224.17 53614 Court Order 721.50 53615 Southam Califomla Edison 6,976.94 53616 SBC 33.45 53617 Thompson Industrial Supply, Inc. 418.24 53618 United Way 305.00 53619 Verizon Califomia 1,289.81 53620 Blake Anderson 2,038.45 53621 Patrick W. McNelly 392.38 53622 Emest R. Savedra 92.00 53623 Mark A. Tomko 134.00 53624 Daniel R. Tremblay 955.16 Total Accounts Payable -Warrants $ 10, 130, 701.43 Payroll Disbursements 30085 -3021 O Employee Paychecks 30211 -30211 Interim Paycheck 86028 -86523 Direct Deposit Statements Total Payroll Disbursements Wire Transfer Pavments Chase Bank of Texas, National Association Chase Bank of Texas, National Association Total Wire Transfer Payments Total Claims Paid 06/01/03-06/15/03 $ 156,977.61 5,563.46 857,515.77 $ 1,020,056.84 $ 45,145.09 117,593.01 $ 162,738.10 $ 11,313,496.37 Description Software & Maintenance -Complete Mail Manager lntellitouch System Office & Computer Printer Supplies Wage Garnishment Batteries Dues Deduction Mechanical Parts & Supplies Mechanical Parts, Repairs & Maintenance Materials U.S. Savings Bonds Payroll Deductions Dues Deduction Wage Gamishment Wage Gamishment Dues Deduction Mechanical Parts & Supplies Professional Services -Supervisor Safety Training Program & Prep Work Mechanical Parts & Supplies Wage Gamishment Power Telephone Services Mechanical Supplies Employee Contributions Telephone Services Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Biweekly Payroll 06/11/03 Termination Paycheck Biweekly Payroll 06/11 /03 May Interest Payment on 1993 Certificates of Participation Societe Generale May Swap Payment on 1993 Certificates of Participation Page 7 of 7 EXHIBIT A Warrant No. Vendor ~~~~~~~~~~~~~~~~ Accounts Payable -Warrants 53625 Black & Veatch Corporation 53626 Brown & Caldwell 53627 Delta Dental 53628 Dobbertin & Associates 53629 Green Giant Landscape, Inc. 53630 Hill Brothers 53631 Industrial Distribution Group 53632 Kemlron Pacific, Inc. 53633 Lee & Ro, Inc. 53634 Malcolm Pirnie, Inc. 53635 Municipal Water Dist. of Orange County 53636 NRG Energy, Inc. 53637 Orange County Sanitation District 53638 Orange Coast Jeep/Chrysler 53639 Parsons Engineering Science, Inc. 53640 Pioneer Americas, Inc. 53641 Polydyne, Inc. 53642 Prlntech Graphic Services, Inc. 53643 So. Cal. Gas Company 53644 Steve P. Rados, Inc. 53645 Synagro Technologies, Inc. 53646 Techno Coatings 53647 Tula Ranch 53648 Union Bank of Callfornla 53649 Water Environment Research Foundation 53650 lnsltuform Technologies, Inc. 53651 Orange County Sanitation District 53652 Able Scale Repair 53653 Advanced Business Graphics 53654 Advanced Sealing & Supply Co., Inc. 53655 Airborne Express 53656 Airgas -West 53657 Alhambra Foundry Co., Ltd. 53658 All Phase Environmental 53659 Alta-Robbins, Inc. 53660 American Red Cross 53661 Appleone Employment Service 53662 Aquarium of the Pacific 53663 Awards & Trophies Company 53664 ACGIH Worldwide 53665 AMSA 53666 ARB/PERP -Air Resources Board 53667 American Telephone & Telegraph Corp. 53668 Voided Check 53669 Voided Check 53670 Voided Check 53671 AWSI Claims Paid From 06/16/03 to 06/30/03 $ Amount 89,763.09 84,002.98 51,069.96 38,024.00 50,262.87 29,316.54 28,857.90 224,626.19 55,607.48 36,346.95 92,008.12 352,000.00 39,508.39 27,392.25 224,862.45 178,197.83 67,533.91 45,516.80 30,961.73 846,648.00 533,677.39 43,984.50 121,041.47 94,072.00 79,120.00 409,630.51 37,235.00 550.00 214.99 2,374.48 149.67 1,053.05 6,456.38 516.00 339.76 547.45 1,ns.00 49.80 1n.54 145.00 1,350.00 180.00 21.25 163.00 Description Engineering Services P1-76, P2-85 & J-77 Engineering Services -Plant 0 & M Manual & SOP Development Dental Insurance Plan Confined Space Rescue Training Construction -Landscaping & Irrigation at Pit. 2 Chemicals -Odor & Corrosion Control -Newport Trunkline (30) Custom Weather-Resistant Tool Boxes, Tools, & Mech. Supplies Ferric Chloride MO 9-27-95 Professional Services 5-49, 5-50, 5-51, 5-52, 5-54 & 11-23-1 Professional Services 1-1 O Water Use Efficiency Program MO 9-22-99 Overhaul of Cen Gen Engines 1 & 2 at Plant 2 Worker's Comp. Relmb. (1) 2003 Jeep Wrangler Engineering Services J-35-1 Sodium Hypochlorite Cationic Polymer MO 3-11-92 Printing & Mailings Services -Rate Increase Notifications Natural Gas Construction 1-2-4 Residuals Removal MO 3-29-95 Painting Services -Fiberglass Chemical Tanks & Scrubbers Residuals Removal MO 3-29-95 Construction 1-2-4, Retention Membership Construction 5-29-R1 Worker's Comp. Relmb. Maintenance Agreement -Qtrly. Inspections of Truck Loading Scales at Plants 1 & 2 Printing Mechanical Parts & Supplies Air Freight Lab Parts & Supplies Manhole Frames & Covers Hazardous Waste Disposal -Remove Unleaded Fuel from Auto Shop, Pit. 1 Instrument Supplies CPR Training & Miscellaneous Supplies Temporary Employment Services Reimbursable Employee Activity Expense Plaques Membership (American Conference of Industrial Hygienists) Source Control Meeting Registration Triennial Renewal Fee -Portable Equipment Registration Certificates Telephone Service Department of Transportation Training Program Page 1of7 ~ EXHIBIT B •1 ~', Claims Paid From 06/16/03 to 06/30/03 Warrant No. Vendor ~~~~~~~~~~~~~~~~ 53672 BakerTanks 53673 Bar Tech Telecom, Incorporated 5367 4 Basic Chemical Solutions 53675 Battery Specialties 53676 Camel Financial, Inc. c/o Bearing Metal 536n BloMerleux Vitek, Inc. 53678 Boyle Engineering Corporation 53679 C.S.U.F. Foundation 53680 Martin Boyer Co., Inc. c/o Cambridge, Int. 53681 City of Los Angeles 53682 City of Yorba Linda 53683 Coast Fire Equipment 53684 Communications Performance Group, Inc. 53685 CompuMaster On-site 53686 Condenser & Chiller Services, Inc. 53687 Conex International 53688 Consolidated Elect. Distributors, Inc. 53689 Consumers Pipe & Supply Co. 53690 Cooper Energy Services 53691 Cornerstone Systems, Inc. 53692 Corporate Express 53693 Cost Containment Solutions 53694 County Wholesale Electric Co. 53695 Culligan Water Conditioning 53696 CASA 53697 CGvL Engineers 53698 CWEA Membership 53699 David's Tree Service 53700 Del Mar Analytical 53701 Department of Consumer Affairs 53702 Diamond H Recognition 53703 E. Sam Jones Distributors, Inc. 53704 Eastech Badger 53705 Eberline Instruments 53706 Ecology Control Industries 53707 Edinger Medical Group, Inc. 53708 Elliott Bay Design Group 53709 Employee Benefits Specialists, Inc. 53710 Employers Group 53711 Enchanter, Inc. 53712 Environmental Resource Association 53713 Environmental Systems Research Inst. 53714 Excel Door & Gate Company, Inc. 53715 ESRI, Inc. 53716 FedEx Corporation 53717 Fllarsky & Watt, L.L.P. 53718 FlleNET Corporation 53719 Fisher Scientific Company, L.L.C. Amount 3,136.00 3,500.00 23,374.89 463.41 908.33 1,030.50 876.99 10,031.25 2,083.33 3,233.52 25.00 700.00 13, 110.68 2,800.00 13,800.50 1,325.00 963.52 1,279.81 56.50 9,299.90 300.72 1, 185.89 40.08 1,234.55 325.00 10,332.52 92.00 3,000.00 3,579.00 160.00 209.16 642.75 1,519.23 636.11 1,881.40 360.00 30.10 630.35 7,000.00 6,300.00 283.90 2,250.00 430.95 2,250.00 502.09 3,372.50 2,760.00 5,283.68 Description Tank Rentals Telephone Service -Relocation of 70 Telephones to J-90 Trailer Complex Sodium Blsulflte Batteries Metal Lab Supplies Engineering Services 2-31 Membership -Center for Demographic Research Prof. Services -Workers' Compensation Claims Grain Size Analyses Meeting Expenses -Project 2-41 Serv. Agree. -Testing, Recharging & Certification of Fire Extinguishers at Pits. 1 & 2 Professional Services -Integrated Emergency Response Procedures Revisions On-Site Training -MS Access Maintenance Service -Remove & Replace Condenser Heads Professional Services P2-60 Electrical Supplies Plumbing Supplies Mechanical Parts & Supplies Antiviral Software Renewal for Desktops, Server & E-Mails Office Supplies Worker's Comp. Services Electrical Parts & Supplies Water Softener Equipment Repairs at Truck Wash Source Control Meeting Registration Professional Services P1-94 Membership -Calif. Water Environment Assoc. Tree Malnt. Service Analysis of Biosolids and Wastewater Membership Employee Service Awards Electrical Supplies Instrument Parts & Supplies Calibration Services Hazardous Waste Disposal Medical Screening Naval Architecture Marine Engineering Services Reimbursed Prepaid Employee Medical & Dependent Care On-Site Training -Bus. Writing, Mgmt. Techniques, Proj. Mgmt. & Supvr. Devel. Ocean Monitoring & Outfall Inspection & Monitoring Lab Parts & Supplies Engineering Training Registration Maintenance & Repair Services Information Technology Training Registration Air Freight Prof. Services -SPMT Labor Negotiation Meetings & Special Services Computer Software -Electronic Document Management System Lab Parts & Supplies Page2of7 EXHIBITS Warrant No. Vendor ~~~~~~~~~~~~~~~~ 53720 Flo -Systems, Inc. 53721 Foodcraft Coffee & Refreshment Services 53722 Fortis Benefits Insurance Company 53723 Fountain Valley Camera 53724 Franklin Covey 53725 Friends of Keith Richman 53726 Fry's Electronics 53727 Garratt-Callahan Company 53728 Gates Fiberglass Installers 53729 George T. Hall 53730 Glerllch-Mitchell, Inc. 53731 Graham Company 53732 Grating Pacific, Inc. 53733 GBC (General Binding Corp) 53734 Harrington Industrial Plastics, Inc. 53735 Hasco Oil Co., Inc. 53736 High Impact Training 53737 Hilti, Inc. 53738 The Holman Group 53739 Home Depot 53740 Industrial Threaded Products, Inc. 537 41 Roto Rooter 53742 Irvine Photo Graphics 537 43 J & L Industrial Supply 537 44 J R Filanc Construction 53745 Jamison Engineering Contractors, Inc. 537 46 Jay's Catering 537 47 Johnstone Supply 53748 Kars Advance Materials, Inc. 537 49 Kforce Professional Staffing 53750 Lab Support 53751 Lucci's Gourmet Foods, Inc. 53752 LINJER 53753 M. J. Schiff & Associates, Inc. 53754 Manatt, Phelps & Phillips, L.L.P. 53755 Mandie Motors 53756 McJunkin Corporation 53757 McMahan Business Interiors 53758 McMaster-Carr Supply Co. 53759 McRay Industries, Inc. 53760 Measurement Variables, Inc. 53761 Mee Analytical System 53762 Media Clips, Inc. 53763 Medlin Controls Co. 53764 Megger 53765 Merlam Instruments c/o Patten Corp. 53766 Minarik 53767 Mitchell Instrument Co. Claims Paid From 06/16/03 to 06/30/03 Amount 2,335.85 548.54 21,191.53 17.67 618.40 204.00 3,728.84 294.16 1,823.25 96.85 378.61 405.61 230.60 95.06 1,373.44 223.73 4,000.00 1,991.22 868.32 1,669.53 4,044.78 13,489.98 507.50 1,812.20 6,405.00 5,750.93 613.31 129.80 6,490.00 242.88 13,471.97 96.00 8,831.69 24,033.28 5,000.00 116.50 129.63 9,344.04 313.82 1,754.51 813.31 1,464.60 40.00 441.97 1,270.00 92.00 558.71 75.00 Description Pump Supplies Meeting Supplies Long-Term & Short-Term Dlsablllty Ins. Premium Photo Supplies Office Supplies Professional Services 1-1 O Computer Supplies Chemicals Fiberglass Repairs -Tower H, Pit. 2 Tools Pump Parts & Supplies Batteries Fiberglass Grating Office Supplies Plumbing Supplies Lube Oil On-Site Operator Safety Training Mechanical Parts & Supplies Employee Assistance Program Premium Misc. Repair & Maintenance Material Mechanical Parts & Supplies CCTV Videoing of Trunkllne Sewers Photographic Services Mechanical Parts & Supplies Construction -Removal & Disposal of Fiberglass Panels at Blower Building Gas Flaps & Installation Meeting Expenses Electrical Supplies Cen Gen No. 3 Sample Analysis, Repair & Maintenance Temporary Employment Services Temporary Employment Services Meeting Expense Professional Service -DART MO 9-22-99 Professional Services -Corrosion Study Strategic Planning & Advocacy Towing Services Plumbing Supplies Construction -Cubicle Modifications to Human Resources Building Mechanical Parts, Tools & Maintenance Materials Mechanical Parts & Supplies Electrical Supplies Toxicity Analysis Notices & Ads Instrument Supplies Extended Software Support -A VTS & Pulse Master Instrument Parts & Supplies Electrical Parts & Supplies Instrument Parts & Supplies Page 3 of 7 4111 .. Co) EXHIBIT B Claims Paid From 06/16/03 to 06/30/03 Warrant No. Vendor ~~~~~~~~~~~~~~~~ 53768 National Journal Group, Inc. 53769 National Plant Services, Inc. 53770 National Technology Transfer, Inc. 53771 New Horizons CLC of Santa Ana 53772 Newark Electronics 53773 Nextel Communications 53774 Nickey Petroleum Co., Inc. 53775 North American Crane Bureau, Inc. 53776 Nu-Way Laser Engraving 53777 NAFA, Inc. 53778 Nelson-Dunn, Inc. 53779 Office Depot Business Services Div. 53780 Orange County Forum 53781 Oxygen Service Company 53782 OCB Reprographlcs 53783 P.L. Hawn Company, Inc. 53784 Pace Analytic Services 53785 Pacific Bell Internet Services 53786 PacHlc Parts & Controls 53787 Parker Supply Company 53788 PenValve 53789 Parma Pure, Inc. 53790 Ponton Industries, Inc. 53791 Primary Source 53792 Project Partners 53793 Protech Petroleum Services, Inc. 53794 Putzmefster 53795 PCG Industries 53796 PCS Express, Inc. 53797 R. L. Abbott & Associates 53798 Rainbow Disposal Co. 53799 Rainin Instrument Co., Inc. 53800 Refrigeration Supplies Distributor 53801 Reliastar 53802 Retrofit Parts & Components, Inc. 53803 Richard Hawk & Company 53804 River Network 53805 RBF Engineers 53806 RJN Group, Inc. 53807 RM Automation c/o RM Controls 53808 RMS Engineering & Design, Inc. 53809 RPM Electric Motors 53810 RSA Sutter Soil Products 53811 Safety-Kleen 53812 Schwing America, Inc. 53813 Scottel Voice & Data, Inc. 53814 Seal's Compressed Gases 53815 Secure Decks & Scaffolding, Inc. Amount 71.39 8,450.00 10,990.00 320.00 603.02 3,515.03 1,071.66 4,300.00 146.10 415.00 963.76 1,291.12 150.00 897.08 19,044.08 1,304.12 1,225.00 652.93 6,622.40 3,331.48 65.44 217.22 1,563.76 2,309.79 12,957.87 8,630.75 1,466.77 1,250.00 330.00 3,000.00 2, 126.12 219.65 337.26 9,421.05 241.66 5,143.50 29.00 8,669.11 9,000.00 101.99 4,665.00 3,352.54 1,540.82 3,943.65 82.37 2,284.80 225.25 720.00 Description Publication Vacuum Truck Services On-Site Training -Electrical Code & Custom High Voltage Information Technology Training Registration Computer Hardware Cellular Phones & Afr Time Oii/Lubricants On-Site Overhead Crane Operator Training -(5) Classes Steel Tags Membership (National Association of Fleet Administrators, Inc.) Piping Office Supplies Membership Specialty Gases Printing Service -MO 1 /26/00 Electrical Supplies Lab Analyses Internet Service Electrical Supplies Mechanical Parts & Supplies Mechanical Parts & Supplies Filter Instrument Supplies Office Furniture Temporary Employment Services Generator Repairs Pump Supplies Pump Repairs Courier Service Kem County Blosollds Consulting Services Trash Removal Instrument Repairs & Calibration Refrigeration Supplies Employee Basic Life Insurance Premium Mechanical Parts & Supplies Professional Services -Supervisor Safety Training Publication Engineering Services 2-24-1 CMMS Software Malnt. & Support Instrument Supplies Engineering Services J-89 Electrical Parts, Supplies, Pump Repairs & Electric Motor Soll Materials (1) Solvent Machine Pump Supplies Telephone System Maintenance Oxygen Bottle Refills for District Medical Team On-Site Hazard Awareness Training Page 4 of 7 ~·;, •· EXHIBIT B Claims Paid From 06/16/03 to 06/30/03 Warrant No. Vendor ~~~~~~~~~~~~~~~ 53816 Shamrock Supply Co., Inc. 53817 Shureluck Sales & Engineering 53818 Sigma-Aldrich, Inc. 53819 Smith-Emery Company 53820 South Coast Air Quality Management Dist. 53821 South Coast Systems, Inc. 53822 Southern California Edison 53823 Southern California Material Handling 53824 Sparkletts 53825 Spex Certiprep, Inc. 53826 Stanton Radiator 53827 Sterling Art 53828 Strata International, Inc. 53829 Summit Steel 53830 Sunset Industrial Parts 53831 Symcas-TSG 53832 SCAP 53833 South Coast Environmental Co. 53834 SPX Valves & Control 53835 Taylor-Dunn 53836 Tetra Tech, Inc. 53837 The Lewis Group 53838 The Walking Man, Inc. 53839 Thomas Brothers Maps 53840 Thompson Industrial Supply, Inc. 53841 Tlfco Industries 53842 Daily Pilot 53843 Tony's Lock & Safe Service & Sales 53844 Southern California Trane Service 53845 Tri-County Sandblasting, Inc. 53846 Tropical Plaza Nursery, Inc. 53847 TCH Associates, Inc. 53848 US Filter Corporation 53849 The Vantage Group 53850 Vapex, Inc. 53851 Verizon California 53852 Vision Service Plan 53853 The Wackenhut Corporation 53854 Water 3 Engineering, Inc. 53855 Waxle Sanitary Supply 53856 Court Order 53857 WEF 53858 WEFTEC 53859 Xerox Corporation 53860 Unity Constructors 53861 Kimberly C. Christensen 53862 Michele Farmer 53863 Miriam Loyo Amount 15.36 186.61 275.66 2,249.50 150.00 19,419.00 1,971.32 20,901.35 1,444.47 410.39 4,971.29 1,015.n 505.46 594.32 833.16 1,384.18 4,000.00 1,265.00 110.68 157.78 417.57 2,901.62 550.00 9,923.78 7,204.03 353.49 50.00 112.55 159.77 500.00 7,975.10 592.16 1, 159.00 5,440.00 2,392.38 4,285.74 8,907.12 14,767.85 6,295.87 347.30 108.00 134.00 1,820.00 4,142.20 15,266.80 251.60 1,306.68 397.00 Description Mechanical Supplies Mechanical Parts & Supplies Lab Parts & Supplies Professional Services P1-37 Annual Emission, Operation & Misc. Fees Professional Services -Anoxlc Gas Floatation Pilot Test Power (1) 2003 Caterpillar 3,500 lb. Forklift Drinking Water/Cooler Rentals Lab Parts & Supplies Radiator Repair Drafting & Engineering Materials Chemicals Metal Mechanical Parts & Supplies SCAD A System VAX Service Agreement Legal Services -Kern County Litigation Fund Cen Gen Emissions Testing Service Mechanical Parts & Supplies Electric Cart Parts Professional Services 7-37 Consulting Service -Capital Project Management Process Printing & Distribution Services of Door Hangers -Project 1-2-4 Software License Mechanical Parts & Supplies Mechanical Parts & Supplies Notices & Ads Locks& Keys Electrical Parts & Supplies Graffiti Removal Contract Groundskeeplng MO 5-11-94 Lab Supplies Service Agreement -Lab Purification System Temporary Employment Service Instrument Maintenance -Odor Control & Monitoring Telephone Services Vision Service Premium Security Guards Engineering Service J-67 Janitorial Supplies Wage Garnishment Membership -Water Environment Federation 0 & M Meeting Registration Fax/Copier Leases & Stationery/Office Supplies Construction 7-14-4 Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Page 5of7 '-EXHIBIT B Claims Paid From 06/16/03 to 06/30/03 Warrant No. Vendor Amount Description 53864 Canh Q. Nguyen 174.94 Meeting/Training Expense Reimbursement 53865 Fred J. O'Brien 201.48 Meeting/Training Expense Reimbursement 53866 Edwin D. Ratledge 1,084.45 Meeting/Training Expense Reimbursement 53867 George L. Robertson 532.50 Meeting/Training Expense Reimbursement 53868 Ken A. Sakamoto 627.16 Meeting/Training Expense Reimbursement 53869 Carolyn L. Thompson 165.00 Meeting/Training Expense Reimbursement 53870 Orange County Sanitation District 1,n2.58 Petty Cash Relmb. 53871 Rodriguez, Dave & Comp USA 3,000.00 Employee Computer Loan Program 53872 SWRCB Accounting Office 700.00 Notice of Intent Permit Fee -Project 11-22 53873 AT&T Wireless Services 229.97 Cellular Phones & Accessories 53874 AT & T Wireless Services 2,838.25 Wireless Services for Flow Meters -Project J-73-2 53875 American Express 30,945.36 Purchasing Card Program, Misc. Supplies & Services 53876 J.D. Edwards World Solutions Company 60,679.64 Software Maintenance 53877 NWRI National Water Research Institute 50,000.00 Membership 53878 Orange County Sanitation District 563,358.51 Payroll EFT Reimbursement 53879 Palnewebber Incorporated 39,490.68 COP Remarketing Agreement 53880 Southern Calif Coastal Water Research 313,000.00 Joint Powers Agreement Member Contribution 53881 Southern California Edison 86,920.78 Power 53882 SCAP 48,000.00 Membership 53883 Woodruff, Spradlin & Smart 130,552.98 Legal Services MO 7-26-95 53884 APTUS&C 244.00 Membership (Assoc. of Public Treasurers of United States and Canada) 53885 American Telephone & Telegraph Corp. 219.80 Telephone Service 53886 AT&T Wireless -TITAN 191.21 Cellular Phones & Accessories 53887 Court Order 626.20 Wage Garnishment 53888 Court Order 150.00 Wage Garnishment 53889 Communications Performance Group, Inc. 4,200.00 Professional Services -Safety Prequalificatlon Package 53890 Components Center 269.44 Electrical Parts & Supplies 53891 Consumers Pipe & Supply Co. 149.57 Plumbing Supplies 53892 Court Trustee 69.12 Wage Garnishment 53893 CAPIO 175.00 Membership (Calif. Assoc. of Public Info. Offcls.) 53894 Drexelbrook c/o Ponton Industries 606.38 Instrument Supplies 53895 Employee Benefits Specialists, Inc. 7,943.20 Reimbursed Prepaid Employee Medical & Dependent Care 53896 Court Order 525.00 Wage Garnishment 53897 Fitch, Inc. 3,000.00 Series 2000 A & B Certificates of Participation Surveillance Fee 53898 Franchise Tax Board 100.00 Wage Garnishment 53899 High Impact Training 4,250.00 Forklift Operator Safety Training 53900 City of Huntington Beach 17,134.15 Water Use 53901 Internal Revenue Service 325.00 Wage Garnishment 53902 Intl. Union of Oper. Eng. AFL-CIO Local 501 3,316.14 Dues Deduction 53903 Irvine Ranch Water District 44.83 Water Use 53904 McMaster-Carr Supply Co. 346.68 Mechanical Parts, Supplies & Tools 53905 Midway Mfg & Machining Co. 3,299.00 Pump Parts & Repairs 53906 National Bond & Trust 2,148.34 U.S. Savings Bonds Payroll Deductions 53907 National Safety Council 1,646.51 On-Site Training -DOC 4 Student Class 53908 Operation Technology, Inc. 2,726.94 Software Maintenance 53909 OCEA 515.36 Dues Deduction 53910 Pacific Bell/WorldCom 15.59 Telephone Service 53911 Pacific Mechanical Supply 2,024.41 Plumbing Supplies Page 6 of 7 EXHIBIT B Warrant No. Vendor ~~~~~~~~~~~~~~~~ 53912 Court Order 53913 Court Order 53914 Peace Officers Council of CA 53915 PenValve 53916 PVF Sales, Inc. 53917 Radius Maps 53918 Sewer Equipment Company of America 53919 Shureluck Sales & Engineering 53920 Court Order 53921 Southern California Edison 53922 Strategic Diagnostics, Inc. 53923 Summit Steel 53924 SBC 53925 Thompson Industrial Supply, Inc. 53926 The Unisource Corporation 53927 United Way 53928 Verizon California 53929 3CMA (City-County Comm. & Mktg. Assoc.) 53930 Jennifer M. Cabral 53931 Ingrid G. Hellebrand 53932 Deirdre E. Hunter 53933 James W. Matte 53934 Mahin Talebl 53935 Jane H. Tran 53936 Arnold D. Purlsch, Ph.D., Inc. 53937 County Clerk 53938 Local Agency Formation Commission 53939 Gadco Material Handling Total Payroll Disbursements Payroll Disbursements 30212 -30311 Employee Paychecks 30312 • 30314 Interim Paychecks 30315 -30315 Interim Paycheck 30316 -30317 Interim Paychecks 86524 • 87014 Direct Deposit Statements Total Payroll Disbursements Wire Transfer Payments U.S. Bank Total Wire Transfer Payments Total Claims Paid 06/16/03 -06/30/03 Claims Paid From 06/16/03 to 06/30/03 Amount 40.00 296.00 1,512.00 202.12 48.39 750.00 771.49 18.90 721.50 29.58 431.05 17.89 1,265.46 323.90 142.71 305.00 6,910.83 550.00 156.59 109.37 202.06 546.50 680.88 685.88 3,086.00 43.00 1, 150.00 10, 138.81 $ 5,955,906.92 $ 147,937.19 $ 3,467.37 $ 730.23 $ 6,776.13 883,398.93 $ 1,042,309.85 $ 6,042.39 $ 6,042.39 $ 7 ,004,259.16 Description Wage Garnishment Wage Garnishment Dues Deduction Mechanical Parts & Supplies Mechanical Parts & Supplies Radius Map & Ownership Listings Telescope Mechanical Parts & Supplies Wage Garnishment Power Lab Parts & Supplies Metal Telephone Services Mechanical Parts & Supplies Stationery & Office Supplies Employee Contributions Telephone Services Communications Meeting Registration Meetingff raining Expense Reimbursement Meetingff raining Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Meeting/Training Expense Reimbursement Employee Medical Services Annexation Fee Annexation Fee (2) Mobile Hydraulic Cranes Biweekly Payroll 06/25/03 Reissue Stale Dated Checks Termination Paycheck Termination & Director's Paychecks Biweekly Payroll 06/25/03 June Interest Payment on Series 2000 A & B Certificates of Participation Page 7 of 7 ~ t-·.~.' EXHIBITS BOARD OF DIRECTORS Meeting Date To Bd. of Dir. 7/23/03 AGENDA REPORT Item Number I tem Number Orange County Sanitation District FROM: David Ludwin, Director of Engineering Originator: Bob Chenowith, Senior Engineering Associate SUBJECT: PROPOSED ANNEXATION NO . OCSD-30 -SELMAN ANNEXATION GENERAL MANAGER'S RECOMMENDATION (1) Receive and file petition requesting annexation of 2.77 acres to Orange County Sanitation District (OCSD) in the vicinity of Foothill Blvd. and Skyline Drive in an unincorporated area of Orange County; and (2) Adopt Resolution No. OCSD 03-15, authorizing initiation of proceedings to annex said territory to OCSD (Prop osed Annex ation No. OCSD-30 -Selman Annexation). SUMMARY 9(a) • OCSD received a request from Jack Selman and Timothy Metzger to annex 2.77 acres to OCSD . This annexation contains two parcels, Assessor Parcel Nos. 502- 371-02 and 502-361 -07 annex ing together. • The two parcels will not be annex ed to the City of Orange (City). Both property owners will share in the cost to build an eight-inch sewer and dedicate it to the OCSD. OCSD will do the inspection on this new sewer. • Jack Selman will build a three bedroom home and has alread y paid th ere capital facilities connection charges to OCSD. Metzger will pay their fees to OCSD once the home is constructed . PROJECT/CONTRACT COST SUMMARY This annexation is in accordance with the terms of the negotiated agreement with the County of Orange regarding A.B.8 Ta x Exchange for annex ing properties . The Board of Directors approved this action and it became effective March 14 , 1989. Under th is Ta x Exchange, OCSD does not receive a percentage of the basic levy, and instead, collects a higher annexation fee. The fee of $14,896.00 includes the following: LAFCO Processing Fee OCSD Processing Fee State Board of Equalization Processing Fee Revenue Area 7 Study fee CA Environmental Quality Act Filing Fee Selman sewer connection fee (3 bedrooms) OCSD Annexation Acreage Fee ( 2.77 acres) TOTAL ANNEXATION FEE $ 1, 150.00 500.00 350.00 277.00 43.00 1,820.00 $10.756.00 $14,896.00 PRIOR COMMITTEE/BOARD ACTIONS NIA BUDGET IMPACT D This item has been budgeted . (Line item: ) D This item has been budgeted, but there are insufficient funds . D This item has not been budgeted . [gj Not applicable (information item) ADDITIONAL INFORMATION NIA ALTERNATIVES NIA CEQA FINDINGS Notice of Ex emption will be filed . ATTACHMENTS 1 . Ex hibit A Legal Descript ion 2. Ex hibit B Map RLC:sa G :\wp.dta\age nda\Board Agenda Reports\2003 Board Agenda Reports\0703\l tem 9(a).Selman Annexation.doc Re111sed: 8120/01 Page 2 \ ~ ti 1 . 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40. 41 42 43 44 45 SHEETl OF2 EXHIBIT'A' OCSD-30 SELMAN ANNEXATION NO. DA 03-06 TO THE ORANGE COUNTY SANITATION DIS1RICT All of Lots 19, 20 and 25 and a portion of Lot X of Tract No. 670, in the County of Orange, State of California, as said Lots are shown on a map recorded in Book 20 Pages 40 and 41 of Miscellaneous Maps, Records of said County described as follows: Beginning at an angle point in the existing boundary line of Orange County Sanitation District; said angle point being the easterly terminus of that certain course described as ''North 78°54'45" East 53.08 feet" in "Annexation No. 84-Chou Annexation to Orange County Sanitation District No. 7" as recorded in Book 13138 Page 948 Official Records of said County, said point also being a point on the centerline of Lot X, now known as Foothill Blvd., 40.00 feet wide, as shown on said Tract Map, a tie from said point bears South 65°18'23" West 2700.43 feet from Orange County Surveyor's Horizontal Control Station GPS No. 3255, having a coordinate value (U.S. survey foot) of North 2224064.292 and East 60984 77.186, based upon the California Coordinate System (CCS83), Zone VI, 1983 NAD (1991.35 epoch O.C.S. GPS adjustment) as said GPS point is shown on Parcel Map No. 98-01 recorded in Book 313 Pages 33 and 34 of Parcel Map Books, Records of said County; thence along said existing boundary line and said centerline South 78°54'50" West 53.08 feet; thence continuing along said existing boundary line and said centerline, North 85°30' 10" West 88.00 feet to the northwesterly comer of said Annexation; Thence leaving said existing boundary line and continuing along said centerline the following courses: North 55°45'20" West 57.00 feet, North 28°56'30" West 205.00 feet, North 51°40'30" West 48.00 feet, South 84°47"40" West 67.00 feet, South 54°39'50" West 260.00 feet, North 74°36'40" West 37.00 feet, North 52°13'00" East 195.00 feet, 1 2 3 4 5 6 1 g 9. IQ 11 12 13 14 15 16 17 18 J9 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 EXlllBIT'A' OCSD-30 SELMAN ANNEXATION NO. DA 03-06 TO THE ORANGE COUNTY SANITATION DlSTRICT North 74°53'00" West 37.00 feet, North 52°54' 1 O" East 130.00 feet, North 78°17'30" East 129.00 feet, South 68°20'30" East 89.00 feet, South 58°28'00" East 146.00 feet, South 88°48'50" East 68.00 feet, North 73°54'00" East 147.34 feet, SHEET20F2 to a point on the northwesterly prolongation of the easterly line of said Lot 19; thence leaving said centerline along said prolongation and said easterly line and along tll~ southeasterly prolongation of said easterly line South 16°06'00" East 227.08 feet t<'.) a point on said centerline; thence along said centerline South 78°54'50" West 193.35 feet to the point of beginning. The above-described land contains 2. 77 Acres, more or less. Attached and made a part hereof is a map, designated as Exhibit 'B PREPARED BY: //~a-vC,44~ G. BART STRYKER RCE 13195 DATUM STATEMENT: Coordinates shown are based on the California System (CCS83), Zone VI, 1983 Epoch OCS Adjustment). All distances shown are ground. To obtain grid distance multiply ground distances by 0.99998559. TIDS PROPOSAL DOES MEET THE APPROVAL OF THE ORANGE COUNTY SURVEYOR'S OFFICE DATEDTIIlS Z~TH DAYOF m"'y 200-3 Michael K. Sullivan, Deputy County surveyor L.S. 6254, Expiration Date 06-30-06 1 8 LEGEND '« «< ANNEXATION BOUNDARY -------EXISTING OCSD BOUNDARY PER: ANNEXATION No. 84-CHOU ANNEXA110N RE:CORO PF:R ADJOINING ANN£XA nON APN No.'s 502-361-l; 502-361-2; 502-371-1 DA TUM STA TM£NT COORDINATES SHOKN ARE BASED ON THE CALJFORMA SYSIDI {CCSBJ), ZONE \11, 1983 HAD, (1991.JS EPOCH OCS ADJJS1MENT). ALL DISTANCES SHOK-H ARE GROUND. TO OOTAIN GRID DISTANCE MUL11PlY GROUND DISTANCES BY 0.99998559. THIS PROPOSAL DOES l.l(f."T TH£ APPROVAL or "!J!~~R:-sr ~ ~~~~~~ 20C3 ~~ef(e- Michael K. Sullivan ·Deputy County Surveyor L.s. 6254, Expiration Date 06-30-06 0 -.. SHEET I Of I EXHIBIT'B' OCSD-JO SELMAN ANN£XA TION NO. DA 03-06 TO THE ORANG£ COUNTY SANITATION DISTRICT PREPARED BY:. STRYKER ENGfNEERfNG ClWl. £HCINWlttlG AND Pl.ANNING 1450 NORTH TUSTIN Al{"N(J£, SUIT£ 200 SANTA ANA, CA 92705 (714) 954-04JJ Jf(3aJ,~~ G. BART STRYl<£R Rec 1J19s nY UNE LOT 19 AND ANO ITS NW'L Y 8t S£'l Y PROl..ONGA TIONS It) _,, _,,"" '\\t) 7,1.C'.9: (..c:fS r-.. r "" ....-GPS 6544 ,.J v . 2 ttl -_,, £: 609tu71.188 ~&~-CAUf'ORHIA COORIXHATE SYSTEM'(CCSSJ). 'ffo)..-Z0H£ \t, 1983 HAD (1991.35 EPOCH O.C.S. _, _.... GPS AO..VSJMEHT) AHO AS SHOllN ON .-' / Pt.I 98-181 P/.18 JIJ/JJ.J4 --Al7,.,.,,. ---~-~qo-,,. .CL FOOIH/U. SI.Ill. / AND Cl LOT 'X' PER lRACT 670 MM 20/40-41 ANNEXATT, .. " " I • 5"( sJ.08°) (N78'54 4 _, I /' ' SCALE 1"=100' Q 100' =-~---I »:I I ( ANNEXATION 1 ',, No. 84-CHOU ANNEXATIOH: ', TO COUNTY SANITAnON 1 , DIS'IRtCT NO. 7 : ', OR 131.38/948 I ' I ',,,__ : ....... -........... _~ : 1, BOARD OF DIRECTORS Meeting Date To Bel. of Dir. 7/23/03 AGENDA REPORT Item Number Item Number Orange County Sanitation Distr ict FROM: David Ludwin, Director of Engineering Originator: Bob Chenowith, Senior Engineering Associate SUBJECT: PROPOSED ANNEXATION NO . OCSD-31 -MATIASEVICH ANNEXATION GENERAL MANAGER'S RECOMMENDATION 9(b) (1) Receive and file petition requesting annexation of 1 .3 0 acres to Orange County Sanitation District (OCSD) in the vicinity of Orange Park Blvd . and Meads Ave . in an unincorporated area of Orange County ; and (2) Adopt Resolution No. OCSD 03-16, authorizing initiation of proceedings to annex said territory to OCSD (Proposed Annexation No . OCSD-31 -Matiasevich Annexa tion). SUMMARY • OCSD received a request from John Matiasevich to annex 1 .3 0 acres to OCSD. This parcel will be connected to a new eight-inch (8 ") City of Orange (City) sewer on Meads Avenue. • This parcel is annexed to the City. The property owner will bui ld a three bedroom home with a one bedroom guest house on the property. • OCSD has collected the sewer capacity fe es for both homes on the property. The property owner will pay the City of Orange for lateral insp e ction and any other fe es associated with this connection. PROJECT/CONTRACT COST SUMMARY This annexa tion is in accordance with the terms of the negotiated agreement with the County of Orange regarding A.B.8 Tax Ex change for annexing properties . The Board of Directors approved this action and it became effective March 14, 1989 . Under this Tax Exc hange, OCSD does not receive a percentage of the basic levy, and instead, collects a higher annexation fee. The fee of $10,040.90 includes the following : LAFCO Processing Fee OCSD Processing Fee State Board of Equalization Processing Fee CA Environmental Quality Act Filing Fee OCSD sewer capacity fee (3) bedroom home OCSD sewer capacity fee (1) bedroom guest house OCSD Annex ation Acreage Fee (1 .30 acres) TOTAL ANNEXATION FEE $ 1,150 .00 500.00 35 0 .0 0 43.00 1,820.00 1 ,130 .00 $ 5.047.90 $10 ,040.90 PRIOR COMMITTEE/BOARD ACTIONS N/A BUDGET IMPACT D This item has been budgeted . (Line item: ) D This item has been budgeted , but there are insufficient funds . D Th is item has not been budgeted . IZ! Not applicable (information item) ADDITIONAL INFORMATION N/A ALTERNATIVES N/A CEQA FINDINGS Notice of Exemption will be filed . ATTACHMENTS 1. Ex hib it A Legal Description 2. Ex hib it B Map RLC :sa G :\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\l tem 9(b).Maliasevi ch Annexation.d oc Revised : 6120/01 Page 2 ' 1 2 3 4 5 6 7 8 9 10 11 12 . 13 14 15 16 17 18 19 20 21 22 23 24 25 26 EXHIBIT "A" OCSD-31 Matiasevich Annexation No. DA 03-16 to the Orange County Sanitation District That portion of land situated in the unincorporated territory of the County of Orange, State of California, being a portion of Lot 56, a portion of Lot A (Orange Park Boulevard) and a portion of Lot B (Meads Avenue) of Tract No. 918, as shown on a map thereof filed in Book 28, Pages 41through43, inclusive, of Miscellaneous Maps, in the Office of the County Recorder of said County, more particularly described as follows: Commencing at the Orange County Horizontal Control Station OPS No. 3224Rl, having a coordinate value (U.S. Survey foot) of North 2238822.284 and East 6096139.547 based upon the California Coordinate System (CCS 83), Zone VI, 1983 NAD (1991.35 epoch OCS OPS Adjustment) as said OPS No. 32244Rl is shown on the Monument Record for OPS No. 3224Rl on file in the Office of the Orange County Surveyor; Thence, South 00°16'24" West, 574.40 feet to a point in the existing boundary of the Orange Coun Sanitation District (OCSD) as established by "Annexation No. 66 (Tract No. 9687)" to the County Sanitation District No. 7, said point being distant North 00°16'24''East, 115.60 feet, along said district boundary from the southwest comer of said "Annexation No. 66", said point also being a point on the centerline of Orange Park Boulevard, 80.00 feet wide, as shown on said annexation, and the Point of Beginning; Thence, along said existing district boundary and said centerline South 00°16'24"West, 115.60 feet to said southwest comer of said "Annexation No. 66"; Thence, leaving said centerline of Orange Park Boulevard and continuing along the existing district boundary (OCSD) per "Annexation No. 66" and "Annexation No. 46" the following two (2) courses; South 89°43'36" East, 40.00 feet; Thence, South 00°16'24" West, 172.25 feet to a point in that certain course described as "N00°00' 40''W 1190.00'" in the East line of said "Annexation No. 46", said point being distant -1- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 EXHIBIT "A" OCSD-31 Matiasevich Annexation No. DA 03-16 to the Orange County Sanitation District South 00°16'24" West, 172.25 feet from the northwest comer of "Annexation No. 46"; Thence, leaving said existing district boundary (OCSD) in a direct line, at a right angle from said las mentioned course South 89°43'36" West, 40.00 feet to the most southerly comer of the land described in a deed to Mark Sapowith, recorded August 7, 2001 as Instrument No. 20010540039 of Official Records of said County, said point being also the centerline intersection of Orange Park Boulevard, 80.00 feet wide, and Meads Avenue, 50.00 feet wide, as shown on said Tract No. 918; Thence, leaving the centerline of Orange Park Boulevard, continuing along the centerline of Meads Avenue and the southwesterly line of the parcel as described in said aforementioned deed, North 49°52' 56" West, 449.27 feet to the northwest comer of said parcel, said point being distant South 49°52'56" East, 5.32 feet from the northwesterly terminus of that certain course shown as "N50°10'W 454.59"' on said Tract No. 918; Thence, easterly along the North line of the land described in said deed South 89°43'36" East, 344.94 feet to the Point of Beginning; 18 The above-described parcel of land contains l.30 acres, more or less. 19 20 21 All as shown on Exhibit "B" attached hereto and by this reference, made a part thereof. 22 23 24 Unless otherwise noted, all distances are ground. To obtain grid distances, multiply the ground distances 25 by 0.99996999. 26 -2- EXHIBIT "A" 1 OCSD-31 Matiasevich Annexation No. DA 03-16 2 to the Orange County Sanitation District 3 4 5 This document was prepared by me or 6 under my direction and supervision. 7 9 10 11 Michael K. Sullivan, L.S. 6254 12 My license expires 6-30-06 13 14 15 16 This document does meet the approval of 17 the Orange County Surveyor's Office. 18 John Canas, County Surveyor ,,.,, 19 Dated this//) day of ~ fJ LY , 2003 20 21 22 Michael K. Sullivan, Deputy County Surveyor 23 L.S. 6254, My license expires 6-30-06 -3- EXHIBIT "B" OCSD-31 MATIASEVICH ANNEXATION No. DA 03-16 TO THE ORANGE COUNTY SANITATION DISTRICT POC I:-:::. GPS NO, 3224RI N 2238822. 284 -..--.. ...._ "'-{:• QI: N~ ~ crt; ................... , ~ "-, •• ·.·~:· ·.·~·.·;_:.! t, ·. ~ ~ ..;:;: $ ii! '~ ' • .... ~ > ~ • ; m • t-en ,. "--. .... ·~"-... :.... ':~·· :::G :z: ~I ~. !JC / "" . " ·:~"' ":l·., ' c "' ' ~ ~ ~ ! / ""' ~ t ~ ~ u;;: / .. g 8 ~~ OF " •• '. N LINE INST. No. • 111 !i! l&IU lo SB9°4:3G•E 40.00' ' -._'<'·"''' S89''3'3G'E 3'•.9•' ~ ~~J ---. . ,--~~) 100' O' 50' 100' hl!!!!!liii1!5=1iiil!!!!!!!lii' -·· GRAPHIC SCALE :l:t; ORANGE ·-IC crt-crcn ....,_ me LEGEND -SHEET 1 OF I SURVEYOR'S STATEMENT THIS PROPOSAL WAS PREPARED BY ME OR UNDER MY DIRECTIOJ:z. ~ Ms"4 ""r. R's .. MICHAEL K. SU1.LIVAN, L.S. 6254 MY LICENSE EXPIRES 613012006 COUNlY SURVEYOR'S STATEMENT THIS PRflPOSAL DOES KET THE APRDVAL OF THE ~~~ge T~~N!~ ~Y.RVE~~s JFF ~c;.._,. 2003. JOHN CANAS, COUNTY SURVEYOR Bf...:4/*£/e7 ~ BY: MICHAEL K. SULLIVAN, DEPUTY COUNTY SURVEYOR L.S. 6254, MY LICENSE EXPIRES 6/30/2006 I I RECORD PER ADJOINING ANNEXATION UNLESS OTHERWISE NOTED. All DISTANCES ON THIS MAP ARE GROUND AND ARE BASED UPON THE CALIFORNIA COORDINATE SYSTEM ICCSBJl, ZONE VI. 1983 NAO 11991.35 EPOCH OCS GPS ADJUSTMENT l. TO 08TAIN GRID DISTANCE. t.IJL TJPL Y GROUND DISTANCE BY D.99996999 NOTES: A.P.N. 379-411-06 THIS PARCEL CF LAND CONTAINS 1. lO ACRES. MORE OR LESS. \\ \\ \\ ANNEXATION BOUNDARY EXISTING ORANGE COUNTY SANITATION DISTRICT 10.c.s.o.) BOUNDARY. DRAFT MINUTES OF STEERING COMMITTEE MEETING Wednesday, June 25, 2003 A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, June 25, 2003 at 5 p.m., in the District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: STEERING COMMITTEE MEMBERS: Directors Present: Shirley McCracken, Chair Brian Donahue, Chairman, PDC Committee Jim Silva, County Supervisor Norm Eckenrode, Past Board Chair Directors Absent: Steve Anderson, Vice Chair Brian Brady, Chairman, FAHR Committee Jim Ferryman, Chairman, OMTS Committee (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS OTHERS PRESENT: Thomas Nixon, General Counsel Don Hughes Peer Swan Dean Albright Ryal Wheeler STAFF PRESENT: Blake Anderson, General Manager Bob Ghirelli, Director of Technical Services Carol Beekman, Communications Services Manager Jean Tappan, Committee Secretary Dean Albright commented that the 301 (h) waiver and secondary treatment go hand in hand and that the directors should take care of the business to complete secondary treatment programs now. (4) RECEIVE, FILE AND APPROVE MINUTES OF PREVIOUS MEETING The minutes of the May 28, 2003 Steering Committee meeting were approved as drafted. (5) REPORT OF THE COMMITTEE CHAIR Committee Chair Shirley McCracken provided an update on legislation of interest to the District, including federal funding support for secondary treatment; ACA 10 -Stormwater Fee Exemption from Proposition 218 requirements; AB 1427, re conducting a study on the feasibility of a statewide policy for biosolids management and AB 496, a bill that would establish the Santa Ana River Conservancy. Minutes of the Steering Committee Page2 June 25, 2003 She announced that reservations for CASA are due July 9. She also reminded the members that attendance and reimbursement for expenses for offsite meetings must have prior approval by the Chair or the Board. Blake Anderson was asked to explain the logistics for tonight's Board meeting. He indicated that the process would be similar to the meeting on secondary treatment last July. He reported on community input regarding the user fee ordinance and said that Reed Royalty of the Orange County Taxpayers Association said that as long as it met the test of reasonableness, he would not protest it. Staff has prepared notebooks for each city that includes all of the comments/correspondences/calls received on the fee increase. Mr. Anderson announced that there will be a ribbon-cutting ceremony for the initial portion of the GWRS microfiltration plant on July 14 at 4 p.m. at the Water District. (6) REPORT OF THE GENERAL MANAGER General Manager Blake Anderson provided updates on the following: A. NWRI Blue Ribbon Advisory Panel for Secondary Treatment. NWRI has agreed to form this panel to verify our move to secondary treatment asking independent national experts and the public here in Orange County. Bob Ghirelli, Director of Technical Services, explained the makeup of the 15-member panel. We have been meeting with Ron Linsky, Director of NWRI, in an effort to develop a charter focusing on our progress, looking at the technical operations, and considering possible R&D projects. The NWRI Board of Directors approved a $25,000 budget for the first year. There will be no cost to the District, other than staff time. The first meeting is scheduled for September 29-30 and it will be open to the public. A report will be prepared at the end of the meeting. Mr. Linsky will be briefing the OMTS Committee at its next meeting. B. SAWPA-OCSD Mediation Process. Blake Anderson reported that Joe Grindstaff, SAWPA's General Manager, and he have been meeting with Gary Hunt of California Strategies to mediate the issues between the two agencies. The initial meeting clarified the issues. A process was agreed to that envisions three meetings. Mr. Anderson outlined the seven major issues. Mr. Hunt indicated that he will be meeting with the SAW PA board at its request. The District will also try to schedule a meeting to introduce Mr. Hunt to a sub-committee of the Steering Committee to discuss his role and the process. A biography will be requested. The members of the sub-committee are Chair McCracken, Vice Chair Anderson, and Supervisor Silva. C. Arrowhead Ill-January 9-11, 2004 Mr. Anderson announced the third Orange County Leadership Symposium that is scheduled for the Lake Arrowhead Conference Center. The executive committee is developing a budget and anticipates a 30 percent reduction from last year's cost. A new facilitator will be hired. (7) REPORT OF GENERAL COUNSEL General Counsel Tom Nixon reported that on June 13, the Court found for the Sanitation and Water Districts in the Pall Corp. vs. OCSD/OCWD lawsuit on the bid protest. Costs will be sought but attorneys' fees are not allowed. ; ., Minutes of the Steering Committee Page3 June 25, 2003 (8) DISCUSSION ITEMS (Items A-B) A. The Agenda Items scheduled to be reviewed by the Board's working committees in July were reviewed. B. The agenda items scheduled to be presented to the Board at tonight's meeting were reviewed. A new format has been introduced for the agenda dividing committee reports into consent and non-consent items. (9) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANV There was no other business discussed. (10) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING There were none. (11) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND/OR STAFF REPORT There were none. (12) CONSIDERATION OF UPCOMING MEETINGS The next Steering Committee meeting is scheduled for Wednesday, July 23, 2003 at 5 p.m. The next regularly scheduled Board Meeting is Wednesday, July 23, 2003 at 7 p.m. (13) CLOSED SESSION The Committee convened at 5:57 p.m. in Closed Session, pursuant to Section 54957 .6, to discuss the General Manager's Annual Performance Evaluation and Compensation. Minutes of the Closed Session are on file with the Board Secretary. Confidential Minutes of the Closed Session held by the Steering Committee have been prepared in accordance with Government Code Section 54957 .2, and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. A report of the recommended actions will be publicly reported at the time the approved actions become final. At 6:55 p.m., the Committee reconvened in regular session. Minutes of the Steering Committee Page4 June 25, 2003 (14) ADJOURNMENT The Chair declared the meeting adjourned at 6:55 p.m. J a Tappan ring Committee Secretary G:\wp.dta\agenda\Steering Committee\03UUM062503 SC Minutes.doc -,- t t 1 ) I 'I MINUTES OF THE OPERATIONS, MAINTENANCE AND TECHNICAL SERVICES COMMITTEE Orange County Sanitation District Wednesday, July 2, 2003 -4 P.M. A meeting of the Operations, Maintenance and Technical Services Committee of the Orange County Sanitation District was held on July 2, 2003, in the District's Administrative Office. (1) ROLL CALL The roll was called and a quorum declared present, as follows: OMTS Directors Present: James M. Ferryman, Chair Anna Piercy, Vice Chair Carolyn Cavecche Debbie Cook Tony Kawashima Tod Ridgeway Don Bankhead Shirley McCracken, Board Chair Steve Anderson, Board Vice Chair OMTS Directors Absent: Paul Walker Staff Present: Blake Anderson, General Manager Bob Ghirelli, Director of Technical Services Bob Ooten, Director of Operations & Maintenance Patrick Miles, Director of Information Technology Carol Beekman, Communications Manager Mike Moore Nick Arhontes Mark Esquer Jim Herberg Jim Burrer Mark Kawamoto Adriana Renescu Pat Johnson, Acting Committee Secretary Others: Ron Linsky Gerhardt VanDrie Kevin Faulconer Randy Fuhrman Charles Egigian Nichols Ruth Roxburgh (CH2M Hill) John Shaffer (EEC) (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS There were no public comments. Minutes of the Operations, Maintenance and Technical Services Committee Page2 July 2, 2003 (4) REPORT OF THE COMMITTEE CHAIR The Committee Chair had no report. (5) REPORT OF THE GENERAL MANAGER The General Manager had no report. Ron Linsky of the National Water Research Institute (NWRI) advised the Directors of a proposal to formulate an external blue-ribbon panel to offer suggestions during the development of full secondary issues and to periodically review the District's progress as it moves forward to full secondary treatment. NWRI would fully underwrite this panel through the lnstitute's research budget. In 2002, NWRI hosted and facilitated a series of six meetings attended by members of the Board and the public over a six-month period to clarify and define issues that may not have been clear during the public meetings and Board sessions and to increase understanding of what the District was intending to do. A list of candidates for the proposed panel was distributed to the Directors that includes professional and technical. (6) CONSENT CALENDAR ITEMS a. The minutes of the June 4, 2003 Operations, Maintenance and Technical Services Committee meeting were approved as drafted and ordered filed. b. OMTS03-29 Receive and file Technical Services Monthly Report, which focuses on regulatory, biosolids and performance measures for the Technical Services Department. c. OMTS03-30 Receive and file Operations & Maintenance Monthly Report, which focuses on compliance, financial data and performance measures for the Operations and Maintenance Department. d. OMTS03-31 Receive and file Information technology Quarterly Report, which focuses Motion: on current performance trends and key technology business applications. Moved, seconded and duly carried to approve the recommended actions for items specified as 6(a) through (d) under Consent Calendar. (7) ACTION ITEMS a. OMTS03-32 Receive and file Draft Long Term Biosolids Master Plan, Job No. J-40-7, dated June 2003, prepared by CH2M Hill, Inc. Minutes of the Operations, Maintenance and Technical Services Committee Page3 July 2, 2003 Motion: Mike Moore introduced the Long Term Biosolids Master Plan and provided information on biosolids production. Jim Burrer, Senior Engineer, provided an overview of the master plan. Kevin Faulconer of Porter-Novelli provided an assessment of public attitudes and knowledge on biosolids management. Moved, seconded and duly carried to recommend approval to the Board of Directors. b. OMTS03-33 Recommend to the Board of Directors to: Motion: (1) Receive and file Phase I FOG Control Study Report Executive Summary; and, (2) Approve a sole source Consultant Services Agreement with Environmental Engineering & Contracting, Inc., to conduct Phase II of the FOG Control Study, for an amount not to exceed $300,000; and, (3) Authorize the District to enter into agreements with the County of Orange and the co-permittees for funding of Phase 11 of the FOG Control Study, in a form approved by General Counsel. Mark Kawamoto, Engineer, provided a presentation on the results of the first phase of the Fats, Oils, and Grease Control (FOG) Program. A copy of the 300-page FOG Control Study was provided to the Directors, which the Regional Water Quality Control Board has expressed will very likely serve as a model for other Regions. Many agencies are already implementing recommendations contained within the report. OCSD's portion of the total cost for Phase II would be ten percent ($30,000), which has already been budgeted. Moved, seconded and duly carried to recommend approval to the Board of Directors. (8) INFORMATIONAL ITEMS a. OMTS03-34 Controlling Pollutants of Concern in Reclaimed Water This item was not considered. b. OMTS03-35 Ocean Outfall Bacteria Reduction Program Update Mark Esquer, Engineering Manager, provided an update on the bacteria reduction program that began August 2002. Minutes of the Operations, Maintenance and Technical Services Committee Page4 July 2, 2003 (9) REPORT OF DIRECTOR OF INFORMATION TECHNOLOGY The Director of Information Technology reported on the recent information technology system audit by TruSecure that was performed to ensure that OCSD has a secure environment that is relatively free from virus and free from hacker attack. The audit is complete and we have been given a clean bill of health. (10) REPORT OF DIRECTOR OF OPERATIONS AND MAINTENANCE The Director of Operations and Maintenance reported that additional low spots were found on the interplant gas pipeline in need of repair so as not to cause corrosion. In September 2003, O&M plans to ask the Committee and Board to ratify the change order for corrosion repairs estimated at $30,000. (11) REPORT OF DIRECTOR OF TECHNICAL SERVICES Bob Ghirelli, Director of Technical Services, reported that the Army Corps of Engineers has approached OCSD with a request to partner with them on a study of coastal issues in Orange County. The purpose of the study is to help obtain a better understanding of how the coastal oceans work and how pollutants are transported. The cost of the study is $3M and each partner would be required to pay one-half the cost. However, the Corps of Engineers will allow OCSD to use expenditures to date-the $5M spent on our off-shore Study in 2001 and the $2M that we spend annually on ocean monitoring -to cover our share, so no cash outlay would be required by the District. The Corps would have to submit their share of the cost by September 30 and would require OCSD to sign an agreement that will require approval by the Board of Directors in August. The agreement is currently under review by OCSD legal Counsel. Because no OMTS meeting is scheduled in August, this item will be taken directly to the Board. (12) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There were none. (13) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. (14) CONSIDERATION OF UPCOMING MEETING The next Operations, Maintenance and Technical Services Committee meeting is scheduled for September 3, 2003 at 5 p.m. (16) CLOSED SESSION There was no closed session. Minutes of the Operations, Maintenance and Technical Services Committee Pages July 2, 2003 (17) ADJOURNMENT The Chair declared the meeting adjourned at 5:30 p.m. Submitted by: Operations, Maintenance and Technical Services Acting Committee Secretary G:\wp.dta\agenda\OMTS\2003\0703\070203 OMTS Minutes.doc OMTS COMMITTEE Meeting Date T o Bel. of Dir. 07/02/03 07/23/03 AGENDA REPORT Item Number Item Number Orange County Sanitation District FROM: David Ludwin , Director of Engineering Originator: Jim Burror, Senior Engineer OMTS03-32 SUBJECT: LONG RANGE BIOSOLIDS MANAGEMENT PLAN, JOB NO. J-40-7 GENERAL MANAGER'S RECOMMENDATION Receive and file Draft Long Term Biosolids Master Plan , Job No. J-40-7, dated June 2003 , prepared by CH2M Hill , Inc. SUMMARY 12(b) • In September 2002, the Board of Directors authorized CH2MHill, Inc. to study the long range biosolids management options for the Orange County Sanitation District (District). • The scope of this study was to develop a plan for managing District's biosolids for the next 10 to 15 years. • Since the completion of the 1999 Strategic Plan , land application options for biosolids in California have become tenuous. Many of the District's present management options will no longer be viable due to new local ordinances; therefore , new options must be explored, and a new strategy must be developed. • The plan includes an analysis of potential markets for products derived from the District's biosolids , an analysis of treatment plant processes to reduce overall biosolids handling and treatment costs, and a long term impl ementation strategy. • A Biosolids Opinion Research Poll was conducted by NCG/Porte r Novelli in April and May 2003. Their conclus ions will be incorporated as background materials in the Long Range Biosolids Management Plan and also presented to the Board Committees. • During the next 4 to 5 months , OCSD staff will be soliciting in put from the Board Committees regarding potentially the far-reaching cost and policy impacts within the report though focused presentations and stakeholder workshops. • The final report and recommendations will be presented at the December 2003 Board meeting after a series of focused presentations to the Board Committees and the community. G :lwp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\lte m 12(b).Biosolids Master Pl an.doc Revised: 06/04/03 Page 1 PRIOR COMMITTEE/BOARD ACTIONS September 2002 Board: (1 ) Approve a budget amendment of $100 ,913; and (2) Approve Professional Services Agreement with CH2M Hill, Inc. for an amount not to exceed $490 ,913 . February 2003 Board : (1) Approve a budget amendment of $157,942.17; and (2) Approve Addendum No .1 to the Professional Services Agreement for an additional amount of $157 ,942 .17. PROJECT/CONTRACT COST SUMMARY No new authorization of expenditures is being requested at this time. See the attached Budget Information Table for more information . BUDGET IMPACT [8J This item has been budgeted. (Line item : Section 8, Page 124) D This item has be en budgeted, but there are insufficient funds . D This item has not been budgeted. D Not applicable (information item) No new authorization of expenditures is being requested at this time. A budget breakdown is included in the attached Budget Information Table for this project. ADDITIONAL INFORMATION A presentation will be given at the meeting and the Executive Summary from the Draft Long Term Biosolids Management Plan , Job No. J-40-7, dated June 2003, prepared by CH2M Hill, Inc. is attach ed for additional information. Also , an implementation schedule overview focu se d on the near term activities for implementing the long term plan is attached for additional information. A separate memorandum by the public relations firm NCG/Porter Novelli has been prepared to support the overall implementation a long term plan. They conducted a survey to understa nd th e public sentiment towards Biosolids . Their conclusions will be incorporated in the finding s of the long term plan and the executive summary of re searc h finding s from both focus groups and a public opinion telephone survey is attached for addition al information. ALTERNATIVES None G:\wp.dta\agenda\Boa rd Ag enda Repons\2003 Board Age nda Repons\0703\ltem 12(b).Blosollds Master Plan.doc Revised : 06./04/03 Page 2 , f CEQA FINDINGS None required at this time. CEQA documentation will be developed as part of the implementation of any selected biosolids management option, as necessary. ATTACHMENTS 1. Executive Summary from the Long Term Biosolids Master Plan, Job No. J-40-7, prepared by CH2M Hill, Inc. 2. Long Term Biosolids Master Plan -Implementation Plan Schedule Overview 3. Biosolids Opinion Research Summary Memorandum, June 17, 2003, prepared by Porter and Novelli JB:sa G:\wp.dta\agenda\OMTS\2003\0703\03-32.Biosolids Master Plan.doc G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 12(b).Blosolids Master Plan.doc Revised: 06/04/03 Page3 . ' Draft Long-Term Biosolids Master Plan Executive Summary The Orange County Sanitation District (the District) currently produces approximately 650 tons of digested and dewatered Class B biosolids per day. By the year 2020, biosolids production is projected to increase by about 30 percent. The District relies on land application of its Oass B biosolids in Kem and Kings Counties in California, and Class B biosolids land application at the Fort Mojave Indian Reservation in California, Nevada, and Arizona. Moreover, the District is committed to environmentally sound biosolids management practices that meet the stringent federal, state, and local regulatory requirements. Counties throughout California and Arizona have developed, or are in the process of developing, ordinances that severely restrict or ban the land application of Class B biosolids. Recently Kem and Kings Counties banned land application of Oass B biosolids. It has become clear that future requirements for managing biosolids will be more restrictive and costs will increase as current options are eliminated. The dynamic regulatory issues, land application ordinances and bans, and public perception challenges prompted the District to develop this Long-Term Biosolids Management Plan. The goal was to develop a sustainable, reliable, and economical program for long-term biosolids management. This Long-Term Biosolids Management Plan includes four major elements: 1. Identify long-term potential Southern California Class A biosolids products and product markets. 2. Identify the onsite and offsite facility options for manufacturing marketable products while optimizing the use of the District's facilities necessary in treating wastewater. 3. Develop a flexible implementation plan for positioning the District to be able participate in multiple markets. 4. Continue to beneficially reuse biosolids and maintain conformance with the National Biosolids Partnership (NBP) Code of Good Practice. Long-Term Biosolids Management Plan Development There is a wide range of products that can be developed from biosolids. The strategy for the District will be to focus its resources on developing an economical product for targeted sustainable markets. To develop and select the most sustainable biosolids management options, the consultant team utilized a business-model assessment. First, the long-term sustainable biosolids product markets were identified. Next, the steps necessary to manufacture suitable biosolids-based products for these markets were evaluated. The relationship between the top five long-term sustainable biosolids markets and products that can be generated for these markets is summarized as follows: • Horticulture -Blending and Bagging for Retail Outlets: Compost, dry pellets and granules, and organo-mineral fertilizer products. W052003003SCO/EXEC_SUMMARY _LW1232.DOC/031500006 DRAFT LONG-TERM BIOSOLIDS MASTER PLAN EXECUTIVE SUMMARY • Horticulture -Ornamental and Nurseries: Compost, dry pellets and granules, and organo-mineral fertilizer products. • Horticulture -District Member Cities and Agencies: Compost, dry pellets and granules, and organo-rnineral fertilizer products on municipal lands. • Direct Energy Production: Class B biosolids cake and dry pellets. • Silviculture -Shade Tree Programs: Compost or dry pellets and granules, and organo- mineral fertilizer products. Each market consumes several biosolids-based products, and most products can have multiple markets. For example, all five markets accept the dry pellets and granules. Next, the consultant team developed an economic model and performed an assessment of the 22 most important critical implementation factors, including potential odors, traffic impacts, public perception, product sustainability, and ease of implementation/ siting. These two parallel activities allowed for the true cost of each option to be assessed and compared. Based on this evaluation, the most viable biosolids product manufacturing processes are: 1. Composting 2. Heat Drying 3. Energy recovery 4. Organo-mineral fertilizer manufacturing This evaluation also determined that diversification of products, product markets, and marketing contracts, as well as the availability of failsafe backup options, are critical elements to protect the District from the effects of weakening markets and failed contracts. These elements are critical because each product market has associated weaknesses, and it will likely take time to develop a product for a new market, contracts with a company within that market, or both. Finally, the District needs to maintain its current land application capacity and options, including the Class A biosolids alkaline stabilization process at its farm in Kings County and other land application sites, for as long as it is feasible and economically sound, while this long-term plan is implemented. Recommendations and Costs The biosolids management program is designed to provide flexibility and allow the District to diversify products and manufacturing through participation in both District-owned and merchant facilities. The consultant team recommends diversification using the following approach, primarily to reduce financial risk: 1. Maintain at least three different product manufacturing options at any given time. 2. Optimize capital and operation and maintenance (O&M) costs at the District treatment plants as part of implementation of the long-term plan. 3. Limit maximum participation for any market to one-half of the total biosolids production. 4. Limit biosolids management contracts to a maximum of one-third of total biosolids production per merchant facility, and one-half per contractor (for contractors with multiple product manufacturing facilities). 5. Maximum capacity for each District-owned product manufacturing facility to be one-half of the total biosolids production. 6. Explore funding options for in-county facilities (private capital, District capital, or both). 7. Allocate up to 10 percent of biosolids for participation in emerging markets. W052003003SCO/EXEC_SUMMARY_LW1232.00C/031500006 2 DRAFT , t \ LONG-TERM BIOSOLIDS MASTER PLAN EXECUTIVE SUMMARY 8. Pursue Orange County based product manufacturing facilities and maximize the use of horticultural products within the District service area by member agencies and through developing public-private partnership. 9. Maintain capacity and options at the District's Central Valley Ranch. 10. Pursue failsafe backup options (landfilling, alternative daily cover [ADC) for landfills, and dedicated landfilling) to acquire a 100 percent contingency capacity. Table ES-1 presents a summary of the Plant Nos.1and2 onsite improvements, associated capital costs, and the year capacity is needed. With the current biosolids processes, Plant No. 1 dissolved air flotation thickener (DAFT) capacity will be reached in year 2013, digestion capacity will be reached in year 2013, and dewatering capacity will be reached in year 2007. With implementation of the proposed primary and WAS thickening improvements, the need for additional dewatering and digestion capacity will be postponed to year 2013 and beyond year 2020, respectively. For Plant No. 2, similarly, with the addition of new primary sludge and WAS thickening improvements, the existing digestion and dewatering capacity will be adequate through the year 2020 and beyond. TABLEES·1 Plants 1 and 2 Onsite Process Improvements and Expansion Onsite Biosolids Processing Facilities Plant 1 Onsite Biosolids Processing Facilities Primary Sludge Thickening (Centrifuge) WAS Thickening (GBT or Centrifuge) Digester Pretreatment (Ultrasound) Dewatering (Centrifuge) Plant 2 Onsite Biosolids Processing Facilities Primary Sludge Thickening (Centrifuge) WAS Thickening (GBT or Centrifuge) Digester Pretreatment (Ultrasound) Dewatering (Centrifuge) Notes: Year Capacity Needed 2007 2013 Note2 2013 2013 2011 Note2 Note 3 Capital Cost, Million $1 23.62 48.86 8.57 52.45 23.18 28.23 6.51 42.37 1The capital costs are for onsite process improvements only. The upgrade of existing digestion facilities will be as planned in the capital improvement program (CIP) and is not included here. 2The District is currently evaluating project delivery options for implementing ultrasound. 3 Plant No. 2 has adequate dewatering capacity through the year 2020. However, centrifuge dewatering will result in reduction of biosolids cake volume and reuse costs and should be considered for implementation. GBT = gravity belt thickener To optimize facilities sizing, pilot testing of thickening (primary sludge, WAS, and combined sludge) and dewatering are planned. For digesters, testing is planned to evaluate the impact of increase in digesters feed solids (due to improved thickening) on the digester mixing systems, heat exchangers, and ammonia concentration in the digesters and dewatering recycles. Because additional dewatering is needed at Plant No. 1 and similar centrifuge equipment is used for the thickening and dewatering, full-scale centrifuges will be used for testing. Upon completion of the thickening test, the centrifuges will be relocated to the Plant No. 1 dewatering building to provide the needed capacity and allow for evaluating the impact of the dryer biosolids cake on the cake pumping system and product manufacturing technologies. Testing for product manufacturing technologies will be conducted at the District's Central Valley Ranch and/or existing merchant facilities that use the processes under consideration. Using full-size equipment for thickening and dewatering will also provide sufficient biosolids for testing product-manufacturing technologies. W052003003SCO/EXEC_SUMMARY _LW1232.DOC/031500006 3 DRAFT LONG-TERM BIOSOLIDS MASTER PLAN EXECUTIVE SUMMARY It is anticipated that land application markets will continue to become less reliable due to public perception and political issues and may not be available in 3 to 5 years. The Biosolids Management Program Implementation Plan, therefore, focuses on more reliable Orange County and Southern California reuse markets through developing high-value products. Because implementation of District-owned in-county composting or heat-drying facilities could take 8 years or longer, the program includes activities to immediately begin obtaining new merchant facility contracts that would enable the District to participate in more stable biosolids reuse markets. The merchant facilities will bridge the gap between the phase-out of existing reuse contracts and the startup of future District-owned facilities. Core elements of the implementation program include: • Participate in sustainable reuse markets through manufacturing higher-value products such as compost, dry pellets and granules, organo-mineral fertilizers, and energy. • Develop in-county composting (i.e., Central-North County, Joint Composting with South Orange County Wastewater Authority [SOCWA], etc.). • Develop in-county thermal drying facilities (onsite or offsite). • Participate in merchant composting and organo-mineral product manufacturing facilities. • Pursue merchant energy production (co-combustion) to allow participation in non- cropping markets. • Explore benefits and use of emerging biosolids product manufacturing technologies such as drying with hot soil and energy fuels (i.e., char). • Maintain failsafe backup reuse capacity for land application of chemically stabilized biosolids (California Soils Products, Tule Ranch, etc.) and through reuse of biosolids products as ADC at landfills. • Obtain failsafe backup landfill capacity for biosolids landfilling (Orange County Integrated Waste Management Department [OC IWMD], Holloway Mines, etc.) Although the program has identified the need to add new thickening facilities, the digestion facilities identified in the validated capital improvement program (CIP) were eliminated. The capital cost of the program does not have a significant impact on the CIP resource allocation until Fiscal Year (FY) 2007 /2008. The major impacts occur when construction of District- owned heat-drying and/ or composting facilities is projected to be initiated, if these facilities are financed by the District. Merchant facilities are typically funded through management contract tipping fees. The District should also explore contract terms that provide funding for in-county facilities through private capital, District capital, or both. In the past 3 years, the tipping fees for biosolids land application have risen from $25 per wet ton (pwt) to $35 pwt, representing an increase of 40 percent. In the interim period, the tipping fee is expected to increase to $45 to $50 for Class A biosolids land application. The current biosolids cake solids concentration is in the range of 20 to 22 percent, resulting in a cost of $200 to $250 per dry ton (pdt) for Class A biosolids land application. The cost for manufacturing high-value products for sustainable markets is estimated at $55 to $70 pwt. With the implementation of the proposed onsite improvements, the cake solids concentration is expected to be in the range of 26 to 28 percent, resulting in a cost of $210 to $270 pdt for high-value products. This modest cost increase provides the District with diverse and reliable product markets and product manufacturing options, reduces financial risks, improves program reliability, and minimizes potential for future cost escalations. W052003003SCO/EXEC_SUMMARY _LW1232.DOC/031500006 4 DRAFT I t Master Plan Report and Near-term Board Actions OMTS overview presentation Review draft report with the public stakeholders PDC addendum presentation for interim RFP's Board award addenda for vendor proposals OMTS/PDC Update Presentations Receive and File Final L TBMP Report Interim Project Activities Integrated Waste Mgmt. Dept. (IWMD) Landfill Proposals IWMD Prima D Composting Proposal Implementation of IWMD Options, if accepted by IWMD Northern Central County Composting Proposal Interim vendor contract proposals Develop in plant pilot testing program Implementation of interim vendor contracts Current management options sunset 1.) Focused presentation on the biosolids market analysis. 2.) Focused presentation on the product technology review. LONG TERM BIOSOLIDS MASTER PLAN (L TBMP) IMPLEMENTATION PLAN Note2 Note3 Note4 3.) Focused presentation on the treatment plant model and results. 4.) Focused presentation on diversification, reuse policy, and costs. >>>>>>> >>>>>>> 1111111111111 >>>>>>> 2005-8 >>>>>>> >>>>>>> DATE: TO: FROM: RE: NCG 402 Wes t Broadway, Suite 2000 •San Diego, CA 92101 (619) 687-7000 •FAX (619) 687-7007 MEMORANDUM June 17, 2003 Carol Beekman Kevin Faulco ner Biosolids Opinion Research Summary Following is an executi ve s ummary of researc h findings to determine OCSD c ustom er attitudes t oward rec ycl ing bio s olids in Orange County. Thi s s ummary incorporates findings fro m focus groups and a public opinion telephone sur vey. Focus Groups Summary Four focus groups were condu c te d April 29 a nd 30, 2003 at the foc u s group facility of Di scovery Research Group in Irvin e, California. A ll four group s cons isted of vo te r s who had are hi gh propen sity voters . All gro up s consi s ted of a mix of politi cal party, age and gender. Three group s were compri sed of vo ter s w ho res id e throughout th e OCSD service dis tri c t (every c ity in the service di s u·ict was represented by at least one participant), whil e o ne group consisted of all No1th Irvi ne vo ter s . A ll four groups were r ecruited b y t elephone u sing a sc reenin g in strument des igned sp ecifi cal ly for th is s tud y. A total of 42 responde nts participated. Based o n the input from the se foc us groups, it can be concl ud ed that Orange County residents know ver y littl e about th e issue o f bi osolid s or bi oso lid s recycl in g. Mos t res idents are un fa miliar with th e te rm biosolids and are almost complete ly una war e of ho w th e county manages its biosolids. Upon learnin g a bout th e process of bioso li ds recycling and th e need to r ecycle biosoli ds within th e county, res id e nt s ar e likely to be open-minded abou t the techn o logy a nd s upp orti ve of the county taking responsibility for its was te. Resi de nts e nd or se effmts to recycle a nd be Jj eve recycli ng is something for whi c h Orange County res ide nts sho uld stri ve. Re sid e nt s can be expected to b e mo s t concerned a bo ut the safety iss ue of bi osolids recyclin g and wi ll seek sc ie ntifi c evi de nce, academic r esearc h and exampl es of places where th e technol ogy ha s been successful as a condition fo r approval. Among the three options presented for bi osolids rec yc Jjn g in the count y, residents w ill li kely favo r compos ting th e most because they view it as a natural an d e nvironm e nta l- fri e ndl y process. The heat-dry in g techno logy s hould also be we ll accep ted though th ere w ill be concern s about what is being emitted from the sm okestack. Resid e nt s should ln•in e, CA • Sacrame11ro, CA •San Diego, CA general! y be supportive of a composting center located at or near a large park like Irvine Regional or the Great Park. The "Not in My Backyard" effect is likely to occur among those residents living close to where a biosolids recycling facility could be located, but it appears that a strong, proactive education and information campaign can ease the fears and concerns of most residents about the issues of safety, odor, trucking impacts and air quality. The messages in support of biosolids recycling that resonate most strongly with residents are those that focus on and adequately address the safety concerns. Additionally, residents should find compelling the argument that biosolids recycling has been taldng place in Orange County for the last seventy-five years and recycled biosolids have been used at the Anaheim Stadium field. Not surprisingly, any arguments against biosolids recycling that relate to the potential dangers of biosolids to human health will instill fear in some residents and reinforce their doubts and concerns about the potential harmful effects of recycling human waste. However, again it appears that a strong education campaign can greatly diminish the impact of this negative information and make residents less susceptible to strong emotional reactions to these types of stories. The most credible sources of information on biosolids recycling among Orange County residents are academic researchers and scientists from prestigious universities, including UC Irvine. Residents will place the most trust in those individuals, groups or organizations that have no vested interest in the outcome of the research or findings on the issue of biosolids recycling. Thus, in addition to academic researchers and scientists, state and federal agencies will have credibility with participants, as will the Orange County Health Care Agency, water quality and soils engineers and local farmers. Telephone Survey Summary Voter Consumer Research conducted a survey of 400 registered voters in the Orange County Sanitation District on May 19 to 22, 2003 regarding their awareness of and attitudes toward recycling of biosolids in Orange County, CA. The survey included an over-sample of 100 registered voters in the zip codes immediately adjacent to the Great Park in Anaheim, CA. The margin of error for the results is ±.419%. Key Findings -'1 Unlike California as a whole, Orange County voters are optimistic, with 50% believe things are going in the right direction. Like the rest of California, Orange County voters rank education as their most important issue. Traffic congestion and the economy are close seconds. -'1 The Orange County Sanitation District (OCSD) enjoys high favorability ratings at 59%. This is topped only by the Orange County Water District, with a total favorability rating of 61. -'1 Orange County voters have little awareness of the biosolids recycling issue (22% ). However, there is strong support (79%) for the concept of recycling biosolids as well as strong support (78%) for the OSCD recycling policy. -'1 Forty nine percent ( 49%) support composting as an option for recycling biosolids, although strong support is weak (12% very positive reaction). Use of biosolids for compost and local use of the compost were important to respondents' positive reaction. i Cost and possible locations for a composting facility were important to respondents' negative reactions. '1 Fifty six percent (56%) support heat drying as an option for recycling biosolids; again strong support is weak (13% very positive reaction). Recycling and use as fertilizer are important to respondents' positive reaction. Cost is an important driver in negative reactions; location does not appear to be an issue for the heat drying option. '1 In an initial ballot, heat drying was more popular than composting (44% vs 31 %). However, when presented with the potential negatives of each process, composting wins over heat drying (50% vs 33% ). This indicates that opinions are weakly formed and are therefore malleable. It will be necessary to generate support for the option the OCSD selects. '1 Cost and environment are the top concerns. Younger voters (under 45 years of age) are more attuned to the environment and recycling messages. There were no significant differences in the attitudes between the area over-sampled and the main sample. '1 Based on majority support for each option, and the weak strong opposition to each option, it will be possible to implement either option that the Orange County Sanitation District decides to select. However, getting out ahead to shape the debate will be important. That is, the data suggest that it will be as easy to generate support for one option as the other. '1 The top supporting messages are "research shows it is safe to use biosolids for fertilizer or compost" and "it is important that Orange County take care of its own biosolids." The top opposition messages are the need for a precautionary, go slow approach and concerns about odors. In general the slate of supporting messages is stronger over all than the slate of opposition messages. '1 Federal CDC and EPA as well as local university researchers have the most credibility as spokespersons/authorities on the issue of recycling biosolids. OMTS COMMITTEE Meeting Date To Bel . of Dir. 7-2-03 07/23/03 AGENDA REPORT Item Number Item Number OMTS03 -33 12(c) Orange County Sanitation District FROM : Robert P. Ghirelli, D.Env., Director of Technical Services Originators: Adriana Renescu, Eng ineering Supervisor Mark Kawamoto, Engineer SUBJECT: FATS, O ILS, AND GREASE (FOG) CONTROL PROGRAM GENERAL MANAGER'S RECOMMENDATION (1) Receive and file the Phase I FOG Control Study Report , (2) Authorize the General Manager to contract for the services of Environmental Engineering & Contracting , Inc. (EEC) to conduct Phase II of the FOG Control Study for an amount not to exceed $300,000 ; and , (3) Authorize the Genera l Manager to enter into agreements with the County of Orange and the co-permittees for funding Phase II of the FOG Control Study in a form approved by General Counsel. SUMMARY • • • In April 2002, the District's Board of Directors approved and authorized staff to budget for the FOG Control Program as a co-permittee, administer the FOG Control Study, develop funding for the Study, and obtain on a sole source basis the services of Environmental Engineering & Contracting , Inc. (EEC) to conduct the two-phase study. In April 2002, the District contracted with EEC to conduct Phase I of the study at a cost of $268,000. The County of Orange, the District , and the remaining co-permittees shared in the funding by providing a third of the cost of the study each-the County of Orange and the District provided $90,000 each, and th e cities and wastewater agencies provided $3,000 each. The District assembled specific groups to provide input and directio n , including th e WDR Steering Committee, consisting of OCSD staff, Costa Mesa Sanitary District, Garden Grove Sanitary District, City of Huntington Beach, cities of Anaheim , O ra nge , and Placentia; the FOG Control Steering Committee, comprised of contributing co-permittees, the County of Orange , and the Orange County Health Care Agency (OCHCA); a Regional Policies Committee (depends on the particular agencies involved, but in the past included the County of Orange, the OCHCA, and membe rs of the FOG Control Steering Committee); and a food service establishment (FSE) work group, including restaurant and grocer associations, food and hotel corporations, the County of Orange, and th e OCHCA. Phase I ended in May 2003, and EEC delivered 12 pro'grammatic building blocks , a technology matrix, and a backbone ordinance for an effective FOG control program . The "building block-approach" establishes a regional program, while allowing flexibility for each co-permittee to meets its own site-specific needs by choosing which building blocks to use. • Phase I of the study identified three significant technologies that could enhance and optimize the program, but which lacked sufficient objective technical data to be included as options for a FOG control program. These findings led to the recommendation for field- testing of automatic grease traps, biological additives and services, and interceptor monitoring devices in Phase II of the study. Phase II is proposed to be a field-based effort at FSEs , residential , and institutional sites and in the collection systems to test and measure the performance of the three technologies. Phase II is expected to take place over six to nine months. The proposed cost of Phase II is $300,000. • The FOG Steering Committee considered a number of options to achieve the most effective and practical mechanism to meet the Order requirements and to address schedule and resource limitations. Based on these considerations, the Committee determined that the interests of the county would best be furthered and resources would be used most effectively if (1) Phase II of the project was performed regionally; (2) Phase II was funded on a fair-share formula based on population; and (3) Phase II was awarded on a sole source basis to EEC, who successfully completed Phase I of the study. • Co-funding of Phase II is proposed on an equitable formula based on population, with the District and County of Orange contributing fixed percentages. The District's share is expected to be $30,000. The District has budgeted maximum of $50,000, in FY 03/04 for the Study. • Based on a recommendation by the Steering Committee, on April 18, 2003, the District sent a letter to the managers of the cities and wastewater agencies that provided details of the proposed Phase II and the individual cost allocations based on population. Included in the letter was a Notice of Intent to Participate to determine if co-permittees would be willing to participate in and fund Phase 11. • Based on the responses to date to the Notices of Intent to Participate, the Cities of Brea, La Palma, and Stanton have already contributed $9 ,500 ; and most of the other co-permittees have submitted notices of intent to contribute a combined total of $200,000 to the District upon invoicing. The County of Orange has pledged $30 ,000 towards funding the study. The scope of Phase II will be adjusted in accordance with the total amount funded, while maintaining the integrity of the study. • Therefore , staff recommends that it be authorized to develop a funding mechanism through agreements with the cities and wastewater agencies for Phase II and fund the study using the fair-share formula based on population , as directed by the FOG Steering Committee. Staff also recommends that the District participate in this study by providing , in addition to staff time to administer the contract, $30 ,000 as its fair-share as a co-permittee. • Staff also recommends the approval and authorization of a sole source contract for Phase II, for an amount not to exceed $300,000 , to EEC. Phase II is a continuation of the study. EEC conducted Phase I, identified the significant technologies t hat could be beneficial to the region , performed preliminary assessments of the technologies, and has developed the protocols for a consistent and systematic approach to testing these and other similar technologies. EEC is well-acquainted with the District's needs and requirements, and is experienced in conducting the required scientific evaluations. ; I ... , PRIOR BOARD/COMMITTEE ACTIONS April 2002: Board of Directors approved the contract award to EEC to conduct Phase I of the FOG Control Study. PROJECT/CONTRACT COST SUMMARY The consultant (EEC) provided a solicited proposal for $300,000 for Phase II. The District budgeted $50,000 for the study, of which $30,000 represents its funding share for Phase II. A grant proposal was submitted to U.S. EPA's Office of Wastewater Management, but the proposal was not selected for a grant. There are other pending grant applications into the state of California, but there has not been any word to date on the status of the applications. BUDGET IMP.ACT ~ This item has been budgeted. (Line item: 108) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) ADDITIONAL INFORMATION From January 2000 through August 2001, there were approximately 250 sewer system overflows (SSOs) in Orange County, of which almost 75% were from sewer collection systems owned by cities and local wastewater agencies. During this same period, there were 31 beach closures due to SSOs, of which 17 were from systems owned by cities and wastewater agencies. The most prevalent cause of the SSOs is grease accumulation in the small to medium sewer lines, which are owned and operated by cities and local wastewater agencies, with the exception of areas under the District's jurisdiction, such as Tustin. The 2000/01 Orange County Grand Jury (Grand Jury) issued a report in April 2001 entitled Sewage Spills, Beach Closures-Trouble in Paradise. The Grand Jury identified as the main cause of SSOs sewer pipes clogged with grease from restaurants and high-density residential areas (e.g., apartment complexes) and suggested that a regional coalition be formed to resolve the SSOs and to develop a regional, consolidated approach to controlling grease. In April 2002, the California Regional Water Control Board, Santa Ana Region (RWQCB) issued Order No. RS-2002-0014, General Waste Discharge Requirements (WDR), requiring Orange County cities and wastewater treatment agencies under the jurisdiction of the RWQCB to monitor and control SSOs and to prepare and implement a FOG Control Programs by December 30, 2004. The District was named as one of the co-permittees, and also designated as facilitator for the regional effort to coordinate development of the programs and implementation. Following the promulgation of the Order, the co-permittees determined that the interests of the county would best be met by conducting a comprehensive FOG Control Study to establish the technical, administrative, and ordinance building blocks of such a program, while providing a regional, practical, and equitable approach throughout Orange County. Staff and co-permittees agreed to conduct the study in two phases. ALTERNATIVES 1. Staff has appraised, as an alternative to OCSD administering Phase II regionally, evaluation of the technologies by individual co-permittees. Under this alternative, each co-permittee would conduct its own level of evaluation and field-testing and would decide whether the technologies are effective and necessary tools for effective FOG control. As a result of this alternative, there would be inconsistencies among co-permittees in the study results and in the implementation of programs with inconsistent elements, which would affect the business community. In addition, the District would still need to conduct its own field testing, especially of the biological additives, to determine whether the application of these technologies may affect the collections systems, the District's treatment plants or ocean discharge, or any water recycling projects. The District estimates that the cost to the District would be more than $200,000. In addition, the cost to the region if each individual co- permittee conducted its own evaluation would be in the range of $3-5 million. Under a worst-case situation, many co-permittees would not be able to conduct such studies due to resource constraints and, therefore, would be forced to implement an impractical FOG control program without the benefit of objective, field-tested information. 2. The District estimates that if it did not use the services of a consultant to conduct a regional Phase II, it would either have to delay Phase II and not allow the three technologies at this time or conduct Phase 11 on its own and hire 3 FTEs to perform the study in a timely manner to meet the deadlines. The cost of doing the study in this manner is estimated at $300,000 over one year. These resources do not exist at the present time, and obtaining these resources would require, at a minimum, four months for procurement and several months of training. Therefore, compliance with the RWQCB's December 2004 would be jeopardized. 3. The District also considered using a consultant other than EEC to continue the FOG Control Study through Phase II. This is impractical and would eliminate the use of already developed resources, and thus require duplication of effort and cost. For example, EEC has already established contacts with the co-permittees and many of the constituents who are potentially affected by the pending FOG control programs (e.g., restaurant and grocer associations and food and hotel corporations). Under these circumstances, the co- permittees would not be able to meet the schedule imposed by the Order. It is estimated that the added cost of performing Phase II with a new consultant without the resources developed to date could be as much as $100,000. CEQA FINDINGS N/A ATTACHMENTS Phase I Report Executive Summary Letter to the City Managers dated April 18, 2003 Draft proposal for Phase 11 DRAFT Orange County Fats, Oils, and Grease (FOG) Control Study Phase I FOG Control Building Blocks Report EXECUTIVE SUMMARY Environmental Engineering & Contracting, Inc. (EEC) has completed Phase I of the Fats, Oils, and Grease (FOG) Control Study on behalf of Orange County agencies (cities and special districts) to enable these agencies to develop effective FOG control programs to reduce sanitary sewer overflows (SSOs). The study is being administered and managed by the Orange County Sanitation District (OCSD) and is being funded jointly by Orange County cities and special districts, the County of Orange, and OCSD. The ultimate purpose of the study is to provide Orange County a regional response to the Waste Discharge Requirements (WDR) of the Santa Ana Regional Water Quality Control Board (RWQCB) Order No. RS-2002-0014. The study is to provide the entities named in the WDR ( co-permittees) with programmatic and technical options (or "Building Blocks") in developing FOG control strategies for minimizing FOG discharges to the sewer system. Phase I is a research study that evaluates the current FOG control practices, technologies, and programs in the United States. A follow-up Phase II of the study would involve field-testing of selected FOG control technologies that are presented in Phase I before they are considered for adoption in local FOG control programs and ordinances. BACKGROUND Cooking grease in wastewater discharged from Food Service Establishments (FSEs)1, multi- family housing, and single family homes is causing FOG (or grease) blockages in Orange County's sanitary sewer collection systems. These grease blockages, located in either the property owner's sewer lateral or the sanitary sewerage system, lead to SSOs, which can cause untreated sewage to flow onto streets and travel to storm drains, creeks, and other surface waters. Untreated sewage on private property or in the streets poses an obvious human health risk. If this sewage reaches the ocean, it often results in coastal contamination, beach closures, and the associated potential human health risks. This has made the control of grease blockages a priority and high profile concern for Orange County residents, agencies, environmental groups, businesses, and regulators. Because of this, the Orange County Grand Jury conducted an investigation and in 2001, the Grand Jury presented recommendations to Orange County cities and agencies to evaluate, adopt, and implement regional measures to eliminate the environmental impact of the grease accumulation and blockage in the sewerage system. 1 Food Service Establishments (FSEs) are those establishments primarily engaged in preparing or serving food to the public such as restaurants, hotels, commercial kitchens, bakeries, caterers, schools, prisons, correctional facilities, and care institutions. Orange County FOG Control Study-Phase I ES-1 EEC In response to the regional problem of SSOs, the RWQCB Santa Ana Region issued Waste Discharge Requirements (WDR) in April 2002. A significant element of this WDR requires north and central Orange County cities and wastewater agencies to develop effective FOG control programs, including grease disposal alternatives, by December 2004. Similar RWQCB (San Diego Region) requirements direct south Orange County cities and wastewater agencies to reduce their SSOs, many of which are caused by grease blockages. The WDR named 32 co- permittees, which included local agencies, such as cities and special districts, and OCSD. In addition, OCSD was named as a facilitator for regional solutions to the WDR. According to the RWQCB, co-permittees and/or individual dischargers are potentially liable for fines of $10,000 or more per SSO. To facilitate regional developments of FOG control programs, OCSD contracted Environmental Engineering & Contracting, Inc. (EEC) to conduct a comprehensive national research study to evaluate potential FOG control solutions for Orange County and to develop a basis of information to allow the region to implement practical and equitable FOG control programs. Phase I of this study provides FOG control Building Blocks for FOG control programs in the form of best management practices (BMPs ); best conventional technologies (BCTs ); promising new technologies; and program elements, such as ordinances, permitting, and monitoring. This Building Block concept allows cities and wastewater agencies to choose the appropriate FOG control solutions and programs for their specific needs. This Phase I report presents twelve (12) FOG Control Building Blocks, regional issues, cost issues, and a "Backbone Ordinance" that can be used as a template for local FOG control ordinances in each jurisdiction. STUDY APPROACH FOG control efforts and programs throughout the United States were researched through Internet and literature searches, as well as nation-wide interviews with cities, agencies, associations, and technology suppliers. A partial list of those interviewed includes: • United States Environmental Protection Agency (USEPA) • States of North Carolina, Georgia, and Oregon • California Regional Water Quality Control Board (RWQCB) • Orange County Sanitation District (OCSD) • County of Orange • Orange County Health Care Agency (OCHCA) • Honolulu, Hawaii; Everett, Washington; and the California cities of Los Angeles, San Diego, Laguna Beach, and Oxnard • El Toro Water District • California Restaurant Association (CRA) The purpose of the interviews was not only to obtain data but also to gain insight from the experience of the interviewees with effective FOG control program elements. Orange County FOG Control Study-Phase I ES-2 EEC Further information was solicited and received through a website that was developed (www.eecfogstudy.com) to provide a tool for collecting pertinent data. Grease control technology manufacturers and suppliers were located through the website, literature and Internet research, and interviews with agencies and associations. Many suppliers were also interviewed at the Water Environment Federation WEFfEC 2002 convention. In all, over 60 manufacturers and suppliers were contacted concerning technologies such as grease removal equipment, monitoring devices, and biological additives. The data from the study is managed in a database. PHASE I RESULTS Phase I observed and assessed the current local conditions as they relate to FOG, determined the Building Blocks of a FOG control program, and developed the elements of the Building Blocks. In the process, Phase I also discovered and opened for discussion and evaluation a number of regional technical, programmatic, and public policy issues. The following is a summary of the Phase I results. Local Conditions A survey of Orange County cities and wastewater agencies was conducted in the form of a comprehensive Request for Information (RFI). The RFI included questions about collection systems, FSEs, residential sources of FOG, and the causes of the known SSOs.2 The combined results of the RFI survey and the annual OCSD operations and maintenance survey indicated that most grease blockages occur in 6-to 8-inch sewer lines and that the use of closed circuit television (CCTV) for monitoring sewer line cleaning is dramatically improving the success of sewer line cleaning. Data from OCHCA suggests that there are over 6,000 FSEs located in North and Central Orange County. Most of these are independent FSEs or part of a small chain. Based on the responses to the RFI, cities and agencies are primarily relying on increased sewer line cleaning to prevent SSOs. It appears that most Orange County cities and wastewater agencies have insufficient data on their FSEs and very few solutions to their grease blockages beyond frequent sewer line cleaning. For example, most Orange County cities and agencies do not have basic data on their FSEs (e.g., the number of FSEs with grease interceptors) in their service area. This indicates that most Orange County agencies lack the vital information to determine FOG control options for FSEs or to develop an effective FOG control program. The study has determined that gathering this type of information ("FOG Characterization") is a key Building Block. FOG Control Building Blocks Phase I identified and categorized 12 Building Blocks that should be considered individually and in various strategic combinations to develop an effective FOG control program. Each Building Block contains various elements that form the block. The Building Blocks are organized into four categories as follows: 2 The RFI utilized and expanded the annual survey OCSD conducts with member agencies of sewer collection system operations and maintenance. Orange County FOG Control Study-Phase I ES-3 EEC Programmatic Building Blocks • FOG Characterization (Section 6.1) • Education and Outreach (Section 6.9) • Monitoring and Enforcement (Section 6.10) • Program Costs, Fees, and Incentives (Section 6.11) • Ordinance (Section 6.12) Best Management Practices (BMPs) • Kitchen BMPs (Section 6.2) • Sewer Line Cleaning (Section 6.3) Regional and Watershed • Grease Disposal Practices and Alternatives (Section 6.8) Technologies • Grease Interceptors (Section 6.4) • Passive Grease Traps (Section 6.5) • Automatic Grease Traps (Section 6.6) • Additives (Section 6.7) These Building Blocks include all of the administrative, BMP, and BCT elements of a comprehensive FOG control program (e.g., permitting, education, interceptors, and interceptor maintenance). After a city or wastewater agency has "characterized" the needs of its program, it can choose to what extent it will implement these Building Blocks and which of the technology Building Blocks will be effective in its service area to build a customized program. The study suggests that the Building Blocks that are fundamental to an effective program are FOG Characterization; Education and Outreach; Monitoring and Enforcement; Program Costs, Fees, and Incentives; Ordinance; Kitchen BMPs; Sewer Line Cleaning; Grease Disposal Practices and Alternatives; and Grease Interceptors. These are essential foundational Building Blocks to ensure that the program is effective. Other Building Blocks, such as Grease Traps, Additives, and various elements within a Building Block, can be considered as support blocks that can be used in various combinations and degrees depending on local conditions. Key Findings and Recommendations Based upon the national research, local surveys, and multiple interviews, the key findings are listed below along with conclusions or recommendations for each building block. Orange County FOG Control Study-Phase I ES-4 EEC Building Block 1 --FOG Characterization An effective and efficient FOG control program must be based on a good understanding and knowledge of the nature and extent of SSO problems. The scope of the program should include identification of all current or potential sewer line "hot spots,"3 effectiveness of line cleaning, utilization of BMPs and technologies, and characterization of the FOG sources and their relationship to existing hot spots. The characterization of local FOG conditions is a foundational Building Block that establishes and justifies the scope of the FOG control programs to be developed and implemented by each city. Also, FOG sources, such as FSEs, will better understand the importance of controlling their FOG discharges through the use of kitchen BMPs or grease removal equipment, if they understand how their FOG discharges are contributing to a sewer line blockage at a specific hot spot. A properly conducted FOG characterization study will ensure that the FOG control program is not over-or under-designed. The study provides specific guidelines on conducting a FOG characterization, which includes inspecting and categorizing FSEs, identifying and classifying sewer line hot spots, and evaluating the potential upstream sources of the hot spots. The study proposes a Hot Spot Scoring System (HSSS) which provides a mechanism to prioritize sewer line hot spots and to focus the FOG control efforts appropriately. ff the Hot Spot Scoring System is adopted by the stakeholders, and the characterization finds it to be practical in its application, this system may become part of the regulatory and implementation framework. BBl FOG Characterization: The study provides the following recommendations: 1) Cities and agencies that do not have this essential information should initiate a FOG Characterization Study of their respective service areas as a first priority. 2) The FOG characterization guidelines and Hot Spot Scoring System provided in this report are recommended for use by each city or agency to provide regional consistency. Building Block 2 --Kitchen BMPs Effective kitchen BMPs are those practices applied in the kitchen to reduce and eliminate FOG before it reaches the drain. The BMPs also include those practices applied to optimize and improve the effectiveness of grease removal equipment such as traps and interceptors. The study determined that many of the kitchen BMPs are effective and economical methods of reducing the amount of FOG introduced into sewer collection systems. The majority of kitchen BMPs currently being promoted at FSEs are common-sense practices that are relatively easy to implement. The kitchen BMPs can be divided into structural and non-structural BMPs. Structural BMPs are those BMPs that require a device or container to be installed or removed. The main structural BMPs are as follows: 3 "Hot Spots" (or trouble spots) are areas in sewer lines that have experienced SSOs or must be cleaned or maintained frequently to avoid blockages. Orange County FOG Control Study-Phase I ES-5 EEC Structural Kitchen BMPs: • Use of a grease barrel for collecting liquid grease and recycling it rather than pouring it down a drain • Removing food grinders (garbage disposal units) • Using drain screens (strainers) to collect food solids Non-structural BMPs are those BMPs that do not require a device to be installed or removed and depend upon the conscientiousness of the employee and extensive employee training. The main non-structural BMPs are as follows: Non-structural Kitchen BMPs: • Dry wiping or scraping of plates and cookware before washing • Dry clean-up of floor mats and spills • Keeping records of grease removal equipment (GRE) maintenance, proper waste disposal, and employee training If included in a FOG control program, the FSE structural kitchen BMPs have the greatest potential to be implemented on a daily basis, and they are the most practical to monitor for the agencies. Verifying FSE records of GRE maintenance and employee training is also practical to monitor. Verifying daily dry clean-up of plates, cookware, floor mats, and spills is more difficult to monitor because they are employee practices that are not structural and are not tied to a record keeping system. It is recommended that kitchen BMPs be promoted for all residences (particularly high-density housing) and all FSEs through a strong education and outreach effort (discussed further in the Education and Outreach Building Block). The level of effort associated with monitoring kitchen BMPs (e.g., FSE inspections) should be based on the degree to which these BMPs will truly reduce the amount of FOG being discharged into the sewer system. It should be noted that while the study found that there is considerable literature on kitchen BMPs to reduce the discharge of FOG into the sewer system, there is limited data on the success of these BMPs, or which of the non-structural BMPs are truly being implemented. Although kitchen BMPs are a crucial element of FOG control, it is not recommended that BMPs be solely relied upon as the basis for a FOG control program. Due to the benefit to the FSEs and the agencies, the study recommends that, at a minimum, all FSEs be required to implement structural BMPs (e.g., using a grease barrel to collect and recycle cooking grease, removal of food grinders, utilizing drain screens) and to keep records on GRE maintenance, proper waste disposal, and employee training The promotion, requirements, and monitoring of other BMPs at FSEs and high-density housing should be discussed openly with their representatives to determine the cost vs. benefit of implementing and/or monitoring these BMPs. Orange County FOG Control Study-Phase I ES-6 EEC ·; BB2 Kitchen BMPs: The study provides the following recommendations: 1) Kitchen BMPs should be promoted for all residences and FSEs. 2) At a minimum, all FSEs should be required to implement structural BMPs and to keep records on GRE maintenance, proper waste disposal, and employee training. 3) Before developing the kitchen BMP elements of a FOG control program and identifying the resources necessary for promoting or monitoring kitchen BMPs, Orange County cities and agencies should discuss their options and enlist the input and support of potential partners, such as the restaurant associations (e.g., California Restaurant Association), the hotel associations, property managers, regulators, environmental groups, and other involved agencies to help implement effective kitchen BMP program elements. Building Block 3 --Sewer Line Cleaning Cleaning of sewers is performed to restore and maintain hydraulic capacity and prevent blockages or spills. Most cities or agencies have sections of their sewer lines where accumulations of solids or FOG occur quite rapidly after cleaning due to the nature of residential, industrial, or commercial discharges into those lines. These "hot spots" must be cleaned frequently. In most cities or agencies programs, such frequencies are based on inspection records and performance history for specific lines that may require cleaning semi-annually, quarterly, monthly, or even weekly. Increased cleaning is resource intensive and costly, and because the build up of grease at hot spots is inconsistent, increased cleaning may not prevent all grease-related SSOs at that hot spot. If cleaning is occurring at short intervals, more effort should be placed on controlling the source of the problems, such as promoting kitchen BMPs, installation and regular inspection of grease removal equipment, or replacing broken or inadequate sections of sewer pipe. The RPI and OCSD surveys revealed that CCTV inspections are dramatically improving the success of sewer line cleaning. The surveys also identified that most grease blockages in Orange County occur in 6-to 8-inch diameter sewer lines. This finding points to the need to focus on solutions specific to 6-to 8-inch diameter lines, such as specialized CCTV equipment, combination cleaning trucks, and potentially the use of biological additives. The FOG Characterization work should pinpoint "hot spot" areas in sewer lines that will then become the primary focus of grease-related sewer line cleaning and CCTV monitoring. A second type of cleaning is for lateral lines from FSEs, multi-family housing, or homes, which are almost always owned and maintained by the property owner. These lateral lines can also experience blockages or SSOs upstream of the public agency owned and operated local sewer. To clear the lateral blockage, a plumber will commonly push, scour or scrape the grease mass (this is also true of other lateral blockages, including roots) into the local sewer, which may cause a subsequent blockage. The finding that lateral cleaning activities can contribute to or cause blockages or SSOs in municipal sewerage systems is significant and suggests that many blockages and SSOs could be prevented if there were better coordination between the cleaning of laterals and the maintenance of publicly owned sewers, particularly at hot spots. This could be accomplished through a Orange County FOG Control Study-Phase I ES-7 EEC notification program. In addition, if the frequency of lateral line cleaning incidents at FSEs can be monitored through this coordination system, this can serve as an indicator of the effectiveness of their BMPs and their trap and interceptor maintenance programs at preventing grease from entering the public sewers. Finally, note that this includes lateral cleaning activities for multi- family buildings. The study necessarily focuses on FSEs, where there are clear opportunities for FOG control programs. Multi-family buildings generally are much more difficult to regulate because they are residences rather than businesses, but it is possible to include these facilities in a lateral line notification program. BB3 Sewer Line Cleaning: The study provides the following recommendations: 1) Utilizing the BMPs and guidelines presented in this report, the Operations and Maintenance staffs from the cities and wastewater agencies should establish a strategy for grease-related sewer line cleaning, which includes: -Adopting minimum standard cleaning procedures, -Judicious use of CCTV to verify cleaning effectiveness, -Development of a hot spot scoring system, and -Utilizing a database and/or GIS to store and manage the collection system cleaning and hot spot data. 2) A notification system between the plumbers performing lateral line cleaning and the agencies, sewer line cleaning departments should be developed. A strategy meeting should be conducted between the agencies and the representatives of the plumbers, FSEs, and multi- family building managers to develop this system of notification. Building Block 4 --Grease Interceptors Grease interceptors are underground or in-ground grease collection devices, which are generally described in the Uniform Plumbing Code (UPC) or the California Plumbing Code4 • The terms "traps" and "interceptors" are often used interchangeably, which has created much confusion. Grease interceptors are typically a minimum of 750 gallons capacity and are located outside a FSE kitchen or multi-family building. Grease traps are much smaller than interceptors (usually 50 gallons or less) and typically are located above ground in the kitchen under a sink. The grease interceptor is a proven grease collection device that the study lists as the best conventional technology (BCT) for grease control. However, interceptors must be maintained properly to perform effectively. Grease interceptors at FSEs will reduce grease blockages and SSOs, if the FOG control program includes inspection and verification of proper maintenance of the interceptor. This is evidenced by the success of some FOG control programs (e.g., Eastern Municipal Water District and the Cities of San Diego and Oxnard), which experienced a dramatic reduction in grease-related SSOs after implementing an inspection program for grease interceptors. Also, the study has identified that many city plan check departments have had difficulties in the past properly implementing the UPC requirements for the installation of interceptors at FSEs. This is particularly true when an FSE changes ownership or management, 4 The 2001 California Plumbing Code is based on the 2000 edition of the Uniform Plumbing Code of the International Association of Plumbing and Mechanical Officials with California amendments. Note that California has not amended most provisions of the UPC pertaining to grease traps and interceptors. Orange County FOG Control Study-Phase I ES-8 EEC or when it is not clear which agency has jurisdiction over the UPC requirements. Also, many older FSEs were permitted when grease blockages were less frequent or were perceived as less of a problem. Therefore, many FSEs in Orange County do not have interceptors even though they discharge a significant quantity of grease. Proper implementation of the UPC requirements and an inspection and regulatory program for interceptors is resource-intensive. However, it has been found, to date, to be a very effective approach to reducing grease-related SSOs. Therefore, the study recommends that new FSEs, and FSEs that pursue remodeling of over $50,000, must be required to install a grease interceptor according to the UPC requirements and provide proper maintenance of the interceptor. For existing FSEs with an interceptor, proper maintenance will be required. For existing FSEs without an interceptor, the study recommends a "conditional stay" of the requirement to install a grease interceptor for a period of up to two years (discussed further in the Ordinance Building Block). The study also recommends that small FSEs that meet a de minimus classification may receive a variance from installing an interceptor. Additionally, interceptors should not be larger than 3,000 gallons (for cleaning purposes), unless there are special circumstances. The study provides recommendations for the proper design of an interceptor and guidelines for following the UPC requirements based on the study' s recommendations. However, further input from building department representatives, plumbers, interceptor manufacturers, and grease haulers should be received before finalizing a standardized design and sizing requirement. Monitoring an interceptor (e.g., measuring the grease and solids build-up) is difficult and unpleasant. Because of this, the study recognizes that FSEs will not typically monitor their own interceptors correctly, if at all. Without monitoring, many FSEs will establish a frequency for pumping out their interceptors based on only corporate recommendations, grease hauler suggestions, past lateral grease blockage frequency, or financial hardship. Some cities or agencies (e.g., the County of Orange unincorporated areas) have required minimum pump out frequencies (e.g., monthly to quarterly) based on the type of FSE or the fixtures in a FSE kitchen. Unfortunately, these approaches do not provide a reliable method of predicting the build-up of grease and/or solids in an interceptor at an individual FSE. This will lead to either under-or over-maintenance of interceptors at most FSEs. Under-maintenance of interceptors will lead to pass-through of FOG into the sewer system and odor and corrosion issues. Over-maintenance of interceptors will lead to unnecessary increased costs for FSEs and the need to dispose of excess waste FOG. The study has found that proper monitoring of interceptors is required to avoid the discharge of FOG into the collection system. A specially-trained grease removal equipment (GRE) inspector can provide the monitoring that FSEs are not performing. This service has been successfully used elsewhere and is discussed further in the Monitoring and Enforcement Building Block. One technology that shows great potential for automatically monitoring interceptors is an interceptor monitoring device. This device can continually measure the amount of grease and solids build-up and notify the FSE when it is time to pump out its interceptor. In Orange County, the cost to purchase and install a medium-sized interceptor ( 1,500 gallons) for a new FSE is approximately $8,000. The cost to retrofit an existing FSE with a 1,500 gallon Orange County FOG Control Study-Phase I ES-9 EEC interceptor will typically range from $10,000 to $15,000. The cost to have a grease hauler pump-out and properly dispose of the waste grease from a 1,500 gallon interceptor is approximately $300 per event. Many grease producing FSEs pump out their interceptors quarterly, while some FSEs pump out their interceptors monthly or even twice per month. Therefore, grease producing FSEs with 1,500 gallon interceptors may pay $1,200 to $7,200 per year to properly maintain their interceptor. Grease-producing FSEs find that these costs are necessary to avoid lateral line grease blockages or downstream blockages. Many existing FSEs will find it difficult to retrofit their existing facility to install an interceptor due to space constraints, plumbing slope constraints, or economic hardship. However, this does not diminish the fact that installing, maintaining, and monitoring interceptors are necessary requirements for many FSEs, cities, and agencies to prevent grease-related blockages and SSOs. BB4 Grease Interceptor: The study provides the following recommendations: 1) The study recognizes grease interceptors as the best conventional technology (BCT) for controlling grease and preventing grease-related blockages and SSOs. Therefore, the installation and proper maintenance of grease interceptors should be promoted as the primary grease control solution for most FSEs. 2) New FSEs, and FSEs that pursue remodeling of over $50,000, should be required to install a grease interceptor according to the UPC requirements. 3) Existing FSEs without interceptors, should receive a maximum two-year "conditional stay" of the requirement to install a grease interceptor (see the Ordinance Building Block). 4) Small FSEs that meet a de minimus classification may receive a variance from installing an interceptor. 5) Interceptors should not be larger than 3,000 gallons unless there are special circumstances. 6) A GRE Inspector should be utilized to monitor all FSE grease interceptors to ensure that FSEs are conducting proper maintenance of their interceptors. 7) A mandatory minimum interceptor pumping frequency for all FSEs should be once every 6 months, for sanitary and odor control, as well as to provide for regular inspection of its integrity, although most FSEs will need to pump their interceptors more frequently due to the rapid accumulation of grease. 8) Due to the cities' and agencies' inconsistency in implementing the UPC requirements for interceptors at FSEs, the primary FOG specialist (the FOG Inspector) should be included in the plan check process for new and remodeled FSEs and existing FSEs that are required to install an interceptor. 9) A special workshop of representatives of the agencies' building departments, FOG control personnel, interceptor manufacturers, FSE plumbers, and grease haulers should be conducted to finalize the grease interceptor design requirements and the interceptor sizing guidelines provided in this report. Phase Il: Interceptor monitoring devices should be tested due to their potential role in monitoring interceptors as an alternative to the GRE Inspector. Orange County FOG Control Study-Phase I ES-10 EEC Building Blocks 5 & 6--Passive and Automatic Grease Traps Grease traps are small grease collection devices (50 gallons or less), typically installed under a sink. Passive grease traps are relatively simple gravity separation devices that have been used by FSEs throughout the United States for many years. Automatic grease traps provide enhanced grease separation and automatic grease removal. Grease traps are an important FOG control option, particularly for those FSEs without interceptors, and the proper operation and maintenance of passive and automatic grease traps is required for them to be effective. As evidenced by the success of some FOG control programs (e.g. City of San Diego, California and the City of Everett, Washington), FSEs must have the option of installing grease traps (passive or automatic) if interceptors are not a feasible option for the FSE. Otherwise, FSEs will have no means of collecting the grease that is discharged into their drains. Any grease trap will provide some level of grease control, even if maintenance is not performed according to best management practices. Most FSEs in Orange County have not installed grease traps, though this is a common grease removal device in other parts of the country. This is largely due to an apparent belief by many cities and FSEs that grease traps are prohibited by the health department, the Orange County Health Care Agency (OCHCA). OCHCA states that it does not prohibit the installation of grease traps within FSEs. It recommends that grease traps be located outside the facility whenever possible to maintain sanitary conditions in the food preparation areas. However, OCHCA stated that it will evaluate requests for the installation of grease traps located inside the facility and will assist in identifying installations that allow easy access for maintenance activities that promote sanitary conditions. Automatic grease traps provide a very promising grease control solution for many FSEs that discharge a vast majority of their grease from their sinks. The cost of purchasing and installing a passive grease trap can range from $500 to $1,200 for 10 to 50 gallon per minute (gpm) units, respectively. The cost of purchasing and installing an automatic grease trap can range from $3,000 to $8,000 for most models. BB5&6 Passive and Automatic Grease Traps: The study provides the following recommendations: 1) Grease traps should be utilized at FSEs if a grease interceptor is not a feasible option, because grease traps do provide some level of grease control. 2) Grease trap maintenance and cleaning BMPs should be promoted and monitored to reduce grease blockages and the potential health risks associated with grease traps. The study provides some recommended BMPs, which were designed in cooperation with the OCHCA. 3) A GRE Inspector should be utilized to monitor all FSE grease traps to ensure that FSEs are conducting proper maintenance of their interceptors. Phase II: Automatic grease traps should be tested, because they may provide additional or alternative options to grease interceptors for FSEs. Orange County FOG Control Study-Phase I ES-11 EEC Building Block 7 --Additives Additives include chemical and biological products used by FSEs to control grease in private lateral sewer lines and grease interceptors. Also, many cities and agencies have used additives to control grease in their sewer lines and lift stations. Chemical additives have solved some lift station grease problems, but they have not yet been shown to prevent sewer line blockages. Therefore, chemical additives are not recommended to be pursued for further study or adoption in a FOG control program until more evidence is provided that they are effective in reducing sewer line blockages. Biological additives are being used successfully for FOG control at many FSEs (FSE Application) and by many cities (Sewer Line Application). The most common products use bacteria and are added either in a sewer line or in a FSE kitchen drain upstream of the sewer line. Other products add nutrients to provide proper conditions for the native bacteria to flourish. The bacteria slowly digest the FOG that builds up on sewer lines to prevent the FOG from blocking those lines. These biological additives are not to be confused with chemical products (often falsely called "enzymes") that may only emulsify the FOG temporarily and cause a problem further downstream. Some biological additive suppliers are now supplying turnkey services to cities or FSEs that may include adding the product, maintaining the feeders, monitoring interceptors, or training the FSE on kitchen BMPs. Companies that supply a service along with their additive appear to be the most successful in preventing sewer line blockages. Many cities and FSEs have experimented with biological additives with a wide variety of results, often depending upon the proper application of the product. Cities such as Placentia, Los Angeles, and San Diego report success in testing biological additives and services to control FOG in some of their sewer line hot spots. This is a key finding in the research. Some cities also claim that the cost of the biological additives is competitive with their sewer line hot spot cleaning costs. Although there are many cost and performance concerns regarding biological additives, the potential benefits of biological additives and services are significant: • Control of sewer line hot spots • Reduced sewer line cleaning • Less waste grease to be managed or landfilled • Reduced residential grease blockage problems • Reduced FOG-related SSOs • Reduced FOG loading at the POTW • Potential cost savings for the FSE and the city or agency Some biological additives may also have potential negative affects on the sewer system or the OCSD treatment plant, though this is very theoretical at this point. EEC researched over 40 suppliers of biological additives and services and collected cost and performance data on over 25 biological products. The data was combined into a Technology Matrix, which is available to Orange County cities and agencies as a separate document. Orange County FOG Control Study-Phase I ES-12 EEC • The cost for a biological additive (service included) applied in a FSE kitchen is $80 to $150 per month for an average kitchen. The cost for a biological additive (service included) applied in municipal sewer lines is $150 to $800 per hot spot per month. BB7 Additives: The study provides the following recommendations: Phase II: Biological additives and services should be tested to determine their true cost, performance, and potential role in local FOG control programs. The proposed scope of Phase II currently includes testing FSE Application products and services and Sewer Line Application products and services. Depending upon the results of Phase II, biological additives may provide additional or alternative options to grease interceptors for FSEs and an alternative option to sewer line hot spot cleaning for cities and agencies. Building Block 8 --Grease Disposal Practices and Alternatives Proper disposal of waste grease collected either from grease traps and interceptors or through kitchen practices is essential to a successful FOG control program. The development of effective FOG control programs in Orange County will lead to better utilization of kitchen BMPs, more installations of grease traps and interceptors, and increased maintenance of traps and interceptors. This will result in a significant increase in the volume of waste grease that will be collected and hauled to disposal sites in Orange County. The cost of rendering or recycling grease is increasing. Landfill disposal costs are also increasing. To manage this grease and ensure that FSEs and haulers have incentives to collect and dispose of grease properly, a variety of disposal options for waste grease must be available through both the private and public sectors. The projected increase in kitchen grease waste (yellow grease) will most likely be addressed through the current practice of rendering. Converting yellow grease into bio-fuels is quickly becoming a viable alternative to rendering. To address the projected increase in interceptor waste (brown grease), OCSD conducted an In-Plant FOG Impact Study to evaluate alternative methods of handling liquid FOG at OCSD treatment facilities. The result of the study identified bio-fuel as the most appealing; however, this option is dependent upon private companies being able to produce bio-diesel from brown grease cost effectively. Until the bio-fuel option's technical and economic feasibility is validated, the study recommended hauling the waste FOG to the OCSD facility and feeding it directly to a dedicated digester. This was recommended to be initiated after verification of the efficacy of the process through pilot testing. A bench scale study of grease digestion in a dedicated digester was conducted by OCSD approximately 20 years ago and found it to be effective after several weeks of conditioning. The practice of feeding the waste FOG from FSEs into POTW digesters (although not a dedicated digester) is currently being conducted at the City of Oxnard. To ensure that FSEs properly dispose of their waste FOG and that haulers and disposal/recycling sites are properly operated, a regulatory program consisting of a four-part manifest system could be implemented to effectively track the waste and its proper disposal. Orange County FOG Control Study-Phase I ES-13 EEC BBS Grease Disposal Practices and Alternatives: The study provides the following recommendations: 1) The current practice of hauling the liquid waste FOG (brown grease) from the FSEs to the wastehauler station at the headworks of OCSD's wastewater treatment facility should be continued. This process should continue until the efficacy of utilizing a dedicated digester at OCSD is validated through pilot testing or until private companies provide a proven bio- diesel option for the brown grease. 2) The Orange County cities, agencies, haulers and disposal sites should conduct a regional discussion to determine how best to regulate haulers and disposal/recycling sites and to determine the most efficient and effective four-part manifest system for the region. 3) A pilot study of a computerized waste tracking system should be conducted to determine the practicality and true costs and benefits of such a system. Building Block 9 -Education and Outreach There are many examples of educational programs that have been developed for residential communities and FSEs from around the country. For public outreach, the programs contain advice such as pouring liquids into a container rather than the sink and scraping food solids into the trash rather than down the drain. Pacific Grove, California has developed a school and home education program titled "Grease, Put a Lid on It," which encourages pouring cooking oil and grease into coffee cans. Flyers have been developed such as the "The Grease Avenger" in Los Angeles and "Fat Free Sewers" from the Water Environment Federation, which can be used for bill stuffers, newspaper ads and articles, and web-site information. Education for FSEs in the various programs is targeted to provide simple operating practices for food service employees. An example is the "Grease Goblin" program from the State of Georgia, which provides easily downloadable material for FSEs, including kitchen signage in three languages. An example of educational materials designed for agencies, which is website-based, was developed by the Oregon Association of Clean Water Agencies. This material, which is titled "FOG Best Management Practices Manual," includes Frequently Asked Questions and kitchen practice BMPs, as well as operations and maintenance of interceptors and traps, disposal options, check lists, and logs. EEC and OCSD are working with the County of Orange Pollution Prevention Program in its development of FSE education flyers to reduce stormwater pollution and sewer line blockages due to FOG. Additional education materials (e.g., flyers, posters, and videos) should be developed utilizing effective existing training material from other cities. Due to the language diversity in Orange County, particularly in FSEs, education materials must be provided in multiple languages. The City of Los Angeles provides its FOG control materials in five languages due to its language diversity. During Phase I, the study conducted numerous interviews of representatives from the California Restaurant Association (CRA), the California Grocers Association (CGA), the hotel industry, grease control technology suppliers, waste grease haulers, and plumbers. A FOG Control Work Group was initiated that included representatives of CRA, CGA, hotel representatives, OCSD, Orange County FOG Control Study-Phase I ES-14 EEC the County of Orange, and OCHCA. The FOG Control Work Group discussed the findings of the study to solicit input from the stakeholders that will be affected by the upcoming FOG control programs. The FOG Control Work Group can be utilized to expand the education and outreach efforts, including future BMP workshops. BB9 Education and Outreach: The study provides the following recommendations: 1) Additional regional educational materials should be developed for the upcoming FOG control programs utilizing existing training materials from other cities and agencies. 2) The FOG Control Work Group should be expanded to include all the stakeholder groups affected by the upcoming FOG control programs. The Work Group can serve as the primary education and outreach tool for the development and implementation of the FOG control programs. 3) The development of educational and outreach programs should continue to be a joint effort of the stakeholders, pooling resources to develop the materials. Building Block 10 --Monitoring and Enforcement Most FOG control efforts must be monitored to ensure that they are followed regularly and are successful. The monitoring strategies in a FOG control program must be logically structured and cost effective. The forms of monitoring identified as essential in Phase I include: • Monitoring of kitchen BMPs (e.g., drain screens, collection of liquid grease, employee training) • Grease trap and interceptor maintenance (e.g., monitoring solids and grease levels) • FOG disposal (e.g., waste tracking through a four-part manifest) • Sewer lateral cleaning (e.g., coordination between plumbers and the agencies) • Municipal sewer line cleaning (e.g., post-cleaning CCTV monitoring) Most resources will be invested in this element of a FOG control program. The level of resources required will be determined by the scope of the program and requirements of the ordinance, and by which Building Blocks and alternatives are adopted by the program. Each BMP and technology selected for adoption and use must be evaluated with an understanding of the level of monitoring and inspection required for success. The study suggests that the cities and agencies have several options in implementing and managing monitoring and inspection: individual agency programs and resources, regional monitoring or inspections,,_ and a cooperative program between local and regional agencies. For FSEs, the recommended monitoring approach is to utilize OCHCA inspectors to provide screening inspections during their normal FSE health inspections, to utilize grease removal equipment (ORE) inspectors to inspect grease interceptors and traps, and to utilize a highly trained FOG inspector, provided by each city or agency, to conduct detailed FSE inspections focusing the majority of his or her time and efforts where they are needed most (e.g., FSE violations and hot spot areas). For cost purposes, some smaller cities or agencies cities may choose to combine the GRE and FOG inspector roles, if appropriate. Some cities or agencies may choose to contract out the services of the ORE inspector and/or the FOG inspector, if Orange County FOG Control Study-Phase I ES-15 EEC qualified contractors are available. Regardless of the approach, the GRE inspector and the FOG inspector roles and focus are substantially different and must be managed as such. The recommended monitoring approach for sewer lateral line cleaning (e.g., coordination between plumbers and the agencies) and municipal sewer line cleaning (e.g., post cleaning CCTV inspections) was discussed in the Sewer Line Cleaning Building Block above. The recommended monitoring approach for FOG disposal (waste tracking through a four-part manifest) was discussed in the Grease Disposal and Alternatives Building Block above. For FSE monitoring and inspections to be successful, there must be systematic enforcement that will implement requirements, ensure compliance, and ensure equitable application of the requirements. The enforcement must also be practical to be implementable. Each city or agency will appoint a FOG Control Program Manager to provide this practical enforcement. The study recommends that the FOG Control Program Manager exercise discretion early in the program for FSEs and haulers and use a progressive enforcement strategy, similar to the OCSD industrial pretreatment program, to re-educate and eventually ensure long-term compliance. BBlO Monitoring and Enforcement: The study provides the following recommendations: 1) The study recommends that FOG control monitoring be conducted through the use of the following: -OCHCA screening inspections at FSEs -GRE Inspector to inspect grease traps and interceptors -FOG Inspector to conduct a minimum of annual FSE inspections while primarily focusing on FSEs in hot spot areas -Regional certification of haulers and disposal facilities and the regional management of a four-part manifest system for tracking waste FOG -Coordination between plumbers (or hydro-jetters) and the agencies to develop a logical notification system on private lateral line cleaning -Post sewer line cleaning CCTV monitoring 2) A progressive enforcement strategy for FSEs and haulers designed to re-educate and eventually ensure long term compliance. 3) The need for consistency and cooperation between regional and local agencies is critical to the success of the monitoring and enforcement programs. Therefore, the details of this cooperation should be discussed in a regional policy meeting for the benefit of all the stakeholders. Building Block 11 -Program Costs. Fees, and Incentives A FOG control program will require funding. Many agencies have struggled with developing an appropriate fee structure to recover its program costs. In fact, most agencies are currently providing this funding through their current water or wastewater funds without developing a separate fee or surcharge program. Ultimately, these funds are recovered through increased sewer use fees for specific dischargers or the general public. Orange County FOG Control Study-Phase I ES-16 EEC To provide policy makers tools for funding their programs, the study has reviewed cost recovery models. Industrial Pretreatment Programs at Publically Owned Treatment Works (POTW s) provide such a model for cost recovery from industries. The POTW model is based on the fact that industries discharge more flow and higher strength wastewater (i.e., more suspended solids or organics) than a common household. Therefore, industries-pay a surcharge for this extra flow and strength. The industry surcharges recover the costs of treating the high strength wastewater and the costs of industry inspections and enforcement. A FOG control program could be similarly designed, where the funding is primarily supplied by those that discharge FOG into the collection system beyond that of a common household. The FOG control program costs must first be calculated before determining how they will be recovered. The costs directly attributable to FSE FOG control may include the FSE monitoring and inspection costs (including the OCH CA screening inspection costs) and the cost of grease- related sewer line cleaning (i.e., increased sewer line cleaning due to grease) in the FSE areas. The other costs of the FOG control program (e.g., residential education and outreach, grease related sewer line cleaning in residential areas, and waste grease tracking) are not attributable to FSEs. For a hypothetical medium-sized city, the following future FOG control cost calculation has been developed to provide an order of magnitude estimate of the potential future costs after a FOG control program is in effect (actual data will be different for each city or agency): Orange County FOG Control Study-Phase I ES-17 EEC FOG Control Data for a Hypothetical City or Agency in 2005 General Data Population 125,000 Miles of agency owned sewer line (not including laterals) 300 Number of FSEs with properly designed and maintained interceptors 200 Number of FSEs without properly designed and maintained interceptors 200 Annual Aaency FOG Control Operatin2 Costs Grease-related sewer cleaning and post-cleaning CCTV inspections *$300,000 to $500,000 in FSE areas Grease-related sewer cleaning and post-cleaning CCTV inspections *$60,000 to $140,000 in other areas FOG control FSE inspections, enforcement, and administrative costs $150,000 to $250,000 Other FOG control program tasks (e.g., education and outreach, $40,000 to $60,000 waste tracking) Grease-related fines and SSO clean-up costs not directly recovered $200,000 to $300,000 from dischargers Total $750,000 to $1,250,000 Note: The costs shown are future annual operating cost estimates for a hypothetical city and do not reflect the potential capital costs required. The actual costs will vary significantly from agency to agency depending upon the local conditions, and the method of cost recovery will need to be determined by each city and agency. The other sewer cleaning and CCTV inspection costs that are not FOG-related are not included in this table. * Some of these costs are already incurred by cities and agencies that are performing increased sewer cleaning & post-cleanin~ CCTV inspections. Also, some of these costs may already be recovered. Based on the data presented above for a hypothetical city or agency in 2005, the total annual FOG control cost to recover is $750,000 to $1,250,000. FOG control costs directly attributable to FSEs are the costs of grease-related sewer cleaning and CCTV inspections in FSE areas ($300,000 to $500,000) and the costs of the FOG control FSE inspections, enforcement, and administration ($150,000 to $250,000) for a total of $450,000 to $750,000. For the FSE community, once the actual FOG control costs attributable to FSE are determined, a city or agency will need to decide whether to recover all of these costs from the FSEs or to share the recovery of these costs with other dischargers. Once a city or agency determines the amount to be recovered from the FSE community, this must be recovered equitably from the individual FSEs. Based on the Industrial Pretreatment Program Model, individual FSE fees would be based on the amount of FOG that they discharge. However, since the sampling and analysis of FSEs is not typically practical or representative, an FSE' s fee could be based on its volume of fresh water usage, with a discount for those FSEs that have installed and maintained a properly-designed Orange County FOG Control Study-Phase I ES-18 EEC • grease interceptor. The discount is due to the benefit those FSEs provide by paying for the proper maintenance of their interceptors to keep FOG out of the sewer lines. Kitchen BMPs should be a mandatory requirement for all FSEs, and therefore, should not be included in the discount. Depending on funding needs, cities and agencies may charge an FSE application fee in the form of a Notice of Intent to Discharge fee to provide the preliminary funding of the FSE FOG control program. BBll Program Costs, Fees, and Incentives: The study offers the following conclusions: 1) The cities and agencies should determine the costs of their FOG control programs, the dischargers responsible for those costs, and a cost recovery strategy. 2) The fees for individual FSEs could be based primarily on their water usage with a discount for those FSEs with properly designed and maintained grease interceptors. 3) If necessary, a one-time FSE application fee could provide the preliminary funding of the FSE FOG control program. 4) The basis of the cost recovery, including the FSE fee structure, should be discussed in a regional policy meeting for the benefit of the region. Building Block 12 --Ordinance An ordinance, or set of regulations that establishes due process and specifies the obligations and rights of both the regulator and regulated entities, provides the legal framework and foundation for implementing a FOG control program. The ordinance is a foundational block of a program and is essential to establish conditions of discharge, requirements, and mechanisms for monitoring, enforcement, fees, incentives, and penalties. As part of this study, a "Backbone FOG Control Ordinance" (Ordinance) has been developed. This Ordinance includes recommended minimum standards and requirements for the program and the tools to implement the program. The two fundamental tools included in the Ordinance are ( 1) a General Permit, which establishes the detailed requirements for the program and (2) the Notice of Intent to Discharge, a form submitted by FSEs detailing the facility information and the type of food handling operation. The primary requirement of the Ordinance is that "FOG shall not be discharged into the Ci tis sanitary sewerage system in a quantity that will accumulate and/or cause or contribute to blockages in the City's sanitary sewerage system or in the sewer lateral, which connects the FSE to the City's sanitary sewerage system." The Ordinance and the General Permit include a requirement for the installation of a grease interceptor by all FSEs, whether new or existing (unless deemed to have a de minimus discharge). This underlying assumption is based on the fact that grease interceptors continue to represent the best conventional technology for FOG control. While it is possible that a city can improve FOG control and reduce SSOs with an aggressive program of kitchen BMPs by the FSE community, BMPs alone are unlikely to be sufficient. Nevertheless, because it will be difficult for many existing FSEs to install grease interceptors and because alternatives to grease interceptors have not been adequately evaluated, the Ordinance allows the FOG Control Program Manager to "conditionally stay" or delay the implementation of the requirement for installation of grease interceptors by existing FSEs for up to a two-year period to develop requirements for Alternative FOG Pretreatment Programs. The Orange County FOG Control Study-Phase I ES-19 EEC stay is contingent upon the condition that the FSE display that it is not "causing or contributing to an SSO or blockage." If an FSE is shown to be "causing or contributing to an SSO or blockage" during the stay period, the requirement for an interceptor will be enforced before the stay period has concluded. Further study of the alternatives may find that some alternatives do provide a sufficient level of control to prevent blockages. Some alternatives may perform well for certain types of FSEs or under certain conditions. The stay is specifically intended to allow time to pursue and examine a wide variety of alternative technologies and processes by the FSEs and cities. The Alternative FOG Pretreatment Program section of the Ordinance is intended to allow for approval of these programs, based on sound technical data. It is important to note that if an approved alternative is not provided by the FSE within the stay period, the FSE will be required to install an interceptor. Specific conditions and criteria for this program may be developed as part of the General Permit. The Backbone Ordinance and General Permit Outline presented in this study are a first effort to provide structure for implementing a FOG control program. The issues and conditions for FOG control are similar in many cities and agencies and it is recommended that the cities and agencies in Orange County develop a regional model for the program utilizing the Backbone Ordinance, where the next step would be to develop a General Permit with input from stakeholders. BB12 Ordinance: The study provides the following recommendations: 1) The Backbone Ordinance should be utilized as a basis for a regional model or template and that a regional model for the General Permit should be developed by the stakeholders. This would include the development of fees and incentives and Alternative FOG Pretreatment Programs, which should be based on the results of Phase II testing and sound technical data from the FOG characterization efforts in each city or agency. Orange County FOG Control Study-Phase I ES-20 EEC CONCLUSIONS The goal of Phase I of the Orange County FOG Control Study was to provide Building Blocks for Orange County cities and agencies to use to develop coordinated and effective FOG control programs. FOG control programs should be based on sound information on the "hot spots" in the local sanitary sewers, as well as an inventory of FSEs in the area. This vital information will support a much more effective and efficient FOG control program by allowing the community to target its resources to the source of the problems. This information also will support building the partnerships, which contribute to the strength and success of the program. Partners include regulators and environmental groups, and, more importantly, restaurant associations, hotel associations, and other professional and industry groups. Assistance from industry partners will ensure that programs are designed with industry constraints and practices in mind, and will facilitate the education and outreach necessary to ensure a successful program. Phase I of the program has developed Building Blocks for a sound program, including programmatic components, best management practices, technology review, and proper disposal of newly segregated waste FOG. The key programmatic component is legal authority for the program, which will be created through a local ordinance. A Backbone Ordinance has been drafted which includes the standards and requirements for the program, as well as the tools for implementation. Other components provided by the study include strategies for monitoring and enforcement and for development of fees to fund the program. On the technology side, the study assesses the status of various FOG control devices and additives. Grease interceptors, and to a lesser degree grease traps, are presently the only technologies that have been consistently effective. While the effectiveness of grease interceptors for FOG control has been known for some time, there has not been aggressive or consistent enforcement of the Uniform Plumbing Code requirements to install interceptors. Therefore, many existing FSEs are faced with a need for better FOG control but find that the installation of a grease interceptor is either costly or difficult due to physical constraints, or both. The Backbone Ordinance and the recommended program include a conditional stay of requiring existing FSEs to install an interceptor, as long as they provide some alternative, effective FOG control. There are promising alternatives to grease interceptors which may offer reasonable control for some FSEs, particularly when combined with BMPs. BMPs are an important component of any program. If done properly, they are effective in reducing grease discharged to the sewer. However, it is unlikely that BMPs alone will provide effective FOG control. Thus, the investigation of alternatives to grease interceptors is a particularly important follow-up, and the stay will allow time for this investigation. An often neglected area of FOG control is proper disposal of waste FOG. The cost of recycling or disposing of grease is increasing and, with that, the likelihood of improper disposal increases. Work is needed both to develop effective disposal alternatives, including new recycling opportunities, and to develop a County-wide regulatory program to ensure that haulers properly handle and dispose of this waste. Finally, a key finding of the study was the connection between lateral line cleaning and downstream blockages, due to pushing grease, roots, and other debris from private lateral lines Orange County FOG Control Study-Phase I ES-21 EEC into the public sewers. The study suggests a notification system that ensures that those responsible for the public sewers are informed of private cleaning activities, since these can have major environmental and public health implications. NEXT STEPS These conclusions highlight the next steps in developing an effective FOG control program. Utilizing the information presented in this report, steps for individual agencies include: • • • • • • • • Conduct a FOG Characterization Study Adopt a FOG Control Ordinance Assign responsibility for the FOG control program by appointing a FOG Control Program Manager Develop an FSE inspection program Establish fees to fund the program Develop BMP standards for sewer line cleaning Develop kitchen BMP standards for FSEs Develop final interceptor design and sizing requirements for FSEs Steps which are best continued through regional activities include: • • • Pilot test FOG control devices and additives (Phase II), as well as grease disposal alternatives Convene regional meetings with stakeholders and partners, especially FSE partners, to develop education and outreach programs for all cities and agencies Investigate development of a County-wide regulatory program for grease haulers and a program to provide communication between plumbers and private sewer cleaning and city maintenance staff. All of these activities will require funding. Outside funding sources may be available for some of the more innovative aspects of the program. These sources must be pursued, although OCSD was not successful in a recent competition for an EPA grant for Phase Il. While agencies can begin to fund their programs through fees, each will also have to ensure that necessary funding is available to meet the requirements of the WDR. Orange County FOG Control Study-Phase I ES-22 EEC · _p~one: C714i'962-24·11 . . fax: !714J ss2-03ss ,Ww/N:oc:ad.com '·\, .. ': .. ~Hing-address: ~-P.~Q:'l:ioX-01'27 ~r1°~~(cl.\'al!~Y1• CA . ' ·'927£8~6127 · ..... ,, ,··. . .pti;:eet ad'dress: q~:'Eliis)\~e nlie ®n~~!r{y91t ~y. ~ ~ /'9?708-70 1 6 ~ -., . · · .MJ!mber . · Agen'i::ies :·:~~· .. f. :. • •• ' . · :cities ... -.. • 1 '·Anaheim . -. ' 'area ,. ''-'Buena 'Park . ~ •-~:0Cypress t#o6rii?'('n v811ey .' fiillerion . £'fir.de.ii' ·Grove u~ti'i:i~tbn , 8e~ctl · "· ·:·' · ':Irvin e . ·· ·.La Habra .,·· · :La Palma L°t;s Alamitos N~~ort ;Beach Orange · Placentia Si;1rita Ari<i f?eal Beach Stanton ·Tustin Villa Park , • .Y.f't:l;.a. .. Fncta ti!rv Dis tricts Cos_ta Mesa M idway City ater Districts Irvin e Ranc h ORANGE COUNTY SANITATION DISTRICT April 18, 2003 David Morgan City Manager City of Anaheim 200 S. Anaheim Boulevard Anaheim, CA 92805 SUBJECT: Sewer System Waste Discharge Requirements The County of Orange , the Orange County Sanitation District (District), and the cities and sanitation agencies in Orange County are in the process of developing a comprehensive program to comply with the requirements of the Regional Water Quality Control Board (RWQCB's) Sewer System Waste Discharge Requirements (WDR). A WDR Steering Committee, composed of a group Of the co-permittees, meets monthly to monitor progress and develop program elements . By this letter, I would like to solicit your cooperation and a contribution of $36 ,287 for two important WDR program ·compliance elements. 1. FOG Control Program The co-permittees are jointly conducting a Fats, Oils, and Grease (FOG) Control Study (Study) to promote compliance with the requirements of the RWQCB's WDR. The Study is being conducted in a phased approach, with the results of Phase I determining the scope of the subsequent phases. The Study will provide FOG control and ordinance building blocks which each co-permittee will be able to utilize to build an effective FOG Control Program that meets the requirements of the RWQCB. One of the high priority action items identified in Phase I is field-testing of three promising technologies: automatic grease traps, interceptor monitoring devices, and biological additives. The co-permittees believe that field-testing is essential for determining whether th ese technologies have merit and whether they should remain as options for co-permittees to utilize in a FOG Control Program . For more detailed information on this phase of the work, please refer to the attached scope of work {Attachment I). The total proposed cost of Phase II is $300,000. To proceed, there is a need to decide the level of participation and to establish the funding mechanism. As we did in Phase I, the District is prepared to administer the study and provide staff time to manage the project. It was the ---------·-__ ,,, __ ------------.. ______ ,_,, ___ ·--·--·-------·-- To maintain world-class leadership in wastewater and water resource manage ment. David Morgan, City of Anaheim Page 2 April 18, 2003 consensus of co-permittees in a meeting on March 13, 2003, that the co- permittees co-fund Phase II through a ''fair share" formula based on population (Attachment 11). Please note that the District's contribution is subject to final approval by the Board of Directors. Please be advised that we will only proceed with Phase II upon receipt of funding from the co-permittees, which should occur no later than July 2003 to meet the December 2004 RWQCB compliance deadline. 2. SSO Reporting Program The WDR requires monthly reporting of sanitary sewer overflows (SSOs). The current format for transmitting this information to the RWQCB and other regulatory agencies is tim~-consuming and not user-friendly. Based on feedback received from many of the co-permittees, the WDR Steering Committee is suggesting an easy-to-use, labor-saving, web-based system to collect, process, and report SSOs. Information may be typed into fixed fields , and SSO photos, sketches, and additional data may also be posted. This new system, when tested, would eventually be given to the RWQCB and State Board for their use and ownership as a turnkey product. The District's Information Technology staff has estimated the development costs to be $30,000. Recurring costs for maintenance and changes would be borne by the State or Regional Board . The District will underwrite the costs to facilitate development of a prototype for stakeholders to evaluate. We will also be se~king grants or available state funds to cover these costs. As part of a fair-share approach, the District is asking our local cities and sewering agencies to participate, should state funds not be available . The District would like your financial support in developing this product. I believe that spreading out these costs, in the interest of reducing long-term labor associated with the reporting effort, makes sense. Please review the attached cost allocation table provided in Attachment II . This table displays your fair-share allocation of the costs for the Phase 11 FOG Control Study David Morgan, Ci ty of Anaheim Page 3 April 18, 2003 and the SSO reporting database. I would very much appreciate your favorable consideration of this request, and ask that you complete and return the notice of intent to participate (example provided in Attachment Ill) by May 16, 2003. If you have any questions, please contact my staff who are working o n these program elements. For FOG issues, please telephone Adriana Rene s cu or Mark Kawamoto at (714) 593-7435 or (714) 593-7424, respectively . For SSO reporting , please call Nick Arhontes at (714) 593-7210. Blake P. Anderson General Manager BAP:AR :NA:ds g:\wp.dta\ls\640\fog\fog & sso letter.doc Enclosures c: Keith Linker, City of Anaheim Attachment I ORANGE COUNTY SANITATION DISTRICT FATS, OILS, AND GREASE CONTROL STUDY-PHASE II Phase 11 of the study is a field-based effo~ to test and measure the performance of various new or relatively undocumented technologies identified in Phase I that report success in controlling fats, oils, and grease (FOG). Phase II will involve multiple pilot test applications for the chosen technologies. At this point, the study has identified three technologies that reportedly have been successful at controlling FOG in certain applications in some food service establishments (FSEs) and collection systems in the United States. These technologies are described as follows: 1. Biological Additives -Microbial products used to digest FOG, added either at the kitchen sink or directly into the collection system. If successful, this technology can control private and public sewer line blockages, reduce the need for expensive sewer line cleaning, and eliminate the need for grease disposal. It may also be one of the only potential solutions to residential grease blockages. Some biological additives are successful when applied at the source (e.g., restaurant kitchens) or directly in the collection system using an automatic feeder. Therefore, the same biological additive may be pilot tested at an FSE, in the collection system, or in combination. The study has identified over 25 suppliers of FOG control biological additives and services to this point. 2. Automatic Grease Traps -Small grease-removal devices used in FSE kitchens, typically under the sink. Multiple improvements have been made on the conventional passive grease trap design that provide features with enhanced oil and water separation, automatic grease removal, or biological digestion of the grease. This technology may become essential for existing FSEs that cannot install grease interceptors. The study has identified seven suppliers of grease traps to this point. 3. Interceptor Monitoring Devices -Level monitoring devices installed in underground grease interceptors that provide continuous measurement of the solids and grease levels. If successful, this technology would replace the need to manually measure the solids and grease levels in interceptors, which is typically measured crudely, if at all. This should result in increased performance by grease interceptors due to proper maintenance. The work plan and detailed costs for Phase 11 are currently being developed. At this point, the cost estimate for Phase II is $300,000. The current plan is to pilot test 5-6 biological additives, 3-4 automatic grease traps, and 2-3 interceptor monitoring devices over a period of 6-9 months. The testing will include equipment installation, pilot test monitoring, wastewater sampling and analyses, and closed circuit television monitoring of the sewer lines before, during, and after the pilot testing. The California Restaurant Association is seeking volunteer restaurants for many of the pilot tests. The intent of the FOG technology pilot testing is to supply cities and agencies with a comprehensive, practical, and cost-effective approach to FOG control supported by scientific field testing, leading to a realistic plan for long-term reduction of SSOs associated with FOG buildup and blockages. A study protocol and field-testing plan will be developed that can be utilized for testing of similar technologies or other suppliers' products not included in this testing. Attachment II PROPOSED FAIR SHARE COST ALLOCATION 1 "Agency'' typically indic;ates a city in this case. Sanitation and water agencies, such as Rossmoor/Los Alamitos, Costa Mesa, El Toro Water, Garden Grove, Sunset Beach, Midway City, and Irvine Ranch, may serve one city or parts of several. Distribution of funding between cities a nd districts may be settled at the time of final funding by the concerned entities. 2 Estimate only, based on 2002 census numbers. Some cities have fluctuating populations. Final numbers will be verified by cities. 3 "Cost share" is based on population/age ncy. See footnote 1 • The allocations for OCSD and County of Orange are based on a 10% share of the project cost, not population. 4 The final figures will depend on the actual number of participants and if any supplemental funding (grants) a re pro cured . 5 "Unincorporated" includes th e County of Orange and OCSD uni ncorporate d a re ~s: __ .,. Attachment Ill NOTICE OF INTENT FOR PARTICIPATION IN PHASE II OF THE FOG CONTRO_L STUDY AND THE-SSO DATABASE Date: _______ _ o _______________________________________ __ {Agency). D (Name of Agency I City) will participate in Phase II of the FOG Control Study (Study) and SSO database and agrees, therefore, to co-fund both through a "fair share" population-based formula. I understand that Agency's share is approximately $ , based on a population of ------ and a proposed FOG Phase II and SSO Study cost of $330,000. The SSO share is a flat fee based on the estimated $30,000 cost of developing the database. I have reviewed the population estimate and: D it is correct to use for funding formula D it is not correct. Use the following population count: -------- (Population Count) I understand that based on this input and upon receipt of the notices of intent from the co- permittees, a final decision will be made whether to proceed and a funding share estimate will be provided, based on a final evaluation of the level of participation and funding needs. I understand that Phase II administration by the Orange County Sanitation District (District) and contracting consultant services are subject to approval and authorization by the District's Board of Directors. Please be advised that final commitment of participation by Agency is subject to approval by and will occur upon (Council I Board I Supervisors) execution of an understanding between the agency and the District. I understand that the District will not enter into a contract with the consultant conducting Phase II until all funding is received from participants. Also, I understand that Phase II is a continuation of Phase I and, therefore, it will be conducted by the same consultant, namely Environmental Engineering and Contracting, Inc. -----------------------------------~ (Name of Agency I City) will not participate in Phase II of the FOG Control Study and SSO database. Signature Date Name (Please Print) Title Return form to: Adriana Renescu, Source Control Orange County Sanitation District P. 0. Box 8127 Fountain Valley, CA 92728-8127 (Agency) June 10, 2003 Ms. Adriana Renescu ENVIRONMENTAL ENGINEERING & CONTRACTING, INC. 501 Parkcenter Drive , Santa Ana , CA 92705 Phone (714) 667-2300 Fa x (714) 667-2310 Orange County Sanitation Districts 10844 Ellis A venue Fountain Valley, CA 92708-7018 EEC Wl 147-4P Subject: Proposal and Cost Estimate to Conduct Phase II of the Orange County Fats, Oils, and Grease (FOG) Control Stud y -A Pilot Test Study of FOG Control Technologies Dear Ms. Renescu, Environmental Engineering & Contracting, Inc. (EEC) is pleased to present this proposal to conduct Phase II of the Orange County FOG Control Study. Phase II is a pilot test study of FOG control technologies in Orange County. EEC recently completed Phase I of the FOG Control Study which included researching potential FOG control technolo g ies. According to the study, less than 50% of the food service establishments (FSEs) in the Orange County portion of the Santa Ana Region utilize grease removal devices such as grease interceptors and passive grease traps to limit the FOG discharged to the sewer. For many of the FSEs with grease interceptors, they have not been an adequate solution to control grease blockages and SSOs due to inadequate design, lack of maintenance, and improper operation. The FOG Control Study Phase I Report (to be completed by Jun e 30, 2003) concluded that there are other existing technologies that may provide substantial FOG control benefits, but their level of objective scientific evaluation is extremely limited . Therefore, the study concluded that it is not prudent to include thes e technolo gies in a FOG control program until proper evaluation has been conducted. Phase II of the study is a field-based effort to tes t and measure the performance of various new or relatively undocumented technologies identified in Phase I that report success in controlling FOG. Phase II will involve multiple pilot test applications for the chosen technologies. At this point, the study has identified three technologies that reportedly have been successful at controlling FOG, in certain applications, at some FSEs and collection systems in the United States. These technologies are described as follows: 1) Biological Additives -Microbial products used to digest FOG, added either at a kitchen sink or directly into the collection system. If successfu l, this technology can assist in the control of private and public sewer line grease blockages, reduce the requirement for costly sewer EEC WI 147-4P June 10 2003 line cleaning, and reduce the need for grease disposal. Some bio!ogical additives have reportedly been successful when applied at the source (e.g., restaurant kitchens) or directl y in the collection system using an automatic feeder. Therefore, it is proposed that biological additives be pilot tested under monitored conditions at FSEs and in the collection system. Th e study id entified over 25 suppliers of FOG control biological additives and services. CCTV Inspection of Placentia sewer line (Courtesy of Ennix). 1. CCTV image before biological additive addition, showing grease build-up. 2. CCTV image after 50 days of biolog ical additive addition, without sewer line cleaning. 2) Automatic Grease Traps -Small grease removal devices (typically less than 50 gallons) used in FSE kitchen s, typically under the sink. Multiple improvements have been made on the conventional passive grease trap design that provides features with enhanced oil and water separation, automatic grease removal, or biological digestion of the grease. It is proposed to pilot test this technology at multiple FSEs to evaluate its grease control capabilities along with the potential sanitation issues related to kitchen use. The study identified 7 suppliers of automatic grease traps. Automatic Grease Trans (Courtesv ofThermaco and Hil?hland Tank) 2 .> • EEC WI 147-4P June 10. 2003 3) Interceptor Monitoring Devices -Level monitoring devices ins!:alled in underground grease interceptors that provide continuous measurement of the solids and greas e level. If successful, this technology would replace the need to manually measure the solids and grease levels in interceptors, which is typically measured crudely, if at all. This would result in increased performance by grease interceptors due to proper maintenance. It is proposed to pilot test this technology at multiple FSEs. Interceptor Monitoring Device (Courtesy of Worldstone, Inc.) Manholes Inlet Potential £Manhole r-;: 1: t> ----· t_ Sample Box Grease Interceptor with Monitoring Device installed (location may vary) 3 Outlet EEC WI l 47-4P June 10 2003 The Phase I report included a backbone ordinance for the cities and agen~ies in Orange County · to use in developing their own FOG control programs based on the findings and recommendations in the study. The study included a recommendation for a 2-year "conditional stay'' of the requirement for a grease interceptor for existing FSEs that are not equipped with an interceptor. The primary purpose of the 2-:-year stay is to allow FSEs and agencies to evaluate potential alternatives to grease interceptors during that time. Biological additives and automatic grease traps are currently the most promising technology alternatives that may potentially be· used in FOG control programs for some FSEs without interceptors. The study also recommended extensive agency monitoring of grease interceptors due to the importance of proper maintenance of interceptors. Interceptor monitoring devices are currently the most promising technology to provide automated monitoring with minimal agency involvement. A FOG Control Technology Matrix was developed during Phase I which included general cost and performance data on over 25 suppliers of the three technologies. Phase I also included the development of draft pilot study protocols for the three technologies. The Phase II pilot tests will be designed to determine the potential overall effectiveness, practicality, and cost of these technologies and the role that they may have in Orange County FOG control programs. The field testing will involve testing specific products so that the technologies can be properly evaluated, however the evaluation is not designed to endorse or exclude any company or product. At this point, the following Orange County cities or sanitary districts have unofficially volunteered their service areas for the pilot testing: • Orange County Sanitation District • Costa Mesa Sanitary District • Garden Grove Sanitary District • City of Anaheim • City of Newport Beach • City of Fullerton • City of Santa Ana Scope of Work EEC proposes the following scope of work to complete the Phase II pilot testing: 1) Utilizing the draft pilot test protocols developed in Phase I, develop a field testing work plan for the three technologies. The field testing work plan will include the pre-selection criteria for the suppliers, the set-up of the field equipment, the operation and monitoring of the equipment and products, and the evaluation criteria of the products. The work plan will be submitted to a stakeholder review committee for approval before proceeding. 2) The following tentative general plan is proposed for each of the technologies: 4 • •J EEC Wl 147-4P June 10. 2003 A. Biological Additives (applied at FSEs): 2-3 separate products_ installed at 2-3 FSEs · each (6 months duration). Biological Additives (applied in the collection system): 2-3 separate products installed at 2-3 sewer line "hot spo~s" each ( 6-9 months duration). Maintenance and monitoring will require a minimum of bi-weekly field inspections by EEC at each FSE or sewer line hot spot. The monitoring will primarily consist of verifying the dosage of the biological additive, toxicity sampling of the wastewater, and· CCTV inspections of the progress of the test. B. Automatic Grease Traps: 3-4 separate products installed at 3 FSEs each (6 months duration). Maintenance and monitoring will require a minimum of weekly field inspections by EEC at each FSE for the first 2-3 months. The monitoring will primarily consist of evaluating potential problems, measuring the amount of FOG removed by the unit, and collecting and analyzing influent and effluent wastewater samples. C. Interceptor Monitoring Devices: 2-3 separate products installed at 3 FSEs each (6 months duration). Maintenance and monitoring of the interceptor monitoring devices will require a minimum of bi-weekly field inspections by EEC. The monitoring will primarily consist of manually measuring the water level, the solids and grease build up, the temperature in the interceptor, and comparing these measurements with the units' datalogger readings. 3) Coordinate with the volunteer cities/districts, FSEs, and technology suppliers regarding issues such as equipment installation and maintenance, FSE access, monitoring, and sampling. EEC has been working closely with the local chapter of the California Restaurant Association (CRA) during the Phase I study. The CRA has already supplied volunteer restaurants for the pilot tests. The technology suppliers will be asked to provide their technical service representatives for the test period. The Orange County Health Care Agency (OCHCA) will be asked to witness the automatic grease trap tests in order to evaluate the potential sanitation issues involved in the operation and maintenance of the units. 4) The data from the pilot tests will be presented in a report that will summarize the data, list significant findings, and provide conclusions and recommendations. The data will include laboratory test results, field measurements, and digital CCTV records. The benefits of the Phase II FOG control technology pilot testing will include, at a minimum, the following: • Determine the potential overall feasibility, practicality, effectiveness and general capital and operating cost of promising FOG control technologies • Determine the potential role that these technologies will play in the Orange County FOG control programs 5 EEC WI 147-4P June 10. 2003 • Collaborate with the stakeholders and significant partners (e.g., FSEs, Restaurant · Association, and OCHCA) on developing technology solutions to grease control • Provide existing FSEs without interceptors with potential grease control alternatives • Provide a possible cost effective alternative to costly sewer line hot spot cleaning • Provide a potential monitoring tool .to ensure the proper maintenance of interceptors by FSEs Deliverables and Schedule (if initiated by August 1, 2003): • • • • Pilot Test Work Plan Pilot Test Interim Report Pilot Test Completion Data Phase II Report Cost Estimate: Completion Date October 1, 2003 May 1, 2004 September l, 2004 December 1, 2004 Based on the scope described above, EEC offers the following cost estimate: Phase II FOG Control Technology Pilot Test Study $300,000 Payment Terms: The proposed payment terms are as follows: • 20% upon completion and OCSD approval of the Pilot Test Work Plan • 30% upon completion and OCSD approval of the Pilot Test Interim Report • 30% upon completion and OCSD approval of the Pilot Test Completion Data • 20% upon completion and OCSD approval of the Phase II Report EEC is eager to complete the FOG control work that was initiated in Phase I of the FOG Control Study to reduce SSOs and benefit Orange County cities, agencies, and FSEs. Please call me if you have any questions. Sincerely, Environmental Engineering & Contracting, Inc. DRAFT John Shaffer President 6 r \I .•. ~ "·!. ,' MINUTES OF FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING Orange County Sa:titation District Wednesday, July 9, 2003, 5:00 p.m. A meeting of the Finance, Administration and Human Resources Committee of the Orange County Sanitation District was held on July 9, 2003, at 5:00 p.m., in the District's Administrative Office. (1) The roll was called and a quorum declared present, as follows: FAHR COMMITTEE MEMBERS: Directors Present: Brian Brady, Chair Roy Moore, Vice Chair Alberta Christy Bill Dalton Mike Duvall Joy Neugebauer Shirley McCracken, Board Chair Steve Anderson, Vice Board Chair Directors Absent: James W. Silva (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS STAFF PRESENT: Blake P. Anderson, General Manager Gary Streed, Director of Financeff reasurer Lisa Tomko, Director of Human Resources Carol Beekman, Communications Services Manager Mike White, Controller Penny Kyle, Committee Secretary Jeff Reed Lisa Arosteguy Jan Collins OTHERS PRESENT: Tom Woodruff, General Counsel Steve Filarsky, Special Labor Counsel Randy Fuhrman Randy Fuhrman thanked those Directors who supported the 15% rate increase instead of 10%. However, he expressed concern that at 15%, the District would have a debt of $1 billion to pay. He also expressed support for the $350,000 increase in the temporary services contract being considered that evening. (4) REPORT OF THE COMMITTEE CHAIR Chair Brady reported that the FAHR Committee would be meeting on August 13 at 5:00 p.m. Minutes of the Finance, Administration and Human Resources Committee Meeting Page2 June 11, 2003 (5) REPORT OF THE GENERAL MANAGER The General Manager had no report. (6) REPORT OF DIRECTOR OF FINANCEfTREASURER Gary Streed, Director of Finance!Treasurer, referred the Directors to the Treasurer's Report distributed to the Directors that evening, as well as two additional documents relative to the upcoming issuance of certificates of participation (preliminary official statement and a revised financing schedule). (7) REPORT OF DIRECTOR OF HUMAN RESOURCES The Director of Human Resources had no report. (8) REPORT OF COMMUNICATIONS SERVICES MANAGER Communications Services Manager Carol Beekman reported there would be a groundbreaking ceremony on July 14th beginning at 4:00 p.m. at the Orange County Water District for the initial microfiltration plant, which is an important component of the groundwater replenishment system. Updates were then provided on scheduled neighborhood meetings in regard to the Warner Avenue Relief Sewer Project and the Newport Beach Trunk Sewer Force Main Project. (9) REPORT OF GENERAL COUNSEL General Counsel had no report. (10) CONSENT CALENDAR ITEMS a. The Chair ordered that the June 11, 2003 minutes for the Finance, Administration and Human Resources Committee meeting be deemed approved, as mailed. b. FAHR03-55 Recommend to the Board of Directors to receive and file Treasurer's Report for the month of June 2003. c. FAHR03-56 Receive and file Certificate of Participation (COP) Monthly Report. d. FAHR03-57 Receive and file Employment Status Report as of June 18, 2003. e. FAHR03-58 Receive and file OSHA Incidence Rates and Workers' Compensation Claims and Costs Report. Minutes of the Finance, Administration and Human Resources Committee Meeting Page3 June 11, 2003 f. FAHR03-62 Receive and file FY 2003-04 Excess Workers' Compensation and MOTION: General Liability Insurance Renewal staff report. It was moved, seconded and duly carried to approve the recommended actions for items specified as 1 O(a) through (f) under Consent Calendar. END OF CONSENT CALENDAR (11) ACTION ITEMS a. FAHR03-59 Recommend to the Board of Directors to: MOTION: 1. Approve an increase to the Temporary Employment Services Purchase Order contract authority for an additional $350,000, increasing the total authorized amount from $1,500,000 to an amount not to exceed $1,850,000 to pay additional expenditures for FY02/03; and, 2. Approve an increase to the Temporary Employment Services Purchase Order contract from $1,000,000 to an amount not to exceed $1,850,000 for FY03/04. Lisa Tomko gave a brief report on the District's utilization of temporary employment services, and discussed prior authorizations by the FAHR Committee and the Board of Directors. It was moved, seconded and duly carried to recommend approval to the Board of Directors. b. FAHR03-60 Recommend to the Board of Directors to receive the draft documents MOTION: supporting and authorizing the Series 2003 Certificates of Participation in an amount of $280 million and forward them to the Orange County Sanitation District Financing Corporation for approval at the July 23, 2003, meeting. Gary Streed referred to the Preliminary Official Statement and revised financing schedule distributed to the Directors that evening. The rating agencies are scheduled to meet with key staff on July 25th. Bids will be taken on August 12th, the Certificates of Participation (COP) should be issued on August 13th, and the funding should be received on August 26th. It was also noted that the debt policy would need to be adjusted in August or September. Mr. Streed also advised the annual meeting of the Orange County Sanitation District Financing Corporation would be held in July, and the corporation would participate as a third party, as required, for the issuance of the COPs. It was moved, seconded and duly carried to recommend approval to the Board of Directors. Minutes of the Finance, Administration and Human Resources Committee Meeting Page4 June 11, 2003 c. FAHR03-61 Recommend to the Board of Directors to adopt Resolution MOTION: No. OCSD03-_, Authorizing the District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's Investment Policy Statement and Performance Benchmarks for FY 2003/04; and Repealing Resolution No. OCSD02-13. Mike White, Controller, reported the investment policy must be reviewed on an annual basis, and briefly discussed two minor clarifications to the policy. It was moved, seconded and duly carried to recommend approval to the Board of Directors. (12) INFORMATIONAL PRESENTATIONS There were none. (13) CLOSED SESSION The Committee convened in Closed Session at 5:21 p.m. pursuant to Government Code Section 54957.6 to discuss and consider Agenda Item No. 13(a) (1). Agenda Item No. 13(a) (2) was removed for consideration. Confidential Minutes of the Closed Session held by the Finance, Administration and Human Resources Committee have been prepared in accordance with California Government Code Section 54957.2, and are maintained by the Board Secretary in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. There were no reportable actions taken by the Committee re Agenda Item No. 13(a) (1 ). RECONVENE IN REGULAR SESSION: At 5:41 p.m., the Committee reconvened in regular session~ (14) OTHER BUSINESS. COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS. IF ANY Blake Anderson, General Manager, reported the annual fees for the State Water Regional Quality Control Board (SWRQCB), which fund its administration costs, will be raised from $20,000 to $100,000. The formula for the annual fee is based on level of flows. At the request of Director Cook, Director McCracken asked the Directors if they would consider putting on a future committee agenda a discussion regarding the level of proactive staff feedback given at future board meetings when questions/comments arise from the public or Directors that may not be completely factual. The meeting of June 25th was provided as an example of when such comments occurred. Blake Anderson clarified that when the issue goes into discussion among the Directors, staff does not participate or intervene unless a specific issue is raised or a specific question is asked of staff. It was also noted that city councils differ in terms of degree of interplay that occurs between senior staff and the council. Minutes of the Finance, Administration and Human Resources Committee Meeting Pages June 11, 2003 Directors discussed the events of the June 25th meeting and made the following comments and observations: • The number of people within a home and their water usage needs to be considered in setting user rates. Some cities do limit the number of people, and a flat fee is not always appropriate. It was suggested in the future that staff investigate ways to determine water usage. • Staff should provide a list of capital improvement projects when rates are confirmed next year, with the projects prioritized and the impacts to the rate structure if a project is deferred. • Public outreach suggestions: o Place large signs strategically throughout the District's jurisdictional area listing upcoming projects, the benefits of the project, and the funding costs o Schedule presentations for a director(s) and staff member to jointly present to the Chambers of Commerce, Lions Club, Rotary Club and Kiwanis Club. (15) MATIERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. (16) CONSIDERATION OF UPCOMING MEETINGS The next FAHR Committee meeting is scheduled for August 13, 2003 at 5 p.m. (17) ADJOURNMENT The Chair declared the meeting adjourned at 6:15 p.m. Submitted by: PennyM. K FAHR Committee Secre G:\wp.dta\agenda\FAHR\FAHR2003\0503\051403 FAHR Minutes.doc '' ., PDC COMMITTEE Meeting Date To Bd . of Dir. 06/05/03 07/23/03 AGENDA REPORT Item Number Item Number Orange County Sanitation District FROM: David Ludwin, Director of Engineering Originator: Jim Herberg, Engineering Manager PDC0 3-39 13(b) SUBJECT: IRVINE BUSINESS COMPLEX I TUSTIN MARINE CORPS AIR FACILITY SEWER SERVICE TRANSFER AGREEMENT GENERAL MANAGER'S RECOMMENDATION Approve Sewer Service Transfer Agreement for Irvine Business Complexffustin Marine Corps Air Facility, with Irvine Ranch Water District in a form approved by General Counsel. SUMMARY • The Irvin e Business Complex (IBC) and the Tustin Marine Corps Air Facility (TMCAF) are located in the Orange County Sanitation District (OCSD) Revenue Area 7 (RA-7); and are also located within the existing service area of the Irvine Ranch Water District (IRWD). • OCSD is responsible for local sewer service in the IBC. The Navy has maintained local sewers in the TMCAF, but will no longer provide sewer service under plans to redevelop the base. The IBC and TMCAF, referred to as the ''transfer area", are shown on Exhibit A in the attached draft agreement. • In 2001, the concept of moving loca l sewer service responsibility in the transfer area to IRWD was discussed with the Steering Committee. The Committee authorized Staff to negotiate an agreement with IRWD to assume local sewer responsibility. • Staff and General Counsel from IRWD and OCSD have drafted the IB C/TMCAF Sewer Service Transfer Agreement. The proposed agreement includes the following provisions: • The transfer area will move from RA 7 to RA 14. o IRWD will own , maintain , and perform required capital improvements to the local sewer facilities in the transfer area, including construction of the new Armstrong Trunk Sewer. o IRWD will co ll ect its own sewer service and cap ital charges from parcels in the transfer area, as they do in the rest of their service area . o OCSD wi ll not impose or collect capital facilities charges or user fees from parcels in the transfer area. G:\wp.dta\agenda\Board Agenda Repons\2003 Board Agenda Repo ns\0703\ltem 13(b).IRWD.doc Revised: 8/10/98 Page 1 o IRWD will pay Capital Outlay Revolving Fund charges and service fees annually to OCSD, based on the flow from the transfer area, as they do in the rest of RA-14. o Property tax revenues from the IBC presently going to OCSD for local sewer maintenance will be transferred to IRWD. PROJECT/CONTRACT COST SUMMARY Under the proposed Agreement Orange County Sanitation District (OCSD) will no longer collect annual user fees or capital facilities charges for new connections . OCSD will also pass the local property tax receipts collected in the transfer area for local sewer service to Irvine Ranch Water District (IRWD). IRWD will collect user fees and connection fees in the transfer area, and will pay OCSD for Capital Outlay Revolving Fund charges and service f ees based on monthly flow from the transfer area, as they do in the rest of RA-14. OCSD will no longer be responsible for ongoing local sewer system maintenance or capital improvements in the transfer area, including construction of the Armstrong Trunk Sewer. I RWD will be responsible for these costs. BUDGET IMPACT D This item has been budgeted. (Line item : ) D This item has been budgeted , but there are insufficient funds. D This item has not been budgeted. [8J Not applicable (information item) The FY2003-04 Budget does not include capital improvements or operational expenses for local sewers in the transfer area, in anticipation of the Agreement taking effect July 1, 2003. ADDITIONAL INFORMATION The Exhibits from the Draft Agreement show the transfer area boundaries, and the sewers th at will be owned by IRWD when the agreement is in place . Staff has made informational presentations on the Agreement at the February 2001 and May 2003 Steering Committee meetings. ALTERNATIVES Not approving the agreement. OCSD would continue to provide local sewer service in the transfer area and would be responsible for new capital improvements that are presently not included OCSD's Capital Improvement Program. G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 13(b ).I RW D.doc Revised : 8/10/98 Page 2 .; . < • ... CEQA FINDINGS None. ATTACHMENTS Exhibits "A," "B," and "C" from Draft Irvine Business Complex/Tustin Marine Corps Air Facility Sewer Service Transfer Agreement. JDH:sa G:\ntglobal\Agenda Draft Reports\PDC\IBC Agenda Report.doc G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 13(b).IRWO.doc Revised: 8/10/98 Page3 i 'IDNUt ""'ON I ' ""-""8 ¥ W>£ \IM>E ' May, 2003 ... SF .!!' ... ' EXHIBIT "A" SANITARY SEWERS TO BE RETAINED BY ORANGE COUNTY SANITATION DISTRICT (OCSD) g ) ii M :s s ~, ' Q-..... /' "~ .I I~ ~ I ~..,, #~ ,1 ~)· q ~ llE<lll>' 1>\rF' ~· ~ ,?, / L /. ··.,,./; --"-" .. ~ /1 " T, f "-.: " ~~ ~ ~ / Michelson PS ..... ,/Mct<lJ!Olfi '\. ,/ ' / ,/ ~ /' ~ l & ~ v ;p-• Xfac Arthur PS ,/ ~· ,/ / ,/ , ~/ ' Go.l"llew N + 1 "4Uu !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! LEGEND TRANSFER AREA BOUNDARY-!B C TRANS FER AR EA BOUNDARY • MCAS TUSTIN OCSD TRU NK SEWERS TO BE RETAINED B Y OCSD IN IBC OCSD Engineering Geographic Information Systems ""l-n , .. P'·"ui. ... ..: ..-..oJ•r•"''..,'"• ;r•N...Jt.: IH V"A~t:ll !'::;, Li.4 ~ t ••' ,,,, ... •:"VtnJ't·•·J ·,"T W°Jl,,&.\..";r ~r.i:: ~A...-..P"'l1.1 llr.11•~4 1A'1<t1 tn '"f"l"4•wr .• "ll ,.,.:w.!P<""'"l "M f,\•" ... ,.W ::u1<"lt t.••o ·-.u a .~IMprc•,..,...111nrt1--n1uofto1 l "'i ~t ,N.o:,;. tl>J to"\.) EXHIBIT "B" LIST OF SANITARY SEWERS TO BE TRANSFERRED TO IRVINE RANCH WATER DISTRICT AND LIST OF SEWERS TO BE RETAINED BY ORANGE COUNTY SANITATION DISTRICT Name of Street Containing Sewer IBC Sewer Atlas Sheet 1. Jamboree Road (Stanford Research) 101NW (Note: The portion of the 1 O" sewer shown in blue that is in and east of Jamboree Road, initially called the Stanford Research Institute Off-site sewer, will be transferred to IRWD. The remaining 12" portion west and north of Jamboree receives flow from the City of Newport Beach, outside of the IBC, and will be retained by OCSD. This flows into the MacArthur Pump Station, also to be retained by OCSD). 2. Campus Drive and Jamboree 101NE (Note: all sewers shown in red & in blue will be transferred to IRWD). 3. Near Fairchild Road (Stanford Research) 101 SE (Note: the 1 O" sewer shown in blue, initially called the Stanford Research Institute Off-site Sewer, will be transferred to IRWD). 4. Near Jamboree (Stanford Research) 101SW (Note: the 1 O" sewer shown in blue, initially called the Stanford Research Institute off-site Sewer, will be transferred to IRWD. This is the identical 10" sewer that is reproduced in portions of grids 101NW, 101SE and 101SW.). 5. Carlson Ave., Campus Dr., "A" St., & "C" St. 102NW (Note: all sewers shown in red & in blue will be transferred to IRWD). 6. MacArthur Blvd. & Douglas St. 105NW (Note: all sewers shown in red & in blue will be transferred to IRWD). 38. MacArthur, Michelson, Von Karman, Dupont, 1 OSNE Business Center Dr. & San Diego Fwy (Note: the 21" sewer shown in red in Michelson Drive, east of Von Karman, terminating at the OCSD manhole labeled as MAA071, will be transferred to IRWD. The entire 30" & 42" sewer shown in red in Von Karman Dr. will be retained by OCSD. The 18" sewer shown in red in Business Center Dr. & parallel to the San Diego Fwy, will be transferred to IRWD. All other sewers shown in blue will be transferred to IRWD). 38. Martin, Dupont, Von Karman, Campus, 105SE Bardeen, Teller, Jamboree, "A" & "D" St (Note: the 15" sewer shown in red in Campus Dr. west of Von Karman, terminating at the manhole labeled as MAA093, and the entire 30" sewer shown in red in Von Karman will be retained by OCSD. All other sewers, whether shown in red or blue, including the 21" sewer shown in red in Campus east of Von Karman, terminating in the manhole labeled as MAA093 will be transferred to IRWD). 9. MacArthur, Campus & Martin 105SW (Note: the 8" sewer shown in red on MacArthur north of Campus, terminating at the manhole labeled as MAA 104, and the 8" sewer shown in blue in Martin will be transferred to IRWD. The 12" & 15" sewer shown in red along Campus and the two sewers shown in red and blue south of Campus with no street names will be retained by OCSD). 10. Von Karman, Morse, McCabe, White, Teller, 106NW Michelson, & Jamboree (Note: the 42" sewer shown in red in Von Karman will be retained by OCSD. All other sewers, whether shown in red or blue, including the 21" sewer shown in red in Michelson and the 18" sewer shown in red parallel to San Diego Freeway, terminating at the manhole labeled as MAA066, will be transferred to IRWD). 11. White, McCabe, Jamboree, Main St. & Union 106NE (Note: All sewers, whether shown in red or blue, except everything downstream of the 60" starting at the manhole labeled as MAA043 and flume metering equipment, will be transferred to IRWD). 12. Michelson Drive 106SE (Note: all sewers whether shown in red or blue on this portion of Michelson Dr., including the Michelson Pump Station, & its incoming & outgoing lines will be transferred to IRWD) 13. Teller, Jamboree, Michelson, "A" St., 106SW Carlson and surroundings (Note: all sewers, whether shown in red or in blue, including the sewer on A Street, will be transferred to IRWD} 14. Newport Fwy, Cowan, McDurmottW&E, Fitch, 109NW Redhill, Mitchell, & Main St. (Note: the 24" & 27" sewer shown in red in Main St., terminating at the manhole labelled as JAA002, and all other sewers shown in blue will be transferred to IRWD. The 30" sewer shown in red in Main St. discharging from the Main St. Pump Station and terminating at the manhole labeled as JAA002 will be retained by OCSD. The 63" sewer shown in red in Redhill Ave., terminating at the manhole labeled as JAA002 will be retained by OCSD. 2 . ' The two sections of 66" sewers shown in red in Main St., one commencing at the manhole labeled as JAA002 and the other terminating at the Main Street Pump Station will be retained by OCSD. The Main St. Pump Station and the dual 42" force mains commencing at the Main St. P. S. will be retained by OCSD). 15. Mitchell, Fitch, Cowan, Redhill, Reynolds, 109NE Gillette, MacArthur, Skypark, and Armstrong (Note: all sewers shown in blue will be transferred to IRWD. All sewers shown in red in Redhill and the 27" and 30" sewer shown diagonally in red will be retained by OCSD). 16. Main St., Executive Park, MacArthur, Gillette, 109SE Koll Center & Business Center (Note: the 18" & 21" sewer shown in red in Main St., terminating at the manhole labeled as MAA044, and all other sewers shown in blue will be transferred to IRWD. The entire 66" sewer shown in red in Main St., and the entire 18" sewer shown in red in Business Center Dr. & parallel to the San Diego Freeway will be retained by OCSD). 17. Main St. and Redhill Ave. 109SW (Note: the 21" sewer shown in red in Main St., terminating at the manhole labeled as MAA019; as well as the 24" sewer shown in red in Main St., commencing at the manhole labeled as MAA 114, will be transferred to IRWD. The 30" sewer shown in red crossing Main St. diagonally, including the manholes labeled as MAB001 and MAB002; as well as the 66" sewer shown in red in Main St., which includes the manhole labeled as MAA019, and the dual 42" DIP force mains shown in red will be retained by OCSD). 18. Gillette, Armstrong, Reynolds, Kaiser, 11 ONW McGaw, Langley, & Von Karman (Note: All sewers, whether shown in red or blue, including the McGaw Pump Station and its force main, will be transferred to IRWD. OCSD has designed Contract No. 7-35 that will be built by IRWD after the new proposed Armstrong Subtrunk Sewer in Armstrong Ave. is finished. This Contract No. 7-35 will include a new gravity sewer in McGaw Ave. to connect to the Armstrong Subtrunk and will allow the McGaw Pump Station to be abandoned in the future). 19. Dewar, Von Karman, Alton & McGaw 110NE (Note: all sewers, whether in red or blue, will be transferred to IRWD). 20. Cartwright, Davinci, Main St., Derian, Kelvin, 11 OSE McGaw, Jamboree, & Murphy (Note: All sewers, whether shown in red or blue, including the 15" shown in red in Jamboree, the 18" & ~1" shown in red in McGaw, and the 18", will be transferred to IRWD). (The 60" sewer shown in red in Main St. will be retained by OCSD) 3 · 21. Gillette, Main St., Koll Center, Von Karman 110SW Morse, Cartwright, & White (Note: the 66" sewer shown in red in Main St., west of Von Karman, commencing at the manhole labeled as MAA025, as well as the 36" & 48" sewer shown in red in Von Karman, south of Main St., terminating at the manhole labeled as MAA025, will be retained by OCSD. All the other sewers, whether shown in red or blue, including the 10" sewer shown in red in Von Karman, north of Main St., terminating at the manhole labeled as MAA026, and the entire 18" & 21" sewer shown in red in Main St. on the south side of the street, will be transferred to IRWD. The 60" sewer shown in red in Main St., mostly east of Von Karman, terminating at the manhole labeled as MAA025, will be retained by OCSD). 22. Hale, Milliken,Dubridge, Alton, Richter, Noyes, 111 NW Jamboree, Barranca, Beckman, Corporate Park, & Murphy (Note: all sewers in red and in blue will be transferred to IRWD). 23. Corporate Park, Barranca, & Construction Circle 111 NE (Note: all sewers in red and in blue will be transferred to IRWD). 24. Jamboree, McGaw, Murphy, & Alton 111SW (Note: all sewers in red and in blue will be transferred to IRWD). 25. Pullman, Duryea & Alton 113NE (Note: all sewers shown in blue will be transferred to IRWD). 26. Pullman, Daimler, MacArthur, Cowan, 113SE Fitch, McGaw, Eastman, Reynolds, & Redhill. (Note: the 54" & 63" as well as the 27" sewers shown in red in Redhill Ave. will be retained by OCSD. All other sewers shown in blue will be transferred to IRWD). 27. Cowan 113SW (Note: all sewers shown in blue will be transferred to IRWD). 28. Redhill Ave. 114NW (Note: 24" and 42" sewers in Redhill in red will be retained by OCSD). 29. Redhill, Barranca & Aston 114NE (Note: the 24" and 42" sewers shown in red in Redhill will be retained by OCSD. The 8" sewer shown in blue in Aston St. will be transferred to IRWD). 30. Aston, Deere, Armstrong, Alton, & Von Karman 114SE _ (Note: all sewers whether shown in red or in blue will be transferred to IRWD). 4 ... 31. Redhill, Gillette, Kaiser, McGaw, Langley 114SW Kettering, Alton, Aston, Browning, Stanley & Armstrong (Note: the 24" & 27" as well as the 42" & 54" sewers shown in red in Redhill will be retained by OCSD. All other sewers shown in red and in blue will be transferred to IRWD). 32. Construction Circle, Jamboree & Warner Avenue 115SE (Note: all sewers shown in blue will be transferred to IRWD). 33. Von Karman & Hale Avenue 115SW (Note: all sewers shown in blue will be transferred to IRWD). 34. Warner Avenue & Jamboree 116SW (Note: all sewers shown in blue will be transferred to IRWD). Name of Street Containing Sewer Tustin Sewer Atlas Sheet 35. Chambers, Franklin, Michelle & Myford 120NE (Note: all sewers shown in green will be transferred to IRWD). 36. Franklin & Dow 120SW (Note: all sewers on Franklin and Dow Avenue will be transferred to IRWD). 37. Franklin, Walnut, Myford, Dow, Bentley & Sinclair 120SE (Note: all sewers in green and red will be transferred to IRWD). 38. Myford & Dow 116NE (Note: the red and green sewers on Dow will be transferred to IRWD). l:\IRWD Exhibit B_v02.doc 5 ' .; • I May, 2003 EXHIBIT "C'·' ARMSTRONG SUBTRUNK SEWER (CONT. 7-27) MAIN ST. TO BARRANCA PARKWAY AND MCGAW SUBTRUNK (CONT. 7-35) ARMSTRONG AVE. TO VOM KARMAN AVE. AND MCGAW PUMP STATION ABANDONMENT N + 0 ::-:. '"~ LEGEND -----TRANSFERAREABOUNOARY·IBC ------• TRANSFER AREA BOUNDARY • MCAS TUSTIN ADDITIONAL TRUNK SEWERS TO BE BUil T BY IRWD IN IBC OCSD Engineering Geographic Information Systems ' ~ ... 1 Miles ,.... .................. ..... ~ ...... .,.,....,...,Jtp..._ •............ : IH(.r~tjl!::~ li4 'UD. I 111· •l'no•""f'l"'llh·" ·.,T ~r::irr. .,....,.~ •r.u•~tn,...,..r,.·ntiw·11....,, .. 1,.""'1""""'"'.,,,.'·'"·"'·~· ... tlrl(U ... o-~u t,..clOdlMPIC',.nftlr f;l"'TllHM011-t~t: ~~ .,..., ~ FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Michael White, Controller Meeting Date 07/09/03 Item Number FAH R03-55 SUBJECT: TREASURER'S REPORT FOR THE MONTH OF JUNE 2003 GENERAL MANAGER'S RECOMMENDATION Receive and file Treasurer's Report for the month of June 2003. SUMMARY To Bd. of Dir. 07/23/03 Item Number 14(b) Pacific Investment Management Co . (PIMCO), serves as the District's professional external money manager, and Mellon Trust serves as the District's third-party custodian bank for the investment program. Some funds are also deposited in the State of California Local Agency Investment Fund for liquidity. The District's Investment Policy, adopted by the Board, includes reporting requirements as listed down the left most column of the attached PIMCO Monthly Report for the "Liquid Operating Monies" and for the "Long-Term Operating Monies" portfo lios . The District's external money manager is operating in compliance with the requirements of the Investment Policy. The portfolio contains no reverse repurchase agreements . As shown on page 2 of the attached PIMCO's Performance Monitoring and Reporting Report for the Long-Term Operating Monies, there is a investment policy compliance exception pertaining to the holding of two securities within PIMCO 's Long-Term Operating Monies Portfolio that had an acceptable rating at the time of purchase but has since fallen below the minimum rating allowed by the investment policy. The District's investment policy requires a minimum rating of A3 by Moody's or A-by S&P , with at least a BBB rating in the event of a split rating, at the time of purchase. The first of these rating exceptions pertains to the holding of a United Airlines (UAL) Asset Backed Security with a par value of $1 .6 million, represent i ng 0 .5 percent of the portfolio holdings, whose rating from Moody's has fallen several times , from A3 to BA 1, then to BA3, and finally to B3. Likewise , the rating from Standard & Poor's has also fallen several times , first from A-to BBB, then to BB , then to B+, and finally to B-. Alt hough these ratings are less than what is required at the time of purchase , PIMCO believes, based on the financial strength of UAL and the underlying collateral of the security , that the District would suffer an unwarranted loss if the security was sold at this time. The second ratings exception pertains to the holding of a $5 million par of the Philip Morris-Altria corporate bond with an April 2004 maturity, representing 1.5 percent of the portfolio holdings, whose rating with Moody's has fallen from A2 to Baa1 and then to Baa2 , and with S&P from A-to BBB . PIMCO believes based on the underlying assets C:\Documents and Sellingslpope\local Settings\Temporary Internet Flles\OLK3FE\llem 14(b).TREASRPT1 .doc Page 1 of the parent company, that the District would again suffer an unwarranted loss if the security was sold at this time . The District's investment policy does not require any action because of "credit watch" notices or the decline in credit standing . However, PIMCO will continue to monitor the credit for these two securities very closely. Historical cost and current market values are shown as estimated by both PIMCO and Mellon Trust. The District's portfolios are priced to market ("mark-to-market") as of the last day of each reporting period. The slight differences in value are related to minor variations in pricing assumptions by the valuation sources at the estimate date . BUDGET IMPACT D This item has been budgeted. (Line item: ~ Not applicable (information item) ADDITIONAL INFORMATION Schedules are attached summarizing the detail for both the short-term and long -term investment portfolios for the reporting period . In addition , a consolidated report of posted investment portfolio transactions for the month is attached . The attached yield analysis report is presented as a monitoring and reporting enhancement. In this report, yield calculations based on book values and market values are shown for individual holdings , as well as for each portfolio. Mellon Trust, the District's custodian bank, is the source for these reports . T ransactions that were pending settlement at month end may not be reflected . Also provided is a summary of monthly investment balances and transactions within the State of California Local Agency Investment Fund (LAIF). These reports accurately reflect all District investments and are in compliance with California Government Code Section 53646 and the District's Investment Policy . Sufficient liquidity and anticipated revenues are available to meet budgeted expenditures for the next six months . The table on the following page details the book balances of the District's investment accounts at month-end . A graphical representation of month-end balances is shown on the attached bar chart. C:\Oocuments and Settlngslpopellocal Settings\Temporary Internet Flles10LK3FE\llem 14(b).TREASR PT1 .doc Page 2 Book Balances Estimated Investment Accounts April30,2003 Yield(%) State of Calif. LAIF · $ 427 1.77 Union Bank Checking Account 961,360 1.13 PIMCO -Short-term Portfolio 66,087,371 1.39 PIMCO -Long-term Portfolio 326,240,483 2.12 Petty Cash s.ooo N/A TOTAL S393 29~64:1 1.99 Debt Service Reserves w/Trustees S3~ :133 2~5 4.40 (1) This is the annualized yield for the month of March. The April annualized rate was not available as of the date of this report. ATTACHMENTS 1. Graph of Monthly Investment Balances by Type-Last Six Months 2. Investment Transactions and Balances in the State Local Agency Investment Fund 3. PIMCO Monthly Investment Recap & Yield Analysis Report 4. PIMCO Performance Monitoring Report -Liquid Operating Monies 5. PIMCO Performance Monitoring Report-Long-Term Operating Monies 6. Mellon Trust Asset Summary by Asset Type with Sectors -Liquid Operating Monies 7. Mellon Trust Asset Summary by Asset Type with Sectors -L-T Operating Monies 8. Mellon Trust Yield Analysis Report 9. Mellon Trust Asset Detail -Consolidated 10. Mellon Trust Transaction Detail -Consolidated MW:lc C:\Doannents and Settings'tpope\local Settings\Temporary lntemet Files\OLK3FE\ltem 14(b).TREASRPT1 .doc Page3 Monthly Investment Balances by Type- Last Six Months $500,000,000 -,.------------------------------- $450,000,000 ----------------------------------1 $400,000,000 -- $350,000,000 __ ,, $300,000,000 -l--IX%<SC~---IO~S<Sa----1SOO<SO<~--~XS<SOOl----ts<X%<SCKl----IOO<~>l---1 $250,000,000 t---111---~11-----111---~ll---~li---{ll-----i $200,000,000 1-~~~--188~1--t~~--B§~~--m~r--1~~1 $150,000,000 t-;§~~--~m--;gm~--l~m--~m~----1~~---l $100,000,000 -f--l>OOO<:xx;f-----llOOOOOO<l-----000000()----IOC>OOOOf-----lXXX}C>O<J----t(XX}C>OOl---I $50,000,000 ,--E88888f--~~~--~88888f---g~sgg---~QQS8~---g~QQrl $0-+---K~-...~----'WWMOWMMl..__--.-~.MWWMWM;----~~~~____,,__.__1..Q,~~~-----A~~----f January 2003 February 2003 March 2003 April 2003 121 PIMCO -Long-term !I PIMCO -Short-term Bl COP Debt Reserves mLAIF E:JBank Accts II Petty Cash May 2004 June 2003 Balance Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund June 30, 2003 Par Value Book Value Market Value June 1, 2003 $9,367,427 $9,367,427 $9,367,427 Withdrawals: 6/2/2003 (400,000) (400,000) (400,000) 6/5/2003 {8,967,000} {8,967,000} {8,967,000} Total Withdrawls (9,367,000} (9,367,000) (9,367,000) Balance June 30, 2003 $427 $427 $427 Rate 1.769 1.769 1.769 1.769 1.769 * Yield for the month of May 2003. The Yield for the month of June 2003 was not available as of the date of this report. Yield* 1.769 1.769 1.769 1.769 1.769 July 7, 2003 Mr. Mike White, CPA Controller Orange County Sanitation District 10844 Ellis A venue Fountain Valley, CA 92708-7018 Dear Mike: PIM C 0 840 Newport Center Drive Suite300 Newport Beach, CA 92660 Tel: 949.720.6000 Fax: 949.720.1376 The following is a description of events in the bond markets during the month ofJtine in acidition to an analysis of the strategies undertaken in the Orange County Sanitation District's Long-Term and Liquid portfolios over the period. Also included is a section on our outlook and preferred strategies to be pursued in your portfolios during the coming months. Bond Market Recap: The S&P 500 continued its post war surge and returned 1.13% in June, while Treasuries returned --0.61 %. Treasuries experienced notable volatility amid expectations that the Fed would aggressively cut rates at its late June meeting. The 10-year note yield rallied intra-month to a 45- year low of 3.11% on expectations of a 50 basis point rate cut, but ended the month at 3.52%. Mortgages performed in line with Treasuries after adjusting for duration, with Ginnie Mae issues outperfonning both Fannie Mae and Freddie Mac bonds. Investment grade corporate bonds outperformed Treasuries, but posted a negative return, as the Lehman Credit Index returned - 0.25%,. for a duration-adjusted excess return of 35 basis points. Lower quality investment grade names outperformed as BBB-rated bonds lead Treasuries by 68 basis points on a duration- adjusted basis. High Yield bonds continued to perform very well, as the Lehman U.S. High Yield index outperformed Treasuries by 328 basis points, adjusted for duration. Consistent with investment grade performance, lower-quality provided higher performance as BA-rated bonds returned 1.91 % (+234 basis points duration-adjusted), compared to B-rated bonds, which returned 2.98% ( + 338 basis points duration-adjusted). On June 25, the Federal Open Market Committee lowered its target for the federal funds rate by 25 basis points to 1 %. In its press release, the Committee said that, "the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. In contrast, the probability, though minor, of an unwelcome substantial fall in inflation exceeds that of a pickup in inflation from its already low level." Recent economic data releases confirmed the Fed's views on the tepid U.S. economy. Inflation continues to be of little concern as core prices increased only 1.6% percent over the last 12 months, the lowest increase since March 1966. The U.S. housing market remains robust, with new home sales and housing starts rising 12.5% and 6.1 % percent in May, respectively. The University of Michigan sentiment index fell less than expected from 92. l to 89. 7. Manufacturing took a surprising downturn with capacity utilization rates remaining at Mr. Mike White, CPA Orange County Sanitation District July 7, 2003 Page2 74.3%, the lowest since June 1983. The Institute for Supply Management's factory index was virtually unchanged at 49.8 last month compared with 49.4 in May. Treasury yield changes during the month of May are summarized as follows: • 3-month bills: -25 basis point to 0.85% • 6-month bills: -12 basis points to 0.96% • 2-year notes: -2 basis points to 1.30% • 5-year notes: + 12 basis points to 2.41 % • 10-year notes: + 14 basis points to 3 .51 % • 30-year notes: + 18 basis points to 4.56% Performance Attribution: Long-Term Portfolio The Long-Term portfolio that PII\1CO manages on behalf of Orange County Sanitation District generated a total return of 0.07 percent for the month of June, underperforming the Merrill Lynch 1-5 year Government Corporate Index by 6 basis points. The following points summarize returns for the period ended June 30: • The Long-Term portfolio underperformed the benchmark by 6 basis points for the month and by 17 basis points for the year-to-date period. • Portfolio duration was largely neutral for performance while yield curve positioning detracted from returns as the yield curve steepened. • Holdings of mortgage-backed securities slightly detracted from returns as the sector modestly underperformed treasuries amid increased prepayment activity. • Holdings of corporate issues was positive for performance as the sector continued to perform strongly; however, an underweight exposure relative to the benchmark was negative. Liquid Portfolio The Liquid portfolio that PIMCO manages on behalf of Orange County Sanitation District generated a total return of 0.11 percent during the month of June, outperforming the 3-month Treasury Bill Index by 2 basis points. The following points summarize returns for the period ending June 30: • The Liquid portfolio modestly outperformed the benchmark by 2 basis points for the month and outperformed the benchmark by 8 basis points for the year-to-date period. • Use of higher yielding securities such as commercial paper and short-term notes contributed to performance. Mr. Mike White, CPA Orange Coun'ty Sanitation District Outlook and Strategy: . July 7, 2003 Page3 Global excess supply is likely to persist and crimp growth. The U.S. economy is likely to expand by 2%-3%, while Europe and Japan will be hard pressed to grow at all. Key elements of our cyclical forecast are the following: • Demand in the U.S. should hold up better than in other major economies. The weakest part of the U.S. economy -the corporate sector -has pared capital investment, inventories and employees after the excesses of the late 1990s to restore credibility with lenders. This corporate thrift has pressured employment and wages, but it has not dragged down consumption. • Adverse effects on U.S. household income and spending have been and should continue to be mitigated by consumers' ability to monetize housing wealth at mortgage rates near 40-year lows. • The outlook is bleaker in Europe and Japan. In these economies, painful consequences of corporate thrift will not be mitigated by effective reflationary policy such as that provided by the Federal Reserve. Europe is on the brink of recession, as disillusioned investors and skeptical credit rating agencies force balance sheet rehabilitation on companies that lag far behind their American counterparts in cost cutting. Japan will not recover so long as its companies and consumers curtail spending. Japanese companies continue to cut employees where they can and use cash fl.ow to pay down debt. • Rising commodity prices and a weaker dollar will push inflation modestly higher. Higher prices will be good for commodity exporters in the emerging markets, but will impose a negative terms of trade shock on developed economies. PIMCO plans to reduce risk and take exposures where prospects for attractive returns significantly outweigh downside potential. We plan to limit interest rate risk by targeting duration near the benchmark. In sector strategies, we plan to trim exposures that have recently fared well. Relatively high yields and strong credit quality make mortgages an attractive long-term a1temative. Neverthe1ess, strong recent gains make this sector vulnerable to a correction, so we may moderate mortgage exposure in the short run. We are likely to remain undeiweight to corpora.tes overall, especially in higher rated bonds with slim credit premiums, and aim for near- to-above index weightings in more attractively priced issues. We look forward to discussing these and other topics with you in the near future. Best regards, Christine Telish, CFA Vice President John M. Miller, CF A Senior Vice President Orange County Sanitation District for the month ending June 30, 2003 Total Return Account -203 Market Value Book Value Yield to Maturity Short Term Account -603 Market Value Book Value Yield to Maturity With Accrued Interest 329,722,455 319,929,265 2.12 With Accrued Interest 66,540,530 67,002,099 1.39 Without Accrued Interest 326,258.491 316.465,301 2.14 Without Accrued Interest 66,087,586 66,549,156 1.40 MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ended 30 June 2003) Liquid Operating Monies (603) 15.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • PIM CO • Mellon Historical Cost: • PIM CO • Mellon 15.1.2 MODIFIED DURATION Of Portfolio: Of Index: 15.1.3 1%INTERESTRATECHANGE Dollar Impact (gain/loss) of 1% Change: 15.1.4 REVERSE REPOS % of Portfolio in Reverse Repos: (see attached schedule) 15.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 days: 15.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality: 15.1.7 SECURITIES BELOW "A" RATING % of Portfolio Below "A": 15.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance" 15.1.9 PORTFOLIO PERFORMANCE Total Rate of Return(%) by Period: 1 Month: 3 Months: 12 Months: Year-to-Date: Commentary Page 1of1 $66,540,530 $66,542,970 $67 ,002,099 $67,004,710 0.26 0.20 $173,005 0% 54% ''AAA'' 0% Yes Portfolio 0.11 0.31 1.66 1.66 • Interest rates at the short-end of the yield curve decreased during the month (3-month T-Bilts fell 25 basis point to 0.85%), while longer maturities increased (30-year Treasuries rose 18 basis points to 4.56%). • The Liquid portfolio modestly outperfonned the benchmark by 2 basis points for the month, and outperfonned the benchmark by 8 basis points for the year-to-date period. • PIMCO's emphasis on higher yielding securities such as commercial paper and short-term notes contributed to perfonnance. G:\wp.dta\On\220\whlte\Treasury Mgmt\LIQOB00.03-06.RPT.doc Index 0.09 0.28 1.41 1.41 MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ended 30June 2003) Long-Term Operating Monies (203) 15.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • PIM CO • Mellon Historical Cost: • PIM CO • Mellon 15.1.2 MODIFIED DURATION Of Portfolio: Of Index: 15.1.3 1%INTERESTRATECHANGE Dollar Impact (gain/loss) of 1 % Change: 15.1.4 REVERSE REPOS % of Portfolio in Reverse Repos: (see attached schedule) 15.1.5 PORTFOLIO MATURITY % of Portfolio Maturing within 90 davs: 15.1.6 PORTFOLIO QUALITY Average Portfolio Credit Oualitv: 15.1.7 SECURITIES BELOW "A" RATING % of Portfolio Below "A": 15.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance" 15.1.9 PORTFOLIO PERFORMANCE Total Rate of Return(%) by Period: 1 Month: 3 Months: 12 Months: Fiscal Year-to-Date: • Three-month yields declined during the month (90-day T-Bills fell 25 basis point to 0.85%) while longer maturities increased (S-year Treasury Notes rose 12 basis points to 2.41%). • The Long-Term portfolio underperformed the benchmark by 6 basis points for the month, and by 17 basis points for the year. • Portfolio duration was largely neutral for performance while yield curve positioning detracted from returns as the yield curve steepened. • Holdings of Mortgage-backed securities slightly detracted from returns as the sector modestly underperformed treasuries amid increased prepayment activity. • Holdings of corporate issues were positive for performance as the sector continued to perform strongly; however, an underweight exposure relative to the benchmark was negative. Page 1of4 $329,722,455 $329,689,011 $319 ,929 ,265 $320,348,351 2.10 2.36 $6,924,172 0% 21% AAA 2% No* Portfolio Index 0.07 0.13 1.46 1.66 7.34 7.78 7.34 7.78 *Compliance Issues: MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ended 30June 2003) Page2of4 Sl.600.000 par of United Airlines <UAL) Pass-Through 2001-1-C C909317BC2), 6.831% coupon, 9/1/2008 maturity, representing 0.5% of the portfolio holdings on a par basis was purchased on 8/10/2001; and subsequently downgraded by Moody's from A3 to BAI (on 9/18/2001) and S&P from A-to BBB {on 9/20/2001). The security was further downgraded by Moody's from BAI to BA3 (on 12/21/2001) and by S&P from BBB to BB {on 6/28/02). Following news of the possible bankruptcy tiling, the security was further downgraded in August {B3 Moody's, B+ by S&P). On November 29, 2002, S&P further downgraded this issue to B, and shortly thereafter on December 9, 2002, downgraded the issue one notch further to B-. The District's investment policy requires a minimum rating of A3 by Moody's or A-by S&P, with at least a BBB rating in the event of a split. On December 4, 2002, the Federal Air Transportation Stabilization Board {A TSB) rejected UAL $1.5 billion loan guarantee application, citing fundamental flaws with its proposed business plan. In response to the ATSB rejection, the airline submitted its much-anticipated filing for Chapter 11 banlauptcy protection on December 9th. UAL's filing is the largest banlauptcy ever in the global airline industry, resulting from high costs and low airfares that have plagued the industry since "9/11 ". As part of its capacity reduction plans, UAL will reject, or abandon~ aircraft that it does not intend to use in the future. These reductions will be focused on certain older aircraft models, potentially including B727-200a, B767-200s, B747-400s, and B737-300s. In addition to rejecting aircraft that it does not intend to utilize in the future, UAL may also reject aircraft that it would like to utilize. UAL would be incentivized to reject such aircraft if it believes that it will be able to successfully renegotiate the tenns of loans and leases on these aircraft. UAL said it is weighing whether to emerge from banlauptcy months ahead of schedule, but analysts said the company still has obstacles to overcome before it can operate outside of court protection. The world's second largest airline was on track to meet financial targets on bankruptcy loans for April and May, and was considering exiting Chapter 11 as early as the fourth quarter of this year or first quarter of 2004. In addition to the labor savings being negotiated, UAL is also commented that it has been making better progress than expected in its cost-cutting efforts and anticipates being "significantly ahead" of the $4 billion in annual savings foreseen by 2005. In the meantime, the carrier must meet certain monthly financial targets set up by the lenders of its $1.5 billion banlauptcy financing package. UAL received $300 million in aid as part of a federal government package designed to help airlines weather the travel slump during the war with Iraq. Recently, the company said cash receipts had returned to prewar levels. As a result, the CFO commented that the airline also met monthly financial targets set by lenders who provided financing for its restructuring and was confident it would meet those requirements in May. Two weeks ago, UAL said it would reinstate 162 flights in June, including most of its domestic and trans-Atlantic flights it cut in April and May because of weak demand during the war in Iraq. As part of its debtor-in-possession loan agreements, UAL lenders required the company achieve cumulative earnings before interest, taxes, depreciation, amortization, and aircraft rent loss of no more than $849 million between December 1, 2002 and April 30. On June 9, UAL started preliminary talks to secure financing for its eventual exit from banlauptcy protection. Potential options for money include using loan guarantees from the federal government or private equity funds including possibly from banks. The airline's board of directors have been discussing a business plan to become financially viable, but other than reducing costs, details of the business plan are not public. PIM CO continues participating on ad hoc committees of UAL debt security holders that are seeking collective negotiations with the airline in order to strengthen their bargaining position. The ad hoc committees, their lawyers, and their advisors are currently reviewing restructuring proposals submitted by UAL and formulating responses. PIMCO suspects that this process will take some time given the banlauptcy's complexity. Recent market value fluctuations of UAL bonds are a result of industry uncertainties. The industry has suffered financial damage from reduced revenues and deeper losses leading up to and during the Iraq war, and run the risk of further deterioration if significant terrorist attacks were to occur. PIMCO anticipates that the end of the war and the containment ofSARS will prompt a modest pickup in business travel and an overall improvement in the outlook for the airlines, but they do not see a quick recovery. MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ended 30 June 2003) Page3 of4 5.000.000 par of Philip Morris-Altria NT (cusip 718154CH8), 4/1/2004 maturity, representing 1.5% of the portfolio holdings on a par basis was purchased on 8/6/2001 at a price of 105.26. This security was subsequently downgraded by Moody's from A2 to Baal (on 4/0112003) and S&P from A-to BBB (on 4/10/2003), and is currently priced near 104. The District's investment policy requires a minimum rating of A3 by Moody's or A-by S&P, with at least a BBB rating in the event of a split. The Philip Morris USA downgrade activity was a result of a negative court judgment and its associated bonding requirement. In the Miles case, named after the initial plaintiff in the class-action lawsuit, an Illinois court fined Philip Morris $10.3 billion for allegedly deceiving smokers into thinking that "light" cigarettes were safer than regular cigarettes. The company, now a subsidiary of Altria, has said that the lawsuit was flawed and that it planned to appeal the ruling and the class certification order that preceded it. Prior to the judgment, PIMCO's analysis of Altria (the holding company and issuer of the debt) shows investment grade credit metrics even excluding in its entirety Philip Morris USA (the domestic tobacco subsidiary and the entity subject to all of the legal suits). The analysis was based on the assumption that the horizon of any fmal verdict would be years in the future, while the company would generated significant cash fl ow in the interim. Philip Morris USA sought review of the $10.1 billion verdict in the class action lawsuit by Illinois appellate courts in light of Madison County Circuit Judge Nicholas Byron's decision to affirm his earlier verdict in the case. Philip Morris general counsel stated, "Philip Morris USA believes that when an appellate court reviews the record in this case and applies Illinois law, it will conclude this verdict must be overturned. The company will promptly appeal the $10.1 billion ruling, paving the way for the cigarette maker to appeal the "lights" class-action judgment. It is believed that the appeal will go directly to the Illinois Supreme Court. If the burden of the bonding falls entirely on Philip Morris USA, Altria's credit statistics would remain fairly good despite the bad headlines and the prospect of bankruptcy at the subsidiary. On May 21, a Florida appeals court overturned a landmark $145 billion judgment against major U.S. tobacco companies, which had been the largest trial damage award in U.S. history, and ordered the massive class of sick smokers decertified. The ruling knocks down a July 2000 jury verdict, which held the five biggest U.S. cigarette companies liable for the illnesses of about 500,000 Florida smokers and ordered them to pay $145 billion for misleading Americans about the risks of smoking. Phillip Morris bonds rallied strongly on this news, staging a powerful rebound in May. On June 11, Illinois' highest court declined to accept Philip Morris' direct appeal of$10.l billion ruling against the cigarette maker. In March, Madison County Judge Nicholas Byron found Philip Morris liable in a class action case over the marketing of"lights" cigarettes and ordered the company to pay $10.1 billion in damages. Plaintiffs in Price vs. Philip Morris argued the company marketed "lights" cigarettes in a way that smokers thought they carried less health risk than regular smokes. However, the company has said it never suggested "lights" cigarettes were less hazardous than full-flavored ones. The Illinois Supreme Court said it would not hear Philip Morris' appeal as the company had requested, so it must now head to the appellate court to present its arguments. If accepted, a direct appeal would have bypassed the state's appellate court. Philip Morris said it is seeking a quick timetable for the appeal. PIMCO believes management is unlikely to sacrifice good subsidiaries to fund the bad one, which would create a bad precedent for future court cases. PIMCO has continued to hold their positions at the holding company (Altria) level, but have suspended any additional purchases until greater clarity emerges on the likelihood of various outcomes. Split Rated Securities Still In Compliance: The District's investment policy requires a minimum rating of A3 by Moody's or A-by S&P, with at least a BBB in the event of a split rating. • $4,000,000 par of Ford Motor Credit securities ($3 million represented by cusip 345397SJ3 maturing 7/16/04 and $1 million represented by cusip 345397GV9 maturing 5/15/05), representing 1.2% of the portfolio holdings on a par basis. The securities were downgraded on 10116/2001 by S&P from A to BBB+; and now carry a Moody's rating of A3 after a further downgrade from A2 on 1116/2002 and an S&P rating of BBB after a further downgrade from BBB+ on 10/25/2002. MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ended 30 June 2003) Page4 of4 • $10,950,000 par of General Motors Acceptance Corp securities ( cusip 3 70425QV5), $4.0 million maturing on August 4, 2003, $3.95 million maturing on August 18, 2003, and $3.0 million maturing on August 28, 2007 representing 3.3% of the portfolio holdings on a par basis. The securities were downgraded on 10/16/2001 by S&P from A to BBB+, and a further downgrade to BBB occurring on 10/16/2002. The securities now carry a Moody's rating of A3 after a further downgrade from A2 on 6/14/03. • $3,500,000 par of Virginia Electric Power NT securities ( cusip 927804ENO), maturing in 2006, represents 1.1 % of the portfolio holdings on a par basis. The secµrity was downgraded on 10/21/2002 by S&P from A-to BBB+, but continues to carry a Moody's rating of A3. G:lwp.dtaljin\220\white\ Treasury Mgmt\L-TOB00-03-06.RPT.doc ·-----·----------··--------·-·---- UQVID OPER-PlMCO -OCSF07511102 Description CASH & CASH EQUIVALENTS U.S. DOLLAR INTEREST COMMERCIAL PAPER -DISCOUNT FED HM LOAN BNK -LESS THAN 1 YR FEDERAL HOME LOAN MORTGAGE -LESS THAN 1 FNMA ISSUES -LESS THAN 1 YR MUTUAL FUNDS FIXED INCOME SECURITIES U.S. DOLLAR BANKING & FINANCE INDUSTRIAL U.S. AGENCIES U.S. GOVERNMENTS UTILITY -TELEPHONE U.S. DOLLAR CASH & CASH EQUIVALENTS U.S. DOLLAR FIXED INCOME SECURITIES TOTAL ASSETS -BASE: Asset Summary by Asset Type with Sectors 6/30/2003 Cost Shares Par Base 455,598.88 1,000,000.000 998,896.67 9 ,600 ,000.000 9,572,740.94 11,500,000.000 11,461,330.83 8,200,000.000 8,171,193.17 9,785,246.110 9,785,246.11 40,085,246.110 40,445,006.60 40,085,246.110 40,445,006.60 8,290,000.000 8,637,849.20 1 ,206,000.000 1,237 ,099.06 9,465,000.000 9,755,723.85 5,800,000.000 6,251,984.38 650,000.000 677,046.50 25,411,000.000 26,559,702.99 25,411,000.000 26,559,702.99 66,496,246.110 67 ,004, 709.59 1 Report m: GL8251 Base Currency: USD Alternate Base Currency: Exchange Rate: Status: FINAL Market Value Base 455,598.88 998,896.67 9,572,740.94 11,461,330.83 8,171,193.17 9,785,246.11 40,445,006.60 40,445,006.60 8,541,995.90 1,218,266.54 9,635,422.69 6,035,625.00 666,653.00 26,097,963.13 26,097,963.13 66,542,969.73 %of Total 0.68% 1.50% 14.3goA, 17.22% 12.28% 14.71% 60.78% 60.78% 12.84% 1.83% 14.48% 9.07% 1.00% 39.22% 39.22% 100.00% Net Unrealized Gain/Loss Base 0.00 0.00 0.00 0.00 0.00 0.00 0.00 o.oo -95,853.30 -18,832.52 -120,301.16 -216,359.38 -10,393.50 -461,739.86 -461,739.86 -461,739.86 411 Workbench --------·-------------·------- LONG TERM OPER-PlMCO-OCSF07522202 Description CASH & CASH EQUIVALENTS U.S. DOLLAR PENDING TRADES INTEREST FED HM LOAN BNK -LESS THAN 1 YR FEDERAL HOME LOAN MORTGAGE -LESS THAN 1 FNMA ISSUES -LESS THAN 1 YR MUTUAL FUNDS U.S. DOLLAR CASH & CASH EQUIVALENTS FIXED INCOME SECURITIES U.S. DOLLAR ABS -AIRPLANE RECEIVABLES BANKING & FINANCE COLLATERALIZED MORTGAGE OBLIGATION FHLMC MULTICLASS FHLMC POOLS FNMA POOLS GNMA MULTI FAMILY POOLS GNMA SINGLE FAMILY POOLS INDUSTRIAL INFLATION INDEXED SECURITIES INTERNATIONAL CORPORATE BONDS U.S. AGENCIES U.S. GOVERNMENTS UTILITY -ELECTRIC UTILITY -TELEPHONE U.S. DOLLAR FIXED INCOME SECURITIES Asset Summary by Asset Type with Sectors -~_§J.~0/20 __ 0_3~~~- Cost Shares Par Base -20,630,167.91 3,448,527 .60 33,550,000.000 33,460,962.57 28,100,000.000 28,003 ,641.87 250,000.000 249,122.50 881,875.020 881,875.02 62, 781,875.020 45,413,961.65 62, 781,875.020 45,413,961.65 1,600,000.000 1,600,000.00 40,285,000.000 41,385,619.50 2,556,236.110 2,556,985.05 1,953,459.820 1,955,139.92 239,464.810 240,923.70 33,763,054.070 35,057,613.63 4,307 ,686.560 4,286,105.30 15,466,953.470 15,787,611.29 12,000,000.000 12,458,780.00 16,242,520.000 14,312,299.52 752,000.000 826,199.84 41,275,434.090 42,352,090. 91 80,779,356.910 89,082,570.88 6,500,000.000 6,438,210.00 6,000,000.000 6,594,240.00 263, 721, 165.840 274,934,389.54 263,721,165.840 274,934,389.54 1 Report ID: GL8251 Base Currency: USD Alternate Base Currency: Exchange Rate: Status: FINAL Market Value Base -20,630,167.91 3,448,527 .60 33,460,962.57 28,003,641.87 249,122.50 881,875.02 45,413,961.65 45,413,961.65 240,000.00 42,829,967.55 2,799,283.44 1,971,348.91 246,383.81 35,115,795.92 4,440,752.66 16,277,109.95 12,688,400.00 17 ,833, 780.19 845,804.48 45,230,200.58 89,986,806.45 7 ,034 ,445.00 6,734,970.00 284,275,048.94 284,275,048.94 %of Total -6.26% 1.05% 10.15% 8.4goA, 0.08% 0.27% 13.77% 13.77% 0.07% 12.99% 0.85% 0.60% 0.07% 10.65% 1.35% 4.94% 3.85% 5.41% 0.26% 13.72% 27.2g<»/o 2.13% 2.04% 86.23% 86.23% Net Unrealized Gain/Loss Base 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -1,360,000.00 1,444,348.05 242,298.39 16,208.99 5,460.11 58,182.29 154,647.36 489,498.66 229,620.00 3,521,480.67 19,604.64 2,878,109.67 904,235.57 596,235.00 140,730.00 9,340,659.40 9,340,659.40 Workbench Description TOTAL ASSETS -BASE: -------· ---------------------------. Asset Summary by Asset Type with Sectors Report ID: GL8251 Base Currency: USD Alternate Base Currency: Exchange Rate: . ---------~_3_0~/_2_0_0_3 ___________________ s_ta_t_u_s:_FIN_AL ___ __, Cost Shares Par Base Market Value Base 326,503,040.860 ___ 3_2_0...;;...,3_4_8...;;...,3_5_1_.1_9 ___ 3_2--'9,;._6_8_9,;._0_10_._5_9 % of Total Net Unrealized Gain/Loss Base 100.00% ___ 9...;;...,3_40 ___ ,6_5_9_.4_0 -------------·· ---. 1 .. Workbench YLDANAL YIELD ANALYSIS PAGE 1 OCSF07511102 2003/06/30 RUB DATE : 07/07/03 DISTRICT: LIQUID OPERATING RUN TIME : 09.56.47 ============================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARJ(ET TOTAL COST/ \ TYPE SECURITY ID SECURITY DESCRIPTION BOO IC YIELD S-P PRICE MARKET VALUE ' TOTAL ------------------------------------------------------------------------------------------------- CASH & CASH EQUIVALENTS 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .ooo .ooo P-1 99.799 1,995,975.00 4.99 313384JM2 MAT 07/23/2003 A-1+ 1,995,975.00 3.02 600,000.00 FEDERAL HOME LN BK CONS DISC N .ooo .ooo P-1 99.781 598,689.00 1.49 313384JT7 MAT 07/29/2003 A-1+ 598,689.00 .91 3,000,000.00 FEDERAL HOME LN BK CONS DISC N .ooo .ooo P-1 99. 773 2,993,175.00 7.48 3133841<84 MAT 08/06/2003 A-1+ 2,993,175.00 4.53 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .ooo .ooo P-1 99. 713 1,994,261.94 4.98 313384KR9 MAT 08/20/2003 A-1+ 1,994,261.94 3.02 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .ooo .ooo P-1 99.532 1,990,640.00 4.97 313384NJ4 MAT 10/24/2003 A-1+ 1,990,640.00 3.01 soo,000.00 FEDERAL HOME LN MTG CORP DISC .ooo .ooo P-1 99.752 498,759.44 1.24 313396JF1 MAT 07/17/2003 A-1+ 498,759.44 .75 3,000,000.00 FEDERAL HOME LN MTG CORP DISC .ooo .ooo P-1 99.756 2,992,687.SO 7.48 313396KG7 MAT 08/11/2003 A-1+ 2,992,687.50 4.53 2,000,000.00 FEDERAL HOME LN MTG CORP DISC .ooo .ooo P-1 99.731 1,994,616.67 4.98 313396KK8 MAT 08/14/2003 A-1+ 1,994,616.67 3.02 2,000,000.00 FEDERAL HOME LN MTG CORP DISC .ooo .ooo P-1 99.645 1,992,906.67 4.98 313396LQ4 MAT 09/12/2003 A-1+ 1,992,906.67 3.02 2,000,000.00 FEDERAL HOME LN MTG CORP DN .ooo .ooo P-1 99.569 1,991,383.33 4 .97 313396MT7 MAT 10/09/2003 A-1+ 1,991, 383. 33 3.01 2,000,000.00 FEDERAL HOME LN MTG CORP DISC .ooo .ooo P-1 99.549 1,990,977.22 4.97 313396NB5 MAT 10/17/2003 A-1+ 1,990,977.22 3.01 900,000.00 FEDERAL NATL MTG ASSN DISC NTS .ooo .ooo P-1 99.395 795,156.00 1.98 313588BQ1 MAT 07/02/2003 A-1+ 795,156.00 1.20 1,eoo,000.00 FEDERAL NATL MTG ASSN DISCOUNT .ooo .ooo P-1 99. 710 1,794,780.00 4.48 313588JUO MAT 07 /30/2003 A-1+ 1,794,780.00 2.12 3,000,000.00 FEDERAL NATL MTG ASSN DISCOUNT .ooo .ooo P-1 99.788 2,993,653.33 7.48 313588JV8 MAT 07/31/2003 A-1+ 2,993,653.33 4.53 YLDANAL YIELD ANALYSIS PAGE 2 OCSF07511102 2003/06/30 RUN DATE : 07/07/03 DISTRICT: LIQUID OPERATING RUN TIME I 09.56.47 ============================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARRET TOTAL COST/ \ TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARRET VALUE \ TOTAL ------------------------------------------------------------------------------------------------- 600,000.00 FEDERAL NATL MTG ASSN DISCOUNT .ooo .ooo P-1 99.708 598,249.67 1.49 313588MZ5 MAT 10/15/2003 A-1+ 598,249.67 .91 2,000,000.00 FEDERAL NATL MTG ASSN DISC .ooo .ooo P-1 99.468 1,989,354.17 4.97 313588PD1 MAT 11/12/2003 A-1+ 1,989,354.17 3.01 400,000.00 GENERAL ELEC CAP DISC .ooo .ooo P-1 99.897 399,588.00 .99 36959JUP6 07/23/2003 399,588.00 .60 600,000.00 GENERAL ELEC CAP DISC .ooo .ooo P-1 99.885 599,308.67 1.49 J6959JU92 07/09/2003 599,308.67 .91 9,785,246.11 DREYFUS TREASURY CASH MGMT .ooo .821 AAA 100.000 9,785,246.11 24.46 996085247 AAA 9,785,246.11 14.81 -----------------------------------------TOTAL CASH & CASH EQUIVALENTS .ooo .023 39,989,407.72 100.00 39,989,407.72 60.52 FIXED INCOME SECURITIES 1,000,000.00 ASSOCIATES CORP NORTH AMER .ooo 5.595 AAl 103.656 1,041,290.00 3.97 046003KA6 5.800\ 04/20/2004 DD 04/20/99 AA-1,036,560.00 1.57 650,000.00 BELL ATLANTIC-NEW JERSEY INC .ooo 5.728 AAJ 102.562 677 ,046. 50 2.55 077858AA6 5.875% 02/01/2004 DD 02/01/94 A+ 666,653.00 1.01 300,000.00 COLGATE PALMOLIVE MTN TR 00058 .ooo 5.182 AAJ 101. 703 308,808.00 1.16 19416QCK4 5.270\ 12/01/2003 DD 11/24/98 AA-305,109.00 .46 1,350,000.00 FEDERAL FARM CR BKS CONS SYSTE .ooo 5.271 AAA 102.445 1,399,963.50 5.29 31331H6G7 6.40\ 01/23/2004 DD 01/01/1999 AAA 1,383,006.56 2.09 550,000.00 FEDERAL FARM CR BKS CONS MTN .ooo 4.950 AAA 101.012 565,229.50 2 .12 31331RC78 5.000% 10/02/2003 DD 10/02/98 AAA 555,568.15 .84 1,100,000.00 FEDERAL HOME LN MTG CORP DEB .ooo 3.673 AAA 102.106 1,125,905.00 4.30 3134A4PH1 3.750\ 04/15/2004 DD 04/15/02 AAA 1,123,163.91 1. 70 4,200,000.00 FEDERAL NATL MTG ASSN DEBS .ooo 4 .999 AAA 102 .513 4,350,168.00 16.49 31359MEM1 5.125% 02/13/2004 DD 02/08/99 AAA 4,305,530.88 6.51 YLDANAL YIELD ANALYSIS PAGE 3 OCSF07Slll02 2003/06/30 RUN DATE 07/07/03 DISTRICT: LIQUID OPERATING RUN TIME 09.56.47 =======~===================================================================================================================== PAR VALUE YTM AT CURRENT MOODY MAR.KET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ------------------------------------------------------------------------------------------------- 1,340,000.00 GENERAL ELEC MTN I TR 00019 .ooo 8.017 AAA 102.281 1,380,508.20 S.25 36962FAUO STEP UP 10/30/2003 DD 11/02/92 AAA 1,370,565.40 2.07 2so,ooo.oo GILLETTE CO NT .ooo 6.212 AAl 100.609 256,012.50 .96 375766AC6 6.250% 08/15/2003 DD 08/16/93 AA-251,s22.5o .38 2,000,000.00 LEHMAN BROS HLDGS INC .ooo 6.373 A2 103.953 2,091,180.00 7.96 524908BZ2 6.625% 04/01/2004 DD 03/26/99 A 2,079,060.00 3.15 soo,000.00 PAINE WEBBER GROUP INC NTS .ooo 6.314 AA2 102.156 519,405.00 l.95 69S629CE3 6.450% 12/01/2003 DD 12/01/98 AA+ 510,780.00 .11 656,000.00 PROCTER & GAMBLE CO NTS .ooo 5.205 AAl 100.859 672,278.56 2.53 74271BBK4 5.250% 09/15/2003 DD 09/28/98 AA-661, 635 .04 1.00 2,000,000.00 US BANCORP MTN ITR 00119 .ooo 5. 767 AA3 104.046 2,092,620.00 7.97 91159HEY2 6.000% 05/15/2004 DD 05/10/99 A 2,080,920.00 3.15 s,000,000.00 U S TREASURY BONDS .ooo 11.411 AAA 104.063 6,251,984.38 23.12 912810DGO 11. 875% 11/15/2003 DD 10/05/83 AAA 6,035,625.00 9.13 2,000,000.00 FEDERAL HOME LN BK CONS BDS 1.517 4.497 AAA 100.070 2,039,880.00 7.66 3133MG5Jl 4.500i 07/07/2003 DD 07/06/01 AAA 2,001,391.80 3.03 450,000.00 WELLS FARGO & CO SUBNT 1.615 6.028 AA3 101.609 467,496.00 1. 75 949740BY9 6.125% 11/01/2003 DD 11/01/93 A 457,240.50 .69 1so,ooo.oo FEDERAL FARM CR BKS CONS MTN 1.664 6.501 AAA 100.751 155,796.00 .57 31331NW59 6.550i 08/19/2003 DD 08/19/96 AAA 151,126.25 .23 100,000.00 FEDERAL HOME LN BK CONS BDS 1.664 5.889 AAA 100.606 103,311.00 .38 3133M5582 5.925t 08/14/2003 DD 08/14/98 AAA 100,605.91 .15 1,000,000.00 HORGAN STANLEY DW MTN f TR00349 1.757 7.076 AA3 100.687 1,045,350.00 3.85 61745EQN4 7.125% 08/15/2003 DD 08/10/00 AA-1,006,870.00 1.52 YLDANAL OCSF07 511102 DISTRICT: LIQUID OPERATING YIELD ANALYSIS 2003/06/30 PAGE RUN DATE RUN TIME 4 I 07/07/03 09.56.47 ============================================================================================================================= PAR VALUE SECURITY ID SECURITY DESCRIPTION 15,000.00 FEDERAL HOME LN BKS CONS BD 3133M4VC4 6.000% 07/14/2003 DD 07/14/98 TOTAL FIXED INCOME SECURITIES TOTAL YTM AT CURRENT MOODY MARRET BOOK YIELD S-P PRICE 2.751 5.988 AAA 100.195 AAA .097 6.390 .043 2.844 TOTAL COST/ HARI<ET VALUE 15,470.85 15,029.23 26,559,702.99 26,097,963.13 66, 549, 110. 71 66,087,370.85 ================= % TYPE % TOTAL .05 .02 100.00 39.47 100.00 100.00 YLDANAL YIELD ANALYSIS PAGE 5 OCSF07522202 2003/06/30 RUN DATE : 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME : 09.56.47 ============================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ------------------------------------------------------------------------------------------------- CASH & CASH EQUIVALENTS 1,600,000.00 FEDERAL HOME LN BK CONS DISC .ooo .ooo P-1 99. 710 1,595,360.00 2.54 313384HZS MAT 07 /11/2003 A-1+ 1,595,360.00 .46 24,600,000.00 FEDERAL HOME LN BK CONS DISC .ooo .ooo P-1 99. 731 24,533,932.64 39 .19 313384JEO MAT 07/16/2003 A-1+ 24,533,932.64 7.07 3,800,000.00 FEDERAL HOME LN BK CONS DISC N .ooo .ooo P-1 99.933 3,797,440.27 6.06 313384JP5 MAT 07/25/2003 A-1+ 3,797,440.27 1.09 1,300,000.00 FEDERAL HOME LN BK CONS DISC N .ooo .ooo P-1 99.712 1,296,253.83 2.01 313384KB4 MAT 08/06/2003 A-1+ 1,296,253.83 .37 2so,ooo.oo FEDERAL HOME LN BK CONS DISC .ooo .ooo P-1 99.725 249,312.50 .39 313384LF4 MAT 09/03/2003 A-1+ 249,312.50 .07 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .ooo .ooo P-1 99.433 1,988,663.33 3.17 313384NY1 MAT 11/07/2003 A-1+ 1,988,663.33 .57 24,600,000.00 FEDERAL HOME LN MTG CORP DISC .ooo .ooo P-1 99.668 24,518,273.34 39.16 313396JD6 MAT 07/15/2003 A-1+ 24,518,273.34 7.07 2,200,000.00 FEDERAL HOME LN MTG CORP DISC .ooo .ooo P-1 99.598 2,191,163.64 3.50 313396KT9 MAT 08/22/2003 A-1+ 2,191,163.64 .63 1,300,000.00 FEDERAL HOME LN MTG CORP DISC .ooo .ooo P-1 99.554 1,294,204.89 2.06 313396LQ4 MAT 09/12/2003 A-1+ 1,294,204.89 .37 2so,ooo.oo FEDERAL NATL MTG ASSN DISCOUNT .ooo .ooo P-1 99. 649 249,122.50 .39 313588MJ1 MAT 09/30/2003 A-1+ 249,122.50 .07 881,875.02 DREYFUS TREASURY CASH MGMT .ooo .821 AAA 100.000 881,875.02 1.40 996085247 AAA 881,875.02 .25 -----------------------------------------TOTAL CASH & CASH EQUIVALENTS .ooo .002 62,595,601.96 100.00 62 I 595, 601. 96 18.02 FIXED INCOME SECURITIES 752,000.00 AIG SUNAMERICA GLO DDS USD .ooo 5.201 112.474 826,199.84 .29 NA2789454 5.850% Ol-AUG-2008 845,804.48 .24 YLDANAL YIELD ANALYSIS PAGE 6 OCSF07S22202 2003/06/30 RUN DATE I 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME I 09.56.47 =================~=========================================================================================================== PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ ' TYPE I SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE \ TOTAL ------------------------------------------------------------------------------------------------- 1s,ooo,ooo.oo COMMIT TO PUR FNMA SF MTG .ooo 4.840 AAA 103.313 15,488,125.00 5.45 01F050478 5.000\ 07/01/2018 DD 07/01/03 AAA 15,496,875.00 4.47 5,000,000.00 COMMIT TO PUR FNMA SF MTG .ooo 5. 779 AAA 103.828 5,200,000.00 1.82 OlF060683 6.000\ 08/01/2033 DD 08/01/03 AAA 5 1 191,406.00 1.50 900,000.00 BEAR STEARNS MTN I TR 00459 .ooo 1.578 A2 100.156 899,406.00 .31 073928VC4 VAR RT 12/01/2003 DD 08/17/01 A 901,404.00 .26 l,soo,000.00 CIT GROUP INC NEW SR NT .ooo 5.084 A2 108.187 1,527,135.00 .57 125581ADO 5.500\ 11/30/2007 DD 12/02/02 A 1,622,805.00 .47 s,000,000.00 CITIGROUP INC GLOBAL SUB NT .ooo 5.106 AA2 110.111 5,333,600.00 1.93 172967BP5 5.625, 08/27/2012 DD 08/26/02 A+ s,5o8,55o.oo 1.59 35,770.02 DISTRIBUTION FINL 99-1 CL A4 .ooo 5.828 100.208 36,518.96 .01 25475MAD6 5.840\ 10/17/2011 DD 03/18/99 35,844.42 .0.1 146,834.56 FHLMC GROUP IG4-0353 .ooo 7.305 AAA 102.675 150,551.31 .OS 3128DBMA2 7.500\ 10/01/2004 DD 03/01/99 AAA 150,762.88 .04 7,500,000.00 FEDERAL HOME LN BK CONS BDS .ooo 6.517 AAA 109.330 7,997,625.00 2.8:8 3133MAUN7 7.125% 02/15/2005 DD 02/08/00 AAA 8,199,764.25 2.36 92,630.25 FHLMC GROUP 178-6064 .ooo J.726 AAA 103.229 90,372.39 .03 31348SWZ3 6.384\ 01/01/2028 DD 12/01/97 AAA 95,620.93 .OJ 11,350,000.00 FEDERAL NATL MTG ASSN DEBS .ooo 4.781 AAA 109.804 11, 521 1 211. so . 4 .38 31359MJX2 5.250% 06/15/2006 DD 06/22/01 AAA 12, 462, 714. 28 3.59 314,139.83 FNMA POOL 10323980 .ooo 5.728 AAA 104.750 327,981.62 .11 31374T2MO 6.000% 04/01/2014 DD 09/01/99 AAA 329,061.47 .09 116,219.83 FNMA POOL 10456482 .ooo 5.725 AAA 104.813 121,340.77 .04 31381CCT2 6.000\ 02/01/2014 DD 02/01/99 AAA 121,812.91 .04 320, 941. 55 FNMA POOL 10509649 .ooo 5.728 AAA 104.750 335,083.04 .11 31383QEWO 6.000\ 09/01/2014 DD 09/01/99 AAA 336,186.27 .10 253, 166. 52 FNMA POOL 10535451 .ooo 5.728 AAA 104.750 264,321.67 .09 31384VZQ8 6.000\ 06/01/2015 DD 07/01/00 AAA 265,191.93 .oe 5,600,088.97 FNMA POOL 10535672 .ooo 5.728 AAA 104.750 5,846 1 842.89 2.06 31384WCB1 6.000\ 01/01/2016 DD 12/01/00 AAA 5 1 866,093.20 1.69 YLDANAL YIELD ANALYSIS PAGE 7 OCSF07522202 2003/06/30 RUN DATE I 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME I 09.56.47 ============================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION 8001( YIELD S-P PRICE MARKET VALUE % TOTAL ------------------------------------------------------------------------------------------------- 1,966,081.19 FNMA POOL 10545296 .ooo 5. 719 AAA 104 .912 2,052,711.64 .72 31385HXZO 6.000% 11/01/2016 DD 10/01/01 AAA 2,062,664.93 .59 162,196.05 FNMA POOL 10545580 • 000 5.735 AAA 104.625 169, 342. 81 .05 31385JCR7 6.000% 03/01/2017 DD 03/01/02 AAA 169,697.62 .os 269,000.24 FNMA POOL 10555101 • 000 5.738 AAA 104.563 280,853.06 .09 31385WU23 6.000\ 10/01/2017 DD 11/01/02 AAA 281,273.38 .08 100,217.47 FNMA POOL 10576386 .ooo 5.757 AAA 104.219 104,633.30 .03 31386XJ72 6.000\ 05/01/2016 DD 05/01/01 AAA 104, 445. 77 .03 296,843.74 FNMA POOL 10576739 • 000 5.735 AAA 104.625 309,923.42 .10 31386XV86 6.000\ 04/01/2016 DD 04/01/01 AAA 310,572.76 .09 328,433.30 FNMA POOL 10580888 .ooo 5.735 AAA 104 .625 342,904.89 .12 31387DJ91 6.000% 05/01/2016 DD 05/01/01 AAA 343,623.34 .10 249,713.37 FNMA POOL 10594002 .. ooo 5.735 AAA 104.625 260,716.36 .09 31387T3K8 6.000% 07/01/2016 DD 07/01/01 AAA 261,262.61 .08 291,258.61 FNMA POOL 10597376 .. ooo 5. 719 AAA 104.912 304t092o19 .10 313B7XT96 6.000' 09/01/2016 DD 08/01/01 AAA 305, 566 .69 .09 284,594.36 FNMA POOL 10605259 .ooo 5.738 AAA 104.563 297, 134 .30 .10 31388BMG1 6.000' 09/01/2016 DD 09/01/0l AAA 297, 578. 98 .09 190, 957 .OS FNMA POOL f 0608366 .ooo 5.719 AAA 104.912 199,371.09 .01 31388LZ78 6.000% 10/01/2016 DD 09/01/01 AAA 200,337.82 .06 174,758.47 FNMA POOL 10616734 .ooo 5.701 AAA 105.250 182,458.76 .06 31388WEF9 6.000' 12/01/2016 DD 12/01/01 AAA 183,933.29 .05 345,342.78 FNMA POOL 10630812 .ooo 5.752 AAA 104.306 360,559.45 .12 31389NYR2 6.000% 02/01/2017 DD 02/01/02 AAA 360, 214. 35 .10 1,209,353.87 FNMA POOL 10632376 .ooo 5.700 AAA 105.262 1,262,641.03 .44 31389QQ50 6.000% 07/01/2017 DD 07/01/02 AAA 1,272,996.12 .37 713,752.78 FNMA POOL 10653116 .ooo 5.700 AAA 105.262 745,202.51 .26 31390QSD8 6.000% 07/01/2017 DD 07/01/02 AAA 751,314.02 .22 310,959.00 FNMA POOL 10673280 .ooo 5.738 AAA 104.563 324,660.63 .11 31391P6R2 6.000' 08/01/2017 DD 11/01/02 AAA 325,146.50 .09 YLDANAL YIELD ANALYSIS PAGE 8 OCSF07522202 2003/06/30 RUH DATE 07/07/03 DISTRICT: LONG-TERM OPERATING RUH TIME 09.56.47 ============================================================================================================================= PAR VALUE YTH AT CURRENT MOODY MARKET TOTAL COST/ \ TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MAR.KET VALUE \ TOTAL ------------------------------------------------------------------------------------------------- 139,920.81 FNMA POOL 10698939 .ooo 5.701 AAA 105.238 146, 086. 07 .05 31400VPY2 6.000\ 09/01/2017 DD 03/01/03 AAA 147,249.16 .04 125, 114. 28 FNMA POOL 10703195 .ooo 5. 718 AAA 104 .938 130,627.13 .04 31401BGC3 6.000\ 01/01/2017 DD 04/01/03 AAA 131,291.80 .04 643,217.72 GNHA POOL 10596612 .ooo 6.172 AAA 105.316 675,077.10 .23 36200BYH4 6.500\ 09/15/2032 DD 09/01/02 AAA 677,413.81 .20 2,030,307.68 GNMA POOL I0569J58 .ooo 6.196 AAA 104.910 2,077,893.01 .74 36200QQK3 6.500\ 04/15/2032 DD 04/01/02 AAA 2,129,994.5J .61 88,455.91 GNMA POOL 10569685 .ooo 6.172 AAA 105.316 92,8J7.24 .OJ 36200Q2S2 6.500% 02/15/2032 DD 02/01/02 AAA 93,158.59 .03 924,612.54 GNHA POOL 10574323 .ooo 6.170 AAA 105.348 970,409.75 .34 36200WAY7 6.500\ 12/15/20Jl DD 12/01/01 AAA 974,057.67 .28 101,103.10 GNHA POOL 10575364 .ooo 6.170 AAA 105.348 106,110.86 .OJ 36200XFD6 6.500\ 11/15/2031 DD 11/01/01 AAA 106,509.75 .03 150,533.65 GNMA POOL 10585263 .ooo 6 .196 AAA 104 .910 157,989.77 .os 36201KFC5 6.500% 08/15/2032 DD 08/01/02 AAA 157,924.76 .05 35,137.40 GNMA POOL 10587117 .ooo 6.172 AAA 105.316 J6,877.80 .01 36201MG22 6.500% 06/15/20J2 DD 06/01/02 AAA 37,005.45 .01 114 ,081.20 GNMA POOL I05874J9 .ooo 6.172 AAA 105.316 119I131. 78 .04 36201MS45 6.500% 11/15/2032 DD 12/01/02 AAA 120,146.22 .OJ 22,606.46 GNHA POOL I0421J89 .ooo 6.154 AAA 105.629 2J,726.l9 .oo 36206UC23 6.500% 04/15/2026 DD 04/01/96 AAA 23,878.96 .01 32,277.78 GNMA POOL 10449851 .ooo 6.194 AAA 104.932 33,876.54 .01 36208FWLO 6.500% 01/15/2028 DD 01/01/98 AAA 33,869.75 .01 100,137.41 GNMA POOL 10466845 .ooo 6.161 AAA 105.504 105,097.J4 .OJ 36209BTA6 6.500\ 06/15/2028 DD 06/01/98 AAA 105,648.88 .OJ 681,928.55 GNHA POOL 10468052 .ooo 6 .161 AAA 105.504 715,705.32 .25 36209C5M4 6.500% 07/15/2028 DD 07/01/98 AAA 719,461.28 .21 299,916.81 GNMA POOL 10476041 .ooo 6.161 AAA 105.504 314,30J.45 .11 36209MZE7 6.500% 06/15/2028 DD 06/01/98 AAA 316,423.96 .09 YLDANAL YIELD ANALYSIS PAGE 9 OCSF07S22202 2003/06/30 RUN DATE 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME 09.56.47 ============================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ t TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE t TOTAL ------------------------------------------------------------------------------------------------- 252,893.04 GNMA POOL 10478626 .ooo 6 .161 AAA 105.504 265,024.00 .09 36209QVT9 6.500% 01/15/2029 DD 01/01/99 AAA 266,812.05 .08 324,239.27 GNMA POOL 10480598 .ooo 6.161 AAA 105.504 339,792.63 .12 36209S3F6 6.500\ 10/15/2028 DD 10/01/98 AAA 342,085.11 .10 815,970.74 GNMA POOL 10485527 .ooo 6.170 AAA 105.348 856,386.79 .30 36209YLG1 6.500% 06/15/2031 DD 06/01/01 AAA 859,606.08 .25 942,672.13 GNMA POOL f 0485610 .ooo 6.170 AAA 105.348 989,363.86 .34 36209YN38 6.500% 07/15/2031 DD 07/01/01 AAA 993,083.03 .29 182,912.61 GNMA POOL 10485682 .ooo 6.170 AAA 105.348 191,972.50 .06 36209YRB6 6.500% 08/15/2031 DD 08/01/01 AAA 192,694.15 .06 173,770.23 GNMA POOL 10485703 .ooo 6 .170 AAA 105.348 182,377.29 .06 36209YRY6 6.SOOt 08/15/2031 DD 08/01/01 AAA 183,062.87 .05 20,064.08 GNMA POOL 10512235 .ooo 6.165 AAA 105.441 21,057.88 .oo 36211GBC6 6.500% 11/15/2029 DD 11/01/99 AAA 21,155.85 .01 314, 020. 83 GNMA POOL 10514326 .ooo 6.165 AAA 105.441 329,084.02 .11 36211JLF2 6.500% 07/15/2029 DD 07/01/99 AAA 331,107.99 .10 95,473.62 GNMA POOL 10530053 .ooo 6.199 AAA 104.856 100,202.55 .03 36212CZS3 6.500\ 04/15/2031 DD 04/01/01 AAA 100,109.65 .03 69, 415. 01 GNMA POOL 10530290 .ooo 6.170 AAA 105.348 72,744.76 .02 36212DC31 6.500% 03/15/2031 DD 04/01/01 AAA 73,127.09 .02 167,438.02 GNMA POOL 10537885 .ooo 6.170 AAA 105.348 175,731.43 .06 36212MRE1 6.500% 02/15/2031 DD 02/01/01 AAA 176,392.04 .05 24,950.39 GNMA POOL 10547512 .ooo 6.170 AAA 105.348 26,186.21 .oo 36212YGV9 6.500% 04/15/2031 DD 04/01/01 AAA 26,284.65 .01 288,700.52 GNMA POOL 10547715 .ooo 6.170 AAA 105.348 302, 549 .12 .10 36212YN82 6.500% 02/15/2031 DD 02/01/01 AAA 304,139.24 .09 117,666.45 GNMA POOL 10552322 .ooo 6.170 AAA 105.348 123,494.62 .04 36213ESK3 6.500% 01/15/2032 DD 01/01/02 AAA 123,958.85 .04 957,229.70 GNMA POOL 10552466 .ooo 6.196 AAA 104 .910 1,004,642.48 .35 36213EW36 6.500% 03/15/2032 DD 03/01/02 AAA 1,004,229.08 .29 YLDANAL YIELD ANALYSIS PAGE 10 OCSF07522202 2003/06/30 RUN DATE 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME 09.56.47 ============================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARl(ET TOTAL COST/ t TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARl(ET VALUE t TOTAL ------------------------------------------------------------------------------------------------- 798,660.08 GNMA POOL 10552659 .ooo 6.172 AAA 105.316 838,218.71 .29 36213E5U6 6.500% 07/15/2032 DD 07/01/02 AAA 841,120.12 .24 808,303.23 GNMA POOL 10561017 .ooo 6.170 AAA 105.348 848,339.50 .29 36213QG29 6.500% 07/15/2031 DD 07/01/01 AAA 851,528.54 .25 356,159.39 GNMA II POOL 10080395 .ooo 3.397 AAA 103.033 352,931. 70 .12 36225CNM4 VAR RT 04/20/2030 DD 04/01/00 AAA 366, 961. 88 .11 3,221,037.41 GNMA II POOL I080408X .ooo 3.397 AAA 103.032 3,188,323.74 1.16 36225CN28 6.500% 05/20/2030 DD 05/01/00 AAA 3,318,691.21 .96 3,000,000.00 GTE NORTH INC DEB SER A .ooo 5.852 Al 102.531 3,063,750.00 1.08 362337AD9 6.000% 01/15/2004 DD 01/15/94 A+ l,075,930.00 .89 5,000,000.00 GENERAL ELEC CAP MTN tTR 00575 .ooo S.032 AAA 108.312 5 1 203 1 500.00 1.90 36962GZY3 5.450% 01/15/2013 DD 12/06/02 AAA 5,415,600.00 1.56 4,000,000.00 GENERAL MTRS ACCEP MTN 100615 .ooo 1.630 Al 99.984 3,998,440.00 1.40 37042WE80 VAR RT 08/04/2003 DD 08/03/01 BBB l,999,360.00 1.15 3,000,000.00 GENERAL MTRS ACCEP CORP SR NT .ooo 5.894 Al 103.921 3,064,350.00 1.09 370425SD3 6.125% 08/28/2007 DD 08/29/02 BBB 3,117,630.00 .90 3,000,000.00 GOLDMAN SACHS GROUP INC SR NT .ooo 3.926 AAJ 105.078 3,030,030.00 1.10 38141GCS1 4.125% 01/15/2008 DD 01/13/03 A+ 3,152,340.00 .91 1,635,000.00 HOUSEHOLD FIN CORP NT .ooo 5.607 Al 113.703 1,772,820.00 .65 441812JW5 6.375% 10/15/2011 DD 10/23/01 A 1,859,044.05 .54 3,000,000.00 JP MORGAN CHASE & CO SUB NT .ooo 5.259 A2 109.328 3,127,260.00 1.15 46625BAT7 5.750% 01/02/2013 DD 11/25/02 A 3,279,840.00 .95 3,200,000.00 MORGAN STANLEY NT .ooo 3.537 AA3 102.484 3,195,648.00 1.15 617446HW2 3.625% 04/01/2008 DD 03/06/03 A+ 3,279,488.00 .95 3,000,000.00 NATIONAL RURAL UTILS COOP FIN .ooo 6.055 A2 119.734 3,465,480.00 1.26 637432CU7 7.250% 03/01/2012 DD 03/07/02 A 3,592,020.00 1.04 s,000,000.00 PHILIP HORRIS COS INC NTS .ooo 7.246 BAA2 103.500 5,263,000.00 1.82 718154CH8 7.500% 04/01/2004 DD 04/01/97 BBB s,115,000.00 1.49 3,679,356.91 SBA GTD DEV PARTN 2001-20C 1 .ooo 5.666 AAA 111.890 l,679,356.91 1.44 83162CLJO 6.340% 03/01/2021 AAA 4,116,832.45 1.19 YLDANAL YIELD ANALYSIS PAGE 11 OCSF07522202 2003/06/30 RUH DATE 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME 09.56.47 ============================================================================================================================= PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ------------------------------------------------------------------------------------------------- 2,520,466.09 SBA GTD PARTN CTFS SBIC-PS 01 .ooo 6.056 AAA 109.640 2,520,466.09 .97 831641DD4 6.640% 02/10/2011 DD 02/21/01 HR 2,763,439.02 .80 1,600,000.00 UNITED AIRLS PASSTHRU 01-1 c .ooo 45.540 B3 15.000 1,600,000.00 .08 909317BC2 6.831% 03/01/2010 DD 08/22/01 A-240,000.00 .01 20,000,000.00 U S TREASURY NOTES .ooo 5.433 AAA 115.031 22 I 620, 312 o 50 8.09 9128272JO 06.250% 02/15/2007 DD 02/15/97 AAA 23,006,300.00 6.63 s1,100,ooo.oo U S TREASURY NOTES .ooo 5.223 AAA 110.094 62,782,901.47 22.11 9128276N7 05.750% 11/15/2005 DD 11/15/00 AAA 62,863,674.00 18.12 l,000,000.00 VERIZON GLOBAL FOO CORP GLOBAL .ooo 6.047 A2 121. 968 3,530,490.00 1.28 92344GAT3 7.375% 09/01/2012 DD 08/26/02 A+ 3,659,040.00 1.05 3,500,000.00 VIRGINIA ELEC & PWR 01 SER A .ooo 5.265 Al 109.203 3,487,680.00 1.34 927804ENO 5.750% 03/31/2006 DD 03/27/01 BBB+ 3,822,105.00 1.10 16,242,520.00 US TREASURY INFLATION INDEX NT 3 .817 3.074 AAA 109.797 14,312,299.52 6.27 9128272M3 3.375% 01/15/2007 DD 01/15/97 AAA 17,833,780.19 5.14 3,950,000.00 GMAC NTS 5.152 1. 391 Al 99.953 3,918,768.50 1.38 370425QV5 VAR RT 08/18/2003 DD 08/17/98 BBB 3,948,143.50 1.14 15,500,000.00 FEDERAL NATL MTG ASSN DEBS 5 .967 6.513 AAA 109.388 16,154,410.00 5.96 31359MFB1 7.125% 02/15/2005 DD 02/14/00 AAA 16,955,203.55 4.89 1,307,944.14 FHLMC MULTICLASS MTG SER El A 6 .316 4.058 AAA 101.156 1,309,337.63 .46 3133TCE95 VAR RT 08/15/2032 DD 12/01/97 AAA 1,323,063.97 .38 946,909.16 GNMA GTD REMIC TR 2000-9 FH 6 .320 1.671 AAA 100.538 946,909.16 .33 3837H4NX9 VAR RT 02/16/2030 AAA 952,003.53 .27 13,139.63 GNMA POOL 10500917 6.399 5.705 AAA 105.176 12,472.39 .oo 36210SPAO 6.000% 04/15/2029 DD 04/01/99 AAA 13,819.71 .oo 46,987.95 GNMA POOL f 0506636 6 .389 5.705 AAA 105.176 44,601.84 .01 36210YY90 6.000% 04/15/2029 DD 04/01/99 AAA 49,419.94 .01 480,059.77 GNMA POOL 10503388 6 .389 S.705 AAA 105.176 455, 681. 73 .17 36210VF55 6.000% 03/15/2029 DD 03/01/99 AAA 504,906.61 .15 17, 331. 03 GNMA POOL 10499153 6 .389 5.705 AAA 105.176 16,450.93 .oo 36210QQES 6.000% 02/15/2029 DD 02/01/99 AAA 18,228.0S .01 YLDANAI. YIELD ANALYSIS PAGE 12 OCSF07522202 2003/06/30 RUN DATE I 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME 09.56.47 ============================================================================================================================= PAR VALUE YT'M AT CURRENT MOODY MARX ET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ------------------------------------------------------------------------------------------------- 591,299.35 GNMA POOL 10496461 6 .390 5.705 AAA 105.176 561, 272. 41 .21 36210MQN4 6.000% 01/15/2029 DD 01/01/99 AAA 621,903.70 .18 155,449.71 GNMA POOL 10491103 6 .390 5.705 AAA 105.176 147,555.79 .OS 36210FRY4 6.000% 01/15/2029 DD 01/01/99 AAA 163,495.45 .os 15,421.85 GNMA POOL 10486720 6 .390 5.701 AAA 105.238 14,638. 72 .oo 36210AVM6 6.000% 12/15/2028 DD 12/01/98 AAA 16,229.69 .oo 30,334.10 GNHA POOL 10497343 6 .390 5.701 AAA 105.238 28,793.70 .01 36210NP45 6.000% 12/15/2028 DD 12/01/98 AAA 31,923.09 .01 23,384.32 GNMA POOL 10469688 6 .391 5.701 AAA 105.238 22,196.84 .oo 36209EXR8 6.000% 11/15/2028 DD 11/01/98 AAA 24,609.26 .01 25,262.07 GHMA POOL 10467279 6.391 5.701 AAA 105.238 23,979.23 .oo 36209CCQ7 6.000% 10/15/2028 DD 10/01/98 AAA 26,585.37 .01 53,896.22 GNMA POOL 10457814 6 .391 5.701 AAA 105.238 51,159.29 .01 36208QSB3 6.000% 10/15/2028 DD 10/01/98 AAA 56,719.45 .02 496,964.72 GNMA POOL 10467286 6 .391 5.701 AAA 105.238 471,728.23 .18 36209CCX2 6.000% 10/15/2028 DD 10/01/98 AAA 522,997.12 .15 696,226.29 GNMA POOL 10465555 6 .392 5.701 AAA 105.238 660,871.07 .25 36209AE48 6.000% 09/15/2028 DD 09/01/98 AAA 732,696.57 .21 22,614.51 GNMA POOL 10483452 6.392 5.701 AAA 105.238 21,466.12 .oo 36209WBV3 6.000% 09/15/2028 DD 09/01/98 AAA 23, 799 .12 .01 671,408.54 GHMA POOL 10465546 '.392 5.701 AAA 105.238 637,313.58 .24 36209AET3 6.000% 08/15/2028 DD 08/01/98 AAA 706,578.80 .20 482,731.25 GNMA POOL 10468339 6.392 5.701 AAA 105.238 458,217.58 .17 36209DHQO 6.000% 08/15/2028 DD 08/01/98 AAA 508,018.06 .15 36,250.60 GNMA POOL 10438057 6.393 5.701 AAA 105.238 34,409.76 .01 36207PTN9 6.000% 05/15/2028 DD 05/01/98 AAA 38,149.51 .01 29,495.40 GNMA POOL 10468330 6.393 5.701 AAA 105.238 27,997.58 .01 36209DBF4 6.000% 05/15/2028 DD 05/01/98 AAA 31,040.45 .01 645,515.68 FBLMC MULTICLASS CTF Tll A6 6.496 6.472 AAA 100.429 645,802.29 .22 3133TDPV2 6.500% 09/25/2018 AAA 648,284.94 .19 .. ~ ... YLDANAL YIELD ANALYSIS PAGE 13 OCSF07522202 2003/06/30 RUN DATE 07/07/03 DISTRICT: LONG-TERM OPERATING RUB TIME I 09.56.47 ===========================================================================================================================a= PAR VALUE YT'M AT CURRENT MOODY MARRET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARl<ET VALUE % TOTAL ------------------------------------------------------------------------------------------------- 2,928,067.24 FHLMC MULTICLASS CTF SER 1620Z 6 .499 5.631 AAA 106.556 2,771,927.30 1.09 3133T17A4 6.000\ 11/15/2023 DD 11/01/93 AAA 3, 120,031.33 .90 425,666.38 GNMA II POOL f080088M 6.705 4.243 AAA 103.107 434,977.84 .15 36225CC20 7.375\ 06/20/2027 DD 06/01/97 AAA 438,892.77 .13 2,000,000.00 MARSH & MCLENNAN COS INC SR NT 6. 717 6.316 A2 104. 890 1,992,280.00 .73 571748ABB 6.625\ 06/15/2004 DD 06/14/99 AA-2,097,800.00 .60 3,000,000.00 FORD MTR CR CO GLOBAL LAHDMARl< 6. 739 6.45l Al lOl.828 2,995,080.00 1.09 345397SJ3 6.700% 07/16/2004 DD 07/16/99 BBB 3,114,840.00 .90 2,soo,000.00 COUNTRYWIDE HOME LNS INC NT 6 .866 6.512 Al 105.187 2,498,400.00 .92 22237UABB 6.850% 06/15/2004 DD 06/24/99 A 2,629,675.00 .76 304,823.38 GNMA II POOL 10080023 6.992 5.423 AAA 103.734 309,872.02 .11 36225CAZ9 VAR RT 12/20/2026 DD 12/01/96 AAA 316 I 206 • 80 .09 2,100,000.00 FEDERAL NATL MTG ASSN DEBS 7 .113 5.530 AAA 119.799 2,030,133.00 .ea 31359MEY5 6.625% 09/15/2009 DD 09/01/99 AAA 2,515,771.44 • 73 1,000,000.00 FORD MOTOR CR CO NT 7.582 6.445 Al 104.734 965,170.00 .36 345397GV9 6.750% 05/15/2005 DD 05/24/93 BBB 1,047,340.00 .30 950,457.69 WMP/HUNTOON PAIGE f000-11150 7.684 6.957 AAA 107. 813 929 I 814 • 95 .36 302998GE3 7.500% 12/01/2030 DD 10/21/99 AAA 1,024,712.20 .30 J,000,000.00 PACIFICORP SECD MTN ITR 00115 1.109 6.817 Al 107.078 2,950,530.00 1.13 69512EEU5 7.300% 10/22/2004 DD 10/22/92 A 3,212,340.00 .93 1,600,000.00 ALLSTATE CORP SR NT 7.967 7.089 Al 111.093 1,594,032.00 .62 020002AL5 7.875% 05/01/2005 DD 05/01/00 A+ 1,777,488.00 .51 -----------------------------------------TOTAL FIXED INCOME SECURITIES .551 5.241 274,934,389.54 100.00 284,275,048.94 82.04 -----------------------------------------TOTAL .SlS 5.089 337,529,991.50 100.00 346,870,650.90 100.00 ================= ========= OCSD-CONSOUDATED -OCSGOOOlOOOO Description •··«••··--·-···-······-------·-·· .~ ............... ·-·---···--· U.S. DOLLAR CASH & CASH EQUIVALENTS INTEREST RECEIVABLE RECEIVABLE FOR INVESTMENTS SOLD PAYABLE FOR INVESTMENTS PURCHASED FEDERAL HOME LN BK CONS DISCMAT 07 / l l/2003SEC ID: 313384HZ5 Price FEDERAL HOME LN BK CONS DISCMAT 07/16/2003SEC ID: 313384JEO FEDERAL HOME LN BK CONS DISC NMAT 07 /23/2003SEC ID: 313384JM2 FEDERAL HOME LN BK CONS DISC NMAT 07 /25/2003SEC ID: 313384JP5 FEDERAL HOME LN BK CONS DISC NMAT 07 /29 /2003SEC ID: 313384JT7 FEDERAL HOME LN BK CONS DISC NMAT 08/06/2003SEC ID: 313384KB4 FEDERAL HOME LN BK CONS DISC NMAT 08/20/2003SEC ID: 313384KR9 FEDERAL HOME LN BK CONS DISCMAT 09/03/2003SEC ID: 313384LF4 FEDERAL HOME LN BK CONS DISC NMAT 10/24/2003SEC ID: 313384NJ4 FEDERAL HOME LN BK CONS DISC NMAT 11/07 /2003SEC ID: 313384NY1 FEDERAL HOME LN MTG CORP DISCMAT 07/15 /2003SEC ID: 313396JD6 Base 99.7100 99.7314 99.7988 99.9326 99.7815 99.7725 99.7131 99.7250 99.5320 99.4332 99.6678 Asset Detail by Currency --~I ~f:)f.~OQ~ ..... Cost Shares Par Base 3,904,126.48 5,247,019.59 -25,877,187.50 1,600,000.000 1,595,360.00 24 ,600,000.000 24,533,932.64 2 ,000,000.000 1,995,975.00 3 ,800,000.000 3,797 ,440.27 600,000.000 598,689.00 4 ,300,000.000 4,289,428.83 2 ,000,000.000 1,994,261.94 250,000.000 249,312.50 2 ,000,000.000 1,990,640.00 2 ,000,000.000 1,988,663.33 24 ,600,000.000 24,518,273.34 1 ..... ·· ·-.. ·----............................. ·· -· .... ie.port .. lii:·-·-.... oi:soia·-· ............... · .. I Base Currency: USD Alternate Base Currency: I Exchange Rate: Status: FINAL Market Value Base 3,904,126.48 5,247,019.59 -25,877,187.50 1,595,360.00 24,533,932.64 1,995,975.00 3,797,440.27 598,689.00 4,289,428.83 1,994,261.94 249,312.50 1,990,640.00 l, 988,663.33 24,518,273.34 . --------_________ ,., ____ ., _______________ ---· %of Total 0.99% 1.32% -6.53% 0.40% 6.19% 0.50% 0.96% 0.15% 1.08% 0.50% 0.06% 0.50% 0.50% 6.1go1o Net Unrealized Gain/Loss Base 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Workbench Asset Detail Report m: GL8013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOUDATBD -OCSGOOOlOOOO 6/30/2003 Status: FINAL ·-.. -··· ----. ••·•••••• ••>o••••••-·-•·r -----·----·-------·-··--··----·-·-·····-~ ... -'. ---·---· ·-. -------------·-·--·· ·- I Description Net Unrealized Price Cost Market Value % of Gain/Loss Base Shares Par Base Base Total Base FEDERAL HOME LN MTG CORP 99.7519 500,000.000 498,759.44 498,759.44 0.13% 0.00 DISCMAT 07/17 /2003SEC ID: 313396JF1 FEDERAL HOME LN MTG CORP 99.7563 3 ,000,000.000 2,992,687.50 2,992,687.50 0.76% 0.00 DISCMAT 08/11/2003SEC ID: 313396KG7 FEDERAL HOME LN MTG CORP 99.7308 2 ,000,000.000 1,994,616.67 1,994,616.67 0.50% 0.00 DISCMAT 08/14/2003SEC ID: 313396KK8 FEDERAL HOME LN MTG CORP 99.5983 2 ,200,000.000 2,191,163.64 2,191,163.64 0.55% 0.00 DISCMAT 08/22/2003SEC ID: 313396KT9 FEDERAL HOME LN MTG CORP 99.6453 3 ,300,000.000 3,287,111.56 3,287,111.56 0.83% 0.00 DISCMAT 09/ 12/2003SEC ID: 313396LQ4 FEDERAL HOME LN MTG CORP 99.5692 2 ,000,000.000 1,991,383.33 1,991,383.33 0.50% 0.00 DNMAT 10/09/2003SEC ID: 313396MT7 FEDERAL HOME LN MTG CORP 99.5489 2 ,000,000.000 1,990,977.22 1,990,977.22 0.50% 0.00 DISCMAT 10/ 17 /2003SEC ID: 313396NB5 FEDERAL NATL MTG ASSN DISC 99.3945 800,000.000 795,156.00 795,156.00 0.20% 0.00 NTSMAT 07 /02/2003SEC ID: 313588HQ1 FEDERAL NATL MTG ASSN 99.7100 1 .800,000.000 1,794,780.00 1,794,780.00 0.45% 0.00 DISCOUNTMAT 07 /30 /2003SEC ID:313588JUO FEDERAL NATL MTG ASSN 99.7884 3.000,000.000 2,993,653.33 2,993,653.33 0.76% 0.00 DISCOUNTMAT 07 /31/2003SEC ID:313588JV8 FEDERAL NATL MTG ASSN 99.6490 250,000.000 249,122.50 249,122.50 0.06% 0.00 DISCOUNTMAT 09/30/2003SEC ID: 313588MJ1 FEDERAL NATL MTG ASSN 99.7083 600,000.000 598,249.67 598,249.67 0.15% 0.00 DISCOUNTMAT 10/ 15/2003SEC ID: 313588MZ5 FEDERAL NATL MTG ASSN DISCMAT 99.4677 2,000,000.000 1,989,354.17 1,989,354.17 0.50% 0.00 ll/12/2003SECID:313588PD1 GENERAL ELEC CAP 99.8970 400,000.000 399,588.00 399,588.00 0.10% 0.00 DISC07 /23/2003SEC ID: 36959JUP6 2 .Workben<;/1 Asset Detail Reportm: GLSOi3-- Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOLIDATED -OCSGOOOlOOOO 6/30/2003 Status: FINAL I Description ---------· Net Unrealized Price Cost Market Value %of Gain/Loss Base Shares Par Base Base Total Base GENERAL ELEC CAP 99.8848 600,000.000 599,308.67 599,308.67 0.15% 0.00 DISC07 /09 /2003SEC ID: 36959JU92 DREYFUS TREASURY CASH 100.0000 10,667,121.130 10,667,121.13 10,667, 121.13 2.69% 0.00 MGMTSEC ID: 996085247 TOTAL CASH & CASH EQUIVALENTS 102,867,121.130 85,858,968.25 85,858,968.25 21.67% 0.00 FIXED INCOME SECURITIES AIG SUNAMERICA GLO BOS USDS. 112.4740 752,000.000 826,199.84 845,804.48 0.21% 19,604.64 850% 0 l-AUG-2008SEC ID: NA2789454 COMMIT TO PUR FNMA SF MTG 5. 103.3125 15 ,000,000.000 15,488,125.00 15 ,496,875.00 3.91% 8,750.00 000% 07 /01/2018 DD 07/01/03SECID:OlF050478 COMMIT TO PUR FNMA SF MTG 6. 103.8281 5 ,000,000.000 5,200,000.00 5,191,406.00 1.31% -8,594.00 000% 08/01/2033 DD 08/01/03SECID:OlF060683 ALLSTATE CORP SR NT7.875% 111.0930 1 ,600,000.000 1,594,032.00 1,777,488.00 0.45% 183,456.00 05/01/2005 DD 05/01/00SEC ID: 020002AL5 ASSOCIATES CORP NORTH AMER5. 103.6560 1,000,000.000 1,041,290.00 1,036,560.00 0.26% -4,730.00 800% 04 /20 /2004 DD 04/20/99SECID:046003KA6 BEAR STEARNS MTN # TR 100.1560 900,000.000 899,406.00 901,404.00 0.23% 1,998.00 00459VAR RT 12/01/2003 DD 08/17/01SECID:073928VC4 BELL ATLANTIC-NEW JERSEY INC5. 102.5620 650,000.000 677,046.50 666,653.00 0.17% -10,393.50 875% 02/01/2004 DD 02/0l/94SECID:077858AA6 CIT GROUP INC NEW SR NT 5.500% 108.1870 1.500,000.000 1,527,135.00 1,622,805.00 0.41% 95,670.00 11/30/2007 DD 12/02/02SEC ID: 125581ADO CITIGROUP INC GLOBAL SUB NT5. 110.1710 5 ,000,000.000 5,333,600.00 5,508,550.00 1.3goA, 174,950.00 625% 08/27 /2012 DD 08/26/02SECID: 172967BP5 COLGATE PALMOLIVE MTN TR 101.7030 300,000.000 308,808.00 305,109.00 0.08% -3,699.00 000585.270% 12/01/2003 DD ll/24/98SEC ID: 19416QCK4 COUNTRYWIDE HOME LNS INC NT6. 105.1870 2 ,500,000.000 2,498,400.00 2,629,675.00 0.66% 131,275.00 850% 06/ 15/2004 DD 06/24/99SECID:22237UA88 3 Workbench Asset Detail Reportm: GL8013 Base Currency: USD by Currency Altemate Base Currency: Exchange Rate: OCSD-CONSOUDATED -OCSGOOOlOOOO 6/30/2003 Status: FINAL •••••••••••••n·-·-• • •-•••••• •••-.•••h"•••·~ ... .......... --·-·--·-·~-·-----·····----·----- I Description Net Unrealized Price Cost Market Value %of Gain/Loss Base Shares Par Base Base Total Base DISTRIBUTION FINL 99-1 CL A4 5. 100.2080 35,770.020 36,518.96 35,844.42 0.01% -674.54 840% 10/ 17 /2011 DD 03/18/99SEC ID: 25475MAD6 WMP /HUNTOON PAIGE #000-107.8125 950,457 .690 929,814.95 1,024,712.20 0.26% 94,897.25 111507.500% 12/01/2030 DD 10/21/99SECID:302998GE3 FHLMC GROUP #G4-0353 7.500% 102.6753 146,834.560 150,551.31 150,762.88 0.04% 211.57 10/01/2004 DD 03/01/99SEC ID: 3128DBMA2 FEDERAL HOME LN BK CONS BDS7. 109.3302 7 ,500,000.000 7, 997 ,625.00 8,199,764.25 2.07% 202,139.25 125% 02/15/2005 DD 02/08/00SECID:3133MAUN7 FEDERAL HOME LN BK CONS BDS4. 100.0696 2 ,000,000.000 2,039,880.00 2,001,391.80 0.51% -38,488.20 500% 07 /07 /2003 DD 07 /06/0lSEC ID: 3133MG5Jl FEDERAL HOME LN BKS CONS BD 100.1949 15,000.000 15,470.85 15,029.23 0.00% -441.62 6.000% 07 /14/2003 DD 07/14/98SECID:3133M4VC4 FEDERAL HOME LN BK CONS BOS 5. 100.6059 100,000.000 103,311.00 100,605.91 0.03% -2,705.09 925% 08/14/2003 DD 08/14/98SECID:3133M55B2 FHLMC MULTICLASS MTG SER E3 101.1560 1,307,944.140 1,309,337.63 1,323,063.97 0.33% 13,726.34 AVAR RT 08/15/2032 DD 12/01/97SECID:3133TCE95 FHLMC MULTICLASS CTF Tl 1 A66. 100.4290 645,515.680 645,802.29 648,284.94 0.16% 2,482.65 500% 09/25/2018SEC ID: 3133TDPV2 FHLMC MULTICLASS CTF SER 106.5560 2 ,928,067.240 2,771,927.30 3,120,031.33 0.79% 348,104.03 1620Z6.000% 11/15/2023 DD 11/01/93SECID:3133Tl7A4 FEDERAL FARM CR BKS CONS 102.4449 1 ,350,000.000 1,399,963.50 1,383,006.56 0.35% -16,956.94 SYSTE6.40% 01/23/2004 DD Ol/01/1999SECID:31331H6G7 FEDERAL FARM CR BKS CONS 100.7508 150,000.000 155,796.00 151,126.25 0.04% -4,669.75 MTN6.550% 08/19/2003 DD 08/19/96SECID:31331NW59 FEDERAL FARM CR BKS CONS MTN 101.0124 550,000.000 565,229.50 555,568.15 0.14% -9,661.35 5.000% 10/02/2003 DD 10/02/98SECID:31331RC78 4 ,WorkbenGJt Asset Detail Report ID: o:Lso1a· .. Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOUDATED -OCSGOOOlOOOO 6/30/2003 Status: FINAL --. ~ ··---. -··---······-----------·----------------·---- I Descripti:n Net Unrealized Price Cost Market Value %of Gain/Loss Base Shares Par Base Base Total Base FEDERAL HOME LN MTG CORP DEB 102.1058 1.100,000.000 1,125,905.00 1,123,163.91 0.28% -2,741.09 3. 750% 04I15 /2004 DD 04/15/02SECID:3134A4PH1 FHLMC GROUP #78-6064 6.384% 103.2286 92,630.250 90,372.39 95,620.93 0.02% 5,248.54 01/01/2028 DD 12/0l/97SEC ID: 31348SWZ3 FEDERAL NATL MTG ASSN DEBS5. 102.5126 4 ,200,000.000 4,350, 168.00 4,305,530.88 1.09% -44,637.12 125% 02/13/2004 DD 02/08/99SEC ID: 31359MEM1 FEDERAL NATL MTG ASSN DEBS6. 119.7986 2, 100,000.000 2,030,133.00 2,515,771.44 0.63% 485,638.44 625% 09/15/2009 DD 09/01/99SEC ID: 31359MEY5 FEDERAL NATL MTG ASSN DEBS7. 109.3884 15,500,000.000 16,154,410.00 16,955,203.55 4.28% 800,793.55 125% 02/15/2005 DD 02/14/00SEC ID: 31359MFH1 FEDERAL NATL MTG ASSN DEBSS. 109.8037 11,350,000.000 11,521,271.50 12,462,714.28 3.15% 941,442.78 2500A> 06/15/2006 DD 06/22/01SECID:31359MJX2 FNMA POOL #0323980 6.000% 104.7500 314,139.830 327,981.62 329,061.47 0.08% 1,079.85 04/01/2014 DD 09/01/99SEC ID: 31374T2MO FNMA POOL #0456482 6.000% 104.8125 116,219.830 121,340.77 121,812.91 0.03% 472.14 02/01/2014 DD 02/01/99SEC ID: 31381CCT2 FNMA POOL #0509649 6.000% 104.7500 320,941.550 335,083.04 336,186.27 0.08% 1,103.23 09/01/2014 DD 09/0l/99SEC ID: 31383QEWO FNMA POOL #0535451 6.000% 104.7500 253,166.520 264,321.67 265,191.93 0.07% 870.26 06/01/2015 DD 07 /01/00SEC ID: 31384VZQ8 FNMA POOL #0535672 6.000% 104.7500 5 .600,088. 970 5,846,842.89 5,866,093.20 1.48% 19,250.31 01/01/2016 DD 12/01/00SEC ID: 31384WCH1 FNMA POOL #0545296 6.000% 104.9125 1,.966,081.190 2,052,711.64 2,062,664.93 0.52% 9,953.29 11/01/2016 DD 10/01/0lSEC ID: 31385HXZO FNMA POOL #0545580 6.000% 104.6250 162,196.050 169,342.81 169,697.62 0.04% 354.81 03/01/2017 DD 03/01/02SEC ID: 31385JCR7 5 Workbench Asset Detail Reportm: GL8013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOUDATED -OCSGOOOlOOOO 6/30/2003 Status: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base ----- FNMA POOL #0555101 6.000% 104.5625 269,000.240 280,853.06 281,273.38 0.07% 420.32 10/01/2017 DD 11/01/02SEC ID: 31385WU23 FNMA POOL #0576386 6.000% 104.2191 100,217.470 104,633.30 104,445.77 0.03% -187.53 05/01/2016 DD 05/01/0lSEC ID: 31386XJ72 FNMA POOL #0576739 6.000% 104.6250 296,843.740 309,923.42 310,572.76 0.08% 649.34 04/01/2016 DD 04/01/0lSEC ID: 31386XV86 FNMA POOL #0580888 6.000% 104.6250 328,433.300 342,904.89 343,623.34 0.09% 718.45 05/01/2016 DD 05/01/0lSEC ID: 31387DJ91 FNMA POOL #0594002 6.000% 104.6250 249,713.370 260,716.36 261,262.61 0.07% 546.25 07 /01/2016 DD 07 /01/0lSEC ID: 31387T3K8 FNMA POOL #0597376 6.000% 104.9125 291,258.610 304,092.19 305,566.69 0.08% 1,474.50 09/01/2016 DD 08/01/0lSEC ID: 31387XT96 FNMA POOL #0605259 6.0000/o 104.5625 284,594.360 297,134.30 297,578.98 0.08% 444.68 09/01/2016 DD 09/01/0lSEC ID: 31388HMG1 FNMA POOL #0608366 6.000% 104.9125 190,957.050 199,371.09 200,337.82 0.05% 966.73 10/01/2016 DD 09/01/0lSEC ID: 31388LZ78 FNMA POOL #0616734 6.000% 105.2500 174,758.470 182,458.76 183,933.29 0.05% 1,474.53 12/01/2016 DD 12/01/0lSEC ID: 31388WEF9 FNMA POOL #0630812 6.000% 104.3063 345,342. 780 360,559.45 360,214.35 0.09% -345.10 02/01/2017 DD 02/0l/02SEC ID: 31389NYH2 FNMA POOL #0632376 6.000% 105.2625 1 .209,353.870 1,262,641.03 1,272,996.12 0.32% 10,355.09 07 /01/2017 DD 07 /Ol/02SEC ID: 31389QQ50 FNMA POOL #0653116 6.000% 105.2625 713,752. 780 745,202.51 751,314.02 0.19% 6,111.51 07 /01/2017 DD 07 /01/02SEC ID: 31390QSD8 FNMA POOL #0673280 6.000% 104.5625 310,959.000 324,660.63 325,146.50 0.08% 485.87 08/01/2017 DD 11/0l/02SEC ID: 31391P6R2 6 .Workben<ii ,, ... ' Asset Detail Report m: GL8013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOUDATED -OCSGOOOlOOOO 6/30/2003 Status: FINAL ------·-· ------·----·-~escription Net Unt"ealized Price Cost Market Value % of Gain/Loss Base Shares Par Base Base Total Base ------- FNMA POOL #0698939 6.000% 105.2375 139,920.810 146,086.07 147,249.16 0.04% 1,163.09 09/01/2017 DD 03/01/03SEC ID: 31400VPY2 FNMA POOL #0703195 6.000% 104.9375 125, 114.280 130,627.13 131,291.80 0.03% 664.67 01/01/2017 DD 04/0l/03SEC ID: 31401BGC3 FORD MOTOR CR CO NT6. 750% 104.7340 1 ,000,000.000 965,170.00 1,04 7 ,340.00 0.26% 82,170.00 05/15/2005 DD 05/24/93SEC ID: 345397GV9 FORD MTR CR CO GLOBAL 103.8280 3 ,000,000.000 2,995,080.00 3, 114,840.00 0.79% 119,760.00 LANDMARK6.700% 07/16/2004 DD 07/16/99SECID:345397SJ3 GNMA POOL #0596612 6.500% 105.3164 643,217. 720 675,077.10 677,413.81 0.17% 2,336.71 09/15/2032 DD 09/01/02SEC ID: 36200BYH4 GNMA POOL #0569358 6.500% 104.9099 2 ,030,307.680 2,077,893.01 2,129,994.53 0.54% 52,101.52 04/15/2032 DD 04/01/02SEC ID: 36200QQK3 GNMA POOL #0569685 6.500% 105.3164 88,455.910 92,837.24 93,158.59 0.02% 321.35 02/15/2032 DD 02/01/02SEC ID: 36200Q2S2 GNMA POOL #0574323 6.5000/o 105.3477 924,612.540 970,409.75 974,057.67 0.25% 3,647.92 12/15/2031DD12/01/0lSEC ID: 36200WAY7 GNMA POOL #0575364 6.500% 105.3477 101,103.100 106,110.86 106,509.75 0.03% 398.89 11/15/2031DD11/01/0lSEC ID: 36200XFD6 GNMA POOL #0585263 6.5000/o 104.9099 150,533.650 157,989.77 157,924.76 0.04% -65.01 08/15/2032 DD 08/0l/02SEC ID: 36201KFC5 GNMA POOL #0587117 6.500% 105.3164 35,137.400 36,877.80 37,005.45 0.01% 127.65 06/15/2032 DD 06/01/02SEC ID: 36201MG22 GNMA POOL #0587439 6.500% 105.3164 114,081.200 119,731.78 120,146.22 0.03% 414.44 11/15/2032 DD 12/01/02SEC ID: 36201MS45 GNMA POOL #0421389 6.500% 105.6289 22,606.460 23,726.19 23,878.96 0.01% 152.77 04/15/2026 DD 04/01/96SEC ID: 36206UC23 7 Workbench Asset Detail Report ID: GL8013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOUDATED -OCSGOOOlOOOO 6/3~/~QQ~ Status: FINAL -·--... --·---·-·--·---· '"'' . . . -··--·---------··--·-·--·--,.-·-·············-·-~····----·-···· ~ I Description Net Unrealized Price Cost Market Value % of Gain/Loss Base Shares Par Base Base Total Base GNMA POOL #0438057 6.000% 105.2383 36,250.600 34.409.76 38,149.51 0.01% 3,739.75 05/ 15/2028 DD 05/0l/98SEC ID: 36207PTN9 GNMA POOL #0449851 6.500% 104.9321 32,277.780 33,876.54 33,869.75 0.01% -6.79 01/15/2028 DD 01/01/98SEC ID: 36208FWLO GNMA POOL #0457814 6.000% 105.2383 53,896.220 51,159.29 56,719.45 0.01% 5,560.16 10/15/2028 DD 10/0l/98SEC ID: 36208QSB3 GNMA POOL #0465546 6.000% 105.2383 671,408.540 637,313.58 706,578.80 0.18% 69.265.22 08/15/2028 DD 08/01/98SEC ID: 36209AET3 GNMA POOL #0465555 6.000% 105.2383 696,226.290 660,871.07 732,696.57 0.18% 71,825.50 09/15/2028 DD 09/0l/98SEC ID: 36209AE48 GNMA POOL #0466845 6.5000/o 105.5039 100,137.410 105,097.34 105,648.88 0.03% 551.54 06/15/2028 DD 06/01/98SEC ID: 36209BTA6 GNMA POOL #0467279 6.000% 105.2383 25,262.070 23,979.23 26,585.37 0.01% 2,606.14 10/ 15/2028 DD 10/01/98SEC ID: 36209CCQ7 GNMA POOL #0467286 6.000% 105.2383 496,964. 720 471,728.23 522,997.12 0.13% 51,268.89 10/15/2028 DD 10/0l/98SEC ID: 36209CCX2 GNMA POOL #0468052 6.500% 105.5039 681,928.550 715,705.32 719,461.28 0.18% 3,755.96 07 /15/2028 DD 07 /01/98SEC ID: 36209C5M4 GNMA POOL #0468330 6.000% 105.2383 29,495.400 27,997.58 31,040.45 0.01% 3,042.87 05/15/2028 DD 05/01/98SEC ID: 36209DHF4 GNMA POOL #0468339 6.000% 105.2383 482,731.250 458,217.58 508,018.06 0.13% 49,800.48 08/15/2028 DD 08/01/98SEC ID: 36209DHQO GNMA POOL #0469688 6.000% 105.2383 23,384.320 22,196.84 24,609.26 0.01% 2,412.42 11/15/2028 DD 11/0l/98SEC ID: 36209EXR8 GNMA POOL #0476041 6.500% 105.5039 299,916.810 314.303.45 316.423.96 0.08% 2,120.51 06/15/2028 DD 06/0l/98SEC ID: 36209MZE7 8 :Workbenc;fl Asset Detail Reportm: GL8013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOLIDATED -OCSGOOOlOOOO 6/30/2003 Status: FINAL ··-----··---·----· -----·--·-··-- [Description Net Unrealized Price Cost Market Value % of Gain/Loss Base Shares Par Base Base Total Base ------· GNMA POOL #0478626 6.500% 105.5039 252,893.040 265,024.00 266,812.05 0.07% 1,788.05 01/15/2029 DD Ol/01/99SEC ID: 36209QVT9 GNMA POOL #0480598 6.500% 105.5039 324,239.270 339,792.63 342,085.11 0.09% 2,292.48 10/15/2028 DD 10/0l/98SEC ID: 36209S3F6 GNMA POOL #0483452 6.000% 105.2383 22,614.510 21,466.12 23,799.12 0.01% 2,333.00 09/15/2028 DD 09/01/98SEC ID: 36209WBV3 GNMA POOL #0485527 6.500% 105.3477 815,970.740 856,386.79 859,606.08 0.22% 3,219.29 06/15/2031DD06/01/0lSEC ID: 36209YLG1 GNMA POOL #0485610 6.500% 105.3477 942,672.130 989,363.86 993,083.03 0.25% 3,719.17 07/15/2031DD07/01/0lSEC ID: 36209YN38 GNMA POOL #0485682 6.500% 105.3477 182,912.610 191,972.50 192,694.15 0.05% 721.65 08/15/2031 DD 08/01/0lSEC ID: 36209YRB6 GNMA POOL #0485703 6.500% 105.3477 173,770.230 182,377.29 183,062.87 0.05% 685.58 08/15/2031DD08/01/0lSEC ID: 36209YRY6 GNMA POOL #0486720 6.000% 105.2383 15,421.850 14,638.72 16,229.69 0.00% 1,590.97 12/15/2028 DD 12/01/98SEC ID: 36210AVM6 GNMA POOL #0491103 6.000% 105.1758 155,449.710 147,555.79 163,495.45 0.04% 15,939.66 01/15/2029 DD 01/0l/99SEC ID: 36210FRY4 GNMA POOL #0496461 6.000% 105.1758 591,299.350 561,272.41 621,903.70 0.16% 60,631.29 01/15/2029 DD 01/01/99SEC ID: 36210MQN4 GNMA POOL #0497343 6.000% 105.2383 30,334.100 28,793.70 31,923.09 0.01% 3,129.39 12/ 15/2028 DD 12/01/98SEC ID: 36210NP45 GNMA POOL #0499153 6.000% 105.1758 17,331.030 16,450.93 18,228.05 0.00% 1,777.12 02/15/2029 DD 02/01/99SEC ID: 36210QQE5 GNMA POOL #0500917 6.000% 105.1758 13,139.630 12,472.39 13,819.71 0.00% 1,347.32 04/15/2029 DD 04/0l/99SEC ID: 36210SPAO 9 Workbench Asset Detail Report ID: GL8013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: , OCSD-CONSOUDATED -OCSG00010000 6 / 30 t. 200..a Status: FINAL ... ···•-»••••···············-······-·--··-··················· I Description Net Unrealized Price Cost Market Value %of Gain/Loss Base Shares Par Base Base Total Base GNMA POOL #0503388 6.000% 105.1758 480,059.770 455,681.73 504,906.61 0.13% 49,224.88 03/15/2029 DD 03/01/99SEC ID: 36210VF55 GNMA POOL #0506636 6.000% 105.1758 46,987.950 44,601.84 49,419.94 0.01% 4,818.10 04/15/2029 DD 04/0l/99SEC ID: 36210YY90 GNMA POOL #0512235 6.500% 105.4414 20,064.080 21,057.88 21,155.85 0.01% 97.97 11/15/2029 DD 11/01/99SEC ID: 36211GBC6 GNMA POOL #0514326 6.500% 105.4414 314,020.830 329,084.02 331,107.99 0.08% 2,023.97 07/15/2029 DD 07/0l/99SEC ID: 36211JLF2 GNMA POOL #0530053 6.500% 104.8558 95,473.620 100,202.55 100,109.65 0.03% -92.90 04/15/2031DD04/01/0lSEC ID: 36212CZS3 GNMA POOL #0530290 6.500% 105.3477 69,415.010 72,744.76 73,127.09 0.02% 382.33 03/15/2031DD04/01/0lSEC ID: 36212DC31 GNMA POOL #0537885 6.500% 105.3477 167,438.020 175,731.43 176,392.04 0.04% 660.61 02/15/2031DD02/01/0lSEC ID: 36212MRE1 GNMA POOL #0547512 6.500% 105.3477 24,950.390 26,186.21 26,284.65 0.01% 98.44 04/15/2031DD04/01/0lSEC ID: 36212YGV9 GNMA POOL #0547715 6.500% 105.3477 288,700.520 302,549.12 304,139.24 0.08% 1,590.12 02/15/2031DD02/01/0lSEC ID: 36212YN82 GNMA POOL #0552322 6.500% 105.3477 117,666.450 123,494.62 123,958.85 0.03% 464.23 01/15/2032 DD Ol/01/02SEC ID: 36213ESK3 GNMA POOL #0552466 6.500% 104.9099 957 ,229. 700 1,004,642.48 1,004,229.08 0.25% -413.40 03/15/2032 DD 03/01/02SEC ID: 36213EW36 GNMA POOL #0552659 6.500% 105.3164 798,660.080 838,218.71 841,120.12 0.21% 2,901.41 07 /15/2032 DD 07 /01/02SEC ID: 36213E5U6 GNMA POOL #0561017 6.500% 105.3477 808,303.230 848,339.50 851,528.54 0.21% 3,189.04 07 /15/2031DD07 /01/0lSEC ID: 36213QG29 10 , Workben<;!t Asset Detail Report ID: GL8013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CO.NSOUDATED -OCSGOOOlOOOO 6/30/2003 Status: FINAL -. • •--••-· n-• .. •-··••· --------- I Description Net Unrealized Price Cost Market Value %of Gain/Loss Base Sha.res Par Base Base Total Base GNMA II POOL #0080023VAR RT 103.7344 304,823.380 309,872.02 316,206.80 0.08% 6,334.78 12/20/2026 DD 12/01/96SEC ID: 36225CAZ9 GNMA II POOL #080088M 7 .375% 103.1072 425,666.380 434,977.84 438,892.77 0.11% 3,914.93 06/20/2027 DD 06/01/97SEC ID: 36225CC20 GNMA II POOL #0080395VAR RT 103.0331 356,159.390 352,931.70 366,961.88 0.09% 14,030.18 04/20/2030 DD 04/01/00SEC ID: 36225CNM4 GNMA II POOL #080408X 6.500% 103.0318 3 ,221,037.410 3, 188,323.74 3,318,691.21 0.84% 130,367.47 05/20/2030 DD 05/01/00SEC ID: 36225CN28 GTE NORTH INC DEB SER A6.000% 102.5310 3 ,000,000.000 3,063,750.00 3,075,930.00 0.78% 12,180.00 01/ 15/2004 DD Ol/15/94SEC ID: 362337AD9 GENERAL ELEC MTN # TR 102.2810 1 ,340,000.000 1,380,508.20 1,370,565.40 0.35% -9,942.80 00019STEP UP 10/30/2003 DD ll/02/92SECID:36962FAUO GENERAL ELEC CAP MTN #TR 108.3120 5 ,000,000.000 5,203,500.00 5,415,600.00 1.37% 212,100.00 00575 5.450% 01/15/2013 DD 12/06/02SECID:36962GZY3 GENERAL MTRS ACCEP MTN 99.9840 4 .000,000.000 3,998,440.00 3,999,360.00 1.01% 920.00 #00615VAR RT 08/04/2003 DD 08/03/0lSEC ID: 37042WE80 GMAC NTSVAR RT 08/ 18/2003 DD 99.9530 3.950,000.000 3,918,768.50 3,948,143.50 1.00% 29,375.00 08/17/98SECID:370425QV5 GENERAL MTRS ACCEP CORP SR NT 103.9210 3 .000,000.000 3,064,350.00 3,117,630.00 0.79°/o 53,280.00 6.125% 08/28/2007 DD 08/29/02SECID:370425SD3 GILLETTE CO NT 6.250% 100.6090 250,000.000 256,012.50 251,522.50 0.06% -4,490.00 08/ 15/2003 DD 08/ 16/93SEC ID: 375766AC6 GOLDMAN SACHS GROUP INC SR NT 105.0780 3 ,000,000.000 3,030,030.00 3,152,340.00 0.80% 122,310.00 4.125% 01/15/2008 DD 01/13/03SECID:38141GCS1 GNMA GTD REMIC TR 2000-9 100.5380 946,909.160 946,909.16 952,003.53 0.24% 5,094.37 FHVAR RT02/16/2030SEC ID: 3837H4NX9 HOUSEHOLD FIN CORP NT 6.375% 113.7030 1.635,000.000 1,772,820.00 1,859,044.05 0.47% 86,224.05 10/15/2011 DD 10/23/0lSEC ID: 441812JWS 11 Workbench Asset Detail Reportm: GL8013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCS.O.CONSOUDATBD -OCSGOOOlOOOO 6/30/2003 Status: FINAL ......... , __ ··--·-·---·-·------·-·• ............... -----·-·-··-·-···----·· .. ······-···--········· Net Unrealized Price Cost Market Value %of Gain/Loss Description Base Shares Par Base Base Total Base JP MORGAN CHASE & CO SUB NT5. 109.3280 3 ,000,000.000 3,127,260.00 3,279,840.00 0.83% 152,580.00 750% 01/02/2013 DD ll/25/02SECID:46625HAT7 LEHMAN BROS HLDGS INC6.625% 103.9530 2 .000,000.000 2,091,180.00 2,079,060.00 0.52% -12,120.00 04/01/2004 DD 03/26/99SEC ID: 524908BZ2 MARSH & MCLENNAN COS INC SR 104.8900 2 ,000,000.000 1,992,280.00 2,097 ,800.00 0.53% 105,520.00 NT6.625% 06/15/2004 DD 06/14/99SECID:571748AB8 MORGAN STANLEY NT 3.625% 102.4840 3 ,200,000.000 3, 195,648.00 3 ,279 ,488.00 0.83% 83,840.00 04/01/2008 DD 03/06/03SEC ID: 617446HW2 MORGAN STANLEY DW MTN 100.6870 1 ,000,000.000 1,045,350.00 1,006,870.00 0.25% -38,480.00 #TR003497.125% 08/15/2003 DD 08/10/00SECID:61745EQN4 NATIONAL RURAL UTILS COOP FIN 119.7340 3 ,000,000.000 3,465,480.00 3,592,020.00 0.91% 126,540.00 7.250% 03/01/2012 DD 03/07/02SECID:637432CU7 PACIFICORP SECD MTN #TR 00115 107.0780 3 ,000,000.000 2, 950,530.00 3,212,340.00 0.81% 261,810.00 7.300% 10/22/2004 DD 10/22/92SECID:69512EEU5 PAINE WEBBER GROUP INC NTS6. 102.1560 500,000.000 519,405.00 510,780.00 0.13% -8,625.00 450% 12/01/2003 DD 12/0l/98SECID:695629CE3 PHILIP MORRIS COS INC NTS 7. 103.5000 5.000,000.000 5,263,000.00 5, 175,000.00 1.31% -88,000.00 500% 04/01/2004 DD 04/0l/97SECID:718154CH8 PROCTER & GAMBLE CO NTS5.250% 100.8590 656,000.000 672,278.56 661,635.04 0.17% -10,643.52 09/15/2003 DD 09/28/98SEC ID: 742718BK4 SBA GTD DEV PARTN 2001-20C 16. 111.8900 3 .. 679,356.910 3,679,356.91 4,116,832.45 1.04% 437,475.54 340% 03/0l/2021SEC ID: 83162CWO SBA GTD PARTN CTFS SBIC-PS 01 109.6400 2 .520,466.090 2,520,466.09 2,763,439.02 0.70% 242,972.93 6.640% 02/10/2011 DD 02/21/01SECID:831641DD4 UNITED AIRLS PASSTHRU 01-1 C 6. 15.0000 1,600,000.000 1 ,600,000.00 240,000.00 0.06% -1,360,000.00 831% 03/01/2010 DD 08/22/01SECID:909317BC2 12 ,Workbenq/l ·-------------. ---------· Asset Detail Report ID: GL8013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOUDAT.ED -OCSGOOOlOOOO 6/30/2003 Status: FINAL I Description Net Unrealized Price Cost Market Value % of Gain/Loss Base Shares Par Base Base Total Base --· US BANCORP MTN #TR 001196. 104.0460 2,000,000.000 2,092,620.00 2,080,920.00 0.53% -11,700.00 000% 05/ 15/2004 DD 05/ 10/99SEC ID: 91159HEY2 US TREASURY BONDSl 1.875% 104.0625 5,800,000.000 6,251,984.38 6,035,625.00 1.52% -216,359.38 11/15/2003 DD 10/05/83SEC ID: 912810DGO U S TREASURY NOTES06.250% 115.0315 20,000,000.000 22,620,312.50 23 ,006,300.00 5.81% 385,987.50 02/15/2007 DD 02/15/97SEC ID: 9128272JO US TREASURY INFIATION INDEX 109.7969 16,242,520.000 14,312,299.52 17 ,833,780.19 4.50% 3,521,480.67 NT 3.375% 01/15/2007 DD 01/15/97SEC ID: 9128272M3 US TREASURY NOTESOS.750% 110.0940 57, 100,000.000 62,782,901.47 62,863,674.00 15.87% 80,772.53 11/15/2005 DD 11/15/00SEC ID: 9128276N7 VERIZON GLOBAL FOG CORP 121.9680 3,000,000.000 3,530,490.00 3,659,040.00 0.92% 128,550.00 GLOBAL 7.375% 09/01/2012 DD 08/26/02SECID:92344GAT3 VIRGINIA ELEC & PWR 01 SER AS. 109.2030 3' 500,000.000 3,487 ,680.00 3,822,105.00 0.96% 334,425.00 750% 03/31/2006 DD 03/27/01SECID:927804ENO WELLS FARGO & CO SUBNT6.125% 101.6090 450,000.000 467,496.00 457,240.50 0.12% -10,255.50 11/01/2003 DD l l/Ol/93SEC ID: 949740BY9 TOTAL FIXED INCOME SECURITIES 289,132,165.840 301,494,092.53 310,373,012.07 78.33% 8,878,919.54 TOTAL ASSETS U.S. DOLLAR 391,999,286.970 387 ,353,060. 78 396,231,980.32 100.00% 8,878,919.54 TOTAL ASSETS -BASE: 391,999,286.970 387 ,353,060. 78 396,231,980.32 100.00% 8,878,919.54 ·-------··------· ·--- 13 Workbench ·--------··--------- OCSD-CONSOLIDATED -OCSGOOOlOOOO Transaction Detail Reportedby Transaction Category 6/1/2003 -6/30/2003 Tran Type Description Trade Date Settle Date Reported Date RECEIPTS AND DISBURSEMENT TRANSACTIONS DISTRIBUTION TO PLAN ADMINISTRATOR U.S. DOLLAR cw REPS DISTRIBUTION TO PLAN ADMINISTRATORSEC ID: 6/11/2003 NA91234590CSF07511102: LIQUID OPER- PIMCO 6/11/2003 CW REPS DISTRIBUTION TO PLAN 6/19/2003 ADMINISTRATORSEC ID: NA91234590CSF07511102: LIQUID OPER-611912003 PIM CO TOTAL DISTRIBUTION TO PLAN ADMINISTRATOR U.S. DOLLAR: TOTAL DISTRIBUTION TO PLAN ADMINISTRATOR BASE: TOTAL RECEIPTS AND DISBURSEMENT TRANSACTIONS BASE: PURCHASES B B B B CASH & CASH EQUIVALENTS U.S. DOLLAR DU PONT DE NEMOUR DISC 06/ 11/2003SEC 6/2/2003 ID: 26354BTB8BROKER: CREDIT SUISSE 6/2/2003 FIRST BOSTON CORP, N YOCSF0751l102: 61212003 LIQUID OPER-PIMCO FEDERAL HOME LN BKS CONS DISC MAT 6/ 16/2003 06/ 17 /2003SEC ID: 313384GZ6BROKER: 6/ 16/2003 MERRILL LYNCH PIERCE FENNER SMITH INC 6 / 1612003 NYOCSF0751l102: LIQUID OPER-PIMCO FEDERAL HOME LN BK CONS DISC N MAT 6/30/2003 07 /25/2003SEC ID: 313384JPSBROKER: 6/30/2003 GOLDMAN SACHS & CO, NYOCSF07522202: 613012003 LONG TERM OPER-PIMCO FEDERAL HOME LN BK CONS DISC MAT 6/5/2003 09/03/2003SEC ID: 313384LF4BROKER: 6/5/2003 LEHMAN GOVT SECS INC, NYOCSF07522202: 61512003 LONG TERM OPER-PIMCO Price Base 99.9695 99.9967 99.9326 99.7250 1 Shares/Par 0.000 0.000 0.000 0.000 0.000 600,000.000 400,000.000 3,800,000.000 250,000.000 Cost Base -1,200,000.00 -4 ,000 ,000.00 -5,200,000.00 -5,200,000.00 -6,200,000.00 599,817.00 399,986.78 3,797,440.27 249,312.50 Report m: EWB009 Base Currency: USD Status: FINAL Amount Base -1,200,000.00 -4,000,000.00 -5,200,000.00 -5,200,000.00 -5,200,000.00 -599,817.00 -399,986.78 -3. 797 ,440.27 -249,312.50 Net Gain/Loss Base 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Cunency: USD OCSJ).CONSOUDATED -OCSG00010000 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base B FEDERAL NATL MTG ASSN DISCOUNT MAT 6/2/2003 99.9964 500,000.000 499,982.22 -499,982.22 0.00 06/03/2003SEC ID: 313588GK5BROKER: 6/2/2003 LEHMAN GOVT SECS INC, NYOCSF07522202: 61212003 LONG TERM OPER-PIMCO B FEDERAL NATL MTG ASSN DISCOUNT MAT 6/5/2003 99.6490 250,000.000 249,122.50 -249, 122.50 0.00 09/30/2003SEC ID: 313588MJ1BROKER: 6/5/2003 BANC OF AMERICA SEC LLC, SAN 6/5/2003 FRANCISCOOCSF07522202: LONG TERM B ii>l~~lfAt.1~TL MTG ASSN DISCOUNT MAT 6/19/2003 99.7083 600 ,000.000 598,249.67 -598,249.67 0.00 10/ 15/2003SEC ID: 313588MZ5BROKER: 6/19/2003 CHASE SECURITIES, NEW 6/19/2003 YORKOCSF07511102: LIQUID OPER-PIMCO B GENERAL ELEC CAP DISC 07 /23/2003SEC 6/17/2003 99.8970 400,000.000 399,588.00 -399,588.00 0.00 ID: 36959JUP6BROKER: CITIBANK CP IPA, 6/17/2003 NEW YORKOCSF07511102: LIQUID OPER-6/17/2003 PIM CO B GENERAL ELEC CAP DISC 07 /09 /2003SEC 6/5/2003 99.8848 600,000.000 599,308.67 -599,308.67 0.00 ID: 36959JU92BROKER: CITIBANK CP IPA, 6/5/2003 NEW YORKOCSF075ll102: LIQUID OPER-6/5/2003 PIM CO B MERCK & CO INC DISC 06/20/2003SEC ID: 6/18/2003 99.9932 200,000.000 199,986.45 -199,986.45 0.00 58933STL2BROKER: GOLDMAN SACHS & 6/ 18/2003 CO, NYOCSF07511102: LIQUID OPER-PIMCO 611812003 B CREDIT SUISSE FB REPO 01.240% 6/2/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7 ,000,000.00 0.00 06/03/2003 DD 06/02/03SEC ID: 6/2/2003 99405Z121BROKER: CREDIT SUISSE FIRST 6/2/2003 BOSTON CORP, N YOCSF0751l102: LIQUID B E?JF#Hk~THERS REPO 01.250% 6/2/2003 100.0000 7,000,000.000 7 ,000,000.00 -7 ,000,000.00 0.00 06/03/2003 DD 06/02/03SEC ID: 6/2/2003 99405Z295BROKER: LEHMAN GOVT SECS INC, NYOCSF07511102: LIQUID OPER-PIMCO 6 /2/2003 B CREDIT SUISSE FB REPO 01.210% 6/3/2003 100.0000 7,000,000.000 7 ,000,000.00 -7,000,000.00 0.00 06/04/2003 DD 06/03/03SEC ID: 6/3/2003 99406A455BROKER: CREDIT SUISSE FIRST 6/3/2003 BOSTON CORP, N YOCSF07511102: LIQUID B E?JFA~ 2 REPO 01.210% 06/04/2003 6/3/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7 ,000,000.00 0.00 DD 06/03/03SEC ID: 99406A513BROKER: 6/3/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 61312003 LIQUID OPER-PIMCO ------------·- 2 Workbench _ .. ___ ·-----·----- Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATBD-OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base B CREDIT SUISSE FB REPO 01.180% 6/4/2003 100.0000 7,000,000.000 7 ,000,000.00 -7 ,000,000.00 0.00 06/05/2003 DD 06/04/03SEC ID: 6/4/2003 99406A984BROKER: CREDIT SUISSE FIRST 6/4/2003 BOSTON CORP, N YOCSF07511102: LIQUID B Bf§~THERS REPO 01.190% 6/4/2003 100.0000 7 ,000,000.000 7,000,000.00 -7,000,000.00 0.00 06/05/2003 DD 06/04/03SEC ID: 6/4/2003 99406Cl 54BROKER: LEHMAN GOVT SECS INC, NYOCSF07511102: LIQUID OPER-PIMCO 6/4 /2003 B CREDIT SUISSE FB REPO 01.220'% 6/5/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7 ,000,000.00 0.00 06/06/2003 DD 06/05/03SEC ID: 6/5/2003 99406C402BROKER: CREDIT SUISSE FIRST 6/5/2003 BOSTON CORP, N YOCSF075ll102: LIQUID B [W~m1Sft 2 REPO 01.220% 06/06/2003 6/5/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7,000,000.00 0.00 DD 06/05/03SEC ID: 99406D160BROKER: 6/5/2003 LEHMAN GOVT SECS INC, NYOCSF075ll102: 61512003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 01.2100/o 6/6/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7,000,000.00 0.00 06/09/2003 DD 06/06/03SEC ID: 6/6/2003 99406D814BROKER: CREDIT SUISSE FIRST 6/6/2003 BOSTON CORP, N YOCSF07511102: LIQUID B £>!'§Mf"m1Sft 2 REPO 01.210% 06/09/2003 6/6/2003 100.0000 7 ,000,000.000 7,000,000.00 -7,000,000.00 0.00 DD 06/06/03SEC ID: 99406E838BROKER: 6/6/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 61612003 LIQUID OPER-PIMCO B LEHMAN CAT 2 REPO 01.220% 06/10/2003 6/9/2003 100.0000 7,000,000.000 7 ,000,000.00 -7 ,000 ,000.00 0.00 DD 06/09/03SEC ID: 99406F777BROKER: 6/9/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 61912003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 01.220% 6/9/2003 100.0000 7,000,000.000 7 ,000,000.00 -7 ,000 ,000.00 0.00 06/10/2003 DD 06/09/03SEC ID: 6/9/2003 99406F918BROKER: CREDIT SUISSE FIRST 6/9/2003 BOSTON CORP, N YOCSF07511102: LIQUID B eR1B11fl~sE FB REPO 01.200% 6/10/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7,000,000.00 0.00 06/11/2003 DD 06/10/03SEC ID: 6/10/2003 99406Hl61BROKER: CREDIT SUISSE FIRST 6/10/2003 BOSTON CORP, N YOCSF075ll102: LIQUID B 9f§Mf"m1Sft 2 REPO 01.200%06/11/2003 6/10/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7,000,000.00 0.00 DD 06/10/03SEC ID: 99406H351BROKER: 6/10/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 6 / l0/2003 LIQUID OPER-PIMCO 3 Workbench --·--·-·--- Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base B LEHMAN CAT 2 REPO 01.180% 06/ 12/2003 6/11/2003 100.0000 6,700,000.000 6,700,000.00 -6, 700,000.00 0.00 DD 06/ll/03SEC ID: 99406J480BROKER: 6/11/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 6 / l l/2003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 01.190% 6/11/2003 100.0000 6,700,000.000 6,700,000.00 -6,700,000.00 0.00 06/12/2003 DD 06/11/03SEC ID: 6/11/2003 99406J605BROKER: CREDIT SUISSE FIRST 6/11/2003 BOSTON CORP, N YOCSF07511102: LIQUID B BfliJ3r~ 2 REPO 01.220% 06/ 13/2003 6/12/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7 ,000,000.00 0.00 DD 06/12/03SEC ID: 99406Ll548ROKER: 6/12/2003 LEHMAN GOVT ~ECS INC, NYOCSF075l1102: 611212003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 01.210% 6/12/2003 100.0000 6,400,000.000 6,400,000.00 -6,400,000.00 0.00 06/13/2003 DD 06/12/03SEC ID: 6/12/2003 99406L204BROKER: CREDIT SUISSE FIRST 6/12/2003 BOSTON CORP, N YOCSF0751l102: LIQUID B 8iil31¥JM6'fSsE FB REPO 01.200% 6/13/2003 100.0000 6, 700,000.000 6,700,000.00 -6, 700,000.00 0.00 06/16/2003 DD 06/13/03SEC ID: 6/13/2003 99406L733BROKER: CREDIT SUISSE FIRST 6/13/2003 BOSTON CORP, N YOCSF075 l l 102: LIQUID B ~~ 2 REPO 01.200% 06/ 16/2003 6/13/2003 100.0000 6,700,000.000 6,700,000.00 -6,700,000.00 0.00 DD 06/13/03SEC ID: 99406M392BROKER: 6/13/2003 LEHMAN GOVT SECS INC, NYOCSF075ll102: 6 / 1312003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 01.280% 6/16/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7 ,000,000.00 0.00 06/ 17 /2003 DD 06/ 16/03SEC ID: 6/16/2003 99406M905BROKER: CREDIT SUISSE FIRST 6/16/2003 BOSTON CORP, N YOCSF0751l102: LIQUID B Bf~2 REPO 01.280%06/17/2003 6/16/2003 100.0000 7 ,000,000.000 7 ,000,000.00 -7,000,000.00 0.00 DD 06/16/03SEC ID: 99406P015BROKER: 6/16/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 6 / 1612003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 01.220% 6/17/2003 100.0000 7,000,000.000 7 ,000,000.00 -7 ,000,000.00 0.00 06/ 18/2003 DD 06/ 17 /03SEC ID: 6/17/2003 99406P437BROKER: CREDIT SUISSE FIRST 6/17/2003 BOSTON CORP, N YOCSF07511102: LIQUID B £i'~ 2 REPO 01.220% 06/ 18/2003 6/17/2003 100.0000 7,000,000.000 7 ,000,000.00 -7 ,000,000.00 0.00 DD 06/17 /03SEC ID: 99406Ql 12BROKER: 6/ 17 /2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 6 / 1712003 LIQUID OPER-PIMCO 4 Workbencl'l B B B B B B B B B B --------·--· ------------- Transaction Detail Reportedby Transaction Category 6/1/2003 -6/30/2003 Tran Type Description Trade Date Settle Date Reported Date CREDIT SUISSE FB REPO 01.210% 6/18/2003 06/19/2003 DD 06/18/03SEC ID: 6/18/2003 99406Q708BROKER: CREDIT SUISSE FIRST 611812003 BOSTON CORP, N YOCSF0751l102: LIQUID f>!>lf~ 2 REPO 01.210% 06/19/2003 6/18/2003 DD 06/18/03SEC ID: 99406R409BROKER: 6/18/2003 LEHMAN GOVT SECS INC, NYOCSF075ll102: 6 / 1812003 LIQUID OPER-PIMCO CREDIT SUISSE FB REPO 01.210% 6/19 /2003 06/20/2003 DD 06/19/03SEC ID: 6/19/2003 99406SOO I BROKER: CREDIT SUISSE FIRST BOSTON CORP, N YOCSF0751l102: LIQUID 6/ l 9 /2003 f>!>#tfk~ 2 REPO 01.210% 06/20/2003 6/ 19/2003 DD 06/19/03SEC ID: 99406S761BROKER: 6/19/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 611912003 LIQUID OPER-PIMCO LEHMAN CAT 2 REPO 01.140% 06/23 /2003 6 /20 /2003 DD 06/20/03SEC ID: 99406U550BROKER: 6/20/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 612012003 LIQUID OPER-PIMCO CREDIT SUISSE FB REPO 01.140% 6 /20 /2003 06/23/2003 DD 06/20/03SEC ID: 6/20/2003 99406U675BROKER: CREDIT SUISSE FIRST BOSTON CORP, N YOCSF0751l102: LIQUID 6/20/2003 e~B111J~SE FB REPO 01.160% 6/23/2003 06/24/2003 DD 06/23/03SEC ID: 6/23/2003 99406U840BROKER: CREDIT SUISSE FIRST BOSTON CORP, N YOCSF0751l102: LIQUID 6/23/2003 f>!>IHt~2 REPO 01.160%06/24/2003 6/23/2003 DD 06/23/03SEC ID: 99406V640BROKER: 6/23/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 612312003 LIQUID OPER-PIMCO LEHMAN CAT 2 REPO 01.070% 06/25/2003 6/24/2003 DD 06/24/03SEC ID: 99406W986BROKER: 6/24/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 612412003 LIQUID OPER-PIMCO CREDIT SUISSE FB REPO 01.0SOOA> 6/24/2003 06/25/2003 DD 06/24/03SEC ID: 6/24/2003 99406W994BROKER: CREDIT SUISSE FIRST BOSTON CORP, N YOCSF0751l102: LIQUID 6 /24/2003 OPER-PIMCO Price Base 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 5 Shares/Par 7 ,000,000.000 7,000,000.000 3,400,000.000 6,600,000.000 4,800,000.000 4 ,800 ,000.000 4 ,800 ,000.000 4,800,000.000 4,800,000.000 4,800,000.000 Cost Base 7 ,000,000.00 7 ,000,000.00 3,400,000.00 6,600,000.00 4,800,000.00 4 ,800,000.00 4,800,000.00 4 ,800,000.00 4,800,000.00 4,800,000.00 Report ID: EWB009 Base Currency: USD Status: FINAL Amount Base Net Gain/Loss Base -7 ,000,000.00 0.00 -7 ,000 ,000.00 0.00 -3,400,000.00 0.00 -6,600,000.00 0.00 -4,800,000.00 0.00 -4,800,000.00 0.00 -4,800,000.00 0.00 -4,800,000.00 0.00 -4,800,000.00 0.00 -4,800,000.00 0.00 Workbench Transaction Detail Report ID: EWB009 Reportedby Transaction Category Base Cunency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL --·· Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base B LEHMAN CAT 2 REPO 00.890% 06/26 /2003 6/25/2003 100.0000 4,800,000.000 4,800,000.00 -4 ,800,000.00 0.00 DD 06/25/03SEC ID: 99406Y404BROKER: 6/25/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 612512003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 00.8800/0 6/25/2003 100.0000 4,800,000.000 4,800,000.00 -4,800,000.00 0.00 06/26/2003 DD 06/25/03SEC ID: 6/25/2003 99406Y602BROKER: CREDIT SUISSE FIRST 612512003 BOSTON CORP, N YOCSF07511102: LIQUID B 8RMf~TimASURY CASH MGMTSEC ID: 6/3/2003 1.0000 500,559.140 500,559.14 -500,559.14 0.00 9960852470CSF07522202: LONG TERM 6/3/2003 OPER-PIMCO 6/3/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/3/2003 1.0000 1,504.400 1,504.40 -1,504.40 0.00 99608524 70CSF075 l l l 02: LIQUID OPER-6/3/2003 PIM CO 6/3/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/4/2003 1.0000 470.560 470.56 -470.56 0.00 9960852470CSF07511102: LIQUID OPER-6/4/2003 PIM CO 6/4/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/4/2003 1.0000 6,682.470 6,682.47 -6,682.47 0.00 9960852470CSF07522202: LONG TERM 6/4/2003 OPER-PIMCO 6/4/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/6/2003 1.0000 474.440 474.44 -474.44 0.00 9960852470CSF07511102: LIQUID OPER-6/6/2003 PIM CO 6/6/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/9/2003 1.0000 1,411.660 1,411.66 -1,411.66 0.00 9960852470CSF07511102: LIQUID OPER-6/9/2003 PIM CO 6/9/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/9/2003 1.0000 87,356.030 87,356.03 -87,356.03 0.00 9960852470CSF07522202: LONG TERM 6/9/2003 OPER-PIMCO 6/9/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/10/2003 1.0000 468.080 468.08 -468.08 0.00 9960852470CSF07522202: LONG TERM 6/10/2003 OPER-PIMCO 6/10/2003 ------··------ 6 Workbenclt. • Transaction Detail Report ID: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOLIDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base B DREYFUS TREASURY CASH MGMTSEC ID: 6/10/2003 1.0000 474.440 474.44 -474.44 0.00 9960852470CSF07511102: LIQUID OPER-6/10/2003 PIM CO 6/10/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/11/2003 1.0000 466.660 466.66 -466.66 0.00 99608524 70CSF0751 l 102: LIQUID OPER-6/11/2003 PIM CO 6/11/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/12/2003 1.0000 43,164.060 43,164.06 -43,164.06 0.00 9960852470CSF07522202: LONG TERM 6/12/2003 OPER-PIMCO 6/12/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/12/2003 1.0000 441.080 441.08 -441.08 0.00 9960852470CSF0751l102: LIQUID OPER-6/12/2003 PIM CO 6/12/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/13/2003 1.0000 452.330 452.33 -452.33 0.00 9960852470CSF07511102: LIQUID OPER-6/13/2003 PIM CO 6/13/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/16/2003 1.0000 23,853.220 23,853.22 -23,853.22 0.00 99608524 70CSF075 l l 102: LIQUID OPER-6/16/2003 PIM CO 6/16/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/16/2003 1.0000 1,418,020.990 1,418,020.99 -1,418,020. 99 0.00 9960852470CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO 6/16/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/17/2003 1.0000 114,921.880 114,921.88 -114,921.88 0.00 9960852470CSF07522202: LONG TERM 6/17/2003 OPER-PIMCO 6/17/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/17/2003 1.0000 909.780 909.78 -909.78 0.00 99608524 70CSF075 l l l 02: LIQUID OPER-6/17/2003 PIM CO 6/17/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 6/18/2003 1.0000 39,793.400 39,793.40 -39,793.40 0.00 99608524 70CSF07522202: LONG TERM 6/18/2003 OPER-PIMCO 6/18/2003 7 Workbench OCSD-CONSOUDATED -OCSGOOOlOOOO Transaction Detail Reportedby Transaction Category 6/1/2003 -6/30/2003 B B B B B B B B --------------·--------~----· Trade Date Tran Type Description Settle Date Reported Date DREYFUS TREASURY CASH MGMTSEC ID: 9960852470CSF07511102: LIQUID OPER- PIMCO DREYFUS TREASURY CASH MGMTSEC ID: 9960852470CSF07511102: LIQUID OPER- PIMCO DREYFUS TREASURY CASH MGMTSEC ID: 9960852470CSF07522202: LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMTSEC ID: 9960852470CSF07511102: LIQUID OPER- PIMCO DREYFUS TREASURY CASH MGMTSEC ID: 9960852470CSF07522202: LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMTSEC ID: 9960852470CSF0751l102: LIQUID OPER- PIMCO DREYFUS TREASURY CASH MGMTSEC ID: 9960852470CSF07511102: LIQUID OPER- PIMCO 6/18/2003 6/18/2003 6/18/2003 6/20/2003 6/20/2003 6/20/2003 6/20/2003 6/20/2003 6/20/2003 6/23/2003 6/23/2003 6/23/2003 6/24/2003 6/24/2003 6/24/2003 6/24/2003 6/24/2003 6/24/2003 6/25/2003 6/25/2003 6/25/2003 DREYFUS TREASURY CASH MGMTSEC ID: 6/26/2003 9960852470CSF07511102: LIQUID OPER-6/26/2003 PIMCO 6/26/2003 Price Base 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Shares/Par 15,487.990 183,551.080 319,654.240 912.000 8,396,250.000 309.340 282.670 1.0000 9,600,236.000 Cost Base 15,487.99 183,551.08 319,654.24 912.00 8,396,250.00 309.34 282.67 9,600,236.00 TOTAL CASH & CASH EQUIVALENTS U.S. DOLLAR: 256,958,107.940 256,950,902.00 TOTAL CASH & CASH EQUIVALENTS BASE: FIXED INCOME SECURITIES U.S. DOLLAR 256,958,107.940 256,950,902.00 8 Report m: EWB009 Base Currency: USD Status: FINAL Amount Base Net Gain/Loss Base -15,487.99 0.00 -183,551.08 0.00 -319 ,654 .24 0.00 -912.00 0.00 -8,396,250.00 0.00 -309.34 0.00 -282.67 0.00 -9,600,236.00 0.00 -256,950,902.00 0.00 -256,950,902.00 0.00 Workbencl'l Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base BC COMMIT TO PUR FNMA SF MTG 5.000% 4/3/2003 101.6250 -3,000,000.000 -3,048, 750.00 3,048,750.00 0.00 06/01/2018 DD 06/0l/03SEC ID: 6/17/2003 01F050460BROKER: BEAR STEARNS & CO 6/1/2003 INC, NYOCSF07522202: LONG TERM OPER- BC ~T TO PUR FNMA SF MTG 5.000% 4/3/2003 101.6250 -2,000,000.000 -2,032,500.00 2,032,500.00 0.00 06/01/2018 DD 06/0l/03SEC ID: 6/17/2003 01F050460BROKER: LEHMAN GOVT SECS 6/1/2003 INC, NYOCSF07522202: LONG TERM OPER- B ~IT TO PUR FNMA SF MTG 5.0000/o 4/3/2003 101.6250 2,000,000.000 2,032,500.00 -2,032,500.00 0.00 06/01/2018 DD 06/01/03SEC ID: 6/17/2003 01F050460BROKER: LEHMAN GOVT SECS 6/1/2003 INC, NYOCSF07522202: LONG TERM OPER- B ~IT TO PUR FNMA SF MTG 5.0000/o 4/3/2003 101.6250 3,000,000.000 3,048, 750.00 -3,048, 750.00 0.00 06/01/2018 DD 06/0l/03SEC ID: 6/17/2003 01F050460BROKER: BEAR STEARNS & CO 6/1/2003 INC, NYOCSF07522202: LONG TERM OPER- B ~IT TO PUR FNMA SF MTG 5.0000/o 6/11/2003 103.6875 2,000,000.000 2,073,750.00 -2,073,750.00 0.00 07 /01/2018 DD 07 /01/03SEC ID: 7/17/2003 01F0504 78BROKER: LEHMAN GOVT SECS INC, NYOCSF07522202: LONG TERM OPER-6 /11/2003 B ~IT TO PUR FNMA SF MTG 5.000% 6/11/2003 103.6406 6,000,000.000 6,218,437.50 -6,218,437.50 0.00 07 /01/2018 DD 07 /Ol/03SEC ID: 7/17/2003 01F050478BROKER: CREDIT SUISSE FIRST 6/11/2003 BOSTON CORP, N YOCSF07522202: LONG B ~f\Pf6-j1lfi~MA SF MTG 5.000% 6/12/2003 103.6875 3,000,000.000 3,110,625.00 -3,110,625.00 0.00 07 /01/2018 DD 07 /Ol/03SEC ID: 7/17/2003 01F050478BROKER: BEAR STEARNS & CO 6/12/2003 INC, NYOCSF07522202: LONG TERM OPER- B ~IT TO PUR FNMA SF MTG 6.000% 6/3/2003 103.7813 5,000,000.000 5,189,062.50 -5,189,062.50 0.00 07 /01/2033 DD 07 /01/03SEC ID: 7/14/2003 01F060675BROKER: GOLDMAN SACHS & 6/3/2003 CO, NYOCSF07522202: LONGTERM OPER- B ~IT TO PUR FNMA SF MTG 6.000% 6/25/2003 104.0000 5,000,000.000 5,200,000.00 -5,200,000.00 0.00 08/01/2033 DD 08/01/03SEC ID: 8/13/2003 01F060683BROKER: GOLDMAN SACHS & 6/25/2003 CO, NYOCSF07522202: LONGTERM OPER- BC ~IT TO PUR GNMA SF MTG 6.5000/o 5/19/2003 104.9531 -8,000,000.000 -8,396,250.00 8,396,250.00 0.00 06/15/2033 DD 06/0l/03SEC ID: 6/19/2003 01N062664BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM OPER-PIMCO - 9 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOLIDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL ------ Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base B GNMA POOL #0596612 6.500% 5/19/2003 104.9531 643,217.720 675,077.10 -675,077.10 0.00 09/15/2032 DD 09/0l/02SEC ID: 6/19/2003 36200BYH4BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM IB 8m«kPl~§8L #0596612 6.50001o 5/19/2003 104.9531 0.000 0.00 -2,090.46 0.00 09/15/2032 DD 09/0l/02SEC ID: 6/19/2003 36200BYH4BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM B 8H&Pl\fo8L #0569685 6.500% 5/19/2003 104.9531 88,455.910 92,837.24 -92,837.24 0.00 02/15/2032 DD 02/0l/02SEC ID: 6/19/2003 36200Q2S2BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM IB 8~Pl¥§8L #0569685 6.5000/o 5/19/2003 104.9531 0.000 0.00 -287.48 0.00 02/15/2032 DD 02/0l/02SEC ID: 6/19/2003 36200Q2S2BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM B 8m«kPI~8L #0574323 6.500% 5/19/2003 104.9531 924,612.540 970,409.75 -970,409.75 0.00 12/15/2031 DD 12/01/0lSEC ID: 6/19/2003 36200WAY7BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM IB 8~Pl¥§8L #0574323 6.500% 5/19/2003 104.9531 0.000 0.00 -3,004.99 0.00 12/15/2031 DD 12/01/0lSEC ID: 6/19/2003 36200WAY7BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM B 8~iJkPI1tf68L #0575364 6.500% 5/19/2003 104.9531 101,103.100 106,110.86 -106,110.86 0.00 11/15/2031DD11/01/0lSEC ID: 6/19/2003 36200XFD6BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM IB 8~Pl¥§8L #0575364 6.500% 5/19/2003 104.9531 0.000 0.00 -328.59 0.00 11/15/2031DD11/01/0lSEC ID: 6/19/2003 36200XFD6BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM B 8~Pl\fo8L #0585263 6.500% 5/19/2003 104.9531 150,533.650 157,989.77 -157,989.77 0.00 08/15/2032 DD 08/01/02SEC ID: 6/19/2003 36201KFC5BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM IB 8m«kP1¥§8L #0585263 6.500% 5/19/2003 104.9531 0.000 0.00 -489.23 0.00 08/15/2032 DD 08/01/02SEC ID: 6/19/2003 36201KFC5BROKER: UBS SECURITIES LLC, 6/1/2003 NEW YORKOCSF07522202: LONG TERM OPER-PIMCO ··-----· 10 Workbench ·--··-·--·----·----·---------· --- OCSD-CONSOUDATED -OCSOOOOlOOOO Transaction Detail Reportedby Transaction Category 6/1/2003 -6/30/2003 Tran Trade Date Settle Date Reported Date Type Description B IB B IB B IB B IB B IB GNMA POOL #0587117 6.500% 06/15/2032 DD 06/0l/02SEC ID: 36201MG22BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8m«kPI¥88L #0587117 6.500% 06/15/2032 DD 06/0l/02SEC ID: 36201MG22BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8~PI¥68L #0587439 6.500% 11/15/2032 DD 12/01/02SEC ID: 36201MS45BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8~PI\f08L #0587439 6.500% 11/15/2032 DD 12/0l/02SEC ID: 36201MS45BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8~Pl\f68L#0421389 6.500% 04/15/2026 DD 04/01/96SEC ID: 36206UC23BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8~PI\f68L #0421389 6.500% 04/15/2026 DD 04/01/96SEC ID: 36206UC23BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8~Pl\f08L #0449851 6.500% 01/15/2028 DD Ol/Ol/98SEC ID: 36208FWLOBROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8m«kP1¥68L #0449851 6.500% 01/15/2028 DD 01/0l/98SEC ID: 36208FWLOBROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8~P1¥§8L #0466845 6.500% 06/15/2028 DD 06/0l/98SEC ID: 36209BTA6BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8~Pl\f68L #0466845 6.5000/o 06/15/2028 DD 06/0l/98SEC ID: 36209BTA6BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM OPER-PIMCO 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 Price Base 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 11 Shares/Par 35,137.400 0.000 114,081.200 0.000 22,606.460 0.000 32,277.780 0.000 100,137.410 0.000 Cost Base 36,877.80 0.00 119,731.78 0.00 23,726.19 0.00 33,876.54 0.00 105,097.34 0.00 Report ID: EWB009 Base Currency: USD Status: FINAL Amount Base -36,877.80 -114.20 -119,731.78 -370.76 -23,726.19 -73.47 -33,876.54 -104.90 -105,097.34 -325.45 Net Gain/Loss Base 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL - Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base B GNMA POOL #0468052 6.500% 5/19/2003 104.9531 681,928.550 715,705.32 -715,705.32 0.00 07 /15/2028 DD 07 /01/98SEC ID: 6/19/2003 36209C5M4BROKER: UBS SECURITIES LLC, 6 / l/2003 NEW YORKOCSF07522202: WNG TERM IB 8J:1i&PI~8L #0468052 6.500% 5/19/2003 104.9531 0.000 0.00 -2,216.27 0.00 07 /15/2028 DD 07 /Ol/98SEC ID: 6/19/2003 36209C5M4BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: WNG TERM B 0~ilkPI~8L #0485527 6.500% 5/19/2003 104.9531 815,970.740 856,386.79 -856,386. 79 0.00 06/15/2031DD06/01/0lSEC ID: 6/19/2003 36209YLG1BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM IB 8~Pl\f88L #0485527 6.500% 5/19/2003 104.9531 0.000 0.00 -2,651.90 0.00 06/15/2031DD06/01/0lSEC ID: 6/19/2003 36209YLG1BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: WNO TERM B 8~PI\f88L #0485610 6.500% 5/19/2003 104.9531 942,672.130 989,363.86 -989,363.86 0.00 07 /15/2031DD07 /01/0lSEC ID: 6/19/2003 36209YN38BROKER: UBS SECURITIES LLC, 61112003 NEW YORKOCSF07522202: LONG TERM 18 0~PI\f88L #0485610 6.500% 5/19/2003 104.9531 0.000 0.00 -3,063.68 0.00 07 /15/2031DD07 /01/0lSEC ID: 6/19/2003 36209YN38BROKER: UBS SECURITIES LLC, 6 / l 12003 NEW YORKOCSF07522202: WNO TERM B 8~Pl\fo8L #0485682 6.5000/o 5/19/2003 104.9531 182,912.610 191,972.50 -191,972.50 0.00 08/15/2031DD08/01/0lSEC ID: 6/19/2003 36209YRB6BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: WNO TERM IB 8~Pl~8L #0485682 6.500% 5/19/2003 104.9531 0.000 0.00 -594.47 0.00 08/15/2031DD08/01/0lSEC ID: 6/19/2003 36209YRB6BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM B 0~PI¥§8L #0485703 6.500% 5/19/2003 104.9531 173, 770.230 182,377.29 -182,377.29 0.00 08/15/2031DD08/01/0lSEC ID: 6/19/2003 36209YRY6BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: WNO TERM IB 0~PI~8L #0485703 6.500% 5/19/2003 104.9531 0.000 0.00 -564.75 0.00 08/15/2031DD08/01/0lSEC ID: 6/19/2003 36209YRY6BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM OPER-PIMCO 12 Workbendl --------·---------·--·------------------ OCSD-CONSOUDAT.ED -OCSGOOOlOOOO Transaction Detail Reportedby Transaction Category 6/1/2003 -6/30/2003 Tran Trade Date Settle Date Reported Date Type Description B IB B IB B IB B IB B IB GNMA POOL#0512235 6.500% 5/19/2003 11/15/2029 DD ll/01/99SEC ID: 6/19/2003 36211GBC6BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM 8~Pl¥08L #0512235 6.500% 5/19/2003 11/15/2029 DD 11/01/99SEC ID: 6/19/2003 36211GBC6BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM 8~Pl¥68L#0530053 6.500% 5/19/2003 04/15/2031DD04/01/0lSEC ID: 6/ 19/2003 36212CZS3BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 6I1 /2003 8~PI¥$8L#0530053 6.5000/o 5/19/2003 04/15/2031DD04/01/0lSEC ID: 6/19/2003 36212CZS3BROKER: UBS SECURITIES LLC, 6 / l 12003 NEW YORKOCSF07522202: LONG TERM 8~PI¥08L #0537885 6.500% 5/19/2003 02/15/2031DD02/01/0lSEC ID: 6/ 19/2003 36212MRE1BROKER: UBS SECURITIES LLC, 61 l 12003 NEW YORKOCSF07522202: LONG TERM 8~PI¥$8L #0537885 6.5000/o 5/19/2003 02/15/2031DD02/01/0lSEC ID: 6/19/2003 36212MRE1BROKER: UBS SECURITIES LLC, 61112003 NEW YORKOCSF07522202: LONG TERM 8~PI¥§8L #0547512 6.500% 5/19/2003 04/15/2031DD04/01/0lSEC ID: 6/19/2003 36212YGV9BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM 8§mP1¥§8L #0547512 6.500% 5/19/2003 04/15/2031DD04/01/0lSEC ID: 6/19/2003 36212YGV9BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM 8~PI¥68L #0552322 6.5000/o 5/19/2003 01/15/2032 DD Ol/Ol/02SEC ID: 6/19/2003 36213ESK3BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM 8~Pl¥68L #0552322 6.500% 5/19/2003 01/15/2032 DD Ol/01/02SEC ID: 6/19/2003 36213ESK3BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM OPER-PIMCO Price Base 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 104.9531 13 Shares/Par 20,064.080 0.000 95,473.620 0.000 167 ,438.020 0.000 24,950.390 0.000 117,666.450 0.000 Cost Base 21,057.88 0.00 100,202.55 0.00 175,731.43 0.00 26,186.21 0.00 123,494.62 0.00 Report m: EWB009 Base Currency: USD Status: FINAL Amount Base -21,057.88 -65.21 -100,202.55 -310.29 -175,731.43 -544.17 -26,186.21 -81.09 -123,494.62 -382.42 Net Gain/Loss Base 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Workbench OCSD-CONSOUDATBD-OCSG00010000 Transaction Detail Reportedby Transaction Category 6/ l/2003 -6/30/2003 Tran Trade Date Settle Date Reported Date Type Description B IB B IB B IB B IB GNMA POOL#0552466 6.500% 5/19/2003 03/15/2032 DD 03/01/02SEC ID: 6/19/2003 36213EW36BROKER: UBS SECURITIES LLC, 6 / l 12003 NEW YORKOCSF07522202: LONG TERM 8~PI¥§8L #0552466 6.500% 5/19 /2003 03/15/2032 DD 03/01/02SEC ID: 6/19/2003 36213EW36BROKER: UBS SECURITIES LLC, 6 /l/2003 NEW YORKOCSF07522202: LONG TERM 8mikP1¥68L #0552659 6.SOOOA> 5/19/2003 07 /15/2032 DD 07 /01/02SEC ID: 6/19/2003 36213E5U6BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 6/ 1/2003 8mikP1¥68L #0552659 6.5000A> 07 /15/2032 DD 07 /01/02SEC ID: 36213E5U6BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 8~i!kPl¥§8L #0561017 6.500% 07 /15/2031DD07 /01/0lSEC ID: 36213QG29BROKER: UBS SECURITIES LLC, NEW YORKOCSF07522202: LONG TERM 5/19/2003 6/19/2003 6/1/2003 5/19/2003 6/19/2003 6/1/2003 8~P1¥§8L #0561017 6.500% 5/19/2003 07 /15/2031DD07 /0l/OlSEC ID: 6/19/2003 36213QG29BROKER: UBS SECURITIES LLC, 61112003 NEW YORKOCSF07522202: LONG TERM 8~Pl¥68L #0561017 6.500% 5/ 19 /2003 07I15/2031 DD 07 /01/0lSEC ID: 6/ 19/2003 36213QG29BROKER: UBS SECURITIES LLC, 61112003 NEW YORKOCSF07522202: LONG TERM 8miXPI¥§8L #0561017 6.500% 5/19/2003 07 /15/2031DD07 /01/0lSEC ID: 6/19/2003 36213QG29BROKER: UBS SECURITIES LLC, 61112003 NEW YORKOCSF07522202: LONG TERM OPER-PIMCQTOTAL FIXED INCOME SECURITIES U.S. DOLLAR: TOTAL FIXED INCOME SECURITIES BASE: TOTAL PURCHASES BASE: PAY UPS FIXED INCOME SECURITIES Price Base Shares/Par 104.9531 957 ,229. 700 104.9531 0.000 104.9531 798,660.080 104.9531 0.000 104.9531 40,150.490 104.9531 0.000 104.9531 768,152.740 104.9531 0.000 20,999,203.000 20,999,203.000 277,957,310.940 14 Cost Base 1,004,642.48 0.00 838,218.71 0.00 42,139.19 0.00 806,200.31 0.00 21,791,038.51 21, 791,038.S 1 278,741,940.51 Report m: EWB009 Base Currency: USD Status: FINAL Amount Base -1,004,642.48 -3,111.00 -838,218.71 -2,595.65 -42,139.19 -130.49 -806,200.31 -2,496.50 -21,817,035.93 -21,817,035.93 -278,767,937.93 Net Gain/Loss Base 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Workbench. Transaction Detail Report ID: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base U.S. DOLLAR PU FHLMC MULTICLASS MTG SER E3 A VAR RT 6/1/2003 100.0000 4.500 4.50 -4.50 0.00 08/15/2032 DD 12/0l/97SEC ID: 6/1/2003 3133TCE950CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PU FHLMC MULTICLASS CTF SER 1620Z 6.000% 6/1/2003 100.0000 14,567.520 14,567.52 -14,567.52 0.00 11/ 15/2023 DD 1 l/Ol/93SEC ID: 6/1/2003 3133Tl 7 A40CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO TOTAL FIXED INCOME SECURITIES U.S. DOLLAR: 14,572.020 14,572.02 -14,572.02 0.00 TOTAL FIXED INCOME SECURITIES BASE: 14,572.020 14,572.02 -14,572.02 o.oo TOTAL PAY UPS BASE: 14,572.020 14,572.02 -14,572.02 0.00 SALES CASH & CASH EQUIVALENTS U.S. DOLLAR s FEDERAL HOME LN MTG CORP DISC MAT 6/19/2003 99.5763 -4,100,000.000 -4,082,629.67 4,082,629.67 0.00 06/24/2003SEC ID: 313396HG1BROKER: 6/19/2003 MORGAN STANLEY & CO INC, NYOCSF07522202: LONG TERM OPER-PIMCO 6/ l 9 /2003 IS FEDERAL HOME LN MTG CORP DISC MAT 6/19/2003 99.5763 0.000 0.00 16,857.83 0.00 06/24/2003SEC ID: 313396HG1BROKER: 6/19/2003 MORGAN STANLEY & CO INC, NYOCSF07522202: LONG TERM OPER-PIMCO 6 / l 9 /2 003 s FEDERAL NATL MTG ASSN DISC NTS MAT 6/19/2003 99.7025 -2,600,000.000 -2,592,265.00 2,592,265.00 0.00 06/25/2003SEC ID: 313588HH1BROKER: 6/19/2003 GOLDMAN SACHS & CO, NYOCSF07522202: 6/19/2003 LONG TERM OPER-PIMCO IS FEDERAL NATL MTG ASSN DISC NTS MAT 6/19/2003 99.7025 0.000 0.00 7,306.00 0.00 06/25/2003SEC ID: 313588HH1BROKER: 6/19/2003 GOLDMAN SACHS & CO, NYOCSF07522202: 6/19/2003 LONG TERM OPER-PIMCO s CREDIT SUISSE FB REPO 01.240% 6/2/2003 100.0000 -13,800,000.000 -13,800,000.00 13,800,000.00 0.00 06/02/2003 DD 05/30/03SEC ID: 6/2/2003 99405X779BROKER: CREDIT SUISSE FIRST 6/2/2003 BOSTON CORP, N YOCSF07511102: LIQUID OPER-PIMCO 15 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSG00010000 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IS CREDIT SUISSE FB REPO 01.240% 6/2/2003 100.0000 0.000 0.00 1,426.00 0.00 06/02/2003 DD 05/30/03SEC ID: 6/2/2003 99405X779BROKER: CREDIT SUISSE FIRST 6/2/2003 BOSTON CORP, N YOCSF0751l102: LIQUID s @~J311fl~SE FB REPO 01.2400/o 6/3/2003 100.0000 -7 ,000,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 06/03/2003 DD 06/02/03SEC ID: 6/3/2003 99405Z121BROKER: CREDIT SUISSE FIRST 6/3/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS e~B111JM&fSsE FB REPO 01.240% 6/3/2003 100.0000 0.000 0.00 241.11 0.00 06/03/2003 DD 06/02/03SEC ID: 6/3/2003 99405Z121BROKER: CREDIT SUISSE FIRST 6/3/2003 BOSTON CORP, N YOCSF07511102: LIQUID s Bf~THERS REPO 01.250% 6/3/2003 100.0000 -7 ,000,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 06/03/2003 DD 06/02/03SEC ID: 6/3/2003 99405Z295BROKER: LEHMAN GOVT SECS INC, NYOCSF0751l102: LIQUID OPER-PIMCO 6/3/2003 IS LEHMAN BROTHERS REPO 01.2500/o 6/3/2003 100.0000 0.000 0.00 243.06 0.00 06/03/2003 DD 06/02/03SEC ID: 6/3/2003 99405Z295BROKER: LEHMAN GOVT SECS INC, NYOCSF07511102: LIQUID OPER-PIMCO 6 /3/2003 s CREDIT SUISSE FB REPO 01.210% 6/4/2003 100.0000 -7 ,000,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 06/04/2003 DD 06/03/03SEC ID: 6/4/2003 99406A455BROKER: CREDIT SUISSE FIRST 6/4/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS @~)311/JMSi'SsE FB REPO 01.210% 6/4/2003 100.0000 0.000 0.00 235.28 0.00 06/04/2003 DD 06/03/03SEC ID: 6/4/2003 99406A455BROKER: CREDIT SUISSE FIRST 6/4/2003 BOSTON CORP, N YOCSF0751l102: LIQUID s BF~ 2 REPO 01.210% 06/04/2003 6/4/2003 100.0000 -7,000,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 DD 06/03/03SEC ID: 99406A513BROKER: 6/4/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 61412003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.210% 06/04/2003 6/4/2003 100.0000 0.000 0.00 235.28 0.00 DD 06/03/03SEC ID: 99406A513BROKER: 6/4/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 61412003 LIQUID OPER-PIMCO s CREDIT SUISSE FB REPO 01.180% 6/5/2003 100.0000 -7 ,000,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 06/05/2003 DD 06/04/03SEC ID: 6/5/2003 99406A984BROKER: CREDIT SUISSE FIRST 6/5/2003 BOSTON CORP, N YOCSF07511102: LIQUID OPER-PIMCO -----"-- 16 Workbench ------------ Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CO.NSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL --- Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IS CREDIT SUISSE FB REPO 01.180% 6/5/2003 100.0000 0.000 0.00 229.44 0.00 06/05/2003 DD 06/04/03SEC ID: 6/5/2003 99406A984BROKER: CREDIT SUISSE FIRST 6/5/2003 BOSTON CORP, N YOCSF0751l102: LIQUID s f?E~THERS REPO 01.190% 6/5/2003 100.0000 -7,000,000.000 -7 ,000 ,000.00 7 ,000,000.00 0.00 06/05/2003 DD 06/04/03SEC ID: 6/5/2003 99406C154BROKER: LEHMAN GOVT SECS INC, NYOCSF07511102: LIQUID OPER-PIMCO 6/5/2003 IS LEHMAN BROTHERS REPO 01.190% 6/5/2003 100.0000 0.000 0.00 231.39 0.00 06/05/2003 DD 06/04/03SEC ID: 6/5/2003 99406Cl54BROKER: LEHMAN GOVT SECS INC, NYOCSF07511102: LIQUID OPER-PIMCO 6/5/2003 s CREDIT SUISSE FB REPO 01.220% 6/6/2003 100.0000 -7 ,000 ,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 06/06/2003 DD 06/05/03SEC ID: 6/6/2003 99406C402BROKER: CREDIT SUISSE FIRST 6/6/2003 BOSTON CORP, N YOCSF0751l102: LIQUID IS eHB1JtIM5fSsE FB REPO 01.220% 6/6/2003 100.0000 0.000 0.00 237.22 0.00 06/06/2003 DD 06/05/03SEC ID: 6/6/2003 99406C402BROKER: CREDIT SUISSE FIRST 6/6/2003 BOSTON CORP, N YOCSF0751l102: LIQUID s f?E§Mr~ 2 REPO 01.220% 06/06/2003 6/6/2003 100.0000 -7 ,000,000.000 -7,000,000.00 7 ,000,000.00 0.00 DD 06/05/03SEC ID: 99406Dl60BROKER: 6/6/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 61612003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.220% 06/06/2003 6/6/2003 100.0000 0.000 0.00 237.22 0.00 DD 06/05/03SEC ID: 99406Dl60BROKER: 6/6/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 61612003 LIQUID OPER-PIMCO s CREDIT SUISSE FB REPO 01.210% 6/9/2003 100.0000 -7,000,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 06/09/2003 DD 06/06/03SEC ID: 6/9/2003 99406D814BROKER: CREDIT SUISSE FIRST 6/9/2003 BOSTON CORP, N YOCSF0751l102: LIQUID IS 8ill3111J~SE FB REPO 01.2100/o 6/9/2003 100.0000 0.000 0.00 705.83 0.00 06/09/2003 DD 06/06/03SEC ID: 6/9/2003 99406D814BROKER: CREDIT SUISSE FIRST 6/9/2003 BOSTON CORP, N YOCSF0751l102: LIQUID s f?E#i~ 2 REPO 01.210% 06/09 /2003 6/9/2003 100.0000 -7,000,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 DD 06/06/03SEC ID: 99406E838BROKER: 6/9/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 61912003 LIQUID OPER-PIMCO --------------------------------- 17 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED • OCSGOOOlOOOO 6/ 1/2003 -6/30/2003 Status: FINAL . ------ Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base ·-----·-· IS LEHMAN CAT 2 REPO 01.210% 06/09/2003 6/9/2003 100.0000 0.000 0.00 705.83 0.00 DD 06/06/03SEC ID: 99406E838BROKER: 6/9/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 61912003 LIQUID OPER-PIMCO s LEHMAN CAT 2 REPO 01.220% 06/ 10 /2003 6/10/2003 100.0000 -7 ,000,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 DD 06/09/03SEC ID: 99406F777BROKER: 6/10/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 6 / l0/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.220% 06/ 10/2003 6/10/2003 100.0000 0.000 0.00 237.22 0.00 DD 06/09/03SEC ID: 99406F777BROKER: 6/10/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 6 /l0/2003 LIQUID OPER-PIMCO s CREDIT SUISSE FB REPO 01.220% 6/10/2003 100.0000 -7 ,000 ,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 06/10/2003 DD 06/09/03SEC ID: 6/10/2003 99406F918BROKER: CREDIT SUISSE FIRST 6/10/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS e~B11i'JM&fSsE FB REPO O 1.220% 6/10/2003 100.0000 0.000 0.00 237.22 0.00 06/10/2003 DD 06/09/03SEC ID: 6/10/2003 99406F918BROKER: CREDIT SUISSE FIRST 6/10/2003 BOSTON CORP, N YOCSF0751l102: LIQUID s eHB11i'JM&fSsE FB REPO o 1.200% 6/11/2003 100.0000 -7 ,000,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 06/11/2003 DD 06/10/03SEC ID: 6/11/2003 99406Hl61BROKER: CREDIT SUISSE FIRST 6/11/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS eHB11i'J~sE FB REPO 01.200% 6/11/2003 100.0000 0.000 0.00 233.33 0.00 06/11/2003 DD 06/10/03SEC ID: 6/11/2003 99406Hl61BROKER: CREDIT SUISSE FIRST 6/11/2003 BOSTON CORP, N YOCSF07511102: LIQUID s £\FftKfMS.(T 2 REPO 01.200% 06/ 11 /2003 6/11/2003 100.0000 -7 ,000 ,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 DD 06/10/03SEC ID: 99406H351BROKER: 6/ 11/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 6 / l l/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.200% 06/11/2003 6/11/2003 100.0000 0.000 0.00 233.33 0.00 DD 06/10/03SEC ID: 99406H351BROKER: 6/11/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 61 l l/2003 LIQUID OPER-PIMCO s LEHMAN CAT 2 REPO 01.180% 06/ 12/2003 6/12/2003 100.0000 -6,700,000.000 -6, 700,000.00 6,700,000.00 0.00 DD 06/11/03SEC ID: 99406J480BROKER: 6/12/2003 LEHMAN GOVT SECS INC, NYOCSF075ll102: 6 / 1212003 LIQUID OPER-PIMCO 18 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base ---- IS LEHMAN CAT 2 REPO 01.180% 06/ 12/2003 6/12/2003 100.0000 0.000 0.00 219.61 0.00 DD 06/11/03SEC ID: 99406J480BROKER: 6/12/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 6 / 1212003 LIQUID OPER-PIMCO s CREDIT SUISSE FB REPO 01.190% 6/12/2003 100.0000 -6,700,000.000 -6, 700,000.00 6,700,000.00 0.00 06/12/2003 DD 06/11/03SEC ID: 6/12/2003 99406J605BROKER: CREDIT SUISSE FIRST 6/12/2003 BOSTON CORP, N YOCSF0751l102: LIQUID IS eiiB11i'JM6'fSsE FB REPO 01.190% 6/12/2003 100.0000 0.000 0.00 221.47 0.00 06/12/2003 DD 06/11/03SEC ID: 6/12/2003 99406J605BROKER: CREDIT SUISSE FIRST 6/12/2003 BOSTON CORP, N YOCSF0751l102: LIQUID s Bflif.t~ 2 REPO 01.220% 06/ 13/2003 6/13/2003 100.0000 -7 ,000,000.000 -7,000,000.00 7 ,000 ,000.00 0.00 DD 06/ 12/03SEC ID: 99406Ll54BROKER: 6/ 13/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 6 / 1312003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.220% 06/ 13/2003 6/13/2003 100.0000 0.000 0.00 237.22 0.00 DD 06/ 12/03SEC ID: 99406L154BROKER: 6/ 13/2003 LEHMAN GOV!' SECS INC, NYOCSF07511102: 611312003 LIQUID OPER-PIMCO s CREDIT SUISSE FB REPO 01.210% 6/13/2003 100.0000 -6,400,000.000 -6,400,000.00 6,400,000.00 0.00 06/13/2003 DD 06/12/03SEC ID: 6/13/2003 99406L204BROKER: CREDIT SUISSE FIRST 6/13/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS eiiB1'iJ~SE FB REPO 01.210% 6/13/2003 100.0000 0.000 0.00 215.11 0.00 06/13/2003 DD 06/12/03SEC ID: 6/13/2003 99406L204BROKER: CREDIT SUISSE FIRST 6/13/2003 BOSTON CORP, N YOCSF0751l102: LIQUID s ei§FnJi'J~SE FB REPO 01.200% 6/16/2003 100.0000 -6,700,000.000 -6,700,000.00 6,700,000.00 0.00 06/16/2003 DD 06/13/03SEC ID: 6/16/2003 99406L733BROKER: CREDIT SUISSE FIRST 6/16/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS 8R§61VJ~SE FB REPO 01.20001c> 6/16/2003 100.0000 0.000 0.00 670.00 0.00 06/16/2003 DD 06/13/03SEC ID: 6/16/2003 99406L733BROKER: CREDIT SUISSE FIRST 6/16/2003 BOSTON CORP, N YOCSF07511102: LIQUID s et>~2 REPO 01.200%06/16/2003 6/16/2003 100.0000 -6, 700,000.000 -6, 700,000.00 6,700,000.00 0.00 DD 06/ 13/03SEC ID: 99406M392BROKER: 6/ 16/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 6 / 1612003 LIQUID OPER-PIMCO 19 Workbench OCSD-CONSOUDATBD -OCSGOOOlOOOO Transaction Detail Reportedby Transaction Category 6/1/2003 -6/30/2003 Tran Trade Date Settle Date Reported Date Type Description IS s IS s IS s IS s IS s LEHMAN CAT 2 REPO 01.200% 06/16/2003 6/ 16/2003 DD 06/13/03SEC ID: 99406M392BROKER: 6/16/2003 LEHMAN GOVT SECS INC, NYOCSF075 l l l 02: 6 / 1612003 LIQUID OPER-PIMCO CREDIT SUISSE FB REPO 0 l .2800Ai 6/17/2003 06/ 17 /2003 DD 06/ 16/03SEC ID: 6/17/2003 99406M905BROKER: CREDIT SUISSE FIRST 6/17/2003 BOSTON CORP, N YOCSF0751l102: LIQUID e.UB11fJ~SE FB REPO 01.2800/o 6/17/2003 06/17/2003 DD 06/16/03SEC ID: 6/17/2003 99406M9058ROKER: CREDIT SUISSE FIRST 6/17/2003 BOSTON CORP, N YOCSF07511102: LIQUID 9f~ 2 REPO 01.280%06/17/2003 6/17/2003 DD 06/16/03SEC ID: 99406P015BROKER: 6/17/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 6 / 1712003 LIQUID OPER-PIMCO LEHMAN CAT 2 REPO 01.280% 06/ 17 /2003 6/17/2003 DD 06/16/03SEC ID: 99406P015BROKER: 6/ 17 /2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 611712003 LIQUID OPER-PIMCO CREDIT SUISSE FB REPO 0 l .2200Ai 6/18/2003 06/18/2003 DD 06/17 /03SEC ID: 6/18/2003 99406P437BROKER: CREDIT SUISSE FIRST 6/18/2003 BOSTON CORP, N YOCSF07511102: LIQUID eHB11fJ~sE FB REPO 01.2200/o 6/18/2003 06/18/2003 DD 06/17/03SEC ID: 6/18/2003 99406P437BROKER: CREDIT SUISSE FIRST 6/18/2003 BOSTON CORP, N YOCSF07511102: LIQUID 9f~ 2 REPO 01.220% 06/18/2003 6/18/2003 DD 06/ 17 /03SEC ID: 99406Ql 12BROKER: 6/ 18/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 6 / 1812003 LIQUID OPER-PIMCO LEHMAN CAT 2 REPO 01.220% 06/ 18/2003 6/18/2003 DD 06/ 17 /03SEC ID: 99406Ql 12BROKER: 6/ 18/2003 LEHMAN GOVT SECS INC, NYOCSF075ll102: 6 / 1812003 LIQUID OPER-PIMCO CREDIT SUISSE FB REPO 01.210% 6/19/2003 06/19/2003 DD 06/18/03SEC ID: 6/19/2003 99406Q708BROKER: CREDIT SUISSE FIRST 6/19/2003 BOSTON CORP, N YOCSF0751l102: LIQUID OPER-PIMCO Price Base 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 Shares/Par 0.000 -7 ,000,000.000 0.000 -7 ,000,000.000 0.000 -7,000,000.000 0.000 -7 ,000,000.000 0.000 -7 ,000,000.000 20 Cost Base 0.00 -7 ,000,000.00 0.00 -7 ,000,000.00 0.00 -7 ,000,000.00 0.00 -7 ,000,000.00 0.00 -7,000,000.00 Report m: EWB009 Base Currency: USD Status: FINAL Amount Base 670.00 7,000,000.00 248.89 7,000,000.00 248.89 7 ,000,000.00 237.22 7 ,000,000.00 237.22 7,000,000.00 Net Gain/Loss Base 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Workbencn --- Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-COlVSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date· Base Shares/Par Base Base Base IS CREDIT SUISSE FB REPO 01.210% 6/19/2003 100.0000 0.000 0.00 235.28 0.00 06/19/2003 DD 06/18/03SEC ID: 6/19/2003 99406Q708BROKER: CREDIT SUISSE FIRST 6/19/2003 BOSTON CORP, N YOCSF075l1102: LIQUID s £>l§~2 REPO 01.210%06/19/2003 6/19/2003 100.0000 -7 ,000 ,000.000 -7 ,000,000.00 7 ,000,000.00 0.00 DD 06/18/03SEC ID: 99406R409BROKER: 6/19/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 611912003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.210% 06/19/2003 6/19/2003 100.0000 0.000 0.00 235.28 0.00 DD 06/18/03SEC ID: 99406R409BROKER: 6/19/2003 LEHMAN GOVT SECS INC, NYOCSF075ll102: 6 / 1912003 LIQUID OPER-PIMCO s CREDIT SUISSE FB REPO 01.21 OO!c> 6/20/2003 100.0000 -3,400,000.000 -3,400,000.00 3,400,000.00 0.00 06/20/2003 DD 06/19/03SEC ID: 6/20/2003 99406800 I BROKER: CREDIT SUISSE FIRST 6/20/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS @i§B1¥J~sE FB REPO 01.210% 6/20/2003 100.0000 0.000 0.00 114.28 0.00 06/20/2003 DD 06/19/03SEC ID: 6/20/2003 99406800 !BROKER: CREDIT SUISSE FIRST BOSTON CORP, N YOCSF0751l102: LIQUID 6/20/2003 s BF~Wl'AT 2 REPO 01.210% 06/20 /2003 6/20/2003 100.0000 -6,600,000.000 -6,600,000.00 6,600,000.00 0.00 DD 06/19/03SEC ID: 99406S761BROKER: 6/20/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 612012003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.210% 06/20/2003 6/20/2003 100.0000 0.000 0.00 221.83 0.00 DD 06/19/03SEC ID: 99406S761BROKER: 6/20/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 612012003 LIQUID OPER-PIMCO s LEHMAN CAT 2 REPO 01.140% 06/23/2003 6/23/2003 100.0000 -4,800,000.000 -4,800,000.00 4,800,000.00 0.00 DD 06/20/03SEC ID: 99406U5508ROKER: 6/23/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 612312003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.140% 06/23/2003 6/23/2003 100.0000 0.000 0.00 456.00 0.00 DD 06/20/03SEC ID: 99406USSOBROKER: 6/23/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 612312003 LIQUID OPER-PIMCO s CREDIT SUISSE FB REPO 01.140% 6/23/2003 100.0000 -4,800,000.000 -4,800,000.00 4,800,000.00 0.00 06/23/2003 DD 06/20/03SEC ID: 6/23/2003 99406U675BROKER: CREDIT SUISSE FIRST 6/23/2003 BOSTON CORP, N YOCSF075ll102: LIQUID OPER-PIMCO 21 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSJ).CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IS CREDIT SUISSE FB REPO 01.140% 6/23/2003 100.0000 0.000 0.00 456.00 0.00 06/23/2003 DD 06/20/03SEC ID: 6/23/2003 99406U675BROKER: CREDIT SUISSE FIRST 6/23/2003 BOSTON CORP, N YOCSF07511102: LIQUID s eftB11fl~sE FB REPO o 1.160% 6/24/2003 100.0000 -4,800,000.000 -4,800,000.00 4,800,000.00 0.00 06/24/2003 DD 06/23/03SEC ID: 6/24/2003 99406U840BROKER: CREDIT SUISSE FIRST 6/24/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS eR§J311fl~sE FB REPO O 1.160% 6/24/2003 100.0000 0.000 0.00 154.67 0.00 06/24/2003 DD 06/23/03SEC ID: 6/24/2003 99406U840BROKER: CREDIT SUISSE FIRST 6/24/2003 BOSTON CORP, N YOCSF07511102: LIQUID s BF~2 REPO 01.160%06/24/2003 6/24/2003 100.0000 -4,800,000.000 -4,800,000.00 4,800,000.00 0.00 DD 06/23/03SEC ID: 99406V640BROKER: 6/24/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 612412003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.160% 06/24/2003 6/24/2003 100.0000 0.000 0.00 154.67 0.00 DD 06/23/03SEC ID: 99406V640BROKER: 6/24/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 612412003 LIQUID OPER-PIMCO s LEHMAN CAT 2 REPO 01.070% 06/25/2003 6/25/2003 100.0000 -4,800,000.000 -4,800,000.00 4,800,000.00 0.00 DD 06/24/03SEC ID: 99406W986BROKER: 6/25/2003 LEHMAN GOVT SECS INC, NYOCSF075ll102: 612512003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.070% 06/25/2003 6/25/2003 100.0000 0.000 0.00 142.67 0.00 DD 06/24/03SEC ID: 99406W986BROKER: 6/25/2003 LEHMAN GOVT SECS INC, NYOCSF0751l102: 612512003 LIQUID OPER-PIMCO s CREDIT SUISSE FB REPO 01.050% 6/25/2003 100.0000 -4,800,000.000 -4,800,000.00 4,800,000.00 0.00 06/25/2003 DD 06/24/03SEC ID: 6/25/2003 99406W994BROKER: CREDIT SUISSE FIRST 6/25/2003 BOSTON CORP, N YOCSF075 l l 102: LIQUID IS eRiJ311fl~sE FB REPO 01.050% 6/25/2003 100.0000 0.000 0.00 140.00 0.00 06/25/2003 DD 06/24/03SEC ID: 6/25/2003 99406W994BROKER: CREDIT SUISSE FIRST 6/25/2003 BOSTON CORP, N YOCSF07511102: LIQUID s BF~ 2 REPO 00.890% 06/26/2003 6/26/2003 100.0000 -4 ,800,000.000 -4,800,000.00 4,800,000.00 0.00 DD 06/25/03SEC ID: 99406Y404BROKER: 6/26/2003 LEHMAN GOVT SECS INC, NYOCSF07511102: 612612003 LIQUID OPER-PIMCO 22 Workbencit Transaction Detail Report ID: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOLIDATED -OCS000010000 6/1/2003 -6/30/2003 Status: FINAL ----- Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IS LEHMAN CAT 2 REPO 00.890% 06/26/2003 6/26/2003 100.0000 0.000 0.00 118.67 0.00 DD 06/25/03SEC ID: 99406Y404BROKER: 6/26/2003 LEHMAN GOVT SECS INC, NYOCSF075l1102: 612612003 LIQUID OPER-PIMCO s CREDIT SUISSE FB REPO 00.880% 6/26/2003 100.0000 -4,800,000.000 -4 ,800 ,000.00 4,800,000.00 0.00 06/26/2003 DD 06/25/03SEC ID: 6/26/2003 99406Y602BROKER: CREDIT SUISSE FIRST 6/26/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS e~J311fJ~SE FB REPO 00.880% 6/26/2003 100.0000 0.000 0.00 117.33 0.00 06/26/2003 DD 06/25/03SEC ID: 6/26/2003 99406Y602BROKER: CREDIT SUISSE FIRST 612612003 BOSTON CORP, N YOCSF07511102: LIQUID s 8~~TiIBASURY CASH MGMTSEC ID: 6/2/2003 1.0000 -499,982.180 -499,982.18 499,982.18 0.00 9960852470CSF07522202: LONG TERM 6/2/2003 OPER-PIMCO 6/2/2003 s DREYFUS TREASURY CASH MGMTSEC ID: 6/2/2003 1.0000 -401.000 -401.00 401.00 r 0.00 9960852470CSF07511102: LIQUID OPER-6/2/2003 PIM CO 6/2/2003 s DREYFUS TREASURY CASH MGMTSEC ID: 6/5/2003 1.0000 -498,435.000 -498,435.00 498,435.00 0.00 99608524 70CSF07522202: LONG TERM 6/5/2003 OPER-PIMCO 6/5/2003 s DREYFUS TREASURY CASH MGMTSEC ID: 6/5/2003 1.0000 -45,860.340 -45,860.34 45,860.34 0.00 9960852470CSF0751l102: LIQUID OPER-6/5/2003 PIM CO 6/5/2003 s DREYFUS TREASURY CASH MGMTSEC ID: 6/19/2003 1.0000 -1,697, 191.500 -1,697,191.50 1,697,191.50 0.00 9960852470CSF07522202: LONG TERM 6/19/2003 OPER-PIMCO 6/19/2003 s DREYFUS TREASURY CASH MGMTSEC ID: 6/19/2003 1.0000 -180,994.080 -180,994.08 180,994.08 0.00 99608524 70CSF075 l l l 02: LIQUID OPER-6/19/2003 PIMCO 6/19/2003 s DREYFUS TREASURY CASH MGMTSEC ID: 6/23/2003 1.0000 -62 ,076.370 -62,076.37 62,076.37 0.00 9960852470CSF07522202: LONG TERM 6/23/2003 OPER-PIMCO 6/23/2003 23 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL ----------Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base s DREYFUS TREASURY CASH MGMTSEC ID: 6/25/2003 1.0000 -4,308,698.780 -4,308,698.78 4,308,698. 78 0.00 9960852470CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO 6/25/2003 s DREYFUS TREASURY CASH MGMTSEC ID: 6/30/2003 1.0000 -44.980 -44.98 44.98 0.00 9960852470CSF0751l102: LIQUID OPER-6/30/2003 PIM CO 6/30/2003 s DREYFUS TREASURY CASH MGMTSEC ID: 6/30/2003 1.0000 -3,619,236.310 -3,619,236.31 3,619,236.31 0.00 9960852470CSF07522202: LONG TERM 6/30/2003 OPER-PIMCO 6/30/2003 TOTAL CASH & CASH EQUIVALENTS U.S. DOLLAR: -260,012,920.540 -259,987 ,815.21 260,023,400.11 0.00 TOTAL CASH & CASH EQUIVALENTS BASE: -260,012,920.540 -259,987 ,815.21 260,023,400.11 0.00 FIXED INCOME SECURITIES U.S. DOLLAR s COMMIT TO PUR FNMA SF MTG 5.000% 6/11/2003 103.9258 -2,000,000.000 -2,032,500.00 2,078,515.63 46,015.63 06/01/2018 DD 06/0l/03SEC ID: 6/17 /2003 01F050460BROKER: LEHMAN GOVT SECS 6/11/2003 INC, NYOCSF07522202: LONG TERM OPER- s ~IT TO PUR FNMA SF MTG 5.000% 6/12/2003 103.9219 -3,000,000.000 -3,048, 750.00 3, 117 ,656.25 68,906.25 06/01/2018 DD 06/01/03SEC ID: 6/17/2003 01F050460BROKER: BEAR STEARNS & CO 6/12/2003 INC, NYOCSF07522202: LONG TERM OPER- SC ~IT TO PUR FNMA SF MTG 6.000% 4/9/2003 103.0313 5,000 ,000.000 5,151,562.50 -5, 151,562.50 0.00 06/01/2033 DD 06/01/03SEC ID: 6/12/2003 01F060667BROKER: GOLDMAN SACHS & 6/1/2003 CO, NYOCSF07522202: LONGTERM OPER- s ~IT TO PUR FNMA SF MTG 6.000% 6/3/2003 103.8945 -5,000,000.000 -5,151,562.50 5,194,726.56 43,164.06 06/01/2033 DD 06/01/03SEC ID: 6/12/2003 01F060667BROKER: GOLDMAN SACHS & 6/3/2003 CO, NYOCSF07522202: LONG TERM OPER- s ~IT TO PUR FNMA SF MTG 6.000% 6/25/2003 104.0781 -5,000,000.000 -5,189,062.50 5,203,906.25 14,843.75 07 /01/2033 DD 07 /Ol/03SEC ID: 7/14/2003 01F060675BROKER: GOLDMAN SACHS & 6/25/2003 CO, NYOCSF07522202: LONGTERM OPER- PIM CO 24 Workbencli Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base TOTAL FIXED INCOME SECURITIES U.S. DOLLAR: -10,000,000.000 -10,270,312.50 10,443,242.19 172,929.69 TOTAL FIXED INCOME SECURITIES BASE: -10,000,000.000 -10,270,312.50 10,443,242.19 172,929.69 TOTAL SALES BASE: -270,012,920.540 -270,258, 127. 71 270,466,642.30 172,929.69 PRINCIPAL PAYMENTS FIXED INCOME SECURITIES U.S. DOLLAR PD DISTRIBUTION FINL 99-1 CL A4 5.840% 6/15/2003 100.0000 -50,672.600 -51,733.56 50,672.60 -1,060.96 10/17 /2011 DD 03/18/99SEC ID: 6/15/2003 25475MAD60CSF07522202: LONG TERM 6/15/2003 OPER-PIMCO PD WMP/HUNTOON PAIGE #000-11150 7.500% 6/1/2003 100.0000 -738.040 -722.01 738.04 16.03 12/01/2030 DD 10/21/99SEC ID: 6/1/2003 302998GE30CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FHLMC GROUP #G4-0353 7.500% 6/1/2003 100.0000 -11,944.970 -12,247.33 11,944.97 -302.36 10/01/2004 DD 03/01/99SEC ID: 6/1/2003 3128DBMA20CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PDC FHLMC MULTICLASS MTG SER E3 A VAR RT 5/1/2003 100.0000 42,387.000 42,432.16 -42,387.00 45.16 08/15/2032 DD 12/01/97SEC ID: 5/1/2003 3133TCE950CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FHLMC MULTICLASS MTG SER E3 A VAR RT 6/1/2003 100.0000 -42,391.500 -42,436.66 42,391.50 -45.16 08/15/2032 DD 12/01/97SEC ID: 6/1/2003 3133TCE950CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FHLMC MULTICLASS MTG SER E3 A VAR RT 6/1/2003 100.0000 -36,929.800 -36,969.15 36,929.80 -39.35 08/15/2032 DD 12/01/97SEC ID: 6/1/2003 3133TCE950CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FHLMC MULTICLASS CTF Tl 1 A6 6.5000/c, 6/1/2003 100.0000 -267,341.880 -267,460.58 267,341.88 -118.70 09/25/2018SEC ID: 6/1/2003 3133TDPV20CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO 25 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOLIDATED -OCSGOOOlOOOO 6/ l/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base PD FHLMC GROUP #78-6064 6.384% 6/1/2003 100.0000 -5,445.500 -5,312.77 5,445.50 132.73 01/01/2028 DD 12/01/97SEC ID: 6/1/2003 31348SWZ30CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0323980 6.000% 6/1/2003 100.0000 -22,118.900 -23,093.51 22,118.90 -974.61 04/01/2014 DD 09/01/99SEC ID: 6/1/2003 31374T2MOOCSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0456482 6.000% 6/1/2003 100.0000 -5,544.170 -5,788.46 5,544.17 -244.29 02/01/2014 DD 02/0l/99SEC ID: 6/1/2003 31381CCT20CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0509649 6.000% 6/1/2003 100.0000 -1,963.350 -2,049.86 1,963.35 -86.51 09/01/2014 DD 09/0l/99SEC ID: 6/1/2003 31383QEWOOCSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0535451 6.000% 6/1/2003 100.0000 -17,313.040 -18,075.90 17,313.04 -762.86 06/01/2015 DD 07 /01/00SEC ID: 6/1/2003 31384VZQ80CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0535672 6.000% 6/1/2003 100.0000 -399,912.350 -417 ,533.49 399,912.35 -17,621.14 01/01/2016 DD 12/01/00SEC ID: 6/1/2003 31384WCH10CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0545296 6.000% 6/1/2003 100.0000 -170,607.880 -178,125.29 170,607.88 -7,517.41 11/01/2016 DD 10/01/0lSEC ID: 6/1/2003 31385HXZOOCSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0545580 6.000% 6/1/2003 100.0000 -14,657.980 -15,303.85 14,657.98 -645.87 03/01/2017 DD 03/0l/02SEC ID: 6/1/2003 31385JCR70CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0555101 6.0000A> 6/1/2003 100.0000 -16,563.870 -17,293.72 16,563.87 -729.85 10/01/2017 DD 11/01/02SEC ID: 6/1/2003 31385WU230CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0576386 6.0000A> 6/1/2003 100.0000 -9,296.100 -9,705.71 9,296.10 -409.61 05/01/2016 DD 05/01/0lSEC ID: 6/1/2003 31386XJ720CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO 26 Workbencli. Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOLIDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base PD FNMA POOL #0576739 6.000% 6/1/2003 100.0000 -81,258.670 -84,839.13 81,258.67 -3,580.46 04/01/2016 DD 04/01/0lSEC ID: 6/1/2003 31386XV860CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0580888 6.000% 6/1/2003 100.0000 -24,536.440 -25,617.58 24,536.44 -1,081.14 05/01/2016 DD 05/01/0lSEC ID: 6/1/2003 31387DJ910CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0594002 6.000% 6/1/2003 100.0000 -31,616.610 -33,009.72 31,616.61 -1,393.11 07 /01/2016 DD 07 /01/0lSEC ID: 6/1/2003 31387T3K80CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0597376 6.000% 6/1/2003 100.0000 -20,952.100 -21,875.30 20,952.10 -923.20 09/01/2016 DD 08/01/0lSEC ID: 6/1/2003 31387XT960CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0605259 6.000% 6/1/2003 100.0000 -44,873.160 -46,850.38 44,873.16 -1,977.22 09/01/2016 DD 09/01/0lSEC ID: 6/1/2003 31388HMG10CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0608366 6.000% 6/1/2003 100.0000 -20,662.820 -21,573.28 20,662.82 -910.46 10/01/2016 DD 09/01/0lSEC ID: 6/1/2003 31388LZ780CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0616734 6.000% 6/1/2003 100.0000 -190,841.850 -199,250.82 190,841.85 -8,408.97 12/01/2016 DD 12/01/0lSEC ID: 6/1/2003 31388WEF90CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0630812 6.000% 6/1/2003 100.0000 -6,087.790 -6,356.03 6,087.79 -268.24 02/01/2017 DD 02/0l/02SEC ID: 6/1/2003 31389NYH20CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0632376 6.0000/o 6/1/2003 100.0000 -56, 103.230 -58,575.28 56,103.23 -2,472.05 07 /01/2017 DD 07 /01/02SEC ID: 6/1/2003 31389QQ500CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0653116 6.0000/o 6/1/2003 100.0000 -53,474.620 -55,830.85 53,474.62 -2,356.23 07 /01/2017 DD 07 /Ol/02SEC ID: 6/1/2003 31390QSD80CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO ------------··-------------------------------------------------- 27 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date· Base Shares/Par Base Base Base PD FNMA POOL #0673280 6.000% 6/1/2003 100.0000 -36,568.640 -38,179.95 36,568.64 -1,611.31 08/01/2017 DD ll/Ol/02SEC ID: 6/1/2003 31391P6R20CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0698939 6.000% 6/1/2003 100.0000 -827.390 -863.85 827.39 -36.46 09/01/2017 DD 03/0l/03SEC ID: 6/1/2003 31400VPY20CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD FNMA POOL #0703195 6.000% 6/1/2003 100.0000 -11,464.130 -11,969.27 11,464.13 -505.14 01/01/2017 DD 04/01/03SEC ID: 6/1/2003 31401BGC30CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0569358 6.5000/o 6/1/2003 100.0000 -159,152.900 -162,883.05 159,152.90 -3,730.15 04/15/2032 DD 04/0l/02SEC ID: 6/1/2003 36200QQK30CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0438057 6.0000/o 6/1/2003 100.0000 -48.880 -46.40 48.88 2.48 05/15/2028 DD 05/0l/98SEC ID: 6/1/2003 36207PTN90CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0457814 6.000% 6/1/2003 100.0000 -3,245.570 -3,080.76 3,245.57 164.81 10/15/2028 DD 10/0l/98SEC ID: 6/1/2003 36208QSB30CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0465546 6.000% 6/1/2003 100.0000 -29,935.480 -28,415.32 29,935.48 1,520.16 08/15/2028 DD 08/0l/98SEC ID: 6/1/2003 36209AET30CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0465555 6.000% 6/1/2003 100.0000 -22,891.670 -21,729.20 22,891.67 1,162.47 09/15/2028 DD 09/01/98SEC ID: 6/1/2003 36209AE480CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0467279 6.000% 6/1/2003 100.0000 -5,181.540 -4,918.42 5,181.54 263.12 10/15/2028 DD 10/0l/98SEC ID: 6/1/2003 36209CCQ70CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0467286 6.000% 6/1/2003 100.0000 -79,124.440 -75,106.40 79,124.44 4,018.04 10/15/2028 DD 10/01/98SEC ID: 6/1/2003 36209CCX20CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO 28 Workbench ------- Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOLIDATED -OCSG00010000 6/ 1/2003 -6/30/2003 Status: FINAL ---------- Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base PD GNMA POOL #0468330 6.000% 6/1/2003 100.0000 -49.610 -47.09 49.61 2.52 05/15/2028 DD 05/01/98SEC ID: 6/1/2003 36209DHF40CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0468339 6.000% 6/1/2003 100.0000 -729.910 -692.84 729.91 37.07 08/15/2028 DD 08/0l/98SEC ID: 6/1/2003 36209DHQOOCSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0469688 6.000% 6/1/2003 100.0000 -1,618.170 -1,536.00 1,618.17 82.17 11/15/2028 DD l l/Ol/98SEC ID: 6/1/2003 36209EXR80CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0476041 6.500% 6/1/2003 100.0000 -58,664.680 -61,478.75 58,664.68 -2,814.07 06/15/2028 DD 06/0l/98SEC ID: 6/1/2003 36209MZE70CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0478626 6.500% 6/1/2003 100.0000 -100,042.360 -104,841.27 100,042.36 -4,798.91 01/15/2029 DD Ol/Ol/99SEC ID: 6/1/2003 36209QVT90CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0480598 6.500% 6/1/2003 100.0000 -28,136.300 -29,485.96 28,136.30 -1,349.66 10/15/2028 DD 10/0l/98SEC ID: 6/1/2003 36209S3F60CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0483452 6.000% 6/1/2003 100.0000 -32.820 -31.15 32.82 1.67 09/15/2028 DD 09/01/98SEC ID: 6/1/2003 36209WBV30CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0486720 6.000% 6/1/2003 100.0000 -402.830 -382.37 402.83 20.46 12/15/2028 DD 12/01/98SEC ID: 6/1/2003 36210AVM60CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0491103 6.000% 6/1/2003 100.0000 -9,010.180 -8,552.63 9,010.18 457.55 01/15/2029 DD Ol/Ol/99SEC ID: 6/1/2003 36210FRY40CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0496461 6.000% 6/1/2003 100.0000 -16,203.290 -15,380.47 16,203.29 822.82 01/15/2029 DD Ol/01/99SEC ID: 6/1/2003 36210MQN40CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO 29 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSG00010000 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base PD GNMA POOL #0497343 6.000% 6/1/2003 100.0000 -1,933.490 -1,835.31 1,933.49 98.18 12/ 15/2028 DD 12/0l/98SEC ID: 6/1/2003 36210NP450CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0499153 6.000% 6/1/2003 100.0000 -840.490 -797.81 840.49 42.68 02/15/2029 DD 02/01/99SEC ID: 6/1/2003 36210QQE50CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0500917 6.000% 6/1/2003 100.0000 -18.420 -17.48 18.42 0.94 04/15/2029 DD 04/01/99SEC ID: 6/1/2003 36210SPAOOCSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0503388 6.000% 6/1/2003 100.0000 -25,502.730 -24,207.67 25,502.73 1,295.06 03/15/2029 DD 03/01/99SEC ID: 6/1/2003 36210VF550CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0506636 6.000% 6/ 1/2003 100.0000 -1,885.610 -1,789.86 1,885.61 95.75 04/15/2029 DD 04/0l/99SEC ID: 6/1/2003 36210YY900CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0514326 6.500% 6/1/2003 100.0000 -35,524.650 -37,228.72 35,524.65 -1,704.0~ 07/15/2029 DD 07/01/99SEC ID: 6/1/2003 36211JLF20CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0530290 6.500% 6/1/2003 100.0000 -228,087. 930 -239,029.02 228,087.93 -10,941.09 03/15/2031DD04/01/0lSEC ID: 6/1/2003 36212DC310CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA POOL #0547715 6.SOOOA. 6/1/2003 100.0000 -323.110 -338.61 323.11 -15.50 02/15/2031DD02/01/0lSEC ID: 6/1/2003 36212YN820CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA II POOL #0080023VARRT12/20/20266/1/2003 100.0000 -13,933.860 -14,164.64 13,933.86 -230.78 DD 12/0l/96SEC ID: 6/1/2003 36225CAZ90CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO PD GNMA II POOL #080088M 7 .375% 6/1/2003 100.0000 -31,693.910 -32,387.21 31,693.91 -693.30 06/20/2027 DD 06/0l/97SEC ID: 6/1/2003 36225CC200CSF07522202: LONG TERM 6/1/2003 OPER-PIMCO 30 Workbench OCSD-CONSOUDATBD -OCSGOOOlOOOO Transaction Detail Reportedby Transaction Category 6/1/2003 -6/30/2003 Tran Trade Date Settle Date Reported Date Type Description PD PD PD PD PD GNMA II POOL #0080395 VAR RT 04/20/2030 DD 04/01/00SEC ID: 36225CNM40CSF07522202: LONG TERM OPER-PIMCO GNMA II POOL #080408X 6.500% 05/20/2030 DD 05/01/00SEC ID: 36225CN280CSF07522202: LONG TERM OPER-PIMCO GNMA GTD REMIC TR 2000-9 FH VAR RT 02/16/2030SEC ID: 3837H4NX90CSF07522202: WNG TERM OPER-PIMCO 6/1/2003 6/1/2003 6/1/2003 6/1/2003 6/1/2003 6/1/2003 6/16/2003 6/16/2003 6/16/2003 GREYSTONE SVCG CORP FHA #95-7 7.4300A> 6/ 1/2003 06/01/2023 DD 02/29/00SEC ID: 6/ 1/2003 39810#AE40CSF07522202: LONG TERM 6 /l/2003 OPER-PIMCO US TREASURY INFLATION INDEX NT 3.375% 1/15/2003 01/15/2007 DD 01/15/97SEC ID: 1/15/2003 9128272M30CSF07522202: LONG TERM 6/l/2003 OPER-PIMCO TOTAL FIXED INCOME SECURITIES U.S. DOLLAR: TOTAL FIXED INCOME SECURITIES BASE: TOTAL PRINCIPAL PAYMENTS BASE: MATURITIES CASH & CASH EQUIVALENTS U.S. DOLLAR MT DU PONT DE NEMOUR DISC 06/ 1l/2003SEC6/ 11/2003 MT ID: 26354BTB80CSF07511102: LIQUID 6/ 11/2003 OPER-PIMCO 6/11/2003 FEDERAL HOME LN BKS CONS DISC MAT 06I17 /2003SEC ID: 313384GZ60CSF07511102: LIQUID OPER- PIMCO 6/17/2003 6/17/2003 6/17/2003 Price Base 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000 Shares/Par -20,937.220 -173,327.130 -39,793.400 -791,992.460 -30,940.000 -3,521,527.420 -3,521,527 .420 -3,521,527.420 -600,000.000 -400,000.000 31 Cost Base -20,747.48 -171,566.78 -39,793.40 -780,421.95 -27,263.17 -3,576,408.32 -3,576,408.32 -3,576,408.32 -599,817.00 -399,986.78 Report m: EWB009 Base Currency: USD Status: FINAL Amount Base Net Gain/Loss Base 20,937.22 189.74 173,327.13 1,760.35 39,793.40 0.00 791,992.46 11,570.51 30,940.00 3,676.83 3,521,527.42 -54,880.90 3,521,527.42 -54,880.90 3,521,527.42 -54,880.90 599,817.00 0.00 399,986.78 0.00 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date· Base Shares/Par Base Base Base MT FEDERAL HOME LN BK CONS DISC N MAT 6/18/2003 100.0000 -215.000.000 -214.805.81 214,805.81 0.00 06/18/2003SECID: 6/18/2003 313384HAOOCSF0751l102: LIQUID OPER-6/18/2003 PIM CO MT FEDERAL NATL MTG ASSN DISCOUNT MAT 6/3/2003 100.0000 -500,000.000 -499.982.22 499,982.22 0.00 06/03/2003SECID: 6/3/2003 313588GK50CSF07522202: LONG TERM 6/3/2003 OPER-PIMCO MT FEDERAL NATL MTG ASSN DISC NTS MAT 6/25/2003 100.0000 -1,900,000.000 -1,894,34 7 .50 1,894,347.50 0.00 06/25/2003SECID: 6/25/2003 313588HH10CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO MT MERCK & CO INC DISC 06/20/2003SEC ID: 6/20/2003 100.0000 -200,000.000 -199,986.45 199,986.45 0.00 58933STL20CSF0751l102: LIQUID OPER-6/20/2003 PIM CO 6/20/2003 TOTAL CASH & CASH EQUIVALENTS U.S. DOLLAR: -3,815,000.000 -3,808,925. 76 3,808,925. 76 0.00 TOTAL CASH & CASH EQUIVALENTS BASE: -3,815,000.000 -3,808,925. 76 3,808,925. 76 0.00 FIXED INCOME SECURITIES U.S. DOLLAR MT BANKAMERICA CORP SUB NT 6.875% 6/1/2003 100.0000 -324,000.000 -336,312.00 324,000.00 -12,312.00 06/01/2003 DD 06/0l/93SEC ID: 6/1/2003 066050BZ70CSF0751l102: LIQUID OPER-6/1/2003 PIM CO MT FEDERAL HOME LN MTG CORP DEBS 6/15/2003 100.0000 -1,000,000.000 -1,018,200.00 1,000,000.00 -18,200.00 4.500% 06/15/2003 DD 06/15/0lSEC ID: 6/15/2003 3134A4FF60CSF07511102: LIQUID OPER-6/15/2003 PIM CO MT GENERAL ELEC MTN #TR 00454 7 .500% 6/5/2003 100.0000 -533,000.000 -544,976.51 533,000.00 -11,976.51 06/05/2003 DD 06/05/00SEC ID: 6/5/2003 36962GUXOOCSF0751l102: LIQUID OPER-6/5/2003 PIM CO MT WAL MART STORES INC 6.500% 6/1/2003 100.0000 -425,000.000 -432,730.75 425,000.00 -7,730.75 06/01/2003SEC ID: 6/1/2003 931142AQ60CSF0751l102: LIQUID OPER-6/1/2003 PIM CO ------· 32 WorkbencJi' OCSD-CONSOLIDATBD -OCSGOOOlOOOO Transaction Detail Reportedby Transaction Category 6/1/2003 -6/30/2003 Tran Trade Date Settle Date Reported Date Type Description TOTAL FIXED INCOME SECURITIES U.S. DOLLAR: TOTAL FIXED INCOME SECURITIES BASE: TOTAL MATURITIES BASE: CORPORATE ACTIONS FIXED INCOME SECURITIES U.S. DOLLAR CAL PREMIER AUTO TR 99-3 CL A-4 6.430% 03/08/2004 DD 06/21/99SEC ID: 74046RFW60CSF07522202: LONG TERM OPER-PIMCO INTEREST CASH & CASH EQUIVALENTS U.S. DOLLAR 6/9/2003 6/9/2003 6/9/2003 IT DU PONT DE NEMOUR DISC 06/ 11/2003SEC 6/ 11/2003 IT IT IT IT ID: 26354BTB80CSF07511102: LIQUID 6/11/2003 OPER-PIMCO 6/11/2003 FEDERAL HOME LN BKS CONS DISC MAT 06/ 17 /2003SEC ID: 313384GZ60CSF07511102: LIQUID OPER- PIMCO FEDERAL HOME LN BK CONS DISC N MAT 06/18/2003SEC ID: 313384HAOOCSF07511102: LIQUID OPER- PIMCO 6/17/2003 6/17/2003 6/17/2003 6/18/2003 6/18/2003 6/18/2003 FEDERAL NATL MTG ASSN DISCOUNT MAT 6/3/2003 06/03/2003SEC ID: 6/3/2003 313588GK50CSF07522202: LONG TERM OPER-PIMCO 6/3/2003 FEDERAL NATL MTG ASSN DISC NTS MAT 06/25/2003SEC ID: 313588HH10CSF07522202: LONG TERM OPER-PIMCO 6/25/2003 6/25/2003 6/25/2003 Price Base 100.0000 Shares/Par -2,282,000.000 -2,282,000.000 -6,097 ,000.000 -87 ,356.030 600,000.000 0.000 215,000.000 500,000.000 1,900,000.000 33 Cost Base -2,332,219.26 -2,332,219.26 -6,141,145.02 -89,785.62 183.00 13.22 194.19 17.78 5,652.50 Report ID: EWB009 Base Currency: USD Status: FINAL Amount Base 2,282,000.00 2,282,000.00 6,090,925. 76 87,356.03 183.00 13.22 194.19 17.78 5,652.50 Net Gain/Loss Base -50,219.26 -50,219.26 -50,219.26 -2,429.59 0.00 0.00 0.00 0.00 0.00 Workbench OCSD-CONSOUDATED -OCSGOOOlOOOO Transaction Detail Reportedby Transaction Category 6/1/2003 .. 6/30/2003 Tran Trade Date Settle Date Reported Date· Type Description IT cw CD IT IT IT MERCK & CO INC DISC 06/20/2003SEC ID: 58933STL20CSF07511102: LIQUID OPER- PIMCO SHORT TERM FDS INT ADJ NET OF OVERNIGHT INTERESTSEC ID: 990000PJ40CSF07511102: LIQUID OPER- PIMCO SHORT TERM FDS INT ADJ NET OF OVERNIGHT INTERESTSEC ID: 990000PJ40CSF07522202: LONG TERM OPER-PIMCO DREYFUS TREASURY CASH MGMTSEC ID: 9960852470CSF07522202: LONG TERM OPER-PIMCO 6/20/2003 6/20/2003 6/20/2003 6/30/2003 6/30/2003 6/30/2003 6/30/2003 6/30/2003 6/30/2003 6/3/2003 6/1/2003 6/3/2003 DREYFUS TREASURY CASH MGMTSEC ID: 6/3/2003 9960852470CSF07511102: LIQUID OPER-6/ 1/2003 PIMCO 6/3/2003 BSDT-LATE MONEY DEPOSIT ACCTSEC ID: 6/2/2003 9960870940CSF07522202: LONG TERM 6/1 /2003 OPER-PIMCO 6/2/2003 TOTAL CASH & CASH EQUIVALENTS U.S. DOLLAR: TOTAL CASH & CASH EQUIVALENTS BASE: FIXED INCOME SECURITIES U.S. DOLLAR IT IT BANKAMERICA CORP SUB NT 6.875% 06/01/2003 DD 06/01/93SEC ID: 0660508Z70CSF07511102: LIQUID OPER- PIMCO 6/2/2003 6/1/2003 6/2/2003 COLGATE PALMOLIVE MTN TR 00058 5.2700Ai 6/2/2003 12/01/2003 DD 11/24/98SEC ID: 6/ 1/2003 19416QCK40CSF07511102: LIQUID OPER-61212003 PIM CO Price Base Shares/Par 200,000.000 0.000 0.000 0.000 0.000 0.000 3,416,000.000 3,415,000.000 324,000.000 300,000.000 34 Cost Base 13.55 -44.98 16.64 559.14 1,020.23 0.04 7,625.31 7,625.31 11,137.50 7,905.00 Report ID: EWB009 Base Currency: USD Status: FINAL Amount Base 13.55 -44.98 16.64 559.14 1,020.23 0.04 7,625.31 7,625.31 11,137.50 7,905.00 Net Gain/Loss Base 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Workbench --------- Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base ----- IT COUNTRYWIDE HOME LNS INC NT 6.850% 6/16/2003 2,500,000.000 85,625.00 85,625.00 0.00 06/15/2004 DD 06/24/99SEC ID: 6/15/2003 22237UAB80CSF07522202: WNO TERM OPER-PIMCO 6/16/2003 IT DISTRIBUTION FINL 99-1 CL A4 5.840% 6/16/2003 50,672.600 420.69 420.69 0.00 10/ l 7 /2011 DD 03/ 18/99SEC ID: 6/15/2003 25475MAD60CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT WMP/HUNTOON PAIGE #000-11150 7.500% 6/4/2003 732.920 5,949.55 5,949.55 0.00 12/01/2030 DD 10/21/99SEC ID: 5/1/2003 302998GE30CSF07522202: LONG TERM 6/4/2003 OPER-PIMCO IT FHLMC GROUP #04-0353 7.500% 6/16/2003 11,944.970 992.37 992.37 0.00 10/01/2004 DD 03/0l/99SEC ID: 6/1/2003 3128DBMA20CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT FHLMC MULTIClASS MTG SER E3 A VAR RT 6/16/2003 42,391.500 4,861.31 4,861.31 0.00 08/ 15/2032 DD 12/0l/97SEC ID: 5/1/2003 3133TCE950CSF07522202: LONG TERM OPER-PIMCO 6/16/2003 IT FHLMC MULTIClASS MTG SER E3 A VAR RT 6/16/2003 4.500 4.50 4.50 0.00 08/15/2032 DD 12/0l/97SEC ID: 5/1/2003 3133TCE950CSF07522202: WNO TERM 6/16/2003 OPER-PIMCO IT FHLMC MULTICLASS CTFTll A6 6.500% 6/25/2003 267 ,341.880 4,944.65 4,944.65 0.00 09/25/2018SEC ID: 6/1/2003 3133TDPV20CSF07522202: WNO TERM 6/25/2003 OPER-PIMCO IT FHLMC MULTICLASS CTF SER 1620Z 6.000% 6/ 17 /2003 14,567.520 14,567.52 14,567.52 0.00 11/15/2023 DD 11/01/93SEC ID: 6/1/2003 3133T17A40CSF07522202: LONG TERM 6/17/2003 OPER-PIMCO IT FEDERAL HOME LN MTG CORP DEBS 6/16/2003 1,000,000.000 22,500.00 22,500.00 0.00 4.500% 06/15/2003 DD 06/15/0lSEC ID: 6/15/2003 3134A4FF60CSF07511102: LIQUID OPER-6/16/2003 PIM CO IT FHLMC GROUP #78-6064 6.384% 6/16/2003 3,397.450 324.97 324.97 0.00 01/01/2028 DD 12/01/97SEC ID: 5/1/2003 31348SWZ30CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO -----··----------- 35 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL -·------·-Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base --·--· IT FEDERAL NATL MTG ASSN DEBS 5.250% 6/16/2003 11,350,000.000 297,937.50 297,937.50 0.00 06/ 15/2006 DD 06/22/0lSEC ID: 6/15/2003 31359MJX20CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT FNMA POOL #0323980 6.000% 6/25/2003 22,118.900 1,681.29 1,681.29 0.00 04/01/2014 DD 09/0l/99SEC ID: 6/1/2003 31374T2MOOCSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0456482 6.000% 6/25/2003 5,544.170 608.82 608.82 0.00 02/01/2014 DD 02/0l/99SEC ID: 6/1/2003 31381CCT20CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0509649 6.000% 6/25/2003 1,963.350 1,614.52 1,614.52 0.00 09/01/2014 DD 09/01/99SEC ID: 6/1/2003 31383QEWOOCSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0535451 6.000% 6/25/2003 17,313.040 1,352.39 1,352.39 0.00 06/01/2015 DD 07 /01/00SEC ID: 6/1/2003 31384VZQ80CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0535672 6.000% 6/25/2003 399,912.350 30,000.01 30,000.01 0.00 01/01/2016 DD 12/01/00SEC ID: 6/1/2003 31384WCH 10CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0545296 6.000% 6/25/2003 170,607.880 10,683.45 10,683.45 0.00 11/01/2016 DD 10/01/0lSEC ID: 6/1/2003 31385HXZOOCSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0545580 6.000% 6/25/2003 14,657.980 884.27 884.27 0.00 03/01/2017 DD 03/0l/02SEC ID: 6/1/2003 31385JCR70CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0555101 6.000% 6/25/2003 16,563.870 1,427.82 1,427.82 0.00 10/01/2017 DD 11/01/02SEC ID: 6/1/2003 31385WU230CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0576386 6.000% 6/25/2003 9,296.100 547.57 547.57 0.00 05/01/2016 DD 05/01/0lSEC ID: 6/1/2003 31386XJ720CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO -- 36 *orkbencli OCSD-CO.NSOUDATED -OCSGOOOlOOOO Transaction Detail Reportedby Transaction Category 6/1/2003 -6/30/2003 Tran Type Description Trade Date Settle Date Reported Date Price Base Shares/Par IT IT IT IT IT IT IT IT IT IT FNMA POOL #0576739 6.000% 04/01/2016 DD 04/01/0lSEC ID: 31386XV860CSF07522202: LONG TERM OPER-PIMCO FNMA POOL #0580888 6.000% 05/01/2016 DD 05/01/0lSEC ID: 31387DJ910CSF07522202: LONG TERM OPER-PIMCO FNMA POOL #0594002 6.000% 07 /01/2016 DD 07 /01/0lSEC ID: 31387T3K80CSF07522202: LONG TERM OPER-PIMCO FNMA POOL #0597376 6.000% 09/01/2016 DD 08/01/0lSEC ID: 31387XT960CSF07522202: LONG TERM OPER-PIMCO FNMA POOL #0605259 6.000% 09/01/2016 DD 09/01/0lSEC ID: 31388HMG 1 OCSF07522202: LONG TERM OPER-PIMCO FNMA POOL #0608366 6.000% 10/01/2016 DD 09/01/0lSEC ID: 31388LZ780CSF07522202: LONG TERM OPER-PIMCO FNMA POOL#0616734 6.000% 12/01/2016 DD 12/01/0lSEC ID: 31388WEF90CSF07522202: LONG TERM OPER-PIMCO FNMA POOL #0630812 6.000% 02/01/2017 DD 02/01/02SEC ID: 31389NYH20CSF07522202: LONG TERM OPER-PIMCO FNMA POOL #0632376 6.000% 07/01/2017 DD 07/01/02SEC ID: 31389QQSOOCSF07522202: LONG TERM OPER-PIMCO FNMA POOL #0653116 6.000% 07 /01/2017 DD 07 /01/02SEC ID: 31390QSD80CSF07522202: LONG TERM OPER-PIMCO 6/25/2003 6/1/2003 6/25/2003 6/25/2003 6/1/2003 6/25/2003 6/25/2003 6/ 1/2003 6/25/2003 6/25/2003 6/1/2003 6/25/2003 6/25/2003 6/1/2003 6/25/2003 6/25/2003 6/1/2003 6/25/2003 6/25/2003 6/1/2003 6/25/2003 6/25/2003 6/1/2003 6/25/2003 6/25/2003 6/1/2003 6/25/2003 6/25/2003 6/1/2003 6/25/2003 37 81,258.670 24,536.440 31,616.610 20,952.100 44,873.160 20,662.820 190,841.850 6,087.790 56,103.230 53,474.620 Cost Base 1,890.51 1,764.85 1,406.65 1,561.05 1,647.34 1,058.10 1,828.00 1,757.15 6,327.29 3,836.14 Report m: EWB009 Base Currency: USD Status: FINAL Amount Base Net Gain/Loss Base 1,890.51 0.00 1,764.85 0.00 1,406.65 0.00 1,561.05 0.00 1,647.34 0.00 1,058.10 0.00 1,828.00 0.00 1,757.15 0.00 6,327.29 0.00 3,836.14 0.00 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATBD -OCSGOOOlOOOO 6/1/2003 -6/30/2003 Status: FINAL -Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT FNMA POOL #0673280 6.000% 6/25/2003 36,568.640 1,737.64 1,737.64 0.00 08/01/2017 DD 11/0l/02SEC ID: 6/1/2003 31391P6R20CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0698939 6.000% 6/25/2003 827.390 703.74 703.74 0.00 09/01/2017 DD 03/0l/03SEC ID: 6/1/2003 31400VPY20CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT FNMA POOL #0703195 6.000% 6/25/2003 11,464.130 682.89 682.89 0.00 01/01/2017 DD 04/0l/03SEC ID: 6/1/2003 31401BGC30CSF07522202: LONG TERM 6/25/2003 OPER-PIMCO IT GNMA POOL #0569358 6.500% 6/16/2003 159,152.900 11,859.58 11,859.58 0.00 04/15/2032 DD 04/01/02SEC ID: 6/1/2003 36200QQK30CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0438057 6.0000/o 6/16/2003 48.880 181.50 181.50 0.00 05/15/2028 DD 05/01/98SEC ID: 6/1/2003 36207PTN90CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0457814 6.000% 6/16/2003 3,245.570 285.71 285.71 0.00 10/15/2028 DD 10/01/98SEC ID: 6/1/2003 36208QSB30CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0465546 6.0000/o 6/16/2003 29,935.480 3,506.72 3,506.72 0.00 08/15/2028 DD 08/0l/98SEC ID: 6/1/2003 36209AET30CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0465555 6.000% 6/16/2003 22,891.670 3,595.59 3,595.59 0.00 09/15/2028 DD 09/01/98SEC ID: 6/1/2003 36209AE480CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0467279 6.0000/o 6/16/2003 5,181.540 152.22 152.22 0.00 10/15/2028 DD 10/0l/98SEC ID: 6/1/2003 36209CCQ70CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0467286 6.0000/o 6/16/2003 79,124.440 2,880.45 2,880.45 0.00 10/15/2028 DD 10/01/98SEC ID: 6/1/2003 36209CCX20CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO 38 li'orkbenc1i Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOLIDATED -OCSG00010000 6/1/2003 -6/30/2003 Status: FINAL -·----- Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT GNMA POOL #0468330 6.000% 6/16/2003 49.610 147.73 147.73 0.00 05/15/2028 DD 05/0l/98SEC ID: 6/1/2003 36209DHF40CSF07522202: LONG TERM OPER-PIMCO 6/16/2003 IT GNMA POOL #0468339 6.000% 6/16/2003 729.910 2,417.31 2,417.31 0.00 08/15/2028 DD 08/01/98SEC ID: 6/1/2003 36209DHQOOCSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0469688 6.000% 6/16/2003 1,618.170 125.01 125.01 0.00 11/15/2028 DD ll/01/98SEC ID: 6/1/2003 36209EXR80CSF07522202: LONG TERM OPER-PIMCO 6/16/2003 IT GNMA POOL #0476041 6.500% 6/16/2003 58,664.680 1,942.32 1,942.32 0.00 06/15/2028 DD 06/01/98SEC ID: 6/1/2003 36209MZE70CSF07522202: LONG TERM OPER-PIMCO 6/16/2003 IT GNMA POOL #0478626 6.500% 6/16/2003 100,042.360 1,911.73 1,911.73 0.00 01/15/2029 DD Ol/01/99SEC ID: 6/1/2003 36209QVT90CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0480598 6.500% 6/16/2003 28,136.300 1,908.70 1,908.70 0.00 10/15/2028 DD 10/0l/98SEC ID: 6/1/2003 36209S3F60CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0483452 6.000% 6/16/2003 32.820 113.24 113.24 0.00 09/15/2028 DD 09/0l/98SEC ID: 6/1/2003 36209WBV30CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0486720 6.000% 6/16/2003 402.830 79.12 79.12 0.00 12/15/2028 DD 12/01/98SEC ID: 6/1/2003 36210AVM60CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0491103 6.000% 6/16/2003 9,010.180 822.30 822.30 0.00 01/15/2029 DD Ol/01/99SEC ID: 6/1/2003 36210FRY40CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0496461 6.000% 6/16/2003 16,203.290 3,037.51 3,037.51 0.00 01/15/2029 DD 01/01/99SEC ID: 6/1/2003 36210MQN40CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO ~~~~~~~-~-·~~~~--~~~~--~~~~~~~~~--~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 39 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATED -OCSG00010000 6/1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT GNMA POOL #0497343 6.000% 6/16/2003 1,933.490 161.34 161.34 0.00 12/ 15/2028 DD 12/01/98SEC ID: 6/1/2003 36210NP450CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0499153 6.000% 6/16/2003 840.490 90.86 90.86 0.00 02/15/2029 DD 02/0l/99SEC ID: 6/1/2003 36210QQE50CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0500917 6.000% 6/16/2003 18.420 65.79 65.79 0.00 04/15/2029 DD 04/01/99SEC ID: 6/1/2003 36210SPAOOCSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0503388 6.000% 6/16/2003 25,502.730 2,527.81 2,527.81 0.00 03/15/2029 DD 03/01/99SEC ID: 6/1/2003 36210VF550CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0506636 6.000% 6/16/2003 1,885.610 244.37 244.37 0.00 04/15/2029 DD 04/01/99SEC ID: 6/1/2003 36210YY900CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0514326 6.5000/o 6/16/2003 35,524.650 1,893.37 1,893.37 0.00 07 /15/2029 DD 07 /01/99SEC ID: 6/ 1/2003 36211JLF20CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0530290 6.5000/o 6/16/2003 228,087. 930 1,611.47 1,611.47 0.00 03/15/2031DD04/01/0lSEC ID: 6/1/2003 36212DC310CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA POOL #0547715 6.500% 6/16/2003 323.110 1,565.54 1,565.54 0.00 02/15/2031DD02/01/0lSEC ID: 6/1/2003 36212YN820CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT GNMA II POOL #0080023 VAR RT 12/20/20266/20/2003 13,933.860 1,494.18 1,494.18 0.00 DD 12/01/96SEC ID: 6/1/2003 36225CAZ90CSF07522202: LONG TERM 6/20/2003 OPER-PIMCO IT GNMA II POOL #080088M 7 .375% 6/20/2003 31,693.910 2,048.59 2,048.59 0.00 06/20/2027 DD 06/01/97SEC ID: 6/1/2003 36225CC200CSF07522202: LONG TERM 6/20/2003 OPER-PIMCO 40 Workbench Transaction Detail Report m: EWB009 Reportedby Transaction Category Base Currency: USD OCSD-CONSOUDATBD -OCSG00010000 6/ 1/2003 -6/30/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT GNMA II POOL #0080395 VAR RT 6/20/2003 20,937.220 1,414.11 1,414.11 0.00 04/20/2030 DD 04/01/00SEC ID: 6/1/2003 36225CNM40CSF07522202: LONG TERM 6/20/2003 OPER-PIMCO IT GNMA II POOL #080408X 6.500% 6/20/2003 173,327.130 12,728.87 12,728.87 0.00 05/20/2030 DD 05/01/00SEC ID: 6/1/2003 36225CN280CSF07522202: LONG TERM 6/20/2003 OPER-PIMCO IT GENERAL ELEC MTN #TR 00454 7.500% 6/5/2003 533,000.000 19,987.50 19,987.50 0.00 06/05/2003 DD 06/05/00SEC ID: 6/5/2003 36962GUXOOCSF07511102: LIQUID OPER-6/5/2003 PIM CO IT GNMA GTD REMIC TR 2000-9 FH VAR RT 6/18/2003 39,793.400 1,488.28 1,488.28 0.00 02/16/2030SEC ID: 6/16/2003 3837H4NX90CSF07522202: LONG TERM 6/18/2003 OPER-PIMCO IT GREYSTONE SVCG CORP FHA #95-7 7.4300Ai 6/30/2003 791,992.460 14,373.90 14,373.90 0.00 06/01/2023 DD 02/29/00SEC ID: 6/1/2003 39810#AE40CSF07522202: LONG TERM 6/30/2003 OPER-PIMCO IT MARSH & MCLENNAN COS INC SR NT 6/16/2003 2,000 ,000.000 66,250.00 66,250.00 0.00 6.625% 06/15/2004 DD 06/14/99SEC ID: 6/15/2003 571748AB80CSF07522202: LONG TERM 6/16/2003 OPER-PIMCO IT PAINE WEBBER GROUP INC NTS 6.450% 6/2/2003 500,000.000 16,125.00 16,125.00 0.00 12/01/2003 DD 12/01/98SEC ID: 6/1/2003 695629CE30CSF07511102: LIQUID OPER-6/2/2003 PIM CO IT PREMIER AUTO TR 99-3 CL A-4 6.430% 6/9/2003 500,000.000 468.08 468.08 0.00 03/08/2004 DD 06/21/99SEC ID: 6/8/2003 74046RFW60CSF07522202: LONG TERM 6/9/2003 OPER-PIMCO cw US TREASURY INFLATION INDEX NT 3.375% 6/30/2003 0.000 -30,940.00 -30,940.00 0.00 01/15/2007 DD 01/15/97SEC ID: 9128272M30CSF07522202: LONG TERM 6/30/2003 OPER-PIMCO IT WAL MART STORES INC 6.500% 6/2/2003 425,000.000 13,812.50 13,812.50 0.00 06/01/2003SEC ID: 6/1/2003 93 l l 42AQ60CSF0751ll02: LIQUID OPER-6/2/2003 PIMCO 41 Workbench OCSD-CONSOUDATED -OCSGOOOlOOOO Tran Type Description Transaction Detail Reported by Transaction Category 6/1/2003 -6/30/2003 Trade Date Settle Date Reported Date Price Base Shares/Par TOTAL FIXED INCOME SECURITIES U.S. DOLLAR: 22,940,563.470 TOTAL FIXED INCOME SECURITIES BASE: 22, 940,563.470 TOTAL INTEREST BASE: 26,355,563.470 Cost Base 694,550.35 694,550.35 702,175.66 TOTAL TRANSACTIONS: 24,608,642.440 -5,806, 778.48 42 Report m: EWB009 Base Currency: USD Status: FINAL Amount Net Gain/Loss Base Base 694,550.35 o.oo 694,550.35 0.00 702,175.66 0.00 -3, 113,882. 78 65,399.94 I. ~ .. .. • FAHR COMMITTEE AGENDA REPORT orange County Sanitation District FROM: Gary G. Streed, Director of Finance Originator: Michael D. White , Controller Meeting Date 7/9/0 3 Item Nu mber FAHR03-62 SUBJECT: FY 2003-04 Excess Workers ' Compensation and General Liability Insurance Renewals GENERAL MANAGER'S RECOMMENDATION To Bd . of Di r. 7/23/03 Ite m Numbe r 14(c) FY 2003/04 Excess Workers' Compensation and General Liability Insurance Renewals SUMMARY Final quotations for Excess Workers' Compensation Insurance and Excess General Liability Insurance were not available as of the June Finance , Administration , and Human Resources (FAHR) Committee . Staff was given broad direction in securing these insurance renewals for the insurance policies that expired as of June 30 , 2003 . This report summarizes the action taken by staff in securing these insurance renewals for FY 2003-04. PR IOR COMMITTEE/BOARD ACTIONS At the June 25, 2003 Board Meeting , the Board of Directors d irected staff to: (1 ) apply for membership w ithin the Cal ifornia Publ ic Ent ity Insurance Authority and approved the District's Excess Workers' Compensation Insurance, with limits of $50 million , a self-insured retention of $500,000 , for the period July 1, 2003 through June 30 , 2004, in an amount not to exceed $168,720 . (2) to secure $25 million of comprehensive coverage for municipal liability, bodily injury and property damage, and personal injury, with a self-insured deductible of $250 ,000 pe r occ urrence in an amount not to exceed $4 50 ,000 . PROJECT/CONTRACT COST SUMMARY Insu rance premiums for FY 2003 -04 covering the District's entire insurance program , including Excess Workers' Compensation , Excess General Liability, Property, Boile r and Mach inery, Fait hfu l Performance , T ravel and Accident, total $1 ,368,972 . BUDGET IMPACT [8J This item has been budgeted . (Lin e item : ) D This ite m has been budgeted , but there are insufficient f unds. D This item has not been budgeted. D Not applicable (information item ) G:\wp.dtalagenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(c).Excess Workers Comp.doc Re vi sed: 06/04/03 Page 1 ADDITIONAL INFORMATION Excess Workers' Compensation Program The e xcess w orke rs ' compensation insurance marketplace had continued to harden with increased renewal rates and self-insurance retention requirements. The District's current insurance pro vider, ERC , voluntarily withdrew from the market place , as did a number of carriers . Driver Alliant , the District's broker of record , received only two proposals , from Midwest Employers Casualty Company (Mid west) and American International Group (AIG), out of the ten solicited carriers within the workers' compensation insurance marketplace applicable to the District. In addition , Drive r Alliant received a proposal from the California Pub lic Entity Insurance Authority (CPEIA), a joint powers authority that shares assessments, divi dends, and premium surcharges based on actual results of any one policy year. Following is a summary of the proposa ls: ERC Current Midwest AIG CPEIA Policy Proposal Proposal Proposal Best's Guide Rating A++ A A++ N/A , A to A+ Standard & Poor's AA+ A+ AAA N/ A , N/R to AA- Limits $25 mil. $10 mil. $25 mil. $50 mil. Seit-Insured Retention $500 ,000 $1 mil. $1 mil. $500 ,000 Premium $69 ,090 $248 ,851 $271 ,767 $160,686* ·T he actual estimate provided by CP EI A is $160,686. The not to exceed amount has been determined to be five percent greater, or $168,720. Some additional risk is associated with the CPEIA joint powers autho rity in that a premium surcharge can be assessed to individual members based on an unusually la rge number of losses occurring outsid e of the actuarial evaluation estimates. How ever, only once has an actual surcharge ever been made to the County Supervisors Association of California (CSAC), the parent org anization to CPEIA that has been in ex istence fo r over 20 years . The premium surcharge was assessed following the first year of CSAC's existence and prior to the use of an actuary for the determination of rates and assumptions . Rates have been based on actuarial evaluations ever since the shortfall in the first year. CPEIA itse lf has only been in existence for two years and has never initiated a pre m ium surcharge . As directed by the Board of Directors , staff has applied for membership within the California Publ ic Entity Insurance Authority for District's Excess Workers' Compensation Insurance, with limits of $50 million , a self-insured retention of $500,000 , for the period July 1 , 2003 through June 30 , 2004, in an amount not to exceed $168 ,720. G:lwp.dta\ngenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(c).Excess Workers Comp.doc Revi se d: 06/04103 Page2 .. Excess General Liability Program The continued turmoil in the liability insurance markets since September 11, 2001 had created underwriting bottlenecks where no coverage quotations are being processed in a timely fashion. In FY 2003-04, the program's insurer, American Re through their Great Lakes U.K. insurance carrier, decided it would no longer provide coverages to public agencies across the country for its "Basic" insurance, or first layer coverage. The CAMEL program replaced American Re for renewal of the "Basic" $10 million program with American International Group (AIG), calling for a premium increase to $265,441, or 99.6 percent over the prior year amount of $133,016. In addition, self-insured retention increased from $100,000 to $250,000. However, terrorism coverage has been added with the same coverage and limits. Unlike American Re, AIG is an admitted carrier within the State of California. AIG has the same A++ Best Guide Rating as American Re, but also has a Standard and Poor's rating of AAA whereas American Re was unrated. The second $15 million layer excess of $1 O million of the total $25 million Excess Liability Insurance Coverage was provided through Gulf Underwriters Insurance Company at a premium of $124,523. This was an increase of 99.9 percent over the prior year's premium of $62,208 with relatively the same level of coverage except for the addition of terrorism coverage. Although this is a non-admitted insurer, it carries an A-, Excellent rating from Best Guide Rating. As directed by the Board of Directors, staff has secured this $25 million of comprehensive coverage for municipal liability, bodily injury and property damage, and personal injury, with a self-insured deductible of $250,000 per occurrence for an amount not to exceed $450,000. Actual excess liability insurance premiums totaled $389,964. ALTERNATIVES None. CEQA FINDINGS None. ATTACHMENTS 1. Insurance Schedule as of July 1, 2003. G:\wp.d1a\agenda\Board Agenda Aeports\2003 Board Agenda Aeports\0703\ltem 14(c).Excess Workers Comp.doc Revised: 06/04/03 Page3 POLICY COVERAGE Boiler and Machinery Travel and Accident Item 14(c).1 POLICY LIMITS (US$) $100,000,000 Per Occurrence Combined Limit Sublimits: -$1 O mil. Expediting Expenses, Ammonia Contamination, Water Damage, Errors & Omissions, and Service Interruptions -$2 mil. Earthquake Damage & Electronic Data Processing -$1 mil. Hazard Substance, Demolition & Increased cost of Construction, and Building Ordin- ance Coverages -Class 1 -$100,000 Per Person, All Employees and Directors -$500,000 Aggregate any one accident ORANGE COUNTY SANITATION DISTRICT INSURANCE SCHEDULE POLICY PERIOD 15-May-03 to 1-Jul-04 AS OF 1 JULY 2003 INSURANCE ANNUAL CARRIER PREMIUM Lexington $89,676 Insurance Company ($1 o mil. Primary) CNA Insurance Company (50% of $90 mil. excess of $10 mil.) Foreign Excess Ins. Companies (50% of $90 mil. excess of $10 mil.) 16-Jun-03 Nationwide Life $500 to Insurance 16-Jun-04 Company (94500001160) SIR/DEDUCTIBLE RETENTION -$25,000 Deductible -$100,000 Deductible for Motors, Engines, and Turbines over 500 HP, and Digesters and Reactors None RISKS COVERED Production machines, public utility equipment, business interruption, and earthquake resultant damage. Accidental Death and Dismemberment While Traveling Outside Orange County. 7/15/2003 POLICY POLICY POLICY PERIOD COVERAGE LIMITS US$ Excess Workers' Compensation Faithful Performance Bond Item 14(c).2 ~~~~~~~~- -$50 mil. workers' 01-Jul-03 Compensation each to accident/each employee 01-Jul-04 -Includes Allocated Claims Expenses -$10 mil. Employer's Liability -$1,000,000 (Primary) and $4,000,000 (Excess) Per Loss Employee Dishonesty, Faithfull Performance, and Computer Fraud for all Employees and Directors. 01-Apr-03 to 01-Apr-04 ORANGE COUNTY SANITATION DISTRICT INSURANCE SCHEDULE AS OF 1 JULY 2003 INSURANCE CARRIER California Public Entity Insurance Authority -Hartford Fire Insurance Co. ($2,500 -$22,500 Layer) (72BPEAK4998) -National Union Fire Insurance Co. ($25,000 -$1,000,000 Layer) (214-31-48) -Great American Insurance Company (Excess of $1,025,000 Layer) (GVT 357-06-05-01) 2 ANNUAL SIR/DEDUCTIBLE PREMIUM RETENTION $168,720 $3,618 -$500,000 Workers' Compensation & Employers' Liability -Includes Allocated Claims Expenses $2,500 Deductible RISKS COVERED Specific Excess Insurance for self-insurer of Workers' Compensation in the State of California. Public Employee Dishonesty (AKA Fidelity Bond), including Faithful Performance, Computer Fraud, and Depositor's Forgery 7/15/2003 POLICY COVERAGE Excess General Liability Insurance Property Insurance POLICY LIMITS (US$) $25,000,000 Blanket loss limit per occurrence and annual aggregate $750/$300 mil. Blanket loss limit per occurrence for the perils of fire/flood (District is totally self-insured for the perils of earthquake) Item 14(c).3 POLICY PERIOD 01-Jul-03 to 01-Jul-04 15-May-03 to 1-Jul-04 ORANGE COUNTY SANITATION DISTRICT INSURANCE SCHEDULE AS OF 1 JULY 2003 INSURANCE CARRIER Insurance Company of the State of PA (American International Group-AIG) ($1 O mil. Layer) Gulf Underwriters Insurance Company ($15 mil. Layer) Public Entity Property Insurance Program. ANNUAL PREMIUM $389,964 $716,494 3 SIR/DEDUCTIBLE RETENTION -$250,000 per occurrence and annual aggregate -5% per Unit of Insurance subject to $100,000 -$100,000 Flood -$25,000 for all other Perils. "'"·· j ; RISKS COVERED Excess General Liability on occurrence basis for bodily injury, personal injury, property damage (including vehicles), public officials E+O, and employment practices. Note: Gulf Underwriters Insurance Co. is a Non-Admitted Carrier and does not participate in any insurance guarantee funds created by California law. All Risk including flood on all real property and personal, underground tunnels, piping, utilities, ocean outfall, lift, and pumping stations, business interruption, rents, (including bond revenue payments), electronic data processing media and extra expense, contractors equipment, vehicles (in- cluding collision), transit, demolition and increased cost of construction, contingent liability, valuable papers, automatic coverage, debris removal, extra expense and accounts receivable all per manuscript form. 7/15/2003 FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Lisa Tomko, Director of Human Resources Originator: Jeff Reed, Human Resources Manager SUBJECT: TEMPORARY EMPLOYMENT SERVICES GENERAL MANAGER'S RECOMMENDATION Meeting Date To Bd . of Di r. 07/09/03 07/23/03 Item Number Item Number FAHR 03-59 14(d) 1 . Approve an increase to the Temporary Employment Services Purchase Order contract authority for an additional $350,000, increasing the total authorized amount from $1,500,000 to an amount not to exceed $1,850 ,000 to pay additional expenditures for FY02/03; and 2. Approve an increase to the Temporary Employment Services Purchase Order contract from $1 ,000,000 to an amount not to exceed $1,850,000 for FY03/04. SUMMARY • In 1999 the Board authorized staff to use a combination of several firms to supply temporary services to the District in order to provide flexibility and to comply with the Purchasing Resolution. The initial request and authority contemplated an annual maximum spending limit for each of the next several years, but did not commit the Board to those estimates . At that time, the estimated requirements for 2002-03 were $3,870,000. • Because of anticipated changes in the method of obtaining engineering-related temporary services, staff requested and the Board granted a reduced authority of $1,000,000 for 2002-03. Temporary laboratory services amounted to nearly $440,000 and the temporary programmers cost nearly $826,000. These two programs combined for a total of $1,266,000 for capital projects and were approved by the Board in the FY02/03 budget. All CIP related temporary employment services are charged directly to an approved CIP project identified in budget. These expenses account for 84% of 2002-03 total temporary service charges . • At the March 2003 meeting the Board increased the 2002-03 authorization to $1,500,000 because of increased costs and projections. The projected use of temporary services for the two projects noted above and for other capital improvement projects for the month of June alone is $276,000 , resulting in total costs for the month equivalent to 18% of the costs for the entire year. Because of this increase in use, staff is requesting a final increase to the 2002-03 temporary services authority of $350,000 to a new maximum "not-to-exceed" amount of $1 ,850 ,000 in order to fully cover all budgeted and approved temporary employment services for 2002-03. Since all temporary employment services costs are included Page 1 in the approved budget, this change only increases the dollar value of the Temporary Employment Services Blanket Purchase Order. • Copies of several prior reports to the Committee are attached to provide historical perspective to the Directors . PRIOR COMMITTEE/BOARD ACTIONS 1. Board Meeting 6/26/99; Item 17(f) -(FAHR99-50) Temporary Employment Services -Award contracts for Temporary Employment Services (Specification No . P-186). 2 . Board Meeting 5/24/00 ; Item 15(i) -(FAHR00-45) Temporary Employment Services -Approve an increase of $200,000 for the remainder of FY99/00 and approve funding in the amount of $2,402,000 for FY00/01 ($1 ,900,000 was approved for FY00/01 ). 3 . Board Meeting 3/27/02; Item 19 -Temporary Employment Services -Approve an increase of $300,000 for a total of $1,300 ,000 for the remainder of FY01/02 . 4. Board Meeting 6/26/02; Item 16(d) -(FAHR02-54) Temporary Employment Services -Approve an increase of $250,000 for a total of $1 ,550,000 for the remainder of FY01 /02. 5. Board Meeting 3/26/03; Item 14(e) -(FAHR03-18) Temporary Employment Services -Approve an increase of $500 ,000 for a total of $1 ,500,000 for the remainder of FY02/03 and approve an increase of $750 ,000 for FY03/04 in an amount not to exceed $1,750 ,000 (The additional $750,000 was not approved for FY03/04). PROJECT/CONTRACT COST SUMMARY Not applic able . BUDGET IMPACT ~ This item has been budgeted. D This item has been budgeted , but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) ADDITIONAL INFORMATION Not applicable . ALTERNATIVES Not applicable . Page 2 f 1t' CEQA FINDINGS Not applicable. ATTACHMENTS 1. FY02/03 Temporary Services Costs. 2. Joint Operating Fund Budget Projection 2003-04 Proposed Budget for Temporary Services. 3. Capital Improvement Projects Utilizing Temporary Services for FY03/04. 4. Board Meeting 6/25/03; Item 16(d)-(FAHR03-47) Temporary Employment Services -Informational Report. 5. Board Meeting 3/26/03; Item 14(e)-(FAHR03-18) Temporary Employment Services 6. Board Meeting 6/26/02; Item 16(d)-(FAHR02-54) Temporary Employment Services 7. Board Meeting 3/27/02; Item 19 -Temporary Employment Services 8. Board Meeting 5/24/00; Item 15(i) -(FAHR00-45) Temporary Employment Services 9. Board Meeting 6/26/99; Item 17(f)-(FAHR99-50) Temporary Employment Services Page3 FV02/03 Temporary Services Costs Total by Department Total by Agency (PO) Division YTD Agency YTD 120 $12,134.52 AooleOne $117,652.26 220 $10,691.99 Ballantyne $285, 700.20 230 $481.02 Irvine Technology $155,240.00 510 $11,978.88 Kforce $449,373.16 530 $0.00 Lab Suooort $50,078.83 620 $31,046.80 Pixel Pushers $34,757.50 630 $59,923.39 Project Partners $78,949.19 6300 $439,528.60 Remedy $31,946.41 640 $47,301.55 TekSystems $262, 125.84 740 $899.71 Vantage Group $314,808.00 760 $78,949.19 TOTAL $1,780,631.39 850 $19,126.51 860 $15,937.69 930 $226, 7 44.84 940 $825,886. 70 TOTAL $1, 780,631.39 , Joint Operating Fund Budget Projection FY 2002·03 Projected and 2003-04 Proposed Budget for Temporary Services, Object# 53190, Summary by Division Current Adjusted Expense 2000-01 2001-02 Budget Thru 2002-03 Div. Description Actual Actual 2002-03 12/31/2002 Projected 110 GEN'L MGMT ADMIN. 120 ADMIN SVCS 2,936 3,000 7,867 11,500 130 COMMUNICATIONS 2,594 2,440 2,440 210 FINANCE ADMIN. 220 ACCOUNTING 912 4,000 230 PURCH. & WHSE. 30,000 15,000 510 HUMAN RESOURCES ADMIN. 569 3,500 3,500 520 EMPLOYEE DEVELOPMTfrRAINING 530 SAFETY & HEAL TH 186 1,000 1,587 1,587 540 HUMAN RESOURCES 61 O TECH. SERVS. ADMIN. 620 ENVIR. COMP & MNTR 21,342 20,000 18,073 36,000 630 LABORATORY 54,131 45,000 172,965 456,000 640 SOURCE CONTROL 19,028 20,776 42,000 710 ENGINEERING ADMIN. 740 PLANNING 13,600 2,663 2,663 750 PROJECT MANAGEMENT OFFICE 18,760 1,300 760 ENGINEERING & CONSTRUCTION 19,978 9,043 810 0 & M ADMIN. 820 0 & M PROCESS SUPPORT 830 PLT #1 OPERATIONS 840 PLT #2 OPERATIONS 850 MECHANICAL MTCE 20,000 17,000 860 ELECTR. & INSTR MTCE 15,068 15,000 12,139 14,000 880 AIR QUALITY 420 COLL FACILITIES MTCE. 430 PLANT FAC. MTCE 869 910 l.T. ADMINISTRATION 930 CUSTOMER & NETWORK SUPPORT 99,270 150,000 59,043 120,000 940 PROGRAM. & DATABASE SYSTEMS 950 PROCESS CONTROLS INTEGRATION 269,243 292,800 306,596 721,690 2003-()4 Proposed 16,500 2,500 30,000 3,500 1,000 20,000 455,000 15,000 14,000 18,000 150,000 725,500 Projected Change In$ 5,000 60 15,000 (587) (16,000) (1,000) (42,000) (2,663) (2,000) 18,000 30,000 3,810 Projected Change AsA% 43.48 2.46 100.00 (36.99) (44.44) (0.22) (100.00) (100.00) (11.76) 25.00 0.53 Budget Change In$ 13,500 2,500 (4,000) 410,000 (1,300) (5,000) (1,000) 18,000 432,700 Budget Change AsA% 450.00 (100.00) 911.11 (100.00) (25.00) (6.67) 147.78 I Capital Improvement Proiects Utilizing Temporary Services FY03/04 Information Technology Projects: $750,000 • Source Control Programming -SP-13 • Data Integration -SP-02 • Intranet/Internet Development Lab Projects: $25,000 Engineering Projects: $25,000 \ FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Lisa Tomko, Director of Human Resources Originator: Jeff Reed, Human Resources Manager Meeting Date 06/11/03 Item Number FAHR03-47 SUBJECT: TEMPORARY EMPLOYMENT SERVICES -Informational Report GENERAL MANAGER'S RECOMMENDATION To Bd. of Dir. 06/25/03 Item Number 16(d) Response to the Board of Directors inquiry during the March 25th Board meeting on item FAH R03-18, temporary employment services. SUMMARY The temporary service needs of the District have increased since the program's inception in 1999. Three months ago the Board of Directors approved an increase to the FY02/03 temporary services budget, and requested a cost comparison of various employment options before evaluating an increase to the FY03/04 budget. Staff has reviewed cost information for the following types of employment options: • Regular employee -an employee who regularly works on a year-round basis for an indefinite period of time. Regular employees are entitled to benefits as set forth in the various bargaining unit Memoranda of Understanding and in the District's policies and procedures. Although not guaranteed, regular employees are appointed with the anticipation that their position will continue on a career basis and funding is available and appropriated. • Limited term employee -an employee employed to work on a full-time or part-time basis for a specific duration set forth in a Limited Term Employment Agreement. The timeframe is identified in the Limited Term Employment Agreement and cannot exceed 36 months. Full-time limited term employees are eligible to participate in, and receive, all District benefits including vacation and sick leave accrual, insurance and retirement. There are currently three limited term employees employed at the District, two full-time and one part-time. • Temporary employee -a worker who is not directly employed or paid by the District, but is employed by an entity or agency other than the District. A temporary worker is not considered to be a District employee and cannot participate in, or receive, any District benefits, including but not limited to vacation and sick leave accrual, insurance and retirement. The District utilizes a number of temporary agencies to provide temporary workers on an as-needed basis. The cost of a temporary employee includes the temporary's hourly rate and the mark-up rate that is the "paymenf' to the temporary agency to cover worker's compensation costs, benefits provided to the temporary worker, overhead costs of the temporary agency, etc. The mark-up rates for the current temporary agencies utilized by the District range from 45% to 70%. There are approximately 40 temporary employees currently assigned to the District working predominantly in the Technical Services and Information Technology Departments. The cost comparison for the three employment options (Attachment 1) is based on the following: 1. All amounts are based on 2080 hours worked. 2. Current pay ranges are used as the basis for the regular and limited term employees with an additional 35% for benefits. Cost estimations of District staff to recruit, train, handle employee relations issues, etc. have not been included. 3. Temporary agencies billable rates for current temporary employees are used to calculate temporary employee amounts. District personnel were contacted to match the temporary employees to an appropriate District classification. PROJECT/CONTRACT COST SUMMARY N/A BUDGET IMPACT D This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. ~ Not applicable (information item) ADDITIONAL INFORMATION The question of which type of employee best fits the needs of the District has been analyzed in the past and has changed over time. There are costs and benefits associated with utilizing limited term or temporary employees. The District has utilized limited term employees predominantly in the Engineering Department. In 2001, the District began a program to hire more limited term employees as the costs associated with these employees are the same as regular employees but lower than temporary employees and the risk of co-employment issues was mitigated. Over time, the Human Resources Department found that there was an inadequate external pool of qualified employees willing to move from their current employment status to a limited term status at the District. Recruiting costs and time to fill numbers increased due to this situation and the District moved back to utilizing temporary employees. G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).4.doc Revised: 8120/01 Page2 I Temporary employees are currently being used predominantly in the Laboratory Division and Information Technology Department for short-term projects. The Human Resources Department now monitors the length of time that these temporary employees are utilized and emphasizes the role of the temporary agency as employer rather than the District to ensure that the issue of co-employment does not arise as in the Metropolitan Water District of Southern California and Microsoft suits. ALTERNATIVES N/A CEQA FINDINGS N/A ATTACHMENTS 1. Temporary Employment Services Annualized Cost Comparison G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).4.doc Revised: 8120/01 Page3 FAHR COMMITTEE AGENDA REPORT Otange County Sanitation District FROM: Lisa Tomko, Director of Human Resources Originator: Jeff Reed, Human Resources Manager SUBJECT: TEMPORARY EMPLOYMENT SERVICES GENERAL MANAGER'S RECOMMENDATION Meeting Date To Bel. of Dir. 03/12/03 03/26/03 Item Number Item Number FAHR03-18 14(e) 1. Approve an increase to the Temporary Employment Services contract for an additional $500,000, increasing the total authorized amount from $1,000,000 to an amount not to exceed $1,500,000 for the remainder of FY02/03; and, 2. Approve an increase to the Temporary Employment Services contract from $1,000,000 to an amount not to exceed $1,750,000 for FY 03/04. SUMMARY The District contracts for temporary services to support both capital and non-capital projects. Temporary staffing has been utilized beyond projected levels for FY 02-03 as a result of an increase in capital improvement projects within the Information Technology (IT) Department. Temporary services charges associated with IT contract Programmers currently working on capital projects for the Technical Services and Engineering Departments through December 31, 2002 were $297,507. This amount equals 30% of FY 02-03 total temporary services charges of $978,415. This charge will create a budget shortfall to the authorized $1,000,000 Temporary Services purchase order (PO). Additionally, temporary staffing funds were reduced during the first half of FY 02/03 by $225,000 due to the District's commitment to the Disinfection Project. As of December 31, 2002, the temporary services allocated to the Disinfection Project reduced the total temporary services budget by 25%. District staff has determined the temporary services support for the Disinfection Project will be ongoing for approximately the next six (6) to nine (9) months. It is anticipated that the total cost to support the Dis inf action Project with temporary services for this year will be approximately $450,000, or 50% of the total temporary services blanket PO. The unforeseen expense associated with the Disinfection Project impacted the amount originally budgeted for administrative temporary staffing and will contribute to the premature depletion of the original $1,000,000 authorized by the blanket PO. Based on the IT Department's temporary services contract worker usage in FY 01-02 and the reduction in the Engineering Department's contract labor paid through the Temporary Services PO in FY 02-03, the $1,000,000 blanket PO was anticipated to be adequate to cover the non-capital temporary labor costs, which would remain relatively constant. However, as the IT department increased the number of projects and the Technical Services Department implemented the chlorine residual testing and Page 1 monitoring for the Disinfection Project, it became apparent that the temporary services costs would exceed the forecasted and approved blanket PO amount. As of December 31, 2002, $732,000 had been spent for temporary labor. IT related capital projects and the Disinfection Project accounted for 52% of this expenditure. Therefore, a deficiency of $500,000 is anticipated based on the additional temporary services costs absorbed by the existing temporary services blanket PO. Aside from the capital projects and Disinfection Project, temporary resources will continue to be required to support Customer and Network Support, Process Control Integration, and administrative services. BUDGET IMPACT D This item has been budgeted. ~ This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) ADDITIONAL INFORMATION The Board approved Temporary Employment Services Agenda Report (AR) dated June 26, 1999 estimated a maximum of $1,000,000 per year of expenditures for total temporary employment services for the District, which included capital as well as non- capital related temporary services. Projected costs for FY 02-03, which were provided as information only in the Board approved Temporary Employment Services AR dated May 24, 2002 were $3,870,000. Based on current projections, the District will need an additional $500,000 in temporary employment services for FY 02-03. This projection assumes the continued use of temporary staffing for the IT capital projects. The total amount for FY 02-03 of $1,500,000, or 39% of the projected $3,870,000, will provide for non-capital as well as IT capital related temporary services workers to be utilized during the remainder of FY 02-03. On June 26, 1999, the Board approved a request for $1,000,000 in funding for temporary employment services, which included the IT capital improvement contract staff. Due to the fact that the staff recommendation did not forecast the use of the temporary services blanket PO for capital-related programs, the $1,000,000 did not accurately reflect the needs of the District. Therefore, a request for additional funding was presented to the Board on May 24, 2000 to cover the FY 00-01 deficiency for temporary services supporting the Capital Improvement Program (CIP). It was also intended to provide a forecast for additional funds for the following three years; however, the forecasted funds are subject to approval by the board when the budget for each of those three years is adopted each June. The $297 ,507 cost of the IT supported capital-related temporary services is paid by the capital project budget. These costs do not impact the cost per million gallons of wastewater treated; however, these costs are booked against the $1,000,000 temporary services budget as a method of ensuring the appropriate use of temporary staffing. Page2 ALTERNATIVES 1) Do not authorize the increase and suspend the use of temporary services. 2) Hire full time regular employees on Limited Term Contracts to support a Division through a peak period. Limited term employees are regular full time employees placed on contracts with a specific end date. These employees, during the duration of their contracts, would be entitled to all benefits and provisions of regular full time employees. CEQA FINDINGS Not applicable. ATTACHMENTS Temporary Service Totals FY02/03 (Total temporary services expenditures by agency against the PO through February 2003) Page3 FAHR COMMITTEE Meeting Date To Bd. of Dir. 6/12/02 6/26/02 AGENDA REPORT Item Number Item Number FAHR02-54 16(d) Orange County Sanitation District FROM: Lisa Tomko, Director of Human Resources Originator: John Weingarden, Human Resources Analyst SUBJECT: TEMPORARY EMPLOYMENT SERVICES GENERAL MANAGER'S RECOMMENDATION Increase the Temporary Employment Services authorization by an additional $250,000, raising the authorized amount from $1,300,000 to $1,550,000 for the remainder of FY 01-02. SUMMARY Board Item 19, approved in March 2002, increased the authorized Temporary Employment Services allocation of $1,000,000 to $1,300,000 for the remainder of FY 01-02. This initial increase did not anticipate the total needs of the District for the remainder of FY 01-02, and another authorization is needed. In March 2002 the Engineering Department transitioned to a new Operational Model for Engineering capital project support. This Professional Services Agreement (PSA), based on General Counsel's recommendations, was expected to be implemented in December, and to reduce the impact of these services on the Temporary Employment Services authorization. Because the initial $1,000,000 Temporary Services allocation for FY 01-02 was utilized to cover both capital projects, as well as non-capital temporary labor costs through March, rather than December, the initial authorization was insufficient. The initial $300,000 addition was anticipated to be adequate to cover non-capital project temporary labor costs for the remainder of FY 01-02. It was unanticipated that the amount of capital project related invoices outstanding for services prior to the implementation date of the PSA would significantly deplete the $300,000. Additionally, it was unforeseen that not all of the Engineering Department's temporary employees would fall under the PSA for capital projects. These two unexpected demands on the authorization will require additional authorization. Regular temporary resources will continue to be required in Customer and Network Support, Programming and Database Systems, Process Control Integration Divisions, and administrative support. An additional authorization of $250,000 for a total of $1,550,000 is requested for FY 01-02. The transition to the capital projects PSA should allow the expenses associated with temporary staffing to remain within the established $1,000,000 temporary budget in subsequent years. G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).6.doc Revised: 8120198 Page 1 BUDGET IMPACT D This item has been budgeted. ~ This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) ADDITIONAL INFORMATION See attachments. ALTERNATIVES 1) Deny the request and discontinue the use of temporary employment services. 2) Hire full time regular employees on Limited Term Contracts to support a Division through a peak period. Limited term employees are regular full time employees placed on contracts with a specific end date. These employees, during the duration of their contracts, would be entitled to all benefits and provisions of regular full time employees. CEQA FINDINGS Not applicable. ATTACHMENTS March 27, 2002 Board Item Number 19 G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\l1em 14(d).6.doc Revised: 8/20/98 Page2 BOARD OF DIRECTORS Meeting Date To Bd. of Dir. 3/27/02 AGENDA REPORT Item Number Item Number Orange County Sanitation District FROM: Lisa Tomko, Director of Human Resources Originator: John Weingarden, Human Resources Analyst SUBJECT: TEMPORARY EMPLOYMENT SERVICES GENERAL MANAGER'S RECOMMENDATION Approve an increase to the Temporary Employment Services budget allocation of $300,000, raising the total budgeted amount from $1,000,000 to $1,300,000 for the remainder of FY 01-02. SUMMARY 19 FAHR Item 99-50, approved in June 1999, established $1,000,000 annually in funding for temporary employment services for five subsequent years. Because this initial staff recommendation to FAHR limited the total amount of the temporary services budget to $1,000,000 it did not accurately reflect the needs of the District in FY 99-00, and a shortfall to the temporary services budget occurred. Subsequently, FAHR Item 00-45, approved in May 2000, was presented to request additional funding to cover the shortage during FY 00-01 for temporary services supporting the Capital Improvement Program (CIP), and to provide a forecast for additional funds for the next three years. A total cost of $3,370,000 was forecast for FY 01-02, and was to be proposed and approved as needed. During the first quarter of FY 01-02, a proposal to transition to a new Operational Model for Engineering support was made. At that time staff began development of a Professional Services Agreement (PSA) based on General Counsel's recommendations. Therefore the $1,000,000 Temporary Services Budget for FY 01-02 was anticipated to be adequate to cover the non-capital temporary labor costs, which would remain relatively constant. However, the unanticipated Huntington Beach Study began in May 2001, and continued into the current fiscal year. In December 2001, $810,000 had been spent for temporary labor. Capital projects accounted for 50.2% of this, as the PSA had not yet been implemented; therefore, a shortfall of $300,000 to the temporary services budget is anticipated. Regular temporary resources will also continue to be required in Customer and Network Support, Programming and Database Systems, Process Control Integration Divisions, and administrative support. Additionally, regular temporary staffing funds were expended by approximately $80,000 due to the unanticipated temporary services requirements for the Huntington Beach Study. This amount reduced the total temporary budget by 8%. This unforeseen project impacted the amount originally budgeted for administrative temporary staffing, and added to the premature depletion of the original $1,000,000. G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).6.doc Revised: 8120/98 Page3 The transition to the PSA, as well as the utilization of Limited Term Contract Engineers should allow the expenses associated with temporary staffing to remain within the established $1,000,000 temporary budget in subsequent years. BUDGET IMPACT D This item has been budgeted. ~ This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) ADDITIONAL INFORMATION See attachments. ALTERNATIVES 1) Deny the request and discontinue the use of temporary employment services. 2) Hire full time regular employees on Limited Term Contracts to support a Division through a peak period. Limited term employees are regular full time employees placed on contracts with a specific end date. These employees, during the duration of their contracts, would be entitled to all benefits and provisions of regular full time employees. CEQA FINDINGS Not applicable. ATTACHMENTS FAHR Item Number FAHR99-50 FAHR Item Number FAHR00-45 G:\wp.dta\agenda\Board Agenda Reports'\2003 Board Agenda Reports\0703\ltem 14(d).6.doc Revised: 8/20/98 Page4 0 FAHR COMMITrEE Meeting Date 5/10/00 AGENDA REPORT Item Number FAHR00-45 Orange County Sanitation District FROM: Lisa Tomko, Acting Director of Human Resources Originator: John Weingarden, Human Resources Analyst Doug Stewart, Engineering Manager SUBJECT: TEMPORARY EMPLOYMENT SERVICES GENERAL MANAGER'S RECOMMENDATION Approve an increase to the Temporary Employment Services total contracts by $200,000, from $1,000,000 to $1,200,000 for remainder of Fiscal Year 99-00, and approve funding in the amount of $2,402,000 for Fiscal Year 00-01. SUMMARY To Bd. of Dir. 5/24/00 Item Number Temporary services for the District are comprised of both capital and non-capital projects. 15% of the temp needs are non-capital and 85% are capital. Additional temporary staffing is required as a result of a peak in capital improvement projects outlay during the five-year period through fiscal year 2004. This need for capital-related temporary services is in addition to the need for services for daily operations at the District. The need for temporary services to support the projected future capital improvement program was discussed with and approved by the PDC Committee in April 1999 (see attached). The Temporary Employment Services Agenda Item, FAHR99-50, approved by the FAHR Committee, estimated $1,000,000 per year cap on all temporary employment services for the District, included capital as well as non-capital related temporary services. We anticipate a $200,000 shortfall for this fiscal year. As the capital improvement program continues to increase over the next four years, capital- related temporary services for engineering, inspection, and support services will need to be increased. Based on the current capital-improvement program/outlay schedule, the District will need an additional $200,000 in temporary employment services for FY 99-00, including non-capital related temporary employment services. For FY 00-01 this amount is anticipated to increase to $2,402,000 and may reach a high of $3,870,000 FY 02-03. The increase in capital-related resource needs is a result of capital projects that will move from the design process to the construction phase. As the design work moves to the construction phase, additional staff will be needed. The cost of the capital-related temporary services will be paid by the capital project budget. These costs do not impact the cost per million gallons. Staff is recommending the above-described increases in Temporary Employment Services. Staff recognizes that the degree of escalating costs associated with temporary contract service-workers are unexpected, and previously not fo G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).6.doc Revised: 8120/98 Pages be conducting a cost analysis during the first half of FY 00-01 to accurately address the advantage of regular employees verses contract service workers. PROJECT/CONTRACT COST SUMMARY Vear Capital Non-Capital Total 99-00 $ 970,000 $230,000 $1,200,000 00-01 2,125,000 277,000 $2,402,000 01-02 * 3,095,000 275,000 $3,370,000 02-03 * 3,595,000 275,000 $3,870,000 03-04 * 2,475,000 275,000 $2,750,000 * For information only, funding amounts to be proposed and approved in subsequent Fiscal Years. BUDGET IMPACT ~ This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) ADDITIONAL INFORMATION Discussion The District's staff has recognized a significant need for contract-service workers due to an increase in capital projects for the next five years. Our capital improvement project budget is expected to increase from $70,000,000 today to $198, 700,000 by fiscal year 2005. As information, this capital outlay represents over 180 various projects throughout the treatment and collections facility. Most of these projects were identified in the Strategic Plan adopted by the Board in 1999. Other projects are added to the CIP that have been identified by staff and recommended by the EMT and the General Manager. The projected capital outlay for fiscal year 2000-01 is $83,007 ,000. In April 1999, the Engineering Department presented a program to the PDC Committee that would provide contract-service worker resources to conduct the capital project work. The proposed program consisted of hiring contract-engineering services during the associated five-year peak capital outlay period. FAHR Item 99-50, in June 1999, requested $1,000,000 in funding for temporary employment services which included the proposed capital improvement contract engineering staff. Due to the fact that the staff recommendation to FAHR included the contract engineering services staff for the capital-related program, as well as non-capital related temporary services, the $1,000,000 did not accurately reflect the needs of the District. The purpose of this agenda item is to request additional funding to cover the shortage during the current fiscal year for temporary services supporting the CIP, and to provide a forecast for additional funds for the next three years. (These amounts will be subject to approval by the board when the budget for each of those three years are adopted each June.) G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14{d).6.doc Revised: 8120/98 Page9 -• 0 As the capital improvement program activities ramp up, additional contract-sesvices will be required for project management, design, reviews, coordination, and inspection. For example, as the current design projects move into construction, additional construction engineers and inspectors must be obtained. Staff has estimated that additional contract sesvice-workers will ultimately be required for capital-related activities. These additional temporary resources will be required in the Design, Process Engineering, Construction, Customer and Network Support, Programming and Database Systems and the Process Control Integration Divisions. The increase in capital outlay has impacted the O&M Department as a result of coordinating capital activities with the Engineering Department, reviewing construction plans and specifications, developing facility process-control strategy for the new projects, planning for construction sequencing and connections to existing facilities, assisting with plant start-ups and shut-downs, visiting various collection and treatment plant sites with consultants, attending meetings, arranging for sewer flow monitoring and/or video taping as required by capital project needs, and coordination between capital activities and ongoing treatment plant operations. In addition, the temporary engineering resources will be used to ensure field staff safety, for locating utilities, and for reviewing designs for operability and maintenance friendliness. The O&M Department currently has one contract-engineer in the Process Engineering Division to support the treatment plant capital improvement program and requires a second to provide support for the collections system capital program. The requirements for Information Technology related sesvices and support continue to rise above the Department's current resource level. Many of these requirements are short-term or project oriented and can be met by augmenting permanent staff with temporary contract support. This strategy gives Information Technology the flexibility to manage its peak workloads associated with programming, analysis, project management, and hardware/software support. Further, this strategy will provide Information Technology with the temporary staff required to support the increased volume of capital project work now going into design. Funding Funding for capital improvement contract sesvice-workers is already recognized through the particular capital project being worked on, and is budgeted by the particular capital budget process. The temporary sesvice-worker contracts for operating requirements are budgeted within the Operating Fund. ALTERNATIVES 1) Deny the request and put certain projects on hold. 2) Hire full time regular employees on Limited Term Contracts to support a Division through a peak period. Limited term employees are regular full time employees placed on contracts with a specific end date. These employees, during the duration of their contracts, would be entitled to all benefits and provisions of regular full time employees. G:\wp.d1a\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).6.doc Revised: 8120/98 Page 10 CEQA FINDINGS N'ot applicable. ATTACHMENTS FAHR Item Number FAHR99-50 PDC Item Number PDC99-20 G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\llem 14(d).6.doc Revised: 8/20/98 Page 11 FAHR COMMITTEE Meeting Date 5/10/00 AGENDA REPORT Item Number FAHR00-45 Orange County Sanitation District FROM: Lisa Tomko, Acting Director of Human Resources Originator: John Weingarden, Human Resources Analyst Doug Stewart, Engineering Manager SUBJECT: TEMPORARY EMPLOYMENT SERVICES GENERAL MANAGER'S RECOMMENDATION Approve an increase to the Temporary Employment Services total contracts by $200,000, from $1,000,000 to $1,200,000 for remainder of Fiscal Year 99-00, and approve funding in the amount of $2,402,000 for Fiscal Year 00-01. SUMMARY To Bet of Dir. 5/24/00 Item Number 15(i) Temporary services for the District are comprised of both capital and non-capital projects. 15% of the temp needs are non-capital and 85% are capital. Additional temporary staffing is required as a result of a peak in capital improvement projects outlay during the five-year period through fiscal year 2004. This need for capital-related temporary services is in addition to the need for services for daily operations at the District. The need for temporary services to support the projected future capital improvement program was discussed with and approved by the PDC Committee in April 1999 (see attached). The Temporary Employment Services Agenda Item, FAHR99-50, approved by the FAHR Committee, estimated $1,000,000 per year cap on all temporary employment services for the District, included capital as well as non-capital related temporary services. We anticipate a $200,000 shortfall for this fiscal year. As the capital improvement program continues to increase over the next four years, capital- related temporary services for engineering, inspection, and support services will need to be increased. Based on the current capital-improvement program/outlay schedule, the District will need an additional $200,000 in temporary employment services for FY 99-00, including non-capital related temporary employment services. For FY 00-01 this amount is anticipated to increase to $2,402,000 and may reach a high of $3,870,000 FY 02-03. The increase in capital-related resource needs is a result of capital projects that will move from the design process to the construction phase. As the design work moves to the construction phase, additional staff will be needed. The cost of the capital-related temporary services will be paid by the capital project budget. These costs do not impact the cost per million gallons. Staff is recommending the above-described increases in Temporary Employment Services. Staff recognizes that the degree of escalating costs associated with temporary contract service-workers are unexpected, and previously not forecasted. For this reason, we will G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).8.doc Revised: 8120198 Page 1 be conducting a cost analysis during the first half of FY 00-01 to accurately address the advantage of regular employees verses contract service workers. PROJECT/CONTRACT COST SUMMARY Vear Capital Non-Capital Total 99-00 $ 970,000 $230,000 $1,200,000 00-01 2,125,000 277,000 $2,402,000 01 -02 * 3,095,000 275,000 $3,370,000 02-03 * 3,595,000 275,000 $3,870,000 03-04 * 2,475,000 275,000 $2,750,000 * For information only, funding amounts to be proposed and approved in subsequent Fiscal Years. BUDGET IMPACT ~ This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) ADDITIONAL INFORMATION Discussion The District's staff has recognized a significant need for contract-service workers due to an increase in capital projects for the next five years. Our capital improvement project budget is expected to increase from $70,000,000 today to $198, 700,000 by fiscal year 2005. As information, this capital outlay represents over 180 various projects throughout the treatment and collections facility. Most of these projects were identified in the Strategic Plan adopted by the Board in 1999. Other projects are added to the CIP that have been identified by staff and recommended by the EMT and the General Manager. The projected capital outlay for fiscal year 2000-01 is $83,007,000. In April 1999, the Engineering Department presented a program to the PDC Committee that would provide contract-service worker resources to conduct the capital project work. The proposed program consisted of hiring contract-engineering services during the associated five-year peak capital outlay period. FAHR Item 99-50, in June 1999, requested $1,000,000 in funding for temporary employment services which included the proposed capital improvement contract engineering staff. Due to the fact that the staff recommendation to FAH R included the contract engineering services staff for the capital-related program, as well as non-capital related temporary services, the $1,000,000 did not accurately reflect the needs of the District. The purpose of this agenda item is to request additional funding to cover the shortage during the current fiscal year for temporary services supporting the Cl P, and to provide a forecast for additional funds for the next three years. (These amounts will be subject to approval by the board when the budget for each of those three years are adopted each June.) G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).8.doc Revised: 8/20198 Page2 As the capital improvement program activities ramp up, additional contract-services will be required for project management, design, reviews, coordination, and inspection. For example, as the current design projects move into construction, additional construction engineers and inspectors must be obtained. Staff has estimated that additional contract service-workers will ultimately be required for capital-related activities. These additional temporary resources will be required in the Design, Process Engineering, Construction, Customer and Network Support, Programming and Database Systems and the Process Control Integration Divisions. The increase in capital outlay has impacted the O&M Department as a result of coordinating capital activities with the Engineering Department, reviewing construction plans and specifications, developing facility process-control strategy for the new projects, planning for construction sequencing and connections to existing facilities, assisting with plant start-ups and shut-downs, visiting various collection and treatment plant sites with consultants, attending meetings, arranging for sewer flow monitoring and/or video taping as required by capital project needs, and coordination between capital activities and ongoing treatment plant operations. In addition, the temporary engineering resources will be used to ensure field staff safety, for locating utilities, and for reviewing designs for operability and maintenance friendliness. The O&M Department currently has one contract-engineer in the Process Engineering Division to support the treatment plant capital improvement program and requires a second to provide support for the collections system capital program. The requirements for Information Technology related services and support continue to rise above the Department's current resource level. Many of these requirements are short-term or project oriented and can be met by augmenting permanent staff with temporary contract support. This strategy gives Information Technology the flexibility to manage its peak workloads associated with programming, analysis, project management, and hardware/software support. Further, this strategy will provide Information Technology with the temporary staff required to support the increased volume of capital project work now going into design. Funding Funding for capital improvement contract service-workers is already recognized through the particular capital project being worked on, and is budgeted by the particular capital budget process. The temporary service-worker contracts for operating requirements are budgeted within the Operating Fund. ALTERNATIVES 1) Deny the request and put certain projects on hold. 2) Hire full time regular employees on Limited Term Contracts to support a Division through a peak period. Limited term employees are regular full time employees placed on contracts with a specific end date. These employees, during the duration of their contracts, would be entitled to all benefits and provisions of regular full time employees. G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).8.doc Revised: 8120/98 Page3 CEQA FINDINGS Not applicable. ATTACHMENTS FAHR Item Number FAHR99-50 PDC Item Number PDC99-20 G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).8.doc Revised: 8120/98 p 1 Page4 FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Mike Peterman, Director of Human Resources SUBJECT: TEMPORARY EMPLOYMENT SERVICES GENERAL MANAGER'S RECOMMENDATION Meeting Date To Bel. of Dir. 6/9/99 6/26/99 Item Number Item Number FAHR99-50 17(f) 1. Award contracts for Temporary Employment Services (Specification No. P-186) to the following support staffing firms for a period of one year, renewable for a period of four years, and cancelable at any time, for a total amount not to exceed $1 million: General Agency • Apple One Technical Agencies • Principal Technical Services, Inc. -Engineering and IT Personnel • EPC Consultants, Inc. -Engineering Personnel • DOB Engineering, Inc. -Engineering Personnel • Two Roads Professional Resources, Inc. -Engineering Personnel • Project Partners -Engineering Personnel • Tek Systems -IT Personnel • Lab Support -Laboratory personnel 2. Authorize staff to enter into additional agreements with other temporary firms as they become known to District's staff, provided it is within budget guidelines. SUMMARY The District has typically had short-term, low-volume temporary staffing needs and has contracted with one or two agencies to fulfill them. However, temporary staffing utilization is increasing with additional Engineering and IT projects. Since the increase in temporary costs exceeds $100,000, Board approval is needed. Three-quarters of the District's temporary labor needs are due to the increase in capital projects for the next five years. The Engineering department has already obtained approval from the Planning and Design Committee for the increase in the temporary staffing budget and will continue to provide the PDC with regular updates. Human Resources has interviewed each company listed in the recommendation and is satisfied that they can meet administrative requirements of doing business with the District. In the General Agency category, Apple One has agreed to a 40-50% markup rate for general, clerical, and light industrial staffing. Other companies have been used G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(d).9.doc Revised: 8120/98 Page 1 in the past, but only Apple One has been able to consistently supply the District with high quality temporary employees. The technical firms work a little differently than the general temporary agencies. Instead of negotiating a markup rate up front, the Engineering and IT departments plan to put temporary staffing opportunities out to all of the qualified firms above and have them compete against each other for each assignment. Those companies who find the most qualified candidate at the lowest price will be selected on a case-by-case basis. Instead of listing out all of the requirements that the temporary staffing firms need in order to do business with the District, a copy of the District's generic temporary services contract is attached. Each company will need to sign it, or one like it, and agree to the proper insurance and employment practices. Because there may be other technical agencies we wish to use, and because the posting of the jobs will be an openly competitive process, staff is asking for the authority to enter into similar agreements with other agencies without having to return to the Board to approve each agency. PROJECT/CONTRACT COST SUMMARY Not to exceed $1 million BUDGET IMPACT ~ This item has been budgeted. (Line item: J.O. Contractual Services and Capital Improvement Budgets) D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) ADDITIONAL INFORMATION N/A ALTERNATIVES Hire additional regular, full-time employees for an indefinite period or on a contractual basis. CEQA FINDINGS N/A ATTACHMENTS Sample generic Temporary Services Contract G:\wp.dta\agenda\Board Agenda Aeports\2003 Board Agenda Reports\0703\ltem 14(d).9.doc Revised: 8120198 Page2 FAHR COMMITTEE Meeting Date To Bel. of Di r. 7-09-03 7-23-03 AGENDA REPORT Item Number Item Number FAHR03-60 14(e) Orange County Sanitation District FROM: Gary G . Streed , Director of Finance SUBJECT: ADOPTION OF RESOLUTION AUTHORIZING VARIOUS ACTIONS IN ORDER TO ISSUE SERIES 2003 CERTIFICATES OF PARTICIPATION (COPs) IN THE AMOUNT OF $280,000,000 GENERAL MANAGER'S RECOMMENDATION ADOPT RESOLUTION NO. OCSD 03-18 , A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE EX ECUTION AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION , SERIES 2003; AUTHORIZING THE EX ECUTION AND DELIVERY OF SUCH CERTIFICATES EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT-TO-EXCEED $280,000 ,000; APPROVING A NOTICE OF INTENTION TO SELL; AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL NOTICE INVITING BIDS AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH CERTIFICATES AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS . SUMMARY The FAHR Committee and the Board of Directors have previously authorized the issuance of $280 million of new Certificates of Participation and the hiring of a financing team. The independent financial advisor is Public Resources Advisory Group and the bond counsel is Orrick, Herrington & Sutcliffe. Woodruff, Spradlin & Smart, our General Counsel , has also been assisting staff . The purpose of the financing is to reimburse the District for use of reserve funds for specific projects over the past few years, and to provide a portion of the funding required for t he capital improvement program of 2003-04 and 2004-05 . None of the proceeds will be used for operations and maintenance needs . This financing is included in the 2003-04 budget. The draft documents for the financing were shared with the Directors at the FAHR Committee meeting . A similar authorizing resolution will be presented to the OCSD Financing Corporation on July 23, 2003, for final approval. A Preliminary Official Statement and a revised Financing Schedule are attached. PRIOR COMMITTEE/BOARD ACTIONS September 26, 2001: Adopt Debt Policy November 28, 2001: Select Public Resources Advisory Group as financial advisor fo r up to three years. G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(e).2003 COP.doc Revised : 06104/03 Page 1 October 22, 2002: April 23, 2003: April 23, 2003: April 23, 2003: Approve Resolution declaring District's intent to reimburse ourselves for capital outlays from a future long-term financing . (Similar Resolutions were prepared in previous years .) Direct staff to issue up to $280 million of new fixed-rate COPs . Approve Amendment 1 to Consultant Services Agreement with PRAG for a two-year period. Authorize the General Manager to negotiate and enter a Consultant Se rvices Agreement with Orrick, Herrington & Sutcliffe to provide bond counsel services . PROJECT/CONTRACT COST SUMMARY The Consultant Services Agreements with PRAG and Orrick combine to total a not-to-exceed amount of $200 ,000 . This is approximately .07% of the COP issue. These and other costs, such as printing the Official Statement, bond insurance (if any), underwriters' discount , rating agency fees and trustee 's fees will be paid from the proceeds of the borrowing . The total costs of is s uance are expected to be less than $400,000. The $280 million that is borrowed will be repaid with interest over the next 30 years . The total interest cost is expected to be less than 5.75 %, or approximately $314 million . Much of the interest cost will be offset by interest earnings while the funds are waiting to be used. The District's share of the 1 % basic levy property tax is used first to repay COPs. BUDGET IMPACT t8J This item has been budgeted. (Line item: ) D This item has been budgeted , but there are insufficient funds. D This item has not been budgeted. D Not appli c able (information item) ADDITIONAL INFORMATION The Board of Directors and the Financing Corporation will each be required to adopt separate Resolutions on July 23 , 2003 , to complete this borrowing. A draft of the District Resolution is attached to this Agenda Report. The Financing Corporation Resolution is attached to a separate Agenda Report to be considered later in the meeting . A Financing Corporation is required by the stru c ture of the COPs and was formed in April 2000 , solely to satisfy this need. The Board of Directors of the Corporation is the same as the Board of Directors of the District and the Corporation meets after an adjournment of the OCSD Board . ALTERNATIVES Do not issue new certificates of participation , but increase use r fees to fund the capital improvement program . CEQA FINDINGS N/A G:\wp.dta\agendn\Board Agenda Reports\2003 Board Agenda Reports\0703\llem 14(e).2003 COP.doc Revised : 06/04/03 Page 2 ATTACHMENTS 1. Draft Resolution of OCSD 2. Draft Preliminary Official Statement 3. Financing Schedule as of July, 2003 G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(e).2003 COP.doc Revised: 06/04/03 Page3 RESOLUTION NO. OCSD 03-18 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION, SERIES 2003, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH CERTIFICATES EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $280,000,000, APPROVING A NOTICE OF INTENTION TO SELL, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL NOTICE INVITING BIDS AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH CERTIFICATES AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS WHEREAS, the Orange County Sanitation District (the "District") desires to finance the acquisition, construction and installation of certain improvements to its wastewater system (the "Project"); WHEREAS, in order to finance the Project, the District desires to purchase the Project from the Orange County Sanitation District Financing Corporation (the "Corporation"), and the Corporation desires to sell the Project to the District, for the installment payments (the "Installment Payments") to be made by the District pursuant to an Installment Purchase Agreement (such Installment Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Installment Purchase Agreemenf'); WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to Union Bank of California, N.A., as trustee (the ''Trustee"), pursuant to a Trust Agreement among the Trustee, the Corporation and the District (such Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the ''Trust Agreemenf'); WHEREAS, in consideration of such assignment and the execution and entering into of the Trust Agreement, the Trustee will execute and deliver Orange County Sanitation District Certificates of Participation, Series 2003 (the "Certificates"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, payable under the Installment Purchase Agreement; WHEREAS, the District has determined that securing the timely payment of the principal and interest evidenced by the Certificates by obtaining a municipal bond insurance policy with respect thereto could be economically advantageous to the District; WHEREAS, the District desires to provide for the public sale of the Certificates; WHEREAS, a form of the Notice of Intention to Sell to be published in connection with the public offering and sale of the Certificates has been prepared (such Notice of Intention to Sell, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Notice of Intention to Sell"); WHEREAS, a form of the Official Notice Inviting Bids to be distributed in connection with the public offering and sale of the Certificates has been prepared (such Official Notice Inviting Bids, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Notice Inviting Bids"); WHEREAS, a form of the Preliminary Official Statement to be distributed in connection with the public offering of the Certificates has been prepared (such Preliminary Official Statement in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Preliminary Official Statemenf'); WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12") requires that, in order to be able to purchase or sell the Certificates, the underwriter thereof must have reasonably determined that the District has undertaken in a written agreement or contract for the benefit of the holders of the Certificates to provide disclosure of certain financial information and certain material events on an ongoing basis; WHEREAS, in order to cause such requirement to be satisfied, the District desires to enter into a Continuing Disclosure Agreement with the Trustee (such Continuing Disclosure Agreement in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Continuing Disclosure Agreemenf'); WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Installment Purchase Agreement; (b) the Trust Agreement; (c) the Notice of Intention to Sell; (d) the Notice Inviting Bids; ( e) the Preliminary Official Statement; and 2 p (f) the Continuing Disclosure Agreement; WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the District is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. All of the recitals herein contained are true and correct and the Board of Directors of the District (the "Board") so finds. Section 2. The Installment Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Chair of the Board of Directors, and such other member of the Board of Directors as the Chair may designate, the General Manager of the District, the Director of Finance of the District, and such other officer of the District as the Director of Finance may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Installment Purchase Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Installment Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate principal amount of Installment Payments in excess of $280,000,000, shall not result in a true interest cost for the Installment Payments in excess of 5.75% and shall not result in a final Installment Payment later than February 1, 2033. Section 3. The Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Trust Agreement by such Authorized Officer. Section 4. The execution and delivery of Certificates evidencing principal in an aggregate amount of not to exceed $280,000,000, payable in the years and in the amounts, and evidencing principal of and interest on the Installment Payments as specified in the Trust Agreement as finally executed, are hereby authorized and approved. 3 Section 5. The form of Notice of Intention to Sell, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Notice of Intention to Sell in connection with the offering and sale of the Certificates is hereby approved. The Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to cause the Notice of Intention to Sell to be published once in The Bond Buyer (or in such other financial publication generally circulated throughout the State of California or reasonably expected to be disseminated among prospective bidders for the Certificates as an Authorized Officer shall approve as being in the best interests of the District) at least 15 days prior to the date set for the opening of bids in the Notice Inviting Bids, with such changes, insertions and omissions therein as an Authorized Officer may require or approve, such requirement or approval to be conclusively evidenced by such publishing of the Notice of Intention to Sell. Section 6. The Notice Inviting Bids, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, be and the same is hereby approved, and the use of the Notice Inviting Bids in connection with the offering and sale of the Certificates is hereby authorized and approved. The terms and conditions of the offering and sale of the Certificates shall be as specified in the Notice Inviting Bids. Bids for the purchase of the Certificates shall be received at the time and place set forth in the Notice Inviting Bids. The Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to accept the lowest bid for the Certificates, or to reject all bids therefor, in accordance with the terms of the Notice Inviting Bids. Section 7. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Certificates is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the District that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Certificates a reasonable number of copies of the Preliminary Official Statement. Section 8. The preparation and delivery of a final Official Statement (the "Official Statement"), and its use in connection with the offering and sale of the Certificates, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The 4 Authorized Officers are, and each of them is, hereby authorized and directed to execute the final Official Statement and any amendment or supplement thereto, for and in the name of the District. Section 9. The Continuing Disclosure Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Continuing Disclosure Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Continuing Disclosure Agreement by such Authorized Officer. Section 10. The Authorized Officers are each hereby authorized and directed to apply for municipal bond insurance for the Certificates and to obtain such insurance if the present value cost of such insurance is less than the present value of the estimated savings with respect to interest evidenced by the Certificates resulting from the purchase of such insurance. The Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to execute and deliver a contract for such insurance if such contract is deemed by the Authorized Officer executing the same to be in the best interests of the District, such determination to be conclusively evidenced by such Authorized Officer's execution and delivery of such contract. Section 11. The Authorized Officers are, and each of them hereby is, authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the execution and delivery of the Certificates and the transactions contemplated by the agreements or documents referenced in this Resolution. Section 12. All actions heretofore taken by the officers and employees of the District with respect to the execution, delivery and sale of the Certificates, or in connection with or related to any of the agreements or documents referenced in this Resolution, are hereby approved, confirmed and ratified. Section 13. This Resolution shall take effect immediately upon its adoption. 5 .. PASSED AND ADOPTED at a regular meeting held July 23, 2003. Chair ATTEST: Secretary APPROVED: General Counsel Orange County Sanitation District 6 STATE OF CALIFORNIA ) ) SS COUNTY OF ORANGE ) I, , Secretary of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 03-18 was passed and adopted at a regular meeting of said Board on the 23rd day of July, 2003, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District this 23rd day of July, 2003. Secretary, Board of Directors of Orange County Sanitation District OH&S 7109/03 Draft PRELIMINARY OFFICIAL STATEMENT DATED JULY_, 2003 NEW ISSUE-BOOK-ENTRY-ONLY Ratings: (See "RA TINGS" herein) In the opinion of Orrick, Herrington & Sutcliffe LLP, Los Angeles, California, Special Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, the interest on the Installment Payments paid by the District under the Installment Purchase Agreement and received by the owners of the Certificates is excluded from gross income for federal income tax purposes under Section 103 of the Imernal Revenue Code of 1986 and is exempt from State of California personal income taxes. Jn the further opinion of Special Counsel, such interest is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Special Counsel observes that such interest is included in adjusted current earnings when calculating corporate alternative minimum taxable income. Special Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest evidenced by, the Certificates. See "TAX MATTERS" herein. Dated: Date of Delivery $280,000,000* ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION, SERIES 2003 Due: February 1, as shown below The Certificates evidence direct, fractional undivided interests of the Owners thereof in the installment payments (the "Installment Payments"), and the interest thereon, to be made by the Orange County Sanitation District (the "District") pursuant to the Installment Purchase Agreement, dated as of July l, 2003 (the "Installment Purchase Agreement"), by and between the District and the Orange County Sanitation District Financing Corporation (the "Corporation"). Pursuant to the Master Agreement for District Obligations, dated as of August l, 2000 (the "Master Agreement"), by and between the District and the Corporation, the District has established conditions and terms upon which obligations such as the Installment Payments and the interest thereon, will be incurred and secured. Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues (as more fully described in the Master Agreement, the "Net Revenues") as provided in the Installment Purchase Agreement, consisting primarily of all income and revenue received by the District from the operation or ownership of the Districfs Wastewater System (the "Wastewater System") remaining after payment of Maintenance and Operation Costs, as further described in "SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES" herein. The Installment Purchase Agreement provides that the obligation of the District to pay the Installment Payments, and payments of interest thereon, and certain other payments required to be made in accordance with the Installment Purchase Agreement, solely from Net Revenues, is absolute and unconditional. See "SECURITY AND SOURCES OF PAYMENT" herein. The proceeds of the Certificates will be used to (i) finance the acquisition, construction and installation of certain improvements to its Wastewater System (the "Project") (ii) fund a reserve fund for the Certificates, and (iii) pay the costs incurred in connection with the execution and delivery of the Certificates. See "PLAN OF FINANCE" herein. Interest evidenced by the Certificates is payable semiannually on February 1 and August 1 of each year, commencing on February l, 2004. See "THE CERTIFICATES" herein. The Certificates will be initially delivered only in book-entry form and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("OTC"), which will act as securities depository for the Certificates. Individual purchases of the Certificates will be made in book-entry form only. Purchasers of Certificates will not receive physical certificates representing their ownership interests in the Certificates purchased. The Certificates will be delivered in denominations of $5,000 and any integral multiple thereof. Payments of principal and interest evidenced by the Certificates are payable directly to DTC by Union Bank of California, N.A., as trustee. Upon receipt of payments of such principal and interest, DTC will in tum distribute such payments to the beneficial owners of the Certificates. See APPENDIX D -"BOOK-ENTRY-ONLY SYSTEM" herein. The Certificates are subject to prepayment prior to maturity, as described herein. See "THE CERTIFICATES" herein. The successful bidder may purchase municipal bond insurance, if available, for some or all of the Certificates. The bidder may elect to insure all, a portion of or none of the Certificates at the time the Certificates are initially executed and delivered. If the successful bidder, as Initial Purchaser, elects to insure any portion of the Certificates. THE OBLIGATION OF THE DISTRICT TO PAY THE INSTALLMENT PAYMENTS, AND THE INTEREST THEREON, AND OTHER * Preliminary, subject to change. DOCSLAI :446982.6 41758-8 GHI PAYMENTS REQUIRED TO BE MADE BY IT UNDER THE INSTALLMENT PuRCHASE AGREEMENT IS A SPECIAL OBLIGATION OF THE DISTRICT PAYABLE, IN THE MANNER PROVIDED IN THE INSTALLMENT PURCHASE AGREEMENT, SOLELY FROM NET REVENUES AND OTHER RJNDS PROVIDED FOR IN THE INSTALLMENT PURCHASE AGREEMENT, AND DOES NOT CONSTITUTE A DEBT OF THE DISTRICT OR OF THE STATE OF • CALIFORNIA, OR OF ANY POLmCAL SUBDIVISION THEREOF, IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT OR THE STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE INSTALLMENT PAYMENTS, OR THE INTEREST THEREON, OR OTHER PAYMENTS REQUIRED TO BE MADE UNDER THE INSTALLMENT PURCHASE AGREEMENT. SEE "SECURITY AND SOURCES OF PAYMENT" HEREIN. Maturity (February 1) Principal Amount Interest Rate MATURITY SCHEDULE $ _____ Serial Certificates Price or Yield Maturity (February 1) Principal Amount Interest Rate $ ______ % Term Certificates Due February l, 20_ Yield -__ % Price or Yield This cover page contains information intended for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Capitalized terms used in this cover page shall have the meanings given such terms herein. An investment in the Certificates involves certain risks. See "RISK FACTORS" herein for a discussion of factors that should be considered in addition to the other matters set forth herein, in evaluating the investment quality of the Certificates. The Certificates will be sold by competitive sale on or about August _, 2003 pursuant to the Official Notice Inviting Bids and Bid Form dated August_, 2003. See APPENDIX F -"OFFICIAL NOTICE INVITING BIDS AND BID FORM" attached hereto. For additional information concerning the competitive sale of the Certificates, contact the District's financial advisor, Public Resources Advisory Group, Los Angeles, California. The Certificates are offered when, as and if executed and delivered and received by the Initial Purchaser, subject to the approval by Orrick, Herrington & Sutcliffe LLP, Los Angeles, California, Special Counsel, and certain other conditions. Certain legal matters will be passed upon for the District and the Corporation by Woodruff, Spradlin & Smart, a Professional Corporation, Orange, California. It is anticipated that the Certificates in definitive form will be available for delivery to DTC in New York, New York on or about August_, 2003. BIDS TO BE RECEIVED 9:00 A.M. CALIFORNIA TIME ON AUGUST_, 2003 See APPENDIX F-"OFFICIAL NOTICE INVITING BIDS AND BID FORM" attached hereto. Dated: August _, 2003 DOCSLAI :446982.6 41758-8 GHI .L::>ra.LSICT HH.L tlO cIVW IHD 8-S~llt 9·c:s69tt= IYis=>oa ORANGE COUNTY SANITATION DISTRICT, CALIFORNIA Board of Directors Shirley McCracken, Chair -Anaheim Steve Anderson, Vice-Chair -La Habra Roy Moore -Brea Carolyn Cavecche -Orange Norman Z. Eckenrode -Placentia Alberta Christy -Santa Ana Patricia Campbell -Seal Beach Brian Donahue -Stanton Patsy Marshall -Buena Park Anna L. Piercy -Cypress John Collins -Fountain Valley Don Bankhead -Fullerton Tony Kawashima -Tustin Robert McGowan -Villa Park Michael Duvall -Yorba Linda Bill Dalton -Garden Grove Debbie Cook -Huntington Beach Beth Krom -Irvine James M. Ferryman-Costa Mesa Sanitary District Joy L. Neugebauer -Midway City Sanitary District Brian J. Brady -Irvine Ranch Water District Paul Walker -La Palma Alice B. Jempsa -Los Alamitos Tod Ridgeway -Newport Beach Jim Silva -Member of the Orange County Board of Supervisors DOCSLAl :446982.6 41758-8 GHI Executive Management of the District Blake P. Anderson, General Manager Gary G. Streed, Director of Finance David A. Ludwin, Director of Engineering Robert P. Ghirelli, PhD., Director of Technical Services Robert Ooten, Director of Operations & Maintenance Patrick B. Miles, Director of lnfonnation Technology Lisa M. Tomko, Director of Human Resources Greg R. Mathews, Administrative Services Manager Carol T. Beekman, Communications Services Manager Special Services Special Counsel Orrick, Herrington & Sutcliffe LLP Los Angeles, California District General Counsel Thomas L. Woodruff, Esq. Woodruff, Spradlin & Smart, a Professional Corporation Orange, California Financial Advisor Public Resources Advisory Group Los Angeles, California Trustee Union Bank of California, N .A. This Official Statement does not constitute an off er to sell or the solicitation of an offer to buy nor shall there be any sale of the Certificates by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. The information set forth herein has been provided by the District and other sources that are believed by the District to be reliable. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement. If given or made, such other information or representations must not be relied upon as having been authorized by the District, the Corporation or the Initial Purchaser in connection with any reoffering. This Official Statement is not to be construed as a contract with the purchasers of the Certificates. Statements contained in this Official Statement which involve estimates, projections, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of facts. The information and expressions of opinion herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or the Corporation since the date hereof. This Official Statement is submitted with respect to the sale of the Certificates referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the District. All summaries of the documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions. Preparation of this Official Statement and its distribution have been duly authorized and approved by the District and the Corporation. In connection with the offering of the Certificates, the Initial Purchaser in connection with any reoffering may over-allot or effect transactions which stabilize or maintain the market price of the Certificates at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Initial Purchaser in connection with any reoffering may offer and sell the Certificates to certain dealers, institutional investors and others at prices lower than the public offering prices stated on the cover page hereof and such public offering prices may be changed from time to time by the Initial Purchaser. DOCS LAI :446982.6 41758-8 GHI TABLE OF CONTENTS Page INTRODUCTION ....................................................................................................................................... 1 General ................................................................................. : ......................................................... 1 The District ..................................................................................................................................... 2 Security and Sources of Payment for the Certificates ..................................................................... 2 Continuing Disclosure .................................................................................................................... 3 Miscellaneous ................................................................................................................................. 3 PLAN OFFINANCE ................................................................................................................................... 3 ESTIMATED SOURCES AND USES OF PROCEEDS OF THE CERTIFICATES ................................ .4 THE CERTIFICATES ................................................................................................................................. 4 General ........................................................................................................................................... 4 Prepayment Provisions .................................................................................................................... 5 SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES ............................................. 7 Installment Payments ...................................................................................................................... 7 Net Revenues .................................................................................................................................. 8 Rate Stabilization Account ............................................................................................................. 9 Allocation of Revenues ................................................................................................................. 10 Rate Covenant ............................................................................................................................... 10 Reserve Fund ................................................................................................................................ 11 Limitations on Issuance of Additional Obligations ...................................................................... 11 Insurance ....................................................................................................................................... 13 Allocation of Installment Payments .............................................................................................. 13 THE DISTRICT ......................................................................................................................................... 15 Background ................................................................................................................................... 15 Organization and Administration .................................................................................................. 15 Services ......................................................................................................................................... 16 Service Area .................................................................................................................................. 17 Employees ..................................................................................................................................... 18 Risk Management ......................................................................................................................... 18 Existing Facilities ......................................................................................................................... 18 Permits, Licenses and Other Regulations ..................................................................................... 20 Capital Improvement Program ...................................................................................................... 21 Groundwater Replenishment System ............................................................................................ 23 DOCSLAl :446982.6 41758-8 GHl -i- TABLE OF CONTENTS (continued) Page Preferred Level of Treatment ........................................................................................................ 24 Biosolids Management .................................................................................................................. 24 Urban Runoff ................................................................................................................................ 25 Integrated Emergency Response Program .................................................................................... 25 DISTRICT REVENUES ............................................................................................................................ 26 Sewer Service Charges ................................................................................................................. 26 Additional Revenues ..................................................................................................................... 29 Wastewater Treatment History ..................................................................................................... 30 Customers ..................................................................................................................................... 30 Assessed Valuation ....................................................................................................................... 32 Tax Levies and Delinquencies ...................................................................................................... 33 Budgetary Process ......................................................................................................................... 34 Reserves ........................................................................................................................................ 35 Summary of Operating Data ......................................................................................................... 36 Projected Operating Data .............................................................................................................. 37 Management's Discussion and Analysis of Operating Data ......................................................... 38 Investment of District Funds ......................................................................................................... 39 FINANCIAL OBLIGATIONS .................................................................................................................. 41 Existing Indebtedness ................................................................................................................... 41 Anticipated Financings ................................................................................................................. 43 Direct and Overlapping Bonded Debt ........................................................................................... 44 THE CORPORATION .............................................................................................................................. 45 LIMITATIONS ON TAXES AND REVENUES ...................................................................................... 46 Article XIIIA of the California Constitution ................................................................................. 46 Legislation Implementing Article XIIIA ...................................................................................... 47 Article XIlIB of the California Constitution ................................................................................. 47 Proposition 62 ............................................................................................................................... 48 Article XIIIC and Article XIIID of the Calif omia Constitution .................................................. .48 LEGAL MATTERS ................................................................................................................................... 50 FINANCIAL ADVISOR ........................................................................................................................... 50 ABSENCE OF LITIGATION ................................................................................................................... 50 FINANCIAL ST A TEMENTS ................................................................................................................... 51 DOCSLAI :446982.6 41758-8 OHi -ii- TABLE OF CONTENTS (continued) Page T ,AX,. MA TTERS ........................................................................................................................................ 51 CONTIN"UING DISCLOSURE ................................................................................................................. 52 RATINGS ......................................................................................................................................... 53 PURCHASE AND REOFFERIN"G ........................................................................................................... 53 MISCELLANEOUS .................................................................................................................................. 53 APPENDIX A COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30, 2002 ............................................................................................................................... A-1 APPENDIX B THE COUNTY OF ORANGE-ECONOMIC AND DEMOGRAPHIC INFORMATION ........................................................................................................... B-1 APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS ................................................ C-1 APPENDIX D BOOK-ENTRY ONLY SYSTEM ................................................................................. D-1 APPENDIX E FORM OF APPROVING OPINION OF SPECIAL COUNSEL ................................... E-1 APPENDIX F OFFICIAL NOTICE INVITING BIDS AND BID FORM ............................................ F-1 DOCSLAl :446982.6 41758-8 GHl -iii- OFFICIAL STATEMENT $280,000,000* ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION, SERIES 2003 INTRODUCTION This introduction contains only a brief summary of certain of the terms of the Certificates being offered and a brief description of the Official Statement. All statements contained in this introduction are qualified in their entirety by reference to the entire Official Statement. References to, and summaries of, provisions of the Constitution and laws of the State of California (the "State") and any documents ref erred to herein do not purport to be complete and such references are qualified in their entirety by reference to the complete provisions. All capitalized terms used in this Official Statement and not otherwise defined herein have the meanings set forth in the Trust Agreement, the Installment Purchase Agreement and the Master Agreement. See APPENDIX C -"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Definitions" herein. General This Official Statement, including the cover page and all appendices hereto, provides certain information concerning the sale and delivery of $280,000,000"' aggregate principal amount of the Orange County Sanitation District Certificates of Participation, Series 2003 (the "Certificates") evidencing direct, fractional undivided interests in the Installment Payments (the "Installment Payments") and the interest thereon, to be made by the Orange County Sanitation District (the "District") pursuant to the Installment Purchase Agreement, dated as of July 1, 2003 (the "Installment Purchase Agreement"), to be entered into by and between the District and the Orange County Sanitation District Financing Corporation (the "Corporation"). Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement"), by and between the District and the Corporation, the District has established and declared the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon, will be incurred and secured. Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues (as defined hereinafter) as provided in the Installment Purchase Agreement, consisting primarily of all income and revenue received by the District from the operation or ownership of the District's Wastewater System (the "Wastewater System") remaining after payment of Maintenance and Operation Costs, as further described in "SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES" herein. The Certificates are to be executed and delivered pursuant to a Trust Agreement, dated as of July 1, 2003 (the "Trust Agreement"), among the District, the Corporation and Union Bank of California, N.A., as trustee (the "Trustee"). Proceeds from the sale of the Certificates will be used to (i) finance the acquisition, construction and installation of certain improvements to its Wastewater System (the "Project") (ii) fund a reserve fund for the Certificates, and (iii) pay the costs incurred in connection with the execution and delivery of the Certificates. See "PLAN OF FINANCE" herein. The Certificates will be executed and delivered in the form of fully registered certificates, dated as of the date of initial delivery thereof and will mature on February 1 in each year as set forth on the cover page hereof. Interest evidenced by the Certificates is payable semiannually on February 1 and August 1 of each year, commencing on February 1, 2004. See "THE CERTIFICATES" herein. The Certificates will be initially delivered only in book-entry form and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Certificates. The Certificates will be delivered in denominations of $5,000 and any integral multiple * Preliminary, subject to change. DOCSLAl :446982.6 41758-8 GHI thereof. So long as the Certificates are in the DTC book-entry system, the interest, principal, purchase price and prepayment premiums, if any, due with respect to the Certificates will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in tum, will make payments pursuant to its procedures as described under APPENDIX D -"BOOK -ENTRY SYSTEM" herein. The District The District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United States. The District provides service to approximately 2.3 million people in the northern and central portion of the County of Orange (the "County"), in a service area of approximately 471 square miles, treating 240 million gallons per day ("mg/d") of wastewater. See ''THE DISTRICT," "DISTRICT REVENUES" AND "FINANCIAL OBLIGATIONS" herein. Security and Sources of Payment for the Certificates The Certificates evidence direct, fractional undivided interests in the Installment Payments, and the interest thereon, paid by the District pursuant to the Installment Purchase Agreement. The obligation of the District to pay the Installment Payments and the interest thereon and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided under the Installment Purchase Agreement, solely from Net Revenues, and other funds as provided in the Installment Purchase Agreement. Net Revenues generally consist of all income and revenue received by the District from the operation or ownership of the Wastewater System remaining after payment of Maintenance and Operation Costs, all as further provided in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. Currently the District has Senior Obligations Outstanding, evidenced by three series of certificates of participation and related interest rate swap agreements, payable on a parity with the Installment Payments under the Installment Purchase Agreement. The three swap agreements were executed by the predecessor special districts in connection with the execution and delivery of certain Outstanding Senior Certificates. The payments under these swap agreements are payable on a parity with the Installment Payments under the Installment Purchase Agreement and other Senior Obligations, as provided in the Master Agreement. See "FINANCIAL OBLIGATIONS -Existing Indebtedness" herein and APPENDIX C -"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Master Agreement" attached hereto. The term "Existing Senior Obligations" as used in this Official Statement refers to the 1992 Agreement for Acquisition and Construction (defined herein), the 1992 Swap (defined herein), the 1993 Agreement for Acquisition and Construction (defined herein), the 1993 Swap (defined herein), the 2000 Installment Purchase Agreement (defined herein) and the 2000 Swap (defined herein) and the term "Senior Obligations" as used in this Official Statement refers to the Existing Senior Obligations and any additional Senior Obligations payable on a parity basis to the Installment Payments as provided in the Master Agreement. Senior Obligations, together with any Subordinate Obligations payable on a subordinate basis to the Installment Payments executed and delivered as provided in the Master Agreement are referred to collectively as the "Obligations." Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix, prescribe and collect fees and charges for the services and facilities of the Wastewater System which will be at least sufficient to yield during each Fiscal Year (a) Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year and (b) Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the fees and DOCSLAI :446982.6 41758-8 GHI -2- charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. See "SECURITY AND SOURCE OF PAYMENT FOR THE CERTIFICATES -Rate Covenant" herein. The obligation of the District to pay the Installment Payments and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase Agreement, and does not constitute a debt of the District or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District or the State or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made under the Installment Purchase Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. See "SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES" herein. Continuing Disclosure The District has covenanted for the benefit of holders and beneficial owners of the Certificates (a) to provide certain financial information and operating data (the "Annual Report") relating to the District and the property in the District not later than eight (8) months after the end of the District's Fiscal Year (which currently would be March l), commencing with the report for the 2002-03 Fiscal Year, and (b) to provide notices of the occurrence of certain enumerated events, if material. The specific nature of the information to be contained in the Annual Report or the notices of material events is set forth in the Continuing Disclosure Agreement. See "CONTINUING DISCLOSURE" and APPENDIX C -"FORM OF CONTINUING DISCLOSURE AGREEMENT." Miscellaneous The descriptions herein of the Trust Agreement, the Master Agreement, the Installment Purchase Agreement and any other agreements relating to the Certificates are qualified in their entirety by reference to such documents. Copies of the documents are on file and available for inspection at the corporate trust office of the Trustee at 120 S. San Pedro Street, Suite 400, Los Angeles, California 90012. All capitalized terms used in this Official Statement and not otherwise defined herein have the same meanings as in the Trust Agreement, the Master Agreement and the Installment Purchase Agreement. See APPENDIX C-"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS-Definitions" for definitions of certain words and terms used but not otherwise defined herein. PLAN OF FINANCE Proceeds from the sale of the Certificates will be used to (i) finance the acquisition, construction and installation of certain improvements to the Wastewater System (the "Project"), (ii) fund a reserve fund for the Certificates, and (iii) pay costs of issuance of the Certificates. See "FINANCIAL OBLIGATIONS -Existing Indebtedness" herein for additional information regarding the Outstanding Senior Obligations. [TO COME] DOCSLAI :446982.6 41758-8 GHI -3- ESTIMATED SOURCES AND USES OF PROCEEDS OF THE CERTIFICATES Sources Certificate Proceeds Net Original Issuance Premium Total Sources Acquisition Fund Reserve Fund Costs of Issuance0 > Total Uses <1> Costs of issuance include, among other things, fees of rating agencies, initial fees of the Trustee and Special Counsel fees. THE CERTIFICATES General The Certificates will be prepared in the form of fully registered certificates in denominations of $5,000 and any integral multiple thereof. The Certificates will be dated as of the date of initial delivery thereof and will mature on February I in each year as set forth on the cover page hereof. Interest evidenced by the Certificates is payable semiannually on February 1 and August 1 of each year, commencing on February l, 2004. See "THE CERTIFICATES" herein. The Certificates will be initially delivered only in book-entry form and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Certificates. Individual purchases of the Certificates will be made in book-entry form only. Purchasers of Certificates will not receive physical certificates representing their ownership interests in the Certificates purchased. The interest evidenced by the Certificates shall be payable on each Interest Payment Date to and including their respective Principal Payment Dates or prepayment prior thereto, and shall represent the sum of the interest on the Installment Payments coming due on the Interest Payment Dates in each year. The principal evidenced by the Certificates shall be payable on their respective Principal Payment Dates and Mandatory Sinking Account Payment Dates in each year and shall represent the Installment Payments coming due on the Principal Payment Dates and Mandatory Sinking Account Payment Dates in each year. Each Certificate shall evidence interest from the Interest Payment Date next preceding its date of execution to which interest has been paid in full, unless such date of execution shall be after a Record Date and on or prior to the following Interest Payment Date, in which case such Certificate shall evidence interest from such Interest Payment Date, or unless such date of execution shall be on or prior to January 15, 2004, in which case such Certificate shall represent interest from its date of initial delivery. Notwithstanding, the foregoing, if, as shown by the records of the Trustee, interest evidenced by the Certificates shall be in default, each Certificate shall evidence interest from the last Interest Payment Date to which such interest has been paid in full or duly provided for. Interest evidenced by the Certificates shall be computed on the basis of a 360-day year consisting of twelve 30-day months. See APPENDIX C -"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS-TRUST AGREEMENT." Payments of principal and interest evidenced by the Certificates are payable directly to DTC by Union Bank of California, N.A., as trustee. Upon receipt of payments of such principal and interest, DTC will in tum distribute such payments to the beneficial owners of the Certificates. So long as the DOCSLAI :446982.6 41758-8 GHI -4- Certificates are in the DTC book-entry system, the interest, principal, purchase price and prepayment premiums, if any, due with respect to the Certificates will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in turn, will make payments pursuant to its procedures as described under APPENDIX D -"BOOK -ENTRY SYSTEM" herein. So long as the Certificates are in the DTC book- entry system, the interest, principal and prepayment premiums, if any, due with respect to the Certificates will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in tum, will make payments pursuant to its procedures as described under APPENDIX D-"BOOK-ENTRY SYSTEM" herein. Prepayment Provisions Optional Prepayment. The Certificates with stated Principal Payment Dates prior to February 1, 20_ are not subject to optional prepayment prior to their stated Principal Payment Dates. The Certificates with stated Principal Payment Dates on or after February 1, 20_ are subject to optional prepayment prior to their stated Principal Payment Dates, on any date on or after February l, 20_, in whole or in part, in Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to the Installment Purchase Agreement or from any other source of available funds, any such prepayment to be at a price equal to the principal evidenced by the Certificates to be prepaid, plus accrued interest evidenced thereby to the date fixed for prepayment. Mandatory Sinking Account Prepayment.* The Certificates with a stated Principal Payment Date of February l, 20_ are subject to prepayment prior to their stated Principal Payment Date, in part, from Mandatory Sinking Account Payments, on each February 1 specified below, at a prepayment price equal to the principal evidenced thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. The principal evidenced by such Certificates to be so prepaid and the dates therefor will be as follows: * Date (February 1) 2o_t Stated Principal Payment Date. Mandatory Sinking Fund Amount Date (February 1) Mandatory Sinking Fund Amount The Certificates with a stated Principal Payment Date of February l, 20_ are subject to prepayment prior to their stated Principal Payment Date, in part, from Mandatory Sinking Account Payments, on each February 1 specified below, at a prepayment price equal to the principal evidenced * Preliminary, subject to change. DOCSLAI :446982.6 41758-8 GHI -5- thereby, plus accrued interest evidenced thereby to the date fixed for prepayment, without premium. The principal evidenced by such Certificates to be so prepaid and the dates therefor will be as follows: Date (February 1) 2o_t t Stated Principal Payment Date. Mandatory Sinking Fund Amount Date (February 1) Mandatory Sinking Fund Amount The amount of each such prepayment shall be reduced in the event and to the extent that Installment Payments payable on the corresponding Installment Payment Date are prepaid from any source of funds available to the District pursuant to the Installment Purchase Agreement, and applied to the prepayment of Certificates with a stated Principal Payment Date of February 1, 20_. Selection of Certificates for Prepayment. Whenever less than all the Outstanding Certificates are to be prepaid on any one date pursuant to provisions of the Trust Agreement with respect to optional prepayment of Certificates, the Trustee shall select the Certificates to be prepaid among Certificates with different Principal Payment Dates as directed in a Written Request of the District. Whenever less than all the Outstanding Certificates with the same stated Principal Payment Date are to be prepaid on any one date in accordance with the Trust Agreement, the Trustee shall select the Certificates with such Principal Payment Date to be prepaid by lot in any manner that the Trustee deems fair and appropriate, which decision shall be final and binding upon the District and the Owners. The Trustee shall promptly notify the District in writing of the numbers of the Certificates so selected for prepayment on such date. For purposes of such selection, any Certificate may be prepaid in part in Authorized Denominations. Notice of Prepayment. When prepayment of Certificates is authorized pursuant to the Trust Agreement, the Trustee shall give notice, at the expense of the District, of the prepayment of the Certificates. The notice of prepayment shall specify (a) the Certificates or designated portions thereof (in the case of prepayment of the Certificates in part but not in whole) which are to be prepaid, (b) the date of prepayment, ( c) the place or places where the prepayment will be made, including the name and address of any paying agent, ( d) the prepayment price, ( e) the CU SIP numbers assigned to the Certificates to be prepaid, (f) the numbers of the Certificates to be prepaid in whole or in part and, in the case of any Certificate to be prepaid in part only, the principal evidenced by such Certificate to be prepaid, and (g) the interest rate and stated Principal Payment Date of each Certificate to be prepaid in whole or in part. Such notice of prepayment shall further state that on the specified date there shall become due and payable upon each Certificate or portion thereof being prepaid the prepayment price and that from and after such date interest evidenced thereby shall cease to accrue and be payable. With respect to any notice of optional prepayment of Certificates, unless at the time such notice is given the Certificates to be prepaid DOCSLAl :446982.6 41758-8 GHl -6- shall be deemed to have been paid within the meaning of the Trust Agreement, such notice shall state that such prepayment is conditional upon receipt by the Trustee, on or prior to the date fixed for such prepayment, of moneys sufficient to pay for the prepayment price of the Certificates to be prepaid, and that if such moneys shall not have been so received said notice shall be of no force and effect and the District shall not be required to prepay such Certificates. In the event a notice of prepayment of Certificates contains such a condition and such moneys are not so received, the prepayment of Certificates as described in the conditional notice of prepayment shall not be made and the Trustee shall, within a reasonable time after the date on which such prepayment was to occur, give notice to the persons and in the manner in which the notice of prepayment was given, that such moneys were not so received and that there shall be no prepayment of Certificates pursuant to such notice of prepayment. The Trustee shall, at least 30 but not more than 60 days prior to any prepayment date, give notice of prepayment to the respective Owners of Certificates designated for prepayment by first-class mail, postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as of the close of business on the day before such notice of prepayment is given. The actual receipt by the Owner of any notice of such prepayment shall not be a condition precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the prepayment of such Certificates or the cessation of interest evidenced thereby on the date fixed for prepayment. Effect of Prepayment. If notice of prepayment has been duly given as aforesaid and moneys for the payment of the prepayment price of the Certificates to be prepaid are held by the Trustee, then on the prepayment date designated in such notice, the Certificates so called for prepayment shall become payable at the prepayment price specified in such notice; and from and after the date so designated, interest evidenced by the Certificates so called for prepayment shall cease to accrue, such Certificates shall cease to be entitled to any benefit or security hereunder and the Owners of such Certificates shall have no rights in respect thereof except to receive payment of the prepayment price thereof. The Trustee shall, upon surrender for payment of any of the Certificates to be prepaid, pay such Certificates at the prepayment price thereof, and such moneys shall be pledged to such payment. All Certificates prepaid pursuant to the provisions of the Trust Agreement shall be canceled by the Trustee and shall not be redelivered. SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES Installment Payments Pursuant to the Installment Purchase Agreement, the Project will be acquired by the District from the Corporation. The District has covenanted to, subject to any rights of prepayment under the Installment Purchase Agreement, pay to the Corporation, solely from Net Revenues and from no other sources, the Purchase Price in Installment Payments, with interest thereon, as provided in the Installment Purchase Agreement. Pursuant to the Master Agreement, the District has established and declared the conditions and terms upon which obligations such as the Installment Purchase Agreement, and the Installment Payments and the interest thereon payable under the Installment Purchase Agreement, will be incurred and secured. The obligation of the District to make the Installment Payments, and payments of interest thereon, and other payments required to be made by it under the Installment Purchase Agreement, solely from Net Revenues, is absolute and unconditional, and until such time as the Installment Payments, payments of interest thereon, and such other payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to the Installment Purchase Agreement), the District has covenanted that it will not discontinue or suspend any Installment Payments when due, whether or not the Project or any part thereof is operating or operable or has been completed, or its use is suspended, DOCSLAI :446982.6 41758-8 GHI -7- interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments, payments of interest thereon, and other payments shall not be subject to reduction whether off set or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement or any cause whatsoever. The District's obligation to make Installment Payments from Net Revenues is on a parity with the District's obligation to make payments with respect to its Outstanding Senior Obligations. See"-Net Revenues" below. Pursuant to the Trust Agreement, the Corporation has assigned to the Trustee for the benefit of the Owners of the Certificates substantially all of its rights, title and interest in the Installment Purchase Agreement, including its right to receive Installment Payments and the interest thereon. Currently the District has Senior Obligations Outstanding, evidenced by three series of certificates of participation and related interest rate swap agreements, payable on a parity with the Installment Payments under the Installment Purchase Agreement. The three swap agreements were executed by the predecessor special districts in connection with the execution and delivery of certain Outstanding Senior Certificates. The payments under these swap agreements are payable on a parity with the Installment Payments under the Installment Purchase Agreement and other Senior Obligations, as provided in the Master Agreement. See "FINANCIAL OBLIGATIONS -Existing Indebtedness" herein and APPENDIX C -"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Master Agreement" attached hereto. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement and Master Agreement, is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase Agreement, and does not constitute a debt of the District, the State or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District, the State or any political subdivision thereof, is pledged to the payment of the Installment Payments, or the interest thereon, or other payments required to be made under the Installment Purchase Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. See "SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES" herein. Net Revenues The District is obligated to make Installment Payments solely from Net Revenues as provided in the Master Agreement, which consist of Revenues remaining after payment of costs paid by the District for maintaining and operating the Wastewater System ("Maintenance and Operation Costs"). Revenues are defined in the Master Agreement to mean, for any period, all income and revenue received by the District during such period from the operation or ownership of the Wastewater System, determined in accordance with generally accepted accounting principles, including all fees and charges received during such period for the services of the Wastewater System, investment income received during such period (but only to the extent that such investment income is generally available to pay costs with respect to the Wastewater System, including Maintenance and Operation Costs), Net Proceeds of business interruption insurance received during such period, ad valorem taxes received during such period, payments under the Agreement Acquiring Ownership Interests, Assigning Rights and Establishing Obligations, entered into on February 13, 1986, and amendment No. I thereto dated December 10, 1986, by and between predecessor County Sanitation District No. 14 of Orange County and the Irvine Ranch Water District (the "IRWD Agreement") received during such period and all other money received during such period howsoever derived by the District from the operation or ownership of the Wastewater System or arising from the Wastewater System (including any standby or availability charges), but excluding (a) Capital Facilities Capacity Charges, (b) payments received under Financial Contracts, and ( c) refundable deposits DOCSLAI :446982.6 41758-8 GHI -8- made to establish credit and advances or contributions in aid of construction (which, for purposes of the Master Agreement, shall not include payments under the IRWD Agreement); provided, however, that (i) Revenues shall be increased by the amounts, if any, transferred during such period from the Rate Stabilization Account to the Revenue Account and shall be decreased by the amounts, if any, transferred during such period from the Revenue Account to the Rate Stabilization Account, and (ii) Revenues shall include Capital Facilities Capacity Charges collected during such period to the extent that such Capital Facilities Capacity Charges could be properly expended on a Capital Facilities Capacity Charge Eligible Project for which the proceeds of Subject Obligations were used or are available to be used. See "DISTRICT REVENUES -Additional Revenues" herein. The District's obligation to make the Installment Payments from its Net Revenues is on a parity with the District's obligation to make payments with respect to its other outstanding obligations described as Senior Obligations and all Reimbursement Obligations with respect to Senior Obligations, as provided in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. Pursuant to the Master Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations, and the Net Revenues will not be used for any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This pledge constitutes a first lien on the Net Revenues for the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. The term Senior Obligations, generally means all revenue bonds or notes (including bond anticipation notes and commercial paper) of the District authorized, executed, issued and delivered under and pursuant to applicable law, the Installment Purchase Agreement and all other contracts (including financial contracts) or leases of the District authorized and executed by the District under and pursuant to applicable law, the installment, lease or other payments under which are, in accordance with the provisions of the Master Agreement, payable from Net Revenues on a parity with the payments under the Master Agreement. The District may at any time incur Subordinate Obligations; provided, however, that prior to incurring such Subordinate Obligations, the District will have determined that the incurrence thereof will not materially adversely affect the District's ability to comply with the requirements of the Master Agreement. The District may at any time incur Reimbursement Obligations with respect to Subordinate Obligations. For a description of the District's Outstanding Senior Obligations and Subordinate Obligations, see "FINANCIAL OBLIGATIONS -Existing Indebtedness" herein. The District may, in connection with the incurrence of Subordinate Obligations, pledge Net Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be junior and subordinate to the pledge of, and lien on, Net Revenues for the payment of Senior Obligations and Reimbursement Obligations with respect to Senior Obligations. Rate Stabilization Account In order to avoid fluctuations in its fees and charges of the Wastewater System, from time to time the District may deposit in the Rate Stabilization Account from Net Revenues such amounts as the District deems necessary or appropriate. From time to time, the District may also transfer moneys from the Rate Stabilization Account to the Revenue Account to be used by the District, first to pay all Maintenance and Operations Costs as and when the same shall be due and payable. In addition, any such amount transferred from the Rate Stabilization Account to the Revenue Account by the District is included as Revenues for any period, but such transferred amount is excluded from determining DOCSLAI :446982.6 41758-8 GHI -9- Operating Revenues for any period. Revenues will be decreased by the amounts, if any, transferred from the Revenue Account to the Rate Stabilization Account. There are presently no funds in the Rate Stabilization Account. Allocation of Revenues In order to carry out and effectuate the pledge of Net Revenues under the Master Agreement as described above, the District agrees and covenants that all Operating Revenues received by the District will be deposited when and as received in the Revenue Account. Additionally, amounts may, from time to time as the District deems necessary or appropriate, be transferred from the Rate Stabilization Account and deposited in the Revenue Account, as described above under"-Rate Stabilization Account." The District will pay from the Revenue Account all Maintenance and Operations Costs (including amounts reasonably required to be set aside in contingency reserves for Maintenance and Operations Costs, the payment of which is not immediately required) as and when the same shall be due and payable. After having paid, or having made provisions for the payment of, Maintenance and Operations Costs, the District shall set aside and deposit or transfer, as the case may be, from the Revenue Account such amounts at such times as provided in the Master Agreement in the following order of priority: (I) Senior Obligation Payment Account; (2) Senior Obligation Reserve Funds; (3) Subordinate Obligation Payment Account; ( 4) Subordinate Obligation Reserve Funds; and (5) Rate Stabilization Account. Amounts required or permitted to be deposited or transferred as described in items 2, 3, 4 and 5 above, shall not be so deposited or transferred unless the District shall have determined that there will be sufficient Net Revenues available to make the required deposits or transfers on the dates on which such deposits or transfers are required to be made as described above. So long as the District has determined that Net Revenues will be sufficient to make all of the deposits or transfers required to be made pursuant to items l, 2, 3, 4 and 5 above, on the dates on which such deposits or transfers are required to be made, Net Revenues on deposit in the Revenue Account may from time to time be used for any purpose for which the District funds may be legally applied. For additional information, see APPENDIX C - "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS-Master Agreement." Rate Covenant Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix, prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to yield during each Fiscal Year (a) Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year and (b) Net Operating Revenues equal to I 00% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but will not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. In addition, the District has covenanted in the Master Agreement to prepare and adopt an annual budget for the Wastewater System for each Fiscal Year. Such budget will set forth in reasonable detail the Revenues anticipated to be derived in such Fiscal Year and the expenditures anticipated to be paid or provided for therefrom in such Fiscal Year, including, without limitation, the amounts required to pay or DOCSLAI :446982.6 41758-8 GHI -10- provide for the payment of the Obligations during such Fiscal Year, the amounts required to pay or provide for the payment of Maintenance and Operations Costs during such Fiscal Year and the amounts required to pay or provide for the payment of all other claims or obligations required to be paid from Revenues in such Fiscal Year, and will show that Revenues and Net Revenues will be at least sufficient to satisfy the requirements of the Master Agreement. On or before September 1 of each Fiscal Year, the District will file with the Trustee a copy of the adopted budget for such Fiscal Year. See APPENDIX C - "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Master Agreement" for additional information. Reserve Fund The Trust Agreement provides for the funding of the Reserve Fund in an amount equal to the "Reserve Requirement," which is defined as an amount, as of any date of calculation, equal to the least of (a) 10% of the original aggregate amount of principal evidenced by the Certificates, (b) the maximum amount of remaining Installment Payments, and the interest thereon, coming due in any one Certificate Year, and (c) 125% of the average amount of remaining Installment Payments, and the interest thereon, coming due in each Certificate Year. Amounts in the Reserve Fund may be used to pay principal of and interest evidenced by the Certificates to the extent that amounts in the Principal Account and Interest Account are insufficient therefor. The Reserve Fund will be funded with a portion of the net proceeds of the Certificate in the amount of $ , which amount is sufficient to satisfy the Reserve Requirement. See "ESTIMATED SOURCES AND USES OF PROCEEDS OF THE CERTIFICATES" and APPENDIX C-"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -TRUST AGREEMENT." Limitations on Issuance of Additional Obligations Senior Obligadons. The District may at any time incur Senior Obligations in addition to the Existing Senior Obligations payable from Net Revenues as provided in the Master Agreement on a parity with all other Senior Obligations theretofore incurred but only subject to the following conditions under the Master Agreement: ( 1) Upon the incurrence of such Senior Obligations, no Event of Default shall be continuing under the Master Agreement; and (2) Subject to the provisions of the Master Agreement, the District shall have received either one of the following: DOCSLAI :446982.6 41758-8 GHI (i) A written Certificate of the District certifying that, for a 12 consecutive calendar month period during the 24 consecutive calendar month period ending in the calendar month prior to the incurrence of such Senior Obligations (which 12 consecutive calendar month period shall be specified in such certificate or certificates); (A) (B) Net Revenues, as shown by the books of the District, shall have amounted to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations, and Net Operating Revenues, as shown by the books of the District, shall have amounted to at least 100% of Maximum Annual Debt Service on all Obligations to be outstanding immediately after the incurrence of such Senior Obligations. -11- For purposes of demonstrating compliance with the foregoing, Net Revenues and Net Operating Revenues may be adjusted for (x) any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred, but which, during all or any part of such 12 consecutive calendar month period, were not in effect, (y) customers added to the Wastewater System subsequent to such 12 consecutive calendar month period but prior to the date such Senior Obligations are incurred, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations; or (i) A certificate or certificates from one or more Consultants which, when taken together, project that, for each of the two Fiscal Years next succeeding the incurrence of such Senior Obligations; (A) Net Revenues will amount to at least 125% of Maximum Annual Debt Service on all Senior Obligations to be outstanding immediately after the incurrence of such Senior Obligations, and (B) Net Operating Revenues will amount to at least 100% of Maximum Annual Debt Service on all Obligations to be outstanding immediately after the incurrence of such Senior Obligations. For purposes of demonstrating compliance with the foregoing, Net Revenues and Net Operating Revenues may be adjusted for (x) any changes in fees and charges for the services of the Wastewater System which have been adopted and are in effect on the date such Senior Obligations are incurred or will go into effect prior to the end of such two Fiscal Year period, (y) customers expected to be added to the Wastewater System prior to the end of such two Fiscal Year period, and (z) the estimated change in available Net Revenues and Net Operating Revenues which will result from the connection of existing residences or businesses to the Wastewater System within one year following completion of any project to be funded or any system to be acquired from the proceeds of such Senior Obligations. For purposes of preparing the certificate or certificates described above, the Consultant may rely upon financial statements prepared by the District that have not been subject to audit by an independent certified public accountant if audited financial statements for the period are not available. "Existing Senior Obligations" means the 1992 Agreement for Acquisition and Construction, the 1992 Swap, the 1993 Agreement for Acquisition and Construction, the 1993 Swap, the 2000 Installment Purchase Agreement and the 2000 Swap (each as defined herein) and the Installment Purchase Agreement. See "FINANCIAL OBLIGATIONS-Existing Indebtedness" herein. The provisions described above in paragraph (2) need not be complied with if the Senior Obligations being incurred are Short-Term Obligations excluded from the calculation of Assumed Debt Service pursuant to clause (H) of the definition thereof. See APPENDIX C -"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Definitions" herein. The determination of Net Revenues for use in the calculation described above is more fully described in APPENDIX C -"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Master Agreement -Senior Obligations" attached hereto. The provisions described in paragraph (2) above need not be complied with for such portion of such Senior Obligations incurred for the purpose of providing funds to refund or refinance such Obligations if (i) a portion (which may be all) of the Senior Obligations are incurred for the purpose of providing funds to refund or refinance any Obligations, (ii) upon such refunding or refinancing, debt service on such refunded or refinanced Obligations, or debt service on bonds, notes or other obligations of an entity other than the District, the debt service on which is payable DOCSLAl :446982.6 41758-8 GHl -12- from Obligation Payments for such Obligations (the "Related Bonds"), will no longer be included in the calculation of Assumed Debt Service either because such Obligations, or the Related Bonds of such Obligations, will have been paid in full or because such debt service is disregarded pursuant to clause (L) of the definition of Assumed Debt Service, and (iii) Assumed Debt Service in each Fiscal Year for the portion of such Senior Obligations incurred for the purpose of providing funds to refund or refinance such Obligations is less than or equal to 105% of Assumed Debt Service in such Fiscal Year for such Obligations being refunded or refinanced (assuming for such purposes that debt service on such refunded or refinanced Obligations, or debt service on the Related Bonds of such Obligations, is not disregarded pursuant to clause (L) of the definition of Assumed Debt Service). See APPENDIX C -"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Master Agreement" attached hereto for additional information. The District may at any time incur Reimbursement Obligations with respect to Senior Obligations. Subordinate Obligations. The District may at any time incur Subordinate Obligations upon satisfaction of the conditions provided in the Master Agreement. See APPENDIX C -"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Master Agreement" herein for a description of such conditions. Insurance The District will procure and maintain or cause to be procured and maintained casualty insurance on the Wastewater System with responsible insurers, or provide self insurance (which may be provided in the form of risk-sharing pools), in such amounts and against such risks (including accident to or destruction of the Wastewater System) as are usually covered in connection with facilities similar to the Wastewater System. The District will procure and maintain such other insurance which it shall deem advisable or necessary to protect its interests and the interests of the Corporation. See APPENDIX C - "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -Master Agreement" herein. Allocation of Installment Payments Table 1 below sets forth the Installment Payments, together with the estimated interest thereon, assuming the only prepayments made are the mandatory prepayments described under "The Certificates - Prepayment Provisions" herein. Also set forth are the payments due on Outstanding Senior Obligations. DOCSLAI :446982.6 41758-8 GHI -13- Table 1 Estimated Installment Payments of the District<•> Fiscal Outstanding Senior Year Installment Payments Obligation Payments Total Ending June30 Principal Interest Principal Interest 2004 $ $ 6,222,222.22 $11,610,000.00 $ 14,825,602.59 $ 32,657 ,824.81 2005 14,000,000.00 12,040,000.00 14,246,455 .92 40,286,455.92 2006 14,000,000.00 12,755,000.00 13,629,144.40 40,384, 144.40 2007 14,000,000.00 13,465,000.00 12,968,696.90 40,433,696.90 2008 14,000,000.00 14,265,000.00 12,268,821.90 40,533,821.90 2009 14,000,000.00 15,060,000.00 11,500,466.46 40,560,466.46 2010 14,000,000.00 16,110,000.00 10,656,484. 79 40, 766,484. 79 2011 14,000,000.00 17,065,000.00 9,758,063.54 40,823,063.54 2012 14,000,000.00 17,595,000.00 8,948,010.94 40,543,010.94 2013 14,000,000.00 18,470,000.00 8,220,979.08 40,690,979 .08 2014 14,000,000.00 33,540,000.00 7,061,808.63 54,601,808.63 2015 14,000,000.00 20,300,000.00 5,901,588.90 40,201,588.90 2016 14,000,000.00 21,100,000.00 5,118,745.48 40,218,745.48 2017 14,000,000.00 26,600,000.00 4,227,801.04 44,827,801.04 2018 14,000,000.00 23,100,000.00 3,359,039.73 40,459,039.73 2019 14,000,000.00 24,000,000.00 2,593,544.52 40,593,544.52 2020 14,000,000.00 25,000,000.00 1,797,160.96 40,797,160.96 2021 4,620,000.00 14,000,000.00 26,000,000.00 969,441.26 45,591,462.26 2022 15,235,000.00 13,769,000.00 1,400,000.00 526,313.01 30,932,335.01 2023 15,940,000.00 13,007 ,250.00 1,500,000.00 479,174.66 30,928,447.66 2024 16,785,000.00 12,210,250.00 1,500,000.00 430,424.66 30,927 ,698.66 2025 17 ,575,000.00 11,371,000.00 1,600,000.00 380,107.92 30,928,132.92 2026 18,510,000.00 10,492,250.00 1,600,000.00 328,036.30 30,932,312.30 2027 19,385,000.00 9,566,750.00 l, 700,000.00 274,397.95 30,928,174.95 2028 20,315,000.00 8,597 ,500.00 1,800,000.00 217,509.59 30,932,037.59 2029 21,290,000.00 7 ,581, 750.00 1,900,000.00 157,456.28 30,931,235.28 2030 23,230,000.00 6,517 ,250.00 1,900,000.00 95,621.23 31,744,901.23 2031 25,495,000.00 5,355, 750.00 2,000,000.00 32,232.88 32,885,013.88 2032 26, 780,000.00 4,081,000.00 30,863,032.00 2033 54,840,000.00 2,742,000.00 57 ,584,033.00 $280,000,000.00 $349,513,972.22 $364,975,000.00 $150,973, 131.54 $1,145,462,103.76 (1) Preliminary, subject to change. The figures set forth are rounded and, therefore, the totals may not add precisely. (2) Reflects combined debt service on Outstanding Senior Obligations based on a long-dated interest rate swap rate of 5.55% for the 1992 Certificates through the August 1, 2013 final maturity, a long-dated interest rate swap rate of 4.56% for the 1993 Certificates through the August l, 2016 final maturity, and an interest rate swap rate of 4.512% with respect to that portion of the Series 2000 Certificates through the August l, 2004 serial maturity, and an assumed interest rate of 3.25% thereon. See "FINANCIAL OB LI GA TIO NS -Existing Indebtedness" herein. DOCSLAl :446982.6 41758-8 OHi -14- THE DISTRICT Background The Orange County Sanitation District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United States. The District provides services to approximately 2.4 million people in the northern and central portion of the County by treating 240 mg/d of wastewater. The District serves approximately 77% of the County population in approximately 471 square miles, or 59% of the County. The service area which comprises the District was originally formed in 1954 pursuant to the County Sanitation District Act, as amended, Section 4700 et seq. of the Health and Safety Code of the State. The District's service area originally consisted of seven independent special districts in the County which were responsible for matters relating to their individual districts. These special districts were jointly responsible for the treatment and disposal facilities which they each used. The seven independent districts were successors to the Joint Outfall Sewer Organization, which was formed in 1923 among the Cities of Anaheim, Santa Ana, Fullerton, and Orange, and the sanitary districts of Placentia, Buena Park, La Habra, and Garden Grove. The Joint Outfall Sewer Organization constructed a treatment plant and outfall in the early 1920's to serve its members. It was reorganized in 1947 and 1948 into seven county sanitation districts -Districts Nos. 1, 2, 3, 5, 6, 7 and 11. These prior districts were formed based on engineers' analyses of the gravity flows in the service area. District No. 13 was formed in 1985 and District No. 14 was added in 1986. These districts were co-participants in a Joint Agreement which provided for the joint construction, ownership, and operation of the prior districts' joint facilities. In April 1998, at the request of the District's Board of Directors (the "Board"), the Board of Supervisors of Orange County (the "County Board") passed Resolution No. 98-140 approving the consolidation of the then existing nine special districts into a new, single sanitation district, to be known as the Orange County Sanitation District. This action was designed to simplify governance structures, reduce the size of the Board, ease administrative processes, streamline decision-making and consolidate accounting and auditing processes. The consolidation was effective on July l, 1998. Pursuant to the Resolution and Government Code Section 57500, the prior districts transferred and assigned all of their powers, rights, duties, obligations, functions and properties to the District, and the District assumed all obligations of the prior districts which were several and not joint including, without limitation, their obligations to repay the outstanding certificates of participation. See "FINANCIAL OB LI GA TIO NS -Existing Indebtedness" herein. The boundaries of the nine predecessor special districts were initially used by the District to delineate separate revenue areas (the "Revenue Areas") for budgeting and accounting purposes and in order to facilitate the imposition of fees and charges imposed by the District. See "DISTRICT REVENUES -Service Charges" herein. The District is managed by an administrative organization composed of a Board of Directors appointed by twenty-five member cities and agencies which are serviced by the District. The District is responsible for construction and maintenance of a major portion of the wastewater collection, treatment and disposal facilities within its boundaries. Revenue Area No. 7 is responsible for approximately 200 miles of local sewers in its service area, whereas local sanitary districts, water districts and cities are responsible for local sewers in the remainder of the District's service area. Organization and Administration The District is independent of and overlaps other formal political jurisdictions. There are many governmental entities, including the County, that operate within the District's jurisdiction. These entities DOCSLAl :446982.6 41758-8 GHI -15- are exclusively responsible for the administration of their own fiscal affairs, and the District is not entitled to operating surpluses of, or responsible for operating deficits of, any of the other entities. The twenty-five member Board of Directors is comprised of representatives from twenty-one cities, unincorporated areas of the County and three special districts, including mayors of cities, members of city councils, directors of independent special districts and one member from the County Board of Supervisors. Several board committees, made up of members of the Board of Directors, consider topics for action by the Board and make recommendations to the Board. The Chair and the Vice Chair of the Board are elected every year by a majority of the Board, and serve at the pleasure of the majority of the Board. The District has a general manager, general counsel, administrative and operating staff, with offices located at Reclamation Plant No. 1 in Fountain Valley. The District currently employs an administrative and operating staff of 540 under the direction of the General Manager, Blake P. Anderson, P.E., who has served in that capacity since May 2000. Prior to that time, Mr. Anderson served as the Assistant General Manager for five years and also served as Director of Operations, Director of Technical Services and Director of Engineering during his tenure with the District since 1980. Gary G. Streed is the District's Director of Financetrreasurer. Over the past several years, he has held various senior positions within the accounting department and served as Chief Administrative Assistant in the General Manager's office. In October 1989, Mr. Streed was appointed Director of Finance. He has been with the District since 1967. David A. Ludwin, P.E., is the District's Director of Engineering, and has been employed by the District since 1995. Robert P. Ghirelli, Ph.D., has served as Director of Technical Services for the District since 1998. Robert J. Ooten, P.E., serves as the Director of Operations and Maintenance and has served the District for seventeen years. Patrick B. Miles is the District's Director of Information Technology and joined the District in 1998. Lisa M. Tomko is the District's Director of Human Resources and has been employed by the District since 1996. Thomas L. Woodruff, Esq., of Woodruff, Spradlin & Smart, a Professional Corporation, is the District's General Counsel and has served in that capacity since 1975. Woodruff, Spradlin & Smart is located in Orange, California and provides legal services on a contractual basis. Services The District owns and operates regional wastewater collection, treatment, and disposal facilities for the metropolitan area in the northern and central portion of the County. The District receives wastewater from the collection systems of the cities, sanitary districts and unincorporated areas of the County located within the District. See ''THE DISTRICT -Service Areas" herein. Generally, local agency systems collect wastewater from residential and industrial customers and convey the wastewater to District trunk sewer pipelines for conveyance to the District's wastewater treatment plants. The District has never experienced an interruption in its services. The District's staff are responsible for operating and maintaining the District's infrastructure, although some operations are provided by external contractors. All supplies, including chemicals which are essential to the operation and maintenance of the facilities of the District, are in plentiful supply. In addition, the District has sufficient standby systems in the event of equipment failures or system outages. DOCSLAI :446982.6 41758-8 GHI -16- Service Area The map on the inside cover page of this Official Statement shows the District's boundaries and selected cities located within the District. District boundaries were originally established in 1947 and 1948 based on drainage basins. As the existing cities have grown and new areas have incorporated, city limits have come to overlap District boundaries. The District currently serves an approximately 471 square-mile area including 23 of the County's 33 cities and unincorporated areas of the County. The District serves a population of approximately 2.4 million residents and owns sanitary sewerage facilities with a replacement value of approximately $2 billion. Table 2 below sets forth the estimated populations of cities and unincorporated areas served by the District as of January 1, 2003. Table2 Estimated Populations of Cities and Unincorporated Areas Served by the Orange County Sanitation District As of January 1, 2003 City Population Anaheim 337,400 Brea 37,950 Buena Park 80,600 Costa Mesa 111,500 Cypress 47,650 Fountain Valley 56,300 Fullerton 131,500 Garden Grove 169,900 Huntington Beach 197,000 Irvine 164,900 La Habra 61,200 La Palma 15,950 Los Alamitos 11,800 Newport Beach 80,000 Orange 134,500 Placentia 49,100 Santa Ana 347,200 Seal Beach 24,900 Stanton 38,400 Tustin 69,800 Villa Park 6,200 Westminster 90,600 Yorba Linda 62.700 Cities Subtotal 2,327,050 Unincorporated Areas 81,000 Total 2,408,050 Source: State of California Department of Finance, Demographic Research Unit and Orange County Sanitation District. DOCSLAI :446982.6 41758-8 GHI -17- Employees As of June 30, 2003, the District had 540 full-time equivalent ("FfE") staff positions and 596 FTE's budgeted for Fiscal Year 2003-04. Certain employees in the District are represented by recognized employee organizations, which include the following: the Orange County Employee Association ("OCEA"), the International Union of Operating Engineers -Local 501 ("Local 501 ")and the Supervisory Professional Management Team ("SPMT"). As of July 1, 2003, represented employees were as follows: 111 positions were represented by the OCEA, 202 were represented by Local 501 and 233 were represented by SPMT. Agreements with each of these bargaining units are currently being negotiated and the District expects to enter new agreements to replace the agreements which recently expired. The OCEA has represented various bargaining units since 1979. Local 501 has represented the operations and maintenance bargaining unit since October 1985. SPMT has represented the professional and supervisory bargaining unit since 1991. For a description of the Orange County Employee's Retirement System, in which the District participates, and the District's deferred compensation plan, see Note 7 to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year Ended June 30, 2002, set forth in Appendix A. The District has no significant or unusual liabilities and costs associated with other employee benefits, such as vacation, sick leave and other post-employment benefit liabilities. Risk Management As of July I, 2003, the District has in force basic all risk property and casualty insurance, including theft, fire, flood, and boiler and machinery losses to the Wastewater System and in addition maintains business interruption insurance for $100 million. The District is self-insured for portions of workers' compensation, property damage and general liability. The self-insured portion for property damage covering fire and other disasters is $25,000 per occurrence or 5% per unit of insurance with outside excess insurance coverage to $750 million. The self-insured portion for property damage covering flood is $100,000 or 5% per unit of insurance with outside insurance coverage to $300 million. The District maintains outside comprehensive boiler and machinery insurance with a $100 million per occurrence combined limit with deductibles ranging from $25,000 to $100,000. The policy includes a $2 million aggregate sublimit for earthquake resultant damage to cover equipment. The self-insured portion of workers' compensation is $500,000 per person per occurrence with outside excess insurance coverage to $50 million. The District is self-insured for general liability to $250,000, with outside coverage up to $25 million loss per occurrence and annual aggregate. For more information regarding the District's insurance coverage as of June 30, 2002, see Note 1 to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year Ended June 30, 2002 set forth in Appendix A. Existing Facilities The District's Wastewater System presently consists of two wastewater treatment plants, an influent metering and diversion structure, 20 pump stations, various interplant pipelines and connections, and the ocean outfall facilities. The District's Wastewater System includes approximately 450 miles of sewers within 12 trunk sewer systems, 200 miles of local sewers located within Revenue Area No. 7, two treatment plants, two discharge outfalls and two emergency weir outlets. The existing treatment plants have a rated primary treatment capacity of 274 million gallons per day, including standby capacity. Treatment Plant No. 1 ("Plant No. l") is located in the City of Fountain Valley, about four miles from the coast, adjacent to the Santa Ana River. Secondary treatment capabilities are provided by a DOCSLAI :446982.6 41758-8 GHl -18- trickling filter plant and a conventional air activated sludge plant. Up to 15 million gallons per day ("mg/d") of secondary treated effluent is conveyed to an Orange County Water District (the "OCWD") plant for tertiary treatment prior to ground water recharge. Treatment Plant No. 2 ("Plant No. 2") is located in the City of Huntington Beach, 1,500 feet from the ocean, at the mouth of the Santa Ana River. Secondary treatment capabilities are provided by a pure oxygen activated sludge plant. The District employs several phases in the treatment of wastewater. The first phase, preliminary treatment, removes debris such as eggshells, sand and biodegradable items. Following extraction, these materials are sent to a solid-waste landfill. In the next phase, primary treatment, wastewater is pumped to large settling basins. The liquids are separated from the remaining solids which settle or float as the wastewater passes through large settling basins called clarifiers. The settled solids are sent to solids treatment facilities. Approximately half of the primary treated wastewater flows into the ocean outfall pumping station where it is blended with secondary treated wastewater before being discharged into the ocean. The other half is sent to secondary treatment for further processing. During secondary treatment, the wastewater is placed in aeration basins to which naturally occurring bacteria are added to remove most of the remaining dissolved and suspended microscopic organic solids. The treated wastewater from both plants is mixed together at Plant No. 2, where it is then pumped through the ocean outfall pipe that extends five miles offshore. Table 3 below sets forth the treatment plants' current and future treatment capacities. Plant No. 1 Plant No. 2 Aggregate Treatment Plant Facilities Table3 Wastewater System Treatment Capacities (MG/D) 2002-03 Existing Primary Existing Secondary Planned Actual Flows Treatment Capacity Treatment Capacity Total Capacity<0 85 155 240 106 168 274 105 75 180 184 150 334 (1) The District's "Planned Total Capacity" is based on the Strategic Plan, which estimated the Districf s requirements to meet future expected primary and secondary capacity demands. The District has the capability to divert a portion of the influent flow from Plant No. 1 to Plant No. 2 through interplant connections. A portion of the flow destined for Plant No. 2 can also be diverted to Plant No. 1. The treated wastewater from Plant No. 1 flows by gravity to the outfall system through interconnecting lines. The combined Plant No. 1 and Plant No. 2 effluent is then pumped through a 120- inch diameter ocean outfall which is approximately five miles long. The last mile of the outfall pipe is a diffuser that dilutes the wastewater with seawater in a ratio of 148 parts seawater to one part treated wastewater at an average depth of 185 feet. The 120-inch outfall has a capacity of 480 million gallons per day at high tide. A smaller 78-inch diameter outfall that terminates at a shallower depth is still maintained, although it is reserved for use in emergencies. This smaller outfall is estimated to have a capacity of approximately 230 million gallons a day. There is an interplant gas pipeline between Plant No. 1 and Plant No. 2 which allows digester gas (which is used as fuel for many of the facilities' engines) DOCS LA I :446982.6 41758-8 GHI -19- from one plant to be used at the other to balance the supply and demand, which results in efficient gas utilization. Permits, Licenses and Other Regulations The Wastewater System is subject to regulations imposed ·by the 1972 Clean Water Act, Public Law 92-500 (the "Clean Water Act"), the California Environmental Quality Act of 1970, as amended ("CEQA") and the Federal Clean Air Act. The regulatory requirements are administered by the United States Environmental Protection Agency (the "EPA") and the California Regional Water Quality Control Board ("RWQCB"). Regulations of these agencies deal primarily with the quality of effluent which may be discharged from the treatment plants and the nature of waste material discharged into the collection system. The District currently has all applicable permits and licenses necessary to operate its facilities. The Clean Water Act directed the EPA to monitor and to regulate the discharge of pollution into navigable waterways and to enforce the requirements that all wastewater treatment plants in the nation provide full secondary treatment for sewage. In 1977, Congress amended the Clean Water Act to allow waivers of secondary treatment standards for certain ocean dischargers if they can demonstrate, to the satisfaction of the EPA, that significant adverse environmental impacts would not occur. For a two- month period during the summer of 1999, eight miles of beaches in Huntington Beach were closed by the Orange County Health Care Agency ("OCHCA") due to excessive levels of bacteria in the water. Although the initial "signature" of the pollution strongly suggested sewage contamination, the investigation concluded that none of the District's facilities caused the excessive bacteria levels and that there was no adverse impact on the capacity of the Wastewater System. See "-Preferred Level of Treatment" and"-Urban Runoff' below. The District currently discharges treated wastewater into the Pacific Ocean under a permit issued by the EPA and the RWQCB. The current discharge permit includes a waiver under the 301(h) provisions of the Clean Water Act, allowing for less than full secondary treatment based on an ocean discharge of sufficient depth, distance and dilution. The permit was initially issued in 1985 and was the first modified Section 30l(h) permit issued to a major wastewater treatment facility. The District's current permit, which includes the Section 301 (h) waiver of secondary treatment requirements, was issued on May 6, 1998, expired on June 8, 2003 and currently remains in effect under an administrative grant of permission until the EP A/RWQCB issue a new permit to replace it. In July 2002, the Board of Directors approved a change from the existing level of treatment, a blend of 50 percent advanced primary and 50 percent secondary treated wastewater, to full secondary treatment standards. As a result, the District has established policy to treat all wastewater discharges into the ocean to secondary treatment standards. See "Preferred Level of Treatment" below. To implement this policy, District staff was directed to immediately proceed with the planning, design and implementation of treatment methods that will allow the District to meet Federal Clean Water Act secondary treatment standards with the expressed purposes of eliminating the permit waiver received under Section 30l(h). Following determination by the Board of Directors in July 2002 to implement full secondary standard, staff prepared the Secondary Treatment National Pollutant Discharge Elimination System ("NPDES") Permit Application that was required to be submitted to the regional office of the EPA and the RWQCB in December 2002. The NPDES Permit is separate and apart from the permit waiver received under Section 30l(h), and once awarded would negate any necessary waiver. Regulators are now evaluating the proposed terms and conditions of the permit application and determining whether it will meet the applicable federal and state standards. The next step will be the negotiation process, which could take anywhere from six months to several years. Following negotiations, a new draft NPDES DOCSLAl :446982.6 41758-8 GHI -20- permit will be issued to the District for future operations. The District currently expects the RWQCB and the EPA to provide special dispensation to the District to permit time for the construction of facilities to provide secondary treatment and for the operation under permit or administrative ruling. The South Coast Air Quality Management District ("AQMD") is the regional governmental agency charged with implementing the Federal Clean Air Act. AQMD permits are required before a sewage treatment improvement project can be constructed. Such permits are project specific and contain construction process requirements, required equipment and standards for predicted air quality. After construction is completed, the AQMD issues an operation permit. These permits are also project specific and contain air quality standards and other appropriate operational guidelines. Most of the District's facilities are enclosed in order to trap emissions, which are cleaned by air scrubbers that remove odors. In addition, the District has implemented an air quality risk reduction program which includes a twenty-year plan to improve treatment plant operations and reduce industrial toxic pollutants. The District currently has all necessary AQMD permits to operate the Wastewater System. Capital Improvement Program The Master Plan. The District's 1989 master plan consisted of a 30-year plan of action for managing wastewater activities to the year 2020, entitled "2020 Vision, Action Plan for Wastewater Management and Environmental Protection 1990-2020" (the "Master Plan"). The Master Plan integrated research facilities planning, environmental analysis, toxic control, water conservation and reclamation, sludge reuse, other wastewater programs and financial planning into a single unified approach. In connection with the preparation of the Master Plan, an in-depth land use study was performed, resulting in the creation of a uniform land use classification system and a map of the District's service area. Land use designations and unit flow factors were used to project wastewater flows in the District's trunk sewers for then present conditions, through the year 2020. These flows were included in a computer model of the District's Wastewater System which identified future sewer capacity improvements. A thirty-year capital improvement program was developed to implement the required sewer capacity improvements. This land use study included the collection and compilation of the latest available land use plans, reports, maps and studies from the cities within the District and the County, and interviews with the planning directors or key staff within the District. Land use planning within the District's service area is the responsibility of the County for unincorporated areas and cities for areas within their boundaries. The Strategic Plan. In October 1999, the District updated the Master Plan with a strategic plan (the "Strategic Plan"). The Strategic Plan updated the planning process set forth in the Master Plan through the year 2020 and defined the District's goals, responsibilities, and requirements over the following twenty years, including projections through the assumed "build-out" of the District's service area to the year 2050. In addition to updating the population and flow assumptions, the Strategic Plan provided for an operations and financial plan, including a review of the collection, treatment and disposal facilities, and the District· s ocean outfalls. Studies on a preferred level of wastewater treatment and in- sourcing of the ocean monitoring program were prepared and incorporated in the Strategic Plan. Water and air regulatory agencies require that all wastewater facilities be designed to meet the needs of anticipated growth and provide a reasonable reserve capacity. With the adoption of the Strategic Plan, the District's planning process met these requirements by shifting its approach for the development of master plans from a "size and build" approach to a broad-based, multi-agency cooperative evaluation process. Many of the assumptions used to develop the Strategic Plan, such as inflation, the projected service population, the level of building activity, and the volume of wastewater treated, were quite different from what was assumed ten years earlier under the Master Plan. Critical factors such as population growth, new construction, the volume of wastewater delivered to the plants and viable water conservation and reclamation programs were reevaluated. DOCSLAI :446982.6 41758-8 GHI -21- Interim Strategic Plan. In June 2002, a new, or Interim Strategic Plan Update (the "Interim Strategic Plan" herein) was completed to further update and revise many of the assumptions used to develop the District's previous planning documents, including population and land-use projections, the level of building activity in the District's service area and the volume of wastewater to be treated. The Interim Strategic Plan also provides for an operations and financial plan including a review of the District's collection, treatment and disposal facilities, and a study of the District's ocean outfall system. In addition, potential changes in the regulatory climate for the beneficial reuse of biosolids were also considered. On July 17, 2002, after reviewing: (1) the Interim Strategic Plan treatment alternatives, (2) ocean monitoring data, (3) public input, (4) regulatory issues, and (5) financial considerations, the Board of Directors approved a change from the existing level of treatment, a blend of 50 percent advanced primary and 50 percent secondary treated wastewater, to full secondary treatment standards. See "Preferred Level of Treatment" below. The Interim Strategic Plan includes revised cost estimates and user fee projections for upgrading the District's level of treatment full secondary standards The District's planning process for development of the Interim Strategic Plan incorporated an analysis of population growth, dry weather and peak wet weather flows and the maximum use of existing facilities. The population of the District's service area was projected to grow to 2. 7 million by the year 2020. Average flow rates at both treatment plants were projected to increase to 321 million gallons a day by 2020 (194 million gallons a day of treatment at Plant No. 1 and 127 million gallons a day at Plant No. 2), up 34% from the Fiscal Year 2003-04 flow. In combination with the Interim Strategic Plan, the District developed its current Capital Improvement Program ("CIP"). The District expects to meet future demands on the Wastewater System through the CIP. This program has been developed to satisfy anticipated regulatory requirements, increased population, additional treatment requirements, conservation, energy and other resource savings considerations, odor control improvements, and air quality protection needs. Over the next 18 years, the District's CIP will accomplish: • Major rehabilitation of the existing headworks, primary treatment, secondary treatment, outfall pumping, and solids handling facilities at both treatment plants. • Replace and rehabilitate 17 of the District's outlying pumping stations, and 44 trunk sewer improvement projects. • Fund cooperative projects to help cities upgrade their sewer systems. • Disinfect the District's ocean discharge to reduce bacterial levels below State bathing standards. • Reclaim 70 millions of gallons per day of the District's effluent, or nearly one-third of the total daily flow (Groundwater Replenishment System). • Achieve full secondary treatment standards. CJP Validation Study. In preparation of the Fiscal Year 2003-04 Budget, the District conducted a CIP Validation Study to ensure that the scopes of the projects were necessary, and that the cost estimates were accurate. As a result of the completion of the CIP Validation Study and the Secondary Treatment Peer Review in the spring of 2003, a revised CIP was developed to meet secondary treatment standards as quickly as possible while providing for increased flows and rehabilitation and refurbishment of existing facilities. As identified within the Interim Strategic Plan, and verified through the CIP Validation Study and Secondary Treatment Review, $422 million of additional capital improvements over the next 9.5 DOCSLAl :446982.6 41758-8 GHI -22- years are needed to reach full secondary standards. An additional $109 million is needed to rehabilitate and upgrade existing secondary facilities for water reclamation and ocean treatment purposes. The CIP Validation Study resulted in a revised CIP consisting of 136 large capital projects managed by the Engineering Department over an 18 year period at a total cost of $2.37 billion. Other smaller capital projects were not included in the Validated Capital Improvement Program, but will be evaluated in future budgets and Board actions. The CIP cash flows over the next ten years is projected to be $2.2 billion; an annual average of nearly $220 million. Implementation of full secondary treatment standards is scheduled to be completed on or before December 31, 2012. Of the Fiscal Year 2003-04 total proposed cash flow budget of $199.9 million, the three largest projects are for wastewater treatment facilities. These projects include the $43.1 million being proposed for Fiscal Year 2003-04 on the Groundwater Replenishment System (the "GWRS"), with a total project cost of $236.2 million. The additional 16 primary clarifiers being constructed at Plant No. 1, with a total projected budget of $88.6 million, is expected to require $14.7 million in Fiscal Year 2003-04. Another $12.0 million is proposed for Fiscal Year 2003-04 for trickling filter rehabilitation and new secondary clarifiers, also being constructed at Plant No. 1, with a total project cost of $46.2 million. Additionally, two of the larger Collection System related projects include the $19.6 million Bushard Trunk Sewer Rehabilitation and the $63.6 million Santa Ana River Interceptor Realignment/Protection project, with current year proposed cash outflows of $12.0 million and $4.2 million, respectively. These five projects represent 44.9 percent of the total Fiscal Year 2003-04 proposed CIP cash flow budget of $199.9 million. Table 4 below sets forth the major CIP project expenditures through 2020: Table4 Estimated Capital Costs through 2020 (Dollars in Millions)<I) Project Collection System Capacity Collection System Repair, Rehab, Replacement Treatment Plant Capacity Additional Secondary Treatment Improved Treatment GWRS Treatment Plant Repair, Rehab, Replacement Support Facilities Total Validated Capital Improvement Program Cost $ 188,434, 146 391,394,814 249,805,776 422, 152,022 225,137,679 179,298, 113 619,444,359 95,602,245 $2,371,269, 154 ( 1) All costs are estimated as of 2003 and are derived from the Validated Capital Improvement Program. Source: Orange County Sanitation District. Groundwater Replenishment System The District has taken a multi-jurisdictional approach to planning for capital facilities because many of the methods for reducing or managing flows involve other jurisdictions. One such project is the GWRS. In March 2001, the District entered into an agreement with the OCWD to design and construct Phase 1 of the Groundwater Replenishment System (''GWRS"). This cost of this project is to be paid equally (50 percent shares) by each agency. The GWRS is a joint effort by the two agencies to provide reclaimed water for replenishment of the Orange County Groundwater Basin and to augment the seawater DOCSLAI :446982.6 41758-8 GHI -23- intrusion barrier. The GWRS is planned for three phases, Phase I will produce approximately 72,000 acre-feet per year of recycled water by June 2007, Phase 2 will increase the total capacity to 112,000 acre- feet by the year 2010, and Phase 3 will increase the total capacity to 145,600 acre-feet by the year 2020. Following the completion of Phase I, the extent of the District's commitment to date, the GWRS will have the capacity to divert up to I 00 million gallons per day of flow. from the District's ocean discharge. Preferred Level of Treatment In July 2002, the Board of Directors approved a change from the existing level of treatment, a blend of 50 percent advanced primary and 50 percent secondary treated wastewater, to full secondary treatment standards. The reasoning behind the decision to move to full secondary standards included ( 1) the possibility (no matter how remote) that bacteria from the ocean outfall may at times reach the shoreline, (2) upgraded treatment will aid additional water reclamation with the Orange County Water District, (3) and the public clearly stated preference for upgrading wastewater treatment at the time. In an effort to eliminate most bacteria from being released from the ocean outfall, in 2002 the District began to use chlorine bleach to disinfect the effluent and then apply sodium bisulfate to remove any remaining chlorine prior to releasing the treated wastewater to the ocean. In order to protect the animal life living in the ocean, the District continues to take measures to limit the chlorine residual to a very low level-essentially non-detectable. This mode of disinfection is anticipated to occur for the short- term, possibly three years, while the District studies, designs and constructs permanent facilities, and considers alternate disinfection technologies. Beginning in Fiscal Year 2002-03, the addition of disinfection treatment required an annual outlay of $7 million in additional chemicals within the joint operating budget of the District. Following determination by the Board of Directors in July 2002 to implement full secondary standards, staff prepared the Secondary Treatment NPDES Permit Application that was required to be submitted to the regional office of Environmental Protection Agency (EPA) and the Regional Water Quality Control Board (RWQCB) in December 2002. Regulators are now evaluating the proposed terms and conditions of the permit application and determining whether it will meet the applicable federal and state standards. A draft NPDES permit is expected to be issued to the District at some point in the coming years. See "THE DISTRICT-Permits, Licenses and Other Regulations." The District estimates that it will take approximately ten years and additional capital improvement costs of approximately $422 million would be required to add additional secondary treatment capacity to the Wastewater System, and operating costs, upon completion of facilities necessary to meet secondary treatment standards, are currently projected to increase by $7 .2 million annually. In the interim, the District will operate the plants to maximize available secondary treatment and to reduce effluent biochemical oxygen demand and suspend solid discharges below those currently allowed limits. Each year, the current 50 percent secondary portion will increase incrementally as operations change and new facilities are constructed and placed in service over the next ten years. Biosolids Management The District currently land applies its entire biosolids residuals for beneficial reuse in Kings, Kem, and San Bernardino counties in California, in Arizona, and on tribal lands through contracts with biosolids management service providers. Riverside, Kern, and Kings County have enacted biosolids ordinances eliminating land application of Class B biosolids effective January 2003. Class B biosolids reuse options and capacities for the management of District biosolids are becoming insufficient as a result of this legislation. DOCSLAl :446982.6 41758-8 GHl -24- In response to these regulatory developments, the District developed a short-term biosolids management plan that analyzes several different technologies so that the District could maintain its policy of providing environmentally sound biosolids management with an emphasis on multiple, independent reuse alternatives. As a result of this plan, the District has reviewed several Class A biosolids technology options and has entered into a biosolids management contract with California Soil Products for the production of a Class A chemically stabilized biosolids product. A long-term biosolids management program will be developed that will be based on relationships with host communities and farmers willing to continue accepting Class B biosolids and producing Class A biosolids products. A comprehensive biosolids plan is currently underway that will review many options from dewatering technologies to final products and markets. Some of the options to be included in the plan include turning biosolids into consumer-based products such as pellets or creating bio-fuel. Urban Runoff For a two-month period during the summer of 1999, eight miles of beaches in Huntington Beach were closed by the OCHCA due to excessive levels of bacteria in the water. A three-month interagency source investigation did not identify a definitive source of the contamination, but determined that the District was not at fault. Although the initial "signature" of the pollution strongly suggested sewage contamination, the investigation concluded that none of the District's facilities caused the excessive bacteria levels and that there was no adverse impact on the capacity of the Wastewater System. In June 2002, the District's charter was amended by an act of the State Legislature to include permissive language authorizing the diversion and management of dry weather urban runoff flows. This charter change will allow the District, in it's discretion, to acquire, construct, operate, maintain, and furnish facilities for the diversion of urban runoff from drainage courses within the District, the treatment of the urban runoff, the return of the water to the drainage courses, or the beneficial use of the water. As noted above, in July 2002, the Board of Directors approved the implementation of full secondary standards. The District is currently discharging treated wastewater into the Pacific Ocean under a permit issued by the EPA and the RWQCB on May 6, 1998 and currently under an administrative grant of permission until the EPA/RWQCB issue a new permit to replace it. Following determination by the Board of Directors in July 2002 to implement full secondary standard, staff prepared the Secondary Treatment NPDES Permit Application that was required to be submitted to the regional office of Environmental Protection Agency (EPA) and the Regional Water Quality Control Board (RWQCB) and State and federal regulators are now evaluating the proposed terms and conditions of the permit application and determining whether it will meet applicable standards. See ''THE DISTRICT -Permits, Licenses and Other Regulations." Integrated Emergency Response Program Growing awareness of the threat to public utilities from natural disasters such as earthquakes, floods and other perils has made preparedness for these and other events a high priority for the planners, engineers, and managers of the District. In recognition of the potential damage which could occur in the wake of a major earthquake, flood, or other disaster, the District has implemented an Integrated Emergency Response Program (the "IERP"). The IERP is a two-volume plan which contains policies, plans and procedures preparing for, and responding to, emergencies. The District also has analyzed disaster preparedness issues and policies within the Strategic Plan. Earthquakes are considered to be the most potentially devastating natural disaster events which confront the District. The disaster preparedness plan included in the Strategic Plan reviews two possible DOCSLAI :446982.6 41758-8 GHI -25- major earthquake scenarios: an 8.3 Richter magnitude ("M") earthquake on the southern San Andreas fault system and an M 7.0 earthquake on the Newport-Inglewood fault zone, which includes Plant No. 2. An M 8.3 earthquake on the southern San Andreas fault, while on the whole more destructive than the M 7.0 Newport-Inglewood fault event, would probably result in less damage in the District's service area due to the distance of the fault from most of the service area. However, damage from such a major earthquake on the San Andreas fault would be extensive. Also, the plan indicates that an M 7 .0 earthquake on the Newport-Inglewood fault within five miles of the District's sewerage facilities could cause major destruction to those facilities. The disaster preparedness plan in the Strategic Plan indicates that it would not be economically feasible to upgrade all of the existing sanitary sewerage facilities to survive an earthquake of this magnitude along the Newport-Inglewood fault. The IERP outlines the policies and employee actions to be taken before, during and after an earthquake, earthquake response guidelines and damage assessment procedures. The Strategic Plan analyzes the vulnerability of the sanitary sewerage facilities and operations of the District and plans a risk reduction program wherein the vulnerability of many of the District's sanitary sewerage facilities to an earthquake can be reduced by recommended retrofit construction measures. The Strategic Plan also recommends that designs of existing major structures which were constructed prior to development of current seismic design standards be reviewed and the structures strengthened, if necessary. Pursuant to the Strategic Plan, all recent and future projects have been, and will be, designed to the same high earthquake construction code standards as set for other essential services, such as hospitals and fire stations. The Army Corps of Engineers' "All-River Plan" has mitigated any future flooding of the Santa Ana River system and potential threats to the District's Wastewater System. Also, both Plant No. 1 and Plant No. 2 are surrounded by 3-foot to 6-foot high walls, built to federal standards. The disaster preparedness plan in the Strategic Plan investigates the damage potential posed by coastal flooding, tsunamis (large ocean waves generated by seismic activity) and windstorms. However, based on available information, the District does not consider any of such events to be a significant threat to the District's Wastewater System. The Strategic Plan also makes recommendations regarding fire protection of the Wastewater System and most of the structures at Plant No. 1 and Plant No. 2 are constructed of fire-resistant materials. The IERP describes the procedures needed to respond to a possible disaster. For more information regarding emergency response policies, the disaster preparedness plan described in the Strategic Plan and the IERP can be reviewed at the District's office. DISTRICT REVENUES Sewer Service Charges General. The District has the power to establish fees and charges for services of the Wastewater System. Such fees and charges are established by the District's board of directors and are not subject to review or approval by any other agencies. In Fiscal Year 1997-98, a Rate Advisory Committee (the "RAC") was established comprised of representatives from industrial, commercial and residential users. The goal of the RAC was to examine the then current rate structure and, if needed, develop recommendations for change. The RAC analyzed the District's rate structure to determine whether its then current sewer service user fees (now known as "Sewer Service Charges") were equitable among residences and industry. This review resulted in a proposal to expand the number of non-residential user categories from one to twenty-three and to provide DOCSLAI :446982.6 41758-8 GHI -26- for gradual rate increases in seven of the nine Revenue Areas. The increase in the number of categories provided a more equitable fee structure and also provided for future reductions in single-family residential Sewer Service Charges. The Sewer Service Charges for those categories were based on the average flow and strength of wastewater discharged for each property type. In May 2002, the Board adopted District Ordinance No. OCSD 18 (the "2002 Ordinance") which was effective on July 1, 2002. The 2002 Ordinance included a rate increase of $7.50 per year, or 9.4 percent, for all ratepayers to $87.50 per year. On July 2, 2003, the Board adopted Ordinance No. OCSD- 20 increasing sanitary sewer service charges for all single family and multi-family residential units as well as most commercial and industrial properties. The Ordinance was adopted by a 2/3 vote of the Board as required under law after conducting a noticed public hearing in compliance with all laws. The Ordinance increases the amount of the annual charges by approximately 15% per year for each of the next five years, commencing with Fiscal Year 2003-04, thereby raising the single family residence user rate from the current $87.50 to $100.00, $115.00, $132.00, $152.00, and $175.00 annually. Annual increases are ordered to be subject to reaffirmation by the affirmative vote of 2/3 of the members of the Board prior to implementation of any such change for each fiscal year commencing with Fiscal Year 2004-05. The resulting increases in sewer rates for each fiscal year are well below the average annual sewer rate of $244.00 per year currently being charged according to a survey of 217 agencies conducted by the Association of Metropolitan Sewage Agencies. This increase was necessary in order to meet the District" s cash flow needs due to the addition of disinfection treatment and other operating requirements. As discussed under the caption "THE DISTRICT -Capital Improvement Program," the CIP Validation Study and the Secondary Treatment Review in the Spring of 2003 developed a capital improvement program to meet secondary treatment standards as quickly as possible while providing for increased flows and rehabilitation and refurbishment of existing facilities. Over the next ten years, the CIP cash flow needs will be $2.2 billion; an annual average of nearly $220 million. The District collects Sewer Service Charges from property owners through the semi-annual property tax bill distributed by the County throughout the District, except in Revenue Area No. 14. Pursuant to the IRWD Agreement, the District receives payments from the Irvine Ranch Water District (the "IRWD") which directly collects fees from customers through a monthly billing procedure in Revenue Area No. 14. The District has covenanted in the Master Agreement to fix, prescribe and collect fees and charges to satisfy certain coverage requirements as further described under "SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES -Rate Covenant" herein. Residential Sewer Service Charges. Pursuant to the 2002 Ordinance the District established residential Sewer Service Charges upon a rational basis between the fees charged each customer and the services and facilities provided to each customer of the District. In accordance with the 2002 Ordinance, in Fiscal Year 2002-03, the District adopted a rate increase of $7 .50 per year, or 9.4 percent, for all ratepayers, except those located in Revenue Area 14, to $87 .50 per year. On July 2, 2003, the District adopted a rate increase of $12.50 per year (or approximately 15 percent) to $100.00 per year for all ratepayers, except those located in Revenue Area 14. The average total of fees and charges for Revenue Area No. 14 are $70.80 per year per single-family residential unit and are levied and collected directly by the IRWD on a monthly basis. The IRWD subsequently pays fees to the District on a quarterly basis pursuant to the IRWD Agreement. This increase was necessary in order to meet the District's cash flow needs. Table 5 below sets forth a five -year comparison of the Sewer Service Charge rate for single- family residences. DOCSLAI :446982.6 41758-8 GHI -27- Table5 Annual Sewer Service Charges Single Family Residence Rate Five Year Rate Schedule Fiscal Years 1999-00 through 2003-04 Fiscal Year 1999-00 2000-01 2001-02 2002-03 2003-04 Source: Orange County Sanitation District. Sewer Service Charge $ 81.02 78.00 80.00 87.50 100.00 Table 6 below sets forth Fiscal Year 2002-03 total average yearly Sewer Service Charges for single-family residences within the District, together with local agency fees and property tax charges and comparable Sewer Service Charges, local agency fees and property taxes charged to single-family residences within the jurisdictions of certain other cities and districts within the State. Entity East Bay MUD San Diego Sacramento Los Angeles (City) Orange County Sanitation District'4, Los Angeles (County) Table6 Comparison of Total Sewer Service Charges for Single-Family Residences<0 Annual Level Sewer of Size<2> Service Treatment(% )<3> Collection (mg/d) Charge 1 2 3 Responsibility 79 326 96 4 No 240 325 88 12 Yes 164 161 100 No 442 240 78 22 Yes 246 144 50 50 No 522 99 66 34 No Property Tax Income Yes No Yes No Yes Yes (1) Total includes user fees (treatment/disposal) or Sewer Service Charges, local agency charges and property taxes. (2) Average amount of wastewater treated daily. (3) Primary, secondary and tertiary levels of treatment are represented. ( 4) Orange County Sanitation District Sewer Service Charges adjusted to Fiscal Year 2003-04. Source: 2002 Survey by the Association of Metropolitan Sewage Agencies. Industrial Sewer Service Charges. The District charges industrial Sewer Service Charges to customers discharging high-strength or high-volume wastes into the sewer systems. Customers subject to industrial Sewer Service Charges are billed directly by the District. The fee charged to each customer is based on the customer's sewage volume, the concentration of suspended solids and biochemical oxygen demand. Pursuant to the 2002 Ordinance, rates for each component factor were revised for certain industrial users in order to be consistent with the rates charged to residential users. Total industrial Sewer DOCSLAI :446982.6 41758-8 OHi -28- Service Charges in Fiscal Year 2002-03 were approximately $6.3 million. Industrial Sewer Service Charges are applied to both the operating and capital funds. Additional Revenues The District has several sources of additional revenue, including property taxes, Capital Facilities Capacity Charges, capacity rights, permit and inspection fees and interest earnings. Property Taxes. The District receives approximately 2.5% of the one percent County ad valorem property tax levy, based on the allocation procedure under State law. County property tax revenue allocated to the District have risen over the past five years, except for a minor decline in Fiscal Year 2002-03. Property tax revenues were $35.4 million in Fiscal Year 1999-00, $38.4 million in Fiscal Year 2000-01, $41.1 million in Fiscal Year 2001-02 and $40 million in Fiscal Year 2002-03. The District expects property tax revenues of $41.2 million in Fiscal Year 2003-04. Current projections indicate that property tax revenues received by the District are expected to increase by approximately 3% per year. The apportionment of the ad valorem tax is pursuant to a revenue program adopted by the District in April 1979 to comply with the EPA, the RWQCB, legal and contractual requirements and Board policy. Capital Facilities Capacity Charges. Capital Facilities Capacity Charges (formerly known as connection fees) are one-time fees with two components, paid at the time property is developed and connected to the Wastewater System. The fees are imposed by the District pursuant to Section 54 71 of the California Health and Safety Code and are levied to pay a portion of the District's capital costs and for access to capacity in the Wastewater System. Currently, the District has Capital Facilities Capacity Charges of $1,820 per residential unit (three-bedroom); however, under the current industrial use ordinance, additional Capital Facilities Capacity Charges can be imposed on industrial users who place larger than average demand on the Wastewater System. Member cities and sanitary districts collect Capital Facilities Capacity Charges for the District when building permits are issued. Capital Facilities Capacity Charges are reviewed annually to reflect the changes in the value of the Wastewater System to which a new customer is connecting. On December 15, 1999, the Board approved District Ordinance No. OCSD 99-11 (the "1999 Ordinance") which established a comprehensive Capital Facilities Capacity Charge. The 1999 Ordinance, effective as of January l, 2000, renamed connection fees as Capital Facilities Capacity Charges and provided a more equitable schedule of fees among industrial, commercial and residential users. Pursuant to the 1999 Ordinance, Capital Facilities Capacity Charges were revised for high demand industrial users in five incremental increases from 1999-2001. Pursuant to an agreement with the IRWD, the IRWD is not required to pay Capital Facilities Capacity Charges and in exchange, the IRWD provides funding to the District for the construction costs of certain wastewater collection, transmission, treatment and disposal facilities to be used by the IRWD and is obligated to make certain payments to the District for certain services arising from the Wastewater System (including any standby or availability charges). Sale of Capacity. The District has entered into agreements with the Santa Ana Watershed Project Authority ("SA WPA") whereby wastewater from Upper Santa Ana River Basin dischargers can be transported through the District's Santa Ana River Interceptor to the District's wastewater treatment facilities. This program was developed in the early 1970' s. The agreements establish control mechanisms regarding the quality of wastes deposited into the Wastewater System. At the present time, SA WP A has purchased and paid for 30 million gallons a day of capacity rights in the District's Santa Ana River Interceptor and 11 million gallons a day of capacity in the District's wastewater treatment plants. DOCSLAl :446982.6 41758-8 GHI -29- Additional treatment plant capacity can be purchased in increments at the District's current replacement cost. The Santa Ana River Interceptor Line ("SARI") was built in the Chino Basin Preserve Area in order to remove dairy farm wastes and accommodate future urban development. Salts in the washwater generated from the cleaning of cows and milking equipment were leaching into the groundwater in the Chino Basin and the SARI was built to divert the washwater from this area. However, due to the nature of the Chino Basin Preserve, the development of any infrastructure in the area to accommodate the SARI was limited. The current SARI multi-phase project is designed to connect several dairies to the SARI. Future expansions of this project could include connecting other dairies and other waste streams with the SARI line. See "THE DISTRICT -Capital Improvement Program" herein. Wastewater Treatment History The average yearly influent flow to the District has remained relatively stable for the preceding five years. The wastewater flow for Fiscal Year 1998-99 was 241 mg/d and for Fiscal Year 2001-02 was 239 mg/d. The highest flow rate experienced was during El Nino storm periods. Peak flows of 500 mg/d were recorded in December 1997 and February 1998. There were no sewer failures or overflows during these events. Customers The historical number of customers served by the District for the Fiscal Years 1998-99 through 2002-03 and the projected number of customers served by the District for the Fiscal Years 2003-04 through 2007-08, identified in Equivalent Dwelling Units ("EDUs"), are set forth in Table 7 below. Table7 Historical and Projected Equivalent Dwelling Units Fiscal Years 1998-99 through 2007-08 Fiscal Year 1998-99 1999-00<1> 2000-01 2001-02 2002-03 Historical ED Us 882,103 919,072 883,603 898,031 897,757 Fiscal Year 2003-04 2004-05 2005-06 2006-07 2007-08 Projected ED Us 898,000 901,200 904,400 907,600 910,800 ( 1) The adoption of multiple rate categories pursuant to RAC recommendations resulted in an increase in Sewer Service Charge revenues thereby increasing the imputed base EDUs beginning in Fiscal Year 1999-00. EDU growth during the projection period is estimated at approximately 0.3% per annum. Source: Orange County Sanitation District. Table 8 below shows the number of residential and commercial customers and industrial customers and the approximate percentages of Sewer Service Charge revenues derived from the combined residential and commercial use and industrial use for the last five fiscal years. DOCSLAl :446982.6 41758-8 GHl -30- Table 8 Number of Accounts and Revenues by Customer Class for the Fiscal Years Ending Jun~ 30 Residential/Commercial Industrial Number of Percentage Equivalent of Sewer Percentage of Single-Service Number of Sewer Service Fiscal Family Total Charge Customer Charge Total Year Dwellings Revenue Revenues Accounts Revenues Revenue 1998-99 882,103 $ 61.6 89% 678(1) 11% 7.8 1999-00 919,072 72.0 89 649 11 9.1 2000-01 883,603 64.5 91 596 9 6.6 2001-02 898,031 70.3 90 579 10 7.5 2002-03 897,757 77.0 92 603 8 6.3 (I) Pursuant to RAC recommendations, certain industrial users were reassigned to the general user fee program beginning in Fiscal Year 1998-99. Source: Orange County Sanitation District. The ten largest industrial customers of the District for the Fiscal Year ended June 30, 2003 are shown in Table 9 below. These industrial customers paid a total of $2,802,347.84 for services of the District, or approximately 44% of the District's $6,347 ,000 total revenues received from industrial customers, and approximately 3.4% of the District's total Sewer Service Charge revenues of $83,347,000. Table 9 Largest Customers of the District for the Fiscal Year Ended June 30, 2003 User Disneyland Resort-Disney land Park Alstyle Apparel -Activewear Mfg. Stremicks Heritage Foods, LLC Kimberly-Clark Worldwide, Inc House Foods America Corp. Knotts Berry Farm Foods MCP Foods, Inc. Nor-Cal Beverage Co., Inc. (Main) U.S. Dyeing & Finishing, Inc Royal Carpet Mills TOTAL Source: Orange County Sanitation District. DOCSLAI :446982.6 41758-8 GHI Sewer Service Charges $454,082.30 425,306.07 414,727.30 257,271.32 255,914.04 234,981.46 229,484.54 192,611.74 170,738.59 167,230.48 $2,802,347 .84 -31- Percentage of Total Sewer Service Charge Revenues 0.54% 0.51 0.50 0.31 0.31 0.28 0.27 0.23 0.20 0.20 3.36% Assessed Valuation The assessed valuation of property in the County is established by the County Assessor, except for public utility property which is assessed by the State Board of Equalization. Due to changes in assessment required under State Constitution Article XIlIA, the County assessment roll no longer purports to be proportional to market value. See "LIMIT A TIO NS ON TAXES AND REVENUES" herein. Generally, property can be reappraised to market value only upon a change in ownership or completion of new construction. The assessed value of property that has not incurred a change of ownership or new construction must be adjusted annually to reflect inflation at a rate not to exceed 2% per year based on the State consumer price index. In the event of declining property value caused by substantial damage, destruction, economic or other factors, the assessed value must be reduced temporarily to reflect market value. For the definition of full cash value and more information on property tax limitations and adjustments, see "LIMITATIONS ON TAXES AND REVENUES" herein. The County Assessor determines and enrolls a value for each parcel of taxable real property in the County every year. The value review may result in a reduction in value. Taxpayers in the County also may appeal the determination of the County Assessor with respect to the assessed value of their property. In , approximately assessment appeals were filed in the County. As of __ , 2003 the balance of pending applications was __ . This included current and prior years' filings. Determinations of value are made by a three-member Assessment Appeals Board or a Hearing Officer. Waivers extending the statutory two-year processing deadline are obtained from the County for applications approaching this time limit. Table 10 below shows a five-year history of assessed valuations in the District since Fiscal Year 1998-99. Over the years shown, assessed valuations in the District have increased at an average rate of approximately 8% per fiscal year. Table 10 Assessed Valuations of Property in the District Fiscal Years 1998-99 through 2002-03 (Secured Roll) Fiscal Year 1998-99 1999-00 2000-01 2001-02 2002-03 ($ Billions) Value 134.7 145.6 159.3 173.4 188.9 % Change 4.90 8.09 9.41 8.85 8.94 Source: County of Orange Auditor-Controller. Tax Levies and Delinquencies Property taxes are based on assessed valuation which is determined as described under "District Revenues -Assessed Valuation" herein. In accordance with the California Revenue and Taxation Code, the County tax collector collects secured tax levies for each Fiscal Year. Property taxes on the secured roll are due in two installments, on November 1 and February 1. If unpaid, such taxes become delinquent after December 10 and April 10, respectively, and a ten percent penalty attaches to any delinquent DOCSLAI :446982.6 41758-8 GHI -32- payment. In addition, property on the secured roll with respect to which taxes are delinquent is declared tax-defaulted on or about June 30. Such property may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus costs and redemption penalty of one and one-half percent per month to the time of redemption. If taxes are unpaid for a period of five years or more, the tax-defaulted property is subject to sale by the County Treasurer-Tax Collector. Property taxes on the unsecured roll are due as of the January 1 lien date and become delinquent, if unpaid, on August 31. A ten percent penalty attaches to delinquent taxes on property on the unsecured roll and an additional penalty of one and one-half percent per month begins to accrue on November 1. The taxing authority has four ways of collecting unsecured personal property taxes: ( 1) a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for recordation in the County Recorder's office in order to obtain a lien on certain property of the taxpayer; and ( 4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the taxpayer. Table 11 below shows a five-year history of the Districf s ad valorem total property tax and Sewer Service Charge levies and collections, outstanding delinquencies in prior years collected in current fiscal years and the percent of delinquencies to the total tax and Sewer Service Charge levies. Fiscal Year 1998-99 1999-00 2000-01 2001-02 2002-03<3> Table 11 Total Property Tax and Sewer Service Charge Levies and Delinquencies in the District for Fiscal Years 1998-99 through 2002-03 Total Tax and Total Tax and Sewer Service Sewer Service Charge Outstanding Charge Levy Collection Delinquencies<1> $ 98,557 ,000 $ 93,686,000 $ 2,069,000 107,948,000 106,755,000 1,709,000 105,890,000 102,054,000 1,958,000 112,419,000 110,351,000 1,917,000 122,289,000 118,994,000 2,183,000 (I) Amounts delinquent in prior years collected in the current fiscal year. % of Current Year Delinquencies to Tax Levy<2> 2.10% 1.58 1.85 1.71 1.79 (2) Percentages derived by dividing outstanding delinquencies by total tax and Sewer Service Charge levies. (3) Estimated. Source: Orange County Auditor-Controller's Office. The District currently participates in the County's Teeter Plan under which the District receives annually 100% of the secured property tax levies and Sewer Service Charges to which it otherwise is entitled, regardless of whether the County has actually collected the levies. Budgetary Process The District's operating fund budget relies on revenues from property taxes and Sewer Service Charges, both of which are collected on the property tax bill. See "FINANCIAL INFORMATION - Revenues." The District receives tax revenues from the County in eight allocations, with the largest receipts in December and April. The District operates on a Fiscal Year beginning each July 1. The operating fund budgets include funds to cover the dry period of each tax year, i.e., the period from the DOCSLAI :446982.6 41758-8 GHI -33- beginning of the Fiscal Year until the first taxes are received. The dry-period requirement is budgeted at one-half of the annual operating fund budgeted expenditures. The District uses the accrual method of accounting in its budgets. The District has conformed to its budgets for the last five fiscal years and is conforming to its budget for the current fiscal year. The District's annual budget preparation process begins in January of each year and concludes in June upon its adoption. The General Manager reviews the final operating budgets and then distributes them to the Directors and District Committees for consideration. The Board of Directors then adopts the proposed annual budgets, with any revisions, in June of each year. Budgetary control is exercised at the individual Department level and administrative policies provide guidelines on budget transfers and the authorization necessary to implement transfers. A budget adjustment is a transfer which does not change the total appropriated amount and does not require Board action. Approval may be granted by the General Manager or the Department Head in certain circumstances. Department Heads have the discretion to reapportion funds between certain line items within a division but may not exceed total appropriated amounts for each department. They may also transfer staff across divisional lines. The General Manager and Board of Directors must approve additional capital outlay items. A budget amendment is an adjustment to the total appropriated amount which was not included in the original budget. These supplemental appropriations require formal action by the Board of Directors. Prior year reserves or fund balances may be appropriated to fund items not previously included in the adopted budget. Reserves or fund balances exceeding minimum amounts required by fiscal policies may be appropriated if it is determined to be in the best interest of the District. Directors may also appropriate reserves in case of emergencies or unusual circumstances. Reserves In __ , the District revised its reserve policy and established eight separate reserve funds for its retained earnings. The following table sets forth projected reserves at June 30, 2003 and 2004 for each fund. Increases to the Capital Improvement Program Reserve and Debt Service Required Reserves are attributable principally to the funding of projected CIP cash flow and the Reserve Fund for the Certificates. DOCSLAl :446982.6 41758-8 GHI -34- Table 12 Projected Reserves at June 30, 2003 and 2004 Cash Flow Requirements Reserve Operating Expenses Certificate of Participation Payments Operating Contingencies Reserve Capital Improvement Program Reserve Catastrophe and Self Insurance Subtotal Short-Term Specific Capital Projects Capital Replacement and Refurbishment Debt Service Required Reserves Rate Stabilization Reserve Total Source: Orange County Sanitation District. June 30, 2003 $ 46,505,000 36,950,000 9,301,000 142,266,000 57,000,000 $292,022,000 43,125,000 52,020,000 33,000,000 $420, 167 ,000 June 30, 2004 $ 47,129,000 45,896,000 9,426,000 242,121,000 57,000,000 $401,572,000 58,609,000 53,060,000 62,847,000 $576,088,000 The Cash Flow Requirements Reserve was established to fund operation, maintenance and certificates of participation debt service expenses for the first half of the fiscal year, prior to the receipt of the first installment of the property tax allocation and sewer service user fees which are collected as a separate line item on the property tax bill. The level of this reserve is established as the sum of an amount equal to six months operations and maintenance expense and the total of certificates of participation debt service expenses due in the subsequent fiscal year. The Operating Contingency Reserve was established to provide for non-recurring expenditures that were not anticipated when the annual budget and Sewer Service Charges were adopted. The level of this reserve is equal to ten percent of the District's annual operating budget. The Capital Improvement Reserve was established to fund annual increments of the capital improvement program with a target level at one half of the average annual capital improvement program through the year 2020. Levels higher and lower than the target can be expected while the long- term financing and capital improvement programs are being finalized. The Catastrophic Loss, or Self- Insurance Reserve is established for property damage including fire, flood and earthquake, general liability and workers' compensation. The level of reserve in this fund is maintained at a level to fund the District's non-reimbursed costs which are estimated to be $57 million. The Short-Term Capital Fund Reserve was created for specific short-term capital improvements such as the GWRS. The Capital Replacement/Renewal Reserve was established to provide thirty percent of the funding to replace or refurbish the current collection, treatment and disposal facilities. The current replacement value of these facilities is estimated to be over $2 billion. The initial reserve level for this fund was established at $50 million and is augmented by interest earnings and a portion of the annual Sewer Service Charges. Debt Service Reserves are controlled by a trustee pursuant to the provisions of certificates of participation issues and is not available for the general needs of the District. The Rate Stabilization Reserve accumulates all available funds which exceed the targets for all other reserves. The Rate Stabilization Reserve is a separate fund from the Rate Stabilization Account established under the Trust Agreement. These funds are applied to future years' needs and must be maintained at specified levels. There is currently no established target for this reserve and, because the reserves of all other funds have not been exceeded, the reserve level for this reserve fund is zero at June 30, 2004. See APPENDIX A - "COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30, 2002" herein. DOCSLAl :446982.6 41758-8 GHl -35- Summary of Operating Data Set forth in Table 13 below is a summary of historic operating results for the District for Fiscal Years 1998-99 through 2002-03. The information presented in the summary should be read in conjunction with the financial statements and notes. See APPENDIX A -"COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30, 2002" herein. Table 13 Summary of Historical District Revenues and Financial Information For Fiscal Years 1998-99 Through 2002-03 ($ Millions) 1998-99 1999-00 Revenues: Sewer Service Charges0 > $ 61.6 $ 72.0 Industrial Sewer Service 7.8 9.1 Charges Revenue Area No. 14 Fees 0.7 2.2 Ad Valorem Taxes 32.8 35.6 Interest Earnings 17.9 20.5 Capital Facilities Capacity Charges<2> 9.5 7.9 Other Revenues 2.4 1.2 Total Revenues $132.7 $148.S Operations and Maintenance 54.7 59.4 Expenses Net Revenues<3> $ 78.0 $ 89.1 Debt Service $ 29.4 $ 29.9 Cash Funded CIP $ 44.5 $ 63.0 Ending Reserves<4 > $344.1 $400.4 Coverage Ratios<3> 2.66x 2.97x ( 1 ) Net of rebates, if any, to commercial users. (2) Prior to January 1, 2000, these charges were referred to as connection fees. (3) Calculated in accordance with Master Agreement. ( 4) Excludes any Debt Service Reserve Funds. (5) Unaudited. Source: Orange County Sanitation District. Projected Operating Data 2000-01 $ 64.5 6.6 2.0 38.4 39.4 7.3 2.5 $160.7 62.3 $ 98.4 $ 30.5 $ 59.8 $440.5 3.23x 2001-02 2002-03<5> $ 70.3 $ 77.0 7.5 6.3 2.2 3.4 41.1 40.0 27.8 22.6 10.6 9.7 2.5 3.4 $162.0 $162.4 68.6 81.3 $ 93.4 $ 81.1 $ 23.4 $ 27.8 $ 83.9 $108.3 $429.7 $387.2 3.99x 2.92x Set forth in Table 14 below are projected operating results for the District for Fiscal Years 2003- 04 through 2007-08. These projections assume the number of projects and scheduled build out set forth in the CIP Validation Study, increased sewer service rates for Fiscal Year 2003-04 and projected increased sewer service rates 2004-05 to 2007-08. Principal expenditure components of these projections are the Interim Strategic Plan and CIP Validation Study, which identified 136 large capital projects managed by the Engineering Department over an 18 year period at a total cost of $2.37 billion, and include over $1.3 billion in the next five years. The District's CIP cash flow budget for Fiscal Year 2003- 04 is $199.9 million, an increase of $91.6 million from the prior year estimated total. This CIP budget DOCSLAI :446982.6 41758-8 GHI -36- finances joint works treatment and disposal system improvement projects, and collection system improvement projects. This increase is attributable to the additional infrastructure needs identified in the Interim Strategic Plan and in the CIP Validation Study. The preparation of such projections was based upon certain assumptions and certain forecasts with respect to conditions that may occur in the future. While the District believes that these assumptions and forecasts are reasonable for the purposes of the projected selected operating data, it makes no representations that they will in fact occur. To the extent that actual future conditions differ from those assumed herein, the data will vary. Table 14 Summary of Projected District Revenues and Financial Information for Fiscal Years 2003-04 through 2007-08 ($Millions) 2003-04 2004-05 2005-06 2006-07 2007-08 Revenues: Sewer Service Charges $ 89.8 $103.5 $119.7 $138.1 $159.5 Industrial Sewer Service Charges 6.5 6.5 6.5 6.5 6.5 Revenue Area No. 14 Fees 2.8 2.8 2.9 2.9 2.9 Ad Valorem Taxes 41.2 42.4 43.7 45.0 46.4 Interest Earnings 19.5 23.4 18.9 19.8 21.3 Capital Facilities Capacity Charges 9.1 9.1 9.1 9.1 9.1 Other Revenues 3.5 3.5 3.5 3.5 3.5 Total Revenues $172.4 $191.2 $204.3 $224.9 $249.2 Operations and Maintenance Expenses 93.0 94.3 95.6 96.9 98.2 Net Revenues<1> $ 79.4 $96.9 $108.7 $128.0 $151.0 Debt Service $ 37.0 $ 45.9 $ 54.8 $ 72.3 $ 86.9 Cash Funded CIP $200.0 $296.2 $324.9 $302.0 $222.9 Ending Reserves'2' $513.3 $322.3 $302.7 $310.3 $324.1 Coverage Ratios' 0 2.15x 2.1 lx l.98x l.77x 1.74x ( I ) Calculated in accordance with the Master Agreement. Projected debt service coverage ratios may be higher than shown due to the structuring of level overall debt service. (2) Excludes any Debt Service Reserve Funds. Source: Orange County Sanitation District. Management's Discussion and Analysis of Operating Data The District's Fiscal Year 2003-04 operations and capital improvements budget is proposed at $334.4 million, a 19.2 percent increase over the prior year budget of $280.4. This increase is primarily attributable to increased cash outlays for construction projects as the District moves towards reaching full secondary treatment standards in accordance with the Board"s July 17, 2002 resolution. The Fiscal Year 2003-04 budget continues to reflect the District's ongoing efforts to streamline operations and to provide wastewater treatment as efficiently and effectively as possible while lowering operational and maintenance costs to more closely match those agencies that are "best in class" for wastewater treatment facilities. The increase in the demand for services in the areas of ocean monitoring, ocean discharge and level of treatment, water reclamation and conservation, urban runoff diversions, increased local DOCSLAl :446982.6 41758-8 GHI -37- regulations of biosolids, and the expansion of the Capital Improvement Program (CIP), is causing the cash flow needs of the District to grow. The Fiscal Year 2003-04 proposed budget to operate, maintain and manage the District's sewage treatment and disposal system is $77.0 million, an increase of $8.3 million over the prior year. Of this total, solids removal cost alone is increasing 30.9 percent, or $2.3 lnillion due to the increase in tonnage that will occur as additional secondary treatment is provided and more solids are removed. The cost per million gallons of wastewater treated, an industry-wide performance measurement, is expected to increase in Fiscal Year 2003-04 to $842, a $95, or 12.7 percent increase over the prior year projection of $747. Wastewater flows through the treatment system is expected to increase from 240 million gallons per day (mgd) in Fiscal Year 2002-03 to 250 mgd in Fiscal Year 2003-04, a 4.2 percent increase. In addition, the Interim Strategic Plan and CIP Validation Study identified 136 large capital projects managed by the Engineering Department over an 18 year period at a total cost of $2.37 billion, and include over $1.3 billion in the next five years. Other smaller capital projects were not included in the CIP Validation Study but will be evaluated in future budgets and Board meetings. The District's Capital Improvement Program (CIP) cash flow budget for Fiscal Year 2003-04 is $199.9 million, an increase of $91.6 million from the prior year estimated total. In Fiscal Year 2002-03, the District adopted a rate increase of $7.50 per year, or 9.4 percent, for all ratepayers to $87.50 per year. This increase was necessary in order to meet the District's cash flow needs as joint operating costs alone were proposed at an increase 24.9 percent due to the addition of disinfection treatment and other operating requirements. As previously mentioned, the CIP Validation Study and the Secondary Treatment Review in the Spring of 2003 developed a capital improvement program to meet secondary treatment standards as quickly as possible while providing for increased flows and rehabilitation and refurbishment of existing facilities. Over the next ten years, the CIP cash flow needs will be $2.2 billion; an annual average of nearly $220 million. On July 2, 2003, the Board adopted Ordinance No. OCSD-20 increasing sanitary sewer service charges by approximately 15% per year for each of the next five years, commencing with Fiscal Year 2003-04, thereby raising the current single family residence user rate from $87.50 to $100.00, $115.00, $132.00, $152.00, and $175.00 annually. Annual increases are ordered to be subject to reaffirmation by the affirmative vote of 2/3 of the members of the Board of Directors prior to implementation of any such change for each fiscal year commencing with Fiscal Year 2004-05. See "DISTRICT REVENUES -Sewer Service Charges." Investment of District Funds State statutes authorize the District to invest in obligations of the United States Government, state and local governmental agencies, negotiable certificates of deposits, bankers acceptances, commercial paper, reverse repurchase agreements and a variety of other investment instruments which are allowable under California Government Code Section 53600 et seq. The District's funds are managed by an external money manager, Pacific Investment Management Company ("PIMCO"). Mellon Trust ("Mellon Trust") serves as the District's independent custodian bank for its investment program. Callan Associates ("Callan") serves as the District's independent investment advisor. At June 30, 2003, the District's externally managed fund consisted of a short-term investment portfolio of$ with maturities to _ days, and a long-term investment portfolio of $ ___ _ with maturities to five years. Investments consist of United States Government securities, corporate bonds and commercial paper. The District also had $ of its funds in the California Local Agency DOCSLAl :446982.6 41758-8 GHl -38- Investment Fund ("LAIF") at June 30, 2003. The District's portfolio contains no reverse repurchase agreements. Deposits in banks are maintained in financial institutions which provide deposit protection on the bank balance from the Federal Depository Insurance Corporation. The California Government Code requires State banks and savings and loans to secure local government deposits by pledging government securities equal to 110% of the deposits or by pledging first trust deed mortgage notes equal to 150% of the deposits. The District's Investment Policy requires that the District invest public funds in a manner which ensures the safety and preservation of capital while meeting reasonable anticipated operating expenditure needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the investment of public funds. The primary objectives, in order, of the District's investment activities are safety, liquidity and return on investments. DOCSLAl :446982.6 41758-8 GHl -39- Table 15 below provides a summary of the District's portfolio distribution as of June 30, 2003. Table 15 District Investment Portfolio (as of June 30, 2003) Cost Market Value Net Unrealized Gain/Loss %of Description Shares Par Base Base Total Base Cash & Cash Equivalents U.S. Dollar Pending Trades -20.630.167.91 -20.630,167.91 -5.21% 0.00 Interest 3.904,126.48 3,904,126.48 0.99 0.00 Commercial Paper-Discount 1.000.000.000 998.896.67 998,896.67 0.25 0.00 Federal Home Loan Bank -Less than 1 year 43.150,000.000 43,033, 703.51 43,033, 703.51 10.86 0.00 Federal Home Loan Mortgage -Less than 1 year 39.600,000.000 39,464,972.70 39,464,972.70 9.96 0.00 FNMA Issues -Less than 1 year 8,450,000.000 8.420.315.67 8,420.315.67 2.13 0.00 Mutual Funds 10,667.121.130 10,667.121.13 10.667,121.13 2.69 0.00 U.S. Dollar 102,867,121.130 85,858,968.25 85,858,968.25 21.67% 0.00 Cash and Cash Equivalents 102,867,121.130 85,858,968.25 85,858,968.25 21.67% 0.00 Fixed Income Securities U.S. Dollar ABS -Airplane Receivables 1,600,000.000 1.600,000.00 240,000.00 0.06% -1.360.000.00 Banking and Finance 48,575,000.000 50.023.468. 70 51.371,963.45 12.97 1.348,494. 75 Collateralized Mongage Obligation 2.556.236.110 2,556.985.05 2,799,283.44 0.71 242,298.39 FHLMC Multi-Class 1.953,459.820 1,955.139.92 1,971,348.91 0.50 16,208.99 FHLMCPools 239,464.810 240,923.70 246.383.81 0.06 5,460.11 FNMA Pools 33, 763.054.070 35.057.613.63 35,115,795.92 8.86 58,182.29 GNMA Multi-Family Pools 4,307 ,686.560 4.286.105.30 4.440.752.66 1.12 154,647.36 GNMA Single-Family Pools 15.466.953.470 15, 787 .611.29 16,277,109.95 4.11 489.498.66 lndusttial 13.206,000.000 13.695,879.06 13,906.666.54 3.51 210,787.48 Inflation Indexed Securities 16.242.520.000 14,312,299.52 17.833,780.19 4.50 3,521,480.67 International Corporate Bonds 752.000.000 826.199.84 845,804.48 0.21 19,604.64 U.S. Agencies 50, 740,434.090 52.107,814.76 54,865,623.27 13.85 2.757,808.51 U.S. Governments 86.579,356.910 95,334,555.26 96,022,431.45 24.23 687.876.19 Utility -Electtic 6,500.000.000 6,438.210.00 7 .034,445.00 1.78 596,235.00 Utility -Telephone 6,650.000.000 7 .271.286.50 7 .40 l ,623.00 1.87 130.336.50 U.S. Dollar 289,132,165.840 301,494,092.53 310,373,012.07 78.33% 8,878,919.54 Total Fixed Income Securities 289,132,165.840 301,494,092.53 310,373,012.07 78.33% 8,878,919.54 Source: Mellon Trust. FINANCIAL OBLIGATIONS Existing Indebtedness The District has the power and authority to incur debt pursuant to Section 4 764 of the Act. In September 1992, the State Legislature enacted Senate Bill 844 which reduced the special district ad valorem property tax revenues not pledged to debt service by 35 percent. As a result, the District dedicated all future property tax revenues to the payment of debt service on their current and future outstanding debt issues. The District has no outstanding general obligation bonds. Currently the District has Senior Obligations Outstanding payable on a parity with the Installment Payments under the Installment Purchase Agreement. The table below describes the District's outstanding certificates of participation as of July l, 2003. DOCSLAl :446982.6 41758-8 GHI -40- Outstanding Certificates of Participation Debt at July 1, 2003 1992 Certificates 1993 Certificates Series 2000 Certificates Principal Amount $160,600,000 46,000,000 218,600,000 Total Long-Term Debt $425,200,000 Issue Date 12/3/92 9/2/93 8/13/00 Outstanding Balance $113,175,000 42,900,000 208,900,000 $364,975,000 Final Maturity 8/1/13 8/1/16 8/1/30 1992 Certificates. In December 1992, the District caused the execution and delivery of certain certificates of participation which were subsequently designated as the Orange County Sanitation Refunding Certificates of Participation, 1992 Series (the "1992 Certificates"). In connection with the 1992 Certificates, the District entered an Amendatory Agreement for Acquisition and Construction, dated as of October l, 1992, as amended pursuant to the Reformed Agreement for Acquisition and Construction, dated as of August l, 2000 (the "1992 Agreement for Acquisition and Construction"), by and between the District and the Corporation, a Standby Certificate Purchase Agreement, dated as of January 30, 1996, as amended (the "1992 Standby Agreement"), by and among the District, the Trustee and Barclays Bank PLC, as successor bank (the "1992 Bank") in order to provide for payment of the purchase price of tendered and unremarketed 1992 Certificates, and an Interest Rate Swap Agreement, as amended (the "1992 Swap") with AIG Financial Products Corp. (the "1992 Swap Provider"). Payments of principal and interest with respect to the 1992 Certificates are secured by a municipal bond insurance policy issued by Ambac Assurance Corporation ("Ambac"). The 1992 Certificates require annual payments of principal and interest (calculated at a rate of 5.55% per annum) ranging from $6,786,829 to $20,596,110. 1993 Certificates. In September 1993, the District caused the execution and delivery of certain certificates of participation which were subsequently designated as the Orange County Sanitation Refunding Certificates of Participation, 1993 Series (the "1993 Certificates"). In connection with the execution and delivery of the 1993 Certificates, the District entered into an Amendatory Agreement for Acquisition and Construction, dated as of September l, 1993 (the "1993 Agreement for Acquisition and Construction"), a Reimbursement Agreement, dated as of September 1, 1993, as amended (the "1993 Standby Agreement"), and an interest rate swap agreement, as amended (the "1993 Swap") with Societe Generale, New York Branch (the "1993 Swap Provider") whereby through the maturity date of the 1993 Certificates, the 1993 Swap Provider agreed, subject to the terms of the 1993 Swap, to pay to the District a floating amount equal to the interest rate evidenced by the 1993 Certificates and the District agreed to pay to the 1993 Swap Provider a fixed amount. Payments of principal and interest with respect to the 1993 Certificates are secured by a municipal bond insurance policy issued by Ambac. The 1993 Certificates require annual payments of principal and interest (calculated at the fixed swap rate of 4.56% per annum) ranging from $1,352,700 to $9,307,480. 2000 Certificates. In August 2000, the District caused the execution and delivery of the Certificates of Participation, Series 2000-A (the "Series 2000-A Certificates") and the Orange County Sanitation District Refunding Certificates of Participation, Series 2000-B ("the Series 2000-B Certificates" and together with the Series 2000-A Certificates the "Series 2000 Certificates"). In connection with the execution and delivery of the 2000 Certificates, the District entered into an Installment Purchase Agreement (the "2000 Installment Purchase Agreement") pursuant to which the District will pay Installment Payments, and the interest thereon, in amounts sufficient to pay the 2000 Certificates, the Standby Agreement, dated as of August 1, 2000 (the "2000 Standby Agreement"), and an interest rate swap agreement, as amended (the "2000 Swap") with PaineWebber Trading Inc. ("PaineWebber") and Wachovia Bank, N.A. (the "Contingent Swap Provider," and together with DOCSLAI :446982.6 41758-8 GHI -41- PaineWebber, the "2000 Swap Provider") with respect to $12,420,000 principal amount of the 2000 Certificates, whereby through the August 1, 2004 serial maturity of the 2000 Certificates, the 2000 Swap Provider agreed, subject to the terms of the 2000 Swap, to pay to the District a floating amount equal to the interest rate evidenced by such portion of the 2000 Certificates and the Predecessor Districts agreed to pay to the 2000 Swap Provider a fixed amount. Payments of prii:icipal and interest with respect to the 2000 Certificates are secured by a municipal bond insurance policy issued by Ambac. The amounts payable by the District under the 1992 Agreement for Acquisition and Construction, the 1993 Agreement for Acquisition and Construction, 2000 Installment Purchase Agreement, the 1992 Swap, the 1993 Swap and the 2000 Swap constitute Senior Obligations under the Master Agreement and are on a parity with the District's payment obligations with respect to the Certificates. The 1992 Standby Agreement, the 1993 Standby Agreement and the 2000 Standby Agreement each constitutes a Credit Facility Agreement and a Credit Facility. The obligation of the District to repay amounts drawn on or paid under the 1992 Standby Agreement, the 1993 Standby Agreement and the 2000 Standby Agreement, to pay interest on such amounts and to pay any other amounts in connection with such draw or payment constitutes a Reimbursement Obligation, each with respect to a Senior Obligation; provided, however, that no portion of any such obligation shall be deemed to be a Reimbursement Obligation if the payment thereof would duplicate any amount payable to the provider of such standby agreement as owner of a certificate. In the event Ambac makes any payment of principal and interest with respect to the 1992 Certificates, the 1993 Certificates and the 2000 Certificates, Ambac will become fully subrogated to the rights to payment with respect to such certificates. Anticipated Financings Over the next ten years, the District projects $2.2 billion in future wastewater treatment improvements and in future collection system capital improvements. Sixty percent of these improvements are expected to be funded through current revenues and the balance will be funded through the issuance of new debt. The District expects to cause to be executed and delivered approximately $1.4 billion in certificates of participation over the next ten years. Payments with respect to any such indebtedness are expected to be executed and delivered as Additional Obligations under the Master Agreement on a parity with the Installment Payments. DOCSLAI :446982.6 41758-8 GHI -42- Direct and Overlapping Bonded Debt The Table 16 below presents the aggregate direct and overlapping bonded debt of the District as of June 30, 2003. Table 16 Direct and Overlapping Bonded Debt of the District as of June 30, 2003 2002-03 Assessed Valuation (Land & Improvements Only): Redevelopment Incremental Valuation: Adjusted Assessed Valuation: OVERLAPPING TAX AND ASSESS.MENT DEBT $188,880, 177,601 18,583, 723,645 $170,296,453,956 (Based on redevelopment adjusted all property assessed valuation of $177 ,302, 740, l l 8): Orange County Teeter Plan Obligations Metropolitan Water Disnict of Southern California Coast Community College Disnict North Orange County Joint Community College Disnict Rancho Santiago Community College Disnict Brea-Olinda and Laguna Beach Unified School Disnicts Newport Mesa Unified School Disnict Placentia-Yorba Linda Unified School Disnict Santa Ana Unified School Disnict Anaheim and Fullerton Joint Union High School Districts School Disnicts Cities Irvine Ranch Water Disnict Improvement Disnicts Yorba Linda County Water District, l.D. Nos. I and 2 Other Special Districts Bonita Canyon Community Facilities District No. 98-1 Irvine Unified School District Community Facilities District No. 86-1 Tustin Unified School District Community Facilities District No. 88-1 and 97-1 Orange County Community Facilities District No. 87-4 Other Community Facilities Disnicts Orange County Assessment Disnicts City of Irvine 1915 Act Bonds City of Tustin 1915 Act Bonds Other 1915 Act bonds TOT AL OVERLAPPING TAX AND ASSESSMENT DEBT DOCSLAI :446982.6 41758-8 GHI -43- % Applicable 72.984% 15.661 99.521 96.978 98.099 97.686 & 5.597 99.999 98.553 100. 100. 100. Various Various 93.257 & 100. 100. 100. 99.997 100. 99.961 Various 100. 100. 100. Various Debt 6/30/03 $ 90,810,342 69,581,040 109,473,100 134, 799,420 94,297,664 17,842,876 39,499,605 44,346,682 144.233,156 126,322,735 142,795,664 7,667,801 232,244,536 3,833,594 825,000 44,580,000 102,251,932 164, 182,000 73,927,291 246,515,866 106,596,008 720,601,022 66,964,000 28,233,996 $2,812,425,330 (continued) Table 16 -Direct and Overlapping Bonded Debt of the District as of June 30, 2003 DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT: % APPiicable Debt 6/30/03 Orange County General Fund Obligations Orange County Pension Obligations Orange County Board of Education Certificates of Participation Orange County Transit District Authority Coast Community College District Certificates of Participation South Orange County Community College District Certificates of Participation Brea-Olinda Unified School District Certificates of Participation Orange Unified School District Certificates of Participation Santa Ana Unified School District Certificates of Participation Other Unified School District Certificates of Participation Anaheim and Fullerton Union High School District Certificates of Participation School District Certificates of Participation City of Anaheim General Fund Obligations City of Fullerton General Fund Obligations City of Huntington Beach General Fund Obligations City of Irvine General Fund Obligations City of Santa Ana General Fund Obligations Other City General Fund Obligations Orange County Sanitation District Certificates of Participation Irvine Ranch Water District Certificates of Participation Municipal Water District of Orange County Water Facilities Corporation Orange County Fire Authority Other Special District Certificates of Participation TOTAL GROSS OVERLAPPING GENERAL FUND OBLIGATION DEBT Less: Orange County Transit District Authority (80% self-supporting) City of Anaheim self-supporting obligations Other City self-supporting obligations MWDOC Water Facilities Corporation (100% self-supporting) TOT AL NET OVERLAPPING GENERAL FUND OBLIGATION DEBT GROSS COMBINED TOTAL DEBT NET COMBINED TOT AL DEBT ( 1) Excludes the Certificates referred to in this Official Statement. 72.984% 72.984 72.984 72.984 99.521 34.158 97.686 96.196 100. Various Various Various 99.174 100. 99.984 100. 100. Various 100. 88.478 67.417 44.805 100. $ 711,731,940 88,144,596 14,582,203 4,506,762 8,081,105 14,739,177 32,783,422 50,983,880 50,400,849 14,799,639 32,252,631 27,225,126 713,080,451 38,208,443 84,332,518 53,520,000 138,805,489 153,574,763 156,075,000 {I) 44,946,824 32,282,630 11,358,068 145,000 $2,4 76,560,516 3,605,410 648,413,233 524,942 32,282,630 $1, 791, 734,301 $5,288,985,846 m $4,604,159,631 (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Ratios to: Total Overlapping Tax and Assessment Debt Combined Direct Debt ($156,075,000) Gross Combined Total Debt Net Combined Total Debt 2002-03 Land and Improvement Assessed Valuation 1.49% Adjusted Land & Improvement 0.09% 3.11 2.70 STA TE SCHOOL BUILDING AID REPAY ABLE AS OF 6/30/02: $24,796,482 Source: California Municipal Statistics, Inc. THE CORPORATION Adjusted All Property Assessed Valuation 0.09% 2.98 2.60 The Corporation was organized June 19, 2000 as a nonprofit public benefit corporation pursuant to the Nonprofit Public Corporation law of the State. The Corporation's purpose is to render assistance to DOCSLAI :446982.6 41758-8 GHI -44- the District in its acquisition of equipment, real property and improvements on behalf of the District. Under its articles of incorporation, the Corporation has all powers conferred upon nonprofit public benefit corporations by the laws of the State, provided that it will not engage in any activity other than that which is necessary or convenient for, or incidental to the purposes for which it was formed. The Corporation is a separate legal entity from the District. It is governed by a twenty-five member Board of Directors. The Corporation has no employees. All staff work is performed by employees of the District. The members of the Corporation's Board of Directors are the Board of Directors of the Orange County Sanitation District. The District's Director of Finance and other District employees are available to provide staff support to the Corporation. The Corporation has not entered into any material financing arrangements other than those referred to in this Official Statement. Further information concerning the Corporation may be obtained from the Orange County Sanitation District office at 10844 Ellis Avenue, Fountain Valley, California, 92708-7018. LIMITATIONS ON TAXES AND REVENUES Article XIlIA of the California Constitution On June 6, 1978, California voters approved Proposition 13 ("Proposition 13"), which added Article XIIIA to the State Constitution ("Article XIIIA"). Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to one percent of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service on (i) indebtedness approved by the voters prior to July 1, 1978, (ii) (as a result of an amendment to Article XIIIA approved by State voters on June 3, 1986) on bonded indebtedness for the acquisition or improvement of real property which has been approved on or after July 1, 1978 by two-third of the voters on such indebtedness, and (iii) bonded indebtedness incurred by a school district or community college district for the construction, reconstruction, rehabilitation or replacement of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters of the district, but only if certain accountability measures are included in the proposition. Article XIIIA defines full cash value to mean "the county assessor's valuation of real property as shown on the 1975-76 tax bill under "full cash value," or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment." This full cash value may be increased at a rate not to exceed two percent per year to account for inflation. Article XIIIA has subsequently been amended to permit reduction of the "full cash value" base in the event of declining property values caused by damage, destruction or other factors, to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a disaster, and in other minor or technical ways. On December 27, 2001, the Orange County Superior Court held in the case of County of Orange v. Orange County Assessment Appeals Board No. 3, case no. OOCC03385, that where a home's taxable value did not increase for two years, due to a flat real estate market, the Orange County assessor violated the two percent inflation adjustment provision of Article XIllA, when the assessor tried to "recapture" the tax value of the property by increasing its assessed value by 4% in a single year. The assessors in all California counties use a similar methodology in raising the taxable values of property beyond 2% in a single year. The State Board of Equalization has approved this methodology for increasing assessed values. On December 12, 2002, the Orange County Superior Court ruled in favor of a motion to restate DOCS LA I :446982.6 41758-8 GHI -45- the complaint as a class action. This case will go to the State 4th District Court of Appeal, and if it is upheld on appeal, the decision could have far-reaching implications for the property tax system in California. The District is unable to predict the outcome of this litigation and what effect, if any, it might have on assessed values in the District. Legislation Implementing Article XIIIA Legislation has been enacted and amended a number of times since 1978 to implement Article XIDA. Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter-approved indebtedness). The one percent property tax is automatically levied by the County and distributed according to a formula among taxing agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1989. Increases of assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the two percent annual adjustment are allocated among the various jurisdictions in the "taxing area" based upon their respective "situs." Any such allocation made to a local agency continues as part of its allocation in future years. Beginning in the 1981-82 fiscal year, assessors in the State no longer record property values on tax rolls at the assessed value of 25% of market value which was expressed as $4 per $100 assessed value. All taxable property is now shown at full market value on the tax rolls. Consequently, the tax rate is expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100% of market value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value. Article XIlIB of the California Constitution An initiative to amend the State Constitution entitled "Limitation of Government Appropriations" was approved on September 6, 1979, thereby adding Article XIIIB to the State Constitution ("Article XIIIB"). Under Article XIIIB, the State and each local governmental entity has an annual "appropriations limit" and is not permitted to spend certain moneys that are called "appropriations subject to limitation" (consisting of tax revenues, state subventions and certain other funds) in an amount higher than the appropriations limit. Article XIIIB does not affect the appropriations of moneys that are excluded from the definition of "appropriations subject to limitation," including debt service on indebtedness existing or authorized as of January 1, 1979, or bonded indebtedness subsequently approved by the voters. In general terms, the appropriations limit is to be based on certain 1978-79 expenditures, and is to be adjusted annually to reflect changes in consumer prices, populations, and services provided by these entities. Among other provisions of Article XIIIB, if these entities' revenues in any year exceed the amounts permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years. "Appropriations subject to limitation" are authorizations to spend "proceeds of taxes," which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed "the cost reasonably borne by such entity in providing the regulation, product or service," but "proceeds of taxes" excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on appropriations of funds which are not "proceeds of taxes," such as reasonable user charges or fees, and certain other non- tax funds. Not included in the Article XIIIB limit are appropriations for the debt service costs of bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations DOCSLAI :446982.6 41758-8 GHI -46- required to comply with mandates of courts or the federal government and appropriations for qualified capital outlay projects. The appropriations limit may also be exceeded in certain cases of emergency. The appropriations limit for the District in each year is based on the District's limit for the prior year, adjusted annually for changes in the cost of living and changes in population, and adjusted, where applicable, for transfer of financial responsibility of providing services to or from another unit of government. The change in the cost of living is, at the District's option, either (1) the percentage change in State per capita personal income, or (2) the percentage change in the local assessment roll on nonresidential property. Either test is likely to be greater than the change in the cost of living index, which was used prior to Proposition 111. Change in population is to be measured either within the jurisdiction of the District or the County as a whole. As amended by Proposition 111, the appropriations limit is tested over consecutive two-year periods. Any excess of the aggregate "proceeds of taxes" received by a District over such two-year period above the combined appropriations limits for those two years is to be returned to taxpayers by reductions in tax rates or fee schedules over the subsequent two years. As originally enacted in 1979, the District's appropriations limit was based on 1978-79 authorizations to expend proceeds of taxes and was adjusted annually to reflect changes in cost of living and population (using different definitions, which were modified by Proposition 111). Starting with Fiscal Year 1990-91, the District's appropriations limit was recalculated by taking the actual Fiscal Year 1986-87 limit, and applying the annual adjustments as if Proposition 111 had been in effect. The District does not anticipate that any such appropriations limitations will impair its ability to make its Installment Payments as required by the Installment Purchase Agreement. Proposition 62 On November 4, 1986, California voters adopted Proposition 62, a statutory initiative which amended the California Government Code by the addition of Sections 53720-53730. Proposition 62 requires that (i) any local tax for general governmental purposes (a "general tax") must be approved by a majority vote of the electorate; (ii) any local tax for specific purposes (a "special tax") must be approved by a two-thirds vote of the electorate; (iii) any general tax must be proposed for a vote by two-thirds of the legislative body; and (iv) proceeds of any tax imposed in violation of the vote requirements must be deducted from the local agency's property tax allocation. Provisions applying Proposition 62 retroactively from its effective date to 1985 are unlikely to be of any continuing importance; certain other restrictions were already contained in the Constitution. Most of the provisions of Proposition 62 were affirmed by the 1995 California Supreme Court decision in Santa Clara County Local Transportation Authority v. Guardino, which invalidated a special sales tax for transportation purposes because fewer than two-thirds of the voters voting on the measure had approved the tax. The District has not imposed any taxes subject to the provisions of Proposition 62 and believes that it will not impair its ability to make its Installment Payments as required by the Installment Purchase Agreement. The requirements of Proposition 62 have generally been superseded by the enactment of Article XDIC of the Constitution (Proposition 218) in 1996. Article XIlIC and Article XIIID of the California Constitution On November 5, 1996, the voters of the State approved Proposition 218, the so-called "Right to Vote on Taxes Act." Proposition 218 added Articles XillC and XillD to the State Constitution, which contain a number of provisions affecting the ability of local, including the District, to levy and collect both existing and future taxes, assessments, fees and charges. Proposition 218 became effective on November 6, 1996. Senate Bill 919 was enacted to provide certain implementing provisions for DOCSLAl :446982.6 41758-8 OHi -47- Proposition 218 and became effective July 1, 1997. The District is unable to predict whether and to what extent Proposition 218 may be held to be constitutional or how its terms will be interpreted and applied by the courts. Proposition 218 could substantially restrict the District's ability to raise future revenues and could increase the District's costs to hold elections, calculate fees and assessments, notify the public and defend its fees and assessments in court. Further, as described below, Proposition 218 provides for broad initiative powers to reduce or repeal assessments, fees and charges. This initiative power is not limited by the terms of Proposition 218 to fees imposed after November 6, 1996 and absent other legal authority could result in retroactive reduction in any existing taxes, assessments or fees and charges, However, other than any impact resulting from the exercise of this initiative power, presently the District does not believe that the potential financial impact on the financial condition of the District as a result of the provisions of Proposition 218 will adversely affect the District's ability to pay the principal of and interest on the Installment Payments evidenced by the Certificates as and when due. Article XIIID of Proposition 218 also adds several provisions affecting "fees" and "charges" which are defined as "any levy other than an ad valorem tax, a special tax, or an assessment, imposed by a local agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property related service." All new and, after June 30, 1998, existing property related fees and charges must conform to requirements prohibiting, among other things, fees and charges which (i) generate revenues exceeding the funds required to provide the property related service, (ii) are used for any purpose other than those for which the fees and charges are imposed, (iii) are for a service not actually used by, or immediately available to, the owner of the property in question, or (iv) are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners. Further, before any property related fee or charge may be initially imposed or increased, written notice must be given to the record owner of each parcel of land affected by such fee or charge. The District must then hold a hearing upon the proposed imposition or increase of such property based fee, and if written protests against the proposal are presented by a majority of the owners of the identified parcels, the District may not impose or increase the fee or charge. Moreover, except for fees or charges for sewer, water and refuse collection services, no property related fee or charge may be imposed or increased without majority approval by the property owners subject to the fee or charge or, at the option of the local agency, two-thirds voter approval by the electorate residing in the affected area. The District implemented a five-year plan beginning in Fiscal Year 2002-03 which included a rate increase of $7.50 per year, or 9.4 percent, for all ratepayers to $87.50 per year. In May 2003, the Board approved consideration of a 15 percent rate increase a year, for each year, over the next five years. This level of increase was considered necessary to provide needed capital improvements, to cover additional treatment and disinfection costs, and to minimize rate increases over an extended period of time. On July 2, 2003, the Board adopted Ordinance No. OCSD-20 increasing sanitary sewer service charges for all single family and multi-family residential units as well as most commercial and industrial properties. The Ordinance was adopted by a 2/3ds vote of the Board as required under law after conducting a noticed public hearing in compliance with all laws. The Ordinance increases the amount of the annual charges by approximately 15% per year for each of the next five years, commencing with Fiscal Year 2003-04, thereby raising the current single family residence user rate from $87 .50 to $100.00, $115.00, $132.00, $152.00, and $175.00 annually through 2007-08. Annual increases are ordered to be subject to reaffirmation by the affirmative vote of 2/3 of the members of the Board of Directors prior to implementation of any such change for each fiscal year commencing with Fiscal Year 2004-05. See "DISTRICT REVENUES -Sewer Service Charges" herein. Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix, prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to yield during each Fiscal Year (a) Net Revenues equal to 125% of Debt Service on Senior Obligations for DOCS LAI :446982.6 41758-8 GHl -48- such Fiscal Year, and (b) Net Operating Revenues equal to I 00% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be sufficient to meet the requirements of the Master Agreement. In the event that service charges are determined to be subject to Article xmD, and proposed increased service charges cannot be imposed as a result of a majority protest, such circumstances may adversely effect the ability of the District to generate revenues in the amounts required by the Master Agreement, and to make Installment Payments as provided in the Installment Purchase Agreement. LEGAL MATTERS The validity of the Certificates and certain other legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe LLP, Los Angeles, California, Special Counsel. A complete copy of the proposed form of Special Counsel opinion is contained in Appendix E hereto. Special Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Certain legal matters will be passed upon for the District by its counsel, Woodruff, Spradlin & Smart, a Professional Corporation, Orange, California. FINANCIAL ADVISOR The District has retained Public Resources Advisory Group as financial advisor (the "Financial Advisor") in connection with the issuance of the Certificates. The Financial Advisor has not been engaged, nor has it they undertaken, to audit, authenticate or otherwise verify the information set forth in the Official Statement, or any other related information available to the District, with respect to accuracy and completeness of disclosure of such information. The Financial Advisor has reviewed the Official Statement but makes no guaranty, warranty or other representation respecting accuracy and completeness of the information contained in the Official Statement. ABSENCE OF LITIGATION There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or, to the best knowledge of the District, threatened against the District affecting the existence of the District or the titles of its directors or officers to their offices or seeking to restrain or to enjoin the sale or delivery of the Certificates, the application of the proceeds thereof in accordance with the Trust Agreement, or in any way contesting or affecting the validity or enforceability of the Certificates, the Trust Agreement, the Master Agreement, the Installment Purchase Agreement or any action of the District contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement, or contesting the powers of the District or its authority with respect to the Certificates or any action of the District contemplated by any of said documents, nor, to the knowledge of the District is there any basis therefor. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or, to the best knowledge of the District, threatened against the District contesting or affecting the ability of the District to collect amounts from which Installment Payments are payable, or which would have a material adverse effect on the District, including the District's ability to make Installment Payments. · DOCSLAI :446982.6 41758-8 GHI -49- FINANCIAL STATEMENTS The general purpose financial statements of the District included in Appendix A to this Official Statement have been audited by Moreland & Associates, Inc., independent certified public accountants. See APPENDIX A -"COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30, 2002" herein. The audited financial statements, including the footnotes thereto, should be reviewed in their entirety. Moreland & Associates, Inc. has not consented to the inclusion of its report as Appendix A and has not undertaken to update its report or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is expressed by Moreland & Associates, Inc. with respect to any event subsequent to its report dated August 30, 2002. TAX MATTERS In the opinion of Orrick, Herrington & Sutcliffe LLP, Los Angeles, California, Special Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest evidenced by the Certificates is excluded from gross income for federal income tax purposes under Section I 03 of the Internal Revenue Code of 1986 (the "Code") and is exempt from State personal income taxes. Special Counsel is of the further opinion that interest evidenced by the Certificates is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Special Counsel observes that such interest is included in adjusted current earnings in calculating corporate alternative minimum taxable income. A complete copy of the proposed form of opinion of Special Counsel is set forth in Appendix E hereto. To the extent the issue price of any maturity of the Certificates is less than the amount to be paid at maturity of such Certificates (excluding amounts stated to be interest and payable at least annually over the term of such Certificates), the difference constitutes "original issue discount," the accrual of which, to the extent properly allocable to each owner thereof, is treated as interest evidenced by the Certificates which is excluded from gross income for federal income tax purposes and State of California personal income taxes. For this purpose, the issue price of a particular maturity of the Certificates is the first price at which a substantial amount of such maturity of the Certificates is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Certificates accrues daily over the term to maturity of such Certificates on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Certificates to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Certificates. Owners of the Certificates should consult their own tax advisors with respect to the tax consequences of ownership of Certificates with original issue discount, including the treatment of purchasers who do not purchase such Certificates in the original offering to the public at the first price at which a substantial amount of such Certificates is sold to the public. Certificates purchased, whether at original execution and delivery or otherwise, for an amount greater than their principal amount payable at maturity (or, in some cases, at their earlier call date) ("Premium Certificates") will be treated as having amortizable premium. No deduction is allowable for the amortizable premium in the case of obligations, like the Premium Certificates, the interest evidenced by which is excluded from gross income for federal income tax purposes. However, a purchaser's basis in a Premium Certificate, and under Treasury Regulations the amount of tax exempt interest received, will be reduced by the amount of amortizable premium properly allocable to such purchaser. Owners of DOCSLAl :446982.6 41758-8 GHl -50- Premium Certificates should consult their own tax advisors with respect to the proper treatment of amortizable premium in their particular circumstances. The Code imposes various requirements that must be met in order for interest evidenced by the Certificates to be excluded from gross income for federal income tax purposes. The District and the Corporation have made representations related to certain of these requirements and have covenanted to comply with certain of these requirements. Inaccuracy of these representations or failure to comply with these covenants may result in interest evidenced by the Certificates being included in gross income for federal income tax purposes, possibly from the date of original execution and delivery of the Certificates. The opinion of Special Counsel assumes the accuracy of these representations and compliance with these covenants. Special Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of execution and delivery of the Certificates may adversely affect the value of, or the tax status of interest evidenced by, the Certificates. Certain requirements and procedures contained or referred to in the Trust Agreement, the Master Agreement, the Installment Purchase Agreement, the Tax Certificate, and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Certificates) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Special Counsel expresses no opinion as to any Certificate or the interest evidenced thereby if any such change occurs or action is taken or omitted upon the advice or approval of special counsel other than Orrick, Herrington & Sutcliffe LLP. Although Special Counsel is of the opinion that interest evidenced by the Certificates is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of interest evidenced by, the Certificates, may otherwise affect a Certificate Owner's federal or state tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the Certificate Owner or the Certificate Owner's other items of income or deduction. Special Counsel expresses no opinion regarding any such other tax consequences. In addition, no assurance can be given that any future legislation, including amendments to the Code, if enacted into law, or changes in interpretation of the Code, will not cause interest evidenced by the Certificates to be subject, directly or indirectly, to federal income taxation, or otherwise prevent owners of the Certificates from realizing the full current benefit of the tax status of such interest. Prospective purchasers of the Certificates should consult their own tax advisers regarding any pending or proposed federal tax legislation. Further, no assurance can be given that the introduction or enactment of any such future legislation, or any action of the Internal Revenue Service ("IRS"), including but not limited to regulation, ruling, or selection of the Certificates for audit examination, or the course or result of any IRS examination of the Certificates, or obligations which present similar tax issues, will not affect the market price for the Certificates. CONTINUING DISCLOSURE The District has covenanted for the benefit of holders and beneficial owners of the Certificates (a) to provide certain financial information and operating data (the "Annual Report") relating to the District and the property in the Districts not later than eight (8) months after the end of the District's Fiscal Year (which currently would be March I}, commencing with the report for the 2002-03 Fiscal Year, and (b) to provide notices of the occurrence of certain enumerated events, if material. The Annual Report will be filed by the Trustee on behalf of the District, with each Nationally Recognized Municipal Securities Information Repository and with each State Repository, if any. The notices of material events will be DOCSLAl :446982.6 41758-8 GHI -51- filed by the Trustee on behalf of the District with the Municipal Securities Rulemaking Board and with each State Repository, if any. The specific nature of the information to be contained in the Annual Report or the notices of material events is set forth in the Continuing Disclosure Agreement. See "APPENDIX C -FORM OF CONTINUING DISCLOSURE AGREEMENT." These covenants have been made in order to assist the Initial Purchaser in complying with S.E.C. Rule 15c2-12(b)(5) (the "Rule"). The District has not failed to comply in all material respects with any previous undertaking with respect to the Rule to provide annual reports or notices of material events. RATINGS The Certificates are rated"_,""_," and"_" by Fitch Ratings, Moody's Investors Service and Standard & Poor' s, respectively. Such ratings reflect only the views of the rating agencies, and do not constitute a recommendation to buy, sell or hold the Certificates. Explanation of the significance of such ratings may be obtained only from the respective organizations at: Fitch Ratings, One State Street Plaza, New York, New York 10004; Moody's Investors Service, 99 Church Street, New York, New York 10017; and Standard & Poor' s Ratings Group, 55 Water Street, New York, New York 10041. There is no assurance that any such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the respective rating agencies, if in the judgment of any such rating agency circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Certificates. PURCHASE AND REOFFERING _____ (the "Initial Purchaser") has purchased the Certificates from the District at a competitive sale at an aggregate purchase price of $ (representing the aggregate principal amount of the Certificates, plus a premium of $ , less a purchaser discount of $ ). The public offering prices may be changed from time to time by the Initial Purchaser. The Initial Purchaser may offer and sell Certificates to certain dealers and others at prices lower than the offering prices shown on the cover page hereof. MISCELLANEOUS Included herein are brief summaries of certain documents and reports, which summaries do not purport to be complete or definitive, and reference is made to such documents and reports for full and complete statements of the contents thereof. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the District and the purchasers or Owners of any of the Certificates. The execution and delivery of this Official Statement has been duly authorized by the District. DOCSLAl :446982.6 41758-8 GHI ORANGE COUNTY SANITATION DISTRICT Chair of the Board of Directors -52- DOCSLAl :446982.6 41758-8 GHI APPENDIX A COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30, 2002 A-1 APPENDIXB THE COUNTY OF ORANGE-ECONOMIC AND DEMOGRAPmc INFORMATION The County is bordered on the north by Los Angeles County. on the east by Riverside County. on the southeast by San Diego County and on the west and southwest by the Pacific Ocean. Approximately 42 miles of ocean shoreline provide beaches. marinas and other recreational areas for use by residents and visitors. The climate in the County is mild, with an average annual rainfall of 13 inches. Population The County is the second most populous county in the State and the fifth most populous in the nation. During the period 1992 through 2003, the population of the County increased by approximately 17.6, compared to 13.3 for the State and 12.4% for the United States. TABLEB-1 COUNTY OF ORANGE, STATE OF CALIFORNIA AND UNITED STA TES POPULATION GROWTH Year 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 11 as of January 1 of each year. 21 as of July 1 of each year. Orange County(l> State of California0 ' 2,485,200 30,723,000 2,531,100 31,150,000 2,563,100 31,418,000 2,590,100 31,617,000 2,625,300 31,837,000 2,672,800 32,207,000 2,724,500 32,657,000 2,776,100 33,140,000 2,829,800 33,753,000 2,880,600 34,367,000 2,930,500 35,000,000 2,978,800 35,591,000 United States of America<2> 256,514,224 259,918,588 263,125,821 266,278,393 269,394,284 272,646,925 275,854,104 279,040,168 282,224,348 285,317 ,559 288,368,698 291,353,261 Source: Orange County and State of California Statistics -California State Department of Finance. Demographic Research Unit. United States Statistics -U.S. Census Bureau. Public Schools (Elementary and Secondary) Public instruction in the County is provided by twelve elementary school districts, three high school districts and twelve unified (combined elementary and high school) districts. For the fall of the 2001-02 academic year, the largest district, the Santa Ana Unified School District, had 61,909 students enrolled. Public school enrollment for the academic calendar years 1997-98 through 2001-02 is presented in Table B-2. DOCSLAl :446982.6 41758-8 GHl B-1 Grade Level K-8 9-12 Total Enrollment 1997-98 328,635 129.854 458.489 TABLEB-2 COUNTY OF ORANGE PUBLIC SCHOOL ENROLLMENT 1998-99 336,571 134.833 471.404 1999-00 345,362 137.998 483.360 2000-01 353,420 140.758 494.178 Source: Orange County. Department of Education, California Basic Educational Data Systems Repon. 2002. Colleges and Universities 2001-02 359,552 143.799 503.351 The County has a number of top-rated, college-level educational institutions, including the University of California at Irvine and California State University at Fullerton, several private colleges, universities and law schools and four community college districts. Employment The following table summarizes the historical numbers of workers in the County for the past five years by industry. TABLEB-3 COUNTY OF ORANGE INDUSTRYEMPLOYMENTANDLABORFORCE-ANNUALAVERAGE 1998 1999 2000 2001 Agriculture 6,600 7,000 7,600 7,100 Mining & Construction 66,400 74,500 78,200 81,000 Manufacturing 231,700 229,400 230,500 225,200 Transportation & Public Utilities 46,300 48,600 50,900 52,300 Wholesale & Retail Trade 98,300 99,900 100,200 101,800 Retail Trade 224,200 231,600 239,500 247,200 Finance, Insurance & Real Estate 100,400 104,200 105,800 111,800 Services 395,600 415,900 437,100 448,300 Government 136.400 1412100 1462600 1502900 Total All Industries 1.305.800 1.352.100 1.396.500 1.425.400 Source: California Employment Development Depanment. 2002 5,200 83,700 213,200 50,600 101,200 252,500 114,600 450,000 1592700 1.430.700 * Does not include proprietors, self-employed. unpaid volunteers or family workers. domestic workers in households, and persons involved in labor/management trade disputes. Employment reported by place of work. Items may not add to totals due to independent rounding. DOCSLAl :446982.6 41758-8 GHI B-2 Major Employers TABLEB-4 COUNTY OF ORANGE TOP TEN EMPLOYERS Employer Name Walt Disney Company County of Orange University of California, Irvine Boeing Company Albertsons, Incorporated St. Joseph Health System Tenet Healthcare Corporation SBC Communications, Inc. (Pacific Bell, Singular Wireless) Target Corp. Bank of America Corp. Source: Orange County Business Council, 2002 Labor Force, Employment and Unemployment Number of Employees 21,275 16,607 14,981 11,179 9~500 9,435 8,389 7,100 4,878 4,813 Table B-5 summarizes the labor force, employment and unemployment figures over the period 1993 through 2002 for the County and the State. DOCSLAl :446982.6 41758-8 GHl B-3 TABLEB-5 COUNTY OF ORANGE AND STATE OF CALIFORNIA LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT YEARLY AVERAGE Civilian Civilian Civilian Civilian Unemployment Year and Area Labor Force Employment Unemployment Rate 1993 Orange County 1,332,400 1,242,700 89,700 6.7 California 15,359,500 13,918,300 1,441,200 9.4 1994 Orange County 1,347,800 1,271,300 76,500 5.7 California 15,450,000 14,122,100 1,327,900 8.6 1995 Orange County 1,331,000 1,263,300 67,700 5.1 California 15,412,200 14,202,900 1,209,400 7.8 1996 Orange County 1,340,100 1,285,100 55,000 4.1 California 15,511,600 14,391,500 1,120,100 7.2 1997 Orange County 1,385,100 1,339,900 45,200 3.3 California 15,947,200 14,942,500 l,004,700 6.3 1998 Orange County 1,435,100 1,393,700 41,400 2.9 California 16,336,500 15,367,500 969,000 5.9 1999 Orange County 1,471,700 1,432,700 39,000 2.6 California 16,596,500 15,731,700 864,800 5.2 2000 Orange County 1,502,100 1,463,900 38,200 2.5 California 16,884,200 16,048,900 835,300 4.9 2001 Orange County 1,540,500 1,493,300 46,900 3.0 California 17,182,900 16,260,100 922,800 5.4 2002 Orange County 1,559,700 1,495,100 64,600 4.1 California 17,404,600 16,241,800 l,162,800 6.7 Source: Califomia Employment Development Department. Note: Figures may not add due to rounding. Personal Income Table B-6 summarizes the total effective buying income for the County, the State and the United States for 1996 through 2001. DOCSLAI :446982.6 41758-8 GHI B-4 ~ 1996 Orange County California United States 1997 Orange County California United States 1998 Orange County California United States 1999 Orange County California United States 2000 Orange County California United States 2001 Orange County California United States TABLEB-6 COUNTY OF ORANGE, STA TE OF CALIFORNIA AND UNITED STA TES PERSONAL INCOME (In Thousands) Total Median Household Effective Buying Income* Effective Buying Income* $ 44,978,643 $42,747 492,516,991 35,216 4,161,512,384 33,482 48,027,189 42,715 524,439,600 36,483 4,399,998,035 34,618 50,605,637 45,176 551,999,317 37,091 4,621,491,073 35,377 55,179,528 48,773 590,376,663 39,492 4,877 ,786,658 37,233 62,330,828 55,262 652, 190,282 44,464 5,230,824,904 39,129 62,568,674 53,277 650,521,407 43,532 5,303,481,498 38,365 Source: Sales and Marketing Management "Survey of Buying Power" . * .. Effective Buying Income," also referred to as .. disposable" or .. after tax" income, consists of personal income less personal tax and certain non-tax payments. Personal income includes wages and salaries, other labor-related income (such as employer contributions to private pension funds), and certain other income (e.g. proprietor's income; rental income; dividends and interest; pensions; Social Security; unemployment compensation; and welfare assistance). Deducted from this total are personal taxes (federal, state and local), certain non-tax payments (e.g. fines. fees and penalties), and personal contributions to a retirement program. DOCSLAI :446982.6 41758-8 GHl B-5 Taxable Sales Table B-7 summarizes the annual volume of taxable transactions since 1998. Type of Business Apparel Stores General Merchandise Specialty Stores Food Stores Eating and Drinking Places Home Furnishings and Appliances Building Materials & Farm Implements Auto Dealers & Auto Supplies Service Stations Other Retail Stores Retail Stores Totals Business & Personal Services All Other Outlets TOTAL ALL OUTLETS TABLEB-7 COUNTY OF ORANGE TAXABLE TRANSACTIONS (In Thousands) 1998 1999 2000 $ 1,361,470 $ 1,211,410 $ 1,364,366 3,650,906 4,067,855 4,334,887 4,122,837 4,609,085 5,119,964 1,359,193 1,436,680 1,509,744 2,990,871 3,247,127 3,535,316 1,206,212 1,358,467 1,486,155 1,686,679 1,943,993 2,109,093 4,004,318 4,525,330 5,186,855 1,528,266 1,798,943 2,191,674 545,355 589,684 646,935 22,456,107 24,788,574 27,484,989 2,338,242 2,441,463 2,625,459 12,314,001 13,136,053 14,352,012 $37 ,108,350 $40,366,090 $44,462,460 Source: California State Board of Equali:.ation. m Data available through Second Quarter, 2002. Housing Characteristics 2001 $ 1,446,572 4,432,881 4,999,099 1,534,244 3,749,604 1,501,585 2,249,892 5,746,179 2,211,581 647,064 28,518,701 2,673,666 13,402,947 $44,595,314 2002(1) $ 680,649 2,045,781 2,255,805 765,490 1,906,628 746,364 1,146,645 3,014,276 1,011,651 329,405 13,902,694 1,264,508 6,279,768 $21,446,970 The total number of housing units in the County was estimated by the California State Department of Finance to be 986,606 as of January l, 2002. This compares to 976,699 reported by the Department of Finance in January 2001. According to Data Quick Information Systems, the median resale price of single-family homes in Orange County was $383,000 in November 2002. This compares to $279,000 for the State of California. Building Permits The total valuation of residential building permits issued in the County reached $1.9 billion in 2002, which represents about a 21.2% increase relative to 2001. Table B-8 provides a summary of residential building permit valuations and the number of new dwelling units authorized in the County during the period 1998 through 2002. DOCSLAl :446982.6 41758-8 GHI B-6 TABLEB-8 COUNTY OF ORANGE RESIDENTIAL BUILDING PERMIT V ALUA TIO NS AND PERMITS ISSUED (In Thousands) 1998 1999 2000 2001 Valuation (In OOO's) 2002 Residential $1,610,587 $2,013,489 $1,985,30 $1,616,125 $1,960,085 New Dwelling Units (#) Single-Family 7.285 7,679 6,87 6,010 6,823 Multi-Family 2.419 4.560 5,671 2.601 5,004 Total: ~ ~ ~ 8.611 11.827 Source: Economic Sciences Corporation Annual Summaries, 2002. Water Supply Maintaining the County's water supply is the responsibility of the Orange County Water District ("OCWD"), manager of the County's groundwater basin, and the Municipal Water District of Orange County ("MWDOC"), the County's largest manager of imported water. More than 60% of the County's water is from local groundwater sources; the rest is imported. The County's natural underground reservoir is sufficient to carry it through temporary shortfall periods, but local supplies alone cannot sustain the present population. Recreation and Tourism The County is a tourist center in Southern California because of the broad spectrum of amusement parks and leisure, recreational and entertainment activities that it offers. These tourist attractions are complimented by the year-round mild climate. Along the County's Pacific Coast shoreline are five state beaches and parks, five municipal beaches and five County beaches. There are two small-craft docking facilities in Newport Harbor, a third located at Sunset Beach and a fourth at Dana Point. Other major recreational and amusement facilities include Disneyland, Disney's California Adventure, Knott's Berry Farm and the Spanish Mission of San Juan Capistrano. Also located within the County are the Anaheim Convention Center, Edison International Field of Anaheim. Arrowhead Pond of Anaheim, Orange County Performing Arts Center, Verizon Wireless Amphitheater and the Art Colony at Laguna Beach with its annual art festival. The Anaheim Convention Center is located adjacent to Disneyland. It is situated on 50 acres and is one of the largest convention centers on the West Coast. Table B-9 summarizes the number of conventions held in the County, as well as attendance for the period 1992 through 2002. DOCSLAl :446982.6 41758-8 GHl B-7 TABLEB-9 COUNTY OF ORANGE CONVENTION ACTIVITY Year Conventions Attendance 1992 349 1,029,244 1993 356 950,916 1994 317 1,023,311 1995 341 919,616 1996 385 914,806 1997 431 979,259 1998* 450 750,698 1999* 473 767,689 2000 470 858,593 2001 489 959,000 2002 547 1,008,171 Source: Anaheim/Orange County Visitor and Convention Bureau, 2002. * A portion of the decrease in 1998 and 1999 from attendance and expenditure levels of prior years is attributable to the effects of the construction of Disney's California Adventure theme park and related infrastructure projects. Transportation The County is situated in the most heavily populated area in California and has access to excellent roads, rail, air and sea transportation. The Santa Ana Freeway (Interstate 5) provides direct access to downtown Los Angeles and connects with the San Diego Freeway (Interstate 405) southeast of the City of Santa Ana, providing a direct link with San Diego. The Garden Grove Freeway (State 22) and the Riverside Freeway (State 91) provide east-west transportation, linking the San Diego Freeway. Santa Ana Freeway and the Newport Freeway (State 55). The Newport Freeway provides access to certain beach communities. Drivers in the County have access to two toll road systems of the Transportation Corridor Agencies. The San Joaquin Toll Road (73) runs from Costa Mesa to Mission Viejo connecting to the 405 and 5 interstate freeways. The Eastern and Foothill Toll Roads (241, 261 and 133) connect the County to the 91 freeway in the North and the 5 freeway, City of Irvine other South County cities, as well as Laguna Canyon Road. The Transportation Corridor Agencies are planning to extend 241 to connect to the 5 freeway near San Clemente. Rail freight service is provided by the Burlington Northern Santa Fe Railway and the Union Pacific Railroad Company. Amtrak provides passenger service to San Diego to the south, Riverside and San Bernardino Counties to the east, and Los Angeles and Santa Barbara to the north. Metro Link provides passenger service to San Bernardino and Riverside counties to the east, the City of Oceanside to the south and Los Angeles County to the north. Bus service is provided by Greyhound Bus Lines. The Orange County Transportation Authority provides bus service between most cities in the County. Most interstate common carrier truck lines operating in California serve the County. The John Wayne Airport is located in the County's unincorporated area adjacent to Santa Ana, Costa Mesa, Irvine and Newport Beach. Major airlines, including Aloha, American, Alaska, Delta, DOCSLAl :446982.6 41758-8 GHI B-8 America West, Continental, Northwest, U.S. Airways, Southwest, United and TWA, fly from the airport to major cities throughout the country. In 2002, approximately 7.9 million passengers were served. In 1993, the Defense Base Realignment and Closure Commission directed the closure of Marine Corps Air Station (MCAS) El Toro ("El Toro" or '1:he base") effective July 1999. In November 1994, County voters approved Measure A, an initiative that amended the County General Plan to designate land at El Toro for a commercial airport. In April 1995, the County was designated by the federal government as the Local Redevelopment Authority (LRA) for base planning. In December 1996, the Orange County Board of Supervisors, acting as the LRA, adopted the Community Reuse Plan and certified the supporting Environmental Impact Report 563. The adopted Community Reuse Plan, which included a commercial airport as its dominant feature, was subsequently submitted to the Department of Navy as the County's preferred Reuse Plan for El Toro. Further planning efforts culminated in the preparation of the Airport System Master Plan and Environmental Impact Report (EIR) 573. The planning phase was completed on October 23, 2001, when the Board of Supervisors acting as the LRA approved the ASMP and certified EIR 573 as complete. Opponents of the County's airport plan filed a lawsuit challenging EIR 573. On March 5, 2002, County voters adopted Measure W, the Orange County Central Park and Nature Preserve Initiative. Measure W repeals Measure A and amends the County General Plan to prohibit aviation uses and limit future development for the unincorporated portion of El Toro to park, open space, nature preserve and education and compatible uses. In light of the passage of Measure W, the County has discontinued all work related to the planning or development of a commercial airport at El Toro. The parties to the lawsuit challenging EIR 573 have entered into a stipulation staying that litigation, pending further action by the County. The City of Irvine has commenced proceedings to annex to the City the property that comprises the former MCAS El Toro. If such annexation is accomplished, the County will no longer have jurisdiction over development plans for MCAS El Toro. Natural Disasters; Seismic Activity/Fires Natural disasters, including floods, fires and earthquakes, have been experienced in the County. Seismic records spanning the past half century and historic records dating from the 1700s through the early 1900s indicate that the County is a seismically active area. The State Office of Emergency Services indicates that significant tremors are likely to occur in several fault zones during the next 50 to 100 years, including a tremor of 7.0 on the Richter scale within the Newport-Inglewood fault system. The chance of a Richter 7 .0 earthquake occurring is estimated to be 1 to 2% in any year. For this reason, local building codes require that structures be designed to withstand the expected accelerations for the area without collapsing or suffering severe structural damage. Maps published by the State Department of Conservation indicate that portions of the County may be subject to the risk of earthquake-induced landslides or liquefaction. DOCSLAI :446982.6 41758-8 GHI B-9 APPENDIXD BOOK-ENTRY ONLY SYSTEM The Depository Trust Company -Book-Entry Only System The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be executed and delivered as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be executed and delivered for each maturity of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC' s participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book- entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in tum, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor' s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www .dtcc.com. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC' s records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC' s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial DOCSLAI :446982.6 41758-8 GHI D-1 ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC' s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by OTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC' s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC' s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.' s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC' s practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the District or the Trustee, on payable date in accordance with their respective holdings shown on OTC' s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC nor its nominee, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the District or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. Further, the District may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered. The information in this section concerning DTC and DTC' s book-entry system has been obtained from sources that the District believes to be reliable, but the District takes no responsibility for the accuracy thereof. Discontinuance of DTC Services In the event (i) OTC determines not to continue to act as securities depository for the Certificates, (ii) DTC shall no longer act and give notice to the Trustee of such determination or (iii) the District determines that it is in the best interest of the Beneficial Owners that they be able to obtain Certificates and delivers a written certificate to the Trustee to that effect, DTC services will be discontinued. If the District determines to replace DTC with another qualified securities depository, the District shall prepare or direct the preparation of a new single, separate, fully registered Certificate for each of the maturities of the Certificates, registered in the name of such successor or substitute qualified securities depository or its nominee. If the District fails to identify another qualified securities depository to replace DTC then the DOCSLAl :446982.6 41758-8 GHl D-2 Certificates shall no longer be restricted to being registered in the certificate registration books in the name of Cede & Co., but shall be registered in such names as are requested in a certificate of the District, in accordance with the Trust Agreement. All Certificates may be presented for transfer by the Owner thereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Trustee, on the books required to be kept by the Trustee pursuant to the provisions of the Trust Indenture, upon surrender of such Certifications for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee. The Trustee may treat the Owner of any Certificate as the absolute owner of such Certificate for all purposes, whether or not such Certificate shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the interest and principal represented by such Certificate shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability represented by such Certificate to the extent of the sum or sums so paid. Whenever any Certificates shall be surrendered for transfer, the Trustee shall execute and deliver new Certificates representing the same principal amount in Authorized Denominations. The Trustee shall require the payment of any Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. Certificates may be presented for exchange at the Principal Office of the Trustee for a like aggregate principal amount of Certificates of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be required to transfer or exchange any Certificate during the period in which the Trustee is selecting Certificates for redemption, nor shall the Trustee be required to transfer or exchange any Certificate or portion thereof selected for redemption from and after the date of mailing the notice of redemption thereof. DOCSLAI :446982.6 41758-8 GHI D-3 APPENDIXE FORM OF APPROVING OPINION OF SPECIAL COUNSEL Upon the execution and delivery of the Certificates, Orrick, Herrington & Sutcliffe LLP, Los Angeles, California, proposes to render its final approving opinion with respect to the Certificates in substantially the following form: [Date of Delivery] Orange County Sanitation District 10844 Ellis A venue Fountain Valley, California Ladies and Gentlemen: Orange County Sanitation District Certificates of Participation. Series 2003 (Final Opinion) We have acted as special counsel in connection with the execution and delivery of Orange County Sanitation District Certificates of Participation, Series 2003 evidencing principal in the aggregate amount of $ (collectively, the "Certificates"). In such connection, we have reviewed the Master Agreement for District Obligations, dated as of August l, 2000 (the "Master Agreement"), by and between the Orange County Sanitation District (the "District") and the Orange County Sanitation District Financing Corporation (the "Corporation"), the Installment Purchase Agreement, dated as of July 1, 2003 (the "Installment Purchase Agreement"), by and between the District and the Corporation, the Trust Agreement, dated as of July 1, 2003 (the ''Trust Agreement"), by and among the District, the Corporation, and Union Bank of California, N.A., as trustee (the ''Trustee"), the Tax Certificate of the District, dated the date hereof (the ''Tax Certificate"), opinions of counsel to the District, the Corporation, the Trustee and others, certificates of the District, the Corporation, the Trustee and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Installment Purchase Agreement. Certain agreements, requirements and procedures contained or referred to in the Master Agreement, the Installment Purchase Agreement, the Trust Agreement, the Tax Certificate and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Certificates) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. No opinion is expressed herein as to any Certificate or the interest on the Installment Payments evidenced thereby if any such change occurs or action is taken or omitted upon the advice or approval of counsel other than ourselves. The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. Our engagement with respect to the Certificates has concluded with their execution and delivery, and we disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any DOCSLAI :446982.6 41758-8 GHI E-1 parties other than the District. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents, referred to in the first paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Master Agreement, the Installment Purchase Agreement, the Trust Agreement and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Installment Payments evidenced by the Certificates to be included in gross income for federal income tax purposes. In addition, we call attention to the fact that the rights and obligations under the Certificates, the Master Agreement, the Installment Purchase Agreement, the Trust Agreement and the Tax Certificate and their enforceability are subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the limitations on legal remedies against public bodies such as the District in the State of California. We express no opinion with respect to the enforceability of any indemnification, contribution, penalty, choice of law, choice of forum or waiver provisions contained in the foregoing documents, nor do we express any opinion with respect to the state or quality of title to or interest in any of the real or personal property described in the Master Agreement or the Installment Purchase Agreement or the accuracy or sufficiency of the description contained therein of any such property. Finally, we express no opinion herein with respect to the accuracy, completeness or fairness of the Official Statement or other offering material relating to the Certificates. Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions: 1. The Master Agreement, the Installment Purchase Agreement and the Trust Agreement have been duly executed and delivered by, and constitute valid and binding obligations of, the District. 2. The obligation of the District to pay the Installment Payments, and the interest thereon, and other payments required to be made by it under the Installment Purchase Agreement is a special obligation of the District payable, in the manner provided in the Installment Purchase Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase Agreement lawfully available therefor. 3. Assuming due authorization, execution and delivery of the Trust Agreement and the Certificates by the Trustee, the Certificates are entitled to the benefits of the Trust Agreement. 4. Interest on the Installment Payments paid by the District under the Installment Purchase Agreement and received by the registered owners of the Certificates is excluded from gross income for federal income tax purposes under Section l 03 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. Such interest is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although we observe that it is included in adjusted current earnings when calculating corporate alternative minimum taxable income. We express no opinion regarding other tax consequences related to the accrual or receipt of such interest or the ownership or disposition of the Certificates. DOCSLAl :446982.6 41758-8 GHI E-2 Faithfully yours, ORRICK, HERRINGTON & SUTCLIFFE LLP per ORANGE COUNTY SANITATION DISTRICT Certificates of Participation Series 2003 Distribution List ORANGE COUNTY SANITATION DISTRICT 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Gary Streed E-mail: gstreed@ocsd.com Michael White E-mail: mwhite@ocsd.com ORANGE COUNTY SANITATION DISTRICT-GENERAL COUNSEL Woodruff, Spradlin and Smart 701 South Parker Street, Suite 7000 Orange, California 92668 Thomas Woodruff, Esq. E-mail: tlw@wss-law.com Doug Holland, Esq. E-mail: dch@wss-law.com FINANCIAL ADVISOR Public Resources Advisory Group 11845 West Olympic Boulevard, Suite 640 Los Angeles, CA 90064 Edmund Soong E-mail: esoong@pragla.com Michael Kremer E-mail: mkremer@pragla.com Saul Cooperstein E-mail: scooperstein@pragla.com As of Ju/y41 2003 714-593-7550 FAX: 714-962-3954 714-593-7570 FAX: 714-962-3954 714-564-2605 FAX: 714-265-2533 714-564-2642 FAX: 714-565-2542 310-477-1453 FAX: 310-477-0105 310-477-9195 FAX:310-477-0105 310-477-7098 FAX: 310-477-0105 C:\Ed\OCSD\NewMoney2003\Distro030704.doc -1 - BOND COUNSEL Orrick, Herrington & Sutcliffe 777 South Figueroa Street, Suite 3200 Los Angeles, CA 90071 Greg Harrington, Esq. E-mail: gharrington@orrick.com Kevin Hale, Esq. E-mail: khale@orrick.com Larry Sobel, Esq. E-mail: lsobel@orrick.com Winnie Tsien, Esq. E-mail: wtsien@orrick.com TRUSTEE AND PAYING AGENT Union Bank of California 120 Sout San Pedro Street, Suite 400 Los Angeles, CA 90012 Alison Braunstein E-mail: alison.braunstein@uboc.com PRINTER Pacific Financial Printing 221 Main Street, Suite 1310 San Francisco, CA 94105 Tim Kelly E-mail: myprinter@aol.com RATING AGENCIES Fitch Ratings 650 California Street, 8th Floor San Francisco, CA 94108 Mark Capell E-mail: mark.capell@fitchratings.com -2- As of July 4, 2003 213-612-2280 F.A){:213-612-2499 213-612-2356 FA){: 213-612-2499 213-612-2421 FA){: 213-612-2499 213-612-2336 FA){: 213-612-2499 213-972-5674 F.A){:213-972-5694 415-974-1100 FA){: 415-974-1619 415-732-1756 FA){: 415-732-5610 C:\Ed\OCSD\NewMoney2003\0istro030704.doc 106 E. 6th Street, Suite 900 Austin, TX 78701 Douglas Scott E-mail: douglas.scott@fitchratings.com Moody's Investors Service One Front Street, Suite 1900 San Francisco, CA 94111 Dari Barzel E-mail: dari.barzel@moodys.com One Front Street, Suite 1900 San Francisco, CA 94111 Eric Hoffmann E-mail: eric.hoffmann@moodys.com Standard & Poor's Rating Services 5 5 Water Street New York, NY 10041 David Hitchcock E-mail: david _ hitchcock@standardandpoors.com 2001 Ross A venue Dallas, TX, 75201 Alexander Fraser E-mail: alexander _ fraser@standardandpoors.com One Market Steuart Tower, 15th Floor San Francisco, CA 94105-1000 Ian Carroll E-mail: ian _ carroll@standardandpoors.com -3- As of Ju/y4, 2003 512-322-5321 FAX: 512-322-5332 415-274-1707 FAX:415-274-1726 415-274-1702 FAX:415-274-1726 212-438-2022 FAX: 212-438-2156 214-871-1406 FAX:214-xxx-yyyy 415-371-5060 FAX: 415-371-5090 C:\Ed\OCSD\NewMoney2003\Distro030704.doc ELECTRONIC BIDDING AGENT Dalcomp/Parity 395 Hudson Street, 3rd Floor New York, NY 10014 Joy Cummings E-mail: curnmings@dalcomp.com -4- As of July4, 2003 212-806-8304 FAX: 212-989-4990 C:\Ed\OCSD\NewMoney2003\Distro030704.doc ti I ' ' ,, FAHR COMMITTEE AGENDA REPORT Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Michael D . White, Controller Meeting Date 07/9/03 Item Number FAHR03-61 To Bel. of Dir. 07/23/03 Item Number 14 (f) SUBJECT: ANNUAL REVIEW AND ADOPTION OF THE DISTRICT'S INVESTMENT POLICY STATEMENT AND DELEGATION OF INVESTMENT AUTHORITY TO THE DIRECTOR OF FINANCE!TREASURER GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 03-17 , Authorizing the District's Treasurer to Invest and /or Reinvest District's Funds; Adopting District's Investment Policy Statement and Perfo rmance Benchmarks for FY 2003-04; and Repealing Resolution No. OCSD 02-13. SUMMARY This agenda item presents the annual review of the District's Investment Policy Statement to the FAHR Committee for consideration in the Committee's capacity as the oversight committee for the Investment Policy (Section 16.2). With adoption of the attached Resolution , the Board of Directors would readopt the District's current Investment Policy Statement, portfolio performance benchmarks , and monitoring and reporting requirements for FY 2003-04 . The District's Investment Policy Statement is recommended for adoption for FY 2003-04 with two policy clarifications from FY 2002-03 , as discussed further below. There have been no legislative revisions to the State Government Code since the adoption of the FY 2002-03 Investment Policy. The submitted Investment Policy Statement has received the Investment Policy Certification of Excellence Award from the Municipal Treasu rer's Association of the United States and Canada . PRIOR COMMITTEE/BOARD ACTIONS July 2002 adopted Investment Policy for FY 2002-03. PROJECT/CONTRACT COST SUMMARY N/A G :lwp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(f).lnveS1ment Policy.doc Page 1 BUDGET IMPACT D This item has been budgeted. D This item has been budgeted, but there are insufficient funds. D This item has not been budgeted. [8] Not applicable (information item) ADDITIONAL INFORMATION Background The District's current Investment Policy Statement was reviewed and approved by the Finance, Administration and Human Resources Committee (FAHR) on June 13, 2001, and adopted by the Board of Directors on June 27, 2001 (Resolution No. 01-13). The Investment Policy governs the investment activities of Pacific Investment Management Company (PIMCO), the District's external money manager, on behalf of the District. On May 28 , 1999, the District's Investment Policy Statement received the Investment Policy Certification of Excellence Award from the Municipal Treasurer's Association of the United States and Canada. A copy of the letter of certification is included each year in the annual Investment Policy document. The District received its first Award of Excellence for the Investment Policy Statement in December 1996. Each MTA certification is valid for three years. Upon approval , the District will again be submitting this investment policy statement for award consideration . The Investment Policy document itself consists of the Investment Policy Statement and the following eight appendices : A. Summary of Investment Authorization B . Treasury Management Procedures C . Investment Manager Certification D . Investment Pool Questionnaire (LAIF) E. Board Resolution No. OCSD-03-XX F . Sample Monthly & Quarterly Investment Program Monitoring Reports G . Sections of the California Government Code Pertinent to Investing Public Funds H . Glossary of Investment Terms This document will be updated and delivered to FAHR Committee members following the adoption of the District's investment policy statement. Annual Review of Investment Policy The Investment Policy includes the requirement that the District shall review its Investment Policy annually (Sections 1.2 and 16.1 ). Likewise, Section 53646 of the California Government Code (the "Code") requires local agencies to review their investment policy annually, and readopt their policy at a public meeting . This staff report presents the annual review of the District's Investment Policy Statement to the FAHR Committee for consideration in the Committee's capacity as the oversight committee for the District's investment program (Section 16.2). With adoption of the attached Resolution , the G:\wp.dta\agendn\Board Agenda Reports\2003 Board Agenda Repons\0703\ltem 14(1).l nvestment Polley.doc Page 2 Board of Directors would readopt the District's current Investment Policy Statement, portfolio performance benchmarks, and monitoring and reporting requirements. The District's Investment Policy Statement is recommended for adoption for FY 2003-04 with two clarification changes from FY 2002-03. The first change, highlighted in bold and italics on page 6, clarifies that the investment restrictions placed on corporate notes pertains to the "direct issuer" as opposed to a parent corporation of a "direct issuer''. The second change, highlighted in bold and italics on page 9, includes clearing house corporations, such as the Depository Trust Company (OTC), as acceptable safekeeping and custodial depositories of securities owned by the District. This occurs when PIMCO, the District's investment broker purchases a security through book entry that is held by the OTC. In this instance, Mellon Bank maintains the custodial record of the book entry. There have been no legislative revisions to the State Government Code since the adoption of the FY 2002-03 Investment Policy. However, staff will continue to monitor pending legislative and regulatory proposals in the public finance area for their potential impact on the District's existing financial programs. Annual Delegation of Investment Authority Effective January 1 , 1997, Section 53607 of the Code states that governing boards of local agencies may only delegate authority to invest and/or reinvest agency funds to the agency's Treasurer for a one-year period. With adoption of the attached Resolution, the Board of Directors would renew its delegation of investment authority to the Director of Financeff reasurer for a one-year period in compliance with the requirements of Section 53607. Each year, the Board of Directors will consider similar actions along with the annual reconsideration of the District's Investment Policy. ATTACHMENTS 1. Orange County Sanitation District's FY 2003-04 Investment Policy Statement. 2. Resolution No. OCDS-03-17. 3. Appendix "A" of the Investment Policy Document, "Summary of Investment Authorization". 4. Exhibit "B" of the Investment Policy Document, "Performance Monitoring & Reporting". 5. Exhibit "B" of the Investment Policy Document, "Performance Monitoring & Reporting Schedule". G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 14(f).lnvestment Polley.doc Page3 ORANGE COUNTY SANITATION DISTRICT INVESTMENT POLICY STATEMENT Reviewed and Approved By Finance, Administration and Human Resources Committee On July 9, 2003 Adopted By Board of Directors On July 23, 2003 Section 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0 15.0 16.0 Appendix TABLE OF CONTENTS Topic Policy ...................................................................................... 1 Scope ...................................................................................... 1 Standard of Prudence ............................................................. 1 Investment Objectives ............................................................. 2 Delegation of Authority ............................................................ 2 Ethics and Conflicts of Interest ............................................... 3 Authorized Financial Dealers and Institutions ........................ .4 Authorized and Suitable lnvestments ...................................... 5 Collate ralization ....................................................................... 9 Safekeeping and Custody ....................................................... 9 Diversification .......................................................................... 9 Maximum Maturities .............................................................. 11 Internal Control ..................................................................... 12 Performance Objectives and Benchmarks ............................ 12 Reporting .............................................................................. 12 Investment Policy Adoption and Revision ............................. 14 A. Summary of Investment Authorization B. Treasury Management Procedures C. Investment Manager Certification D. Investment Pool Questionnaire (LAIF) E. Board Resolution No. OCSD-03-XX, Authorizing the District's Treasurer to Invest and/or Reinvest District Funds, and Adopting Investment Policy and Performance Benchmarks F. Monthly & Quarterly Investment Program Monitoring Reports G. Sections of the California Government Code Pertinent to Investing Public Funds H. Glossary of Investment Terms .'f ' p 1.0 Policy: ORANGE COUNTY SANITATION DISTRICT INVESTMENT POLICY STATEMENT It is the policy of the Orange County Sanitation District (OCSD) to invest public funds in a manner which ensures the safety and preservation of capital while meeting reasonably anticipated operating expenditure needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the investment of public funds. 1.1. This Investment Policy is set forth by OCSD for the following purposes: 1 .1 .1 . To establish a clear understanding for the Board of Directors, OCSD management, responsible employees and third parties of the objectives, policies and guidelines for the investment of the OCSD's idle and surplus funds. 1.1.2. To offer guidance to investment staff and any external investment advisors on the investment of OCSD funds (see Appendix 11 A 11 ). 1.1.3. To establish a basis for evaluating investment results. 1.2. OCSD establishes investment policies which meet its current investment goals. OCSD shall review this policy annually, and may change its policies as its investment objectives change. 2.0 Scope: This Investment Policy applies to all financial assets of OCSD; except for the proceeds of OCSD's capital projects financing program, which are invested in accordance with provisions of their specific bond indentures; and such other funds excluded by law or other Board-approved covenant or agreement. These funds are accounted for by OCSD as Enterprise Funds as represented in OCSD's Comprehensive Annual Financial Report. 3.0 Standard of Prudence: The standard of prudence to be used by OCSD internal staff, and any authorized investment advisor(s), shall be as described in Section 53600.3 of the California Government Code as follows: Except as provided in subdivision (a) of Section 27000.3, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, Page 1 of 13 prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, p that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law. 4.0 Investment Objectives: The primary objectives of OCSDs investment activities, in priority order, and as described in Section 53600.5 of the California Government Code, shall be: 4.1 Safety: The safety and preservation of principal is the foremost objective of the investment program of OCSD. Investments shall be selected in a manner that seeks to ensure the preservation of capital in OCSD's overall portfolio. This will be accomplished through a program of diversification, more fully described in Section 11.0, and maturity limitations, more fully described in Section 12.0, in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. 4.2 Liquidity: The investment program will be administered in a manner that will ensure that sufficient funds are available for OCSD to meet its reasonably anticipated operating expenditure needs. 4.3 Return on Investments: The OCSD investment portfolio will be structured and managed with the objective of achieving a rate of return throughout budgetary and economic cycles, commensurate with legal, safety, and liquidity considerations. 5.0 Delegation of Authority: 5.1 Authority to manage OCSD's investment program is derived from the California Government Code Sections 53600 et seq. and Sections 53635 et seq. The Board of Directors hereby delegates management responsibility for the OCSD investment program to it's Director of Finance I Treasurer, who shall establish written procedures for the operation of the investment program, consistent with this Policy. The Controller/ Assistant Treasurer shall be responsible for day-to-day administration, monitoring, and the development of written administrative procedures for the operation of the investment program, consistent with this Policy. The current treasury management procedures are presented in Appendix 11 8.11 No person may engage in an investment transaction except as provided under the terms of this Policy and the procedures established by the Treasurer. The Treasurer shall be responsible for all transactions undertaken by OCSD internal staff, and shall establish a system of controls to regulate the activities of internal Page 2 of 13 5.2 staff and external investment advisors engaged in accordance with Section 5.3. The administrative procedures for the operation of OCSD's investment program will provide for, but not be limited to, the following: 5.2.1 Formats for monthly and qu~rterly reports to the Finance, Administration and Human Resources Committee, and the Board of Directors. 5.2.2 Compliance with generally accepted accounting principles of the Government Accounting Standards Board. 5.2.3 Establishment of benchmarks for performance measurement. 5.2.4 Establishment of a system of written internal controls. 5.2.5 Establishment of written procedures for competitive bids and offerings of securities that may be purchased or sold by internal OCSD staff. 5.2.6 Establishment of a Desk Procedures Manual for treasury operations and management. 5.3 The Board of Directors of OCSD may, in its discretion, engage the services of one or more registered investment advisors to assist in the management of OCSD's investment portfolio in a manner consistent with OCSD's objectives. Such external investment advisors, which shall be selected through a competitive process, shall be granted discretion to purchase and sell investment securities in accordance with this Investment Policy. Such advisors must be registered under the Investment Advisers Act of 1940, or be exempt from such registration. 6.0 Ethics and Conflicts of Interest: 6.1 Officers and employees of OCSD involved in the investment process shall refrain from personal business activities that could conflict with proper execution of ocso·s investment program, or which could impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the General Manager any material financial interests in financial institutions that conduct business within OCSD 1s boundaries, and they shall further disclose any large personal financial/investment positions, the performance of which could be related to the performance of positions in OCSD's portfolio. 7 .0 Authorized Financial Dealers and Institutions: Page 3of13 7.1 For investment transactions conducted by OCSD internal staff, the Treasurer will maintain a list of financial institutions authorized to provide investment , services to OCSD, including 11 primary" or regional dealers that qualify under Securities and Exchange Commission Rule 15C3-1 (Uniform Net Capital rule), and Federal or State of California chartered banks. No public deposit shall be made except in a qualified public depository as established by State law. All financial institutions which desire to become qualified bidders for investment transactions with OCSD must supply the following for evaluation by the Treasurer: 7 .1.1. Audited financial statements for the institution's three (3) most recent fiscal years. 7 .1.2. A statement, in the format prescribed by the Government Finance Officers Association (GFOA), certifying that the institution has reviewed OCSD's Investment Policy and that all securities offered to the Districts shall comply fully and in every instance with all provisions of the California Government Code and with this Investment Policy. The current statement is presented in Appendix "C.11 7 .1.3. A statement describing the regulatory status of the dealer, and the background and expertise of the dealer's representatives. Selection of financial institutions, broker/dealers, and banks authorized to engage in transactions with OCSD shall be made through a competitive process. An annual review of the financial condition of qualified institutions will be conducted by the Treasurer. 7 .2 Selection of broker/dealers used by external investment advisors retained by OCSD, shall be in compliance with contract provisions between OCSD and any external investment advisors, and shall be in substantially the following form: Use of Securities Brokers: Neither the Investment Advisor nor any parent, subsidiary or related firm shall act as a securities broker with respect to any purchases or sales of securities which may be made on behalf of OCSD, provided that this limitation shall not prevent the Investment Advisor from utilizing the services of a securities broker which is a parent, subsidiary or related firm, provided such broker effects transactions on a 11 cost only" or 11 nonprofit" basis to itself and provides competitive execution. The Investment Advisor shall provide the Districts with a list of suitable independent brokerage firms (including names and addresses) meeting the requirements of Government Code Section 53601.5, and, unless otherwise directed by OCSD, the Investment Advisor may utilize the service of any of such independent securities brokerage firms it deems appropriate to the extent that such firms are competitive with respect to price of services and execution. Page 4of13 8.0 Authorized and Suitable Investments: All investments shall be made in accordance with the California Government Code including Sections 16429.1 et seq., 53600 et seq., and 53684, and as described within this Investment Policy. Permitted investments under this Policy shall include: 8.1 Securities, obligations, participations, or other instruments of, or 'issued by, or fully guaranteed as to principal and interest by the US Government, a federal agency, or a US Government-sponsored enterprise pursuant to Section 53601 (e) of the California Government Code. Investment in mortgage-backed bonds and CMOs is not governed by this Section 8.1, even if such bonds are issued by agencies of the US Government. See Section 8.2 for conditions of purchase of mortgage- backed securities. See Section 8.11 for conditions of purchase of CMOs. 8.2 Mortgage-backed securities issued by an agency of the US Government, which are backed by pools of mortgages guaranteed by the full faith and credit of the U.S. Government, or an agency thereof. Selection of mortgage derivatives, which include interest-only payments (IOs) and principal-only payments (POs); inverse floaters, and RE-REMICs (Real Estate Mortgage Investment Conduits), is hereby prohibited. 8.3 Commercial paper of "prime" quality and rated 11 P1 11 by Moody's Investor Services (Moody's), and rated 11 A1 11 by Standard & Poor's Corporation (S&P), and issued by a domestic corporation organized and operating in the United States with assets in excess of $500 million and having a rating of 11 A 11 or better on its long-term debt as provided by Moody's or S&P. Purchases of eligible commercial paper may not exceed 270 days to maturity from the date of purchase. Purchases of commercial paper shall not exceed 15% of the market value of the portfolio, except that a maximum of 30% of the market value of the portfolio may be invested in commercial paper, so long as the average maturity of all commercial paper in the portfolio does not exceed 31 days. No more than 5% of the market value of the portfolio, or 10% of the issuer's outstanding paper, may be invested in commercial paper issued by any one (1) eligible corporation. 8.4 Banker's acceptances issued by institutions, the short-term obligations of which are rated a minimum of 11 P1 11 by Moody's, or 11 A 1" by S&P provided that: (a) the acceptance is eligible for purchase by the Federal Reserve System; (b) the maturity does not exceed 180 days; (c) no more than 40% of the total portfolio may be invested in banker's acceptances; and (d) no more than 30% of the total portfolio may be invested in the banker's acceptances of any one (1) commercial bank. 8.5 Medium term (or corporate) notes of a maximum of five (5) years maturity issued by corporations organized and operating within the United States, or issued by depository institutions licensed by the United States, or any state, Page 5of13 and operating within the United States with assets in excess of $500 million, and which is rated in a rating category of "A" or better on its long-term debt as provided by Moody's or S&P. Notes eligible for investment under this section shall be rated at least "A3" or better by Moody's, or "A-" or better by S&P. If, at the time of purchase, an eligible note is rated in a rating category of "A" or better by only one rating agency, the note shall also be rated at least "BBB" by the other rating agency. If, after purchase, the rating of an eligible note in a rating category of 11 A 11 or better, is downgraded to 11 BBB, 11 the external investment advisor shall notify the District of the downgrade, and shall present an analysis and recommendations as to the disposition of the note consistent with the investment objectives of this Investment Policy. The above restrictions pertain to the "direct issuer" and do not extend to the parent corporation of the direct issuer. No more than 30% of the portfolio may be invested in eligible medium term or corporate notes. 8.6 Shares of mutual funds investing in securities permitted under this policy and under Section 53601 (k) of the California Government Code. Such funds must either: (1) attain the highest ranking, or the highest letter and numerical rating, provided by not less than two of the three largest nationally recognized rating services; or (2) have an Investment Advisor registered with the Securities and Exchange Commission with not less than five (5) years of experience investing in the securities and obligations authorized under this Policy and under California Government Code Section 53601, and with assets under management in excess of $500 million. The purchase price of shares of beneficial interest purchased pursuant to this policy, and the California Government Code may not include any commission that the companies may charge, and shall not exceed 15% of the District's surplus money that may be invested pursuant to this section. However, no more than 10% of the District's surplus funds may be invested in shares of beneficial interest of any one (1) mutual fund pursuant to this section. 8. 7 Certificates of deposit: 8.7.1 Secured (collateralized) time deposits issued by a nationally or state-chartered bank or state or federal savings and loan association, as defined by Section 5102 of the California Financial Code, and having a net operating profit in the two (2) most recently completed fiscal years. Collateral must comply with Chapter 4, Bank Deposit Law, Section 16500 et seq., and Chapter 4.5, Savings and Loan Association and Credit Union Deposit Law, Section 16600 et seq., of the California Government Code. 8. 7 .2 Negotiable certificates of deposit (NCDs) issued by a nationally or state-chartered bank or state of federal savings and loan association, as defined by Section 5102 of the California Financial Code; and which shall have a rating of "A" or better on its long-term debt as provided by Moody's or S&P; or which shall have the following minimum short-term ratings by at least two (2) rating services: 11 P1 II for deposits by Moody's, 11 A 111 for deposits by S&P, or comparably rated by a nationally recognized rating agency which Page 6of13 \ rates such securities; or as otherwise approved by the District's Board of Directors. 8.7.3 To be eligible to receive local agency money, a bank, savings association, federal association, or federally insured individual loan company shall have received an overall rating of not less than "satisfactory'' in its most recent evaluation by the appropriate feder~I financial supervisorial agency of its record of meeting the credit needs of California's communities, including low and moderate income neighborhoods, pursuant to Section 2906 of Title 12 of the United States Code. 8.8 Taxable or tax-exempt municipal bonds issued by the State of California or its subdivisions. Such securities must be rated 11 A3 11 or higher by Moody's, or 11 A-11 or higher by S&P; or as otherwise approved by the Districts' Board of Directors. 8.9 The State of California Local Agency Investment Fund (LAIF). The LAIF is an investment alternative for California's local governments and special districts managed by the State Treasurer's Office. LAIF is more fully described in the Glossary (See Appendix 11 H.11 ) The District shall use LAIF as a short-term cash management facility. Investment of District funds in LAIF shall be subject to investigation and due diligence prior to investing, and on a continual basis to a level of review pursuant to Section 3.0, Standard of Prudence, of this Policy. See Appendix ''011 for investment pool questionnaire. 8.10 The Orange County Treasurer's Money Market Commingled Investment Pool (OCCIP). The OCCIP is a money market investment pool managed by the Orange County Treasurer's Office. OCCIP is more fully described in the Glossary. (See Appendix 11 H.11 ) The District has no funds invested in OCCIP at this time. Investment of District funds in OCCIP would be subject to investigation and due diligence prior to investing, and on a continual basis to a level of review pursuant to Section 3.0, Standard of Prudence, of this Policy. 8.11 Collateralized mortgage obligations (CMOs) issued by agencies of the US Government which are backed by pools of mortgages guaranteed by the full faith and credit of the U.S. Government, or an agency thereof, and asset- backed securities rated 11 Aaa 11 by Moody's and 11 AAA" by S&P. Selection of mortgage derivatives, which include interest-only payments (IOs) and principal-only payments (POs); inverse floaters, and RE-REMICS (Real Estate Mortgage Investment Conduits), is hereby prohibited. Securities eligible for purchase under this Section 8.11 shall be issued by an issuer having a rating on its unsecured long-term debt of 11 A 11 or higher. Combined purchases of mortgage-backed securities, CMOs and asset-backed securities as authorized under this Section 8.11, may not exceed 20% of the total Long-Term Operating Monies portfolio. Page 7of13 8.12 Repurchase agreements provided that: 8.12.1 All repurchase agreements shall be collateralized with securities eligible for purchase under this Policy. In order to anticipate market changes and to provide a level of security for all repurchase agreement transactions, collateralization shall be maintained at a level of at least 1 02% of the market value of the repurchase agreements, and shall be adjusted no less than weekly. 8.12.2 All repurchase agreements must be the subject of a Master Repurchase Agreement between OCSD and the provider of the repurchase agreement. The Master Repurchase Agreement shall be substantially in the form developed by The Bond Market Association. 8.13 Reverse repurchase agreements provided that: 8.13.1 No more than five percent (5%) of OCSD's portfolio shall be invested in reverse repurchase agreements, and there shall be no long-term reverse repurchase agreements unless otherwise authorized by the Districts' Board of Directors. 8.13.2 The maximum maturity of reverse repurchase agreements shall be ninety (90) days. 8.13.3 Reverse repurchase agreements shall mature on the exact date of a known cash flow which will be unconditionally available to repay the maturing reverse repurchase agreement. 8.13.4 Proceeds of reverse repurchase agreements shall be used solely to supplement portfolio income or to provide portfolio liquidity, and shall not be used to speculate on market movements. 8.13.5 All reverse repurchase agreements must be the subject of a Master Repurchase Agreement between OCSD and the provider of the reverse repurchase agreement. The Master Repurchase Agreement shall be substantially in the form developed by The Bond Market Association. 8.14 Sales of OCSD-owned securities in the secondary market may incur losses in order to improve the risk or return characteristics of the portfolio, to prevent anticipated further erosion of principal, or when trading for securities that result in an expected net economic gain to OCSD. 8.15 If securities owned by the OCSD are downgraded by either Moody's or S&P to a level below the quality required by this Investment Policy, it shall be OCSD's policy to review the credit situation and make a determination as to whether to sell or retain such securities in the portfolio. If a decision is made to retain the downgraded securities in the portfolio, their presence in the Page 8 of 13 J 9.0 portfolio will be monitored and reported monthly to the OCSD General Manager, the Finance, Administration and Human Resources Committee and Board of Directors. Col lateralization: Generally, the value to secure deposits under this Policy shall comply with Section 53652 of the California Government Code. Collateralization will be required for secured time deposits, as more fully described in Section 8. 7 .1 ; and repurchase agreements, as more fully described in Section 8.12.1. Collateral will always be held by an independent third- party, as more fully described in Section 10.1. The right of collateral substitution is granted. 10.0 Safekeeping and Custody: 10.1 All securities transactions, including collateral for repurchase agreements, entered into by, or on behalf of OCSD, shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by OCSD's third-party custodian bank, which shall be selected through a competitive process, or that agent's representative, or in the agent's account at the Federal Reserve Bank, or within clearing corporations in the U.S., and evidenced by book entry statements. 11.0 Diversification: OCSD will diversify its investments by security type, issuer, and financial institution in accordance with the following: 11.1 There is no limit on investment in securities issued by or guaranteed by the full faith and credit of the U.S. government. 11.2 No more than 20% of the portfolio may be invested in securities of a single agency of the U.S. government, which does not provide the full faith and credit of the U.S. government. 11.3 No more than 5% of the portfolio may be invested in securities of any one issuer, other than the U.S. government or its agencies. Investment in mutual funds is not governed by this Section 11.3. See Section 11.8 for conditions of purchase of mutual funds. 11.4 No individual holding shall constitute more than 5% of the total debt outstanding of any issuer. 11.5 No more than 40% of the portfolio may be invested in banker's acceptances. 11.6 No more than 15% of the portfolio may be invested in commercial paper, Page 9 of 13 except that 30% of the portfolio may be so invested so long as the average maturity of all commercial paper in the portfolio does not exceed 31 days. ;1 11. 7 No more than 30% of the portfolio may be invested in medium-term (corporate) notes. 11 .8 No more than 15% of the portfolio may be invested in mutual funds. However, no more than 10% of the District's portfolio may be invested in shares of beneficial interest of any one (1) mutual fund. 11.9 No more than 30% of the portfolio may be invested in negotiable certificates of deposit. 11.10 No more than 10% of the portfolio may be invested in eligible municipal bonds. 11.11 No more than 20% of the Long Term Operating Monies portfolio may be invested in a combination of mortgage-backed securities, CMOs and asset- backed securities. Mortgage-backed securities, CMOs and asset-backed securities may only be purchased by the Districts' external money managers, Pacific Investment Management Company (PIMCO), with prior Board approval (authorized by Board Minute Order, January 22, 1997), and may not be purchased by the District's staff. 11.12 No more than the lesser of 15% of the portfolio or the statutory maximum may be invested in LAIF. 11 .13 No more than 15% of the portfolio may be invested in the Orange County Investment Pool. 11.14 No more than 20% of the portfolio may be invested in repurchase agreements. 11.15 No more than 5% of the portfolio may be invested in reverse repurchase agreements. 12.0 Maximum Maturities: To the extent possible, OCSD will attempt to match its investments with reasonably anticipated cash flow requirements. The Treasurer shall develop a five-year cash flow forecast, which shall be updated quarterly. Based on this forecast, the Treasurer shall designate, from time-to-time, the amounts to be allocated to the investment portfolio. OCSD monies invested in accordance with this Policy are divided into two (2) categories: 12.1 Liquid Operating Monies. Funds needed for current operating and capital expenditures are known as Liquid Operating Monies. 12.1.1 The maximum final stated maturity of individual securities in the Page 10 of 13 \. Liquid Operating Monies account portfolio shall be one (1) year from the date of purchase. 12.1.2 The average duration of the Liquid Operating Monies account portfolio shall be recommended by the Treasurer based on the Districts' cash flow requirements, but may never exceed 180 days, and shall be reviewed and approved by the Finance, Administration and Human Resources Committee, and shall be updated as needed. 12.2 Long Term Operating Monies. Funds needed for longer term purposes are known as the Long Term Operating Monies. 12.2.1 The maximum final stated maturity of individual securities in the Long Term Operating Monies account portfolio shall be five (5) years from the date of purchase, unless otherwise authorized by the Districts' Board of Directors (Board Minute Order dated January 22, 1997 has authorized the District's external money managers, PIMCO, to purchase individual securities providing the securities are permitted under Section 8.0 of this policy, which may have a stated maturity of more than five (5) years from the date of purchase). 12.2.2 The duration of the Long Term Operating Monies account portfolio shall be recommended by the Treasurer based on the Districts' five- year cash flow forecast, shall be reviewed and approved by the Finance, Administration and Human Resources Committee, and shall be updated as needed. 12.2.3 The duration of the Long Term Operating Monies account portfolio shall never exceed 120% of the duration as established in accordance with Section 12.2.2. 12.2.4 The duration of the Long Term Operating Monies account portfolio shall never be less than 80% of the duration as established in accordance with Section 12.2.2 13.0 Internal Control: 13.1 The Treasurer shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. The current treasury management procedures are presented in Appendix "B." · 14.0 Performance Objectives and Benchmarks: 14.1 Overall objective. The investment portfolio of OCSD shall be designed with the overall objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with investment risk constraints and Page 11of13 reasonably anticipated cash flow needs. 14.2 The Liquid Operating Monies. The investment performance objective for the Liquid Operating Monies shall be to earn a total rate of return over a market cycle which exceeds the return on a market index approved by the Finance, Administration and Human Resources Committee, and by the District's Board of Directors, when the duration of the portfolio is established. This market index is more fully described in Board Resolution No. OCSD-00-16 (see Appendix 11 E11 ). 14.3 The Long Term Operating Monies. The investment performance objective for the Long Term Operating Monies shall be to earn a total rate of return over a market cycle which exceeds the return on a market index selected by the Finance, Administration and Human Resources Committee and approved by the Districts' Board of Directors, when the duration of the portfolio is established. This market index is more fully described in Board Resolution No. OCSD-00-16 (See Appendix 11 E11 ). 15.0 Reporting: 15.1 Monthly and quarterly investment reports shall be submitted by the Treasurer to the Finance, Administration and Human Resources Committee which shall forward the reports to the District's Board of Directors. The monthly reports shall be submitted to the Finance, Administration and Human Resources Committee within 30 days of the end of the month in accordance with California Government Code Sections 53607, 53646, and this Investment Policy. The quarterly reports shall provide clear and concise status information on the District's portfolios at the end of each reporting period, including performance measures using the benchmarks described in Section 14.0 of this Investment Policy. Sample monthly and quarterly reports are presented in Appendix 11 F.11 These reports shall contain listings of individual securities held at the end of each reporting period, and shall disclose, at a minimum, the following information about the risk characteristics of OCSD's portfolio: 15.1.1 Cost and accurate and complete market value of the portfolio. 15.1.2 Modified duration of the portfolio compared to Benchmark. 15.1.3 Dollar change in value of the portfolio for a one-percent (1 %) change in interest rates. 15.1.4 Percent of portfolio invested in reverse repurchase agreements, and a schedule which matches the maturity of such reverse repurchase agreements with the cash flows which are available to repay them at maturity. 15.1.5 For the Liquid Operating Monies account only, the percent of Page 12of13 portfolio maturing within 90 days. 15.1.6 Average portfolio credit quality. 15.1.7 Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities. 15.1.8 State that all investments are in compliance with this policy and the California Government Code, or provide a listing of any transactions or holdings which do not comply with this policy or with the California Government Code. 15.1.9 Time-weighted total rate of return for the portfolio for the prior three months, twelve months, year to date, and since inception compared to the Benchmark returns for the same periods. 15.1.1 O State that sufficient funds are available for OCSD to meet its operating expenditure requirements for the next six months, or if not, state the reasons for the shortfall. 15.2 OCSD's Treasurer shall meet quarterly with the Finance, Administration and Human Resources Committee to review investment performance, proposed strategies and compliance with this Investment Policy. External investment advisors may be required to attend said meetings at the discretion of the Chairman of the Finance, Administration and Human Resources Committee. 16.0 Investment Policy Adoption and Revision: 16.1 The Investment Policy of OCSD shall be reviewed by the Finance, Administration and Human Resources Committee and shall be adopted by resolution of the Board of Directors of OCSD. The Policy shall be reviewed on an annual basis in accordance with California Government Code Section 53646, and this Investment Policy, by the Finance, Administration and Human Resources Committee, which shall recommend revisions, as appropriate, to the Board of Directors. Any modifications made thereto shall be approved by the Board of Directors. 16.2 The Finance, Administration and Human Resources Committee shall serve as the oversight committee for the District's Investment program and shall adopt guidelines for the ongoing review of duration, quality and liquidity of the District's portfolio. Page 13of13 APPENDIX 11 A 11 SUMMARY OF INVESTMENT AUTHORIZATION INTERNAL AND EXTERNAL MANAGERS SHORT TERM OPERATING FUND INVESTMENT U.S~ Treasuries Federal Agencies Mortgage-backed Commercial paper Banker's Accept. Medium Term Notes Mutual Funds Negotiable CDs Municipal Bonds LAIF OCIP CM Os Asset-backed Repurchase Agree. Reverse Repos INTERNAL OK Fixed coupon, fixed mat. NO OK OK Fixed coupon, fixed mat.* Money Market Only** Fixed coupon, fixed mat.* OK* OK OK NO NO OK OK* EXTERNAL OK OK NO OK OK OK Money Market Only OK NO NO NO NO NO OK OK LONG TERM OPERATING PORTFOLIO INVESTMENT INTERNAL EXTERNAL U.S. Treasuries OK OK Federal Agencies Fixed coupon, fixed mat. OK Mortgage-backed NO OK Mutual Funds Money Market Only** OK Negotiable CDs Fixed coupon, fixed mat.* OK Municipal Bonds OK* OK LAIF OK NO OCIP OK NO CM Os NO With Board Approval Asset-backed NO With Board Approval Repurchase Agree. OK OK Reverse Repos OK* OK *With prior approval of the Finance, Administration and Human Resources Committee. **Using financial institutions approved by the Finance, Administration and Human Resources Committee. G:\WP.DTA\FIN\210\CRANE\FAHA\FAHR2003\JUL\INVESTPL Y-FINALDOC RESOLUTION NO. OCSD-03-17 AUTHORIZING THE DISTRICT'S TREASURER TO INVEST AND/OR REINVEST DISTRICT'S FUNDS, AND ADOPTING DISTRICT'S INVESTMENT POLICY STATEMENT AND PERFORMANCE BENCHMARKS A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT, AUTHORIZING THE DISTRICT'S TREASURER TO INVEST AND/OR REINVEST DISTRICT'S FUNDS, AND ADOPTING DISTRICT'S INVESTMENT POLICY STATEMENT AND PERFORMANCE BENCHMARKS; AND REPEALING RESOLUTION NO. OCSD 02-13 *************** WHEREAS, on July 17, 2002, the Board of Directors adopted Resolution No. 02-13, readopting the District's Investment Policy Statement, and establishing specific performance benchmarks and objectives, together with a schedule of frequency of investment performance reports; and, WHEREAS, pursuant to California Government Code Section 53607, the Board of Directors may delegate authority to invest and/or reinvest District's funds to the Treasurer for a one-year period; and, WHEREAS, pursuant to California Government Code Section 53646, the District is required to review its Investment Policy annually and readopt its Policy at a public meeting, which Policy will establish specific performance benchmarks and objectives, and specific monitoring and reports. NOW, THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That the authority of the Board of Directors to invest or reinvest District's surplus funds, or to sell or exchange securities so purchased, or to deposit for safekeeping the funds and investments of the Districts with depositories, as provided for in California Government Code Sections 53608 and 53630, is hereby delegated to the District's Treasurer for a one-year period commencing on the date this Resolution is adopted, as authorized by California Government Code Section 53607. Section 2: That the Board of Directors hereby adopt the Investment Policy Statement of the Orange County Sanitation District, as set forth in Exhibit "A", attached hereto and incorporated herein by reference. Section 3: That the Board of Directors hereby adopt the following specific performance benchmarks for their two investment funds in accordance with Section 14.0 of the District's Investment Policy: LIQUID OPERATING MONIES: The Short-Term Operating Fund will be compared to the three month T-Bill rate, and the Callan Active Cash Flow Income Style Group. The Callan Active Cash Flow Income Style Group represents a peer group of managers who operate with a maximum maturity of one year. LONG-TERM OPERATING MONIES: The Long-Term Operating Fund will be compared to the Merrill Lynch Government and Corporate One-to-Five Year Maturity Index and to the Callan Defensive Fixed Income Style Group. Section 4: That the Board of Directors hereby adopt a performance monitoring and reporting schedule, as required by Section 15.0 of the District's Investment Policy, which schedule is attached hereto as Exhibit "B", and incorporated herein by reference. Section 5: That Resolution No. OCSD 02-13 is hereby repealed. PASSED AND ADOPTED at regular meeting held July 23, 2003. Chair ATTEST: Board Secretary G:\WP.DTA\FIN\210\CRANE\FAHA\FAHR2003\JUL\INVESTMENTPOLICY2003AESOLUTION.DOC POLICY REFERENCE 15.1.1 15.1.2 15.1.3 15.1.4 15.1.5 15.1.6 15.1.7 15.1.8 15.1.9 ADDL** ADDL** ADDL** ADDL** 15.1.10 Notes *M =Monthly *Q = Quarterly EXHIBIT 11 8 11 ORANGE COUNTY SANTIATION DISTRICT PERFORMANCE MONITORING & REPORTING FOR THE DISTRICT'S INVESTMENT PROGRAM PERFORMANCE CHARACTERISTIC Cost and market value of the portfolio (monthly mark-to-market). Modified duration of the portfolio compared to benchmark. Dollar change in value of the portfolio tor a 1 % change in interest rate. Percent of portfolio invested in reverse repurchase agreements, and a schedule which matches the maturity of such reverse repurchase agreements with the cash flows which are available to repay them at maturity. For the Liquid Operating Monies account only, the percent of portfolio maturing within 90 days. Average portfolio credit quality. Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities. Listing of any transaction or holdings which do not comply with this policy or with the California Government Code. Time-weighted total rate of return tor the portfolio for the prior three months, twelve months, year-to-date, and since inception compared to the benchmark returns tor the same periods. Comparison of portfolio performance to market index benchmark. Comparison of Manager's performance to peer group benchmark. Monitoring of organizational and structural changes of investment management firm. Audit portfolios tor compliance with investment policy guidelines. REPORTING PARTY* PIMCO MELLON CALLAN M,Q M,Q Q M,Q Q M,Q Q M,Q M,Q Q M,Q Q M,Q Q M,Q M,Q Q M,Q Q Q Q Q OCSD will report if sufficient funds are available tor it to meet operating expenditure requirements tor the next six months, or if not, state the reason for the shortfall. ** ADDL= Monitoring of Additional Petormance Characteristics G:\wp.dta\fin\220\white\Treasury Mgmt\lnvestment Policy\2002-03\Montioring Apt.doc Exhibit "B" FY 2003-04 Performance Monitoring & Reporting Schedule For the FAHR Committee The Monthly Treasurer's The Quarterly Investment and Board of Directors Report to be presented Management Program meetings of: for the month of: Report to be presented for the period of: July 2003 June 2003 August July April -June 2003 September August October September November October July -Sept 2003 December November January '04 (Board only) December February January 2004 Oct -Dec 2004 March February April March May April Jan -March 2004 June May G:\wp.dta\fln\220\white\Treasury Mgmt\lnvestment Policy\2003--04\Exhibit B.doc I : f ,: MINUTES OF MEETING OF JOINT GROUNDWATER REPLENISHMENT SYSTEM COOPERATIVE COMMITTEE ORANGE COUNTY SANITATION DISTRICT AND ORANGE COUNTY WATER DISTRICT May 12, 2003, 5:30 p.m. Chair Philip Anthony called to order the meeting of the Joint Cooperative Committee for the Groundwater Replenishment System. The meeting was held in the Boardroom of the Orange County Water District. The following persons were present: OCSD Directors Shirley McCracken Norman Eckenrode, Vice Chair Brian Donahue Steve Anderson, Alternate No. 3 OCSD Staff Blake Anderson Carol Beekman Bob Ooten Brad Hogin (Counsel) Others Present Wes Bannister Denis Bilodeau Debra L. Burris, DDB Engineering, Inc. Paul Brown, Camp Dresser & McKee, Inc. Dick Corneille, Camp Dresser & McKee, Inc. David Mosher, Montgomery Watson Harza Abdul Rashidi, Montgomery Watson Harza Mike Damitrache, Northwest Pipe Company Dennis MacLain, City of Huntington Beach Steve Tedesco, Tetra-Tech Bob Finn, Brown & Caldwell Brenda Deeley, Porter Novelli Joseph Forbath, Woodruff, Spradlin & Smart PLEDGE OF ALLEGIANCE CONSENT CALENDAR OCWD Directors Philip Anthony, Chair Paul Cook Larry P. Kraemer, Jr. Kathryn Barr, Alternate No. 1 Brett Franklin, Alternate No. 2 OCWD Staff Joanne Daugherty Bill Everest Jenny Glasser Larry Labrado Michael Markus Mehul Patel Marilyn Kuga, Recording Secretary Upon motion duly made, seconded and carried, the Consent Calendar was approved as follows, with Director Cook abstaining on Item No. 3: 1. Minutes of Previous Meeting The Minutes of the April 14, 2003 Joint Cooperative Committee Meeting were approved as mailed. 2. Issuance of Change Order No. 2 to Woodruff, Spradlin & Smart Task Order for Special Legal Services Recommended for approval at the May 21 OCWD Board meeting: Authorize issuance of Change Order No. 2 in the amount of $70,000 to Woodruff Spradlin & Smart Task Order No. 231067 to continue providing legal services in the Pall v. OCWD litigation, bringing the total Task Order amount to $119,500. 3. Addendum No. 9 to Professional Services Agreement (PSA) with COM Recommended for approval at the May 21 OCWD Board meeting: Approve and authorize issuance of Addendum No. 9 in the amount of $383,291 to the Professional Services Agreement (PSA) with Camp Dresser & McKee (CDM) in accordance with their PSA, providing for a cost- of-living increase of 3.52 °/o for 2003, increasing the authorized amount from $32,898,245 to an amount not to exceed $33,281,536. MATTERS FOR CONSIDERATION 4. Approval of Plans and Specifications and Authorization to Solicit Bids for the Groundwater Replenishment System Unit III Pipeline Project Program Manager Mike Markus reported that plans and specifications for the GWR System Unit III Pipeline Project, estimated at $19 .9 million, have been completed and that bids will be opened July 2, 2003. He further informed the Committee that construction on the $1.5 million Lacy Pipeline Project and the $800,000 temporary trailer complex have been completed. Upon motion by Director Donahue, seconded by Director Cook and carried, the Committee approved the plans and specifications for the GWR System Unit III Pipeline Project and authorized the OCWD General Manager to solicit bids for the project. 5. Addendum No. 8 to the Professional Services Agreement CPSA) with CDM Design Manager Bill Everest briefly explained changes in the Scope of Work with Camp Dresser & McKee, Inc. (COM) which resulted in a decrease of$22,397 to the authorized budget. Upon motion by Director Kraemer, seconded by Director McCracken and carried, with Director Cook abstaining for reasons of campaign contributions from Camp Dresser & McKee, Inc. (CDM) in excess of $250, the Committee recommended that the OCWD Board, at its May 21, 2003 meeting: Approve and authorize issuance of Addendum No. 8 to the Professional Services Agreement with Camp Dresser & McKee, Inc., decreasing the authorized amount by $22,397, from $32,920,642 to an amount not to exceed $32,898,245, for changes in the Scope of Work. 6. Change Order No. 5 to the Task Order with Separation Processes, Inc. Bill Everest explained that, as a result of changes initiated by staff since March 2001 to the Scope of Work with Separation Processes, Inc., additional fees have been incurred. 2 Upon motion by Director Donahue, seconded by Director Eckenrode, with Director Cook abstaining for reasons of campaign contributions from Camp Dresser & McKee, Inc. (CDM) in excess of $250, the Committee recommended that the OCWD Board, at its May 21, 2003 meeting: Approve and authorize issuance of Change Order No. 5 in the amount of $161,561 to Task Order No. 201301 with Separation Processes, Inc., for changes in the Scope of Work, increasing the total amount of the Task Order from $2,016,075 to $2,177 ,636. 7. Contract No. GWRS 2162, AWTF Ultraviolet Disinfection and Oxidation System Pre- Selection (Trojan): Change Order Nos. 1 & 2 Senior Engineer Mehul Patel briefly described the reasons for Change Orders No. 1 and No. 2 as follows: Change Order No. 1 involves changes to the Process Control System at a contract price increase of $82, 785 .29 and no time extension; Change Order No. 2 involves a series of design changes at a contract price decrease of$976,767.39 and no time extension. Mr. Patel assured the Committee that the overall budget would not be affected and that monies are merely being shifted from the UV contract to the A WTF contract, with some monies being put into contingency. Upon motion by Director Eckenrode, seconded by Director Donahue and carried, the Committee recommended that the OCWD Board, at its May 21, 2003 meeting: Authorize issuance of Change Order Nos. 1 and 2 to the Trojan Technologies Agreement for a total contract price decrease of $893,982.10. INFORMATION 8. Groundbreaking Events Discussion on this item was deferred to the next GWR System JCC Meeting due to the absence of Ron Wildermuth. 9. Project Schedule and Budget Update Mr. Markus briefly summarized the schedules for each of the seven major contracts for the GWR System as follows: Southeast Barrier Pipeline - This project remains scheduled for completion from mid to late September 2003. Initial Microfiltration/Site Power Distribution - This project has been awarded and the Notice to Proceed to begin the project will be issued shortly. GWR Unit 3 Pipeline - Bids for this project are expected to be received on July 2, 2003. GWR Unit 2 Pipeline - Staff will bring this project back to the JCC-GWRS Committee in August following re- routing design approvals of the regional bike trail from the Cities of Santa Ana and Garden Grove. 3 Barrier Wells and Facilities - Staff will return to the JCC-GWRS Committee in August with plans and specifications for extending the existing barrier on Ellis to the west up to Beach Boulevard. GWR Unit 1 Pipeline- Staffmet with the Anny Corps of Engineers and will return to the JCC-GWRS Committee in July with an update regarding pipeline alignment issues. A WTF Contract - This main contract remains right on schedule for bid approval at the November JCC-GWRS Committee Meeting. 10. Southeast Barrier Pipeline Progress Mr. Markus provided an update on progress of the Southeast Barrier Pipeline. 11. Status Report A. Grants and Loans Update - Mr. Everest briefly summarized various grants and loans and added that staff will follow up with applying for MWD Local Resources Program (LRP) rebate project mom es. B. Public Information and Education Update - This report was deferred to the nextJCC-GWRS Committee due to the absence of Ron Wildermuth. The Committee was reminded that a Public Information and Education (PIE) meeting will be held on May 27, 2003. DIRECTORS' ANNOUNCEMENTS/REPORTS • As previously suggested by Director Anthony, he again stressed that a sub-committee be formed to develop concepts for a Visitors' Center. GENERAL MANAGER'S ANNOUNCEMENTS/REPORTS Orange County Sanitation District General Manager Blake Anderson announced that the OCSD Board took additional action regarding funding for secondary treatment. ADJOURNMENT TO CLOSED SESSION: (6:35 p.m.) CONFERENCE WITH LEGAL COUNSEL -EXISTING LITIGATION [Government Code Section 54956.9(a)] Pall Corporation v. OCWD -Superior Court Case No. 02CC06622 Joseph Forbath of Woodruff Spradlin & Smart briefly updated the Committee. 4 T RECONVENE IN OPEN SESSION: The Committee reconvened in open session at 6:44 p.m., whereupon Director Anthony announced that no action was taken in Closed Session. ADJOURNMENT: The Committee adjourned at 6:45 p.m. Director Philip Anthony, Chairman 5 MINUTES OF MEETING OF JOINT GROUNDWATER REPLENISHMENT SYSTEM COOPERATIVE COMMITTEE .ORANGE COUNTY SANITATION DISTRICT AND ORANGE COUNTY WATER DISTRICT June 9, 2003, 5:30 p.m .. Chair Philip Anthony called to order a meeting of the Joint Cooperative Committee for the Groundwater Replenishment System in the Boardroom of the Orange County Water District on June 9, 2003, at 5:30 p.m. The following persons were present: OCSD Directors Shirley McCracken Norman Eckenrode, Vice Chair Brian Donahue OCSD Staff Blake Anderson Carol Beekman Others Present Paul Brown, Camp Dresser & McKee, Inc. Bruce Chalmers, Camp Dresser & McKee, Inc. Dick Corneille, Camp Dresser & McKee, Inc. Amy Rego, Metropolitan Water District David Mosher, Montgomery Watson Harza Abdul Rashidi, Montgomery Watson Harza Mike Dumitrache, Northwest Pipe Company CONSENT CALENDAR OCWD Directors Philip Anthony, Chair Paul Cook Larry P. Kraemer, Jr. Kathryn Barr, Alternate No. 1 OCWD Directors Wes Bannister Denis Bilodeau Jan Dehay OCWD Staff Joanne Daugherty, Engineer Shivaji Deshmukh, Senior Engineer Bill Everest, Design Manager Larry Labrado, Legislative Affairs Specialist Michael Markus, Program Manager Craig Miller, Assistant General Manager Mehul Patel, Senior Engineer Wendy Sevenandt, Project Manager Ron Wildermuth, Director of Communications Marilyn Kuga, Recording Secretary Upon motion duly made, seconded and carried, the Consent Calendar was approved as follows: 1. Minutes of Previous Meeting The Minutes of the May 12, 2003 Joint Cooperative Committee Meeting were approved as mailed. 2. Task Order to Twining.Govil.Ryan {TGR) for Field and Laboratory Soils & Materials Testing Services for the Initial Microfiltration/Site Power Distribution Project Recommended for OCWD approval at the June 18 Board meeting: Authorize issuance of a Task Order to Twining.Govil.Ryan (TGR) in an amount not to exceed $62,664 to provide field and laboratory soils and materials testing services for the Initial Microfiltration/Site Power Distribution Project. MATIER FOR CONSIDERATION 3. Contract No. GWRS-2001-3 -Groundwater Replenishment System Southeast Barrier Pipeline (Mladen Buntich Construction Co., Inc.): Change Orders No. 1 -4 Program Manager Mike Markus presented the procedures that are currently in place on the GWRS project for dealing with change orders. Following this presentation, Mr. Markus requested the Committee's approval of four change orders involving a change in conditions on the Southeast Barrier Pipeline project. At this point, Director Cook expressed concerns regarding the approval process for change orders. OCSD General Manager Blake Anderson commented that it is common practice at OCSD to have change orders ratified after the fact by their Board. Additionally, he stated that OCSD follows a protocol whereby a report is generated for the Committee's review at a point when staff becomes aware of cumulative change orders exceeding 5% on the project. Mr. Anthony explained that this process assures the Committee that staff continues to exercise its due diligence and that the project continues to be administered appropriately. However, he noted the importance of allowing an amount of discretion to staff to make decisions to avoid a project delay. Director Cook agreed with the procedures followed by the OCSD and suggested modification of the OCWD Change Order Policy. Upon motion by Director Cook, duly seconded and carried, the Committee recommended that the OCWD Board, at its June 18, 2003 Board meeting: 1) Ratify issuance of Change Order No. 1 for an increase in contract price of $18,436.37 and an increase of one calendar day to the contractual completion date; and 2) Authorize issuance of Change Orders Nos. 2 through 4 for an increase in contract price totaling $63,139.00 and an increase of three calendar days to the contract completion date. INFORMATIONAL ITEMS At a recent Santa Ana Watershed Project Authority (SA WPA) conference, OCWD Director Denis Bilodeau and OCSD Director of Technical Services Dr. Robert Ghirelli accepted, on behalf of the GWR System, the 2003 Drought-Proofing Award for assistance with drought-proofing the Santa Ana Watershed. Huell Howser, who presented this award, commented that he is quite fascinated with the GWR System and will be contacting the Committee to do a program on this project. Director Bannister added that Craig Miller accepted, on behalf of OCWD, the 2003 Ruth Anderson Wilson Award by SA WP A for arundo removal. 2 .,. 6 I \ .J 4: Groundbreaking Events Director of Communications Ron Wildermuth reported that staff is planning four major water treatment and three pipeline ceremonies to remind the stakeholders and the media that the GWRS project is moving forward. Mr. Wildermuth also reported that OCSD General Manager Blake Anderson has agreed to loan a special cutaway of a pipeline for each of the planned pipeline ceremonies for picture-taking. 5. Related Projects In response to the Committee's request for information on other projects relevant to the GWR System, Design Manager Bill Everest briefly reviewed projects in the United States, Africa and Singapore, and summarized that producing approximately 120,000 acre-feet per year of projects have been operating successfully with no negative health effects. Director Anthony pointed out the significance of reviewing these related projects for the historical value they provide with regard to safety and health effects issues and requested that staff provide additional health effects and other information on the Whittier Narrows Project at the next JCC meeting. 6. Project Schedule and Budget Update Mr. Markus briefly summarized the schedules for each of the seven major contracts for the GWR System as follows: Southeast Barrier Pipeline - This project remains scheduled for completion from mid to late September 2003. Initial Microfiltration/Site Power Distribution - This project has been awarded and the Notice to Proceed has been issued. Demolition of the water fountain and the old chlorine contact basin is scheduled to begin within the next two weeks. Installation of the underground electrical conduits, the backbone for the future electrical requirements for the Advanced Water Treatment Facility (AWTF) and the micro- filters, will commence thereafter. The project is on schedule and completion is scheduled for June 2004, the contract completion date for this project. GWR Unit 3 Pipeline - Ten general contractors were given a site tour of this project at a recent pre-bid meeting. This project has been advertised for bid on July 2, 2003 and, by the next JCC-GWRS meeting, bid results for the first of the three major pipelines will be known. GWR Unit 2 Pipeline - By the end of June, final permit approval will be submitted to the Flood Control District and the City of Santa Ana on the bike relocation trail detour through the City of Santa Ana. Following permit approvals, staff will return to the Committee in August for approval of plans and specifications to advertise this particular project. 3 Barrier Wells and Facilities - Staff will shortly complete 90% design review of the barrier wells and facilities, which involves the installation of eight new injection wells to extend the barrier from Newland to Beach Boulevard on the west end of the barrier and connect four wells to the Southeast Barrier Pipeline. Staff will return to the Committee in August for approval of plans and specifications. GWR Unit 1 Pipeline - The pipeline from the A WTF plant in Fountain Valley up to 17th Street in Santa Ana is in final negotiations with the Army Corps of Engineers. However, due to concerns by the Corps regarding alignment of the levee, as well as receiving final approval from the Flood Control District, plans to update the Committee in July will be postponed. The schedule to advertise for bids on the Unit I and Unit 2 pipelines will most likely occur by the end of summer and will not delay the overall completion of the project. A WTF Contract - Design is right on schedule for this project. A series of workshops with staff and the design engineer will be held. The 90% design submittal is scheduled for August 18th, with plans to return to the Committee in November 2003 for approval to advertise. Mr. Markus then referred to the Budget and reported that the project is tracking very well, noting expenditures of approximately $27 million to date. 7. Southeast Barrier Pipeline Progress Mr. Markus updated the Committee on progress of the Southeast Barrier Pipeline. 8. Status Report A. Grants and Loans Update - Bill Everest briefly summarized the following grants and loans: • The Department of Water Resources (DWR) has promised to send to us the $30 million grant contract this week. • The State Board has indicated that they will send to us the $5 million grant agreement within the next couple of weeks. • Staff prepared and submitted to the Department of Water Resources an application for additional funding from DWR in the amount of $20 million for Phase Two of the project. This project involves a ten-million-gallon per day expansion of the GWR System, together with purchase and development of another recharge basin, Mira Loma Basin. Shivaji Deshmukh and his team were commended for their work on this application. • Staff is preparing to submit a proposal to Metropolitan Water District (MWD) for rebate funding under the Local Resources Program (LRP) for Phase Two of the project. • A meeting has been scheduled with MWD of OC and MWD to discuss LRP funding for Phase One. 4 .J DIRECTORS' ANNOUNCEMENTS/REPORTS Director Anthony reported that a sub-committee met to discuss the GWR System center and decided to refer to the center as an Education Center rather than a Visitors' Center. Furthermore, he stated that the sub-committee felt that a visit to an existing center, the West Basin Water Recycling Plant, would provide beneficial concepts, examples and ideas, and requested that staff coordinate this visit. Director Cook commended Bill Everest and Ron Wildermuth for their assistance on a presentation Director Cook made to the Associate General Contractors' Group regarding capital projects. ADJOURNMENT TO CLOSED SESSION: Mike Markus advised that there would be no need to adjourn to Closed Session this evening. ADJOURNMENT The meeting was adjourned at 6:32 p.m. Director Philip Anthony, Chairman 5 I ,. BOARD OF DIRECTORS AGENDA REPORT Orange County Sanitation District FROM: David Ludwin, Director of Engineering Originator: Bob Schirripa, Project Manager . Meeti ng Da te Item Number To Bd. of Dir. 07/23/03 Item Numbe r 16 SUBJECT: FACILITIES MODIFICATION FOR ODOR CONTROL II, JOB NO. J-71-3 GENERAL MANAGER'S RECOMMENDATION (1) Approve Plans and Specifications for Facilities Modification for Odor Control II , Job No. J-71-3, on file at the office of the Board Secretary; (2) Receive and file Bid Tabulation and Recommendation; and (3) Award Construction Contract to J .F. Shea Construction, Inc. for Facilities Modification for Odor Control II , Job No . J-71-3 , for an amount not to exceed $1,899 ,875. SUMMARY This project , along with Job No . J-71-1 and Job No. J-71-2 which were previously constructed , provides improvements to odor collection and treatment at Reclamation Plant No. 1 (Plant No . 1) and Treatment Plant No. 2 (Plant No. 2) to minimize odor impact to residents neighboring the treatment plants. The primary basis for this project comes from the significant public comment that was received regarding odors on the Strategic Plan Environmental Impact Report (EIR). This project w ill implement near term so l utions t o mitigate odor complaints. The construction contract includes the following: • Plant No. 1 : Modifications of the point source ventilation system and the installation of bio filters to control odors generated at the Wastehauler Station . Enhancement of the existing point source collection system for the Dewatering Bui ldi ngs "C" and "M". • Plant No. 2 : Construction of flat covers at the Termination Channel , Junction Box No. 8 , and Distribution Structure No . 1. Repair corrosion at Junction Box No. 8 and Distribution Structure No . 1. Construction of by-passes with t he associated pumps and piping to provide for uninterrupted plant operations during the const ruction activities. • The plans and specifications for Job No. J-71-3 were completed in early May 2003 and advertised w ith a bid date of June 3 , 2003. The fou r firms that s ubmitted bids were Kiewit Pacific , S .S. Mechanical , Margate Construction , and J .F. Shea Construction , Inc. Staff evaluated the bids in accordance with District pol icy and recommends award of the construction contract to J .F. Shea Construction , In c. for an amount not to exceed $1 ,899,875 . G:lwp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703~tem 16.J -71 -3.doc Revised: 8110/98 Page 1 Current Project Budget Construction Budget Engineer's 100% Design Estimate Low Responsive Bid High Bid Number of Bids $4,127 ,317 $2,367,378 $1,768, 150 $1,899,875 $2,213,000 4 The Director of Engineering recommends award of the construction contract to J.F. Shea Construction, Inc. for an amount not to exceed $1,899,875. PRIOR COMMITIEE/BOARD ACTIONS 1. Board Meeting , June 28, 2000; Item No. 14(g); Approve PSA for Black & Veatch Corporation to provide design services for Job No. J-71-3. 2 . Board Meeting , June 27, 2001; Item No. 14(f); Approve of Addendum No. 2 of the Professional Services Agreement (PSA) for Black & Veatch Corporation. 3 . Board Meeting, April 24, 2002; Item No. 13(f); Approve a budget amendment to increase budget to $2,900,000 PROJECT/CONTRACT COST SUMMARY In addition to seeking approval of $1 ,899,875 for the construction contract, $592,043 for construction management will be expended, bringing the total to $2,491,918. BUDGET IMPACT k8:I This item has been budgeted. (Line item: Section 8-Page 93) D This item has been budgeted , but there are insufficient funds. D This item has not been budgeted. D Not applicable (information item) In addition, $67,847 is being transferred from Contingency to Phase 3 to provide for additional labor costs. The overall total budget remains unchanged. ADDITIONAL INFORMATION The Strategic Plan Environmental Impact Report (EIR) received significant public comment regarding odors at Pla nt Nos. 1 and 2 . In addition, two project reports prepared by Carollo Engineers in January and April 1999 identified the facilities in Job No . J-71-3 as sources of odors which caused persistent complaints from plant neighbors. In July 2000, the District issued a PSA to Black & Veatch Corporation for the preparation of the final design and to provide support se rvices during construction. The design documents were completed in 2002 , and the bid documents were finalized in May 2003. The delay between the finalization of the design documents and the advertisement for bid was due to a reprioritization of the District projects. The major design features include: • Collection of point source odors from Distribution Structure No. 1 in Treatment Plant No. 2 (Plant No. 2). G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Repons\0703\lte m 16.J-71-3.doc Revi sed: 8110/98 Page2 ' - • Collection of point source odors from the Termination Channel in Plant No. 2. • Collection and treatment of point source odors from Junction Box No. 8 in Plant No. 2. • Collection and treatment of point source odors from the Wastehauler Station in Reclamation Plant No. 1 (Plant No. 1 ). • Collection of point source odors from Dewatering Buildings "C" & "M" in Plant No. 1. On June 3, 2003, the Orange County Sanitation District (District) opened four bids for Facilities Modification for Odor Control II project at Plant Nos. 1 and 2, Job No. J-71-3. The bids are summarized below: Contractor Total Bid,$ Kiewit Pacific 2,213,000 Margate Construction 2,022,000 SS Mechanical 1,911,393 J.F. Shea Construction, Inc 1,899,875 Staff recommended award of the construction contract to J.F. Shea Construction, Inc., in an amount not to exceed $1 ,899,875. ALTERNATIVES Do not award the construction contract. The effect of not awarding the construction contract would be to continue the emission of odors from the point sources identified in this project for Plant Nos. 1 and 2. The result would be continued complaints from the neighbors. CEQA FINDINGS This project was included in the District's Strategic Plan Program El R. The El R was certified on October 27, 1999 and a Notice of Determination was filed on October 29, 1999. In addition, a Notice of Exemption was prepared and will be filed prior to award of the Construction Contract. AITACHMENTS 1. Budget Information Table 2. Bid Tabulation BS:jo:sa G:\ntglobal\Agenda Draft Reports\Joint Boards\AR J-71-3 072303.doc G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\ltem 16.J-71-3.doc Revised: 8/10/98 Page3 PROJECT/TASK ;· '" BUDGET INFO RMATI O N TABLE COLLEGE AVENUE REPL ACEMENT FORCE MAINS JOB NO. 7·23·1 .. ORIGINAL CllRRElff PROPOSED PROPOSED fUNOS nus PROPOSED AUTIIORIZED PROJECT BUDGET REVISED AUTIIORIZED Al1THORl2ATION TOTAi. ESTIMATED EXPEll OOURE TO DATE ESTIMATED EXPE!IOED TOOATE('I') BtlDGET BUDGET,· INCREAS1' BUDGET '11 TO DATE REQUEST AUTIIORl2ATION i--~~~~;;;_-1--~~~"*~·~1--~--'w:::;::0t+-~~~-"'1:.....'~·····~~~·r·f? •. r_·'~~~+-·~.;;_ .... _,~~~-1-~¥~:'-.,,,~~~-'"~·1.; __ ~~~-t-~~~-i 2.000 1,000 Stuctt.s/Pe ~-5.000 s 5.000 s 157000 $ 161.000 Ottsinn StaH 61.000 63.000 Cons1ruc1tonContract S t .030.000 S 1.o.31,000 Construction Admlrli,tmlioo Construction Ins---=-- PROJECT TOTAL IR.imbursabkt Costs. PROJECT NET 171 .000 s 169.000 141.000 s 146.000 310.000 $ 310.000 1.en.000 1,886,000 1.en.000 s 1.886.000 s C lf'lotHetW IP~ T"'* 2000 dl.jo..trtets EDMS .oo371NO; s $ 1,000 1,000 1.000 s 5,000 5,000 5,000 $ 161,000 48,8 15 16,830 s &5.645 $ 63.000 63.000 63.000 s 1.031.000 169,000 146,000 310.000 1,886,000 117,815 $ 16.830 134,645 69,238 51 ~. I I 1.886.000 117,815 $ 16,830 $ 134,645 $ 69,238 51 ~. June 3 , 2003 11 :00 a.m. ADDENDUM NO.: 1 & 2 BID TABULATION PLANT NOS. 1 AND 2 FACILITIES MODIFICATIONS FOR ODOR CONTROL JOB NO. J-71-3 Engineer's Estimate: $1 ,768 ,150 Construction Contract Budget: $2,367,378 CONTRACTOR TOTAL BID 1. J. F. Shea Construction , Inc . $ 1 ,899 ,875 2. S . S . Mechanical Corporation $ 1 ,911 ,393 3. Margate Construction , Inc. $ 2 ,022,000 4 . Kiewit Pacific Co. $ 2 ,213,000 5. $ 6 . $ 7 . $ 8 . $ I have reviewed the proposals submitted for the above project and find that the low bid is a responsible bid. I, therefore , recommend award to J. F. SHEA CONSTRUCTION, INC . in the bid amount of $1,899,875 as the lowest and best bid . David A. Ludwin , P.E. Director of Engineering G:\wp.dta\agenda\Board Age nda Repo rt s\2003 Board Agenda Reports\070 3\l tem 16.2.doc Revised 0 5/19/98 OCS D • P.O. Box 8127 • Fountain Va lley , CA 92728-8127 • (714) 962-241 1 .. , I ·' '·' . vi · Orange County Sanitation District Financing Corporation MINUTES June 26, 2002 ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708-7018 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District Financing Corporation (OCSDFC) was called to order on June 26, 2002, at 10:47 p.m., in the District's Administrative Offices. The roll was called and the Secretary reported a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS x Norman Z. Eckenrode, Chair Constance Underhill x Shirley McCracken, Vice Chair Tom Daly x Mike Alvarez Mark A. Murphy x Steve Anderson Steve Simonian x Don Bankhead Jan Flory x Brian Brady Darryl Miller x Patricia Campbell Paul Yost x Debbie Cook Connie Boardman x Laurann Cook Larry Crandall x Brian Donahue David Shawver A James M. Ferryman Arlene Schafer John M. Gullixson x Michael Duvall x Alice B. Jempsa Arthur DeBolt x Tony Kawashima Tracy Worley x Beth Krom Greg Smith x Mark Leyes Bruce Broadwater x Pat McGuigan Alberta Christy x Roy Moore Marty Simonoff A Joy Neugebauer Grace Epperson x Russell Patterson Richard A. Freschi x Anna L. Piercy Tim Keenan x Tod Ridgeway Gary Adams x Jerry Sigler Jim Dow x Jim Silva Chuck Smith x Paul Walker Kenneth Blake APPROVAL OF MINUTES The Chair ordered that the minutes of the meeting held on September 26, 2001 be deemed approved, as mailed. Directors Brian Brady and Tod Ridgeway abstained. REPORT OF THE DIRECTOR OF FINANCE Gary Streed reported that although the Finance Board needs to meet only once per year by charter, additional meetings will be held throughout the upcoming year as staff prepares to issue certificates of participation or to initiate a commercial paper program for the capital improvement program that was approved in the OCSD budget. He also reported that property taxes were sufficient to cover all principal and interest payments and that they were made on time during the past year. The year end balance of outstanding certificates of participation is $376 million. ADJOURNMENT: The Chair declared the meeting of the Orange County Sanitation District Financing Corporation adjourned at 10:50 p.m. .) ,..~· l " BOARD OF DIRECTORS Meeting Da te To Bd. of Di r . 7-23-03 AGENDA REPORT Item Nu mber Item Number Orange County Sanitation District FROM: Gary G . Streed, Director of Finance SUBJECT: ADOPTION OF FINANCING CORPORATION RESOLUTION AUTHORIZING SERIES 2003 CERTIFICATES OF PARTICIPATION (COPs) GENERAL MANAGER'S RECOMMENDATION lB(d) ADOPT RESOLUTION NO. FC-02 , A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION AUTHORIZING THE EXECUTION AND DELIVERY BY THE CORPORATION OF AN INSTALLMENT PURCHASE AGREEMENT AND A TRUST AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT CERTIFICATIES OF PARTICIPATION , SERIES 2003, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH CERTIFICATES EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $280,000 ,000 AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS." SUMMARY The FAHR Committee and the Board of Directors have previously authorized the issuance of $280 million of new Certificates of Participation and the hiring of a financing team. The independent financial advisor is Public Resources Advisory Group and the bond counsel is Orrick , Herrington & Sutcliffe. Woodruff , Spradlin & Smart, our General Counsel, has also been assisting staff. Cost of these services will be paid from proceeds from the COPs issue. The purpose of the financing is to reimburse the District for use of reserve funds for specific capital projects over the past few years and to provide a portion of the funding required for the capital improvement program of 2003-04 and 2004-05. The Orange County Sanitation District Financing Corporation was formed in 2000 for the sole purpose of facilitating future COP issues. A third party, in addition the Sanitation District and the Investors, is required by the COP structure. The proposed Resolution is attached. PRIOR COMMITTEE/BOARD ACTIONS No prior Financing Corporation actions related to this issue . PROJECT/CONTRACT COST SUMMARY The Consultant Services Agreements with PRAG and Orrick combine to total a not-to- exceed amount of $200,000 . This is approximately .07% of the COP issue. These and other costs , such as printing the Official Statement, bond insurance (if any), G:lwp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703~t em 18(d).2003 COP.doc Revised: 06/04/03 Page 1 underwriters' discount, rating agency fees and trustee's fees will be paid from the proceeds of the borrowing. Total costs of issuance are expected to be less than $400,000. The $280 million that is borrowed will be repaid with interest over the next 30 years . The total interest cost is expected to be less than 5 . 75%, or approximately $314 million. Much of the interest cost will be offset by interest earnings while the funds are waiting to be used . BUDGET IMPACT [8] This item has been budgeted. (Line item: ) D This item has been budgeted , but there are insufficient funds. D This item has not been budgeted . D Not applicable (information item) ADDITIONAL INFORMATION The Board of Directors and the Financing Corporation will each be required to adopt separate Resolutions to complete this borrowing. A draft of the Financing Corporation Resolution is attached. A draft of the OCSD Resolution is attached to the FAHR Committee Agenda Report recommending several OCSD actions. A Financing Corporation is required by the structure of the COPS and was formed in April 2000 solely to satisfy this need. The Board of Directors of the Corporation is the same as the Board of Directors of the District and the Corporation meets after an adjournment of the OCSD Board. ALTERNATIVES Do not issue new certificates of participation , but increase user fees to fund the capital improvement program. CEQA FINDINGS N/A ATTACHMENTS 1. Draft Resolution of OCSD Financing Corporation G:lwp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0703\Jtem 18(d).2003 COP.doc Revised : 06/04/03 Page 2 -r RESOLUTION NO. FC-02 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION AUTHORIZING THE EXECUTION AND DELIVERY BY THE CORPORATION OF AN INSTALLMENT PURCHASE AGREEMENT AND A TRUST AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT CERTIFICATES OF PARTICIPATION, SERIES 2003, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH CERTIFICATES EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $280,000,000 AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS. WHEREAS, the Orange County Sanitation District (the "District") desires to finance the acquisition, construction and installation of certain improvements to its wastewater system (the "Projecf'); WHEREAS, in order to finance the Project, the District desires to purchase the Project from the Orange County Sanitation District Financing Corporation (the "Corporation"), and the Corporation desires to sell the Project to the District, for the installment payments (the "Installment Payments") to be made by the District pursuant to an Installment Purchase Agreement (such Installment Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Installment Purchase Agreement"); WHEREAS, the Corporation proposes to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to Union Bank of California, N.A., as trustee (the "Trustee"), pursuant to a Trust Agreement among the Trustee, the Corporation and the District (such Trust Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the "Trust Agreemenf'); WHEREAS, in consideration of such assignment and the execution and entering into of the Trust Agreement, the Trustee will execute and deliver Orange County Sanitation District Certificates of Participation, Series 2003 (the "Certificates"), evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, payable under the Installment Purchase Agreement; WHEREAS, there have been prepared and submitted to this meeting forms of: (a) the Installment Purchase Agreement; and (b) the Trust Agreement; WHEREAS, all acts, conditions and things required by the Constitution and laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the actions authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Corporation is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such actions for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, the Board of Directors of Orange County Sanitation District Financing Corporation DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1 . All of the recitals herein contained are true and correct and the Board of Directors of the Corporation (the "Board") so finds. Section 2. The Installment Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The President of the Corporation, the Vice-President of the Corporation, the Treasurer of the Corporation and the Secretary of the Corporation, and such other officer of the Corporation as the President may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the Corporation, to execute and deliver the Installment Purchase Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Installment Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate principal amount of Installment Payments in excess of $280,000,000, shall not result in a true interest cost for the Installment Payments in excess of 5.75% and shall not result in a final Installment Payment later than February 1, 2033. Section 3. The Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for and in the name of the Corporation, to execute and deliver the Trust Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Trust Agreement by such Authorized Officer. Section 4. The execution and delivery of Certificates evidencing principal in an aggregate amount of not to exceed $280,000,000, payable in the years and in the amounts, and evidencing direct, undivided fractional interests in the Installment Payments, and the interest thereon, as specified in the Trust Agreement as finally executed, are hereby authorized and approved. Section 5. The officers and employees of the Corporation are, and each of them hereby is, authorized and directed to execute and deliver any and all documents 2 and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the execution and delivery of the Certificates and the transactions contemplated by the agreements or documents referenced in this Resolution. Section 6. All actions heretofore taken by the officers and employees of the Corporation with respect to the execution, delivery and sale of the Certificates, or in connection with or related to any of the agreements or documents referenced in this Resolution, are hereby approved, confirmed and ratified. Section 7. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED at a meeting held July 23, 2003. ATTEST: Secretary, Board of Directors of the Orange County Sanitation District Financing Corporation APPROVED: General Counsel, Orange County Sanitation District Financing Corporation 3 President, Orange County Sanitation District Financing Corporation STATE OF CALIFORNIA ) ) SS COUNTY OF ORANGE ) I, Penny Kyle, Secretary of the Board of Directors of the Orange County Sanitation District Financing Corporation, do hereby certify that the foregoing Resolution No. FC-02 was passed and adopted at a meeting of said Board on the 23rd day of July, 2003, by the following vote, to wit: AYES: NOES: ABSTENTIONS: ABSENT: IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of Orange County Sanitation District Financing Corporation, California, this 23rd day of July, 2003. Secretary, Orange County Sanitation District Financing Corporation