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2003-08-27
ORANGE COUNTY SANITATION DISTRICT 2 � 9 August 21 , 2003 9 phone: (714)962-2411 fax: NOTICE OF MEETING (714)962-0356 www.ocsd.com mailing address: P.O. Box8127 BOARD OF DIRECTORS Fountain Valley,CA 92728-8127 ORANGE COUNTY SANITATION DISTRICT street address: 1 C844 Ellis Avenue Fountain Valley,CA 92708-7018 WEDNESDAY, AUGUST 27, 2003 — 7:00 P.M. Member Agencies 0 DISTRICT'S ADMINISTRATIVE OFFICES Cities 10844 Ellis Avenue Anaheim Fountain Valley, California 92708 Brea Buena Park Cypress Fountain Valley Fullerton Garden Grove The Adjourned Regular Meeting of the Board of Directors of the Orange County Huntington Beach Irvine Sanitation District will be held at the above location, time and date. La Habra La Palma Los Alamitos Newport Beach Orange �. Placentia Santa Ana Board Secreta Seal Beach Stanton Tustin Villa Park Yorba Linda OMTS COMMITTEE - Wednesday, September 3, 2003 at 5:00 p.m. County of Orange PDC COMMITTEE - Thursday, September 4, 2003 at 5:00 p.m. Sanitary Districts JOINT GROUNDWATER REPLENISHMENT Costa Mesa SYSTEM COOPERATIVE COMMITTEE - Monday, September 8, 2003 at 5:30 p.m. @OCWD Midway City Water Districts FAHR COMMITTEE - Wednesday. September 10, 2003 at 5:00 p.m. Irvine Ranch PDC COMMITTEE - Thursday, September 18, 2003 at 5:00 p.m. STEERING COMMITTEE - Wednesday, September 24, 2003 at 5:00 p.m. To maintain world-class leadership in wastewater and water resource management. ........... BOARD MEETING DATES Board Meeting 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 August 25, 2004 *Meetings are being held on the third Wednesday of the month GAwp.dtaladmin\BSlAgenda12003 Meeting Notices\MN8.2.doc ROLL CALL BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT MEETING DATE: August 27, 2003 TIME: 7:00 p.m. / o� I� �s(SIMONIAN) .................... ANDERSON................... 'z z_ ✓ _� (WILSON) ........................ BANKHEAD................... ✓ _� � /'V (SWAN) ............................ BRADY ........................ ✓ � ✓ r✓ (YOST) ............................ CAMPBELL ................... (AMBRIZ).......................... CAVECCHE...................�� AT- X- 5�y(� (GARCIA) ......................... CHRISTY..................... ✓ ✓ N (CRANDALL).................... COLLINS ...................... ✓ _� �� (BOARDMAN) ................. COOK .......................... ✓ Al A/ (BROADWATER) ............. DALTON....................... ✓ ✓ X = Sy0 (SHAWVER) .................... DONAHUE..................... (WILSON)........................ DUVALL...................... _� ✓ �� (UNDERHILL)................... ECKENRODE................._. (SCHAFER)...................... FERRYMAN................... _� ✓ (POE)................................ JEMPSA...................... S-V 2 kj�' (DAVERT)......................... ............... ✓ ✓ ✓ �� (SHEA) ............................. KROM........................ ✓ ✓ ,✓ ✓ (DOW) ............................. MARSHALL.................. � �� V (HERNANDEZ)................. MC CRACKEN............... ✓ �/ ✓ _,� (FRESCHI) ....................... MC GOWAN ................. ✓ _� �� (BEAUMAN) ..................... MOORE........................ ✓ ,✓ ✓ J� (EPPERSON) ................... NEUGEBAUER.............. �_ ✓ �✓ ✓ (KEENAN) ........................ PIERCY........................ ✓ ✓ ✓ ✓ (WEBB) ...... RIDGEWAY.............. �- �� v- ...................... ..... (SMITH, CHUCK) ............. SILVA........................... ✓ �/ (HERMAN)........................ WALKER....................... Gti Cv STAFF: 4fe... Anderson Beekman 11Z Ghirelli Kyle Ludwin Mathews ,✓ Miles Ooten Tomko ✓ Streed OTHERS: Woodruff �✓ Nixon 07/23/03 G:1wp.dta\admin\BS\DIRECTOR\Directors Roll Call.doc ROLL CALL BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT MEETING DATE: August 27, 2003 "-�-T- : 7:00 p.m. (SIMONIAN) .................... ANDERSON................... �✓ (WILSON) ........................ BANKHEAD................... J (SWAN) ............................ BRADY ........................ (YOST) ............................ CAMPBELL ................... (AMBRIZ).......................... CAVECCHE.................. (GARCIA) ......................... CHRISTY..................... (CRANDALL).................... COLLINS ...................... ✓ (BOARDMAN) ................. COOK ......................... AJ (BROADWATER) ............. DALTON....................... _Y ✓ SHAWVER DONAHUE.... ...... �� c✓ ................... ........... (WILSON)........................ DUVALL...................... (UNDERHILL)................... ECKENRODE................. (SCHAFER).................... FERRYMAN.................. ,✓ POE JEMPSA...................... ✓ (DAVERT)........................ ............... (SHEA) ............................. KROM........................ ✓ (DOW) ............................. MARSHALL.................. (HERNANDEZ)................. MC ............... 4 (FRESCHI) ....................... MC GOWAN ................. _�✓ (BEAUMAN) ..................... MOORE........................ (EPPERSON) ................... NEUGEBAUER.............. y (KEENAN) ........................ PIERCY........................ (WEBB) ............................ RIDGEWAY................... (SMITH, CHUCK) ............. SILVA........................... _y (HERMAN)........................ WALKER.... c ai STAFF: Anderson a- Beekman Ghirelli Kyle Ludwin Mathews Miles Ooten Tomko Streed OTHERS: Woodruff Nixon 07/23/03 G:\wp.dta\admin\BS\DIRECTOR\Directors Roll Call.doc ROLL CALL BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT MEETING DATE: August 27, 2003 TIME: 7:00 p.m. (SIMONIAN) .................... ANDERSON................... (WILSON) ........................ BANKHEAD................... (SWAN) ............................ BRADY ....................... ✓ (YOST) ............................ CAMPBELL ................... ✓ �/ (AMBRIZ).......................... CAVECCHE...................� S (GARCIA) ......................... CHRISTY..................... _� ✓ (CRANDALL).................... COLLINS ..................... ✓ (BOARDMAN) ................. COOK ......................... ,✓ �� (BROADWATER) ............ DALTON....................... ✓ -y�7d' (SHAWVER) .................... DONAHUE..................... (WILSON)........................ DUVALL...................... (UNDERHILL)................... ECKENRODE................. (SCHAFER)...................... FERRYMAN................... �✓ �� (POE)................................ JEMPSA...................... ✓ ;, f? (DAVERT)...................... ✓ (SHEA) ............................. KROM........................ (DOW) ............................. MARSHALL.................. ✓ ✓ (HERNANDEZ)................. MC CRACKEN............... ✓� (FRESCHI) ....................... MC GOWAN ... (BEAUMAN) ..................... MOORE....................... (EPPERSON)................... NEUGEBAUER.............. (KEENAN) ........................ PIERCY........................ �✓ (WEBB) ............................ RIDGEWAY................... � (SMITH, CHUCK) ............. SILVA........................... -� (HERMAN)........................ WALKER....................... STAFF: Anderson Beekman CIt, Ghirelli Kyle Ludwin Mathews Miles Ooten Tomko Streed OTHERS: Woodruff Nixon 07/23/03 G:1wp.dtaladmin\BS1DIRECTORIDirectors Roll Call.doc _ 4 NO. 2 OF 3 CHAIR'S REPORT BOARD MEETING OF AUGUST 27, 2003 1 . 1 WANT TO REMIND YOU THAT IF YOU LEAVE THE BOARD ROOM DURING THE MEETING FOR PURPOSES OF `ABSTAINING' DURING A VOTE, YOU NEED TO NOTIFY THE BOARD SECRETARY OR OTHER MINUTE TAKER THAT THIS ACTION SHOULD BE REFLECTED IN THE MINUTES. JUST LEAVING THE ROOM WILL NOT BE NOTED IN THE MINUTES. 2. THE WORKING COMMITTEES MEETING SCHEDULE FOR SEPTEMBER IS: OMTS COMMITTEE: WEDNESDAY, SEPTEMBER 3RD PDC COMMITTEE: THURSDAY, SEPTEMBER 4TH FAHR COMMITTEE: WEDNESDAY, SEPTEMBER 10TH THERE WILL BE A SPECIAL PDC COMMITTEE MEETING ON THURSDAY, SEPTEMBER 18T" TO DISCUSS ISSUES RELATED TO AWARDING A CONSTRUCTION CONTRACT. T 3. THERE WILL BE A SPECIAL GWRS WORKSHOP TO UPDATE THE OCWD AND OCSD DIRECTORS ON THE PROJECT AND UPCOMING ACTIVITIES. IT HAS BEEN SCHEDULED FOR WEDNESDAY, OCTOBER 15T", HERE AT THE SANITATION DISTRICT BEGINNING AT 5 P.M. I URGE YOU ALL TO ATTEND. 4. 1 WANT TO CALL YOUR ATTENTION TO TWO DOCUMENTS IN YOUR MEETING FOLDER. AN INCORRECT POLICY WAS ATTACHED TO AGENDA ITEM 135. THE CORRECT POLICY IS IN YOUR FOLDER. THE SECOND DOCUMENT IS A COPY OF AN AUGUST 26 CONFIDENTIAL MEMORANDUM AND TERM SHEET FROM THE GENERAL MANAGER ON THE SARI RELOCATION AGREEMENT WITH SAWPA. THIS WAS E-MAILED TO ALL OF YOU YESTERDAY AS WELL AS MAILED FOR NEXT DAY DELIVERY. I HOPE THAT YOU HAVE HAD A CHANCE TO REVIEW IT. THIS WILL HAVE TO BE ADDED TO OUR CLOSED SESSION DISCUSSION AS IT WAS RECEIVED TOO LATE TO BE INCLUDED ON THE AGENDA. DO I HAVE A MOTION AND SECOND? i NO. 3OF3 REPORT OF THE STEERING COMMITTEE WEDNESDAY, AUGUST 27, 20035 AT 5 P.M. 1 . THE MINUTES OF THE JULY 23RD MEETING WERE APPROVED AS DRAFTED. 2. 1 UPDATED THE MEMBERS ON THE RECENT LEGISLATIVE ADVOCACY AD HOC COMMITTEE ACTIVITIES. THERE ARE THREE MAJOR ISSUES: FEDERAL FUNDING SUPPORT FOR SECONDARY TREATMENT; PROPOSITION 53 WHICH WILL BE ON THE OCTOBER BALLOT; AND AB1472, OUR BIOSOLIDS POLICY BILL. DIRECTORS SILVA, FERRYMAN AND RIDGEWAY, ALONG WITH THE GENERAL MANAGER MET WITH CONGRESSMAN COX TO DISCUSS EPA GRANT FUNDING TO COVER SOME OF THE COST OF SECONDARY TREATMENT. 3. THE STEERING COMMITTEE ALSO DISCUSSED ADDING SOME CLARIFYING LANGUAGE TO OUR ORDINANCE REGARDING BOARD OF DIRECTORS COMPENSATION AND REIMBURSEMENT FOR MEETING ATTENDANCE AND EXPENSES. THE STEERING COMMITTEE DECIDED TO (or) DIRECTED STAFF TO (or) ESTABLISHED A SUBCOMMITTEE TO (or) PROVIDE ADDITIONAL GUIDANCE AND CLARIFICATION ON MEETING ATTENDANCE AND REIMBURSEMENT. THESE WILL BE PRESENTED TO THE BOARD A FUTURE MEETING WHEN FINALIZED. 4. THE GENERAL MANAGER REQUESTED AN AMENDMENT TO THE MULTI-YEAR LOW-FLOW TOILET WATER CONSERVATION PROGRAM THAT WE CONDUCT WITH THE METROPOLITAN WATER DISTRICT OF ORANGE COUNTY AND OTHERS. THE COMMITTEE AGREED WITH THE PROPOSED CHANGES AND 5. THE DIRECTORS CONSIDERED A LOW INTEREST LOAN POLICY FOR CONNECTIN FEES FOR PROPERTIES WITHIN THE DISTRICT THAT ABANDON SEPTIC TANKS AND CONNECT TO SANITARY SEWERS. THIS WAS REQUESTED BY THE CITY OF BREA AND OTHER CITIES AND THE COUNTY HAVE INDICATED AN INTEREST IN THIS ISSUE IN THE PAST. THE COMMITTEE 6. THE COMMITTEE DISCUSSED TWO ITEMS IN CLOSED SESSION. A REPORT OF THE RECOMMENDATIONS TAKEN WILL BE MADE TO THE DIRECTORS IN CLOSED SESSION. SCAP rkdKrb A46--,E. SOUTHERN CALIFORNIA ALLIANCE OF PUSUCLY OWNEO TREATMENT WORKS August 18, 2003 Mr. Blake Anderson, General Manager Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Re: Nation's First Certified Biosolids Environmental Management System Dear Blake, The Southern California Alliance of Publicly Owned Treatment Works extends its congratulations to the Orange County Sanitation District for achieving the distinction of becoming the first public wastewater agency in the nation to receive national certification of its Biosolids Environmental Management System(EMS). We also extend our appreciation for the leadership role that the District has taken in the development of national biosolids standards; your staff worked diligently along with many other wastewater agencies nationwide to develop the "National Manual of Good Practice" and by this achievement, they have demonstrated that they are willing to live up to the high standards that are contained not only in the manual, but also to foster practices that exceed regulatory requirement. We are honored to be associated with you through SCAP and we look forward to the growing acceptance of biosolids reuse — an acceptance that will be earned because of the diligent efforts of public agencie ch as yours. Very ly yours, R C. Miller Exec ive Director 30200 Rancho Viejo Road,Suite B San Juan Capistrano,CA 92675 Fax:9491489-0150 Tel:949/489.7676 . r , SIGN-IN SHEET ORANGE COUNTY SANITATION DISTRICT Ar) Lo� BOARD MEETING NAME ORGANIZATION/FIRM leaseprint) (please print) sfh }� - 0 �7 t / 1 Lse 6, hey' Gu sek Gul7Jhel- G LA s ek �7�cR L�rnpP�A Cnc"(X, doc H:\WP.DTA\ADMIN\BS\FORMS\SIGN-IN FORM.DOC SIGN-IN SHEET ORANGE COUNTY SANITATION DISTRICT ^� e ' o D.3 BOARD MEETING NAME ORGANIZATION/FIRM (plelake print) lea rint ARC 'f Res,D� i N1a -5 Es J in IL vTTA s r re 11 i ij T� e — - v 14v < < r fig v1� SY 0� d? 7/, Cis � 'i✓S �r� J` H:\WP.DTA\ADMIN\BS\FORMS\SIGN-IN FORM.DOC SIGN-IN SHEET ORANGE COUNTY SANITATION DISTRICT BOARD MEETING NAME ORGANIZATION/FIRM lease print) _ lease print Ufir D o jT 12 OT I bcry T / ?arcv l L � cS t o(G.,v 3c a U u>ii2 M�qvl xe 7o 6 A) H:\WP.DTA\ADMIN\BS\FORMS\SIGN-IN FORM.DOC SIGN-IN SHEET ORANGE COUNTY SANITATION DISTRICT BOARD MEETING NAME ORGANIZATION/FIRM (pleaseprint) leaseprint) (S &-/U L H:\WP.DTA\ADMIN\BS\FORMS\SIGN-IN FORM.DOC /A-) 60A-, REQUEST TO ADDRESS THE BOARD OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general interest should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: 71 dd _� AGENDA ITEM NO. �L�� ��� / NAME: (please print) J �! //> c HOM'=ADDRESS: (number/street) w� X:W , � ry �,� 9, le d- (city/zip code) TELEPHONE: (71"` Y-�/0�'- ale REPRESENTING: d/7 l (self/name of organization) �Y�o .� REQUEST TO ADDR SST E BOARD OF DIoRECTORS Pinterest All persons wishing to address the Board on specific agenda items or matters of gen should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: 2- ( '�� AGENDA ITEM NO. J �� NAME: (please print) Ro S S HOME ADDRESS: (numb /street) o�✓'I�) V'�-/f e (city/zip code) TELEPHONE: 2,, REPRESENTING: ?�e (self/name of organization) /—S S J Lry REQUEST TO ADDRESS THE BOARD OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general interest should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: 09 'T a-�O _� AGENDA ITEM NO. NAME: (please print) 1��v r�C� �a �� t 'nn d HOME ADDRESS: � �J `t o � y�. (number/street) (city/zip code) TELEPHONE: (�. 14 9 (.0 a ,— REPRESENTING: 0 0VA"Ac(-yC'3 'r1 5 (self/name of organization) REQUEST TO ADDRESS THE BOARD OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general interest should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. I -�DATE: vZ 6 AGENDA ITEM NO ��� NAME: (please print) P - HOME ADDRESS: (number/street) rb- Vj' �� �s (city/zip code) TELEPHONE: (7i O 9,6 e —" � REPRESENTING: 140-h+2f CSL J-� Y+v 6w s CI,&�A_. (self/name of organization) REQUEST TO ADDRESS THE BOARD OF DIRECTORS (:OAll persons wishing to address the Board on specific agenda items or matters of genera should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: p D '7AGENDA ITEM NO. * * * * * * * * * * * * * * * * * * * * * * * * * * * * NAME: (please print) HOME ADDRESS: (n be (city/zi code) TELEPHONE: r REPRESENTING: (self/name of organization) REQUEST TO ADDRESS THE f - D OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general me should complete and submit this form to the Board Secretary prior to commencement of e Bo meeting. As determined by the Chair, speakers may be deferred until the specific item is to en for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: AGENDA ITEM NO. �i NAME: (please print) .�� �� � �� cle-i A--& / HOME ADDRESS: l � ' y J CR (number/street) CIL (city/zip code) TELEPHONE: REPRESENTING: (self/name of organization) REQUEST TO ADDRESS THE BOARD OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general interest should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: AGENDA ITEM NO. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * NAME: (please print) HOME ADDRESS: �135Z �j PfrT 1,0 VL (number/street) �o- o omp,I� UArLogiAl 4 a 70 (city/zip code) TELEPHONE: ( 7l f 6.93 " Z(aC, REPRESENTING: Kr—q-- -N%t> f4Il',F--O W tjgl (self/name of organization) r REQUEST TO ADDRESS THE BOARD OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general ' t st should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: 9 -21•D sj AGENDA ITEM NO. NAME: (please print) HOME ADDRESS: q(4,lq V1 jS (number/street) 411-M iA lA (city/zip code) TELEPHONE: (�� ) %Z QQb ff REPRESENTING: RVjF Lj S I1G J� r F 2 (self/name of organization) REQUEST TO ADDRESS THE BOARD OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general interes Z) should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: AGENDA ITEM NO. NAME: (please print) 3 Z �_ HOME ADDRESS: �' l � ' + �- di''`" 2s (number/street) (city/zip code) TELEPHONE: (l<�) e' r [� REPRESENTING: "t, , (self/name of organization) REQUEST TO ADDRESS THE BOARD OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general interest should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: 4 �� J AGENDA ITEM NO. NAME: (please print) N� / /'V 141 HOME ADDRESS: Ct (J 1�6cmIJ I �` (number/street) Lfs 0/ (city/zip code) TELEPHONE: REPRESENTING: S (! L (self/name of organization) REQUEST TO ADDRESS THE BOARD OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general interest should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: k Z� � AGENDA ITEM NO. �— �l�t L NAME: (please print) HOME ADDRESS: (number/street) LIZ ��- (city/zip cod ) /1 TELEPHONE: REPRESENTING: (self/name organization) REQUEST TO ADDRESS THE BOARD OF DIRECTORS All persons wishing to address the Board on specific agenda items or matters of general interest should complete and submit this form to the Board Secretary prior to commencement of the Board meeting. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion. Remarks may be limited to three minutes or less. Any handouts (35 COPIES REQUIRED) must be given to the Board Secretary prior to the meeting for distribution. DATE: v a 7/0 3 AGENDA ITEM NO. 44T NAME: please print) 2� 2 - U HOME ADDRESS: 15 36 c '4, L 1 b (number/street) 6-tq (2- Cc� 60 3 C-iti, 412,11 I d (city/zip code) TELEPHONE: ( ) REPRESENTING: (self/name of organization) r Post-Pricing Summafy ORANGE COUNTY SANITATION DISTRICT $28010001000 CERTIFICATES OF PARTICIPATION SERIES 2003 SALE DATE: AUGUST 12, 2003 DELIVERY/DATED DATE: AUGUST 26, 2003 Public Resources Advisory Group Independent Financial Advisors r PUBLIC RESOURCE.AI)VISOItY GROUP ur TABLE OF CONTENTS I. SUMMARY OF BIDS RECEIVED MORGAN STANLEY(WNNING BIDDER) CITIGROUP GLOBAL MARKETS(COVER BID) _ UBS FINANCIAL SERVICES GOLDMAN SACHS MERRILL LYNCH _ J.P. MORGAN SECURITIES LEHMAN BROTHERS H. MUNICIPAL BOND MARKET NEWS Los ANGELES TIMES BOND BUYER REUTERS WALL STREET JOURNAL III. COMPARISON OF SALE RESULTS COMPARISON TO OTHER ISSUERS COMPARISON TO KEY MARKET INDICES IV. TRANSACTION FINAL CASH FLOWS V. SUMMARY OF ALL DISTRICT OUTSTANDING COPS 1992 SERIES REFUNDING COPS 1993 SERIES REFUNDING COPS SERIES 2000-A REFUNDING COPS SERIES 2000-B REFUNDING COPS SERIES 2003 COPS VI. RATING AGENCY REPORTS FOR SERIES 2003 COPS MOODY'S INVESTORS SERVICE r STANDARD&POOR'S FITCH RATINGS r r i �� � - � � � `� 0 ��. H '� w � � 1 PARITY Result Screen Page 1 of 1 10 34 13 a.m. PDST , i.poorri n�Calendar ` ' Overnew -Compare .Sumi .,' Bid Results Orange Co Sant Dt $280,000,000 Certificates of Participation, Series 2003 Mi The following bids were submitted using PARITYO and displayed ranked by lowest TIC. Click on the name of each bidder to see the respective bids. Bid Award* Bidder Name TIC r eoffenrig Morgan Stanley 5.145212 r Citiprou2 Global Markets Inc. 5.151828 F UBS Financial Services Inc. 5.152772 F Goldman.Sachs&Co. 5.159472 F Merrill Lynch &Co. 5.168099 F J.P. Morgan Securities, Inc. 5.183132 r Lehman Brothers 15.1863021 *Awarding the Bonds to a specific bidder will provide you with the Reoffering Prices and Yields. =ad ©1981-2002 i-Deal LLC,All rights reserved,Trademarks u■i gad ed ad a� haps://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&Pa.e=parityR... 8/21/2003 PARITY Bid Form Pagel of 2 Upcoming Calendar Overview -[Result' Excel tow Morgan Stanley - New York, NY's Bid ;;MA RQ' �- bat Orange Co Sant Dt $280,000,000 Certificates of Participation, Series 2003 bad For the aggregate principal amount of$280,000,000.00, we will pay you $277,431,246.90, plus accrued interest from the date of issue to the date of delivery.The Bonds are to bear interest at the following rate(s): ,=, Maturity Date Amount$ Coupon % 02/01/2021 4,495M 5.2500 02/01/2022 15,100M 5.0000 `_' 02/01/2023 15,805M 5.0000 02/01/2024 16,640M 5.0000 tw 02/01/2025 17,425M 5.0000 02/01/2026 18,350M 5.0000 02/01/2027 19,265M 5.2500 tw 02/01/2028 20,235M 5.2500 02/01/2029 02/01/2030 44,505M 5.2500 02/01/2031 02/01/2032 02/01/2033 108,180M 5.0000 Total Interest Cost: $355,210,100.69 Discount: $2,568,753.10 Net Interest Cost: $357,778,853.79 TIC: 5.145212 Time Last Bid Received On:08/12/2003 8:59:09 PDST tw This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Morgan Stanley, New York, NY Contact: Glen Balanoff Title: Telephone:212-762-8183 Fax: 212-762-8226 told Issuer Name: Orange County Sanitation District Company Name: ,Xd Accepted By: Accepted By: https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page=parityBi... 8/21/2003 PARITY Reoffering Page 1 of 1 Uzi 'Result ww Morgan Stanley's Reoffering Scale Orange Co Sant Dt $280,000,000 Certificates of Participation, Series 2003 Maturity Date Amount$ Coupon %Yield % Dollar Price Call Date 02/01/2021 4,495M 5.2500 4.7500 103.918 08/01/2013 02/01/2022 15,100M 5.0000 4.9200 100.618 08/01/2013 02/01/2023 15,805M 5.0000 4.9800 100.151 08/01/2013 02/01/2024 16,640M 5.0000 5.0400 99.489 02/01/2025 17,425M 5.0000 5.0700 99.087 02/01/2026 18,350M 5.0000 5.1000 98.669 02/01/2027 19,265M 5.2500 5.0300 101.699 08/01/2013 02/01/2028 20,235M 5.2500 5.0400 101.621 08/01/2013 02/01/2029 02/01/2030 44,505M 5.2500 5.0500 101.542 08/01/2013 02/01/2031 02/01/2032 02/01/2033 108,180M 5.0000 5.10001 98.480 two Accrued Interest: $0.00 Gross Production: $279,502,191.30 ©1981-2002 i-Deal LLC,All rights reserved,Trademarks d httPs://www.newissuehome.i-deal.com/ParitY/asp/main.asp?frame=content&,)age=paritvR... 8/21/2003 PARITY Bid Form Page 1 of 2 Upcoming Calendar Overview ;Result I Excel Citigroup Global Markets Inc. - New York, NY's Bid Orange Co Sant Dt $280,000,000 Certificates of Participation, Series 2003 izzi For the aggregate principal amount of$280,000,000.00, we will pay you $277,304,356.80, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s): Maturity Date Amount$ Coupon % 02/01/2021 4,495M 5.5000 02/01/2022 15,100M 5.0000 02/01/2023 15,805M 5.0000 02/01/2024 16,640M 5.0000 02/01/2025 17,425M 5.0000 02/01/2026 18,350M 5.0000 02/01/2027 19,265M 5.2500 � 02/01/2028 02/01/2029 t, 02/01/2030 64,740M 5.2500 02/01/2031 02/01/2032 02/01/2033 108,180M 5.0000 Total Interest Cost: $355,405,976.56 tami Discount: $2,695,643.20 Net Interest Cost: $358,101,619.76 TIC: 5.151828 �, Time Last Bid Received On:08/12/2003 8:58:05 PDST This proposal is made subject to all of the terms and conditions of the Official Bid Form,the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Citigroup Global Markets Inc., New York, NY Contact: Charles Reed Title: VP Telephone:212-723-7093 Fax: 212-723-8951 Issuer Name: Orange County Sanitation District Company Name: Accepted By: Accepted By: httDs://www.newissuehome.i-deal.cOm/Parity/asp/main.asv?frame=content&page=paritVBi... 8/21/2003 PARITY Bid Form Page 1 of 2 Upcoming Caie Overview Result i::Excel`-I «W UBS Financial Services Inc. - New York, NY's Bid :0ARIVY,' Orange Co Sant Dt $280,000,000 Certificates of Participation, Series 2003 For the aggregate principal amount of$280,000,000.00, we will pay you $277,397,812.05, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s): Maturity Date Amount$ Coupon % 02/01/2021 4,495M 4.7500 02/01/2022 15,100M 5.0000 `w 02/01/2023 15,805M 5.0000 02/01/2024 16,640M 5.0000 bw 02/01/2025 17,425M 5.0000 02/01/2026 18,350M 5.0000 02/01/2027 19,265M 5.2500 02/01/2028 20,235M 5.2500 02/01/2029 21,255M 5.0000 02/01/2030 02/01/2031 02/01/2032 75,750M 5.0000 m 02/01/2033 55,680M 5.2500 Total Interest Cost: $356,027,490.10 t, Discount: $2,602,187.95 Net Interest Cost: $358,629,678.05 TIC: 5.152772 bw Time Last Bid Received On:08/12/2003 8:59:48 PDST WW This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. WW Bidder: UBS Financial Services Inc., New York, NY Contact: Steve Piller Title: VP MW Telephone:212-713-2880 Fax: 212-262-0684 tab Issuer Name: Orange County Sanitation District Company Name: Accepted By: Accepted By: tod httDs://www.newissuehome.i-deal.conVParity/asp/main.aSV 9frame=content&page=parityBi... 8/21/2003 PARITY Bid Form Page 1 of 2 Upcoming Calendar Overview 'I Result] Excel Goldman, Sachs & Co. - New York, NY's Bid Orange Co Sant Dt $280,000,000 Certificates of Participation, Series 2003 For the aggregate principal amount of$280,000,000.00, we will pay you $277,207,032.72, plus accrued interest from the date of issue to the date of delivery.The Bonds are to bear interest at the following rate(s): Maturity Date Amount$ Coupon % 02/01/2021 4,495M 5.2500 02/01/2022 15,100M 5.0000 02/01/2023 15,805M 5.0000 02/01/2024 16,640M 5.0000 02/01/2025 17,425M 5.0000 02/01/2026 18,350M 5.0000 02/01/2027 19,265M 5.3750 02/01/2028 20,235M 5.2500 02/01/2029 02/01/2030 44,505M 5.2500 02/01/2031 02/01/2032 LrJ 02/01/2033 1108,180M 5.0000 Total Interest Cost: $355,774,337.76 tzw Discount: $2,792,967.28 Net Interest Cost: $358,567,305.04 TIC: 5.159472 ,�, Time Last Bid Received On:08/12/2003 8:59:52 PDST low This proposal is made subject to all of the terms and conditions of the Official Bid Form,the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. tw Bidder: Goldman, Sachs& Co., New York, NY Contact: Rhonda Sentochnik Title: VP Telephone:212-902-6582 tEb Fax: 212-902-3065 LIZI Issuer Name: Orange County Sanitation District Company Name: Accepted By: Accepted By: UW https://www.newissuchome.i-deal.com/Parity/asp/main.asp?frame=content&PaiZe=parityBi... 8/21/2003 PARITY Bid Form Page 1 of 2 llpcaming Calendar = .:. -Overview ` :Resuft,.� rcel Merrill Lynch & Co. - New York, NY's Bid �.,�„���'�' � tw Orange Co Sant Dt $280,000,000 Certificates of Participation, Series 2003 For the aggregate principal amount of$280,000,000.00,we will pay you $277,650,472.75, plus accrued interest from the date of issue to the date of delivery.The Bonds are to bear interest at the following rate(s): 100 Maturity Date Amount$ Coupon % 02/01/2021 4,495M 5.0000 02/01/2022 15,100M 5.0000 t=' 02/01/2023 15,805M 5.0000 02/01/2024 16,640M 5.0000 e 02/01/2025 17,425M 5.0000 02/01/2026 18,3501M 5.0000 02/01/2027 19,265M 5.2500 02/01/2028 20,235M 5.0000 02/01/2029 21,255M 5.5000 02/01/2030 23,250M 5.0000 02/01/2031 02/01/2032 02/01/2033 108,180M 5.1250 Total Interest Cost: $357,475,537.33 Discount: $2,349,527.25 Net Interest Cost: $359,825,064.58 TIC: 5.168099 Time Last Bid Received On:08/12/2003 8:59:01 PDST law This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Merrill Lynch & Co., New York, NY tw Contact: David Andersen Title: managing director Telephone:212-449-5081 Fax: 212-449-3733 bus Issuer Name: Orange County Sanitation District Company Name: Accepted By: Accepted By: https://www.newissuehome.i-deal.com/ParitY/asp/main.asv?frame=content&page=paritVBi... 8/21/2003 PARITY Bid Form Pagel of 2 Upcoming Calendar Overview , Result I Excel , J.P. Morgan Securities, Inc. - New York, NY's Bid Orange Co Sant Dt $280,000,000 Certificates of Participation, Series 2003 For the aggregate principal amount of$280,000,000.00, we will pay you $278,150,810.31, plus accrued interest from the date of issue to the date of delivery.The Bonds are to bear interest at the following rate(s): wd Maturity Date Amount$ Coupon % 02/01/2021 4,495M 5.0000 02/01/2022 15,100M 5.0000 02101/2023 15,805M 5.0000 02/01/2024 16,640M 5.0000 02/01/2025 17,425M 5.0000 02/01/2026 18,350M 5.0000 02/01/2027 02/01/2028 02/01/2029 60,755M 5.5000 02/01/2030 02/01/2031 02/01/2032 75,750M 5.0000 02/01/2033 55,680M 5.1250 Total Interest Cost: $359,241,986.46 Discount: $1,849,189.69 Net Interest Cost: $361,091,176.15 TIC: 5.183132 Time Last Bid Received On:08/12/2003 8:59:56 PDST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: J.P. Morgan Securities, Inc., New York, NY Contact: William Laverty Title: VICE PRESIDENT Telephone:212-834-7155 Fax: 212-834-6743 Issuer Name: Orange County Sanitation District Company Name: Accepted By: Accepted By: https://www.newissuehome.i-deal.com/Parity/asp/main.asp?frame=content&page--uaritvBi... 8/21/2003 PARITY Bid Form Pagel of 2 Ove Upcoming Calendar n►lew I Result Excel Lehman Brothers - New York, NY's Bid Orange Co Sant Dt $280,000,000 Certificates of Participation, Series 2003 For the aggregate principal amount of$280,000,000.00,we will pay you $277,619,914.05, plus accrued interest from the date of issue to the date of delivery. The Bonds are to bear interest at the following rate(s): Maturity Date Amount$ Coupon% 02/01/2021 4,495M 5.0000 02/01/2022 15,100M 5.0000 " 02/01/2023 15,805M 5.0000 02/01/2024 16,640M 5.2500 02/01/2025 17,425M 5.2500 02/01/2026 18,350M 5.2500 02/01/2027 19,265M 5.0000 02/01/2028 02/01/2029 Wd 02/01/2030 02/01/2031 02/01/2032 117,240M 5.0000 t.W 02/01/2033 55,680M 5.3750 Total Interest Cost: $368,719,859.20 ,o.d Discount: $2,380,085.95 Net Interest Cost: $361,099,945.15 TIC: 5.186302 Time Last Bid Received On:08/12/2003 8:59:21 PDST This proposal is made subject to all of the terms and conditions of the Official Bid Form, the Official Notice of Sale, and the Preliminary Official Statement, all of which are made a part hereof. Bidder: Lehman Brothers, New York, NY Contact: Frank Vitiello Title: Senior V.P. Telephone:212-528-1061 Fax: 646-758-2068 Issuer Name: Orange County Sanitation District Company Name: w Accepted By: Accepted By: htti)s://www.newissuehome.i-deal.coM/Parity/asn/Main.asn?frame=content&I)ajze=r)aritvBi... 8/21/2003 SECTION II Los Angeles Times: For Bond Buyers, Is Insurance Worth It? Page 1 of 3 £As�ugelcs la�iir 19 .�com. http://www.Iatimes.com/business/la-fi-muni20aug20,l,7665286.story?coll=la-he advertisement For Bond Buyers, Is Insurance Worth It? Considering the slim risk of default, some would l`1 rather buy uninsured state bonds. By Thomas S. Mulligan Times Staff Writer August 20, 2003 LOCAL The huge wave of municipal bond issuance in California and the recent slide in the + state's credit rating have created either a problem or an opportunity, depending on Toll one's perspective. For the state, the problem is finding enough private bond insurance coverage to satisfy nervous investors. For bond insurance companies, especially newcomers to the California market, it's an all-you-can-eat buffet with more than enough business for those with the capital and the willingness to shoulder the risks. For investors, meanwhile, there's the question of whether the amount of yield sacrificed on privately insured tax-free bonds, compared with uninsured issues, is worth the peace of mind that insurance provides. The yield "spread" between insured and uninsured California general obligation �1 bonds widened to as much as 0.65 percentage point on long-term issues earlier this summer as the Legislature appeared deadlocked over a budget deal. +� The spread has eased to below half a percentage point since the budget was approved in late July. But that is still high by historical standards. An uninsured long-term state muni bond might yield about 5.5% a year tax free, for example, while an insured issue might yield closer to 5%. Default rates on municipal bonds in recent decades have been minuscule, and mostly limited to bonds from very small issuers. Yet insured bonds have grown steadily in popularity. Nationwide,just less than 50% of all muni bonds issued last year were insured. That share was under 20% in the mid-1980s, according to the California Municipal Bond Advisor, a newsletter in Palm Springs. httn://www.latimes.com/business/la-fi-muni20aue20.1.7854040.Drint.storv?coll=la-he 8/22/2003 Los Angeles Times: For Bond Buyers, Is Insurance Worth It? Page 2 of 3 kmi The muni-bond insurance business, like the accounting industry, is dominated by a Big Four, all AAA rated by the major credit-rating firms and all New York-based: MBIA Insurance Corp., Ambac Assurance Corp., Financial Guaranty Insurance Co. and Financial Security Assurance Inc. In return for fees paid by bond issuers, the insurers essentially lend their own credit ratings to the bonds they insure, setting aside a certain amount of capital to back up their guarantee that interest payments will be made on time if the issuer should default. The lower the issuer's rating, the greater the amount of capital required to back the bonds. The insurers also must maintain geographic diversity in their insurance coverage,to guard against a catastrophe in one part of the nation triggering a rash of of defaults. Given those constraints, and the increasing popularity of insured bonds, the Big Four have little capacity to insure new California general obligation bonds. end "We're pretty much tapped out on California general obligations," said Sheila Flanagan,managing director of FSA's West Coast office in San Francisco. tow That's good news for firms such as AAA-rated XL Capital Assurance Inc.,which came into the California market in 2001 and already has written more than$1 billion of insurance. And the slippage in California's credit quality has created new opportunity for second-tier insurers such m as AA-rated Radian Asset Assurance Inc.,which couldn't have done business with California when the state's general obligation debt ratings were higher. kmvi "Now we're able for the first time to offer value," said John DeLuca,Radian's vice president for market development. During the budget crisis this summer, Standard& Poor's dropped the state's rating to BBB, a couple of notches above junk-bond status. Moody's Investors Service, the other top ratings firm, held off until the budget deal was done, then cut its rating on California by one notch, to A3 from A2. Radian's AA rating could save the state about a quarter percentage point in interest if it were to insure new bonds,based on current market prices for California debt, DeLuca said. With demand for insured bonds at high levels, the industry's capacity constraints are frustrating to state officials. Juan Fernandez, director of public finance in the office of State Treasurer Phil Angelides, said the state was able to obtain insurance for only$128 million worth of the $1.7 billion in general obligation debt it issued in June. Similarly, only$202 million worth of the$2 billion in general obligation bonds issued in April were insured. "If the capacity were available at a reasonable price, I would have insured the entire amount," Fernandez said. Given the state's plans to continue issuing bonds in record amounts—an additional $2.5 billion in general obligation bonds is scheduled for this fall—"I don't have the expectation that [more capacity] will be available any time soon," Fernandez said. httn://www.latimes.com/business/la-fi-muni20au22O,l,7854040,print.storv?coll=la-he 8/22/2003 Los Angeles Times: For Bond Buyers, Is Insurance Worth It? Page 3 of 3 For investors,the issue is whether insured state bonds are worth it, considering the yield that is bid sacrificed relative to uninsured issues. Private insurance does provide an iron-clad guarantee of principal and interest payment. And insured tod bonds can be easier to sell in the marketplace. But considering the slim risk that California would default, some analysts say they'd rather buy ,mi uninsured bonds, earn higher yields and take their chances. "If anything,now would be a good time to sell some insured California munis to buy the uninsured „j bonds," Zane B. Mann,publisher of the California Municipal Bond Advisor, wrote in his most recent edition. "No matter how bad things get, California is not going to default," said Marilyn Cohen of Envision Capital Management in Los Angeles. Experts say it's possible insurance firms could decline to insure new state bonds, if California's credit ratings are cut again. "The insurers are going to be very sensitive to obligations that get chopped to non-investment grade," m said Tom Abruzzo, managing director at ratings firm Fitch Inc. in New York. The amount of California bond issuance and the sliding ratings aren't the only factors affecting insurance capacity. Some of the big insurers feel they have more profitable places to put their money, according to Alex Orloff,bond-insurance analyst at Banc of America Securities in New York. In Europe, for example, only about 2% of municipal bonds are insured, Orloff said. There is far more growth potential there than in the United States,where it will be difficult to improve on the industry's 50%penetration, he added. If ou want other stories on this topic,search the Archives at latimes.comlarchives. Click here for article licensing and reprint options Cori Copyright 2003 Los Angeles Times kow ea hav://www.latimes.com/business%la-fi-muni2Oaug2O,l,7854040,print.story9coll=la-he 8/22/2003 WSJ.com- The Bond Market Slams on the Brakes Page 1 of 5 zw kw GMEWAUSTMUOMA, owd August 4,2003 12:23 a.m.EDT '=d The Bond Market DAMAGE ASSESSMENT •Wall Street May Lose Secret Slams on the Brakes Weapon for ProfitS2 UEd •Many Small Investors Sidestep A Run Spanning Two Decades Reverses Damage3 Direction, and Losses Could Be Painful •See a chart3 showing the bond tow market's turbulent ride. By AARON LUCCHETTI Staff Reporter of THE WALL STREET JOURNAL 'a' Twenty-one years, eight months,two weeks, two days. Thus marks what many are saying could be the end of a remarkable two-decade run in the U.S. bond market,which began to turn down earlier this summer and has since tumbled swiftly. The price decline,which already ranks among the most rapid bond selloffs ever,could have implications that are just as sweeping. In the bond market, prices and yields move in opposite directions like a seesaw -- so once-low yields are flying up now. Homeowners have seen mortgage rates jump from their rock-bottom levels,potentially crimping spending. And Wall Street firms,which have increasingly relied on bond trading to generate profits,could feel the pain of sharp losses now that the market has reversed sharply. While the downturn isn't yet threatening the savings of individual investors, it has certainly rattled those investors. Many of them flocked to bonds after the bursting of the stock-market bubble in 2000 to avoid this kind of trauma. SKID MARKS Since June 13,the date the bond market was at the height of its rally(and thus, yields at their low), Treasury yields tow Starting lust after New Year's in 2001,the have risen faster than at any point since 1987, according Federal Reserve cut interest rates repeatedly, to Bianco Research, a Chicago research firm. The yield sending Treasury yields to historic lows and pushing down borrowing costs in every other on the benchmark 10-year Treasury note, for example, two debt market.This helped a housing boom.On has jumped to 4.42% from a 45-year low of 3.11%,while Wall Street,bond-underwriting fees surpassed the 30-year Treasury bond yield has surged to 5.33% sinking stock-underwriting fees for the first time since 1088.But when the Fed cut rates from 4.17%. for a 13th time on June 25,It was by less than the markets were hoping for Now,the rally In That translates to a loss of nearly bond prices,and drop in yields,has come to a y 10°/o for investors in screec t ing halt. the 10-year Treasury, and a 15% fall for holders of the CORPORATE FINANCING... 30-year bond. Global corporate bonds i - 14% To get a sense of the scale of the decline, consider that 12 10 the drop is greater than any three-month loss for bonds - -- --------- ---------.---.---- -.. dating to 1927, the first year for which Bianco has data. tnveatme"t-grade bomd*%ds 6% Put another way: The Dow Jones Industrial Average snez znes 4 would have to drop nearly 1,400 points from its current - httD://online.wsi.com/article urint/O..SB10599561264682800.00.htm1 8/21/2003 WSJ.com - The Bond Market Slams on the Brakes Page 2 of 5 level -- by Halloween -- to match it. Bond investors are looking for "the license plate on the truck that hit" them, says James Bianco, head of the research firm. w The increase in yields in the U.S. could have ripple effects abroad as well, especially if international investors decide that higher-yielding Treasurys are a better bet than foreign debt. — That scenario would put upward pressure on foreign interest rates and bond yields, which could slow down already-sluggish economic growth there. The severity of the summer bond skid reflects the length and intensity of the rally that preceded it. The bond bull began in October 1981, when interest rates were in the teens and the Federal Reserve, led by Chairman Paul Volcker, had begun a quest to tame inflation, which was then clipping along at 10%, as measured by the consumer price index. Through the late 1980s and 1990s, long-term interest rates went lower, though not in a straight line, as the Fed became convinced it had a handle on inflation. The end of the Cold War helped spur globalization and free trade, and technological innovation boosted productivity and kept prices down. That allowed the Fed to keep interest rates low without triggering new bouts of _. inflation. While this all worked to keep the bond market humming, there still were periodic hiccups. And, bond-market optimists say it is possible the current period will prove to be another brief bump that eventually reverses itself. In 1987, for example, the yield on the 10-year jumped to 10% from 7%between March and October as a strengthening economy and rising commodity prices provoked fears of inflation and Fed interest-rate increases. Then, in 1994, the Federal Reserve again raised short-term rates in an effort to keep inflation in check, and 10-year bond yields jumped from about 6% to 8%. Five years later, as the economy heated up, the Fed raised short-term rates and bond yields jumped from 4.5%to 6.5%. But in each case, yields turned back down as the Fed cut interest rates in response to new challenges. In 1998, the Russian financial crisis and the near collapse of Long-Term Capital Mangement prompted liquidity concerns that pushed bond yields and rates lower until the economy heated up again. Through all the fits and starts, investors in U.S. Treasurys have benefited greatly, earning money in 18 out of 22 years ending in 2002. For the 22 years that ended at the end of 2002, the Lehman Aggregate Bond Index returned 10.39% a year, including interest,while the Standard & Poor's 500-stock index grew at 12.2% a year, including dividends. During the past five years, investors flocked to bonds to such an extent that77 assets at the nation's biggest bond-fund manager, Pacific Investment Management Co., or Pimco, more than doubled to $349 billion from $158RIN AN billion in 1998. The company's bi biggest fund - 1 gg fund, Total Return, has �.,, :•;- :;;.��:• :��.� grown into the largest actively managed fund in the country, with $76 ' billion in assets. , httn://online.wsi.com/article print/0„SB10599561264682800,OO.html 8/21/2003 WSJ.com -The Bond Market Slams on the Brakes Page 3 of 5 two "' But now even the manager of Pimco Total Return, Bill Gross, has doubts. In interviews with the media and in talks with clients, he talks of diversifying from Treasurys to alternatives such as municipal bonds, inflation-linked bonds, and foreign bonds. "The bull market ki° is over" for Treasury bonds, Mr. Gross says. He points out that the Federal Reserve has ended its long fight against inflation and has now 'W "declared war on deflation."A Fed that is more tolerant of inflation "has always been a negative for bonds,"because the stance will ultimately lead to higher inflation that the Fed will need to quell by raising rates,Mr. Gross says. Still,Mr. Gross says he doesn't expect yields to climb much further. He cites "substantial deflationary forces" such as the exporting power of China and India that will continue to keep growth and inflation at bay. "The bull market is over simply because yields got low," says Mr. Gross, "but a new bear market may have to wait" 12 to 24 months to gain momentum. That doesn't mean there may not still be a lot of pain in the current reversal. Already, many market pros are drawing comparisons with 1994, the previous difficult time in the bond market. In that year,Treasurys lost about 8%,but a range of big investors, including the government of Orange County, Calif., and Procter&Gamble Co., ran into even bigger problems when higher interest rates -- and falling bond prices -- hurt their leveraged rate bets. This time, many traders and analysts suspect the worst losses likely will pop up where investors have used leverage or complex derivatives to bet that rates would go even lower this summer. Already, the bond market "has become more volatile," thanks to the increasing influence of the mortgage market as well as hedge funds that use leverage and derivatives to bet on movements of interest rates, says Amy Falls, global head of fixed-income strategy at Morgan Stanley. Two months ago,many investors were focusing on the possibility Treasurys might build on their rally. The Fed was talking about the idea of buying longer-term Treasurys to prevent deflation, a debilitating economic condition of falling prices. Bonds rallied and the 10-year yield plummeted to new lows,because the idea would essentially put a floor on bond prices and a ceiling on yields. But since, the Fed has played down the likelihood that it would buy long-term Treasurys to target yields, and some economic figures -- including gross domestic product,manufacturing and employment data last week-- showed improvement. The Fed also cut interest rates in June by a less-than-expected 0.25 percentage point, disappointing some bond investors. What succeeds the long bull market in bonds?Investors have endured bear markets before. Long- term bond yields rose during the Civil War and climbed steadily from 1900 to 1920. The seeds of the worst bear market, during the 1970s, were laid in the previous decade through spending for social programs and the war in Vietnam, says Jack Malvey,chief fixed-income strategist at �" Lehman Brothers. Mr. Malvey isn't predicting this decade will end up like the 1970s. He says a more likely two precedent would be the 1950s,when yields rose gradually from historic lows to long-term averages. "What we're having here is a rebound from extraordinarily low rates," he says. Write to Aaron Lucchetti at aaron.lucchetti@wsj.coml taw htt)://online.wsi.com/article print/O..SB10599561264682800.00.html 8/21/2003 WSJ.com - The Bond Market Slams on the Brakes Page 4 of 5 PARTY'S OVER Stocks are surging:the DJ 6.7819-1 Yield on the 10-year Treasury note industrials Dose Man all-time high four sessions earlier.But Fed raises rates six times in 1909.2000. 6% Shortly after the turmoil at Long-Term Capital Mngt.: 4.98% 5% Stockmarket few after 4.427% gill terrorist attacks 52-week high 4.152% 4.194% The Fed cuts rates twice fast, 4 after the Russian debt default; a third cut will follow on Nov. 17: 3.3 56 Fed cuts short-term rate by%point, disappointing some who expected%-pant cut Return to article.3 URL for this article: http://online.wsj.com/artide/O,,SB1 0599561264682800,00.html Hyperlinks in this Article: (1)mailto:aaron.lucchetti@wsj.com (2)http://online.wsj.com/artide/O,.SB105995601986520400,00.html (3)http://online.wsj.00m/artide/0„SB105995665194540800,00.htmi Updated August 4, 2003 12:23 a.m. httn-//nnline w.qi cnm/article nrint/O..SB10599561264682800.00.html 8/21/2003 2 Wednesday,August 6,2003 Tar:BoNv BUYER Tuesday's Market .F NEW RJEF Munis Rise as Treasuries Lose Traction; Calif. MDB Prices $1.1 Billion Offering By Nicholas Chesla and turities rebounded by 90 basis points. ISM Non-Mfg. Index The budget-which has been passed Anastasija Johnson "Given the possibility that interest ratesin general could stabilize once the MBS t Up t0 65.1% i.,duly by the legislature and s expected Municipal bonds yields rose by as much 'supercharging'abates and that the fixed signed by Gov.John G.Rowland thisis as five basis points yesterday reflecting a income markets may have reached an F7 'he Institute for Supply Manage- week-includes the transferof$2.5 mil- loss of traction in Treasuries while$I.1 oversold position,we continue to believe 1 ment's non-manufacturing business lion per year from the quasi-state agency's billion of California Infrastructure and that there are attractive values in interine- activity composite index jumped to reserves over the next two years. Economic Development Bank revenue diate municipals,"be said. 65.1%in July from 60.6%in June,on a `Cash flows have been prepared in- bonds came to market. Meantime,demand from casualty com- seasonally adjusted basis,the group said corporating this transfer of funds and not Governments fell,extending earlier panes helped support longer maturity mu- yesterday. giving benefit to the expected assets and losses when the Treasury auctioned$24 nicipals,which continued to outperform Economists polled by IFR BondData they still perform at a level supporting the billion of three-year notes with a 2 3/8% their taxable counterparts and other parts America had expected a 60.0%level. triple-A eating"said Moody's analyst Flo- coupon at a 2.42290 yield,a price of of the municipal yield curve,Friedlander An index reading below 50%signals hence Zeman. 99.865 and a bid-to-cover ratio of 1.32. added. a slowing economy,while a level above Earlier budget proposals from the gov- Treasuries also lost ground mid-mom- "Me increase in absolute level of long- 50%suggests expansion. emor's office had threatened to transfer ing when the July Institute of Supply Man- term yields so that 5%is now common- The prices paid index, closely as much as$40 million of the CHFA's agement non-manufacturing index rose to place in the secondary market also helped watched for signs of inflation,decreased funds to the state's general fund on an an- 65.1 from 60.6 in June. support the long end,"he said. to 50.6%from 51.4%in June. nual basis. Richard Hoey, chief economist at Selling pressure was also fairly mild, The employment index rose to 50.7% The authority plans to be in the mar- Dreyfus Corp.,said the rise in the ISM except from arbitrage accounts seeking to from 50.3%-the new orders index was at ket in the next two months with$100 mr7- non-manufacturing index was another con- lock in profits,while retail demand in- 66.9%,UP from 57.5%;backlog of or- lion to$W million of single-family hous- firmation the U.S.economy was set to ex- creased,Friedlander said. ders gained to 54.5%from 51.5%;new ing bonds. pond at an accelerating pace. By contrast,bond funds continued to export orders stand at 475%.dawn from Both Moody s and Standard&POWs "The index confirms the expectations see substantial outflows last week because 49-5%;inventories increased to 495% -which also rates the debt AAA-had of the economic optimists,"he said."Phis as rates rebounded yields on bonds pur- from 47.0%;inventory sentiment slipped placed the credit under review for a pos- is another piece of evidence to support the chased directly tended to rise more rapid- to 60.0%from 62.0%•supplier deliver- sible downgrade earlier this year.On July position of those who thought we are at ly than the quoted yield on funds. ies index mse to 535%from 51-5%;and, 18 Moody's extended the watch until the inflection point for faster growth" In the new issue market,UBS Finan- imports jumped to 54.0%from 50.5%. Monday. In the municipal arena,yields rose by cial Services Inc.priced for institutions With regard to inventory sentiment, -Johanna Piazza as much as five basis points,giving up $1.1 billion of California Infrastructure members reported slightly less concern some signs of early firmness and follow- and Economic Development Bank rev- that inventories are too high ISM said. ing the downward trajectory of govern- enue bonds with a top yield of 5.20%in Non-manufacturing business activi- Treasury 3-Years ments 2036. ty increased for the fourth consecutive m GO At 2,422% High "'There were a few trades that occurred Also,J.P.Morgan Securities Inc. month in July,"said Ralph G.I{auff- in the morning that would have reflected priced$1 billion Jefferson County,Ala., man,chair of the ISM's non-manufac- ASHINGTON-The Treasury an unchanged market but then it started of auction-rate sewer revenue refunding tuning business survey committee. Wauctioned$24 billion of three-year to slide and never got its feet again,"a warrants. -Gary E.Siegel notes with a 2 3/8%coupon at a 2.422% trader in New York said. In addition,Bear,Stearns&Co.priced yield,a price of 99.865. Traders said underlying market tone re- and repriced$733 million of MTcbigan PREPA Raised The bid-to-cover ratio was 132. mained guarded and cautious with partic- Municipal Bond Authority revenue To A3 by Moody's All competitive tenders at the low ipants needing to be respectful of the cal- notes. yield were accepted in full.Tenders at endar in both municipals and Treasuries. The issue comprised Series 200313-1, Moody's Investors Service yesterday the high yield were allotted 65.84%.The Meanwhile,municipal bond yields con- containing$296 million,and Series assigned its A3 rating to the Puer- median yield was 2350%.The low yield tinued to rebound last week,dragged high- 200313-2,totaling$436 million,both with- to Rico Electric Power Authority's was 1250%. er by erosion in the taxable sector caused a 2004 maturity priced as 2s to yield roughly$529 million of revenue bonds Tenders totaled$31,575,013,000 and by an improving economic outlook and 1.02%and 1.03%,respectively. to price today,while upgrading to A3 the Treasury accepted$24,000,053,000, selling by mortgage-backed securities Both series are rated SP-1 plus by Stan- from Baal the authority's$4.5 billion including$278,013,000 of noncompet- market participants,according to George dard&Poor's. of outstanding debt.In addition,the re- itives. Friedlander,fixed-income strategist at Finally,Banc of America concluded a vised rating outlook on PREPA went to The Fed banks also bought Citigroup Global Markets. two-day retail order period on$350 mil- stable from positive. $3,906,967,000 for their own account in In the frrm's latest Municipal Market lion San Diego Unified School District "They've been on positive outlook for exchange for maturing securities. Comment,Friedlander said municipal general obligation bonds ahead of insti- a couple of years,but we were con- -Emily Neuman yields in the 10-year range had risen 120 tutional pricing today.Underwriters said =tied about the pace of the Puerto Rico basis points off their recent lows,hit June they received roughly$125 million in re- economy,"said Moody's analyst Timo- Treasury 4-Weeks 13,while yields on five-and 20-year ma- tail orders. ❑ thy Blake. But PREPA has shown increasing net Go At 0.91 S% High revenues and stable debt coverage,de- tT rASHINGTON-The Treasury MARKET SNAPSHOT.Tuesday,August 5 spite the U.S.territory's flat economy, ,/�/Department yesterday auctioned therefore warranting the upgrade,Blake $17 billion of four-week brills at a 0.915% r said.Moody's rates the commonwealth's . general obligation bonds Baal. high yield,a price of 99.929. RIO1Ct1TOR LAST REL'ORT FORECAST ACTUAL -Gillian D'Ambmrio 'The coupon equ ivalent was 0.929%. ISM Nw4ft rft Index June:60.6% July Mq% July.65.1% The bid-to-cover ratio was 2.65. rho rr, n ae�rih9 by s�u�p� #t t;ar v by dnau anemia Tenders at the high rate were allotted FdrecaZ represent Moody S Takes Come. HFA 37.78%.The median O.M. .910%. _ •� N QttVe Watt* �low yield wqs 90090 Tenders to- Off 1. . taled$45,059,961,000 and the Treasury M=Is Investors Service announced accepted$17,000,324,000,including Goverronent Securities Pnoes 10ywr.9320rn to yield 4.43%,down vcn day that it has removed the $34,771,000 noncompetitive. 30-year.9Pt32 to yield 5.38%,down 110/32 Aaa-ratod Connecticut Housing Finance The Fed banks also bought Mtmidpai knd WEE 105%.down"in Authority from its negative watch list in $2,831774,000 for their own account in The Band s Total:$5.702 dTiorr.down$1224 billion light of a near-certain state budget that exchange for maturing securities. illion does not deplete the CHFA s coffers. -Emily Neuman (a ffi) SWdy NegotiCompeated: 52063 Mon,d,up$9.3 5 bitho (as a t1i6) NegoUazed:Xi.639 billion,dorm$1.315 bCSon Themurrenter List Otfeft Total:$6.034 billion,up$25.1 million 2 Thursday,August 7,2003 Tilt BOND Binfx RV -- Wednesday's Market NEW RIEF Cash Yields Drop 8-10 Basis Points; Y, Puerto Rico Leads $I.BB in New Issues By Nicholas Clicsla and Bonds due 2021 through 2023,2029, Anastasija Johnson 2032, and 2033 are insured by MBIA Mississippi Race Set: five-yearnotes as 31/4s'with a 3.300% Insurance Corp.The issue carries un- Musgrove vs. Barbour high yield and a price of 9y.T7li' A flurry of new issues totaling more derlying ratings of A3 from Moody's In- 77tc hid-tn cover taliu pa52.-08 All than$1.8 billion came to market yester- vestors Service and A-minus from Stan. �j RALYM)N,f1a.• Mississippi in- cotnixaitive tenders at the low.yield wem day led by a$517 million Puerto Rico dard&Poor's. llcutnlimtCro4.Rom ueMtbgnmeas- accepted in full.lenders at the high yield . Electric Power Authority power rev- Meantime,Banc of America priced ily won renontiiiation inTtiesrlay'sDe-. 'wtne allotted 35,75%.The median yield- enue loan, while cash bond yields fell for institutions 5350 million of San mot Mlic primary,tallying enough votes was 17.78%:1be-low-vicitl Has 3.20 '. between eight and !0 basis points. Diego Unified School District general to avert arunoff. - lenders totaled$. ,710,883,000 and- Government's surged,rising off early obligation bonds, following a two-day With all but e8 of 2,1791xuineti zi- the.Treasutyviceepted 518,(M,172,iXX1 lows and subsequently extending their retail order period during which under- gains following the Treasury Depart- writers received roughly S125 million in TX*Iing.Nusgriivc had nxxavvd 363,817 including$236,878,000 of noncompei mcnt's auction o[$18 billion in five-year orders. votes.with the closest of his four omxr- itive. Y nentscirlle ting 38,701 votes. Federal Reserve batiks also:()ought notes,which were sold as 31/4s,with a Also, Morgan Stanley priced and 1lalty B;ui"r,an attorney and Wasb- $3,353,619,001)for their own aaxxait in 3.300%high yield and a price of 99.771. repriced$200 million of Illinois Edu- ingwrt D.CAxisoi lobbyist a wcdl as far- exch:mgr for niammig sce:uiities. The bid-to-cover ratio was 2.48.Mean- cational Facilities Authority revenue merdriiitman of the National ReptiWiani The notes,which.bave an issue date while,equities ended the session mixed. bonds.At a repricing,yields were low- Committee,handily wort the GOP nod of Aug.15,will maturbAtig.15,2008. In the municipal arena, cash bond ered by five basis points in 2005 and with 138,969 votes vexshif 29,543 votes F:jly Newrwn Yields fell between eight and 10 basis 2006, by four basis points in 2007,by for his lane oppunerd:trial bwycr Mitch points,reflecting gains in Treasuries,ag- three basis points in 2008 through 2010 Tyner Baltxlurrtow faces Musgtm mdw gressive new-issue pricing, and wrong and in 2033.and by two basis points in Nov.4 dal elccnon. Zale Upshy.University demand for bonds from both retail and 2019 through 2025. irxiirii}hcYitLieut.Gov.At Tuci.aR- institutional investors. The final scale comprises serials- nY. Hospiiteii Cut,by Moody s "The market's up like a moon shot," priccd'to yield from 1.55%in 2005 to pthbluan,hadnodwllengas,'J'wk Till fa-.. a trader in New York said. "People are 5.17% in 2025.A 2033 maturity con- Hcnvevurin Novcmbu;'lUck will faux: ixxfy's investurs'Scrvir_csmd it Y DcnxxT'ftt Barbara 131 u kmoU,Wlio Yc Mhas downgraded the underlying really trying hard to find bonds" taining$68 million was priced as 5s to oeiiax Vl,'055 vutcs,ix 5.3%of the votes rating on'Lae Lipshy University llas "We're significantly higher,"a trader yield 5.29%.A 2004 maturity was suh- c u;( Diu .y.' pital m Dallas to Ba3 from Baal. in Chicago said.'?he action in the Trea- ject to a sealed bid. This is a m.-Ijor a ectinn year Six Mis; Tlx raring outlook-is negative.At this sury market is obviously causing some The issue is rated Aa I by Moody's, sta sissippi.Aloof%with the top two te of- tinic,'Muody's said it is removing the of the people who had been good sell- AA by Standard&Poor's and AA-plus •fice,;voters in Ncmtrnlm will'Axt a see-. ' 'rating from watch list where,it was ers to stop selling.We're also seeing in- by Fitch-Ratings. retary of slate,attorney'gencritl,state. placed iin Nfay 14-Appniximately S49 ' tere x st from some of the money managers In the competitive sector,North Car- aiidit, ,•state.umsurM coiii nisssioner of million of Series 1997 lx)nds arc out- who have been sitting on their cash" olina sold a total of$326 million of gen- insurar(z alai commissioner of agrieul- standing;the fronds are insured by In the new-issue market, Goldman, oral obligation refunding bonds in two - armundt'xiranoir as well asa,kugcmmt trip[c-A rated Financial Security As. Sachs&Co.priced and Electric Powe$517r issues. bei.ofstatettpRsculativesaiafsenators. surancc: million of Puerto Rico Electric Power Merrill,Lynch& Co. won both is- ShJh 5ige 7slc Lilishy University Hospili)is Authority power revenue bonds. sues—$,90 million of Series D boots the only obligatcd menibei on the.$c At a repricing,yields were lowered by with a low interest cost of 2.34%and ries 1997 6i hds.I16wevet-:Miwdy's three basis points in 2018 and 2020,by $236 million of Series E bonds with a five basis points in 2021 through 2024 low interest cost of 3.30%. Treasury Strips said its d eui assise o i71 rUf]cin the and in 2029,2032,and 2033,and by 38 Series D bonds were reoffered at combined cnterprist>of 71.U}i wort St: Rose j 1:2t628 In July basis points in 2019. yields ranging from 2.32% in 2007 to Psetswiveipur lasedbl,whose ivcr £tanf The final scale comprised serials 3.04% in 2009. Bonds due in 2004 ��JASHINGTt)N—Newry issued . assets were purchased by.University n priced to yield from 4.80% in 2018 to through 2006 were not formally reof- 1'1 1-rewrys2 billion held l stripped Tec-15wthkv�tetin Nfcdiw!School rm 5.26% in 2024.A 2029 maturity con- fered.A 2008 maturity yielded 10 basis form rose$I,ZCi_billion to lulu to a ter 1kT I5,2t700.. taining$170 million was priced as 5 Ws points less than MMD's Tuesday triple- the of b is Debt cbillion i tic Bureau of The change in N1�od by analytical to yield 5.33%,while bonds due in 2032, A yield curve scale. thePubne new relxx4d ycstixday.' approach was ptAN1111 by recent ae totaling$124 million,were priced as 5s Series E bonds were reoffered at 1n rune ncw.y isstiedTreasu y'secu- lions,which-transferred a.siiablc to Yield 5.039b.A 2033 maturity con- yields ranging from 2.3296 in 2007 to rulesImldin 6.29-jxlllion rose$1.596 anlcioldi[ceoiii out whi htoitspar- taining$46 million was priced as 43'4s 3.82% in 2012. Bonds due in 2005. I>illiah toi the.S95 billion i nt ely tits'ferrM tye funs then Ullulti to yield 5.03%. 2006, 2010.2011,and 2013 were not Timxieh thoSitst nd Pr llclixhnf-Secu i- mate,ly raga i erred tic,funds tthe c m- A 2018 maturity yielded 24 basis formally reoffered.A 2008 maturity ties,P liam,kw)'wn luSTRIil STRIPS, ut T7kdcateiiriscIs a3[efkak.(;a chin points more than Municipal Market yielded nine basis points less than ties ptijgram,known as S'11t1f'S,about bitted etlterlmsc's very Kcak t�.sftpir $20.193-trillion of Treasury securities sitionai lgrntvingdefieits,uith both Data's Tuesday triple-A yield curve MMD's Tuesday triple-A yield curve were reccmsfiruted last month;down 27 Uri arid$�(1H ripditing sizable r>Ir scale,while bonds due in 2023 and 2033 scale. $386 million thrum(he previous month. grating kisses yielded 11 and five basis points less,rc- The issue is rated Aa I by Moody's and &=hies 04 WWba spectively. AAA by Standard&Poor's and Fitch.❑ 52.393 billion,up 0-4.7 billion;$2.216 Rob Nichols Sworn In trillion were hekt inurutripped form. rn srTur InV ?ir Jur9 F5 ru Tretrsur "31 - to hold and trhic tic indivrdtial:interrst r lWARK�T SNAP5110T:tVcrftiescloy,Ailyust o and principal cAnnjx"ients oteligible T'j obNichols was.swom in yesterday Ticasmy no(c�aril lxihids m separate se- asTrcastiry Assistant Secretary for curities Public Affairs,accixding io the Tien- 1FR Bondllaia America predicted a an Department. j Govemawd Senob-z Pnm tll-year.9VWr to)tid 428%.w 15ir SIti billion incxeasein STRIPS. In addition to raving as We chief 30 a Fw..ty Nm nL-= spokesnruh for the Treasury Departrrrnr Y 101 rr to yield 525%.up=Mr and Treasury'Secretary John Snow, Municipal Band bide 106z+r•up r'r TreasuryS-Years Nichols will design communications rare e«td i Total-$6.465 oaxar,w s762.6 mahon Go at 3.300% High strategies to vie se tie public's 1pxml g edge and undcistanding o!T rt asury's 3o Uay veiWe Sr�phj ccmpetitim:$2.on bilhrm,w$142 mieion l�1ASHLNG'rON--The Treasury activities and senices. col NgoWted:S4.387biGion,uPS748.4mi�on �'1' yesterday auctioned$18 billion of _-Gary E.Siegel (' � ThehluniCenter List Oneitrig Total:$5.898 billirxt.down$1362 million 2 Friday,August 8,2003 Nam Tim BOND Bum Thursday's Market NE RIEF Muni Yields Fall 2-3 Basis Points; .: Florida, Charlotte Offerings Price lion quarterly refunding. By Anastasija Johnson In the municipal arena,traders said the Jobless Claims Fall T1u:figure followed May's revised Municipal bond yields fell two or three market remained firm throughout the day 3 0.4%dedine,first deported as 03%. basis points yesterday,while in the new-is- despite volatility in governments as high _ .000#0 390 1000 Meanwhile,sales grew 1 55b to. sue market the Florida State Board of Ed- retail interest,lack of supply,strong new- W.ASHINGTON--Fist-time ap-, S237 5 billion in June,following May's ucation sold$200 million of public educa- issue pricing,and completion of a string of Y revised!0:2 ,decrease,initially Te- lion capital outlay bonds,and underwriters Treasury auctions helped municipals form a I plicalions for state unenlploy- meat benefits fell 000 to 390,000 in pulledas 05%.The Jtnte salei fie is priced$137 million of Charlotte,N.C., temporary floor. the week ended Aug.2 t)39U ing to the largest percenta- increase in the certificates of participation. `Municipals certainly had a better foot- data releasod.by.the Labor Department categ01ysmceApnl 2002,whensales Governments fluctuated throughout the ing,"a trader in New York said."lbere is yesterday. were up 1.6%.' day,posting brief losses when jobless claims no doubt that reintroduction of retail into The last time applications werethis iFR BondData America's poll of and productivity data were released and just the equation is being felt throughout the low Ras the weekended Feb- 3,when a conomisis had forecast that wholesale before and after the 10-year note auction, markeC the reported figure was 37$;000. inventories would'encase by 0.1% but they recovered toward the end of the In the new-issue market,Merrill Lynch lie 3,X),0(10 itpplicanons fig=was and predicted a 01%.drip in sales, session.Meantime,equities were mixed. &Co.won$200 million of Florida public more than the 388,0(p.claiius lirixfict- Inventories of durable g6uds.-also On the economic front,initial jobless education capital outlay bonds with a low m re 1 an the 3K000 claims pteilf of were unchanged in June.The June claims for the week that ended Aug.2 fell interest cost of 4.830%,out of four bids. economists.The 391Ame figure also -003 figure Compared with a revised 3,000 to 390,000,and for the first time since Morgan Stanley had the next-lowest in- tollows the previous week's revised 0-5%_(imp in May,first reported as a February,the four-week moving average terest cost of 4.839%. fellows the p e sous origiweelly its revised ortrxias (1.3%loss.ioventories ol:nil"u able fell below 400,000. Serials were reoffered at yields ranging hwel,o U: gtx)ds ruse 0.1 h,after fallingasevrsed Christopher Rnpkey,senior financial from 1.89%in 2006 to 4.60%in 2019.A The fora-wa k a t } 03%in May,Gr st reporied'as a 0-1 ik economist at Bank or Tokyo-MitsabishF, 2033 maturity containing$57 million was moving ' yl d&lrase said the latest jobless claims data suggest reoffered as Ss to yield 5.08%.Bonds due in rc [ly.sixtl as a betrixglinge tTfnnwn - _ Emily New-r x the labor market has finally exhibited ten- 2004,2005,2009.2014 through 2016,and ;p)oyr- it,was 397,250,a decrease of tative signs of improvement. 2020 through 2029 were not formally re- 12, F from thr previutu week's rc •Ibe fact that jobless clainis have be= offered. v3sedaveisge of 410,000,which ini- Consumer;Credit Off below 400,000 for three weeks is certainly A 2008 maturity yielded five basis points ball}) D2s:tepwrtedos'408,750.11ris was the first time since.22 dial tbe �3S8.4N!in June good news for the labor markG but it's go- more than Municipal Market Data's amntng average was Icss than 400,000, Z 7 ASIi1TIt7IC)N Bvmrwing by - ing to take some time before we really start Wednesday triple-A yield curve scale, �. --Emil)'Neuwd?f V V A liixic-ans fell in June,accord- creating a lot of jobs,"Rnpkey said"Ibe while bonds due in 2013 yielded the same ing to a Federal Rev WPM rcimscd labor market right now is probably at a turn- as the scale.Bonds due in 2018 and 2033 yesterday: ing poiat." yielded one and six basis points mere,te- Non-Farm Output In other economic crows,productivity out- sportively. 0 Consumer credit fell at an annual- side the farm sector jumped by a higher- The issue is rated Aa2 by Moody's In- Gained 5.7/o in ZQ izcd rate of 0.24%,or$358.4 million, than-expected 5.7%in the second quarter, vestors Service,AA-plus by Standard& to 31.76-Iidlion,following a revised - , tX TASHIN(�i ON --Pnxiui,tivily $S l billion rise i i'May,•Wuicb or- i compared to a revised 2.19b increase in the Foor s and AA by Fitch Railings. Railings.-Y outside the farm sector grew In telly Ras rep xtcd as a S7 3 billiat in first quarter,but second quarter labor costs in the negotiated sector of the new-issue the second•quarter.acc,ordipg to pre- fell 2.1%afar a revised 2.0%rise in the market,Waohovia Bank tentatively priced 1. .nary7figurrs io IGLsu1 by tau lrbor acase. first quarter. $137 million of Charlot e,N.C.,certificates IPA BondData America's pull of Department-yesterday Finally,June wholesale inveatorios came of participation. c onwmists prb*%A a S&f)billion in- Prrlimirr:rry sc coitd-gWrtel cstimatcs in unchanged while sages rose 1.5%,and Serials were priced to yield from 4.05% ctrasc ill an "'credit. short-non-farrri productivity increased June ooaArmer credit fell$358.4 million to in 2012 to 5.15%in 2024.A 2026 maturity -.- 3.79�,compared to a nsvisc-d 2:1%rise Emily Ne.twun S 1.76 triplion,following a revised$8.1 till- containing$16 tnrllion was grind as 5•1frs to in the first gtwtcr.' lion rise in May. yield 5.15%,while bonds due in 2028 to- The 53%.produciivity hike is the Treasury 1 O-Years Meantime,the market also focused on taling$18 million were priced as 5s to yield largest percentage change since the p the auction of$18 billion 10- ear Trea- 521%.A 2033 maturity containing$29 mil- third 1 t Go At 4.370/o High y y g third quailcr of?J)02,when pnpduc:tiv- sorry notes,which were sold as 4'/a at a Lion was priced as Ss to yield 523%. ity incrr•:a 5.S1%.Proahrctivity is up �17 ASHINGIDN --'the Tt�:cmy 4.370%high yield and a price of 99.036, The issue is rated Aa2 by Moody's,AA- 3.8%from"the satin;petiod a) V V D-p utnxcnt yistcalay an- ttai with a bid-to-cover ratio of 200.The auc- plus by Standard&Poor's,and AA by Economists intprvirwed by 1 PR $19 billion of 10-year botcs as 4 114s lion was the third and last leg in a SW bit- Fitch � Boodl4iak_�q?��nt c$prtxhcted a 2.79E at a 4 370�� high yield a price of : + i»crras4hft�IltaducUviry. 9).036 ; .,IMRRKE7 SNAPSHOT: Thursday August 7 -Non-fa:tiia�: cros'tsf'c112.f 56 - 3lte biiH4-cover tattw w»w.�.t7(}-Rl! �y., +::•.:.,+•.• c•..:.••'.- . ,•^'^i'}� �.. - in the preliurinary seevnd-quarter CIS- eon4iothY4tonders at thr low'yield 441111,1111 timatc,after rising a revised 2.0%in were accepted in full.Tenders at the the first quarter.Non fam unit labor high yield were allotted 82.62%.The t�f AtDB tAR E1'MT ACTUAL costs lire down 1.0%from the same median.yield was 4.310%3:The)ow Ironl Jobless claims 70:393,000 W308.000 NL:390.000 period in 2()(1_>>. yield wasA.250%. Non-fum Productiity 01:+21% 02+27% U24.7% OBondllata economists predict ex] -Lmily,\ -n anpiumentCod Index 01:+13% 02:+1.8% W.+2.1% a 1.8%rise in ocond-quarter non-farm r, unit 1abpr frosts.F.onoruists watch this wltolesak Irtvnttaies May-0.4% Jarc+0.1% June:lhpduttgal inrlrceta�arl�elyf>e�an nf.ilsimph Treasury�Details F sale May:-02% Aw.-0.1% June.+1s% ea6iis'fc><inflatioin,sinceisl-�rcosts Weekly Bill Auction a c-Gradit May:+i8.18 Am+S6.00 Am:-MAM accwuirt for nxm than 60%of all non- r; rams reprewnt the intern or esat&es by ewmal=polled by tra tlatdaX2 Mreru fartu Fpusiness pky'nreitts. T1 TASON(TlY1N- -The,Ticasw y Emily Newman lkpattment said yesterday it j wrnild raise$2.116 billion of new cash at its weekly auction of 91-day'and Wholesale Supplies 182,daydiscarnt_bit1�cMonday by sell- Gmemmerd securities Prices 10-ytar:951332 to yield 4.22%,up 17/32 Virtually Unchanged ing$3 n 2 billo td $20.884 bil- 30-ywr 102crr,to yield 521%,up try •lion m maturing secdrities. . Muniapal Band Index 107X,up t4, `�JASH1NG1nN-Inventories of To be aokl tat.$16 billion 91s,dated The g gars Total i6371 W6an dorm$1473'bon YV merchant wholesalers were vir- Atrg 14 and due Nov.-13 and$16bil R tually unchanged of S289A billion in lion I92s,.rlitcd Aug.14 atia.do Feb. 3D'DJY Y'able CDalpetrti t2.077 billion,dorm S200.000 June.accofding io Cummerce Depart- 12 (as of 0) ftoUtted$4240 b0iat,dam$147.1 mdl*n anent data released yesterday. -Emily Neuwan TheMun Center test lnlemrp ToU.$5.9s2 billion.dorm 583.8 million 2 Monday,August 11,200.3 Tur Bono Buyflt Friday's Market Muni Yields Drop 2-3 Basis Points, ' IIF Treasuries Dip Ahead of Fed Meeting By Nicholas Chcsla and a lack of bonds and investment cash com- ROWland:COneeWorl Bill ing innovative education tools.'17ie Anastasija Johnson ing off the sidelines as tax-exempts con- state currently spends onlyS4,679 per tinned their move to lower yields. Could-Delay Budget' stuiieat,but officials say llttat with the Municipal bond yields fell two or three "It was a bit of a relief rally this week," slates population of school-age chll basis points Friday,dropping for the fourth a trader in New York said Friday."Because Connecticui Gov.John ltoa•land day in five,even as Treasuries erased early the market sell-off was so vicious on the says a union concession bill in dr>ti expected to grow almost 3096 ga;,,s downside there was certain resistance to o'ver.ibe next 20 years;the state need traduced and'drliated by the state leg Governments ended mixed,paring back buy as the market was beading south.Once to fntd.a way to iileatify pNcritial cost islatuie last week is delaying the sign- savings now,while boosting student an cache[advance while equities were also you start[d gating a bit of a bounce it fed ing of the state's budget and could. mixed. on itself." subsequently lead to lags in mailer. perfo manse. Ahead of the meeting of Federal Reserve Meantime,earlier frothiness in tax ex- Suggeslions included in the RFP pal aid distribution and the approval Board policymakers tomorrow,Mike empcs during the session subsided as Trra- are a hadefrnitiou of mandatutyschool - of local bond issuance. - Moran,chief economist at Daiwa Seca- stares lost ground. on The ccessiun.bill,.which Uc. piogtams self;-pac education,and rides,said a lack of any drastic improve- "We had a pretty good boost in the a utaiiet-iaasededtrt atitTu systean that moerats'say svould mstoieSlUO nail went in the economy since the Federal morning,but it kind of faded as the day would give children ticatesabxn = lion to the state aver the next,two Open Market Committee last met made it wore on;'the New York trader said. htna.thut citildrrn are cduca[cd,: years;passed the'Horrse earlyFi-iday- Utah school facilities are consid- unlikely there would be any change in in- The yield-to-parrall on The Bond Buy- moaiittgand was expettod to be taken. serest carts. er 40 index fell 25 basis points to 5.2930 .cred to have one of the Hest finainial up by the Senate that day. "It's going to be an uneventful meeting," Friday,from 5.54%a week ago. backings in the nation.7 hi hrnlx-tty AccordtlpgSto Iawntakcis the t.on- tax-that hacks school bond debT is he said.'The situation is still largely the Meanwhile,municipal bond funds had cessions bffcred out op(Kirlunity for same as it was at the last meeting.They'll outflows of$862 million during the week leviexl se par ttely for each district,but savings flay coiild not pass tip. continue to stay balanced on growth and ended Aug.6 after truing$402 million the the hoods are backed by the stafe's 'qt war something we felt needed concerned about disinflation on the price prior week,according to a report by U.S. to'lore dome," said David Fink, 'pledge. rated general nbltgation front." Bancorp Pipe]Jaffi•ay.It was the third spokesman for Speaker of the'flouse. P g �Eliulxth AJbvrreie In the municipal arena,yields fell two consecutive dveek of outflows from mu- Moira K.Lyons,D Stamford.`"Thy. or three basis points in a market buoyed by nicipal bond funds. O unions wereprepartxl set offer it to us and.we would be derelict in not tak- ing'thcis`e-:.;gs Moody's: Health Care _ MARKET SNAPSHOT; Monday,',August 1 1 - - The ptrSposi also calls for the re- Moving to Negative hiring'of j*6 state workers and no Iservice fiuther worker layoffs for foul years. n an'lxnt wlease d Friday-Mocitly s invest.se vice says,Kt the;non 12iiw1aaclsaysheYyili�c to the bill if AIYgR1T LfAa EJtPECTf� PBSJ1eIMAR1 pttiiit health care mdastry is ntoiiitg A�,�iastlet UKDERWFLITER ►all=B 7E iT&JCTWiE it passes the c to*ird a negative oudo*ok and away 5986 Gw:ago Mre Banc Di Wednesday Serials,AMT The$IaterSlYond commission is E schedult' td t m early Scpn nilxr t rahtng s131'ilrty:witJr ilic expcc 5600 Phiaddphia Schools Bear Steams TBII Berets,Terms to d e tlte?stair's twrruwtug ,,,�An� that tfi, , , -- r3 will face $47 � Wetinesclay Serials ,vrrcfluv pin 1y uvt i at,least phuit ,ji p two years aitd iqr 11rG xt Otte to' - S7B0 Or+rtge Co.San.Gist.Calif. Compelitiue Tuesday COPS proyet666;irtlgfor towns and cities, .Accordin toj M MXt"an Goldman Sidn TBD serials,Term .� a task that will be virtual! g t�!Ab key coal- Y i- ]enges ptesstuingilrlEtablc outlook $132 Metro.Cortrrci,Mm. Competiure Wednesday Serials.Terns ble without the existence of a formal $100 W.Contra Costa USE),Calif. Computf ne Monday Serials,Tenn operating budget,according to Row+- include ccitaiitng f ki Cient vdlttnse lard's office. tread,uncritaiaty of Mediccare rrfosIIt The budget implementation process and grnxving federal tie5etts,cuts is will take approximately two weeks af- ant from Medicaid,rising ter the labor concession issue is set- expenses;and a slow economic re- OAT �DICATDR LAST RETORT FORECAST after which the governor will cow. Wednesday Business Inventories May:-02% June:a02% Moody's rates 566 nonprofit hos- have 10 days to sign the budget,mak- Wednesday Import Prices Jinx 40.8% Jw.fog% ing it unlikely the state will have a Pitals.wi(h tnbr> than-BIOS billion in Wednesday Raw Sates Jurx+o5% Judy.05% budget before 1,said Rowland total rated debt age The aver rating is g currently at A3. Wednesday Retail Sales,excluding autos Jura:40.7% July.+0.5% spokesman John Wiltse. After several years of strong Ttnrrsday, Intematiorol Trade in rf.441118 June:441.58 1 Piazur growth,Moody's[Oporto that iapatieat Tt„„-lay Producer Rice indoc Jttax 405% July+0.1 Y. volumes are now.waning,with vol- T1141-13r Producer Price Index,less food and energy June:-0.1% July:t0.1% Utah Education Reform ume dectihes becoming•more wide- fto sal Deadline Set ' �across the°mmiry`several rile- Friday l�Jobless Maims art 390,000_6% Rl9 :23.0% tors contributed to this:increased �� l:mpiieSateManufaaudog4da Jt1y22b% Aug:Z3.0% DALLAS—Utah lawmakers have physician competition,capacity con- Friday Consumer Price Index Jim.,Jim.,+02% July.a0.i% set a Sept.30 deadline for sub- straints,and a modest fln season. Friday Constraw Rice k6m less food and energy June:unch July:r0.1% mission of proposals by consultants Moody's also says that potential Friday Inrlustnal Production June:.0.1% JW..+0.1% interested in the opportunity to revamp major changes in-Medicare,coupled the stale's public education system. with a growing federal,deficit,rep Friday 116Fetion June:74.3% July 74.4% Lawmakers will evaluate proposals [ascot kxiger tcim> try.Sisk-with Friday University of Midnigan Cormener Sentiment Jutf.90.9% Aug.:93.1% and make recommendations-to'the the federal defier.ex-oclul to reach Fa casts rwn5crr lyre me"or a mum by econorr tea podad br r it eonaoie,Anterior Lggislauae a Boocd Fad Jr"'M one $455 biJlioa 4&;;10W—aad$475-.hit- mittee,which will award contracts' lion i64004 and'is lawmakers-de- , worth a total of.$130,W,og-XkL 11. We major changesAo Medic;am bos Fmal proposalw,by the lyinrrers wiIl be, pits!Medicare reimbi>rsgment may Government Securtli Prices t0-year.119ar�m yield 129,up 4rar� due Dec.31,just-in tin_to for the 2004 . .be targeted for fiatirci tluc:tioos-over 30•yeu:10130rw to yield 524,down W32 legislative,session. the;lvnger term.Unceatainty regard= Lawmaker 'proved the plan dun-. . ing Medicare funding.is among the Municipal Bond Indac 10Tnrp,up ar32 ing the 2f103 k gistative-sessiiin:Utah mostimportflrit on-going,copcerns Pre Bond Buyers Total$6264 WlGon,down$53.4 million currently ranks last in the nation in - for hospitals,as it represents the' 30-Oay Visible Supply Canpeuthm:$2.350 bi6on.up t273.1 minon i per-pupil spending,and officials-want largest single source of revenues for to try to keep spending low by utiliz- most hospitals. (as of eJt t) Negotiated:$3.914 billion.down f326.4 minion TtrMuniferrter List Offering Total:$6.072 Won.up 590.6 mill n tsd 8A Monday,August 11,2003 Dw BoND Bum two GENERAL PURPOSE:gib Half UTILITIES: Fist Half 2003 2002 2003 2002 Volume No.of Volume No.of Pat. Voluane No.of Volume No.of PeL mama (SOOOs) Issues ($0009) Issues Cttg (sows) Issues ($0005) lssues Chg TOTAL.................... $66,488,000 Z146 $43281,000 1,853 +53:6% TOTAL................... $19,700,300 W9 $14556.100 753 +352% FtrO Wager.............. 24,682,9W 908 18='0W 855 +34.7 Rrst Quarter.............. 8,677200 390 6,762,100 354 +283 Second Quarter ........... 41.003,100 1238 24,961,000 998 4675 Second Quarter ........... 11,023,100 479 7,PA,000 399. +41A r,d General Purpose........... 66,485,900 Z145 43.240,700 1.847 +53.8 Warwr 6 Sewer............ 16,530,900 778 13,484.000 656 +226 Veterans................. 0 0 40,000 2 -100.0 Natural Gas............... 331,100 8 33.500 8 +888A Agrkxdiure............... 100 1 300 4 �6.7 Teleeommmicatisns ....... 54.300 10 814W, 12 -333 SarlTic-Exanml............... 51,9M.700 1,964 40,947,3M 1,740 +26.9 Flood ion d ............. 429,4976.O00 1D 825M30.3W 11 +3+21.1 Rend Cardrol............. 429,400 20 282,500 20 +520 MedmunrTax............. 589,3D0 9 491,300 13 ►19.9 Combined tlb7dfes ......... 1,376,600 43 644,400 46 +1139 r� Taxable.................. 13,93;1,OW 173 1,842,40D 1D0 +6562 Tax-baemgt............... 18,817,700 635 14,076,600 726 +33.7 New-A4mey.............. 49554,3W 1.423 30,729,100 1,376 461.3 MlnUmxn-Tax............. 219.000 6 325,9W 16 -2.8 Refurda47................ 15,1M700 667 9,494200 393 +SA Taxable.................. W31600 28 153.600 11 +332.0 Combined................ 1,823,000 56 3,057,700 84 -40.4 NerrNbney.............. 9J153,100 433 7,762,000 463 +269 imi Negotiated ............... 47,704,700 1,101 26,457200 916 +803 Refunding.:.............. S.M.600 396 4,511,3W 244 +79.3 Compettive .............. 16.620,900 1,009 16AM 500 889 +11.7 Corbirted................ 1,756,600 40 2282 BW 46 x l Wale Placemerds......... 160,4W 36 1SUM 48 +01 Negotiated ............... 14J129.SW 582 11,754,6W 471 +262 Revernna................. 18.493,OW 461 11,4839W 443 +61.0 Cep .............. 4,840,3W 276 Z76ZIOO 270 +752 GerneralOW925Dn......... 47,993,OW 1,6B5 31,797,10D 1,410 +50.9 PdvatePlacerrrenls......... 30500 11 39.400 12 -226 u Rxmd-Rats ............... 59,507.400 Z064 40,0M.700 1,759 +4U Rxr ......:.......... 17.020,100 609 13,038,4W 515 +305 Vartahle-Rats(Shot Put).... 3,410,700 64 2,590,7110 73 +31.7 Goned Obligation......... 2,680,2D0 26D 1.517.700 233 +76A i Vafl�(1mnoft Psl). 1.093,600 6 39,100 6 +2696.9 Rrxd-Rate ............... 15,689,BW 824 12X4,600 721 +28.6 Zem-Coupon ............. 403.500 23 277,100 2D +45.6 y .Rate(Short Put).... 3,0an 32 1,961,700 25 +57.0 Ltrnlmd Rate.............. 2A70 800 372 400 8 +4561 LICJ V -flide(Long;'No Put). 86.600 2 0 0 fLffL f Bards-mod ............ 2.320.400 737 2,394.300 $37 -V apon ............. 505M 24 99,2DD 12 -49.1 Band Insurance ........... 25,556,200 967 16,486.800 800 +382 Lidmd Razs .............. 793 200 B 290600 5 ►173D Lettm Of Credit........... 5172W 26 833,000 46 -7.9 Bank-Qjaked............ 1,062.900 349 8972W 328 +18.5 Sb+dbyPurchseAgreen>eals 24,800 2 841.SM 7 -07.1 BadItmum ........... 13383,100 506 8x62W 392 ►S13 rzb State GommmAs......... 26,199206 92 14,380,8DO 82 +822 Letters of Credit........... 289,900 9 427,000 11 -2.1 State Agencies............ 13,108,5W 93 5,005,100 93 +1519 -StandbyPtuthaseAgnaernents IBM= 5 1,627,600 7 -3.6 Muic1a80es............. 22,877,600 1.819 19Z5,000 1,533 +19.1 State Goveminents......... 244200 7 288,400 11 -14.7 Local Atahmi im .......... 4,234,900 138 4,6AXO 137 -9.0 Stab Agencies............ 1.634.800 36 2,596,60D 46 -29.4 Cgdeges 8 lkdvmsibes ..... 3,900 1 8,800 2 -6V MuMk ............. 12,3T3,700 654 7,254,6DO 573 4WS _ d Tribal6ave"Wrats ...:.... 0 0 Z,OW 1 -100.0 Local Authorities .......... 5,297,6W 162 4,412,800 12D +20A Oled lssums............. 61,900 3 14,SW 5 +326.9 Dired Issuers............... 0 0 3,700 3 -lW11 KV=PMqft P=aad aymldpal towards ra hided butshod4am soles and ramrrtt#nps n exlude0.am- no7M Pdrahn Plaeta. and anonitlpaf lotmdsara Isladed,Dal shal4ana adrs ad tin trrirded.sm- Cot aeariapbteasel-rxtaroseSoocaThm=Rnncla V1lM not memtnddtmeh-mdrxyrasomaTtnmsortRvslai(711M GENERAL PURPOSE GENERAL PWWWE UTNTIES UTILMES Sealer Managers Financial Advisers Senior Managers Financial Advisers and V*W V, tr*W Vdm a NIL) unw (SM04 mono MOIL) del) 1 Marr%Lynch $6.334.5 1 Public Resources My $15,077.3 1 113S Financial Sus $2.5952 1 Pubic RWCW Mgm1 $Z254.6 2 C(Oproup 8,3195 2 Oftatridc Pettis 10,523.8 2 Citigmuy 2,537.5 2 R1st Sout*est 1,752.0 3 Bear Signs 7,9P8.1 3 Meskor Fkw)ck! 10,000.0 3 Merril Lynch 1,983.0 3 Rabat W.Baird 1,470.3 4 U3S Financial Sym 7,791.9 4 Pubic Rrandal Mgmt 5,CZA 4 Ldmw Brothers 1,429.3 4 Pubfnc Resources Ady 1,4393 5 Morgan Stanley. 5,792.1 5 Lamont Rrtandal Sym 3,374.8 5 Morgan Stanley 1,231.0 5 Estrada e'rnojosa 9422 6 Letmham Brothers 5,7915 6 First Southwest 2e%7.4 6 Siebert Brandford 1,061.7 6 Lamo d Financial SVCS 753.9 7 Goldman Soda 3,802.9 7 1158 Piper Jalfray 2XV 7 Banc of America 879.6 7 Animals Adv 732.0 8 ABN AMRO 2,376.9 6 First Alb m 2,310.7 8 Goldman Salo 718.9 8 C Morgan 6745 9 J.P.Morgan 1 AW.4 9.Municipal Advisory Prbms 1,744.3 9 Bear Steams 7163 9 P.G.Caw 498.1 10 Banc of Aarledce $81.4 10 P.G.Corbin 1,1763 10 RBC 03in Ratadfer 544A 10 Pt9&Adv1sosy Cn sllrft 465.0 prk-Aptaoeamrh.dams.Oales,af g a wield PdYP6meftdW-emp"c Ss Pam phmmenR,dM aft$ow6-m obi P61*0 aftdehtrmadmm smmr=n=RauE(7nm snalDaaFkzvd �psrao�ded soamrram=11=111(MM) UZI Biggest General Purpose issues:First Halt 2W3 Biggest Utilities issues:First Half 2tfixi Dade hsuel And($CM) Illasaper(s) Dale Inner And(9ft) ttlmager(s) Jun 5 IMnas(State),GOs(rA)Q 10,000,W0 Various finis May 14 Detratt,Mdn.(NMlref) 599,880 UBS NO Seas Jan 16 Golden Stab Tobacco Secwibmtioo Corp. 3,OW,000 Bear Stearns Jan 24 Detrok Mich. 454,105 Siebert 8rarndford Jun 12 Now York Tobacco Settlement Finance Corp. 2,310,705 Various tinns Jun 6 Los Angeles Courdy Sarisal3on Wild Fiance AaMoft Call. 444.&10 USS Financial Svcs Apr 24 Cal tot as(State).GDs 2,050,00D Meng Lynch Jan 14 San Francisco Pubic Utillies Commission,Card.(ref)(cpt) $W,270 Le miAn Brothers Jun 20 Daftinla(State).GOs 1,718,580 Morgan Stanley A4ar 31 PfaladetpW Pa.(ra0 381,275 Feb 27 New Jersey Tobacco Settlennerd FManx Corp. 1,(W,170 Bear Steams Apr 1C New York City Municipal Water ftm Authority 367,265 Merril Lynda �+ Apr 15 California(Slate),GOs 1,400,OW Lehnw Brothers Feb l l Los Angeles,CW.(rat)(cpt) 365,510 MwQ Lynch Feb 28 Massaftselis(Commonwealth),Gos(NMhaf). 1,066,375 Lehman Brothers Jan 15 Dallas,Tex 307,410 Slebert Brard Apr 17 Puerto Rko(Commonwealth),GOs(ref) 1.018,605 Lft m Brothers Apr 16 New York State Emdrammental Wales Corp. 286,540 Goldman Sachs Feb 20 New Yak Local Government Assistance Cory.(tat) 1,000,000 Various firma Apr29 SeaMe,Wash.(rat)rcpt) 277,400 Merril Lynch ltei m (WO-eompeffiIrr;60-grraai of tlorc gtwralJ-aew-saey Q ralurdenp;(�)-rahmdnnp: Key to�:(Wt)--PelClrr:t W-1)-new+rmr�8 reSardaq(rag-ret>AMvne.Sour m Tbaman R w rill e� (n0o-tax�;Q17-tox-spL soarco.R mso n Poundal(701 M p1120 Z Tuesday,August 12,2003 THE BOND Btn•rlt : Monday's Market Yields Rise More Than S Basis Points, � NETT N` : R"I E F Treasuries Fall in Slow Summer Session By Nicholas Chesla and The issue is insured by Financial Se- Chita 'Fed. CM11,11 Aldtexteh the vcar-iivr:•r y ar lrnAiirtion Anastasija Johnson eurity Assurance. y In the negotiated sector,Bear Steams o index fell back into neptiyc territory in Municipal bond yields rose by at least held a retail order period on$600 million �OtA?I 0.2/u%dl�Dp}e July,limo ivied year over year indexes of five or six basis points-yesterday while of Philadelphia School District GOs l XISiry activityic Fo said. 1,some gt'ttrcnt. West Contra Costa Unified School Dis- ahead of institutional pricing today. Nl.w' a 1; - ]h g IIl a ,i fell 02% cixiW [idly;cite e g said trill sold$100 million general obligation Meanwhile,fixed-income markets were wi 16 2:u+ufa i.uring lntl:x lee el o 1h fed said nd gap bt�wa;n p Iii year bonds in the new-issue marl;et. � characterized by extreme volatility last in Jui)e id a ling revi.sll�adjusted level in offer_chat l theiec Ili a index sahh itl ubsthi ly, Treasuries fell,remainingwell inside week as taxable yield than were am- negative terrain ahead of th meeting of plified by activity in the mortgage-backed May,the Federal Re.scn-e hank of 0iicago uicmcA to theprevioui mrntilt's readings. Federal Reserve policymalcers scheduled market.according to George Friedlan- lefxnlw yestenlay. 7Ue taw ntafetials pricx in dex swye l at 31, for today. der,affixed-income strategist at Citigroup Tide May i3ecre tse was originally fie- wdtile dx:tutisitecl frx ds'paxx index edged Anderson.senior economist at Global Markets. ix)rtcd as a 0-5%drop it,97:3, c duu-n to negative free:Tie large gap bc,-. Wells Fargo Bank,said the Federal Open "A key factor in all of this is the con- ,-It)nxran n ntatnif xtu find was up tl.d ti ; twrxrt idtc roux fxtce ufc xw uxdre u�N that Market Committee was likely to leave in-- tinning'supuchargmg'going on the tax- in the(hint Siaiuti in Junk-, acidiug to firms arc still h tvwn6 difficulties lxtssing serest rates anchangcd and release a more able markets,"he said in the'fum's latest cite indu:.iiiad cu t am ices[c dutxt li iii�vstonteis. _ .' upbeat statement about Use U.S,econo Municipal Market tor$ment "Either bcar- pioduction fii&x. `tl)c roil said cxpxiaacun hu`future fit,- my even though low inflation remains a ish or bullish news is having an exagger- .On a yc trcne-year b tsi,.ougiut in(lie tory-unvily rentaine'd grit high in July. concern. ated effect as a result of pressures in the rcginn was on 4.91 w hily 4Itnitut n.+lion- nw futute piotdut.-titm.index ed"exl up-to `.�Wa or ding of the statement will be mtgage backed market and on leveraged +lly w is tiff 1.2 35 and dx hdtuz sluprncrtt,index tins uu little more optimistic regarding the ' positions generally" In 3utr rxttfwt dcxlltt.al in dusk(ATIle titan,,I a1 23. strength of the recovery in the second The recent back up in municipal yields four(T-MMI subsec-tim: half,"he said."However,they'll contin-' =has brought back-direct retail buyers to TIK httdscsi nscnuce scYtDr Ou(p n Weekl T-Bl{LS GO tie to sa further dt Elation remains aiisk: .snch an ext Cthat Frida Ihe'taxtx- run 0.31; m Jtmc•after tdrnpp n_0 7`.,"c in Y Y eP by y:. M t �Iahtxtall ,n wuicc uu tit Kas itn o o and that's why they are going to hold rates empt.market was running short of sec- s S u' At 0.940/o,"1.030 Jo , steady." ondary market-inventory.. . 0 65< C'imtlxgeil v tih a y t v_uvlrc-1_Mid In the municipal yields rose west resou=output w i oft'3ST until j�JASI111�C 7 t)� Tr over[arcs l n �L°a'yr by.at By theead of the wcek,it became ex- nahrn +]nso trzr uugwi wars drratll t U u{r. v v Ube 7'rrasur} s latest 91-nay and least for six basis points reflecting soft- tremely hard to find bonds in the sec- and Midwest into ua-as d cx u o.(it dc, 182 d iy dTroas t bills were 91--d,a,die ness in Treasuries while traders reported 'ondary as retail gobbled up everything [leased 0.65E m Jane,after f dhno 0,MIr in dtnx-nxuitIIs incur"a 0.c1•t()`�b lu-ll mic. ��selling��light summer Monday that wasn't at a super premium and a May.Naticrnaliy:tlx auto s x tors uirt{x! :3owv fium tlxt previoas aaai,nl'5 - of paiticipation pressiiriug the market. modest forward calendar provided few was up 0.6%in'May:On a your nv r yc ri 0 945 r,:find as dw six-morphs immured a I don't think anyone is heavy,but I prospects fa re having?Friedlari. satii lxt'sis,,auto oiapttt ii.•0 6:3.5o iu dt-Midi eA 1.0 309, hn,h i ate,up fs hn i:tY_')%from think people area little more reluctant to "t1s a coosoquagtx;mum market patterns :utd 1S%f6r,LIZ fIfiiwdStatesas last wet1_ take on inventory-so Ws cautious at the_ may not 'oormaliie'until after labor I he tvFuly st tit+arukry r xt x's twgiut Coupon equivalents Well:0 rh Q'' anti moment"a trader,in New York said. Day." lost()3�,m etine;after slifilnng noun tit I.Coup n equi ale "There was some interest from dealers With the economy and the monetary r c , early on stocking bonds,but as the day policy taking=ter stage,the tax-exempt May.Nalrorttally;'ui•tcdtmc'ty output w�.up flrc fxi Y Jtx dx )I S x n N.7Fi_dull tin' l)1 C�ttn with a Afidyvts rite 1 R rti was J 179 wore on and there wasn't any real follow- market was likely to remain volatile,.ac- l °• through from customers,dealers got a lit- cording to Friedlander,with municipals macltuii ry Zxrljtttf waS ilown�r$9p toter f1t:"an bid lHt If it a is I.9 der. Ue hesitant." having cleat iential-to out'I [form ree• l withagatit cif t2°srnativaalh Ttrii 1.n4 but w3,1)910Cc. 11x hid-t rv.:' g a Po � The of tdweet atecl'sectur s output cr raito w ss? 8 m t cemPetrtne sector of thc]iew-is their ta7�able cotmte�partsr. . 1X it)J1n1i after lu,tn 04 in "li ndet\ ii tdx fir It ran uc m alto to 1 sue market Cttigroup Global Markets . Long-term mun%cipals have'aht�dy om- I' t won$100 million of,-West Contra Costa perfoimed governments as btiyeis came A4ay.Nattonally'sta 1 ou1[wt a as t>fl Q 1°. �') 2 Ul Wed School District general oblige- off sidelines when 5s became available at trtlttnk Cum ztnd wtdt i yru c.trii 7;ttw t�n k�,hrrled$i64(33 4170(d0,aix1 diL tion bonds wrth a low interest cost of par or a slight premium,but in the inter- Mtdacst stcxf Scxurt s<wyut w is d r;n I'rca t 1y rcrcpixdSl6t)Ol)297(3(30 in mediate ran e,the trend in relative telds . 7 7 Ntr1k nahinut t, l stixia auput a�;t clridin �l,tiXtSx,7 t100 uf�t xr vritp d,u ,. Serials were.reoffered at 3tields rang-. has been srdcways. y. 4.b,ti lciwir.,' �1'he f t d. bents altio hot the ��2.25%in2007 to4:96%..in 2024. "Going forward,theaenowed interest 1;986�i}1.0Q0 foCtlxziiselv�ti A 2026 maturi toialio S9,milhoo w- of ' dirt ntcdiatt hrd Ent for 1 ens +'as ty- g duect detail buyers;combined with a K.C.-fetal Production tJll,;,.itxrJ,n;Ind Ilx,bid; reoffered.as 5s to yield�:05%-while: substantial dechnein near issuelvotume. to u'is r t it x i it i~16 7. hoods disc in 2028 containing$10 million' 'and tight l econdary market supply should Index Sli,ns t0 S In filly: were reoffered.as 5s to.yield 5 OM 6.A provide additional stippoitfor mtriucipa7s, . I , 1 , i ti fir}t is ; t r�alfoucd 2032>naduity containing S22 mtllion'was relative to taxables;`Fnedlander said. N1.��'7u[;1:- . xt,n n c tunny r,v t} !. reoffered as 5s to yield 5.10%.Bouds date `.`Nevertheless:the ride will inevitably be m dr BLAmal Pt five B iko_f Kamen i ndu,L>t il:si 5 t,( 3 hy.1 U0 wxi diein 2004.thtoug112Q06 and 2008 through .bumpy ❑ t at}s renitut camtinu Yt to'slxn ,irr:s of 3,ra try ar ccprt 1 316,(NN),0_i6.(NX)in-. 2p11 were not for nallyaoffeted.. — uiredo iraa9f in Jury ah}x,u_th d i Jltn�'c7 (Judln-SI,I i 3,5, ,0)O of ixia om;xtni: Bonds:due in 2Q13.and.E0l8;yielded. p ce thvtm tlx htcv t xn n.onth The 1 d'. bents al,u hoop lit 13 basis points more than Municipal Mar- -A'Correcdon 'tli,:l'cd said drat nigh, •lie 1ncltnn i t c5 53),1103 IYJU f tr d eitts Ir. ket Data's Friday.triple-A yield curve A Deal inFb&tm article on July 28 incur lt-.-t to tits reaiuin,xd hi Jt ti y 1t:iIg a.to - J i>,�a:": scale,while.a.2023 maturity yielded.10 rectly stated Standard&Pooes outlook for - It ttl to in,�rt t�i1 hinnC air slruxfiit l'I tits ' 1licjirixfitcKirni uxh x slipji xd tci a Sit in basis points more and a 2028 maturity the University of Massachusetts.The out TiteaSury to disc M.. yielded 14 basis pointsmore. lookootheA plusr�edbondsisrteganve July tniin'l5 inJunt dx,IW said.-&ji i>;ox n"i; r_SJxt irsi,inrLc+i ictatit:"' N/If;fi4YtVee,c'b'dIIS Y r _ --• 17x 1 rxt Fatd.the it�t fx xiit tw oCfimts AU9USt MARKET SNAPSHOT Monday,' 11 r Oittrrgyeear•ovt:r-y ar inemk;k ui pin- ��]451llNG10N Ilx Itt:tum lk ditctxnifelltatii ;LLnt ytttinJuIyafuz . Y7,gaiUueitftmd$pvillstllSl>bilh,vt rising altovezertt in Jtrrtc'1'rtxIuctionii a; of ftwr'w,6tA tiiu txuitliil}s t,xl:iy: Govemment Sewrilies Prices 10-year.99ib2 to yfdd 4.37%,tram ars "slinlitly b lcry year ago lc% s•at{oth' ilx fiiw-wax k rx 28 day bill;w-i(l ran.{• 3pywr tOi to yield 5.299..down�� d,rtable-and otidttrarw-good frodriiing S7 hilhtxt of new t..t,lt fry iwfioning$1.5 PLiitts,that--!said. . l illitw to refund$S hillim of rnalum,2 hills Municipal Bond kidex 1071y2,down 3Dt32 — 1V Ve saillple sines nine[;it rain difficult nie bills have an issix:'date of Aug.14 me erntd Buyers Total:i5.954 Wuion,down$3to.0 million to dray.-hntt concili.,ron$tilxxu individual aitrl me duty Seim.11. 30-Day VistWe Supply Competitives:$2.086 billion,down M-6 minion states,the data available stu?_est that pio- l i!J ]keuxt'links hold 513.481 bil (as of 8tt2) Negotiat>�:$3.86t1 billion,down 545.4 million duc ticin was also at or sligliily ixluw year- lion of iitaturiu„li&in theirown=—punts. ago levels tx,R7<s the disuict tfxi Fed said. .- Frfi jy Ner,mm TheMuniCmter Ust Offering Total$6.124 billion,up$52.3 million Wednesday,August 13,2003 . Tee BOND BUIER Tuesday's Market :�W .NE Munis Flat in Moderate Trading, . IEF � R $592M of Pa. School Bonds Priced By Nicholas Chesla and basis points more,respectively.A 2023 FOMC Leaves titnony,Cmraspan told lawmakers that Anastasija Johnson more,a Yielded roughly 17 basis points "a very love inflation rate increases the more and bonds due in 2028 yielded Utc Interest Rate'Same Municipal bonds were flat in light to same. risk fiat an adreise shriek to the son- moderate trading yesterday,while the f- The issue is insured by Financial Se- 4SHiNGTON— Federal Re- omy would be mocc dif5utlt to counter' cus among participants centered on new cuiity Assurance and carries underlying Y Y serve Hoard lwlkymakers yes- issues and an announcement by the Fed- ratings of Al from Moody's Investors terday left the federal funds rate un The neat Fed inectiiig is scheduled oral Reserve that it would leave the feder- Service and A-plus from Standard & changed at 1.0)%and determined the for.sept:16 al funds rate unchanged at 1.0%. Poor's and Fitch Ratings. Gas was weighted toward`'inflation be Emily,Neumr.rn Treasuries were mixed,experiencing a In the competitive sector,Morgan Stan- coming undesirably low"lulluwing its brief bounce when the Fed made its an- ley won S280 million of Orange Coun- June 25 siareinent that the economy was nouncement on m h m the eaty,r-toward"an unwelcome sdb- Richmond Feed. O°e�policy of Cali[.,SanitationDistrictcertificates stan(ial fall in inflation and a wta}:bias ly afternoon. of participation with a low intrest cost of sianti}:" Manufacturing.struggled Kevin Logan,senior market economist 5.14%. Nearly all cceinontists expected the f W Yr�R l:T-According to the. at Dmesdner Kleinwort Wasserstein,said Serials were reoffered at yields ranging .Fed Funds rntt -- the interest bunks NFederal Reserve Bank of Rich- Fed officials reemphasized their commit- from 4.75%in 2021 to 5.04%in 2028.A charge each irlhe r oar overnight loans ritund's latest svivey,mannfaetii,ring in ment to,keep interest rates low to prevent 2030 mantrity containing$45 trillion was Small- di rnntain at its i-_tit ;trrenl level: rnur s inoJed genertlly litwat in July risks stemming from an unwelcome fall reoffered as 5/4s to yield 5.05%,while er interest vatc"indicate Tiiurc cash in the,Fiifih 1•)istricl, in inflation. bonds due in 2033 totaling$108 million available to banks,which:then lowers Arcotding to results fn rtrn the Rich lukewarm. Their comment on the economy was wee reoffered as 5s to yield5.10%:•Bonds the cos{of bomiw 0 Mond fed's latest survey,n slwndcnts lukewarm,and the emphasis was still On due in 2022 through 2026 were not for- "'Me.ainunitt�ccmanues to belimi; re�rtcd.that shipntc;nts orchid down. �e dangers that disinflation could pre- malty 028reof mad. . that ammdrrlodalirc St:uru of rnonc new.oiderc dropp:d,still backlogs ot.< sent"Logan said."Given this expelled A 2028 maturity yielded five basis tary r+they:cotilrled wide still n6ist un- Unfilled millers and capacity utilization ddcline in inflation they an going to field points rose than MMD's Monday triple-A dcrlying finis,aura np1 .roductivity,is sliPjti. fiirthcr irito,nc rativc tutitory. monetary policy m accommodative stance yield curve scale,while bonds due-in 2033 providinii important ongoing support Conditions in the distriot*s scTvhxs for what they call a considerable period ' yielded nine basis pointsyFiore. Guar- I,)cxrnontic actnity'_We Fed said.in a and nK mil"sex trxs imlrtvved drarriaiieal = which means certainly through the end The issue is insured by Finaneial Guar- statement following-a meeting of the ly ni Jul),according to the Riehiriond of this year and probably into the next anty Insurance Co.and carries underlying Federal Open Mai1i:t C'-ornimittee,the Fcd Scrvioe funds and retail establish year" ratings of Aa3 from Moody's and AA from F 1's po!jymakrng nnip,."TI)e eve- meut-s reported ilia(rcvc'nues,rosc 1°the municipal arena yields overall Standard&Poor's and Fitch. Bence stein ii late'd oyix die interniect- sh.t tl district retains noted a resui- Were�'M°though ms[kettoneshowed 'Back in the negotiated sector,-George R }- some improvement due io fin new-issue IL-Baum&Co.priced and repriced$60 uta'penoil'shiiwsilimm kitding infirm- . gc ice,n boo ticket sale,-arid stropfCr pricing and increased buying intassC trillion of•Darando School District, tng,-3101oiigh labor martrt indirators tradic St ui;ire ii i fur time s x;iod liruc !There was a decent amotmf-of,aehvity Colo.;- It- ergeneral obligation bonds. arenuxcd_ in 10 months. The Fed addled that the cumriiiite.c Ruth n:trul establishments and ser frijm'a buy basis brit not much in the way Serials we priced to yield from 150% rls ii:upside a»f downside k risks vices businesses brn�stcd cmp trt loyntc of selling,"a trader in New York said. in 2005 to 5.01%in 2024. p: rav to dieattainmcrit of sdstain tblc in;uwttn for Uic fist dine since Juric<Wl;to- `There were more buy tickets than.seil A 2008 maturity yielded six basis points for the nextfcw-.quarters us Gcinf; sjtitc the inipretSivcshowing fitr 0Iy, tickets,'so that made for a little bit of a mtxb than MMD°sMonday triple-A yield nnr ch)y equal:In crniu rst the p,uba scrvirt t3 tnrs'aatliiok for productdc•, fitmertone." curvescalr;whiltfionds due in.2013 and hility,though minor,of till unnelcomc irtnnd during diet naxt sixsnonifiq ed-m Elsewttete,finders said retail.was Lela 3018 yielded 13 and 12 basis points more, .Wall in inflation excciif that of a rise in - cl nvri sliglrUy hum mina last til>art,while tiyely quiet due to�selective buying;-par- respectively.A 2023-ataturity yielded 10 ! inilauori Croui`its already low Ic vcl:ll:c cxp station at retail fi;ins cununuell titularly of serial par.bonds. basis points more:' Qrnnuttx•judrvcs that,till I>dais e,the to press for\:,rd:Price.pressuiC_s rc- It's fairly slow because of 2latsk of The issue is insured by MIA l[nstrr- crisk of inflation txcornin,;airdesirably in rnrcd rititd ,t in July,and I>uSrnc<srs merphandise that works for retail, anoth- mice Gorp-and carries an underlying iat- l.nv-is hl.d}tti lx--U}c rtixJ.xniurnt con- :cspa"tcd cod}a sligfit,pickup in limier•-, r er trade'in New York said."We're looking iag of Aa3 from Moody s cent for Utefun tics ibtc future_• tiun rug tlleinouths ahead.- for the right product mi the downticks;,but Finally Goldman,�Sacht'dc'Co.tents_ Tin cx»i tittit alsosvdcwit nt mCtlt All fimis surveyed are locateo Kitt.'. You can't fill them" tivdypriceci 3501nillion South Cardina ids ct)wh Cy,'�accoautrudaii- :wn be in.dw Fifth Federal Reserve Di,trrct. In Abe newassuemarket,Bear,Stearns State Housing Fuiancr and Developmtmt ods.of.I5)lj y cconS,1r�Yalrio rind n' Ivruelr irn�)u:h-a'-r1 i7raYiliX,N i't7larrt- &Co.priced and repriced S592 rrillion of Anthrw ity mnngise n-v�nnr 1-6 s -•. Qt'its:Juuc 24-25 meeting the''. who 1Naiylu c, airc1 .Carxof'. olurSoutin State Public School Building Authority, Series 2003A-I bonds were priced at FUNK'Ct11 ral"s by a yuaiier l>,tirit 10 Carolina;Virp.inia.and riiosi of'Wcst 'school lease revenue bonds,follow- par to yield from 1.G0%in ZOOS to 2 6096 i.(AJ ,Aimz's yuallor point interex r rate Y-uginia. ing a retail order period Yesterday in which in 2007. cut was the 13th dip in interest tarts roughly$29 million in orders were re- Series 2003A-2 bonds containing$49 ceived million were priced at par to yield from simti a flu-,[><_r wUuc of 21 X)i and krought target inkTect rates to thcar lowest le V Treasury 4-Weeks Go . Serials were priced to yield from 1.05% 2:25%in 2006 to 4.65%in 2014_A 2024 -cis since,19,5il. o in 2004 to 5.15%in 2029.A 2033 matmi- maturity containing$14 million was priced Tlx ttrtxls male is the f ill's Hain l ver At 0.91 U�o High ty-containing$360 million was priced as it par to yield 535%.The first part of a for influcatrlg tic economy.and cs)x> ASIf,TNGTt]it-.-Tire Treasury Ss to yield 5.175%. 2034 maturity was priced at par to yield pially fdrstiinulating it air ri slinnut to 1 y 1> anmcnt aucuou i$15 billion A 2008 maturity yielded 16 basis points 3.90%,while the second part wtis priced pcssinntipc`Econbutic uuficators that _ of lour-week trills. a'-0.9 i O%]lidli mom than Municipal Market Data's Mon- at par to yield 5.45%. have sluilsd fc ors of deflation yield,a price of 99.'i29. day triple-A yield curve scale,while bonds The issue is insured by FSA and carries an due in 2013 and 2018 yielded l i and 16 de Fed yhairindq Alan Grecosimn uild 7lio coupon 6quivulent was 0 9 919,i tmtiying rating of Aa2 from Moody's. El Conte,&s in Jul%that he Fu7-dwold be- The bid io-cover ratni wxS,145 "nurtdfid that tic face'iie%'ch:ell.,nges Tenders at the high rate:wereallut- . MARrCET SNAPSHOT: Tuesday;A roust 12' lit maintaining p6ce`stabilitY,specifiz red 21A6ek The iedinfi yield,-was cally,to przvent inflation front falling 0.89_%.7bc loin yield wa 0.88b4i. i ,too low"and ie<ulting in deflation 7lnebillshave an issubA-Ac of Aug: Deflation has persisted as a recent 14 and tiie due Sept.11 Governmentces Securittes Prim 10-year.%Niry to ytOJ 4.40%,down rye oconomir col icern because after prices 'tenders 4 rWe d S36,691,344,W)and 30-Mr.1002siy to yield 5.31%,down II/M begin to fall,die Fo d's Mower ai lower the Trrattay accepted 515(XX),272 0W, Municipal Bond Index 10712in,up"yz — :interest rates and impost;other,less Era iitcWdiig 543, e.W.OW nori7compeud ; The Bard BuyerY TotaC E5.465 tt�iar down$489.E rrn4ton :ditional eeononric.tools Ix-cornes less The :Fed banks als6 bo.tight i' 621io effective. $2 9ri4,332,(M for their own account ��Ytside Supply E1594 rr,down E491.6 minon In'tta:s<:mi annual re:piri formerly inexclisngc for matunns securities. . (asot8113) Nmafialed:$3.870 billion,upV_I tudlion .:-known as die Humphrey-Ilawkins les- hind)'Neu-a.nr TheMun Cerner List 011eftTotal:$3287 billion.down E2637IIINan 2 Thursday,August 14,2003 ME= TnE BOND BuyEx Wednesday's Market Muni Yields Rise 8-9 Basis Points; NE ILEZILEF $1.6 Billion of New Money Issued By Nicholas Chesla and Bond Buyer 40 Index moved to 5.549E Business Inventories The index for nonpetroleum imports Anastasija Johnson yesterday from 5.36%on Tuesday. rose 0.1%in July,following a revised In the new-issue market,Banc One Up, Sales Down 0.4%decline in June and a 0.2%de- Municipal bond yields rose eight or nine Capital Markets priced and repriced WASHINGTON-Business in- cline in May.Nonpetroleum import basis points yesterday,emulating weak- $987 million of Chicago O'Hare Inter- �. ness in Treasuries,which was coupled national Airport general airport third- ventories rose 0.1%in June, prices had fallen 0.1%in April. with an increase in selling as roughly 51.6 lien revenue bonds. while sales rose 1.1%,Commerce De- For other import categories,prices billion in major new loans came to mar- At a repricing,yields were lowered by partment data released yesterday for industrial supplies and materials ket. roughly three basis points on 2034 bullet showed. were up 1.8%,and prices for foods, Treasuries fell,remaining ensconced in maturities on Series 2003A-1,2003 B-1, The inventories figure,which grew feeds,and beverages rose 0.9%in July. negative territory for the session,while and 2003 C-1 bonds. i to$1.168 trillion,came as inventories Prices for automotive vehicles were equities also closed lower.Governments The final scale comprised Series 2003 in May were revised to show a 0.3% flat,marking the sixth consecutive extended early losses when July retail A-1,2003 B-1,and 2003 C-1 bonds to- loss,originally reported as a 0.2%loss. month without a decline. des jumped 1.4%compared to a revised tating$48 million,which all contain 2034 Inventories now stand 3.3%above Prices for nonfuel industrial supplies 0.9%rise in June.Excluding autos,retail bullet maturities priced as 5'/4s to yield the June 2002 level. and materials were up 0.7%,follow- sales increased 0.8%in July versus 1.0% 5.375%.The bonds are not subject to al- A poll of economists conducted by ing a 1.0%increase in June. in June.Meanwhile,import prices rose ternative minimum tax and are insured by IFR BondData America had projected Import prices for consumer goods 0.5%in July,while export prices slipped XL Capital Assurance. a 0.2%increase in June inventories. and for capital goods both fell 0.1%, 0.1%.June business inventories rose 0.1%. Series 2003 A-2,2003 B-2,and 2003 Meanwhile,sales rose 1.1%to while prices fornonpettoleum indus- John Ryding, senior economist at C-2 bonds are subject to the alternative SM52 billion in June,after rising a re-. trial supplies and materials rose 0.6% Bear,Stearns&Co.,said the retail sales minimum tax. vised 0.2%in May,first reported as in July. data showed consumer spending remained Series 2003 A-2 bonds totaling$220 unchanged. Over the past 12 months,the price robust and the economy was braced for million were priced to yield from 4.59% Sales are now 3.1%higher than the index for all imports rose 2.1%.That higher growth in the second half of the in 2013 to 5.34%in 2022.The bonds,ex- same,period last year. compares with a 1.7%drop for the pe- y� eluding a 2017 maturity,are insured by The inventory-to-sales ratio based riod between July 2001 and July 2002. The consumer has a pretty strong mo- Financial Security Assurance. on seasonally adjusted data at the end Meanwhile,the export price index mentum heading into the third quarter," Series 2003 B-2 bonds containing$369 of June was 1.38,down from May's showed a 1.1%gain over the same 12- he said.`There is no doubt that the num- million were priced to yield from 5.34% unrevised 1.40 level.The June 2002 month period.The gain comes after a bers are forcing people into the camp that in 2022 to 5.45%in 2024.The first part of ratio was also 1.38. 0.7%decline between July 2001 and we've been in,that the second half will a 2027 maturity was priced as 6s to yield . -By industry,manufacturers'stocks July 2002. be 4%or better GDP[gross domestic 5.33%,while the second part was priced weredown 0.2%in June,after nar- product]growth." as 51/4s to yield 5S0%.Bonds due in 2029 ttiwiug a revised 0.2%in May:first re- In the municipal arena,cash bonds were priced as 6s to yield 5.4290. potted asa0.1%dip.Retailets'stocks Retail Sales Up �.4%; weakened eight or nine basis points and Bonds due in 2022 through 2024 are rose0.4%in June,compared with an Ex-Autos Up 0.8% more in spots due to lower Treasuries and FSA-insured.A 2027 maturity was unrevised 0.3%decrease in May. increased selling, particularly from backed by MBIA Insurance Corp.,while Meanwhile,inventories of merchant WASHINGTON-Sales at U.S. crossover and arbitrage accounts. bonds due in 2029 are insured by XL wholesalers were unchanged,follow- retailers rose 1.4%in July,to "There was a late sell-off[Tuesday] Capital Assurance. ing anevised 0.4%drop in May,first $317.2 billion,according to data re- and though it looked a little bit more pos- Series 2003 C-2 bonds totaling$350 reported as a 03%decrease. leased by the Commerce Department itive[yesterday]morning the focus was million contained a 2030 maturity priced Saks by mantdacturen were up 1.1%, .yesterday.The figure followed a re- on the new issue market and customer as 5r/4s to yield 5.52%and a 2034 matu- following a revised 0.3%increase in vised 0.9%climb in June,originally selling,"a trader in New York'said.. ' rity priced as 51/4s to yield 5.57%.A 2030 May,first reported as a 0.4%gain.Mean- reported as a 0.5%increase. While traders reported that decent in- maturity is FSA-insured and bonds due while,sales by retailers rose 0.9%after a IFR BondDala America's poll of terest continued in the 15-to 25-year ma- in 2034 are insured by XL Capital. revised 03%gain the previous month, economists projected a 0.5%rise in turity range,particularly for the premi- The issue carries underlying ratings of first�epated as a 0.1%.drop.Sales by sales. um tarpon priced to a call,current overall A2 from Moody's Investors Service,A- merchant wholesalers expanded 1.5%, Excluding input from auto dealer- market volatility gave rise to frustration. minus from Standard&Poor's,and A folkrwinga revised 02%decline inMay, ships,retail sales in July rose 0.8%, "Trading in fits and starts like this from Fitch Ratings. first reported asaO.5%drop. following a revised l,0%gain inJune, makes it very difficult to get a'handleon In the competitive sector, Merrill -Emily Nmman first reported as 0.7%. things:'the trader said.`These ate cranky Lynch&Co.won a total of$475 million IFR BoadData America's poll had times." of Massachusetts general obligation con- forecast a 0.5%increase in sales ex- Meanwhile,the yield-to-par call on The solidated loan bonds in two series. ❑ Import FWce Index cluding automobiles. OiTtS Down July sales at non-store retailers fell P EJCP 0.8%,following a revised 1.5%gain in `j jASHINGTON-Led by rising June,first_ported asa-0.2%increase:"- MARKIET SNAPSHOT.'WeC�iTt?stltry,At]ytlsf 73 v v petroleum prices,_thc.US.im- -But non-store retailers saw a 2.2%gain 4xin-price-mdex jumped 0.5%in July, over the same month last year. according to data released by the U.S. On a year-over-year basis,total retail MMCATOR LAST REIORT FORECAST ACTUAL pepartment of Labor yesterday. sales were up 5.6%from July 2002. Retail Saks ,�+Og%(R) July:+OS% July.+1.4% The July increase follows a revised The biggest percent inc mase in July Ex-Autos ,lute:+1.0%(R) Jtty:+0.5% W.+02% 0.7%boost in June and a 0.7%drop in came from motor vehicle and parts lntp ces ,Mute:+ ) �Y ,tw wPri0 %(R +02% y.+05% April. dealers,which increased 3.2%.The - - -- Economists polled by IFR BondDa- July figure followed June's revised Business Inventories May-03%(R) Jtate+02% June+0.1% to America had predicted an import 0.4%increase,first reported as a 0.1% Forsts mMasent dw nkdw ofZ&OWbyaommdst;pallid byFR8ftbDaanmerila price index increase of 0.2%. drop.Retail sales by gasoline stations _ Meanwhile,export prices declined climbed 1.6%after rising a revised t. . 0.1%in July after falling by an tmre- 1.0%the previous month,originally vised 0.2%in the previous month. reported as a 1.3%gain. Government Securities Prices 10-year.971432 to yield 4,57%,dmm trin The rise in the import price index Another increase came in the area 30-year:91127y2 to yield 5.48%,down 131132 comes as the price of petroleum im- of building material and garden equip- Munidpal Bond Index 1052%,down 11%, ports jumped 3.7%in July after a re- ment and supplies dealers,which grew The Bond Buyers Total:$3256 biW*n down V-n(l pillion vised 4.2%increase in June,a 5.0% 1.3%after a revised 2-5%gain the pre- 30-Day VislWe Supply Competluves:$1.021 billion,down$5732 million decline in May,and-an 18.8%drop in vious month,first reported as a 2.6% April.The price of petroleum imports increase. (as of fl 14) Negotiated$2235 billion.down$1.635 billion dropped an unrevised 1.1%in March. -Emily Newman ThehlunlCenter List Offering Total:$5.W bFim up$2.359 billion Z Monday,August 18•2003 THE 130ND Btn•FR Friday's Market . " Municipals Firm in Light Tradingas NE REF The "Blackout of'03" Takes Its Toll _ r J By Nicholas Chesla and cording to Moran. Anastasija Johnson "Even though it was random volatility July iPf'Ddutttign, Utilities usage• however,rose to that led to the 0.2%increase,it is still mild- Ca achy Use U 83.2% from an upwardly revised Municipal bonds firmed Friday,the mar- ly encouraging that you get volatility on p. 7 p 80.4%in June. ket closed early,and trading desks were the upside rather than the downside,"he �j jASHiNGTON-Production -Crag T.Faris thinly staffed due to disruption that began said."It supports the view that we are like- Thursday at the nation's factories,mines, They afternoon as the country expert- ly to avoid deflation" and at t ties surged it July i its ended its biggest blackout ever.The black- The University of Michigan delayed its highest level since January while itsca- CPI, Core Rate out cut electricity to the Northeast and parts preliminary August consumer sentiment ... of the Midwest. report until tomorrow,due to the power pacity utilization rose to its highest Both Gain in July Treasuries fell,giving up earlier gains outage. levels since March,according to data released by the Federal Reserve ��TASH NGpON-Driven by in- as the session close approached,while eq- in the municipal arena,yields fell by Bound 1 y creases in gasoline,food,and uities fell. one or two basis points and by as much as Industrial production rase 0 5%in tobacco prices,the index of con- In economic news,industrial production six basis points.reflecting earlier firmness July following a revised se change st mer Prices rose 029E in July,while jumped OS%in July after being unchanged in the Treasury market,while participants figure in Jame; a:reviseunrevi n 0.1%in- the core rate also increased 0.2%in in June,while capacity utilization rose to reported several blocks of bonds trading crease J May,and an.d 0.1 in- July,according to'data released by 74.5%versus 742%in June. in the Street. crew decline in April,the Fed re` . 'the labor Department. Also,the July consumer price index rose '7t was actually fairly active for the kind ported.The July rise was the fern- July's reported increase for the 0.2%,while core CPI,excluding the of day it was;'a trader in New York:said. ... increase in sever months and the - CPlfollows the matching 0.2%in- volatile food and energy sectors,also in- "We started to move up['ILursday]after- increase'largestaseisince a seven rise in tanuary. - An June.IFR BohdData Amer- creased by 02%.In June,the CPI was also noon,and the Treasury just carried forward )one's Figures originally showed_ a tom'poll of economists projected a up 0.2%,while core CPI was unchanged f Friday[morning from the way it felt June's a rise.'-' : . _ ,a. 0A increase in the CPI fprJuly:The Mike Moran,chief economist at Dui- [T ursdayJ" 0.The capacity utiliiatior.rate zone July cue rate,•whdcivixtludcs food wa Securities,said it was the durd month- Even though traders estimated that desks to le c in 1uly,'fotlowi n-r terraced and energy,rose 0.2%,following an ly increase in industrial production,which were mostly half-staffed,with many mar- to 0:_increase in June. signaled a pickup in manufacturing output ket participants unable to come to work, 74.296level aer June and an umtyised Tbc IFR jaoll had forecast an in and the economy overall. traders said the municipal market func- 74.3%level in May,The June figure -crease of 0.1%in the core rate for "We've seen several economic indica- tioned well in spite of power shortages. was originally reported as 74.3%. July. tors recently that have implied that the "What few trades we did[on Friday] The July capacity utilization level is Before adjustment-for inflation,, economy is beginning to accelerate,and 1 seemed to have cleared the market with- the_highest since a 74.846 levcl in all consumer prices were tip 2.1% would say the industrial production report out a hitch,and back-up systems worked," March. over the last 12 months. is another figure that reinforces that view," the trader said"ibc few that did make it in June's rise in production compared Energy prices rose 0.4%in July, he said. ended up having a pretty decent day be- with the 0.1%rise forecast in a poll . following an unrevised 0.896 hikc.in Meanwhile,a rise in the duly consumer cause there was pretty decent flow in the of economists conducted by IFR June.Increases of l.2%iii gasoline price index suggested the economy was market,and quite a few dealer-to-broker BondData America and 0.2%in fuel oil prices were off-. unlikely to suffer from disinflation,ac- trades took place." ❑ The capacity utilization level was set- drops:df 0.4%for elet t ici above the 74.3%level projected in �' h and 0ont for natural gss prices for thesaaerepop. ' + MARKET SNAPSHOT: Mondcry, Aug. 18 Industrial-production in June was, thamoath oGJuly. _ 1.4%beloarWC%amcmonthayear' Apparel piicet,TemTtined up- ,. ago,Wle capacity W.k nic wren up 1.1%,- -changed in Joly.Food prices_rose the Fed said. -.0.1 W.driven by fresh fruirprices AINwt tea EVWM na3ttaeAriy The jump in industrial production shot.up 1.916 in July as prices a msvreat ts37e1 a tB t��111M alltuCTttRE _ was led by a 3.9%surge in utilities" for fresh vegetables fell 0.9%. t1.3DO Urk of Calif.Rep c teturon&oaerers Tuesday Serials production and %s rgeinitincreases igfi- Tobacco.and•smokingproducts VIM ►WA Citi�wp Thursday Serials .. real products and consumer goods.. Pn�-s°rged by 1.2%.while med- t260 S.C.Jobs EDA Mea Lynch Tuesday serials Production of.business equipment, teal care-pricesrun 0.5%driven by = tm LA DWP Bearsbams WedresdW Serials nonindustrial supplies,sad me t-` a 0.7%jumpin hospital and related _ VW Art Sdx)d rains UeS FkwKW Ttrrsday serials als also rose 0.4%.Maniffactunng services and a 0.6%increase in pie- M ctutccouxy,Nev. Cort910" Thursday Sertak,Tema and construction production each scription drugs. $162 Andarage Geap V,Bmm TBD Serials r- - Transportation prices rose 0.2%in r rose 0.2%. July afteurisiog 0.3%in June. ' The only major category that- -Airline fare prices rose 1.6%while showed a decline was mitering,which new vehicle purees'slipped by 0,1%. dropped 0.4%6 DAY NaWATM LAST REPW FORECAST Ile 3.9%riscinuWtties'pr«iue Prices foreducation and;trans- Iron follrnved a revised 3:396 drop m,. portattion rose 0.5%in July.aftcr Tuesday HousiN starts June:+1.BM JulY+1.78M loge.The Q,596 rises in finished . failing0:1%the mouth before. Tuesday Bm7dingPermits June:+1.82M AdIT.+1.78M products and consumer foods com-., r�t'�VdAm Thy Whiaan Sentiment July:+90.9 Aug:+93.6 pared with June's revised increases Tuesday Treasury Budget June:-$29.28 W.-t40.38 of 0.2%and 0.1%,respectively: Wednesday Initial Ctaims n!a Br16:390.000 The 0.4%rises in produetior of ofay. of Michigan Wray trading Indicators June:+0.1% JW,+0.4% materials,nonitdustrial.suppGes,and nw ort Delayed Wednesday Phay Fed survey July:+d 3 Auo+10.0 business equipment followed a re- Fomcasts n:pn!swt Me atea of esbnats py xnno rnsft paaw yy ter BmxV=Aommu yieed 0.1%decline in materials iii 7ItTEWYORK-The University of June and an unrevised 0.4%decline .1 NMichigan.Friday said its ptrhui-' _ in'nonindustrial supplies the same inary August consumer sentirent in month and a:revised 0.4%.increase Awe report was delayed due to the in business equipment production in blackout last.week. Gmer7unent searibes Pnces tPyaar 9723rr ID y*W 4.54% June. The report will now be released M-year 99-4r to ymW 5 40% July's 74.5 capacity,utilization lew tomorrow•at 9:45 a.m.,EDT. -- el,catge as manufacturing asagerose - I�qouomists polled by.IFR'Bond- al Band Index 106N32-Up 17,r to 72.8%from a Tevised 74 2%the Data Americas have predicted that The Bona Buuy&s Totat$2.595 near,,dawn 5451.3 million previous month while mining usage. .the preliminary August figure will W-Wy va m swpty Competibves.M-5 mBhon,up$3.5 rn bon declined to 84.6%in July from a rise to 93.6 from July's final reading has or and) Negatided.i1.%8 bwan,down 5454.E maT6on downwardly revised 84.9%in June: of 90.9. Yahoo! News - Fed Puts Rates on Hold for Some Time Pagel of 3 "WAHot)�.News �; ' i News Home- Yahoo! - Helg RELIT StopSnoring ! CLICK HERE j, NOW! IL r r - r - r • r- � :. r - r r • � Welcome, saulcooper Personalize News Home Page Yahoo! News Thu,Aug 21,2003 Search News Stories - ro, Sear News Front Pale Top Stories - Reuters S ►Top Stories up Na Tonal Fed Puts Rates on Hold for Some Time ADVER' Tue Aug 12,4:05 PM ET GAdd Top Stories-Reuters to My Yahoo! -Crimes-and Trials , Most Popular - By Glenn Somerville Business Wprld WASHINGTON (Reuters)- Federal Reserve (news -web sites) policy- EntgdairLmen makers opted on Tuesday to keep U.S. interest rates at 45-year lows but ' 5-119d5 again warned about the risks of falling prices and said rates could stay low Technology for"a considerable period." QI r' Politics SNOB Science The central bank's policy-setting Federal Open Health Market Committee (news -web sites) left the bellwether federal funds rate at 1 percent, a Oddly Enough 1958 low hit after the Fed cut rates 13 times WEd since early 2001 to try to foster more vigorous Li tyle expansion. Local Comics Policy-makers repeated that a small risk of an News Photos Reuters Photo unwelcome fall in inflation exceeded chances of a sharp climb in prices and said their main Most Popular concern "for the foreseeable future"was the Weather �f potential for"undesirably low" inflation. ,. AudioNideo , Full Coverage "In these circumstances, the committee Do you t Lottery believes that policy accommodation can be other sySleep Crosswords 4. maintained for a considerable period,"the Fed AFP said in a post-meeting statement that clearly Depn News for Kids Go Head Slideshow:Greenspan& stated it will do its best to keep credit cheap Head U.S.Federal Reserve until growth perks up. welgi .� IPFull Coverage Poor Mo More about Analysts praised the Fed for being explicit Memory Federal Reserve about its policy intent, in contrast to the statement at the close of a two- -- _ day meeting on June 25 that created initial confusion about the extent of Related News Stories worry over falling prices. 6". • Fed Considered Bigger FATIGU ._ Rate Cut In Late June With recent signs the economic picture is improving, the central bank said Washington Post(Aug 15, upside and downside risks to sustainable growth were roughly equal. In 2003) May, the Fed statement began separating the outlook for growth and the outlook for prices. http://story.news.yahoo.com/news?tmpl=story&cid=564&ncid=564&e=3&u=/nm/200308... 8/21/2003 Yahoo! News -Fed Puts Rates on Hold for Some Time Page 2 of 3 law • Fed sets eye on fighting SPELL IT OUT Wd deflation Boston Globe (Aug 13,2003) "The Fed sounded just the right note,"said economist Parul Jain of Nomura Securities in New York. 'They do believe that economic growth is • Fed Puts Rates Hold firming...but labor market indicators are mixed." �+ for Some Time Reuters (Aug 12,2003) Bonds ticked higher at first on the implication that rates could stay low for Opinion&Editorials a long while but later shed the gains. But stocks strengthened as investors two • Hurrayl Prices going up bet that holding the line on interest rates enhanced profit prospects ahead. Abilene Reporter-News(Aug 20.2003) The vote to keep rates unchanged was unanimous. • Maybe the Market Is Economist Anthony Chan of Banc One Investment Advisors said the Fed Hearing Fed Loud and decision bolstered recovery hopes by indicating that policy-makers were � Clear Bloomberg.com(Aug prepared to nourish budding signs of growth with cheap credit as long as 12,2003) necessary. • Rate Rise Makes a Bogus Bogeyman for "The Fed's directive clearly provided some welcome relief as the Fed still Stock Market believes that the economy is still not running away from us," Chan said, Bloomberg.com(Aug 12, adding that financial markets"got themselves unnecessarily worried about 2003) a near or immediate tightening on the horizon." Feature Articles The revival from the 2001 slump so far has been a jobless one, a • Biz Buzz:The Fed's politically painful fact for the Bush administration. U.S.factories and tightrope act U.S.News s businesses have shed upward of two million jobs since President Bush World Report/Yahoo!News (news -web sites)took office in 2001. (Aug 12,2003) • How the Fed lost control POUR STIMULUS ON of the bond market CNN/Money(Aug 7,2003) Fed Chairman Alan Greenspan (news-web sites)and administration Related Web Sites officials, including Treasury Secretary John Snow, have said the combined stimulus from low interest rates and sweeping tax cuts should leave the • Federal Reserve Board economy poised for stronger second-half growth. • Interest Rates The Fed noted a pick-up in spending but was cautious about the job • U.S. Monetary Polio market outlook. An Introduction "The evidence accumulated over the inter-meeting period shows that News Resources spending is firming, although labor market indicators are mixed,"the FOMC said in its statement. ati Providers •AP "Business pricing power and increases in core consumer prices remain . Reuters muted," it added. �' • AFP • The New York Times The central bank last cut rates at the close of its meeting on June 25, the sole reduction this year. •wash i ngtonpost.com • USA TODAY The nation's gross domestic product grew at a slim 1.4 percent rate in U.S. News&World each of last year's final quarter and the first three months of this year, but • Report sped up moderately to a 2.4 percent clip in the second quarter. -.NPR The Fed said in its "beige book"summary of national economic conditions News Alerts on July 30 that momentum appeared to be building at the beginning of the Federal Reserve second half of the year. Even the sorely stressed manufacturing sector, hit httn:Hstorv.news.vahoo.com/news?tmnl=storv&cid=564&ncid=564&e=3&u=/mn/200308... 8/21/2003 Yahoo! News -Fed Puts Rates on Hold for Some Time Page 3 of 3 bw Federal Open Market by 2.6 million job losses since mid-2000, was perking up. Committee President Bush Analysts say it will take sustained growth of 3.5 percent or more to begin Alan Greenspan to make a substantial dent in unemployment. • Services Daily Emails ®Email Story Post/Read Mscls g Print Story Free News Alerts Ratings:Would you recommend this story? Not at all I - 2 - 3 - 4 - 5 Highly Avg Rating:4.01,113 votes m Prev. Story: Scans Show Why We Always Have Room for Chocolate(Reuters) Ma Next Story: Terrorism Top Security Threat in Iraq-U.S. General (Reuters) More Top Stories Stories O-W Israel Kills Hamas Leader, Militants Call Off Truce (Reuters) Hamas ends truce after top leader killed in Israeli air strike (AFP) Former Radical Granted Parole in'81 Killings (The New York Times) U.S. Renews Bid To Involve More Nations in Iraq (washingtonpost.com) 10 Commandments appeal fails (USA TODAY) Weekly Specials ADVERTISEMENT Sign-up to manage your State Farm®policies online today. bzi Serious Credit Problems? 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Questions or Comments Privacy Policy-Terms of Service-Copyright Policy-Ad Feedback and httD:Hstorv.news.vahoo.com/news?tmnl=story&cid=564&ncid=564&e=3&u=/nm/200308... 8/21/2003 tti�p1sa�s _� � �` �. G G �. �. � � Orange County Sanitation District Certificates of Participation.Series 2003 Comparison to MMD AAA Issuer Orange County Sanitation District Turlock Public Financing Authority Santa Cruz County RDA Amount $280.000.000 $48,240.000 $47.490.000 Type of Bonds Certificates of Participation Sewer Revenue Bonds Tax Allocation Refunding Bands Underlying Ratings(M/SBPIF) Aa3/AA1AA NR/A-/NR A2/A/NR Call Provision 8112013 @ 100 9/15/2013 @ 100 911/2013 @ 100 Type of Sale Competitive Competitive Competitive Winning TIC 5.1452% 4.88% 4.4933% Enhancement FGIC FGIC Ambac Underwriter Morgan Stanley Fidelity Capital Wachovia Bank Date of Sate MMD AAA 8112/2003 MMD AAA 8/122003 MMD AAA 8/122003 Yield to Yield to Spread to Yield to Yield to Spread to Yield to Yield to Spread to Maturity 81122003 Coupon Call Mat. MMD 8/122003 Coupon Call Mat. MMD 8/122003 Coupon Call Mat. MMD 2004 0.980% 0.980% 2.000% NRO NRO 0.980% 2.000% 1.089% 1.089% 10.9 2005 1.370% 1.370% 2.000% 1.400% 1.400% 3 1.370% 2.000% 1.400% 1.400% 3 2006 1.800% 1.800% 2.250% 2.000% 2.000% 20 1.800% 2.500% 2.000% 2.000% 20 2007 2.280% 2.280% 2.750% 2.350% 2.350% 7 2.280% 2.500% 2.350% 2.350% 7 2008 2.640% 2.640% 3.000% 2.750% 2.750% 11 2.640% 2.750% 2.750% 2.750%1 11 2009 2.980% 2.980% 3.500% 3.050% 3.050% 7 2.980% 3.000% 3.050% 3.050% 7 2010 3.330% 3.330% 3.750% 3.400% 3.400% 7 3.330% 3.375% 3.400% 3.400% 7 2011 3.590% 3.590% WA NRO NRO 3.590% 3.625% 3.700% 3.700% 11 2012 3.760% 3.760% 4.000% 3.900% 3.900% 14 3.760% 3.875% 3.900% 3.900% 14 2013 3.890% 3.890% N/A NRO NRO 3.890% 4.000% 4.000% 4.000% 11 2014 4.010% 1 4.010% 4.100% 4.150% 4.150% 14 4.010% 4.100% 4.150% 4.150% 14 2015 4.120% 4.120% 4.250% 4.300% 4.300% 18 4.120% 4.250% 4.300% 4.300%1 18 2016 4.230% 4.230% 4.300% 4.400% 4.400% 17 4.230% 4.300% 4.400% 4.400% 17 2017 4.340% 4.340% 4.400% 4.500% 4.500% 16 4.340% 4.400% 4.500% 4.500% 16 2018 4.440% 4.440% 4.500% 4.600% 4.600% 16 4A40% 4.500% 4.600% 4.600% 16 2019 4.540% 4.540% 1 5.000% 4.700% 4.786% 24.6 4.540% 1 4.600% 4.700% 4.700% 16 2020 4.630% 4.630% 5.000% 4.800% 4.863%1 23.3 4.630% 1 4.700% 4.800% 4.800% 17 2021 4.720% 5.250% 4.750% 4.913% 19.3 4.720% 5.000% 4.900% 4.934% 21A 4.720% 4.800% 4.900% 4.900% 18 2022 4.790% 5.000% 4.920% 4.948% 15.8 4.790% 5.000% 4.950% 4.968% 17.8 4.790% 4.900% 4.950% 4.950%1 16 2023 4.850% 5.000% 4.980% 4.987% 13.7 4.850% 5.000% 5.000% 5.000% 15 4.850% 5.000% 5.000% 5.000%1 15 2024 4.910% 5.000% 5.040% 5.040% 13 4.910% 5.000% 5.050% 5.050% 14 4.910% 5.000% 5.070% 5.070% 16 2025 4.940% 15.000% 5.070% 5.070% 13 4.940% 4.940% 2026 4.970% 5.000% 5.100% 5.100% 13 4.970% 5.000% 5.090% 5.090% 12 4.970% 2027 4.980% 5.250% 5.030% 5.124% 14.4 4.980% 4.980% 2028 4.990% 5.250% 5.040% 5.133% 14.3 4.990% 5.000% 5.120% 5.120% 13 4.990% 2029 5.000% 5.000% 5.000% 2030 5.000% 5.250% 5.050% 5.142% 14.2 5.000% 5.000% 2031 5.010% 5.010% 5.010% 2032 5.010% 5.010% 5.010% 2033 5.010% 5.000% 5.100%15.100% 9 1 5.010% 1 WA I NRO I NRO 1 5.010% Public Resources Advisory Group 8/12/2003 Orange County Sanitation District Certificates of Participation,Series 2003 Comparison to MMD AAA Issuer West Contra Costa USD San Diego Unified School District California Infrastructure and Economic Development Bank Amount $100,000.000 $316.280.000 $1.160.435,000 Type of Bonds General Obligation Bonds General Obligation Bonds Revenue Bonds Underlying Ratings(M/SBPIF) NR/A4A- Aa2/AA/NR Aa3/AA4AA Call Provision 8/1/2011 Q 101 7/1/2013 @ 100 7/1/2013 Q 100 Type of Sale Competitive Negotiated Negotiated Winning TIC 4.856% N/A WA Enhancement FSA FSA FSA(08-23),FGIC(24-29),Ambac(33-37) Underwriter Citlgroup Banc of America UBS Financial Services Date of Sale MMD AAA 8111/2003 MMD AAA 8f7/2003 MMD AAA 8/5/2003 Yield to Yield to Spread to Yield to Yield to Spread to Yield to Yield to Spread Maturity 811112003 Coupon Call Mat. MMD 8l7/2003 Coupon Call Mal. MMD 815/2003 Coupon Cull Mat. to MMD 2004 0.980% N/A NRO NRO 1.000% 1.000% 2005 1.370% WA NRO NRO 1.390% 1.450% 2006 1.820% NIA NRO NRO 1.880% 1.950% 2007 2.280% 5.000% 2.250% 2.250% -3 2.330% 2.420% 5.000% 2.650% 2.650% 23 2008 2.640% WA NRO NRO 2.680% 2.790% 2.900% 2.900% 2.900% 11 2009 2.980% N/A NRO NRO 3.010% 3.140% 5.000% 3.200% 3.200% 6 2010 3.330% N/A NRO NRO 3.360% 3.500% 5.000% 3.650% 3.650% 15 2011 3.690% N/A NRO NRO 3.610% 3.750% 5.000% 3.900% 3.900% 15 2012 3.760% 4.000% 3.830% 3.830% 7 3.780% 3.920% 4.100% 4.100% 4.100% 18 2013 3.890% 4.000% 3.960% 3.960% 7 3.910% 1 4.050% 4.200% 4.220% 4.220% 17 2014 4.010% 4.000% 4.080% 4.080% 7 4.030% 4.300% 4.320% 4.320% 29 4.170% 5.250% 4.310% 4.377% 20.7 2015 4.120% 4.100% 4.180% 4.180% 6 4.130% 5.250% 4.370% 4.426% 29.6 4.270% 5.250% 4.410% 4.519% 24.9 2016 4.230% 4.250% 4.280% 4.280% 5 4.230% 5.250% 4.470% 4.560% 33 4.370% 5,250% 4.600% 4.716% 34.6 2017 4.340% 5.000% 4.400% 4.542% 20.2 4.340% 5.250% 4.550% 4.663% 32.3 4A70% 5.250% 4.590% 4.735% 26.5 2018 4.440% 5.000% 4.490% 4.619% 17.9 4.440% 5.250% 4.620% 4.746% 30.6 4.560% 5.250% 4.660% 4.811% 25.1 2019 4.540% 5.000% 4.590% 4.695% 15.5 4.540% 5.250% 4.680% 4.813% 27.3 4.650% 1 5.250% 4.720% 4.872% 22.2 2020 4.630% 5.000% 4.660% 4.746°k 11.6 4.630% 5.250% 4.780% 4.903% 27.3 4.740% 5.250% 4.800% 4.941% 20.1 2021 4.720% 5.000% 4.750% 4.805% 8.5 4.710% 5.250% 4.860% 4.972% 26.2 4.820% 5.250% 4.870% 4.999% 17.9 2022 4.790% 5.000% 4.830% 4.854% 6.4 4.780% 5.250% 4.920% 5.023% 24.3 4.890% 5.000% 5.020% 5.020% 13 2023 4.850% 5.000% 4.900% 4.900% 5 4.840% 5.250% 4.970% 5.063% 22.3 4.940% 5.000% 5.050% 5.050% 11 2024 4.910% 5.000% 1 4.960% 4.960% 5 4.900% 5.250% 5.020% 5.100% 20 4.990% 5.000% 5.080% 5.080% 9 2025 4.940% 4.930% 5.020% 5.000% 5.120% 5.120% 10 2026 4.970% 5.000% 5.050% 5.050% 8 4.960% 5.000% 5.100% 5.100% 14 5.040% 5.000% 5.130% 5.130% 9 2027 4.980% 4.970% 5.050% 2028 4.990% 5.000% 5.080% 5.080% 9 4.980% 5.000% 5.110% 5.110% 13 5.060% 2029 5.000% 4.990% 5.070% 5.000% 5.160% 5.160% 9 2030 5.000% 4.990% 5.070% 2031 1 5.010% 5.000% 5.080% 2032 5.010% 5.000% 5.100% 5.100% 9 5.000% 5.080% 2033 5.010% 5.000% 5.080% 5.000% 5.180% 5.180% 10 Italicized Maturities are Uninsured Public Resources Advisory Group 8/12/2003 1 ! 1 1 ORANGE COUNTY SANITATION DISTRICT Certificates of Participation, Series 2003 Sale Comparisons - Comparison to Key Indices 6% 5% - 4% 3% 2% - 1% - - 0% V CO I- M M O — N CO V LO O r-- M M O N C'7 � LSD 0 ti M O O •- N (7 O O O O O O = = � = = r � = = N N N N N N N N N N co ch ch c*) O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N MMD AAA GO Treasury Yields Orange County Sanitation District Public Resources Advisory Group ORANGE COUNTY SANITATION DISTRICT Certificates of Participation, Series 2003 Sale Comparisons - Comparison to Key Indices 5.50% 5.25% - 5.00% 4.75% 4.50% N C7 d L0 co rl- 00 O O (N cY) N N N N N N N N N M fM M CM O O O O O O O O O O O O O N N N N N N N N N N N N N MMD AAA GO Treasury Yields Orange County Sanitation District Public Resources Advisory Group SECTION IV B a B Q I I I E I i B I I t I [ t g ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Certificates of Participation,Series 2003 (Fixed Rate Now Money Bonds) Sources and Uses SOURCES AND USES RELEVANT DATES SOURCES Dated Date 8/26/2003 Par Amount of Bonds $ 280,000,000.00 Delivery Date 8/26/2003 Net Original Issue Premium 0.00 First Interest Payment Date 2/1/2004 Accrued Interest 0.00 First Principal Payment Date 2/1/2021 Total Sources of Funds: $ 280,000,000.00 Final Principal Payment Date 2/1/2033 Call Date of New Bonds(Callable at Par) 8/1/2013 USES Fiscal Year(ending) 06/30 Deposit to Construction Fund $ 250,052,054.33 Deposit to Debt Service Reserve Fund 26.979.192.57 FINANCING RESULTS Bond Insurance(FGIC) 0.443% 1,241,700.00 Net Original Issue Discount 497,808.70 Arbitrage Yield 5.123220% Underwriters Discount 0,296% 829.244.40 True Interest Cost 5.155588% Costs of Issuance 0.143% 400,000.00 Weighted Average Maturity(Years)of Bonds 24.983 Accrued Interest 0.00 Contingency 0.00 Calculation of Reserve Fund Total Uses of Funds: $ 280.000.000.00 10%of Bond Proceeds $ 27,950,219.13 Maximum Annual Debt Service(MADS) 58,464,000.00 Original Issue Price 99.822211 125%of Average Annual Debt Service 26,979,192.57 Reserve Requirement(lessor of three) $ 26,979,192.57 Public Resources Advisory Group 8/12/2003 TOO PM C:IWINDOWSIDesktopuuty 2003 FRBs 030812.xls Page 1 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Certificates of Participation,Series 2003 (Fixed Rate New Money Bonds) Production:» $ 279.502,191.30 Pricing Report less Bond Insurance:- 1,241.700.00 Less Bid Amount:» 277,431,246.90 Underwriter's Discount:» $ 829,244.40 8/26/2003 Dated Date Sinking Funds and Principal Coupon Yield Price Bond Insurance Date Payments Principal N N M Production (per Bond) Bond Insurance Totals:» $ 280,000.000 $ 280.000,000 $ 279.502.191.30 $ 1,241,700.00 8/2612003 2/112005 $ $ - $ $ $ 2/1/2006 2/112007 211/2008 2/112009 2/1/2010 2/112011 2/112012 2/1/2013 2/112014 2/1/2015 2/1/2016 2/1/2017 2/1/2018 2/1/2019 2/1/2020 2/1/2021 4.495,000 4.495,000 5.250 4.750 103.918 4.671,114.10 4,4346 19,933.72 2/1/2022 16,100,000 15,100.000 5.000 4.920 100,618 15,193,318.00 4.4346 66,963.11 2/112023 15.805,000 15,805.000 5.000 4.980 100.151 15,828.865.55 4.4346 70,089.53 2/1/2024 16,640.000 16,640.000 5.000 5.040 99.489 16,554,969.60 4.4346 73.792.46 2/1/2025 17.425,000 17.425.000 5.000 5.070 99.087 17,265,909.75 4.4346 77.273.65 2/1/2026 18,350,000 18,350.000 5.000 5.100 98.669 18,105,761.50 4.4346 81.375.70 2/1/2027 19,265,000 19,265.000 5.250 5.030 101.699 19.692,312.35 4.4346 85,433.39 2/1/2028 20,235,000 20,235,000 5.250 5.040 101.621 20,563,009.35 4.4346 89,735.00 2/1/2029 21,255,000 5.250 5.050 101.542 4.4346 94,258.33 2/1/2030 23,250,000 44,505.000 5,250 5.050 101.542 45,191,267.10 4.4346 103,105.45 2/1/2031 25,575,000 5.000 5.100 98.480 - 4.4346 113,415.99 211/2032 26,925,000 5.000 5.100 98.480 4.4346 119,402.76 211/2033 55,680,000 108,180,000 5.000 5.100 98.480 106.535,664.00 4.4346 246,920.91 Public Resources Advisory Group 8/12/2003 7:00 PM C:IWINDOWSIDesktopUufy 2003 FRBs 030812.xts Page 2 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Certificates of Participation,Series 2003 (Fixed Rate New Money Bonds) Debt Service Schedule Dated Date 8/26/2003 Delivery Date 8/26/2003 Accrued Interest: $ 0.00 Coupon Yield Price Total Annual Date Principal (%) (%) (%) Production Interest Debt Service Debt Service Totals:» $ 280,000.000 $ 279.502 191.30 $ 355 210100.69 $ 635 210100.69 $ 635 210 100 69 08/26/03 02/01/04 $ 6,123,038.19 $ 6,123,038.19 $ 6,123,038.19 08/01/04 7,110,625.00 7,110,625.00 02/01/05 7,110,625.00 7,110,625.00 14,221,250.00 08/01/05 7,110,625.00 7,110,625.00 02/01/06 7,110,625.00 7,110,625.00 14,221,250.00 08/01/06 7,110,625.00 7,110,625.00 02/01/07 7,110,625.00 7,110,625.00 14,221,250.00 08/01/07 7,110,625.00 7,110,625.00 02/01/08 7,110,625.00 7,110,625.00 14,221,250.00 08/01/08 7,110,625.00 7,110,625.00 02/01/09 7,110,625.00 7,110,625.00 14,221,250.00 08101109 7,110,625.00 7,110,625.00 02101/10 7,110,625.00 7,110,625.00 14,221,250.00 08/01110 7,110,625.00 7,110,625.00 02/01111 7,110,625.00 7,110,625.00 14,221,250.00 08/01/11 7,110,625.00 7,110,625.00 02/01/12 7,110,625.00 7,110,625.00 14,221,250.00 08101/12 7,110,625.00 7,110,625.00 02101113 7.110.625.00 7,110,625.00 14,221,250.00 08/01/13 7,110,625.00 7,110,625.00 02101/14 7,110,625.00 7,110,625.00 14,221,250.00 08/01/14 7,110,625.00 7,110,625.00 02/01/15 7,110,625.00 7,110,625.00 14.221.250.00 08/01/15 7,110,625.00 7,110,625.00 02/01/16 7,110,625.00 7,110,625.00 14,221,250.00 08/01/16 7,110,625.00 7,110,625.00 02/01/17 7,110,625.00 7,110,625.00 14,221,250.00 08/01/17 7,110,625.00 7,110,625.00 02/01/18 7,110,625.00 7,110,625.00 14,221,250.00 08/01/18 7,110,625.00 7,110,625.00 02/01/19 7,110,625.00 7,110,625.00 14,221,250.00 08/01/19 7,110,625.00 7,110,625.00 02/01/20 7,110,625.00 7,110,625.00 14,221,250.00 08/01/20 7,110,625.00 7,110,625.00 02/01/21 $ 4,495,000 5.250 4.750 103.918 $ 4,671,114.10 7,110,625.00 11,605,625.00 18,716,250.00 08/01/21 6,992,631.25 6,992,631.25 02/01/22 15,100,000 5.000 4.920 100.618 15,193,318.00 6,992,631.25 22,092,631.25 29,085,262.50 08/01/22 6,615,131.25 6,615,131.25 02/01/23 15,805,000 5.000 4.980 100.151 15,828,865.55 6,615,131.25 22,420,131.25 29,035,262.50 08/01/23 6,220,006.25 6.220.006.25 02/01/24 16,640.000 5.000 5.040 99.489 16,554,969.60 6.220.006.25 22,860,006.25 29,080,012.50 08/01124 5,804,006.25 5,804,006.25 02/01/26 17,425.000 5.000 5.070 99.087 17,265,909.75 5,804,C06.25 23,229,006.25 29,033,012.50 08/01/25 5,368,381.25 5,368,381.25 02/01/26 18.350,000 5.000 5.100 98.669 18,105,761.50 5,368,381.25 23,718,381.25 29,086,762.50 08101/26 4,909,631.25 4,909,631.25 Public Resources Advisory Group 8112/2003 7:00 PM C:IWINDOWSIDesktopUuly 2003 FRBs 030812.xts Page 3 Q t [ [ B i I I I I I [ Q ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Certificates of Participation,Series 2003 (Fixed Rate New Money Bonds) Debt Service Schedule Dated Date 8/26/2003 Delivery Date 8/26/2003 Accrued Interest: $ 0.00 Coupon Yield Price Total Annual Date Principal N N M Production Interest Debt Service Debt Service Totals:» $ 280.000,000 $ 279,502,191.30 $ 355,210,100.69 $ 635,210,100.69 $ 635,210,100.69 08/26103 02101127 19,265.000 5.250 5.030 101.699 19,592,312.35 4.909.631.25 24,174,631.25 29,084,262.50 08/01127 4,403,925.00 4,403,925.00 02/01/28 20,235,000 5.250 5.040 101.621 20,563,009.35 4,403,925.00 24.638.925.00 29,042,850.00 08101/28 3,872,756.25 3,872,756.25 02/01/29 21,255,000 5.250 5.050 101.542 21,582,752.10 3,872,756.25 25,127,756.25 29,000,512.50 08/01/29 3,314,812.50 3,314,812.50 02/01/30 23,250.000 5.250 5.050 101.542 23,608,515.00 3,314,812.50 26,564,812.50 29.879.625.00 08101/30 2,704,500.00 2,704,500.00 02101/31 25,575,000 5.000 5.100 98.480 25,186,260.00 2,704,500.00 28,279,500.00 30,984,000.00 08/01/31 2,065,125.00 2,065,125.00 02/01/32 26,925,000 5.000 5.100 98.480 26,515,740.00 2,065,125.00 28,990,125.00 31,055,250.00 08/01/32 1,392,000.00 1,392,000.00 02101/33 55,680,000 5.000 5,100 98.480 54,833,664.00 1,392,000.00 57,072,000.00 58,464,000.00 08/01/33 02/01/34 PuNic Resources Advisory Group 8/12/2003 7:00 PM C:IWINDOWS1DesktopUuty 2003 FRBs 030812.xis Page 4 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Certificates of Participation,Series 2003 (Fixed Rate New Money Bonds) Yield Computations ParAmount: $ 280,000,000.00 Par Amount: $ 280,000,000.00 Accrued Interest: 0.00 Accrued Interest: 0.00 Net Original Issue Discount: 497,808.70 Net Original Issue Discount: 497,808.70 Underwriter's Discount: 0.00 Underwriter's Discount: 829,244.40 Costs of Issuance: 0.00 Costs of Issuance: 400,000.00 Bond Insurance Premium: 1,241,700.00 Bond Insurance Premium: 1.241.700.00 Arbitrage Yield Target: $ 278,260,491.30 True Interest Cost Target: $ 277,031,246.90 Arbitrage Yield: 5.123220% True Interest Cost: 5.155588% Cash Flow Adjusted Present Value Present Present Value Present Cash for Safe Harbor Cash Flow @ Value Cash Cash Flow @ Value Date Flow (2021 maturity) 5.123220% Factor Flow 5.155588% Factor Totals:» $ 635,210,100.69 $ 633,440,194.44 $ 278,260,491.30 $ 635.210.100.69 $ 277,031,246.90 08/26/03 1.00000 1.00000 02/01/04 $ 6,123,038.19 $ 6,123,038.19 $ 5,991,117.11 0.97845 $ 6.123,038.19 $ 5,990,303.15 0.97832 08/01/04 7,110,625.00 7,110,625.00 6,783,655.50 0.95402 7.110,625.00 6.781,663.75 0.95374 02/01/05 7,110,625.00 7,110,625.00 6,614,224.84 0.93019 7,i10,625.00 6,611,239.60 0.92977 08/01/05 7,110.625.00 7,110,625.00 6.449,025.93 0.90696 7,110,625.00 6,445,098.23 0.90640 02101106 7,110,625.00 7,110,625.00 6,287,953.08 0,88430 7,110,625.00 6,283,132.02 0.88363 08/01/06 7,110,625.00 7,110,625.00 6,130,903.24 0.86222 7.110,625.00 6.125,236.05 0.86142 02101/07 7,110.625.00 7.110.625.00 5,977,775.92 0.84068 7.110,625.00 5.971,308.02 0.83977 08/01/07 7,110,625.00 7.110,625.00 5,828,473.15 0.81969 7.110,625.00 5,821,248.22 0.81867 02/01/08 7.110.625.00 7.110,625.00 5,682,899.42 0.79921 7,110,625.00 5,674,959.45 0.79810 08/01/08 7,110,625.00 7,110,625.00 5,540,961.58 0.77925 7,110,625.00 5.532,346.94 0.77804 02/01/09 7.110.625.00 7,110,625.00 5,402.568.82 0.75979 7,110,625.00 5,393,318.29 0.75849 08/01/09 7,110.625.00 7,110,625.00 5.267,632.61 0.74081 7,110,625.00 5,257.783.46 0.73943 02/01/10 7.110.625.00 7,110,625.00 5,136.066.60 0.72231 7,110,625.00 5,125.654.63 0.72084 08/01/10 7,110,625.00 7,110,625.00 5.007,786.62 0.70427 7,110,625.00 4,996,846.23 0.70273 02/01111 7,110,625.00 7,110,625.00 4.882,710.61 0.68668 7,110,625.00 4,871,274.79 0.68507 08101/11 7,110.625.00 7,110.625.00 4.760.758.53 0.66953 7,110,625.00 4,748,858.98 0.66785 02/01112 7,110,625.00 7,110,625.00 4,641.852.36 0.65281 7,110,625.00 4.629,519.50 0.65107 08/01/12 7,110,625.00 7,110,625.00 4,525,916.04 0.63650 7.110,625.00 4,513,179.03 0.63471 02101/13 7,110,625.00 7,110.625.00 4,412,876.37 0.62060 7,110,625.00 4,399,762.22 0.61876 08101/13 7,110,625.00 11.605.625.00 7,022,594.46 0.60510 7,110.625.00 4,289,195.59 0.60321 02/01/14 7,110,625.00 6.992,631.25 4,125,578.47 0.58999 7,110,625.00 4.181,407.51 0.58805 08/01114 7,110.625.00 6,992.631.25 4,022,536.75 0.57525 7,110,625.00 4.076,328.16 0.57327 02/01/15 7.110.625.00 6,992,631.25 3,922,068.64 0.56089 7,110,625.00 3.973,889.47 0.55887 08/01/15 7,110,625.00 6,992,631.25 3.824,109.85 0.54688 7.110,625.00 3,874.025.08 0.54482 02/01/16 7.110.625.00 6.992,631.25 3,728.597.71 0.53322 7,110,625.00 3,776,670.29 0.53113 08/01/16 7,110,625.00 6.992,631.25 3,635,471.11 0,51990 7,110,625.00 3,681,762.05 0.51778 02/01/17 7.110,625.00 6.992,631.25 3,544,670.47 0.50692 7,110.625.00 3,589.238.86 0.50477 08/01117 7,110,625.00 6,992,631.25 3,456,137.69 0.49425 7,110,625.00 3,499.040.79 0.49209 02/01/18 7,110,625.00 6.992,631.25 3.369,816.14 0.48191 7,110,625.00 3.411,109.41 0.47972 08101/18 7,110,625.00 6,992.631.25 3,285.650.58 0.46987 7,110,625.00 3,325,387.76 0.46766 02/01/19 7,110,625.00 6,992,631.25 3,203,587.16 0.45814 7,110,625.00 3,241,820.31 0.45591 08/01119 7,110.625.00 6.992,631.25 3,123,573.38 0.44669 7,110,625.00 3,160,352.91 0.44446 02101/20 7,110,625.00 6.992,631.25 3.045.558.06 0.43554 7,110,625.00 3,080,932.81 0.43329 08101/20 7,110,625.00 6.992.631.25 2,969,491.26 0.42466 7.110,625.00 3.003,508.54 0.42240 02/01/21 11,605,625.00 6,992,631.25 2,895,324.34 0.41405 11.605.625.00 4,778,991.67 0.41178 08/01/21 6,992,631.25 6,992.631.25 2,823.009.83 0.40371 6.992,631.25 2,807.081.43 0.40143 02/01122 22.092.631.25 22.092,631.25 8.696,297.26 0.39363 22,092,631.25 8,645.865.45 0.39135 08/01122 6,615,131.25 6,615,131.25 2.538,870.61 0.38380 6,615.131.25 2.523.748.88 0.38151 Public Resources Advisory Grasp 8/12/2003 7:00 PM C:IWINDOWSIDesktopUuly 2D03 FRBs 030812.x1s Page 5 Q t ' [ [ I i t t [ t t e t Q [ Q ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Certificates of Participation,Series 2003 (Fixed Rate New Money Bonds) Yield Computations Par Amount: $ 280,000,000.00 Par Amount: $ 280,000.000.00 Accrued Interest: 0.00 Accrued Interest: 0.00 Net Original Issue Discount: 497,808.70 Net Original Issue Discount: 497,808.70 Underwriter's Discount: 0.00 Underwriter's Discount: 829,244.40 Costs of Issuance: 0.00 Costs of Issuance: 400,000.00 Bond Insurance Premium: 1,241,700.00 Bond Insurance Premium: 1,241.700.00 Arbitrage Yield Target: $ 278,260,491.30 True Interest Cost Target: $ 277,031,246.90 Arbitrage Yield: 5.123220% True Interest Cost: 5.155588% Cash Flow Adjusted Present Value Present Present Value Present Cash for Safe Harbor Cash Flow® Value Cash Cash Flow Q Value Date Flow (2021 maturity) 5.123220% Factor Flow 5.155588% Factor Totals:» $ 635.210,100.69 $ 633,440,194.44 $ 278,260,491.30 $ 635.210,100.69 $ 277,031,246.90 02/01/23 22,420,131.25 22,420,131.25 8,389,873.68 0.37421 22,420,131.25 8.338,587.08 0.37192 08/01/23 6,220,006.25 6,220,006.25 2,269,463.81 0.36487 6,220,006.25 2.255,234.90 0.36258 02/01/24 22.880,006.25 22,860,006.25 8,132,497.80 0.35575 22,860,006.25 8.080.234.25 0.35347 08/01/24 5,804,006.25 5,804,006.25 2,013,217.28 0.34687 5,804,006.25 1.999,963.74 0.34458 02/01/25 23.229,006.25 23,229,006.25 7,856,128.51 0.33820 23,229,006.25 7,803.178.22 0.33592 08/01/25 5,368.381.25 5,368,381.25 1,770,257.60 0.32976 5,368,361.25 1,758,048.65 0.32748 02101/26 23,718,381.25 23,718,381.25 7,625,939.09 0,32152 23,718,381.25 7,572,150.36 0.31925 08/01126 4,909.631.25 4,909,631.25 1,539,119.46 0.31349 4,909.631.25 1.528,022.34 0.31123 02101127 24.174,631.25 24,174,631.25 7,389.218.07 0.30566 24,174,631.25 7,334,784,03 0.30341 08101/27 4,403,925.00 4,403,925.00 1,312,483.07 0.29803 4,403,925.00 1,302,608.87 0.29578 02/01/28 24,638,925.00 24,638,925.00 7,159,632.31 0.29058 24,638.925.00 7,104,647.20 0.28835 08/01/28 3,872,756.25 3,872.756.25 1.097.246.73 0.28332 3.872,756.25 1.088,648.23 0.28110 02/01/29 25,127,756.25 25,127,756.25 6,941,494.96 0.27625 25,127,756.25 6,886,011.76 0.27404 08101/29 3,314.812.50 3,314,812.50 892,839.59 0.26935 3,314.812.50 885,563.41 0.26715 02/01/30 26,564,812.50 26,564,812.50 6.976.480.68 0.26262 26,564,812.50 6,918,534.22 0.26044 08/01/30 2,704,500.00 2,704.500.00 692,519.16 0.25606 2,704,500.00 686,658.77 0,25389 02/01/31 28,279,500.00 28,279,500.00 7,060,439.01 0.24967 28,279,500.00 6,999,686.00 0.24751 08/01/31 2,065,125.00 2,065,125.00 502,714.59 0.24343 2,065,125.00 498,303.13 0.24129 02/01/32 28.990,125.00 28,990.125.00 6,880,823.30 0.23735 28,990,125.00 6,819,366.06 0.23523 08/01/32 1,392,000.00 1,392,000.00 322.140.05 0.23142 1,392,000.00 319,212.43 0.22932 02/01/33 57,072,000.00 57,072,000.00 12,877,861.44 0.22564 57,072,000.00 12,758,813.71 0.22356 Public Resources Advisory Group 8/12t2003 7:00 PM C:IWINDOWS\DesktopUuly 2003 FRBs 030812.xls Page 6 ORANGE COUNTY SANITATION DISTRICT 10%of Par.» $ 27,950,219.13 Certificates of Partictpatlon,Series 2003 Max Ann DS:>> 58,464,000.00 (Fixed Rate Now Money Bonds) 125%Avg Ann DS:» 26,979,192.57 Debt Service Reserve Fund Reserve Req:» $ 26,979,192.57 Reserve Fund Reserve Fund Total Reserve 2003 Gross 2003 Net Date Principal Interest @ 5.123220% Cash Flow Debt Service Debt Service Totals:— $ 26.979.192.57 $ 40,679,016.89 $ 67.658.209.46 $ 635,210,100.69 $ 567,551,891.23 08/26/03 02/01/04 $ 595,115.39 $ 595,115.39 $ 6,123,038.19 $ 5,527,922.80 08/01/04 691.101.75 691.101.75 7,110,625.00 6,419,523.25 02/01/05 691.101.75 691.101.75 7,110,625.00 6,419,523.25 08101/05 691,101.75 691.101.75 7,110,625.00 6,419,523.25 02/01/06 691,101.75 691,101.75 7,110,625.00 6,419,523.25 08/01/06 691,101.75 691.101.75 7,110,625.00 6,419,523.25 02/01/07 691,101.75 691.101.75 7,110,625.00 6,419,523.25 08/01/07 691,101.75 691,101.75 7,110,625.00 6,419,523.25 02/01/08 691,101.75 691,101.75 7,110,625.00 6,419,523.25 08/01/08 691.101.75 691.101.75 7,110,625.00 6,419,523.25 02/01/09 691,101.75 691.101.75 7,110,625.00 6,419,523.25 08101/09 691,101.75 691,101.75 7,110,625.00 6,419,523.25 02/01/10 691.101.75 691,101.75 7.110.625.00 6,419,523.25 08101/10 691,101.75 691,101.75 7.110.625.00 6,419,523.25 02/01111 691,101.75 691,101.75 7,110,625.00 6,419,523.25 08/01/11 691,101.75 691,101.75 7,110,625.00 6,419,523.25 02/01/12 691,101.75 691.101.75 7,110,625.00 6,419,523.25 08/01/12 691I J01.75 691,101.75 7,110,625.00 6,419,523.25 02/01/13 691,101.75 691.101.75 7,110,625.00 6,419,523.25 08101/13 691,101.75 691,101.75 7,110,625.00 6,419,523.25 02/01/14 691.101.75 691.101.75 7,110,625.00 6,419,523.25 08/01/14 691.101.75 691.101.75 7,110,625.00 6,419,523.25 02/01/15 691.101.75 691.101.75 7,110,625.00 6,419,523.25 08/01/15 691,101.75 691,101.75 7,110,625.00 6,419,523.25 02/01/16 691.101.75 691.101.75 7,110,625.00 6,419,523.25 08/01/16 691,101.75 691.101.75 7,110,625.00 6,419,523.25 02101/17 691,101.75 691.101.75 7,110,625.00 6,419,523.25 08/01/17 691,101.75 691,101.75 7,110,625.00 6,419,523.25 02/01/18 691.101.75 691,101.75 7,110,625.00 6,419,523.25 08/01/18 691,101.75 691,101.75 7,110,625.00 6,419,523.25 02/01/19 691,101.75 691,101.75 7,110,625.00 6,419,523.25 08/01/19 691.101.75 691,101.75 7,110,625.00 6,419,523.25 02/01/20 691,101.75 691.101.75 7,110,625.00 6,419,523.25 08/01/20 691,101.75 691,101.75 7,110,625.00 6,419,523.25 02/01/21 691.101.75 691,101.75 11,605,625.00 10.914.523.25 08101/21 691,101.75 691,101.75 6,992,631.25 6,301,529.50 02/01122 691.101.75 691,101.75 22,092,631.25 21,401,529.50 08/01/22 691,101.75 691,101.75 6.615.131.25 5,924,029.50 02/01/23 691,101.75 691.101.75 22,420,131.25 21,729,029.50 08/01/23 691,101.75 691,101.75 6,220,006.25 5,528,904.50 02/01/24 691,101.75 691,101.75 22,860,006.25 22,168,904.50 08101/24 691,101.75 691.101.75 5.804.006.25 5,112,904.50 02101/25 691,101.75 691.101.75 23,229,006.25 22,537,904.50 08/01/25 691,101.75 691,101.75 5,368,381.25 4,677,279.50 02/01126 691,101.75 691,101.75 23,718,381.25 23,027,279.50 08101/26 691,101.75 691,101.75 4,909,631.25 4,218,529.50 Public Resources Advisory Group 8/1212003 7:00 PM C:IWINDOWS1DesklopVuly 2003 FRB3 030B12.xls Page 7 ORANGE COUNTY SANITATION DISTRICT 10%of Par:>> $ 27,950,219.13 Cortiflcates of Participation,Series 2003 Max Ann DS:» 58,464,000.00 (Fixed Rate New Money Bonds) 125%Avg Ann DS:>> 26,979,192.57 Debt Service Reserve Fund Reserve Req:>> $ 26,979,192.57 Reserve Fund Reserve Fund Total Reserve 2003 Gross 2003 Net Dale Principal Interest @ 5.123220% Cash Flow Debt Service Debt Service Totals:>> $ 26,979,192.57 $ 40,679,016.89 $ 67,658,209.46 $ 635,210,100.69 $ 567,551,891.23 08/26/03 02/01/27 691.101.75 691,101.75 24,174,631.25 23,483,529.50 08101/27 691,101.75 691,101.75 4,403,925.00 3,712,823.25 02/01128 691.101.75 691,101.75 24,638,925.00 23,947,823.25 08/01128 691,101.75 691,101.75 3,872,756.25 3,181,654.50 02/01/29 691,101.75 691,101.75 25,127,756.25 24,436,654.50 08/01129 691,101.75 691.101.75 3,314,812.50 2,623,710.75 02/01130 691.101.75 691,101.75 26,564,812.50 25,873,710.75 08/01130 691.101.75 691.101.75 2,704,500.00 2,013,398.25 02/01131 691,101.75 691,101.75 28,279,500.00 27,588,398.25 08/01/31 691,101.75 691,101.75 2,065,125.00 1,374,023.25 02/01/32 691,101.75 691,101.75 28,990,125.00 28,299,023.25 08/01132 691,101.75 691.101.75 1,392,000.00 700.898.25 02/01/33 26,979,192.57 691,101.75 27,670,294.32 57,072,000.00 29,401,705.68 Public Resources Advisory Group 8/1212003 7:00 PM C:\WINDOWSIDesktopUuly 2003 FRBs 030812.xis Page 8 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Certificates of Participation,Series 2003 (Fixed Rate New Money Bonds) Aggregate Net Debt Service Schedule 2003 2003 2003 Existing COPs Existing COPs Total Gross Total Annual Gross Reserve Fund Total Net Total Annual Net Dale Principal Interest Reserve Principal Interest Debt Service Debt Service Cash Flow Debt Service Debt Service Totals:» $ 280,000,000 $ 355.210,101 $ 67,658,209 $ 364,975.000 $ 150,869,750 $ 1.151,074,851 $ 1,151,074,851 $ 54.690,625 $ 1,028,726,017 $ 1,028,726,017 08/26/03 08/01/03 $ 11,610.000 $ 7,485.450 $ 19,095,450 $ 755,835 $ 18.339.615 02/01/04 $ 6,123,038 $ 595,115 7,277.887 13.400,925 $ 32,496,375 755,835 12.049,975 $ 30,389.590 08/01/04 $ 7.110,625 691,102 12,040.000 7.232,548 26,383,173 755,835 24,936,236 02/01/05 7,110,625 691,102 6,992,792 14,103,417 40,486,590 755,835 12,656,480 37,592,716 08101105 7,110,625 691,102 12,755.000 6,948,542 26,814.167 755,835 25,367,231 02101/06 7,110,625 691.102 6,680,602 13,791,227 40,605,394 755,835 12,344.290 37,711.521 08/01/06 7,110,625 691,102 13,465,000 6,627,658 27,203,283 755,835 25,756,346 02101/07 7,110,625 691.102 6,341,039 13.451.664 40,654,947 755,835 12,004,727 37.761.073 08101/07 7.110,625 691,102 14,265,000 6,288,309 27,663,934 755,835 26,216,997 02/01/08 7,110,625 691,102 5,980,513 13.091,138 40,755,072 755,835 11,644,201 37,861,198 08/01/08 7,110.625 691,102 15,060,000 5,936,797 28,107.422 755,835 26,660,486 02/01/09 7,110.625 691,102 5,563,669 12,674,294 40,781.716 755.835 11,227.357 37,887,843 08/01/09 7,110,625 691,102 16,110,000 5,520,131 28,740,756 755,835 27,293,819 02/01/10 7.110.625 691.102 5,136,354 12,246,979 40,987,735 755,835 10,800,042 38,093.861 08/01/10 7.110.625 691.102 17.065,000 5,084.291 29,259,916 755.835 27.812,979 02/01/11 7,110.625 691,102 4,673,772 11,784,397 41,044,314 755,835 10,337,460 38,150,440 08/01/11 7,110,625 691,102 17,595,000 4,621,950 29,327,575 755,835 27,880,638 02101/12 7,110,625 691,102 4,326,061 11,436,686 40.764,261 755,835 9,989,749 37,870,387 08101112 7,110,625 691.102 18.470,000 4,285.658 29,866.283 755,835 28,419.346 02/01/13 7,110,625 691,102 3.935,321 11,045,946 40,912,229 755,835 9,599,009 38,018,355 08/01/13 7,110,625 691,102 33,540,000 3,897,431 44,548,056 13.172,835 30,684,119 02/01/14 7,110,625 691,102 3,164,378 10,275,003 54,823,059 337.542 9,246,359 39,930,478 08/01/14 7,110,625 691,102 20,300,000 3.122,412 30,533.037 337.542 29,504,394 02/01/15 7,110.625 691I J02 2,779,176 9.889,801 40,422,839 337,542 8,861,158 38,365,551 08/01/15 7.110,625 691,102 21,100,000 2,740,444 30,951.069 337,542 29,922,425 02101/16 7,110,625 691.102 2,378,302 9,488.927 40,439,995 337,542 8,460,283 38,382,708 08/01/16 7,110,625 691.102 26.600.000 2.348,839 36.059.464 5,062.542 30,305,821 02/01/17 7,110,625 691,102 1,878,962 8,989,587 45.049,051 209,468 8.089.017 38.394,837 08/01/17 7,110,625 691.102 23,100.000 1.853,390 32.064,015 209,468 31.163,445 02/01/18 7,110,625 691,102 1,505,649 8,616.274 40,680,290 209,468 7.715.704 38.879,150 08/01/18 7,110,625 691,102 24,000,000 1,481,101 32.591,726 209,468 31.691,156 02/01/19 7,110,625 691,102 1,112,444 8,223.069 40,814,795 209,468 7.322,499 39,013,654 08/01/19 7.110,625 691.102 25.000.000 1.094.306 33,204,931 209,468 32,304,361 02/01/20 7,110,625 691,102 702,855 7,813,480 41,018,411 209,468 6,912,910 39,217,271 08/01120 7.110,625 691,102 26.000.000 693,316 33,803,941 14,695,988 18,416,851 02/01/21 4,495,000 7.110,625 691.102 276.126 11.881,751 45,685,691 34,181 11.156,468 29,573,318 08/01/21 6,992,631 691,102 1,400.000 272,368 8,664,999 34,181 7,939,716 02/01/22 15,100.000 6,992.631 691,102 253,945 22,346,576 31.011.576 34,181 21.621,293 29,561,009 08/01/22 6.615,131 691,102 1,500,000 249.805 8,364.936 34,181 7,639.653 02/01/23 15.805,000 6,615,131 691,102 229.370 22,649.501 31,014,437 34,181 21.924,218 29,563,871 08/01/23 6,220.006 691,102 1,500.000 225.630 7,945,636 34,181 7.220.353 02/01/24 16,640,000 6,220.006 691,102 204,795 23,064,801 31,010.437 34,181 22,339,518 29.559.871 08/01/24 5,804,006 691,102 1.600,000 202,015 7,606,021 34,181 6,880,738 02/01/25 17.425,000 5,804.006 691,102 178.093 23.407.099 31,013,120 34,181 22,681.816 29,562.554 08/01/25 5.368,381 691.102 1,600.000 175,669 7,144.050 34,181 6,418,767 02101/26 18.350.000 5.368.381 691,102 152.367 23,870,748 31,014,799 34.181 23.145.465 29,564.233 Pubxic Resources Advisory Group 8/1212003 7:00 PM C:IWINDOWS%DesktopUuly 2003 FRBs 030812.xls Page 9 E [ I [ I I I I I I I I [ [ I I [ I [ ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Certificates of Participation,Series 2003 (Fixed Rate New Money Bonds) Aggregate Net Debt Service Schedule 2003 2003 2003 Existing COPs Existing COPs Total Gross Total Annual Gross Reserve Fund Total Net Total Annual Net _ Date Principal Interest Reserve Principal Interest Debt Service Debt Service Cash Flow Debt Service Debt Service Totals:» $ 280,000,000 $ 355,210,101 $ 67,658,209 $ 364,975,000 $ 150.889,750 $ 1,151,074,851 $ 1.151,074,851 $ 54,690,625 $ 1,028,726,017 $ 1,028,726.017 08/26/03 08/01/26 4,909,631 691,102 1.700,000 149,883 6,759,514 34,181 6,034.231 02/01/27 19,265,000 4,909,631 691,102 124,515 24.299,146 31.058.660 34,181 23.573.863 29.608,094 08/01/27 4,403,925 691.102 1,800,000 122,485 6,326.410 34,181 5.601,127 02/01/28 20,235,000 4,403,925 691,102 95,025 24,733,950 31.060.360 34,181 24,008,667 29.609,793 08/01/28 3,872,756 691,102 1,900,000 93,735 5,866,491 34,181 5,141,208 02/01/29 21,255,000 3.872.756 691.102 63,721 25.191,478 31,057,969 34,181 24,466,194 29,607.403 08/01/29 3,314.813 691,102 1,900,000 62,654 5,277,667 859.181 3,727,383 02/01/30 23,250,000 3,314.813 691,102 32,767 26.597,580 31,875,246 24,199 25.882.279 29,609,662 08/01/30 2.704,500 691,102 2,000.000 32,233 4,736,733 2,024,106 2,021,525 02/01/31 25,575,000 2,704.500 691,102 28,279,500 33,016,233 27,588,398 29.609,923 08/01/31 2.065.125 691.102 2,065,125 1.374,023 02/01132 26.925.000 2,065,125 691.102 28,990,125 31,055,250 28,299,023 29,673.047 08/01/32 1,392,000 691,102 1,392,000 700,898 02/01/33 55.680.000 1,392,000 27.670.294 57,072,000 58,464,000 29,401,706 30,102,604 08/01/33 02/01/34 Public Resources Advisory Group 8/12/2003 7:00 PM C:IWINDOWS1DesktopVuly 2003 FRBs 030812.xls Page 10 I [ I I [ i I I I I i I K I [ [ I [ ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Orange County Sanitation District Reserve Size of$12,417,000 Refunding Certificates of Participation Series 1992-Swapped Debt Service $1,099.500 @ 3,52%and$11.317.500 @ 7.05% Gross Gross Fiscal Year Debt Fiscal Year DSRF Net Fiscal Year Date Principal Coupon Interest Interest Service Debt Service Cash Flow Debt Service Net Debt Service Totals:» $ 113,175,000.00 $ 39,427,061.25 $ 39,427,061.25 $ 152,602,061.25 $ 152,602,061.25 $ (21,201,154.58) $ 131,400,906.68 $ 131,400,906.68 08/26/2003 08/01/2003 $ 6,210,000.00 5.550% $ 3,140,606.25 $ 9,350,606.25 $ (418,293.08) $ 8,932,313.18 02/01/2004 2,966,278.75 $ 6,108,885.00 2,968,278.75 $ 12.318.885.00 (418,293.08) 2,549,985.68 $ 11,482,298.85 08/01/2004 6.690.000.00 5.550% 2,968,278.75 9,658,278.75 (418,293.08) 9,239,985.68 02/01/2005 2,782,631.25 5,750,910.00 2,782,631.25 12.440.910.00 (418.293.08) 2,364,338.18 11.604.323.85 08/0112005 7,155,000.00 5.550% 2,782,631.25 9,937,631.25 (418,293.08) 9.519.338.18 02/0112006 2,584,080.00 5,366,711.25 2,584,080.00 12,521,711.25 (418.293.08) 2,165,786.93 11,685,125.10 08/01/2006 7,615,000.00 5.550% 2,584,080.00 10,199,080.00 (418,293.08) 9,780,786.93 02/01/2007 2,372,763.75 4,956,843.75 2,372,763.75 12.571.843.75 (418,293.08) 1,954,470.68 11,735,257.60 08/01/2007 8,165,000.00 5.550% 2,372,763.75 10,537,763.75 (418,293.08) 10,119,470.68 02/01/2008 2,146,185.00 4,518,948.75 2,146,185.00 12,683,948.75 (418,293.08) 1,727,891.93 11,847,362.60 08101/2008 14,110,000.00 5.550% 2,146,185.00 16,256,185.00 (418,293.08) 15,837,891.93 02/01/2009 1,754,632.50 3,900,817.50 1,754,632.50 18,010,817.50 (418,293.08) 1,336,339A3 17,174,231.35 08/01/2009 15,060,000.00 5.550% 1,754,632.50 16,814,632.50 (418,293.08) 16,396,339.43 02/01/2010 1,336,717.50 3,091,350.00 1,336,717.50 18,151,350.00 (418,293.08) 918.424.43 17,314,763.85 08101/2010 16,015,000.00 5.550% 1,336,717.50 17,351,717.50 (418.293.08) 16,933,424.43 02/01/2011 892,301.25 2,229,018.75 892,301.25 18,244,018.75 (418.293.08) 474,008.18 17,407,432.60 08101/2011 5.145.000.00 5.550% 892,301.25 6,037,301.25 (418,293.08) 5,619,008.18 02/01/2012 749,527.50 1,641,828.75 749,527.50 6,786,828.75 (418,293.08) 331.234.43 5,950,242.60 08/01/2012 6,970,000.00 5.550% 749,527.50 7,719,527.50 (418,293.08) 7,301,234.43 02/01/2013 556,110.00 1,305,637.50 556,110.00 8,275,637.50 (418,293.08) 137,816.93 7,439,051.35 08/0112013 20,040,000.00 5.550% 556,110.00 20,596,110.00 (12,835,293.08) 7,760,616.93 02/01/2014 556,110.00 20,596,110.00 7.760.816.93 Public Resources Advisory Group 8/12/2003 7:00 PM C:IWINDOWS1DesktopUuly 2003 FRBs 030812.xls Page 11 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Orange County Sanitation District Reserve Size of$4,725,000 Refunding Certificates of Participation Series 1993-Swapped Debt Service $400.000 Q 1.00%and$4,325,000 Q 5.83% Gross Gross Fiscal Year Debt Fiscal Year DSRF Net Fiscal Year Date Principal Coupon interest Interest Service Debt Service Cash Flow Debt Service Net Debt Service Totals:» $ 42,900,000.00 $ 17,658,600.00 $ 17,658,600.00 $ 60,558,600.00 $ 60,558,600.00 $ (8,182,991.25) $ 52,375,608.75 $ 52,375,608.75 08126/2003 08/01/2003 $ 400,000.00 4.560% $ 978,120.00 $ 1.378.120.00 $ (128,073.75) $ 1,250,046.25 02/0112004 969.000.00 $ 1,947,120.00 969,000.00 $ 2,347,120.00 (128,073.75) 840,926.25 $ 2,090,972.50 08/01/2004 450.000.00 4.560% 969.000.00 1,419,000.00 (128,073.75) 1,290,926.25 02/01/2005 958.740.00 1,927,740.00 958,740.00 2,377,740.00 (128,073.75) 830,666.25 2,121,592.50 08101/2005 4,800,000.00 4.560% 958,740,00 5.758.740.00 (128,073.75) 5,630,666.25 02/01/2006 849,300.00 1,608,040.00 849.300.00 6,608,040.00 (128,073.75) 721,226.25 6.351.892.50 08/01/2006 5,050,000.00 4.560% 849,300.00 5,899,300.00 (128.073.75) 5,771,226.25 02/01/2007 734,160,00 1,583,460.00 734,160.00 6,633,460.00 (128,073.75) 606,086.25 6,377,312.50 08/01/2007 5,300,000.00 4.560% 734.160.00 6,034,160.00 (128,073.75) 5.906.086.25 02/01/2008 613.320.00 1,347,480.00 613,320.00 6,647,480.00 (128.073.75) 485,246.25 6,391,332.50 08/01/2008 150.000.00 4.560% 613.320.00 763,320.00 (128.073.75) 635.246.25 02/01/2009 609,900.00 1,223,220.00 609,900.00 1,373,220.00 (128,073.75) 481,826.25 1.117.072.50 08/01/2009 150,000.00 4.560% 609,900.00 759,900.00 (128,073.75) 631,826.25 02/01/2010 606,480.00 1,216,380.00 606,480.00 1,366,380.00 (128,073.75) 478,406.25 1.110.232.50 08/01/2010 150.000.00 4.560% 606,480.00 756.480.00 (128,073.75) 628.406.25 02/01/2011 603.060.00 1,209,540.00 603,060.00 1,359,540.00 (128.073.75) 474,986.25 1,103,392.50 08/01/2011 150,000.00 4.560% 603,060.00 753,060.00 (128.073.75) 624,986.25 02/0112012 599.640.00 1.202.700.00 599,640.00 1,352,700.00 (128,073.75) 471,566.25 1,096,552.50 08/01/2012 200,000.00 4.560% 599,640.00 799,640.00 (128,073.75) 671,566.25 02/01/2013 595,080.00 1,194,720.00 595,080.00 1,394,720.00 (128,073.75) 467,006.25 1,138,572.50 08101/2013 200,000.00 4.560% 595.080.00 795,080.00 (128.073.75) 667,006.25 02/01/2014 590,520.00 1,185,600.00 590,520.00 1,385,600.00 (128,073.75) 462,446.25 1,129,452.50 08/01/2014 8,200,000.00 4.560% 590,520.00 8,790,520.00 (128.073.75) 8.662.446.25 02/01/2015 403,560.00 994,080.00 403.560.00 9,194,080.00 (128,073.75) 275.486.25 8,937,932.50 08/01/2015 8.600.000.00 4.560% 403.560.00 9.003.560.00 (128,073.75) 8,875,486.25 02/01/2016 207.480.00 611.040.00 207,480.00 9,211,040.00 (128,073.75) 79,406.25 8,954,892.50 08101/2016 9,100,000.00 4.560% 207.480.00 9,307,480.00 (4,853,073.75) 4,454,406.25 02/01/2017 207,480.00 9,307,480.00 4,454,406.25 0 8101/2 0 1 7 Pubtic Resources Advisory Group 8/12/2003 7:00 PM C:IWINDOWS%DesktopuulY 2003 FRaS 030812.xls Page 12 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Orange County Sanitation District Reserve Size of$17.311,427(Shared with Series 2000B) Refunding Certificates of Participatton Series 2000A Previously SwPoped Debt $17.311.427®2.42% Gross Gross Assumed Fiscal Year Debt Fiscal Year DSRF Net Fiscal Year Date Principal Coupon Interest Interest Service Debt Service Cash Flow Debt Service Net Debt Service Totals:» $ 6,500,000.00 $ 212.154.57 $ 212,154.57 $ 6,712,154.57 $ 6.712.154.57 $ 0.00 $ 6,712,154.57 $ 6,712,154.57 08/26/2003 08/01/2003 $ 3,200,000.00 3.250% 104,756.85 $ 3,304,756.65 $ 3.304.756.85 02/01/2004 3.250% 54,065.75 $ 158.822.60 54,065.75 $ 3,358,822.60 54.065.75 $ 3,358,822.60 08/01/2004 3,300,000.00 3.250% 53,331.97 3,353,331.97 3.353.331.97 02/01/2005 53,331.97 3,353,331.97 3,353,331.97 Public Resources Advisory Group 8/12/2003 7:00 PM C:IWINDOWSIDesktopUuly 2003 FRBs 030812.xls Page 13 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Orange County Sanitation District Reserve Size of$17,311,427(Shared with Series 2000B) Refunding Certificates of Participation Series 2000A Remarketed Debt Service $17,311,427 Q 2.42% Gross Gross Assumed Fiscal Year Debt Fiscal Year DSRF Net Fiscal Year _ Date Principal Coupon Interest Interest Service Debt Service Cash Flow Debt Service Net Debt Service Totals:» $ 95,000,000.00 $ 43.515.850.84 $ 43,515.850.84 $ 138,515,850.84 $ 138.515,850.84 $ 0.00 $ 138,515.850.84 $ 138,515,850.84 08126/2003 08/01/2003 $ 900,000.00 3.250% $ 1,531,061.64 $ 2,431.061.64 $ - $ 2.431,061.64 02101/2004 3.250% 1.541,693.15 $ 3,072.754.79 1,541,693.15 $ 3,972,754.79 1.541,693.15 $ 3,972,754.79 08/01/2004 800,000.00 3.250% 1,520,769.13 2,320,769.13 2.320,769.13 02/01/2005 3.250% 1,524,409.84 3,045,178.96 1,524.409.84 3,845,178.96 1,524,409.84 3.845.178.96 08101/2005 400,000.00 3.250% 1.503,663.70 1,903,663.70 1,903.663.70 02/01/2006 3.250% 1.522,032.88 3,025,696.58 1,522,032.88 3,425,696.58 1,522,032.88 3,425,696.58 08101/2006 400,000.00 3.250% 1,497,217.12 1,897,217.12 1,897,217.12 02/01/2007 3.250% 1,515,479.45 3,012,696.58 1,515.479.45 3,412,696.58 1,515,479.45 3,412,696.56 08/01/2007 400,000.00 3.250% 1,490,770.55 1,890,770.55 1,890,770.55 02/01/2008 3.250% 1,508,926.03 2,999.696.58 1,508,926.03 3,399,696.58 1,508,926.03 3,399.696.58 08/01/2008 400,000.00 3.250% 1,488,446.72 1,888,446.72 1,888,446.72 02/01/2009 3.250% 1,498,267.76 2,986,714.48 1,498.267.76 3.386,714.48 1,498,267.76 3,386,714.48 08/01/2009 400,000.00 3,250% 1,477,877.40 1,877,877.40 1,877,877.40 0210112010 3.250% 1,495,819.18 2,973,696.58 1,495,819.18 3,373.696.58 1,495,819.18 3,373,696.58 08/0112010 400.000.00 3,250% 1,471.430.82 1,871,430.82 1.871,430.82 02/0112011 3.250% 1,489,265.75 2,960,696.58 1,489,265.75 3,360,696.58 1,489,265.75 3,360,696.58 08/0112011 5.800,000.00 3.250% 1,464,984.25 7,264,984.25 7,264,984.25 02/01/2012 3.250% 1.394.241.10 2,859,225.34 1,394,241.10 8.659,225.34 1.394,241.10 8,659.225.34 08/01/2012 5,300,000.00 3.250% 1,375,318.31 6,675,318.31 6.675,318.31 02/01/2013 3.250% 1,303,836.07 2,679,154.37 1,303,836.07 7,979,154.37 1,303,836.07 7,979.154.37 08/01/2013 6,300,000.00 3.250% 1,286,091.78 7,586,091.78 7,586,091.78 02/01/2014 3.250% 1,204,191.78 2,490,283.56 1,204,191.78 8,790,283.56 1.204,191.78 8,790,283.56 08/0112014 5,700,000.00 3.250% 1,184,558.22 6.884,558.22 6,884.558.22 02/01/2015 3.250% 1,110,805.48 2,295,363.70 1,110,805.48 7,995,363.70 1,110,805.48 7.995.363.70 08101/2015 5,900,000.00 3.250% 1,092,694.52 6,992,694.52 6.992,694.52 02/01/2016 3.250% 1,014,142.47 2,106,836.99 1,014,142.47 8,006.836.99 1.014,142.47 8,006,836.99 08/01/2016 8,300.000.00 3.250% 1.000,378.42 9,300.378.42 9,300,378.42 02/01/2017 3.250% 875,759.56 1,876,137.98 875.759.56 10,176.137.98 875,759.56 10.176,137.98 08/01/2017 10,900,000.00 3.250% 863,841.10 11,763,841.10 11,763,841.10 02/01/2018 3.250% 699,578.08 1,563,419.18 699.578.08 12,463.419.18 699,578.08 12,463,419.18 08/01/2018 11,400,000.00 3.250% 688,171.92 12,088,171.92 12,088,171.92 02/0112019 3.250% 512,805.48 1,200,977.40 512.805.48 12,600,977.40 512,805.48 12.600,977.40 08/01/2019 11,800,000.00 3.250% 504,444.52 12,304,444.52 12,304.444.52 02/01/2020 3.250% 319,479.45 823,923.97 319.479.45 12,623,923.97 319.479.45 12,623,923.97 08/01/2020 12,300,000.00 3.250% 315,143.44 12,615,143.44 12.615.143.44 02/01/2021 3.250% 117,639.34 432,782.79 117,639.34 12,732,782.79 117,639.34 12,732,782.79 08/0112021 700,000.00 3.250% 116,038.36 816.038.36 816.038.36 02/0112022 3.250% 106.493.15 222.531.51 106,493.15 922,531.51 106,493.15 922,531.51 08/01/2022 700,000.00 3.250% 104,756.85 804,756.85 804,756.85 02/01/2023 3.250% 95.024.66 199,781.51 95,024.66 899.781.51 95,024.66 899,781.51 08/01/2023 700,000.00 3.250% 93,475.34 793.475.34 793,475.34 02/01/2024 3.250% 83,556.16 177.031.51 83,556.16 877,031.51 83,556.16 877,031.51 08/0112024 800,000.00 3.250% 82,422.13 882,422.13 882,422.13 02/0112025 3.250% 70,256.83 152,678.96 70.256.83 952,678.96 70,256.83 952,678.96 08/0112025 800.000.00 3.250% 69,300.68 869,300.68 869,300.68 02/01/2026 3.250% 57.342.47 126.643.15 57,342.47 926,643.15 57,342.47 926,643.15 08/01/2026 800,000.00 3.250% 56.407.53 856,407.53 856,407.53 02101/2027 3.250% 44,235.62 100,643.15 44,235.62 900,643.15 44,235.62 900,643.15 Public Resources Advisory Group 8/12/2003 7:00 PM C:IWINDOWSIDesktopUuly 2003 FRBs 030812.xls Page 14 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Orange County Sanitation District Reserve Size of$17.311.427(Shared with Series 2000B) Refundfrta Certificates of Participation,Series 2000A Remarketed Debt Carvice $17.311.427 @ 2.42% Gross Gross Assumed Fiscal Year Debt Fiscal Year DSRF Net Fiscal Year Date Principal Coupon Interest Interest Service Debt Service Cash Flow Debt Service Net Debt Service Totals:» $ 95,000,000.00 $ 43.515.850.84 $ 43,515,850.84 $ 138,515,850.84 $ 138,515,850.84 $ 0.00 $ 138,515,850.84 $ 138,515,850.84 08126/2003 08/01/2027 900.000.00 3.250% 43,514.38 943,514.38 943,514.38 02/01/2028 3.250% 29,490.41 73,004.79 29,490.41 973,004.79 29,490.41 973,004.79 08/01/2028 900,000.00 3.250% 29,090.16 929,090.16 929,090.16 02/01/2029 3.250% 14,704.92 43,795.08 14,704.92 943.795.08 14,704.92 943,795.08 08/01/2029 900.000.00 3.250% 14.504.79 914.504.79 914,504.79 02/01/2030 14,504.79 914,504.79 914,504.79 Public Resources Advisory Group 8/12I2003 7:00 PM C:IWINDOWS1DesktopUuly 2003 FRBs 030812 ds Page 15 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Orange County Sanitation District Reserve Size of$17,311,427(Shared with Series 2000A) Refunding Certificates of Participation.Series 2000E-Remarketed Debt Service $17,311.427 @ 2.42% Gross Gross Assumed Fiscal Year Debt Fiscal Year DSRF Net Fiscal Year Date Principal Coupon Interest Interest Service Debt Service Cash Flow Debt Service Net Debt Service Totals:» $ 107.400.000.00 $ 50,076,083.45 $ 50,076.083.45 $ 157476083.45 $ 157.476,083.45 $ (25.306,478.91) $ 132,169,604.53 $ 132,169,604.53 08/26/2003 08/01/2003 $ 900,000.00 3.250% $ 1.730,905.48 $ 2,630,905.48 $ (209.468.27) $ 2,421,437.21 02/0112004 3.250% 1,744,849.32 $ 3,475,754.79 1,744,849.32 $ 4,375.754.79 (209,468.27) 1.535,381.05 $ 3,956,818.26 08/01/2004 800,000.00 3.250% 1,721,168.03 2,521,168.03 (209,468.27) 2,311.699.77 02/01/2005 3.250% 1,727.010.93 3,448.178.96 1,727.010.93 4.248,178.96 (209,468.27) 1,517,542.66 3,829.242.43 08/01/2005 400.000.00 3.250% 1,703,507.53 2,103.507.53 (209,468.27) 1,894.039.27 02/01/2006 3.250% 1.725,189.04 3,428,696.58 1,725,169.04 3,828,696.58 (209.468.27) 1,515,720.77 3,409,760.04 08/01/2006 400,000.00 3.250% 1,697,060.96 2,097.060.96 (209,468.27) 1,887,592.69 02/01/2007 3.250% 1,718,635.62 3,415,696.58 1,718,635.62 3.815.696.58 (209,468.27) 1,509,167.35 3,396,760.04 08101/2007 400,000.00 3.250% 1,690,614.38 2,090,614.38 (209,468.27) 1,881,146.12 02/01/2008 3.250% 1,712,082.19 3,402.696.58 1,712,082.19 3,802,696.58 (209,468.27) 1,502.613.93 3.383,760.04 08/01/2008 400,000.00 3.250% 1,688,845.63 2,088,845.63 (209,468.27) 1.879,377.36 02/01/2009 3.250% 1.700,868.85 3,389,714.48 1.700.868.85 3,789,714.48 (209,468.27) 1.491,400.59 3,370.777.95 08/01/2009 500,000.00 3.250% 1,677,721.23 2.177,721.23 (209.468.27) 1.968,252.97 02/01/2010 3.250% 1.697,336.99 3,375,058.22 1,697,336.99 3,875.058.22 (209,468.27) 1,487.868.72 3.456,121.69 08/01/2010 500,000.00 3.250% 1,669,663.01 2,169,663.01 (209,468.27) 1,960,194.75 02/01/2011 3.250% 1.689,145.21 3.358,808.22 1,689,145.21 3,858,808.22 (209.468.27) 1,479,676.94 3,439,871.69 08/01/2011 6.500.000.00 3.250% 1.661.604.79 8,161,604.79 (209,468.27) 7,952,136.53 02/01/2012 3.250% 1.582.652.05 3,244,256.85 1.582,652.05 9.744,256.85 (209,468.27) 1,373,183.79 9,325,320.32 08/01/2012 6.000,000.00 3.250% 1.561,172.13 7.561,172.13 (209.468.27) 7,351,703.86 02/01/2013 3.250% 1,480.295.08 3,041,467.21 1,480.295.08 9,041.467.21 (209,468.27) 1.270,626.82 8,622,530.68 08101/2013 7.000.000.00 3.250% 1,460,149.32 8,460,149.32 (209,468.27) 8,250,681.05 02101/2014 3.250% 1,369,665.75 2,829,815.07 1.369,665.75 9,829,815.07 (209,468.27) 1,160,197.49 9,410.878.54 08101/2014 6,400,000.00 3.250% 1,347,334.25 7,747,334.25 (209,468.27) 7.537,865.96 02101/2015 3.250% 1,264,810.96 2,612,145.21 1,264,810.96 9.012,145.21 (209.468.27) 1,055.342.69 8,593,208.67 08/01/2015 6.600,000.00 3.250% 1,244,189.04 7,844,189.04 (209,468.27) 7,634.720.77 0210112016 3.250% 1.156.679.45 2.400.868.49 1,156,679.45 9,000.868.49 (209,468.27) 947.211.19 8.581,931.96 08/01/2016 9,200,000.00 3,250% 1,140.980.87 10,340,980.87 (209.468.27) 10,131,512.61 02/01/2017 3.250% 1,003,202.19 2,144,183.06 1,003,202.19 11,344,183.06 (209.468.27) 793,733.92 10,925,246.53 08/01/2017 12,200.000.00 3.250% 989.549.32 13,189.549.32 (209.468.27) 12,980,081.05 02/01/2018 3.250% 806,071.23 1,795,620.55 806,071.23 13.995,620.55 (209,468.27) 596.602.97 13.576,684.01 08/01/2018 12,600.000.00 3.250% 792.928.77 13,392,928.77 (209,468.27) 13,183,460.50 02/01/2019 3.250% 599.638.36 1,392.567.12 599,638.36 13,992,567.12 (209.468.27) 390.170.09 13.573.630.59 08/01/2019 13,200.000.00 3.250% 589.861.64 13,789,861.64 (209,468.27) 13.580.393.38 02/01/2020 3.250% 383,375.34 973.236.99 383,375.34 14,173,236.99 (209,468.27) 173,907.08 13,754,300.45 08/01/2020 13,700,000.00 3.250% 378,172.13 14,078,172.13 (14,695,987.93) (617,815.80) 02/01/2021 3.250% 158,486.34 536,658.47 158.486.34 14.236,658.47 (34,181.38) 124,304.96 (493.510.84) 08/01/2021 700,000.00 3.250% 156,329.45 856,329.45 (34,181.38) 822.148.07 02/01/2022 3.250% 147,452.05 303,781.51 147,452.05 1,003,781.51 (34,181.38) 113,270.68 935,418.75 08101/2022 800.000.00 3.250% 145,047.95 945.047.95 (34,181.38) 910,866.57 02/01/2023 3.250% 134,345.21 279,393.15 134,345.21 1,079,393.15 (34,181.38) 100,163.83 1,011,030.39 08/01/2023 800,000.00 3.250% 132,154.79 932,154.79 (34,181.38) 897,973.42 02/01/2024 3.250% 121,238.36 253,393.15 121,238.36 1,053,393.15 (34,181.38) 87.056.98 985,030.39 08/01/2024 800,000.00 3.250% 119,592.90 919,592.90 (34,181.38) 885.411.52 02/01/2025 3.250% 107,836.07 227,428.96 107.836.07 1,027,428.96 (34,181.38) 73,654.69 959.066.20 08101/2025 800,000.00 3.250% 106,368.49 906,368.49 (34,181.38) 872,167.11 02/01/2026 3.250% 95,024.66 201,393.15 95,024.66 1,001.393.15 (34.181.38) 60,843.28 933.030.39 08/01/2026 900,000.00 3.250% 93.475.34 993,475.34 (34,181.38) 959.293.96 02/01/2027 3.250% 80,279.45 173.754.79 80,279.45 1,073.754.79 (34,181.38) 46,098.07 1.005,392.04 Public Resources Advisory Group 8/12/2003 7:00 PM C:IWINDOWS1DesktopUuty 2003 FRBs 030812.xls Pago 16 ORANGE COUNTY SANITATION DISTRICT FINAL CASH FLOWS Orange County Sanitation District Reserve Size of$17,311,427(Shared with Series 2000A) Refunding Certificates of Participation Series 2000E-Remarketed Debt Service $17.311,427 @ 2.42% Gross Gross Assumed Fiscal Year Debt Fiscal Year DSRF Net Fiscal Year Date Principal Coupon Interest Interest Service Debt Service Cash Flow Debt Service Net Debt Service Totals:>> $ 107,400,000.00 $ 50,076,083.45 $ 50 076,083.45 $ 157 476 083.45 $ 157,476,083.45 $ (25,306,478.91) $ 132,169,604.53 $ 132,169,604.53 08/2612003 08/01/2027 900,000.00 3.250% 78,970.55 978.970.55 (34,181.38) 944,789.17 02/01/2028 3.250% 65,534.25 144,504.79 65,534.25 1,044,504.79 (34,181.38) 31,352.87 976,142.04 08/01/2028 1,000,000.00 3.250% 64.644.81 1,064,644.81 (34.181.38) 1,030,463.43 02/01/2029 3.250% 49.016.39 113,661.20 49,016.39 1,113,661.20 (34,181.38) 14,835.01 1,045,298.44 08/01/2029 1,000,000.00 3,250% 48,349.32 1,048,349.32 (859,181.38) 189,167.94 02/01/2030 3.250% 32,767.12 81,116.44 32,767.12 1,081,116A4 (24,198.88) 8,568.24 197,736.18 08/01/2030 2,000,000.00 3.250% 32,232.88 2,032,232.88 (2,024,106.22) 8.126.66 02/01/2031 32,232.88 2,032,232.88 8,126.66 Publk Resources Advisory Group 8/12/2003 7:00 PM C:IWINDOWS%DesktopUuly 2003 FRBs 030812.xls Page 17 SECTION V 4� ORANGE COUNTY SANITATION DISTRICT Outstanding Certificates of Participation Series 1992 Series 1993 Series Series 2000-A Series 2000-B Series 2003 Issue Name Refunding COPs Refunding COPs Refunding COPs Refunding COPs COPs Issue Date 12/3/1992 9/21/1993 8/28/2000 8/28/2000 8/26/2003 Original Par $160,000,000(1) $46,000,000(2) $109,300,000 $109,300,000 $280,000,000 Outstanding Par $106,965,000 $42,500,000 $97,400,000 $106,500,000 $280,000,000 Principal Payment Date August 1 August 1 August 1 August 1 February 1 Original Proceeds Current Refunding Current Refunding Cur/Adv Refunding Cur/Adv Refunding Const./Reimbs. Lien or Tier Senior Senior Senior Senior Senior Interest Rate Mode Synthetic Fixed Synthetic Fixed Floating Floating Fixed Rate 5.55% 4.56% Variable Variable 5.16% First Call Date 1st of each month Any business Day Any Payment Date Any Payment Date 8/1/2013 Call Price 100.0(3) 100.0(3) 100.0 100.0 100.0 Final Maturity Date 8/1/2013 8/1/2016 8/1/2029 8/1/2030 2/1/2033 Reserve Fund $12,417,000 $4,725,000 $17,311,427(4) $17,311,427(4) $26,979,193 Underwriter PaineWebber PaineWebber PaineWebber PaineWebber Morgan Stanley Insurance Provider Ambac Ambac none none FGIC Liquidity Provider Barclays Societe Generale Dexia Dexia none (1)Originally issued as the"County Sanitation District Nos. 1,2,3,5,6,7 and 11 of Orange County California Refunding Certificates of Participation, 1992 Series" (2)Originally issued as the"County Sanitation District Nos. 1,2,3,5,6,7 and 11 of Orange County California Refunding Certificates of Participation, 1993 Series" (3)Calling the 1992 or 1993 COPs would require a termination payment under the COPs Synthetic Fixed Rate Structure (4)Reserve Fund is shared by the Series 2000-A and Series 2000-B Refunding COPs Public Resources Advisory Group 8/25/2003 12:38 PM ORANGE COUNTY SANITATION DISTRICT Certificates of Participation Aggregate Net Debt Service -All Series S45,000,000 S40.000,000 S35.000.000 S30,000,000 S25,000,000 $20,000,000 S15,000,000 S10,000,000 $5,000,000 S- -- -- - J— Ln (0 r.- 00 O O N M (0 O O N M (D O O O N M O O CD O O O .-- .— r .— r Oo N N N N N N N N N N Cl) co M M �) O O O O O O O O O O O O O O Cl O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 01992 Senior B 1993 Senior N 2000 Senior A ■2000 Senior B ■2003 Senior PUBLIC RESOURCES ADVISORY GROUP ORANGE COUNTY SANITATION DISTRICT Certificates of Participation Aggregate Gross Debt Service -All Series S70,000,000 S60,000,000 $50,000,000 $40,000,000 n I S30,000,000 $20,000,000 $10.000,000 i $- = — 6d H Ln (O co M O_ N M d' �A (U OD Q1 O N M st � O r` O O O N M I- C)O O O CD O N N N N N N N N N N M M M M M O Cl Cl O CD CDO O O O O O O O O O O O O O CD O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N (V ❑1992 Senior ®1993 Senior ■2000 Senior A 1112000 Senior B ■2003 Senior i PUBLIC RESOURCES ADVISORY GROUP j IA 4°Iyaras MOODY'S ASSIGNS Aa3 RATING TO ORANGE CO. SANITATION DIST. COPS SE... Pagel of 3 uct Global Credit Research New Issue f v*stom a 7 AUG 2003 New Issue: Orange County Sanitation Districts, CA MOODY'S ASSIGNS Aa3 RATING TO ORANGE CO.SANITATION DIST.COPS SERIES 2003 APPROXIMATELY$489 MILLION OF DEBT AFFECTED County CA Moody's Rating ISSUE RATING Certificates of Participation,Series 2003 Aa3 Sale Amount $280,000,000 Expected Sale Date 08/12/03 Rating Description Revenue Bond Opinion NEW YORK,Aug 7,2003— Moody's has assigned an Aa3 rating to the Orange County Sanitation District Certificates of Participation,Series 2003.These certificates are secured by a senior lien on net system revenues,on parity with outstanding debt.The rating is primarily based upon the District's large and 1z, economically sound service area,its strong financial management which has resulted in healthy financial performance,and its large but manageable capital plan.Proceeds from the current offering will be used to reimburse the District for prior capital expenditures and fund additional capital improvements. FAVORABLE CHARACTERISTICS OF LARGE CUSTOMER BASE Orange County Sanitation District provides wastewater treatment and disposal services to a strong, diversified customer base.The District serves nearly 2.4 million people in 23 cities,three special districts, and several unincorporated areas in Orange County(Issuer Rating Aa2).The county is notable for its high wealth levels and for the continued strength of its economy despite the statewide recession,which overall has affected southern California less severely than northern California. The District's service area covers 471 square miles or 59%of county land,and contains 87%of its population.Prior to 1998 the area was served by nine independent sanitation districts with joint responsibility for the treatment and disposal facilities that they utilized. Residential/commercial customers have accounted for approximately 90%of the District's service charge revenues over the past five years. In fiscal 2003 the District's ten largest customers accounted for only 3.4%of service charge revenues and its single largest client, Disneyland,for 0.54%. STRONG MANAGEMENT RESULTS IN HEALTHY FINANCIAL PERFORMANCE The District's strong financial management has resulted in consistently healthy operating and coverage ratios and ample reserve levels. Property taxes comprise approximately 25%of the District's revenues;including those revenues the District's operating ratio has been approximately 56%and its net takedown approximately 58%over the five years between 1998 and 2002. Results for fiscal 2003 are likely to be consistent with prior years. The District by policy maintains ample reserve levels.The District has established eight separate reserves, each with clear parameters for funding, and all of which have been fully funded at their policy levels.Among these are two cash flow reserves(one sufficient to cover operation and maintenance for the first half of the next fiscal year and the second to cover the following year's debt service),an operating contingency reserve totaling 10%of operations and maintenance,a capital improvement reserve sized at half the average annual httn-//www.mondvs.com/moodvs/cust/research/eenoa/ReDort/New%20Issue/600024043/2... 8/21/2003 MOODY'S ASSIGNS Aa3 RATING TO ORANGE CO. SANITATION DIST. COPS SE... Page 2 of 3 bw capital improvement program through the year 2020,and a capital replacement/renewal reserve targeted to provide 30%of replacement or refurbishing of the current facilities at the end of their useful lives.The District also maintains a short-term capital fund reserve(currently funded to meet the upcoming costs of a groundwater replenishment system being developed in cooperation with the Orange County Water District.) Policy also allows for a rate stabilization fund,which currently is unfunded.Together these reserves totaled $420 million at fiscal year end 2003;excluding the capital improvement reserve which includes COP proceeds these reserves total a healthy$280 million,well in excess of fiscal 2003 gross revenues of$163 million. STRONG HISTORIC DEBT SERVICE COVERAGE;PLANNED ADDITIONAL DEBT WILL REQUIRE SIGNIFICANT RATE INCREASES �+ Debt service coverage has consistently been strong,ranging from 2.7x to nearly 4.Ox between 1999 and 2002.The District's large capital plan,which totals$2.15 billion through 2013,calls for 60%debt funding or approximately$1.4 billion in additional debt to be issued between 2006 and 2011.Projections,which are characterized by officials as conservative,show debt service coverage declining over the coming five years to a still strong 1.74x.These coverage levels require significant annual increases in rates,which currently are comparatively low.Whereas annual increases averaged 3.5%between 1997 and 2003,rate increases of 15%annually are projected for 2004 through 2009,declining to 11%in each of the following two years. VARIABLE RATE DEBT EXPOSURE OFFSET BY INVESTMENT PORTFOLIO The District has issued a significant amount of variable rate debt.Approximately$155 million in debt issued as variable rate has been fixed through swap arrangements. In Moody's view,these swaps do not pose a credit risk.The District maintains a significant portion of its debt,$209 million,in variable rate mode.The District's ample reserves provide a natural hedge against the variable rate risk,and the District routinely monitors the relationship between its invested assets and its variable rate debt exposure.Variable rate debt is limited by policy to not more than 1x District reserves. LARGE BUT MANAGEABLE CAPITAL PLAN INCLUDES UPGRADE TO FULL SECONDARY TREATMENT,MINIMIZING REGULATORY RISK The District's capital plan totals$2.15 billion through 2013,approximately$500 million of which reflects the cost of secondary treatment.The District's current capacity is sufficient to meet its needs,although the capital plan includes expansion to meet projected growth.The District's flows have been stable in recent years at approximately 241 mgd.Facilities include two treatment plants and two ocean outfalls.The treatment plants currently have 274 million gallons per day(mgd)advanced primary and 180 mgd secondary treatment capacity. In July 2002 the District Board resolved to upgrade to full secondary treatment. Until now the District had been operating under a waiver from the Clean Water Act Section 301(h),which was subject to renewal every five years,allowing them to provide a lower treatment level(advanced primary vs.secondary)than required too of almost all other treatment plants in the country.Adopting the full secondary treatment standard will eliminate the risk posed by the required renewals of the waiver.By 2013 the District plans to expand total capacity to 334 mgd,all of which will be treated at the secondary level.The District's capital plan also includes funding for a groundwater replenishment system being developed jointly with the Orange County "Mi Water District,designed to reclaim approximately 70 mgd.As discussed above,the District anticipates funding approximately 60%of its capital plan through additional debt issuance. STANDARD LEGAL PROVISIONS Legal covenants are typical for this type of financing.The rate covenant and additional bonds test both provide for 1.25x coverage by Net Revenues on senior debt and 1.00x by Net Operating Revenues on all ,ow District obligations.A fully funded,standard-sized reserve fund is provided for through a combination of surety bond and/or funds on deposit. KEY STATISTICS Population served:2.4 million Top ten industrial customers as%of FY2003 revenue:3.4% httn://www.moodvs.com/moodvs/cust/research/iienoa/Renort/New%20Issue/600024043/2... 8/21/2003 MOODY'S ASSIGNS Aa3 RATING TO ORANGE CO. SANITATION DIST. COPS SE... Page 3 of 3 Debt service coverage, FY2002:3.99x Operating ratio, FY2002:57% Net takedown, FY2002: 58.3% Debt ratio, FY2002:29.5% Analysts Dari Barzel Analyst Uzi Public Finance Group Moody's Investors Service ,mb Eric Hoffmann Backup Analyst Public Finance Group Moody's Investors Service tow Contacts kad Journalists: (212)553-0376 Research Clients:(212)553-1653 ©Copyright 2003, Moody's Investors Service, Inc.and/or its licensors including Moody's Assurance Company, Inc. I=W (together,MOODY'S).All rights reserved. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED,TRANSFERRED, DISSEMINATED, L=j REDISTRIBUTED OR RESOLD,OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE,IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.All information contained herein is obtained by MOODY'S from sources believed by It to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors,however,such information Is provided"as Is"without warranty of any kind and MOODY'S, in particular, makes no representation or warranty,express or implied,as to the accuracy,timeliness, L�j completeness, merchantability or fitness for any particular purpose of any such information. Under no circumstances shall MOODY'S have any liability to any person or entity for(a)any loss or damage In whole or in part caused by, resulting from,or relating to, any error(negligent or otherwise)or other circumstance or contingency within or outside the control of MOODY'S or any of Its directors,officers,employees or agents in connection with the procurement, collection,compilation, analysis, Interpretation,communication,publication or delivery of any such Information,or(b)any direct, indirect,special,consequential, k=d compensatory or incidental damages whatsoever(including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use,any such information.The credit ratings, if any, constituting part of the information contained herein are,and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase,sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED,AS TO THE ACCURACY,TIMELINESS,COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH k2o RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein,and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of,and each provider of credit support for, each security that It may consider purchasing, holding or tsid selling. Pursuant to Section 17(b)of the Securities Act of 1933, MOODY'S hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper)and preferred stock rated by MOODY'S have,prior to assignment of any rating,agreed to pay to MOODY'S for appraisal and rating services rendered by it fees ranging from$1,500 to$1,500,000. ase httn://www.tnoodvs.com/moodvs/cust/research/eenoa/ReDort/New%20Issue/600024043/2... 8/21/2003 [1 1-Aug-2003] Orange County Sanitation Districts, California; Public Finance Structured,... Page 1 of 3 STANDARD RATINGSDIRECT &POOR'S Research: Retum to Regular Format Orange County Sanitation Districts, California; Public Finance Structured, Liquidity Facility; Utility, Water/Sewer Publication date: 11-Aug-2003 Credit Analyst: Ian Carroll,San Francisco(1)415-371-5060; Gabriel Petek,San Francisco(1)415-371-5042 Credit Profile $280. mil certs of part ser 2003 due 02/01/2033 AA Sale date: 12-AUG-2003 AFFIRMED $208.900 mil. Orange Cnty San Dists var rate rev ref certs of part ser 2000 dtd 08/31/2000 due 08/01/2004 2029 2030 AA/A-1+ OUTLOOK: STABLE ® Rationale taw Standard & Poor's Ratings Services has affirmed its'AA'rating on Orange County Sanitation District, Calif.'s certificates of participation. The rating reflects the following strengths: . Strong financial performance with very strong reserve levels; . Low rates,which will remain low as the district implements its large but manageable capital plan, taw which has a large pay-as-you-go component; and . A strong and diversified service area economy, one of the best performers in southern California. MW The certificates are secured by installment payments made from net revenues of the district. Serving most of Orange County, including a residential population of 2.3 million,or 80%of the county's ,a, population, the Orange County Sanitation District is among the nation's largest wastewater treatment systems.With an underlying economy that has demonstrated its depth in recent years as much of the rest of the state slumped,the district benefits from a stable service area.Assessed valuation in the county has grown 8% annually in the past five years. With a low 4% unemployment rate in 2003, the bw Orange County job market is far better on average than those of the state, at 6.8%, and the U.S., at 6.1%. The underlying economy consists of a diverse mix of higher education, tourism, and manufacturing.The University of California, Irvine draws over 20,000 students and is responsible for attracting scientific research and development firms.A strong tourism industry is anchored by both the presence of Disneyland and the county's popular Pacific Ocean beach communities, including Huntington Beach. Defense manufacturing has also been a leading industry in the county.The county is relatively wealthy, with the median household income about$54,000, or 40% above the U.S. median. The Orange County Sanitation District provides sewage treatment and transports effluent through an ocean outfall. Individual cities and special districts, of which 24 are located within the district's 471- square-mile service area, provide collection of the wastewater through their own infrastructure,which ties into the pipelines of the district and carries untreated wastewater to one of two treatment plants. Treated wastewater is discharged into the ocean five miles offshore at a depth of 200 feet. The district treated an average of 240 million gallons of sewage per day(mgd) in 2003, which was about 13% em below total treatment capacity. Projections call for 2.1% average annual increase of wastewater flow, which will drive a portion (14%) of the district's capital spending over the next 10 years. LVW httn://www.ratin2sdirect.coni/Avos/RD/controller/Article?id=327966&type=&OutDutTme... 8/21/2003 [11-Aug-2003] Orange County Sanitation Districts, California; Public Finance Structured,... Page 2 of 3 Historically, operating under an environmental waiver of full secondary treatment standards,the district has blended wastewater treated to primary and secondary standards before discharging into the ocean. In 2002,following community feedback, the district board of directors acted to implement full secondary treatment prior to discharge. Reaching full secondary capability is expected to take between five and 10 years, and cost about$400 million, a substantial share of the district's$1.3 billion, five-year capital plan. Along with the Orange County Water District, the sanitation district is undertaking a groundwater replenishment project, whereby wastewater is pumped into the Orange County groundwater basin after being treated to a higher standard than the ocean outfall effluent. The water district and the sanitation district are equally responsible for project financing. The program, known as the Groundwater Replenishment System,will eventually provide more than 145,000 acre-feet of water for the groundwater basin. The project is responsible for about 10%of the sanitation district's capital plan. Financial performance has been strong and is expected to remain strong with good coverage of debt service and very high cash reserve levels. Debt service coverage has been strong, with coverage remaining above 2x in every year since 1996 with connection fees. In 2003, debt service coverage was very strong at 3.97x, 3.52x excluding connection fees. Projected debt service coverage, including future debt issuances, gradually will be reduced but will still remain good at 1.98x by 2006 and 1.74x by 2008. The district has an exceptionally strong cash position. On an unrestricted basis,the district ended fiscal �+ 1999 with $430 million of unrestricted cash and investments, equal to 2,287 days of operating expenses. The certificates are being issued to finance improvements to the system and are secured by a first lien on net revenues of the district's wastewater system, including the district's share of ad valorem taxes. Legal provisions consist of a 1.25x rate covenant and projected 1.25x maximum annual debt service additional bonds test.The district provides wastewater collection, treatment, and disposal services to approximately 2.4 million people(92%of the Orange County population) in a 471 square-mile service area (59%of the county area). The district's service area includes 23 of the county's 33 cities as well as unincorporated areas of the county, ® Outlook The stable outlook reflects the expectation of continued strong financial performance with very high cash reserve levels as the district implements its large, but manageable capital plan. Operations The district wastewater system consists of two wastewater treatment plants with a combined primary treatment capacity of 274 mgd and combined 180 mgd of secondary treatment capacity.Actual flows in fiscal 2003 averaged 240 mgd. There are no immediate system capacity constraints, and the relatively modem infrastructure allows for incremental expansion.The district itself does not collect the wastewater but instead relies on many local agencies in the district's service area, which are tied into the district's sewer pipelines,to collect wastewater. Historically, the district treated half of its wastewater flow to primary standards and half to secondary `� standards, and blended the two flows together so the actual ocean outflow was somewhere between primary and secondary treatment. The district had periodically obtained environmental waivers allowing less than full secondary treatment. In 2002,following feedback from the community, the board of directors adopted an ordinance to move toward full secondary treatment for all ocean outflow.The expected timeframe for full secondary treatment is 2010 or sooner. „w !I Finances and CIP With $1.3 billion in capital spending anticipated in the next five fiscal years,the district will rely on both cash resources and debt financing. With a series of annual, 15% rate increases over the coming years, the district should be able to generate surplus cash that is sufficient,when combined with cash ,to reserves, to fund the capital plan at an average of$260 million per year. The district benefits from a strong billing system,whereby the district's fees are collected as a line item bw on the Orange County property tax bill. Residents risk foreclosure on their homes if they do not pay all items on the bill. kow b"-//www.ratin gsdirect.com/AnnS/RD/controller/Article?id=327966&tvue=&outautTvne... 8/21/2003 [11-Aug-2003] Orange County Sanitation Districts, California; Public Finance Structured,... Page 3 of 3 In addition to the annual wastewater service charge for the district, the district gets a portion (2.5%) of the 1% property tax levied by Orange County. This revenue source is stable given the assessed value stability of Orange County, which generated $40 million in fiscal 2003 and is expected to increase 3% annually. While rates are set to increase substantially, at 15% annually, the increases are not unreasonable considering the capital needs of the district and its history of below- average rates. In 2002, the board approved a rate increase of$7.50 per year, or 9.4%, for all ratepayers to $87.50 per year. Additional rate increases of 15% per year are planned through 2008, at which time the district's annual rate would be $175, which is still low relative to other area agencies. The regional average annual cost for wastewater treatment among other agencies is $244. In 2003, the 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 is still low at $144 per year or $12.00 per month. Rate increases should enable the district to undertake its capital plan with a good mix of cash funding and debt financing. The district has a policy of funding about 40% of capital needs through cash and relying on certificates of participation for the remainder. The district's capital needs between 2004 and 2008 call for a high average annual cash outlay of$260 million. The district is accustomed to managing sizeable capital needs, as during the prior five-year period, the district managed cash funded capital expenditures ranging from $44 million to $110 million. E Debt To help fund the capital improvement program, approximately S1.125 billion of additional debt will be issued through 2011. A S270 million issuance is expected in 2006. The district's capital improvement plan through 2020 totals about $2.37 billion, with $2.15 billion of capital expenditures planned through 2013. The 10-year capital plan will be allocated as follows: 28% treatment plant repair, 20% full secondary treatment, 14% collection system repair, 14% improvement treatment and support facilities, 14% additional treatment capacity, and 10% groundwater replenishment system. The district anticipates funding approximately 40% of the capital plan with cash. The 2003 certificates are issued on a parity basis with three outstanding issues, from 1992, 1993, and 2000. The 1992 certificates were issued with a par amount of$160.6 million, of which S113.2 remains outstanding, which will mature by August 2013. The 1993 certificates were issued with a par amount of $46 million, of which $42.9 remains outstanding, which will mature by August 2016. The 2000 certificates were issued with a par amount of$218.6 million, of which $208.9 remains outstanding and which will mature by August 2030. Each of these three series of certificates was issued with a variable rate of interest. In each case, liquidity facilities support any tender options. Additionally, the 1992 and 1993 certificates are swapped to a fixed rate of interest. The 2003 bonds are issued with a fixed rate of interest and bring the variable-to-fixed ratio of the district's debt to 61% to 39%. Anticipated future debt series are expected to be issued with a fixed rate of interest. Copyright©1994-2003 Standard&Poor's,a division of The McGraw-Hill Companies. r All Rights Reserved.Privacy Policy httn://%vww.rat]nL)rsdirect.com/Aons/RD/controller/Article?id=327966&tvT)e=&outputTvne... 8/21/2003 tod U,6 FitchRatings Public Finance 'oci Revenue Orange County Sanitation New Issue District, California bw Ratings ■ Outlook enj New Issue The `AA' rating reflects the Orange County Sanitation District's(OCSD, Certificates of Participation,Series 2003..AA or the district) healthy financial position, which includes strong liquidity levels and stable revenue sources, competitive rates, and management's Outstanding Debt prudent capital planning and adoption of ongoing rate increases. While ivwSenior Lien Certificates............................AA capital program costs are considerable, rates are projected to remain competitive, and more importantly, concerns over the district's current Analysts wastewater treatment standards are addressed. Debt levels will increase Mark J.Capell substantially to meet planned system improvements, and variable-rate k2w 1 415 732-1756 exposure remains a concern;however,these risks are somewhat mitigated mark.capell@fitchratings.com by the long-term benefits of the capital plan and strong liquidity levels. Doug Scott ►w 1 512 322-5321 ■ Rating Considerations douglas.scott@fitchratings.com The district serves an estimated 2A million residents in northern and central Orange County, representing the third largest wastewater Issuer Contact system west of the Mississippi. The system treats an average Blake P.Anderson 240 million gallons per day (mgd). The district's vast service area is General Manager characterized by its strong,diverse,and growing economic base. 1 714 593-7110 m District infrastructure includes 200 miles of local sewers; 450 miles of New Issue Details trunk and force mains,with 12 trunk lines; 22 pump stations; an ocean Approximately $280,000,000 Certificates of outfall; and two large treatment plants. Both treatment plants produce a Participation,Series 2003,are scheduled to sell combination of primary and secondary treated effluent, and neither competitively on Aug. 12. The bonds are facility currently has sufficient capacity to meet full secondary treatment subject to optional and mandatory redemption standards as required under the Clean Water Act(CWA).As a result,the as specified in the official statement. district has operated with a special Environmental Protection Agency Purpose:Certificate proceeds will help finance (EPA) 301(h)permit waiver historically,which is required to discharge a portion of the Orange County Sanitation District's capital improvement plan. nonsecondary treated effluent via the district's ocean outfall.However,a board directive recently declared the district's intention to meet full secondary standards by 2013. While the additional costs are significant (an estimated $531.8 million), the end result will better position the district for ongoing growth while avoiding the legal,administrative,and capital issues associated with seeking and maintaining special EPA permit waivers. Fitch Ratings believes that achieving secondary 'aw standards minimizes the risks of enforcement liabilities. The district's updated long-term capital program has identified 136 large capital projects and 43 special projects to be completed by 2013. The program includes the Groundwater Replenishment System (GWRS); collection system repair and maintenance; treatment facility planning, expansion, and improvements; and development of full secondary treatment for all effluent. Total capital spending through 2020 is estimated at$2.149 billion,60%of which will come from debt proceeds and the remainder from pay-as-you-go funding. Concerns over the rising debt load and rising demands on system revenues for pay-as-you-go projects are somewhat mitigated by the district's strong current financial position, sustained by historical rate hikes and August 8,2003 www.fitchratings.com WW bob FitchRatings Public Finance ,o, ongoing rate increases adopted by the board. Rates Wastewater Treatment Capacities should remain competitive despite substantial annual (Mil.Gallons per Day) increases expected over the next several years. Existing Existing Planned Following the proposed fixed-rate offering, the Fiscal2003 Primary Secondary Total district's overall debt profile remains exposed to Actual Flows Capacity Capacity Capacity variable-rate risk. Future bond offering plans include Plant 1 106 105 184 both variable- and fixed-rate transactions, though the Plant 2 168 75 150 d majority are likely to be fixed. Total 274 180 334 Rate covenants are adequate,including a 1.25 times(x) administrative processes and streamlined financial net revenue pledge for senior lien bonds and 1.Ox „d for subordinate lien bonds. Additional bonds tests accounting procedures. Currently, a 25-member are 1.25x maximum annual debt services(MADS)and board of directors, composed of appointed l MARS representatives from 21 cities, unincorporated areas of the county, and three special districts, is ,mli ■ Strengths responsible for overseeing the district's operations. • Essential service. The district provides wastewater treatment to • Strong liquidity and financial position. approximately 2.4 million customers in 21 cities and u+ • Stable revenue sources, three special districts representing approximately • Competitive rates. 79% of the county's population. Facilities include • Management taking prudent and proactive steps 200 miles of local sewers; 450 miles of trunk and toward meeting full secondary treatment force mains, with 12 trunk lines; 22 pump stations; `� standards under the CWA. and two treatment plants.Together,the two treatment • Large service area with diverse economic plants have primary and secondary treatment underpinnings. capacities of 274 mgd and 180 mgd,respectively(see bw table above). ■ Risks • Sizable and time-sensitive capital program. Plant 1 is located in Fountain Valley, about four m • Rising debt burden to meet capital program costs. miles from the coast, and Plant 2 is located in • Above-average variable-rate exposure. Huntington Beach, 1,500 feet from the ocean at the mouth of the Santa Ana River. The plants provide ■ Legal Provisions advanced primary treatment of sewage for g approximately one-half of the flow, in accordance "� The series 2003 fixed-rate certificates of participation with a 301(h) waiver from the full secondary (COPS)are secured by a first lien on wastewater system treatment standards of the CWA.The treated effluent net revenues. The district is required to set and collect is then released into the Pacific Ocean through a deep ,w rates and charges for each year such that net revenues ocean outfall pipe,which runs 200 feet deep and five equal 125%of MADS on all senior obligations and net miles offshore. operating revenues equal 100% of MADS on all obligations. The debt service reserve fund will sustain The average yearly flow has remained relatively Lft an amount equal to the least of: MADS; 10% of the stable over the past five years at 240 mgd.Currently, proceeds at issuance; or 125% of average annual debt the system only treats about 120 mgd to secondary service.The district is limited in the issuance of further treatment standards, well below its capacity of debt by an additional bonds test of 1.25x set by 180 mgd. Therefore, the existingsystem is not et at '�' historical or projected revenues. After this new money capacity; however, the board has approved a capital issue,the district will have approximately$645 million plan to go toward full secondary treatment by 2013. in parity bonds outstanding. ■ District and Operations ■ Environmental Compliance The OCSD operates under the terms of a modified In 1998, the Orange County Board of Supervisors national pollution discharge elimination permit, a approved consolidating the nine separate special pursuant to section 301(h) of the CWA. The 301(h) sewer districts into one single entity, the OCSD. modification to the permit was issued to allow less This consolidation simplified governance and than full secondary treatment based on an ocean m Orange County Sanitation District,California 2 U.6 FitchRatings Public Finance ,m discharge of sufficient depth, distance, and dilution. fees directly from customers through a monthly The district was the first major wastewater treatment billing procedure. facility to receive such a permit. The district administration has successfully demonstrated to state In 2002, the board approved a five-year rate m and federal agencies that the effluent discharge has structure, including annual 15% rate hikes through resulted in no ocean environmental degradation. 2008. However, annual increases are subject to annual renewal votes by the board. The district A new permit was reauthorized in May 1998 and estimates that the annual increases in residential m expired on June 6,2003 but currently remains in effect sewer service charges will average 11.8% through under an administrative grant of permission until the fiscal 2013.No rate increases have been approved by EPA and Regional Water Quality Control Board the board beyond fiscal 2008. Ual (RWQCB) issue a new permit. Renewable every five years, the district reports having met all conditions as Pursuant to a recent board revision in 2003, imposed by the waiver. Nevertheless, failure to renew residential capacity charges will be consolidated into the permit is a credit concern and will add significant one yearly charge of$100 for most of the revenue '2w costs to the operating and capital budgets. If not areas. Industrial capacity charges are applicable to renewed,the district would be required to treat 100% customers discharging high strength and volumes of its wastewater to secondary levels. into the system. These charges are billed directly by 1=0 the district and charged based on the customer's However,the board resolved to upgrade the treatment to sewage volume, concentration of suspended solids, secondary standards in June 2002 and submitted an and biochemical oxygen demand. application to the EPA and RWQCB in December 2002. Lod The district projects$531.8 million in additional capital Connection charges are one-time fees paid when costs through 2013 to achieve full secondary treatment property is developed and connected to the system. Additionally, the added secondary treatment capacity Member cities and sanitary districts collect the will increase the system's operating costs by charges for the district when building permits are '_' $7.2 million annually. issued. Connection fees accounted for $9.5 million in 2002. In summer 1999,an eight-mile stretch of beaches was Lod closed in the Huntington Beach community due to ■ Financial Operations excessive levels of bacteria found in the water. District financial operations are sound, as Various health and environmental agencies demonstrated by a diverse revenue stream and strong conducted a three-month investigation and concluded liquidity. Revenue sources include property taxes, that the district was not at fault. A separate internal capital facilities charges, capacity rights, permit and review concluded that no district facility contributed inspection fees,and interest earnings.The district has to the excessive bacteria levels and that the managed moderate operating surpluses in recent wastewater system's capacity was not adversely years,further adding to reserve levels. affected. An interagency investigation continues to try to identify the source of the contamination. The largest revenue component is residential capital facility charges equaling approximately 43%of fiscal ■ Rates 2002 revenue.Ad valorem property taxes are the next Capital facility charges, the district's traditional largest revenue source, totaling 25%. The district utility service charges, are reasonable and receives about 2.5%of the county's 1.0%ad valorem competitive compared with those of other similar property tax levy. Property tax revenue should systems. The district's board has autonomous increase as a percentage of the operating budget as authority to establish fees and charges without review the district's assessed valuation continues to or approval by other agencies. grow. Residential customers constitute 92.2% of capital facilities charge revenues. Industrial Capital facility charges are collected from property customers represent only 7.8%of total revenues,with owners through the semiannual property tax bill the top 10 industrial customers making up a low distributed by the county. However, there are a few 3.4%;as a result,the concentration risk is minimal. areas within the district in which the district collects Orange County Sanitation District,California 3 am FitchRatings Public Finance Financial Operations ($Mil.,Fiscal Years Ending June 30) Historical Projected 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Revenues 132.7 148.5 160.7 162.0 162.4 172.4 191.3 204.3 224,9 249.2 276.4 299.8 325.1 336.0 342.9 O&M Expenses 54.7 59.4 62.3 68.6 81.3 93.0 94.3 95.6 96.9 98.2 99.6 100 8 102.1 103.5 104.8 Not Revenues 78.0 89.1 98.4 93.4 81.1 79.4 97.0 108.7 128.0 151.0 176.8 199.0 223.0 232.5 238.1 Total Debt Service 29.4 29.9 30.5 23.4 27.8 37.0 45.9 54.8 72.3 86.9 98.7 109.8 117.2 119.1 119.2 tad DSCR(x) 2.66 2.97 3.23 3.99 2.92 2.15 2.11 1.98 1.77 1.74 1.79 1.81 1.90 1.95 2.00 Ending Reserves 344.1 400.4 440.5 429.7 367.2 402.1 347.7 385.7 419.2 441.1 461.9 474.4 467.4 464.4 472.3 O&M-Operations and maintenance.DSCR-Debt service coverage ratio. Debt service coverage is projected at 2.15x, 1.74x, As part of the strategic plan,the district performed an and 2.00x in fiscal years 2004, 2008, and 2013, analysis of the proposed GWRS. In March 2001, the respectively. Coverage includes the planned issuance district entered into an agreement with the Orange "d of additional parity debt offset by revenue increases. County Water District to design and construct Coverage remains adequate under several stress case phase 1 of the GWRS. Upon completion of phase 1, scenarios, including escalating variable-rate interest GWRS would produce 72,000 acre-feet per year of 13a and slower-than-projected property tax growth.. secondary treated effluent by 2007, with a capacity to divert 100 mgd of flow from the district's Including these bonds, variable-rate exposure will ocean discharge. Projects through 2020 include constitute approximately 32% of the district's total rehabilitation of existing facilities, new collection W+ COPs (includes synthetically fixed COP issues). systems, and water conservation and long-term Future issuance may also include variable-rate reduction projects, as well as miscellaneous support transactions, which will increase interest rate facilities.Revisions to the previous assumptions have exposure. The above-average variable-rate exposure been made, including population and land use Uzi presents a credit concern, which is mitigated projections, as well as building activity levels and somewhat by the district's substantial cash reserves. wastewater flow projections. The district's cash reserves were $435.9 million, of ,mm which approximately $300 million is for capital ■ Service Area projects for fiscal 2002. The district provides regional wastewater collection, treatment, and disposal for much of Orange County ■ Capital Improvement Program and is the third largest wastewater discharger west of 'CJ The district's long-term master plan integrates the Mississippi River. The service area includes research facility planning, environmental analysis, 471 square miles,21 cities,three special districts,and toxic control, water conservation and reclamation, unincorporated areas of Orange County. Located t4w sludge reuse, other wastewater programs, and immediately south of metropolitan Los Angeles, financial planning. The capital improvement program Orange County is the third most populous county in (CIP) is composed of 136 large capital projects and California and the fifth most populous in the nation. 43 special projects through fiscal 2020. The economy is characterized as strong, with a m, diversified and growing employment base. The master plan was recently updated with a strategic plan extending through fiscal 2020. Financing for the The service area is primarily residential and has a CIP projects, including the upgrade to 100% population of approximately 2.4 million (79% of the `� secondary treatment, is$2.149 billion, 60%of which county). From 1999-2002, the county population will come from the issuance of long-term debt. The increased approximately 23.6%, compared with remaining 40% of the needed funding will be 18.8% and 14.2% for the state and nation, ,m, provided on a pay-as-you-go basis. The funds for the respectively. The district projects the population to pay-as-you-go portion of the CIP will be taken from reach 2.6 million by 2020. cash reserves; however, levels should remain consistent. The annual debt service will increase The county's labor force continues to grow, while substantially over the life of the master plan,but the unemployment remains below state and national district's debt load should remain manageable. averages. Employment has increased an annual Orange County Sanitation District,California 4 �. FitchRatings Public Finance average 1.8% for the past four years. Employment Assessed values in the county have risen 8.8% since within the county is diversified, with the services 2000, including a healthy 6.9% hike this past year. industry accounting for 34.3% of jobs, followed by Building permit levels have remained fairly steady, retail trade at 15.7% and manufacturing at 13.1%. Per capita income levels are above average at ea The county's unemployment rate continues to be low $36,000 and exceed those of the state and nation at at 3.9% in July 2003, well below the state's 8.8%in $32,000 and$29,000,respectively. July. Property values,after stagnating in the early and mid- 1990s, have increased strongly in recent years. had beet am tad Mks taatl t� ease Copyright O 2003 by Fitch,Inc.,Fitch Ratings Ltd.and its subsidiaries.One State Street Plaza,NY,NY 10004. Telephone:1-800-7534824,(212)908.0500. Fax:(212)480.4435.Reproduction or retransmission in whole or in pan is prohibited except by permission. All rights reserved. All of the information contained herein is based on information obtained from issuers,other obligors,underwriters,and other sources which Fitch believes to be reliable. Fitch does not audit or verify the truth or accuracy orally such information.As a result,the information in this report is provided"as is"without any representation or warranty of any kind.A Fitch rating is an opinion as to the hold creditworthiness of a security. The rating does not address the risk of loss due to risks other than credit risk,unless such risk is specifically mentioned Fitch is nut engaged in the offeror sale of any security. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled,verified and presented to investors by the issuer and its agents in connection with the sale of the securities.Ratings maybe changed,suspended,or withdrawn at anytime for any reason in the sole discretion of Fitch. Fitch does not provide investment advice or any sort_ Ratings are not a recommendation to buy,sell,or hold any security. Ratings do not comment on the adequacy of market price,the suitability of any security for a particular investor,or the tax- exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers,insurers,guaranlars,other obligors,and underwriters for rating securities. 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Due to the relative efficiency of electronic publishing and distribution,Fitch research maybe available to electronic subscribers up to three days earlier than to print subscribers. l� Orange County Sanitation District,California 5 tlosi r r M r r M 8/22/03 ORANGE COUNTY UNHEALTHY BEACHES: D.A. Nol to A STUDY OF GOVERNMENTS' FAILED MITIGATION EFFORTS Orange County citizens and visitors get sick from swinmLing in coastal waters from exposure to Pathogens (bacterial, viral, protozoan) contamination due to sewage spills and urban runoff: • Unattractive Coastal recreation. • Less visits to Orange County beaches, coastal & surrounding cities . • Increased human suffering & associated health costs. • Loss of recreational & tourist dollars. • Negative impact on business activity & property values. Coastal Water Health Advisories: 2003 Postings continue as they did in 1999-2002 • Numerous bacterial contamination source studies (e.g. Santa Ana River Mouth) . Consider the following Problem Description and Evaluation: 1) Elevated levels of fecal bacterial indicators in Shoreline waters: • Public Health violations under AB411. • 1999 law implements incorrect bacterial standards. • Published journal papers (Valiela, I. , et al, 1991; Ferguson, C.M. , et al, 1996; Noble, R.T. , et al, 2003) challenge these standards. • These advisories are probably useless because: -Temporal characteristics of Pathogen distributions & microbial test results delays; & -Normal background levels of enterococcus & other Fecal bacteria indicators have not been established for various ecosystems . • RECOMMEND: an Advisory based on a "sickness risk assessment" for each beach segment & not on the "single most recent sample" basis . 8/22/03 D.A.Nolta Page 2 of 4 2) For most cases, Sources of non-compliant fecal bacterial indicators levels have not been identified: • Sources assumed to be urban runoff transported to coastal waters via "storm drains" & urban streams (county flood control channels) . • Given OCSD' s partially treated sewage has been chlorinated (pathogens are supposedly killed) prior to its discharge to the ocean. • A third possible source of fecal bacterial indicators and/or pathogens: -Bacteria can exist in storm drains, urban streams. rivers & sediments. -Bacteria may regrow in these reservoirs given the right grown conditions. -Shoreline waters inoculation: tidal flushings of these possible incubators. -RECOMMEND: A study of fecal indicator bacteria regrowth in storm drains, marine and freshwater sediments, & bacterial inoculation of shoreline waters by a tidal flushing mechanism in Orange County. 3) Urban runoff inputs to Storm Drains can not be mitigated successfully by Best Management Practices (BMP) over the long-term because: • Nature of runoff: non-point sources structure. • Unreliability of cities, county & Caltrans implementations : limits imposed by budget constraints & bureaucratic incompetence. • Fancy propaganda "impressions" & "Water Quality Police" : -Short-term runoff curtailment -Little long-term runoff reduction effect on a "Materialist/Disposal- minded society. 4) Urban runoff outputs from Storm drains and Urban Streams can only be diverged to the sewer system at accessible points at reasonable costs & during the dry season: • Diversions cause Urban constructed wetlands to lose life sustaining water inputs. • BMPs (visual inspection & preventive maintenance) for inaccessible storm drains & urban streams will not be reliably implemented: -Runoff will be allowed to flow in the ocean. 8/22/03 D.A.Nolta Page 3 of 4 5) Federal Clean Water Act and its resulting National Pollulant Discharge Elimination System (NPDES) permit and citation structure can not achieve their intended goals given the complex chaotic structure and dynamics of the Urban Watershed and the inability of governmental agencies to be regulated. • the "VALUE OF A RULE" principle violated • Consider the Newport Beach Seashore Drive-Caltrans Pacific Coast Highway (PCH) Storm Drain' s contribution to the Santa Ana River Mouth health advisories has not been curtailed. -This West Newport Beach Watershed & Seashore Storm Drain illustrates the model of failure of governmental multi-agencies to effectively perform their responsibilities under federal & state law. -In 2002 . a discovery of this drain' s submerged outfall & sand-filled PCH pipe was made only after OCSD published their March 2002 Onshore Investigation report. This report appears to have motivated the County of Orange to investigate this storm drain in May 2002 . In September 2002, the drain was purged & cleaned of sand, debris, & stagnated water. Also, this drain' s outfall flap-gate was fully exposed after removal of the surrounding sand in the river. -Preliminary analysis suggests the following observations : i) that Caltrans, the County of Orange, & the City of Newport failed to abide by their individual NPDES permits; ii) Caltrans along with the City of Newport Beach may have created a bad drain design in regards to this drain' s outfall river location given the ability of the tides & the river to transport sand; iii) Caltrans, County of Orange Flood Control Agency & City of Newport Beach appear to have performed no preventive maintenance on this drain; & iv) The California Regional Water Ouality Control Board, Santa Ana Region appears to have performed no oversight/enforcement responsibility per its NPDES permit authority over the City of Newport Beach, the County of Orange & Caltrans. • This drain' s prohibitive discharge may be continuing today. And, there are no "Urban Runoff Warning Signs" posted at the Santa Ana River mouth as of 8/17/03 . 8/22/03 D.A.Nolta Page 4 of 4 6) West Newport Beach Watershed and Seashore Storm Drain issue • serves as a very important experiment in identifying effective Non-Diversion or Diversion strategies for curtailing Urban runoff & its associated pollutant constituents discharges into the coastal waters. -An effective strategy must be feasible from an engineering perspective, reliable, & economically viable. 8/18/03 ORANGE COUNTY tJN MALTHY BEACHES: D.A. Nol to A STUDY OF GOVERNMENTS' FAILED MITIGATION EFFORTS Orange County citizens and visitors may suffer sickness as a result of swimming in coastal water because of Pathogens (bacterial, viral, protozoan) contamination due to sewage spills and urban runoff. Coastal recreation may be no longer attractive to them. People are less inclined to visit Orange County beaches, coastal and surrounding cities. As a result of this sickness, there may be human suffering and associated health costs. Also, a by-product of this reduction of recreational activity is the loss of recreational and tourist dollars and its impact on business activity and property values. Given that Coastal Water Health Advisories continue to be posted along our coast in 2003 (also occurred in 1999-2002) after numerous scientific investigations and studies into the causes of bacterial contamination of our marine waters (e.g. Santa Ana River Mouth) ; Consider the following problem description and evaluation. 1) These health advisories are the result of elevated levels of fecal bacterial indicators in the shoreline waters that are Public Health violations under AB411 . This 1999 law actually implements incorrect bacterial standards . There are published journal papers (Valiela, I . , et al, 1991; Ferguson, C.M. , et al, 1996; Noble, R.T. , et al, 2003) that challenge the validity of AB411. Further, these advisories are probably useless because of the temporal characteristics of pathogen distributions and microbial test results delays. Further, normal background levels of fecal bacteria indicators including enterococcus have not been established for various ecosystems . Coastal Water Health Advisories should be based on a "sickness risk assessment" for each beach segment and not on the current single most recent sample basis . 2) In most cases, the sources of non-compliant fecal bacterial indicators levels have not been identified. Currently, it is assumed that sources are bacterial contaminated urban runoff that is transported to the coastal waters via city, county and Caltrans "storm drains" and county flood control channels (urban streams) . Government officials believe this assumption is true because the OCSD' s partially treated sewage has been chlorinated (pathogens are supposedly killed) prior to its discharge to the ocean. Actually, there is a third possible source of fecal bacterial indicators and/or pathogens . Bacteria can exist in storm drains, urban streams, rivers and sediments. Given available nutrients and necessary grown conditions, the bacteria may regrow in these reservoirs . One transport mechanism to inoculate the shoreline waters may be the tidal flushings of these possible incubators . 8/18/03 D.A.Nolta Page 2 of 3 A study of the hypothesis of regrowth of fecal indicator bacteria in storm drains, marine and freshwater sediments, and bacterial inoculation of shoreline waters by a tidal flushing mechanism in Orange County should be undertaken by the County of Orange; 3) Urban runoff inputs to these storm drains can not be mitigated successfully by Best Management Practices (BMP) over the long-term because of the nature of runoff (non-point sources structure) and unreliability of cities, county and Caltrans implementations (limits imposed by budget constraints and bureaucratic incompetence) . Fancy propaganda "impressions" and "Water Quality Police" may create short-term runoff curtailment but most likely have little long-term runoff reduction effect on a "Materialist/Disposal-minded society; 4) Urban runoff outputs of storm drains and urban streams can only be diverged to the sewer system at accessible points at reasonable costs and during the dry season. Diversions cause Urban constructed wetlands to lose life sustaining water inputs . At the inaccessible storm drains and urban streams, BMPs (visual inspection and preventive maintenance) will not be reliably implemented and, thus, runoff will be allowed to flow in the ocean. 5) Federal Clean Water Act and its resulting National Pollulant Discharge Elimination System (NPDES) permit and citation structure can not achieve their intended goals given the complex chaotic structure and dynamics of the Urban Watershed and the inability of governmental agencies to be regulated. This is a classical case of government not understanding the principle of "VALUE OF A RULE" where one must demonstrate scientifically the intended effect as the rule is played out in a complex chaotic system. For example, the Newport Beach Seashore Drive-Caltrans Pacific Coast Highway (PCH) Storm Drain' s contribution to the Santa Ana River Mouth health advisories has not been curtailed. This West Newport Beach Watershed and Seashore Storm Drain illustrates the model of failure of governmental multi-agencies to effectively perform their responsibilities under federal and state law. In 2002 . a discovery of this drain' s submerged outfall and sand-filled PCH pipe was made only after OCSD published their March 2002 Onshore Investigation report. This report appears to have motivated the County of Orange to investigate this storm drain in May 2002 . In September 2002, the drain was purged and cleaned of sand, debris, and stagnated water. Also, this drain' s outfall flap-gate was fully exposed after removal of the surrounding sand in the river. 8/18/03 D.A.Nolta Page 3 of 3 Preliminary analysis of the available information suggests the following observations : i) that Caltrans, the County of Orange, and the City of Newport failed to abide by their individual NPDES permits; ii) Caltrans along with the City of Newport Beach may have created a bad drain design in regards to this drain' s outfall river location given the ability of the tides and the river to transport sand; iii) Caltrans, County of Orange Flood Control Agency and City of Newport Beach appear to have performed no preventive maintenance on this drain; and iv) The California Regional Water Ouality Control Board, Santa Ana Region appears to have performed no oversight/enforcement responsibility per its NPDES permit authority over the City of Newport Beach, the County of Orange and Caltrans. At this time, I have requested relevant design and maintenance documents from Caltrans and the City of Newport Beach that will allow me to further detail and understand the causes of this apparent fiasco of government oversight. Note that this drain' s prohibitive discharae may be continuing today. And, there are no "Urban Runoff Warning Signs" posted at the Santa Ana River mouth as of 8/17/03 . 6) West Newport Beach Watershed and Seashore Storm Drain issue serves as a very important experiment in identifying effective Non-Diversion or Diversion strategies for curtailing Urban runoff and its associated pollutant constituents discharges into the coastal waters . Note that an effective strategy must be feasible from an engineering perspective, reliable, and economically viable. GOJ�ZY SAMIT�TOH � o c o � q0T �clNQ�rHE August 27, 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. In summary, the District's secondary treatment is operating at the staff-projected capacities. The final effluent disinfection system produced the lowest bacteria input to the ocean since the program began a year ago. The final effluent result for the month of July was a blend of 63% secondary treatment and 37% primary treatment, which is slightly under 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 July BOD and TSS were 62 ppm and 34 ppm, respectively. 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. July 2003 results for total coliform averaged about 1,000 MPN/100 mL down from an average bacteria level in the final effluent of 25,000,000 MPN/100 mL prior to disinfection. After dilution across the outfall diffuser 4 plus miles offshore, the bacteria at this level are non-detectable. The final effluent had a maximum 0.10 ppm chlorine residual averaged over eight hours on any 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:1wp.dta%om18101FINALMO1BOARD of DIRECTOWBOARD Handouts10827031M-082703 Board Packet Cover Letter.doc Attachments (2) OCSD • P.O.Box 8127 0 Fountain Valley,CA 92728-8 1 27 0 (714)962-2411 J Orange County Sanitation District Operational Treatment Levels b Revision 8127103 N Final Effluent Monthly Data 76% Percent Secondary Treatment Monthly Average 72% 70% -----------------•-----67/0 ----•--- 66 --•---69-%.....68'/e... --•-- 68%..................... 66°/ 0 68/o 0 65% -----------•-------------------- ----•----•--.....---....----------------------------- ......... ------- ---------- Winter 2002 Goal=64% 63 0 60% ----------57% 5t8%n. -----------••....................................•--.......---•-•--•--...........-......... 56% 55% -----•---•--•------------------------------------•--------------•-------------...------•-------------------------•----- 50% -•................•----.-........----.......----•--.....-----------....----••-•-----•----------•----------------------- 45% ••-•.........................................•-------...------•-------------......-------------••---------------------- 40% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2002 2003 Total Suspended Solids (TSS) Biochemical Oxygen Demand (BOD) ppm in Final Effluent ppm in Final Effluent 100 100 so --------------- so 1998 Permit Limit=100_PFn?.--- 80 ----•------------------------------------------------------------------------------------------------------------ so ---•---....-•----•---....................------......-•-------•-------------•-•-------------------------- 70 - -------- 70 .... ............................................................ .......----- 1998 Permit Limit=60 ppm B0 5858 e 60 59 60 so . b 68 62 832 50 -------------------------------•-----.....----.........---..........------••--••----------------------... 43 40 ------------ -�---•---36---------35--------33--•---38........3..---...34-------- 4 AO ------...........................•-•-•-----------.....---•----............--•--•---•----•------•--------- 30 30 Secondary Standard Goal=30 ppm Secondary Standard Goal=30 ppm 20 ----------------------------------------------------------------------------------------------------------------- 20 - 10 10 ----•-----••-•----•-•-•-------------------------•.....--•••...........-----------•----•••.....--•-----... 0 0 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2002 2003 2002 2003 v A 1jli ~= �° 0 -aiicre County Suiritation District 1 Operational Treatment Levels r7,6 rM r. Fiscal Year 2001 -02 Ending June 2002 Progress to Secondary Standards (Prior to July 17, 2002 Board decision) Month: July 2003 47% Advanced Advanced Primary Ocean Pipeline Primary Ocean Pipeline Water Water Disinfection& Mixed Mixed Dechlorination 53% 63% OnUne:Aug.12.2002 Secondary Final Effluent: Secondary BOD = 72 ppm TSS = 51 ppm Bacteria Reduction: 99.999+% Goal: 99.3% Reduction Ocean Discharge Chlorine Limit Chlorine Level Permit Limit: Daily Maximum: 1.45 ppm Daily Maximum: 0.10 ppm BOD = 100 ppm (Average of 8 Samples) TSS = 60 ppm Final Effluent: Final Effluent Go BOD = 62 ppm BOD = 30 ppm TSS = 34 ppm TSS = 30 ppm August 26, 2003 CONFIDENTIAL MEMORANDUM TO: Members of the Board of Directors FROM: Blake P. Anderson General Manager a64 SUBJECT: Term Sheet between OCSD and SAWPA Regarding the Reach of the Santa Ana Interceptor from the County Line to Savi Ranch, the "Subject Reach" As you will recall, the Sanitation District and Santa Ana Watershed Project Authority (SAWPA) have been in a several-year dispute regarding the reimbursement of certain engineering and administration costs borne by the Sanitation District for evaluating and implementing alternatives for protecting the four-mile portion of the Santa Ana River Interceptor (SARI) from the Savi Ranch east to the county line, commonly referred to as the "Subject Reach." Beginning in June of this year, Joe Grindstaff, the SAWPA General Manager, and I met in mediation sessions facilitated by Gary Hunt. I am pleased to report that a term sheet has been completed that meets the objectives that I was directed to achieve, namely; that the Sanitation District be reimbursed for its costs plus interest related to the Subject Reach improvement studies and to provide a way for resolving some of the institutional conflicts that the two agencies have experienced. The term sheet is attached. Once signed by both agencies. SAWPA has agreed to pay the Sanitation District the first $1 million of the disputed amounts that OCSD has invoiced SAWPA. The next step will be to develop and sign a formal agreement between the two agencies that will result in SAWPA paying the remaining disputed amount, approximately $1 .8 million. The term sheet also contemplates—under the condition of certain precedent events occurring—the sale of the Subject Reach to SAWPA, SAWPA removing itself entirely from the reaches of the SARI line downstream of the disputed reach, and the sale of certain portions of SAW PA's capacity rights in the SARI line and our treatment plants to the Sanitation District. The major deal points of the term sheet are as follows: 1. SAWPA and OCSD agree to share all costs incurred by both parties on the Subject Reach based on a 76% cost share by SAWPA and 2410 cost share by OCSD. 2. Interest will be paid at the LAIF rate for all past invoice balances aged more than 90 days. For future invoices, interest applies to balances aged more than sixty days for administrative and engineering work, forty-five days for construction related invoices. 3. SAWPA will pay OCSD $1 million when the term sheet has been signed by both parties. Board of Directors Page 2 August 26, 2003 4. SAWPA will pay OCSD the remaining amount owed, plus interest, currently estimated to be $1.8 million. when the formal agreement is signed. 5. Both parties will allow the County of Orange's Public Facilities and Resources Department to proceed with improvements to the Subject Reach. If PFRD cannot provide financing for the project, SAW PA and OCSD will work with PFRD to secure funding. 6. SAWPA and OCSD will develop interim operational protocols to protect the SARI line until permanent improvements are completed. 7. SAWPA may exercise an option to purchase the Subject Reach after certain feasibility studies are completed. 8. If SAWPA exercises the purchase option, SAWPA will reimburse OCSD for the costs to design and build a new Yorba Linda spur line that OCSD will use in lieu of the Subject Reach. The reimbursement amount will constitute the purchase price of the Subject Reach. 9. In 48 months. if SAWPA has not exercised its purchase option and PFRD has failed to improve the Subject Reach, then OCSD can proceed with improvements to the Subject Reach and will be reimbursed by SAWPA for 76% of the costs. 10. At such time as SAWPA completes its own independent brine line and ceases discharge to our plants, OCSD will sell back all treatment plant capacity previously purchased by SAWPA that SAWPA no longer uses. SAWPA will retain its ownership rights in the ocean outfall. 11. If SAWPA builds its new independent brine line, OCSD will buy certain hydraulic capacity in the SARI owned by SAWPA if OCSD needs it, as determined by OCSD. Recommendation I recommend that the Board approve the term sheet dated August 25 and that the General Manager and General Counsel be authorized to negotiate a formal agreement that will be referred to the Board at a future meeting for consideration and approval. BPA:jt p%wp.d1MadmmV Manderson blake\corres03\082603 bd re sawpa term sheet ml.doc Term Sheet between Orange County Sanitation District and Santa Ana Watershed Project Authority I. GUIDING PRINCIPLES A. Use this opportunity to achieve a resolution of all outstanding issues between OCSD and SAWPA which will culminate in the creation of a clear separation of operational and policy responsibilities; the end result will be the enhancement of the Institutional Integrity of each agency. B. This agreement facilitates OCSD and SAWPA continuing to work together in the pursuit of resolving those issues as identified in the proposed cease and desist order dated April 2003 by RWQCB. C. All agreements reached through this process will be founded on mutual benefits to the agencies, sound business judgment, and good public policy. II. ISSUES RESOLVED A. Cost Allocations, Interest Computations,and Payment Commitment 1. With the goal of addressing all outstanding issues between OCSD and SAWPA and creating institutional integrity between the parties, SAWPA and OCSD agree to the following: a. SAWPA and OCSD, for purposes of this settlement, agree to pay all unreimbursed costs incurred by both parties for project costs for the subject SARI Reach based upon a 76% SAWPA, 24% OCSD average cost allocation, both as to pre and post November, 2001 casts not withstanding the 50150 post November, 2001 agreement of the parties. b. Both parties agree to exclude legal costs in their calculations. c. The computations on attached Exhibit "A" were reviewed and agreed to. 2. Parties agreed that interest payment was appropriate. The following concept is agreed to as a process for determining the interest owed. a. Interest shall accrue at Local Agency Investment Fund (LAIF) rates beginning 90 days from the date of each invoice on any remaining outstanding balance owed on that invoice. SAWPA.00SD.Term Sheet 8-14-03 jgl w BA's comments 8-25-03 FINAL.doc 1 1 b. The LAIF rate is defined as the monthly average rate of interest published by the State Treasurer's office and as calculated in Exhibit "A". Interest will accrue on the outstanding balance until paid. c. Interest will be computed on a simple interest basis. d. SAWPA has issued to OCSD a letter indicating the following: 1. At the signing of the term sheet and subsequent approval by both boards, which reflects a successful conclusion to the mediation process, SAWPA will pay $1,000,000 (one million dollars) to OCSD toward Settlement (i.e., total amount in Exhibit "A") of the dispute between the parties. 2. It is the intention of the parties to this term sheet to develop a more formal agreement incorporating this term sheet. Upon execution of the formal agreement, SAWPA will pay to OCSD all remaining disputed funds, plus agreed upon interest. B. Subject Reach Improvements: The SARI line from the OC/Riverside County boundary to immediately upstream of the gate at SAVI Ranch ("Subject Reach"). 1. Both parties shall allow the County of Orange, through the Department of Public Facilities and Resources Department (PFRD) to proceed with and direct the CEQA/NEPA process, design, construction, management and finance of the Subject Reach improvements. a. If SAWPA becomes the owner of the Subject Reach, it is its desire to have PFRD proceed as indicated above. b. If either party desires to expand the design, standards, or specifications as set forth by PFRD on subject project, the requesting party shall assume any and all additional costs incurred therein. 2. If PFRD cannot provide financing for this project, SAWPA and OCSD will work with PFRD to identify and assist in securing funding necessary to build these improvements. 3. Both parties agree to enter into operational protocols to ensure appropriate operational flexibility. Both parties agree: a. To submit to each other operational and maintenance protocols. b. OCSD shall have operational flexibility as it relates to the SAVI Ranch gate. SAWPA.00SD.Term Sheet 8-14-03 jgI w BA's comments 8-25-03 FINAL.doc 2 C. Future Ownership of Subject Reach 1. SAWPA wishes to purchase, and OCSD is willing to sell the Subject Reach. SAWPA is hereby granted an option to acquire the Subject Reach, consistent with the terms contained herein. a. Upon the payment of the outstanding invoices reflected in Exhibit "A" owed by SAWPA to OCSD, SAWPA may exercise its option to purchase the Subject Reach. b. Within three (3) years of execution of the formal agreement, SAWPA will complete all feasibility studies necessary for the development of the brine line to ocean outfall project and within an additional period, not-to-exceed 12 months, will notify OCSD of its interest to exercise the purchase option. c. If SAWPA has not exercised its option and PFRD fails to take affirmative action to proceed with the protection project for the Subject Reach within 48 months, OCSD and SAWPA have a mutual interest to take legal action to compel PFRD to move forward with the protection of the Subject Reach. If PFRD fails to take such affirmative action within 48 months, OCSD shall also have the right to proceed with the protection and maintenance of the Subject Reach pursuant to the terms and conditions of the 1972 agreement, as amended, between OCSD and SAWPA. 2. Upon receipt of SAWPA's written notice of exercise of option to acquire the Subject Reach, OCSD shall commence design and construction of the Yorba Linda Spur, and such design and construction shall be completed within three years from date of the Notice. SAWPA may agree to an extension of that deadline for reasonable cause. Upon completion of construction of the Yorba Linda Spur, and when it is operational, OCSD shall transfer ownership for the Subject Reach to SAWPA at no additional cost. The purpose of Yorba Linda Spur is to replace OCSD's capacity within the Subject Reach that currently serves the two turnouts in the City of Yorba Linda. D. Yorba Linda Spur (YLS) 1. Prior to the transfer of ownership of the Subject Reach, the Yorba Linda Spur, (YLS) must be built and operational, under the ownership of OCSD. The parties agree that YLS will be built to OCSD design and operational standards. 2. SAWPA shall only be responsible for administrative, design engineering, environmental documentation, and construction costs directly allocable to a YLS facility for OCSD's current capacity in the Subject Reach line not to exceed 16 MGD. Flow proportional costs associated with a facility larger than 16 MGD shall be the responsibility of OCSD. However, SAWPA shall have no obligation SAWPA.00SD.Term Sheet 8-14-03 jgl w BA's comments 8-25-03 FINAL.doc 3 a to pay such costs for the YLS unless and until SAWPA sends to OCSD the notice of exercise of option referenced in Section H C above. 3. OCSD shall provide SAWPA with a written statement and budget and supporting documentation of its not-to-exceed cost for all of OCSD's administrative staff costs associated with the planning, engineering, design, environmental documentation, public workshops, and construction of the YLS. Within 60 days of receipt of the written statement, SAWPA shall review it, accept the statement, or dispute it with specific proposed changes. The parties will attempt to resolve their differences. 4. Consistent with the above, SAWPA shall reimburse OCSD for the costs of the YLS in the following manner: a. OCSD shall provide SAWPA with invoice(s) for OCSD's administrative staff costs associated with the planning, design, environmental documentation, public workshops, and construction of the YLS. Within 60 days of receipt of each invoice, SAWPA shall review it and either pay the amount or dispute it with specific proposed changes. Any undisputed portion of the invoice shall be paid by SAWPA within 60 days. The parties will attempt to resolve the differences. If the parties cannot agree to an amount, then a third-party value engineer, selected by SAWPA and approved by OCSD, shall determine the appropriate reasonable amount SAWPA shall pay and that decision is final. SAWPA shall pay this amount within 60 days of receipt of notification by the third-party value engineer. b. OCSD shall issue RFPs for the engineering work and for the environmental work. SAWPA may participate in the selection process and may eliminate one firm at its sole discretion. The final decision to retain these firms shall be the sole discretion of the OCSD Board of Directors. The not to exceed cost proposals by the selected engineering firm and the selected environmental firm shall be reviewed by SAWPA, and if there is no objection, SAWPA will pay OCSD. Any undisputed portion of the invoice shall be paid by SAWPA within 60 days. If SAWPA has objections then a third-party value engineer, selected by SAWPA and approved by OCSD, shall determine the appropriate reasonable amount SAWPA shall pay and that decision is final. Following final approval by the third party value engineer, copies of invoices submitted to OCSD by the engineering firm and the environmental firm shall be conveyed to SAWPA as a request for payment and shall be paid, without the right of dispute, within 60 days of SAWPA's receipt of the invoice, up to the not-to-exceed amount of the contract. c. SAWPA may conduct a value engineering review after completion of preliminary design and a constructability review after completion of- construction documents. OCSD shall be obligated to address issues raised SAWPA.00SD.Term Sheet 8-14-03 jgl w BA's comments 8-25-03 FINAL.doc 4 9 by the value engineering and constructability reviews, and OCSD shall provide an appropriate and reasonable response to SAWPA. d. OCSD shall utilize its normal bidding procedures to secure the services of a construction company. The bid amount will be paid by SAWPA to OCSD in the following manner. Copies of invoices submitted to OCSD by the company shall be conveyed to SAWPA as a request for payment and shall be paid within 45 days of SAWPA's receipt of the invoice, up to the bid amount. e. Costs in excess of bid (Change Orders) will be submitted by OCSD to SAWPA. SAWPA will either agree to pay, or dispute will be submitted to a third party value engineer, selected by SAWPA and approved by OCSD, who will determine reasonableness and appropriateness of change order, costs associated therein and allocate costs accordingly. Third party value engineer decision is final. E. Brine Line Parallel to Existing SARI Line 1. SAWPA desires to propose an alternative of"direct discharge" of its new line to the OCSD outfall. OCSD agrees to the concept but does not warrant that there will be a clear technical or regulatory path to achieve this result. 2. Parties acknowledge that prior to establishing direct discharge from the new line to the outfall, SAWPA must obtain approval from the RWQCB and complete all environmental documentation deemed appropriate by Federal and State Law, and all regulatory agencies of jurisdiction. 3. Parties agree that SAWPA can proceed with the construction and operation of a second/direct brine line from its service area to the OCSD treatment plant/ocean effluent pump station. 4. OCSD shall pay SAWPA for existing SAWPA-owned treatment and disposal capacity in the treatment plant that will no longer be used by SAWPA, at a rate reflecting the value of the capacity at the time of ownership transfer to OCSD consistent with Capital Facilities Capacity Charges in Ordinance OCSD-15 and any amendment or successor thereto. Such payment shall occur upon the time of transfer. 5. OCSD shall pay SAWPA for certain SAWPA— owned pipeline capacity in the SARI line, conditioned by the following: a. OCSD shall only pay for actual necessary capacity. b. OCSD shall only pay for capacity within reaches that would otherwise require new construction to add capacity. - SAWPA.00SD.Term Sheet 8-14-03 jgI w BA's comments 8-25-03 FINAL.doc 5 9 c. The valuation for such capacity shall be based on the best available estimate of costs to meet OCSD capacity needs determined as of the date such capacity is transferred to OCSD. Payment shall occur on the date of transfer of capacity to OCSD. d. OCSD may use the capital improvement program (CIP) for purposes of determining time of transfer and capacity needs, and the subsequent value determination. e. Either party may request that an improved estimate be provided and the requested party shall pay the consulting fee necessary to develop the improved estimate. f. At the time that the new brine line is operational, OCSD shall pay SAWPA for OCSD's avoided costs of the improvements of the reaches referenced in Sections a, b, c, d and a above at a price discounted back from the theoretical time of need to the date of payout at a discount rate to be agreed by both parties. g. At the time of payment from OCSD to SAWPA, SAWPA releases 30 MGD of capacity in the pipeline from SAVI Ranch Gate to regional plant #1. 6. OCSD shall have the right to ensure the treated quality of discharge meets NPDES permit requirements, and if necessary redirect the discharge to OCSD treatment plant through a structure or system furnished by SAWPA a. If this occurs, SAWPA agrees to pay OCSD for treatment costs (i.e., O & M costs and daily rental of such capacity) used at the then prevailing rate for the period that the treatment is provided. 7. SAWPA agrees to pay OCSD for any pump station and outfall capacity it uses above the 30 MGD of capacity SAWPA owns in the current line at the time of the opening of the new line. a. SAWPA will pay for the additional outfall capacity on an as needed basis in increments of 1 MGD to the extent such capacity is available. F. Interim Upkeep and Emergency Response Plan, Invoices, and Payments 1. Until ownership of the Subject Reach is transferred to SAWPA, both parties agree to a cost sharing formula of 76:24 (SAWPA:OCSD) for preventive and emergency repairs. The parties agree that categorical costs that are eligible for cost sharing include engineering and other consultant services hired for the purpose of planning preventive and emergency repairs, the contractors hired to perform work on the Subject Reach and the staff time necessary to administer the planning and conducting the work. SAWPA.00SD.Term Sheet 8-14-03 jg1 w BA's comments 8-25-03 FINAL.doc 6 y 2. The parties agree to meet at least once annually to discuss the on going condition of the Subject Reach and to develop mutually acceptable preventive and emergency repair protocols. Protocols will include notification procedures for the parties to employ in the event of conditions that threaten the operation of the Subject Reach. 3. The parties agree to conduct studies to support informed decision making regarding scheduled preventive maintenance and preparatory actions for potential emergency maintenance of the Subject Reach. 4. Each party has responsibility to draft, propose, and obtain both agencies' boards' approval of the annual budgets to support the work. 5. Each party agrees to invoice the other for work conducted regarding the Subject Reach on a monthly basis. The parties shall develop an invoice format that is acceptable to both parties. 6. Each party agrees to pay all undisputed portions of an invoice within 45 days of the date of receiving an invoice. Interest shall accrue at the LAIF rate beginning on the 46th day after receipt of invoice. 7. Each party agrees to reach a timely resolution of disputed portions of an invoice within 90 days of the date of receiving an invoice. 8. In the event the parties cannot reach a timely resolution of a disputed portion of an invoice, then a value engineer, selected by SAWPA and approved by OCSD, shall review the disputed portion and shall make a determination that is binding on both parties. Approves!by General Managers Joe Grindstaff Date Blake Anderson Date Approved by Board of Directors/Commissioners OCSD Chair Date SAWPA Chair Date SAWPA.00SD.Term Sheet 8-14-03 jg] w BA's comments 8-25-03 FINAL.doc 7 FA H R COMMITTEE Meeting Date To Bd. of Dir. 8/13/03 8/27/03 AGENDA REPORT Item Number Item Number FAHR03-68 13 Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Michael D. White, Controller SUBJECT: CONSIDERATION OF REVISION TO DEBT POLICY GENERAL MANAGER'S RECOMMENDATION Approve staff's proposed revision to the District's Debt Policy. SUMMARY In September 2001 , the Finance, Administration and Human Resources Committee and the Board approved the District's first official Debt Policy. The policy stated that one-half of all future long-term capital improvements will be funded from long-term debt with the remaining cost funded from capital improvement reserves and current revenues. The decision to meet secondary discharge standards and to disinfect our effluent has increased the capital improvement program to $2.2 billion of facilities to be constructed over the next ten- years. It is no longer feasible to expect that 50 percent of the improvements can be paid through capital improvement reserves and current revenues without rapid and significant rate increases. Staff recommends that the limitation on debt issuance be restricted to all capital improvements that cannot be financed from current revenue. PRIOR COMMITTEE/BOARD ACTIONS: Approved original debt policy in September 2001 . PROJECT/CONTRACT COST SUMMARY N,,A BUDGET IMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. 0 Not applicable (information item) ADDITIONAL INFORMATION N/A ALTERNATIVES N/A ATTACHMENTS 1 . Proposed revised policy on debt. 0 M. FINANCE DEPARTMENT POLICY AND PROCEDURE b e Subject. Debt Policy Index: Finance Administration Number: 201-3-1 Effective Date: August 27, 2003 Prepared by: Finance Administration Supersedes: September 19, 2001 Approved By. FAHR Committee 1.0 PURPOSE: The foundation of any well-managed debt program is a comprehensive debt policy. A debt policy sets forth the parameters for issuing debt and managing outstanding debt, and provides guidance to decision makers regarding the timing and purposes for which debt may be issued, types and amounts of permissible debt, methods of sale that may be used and structural features that may be incorporated. The debt policy should recognize a binding commitment to full and timely repayment of all debt as an intrinsic requirement for entry into the capital markets. Adherence to a debt policy helps to ensure that a government maintains a sound debt position and that credit quality is protected. Advantages of a debt policy are as follows: 1.1 enhances the quality of decisions by imposing order and discipline, and promoting consistency and continuity in decision making; 1.2 rationalizes the decision-making process; 1.3 identifies objectives for staff to implement; 1.4 demonstrates a commitment to long-term financial planning objectives, and; 1.5 is viewed positively by the rating agencies in reviewing credit quality. 2.0 ORGANIZATIONS AFFECTED: General Manager's Department, Finance Department,General Counsel, bond rating agencies, financial advisors, bond underwriters, bond counsel, and external independent auditors. Page 1 of 18 i 3.0 REFERENCES: 3.1 1999 Strategic Plan Update. 3.2 1989 "2020 Vision" Master Plan. 3.3 Government Finance Officers Association publication"A Guide for Preparing a Debt Policy". 3.4 "Moody's on Municipals- An Introduction to Issuing Debt" by Moody's Investor Services. 3.5 Handbook for Muni-Bond Issuers by Joe Mysak, published by Bloomberg Professional Library. 4.0 POLICY: 4.1 Limitations on Indebtedness- 4.1.1 The District's debt capacity will not exceed legal limitations, such as coverage requirements or additional bonds tests imposed by existing bond covenants, and will not rise to a level that will impair the District's bond ratings. 4.1.2 Before any new debt is issued, the impact of debt service payments on total annual fixed costs will be analyzed. In accordance with existing COP indenture agreements, Net Operating Revenues must provide at least a 1.25 coverage ratio to the maximum annual debt service. 4.1.3 The District will restrict long-term borrowing to capital improvements that cannot be financed from current revenue. 4.1.4 Proceeds from long-term debt will not be used for current on-going operations. 4.2 Types of Debt- 4.2.1 The District may use short-term debt to cover temporary or emergency cash flow shortages. All short-term borrowing will be subject to Board approval by resolution. Page 2 of 18 t 4 4.2.2 The District may utilize Board approved intra-agency loans rather than outside debt instruments to meet short-term cash needs. Intra- agency loans will be permitted only if an analysis of the affected Revenue Areas indicates funds are available and the use of these funds will not impact current operations. The principal, along with interest at the prevailing rate as established by the District's Treasurer, will be paid to the lending Revenue Area. 4.2.3 Commercial Paper-The District may issue short-term debt in the form of Commercial Paper. Interest rates on commercial paper are generally more favorable to an issuer in comparison to other forms of debt. 4.2.4 Revenue Bonds-The District may issue as special obligations various types of revenue securities including notes, warrants, interim debentures, bonds, and temporary bonds. Securities issued as special obligations do not constitute outstanding indebtedness of the District nor do they exhaust its legal debt-incurring power. Bonding should be limited to projects with available revenue sources, whether self-generated or dedicated from other sources such as user fees. Adequate financing feasibility studies should be performed for each revenue issue. Sufficiency of revenues should continue throughout the life of the bonds. 4.2.5 Certificates of Participation-Certificates of participation are essentially leases which are sold to the public. The lease payments are subject to annual appropriation. Investors purchase certificates representing their participation in the lease. Often, equipment or facilities being acquired serve as collateral. These securities are most useful when other means to finance are not available under state law. 4.2.6 Refundings- A refunding is generally the underwriting of a new bond issue whose proceeds are used to redeem an outstanding issue. 4.2.6.1 Prior to beginning a refunding bond issue, the District will review and estimate of the savings achievable from the refunding. The District may also review a pro forma schedule estimating the savings assuming that the refunding is done at various points in the future. Following are the conditions under which the District will consider refunding outstanding bonds: Page 3 of 18 4.2.6.1.1 Present value savings are at least three (3) percent of the par amount of the refunding bonds. 4.2.6.1.2 Present value savings exceed the costs of issuing the bonds. 4.2.6.1.3 The bonds to be refunded have restrictive or outdated covenants. 4.2.6.1.4 Current savings are acceptable when compared to savings that could be achieved by waiting for more favorable interest rates and/or call premiums. 4.2.6.1.5 Restructuring debt is deemed to be desirable. 4.3 Debt Structure- 4.3.1 Debt will be structured to achieve the lowest possible net cost to the District given market conditions, the urgency of the capital program, and the nature and type of security to be provided. 4.3.2 The District will design the repayment of its overall debt so as to rapidly recapture its credit capacity for future use. 4.3.2.1 The term of District debt issues should not extend beyond the useful life of the project and generally should not extend beyond 30 years unless there are compelling factors which make it necessary to extend the term further. 4.3.3 Debt issued by the District should be structured to provide for either level principal or level debt service. Deferring the repayment of principal should be avoided except in select instances where it will take a period of time before project revenues are sufficient to pay debt service. Ascending debt service should generally be avoided. 4.3.4 Variable Rate Obligations-When appropriate,the District may choose to issue variable rate obligations, or securities that pay a rate of interest that varies according to a predetermined formula or results from a periodic remarketing of the securities. 4.3.4.1 The maximum level of variable rate obligations incurred shall not exceed the level of available invested reserves. Page 4 of 18 i I 4.3.4.2 The District will maintain an overall fixed versus variable rate debt mix allowed for the District by the Rating Agencies. 4.4 Credit Objectives- 4.4.1 The District's goal is to maintain or improve its bond ratings. To that end, prudent financial management policies will be adhered to in all areas. 4.4.2 Rating Agencies- 4.4.2.1 Full disclosure of operations will be made to the bond rating agenices. District staff, with the assistance of the financial advisors and bond counsel, will prepare the necessary materials for and presentation to the rating agencies. 4.4.2.2 The District will maintain a line of communications with the rating agencies (Moody's, Standard & Poor's, and Fitch), informing them of major financial events at the District as they occur. The Comprehensive Annual Financial Report (CAFR) shall be distributed to the rating agencies after it has been accepted by the Board of Directors. 4.4.2.3 The rating agencies will be notified when the District begins preparation for a debt issuance. After the initial contact, a formal ratings application will be prepared and sent along with the draft of the Official Statement relating to the bond sale to the rating agencies. This application and related documentation should be sent several weeks prior to the bond sale to give the rating agencies sufficient time to perform their review. 4.4.2.4 A personal meeting with representatives of the rating agencies will be scheduled every few years or whenever a major project is initiated. 4.4.3 Credit Enhancements- are mechanisms which guarantee principal and interest payments. They include bond insurance and a line or letter of credit. A credit enhancement, while costly, will sometimes bring a higher rating from the rating agencies and a lower interest rate on debt, thus lowering overall costs. Credit enhancements will only be used when net debt service is reduced by more than the cost of the enhancement. During the debt issuance planning, the Financial Page 5 of 18 Advisor will advise the District which credit enhancement if any, should be purchased. 4.4.4 Dedicated Revenue Sources- In order to ensure the most favorable credit ratings, District revenues are dedicated to debt service in the following order: 4.4.4.1 Ad valorem property tax. 4.4.4.2 Sanitary sewer service charges. 4.4.4.3 Other revenues. 4.5 Method of Sale- 4.5.1 The District will select a method of sale that is the most appropriate in light of financial, market, transaction-specific and issuer-related conditions, and explain the rationale for its decision. 4.5.1.1 Competitive Sales- Debt obligations are generally issued through a competitive sale. The District and its financial advisor will set the terms of the sale to encourage as many bidders as possible. By maximizing bidding, the District seeks to obtain the lowest possible interest rates on its bonds. 4.5.1.2 Negotiated Sales-When certain conditions favorable for a competitive sale do not exist and when a negotiated sale will provide significant benefits to the District that would not be achieved through a competitive sale, the District may elect to sell its debt obligations through a private or negotiated sale. Such determination may be made on an issue-by-issue basis, for a series of issues, or for part or all of a specific financing program upon approval by the Finance,Administration, and Human Resources Committee (FAHR). 4.6 Methods of Selecting Consultants- 4.6.1 Financial Advisor-The District will retain an external financial advisor, to be selected for a term of up to four years, through a competitive process administered by the District's Finance Department. The utilization of the financial advisor for a particular bond sale will be on a case by case basis upon recommendation by the Director of Finance and approval by FAHR pursuant to a financial advisory service Page 6 of 18 Y contract. For each District bond sale, the financial advisor will provide the District with information on pricing and underwriting fees for comparable sales by other issuers. 4.6.2 Underwriters- For all competitive and negotiated sales, underwriters will be required to demonstrate sufficient capitalization and experience related to the debt issuance. The selection of underwriters may be for an individual or series of financings or a specified time period. 4.6.3 Bond Counsel- The District will retain external bond counsel for all debt issues. All debt issued by the District will include a written opinion by bond counsel affirming that the District is authorized to issue the debt, stating that the District has met all state constitutional and statutory requirements necessary for issuance, and determining the debt's federal income tax status. Bond counsel will be selected for a term of up to four years through a competitive process administered by the District's Finance Department. The selection process will require comprehensive municipal debt experience. 4.6.4 Paying Agent- The District shall solicit periodically for paying agent services from qualified commercial and trustee banks. The cost of providing such services shall be used, along with other qualitative measurements, in developing a Paying Agent recommendation to the FAHR, along with the term of such agreement. 4.7 Disclosure and Arbitrage Compliance- 4.7.1 The District will follow all State and federal regulations and requirements regarding bond provisions, issuance, taxation and disclosure. 4.7.2 The District will monitor compliance with bond covenants and adhere to federal arbitrage regulations. Any instances of noncompliance will be reported to the FAHR. 4.7.3 The District will maintain good communications with bond rating agencies about its financial condition and will follow a policy of full disclosure in every financial report and bond prospectus (Official Statement). 4.7.4 Official Statements accompanying debt issues, CAFR's, and continuous disclosure statements will meet, at a minimum, the standards articulated by the Municipal Standards Rulemaking Board (MSRB), the Government Accounting Standards Board (GASB), the Page 7 of 18 National Federation of Municipal Analysts, the Securities and Exchange Commission (SEC), and Generally Accepted Accounting Principles (GAAP). The Finance Department will be responsible for ongoing disclosure to all Nationally Reconginzed Municipal Information Depositories (NRMSIRs) designated by the SEC and for maintaining compliance with disclosure standards promulgated by state and national regulatory bodies. 4.7.4.1 Quarterly compliance reports to NRMSIRs. 4.7.4.2 Copies of CAFR and updated tables from the Official Statement to NRMSIRs within six month of year end. 5.0 DEFINITIONS: 5.1 ACCRUED INTERST- In the sale of a new issue of municipal bonds, the dollar amount, based on the stated rate or rates of interest, which has accrued on the bonds from the dated date, or other stated date, up to but not including the date of delivery. When a bond is purchased in the secondary market, the dollar amount, based upon the stated rate of interest, which has accrued on the bond from the most recent interest payment date, up to but not including the date of settlement. Accrued interest is paid to the seller by the purchaser and is usually calculated on a 360-day year basis (assumes each month has 30 days). 5.2 ADDITIONAL BONDS TEST- Refers to legal test found in resolution or ordinance securing bonds; governs ability to issue additional bonds having the same lien on pledged revenues. Usually expressed as a ratio in which historic earnings meet certain levels of future debt service coverage. 5.3 ADDITIONAL OBLIGATIONS TEST- Refers to legal test found in the resolution which governs an agencies ability to issue additional obligations having the same lien on pledged revenues. The District's additional obligations test is expressed as a ratio in which historic earnings must meet or exceed certain levels of future obligation service coverage. 5.4 AD VALOREM TAX- A direct tax based "according to value" of property. Counties and school districts and municipalities usually are, and special tax districts may be, authorized by law to levy ad valorem taxes on property other than intangible personal property. Local government bodies with taxing powers may issue bonds or short-term certificates payable from ad valorem taxation. 5.5 ADVANCE REFUNDING- A method of providing for payment of debt service on a bond until the first call date or designated call date from available funds. Page 8 of 18 Advance refundings are done by issuing a new bond or using available funds and investing the proceeds in an escrow account in a portfolio of U.S. government securities structured to provide enough cash flow to pay debt service on the refunded bonds. 5.6 AMORTIZATION-The process of paying the principal amount of an issue of bonds by periodic payments either directly to certificate holders or to a sinking fund for the benefit of certificate holders. Payments are usually calculated to include interest in addition to a partial payment of the original principal amount. 5.7 ARBITRAGE- With respect to the issuance local government obligations, arbitrage usually refers to the difference between the interest paid on the certificates issued and the interest earned by investing certificate proceeds. Arbitrate profits are permitted on bond proceeds for various temporary periods after issuance of local governmental obligations. Internal Revenue Service regulations govern arbitrage of local government obligation proceeds. 5.8 ARBITRAGE REBATE REQUIREMENTS- Arbitrage profits from the investment bond proceeds held within construction funds, obligation service reserve funds, and capitalized interest accounts that are invested in taxable instruments must be rebated to the U.S. Treasury Department. 5.9 AVERAGE COUPON- Weighted average interest cost of an issue. 5.10 BASIS POINT- Yields on municipal securities are usually quoted in basis points where one basis point is equal to 1A00 of one percent. 5.11 BOND- Written evidence of the issuer's obligation to repay a specified principal amount on a date certain (maturity date), together with interest at a stated rate, or according to a formula for determining that rate. Bonds are distinguishable from notes, which mature in a much shorter period of time. 5.12 BOND COUNSEL-An attorney(or firm of attorneys)retained by the issuer to give a legal opinion on the legality and security of the issue and its tax exemption or taxability. Typically, bond counsel may prepare, or review and advise the issuer regarding, authorizing resolutions or ordinances, trust indentures, official statements, validation proceedings and litigation. 5.13 BONDED DEBT- The portion of an issuer's total indebtedness as represented by outstanding bonds. 5.14 BOND INSURANCE- An insurance policy purchased by an issuer or an underwriter for either an entire issue or specific maturities,which guarantees Page 9 of 18 the payment of principal and interest. This security provides a higher credit rating and thus a lower borrowing cost for an issuer. Bond insurance can be purchased directly by the District prior to the bond sale(direct purchase)or at the underwriter's option and expense (bidder's option). The District will attempt to qualify its bond issues for insurance with bond insurance companies rated AAA by Moody's Investors Services and Standard and Poor's Corportion when insurance is appropriate. 5.15 BOND RESOLUTION OR ORDINANCE- The document or documents representing action of the issuer authorizing the issuance and sale of municipal bonds. Issuance of the bonds is usually approved in the authorizing resolution or ordinance, and the sale is usually authorized in a separate document known as the "sale" or "award" resolution. All of such resolutions, read together, constitute the bond resolution, which describes the nature of the obligation and the issuer's duties to the bondholders. 5.16 BROKER-A person or firm, other than a bank,which acts as an intermediary by purchasing and selling securities for others rather than for its own account. 5.17 CALLABLE BOND- A bond which permits or requires the issuer to redeem the obligation before the stated maturity date at a specified price, usually at or above par by giving notice of redemption in a manner specified in the bond contract. 5.18 CAPITALIZED INTEREST- A portion of the proceeds of a bond issue set aside, upon issuance of the bonds, to pay interest on the bonds for a specified period of time. Interest is commonly capitalized during the construction period of a revenue-producing project. 5.19 CERTIFICATES OF PARTICIPATION- Obligations of a public entity based on a lease or installment sale agreement. These are not considered debt under Article 13 of the California Constitution. 5.20 CERTIFICATE HOLDER- The owner of a municipal certificate of participation to whom payments of principal and interest are made. Generally certificates are registered, and the owner is the person whose name is noted on the certificate register. 5.21 CERTIFICATE REGISTER- The listing of names and addresses of the current registered owners of the certificates, as maintained by the trustee or certificate registrar. 5.22 CAPITALIZED INTEREST- A portion of the proceeds of a certificate issue set aside, upon issuance of the certificates, to pay interest on the certificates Page 10 of 18 f for a specified period of time. Interest is commonly capitalized during the construction period of a revenue-producing project. 5.23 COMPETITIVE SALE- The sale of bonds through sealed bids. 5.24 COST OF ISSUANCE- The expenses associated with the sale of a new issue of municipal securities, including such items as underwriter's spread, printing, legal fees, and rating costs. 5.25 COVENANTS- The issuer's enforceable promise to perform or refrain from performing certain actions. With respect to municipal bonds, covenants are generally stated in the bond contract, resolution, or indenture. 5.26 COVERAGE-The ratio of pledged revenues available annually to pay debt service obligation, as compared to the annual debt service obligation requirement. This ratio is one indication of the margin of safety for debt service obligations. 5.27 CREDIT ENHANCEMENT- The availability of additional outside support designed to improve an issuer's own credit standing. Examples include bank lines of credit or collateralized funds. 5.28 CURRENT REFUNDING-A method of providing for payment of debt service on a bond until the first call date or designated call date from available funds. Current refundings are done by issuing a new bond or using available funds and investing the proceeds in an escrow account for a duration of 90 days or less. The escrow account consists of a portfolio of U.S. government securities structured to provide enough cash flow to pay debt service on the refunded bonds. 5.29 CURRENT YIELD- The ratio of the annual dollar amount of interest to the purchase price of a bond, stated as a percentage. 5.30 CUSIP NUMBERS (COMMITTEE ON UNIFORM SECURITY IDENTIFICATION PROCEDURES)- Identification numbers assigned each maturity of a bond issue, and usually printed on the face of each individual bond in the issue. The CUSIP numbers are intended to facilitate identification and clearance of municipal securities. 5.31 DEBT LIMIT- The maximum amount of debt which an issuer of municipal securities is permitted to incur under constitutional, statutory, or charter provisions. 5.32 DEBT PER CAPITA- Bonded debt divided by population. Page 11 of 18 5.33 DEBT SERVICE OBLIGATION- The amount of funds necessary to pay principal and interest, and the required contributions to an amortization sinking fund for term certificates on an outstanding obligation. Debt service obligation on certificates maybe calculated on a calendar-year or on a fiscal- year basis. 5.34 DEBT SERVICE RESERVE FUND- A fund usually amounting to principal and interest payments for one year and used only if pledged revenues do not generate sufficient funds to satisfy the debt service requirement. The reserve fund is typically funded in whole or in part from the proceeds of the debt issuance. The size and investment of the reserve fund are usually subject to arbitrage regulations. 5.35 DEBT SERVICE SCHEDULE-A table listing the annual payments necessary to meet debt service requirements over the period of time the bonds are to be outstanding. 5.36 DEFAULT- Failure to make timely payment of principal and interest, or comply with other features of the indenture. 5.37 DEFEASANCE- Eliminating bonded indebtedness off an issuer's books through creation of a portfolio of Treasury securities sufficient to make all debt service payments on prerefunded, outstanding bonds. 5.38 DIRECT DEBT- The debt that a governmental agency incurs in its own name. 5.39 DISCOUNT- The amount by which par value exceeds the price paid for a security which generally represents the difference between the nominal interest rate and the actual or effective return to the investor. 5.40 DOUBLE-BARRELED BOND- Traditionally, a bond secured by a defined source of revenue plus the full faith and credit of the issuer. The term is occasionally, although erroneously, used to refer to bonds secured by any two sources of pledged revenue. 5.41 DOWNGRADE- The lowering of a bond rating by a rating service. A downgrade would be considered if the issuer encountered major financial difficulties or economic decline, which may be viewed bythe rating service as reducing the credit quality of the bond issue. 5.42 EFFECTIVE INTEREST RATE- The actual rate of interest earned by the investor on bonds purchased, after allowing for premiums, discounts, or accrued interest over the period of the investment. Page 12 of 18 t Y 5.43 FEASIBILITY STUDY-A report by an independent expert on the economic need and practicality of a proposed debt program. 5.44 FINANCIAL ADVISOR- Performs analysis as to the appropriateness of a bond sale and, if the governing body of the agency determines that a bond sale is necessary, they then assist in its planning and preparation. 5.45 FLOATER- A security sold with a variable rate that changes at intervals ranging from daily to annually. 5.46 FULL FAITH AND CREDIT- The pledge of a government's general taxing power to pay off its debt obligations. 5.47 GENERAL OBLIGATION BONDS-Bonds which are secured by the full faith and credit of the issuer. General obligation bonds are secured by a pledge of a portion of the ad valorem taxing power. Such bonds constitute debts of the issuer and require approval by election prior to issuance. 5.48 GUARANTEED INVESTMENT CONTRACT (GIC)- Contract between an investment provider and issuer that guarantees a specific rate of return on the invested capital over the lifetime of the contract. The investment provider can be an insurance company, corporation, bank, or other entity whose rating exceeds the minimum levels defined in the documents. 5.49 HIGH GRADE BONDS-Top-rated bonds, usually triple-A. 5.50 INDENTURE-Legal document describing the terms and conditions of a bond offering, the rights of the bondholder, and the obligations of the issuer to the bondholder. The document is alternatively referred to as a bond resolution or deed of trust. 5.51 INTEREST RATE SWAP- An agreement between two parties to exchange future flows of interest payments. One party agrees to pay the other a fixed rate; the other pays the first party an adjustable rate usually tied to a short- term index. 5.52 INVERTED YIELD CURVE-When short-term rates are higher than long-term rates. 5.53 INVESTMENT GRADE- The broad credit designation given bonds which have a high probability of being paid. Such bonds, have few, if any, speculative features and are rated by the rating agencies in one of their top four categories, ranging from triple-A to BBB and Baa. Page 13 of 18 5.54 ISSUER- A state, political subdivison, agency, or authority that borrows money through the sale of bonds or notes. 5.55 JUNIOR LIEN BONDS- Bond with a subordinate claim against pledged revenues. 5.56 LETTER OF CREDIT- An agreement, usually with a commercial bank, to guarantee demands for payment upon compliance with conditions established in the agreement. Bank letters of credit are typically used as additional sources of security and liquidity with variable rate obligations. 5.57 LIQUIDITY-The ability to convert assets, such as investments, readily into cash. 5.58 MATURITY-The date on which the principal amount of a security is due and payable to the certificate holder. 5.59 NEGOTIATED SALE-The sale of a new issue of municipal securities by an issuer through an exclusive agreement with a previously selected underwriter or underwriting syndicate. A negotiated sale should be distinguished from a competitive sale,which requires public bidding by the underwriters. Primary points of negotiation for the issuer are the interest rate and purchase price, which reflect the issuer's cost of offering its securities in the market. 5.60 NET INTEREST COST(NIC)-Traditional method of calculating an issuer's borrowing cost. NIC is derived by adding the total volume of interest payments for the entire offering and dividing by the amount of certificates outstanding times the years they are outstanding. 5.61 NOTES- A written, short-term promise of the issuer to repay a specified principal amount on a certain date, together with interest at a stated rate, or according to a formula for determining that rate, payable from a defined source of anticipated revenue. Notes usually mature in less than five years. Notes are used to cover seasonal cash flow needs or interim financings. 5.62 OFFICIAL STATEMENT (OS)- A document published by the issuer which generally discloses material information on a bond issue, including the purpose of the bond issue, how the bonds will be repaid, and the financial, economic and demographic characteristics of the issuer. Investors may use this information to evaluate the credit quality of the bonds. 5.63 ORIGINAL ISSUE DISCOUNT(OID)-The discount from par at which a new issue comes to market. The capital gain represented by the OID is deemed tax-exempt by the IRS. Page 14 of 18 4 5.64 OVERLAPPING DEBT- The issuer's share of the debt of other local units. 5.65 PAR VALUE- The principal amount of a security, which must be paid at maturity. Par value is also referred to as the face amount of a security. 5.66 PARITY BONDS- Separate bond issues that have the same lien against pledged revenues. 5.67 PAY-AS-YOU GO BASIS-The financial policy of a municipality that finances all capital outlays from current revenues rather than borrowing. 5.68 PAYING AGENT- The entity responsible for the payment of principal and interest on municipal obligations on behalf of the issuer. The paying agent is usually a bank or trust company. 5.69 PLEDGED REVENUES- Funds obligated for the payment of debt service and other deposits as required by the bond contract. 5.70 PRELIMINARY OFFICIAL STATEMENT(POS)-A preliminary version of the official statement which is used by the issuer or underwriter to describe the proposed issue of municipal bonds prior to the determination of an interest rate and offering price. The preliminary official statement is a marketing tool used to gauge buyer's interest in the issue and is relied upon by potential purchasers in making their investment decisions. 5.71 PREMIUM-The amount by which the price paid for a security exceeds par value, generally representing the difference between the nominal interest rate and the actual or effective return to the investor. 5.72 PRESENT VALUE SAVINGS-Present value of gross savings discounted at the refunding bond yield to the closing date plus accrued interest less any contribution from a reserve or debt service fund. 5.73 PRINCIPAL- The par value or face amount of a bond payable or issue of bonds payable on stated dates of maturity. 5.74 PRIMARY MARKET- The market for new issues of municipal securities. 5.75 PRIVATE PLACEMENT- An original issue of municipal securities sold directly to an institutional or private investor by way of a negotiated sale rather than through a public offering. 5.76 RATE CONVENANT- A bond indenture provision requiring rate changes necessary to meet annual debt service payments. Page 15 of 18 5.77 RATINGS-Evaluations of the credit quality of notes and bonds usually made by independent rating services. Ratings generally measure the probability of the timely repayment of principal of and interest on municipal bonds. 5.78 RATING AGENCIES-Credit quality evaluation of an issuer's securities made by independent rating services. The three primary rating agencies with regard to municipal debt are Moody's Investors Services, Standard& Poor's Corporation, and Fitch. 5.79 RATINGS- Evaluations of the credit quality of obligations usually made by independent rating services. Ratings generally measure the probability of the timely repayment of principal and interest on municipal obligations. The higher the credit rating, the more favorable the effect the marketability of the security. 5.80 REDEMPTION- A transaction in which the issuer pays an outstanding obligation at a specified price, usually at or above par prior to the specified maturity date. Also known as a call. 5.81 REFUNDING-Selling a new bond issue for redemption or defeasance of an outstanding bond issue. There are generally two reasons for refunding: to reduce the issuer's interest costs or to remove a burdensome or restrictive covenant imposed by the terms of the bonds being refinanced. 5.82 REGISTRAR: The person or entity responsible for maintaining records on behalf of the issuer for the purpose of noting the owners of registered obligations. The paying agent frequently performs this function. 5.83 REVENUE BONDS- Bonds payable from a specific source of revenue and which do not pledge the full faith and credit of the issuer. 5.84 SECONDARY MARKET- Market for bonds previously offered and sold. 5.85 SENIOR LIEN OBLIGATIONS: Obligations having a prior claim on pledge revenues. 5.86 SERIAL BONDS- Bonds of an issue in which some bonds mature in each year over a period of years. 5.87 SETTLEMENT- Delivery of and payment for a new issue of municipal bonds. Settlement usually occurs within 30 days after the bonds are awarded to the underwriters, which allows for the printing of the bonds and the completion of certain legal matters. Page 16 of 18 d 5.88 SETTLEMENT DATE- The date used in price and interest computations, usually the date of delivery. 5.89 SINKING FUND-A fund established in a bond indenture that contains money available to call bonds prior to maturity. 5.90 STANDBY BOND PURCHASE AGREEMENT- A legal agreement with a commercial bank or trust company whereby the bank agrees to purchase demand bonds which the remarketing agent was unable to remarket to other parties and chose not to purchase for itself. 5.91 SUBORDINATE (JUNIOR) LIEN OBLIGATIONS- Obligations having a subordinate claim against pledged revenues. 5.92 TAX-EXEMPT OBLIGATIONS- Obligations whose interest is exempt from federal income taxation pursuant to Section 103 of the Internal Revenue Code, and may or may not be exempt from state income or personal property taxation in the jurisdiction where issued. 5.93 TERM BONDS- Bonds coming due in a single maturity. The issuer usually agrees to make periodic payments into a sinking fund for mandatory redemption of term bonds before maturity or for payment at maturity. 5.94 TRUE INTEREST COST (TIC)- The present value borrowing cost of the issuer reflected by taking into account the costs of issuance and underwriting. TIC is similar to NIC, but also accounts for the time value of money. 5.95 TRUSTEE- A financial institution with trust powers which acts in a fiduciary capacity for the benefit of bond holders in enforcing the terms of the bond indenture agreement. 5.96 TRUST INDENTURE-A contract between the issuer of municipal securities and a trustee, serving for the benefit of the security holders. 5.97 UNDERWRITER- A dealer at a bank or brokerage house- who buys an agencies bonds in order for the firm's sales force to resell them to both institutional and retail investors. The underwriter may acquire the bonds either by negotiation with the issuer, or by award on the basis of competitive bidding. 5.98 UNDERWRITERS COUNSEL- A lawyer involved in the transaction, who represents the securities firm buying an agency's bonds. Page 17 of 18 1 5.99 VARIABLE RATE OBLIGATIONS-A tax-exempt security whose interest rate is reset periodically by the remarketing agent according to a preset formula defined in the indenture agreement. The variable interest rate, also known as a"floater", is determined by the remarketing agent as the level at which all bonds trade at par. 5.100 YIELD CURVE- Graph displaying the term structure of interest rates by plotting the yields of all bonds of the same quality with maturities ranging from shortest to the longest available. 5.101 YIELD TO MATURITY- The rate of return to the investor earned from payments of principal and interest, which compounded semiannually and assuming that interest paid is reinvested at the same rate. Yield to maturity takes into consideration the time value of the investment. 5.102 ZERO-COUPON BONDS- Bonds sold at a deep discount from par, pay no interest, and appreciate to full value at maturity. Also known as capital appreciation bonds. Page 18 of 18 SCAPe3o#krr> A-C 6%—dDk 50UTHERI'CALIFORNIA AWANCE OF PUBLICLY OWNED TREATMENT WORKS August 18, 2003 Mr. Blake Anderson, General Manager f Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA' 92708-7018 T . Re: Nation's First Certified Biosolids Environmental Management System Dear Blake; - - The Southern California Alliance 'of Publicly Owned Treatment Works extends its congratulations to'the Orange County Sanitation District for achieving the-distinction of _ -becoming the first public wastewater agency in'the nation to receive nationa_l-certification -- of its Biosolids'Environmental Management System (EMS).,,..-. _ We also extend our appreciation for t�&Leadership role that the District has taken in the- development of.national biosolids standards; your staff-worked 'diligently' along with :many other wastewater agencies nationwide to develop the "National Manual,of Good ' ,Practice"and by this achievement, they have demonstrated that they are willing to live up` to the high standards that are contained not only in the manual;"but also to foster practices that exceed regulatory requirement. - We are honored to-be associated with you through SCAP and we look forward to the - growing acceptance of biosolids reuse— an acceptance that will be earned because of the diligent efforts ofpubIi -agencie ch as yours. Very ly yours, - _- R d C.-Miller _ Exec iv Director 30200 Rancho Viejo Road,Suite B _ San Juan Capistrano,CA 92675 Fax:9491489-0150 TeI:949/489.7676- r(,�/� �pllJ �/i"" �' � ,..;�-G'"'/'`ice"' `.�! �����.�._--mot .�� STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Notice and Agenda for the Regular Board Meeting of Orange County Sanitation District to be held on , 2003, was duly posted for public inspection in the main lobby of the Districts' offices on / , 2003. IN WITNESS WHEREOF, I have hereunto set my hand this ay of 2003. Penny M. Kyle, Secretary Board of Directors Orange County Sanitation District G:\WP.DTA\ADMIN\BS\FORMS\AGENDA CERTIFI CATION.DOC OJN�Y ANIJ�l 4 R W tJ August 27, 2003 MEMORANDUM To: Board of Directors Through: Lisa Tomko Director, Human Resources From: James Matte Safety and Health Supervisor Subject: OCSD Plant # 2 12 kV Service Center Accident August 6, 2002 Cal-OSHA Final Report The District has received the Cal-OSHA Investigation Report resulting from the electrical accident that occurred at the OCSD Plant#2 12kV Service Center on August 6, 2002. The District did not receive any citations as a result of this incident and was notified of this verbally by Mr. Randy Johns, Associate Cal-OSHA Compliance Engineer on August 6, 2002. Southern Contracting Company (SCC) received one serious citation for an alleged violation of section 2940.1(1) of Title 8 of the California Code of Regulations. SCC has appealed this citation and the appeal has not been resolved as of this date. Accident Overview On August 6, 2002, at approximately 0720, an explosion occurred in the 12kV Service Center at Plant#2, located at 22212 Brookhurst Street, Huntington Beach, California. Less than 60 seconds later, a second explosion occurred when the system tried to reset. Five people were injured, four of the injured were employees of SCC (the contractor), and one was an employee of the Orange County Sanitation District. The District's Medical Unit Team and Huntington Beach Fire Department responded to the medical emergency and related fire. Two SCC employees were transported to Western Medical Center in Santa Ana, two SCC employees were transported to UCI Medical Center and one District employee was transported to Hoag Hospital in Newport Beach. One SCC employee and the district employee were treated and released on August 6, 2002. One SCC employee was held overnight at UCI Medical Center for observation. The other two SCC employees suffered extensive burns, one was released on or about August 25 and the other died from his injuries on August 29, 2002. OCSD .- P.O.Box 8127 Fountain Valley,CA 92728-8127 C: (714)962-2411 Memo to the Board of Directors August 27, 2003 Page 2 The Citation to SCC Southern Contracting Company was cited for an alleged violation of section 2940.1(1) of Title 8 of the California Code of Regulations. The proposed penalty was $18,000.00, the maximum penalty for a serious violation. In non-fatal accidents, penalty reduction factors for compliance history, employer size and good faith efforts may be applied to reduce the size of the fine. These factors cannot be applied in accidents involving fatalities. Section 2940.1(1) of Title 8 of the California Code of Regulations states: "§2940.1.Voltage Determination. (a) Operating voltage of equipment or conductors shall be determined before working on or near energized parts." Cal OSHA concluded that SCC did not comply with this requirement. Cal-OSHA found that: "The operating voltage of the equipment or conductors was not determined prior to grounding a high voltage buss,which resulted in a fatal injury to an employee of Southern Contracting Company on August 6, 2002" Cal-OSHA's Determination of the Cause of the Accident Cal-OSHA conducted an investigation of the accident site on August 6-7, 2002. The District was cleared of any Cal-OSHA liability on August 6, 2002. Cal-OSHA also conducted visits to SCC's offices in San Marcos, CA in August 2002. Cal-OSHA reviewed written documentation provided by the District and SCC to determine a cause of the accident. Subsequently, it was concluded: "The cause of the accident was determined to be the supervisor's failure to test the high voltage circuit he was about to work on to ensure it had been de-energized by his closing and locking of the circuit. It is not known why he erred in the location of the bus that was to be replaced, but it could be surmised that when he was locking open the circuit, he thought he was in compartment# 1. Knowing that the bus to be replaced was two compartments over, he would have instructed the other journeymen to open the third compartment from the end, #3, which was the incoming side of the circuit he had just locked out. Even then, had he used the tester to ensure the circuit to the buss being exposed was de-energized, the error would have been discovered,without incident." District staff continues to work on improving our contractor safety programs. This includes: 1. Implementation of a system to identify site safety and health hazards prior to the start of work. The new system is called the Job Site Safety Analysis. (Implementation date 7/02) ocso P.O.Sox 8127 Fountain Valley,CA 9272"127 (714)962.241 1 Memo to the Board of Directors August 27, 2003 Page 3 2. A requirement that no energized equipment is released to a contractor. District staff must de-energize the equipment prior to being released to a contractor (Implementation date 8/02) 3. Receive contractor input for Quarterly Contractor meetings (Implementation date 9/02) 4. Train District Construction Management staff on conducting safety inspections during the course of work. (Implementation date 9/02) 5. Review and revise as necessary the District's philosophy on dealing with contractors. (Began in 8/02, on going) 6. Qualify contractors for work on District contracts based on safety and health history. (Project began 6/03) 7. Revise District specifications and purchase order boiler plate to contractually obligate District contractors to provide a safety program. (1/03 for purchase orders, not started for specifications) OCSD P.O.Box 8127 Fountain Valley.CA 92728-8127 (714)962-2411 � air sexu4go ORANGE COUNTY SANITATION DISTRICT I = z t� Crr T August 20, 2003 phone: (714)962-2411 fax: To the Chair and Members 17141962-0356 of the Board of Directors www.ocsd.com mailing address: Subject: Board Letter P.O. Box B127 Fountain Valley,CA 92728-8127 The following are items that you may find interesting. If you need additional street address: information on any of the items, please call me. 10844 Ellis Avenue Fountain Valley,CA 92708-7018 District's Biosolids Program Receives National Certification Member Agencies On August 7, representatives and elected officials joined with us to celebrate our ® being the first in the nation to be verified under the National Biosolids Partnership's Cities Environmental Management System. Anaheim heim Representatives included: Assemblyman Dick Ackerman's Office; Assemblyman Buena Park Ken Maddox's Office; California Association of Sanitation Agencies; City of Los Fountain Cypress Angeles; Congressman Ed Royce's Office; Costa Mesa Sanitary; Discovery Science alley Fullerton Center; Earth Resource Foundation; Irvine Ranch Water District; La Paz County Garden Grove Arizona Board of Supervisors; Metropolitan Water District of Orange County; National Huntington Beach Irvine Biosolids Partnership; Ocean Outfall Group; Orange County Business Council; South La Habra East Huntington Beach Homeowners Association; United State Senator Dianne La Palma Los Alamitos Feinstein's Office; United States Environment Protection Agency; and the Water Newport Beach Environment Federation. Orange Placentia Santa Ana The EMS Certification capped a year-long process of program reports, auditing, and Seal Beach re-auditing of how we manage biosolids. An independent third-party audit witnessed Stanton by a member of the public examined everything from our industrial source control Tustin Villa Park program, to the operation of our treatment facilities, to dewatering, to trucking, and Yorba Linda finally to delivery and incorporation of our biosolids into farm land. Our record County of Orange keeping, regulatory reporting and internal communications were also checked by the auditor Sanitary Districts To learn more about the biosolids EMS certification, visit the OCSD website at Costa Mesa www.ocsd.com. Midway City Water Districts Irvine Ranch District Borrows $280 Million for CIP—More Borrowing to Follow in the Future Seven municipal banking firms submitted competitive bids for the District's 2003 Series Certificates of Participation. The winning firm was Morgan Stanley, with a true interest cost of 5.145 percent for the 30-year, $280 million issue. The bids were very_ close with only a 0.44 percent interest spread between the highest and lowest. To maintain world-class leadership in wastewater and water resource management. D �PJP`r SNI r,r/ON o N, r Board of Directors ,FCl/ P T Page 2 August 20, 2003 The COPs were rated double A by Standard & Poor's as well as Fitch and Aa3 by Moody's. All of the rating agencies cited the District's operations, debt coverage ratios and reserves as support for their high ratings. They were also impressed with the Directors' decision to voluntarily meet secondary effluent standards. The rating agencies also noted that although the proposed capital improvement program is much larger than our historical outlay, there is a plan to keep it manageable. The capital improvement program and the additional borrowing will put pressure on user fees which are expected to rise significantly over the next several years. In order to minimize the impact on user fees in the immediate future, the COP issue was structured to produce the lowest repayments in the early years while other debt is outstanding. The first principal payment won't occur in 2021, to coincide with the retirement of debt previously issued in the early 1990's. This structure reduced the annual payments for the first 17 years by$5 million per year and locked in today's very favorable rates at the long end of the yield curve. We expect to issue more debt in the future to fund the $2.1 billion of new capital facilities that will be constructed during the next 10 years. Approximately 60% of the CIP will be funded through borrowings and 40% through accumulated funds. This level of future borrowing occurs assuming that user rates are increased 15% per year during this and the following four years, and that our rate of CIP expenditures is as high as we forecast. We will adjust our borrowing accordingly. For Your Consideration: Yes on Proposition 53 There is a proposition on the October 7 recall ballot that most people haven't heard about—Proposition 53. As a citizen and a self-proclaimed public infrastructure geek, I recommend that you consider voting yes. Proposition 53 is intended to set aside up to 3 percent of the State's General Fund for public infrastructure capital funding in those years that future state income is adequate to cover the future set aside without dipping into existing programs. Half would go to state-owned infrastructure and the other half would go to locally-owned public infrastructure. There is a flier attached to this board letter that provides a look at how the funding would be distributed. As you know there is tremendous public infrastructure funding shortfall in this state. In Orange County alone the shortfall for all categories of public infrastructure is approximately $1 billion per year. Roads, water supply, wastewater treatment, stormwater and urban runoff management, parks and open space, and other public facilities would be funded for decades. Save our streets. Save our sewers. Yes on 53. The California Association of Sanitary Agencies, the California League of Cities and many other statewide organizations are taking positions of support. 4oJ"}+ SANI r/0N ti = 9 Board of Directors Page 3 li P August 20, 2003 Save the Date: Arrowhead III, January 9-11, 2004 The third annual Orange County Leadership Symposium is scheduled at the UCLA Conference Center in Lake Arrowhead for Friday through Sunday, January 9-11. See the attached memorandum from the executive directors of the agencies that are just now considering sponsoring the symposium again for 2004. Groundwater Replenishment System Update: A New Monthly Report and an October Joint Workshop The project management team of GW RS has just published the first monthly activities report for this important project, jointly funded by the Sanitation District and the Water District. The Executive Summary and Table of Contents are attached. If you have interest in receiving the full report—and future monthly reports—please contact the Water District or my assistant, Jean Tappan, at (714) 593-7101. We are planning to have a two-hour informational workshop on the project, held jointly with the Water District's Board of Directors in mid-October, most likely the evening of October 15. More on this later, but pencil this date in for now. This will be an important meeting. The operating agreement between the Sanitation District and the Water District was signed in October 2002. Since then, several elements of GW RS have started construction and several elements are months away from starting construction. Start-up of the facilities is expected to occur in mid-2007. This will be the largest water reclamation project in the country, when completed, and will produce water that is of superior quality to all other sources of water that Orange County now utilizes for public water supply. And, because it's produced here, its virtually uninterruptible. Disinfection Update Our final effluent continues to be successfully disinfected using the temporary facility disinfection system, which has now been in operation since August 2002. The disinfection system is significantly reducing the total coliform, fecal coliform, enterococci bacteria and viruses. July 2003 results for total coliform averaged about 1,000 MPN/100 ml (which is about 6 MPN/100 ml after dilution at the outfall diffuser) with a maximum daily value of 5,000 MPN/100 ml (which is 28 MPN/100 ml after dilution by the outfall diffuser 4.2 miles offshore in 185 feet of water). The total coliform regulation or standard after dilution at the outfall is 1,000 MPN/100 ml at the three-mile line offshore. The final effluent had a maximum 0.10 ppm chlorine residual averaged over eight hours on one day, which is well below the 1.45 ppm daily maximum compliance limit. Additional disinfection and microbiological data is reported on the Web @ www.ocsd.com. S N N i r,,f/pN � � o r Y Board of Directors Page 4 r" N August 20, 2003 The upgraded bleach/dechlori nation facilities were approved by the Board of Directors in January 2003 and construction 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 will be used for disinfection and design and construct the new facilities. Progress Toward Secondary Treatment Standards 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, 2002, the District's final effluent quality averaged 51 ppm TSS and 72 ppm BOD. During July 2003, the treated effluent averaged 34 ppm TSS and 62 ppm BOD. The secondary treatment goal is 30/30 ppm BOD and TSS. Announcing OCBC's Special Meeting on Innovative Solutions to Orange County's Water Supply The Orange County Business Council is sponsoring a discussion on the County's water supply on September 19, 2003 between 7:30 and 9:30 a.m. at the Hyatt Regency Irvine Hotel. An announcement is attached. To receive additional information, call the Council at 949/794-7217. Public Outreach Using Employee Volunteers: Our VIP Program 2002-03 We implemented a Volunteer Incentive Program (VIP) last fiscal year to encourage staff to volunteer their time to educational activities and to recognize and reward them for doing so. Their time and effort as volunteers in support of OCSD's community outreach and education activities is invaluable to us all. During the year, nearly 60 volunteers participated in a variety of weekend events, plant tours and presentations. All told, that provided 200 volunteer hours. A special luncheon was held to recognize their efforts on August 19. Special awards went to Barbara Collins (for Volunteer of the Year), Paula Zeller (for the Spirit Award) and the Environmental, Compliance and Monitoring Division (for Highest Participating Division of the Year). These volunteers provide a valuable resource for communicating the District's principles in the community around us: their own voices and their own time. Thanks to them all. 4�Ja1 1 SANlrl/O6 � � o i N P Y Board of Directors Page 5 August 20, 2003 Advanced Training Course Controlling FOG, September 30-October 1 There will be a two-day training course offered by EPA in Bellevue, Washington on controlling sewer fats, oils and greases (FOG). See the attached flyer. 60 Communication Ideas in 60 Minutes Carol Beekman, our Director of Communications, and three other communications managers who are members of CASA, borrowed the format of the popular news magazine "60 Minutes" to provide practical ideas to improve community outreach and communications. Ms Sawyer, or should I say Ms Beekman, will be happy to provide you with more information if you give her a call or e-mail. 714.593.7120 or cbeekman @ ocsd.com Construction Outreach Bushard Trunk Sewer Replacement Construction updates continue to go out to impacted areas; the most recent notification went out on August 15 informing residents of the 108-inch pipe installation that began August 18. The street closure is from OCSD Plant 2 entrance at Brookhurst Street to the intersection of Banning Avenue and Bushard Street. This closure is estimated to last approximately five weeks. Along with the construction update to the residents, a map of the location was included and a letter with an invitation to a neighborhood meeting that will be held on September 16. If you would like further information about this meeting, please call Jennifer Cabral (714) 593-7581. Warner Avenue Project The first construction notification for this project was sent out the week of August 4 regarding some preliminary excavation for utility locations. This work is estimated to last approximately six weeks and is located on Warner Avenue from Springdale Street to Wintersburg Flood Control Channel. The second notification went out during the week of August 11 for a partial road closure on Warner Avenue from Remington Lane to the Wintersburg Channel. Articles of Interest I have also included several additional published articles that you might find interesting. SNNI) oy W � O = N Board of Directors = Page 6 August 20, 2003 N iN tl If you would like additional information on any of the above items, please call me. 44�� Blake P. Anderson General Manager BPA:jt G:\WP.DTAWDMIMGM\LETTERS TO THE BOARD\03\082003 BOARD LETTER.DOC Attachments • National 1110SOMLS Partnership Working 10 ensure environmental excellence in blosolids management Management Committee July 25, 2003 Robert W.Hite Chair;Denwf.CO Albert C.Gary,Ph.D..P.E. WET.Alt andra.va Blake Anderson Ken Kirk General Manager AMA,Waahinglon,DC Orange County Sanitation District Richard o'Ku0ndthec. Ph.D—Mo 10844 Ellis Avenue James Hanlon Fountain Valley, CA 92728-8127 U.S.EPA.Advisor Jahn M.Walker.Ph.D. U.S.EPA,AdvKw Dear Blake: Steering Committee Cecil cn r.o'aa.D. On behalf of the'National Biosolids Partnership(NBP),which is a voluntary partnership Chaa; between APASA, WEF, and EPA, I congratulate you and-the dedicated staff on the "°Unw say P rk,D. PA successful completion of the requirements for admittance to the NBP environmental Un,veiss;y Park.PA q . Richard Finger management system(EMS) program. Your leadership has been truly remarkable! Kcrq Counri.WA Jane Forste MD As the first agency admitted to the NSP EMSprogram, your agency has now earned the. Arnold.d.MD g cY =J Tim Frank Partnership's*Seal of Approval.' This designation recognizes that your agency has met Hm mnwc,OH all the NBP EMS program requirements that support excellence in btosolids management, James Herne exceeds regulatory compliance obligations, and provides meaningful opportunities for U S.EPA Emle Kelley Public participation. Your Certificate of Achievement is enclosed in an attractive plaque. watatbury.VT Additional copies of the Certificate are also provided. Robert O'Dette Houston,TX Achievement of the"Seal of Approval"indicates that Orange Court Sanitation District A R.Rubin.RIleg".HC has satisfied the NBP's requirements g ents of admittance by: Paul saint ■ Documenting responsibility for the Blosolids Value Chain—pretreatment, WN ngion.CT F"kasam Tara,Ph.D. treatment, and final use; Cnugo.IL ■ Committing to the 10 principles in the NBP Code of Good Practice; William E.Toney . Operating a Biosolids Management System that meets all the NBP requirements; w,:iadrrahta,PA P g 9 Y q Gary G.van Riper.Ph.D and, Lakewood.Co ■ Successfully completing an independent third-party audit. Jose velmuez Denver.CO The CD ROM in the enclosed Media Kit will allow your agency to visually display the Seat AM Blasollds of Approval in a vari*of ways. For example,the files contain graphics that can be used Management committee internally or by an outside graphic design company to create displays such as: Robert P.Oominak Co-Chw;Cleveland,OH RaymondJ.Kearney ■ Internet logo on your agency's web page, stationary, coffee muffs, etc Co-Chair.Los Ange,es,CA ■ Signage on trucks WEF Residuals&Biosalids ■ Hard hat stickers Committee ■ Patches for shirts, baseball caps,etc. Mark E.Lang Chair.Rochester.Hv ■ Banners for wall or flag displays Richard Christy ■ Certificates Yicc-Chair Ilotnstmvn.PA 501 Wytha Street Alexandria.YA 22314.IPA 703.,684.2418 Stall 70684-2492(fax) please visit our website at.,www.biosailds.org biosolid n(1990):solid organic matter recovered trom waste water treatment process and used,esp.as tenaizei—usually in pl. Blake Anderson July 25, 2003 2 In addition to the CD ROM and certjficateiplaque,we are sending under separate cover a Seal of Approval banner,wall display, several EMS verified baseball caps and truck sign as a starter. Again, please convey our appreciation to your staff and others who have worked so diligently to meet the NBP EMS program requirements. Sincerely, ``�� 6r4W�T. 147k Robert W. Hite Chair, National Biosolids Partnership Enclosures cc: NBP Management Committee William Bertera, WEF Executive Director James Hanlon, U.S. EPA Ken Kirk,AMSA Executive Director Dick Kuchenrither, Black S Veatch John Walker, U.S. EPA %9. 14ational Biosolids Partnership This organization orange County Sanitation District Fountain Valley, CA has been independently verified as having an effective biosolids environmental management system that supports continually improving environmental performance, exceeding regulatory 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. r Audit il'inin Representative — KEMA / 17 U Ied this Gate KEMA CERTIFIED The National Biosolids Partnership (NBP) is a voluntary partnership between AMSA, WEF, and EPA to advance environmentally sound and accepted biosolids management practices through compreliensive environmental management systems. EPA serves as an advisory member of the Partnership. National Biosolids Trrtifirate of �-Aichirfjrnwnt Partnership Orange County Sanitation District Fountain Valley, CA meets all the requirements for admittance to the National Biosolids Partnership Environmental Management System Program that supports excellence in biosolids mana gement agement practices, exceeds regulatory compliance obligations, and provides meaningful opportltnities for public participation. Robert W. Hite - Chair Date The National Biosolids Partnership (NBP) is a voluntary partnership between AMSA, WEE and U.S. EPA to advance environmentally sound and accepted biosolids management practices through comprehensive management systems. EPA serves as an advisor}, member of the Partnership. OCSD - Home Page Page 1 of 2 M-1 61 Ya Homepage Weekiv Web Pick J�.riIv OCSD Honored as Nation's First The Orange County Sanitation District(OCSD) is the first h� ils,fi, public wastewater agency in the nation to receive national - ,�� certification of its Environmental Management System (EMS)for biosolids. r, - Left:OCSD General Manager Blake Anderson and i Congresswoman Loretta Sanchez �.._..__ more information... -- — n _. sir...... .•3 lr,'v'J / Dif Archives... _ 7-0 f i Congratulatory Letter From U.S. Senator Wed.,Aug 13 Dianne Feinstein 5:00 PM-7:00 < �y4 "It gives me great pleasure to join the National Biosolids Finance,Adm Partnership in honoring the Orange County Sanitation Human Resoi Committee(F District for its recent national certification of their Environmental Management System for biosolids." View the full letter from Senator Feinstein) more information... Congratulatory Letter From the United States Environmental Protection Agency "0„1j6Jf if the u!1ldlei dt the U.S a z Environmental Protection Agency(EPA), I would like to i congratulate the Orange County Sanitation District for ..... �°r being the first agency in the National Biosolids Partnership �o (NBP)to successfully complete an independent third party audit of your environmental management system (EMS) for biosolids operations. This is an important accomplishment which will hopefully pave the way for even greater adoption of EMSs by water and wastewater utilities." (View EPA letter) more information... Congratulatory Letter From California State Senator Dick Ackerman In honor of National Certification for Exemplary Management and Sanitation Standards in the Wastewater Industry. 4'. (View Certificate)more information... http://www.ocsd.com/ 8/1 l/2003 OCSD - Home Page Page 2 of 2 ii8tlms� Congratulatory Letter from the National Eloseli>s Blosolids Partnership: p "On behalf of the National Biosolids Partnership(NBP), which Is a voluntary partnership between AMSA,WEF, and EPA,I congratulate you and the dedicated staff on the successful completion of the requirements for admittance to the NBP environmental management system(EMS)program. Your leadership has been truly remarkable!" (View,the,full letter) more information... Congratulatory Letter from the Water Environment Federation As the first wastewater agency admitted into the NBP EMS program,Orange County Sanitation District has earned the Partnership's"Seal of Approval." This designation recognizes that the agency has been independently verified as having an effective biosolids management system."WEF is pleased with Orange County Sanitation District's successful completion and verification of the NBP EMS program,"said WEF President Robert McMillon. "The Federation believes that instituting an EMS for utility management is vital to enhancing environmental excellence In local communities." (View the congratulatory letter from WEF) more information... Archives... Contact Address: 10844 Ellis Avenue,Fountain Valley,CA Privacy Statemen 92708 (714)962-2411 Contact webmaster Copyright©2001-2002 Orange County Sa http://www.ocsd.com/ 8/11/2003 DIANNE FEINSTEIN COMMITTEE ON APPROPRIATIONS CAUFORNIA COMMITTEE ON ENERGY AND NATURAL RESOURCES COMMITTEE ON THE JUDICIARY COMMITTEE ON RULES AND ADMINISTRATION T SELECT COMMITTEE ON INTELLIGENCE WASHINGTON, DC 20510-0504 hup0einstein.senete.gov August 7, 2003 The Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 9270&7018 Dear Friends: It gives me great pleasure to join the National Biosolids Partnership (NBP) in honoring the Orange County Sanitation District (OCSD)for its recent national certification of their Environmental Management System(EMS) for biosolids. OCSD's dedication to excellence makes this organization truly deserving of this certification. As the first such recognition of its kind in the country, this credential distinguishes the OCSD's exemplary management practices and commitment to creating meaningful opportunities for public participation. This achievement truly stands out as an inspiration to other organizations that will follow in OCSD's footsteps. Once again, congratulations! As your United States Senator representing the State of California, I commend OCSD on their pioneering achievement and wish you continued success in all your future endeavors. Sincerely yours, S 1 � Dianne Feinstein United States Senator S T A T E O F C A L I F 0 R N I A CERTIFICATE OF RECOGNITION Presented to Countye Orang Sanitation District In Yfonor of iWational Certificationfor D emplary 9Vlanagement and Sanitation Standards in the Wastewater industry Fountain Vaffey, Caffornia August 7, 2003 E�,,(� � Senator DickAckerman 331'd Dist?Zct CITY OF Los ANGELES BOARD OF CALIFORNIA DEPARTMENT OF PUBLIC WORKS PUBLIC WORKS COMMISSIONERS BUREAU OF SANITATION VALERIE LYNNE SHAW JUDITH A.WILSON PRESIDENT DIRECTOR RAYMOND J. KEARNEY ELLEN STEIN JAMES F. LANGLEY VICE PRESIDENT JAMES K. HAHN JOSEPH E. MUNDINE ENRIQUE C.ZALDIVAR RONALD LOW MAYOR ASSISTANT DIRECTORS ADRIANA RUBALCAVA JANICE WOOD 433 SOUTH SPRING ST.,SUITE 400 LOS ANGELES,CA 90013 TEL: (213)473.7999 August8 2003 FAX: (213)473-8100 O" , TTY: (213)473-7978 Mr. Blake P. Anderson General Manager P.O. Box 8127 Fountain Valley, CA 92728-8127 Dear Blake: Our hearty congratulations on being the first in the country to receive a certification of your Biosolids EMS. We hope to follow in your footsteps by September 2003. Best wishes to all. Very truly yours, JUDITH A. WILSON, Director Bureau of Sanitation JAW:mg JAW 1149.mg—Letter to Blake Anderson re Biosolids EMS Certification CID- AN EQUAL EMPLOYMENT OPPORTUNITY— AFFIRMATIVE ACTION EMPLOYER CERTIFICATE OF COMMENDATION Presented to ORANGE COUNTY SANITATION DISTRICT In recognition of being the first public wastewater agency in the nation to receive national certification of its Biosolids Environmental Management System. Dated: August 7, 2003 5 M gie L. Rice, Mayor Russell C. Paris, Mayor Pro Tem Franks G. Fry, Council Member Kermit Marsh, Council Member Andy Quach, Council Member J�<ti9 STglFS UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Q WASHINGTON, D.C. 20460 ���yrgC PAO(cG�O? AUG 4 S3 OFFICE OF WATER Mr. Blake Anderson General Manager Orange County Sanitation District P.O. Box 8127 Fountain Valley, California 92708-8127 Dear Mr. Anderson: On behalf of the Office of Water at the U.S. Environmental Protection Agency(EPA), I would like to congratulate the Orange County Sanitation District for being the first agency in the National Biosolids Partnership (NBP)to successfully complete an independent third party audit of your environmental management system (EMS) for biosolids operations. This is an important accomplishment which will pave the way for even greater adoption of EMSs by water and wastewater utilities. Since its inception in 1997,the NBP has worked with wastewater treatment authorities to improve their management of biosolids through the development and implementation of EMSs. Our experience with EMSs in biosolids management, as well as in enterprise-wide management has been very encouraging. We applaud the Orange County Sanitation District for the leadership demonstrated in moving forward with the biosolids EMS and for being recognized as the first to successfully complete a third party audit. Water infrastructure is critical to the economic future of our Nation. We believe that sound management of that infrastructure, which can be enhanced through the use of state of the art tools like EMSs and asset management, is important to long-term sustainability and the protection of human health and the environment. Once again, thank you for leadership and for the important milestone the Orange County Sanitation District has reached. The Office of Water looks forward to working with the District and learning from your experience in implementing this important program. i G. T cjmi an, III Yr 2- Assista strator TM YEM OF CLEAN WATM Inte-et Address(URL). http:/twww.epa.gov Recycled/Recyclable•Printed with Vegetable Oil Based Inks on Recycled Paper(Minimum 50%Postconsumer content) PRLSWNT Water Environment Robert1*11cMillun Federation Irli SIDE.N T- PREcroEElZ(T PrC'sm' &7g G linbancft t.w.umcr P JswursN.IT.. tlx Global IVWer Environment 1 fgx-r 11vlbnro..11p VICE PRESIMST Linn II Orhhui.1't: Kenu..�'I TRUM ARR ErNiu I Odcal (,eI cland.Ull RAM*PRE\IDOT July 28, 2003 larnr.11 r.UA.PE. (a Blake Anderson E'O,U-11 EDIRECTOR ulllum J.Renera General Manager .11exuudrur. 1:1 Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Dear Blake: Congratulations to you and the staff of Orange County Sanitation District on the successful completion of the requirements for admittance to the NBP environmental management system (EMS) program. As the first agency admitted to the NBP EMS program, the District has now earned the Partnership's "Seal of Approval." This designation recognizes that your agency has met all the NBP EMS program requirements that support excellence in biosolids management, exceeds regulatory compliance obligations, and provides meaningful opportunities for public participation. I have a good understanding of the effort that has been made to satisfy the NBP requirements— Documentation, Commitment, Operation and Verification. The District has done a terrific job! It is likely that the first audited facility will be viewed as a model by those POTWs following the EMS path. The NBP and the Water Environment Federation are very pleased to have the Orange County Sanitation District as the leader in this national effort. Sincerely, William Bertera Executive Director, Water Environment Federation —3 Since 1928 001 \\\the Street • :Ucundrlj.VA 2314-199i I SA • I--03-Mi-2-Wo • 1-70i-684-2492 tf.1\) • x+u.ucLcrr� CALIFORNIA ASSOCIATION of SANITATION AGENCIES r 0 925 L Street,Suite 1400•Sacramento,CA 95814.TEL:(916)446-0388—FAX:(916)448-4808•www.casaweb.org August 6, 2003 Mr. Blake Anderson, General Manager Orange County Sanitation District Post Office Box 8127 Fountain Valley, California 92728-8127 Dear Blake: On behalf of the California Association of Sanitation Agencies (CASA), it is my pleasure to congratulate you, your Board of directors and the Orange County Sanitation District staff on becoming the first wastewater treatment agency in the State of California, and the nation, to be admitted to the National Biosolids Partnership's Environmental Management System for biosolids program. This is an important achievement toward continuous improvement of biosolids management practices. Your strong leadership and the tireless dedication of your staff is evidenced by reaching this industry milestone. CASA applauds this pioneering achievement and wishes you continued program success. With sincerest congratulations, L L�� Mike Dillon Executive Director Ensuring Clean Water for California Celebration Messages David Price, Kern County Resource Management Agency Dear Blake: Congratulations on receiving this significant industry/government certification. I'm very pleased for OCSD in reaching this impressive milestone. Best wishes for a successful recognition ceremony. I regret that my scheduled commitments prevent me from joining you this week, but please know that you have our heartiest congratulations. Good luck for continuing success with all of your important programs. David Price III, Director Kern County Resource Management Agency Elizabeth Allan, Executive Director, California Water Environment Association Please pass on my congratulations and applause to Blake Anderson and all the others at OCSD who were involved in this key accomplishment. I know learning from OCSD's experience will be invaluable for CWEA's members and we hope to be able to share that through our training events and publications. Congratulations! Elizabeth ------------------------------------- ------------------------------------- Elizabeth Allan, CAE, ABC Executive Director California Water Environment Association 7677 Oakport Street, Suite 525 Oakland, CA 94621-1935 Tel: 510.382.7800 Fax: 510.382.7810 eallan@cwea.org www.cwea.org ------------------------------------- ------------------------------------- Alan Rubin, EPA Blake and Mike: Congratulations on being the first municipality to enter the NBP EMS.. A job WELL DONEHM Cheers Alan Don Schulz, Surfrider Mike Moore and his team at OCSD are to be commended for a job well done. Congratulations Mike! Other General Congrats Synagro, Lorrie Loder Synagro, Elizabeth Ostoich Robert Adamski, WEF Public Education Committee Vice Chair& Gannett Fleming, E&A Ron Sieger, CH2MHill "Thank you for leadership and for the important milestone the Orange County Sanitation District has reached.The Office of Water looks forward to working with the District and learning from your experience in implementing this important program" said G. Tracy Mehan, It/, Assistant Administrator for Water, U.S. Environmental Protection Agency. "This is an important accomplishment which will hopefully pave the way for even greater adoption of EMSs by water and wastewater utilities." Jason Morrison, Program Director for the Pacific Institute for Studies in Development, Environment, and Security in Oakland, CA said, "The NBP EMS represents a notable step forward for industry-sponsored environmental improvement initiatives. Interested parties nationally and locally should view the NBP EMS Program as a progressive, credible effort, the certification to which demonstrates a biosolids organization's commitment and capacity to deliver consistent regulatory compliance, increased communication with interested parties, and continual improvement in all aspects of biosolids management." \\1 Ross M.Patten � SYNAGRO Chairman&CEO Tel:713-369-1709 Fax: 713-369-1760 A Residuals Management Company e-mail: rpatten©synagro.com August 6, 2003 Mr. Blake Anderson General Manager Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Dear Blake: On behalf of Synagro, I wish to congratulate the Orange County Sanitation District(OCSD) for being the first agency in the National Biosolids Partnership to successfully complete an independent third party audit of your environmental management system (EMS) for biosolids operations. The leadership that OCSD displayed in reaching this important milestone will set a worthy example for the entire biosolids industry. Our company is proud to have participated with your agency, as a vendor providing land application services, and as part of the audit process you successfully completed. The Synagro team recognizes the hard work and commitment your employees made to help implement this important EMS program. We especially would like to commend the professionalism your organization has exhibited throughout this process. Your leadership in supporting excellence in biosolids management, in exceeding regulatory compliance obligations, and in recognizing the importance of pubic education and public participation, will serve as a model for municipalities and biosolids land applicators nationwide. Please accept our best wishes and congratulations for achieving this great success. Sincerely, Ross M. Patten Chairman and Chief Executive Officer RMP/ss 1800 Bering Drive,Suite 1000,Houston,TX 77057 • Ph:(713)369-1700 • Fax:(713)369-1750 •Toll Free:(800)370-0035 BNA-Monday,July 28,2003 Page A-3 Federal Appeals Court Upholds Order Prohibiting County Restrictions on Biosolids A federal appeals court July 24 upheld an order prohibiting Appomattox County in Virginia from enforcing its ordinances restricting the land application of biosolids (O'Brien v. Appomattox County, Va., 4th Cir., No. 02-2019,7/24/03).. The U.S. Court of Appeals for the Fourth Circuit, in a unanimous opinion, upheld a preliminary injunction issued by a district court blocking the county from enforcing the biosolids ordinances. The county ordinances had been challenged by a group of farmers that wanted to use the biosolids as fertilizer on their fields. Biosolids are nutrient-rich organic materials resulting from the treatment of sewage sludge that can be recycled and applied as fertilizer,according to the Environmental Protection Agency. Eleven farmers in Appomattox County filed a complaint against the county in June 2002, charging the county's ban conflicts with federal and state laws regulating biosolids.The U.S. District Court for the Western District of Virginia rejected arguments by Appomattox County attorneys in an order issued in August 2002. James Slaughter, an attorney with the law firm Beveridge& Diamond,Washington, D.C., representing the farmers, said the appeals court ruling is significant because it is the first time a U.S.federal appeals court has issued an opinion on a biosolids land application dispute. The appeals court ruling "sends a message that localities should defer to state and federal regulatory expertise regarding the land application of biosolids,"Slaughter told BNA July 25. He said he expects the case to be returned to the district court for trial and a final decision on whether the county ordinance should stand. No trial date has been set. In addition to reaffirming the farmers' claims that federal and state law preempt local ordinances, the ruling also allows the farmers'claims for monetary damages to go forward, according to Slaughter. He told BNA the farmers are seeking damages to replace funds spent for the cost of fertilizer,the loss of organic soil value, and attorneys'fees. Biosolids Called Safe Although some have charged that the application of biosolids poses health risks, Slaughter said the application of biosolids on farmland is "far superior"to chemical fertilizers because it builds soil with organic material. "Studies have demonstrated that biosolids are safe and beneficial," he said. Darrell A. Carroll Jr., administrator for Appomattox County,told BNA July 25, "We're disappointed the injunction was upheld. We're going to trial at the federal district court level to see if we can prevail." Carroll said the county board of supervisors had enacted ordinances limiting the application of biosolids on local farmland in response to citizen concerns. Residents had expressed concern about possible health risks resulting from the potential contamination of well water, he said, adding scientific reports about health risks from biosolids have been conflicting. The county adopted one ordinance requiring biosolids be injected rather than spread to prevent runoff and another that increased property line setback distances, Carroll said. Both ordinances placed greater restrictions than state or federal regulations. The Appomattox farmers filed their initial complaint against the county on June 28, 2002, and claimed$820,000 in damages.They said the county ordinances were an intended and effective ban on biosolids and would deprive farmers of their property rights. On July 15, 2002,the farmers sought a preliminary injunction barring the county from implementing or enforcing ordinances that interfere with land application of biosolids in Appomattox County. According to court documents,on Aug.2,2002,the U.S. District Court for the Western District of Virginia issued an opinion granting in part and denying in part the farmers' motion for a preliminary injunction. In its memorandum opinion, the district court found that the farmers "will suffer immediate, significant,and acute irreparable harms if their motion for an injunction is denied."The county appealed. According to Slaughter, the Appomattox farmers hold valid Virginia permits for the land application of biosolids, which are issued by the Virginia Department of Health. In a prepared statement, Slaughter cited information from the health department indicating that farmers in more than 40 counties in the state fertilized their fields and conditioned their soils with biosolids during 2002. "In light of the widespread use of biosolids in Virginia and elsewhere in the United States, the regulations and examinations undertaken by the Virginia General Assembly and the United States Environmental Protection Agency, and the studies by the scientific community,the fear of possible, adverse health effects is too attenuated at this time to outweigh the likelihood of harm to the farmers," the U.S. court of appeals in Richmond wrote. By Linda Roeder Lee D. Garrigan AMSA, GouernmentAffairs (202)833-4655 www.amsa-cleanwater.ora www.win-water.ora BUSINESS WIRE: The Global Leader in News Distribution Page 1 of 2 Company Information Center Exp-er_ao-urce August 06, 2003 07:30 AM US Pacific Timezone Fitch Rates $280MM Orange County Sanitation District Revenue Bonds 'AA' SAN FRANCISCO—(BUSINESS WIRE)—Aug. 6, 2003—Fitch Ratings assigns a 'AA' rating to$280.0 million Orange County Sanitation District, Certificates of Participation, Series 2003. The bonds are scheduled to sell competitively on August 12th. Proceeds will help finance a portion of the Orange County Sanitation District's (the district)capital improvement plan. In addition, Fitch affirms the'AA' rating on the district's approximately $365.0 million of outstanding, parity senior lien bonds. The Rating Outlook is Stable. The'AA' rating reflects the Orange County Sanitation District's (the district) healthy financial position,which reflects the strong liquidity levels and stable revenue sources, competitive rates, and management's prudent capital planning and adoption of ongoing rate increases. While capital program costs are considerable, rates are projected to remain competitive and, more importantly, concerns over the district's current wastewater treatment standards are addressed. Debt levels will increase substantially to meet planned system improvements and variable rate exposure remains a concern, however, these risks are somewhat mitigated by the long-term benefits of the capital plan and strong liquidity levels. The district serves an estimated 2.4 million residents in northern and central Orange County, representing the 3rd largest wastewater system west of the Mississippi. The system treats an average 240 million gallons per day (mgd). The district's vast service area is characterized by its strong, diverse, and growing economic base. District infrastructure includes 200 miles of local sewers, 450 miles of trunk and force mains with 12 trunk lines, 22 pump stations, an ocean outfall, and two large treatment plants. Both treatment plants produce a combination of primary and secondary treated effluent; neither facility currently has sufficient capacity to meet full secondary treatment standards as required under the Clean Water Act.As a result, the district has historically operated with a special Environmental Protection Agency 301(h) permit waiver,which is required in order to discharge non-secondary treated effluent via the district's ocean outfall. However, a board directive recently declared the district's intention to meet full secondary standards by 2013. While the additional costs are significant(estimated$531.8 million), the end result will better position the district for ongoing growth while avoiding the legal, administrative, and capital issues associated with seeking and maintaining special EPA permit waivers. Fitch believes by achieving secondary standards, the risks of enforcement liabilities are minimized. The district's updated long term capital program has identified 136 large capital projects and 43 special projects to be completed by 2013. The program includes the Groundwater Replenishment System, collection system repair and maintenance, treatment facility planning, expansion, and improvements, and development of full secondary treatment for all effluent. Total capital spending through 2020 is estimated at$2.149 billion, 60%of which will come from debt proceeds and the remainder from pay-as-you-go funding. Concerns over the rising debt load and rising demands on system revenues for pay-go projects are somewhat mitigated by the district's strong current financial position sustained by historical rate hikes and ongoing rate increases adopted by the board. Rates should remain competitive despite substantial annual increases expected over the next several years. Following the proposed fixed rate offering, the district's overall debt profile remains exposed to variable rate risk. Future bond offering plans include both variable and fixed rate transactions, though a majority is likely to be fixed. Rate covenants are adequate including a 1.25 times(x) net revenue pledge for senior lien bonds and 1.0x for subordinate lien bonds; additional bonds tests are 1.25x maximum annual debt services (MADS)and 1.0x MADS, respectively. Contacts Fitch Ratings Mark J. Capell, 415-732-1756 (San Francisco) Media Relations: - Matt Burkhard, 212-908-0540 (New York) http://home.businesswire.com/portal/site/home/index jsp?epi-content--NEWS_VIEW—POP... 8/11/2003 Why You Should Support Proposition 53: The California Future lniti °s o n*3b According to the nonpartisan Legislative Analyst, Proposition 53 would generate about$70 billion to maintain and improve California's rapidly deteriorating infrastructure during its first 20 years — with no new taxes. Proposition 53 provides a direct benefit to you and millions of other California taxpayers. What happens if the California Future Initiative fails to pass? With massive state budget deficits and legislative action to shift infrastructure dollars to state operations, failure now could delay critical transportation, water, waste management, open space and other infrastructure projects for decades. That is a loss for all California residents and businesses. What happens if Prop 53 passes? Half the money from Proposition 53 Half the money from Proposition 53 (S35 billion)would go to LOCAL infrastructure ($35 billion)would go to STATE infrastructure projects. Implementing legislation would dedicate: projects. Implementing legislation would dedicate: for transportation based upon existing 50% for transportation projects on the STIP formulas ($17.5 billion) over 20 years ($17.5 billion) 15% to competitive grant programs for water 20% for parks and open space — $7 billion supply, recycling, wastewater and storm 30% for projects on the Five Year Infrastructure water projects ($5.25 billion) Plan ($10.5 billion) 15% for parks and open space further allocated as follows: ' * — 60%to cities and local districts($3.2 billion) —40%to counties and regional park and open space districts($2.1 billion) on a per capita basis as a block grant for any local infrastructure project($7 billion) LOCAL STATE Polls Show We Can Win This Initiative!* However, no statewide measure in California can pass unless it is well-financed. Contributions are critical to get our message to voters. We have established a $2.5 million campaign budget that we feel is reasonable and achievable. Please review the reverse side for information on how to contribute to the California Future Initiative. Please Make Your Contribution Now! See next page for contribution form. J. Moore Methods:67%support(March 2003)and the Public Policy Institute of California:590%support (June 2003) You Need the California Future Initiative. . . . . . We Need Your Support Listen to what the independent Legislative analyst has said about Proposition 53, the California Future Initiative: The state faces a significant challenge in addressing both the deficiencies of an aging public infrastructure and the need for new infrastructure to sustain a growing economy and population. To effectively meet this challenge, the state needs a well-defined process for planning, budgeting and financing necessary infrastructure improvements." "Given [the states] financing situation, there is really no stable funding source year- in and year-out for most state infrastructure projects." Proposition 53, the California Future Initiative, would provide that stable funding source and build a better future for all of us. Please Join Us and Support California's Future! O n3i For more information go to: www.yeson53.org or email info Oa yesonO.org - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1 want to help Proposition 53, the California Future Initiative on the October 7 ballot. Enclosed is my contribution of $ I I I I I I I I ' Name I I I I Street City Zip code I I I _ I ' Phone number I I I I I I Employer/Company Name I I- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -I To make a contribution complete the contribution information form (required by law) and mail your check to: Yes on California's Future, Yes on Proposition 53, c/o Steven Lucas, Treasurer Nielsen, Merksamer, Parrinello, Mueller& Naylor, 591 Redwood Highway#4000, Mill Valley, CA 94941 Please make check payable to: Yes on California's Future, Yes on Proposition 53 FPPC ID No. 1253055 Non-profit ID No. 82-0585765 Proposition 53: California Twenty-First Century Infrastructure Investment Fund Page 1 of 5 L.T-r-4_::eZ legislative LAO . . analyst's 60 YEARS OF SERVICE office August 11, 2003 Proposition 53 California Twenty-First Century Infrastructure Investment Fund Resolution Chapter 185, Statutes of 2002 (ACA 11, Richman) Background The state has hundreds of billions of dollars invested in infrastructure. Figure 1 shows the major areas of state-owned infrastructure, which includes highways, universities,parks, office buildings, and prisons. In addition, the state provides funds for local infrastructure in the areas of K-12 schools,community colleges, local streets and roads, local parks, wastewater treatment, flood control, and jails. Figure 1 Ma'or State Infrastructure Program Area Ma'or State Infrastructure Water Resources 32 lakes and reservoirs. 17 pumping plants. 3 pumping-generating plants. 5 hydro-electric power plants. 660 miles of canals and pipelines. 1,595 miles of levees and 55 flood control structures in the Central Valley. Transportation 50,000 lane miles of highways. 9 toll bridges. 11 million square feet of Department of Transportation offices and shops. 209 Department of Motor Vehicles offices. 138 California Highway Patrol offices. Higher Education 192 primary and satellite campuses of higher education, including 10,000 buildings containing 138 million square feet of facilities space. Natural Resources 266 park units containing 1.4 million acres and 3,000 miles of trails. 238 forest fire stations and 13 air attack bases. 21 agricultural inspection stations. Criminal Justice 33 prisons and 38 correctional conservation camps. 11 youthful offender institutions. 12 crime laboratories. - Health Services 4 mental health hospitals comprising over 4 million square feet of facilities and 2,300 acres. 5 developmental centers compromising over 5 million http://www.lao.ca.gov/initiatives/2003/53_10_2003.htm 8/12/2003 Proposition 53: California Twenty-First Century Infrastructure Investment Fund Page 2 of 5 square feet of facilities and over 2,000 acres. •2 public health laboratory facilities. General state 8.5 million square feet of state-owned office space. offices ace 16.6 million square feet of leased office space. The state needs to renovate and replace existing facilities in order that they can continue to serve their intended purposes. In addition, as the state's population continues to increase, the need for investment in new capital facilities will also grow. Over the next five years, California has an estimated$54 billion in identified state infrastructure needs. Funding for State Infrastructure. Traditionally, the state has funded its infrastructure projects in the following ways: . Dedicated Revenues. Some programs have dedicated revenues that must be used for specific purposes. Transportation-related infrastructure (highways and mass transportation) is currently the only major state infrastructure program that is funded by dedicated revenue sources (such as state gasoline taxes and federal funds). Over the past five years, the state has spent approximately $2.3 billion annually on transportation-related projects. . Bond Financing. Other than transportation, most other state program areas have relied on long- term infrastructure financing through the sale of general obligation bonds and lease-revenue bonds. (The debt service on both types of bonds is typically paid from the state General Fund.)In recent years, the state has issued large amounts of bonds for K-12 schools, higher education, and protection of natural resources.Those capital programs funded through general obligation bonds must wait for a bond authorization to be placed on a ballot and approved by the voters. Those capital programs that use lease-revenue bonds require legislative approval of the bonds in legislation. The state has spent approximately $4.2 billion annually in bond proceeds over the past five years. . Direct General Fund Appropriations. Some infrastructure programs use direct appropriations, also called "pay-as-you-go" financing, from the General Fund. However, these appropriations can vary significantly from year-to-year. For example, in the early 1990s there were no General Fund appropriations for infrastructure due to state budget difficulties. Over the past five years, the state has spent approximately $275 million annually using direct General Fund appropriations. Proposal This measure would increase the amount of General Fund revenue committed to pay-as-you-go capital outlay projects for both state and local governments. Figure 2 summarizes the basic provisions of the proposition. http://www.lao.ca.gov/initiatives/2003/53_10_2003.htm 8/12/2003 Proposition 53: California Twenty-First Century Infrastructure Investment Fund Page 3 of 5 Figure 2 Basic Provisions of Proposition 53 Purpose • Establishes the California Twenty-First Century Infrastructure Investment Fund(Infrastructure Fund). • Commits a percentage of the General Fund for"pay-as-you-go"infrastructure projects. Scheduled Transfers to the Infrastructure Fund • Transfers 1 percent of General Fund revenue to the Infrastructure Fund beginning with the 2005-07 fiscal year. • Gradually increases the amount of General Fund committed to the Infrastructure Fund. • Delays scheduled increases when General Fund revenue growth slows. • Accelerates scheduled increases by one year when General Fund revenues increase significantly • Caps annual General Fund transfers to the Infrastructure Fund at 3 percent of General Fund revenues. General Fund Revenue Triggers • Some trigger mechanisms reduce transfers to the Infrastructure Fund during periods when estimates of General Fund revenue growth decline. • Other trigger mechanisms eliminate transfers to the Infrastructure Fund when General Fund revenues decline. Special AdLstments • School Funding—Reduces transfer amount when the percentage growth in the Proposition 98 guarantee exceeds the percentage growth in General Fund revenues. • Bond Debt Service—Caps the infrastructure Fund transfer to the difference between 7.5 percent and the percentage of General Fund revenue devoted to prior-year debt payments for infrastructure-related bonds. Scheduled Transfers. Beginning with the 2006-07 fiscal year,this measure would transfer 1 percent of General Fund revenue to the newly established California Twenty-First Century Infrastructure Investment Fund (Infrastructure Fund). The amount of the transfer would increase by 0.3 percent annually under specified conditions until reaching a maximum of 3 percent of General Fund revenues in 2013-14 (see Figure 3). The initial 2006-07 transfer and any incremental increases in subsequent years would only take place if General Fund revenues grew by at least 4 percent (after adjusting for inflation) when compared to the previous year. (Thus, assuming an inflation rate of 3 percent, it would take revenue growth of 7 percent to trigger these increases.)Transfer rates would remain the same in those years that the revenue growth target is not met. On the other hand, the scheduled transfers would be accelerated by a year when General Fund revenues increased by 8 percent or more (after adjusting for inflation) when compared to the previous year. Figure 3 Proposition 53 Scheduled Transfers to the http://www.lao.ca.gov/initiatives/2003/53_10_2003.htm 8/12/2003 Proposition 53: California Twenty-First Century Infrastructure Investment Fund Page 4 of 5 v Infrastructure Funda Percentage of Fiscal Year General Fund 2006-07 1.0% 2007-08 1.3 2008-09 1.6 2009-10 1.9 2010-11 2.2 2011-12 2.5 2012-13 2.8 2013-14 and thereafter 3.0(maximum rate) a Transfers would depend on meeting specified conditions (see text). The measure requires the Legislature to allocate annually the moneys in the Infrastructure Fund for capital outlay purposes-50 percent for state-owned infrastructure and 50 percent for local government infrastructure. The measure requires the Legislature, in subsequent legislation, to set forth the approach and method to be used in the annual allocation of the Infrastructure Fund for local government infrastructure projects. The local funds could go for any capital outlay purpose except for K-12 school and community college projects, which presumably would continue to receive funding from state bond measures. Revenue Triggers. Proposition 53 contains a variety of adjustments or"triggers" that would reduce or eliminate the transfer to the Infrastructure Fund when General Fund revenue performance is poor or less than estimated. • Year-to-Year Changes. When revenues are estimated to decline from the prior year, there would be no General Fund transfer into the Infrastructure Fund. (In addition, the subsequent-year transfer would be reduced by half.) . Revenue Declines Within the Year. When estimates of General Fund revenue for a given year decline significantly from earlier estimates, the scheduled annual transfer amount would be reduced (by either one-half or one-quarter, as specified). Special Adjustments. The measure also contains the following special adjustments that could serve to limit the amount of an otherwise scheduled transfer to the Infrastructure Fund: . Debt Service. This measure contains a special adjustment to cap the Infrastructure Fund transfer to the difference between 7.5 percent and the percentage of General Fund revenue devoted to prior- year debt payments on state bonds (known as the debt service ratio). For instance, if the state's debt service ratio were 6 percent, the Infrastructure Fund transfer would be capped at 1.5 percent (7.5 percent less 6 percent)—even if the transfer schedule called for a higher percentage. . Proposition 98. The measure would reduce the transfer amount when the percentage growth in the K-14 public school funding guarantee (known as the Proposition 98 guarantee) exceeds the percentage growth in General Fund revenues. This adjustment would only occur when none of the other triggered reductions or adjustments are in effect that year. Proposition 53 would not directly affect the amount required to be spent under Proposition 98. Fiscal Effects http://www.lao.ca.gov/initiatives/2003/53_10_2003.htm 8/12/2003 Proposition 53: California Twenty-First Century Infrastructure Investment Fund Page 5 of 5 Proposition 53 would dedicate a specified amount of the state's General Fund to pay-as-you-go capital outlay projects. Since the measure does not change the overall level of General Fund revenues, the dedication of some resources for pay-as-you-go infrastructure would result in a commensurate reduction in resources for all other purposes. The amounts of future transfers to the Infrastructure Fund are difficult to estimate, as they would depend on a variety of fiscal and economic variables. If, however, the scheduled transfers shown in Figure 3 occurred, we estimate they would start at roughly $850 million in 2006-07 and grow to several billions of dollars in future years. Given the various adjustments and triggers in the measure, it is likely that the actual transfer amounts would be considerably less than the scheduled transfers in many years. For instance, if past General Fund revenue trends generally held true for the future, it could take roughly twice the time for the transfers to reach the scheduled 3 percent maximum rate. In addition, there would be some years in which no transfer was made to the Infrastructure Fund and some years in which only a partial transfer was made. Still, our review suggests that there would be transfers in most years. As described earlier, half of the transfer amount would be dedicated for state infrastructure projects and the other half for local projects. Return to Initiatives and Propositions Return to Legislative Analyst's Office Home Page http://www.lao.ca.gov/initiatives/2003/53_10_2003.htm 8/12/2003 t J ` • - _ _ i'`� K. • ,iltt { • - t �t Sf rt .' �/ �• f i L��t tie r i _ `S• 9 �.._. t f4` S J r IwC 6 � ./fry t• h J yR.' �N`4'�.' r. r - 1�V ,ti1�.�, rift � f✓ y�" Table of Contents Section Name Page Number Executive Summary ProgramOverview..............................................................................................................ES-1 Program Key Accomplishments This Month......................................................................ES-1 ProgressSummary..............................................................................................................ES-2 CostSummary.....................................................................................................................ES-3 Program Expenditure Projection.........................................................................................ES-3 MasterSchedule Summary.................................................................................................ES-4 PermitSummary.................................................................................................................ES-5 Public Information& Outreach Summary..........................................................................ES-5 Section 1 -Design DesignOverview.................................................................................................................... 1-1 Key Accomplishments This Month.......................................................................................1-1 UpcomingWork..................................................................................................................... 1-2 ProgressSummary................................................................................................................. 1-2 Design Contract Budget Review............................................................................................1-2 Section 2-Construction Management Construction Management Overview....................................................................................2-3 Key Accomplishments This Month.......................................................................................2-3 UpcomingWork.....................................................................................................................2-3 ProgressSummary.................................................................................................................2-4 Program Cost/Budget Summary ............................................................................................2-4 SProgram Schedule Summary..................................................................................................2-6 Construction Management Contract Budget Review............................................................. -8 Section 3 - Construction ConstructionOverview..........................................................................................................3-1 Southeast Barrier Pipeline Contract.......................................................................................3-2 Temporary Microfiltration/Site Power Distribution Contract .............3-6 .................................. GWR Unit III Pipeline Contract ............................................................................................3-9 0) Section 4 -Permits PermitOverview....................................................................................................................4-1 Key Accomplishments This Month.......................................................................................4-1 Section 5 -Public Information and Outreach Public Information and Outreach Overview..........................................................................5-1 A Key Accomplishments Recent Months..................................................................................5-1 MWH Orange County Water District Page i Groundwater Replenishment System-June 2003 Report Table of Contents LIST OF TABLES Table Name Page Number Table 1 -GWR System Program Completion Status................................................................ES-2 Table 2 -GWRS Program Cost Analysis Summary................................................................. ES-3 Table 3 -GWR System Design Completion Status..................................................................... 1-1 Table 4 -Program CM Elements Progress Summary..................................................................2-4 ` Table 5 -Program Construction Budget/Cost Summary............................................................2-5 Table 6- Construction Contracts Status Summary......................................................................3-1 Table 7 -CM Elements Progress Summary.................................................................................3-3 Table 8 -Construction Cost Summary.........................................................................................3-3 Table 9 -CM Elements Progress Summary.................................................................................3-7 Table 10 - Construction Cost Summary.......................................................................................3-7 Table 11 - CM Elements Progress Summary...............................................................................3-9 Table 12 - Construction Cost Summary............:..........................................................................3-9 Table 13 - Summary of Permit Steps and Current Status............................................................4-1 ® LIST OF FIGURES On or Following Figure Name Page No. Figure 1 - GWR System Program Components Map................................................................ES-1 Figure 2 - GWR System 12-Month Expenditure Tracking.......................................................ES-4 Figure 3 - GWR System Program Master Schedule.................................................................ES-4 ® Figure 4-Design 12-Month Expenditure Tracking.....................................................................1-2 ® Figure 5 - GWR System Monthly Expenditure............................................................................2-5 Figure 6 -GWR System Cumulative Expenditure.......................................................................2-6 Figure 7- Summary Program Master Schedule...........................................................................2-7 Figure 8 -CM Budget 12-Month Expenditure Tracking.............................................................2-8 ® Figure 9 - Southeast Barrier Pipeline Contract............................................................................3-3 Figure 10- Southeast Barrier Pipeline Contract..........................................................................3-7 MWH Orange County Water District Page ii Groundwater Replenishment System—June 2003 Report (DRAFT) EXECUTIVE SUMMARY PROGRAM OVERVIEW The Ground Water Replenishment System (GWRS) is comprised of three major components: (1) Advanced Water Treatment Facilities (AWTF) and pumping stations; (2) a major pipeline connecting the treatment facilities to existing recharge basins; and (3) extension of the existing seawater intrusion barrier. Phase 1 of the GWRS will nominally produce 70 million gallons per ® day of high-quality product water. A general location map of the GWR System Program construction contracts is shown on Figure 1. Figure 1 - GWRS Program Components Map Y 7 tKraem ast s 00 anta Anna River N erton 91 GWR Pipeline U3 FWYS 55 GWR Pipeline U2 Huntington aeh GWR Pipeline UI AWTF Plant Fo tai Val initial MF Irvine .. FWYI Barrier Facilities SE Barrier Pipeline Pacific Oceanr As shown on Table 1, the GWRS Program includes nine construction contracts. Program design started in March 2001 and it will be completed in November 2003. Program construction completion is scheduled for July 2007. PROGRAM KEY ACCOMPLISHMENTS THIS MONTH • Completed Barrier Facility Contract 90%design-level documents. • Completed AWTF Contract Process Controls System 60%design-level documents. �. MWH Orange County Water District Page ES-1 Groundwater Replenishment System—June 2003 Report (DRAFT) Executive Summary SE Barrier Pipeline Contract • Evaluated options and successfully mitigated a conflict between 42-inch barrier and an existing 30-inch asbestos cement seawater pipe. Prevented a proposed $120,000 change order by the Contractor. • Contract time is 68% expended and the work is 55% completed. Substantial completion is scheduled for end of September 03. Temp MF/Site Power Contract • Mobilized, submitted baseline schedule, and started potholing for the electrical and !A communication duct banks. A • Completed demolition of the chlorine contact basins and constructed the north employee parking lot, on schedule. GWR Pipeline Unit 3 • Held pre-bid conference and site tour- 14 prospective bidders attended. • Provided clarifications to prospective bidders and issued a contract addendum. A PROGRESS SUMMARY S Status of the GWRS Program, as% complete by contract level, is presented in Table 1. Table 1 -GWRS Program Completion Status Contract Design Bid/Award Construction Contract %Complete %Complete %Complete Complete Date S AWTF Plant 80 0 0 7/6/2007 S Barrier Facilities 90 0 0 2/28/2006 GWR Pipeline U1 95 0 0 10/19/2006 s GWR Pipeline U2 95 0 0 10/19/2006 GWR Pipeline U3 100 80 0 3/10/2006 SE Barrier Pipeline 100 100 60 10/2/2003 Initial MF & Site Power 100 100 5 6/14/2004 Temp PM&CM Offices 100 100 100 8/1/2003 lb Theo Lacy Pipeline 100 100 100 12/1/2001 Average 85 11 2 16 A 1s MWH Orange County Water District Page ES-2 Groundwater Replenishment System—June 2003 Report (DRAFT) Executive Summary COST SUMMARY During this reporting. period, the total program budget did not change. Table 2 provides a program cost summary by major program phases. This table also shows how the program original CIP budget of $453.9 million is adjusted for actual contract awards, revised cost estimates, escalation, scope adjustment, contingency released and contingency available to yield an updated program projected estimate at completion cost of about$454 million. Table 2-GWRS Program Cost Analysis Summary Adopted Revised Estimates at Budget Actual Cost Description Budget Budget Completion Variance (04/01- Oct. '02 June 103 (EC-RB) 05/103) 00 Design $30,721,994 $31,706,623 $31,706,623 $0 $18,069,193 Construction * $396,873,991 $386,532,311 $386,532,311 $0 $7,047,286 0% Construction M $13,970,000 $13,966,808 $13,966,808 $0 $671,751 is, LA $9,117,340 $14,976,696 1 $14,976,696 $0 1 $2,815,372 Contingency Available $3,216,675 $6,717,562 $6,717,562 $0 $0 Program Total $453,900,000 $453,900,000 $453,900,000 $0 $28,603,602 *Includes 5%contingency As of this reporting period, the Program is not experiencing a budget overrun and there is no significant budgetary variance. If the variance exceeds 1% of the original program budget, S adequate mitigating measures will be recommended. Comprehensive review of the budget is being conducted, on a monthly basis, by the Program management team. As a further budget control measure, an annual financial audit of the Program by an independent auditing agency will be performed. PROGRAM EXPENDITURE PROJECTION There were no significant changes to the Program master schedule last month, nor were there any significant changes to the program scope and budget. As a result, the June expenditure projection did not change from the previous month. The actual and projected program expenditures are graphically presented in Figure 2. For ease of review, monthly and cumulative planned and actual expenditures are graphically presented. The graph presents a 12-month window of expenditure tracking. The actual cumulative values represent a trend line. If the trend line exceeds the planned cumulative line it e indicates a potential overrun requiring corrective action. The actual monthly values, on the other hand,may vary.significantly from the planned values and is not a major cause for concern. MWH Orange County Water District Page ES-3 Groundwater Replenishment System—June 2003 Report (DRAFT) s Executive Summary A Figure 2—GWRS 12-Month Expenditure Tracking 6,000 -.----=- ------------ --- ------------ ---T---,--- 60,000 PIn $/month Act$/month G 0 5,000 -�-Pln Cum $/month - --Act Cum $/month ___-___ ' 50,000--- c 0 0 4,000 ---;--- ----- ------ - --- -------- -- - 40,000 A - 3,000 ------- -- -- ;------- --; - 30,000 2,000 --- --- ----;----;--- --- --- -- -; -- - 20,000 _ a d x x 1,000ra -- --; - - ; --; - 10,000 w Oi - w - - -- - - 0 a U A Jan Feb March April May June July Aug Sept Oct Nov Dec A 2003 A A A MASTER SCHEDULE SUMMARY A A summary the June 2003 Master Schedule Update is shown in Figure 3. Major schedule changes included delaying the bid announcements for GWRS Pipelines U1 and U2 contracts. l� The delay was caused by permit acquisition activities. While permit acquisition impacted design and construction completion of these pipeline contracts, the delay did not impact the completion date of the program. Figure 3 - GWRS Program Master Schedule Update .. Groundwater s Contracts Schedule ..ww- Repleni�;hrnent ���Lern Contracts 2002 20a3 2004 2005 2006 2007 04 101 1W.103 04 Q/ Q2 Q3 04 Qt 02 03 04 of 102 03 104 1 02 SOUTHEAST BARRIER 1012 PIPELINE - - -- - - ---l- -- - - INITIAL MRSITE POWER Status Line:6/30/03 AWTF PLANT 9 7/6 GWR PIPELINE UNIT 01 r 10/19 GWR PIPELINE UNIT i�2 t0rz _ tlat9 _ - --- -1------ - ---- - - -==- - - ----�- - - - GWR PIPELINE UNIT 43 10129 1 V2B BARRIER FACILITIES 9123 - 3 2/28 I � I I MWH Orange County Water District Page ES-4 Groundwater Replenishment System-June 2003 Report (DRAFT) Executive Summary PERMIT SUMMARY The DHS sent the "Summary of Public Hearing, Findings of Fact and Conditions" to the RWQCB on July 28, 2003. In this document, DHS approves the project and recommends permit criteria to the RWQCB. A PUBLIC INFORMATION & OUTREACH SUMMARY A The public information and outreach program continues on a successful track of informing the public and securing support for the project. The outreach team recently intensified efforts to cultivate support from the health and medical community and has had tremendous success in this arena. A number of hospitals, medical associations and national experts have met with outreach team members and concur that the GWR System will produce the highest quality water available. Support from the health and medical community helps reassure the public that GWR System water will be safe. 0 S MWH Orange County Water District Page ES-5 Groundwater Replenishment System—June 2003 Report (DRAFT) t3DaPA LsTf*0"Z 11k ORANGE COUNTY LEADERSHIP SYMPOSIUM DATE: August 7, 2003 The OCLS Advlsory Team TO: Orange County Board of Supervisors BLAKE ANDERSON Orange County Fire Authority Board of Directors General Manager ORANGE COUNTY SANITATION Orange County Sanitation District Board of Directors DISTRICT Orange County Transportation Authority Board of Directors )ANET M.HUSTON Transportation Corridor Agencies Board of Directors Executive Director Local Agency Formation Commission LEAGUE OF CALIFORNIA CITIES,ORANGE COUNTY DIVISION FROM: Wally Kreutzen, Art Leahy, Janet Huston, Dana Smith, Blake Anderson, Tim O'Donnell, Chip Prather WALLY KREUTZEN Chief Executive Officer TRANSPORTATION CORRIDOR SUBJECT: Orange County Leadership Symposium III AGENCIES ART LEAHY HISTORY OF OCLS Chief Executive Officer ORANGE COUNTY TRANSPORTATION AUTHORITY In 2000,the executive directors of seven Orange County regional agencies— TIM O'DONNELL Orange County Fire Authority, County of Orange, LAFCO, Orange County Mayor, City of Brea Sanitation District,Transportation Corridor Agencies, Orange County ORANGE COUNTY CITY MANAGERS'ASSOCIATION Transportation Authority, and the League of Cities—began meeting on a regular basis to discuss their future common challenges. CHIP PRATHER Chief The executive directors collective) appreciated that the problems and ORANGE COUNTY FIRE Y PP AUTHORITY opportunities resultant from the urbanization of Orange County would require all of the county's leaders to work collaboratively toward shared solutions. With the VACANT financial and moral support of their respective boards,the executive directors County Executive Office pp p COUNTY OF ORANGE formed the OCLS Advisory Team and built a framework for what they called the "Orange County Leadership Symposium,"or"OCLS."The Advisory Team DANA M.SMITH aspired to create a forum where county regional leaders could develop an Executive Officer LOCAL AGENCY FORMATION understanding of the risks and ever-changing demands of leadership and tap into a COMMISSION collective capacity to enact positive change for the future of Orange County. They envisioned that the symposium would foster the development of working relationships between leaders who are responsible for overlapping regional issues. Over sixty attendees participated in the first annual Orange County Leadership Symposium, held in January 2001 at the UCLA Conference Center in Lake Arrowhead,to explore the challenges of leadership. Encouraged by the results of OCLS I,the Advisory Team hosted a couple of smaller OCLS events in 2001 and then coordinated the second annual Orange County Leadership Symposium in January 2002. The event again drew more than sixty participants, over half of - whom had attended OCLS 1. Board Letter re OCLS IN August 7, 2003 Page 2 of 4 FUTURE OF OCLS The long-term challenges facing Orange County's leadership will compound as the county's population increases by more than 700,000 people in the next two decades, the pressures on the county's infrastructure reaching critical proportions. (Refer to Exhibit A, PowerPoint presentation re the future growth of Orange County, `Building Leadership Capacity.") At the same time, the long-term goals envisioned for OCLS become more crucial —to inspire a renewed sense of stewardship over Orange County, to encourage more peer to peer communication and interaction among the county's leaders,to infuse creativity and long-term vision into the OC leadership dialogue, and to leave a positive legacy to the future Orange County. OCLS has created a powerful momentum and deciding how to channel that energy presents its own challenges. The Advisory Team solicited and gathered feedback during the closing session of OCLS II. Additionally,participants of OCLS II were sent and asked to complete evaluation forms responding to the following topics: * Time Devoted to the Retreat * Rating the UCLA Conference Center * Major Areas of Focus of OCLS III/How to Improve OCLS The Advisory Team has carefully considered all responses,both kudos and criticisms, and has done its best to incorporate them into the planning of OCLS III. Time Devoted to the Retreat OCLS I convened over three days and two nights. OCLS II was extended to include an additional night. The majority of respondents indicated that OCLS II program was a little too long and suggested that the time format of OCLS I worked much better. In response to these suggestions,the Advisory Team is suggesting that OCLS III convene over three days and two nights. Rating the UCLA Conference Center Participants were asked to rate the UCLA conference center in several respects, including sleeping accommodations, meeting rooms, lounge/reception areas, and food quality. Responses reflected positively on the facilities and the food. Despite the positive marks that the UCLA facility received, the Advisory Team investigated other possible venues in the vicinity of Orange County, including the Embassy Suites in Santa Ana and the Kellogg Center in Pomona. The team found that, in addition to being a favorable venue in the eyes of past participants, the UCLA Conference Center also offered the best fiscal value—less than $369 per person includes _ two nights lodging, use of three conference rooms (including set-up fees), all AN equipment, six full meals, plus snacks and drinks in between, and all taxes. Board Letter re OCLS III August 7, 2003 Page 3 of 4 By comparison, the Embassy Suites in Santa Ana did not offer a conference package but instead charged a line item fee for each service. Lodging, for example, would be $188/person plus tax for two nights. The six meals, catered through the hotel, would be charged separately per person varying on the low end from$12.95 plus tax per lunch to $20.95 plus tax per dinner,with beverages charged in addition to the food. Additional snacks and beverages between meals would be charged at a la carte prices. The rental of the conference rooms, complete with an additional$75 set-up fee per session, all AN equipment, and taxes would be extra. The Kellogg Center quoted a rate $353.45/person including six meals and lodging. The cost of the conference rooms, set-up,all AN equipment, snacks and beverages, and all taxes would be additional. The UCLA Conference Center is holding the dates of Friday,January 9, 2004 through Sunday, January 11, 2004 at the request of the Advisory Team. The conference center requires an executed contract by September 11,2003 to put a permanent hold on the dates. Major Areas of Focus of OCLS III/How to Improve OCLS Suggested areas of focus varied as much as the participants proposing them,though certain themes tended to echo throughout many of the suggestions, including: * Communication-problem solving beyond the divides of north and south;teamwork and compromise; working through differences of opinion * Goals & Vision-collectively building common goals * Case Studies * New/different facilitators Most importantly, respondents of the evaluation form voiced overwhelming support for continuing with OCLS III. At the closing session of OCLS II, attendees expressed an interest in greater participation in the development and design of the next event. The sentiment was reiterated by survey respondents through the many suggestions they put forth for the betterment of OCLS. Built into the planning of OCLS III is the opportunity for past participants to meet with the facilitator in early discussion groups, thereby enabling participants to steer the design of the program toward meaningful outcomes. Additionally, the Advisory Team took seriously the calls from participants for new facilitation. The consulting services of Eric Allenbaugh, Ph.D. were recommended to the team, and the team is engaged in active discussions regarding the possibility of contracting with Dr. Allenbaugh for OCLS III. R TC MtZZ BOAR C at&Vd Dr. Allenbaugh's proposal B. His qualifications and references are _ a'If 4Ildble- bV c-atlIV R(aI:v- C _�t(y, s r3• ill D_ FOM T-c-f& $Ae-'E_ Olr' 54ulk< PAPIEe .r(rug. f,/©r- (A.<L t.,,O ' f T- w t rt4�t 0 I- f-- S oL D c ,c7-- $p"6 <_'g 77-r-2 Board Letter re OCLS III August 7, 2003 Page 4 of 4 BUDGET Recognizing the fiscal challenges that municipalities will face in the coming year,the Advisory Team did its utmost to cut the costs of OCLS III.As a result,the team was able to par down the overall cost of the conference by over$30K and reduce the registration fee for participants from sponsoring agencies from$525 to $375. Attached as Exhibit)2(is the draft budget proposed by the Advisory Team. The draft budget offers a side-by-side comparison between OCLS II and OCLS III. Also included, the Advisory Team assembled a spreadsheet comparing the costs of OCLS III against the costs of other leadership training offered by organizations such as Stephen Covey and the National League of Cities. RECOMMENDATIONS The Advisory Team asks for your support and your attendance at OCLS III. The financial obligation for each participating regional agency is $5,000 and the cost per person for their attendees is $375. For members who serve on multiple boards,the cost per person will be shared by each of the agencies. The Advisory Team believes that the challenges Orange County faces over the next 25 years will be unlike any Orange County has faced in the last 100 years. Those challenges will require your creative, focused, and innovative leadership. OCLS is first and foremost designed as a tool and a forum to support your leadership vision and to ensure that a powerful legacy is left for the next generation of Orange County citizens. Please join us in 2004. 1- A- BUILDING LEADERSHIP CAPACITY: INDIVIDUAL AND COMMUNITY PATHWAYS TO LEADERSHIP RENEWAL PARTNERSHIP AGENCIES REPRESENTATIVES ♦ County of Orange, Michael Schumacher, CEO ♦ League of California Cities, Janet Huston, Exec. Dir. ♦ O.C. Manager's Association, Michael Parness, City Manager of San Clemente ♦ O.C. Fire Authority, Chip Prather, Fire Chief ♦ O.C. Local Agency Formation Commission, Dana Smith, Exec. Officer. ♦ Orange County Sanitation Districts, Blake Anderson, General Manager ♦ Orange County Transportation Authority, Arthur Leahy, CEO ♦ Transportation Corridor Agencies, Wally Kreutzen, CEO ♦ City of Brea, Tim O'Donnell, City Manager 1 The "Orange Curtain" is no longer between Los Angeles and Orange Counties, but now in the middle of Orange County dividing urbanized, minority North County from more suburban, whiter South County. —The Chapman Poll, May 9, 2001 The Challenges ♦ When envisioning the future of Orange County there are numerous challenges that can best be addressed in a spirit of cooperation through effective and thoughtful leadership. People, People, People Orange County. . . ♦ Fourth most populated county in the U.S ♦ Second densest county in California running slightly behind Los Angeles County. ♦ Urbanized with Santa Ana's 337,000 residents to rank as the ninth most densely populated urban area nationwide, just slightly behind Chicago. ♦ Home to approximately 2.8 million residents and will increase to over 3.4 million by 2025. Southern California. . . ♦ Expected to grow in 2025 to a population of 23 million, up 35% from today's 17 million. 3 Housing and Land Orange County . . . ❖ Nearly built out and projected to add 726,000 residents by 2020. ❖ Has one of the highest gross housing densities with 3.6 housing units per acre. ❖ Stretched--builders would need to produce an average of 75,000 new additional rental units and 220,000 additional single family housing units every year to satisfy demand in 2025. ❖ Orange County will run out of land for development by 2010. ❖ Constraints on development have exacerbated problems, causing housing shortages. 4 Employment Orange County . . . ♦ Creates 3 to 4 jobs for every new house built. ♦ By 2025, more than two million people will be employed creating over 750,000 new jobs. ♦ Has one of the lowest unemployment rates in the country. Transportation .oii&ft ♦ Hours idling in traffic, cost Los Angeles and ♦ If the Toll Roads weren't Orange County residents operating, Orange County over$1,000/year and San traffic at peak hours would Bernardino-Riverside increase from 4 to 25%in residents over$685/year. certain key freeway segments, with traffic on ♦ Twenty seven percent of arterials increasing America's urban substantially as a result. freeways-accounting for ♦ One-third of the nation's 61% of all miles driven- major roads are in poor or are congested. mediocre condition, costing American drivers around$5.8 billion a year. 5 Southern California. . . . ♦ The "Four Corners" convergence of Orange, Los Angeles, Riverside, and San Bernardino counties will see traffic double by 2020 and speeds slow down by 15 mph along stretches of the Riverside and Orange Freeways. ♦ Travel times from Diamond Bar to Santa Ana, Chino to Costa Mesa, and Corona to Anaheim will increase more than 47% during peak hours by 2020. ♦ Commuters now spend the equivalent of nearly a week and a half of their lives per year sitting in traffic while employment and, possibly, congestion will grow by more than 70% in the future. Nationwide . . . ❖Passenger-miles of travel will increase to 8.4 trillion in 2025, provided that the capacity issues can be adequately addressed. **.*By 2025, there will be more than one vehicle per licensed driver. ❖ As a result of growing automobile industry, lane capacity will not keep up with demand. 6 Education ♦ Enrollment increases in developing suburbs and rapidly grows in older urban neighborhoods, which lack both the land and the money to build new schools. ♦ California schools already have some of the most overcrowded classrooms in the country. ♦ Los Angeles county alone has identified the need for 85 new schools. ♦ In 2020, children will account for 30% of the State's population. ♦ Currently, the average cost of investment needed is $3,800 per student, more than half the average cost to educate that student for one year. a 7 Other--Diversity, Environment, and Energy • According to the 2001 Chapman Opinion Poll, a majority of residents say that ethnic groups have helped the economy and the quality of life in Orange County. Although, residents still feel that ethnic groups have made it harder for local government to be effective • Orange County's cluster of high-technology employers is the second most diverse in the country • Today, in Orange County, we have cleaner air, dirtier oceans, and we are near our carrying capacity for water and power. • Our 54,000 drinking water systems in the nation face an annual shortfall of$11 billion needed to replace facilities that are nearing the end of their useful life and to comply with federal water regulations. 8 F6 ---- What can we do? ♦ Combine resources and knowledge to collaborate on a shared vision among elected officials. Together, as leaders, we can reap results and renovate the already rapidly changing county we live in. ♦ We can open the "Orange Curtain" and awaken and/or deepen the commitment to collaboration and community building by broadening visions to encompass and inspire responsibility to the entire county. Last but not least . . . . ♦ We need to establish and intensify the interpersonal connections and relationships among ourselves upon which, ultimately, the effective transfer of leadership capabilities and sense of collective stewardships come together. We need to "jump start" our county and work together! 9 Call to Action -*.-Leadership Capacity Building offsite -*.-Synopsis and overview prepared in partnership with the Orange County -LAFCO -Transportation -League of Cities Corridor Agency -Orange County -County of Orange Transportation Authority -Orange County -Orange County Sanitation Fire Authority Department IN OFFSITE ♦ Two and a half day offsite seminar— at the UCLA Lake Arrowhead Center ♦ devoted to the unique leadership and decision making challenges of elected officials serving on regional boards and commissions in Orange county 10 Sponsorship ♦ Contributions of$5,000 from each agency to participate in the conference will allow our leaders to regain focus on what's important in Orange County! ♦ Commitment to participate /E� in offsite. 11 OCLS III 20L, draft budget orange County Leadership Symposium III -Draft Budget 2004 OCLS II Comparison costs 3 days of facilitation UCLA Conference Center(special pricing for government) per/ 70 attendees per/person 61 attendees Lodging 2 nights-double occupancy _ All Meals(six full) Conference snacks and drinks Use of three conference room_s Audio-visual equipment Taxes Total per person 368.20 25 774.00 $ 480.74 29 325.06 Facilitation Design and Facilitation Meetings with Executive Staff Design meetings with Elected Officials Focus group discussion-with Elected Officials Facilitation of two day OCLS Travel expense_s Total Expenses i S 450.00 $ 31 500.00 975.74 59 520.00 Materials and Miscellaneous Expenses Postage,copies, poster boards OCLS III-shirts Course materials Total _ 78.57 _ 5,500.00 _ $ 65.57 $ 4,000.00 Total Cost $ 896.77 $ 62,774.00 $ 1,522.05 $ 92,845.00 I I � Per Agency total Per Agency total Regional Agency Contributions TCA, Orange County, OCSD, League of Cities LAFC0, OCFA,_OCTA - - Total 5,000.00 35 000.00 9,000.00 63 000.00 Attendees of Sponsoring Agencies Estimate 50 attendees _ 375.00 18 750.00 Based on 63 525.00 32,025.06 attendees Attendees of non-sponsoring agencies $525.00 10,500.00 Estimate 20 attendees Total $ 64,250.00 $ 95,025.00 Contin enc difference between projected revenue and expenses) 1,476.00 2,180.00 8/8/2003 1 Prepared by Dana Smith,Orange County LAFCO OCt_a III Comparison Costs Leadership Training Conference Costs Hotel for two nights Meals for two days Transportation TOTAL Comparisons (adjusted for two nights) (Est. of$150 per night) (Est. $20 per meal) (Assumes air and car) per person The Federal Executive Institute and Management Development Center Leaders Growing Leaders 2003 1,845.00 included included 450.00 1,845.00 Crises Management skills for Executives 2,500.00 included _ included 450.00 2,500.00 - — — --- -- _ — (east coast Tom Peters Company The Leadership Challenge � 2,400.00 300.00 120.00 300.00 2,820.00 Sonoma Stephen covey___ Four Roles of Leadership $ 1,095.00 $ 300.00 120.00 N/A 1,515.00 Creative Leadership Institute Foundations of Leadership 3,600.00 included included 54.00 3,654.00 (San Diego) National Lea ue of Cities _ .Leadership Summit 2003 —595.00 $ 300.00 $ 120.00 300.00 1,315.00 (Sonoma) Orange County Leadershfp Symposium ili 896.77 included included 54.OM 950.77 Lake Arrowhead i 8/8/2003 2 Prepared by Dana Smith Orange County LAFCO ORANGE COUNTY CaCL_ � -- "•;� BUSINESS COUNCIL r-e-�z L. . And the Metropolitan Water District of Southern California, Municipal Water District of Orange County and Orange County Water District Present. . . IDEAS WHOSE TIMES HAVE'\COME INNOVATIVE SOLUTIONS TO ORANGE COUNTY"S WATER SUPPLY Guest Panelists ■ Adan Ortega, Jr., Metropolitan Water District of Southern California ■ Representative, Municipal Water District cof Orange County ■ John Kennedy, Orange County Water District ■ John Schatz, Santa Margarita Water District ■ Paul Jones, Irvine Ranch Water District Guest Speakers Christine Diemen Iger, Manatt Phelps & Phillips Bob Bein, RBF Consulting Stephen Bone, The Robert Mayer Corporation Friday, Sept. 19, 2003 7 a.m. Registration - 7:15 to 9:30 a.m. Breakfast and Program Hyatt Regency Irvine 17900 3amboree Road Irvine, CA 92614 Limited Seating-Reservations and payment requirediin advance: Register online at www.ocbc.org or complete the form below and mail or fax Water Supply Program Friday, Sept. 19, 2003 $25 OCBC Investors (received prior to 9/12/03) • Charge my credit ca0d: Visa MC_Exp.date $35 Walk-ins, non-investors and Name on card registrations received after 9/13/03 Card # Signature • Check enclosed $ NAME COMPANY ADDRESS CITY ZIP PHONE FAX EMAIL - Please fax or return this form with your check payable to the Orange County Business Council 2 Park Plaza, Suite 100 - Irvine, California 92614 (949) 794-7221 - fax: (949) 476-0443 nn; W' a ��- Regulatory Bulletin California Association of Sanitation Agencies.. Volume 12,Number 3 August 2003 SWRCB RELEASES DRAT 303(d) LISTING determinations.and.for de-listing of waters. POLICY AND TMDL DEVELOPMENT GUIDANCE Waters that have been carried over onto the 303(d) list from prior years would be subject to In early July 2003, the State Water Resources Control reassessment using the adopted policy. Board(SWRCB)released drafts of two documents criti- During the July PAG meeting, the environmental rep- cal to the State's Clean,Water Act(CWA)section 303(d) resentatives expressed strenuous opposition to both listing and total maximum daily load (TMDL) pro- the structure of the proposed list and the criteria pro- grams. The first; titled "Water Quality Control Policy posed for listing decisions. The regulated community for Guidance on Assessing California Surface Waters," identified a number of areas in which the Policy could sets forth the criteria and approach to be used in pre- be improved, but generally supports the approach paring future lists of impaired waters as required un- der CWA section 303(d). The second, "State of Cali- forma SB 469 TMDL Guidance: A Process for Ad- The TMDL Development Guidance outlines the steps dressing Impaired Waters in California" sets out a in the TMDL process and discusses various options framework-for development of TMDLs, from the available to regional boards in developing TMDLs. The project definition to the implementation plan. The document includes several provisions of particular SWRCB is required to develop these policies by SB interest to POTWs, including: 469 (Alpert), legislation sponsored'by the AB 982 Public Advisory Group (PAG): The documents are The guidance recognizes that review and revi- currently being reviewed by the PAG,which is to pro- sion of the water quality standard may be an vide comments to SWRCB staff by September 12,2003• alternative to the development of a TMDL in some cases. SB 469 requires the SWRCB to produce final versions of both documents by January 2004. The guidance identifies equity and cost as key factors in developing wasteload allocations and In the view of the regulated community, the Listing Policywould bring much-needed specificity, load allocations for particular pollutant sources. g p ty, clarity, and scientific rigor to the process of assessing waters The guidance acknowledges the importance of and making-impairment determinations. Among the seasonal factors in TMDL development. highlights of the draft policy: The TMDL guidance is less detailed than the Listing ■ The 303(d) list would consist of those waters Policy, and there are several areas where improve- where a water quality standard is not attained ment is needed. For example, the discussion of alter- due to a pollutant, and remediation of the at- natives to implementing TMDLs via Basin Plan amend- tainment problem requires a TMDL. Waters ments is less than clear, and there is insufficient em- impaired by "pollution" (such as loss of ripar- phasis on stakeholder involvement in the TMDL pro- ian habitat or channel modification), and those cess prior to the load allocation phase. Tri-TAC has where the impairment can be addressed by an established a workgroup to provide input on both alternative enforceable program,would not be documents to the POTW representatives to the PAG. placed on the 303(d) list. The Listing Policy will be released for public-com- ment in September;the regulatory aspects of the TMDL • The Policy would establish minimum data quan- guidance are scheduled for release in October. tity and quality requirements for impairment volume 12,Number 3 2 August 2003 SWRCB PROPOSES SIGNIFICANT SEDIMENT QUALITY OBJECTIVES INCREASES IN CORE REGULATORY WORKGROUP ESTABLISHED PROGRAM FEES The SWRCB has formed an Advisory Group to assist The SWRCB has proposed a revised fee structure de- the-Board in developing sediment qual-ity objectives signed to generate approximately$48 million in rev- (SQOs) for California's enclosed bays and estuaries. enue to support the Board's core regulatory program. Both the establishment of SQOs and the formation of The new fees will replace General Fund revenues re- an advisory committee are required by the Water Code. directed by the Legislature to support other programs.- A lawsuit by environmental plaintiffs resulted in a The proposed fee schedule would impose fees on settlement agreement setting a schedule for adopting POTWs discharging pursuant to NP-DES permits based -the SQOs by February 2007. The SWRCB has already upon permitted flow. Fees for POTWs of less than 99 adopted a workplan, which calls for development of million gallons per day (mgd) would be .capped at both numeric and narrative objectives. The workplan $50,000 per year, plus.a $10,000 pretreatment sur- and schedule are ambitious; if the effort is successful, charge. POTWs with permitted flows of over 100 California will be the first state to develop statewide mgd would pay a fee of$100,000 per year. Fees for SQOs. POTWs discharging_to land .would continue to be - based upon a threat and complexity rating, up to a The SWRCB held an organizational meeting on July maximum annual fee of$38,000. Fees for municipal �9' 2003, to determine the make-up of the Advisory Committee. While the actual composition of the com- and construction stormwater permittees would also increase, and confined animalmittee has not yet been finalized, the group will in- clude representatives of POTWs, industrial discharg- as dairies would be subject to annual fees for the first - ers, ports, municipal stormwater dischargers, federal time. facilities, legacy sources, commercial fisheries, envi- The SWRCB field public workshops-on the proposed ronmental groups, wildlife conservation groups, and fees on.July 28 and August 11. CASA and Tri-TAC public interest groups. The first meeting is set for submitted written comments and presented testimony. October 6, 2003 in Sacramento, aiid one of the Among the points stressed in CASA's comments: committee's first tasks will be to review a "straw man" implementation policy developed for Puget Sound and ■ .The pretreatment surcharge should be assessed provide comments on its usefulness as a starting point per agency rather than per permitted facility. for California. Tom Grovhoug, Larry Walker Associ-. ■ Ambient monitoring costs should not be shifted ates, and Lisa Haney, Los Angeles County Sanitation to the fee payers, and regional boards should Districts will represent POTWs on the Advisory Com- be directed to evaluate compliance monitoring mittee. programs in order to reduce costs to discharg- ANNOUNCEMENT OF PROPOSED SIP ers. - REVISIONS EXPECTED SOON; SWRCB ■ The SWRCB should work with stakeholders to WORKSHOP PLANNED FOR EARLY identify program efficiencies and alternative rev- SEPTEMBER enue sources to ensure that future fee increases are fair and reasonable. The SWRCB staff will present recommendations in September for revisions to the "Policy for Implemen- The recently adopted State budget included the addi- tation of Toxics Standards for Inland Surfaces Waters, tion'of $6.8 million -to the core regulatory program Enclosed Bays and-Estuaries of California" (the "State fees to support ambient monitoring programs. Thus, Implementation Policy"or"SIP.") The SIP;adopted in the fee increases will be even higher than currently 2000, governs NPDES permitting-for toxics, including proposed. The SWRCB plans to adopt emergency the water quality criteria promulgated in the Califor- regulations to implement the new fees, which will be nia Toxics Rule. As permits began to be revised in retroactive to.July 1, 2003. accordance with the SIP, the regulated community identified a number of ways in which application of Volume 12,Number 3 3 ` August 2003 the Policy results in overly stringent and unreason- STAKEHOLDER MEETING ON CSOS/SSOS able permit requirements. The SWRCB, in response HIGHLIGHTS INFORMATION GAPS to concerns, announced last Fall that it would accept On July 8, 2003, the United States Environmental Pro- we public comment on revisions to the SIP. Comments tection Agency ("U.S. EPA") held a public meting to re due in December 2002, and since that time, discuss the 2003 Report to Congress on the Impacts SWRCB staff has been compiling and reviewing the many comments received, and preparing a "short list" and Control of Combined Sewer Overflows (CSOs) of proposed amendments to the Policy. and Sanitary Sewer Overflows (SSOs). U-.S.EPA staff gave presentations on the characteristics of CSOs and As of this writing, the SWRCB had tentatively sched- SSOs and discussed the environmental and .health uled a workshop to,discuss the proposed revisions as impacts of sewer overflows. The POTW representa- part of its regularly scheduled monthly workshop on tives attending the workshop were very concerned September 2 and 3, 2003. At the.workshop, staff will about the accuracy and reliability of the .information present its recommendations for changes and inter- presented, and agreed that much of.what U.S. EPA ested.parties will have an opportunity to provide com- presented would be misleading if included in the Be- ment. CASA and Tri-TAC submitted detailed com- port to Congress. ments to the SWRCB, which raised a number of sig-. nificant issues with the SIP, including the need to re- lighting the In response,Tri-TAC prepared a letter to U.S.EPA-high- vise the process for determining whether a-discharge flaays in the Agency's approach and rec has the "reasonable potential" to cause or contribute oFending a number of changes to the Report. In to an exceedance of a water quality objective, the Particular, Tri-TAC urged U.S. EPA to separate .data procedure for calculating effluent limitations, and the and information about CSOs-98 percent of which compliance schedule provisions. While.the SWRCB are_in the eastern portion of the country—from data has'yet to release its proposed list of changes, it is and information about SSOs. SSOs are less than one doubtful that the SWRCB-will undertake the type of Percent of the total pollutant load identified by U.S. major overhaul of the Policy advocated by CASA and EPA. Yet, U.S. EPA has grouped CSO and SSO irifor- mation together, resulting in the unsubstantiated con- Tri-TAC. clusion, that "on a local scale pollutant loads from In a related development, Phase II of the SIP was to CSOs and SSOs can be significant." Tri-TAC pointed-- include adoption of a Policy to address discharges to out that this conclusion is only supported if CSO and effluent-dependent waters (EDWs). The SWRCB be- SSO data are combined. If they are separated, Tri- gan the process in 20.01, accepting public comment TAC noted that a more appropriate conclusion would on what an EDW policy should include, but there has be that "SSOs alone may,or may not have significant been little progress to date. Recently, the SWRCB pollutant loads, dependent upon local water quality staff indicated an interest in working with CASA to conditions and beneficial uses." explore potential approaches to addressing EDW is- sues, particularly if POTWs were willing to assist in Tri-TAC also noted that U.S. EPA overstated the state funding the necessary tasks. A meeting with SWRCB of the science on human health impacts from CSOs staff to discuss options for moving the process for- and SSOs. Only very limited data is available to posit ward is planned for late August. any sort of linkage between CSOs or SSOs with-hu- man health impacts. Nonetheless, one of the conclu- sions presented was that"pathogens and pollutants in CSOs and SSOs have human health impacts." Tri-TAC urged U.S. EPA to be very clear in its Report to Con- gress about what is known and what is not known about the health and environmental impacts of CSOs _ and SSOs. - Volume 12,Number 3 4 August 2003 TECHNICAL ISSUE FORUM CHAIRS: Alexander R. Coatejast Bay Municipal Utility District - Chair, Air Issues Porum Ed McCormick, East Bay Municipal Utility District Chair, Land Issues Forum James Kelly, Central Contra Costa Sanitary District Chair, Water Issues Forum CASA STAFF: Michael F. Dillon Executive Director and Lobbyist .Roberta L. Larson Director of Legal and Regulatory Affairs Eric Sapirstein r� Federal Legislative Advocate Marlaigne Hudnall Biosolids Program Manager a" Christina Dillon Lobbyist , Debbie Welch Conference Coordinator Valerie Darby visit CASA on the zveb. Legislative Clerk www.casaweb.org I ' California Association of Sanitation Agencies 925 L Street, Suite 1400 Sacramento, California 95814 I - dater Environment Federatime �smr t&Enbancing theGlobal water Ent* ment Water Environment Federation Presents CONTROL OF FATS, OILS, & GREASE (FOG) ADVANCED TRAINING COURSE September 30 & October 15 2003 Doubletree Hotel Bellevue, Washington Supported in cooperative agreement by US Environmental Protection Agency—Office of Water A ADVANCED FOG CONTROL TRAINING COURSE MODULES Introduction/Overview Design Issues • Assuring effective grease Marketing of Your Grease Control trap/interceptor design Program Sample collection • Convincing your administration and Alternative Methods: Generation and stakeholders that they need an Oil & Interception Grease Control Program Operation & Maintenance Issues Permits 0 Grease trap and interceptor MOM • Identifying and classifying sources 0 Ensuring the use of reputable waste • Developing a permitting process haulers • Confirming that FOG wastes are Legal Authority properly disposed of • Writing good sewer use ordinances 0 Lateral cleaning issues — Who's and grease control regulations responsible for the grease? • Sample ordinances from several 0 Vapor hood cleaning successful programs Additives Enforcement Pros/Cons Violation recognition + Case studies • Enforcement response guide Research Report • Enforcement documents • Fines & penalties Grease Control Program Record- keepingllnformation Management Oil & Grease Management • Integrating Oil & Grease Program • Identifying grease creators information into Collection Systems • Pollution prevention databases/information systems • Permitting and inspection Tracking the effectiveness of your Disposal and containment FOG Control Program Effective Inspection Training Success Stories • Reviewing current regulations Additional Resources for Implementing • Inspection techniques Grease Control Programs • Gathering Facility Operational Data • Completing Inspection Forms Summary • Conducting follow-up - communicating inspection concerns and recommendations FOG COURSE REGISTRATION FORM Bellevue, WA— September 30 & October 1, 2003 ; Registration Instructions Please send me WEF membership information Complete the registration form below. Payment must accompany registration forms. (Photocopies of checks are not acceptable.) Make checks payable to Water Environment Federation. Approved US government purchase orders must accompany the registration form. Government purchase orders are not accepted on-site. To Register By Fax: (credit card & government purchase orders only) 1-703-684-2471 By Phone (credit card payments only) 1-800-666-0206 (select menu option#2) (Outside the United States or Canada) 1-703-684-2452 By Mail (Check, credit card, Government Purchase Order)to: Registration Coordinator Water Environment Federation 601 Wythe Street Alexandria, VA 22314-1994 PLEASE CHECK ONE WEF Member ID# (For member rate.) Bellevue Before September 15, 2003 ❑ Member $236 ❑Nonmember$330 F2-03 On or After September 15, 2003 ❑ Member $262 ❑Nonmember$356 Important Note: Your registration form must be received via telephone, fax or mail at WEF no later than close of business on September 22, 2003 or you will need to register onsite. Last Name First Name Organization Address Telephone Fax Email Total Payment(must accompany form) Method of Payment: ❑ Government PO (Po) PO No. ❑ Company Check (C) Check No. Personal Check (P) Check No. AMEX ❑ Master Card ❑ VISA Credit Card Number Expiration Date Signature I authorize WEF to charge my credit card for the amount listed above. Winter/Spring Southern California Compass The Southern California Compass ,.may team will take the results of the Nation's Largest and Most workshops and use them to Ambitious Visioning Program create several regional draft { i growth scenarios. These 'f For decades, Southern California scenarios will be widely released has experienced some of the most to the general public allowing dramatic growth seen anywhere in them to choose their "preferred the world. The collective population vision" via mail-in and electronic ---" now surpasses 17 million and is mail ballots. In the end this projected to increase by another process will deliver a "Preferred Com ass six million people by 2030. Our Regional Growth Vision" leading growing families will account for to an Implementation Strategy p two-thirds of that growth. and Final Report. Integrated into - Accommodating this growth and SCAG's Regional Transportation Charting the course for change while protecting what we Plan, the vision will set the a sustainable southland value is a top priority. course of all other planning efforts. Under the Southern California Compass is the dynamic planning process that will In the Hands of Experts Compass program, set in motion a guide for the regions future. The two-year To lead Southern California Southern program, which kicked off in Compass, SCAG selected the January, was initiated by SCAG. It team of Fregonese Calthorpe California is an orqanized forum for public, Associates (FICA). FICA has been private, educational and nonprofit at the forefront of some of the residents will be groups from six counties to craft a most successful growth visioning able to offer their a -slg e common vision nd processes in the nation, achieving % reaches across political boundaries successful results for opinions and ideas -Fo—aUffress Qualitv of life issues for communities such as Portland, region: air quality open space, Salt Lake City, Denver and on long-range transportation, housing and jobs. Chicago. They are the pioneers in planning scenarios the evolving technical and public p g The Process involvement techniques used to engage thousands of people in via the Internet Southern California Compass is envisioning the future. Their work Public Workshops utilizing some 20 public workshops here has just begun. spread throughout the region in and Community which participants work hands-on For more information contact: to distribute homes and jobs across Mark Buta a: 213.236.1945 Forums. the region, decide where new roads butala@scag.ca.gov and transit lines should be, and set aside areas that should be Or visit this Web site: preserved as parks. wm.socaI compass.org SOUTHERN CALIFORNIA 77` ReS01V1fl9 Regional ASSOCIATION of GOVERNMENTS 818 West 7th St., 12th Floor, Los Angeles, CA 90017-3435 213-236-1800 SOUTHERN EALIFORN IA SALINITY ■ ■ socal sdiinlIq News Codlifion McMefs Coalition President Testifies at (Aeguas:Municipal Water District Colorado River Salinity Control Forum Central and West Basin Municipal Water Districts ICHARD ATWATER of the Inland Empire Utilities Agency, ■ Establishing source control Los Angeles the President of the Southern California Salinity Coalition, salinity measures to reduce Department of Inc.,testified at the Colorado River Salinity Control Forum the concentration of imported Water g Power about the goals and objectives of the Coalition. supplies,which include water One of the Coalition's focal points is the need to control the from the Colorado River and Wand Empire salinity concentrations of the Colorado River,which provides California State Water Project Utilities Agency nearly 30-million people with water.Salts dissolved in Colorado ■ Controlling the local sources [!vine Ranch River water cause over$300 million in damages each year. of salt, including the regu- " Water District action of water softeners. ■ Constructing brine sewers to Richard IV Atwater. Metropolitan C.lie Snittltern Cali aritia Salhtitt Coalition, Jun, coalition President f ✓ export salts within the water- Water District was established itt 2002 wit/r the rimarr ub ectivc of Southern California p ✓ I sheds of SouthernCalifornia to the Pacific Ocean. if determitrrrrg the best available approaches ■ Desalinating wastewater and brackish groundwater to Mojave Water Agency to managitrg and redimiq saluritll bt Svntliern California allow the reuse and recycling of salinity-impaired local Orange County supplies and to reduce our dependence on water supplies Sanitation District from the Colorado River and California State Water Project. The Coalition also strongly supports the efforts of the Salinity is considered the most under-recognized water- Orange County Metropolitan Water District of Southern California in imple- quality problem in the United States today. The Southern Water District menting the action plan included its Salinity Management Califomia Salinity Coalition. however is actively seeking a San Diego Studv.These include: means to remedy it. Water Authority Sanitation Districts of Los Angeles County Salinity Coalition's First Project Is Under Way Santa Ana River IX MONTHS AGO, the Salinity preferences regarding the use of water ■ An incentive program (funded by the Watershed Project Autorn Coalition began funding the "Water softening devices,including: State Department of Water Resources). Softener Pilot Program,"a project that ■ Focus group sessions. The results of the focus group sessions Water is assessing customer behavior towards ■ Focus group multiple questionnaires. showed four distinct trends: Replenishment District different types of incentive programs to ■ Large-scale general survey. of Southern California ■ There was a significant amount of help mitigate salinity issues that are misinformation or lack of information ion urih A caused by the use of water softeners in SO I r d n d Pepper Issues about the effects of water softeners on National Water residential households. The Principal There's a reason why blood tastes salnv. wastewater treatment. Research Institute Investigators of thisproject are David S. Human blood contains about 0.9 percent ■ Participants without water softeners Kung and Kim Might,both of Claremont sodium chloride(othetwise known as salt). IMMt5AMtk 'oral's about 9,000 parts per million—or want to "regulate" change-out of P.O.BOX M� Graduate University in California. about nine fines the maximum salinity softeners as a primary solution to the Fountain%Wley,Califomia 9272& 1 level set by state regulators of drinking water. Their study included four major problem. (714)378.3278■ Fax:('l4)378-33" SourreWM)Cr hWAmq,1une2002. Fn ail:SoUSalinitywNWRl-IBC M components used to evaluate consumer Please see FIRST PROJECT on reverse side ■ IJ T HER N E • L I FOR • S A LIN I TY ED A L IT I ■ i Coalition Not Alone in Fighting Salinity ROUND THE NATION,water industry coalitions pants include the WateReuse Foundation, concentrate disposal.The Coalition was established and other groups supporting salinity control American Water Works Association Research 3 years ago by a group of water utilities and districts and desalination-related initiatives are joining Foundation, Water Environment Research on the west coast. Its participants now include the forces to advance the nation's capacity to provide safe, Foundation,National Water Research Institute,and El Paso Water Utility, Southern Nevada Water adequate,and affordable water supplies to current United States Department of the Interior,Bureau of Authority, the Cities of Phoenix, Scottsdale, and and future generations. Reclamation. 'ILcson, the Salt River Project, Metropolitan The Southern California Salinity Coalition is United States Desalination Coalition Domestic Water Improvement District (Arizona), only one among several groups dedicated to Metropolitan Water District of Southern California, managing salinit};including: Based in Washington, DC, the United States and SG Johns Water Management District(Florida). Desalination Coalition is a non-profit trade associa- Colorado River Salinity Control Forum don that consists mostly of public water agencies • The Colorado River Basin Salinity Control interested in pursuing federal assistance for the In April 2003,these four groups worked together Forum was formed by the basin states in 1973 to planning, design, construction, operation, and with the Southern California Salinity Coalition to develop water quality standards for salinity in the maintenance of seawater desalination projects. prepare a collaborative declaration to preserve and Colorado River (which, at present,provides water Members include the Los Angeles Department of enhance our water supplies through desalination,a for nearly 30-million people).Participants include Water and Power, Municipal Water District of membrane treatment process that removes salts elected representatives from the states of Arizona, Orange County, Metropolitan Water District of and other dissolved substances from water. California, Colorado, Nevada, New Mexico, Utah, Southern California, San Diego County Water The declaration listed the following benefits of and Wyoming, as well as the Natural Resources Authority,West Basin Municipal Water District,and salt removal: Conservation Services and Bureau of Land Manage- American Water Western Region. The Coalition is From seawater: Desalination creates new ment of the United States Department of the currently seeking membership from other states. potable supplies for coastal areas that have reached Interior,Bureau of Reclamation. Multi-State Salinity Coalition the limits of local and imported supplies. Joint Water Reuse Task Force The goal of the Multi-State Salinity Coalition is From brackish groundwater reserves: Established in 2000,the Joint Water Reuse Task to enhance the sustainability and quality of water Desalination provides supplemental supplies to Force is a cooperative partnership between the resources through the removal of salinity. To do serve growing inland regions with limited local nation's foremost organizations to advance the this, it actively supports research in technologies freshwater supplies. science and technology of water recycling.Partici- that can be used for cost-effective desalting and From other high-salinity source waters: Desalination prevents the further degradation of First Project Looks at Water Softeners soils and aquifers, avoids millions of dollars per year in unnecessary costs to the industry and Continued from reverse side consumers, and allows the United States to meet ■ Participants with softening devices were willing to consider changing or modifying their continued treaty obligations with Mexico. use of the appliance with appropriate justifications and adequate monetaryincentives. In addition, the declaration suggested the following actions to meet challenges to desalt- ■ Water districts were trusted by focus group nation: attendees as sources of accurate Salt through H i s t o r u ■ Engage our leaders, stakeholders, and public information about water quality issues. through desalination education and outreach. A subsequent study of focus group Among ancient China's sophisticated technology (300-400 A.D.)was the process of drilling bamboo ' Eland research to control salinity,desalt wafer, participants showed significant changes in P g their attitudes toward water softeners pipes to depths of 3,000 feet to bring salt brines to and manage concentrate (the waste from the the surface.oil traces found in the same wells led to desalination process). throughout the session and afterwards as the same use of this technology in modem oil ■ Provide incentives to promote the expansion of they became more aware of the issues. production,though the modem use of oil was only water production capacity through desalination. Nearly three-quarters the attendees who discovered much later,and ushered in the period of ■ Establish regulatory reforms to distinguish had water softeners desired an incentive to the industrial Revolution. between the concentrate waste product and hazar- change their system.Only 7 percent refused Source:hP://WLor&iVnem_amh.hUn dous waste (desalination is impeded when to change their present stem. concentrate is categorized as a hazardous waste). AGENDA BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT DISTRICT'S ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CA 92708 REGULAR MEETING August 27, 2003 — 7:00 P.M. 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 hours prior to the meeting date and time above. All written materials relating 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. J 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 tem. 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). 08/27/03 Page 2 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 7. If no corrections or amendments are made, the minutes for the regular meeting held on July 23, 2003 will be deemed approved as mailed and be so ordered by the Chair. 8. Ratifying payment of claims of the District, by roll call vote, as follows.- ALL DISTRICTS 07/15/03 07/31/03 Totals $10,788,874.88 $22,282,392.64 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: a. Approve the five-year lease agreement, beginning August 2003, with Carl Karcher Enterprises, Inc (CKE)., a California Corporation, to allow paving, 08/27/03 Page 3 striping, parking, and related improvements by CKE within District's 4-foot wide utility corridor located at 21532 South Brookhurst Street, Huntington Beach. b. (1) Approve Amendment No. 2 to the Letter Agreement dated September 22, 1999, with Municipal Water District of Orange County for a multi-agency Water Use Efficiency Program, removing Orange County Water District as a funding partner, in a form approved by General Counsel; and, (2) Authorize an increase in the District annual funding of$788,858 for year five of the program, increasing the annual amount for year five to $1,655,108, with no change to the total project amount of$4,275,863. C. Adopt Resolution No. OCSD 03-19, Authorizing a Property Tax Exchange between Orange County Sanitation District and Orange County Vector Control District (OCVCD), for two Tax Rate Areas that were inadvertently excluded from the original annexation of the City of Fullerton into the OCVCD in the 1970s. d. (1) Approve the Orange County Sanitation District's participation in the Lower Santa Ana River Watershed study as the local non-Federal project sponsor; and, (2) Authorize the General Manager to execute an agreement with the Department of the Army (U.S. Army Corps of Engineers) for an amount not to exceed $6,800,000 with the Department of the Army (U.S. Army Corps of Engineers) and the District paying equal shares of$3,400,000, and in a form approved by General Counsel with the District's obligation being met through ongoing permit-required ocean monitoring and past Huntington Beach Shoreline Contamination Investigation, Phase III expenditures. 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 July 23, 2003 to be filed. Non-Consent Calendar b. Review and consideration of agenda items considered by the Steering Committee re the August 27, 2003 meeting. C. Consideration of items deleted from Steering Committee Consent Calendar, if any. 08/27/03 Page 4 d 12, PLANNING, DESIGN AND CONSTRUCTION COMMITTEE (PDC) PDC Consent Calendar a. Order draft Planning, Design and Construction Committee Minutes for the meeting held on June 5, 2003 to be filed. b. Ratify Change Order No. 8 to Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37, with Margate Construction, authorizing an addition of$5,363, increasing the total contract amount to $70,954,641. C. Approve Addendum No. 5 to the Professional Services Agreement with Black & Veatch Corporation for Facilities Modifications for Odor Control, Job No. J-71-3, providing for modifications to the Scope of Work for an additional amount of $41,005, increasing the total amount not to exceed $613,873 d. (1) Approve a budget amendment of $180,000 for the Trunk Sewer Mapping Project, Contract No. 1-98, for a total project budget of$2,193,000; and, (2) Approve Addendum No. 3 to the Professional Services Agreement with Brown and Caldwell for the Trunk Sewer Mapping Project, Contract No. 1-98, providing for additional services for an additional amount of $361,824, increasing the total amount not to exceed $1,715,215. e. (1) Approve an increase for the City of La Habra Cooperative Projects, Contract No. CP-0106, in the amount of$13,600, for a revised contract amount of $107,350, and Contract No. CP-0108, in the amount of S60,000, for a revised contract amount not to exceed $100,000, increasing the total approved contracts under the Cooperative Projects Program from $17,394,388 to $17,467,988; (2) Approve time extensions of 18 months to Cooperative Projects Program contracts as follows: Brea (CP-0101), Cypress (CP-0001, CP-0103, and CP-0123), Fountain Valley (CP-0002 and CP-0104), Garden Grove (CP-0003 and CP-0119), La Habra (CP-0106, CP-0126 and CP-0127), Midway City SD (CP-0128), Orange (CP-0011), Santa Ana (CP-0016), Seal Beach (CP-0110) and Villa Park (CP-0113 and CP-0114); and, (3) Approve a revision of the Cooperative Projects Program amendment template language to increase time extensions from 6 months to 18 months. f. Approve Addendum No. 5 to the Professional Services Agreement with SPEC Services, Inc. for Standby Power and Reliability Improvements to Treatment Plant Nos. 1 and 2, Job No. J-33-1, providing for additional engineering services for an additional amount of $214,500, increasing the total amount not to exceed $2,983,763. g. Approve an amount of $30,000 for reimbursing the Santa Ana Watershed Project Authority for the preparation of an Emergency Response Plan to comply with the Regional Water Quality Control Board tentative Cease and Desist Order. 08/27/03 Page 5 PDC Non-Consent Calendar h. Approve Addendum No. 2 to the Professional Services Agreement with CH2M Hill, Inc., for additional engineering services for Long Range Biosolids Management Plan, Job No. J-40-7, for an additional amount of$785,079.78, increasing the total amount not to exceed $1,433,934.95 13. 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 Treasurer's Report for the month of June 2003. C. Adopt Resolution No. OCSD 03-20, Amending Resolution No. OCSD 98-33, Amending Human Resources and Policies Procedures Manual. d. Receive and file the Quarterly Investment Management Program Report for the period April 1, 2003 through June 30, 2003. e. Approve an Interest Rate Exchange Agreement Policy relating to long-term debt financing. f. Approve a Revised Debt Policy relating to short- and long-term borrowing by the District, providing for the limitation on debt issuance be restricted to all capital improvements that cannot be financed from current revenue. FAHR Non-Consent Calendar g. Consideration of items deleted from FAHR Consent Calendar, if any. 14. JOINT GROUNDWATER REPLENISHMENT SYSTEM COOPERATIVE COMMITTEE (JCC) JCC Consent Calendar a. Order Joint Groundwater Replenishment System Cooperative Committee Minutes for the meeting held on July 14, 2003 to be filed. b. Authorize award of a construction contract by the Orange County Water District (OCWD) to Ken Thompson, Inc., for construction of Groundwater Replenishment System (GWRS) Unit III Pipeline Project., Contract No. GWRS-2003-2, for an amount not to exceed $16,989,000, with OCWD and Orange County Sanitation District paying equal shares of $8,494,500. 08/27/03 Page 6 JCC Non-Consent Calendar C. Consideration of items deleted from JCC Consent Calendar, if any. 15. (1) Approve plans and specifications for Gas Compressor Building Upgrades at Plant No. 2, Job No. P2-79-1 (Rebid), on file at the office of the Board Secretary; (2) Approve Addendum No. 1 to the plans and specifications; (3) Receive and file bid tabulation and recommendation; and (4) Award a Construction Contract to Adams/Mallory Construction Company, Inc., for Gas Compressor Building Upgrades at Plant No. 2, Job No. P2-79-1 (Rebid), for an amount not to exceed $463,941. 16. CLOSED SESSION: During the course of conducting the business set forth on this agenda as a regular 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, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employment actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Board during a permitted closed session and are not available for public inspection. At such time as the Board takes final 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 Lisa Tomko, Human Resources Director, re International Union of Operating Engineers, Local 501 (Government Code Section 54957.6). 2. Confer with Lisa Tomko, Human Resources Director, re Unrepresented Groups' compensation and benefits (Government Code Section 54957.6). b. Reconvene in regular session C. Consideration of action, if any, on matters considered in closed session 17. Matters which a Director may wish to place on a future agenda for action and staff report. 18. Other business and communications or supplemental agenda items, if any 08/27/03 Page 7 19. Future Meeting Date: The next Board of Directors regular meeting is scheduled for September 24, 2003, at 7:00 p.m. 20. Adjournments ........................................................................................................................................................................................................................................................................................ :NOTICE TO DIRECTORS: To place items on the agenda for the Regular Meeting of the Board of :Directors, items shall be submitted to the Board Secretary no later than the close of business 14 days :preceding the Board meeting. The Board Secretary shall include on the agenda all items submitted by :Directors, the General Manager and General Counsel and all formal communications. General Manager Blake Anderson (714) 593-7110 banderson a(�.ocsd.com Board Secretary Penny Kyle (714)593-7130 pkyle(cDocsd.com Director/Engineering David Ludwin (714) 593-7300 dludwin ocsd.com Director/Finance/Treasurer Gary Streed (714) 593-7550 gstreed(a)ocsd.com :Director/Human Resources Lisa Tomko (714) 593-7145 Itomko a)ocsd.com :Director/Information Technology Patrick Miles (714) 593-7280 pmilesCa�ocsd.com :Director/Operations& Maintenance Bob Ooten (714)593-7020 rootenCcDocsd.com :Director/Technical Services Bob Ghirelli (714) 593-7400 rhirelli@ocsd.com ?Administrative Services Mgr. Greg Mathews (714) 593-7104 gmathews a(�.ocsd.com :Communications Services Mgr. Carol Beekman (714)593-7120 cbeekman(a�ocsd.com :General Counsel Thomas L. Woodruff (714)564-2605 tlwaawss-law.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\agenda\Board Agendas\2003 Board Agendas\082703 agenda.doc !S� A �' 11 Orange County Sanitation District MINUTES BOARD MEETING J U LY 239 2003 SANlT,gTl� Q r O --1 ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708-7018 O ' Minutes for Board Meeting ti Page 2 07/23/03 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was held on July 23, 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 A Shirley McCracken, Chair Bob Hernandez X Steve Anderson, Vice Chair Steve Simonian X Don Bankhead Leland Wilson X Brian Brady Peer A. Swan X Patricia Campbell Paul Yost A Carolyn Cavecche Steve Ambriz X Alberta Christy Mike Garcia X John Collins Larry Crandall X Debbie Cook Connie Boardman Bill Dalton X Bruce Broadwater X Brian Donahue David Shawver X Michael Duvall Keri Lynn Wilson Norman Z. Eckenrode X 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 Anna L. Piercy X Tim Keenan A 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; Dave Ludwin; Patrick Miles; Bob Ooten; Gary Streed; Lisa Tomko; Ingrid Hellebrand;Jeff Reed; Lisa Arosteguy; Mark Kawamoto OTHERS PRESENT:Thomas L. Woodruff, General Counsel; Don Hughes; Randy Fuhrman; Bill Knopf; Darrell A. Nolta; C. Jones; Ken Ovrey Minutes for Board Meeting Page 3 r 07/23/03 3. MOVED, SECONDED AND DULY CARRIED: Receive and file minute excerpts from the following re appointment of active and alternate Directors, as follows: City/Agency Active Director Alternate Director Seal Beach Patricia Campbell Paul Yost Irvine Ranch Water District Brian Brady Peer A. Swan PUBLIC COMMENTS There were no public comments. REPORT OF THE CHAIR Vice Chair Steve Anderson noted that Chair Shirley McCracken's husband, Paul, had passed away earlier in the day, and the meeting would be held and adjourned in Paul McCracken's memory. Director Brian Brady and the Irvine Ranch Water District were thanked for hosting a tour of the San Joaquin Wetlands Natural Treatment Reserve on Tuesday, July 22"d, which depicts an alternative urban runoff treatment process. Ingrid Hellebrand of the Communications Division was then recognized and presented with a proclamation from the City of La Habra for her participation in the La Habra Children's Museum Annual Art Festival and her help in educating the community on pollution prevention and urban runoff issues. The committee meeting calendar was then reviewed for the month of August. It was noted that the Planning, Design and Construction Committee was scheduled to meet on August 7, and the Finance, Administration and Human Resources Committee would be meeting on August 13. REPORT OF THE GENERAL MANAGER General Manager Blake Anderson referred the Directors to the FOG Report included in their meeting folders on disk, as well as the monthly level of treatment report. Bob Ooten, Director of Operations and Maintenance, then provided a brief explanation of the District's central generation system which converts digester gas into energy, thereby saving the District approximately$6.4 million per year on electricity to run the two treatment plants. The process also reduces air pollutants and improves plant reliability. Minutes for Board Meeting �v Page 4 07/23/03 REPORT OF THE GENERAL COUNSEL General Counsel Thomas L. Woodruff reported that Agenda Item 14(e) would be moved to the non- consent calendar for discussion. He also stated that Agenda Items 21(a)(2) and (6) were being removed from the agenda. APPROVAL OF MINUTES The Chair ordered that the minutes of the regular meeting held June 25, 2003, and the adjourned regular meeting held July 2, 2003, be deemed approved, as written. Directors Tim Keenan and Constance Underhill abstained. 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 06/15/03 06/30/03 Totals $11,313,496.37 $7,004,259.16 Director Anderson abstained from discussion and voting on Warrant No. 53457; Director Collins abstained from discussion and voting on Warrant No. 53565; Director Donahue abstained from discussion and voting on Warrant No. 53378; and Director Keenan abstained from discussion and voting on Warrant Nos. 53526 and 53678. Abstentions were pursuant to California Government Code Section 84308. CONSENT CALENDAR 9. a. MOVED, SECONDED AND DULY CARRIED: (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. MOVED, SECONDED AND DULY CARRIED: (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). Minutes for Board Meeting Page 5 07/23/03 NON-CONSENT CALENDAR 11. DRAFT STEERING COMMITTEE MINUTES: A verbal report was presented by Director Anderson, Vice Chair of the Steering Committee, re the July 23, 2003 meeting. He stated that General Manager Blake Anderson reported on the activities of the Legislative Advocacy Ad Hoc Committee: federal funding support for secondary treatment; AB 1427, Biosolids; AB 496, Santa Ana River Conservancy; and ACA 10, Stormwater Fee Exemption from 218 Requirements. The Steering Committee directed staff to schedule a joint workshop on the Groundwater .Replenishment System project with Orange County Water District Directors to be held in the fall. The General Manager was also authorized to approve an addendum to the funding agreement for the US Bureau of Reclamation Southern California Water Recycling Projects Initiatives. The Vice Chair then ordered the Steering Committee Minutes for the meeting held on June 25, 2003 to be filed. 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. MOVED, SECONDED AND DULY CARRIED: Receive and file Draft Long Term Biosolids Master Plan, Job No. J-40-7, dated June 2003, prepared by CH2M Hill, Inc. C. MOVED, SECONDED AND DULY CARRIED: (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. Minutes for Board Meeting Page 6 07/23/03 13. PLANNING, DESIGN AND CONSTRUCTION COMMITTEE PDC Consent Calendar a. There was no meeting held in July, 2003. PDC Non-Consent Calendar b. MOVED, SECONDED AND DULY CARRIED: Approve Sewer Service Transfer Agreement for Irvine Business Complex/Tustin Marine Corps Air Facility, with Irvine Ranch Water District, in a form approved by General Counsel. Director Brian Brady abstained. 14. FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MOVED, SECONDED AND DULY CARRIED: To move Items 14(e) and (f)to the non- consent calendar for discussion. Consent Calendar a. MOVED, SECONDED AND DULY CARRIED: Order draft Finance, Administration and Human Resources Committee Minutes for the meeting held on July 9, 2003 to be filed. b. MOVED, SECONDED AND DULY CARRIED: Receive and file Treasurer's Report for the month of June 2003. C. MOVED, SECONDED AND DULY CARRIED: Receive and file staff report re placement of FY 2003-04 Excess Workers' Compensation and General Liability Insurance Renewals. d. MOVED, SECONDED AND DULY CARRIED: 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. Non-Consent Calendar e. MOVED, SECONDED AND DULY CARRIED: 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 Minutes for Board Meeting Page 7 07/23/03 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. MOVED, SECONDED AND DULY CARRIED: 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 Repealing Resolution No. OCSD 02-13. 15. JOINT GROUNDWATER REPLENISHMENT SYSTEM COOPERATIVE COMMITTEE (JCC) Vice Chair Steve Anderson gave a brief verbal report on the items approved at the meeting held on July 14, 2003, and the groundbreaking ceremony for the initial microfiltration facility. JCC Consent Calendar a. MOVED, SECONDED AND DULY CARRIED: Order Joint Groundwater Replenishment System Cooperative Committee Minutes for the meetings held on May 12, 2003 and June 9, 2003 to be filed. 16. MOVED, SECONDED AND DULY CARRIED: (1) Approve plans and specifications, and Addendum Nos. 1 and 2,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. The Chair declared a recess of the Board of Directors, Orange County Sanitation District, at 7:43 p.m. Minutes for Board Meeting 0 Page 8 07/23/03 ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District Financing Corporation (OCSDFC) was called to order on July 23, 2003, at 7:43 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 A Shirley McCracken, Chair Bob Hernandez X Steve Anderson, Vice Chair Steve Simonian X Don Bankhead Leland Wilson X Brian Brady Peer A. Swan X Patricia Campbell Paul Yost A Carolyn Cavecche Steve Ambriz X Alberta Christy Mike Garcia X John Collins Larry Crandall X Debbie Cook Connie Boardman Bill Dalton X Bruce Broadwater X Brian Donahue David Shawver X Michael Duvall Keri Lynn Wilson Norman Z. Eckenrode X Constance Underhill X James M. Ferryman Arlene Schafer X Alice B. Jempsa Marilynn M. Poe A 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 Anna L. Piercy X Tim Keenan A 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; Dave Ludwin; Patrick Miles; Bob Ooten; Gary Streed; Lisa Tomko OTHERS PRESENT: Thomas L. Woodruff, General Counsel; Don Hughes; Randy Fuhrman; Bill Knopf; Darrell A. Nolta; C. Jones; Ken Ovrey Minutes for Board Meeting Page 9 07/23/03 APPROVAL OF MINUTES The Vice Chair ordered that the minutes of the regular meeting held June 26, 2002, be deemed approved, as written. By a showing of hands, the Board Secretary noted nine Directors abstained. REPORT OF THE DIRECTOR OF FINANCE Gary Streed reported that the Financing Corporation Board is required to meet annually. The corporation is needed to allow staff to issue certificates of participation. It was reported that no new debt or certificates of participation were issued during the past year, and all payments were made on time by Orange County Sanitation District. Adoption of a resolution would formalize the final action to complete the issuance of$280 million of fixed rate certfficates of participation. Competitive bids will be taken on August 12th, and funding will take place on August 26"'. MOVED, SECONDED AND DULY CARRIED: 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. ADJOURNMENT: The Vice Chair declared the meeting of the Orange County Sanitation District Financing Corporation adjourned at 7:50 p.m. RECONVENE: The Vice Chair of the Board of Directors of Orange County Sanitation District reconvened the meeting at 7:50 p.m. 21. CONVENE IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54956.8, 54957.6 AND 54956.9:The Board convened in closed session at 7:50 p.m., pursuant to Government Code Sections 54956.8, 54957.6 and 54956.9 to discuss Agenda Item Nos. 21(a) (1), (3), (4), and (5). Agenda Item Nos. 21(a)(2) and (6) were removed from the agenda. Confidential Minutes of the Closed Session held by the Board of Directors 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. A report of action taken will be publicly reported at the time the approved action becomes final re Agenda Item Nos. 21(a)(1), (3), (4) and (5). Director Tim Keenan left the room during the consideration of Agenda Item No. 21(a)(1). Minutes for Board Meeting Page 10 07/23/03 RECONVENE IN REGULAR SESSION: At 8:31 p.m., the Board reconvened in regular session. The Board Vice Chair and General Counsel reported that during closed session re: Agenda Item No. 21(a)(1), the Board referred the matter of receipt of bids and award of Contract Nos. 6-13-1 and 7-23-1 to the Planning, Design &Construction Committee, and delegated to the Committee the full authority to make final decisions on the award of the Contracts. ADJOURNMENT: The Vice Chair declared the meeting adjourned at 8:31 p.m., in the memory of Paul McCracken, husband of Chair Shirley McCracken. Secretary of t Board of Dire rs of Orange Coun Sanitation Di tract Claims Paid From 06/01/03 to 06/15/03 Warrant No. Vendor Amount Description Accounts Payable-Warrants 53306 Air Products&Chemicals $ 25,758.02 O&M Agreement Oxy Gen Sys MO 8-8-89 53307 Aquatic Bioassay And Consulting Labs, Inc. 36,239.48 Toxicity Testing 53308 Basic Chemical Solutions 35,819.91 Sodium Bisulfite 53309 Black&Veatch Corporation 40,118.78 Engineering Services P1-76 53310 Brown&Caldwell 196,757.71 Engineering Services 2-41 &P1-37 53311 Carollo Engineers 618,806.70 Professional Services P1-60,P2-60, P2-66&Microfiltration Demo. Project 53312 Coral Energy Resources,L.P. 56,619.33 Natural Gas 53313 County of Orange-Auditor Controller 25,000.00 Construction-Removal of 21"Sewerline for Construction Access 53314 General Petroleum 28,192.52 Unleaded Gasoline, Lubricants&Oil 53315 Kaiser Foundation Health Plan 42,229.38 Medical Insurance Premium 53316 Kemiron Pacific,Inc. 80,264.09 Ferric Chloride MO 9-27-95 53317 Orange County Water District 1,175,474.11 GAP Water Use&GWRS Joint Project 53318 Pacific Blue Micro 47,710.00 Software&Maintenance Agreement-Cisco Smart Net 53319 Parsons Engineering Science, Inc. 183,173.54 Engineering Services J-35-1 53320 Pioneer Americas, Inc. 213,185.34 Sodium Hypochlorite 53321 Sancon Engineering,Inc. 33,805.50 Construction-Sewer Repairs&Manhole Rehabilitation at Various Locations 53322 Skalar,Inc. 37,093.64 Lab Instruments, Parts&Supplies 53323 Southern California Edison 70,259.96 Power 53324 Synagro Composting 51,353.16 Residuals Removal MO 3-29-95 53325 Tule Ranch 185,442.04 Residuals Removal MO 3-29-95 53326 U.S.Peroxide 109,445.18 Professional Services-Collection Sys.Odor&Corrosion Control Chem.Add.Study 53327 The Wackenhut Corporation 26,145.66 Security Guards 53328 Waste Markets Corp. 25,104.25 Maint.Agreement-Grit&Screenings Removal&Digester Bed Mat'I. Removal 53329 Insituform Technologies,Inc. 233,872.56 Construction 5-29-R1 53330 J.F.Shea Construction,Inc. 1,012,085.63 Construction J-35-1 &J-87 53331 Margate Construction,Inc. 3,500,408.00 Construction Pi-37 53332 Oved Dagan Construction Co. 219,252.00 Construction J-90 53333 Acroprint Time Recorder Company 69.04 Repair of Time Recorder 53334 Agilent Technologies,Inc. 2,059.65 Lab Parts&Supplies 53335 Airborne Express 150.64 Air Freight 53336 Airgas-West 44.80 Demurrage 53337 Airgas Safety 2,274.43 Safety Supplies 53338 Alfa-Laval, Inc. 1,618.76 Electrical Parts&Supplies 53339 Alhambra Foundry Co.,Ltd. 3,439.38 Manhole Frames&Covers 53340 AliMed, Inc. 76.95 Computer Supplies 53341 Allometrics 1,501.39 Lab Instruments,Parts&Supplies 53342 American Public Works Association 3,550.00 Membership 53343 American Red Cross 350.00 CPR Classes&Supplies 53344 Nicholas J.Arhontes 360.02 Meeting/Training Expense Reimbursement 53345 Atlantis Pool Care 500.00 Service Agreement-Admin.Bldg.Atrium 53346 Awards&Trophies Company 114.42 Plaques 53347 AGM Electronics,Inc. 373.37 Electronic Supplies 53348 American Telephone&Telegraph Corp. 62.52 Telephone Service 53349 AT&T Wireless Services-Airtime 3,323.62 Cellular Telephone Service 53350 Baker Tanks 2,626.89 Tank Rentals 53351 Ballantyne,Inc. 6,960.00 Temporary Employment Services 53352 Bush&Associates, Inc. 2,076.00 Surveying Services MO 6-25-97 53353 BEC-Building Electronic Controls, Inc. 308.04 Fire Alarm System Maintenance&Quarterly Inspection Page 1 of 7 EXHIBIT A Claims Paid From 06/01/03 to 06/15/03 Warrant No. Vendor Amount Description 53354 California Relocation Services, Inc. 202.30 Office Moving Services 53355 Cardlock Fuels 942.83 Fueling District Vehicles at Local Gas Stations 53356 Carl Warren&Co. 104.16 Insurance Claims Administrator 53357 Clickguard Corporation 140.58 Printer Service Agreement 53358 Coast Transmission 1,958.44 Vehicle Repairs V-478 53359 Color Arts,Inc. 1,210.40 Construction Decals-GWRS Project 53360 Commercial Roof Management,Inc. 900.00 Construction-O&M Building Roof Repairs 53361 Communications Supply Corp. 8.46 Freight 53362 Computer Protection Technology, Inc. 13,088.66 Computer Maintenance-(10)Battery Replacements 53363 CompuMaster On-site 5,000.00 On-Site Training-PowerPoint 53364 Consolidated Elect. Distributors, Inc. 968.20 Electrical Supplies 53365 Consumers Pipe&Supply Co. 1,836.78 Plumbing Supplies 53366 Cooper Cameron Corporation 208.86 Engine Supplies 53367 Corporate Express 4,358.11 Office Supplies 53368 Cortech Engineering 4,892.11 Pump Supplies 53369 Counterpart Enterprises,Inc. 328.33 Mechanical Parts&Supplies 53370 Voided Check - - 53371 Voided Check - - 53372 County Wholesale Electric Co. 703.40 Electrical Parts&Supplies 53373 Cytec Industries 17,930.67 Anionic Polymer Spec.No.9798-18 53374 CCP Industries 8,342.01 Janitorial Supplies 53375 CGvL Engineers 7,805.06 Professional Services P1-94 53376 Ciba Specialty Chemicals Corporation 18,620.93 Cationic Polymer 53377 CMF Corporation 6,087.88 Lab Parts&Supplies 53378 CR&R, Inc. 3,235.00 Container Rentals 53379 CWEA Membership 276.00 Membership-Calif.Water Environment Assoc. 53380 Dapper Tire Co. 1,072.26 Truck Tires 53381 David's Tree Service 11,050.00 Tree Maint.Service 53382 Dell Computer 16,576.26 Computers 53383 Diamond H Recognition 782.21 Employee Service Awards 53384 E.Sam Jones Distributors, Inc. 295.78 Electrical Supplies 53385 Eastech Badger 2,999.66 Repairs&Calibration of Flow-Meters 53386 Eberhard Equipment 708.94 Mechanical Parts&Supplies 53387 Electra-Bond, Inc. 4,067.57 impeller Maintenance-Sandblasting& Fusion Bond Coating 53388 Embarcadero Technologies,Inc. 3,090.28 Software Maintenance 53389 Empire Pipe Cleaning&Equipment, Inc. 21,809.35 Sewerline Cleaning-Various Locations 53390 Enchanter,Inc. 5,400.00 Ocean Monitoring MO 5-24-95 53391 Eurotherm Group Companies 766.50 Inst.Parts&Supplies 53392 Emedco 502.24 Identification Signs 53393 Filarsky&Watt,L.L.P. 3,467.50 Prof.Services-SPMT Labor Negotiation Meetings&Special Services 53394 First American Real Estate Solutions 647.50 Orange County Property Information 53395 Fisher Scientific Company,L.L.C. 14,956.12 Lab Parts&Supplies 53396 Flat and Vertical,Inc. 660.00 Concrete Cutting 53397 Foodcraft Coffee&Refreshment Services 369.14 Meeting Supplies 53398 Franklin Covey 617.65 Office Supplies 53399 Fry's Electronics 654.87 Computer Supplies 53400 City of Fullerton 118.86 Water Use 53401 FLW, Inc. 1,042.28 Instrument Parts&Supplies 53402 G.E.Supply Company 375.35 Electrical Parts&Supplies Page 2 of 7 EXHIBIT A Claims Paid From 06/01/03 to 06/15/03 I Warrant No. Vendor Amount Description 53403 Ganahl Lumber Company 223.00 Lumber/Hardware 53404 George Hamilton Jones,Inc. 350.00 Appraiser Litigation Services-Project 5-50 53405 George Yardley Co. 753.56 Electrical Supplies 53406 Gierlich-Mitchell,Inc. 15,224.22 Mechanical Parts&Supplies 53407 Global Environmental Network,Inc. 1,187.50 Trench Safety Training 53408 Golden State Controls 138.35 Inst.Parts&Supplies 53409 Goldenwest Window Service 2,462.00 Window Cleaning Service-Spec.#990015 53410 John G.Gonzalez 638.90 Meeting/Training Expense Reimbursement 53411 W W Grainger,Inc. 816.29 Safety Storage Cabinet 53412 Graybar Electric Company 57.86 Electrical Supplies 53413 Guarantee Records Management 24.36 Off-Site Records Storage 53414 GPM Pumps, Inc. 12,969.20 (2)Pump Assemblies 53415 Haaker Equipment Company 900.03 Automotive Parts&Repair Service 53416 Harrington Industrial Plastics,Inc. 692.97 Flow Meters 53417 Hello Direct,Inc. 90.56 Telephone Headsets 53418 High Impact Training 4,250.00 Forklift Operator Safety Training 53419 Hill Brothers 18,053.91 Chemicals-Odor&Corrosion Control-Newport Trunkline 53420 Hilti, Inc. 970.20 Mechanical Parts&Supplies 53421 The Holman Group 866.70 Employee Assistance Program Premium 53422 Home Depot 59.25 Misc.Repair&Maintenance Material 53423 Hopkins Technical Products 1,190.93 Installation&Calibration of Chlorine Analyzer 53424 Horizon Technology 122.18 Lab Parts&Supplies 53425 Hub Auto Supply 198.34 Automotive Parts&Supplies 53426 City of Huntington Beach 16,652.88 Water Use 53427 HI Standard Automotive 232.62 Automotive Parts,Supplies&Repairs 53428 Industrial Distribution Group 1,346.32 Mechanical Parts,Paint Supplies&Tools 53429 Industrial Threaded Products,Inc. 7,224.66 Fasteners 53430 Interstate Battery Systems 495.11 Batteries 53431 Intratek Computer, Inc. 1,800.00 Network&Server Maintenance 53432 Iron Mountain 151.88 Bid Document Storage Fees P1-37 53433 Irvine Ranch Water District 6.69 Water Use 53434 J&L Industrial Supply 141.44 Mechanical Parts,Supplies&Tools 53435 J.G.Tucker and Son, Inc. 7,668.72 Instrument Parts,Supplies&Cylinder Gases 53436 Jamison Engineering Contractors, Inc. 10,484.00 Construction-Repair Underground Pipe Leak at O.O.B.S.Wetwell Area 53437 Jay's Catering 1,173.97 Meeting Expenses 53438 Johnstone Supply 26.10 Pump Supplies 53439 K.P.Lindstrom,Inc. 2,665.00 Environmental Consulting Services MO 12-9-90 53440 Kent Fluid Power Div.of AIT 96.97 Automatic Drain Filters 53441 Kforce Professional Staffing 475.20 Temporary Employment Services 53442 Lab Safety Supply,Inc. 326.39 Lab Parts&Supplies 53443 Lee&Ro,Inc. 9,206.25 Professional Services P1-93 53444 Lifecom-Safety,Inc. 565.61 Instrument Calibration&Repairs 53445 Long Beach Line-X 347.38 Spray-On Truck Bed Liner 53446 Lucci's Gourmet Foods, Inc. 362.38 Meeting Expense 53447 M.J.Schiff&Associates, Inc. 5,091.04 Professional Services-Corrosion Study 53448 MarVac Electronics 60.24 Electrical Parts&Supplies 53449 McMaster-Carr Supply Co. 2,509.20 Mechanical&Electrical Parts&Supplies 53450 Measurement Control Systems, Inc. 4,423.96 Mechanical Parts,Calibration&Repairs 53451 Michael's Roofing 1,600.00 Roof Repairs to I.T.Trailer Complex Page 3 of 7 EXHIBIT A Claims Paid From 06/01/03 to 06/15/03 Warrant No. Vendor Amount Description 53452 Mid-West Associates 1,915.16 Pump Supplies 53453 Midway Mfg&Machining Co. 13,642.38 Parts Machining Services 53454 Milltronics,Inc. 18.00 Freight 53455 Minarik 597.37 Instrument Supplies 53456 Mission Uniform Service 4,609.77 Uniform Rentals 53457 Montgomery Watson 1,105.50 Professional Services-Emission Modeling&Analysis 53458 Peter M.Morrison 551.36 Meeting/Training Expense Reimbursement 53459 MARMAC Field Services, Inc. 12,386.58 Professional Services-Emergency Operation Center Modifications 53460 MCR Technologies, Inc. 501.74 Instrument Supplies 53461 MDS Consulting 17,596.80 Surveying Services 53462 National Notary Association 45.00 Membership 53463 National Plant Services, Inc. 12,535.00 Vacuum Truck Services 53464 National Safety Council 535.94 On-Site Training-Defensive Driving 53465 National Technology Transfer,Inc. 12,185.00 Electrical Code Training 53466 Newark Electronics 2,384.32 Computer Hardware/Software 53467 Nickey Petroleum Co., Inc. 1,770.85 Mechanical Oil 53468 The Norco Companies 173.18 Mail Delivery Service 53469 Numatic Engineering 369.03 Cylinders 53470 NCG Porter Novelli,Inc. 20,389.15 Professional Services-Public Relations Biosolids Outreach Program 53471 NRG Energy, Inc. 2,425.81 Mechanical Parts&Supplies 53472 O.C.Windustrial Co. 365.76 Mechanical Parts&Supplies 53473 Office Depot Business Services Div. 1,171.99 Office Supplies 53474 OneSource Distributors, Inc. 77.02 Electrical Parts&Supplies 53475 Orange County Hose Company 574.55 Hose Supplies 53476 Orange County Vector Control District 3,303.40 Pest Control 53477 Orange Courier 40.25 Courier Services 53478 Ortiz Fire Protection 3,615.00 Service Agreement-Testing/Certification,Otrly. Inspection&Repair of Fire Sprinklers 53479 Oxygen Service Company 2,080.01 Specialty Gases 53480 OCB Reprographics 9,621.85 Printing Service-MO 1/26/00 53481 Pacific Mechanical Supply 2,555.40 Plumbing Supplies 53482 Parker Supply Company 1,556.73 Pump Supplies 53483 Patriot Video Productions 198.82 Video 53484 PenValve 1,297.44 Mechanical Parts&Supplies 53485 The Perkin Elmer Corp. 7,043.20 Lab Parts&Supplies 53486 PinnacleOne Institute 24,970.00 Legal Services-J-33-1 A Claim 53487 Hach c/o Penton Industries 2,362.03 Lab Parts&Supplies 53488 Power Design 4,599.23 Electrical&Computer Hardware Supplies 53489 Pre-Paid Legal Services, Inc. 478.40 Employee Legal Service Insurance Premium 53490 Primary Source 24,835.12 Office Furniture 53491 Profit Techniques,Inc. 2,000.00 O&M Training Registration 53492 Projects Partners 10,844.04 Temporary Employment Services 53493 Putzmeister-America 333.03 Mechanical Parts&Supplies 53494 PCS Express 235.60 Courier Service 53495 Realtime Systems Corporation 9,468.75 Software/Hardware Maintenance Agreement&Support 53496 RemedyTemp,Inc. 1,914.38 Temporary Employment Services 53497 Retrofit Parts&Components, Inc. 1,314.89 Mechanical Parts&Supplies 53498 Richard Hawk&Company 4,000.00 Supervisor Safety Training 53499 Ricoh Business System 3,247.80 Color Copier Lease 53500 Rockwell Automation-Entek 1,872.24 Computer Software/Hardware Page 4 of 7 EXHIBIT A Claims Paid From 06/01/03 to 06/15/03 Warrant No. Vendor Amount Description 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. 23,321.77 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 Terminix 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.Gerlinger 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 O&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 Claims Paid From 06/01/03 to 06/15/03 Warrant No. Vendor Amount Description 53550 Veme's Plumbing 2,510.00 Service Contract-Testing&Cert.Backflow Devices at Pits. 1 &2&Pump Sta. 53551 Village Nurseries 44.18 Landscaping Supplies 53552 VWR Scientific Products Corporation 6,673.19 Lab Supplies 53553 Water Systems Cleaning Co. 4,140.00 Cleaning Services-Scrubber 1 at Pit.2 53554 Waxie Sanitary Supply 171.14 Janitorial Supplies 53555 West Coast Safety Supply Co. 2,500.36 Mechanical Parts&Supplies 53556 Wilhelm Electric Co., Inc. 11,480.00 Installation of(2)Underground Telephone Conduits at Seal Beach Pump Station 53557 Wilson Supply, Inc. 1,020.53 Mechanical Parts&Supplies 53558 Watson Wyatt Data Services 399.00 Publication 53559 WEF 592.00 Membership-Water Environment Federation 53560 Xerox Corporation 7,807.70 Fax&Copier Leases 53561 California Bank&Trust 1,382.00 Construction J-33-1A,Retention 53562 Cora Constructors 11,340.00 Construction 7-7-2 53563 Southern Contracting Company 12,434.00 Construction J-33-1 A 53564 Patrick B.Carnahan 946.36 Meeting/Training Expense Reimbursement 53565 Barbara A.Collins 709.30 Meeting/Training Expense Reimbursement 53566 Philip F.Cordova 407.70 Meeting/Training Expense Reimbursement 53567 James D.Herberg 210.00 Meeting/Training Expense Reimbursement 53568 Michael D.Moore 252.00 Meeting/Training Expense Reimbursement 53569 Robert Ooten 922.74 Meeting/Training Expense Reimbursement 53570 Gary A. Pons 1,195.50 Meeting/Training Expense Reimbursement 53571 Steven M.Thornburg 457.60 Meeting/Training Expense Reimbursement 53572 Linda Losurdo 1,238.68 Meeting/Training Expense Reimbursement 53573 Orange County Sanitation District 1,635.71 Petty Cash Reimb. 53574 Phonsiri,Vanh 1,249.06 Employee Computer Loan Program 53575 Reliastar 9,438.40 Employee Medical Health Premium 53576 Blue Cross of California 277,551.30 Medical Insurance Premium 53577 Orange County Sanitation District 552,117.62 Payroll EFT Reimbursement 53578 Parsons Infrastructure&Tech.Group 79,980.00 Professional Services J-40-9 53579 Airgas Safety,Inc. 48.52 Safety Supplies 53580 American Airlines 6,304.00 Travel Services 53581 Blake Anderson 190.80 Meeting/Training Expense Reimbursement 53582 Ashbrook Corporation 211.33 Mechanical Parts&Supplies 53583 American Telephone&Telegraph Corp. 543.25 Telephone Service 53584 Court Order 626.20 Wage Garnishment 53585 Black&Veatch Corporation 130.00 Publication 53586 California Bike Commute 298.00 T-Shirts-Employees Bike to Work Day 53587 Court Order 150.00 Wage Garnishment 53588 Consumers Pipe&Supply Co. 1,810.08 Mechanical Parts&Supplies 53589 Convey Compliance Systems, Inc. 370.01 Software 53590 County of Orange-Auditor Controller 107.68 Maint.Agreement-Repair/Installation of Base,Handheld&Vehicle Radios 53591 County of Orange-Auditor Controller 140.82 Maint.Agreement-Repair/Installation of Base,Handheld&Vehicle Radios 53592 Court Trustee 69.12 Wage Garnishment 53593 CWEA Membership 92.00 Membership-Calif.Water Environment Assoc. 53594 Department of Motor Vehicles 24.00 Vehicle Decals 53595 Digiterra, Inc. 96.98 Computer Keyboard 53596 Employee Benefits Specialists,Inc. 7,983.20 Reimbursed Prepaid Employee Medical&Dependent Care 53597 Court Order 525.00 Wage Garnishment 53598 Franchise Tax Board 100.00 Wage Garnishment Page 6 of 7 EXHIBIT A a' Claims Paid From 06/01/03 to 06/15/03 Warrant No. Vendor Amount Description 53599 Hasler,Inc. 930.96 Software&Maintenance-Complete Mail Manager Intellitouch System 53600 IntelaCard,L.L.C. 148.18 Office&Computer Printer Supplies 53601 Internal Revenue Service 325.00 Wage Garnishment 53602 Interstate Battery Systems 354.94 Batteries 53603 Intl.Union of Oper.Eng.AFL-CIO Local 501 3,283.68 Dues Deduction 53604 Manley's Boiler,Inc. 112.17 Mechanical Parts&Supplies 53605 McMaster-Carr Supply Co. 208.53 Mechanical Parts, Repairs&Maintenance Materials 53606 National Bond&Trust 2,148.34 U.S.Savings Bonds Payroll Deductions 53607 OCEA 524.61 Dues Deduction 53608 Court Order 40.00 Wage Garnishment 53609 Court Order 296.00 Wage Garnishment 53610 Peace Officers Council of CA 1,503.00 Dues Deduction 53611 PenValve 61.53 Mechanical Parts&Supplies 53612 Richard Hawk&Company 1,159.00 Professional Services-Supervisor Safety Training Program&Prep Work 53613 Shureluck Sales&Engineering 224.17 Mechanical Parts&Supplies 53614 Court Order 721.50 Wage Garnishment 53615 Southern California Edison 6,976.94 Power 53616 SBC 33.45 Telephone Services 53617 Thompson Industrial Supply, Inc. 418.24 Mechanical Supplies 53618 United Way 305.00 Employee Contributions 53619 Verizon California 1,289.81 Telephone Services 53620 Blake Anderson 2,038.45 Meeting/Training Expense Reimbursement 53621 Patrick W.McNelly 392.38 Meeting/Training Expense Reimbursement 53622 Ernest R.Savedra 92.00 Meeting/Training Expense Reimbursement 53623 Mark A.Tomko 134.00 Meeting/Training Expense Reimbursement 53624 Daniel R.Tremblay 955.16 Meeting/Training Expense Reimbursement Total Accounts Payable-Warrants $ 10,130,701.43 Payroll Disbursements 30085-30210 Employee Paychecks $ 156,977.61 Biweekly Payroll 06/11/03 30211 -30211 Interim Paycheck 5,563.46 Termination Paycheck 86028-86523 Direct Deposit Statements 857,515.77 Biweekly Payroll 06/11/03 Total Payroll Disbursements $ 1,020,056.84 Wire Transfer Payments Chase Bank of Texas, National Association $ 45,145.09 May Interest Payment on 1993 Certificates of Participation Chase Bank of Texas,National Association 117,593.01 Societe Generale May Swap Payment on 1993 Certificates of Participation Total Wire Transfer Payments $ 162,738.10 Total Claims Paid 06/01/03-06/15/03 $ 11,313,496.37 Page 7 of 7 EXHIBIT A f Claims Paid From 06/16/03 to 06/30/03 Warrant No. Vendor Amount Description Accounts Payable-Warrants 53625 Black&Veatch Corporation $ 89,763.09 Engineering Services P1-76,132-85&J-77 53626 Brown&Caldwell 84,002.98 Engineering Services-Plant O&M Manual&SOP Develcpment 53627 Delta Dental 51,069.96 Dental Insurance Plan 53628 Dobbertin&Associates 38,024.00 Confined Space Rescue Training 53629 Green Giant Landscape,Inc. 50,262.87 Construction-Landscaping&Irrigation at Pit.2 53630 Hill Brothers 29,316.54 Chemicals-Odor&Corrosion Control-Newport Trunkline 53631 Industrial Distribution Group 28,857.90 (30)Custom Weather-Resistant Tool Boxes,Tools,&Mech.Supplies 53632 Kemiron Pacific,Inc. 224,626.19 Ferric Chloride MO 9-27-95 53633 Lee&Ro,Inc. 55,607.48 Professional Services 5-49,5-50,5-51,5-52,5-54&11-23-1 53634 Malcolm Pirnie,Inc. 36,346.95 Professional Services 1-10 53635 Municipal Water Dist.of Orange County 92,008.12 Water Use Efficiency Program MO 9-22-99 53636 NRG Energy, Inc. 352,000.00 Overhaul of Cen Gen Engines 1 &2 at Plant 2 53637 Orange County Sanitation District 39,508.39 Worker's Comp.Reimb. 53638 Orange Coast Jeep/Chrysler 27,392.25 (1)2003 Jeep Wrangler 53639 Parsons Engineering Science,Inc. 224,862.45 Engineering Services J-35-1 53640 Pioneer Americas, Inc. 178,197.83 Sodium Hypochlorite 53641 Polydyne,Inc. 67,533.91 Cationic Polymer MO 3-11-92 53642 Printech Graphic Services, Inc. 45,516.80 Printing&Mailings Services-Rate Increase Notifications 53643 So.Cal.Gas Company 30,961.73 Natural Gas 53644 Steve P. Rados, Inc. 846,648.00 Construction 1-2-4 53645 Synagro Technologies,Inc. 533,677.39 Residuals Removal MO 3-29-95 53646 Techno Coatings 43,984.50 Painting Services-Fiberglass Chemical Tanks&Scrubbers 53647 Tule Ranch 121,041.47 Residuals Removal MO 3-29-95 53648 Union Bank of California 94,072.00 Construction 1-2-4,Retention 53649 Water Environment Research Foundation 79,120.00 Membership 53650 Insituform Technologies,Inc. 409,630.51 Construction 5-29-R1 53651 Orange County Sanitation District 37,235.00 Worker's Comp.Reimb. 53652 Able Scale Repair 550.00 Maintenance Agreement-Qtrly. Inspections of Truck Loading Scales at Plants 1 &2 53653 Advanced Business Graphics 214.99 Printing 53654 Advanced Sealing&Supply Co., Inc. 2,374.48 Mechanical Parts&Supplies 53655 Airborne Express 149.67 Air Freight 53656 Airgas-West 1,053.05 Lab Parts&Supplies 53657 Alhambra Foundry Co., Ltd. 6,456.38 Manhole Frames&Covers 53658 All Phase Environmental 516.00 Hazardous Waste Disposal-Remove Unleaded Fuel from Auto Shop,Pit.1 53659 Alta-Robbins,Inc. 339.76 Instrument Supplies 53660 American Red Cross 547.45 CPR Training&Miscellaneous Supplies 53661 Appleone Employment Service 1,776.00 Temporary Employment Services 53662 Aquarium of the Pacific 49.80 Reimbursable Employee Activity Expense 53663 Awards&Trophies Company 177.54 Plaques 53664 ACGIH Worldwide 145.00 Membership(American Conference of Industrial Hygienists) 53665 AMSA 1,350.00 Source Control Meeting Registration 53666 ARB/PERP-Air Resources Board 180.00 Triennial Renewal Fee-Portable Equipment Registration Certificates 53667 American Telephone&Telegraph Corp. 21.25 Telephone Service 53668 Voided Check - 53669 Voided Check - - 53670 Voided Check - - 53671 AWSI 163.00 Department of Transportation Training Program Page 1 of 7 EXHIBIT B Claims Paid From 06/16/03 to 06/30/03 Warrant No. Vendor Amount Description 53672 Baker Tanks 3,136.00 Tank Rentals 53673 Bar Tech Telecom,Incorporated 3,500.00 Telephone Service-Relocation of 70 Telephones to J-90 Trailer Complex 53674 Basic Chemical Solutions 23,374.89 Sodium Bisulfite 53675 Battery Specialties 463.41 Batteries 53676 Camel Financial, Inc.c/o Bearing Metal 908.33 Metal 53677 BioMerieux Vitek,Inc. 1,030.50 Lab Supplies 53678 Boyle Engineering Corporation 876.99 Engineering Services 2-31 53679 C.S.U.F.Foundation 10,031.25 Membership-Center for Demographic Research 53680 Martin Boyer Co.,Inc.c/o Cambridge, Int. 2,083.33 Prof. Services-Workers'Compensation Claims 53681 City of Los Angeles 3,233.52 Grain Size Analyses 53682 City of Yorba Linda 25.00 Meeting Expenses-Project 2-41 53683 Coast Fire Equipment 700.00 Serv.Agree.-Testing,Recharging&Certification of Fire Extinguishers at Plts. 1 &2 53684 Communications Performance Group, Inc. 13,110.68 Professional Services-Integrated Emergency Response Procedures Revisions 53685 CompuMaster On-site 2,800.00 On-Site Training-MS Access 53686 Condenser&Chiller Services,Inc. 13,800.50 Maintenance Service-Remove&Replace Condenser Heads 53687 Conex International 1,325.00 Professional Services P2-60 53688 Consolidated Elect.Distributors,Inc. 963.52 Electrical Supplies 53689 Consumers Pipe&Supply Co. 1,279.81 Plumbing Supplies 53690 Cooper Energy Services 56.50 Mechanical Parts&Supplies 53691 Cornerstone Systems,Inc. 9,299.90 Antiviral Software Renewal for Desktops,Server&E-Mails 53692 Corporate Express 300.72 Office Supplies 53693 Cost Containment Solutions 1,185.89 Worker's Comp.Services 53694 County Wholesale Electric Co. 40.08 Electrical Parts&Supplies 53695 Culligan Water Conditioning 1,234.55 Water Softener Equipment Repairs at Truck Wash 53696 CASA 325.00 Source Control Meeting Registration 53697 CGvL Engineers 10,332.52 Professional Services P1-94 53698 CWEA Membership 92.00 Membership-Calif.Water Environment Assoc. 53699 David's Tree Service 3,000.00 Tree Malnt.Service 53700 Del Mar Analytical 3,579.00 Analysis of Biosolids and Wastewater 53701 Department of Consumer Affairs 160.00 Membership 53702 Diamond H Recognition 209.16 Employee Service Awards 53703 E.Sam Jones Distributors,Inc. 642.75 Electrical Supplies 53704 Eastech Badger 1,519.23 Instrument Parts&Supplies 53705 Eber€ine Instruments 636.11 Calibration Services 53706 Ecology Control Industries 1,881.40 Hazardous Waste Disposal 53707 Edinger Medical Group,Inc. 360.00 Medical Screening 53708 Elliott Bay Design Group 30.10 Naval Architecture Marine Engineering Services 53709 Employee Benefits Specialists,Inc. 630.35 Reimbursed Prepaid Employee Medical&Dependent Care 53710 Employers Group 7,000.00 On-Site Training-Bus.Writing,Mgmt.Techniques,Proj.Mgmt.&Supvr.Devel. 53711 Enchanter,Inc. 6,300.00 Ocean Monitoring&Outfa[I Inspection&Monitoring 53712 Environmental Resource Association 283.90 Lab Parts&Supplies 53713 Environmental Systems Research Inst. 2,250.00 Engineering Training Registration 53714 Excel Door&Gate Company,Inc. 430.95 Maintenance&Repair Services 53715 ESRI, Inc. 2,250.00 Information Technology Training Registration 53716 FedEx Corporation 502.09 Air Freight 53717 Filarsky&Watt,L.L.P. 3,372.50 Prof.Services-SPMT Labor Negotiation Meetings&Special Services 53718 FileNET Corporation 2,760.00 Computer Software-Electronic Document Management System 53719 Fisher Scientific Company,L.L.C. 5,283.68 Lab Parts&Supplies c Page 2 of 7 EXHIBIT B . y Claims Paid From 06/16/03 to 06/30/03 Warrant No. Vendor Amount Description 53720 Flo-Systems, Inc. 2,335.85 Pump Supplies 53721 Foodcraft Coffee&Refreshment Services 548.54 Meeting Supplies 53722 Fortis Benefits Insurance Company 21,191.53 Long-Term&Short-Term Disability Ins. Premium 53723 Fountain Valley Camera 17.67 Photo Supplies 53724 Franklin Covey 618.40 Office Supplies 53725 Friends of Keith Richman 204.00 Professional Services 1-10 53726 Fry's Electronics 3,728.84 Computer Supplies 53727 Garratt-Callahan Company 294.16 Chemicals 53728 Gates Fiberglass Installers 1,823.25 Fiberglass Repairs-Tower H, Pit.2 53729 George T.Hall 96.85 Tools 53730 Gierlich-Mitchell, Inc. 378.61 Pump Parts&Supplies 53731 Graham Company 405.61 Batteries 53732 Grating Pacific,Inc. 230.60 Fiberglass Grating 53733 GBC(General Binding Corp) 95.06 Office Supplies 53734 Harrington Industrial Plastics, Inc. 1,373.44 Plumbing Supplies 53735 Hasco Oil Co.,Inc. 223.73 Lube Oil 53736 High Impact Training 4,000.00 On-Site Operator Safety Training 53737 Hilti,Inc. 1,991.22 Mechanical Parts&Supplies 53738 The Holman Group 868.32 Employee Assistance Program Premium 53739 Home Depot 1,669.53 Misc.Repair&Maintenance Material 53740 Industrial Threaded Products, Inc. 4,044.78 Mechanical Parts&Supplies 53741 Roto Rooter 13,489.98 CCTV Videoing of Trunkline Sewers 53742 Irvine Photo Graphics 507.50 Photographic Services 53743 J&L Industrial Supply 1,812.20 Mechanical Parts&Supplies 53744 J R Filanc Construction 6,405.00 Construction-Removal&Disposal of Fiberglass Panels at Blower Building 53745 Jamison Engineering Contractors, Inc. 5,750.93 Gas Flaps&Installation 53746 Jay's Catering 613.31 Meeting Expenses 53747 Johnstone Supply 129.80 Electrical Supplies 53748 Kars Advance Materials,Inc. 6,490.00 Cen Gen No.3 Sample Analysis, Repair&Maintenance 53749 Kforce Professional Staffing 242.88 Temporary Employment Services 53750 Lab Support 13,471.97 Temporary Employment Services 53751 Lucci's Gourmet Foods, Inc. 96.00 Meeting Expense 53752 LINJER 8,831.69 Professional Service-DART MO 9-22-99 53753 M.J.Schiff&Associates,Inc. 24,033.28 Professional Services-Corrosion Study 53754 Manatt,Phelps&Phillips,L.L.P. 5,000.00 Strategic Planning&Advocacy 53755 Mandic Motors 116.50 Towing Services 53756 McJunkin Corporation 129.63 Plumbing Supplies 53757 McMahan Business Interiors 9,344.04 Construction-Cubicle Modifications to Human Resources Building 53758 McMaster-Carr Supply Co. 313.82 Mechanical Parts,Tools&Maintenance Materials 53759 McRay Industries, Inc. 1,754.51 Mechanical Parts&Supplies 53760 Measurement Variables,Inc. 813.31 Electrical Supplies 53761 Mec Analytical System 1,464.60 Toxicity Analysis 53762 Media Clips,Inc. 40.00 Notices&Ads 53763 Medlin Controls Co. 441.97 Instrument Supplies 53764 Megger 1,270.00 Extended Software Support-AVTS&PulseMaster 53765 Meriam Instruments c/o Patten Corp. 92.00 Instrument Parts&Supplies 53766 Minarik 558.71 Electrical Parts&Supplies 53767 Mitchell Instrument Co. 75.00 Instrument Parts&Supplies Page 3 of 7 EXHIBIT B Claims Paid From 06/16/03 to 06/30/03 Warrant No. Vendor Amount Description 53768 National Journal Group, Inc. 71.39 Publication 53769 National Plant Services,Inc. 8,450.00 Vacuum Truck Services 53770 National Technology Transfer, Inc. 10,990.00 On-Site Training-Electrical Code&Custom High Voltage 53771 New Horizons CLC of Santa Ana 320.00 Information Technology Training Registration 53772 Newark Electronics 603.02 Computer Hardware 53773 Nextel Communications 3,515.03 Cellular Phones&Air Time 53774 Nickey Petroleum Co., Inc. 1,071.66 Oil/Lubricants 53775 North American Crane Bureau,Inc. 4,300.00 On-Site Overhead Crane Operator Training-(5)Classes 53776 Nu-Way Laser Engraving 146.10 Steel Tags 53777 NAFA,Inc. 415.00 Membership(National Association of Fleet Administrators, Inc.) 53778 Nelson-Dunn,Inc. 963.76 Piping 53779 Office Depot Business Services Div. 1,291.12 Office Supplies 53780 Orange County Forum 150.00 Membership 53781 Oxygen Service Company 897.08 Specialty Gases 53782 OCB Reprographics 19,044.08 Printing Service-MO 1/26/00 53783 P.L.Hawn Company,Inc. 1,304.12 Electrical Supplies 53784 Pace Analytic Services 1,225.00 Lab Analyses 53785 Pacific Bell Internet Services 652.93 Internet Service 53786 Pacific Parts&Controls 6,622.40 Electrical Supplies 53787 Parker Supply Company 3,331.48 Mechanical Parts&Supplies 53788 PenValve 65.44 Mechanical Parts&Supplies 53789 Perma Pure, Inc. 217.22 Filter 53790 Ponton Industries, Inc. 1,563.76 Instrument Supplies 53791 Primary Source 2,309.79 Office Furniture 53792 Project Partners 12,957.87 Temporary Employment Services 53793 Protech Petroleum Services,Inc. 8,630.75 Generator Repairs 53794 Putzmeister 1,466.77 Pump Supplies 53795 PCG Industries 1,250.00 Pump Repairs 53796 PCS Express, Inc. 330.00 Courier Service 53797 R.L.Abbott&Associates 3,000.00 Kern County Biosolids Consulting Services 53798 Rainbow Disposal Co. 2,126.12 Trash Removal 53799 Rainin Instrument Co., Inc. 219.65 Instrument Repairs&Calibration 53800 Refrigeration Supplies Distributor 337.26 Refrigeration Supplies 53801 Reliastar 9,421.05 Employee Basic Life Insurance Premium 53802 Retrofit Parts&Components,Inc. 241.66 Mechanical Parts&Supplies 53803 Richard Hawk&Company 5,143.50 Professional Services-Supervisor Safety Training 53804 River Network 29.00 Publication 53805 RBF Engineers 8,669.11 Engineering Services 2-24-1 53806 RJN Group, Inc. 9,000.00 CMMS Software Maint.&Support 53807 RM Automation c/o RM Controls 101.99 Instrument Supplies 53808 RMS Engineering&Design,Inc. 4,665.00 Engineering Services J-89 53809 RPM Electric Motors 3,352.54 Electrical Parts,Supplies,Pump Repairs&Electric Motor 53810 RSA Sutter Soil Products 1,540.82 Soil Materials 53811 Safety-Kleen 3,943.65 (1)Solvent Machine 53812 Schwing America, Inc. 82.37 Pump Supplies 53813 Scottel Voice&Data,Inc. 2,284.80 Telephone System Maintenance 53814 Seal's Compressed Gases 225.25 Oxygen Bottle Refills for District Medical Team 53815 Secure Decks&Scaffolding, Inc. 720.00 On-Site Hazard Awareness Training Page 4 of 7 EXHIBIT B N � Claims Paid From 06/16/03 to 06/30/03 Warrant No. Vendor Amount Description 53816 Shamrock Supply Co.,Inc. 15.36 Mechanical Supplies 53817 Shureluck Sales&Engineering 186.61 Mechanical Parts&Supplies 53818 Sigma-Aldrich,Inc. 275.66 Lab Parts&Supplies 53819 Smith-Emery Company 2,249.50 Professional Services P1-37 53820 South Coast Air Quality Management Dist. 150.00 Annual Emission,Operation&Misc.Fees 53821 South Coast Systems, Inc. 19,419.00 Professional Services-Anoxic Gas Floatation Pilot Test 53822 Southern California Edison 1,971.32 Power 53823 Southern California Material Handling 20,901.35 (1)2003 Caterpillar 3,500 lb. Forklift 53824 Sparkletts 1,444.47 Drinking Water/Cooler Rentals 53825 Spex Certiprep,Inc. 410.39 Lab Parts&Supplies 53826 Stanton Radiator 4,971.29 Radiator Repair 53827 Sterling Art 1,015.77 Drafting&Engineering Materials 53828 Strata International, Inc. 505.46 Chemicals 53829 Summit Steel 594.32 Metal 53830 Sunset Industrial Parts 833.16 Mechanical Parts&Supplies 53831 Symcas-TSG 1,384.18 SCADA System VAX Service Agreement 53832 SCAP 4,000.00 Legal Services-Kern County Litigation Fund 53833 South Coast Environmental Co. 1,265.00 Cen Gen Emissions Testing Service 53834 SPX Valves&Control 110.68 Mechanical Parts&Supplies 53835 Taylor-Dunn 157.78 Electric Cart Parts 53836 Tetra Tech, Inc. 417.57 Professional Services 7-37 53837 The Lewis Group 2,901.62 Consulting Service-Capital Project Management Process 53838 The Walking Man,Inc. 550.00 Printing&Distribution Services of Door Hangers-Project 1-2-4 53839 Thomas Brothers Maps 9,923.78 Software License 53840 Thompson Industrial Supply, Inc. 7,204.03 Mechanical Parts&Supplies 53841 Tifco Industries 353.49 Mechanical Parts&Supplies 53842 Daily Pilot 50.00 Notices&Ads 53843 Tony's Lock&Safe Service&Sales 112.55 Locks&Keys 53844 Southern California Trane Service 159.77 Electrical Parts&Supplies 53845 Tri-County Sandblasting, Inc. 500.00 Graffiti Removal 53846 Tropical Plaza Nursery,Inc. 7,975.10 Contract Groundskeeping MO 5-11-94 53847 TCH Associates, Inc. 592.16 Lab Supplies 53848 US Filter Corporation 1,159.00 Service Agreement-Lab Purification System 53849 The Vantage Group 5,440.00 Temporary Employment Service 53850 Vapex,Inc. 2,392.38 Instrument Maintenance-Odor Control&Monitoring 53851 Verizon California 4,285.74 Telephone Services 53852 Vision Service Plan 8,907.12 Vision Service Premium 53853 The Wackenhut Corporation 14,767.85 Security Guards 53854 Water 3 Engineering, Inc. 6,295.87 Engineering Service J-67 53855 Waxie Sanitary Supply 347.30 Janitorial Supplies 53856 Court Order 108.00 Wage Garnishment 53857 WEF 134.00 Membership-Water Environment Federation 53858 WEFTEC 1,820.00 O&M Meeting Registration 53859 Xerox Corporation 4,142.20 Fax/Copier Leases&Stationery/Office Supplies 53860 Unity Constructors 15,266.80 Construction 7-14-4 53861 Kimberly C.Christensen 251.60 Meeting/Training Expense Reimbursement 53862 Michele Farmer 1,306.68 Meeting/Training Expense Reimbursement 53863 Miriam Loyo 397.00 Meeting/Training Expense Reimbursement Page 5 of 7 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 1,772.58 Petty Cash Reimb. 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 APT US&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 Prequalification 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-DDC 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 Claims Paid From 06/16/03 to 06/30/03 1 Warrant No. Vendor Amount Description 53912 Court Order 40.00 Wage Garnishment 53913 Court Order 296.00 Wage Garnishment 53914 Peace Officers Council of CA 1,512.00 Dues Deduction 53915 PenValve 202.12 Mechanical Parts&Supplies 53916 PVF Sales,Inc. 48.39 Mechanical Parts&Supplies 53917 Radius Maps 750.00 Radius Map&Ownership Listings 53918 Sewer Equipment Company of America 771.49 Telescope 53919 Shureluck Sales&Engineering 18.90 Mechanical Parts&Supplies 53920 Court Order 721.50 Wage Garnishment 53921 Southern California Edison 29.58 Power 53922 Strategic Diagnostics, Inc. 431.05 Lab Parts&Supplies 53923 Summit Steel 17.89 Metal 53924 SBC 1,265.46 Telephone Services 53925 Thompson Industrial Supply,Inc. 323.90 Mechanical Parts&Supplies 53926 The Unisource Corporation 142.71 Stationery&Office Supplies 53927 United Way 305.00 Employee Contributions 53928 Verizon California 6,910.83 Telephone Services 53929 3CMA(City-County Comm.&Mktg.Assoc.) 550.00 Communications Meeting Registration 53930 Jennifer M.Cabral 156.59 Meeting/Training Expense Reimbursement 53931 Ingrid G.Hellebrand 109.37 Meeting/Training Expense Reimbursement 53932 Deirdre E. Hunter 202.06 Meeting/Training Expense Reimbursement 53933 James W. Matte 546.50 Meeting/Training Expense Reimbursement 53934 Mahin Talebi 680.88 Meeting/Training Expense Reimbursement 53935 Jane H.Tran 685.88 Meet!ng/Training Expense Reimbursement 53936 Arnold D.Purisch,Ph.D.,Inc. 3,086.00 Employee Medical Services 53937 County Clerk 43.00 Annexation Fee 53938 Local Agency Formation Commission 1,150.00 Annexation Fee 53939 Gadco Material Handling 10,138.81 (2)Mobile Hydraulic Cranes Total Payroll Disbursements $ 5,955,906.92 Payroll Disbursements 30212-30311 Employee Paychecks $ 147,937.19 Biweekly Payroll 06/25/03 30312-30314 Interim Paychecks $ 3,467.37 Reissue Stale Dated Checks 30315-30315 Interim Paycheck $ 730.23 Termination Paycheck 30316-30317 Interim Paychecks $ 6,776.13 Termination&Director's Paychecks 86524-87014 Direct Deposit Statements 883,398.93 Biweekly Payroll 06/25/03 Total Payroll Disbursements $ 1,042,309.85 Wire Transfer Payments U.S.Bank $ 6,042.39 June Interest Payment on Series 2000 A&B Certificates of Participation Total Wire Transfer Payments $ 6,042.39 Total Claims Paid 06/16/03-06/30/03 $ 7,004,259.16 Page 7 of 7 EXHIBIT B BOARD OF DIRECTORS Meeting Date To Bd.of Dir. 8/27/03 AGENDA REPORT Item Number Item Number s Orange County Sanitation 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 Claims 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. In general, you must disclose the basis of the conflict by identifying the name of the firm or individual who was the contributor. For the specifics of Government Code Section 84308. please see your Director'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 07/01/03 —07/15/03 and 07/16/03 —07/31/03 G:\wp.dta\agenda\Board Agenda Reports',2003 Board Agenda Reports\0803\Item 8.Claims Paid.doc Revised: 06/04/03 �l d Claims Paid From 07/01/03 to 07/15/03 Warrant No. Vendor Amount Description Accounts Payable-Warrants 53940 ADS Environmental Services, Inc. 70,829.63 Professional Services J-73-2 53941 Air Products&Chemicals 25,758.02 O&M Agreement Oxy Gen Sys MO 8-8-89 53942 Basic Chemical Solutions 67,614.59 Sodium Bisulfite 53943 Black&Veatch Corporation 59,808.69 Engineering Services J-87 53944 Blue Cross of California 279,692.12 Medical Insurance Premium 53945 Brown&Caldwell 244,309.87 Engineering Services 1-98&P1-37 53946 Carollo Engineers 710,454.38 Professional Services P2-66&Microfiltration Demonstration Study 53947 Coral Energy Resources, L.P. 111,839.60 Natural Gas 53948 CH2MHill 188,338.35 Professional Services J-40-6&J-40-7 53949 J.F_Shea Construction,Inc. 1,992,026.68 Construction J-35-1 &J-87 53950 Kemiron Pacific, Inc. 108,555.96 Ferric Chloride MO 9-27-95 53951 Lee&Ro,Inc. 86,120.73 Professional Services 5-54,J-71-7&P2-39 53952 Malcolm Pimle,Inc. 34,686.61 Professional Services J-79 53953 Margate Construction,Inc. 2,937,665.00 Professional Services P1-37 53954 Oved Dagan Construction Co. 228,798.77 Construction J-90 53955 Parsons Engineering Science,Inc. 171,633.80 Engineering Services J-42 53956 Pioneer Americas,Inc. 125,336.86 Sodium Hydroxide&Sodium Hypochlorite 53957 Primary Source 25,439.22 Office Furniture 53958 Sancon Engineering, Inc. 45,740.00 Construction-Manhole Rehabilitation Various Locations 53959 Science Applications Intl.,Corp. 41,494.89 Ocean Monitoring P-179 53960 Southern California Edison 79,389.78 Power 53961 Southern Contracting Company 29,956.00 Construction J-33-IA 53962 Tule Ranch 188,204.42 Residuals Removal MO 3-29-95 53963 U.S.Peroxide 219,881.09 Prof.Services-Coilection Sys.Odor&Corrosion Study&Hydrogen Peroxide 53964 A-Plus Systems 1,997.00 Notices&Ads 53965 Advanced Engine Technology Corporation 5.249.95 Electrical Supplies 53966 Agilent Technologies, Inc. 16,012.83 Lab Parts&Supplies 53967 Air Liquide America Corp. 822.43 Specialty Gases 53968 Airborne Express 161.11 Air Freight 53969 Airgas-West 22.63 Demurrage 53970 Airgas Safety,Inc. 5,346.78 Safety Supplies 53971 American Machinery&Blade,Inc. 267.36 Mechanical Parts&Supplies 53972 American Red Cross 16.00 CPR Classes&Misc.Supplies 53973 American Water Works Association 144.00 Publication 53974 Analytical Products Group,Inc. 450.00 Lab Parts&Supplies 53975 Aquatic Bioassay And Consulting Labs, Inc. 3,100.00 Whole Effluent Toxicity Testing 53976 AssurX,Inc. 1,500.00 On-Site Training-Business Process Automation 53977 Axeda Systems, Inc. 7,175.00 Software Maintenance&Support-@aGlance Prof.Edition 53978 AAA Concept&Technologies, Inc. 464.51 Pump Supplies 53979 ABB Automation,Inc. 777.02 Instrument Repairs&Calibration 53980 American Telephone&Telegraph Corp. 101.82 Telephone Services 53981 AT&T Wireless Services-Airtime 4.135.62 Wireless Services 53982 AT&T Wireless-TITAN 100.97 Cellular Phones&Accessories 53983 AT&T Wireless Services 2,896.00 Wireless Services 53984 Bar Tech Telecom,Incorporated 75.62 Telephone Equipment 53985 Battery Specialties 269.38 Batteries 53986 BioMerleux Vitek,Inc. 796.19 Lab Parts&Supplies 1 53987 Bongarde Communications,Ltd. 94.25 Printing Service 53988 Boyle Engineering Corporation 974.10 Professional Services 2-31 Page 1 of 8 EXHIBIT A Claims Paid From 07/01/03 to 07/15/03 Warrant No. Vendor Amount Description 53989 Bush&Associates,Inc. 3,188.00 Surveying Services MO 6-25-97 53990 California Auto Collision 1,397.58 Vehicle Repairs-V-447 53991 California Bank&Trust 3,328.00 Construction J-33-1A,Retention 53992 Callan Associates, Inc. 3,550.00 Investment Advisor 53993 Camp Dresser&McKee,Inc. 23,289.11 Engineering Services J-40-9 53994 Cardlock Fuels 915.16 Fueling District Vehicles at Local Gas Stations 53995 Patrick B.Carnahan 347,20 Meeting/Training Expense Reimbursement 53996 Ce112CeII 820.57 Telephone&Pager Equipment 53997 Center for Creative Growth 2,000.00 Professional Services-0&M Management Coaching 53998 Clickguard Corporation 426.17 Printer Service Agreement 53999 Communications Performance Group,Inc. 18,855.91 Prof.Serv.-Develop&Conduct IERP/Incident Command Program Training 54000 Consolidated Elect.Distributors,Inc. 2,018.00 Electrical Supplies 54001 Consumers Pipe&Supply Co. 2,419.33 Plumbing Supplies 54002 Contemporary Controls 495.98 Computer Supplies 54003 Linda D.Contreras 316.68 Meeting/Training Expense Reimbursement 54004 Cameron Corporation 1,146.81 Engine Supplies 54005 Corporate Express Imaging 2,401.70 Computer Supplies 54006 Corporate Express 5,045.47 Office Supplies 54007 Counterpart Enterprises, Inc. 2,079.74 Mechanical Parts&Supplies 54008 County of Orange-Auditor Controller 972.60 Maint.Agree.-Repair/Instal.of Base,Handheld&Vehicle Radios&Sewer Mapping 54009 County Wholesale Electric Co. 1,801.85 Electrical Parts&Supplies 54010 Culligan of Orange County 37.50 Maint.Agreement-Cen Gen Water Softener System 54011 Cytec Industries 2,477.06 Anionic Polymer Spec.No.9798-18 54012 CALPELRA 798.00 Human Resources Training Registration 54013 CASA 375.00 Compliance Meeting Registration 54014 CPI International 334.86 Lab Parts&Supplies 54015 CR&R,Inc. 2,835.00 Container Rentals 54016 CRG Marine Laboratories, Inc. 750.00 Lab Analysis 54017 County Sanitation of Los Angeles,District 70 1,360.00 Olfactometry Lab Expense 54018 CWEA 125.00 0&M Training Registration 54019 CWEA Membership 92.00 Membership-Calif.Water Environment Assoc. 54020 CWEA-TCP 31.00 Membership-Calif.Water Environment Assoc. 54021 David's Tree Service 3,840.00 Tree Maint.Service 54022 Del Mar Analytical 279.00 Analysis of Biosolids and Wastewater 54023 Dell Computer 12,412.12 (2)Latitude&(5)Optiplex Computers,Hardware&Windows 2003 Server License 54024 Department of Motor Vehicles 24.00 Vehicle Decals 54025 Detector Technology 554.23 Lab Parts&Supplies 54026 Diamond H Recognition 908.90 Employee Service Awards 54027 Dunn-Edwards Corporation 200.16 Paint Supplies 54028 E.Sam Jones Distributors, Inc. 25.54 Electrical Supplies 54029 Edinger Medical Group, Inc. 610.00 Medical Screening 54030 Employers Group 2,000.00 On-Site Training-Business Writing 54031 Enchanter,Inc. 2,700.00 Ocean Monitoring&Outfall Inspection&Monitoring 54032 Evans-Hydro 8,775.28 Pump Parts&Supplies 54033 ENRG 50.97 Operation&Maintenance Service for Compressed Natural Gas Stations at Pit. 1 54034 ENS Resources,Inc. 15,000.00 Professional Services-Legislative Advocate 54035 Michele Farmer 107.00 MeetinglTraining Expense Reimbursement 54036 FedEx Corporation 141.90 Air Freight 54037 Fisher Scientific Company, L.L.C. 10,240.14 Lab Parts&Supplies 54038 Flo-Systems,Inc. 5,221.42 Pump Parts&Supplies Page 2 of 8 EXHIBIT A Claims Paid From 07/01/03 to 07/15/03 Warrant No. Vendor Amount Description 54039 Forestry Suppliers 128.50 Lab Parts&Supplies 54040 Fountain Valley Camera 16.81 Film Processing 54041 Fountain Valley Rancho Hand Wash 677.65 Truck Wash Tickets 54042 Fountain Valley Paints,Inc. 161.72 Paint Supplies 54043 Franklin Covey 761.40 Office Supplies 54044 Fry's Electronics 1,055.87 Computer Supplies 54045 G.T.Hall Company 341.83 Electrical Parts&Supplies 54046 G.E.Supply 6,779.70 Electrical Parts&Supplies 54047 Garratt-Callahan Company 2,176.12 Chemicals 54048 Gates Fiberglass Installers 17.489.50 Fiberglass Repair-C Headworks East Ferric Storage Tank 54049 Getinge Castle 461.22 Pump 54050 Gilmour Group c/o Lippincott Co. 1,200.62 Hoses 54051 Godwin Pumps of America,Inc. 495.65 Pump Supplies 54052 WW Grainger, Inc. 311.58 Mechanical Parts&Supplies 54053 Graybar Electric Company 885.16 Electrical Parts&Supplies 54054 Great Western Sanitary Supplies 370.32 Janitorial Supplies 54055 Governmental Accounting Standards Board 115.00 Publication 54056 GBC(General Binding Corp) 30.05 Stationery&Office Supplies 54057 Hach c!o Ponton Industries 3,349.94 Lab Parts&Supplies 54058 Hach Company 86.86 Lab Parts&Supplies 54059 Halcyon Press 33.90 Publication 54060 Harold Primrose Ice 55.50 Ice For Samples 54061 Harrington Industrial Plastics,Inc. 443.56 Plumbing Supplies 54062 Herman Miller Workplace Resource 2,998.98 Office Furniture 54063 Hill Brothers 9,404.49 Chemicals-Odor&Corrosion Control-Newport Trunkline 54064 Home Depot 308.43 Small Hardware 54065 Hopkins Technical Products 4,477.41 Pump Supplies 54066 Hub Auto Supply 415.41 Vehicle Parts&Supplies 54067 City of Huntington Beach 28.48 Water Use 54068 Imaging Plus,Inc. 3.150.18 Printing,Service&Supplies 54069 Industrial Distribution Group 3,569.88 Mechanical Parts,Supplies,Locks&Paint 54070 Industrial Metal Supply 237.37 Metal 54071 Information Resources 500.00 Human Resources Service-Background Checks 54072 Interstate Battery Systems 599.71 Batteries 54073 Invensys Systems,Inc. 1,687.74 Electrical Parts&Supplies 54074 J E Phillips Company,Inc. 1,686.29 Roof Ventilator 54075 J.G.Tucker and Son, Inc. 141.41 Safety Supplies 54076 J.D.Edwards 3,625.00 Information Technology Training Registration 54077 Jamison Engineering Contractors, Inc. 2,199.06 SARI Line Inspection&Sewer Line Repairs 54078 Jay's Catering 1,362.47 Meeting Expenses 54079 John Lisee Pumps 1,882.02 Pump Supplies 54080 Johnstone Supply 1.685.02 Electrical Supplies 54081 Keith Boger 795.00 O&M Training Registration 54082 Kelly Paper 69.66 Paper 54083 KW Communications Consulting 843.75 Community Outreach Re Bushard Trunkline Replacement Project 54084 Labor Arbitration Institute,Inc. 700.00 Human Resources Training Registration 54085 Lexis-Nexis 2.91 Books&Publications 54086 Leybold Vacuum Products,Inc. 252.68 Lab Supplies 1 54087 Lightnin Go Leonard Engineered Products 16,990.37 Parts&Repair Service-Lightnin Gear Box 54088 Lloyd Pest Control 360.00 Insect Abatement-Filter Flies Page 3 of 8 EXHIBIT A Claims Paid From 07/01/03 to 07/15/03 Warrant No. Vendor Amount Description 54089 Los Angeles Times 228.80 Subscription 54090 Lucci's Gourmet Foods,Inc. 248.00 Meeting Expense 54091 LECCOTECH 2,875.00 Software Upgrade,Maintenance&Support 54092 Management Health Services, Inc. 12,130.00 On-Site Employee Physicals 54093 Manley's Boiler,Inc. 111.56 Mechanical Parts&Supplies 54094 MarVac Electronics 14.41 Superglue 54095 McMaster-Carr Supply Co. 3,787.87 Tools&Mechanical Parts&Supplies 54096 Mec Analytical System 24,362.00 Toxicity Analysis 54097 Mechanical Seal Repair, Inc. 843.54 Seal Repairs 54098 Medlin Controls Co. 2,352.87 Instrument Parts&Supplies 54099 Meriam Instruments clo Patten Corp. 209.74 Instrument Parts&Supplies 54100 Michael Asner Consulting 3,162.89 Prof.Serv.-Develop an RFP Handbook&Internal Policies&Procedures for Purchasing 54101 Mid-West Associates 15,138.88 Mechanical Parts&Supplies 54102 Midway Mfg&Machining Co. 4,650.00 Mechanical Repairs 54103 Militronics,Inc. 866.31 Instrument Parts&Supplies 54104 Minahk 596.66 Instrument Supplies 54105 Mission Abrasive&Janitorial Supplies 41.59 Janitorial Supplies 54106 Montgomery Watson 260.80 Technical Support-Emissions Modeling&Analysis 54107 Michael D.Moore 393.75 Meeting/Training Expense Reimbursement 54108 Peter M.Morrison 373.00 Meeting/Training Expense Reimbursement 54109 National Fire Protection Association 135.00 Membership 64110 National Plant Services,Inc. 16,142.50 Vacuum Truck Services 54111 Neal Supply Co. 755.33 Plumbing Supplies 54112 New Horizons CLC of Santa Ana 480.00 Human Resources&Source Control Training Registration 54113 City of Newport Beach 49.43 Water Use 54114 Ninyo&Moore Corporate Accounting 5,901.21 Professional Services-Materials Testing MO 6-24-98 54115 The Norco Companies 173.18 Mail Delivery Service 54116 Nu-Way Laser Engraving 569.40 Steel Tags 54117 O.C.Windustrial Co. 14.47 Mechanical Parts&Supplies 54118 Office Depot Business Services Div. 1,855.84 Office Supplies 54119 OhmarWEGA Corp. 10,208.03 Disposal,Testing&Coordination of Radioactive Gauges 54120 Omega Industrial Supply,Inc. 1,086.12 Janitorial Supplies 54121 OneSource Distributors, Inc. 243.14 Electrical Parts&Supplies 54122 Orange Courier 17.50 Courier Services 54123 Orange Fluid System Technologies,Inc. 96.56 Plumbing Supplies 54124 Oxygen Service Company 2,741.51 Specialty Gases 54125 OCB Reprographics 5,881.00 Printing Service-MO 1/26/00 54126 P.L.Hawn Company,Inc. 146.82 Electrical Supplies 54127 Pace Analytic Services 3,100.00 Lab Analyses of Wastewater&Biosolids 54128 Pacific Mechanical Supply 3,146.69 Pump&Mechanical Parts&Supplies 54129 Pageantry World, Inc. 770.39 American Flags 54130 Parker Hannifin Corporation 205.74 Lab Parts&Supplies 54131 Partners Consulting Services 9,240.00 FIS On-Site Support-One World XE Migration Project 54132 Patriot Video Productions 729.46 Video 54133 PenValve 1,887.02 Plumbing Parts&Supplies 54134 Pitney Bowes 344.00 Postage Machine Service Agreement 54135 Praxair,Inc. 117.00 Demurrage 54136 Precon Products 448.24 Concrete 54137 Primavera Systems,Inc. 1,750.00 Software Subscription Renewal 54138 PCS Express,Inc. 110.00 Courier Service Page 4 of 8 EXHIBIT�A , Claims Paid From 07/01/03 to 07/15/03 Warrant No. Vendor Amount Description 54139 Pump Engineering&/or QAir California 935.07 Petroleum Products&Oil 54140 R W Beck,Inc. 5,143.00 Professional Services P1-90 54141 R.L.Abbott&Associates 6,000.00 Kern County Biosolids Consulting Services 54142 Rainbow Disposal Co. 870.00 Trash Removal 54143 Regents of Univ.of California 6,236.82 Professional Services J-85 54144 Reliastar Bankers Security Life Ins. 18,803.84 Employee Life Ins.Premium,Short-Term Disability&Cancer Ins. Payroll Deductions 54145 Retrofit Parts&Components,Inc. 296.28 Mechanical Parts&Supplies 54146 Rockwell Engineering&Equipment Co. 8,399.22 Chopper Pump 54147 Rolls-Royce Energy Systems,Inc. 1,004.14 Computer Hardware/Software 54148 Ryan Herco Products Corp" 1,272.32 Mechanical Parts&Supplies 54149 RPM Electric Motors 4,217.42 Electric Motor&Motor Repair Service 54150 Safety-Kleen 500.20 Parts Washer Lease&Service 54151 Schneider Electric 8,989.76 Software Maint.Agreement 54152 Schwing America, Inc. 1,272.99 Motors 54153 Scicon Technologies Corp. 134.69 Instrument Supplies 54154 Sea-Gear Corporation 545.00 Lab Parts&Supplies 54155 Seavisual Consulting,Inc. 5,940.00 Professional Services-Ocean Outfall Instrumentation 54156 Secure Decks&Scaffolding,Inc. 600.00 On-Site Training-Hazard Awareness 54157 Shamrock Supply Co., Inc. 1,439.33 Concrete Mix 54158 Shureluck Sales&Engineering 228.35 Mechanical Parts&Supplies 54159 Sigma-Aldrich,Inc. 805.48 Lab Supplies 54160 Skalar,Inc. 2,512.45 Lab Parts&Supplies 54161 Smardan Supply Company/Orange Coast 289.23 Plumbing Supplies 54162 SoftView Computer Products 233.76 Small Computer Supplies 54163 SoftChoice 4,043.28 Software 54164 Spex Certiprep, Inc. 124.81 Lab Supplies 54165 Stanley Pest Control 100.00 Pest Control-I.T.Trailers 54166 Summit Steel 998.11 Metal 54167 Sunset Industrial Parts 3,118.75 Mechanical Parts&Supplies 54168 Systime Computer Corp 4,885.00 Professional Services-J D Edwards One World XE Implementation 54169 SBC 71.32 Telephone Services 54170 SC Field Technical Services 7.342.32 Horizontal Flame Arresters 54171 South Coast Environmental Co. 4,942.87 Emissions Testing-Pit. 1 Bioscrubber 54172 SETAC 750.00 Publishing Charges 54173 SPX Valves&Control 5,188.17 Valves 54174 Tamara Block 346.75 Reconciliation User Fee Refund Program 54175 Teletrac, Inc. 490.00 Monthly Air-Time Service Fee&Software/Hardware Maint.For Vehicle Tracking Sys. 54176 Textile Engineering Associates 17,470.00 Belt Press Supplies 54177 The Procurement Connection,Inc. 75.50 Publication 54178 The Walking Man, Inc. 350.00 Printing&Distribution of Door Hangers for Public Outreach-Bushard Project 54179 Thompson Industrial Supply,Inc. 909.68 Mechanical Parts&Supplies 54180 Jonathan K.Thomsic 160.00 Membership 54181 ThyssenKrupp Elevator 1,160.00 Elevator Maintenance 54182 Times Community News 56.25 Notices&Ads 54183 Todd Painting, Inc. 4,784.92 Painting Services 54184 Toshiba International Corporation 277.75 Electrical Supplies 54185 Townsend Public Affairs 5,000.00 Legislative Advocate-Grant Funding 54186 Southern California Trane Service 991.36 Electrical Parts&Supplies 54187 Tranter PHE,Inc. 10,972.06 Mechanical Repairs 54188 Tri-State Seminar On-the-River 585.00 O&M Meeting Registration Page 5 of 8 EXHIBIT A Claims Paid From 07/01/03 to 07/16/03 Warrant No. Vendor Amount Description 54189 Tropical Plaza Nursery,Inc. 19,195.95 Contract Groundskeeping MO 5-11-94 54190 Truck&Auto Supply, Inc. 88.26 Automotive Supplies 54191 Truesdail Laboratories,Inc. 1,970.00 Analysis of Biosolids and Wastewater 54192 US Filter Corporation 3,523.80 Installation of Carbon Filter-Scrubber 10 54193 U.S.Metro Group,Inc. 24,785.00 Janitorial&Floor Maintenance at Plants 1 &2 54194 Ultra Scientific 856.25 Lab Parts&Supplies 54195 United Parcel Service 2,203.11 Parcel Services 54196 Univar USA 668.06 Chlorine 54197 U-Line 1,291.70 Mechanical Parts&Supplies 54198 US Equipment Co.,Inc. 2,538.97 Filters 54199 Vallen Safety Supply Company 3,335.83 Safety Supplies 54200 Vapex, Inc. 5,504.00 Instrument Parts&Supplies 54201 Varian Associates,Inc. 319.50 Lab Parts&Supplies 54202 Verizon California 102.92 Telephone Services 54203 Verne's Plumbing 1,275.00 Service Contract-Testing&Cert. Backflow Devices at Pits. 1 &2&Pump Sta. 54204 VWR Scientific Products Corporation 5,577.47 Lab Parts&Supplies 54205 The Wackenhut Corporation 9.588.05 Security Guards 54206 Waco Filter 131.94 Filters 54207 Waters Corporation 5,112.85 Lab Parts&Supplies 54208 Simon L.Watson 892.47 Meeting/Training Expense Reimbursement 54209 Waxie Sanitary Supply 56.01 Janitorial Supplies 54210 Webster Environmental Associates, Inc. 23,303.75 Professional Services-Oxygen Ionization Study 54211 West Marine/E&B Discount Marine 17.09 Instrument Parts 54212 Wilson Supply,Inc. 711.65 Mechanical Parts&Supplies&Piping 54213 Watson Wyatt Data Services 399.00 Publication 54214 WEF-Registration Dept. 695.00 Source Control Meeting Registration 54215 WEF 170.00 Membership-Water Environment Federation 54216 WEFTEC 2,830.00 O&M Meeting Registration 54217 Xerox Corporation 13,541.71 Fax&Copier Leases&Supplies 54218 Zee Medical 331.72 First Aid Supplies 54219 Zeta-Meter,Inc. 2,031.80 Meter Rental 54220 Catherine M.Biete 211.66 Meeting/Training Expense Reimbursement 54221 Steven R. DeWilde 153.72 Meeting/Training Expense Reimbursement 54222 Charles G.Lee 837.90 Meeting/Training Expense Reimbursement 54223 James C.Mullins 500.48 Meeting/Training Expense Reimbursement 54224 Richard E.Schlegel,Jr. 333.82 Meeting/Training Expense Reimbursement 54225 California Municipal Treasurers Assoc. 46.00 Accounting Meeting Registration 54226 County of Orange-Auditor Controller 285.00 Sewer Service Fee Administration 64227 Elo,Jim and Dell Computers 2,225.33 Employee Computer Loan Program 54228 Kienow Associates,Inc. 23,477.30 Legal Services 1-2-4 54229 The National Purchasing Institute 300.00 Application Fee-2003 Achievement of Excellence in Procurement Award 54230 Orange County Sanitation District 1,259.57 Petty Cash Reimb. 54231 Mid-West Associates 35,056.46 (3)Pumps 54232 Orange County Sanitation District 531,699.75 Payroll EFT Reimbursement 54233 Orange County Water District 57,392.44 GAP Water Use MO 10-23-96 54234 Orange County Sanitation District 34,314.54 Worker's Comp.Reimb. 54235 Airgas Safety 7,228.79 Safety Supplies 54236 American Telephone&Telegraph Corp. 36.32 Telephone Service i 54237 AT&T Wireless Services-Airtime 78.64 Wireless Services 54238 Bogaty Stella 803.53 User Fee Refund Re Septic Tanks Page 6 of 8 EXHIBITX Claims Paid From 07/01/03 to 07/15/03 Warrant No. Vendor Amount Description 54239 Brodsky,Jacqueline J TR 557.29 User Fee Refund Re Septic Tanks 54240 Cervantes,Richard 4,976.54 User Fee Refund Re Septic Tanks 54241 Court Order 150.00 Wage Garnishment 54242 Compressor Components Of California 1,248.00 Coil Cleaning,Testing&Rebuild 54243 Consolidated Elect.Distributors,Inc. 297.29 Electrical Supplies 54244 Consumers Pipe&Supply Co. 8.94 Plumbing Supplies 54245 County Sanitation of Los Angeles,District 70 4,930.00 Olfactometry Lab Expense 54246 Court Trustee 69.12 Wage Garnishment 54247 CASA 10,375.00 Legal Services-Biosolids Pledge Contribution&Technical Serv.Meeting Registration 54248 Employee Benefits Specialists,Inc. 7,943.20 Reimbursed Prepaid Employee Medical&Dependent Care 54249 Enderby,Osborne 165.69 User Fee Refund Re Septic Tanks 54250 Court Order 525.00 Wage Garnishment 54251 Fountain Valley Rancho Hand Wash 1,292.55 Truck Wash Tickets 54252 Franchise Tax Board 100.00 Wage Garnishment 54253 Garcia,Joe or Avalon 165.69 User Fee Refund Re Septic Tanks 54254 Hertfelder,Paul 1,278.39 User Fee Refund Re Septic Tanks 54255 Internal Revenue Service 325.00 Wage Garnishment 54256 Intl.Union of Oper.Eng.AFL-CIO Local 501 3,301.68 Dues Deduction 54257 John Mitchell 1,591.06 User Fee Refund Re Septic Tanks 54258 Jones,Charlene 165.69 User Fee Refund Re Septic Tanks 54259 Keith Boger 495.00 0&M Training Registration 54260 Kowitz,Vernon or Fay 2,164.36 User Fee Refund Re Septic Tanks 54261 Kreutzkamp,Helen TR 165.69 User Fee Refund Re Septic Tanks 54262 Lucci's Gourmet Foods, Inc. 285.43 Meeting Expense 54263 Martinson,Steve 82.04 User Fee Refund Re Septic Tanks 54264 McCabe,William 165.69 User Fee Refund Re Septic Tanks 54265 McMaster-Carr Supply Co. 521.63 Mechanical Parts&Supplies 54266 Moore,Melinda 165.69 User Fee Refund Re Septic Tanks 54267 Munoz,Rebecca 1,522.57 User Fee Refund Re Septic Tanks 54268 National Bond&Trust 2,148.34 U.S.Savings Bonds Payroll Deductions 54269 National Notary Association 45.00 Membership 54270 Nextel Communications 3,666.93 Wireless Services 54271 OCEA 524.61 Dues Deduction 54272 Court Order 40.00 Wage Garnishment 54273 Court Order 296.00 Wage Garnishment 54274 Peace Officers Council of CA 1,503.00 Dues Deduction 54275 Perino,Richard 160.33 User Fee Refund Re Septic Tanks 54276 Poulin,Lamora or Roger 1,113.17 User Fee Refund Re Septic Tanks 54277 Riviera,Robert,Jr. 886.79 User Fee Refund Re Septic Tanks 54278 Smith,Dean or Joyce 160.33 User Fee Refund Re Septic Tanks 54279 Court Order 721.50 Wage Garnishment 54280 Southern California Edison 8,965.52 Power 54281 Southern California Material Handling 20,901.35 Caterpillar Industrial Forklift 54282 Southern California Water 73.13 Water Use 54283 Summit Steel 840.76 Metal 54284 SCWMF 25.00 Membership-(Southern California Waste Management Forum) 54285 Thompson Industrial Supply,Inc. 392.52 Motor 54286 U.S.Postal Service 220.00 P.O.Box Service Fee 54287 The Unisource Corporation 1,036.87 Office Supplies 54288 United Way 305.00 Employee Contributions Page 7 of 8 EXHIBIT A Claims Paid From 07/01/03 to 07/15/03 Warrant No. Vendor Amount Description 54289 UCI Foundation 5,000.00 Contribution-Urban Water Research Center 54290 Valverde Construction,Inc. 18,405.89 Road Subsidence Repair-City of Tustin 54291 Verizon California 760.48 Telephone Services 54292 Virus,Dale or Marlene 1,438.86 User Fee Refund Re Septic Tanks 54293 Young,Frances 82.04 User Fee Refund Re Septic Tanks 54294 Terry H.Ahn 1,173.10 Meeting/Training Expense Reimbursement 54295 Shabbir S.Basrai 640.00 Meeting/Training Expense Reimbursement 54296 Vladimir A.Kogan 1,093.06 Meeting/Training Expense Reimbursement 54297 Douglas M.Stewart 1,460.00 Meetingfrraining Expense Reimbursement 54298 Edward M.Torres 889.34 Meeting/Training Expense Reimbursement 54299 Simon L.Watson 819.29 Meeting/Training Expense Reimbursement Total Accounts Payable-Warrants $ 9,616,008.80 Payroll Disbursements 30318-30434 Employee Paychecks $ 150,332.58 Biweekly Payroll 07/09/03 87016-87509 Direct Deposit Statements 859,785.03 Biweekly Payroll 07/09/03 Total Payroll Disbursements $ 1,010,117.61 Wire Transfer Payments JP Morgan Chase Bank $ 129,463.93 Societe Generale June Swap Payment on 1993 Certificates of Participation JP Morgan Chase Bank 33,284.54 June Interest Payment on 1993 Certificates of Participation Total Wire Transfer Payments $ 162,748.47 Total Claims Paid 07101/03-07/15/03 $ 10,788,874.88 Page 8 of 8 EXHIBITk �y G Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description Accounts Payable-Warrants 54300 Carollo Engineers $ 474,840.57 Engineering Services P2-66 54301 CPEIA 160,685.00 Excess Worker's Compensation Insurance 54302 Dell Direct Sales,L.P. 28,503.11 (16)Computers,(4)Printers,(1)Tape Drive 54303 Delta Dental 55,092.38 Dental Insurance Plan 54304 Edwin M.Perkins 30,094.00 Professional Service -Water Quality Compliance 54305 Insight Investments 37,928.00 Computer File Server 54306 Insituform Technologies,Inc. 457,976.87 Construction 5-29-R1 54307 Kaiser Foundation Health Plan 50,107.11 Medical Insurance Premium 54308 Kemiron Pacific,Inc. 332,753.95 Ferric Chloride MO 11/20/02 54309 Lindell Marsh 31,580.00 Professional Services-Coastal Plain Initiative 54310 Municipal Water Dist.of Orange County 42,521.62 Water Use Efficiency Program MO 4/25101 54311 Pioneer Americas,Inc. 265,719.38 Sodium Hypochlorite 54312 Science Applications Intl.,Corp. 27,932.74 Ocean Monitoring P1-85 54313 Steve P. Rados,Inc. 476,091.90 Construction 1-2-4 54314 Synagro Technologies, Inc. 324,107.38 Residuals Removal MO 3-29-95 54315 SPX Valves&Control 34,557.58 Valve&Actuator Controls 54316 Tule Ranch/Magan Farms 141,110.78 Residuals Removal MO 3-29-95 54317 U.S.Peroxide 52,527.38 Hydrogen Peroxide 54318 Union Bank of California 52,899.10 Construction 1-2-4,Retention 54319 Driver Alliant Insurance Service,Inc. 265,440.72 Excess Municipal Liability Insurance 54320 Driver Alliant Insurance Service, Inc. 89,676.00 Boiler&Machinery Insurance 54321 Driver Alliant Insurance Service, Inc. 716,494.00 All-Risk Property&Fire Insurance 54322 eSysTek 2,040.00 Software Support 54323 Great American Printing Co. 1,800.74 Stationery&Office Supplies 54324 Airborne Express 135.12 Air Freight 54325 Airgas-West 540.91 Specialty Gases 54326 Airgas Safety 1,583.59 Safety Supplies 54327 American Public Works Association 475.00 O&M Meeting Registration 54328 Aquatic Bioassay And Consulting Labs, Inc. 1,690.00 Toxicity Testing 54329 Arch Wireless 1,189.96 Air Time,Service&Equipment 54330 Ashbrook Corporation 977.12 Mechanical Parts&Supplies 54331 Atlantis Pool Care 250.00 Service Agreement-Admin. Bldg.Atrium 54332 ACS Hydraulics,Inc. 933.04 Mechanical Repairs 54333 AKM Consulting Engineers 5,145.34 Professional Services 7-36&7-39 54334 American Telephone&Telegraph Corp. 73.45 Telephone Service 54335 AWSI 166.00 Department of Transportation Training Program 54336 Baker Tanks 8,418.89 Tank Rentals 54337 Bar Tech Telecom,Incorporated 6,567.58 Telephone Parts&Supplies 54338 Basic Chemical Solutions 23,219.77 Sodium Bisulfite 54339 Bell Land Surveying 4,851.65 Professional Surveying Services-Various Capital Projects 54340 BioMerieux Vitek, Inc. 940.86 Lab Supplies 54341 Black&Veatch Corporation 19,031.93 Engineering Services P1-76 54342 Brenton Safety, Inc. 1,031.61 Safety Supplies 54343 Rebecca A. Brooks 122.00 Meeting/Training Expense Reimbursement 54344 Cal-Glass,Inc. 88.36 Lab Parts&Supplies 54345 California Auto Collision 1,333.40 Automotive Repairs V449 i 54346 Califomia Automatic Gate 673.94 Automatic Gate Maintenance Page 1 of 13 EXHIBIT B Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54347 California Barricade Rentals 425.00 Barricade Rentals 54348 California Relocation Services, Inc. 236.25 Office Moving/Relocation Services 54349 Carl Warren&Co. 144.62 Insurance Claims Administrator 54350 Imaging Express 130.00 Printer Service Agreement 54351 Coast Fire Equipment 700.00 Fire Extinguisher Testing,Recharging&Certification at Plants 1 &2 54352 Cole-Parmer Instrument Co. 356.75 Lab Parts&Supplies 54353 Computer Protection Technology,Inc. 1,521.12 Computer Maintenance 54354 Compuware Corporation-Numega Lab 1,858.69 Software 54355 Consolidated Elect. Distributors, Inc. 1,294.34 Electrical Supplies 54356 Consolidated Plastics Company 240.90 Lab Parts&Supplies 54357 Consumers Pipe&Supply Co. 46.72 Plumbing Supplies 54358 Cooper Energy Services 46.17 Mechanical Parts&Supplies 54359 Corporate Express 6,097.59 Office Supplies 54360 Cortech Engineering 5,887.92 Pump&Pump Supplies 54361 County of Orange-Auditor Controller 132.00 Maint.Agreement-Repair/Installation of Base, Handheld&Vehicle Radios 54362 County of Ventura 14,274.00 Information Technology Conference Registration with Gartner, Inc. 54363 County Wholesale Electric Co. 112.55 Electrical Parts&Supplies 54364 Culligan of Orange County 37.50 Maint.Agreement-Cen Gen Water Softener System 54365 Cytec Industries 18,017.67 Anionic Polymer Spec.No.9798-18 54366 CCP Industries 4,483.48 Janitorial Supplies 54367 CR&R, Inc. 2,520.00 Container Rentals 54368 Voided Check - - 54369 Dapper Tire Co. 587.95 Truck Tires 54370 David Kirby Company 1,110.00 Installation of(12)Shower Curtains&Rods at Control Center 54371 David's Tree Service 1,000.00 Tree Maint.Service 54372 Del Mar Analytical 306.00 Analysis of Biosolids and Wastewater 54373 Delta Packaging Products,Inc. 149.64 Lab Parts&Supplies 54374 Diamond H Recognition 271.60 Employee Service Awards 54375 Direct Midrange Systems, Inc. 11,992.68 Instrument Parts&Supplies 54376 Dorr-Oliver EIMCO USA, Inc. 2,500.00 Mechanical Repairs 54377 DGA Consultants,Inc. 6,296.25 Professional Services-CCTV Data Evaluation&Support 54378 DTSC 563.00 Hazardous Waste Fee(Dept.of Toxic Substances Control) 54379 Ecology Control Industries 15,546.96 Hazardous Waste Services 54380 Employers Group Service Corp. 1,000.00 On-Site Training-Stress Management 54381 Enchanter,Inc. 2.700.00 Ocean Monitoring MO 5-24-95 54382 Engis Corporation 59.22 Lab Parts&Supplies 54383 Environmental Resource Association 5,432.80 Lab Parts&Supplies 54384 EverReady Thermometer Co., Inc. 322.79 Lab Parts&Supplies 54385 Fed Ex Corporation 72.74 Air Freight 54386 First American Real Estate Solutions 647.50 Orange County Property Information 54387 Fisher Scientific Company,L.L.C. 3,116.67 Lab Parts&Supplies 54388 Flat and Vertical, Inc. 341.50 Concrete Cutting 54389 Foodcraft Coffee&Refreshment Services 69.39 Meeting Supplies 54390 Franklin Covey 210.02 Office Supplies 54391 Fry's Electronics 1,465.73 Computer Supplies 54392 G.T. Hall Company 483.52 Electrical Parts&Supplies 54393 Gates Fiberglass Installers 2,423.23 Fiberglass Installation 1 54394 General Petroleum 23,985.54 Lubricants/Oil Page 2 of 13 EXHIBIT `' r- o Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54395 Getinge Castle 532.00 Lab Maintenance 54396 Gierlich-Mitchell, Inc. 1,777.88 Mechanical Parts&Supplies 54397 Golden Bell Products 4,176.00 Contractual Services-Insecticide Coating of Manholes 54398 Governor Control Systems,Inc. 7,375.00 On-Site Training 54399 Graybar Electric Company 6,814.38 Software/Hardware 54400 Guarantee Records Management 89.73 Off-Site Records Storage 54401 GRA 315.00 Lab Meeting Registration (Groundwater Resources Assoc.) 54402 Haaker Equipment Company 100.14 Mechanical Parts&Supplies 54403 Harold Primrose Ice 55.50 Ice For Samples 54404 Ascom Hasler Mailing Systems 34.72 Software Maintenance-Mail Manager Intellitouch System&Meter Rental 54405 Home Depot 552.07 Misc.Repair&Maintenance Material 54406 Hub Auto Supply 177.82 Vehicle Parts&Supplies 54407 IDEXX Laboratories, Inc. 1.422.30 Lab Parts&Supplies 54408 Impulse 510.89 Lab Parts&Supplies 54409 Industrial Distribution Group 5,556.66 Mechanical Parts&Supplies 54410 Industrial Hearing&Pulmonary Mgmt. 6,404.00 On-Site Pulmonary&Audiometric Testing 54411 Information Resources 125.00 Human Resources Service-Background Checks 54412 Roto Rooter 10,266.30 CCTV Videoing of Trunkline Sewers 54413 Intelligence Press, Inc. 1,295.00 Subscription 54414 Interstate Battery Systems 135.66 Batteries 54415 Intratek Computer,Inc. 5,940.00 Network&Server Maintenance 54416 Invensys Systems, Inc. 453.19 Instrument Supplies 54417 Iron Mountain Off-Site Data Protection 234.00 Offsite Back-Up Tape Storage for NT Server 54418 Irvine Ranch Water District 6.00 Water Use 54419 J.G.Tucker and Son,Inc. 1,372.64 Instrument Parts&Supplies 54420 Jay's Catering 740.06 Meeting Expenses 54421 Johnson Ukropina 3.107.55 Notices&Ads 54422 Johnstone Supply 844.61 Electrical&Mechanical Supplies 54423 K.P.Lindstrom,Inc. 5,185.00 Environmental Consulting Services MO 12-9-90 54424 Kett US 19,157.95 6-Month Lease&Purchase of Moisture Analyzer 54425 Lifecom-Safety,Inc. 45.00 Instrument Calibration&Certification 54426 Lucci's Gourmet Foods, Inc. 81.25 Meeting Expense 54427 LA Chemical 4,262.55 Caustic Soda 54428 Maintenance Technology Corp. 1,209.90 Mechanical Supplies 54429 Malcolm Pirnie, Inc. 18,838.91 Professional Services 1-10 54430 Manatt,Phelps&Phillips,L.L.P. 5,000.00 Strategic Planning&Advocacy 54431 Marden Susco, Inc. 3,831.86 Valve 54432 McBain Instruments 102.74 Microscope Repair Service 54433 McMaster-Carr Supply Co. 363.56 Mechanical Parts&Supplies 54434 Mec Analytical System 18,740.00 Toxicity Analysis 54435 Medlin Controls Co. 981.67 Instrument Supplies 54436 Mellon Trust 20,708.76 Investment Custodian Bank 54437 Mariam Instruments c/o Patten Corp. 5.74 Freight 54438 Michael Asner Consulting 3,075.00 Professional Services-Purchasing Standard&Procedures Manual 54439 Michael Turnipseed&Associates 3,372.50 Professional Service-Tule Ranch&Yakima Sites Study 54440 Midway Mfg.&Machining Co. 15,600.00 Mechanical Parts,Repairs&Supplies 54441 Mission Abrasive&Janitorial Supplies 4,310.00 Mechanical Parts&Supplies 1 54442 Moreland&Associates 9,288.83 Auditing Services MO 3-8-95 Page 3 of 13 EXHIBIT B Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54443 MS Abrasive Cleaning Equipment, Inc. 678.21 Mechanical Parts&Supplies 54444 Neal Supply Co. 922.73 Plumbing Supplies 54445 NetVersant of Southern California 3,558.34 Security System&CCTV,Software Maintenance 54446 New Horizons CLC of Santa Ana 365.00 Source Control Training Registration 54447 City of Newport Beach 25.24 Water Use 54448 Norlab 189,60 Chemicals 54449 Office Depot Business Services Div. 891.21 Office Supplies 54450 OneSource Distributors,Inc. 188.42 Electrical Parts&Supplies 54451 Orange County Hose Company 556.67 Hose Supplies&Repairs 54452 Orange Courier 129.50 Courier Services 54453 Osterbauer Compressor 240.59 Compressor Service&Parts 54454 Oxygen Service Company 1,715,26 Specialty Gases 54455 OCB Reprographics 2,385.30 Printing Service-MO 1/26/00 54456 P.L. Hawn Company, Inc. 51.57 Electrical Supplies 54457 Pacific Bell Internet Services 324.00 Internet Service 54458 Pacific Mechanical Supply 359.69 Plumbing Supplies 54459 Paramount Fabricators 6,070.92 Fabrication Service 54460 Parker Supply Company 1,910.71 Mechanical Seal Repairs 54461 Parsons Infrastructure&Tech.Group 6,604.53 Professional Services-Strategic Planning Concepts,Tools&EMT Retreat 54462 Partners Consulting Services 16,560.00 FIS On-Site Support-One World XE Migration Project 54463 Parts Unlimited 121.68 Automotive Parts 54464 Peerless Wiping Materials Co. 560.30 Janitorial Supplies 54465 Hach c/o Ponton Industries 1,960.50 Lab Parts&Supplies 54466 Power Electro Supply Co., Inc. 824.29 Electrical Supplies 54467 Pre-Paid Legal Services,Inc. 478.40 Employee Legal Service Insurance Premium 54468 Pricewaterhouse Coopers, L.L.P. 5,000.00 Forensic Hard Drive Imaging 54469 Primary Source Office Furnishings, Inc. 5,605.24 Office Furniture 54470 Protech Petroleum Services,Inc. 10,755.25 Secondary Containment Repairs 54471 Pump Engineering 2,232.70 Pump&Pump Supplies 54472 PVF Sales, Inc. 6.82 Plumbing Supplies 54473 R.Fox Construction, Inc. 7,400.00 Construction-Power Building Drain Improvement 54474 Rainbow Disposal Co. 2,698.59 Trash Removal 54475 Realtime Systems Corporation 62.50 Professional Software Revision Services 54476 Restek Corp 126.78 Lab Parts&Supplies 54477 Rockwell Automation-Entek 8,416.94 Software 54478 RMS Engineering&Design, Inc. 2,850.00 Engineering Services J-89 54479 RPM Electric Motors 429.92 Motor 54480 Sancon Engineering, Inc. 10,952.50 Construction-Sump Pump Addition to Air Jumper&Manhole Rehabilitation 54481 Santa Ana Watershed Coalition 75.00 Technical Services Meeting Registration 54482 Schwing America,Inc. 6,549.06 Pump Supplies 54483 Scottel Voice&Data Inc. 2,284.80 Telephone System Maintenance 54484 Sewer Equipment Co.of Florida, Inc. 249.68 Flexible Hose 54485 Shasta Electric,L.P. 15.334.00 Construction-Rebuild Shop Equipment Electric Power Installation 54486 Sigma Chemical Co. 141.25 Lab Parts&Supplies 54487 Skalar,Inc. 276.51 Instrument Repairs&Maintenance 54488 So.Cal.Gas Company 24,398.04 Natural Gas 54489 SoftChoice Corp. 9,597.94 Software i 54490 Southern California Edison 2,222.76 Power Page 4 of 13 EXHIBIT �' p' s Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54491 Southwest Concrete 461.82 Concrete 54492 Sparkletts 1,980.60 Drinking Water/Cooler Rentals 54493 Spex Certiprep, Inc. 281.16 Lab Parts&Supplies 54494 State Board of Equalization 231.65 Underground Petroleum Storage Tank Fee 54495 Strata International, Inc. 505.46 Chemicals 54496 Summit Steel 102.36 Metal 54497 SUN-SRI 184.93 Lab Parts&Supplies 54498 Sunset Ford 83.75 Automotive Parts&Services 54499 Sunset Industrial Parts 187.49 Mechanical Supplies 54500 Super Power Products 775.80 Janitorial Supplies 54501 Symcas-TSG 1.384.18 SCADA System VAX Service Agreement 54502 SC Field Technical Services 6,636.76 Varec Horizontal Flame Arresters 54503 Solar Turbines,Inc. 673.00 Professional Services-Troubleshoot Controls for Pit. 1 Blowers 54504 Taylor-Dunn 88.79 Electric Cart Parts 54505 Terminix International Co. 830.00 Pest Control 54506 Tetra Tech,Inc. 14,814.00 Professional Services 7-37 54507 The Nature Conservancy 25.00 Membership 54508 The Walking Man,Inc. 1,100.00 Door Hanger Printing&Distribution Services 54509 Thermo Finnigan, L.L.C. 816.55 Lab Parts&Supplies 54510 Thompson Industrial Supply, Inc. 3,965.87 Mechanical Supplies 54511 Townsend Public Affairs 5,000.00 Legislative&Executive Advocate for Grant Funding 54512 Tri-State Seminar On-the-River 360.00 0&M and Safety Meeting&Training Registration 54513 Tropical Plaza Nursery,Inc. 420.00 Contract Groundskeeping MO 5-11-94 54514 Truck&Auto Supply, Inc. 42.14 Automotive Supplies 54515 Truesdell Laboratories,Inc. 50.00 Analysis of Biosolids 54516 Tyco Valves&Controls, L.P. 4,294.19 Valves 54517 US Filter Corporation 1,159.00 Service Agreement-Lab Purification System 54518 United Parcel Service 68.93 Parcel Services 54519 Defense Finance and Accounting 7,856.24 Professional Services J-85-Naval Post Graduate School 54520 Unity Constructors 6,312.60 Construction 7-14-4 54521 Verizon California 2,388.30 Telephone Services 54522 Verne's Plumbing 150.00 Service Contract-Testing&Cert. Backflow Devices at Pits.1 &2&Pump Sta. 54523 Villa Ford 13,262.95 (1)Year Lease of(3)Electric E--Ranger Trucks 54524 Vision Service Plan-(CA) 8.940.48 Vision Service Premium 54525 Voice Report 298.00 Subscription 54526 VWR Scientific Products Corporation 3,209.17 Lab Parts&Supplies 54527 The Wackenhut Corporation 18,094.59 Security Guards 54528 Waco Filter 63.63 Air Filters 54529 Wally Machinery and Tool Supply,Inc. 452.87 Instrument Parts&Supplies 54530 Wastewater Technology Trainers 1,790.00 0&M Training Registration 54531 Water 3 Engineering,Inc. 8,901.63 Engineering Service J-67 54532 Waters Corporation 748.49 Lab Parts&Supplies 54533 Westport Aparatus DBA Breaker Supply 1,842.55 Lab Parts&Supplies 54534 Wilson Supply,Inc. 68.96 Mechanical Parts&Supplies 54535 WorldatWork 195.00 Membership 54536 Watson Wyatt Data Services 399.00 Publication 54537 WEF-Registration Dept. 125.00 Compliance Meeting Registration i 54538 WEF 984.00 Membership-Water Environment Federation Page 5 of 13 EXHIBIT 8 Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54539 WEFTEC 695.00 Source Control Training Registration 54540 Xerox Corporation 9,658.81 Fax&Copier Leases&Supplies 54541 Michele Farmer 154.50 Meeting/Training Expense Reimbursement 54542 Mark H.Kawamoto 590.00 Meeting/Training Expense Reimbursement 54543 Michael J. McCusker 156.80 Meeting/Training Expense Reimbursement 54544 Ken H.Wong 285.00 MeetingfTraining Expense Reimbursement 54545 American Public Works Association 1,170.00 O&M and Mechanical Maintenance Meeting Registration 54546 Bell,Robert and Dell Computer Corp. 178.90 Employee Computer Loan Program 54547 Bell,Robert and Fry's Computer 1,696.90 Employee Computer Loan Program 54548 Bell,Robert and NexCom 639.90 Employee Computer Loan Program 54549 HealthFax, Inc. 1,412.50 Employee Health Fair 54550 Orange County Sanitation District 1,118.15 Petty Cash Reimb. 54551 Reliability Center,Inc. 2,985.00 Mechanical Maintenance Meeting Registration 54552 American Express 37,319.57 Purchasing Card Program,Misc.Supplies&Services 54553 Ballantyne,Inc. 54,723.00 Temporary Employment Services 54554 Green Giant Landscape,Inc. 44,418.13 Construction P2-84 54555 Kforce Professional Staffing 35,296.85 Temporary Employment Services 54556 Orange County Sanitation District 543,479.88 Payroll EFT Reimbursement 54557 Southern California Edison 120,718.28 Power 54558 State Board Of Equalization 49,407.00 Sales Tax Return 54559 Systime Computer Corp. 28,700.00 Professional Services-J D Edwards One World XE Implementation 54560 Teksystems 29,840.00 Temporary Employment Services 54561 The Vantage Group, L.L.C. 25,080.00 Temporary Employment Service 54562 Airgas Safety 9.523.16 Safety Supplies 54563 American Airlines 3,103.00 Travel Services 54564 Appleone Employment Service 5,533.73 Temporary Employment Services 54565 American Telephone&Telegraph Corp. 167.85 Telephone Service 54566 Carollo Engineers 10,225.00 Professional Services-Public Survey Re User Fees 54567 Court Order 150.00 Wage Garnishment 54568 Communications Supply Corp. 182.46 Electrical Parts&Supplies 54569 Consumers Pipe&Supply Co. 624.72 Plumbing Supplies 54570 Court Trustee 69.12 Wage Garnishment 54571 CASA 375.00 Administration Meeting Registration 54572 California Special Districts Association 750.00 Human Resources Training Registration 54573 Employee Benefits Specialists,Inc. 7,943.20 Reimbursed&Prepaid Medical&Dependent Care 54574 Court Order 525.00 Wage Garnishment 54575 Franchise Tax Board 100.00 Wage Garnishment 54576 Human Resource Executive 94.95 Subscription 54577 Internal Revenue Service 275.00 Wage Garnishment 54578 Internal Revenue Service 150.00 Wage Garnishment 54579 Intl.Union of Oper.Eng.AFL-CIO Local 501 3,288.99 Dues Deduction 54580 Irvine Ranch Water District 61.85 Water Use 54581 Irvine Technology Corporation 10,948.00 Temporary Employment Services 54582 IOMA,Inc. 235.63 Subscription 54583 Keith Boger 795.00 0&M Training Registration 54584 Lab Support 3,589.76 Temporary Employment Services 54585 Lorman Education Services 518.00 Safety&Emergency Response Meeting Registration 54586 LINJER 8,845,85 Professional Service-DART MO 9-22-99 Page 6 of 13 EXHIBI?b �� Q" P Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54587 National Bond&Trust 2,136.80 U.S.Savings Bonds Payroll Deductions 54588 NetVersant of Southern California 5,376.14 Security System Camera Upgrade 54589 Orange Fluid System Technologies,Inc. 95.29 Plumbing Supplies 54590 OCEA 524.61 Dues Deduction 54591 Pacific Bell/WorldCom 16.08 Telephone Service 54592 Court Order 40.00 Wage Garnishment 54593 Partners Consulting Services 9,000.00 FIS On-Site Support-One World XE Migration Project 54594 Court Order 296.00 Wage Garnishment 54595 Peace Officers Council of CA 1,503.00 Dues Deduction 54596 PenValve 14.41 Mechanical Parts&Supplies 54597 Pixelpushers, Inc. 5,750.00 Temporary Employment Services 54598 Projects Partners 4,252.96 Temporary Employment Services 54599 PVF Sales,Inc. 575.28 Plumbing Parts&Supplies 54600 Reliastar 9,421.05 Employee Basic Life Insurance 54601 RemedyTemp, Inc. 7,549.77 Temporary Employment Services 54602 Terri L. Roberts 21.36 OCER Withholding Refund 54603 Court Order 721.50 Wage Garnishment 54604 Snap On Industrial 1,457.09 Lab Parts&Supplies&Tools 54605 Snap-On Tools,Inc. 90.99 Tools 54606 So.Cal.Gas Company 3,765.69 Natural Gas 54607 SBC 32.58 Telephone Services 54608 Thompson Industrial Supply, Inc. 782.70 Mechanical Supplies&Motor 54609 United Way 305.00 Employee Contributions 54610 UC Regents 1,090.00 Human Resources Training Registration 54611 Verizon California 2,994.15 Telephone Services 54612 VWR Scientific Products Corporation 1,995.07 Lab Supplies 54613 WEF-Registration Dept. 125.00 Compliance Meeting Registration 54614 WS Atkins Water 11,000.00 Professional Services SP-90 54615 Moyasar T.Yahya 5.89 OCERS Withholding Refund 54616 Chris A.Cervellone 1,019.45 Meeting/Training Expense Reimbursement 54617 Keith W.Criscuolo 170.00 Meeting/Training Expense Reimbursement 54618 James E.Hauler 110.00 Meeting/Training Expense Reimbursement 54619 Deirdre E. Hunter 123.74 MeetinglTraining Expense Reimbursement 54620 James W.Matte 892.38 MeetinglTraining Expense Reimbursement 54621 Michael D.Moore 195.53 Meeting/Training Expense Reimbursement 54622 Robert J.Taylor 2,325.31 MeetinglTraining Expense Reimbursement 54623 Driver Alliant Insurance Service,Inc. 124,523.43 Excess Municipal Liability Insurance 54624 Basic Chemical Solutions 25,491.85 Sodium Bisulfite 54625 Black&Veatch Corporation 75,543.23 Engineering Services J-77,J-71-3,J-87&P2-85 54626 Brown&Caldwell 177,982.83 Prof.Serv.-O&M Manual&SOP Development&CMOM/WDR 54627 Carollo Engineers 245,148.68 Professional Services J-25-4 54628 Fortis Benefits Insurance Company 42,412.72 Long-Term&Short-Term Disability Ins. Premium 54629 Grand Coast Resorts,L.L.C. 34,252.25 Reconciliation User Fee Refund Program 54630 Haaker Equipment Company 34,457.65 Refurbishment of Vactor-V-374 54631 IPMC c/o Parsons 602,379.00 Professional Services-Program Project Management 54632 Kemiron Pacific,Inc. 112,959.59 Ferric Chloride MO 9-27-95 54633 Kforce Professional Staffing 42,706.69 Temporary Employment Services 54634 Lee&Ro,Inc. 29,556.62 Professional Services 5-49,5-50,5-51 &5-62 Page 7 of 13 EXHIBIT B Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54635 Municipal Water Dist.of Orange County 92,921.77 Water Use Efficiency Program MO 9-22-99 54636 Pacific Investment Management Co. 145,647.00 Investment Management Service Res.95-97 54637 Pioneer Americas,Inc. 183,658.59 Sodium Hypochlorite 54638 Polydyne,Inc. 98,779.76 Cationic Polymer MO 3-11-92 54639 Projects Partners 30,754.21 Temporary Employment Services 54640 Southern Calif Coastal Water Research 35,000.00 Professional Services-Ocean Monitoring Report 54641 Tule Ranch/Magan Farms 181,649.51 Residuals Removal MO 3-29-95 54642 Teksystems 25,168.00 Temporary Employment Services 54643 U:S. Peroxide 253,321.05 Prof.Serv_-Odor&Corrosion Control Chem.Add. Demo.Study&Hydrogen Peroxide 54644 Waste Markets Corp. 73,188.73 Maint.Agreement-Grit&Screenings Removal&Digester Bed Mat'I.Removal 54645 Woodruff,Spradlin&Smart 128,987.43 Legal Services MO 7-26-95 54646 J.F.Shea Construction,Inc. 1,172,421.90 Construction J-35-2&J-87 54647 Margate Construction,Inc. 2,799,121.00 Construction P1-37 54648 Southern Contracting Company 89,867.00 Construction J-33-1 54649 eSysTek 600.00 Software Program Consulting Services-SMS 54650 A-Plus Systems 915.00 Notices&Ads 54651 Acroprint Time Recorder Company 87.18 Office Supplies 54652 Agilent Technologies, Inc. 199.23 Lab Parts&Supplies 54653 Airborne Express 159.20 Air Freight 54654 Airgas Safety 1,919.24 Safety Supplies 54655 Alhambra Foundry Co.,Ltd. 3,995.37 Manhole Frames&Covers 54656 American Airlines 6,699.00 Travel Services 54657 Anthony Pest Control, Inc. 975.00 Service Agreement-Pest Control 54658 Appleone Employment Service 11,354.29 Temporary Employment Services 54659 Aspen Publishers,Inc. 238.16 Publication 54660 AT&T Universal Biller 7,342.29 Telephone Service 54661 AT&T Wireless Services 2,627.53 Wireless Phone Services 54662 Baker Tanks 2,862.53 Tank Rentals 54663 Ballantyne, Inc. 11,880.00 Temporary Employment Services 54664 Battery Specialties 616.50 Batteries 54665 BioMerieux Vitek,Inc. 5,359.92 Lab Equipment Maintenance&Support 54666 Brenton Safety, Inc. 104.72 Telephone Equipment 54667 Bush&Associates,Inc. 5,336.00 Surveying Services MO 6-25-97 54668 BC Wire Rope&Rigging 840.77 Safety Supplies 54669 BEC-Building Electronic Controls,Inc. 13,700.00 Fire Alarm System Maintenance,Repair&Quarterly Inspection 54670 Cal Protection 1,040.00 Service Agreement-Halon Fire System at Plt.2 Control Center 54671 Cal-Glass,Inc. 4,715.73 Lab Parts&Supplies -Custom Glass 54672 California Automatic Gate 782.19 Gate Maintenance 54673 California Municipal Statistics,Inc. 925.00 CAFR Report 02/03 54674 California Relocation Services,Inc. 543.75 Office Moving Services 54675 Martin Boyar Company 8,333.33 Prof.Services-Worker's Compensation Claims 54676 Cameron Welding Supply 28.11 Welding Supplies 54677 Cardlock Fuels 817.06 Fueling District Vehicles at Local Gas Stations 54678 Carl Warren&Co. 300.00 Insurance Claims Administrator 54679 Cashco,Inc.,c/o Ponton Ind.,Inc. 443.97 Mechanical Parts&Supplies 54680 Cole-Parmer Instrument Co. 52.40 Lab Parts&Supplies 54681 Columbia Analytical Services,Inc. 850.00 Analysis of Biosolids and Wastewater 1 54682 Compressor Components of California 5,413.08 Coil Cleaning&Testing&Compressor Parts Page 8 of 13 EXHIBIT Br �� c' m Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54683 CompuMaster On-site 600.00 On-Site Training-MS Project 54684 Consolidated Elect.Distributors,Inc. 123.62 Electrical Supplies 54685 Consumers Pipe&Supply Co. 1,654.96 Mechanical Parts&Supplies 54686 Corporate Express Imaging 176.47 Office&Stationery Supplies 54687 Corporate Express 1,198.51 Office Supplies 54688 Cost Containment Solutions 763.73 Worker's Comp.Services 54689 Counterpart Enterprises,Inc. 225.85 Mechanical Parts&Supplies 54690 County of Orange-Auditor Controller 243.00 Maint.Agreement-Repair/Installation of Base,Handheld&Vehicle Radios 54691 County Wholesale Electric Co. 1.237.44 Electrical Parts&Supplies 54692 CWEA Membership 92.00 Membership-Calif.Water Environment Assoc. 54693 Dapper Tire Co. 278.33 Truck Tires 54694 Del Mar Analytical 2,825.00 Analysis of Biosolids and Wastewater 54695 Diamond H Recognition 272.92 Employee Service Awards 54696 Dorr-Oliver EIMCO USA,Inc. 761.80 Motor&Mechanical Parts 54697 Douglass Truck Bodies,Inc. 20,492.09 Custom Service Truck Body Installation 54698 Driver Alliant Insurance Service,Inc. 500.00 Special Risk-Accident Health Insurance 54699 Dunn-Edwards Corporation 37.93 Paint Supplies 54700 DGA Consultants, Inc. 10,059.12 Professional Services-CCTV Data Evaluation &Support 54701 E.Sam Jones Distributors,Inc. 1,206.80 Electrical Supplies 54702 Ecology Control Industries 4,193,00 Hazardous Waste Disposal 54703 Edinger Medical Group,Inc. 635.00 Medical Screening 54704 Electra-Bond, Inc. 11,906.39 Fusion Bond Epoxy Coating 54705 Element K Journals 77.00 Subscription 54706 Employee Benefits Specialists, Inc. 630,39 Reimbursed Prepaid Medical&Dependent Care 54707 Enchanter,Inc. 5,400.00 Ocean Monitoring MO 5-24-95 54708 Environmental Resource Association 2,925.09 Lab Parts&Supplies 54709 Environmental Science Associate 16,458.06 Professional Services J40-5 54710 Excel Door&Gate Company,Inc. 1,340.00 Furnish&Install Replacement Roof Hatch Lid 54711 FedEx Corporation 282.31 Air Freight 54712 Filarsky&Watt,L.L.P. 7,030.00 Prof.Services-SPMT Labor Negotiation Meetings&Special Services 54713 First American Real Estate Solutions 647.50 Orange County Property Information 54714 Fisher Scientific Company,L.L.C. 9,414.80 Lab Parts&Supplies 54715 Foodcraft Coffee&Refreshment Services 470.20 Meeting Supplies 54716 Forensic Analytical 30,00 Asbestos&Microscopic Analyses 54717 Fountain Valley Camera 45.36 Photo Supplies 54718 Fountain Valley Rancho Hand Wash 543.40 Truck Wash Tickets 54719 Frost Engineering 866.08 Mechanical Parts&Supplies 54720 Gallade Chemical, Inc. 193.95 Chemicals 54721 Garratt-Callahan Company 1,728.10 Chemicals 54722 General Petroleum 12,691.29 Unleaded Gasoline 54723 Gierlich-Mitchell, Inc. 1,151.85 Mechanical Parts&Supplies 54724 WW Grainger, Inc. 1,264.57 Electrical Parts,Supplies&Tools 54725 Hach do Ponton Industries 90.25 Lab Parts&Supplies 54726 Harrington Industrial Plastics, Inc. 162.37 Plumbing Supplies 54727 Ascom Hasler Mailing Systems 930.96 Software Maintenance-Mail Manager Intellitouch System&Meter Rental 54728 Hawkins, Bernie 980.00 Prof.Serv.-Source Control CAD Modeling&Project Design 54729 Heat Technology Products 257.09 Mechanical Parts&Supplies 1 54730 Hill Brothers 19,374.55 Chemicals-Odor&Corrosion Control-Newport Trunkline Page 9 of 13 EXHIBIT B Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54731 The Holman Group 881.28 Employee Assistance Program Premium 54732 Home Depot 576.83 Misc.Repair&Maintenance Material 54733 Hopkins Technical Products 736.11 Mechanical Parts&Supplies 54734 Horizon Technology 156.36 Lab Parts&Supplies 54735 Hub Auto Supply 614.34 Vehicle Parts&Supplies 54736 City of Huntington Beach 14,142.97 Water Use 54737 Industrial Distribution Group 683.56 Mechanical Parts&Supplies 54738 Inorganic Ventures, Inc. 293.29 Lab Parts&Supplies 54739 IBM 6,202.56 Maintenance AgreementAS-400 54740 Interstate Batteries of Cal Coast 1.788.60 Batteries 54741 Intratek Computer,Inc. 3,720.00 Network&Server Maintenance 54742 Invensys Systems, Inc. 586.55 Instrument Supplies 54743 Iron Mountain Off Site Data Protection 234.00 Offsite Back-Up Tape Storage for NT Server 54744 Irvine Technology Corporation 6,358,00 Temporary Employment Services 54745 J&B Auto Parts 84.47 Auto Parts&Supplies 54746 J&L Industrial Supply 216.53 Mechanical Parts&Supplies 54747 J.G.Tucker and Son,Inc. 3,942.11 Air Inlet Filter 54748 Jamison Engineering Contractors,Inc. 4,304.81 Construction-Installation of PVC Conduit to Human Resources 54749 Jay's Catering 641.94 Meeting Expenses 54750 Johnstone Supply 592.56 Electrical Supplies 54751 Kaman Industrial Technologies 74.00 Electrical Supplies 54752 Keith Boger 8,055.00 O&M Training Registration 54753 Krohne c/o Mertec Engineering 1,427.70 Liquid Level Indicator 54754 KW Communications Consulting 1,762.50 Community Outreach Re Bushard Trunkline Replacement Project 54755 Lab Safety Supply,Inc. 778.25 Safety Supplies 54756 Lab Support 10,068.94 Temporary Employment Services 54757 Leak Busters, Inc. 1,563.00 Electroscan Sewers In Tustin&UCI for Leak Detection 54758 Lotek Wireless,Inc. 1,843.69 Computer Hardware/Software&Programming 54759 Lucci's Gourmet Foods, Inc. 437.33 Meeting Expense 54760 Lustre-Cal 387.90 Asset Tags 54761 LINJER 4,545.93 Professional Service-DART MO 9-22-99 54762 Mag Systems(Direct billing) 1,254.19 Electronic Supplies 54763 Manhole Adjusting 10,817.70 Manhole Adjustments,Rasings and/or Replacement of Covers&Frames 54764 Manley's Boiler,Inc. 437.01 Boiler Repair Supplies 54765 McMaster-Carr Supply Co. 2,182.10 Mechanical Parts,Supplies&Tools 54766 Medlin Controls Co. 116.06 Mechanical Parts&Supplies 54767 Midway Mfg&Machining Co. 668.05 Mechanical Parts&Supplies 54768 Siemens Process Instrumentation 873.46 Mechanical Parts&Supplies 54769 Mission Abrasive&Janitorial Supplies 239.21 Janitorial Supplies 54770 Mission Uniform Service 13,542.63 Uniform Rentals 54771 MARMAC Field Services, Inc. 3,857.70 Eng.Services-Emergency Operations Center Modifications 54772 MDS Consulting 19.297.20 Prof.Services-Surveying Various Capital Projects 54773 MGD Technologies,Inc. 9,800.00 Temporary Flow Monitoring 54774 MWH Soft,Inc. 100.00 Planning Training Registration 54775 National Technology Transfer,Inc. 4,945.50 On-Site Training-Electrical Safety 54776 NetVersant of Southern California 1,267.60 Security System&CCTV,Software Maintenance 54777 New Horizons CLC of Santa Ana 320.00 Source Control Training Registration i 54778 New Pig 374.35 Spill Absorbent Materials Page 10 of 13 EXHIBITt �+ Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54779 Nickey Petroleum Co.,Inc. 389.72 Oil 54780 The Norco Companies 170.78 Mail Delivery Service 54781 NCG Porter Novelli,Inc. 13,668.46 Professional Services-Biosolids Outreach Program 54782 NRG Energy,Inc. 895.42 Mechanical Parts&Supplies 54783 0.C.Windustrial Co. 73.79 Mechanical Parts&Supplies 54784 Office Depot Business Services Div. 1,513.43 Office Supplies 54785 Omega Industrial Supply,Inc. 543.06 Janitorial Supplies 54786 OneSource Distributors,Inc. 2,183.62 Electrical Parts&Supplies 54787 Orange County Sanitation District 50.00 Permit Fee 11-22 54788 Orange County Vector Control District 8,133.13 Pest Control 54789 Orange Courier 10.00 Courier Services 54790 Orange Fluid System Technologies,Inc. 97.19 Plumbing Supplies 54791 Oxygen Service Company 2,068.11 Specialty Gases 54792 OCB Reprographics 7,138.67 Printing Service-MO 1/26/00 54793 P.L.Hawn Company,Inc. 190.26 Electrical Supplies 54794 Pacific Safety Council 105.00 Membership 54795 Patriot Video Productions 1,801.97 Video 54796 PenValve 231.37 Mechanical Parts&Supplies 54797 Pixelpushers,Inc. 7,590.00 Internet Site Redesign,On-Line Technical Sepc.&Scope of Work Library 54798 Ponton Industries, Inc. 14,686.59 Instruments 54799 Power Measurement Limited 11,379.30 Software 54800 Primary Source Office Furnishings, Inc. 1,144.02 Office Furniture 54801 Profit Techniques,Inc. 500.00 Professional Services-0&M Management Coaching 54802 Propipe 9,521.02 CCTV Sewerline Inspection-2-41 54803 PCG Industries 1,400.00 Refurbishment of(4)Seal Areas 54804 PCS Express,Inc. 110.00 Courier Service 54805 PVF Sales,Inc. 293.77 Plumbing Supplies 54806 Pump Engineering&/or QAir California 2,389.51 Oil Filters/Oil Coolant 54807 R.L.Abbott&Associates 3,000.00 Kern County Biosolids Consulting Services 54808 Rainin Instrument Co.,Inc. 820.99 Lab Supplies 54809 Randolph Austin Co. 661.12 Plumbing Supplies 54810 Reliastar Bankers Security Life Ins. 9,760.98 Employee Life Ins.Premium,Short-Term Disability&Cancer Ins.Payroll Deductions 54811 RemedyTemp, Inc. 4,422.71 Temporary Employment Services 54812 Retrofit Parts&Components,Inc. 296.62 Mechanical Parts&Supplies 54813 Ricoh Business System 2,886.03 Color Copier Lease 54814 Robert J.Lung&Assoc. 1,913.83 Aerial Photos Pits.1 &2 54815 Roberto's Auto Trim Shop 253.21 Seat Covers for Lab Jeep 54816 Rosemount/Uniloc 1,115.69 Instrument Supplies 54817 RPM Electric Motors 3,275.59 Motors 54818 RS Hughes Co,Inc. 342.99 Paint Supplies 54819 RSA Suffer Soil Products 1,540.83 Soil Materials 54820 Sancon Engineering,Inc. 4,475.00 Construction-Manhole Rehabilitation Program 54821 Schultz,Leslie 1,142.42 User Fee Refund Re Septic Tanks 54822 Schwing America,Inc. 280.30 Pump Supplies 54823 Shamrock Supply Co.,Inc. 4,674.41 Tools 54824 Shepherd Machinery Co. 173.65 Fuel Filter 54825 Supelco,Inc. 3,245.56 Lab Supplies 54826 Skalar, Inc. 3,688.82 Lab Supplies Page 11 of 13 EXHIBIT B Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54827 Smith Pipe&Supply 587.68 Plumbing Supplies 54828 Snap On Industrial 809.23 Lab Parts&Supplies 54829 South Coast Systems,Inc. 4.674.00 Prof.Serv.-Anoxic Gas Floatation Pilot Test 54830 Southern California Edison 37.58 Power 54831 Specialty Technical Publishers,Inc. 420.00 Publication 54832 Spex Certiprep,Inc. 84.07 Lab Supplies 54833 Stanley Steamer International,Inc. 690.00 Carpet Cleaning Services 54834 Strata International, Inc. 505.46 Chemicals 54835 Summit Steel 1,149.35 Metal 54836 Sunset Industrial Parts 811.69 Mechanical Supplies 54837 Systime Computer Corp 19,280.00 Professional Services-J D Edwards One World XE Implementation 54838 SBC 1,244.25 Telephone Services 54839 SC Field Technical Services 19,341.57 Varec Flame Arrestor Parts&Supplies 54840 SPEC Services,Inc. 18,607.25 Engineering Services J-33-1 54841 SPX Valves&Control 1,950.70 Mechanical Parts&Supplies 54842 Teletrac, Inc. 245.00 Monthly Air-Time Service Fee&Software/Hardware Maint. For Vehicle Tracking Sys. 54843 Tetra Tech, Inc. 9,884.50 Prof.Services-Ocean Monitoring Program&Plume Modeling 54844 The Orange County Register 3,330.08 Notices&Ads 54845 Thermo Finnigan,L.L.C. 22,087.50 Lab Instruments Maintenance Service 54846 Thompson Industrial Supply,Inc. 2,347.22 Mechanical Supplies 54847 Time Warner Communication 80.94 Cable Services 54848 Daily Pilot 56.25• Notices&Ads 54849 Tony's Lock&Safe Service&Sales 125.64 Locks&Keys 54850 Transcat 883.45 Electrical Supplies 54851 Tropical Plaza Nursery,Inc. 14,018.55 Contract Groundskeeping MO 5-11-94 54852 Truck&Auto Supply,Inc. 391.02 Automotive Supplies 54853 Truesdail Laboratories,Inc. 319.00 Lab Services 54854 US Filter Corporation 280.00 Service Agreement-Lab Purification System 54855 Ultra Scientific 452.83 Lab Supplies 54856 United Parcel Service 1,979.21 Parcel Services 54857 Universal Specialties,Inc. 306.01 Plumbing Supplies 54858 UC Regents 595.00 Safety&Emergency Response Training Registration 54859 Valley Detroit Diesel Allison 149.58 Coolant 54860 The Vantage Group,L.L.C. 10,908.00 Temporary Employment Service 54861 Varian,Inc. 1,243.00 Lab Equipment Repairs 54862 Verizon California 598.23 Telephone Services 54863 Vortex Industries,Inc. 386.20 Janitor Door Configuration Change-Admin.Bldg. 54864 Vossler&Company 505.41 Mechanical Supplies 54865 VWR Scientific Products Corporation 11,814.68 Lab Supplies 54866 The Wackenhut Corporation 9,298.02 Security Guards 54867 Waco Filter 1,029.89 Filters 54868 Waxie Sanitary Supply 679.43 Janitorial Supplies 54869 Witeg Scientific 89.83 Lab Supplies 54870 Watson Wyatt Data Services 399.00 Publication 54871 WEF-Registration Dept. 635.00 O&M Training Registration 54872 Xerox Corporation 7.725.93 Fax&Copier Leases&Maintenance 54873 California Bank&Trust 9,985.00 Construction J-33-1A,Retention 54874 Pongsakdi Cady 182.91 Meeting/Training Expense Reimbursement Page 12 of 13 EXHIBIT B �{ l� > Claims Paid From 07/16/03 to 07/31/03 Warrant No. Vendor Amount Description 54875 Timothy Colamonico 535.79 Meeting/Training Expense Reimbursement 54876 Steven R.DeWilde 527.02 Meetinglfraining Expense Reimbursement 54877 Martin A.Dix 782.69 Meeting/Training Expense Reimbursement 54878 Doug M. Dysart 130.00 Meeting/Training Expense Reimbursement 54879 Larry Gibson 337.81 Meeting/Training Expense Reimbursement 54880 Government Finance Officers Association 55.00 Subscription 54881 Michael H.Harting 213.54 Meeting/Training Expense Reimbursement 64882 David A.Ludwin 818.93 Meeting/Training Expense Reimbursement 54883 Adam A.Nazaroff 190.20 Meeting/Training Expense Reimbursement 54884 Quynh D.Nguyen 350.32 Meeting/Training Expense Reimbursement 54885 Frank R.Steiger 190.90 Meeting/Training Expense Reimbursement 54886 Robert C.Thompson 336.91 Meeting/Training Expense Reimbursement 54887 Edward M.Torres 1,190.86 Meeting/Training Expense Reimbursement 54888 Robyn A.Wilcox 111.00 Meeting/Training Expense Reimbursement 54889 Conex International 3,685.00 Legal Services 102-60 54890 Employee Activity Committee 10,000.00 Employee Activity Fund 54891 Orange County Sanitation District 1,403.52 Petty Cash Reimb. Total Accounts Payable-Warrants $ 13,581,766.77 Payroll Disbursements 30435-30450 Interim Paychecks $ 6,074.65 Managers'IIS Payment 30451 -30548 Employee Paychecks 147,686.20 Biweekly Payroll 7/23103 30549-30459 Interim Paychecks 861.42 Adjustment 87510-88002 Direct Deposit Statements 891,568.66 Biweekly Payroll 7123/03 Total Payroll Disbursements $ 1,046,190.93 Wire Transfer Payments U.S.Bank $ 5,086,370.10 July P&I Payment on Series 2000 Certificates of Participation U.S.Bank $ 2,568,064.84 July P&I Payment on 1990-92 Advance Refunding Certificates of Participation Total Wire Transfer Payments $ 7,654,434.94 Total Claims Paid 07/16/03-07/31103 $ 22,282,392.64 i Page 13 of 13 EXHIBIT B BOARD MEETING Meeting Date To A. Bds. 8/27/03 AGENDA REPORT Item Number Item Number 9a Orange County Sanitation District FROM: Thomas L. Woodruff, General Counsel Originator: Greg Mathews, Administrative Services Manager SUBJECT: LEASE AGREEMENT WITH CARL KARCHER ENTERPRISES (CKE) PROVIDING DISTRICT PARCEL FOR CKE PARKING AND/OR RELATED ACTIVITIES GENERAL MANAGER'S RECOMMENDATION Approve the five-year lease agreement, beginning August 2003, with Carl Karcher Enterprises, Inc (CKE)., a California Corporation, to allow paving, striping, parking, and related improvements by CKE within District's 4-foot wide utility corridor located at 21532 South Brookhurst Street, Huntington Beach. SUMMARY • The proposed agreement is an extension of an original five-year lease agreement entered into on August 11, 1993 and extended an additional five years expiring August. 2003. • The agreement provides for CKE to utilize District land, classified as an Interplant Pipeline and Utility Corridor, for the use of parking, outdoor seating or related activities. for the sum of $1 over the lease period. • Improvements such as paving, striping, etc. are to be maintained in good working condition by CKE for the term of the lease agreement. The District shall not be liable for events surrounding use of District land during term of this agreement. • This lease may be terminated by either party with 60 days written notice of said intent. PRIOR COMMITTEE/BOARD ACTION Board approved prior lease agreements beginning August 11 . 1993. PROJECT/CONTRACT COST SUMMARY For the consideration of $1.00, District will lease said property for a period of five years. BUDGET IMPACT ❑ This item has been budgeted. (Line item: Revenue) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) ADDITIONAL INFORMATION Not Applicable ALTERNATIVES Not Applicable CEQA FINDINGS Not Applicable ATTACHMENTS Not Applicable G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\08011tem 9(a).Carl Karcher Lease Agreement doc Revised: 10/3197 Page 2 BOARD OF DIRECTORS Meeting Date To Bd. Dir. 4 t 8/27/0/03 AGENDA REPORT Item Number Item Number 9b Orange County Sanitation District FROM: Blake P. Anderson, General Manager Originator: Jim Herberg. Engineering Manager SUBJECT: AGREEMENT FOR PARTICIPATING IN MUNICIPAL WATER DISTRICT OF ORANGE COUNTY WATER USE EFFICIENCY PROGRAM. WATER CONSERVATION, JOB NO. J-72 GENERAL MANAGER'S RECOMMENDATION (1) Approve Amendment No. 2 to the Letter Agreement dated September 22, 1999. with Municipal Water District of Orange County for a multi-agency Water Use Efficiency Program removing Orange County Water District as a funding partner in a form approved by General Counsel; and (2) Authorize an increase in the annual funding of $788.858 for year five of the program, increasing the annual amount for year five to $1 ,6557108. with no change to the total project amount of $4,275,863. SUMMARY • Orange County Sanitation District (OCSD) has participated in water conservation programs in the past several years because it reduces flows, delays construction of new facilities. and lowers operational costs. • In October 1999, the OCSD entered into a five-year agreement with the Municipal Water District of Orange County (MWDOC) for a multi-agency Water Use Efficiency Program to implement a Project to distribute Ultra-Low Flush Toilets (ULFT) to single and multi family participants who reside within OCSD's service area. • The ULFT distribution program was jointly funded by four partner agencies: Metropolitan Water District of Southern California (MWD). MWDOC, Orange County Water District (OCWD), and the Orange County Sanitation District (OCSD). • In May 2003, OCWD notified the other partners of its decision to discontinue funding for the last year of the Program. Based on OCWD's decision to withdraw its funding, MWDOC is proposing to proceed with the Program for the remaining twelve-months of the five-year Agreement with reallocating funding responsibility among the remaining partners. • MWDOC is requesting that OCSD provide an additional $15.75 per toilet, for a total contribution of $31.50 per ULFT retrofit. The annual increased contribution by OCSD is $788,858 for a contribution amount not to exceed $1 .655,108 ($31 .50 x 52.543 retrofits) per year. The program term expires June 30. 2004. G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0603\Item 9(b).MWDOC.doc Revised: 06/04/03 Page 1 The total authorized amount for Orange County Sanitation District's (OCSD) participation in the ULFT program will remain unchanged at $4,275,863. • OCSD's participation remains cost effective even with Orange County Water District (OCWD) dropping out. • Amendment No. 2 would also change the focus of OCSD's funding from toilet rebates and free distribution to only free distribution of ULFTs. MWDOC has conducted a study showing that free distribution programs are able to make retrofits happen more quickly than programs that provide partial rebates. Therefore, Municipal Water District of Orange County (MWDOC) is projecting an accelerated flow reduction for Orange County Sanitation District (OCSD) by implementing up to 52,543 Ultra-Low Flush Toilets (ULFT) retrofits in year five of the program. Additionally the MWDOC study indicated that free toilet distribution programs have a lower "free ridership" rate than rebate programs. "Free rider" is the term used for individuals who take advantage of subsidized ULFTs, even though they would have purchased a ULFT without the program within the following year. • To date, the retrofit program has resulted in the installation of 168.492 ULFTs in OCSD's service area, with an estimated 4.7 mgd flow reduction. and an annual savings of $517.000 in OCSD operations and maintenance costs. Under Amendment No. 2, OCSD's flow will be reduced by a total of 6.1 mgd by the end of the five year agreement, providing an annual savings of $671 .000 in O&M costs. Using these annual savings, it is projected that OCSD would break-even on its five year investment in ULFTs in 2007, and will continue to accumulate savings due to reduced flows in future years. PRIOR COMMITTEE/BOARD ACTIONS In April 2001 . the Board of Directors approved Amendment No. 1 to the Letter Agreement dated September 22, 1999 with MWDOC. for a multi-agency Water Use Efficiency Program. authorizing an. increasing the total annual amount to $866,250, and a contract amount not to exceed $4.275,863. PROJECT/CONTRACT COST SUMMARY Please refer to the attached Letter Agreement Status Report BUDGETIMPACT ® This item has been budgeted. (Line item Water Management Projects, Section 8, Pg 140) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) G:\wp.dtatagenda\Board Agenda Reports\2003 Board Agenda Reports\08011tem 9(b).MWDOC.doc Revised M04/03 Page 2 Q The total project budget is $4,644,000. This cost includes project management expenses in an addition to the $4,275,863 for ULFT distribution. The recommended action does not change the total project budget. ADDITIONAL INFORMATION Orange County Sanitation District's (OCSD) 1999 Strategic Plan Water Conservation Study showed that the OCSD can experience significant savings in Capital and Operations & Maintenance costs through water conservation programs, such as the OCSD's participation with MWDOC in the ULFT Program. By 2020, OCSD's water conservation efforts are anticipated to result in an estimated influent flow reduction of 13 million gallons per day. More than half of this goal would be realized by 2005 with approval of Amendment No. 2. ALTERNATIVES If OCSD does not approve the additional funding, the program would be terminated due to insufficient funding to meet program costs. The amendment would be necessary to reflect Orange County Water District's (OCWD) decision to withdraw as a funding Partner. As a result, it is anticipated that the amount of Ultra-Low Flush Toilets (ULFT) distributed within OCSD's service area will be decreased and fewer benefits experienced from flow reduction. CEQA FINDINGS None. ATTACHMENTS 1. Budget Information Table 2. Agreement Status Report AA:sa G:\ntglobaMgenda Draft Reports\Joint Boards\Agenda Report J-72 for Amendment 2.doc G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\080311tem 9(b).MWDOC.doe Revised:06/04/03 Page 3 BUDGET INFORMATION TABLE WATER CONSERVATION JOB NO. J-72 M "yi! N N J ;Q , N�R T � .ti TEDk�( . IT T, I'M I ':�lr C Rbr alrhi&h ED_111 P. , El parw 1.2 -,-u rr LIM e. MAI M n SAW F%BUUGET,`, 'P fg . Project Development Preliminary Design Design Construction& Installation 5,150,000 4,644,000 4,644,000 4,275,863 4,275,863 2,593,642 61% Commissioning Close-out Contingency � 'PROJECT TOTAL 5,150,0001 4,644,000 , 4,4,644,000Ki $ 4,275,863 4,275,863 F$ 2.593,642 61% lReirnbursable Costs 0% I 1PROJECT NET $ 5,150,000 1 $ 4,644,000 1 1 $ 4,644,000 P,] $ 4,275,863 1 4,275,863 1 $ 2,593,6421 61% EDMS 003752284 Agreement Status Report Water Conservation Job No J-72 Total Project Budget: $4,644,000 Consultant: Municipal Water District of Orange County (MWDOC) Start Date of Project: September 22, 1999 Date Addendum Description Cost AccumulatedCosts September Original 5-year, multi-agency Agreement to Participate in 1999 Agreement MWDOC's Water Use Efficiency Program $4,125,000 $4,125,000 4/25/2001 1 Amendment No. 1 to Water Use Efficiency Program for additional program funding $150,863 $4,275,863 Proposed 2 Amendment No. 2 to Water Use Efficiency Pro ram for additional program funding $0.00* $4,275,863 * Proposal is to increase Orange County Sanitation District's (OCSD) subsidy from $14.75 per toilet to $31.50 per toilet with no change in the overall $4,275,863 cost to OCSD. Aksa EDMS 003750488 G:1wp.dtalagenda\Board Agenda Reports12003 Board Agenda Reports10803111em 9(b).2.doc 08/20/03 Revised 05/14/98 BOARD OF DIRECTORS Meeting Date To Bd.of Dir. 8/27/03 AGENDA REPORT Item Number Item Number 9c Orange County Sanitation District FROM: Blake P. Anderson, General Manager Originator: Gary Streed. Director of Finance & Treasurer SUBJECT: TAX EXCHANGE AGREEMENT WITH VECTOR CONTROL DISTRICT GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 03-19. Authorizing a Property Tax Exchange between Orange County Sanitation District and Orange County Vector Control District (OCVCD). for two Tax Rate Areas that were inadvertently excluded from the original annexation of the City of Fullerton into the OCVCD in the 1970s. SUMMARY When the City of Fullerton joined the Orange County Vector Control District (OCVCD) in the 1970s, the entire city should have been included in the annexation. The parcels in two Tax Rate Areas (TRA), however, were overlooked and were not included. During the intervening years, the OCVCD has received no share of the property tax revenues from these two TRAs. This error has now been discovered and LAFCO is processing an annexation. A part of the annexation process is negotiating a tax exchange agreement between OCVCD and each of the other agencies that receive a portion of the property tax from these TRAs. This was not necessary for the original annexation as it was approved prior to passage of Proposition 13 and the OCVCD was able to levy a property tax. just like the Sanitation District. Because this is not really a new annexation. but merely the correction of an old error, staff recommends adoption of a resolution reducing the Sanitation District share of the property tax from TRA 03-002 and from TRA 03-097 in order to provide needed and consistent funding to OCVCD. These reductions are approximately .4% of the property taxes that will be generated by increases in the total assessed value within these TRAs. The OCSD current amount of property taxes from the current assessed value will not be decreased. PRIOR COMMITTEE/BOARD ACTIONS None G:mp.dt&agenda\8oard Agenda Repons\2003 Board Agenda Reports\0803\Item 9(c).00 Vector Control Tax Exchange.doc Revised: 06/04+03 Page 1 PROJECT/CONTRACT COST SUMMARY The share of property tax revenues from TRA 03-002 will be reduced by the rate of .00010684423 and from TRA 03-097 by the rate of .00014295290. These reductions are approximately .4% of the future property taxes that will be generated by increases in the total assessed value within these TRAs. The current amount of property tax revenue that OCSD receives from these TRAs is approximately $12,255.25 per year. If the assessed value in the TRAs increases 5% per year, then the share of the increment that OCSD will forego will be approximately $50 per year. BUDGET IMPACT ❑ This item has been budgeted. (Line item: ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ® Not applicable (information item) ADDITIONAL INFORMATION None. ALTERNATIVES Do not approve the Resolution. CEQA FINDINGS N/A ATTACHMENTS 1 . Draft Resolution No. OCSD 03-19 G:\wp.dMagenda\Board Agenda Reports\2003 Board Agenda Reports\08031tem 9(c).00 Vector Control Tax Excbange.doc Revised: 06/04/03 Page 2 4 A \ RESOLUTION NO. OCSD 03-19 AUTHORIZING A PROPERTY TAX EXCHANGE BETWEEN THE ORANGE COUNTY SANITATION DISTRICT AND THE ORANGE COUNTY VECTOR CONTROL DISTRICT. A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT APPROVING A PROPERTY TAX EXCHANGE BETWEEN THE ORANGE COUNTY VECTOR CONTROL DISTRICT AND THE ORANGE COUNTY SANITATION DISTRICT, WHEREBY UPON COMPLETION BY THE ORANGE COUNTY VECTOR CONTROL DISTRICT OF THE ANNEXATION OF TAX RATE AREA 03-002 IN FULLERTON, THE ORANGE COUNTY SANITATION DISTRICT'S SHARE OF THE PROSPECTIVE ANNUAL TAX INCREMENT OF TRA 03- 002 WILL BE 0.02753920826; AND UPON COMPLETION BY THE ORANGE COUNTY VECTOR CONTROL DISTRICT OF THE ANNEXATION OF TAX AREA 03-097 IN FULLERTON, THE ORANGE COUNTY SANITATION DISTRICT'S SHARE OF THE PROSPECTIVE ANNUAL TAX INCREMENT WILL BE 0.03535797724. WHEREAS, the Orange County Vector Control District (OCVCD) has filed an application with the Local Agency Formation Commission to annex Tax Rate Area (TRA) 03-002 and TRA 03-097 located in the City of Fullerton, and WHEREAS, these tax areas were inadvertently excluded from the Orange County Vector Control District when the City of Fullerton was annexed into the OCVCD in the 1970s; and WHEREAS, pursuant to Revenue and Taxation Code (R&T) Section 99, the Orange County Board of Supervisors (The "Board of Supervisors") negotiates with all affected agencies on behalf of special districts on all jurisdictional changes affecting special districts; and WHEREAS, the Orange County Sanitation District is an affected agency since it receives property tax from these tax rate areas; and WHEREAS, this annexation will result in a special district (OCVCD) providing services to territory where those services have not previously been provided; and WHEREAS, R&T Section 99.01 provides that in such cases the exchange of property tax among these local agencies shall be limited to property tax revenue from the annual tax increment generated in the area subject to the jurisdictional change and attributable to those agencies, and 1 WHEREAS, upon annexation of TRA 03-002 by the OCVCD, OCSD's share of the prospective annual tax increment will be reduced by 0.00010684423; and WHEREAS, upon annexation OCSD's share of the prospective annual tax increment of TRA 03-002 will be 0.02753920826; and WHEREAS, upon annexation of TRA 03-097 by the OCVCD, OCSD's share of the prospective annual tax increment will be reduced by 0.00014295290; and WHEREAS, upon annexation OCSD's share of the prospective annual tax increment of TRA 03-097 will be 0.03535797724; and WHEREAS, California Revenue and Taxation Code Section 99 requires the affected Governing Boards to adopt resolutions providing for the exchange of property tax in newly annexed areas. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1 : Approval of the property tax exchange between the Orange County Vector Control District and the Orange County Sanitation District, whereby, upon completion by the Orange County Vector Control District of the Annexation of Tax Rate Area 03-002 in Fullerton, the Orange County Sanitation District's share of the prospective annual tax increment of TRA 03-002 will be 0.02753920826; and Section 2: That upon completion by the Orange County Vector Control District of the annexation of Tax Area 03-097 in Fullerton, the Orange County Sanitation District's share of the prospective annual tax increment of TRA 03-097 will be 0.03535797724. Section 3: This Resolution shall become effective immediately upon adoption. PASSED AND ADOPTED at a regular meeting of the Board of Directors held August 27, 2003. Chair ATTEST: Board Secretary 2 BOARD OF DIRECTORS Meeting Date To Bd.of Dir. 08/27/2003 AGENDA REPORT Item Number Item Number 9d Orange County Sanitation District FROM: Robert P. Ghirelli, D.Env.; Director of Technical Services Originator: George Robertson, Senior Scientist; Environmental Compliance and Monitoring Division SUBJECT: PARTICIPATION AS LOCAL SPONSOR IN THE DEPARTMENT OF THE ARMY (U.S. ARMY CORPS OF ENGINEERS) LOWER SANTA ANA RIVER WATERSHED STUDY GENERAL MANAGER'S RECOMMENDATION (1) Approve the Orange County Sanitation District's participation in the Lower Santa Ana River Watershed study as the local non-Federal project sponsor: (2) Authorize the General Manager to execute an agreement with the Department of the Army (U.S. Army Corps of Engineers) for an amount not to exceed $6,800,000 with the Department of the Army (U.S. Army Corps of Engineers) and the District paying equal shares of $3,400,000, and in a form approved by General Counsel with the District's obligation being met through ongoing permit- required ocean monitoring and past Huntington Beach Shoreline Contamination Investigation. Phase III expenditures. SUMMARY • The Department of the Army (U.S. Army Corps of Engineers) has determined that the environmental restoration of the nearshore region of Orange County is of prime concern and must be initiated to prevent further adverse ecological and recreational impacts. • The Department of the Army (U.S. Army Corps of Engineers) has proposed a five-year study, the "Orange County Shoreline (Lower Santa Ana River Watershed) Feasibility Study Project Management Plan". to determine a likely solution for improving water quality and ecosystem health in the lower Santa Ana River Watershed and adjacent nearshore coastal waters off the Cities of Huntington Beach and Newport Beach. • The Department of the Army (U.S. Army Corps of Engineers) needs a local non- Federal project sponsor. District staff recommends that the District become that sponsor. • Both District staff and the Office of General Counsel have received the proposed cost-share agreement and project plan and recommend their approval. GR:wh G:\wp.dta\agenda\Board Agenda Reports`,2003 Board Agenda Reports\0803\Item 9(d).Dept of Army re SA River Watershed.doc Revised:080603(wh) Page 1 PRIOR COMMITTEE/BOARD ACTIONS None PROJECT/CONTRACT COST SUMMARY The projected cost for the study is $6.800.000 over five years. As the local non-Federal project sponsor, the District's cost-share would be 50% of that amount. or $3,400.000. The District will not directly contribute cash to this project. Instead, this financial obligation will be met by expenditures and in-kind services associated with the Huntington Beach Shoreline Contamination Investigation, Phase III and continuing permit-required ocean monitoring. A copy of the detailed project management plan is available upon request. BUDGET IMPACT ❑ This item has been budgeted. (Line items: 119, 1M 121. and 122) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) ADDITIONAL INFORMATION Since the summer of 1999. the shoreline off Huntington Beach has been impacted by degraded water quality as evidenced by elevated levels of indicator bacteria that have caused beach closures and/or postings. A series of studies have been conducted by various universities and governmental agencies to identify the source(s) of this bacterial contamination. The Department of the Army (U.S. Army Corps of Engineers) has determined that the environmental restoration of the nearshore region of Orange County is of prime concern and must be initiated to prevent further adverse ecological and recreational impacts. This federal interest has resulted in a proposed feasibility study to determine a likely solution for improving water quality and ecosystem health in the lower Santa Ana River Watershed and adjacent nearshore coastal waters off the Cities of Huntington Beach and Newport Beach. The study, "Orange County Shoreline (Lower Santa Ana River Watershed) Feasibility Study Project Management Plan" has four basic tasks: (1) Identification of Source Contamination: (2) Lower Santa Ana River Watershed Investigations: (3) Characterization of Nearshore Water Circulation Patterns: and (4) Implementation of an Initial Watershed Management Plan. Key to the study is the use of and reliance on existing studies and data to help develop the watershed management plan with supplemental field investigations being carried out only where additional information is deemed necessary. To conduct the study. the Department of the Army (U.S. Army Corps of Engineers) needs a local non-Federal project sponsor. After meetings between the Department of the Army (U.S. Army Corps of Engineers). Orange County Public Facilities and Resources Department, Orange County Health Care Agency, Regional Water Quality Control Board. Region 8, and the District and after evaluating how the Department of the Army (U.S. Army Corps of Engineers') study's goals and objectives fit with the District's mission and benefits of the study to the public, it was determined by District GR:wh G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0803\I1em 9(d).Dept of Army re SA River Watershed.doc Revised:080603(wn) Page 2 staff that the District was the most appropriate agency to act as the local project sponsor. This decision was, in part, based on the fact that much of the data, both historical and new, that will be needed to develop the watershed management plan, originates with the District as a result of our permit-required ocean monitoring program. ALTERNATIVES None CEQA FINDINGS Not applicable ATTACHMENTS None GR:wh G:1wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0803\Item 9(d).Dept of Army re SA River Watershed.doc Revised:080603(wh) Page 3 j DRAFT MINUTES OF STEERING COMMITTEE MEETING Wednesday, July 23, 2003 A meeting of the Steering Committee of the Orange County Sanitation District was held on Wednesday, July 23, 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: OTHERS PRESENT: Directors Present: Thomas L. Woodruff, General Counsel Steve Anderson, Vice Chair Don Hughes Jim Ferryman, Chairman, OMTS Committee Gerhard Van Dries Brian Donahue, Chairman, PDC Committee Randy Fuhrman Brian Brady, Chairman, FAHR Committee Jim Silva, County Supervisor STAFF PRESENT: Blake Anderson, General Manager Directors Absent: Bob Ghirelli, Director of Technical Services Shirley McCracken, Chair David Ludwin, Director of Engineering Norm Eckenrode, Past Board Chair Carol Beekman, Communications Services Manager Wendy Sevenandt, Associate Engineer Jim Herberg, Engineering Manager William Cassidy, Project Manager Jean Tappan, Committee Secretary (2) APPOINTMENT OF CHAIR PRO TEM Vice Chair Steve Anderson chaired the meeting in Chair Shirley McCracken's absence. (3) PUBLIC COMMENTS Randy Fuhrman spoke on Item 13.A.6, the general manager's evaluation and compensation. He said that he had written a letter to the EPA and the CA governor recommending the District be considered for an award and in it he detailed the leadership that Mr. Anderson had provided over the past year on the very significant issues that have been before the agency. (4) RECEIVE, FILE AND APPROVE MINUTES OF PREVIOUS MEETING The minutes of the June 25, 2003 Steering Committee meeting were approved as drafted. V�V Minutes of the Steering Committee Page 2 July 23, 2003 (5) REPORT OF THE COMMITTEE CHAIR Committee Vice Chair Steve Anderson announced that Chair Shirley McCracken would not be at the meetings because of the death of her husband. He asked Blake to report on activities of the Legislative Advocacy Ad Hoc Committee. Chair McCracken had requested that the Committee discuss the policy on authorization and reimbursement for meeting attendance by directors. This will be moved to next month. Another OCSD/OCWD Board workshop to provide a GWRS Update was discussed. Staff was directed to coordinate this for sometime in October in the evening with the Water District. (6) REPORT OF THE GENERAL MANAGER General Manager Blake Anderson reported on legislative issues including federal funding support for secondary treatment;AB 1427, Biosolids; AB 496, Santa Ana River Conservancy; and ACA 10, Stormwater Fee Exemption from 218 Requirements. The discussion of the OCSD/SAWPA mediation on SARI issues was moved to Closed Session. Mr. Anderson reported that staff will begin salary discussions with the unrepresented groups of employees, including managers, confidential and executive management employees. They have not received an increase for FY 2001-02 and 2002-03. This was done because the meet and confer process with the organized groups was underway. Local 501 rejected the agreement last week by 4 votes. Staff would now like to close out last year with the unrepresented group. This will be discussed with the FAHR Committee at its August 13, 2003 meeting. Mr. Anderson also discussed the proposed Orange County Leadership Symposium's third retreat, Arrowhead III. The planning group is seeking input from various past attendees to ensure that the event is structured to meet the goals. A new facilitator has been identified. The budget has been reduced by one-third and sponsorships are being sought to help defray the costs. The Committee members discussed the political sensitivity and seemed comfortable with the proposed direction. (7) REPORT OF GENERAL COUNSEL General Counsel Tom Woodruff reported on Assembly Bill (AB) 1051 that was proposed by major water, sewre and utility cities and Districts to clarify and strengthen their ability to levy both capital and service charges on all public educational institutions. The State University system had temporarily obtained amendments that were very damaging to the levying agencies. Through the efforts of CASA, ACWA and the cities of San Francisco and Los Angeles, the bill has been salvaged and will probably be passed in the next few days in a form acceptable to the agencies. (8) DISCUSSION ITEMS (Items A-C) A. Authorize General Manager to approve Addendum No. 2 to the funding agreement re US Bureau of Reclamation Southern California Water Recycling Projects Initiative Minutes of the Steering Committee t,r Page 3 July 23, 2003 Jim Herberg explained that this agreement covers the fourth of five years for a program that through the 13 participating agencies is identifying water recycling opportunities. As a direct result of the initiative, the District has received grant money for the Ellis Avenue Pump Station and GWRS. Motion: Moved, seconded and duly carried to authorize the General Manager to approve Addendum No. 2 to the funding agreement re US Bureau of Reclamation Southern California Water Recycling Projects Initiative. B. The Agenda Items scheduled to be reviewed by the Board's working committees in August were reviewed. The OMTS Committee will be dark in August. C. The agenda items scheduled to be presented to the Board at tonight's meeting were reviewed. (9) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY 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, August 27, 2003 at 5 p.m. The next Board Meeting is scheduled for Wednesday, August 27, 2003 at 7 p.m. (13) CLOSED SESSION The Committee convened at 5:38 p.m. in Closed Session to discuss two items of significant exposure to litigation (pursuant to Government Code Sections 54956.9(b); one item re initiation of litigation pursuant to Government Code Section 54956.9(c); three items re real property purchase pursuant to Government Code Section 54956.8; and consideration of the General Manager's Annual Performance Evaluation and Compensation pursuant to Government Code Section 54957.6. 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 Minutes of the Steering Committee Page 4 July 23, 2003 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 6:50 p.m., the Committee reconvened in regular session. (14) ADJOURNMENT The Chair declared the meeting adjourned at 6:50 p.m. Submitted by: 2r t n Tappanering Committee Secretary G1wp.diatagendalSteedng Commitfee103UUL1072303 SC Minutes.doc 0 v DRAFT MINUTES OF PLANNING, DESIGN, AND CONSTRUCTION COMMITTEE MEETING Orange County Sanitation District Thursday, June 5, 2003, at 5 p.m. A meeting of the Planning, Design, and Construction Committee of the Orange County Sanitation District was held on Thursday, June 5, 2003, at 5 p.m., in the District's Administrative Office. (1) ROLL CALL The roll was called and a quorum declared present, as follows: PDC COMMITTEE MEMBERS: STAFF PRESENT: Directors Present: David Ludwin, Director of Engineering Brian Donahue, Chair Gary Streed, Director of Finance Alice Jempsa, Vice Chair Carol Beekman, Communications Services Patty Campbell Manager John Collins Chris Cervellone, Construction Supervisor Norm Eckenrode Jim Herberg, Engineering Manager Beth Krom Matt Smith, Acting Engineering Manager Patsy Marshall Chuck Winsor, Engineering Supervisor Bob McGowan Robyn Wilcox, Associate Engineer Julian Sabri, Engineer Directors Absent: Jeff Shubik, Engineer Shirley McCracken, Board Chair Jean Tappan, Committee Secretary Steve Anderson, Board Vice Chair OTHERS PRESENT: Randy Fuhrman Bill Tappan Tom Haid Walid Karam (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS There were no public comments. (4) REPORT OF THE COMMITTEE CHAIR Committee Chair Brian Donahue did not make a report. v -o PDC Committee Minutes ` Page 2 June 5, 2003 (5) REPORT OF THE GENERAL MANAGER The General Manager was not present. (6) REPORT OF THE DIRECTOR OF ENGINEERING Director of Engineering David Ludwin said that staff was considering a workshop for the committee members that would present information on how the engineering department does business and include a tour of the facilities if the directors wanted one. It was decided to hold this sometime in July as a special meeting for all directors. Issues to be considered include a report on the dollars, projects and priorities, as well as a comprehensive discussion of the CIP program and a discussion on how projects are budgeted and comparisons to industry standards. It was suggested that in future years this type of meeting be held before or during the budget process. Communications Services Manager Carol Beekman described preliminary plans to provide the public with the correct information on the proposed rate change and updated the committee on media activities since the last meeting. Over 1600 contacts have been made by the public and they fall into eight categories. Answers to those questions have been created and staff is considering taking out advertisements in the Times and Registerto provide the information to everyone. All of the directors felt that nothing should be done at this time as long as the public is getting their questions answered when they call or write. It was suggested that public announcements be sent to local cable stations or an op-ed piece sent to the papers. The trickling filter project has gone through another review with the contractor and the time for construction has been reduced from 1000 days to approximately 730 days as a result of changes to construction sequencing. The goal is to complete it by June 2, 2005. This will provide additional secondary treatment capacity that was lost during the construction period. Mr. Ludwin reported that a contractor (JW Contracting) on the Solids Storage and Truck Loading Facilities project at Plant 2, Job No. P2-60, has filed for bankruptcy protection. The project is about 90%complete with programming and control type work left, as well as start-up. The District is holding $1.8 million, more than enough to complete the project and cover stop notices. The bonding company has been contacted. Director Eckenrode left the meeting at 5:45 p.m. Mr. Ludwin stated that a value engineering session that identified some changes to the scope of work on the headworks design project at Plant 2 has resulted in a negotiated savings of about $230,000. The Bushard Trunk construction project has experienced some problems with the joint failures on the 108-inch pipe. A consultant has been hired to determine the cause and consider solutions. The contractor has stopped work. About half of the pipe has been delivered and it will have to be tested to see if it is also flawed. Mr. Ludwin reported that he made a presentation to the OMTS Committee last night on the IPMC contract amendment. He said that it is an essential piece to the delivery of the capital program. He then went through the presentation for the PDC Committee members. s • PDC Committee Minutes Page 3 June 5, 2003 (7) REPORT OF GENERAL COUNSEL General Counsel was not present. (8) CONSENT CALENDAR (Items a-h) a. RECEIVE, FILE, AND APPROVE MINUTES OF PREVIOUS MEETING Receive, file, and approve draft minutes of the May 1, 2003 Planning, Design, and Construction Committee meeting. b. CHANGE ORDER REPORTS Attached is the Monthly Change Order Report and the Report of Construction Contracts with Potential Change Orders over Five Percent (5%). This is an information only item. Action on change orders that require PDC Committee or Board approval will be taken separately. There are three change orders this month for PDC Committee approval. C. PSA AND ADDENDA REPORT Attached is the PSA and Addenda Report. This is an information only item. Action on PSAs and Addenda that require PDC Committee or Board approval will be taken separately. There were no PSAs and no Addenda approved by the General Manager from April 18 through May 22, 2003. d. FACILITIES ENGINEERING CONSULTANT ACTIVITY REPORT Attached is the Facilities Engineering Consultant Activity Report. This is an information only item. e. SANTA ANA RIVER INTERCEPTOR RELOCATION AND PROTECTION STATUS REPORT Attached is the Santa Ana River Interceptor (SARI) Relocation and Protection Status Report. This is an information only item. f. PDC03-33 Recommend to the Board of Directors to 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. g. PDC03-34 Recommend to the Board of Directors to 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. h. PDC03-35 Recommend to the Board of Directors to ratify Change Order No. 4 to Solids Storage and Truck Loading Facility at Plant No. 2, PDC Committee Minutes Page 4 June 5, 2003 Job No. P2-60, with JW Contracting Corporation, authorizing an addition of$83,262, increasing the total contract amount to $10,775,287. Motion: It was moved, seconded and duly carried to approve the recommended actions for items specified as 8(a) through (h) under Consent Calendar. (9) INFORMATIONAL ITEMS (a-b) a. PDC03-36 2003-04 Proposed Budget Updates Director of Finance/Treasurer Gary Streed provided the members with a brief overview of the Fiscal Year 2003-04 Budget. He asked that particular attention be directed towards the CIP budget as that is the part that the PDC Committee oversees. He recommended that they call him if there are questions. After the presentation the members complimented Mr. Streed on the budget, stating that it was very well done and easy to use. b. PDC03-37 Addenda to the Existing Professional Services Agreement for Facilities Engineering Consulting Services Mr. Ludwin reported that this agreement is entering the third and final year. A new RFP will be sent out next year for these services. The work done by this group is mainly for the smaller O&M projects. (10) ACTION ITEMS (Items a-g) a. PDC03-38 Recommend to the Board of Directors to 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. MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to 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. b. PDC03-39 Recommend to the Board of Directors to approve Sewer Service Transfer Agreement for Irvine Business Complex/Tustin Marine Corps Air Facility, with Irvine Ranch Water District in a form approved by General Counsel. Jim Herberg described the background and terms of the agreement. PDC Committee Minutes Page 5 June 5, 2003 MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to approve Sewer Service Transfer Agreement for Irvine Business Complex/Tustin Marine Corps Air Facility, with Irvine Ranch Water District in a form approved by General Counsel. C. PDC03-40 Recommend to the Board of Directors to (1)Approve a budget amendment of$133,250 for Supplement No. 1 to the 1999 Strategic Plan Final Program 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. MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to (1) Approve a budget amendment of $133,250 for Supplement No. 1 to the 1999 Strategic Plan Final Program 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. d. PDC03-41 Recommend to the Board of Directors to 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. MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to 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. e. PDC03-42 Recommend to the Board of Directors to approve Addendum No. 9 to the Professional Services Agreement with Lee & Ro, Inc., for a 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. MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to approve Addendum No. 9 to the Professional Services Agreement with Lee & Ro, Inc., for a Secondary Treatment Facilities Process at Plant No. 2, Job No. PDC Committee Minutes Page 6 June 5, 2003 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. f. PDC03-43 Recommend to the Board of Directors to 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. MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to 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. g. PDC03-44 (1)Approve Amendment No. 1 to the Professional Services Agreement with Integrated Program Management Consultants, a joint venture of Parsons Infrastructure &Technology Group, Inc. and CH2MHill, Inc., authorizing an increase to the first year of the agreement(FY02/03)for an amount of$50,000; and (2) Approve Amendment No. 2 to the Professional Services Agreement with Integrated Program Management Consultants, a joint venture of Parsons Infrastructure &Technology Group, Inc. and CH2MHill, Inc., authorizing an additional increase to the first year of the agreement (FY02/03)for$50,000, increasing the total amount not to exceed $4,035,272. The Amendments are for PDC approval per delegated authority by Resolution No. OCSD 99-23. MOVED, SECONDED AND DULY CARRIED TO: (1) Approve Amendment No. 1 to the Professional Services Agreement with Integrated Program Management Consultants, a joint venture of Parsons Infrastructure & Technology Group, Inc. and CH2MHill, Inc., authorizing an increase to the first year of the agreement (FY02/03) for an amount of$50,000; and (2) Approve Amendment No. 2 to the Professional Services Agreement with Integrated Program Management Consultants, a joint venture of Parsons Infrastructure &Technology Group, Inc. and CH2MHill, Inc., authorizing an additional increase to the first year of the agreement (FY02/03) for$50,000, increasing the total amount not to exceed $4,035,272. The Amendments are for PDC approval per delegated authority by Resolution No. OCSD 99-23. (11) CLOSED SESSION There was no closed session. PDC Committee Minutes Page 7 June 5, 2003 (12) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There were none. (13) MATTERS WHICH A DIRECTOR WOULD LIKE STAFF TO REPORT ON AT A SUBSEQUENT MEETING Director Marshall asked that the contacts received on the proposed rate change be separated between businesses and residential and whether they were questions or complaints. (14) MATTERS WHICH A DIRECTOR MAY WISH TO PLACE ON A FUTURE AGENDA FOR ACTION AND STAFF REPORT There were none. (15) FUTURE MEETINGS DATES The next Planning, Design, and Construction Committee Meeting is scheduled for Thursday, August 7, 2003 at 5 p.m. The PDC Committee will be dark in July. (16) ADJOURNMENT The Chair declared the meeting adjourned at 7:32 p.m. Submitted by: J a Tappan Committee Secretary G:\wp.dta\agenda\PDC\2003\Mintiles\060503 PDC Minutes.doc P DC COMMITTEE Meeting Date To Bd.of Dir. 08/07/03 08/27/03 AGENDA REPORT Item Number Item Number PDC03-45 12 b Orange County Sanitation District FROM: David Ludwin, Director of Engineering Originator: Dean Fisher, Senior Engineer SUBJECT: PRIMARY CLARIFIERS 16-31 AND RELATED FACILITIES. JOB NO. P1-37 GENERAL MANAGER'S RECOMMENDATION Ratify Change Order No. 8 to Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37, with Margate Construction, authorizing an addition of $5,363, increasing the total contract amount to $70,954,641 . SUMMARY Background • Job Number P1-37. Primary Clarifiers 16-31 and Related Facilities. includes the construction of 16 new primary clarifiers with all support equipment. improvements to existing Primary Clarifiers 6-15, and improvements to Primary Clarifiers 1-5. • Brown and Caldwell prepared the plans and specifications and the contract was awarded to Margate Construction on October 24, 2001 . • This change order includes 12 items of additional work, and 2 items of deleted work. There are no errors and 2 omissions associated with this change order. There is no time extension associated with this change order. Liquidated damages on this project are $3,000 per day and there are no bonus provisions. Contract Schedule Contract Start Date January 7, 2002 Original Contract Completion Date November 7, 2005 Total Number of Change Orders to Date 7 Current Contract Completion Date April 8, 2006 Actual Completion Date N/A Days Subject to Liquidated Damages 0 G:1wp.dtalagenda\Board Agenda Reports,2003 Board Agenda Reports108011tem 12(b).P7-37.doe Revised: 6V/03 Page 1 Change Order Content Item Description Amount Days Type 1 Scum Gallery Pipe Phasing 8,582 0 Design Change 2 Trickling Filter Overflow 6,934 0 Changed Condition 3 Polymer Facility Duct Bank 2,366 0 Chan ed Condition 4 Primary Clarifiers 1&2 Air Valves 1 ,077 0 Omission 5 FRP Handrail Upgrade 1,333 0 Desi n Chan e 6 Plenum Manway 2,955 0 Design Change 7 Delete Handrail Grounding 9,000 0 Design Change 8 Paint Ferric Chloride Storage Tank 1 ,758 0 Desi n Change 9 Sludge Flow-Meter Units 674 0 Design Change 10 Ferric Chloride Facility Tag 1 ,402 0 Design Change Numbers 11 Primary Clarifiers 16A/17A 5,506 0 Omission Overflow 12 Slide Gate Operator 626 0 Design Change 13 Network Hardware 22,889 0 Design Chan e 14 Chemical Facility Meters 4,039 0 Design Chan e Total Change Order $5,363 0 Job Completion The project is 50% complete. PRIOR COMMITTEE/BOARD ACTIONS The contract was awarded by the Board of Directors on October 24, 2001 , Please refer to the attached Change Order Status Report for information on all previous change orders. PROJECT/CONTRACT COST SUMMARY Original Contract Price $ 70,366,000 Previously Authorized Changes $ 583,278 This Change $ 5,363 Change Orders to Date $ 588,641 Percentage Increase to Date .84 % Amended Contract Price $ 70,954,641 BUDGET IMPACT ® This item has been budgeted. (Line item: Section s, CAP, P1-37) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0803\Item 12(b).P1.37.doc Revised:6/04/03 Page 2 ADDITIONAL INFORMATION None. ALTERNATIVES No alternatives are proposed. CEQA FINDINGS This project was included in the Strategic Plan EIR that was certified on October 27, 1999. A Notice of Determination was filed on October 29, 1999. ATTACHMENTS 1. Budget Information Table 2. Change Order Status Report 3. Change Order 4. Location and Photo Description of Change Order G:1wp.dta\agenda\Board Agenda Reports\2003 Board Agenda ReportM08031ttem 12(b).PI-37.doc Revised:6104M Page 3 BUDGET INFORMATION TABLE Primary Clarifiers No.16-31 and Related Facilities Job No.P7-37 ORIGINAL CURRENT PROPOSED PROPOSED FUNDS THIS PROPOSED ESTIMATED ESTIMATED PROJECT/TASK AUTHORIZED PROJECT BUDGET REVISED AUTHORIZED AUTHORIZATION TOTAL EXPENDITURE EXPENDED BUDGET BUDGET INCREASE BUDGET TO DATE REQUEST AUTHORIZATION TO DATE TO DATE(%) Phase 1-Project Development S 77.000 $ 77.000 S 77,000 S 77,000 S 76,974 100% Phase 2-Prahminafy Des n S 315.000 $ 315,000 S 315.000 S 315.000 S 315,019 100% Phase 3-Deslqn S 4.542.000 $ 4,542,000 S 4,542.000 S 4.542,000 S 4,542 932 100% Phase 4-Construction S 77.295.120 S 5.363 S 77300483 $ 77.295.120 S 5.363 S 7T300483 S 35.462,783 46% Phase 5-C..--hing S 281.880 S 281880 S 281.880 S 281.880 S 16847,383 655% Phase 6-CI0560UI S 50.000 $ 50o00 $ 50,000 S 50.000 S 744.725 1489% Conlin en S 6.000.000 $ 5 $ 5.994,637 $ PROJECT TOTAL S - S 88.561000 S - $ 88561,000 S 82.56t,000 S 5.363 S 82.566.363 I S 42.989.716 525: Re:mbursabie Coss PROJECT NET S I S 68.561,000 1 S - S 88.561,000 S 82,561.000 S 5.363 1 S 82.566.363 1 S 42.989.716 1 52 'NOTE:The Cbseout Phase anj Con ngency Phase contain e1pendltures from previous Construction Administration and Inspection Phases P r' CHANGE ORDER STATUS REPORT PRIMARY CLARIFIERS 16-31 AND RELATED FACILITIES JOB NO.P1-37 APPROVAL CONTRACT CONTRACT COST PERCENTAGE AUTHORIZED AUTHORIZED TIME ITEM DATE COST TO DATE INCREASE TIME TO DATE (DAYS) (DAYS) CONTRACT 6/23/1999 $ 70,366,000.00 $ 70,366,000.00 0.00 1400 1400 CO NO.1 12/19/2001 $ - $ 70,366,000.00 0.00 0 1400 CO NO.2 8/1/2002 $ 75.214.00 $ 70,441,214.00 0.11 49 1449 CO NO.3 10/21/2002 $ 48,736.00 $ 70,489,950.00 0.18 0 1449 CO NO.4 12/18/2002 $ 356,059.00 $ 70,846,009.00 0.68 82 1531 CO NO.5 2/26/2003 $ 33,527.00 $ 70,879,536.00 0.73 0 1531 CO NO.6 4/23/2003 $ 54,992.00 $ 70,934,528.00 0.81 21 1552 CO NO.7 6/25/2003 $ 14,750.00 $ 70,949,278.00 0.83 0 1552 CO'NO:8 !`8l27YL003`; $ : -r - 5;3Ed.00,1$': 70.954;641.00' 0 84' Approved by PDC Committee per delegated authority by Board Resolution 99-23 Approved by General Manager per delagated authority by Board Resolution 99-23 Q Page 1 of 7 ORANGE COUNTY SANITATION DISTRICT 10844 ELLIS AVENUE, P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-8127 CHANGE ORDER Contractor: Margate Construction, Inc. C.O. No.: Eight 8 Date: Auaust 27, 2003 Job: Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37 Consultant: Brown and Caldwell Amount of this Change Order (Add)(Oedect) $5,363.00 In accordance with contract provisions, the following changes in the contract and/or contract work are hereby authorized and as compensation, the following additions to or deductions from the contract price are hereby approved. ITEM 1 —SCUM GALLERY PIPE PHASING This item provides utility piping changes in the Primary Clarifiers 6-15 scum gallery in order to maintain plant operations during construction. FCO-058 provides 30 feet of 6-inch ductile iron pipe and (2) 6-inch isolation valves required for flushing the primary sludge line. FCO-069 provides (7) isolation valves in the east scum gallery in order to limit the amount of utilities affected by construction shutdowns. The valves range in size from 2-inch to 12-inch, and are installed on plant water, steam, plant air, instrument air, and potable water utilities. FCO-088 includes costs associated with the disposal of HDPE materials remaining from piping changes on Change Order 3, Item 3. The work was accomplished on contractor's force account pursuant to Section 48 (B) 2 of the General Requirements (Reference FCO-P137-058, FCO-P137-069, FCO-P137-088). ADDED COST THIS CHANGE ORDER ITEM: $8,582.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days ITEM 2 —TRICKLING FILTER OVERFLOW This item is related to Change Order 6, Item 2, which provided cleanup from a 9/16/02 accidental overflow from Trickling Filter#4. The item addresses additional work required for proper installation of HDPE piping. The additional work includes reconstruction of HDPE piping which floated as a result of the flooding. The work was accomplished on contractor's force account pursuant to Section 48 (B) 2 of the General Requirements (Reference FCO-P137-070). ADDED COST THIS CHANGE ORDER ITEM: $6,934.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days ITEM 3 —POLYMER FACILITY DUCT BANK This item removes approximately 40 feet of 36-inch abandoned electrical ductbank from the Primary Polymer Facility which was in conflict with the location of a new pipe chase. This underground duct bank was not disclosed on the contract drawings. The work was accomplished on contractor's force account pursuant to Section 48 (B) 2 of the General Requirements (Reference FCO-P137-86). ADDED COST THIS CHANGE ORDER ITEM: $2,366.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days Page 2of7 ORANGE COUNTY SANITATION DISTRICT 10844 ELLIS AVENUE, P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-8127 CHANGE ORDER Contractor: Margate Construction, Inc. C.O. No.: Eight 8 Date: August 27, 2003 Job: Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37 Consultant: Brown and Caldwell ITEM 4— PRIMARY CLARIFIERS 1 & 2 AIR VALVES This item modifies the configuration of the skum skimmer air system for Primary Clarifiers 1 and 2 (PC 1-2). The (4) 2" Pressure Reducing Valves (PRV's) are not available in the size specified by the plans, and a more expensive valve model is required. In order to minimize the cost impact, the piping configuration was modified. The modification resulted in the deletion of 3 valves and still maintained a functional system. Added work associated with this modification included changing the diameter of 70 feet of stainless steel pipe from 2-inch to 3-inch. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-87). ADDED COST THIS CHANGE ORDER ITEM: $1,077.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days ITEM 5—FRP HANDRAIL UPGRADE This item provides 3-rail handrailing in lieu of the specified 2-rail handrailing. This upgrade addresses safety concerns at the new chemical facilities, and is necessary in order to comply with District Standards. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-089). ADDED COST THIS CHANGE ORDER ITEM: $1,333.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days ITEM 6— PLENUM MANWAY This item adds a 42-inch manway to the specified plenum extension at the existing Primary Scrubber Facility. AQMD requirements limit the amount of time that scrubbers can be out of service. Per the plans, connecting the plenum extension to the existing plenum would require an extended out-of- service period. This manway allows work to occur inside the new plenum extension while it remains isolated from the existing plenum. This limits the shutdown period to the time needed for the final connection. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-091). ADDED COST THIS CHANGE ORDER ITEM: $2,955.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days A Page 3 of 7 ORANGE COUNTY SANITATION DISTRICT 10844 ELLIS AVENUE, P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-8127 CHANGE ORDER Contractor: Margate Construction, Inc. C.O. No.: Eight 8 Date: August 27, 2003 Job: Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37 Consultant: Brown and Caldwell ITEM 7— DELETE HANDRAIL GROUNDING This item deletes the grounding specified for top deck aluminum handrail. Grounding was originally provided on Contract Documents as an extra measure of protection from stray electrical currents. It was determined that this work was not necessary, and a significant cost savings was realized by deleting the work. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-092). CREDIT THIS CHANGE ORDER ITEM: $(9,000.00) TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days ITEM 8 — PAINT FERRIC CHLORIDE STORAGE TANK This item adds a finish coat of red paint to the ferric chloride storage tank (11 FTNK782). This paint was not included in the Contract Documents, and is necessary in order to match the other ferric chloride storage tanks at the District. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-094). ADDED COST THIS CHANGE ORDER ITEM: $1,758.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days ITEM 9—SLUDGE FLOW METER UNITS This item changes the units of measurement of 17 sludge flow meters from gpm (gallons per minute) to cfm (cubic feet per minute). This change will make the meters consistent with other meters within the District, and will allow a direct comparison to the sludge flow meter at the Digesters. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-095). ADDED COST THIS CHANGE ORDER ITEM: $674.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days ITEM 10— FERRIC CHLORIDE FACILITY TAG NUMBERS This item is related to Change Order 7, Item 14, which changed the equipment tag numbering system according to new District standards. This item was discovered after approval of the original Change Order, and extends the global tag change to the Ferric Chloride area. This change provides for additional programming work, and is necessary in order to comply with the latest District standards. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-096). ADDED COST THIS CHANGE ORDER ITEM: $1,402.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days Page 4 of 7 ORANGE COUNTY SANITATION DISTRICT 10844 ELLIS AVENUE, P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-8127 CHANGE ORDER Contractor: Margate Construction, Inc. C.O. No.: Eight 8 Date: August 27, 2003 Job: Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37 Consultant: Brown and Caldwell ITEM 11— PRIMARY CLARIFIERS 16A/17A OVERFLOW This item is related to Change Order 6, Item 7, which thickened the top deck walkway for conduit routing. This additional work avoids conflict with basin overflow piping in (2) locations. This item provides 40 feet of additional concrete forming and PVC liner to create an opening between the thickend deck and the overflow openings. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-097). ADDED COST THIS CHANGE ORDER ITEM: $5,506.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days ITEM 12 —SLIDE GATE OPERATOR This item provides a self-supporting operator in lieu of the specified manual operator for flow control gate 11 DGAT670. This gate controls flow to the P1-76 Tricking Filter Project, and was originally equipped with a manual operator. During Construction, the design of P1-76 was finalized, and it was determined that an electrical motor operator would be needed. As specified, the gate did not have adequate structural support for the addition of a motor operator. This new gate is self-supporting, and will accept the motor operator being added by the P1-76 project. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-099). ADDED COST THIS CHANGE ORDER ITEM: $626.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days ITEM 13— NETWORK HARDWARE This item provides credit for deletions and substitutions of various specified network hardware. The (14) modems being deleted will be provided by the District from salvage of previous projects. The (5) Ethernet PLC modules being deleted will be provided by the Outfall Disinfection Project (J-87). Changes to equipment specifications are required in order to match new District standards not available during design. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-101). CREDIT THIS CHANGE ORDER ITEM: $(22,889.00) TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days 4 Page 5of7 ORANGE COUNTY SANITATION DISTRICT 10844 ELLIS AVENUE, P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-8127 CHANGE ORDER Contractor: Margate Construction, Inc. C.O. No.: Eight 8 Date: August 27, 2003 Job: Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37 Consultant: Brown and Caldwell ITEM 14—CHEMICAL FACILITY METERS This item provides a 2-inch magmeter and 85 feet of 3/4" PVC-coated power conduit in lieu of the specified Vcone meter 11 HFIT315. The location required for this meter is in a pipe trench and subject to flooding. Because Vcone transmitters must be located below the meter, the transmitter would be subject to flooding and difficult to access. The magmeter provided by this change does not require a transmitter to be located below the meter, and avoids these problems. The costs associated with this Change Order item were negotiated with the Contractor pursuant to Section 48 (B) 1 of the General Requirements (Reference FCO-P137-102). ADDED COST THIS CHANGE ORDER ITEM: $4,039.00 TIME EXTENSION THIS CHANGE ORDER ITEM: 0 Calendar Days TOTAL ADDED COST THIS CHANGE ORDER: $5,363.00 TOTAL TIME EXTENSION THIS CHANGE ORDER: 0 Calendar Days The additional work contained in this Change Order can be performed incidental to the prime work and within the time allotted for the original Contract and any extensions to the Contract time made by this and all previously issued Change Orders. It is therefore mutually agreed that no extension of time to perform the work is required for this Change Order. District and Contractor agree that this extra work impacts the critical path scheduling of the prime work, resulting in an overall extension of time for completion of the prime work. District and Contractor agree that the added cost described above constitutes full and equitable consideration for all the impacts incurred by the Contractor, and no other direct or indirect, incidental or consequential costs, expenses, losses or damages have been or will be incurred by Contractor, except as expressly granted and approved by this Change Order. SUMMARY OF CONTRACT TIME Original Contract Date: January 7, 2002 Original Contract Time: 1,400 Days Original Completion Date: November 7,2005 Time Extension this C.O.: 0 Days Total Contract Time Extension: 152 Days Revised Contract Time: 1552 Days Revised Final Completion Due Date: April 8, 2006 Time Subject to Liquidated Damages: N/A Actual Final Completion Date: N/A P Page 6of7 ORANGE COUNTY SANITATION DISTRICT 10844 ELLIS AVENUE, P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-8127 CHANGE ORDER Contractor: Margate Construction, Inc. C.O. No.: Eight 8 Date: August 27, 2003 Job: Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37 Consultant: Brown and Caldwell Original Contract Price $ 70,366,000.00 Prev. Authorized Changes $ 583,278.00 This Change (Add) (Dedest) $ 5,363.00 Amended Contract Price $ 70,954,641.00 Page 7of7 ORANGE COUNTY SANITATION DISTRICT 10844 ELLIS AVENUE, P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-8127 CHANGE ORDER Contractor: Margate Construction, Inc. C.O. No.: Eight 8 Date: August 27, 2003 Job: Primary Clarifiers 16-31 and Related Facilities, Job No. P1-37 Consultant: Brown and Caldwell Board Authorization Date: August 27, 2003 ORANGE COUNTY SANITATION DISTRICT Recommended by: John Linder P.E., Construction Manager Date Approved by: David Ludwin P.E., Director of Engineering Date Accepted by: MARGATE CONSTRUCTION Contractor Date EDMS/ _ 4. ".q�Ls s arl..i•t� LF .0} �. 't '7 _ a'". T-�� Q rQ CD CL (D W r: It r trrr� in�c�iaomoiL. J - ; .. u it a it of mmmn_tmnfm I --• .: 1 00 Nil 41 _1 onion t ' CD ,;. N CD � I teacn co (V '.}� r, C�t'r f y/� ~�� .� .rr/ �''"� { �?' t �3.3s '�T•f, 'Fl`%F!. �..,. 7 1` r 1 i fit$' I➢ t�'j, iWW r t° Job No. P1 -37 Change Order No. 7 August 2003 Pipe Floated Due Piping in East Scum Gallery to Flooding Item 1 — Scum Gallery Pipe Phasing Item 2 — Trickling Filter Overflow Abandoned Future Pipe Duct Bank Chas(-: Plenum Extension - Under Construction Item 3 — Polymer Facility Duct Bank Item 7 - Plenum Manway Ali PDC COMMITTEE Meeting Date To Bd.of Dir. O8/07/03 08/27/03 AGENDA REPORT Item Number Item Number PDC03-46 12 c Orange County Sanitation District FROM: David Ludwin, Director of Engineering Originator: Bob Schirripa. Project Manager SUBJECT: FACILITIES MODIFICATION FOR ODOR CONTROL Il. JOB NO. J-71-3 GENERAL MANAGER'S RECOMMENDATION Approve Addendum No. 5 to the Professional Services Agreement with Black & Veatch Corporation for Facilities Modifications for Odor Control. Job No. J-71-3. providing for modifications to the Scope of Work for an additional amount of $41 .005. increasing the total amount not to exceed $613,873. SUMMARY In July 2000, the Orange County Sanitation District (District) issued a Professional Services Agreement (PSA) to Black & Veatch Corporation (B&V) to provide engineering services for Facilities Modifications for Odor Control, Job No. J-71-3. This project makes improvements to eliminate odor sources at both plants to minimize odor complaints from our neighbors. These improvements include better foul air treatment for the wastehauler dump station and solids dewatering buildings "C" and "M" at Plant No. 1 . and junction structures at Plant No. 2. The Proposed Addendum No. 5 adds or modifies the following work items to the currently approved PSA and its addenda: • Subconsultant Work: This includes work by Malefyt Land Planning for the production of construction documents. as well as SPEC Services for the preparation of Record Drawings at the end of the project as required in our Scope of Work and Engineering Design Guidelines. • Construction Submittal Review: This increases the number of submittal reviews and RFIs that B&V will need to do. • Foul Air Duct Repair: This represents B&V's support effort in the repair of the foul air duct system which came near the conclusion of the design phase. • Loop Drawings: This represents an increase in the number of loop drawings produced by B&V. The original scope was to produce 18 drawings. This grew to 57 based on a request from the District to depict all PLC inputs/outputs to the Modicon PLC panels on the Loop Drawings. • Construction Support Services: This increases the support hours, in the form of attending construction related meetings. from 40 hours to 97 hours. G:Nwp.dta%agenda\Board Agenda Reports\2003 Board Agenda Reports\08011tem 12(c).B1ackBVea1ch.doc Revised 8r10r98 Page 1 The proposed fee for the above items is $41 ,005, for a total Professional Services Agreement (PSA) amount not to exceed $613,873. PRIOR COMMITTEE/BOARD ACTIONS 1 . Board Meeting. April 24, 2002; Item #13(f): Approve a budget amendment to increase budget to $2.900.000 2. Board Meeting: July 23, 2003. Item # 16; Approve Plans & Specs and Award the Construction Contract to J.F. Shea Construction, Inc. 3. Please refer to attached PSA Status Report for other previous Board actions PROJECT/CONTRACT COST SUMMARY The attached Contract Amendment — Construction Phase Services letter from B&V dated June 11 . 2003 summarizes the scope and costs associated with the proposed Addendum No. 5. Authorization for expenditure of the excess $21 ,132 from the currently approved CIP consultant budget of $594,000 is requested. Also requested is the approval to reallocate $19.873 from Contingency to fully cover the proposed Addendum No. 5 cost of $41 ,005 as indicated in the attached Budget Information Table. BUDGETIMPACT This item has been budgeted. (Line item: Section 8 - Page 89 ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) If approval is given to move $19,873 from Contingency, then the overall budget will remain unchanged. ADDITIONAL INFORMATION The work identified in proposed Addendum No. 5 has been determined by Staff as necessary for the successful completion and implementation of Job No. J-71-3. As listed, some of this work has already been performed and this request essentially balances the books. On the other hand. the increased requirement for Construction Support Services has evolved based on direct experience with recent District projects, and Staff believes that this increased involvement by the Consultant in the Construction Phase greatly enhances the success of the project. Staff recommended approval of the proposed Addendum No. 5 to B&V in an amount not to exceed $41 .005. ALTERNATIVES Not issue Addendum No. 5. If Addendum No. 5 is not issued, work performed by Black & Veatch Corporation (B&V) will not be funded. In addition, Construction Support G:\wp.dta\agendalBoard Agenda Reports\2003 Board Agenda Repons\0801Item 12(c).81ack&Veatch.doc Revised: 8/10M Page 2 0 a Services to be provided by Black &Veatch will not perform to the extent that Staff feels d is necessary for the success of the project. CEQA FINDINGS This project was included in the District's Strategic Plan Program EIR. The EIR was certified on October 27, 1999 and a Notice of Determination was filed on October 29, 1999. In addition, a Notice of Exemption was filed with the County on July 11 , 2003. ATTACHMENTS 1. Budget Information Table 2. PSA Status Report 3. Letter from Black & Veatch, Corporation dated June 11, 2003 RC:jo:lc Wntglobal\Agenda Draft Reports\PDMAR J-71-3 080703.doc G:1wp.dtalagendalBoard Agenda Reports12003 Board Agenda Reports10803111em 12(c).B1ack&Vea1ch.doc Revised:8110198 Page 3 BUDGET INFORMATION TABLE FACILITIES MODIFICATIONS FOR ODOR CONTROL JOB NO. J-71-3 :�.'.-'i UMOINAL P M,- E TEM -1,0,- ES MATED PkOJEC17Pl4A$e —.&IT ROM mp'Tot luffl, TV. 'BU GET' Phase I -Project Development $ 14.300 $ 14,300 $ 14.300 i $ 14,300 $ 14,300 $ 14.261 100% Phase 2-Preliminary Design(Studies& Permitting $ 49.266 $ 49,266 $ $ 49,266 $ - $ $ $ (1.603) 0% Phase 3-Design(1) $ 713,000 $ 780.847 $ 19!873 $ 800720 $ 759.715 41,005 $ 800,720 $ 578,779 72% Phase 4- Constructionlinstaflation $ 2,959,421 $ 2.959.421 $ 2.959,421 $ 2,491,918 $ 2,491,918 $ 19,605 1% Phase 5 Commissioning $ 123,674 $ 123,674 $ 123,674 $ - $ Phase 6-Close-Out $ 30,91E $ 30,918 $ 30,918 $ - Contingency $ 236,738 $ 168,891 , S. (19,873) $ 149,018 $ - ,PROJECTTOTAL 1 $ 4.127,317 4.127,317 , $ $ 4,127,317 , 3,265,933 $ 41,005 , $ 3,306,938 , $ 611,042 , 18% 7— iReimbursable Costs I IPROJECT NET 1 $ 4,127,317 1 $ 4,127,317 1 $ 4.127,317 Ifl $ 3,265,933 1 $ 41,0061 $ 3.306,938 [$ 611,0421 18% (1) Note that the budget of$713,000 includes $594,000 for Consultant design services and$186,847 for District Staff hours. I EOMS/Doc Class/Class/Template/Job Budget/Budget Information Table(003717909) Professional Services Agreement Status Report FACILITIES MODIFICATIONS FOR ODOR CONTROL JOB NO. J-71-3 Total Project Budget: $4,127,317 Consultant: Black & Veatch, Corporation Start Date of Project: July 1, 2000 Date Addendum Description Cost Accumulated Costs 7/01/00 Original PSA Design engineering services for process modifications to improve odor control for existing facilities at Plant $326,306 $326,306 Nos. 1 & 2 4/26/01* Addendum Dewatering and cleaning services during inspection of $2,299 $328,605 No. 1 Distribution Structure A at Plant No. 2 6/27/01 Addendum Design engineering services to bring this job into $196,628 $525,233 No. 2 compliance with the District's November 2000 standards 7/10/01* Addendum Design engineering services to evaluate alternate and $23,935 $549,168 No. 3 develop landscaping plans for the Wastehauler Station 4/18/02** Addendum Design engineering services to produce Instrumentation $23,700 $572,868 No. 4 requirements for facility control Pending Addendum Additional design engineering services and construction $41,005 $613,873 No. 5 support services * G.M. Approved ** PDC Approved RS:jo 003750329 G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0803\Item 12(c).2.doc 08/20/03 Revised 05/14/98 BLACK & VEATCH 6 Venture,Suite 315 Black&Veatch Corporation Irvine,California 92618-3317 USA Tel:(949)753.0500 Fax:(949)753.1252 Orange County Sanitation District B&V Project 97977 Plant Nos. 1 and 2 Facilities Modifications B&V File A.2 for Odor Control, Job No. J-71-3 June 11, 2003 Mr. Matt Smith Engineering Manager Orange County Sanitation District P.O. Box 8127 Fountain Valley, California 92728-8127 Subject: Contract Amendment—Construction Phase Services. Dear Mr. Smith: Pursuant to your request, we have developed the additional fee required to complete the Construction Phase Services for Job No. J-71-3. The fee also reflects work required from two subconsultants, Malefyt Land Planning and SPEC Services. A description of the subconsultant's work is included in the attached proposal letter. Additional fee is requested for submittal and RFI review, foul air duct repair work, and meetings. The current labor effort for submittal and RFI review was given to B&V by the District in the original Request for Proposal, dated March 6, 2000, and includes budget for review of 32 submittals and 30 RFIs. This amendment updates this review time to a total of 40 submittals and 35 RFIs, which is typical for a project of this magnitude and complexity. Also, repair to the foul air duct system was added near the conclusion of the design phase due to increased deterioration of the duct work and the need to control foul air emissions. This amendment also includes B&V's effort to support this repair work. During design, Black & Veatch created ILD drawings to facilitate merging the construction drawing set to the OCSD baseline drawing set. Some information such as Model and serial number information will be input to the drawings by the Contractor. The original scope of work entailed creation of loop drawings for analog instruments only. During design, Black & Veatch was requested to create instrument loop diagrams depicting all PLC inputs/outputs to the Modicon PLC panels. As such, the drawing count increased from 18 instrument loop diagrams to 57 loop diagrams. The original estimated hours for 18 sheets was 72 hours or four hours per sheet. The additional sheets required, based on four hours per sheet, resulted in an additional 156 hours or a labor fee of $20,085. Direct expenses of $1,750 result in a total fee of $21,835 for this work. This issue was discussed with Dennis May and Jim Herberg during preparing and negotiation of Amendment No. 4. the imagine-build company- Orange County Sanitation District Page 2 of 2 Plant Nos. 1 and 2 Facilities Modifications for Odor Control, Job No. J-71-3 We would also like to bring to your attention the number of hours (40) budgeted for construction phase meetings. This budget was given to B&V by the District in the original RFP and is based on 2.5 hours per meeting for 16 meetings. Recent discussions with District CM personnel has indicated that we should allow for attendance at 75% of the construction meetings. This attendance has been validated on the J-87 project where nearly 100% of the construction phase meetings to date have been attended by the consultant at the request of the District. Based on an attendance rate of 75% and an 11 month construction period, the total number of meetings to be attended is 33 which equates to approximately 42 additional hours required for meetings. Assuming that additional support staff is needed at six of the meetings, the total additional meeting hours needed is 57. As shown in the attached spreadsheet, the additional fee for this effort is $7,890. I A summary of the fee estimate for the work is as follows. Description Total Malefyt Land Planning $600 SPEC Services $4,200 Black &Veatch $36,205 Total $41,005 We hereby request an amendment to our contract in the amount of $41,005. If you have any questions, please feel free to contact either Rich ten Bosch or me. We look forward to the successful completion of this project. Very truly yours, BLACK &VEATCH b ames H. Clark, P.E. Vice President/Project Manager enclosures Orange County Sanitation District Plant Numbers 1 &2 Facilities Modifications for Odor Control OCSD Job No.J-71-3 BV Project No.97977 Amendment No.5 Construction Phase Services Task Task Project Project Staff Lead Staff CAD Clerical/ Total Labor B&V Total NOTES Description Manager Eng. Specialist Eng. Eng. Operator Support Hours cost Expenses .8b Shop Drawing Hevlew............................ . .....8 .24 2 34 $3,860 $340 $4,200 ._..............._.......................................... _....................................__.._. -_......�.._...... ._......Sd mpald.11on ............4 6 10 $1,200 $100 µ1,500 - _. . .-._........_..._-.............._............. DuctRepair. 8 8 $880 $100 $980_ ...._........_.._.._..._... ................ ................. ._....._._. ................ .......-- .......................................................... Loo Drawin s Actual 156 $20.085 $1,750 $21,835 _...... _... ................_...... ._.....__.........................._............................. ._._...___.._ ............_..._. ......_.m. . ..m.......___.__ ._..._............_...._.......... __.._.__...._. ................................._............ Meetin s 42 1 15 1 57 $7,320 $570 $7,890 .B&V Subtotal .54 . I.......... 53 2 265 $33,345 $2r860 ,$36.205 ..........................I... .......................... ........................................................................................................................................................................ ......._............... ............,................�........................................ ................................................._.......»..._..... .............................................. ........................._......I......................... ... Malet�rt Land Planning _ _$600. __...._..._........ .............................................. ............_...................._...._.._ ......__........... ................_....._.............................................. .._ _..._............. ............................... SPEC Services 1 $4,200 _.Subconsultant Subtotal $4 800 TOTAL FEE 1 $41.005 l KUM MHLCr T I LHNW rLnweyiivu �� +• � - -- — ` Malefyt Land Planning 3434 Via Lido Suffe 250 Newport Beach,CA92&E May 15, 2003 Richard ten Bosch Black and Veach 6 Venture#315 Irvine, CA 92618-3317 PROJECT: Consulting Services for Orange County Sanitation District New Landscape Construction around the new biofllter Dear Rich: As per our conversation this letter is to affirm that 1 will provide the following professional services for Orange County Sanitation District in relation to the landscape construction documents that I prepared. I will provide the following services at S90/hr for a not to exceed amount of S600.00 + Review submittals + Reply to RF P's + Provide asbuilts Sincerely, Stephen Malefyt Landscape Architect P03--261 3434 Via Lido Suites 250 Newport Beach,CA 92663 Voice 94"75-2154 FAX 949.675-4291 Email MalefyMpacbell.net 05/2-UO3 1_4:09 FAX 714 963 ,0364, SPEC SERVICES Q002/002 i I 1' SPEC Services, fnc. 17101 Bushard Street Fountain Valley, CA 92708-2833 SERV1 ES (714) 963-8077, FAX (714) 963-0364 SiD I info®specservices.com i I May 29, 200 Black &Veitch Corporation 6 Venture, Suite 315 Irvine, CA. 0261 S Attention: Rich ten Bosch, P.E. Project Manager Subject: 1 Proposal to provide P&iD drafting support Facilities Modifications for Odor Control,Job No. J-71-3 i Mr. ten Bos,bh: SPEC Servi�es is pleased to provide a not to exceed cost of$4,200 to prepare up to nine P&ID record drawlings using Intergraph PDS 2D software, from your mark-ups for the above referenced project. We propose to perform this work on a time and material basis. We appreci4te your consideration of SPEC Services for this assignment and look forward to working w0h you. Please call me if you have any questions about our services and this proposal. i Sincerely, SPEC Serv.ces, Inc. 1 Philip . Paeterson Project Mager i i 4 i E� {f i i i i i 1 System Planning, Engineering & Coordinating PDC COMMITTEE Meeting Date To Bd.of Dir. 08/07/03 08/27/03 AGENDA REPORT Item Number Item Number PDC03-47 12 d Orange County Sanitation District FROM: David Ludwin. Director of Engineering Originator: Marc Brown. Senior Engineering Data Management Specialist SUBJECT: TRUNK SEWER MAPPING PROJECT. CONTRACT NO. 1-98 GENERAL MANAGER'S RECOMMENDATION (1) Approve a budget amendment of $180.000 for the Trunk Sewer Mapping Project, Contract No. 1-98, for a total project budget of $2,193,000; (2) Approve Addendum No. 3 to the Professional Services Agreement with Brown and Caldwell for the Trunk Sewer Mapping Project, Contract No. 1-98, providing for additional services for an additional amount of $361 ,824, increasing the total amount not to exceed $1 ,715,215. SUMMARY • The objective of the Trunk Sewer Mapping Project (TSMP) is to create accurate maps of all of the Orange County Sanitation District's (District) trunk sewer lines, and to collect information about these sewers. The graphic information will be used to produce map books to assist Staff in locating assets in the field. The tabular information will be used to update the Computerized Maintenance Management System (CMMS) to assist Staff when conducting maintenance on these assets. • At the December 2002. Planning Design and Construction (PDC) Committee Meeting. Staff informed the Committee that Addendum No. 3 would be brought forward for approval. Staff requested a proposal from Brown and Caldwell, for Proposed Addendum No. 3, and has negotiated a proposed fee increase of $361 .824. • This proposed Addendum No. 3 to Contract No. 1-98 addresses three issues that must be resolved to properly finish the project: • Include city sewer connections showing enough of the sewer line to adequately depict the configuration of the sewer network, capture requisite data, and present the new data in both electronic and hard copy map book formats. ($223,852.) • Update the graphic and tabular information associated with changes that have occurred subsequent to the start of the project or source data that was located after the data collection was completed. ($95,000) • Additional effort required to produce large scale plots, missing data investigation and attribute verification, modifications to diversion structures and approximately 95 additional sewer details. ($42,972) G:\wp.dta\agonda\Board Agenda Reports\2003 Board Agenda Reports\0603\Item 12(d(.BrownBCaldwell.doc EDMS:003750012 Revised: 06/04/03 Page 1 PRIOR COMMITTEE/BOARD ACTIONS Please refer to attached PSA Status Report for previous Board actions. PROJECT/CONTRACT COST SUMMARY As indicated in the attached Budget Information Table. authorization of $361 .824 is requested for the existing Professional Service Agreement (PSA) with Brown and Caldwell. BUDGET IMPACT ❑ This item has been budgeted. 0 This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) Under Consultant PSA, a budget increase of $180,000 is being requested for additional mapping of city sewer lines for Addendum No.3. and field survey work of approximately $150,000 that will be carried out using existing blanket survey contracts. The survey work is necessary to meet the accuracy requirements defined in the scope of work. Under Design Staff. $94.000 is being transferred for staff time such as submittal reviews and additional meeting to support the increase in the scope of work. The proposed total project budget would increase by $180.000 to $2,193,000. ADDITIONAL INFORMATION This proposed Addendum No. 3 to Job No. 1-98 addresses three issues that must be resolved to properly close out the project: 1 . Add City Sewer Connections ($223.852) The objective of the Trunk Sewer Mapping Project (TSMP) is to create accurate maps of all of the Orange County Sanitation District's (District) owned or maintained trunk sewer lines. and to collect information about these sewers. The graphic information will be used to produce map books to assist Staff in locating assets in the field. The tabular information will be used to update the Computerized Maintenance Management System (CMMS) to assist Staff when conducting maintenance on these assets. Through the execution of the TSMP. Staff identified the need to present map users with information about city, and possible other third party connections to the District's sewer collection system. The current maps, though extremely valuable. do not adequately represent the sewer network configuration required when preparing maintenance planning, ownership research, underground service alert, odor compliant response, manhole inspection, flow modeling, engineering design planning, permit issuance, urban run off management, and source control activities. G:\wp.dta\agenda\Board Agenda Reports',2003 Board Agenda Reports\0803\Item 12(d).BrownBCa1dwe11.doc EDMS:003750012 Revised: 06/04W Page 2 The following Scope of Work was developed to meet the requirements for third party connection data identified by Staff. This Scope of Work includes the following tasks: • Project Management and Controls: Brown and Caldwell will provide comprehensive project management and controls for the duration of this work. • Technical Meetings: Brown and Caldwell will provide the necessary material to conduct five anticipated technical meetings. • Data Modeling: Determine how the new data will be stored and displayed in the TSMP datasets. • Spatial Correction: Correct the spatial placement of requisite data elements within the source data sets. • Data Migration: Migrate requisite attribute data from the existing data sources to the TSMP datasets. • Data Presentation: Manage and present new data in both electronic and hard copy map book formats. • Alternative Data Collection: Collect attributes and spatial information that was not obtainable from the standard data sources. • Quality Assurance and Control: Conduct a quality evaluation of the resulting datasets to ensure the quality objectives have been met. 2. Update Maps and Databases with New Information ($95,000). This task will update the graphic and tabular information associated with changes that have occurred subsequent to the start of the project, and will add new data that was located after the data collection was completed. 3. Miscellaneous Additional Work ($42,972). This work includes additional effort required to produce large scale plots, missing data investigation and attribute verification. Additionally, modifications to diversion structures and approximately 95 additional detailed drawings of complex pipe connectors will be produced. The cost of this work has been offset by reducing the scope of work. Through the execution of the Trunk Sewer Mapping Project (TSMP), Staff identified that minimal value would be gained by proceeding with the correlation of TSMP manhole numbers with Long Term Flow Monitoring, Strategic Plan and historical CMMS manhole numbers. In addition, Staff eliminated the elevation correction component of the project. ALTERNATIVES Not collecting information on city sewer connections. This option could lead to mistakes and inefficient operations of the sewer system due to inaccurate information. G:\wp.dta\agenda\Board Agenda Reports12003 Board Agenda Reports\080341tem 12(d).BrownBCa1dwe11.doc EDMS:003750012 Revised: 06/04/03 Page 3 CEQA FINDINGS The project prepares paper and electronic data and is categorically exempt from CEQA. ATTACHMENTS 1. Budget Information Table 2. PSA Status Report MAB:sa G:\ntglobal\Agenda Draft Reports\PDC\1-98 Agenda Report July 03.doc G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0803\11em 12(d).Brown&Caldwell.doc EDMS:003750012 Revised: 06/04/03 Page 4 BUDGET INFORMATION TABLE Trunk Sewer Mapping Project Contract No.1-98 ORIGINAL CURRENT .PROPOSED PROPOSED FUNDS THIS PROPOSED ESTIMATED ESTIMATED PROJECT7TASK AUTHORIZED PROJECT BUDGET REVISED. AUTHORIZED AUTHORIZATION TOTAL EXPENDITURE EXPENDED BUDGET BUDGET INCREASE BUDGET TO DATE REQUEST AUTHORIZATION TO DATE TO DATE(%) Phase 1-Project Deve ment S 3,000 S 3.000 S 3,DCO S 3.000 S 3.000 103% Phase 2-PreCminary Devon $ 2,000 S 2.000 S 2=0 S 2.000 S 2.000 100% Phase 3-Desi n 5 1.684.000 S 180.000 S 1.864,000 1 S 1.353.391 IS 361.824 S 1.715.215 S 1177,775 69% Phase 4.ConMwcton d lnstallat— S 230000 S 94000 $ 324,000 S 230.000 S 94,0D0 S 324.000 S 267.864 83% Phase 5-Commimw S 287,000 S S Phase 6-Closeout S 67,D00 S 10.000 $ (10,000) S S Conhnaency I$ 7,000 S 84,000 S 84.000 S S PROJECT TOTAL S 36t.000 S 2,013.000 S 180.000 $ 2.193,000 S 1588,39, S 455.824 S 2.044.215 S 1450.639 719; Hevcassan'e Cosu PROJECT NET S 361,000 S 2013.000 S 1110,000 S 2,193.000 1$ 1.588.391 1 S 455.824 S 2,044,215 1 S 1450,639 1 71% C f,WNrYII Pl,W9tlWl T04DW e5lPfbcts Professional Services Agreement Status Report Trunk Sewer Mapping Project Contract No. 1-98 Total Project Budget: $2,013,000 Consultant: Brown and Caldwell Start Date of Project: May 21, 2001 Accumulated Date Addendum Description Cost Costs 4/25/01 Original PSA Development of paper and electronic $1 ,166,000 $1,166,000 trunk sewer maps of the District Service Area. 5/24/02 Addendum 1 Additional enhancements that were not $24,265 $1,190,265 included in the Scope of Work. 2/10/03 Addendum 2 Additional effort required to meet project $163,126 $1,353,391 objective and not identified in Scope of Work. Pending Addendum 3 Addition of third party connections, $361,824 $1,715,215 change management updates and miscellaneous additions. EDMS 003742672 PDC COMMITTEE Meeting Date To Bd.of Dir. 08/07/03 08/27/03 AGENDA REPORT Item Number Item Number PDC03-48 12 e Orange County Sanitation District FROM: David A. Ludwin, Director of Engineering Originator: Pamela Koester, Project Manager SUBJECT: COOPERATIVE PROJECTS PROGRAM, JOB NO. J-73 GENERAL MANAGER'S RECOMMENDATION (1) Approve an increase for the City of La Habra Cooperative Projects Contract No. CP-0106 in the amount of $13,600, for a revised contract amount of $107,350. and Contract No. CP0108 in the amount of $60,000, for a revised contract amount not to exceed $100,000, increasing the total approved contracts under the Cooperative Projects Program from $17,394,388 to $17.467,988-. (2) Approve time extensions of 18 months to Cooperative Projects Program contracts as follows: Brea (CP-0101 ), Cypress (CP-0001 , CP-0103. and CP-0123). Fountain Valley (CP-0002 and CP-0104), Garden Grove (CP-0003 and CP-0119), La Habra (CP-0106, CP-0126 and CP-0127), Midway City SD (CP-0128), Orange (CP-0011), Santa Ana (CP-0016), Seal Beach (CP-0110) and Villa Park (CP-0113 and CP-0114); and (3) Approve a revision of the Program contract amendment template language to increase time extensions from 6 months to18 months. SUMMARY • The Cooperative Projects Program provides funds to local agencies for projects that reduce or eliminate inflow and infiltration (1/1) to the sewer collection system. • Agencies were not able to complete their Master Plans and 1/1 Reduction Plans last year because they could not collect rain dependant 1/1 data due to lack of rain. As such, they were issued contract amendments to extend the completion dates for these projects. Since only one company was responsible for collecting the 1/1 data for these agencies, it was not possible for this company to deliver the information to the agencies in time to meet the revised completion dates. Now the agencies are requesting additional time (i.e., Contract Amendment Nos. 1 , 2, 3 or 4) to complete the projects. • Due to the lack of rain last winter, the City of La Habra was only able to collect dry weather flow data under Contract CP-0106. In order to complete the 1/1 Reduction Plan, they need additional funds in the amount of $13.600 to collect the required flow data. In addition, the City's consultant's estimate to complete the Master Plan was $60,000 greater than the funds requested by the City for CP-0108. The Guidance Review Committee (GRC) recommends approval of these additional funding requests. • A few agencies are requesting time extensions because funding or resources were not available to complete their projects in accordance with the approved schedules. • In order to minimize the effort required by both the Orange County Sanitation District (Distict) and local agencies to process contract amendments, the Guidance r Review Committee (GRC) recommends that the amendment period allowed in the existing standard contract language be extended from 6 months to 18 months. PRIOR COMMITTEE/BOARD ACTIONS N/A PROJECT/CONTRACT COST SUMMARY See the attached Budget Information Table. At this time, authorization for expenditure of $73,600 is being requested for two existing Cooperative Projects Program (Program) projects. If approved. the total Program approved funding for Cooperative Projects Contracts would increase from $17,394,388 to $17.467,988. BUDGETIMPACT This item has been budgeted. (Line item: Section 8, Page 141) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) The total budget for the Program Job No. J-73 was reduced from $142,675,600 to $72,000,000 for FY 2003-2004. The remaining budget will be spent over the next 15 years on projects that reduce inflow and infiltration (1/1) throughout the District. The overall revised budget total remains unchanged. ADDITIONAL INFORMATION Budget Amendments The Program requires agencies to prepare a Master Plan that has an 1/1 Reduction Plan component in it. The purpose of the 1/1 Reduction Plan is to identify and prioritize sources of 1/1 within each agency. In order to do this, agencies must conduct both dry weather and wet weather flow monitoring. In the winter of 2001-2002, the City of La Habra conducted a flow monitoring program as part of the 1/1 Reduction Plan. They used a substantial portion of the allocated funds to collect both dry and wet weather flow data. Due to the lack of rain, however, they were not able to collect any wet weather flow data. Now they will need additional funds this winter to collect and analyze the necessary wet weather flow data. The GRC recommends approval of an increase in funding for CP-0106 from $93,750 to $107.350 for a total increase of $13.600. The lack of rain made it impossible for the City to complete the Master Plan under CP-0108. In addition. when the City obtained proposals from consultants, it was determined that they had significantly underestimated the cost of the Master Plan given the Program's inflow and infiltration (1/1) Reduction Plan requirements. Revised: 8/20101 Page 2 e The Guidance Review Committee (GRC) recommends approval of an increase in funding for CP-0108 from $40,000 to $100,000 for a total increase of $60,000, to cover the additional cost of the Master Plan and flow analyses. Time Extensions Time extensions are being requested by ten agencies for a total of seventeen (17) projects. The projects and requested extensions are summarized in Table 1. The Guidance Review Committee (GRC) recommends approval of these time extensions. TABLE 1 SUMMARY OF REQUESTED TIME EXTENSIONS AGENCY CONT APPROVED NEW NEW AMEND REASON FOR NO. COMPLETE COMPLETE INVOICE NO. REQUEST DATE DATE DATE Brea CP-0101 5/2/2003 11/3/2003 12/1/2003 2 Delay in review and interpretation of data Cypress CP-0001 7/3/2003 1/5/2004 2/2/2004 4 Delay in review and interpretation of data Cypress CP-0103 5/28/2003 1/5/2004 2/2/2004 2 Delay in review and interpretation of data Cypress CP-0123 5/29/2003 1/5/2004 2/2/2004 2 Delay in review and interpretation of data Fountain CP-0002 6/6/2003 12/5/2003 1/5/2004 3 Delay in review and Valley interpretation of data Fountain CP-0104 6/6/2003 12/5/2003 1/5/2004 2 Delay in review and ValleV interpretation of data Garden CP-0003 7/1/2003 1/5/2004 2/2/2004 3 Delay in review and Grove interpretation of data Garden CP-0119 7/1/2003 7/1/2004 7/29/2004 2 Need to conduct wet Grove weather flow monitoring La Habra CP-0106 6/13/2003 10/29/2004 11/26/2004 2 Requires additional flow monitorinq data La Habra CP-0126 3/10/1003 3/10/2005 4/7/2005 1 Needs time to do 1/1 study to pinpoint rehab area La Habra CP-0127 6/9/2003 6/9/2005 7/7/2005 1 Needs time to do 1/1 study to pinpoint rehab area Midway CP-0128 7/31/2003 5/31/2004 6/28/2004 1 Delay in review and City SD interpretation of data Orange CP-0011 4/30/2003 10/30/2004 11/27/2004 3 Delay in review and interpretation of data Santa CP-0016 6/30/2003 12/31/2003 1/30/2004 3 Delay in review and Ana interpretation of data Seal CP-0117 5/30/2003 11/28/2003 12/26/2003 3 Delay in contractor Beach completing work Villa Park CP-0113 6/30/2003 12/30/2003 1/27/2004 2 Delay in contractor completing work Villa Park CP-0114 6/30/2003 12/30/2003 1/27/2004 2 Delay in review and inte retation of data Contract Amendment Time Extensions Revised: 8/20/01 Page 3 A Approving contract amendments is a time consuming process for both the Orange County Sanitation District (District) and local agencies under the current Cooperative V Projects Program (Program) requirements. Thus far, local agencies have not been able to accurately define their project schedules because of unforeseen circumstances such as lack of rain, insufficient resources and budgetary issues. As a result, the District is issuing amendments on a regular basis to almost all agencies that have Program contracts. Given the uncertainties in this type of work, the Guidance Review Committee (GRC) recommends that the amendment periods be extended from 6 months to 18 months. In this way, the amount of paperwork can be minimized and the local agencies can receive reimbursements in a more timely fashion. ALTERNATIVES Do not approve the time specific time extensions. Not approving the time extensions would not allow the District to provide funding to local agencies for completion of their projects and identifying inflow and infiltration (1/1) within their boundaries. Do not approve the additional funding request for the City of La Habra. This alternative will not allow for implementation of the 1/1 reducing measures identified in the Strategic Plan. Ultimately, rejecting this project could hinder the long term goal of reducing 1/1 by 20% and result in additional treatment costs. Do not approve the amendment extension from 6 to 18 months. Not approving the extension will result in continued excessive paperwork and potential delay in agencies receiving reimbursement from the District. CEQA FINDINGS Local agencies are responsible for CEQA compliance. ATTACHMENTS Budget Information Table PK:sa: G:lntglobal\Agenda Draft Reports\PDC\J-73 Agenda Report 5-7-03.doc Revised:8/20/01 Page 4 ti BUDGET INFORMATION TABLE COOPERATIVE PROECTS PROGRAM JOB/CONTRACT NO.J-73 ORIGINAL CURRENT PROPOSED PROPOSED FUNDS THIS PROPOSED ESTIMATED ESTIMATED PROJECT?ASK AUTHORIZED PROJECT BUDGET REVISED AUTHORIZED AUTHORIZATION TOTAL EXPENDITURE EXPENDED BUDGET BUDGET INCREASE BUDGET TO DATE REQUEST AUTHORIZATION TO DATE TO DATE(%) Pnasa 1 Pro ect Davewpnwm Pnace 2-N.—my 0oS n Phase 3 Oe Phew 4-Comm — 6 inswauon S 149 990 000 S 72 000.000 S 72 000.000 S 17 989,623 S 73.600 S 18.053223 S 5027470 2 8•.;. Phase 5 Phase 6-Cbso-out Pm-7 Contnqancy PROJECT TOTAL S 149.990.000 S 72000.000 S 72.000.000 S •7.989,623 S 73,600 S 18.063,223 S 5.027470 28% R—t-...I-Cons I I I I I I 4 91.959 PROJECT NET I$ 149.990 002 1 S 72.000 000 S 72 000.000 1 S 17.989.623 1 S 73.600 1 S 18 C-Q,223 I S 4.935 51'1 27 for 871iO3 Agenda Report EDus am751210 PDC COMMITTEE Meeting Date To Bd.of Dir. 8/7/03 8/27/03 AGENDA REPORT Item Number Item Number PDC03-50 12 Orange County Sanitation District FROM: Dave Ludwin, Director of Engineering Originator: Dean Fisher, Senior Engineer SUBJECT: PROFESSIONAL SERVICES AGREEMENT ADDENDUM NO. 5 FOR STANDBY POWER AND RELIABILITY IMPROVEMENTS TO TREATMENT PLANT NOS. 1 AND 2, JOB NO. J-33-1 GENERAL MANAGER'S RECOMMENDATION Approve Addendum No. 5 to the Professional Services Agreement with SPEC Services, Inc. for Standby Power and Reliability Improvements to Treatment Plant Nos. 1 and 2, Job No. J-33-1 , providing for additional engineering services for an additional amount of $214,500, increasing the total amount not to exceed to $2,983,763. SUMMARY • This project upgrades or replaces many existing electrical equipment items at both treatment plants that were determined to be deficient by prior electrical studies. • One scope item. the Plant No. 2 Headworks Standby Power Facility. has already been constructed in order to meet Y2K readiness requirements. The Construction Contract for that facility was designated as J-33-1 . The remaining portions of the original design scope have been designated as J-33-1 A. SPEC Services, Inc. has finished the design for J-33-1 A, and that portion of the project has been in construction since July 2001 . • Due to limited manpower, the Engineering Department has been utilizing SPEC Services to provide construction contract management services throughout the construction period. This addendum extends these construction services for one additional year in order to complete the work on J-33-1 A. A proposal letter from SPEC Services. Inc. is attached indicating an amount of $214.500 to provide staffing for the anticipated additional one-year span of construction. PRIOR COMMITTEE/BOARD ACTIONS Please refer to the attached Professional Service Agreement (PSA) Status Report for all previous General Manager, Committee, and Board actions. PROJECT/CONTRACT COST SUMMARY Refer to the attached PSA Status Report for a summary of costs associated with the PSA and this pending Addendum No. 5. No new facilities will be constructed as a result of Addendum No. 5. G:twp.dtalagenda\Board Agenda Reports'2003 Board Agenda Reports'0803Utern 12(t).SPEC Services.dcc Revised: 06/04/03 Page 1 BUDGETIMPACT 0 This item has been budgeted. (Line item: CIP. Section 8. Page 77) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) ADDITIONAL INFORMATION Background Job No. J-33-1 , Standby Power and Reliability Improvements, involves the upgrade or replacement of many existing electrical equipment items at both treatment plants that were determined to be deficient by prior electrical studies. The Board awarded a PSA to SPEC Services. Inc.. at the September 1998 meeting. The original design Scope of Work called for preparation of drawings, specifications, cost estimates, and support services during construction for all items listed in the project scope. In October 1999. the Board approved Addendum No. 1 to the PSA for additional work elements required for implementing the accelerated schedule for the Plant No. 2 Headworks Standby Power Facility, and for support of MCC replacements and Central Generation generator control wiring revisions. In December 2000, the Board approved Addendum No. 2 to the PSA for construction contract management services to support the construction of J-33-1 A. Addendums 3 and 4 were approved by the General Manager in May 2002 and June 2002. for incidental work associated with J-33-1 A to research and review area classification issues. Construction Project Management Staffing At the start of the construction of J-33-1 A, limited staffing necessitated that the District search for outside sources for the construction contract management. Addendum No. 2 was issued to provide staffing through SPEC Services using the same engineer who designed the project. This was done due to the complexity of the project. the knowledge and experience of the SPEC engineer and the familiarity with the project and with District staff. This project is critical and affects a large portion of the Plant and there is a significant amount of coordination between the contractor and other District departments as well as coordination between other ongoing construction projects. Work on this project requires close coordination between J-35-2 and P2-47-3 which are currently working in similar areas and all of which effect the plant operation. The service provided by SPEC in this area has been very effective and it is staff's request that this service continue until the G:mp.d1magendMBoard Agenda Reports\2003 Board Agenda Reports.080311em 12(q.SPEC Services.doc Revised: 06)04iO3 Page 2 project is completed to maintain a continuum of project communication and technical guidance. ALTERNATIVES The Construction Management Division could hire permanent staff or use the services of IPMC to staff this project. New staff would not as qualified nor have the continuum of job knowledge as the SPEC Services staff. CEQA FINDINGS This project is included in the Strategic Plan EIR, certified on October 27, 1999. A Notice of Determination was filed on October 29, 1999. ATTACHMENTS 1. Budget Information Table 2. Professional Services Agreement Status Report 3. Proposal Letter from SPEC Services, Inc. dated October 31, 2000 DF:Ic GAwp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\08031dem 12(Q.SPEC Services.doc Revised: 06/04/03 Page 3 d i BUDGET INFORMATION TABLE STANDBY POWER AND RELIABILITY IMPROVEMENTS JOB NO. J-33-IA ORIGINAL CURRENT PROPOSED PROPOSED FUNDS THI§ bSED ESTIMATED ESTIMATED PROJECT/TASK AUTHORIZEDBUDGET PROJECT BUDGET BUDGET INCREASE B D'GED A�mOA7 0*6 '/1UTF 0 I f kT�TAI.: EXPENQITURE TO EXPEND Q' 3 aE hU1'EIIRIZpTit)1V MATE TO'DAT§(°�)' } $ _f Phase 1 -Project Development $ 458,000 $ 458,000 $ 455,000 $ 455,000 $ 457,241 100% Phase 2-Preliminary Design $ 374,000 $ 374,000 $ 374,000 $ 374,000 $ 373,566 100% Phase 3-Design $ 3,153,000 $ 3,153,000 $ 3,153,000 $ 3,153,000 $ 3,078,128 98% Phase 4-Construction $ 13,063,000 $ 214,500 $ 13,277.500 $ 13,063,000 * $ 214,500 $ 13,277,500 $ 7.980,152 60% Phase 5-Commissioning $ 63,000 $ 63,000 $ 63,000 $ 63.000 $ 441,962 702% Phase 6-Closeout $ 32,000 $ 32,000 $ 32,000 $ 32,000 $ 635,276 1985% Contingency $ 500,000 $ 214,500 $ 285,500 PROJECT TOTAL $ 19,856,000 $ 17,643,000 $ - $ 17.643,000 $ 17,140,000 $ 214,500 $ 17,354,500 $ 12,966,325 75% Reimbursable Costs PROJECT NET $ 19,856,000 $ 17,643,000 1 $ - $ 17,643,000 $ 17,140,000 $ 214,500 $ 17,354.500 $ 12,966,325 75% ' Note:In addition to the J-33-1A construction contract,the Construction Contract amount above includes$1,561,901 for the J-33-1 construction contract and$1,432,605 to purchase the equipment installed as part of the J-33-1 work. " Note: Phase 5 and Phase 6 contain previous phase costs for Construction Administration and Inspection respectively. EDMS:003751251 Professional Services Agreement Status Report Standby Power and Reliability Improvements to Treatment Plants No. 1 & No.2 Job No. J-33-1 Total Project Budget: $ 2,983,763 Consultant: Spec Services, Inc. Start Date of Project: 09/23/1998 Date Addendum Description Cost AccumulatedCosts 09/23/1998 Original Standby Power & Reliability Improvements, $ 2,121,748 $ 2,121,748 PSA Job. No. J-33-1 10/27/1999 1 Additional Work on MCC's, Cengen Controls, $ 229,187 $ 2,350,935 Plant No. 2 Headworks Standby Facility 12/20/2000 2 Construction Project Management Support for $ 370,058 $ 2,720,993 Construction Contract J-33-1 A 5/30/2002 3 Addition of Ventilation & LEL Gas Detection at $ 24,770 $ 2,745,763 Plant-2 Gas Compressor Building Preparation of a Report Outlining NPFA Options 6/25/2002 4 for Coordinated Implementation of J-33-1 A $ 23,500 $ 2,769,263 Remediation Measures. Pending 5 Construction Project Management Support for $ 214,500 $ 2,983,763 Construction Contract J-33-1 A. EDMS 003751253 08/20/03 Revised 05/14/98 ` SPEC Services, Inc. 17101 Bushard Street !=LW Fountain Valley, CA 92708-2833 SERVICES (714) 963-8077, FAX (714) 963-0364 info@specservices.com July 18, 2003 Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 Attention: Mr. David A. Ludwin, P.E. Director of Engineering Subject: Provide Construction Support Services for Standby Power and Reliability Improvements, Job No. J-33-IA PSA Addendum Number 5 Dear Mr. Ludwin: SPEC Services, Inc., is pleased to provide a budgetary cost of $214,500 in response to your request to provide a resident engineer during construction of the above referenced project. Our proposed budget is based upon your request for proposal dated July 14, 2003 and will cover the period the period of August 1, 2003 to July 31, 2004. Our proposed budget is comprised of the following components: Consulting Services: Burdened Labor $ 126,680 Overhead at 58% 73,470 Profit at 6.8% 13,600 Subtotal Consulting Services: $ 213,750 Vehicle Allowance: 750 Total not to exceed: $ 214,500 We would be happy to discuss this request to clarify your questions or concerns. Please feel free to call me at (714) 963-8077 ext. 1115. Sincerely, SPEC Services, Inc. •' /4"z4L__ Charles W. Lake, P.E. Vice-President PMP/CWL:ds cc: Kim Henry, Phil Peterson—SPEC Project file System Planning, Engineering & Coordinating -H:\D0C\1943S1\I843S1 extend end Itr.d« J-33-1A - Addendum No. 5 Estimate lEstimate Basis: Average of billable time for Ed Triggs from the last twelve months plus escalation of 5%to produce an annual budget for the period August 1,2003 to July 31,2004. Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 $14,268.31 $20,213.20 $15,531.07 $14,160.70 $14,503.26 $18,957.00 $18,157.62 $16,787.24 $17,586.63 $17,757.94 $19,642.22 $15,987.86 16,962.75 Monthly Average 848.14 5%Escalation 17,810.89 Estimated Monthly Total 213,730.70 Annual Labor Total Mileage $per mile miles per weeks per week year 0.36 40 52 748.80 Annual Vehicle Allowance 214,479.50 Total 214,500.00 Annual Budget PDC COMMITTEE Meeting Date To Bd. of7Dir.08/07/03 08/27/0 ' AGENDA REPORT Item Number Item Number PDC03-51 12(g) Orange County Sanitation District FROM: David Ludwin, Director of Engineering Originator: Hardat Khublall, Project Manager SUBJECT: PREPARATION OF AN EMERGENCY RESPONSE PLAN FOR THE SANTA ANA RIVER INTERCEPTOR FROM ORANGE/RIVERSIDE COUNTY LINE TO SAVI RANCH GENERAL MANAGER'S RECOMMENDATION Approve an amount of $30,000 for reimbursing the Santa Ana Watershed Project Authority for the preparation of an Emergency Response Plan to comply with the Regional Water Quality Control Board tentative Cease and Desist Order. SUMMARY • The Regional Water Quality Control Board (RWQCB) has issued upon Orange County Sanitation District (OCSD) and Santa Ana Watershed Project Authority (SAWPA) a tentative Cease and Desist Order, thereby requiring both Agencies to address the risk of a break in the Santa Ana River Interceptor (SARI) line. One of the corrective actions requested is to prepare an Emergency Response Plan (ERP) that could be implemented in case of a pipeline failure. The deadline for submittal of this plan to the RWQCB is November 30, 2003. • OCSD and SAWPA have committed to the RWQCB to meet the deadline for submittal of the ERP for the SARI downstream of Prado Dam between the Orange County line and SAVI Ranch ("Subject Reach"). Due to the limited time available. Staff has proposed that SAWPA contract directly with a consultant. This request was accepted by SAWPA, and at SAWPA's Technical Committee of General Managers meeting on July 8, 2003, a task order with Camp Dresser & McKee, Inc. was approved for the preparation of the ERP. • All consultant's costs for the preparation of the ERP will be split with SAWPA based upon a 76/24 percent, SAWPA/OCSD cost share. PRIOR COMMITTEE/BOARD ACTIONS N/A PROJECT/CONTRACT COST SUMMARY Authorization of $30.000 from the District Operating Expenses for FY2003-04. G.,wp,dta\agenda�Board Agenda Repors,2003 Board Agenda Reports10801Item 12(g).SAWPA.doc Page 1 6 BUDGET IMPACT ❑ This item has been budgeted. ` ❑ This item has been budgeted. but there are insufficient funds. 0 This item has not been budgeted. ❑ Not applicable (information item) ADDITIONAL INFORMATION None ALTERNATIVES No alternatives are proposed. CEQA FINDINGS N/A ATTACHMENTS Copy of RWQCB Cease and Desist Order No. R-2003-0055 — Waste Discharge Requirements Order No. 98-5 for Orange County Sanitation District (NPDES No. CA0110604). HK:sa G:ntglobal Agenda Dratt ReportsPDC`,2-41 ERP AR 071003.doc &mp.dta\agenda\Board Agenda Reports'0003 Board Agenda Reports10803Htem 12(g).SAWPA.doc Page 2 S 0 California Regional Water Quality Control Board Santa Ana Region Winston H.Hiekox Internet Address: http;//wviw.swrcb.c2.gov/rwqcbg Cray Davis Secretary for 3737 Main Street,Suitt:500,Riverside,California 92501-3339 Governor Environmental Phone(909)782-4130 c-FAX(909)781-6288 Protection The energy challenge facing California is reaL Every Californian needs to take immediate action to reduce energy consumption. For a list ofsimple ways you can reduce demand and cut your energy costs,see our website at www.swrcb.ca.gov/rwgcb& April 22, 2003 CERTIFIED MAIL RETURN RECEIPT REQUESTED Mr. Robert P. Ghirelli, D.Env. Director of Technical Services ORANGE COUNTY SANITATION DISTRICT P.O. Box 8127 Fountain Valley, California 92728-8127 CEASE AND DESIST ORDER NO. R8-2003-0055 - WASTE DISCHARGE REQUIREMENTS ORDER NO. 98-5 FOR ORANGE COUNTY SANITATION DISTRICT (NPDES NO. CA0110604) Dear Mr. Ghirelli: This is to transmit a copy of tentative Cease and Desist Order (CDO) No. R8-2003- 0055. The proposed CDO directs the Orange.County Sanitation District (OCSD) and the Santa Ana Watershed Project Authority (SAWPA) to address the threatened release risk posed by the conditions under which a segment of the Santa Ana River Interceptor (SARI) is being operated. The SARI line segment is located within the floodplain of the Santa Ana River, specifically within the Santa Ana Canyon. By continuing to operate the SARI line segment under conditions that threaten to cause a break in the SARI line, SAWPA and OCSD threaten to violate the sewage discharge prohibition contained in the Water Quality Control Plan for the Santa Ana River Basin (Basin Plan), 1995 edition. Also, OCSD threatens to violate discharge requirement contained in Waste Discharge Requirements Order No 98-5. Consideration of Cease and Desist Order No. R8-2003-0055 is scheduled for the Board's May 16, 2003, meeting at the City of Santa Ana's Council Chambers. If you wish to discuss this matter further, please call me at (909) 782-3284, or have your staff call Gary D. Stewart, Surveillance and Enforcement Section Chief, at (909) 782-4379, or Julio C. Lara, Surveillance and Enforcement Section staff engineer, at (909) 782- 4901. California Environmental Protection Agency AMo---- a 0 Robert P. Ghirelli CDO No. R8-2003-0055 -2 - April 22, 2003 Sincerely, v -�r Gerard J. Thibeault Executive Officer Enclosure: CDO No. R8-2003-0055 cc: w/enclosures U.S. EPA-CWA Compliance Office(WTR-7), Tom Huetteman State Water Resources Control Board—Office of the Chief Counsel, Jorge Leon State Water Resources Control Board —Division of Water Quality, Jim Kassel Orange County Coastkeeper City of Yorba Linda, Jim-Winder California Department of Fish and Game United States Army Corps of Engineers, Rene Vermeeren Santa Ana Watershed Project Authority, P. Joseph Grindstaff Western Municipal Water District, Norman Thomas Orange County Health Care Agency Orange County Public Facilities Resources Department, Herb Nakasone Regional Board jcUsarifinecdo-r8-2003-0055.cov California Environmental Protection Agency a e California Regional Water Quality Control Board Santa Ana Region CEASE AND DESIST ORDER NO. R8-2003-0055 for Santa Ana Watershed Project Authority and Orange County Sanitation District The California Regional Water Quality Control Board, Santa Ana Region (hereinafter Regional Board),finds that. 1. The Santa Ana Watershed Project Authority (hereinafter SAWPA) is a joint powers Authority composed of five agencies: Inland Empire Utilities Agency, Orange County Water District, Eastern Municipal Water District, Western Municipal Water District, and San Bernardino Valley Municipal Water District. SAWPA was first formed in 1968 as a planning agency, and reformed in 1972 with a mission to plan and build facilities to protect the water quality of the Santa Ana River watershed. The agreements formalizing the current agency were signed in 1974 and went into effect in 1975. 2. The Orange County Sanitation District (hereinafter OCSD) owns and operates a publicly owned treatment works (POTW) that includes wastewater collection system and treatment facilities. The treatment facilities serve twenty-one cities and unincorporated areas of northern and central Orange County. In addition, OCSD receives brines, sewage, and other waste through the Santa Ana River Interceptor (hereinafter SARI), which collects waste from the western areas of San Bernardino and Riverside Counties. 3. OCSD operates Sewage Treatment Plant No.1, with a primary treatment design capacity of 108 million-gallons-per-day (MGD) and 96 MGD of secondary treatment capacity, and Sewage Treatment Plant No. 2 with a primary treatment design capacity of 168 MGD and 90 MGD of secondary treatment capacity. The OCSD's final effluent is composed approximately of a 50%-50% blend of primary treated and secondary treated wastewater. OCSD disposes of its effluent in the Pacific Ocean approximately 4.5 miles off the Huntington Beach coast through a 120-inch diameter underwater pipeline. 4. The SARI line is a buried pipeline that was originally designed to carry saline wastewater from the Santa Ana River watershed's Upper Basin to OCSD's sewage treatment plants for disposal into the Pacific Ocean. Currently, wastewater conveyed by the SARI line includes desalter brines, 0 CDO No.R8-2003-0055 Page 2 of 6 May 16,2003 OCSD and SAWPA saline wastewater from industrial users, treated groundwater from the Stringfellow site, wastewater from industrial users, and domestic sewage from tract homes. The SARI line extends for 73 miles branching into several areas of Riverside and San Bernardino counties. The capacity of the SARI line available to SAWPA is 30 million gallons per day (MGD). According to OCSD flow records, the daily average discharge during fiscal year 2000/2001 was 8.2 MGD. 5. SAWPA owns and operates the SARI line in the Santa Ana River watershed's Upper Basin down to the Riverside/Orange County line and has purchased 11 MGD of capacity rights at OCSD's treatment facilities. OCSD owns and operates the SARI line within the Santa Ana River watershed's Lower Basin, from the Riverside/Orange county line, west of the City of Corona, to their treatment facilities. Immediately west of the Riverside/Orange county line, and parallel to state route 91, a section of the SARI line enters and runs along the Santa Ana River floodplain and sometimes crosses underneath the live riverbed. This section of the SARI line extends from the Green River Golf course to Weir Canyon Road within the Santa Ana Canyon. When it was constructed, in 1975, the SARI line was originally buried about 15 to 20 feet below the then existing riverbed elevation. 6. Prado Dam was completed in 1941 on the Santa Ana River by the United States Army Corps of Engineers (hereinafter Army Corps of Engineers)to protect Orange County from seasonal flooding caused by the Santa Ana River. Prado Dam is located west of the City of Corona and upstream from the Santa Ana Canyon. As urbanization continues within the Santa Ana River watershed's Upper Basin, current and future rain runoff flows from developed areas have increased the water flow through the Santa Ana River and may continue to increase in the future. 7. The original maximum gated release rate of Prado Dam was designed to be 9,350 cubic-feet-per-second (cfs). However, due to concerns of stability of structures downstream from the Dam, the gated release rate has been limited to 5,000 cfs. The Army Corps of Engineers has announced its intention, in the near future, to raise the level of Prado Dam by 30 feet and increase the maximum gated release rate to 30,000 cfs. 8. During 1996 and 1998 a series of studies were conducted by OCSD and SAWPA to assess the depth of cover over the SARI line segment that runs along the Santa Ana Canyon and the condition of the pipe and manholes. The 1996 study found that there had been significant erosion near the manholes and that the depth of cover over the pipeline had been decreased to approximately 5 to 6 feet at several pipe crossing locations. CDO No. R8-2003-0055 Page 3 of 6 May 16,2003 OCSD and SAWP A 9. Also, the 1996 study modeled Prado Dam releases, between 2,750 cfs and 25,750 cfs, and determined that at 25,750 cfs there would be substantial degradation and local scour around the pipeline crossings and manholes. The 1996 study estimated that in the worst case, the erosion would extend below the base of the sewer at all ten crossings and that all manholes within 100 feet of the thalweg would be undermined or seriously threatened at increased flows close to or at 25,750 cfs. The 1998 study, which consisted of a field survey conducted after the El Nino storms, estimated that the minimum cover over the pipeline segment was 3 feet and that there were 20 locations where the pipeline could be completely uncovered or left with minimal cover. 10. To address the threat posed by the increased water flows in the Santa Ana River to the integrity of the SARI line 'segment, during 1998 OCSD contracted Holmes & Narver to prepare a realignment study for the SARI line segment. The study proposed and evaluated five realignment alternatives, A, B1, B2, C, and D. The study findings were included in a final report submitted to OCSD on March 2000. The five alternatives of the realignment study were then further evaluated with regard to their potential impact on wildlife and endangered species in an environmental impact report (EIR). Also, a "no project" altemative was evaluated in the EIR. In the EIR, the 6 possible solutions were evaluated and ranked in accordance with a score system that included factors such as risk of failure, cost, and environmental impact among other factors. The 6 options were tabulated and stake holders were asked to comment on the most suitable altemative. 11. Board staff reviewed the findings of the EIR, and commented that altemative D was the most appropriate, based on its score and rank among all altematives considered. Alternative D consisted of relocating the SARI line segment away from the riverbed and using one pipeline, instead of two in parallel, to convey sewage and brines and replace the SARI line segment. After receiving comments from the public and other interested agencies, OCSD selected realignment alternative D based on its minimal impact on the environment and most reliable solution to protect the SARI line segment. 12. During 2001 OCSD and SAWPA hired Brown and Caldwell (consultant) to conduct a risk analysis on an expanded list of alternatives to address the threat to the SARI line segment posed by the continued erosion of the riverbed. The consultant prepared a report entitled "Santa Ana River Interceptor Expanded Alternatives Study," dated February 2002. This report stated that, "Further degradation from controlled and uncontrolled spillway releases, or a major earthquake, would threaten the integrity of the existing SARI line. A major pipe or manhole break could cause three CDO No.R8-2003-0055 Page 4 of 6 May 16,2003 OCSD and SAWPA serious problems: (1) discharge of the contents of the SARI line into the Santa Ana River, (2) sediment influx into SARI and delivery of sediments to CSDOC Plant No. 1 with the potential to plug facilities and shut down or seriously diminish the capacity of the plant, and (3) with inflow from the river, the SARI could become pressurized downstream of the break and could cause effluent to escape from manholes that are below the hydraulic gradeline." These possible scenarios reinforce the urgency to prevent a break in the SARI line segment caused by erosion of the riverbed. 13. The conditions and risks illustrated by the 1996 and 1998 studies, current unimproved condition of the SARI line segment that runs across and along the Santa Ana River floodplain within the Santa Ana Canyon, and the Army Corps of Engineers' intent to raise Prado Dam and increase the maximum gated release rate to 30,000 cfs, represent a threat to cause a release of sewage to waters of the State. These conditions threaten to violate the sewage discharge prohibition contained in the Water Quality Control Plan for the Santa Ana River Basin (hereinafter Basin Plan), 1995 edition, and discharge requirements contained in waste discharge requirements Order No. 98-5 (Order No. 98-5) issued by the Regional Board to OCSD. 14. Waste Discharge Prohibition B.1. contained in Chapter 5 of the Basin Plan states that, 'The discharge of untreated sewage to any surface water stream, natural or man-made, or to any drainage system intended to convey stormwater runoff to surface water streams, is prohibited." 15. By knowingly operating the SARI line segment under the current conditions or under conditions that do not fully protect the treatment facilities from the consequences of a line break within the floodplain, OCSD has waived the use of the upset defense against enforcement actions that the Regional Board may take to address OCSD's noncompliance with discharge requirements derived from the break in the SARI line segment. Compliance Determination F.14. of Order No. 98-5 states that, "Upset means an exceptional incident in which there is unintentional and temporary noncompliance with technology based permit effluent limitations because of factors beyond the reasonable control of the discharger. An upset does not include noncompliance to the extent caused by operational error, improperly designed treatment facilities, inadequate treatment facilities, lack of preventive maintenance, or careless or improper operation." 16. Section 13301 of the California Water Code states that, 'When a regional board finds that a discharge of waste is taking place or threatening to take place in violation of requirements or discharge prohibitions prescribed by the regional board or the state board, the board may issue an order to CDO No.R8-2003-0055 Page 5 of 6 May [6,2003 OCSD and SAWPA f cease and desist and direct that those persons not complying with the requirements or discharge prohibitions (a) comply forthwith, (b) comply in accordance with a time schedule set by the board, or (c) in the event of a threatened violation, take appropriate remedial or preventive action." 17. This enforcement action is being taken for the protection of the environment and, as such, is exempt from the provisions of the California Environmental Quality Act (Public Resources Code, Section 21000 et seq.) in accordance with Section 15321, Article 19, Division 3, Title 14, California Code of Regulations. Pursuant to Section 13301 of the California Water Code, it is hereby ordered that: 1. OCSD and SAWPA shall implement a corrective action that prevents erosion induced damages to the SARI line segment from controlled or uncontrolled releases from Prado Dam and tributaries to the Santa Ana River downstream of the Dam. In developing a corrective action plan, OCSD and SAWPA shall give a high degree of consideration to alternatives that have no impact or minimal impact on beneficial uses and the environment and reasonably prevent releases to the Santa Ana River and treatment plant upsets. The corrective action shall be fully implemented by May 30, 2006. 2. As part of the corrective action implementation, OCSD and SAWPA shall conduct a field survey to assess the current condition of the pipe and manholes along the SARI line segment. The findings of the field survey shall be submitted to Board staff in the form of a report by August 29, 2003. In addition, OCSD and SAWPA shall prepare and submit a proposal to address any contingency that may arise from a break in the SARI line segment during the corrective action implementation period. This proposal is due by November 30, 2003. The proposal shall include a discussion'of resources to be used to address the contingencies. 3. In the interim. OCSD and SAWPA shall monitor the conditions of the SARI line segment and submit monitoring reports for Board staff review on a quarterly basis. The SARI line segment conditions reports shall be submitted by January 30, April 30, July 30, and October 30 of each year. The first report shall be submitted by July 30, 2003. 4. OCSD and SAWPA shall submit remedial action implementation progress reports on a quarterly basis. The progress reports shall be submitted by January 30, April 30, July 30, and October 30 of each year. The first report shall be submitted by July 30, 2003. CDO No.R8-2003-0055 Page 6 of 6 May 16,2003 OCSD and SAWPA If, in the opinion of the Executive officer, OCSD and SAWPA fail to comply with any part of this order, the Executive Officer is directed to issue a complaint assessing administrative civil liability or to request that the Attorney General take judicial action against OCSD, SAWPA, or both parties, including an injunction and civil monetary remedies, if appropriate, pursuant to Sections 13331, 13350, 13385, 13386, and/or 13387 of the California Water Code. I, Gerard J. Thibeault, Executive Officer, do hereby certify that the foregoing is a full, true, and correct copy of an order adopted by the California Regional Water Quality Control Board, Santa Ana Region, on May 16, 2003. Gerard J.Thibeault Executive Officer P DC COMMITTEE Meeting Date To Bd.of Dir. 08/07/03 08/27/03 AGENDA REPORT Item Number Item Number PDC03-49 12(h) Orange County Sanitation District FROM: David Ludwin, Director of Engineering Originator: Jim Burror. Senior Engineer SUBJECT: LONG RANGE BIOSOLIDS MANAGEMENT PLAN. JOB NO. J-40-7 GENERAL MANAGER'S RECOMMENDATION Approve Addendum No.2 to the Professional Services Agreement with CH2M Hill. Inc.. for additional engineering services for Long Range Biosolids Management Plan, Job No. J-40-7, for an additional amount of $785,079 increasing the total amount not to exceed $1 ,433.934. SUMMARY • The Long Range Biosolids Management Plan (Plan) includes an analysis of potential markets for products derived from District's biosolids. an analysis of treatment plant processes to reduce overall biosolids handling and treatment costs, and a long term implementation strategy for the next 10 to 15 years. • The key findings of the report are: o Class "B" biosolids management options will end in the next 3 to 5 years. o The District needs to solicit viable management options now so that management options will be available for the next 8 to 12 years. o The District must pursue and maintain back-up options. o The District should optimize Biosolids management projects in the District's Capital Improvements Program. • Addendum No. 2 addresses three steps for implementation of the long term plan: Preparation of interim biosolids management contract requests for proposals (RFP) and technical experts to review equipment vendor's claims, markets, and costs; interview references; review pilot testing results; participate in panel interviews; and assist with contract negotiations. ($358,030) Further development of failsafe and in-county biosolids management options. This work includes outlining the steps necessary to market District biosolids in Orange County; additional public support outreach for the long term plan: additional meetings and workshops for the three proposals currently under review by the County of Orange Integrated Waste Management Department (IWMD) Commission (assuming IWMD approves these proposals): and performing feasibility level investigations for the remaining landfills in the Southern California area. ($224,825) Gnwp.dtaagenda,Board Agenda Reports�2003 Board Agenda Reportst080311tem 12Jh).CH2M Hill.doc Revised 06/04/03 Page 1 Preparation of a feasibility report to pilot test equipment and optimize the digestion and dewatering facilities in the Capital Improvements Program. This work includes an assessment of existing solids handling facilities and their ability to operate under higher loading conditions. Also, a report will be prepared to provide the pilot testing equipment specifications for the proposed program. ($201 .950) • These proposals and a pilot testing program will be considered by the Board of Directors for implementation with the final report. The final report and recommendations from the Plan will be presented in December 2003. • A monthly project status report will be given to the Planning, Design and Construction (PDC) Committee each month explaining the work accomplished, costs to date. and work planned for the coming month. PRIOR COMMITTEE/BOARD ACTIONS 1 . September 2002 Board: Approve a budget amendment of $100,913, and the Professional Services Agreement (PSA) with CH2MHill not to exceed $499.913 for preparation of the Long Term Biosolids Master Plan. 2. February 2003 Board: Approve a budget amendment of $157,942, and Addendum No. 1 to the PSA for preparation of proposals in County Management options. 3. July 2003 Board: Receive and file Draft Long Term Biosolids Master Plan, Job No. J-40-7, dated June 2003, prepared by CH2M Hill, Inc. PROJECT/CONTRACT COST SUMMARY The total project budget for Long Range Biosolids Management Plan, Job No. J-40-7 is $2,833.000 Authorization of $ 785.079 from the Project Development is being requested. See the attached Budget Information Table for more information. BUDGET IMPACT 0 This item has been budgeted. (Line item: Section 8. Page 124) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) No budget changes are proposed at this time. A budget breakdown is included in the attached Budget Information Table for this project. ADDITIONAL INFORMATION A presentation was given at the meeting August PDC committee meeting to review the findings in the Draft Long Term Biosolids Master Plan prepared by CH2MHill. Inc, dated G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0603\ltem 12(h).CH2M Hill doc Revised: 06/04/03 Page 2 x June 2003. Several pieces of information were requested by the committee at the August meeting including, additional cost information on deliverables, hours and rates. This information is being provided to the Board with this report for consideration. Also, the entire scope of work is attached for information. The following is a summary of the items requested: There are three major tasks in this addendum: • Preparation of biosolids management contract requests for proposals. (2,291 hours, Task 2 of the consultant's proposal letter.) • Further development of failsafe and in-county biosolids management options identified in the plan. (1,551 hours, Tasks 3 and 5 of the consultant's proposal letter.) • Preparation of a feasibility report to pilot test equipment and optimize the Capital Improvement Program. (1 ,322 hours, Tasks 1 and 4 of the consultant's proposal letter.) The estimated hourly rate associated with these three major tasks: • The overall hourly rate of the proposals is $152. o $67/hour for burdened labor o $66/hour for overhead o $13/hour for profit o $6 for direct project costs The addendum will produce the following deliverables: • A technical memorandum summarizing the consultant's data, analysis and findings regarding the existing biosolids processing facilities impacted by the sludge thickening and dewatering improvements proposed in the long term plan. • Requests for proposals from vendors for each of the technologies identified as viable Biosolids management options in the plan: direct energy [co-combustion], organo-mineral fertilizer manufacturing, fuel products (char), heat drying with soil, and composting. • Supporting documentation and technical information determined necessary by the District to evaluate the merits of the vendor proposals. • Individual memoranda summarizing the consultants due diligence efforts to check references and vendor claims. • A technical memoranda summarizing the entire vendor proposal process to allow the District to replicate the proposal process, if necessary in the future. • Meeting materials and presentations for further developing the in-county biosolids management proposals and attaining public input on the long term plan. • Preparation of two additional proposals for composting sites at landfills in Orange County to be submitted to the County of Orange Integrated Waste Management Department. • A technical memorandum that outlines the potential concepts for immediate Biosolids product market development in Orange County. G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0803\Item 12(h).CH2M Hill,doc Revised:06/04/03 Page 3 • A technical memorandum summarizing the specific equipment requirements needed for screening primary solids, thickening primary solids, thickening secondary solids, and dewatering centrifuges. • A technical memorandum on the feasibility of sending District biosolids to any of the other 15 landfills accepting (or permitted to accept) biosolids throughout Southern California. 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 attached for additional information. An implementation schedule overview focused on the near term activities for implementing the long term plan is also attached which outlines a completion of these tasks by December 2003. ALTERNATIVES Do not prepare the pilot testing program, nor the Requests for Proposals, and rely on Class "B" land application in other States. Other States that continue to allow Class "B" land application include Arizona, Washington, Nevada, Colorado. However, individuals in these other States are starting request the elimination of Class "B" land application, too. 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. Budget Information Table 2. PSA Status Report 3. Addendum #2 Scope of Work 4. Executive Summary from the Long Term Biosolids Master Plan, Job No. J-40-7, prepared by CH2M Hill, Inc. 5. Long Term Biosolids Master Plan — Implementation Plan Schedule Overview JB:sa Wntglobal\Ngenda Draft Reports\PDC\03-49-J-40-7-080703 v2.doc Wwp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0803\11em 12(h).CH2M Hill.doc Revised: 06/04/03 Page 4 BUDGET INFORMATION TABLE LONG RANGE BIOSOLIDS MANAGEMENT PLAN JOB NO. J-40-7 ORIGINAL CURRENT PROPOSED PROPOSED FUNDS THIS PROPOSED ESTIMATED ESTIMATED PROJECT/TASK AUTHORIZED PROJECT BUDGETREVISED AUTHORIZED AUTHORIZATION TOTAL EXPENDITURE EXPENDED BUDGET BUDGET INCREASE/ BUDGET TO DATE REQUEST AUTHORIZATION TO DATE TO DATE(%) DECREASE Project Development $ 20,000 $ 2,505,000 5 2,505,000 $ 1,058,855 $ 785,079 $ 1,843,934 $ 584,003 32% Preliminary Design 0% Design $ 282,000 0% Construction & Installation 0% Commissioning 0% Close-out 0% Contingency $ 90,000 $ 328,000 S 328,000 0% PROJECT TOTAL $ 392,000 $ 2,833,000 S 2,833.000 $ 1,058,855 $ 785,079 $ 1,843,934 $ 584.003 32% Reimbursable Costs 0% PROJECT NET $ 392,000 1 $ 2,833,000 S 2,833,000 11 $ 1,058,855 1 $ 785,079 1 $ 1.843,934 $ 584,003 32% ELMS x Professional Services Agreement Status Report LONG RANGE BIOSOLIDS MANAGEMENT PLAN JOB NO. J-40-7 Total Proposed Project Budget: $2,833,000 Consultant: CH2MHill, Inc. Start Date of Project: July 2002 Date Addendum Description Cost Accumulated Costs 9/18/02 OPSAal Long Range Biosolids Management Plan $499,913 $499,913 2/19/03 1 Preparation of proposals for in-county $157,942.17 $648,855.17 management options. Preparation of Requests for Proposals for Interim Biosolids management options for over the next 10 Pending 2 to 15 years; assessment of improved solids $785,079.78 $,1433,934.95 handling impacts; and additional support to previously prepared County Management proposals. EDM� 003750875 08/19/03 Revised 05/14/98 m p Scope of Work Additional Support to Implement Selected Portions of the Long Term Biosolids Master Plan (Contract Addendum #2) for Orange County Sanitation District The Addendum#2 Scope of Work for the implementation of the selected portions of the Orange County Sanitation District's(District) Biosolids Management Program is presented in the following sections. This scope of work is divided into the following main tasks: • Task 1 -Onsite Biosolids Processing Facilities Evaluation • Task 2- Merchant Facilities Qualification and Selection • Task 3- In-county Composting Options • Task 4-Dewatering Centrifuge and Primary Solids Screening Evaluation • Task 5 -Failsafe Backup Management Options Task 1 - Onsite Biosolids Processing Facilities Evaluation For Plants 1 and 2, collect data on the existing solids handling equipment that could be impacted by thickening and dewatering improvements recommended in the Long-Term Biosolids Master Plan. Based on the review of available design documents, operations and maintenance(O&M) manuals, discussions with equipment vendors and field visits,develop the design criteria, design assumptions (if available), anticipated performance, and recommended operational limits for the following solids handling equipment and processes at Plants 1 and 2: • Primary sludge pumping and piping • Dissolved air flotation thickeners (DAFs), thickened sludge pumps and piping • Digesters mixing,gas handling, and heating equipment Dewatering, materials handling, and cake pumping • Biosolids cake storage and truck loading facilities A spreadsheet will be developed summarizing existing equipment type, original design assumptions (if available), and size/capacity. Based on the team's experience, review of available data, and discussions with the equipment manufacturers, the impact of the recommended improvements on the existing biosolids handling processes,expected performance, and facilities capacity will also be developed. A Technical Memorandum (TM)will be prepared to discuss the findings for the existing major equipment/processes. 0 Task 2 - Merchant Facilities Qualification and Selection Merchant facility contracts are needed to bridge the gap between current management options and future long-term options. To provide diversification of biosolids reuse options, Requests For Proposals (RFPs)will be prepared, targeting up to five different product manufacturing merchant facilities. The merchant facilities for different products will be selected based on the review, due diligence,evaluation, and interviews of the proposers. Furthermore, for the selected merchant facilities, demonstration testing results will be analyzed. Site visits of the merchant facilities will be conducted to verify the merchant facilities' implementation feasibility and product sustainability, overall project feasibility, performance guarantees, marketing plans,estimated product production, and the District's management costs. For the purpose of developing this scope, it is assumed that RFPs will be issued for up to 5 types of product manufacturing facilities; and up to 15 total replies will be reviewed. The site visits and review/analysis of the demonstration testing results will be conducted for up to five merchant facilities. Task 2.1 -Product Manufacturing Facilities Support the District's effort to issue RFPs for merchant facility biosolids management contracts as identified in the Long-Term Biosolids Master Plan. This shall include the following activities. Task 2.1.1 -RFP Preparation Prepare RFPs and/or letters of interest for five types of product manufacturing merchant facilities (i.e., direct energy [co-combustion], organo-mineral fertilizer manufacturing,fuel products (char), and heat drying with soil, and composting) for the District's review and distribution. The RFPs would include,but not be limited to, the following issues: 1.) Demonstration to the District that the vendor's technology is viable through pilot testing or other demonstration testing. CH2M HILL will specifically review and comment on the vendor's proposal(s) during the selection process with a focus on meeting the District's goals for timing, data collection requirements,biosolids delivery volume and delivery schedule,data review, report preparation,refinement of costs, etc. 2.) Cost and commitments necessary from the District to make the project viable. 3.) Status of the project related to siting, permitting, financing,tuning,and other issues related to allowing the project to proceed. These are critical criteria to be considered during the selection process. 4.) Discussion of multiple project options including,but not limited to,both on- and offsite;both private and public financing options;partnering options; _ impacts of biosolids dryness quality at 19 percent,25 percent,30 percent,and a dried pellet; and other entrepreneurial project concepts to reduce overall project costs to the District. 5.) Market planning for products produced with a discussion of potential market - risks and backup failsafe strategies. 0 Task 2.1.2—Supporting Documentation for Proposal Evaluation Provide supporting documentation and technical information, as necessary,during OCSD's proposal evaluation process. Task 2.1.3—Due Diligence Checks and Memorandum Conduct due diligence reference checks and prepare a response memorandum summarizing the team's findings. Task 2.1.4—Assistance with Shortlisting Vendors Participate as a member of the District's selection committee to be made up of the District staff from the Planning Division, Environmental Compliance and Monitoring Division, and Operations and Maintenance Divisions, to develop a short-list of the qualified vendors. Task 2.1.5—Selection Committee Interviews Participation as a member of the District selection committee to interview the short-listed vendors. Task 2.1.6—Assistance in Negotiations Assist the District in negotiations with potential merchant facility owner(s). This shall include meetings and supplemental research to verify additional vendor declarations made during the interview process. Task 2.1.7—Review Demonstration Testing and Memorandum Support the District's effort to review the vendor's demonstration testing,as solicited during the RFP process. This will include site visits to the pilot test units and/or facilities site with the District staff and review of data collected during the testing. A TM will be prepared for each vendor discussing the testing results. This TM will include,but not be limited to, merchant facilities' implementation feasibility and product sustainability, vendor implementation qualification, project feasibility evaluation, assessment of performance guarantees, review of marketing plans, validation of estimated vendor production, and the District's biosolids management costs. Task 3 — In-county Composting Options In-county composting options are a critical part of the overall Long-Term Biosolids Master Plan. The new and existing proposals should be pursued from now through December 2003. Task 3.1 -Near-term Recycling Options Task 3.1.1 —In-county Composting and Biosolids Master Plan Support Provide additional support for the Northern/Central County Composting Facility and for Prima Deshecha Joint Composting Proposal through December 2003. This shall include an estimated 20 meetings (both attendance and preparation) and 5 workshops to present - information,solicit comments and gauge interest in the projects. 0 q Task 3.11—Public Outreach Support Provide additional support for public outreach. This shall include supporting other OCSD efforts to educate the public including: reviewing public relations documents,responding to follow-up questions, and holding focused meetings with key stakeholders. A total effort of 80 hours is allowed for this task through December 2003. Task 3.1.3—Prima Deshecha Joint Composting Support Provide additional support for the Prima Deshecha Joint Composting Project with the South Orange County Wastewater Authority(SOCWA)after review by the IWMD commission. The support topics shall include participating in review and discussions with SOCWA to discuss potential agreements for the project and additional support related to the local project development efforts. Task 3.1.4—Bowerman Composting Proposal Prepare a proposal similar to the Prima Deshecha Joint Composting Project with SOCWA for the Bowerman Landfill. Task 3.1.5—Olinda Alpha Site Reconnaissance Study Analyze the feasibility of siting a composting facility at the Olinda Alpha Landfill. This effort will be limited to gauging available land and an overview of the potential siting issues at the Olinda Alpha landfill. Conduct similar analysis for two other feasible composting sites within Orange County. For selecting the two sites, it is assumed that a total of five sites will be identified and evaluated. The two most feasible sites will be used for this analysis. Similar to the Olinda Alpha siting study,for the two selected sites, review available land and provide an overview of the potential issues for siting the composting facilities. Prepare a draft TM,summarizing the results of this investigation, and distribute it for review. Meet with the District to receive and resolve the review comments. Incorporate the review comments and prepare the final TM. Deliver 15 copies of the draft and final TM to the District. Task 3.2-Orange County Market Assessment, Research, and Development Task 3.2.1 —Marketing Concepts and Implementation Steps Develop an outline of potential concepts for immediate market development and piloting in Orange County through work with existing contractors. Include a listing of contract partners and product development concepts. Develop an implementation plan,including prioritization of market development needs and product demonstration plans. Prepare a draft TM,summarizing the marketing concepts and implementation steps, and deliver to the District for review. Meet with the District to receive and resolve the review comments. Incorporate the review comments and prepare final TM. Deliver 15 copies of the draft and final TM to the District. 4 Task 4 - Dewatering Centrifuge and Primary Solids Screening Evaluation This task includes review of specific equipment requirements, including the need for screening of primary solids and evaluation of the dewatering centrifuges for application at Plants 1 and 2. The intention is to evaluate the centrifuges for permanent dewatering application at Plant 1 and to use the same centrifuges with different scrolls for thickening pilot tests. Task 4.1 -Dewaterng Centrifuge Evaluation Evaluate the centrifuge manufacturers' experience and existing applications for primary sludge thickening,WAS thickening, and dewatering. It is anticipated that up to four centrifuge manufacturers will be evaluated, and up to four installations for each will be contacted. For each installation, collect information related to facilities size; centrifuge size and operating hours; centrifuge feed flow rate,solids concentration, and quality; chemical conditioning needs; capture rates, etc. For primary sludge applications, also collect information on the type of screening used at the plant and/or on primary sludge. Based on this evaluation, develop the short list of centrifuges suitable for both thickening and dewatering application at Plants 1 and 2. Establish the number and size of the centrifuges needed for permanent dewatering at Plants 1 and 2. For Plant 1, discuss the potential centrifuge location for dewatering application after thickening testing is completed(for two centrifuges). Task 4.2-Primary Sludge Screening Evaluation Develop a strategy of understanding if there is a need to screen primary sludge prior to thickening. Review the screen type used at the Plant 1 headworks and proposed for the new Plant 2 headworks. Based on the result of Task 4.1, centrifuge manufacturers'input, and review of the existing headworks screens,establish screening needs and screen types Chat are suitable for use on primary sludge. Establish the need and type of screen(s) that should be considered for pilot testing. Task 4.3-Draft and Final TM Prepare draft TM, summarizing the results of Tasks 4.1 and 4.2 above. After review by the District, attend a review workshop to receive and resolve comments. Based on resolution of the comments, finalize the TM. Deliver 15 copies of the draft and final TM to the District. Task 5 - Failsafe Backup Management Options This task is for additional support related to developing backup failsafe biosolids management options at the landfills including a survey of 15 landfills in Southern California that receive biosolids, selecting the five most feasible landfills, and establishing the priority sequence for obtaining backup capacity at these landfills. 0 Task 5.1—Identification of Landfills Research locations of the 15 landfills accepting(or permitted to accept)biosolids throughout Southern California to determine the distance from the District facilities. Review the ability of these landfills to receive the District's biosolids and contact the landfill operators,as necessary. Jointly with the District, develop a short list of the five most feasible landfills for further evaluation. Task 5.2—Feasibility Assessment of Landfills For the short-listed landfills,initiate direct contact and feasibility assessment with each landfill operator and/or owner,obtain recommendations for preferred hauler(s); and establish priority sequence for obtaining additional back-up capacity. Prepare a draft TM, summarizing the results of this investigation, and distribute for review. Meet with the District to receive and resolve the review comments. Incorporate the review comments and prepare final TM. Deliver 15 copies of the draft and final TM to the District. u 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 Class B biosolids in Kern 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 Kern and Kings Counties banned land application of Class 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. W052003003SCOIEXEC SUMMARY_LW1232.DOCN31500005 1 DRAFT LONG-TERM BIOSOUDS 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-mineral 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. - W052MW3SCOIEXEC SUMMARY_LW1232.DOCN31500005 2 DRAFT 1 LONGTERM BIOSOLIDS MASTER PLAN EXECUTWE SUMMARY 8. Pursue Grange 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.1 and 2 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. TABLE ES-1 Plants 1 and 2 Onsite Process Improvements and Expansion Year Capacity Capital Cost, Onsite Biosolids Processing Facilities Needed Million$' Plant 1 Onsite Biosolids Processing Facilities Primary Sludge Thickening(Centrifuge) 2007 23.62 WAS Thickening(GBT or Centrifuge) 2013 48.86 Digester Pretreatment(Ultrasound) Note 2 8.57 Dewatering(Centrifuge) 2013 52.45 Plant 2 Onsite Biosolids Processing Facilities Primary Sludge Thickening(Centrifuge) 2013 23.18 WAS Thickening(GBT or Centrifuge) 2011 28.23 Digester Pretreatment(Ultrasound) Note 2 6.51 Dewatering(Centrifuge) Note 3 42.37 Notes: 'The capital costs are for onsite process improvements only.The upgrade of existing digestion facilities will be as planned in the capital improvement program(GIP)and is not included here. 2The District is currently evaluating project delivery options for implementing ultrasound. 3Paant 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.DOC1031500006 3 DRAFT LONG-TERM BIOSOUDS 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. W052003003SCOIEXEC3UMMARY_LW1232.DOCJ031500006 4 DRAFT C- 1 LONG TERM BIOSOLIDS MASTER PLAN(LTBMP) NEXT 6 TO 9 MONTH IMPLEMENTATION PLAN Jul 03 Aug03 Sep 03 Oct 03 Nov 03 Dec 03 Jan 04 Feb 04 2004-201 2015+ Master Plan Report and Near-term Board Actions OMTS overview presentation Review draft report with the public stakeholders Board/PDC approval of addendum to prepare RFP's for interim management options Board award addenda for vendor proposals OMTS/PDC focused update-Biosolids market analysis OMTS/PDC focused update-Product technology review OMTS/PDC focused update-Plant model and results OMTS/PDC focused update-Diversification, reuse policy, and costs Receive and File Final LTBMP 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 2005-8 Long Term Plan Options Implementation and Board Actions_ Treatment plant process pilot testing and implementation PDC Addenda Presentation for long term options Develop long term management options »»»> »»»> MINUTES OF FINANCE, ADMINISTRATION AND HUMAN RESOURCES COMMITTEE MEETING Orange County Sanitation District Wednesday, August 13, 2003, 5:00 p.m. A meeting of the Finance, Administration and Human Resources Committee of the Orange County Sanitation District was held on August 13, 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: STAFF PRESENT: Directors Present: Blake P. Anderson, General Manager Brian Brady, Chair Gary Streed, Director of Finance/Treasurer Roy Moore, Vice Chair Lisa Tomko, Director of Human Resources Alberta Christy Carol Beekman, Communications Services Bill Dalton Manager Mike Duvall Mike White, Controller Joy Neugebauer Penny Kyle, Committee Secretary Shirley McCracken, Board Chair Jeff Reed Steve Anderson, Vice Board Chair Jan Collins Directors Absent: OTHERS PRESENT: Steve Filarsky, Special Labor Counsel James W. Silva Randy Fuhrman Mark Mutz David Hamilton Gerhardt van Drie (2) APPOINTMENT OF CHAIR PRO TEM No appointment was necessary. (3) PUBLIC COMMENTS Mark Mutz and David Hamilton spoke in support of ratification of the proposed memorandum of understanding with the International Union of Operating Engineers, Local 501. Gerhardt van Drie requested audio-visual equipment be provided at the August board meeting so that a video could be viewed by the Directors. The video shows a process on how the powers of buoyancy and gravity can be used for mixing liquids and slurry. The process can then be used in the secondary treatment process, with up to 50% savings in energy requirements. Randy Fuhrman referred to the impacts of rate increases to the new debt the District has acquired and the revised debt policy. He requested the Directors consider raising the rates at a more rapid rate the following year. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 2 August 13, 2003 ' (4) REPORT OF THE COMMITTEE CHAIR The Chair had no report. (5) REPORT OF THE GENERAL MANAGER Blake Anderson, General Manager, reported that a joint meeting with the Orange County Water District would be held in the fall to provide an update on the Groundwater Replenishment System. It was also reported that staff was continuing their efforts to obtain $3 million in EPA grants out of the assembly appropriations committee, with a goal of receiving a total of approximately$50 million in EPA grants to help offset the construction costs currently underway. Word had been received that the committee failed to earmark anything for the District's projects. Staff will now focus efforts on the senate side of the appropriations committee to get it reconciled. It is possible that it could take two to three years to get approval for the grants program. However, once the program begins, the monies continue year after year. (6) REPORT OF DIRECTOR OF FINANCEITREASURER Gary Streed, Director of Finance/Treasurer, referred the Directors to the Treasurer's Report distributed to them that evening, as well as an additional document relative to the issuance of certificates of participation to be discussed under Item 12(a). He reported that the user fees that are collected as a separate line item on the property tax bills are ready to be reviewed, and will be submitted to the Auditor's office that week. Mike Moreland of Moreland &Associates, the District's auditor, and Nipa Shah, the audit manager, were then introduced. Mr. Moreland described the steps in the annual audit process and asked for specific direction the Committee would like him to take. Following discussion, Directors reiterated that any areas of concern, irregularity or malfeasance be reported by the auditor directly to the Chair of the FAHR Committee and/or the Chair of the Board of Directors, and not to staff. (7) REPORT OF DIRECTOR OF HUMAN RESOURCES Lisa Tomko, Director of Human Resources, referred to a handout provided to the Directors that was in reference to Item 13(a)(1), and would be discussed in closed session. (8) REPORT OF COMMUNICATIONS SERVICES MANAGER Communications Services Manager Carol Beekman reported a celebration was held on August 7`h to honor the District for being the first wastewater treatment plant in the nation to receive the Environmental Management Service Biosolids Certification. Information about the EMS Certification can be found on the District's website at www.ocsd.com. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 3 August 13, 2003 Real Orange of KOCE featured an excellent story on the Groundwater Replenishment System which provided several of the key points for public information. It was also noted that Joan Rose, an international expert on Microbiology and water quality public health and safety, is in support of the program. Ms. Beekman advised that if a national media story of any kind is written about the GWR program, a reporter would talk with Dr. Rose in order to get a balanced story as she is a renowned expert in this field. Also reported was a luncheon that would be held the following week for those employees who participated in the volunteer incentive program. There have been five outside events the District has sponsored, and over 57 employees have given up their own time to participate in the programs. A recognition program, based on the hours they've worked, and the luncheon are ways to thank those employees. A total of 182 hours were donated this past year. (9) REPORT OF GENERAL COUNSEL General Counsel was not present. (10) CONSENT CALENDAR ITEMS a. The Chair ordered that the July 9, 2003 minutes for the Finance, Administration and Human Resources Committee meeting be deemed approved, as mailed. b. FAHR03-62 Recommend to the Board of Directors to receive and file Treasurer's Report for the month of July 2003. C. FAHR03-63 Receive and file Certificate of Participation (COP) Monthly Report. d. FAHR03-64 Receive and file Employment Status Report as of July 24, 2003. e. FAHR03-65 Receive and file OSHA Incidence Rates and Workers' Compensation Claims and Costs Report. f. FAHR03-66 Recommend to the Board of Directors to adopt Resolution No. OCSD 03-_, Amending Resolution No. OCSD 98-33, Amending Human Resources and Policies Procedures Manual. g. FAHR03-70 Recommend to the Board of Directors to receive and file the Quarterly Investment Management Program Report for the period April 1, 2003 through June 30, 2003. MOTION: It was moved, seconded and duly carried to approve the recommended actions for items specified as 10(a) through (g) under Consent Calendar. END OF CONSENT CALENDAR Minutes of the Finance, Administration and Human Resources Committee Meeting P Page 4 f August 13, 2003 (11) ACTION ITEMS a. FAHR03-67 Recommend to the Board of Directors to approve an Interest Rate Exchange Agreement Policy relating to long-term debt financing Gary Streed, Director of Finance, reported that interest rate exchange agreements are commonly called SWAPs, although they are also referred to as interest rate exchange agreements or hedging products. The proposed ISDA agreement is standard in the industry. Mr. Streed noted that the policy is one of the best practices of financial organizations that are looked at by rating agencies. No changes are necessary to the two existing SWAPS (1992 and 1993). Should an additional SWAP be recommended, FAHR Committee and Board of Directors approval would be requested. The major change to this policy is quarterly updates to the Directors, and the monitoring of existing SWAPS. Mr. Streed stated staff believes the quarterly reports are appropriate. MOTION: It was moved, seconded and duly carried to recommend approval to the Board of Directors. b. FAHR03-68 Recommend to the Board of Directors to approve a Revised Debt Policy relating to short-and long-term borrowing by the District, providing for the limitation on debt issuance be restricted to all capital improvements that cannot be financed from current revenue. Mike White, Controller, noted that because of the $2.2 billion capital improvement program over the next 10 years, the debt policy would need to be revised to allow borrowing for more than 50% of the CIP. MOTION: It was moved, seconded and duly carried to recommend approval to the Board of Directors. (12) INFORMATIONAL PRESENTATIONS a. FAHR03-69 Final Report on Sale of Series 2003 Certificates of Participation Director Alberta Christy left the room during discussion of this item. Gary Streed, Director of Finance, reported the rating agencies met at the District on July 25th, and toured the facilities. The District received a AA rating from each of those agencies. The rating agencies' concerns were the amount of debt that would be issued for the capital improvement program (CIP), how large the CIP was compared to what the District has done successfully in the past, how much variable rate debt the District has, and the District's ability to raise rates necessary to fund the CIP compared to borrowing. Seven major firms submitted bids on August 12. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 5 August 13, 2003 All bids were within 4 basis points of each other. Mr. Streed then referred to the handout given to the Directors that evening and reviewed the structure of paying the interest and principal amount. He noted that from 2004 to 2020, no principal is paid, only interest. Because there aren't any short-term principal payments, the District does not get to take advantage of the low rates up front, so the true interest cost is 5.145%. Mr. Streed reported that when the issue is completed, 67% of the District's debt will be fixed, and 33%will be variable. He felt that staff could work with the rating agencies to get back to the 50% level of variable rate, and take advantage of the lower short-term rates. The funds will be issued to the District on August 26`" (13) CLOSED SESSION The Committee convened in Closed Session at 6:08 p.m. pursuant to Government Code Section 54957.6 to discuss and consider Agenda Item Nos. 13(a) (1) and (2). 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. A report of the actions taken will be publicly reported at the time the approved action becomes final re Agenda Items Nos. 13(a)(1) and (2). RECONVENE IN REGULAR SESSION: At 6:33 p.m., the Committee reconvened in regular session. (14) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY There were none. (15) MATTERS 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 September 10, 2003 at 5 p.m. Minutes of the Finance, Administration and Human Resources Committee Meeting Page 6 August 13, 2003 ' (17) ADJOURNMENT The Chair declared the meeting adjourned at 6:33 p.m. Submitted by: Penny M. Kyl, ' FAHR Commi ee Secret"'�ry G:\wp.dta\agenda\FAHR\FAHR20i,ws\0503\051403 FAHR Minutes.doc FAHR COMMITTEE Meeting Date To Bd. of Dir. 08/13/03 08/27/03 AGENDA REPORT Item Number Item Number _ FAHR03-62 13 b Orange County Sanitation District FROM: Gary Streed. Director of Finance Originator: Michael White, Controller SUBJECT: TREASURER'S REPORT FOR THE MONTH OF JULY 2003 GENERAL MANAGER'S RECOMMENDATION Receive and file Treasurer's Report for the month of July 2003. SUMMARY 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" portfolios. 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 Liquid Operating Monies and on page 2 of the attached Long-Term Operating Monies, there are two investment policy compliance exceptions. The first exception pertains to the Liquid Operating Monies holdings exceeding the investment policy allowable maximums due to the District withdrawing $20.1 million during the last two days of July to fund debt service principal payments and current operations. As of July 31 . the accounts holdings exceeded the allowable maximums as follows: 1 ) corporates exceeded the 30 percent maximum at 32.86 percent, 2) US Agencies exceeded the 20 percent maximum at 21 .77 percent, and Government/Agency Exempt exceeded the 5 percent maximum by 13.11 percent. These positions were compliant prior to the cash withdrawals and were once again as of August 4, August 1 , and August 4, respectively. The second investment policy compliance exception pertains 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 G:\wp.dta\agenda'Board Agenda Reports\2003 Board Agenda Reports\0801Item 13(b).TREASRPT.00c Page 1 million, representing 0.5 percent of the portfolio holdings, whose rating from Moody's w has fallen several times, from A3 to BA1 , then to BA3, and finally to B3. Likewise, the R 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-. Although 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 -he 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 Baal and then to Baa2, and with S&P from A- to BBB. PIMCO believes based on the underlying assets 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 ❑ 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. Transactions 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. G:\wp dwagendaZoard Agenda Reports'2003 Board Agenda Reports\08011tem 13)b)TREASRPT.doc Page 2 V Book Balances Estimated Investment Accounts July 31,2003 Yield(%) State of Calif. LAIF $ 46,098 1.65 Union Bank Checking Account 4,709,022 0.88 PIMCO—Short-term Portfolio 40,687,603 1.40 PIMCO- Long-term Portfolio 320,899,407 2.96 Petty Cash 5,000 N/A TOTAL $366 347 130 2.76 8.883.127 Debt Service Reserves w/Trustees �3 4.22 (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:IC G:1wp.dtalagendaXBoard Agenda Reports12003 Board Agenda Reports10803\1tem 13(b).TREASRPT.doc Page 3 Monthly Investment Balances by Type- Last Six Months $500,000,000 $450,000,000 - - --- -- $400,000,000 $350,000,000 —— — $300,000,000 --- ------ -- — $250,000,000 $200,000,000 $150,000,000 - $100,000,000 $50,000,000 -- - -- $0 February March April May June July 2003 2003 2003 2004 2003 2003 O PIMCO- Long-term M PIMCO- Short-term 0 COP Debt Reserves 0 LAIF 0 Bank Accts 0 Petry Cash 4 Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund July 31, 2003 Par Value Book Value Market Value Rate Yield* Balance July 1,2003 $427 $427 $427 1.653 1.653 Quarterly Interest Distribution 45,671 45,671 45,671 1.653 1.653 Balance July 31,2003 $46,098 $46,098 $46,098 1.653 1.653 , P I M C O 640 Newport Center Drive Suite 300 Newport Beach,CA 92660 Tel: 949.720.6000 Fax:949.720.1376 August 11, 2003 Mr. Mike White, CPA Controller Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Dear Mike: The following is a description of events in the bond markets during the month of July in addition 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 U.S. bond market endured a brutal sell off in July as investors digested the dual realities that the Federal Reserve would not be purchasing longer maturity Treasuries, and that federal budget deficits are climbing rapidly. News that the government intends to borrow $230 billion in the second half of 2003 drove the intra-month spread between two-year and 10-year Treasury yields above 270 basis points, the widest since the late seventies. Ten-year yields climbed over 130 basis points from a mid-June low of 3.07%, leading the Treasury sector to post a negative total return of —4.39% for the month. In contrast, the S&P 500 continued its post war surge and returned 1.76%. Mortgages lagged Treasuries by 153 basis points, after adjusting for duration, in an environment where prepayments slowed dramatically. The impact of rising interest rates was evident as the duration of Lehman's Fixed Rate Mortgage Backed Securities Index extended from 1.0 year to 3.1 years. The Lehman Credit Index returned -4.26%, for a duration-adjusted excess return of 3 basis points. Lower quality investment grade names outperformed as BBB-rated bonds lead Treasuries by 43 basis points on a duration-adjusted basis. The U.S. economy expanded at a 2.4% annual rate in the second quarter. Key drivers were increases in consumer purchases, business investment, and the biggest jump in defense spending since 1951. The Conference Board's Index of Consumer Confidence fell in July to 76.6, down from 83.5 in June and 83.6 in May. The decline in confidence was attributed to pessimism about the employment outlook. The unemployment rate dropped to 6.2%, driven by discouraged job seekers exiting the work force. U.S. manufacturing expanded for the first time since February, as the Institute for Supply Management's Manufacturing Index rose to 51.8 last month from 49.8 in June. Mr. Mike White, CPA August 11, 2003 Orange County Sanitation District Page 2 Treasury yield changes during the month of July are summarized as follows: ■ 3-month bills: +9 basis point to 0.94% ■ 6-month bills: +5 basis points to 1.01% ■ 2-year notes: +44 basis points to 1.74% ■ 5-year notes: +81 basis points to 3.22% ■ 10-year notes: +89 basis points to 4.41% ■ 30-year notes: +80 basis points to 5.36% Performance Attribution: Long-Term Portfolio The Long-Term portfolio that PIMCO manages on behalf of Orange County Sanitation District generated a total return of—1.64 percent for the month of July, underperforming the Merrill Lynch 1-5 year Government Corporate Index by 35 basis points. The following points summarize returns for the period ended July 31: • The Long-Term portfolio underperformed the benchmark by 35 basis points for the month and by 53 basis points for the year-to-date period. • Portfolio duration,slightly longer than the index,was negative for performance as interest rates rose sharply during the month. • Yield curve positioning, with out of index exposure to longer maturities,was negative for performance as longer rates rose more than shorter rates. • An underweight exposure to Treasuries was positive, as the sector sold off sharply. • Holdings of mortgage-backed securities detracted from returns as the sector underperformed treasuries on a duration-adjusted basis. • Corporate issues were positive for performance as the sector continued to perform strongly relative to other bond market sectors;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 0.08 percent during the month of July, performing in line with the 3- month Treasury Bill Index.The following points summarize returns for the period ending July 31: • The Liquid portfolio underperformed the benchmark by 1 basis point 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 August 11, 2003 Orange County Sanitation District Page 3 Outlook and Strate y. 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 tbrift 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 flow 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. We plan to position duration near the benchmark given expectations for stable interest rates in the near term; duration movements due to short term yield fluctuations may provide tactical opportunities to add value. With the yield curve relatively steep, we will retain broader-than- index curve position. Within the mortgage sector we will emphasize coupon selection strategies near term while capturing longer-term structural advantages of the sector. With respect to corporates,we will continue to maintain a conservative allocation to the sector. We look forward to discussing these and other topics with you in the near future. Best regards, 'W Christine Telish, CFA John M. Miller, CFA Vice President Senior Vice President a Orange County Sanitation District for the month ending July 31, 2003 Total Return Account-203 With Accrued Interest Without Accrued Interest Market Value 324,313,706 320,761,310 Book Value 321,044,092 317,491,696 Yield to Maturity 2.96 2.99 Short Term Account-603 With Accrued Interest Without Accrued Interest Market Value 41,185,502 40,686,068 Book Value 41,738,450 41,239,017 Yield to Maturity 1.40 1.42 MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ended 31 July 2003) Page I of 1 Liquid Operating Monies(603) 15.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • PIMCO $41,185,502 • Mellon $41,187,570 Historical Cost: • PIMCO $41,738,450 • Mellon $41,738,934 15.1.2 MODIFIED DURATION Of Portfolio: 0.32 Of Index: 0.20 15.1.3 1% INTEREST RATE CHANGE Dollar Impact(gain/loss)of I%Change: $131,794 15.1.4 REVERSE REPOS %of Portfolio in Reverse Repos: (see attached schedule) 0% 15.1.5 PORTFOLIO MATURITY %of Portfolio Maturing within 90 days: 44% 15.1.6 PORTFOLIO QUALITY Average Portfolio Credit Quality: "AAA" 15.1.7 SECURITIES BELOW"A" RATING %of Portfolio Below"A": 0% 15.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance" (1) 15.1.9 PORTFOLIO PERFORMANCE Total Rate of Return(%)by Portfolio Index Period: 1 Month: 0.08 0.09 3 Months: 0.30 0.28 12 Months: 1.70 1.35 Fiscal Year-to-Date: 0.08 0.09 Commentary • Interest rates at the short-end of the yield curve increased during the month(3-month T-Bills rose 9 basis point to 0.94%),as did longer maturities(30-year Treasuries rose 80 basis points to 5.36%). • The Liquid portfolio underperformed the benchmark by 1 basis point for the month,but outperformed the benchmark by 35 basis points over the last 12 months. • PaVICO's emphasis on higher yielding securities such as commercial paper and short-term notes contributed to performance. (1)Due to the$20.1 million cash withdrawals during the last two days of the month to fund annual debt service principal payments and current operations,the account's holdings exceeded the following investment policy allowable maximums: 1)corporates exceeded the 30 percent maximum at 32.86 percent,2)US Agencies exceeded the 20 percent maximum at 21.77 percent,and 3)Government/Agency Exempt exceeded the 5 percent maximum at 13.11 percent. These positions were compliant prior to the cash withdrawal and were once again as of August 4,August 1,and August 4,respectively. GAwp.dtaV1n\20W1t1tc%Tm-&w 1%1gmtU1Q0 00-03-Q7.RPT.da MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ended 31 July 2003) Page I of 4 Long-Tenn Operating Monies(203) 15.1.1 PORTFOLIO COST AND MARKET VALUE Current Market Value Estimate: • PIMCO $324,313,706 • Mellon $324,405,830 Historical Cost: • PIMCO $321,044,092 • Mellon $321,476,966 15.1.2 MODIFIED DURATION Of Portfolio: 2.49 Of Index: 2.39 15.1.3 1% INTEREST RATE CHANGE Dollar Impact(gain/loss)of I%Change: $8,075,411 15.1.4 REVERSE REPOS %of Portfolio in Reverse Repos: (see attached schedule) 0% 15.1.5 PORTFOLIO MATURITY %of Portfolio Maturing within 90 days: 16% 15.1.6 PORTFOLIO QUALITY Average Portfolio Credit Qualit : AAA 15.1.7 SECURITIES BELOW"A"RATING %of Portfolio Below"A": 2% 15.1.8 INVESTMENT POLICY COMPLIANCE "In Compliance" No* 15.1.9 PORTFOLIO PERFORMANCE Total Rate of Return(%)by Portfolio Index Period: 1 Month: -1.64 -1.29 3 Months: -0.57 -1.10 12 Months: 4.27 5.05 Fiscal Year-to-Date: -1.64 -1.29 • Three-month yields increased during the month(90-day T-Bills rose 9 basis point to 0.94%)as did longer maturities(5-year Treasury Notes rose 81 basis points to 3.22%). • The Long-Terri portfolio underperformed the benchmark by 35 basis points for the month,and by 53 basis points for the year. • Portfolio duration,slightly longer than the index,was negative for performance as interest rates rose sharply during the month. • Yield curve positioning,with out of index exposure to longer maturities,was negative for performance as longer rates rose more than shorter rates. • An underweight exposure to Treasuries was positive,as the sector sold off sharply. • Holdings of Mortgage-backed securities slightly detracted from returns as the sector modestly underperformed treasuries on a duration-adjusted basis. • Holdings of corporate issues were positive for performance as the sector continued to perform strongly relative to other bond market sectors;however,an underweight exposure relative to the benchmark was negative. MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ended 31 July 2003) Page 2 of 4 .1'Compliance Issues: $1,600,000 par of United Airlines(UAL)Pass-Through 2001-1-C(909317BC2),6.831%coupon,9/l/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 filing,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(ATSB)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 bankruptcy protection on December 9's. UAL's filing is the largest bankruptcy 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 terms of loans and leases on these aircraft. UAL said it is weighing whether to emerge from bankruptcy 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 billiotl 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 bankruptcy 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. On July 15,UAL said it plans to use 40 planes from its regular fleet to start a low-cost unit designed to compete with discount airlines. UAL has been discussing its business plan with creditors for months but has not made any details public about the plan--or the proposed low-cost operation—until this announcement. The low-cost operation is part of the company's transformation plan UAL will present in bankruptcy court. In addition to grabbing a piece of the leisure market through a low-fare operation,UAL is also trying to lure business travelers to its mainline through several promotions announced recently. PIMCO 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 expects that this process will take some time given the bankruptcy'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 of SARS 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. a MONTHLY REPORT ORANGE COUNTY SANITATION DISTRICT INVESTMENT MANAGEMENT PROGRAM PIMCO'S PERFORMANCE MONITORING & REPORTING (for the month ended 31 July 2003) Page 3 of 4 5,000,000 par of Philip Morris-Altria NT(cusip 718154CH8),4/l/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 4/01/2003)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 final verdict would be years in the future,while the company would generated significant cash flow 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 July 18,Philip Morris asked the Illinois Supreme Court to prevent the Price class action plaintiffs from attempting to enforce a$10.1 billion judgment until it decides whether the reduced bond established by the trial court was proper. This request followed the Illinois Fifth District Court of Appeals ruling that Madison County Judge Nicholas Byron exceeded his authority by setting a bond lower than the amount of judgment,plus interest and costs. The court returned the case to the Madison County trial judge for the sole purpose of reconsidering the amount,terms,conditions and security of the bond. A 30-day stay is in place while the trial court conducts those proceedings. 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 10/16/2001 by S&P from A to BBB+;and now catty a Moody's rating of A3 after a further downgrade from A2 on 1/16/2002 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 31 July 2003) Page 4 of 4 •$10,950,000 par of General Motors Acceptance Corp securities(cusip 370425QV5),$4.0"Ilion 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. •$3,500,000 par of Virginia Electric Power NT securities(cusip 927804EN0),maturing in 2006,represents l.1%of the portfolio holdings on a par basis. The security was downgraded on 10/21/2002 by S&P from A-to BBB+,but continues to carry a Moody's rating of A3. G:1wp.dtaYit12201white\Treasttty MgmtV-T0800-03-07.RPT.doc 4 Report ID:GL8251 Asset Summary Base Currency:USD by Asset Type with Sectors Alternate Base Currency: Exchange Rate: LIQU ZD OPER-PIMCO-OCSF07511102 '— --—�31/ZQQ$ -_ _ _—_ _. Status:FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base CASH&CASH EQUIVALENTS ' U.S. DOLLAR INTEREST 499,967.12 499,967.12 1.21% 0.00 FED HM LOAN BNK-LESS THAN IYR 6,000,000.000 5,979,802.15 5,979,802.15 14.52% 0.00 FEDERAL HOME LOAN MORTGAGE-LESS THAN 1 4,000,000.000 3,982,360.55 3,982,360.55 9.67% 0.00 FNMA ISSUES- LESS THAN 1YR 2,600,000.000 2,587,603.84 2,587,603.84 6.28% 0.00 MUTUAL FUNDS 4,184,848.130 4,184,848.13 4,184,848.13 10.16% 0.00 U.S. DOLLAR 16,784,848.130 17,234,581.79 17,234,581.79 41.84% 0.00 CASH&CASH EQUIVALENTS 16,784,848.130 17,234,581.79 17,234,581.79 41.84% 0.00 FIXED INCOME SECURITIES U.S. DOLLAR BANKING&FINANCE 8,290,000.000 8,637,849.20 8,500,138.40 20.64% -137,710.80 INDUSTRIAL 1,206,000.000 1,237,099.06 1,213,554.04 2,95% -23,545.02 U.S.AGENCIES 7,450,000.000 7,700,373.00 7,593,725.91 18.44% -106,647.09 U.S. GOVERNMENTS 5,800,000.000 6,251,984.38 5,981,250.00 14.52% -270,734.38 UTILITY-TELEPHONE 650,000.000 677,046.50 664,319.50 1.61% -12,727.00 U.S.DOLLAR 23,396,000.000 24,504,352.14 23,952,987.85 58.16% -551,364.29 FIXED INCOME SECURITIES 23,396,000.000 24,504,352.14 23,952,987.85 58.16% -551,364.29 TOTAL ASSETS-BASE: 40,180,848.130 41,738,933.93 41,187,569.64 100.00% -551,364.29 - - ----- --------- --...-...._.__ i ..- ------ Workbench Report ID:GL8251 Asset Summary Base Currency:USD by Asset Type with Sectors Alternate Base Currency: Exchange Rate: LONG TERM OPER PIMCO-OCSF07522202 _ _ /31J 2003 _ Status:FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base CASH 86 CASH EQUIVALENTS U.S.DOLLAR PENDING TRADES -20,618,896.06 -20,618,896.06 -6.36% 0.00 INTEREST 3,506,422.26 3,506,422.26 1.08% 0.00 COMMERCIAL PAPER-DISCOUNT 600,000.000 597,974.33 597,974.33 0.18% 0.00 FED HM LOAN BNK-LESS THAN 1YR 31,400,000.000 31,315,983.21 31,315,983.21 9.65% 0.00 FNMA ISSUES-LESS THAN IYR 18,000,000.000 17,953,496.75 17,953,496.75 5.53% 0.00 MUTUAL FUNDS 140,666.200 140,666.20 140,666.20 0.04% 0.00 U.S.DOLLAR 50,140,666.200 32,895,646.69 32,895,646.69 10.14% 0.00 CASH&CASH EQUIVALENTS 50,140,666.200 32,895,646.69 32,895,646.69 10.14% 0.00 FIXED INCOME SECURITIES U.S.DOLLAR ABS-AIRPLANE RECEIVABLES 1,600,000.000 1,600,000.00 238,000.00 0.07% -1,362,000.00 BANKING&FINANCE 40,285,000.000 41,385,619.50 41,555,378.05 12.81% 169,758.55 COLLATERALIZED MORTGAGE OBLIGATION 2,520,466.090 2,520,466.09 2,662,242.31 0.82% 141,776.22 FHLMC MULTICLASS 1,678,829.700 1,680,365.48 1,685,612.36 0.52% 5,246.88 FHLMC POOLS 234,559.900 236,116.14 240,865.41 0.07% 4,749.27 FNMA POOLS 32,801,002.980 34,024,422.14 33,320,562.81 10.27% -703,859.33 GNMA MULTI FAMILY POOLS 4,087,668.700 4,067,460.21 4,199,889.50 1.29% 132,429.29 GNMA SINGLE FAMILY POOLS 14,572,644.130 14,869,257.13 15,068,709.54 4.65% 199,452.41 INDUSTRIAL 12,000,000.000 12,458,780.00 12,229,470.00 3.77% -229,310.00 INFLATION INDEXED SECURITIES 30,762,120.000 30,468,162.66 33,590,141.78 10.35% 3,121,979.12 PVT PLACEMENTS-MORE THN 1YR 752,000.000 826,199.84 826,199.84 0.25% 0.00 U.S.AGENCIES 41,252,775.970 42,329,448.93 44,248,235.33 13.64% 1,918,786.40 U.S.GOVERNMENTS 80,779,356.910 89,082,570.88 88,233,936.03 27,20% -848,634.85 UTILITY-ELECTRIC 6,500,000.000 6,438,210.00 6,956,740.00 2.14% 518,530.00 UTILITY-TELEPHONE 6,000,000.000 6,594,240.00 6,454,200.00 1.99% -140,040.00 U.S.DOLLAR 275,826,424.380 288,581,319.00 291,510,182.96 89.86% 2,928,863.96 FIXED INCOME SECURITIES 275,826,424.380 288,581,319.05 291,510,182.96 89.86% 2,928,863.96 — 1 Workbench T Asset Summary Report m:GL8251 Base Currency:USD by Asset Type with Sectors Alternate Base Currency: Exchange Rate: LONG TERM OPER-PJMCO-OCSF07522202 7/31/2003 Status:FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base TOTAL ASSETS-BASE: 325,967,090.580 321,476,965.69 324,405,829.65 100.00% 2,928,863.96 YLDANAL YIELD ANALYSIS PAGE s 1 OCSF07511102 2003/07/31 RUN DATE t 09/07/03 DISTRICT: LIQUID OPERATING RUN TIME s 09.29.48 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 500,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.773 498,862.50 2.98 313384KB4 MAT 08/06/2003 A-1+ 498,862.50 1.23 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.713 1,994,261.94 11.91 313384KR9 MAT 08/20/2003 A-1+ 1,994,261.94 4.90 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.532 1,990,640.00 11.89 313384NJ4 MAT 10/24/2003 A-1+ 1,990,640.00 4.89 1,500,000.00 FEDERAL HOME LN BKS CONS DISC .000 .000 P-1 99.736 1,496,037.71 8.93 313384NPO MAT 10/29/2003 A-1+ 1,496,037.71 3.68 2,000,000.00 FEDERAL HONE LN MTG CORP DN .000 .000 P-1 99.569 1,991,383.33 11.89 313396MT7 MAT 10/09/2003 A-1+ 1,991,383.33 4.89 2,000,000.00 FEDERAL HOME LN MTG CORP DISC .000 .000 P-1 99.549 1,990,977.22 11.89 313396NB5 MAT 10/17/2003 A-1+ 1,990,977.22 4.89 600,000.00 FEDERAL NATL MTG ASSN DISCOUNT .000 .000 P-1 99.708 598,249.67 3.57 313580MZS MAT 10/15/2003 A-1+ 598,249.67 1.47 2,000,000.00 FEDERAL NATL MTG ASSN DISC .000 .000 P-1 99.468 1,989,354.17 11.88 313588PD1 MAT 11/12/2003 A-1+ 1,989,354.17 4.89 4,184,848.13 DREYFUS TREASURY CASH MGMT .000 .741 AAA 100.000 4,184,848.13 25.00 996085247 AAA 4,184,848.13 10.29 -------- ------- ----------------- --------- TOTAL CASH & CASH EQUIVALENTS .000 .044 16,734,614.67 100.00 16,734,614.67 41.13 FIXED INCOME SECURITIES 1,000,000.00 ASSOCIATES CORP NORTH AMER .000 5.618 AA1 103.234 1,041,290.00 4.30 046003KA6 5.800% 04/20/2004 DD 04/20/99 AA- 1,032,340.00 2.54 650,000.00 BELL ATLANTIC-NEW JERSEY INC .000 5.740 AA3 102.203 677,046.50 2.77 077858AA6 5.875% 02/01/2004 DD 02/01/94 A+ 664,319.50 1.63 300,000.00 COLGATE PALMOLIVE MTN TR 00058 .000 5.200 AA3 101.343 308,808.00 1.26 19416QCK4 5.270% 12/01/2003 DD 11/24/98 AA- 304,029.00 .75 1 YLDANAL YIELD ANALYSIS PAGE s 2 OCSF07511102 2003/07/31 RUN DATE 08/07/03 DISTRICT: LIQUID OPERATING RUN TIME : 09.29.48 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 1,350,000.00 FEDERAL FARM CR BKS CONS SYSTE .000 5.289 AAA 102.101 1,399,963.50 5.75 31331H6G7 6.40% 01/23/2004 DD 01/01/1999 AAA 1,378,364.85 3.39 550,000.00 FEDERAL FARM CR BKS CONS MTN .000 4.966 AAA 100.688 565,229.50 2.31 31331RC78 5.000% 10/02/2003 DD 10/02/98 AAA 553,781.42 1.36 1,100,000.00 FEDERAL HOME LN MTG CORP DEB .000 3.681 AAA 101.861 1,125,905.00 4.67 3134A4PH1 3.750% 04/15/2004 DD 04/15/02 AAA 1,120,472.65 2.75 4,200,000.00 FEDERAL NATL MTG ASSN DEBS .000 5.017 AAA 102.154 4,350,168.00 17.91 31359MEM1 5.125% 02/13/2004 DD 02/08/99 AAA 4,290,473.46 10.54 1,340,000.00 GENERAL ELEC MTN A TR 00019 .000 8.065 AAA 101.671 1,380,508.20 5.68 36962FAUO STEP UP 10/30/2003 DD 11/02/92 AAA 1,362,391.40 3.35 250,000.00 GILLETTE CO NT .000 6.241 AA3 100.140 256,012.50 1.04 375766AC6 6.250% 08/15/2003 DD 08/16/93 AA- 250,350.00 .62 2,000,000.00 LEHMAN BROS HLDGS INC .000 6.407 A2 103.406 2,091,180.00 8.63 524908BZ2 6.625% 04/01/2004 DD 03/26/99 A 2,068,120.00 5.08 500,000.00 PAINE WEBBER GROUP INC NTS .000 6.342 AA2 101.703 519,405.00 2.12 695629CE3 6.450% 12/01/2003 DD 12/01/98 AA+ 508,515.00 1.25 656,000.00 PROCTER & GAMBLE CO NTS .000 5.225 AA3 100.484 672,278.56 2.75 742718BK4 5.250% 09/15/2003 DD 09/28/98 AA- 659,175.04 1.62 2,000,000.00 US BANCORP MTN VTR 00119 .000 5.792 AA3 103.593 2,092,620.00 8.64 91159HEY2 6.000% 05/15/2004 DD 05/10/99 A+ 2,071,860.00 5.09 5,800,000.00 U S TREASURY BONDS .000 11.515 AAA 103.125 6,251,984.38 24.97 91281ODGO 11.875% 11/15/2003 DD 10/05/83 AAA 5,981,250.00 14.70 450,000.00 WELLS FARGO & CO SUBNT 1.615 6.055 AA3 101.156 467,496.00 1.90 949740BY9 6.125% 11/01/2003 DD 11/01/93 A 455,202.00 1.12 150,000.00 FEDERAL FARM CR SKS CONS MTN 1.664 6.531 AAA 100.294 155,796.00 .62 3133INW59 6.550% 08/19/2003 DD 08/19/96 AAA 150,440.88 .37 100,000.00 FEDERAL HOME LN BK CONS BUS 1.664 5.914 AAA 100.193 103,311.00 .41 3133MSSB2 5.925% 08/14/2003 DD 08/14/98 AAA 100,192.65 .25 o YLDANAL YIELD ANALYSIS PAGE 3 OCSF07511102 2003/07/31 RUN DATE : 08/07/03 DISTRICT: LIQUID OPERATING RUN TIME : 09.29.48 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ $ TYPE SECURITY ID SECURITY DESCRIPTION HOOK YIELD S-P PRICE MARKET VALUE $ TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 1,000,000.00 MORGAN STANLEY DW MTN #TR00349 1.757 7.113 AA3 100.171 1,045,350.00 4.18 61745EQN4 7.125% 08/15/2003 DD 08/10/00 AA- 1,001,710.00 2.46 -------- ------- ----------------- ----___-- TOTAL FIXED INCOME SECURITIES .026 6.363 24,504,352.14 100.00 23,952,997.85 58.87 -------- ------- ----------------- --------- TOTAL .020 4.816 41,238,966.81 100.00 40,687,602.52 100.00 ----------------- --------- YLDANAL YIELD ANALYSIS PAGE 2 4 OCSF07522202 2003/07/31 RUN DATE 08/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME s 09.29.48 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 900,000.00 FEDERAL HOME LN BKS CONS DISC .000 .000 P-1 99.770 798,161.33 1.59 313384MM8 MAT 10/03/2003 A-1+ 798,161.33 .23 12,800,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.761 12,769,376.00 25.53 313384NUO MAT 10/10/2003 A-1+ 12,769,376.00 3.74 12,000,000.00 FEDERAL HOME LN BKS CONS DISC .000 .000 P-1 99.747 11,969,666.67 23.93 313384MZ9 MAT 10/15/2003 A-1+ 11,969,666.67 3.50 3,800,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.740 3,790,115.88 7.57 313384NJ4 MAT 10/24/2003 A-1+ 3,790,115.88 1.11 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.433 1,988,663.33 3.97 313384NY1 MAT 11/07/2003 A-1+ 1,988,663.33 .58 2,700,000.00 FEDERAL NATL MTG ASSN DISC NT .000 .000 P-1 99.786 2,694,208.50 5.38 313588MKS MATURES 10/01/2003 A-1+ 2,694,208.50 .79 13,700,000.00 FEDERAL NATL MTG ASSN DISCOUNT .000 .000 P-1 99.745 13,665,023.14 27.32 313588MZ5 MAT 10/15/2003 A-1+ 13,665,023.14 4.00 1,600,000.00 FEDERAL NATL MTG ASSN DISCOUNT .000 .000 P-1 99.642 1,594,265.11 3.18 313588PL3 MAT 11/19/2003 A-1+ 1,594,265.11 .47 600,000.00 GENERAL ELEC CAP DISC .000 .000 P-1 99.662 597,974.33 1.19 36959JYCl 11/12/2003 597,974.33 .18 140,666.20 DREYFUS TREASURY CASH MGMT .000 .741 AAA 100.000 140,666.20 .28 996085247 AAA 140,666.20 .04 -------- ------- ----------------- --------- TOTAL CASH & CASH EQUIVALENTS .000 .000 50,008,120.49 100.00 50,008,120.49 14.64 FIXED INCOME SECURITIES 752,000.00 AIG SUNAMERICA GLOBAL REG S .000 5.325 109.867 826,199.84 .28 000907AAO 5.850% 08/01/2008 DD 08/08/01 826,199.84 .24 15,000,000.00 COMMIT TO PUR FNMA SF MTG .000 5.009 AAA 99.813 15,459,375.00 5.13 01P050486 5.000% 08/01/2018 DD 08/01/03 AAA 14,971,875.00 4.38 YLDANAL YIELD ANALYSIS PAGE s 5 OCSF07522202 2003/07/31 RUN DATE 08/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME 09.29.48 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 5,000,000.00 COMMIT TO PUR FNMA SF MTG .000 5.930 AAA 101.188 5,200,000.00 1.73 01F060683 6.000% 08/01/2033 DD 08/01/03 AAA 5,059,375.00 1.48 900,000.00 BEAR STEARNS MTN # TR 00459 .000 1.578 A2 100.109 899,406.00 .30 073928VC4 VAR RT 12/01/2003 DD 08/17/01 A 900,981.00 .26 1,500,000.00 CIT GROUP INC NEW SR NT .000 5.212 A2 105.531 1,527,135.00 .54 125581ADO 5.500% 11/30/2007 DD 12/02/02 A 1,582,965.00 .46 5,000,000.00 CITIGROUP INC GLOBAL SUB NT .000 5.512 AA2 102.046 5,333,600.00 1.75 172967BP5 5.625% 08/27/2012 DD 08/26/02 A+ 5,102,300.00 1.49 146,387.69 FHLMC GROUP #G4-0353 .000 7.324 AAA 102.410 150,093.13 .05 3128DBMA2 7.500% 10/01/2004 DD 03/01/99 AAA 149,915.16 .04 7,500,000.00 FEDERAL HOME LN BK CONS BDS .000 6.582 AAA 108.249 7,997,625.00 2.78 3133MAUN7 7.125% 02/15/2005 DD 02/08/00 AAA 8,118,708.75 2.38 88,172.21 FHLMC GROUP #78-6064 .000 3.729 AAA 103.151 86,023.01 .03 31348SWZ3 6.384% 01/01/2028 DD 12/01/97 AAA 90,950.25 .03 11,350,000.00 FEDERAL NATL MTG ASSN DEBS .000 4.902 AAA 107.110 11,521,271.50 4.17 31359MJX2 5.250% 06/15/2006 DD 06/22/01 AAA 12,156,985.00 3.56 292,207.18 FNMA POOL #0323980 .000 5.776 AAA 103.887 305,082.56 .10 31374T2M0 6.000% 04/01/2014 DD 09/01/99 AAA 303,564.45 .09 105,419.53 FNMA POOL 00456482 .000 5.772 AAA 103.949 110,064.58 .03 31381CCT2 6.000% 02/01/2014 DD 02/01/99 AAA 109,582.78 .03 319,930.91 FNMA POOL #0509649 .000 5.776 AAA 103.887 332,983.81 .11 313830EWO 6.000% 09/01/2014 DD 09/01/99 AAA 331,326.86 .10 234,208.91 FNMA POOL #0535451 .000 5.776 AAA 103.887 244,528.74 .08 31384VZQB 6.000% 06/01/2015 DD 07/01/00 AAA 243,311.95 .07 5,187,179.85 FNMA POOL #0535672 .000 5.776 AAA 103.887 5,415,739.96 1.84 31384WCH1 6.000% 01/01/2016 DD 12/01/00 AAA 5,388,791.01 1.58 1,795,470.68 FNMA POOL #0545296 .000 5.786 AAA 103.699 1,874,583.60 .63 31385HXZO 6.000% 11/01/2016 DD 10/01/01 AAA 1,861,889.09 .55 147,793.19 FNMA POOL #0545580 .000 5.782 AAA 103.762 154,305.32 .05 31385JCR7 6.000% 03/01/2017 DD 03/01/02 AAA 153,352.76 .04 1 YLDANAL YIELD ANALYSIS PAGE : 6 OCSF07522202 2003/07/31 RUN DATE 08/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME : 09.29.48 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOR YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 249,201.30 FNMA POOL 10555101 .000 5.786 AAA 103.699 260,181.73 .08 31385WU23 6.000% 10/01/2017 DD 11/01/02 AAA 258,419.80 .08 97,289.71 FNMA POOL #0576386 .000 5.803 AAA 103.399 101,576.54 .03 31386XJ72 6.000% 05/01/2016 DD 05/01/01 AAA 100,596.69 .03 272,601.77 FNMA POOL #0576739 .000 5.782 AAA 103.762 284,696.81 .09 31386XV86 6.000% 04/01/2016 DD 04/01/01 AAA 282,939.29 .08 307,745.01 FNMA POOL 40580888 .000 5.782 AAA 103.762 321,305.02 .10 31387DJ91 6.000% 05/01/2016 DD 05/01/01 AAA 319,321.52 .09 230,979.51 FNMA POOL #0594002 .000 5.782 AAA 103.762 241,157.04 .08 31387T3KB 6.000% 07/01/2016 DD 07/01/01 AAA 239,668.31 .07 289,859.75 FNMA POOL #0597376 .000 5.786 AAA 103.699 302,631.69 .10 31387XT96 6.000% 09/01/2016 DD 08/01/01 AAA 300,582.30 .09 283,252.44 FNMA POOL #0605259 .000 5.786 AAA 103.699 295,733.25 .10 31388HMGI 6.000% 09/01/2016 DD 09/01/01 AAA 293,730.57 .09 174,345.94 FNMA POOL #0608366 .000 5.782 AAA 103.762 182,028.05 .06 31388LZ78 6.000% 10/01/2016 DD 09/01/01 AAA 180,904.35 .05 174,071.01 FNMA POOL #0616734 .000 5.782 AAA 103.762 181,741.01 .06 31388WEF9 6.000% 12/01/2016 DD 12/01/01 AAA 180,619.07 .05 293,469.30 FNMA POOL 40630812 .000 5.799 AAA 103.468 306,400.29 .10 31389NYH2 6.000% 02/01/2017 DD 02/01/02 AAA 303,645.64 .09 1,150,158.10 FNMA POOL #0632376 .000 5.778 AAA 103.849 1,200,836.95 .40 31389QQ50 6.000% 07/01/2017 DD 07/01/02 AAA 1,194,430.22 .35 684,648.94 FNMA POOL #0653116 .000 5.778 AAA 103.849 714,816.28 .24 31390QSDB 6.000% 07/01/2017 DD 07/01/02 AAA 711,002.58 .21 277,680.39 FNMA POOL #0673280 .000 5.786 AAA 103.699 289,915.68 .09 31391P6R2 6.000% 08/01/2017 DD 11/01/02 AAA 287,952.40 .08 139,373.89 FNMA POOL #0698939 .000 5.776 AAA 103.874 145,515.05 .04 31400VPY2 6.000% 09/01/2017 DD 03/01/03 AAA 144,773.54 .04 95,035.67 FNMA POOL #0703195 .000 5.765 AAA 104.074 99,223.18 .03 31401BGC3 6.000% 01/01/2017 DD 04/01/03 AAA 98,907.63 .03 YLDANAL YIELD ANALYSIS PAGE : 7 OCSF07522202 2003/07/31 RUN DATE : 08/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME : 09.29.48 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ $ TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE $ TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 642,574.64 GNMA POOL #0596612 .000 6.258 AAA 103.863 674,402.17 .22 36200BYH4 6.500% 09/15/2032 DD 09/01/02 AAA 667,399.10 .20 1,841,817.57 GNMA POOL #0569358 .000 6.280 AAA 103.499 1,884,985.16 .65 362000QK3 6.500% 04/15/2032 DD 04/01/02 AAA 1,906,254.59 .56 80,204.16 GNMA POOL #0569685 .000 6.256 AAA 103.895 84,176.77 .02 36200Q2S2 6.500% 02/15/2032 DD 02/01/02 AAA 83,327.74 .02 137,707.04 GNMA POOL 10570019 .000 6.258 AAA 103.863 144,527.85 .04 3620ORG48 6.500% 07/15/2032 DD 07/01/02 AAA 143,027.05 .04 878,268.53 GNMA POOL #0574323 .000 6.256 AAA 103.895 921,770.26 .31 36200WAY7 6.500% 12/15/2031 DD 12/01/01 AAA 912,472.96 .27 94,569.39 GNMA POOL #0575364 .000 6.256 AAA 103.895 99,253.53 .03 36200XFD6 6.500% 11/15/2031 DD 11/01/01 AAA 98,252.42 .03 32,560.52 GNMA POOL 00587117 .000 6.258 AAA 103.863 34,173.28 .01 36201MG22 6.500% 06/15/2032 DD 06/01/02 AAA 33,818.42 .01 106,823.13 GNMA POOL #0587439 .000 6.250 AAA 103.863 112,114.21 .03 36201MS45 6.500% 11/15/2032 DD 12/01/02 AAA 110,950.01 .03 21,552.87 GNMA POOL #0421389 .000 6.239 AAA 104.176 22,620.41 .00 36206UC23 6.500% 04/15/2026 DD 04/01/96 AAA 22,452.87 .01 32,229.38 GNMA POOL #0449851 .000 6.273 AAA 103.616 33,825.74 .01 36208PWL0 6.500% 01/15/2028 DD 01/01/98 AAA 33,394.86 .01 95,196.81 GNMA POOL #0466845 .000 6.249 AAA 104.020 99,912.03 .03 36209BTA6 6.500% 06/15/2028 DD 06/01/98 AAA 99,023.27 .03 680,418.97 GNMA POOL #0468052 .000 6.249 AAA 104.020 714,120.97 .24 36209CSM4 6.500% 07/15/2028 DD 07/01/98 AAA 707,768.61 .21 281,974.52 GNMA POOL #0476041 .000 6.249 AAA 104.020 295,500.49 .10 36209MZE7 6.500% 06/15/2028 DD 06/01/98 AAA 293,308.57 .09 252,559.42 GNMA POOL 00478626 .000 6.249 AAA 104.020 264,674.38 .09 36209QVT9 6.500% 01/15/2029 DD 01/01/99 AAA 262,711.12 .08 289,527.26 GNMA POOL #0480598 .000 6.249 AAA 104.020 303,415.53 .10 36209S3P6 6.500% 10/15/2028 DD 10/01/98 AAA 301,164.90 .09 YLDANAL YIELD ANALYSIS PAGE s 8 OCSF07522202 2003/07/31 RUN DATE s 08/07/03 DISTRICTS LONG-TERM OPERATING RUN TIME s 09.29.48 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 725,190.48 GNMA POOL #0485527 .000 6.256 AAA 103.895 761,110.07 .25 36209YLGI 6.500% 06/15/2031 DD 06/01/01 AAA 753,433.24 .22 875,765.60 GNMA POOL #0485610 .000 6.256 AAA 103.895 919,143.37 .31 36209YN38 6.500% 07/15/2031 DD 07/01/01 AAA 909,872.55 .27 166,163.17 GNMA POOL #0485682 .000 6.256 AAA 103.895 174,393.44 .05 36209YRB6 6.500% 08/15/2031 DD 08/01/01 AAA 172,634.44 .05 154,573.25 GNMA POOL #0485703 .000 6.256 AAA 103.895 162,229.46 .05 36209YRY6 6.500% 08/15/2031 DD 08/01/01 AAA 160,593.15 .05 16,487.70 GNMA POOL #0512235 .000 6.253 AAA 103.957 17,304.36 .00 36211GBC6 6.500% 11/15/2029 DD 11/01/99 AAA 17,140.12 .01 313,523.93 GNMA POOL #0514326 .000 6.253 AAA 103.957 328,563.28 .11 36211JLF2 6.500% 07/15/2029 DD 07/01/99 AAA 325,930.17 .10 84,522.72 GNMA POOL 00530053 .000 6.282 AAA 103.466 88,709.24 .02 36212CZS3 6.500% 04/15/2031 DD 04/01/01 AAA 87,452.27 .03 69,341.15 GNMA POOL #0530290 .000 6.256 AAA 103.895 72,667.36 .02 36212DC31 6.500% 03/15/2031 DD 04/01/01 AAA 72,041.66 .02 167,219.54 GNMA POOL #0537885 .000 6.256 AAA 103.895 175,502.13 .05 36212MRE1 6.500% 02/15/2031 DD 02/01/01 AAA 173,731.96 .05 22,090.17 GNMA POOL #0547512 .000 6.256 AAA 103.895 23,184.32 .00 36212YGV9 6.500% 04/15/2031 DD 04/01/01 AAA 22,950.48 .01 288,380.61 GNMA POOL #0547715 .000 6.256 AAA 103.895 302,213.86 .10 36212YN82 6.500% 02/15/2031 DD 02/01/01 AAA 299,611.68 .09 106,578.31 GNMA POOL #0552322 .000 6.256 AAA 103.895 111,857.27 .03 36213ESK3 6.500% 01/15/2032 DD 01/01/02 AAA 110,729.03 .03 896,660.19 GNMA POOL #0552466 .000 6.280 AAA 103.499 941,072.89 .31 36213EW36 6.500% 03/15/2032 DD 03/01/02 AAA 928,030.35 .27 726,247.49 GNMA POOL #0552659 .000 6.258 AAA 103.863 762,219.43 .25 36213E5U6 6.500% 07/15/2032 DD 07/01/02 AAA 754,304.46 .22 755,671.60 GNMA POOL 10561017 .000 6.256 AAA 103.895 793,100.96 .26 36213QG29 6.500% 07/15/2031 DD 07/01/01 AAA 785,101.46 .23 YLDANAL YIELD ANALYSIS PAGE 9 OCSF07522202 2003/07/31 RUN DATE : 08/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME 09.29.48 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 339,946.89 GNMA II POOL #0080395 .000 4.385 AAA 102.615 336,866.13 .11 36225CNM4 VAR RT 04/20/2030 DD 04/01/00 AAA 348,836.50 .10 3,045,321.62 GNMA II POOL #080408X .000 4.385 AAA 102.614 3,014,392.56 1.07 36225CN28 6.500% 05/20/2030 DD 05/01/00 AAA 3,124,914.15 .92 3,000,000.00 GTE NORTH INC DEB SER A .000 5.876 Al 102.109 3,063,750.00 1.05 362337AD9 6.000% 01/15/2004 DD 01/15/94 A+ 3,063,270.00 .90 5,000,000.00 GENERAL ELEC CAP MTN #TR 00575 .000 5.429 AAA 100.390 5,203,500.00 1.72 36962GZY3 5.450% 01/15/2013 DD 12/06/02 AAA 5,019,500.00 1.47 4,000,000.00 GENERAL MTRS ACCEP MTN #00615 .000 1.630 A3 100.000 3,998,440.00 1.37 37042WE80 VAR RT 09/04/2003 DD 08/03/01 BBB 4,000,000.00 1.17 3,000,000.00 GENERAL MTRS ACCEP CORP SR NT .000 5.978 A3 102.453 3,064,350.00 1.05 370425SD3 6.125% 08/28/2007 DD 08/29/02 BBB 3,073,590.00 .90 3,000,000.00 GOLDMAN SACHS GROUP INC SR NT .000 4.073 AA3 101.265 3,030,030.00 1.04 38141GCS1 4.125% 01/15/2008 DD 01/13/03 A+ 3,037,950.00 .89 1,635,000.00 HOUSEHOLD FIN CORP NT .000 5.967 Al 106.843 1,772,820.00 .59 441812JWS 6.375% 10/15/2011 DD 10/23/01 A 1,746,883.05 .51 3,000,000.00 JP MORGAN CHASE & CO SUB NT .000 5.642 A2 101.906 3,127,260.00 1.04 46625HAT7 5.750% 01/02/2013 DD 11/25/02 A 3,057,180.00 .90 3,200,000.00 MORGAN STANLEY NT .00D 3.665 AA3 98.921 3,195,640.00 1.08 617446HW2 3.625% 04/01/2008 DD 03/06/03 A+ 3,165,472.00 .93 3,000,000.00 NATIONAL RURAL UTILS COOP FIN .000 6.373 A2 113.765 3,465,480.00 1.17 637432CU7 7.250% 03/01/2012 DD 03/07/02 A 3,412,950.00 1.00 5,000,000.00 PHILIP MORRIS COS INC NTS .000 7.322 BAA2 102.437 5,263,000.00 1.75 718154CH8 7.500% 04/01/2004 DD 04/01/97 BBB 5,121,850.00 1.50 3,679,356.91 SBA GTD DEV PARTN 2001-20C 1 .000 5.957 AAA 106.435 3,679,356.91 1.34 83162CLJO 6.340% 03/01/2021 AAA 3,916,123.53 1.15 2,520,466.09 SBA GTD PARTN CTFS SBIC-PS 01 .000 6.286 AAA 105.625 2,520,466.09 .91 831641DD4 6.640% 02/10/2011 DD 02/21/01 NR 2,662,242.31 .78 1,600,000.00 UNITED AIRLS PASSTHRU 01-1 C .000 45.923 B3 14.875 1,600,000.00 .08 909317BC2 6.931% 03/01/2010 DD 08/22/01 A- 238,000.00 .07 YLDANAL YIELD ANALYSIS PAGE s 10 OCSF07522202 2003/07/31 RUN DATE : 08/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME : 09.29.48 PAR VALUE YTH AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 20,000,000.00 U S TREASURY NOTES .000 5.580 AAA 112.000 22,620,312.50 7.68 9128272JO 06.250% 02/15/2007 DD 02/15/97 AAA 22,400,000.00 6.56 14,546,480.00 US TREASURY INFLATION INDEX NT .000 3.494 AAA 110.906 16,179,548.79 5.53 9128274Y5 3.875% 01/15/2009 DD 01/15/99 AAA 16,132,991.84 4.72 57,100,000.00 U S TREASURY NOTES .000 5.303 AAA 108.438 62,782,901.47 21.24 9128276N7 05.750% 11/15/2005 DD 11/15/00 AAA 61,917,812.50 18.13 3,000,000.00 VERIZON GLOBAL FDG CORP GLOBAL .000 6.525 A2 113.031 3,530,490.00 1.16 92344GAT3 7.375% 09/01/2012 DD 08/26/02 A+ 3,390,930.00 .99 3,500,000.00 VIRGINIA ELEC & PWR 01 SER A .000 5.347 A3 107.546 3,487,600.00 1.29 927804ENO 5.750% 03/31/2006 DD 03/27/01 BBB+ 3,764,110.00 1.10 16,215,640.00 US TREASURY INFLATION INDEX NT 3.817 3.135 AAA 107.656 14,288,613.87 5.98 9128272M3 3.375% 01/15/2007 DD 01/15/97 AAA 17,457,149.94 5.11 3,950,000.00 GMAC NTS 5.752 1.390 A3 100.000 3,918,768.50 1.35 370425QV5 VAR RT 08/18/2003 DD 08/17/98 BBB 3,950,000.00 1.16 15,500,000.00 FEDERAL NATL MTG ASSN DEBS 5.967 6.589 AAA 108.143 16,154,410.00 5.75 31359MFHI 7.125% 02/15/2005 DD 02/14/00 AAA 16,762,095.25 4.91 1,271,918.74 FHLMC MULTICLASS MTG SER E3 A 6.316 4.086 AAA 100.460 1,273,273.85 .43 3133TCE95 VAR RT 08/15/2032 DD 12/01/97 AAA 1,277,769.57 .37 910,353.90 GNMA GTD REMIC TR 2000-9 FH 6.320 1.595 AAA 100.509 910,353.90 .31 3837H4NX9 VAR RT 02/16/2030 AAA 914,987.60 .27 10,867.84 GNMA POOL #0500917 6.389 5.872 AAA 102.184 10,315.96 .00 36210SPAO 6.000% 04/15/2029 DD 04/01/99 AAA 11,105.15 .00 44,084.19 GNMA POOL #0506636 6.389 5.872 AAA 102.184 41,845.54 .01 36210YY90 6.000% 04/15/2029 DD 04/01/99 AAA 45,046.81 .01 468,332.60 GNMA POOL 90503388 6.389 5.872 AAA 102.184 444,550.08 .16 36210VF55 6.000% 03/15/2029 DD 03/01/99 AAA 478,559.06 .14 16,506.94 GNMA POOL #0499153 6.389 5.872 AAA 102.184 15,668.69 .00 36210QQE5 6.000% 02/15/2029 DD 02/01/99 AAA 16,867.38 .00 523,769.03 GNMA POOL #0496461 6.390 5.868 AAA 102.246 497,171.37 .18 36210MQN4 6.000% 01/15/2029 DD 01/01/99 AAA 535,533.35 .16 YLDANAL YIELD ANALYSIS PAGE 11 OCSF07522202 2003/07/31 RUN DATE : 08/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME : 09.29.40 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- 145,768.47 GNMA POOL #0491103 6.390 5.868 AAA 102.246 138,366.17 .05 36210FRY4 6.000% 01/15/2029 DD 01/01/99 AAA 149,042.56 .04 14,856.48 GNMA POOL #0486720 6.390 5.868 AAA 102.246 14,102.06 .00 36210AVM6 6.000% 12/15/2028 DD 12/01/98 AAA 15,190.17 .00 27,317.72 GNMA POOL #0497343 6.390 5.868 AAA 102.246 25,930.50 .00 3621ONP45 6.000% 12/15/2028 DD 12/01/98 AAA 27,931.30 .01 21,933.30 GNMA POOL #0469688 6.391 5.868 AAA 102.246 20,819.50 .00 36209EXR8 6.000% 11/15/2028 DD 11/01/98 AAA 22,425.94 .01 25,225.59 GNMA POOL #0467279 6.391 5.868 AAA 102.246 23,944.60 .00 36209CCQ7 6.000% 10/15/2028 DD 10/01/98 AAA 25,792.18 .01 51,392.15 GNMA POOL #0457814 6.391 5.868 AAA 102.246 48,782.38 .01 36208QSB3 6.000% 10/15/2028 DD 10/01/98 AAA 52,546.46 .02 496,302.79 GNMA POOL 60467286 6.391 5.868 AAA 102.246 471,099.91 .17 36209CCX2 6.000% 10/15/2028 DD 10/01/98 AAA 507,450.20 .15 695,115.34 GNMA POOL #0465555 6.392 5.868 AAA 102.246 659,816.54 .24 36209AE48 6.000% 09/15/2028 DD 09/01/98 AAA 710,728.26 .21 18,846.06 GNMA POOL #0483452 6.392 5.868 AAA 102.246 17,889.04 .00 36209WBV3 6.000% 09/15/2028 DD 09/01/98 AAA 19,269.36 .01 654,307.91 GNMA POOL f0465546 6.392 5.868 AAA 102.246 621,081.34 .22 36209AET3 6.000% 08/15/2028 DD 08/01/98 AAA 669,004.25 .20 463,542.79 GNMA POOL #0468339 6.392 5.868 AAA 102.246 440,003.53 .16 36209DHQO 6.000% 08/15/2028 DD 08/01/98 AAA 473,954.38 .14 29,586.96 GNMA POOL #0438057 6.393 5.868 AAA 102.246 28,084.51 .01 36207PTN9 6.000% 05/15/2028 DD 05/01/98 AAA 30,251.51 .01 28,487.85 GNMA POOL #0468330 6.393 5.868 AAA 102.246 27,041.19 .00 36209DHF4 6.000% 05/15/2028 DD 05/01/98 AAA 29,127.71 .01 406,910.96 FHLMC MULTICLASS CTF Tll A6 6.496 6.485 AAA 100.229 407,091.63 .13 3133TDPV2 6.500% 09/25/2018 AAA 407,842.79 .12 2,942,707.57 FHLMC MULTICLASS CTF SER 1620Z 6.499 6.020 AAA 99.661 2,786,567.63 1.00 3133T17A4 6.000% 11/15/2023 DD 11/01/93 AAA 2,932,731.79 .86 1 YLDANAL YIELD ANALYSIS PAGE s 12 OCSF07522202 2003/07/31 RUN DATE s 08/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME t 09.29.48 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOOK YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 408,059.01 GNMA II POOL #080088M 6.705 5.211 AAA 103.146 416,985.31 .14 36225CC20 7.375% 06/20/2027 DD 06/01/97 AAA 420,897.69 .12 2,000,000.00 MARSH & MCLENNAN COS INC SR NT 6.717 6.345 A2 104.406 1,992,280.00 .71 571748AB8 6.625% 06/15/2004 DD 06/14/99 AA- 2,088,120.00 .61 3,000,000.00 FORD MTR CR CO GLOBAL LANDMARK 6.739 6.478 A3 103.421 2,995,080.00 1.06 345397SJ3 6.700% 07/16/2004 DD 07/16/99 BBB 3,102,630.00 .91 2,500,000.00 COUNTRYWIDE HOME LNS INC NT 6.866 6.544 A3 104.671 2,498,400.00 .89 22237UAB8 6.850% 06/15/2004 DD 06/24/99 A 2,616,775.00 .77 294,341.18 GNMA II POOL #0080023 6.992 5.424 AAA 103.703 299,216.21 .10 36225CAZ9 VAR RT 12/20/2026 DD 12/01/96 AAA 305,241.16 .09 2,100,000.00 FEDERAL NATL MTG ASSN DEBS 7.113 5.878 AAA 112.705 2,030,133.00 .81 31359MEYS 6.625% 09/15/2009 DD 09/01/99 AAA 2,366,810.25 .69 1,000,000.00 FORD MOTOR CR CO NT 7.582 6.449 A3 104.671 965,170.00 .35 345397GV9 6.750% 05/15/2005 DD 05/24/93 BBB 1,046,710.00 .31 949,714.50 WMP/HUNTOON PAIGE #000-11150 7.684 7.152 AAA 104.865 929,087.90 .34 302998GE3 7.500% 12/01/2030 DD 10/21/99 AAA 995,916.69 .29 3,000,000.00 PACIFICORP SECD MTN #TR 00115 7.709 6.860 A3 106.421 2,950,530.00 1.09 69512EEU5 7.300% 10/22/2004 DD 10/22/92 A 3,192,630.00 .93 1,600,000.00 ALLSTATE CORP SR NT 7.967 7.163 Al 109.937 1,594,032.00 .60 020002AL5 7.875% 05/01/2005 DD 05/01/00 A+ 1,758,992.00 .52 -------- ------- ----------------- --------- TOTAL FIXED INCOME SECURITIES .532 5.302 288,581,319.00 100.00 291,510,182.96 85.40 -------- ------- ----------------- --------- TOTAL .521 5.191 338,589,439.49 100.00 341,518,303.45 100.00 _._..._ ....-_.._...................... -._.............- __..........................._.........._._.__..__.._........_.__._............-.._................--._._._....._......_._— .._..__..__.._.._-----...._-- �..._................_._....- _._..._........_....--._.. Asset Detail Report ID: GL8013 E Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: .00SD-CONSOLIDATED-OCSG00010000 7/31/2003....................... ... ... _....._......................................................................................................................Status:......_FINAL............................._....... Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Pas Base Base Total Base U.S. DOLLAR CASH&CASH EQUIVALENTS PAYABLE FOR INVESTMENTS -20,659.375.00 -20.659,375.00 -5.65% 0.00 PURCHASED INTEREST RECEIVABLE 4,006,389.38 4.006.389.38 1.100/0 0.00 RECEIVABLE FOR INVESTMENTS 40.478.94 40.478.94 0.01% 0.00 SOLD FEDERAL HOME LN BK CONS DISC 99.7725 500,000.000 498,862.50 498,862.50 0.14% 0.00 NMAT 08/06/2003SEC ID: 313384KB4 FEDERAL HOME LN BK CONS DISC 99.7131 2,000,000.000 1,994,261.94 1,994,261.94 0.55% 0.00 NMAT 08/20/2003SEC ID: 313384KR9 FEDERAL HOME LN BKS CONS 99.7702 800.000.000 798.161.33 798,161.33 0.22% 0.00 DISCMAT 10/03/2003SEC ID: 313384MM8 FEDERAL HOME LN BK CONS DISC 99.7608 12.800.000.000 12,769,376.00 12,769,376.00 3.49% 0.00 NMAT 10/10/2003SEC ID: 313384MUO FEDERAL HOME LN BKS CONS 99.7472 12,000,000.000 11,969,666.67 11,969,666.67 3.27% 0.00 DISCMAT 10/15/2003SEC ID: 313384MZ9 FEDERAL HOME LN BK CONS DISC 99.7399 5,800,000.000 5,780,755.88 5,780,755.88 1.58% 0.00 NMAT 10/24/2003SEC ID: 313384NJ4 FEDERAL HOME LN BKS CONS 99.7358 1.500.000.000 1.496.037.71 1,496,037.71 0.41% 0.00 DISCMAT 10/29/2003SEC ID: 313384NPO FEDERAL]-TOME LN BK CONS DISC 99.4332 2,000,000.000 1,988,663.33 1,988,663.33 0.54% 0.00 NMAT 11/07/2003SEC ID: 313384NYI FEDERAL HOME LN MTG CORP 99.5692 2,000,000.000 1,991,383.33 1,991,383.33 0.54% 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 0.54% 0.00 DISCMAT 10/17/2003SEC ID: 313396NB5 FEDERAL NATL MTG ASSN DISC 99.7855 2,700,000.000 2,694,208.50 2,694,208.50 0.74% 0.00 NTMATURES 10/01/2003SEC ID: 313588MK8 1 Workbeadi Asset Detail Repot m: GL8013 Base Currency: USD b Currency Alternate Base Currency: Y Y i Exchange Rate: OCSD-CONSOLIDATED-OCSG00010000 7/31/2003 Status: FINAL, Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base FEDERAL NATL MTG ASSN 99.7447 14,300.000.000 14.263,272.81 14.263,272.81 3.901/6 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 0.54% 0.00 11/12/2003SEC ID: 313588PD I FEDERAL NATL MTG ASSN 99.6416 1.600.000.000 1.594,265.11 1.594,265.11 0.44% 0.00 DISCOUNTMAT 11/19/2003SEC ID:313588PL3 GENERAL ELEC CAP 99.6624 600.000.000 597,974.33 597.974.33 0.16% 0.00 DISC 11/12/2003SEC ID: 36959JYC1 DREYFUS TREASURY CASH 100.0000 4.325,514.330 4.325,514.33 4,325.514.33 1.180/0 0.00 MGMTSEC ID:996085247 TOTAL CASH&CASH EQUIVALENTS 66.925,514.330 50,130,228.48 50,130,228.48 13.71% 0.00 FIXED INCOME SECURITIES AIG SUNAMERICA GLOBAL REG S 5. 109.8670 752.000.000 826.199.84 826.199.84 0.23% 0.00 850%08/01/2008 DD 08/08/01SEC ID: U00907AAO COMMIT TO PUR FNMA SF MTG 5. 99.8125 15.000,000.000 15,459,375.00 14,971.875.00 4.10% -487.500.00 000%08/01/2018 DD 08/01/03SEC ID:0 1 F050486 COMMIT TO PUR FNMA SF MTG 6. 101.1875 5,000,000.000 5.200,000.00 5,059,375.00 1.38% -140,625.00 000%08/01/2033 DD 08/01/03SEC ID:0IF060683 ALLSTATE CORP SR NT7.8759io 109.9370 1.600.000.000 1,594.032.00 1.758.992.00 0.4811/6 164.960.00 05/01/2005 DD 05/01/OOSECID: 020002AL5 ASSOCIATES CORP NORTH AMER5. 103.2340 1.000,000.000 1,041.290.00 1,032,340.00 0.28% -8.950.00 800%04/20/2004 DD 04/20/99SEC ID: 046003KA6 BEAR STEARNS MTN #TR 100.1090 900,000.000 899,406.00 900.981.00 0.25% 1,575.00 00459VAR RT 12/01/2003 DD 08/17/OISEC ID:073928VC4 BELL ATLANTIC-NEW JERSEY INC5. 102.2030 650.000.000 677.046.50 664,319.50 0.180/0 -12.727.00 875%02/01/2004 DD 02/01/94SEC ID:077858AA6 CIT GROUP INC NEW SR NT 5.500% 105.5310 1.500,000.000 1,527.135.00 1,582,965.00 0.43% 55.830.00 11/30/2007 DD 12/02/02SECID: 125581ADO 2 Workbench. _....... ........ ..... ........... .. ......._........ _......................._............-- -- BaseRCurr M: U D01S Asset Detail �y by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOLIDATED-OCSG00010000 7/31/2003 status: FINAL Net Unrealized Price Cost Market Value %of Gain/Loss Description Base Shares Par Base Base Total Base CITIGROUP INC GLOBAL SUB NT5. 102.0460 5.000.000.000 5.333.600.00 5.102.300.00 1.40D/o -231.300.00 625%08/27/2012 DD 08/26/02SEC ID: 172967BP5 COLGATE PALMOLIVE MTN TR 101.3430 300.000.000 308.808.00 304.029.00 0.08% -4.779.00 000585.270D/o 12/01/2003 DD 11/24/98SEC ID: 19416QCK4 COUNTRYWIDE HOME LNS INC NT6. 104.6710 2.500.000.000 2.498.400.00 2.616.775.00 0.72% 118.375.00 850%06/15/2004 DD 06/24/99SEC ID:22237UAB8 WMP/HUNTOON PAIGE#000- 104.8649 949,714,500 929.087.90 995.916.69 0.27% 66.828.79 111507.500% 12/01/2030 DD 10/21/99SEC ID:302998GE3 FHLMC GROUP#G4-0353 7.500% 102.4097 146,387.690 150,093.13 149,915.16 0.04% -177.97 10/01/2004 DD 03/01/99SECID: 3128DBMA2 FEDERAL HOME LN BK CONS BDS7. 108.2495 7,500,000.000 7,997,625.00 8,118,708.75 2.22% 121,083.75 125%02/15/2005 DD 02/08/00SEC ID:3133MAUN7 FEDERAL HOME LN BK CONS BDS 5. 100.1927 100,000.000 103.311.00 100.192.65 0.03% -3.118.35 925%08/14/2003 DD 08/14/98SEC ID:3133M55B2 FHLMC MULTICLASS MTG SER E3 100.4600 1,271,918.740 1.273.273.85 1.277.769.57 0.35% 4,495.72 AVAR RT 08/15/2032 DD 12/01/97SEC ID:3133TCE95 FHLMC MULTICLASS CTF T11 A66. 100.2290 406.910.960 407,091.63 407.842.79 0.11% 751.16 500%09/25/2018SECID: 3133TDPV2 FHLMC MULnCLASS CTF SER 99.6610 2.942.707.570 2.786.567.63 2.932.731.79 0.800/0 146.164.16 162OZ6.000% 11/15/2023 DD 11/01/93SEC ID:3133T17A4 FEDERAL FARM CR BKS CONS 102.1011 1,350,000.000 1,399,963.50 1,378,364.85 0.38% -21,598.65 SYSTE6.40%01/23/2004 DD 01/O1/1999SEC ID:31331H6G7 FEDERAL FARM CR BKS CONS 100.2939 150.000.000 155.796.00 150.440.88 0.04% -5,355.12 MTN6.550%08/19/2003 DD 08/19/96SEC ID:31331NW59 FEDERAL FARM CR BKS CONS MTN 100.6875 550,000.000 565.229.50 553.781.42 0.150/0 -11.448.08 5.000D/o 10/02/2003 DD 10/02/98SEC ID:3133 1 RC78 3 Workbench Report ID: GL8018 Base currency: GL8 USD by Currency Alternate Base currency: Exchange Rate: Go001ooao 7 3 i 2003 OCSD-CONSOLIDATED OCs ..................................._. � � ..........................................._..........._._. Status: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base FEDERAL HOME LN MTG CORP DEB 101.8612 1.100.000.000 1.125.905.00 1,120,472.65 0.31% -5,432.35 3.750%04/15/2004 DD 04/15/02SEC ID:3134A4PH1 FHLMC GROUP#78-6064 6.384% 103.1507 88.172.210 86,023.01 90.950.25 0.02% 4.927.24 01/01/2028 DD 12/01/97SECID: 31348SWZ3 FEDERAL NATL MTG ASSN DEBS5. 102.1541 4.200.000.000 4,350,168.00 4.290.473.46 1.17% -59.694.54 125%02/13/2004 DD 02/08/99SEC ID:31359MEM 1 FEDERAL NATL MTG ASSN DEBS6. 112.7053 2,100,000.000 2,030,133.00 2,366,810.25 0.65% 336.677.25 625%09/15/2009 DD 09/01/99SEC ID:31359MEY5 FEDERAL NATL MTG ASSN DEBS7. 108.1426 15,500,000.000 16.154.410.00 16,762,095.25 4.58% 607,685.25 125%02/15/2005 DD 02/14/OOSEC ID:31359MFH 1 FEDERAL NATL MTG ASSN DEBS5. 107.1100 11.350.000.000 11.521.271.50 12,156,985.00 3.33% 635.713.50 250%06/15/2006 DD 06/22/OISEC ID:31359MJX2 FNMA POOL#0323980 6.000% 103.8867 292.207.180 305.082.56 303.564.45 0.08% -1,518.11 04/01/2014 DD 09/01/99SEC ID: 31374T2MO FNMA POOL#0456482 6.0001),'o 103.9492 105.419.530 110,064.58 109,582.78 0.03% -481.80 02/01/2014 DD 02/01/99SEC ID: 31381CCT2 FNMA POOL#0509649 6.000% 103.8867 318.930.910 332,983.81 331.326.86 0.090/0 -1.656.95 09/01/2014 DD 09/01/99SEC ID: 31383QEWO FNMA POOL#0535451 6.000% 103.8867 234.208.910 244.528.74 243,311.95 0.07% -1.216.79 06/01/2015 DD 07/01/00SECID: 31384VZg8 FNMA POOL#0535672 6.000% 103.8867 5,187,179.850 5,415,739.96 5,388,791.01 1.47% -26,948.95 01/01/2016 DD 12/01/00SECID- 31384WCH 1 FNMA POOL#0545296 6.000% 103.6992 1.795.470.680 1,874,583.60 1,861,889.09 0,51% -12.694.51 11/01/2016 DD 10/01/OI SEC ID: 31385HXZO FNMA POOL#0545580 6.000% 103.7617 147,793.190 154.305.32 153,352.76 0.04% -952.56 03/01/2017 DD 03/01/02SECID: 31385JCR7 4 Workbencb s................_-............... --....._....-..__._................_-.............._......._.............._..........._. Report Asset Detail Base Currency: usno><s f Alternate Base Currency: by Currency Exchange Rate: OCSD-CONSOLIDATED-OCS000010000 7/31/2003 Status: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base FNMA POOL#0555101 6.000% 103.6992 249.201.300 260.181.73 258,419.80 0.07% -1,761.93 10/01/2017 DD 11/01/02SEC ID: 31385WU23 FNMA POOL#0576386 6.000% 103.3991 97.289.710 101,576.54 100.596.69 0.03% -979.85 05/01/2016 DD 05/01/01 SEC ID: 31386XJ72 FNMA POOL#0576739 6.000% 103.7617 272,681.770 284.696.81 282.939.29 0.080/0 -1.757.52 04/01/2016 DD 04/01/01SECID: 31386XV86 FNMA POOL#0580888 6.000% 103.7617 307.745.010 321,305.02 319,321.52 0.090/0 -1.983.50 05/01/2016 DD 05/01/01SECID: 31387DJ91 FNMA POOL#0594002 6.000% 103.7617 230,979.510 241.157.04 239.668.31 0.07% -1,488.73 07/01/2016 DD 07/01/0ISECID: 31387T3K8 FNMA POOL#0597376 6.000% 103.6992 289.859.750 302.631.69 300.582.30 0.080/0 -2,049.39 09/01/2016 DD 08/01/01SECID: 31387XT96 FNMA POOL#0605259 6.000% 103.6992 283,252.440 295.733.25 293,730.57 0.08% -2.002.68 09/01/2016 DD 09/01/01 SEC ID: 31388HMG 1 FNMA POOL#0608366 6.000% 103.7617 174,345.940 182.028.05 180,904.35 0.05% -1.123.70 10/01/2016 DD 09/01/0ISECID: 31388I.Z78 FNMA POOL#0616734 6.000% 103.7617 174,071.010 181,741.01 180,619.07 0.050/0 -1,121.94 12/01/2016 DD 12/01/01SEC ID: 31388WEF9 FNMA POOL#0630812 6.000% 103.4676 293,469.300 306.400.29 303.645.64 0.080/0 -2.754.65 02/01/2017 DD 02/01/02SECID: 31389NYH2 FNMA POOL#0632376 6.000% 103.8492 1.150.158.100 1,200.836.95 1,194,430.22 0.33% -6,406.73 07/01/2017 DD 07/01/02SEC ID: 31389QQ50 FNMA POOL#0653116 6.000% 103.8492 684,648.940 714,816.28 711.002.58 0.190/0 -3,813.70 07/01/2017 DD 07/01/02SEC ID: 31390QSD8 FNMA POOL#0673280 6.000% 103.6992 277,680.390 289,915.68 287.952.40 0.080/0 -1,963.28 08/01/2017 DD 11/0 1/02SEC ID: 31391P6R2 rj Workbench Asset Detail Report ID:( Base Currency: USD USD by Currency Alternate Base Currency: Exchange Rate: OCSD.CONSOLIDATED-OCSG00010000 7/31/2003.................................................................................................................................................................. Status: FINAL I ..._........ ............................._... .. ... .................... ............ ..... ..... ........ ... Net Unrealized Price Cost Market Value %of Gain/Loss Description Base Shares Par Base Base Total Base FNMA POOL#0698939 6.000'/0 103.8742 139.373.890 145,515.05 144.773.54 0.04% -741.51 09/01/2017 DD 03/01/03SECID: 31400VPY2 FNMA POOL#0703195 6.000% 104.0742 95,035.670 99.223.18 98,907.63 0.03% -315.55 01/01/2017 DD 04/01/03SECID: 31401BGC3 FORD MOTOR CR CO NT6.750% 104.6710 1,000,000.000 965.170.00 1,046,710.00 0.29% 81.540.00 05/15/2005 DD 05/24/93SECID: 345397GV9 FORD MTR CR CO GLOBAL 103.4210 3.000.000.000 2.995.080.00 3.102.630.00 0.85% 107.550.00 LANDMARK6.700%07/16/2004 DD 07/16/99SEC ID:345397SJ3 GNMA POOL#0596612 6.500% 103.8633 642.574.640 674.402.17 667,399.10 0.180/0 -7.003.07 09/15/2032 DD 09/01/02SECID: 36200BYH4 GNMA POOL#0569358 6.500% 103.4986 1,841,817.570 1,884,985.16 1.906.254.59 0.52% 21,269.43 04/15/2032 DD 04/01/02SECID: 36200QQK3 GNMA POOL#0569685 6.500% 103.8945 80.204.160 84.176.77 83.327.74 0.02% -849.03 02/15/2032 DD 02/01/02SECID: 3620OQ2S2 GNMA POOL#0570019 6.500% 103.8633 137.707.040 144.527.85 143.027.05 0.04% -1.500.80 07/15/2032 DD 07/01/02SECID: 3620ORG48 GNMA POOL#0574323 6.500% 103.8945 878,268.530 921,770.26 912,472.96 0.25% -9,297.30 12/15/2031 DD 12/01/01SECID: 36200WAY7 GNMA POOL#0575364 6.500% 103.8945 94.569.390 99.253.53 98.252.42 0.03% -1.001.11 11/15/2031 DD 11/O1/OISECID: 3620OXFD6 GNMA POOL#0587117 6.500% 103.8633 32,560.520 34,173.28 33.818.42 0.01% -354.86 06/15/2032 DD 06/01/02SEC ID: 36201MG22 GNMA POOL#0587439 6.500% 103.8633 106,823.130 112.114.21 110.950.01 0.03% -1,164.20 11/15/2032 DD 12/01/02SECID: 3620IMS45 GNMA POOL#0421389 6.500% 104.1758 21.552.870 22,620.41 22.452.87 0.01% -167.54 04/15/2026 DD 04/01/96SECID: 36206UC23 6 Workbench _...-- ---- -- --_--.--.-------- Report ID: GL8018 Asset Detail Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOLIDATED-OCSG00010000 7/31/2003 States: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base GNMA POOL#0438057 6.000% 102.2461 29.586.960 28,084.51 30,251.51 0.01% 2.167.00 05/15/2028 DD 05/01/98SECID: 36207PTN9 GNMA POOL#0449851 6.500% 103.6162 32,229.380 33.825.74 33,394.86 0.01% -430.88 01/15/2028 DD 0 1/0 1/98SEC ID: 36208FWLO GNMA POOL#0457814 6.000% 102.2461 51.392.150 48,782.38 52.546.46 0.01% 3,764.08 10/15/2028 DD 10/01/98SECID: 36208QSB3 GNMA POOL#0465546 6.000% 102.2461 654,307.910 621,081.34 669,004.25 0.180/0 47.922.91 08/15/2028 DD 08/01/98SECID: 36209AET3 GNMA POOL#0465555 6.000% 102.2461 695.115.340 659.816.54 710,728.26 0.190/0 50.911.72 09/15/2028 DD 09/01/98SECID: 36209AE48 GNMA POOL#0466845 6.500% 104.0195 95,196.810 99.912.03 99,023.27 0.030/0 -888.76 06/15/2028 DD 06/01/98SECID: 36209BTA6 GNMA POOL#0467279 6.000% 102.2461 25.225.590 23.944.60 25.792.18 0.01% 1.847.58 10/15/2028 DD 10/0 1/98SEC ID: 36209CCQ7 GNMA POOL#0467286 6.000/6 102.2461 496.302.790 471.099.91 507,450.20 0.14% 36,350.29 10/15/2028 DD 10/01/98SECID: 36209CCX2 GNMA POOL#0468052 6.5009/6 104.0195 680.418.970 714,120.97 707,768.61 0.190/0 -6,352.36 07/15/2028 DD 07/01/98SECID: 36209C5M4 GNMA POOL#0468330 6.000% 102.2461 28,487.850 27.041.19 29.127.71 0.01% 2,086.52 05/15/2028 DD 05/01/98SECID: 36209DHF4 GNMA POOL#0468339 6.000% 102.2461 463,542.790 440,003.53 473,954.38 0.13% 33,950.85 08/15/2028 DD 08/01/98SEC ID: 36209DHQO GNMA POOL#0469688 6.000% 102.2461 21.933.300 20,819.50 22,425.94 0.01% 1,606.44 11/15/2028 DD 11/01/98SEC ID: 36209EXRS GNMA POOL#0476041 6.500% 104.0195 281,974.520 295,500.49 293.308.57 0.080/0 -2,191.92 06/15/2028 DD 06/01/98SECID: 36209MZE7 7 Workbench .................._._.._.........._--._.__....__._._.... - ...... _-------- -----._......-.. ....._.._........... -___......... - ...._.... ....... _ - --_.-----._.._....__._...- ._..ID_--GL, � Asse.._t Deta-_-.il Report ID:.. (iso13 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: [OCSD-CONSOLIDATED-OCS000010000 7/31/2003 status: FINAL Net Unrealized Price Cost Market Value %of Gain/Loss Description Base Shares Par Base Base Total Base GNMA POOL#0478626 6.500% 104.0195 252.559.420 264,674.38 262,711.12 0.07% -1,963.26 01/15/2029 DD O 1/O 1/99SEC ID: 36209QVT9 GNMA POOL#0480598 6.500% 104.0195 289.527.260 303,415.53 301,164.90 0.080/0 -2,250.63 10/15/2028 DD 10/01/98SEC ID: 36209S3F6 GNMA POOL#0483452 6.000% 102.2461 18.846.060 17.889.04 19.269.36 0.01% 1,380.32 09/15/2028 DD 09/01/98SECID: 36209WBV3 GNMA POOL#0485527 6.5000/16 103.8945 725.190.480 761,110.07 753,433.24 0.21% -7.676.83 06/15/2031 DD 06/01/01SEC ID: 36209YLG1 GNMA POOL#0485610 6.500% 103.8945 875.765.600 919,143.37 909.872.55 0.25% -9,270.82 07/15/2031 DD 07/01/0ISECID: 36209YN38 GNMA POOL#0485682 6.500% 103.8945 166.163.170 174.393.44 172,634.44 0.05% -1.759.00 08/15/2031 DD 08/01/0ISECID: 36209YRB6 GNMA POOL#0485703 6.500% 103.8945 154,573.250 162.229.46 160.593.15 0.04% -1.636.31 08/15/2031 DD 08/01/01SEC ID: 36209YRY6 GNMA POOL#0486720 6.0000/6 102.2461 14.856.480 14,102.06 15.190.17 0.000/0 1,088.11 12/15/2028 DD 12/01/98SECID: 36210AVM6 GNMA POOL#0491103 6.000% 102.2461 145.768.470 138.366.17 149.042.56 0.04% 10,676.39 01/15/2029 DD 0 1/0 1/99SEC ID: 36210FRY4 GNMA POOL#0496461 6.000% 102.2461 523.769.030 497.171.37 535.533.35 0.15% 38.361.98 01/15/2029 DD 01/01/99SECID: 3621OMQN4 GNMA POOL#0497343 6.000% 102.2461 27.317.720 25.930.50 27.931.30 0.01% 2.000.80 12/15/2028 DD 12/01/98SECID: 362IONP45 GNMA POOL#0499153 6.000% 102.1836 16.506.940 15.668.69 16,867.38 0.000/0 1.198.69 02/15/2029 DD 02/01/99SEC ID: 36210QQE5 GNMA POOL#0500917 6.000% 102.1836 10.867.840 10,315.96 11.105.15 0.000/0 789.19 04/15/2029 DD 04/01/99SECID: 36210SPAO 8 WorkbendA ' Asset Detail Report ID: OLS013 Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOLIDATED-OCS000010000 7/31/2003 Status: snvAL Net Unrealized Price Cost Market Value %of Gain/Loss Description Base Shares Par Base Base Total Base GNMA POOL#0503388 6.0000ib 102.1836 468.332.600 444,550.08 478.559.06 0.13% 34,008.98 03/15/2029 DD 03/01/99SECID: 36210VF55 GNMA POOL#0506636 6.000% 102.1836 44,084.190 41,845.54 45.046.81 0.01% 3.201.27 04/15/2029 DD 04/01/99SEC ID: 36210YY90 GNMA POOL#0512235 6.500% 103.9570 16,487.700 17,304.36 17.140.12 0.000/0 -164.24 11/15/2029 DD 11/O1/99SECID: 36211GBC6 GNMA POOL#0514326 6.500% 103.9570 313.523.930 328,563.28 325,930.17 0.09% -2.633.11 07/15/2029 DD 07/01/99SEC ID: 36211JLF2 GNMA POOL#0530053 6.500% 103.4660 84,522.720 88,709.24 87.452.27 0.02% -1,256.97 04/15/2031 DD 04/01/OISEC ID: 36212CZS3 GNMA POOL#0530290 6.500% 103.8945 69,341.150 72.667.36 72,041.66 0.02% -625.70 03/15/2031 DD 04/01/01SECID: 36212DC31 GNMA POOL#0537885 6.500% 103.8945 167.219.540 175.502.13 173.731.96 0.05% -1.770.17 02/15/2031 DD 02/01/0ISECID: 36212MREI GNMA POOL#0547512 6.500% 103.8945 22,090.170 23,184.32 22,950.48 0.01% -233.84 04/15/2031 DD 04/01/01SECID: 36212YGV9 GNMA POOL#0547715 6.500% 103.8945 288,380.610 302.213.86 299,611.68 0.08% -2.602.18 02/15/2031 DD 02/01/0 1 SEC ID: 36212YN82 GNMA POOL#0552322 6.500% 103.8945 106,578.310 111,857.27 110.729.03 0.03% -1.128.24 01/15/2032 DD 01/O1/02SECID: 36213ESK3 GNMA POOL#0552466 6.500% 103.4986 896,660.190 941.072.89 928.030.35 0.25% -13,042.54 03/15/2032 DD 03/01/02SECID: 36213EW36 GNMA POOL#0552659 6.500% 103.8633 726.247.490 762,219.43 754.304.46 0.21% -7,914.97 07/15/2032 DD 07/01/02SECID: 36213E5U6 GNMA POOL#0561017 6.500% 103.8945 755,671.600 793,100.96 785.101.46 0.21% -7,999.50 07/15/2031 DD 07/01/0ISECID: 36213QG29 9 Workbench Asset Detail Report ID: GL8013 Base Currency: USD by Currency Alternate Base currency: Exchange Rate: I OCSD-CONSOLIDATED-OCSG00010000 7/31/2003 Status: FINAL ...................................................... Net Unrealized Price Cost Market Value % of Gain/Loss Description Base shares Par Base Base Total Base GNMA II POOL#0080023VAR RT 103.7032 294.341.180 299,216.21 305,241.16 0.08% 6.024.95 12/20/2026 DD 12/01/96SECID: 36225CAZ9 GNMA II POOL#080088M 7.375% 103.1463 408,059.010 416,985.31 420.897.69 0.12% 3.912.38 06/20/2027 DD 06/01/97SECID: 36225CC20 GNMA II POOL#0080395VAR RT 102.6150 339,946.890 336.866.13 348,836.50 0.100/0 11.970.37 04/20/2030 DD 04/01/OOSEC ID: 36225CNM4 GNMA II POOL#080408X 6.500% 102.6136 3,045,321.620 3,014,392.56 3,124,914.15 0.85% 110.521.59 05/20/2030 DD 05/01/OOSEC ID: 36225CN28 GTE NORTH INC DEB SER A6.000% 102.1090 3,000,000.000 3.063.750.00 3,063,270.00 0.84% -480.00 01/15/2004 DD 01/15/94SEC ID: 362337AD9 GENERAL ELEC MTN #TR 101.6710 1.340.000.000 1.380.508.20 1.362.391.40 0.37% -18.116.80 00019STEP UP 10/30/2003 DD 11/02/92SEC ID:36962FAUO GENERAL.ELEC CAP MTN#TR 100.3900 5,000,000.000 5,203,500.00 5,019,500.00 1.37% -184.000.00 00575 5.450%01/15/2013 DD 12/06/02SEC ID.36962GZY3 GENERAL MTRS ACCEP MTN 100.0000 4,000,000.000 3,998,440.00 4,000,000.00 1.090/0 1,560.00 #00615VAR RT 08/04/2003 DD 08/03/01SEC ID:37042WE80 GMAC NTSVAR RT 08/18/2003 DD 100.0000 3,950,000.000 3,918,768.50 3,950,000.00 1.080/0 31,231.50 08/17/98SEC ID:370425QV5 GENERAL MTRS ACCEP CORP SR NT 102.4530 3,000,000.000 3,064,350.00 3,073,590.00 0.84% 9.240.00 6.125%08/28/2007 DD 08/29/02SEC ID:370425SD3 GILLETTE CO NT 6.250% 100.1400 250.000.000 256.012.50 250.350.00 0.07% -5.662.50 08/15/2003 DD 08/16/93SECID: 375766AC6 GOLDMAN SACHS GROUP INC SR NT 101.2650 3,000,000.000 3,030,030.00 3,037,950.00 0.83% 7,920.00 4.125%01/15/2008 DD 01/13/03SEC ID:38141GCSI GNMA GTD REMIC TR 2000-9 100.5090 910.353.900 910,353.90 914,987.60 0.25% 4,633.70 FHVAR RT 02/16/2030SEC ID: 3837H4NX9 HOUSEHOLD FIN CORP NT 6.375% 106.8430 1.635.000.000 1,772,820.00 1,746,883.05 0.48% -25,936.95 10/15/2011 DD 10/23/01SEC ID: 441812JW5 10 Workbench ...................................................................... ................................ ............ ........... ......................................... .............................................. ................................................ ........................................................................................................ Asset Detail Report M: Base Currency: USD by Currency Alternate Base Currency: Exchange Rate: 'OCSJD 7/31/2003-CONSOLIDATED-OCSG00010000 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. 101.9060 3,000,000.000 3.127.260.00 3.057.180.00 0.84% -70.080.00 750%01/02/2013 DD 11/25/02SEC ID:46625HAT7 LEHMAN BROS HLDGS INC6.6250,6 103.4060 2,000,000.000 2.091.180.00 2,068,120.00 0.57% -23.060.00 04/01/2004 DD 03/26/99SEC ID: 524908BZ2 MARSH&MCLENNAN COS INC SR 104.4060 2,000,000.000 1.992.280.00 2,088,120.00 0.57% 95.840.00 NT6.625%06/15/2004 DD 06/14/99SEC ID: 571748AB8 MORGAN STANLEY NT 3.625% 98.9210 3,200,000.000 3,195,648.00 3,165,472.00 0.87% -30,176.00 04/01/2008 DD 03/06/03SEC ID: 617446HW2 MORGAN STANLEY DW MTN 100.1710 1.000.000.000 1,045,350.00 1.001.710.00 0.27% -43,640.00 #TR003497.1250/o 08/15/2003 DD 08/10/OOSEC ID:61745EQN4 NATIONAL RURAL UTILS COOP FIN 113.7650 3,000,000.000 3.465.480.00 3.412.950.00 0.93% -52,530.00 7.250%03/01/2012 DD 03/07/02SEC ID:637432CU7 PACIFICORP SECD MTN#TR.00 115 106.4210 3.000.000.000 2.950.530.00 3.192.630.00 0.87% 242.100.00 7.300% 10/22/2004 DD 10/22/92SEC ID:69512EEU5 PAINE WEBBER GROUP INC NTS6. 101.7030 500.000.000 519,405.00 508.515.00 0.140/6 -10,890.00 450% 12/01/2003 DD 12/01/98SEC ID:695629CE3 PHILIP MORRIS COS INC NTS 7. 102.4370 5,000,000.000 5,263,000.00 5,121,850.00 1.40% -141,150.00 500%04/01/2004 DD 04/01/97SEC ID:718154CH8 PROCTER&GAMBLE CO NTS5.250% 100.4840 656,000.000 672.278.56 659,175.04 0.18% -13.103.52 09/15/2003 DD 09/28/98SEC ID: 742718BK4 SBA GTD DEV PARTN 2001-20C 16. 106.4350 3,679,356.910 3,679,356.91 3,916,123.53 1.07% 236,766.62 340%03/01/2021SEC ID: 83162CLJO SBA GTD PARTN CTFS SBIC-PS 0 1 105.6250 2,520,466.090 2,520,466.09 2,662,242.31 0.73% 141.776.22 6.640%02/10/2011 DD 02/21/01SEC ID: 83164IDD4 UNITED AIRLS PASSTHRU 0 1-1 C 6. 14.8750 1,600,000.000 1,600,000.00 238.000.00 0.070/6 -1,362.000.00 831%03/01/2010 DD 08/22/01SEC ID:909317BC2 11 Workbench ...............................................--.................-..__..................__................___-..................................................................................................__..........._._........................._........_.........__..........._...................................___......................_._............................._...._.._.-................_..._.._.._.._...._.----------...---.......-_-__-._......._._..---- E Asset Detail Report ID: GL8013 Base Currency: USD I by Currency Alternate Base Currency: Exchange Rate: OCSD-CONSOLIDATED-OCS000010000 7/31/2003 status: FINAL _.............................................................._..._.................._.........._._.........,_..................._...................................................._.............................._.................................................................................._........................................ Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base US BANCORP MTN#TR 001196. 103.5930 2,000,000.000 2,092,620.00 2,071,860.00 0.57% -20,760.00 000%05/15/2004 DD 05/10/99SEC ID: 91159HEY2 U S TREASURY BONDS11.8750/0 103.1250 5,800,000.000 6,251,984.38 5,981,250.00 1.64% -270.734.38 11/15/2003 DD 10/05/83SEC ID: 91281ODGO U S TREASURY NOTES06.250% 112.0000 20.000.000.000 22,620,312.50 22.400.000.00 6.13% -220.312.50 02/15/2007 DD 02/15/97SECID: 9128272JO US TREASURY INFLATION INDEX 107.6563 16.215.640.000 14.288.613.87 17.457.149.94 4.78% 3.168.536.07 NT 3.3750b 01/15/2007 DD 01/15/97SEC ID:9128272M3 US TREASURY INFLATION INDEX NT 110.9065 14.546.480.000 16,179,548.79 16.132.991.84 4.41% -46.556.95 3.875%01/15/2009 DD 01/15/99SEC ID:9128274Y5 U S TREASURY NOTES05.750% 108.4375 57.100.000.000 62.782.901.47 61,917,812.50 16.94% -865,088.97 11/15/2005 DD 11/15/00SEC ID: 9128276N7 VERIZON GLOBAL FDG CORP 113.0310 3.000.000.000 3.530.490.00 3,390,930.00 0.93% -139.560.00 GLOBAL 7.375%09/01/2012 DD 08/26/02SEC ID:92344GAT3 VIRGINIA ELEC&PWR 01 SER A5. 107.5460 3.500.000.000 3.487.680.00 3,764,110.00 1.03% 276.430.00 750%03/31/2006 DD 03/27/01SEC ID:927804ENO WELLS FARGO&CO SUBNT6.125% 101.1560 450,000.000 467,496.00 455,202.00 0.12% -12,294.00 11/01/2003 DD 11/O1/93SECID: 949740BY9 TOTAL.FIRED INCOME SECURITIES 299,222,424.380 313,085,671.14 315,463,170.81 86.29% 2,377,499.67 TOTAL ASSETS U.S.DOLLAR 366,147,938.710 363,215,899.62 365,593,399.29 100.000/0 2,377,499.67 TOTAL ASSETS-BASE: 366,147,938.710 363,215,899.62 365,593,399.29 100.000/0 2,377,499.67 12 Workbenc4 .......................__._._...................._...__...._._....................__._._._........._.__._..___........_....._.....-........................._......._............._............._..._._.._._.................----- -........................................................_.................-.--......................................................................................................---.............._.-..........................-.......................-........... _...-- I Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD OCSD CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 !........................................................................................................................._...... Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Cain/Loss Type Description Reported Date Base Shares/Par Base Base Base RECEIPTS AND DISBURSEMENT TRANSACTIONS DISTRIBUTION TO PLAN ADMINISTRATOR U.S.DOLLAR CW REPS DISTRIBUTION TO PLAN 7/3/2003 0.000 -8.000.000.00 -8,000.000.00 0.00 ADMINISTRATORSEC ID: NA91234590CSF07511102: LIQUID OPER- 7/3/2003 PIMCO CW DISTRIBUTION TO PLAN 7/9/2003 0.000 -2.000,000.00 -2.000.000.00 0.00 ADMINISTRATORSEC ID: NA91234590CSF07511102: LIQUID OPER- PIMCO 7/9/2003 CW DISTRIBUTION TO PLAN 7/17/2003 0.000 -4.900,000.00 -4.900,000.00 0.00 ADMINISTRATORSEC ID: NA91234590CSF07511102: LIQUID OPER- 7/17/2003 PIMCO CW DISTRIBUTION TO PLAN 7/31/2003 0,000 -10,500.000.00 -10,500,000.00 0.00 ADMINISTRATORSEC ID: NA91234590CSF07511102:LIQUID OPER- PIMCO 7/31/2003 TOTAL DISTRIBUTION TO PLAN ADMINISTRATOR U.S.DOLLAR: 0.000 -25,400,000.00 -25,400,000.00 0.00 TOTAL DISTRIBUTION TO PLAN ADMINISTRATOR BASE: 0.000 -25,400.000.00 -25,400,000.00 0.00 TOTAL RECEIPTS AND DISBURSEMENT TRANSACTIONS BASE: 0.000 -25,400,000.00 -25,400,000.00 0.00 PURCHASES CASH&CASH EQUIVALENTS U.S.DOLLAR B FEDERAL HOME LN BK CONS DISC N MAT 7/1/2003 99.9247 1.500.000.000 1,498,870.67 -1,498,870.67 0.00 07/30/2003SEC ID:313384JU4BROKER: 7/2/2003 CHASE SECURITIES, NEW 7/1/2003 YORKOCSF07511102: LIQUID OPER-PIMCO B FEDERAL HOME LN BK CONS DISC MAT 7/25/2003 99.8215 1,100,000.000 1,098,036.50 -1,098,036.50 0.00 09/26/2003SEC ID:313384ME6BROKER: 7/25/2003 CITIGROUP GBL MKTS/SALOMON,NEW 7/25/2003 YORKOCSF07522202: LONG TERM OPER- PIMCO 1 Workbench ... Transaction Detail Report M: EWBOO9 i } Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCS000010000 7/1/2003 - 7/31/2003 ' Status:FINAL 1 ............................................................................................................----._....._........................................................................._....................__._................................................................... _ Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base B FEDERAL HOME LN BKS CONS DISC MAT 7/11/2003 99.7702 800.000.000 798.161.33 -798,161.33 0.00 10/03/2003SEC ID:313384MM8BROKER: 7/11/2003 BANC OF AMERICA SEC LLC,SAN 7/11/2003 FRANCISCOOCSF07522202: LONG TERM B WISEMMME LN BK CONS DISC N MAT 7/15/2003 99.7608 12,800,000.000 12,769,376.00 -12.769.376.00 0.00 10/10/2003SEC ID:313384MUOBROKER: 7/15/2003 CREDIT SUISSE FIRST BOSTON CORP.N 7/15/2003 YOCSF07522202: LONG TERM OPER-PIMCO B FEDERAL HOME LN BKS CONS DISC MAT 7/15/2003 99.7472 12.000.000.000 11.969,666.67 -11,969,666.67 0.00 10/15/2003SEC ID:313384MZ9BROKER: 7/16/2003 CHASE SECURITIES.NEW 7/15/2003 YORKOCSF07522202: LONGTERM OPER- B FR&% I.HOME LN BK CONS DISC N MAT 7/24/2003 99.7399 3,800,000.000 3.790.115.88 -3.790,115.88 0.00 10/24/2003SEC ID-.313384NJ4BROKER 7/25/2003 GOLDMAN SACHS&CO.NYOCSF07522202: 7/24/2003 LONG TERM OPER-PIMCO B FEDERAL HOME LN BKS CONS DISC MAT 7/29/2003 99.7358 1.500.000.000 1.496.037.71 -1.496.037.71 0.00 10/29/2003SEC ID:313384NPOBROKER: 7/30/2003 BANC OF AMERICA SEC LLC.SAN 7/29/2003 FRANCISCOOCSF07511102:LIQUID OPER- B P'Wt'RAL NATL MTG ASSN DISC NT 7/15/2003 99.7855 12,000,000.000 11.974,260.00 -11,974,260.00 0.00 MATURES 10/01/2003SEC ID: 7/15/2003 313588MK8BROKER:CHASE SECURITIES, 7/15/2003 NEW YORKOCSF07522202:LONG TERM B WBEMF 'L MTG ASSN DISCOUNT MAT 7/16/2003 99.7447 13,700,000.000 13.665,023.14 -13.665,023.14 0.00 10/15/2003SEC ID:313588MZ5BROKER: 7/16/2003 MERRILL LYNCH PIERCE FENNER SMITH INC 7/16/2003 NYOCSF07522202:LONG TERM OPER-PIMCO B FEDERAL NATL MTG ASSN DISCOUNT MAT 7/10/2003 99.6416 1.600.000.000 L594.265.11 -1,594,265.11 0.00 11/19/2003SEC ID:313588PL3BROKER: 7/11/2003 BANC OF AMERICA SEC LLC.SAN 7/10/2003 FRANCISCOOCSF07522202:LONG TERM B B Iki?EC CAP DISC 11/12/2003SEC 7/17/2003 99.6624 600.000.000 597.974.33 -597.974.33 0.00 ID:36959JYC I BROKER:CITIBANK CP IPA, 7/17/2003 NEW YORKOCSF07522202: LONGTERM 7/17/2003 OPER-PIMCO B LEHMAN CAT 2 REPO 01.060%07/02/2003 7/1/2003 100.0000 4,800,000.000 4.800,000.00 -4.800,000.00 0.00 DD 07/01/03SEC ID:99407E365BROKER: 7/1/2003 LEHMAN GOUT SECS INC,NYOCSF07511102:7/1/2003 LIQUID OPER-PIMCO 2 Wbrkbench, ....................... ........................ .... ._... ._...... .-------------------------- ................................. ........._.................................................................... ............... .... ...... ...... .... ....................... ... ............................_.....................---..................----...._........_._.__----------- ........__._...._...._..---..._._........._-_..__.__..____.__............. ._.......... ...... _........... ........... _...__._._..':_.`-___...._."_� Transaction Detail Report ID: EWBOO9 Reported by Transaction Category Base Currency: USD i OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status:FINAL i ....................................................................................................................................................................... .............................................................................................................. 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 01.030% 7/1/2003 100.0000 4,800,000.000 4,800,000.00 -4,800.000.00 0.00 07/02/2003 DD 07/01/03SECID: 7/1/2003 99407E399BROKER:CREDIT SUISSE FIRST 7/1/2003 BOSTON CORP. N YOCSF07511102:LIQUID B REBIq%19SE FB REPO 00.920% 7/2/2003 100.0000 4.000.000.000 4,000.000.00 -4,000,000.00 0.00 07/03/2003 DD 07/02/03SECID: 7/2/2003 99407F792BROKER:CREDIT SUISSE FIRST 7/2/2003 BOSTON CORP.N YOCSF07511102:LIQUID B EFl MMAR 2 REPO 00.940%07/03/2003 7/2/2003 100.0000 4.900.000.000 4,900.000.00 -4,900.000.00 0.00 DD 07/02/03SEC ID:99407GO55BROKER: 7/2/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/2/2003 LIQUID OPER-PIMCO B LEHMAN CAT 2 REPO 00.940%07/08/2003 7/7/2003 100.0000 2,900,000.000 2,900.000.00 -2.900,000.00 0.00 DD 07/07/03SEC ID:99407J794BROKER: 7/7/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/7/2003 LIQUID OPER-PIMCO B LEHMAN CAT 2 REPO 00.940%07/09/2003 7/8/2003 100.0000 2,900,000.000 2,900,000.00 -2,900.000.00 0.00 DD 07/08/03SEC ID: 99407K874BROKER: 7/8/2003 LEHMAN GOVT SECS INC. NYOCSF07511102:7/8/2003 LIQUID OPER-PIMCO B LEHMAN CAT 2 REPO 00.900%07/10/2003 7/9/2003 100.0000 3,600,000.000 3,600,000.00 -3,600,000.00 0.00 DD 07/09/03SEC ID:99407M375BROKER: 7/9/2003 LEHMAN GOVT SECS INC.NYOCSF07511102:7/9/2003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 00.980% 7/10/2003 100.0000 1,600,000.000 1,600,000.00 -1,600,000.00 0.00 07/11/2003 DD 07/10/03SECID: 7/10/2003 99407N985BROKER:CREDIT SUISSE FIRST 7/10/2003 BOSTON CORP, N YOCSF07511102:LIQUID B ffffi '6ff 2 REPO 00.920%07/14/2003 7/11/2003 100.0000 1,600,000.000 1,600,000.00 -1,600.000.00 0.00 DD 07/11/03SEC ID:99407Q228BROKER: 7/11/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/11/2003 LIQUID OPER-PIMCO B LEHMAN CAT 2 REPO 00.960%07/15/2003 7/14/2003 100.0000 1,600,000.000 1.600,000.00 -1,600,000.00 0.00 DD 07/14/03SEC ID:99407R67 1 BROKER: 7/14/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/14/2003 LIQUID OPER-PIMCO B LEHMAN CAT 2 REPO 01.060%07/16/2003 7/15/2003 100.0000 1,300,000.000 1,300.000.00 -1.300,000.00 0.00 DD 07/15/03SEC ID:99407TI56BROKER: 7/15/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/15/2003 LIQUID OPER-PIMCO 3 Workbench -._......_......_..........................................---......._..._........--..._...._............................ .............._._.._.-..._........__._..._..........._._................... ....--_._...........--.......---....-----.-................-..._........------.....------......._..._ -- ............--_..-...........-...__........._.....-_.-.............._....-.._ ........-..--.....-......._._._--------------------- Transaction Detail Report ID: EWBOO9 ( Reported by Transaction Category Base Currency: USD 1 OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status: FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss TYPO Description Reported Date Base Shares/Par Base Base Base B CREDIT SUISSE FB REPO 01.050% 7/15/2003 100.0000 1,300,000.000 1.300,000.00 -1,300,000.00 0.00 07/16/2003 DD 07/15/03SECID: 7/15/2003 9940717198BROKER:CREDIT SUISSE FIRST 7/15/2003 BOSTON CORP. N YOCSF07511102:LIQUID B �ff1tkU 2 REPO 01.010%07/17/2003 7/16/2003 100.0000 1,500,000.000 1,500,000.00 -1.500,000.00 0.00 DD 07/16/03SEC ID: 99407U302BROKER: 7/16/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/16/2003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 01.010% 7/16/2003 100.0000 1,600,000.000 1,600,000.00 -1,600.000.00 0.00 07/17/2003 DD 07/16/03SEC ID: 7/16/2003 99407U617BROKER:CREDIT SUISSE FIRST 7/16/2003 BOSTON CORP.N YOCSF07511102:LIQUID B eREBIIN519SE FB REPO 01.0200% 7/29/2003 100.0000 1.600.000.000 1,600,000.00 -1,600,000.00 0.00 07/30/2003 DD 07/29/03SECID: 7/29/2003 99408H250BROKER:CREDIT SUISSE FIRST 7/29/2003 BOSTON CORP.N YOCSF07511102:LIQUID B 9AMY'Eff 2 REPO 01.030%07/30/2003 7/29/2003 100.0000 1.600.000.000 1,600,000.00 -1,600,000.00 0.00 DD 07/29/03SEC ID:99408H433BROKER: 7/29/2003 LEHMAN GOUT SECS INC,NYOCSF07511102:7/29/2003 LIQUID OPER-PIMCO B LEHMAN CAT 2 REPO 01.030%07/31/2003 7/30/2003 100.0000 2.500.000.000 2,500.000.00 -2.500.000.00 0.00 DD 07/30/03SEC ID:99408J520BROKER: 7/30/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/30/2003 LIQUID OPER-PIMCO B CREDIT SUISSE FB REPO 01.020% 7/30/2003 100.0000 2,500,000.000 2,500.000.00 -2.500,000.00 0.00 07/31/2003 DD 07/30/03SECID: 7/30/2003 99408J611BROKER:CREDIT SUISSE FIRST 7/30/2003 BOSTON CORP,N YOCSF07511102:LIQUID B BK�MVrY'REASURY CASH MGMTSEC ID: 7/1/2003 1.0000 7,807.640 7,807.64 -7.807.64 0.00 9960852470CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO 7/1/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/2/2003 1.0000 103.979.170 103,979.17 -103,979.17 0.00 9960852470CSF07522202:LONG TERM 7/2/2003 OPER-PIMCO 7/2/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/2/2003 1.0000 1,407.990 1.407.99 -1,407.99 0.00 9960852470CSF07511102:LIQUID OPER- 7/2/2003 PIMCO 7/2/2003 4 Wbrkbench' f........................._._..............................._......._....---_._._...._._._.........._...._._......._._......._._._._._._...._....................._................................................._._._._................................................................................................................_._._._........ --.._._.__.......... ---._._._................... .....................................................r:......................... ..... Transaction Detail Report M: EW13009 Reported by Transaction Category Base Currency: usn OCS13-CONSOLIDATED-OCSGOOO10000 7/1/2003 - 7/31/2003 status: gnvAl ......................_- _ ..............................................._.........................._.........................................................-........................-........._.....--------------.........................................................................-------------..................._.................-_--._..............._...._._.... ...................-....._............................................_....................._...................__............-.__.._..� Trade Date Trap Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base B DREYFUS TREASURY CASH MGMTSEC ID: 7/3/2003 1.0000 900,230.160 900,230.16 -900.230.16 0.00 9960852470CSF07511102:LIQUID OPER- 7/3/2003 PIMCO 7/3/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/8/2003 1.0000 75.720 75.72 -75.72 0.00 9960852470CSF07511102:LIQUID OPER- 7/8/2003 PIMCO 7/8/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/10/2003 1.0000 133,420.710 133.420.71 -133.420.71 0.00 9960852470CSF07511102:LIQUID OPER- 7/10/2003 PIMCO 7/10/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/11/2003 1.0000 43.560 43.56 -43.56 0.00 9960852470CSF07511102:LIQUID OPER- 7/11/2003 PIMCO 7/11/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/14/2003 1.0000 14.843.750 14,843.75 -14.843.75 0.00 9960852470CSF07522202:LONG TERM 7/14/2003 OPER-PIMCO 7/14/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/14/2003 1.0000 1,015,262.250 1,015.262.25 -1.015,262.25 0.00 9960852470CSF07511102:LIQUID OPER- 7/14/2003 PIMCO 7/14/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/15/2003 1.0000 1,423,346.180 1,423,346.18 -1,423,346.18 0.00 9960852470CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO 7/15/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/21/2003 1.0000 236.767.840 236,767.84 -236,767.84 0.00 9960852470CSF07522202:LONG TERM 7/21/2003 OPER-PIMCO 7/21/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/22/2003 1.0000 158.479.000 158,479.00 -158,479.00 0.00 9960852470CSF07522202:LONG TERM 7/22/2003 OPER-PIMCO 7/22/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/23/2003 1,0000 636.450.000 636,450.00 -636.450.00 0.00 9960852470CSF07511102:LIQUID OPER- 7/23/2003 PIMCO 7/23/2003 5 Workbench _ -....................................-._.....-.........._._.._....-.-._.._._._....-. ___. ..._.._._.._...._._.__. ._........ Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCS000010000 7/1/2003 - 7/31/2003 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: 7/23/2003 1.0000 36,929.800 36.929.80 -36.929.80 0.00 9960852470CSF07522202: LONG TERM 7/23/2003 OPER-PIMCO 7/23/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/25/2003 1.0000 198.457.540 198.457.54 -198.457.54 0.00 9960852470CSF07522202:TANG TERM 7/25/2003 OPER-PIMCO 7/25/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/29/2003 1.0000 6,683.550 6,683.55 -6.683.55 0.00 9960852470CSF07522202:LONG TERM 7/29/2003 OPER-PIMCO 7/29/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/30/2003 1.0000 4.053.400 4,053.40 -4,053.40 0.00 9960852470CSF07511102:LIQUID OPER- 7/30/2003 PIMCO 7/30/2003 B DREYFUS TREASURY CASH MGMTSEC ID: 7/31/2003 1.0000 3.996.652.590 3,996.652.59 -3.996.652.59 0.00 9960852470CSF07511 102: LIQUID OPER- 7/31/2003 PIMCO 7/31/2003 TOTAL CASH&CASH EQUIVALENTS U.S.DOLLAR: 116,874,890.850 116,726,678.19 -116,726,678.19 0.00 TOTAL CASH&CASH EQUIVALENTS BASE: 116,874,890.850 116,726,678.19 -116.726,678.19 0.00 FIRED INCOME SECURITIES U.S.DOLLAR BC COMMIT TO PUR FNMA SF MTG 5.000% 4/25/2003 102.1328 -4,000.000.000 -4.085,312.50 4,085,312.50 0.00 07/01/2018 DD 07/01/03SECID: 7/17/2003 0 1 F050478BROKER:CREDIT SUISSE FIRST 7/1/2003 BOMN CORP.N YOCSF07522202:LONG B � � iMA SF MTG 5.000% 4/25/2003 102.1328 4,000,000.000 4.085.312.50 -4,085.312.50 0.00 07/01/2018 DD 07/01/03SEC ID: 7/17/2003 0 1 F050478BROKER:CREDIT SUISSE FIRST 7/1/2003 BOSMN CORP.N YOCSF07522202:LONG BC Zf�'WRMWMA SF MTG 5.000% 6/11/2003 103.6875 -2.000.000.000 -2.073.750.00 2,073,750.00 0.00 07/01/2018 DD 07/01/03SECID: 7/17/2003 0IF050478BROKER:LEHMAN GOVT SECS 7/1/2003 INC.NYOCSF07522202:LONGTERM OPER- PIMCO 6 Wbrkbench' ................................................................------------------- .......................................... ................*"*"'*................... ............ ............... ................... ................... --------------------------------------------------------------------....................... ---------------- Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 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% 6/11/2003 103.6406 -6.000.000.000 -6.218,437.50 6.218.437.50 0.00 07/01/2018 DD 07/01/03SEC ID: 7/17/2003 0IF050478BROKER:CREDIT SUISSE FIRST 7/1/2003 BOSTON CORP.N YOCSF07522202:LONG B �PM-WCAMA 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 07/01/03SEC ID: 7/17/2003 0IF050478BROKER:CREDIT SUISSE FIRST BOSTON CORP, N YOCSF07522202: LONG 7/1/2003 B SF MTG 5.0000% 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 0IF050478BROKER:LEHMAN GOVT SECS 7/1/2003 INC. NYOCSF07522202:LONGTERM OPER- BC EMPIT To PUR FNMA 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 07/01/03SEC ID: 7/17/2003 0 1 F050478BROKER: BEAR STEARNS&CO 7/1/2003 INC,NYOCSF07522202: LONG TERM OPER- B 818MIT To PUR FNMA 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 07/01/03SEC ID: 7/17/2003 0 1 F050478BROKER.BEAR STEARNS&CO INC, NYOCSF07522202: LONG TERM OPER- B EJWnQrr To PUR FNMA SF MTG 5.000% 7/10/2003 103.0000 10,000,000.000 10,300.000.00 -10,300.000.00 0.00 08/01/2018 DD 08/01/03SEC ID: 8/18/2003 0IF050486BROKER:CREDIT SUISSE FIRST BOSTION CORP. N YOCSF07522202:LONG 7/10/2003 B FdWfff'&-?ffi%MA SF MTG 5.0000% 7/14/2003 103.1875 3,000,000.000 3,095,625.00 -3,095,625.00 0.00 08/01/2018 DD 08/01/03SEC ID: 8/18/2003 0 1 F050486BROKER.BEAR STEARNS&CO INC,NYOCSF07522202:LONGTERM OPER- B EIRRIT To PUR FNMA SF MTG 5.000% 7/14/2003 103.1875 2.000.000.000 2,063.750.00 -2,063.750.00 0.00 08/01/2018 DD 08/01/03SEC ID: 8/18/2003 0 1 F050486BROKEP-LEHMAN GOVT SECS 7/14/2003 INC,NYOCSF07522202:LONGTERM OPER- B VW POOL#0570019 6.500% 5/19/2003 104.9531 150.533.960 157,990.10 -157.990.10 0.00 07/15/2032 DD 07/01/02SEC ID: 6/19/2003 3620ORG48BROKER: UBS SECURITIES LLC, 7/1/2003 NEW YORKOCSF07522202:LONG TERM IB 8%&P'V619L#0570019 6.500-1. 5/19/2003 104.9531 0.000 0.00 -489.24 0.00 07/15/2032 DD 07/01/02SEC ID: 6/19/2003 3620ORG48BROKER:UBS SECURITIES LLC, 7/1/2003 NEW YORKOCSF07522202: LONG TERM OPER-PIMCO 7 Workbench ............._..............................._................._._..._._.............__._...._..................................................................._....._......................... .... ..... .............. ........... ..... ........._.......... ........ ................... .. ............................ ............. ................_......................__._...................__......._.._............-.............. _...._._....._.------ .---- ..._.__....._.......__._... Transaction Detail Report ID: EWB009 E Reported by Transaction Category Base Currency: USD ' OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status:FINAL .._..... ..__................................................................................_......................................................................................................................---.._............. Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base BC GNMA POOL#0585263 6.500% 5/19/2003 104.9531 -150,533.650 -157.989.77 157.989.77 0.00 08/15/2032 DD 08/01/02SECID: 6/19/2003 36201KFC5BROKER: UBS SECURITIES LLC, 7/1/2003 NEW YORKOCSF07522202: LONG TERM IBC BRWAPID*eL#0585263 6.500% 5/19/2003 104.9531 0.000 0.00 489.23 0.00 08/15/2032 DD 08/01/02SECID: 6/19/2003 36201KFC5BROKER:UBS SECURITIES LLC, 7/1/2003 NEW YORKOCSF07522202:LONG TERM B 99FI�EY INFLATION INDEX NT 3.875% 7/29/2003 111.0000 7,273,630.000 8,073,729.30 -8,073.729.30 0.00 01/15/2009 DD 0 1/15/99SEC ID: 7/30/2003 9128274Y5BROKER: UBS SECURITIES LLC. 7/29/2003 NEW YORKOCSF07522202:LONG TERM IB e9 C'INFLATION INDEX NT 3.875% 7/29/2003 111.0000 0.000 0.00 -11,488.58 0.00 01/15/2009 DD 0 1/15/99SEC ID: 7/30/2003 9128274Y5BROKER: UBS SECURITIES LLC. 7/29/2003 NEW YORKOCSF07522202: LONGTERM B 99�EY INFLATION INDEX NT 3.875% 7/30/2003 111.4531 7.273.240.000 8.106.253.27 -8.106.253.27 0.00 01/15/2009 DD 0 1/15/99SEC ID: 7/31/2003 9128274Y5BROKER:BANK OF NY BARCLAYS 7/30/2003 DE ZOETE WEDD.NYOCSF07522202:LONG IB ~kWATION INDEX NT 3.875% 7/30/2003 111.4531 0.000 0.00 -12,253.83 0.00 01/15/2009 DD 01/15/99SEC ID: 7/31/2003 9128274Y5BROKER:BANK OF NY BARCLAYS 7/30/2003 DE ZOETE WEDD, NYOCSF07522202:LONG TERM OPER-PTM?!6L FIXED INCOME SECURITIES U.S. DOLLAR: 29,546,870.310 31.639,357.90 -31.663,100.32 0.00 TOTAL FIXED INCOME SECURITIES BASE: 29,546,870.310 31,639,357.90 -31,663.100.32 0.00 TOTAL PURCHASES BASE: 146,421,761.160 148,366.036.09 -148,389,778.51 0.00 PAY UPS FIXED INCOME SECURITIES U.S.DOLLAR PU FHLMC MULTICLASS CTF SER 1620Z 6.000% 7/1/2003 100.0000 14,640.330 14,640.33 -14.640.33 0.00 11/15/2023 DD 11/01/93SEC ID: 7/1/2003 3133T17A40CSF07522202:LONGTERM 7/1/2003 OPER-PIMCO SALES CASH&CASH EQUIVALENTS $ Workbench Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status: FINAL i.......................... ....................... _ -- _._....................._............... ................. .. ..__ . Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base U.S.DOLLAR S FEDERAL HOME LN BK CONS DISC N MAT 7/17/2003 99.7988 -1.800,000.000 -1.796,377.50 1,796,377.50 0.00 07/23/2003SEC ID:313384JM2BROKER: 7/17/2003 CHASE SECURITIES,NEW 7/17/2003 YORKOCSF07511102: LIQUID OPER-PIMCO IS FEDERAL HOME LN BK CONS DISC N MAT 7/17/2003 99.7988 0.000 0.00 3.364.50 0.00 07/23/2003SEC ID:313384JM2BROKER: 7/17/2003 CHASE SECURITIES, NEW 7/17/2003 YORKOCSF07511102:LIQUID OPER-PIMCO S FEDERAL HOME LN BK CONS DISC N MAT 7/30/2003 99.7118 -1.300,000.000 -1,296,253.83 1,296,253.83 0.00 08/06/2003SEC 1D: 313384KB4BROKER: 7/30/2003 MORGAN STANLEY&CO INC, 7/30/2003 NYOCSF07522202: LONG TERM OPER-PIMCO IS FEDERAL HOME LN BK CONS DISC N MAT 7/30/2003 99.7118 0.000 0.00 3,498.45 0.00 08/06/2003SEC ID:313384104BROKER: 7/30/2003 MORGAN STANLEY&CO INC. 7/30/2003 NYOCSF07522202: LONG TERM OPER-PIMCO S FEDERAL HOME LN BK CONS DISC N MAT 7/31/2003 99.7725 -2.500.000.000 -2.494.312.50 2,494,312.50 0.00 08/06/2003SEC ID: 313384KB4BROKER: 7/31/2003 MORGAN STANLEY&CO INC, 7/31/2003 NYOCSF07511102:LIQUID OPER-PIMCO IS FEDERAL HOME LN BK CONS DISC N MAT 7/31/2003 99.7725 0.000 0.00 5.287.50 0.00 08/06/2003SEC ID:313384KB4BROKER: 7/31/2003 MORGAN STANLEY&CO INC, 7/31/2003 NYOCSF07511102:LIQUID OPER-PIMCO S FEDERAL HOME LN BK CONS DISC MAT 7/30/2003 99.7250 -250,000.000 -249,312.50 249,312.50 0.00 09/03/2003SEC ID: 313384LF4BROKER: 7/30/2003 CHASE SECURITIES, NEW 7/30/2003 YORKOCSF07522202: LONG TERM OPER- IS PAL HOME LN BK CONS DISC MAT 7/30/2003 99.7250 0.000 0.00 483.33 0.00 09/03/2003SEC ID:313384LF4BROKER: 7/30/2003 CHASE SECURITIES, NEW 7/30/2003 YORKOCSF07522202:LONG TERM OPER- S FiRiAL HOME LN BK CONS DISC MAT 7/30/2003 99.8215 -1,100,000.000 -1,098,036.50 1,098,036.50 0.00 09/26/2003SEC ID:313384ME6BROKER: 7/30/2003 GOLDMAN SACHS&CO, NYOCSF07522202: 7/30/2003 LONG TERM OPER-PIMCO IS FEDERAL HOME LN BK CONS DISC MAT 7/30/2003 99.8215 0.000 0.00 191.28 0.00 09/26/2003SEC ID:313384ME6BROKER: 7/30/2003 GOLDMAN SACHS&CO. NYOCSF07522202: 7/30/2003 LONG TERM OPER-PIMCO 9 Workbench ...._._..............................................._......._........................................._..........._._._._.._.........._...._........_._...._......._._............. .................._...._.............................................................. .......... Transaction Detail Report m: EWBOo9 j Reported b Transaction Category P YBase Currency: USD OCSD-coNSOLmATED-ocsc000l0000 7/1/2003 - 7/31/2003 status: FINAL .............................................._........-----------------.............................._.............................._.................................................I....................._......................._................_._._................................ Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base S FEDERAL HOME LN MTG CORP DISC MAT 7/14/2003 99.7519 -500,000.000 -498,759.44 498,759.44 0.00 07/17/2003SEC ID:313396JF I BROKER: 7/14/2003 BANC OF AMERICA SEC LLC,SAN 7/14/2003 FRANCISCOOCSF07511102:LIQUID OPER- IS PfSIAAL HOME LN MTG CORP DISC MAT 7/14/2003 99.7519 0.000 0.00 1,221.81 0.00 07/17/2003SEC ID:313396JF1BROKER: 7/14/2003 BANC OF AMERICA SEC LLC, SAN 7/14/2003 FRANCISCOOCSF07511102:LIQUID OPER- S FtAL HOME LN MTG CORP DISC MAT 7/11/2003 99.7563 -500,000.000 -498,781.25 498,781.25 0.00 08/11/2003SEC ID:313396KG7BROKER: 7/14/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/11/2003 LIQUID OPER-PIMCO IS FEDERAL HOME LN MTG CORP DISC MAT 7/11/2003 99.7563 0.000 0.00 927.08 0.00 08/11/2003SEC ID:313396KG7BROKER: 7/14/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/11/2003 LIQUID OPER-PIMCO S FEDERAL HOME LN MTG CORP DISC MAT 7/15/2003 99.7563 -500.000.000 -498.781.25 498,781.25 0.00 08/11/2003SEC ID:313396KG7BROKER: 7/16/2003 MORGAN STANLEY&CO INC. 7/15/2003 NYOCSF07511102:LIQUID OPER-PIMCO IS FEDERAL HOME LN MTG CORP DISC MAT 7/15/2003 99.7563 0.000 0.00 958.75 0.00 08/11/2003SEC ID:313396KG7BROKER: 7/16/2003 MORGAN STANLEY&CO INC. 7/15/2003 NYOCSF07511102:LIQUID OPER-PIMCO S FEDERAL HOME LN MTG CORP DISC MAT 7/28/2003 99.7563 -2,000,000.000 -1,995,125.00 1.995.125.00 0.00 08/11/2003SEC ID:313396KG7BROKER: 7/29/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/28/2003 LIQUID OPER-PIMCO IS FEDERAL HOME LN MTG CORP DISC MAT 7/28/2003 99.7563 0.000 0.00 4,152.78 0.00 08/11/2003SEC ID:313396KG7BROKER 7/29/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/28/2003 LIQUID OPER-PIMCO S FEDERAL HOME LN MTG CORP DISC MAT 7/30/2003 99.7308 -2.000.000.000 -1.994.616.67 1,994,616.67 0.00 08/14/2003SEC ID:313396KK8BROKER: 7/31/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/30/2003 LIQUID OPER-PIMCO IS FEDERAL HOME LN MTG CORP DISC MAT 7/30/2003 99.7308 0.000 0.00 4,636.66 0.00 08/14/2003SEC ID:313396KK8BROKER: 7/31/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/30/2003 LIQUID OPER-PIMCO 10 Workbench" ......................... ..........*"*"*"*.................... ............*................. .................... ........... ............ ........................ ................. ...........Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD fff OCSD-CONSOLWAMI)-OCS000010000 7/1/2003 - 7/31/2003 Status: FINAL............................................................................................................................................--............................................................................................................................................................................................................................................................................................................................................................................................................................... ............ . Trade Date Settle Date Price Cost Amount Net Gain/Loss Description Reported Date Base Shares/Par Base Base Base S FEDERAL HOME LN MTG CORP DISC MAT 7/30/2003 99.5983 -2.200,000.000 -2,191.163.64 2,191,163.64 0.00 08/22/2003SEC ID:313396KT9BROKER: 7/30/2003 MORGAN STANLEY&CO INC. 7/30/2003 NYOCSF07522202: LONG TERM OPER-PIMCO IS FEDERAL HOME LN MTG CORP DISC MAT 7/30/2003 99.5983 0.000 0.00 7.444.86 0.00 08/22/2003SEC ID:313396KMBROKER: 7/30/2003 MORGAN STANLEY&CO INC. 7/30/2003 NYOCSF07522202: LONG TERM OPER-PIMCO S FEDERAL HOME LN MTG CORP DISC MAT 7/30/2003 99.5542 -1.300,000.000 -1.294,204.89 1,294,204.89 0.00 09/12/2003SEC ID;313396LQ4BROKER: 7/30/2003 GOLDMAN SACHS&CO,NYOCSF07522202: 7/30/2003 LONG TERM OPER-PIMCO IS FEDERAL HOME LN MTG CORP DISC MAT 7/30/2003 99.5542 0.000 0.00 4.206.22 0.00 09/12/2003SEC ID:313396LQ4BROKER: 7/30/2003 GOLDMAN SACHS&Co. NYOCSF07522202: 7/30/2003 LONG TERM OPER-PIMCO S FEDERAL HOME LN MTG CORP DISC MAT 7/30/2003 99.6453 -2.000,000.000 -1,992,906.67 1,992,906.67 0.00 09/12/2003SEC ID:313396LQ4BROKER: 7/31/2003 LEHMAN GOUT SECS INC,NYOCSF07511102:7/30/2003 LIQUID OPER-PIMCO Is FEDERAL HOME LN MTG CORP DISC MAT 7/30/2003 99.6453 0.000 0.00 4,800.00 0.00 09/12/2003SEC ID:313396LQ4BROKER.- 7/31/2003 LEHMAN GOVT SECS INC,NYOCSF07511102: LIQUID OPER-PIMCO 7/30/2003 S FEDERAL NATL MTG ASSN DISCOUNT MAT 7/30/2003 99.6490 -250,000.000 -249.122.50 249.122-50 0.00 09/30/2003SEC ID:313588MJIBROKER- 7/30/2003 CHASE SECURITIES,NEW YORKOCSF07522202: LONG TERM OPER- 7/30/2003 is PR&'AAL NATL MTG ASSN DISCOUNT MAT 7/30/2003 99.6490 0.000 0.00 477.08 0.00 09/30/2003SEC ID:313588MJ I BROKER: 7/30/2003 CHASE SECURITIES,NEW YORKOCSF07522202: LONG TERM OPER- 7/30/2003 S FMWAL NATL MTG ASSN DISC NT 7/30/2003 99.7855 -1,300.000.000 -1,297,211.50 1,297,211.50 0.00 MATURES 10/0 1/2003SEC ID: 7/30/2003 313588MK8BROKER: MORGAN STANLEY& CO INC, NYOCSF07522202: LONG TERM 7/30/2003 IS PERFOWn MTG ASSN DISC NT 7/30/2003 99.7855 0.000 0.00 445.25 0.00 MATURES 10/0 1/2003SEC ID: 7/30/2003 313588MK813ROKER:MORGAN STANLEY& CO INC,NYOCSF07522202: LONG TERM 7/30/2003 OPER-PIMCO Workbench Transaction Detail Report ID: EW13009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCsc00010000 7/1/2003 - 7/31/2003 status: FINAI. ............................................................................................................................................................................................................................................................................................................................................................................ ........................................................__. ......................................................... Trade Date T Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base S FEDERAL NATL MTG ASSN DISC NT 7/31/2003 99.7855 -8.000,000.000 -7,982,840.00 7,982,840.00 0.00 MATURES 10/01/2003SECID: 7/31/2003 313588MK8BROKER:MERRILL LYNCH 7/31/2003 PIERCE FENNER SMITH INC IS Yi9EW7I RE%I h%&"�T 9*R-PIMCO 7/31/2003 99.7855 0.000 0.00 2,624.44 0.00 MATURES 10/01/2003SEC ID: 7/31/2003 313588MK8BROKER: MERRILL LYNCH 7/31/2003 PIERCE FENNER SMITH INC pgFRp {� S L'EFI1V17i1Y�71I ZK1:1'(J�I�bCN7CTL'/'130 7/2/2003 100.0000 -4.800,000.000 -4,800,000.00 4,800,000.00 0.00 DD 07/01/03SEC ID:99407E365BROKER: 7/2/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/2/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.060%07/02/2003 7/2/2003 100.0000 0.000 0.00 141.33 0.00 DD 07/01/03SEC ID:99407E365BROKER: 7/2/2003 LEHMAN GOVT SECS INC. NYOCSF07511102:7/2/2003 LIQUID OPER-PIMCO S CREDIT SUISSE FB REPO 01.030% 7/2/2003 100.0000 -4,800,000.000 -4,800,000.00 4,800.000.00 0.00 07/02/2003 DD 07/01/03SECID: 7/2/2003 99407E399BROKER:CREDIT SUISSE FIRST 7/2/2003 BOSTON CORP. N YOCSF07511102:LIQUID IS REBIVYfflSE FB REPO 01.030% 7/2/2003 100.0000 0.000 0.00 137.33 0.00 07/02/2003 DD 07/01/03SECID: 7/2/2003 99407E399BROKER:CREDIT SUISSE FIRST 7/2/2003 BOSTON CORP. N YOCSF07511102:LIQUID S @REB*I9fflSE FB REPO 00.920% 7/3/2003 100.0000 -4,000.000.000 -4,000,000.00 4.000.000.00 0.00 07/03/2003 DD 07/02/03SECID: 7/3/2003 99407F792BROKER CREDIT SUISSE FIRST 7/3/2003 BOSTON CORP, N YOCSF07511102: LIQUID IS eREB1f9fflSE FB REPO 00.920% 7/3/2003 100.0000 0.000 0.00 102.22 0.00 07/03/2003 DD 07/02/03SEC ID: 7/3/2003 99407F792BROKER:CREDIT SUISSE FIRST 7/3/2003 BOSTON CORP.N YOCSF07511102: LIQUID S Lfff% lff 2 REPO 00.940%07/03/2003 7/3/2003 100.0000 -4,900,000.000 -4,900,000.00 4,900,000.00 0.00 DD 07/02/03SEC ID:99407GO55BROKER: 7/3/2003 LEHMAN GOVT SECS INC. NYOCSF07511102:7/3/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 00.940%07/03/2003 7/3/2003 100.0000 0.000 0.00 127.94 0.00 DD 07/02/03SEC ID:99407GO55BROKER: 7/3/2003 LEHMAN GOVT SECS INC. NYOCSF07511102:7/3/2003 LIQUID OPER-PIMCO 12 Workbench' .......................__................_._........ ............................._..................._...._._........................_.................................................._._..........................-................--..........................._._.........................._._._.-...................................................................................................................................................-.-.................._._.-......................................__.................. , Transaction Detail Report ID: LVB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCSGOOOIOOOO 7/1/2003 - 7/31/2003 Status: FINAL i. ... .............. ................................................ .-.... ........._._......_............................... ___ ............... ... .... ......_._........................................ ............................. ! Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base S LEHMAN CAT 2 REPO 00.9401%07/08/2003 7/8/2003 100.0000 -2.900,000,000 -2.900.000.00 2.900,000.00 0.00 DD 07/07/03SEC ID:99407J794BROKER: 7/8/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/8/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 00.940%07/08/2003 7/8/2003 100.0000 0.000 0.00 75.72 0.00 DD 07/07/03SEC ID:99407J794BROKER: 7/8/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/8/2003 LIQUID OPER-PIMCO S LEHMAN CAT 2 REPO 00.940%07/09/2003 7/9/2003 100.0000 -2,900,000.000 -2.900,000.00 2.900.000.00 0.00 DD 07/08/03SEC 1D:99407K874BROKER: 7/9/2003 LEHMAN GOUT SECS INC,NYOCSF07511102:7/9/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 00.940%07/09/2003 7/9/2003 100.0000 0.000 0.00 75.72 0.00 DD 07/08/03SEC ID:99407K874BROKER: 7/9/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/9/2003 LIQUID OPER-PIMCO S LEHMAN CAT 2 REPO 00.900%07/10/2003 7/10/2003 100.0000 -3,600.000.000 -3,600.000.00 3,600,000.00 0.00 DD 07/09/03SEC ID:99407M375BROKER: 7/10/2003 LEHMAN GOUT SECS INC. NYOCSF07511102:7/10/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 00.900%07/10/2003 7/10/2003 100.0000 0.000 0.00 90.00 0.00 DD 07/09/03SEC ID:99407M375BROKER: 7/10/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/10/2003 LIQUID OPER-PIMCO S CREDIT SUISSE FB REPO 00.980% 7/11/2003 100.0000 -1,600.000.000 -1,600.000.00 1,600.000.00 0.00 07/11/2003 DD 07/10/03SEC ID: 7/11/2003 99407N985BROKER:CREDIT SUISSE FIRST 7/11/2003 BOSTON CORP. N YOCSF07511102: LIQUID IS @AEBI1FW9SE FB REPO 00.980% 7/11/2003 100.0000 0.000 0.00 43.56 0.00 07/11/2003 DD 07/10/03SECID: 7/11/2003 99407N985BROKER:CREDIT SUISSE FIRST 7/11/2003 BOSTON CORP,N YOCSF07511102:LIQUID S ffffNWPt9ff 2 REPO 00.920%07/14/2003 7/14/2003 100.0000 -1,600.000.000 -1,600.000.00 1,600.000.00 0.00 DD 07/11/03SEC ID:99407Q228BROKER: 7/14/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/14/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 00.920%07/14/2003 7/14/2003 100.0000 0.000 0.00 122.67 0.00 DD 07/11/03SEC ID: 99407Q228BROKER- 7/14/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/14/2003 LIQUID OPER-PIMCO 13 Workbench ........................._...................._.._..................._..................... _._................... ._..._.._............._...._............_........_..._...... ................. ................. __....... .......... .............................. __.......................................... ....... ........................................... ..........__.._._..___._..._.._..__._._................ .._.........._._....__._..__.................._._..._..._......_...._........._.____ _._.-.____ Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD i OCSD-CONSOLIDATED-OCSGOOO10000 7/1/2003 - 7/31/2003 Status: FINAL. Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base S LEHMAN CAT 2 REPO 00.9600.0 07/15/2003 7/15/2003 100.0000 -1.600.000.000 -1.600,000.00 1,600,000.00 0.00 DD 07/14/03SEC ID:99407R671BROKER: 7/15/2003 LEHMAN GOVT SECS INC. NYOCSF07511102:7/15/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 00.960%07/15/2003 7/15/2003 100.0000 0.000 0.00 42.67 0.00 DD 07/14/03SEC ID: 99407R67 1 BROKER: 7/15/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/15/2003 LIQUID OPER-PIMCO S LEHMAN CAT 2 REPO 01.060%07/16/2003 7/16/2003 100.0000 -1.300,000.000 -1,300.000.00 1,300,000.00 0.00 DD 07/15/03SEC ID:99407T156BROKER: 7/16/2003 LEHMAN GOVT SECS INC,NYOCSF07511102:7/16/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.060%07/16/2003 7/16/2003 100.0000 0.000 0.00 38.28 0.00 DD 07/15/03SEC ID:99407T156BROKER: 7/16/2003 LEHMAN GOVT SECS INC. NYOCSF07511102:7/16/2003 LIQUID OPER-PIMCO S CREDIT SUISSE FB REPO 01.050% 7/16/2003 100.0000 -1.300,000,000 -1.300,000.00 1.300,000.00 0.00 07/16/2003 DD 07/15/03SECID: 7/16/2003 99407I7198BROKER:CREDIT SUISSE FIRST 7/16/2003 BOSTON CORP,N YOCSF07511102:LIQUID IS eREBFYfflSE FB REPO 01.050% 7/16/2003 100.0000 0.000 0.00 37.92 0.00 07/16/2003 DD 07/15/03SECID: 7/16/2003 99407I7198BROKER:CREDIT SUISSE FIRST 7/16/2003 BOSTON CORP. N YOCSF07511102: LIQUID S UffffM§PL%2 REPO 01.010%07/17/2003 7/17/2003 100.0000 -1,500,000.000 -1,500,000.00 1,500.000.00 0.00 DD 07/16/03SEC ID:99407U302BROKER. 7/17/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/17/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.010%07/17/2003 7/17/2003 100.0000 0.000 0.00 42.08 0.00 DD 07/16/03SEC ID:99407U302BROKER: 7/17/2003 LEHMAN GOVT SECS INC. NYOCSF07511102:7/17/2003 LIQUID OPER-PIMCO S CREDIT SUISSE F13 REPO 0 1.010% 7/17/2003 100.0000 -1,600.000.000 -1,600,000.00 1.600,000.00 0.00 07/17/2003 DD 07/16/03SECID: 7/17/2003 99407U617BROKER: CREDIT SUISSE FIRST 7/17/2003 BOSTON CORP.N YOCSF07511102: LIQUID IS ei�EBIF SE FB REPO 01.010% 7/17/2003 100.0000 0.000 0.00 44.89 0.00 07/17/2003 DD 07/16/03SEC ID: 7/17/2003 99407U617BROKER:CREDIT SUISSE FIRST 7/17/2003 BOSTON CORP.N YOCSF07511102: LIQUID OPER-PIMCO 14 Workbench" ....................................................._............................................_._.............................-....................._........................................................................ ......................_.......................,.............,..............................._._.__....._............_._...._................................................--..........................._....................... J... Transaction Detail Report ID: EwBoos Reported by Transaction Category Base Currency: USD 1 OCSD-CONSOLIDATED-OCS000010000 7/1/2003 - 7/31/2003 .......... ......._.......... . ...._ ................ Status: FINAL........._.......................... Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base S CREDIT SUISSE FB REPO 01.020% 7/30/2003 100.0000 -1,600,000.000 -1,600,000.00 1,600,000.00 0.00 07/30/2003 DD 07/29/03SEC ID: 7/30/2003 99408H250BROKER:CREDIT SUISSE FIRST 7/30/2003 BOSTON CORP.N YOCSF07511102: LIQUID IS e9EBI' SE FB REPO 01.020% 7/30/2003 100.0000 0.000 0.00 45.33 0.00 07/30/2003 DD 07/29/03SEC ID: 7/30/2003 99408H250BROKER:CREDIT SUISSE FIRST 7/30/2003 BOSTON CORP, N YOCSF07511102: LIQUID S 94M§ '2 REPO 01.030%07/30/2003 7/30/2003 100.0000 -1.600,000.000 -1,600,000.00 1,600,000.00 0.00 DD 07/29/03SEC ID:99408H433BROKER 7/30/2003 LEHMAN GOUT SECS INC, NYOCSF07511102:7/30/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.030%07/30/2003 7/30/2003 100.0000 0.000 0.00 45.78 0.00 DD 07/29/03SEC ID:994081-1433BROKER: 7/30/2003 LEHMAN GOUT SECS INC, NYOCSF07511102:7/30/2003 LIQUID OPER-PIMCO S LEHMAN CAT 2 REPO 01.030%07/31/2003 7/31/2003 100.0000 -2.500,000.000 -2,500,000.00 2,500,000.00 0.00 DD 07/30/03SEC ID:99408J520BROKER: 7/31/2003 LEHMAN GOUT SECS INC, NYOCSF07511102:7/31/2003 LIQUID OPER-PIMCO IS LEHMAN CAT 2 REPO 01.030%07/31/2003 7/31/2003 100.0000 0.000 0.00 71.53 0.00 DD 07/30/03SEC ID:99408J520BROKER 7/31/2003 LEHMAN GOVT SECS INC, NYOCSF07511102:7/31/2003 LIQUID OPER-PIMCO S CREDIT SUISSE FB REPO 01.020% 7/31/2003 100.0000 -2.500.000.000 -2.500.000.00 2.500.000.00 0.00 07/31/2003 DD 07/30/03SECID: 7/31/2003 99408J611BROKER:CREDIT SUISSE FIRST 7/31/2003 BOSTON CORP,N YOCSF07511102:LIQUID IS 8JM1FSE FB REPO 01.020% 7/31/2003 100.0000 0.000 0.00 70.83 0.00 07/31/2003 DD 07/30/03SECID: 7/31/2003 99408J611BROKER CREDIT SUISSE FIRST 7/31/2003 BOSTON CORP, N YOCSF07511102:LIQUID S 9WdNrY EASURY CASH MGMTSEC ID: 7/1/2003 1.0000 -9.598.704.990 -9,598,704.99 9,598,704.99 0.00 9960852470CSF07511102: LIQUID OPER- 7/1/2003 PIMCO 7/1/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/7/2003 1.0000 -855.000.000 -855,000.00 $55.000.00 0.00 9960852470CSF07511102:LIQUID OPER- 7/7/2003 PIMCO 7/7/2003 15 Workbench .............. _.......... ..... ................_...._................. __......... ....................... .......... ... ._._...... .......... ......... .... ._._....._...._........................................................._. _. ................. ..... .............._....._........................................................................_..............._......._......._.---...._...._........................... --.............. ...._.........._......_...__..._...__ Transaction Detail Report ID: LVB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 status: FINAL t................................................ ...................._......................_........................_..................__...................................................._........................................................................_........................................................................................._.......................................--......................................................_.......__._.__..._.. _ .........................................._..................-..._............._.......... 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: 7/9/2003 1.0000 -233.254.990 -233,254.99 233,254.99 0.00 9960852470CSF07511102: LIQUID OPER- 7/9/2003 PIMCO 7/9/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/11/2003 1.0000 -792,426.440 -792.426.44 792.426.44 0.00 9960852470CSF07522202: LONG TERM 7/11/2003 OPER-PIMCO 7/11/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/15/2003 1.0000 -999,957.330 -999.957.33 999.957.33 0.00 9960852470CSF07511102:LIQUID OPER- 7/15/2003 PIMCO 7/15/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/16/2003 1.0000 -860.538.870 -860.538.87 860.538.87 0.00 9960852470CSF07522202: LONG TERM 7/16/2003 OPER-PIMCO 7/16/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/16/2003 1.0000 -183.800 -183.80 183.80 0.00 9960852470CSF07511102:LIQUID OPER- 7/16/2003 PIMCO 7/16/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/17/2003 1.0000 -171.030 -171.03 171.03 0.00 9960852470CSF07511102:LIQUID OPER- 7/17/2003 PIMCO 7/17/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/17/2003 1.0000 -590.825.880 -590.825.88 590,825.88 0.00 9960852470CSF07522202: LONGTERM 7/17/2003 OPER-PIMCO 7/17/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/24/2003 1.0000 -158.479.340 -158.479.34 158,479.34 0.00 9960852470CSF07522202:LONG TERM 7/24/2003 OPER-PIMCO 7/24/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/29/2003 1.0000 -600.722.220 -600,722.22 600.722.22 0.00 9960852470CSF07511102:LIQUID OPER- 7/29/2003 PIMCO 7/29/2003 S DREYFUS TREASURY CASH MGMTSEC ID: 7/30/2003 1.0000 -393,166.050 -393,166.05 393,166.05 0.00 9960852470CSF07522202:LONG TERM 7/30/2003 OPER-PIMCO 7/30/2003 16 Workbench- .......... Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 ............................._._._... _._._._. ._._......_._._------------.._._._.__.__._._.__Status:FINAL_._. Trade Date Trap Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base S DREYFUS TREASURY CASH MGMTSEC ID: 7/31/2003 1.0000 -133.066.710 -133.066.71 133.066.71 0.00 9960852470CSF07522202:LONG TERM 7/31/2003 OPER-PIMCO 7/31/2003 TOTAL CASH&CASH EQUIVALENTS U.S.DOLLAR: -89,316,497.650 -89.244,303.29 89,290,379.08 0.00 TOTAL CASH&CASH EQUIVALENTS BASE: -89,316,497.650 -89,244,303.29 89,290,379.08 0.00 FIRED INCOME SECURITIES U.S.DOLLAR S COMMIT TO PUR FNMA SF MTG 5.000% 7/10/2003 103.2383 -4,000,000.000 -4,130,166.67 4,129,531.25 -635.42 07/01/2018 DD 07/01/03SECID: 7/17/2003 017050478BROKER.CREDIT SUISSE FIRST 7/10/2003 BOSTON CORP.N YOCSF07522202: LONG S Wf'&-?f%MA SF MTG 5.000% 7/10/2003 103.2383 -6.000,000.000 -6.195,250.00 6,194,296.88 -953.12 07/01/2018 DD 07/01/03SECID: 7/17/2003 0IF050478BROKER:CREDIT SUISSE FIRST 7/10/2003 BOSTON CORP,N YOCSF07522202:LONG S F~f&-?R%MA SF MTG 5.000% 7/14/2003 103.4258 -3,000.000.000 -3.097.625.00 3,102,773.44 5,148.44 07/01/2018 DD 07/01/03SECID: 7/17/2003 01F050478BROKER:BEAR STEARNS&CO 7/14/2003 INC.NYOCSF07522202:LONG TERM OPER- S 816MITTo PUR FNMA SF MTG 5.000% 7/14/2003 103.4336 -2.000,000.000 -2,065.083.33 2,068,671.88 3,588.55 07/01/2018 DD 07/01/03SECID: 7/17/2003 0IF050478BROKER:LEHMAN GOVf SECS 7/14/2003 INC,NYOCSF07522202:LONG TERM OPER- PIMCO TOTAL FIRED INCOME SECURITIES U.S.DOLLAR: -15.000,000.000 -15,488,125.00 15,495,273.45 7.148.45 TOTAL FIRED INCOME SECURITIES BASE: -15,000,000.000 -15,488,125.00 15,495,273.45 7,148.46 TOTAL SALES BASE: -104.316.497.650 -104,732.428.29 104,785,652.53 7,148.45 PRINCIPAL PAYMENTS FIRED INCOME SECURITIES U.S.DOLLAR 17 Workbench ............*.................. .......... ............................. .............. .......... ..........................**...........................*........................ ......................... ................... .............*.......... Transaction Detail Report M: EWBOO9 Reported by Transaction Category Base Currency: USD 0CM-CONSOLIDATED-OCS000010000 7/1/2003 7/31/2003 Status:FINAL I.............................................................. ...................................................... --------------------------........................................... ............ .................................. . ..................... ------................... Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base PD WMP/HUNTOON PAIGE#000-11150 7.500% 7/1/2003 100.0000 -743.190 -727.05 743.19 16.14 12/01/2030 DD 10/21/99SEC ID: 7/1/2003 302998GE30CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD FHLMC GROUP#G4-0353 7.500% 7/1/2003 100.0000 -446.870 -458.18 446.87 -11.31 10/0 1/2004 DD 03/01/99SEC ID: 7/1/2003 3128DBMA20CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO, PDC FHLMC MUL11CLASS 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 3133TCE950CSF'07522202: LONG TERM 7/1/2003 OPER-PIMCO PD FHLMC MUI.TICLASS MTG SER E3 A VAR RT 6/1/2003 100.0000 -36.934.300 -36,973.65 36.934.30 -39.35 08/15/2032 DD 12/01/97SEC ID: 6/1/2003 3133Tr-E950CSF07522202:LONGTERM 7/1/2003 OPER-PIMCO PD FHLMC MUL17ICIASS MTG SER E3 A VAR RT 7/1/2003 100.0000 -36,020.900 -36.059.28 36,020.90 -38.38 08/15/2032 DD 12/01/97SEC ID- 7/1/2003 313ME950CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FHLMC MULTICLASS CTF TI 1 A6 6.500% 7/1/2003 100.0000 -238.604.720 -238.710.66 238,604.72 -105.94 09/25/2018SEC ID: 7/1/2003 3133TDPV20CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FHLMC GROUP#78-6064 6.384% 7/1/2003 100.0000 -4.458.040 -4.349.38 4,458.04 108.66 0 1/0 1/2028 DD 12/01/97SEC ID: 7/1/2003 31348SV,IZ30CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0323980 6.0000,6 7/1/2003 100.0000 -21.932.650 -22.899.06 21,932.65 -966.41 04/01/2014 DD 09/01/99SEC ID: 7/1/2003 31374T2M00CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0456482 6.000% 7/1/2003 100.0000 -10.800.300 -11.276.19 10.800.30 -475.89 02/01/2014 DD 02/01/99SEC ID: 7/1/2003 31381 CCT20CSF07522202:LONGTERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0509649 6.000% 7/1/2003 100.0000 -2,010.640 -2,099.23 2.010.64 -88.59 09/01/2014 DD 09/01/99SEC ID: 7/1/2003 31383QEWOOCSF07522202:LONG TERM 7/1/2003 OPER-PIMCO 18 Wb,*1,vnch-' f......................................... ......... ...-......................»........................ .......................... -.-............. .............. _... .......... .......___... .......... ................... ................_......................__................ ...... ......... ......»._................. ..............._.._....................... ...............................»........... .... _........... ...........�.�-»-.-............».�. Transaction Detail Report m: EWB009 Reported by Transaction Category Base Currency: USD € OCS&CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status:MAL t...................... Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base PD FNMA POOL#0535451 6.0000,0 7/1/2003 100.0000 -18,957.610 -19.792.93 18,957.61 -835.32 06/01/2015 DD 07/01/OOSECID: 7/1/2003 31384VZQ80CSF07522202:LONGTERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0535672 6.000% 7/1/2003 100.0000 -412.909.120 -431.102.93 412,909.12 -18.193.81 01/01/2016 DD 12/01/OOSEC ID: 7/1/2003 31384WCH 1 OCSF07522202: LONGTERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0545296 6.000% 7/1/2003 100.0000 -170.610.510 -178,128.04 170,610.51 -7,517.53 11/01/2016 DD 10/01/01SECID: 7/1/2003 31385HXZOOCSF07522202:LONG TERM OPER-PIMCO 7/1/2003 PD FNMA POOL#0545580 6.000% 7/1/2003 100.0000 -14.402.860 -15.037.49 14.402.86 -634.63 03/01/2017 DD 03/01/02SECID: 7/1/2003 31385JCR70CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0555101 6.000% 7/1/2003 100.0000 -19.798.940 -20,671.33 19,798.94 -872.39 10/01/2017 DD 11/0 1/02SEC ID: 7/1/2003 31385WU230CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0576386 6.000% 7/1/2003 100.0000 -2.927.760 -3.056.76 2,927.76 -129.00 05/01/2016 DD 05/01/01SECID: 7/1/2003 31386XJ720CSF07522202:LONGTERM OPER-PIMCO 7/1/2003 PD FNMA POOL#0576739 6.000% 7/1/2003 100.0000 -24.161.970 -25.226.61 24.161.97 -1.064.64 04/01/2016 DD 04/01/0 1 SEC ID: 7/1/2003 31386XV860CSF07522202:LONG TERM OPER-PIMCO 7/1/2003 PD FNMA POOL#0580888 6.000% 7/1/2003 100.0000 -20,688.290 -21.599.87 20,688.29 -911.58 05/01/2016 DD 05/01/0 1 SEC ID: 7/1/2003 31387DJ910CSF07522202:LONG TERM OPER-PIMCO 7/1/2003 PD FNMA POOL#0594002 6.000% 7/1/2003 100.0000 -18,733.860 -19.559.32 18.733.86 -825.46 07/01/2016 DD 07/01/0ISECID: 7/1/2003 31387T3K80CSF07522202:LONG TERM OPER-PIMCO 7/1/2003 PD FNMA POOL#0597376 6.000% 7/1/2003 100.0000 -1,398.860 -1,460.50 1,398.86 -61.64 09/01/2016 DD 08/01/01SECID: 7/1/2003 31387RT96OCSF07522202:LONG TERM 7/1/2003 OPER-PIMCO 19 Workbench ..... ............................................................................................................................................................................................................................................................................................................................... .................. ................. ...... ................................................................................................................................................................................. .............................................._............ Transaction Detail Report M: EWB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLM TM-OCS0000100oo 7/1/2003 - 7/31/2003 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#0605259 6.000% 7/1/2003 100.0000 -1,341.920 -1,401.05 1,341.92 -59.13 09/01/2016 DD 09/01/0ISECID: 7/1/2003 31388HMG 1 OCSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0608366 6.000% 7/1/2003 100.0000 -16.611.110 -17.343.04 16.611.11 -731.93 10/01/2016 DD 09/01/OI SEC ID: 7/1/2003 31388LZ780CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0616734 6.000% 7/1/2003 100.0000 -687.460 -717.75 687.46 -30.29 12/01/2016 DD 12/01/01SECID: 7/1/2003 31388WEF90CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0630812 6.000% 7/1/2003 100.0000 -51.873,480 -54,159.16 51.873.48 -2,285.68 02/01/2017 DD 02/01/02SECID: 7/1/2003 31389NYH2OCSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0632376 6.000% 7/1/2003 100.0000 -59,195.770 -61,804.08 59.195.77 -2,608.31 07/01/2017 DD 07/01/02SECID: 7/1/2003 31389QQ500CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0653116 6.000% 7/1/2003 100.0000 -29.103.840 -30,386.23 29.103.84 -1.282.39 07/01/2017 DD 07/01/02SECID: 7/1/2003 31390QSD80CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0673280 6.000% 7/1/2003 100.0000 -33,278.610 -34.744.95 33.278.61 -1,466.34 08/01/2017 DD 11/01/02SECID: 7/1/2003 31391 P6R20CSF07522202:LONGTERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0698939 6.000% 7/1/2003 100.0000 -546.920 -571.02 546.92 -24.10 09/01/2017 DD 03/01/03SECID: 7/1/2003 31400VPY20CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD FNMA POOL#0703195 6.000% 7/1/2003 100.0000 -30.078.610 -31.403.95 30,078.61 -1.325.34 01/01/2017 DD 04/01/03SECID: 7/1/2003 3140IBGC30CSF07522202: LONGTERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0596612 6.500% 7/1/2003 100.0000 -643.080 -674.93 643.08 -31.85 09/15/2032 DD 09/01/02SEC ID: 7/1/2003 36200BYH40CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO 20 Workbench Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD OCSD•CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status:FINAL Trade Date Tran Settle Date PriOe Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base PD GNMA POOL#0569358 6.500% 7/1/2003 100.0000 -188.490.110 -192.907.85 188.490.11 -4.417.74 04/15/2032 DD 04/01/02SECID: 7/1/2003 36200QQK30CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0569685 6.500% 7/1/2003 100.0000 -8.251.750 -8.660.47 8.251.75 -408.72 02/15/2032 DD 02/01/02SECID: 7/1/2003 3620OQ2S20CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0570019 6.500% 7/1/2003 100.0000 -12,826.920 -13,462.25 12,826.92 -635.33 07/15/2032 DD 07/01/02SECID: 7/1/2003 3620ORG480CSF07522202:LONGTERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0574323 6.500% 7/1/2003 100.0000 -46.344.010 -48,639.49 46.344.01 -2.295.48 12/15/2031 DD 12/01/01 SEC ID: 7/1/2003 36200WAY70CSF07522202:LONG TERM OPER-PIMCO 7/1/2003 PD GNMA POOL 40575364 6.500% 7/1/2003 100.0000 -6,533.710 -6.857.33 6.533.71 -323.62 11/15/2031 DD 11/O1/OISECID: 7/1/2003 3620OXFD60CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0587117 6.5000.0 7/1/2003 100.0000 -2.576.880 -2.704.52 2,576.88 -127.64 06/15/2032 DD 06/01/02SECID: 7/1/2003 36201 MG220CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0587439 6.500% 7/1/2003 100.0000 -7,258.070 -7.617.57 7.258.07 -359.50 11/15/2032 DD 12/01/02SECID: 7/1/2003 36201 MS450CSF07522202:LONG TERM OPER-PIMCO 7/1/2003 PD GNMA POOL#0421389 6.5000,'o 7/1/2003 100.0000 -1.053.590 -1.105.78 1,053.59 -52.19 04/15/2026 DD 04/01/96SECID: 7/1/2003 36206UC230CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0438057 6.000% 7/1/2003 100.0000 -6,663.640 -6,325.25 6,663.64 338.39 05/15/2028 DD 05/01/98SECTD: 7/1/2003 36207FM90CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL 40449851 6.500% 7/1/2003 100.0000 -48.400 -50.80 48.40 -2.40 01/15/2028 DD O1/01/98SECID: 7/1/2003 36208FWLOOCSF07522202:LONG TERM OPER-PIMCO 7/1/2003 21 Workbench .............. .........................._.......-............................................-....-.-........................_..................................._...................................................................................Transaction Detail......... ........................_........................_................................................._............-....._.___..............................................................................................._......... ll Report ID: EWB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 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#0457814 6.000% 7/1/2003 100.0000 -2,504.070 -2.376.91 2,504.07 127.16 10/15/2028 DD 10/01/98SECID: 7/1/2003 36208QSB30CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0465546 6.000% 7/1/2003 100.0000 -17.100.630 -16,232.24 17,100.63 868.39 08/15/2028 DD 08/01/98SECID: 7/1/2003 36209AET30CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0465555 6.000% 7/1/2003 100.0000 -1,110.950 -1,054.53 1,110.95 56.42 09/15/2028 DD 09/01/98SECID: 7/1/2003 36209AE480CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0466845 6.500% 7/1/2003 100.0000 -4.940.600 -5.185.31 4.940.60 -244.71 06/15/2028 DD 06/01/98SECID: 7/1/2003 36209BTA60CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0467279 6.000% 7/1/2003 100.0000 -36.480 -34.63 36.48 1.85 10/15/2028 DD 10/01/98SEC ID: 7/1/2003 36209CCQ70CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0467286 6.0000,b 7/1/2003 100.0000 -661.930 -628.32 661.93 33.61 10/15/2028 DD 10/0 1/98SEC ID: 7/1/2003 36209CCX20CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0468052 6.500% 7/1/2003 100.0000 -1,509.580 -1.584.35 1,509.58 -74.77 07/15/2028 DD 07/01/98SECID: 7/1/2003 36209C5M40CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0468330 6.000% 7/1/2003 100.0000 -1,007.550 -956.39 1,007.55 51.16 05/15/2028 DD 05/01/98SECID: 7/1/2003 36209DHF40CSF07522202: LONG TERM 7/1/2003 OPER-P1MCO PD GNMA POOL#0468339 6.000% 7/1/2003 100.0000 -19,188.460 -18.214.05 19.188.46 974.41 08/15/2028 DD 08/01/98SECID: 7/1/2003 36209DHQOOCSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0469688 6.000% 7/1/2003 100.0000 -1,451.020 -1,377.34 1,451.02 73.68 11/15/2028 DD 11/01/98SECID: 7/1/2003 36209EXR80CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO 22 Wbrkbench' ..................*.................... ...................... .......... .......... ...........I...................... ................. .. ......... ...........................*"''*"*'*'*..............-...................... Transaction Detail Report M: EWB009 Reported by Transaction Category Base Currency: USD 1 OCSDICONSOLMATED-OCSG00010000 7/1/2003 - 7/31/2003 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#0476041 6.500% 7/1/2003 100.0000 -17.942.290 -18,802.96 17,942.29 -860.67 06/15/2028 DD 06/01/98SEC ID: 7/1/2003 36209MZE70CSF07522202: LONG TERM OPER-PIMCO 7/1/2003 PD GNMA POOL#0478626 6.500% 7/1/2003 100.0000 -333.620 -349.62 333.62 -16.00 0 1/15/2029 DD 0 1/0 1/99SEC ID: 7/1/2003 36209QVF90CSF07522202: LONG TERM OPER-PIMCO 7/1/2003 PD GNMA POOL#0480598 6.500% 7/1/2003 100.0000 -34,712.010 -36.377.10 34.712.01 -1,665.09 10/15/2028 DD 10/0 1/98SEC ID: 7/1/2003 36209S3F60CSF07522202: LONG TERM OPER-PIMCO 7/1/2003 PD GNMA POOL#0483452 6.000% 7/1/2003 100.0000 -3.768.450 -3.577.08 3,768.45 191.37 09/15/2028 DD 09/01/98SEC ID: 7/1/2003 36209WBV30CSF07522202:LONG TERM OPER-PIMCO 7/1/2003 PD GNMA POOL#0485527 6.500% 7/1/2003 100.0000 -90,780.260 -95,276.72 90,780.26 -4,496.46 06/15/2031 DD 06/01/01SEC ID: 7/1/2003 36209YLG I OCSF07522202: LONG TERM OPER-PIMCO 7/1/2003 PD GNMA POOL#0485610 6.500% 7/1/2003 100.0000 -66.906.530 -70,220.49 66,906.53 -3,313.96 07/15/2031 DD 07/01/0 1 SEC ID: 7/1/2003 36209YN380CSF07522202:LONG TERM OPER-PIMCO 7/1/2003 PD GNMA POOL#0485682 6.500% 7/1/2003 100.0000 -16.749.440 -17,579.06 16.749.44 -829.62 08/15/2031 DD 08/01/01SEC ID: 7/1/2003 36209YRB60CSF07522202: LONG TERM OPER-PIMCO, 7/1/2003 PD GNMA POOL#0485703 6.500% 7/1/2003 100.0000 -19.196.980 -20,147.83 19.196.98 -950,85 08/15/2031 DD 08/01/0 1 SEC ID: 7/1/2003 36209YRY60CSF07522202: LONGTERM OPER-PIMCO 7/1/2003 PD GNMA POOL#0486720 6.000% 7/1/2003 100.0000 -565.370 -536.66 565.37 28.71 12/15/2028 DD 12/01/98SEC ID: 7/1/2003 362 1 OAVM60CSF07522202: LONG TERM OPER-PIMCO 7/1/2003 PD GNMA POOL#0491103 6.000% 7/1/2003 100.0000 -9,681.240 -9,189.62 9,681.24 491.62 0 1/15/2029 DD 0 1/0 1/99SEC ID: 7/1/2003 3621 OFRY40CSF07522202: LONGTERM OPER-PIMCO 7/1/2003 23 Workbench _.._.._....._._...................._._._...._.. ................_........ _._..... .. _.._................_......_..............._------------ .. ......._._............._........_................._..........................._._........-.-------............_................._............_...................._...._..................__._...................__.................._.._._.........._.....__..__........._.............._........_....__............_._._..Transaction Detail Report m: WBOO9 Reported by Transaction Category Base Currency: uSD OCSD-CONSOLWATED-OCSG00010000 7/1/2003 - 7/31/2003 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#0496461 6.0006 7/1/2003 100.0000 -67,530.320 -64,101.04 67.530.32 3,429.28 01/15/2029 DD 0 1/0 1/99SEC ID: 7/1/2003 3621 OMQN40CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0497343 6.000% 7/1/2003 100.0000 -3.016.380 -2.863.20 3.016.38 153.18 12/15/2028 DD 12/01/98SECID: 7/1/2003 3621 ONP450CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0499153 6.000% 7/1/2003 100.0000 -824.090 -782.24 824.09 41.85 02/15/2029 DD 02/01/99SECID: 7/1/2003 362 1 OQQE50CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0500917 6.000% 7/1/2003 100.0000 -2.271.790 -2,156.43 2.271.79 115.36 04/15/2029 DD 04/01/99SECID: 7/1/2003 36210SPAOOCSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0503388 6.000% 7/1/2003 100.0000 -11.727.170 -11,131.65 11,727.17 595.52 03/15/2029 DD 03/01/99SECID: 7/1/2003 36210VF550CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0506636 6.000% 7/1/2003 100.0000 -2,903.760 -2,756.30 2,903.76 147.46 04/15/2029 DD 04/01/99SECID: 7/1/2003 36210YY900CSF07522202:LONGTERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0512235 6.500% 7/1/2003 100.0000 -3.576.380 -3.753.52 3,576.38 -177.14 11/15/2029 DD 11/01/99SECID: 7/1/2003 36211GBC60CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0514326 6.500% 7/1/2003 100.0000 -496.900 -520.74 496.90 -23.84 07/15/2029 DD 07/01/99SECID: 7/1/2003 36211JLF20CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0530053 6.500% 7/1/2003 100.0000 -10.950.900 -11.493.31 10.950.90 -542.41 04/15/2031 DD 04/01/OI SEC ID: 7/1/2003 36212CZS30CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0530290 6.500% 7/1/2003 100.0000 -73.860 -77.40 73.86 -3.54 03/15/2031 DD 04/01/01SECID: 7/1/2003 36212DC31 OCSF07522202:LONG TERM 7/1/2003 OPER-PIMCO 24 WbrkbencW i......................................................_........................__......_......._........__..__.......... _._._._.._...__. Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD 3 OCSD-CONSOLIDA7ED-OCSGO0010000 7/1/2003 - 7/31/2003 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#0537885 6.500% 7/1/2003 100.0000 -218.480 -229.30 218.48 -10.82 02/15/2031 DD 02/01/0ISECID: 7/1/2003 36212MREI OCSF07522202:LONGTERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0547512 6.500% 7/1/2003 100.0000 -2.860.220 -3.001.89 2,860.22 -141.67 04/15/2031 DD 04/01/01SECID: 7/1/2003 36212YGV90CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0547715 6.50000 7/1/2003 100.0000 -319.910 -335.26 319.91 -15.35 02/15/2031 DD 02/01/01SECID: 7/1/2003 36212YN820CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0552322 6.500% 7/1/2003 100.0000 -11.088.140 -11.637.35 11.088.14 -549.21 01/15/2032 DD 01/01/02SECID: 7/1/2003 36213ESK30CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0552466 6.500% 7/1/2003 100.0000 -60,569.510 -63.569.59 60,569.51 -3,000.08 03/15/2032 DD 03/01/02SECID: 7/1/2003 36213EW360CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0552659 6.500% 7/1/2003 100.0000 -72.412.590 -75,999.28 72,412.59 -3,586.69 07/15/2032 DD 07/01/02SECID: 7/1/2003 36213E5U60CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA POOL#0561017 6.500% 7/1/2003 100.0000 -52.631.630 -55,238.54 52,631.63 -2,606.91 07/15/2031 DD 07/01/01SECID: 7/1/2003 36213QG290CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA II POOL#0080023 VAR RT 12/20/20267/1/2003 100.0000 -10,482.200 -10.655.81 10,482.20 -173.61 DD 12/01/96SECID: 7/1/2003 36225CAZ90CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO PD GNMA II POOL#080088M 7.375% 7/1/2003 100.0000 -17.607.370 -17,992.53 17.607.37 -385.16 06/20/2027 DD 06/01/97SECID: 7/1/2003 36225CC200CSF07522202:LONGTERM 7/1/2003 OPER-PIMCO PD GNMA II POOL#0080395 VAR RT 7/1/2003 100.0000 -16,212.500 -16,065.57 16.212.50 146.93 04/20/2030 DD 04/01/OOSEC ID: 7/1/2003 36225CNM40CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO 25 Workbench .......... ............................................. ................. _.................................................. ..... ........................ .................................. ....................................... _............................._........,................._.__....................._......._..................................................................................._...................... .._................ ................, Transaction Detail Report ID: EWB009 j Reported b Transaction Cate o � P y g � Base Currency: USD 3 f OCSD CONSOLIDATED-OCSGO0010000 7/1/2003 - 7/31/2003 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 II POOL#080408X 6.500% 7/1/2003 100.0000 -175,715.790 -173,931.18 175,715.79 1,784.61 05/20/2030 DD 05/01/OOSECID: 7/1/2003 36225CN280CSF07522202: LONG TERM 7/1/2003 OPER-PIMCO PD GNMA GTD REMIC TR 2000-9 FH VAR RT 7/16/2003 100.0000 -36.555.260 -36.555.26 36.555.26 0.00 02/16/2030SECID: 7/16/2003 3837H4NX90CSF07522202: LONG TERM 7/16/2003 OPER-PIMCO TOTAL FIXED INCOME SECURITIES U.S. DOLLAR: -2,393,212.080 -2,458.305.38 2,393,212.08 -65,093.30 TOTAL FIXED INCOME SECURITIES BASE: -2,393,212.080 -2,458,305.38 2,393,212.08 -65,093.30 TOTAL PRINCIPAL PAYMENTS BASE: -2,393,212.080 -2,458,305.38 2,393.212.08 -65,093.30 MATURITIES CASH&CASH EQUIVALENTS U.S. DOLLAR MT FEDERAL HOME LN BK CONS DISC MAT 7/11/2003 100.0000 -1,600,000.000 -1,595.360.00 1,595,360.00 0.00 07/11/2003SECID: 7/11/2003 313384HZ50CSF07522202: LONG TERM 7/11/2003 OPER-PIMCO MT FEDERAL HOME LN BK CONS DISC MAT 7/16/2003 100.0000 -24,600.000.000 -24.533,932.64 24,533,932.64 0.00 07/16/2003SECID: 7/16/2003 313384JEOOCSF07522202: LONG TERM 7/16/2003 OPER-PIMCO MT FEDERAL HOME LN BK CONS DISC N MAT 7/23/2003 100.0000 -200,000.000 -199.597.50 199,597.50 0.00 07/23/2003SECID: 7/23/2003 313384JM20CSF07511102: LIQUID OPER- 7/23/2003 PIMCO MT FEDERAL HOME LN BK CONS DISC N MAT 7/25/2003 100.0000 -3,800.000.000 -3.797,440.27 3,797,440.27 0.00 07/25/2003SEC ID: 7/25/2003 3133WP50CSF07522202:LONG TERM 7/25/2003 OPER-PIMCO MT FEDERAL HOME LN BK CONS DISC N MAT 7/29/2003 100.0000 -600,000.000 -598.689.00 598,689.00 0.00 07/29/2003SECID: 7/29/2003 313384JT70CSF0751 1102:LIQUID OPER- 7/29/2003 PIMCO 26 Workbench' ..........................._....................................................................._..................................................._........................................_................................................................................................................. .. . .. Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCS000010000 7/1/2003 - 2003 31? ! / / Status:FINAL €.................................. ...................................... u— -- ^ 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 7/30/2003 100.0000 -1.500,000.000 -1,498.870.67 1.498.870.67 0.00 07/30/2003SECID: 7/30/2003 313384JU40CSF07511102:LIQUID OPER- 7/30/2003 PIMCO MT FEDERAL HOME LN MTG CORP DISC MAT 7/15/2003 100.0000 -24,600.000.000 -24.518.273.34 24,518,273.34 0.00 07/15/2003SECID: 7/15/2003 313396JD60CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO MT FEDERAL NATL MTG ASSN DISC NTS MAT 7/2/2003 100.0000 -800,000.000 -795,156.00 795,156.00 0.00 07/02/2003SECID: 7/2/2003 313588HQIOCSF07511102: LIQUID OPER- PIMCO 7/2/2003 MT FEDERAL NATL MTG ASSN DISCOUNT MAT 7/30/2003 100.0000 -1,800.000.000 -1,794,780.00 1,794,780.00 0.00 07/30/2003SEC ID: 7/30/2003 313588JUOOCSF07511102:LIQUID OPER- 7/30/2003 PIMCO MT FEDERAL NATL MTG ASSN DISCOUNT MAT 7/31/2003 100.0000 -3.000.000.000 -2,993,653.33 2,993,653.33 0.00 07/31/2003SECID: 7/31/2003 313588JV80CSF07511102: LIQUID OPER- PIMCO 7/31/2003 MT GENERAL ELEC CAP DISC 07/23/2003SEC 7/23/2003 100.0000 -400,000.000 -399.588.00 399.588.00 0.00 ID:36959JUP60CSF07511102: LIQUID 7/23/2003 OPER-PIMCO 7/23/2003 MT GENERAL ELEC CAP DISC 07/09/2003SEC 7/9/2003 100.0000 -600,000.000 -599,308.67 599,308.67 0.00 ID: 36959JU920CSF07511102:LIQUID 7/9/2003 OPER-PIMCO 7/9/2003 TOTAL CASH&CASH EQUIVALENTS U.S. DOLLAR: -63,500,000.000 -63,324.649.42 63,324,649.42 0.00 TOTAL CASH&CASH EQUIVALENTS BASE: -63,500,000.000 -63,324.649.42 63,324,649.42 0.00 FIXED INCOME SECURITIES U.S.DOLLAR MT FEDERAL HOME LN BK CONS BDS 4.500% 7/7/2003 100.0000 -2,000,000.000 -2,039,880.00 2,000,000.00 -39.880.00 07/07/2003 DD 07/06/0ISECID: 7/7j2003 3133MG5J10CSF07511102: LIQUID OPER- PIMCO 7/7/2003 27 Workbench _..........._........__................._.__.. .. ..... ..__........... _.._....._...__............._ ............_...__._.......---------......._.._- .........--..._...___. --- ----- Transaction Detail Report ID: LWB009 Re orted b Transaction Category f P y Base Currency: usD OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status:FINAL s .......................... _............._....._...._..............---.._...._...._.._........._..._....__ _..................__.-......................._._............._......................- 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 BKS CONS BD 6.00010 7/14/2003 100.0000 -15,000.000 -15,470.85 15,000.00 -470.85 07/14/2003 DD 07/14/98SECID: 7/14/2003 3133M4VC40CSF07511102: LIQUID OPER- 7/14/2003 PIMCO TOTAL FIXED INCOME SECURITIES U.S. DOLLAR: -2,015.000.000 -2.055,350.85 2,015,000.00 -40,350.85 TOTAL FIXED INCOME SECURITIES BASE: -2,015,000.000 -2,055,350.85 2,015.000.00 -40,350.85 TOTAL MATURITIES BASE: -65,515.000.000 -65,380,000.27 65.339.649.42 -40,350.85 CORPORATE ACTIONS FIXED INCOME SECURITIES U.S. DOLLAR SW TRAN TO U00907AAO AIG SUNAMERICA GLO 7/3/2003 -752.000.000 -826,199.84 0.00 -826.199.84 BDS USDSEC ID: NA27894540CSF07522202: 7/7/2003 LONG TERM OPER-PIMCO 7/3/2003 SD RECEIVED FROM NA2789454 AIG 7/3/2003 752.000.000 826,199.84 0.00 826.199.84 SUNAMERICA GLOBAL REG SSEC ID: 7/7/2003 000907AAOOCSF07522202:LONG TERM 7/3/2003 OPER-PIMCO CAL DISTRIBUTIONFINL99-1CLA4 5.840% 7/16/2003 100.0000 -35.770.020 -36,518.96 35.770.01 -748.95 10/17/2011 DD 03/18/99SECID: 7/16/2003 25475MAD60CSF07522202: LONG TERM 7/16/2003 OPER-PIMCO TOTAL FIXED INCOME SECURITIES U.S.DOLLAR: -35,770.020 -36,518.96 35,770.01 -748.95 TOTAL FIXED INCOME SECURITIES BASE: -35,770.020 -36,518.96 35,770.01 -748.95 TOTAL CORPORATE ACTIONS BASE: -35,770.020 -36,518.96 35,770.01 -748.95 MISCELLANEOUS ACTIVITY FIXED INCOME SECURITIES U.S.DOLLAR 28 Wbrkbencfi .._._.............__._._...._...._...__._........_......_......._.............._..............._.........._..._._._._._-......._....._.....................__.. Transaction Detail Report ID: EWB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status: FINAL Trade Date Trap Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base SW TO BRING ACCOUNT INTO BALANCE US 7/30/2003 -26.880.000 -23.685.65 0.00 -23,685.65 TREASURY INFLATION INDEX NTSEC ID: 7/31/2003 9128272M30CSF07522202: LONG TERM OPER-PIMCO 7/30/2003 SW TO BRING ACCOUNT INTO BALANCE US 7/30/2003 -390.000 -433.78 0.00 -433.78 TREASURY INFLATION INDEX NTSEC ID: 7/31/2003 9128274Y50CSF07522202: LONG TERM OPER-PIMCO 7/30/2003 TOTAL FIXED INCOME SECURITIES U.S.DOLLAR: -27.270.000 -24.119.43 0.00 -24,119.43 TOTAL FIXED INCOME SECURITIES BASE: _27,270.000 -24,119.43 0.00 -24,119.43 TOTAL MISCELLANEOUS ACTIVITY BASE: -27,270.000 -24.119.43 0.00 -24,119.43 INTEREST CASH&CASH EQUIVALENTS U.S.DOLLAR IT FEDERAL HOME LN BK CONS DISC MAT 7/11/2003 1.600.000.000 4,640.00 4,640.00 0.00 07/11/2003SECID: 7/11/2003 313384HZ50CSF07522202:LONG TERM 7/11/2003 OPER-PIMCO IT FEDERAL HOME LN BK CONS DISC MAT 7/16/2003 24,600,000.000 66.067.36 66.067.36 0.00 07/16/2003SECID: 7/16/2003 313384JEOOCSF07522202: LONGTERM 7/16/2003 OPER-PIMCO IT FEDERAL HOME LN BK CONS DISC N MAT 7/23/2003 200.000.000 402.50 402.50 0.00 07/23/2003SECID: 7/23/2003 313384JM20CSF07511102: LIQUID OPER- PIMCO 7/23/2003 IT FEDERAL HOME LN BK CONS DISC N MAT 7/25/2003 3,800,000.000 2,559.73 2,559.73 0.00 07/25/2003SECID: 7/25/2003 313384JP50CSF07522202: LONG TERM 7/25/2003 OPER-PIMCO IT FEDERAL HOME LN BK CONS DISC N MAT 7/29/2003 600,000.000 1,311.00 1,311.00 0.00 07/29/2003SECID: 7/29/2003 313384JT70CSF0751 1102:LIQUID OPER- PIMCO 7/29/2003 29 Workbench _.__......__........---...._..._ _ ._._._....._...._...._.........__...............—- ....... _ ._..........._.__..._..._.................._.-......................._...._.._..._..........__.................._ ._.......... _.....................................-..-_....._.._...................-----------------_....__._......._.... -- _...._.__.... _... _ Transaction Detail Report m: Lws009 Reported by Transaction Category Base Currency: USD i OCSD.CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 status:FINAL Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss 1Ype Description Reported Date Base Shares/Par Base Base Base IT FEDERAL HOME LN BK CONS DISC N MAT 7/30/2003 1.500.000.000 1.129.33 1,129.33 0.00 07/30/2003SECID: 7/30/2003 313384JU40CSF07511102: LIQUID OPER- 7/30/2003 PIMCO IT FEDERAL HOME LN MTG CORP DISC MAT 7/15/2003 24,600,000.000 81.726.66 81,726.66 0.00 07/15/2003SECID: 7/15/2003 313396JD60CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT FEDERAL NATL MTG ASSN DISC NTS MAT 7/2/2003 800,000.000 4.844.00 4,844.00 0.00 07/02/2003SECID: 7/2/2003 313588HQIOCSF07511102:LIQUID OPER- 7/2/2003 PIMCO IT FEDERAL NATL MTG ASSN DISCOUNT MAT 7/30/2003 1,800,000.000 5.220.00 5.220.00 0.00 07/30/2003SECID: 7/30/2003 313588JUOOCSF07511102:LIQUID OPER- 7/30/2003 PIMCO IT FEDERAL NATL MTG ASSN DISCOUNT MAT 7/31/2003 3,000,000.000 6.346.67 6.346.67 0.00 07/31/2003SECID: 7/31/2003 313588JV80CSF07511102:LIQUID OPER- 7/31/2003 PIMCO IT GENERAL ELEC CAP DISC 07/23/2003SEC 7/23/2003 400.000.000 412.00 412.00 0.00 ID:36959JUP60CSF07511102:LIQUID 7/23/2003 OPER-PIMCO 7/23/2003 IT GENERAL ELEC CAP DISC 07/09/2003SEC 7/9/2003 600,000.000 691.33 691.33 0.00 ID:36959JU920CSF07511102:LIQUID 7/9/2003 OPER-PIMCO 7/9/2003 CW SHORT TERM FDS INT ADJ NET OF 7/31/2003 0.000 -24.05 -24.05 0.00 OVERNIGHT INTERESTSEC ID: 7/31/2003 990000PJ40CSF07522202:LONG TERM 7/31/2003 OPER-PIMCO CW SHORT TERM FDS INT ADJ NET OF 7/31/2003 0.000 -49.77 -49.77 0.00 OVERNIGHT INTERESTSEC ID: 7/31/2003 990000PJ40CSF07511102:LIQUID OPER- 7/31/2003 PIMCO IT DREYFUS TREASURY CASH MGMTSEC ID: 7/1/2003 0.000 1.124.63 1,124.63 0.00 9960852470CSF07522202:LONG TERM 7/1/2003 OPER-PIMCO 7/1/2003 30 %brkbenolr Transaction Detail Report ID: EWBooa Reported by Transaction Category Base Currency: USD OCSD-00NS0LIDATED-OCSG00010000 7/1/2003 - 7/31/2003 status: FINAL ............ . ......... .. ...-.... ............... .......................... . .......................................................................................... ........................................................................................................._................................................................. . Trade Date HTy;e Settle Date Price Cost Amount Net Gain/Loss Description Reported Date Base Shares/Par Base Base Base IT DREYFUS TREASURY CASH MGMTSEC ID: 7/1/2003 0.000 1.295.01 1,295.01 0.00 9960852470CSF07511102:LIQUID OPER- 7/1/2003 PIMCO 7/1/2003 TOTAL CASH&CASH EQUIVALENTS U.S. DOLLAR: 63,500,000.000 177,696.40 177,696.40 0.00 TOTAL CASH&CASH EQUIVALENTS BASE: 63,500,000.000 177,696.40 177,696.40 0.00 FIRED INCOME SECURITIES U.S. DOLLAR IT DISTRIBUTION FINL99-1 CLA4 7/21/2003 0.000 174.08 174.08 0.00 REDEEMEDSEC ID: 7/15/2003 25475MAD60CSF07522202: LONG TERM 7/21/2003 OPER-PIMCO IT WMP/HUNTOON PAIGE#000-11150 7.500% 7/1/2003 738.040 5,944.97 5.944.97 0.00 12/01/2030 DD 10/21/99SEC ID: 6/1/2003 302998GE30CSF07522202: LONG TERM OPER-PIMCO 7/1/2003 IT WMP/HUNTOON PAIGE#000-11150 7.500% 7/29/2003 743.190 5,940.36 5,940.36 0.00 12/01/2030 DD 10/21/99SECID: 7/1/2003 302998GE30CSF07522202:LONG TERM 7/29/2003 OPER-PIMCO IT FHLMC GROUP#G4-0353 7.500% 7/15/2003 446.870 917.72 917.72 0.00 10/01/2004 DD 03/01/99SECID: 7/1/2003 3128DBMA20CSF07522202: LONGTERM 7/15/2003 OPER-PIMCO IT FEDERAL HOME LN BK CONS BDS 4.500% 7/7/2003 2,000,000.000 45,000.00 45,000.00 0.00 07/07/2003 DD 07/06/0 1 SEC ID: 7/7/2003 3133MG5J IOCSF0751 1102: LIQUID OPER- PIMCO 7/7/2003 IT FEDERAL HOME LN BKS CONS BD 6.000% 7/14/2003 15.000.000 450.00 450.00 0.00 07/14/2003 DD 07/14/98SECID: 7/14/2003 3133M4VC40CSF07511 102: LIQUID OPER- PIMCO 7/14/2003 IT FHLMC MULTICLASS MTG SER E3 A VAR RT 7/23/2003 36.934.300 4.649.03 4.649.03 0.00 08/15/2032 DD 12/01/97SECID: 6/1/2003 3133TCE950CSF07522202: LONG TERM 7/23/2003 OPER-PIMCO 31 Workbench ---------- ... ..... ....__........._......_..._..................._..-_.._..........._......_...__._......_............... _-- .. .__.........._.......-..__.....__.... _........_..._......................_...._..__. .. _._........_......._.... ........ -...... __._....................._______._..._...._.............._._.... ... . ........_. _._....'_--'...... E Transaction Detail Report ID: EWB009 1 Reported by Transaction Category Base Currency: USD j s OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 status:FINAL .........................................................................................-_.................................................................................................._...................................._.....................................................---------------........................................................................._._.........................................................................................................................-.-----._.; Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT FHLMC MULTICLASS CTF TI 1 A6 6.500% 7/25/2003 238.604.720 3.496.54 3,496.54 0.00 09/25/2018SECID: 7/1/2003 3133TDPV20CSF07522202: LONG TERM 7/25/2003 OPER-PIMCO IT FHLMC MULTICLASS CTF SER 162OZ 6.000% 7/21/2003 14.640.330 14,640.33 14.640.33 0.00 11/15/2023 DD 11/01/93SECID: 7/1/2003 3133T17A40CSF07522202: LONGTERM 7/21/2003 OPER-PIMCO IT FEDERAL FARM CR BKS CONS SYSTE 6.40% 7/23/2003 1.350.000.000 36.450.00 36,450.00 0.00 01/23/2004 DD O1/01/1999SECID: 7/23/2003 3133 1 H6G70CSF07511102:LIQUID OPER- 7/23/2003 PIMCO IT FHLMC GROUP#78-6064 6.384% 7/15/2003 5.445.500 314.09 314.09 0.00 01/01/2028 DD 12/01/97SECID: 6/1/2003 31348SWZ30CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT FNMA POOL#0323980 6.000% 7/25/2003 21,932.650 1,570.70 1.570.70 0.00 04/01/2014 DD 09/01/99SECID: 7/1/2003 31374T2MOOCSF07522202:LONG TERM 7/25/2003 OPER-PIMCO PC FNMA POOL#0456482 6.000% 7/25/2003 10.800.300 581.10 581.10 0.00 02/01/2014 DD 02/01/99SECID: 7/1/2003 3138ICCT20CSF07522202:LONGTERM 7/25/2003 OPER-PIMCO IT FNMA POOL#0509649 6.000% 7/25/2003 2,010.640 1,604.71 1.604.71 0.00 09/01/2014 DD 09/01/99SECID: 7/1/2003 31383QEWOOCSF07522202:LONG TERM 7/25/2003 OPER-PIMCO IT FNMA POOL#0535451 6.0004/6 7/25/2003 18.957.610 1,265.83 1,265.83 0.00 06/01/2015 DD 07/01/OOSECID: 7/1/2003 31384VZQ80CSF07522202:LONG TERM 7/25/2003 OPER-PIMCO IT FNMA POOL#0535672 6.000"r6 7/25/2003 412.909.120 28,000.45 28,000.45 0.00 01/01/2016 DD 12/01/OOSEC ID: 7/1/2003 31384WCH10CSF07522202: LONGTERM 7/25/2003 OPER-PIMCO IT FNMA POOL#0545296 6.000% 7/25/2003 170,610.510 9,830.41 9,830.41 0.00 11/01/2016 DD 10/01/01SECID: 7/1/2003 31385HXZOOCSF07522202:LONG TERM 7/25/2003 OPER-PIMCO 32 Workbench" Transaction Detail Report ID: EVVB009 . ......... ............ .......... ......... .... ........................ ... .......................................*...................*"**'*.................. ................................*....................... ..........*.......... Reported by Transaction Category Base Currency: USD OCSD-CONSOLMATED-OCSG00010000 7/1/2003 - 7/31/2003 Status: FINAL .................................................... ...........I...........................................................................................................................................................................................................................--............................................................................................................... ................................................................. .............-,..........................--......................................................... Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT FNMA POOL#0545580 6.0000,6 7/25/2003 14,402.860 810.98 810.98 0.00 03/01/2017 DD 03/01/02SEC ID: 7/1/2003 31385,JCR70CSF07522202: LONG TERM OPER-PIMCO 7/25/2003 IT FNMA POOL#0555101 6.000% 7/25/2003 19.798.940 1.345.00 1,345.00 0.00 10/0 1/2017 DD I 1/01/02SEC ID: 7/1/2003 31385WU230CSF07522202: LONG TERM OPER-PIMCO 7/25/2003 IT FNMA POOL#0576386 6.0000,16 7/25/2003 2,927.760 501.08 501.08 0.00 05/01/2016 DD 05/01/01SEC ID: 7/1/2003 31386XJ720CSF07522202: LONG TERM OPER-PIMCO 7/25/2003 IT FNMA POOL#0576739 6.000% 7/25/2003 24.161.970 1,484.22 1,484.22 0.00 04/01/2016 DD 04/01/01SEC ID: 7/1/2003 31386XV860CSF07522202: LONG TERM OPER-PIMCO 7/25/2003 IT FNMA POOL#0580888 6.000% 7/25/2003 20,688.290 1,642.17 1,642.17 0.00 05/01/2016 DID 05/01/01SEC ID: 7/1/2003 31387DJ9 I OCSF07522202: LONG TERM OPER-PIMCO 7/25/2003 IT FNMA POOL#0594002 6.000% 7/25/2003 18.733.860 1,248.57 1.248.57 0.00 07/01/2016 DD 07/01/0 1 SEC ID: 7/1/2003 31387r3K80CSF07522202: LONG TERM OPER-PIMCO 7/25/2003 IT FNMA POOL#0597376 6.000% 7/25/2003 1,398.860 1,456.29 1,456.29 0.00 09/01/2016 DD 08/01/01SEC ID: 7/1/2003 31387XT960CSF07522202:LONG TERM OPER-PIMCO 7/25/2003 IT FNMA POOL#0605259 6.000% 7/25/2003 1,341.920 1,422.97 1,422.97 0.00 09/01/2016 DID 09/01/0 1 SEC ID: 7/1/2003 31388HMG I OCSF07522202: LONG TERM OPER-PIMCO 7/25/2003 IT FNMA POOL#0608366 6.000% 7/25/2003 16.611.110 954.78 954.78 0.00 10/01/2016 DD 09/01/01SEC ID: 7/1/2003 31388LZ780CSF07522202: LONG TERM OPER-PIMCO 7/25/2003 IT FNMA POOL#0616734 6.000% 7/25/2003 687.460 873.79 873.79 0.00 12/01/2016 DD 12/01/01SEC ID: 7/1/2003 31388WEF90CSF07522202: LONG TERM OPER-PIMCO 7/25/2003 33 Workbench ........... ........... ......................... ......._.....-........... ................................ ............. ...... ..............................................................._........................................ ..........._._._._..........._..... .._._..._......................................... ...................._............ .... .......... ........ ................... ._...................... ... _._................. ........................ ............. .......... . Transaction Detail Report ID: EWBOO9 Reported by Transaction Category Base Currency: USD E OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 status: >r DFAI. i.. _ ..... __...__ . .. ........._ ...........................-... ......................................................,........................................................................ Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT FNMA POOL#0630812 6.000% 7/25/2003 51,873.480 1,726.71 1,726.71 0.00 02/01/2017 DD 02/01/02SECID: 7/1/2003 31389NYH2OCSF07522202: LONG TERM 7/25/2003 OPER-PIMCO IT FNMA POOL#0632376 6.000% 7/25/2003 59.195.770 6,046.77 6.046.77 0.00 07/01/2017 DD 07/01/02SECID: 7/1/2003 31389QQ500CSF07522202:LONG TERM 7/25/2003 OPER-PIMCO IT FNMA POOL#0653116 6.00000 7/25/2003 29.103.840 3,568.76 3.568.76 0.00 07/01/2017 DD 07/01/02SECID: 7/1/2003 31390QSD80CSF07522202: LONG TERM 7/25/2003 OPER-PIMCO IT FNMA POOL#0673280 6.000% 7/25/2003 33.278.610 1.554.80 1,554.80 0.00 08/01/2017 DD 11/01/02SECID: 7/1/2003 3139 1 P6R20CSF07522202: LONG TERM 7/25/2003 OPER-PIMCO IT FNMA POOL#0698939 6.000% 7/25/2003 546.920 699.60 699.60 0.00 09/01/2017 DD 03/01/03SECID: 7/1/2003 31400VPY20CSF07522202: LONG TERM 7/25/2003 OPER-PIMCO IT FNMA POOL#0703195 6.000% 7/25/2003 30,078.610 625.57 625.57 0.00 01/01/2017 DD 04/01/03SECID* 7/1/2003 31401BGC30CSF07522202:LONG TERM 7/25/2003 OPER-PIMCO IT FORD MTR CR CO GLOBAL LANDMARK 7/16/2003 3,000,000.000 100.500.00 100,500.00 0.00 6.700%07/16/2004 DD 07/16/99SEC ID: 7/16/2003 345397SJ30CSF07522202:LONGTERM 7/16/2003 OPER-PIMCO IT GNMA POOL#0596612 6.5000/0 7/15/2003 643.080 3,484.10 3.484.10 0.00 09/15/2032 DD 09/01/02SECID: 7/1/2003 36200BYH40CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0569358 6.500% 7/15/2003 188.490.110 10.997.50 10,997.50 0.00 04/15/2032 DD 04/01/02SECID: 7/1/2003 362000QK30CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0569685 6.500% 7/15/2003 8,251.750 479.14 479.14 0.00 02/15/2032 DD 02/01/02SECID: 7/1/2003 3620OQ2S20CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO 34 Wbrkbendr' Transaction Detail Report ID: EWBOO9 Reported by Transaction Category Base Currency: USD j OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status: FINAL Trade Date Trap Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT GNMA POOL 40570019 6.500% 7/29/2003 12,826.920 815.39 815.39 0.00 07/15/2032 DD 07/01/02SECID: 7/1/2003 3620ORG480CSF07522202: LONG TERM OPER-PIMCO 7/29/2003 IT GNMA POOL#0574323 6.500% 7/15/2003 46,344.010 5,008.32 5,008.32 0.00 12/15/2031 DD 12/01/01SECID: 7/1/2003 36200WAY70CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0575364 6.500% 7/15/2003 6,533.710 547.64 547.64 0.00 11/15/2031 DD 11/01/01SEC ID: 7/1/2003 3620OXFD60CSF07522202: LONG TERM 7/15/2Q03 OPER-PIMCO IT GNMA POOL 40587117 6.500% 7/15/2003 2.576.880 190.33 190.33 0.00 06/15/2032 DD 06/01/02SECID: 7/1/2003 3620 1 MG220CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0587439 6.500% 7/15/2003 7,258.070 617.94 617.94 0.00 11/15/2032 DD 12/01/02SEC ID: 7/1/2003 36201MS450CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0421389 6.500% 7/15/2003 1.053.590 122.45 122.45 0.00 04/15/2026 DD 04/01/96SECID: 7/1/2003 36206UC230CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 IT GNMA POOL#0438057 6.000% 7/15/2003 6,663.640 181.25 181.25 0.00 05/15/2028 DD 05/01/98SECID: 7/1/2003 36207PTN90CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0449851 6.500910 7/15/2003 48.400 174.84 174.84 0.00 01/15/2028 DD 01/01/98SECID: 7/1/2003 36208FWLOOCSF07522202: LONG TERM OPER-PIMCO 7/15/2003 IT GNMA POOL#0457814 6.000% 7/15/2003 2.504.070 269.48 269.48 0.00 10/15/2028 DD 10/01/98SEC ID: 7/1/2003 36208QSB30CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0465546 6.000% 7/15/2003 17,100.630 3,357.04 3,357.04 0.00 08/15/2028 DD 08/01/98SECID: 7/1/2003 36209AET30CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO 35 Workbench Report M: LVB009 Transaction* D'etall' Reported by Transaction Category Base Currency: USD Uc,;bu-00Ns0LMATED-OCSG00010000 7/1/2003 - 7/31/2003 Status:FINAL ....... ........----------- .................................. ......................................................................................................................................................................................................................................................I........................................................................................ ................................................_.........I.............. ...................................................................... Trade Date [Tran Settle Date Price Cost Amount Net Gain/Loss e Description Reported Date Base Shares/Par Base Base Base .......... —------- IT GNMA POOL#0465555 6.0009/b 7/15/2003 1,110.950 3,481.13 3,481.13 0.00 09/15/2028 DD 09/01/98SEC ID: 7/1/2003 36209AE480CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0466845 6.500% 7/15/2003 4.940.600 542.41 542.41 0.00 06/15/2028 DD 06/01/98SEC ID: 7/1/2003 36209BTA60CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0467279 6.000% 7/15/2003 36.480 126.31 126.31 0.00 10/15/2028 DD 10/01/98SEC ID: 7/1/2003 36209CCQ70CSF07522202: LONGTERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0467286 6.000% 7/15/2003 661.930 2.484.82 2.484.82 0.00 10/15/2028 DD 10/01/98SEC ID: 7/1/2003 36209CCX20CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0468052 6.500% 7/15/2003 1,509.580 3,693.78 3.693.78 0.00 07/15/2028 DD 07/01/98SEC ID: 7/1/2003 36209C5M40CSF07522202: LONGTERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0468330 6.000% 7/15/2003 1,007.550 147.48 147.48 0.00 05/15/2028 DD 05/01/98SEC ID: 7/1/2003 36209DHF40CSF07522202: LONGTERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0468339 6.000% 7/15/2003 19,188.460 2,413.66 2,413.66 0.00 08/15/2028 DD 08/01/98SEC ID: 7/1/2003 36209DHQOOCSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0469688 6.000% 7/15/2003 1,451.020 116.92 116.92 0.00 I I/15/2028 DD I 1/0 1/98SEC ID: 7/1/2003 36209EXR80CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0476041 6.500% 7/15/2003 17.942.290 1,624.55 1,624.55 0.00 06/15/2028 DD 06/01/98SEC ID: 7/1/2003 36209MZE70CSF07522202-.LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0478626 6.50040 7/15/2003 333.620 1.369.84 1.369.84 0.00 0 1/15/2029 DID 0 1/0 1/99SEC ID: 7/1/2003 36209QVr9OCSF07522202:LONGTERM 7/15/2003 OPER-PIMCO 36 WorkbencW' .............................................................................................................................................................................I..........................I...........I.................................. - ----...........I............................ ........................................................I........................................................................................................................................................................---........................r7......................... Transaction Detail Report M: EWB009 Reported by Transaction Category Base Currency: USD OCSD-CONSOLIDATED-OCSC100010000 7/1/2003 - 7/31/2003 Status: FINAL ................ .......................-......................... ........................ ..........I..........................I..................... ..........................- ...................... ................ ......................................................................... ........................- ...................................................I.............................................. Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT GNMA POOL#0480598 6.500% 7/15/2003 34,712.010 1,756.30 1,756.30 0.00 10/15/2028 DD 10/0 1/98SEC ID: 7/1/2003 36209S3F60CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 IT GNMA POOL#0483452 6.000% 7/15/2003 3,768.450 113.07 113.07 0.00 09/15/2028 DD 09/01/98SEC ID: 7/1/2003 36209V,IBV30CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0485527 6.500/o 7/15/2003 90,780.260 4.419.84 4,419.84 0.00 06/15/2031 DD 06/01/01SEC ID: 7/1/2003 36209YLG IOCSF07522202:LONGTERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0485610 6.500% 7/15/2003 66.906.530 5.106.14 5.106.14 0.00 07/15/2031 DD 07/01/01SEC ID: 7/1/2003 36209YN380CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO 1T GNMA POOL#0485682 6.500% 7/15/2003 16,749.440 990.78 990.78 0.00 08/15/2031 DD 08/01/01SEC ID: 7/1/2003 36209YRB60CSF07522202:LONG TERM OPER-PIMCO 7/15/2003 IT GNMA POOL#0485703 6.500% 7/15/2003 19,196.980 941.26 941.26 0.00 08/15/2031 DD 08/0 1/0 1 SEC ID: 7/1/2003 36209YRY60CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 1T GNMA POOL#0486720 6.000% 7/15/2003 565.370 77.11 77.11 0.00 12/15/2028 DD 12/01/98SEC ID: 7/1/2003 362 1 OAVM60CSF07522202:LONG TERM OPER-PIMCO 7/15/2003 IT GNMA POOL#0491103 6.000% 7/15/2003 9,681.240 777.25 777.25 0.00 0 1/15/2029 DD 0 1/0 1/99SEC ID: 7/1/2003 362 IOFRY40CSF07522202: LONGTERM OPER-PIMCO 7/15/2003 1T GNMA POOL#0496461 6.000% 7/15/2003 67.530-320 2,956.50 2.956.50 0.00 0 1/15/2029 DD 0 1/0 1/99SEC ID: 7/1/2003 362 1 OMQN40CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 IT GNMA POOL#0497343 6.0009/6 7/15/2003 3,016.380 151.67 151.67 0.00 12/15/2028 DD 12/01/98SEC ID: 7/1/2003 362 1 ONP450CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 37 Workbench .... ........... .......... ............. .............................. _........... ....... ........... .......... ......................................._._...................._................................ _...._..... T io . Transaction Detail Report m: EWB009 j Reported by Transaction Category Base Currency: USD j OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 stags: FINAL .....................................................................I.................................................................................................................. Trade Date Tran Settle Date Price Cost Amount Net Gain/Loss ape Description Reported Date -----------Base Shares/Par Base Base Base ------------------------------------------......... ........... ........... IT GNMA POOL#0499153 6.000% 7/15/2003 824.090 86.66 86.66 0.00 02/15/2029 DD 02/01/99SECID: 7/1/2003 362109QE50CSF07522202: LONGTERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0500917 6.000% 7/15/2003 2,271.790 65.70 65.70 0.00 04/15/2029 DD 04/01/99SECID: 7/1/2003 362 1 OSPAOOCSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0503388 6.000°0 7/15/2003 11.727.170 2,400.30 2.400.30 0.00 03/15/2029 DD 03/01/99SECID: 7/1/2003 362 1 OVF550CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0506636 6.000% 7/15/2003 2.903.760 234.94 234.94 0.00 04/15/2029 DD 04/01/99SECID: 7/1/2003 36210YY900CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0512235 6.500% 7/15/2003 3.576.380 108.68 108.68 0.00 11/15/2029 DD 11/O1/99SECID: 7/1/2003 3621IGBC60CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0514326 6.500% 7/15/2003 496.900 1.700.95 1,700.95 0.00 07/15/2029 DD 07/01/99SECID: 7/1/2003 3621 IJLF20CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0530053 6.500% 7/15/2003 10.950.900 517.15 517.15 0.00 04/15/2031 DD 04/01/OI SEC ID: 7/1/2003 36212CZS30CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0530290 6.50MIo 7/15/2003 73.860 376.00 376.00 0.00 03/15/2031 DD 04/01/01SECID: 7/1/2003 36212DC310CSF07522202: LONGTERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0537885 6.500% 7/15/2003 218.480 906.96 906.96 0.00 02/15/2031 DD 02/01/01SECID: 7/1/2003 36212MREIOCSF07522202; LONGTERM 7/15/2003 OPER-PIMCO IT GNMA POOL 40547512 6.5000/b 7/15/2003 2.860.220 135.15 135.15 0.00 04/15/2031 DD 04/01/0ISECID: 7/1/2003 36212YGV90CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO 38 "rkbend i Transactio Detail port M: EWBOO9 ...................................... ...*"*"*"*..............*"*'*"*"*............ .................... ..............................*"*'* -** **"**....................**...........*..............n.............-*----* *.........................*'****..........................................................*..........*"*"*....................--- ***'**-Re**'*'*.................*- *"*,*",-,*''"*" Reported by Transaction Category Base Currency: USD OCSDLCONSOLMATFD-OCSGOOO 10000 7/1/2003 - 7/31/2003 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#0547715 6.500D0 7/15/2003 319.910 1,563.79 1,563.79 0.00 02/15/2031 DD 02/0 1/0 1 SEC ID: 7/1/2003 36212YN820CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 IT GNMA POOL#0552322 6.500% 7/15/2003 11,088.140 637.36 637.36 0.00 0 1/15/2032 DD 0 1/0 1/02SEC ID: 7/1/2003 36213ESK30CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 IT GNMA POOL#0552466 6.500% 7/15/2003 60,569.510 5.185.00 5,185.00 0.00 03/15/2032 DD 03/01/02SEC ID: 7/1/2003 36213EW360CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GNMA POOL#0552659 6.500% 7/15/2003 72.412.590 4,326.07 4,326.07 0.00 07/15/2032 DD 07/01/02SEC ID: 7/1/2003 36213E5U60CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 IT GNMA POOL#0561017 6.500% 7/15/2003 52,631.630 4.378.31 4.378.31 0.00 07/15/2031 DD 07/01/01SEC ID: 7/1/2003 36213QG290CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 IT GNMA 11 POOL#0080023 VAR RT 12/20/20267/21/2003 10.482.200 1.428.86 1,428.86 0.00 DD 12/01/96SEC ID: 7/1/2003 36225CAZ90CSF07522202:LONG TERM 7/21/2003 OPER-PIMCO IT GNMA 11 POOL#080088M 7.375% 7/21/2003 17,607-370 1.906.63 1.906.63 0.00 06/20/2027 DD 06/01/97SEC ID: 7/1/2003 36225CC200CSF07522202: LONG TERM 7/21/2003 OPER-PIMCO IT GNMA 11 POOL 40080395 VAR RT 7/21/2003 16,212.500 1.335.60 1,335.60 0.00 04/20/2030 DD 04/01/OOSEC ID: 7/1/2003 36225CNM40CSF07522202: LONG TERM 7/21/2003 OPER-PIMCO IT GNMA 11 POOL#080408X 6.500% 7/21/2003 175.715.790 12.078.89 12.078.89 0.00 05/20/2030 DD 05/01/OOSEC ID: 7/1/2003 36225CN280CSF07522202: LONG TERM 7/21/2003 OPER-PIMCO IT GTE NORTH INC DEB SERA 6.000% 7/15/2003 3,000,000.000 90,000.00 90,000.00 0.00 0 1/15/2004 DD 0 1/15/94SEC ID: 7/15/2003 362337AD90CSF07522202: LONG TERM OPER-PIMCO 7/15/2003 39 Workbench ---....._.._....._......................._._..._._......._..------.-----._...._........................._._._.._........... --------- ........................_......................._........................-..---_-----__...._.._......................._.............._......_.-.........................-... -........-................ -_--------------..................---....._._._._...._._._._._._...._...._........- ....................-............................_, Transaction Detail Report ID: EWBOO9 ` Reported by Transaction Category Base Currency: USD • OCSD-CONSOLIDATED-OCSG00010000 7/1/2003 - 7/31/2003 Status:FINAL .. ......... .........-..._._........-._._...-----....................._....--...._............._...................................---------------...._...._......._...........................-----------._....I........................-......................................._.........__._.._......................................... Trade Date Tran Settle Date PriCe Cost Amount Net Gain/Loss Type Description Reported Date Base Shares/Par Base Base Base IT GENERAL ELEC CAP MTN#TR 00575 5.450%7/15/2003 5,000,000.000 165,770.84 165,770.84 0.00 01/15/2013 DD 12/06/02SECID: 7/15/2003 36962GZY30CSF07522202: LONG TERM 7/15/2003 OPER-PIMCO IT GOLDMAN SACHS GROUP INC SR NT 4.125%7/15/2003 3,000,000.000 62.562.50 62.562.50 0.00 01/15/2008 DD 01/13/03SEC ID: 7/15/2003 38141GCS10CSF07522202:LONGTERM 7/15/2003 OPER-PIMCO IT GNMA GTD REMIC TR 2000-9 FH VAR RT 7/16/2003 36,555.260 1.325.67 1,325.67 0.00 02/16/2030SECID: 7/16/2003 3837H4NX90CSF07522202: LONGTERM 7/16/2003 OPER-PIMCO IT JP MORGAN CHASE&CO SUB NT 5.750% 7/2/2003 3,000,000.000 103,979.17 103,979.17 0.00 01/02/2013 DD 11/25/02SECID: 7/2/2003 46625HAT70CSF07522202:LONG TERM 7/2/2003 OPER-PIMCO IT US TREASURY INFLATION INDEX NT 3.375% 7/15/2003 14,000,000.000 273.870.45 273,870.45 0.00 01/15/2007 DD 01/15/97SECID: 7/15/2003 9128272M30CSF07522202:LONG TERM 7/15/2003 OPER-PIMCO TOTAL FIXED INCOME SECURITIES U.S.DOLLAR: 36,775,486.810 1,083,710.25 1,083,710.25 0.00 TOTAL FIXED INCOME SECURITIES BASE: 36,775,486.810 1.083.710.25 1,083,710.25 0.00 TOTAL INTEREST BASE: 100,275,486.810 1,261,406.65 1,261,406.65 0.00 TOTAL TRANSACTIONS: 74,424,138.550 -48,389,289.26 11,271.85 -123,164.08 40 W69ccben-672' Meeting Date To Bd.of Dir. FAHR COMMITTEE 8/13/03 08/27/03 AGENDA REPORT Item Number Item Number FAHR03-66 13 c Orange County Sanitation District FROM: Lisa Tomko. Director of Human Resources Originator: Lisa Arosteguy, Human Resources Supervisor SUBJECT: CHANGES AND ADDITIONS TO HUMAN RESOURCES POLICIES AND PROCEDURES AS AUTHORIZED BY RESOLUTION 98-33. GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 03-20, amending Resolution No. OCSD 98-33, amending Human Resources Policies and Procedures Manual. SUMMARY The attached policies are routine updates or additions to maintain consistent language with the Memorandums of Understanding (MOU) and/or new legislation or to explain procedures more clearly. PRIOR COMMITTEE/BOARD ACTIONS NA PROJECT/CONTRACT COST SUMMARY N 'A BUDGET IMPACT ❑ This item has been budgeted. (Line item: j ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. El Not applicable (information item) ADDITIONAL INFORMATION Policy Number From To Reason for Change and Subject C150.00 Deferred Compensation Current Language. Delete Policy. Deletion of policy. C190.00 Variable Non-Base Pay Current Language. Revised Language. Revisions for consistency with Travel Policy. G:\wp.dta\agenda\Board Agenda Reports12003 Board Agenda Reporw08031tom 13(ci.HR PSP.doc Revised: 8120,2003 Page 1 ALTERNATIVES N/A CEQA FINDINGS N/A ATTACHMENTS 1 . Policy C190.00, Variable Non-Base Pay 2. Resolution No. OCSD 03-20 G:\wp.dta\agenda\Board Agenda Repons\2003 Board Agenda Reports\0803\Item 13(c).HR P&P.doc Revised: 8/20/2003 Page 2 V Orange County Policy Number: C190.00 Sanitation District Effective Date: "`�ug�ust�,2W0 Subject: Variable Non Base Pay Supersedes: February 26, = Approved by: 1.0 PURPOSE 1.1 The purpose of this policy is to establish uniform guidelines and procedures for variable pay other than basic hourly rate. This variable pay includes: overtime pay for non-exempt employees, acting pay,call-back pay, standby pay, providing unscheduled overtime meals, severance pay and differential shift pay. 2.0 ORGANIZATIONAL UNITS AFFECTED 2.1 Overtime pay for non-exempt applies to all District employees represented by the Engineering Unit,Technical Services Unit, Administrative/Clerical Unit, Operations and Maintenance and nonexempt confidential positions. 2.2 Actiny qav, unscheduled overtime meals and severance pay applies to all District employees regardless of their organizational unit. 2.3 Call-back pay and standby pay applies to all non-exempt District employees regardless of their organizational unit. 2.4 Shift differential pa v applies to all District employees who are covered by an MOU that entitles them to shift differential pay. 3.0 DEFINITIONS 3.1 Acting means performing substantially all of the duties of a vacant budgeted position with a higher maximum rate of pay. 3.2 Call-back pay is paid to an employees by the District when an employee is called back to work by management without prior notice, and the employee has completed his or her normal work shift and left the plant, or when prior notice is given but the work begins on the same day at least three hours after completion of the regular shift, the employee shall receive a minimum of three hours of call- back pay. 3.3 Non-Exempt employees who are covered by the minimum wage and overtime provisions of the Fair Labor Standards Act, as amended. Such employees, because of the type of work that they perform and their earnings level, are subject to receiving overtime pay in addition to any entitlement otherwise provided for in applicable Memoranda of Understanding or other policies. 3.4 Overtime is the number of hours in paid status in excess of 40 during a workweek. 3.5 Salary Range is the approved salary minimum and approved salary maximum for each pay grade in the District's approved compensation structure. Page 1 of 5 3.6 Standby is time during which an employee is not required to be at the work location or at the employee's residence but is required to be available for immediate return to work. 3.7 Workweek means a seven-day period starting at 12:01 a.m. Friday and ending at midnight on the following Thursday. If a work shift begins on Thursday before midnight but ends any time after midnight on Friday, all hours worked on that shift are considered to be worked on Friday. 4.0 POLICY 4.1 OVERTIME PAY FOR NON-EXEMPT EMPLOYEES 4.1.1 Non-exempt employees who qualify for overtime compensation for work beyond their normal schedule shall be paid one-and-a-half times their regular rate of pay in accordance with the procedures listed in section 5.1. 4.2 ACTING PAY 4.2.1 It is District policy to compensate employees, for performing substantially all of the duties of a vacant budgeted position with a higher maximum rate of pay in accordance with the procedures listed in section 5.2. 4.2.2 Acting pay status shall continue for a maximum of six months. 4.3 CALL-BACK PAY 4.3.1 It is District policy to compensate employees for call-back pay in accordance with the procedure listed in section 5.3. 4.4 STANDBY PAY 4.4.1 An employee covered by a Memorandum of Understanding provision for standby pay who is placed on standby shall be compensated at the rate of two hundred dollars per week, and will also receive call-back pay when they are actually called to work in accordance with the procedures listed in section 5.4. 4.5 UNSCHEDULED OVERTIME MEALS 4.5.1 It is District policy to provide employees with money for meals or food service when they are required to serve unscheduled overtime in accordance with the procedure listed in section 5.5. 4.6 SEVERANCE PAY 4.6.1 Employees are expected to give a minimum of two weeks written notification when resigning from employment with the District. The District will follow the procedures for a Notice of Intent to Separate as listed in section 5.6. Page 2 of 5 a 4.7 SHIFT DIFFERENTIAL PAY 4.7.1 It is District policy to compensate employees for shift work outside normal business hours at an hourly rate above their normal hourly rate in accordance with the procedures listed in section 5.7. 5.0 PROCEDURE 5.1 OVERTIME PAY FOR NON-EXEMPT EMPLOYEES 5.1.1 When an employee's work schedule requires that they work on an observed holiday, the employee may opt to be paid at two-and-one-half times their regular rate of pay for the holiday or to be paid at one-and- one-half times their regular rate and receive an amount of Holiday Compensatory Time Off equivalent to the number of hours in the shift. Normally, employees that accumulate in excess of fifty hours of Holiday Compensatory Time Off will be scheduled to take such excess time off or be paid for the excess accumulated Holiday Compensatory Time Off at the convenience of the District. For good reason,the Department Head may allow Holiday Compensatory Time Off to be accumulated in excess of fifty hours. 5.2 ACTING PAY 5.2.1 Employees who are temporarily assigned by District management to perform substantially all of the duties of a higher level classification for a period of at least 100 consecutive hours will be eligible for a salary increase, for further continued service in the higher classification. 5.2.2 For service beyond 100 consecutive hours, pay shall be 5.5% higher than the employee's current rate of pay, or at the minimum of the pay range for the acting position,whichever is greater. 5.2.2.1 The higher rate of pay begins with the 101"hour, and continues until the assignment ends. 5.2.2.2 Requests for acting pay require the approval of the employee's Department Head and the Director of Human Resources. 5.3 CALL-BACK PAY 5.3.1 When an employee is called back to work by the District without prior notice, and the employee has completed his or her normal work shift for that day and left the work site, or when prior notice is given by the District, but the work begins on the same day at least three hours after completion of an employee's regular shift,the employee shall receive a minimum of three hours of call-back pay. The three hours minimum, whether or not actually worked, shall be paid at the rate of one and one half times the employee's regular hourly rate. If the actual work time exceeds three hours, the employee will be compensated for that time as well, except that no employee may work for or be compensated for more than 16 hours in a 24-hour period. Employees who are called back a second time within a normal shift period are considered to be working for the duration of that shift. Page 3 of 5 5.4 STANDBY PAY 5.4.1 Standby assignments shall first be made on a voluntary basis. 5.4.2 A volunteer standby list shall be established by classification and job location. 5.4.3 Standby assignments shall be made from the list of employees who are competent and experienced. in alphabetical order, on a rotating basis. 5.4.4 In the event that no one volunteers, the District shall, on a rotational basis. assign standby by job classification and work location from employees who are competent and experienced. 5.5 UNSCHEDULED OVERTIME MEALS 5.5.1 When employees are required to work overtime due to an emergency and actually work at least five hours, or due to an unanticipated extension of their regular workday that includes a regular meal period, an employee is entitled to "per diem" reimbursement for the appropriate meal(s) in addition to any compensation for time worked. The `per diem" amount shall not to exceed the individual maximums for meals per the Federal Meals Incidental Expense Rates found in the Code of Federal Regulations 301-11.18. The file containing the daily rates and governing destinations is accessible through: g:Vntglobalformsltraining and meetings—authorizations and expenses02-03 Per Diem Rates. Receipts are not required to receive 'per diem" reimbursement. aotuaf cost-of-a4neai,--not4o-exzeed45 00 for-breakfast;�7-.-00-fer-luRc-h-of $15.04fer-dbRner ReGeiptS mus! be subfPitted-tot#e-AGG0URtiRg Divfsiefl fer-expense4ejmbursernent. 5.5.2 In lieu of cash reimbursement, the District may provide actual food service to the employees. 5.6 SEVERANCE PA Y 5.6.1 When a full-time regular employee is separated from employment by action of the District, except for disciplinary cause. the employee will be notified in writing through a Notice of Intent to Separate two weeks prior to the effective separation date. The notification period for employees on unpaid leave will be reduced by the number of calendar days of such leave. In the event such notification is not given, the employee shall be entitled to severance pay in accordance with the formula set forth below: 5.6.1.1 Full-time, employees shall be entitled to eight hours pay for each full calendar month of continuous employment not to exceed one hundred sixty hours pay, or as may be determined by the General Manager. 5.6.1.2 Employees in limited term or part-time classifications, and employees who are dismissed for cause. are not eligible for severance pay under any circumstances. Pace 4 of 5 0 5.7 SHIFT DIFFERENTIAL PAY 5.7.1 Employees who are regularly assigned to work a night shift that consists of 50%or more of their hours between 6 p.m. and 6 a.m., and who actually work that shift, shall receive a shift differential of$2.50 per hour. 6.0 EXCEPTIONS 6.1 Acting pay-the 100-hour eligibility period may be waived at the discretion of the General Manager. 7.0 PROVISIONS AND CONDITIONS 7.1 Standby pa —a standby list will be developed by the Operations and Maintenance Department weekly, and it shall be posted at both the Plant No. 1 Control Center and at the Plant No. 2 Operations Center. 7.2 Severance pay—employees who are dismissed for cause will not receive a Notice of Intent to Separate under the provisions of the policy. 8.0 RELATED DOCUMENTS 8.1 Overtime pay non-exempt employees- Fair Labor Standards Act 8.2eideraltl�eallsa- rd-nciaZpens�e,Aat �C �e°jo �FederaiR WOW 8.3 RO&W 0;05U nsC ed letl4Orr" r _e M 2tis 8.4 'ulc}r11434 [ PDICj Page 5 of 5 y RESOLUTION NO. OCSD 03-20 AMENDING RESOLUTION NO. OCSD 98-33 A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT AMENDING THE HUMAN RESOURCES POLICIES AND PROCEDURES The Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That Exhibit "A"of Resolution No. OCSD 98-33 is hereby amended by deleting Policy No. C 150.00, Deferred Compensation. Section 2: That Exhibit "A"of Resolution No. OCSD 98-33 is hereby amended by amending C190.00, Variable Non-Base Pay, set forth in Attachment No. 1, attached hereto and incorporated herein by reference. Section 3: That all other terms and conditions of Resolution No. OCSD 98-33, as previously recommended, shall remain in full force and effect. Section 4: That all future amendments to Resolution No. OCSD 98-33 be made by Resolution. PASSED AND ADOPTED at a regular meeting held August 27, 2003. Chair ATTEST: Board Secretary G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0803\Item 13(c).2.doc FA H R COMMITTEE Meeting Date To Bd.of Dir. 08/13/03 08/27/03 AGENDA REPORT Item Number Item Number FAHR-70 13 d Orange County Sanitation District FROM: Gary G. Streed, Director of Finance Originator: Michael D. White, Controller SUBJECT: QUARTERLY INVESTMENT MANAGEMENT PROGRAM REPORT FOR THE PERIOD APRIL 1 , 2003 THROUGH JUNE 30, 2003 GENERAL MANAGER'S RECOMMENDATION Receive and file the Quarterly Investment Management Program Report for the period April 1 , 2003 through June 30, 2003. SUMMARY Section 15.0 of the District's Investment Policy includes monthly and quarterly reporting requirements for the District's two investment portfolios. These two funds, the "Liquid Operating Monies," and the "Long-Term Operating Monies" are managed by PIMCO, the District's external money manager. The ongoing monitoring of the District's investment program by staff and Callan Associates, the District's independent investment advisor, indicates that the District's investments are in compliance with the District's adopted Investment Policy and the California Government Code, and that overall performance has tracked with benchmark indices. In addition, sufficient liquidity and anticipated revenues are available for the District to meet budgeted expenditures for the next six months. The District's portfolios do not include any reverse repurchase agreements or derivative securities. PROJECT/CONTRACT COST SUMMARY N/A BUDGET IMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. Z Not applicable (information item) C:\Documents and Settings`pope'.Local Settings\Temporary Internet Fdes\01-KBR03-70.0tly Investment Rpt.doc Revised: 8/20198 Page 1 ADDITIONAL INFORMATION -' Performance Reports The Quarterly Strategy Review, prepared by PIMCO, and the Investment Measurement Service Quarterly Review, prepared by Callan Associates, are attached for reference. Also attached are Long-Term and Liquid Operating Monies Summary of Performance Data and Portfolio Statistics charts that depict the performance results, estimated yield and duration, credit quality, and sector diversification of the District's portfolios, as of March 31 , 2003 and June 30, 2003. The Liquid Operating Monies portfolio, with an average maturity of 90 days, consists entirely of cash equivalent investments such as U.S. Treasuries and corporate discount notes. Portfolio Performance Summary The following table presents a performance summary of the District's portfolios as compared to their benchmarks for the period April 1 through June 30, 2003. Portfolio Performance Summary Quarter Ended June 30,2003 Liquid Operating Monies(°o) Long-Term Operating Monies(%) Total Rate Total Rate of of Return Benchmark"' Return Benchmarki'1 3 Months 0.31 0.28 1.46 1.66 6 Months 0.67 0.59 2.64 2.81 9 Months 1.18 0.98 3.74 4.19 12 Months 1.66 1.41 7.34 7.78 Since inception 30 Sept.95 4.89 4.38 6.88 6.85 Market Value S66.51`0 S329.7M Average Quality "AAA" "AAA" Current Yield(%) 3.4 4.8 Estimated Yield to Maturity ro) 1.3 2.1 Quarterly Deposits(Withdrawals) $16.8 So.0M Estimated Annual Income S2.2M S14.6M (1) Benchmarks: • Liquid Operating Portfolio: 3-Month Treasury Bill Index ■ Long-Term Operating Portfolio: Merrill Lynch Corp/Govt. 1-5 Year Bond Index Portfolio Market Values Comparative marked-to-market quarter-end portfolio values are shown in the following table, and in the attached bar chart. Liquid Long-Term Quarter Operating Operating Ending Monies($M) Monies($M) 30 Sept.02 44.1 317.8 31 Dec.02 64.3 321.2 31 Mar.03 49.6 325.0 30 June 03 66.5 329.7 C:\Documents and Settings\pope\Local SeningslTemporary Internet Files\0LKBF\03-70.0tly Investment Rpt.doc Revised: 8/20198 Page 2 District's Investment Account Balances as of June 30, 2003 Book Balances Estimated Investment Accounts June 30,2003 Yield(%) State of Calif. LAW $ 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 5,000 N/A TOTAL $393224 641 1.99 Debt Service Reserves w/Trustees $34,133.245 4.40 ALTERNATIVES N/A CEQA FINDINGS N/A ATTACHMENTS 1. Historical Yield Curve Graph 2. PIMCO Quarterly Report 3. Quarter End Portfolio Market Value Bar Chart 4. Summary of Performance Data and Portfolio Statistics— Liquid Operating Monies 5. Summary of Performance Data and Portfolio Statistics— L-T Operating Monies 6. Asset Summary by Asset Type — Liquid Operating Portfolio 7. Asset Summary by Asset Type — Long Term Portfolio 8. Investment Listing of Liquid Operating and L-T Portfolios (Yield Analysis Report). 9. Investment Transactions and Balances in LAIF 10. Callan Report (separate bound document) 11. PIMCO Report (separate bound document) CADocuments and settin9s\pope\Loca1 SettingsWemporary Intemet F11es\0LK8F\03.70.0t1y Investment Rpt.doc Revised: 8/20/98 Page 3 Prepared by Finance, 8/5/2003, 1.-51 PM HISTORICAL YIELD CURVE 5.25 - 5.00 - 4.75 4.50 - ----- -- - - ---- -- 4.25 4.00 3.75 3.50 3.25 0 3.00 2.75 - 2.50 2.25 2.00 1.75 1.50 E 1.25 r 1.00 - - -- -- - 0.75 - -- -- ----- 0.50 O O �, �, >+ �+ �, �, A >, >► E E e— N M O ti G O O M cD e- N M —�--31-Dec-02 31-Mar-03 —f--30-Jun-03 G:lexcel.dtalfin122201geggi\Finance\HistoricalTREASU RYyieldcurve P I M C O 840 Newport Center Drive Suite 300 Newport Beach,CA 92660 Tel: 949.720.6000 Fax:949.720.1376 July 30, 2003 Mr. Mike White Controller Orange County Sanitation District 10844 Ellis Avenue Administration Building Fountain Valley, CA 92708-7018 Re: 2nd Quarter 2003 Report Dear Mike: The following is a description of events in the bond markets during the 2"a quarter of 2003 and an analysis of the strategies undertaken in the Orange County Sanitation District's Long-Term and Liquid portfolios over the period. We have also included a section on strategies to be pursued in your portfolios during the coming months. Bond Market Recap: Market Recap: Financial Assets Gain in First Half of 2003 Financial assets gained during the first half of 2003 amid a revival of risk appetites as anxiety about the war in Iraq faded. Assets that generally benefit from economic growth, such as stocks, corporate bonds and emerging market debt, fared the best for the quarter and year-to-date as investors dove into these sectors anticipating a recovery in the second half of 2003. Reflationary forces that investors expected to fuel a rebound included federal tax cuts and a weak dollar, as well as low borrowing rates that eased the burden of high personal and corporate indebtedness. Low mortgage rates kept refinancings booming in the second quarter and put money in consumers' pockets. Corporate bond yields were so low that well-known companies like General Electric and Wal-Mart could borrow for five years at less than 3 percent. Treasuries lagged their riskier counterparts but still enjoyed a modest rally. Yields fell to levels not seen in 45 years early in the quarter before bouncing off their lows in June as hopes for recovery increased. The yield on the benchmark 10-year Treasury closed the quarter 28 basis points lower at 3.52 percent, after nearing 3 percent earlier in the period. Buyers were encouraged that inflation would remain tame amid low capacity utilization and weak employment growth. Asian central banks bought Treasuries to limit the rise in their currencies versus the dollar that has hurt their export industries. Late in the quarter the Federal Reserve cut the federal funds rate by 25 basis points to 1 percent, its 1P easing since 2001, in an effort to boost the economy and ward off deflation. Although the c i cut was less than markets expected, the central bank suggested that rates would stay low until deflation risks abated. Higher Yielding Bond Sectors Fare Best Thus Far In 2003 The following is a summary of fixed income sector performance: ■ Mortgages outpaced Treasuries for the year-to-date on a like-duration basis and performed in line in the second quarter. Lower coupon mortgages, which are less sensitive to prepayments as mortgage rates fall, outperformed during a period when refinancings reached unprecedented levels. While the pace of refinancings slowed in June as mortgage rates rose, it was still rapid by historical standards. ■ Corporate bonds, especially BBB-rated and high yield issues, outperformed Treasuries and mortgages for the quarter and year-to-date. Part of the gains came from perceptions of improved credit quality, but strong funds flows from investors seeking higher yields also gave a boost to the corporate market. ■ High yield corporates and emerging market bonds were the best performing fixed income asset classes in the second quarter and for the year-to-date. Emerging markets benefited from generally improved credit fundamentals as well as acceptance within structural asset allocations by a growing number of institutional investors. ■ Treasuries outperformed most developed bond markets for the year-to-date and the second quarter. European rates fell, though not quite as much as Treasuries, in anticipation of more easing by the European Central Bank, which complied with a 50 basis point cut on June 5. Japan was the worst performing global market for the quarter. Japanese government bonds posted a loss as yields moved sharply off historic lows amid signs of economic recovery and a corresponding rally in Japanese stocks. Performance Attribution: Long Term Portfolio The Long-Term portfolio that PIMCO manages on behalf of Orange County Sanitation District turned in a 1.46 percent return over the quarter, lagging the Merrill Lynch 1-5 year Government Corporate Index by 20 basis points. This portfolio's performance was due in part to the following factors: ■ Below-index duration was negative for the quarter as rates fell ■ A mortgage emphasis was positive; holdings of lower coupon mortgages, which are less vulnerable to prepayment risk, helped returns as these issues outperformed ■ Corporate holdings were positive as telecom and energy pipeline bonds continued their recovery, however an underweight exposure to the sector detracted from relative returns ■ An allocation to real return bonds was negative as real yields fell less than yields on comparable maturity nominal bonds 2 Liquid Portfolio The Liquid portfolio that PIMCO manages on behalf of Orange County Sanitation District turned in a 0.31 percent return over the quarter, outperforming the 3 month Treasury Bill Index by 3 basis points. This portfolio's performance was due in part to the following factors: ■ A duration longer than the effective benchmark was modestly positive for performance as interest rates fell ■ Corporate holdings provided high relative yields and generally positive price performance as credit risk premiums fell ■ Holdings of high quality commercial paper and agency discount notes contributed to returns Economic Outlook: Short-Term Rates To Be Stable and Low To Spark Reflation The Federal Reserve, concerned about the risk of deflation in the face of a worldwide excess of supply over demand, will keep short-term interest rates low for the foreseeable future. This policy, essential for a debt-laden global economy heavily reliant on the financial sector, will also restrain increases in long rates. The 10-year Treasury yield will remain in a range near 4 percent for the next 6 to 9 months after moving off of 45-year lows. Successful reflation, meaning a 100 basis point increase in core inflation associated with a pickup in growth, is likely over the next three to five years. Besides monetary easing, other economic tailwinds include substantial U.S. fiscal stimulus and a weak dollar. Should reflation occur, the yield on the 10-year Treasury would climb towards 5-6 percent. This outcome is not inevitable, however. Lingering economic imbalances will keep the threat of deflation alive, forcing the Fed to err on the side of accommodation. The imbalances include: ■ Too Much Debt - Individuals and companies are saving more to reverse the dis-saving and debt accumulation of the late 1990s. A return to more normal levels of saving will restrain consumption and investment. ■ U.S. Trade Deficit - At nearly 6 percent of GDP, the U.S. trade deficit suggests that Americans are spending beyond their means with the shortfall supplied by capital from abroad. To move toward balance, Americans must either save more or non-U.S. suppliers of capital could force a retrenchment via higher interest rates and a weaker dollar ■ Underfunded Pensions - Underfunding of defined benefit pension plans is estimated by the Pension Benefit Guaranty Corp. at over $300 billion for private plans. Closing the gap will divert corporate cash from growth-enhancing investment. ■ No Help From Abroad - Europe will be held back by an ageing work force, rigidity in labor and product markets and a Growth and Stability Pact that restricts fiscal stimulus. Japan will remain bogged down by a weak banking sector and massive public debt. China will export deflation with its low-cost manufactured goods. 3 f ■ Geopolitical Risks - Anxiety about risks such as more terrorist attacks, U.S. military interventions and SARS will continue to dent confidence and crimp growth Add Value By Diversifying Beyond Core Strategies With rates expected to be stable in the near term, we see no reason to take extra interest rate risk. We will target near-index duration and yield curve exposure, while benefiting from rolling down the steep intermediate part of the yield curve. Given their full valuations, we will aim for near- index weightings in Treasuries as well as select corporates that have recently enjoyed substantial gains. We will emphasize mortgage coupon selection strategies near term while capturing longer- term structural advantages of the mortgage sector. This prudent posture still leaves ample opportunity to add value. Selecting undervalued individual bonds is one way. Another is a strategy that entails buying bonds with longer settlement periods and investing the cash backing the unsettled issues in short term debt with relatively high yields. Stable real yields and the potential for reflation make real return bonds compelling as a Treasury substitute. Municipal bonds, where yields are nearly equal to taxable debt, also offer the potential for capital gains as yields in these sectors revert to a more typical relationship. Where permitted, we will hold short/intermediate maturity Eurozone bonds in anticipation of more easing by the European Central Bank. Emerging market issues provide a comfortable yield cushion with solid and improving credit fundamentals. The following list highlights the strategies that will be used in the Long Term portfolio in the coming months: ■ Add value by diversifying beyond core strategies ■ With Treasury yields near 45-year lows and expectations for relatively stable rates in the near term, target duration near the index and substitute TIPS for nominal Treasuries • Emphasize mortgage coupon selection strategies near term while capturing longer-tenor structural advantages of the mortgage sector ■ Maintain corporate positions; seek opportunities to harvest recent gains from positive security selection after the strong rebound in the corporate sector ■ Hold, and selectively add, municipal bonds to exploit yields comparable to taxable bonds as well as potential price gains The following list highlights the strategies that will be used in the Liquid portfolio in the coming months: ■ Maintain a high quality, diversified short-duration portfolio structured to enhance yield and mitigate risk ■ Maintain modestly extended duration and exposure to short to intermediate maturities to generate incremental yield • Focus on corporate issues with attractive yield premiums and solid credit characteristics; emphasize floating rate notes and avoid issues without compelling valuations 4 ■ Maintain holdings of high quality commercial paper and agency discount notes to add value and liquidity to the portfolio We hope you find this information useful. Please feel free to call us with any questions. Sincerely, Christine Telish, CFA John M. Miller, CFA Vice President Vice President 5 !� s Prepared by Finance, 8/6/2003, 9:06 AM OCSD Investment Management Program Quarter End Portfolio Values (Marked-to-Market) $400,000,000 $350,000,000 — $300,000,000 -- -- - - $250,000,000 $200,000,000 — -- - $150,000,000 $100,000,000 $50,000,000 $o 31 Mar 02 30 Jun 02 30 Sep 02 31 Dec 02 31 Mar 03 30 Jun 03 Liquid Operating Monies E3Long-Term Operating Monies C:\Documents and Settings\pope\Local Settings\Temporary Internet Files\OLKBF\03-70.3 Summary of Performance Data and Portfolio Statistics Orange County Sanitation District Liquid Operating Portfolio 5-Year Return vs.Standard Deviation 11 10 X 9 Salomon Performance . :• ®®®®®® 8 10 Yr.Strip Periods Ended . t 11 1 • . • • ae c 7 Total Portfolio' E ML 1.3 Yr. Before Fees(%) 4.89 4.50 3.79 1.66 1.18 0.67 0.31 Er s • Treasury a s After Fees(°'o) 4.75 4.36 3.64 1.52 1.09 0.61 0.28 = 4 :index olio C C a 3 Salomon 3 Month T-Bill Index(%)Z 4.38 3.89 3.15 1.41 0.98 0.59 0.28 2 1 0 0 1 2 3 4 5 6 7 8 9 10 11 Standard Deviation of Return (%) %of Market Value °o of Duration • err r �� $. �� �r � Total Market Value($MM) 49.6 66.5 Government 31 23 59 39 Quarterly Contributions($MM) -15.0 16.8 Mortgages 0 0 0 0 Estimated Annual Income($MM) 1.9 2.2 Corporates 15 16 16 34 Estimated Yield to Maturity(°o) 1.3 1.3 High Yield 0 0 0 0 Estimated Duration (yrs) 0.3 0.3 Non U.S.S Developed 0 0 0 0 Average Maturity(yrs) 0.3 0.3 Emerging Markets 0 0 0 0 Average Quality AAA AAA Other 0 0 0 0 Average Coupon (%) 3.9 3.4 Net Cash Money Markets 54 61 25 27 Tracking Error(3 yrs., "a)a 0.2 0.2 Total 100 100 100 100 Information Ratio(3 yrs.)° 3.3 3.3 See footnotes in Appendix. 2 Summary of Performance Data and Portfolio Statistics Orange County Sanitation District Long Term Operating Portfolio 5-Year Return vs.Standard Deviation 9 8 PerformanceF. x LBAG Periods •-• 6/30/2003 ®mom • • • • c7 Index Portfolios Total Portfolio' a:6 a Before Fees(%) 6.88 6.82 7.92 7.34 3.74 2.64 1.46 N After Fees(%) 6.73 6.67 7.76 7.18 3.62 2.56 1.42 5 C Merrill Lynch Corp/Govt 1-5 Year a 4 - A Salomon Bond Index(%)Z 6.85 7.00 8.53 7.78 4.19 2.81 1.66 3-Mo 3 1- - - 0 1 2 3 4 5 6 Standard Deviation of Return2(°;) %of Market Value %of Duration • . 1 1 1 1 - . • • Inc 1 M, 1 1 1 M- 71M Total Market Value($MM) 325.0 329.7 Government 46 46 55 55 Quarterly Contributions($MM) 0.0 0.0 Mortgages 15 8 12 7 Estimated Annual Income($MM) 12.7 14.6 Corporates 16 14 30 31 Estimated Yield to Maturity(%) 2.6 2.1 High Yield 0 0 0 0 Estimated Duration (yrs) 2.3 2.1 Non U.S. S Developed 0 0 0 0 Benchmark Duration (yrs) 2.3 2.4 Emerging Markets 0 0 0 0 Average Maturity(yrs) 2.7 2.5 Other 0 0 0 0 Average Quality AAA AAA Net Cash Equivalents 23 32 3 7 Average Coupon(%) 4.1 4.8 Total 100 100 100 100 Tracking Error(3 yrs.,%)3 0.6 0.0 Information Ratio(3 yrs.)' -0.5 0.0 See footnotes in Appendix. 2 Report ID:GL8251 Asset Summary Base Currency:USD by Asset Type with Sectors Alternate Base Currency: Exchange Rate: LIQUID OPER-PJNCO-OCSF07511102 /3O/2003 Status:FINAL T Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base CASH&CASH EQUIVALENTS U.S. DOLLAR INTEREST 455,598.88 455,598.88 0.68% 0.00 COMMERCIAL PAPER-DISCOUNT 1,000,000.000 998,896.67 998,896.67 1.500/0 0.00 FED HM LOAN BNK-LESS THAN IYR 9,600,000.000 9,572,740.94 9,572,740.94 14.39% 0.00 FEDERAL HOME LOAN MORTGAGE-LESS THAN 1 11,500,000.000 11,461,330.83 11,461,330.83 17.22% 0.00 FNMA ISSUES-LESS THAN 1YR 8,200,000.000 8,171,193.17 8,171,193.17 12.28% 0.00 MUTUAL FUNDS 9,785,246.110 9,785,246.11 9,785,246.11 14.71% 0.00 U.S.DOLLAR 40,085,246.110 40,445,006.60 40,445,006.60 60.78% 0.00 CASH&CASH EQUIVALENTS 40,085,246.110 40,445,006.60 40,445,006.60 60.78% 0.00 FIXED INCOME SECURITIES U.S. DOLLAR BANKING&FINANCE 8,290,000.000 8,637,849.20 8,541,995.90 12.84% -95,853.30 INDUSTRIAL 1,206,000.000 1,237,099.06 1,218,266.54 1.83% -18,832.52 U.S.AGENCIES 9,465,000.000 9,755,723.85 9,635,422.69 14.48% -120,301.16 U.S. GOVERNMENTS 5,800,000,000 6,251,984.38 6,035,625.00 9.07% -216,359.38 UTILITY-TELEPHONE 650,000.000 677,046.50 666,653.00 1.00% -10,393.50 U.S. DOLLAR 25,411,000.000 26,559,702.99 26,097,963.13 39.22% -461,739.86 FIXED INCOME SECURITIES 25,411,000.000 26,559,702.99 26,097,963.13 39.22% -461,739.86 TOTAL ASSETS-BASE: 65,496,246.110 67,004,709.59 66,542,969.73 100.00% -461,739.86 1 Workbench Report ID:GL8251 Asset Summary Base Currency:USD by Asset Type with Sectors Alternate Base Currency: Exchange Rate: LONG TERM OPER PIMCO-OCSF07522202 6/30/2003 Status:FINAL - — - --- -— --- —_^--- -- —-- — Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base CASH&CASH EQUIVALENTS U.S. DOLLAR PENDING TRADES -20,630,167.91 -20,630,167.91 -6.26% 0.00 INTEREST 3,448,527.60 3,448,527.60 1.050/0 0.00 FED HM LOAN BNK- LESS THAN IYR 33,550,000.000 33,460,962.57 33,460,962.57 10.15% 0.00 FEDERAL HOME LOAN MORTGAGE-LESS THAN 1 28,100,000.000 28,003,641.87 28,003,641.87 8.49% 0.00 FNMA ISSUES-LESS THAN 1YR 250,000.000 249,122.50 249,122.50 0.08% 0.00 MUTUAL FUNDS 881,875.020 881,875.02 881,875.02 0.27% 0.00 U.S.DOLLAR 62,781,875.020 45,413,961.65 45,413,961.65 13.77% 0.00 CASH&CASH EQUIVALENTS 62,781,875.020 45,413,961.65 45,413,961.65 13.77% 0.06 FIXED INCOME SECURITIES U.S. DOLLAR ABS-AIRPLANE RECEIVABLES 1,600,000.000 1,600,000.00 240,000.00 0.07% -1,360,000.00 BANKING&FINANCE 40,285,000.000 41,385,619.50 42,829,967.55 12.99% 1,444,348.05 COLLATERALIZED MORTGAGE OBLIGATION 2,556,236.110 2,556,985.05 2,799,283.44 0.85% 242,298.39 FHLMC MULTICLASS 1,953,459.820 1,955,139.92 1,971,348.91 0.60% 16,208.99 FHLMC POOLS 239,464.810 240,923.70 246,383.81 0.07% 5,460.11 FNMA POOLS 33,763,054.070 35,057,613.63 35,115,795.92 10.65% 58,182.29 GNMA MULTI FAMILY POOLS 4,307,686.560 4,286,105.30 4,440,752.66 1.35% 154,647.36 GNMA SINGLE FAMILY POOLS 15,466,953.470 15,787,611.29 16,277,109.95 4.94% 489,498.66 INDUSTRIAL 12,000,000.000 12,458,780.00 12,688,400.00 3.85% 229,620.00 INFLATION INDEXED SECURITIES 16,242,520.000 14,312,299.52 17,833,780.19 5.41% 3,521,480.67 INTERNATIONAL CORPORATE BONDS 752,000.000 826,199.84 845,804.48 0.26% 19,604.64 U.S. AGENCIES 41,275,434.090 42,352,090.91 45,230,200.58 13.72% 2,878,109.67 U.S. GOVERNMENTS 80,779,356.910 89,082,570.88 89,986,806.45 27.29% 904,235.57 UTILITY-ELECTRIC 6,500,000.000 6,438,210.00 7,034,445.00 2.13% 596,235.00 UTILITY-TELEPHONE 6,000,000.000 6,594,240.00 6,734,970.00 2.04% 140,730.00 U.S. DOLLAR 263,721,165.940 274,934,389.54 284,275,048.94 86.23% 9,340,659.40 FIXED INCOME SECURITIES 263,721,165.840 274,934,389.54 284,275,048.94 86.23% 9,340,659.40 1 Workbench Asset Summary Report ID:GL8251 Base Currency:USD by Asset Type with Sectors Alternate Base Currency: Exchange Rate: LONG TERM OPER PIMCO-OCSF07522202 _ _ _ 6J 3O�2003 _ _ Status:FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base TOTAL ASSETS-BASE: 326,503,040.860 320,348,351.19 329,689,010.59 100.00% 9,340,659.40 1 Workbench YLDANAL YIELD ANALYSIS PAGE i 1 OCSF07511102 2003/06/30 RUN DATE s 07/07/03 DISTRICT: LIQUID OPERATING RUN TIME s 09.56.47 »===----------- PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE 8 TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- CASH b CASH EQUIVALENTS 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.799 1,995,975.00 4.99 313384JM2 HAT 07/23/2003 A-1+ 1,995,975.00 3.02 600,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.781 598,689.00 1.49 313384JT7 HAT 07/29/2003 A-l+ 598,689.00 .91 3,000,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.773 2,993,175.00 7.48 313384KB4 MAT 08/06/2003 A-1+ 2,993,175.00 4.53 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.713 1,994,261.94 4.98 313384KR9 HAT 08/20/2003 A-1+ 1,994,261.94 3.02 2,000,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.532 1,990,640.00 4.97 313384NJ4 HAT 10/24/2003 A-1+ 1,990,640.00 3.01 500,000.00 FEDERAL HONE LN HTG CORP DISC .000 .000 P-1 99.752 498,759.44 1.24 313396JFI HAT 07/17/2003 A-1+ 498,759.44 .75 3,000,000.00 FEDERAL HOME LN MTG CORP DISC .000 .000 P-1 99.756 2,992,687.50 7.48 313396KG7 HAT 08/11/2003 A-l+ 2,992,607.50 4.53 2,000,000.00 FEDERAL HOME LN MTG CORP DISC .000 .000 P-1 99.731 1,994,616.67 4.98 313396KKB MAT 08/14/2003 A-1+ 1,994,616.67 3.02 2,000,000.00 FEDERAL HOME LN HTG CORP DISC .000 .000 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 .000 .000 P-1 99.569 1,991,383.33 4.97 313396HT7 MAT 10/09/2003 A-1+ 1,991,383.33 3.01 2,000,000.00 FEDERAL ROHE LN HTG CORP DISC .000 .000 P-1 99.549 1,990,977.22 4.97 313396NB5 HAT 10/17/2003 A-1+ 1,990,977.22 3.01 800,000.00 FEDERAL NATL MTG ASSN DISC NTS .000 .000 P-1 99.395 795,156.00 1.99 313588HQI HAT 07/02/2003 A-1+ 795,156.00 1.20 1,800,000.00 FEDERAL NATL HTG ASSN DISCOUNT .000 .000 P-1 99.710 1,794,780.00 4.48 313588JUO HAT 07/30/2003 A-1+ 1,794,780.00 2.72 3,000,000.00 FEDERAL NATL HTG ASSN DISCOUNT .000 .000 P-1 99.788 2,993,653.33 7.48 313588JVS HAT 07/31/2003 A-1+ 2,993,653.33 4.53 YLDANAL YIELD ANALYSIS PAGE s 2 OCSF07511102 2003/06/30 RUN DATE s 07/07/03 DISTRICT: LIQUID OPERATING RUN TIME s 09.56.47 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ 8 TYPE SECURITY ID SECURITY DESCRIPTION SOOT( YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 600,000.00 FEDERAL NATL MTG ASSN DISCOUNT .000 .000 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 .000 .000 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 .000 .000 P-1 99.897 399,588.00 .99 36959JUP6 07/23/2003 399,588.00 .60 600,000.00 GENERAL ELEC CAP DISC .000 .000 P-1 99.885 599,308.67 1.49 36959JU92 07/09/2003 599,308.67 .91 9,785,246.11 DREYFUS TREASURY CASH MGMT .000 .821 AAA 100.000 9,785,246.11 24.46 996085247 AAA 9,785,246.11 14.81 -------- ------- ----------------- --------- TOTAL CASH 6 CASH EQUIVALENTS .000 .023 39,989,407.72 100.00 39,989,407.72 60.52 FIXED INCOME SECURITIES 1,000,000.00 ASSOCIATES CORP NORTH AMER .000 5.595 AA1 103.656 1,041,290.00 3.97 046003KAG 5.800% 04/20/2004 DD 04/20/99 AA- 1,036,560.00 1.57 650,000.00 BELL ATLANTIC-NEW JERSEY INC .000 5.728 AA3 102.562 677,046.50 2.55 077858AA6 5.075% 02/01/2004 DD 02/01/94 A+ 666,653.00 1.01 300,000.00 COLGATE PALMOLIVE MTN TR 00058 .000 5.182 AA3 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 .000 5.271 AAA 102.445 1,399,963.50 5.29 31331H6G7 6.40% 01/23/2004 DD O1/01/1999 AAA 1,383,006.56 2.09 550,000.00 FEDERAL FARM CR BKS CONS MTN .000 4.950 AAA 101.012 565,229.50 2.12 3133IRC78 5.000% 10/02/2003 DD 10/02/98 AAA 555,568.15 .84 1,100,000.00 FEDERAL HOME LN MTG CORP DEB .000 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 .000 4.999 AAA 102.513 4,350,168.00 16.49 31359HEMI 5.125% 02/13/2004 DD 02/00/99 AAA 4,305,530.88 6.51 V • YLDANAL YIELD ANALYSIS PAGE s 3 OCSF07511102 2003/06/30 RUN DATE s 07/07/03 DISTRICT: LIQUID OPERATING RUN TIME s 09.56.47 c.-�===o=====c o==o-a=aa aaoa a-o=mac=o c=-=-a aaaaa.-oa-aaa_a-sc=-...-aaoaoac=ca.caaaaa`.aa.._..aa�aa...aao=ac=a=as...aaacaaaaaa.-saa....-._a=--= PAR VALUE YTH AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE 8 TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 1,340,000.00 GENERAL ELEC MTN 1 TR 00019 .000 8.017 AAA 102.281 1,380,508.20 5.25 36962FAUO STEP UP 10/30/2003 DD 11/02/92 AAA 1,370,565.40 2.07 250,000.00 GILLETTE CO NT .000 6.212 AA3 100.609 256,012.50 .96 375766AC6 6.250% 08/15/2003 DD 08/16/93 AA- 251,522.50 .38 2,000,000.00 LEHMAN BROS HLDGS INC .000 6.373 A2 103.953 2,091,180.00 7.96 524908B22 6.625% 04/01/2004 DD 03/26/99 A 2,079,060.00 3.15 500,000.00 PAINE WEBBER GROUP INC NTS .000 6.314 AA2 102.156 519,405.00 1.95 695629CE3 6.450% 12/01/2003 DD 22/01/98 AA+ 510,780.00 .77 656,000.00 PROCTER 6 GAMBLE CO NTS .000 5.205 AA3 100.859 672,279.56 2.53 742718BK4 5.250% 09/15/2003 DD 09/28/98 AA- 661,635.04 1.00 2,000,000.00 US BANCORP MTN fTR 00119 .000 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 5,800,000.00 U S TREASURY BONDS .000 11.411 AAA 104.063 6,251,984.38 23.12 91281ODGO 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 BUS 1.517 4.497 AAA 100.070 2,039,800.00 7.66 3133MG5J1 4.500% 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 .69 150,000.00 FEDERAL FARM CR SKS CONS MTN 1.664 6.501 AAA 100.751 155,796.00 .57 3133INW59 6.550% 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 3133M55B2 5.925$ 08/24/2003 DD 08/14/98 AAA 100,605.91 .25 1,000,000.00 MORGAN STANLEY DW MTN #TR00349 1.757 7.076 AA3 100.687 1,045,350.00 3.85 61745EQN4 7.12S% 08/15/2003 DD 08/10/00 AA- 1,006,870.00 1.52 YLDANAL YIELD ANALYSIS PAGE : 4 OCSF07511102 2003/06/30 RUN DATE t 07/07/03 DISTRICT: LIQUID OPERATING RUN TIME : 09.56.47 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ 8 TYPE SECURITY ID SECURITY DESCRIPTION HOOK YIELD S-P PRICE MARKET VALUE 8 TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 15,000.00 FEDERAL HOME LN BKS CONS BD 2.751 5.988 AAA 100.195 15,470.85 .05 3133M4VC4 6.000% 07/14/2003 DD 07/14/98 AAA 15,029.23 .02 -------- ------- ----------------- --------- TOTAL FIXED INCOME SECURITIES .097 6.390 26,559,702.99 100.00 26,097,963.13 39.47 -------- ------- ----------------- --------- TOTAL .043 2.844 66,549,110.71 100.00 66,087,370.85 100.00 r 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 YTH AT CURRENT MOODY MARKET TOTAL COST/ 8 TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE S TOTAL ----------------- ----------------------------- - ------ ------- -------- ------------ ---------- CASH 6 CASH EQUIVALENTS 1,600,000.00 FEDERAL HOME LN BK CONS DISC .000 .000 P-1 99.710 1,595,360.00 2.54 313384H25 MAT 07/11/2003 A-1+ 1,595,360.00 .46 24,600,000.00 FEDERAL HOME LN BK CONS DISC .000 .000 P-1 99.731 24,533,932.64 39.19 313384JEO MAT 07/16/2003 A-1+ 24,533,932.64 7.07 3,000,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.933 3,797,440.27 6.06 313384JP5 HAT 07/25/2003 A-1+ 3,797,440.27 1.09 1,300,000.00 FEDERAL HOME LN BK CONS DISC N .000 .000 P-1 99.712 1,296,253.83 2.07 313384KB4 MAT 08/06/2003 A-1+ 1,296,253.83 .37 250,000.00 FEDERAL HOME LN BK CONS DISC .000 .000 P-1 99.725 249,312.50 .39 313384LF4 HAT 09/03/2003 A-1+ 249,312.50 .07 2,000,000.00 FEDERAL ROME LN BK CONS DISC N .000 .000 P-1 99.433 1,988,663.33 3.17 313384HY1 HAT 11/07/2003 A-1+ 1,988,663.33 .57 24,600,000.00 FEDERAL HOME LN HTG CORP DISC .000 .000 P-1 99.668 24,519,273.34 39.16 313396JD6 HAT 07/15/2003 A-1+ 24,518,273.34 7.07 2,200,000.00 FEDERAL HOME LN MTG CORP DISC .000 .000 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 .000 .000 P-1 99.554 1,294,204.89 2.06 3133961,04 MAT 09/12/2003 A-1+ 1,294,204.89 .37 250,000.00 FEDERAL NATL MTG ASSN DISCOUNT .000 .000 P-1 99.649 249,122.50 .39 31358ONJI MAT 09/30/2003 A-1+ 249,122.50 .07 881,875.02 DREYFUS TREASURY CASH MGMT .000 .821 AAA 100.000 861,975.02 1.40 996085247 AAA 881,875.02 .25 ---- -- ------- ----------------- --------- TOTAL CASH 6 CASH EQUIVALENTS .000 .002 62,595,601.96 100.00 62,595,601.96 10.02 FIXED INCOME SECURITIES 752,000.00 AIG SUNAMERICA GLO BDS USD .000 5.201 112.474 826,199.84 .29 NA2789454 5.850% 01-AUG-2008 845,804.48 .24 YLDANAL YIELD ANALYSIS PAGE t 6 OCSF07522202 2003/06/30 RUN DATE t 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME t 09.56.47 --------------------------------------------------------^-----^-------3==�==___=====a=aca=aaa==a�a=aaxa==so==========coc.-xc.^a PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ 8 TYPE ' SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 15,000,000.00 COMMIT TO PUR FNHA SF MTG .000 4.840 AAA 103.313 15,488,125.00 5.45 01F050470 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 .000 5.779 AAA 103.828 5,200,000.00 1.82 0IF060683 6.000% 08/01/2033 DD 00/01/03 AAA 5,191,406.00 1.50 900,000.00 BEAR STEARNS MTN 1 TR 00459 .000 1.578 A2 100.156 999,406.00 .31 073928VC4 VAR RT 12/01/2003 DD 08/17/01 A 901,404.00 .26 1,500,000.00 CIT GROUP INC NEW SR NT .000 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 5,000,000.00 CITIGROUP INC GLOBAL SUB NT .000 5.106 AA2 110.171 5,333,600.00 1.93 172967BP5 5.625% 08/27/2012 DD 08/26/02 A+ 5,506,550.00 1.59 35,770.02 DISTRIBUTION FINL 99-1 CL A4 .000 5.828 100.208 36,518.96 .61 25475MAD6 5.840% 10/17/2011 DD 03/18/99 35,844.42 .01 146,834.56 FHLMC GROUP #G4-0353 .000 7.305 AAA 102.675 150,551.31 .05 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 .000 6.517 AAA 109.330 7,997,625.00 2.88 3133MAUN7 7.125% 02/15/2005 DD 02/08/00 AAA 8,199,764.25 2.36 92,630.25 FHLHC GROUP 178-6064 .000 3.726 AAA 103.229 90,372.39 .03 31348SWZ3 6.384% 01/01/2028 DD 12/01/97 AAA 95,620.93 .03 11,350,000.00 FEDERAL NATL MTG ASSN DEBS .000 4.781 AAA 109.804 11,521,271.50 4.38 31359MJR2 5.250% 06/15/2006 DD 06/22/01 AAA 12,462,714.28 3.59 314,139.83 FNMA POOL #0323980 .000 5.728 AAA 104.750 327,981.62 .11 31374T2H0 6.000% 04/01/2014 DD 09/01/99 AAA 329,061.47 .09 116,219.83 FNMA POOL #0456482 .000 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 40509649 .000 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 .000 5.728 AAA 104.750 264,321.67 .09 31384VZQB 6.000% 06/01/2015 DD 07/01/00 AAA 265,191.93 .08 5,600,088.97 FNMA POOL #0535672 .000 5.728 AAA 104.750 5,846,042.89 2.06 31384WCH1 6.000% 01/01/2016 DD 12/01/00 AAA 5,866,093.20 1.69 N YLDANAL YIELD ANALYSIS PAGE t 7 OCSF07522202 2003/06/30 RUN DATE t 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME t 09.56.47 --r.-.�--�.--.�- PAR VALUE YTH AT CURRENT MOODY MARKET TOTAL COST/ 8 TYPE SECURITY ID SECURITY DESCRIPTION BOOR YIELD S-P PRICE MARKET VALUE 9 TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 1,966,081.19 FNMA POOL #0545296 .000 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 #0545580 .000 5.735 AAA 104.625 169,342.81 .05 31385JCR7 6.000% 03/01/2017 DD 03/01/02 AAA 169,697.62 .05 269,000.24 FNHA POOL #0555101 .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 #0576386 .000 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 #0576739 .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 #0580880 .000 5.735 AAA 104.625 342,904.89 .12 31397DJ91 6.000% 05/01/2016 DD 05/01/01 AAA 343,623.34 .10 249,713.37 FNMA POOL #0594002 .000 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 FNHA POOL #0597376 .000 5.719 AAA 104.912 304,092.19 .10 31307XT96 6.000% 09/01/2016 DD 08/01/01 AAA 305,566.69 .09 284,594.36 FNMA POOL #0605259 .000 5.738 AAA 104.563 297,134.30 .10 31388HMG1 6.000% 09/01/2016 DD 09/01/01 AAA 297,578.98 .09 190,957.05 FNMA POOL #0608366 .000 5.719 AAA 204.912 199,371.09 .07 31388LZ78 6.000% 10/01/2016 DD 09/01/01 AAA 200,337.82 .06 174,758.47 FNMA POOL 0616734 .000 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 #0630612 .000 5.752 AAA 104.306 360,559.45 .12 31389NYH2 6.000% 02/01/2017 DD 02/01/02 AAA 360,214.35 .10 1,209,353.87 FNMA POOL #0632376 .000 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 .37 113,752.78 FNMA POOL #0653116 .000 5.700 AAA 105.262 745,202.51 .26 31390OSDS 6.000% 07/01/2017 DD 07/01/02 AAA 751,314.02 .22 310,959.00 FNMA POOL #0673280 .000 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 t 8 OCSF07522202 2003/06/30 RUN DATE t 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME t 09.56.47 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE 8 TOTAL ----------------- ----- ----------- ------- ------- ------- -------- ------------ ---------- 139,920.81 FNMA POOL #0698939 .000 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 .000 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 GNMA POOL #0596612 .000 6.172 AAA 105.316 675,077.10 .23 36200BYH4 6.500% 09/15/2032 DD 09/01/02 AAA 677,413.91 .20 2,030,307.68 GNMA POOL #0569358 .000 6.196 AAA 104.910 2,077,893.01 .74 362000QK3 6.500% 04/15/2032 DD 04/01/02 AAA 2,129,994.53 .61 88,455.91 GNMA POOL #0569685 .000 6.172 AAA 105.316 92,037.24 .03 3620OQ2S2 6.500% 02/15/2032 DD 02/01/02 AAA 93,158.59 .03 924,612.54 GNMA POOL #0574323 .000 6.170 AAA 105.348 970,409.75 .34 36200WAY7 6.500% 12/15/2031 DD 12/01/01 AAA 974,057.67 .28 101,103.10 GNMA POOL #0575364 .000 6.170 AAA 105.348 106,110.86 .03 36200XFD6 6.500% 11/15/2031 DD 11/01/01 AAA 106,S09.75 .03 150,533.65 GNHA POOL #0585263 .000 6.196 AAA 104.910 257,989.77 .05 36201KFC5 6.500% 08/15/2032 DD 08/01/02 AAA 157,924.76 .05 35,137.40 GNHA POOL 10587117 .000 6.172 AAA 105.316 36,877.80 .01 36201MG22 6.500% 06/15/2032 DD 06/01/02 AAA 37,005.45 .01 114,081.20 GNMA POOL #0587439 .000 6.172 AAA 105.316 119,731.78 .04 3620INS45 6.500% 11/15/2032 DD 12/01/02 AAA 120,146.22 .03 22,606.46 GNMA POOL #0421389 .000 6.154 AAA 105.629 23,726.19 .00 36206UC23 6.500% 04/15/2026 DD 04/01/96 AAA 23,878.96 .01 32,277.78 GNHA POOL #0449851 .000 6.194 AAA 104.932 33,876.54 .01 36209FWLO 6.500% 01/15/2028 DD 01/01/98 AAA 33,969.75 .01 100,137.41 GNHA POOL #0466845 .000 6.161 AAA 205.504 105,097.34 .03 36209BTA6 6.500% 06/15/2028 DD 06/01/98 AAA 105,648.88 .03 601,928.55 GNMA POOL #0468052 .000 6.161 AAA 105.504 715,705.32 .25 36209CSM4 6.500% 07/15/2028 DD 07/01/98 AAA 719,461.28 .21 299,916.82 GNMA POOL 00476041 .000 6.161 AAA 105.504 314,303.45 .11 36209MZE7 6.500% 06/15/2028 DD 06/01/98 AAA 316,423.96 .09 YLDANAL YIELD ANALYSIS PAGE i 9 OCSF07522202 2003/06/30 RUN DATE t 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TINE s 09.56.47 PAR VALUE YTM AT CURRENT MOODY MARKET TOTAL COST/ 8 TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE 8 TOTAL ----------------- ----------------------------- -- ------- ------- -------- ------------ ---------- 252,693.04 GNMA POOL #0478626 .000 6.161 AAA 105.504 265,024.00 .09 362090VT9 6.500% 01/15/2029 DD 01/01/99 AAA 266,812.05 .08 324,239.27 GNNA POOL #0480598 .000 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 #0485527 .000 6.170 AAA 105.348 856,306.79 .30 36209YLGI 6.500% 06/15/2031 DD 06/01/01 AAA 859,606.08 .25 942,672.13 GNMA POOL #0485610 .000 6.170 AAA 105.348 989,363.86 .34 36209YU38 6.500% 07/15/2031 DD 07/01/01 AAA 993,083.03 .29 182,912.61 GNMA POOL #0485662 .000 6.170 AAA 105.348 191,972.50 .06 36209YR86 6.500% 08/15/2031 DD 08/01/01 AAA 192,694.15 .06 173,770.23 GNMA POOL #0485703 .000 6.170 AAA 105.348 182,377.29 .06 36209YRY6 6.500% 08/15/2031 DD 08/01/01 AAA 183,062.87 .05 20,064.08 GNMA POOL #0512235 .000 6.165 AAA 105.441 21,057.88 .00 36211GBC6 6.500% 11/15/2029 DD 11/01/99 AAA 21,155.85 .01 314,020.83 GNMA POOL #0514326 .000 6.165 AAA 105.441 329,084.02 .11 362113LF2 6.500% 07/15/2029 DD 07/01/99 AAA 331,107.99 .10 95,473.62 GNMA POOL #0530053 .000 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 #0530290 .000 6.170 AAA 105.348 72,744.76 .02 36212DC31 6.500% 03/15/2031 DD 04/02/01 AAA 73,127.09 .02 167,438.02 GNMA POOL #0537885 .000 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 .000 6.170 AAA 105.348 26,186.21 .00 36212YGV9 6.500% 04/15/2031 DD 04/01/01 AAA 26,284.65 .01 289,700.52 GNMA POOL #0547715 .000 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 #0552322 .000 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 #0552466 .000 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 s 10 OCSF07522202 2003/06/30 RUN DATE s 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME s 09.56.47 PAR VALUE YT'H AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOR YIELD S-P PRICE MARKET VALUE % TOTAL ----------------- ----------------------------- -- --- ------- ------- -------- ------------ ---------- 798,660.00 GNMA POOL #0552659 .000 6.172 AAA 105.316 838,218.71 .29 36213ESU6 6.500% 07/15/2032 DD 07/01/02 AAA 841,120.12 .24 008,303.23 GNMA POOL #0561017 .000 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 GNHA II POOL #0080395 .000 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 4080408X .000 3.397 AAA 103.032 3,188,323.74 1.16 36225CN28 6.500% 05/20/2030 DD 05/01/00 AAA 3,318,692.21 .96 3,000,000.00 GTE NORTH INC DEB SER A .000 5.852 Al 102.531 3,063,150.00 1.08 362337AD9 6.000% 01/15/2004 DD 01/15/94 A+ 3,075,930.00 .09 5,000,000.00 GENERAL ELEC CAP MTN 1TR 00575 .000 5.032 AAA 108.312 5,203,500.00 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 #00615 .000 1.630 A3 99.964 3,998,440.00 1.40 37042WESO VAR RT 00/04/2003 DD 08/03/01 BBB 3,999,360.00 1.15 3,000,000.00 GENERAL MTRS ACCEP CORP SR NT .000 5.094 A3 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 HT .000 3.926 AA3 105.078 3,030,030.00 1.10 38141GCSI 4.125% 01/15/2008 DD 01/13/03 A+ 3,152,340.00 .91 1,635,000.00 HOUSEHOLD FIN CORP NT .000 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 i CO SUB NT .000 5.259 A2 109.328 3,127,260.00 1.15 46625HAT7 5.750% 01/02/2013 DD 11/25/02 A 3,279,840.00 .95 3,200,000.00 MORGAN STANLEY NT .000 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 .000 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 5,000,000.00 PHILIP MORRIS COS INC NTS .000 7.246 BAA2 103.500 5,263,000.00 1.82 718154CH8 7.500% 04/01/2004 DD 04/01/97 BBB 5,175,000.00 1.49 3,679,356.91 SBA GTD DEV PARTN 2001-20C 1 .000 5.666 AAA 111.890 3,679,356.91 1.44 83162CLJO 6.340% 03/01/2021 AAA 4,116,832.45 1.19 YLDANAL YIELD ANALYSIS PAGE : 11 OCSF07522202 2003/06/30 RUN DATE t 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME t 09.56.47 PAR VALUE YT'H AT CURRENT MOODY MARKET TOTAL COST/ 8 TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET VALUE 8 TOTAL ----------------- ----------------------------- ------- ------- ------- -------- ------------ ---------- 2,520,466.09 SBA GTD PARTN CTFS SBIC-PS 01 .000 6.056 AAA 109.640 2,520,466.09 .97 831641DD4 6.640% 02/10/2011 DD 02/21/01 NR 2,763,439.02 .80 1,600,000.00 UNITED AIRLS PASSTHRU 01-1 C .000 45.540 B3 15.000 1,600,000.00 .08 909317BC2 6.831% 03/01/2010 DD 08/22/01 A- 240,000.00 .07 20,000,000.00 U S TREASURY NOTES .000 5.433 AAA 115.031 22,620,312.50 8.09 9128272JO 06.250% 02/15/2007 DD 02/15/97 AAA 23,006,300.00 6.63 57,100,000.00 U S TREASURY NOTES .000 5.223 AAA 110.094 62,782,901.47 22.11 9128276H7 05.750% 11/15/2005 DD 11/15/00 AAA 62,863,674.00 18.12 3,000,000.00 VERI20N GLOBAL FDG CORP GLOBAL .000 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 6 PWR 01 SER A .000 5.265 A3 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 5.752 1.391 A3 99.953 3,918,768.50 1.38 370425QVS VAR RT 08/18/2003 DD 00/17/98 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 31359MFH1 7.125% 02/15/2005 DD 02/14/00 AAA 16,955,203.55 4.89 1,307,944.14 FHLMC MULTICLASS MTG SER E3 A 6.316 4.050 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 6.3I0 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 6.389 5.705 AAA 105.176 12,472.39 .00 36210SPAO 6.000% 04/15/2029 DD 04/01/99 AAA 13,819.71 .00 46,987.95 GNMA POOL #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 6.399 5.705 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 00499153 6.389 5.705 AAA 105.176 16,450.93 .00 36210OOE5 6.000% 02/15/2029 DD 02/01/99 AAA 18,228.05 .01 YLDANAI. YIELD ANALYSIS PAGE : 12 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 HOOK YIELD S-P PRICE MARKET VALUE 8 TOTAL ----------------- ----------------------------- -- ------- ------- -------- ------------ ---------- 591,299.35 GNMA POOL #0496461 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 GNHA POOL #0492103 6.390 5.705 AAA 105.176 147,555.79 .05 36210FRY4 6.000% 01/15/2029 DD 01/01/99 AAA 163,495.45 .05 15,421.85 GNMA POOL #0486720 6.390 5.701 AAA 105.238 14,638.72 .00 36210AVM6 6.000% 12/15/2028 DD 12/01/98 AAA 16,229.69 .00 30,334.10 GNMA POOL #0497343 6.390 5.701 AAA 105.238 28,793.70 .01 362IONP45 6.000% 12/15/2029 DD 12/01/98 AAA 31,923.09 .01 23,384.32 GNMA POOL #0469688 6.391 5.701 AAA 105.238 22,196.84 .00 36209EXRO 6.000% 11/15/2028 DD 11/01/98 AAA 24,609.26 .01 25,262.07 GNMA POOL 10467279 6.391 5.701 AAA 105.238 23,979.23 .00 36209CCQ7 6.000% 10/15/2028 DD 10/01/98 AAA 26,585.37 .01 53,096.22 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 #0467296 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 #0465555 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 #0483452 6.392 5.701 AAA 105.238 21,466.12 .00 36209WBV3 6.000% 09/15/2028 DD 09/01/98 AAA 23,799.12 .01 671,408.54 GNMA POOL #0465546 6.392 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 #0438057 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 #0468330 6.393 5.701 AAA 105.238 27,997.58 .01 36209DHF4 6.000% 05/15/2028 DD 05/01/98 AAA 31,040.45 .01 645,515.68 FHLMC MULTICLASS CTF Tll A6 6.496 6.472 AAA 100.429 645,802.29 .22 3133TDPV2 6.500% 09/25/2018 AAA 648,204.94 .19 . A YLDANAL YIELD ANALYSIS PAGE s 13 OCSF07522202 2003/06/30 RUN DATE 07/07/03 DISTRICT: LONG-TERM OPERATING RUN TIME s 09.56.47 --___ a--.:-^--xaaaoa-=aa=-=aa=aaaoaaao=aaaaaaaaaaaao=c PAR VALUE YT14 AT CURRENT MOODY MARKET TOTAL COST/ % TYPE SECURITY ID SECURITY DESCRIPTION BOOK YIELD S-P PRICE MARKET 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 i080088M 6.705 4.243 AAA 103.107 434,977.04 .15 36225CC20 7.375% 06/20/2027 DD 06/01/97 AAA 438,892.77 .13 2,000,000.00 MARSH 6 MCLENNAN COS INC SR NT 6.717 6.326 A2 104.890 1,992,280.00 .73 57174BABO 6.625% 06/15/2004 DD 06/14/99 AA- 2,097,800.00 .60 3,000,000.00 FORD MTR CR CO GLOBAL LANDMARK 6.739 6.453 A3 103.828 2,995,080.00 1.09 345397SJ3 6.700% 07/16/2004 DD 07/16/99 BBB 3,114,840.00 .90 2,500,000.00 COUNTRYWIDE HOME LNS INC NT 6.866 6.512 A3 105.187 2,498,400.00 .92 22237UAB8 6.850% 06/15/2004 DD 06/24/99 A 2,629,675.00 .76 304,823.38 GNMA 1I POOL #0080023 6.992 5.423 AAA 103.734 309,872.02 .11 36225CAZ9 VAR RT 12/20/2026 DD 12/01/96 AAA 316,206.90 .09 2,100,000.00 FEDERAL HATL MTG ASSN DEBS 7.113 5.530 AAA 119.799 2,030,133.00 .98 31359MEY5 6.625% 09/15/2009 DD 09/01/99 AAA 2,515,772.44 .73 1,000,000.00 FORD MOTOR CR CO NT 7.582 6.445 A3 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 /000-11150 7.684 6.957 AAA 107.813 929,814.95 .36 302998GE3 7.500% 12/01/2030 DD 10/21/99 AAA 1,024,712.20 .30 3,000,000.00 PACIFICORP SECD MTN }TR 00115 7.709 6.817 A3 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 .535 5.089 337,529,991.50 100.00 346,870,650.90 100.00 ===aaaaa- I! i� 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 Rate Yield* Balance June 1,2003 $9,367,427 $9,367,427 $9,367,427 1.769 1.769 Withdrawals: 6/2/2003 (400,000) (400,000) (400,000) 1.769 1.769 6/5/2003 (8,967,000) (8,967,000) (8,967,000) 1.769 1.769 Total Withdrawls (9,367,000) (9,367,000) (9,367,000) 1.769 1.769 Balance June 30,2003 $427 $427 $427 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. FA H R COMMITTEE Meeting Date To Bd.of Dir. 8/13/03 8/27/03 AGENDA REPORT Item Number I Item Number FAHR03-67 I 13 e Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Michael D. White, Controller SUBJECT: CONSIDERATION OF INTEREST RATE EXCHANGE POLICY GENERAL MANAGER'S RECOMMENDATION Approve an Interest Rate Exchange Agreement Policy relating to long-term debt financing by the District. SUMMARY The rating agencies look favorably upon state and local governments that have an established comprehensive Interest Rate Exchange Agreement Policy. Staff has developed the attached Interest Rate Exchange Policy in accordance with the standards developed and recommended by the Government Finance Officers Association and recommendations provided by the District's independent financial advisors, Public Resources Advisory Group. PRIOR COMMITTEE/BOARD ACTIONS: None PROJECT/CONTRACT COST SUMMARY NA BUDGET IMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. 0 Not applicable (information item) ADDITIONAL INFORMATION None. ALTERNATIVES N;'A CEQA FINDINGS NA ATTACHMENTS 1. Proposed policy on Interest Rate Exchange Agreement Policy. G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0801tem 13(e),Interest Rate Exchange Policy.doc Page 1 FINANCE DEPARTMENT POLICY AND PROCEDURE b b Subject: Interest Rate Exchange Index: Finance Administration Agreement Policy Number: 201-3-2 Effective Date: July 9, 2003 Prepared by: Finance Administration Supersedes: N/A Approved By: FAHR Committee 1.0 PURPOSE: The District's Interest Rate Exchange Agreement Policy provides guidelines for the use of hedging products including swaps, caps, floors, collars, options, and other similar financial instruments (collectively, "Hedging Products") in connection with the financial exposure of the District, including interest rate exposure. While the use of Hedging Products can reduce the District's exposure to certain risks, prudent monitoring of such instruments is necessary to preserve the District's credit standing and to allow for financial flexibility. As part of the ongoing responsibility of managing the District's finances, the Director of Finance will use these guidelines in determining the appropriate uses for financial Hedging Products and establishing goals for their use. In evaluating a particular transaction involving the use of financial Hedging Products, the Director of Finance shall review the short-term and long-term implications associated with entering into such agreements, including costs, risks, historical trends, capacity limitations, future flexibility, and other similar considerations. The purposes for which the District will consider the use of these products are: 1.1 To prudently reduce exposure to changes in financial valuations in the context of a particular financing, or the overall asset/liability management of the District; or 1.2 To achieve lower net costs to the District. 1.3 Hedging Products shall not be used for speculative purposes. Page 1 of 10 1 2.0 ORGANIZATIONS AFFECTED: General Manager's Office, Finance Department, General Counsel, bond rating agencies, financial advisors, bond underwriters, bond counsel, and external independent auditors. 3.0 REFERENCES: 3.1 Government Finance Officers Association publication"A Guide for Preparing a Debt Policy". 3.2 "Moody's on Municipals- An Introduction to Issuing Debt" by Moody's Investor Services. 3.3 Handbook for Muni-Bond Issuers by Joe Mysak, published by Bloomberg Professional Library. 3.4 Finance Department Policy and Procedure #201-3-1: Debt Policy. 4.0 POLICY: 4.1 Forms and Agreements- 4.1.1 To the extent possible, the Hedging Product agreements entered into by the District shall contain the terms and conditions set forth in the International Swap and Derivatives Association, Inc. ("ISDA") Master Agreement, including any schedules and confirmation. 4.1.1.1 The schedule should be modified to reflect specific legal requirements and business terms desired by the District. 4.1.1.2 The Director of Finance shall consider whether to include provisions that permit the District or the counterparty to assign its rights and obligations under an agreement and to optionally terminate such agreement at its market value at any time. 4.1.2 The District will present the form of agreements to the Board of Directors and request authorization to enter into such agreements subject to modifications determined by the Director of Finance to be in the best interests of the District. Page 2 of 10 4.2 Procurement- 4.2.1 It shall be the policy of the District to solicit and procure Hedging Products by competitive bidding whenever feasible. 4.2.2 The Director of Finance shall determine which parties it will allow to participate in a competitive transaction but such parties must conform to the minimum credit standards outlined in this Policy. 4.2.3 Notwithstanding the above, the Director of Finance may procure Hedging Products by negotiated methods if it is determined that due to the size or complexity of a particular instrument competitive bidding is undesirable, impractical, or impossible and a negotiated transaction would provide the most value to the District. 4.2.3.1 In such a situation, the Director of Finance should attempt to price the hedge based upon an agreed-to methodology relying on available pricing information to obtain inputs to a mathematical model. 4.2.3.2 If appropriate, the Director of Finance should use an independent financial advisory firm to assist in the price negotiations. 4.2.4 Regardless of the method of procurement, the Director of Finance shall obtain an independent finding that the terms and conditions of any Hedging Product reflect a fair market value of such agreement as of the date of its execution. 4.3 Risk Exposure- 4.3.1 Before entering into a Hedging Product, the Director of Finance shall evaluate all the risks inherent in the transaction. 4.3.1.1 Counterparty Risk: The Director of Finance shall endeavor to minimize counterparty risk by establishing strong minimum counterparty credit standards and diversifying the District's exposure to counterparties. To that end, before entering into a transaction, the District should determine its existing exposure to the relevant counterparty or counterparties and determine how the proposed transaction would affect the exposure. The exposure should not be measured solely in terms of amount or duration of the Hedging Product, but rather how changes in market conditions would affect the District's exposure Page 3 of 10 0 ("Value at Risk"). The Value at Risk should be based on all outstanding Hedging Product agreements with each counterparty. 4.3.1.2 Termination risk: The District may be required to make a large payment to the counterparty if the Hedging Product is terminated prior to its scheduled maturity pursuant to its terms. The termination risk can be minimized through selection of counterparties with strong creditworthiness, requiring the counterparty to post collateral in excess of the market value of the agreement, limiting the circumstances where a payment may be required, and by permitting the assignment of the agreement to a creditworthy entity in lieu of termination. 4.3.1 .3 Rollover risk: The potential need to find a replacement counterparty as part of the overall plan of finance if the duration of the Hedging Product does not match the expected duration of the underlying financing to be hedged. Rollover risk can be minimized during the initial execution of the plan of finance by matching the duration of any hedge to the financing. 4.3.1.4 Basis risk:The potential mis-match between the payments, typically based on an index, the District is receiving as part of a Hedging Product and the actual payments made by the District. The Director of Finance will evaluate different indices as part of its analysis of a Hedging Product and identify the amount of basis risk that may result from various indices. 4.3.1 .5 Event risk: Results from the impact that an unexpected event (i.e. — counterparty actions as a result of certain events, changes in Federal and State income tax codes on interest rates, and other possible events that affect a Hedging Product) has on a hedge established by the District. The Director of Finance will evaluate the potential impact of changes in conditions that could affect the economics of a hedge; for example, how changes in marginal tax brackets affect the economics of using a taxable LIBOR-based interest rate to hedge tax-exempt variable rate exposure. 4.3.2 Identification of the risks and discussion of the means, if any, employed to mitigate the risks will be contained in the Director of Page 4 of 10 Finance's report addressed to the Board of Directors recommending approval of the Hedging Product agreements. 4.4 Counterparty Credit Standards- 4.4.1 Certain risk reduction products result in a continuing exposure to the creditworthiness of financial institutions that serve as the District's counterpartis on such transactions.To protect the District's interests in the event of a counterparty credit problem, the Director of Finance will recommend entering into a Hedging Product with a counterparty having capitalization of at least $200 million and only if: 4.4.1 .1 At least two of the counterparty's credit ratings are at least "AaY or "AA-", or equivalent by any two of the nationally recognized rating agencies (i.e. Moody's, Standard and Poor's, or Fitch); or 4.4.1 .2 The payment obligations of the counterparty shall be unconditionally guaranteed by an entity with such minimum credit ratings. 4.5 Collate ralization On Downgrade- 4.5.1 Should the rating (a) of the counterparty, if its payment obligations are not unconditionally guaranteed by another entity, or (b) of the entity unconditionally guaranteeing its payment obligations, if so secured, not satisfy the requirements set forth in "COUNTERPARTY CREDIT STANDARDS"above, then the obligations of such counterparty shall be collateralized with securities acceptable to the Director of Finance at thresholds with minimum transfer amounts as set forth in the Hedging Product agreement. 4.6 Termination- 4.6.1 A termination payment to or from the District may be required in the event of termination of a Hedging Product due to a default of either the District or the counterparty, certain additional termination events or optional termination by the District. 4.6.2 In the event of default by a counterparty whereby the District would be required to make a termination payment due to the current termination value of a Hedging Product, the Director of Finance will proceed as follows: Page 5 of 10 4.6.2.1 In order to mitigate the financial impact of making such payment at the time such payment is due, the Director of Finance will seek to replace the terms of the terminated transaction with another counterparty. The District will also have the option to have the defaulting counterparty seek to reassign the agreement to a new counterparty that meets all District criteria. As long as the terms of the replacement Hedging Product agreement are substantially the same as the original agreement (i.e., amount/volume, interest rate, maturity date), the Director of Finance is authorized to find a replacement counterparty without the approval of the Board of Directors. 4.6.2.2 If a satisfactory agreement with a new or replacement counterparty is reached, the new counterparty will make an upfront payment to the District in an amount that should nearly offset the payment obligation of the District to the original counterparty. 4.6.2.3 If a satisfactory agreement with a replacement counterparty is not reached, the District will be required to make a termination payment to the original defaulting counterparty. 4.6.3 The Director of Finance will promptly report to the Board of Directors upon the occurrence of a termination event and the actions taken in response. 4.7 Legality- 4.7.1 In conjunction with any hedges, the District must obtain an opinion reasonably acceptable to the market from a regionally or nationally recognized law firm that such Hedging Product is a legal, valid, and binding obligation of the District. 4.8 Responsibilities- 4.8.1 The Director of Finance is responsible for determining the appropriate uses for risk reduction products in conjunction with the District's financings and programmatic needs and making recommendations to the Board of Directors. 4.8.2 The Controller is responsible for reflecting the use of Hedging Products and other derivative financing transactions on the District's financial statements in accordance with generally accepted accounting principles. Page 6 of 10 4.9 Monitoring and Reporting- 4.9.1 The Director of Finance shall issue a report to the Finance, Administration and Human Resources Committee in each quarter which the District enters into or continues to be a party to a Hedging Product, which shall include, but not be limited to, the following information, to the extent applicable: 4.9.1.1 Highlights of all material changes to Hedging Product agreements including counterparty downgrades and/or terminations; 4.9.1.2 A summary of any new Hedging Products entered into by the District since the last report; 4.9.1.3 A summary of any planned Hedging Product transactions and the impact of such transactions on the District; a description of each outstanding Hedging Product agreement, including a summary of its terms and conditions, the notional amount, volume, rates, maturity, the estimated market value of each agreement,the method of procurement (competitive or negotiated), and the full name, description and credit ratings of the agreement's counterparty and if necessary, its applicable guarantor; 4.9.1.4 Any amounts which were required to be paid and received, and any amounts which actually were paid and received under each outstanding Hedging Product; 4.9.1.5 Any credit enhancement, liquidity facility or reserves associated therewith including an accounting of all costs and expenses incurred, whether or not in conjunction with the procurement of credit enhancement or liquidity facilities under each outstanding Hedging Product; and 4.9.1.6 An assessment of the counterparty risk, termination risk, and other risks associated therewith, which shall include the value of the collateral posted by counterparties and the District, the aggregate marked-to-market value for each counterparty and relative exposure compared to other counterparties, and a calculation of the District's Value at Risk for each counterparty. Page 7 of 10 4.9.2 Such report shall also include a copy of this Policy in the quarter after it is adopted or subsequently modified. 5.0 DEFINITIONS: 5.1 AMORTIZATION RISK - Represents the cost to the issuer of servicing debt or honoring swap payments due to a mismatch between bonds and the notional amount of swap outstanding. Amortization risk is characteristic of swaps used to hedge variable rate bonds issued to finance amortizing assets, such as mortgages. Amortization risk occurs to the extent bonds and swap notional amounts become mismatched over the life of a transaction. 5.2 BASIS RISK- Refers to a mismatch between the interest rate received from the swap contract and the interest actually owed on the issuer's bonds. 5.3 CALL OPTION -A contract through which the owner is given the right but is not obligated to purchase the underlying security or commodity at a fixed price within a limited time frame. 5.4 CAP - A ceiling, or maximum, for the interest rate which would be paid. 5.5 COLLAR -The combination of owning a Cap and selling a Floor. Generally, it is structured so that the net cost of the collar is zero or close to zero. This means that the expense for the long cap premium is offset by the credit received for the floor premium. 5.6 COUNTER PARTY RISK - The risk that the swap counterparty will not fulfill its obligation to honor its obligations as specified under the contract. 5.7 DERIVATIVE - A financial product which is based upon another product. Generally, derivatives are risk management tools. 5.8 FLOOR - A lower limit on the interest rate which would be paid. 5.9 INTEREST RATE RISK - The risk associated with changes in general interest rate levels or Yield Curves (See Yield Curves). 5.10 INTEREST RATE SWAP -The contract whereby one party typically agrees to exchange a floating rate for a fixed coupon rate. An essential characteristic of swaps is the swapping of cashflows and not principal amounts. 5.11 ISDA-The International Swaps and Derivatives Association, a global trade association representing participants in the derivatives industry. See a blank Page 8 of 10 b copy of the ISDA Master Agreement used in developing Hedging Product agreements within Appendix A. 5.12 LIBOR - London InterBank Offered Rate is the average of rate quotes paid on deposits from five major banks; Bank of America, Barclays, Bank of Tokyo, Deutsche Bank, and Swiss Bank. LIBOR is quoted daily in the Wall Street Journal's Money Rates and compares closely to the 1-year Treasury Security index. LIBOR's cost of money is a widely monitored international interest rate indicator. LIBOR is currently being used by both Fannie Mae and Freddie Mac as an index on the loans they purchase. 5.13 NOTIONAL AMOUNT - The stipulated principal amount for a swap transaction. There is no transfer of ownership in the principal for a swap; but there is an exchange in the cash flows for the designated interest coupons. 5.14 OPTION -A derivative contract. There are two primary types of options. (See Put and Call). An option is considered a wasting asset because it has a stipulated life to expiration and may expire worthless. Hence, the premium could be wasted. 5.15 PUT OPTION -A contract which grants to the purchaser the right but not the obligation to offer or sell an underlying security. 5.16 ROLLOVER RISK—The risk that the swap contract is not coterminous with the related bonds and might be renewed in adverse conditions. 5.17 SWAP - A customized financial transaction between two or more counterparties who agree to make periodic payments to one another. Swaps cover interest rate, equity, commodity and currency products. They can be simple floating for fixed exchanges or complex hybrid products with multiple option features. 5.18 TAX EVENT RISK - Issuers which issue tax-exempt variable rate bonds inherently accept risk stemming from changes in marginal income tax rates. This is due to the tax code's impact on the trading value of tax-exempt bonds. This risk is also a form of basis risk under swap contracts. 5.19 TERMINATION RISK - The risk that the swap could be terminated by the counterparty due to any of several events, which may include issuer or counterparty ratings downgrade, covenant violation by either party, bankruptcy of either party, swap payment default by either party, and default events as defined in the issuer's bond indenture. The events of default and termination, which could lead to involuntary termination of the contract should include failure to pay, bankruptcy, merger without assumption of obligations and Illegality. Page 9 of 10 I 5.20 YIELD CURVE - Refers to the graphical or tabular representation of interest rates across different maturities. The presentation often starts with the shortest term rates and extends towards longer maturities. It reflects the market's views about implied inflation/deflation, liquidity, economic and financial activity and other market forces. Page 10 of 10 d XIONDddd (Local Currency—Single Jurisdiction) ISDA@ International Swap Dealers Association.Inc. MASTER AGREEMENT dated as of[ ],2003 [PARTY A] ("Party A") and [PARTY B] ("Party B") have entered and/or anticipate entering into one or more transactions (each a "Transaction") that are or will be governed by this Master Agreement, which includes the schedule (the "Schedule"), and the documents and other confirming evidence(each a"Confirmation")exchanged between the parties confirming those Transactions. Accordingly,the parties agree as follows:- 1. Interpretation (a) Definitions. The terms defined in Section 12 and in the Schedule will have the meanings therein specified for the purpose of this Master Agreement. (b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement(including the Schedule),such Confirmation will prevail for the purpose of the relevant Transaction. (c) Single Agreement. All Transactions are entered into in reliance on the fact that this Maser Agreement and all Confirmations form a single agreement between the parties(collectively referred to as this"Agreement"),and the parties would not otherwise enter into any Transactions. 2. Obligations (a) General Conditions. (i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement. (ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement. Copyright®1992 by International Swap Dealers Association,Inc. DOCSNY I:948479.1 40786-108 TNG (iii) Each obligation of each party under Section 2(a)(i)is subject to(1)the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement. (b) Change of Account. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change. (c) Netting. If on any date amounts would otherwise be payable:— (i) in the same currency;and (ii) in respect of the same Transaction, by each party to the other,then, on such date,each party's obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount. The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of all amounts payable on the same date in the same currency in respect of such Transactions,regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being subject to the election, together with the starting date (in which case subparagraph (ii)above will not,or will cease to, apply to such Transactions from such date). This election may be made separately for different groups of Transactions and will apply separately to each pairing of branches or offices through which the parties make and receive payments or deliveries. (d) Default Interest;Other Amounts. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before as well as after judgment)on the overdue amount to the other party on demand in the same currency as such overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement. 3. Representations Each party represents to the other party(which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into)that:- (a) Basic Representations. (i) Status. It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and,if relevant under such laws,in good standing; (ii) Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorise such execution,delivery and performance; 2 ISDA®1992 DOCSNY 1:948479.1 40796-108 TNG O O (iii) No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; (iv) Consents. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with;and (v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general application(regardless of whether enforcement is sought in a proceeding in equity or at law)). (b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party. (c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action,suit or proceeding at law or in equity or before any court,tribunal,governmental body,agency or official or any arbitrator that is likely to affect the legality,validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document. (d) Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information,true,accurate and complete in every material respect. 4. Agreements Each party agrees with the other that,so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party:- (a) Furnish Specified Information. It will deliver to the other party any forms, documents or certificates specified in the Schedule or any Confirmation by the date specified in the Schedule or such Confirmation or,if none is specified,as soon as reasonably practicable. (b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future. (c) Comply with Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party. 5. Events of Default and Termination Events (a) Events of Default. The occurrence at any time with respect to a party or,if applicable,any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes an event of default(an"Event of Default")with respect to such party:- (i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i)or 2(d)required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party; 3 ISDA®1"2 DOCSNY 1:948479.1 40786-108 TNG 0 (ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i)or 2(d)or to give notice of a Termination Event or any agreement or obligation under Section 4(a)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party; (iii) Credit Support Default. (1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed; (2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party;or (3) the party or such Credit Support Provider disaffirms,disclaims,repudiates or rejects,in whole or in part,or challenges the validity of,such Credit Support Document; (iv) Misrepresentation. A representation made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated; (v) Default under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period,there occurs a liquidation of,an acceleration of obligations under,or an early termination of,that Specified Transaction, (2)defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment,delivery or exchange date of,or any payment on early termination of,a Specified Transaction(or such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period)or(3)disaffirms,disclaims,repudiates or rejects, in whole or in part,a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf); (vi) Cross Default. If "Cross Default" is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity(individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments(after giving effect to any applicable notice requirement or grace period); (vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:— (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors'rights,or a petition is presented for its winding-up or liquidation,and, 4 ISDAO 1992 DOCSNY 1:948479.1 40786-108 TNG 0 ' in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition(A)results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up,official management or liquidation(other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator,conservator,receiver,trustee,custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress,execution,attachment,sequestration or other legal process levied,enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (8)causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive), or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in,any of the foregoing acts;or (viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and,at the time of such consolidation amalgamation,merger or transfer:- (1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement;or (2) the benefits of any Credit Support Document fail to extend (without the consent of the other party)to the performance by such resulting,surviving or transferee entity of its obligations under this Agreement. (b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an Illegality if the event is specified in (i) below, and, if specified to be applicable, a Credit Event Upon Merger if the event is specified pursuant to(ii)below or an Additional Termination Event if the event is specified pursuant to(iii) below:- (i) Illegality. Due to the adoption of,or any change in, any applicable law after the date on which a Transaction is entered into,or due to the promulgation of,or any change in,the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful(other than as a result of a breach by the party of Section 4(b))for such party(which will be the Affected Party):- (1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction;or (2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction; (ii) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified in the Schedule as applying to the party,such party("X"),any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with,or merges with or into,or transfers all or substantially all its assets to another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action (and,in such event X or its successor or transferee,as appropriate,will be the Affected Party);or 5 ISDA©1992 DOCSNY 1:948479.1 40786-108 TNG 0 (iii) Additional Termination Event. If any "Additional Termination Event" is specified in the , Schedule or any Confirmation as applying,the occurrence of such event (and, in such event, the Affected Party or Affected Parties shall be as specified for such Additional Termination Event in the Schedule or such Confirmation). (c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality,it will be treated as an Illegality and will not constitute an Event of Default. 6. Early Termination (a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the "Defaulting Party") has occurred and is then continuing, the other party (the "Non-defaulting Party") may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, "Automatic Early Termination" is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(1),(3),(5),(6)or,to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4)or,to the extent analogous thereto,(8). (b) Right to Terminate Following Termination Event. (i) Notice. If a Termination Event occurs,an Affected Party will,promptly upon becoming aware of it notify the other party,specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require. GO Two Affected Parties. If an Illegality under Section 5(b)(1) occurs and there are two Affected Parties,each party will use all reasonable efforts to reach agreement within 30 days after notice thereof is given under Section 6(b)(i)on action to avoid that Termination Event. (iii) Right to Terminate. If.— (1) an agreement under Section 6(b)(ii) has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i);or (2) an Illegality other than that referred to in Section 6(b)(ii), a Credit Event Upon Merger or an Additional Termination Event occurs, either party in the case of an Illegality,any Affected Party in the case of an Additional Termination Event if there is more than one Affected Party,or the party which is not the Affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may,by not more than 20 days notice to the other party and provided that the relevant Termination Event is then continuing,designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions. (c) Effect of Designation. (i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing. (ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i)or 2(d) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e). 6 ISDA©1992 DOCSNY I:948479.1 41)786-108 TNG (d) Calculations. (i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation,the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation. (ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective(in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default)and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with(to the extent permitted under applicable law) interest thereon(before as well as after judgment),from (and including)the relevant Early Termination Date to(but excluding)the date such amount is paid,at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. (e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions shall apply based on the parties' election in the Schedule of a payment measure, either"Market Quotation" or "Loss", and a payment method, either the "First Method" or the "Second Method". If the parties fail to designate a payment measure or payment method in the Schedule, it will be deemed that "Market Quotation"or the"Second Method",as the case may be,shall apply.The amount,if any,payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off. (i) Events of Default. If the Early Termination Date results from an Event of Default:— (1) First Method and Marker Quotation. If the First Method and Market Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the excess,if a positive number,of(A)the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Unpaid Amounts owing to the Non-defaulting Party over (B) the Unpaid Amounts owing to the Defaulting Party. (2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party's Loss in respect of this Agreement. (3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to(A) the sum of the Settlement Amount (determined by the Non- defaulting Party) in respect of the Terminated Transactions and the Unpaid Amounts owing to the Non-defaulting Party less(B)the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party: if it is a negative number,the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party's Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (ii) Termination Events. If the Early Termination Date results from a Termination Event:— (1) One Affected Party. If there is one Affected Party,the amount payable will be determined in accordance with Section 6(e)(i)(3),if Market Quotation applies,or Section 6(e)(i)(4),if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Party will be deemed to be references to the Affected Party and the party which is not the Affected Party, 7 ISDA®1992 DOCSNY 1:948479.1 40786-108 TNG P J respectively, and, if Loss applies and fewer than all the Transactions are being terminated,Loss shall be calculated in respect of all Terminated Transactions. (2) Two Affected Parties.If there are two Affected Parties:— (A) if Market Quotation applies, each party will determine a Settlement Amount in respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum of (a) one-half of the difference between the Settlement Amount of the party with the higher Settlement Amount ("X") and the Settlement Amount of the party with the lower Settlement Amount ("Y") and (b) the Unpaid Amounts owing to X less (II) the Unpaid Amounts owing to Y;and (13) if Loss applies,each party will determine its Loss in respect of this Agreement (or, if fewer than all the Transactions are being terminated, in respect of all Terminated Transactions) and an amount will be payable equal to one-half of the difference between the Loss of the party with the higher Loss ("X") and the Loss of the party with the lower Loss("Y"). If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of that amount to Y. (iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because "Automatic Early Termination"applies in respect of a party,the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii). (iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be entitled to recover any additional damages as a consequence of such losses. 7. Transfer Neither this Agreement nor any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise)by either party without the prior written consent of the other party,except that:— (a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with,or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement);and (b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a Defaulting Party under Section 6(e). Any purported transfer that is not in compliance with this Section will be void. 8. Miscellaneous (a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto. (b) Amendments. No amendment,modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system. 8 ISDA®1992 DOCSNY 1:948479.1 40786-108 TNG v (c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction. (d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law. (e) Counterparts and Confirmations. (i) This Agreement (and each amendment,modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original. (ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation. (f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise,of that right,power or privilege or the exercise of any other right,power or privilege. (g) Headings. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement. 9. Expenses A Defaulting Party will,on demand,indemnify and hold harmless the other party for and against all reasonable out- of-pocket expenses,including legal fees,incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination of any Transaction,including,but not limited to,costs of collection. 10. Notices (a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system)to the address or number or in accordance with the electronic messaging-system details provided(see the Schedule)and will be deemed effective as indicated:- (i) if in writing and delivered in person or by courier,on the date it is delivered; (ii) if sent by telex,on the date the recipient's answerback is received; (iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender's facsimile machine); (iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested),on the date that mail is delivered or its delivery is attempted;or (v) if sent by electronic messaging system,on the date that electronic message is received, unless the date of that delivery (or attempted delivery)or that receipt as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local 9 ISDA®1992 DOCSNY 1:948479.1 40786-108 TNG v J Business Day,in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day. (b) Change of Addresses. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it. 11. Governing Law and Jurisdiction (a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule. (b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement ("Proceedings"), each party irrevocably:— 0) submits to the jurisdiction of the English courts,if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York;and (ii) waives any objection which it may have at anytime to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction(outside,if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification,extension or re-enactment thereof for the time being in force)nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction. (c) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv)attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law,that it will not claim any such immunity in any Proceedings. 12. Definitions As used in this Agreement:— "Additional Termination Event"has the meaning specified in Section 5(b). "Affected Party"has the meaning specified in Section 5(b). "Affected Transactions" means (a) with respect to any Termination Event consisting of an Illegality, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event,all Transactions. "Affiliate"means,subject to the Schedule, in relation to any person,any entity controlled,directly or indirectly,by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose,"control"of any entity or person means ownership of a majority of the voting power of the entity or person. 10 ISDA®1992 DOCSNY I:948479.1 40786-108 TNG "Applicable Rate"means:- (a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party,the Default Rate; (b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date (determined in accordance with Section 6(d)(ii))on which that amount is payable,the Default Rate; (c) in respect of all other obligations payable or deliverable (or which would have been but for Section 2(a)(iii))by a Non-defaulting Party,the Non-default Rate;and (d) in all other cases,the Termination Rate. "consent" includes a consent, approval, action, authorisation, exemption, notice, filing, registration or exchange control consent. "Credit Event Upon Merger"has the meaning specified in Section 5(b). "Credit Support Document"means any agreement or instrument that is specified as such in this Agreement. "Credit Support Provider"has the meaning specified in the Schedule. "Default Rate" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee(as certified by it)if it were to fund or of funding the relevant amount plus I%per annum. "Defaulting Party"has the meaning specified in Section 6(a). "Early Termination Date"means the date determined in accordance with Section 6(a)or 6(b)(iii). "Event of Default"has the meaning specified in Section 5(a)and,if applicable,in the Schedule. "Illegality"has the meaning specified in Section 5(b). "law"includes any treaty,law,rule or regulation and"lawful"and"unlawful"will be construed accordingly. "Local Business Day" means, subject to the Schedule, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under Section 2(a)(i), in the place(s)specified in the relevant Confirmation or, if not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement,(b)in relation to any other payment, in the place where the relevant account is located,(c)in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and(d) in relation to Section 5(a)(v)(2),in the relevant locations for performance with respect to such Specified Transaction. "Loss"means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a party,an amount that party reasonably determines in good faith to be its total losses and costs(or gain,in which case expressed as a negative number) in connection with this Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss includes losses and costs(or gains)in respect of any payment or delivery required to have been made(assuming satisfaction of each applicable condition precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid duplication,if Section 6(e)(i)(1)or(3)or 6(e)(ii)(2)(A)applies. Loss does not include a party's legal fees and out-of-pocket expenses referred to under Section 9. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not reasonably practicable, as of the earliest date thereafter as is reasonably practicable.A party may(but need not)determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant markets. 1 1 ISDA®1992 DOCSNY I:948479.1 40786-108 TNG 4 "Market Quotation" means, with respect to one or more Terminated Transactions and a party making the determination,an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive number) in consideration of an agreement between such party (taking into account any existing Credit Support Document with respect to the obligations of such party) and the quoting Reference Market- maker to enter into a transaction(the "Replacement Transaction")that would have the effect of preserving for such party the economic equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable condition precedent)by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would,but for the occurrence of the relevant Early Termination Date,have been required after that date.For this purpose,Unpaid Amounts in respect of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The party making the determination (or its agent) will request each Reference Market- maker to provide its quotation to the extent reasonably practicable as of the same day and time (without regard to different time zones)on or as soon as reasonably practicable after the relevant Early Termination Date.The day and time as of which those quotations are to be obtained will be selected in good faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations are provided,the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined. "Non-default Rate"means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the Non-defaulting Party(as certified by it)if it were to fund the relevant amount. "Non-defaulting Party"has the meaning specified in Section 6(a). "Potential Event of Default"means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default. "Reference Market-makers"means four leading dealers in the relevant market selected by the party determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make an extension of credit and (b)to the extent practicable,from among such dealers having an office in the same city. "Scheduled Payment Date"means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction. "Set-off" means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this Agreement,another contract,applicable law or otherwise)that is exercised by,or imposed on,such payer. "Settlement Amount"means,with respect to a party and any Early Termination Date,the sum of:- (a) the Market Quotations (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined:and (b) such party's Loss (whether positive or negative and without reference to any Unpaid Amounts) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or would not(in the reasonable belief of the party making the determination)produce a commercially reasonable result. "Specified Entity"has the meaning specified in the Schedule. 12 ISDA®1992 DOCSNY 1:948479.1 40786-108 TNG "Specified Indebtedness"means, subject to the Schedule, any obligation (whether present or future,contingent or otherwise,as principal or surety or otherwise)in respect of borrowed money. "Specified Transaction" means, subject to the Schedule, (a)any transaction (including an agreement with respect thereto)now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party)and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is a rate swap transaction,basis swap, forward rate transaction,commodity swap, commodity option,equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction,cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction(including any option with respect to any of these transactions),(b)any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation. "Terminated Transactions"means with respect to any Early Termination Date (a)if resulting from a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if"Automatic Early Termination"applies,immediately before that Early Termination Date). "Termination Event" means an Illegality or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event. "Termination Rate"means a rate per annum equal to the arithmetic mean of the cost(without proof or evidence of any actual cost)to each party(as certified by such party)if it were to fund or of funding such amounts. "Unpaid Amounts"owing to any party means, with respect to an Early Termination Date, the aggregate of(a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or would have been)required to be delivered as of the originally scheduled date for delivery, in each case together with (to the extant permitted under applicable law) interest,in the currency of such amounts, from(and including)the date such amounts or obligations were or would have been required to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate.Such amounts of interest will be calculated on the basis of daily compounding and the actual number of days elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e)or, if each party is so obliged, it shall be the average of the fair market values reasonably determined by both parties. 13 ISDAO 1992 DOCSNY I:948479.1 40786-108 TNG I� IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document. [PARTY A] [PARTY B] (Name of Party) (Name of Party) By:........................................................................... By: ................................................................................. Name: Name: Title: Title: Date: Date: 14 ISDA®1992 DOCSNY 1:948479.1 40786-108 TNG l FAH R COMMITTEE Meeting Date To Bd.of Dir. 8/13/03 8/27/03 AGENDA REPORT Item Number Item Number FAHR03-68 13 Orange County Sanitation District FROM: Gary Streed, Director of Finance Originator: Michael D. White, Controller SUBJECT: CONSIDERATION OF REVISION TO DEBT POLICY GENERAL MANAGER'S RECOMMENDATION Approve staff's proposed revision to the District's Debt Policy. SUMMARY In September 2001 , the Finance, Administration and Human Resources Committee and the Board approved the District's first official Debt Policy. The policy stated that one-half of all future long-term capital improvements will be funded from long-term debt with the remaining cost funded from capital improvement reserves and current revenues. The decision to meet secondary discharge standards and to disinfect our effluent has increased the capital improvement program to $2.2 billion of facilities to be constructed over the next ten- years. It is no longer feasible to expect that 50 percent of the improvements can be paid through capital improvement reserves and current revenues without rapid and significant rate increases. Staff recommends that the limitation on debt issuance be restricted to all capital improvements that cannot be financed from current revenue. PRIOR COMMITTEE/BOARD ACTIONS: Approved original debt policy in September 2001. PROJECT/CONTRACT COST SUMMARY N/A BUDGETIMPACT ❑ This item has been budgeted. (Line item: ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. © Not applicable (information item) ADDITIONAL INFORMATION N/A ALTERNATIVES N/A ATTACHMENTS 1. Proposed revised policy on debt. G:\wp.dtatagenda\Board Agenda Reports\2003 Board Agenda ReportsT8011tenn 13(f)Revised Debt Policy.doc Page 1 @FINANCE DEPARTMENT POLICY AND PROCEDURE Subject: Interest Rate Exchange Index: Finance Administration Agreement Policy Number: 201-3-2 Effective Date: July 9, 2003 Prepared by: Finance Administration Supersedes: N/A Approved By: FAHR Committee 1.0 PURPOSE: The District's Interest Rate Exchange Agreement Policy provides guidelines for the use of hedging products including swaps, caps, floors, collars, options, and other similar financial instruments (collectively, "Hedging Products") in connection with the financial exposure of the District, including interest rate exposure. While the use of Hedging Products can reduce the District's exposure to certain risks, prudent monitoring of such instruments is necessary to presence the District's credit standing and to allow for financial flexibility. As part of the ongoing responsibility of managing the District's finances, the Director of Finance will use these guidelines in determining the appropriate uses for financial Hedging Products and establishing goals for their use. In evaluating a particular transaction involving the use of financial Hedging Products, the Director of Finance shall review the short-term and long-term implications associated with entering into such agreements, including costs, risks, historical trends, capacity limitations, future flexibility, and other similar considerations. The purposes for which the District will consider the use of these products are: 1 .1 To prudently reduce exposure to changes in financial valuations in the context of a particular financing, or the overall asset/liability management of the District; or 1 .2 To achieve lower net costs to the District. 1.3 Hedging Products shall not be used for speculative purposes. Page 1 of 10 2.0 ORGANIZATIONS AFFECTED: General Manager's Office, Finance Department, General Counsel, bond rating agencies, financial advisors, bond underwriters, bond counsel, and external independent auditors. 3.0 REFERENCES: 3.1 Government Finance Officers Association publication "A Guide for Preparing a Debt Policy". 3.2 "Moody's on Municipals- An Introduction to Issuing Debt" by Moody's Investor Services. 3.3 Handbook for Muni-Bond Issuers by Joe Mysak, published by Bloomberg Professional Library. 3.4 Finance Department Policy and Procedure #201-3-1: Debt Policy. 4.0 POLICY: 4.1 Forms and Agreements- 4.1.1 To the extent possible, the Hedging Product agreements entered into by the District shall contain the terms and conditions set forth in the International Swap and Derivatives Association, Inc. ("ISDA") Master Agreement, including any schedules and confirmation. 4.1.1.1 The schedule should be modified to reflect specific legal requirements and business terms desired by the District. 4.1.1.2 The Director of Finance shall consider whether to include provisions that permit the District or the counterparty to assign its rights and obligations under an agreement and to optionally terminate such agreement at its market value at any time. 4.1 .2 The District will present the form of agreements to the Board of Directors and request authorization to enter into such agreements subject to modifications determined by the Director of Finance to be in the best interests of the District. Page 2 of 10 :ra 4.2 Procurement- 4.2.1 It shall be the policy of the District to solicit and procure Hedging Products by competitive bidding whenever feasible. 4.2.2 The Director of Finance shall determine which parties it will allow to participate in a competitive transaction but such parties must conform to the minimum credit standards outlined in this Policy. 4.2.3 Notwithstanding the above, the Director of Finance may procure Hedging Products by negotiated methods if it is determined that due to the size or complexity of a particular instrument competitive bidding is undesirable, impractical, or impossible and a negotiated transaction would provide the most value to the District. 4.2.3.1 In such a situation, the Director of Finance should attempt to price the hedge based upon an agreed-to methodology relying on available pricing information to obtain inputs to a mathematical model. 4.2.3.2 If appropriate, the Director of Finance should use an independent financial advisory firm to assist in the price negotiations. 4.2.4 Regardless of the method of procurement, the Director of Finance shall obtain an independent finding that the terms and conditions of any Hedging Product reflect a fair market value of such agreement as of the date of its execution. 4.3 Risk Exposure- 4.3.1 Before entering into a Hedging Product, the Director of Finance shall evaluate all the risks inherent in the transaction. 4.3.1 .1 Counterparty Risk: The Director of Finance shall endeavor to minimize counterparty risk by establishing strong minimum counterparty credit standards and diversifying the District's exposure to counterparties. To that end, before entering into a transaction, the District should determine its existing exposure to the relevant counterparty or counterparties and determine how the proposed transaction would affect the exposure. The exposure should not be measured solely in terms of amount or duration of the Hedging Product, but rather how changes in market conditions would affect the District's exposure Page 3 of 10 a ("Value at Risk"). The Value at Risk should be based on all outstanding Hedging Product agreements with each counterparty. 4.3.1 .2 Termination risk: The District may be required to make a large payment to the counterparty if the Hedging Product is terminated prior to its scheduled maturity pursuant to its terms. The termination risk can be minimized through selection of counterparties with strong creditworthiness, requiring the counterparty to post collateral in excess of the market value of the agreement, limiting the circumstances where a payment may be required, and by permitting the assignment of the agreement to a creditworthy entity in lieu of termination. 4.3.1 .3 Rollover risk: The potential need to find a replacement counterparty as part of the overall plan of finance if the duration of the Hedging Product does not match the expected duration of the underlying financing to be hedged. Rollover risk can be minimized during the initial execution of the plan of finance by matching the duration of any hedge to the financing. 4.3.1 .4 Basis risk:The potential mis-match between the payments, typically based on an index, the District is receiving as part of a Hedging Product and the actual payments made by the District. The Director of Finance will evaluate different indices as part of its analysis of a Hedging Product and identify the amount of basis risk that may result from various indices. 4.3.1.5 Event risk: Results from the impact that an unexpected event (i.e. — counterparty actions as a result of certain events, changes in Federal and State income tax codes on interest rates, and other possible events that affect a Hedging Product) has on a hedge established by the District. The Director of Finance will evaluate the potential impact of changes in conditions that could affect the economics of a hedge; for example, how changes in marginal tax brackets affect the economics of using a taxable LIBOR-based interest rate to hedge tax-exempt variable rate exposure. 4.3.2 Identification of the risks and discussion of the means, if any, employed to mitigate the risks will be contained in the Director of Page 4 of 10 V Q Finance's report addressed to the Board of Directors recommending approval of the Hedging Product agreements. 4.4 Counterparty Credit Standards- 4.4.1 Certain risk reduction products result in a continuing exposure to the creditworthiness of financial institutions that serve as the District's counterparties on such transactions. To protect the District's interests in the event of a counterparty credit problem, the Director of Finance will recommend entering into a Hedging Product with a counterparty having capitalization of at least $200 million and only if: 4.4.1.1 At least two of the counterparty's credit ratings are at least "AaY or "AA-", or equivalent by any two of the nationally recognized rating agencies (i.e. Moody's, Standard and Poor's, or Fitch); or 4.4.1.2 The payment obligations of the counterparty shall be unconditionally guaranteed by an entity with such minimum credit ratings. 4.5 Collateralization On Downgrade- 4.5.1 Should the rating (a) of the counterparty, if its payment obligations are not unconditionally guaranteed by another entity, or (b) of the entity unconditionally guaranteeing its payment obligations, if so secured, not satisfy the requirements set forth in "COUNTERPARTY CREDIT STANDARDS" above, then the obligations of such counterparty shall be collateralized with securities acceptable to the Director of Finance at thresholds with minimum transfer amounts as set forth in the Hedging Product agreement. 4.6 Termination- 4.6.1 A termination payment to or from the District may be required in the event of termination of a Hedging Product due to a default of either the District or the counterparty, certain additional termination events or optional termination by the District. 4.6.2 In the event of default by a counterparty whereby the District would be required to make a termination payment due to the current termination value of a Hedging Product, the Director of Finance will proceed as follows: Page 5 of 10 9 4.6.2.1 In order to mitigate the financial impact of making such payment at the time such payment is due, the Director of Finance will seek to replace the terms of the terminated transaction with another counterparty. The District will also have the option to have the defaulting counterparty seek to reassign the agreement to a new counterparty that meets all District criteria. As long as the terms of the replacement Hedging Product agreement are substantially the same as the original agreement (i.e., amount/volume, interest rate, maturity date), the Director of Finance is authorized to find a replacement counterparty without the approval of the Board of Directors. 4.6.2.2 If a satisfactory agreement with a new or replacement counterparty is reached, the new counterparty will make an upfront payment to the District in an amount that should nearly offset the payment obligation of the District to the original counterparty. 4.6.2.3 If a satisfactory agreement with a replacement counterparty is not reached, the District will be required to make a termination payment to the original defaulting counterparty. 4.6.3 The Director of Finance will promptly report to the Board of Directors upon the occurrence of a termination event and the actions taken in response. 4.7 Legality- 4.7.1 In conjunction with any hedges, the District must obtain an opinion reasonably acceptable to the market from a regionally or nationally recognized law firm that such Hedging Product is a legal, valid, and binding obligation of the District. 4.8 Responsibilities- 4.8.1 The Director of Finance is responsible for determining the appropriate uses for risk reduction products in conjunction with the District's financings and programmatic needs and making recommendations to the Board of Directors. 4.8.2 The Controller is responsible for reflecting the use of Hedging Products and other derivative financing transactions on the District's financial statements in accordance with generally accepted accounting principles. Page 6 of 10 4.9 Monitoring and Reporting- 4.9.1 The Director of Finance shall issue a report to the Finance, Administration and Human Resources Committee in each quarter which the District enters into or continues to be a party to a Hedging Product, which shall include, but not be limited to, the following information, to the extent applicable: 4.9.1 .1 Highlights of all material changes to Hedging Product agreements including counterparty downgrades and/or terminations; 4.9.1.2 A summary of any new Hedging Products entered into by the District since the last report; 4.9.1.3 A summary of any planned Hedging Product transactions and the impact of such transactions on the District; a description of each outstanding Hedging Product agreement, including a summary of its terms and conditions, the notional amount, volume, rates, maturity, the estimated market value of each agreement,the method of procurement (competitive or negotiated), and the full name, description and credit ratings of the agreement's counterparty and if necessary, its applicable guarantor; 4.9.1.4 Any amounts which were required to be paid and received, and any amounts which actually were paid and received under each outstanding Hedging Product; 4.9.1 .5 Any credit enhancement, liquidity facility or reserves associated therewith including an accounting of all costs and expenses incurred, whether or not in conjunction with the procurement of credit enhancement or liquidity facilities under each outstanding Hedging Product; and 4.9.1 .6 An assessment of the counterparty risk, termination risk, and other risks associated therewith, which shall include the value of the collateral posted by counterparties and the District, the aggregate marked-to-market value for each counterparty and relative exposure compared to other counterparties, and a calculation of the District's Value at Risk for each counterparty. Page 7 of 10 1 a 4.9.2 Such report shall also include a copy of this Policy in the quarter after it is adopted or subsequently modified. 5.0 DEFINITIONS: 5.1 AMORTIZATION RISK - Represents the cost to the issuer of servicing debt or honoring swap payments due to a mismatch between bonds and the notional amount of swap outstanding. Amortization risk is characteristic of swaps used to hedge variable rate bonds issued to finance amortizing assets, such as mortgages. Amortization risk occurs to the extent bonds and swap notional amounts become mismatched over the life of a transaction. 5.2 BASIS RISK- Refers to a mismatch between the interest rate received from the swap contract and the interest actually owed on the issuer's bonds. 5.3 CALL OPTION -A contract through which the owner is given the right but is not obligated to purchase the underlying security or commodity at a fixed price within a limited time frame. 5.4 CAP - A ceiling, or maximum, for the interest rate which would be paid. 5.5 COLLAR -The combination of owning a Cap and selling a Floor. Generally, it is structured so that the net cost of the collar is zero or close to zero. This means that the expense for the long cap premium is offset by the credit received for the floor premium. 5.6 COUNTER PARTY RISK - The risk that the swap counterparty will not fulfill its obligation to honor its obligations as specified under the contract. 5.7 DERIVATIVE - A financial product which is based upon another product. Generally, derivatives are risk management tools. 5.8 FLOOR - A lower limit on the interest rate which would be paid. 5.9 INTEREST RATE RISK - The risk associated with changes in general interest rate levels or Yield Curves (See Yield Curves). 5.10 INTEREST RATE SWAP -The contract whereby one party typically agrees to exchange a floating rate for a fixed coupon rate. An essential characteristic of swaps is the swapping of cashflows and not principal amounts. 5.11 ISDA - The International Swaps and Derivatives Association, a global trade association representing participants in the derivatives industry. See a blank Page 8 of 10 :a copy of the ISDA Master Agreement used in developing Hedging Product agreements within Appendix A. 5.12 LIBOR - London InterBank Offered Rate is the average of rate quotes paid on deposits from five major banks; Bank of America, Barclays, Bank of Tokyo, Deutsche Bank, and Swiss Bank. LIBOR is quoted daily in the Wall Street Journal's Money Rates and compares closely to the 1-year Treasury Security index. LIBOR's cost of money is a widely monitored international interest rate indicator. LIBOR is currently being used by both Fannie Mae and Freddie Mac as an index on the loans they purchase. 5.13 NOTIONAL AMOUNT - The stipulated principal amount for a swap transaction.There is no transfer of ownership in the principal for a swap; but there is an exchange in the cash flows for the designated interest coupons. 5.14 OPTION -A derivative contract. There are two primary types of options. (See Put and Call). An option is considered a wasting asset because it has a stipulated life to expiration and may expire worthless. Hence, the premium could be wasted. 5.15 PUT OPTION -A contract which grants to the purchaser the right but not the obligation to offer or sell an underlying security. 5.16 ROLLOVER RISK—The risk that the swap contract is not coterminous with the related bonds and might be renewed in adverse conditions. 5.17 SWAP - A customized financial transaction between two or more counterparties who agree to make periodic payments to one another. Swaps cover interest rate, equity, commodity and currency products. They can be simple floating for fixed exchanges or complex hybrid products with multiple option features. 5.18 TAX EVENT RISK - Issuers which issue tax-exempt variable rate bonds inherently accept risk stemming from changes in marginal income tax rates. This is due to the tax code's impact on the trading value of tax-exempt bonds. This risk is also a form of basis risk under swap contracts. 5.19 TERMINATION RISK - The risk that the swap could be terminated by the counterparty due to any of several events, which may include issuer or counterparty ratings downgrade, covenant violation by either party, bankruptcy of either party, swap payment default by either party, and default events as defined in the issuer's bond indenture. The events of default and termination, which could lead to involuntary termination of the contract should include failure to pay, bankruptcy, merger without assumption of obligations and Illegality. Page 9 of 10 D 5.20 YIELD CURVE - Refers to the graphical or tabular representation of interest rates across different maturities. The presentation often starts with the shortest term rates and extends towards longer maturities. It reflects the market's views about implied inflation/deflation, liquidity, economic and financial activity and other market forces. Page 10 of 10 r MINUTES OF MEETING OF JOINT GROUNDWATER REPLENISHMENT SYSTEM COOPERATIVE COMMITTEE ORANGE COUNTY SANITATION DISTRICT AND ORANGE COUNTY WATER DISTRICT July 14, 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. The following persons were present: OCSD Directors OCWD Directors Shirley McCracken Philip Anthony, Chair Norman Eckenrode, Vice Chair Kathryn Barr,Alternate No. 1 Steve Anderson, Alternate No. 1 Brett Franklin, Alternate No. 2 OCSD Directors OCWD Directors John Collins Wes Bannister Denis Bilodeau OCSD Staff Jan Debay Blake Anderson, General Manager Carol Beekman, Communications OCWD Staff Virginia Grebbien, General Manager Others Present Craig Miller, Assistant General Manager Paul Brown, Camp Dresser & McKee, Inc. Joanne Daugherty, Shivaji Deshmukh, Bruce Chalmers, Camp Dresser&McKee, Inc. Bill Everest, Larry Labrado, Michael Markus, Dick Corneille, Camp Dresser& McKee, Inc. Mehul Patel, Wendy Sevenandt, Amy Rego, Metropolitan Water District Ron Wildermuth, Abdul Rashidi, Montgomery Watson Harza Donna Carter, JU Advertising CONSENT CALENDAR Upon motion duly made, seconded and carried,the Consent Calendar was approved as follows: 1. Minutes of Previous Meeting The Minutes of the June 9, 2003 Joint Cooperative Committee meeting were approved as mailed. MATTER FOR CONSIDERATION 2. Consideration of Establishing New Project Policy for Issuance of Construction Change Orders Program Manager Mike Markus presented the procedures that are currently in place for issuing Change Orders for GWR System projects. He explained the need for a revised GWR System policy for issuing Change Orders and advised that the current policy has held Change Orders to 4.3% of the contract budget, and that is well below the average percentage (5%) for construction Change Orders. Mr. Markus noted that the proposed policy is identical to the one the OCWD Board adopted. He advised that in order to minimize project delays and increase staff efficiencies, he recommends the adoption of a Amendment 1 to the Joint Exercise of Powers Agreement for the Development, Operation and Maintenance of the Groundwater Replenishment System and the Green Acres Project Agreement providing for Revised Change Order Policy that mirrors the one adopted by the OCWD Board and Upon motion by Director McCracken, seconded by Director Barr and carried, the Committee recommended that both Boards, at the July 16 OCWD Board meeting and at the August 27 OCSD Board meeting:.Approve and adopt Amendment 1 to the Joint Exercise of Powers Agreement for the Development, Operation and Maintenance of the Groundwater Replenishment System and the Green Acres Project Agreement providing for Revised Change Order Policy. 3. Contract No. GWRS-2161,AWTF Membrane Pretreatment System PreSelection(US Filter): Change Orders No. 5-6 Senior Engineer Mehul Patel provided a progress report on the design phase of the GWRS 2161 contract. He advised of the need to issue two new Change Orders to US Filter for design changes. Mr. Patel advised that Change Order No. 5 is an increase in the contract price in the amount of $714,010 that provides for changes and refinements during final design that will improve performance and reliability in the microfiltration(MF)system; and Change Order No. 6 consists of a decrease in the contract price of$513,387 because the need for a GE Fanuc process control system software and hardware was eliminated. Upon motion by Director Anderson, seconded by Director Barr and carried, the Committee recommended that the OCWD Board at the July 16 Board meeting: Authorize issuance of Change Orders Nos. 5 and 6 to US Filter, for a total contract price increase in the amount of $200,413 that provides for final design changes with no time extensions. INFORMATIONAL ITEMS 4. Public Information and Education Update Director of Communications Ron Wildermuth briefed the Committee about ongoing public information issues and mentioned that there has been no significant organized or active opposition to the GWR System. Donna Carter, JU Advertising presented the results of a tracking poll that was conducted on a representative sample of people in the District's service area 2 5. Whittier Narrow/Montebello Forebay Recharge Project Design Manager Bill Everest briefly reviewed the highlights of the Whittier Narrows/Montebello Forebay Project and the successful use of tertiary reclaimed water. He also stated that there are significant differences in quality and treatment of the recycled water used in the Montebello Forebay as compared to the GWR System water. 6. Project Schedule and Budget Update GWR System Budget Update Mr. Markus then referred to the Budget and reported that the GWR System project is on schedule. Initial Microfiltration/Site Power Distribution Mr. Markus noted that the OCWD on-sight project is on schedule and he presented the construction plan and schedule for District facility demolition and construction activities. Director Anthony requested that the Committee be kept better informed about the loss of trees on the property. 7. Construction Projects Progress Mr. Markus stated that Contract No. GWRS-2003-2,GWR System Unit Three Pipeline had a successful bid opening and the apparent low bidder was Ken Thompson, Incorporated who submitted a bid of$ 16,989,000 that was substantially lower than the Engineers estimate of $19,960,000. He mentioned that State approval must be obtained prior to the award of the contract. 8. Status Report Grants and Loans Update Bill Everest stated that The Department of Water Resources (DWR) grant contract for$30 million has been received and signed. GENERAL COUNSEL ANOUNCEMENTS/REPORTS OCSD General Counsel Brad Hogin reported that the Pall Corporation legal battle prevailed on summary judgment. He reported that Pall Corporation has the ability to file an appeal within 60 days of the judgment being entered. ADJOURNMENT The meeting was adjourned at 8:02 p.m. Director Philip Anthony, Chairman - 3 BOARD OF DIRECTORS Meeting Date To Bd.of Dir. 08/27/03 AGENDA REPORT Item Number Item Number 14(b) Orange County Sanitation District FROM: David Ludwin, Director of Engineering Originator: Wendy Sevenandt, Associate Engineer III SUBJECT: GROUNDWATER REPLENISHMENT SYSTEM, JOB NO. J-36. GROUNDWATER REPLENISHMENT SYSTEM UNIT III PIPELINE PROJECT GENERAL MANAGER'S RECOMMENDATION Authorize award of a construction contract by the Orange County Water District (OCWD) to Ken Thompson, Inc.. for construction of Groundwater Replenishment System (GWRS) Unit III Pipeline Project., Contract No. GWRS-2003-2. for an amount not to exceed $16,989,000, with OCWD and Orange County Sanitation District paying equal shares of $8,494,500. SUMMARY • In May, the Joint Cooperative Committee (JCC) approved the plans and specifications for the GWRS Unit III Pipeline Project with an engineer's estimate of $19,960,000. • This project involves installation of approximately 21 ,000 linear feet of 66-inch and 60-inch diameter cement mortar lined and coated steel pipe that extends from Katella Avenue along the Santa Ana River north to the Carbon Canyon Diversion Channel and then north to Kraemer Basin in the City of Anaheim. Improvements in the existing spreading basins (Kraemer and Miller Basins) are included in this contract. The pipeline alignment will be in the west bank of the Santa Ana River and Carbon Canyon Diversion Channel. and includes a major tunnel at the 91- Freeway. • On July 2, 2003, seven bids were received. • The lowest bid was in the amount of $16,989,000. • The low bid is within the GWRS budget. • The JCC recommends awarding the contract to the lowest responsive bidder, Ken Thompson. Inc., for the bid amount of $16,989,00 • The recommended action was approved by the JCC on August 11 , 2003. PRIOR COMMITTEE/BOARD ACTIONS Joint Cooperative Committee approved the Plans and Specifications on May 12, 2003. PROJECT/CONTRACT COST SUMMARY See the attached Budget Information Table. The value of the contract awarded with this action is $16,989,000, with OCWD and OCSD paying equal shares of $8,494,500. This bid is less than the engineer's estimate. Page 1 BUDGET IMPACT ® This item has been budgeted. (Line Item: Section 8, Page 139) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) The breakdown of total construction costs between the separate contracts is shown in the following table. Summary of Current Construction Budgetary Costs by Contract ID Contract Eng. Est. Awarded Completed No. 1 Theo Lacy Pipeline Reach, GWR Portion 1,430,000 $1 ,430,000 2 GWR Pipeline — Reach 1 29,400,000 3 GWR Pipeline — Reach 2 20,800,000 4 GWR Pipeline— Reach 3 19,950,000 16,989,000 5 Temp MF/Site work/Site Power 17,140,000 17,139,646 6 Southeast Barrier Pipeline 3,381 ,000 3,381 ,000 7 West End Barrier Pipeline 265,000 265,000 8 Advanced Water Treatment Facility 251 ,400,000 9 SCE Work for Permanent Substation 2,396,000 2,396,000 10 Barrier Well Drilling/Monitoring 12,400,000 Wells/Wellhead Facilities/Pipelines 11 GWR Team Temp Offices/Trailers 807,000 807,000 12 Workshops 4,000,000 13 Southern California Water Co. Well 1,635,000 14 Vendor Design Submittals for MF, UV, 1 ,162,000 1,162,000 and PCS 15 Emerson Process Control System 2,373,000 16 Integrated Information System 4,860,000 17 Owner Controlled Insurance Program 6,000,000 6,000,000 Construction Total $379,399,000 $47,332,646 $2,237,000 The cost breakdown for the final design and construction phases of the Groundwater Replenishment System (GW RS) budget to be cost shared is: Construction: $379,400,000 Engineering, Legal Administration: $ 53,300,000 Project Contingency: $ 21 ,200,000 Total: $453,900,000 The current total project cost estimate for the final design and construction phase is within the total estimate presented in October 2003 when the Joint Exercise of Power Agreement for the Development, Operation and Maintenance of the GW RS and the Green Acres Project and budget was approved. Page 2 The Orange County Sanitation District (OCSD) Capital Budget is: GW RS Final Design and Construction Cost Shared Costs: $ 226,950,000 OCSD Preliminary Design and Non-cost Shared Costs: $ 9,256,000 Total Capital Costs to OCSD $ 236,206,000 Grants $ (45,000,000) Net Costs after Grants $ 191,206,000 ADDITIONAL INFORMATION Please refer to the attached August 11, 2003, Joint Cooperative Committee (JCC) Agenda Item Submittal ALTERNATIVES There are no recommended alternatives to awarding to the lowest responsible bidder. CEQA FINDINGS The Environmental Impact Report/Environmental Impact Statement (EIR/EIS) for the Groundwater Replenishment (GWR) System was certified by the Orange County Sanitation District (OCSD) and the Orange County Water District (OCWD) Board of Directors on March 24, 1999. Addendum No. 1 was approved on March 28, 2001. Addendum No. 2 was approved by OCSD on January 23, 2002, and by OCWD on January 16, 2002. ATTACHMENTS 1 . Budget Information Table 2. Agenda Item Submittal to the JCC re: Award of Contract No. GWRS-2003-2, Groundwater Replenishment System Unit III Pipeline Project WS:lc:sa G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda ReportsMONtem 15(b).GWRS-Ken Thompson.doc Page 3 BUDGET INFORMATION TABLE GROUNDWATER REPLENISHMENT(GWR)SYSTEM JOB NO.J-36 ORIGINAL- bi,�,fUNM S 'CURMNY, 1paib API: TOT PFN M-EXPE: D J AKCPJEASE� 4 ,ROJEC?1,ASK` All ON' ES Phase I-Project ca41. Development $ 700,000 $ 4,000 $ 4.000 $ 4.000 $ 4,000 $ 4,000 100% Phase 2-Preliminary k�," N;tl 11;Desiqn* $ 3,313.000 $ 3.313,000 $ 3.300,000 $ 3,300,000 $ 3.317.000 101% Phase 3-Design $ 9,849,000 $ 20,957,000 $ 20,957,000 $ 20,200,000 20.200,000 $ 14,000,000 69% Phase 4-Construction &Installation 98.481,000 $ 201,932,000 $ 201,932,000 $ 165,200,000 $ 24,694,500 $ 10,500,000 43% Phase 5- Commissioning $ $ $ $ 0% Phase 6-Close Out $ - $ - $ $ 0% Contingency $ 12,895,000 $ 10,000.000 1$ 10,000,000 0% PROJECT TOTAL $ 121,925,000 $ 236,206,000 1$ 236,206,000 $ 39,704,000 $ 48,198,500 1$ 27,821,000 1 58% iReimbursable Costs 1$ 45,000,000 1 1$ 45,000,000 1.,. 1 1$ 1,653,000 1 1 �44 PROJECT NET 1$ 121,925,000 1$ 191,206,000 1$ 191,206,000 $ 39,704,000 ,'660,1 $ 48,198,500 1$ 26,168,000 54%1 EDIVIS 003747352. 1 AGENDA ITEM SUBMITTAL Meeting Date: August 11, 2003 Budgeted: Yes Funding Source: OCW D/OCS D/G rants To: Joint Groundwater Replenishment Program/Line Item No.: 501-5049-722.60-01 System Cooperative Committee Cost Estimate: $16,989,000 From: Virginia Grebbien General Counsel Approval: N/A Blake Anderson Project Report Approved: Yes CEQA Compliance: Yes Staff Contact: Mike Markus Subject: AWARD OF CONTRACT NO. GWRS-2003-2, GROUNDWATER REPLENISHMENT SYSTEM UNIT III PIPELINE PROJECT SUMMARY Seven bids for Contract No. GWRS-2003-2, Groundwater Replenishment System Unit III Pipeline Project, were received and opened on July 2, 2003. Following evaluation of the bids, staff recommends awarding the contract to the lowest responsive bidder, Ken Thompson, Inc., for the bid amount of $16,989,000. RECOMMENDATION Agendize for the August 20 OCWD and August 27 OCSD Board meetings: 1) Receive and file Affidavit of Publication of Notice Inviting Bids; 2) Ratify issuance of Addendum No. 1 ; and 3) Accept bid and award Contract No. GW RS-2003-2, Groundwater Replenishment System Unit III Pipeline Project, to the lowest responsive bidder, Ken Thompson, Inc., for $16,989,000. DISCUSSION/ANALYSIS In May, this Committee approved plans and specifications and authorized solicitation of bids for the Groundwater Replenishment System Unit III Pipeline Project. This project involves installation of approximately 21,000 linear feet of 66-inch and 60-inch diameter cement mortar lined and coated steel pipe that extends from Katella Avenue along the Santa Ana River north to the Carbon Canyon Diversion Channel and then north to Kraemer Basin in the City of Anaheim. - 1 - I Improvements in the existing spreading basins (Kraemer and Miller Basins) are included in this contract. The pipeline alignment will be in the west bank of the Santa Ana River and Carbon Canyon Diversion Channel, and includes a major tunnel at the 91-Freeway. The Notice Inviting Bids was published on May 13, 2003, and one addendum was issued. The addendum was issued on June 18, 2003, which provided minor clarifications to the plans and specifications. Bids were opened on July 2, 2003, and a total of seven bids were received. The companies that submitted bids and their respective bid amounts were as follows: Ken Thompson, Inc. $ 16,989,000* Mladen Buntich Construction Co., Inc. $ 17,578,000 ARB, Inc. $ 18,114,045 Colich Construction, LP $ 19,302,695 Colich & Sons, LP $ 19,482,299 Steve P. Rados, Inc. $ 21,251,495 Steve Bubalo Construction Co. $ 22,141 ,000 * Ken Thompson's original bid was in the amount of $16,999,000, but contained a mathematical error, which was adjusted in accordance with the Contract Documents. Staff has evaluated the bid of Ken Thompson, Inc. and found it to be complete and responsive. Ken Thompson, Inc. has the appropriate State contractor's license which is current and in good standing. References have also been checked and found acceptable. The low bid that was received is within the budget for that project and within the overall program budget of $453.9 million, which was adopted by this Committee and both Boards of Directors. PRIOR COMMITTEE ACTIONS May 12, 2003 Approval of plans and specifications and solicitation of bids. - 2 - BOARD OF DIRECTORS Meeting Date To Bd.of Dir. 08/27/03 AGENDA REPORT Item Number Item Number 15 Orange County Sanitation District FROM: David Ludwin, Director of Engineering Originator: Julian Sabri, Engineer SUBJECT: GAS COMPRESSOR BUILDING UPGRADES AT PLANT NO. 2. JOB NO. P2-79-1 (REBID) GENERAL MANAGER'S RECOMMENDATION (1) Approve plans and specifications for Gas Compressor Building Upgrades at Plant No. 2. Job No. P2-79-1 (Rebid), on file at the office of the Board Secretary; (2) Approve Addendum No. 1 to the plans and specifications-, (3) Receive and file bid tabulation and recommendation; and (4) Award a Construction Contract to Adams/Mallory Construction Company, Inc., for Gas Compressor Building Upgrades at Plant No. 2, Job No. P2-79-1 (Rebid), for an amount not to exceed $463,941 . SUMMARY • This project will provide new ventilation, gas detection systems, and related electrical modifications for the Gas Compressor Building at Plant No. 2, located in the City of Huntington Beach. • The upgrades to the Gas Compressor Building at Plant No. 2 will be implemented in two phases: 1 . First phase (Job No. P2-79-1 ; This Agenda Report): This phase will add the necessary ventilation and gas detection as required by National Fire Protection Association (NFPA) 820. 2. Second phase (Job No. P2-79, Future Protect): The second part of the Gas Compressor Building Upgrades will be implemented after the completion of Job No. P2-79-1 . This second phase will implement the remaining system improvements at the Gas Compressor Building in Plant No. 2 to include upgrades to motors, compressors, gas dryers, and the rest of electrical & instrumentation systems. • The P2-79-1 project was originally advertised in March 2003, and sealed bids were received on April 29, 2003. Two bids were received for $475,000 and $645.000. Staff reviewed these P2-79-1 bids and determined that rebiding was in the best interest of the District, since all bids received were above the engineers estimate. and the design consultant affirmed their original construction estimate. • Staff recommended the rejection of P2-79-1 bids received on April 29. 2003. The Board approved this recommendation on June 25, 2003. • The P2-79-1 (Rebid) was advertised again in July 2003. G:\wp.dta\agenda\Board Agenda Repons12003 Board Agenda Reports\080311tem 15.P2-79-1.doc Revised: 8/10198 Page 1 v- • Sealed bids for Job No. P2-79-1 (Rebid) were received on July 29, 2003. Summary information on Job No. P2-79-1 budget and bids are as follows: Project Budget: $ 657,000 Construction Budget: $ 552,000 Engineer's Estimate: $ 349,600 Low Responsive Bid- $ 463,941 High Bid: $ 473,000 Number of Bids- 2 • After review of bids, and a second review of the engineers estimate. Staff has determined that the bid amounts are acceptable and within the project budget. The Director of Engineering recommends award of the construction contract to Adams/Mallory Construction Company.. Inc., for an amount not to exceed $463,941 . PRIOR COMMITTEE/BOARD ACTIONS During the June 25, 2003 meeting of the Board of Directors, the P2-79-1 original bids were rejected. The Board authorized Staff to rebid this project. PROJECT/CONTRACT COST SUMMARY Authorization of $463.941 for the construction contract is being requested. This authorization is within the Capital Improvement Projects — Utility Systems budget. Please refer to the attached Budget Information Table for more information. BUDGET IMPACT This item has been budgeted. ( FY 2003/04: Section 8. Page 83 ) ❑ This item has been budgeted, but there are insufficient funds. ❑ This item has not been budgeted. ❑ Not applicable (information item) ADDITIONAL INFORMATION This project will enable the Orange County Sanitation District to provide the necessary ventilation and gas detection at the Gas Compressor Building at Plant No. 2. to comply with the requirements of NFPA 820. ALTERNATIVES Not proceeding with project (no action). This alternative is not recommended because of the following impacts: G:Fwp.dta%agendWBoard Agenda Reports\2003 Board Agenda Reports\08011tem 15.P2-79-1.doc Revised: 8I10198 Page 2 J W 1 • Not all critical instrumentation upgrades will be implemented for this building. The presence of reliable low explosive level (LEL) gas detection is critical in order to ensure personnel safety at this building. • There will be inadequate air ventilation in the building if existing fans are not replaced. This will violate the NFPA 820 safety requirements. CEQA FINDINGS This project is exempt per CEQA and District's guidelines, Section 15301 (B). The Notice of exemption was filed with the County Clerk on March 17, 1998. ATTACHMENTS 1. Budget Information Table 2. Bid Tabulation 3. Bid Summary JS:ba:jo:ba Wntglobal\Agenda Draft Reports\Joint Boards\P2-79-1,AR to Award P&S&Contract.doc G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\080311tem 15.P2-79-1.doc Revised: 8/10/98 Page 3 BUDGET INFORMATION TABLE Gas Compressor Building Upgrades at Plant No. 2 JOB NO. P2-79-1 V it 00, 4',F WRIED"! t S ;.bjl� ATE&i-'� ESTIMATED" �WPEN ITU 610 ''1 ��'14WCTft KT�,- U H PROJECT- %1 .7'F J"J�11,11:4 Project Development $ 5,600 $ 5,600 $ 5,600 $ 5,600 $ - $ 5,600 $ 9,315 166% Preliminary Design $ - $ - $ - $ - $ - $ - $ - Design $ - $ - - $ - $ - $ - $ - Construction& Installation $ 349,960 $ 552,000 552,000 $ 2,821 $ 463,941 $ 466,762 $ 4,064 1% Commission $ 5,600 $ 30,400 $ 30,400 $ $ - $ I Closeout $ 12,800 $ 13,000 $ 13,000 $ $ - $ Contingency $ 13,200 $ 56,000 $ 56,000 $ $ - $ - PROJECT TOTAL $ 387,160 1 $ 657,0001 $ 1 $ 6557,000 $ 8,421 $ 463,941 1 $ 472,3621 $ 13,3791 3% lReimbursable Costs I $ - i1 11 1 PROJECT NET $ 387,1601 $ 657,000 1 $ 1 $ 657,000 $ 8,421 $ 463,941 $ 472,362 $ 13,379 3% This project was established for construction only.The budget for this project came from the parent project-P2-79-in order to expedite a portion of P2-79 construction. I h:kwp.dtaXongNobsontracts\J-33-1a\J-33-IA Const Award BIT Form Revised OcL 4,2000 E July 29, 2003 11:00 a.m. ADDENDUM N0.:2 BID TABULATION GAS COMPRESSOR BUILDING UPGRADES AT PLANT NO. 2 JOB NO. P2-79-1 (REBID) Engineer's Estimate: $349,960 Construction Contract Budget: $552,000 CONTRACTOR TOTAL BID 1 . ADAMS/MALLORY CONSTRUCTION CO., INC. $ 463,941 2. OLSSON CONSTRUCTION $ 473,000 3. $ 4. $ 5. $ 6. $ 7. $ 8. $ 1 have reviewed the proposals submitted for the above project and find that the low bid is a responsible bid. 1, therefore, recommend award to ADAMS/MALLORY CONSTRUCTION CO., INC. in the bid amount of $463,941 as the lowest and best bid. David A. Ludwin, P.E. Director of Engineering DAL:JB:jo 003751620 G:\wp.dta\agenda\Board Agenda Reports\2003 Board Agenda Reports\0803\Item 15.2.doc Revised 05/19/98 OCSD 9 P.O. Box 8127 • Fountain Valley,CA 92728-8127 • (714) 962-2411 BID SUMMARY GAS COMPRESSOR BUILDING UPGRADES AT PLANT NO. 2 JOB NO. P2-79-1 (REBID) Adams/Mallory Construction Co., Inc. Olsson Constructon Item Approx. Qty Unit Total Unit Total No. Price Price Price Price 1 1 Lump Sum $ 1,000.00 $ 1,000.00 $ - $ 2 1 Lump Sum $ 462,941.00 $ 462,941.00 $ 473,000.00 $ 473,000.00 Subtotal $ 463,941.00 $ - $ 473,000.00 Add or Delete WA R,# 9�90;00 Adams/Mallory Construction Co., Inc. Olsson Constructon 003751619 1 of 1 8/21/2003 ,--d4