HomeMy WebLinkAbout2008-08-27 ORANGE COUNTY SANITATION DISTRICT
August 20, 2008
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(71 41 982-2411 NOTICE OF MEETING
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92728-9127 BOARD OF DIRECTORS
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10844 Ellis Avenue
Fountain Valley.LA
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WEDNESDAY, AUGUST 27, 2008 — 6:30 P.M.
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County of Orange Operations Committee - Wednesday,September 3,2008 at 5:00 p.m.
se.aery District. GWRS Steering Committee - Monday,September 8,2008 at 5:30 p.m.@ OCWD
testa Mae. Administration Committee - Wednesday,September 10,2008 at 5:00 p.m.
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Water District. Steering Committee - Wednesday,September 17,2008 at 5:30 p.m.
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BOARD MEETING DATES
*September 17, 2008
October 22, 2008
'November 19, 2008
•December 17, 2008
January 28, 2009
February 25, 2009
March 25, 2009
April 22, 2009
May 27, 2009
June 24, 2009
July 22, 2009
August 26, 2009
'Meetings are being held on the third Wednesday of the month
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ROLL CALL
BOARD OF DIRECTORS
ORANGE COUNTY SANITATION DISTRICT
MEETING DATE &TIME: August 27. 2008 D .�50
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SIGN-IN SHEET
ORANGE COUNTY SANITATION DISTRICT
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NAME ORGANIZATION/FIRM
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STATE OF CALIFORNIA)
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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 the Orange County Sanitation
District to be held on August 27, 2008, was duly posted for public inspection in the main
lobby of the District's offices on August 21, 2008.
IN WITNESS WHEREOF, I have hereunto set my hand this 21 at day of August,
2008.
Penny M. Kyle, eierk of the Board
Board of Directors
Orange County Sanitation District
H:%DEPT\GMOkl5O\161\BS\FORMS\AGENDA CERTIFICATION.DOC
August 20,2008 it
MEMORANDUM
TO: Chair and Members of the Steering Committee
Orange County Sanitation District
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FROM: Jam D. Ruth
General Manager
SUBJECT: Fiscal Year 2007-2008 Review and Proposed Work Plan for 2008-2009
The following report reviews our organization's progress this past fiscal year against our
approved work plan which was outlined to the Steering Committee at our July 2007 meeting.
The report also describes our proposed goals and work plan for the 2008-2009 fiscal year and is
submitted for your review and consideration.
The 2007-08 fiscal year continued to bring many challenges to our organization, however
through the strong leadership of our Board and the standing committees, substantial progress
was achieved.
Once again,we demonstrated our resolve to achieving optimal operating efficiencies while
continuing to implement a very aggressive Capital Improvement Program as part of our
adopted $2.5 billion plan to protect the health and safety of the 2.5 million residents in our
service area.
In my report to the Steering Committee in July 2007, 1 outlined eleven goals that our
management team would focus on. I am pleased to inform you that significant progress has
been achieved in all eleven areas.
1. Ten Initiatives—As part of the 2006-07 and 2007-08 fiscal year budgets,the Board of
Directors approved ten initiatives for staff to pursue and implement. In our July 10,
2007 report to the Board,we informed you that seven of these initiatives (see attached)
had been completed. During this fiscal year,staff has completed the three remaining
initiatives: sustainable Biosolids Program, Air Emissions, and the IT Strategic Plan. Each
of these initiatives was approved by Board policy in our Five Year Strategic Plan adopted
in November 2007.
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Chair and Members of the Steering Committee
Page 2
July 16, 2008
2. Strategic Plan—The Board of Directors conducted four workshops focusing on major
policy issues impacting OCSD's short and long term operational and capital needs. On
November 28, 2007 the Steering Committee approved the Five Year Strategic Plan and
directed staff to develop specific goals,objectives, and performance measures to
implement the plan and incorporate that plan into our operating and capital budget for
the 2008-09 Fiscal Year and beyond. Those goals and performance measures will be
included as part of the new two year fiscal plan as well as our business plan.
3. Two-Year Budget—Staff has completed our first two year budget cycle and prepared
our new 2008-09 and 2009-10 budget for implementation beginning July 2008. The
2007-08 district operating expenditures will be within the Board approved budget and
the Capital Improvement Program activities at approximately 98%of our forecast. Our
Bond Rating remains AA, supported by a strong revenue base, assuring the continuation
of our approved levels of service.
4. Local Sewer Service Fees—City of Tustin and County Unincorporated Area North of
Tustin—Staff completed extensive studies of the North Tustin and County
unincorporated area north of Tustin and determined that our regional sewer system
was subsidizing the local sewer system. Therefore at Board direction, staff has
established a local fee to recover these costs and create an adequate reserve for future
capital needs. A rate structure has been adopted by the Board and will be implemented
effective July 1, 2008.
5. SARI Line—The Board approved a cooperative agreement between the County of
Orange, SAWPA, and OCSD to fund the relocation of the SARI Line. The Army Corps of
Engineers completed the draft EIR and released the document for public view. The
Design scope of work was completed, proposals have been received and consultants
selected for design and construction services. The Board of Supervisors should
authorize the design to proceed in September which will require twelve months to
complete in preparation to go to bid.
6. Prop 218—All Prop 218 requirements were met for our applicable revenue sources.
7. Management Training—AII members of our management team completed the
Profession of Management training program in an effort to build our bench, modify the
workplace culture, and prepare for the future. The POM program has been followed by
the formation of the Leadership Academy in cooperation with Pepperdine University.
The Leadership Academy is designed to identify and develop future leaders and refine
leadership skills of current high level managers and supervisors. Our first group of
fifteen managers is currently completing this six 4-hour session training program.
Chair and Members of the Steering Committee
Page 3
July 16, 2008
8. IT Strategic Plan and Governance Structure—The IT Strategic Plan was completed in
January 2008 and a governance structure put in place. IT Steering and Technical
Committees have been appointed and are meeting on a regular basis to look at best
practices, new technologies, setting priorities to meet ongoing and future Information
Technology needs for OCSO. The Strategic Plan was done in house at a cost savings of
$250,000.
9. GWRS Cooperative Project with OCWD—The cooperative project between OCSO and
OCWD has been completed and was dedicated on January 25, 2008. The project
received worldwide attention, came in on budget with a change order rate under 5%.
Each agency contributed approximately$245 million toward the project.
The project is designed to recycle up to 70 mgd. That recycled water will be pumped
into the ground to protect Orange County's water supply from seawater intrusion, the
balance of which will be pumped up to percolating basins in Anaheim where it will
supply drinking water for 500,000 residents.
10. Safety Division Audit—A management audit of our Safety& Health program was
conducted by Strategic Compliance Associates. The audit revealed no significant
findings however made 11 recommendations that need to be addressed. Staff is in the
process of implementingthe consultant's recommendations.
11. Engineering Work Plan for 2007-08—During the past fiscal year,the Engineering
department will have managed eighty-two (82) Capital Improvement Projects at a cost
of$2.23 billion. Of the 82 projects, eight (8)were completed within budget and with a
5.3%change order rate. Many of these are multiyear projects requiring a significant
amount of coordination,financial management, multi-agency participation, new
technologies and value engineering. A Fast Track Team was formed in March 2007 to
address a growing backlog of small projects. Approximately 81 projects were identified
with a combined annual budget of$4.5 million. Twenty-two (22) projects have been
completed to date with an estimated forty-five (45) projects scheduled for 2009.
12. Design Build—In addition to our eleven major goals for the current fiscal year,
significant progress was also achieved with the approval of SB645, Design Build
legislation. It is anticipated that our first Design Build project will be the Magnolia Truck
Sewer that is scheduled for contract award in the first quarter of 2009.
13. Research—Independent Peer Review Panel. Technical Services initiated an
independent review of our research program to obtain a national view of our ongoing
activities, determine if we are focusing on the right areas, and recommend which
organizations we should be collaborating with to optimize existing and future research
data. Review was completed in May. Staff is working with Carollo Engineers to rank and
Chair and Members of the Steering Committee
Page 4
July 16, 2008
prioritize the recommendations. A report should be submitted to the Board in
September.
14. Cost Savings—For the second straight year, staff achieved a $10 million savings in our
operating budget through creative and innovative ideas that increased efficiency and
reduced our operating costs.
15. North County Maintenance Yard—7311 Doig Drive, Garden Grove. Acquisition of this
site was completed in September 2006. NVA architects are working with our
engineering staff on the renovation of the existing building and parking facilities to
accommodate workable office space,equipment storage, maintenance area and
efficient parking spaces. The new facilities will house 35 employees initially with
possible expansion to 50 in the future. The construction contract is scheduled to award
in February 2009, with an estimated completion date of November 2009.
16. SAWPA Capacity Agreement—OCSD and SAWPA key staff members have been meeting
over the past several months to explore the possibility of consolidating several existing
operational agreements to better clarify our operational responsibilities, achieve better
coordination of our Capital Improvement Program and resolve several operational
issues. Substantial progress has been achieved to date with an expectation that a
workable agreement could be presented to our board early in the new fiscal year.
17. Evaluation of our Disinfection Practices—NWRI Blue Ribbon Panel Review—Staff has
met with a Blue Ribbon Panel of experts and has received over forty follow up questions
which we are currently responding to. Additional meetings will be scheduled in the
upcoming months to develop possible recommendations for the Board's consideration.
Proposed Work Plan 2008-2009
While much progress has been achieved during this past year,the Orange County Sanitation
District faces many new challenges as we address the state fiscal crisis, critical operational and
capital needs and potential new regulatory requirements.
Our proposed work plan for FY 2008& 2009 incorporates an aggressive program of continued
fiscal prudence while meeting our consent decree obligations, implementing our 360 million
dollar capital program and carrying out our Board approved strategic plan.
Under the Board of Directors strong leadership,the District has actually improved our bond
rating with Standard & Poor's from AA to AAA, with Fitch agreeing to revisit our rating in the
near future and Moody's holding our rate at AA.The Board's approval of our five year rates
contributed significantly to this excellent rating.
Chair and Members of the Steering Committee
Page 5
July 16, 2008
1. Strategic Plan Update—With the adoption of our Strategic Plan by the Board of
Directors in November 2007, specific policy direction to staff has been given for
implementation. Goals and objectives and performance measures have been developed
to monitor progress against our agreed upon work plan. A workshop with the Board is
planned in the November—December time frame to update the plan so that we always
have a 5 year plan in place.
2. SAWPA Agreement—Our staff continues to meet with SAWPA management to
consolidate five existing agreements into one document and to clarify existing language
as well as addressing several operational issues. Final documents should be presented
to our Board early in the 2008 fiscal year for your review, consideration and action.
3. IRWD—Staff has held preliminary meetings with IRWD executive and operational staff
to address operational and financial issues between our respective agencies.
Considerable information has been exchanged to date with future meetings scheduled
with the goal of consolidating existing agreements, clarifying existing language and
resolving outstanding operational and financial issues. Cooperation has been excellent
in our collective efforts to complete this project. Staff expects to bring forth our report
to the Board by early Fall 2008.
4. Budget—Staff will continue to follow the state fiscal crisis in an effort to minimize any
fiscal impacts it might have on local government and specifically special districts. We
are working closely with CASA as well as our own Sacramento lobbyist to protect our
interests.
5. SARI Line—With the certification of the EIR and the pending award of contract for the
design and project management of this 100 million dollar project in September 2008,
the bidding, award and construction should take place in October 2009. Estimated
construction completion is August 2011. Interim funding is in place by the County of
Orange, OCSD,and SAWPA. OCSD will continue to pursue federal and state funding to
reimburse our agencies for this project.
6. Capital Improvement Plan 2008-2009—During the 2008-2009 fiscal year staff will
manage seventy-three (73) projects with an annual expenditure of 360 million dollars.
Our goal is to meet all schedules, stay within Board approved budget, and to manage
change orders at 5%or less.
7. Training—The second session of our Leadership Academy training program will begin in
August 2008. Fifteen (15) EMT and manager level staff will complete the
six 4-hour training sessions on July 31.The program is designed to develop leadership
skills, build our bench and prepare for the future.
Chair and Members of the Steering Committee
Page 6
July 16, 2008
8. Internal Audit—During FY 2008-2009,the Board-appointed audit committee,working
with the auditing firm of Lance Soll and Lunghard, will review construction contractor
payments, employee expense reports, internal controls related to payments of contract
employees and review controls and procedures related to change orders.
9. Biosolids—In accordance with our Strategic Plan,staff is preparing an RFP to explore
long-term alternatives for the remaining one third of our biosolids production which are
not committed to long-term contracts.Through this process staff will also look at new
markets and new technologies to deal with our long-term needs.
10. Safety and Security—Final design of our facility security and alert systems is in progress
with project completion estimated to take twelve(12)to eighteen (18) months. Staff is
pursuing federal funding to help in this endeavor. Staff will work with OCWD to develop
a comprehensive,coordinated security plan between our respective agencies.
11. Design Build—With the approval of SB645, staff has selected the Magnolia trunk sewer
line as our fist design build project. With the assistance of an outside consultant, plans
and specifications are being prepared to go to bid in March 2009.
12. GWRS—The Board Oversight Committees from OCWD and OCSD will consider reducing
the number of meetings in the new fiscal year. OCSD is committed to meeting our
contractual obligations and is investigating ways in which our respective agencies could
possibly reduce operating costs through cooperative purchasing,training,security,and
maintenance agreements.
13. Employee Recognition Program—Our Human Resources division is working with our
management team to develop a comprehensive employee recognition program
designed to recognize exceptional performance and create a positive work
environment.
14. Air Quality—Staff is evaluating alternatives for meeting new stringent air emission
standards established by the SCAQMD. Staff will identify a technology and start the
planning and design process to demonstrate its feasibility in order to meet a July 2010
regulatory deadline.
15. Odor Control—Since 2002, OCSD has expended$36,558,000 on odor control projects,
with an additional$1,220,0D0 budgeted for the next two years. An additional
$52,358,000 of odor control improvements has been planned over the next eight years
in accordance with our strategic plan and board policy direction.
16. Cost Savings—Staff will continue to look for cost savings in all areas of our operations,
with a focus on cost containment in our health benefits programs.
Chair and Members of the Steering Committee
Page 7
July 16, 2008
17. Public Outreach—In an effort to increase our level of outreach efforts,a video has been
produced depicting an overview of our mission and operations to better inform a variety
of audiences about the critical services we provide. Additional public service
announcements are also being produced to air on local cable networks.
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Strategic Initiatives for FY 2006-07& FY 2007-08
Initiative Strategic Importance Desired Outcome Next steps
1. Local Sewer Services Knowing total cost of Adequately resourced kcal Determine the role of
ownership,related sewer O&M pro-gram; Asset Management;
revenue streams,&future Reduce subsidies from Identify local agencies
rehab.&repl. needs. regional program. consolidations.
2. Secondary Treatment Meeting the desired Operating secondary Continuous Monitoring and
Interim Operations service levels of the facilities to produce the reporting of ongoing
District's customers. best quality effluent treatment levels and coats.
possible.
3. Research Evaluation Constantly look for ways Creation of coordinated& Identify problems with
and Alignment to improve current service structured R&D Program current R&D Mons;
levels and reduced costs. to maximize the success of Survey other agencies;
these efforts;Pursue R&D Identify possible solutions;
grant funds. Make recommendations.
4. Odor Nuisance Policy No policy exists leading to An Odor Nuisance Policy Develop a scope of work
a lack of clarity for odor establishing a level of to evaluate the current
control projects, level of service of our treatment level of odor nuisance
service and the dedication plants and collection affecting our communities,
of resources. systems.
5. *Engine Emission Need for an engine Adoption of a policy to Develop a scope of work
Compliance emissions compliance meet AQMD require- for an Air Toxics
strategy to meet AQMD ments through future Emission Reduction
requirements. capital investment. Strategic Plan for the
two treatment plants.
6. Business Plan Identification of the A Five-Year Business Plan Continued development of
programs and initiatives that is updated annually the Two-Year Business
required to accomplish the and addresses the long Plan Included in this 2008-
Dlstrict's vision and term sustainabilily of the 07&2007-08 Budget.
mission. District.
7. Asset Management AM Is a proven strategy to Obtain an understanding of Continue implementation
simultaneously balance Infrastructure risk so that of the existing program.
level of service,cost of better decisions can be
service,risk,and made on capital and O&M
willingness to pay. expenditures.
8. 'Manage and Biosolida Management Implement blosolids Development of the
Optimize a Is a major priority as long-range plan that tasks,schedule,and
Sustainable lov most options have Includes consumer budget to achieve the
Blosolids Program disappeared. products and overall desired results.
volume reduction.
g. Plan and Maintain a Optimize investments in A long range cost-effective A revised CIP budget is
Sustainable Capital infrastructure while CIP Program to meet Included In this budget.
Improvement balancing level of service, current and future capacity Input from the CIP
Program risk,and user rates. and level of treatment Ovenaght Committee will
needs. continue.
10. -Information Leveraged Technology Prioritize,schedule,and Update of the IT
Technology In support of operations coordinate IT resources Strategic Plan through
Strategic Plan will Increase efficiency with the goal of the development of a
and effectiveness. achieving the District's scope of work.
business plan.
July 2007: '...Remaining three inithadvas covering a sustainable Blosollds program,AlrEmisslons, and fhe lT
Strateglic Plan. Staff has completed the other seven initiatives approved by Me Board...'
AGENDA
BOARD OF DIRECTORS
ORANGE COUNTY SANITATION DISTRICT
DISTRICT'S ADMINISTRATIVE OFFICES
10844 ELLIS AVENUE
FOUNTAIN VALLEY, CA 92708
REGULAR MEETING
August 27, 2008 — 6:30 P.M.
1. Invocation and Pledge of Allegiance (Harry Sidhu—Anaheim)
2. Roll Call
3. Consideration of motion to receive and file minute excerpts of member agencies relating
to appointment of Directors, if any.
4. Public Comments
5. The Chair, General Manager and General Counsel may 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.
6. Ratifying payment of claims of the District, by roll call vote, as follows:
ALL DISTRICTS 07/15/08 07/31/08
Totals $16,863,615.02 $55,318,925.56
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.
08/27108
Page 2
CONSENT CALENDAR
7. Consideration of motion to approve all agenda items appearing on the Consent Calendar
not specifically removed from same, as follows:
a. Order the minutes for the regular meeting held on July 23, 2008, to be filed and
deemed approved, as mailed.
b. Approve an agreement with Air Products and Chemicals Inc., for installation and
pilot testing for Fuel Cell Hydrogen Gas Generation, Project No. SPA 34, at a
cost not to exceed $200,000, in a form approved by General Counsel.
C. Approve a Memorandum of Understanding Agreement with Irvine Ranch Water
District to obtain the services of an Engineering Consultant to update billing
methodologies for an amount not to exceed $100,000, in a form approved by
General Counsel.
d. 1) Adopt Resolution No. OCSD08-14, Proclaiming "No Drugs Down the Drain
Week"; and,
2) Request member agencies to declare their support for said program by
adopting a "No Drugs Down the Drain Week" proclamation and utilizing the No
Drugs Down the Drain Week Press Kit.
e. Approve waiver of OCSD Policies and Procedures Manual, Recruitment and
Selection Policy 1.4, Section 6.1.6, to allow former employee, Jon Thomsic, to
work on CIP projects while employed by Lee& Ro, Inc.
COMMITTEE REPORTS AND RECOMMENDED ACTIONS
8. STEERING COMMITTEE
Consent Calendar
a. Order Steering Committee Minutes for the meeting held on July 23, 2008 to be
filed.
9. GWR SYSTEM STEERING COMMITTEE(GWRSSC)
GWRSSC Consent Calendar
a. Order Joint Groundwater Replenishment System Steering Committee Minutes for
the meeting held on July 14, 2008, to be filed.
b. Ratify Change Order No. 138 to the Advanced Water Purification Facility contract
of the Groundwater Replenishment System, Job No. J-36, with J.F. Shea
Construction Inc., authorizing an additional amount of$3,439,150, increasing the
total contract amount to$301,851,409, to be cost-shared equally with the Orange
County Water District($1,719,575).
08/27/08
Page 3
C. Approve Amendment No. 10 to the Professional Services Agreement with
Montgomery Watson Harza for the Groundwater Replenishment System, Job No.
J-36, providing for additional construction management services for an additional
amount of$140,000, increasing the total amount not to exceed $15,447,661 to
be cost-shared equally with the Orange County Water District ($70,000).
NON-CONSENT CALENDAR
10. a) Approve Plans and Specifications for the Newport Trunk Sewer and Force Mains,
Bitter Point Pump Station to Coast Trunk Sewer, Contract No. 5-58. on file at the
office of the Clerk of the Board;
b) Approve Addenda No. 1, 2, 3, 4 and 5 to the plans and specifications;
c) Receive and file bid tabulation and recommendation;
d) Approve a contract with Mladen Buntich Construction Co. for the construction of
the Newport Trunk Sewer and Force Mains, Bitter Point Pump Station to Coast
Trunk Sewer, Contract No. 5-58 for a total amount not to exceed $18,512,931;
and,
e) Approve a contingency of$925,647 (5%).
11. Adopt Resolution No. OCSD08-15, 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 Refunding Certificates of Participation, Series 2008B, Authorizing the Execution
and Delivery of such Certificates Evidencing Principal in an Aggregate Amount of Not to
Exceed $32,000,000, 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 Related Actions.
12. Recess by Board of Directors, Orange County Sanitation District
13. Call to Order, Board of Directors, Orange County Sanitation District Financing
Corporation:
a. Roll Call
b. Report of the Director of Finance
C. Adopt Resolution No. FC-07, a Resolution of the Board of Directors of the
Orange County Sanitation District Finance Corporation Authorizing the Execution
and Delivery by the Corporation 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, Refunding Series 20088,Authorizing the Execution and Delivery of
such Certificates Evidencing Principal in an Aggregate Amount of Not to Exceed
$32,000,000,Authorizing the Distribution of an Official Notice Inviting Bids and
an Official Statement in Connection with the Offering and Sale of such
08/27/08
Page 4
Certificates and Authorizing the Execution of Necessary Documents and Related
Actions.
14. Adjourn, Board of Directors, Orange County Sanitation District Financing Corporation.
15. Reconvene, Board of Directors, Orange County Sanitation District
16. Closed Session
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. CONFERENCE WITH LABOR NEGOTIATORS
(Government Code Section 54957(b)(1))
Agency Designated Representatives: Doug Davert, Larry Crandall, Jim
Ferryman
Employee: James D. Ruth
b. Reconvene in regular session
C. Consideration of action, if any, on matters considered in closed session
d. Approve revised contract with James D. Ruth, General Manager.
17. Other business and communications or supplemental agenda items, if any.
18. Adjournment-The next Board of Directors regular meeting is scheduled for
September 17, 2008, at 6:30 p.m.
r 08/27/08
Page 5
Agenda Posting: 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 public records relating to each agenda hem,including any public records distributed less
than 72 hours prior to the meeting to all,or a majority of all,of the members of District's Board,are available for
public inspection in the office of the Clerk of the Board,located at 10844 Ellis Avenue, Fountain Valley,California.
Items Not Posted: 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 Rem or because
there is a need to take immediate action,which need came to the attention of the Board subsequent to the posting of
agenda,or as set forth on a supplemental agenda posted in the manner as above,not less than 72 hours prior to the
meeting date.
Public Comments: Any member of the public may address the Board of Directors on specific agenda items or
matters of general interest. As determined by the Chair,speakers may be defamed 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). If you wish to speak, please complete a
Speakers Form(located at the table outside of the Board Room)and give it to the Clerk of the Board.
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.
Items Continued: Items may be continued from this meeting without further notice to a Committee or Board meeting
held within five(5)days of this meefing per Government Code Section 54954.2(b)(3).
Meeting Adioumment: This meeting may be adjourned to a later time and items of business from this agenda may
be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code
Section 54955(posted within 24 hours).
Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you require
any special disability related accommodations,please contact the Orange County Sanitation District Clerk of the
Boerd's office at(714)593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature
gf the disability and Metype of accommodation requested.
r................................................................................................................................................ ................................... ................................
;
'NOTICE TO DIRECTORS:To place items on the agenda for the Regular Meeting of the Board of
?Directors, items shall be submitted to the Clerk of the Board no later than the close of business 14 days
'preceding the Board meeting. The Clerk of the Board shall include on the agenda all items submitted by
!Directors,the Geneml Manager and General Counsel and all formal communications.
!General Manager James D. Ruth (714)593-7110 iruth@ocsd.cem
:Assistant General Manager Bob Ghirelli (714)593-7400 mhirelliCalocsd.com
'Clerk of the Board Penny Kyle (714)593-7130 okvle0ocsd.com
;Director of Engineering Jim Herberg (714)593-7300 iherbenjiffi csd.com
'Director of Fin.&Admin Services Lorenzo Tyner (714)593-7550 ItvnerGDocsd.com
.Director of Operations& Nick Arhontes (714)593-7210 namontes(glocsci.com
Maintenance
:Director of Technical Services Ed Tortes (714)593-7D80 etorresQocsd.cem
General Counsel _Brad Hogm (714)415-1008 bho in cuss-law.wm_
H:Wep0agendareoard Agendas@00e Board Agendasa7M909 draft agenda.doc
BOARD OF DIRECTORS Me n9Date To ad.ofDw.
08/27/08
_I AGENDA REPORT I[em NumberIem Nu be
6
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
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.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
See attached listing.
ATTACHMENTS
1. Copies of Claims Paid reports from 07/01/08 - 07/15/08 and 07/16/08 - 07/31/08
FO".NO IU3 IpwWR —FLAIR
oeq azo RamE- nla000
Page 1
Claims Pam From 07101105 to 07015s8
Warrant No. Vendor Amoum Description
Accounts Parable-Warren
12241 Blue Cross of CalifnrPe 5 471,951.21 Medical Insurance Premium
t2242 Vended Check - -
Tn43 CAiper Life Sciences.Inc. 35.351.01 Instument Pont,&Supplies
12244 Camp Dresser&McKee.Inc. 94,313.94 Professional Services J47
12245 CeNlocIr Fund Systems,Inc. 25M&W Fuel Cam Program-Disbitl Vehicles&Monilonrg Vessel
122es Canis Engineers 172,227.87 Professional Services P24m
12247 Corporate Inge Maintenance,Inc. 36.457.50 Custodial Servos Spec No.911 9
12248 Della Dental W.449.98 Dental Insurance Plan
12249 Ekldm Bons,Inc. 25.f186.94 Repair B Coming ot(13)Loading Bell Rdlers
12260 HDR Engmamng,Inc. 48.664.W Professional Servces P14t2
12251 JLI Jones Chamids,Inc 94,168.76 Sodium Hypochlonle
12252 Kaiser Foundation HeeM Plan 84,265.48 Medical Insuance Premium
MW Kemuon Companies.Inc. 63,544.54 Ferric Lhionde
Meat Labwam,Inc. 30,668.80 SoBrvars-Annual Periodic Upgrade&Maintenance-MA
12255 LAeny Mutual Insurance Comparry 25,322.42 OCIP lesuance-Liability&Wo*eW Camp-l at lnctatiment
122W Malcolm Firms,Inc. 42256.53 Professional Services 1`2A0
12251 NRG Engine Services.L.L.C. 114,487.W Repair&Maintenance Servlma-40,000 Hrs.Cen-Ge oGen Overands At Pit 18 PIL2
122M NMI National Water Research Institute 50.0010,1113, NWRI Membership
12259 Orange County Water District 85.625.88 Green Acres Water Pojecl(GAP)
12M Polydyne.Inc. 31,815.314 Cahenic Polymer MO 3-11-92
12261 Scenes Applications International 40,741.00 Ocean Mo forirs MO F Bsl
t22r12 So CA Gas Company 44,376.42 Neural Gas
12263 Southern Califamia Edison 23,548.30 Power
12284 Synagm West.lu. 664894.15 Reddueb Removal MO 129-95
12285 Term Renewal.L.L.L. BST21.81 Grit&Screenings Removal&Digester Drying Bad Material Renvel
Ines US Panora,L.L.C. 143.161 Oder&Corrosion Control Treatment for Cot.By&:Hydrogen Female&Ferrous CSlonde
12267 V&A Consulting Engineers 50.310.O7 Prof.Serv.-ReviewlAssess E.ISMig CM Sarver Lamaism Tapes Re Physical Conliilion of OCSD Sewer
12M J F Shea Construction,Inc. 1.033.057.30 Construction P2-74
1220 A W Chaslenon 6.571.88 Mechanical Pairs&Supplies
IXR0 Abel Pumps Core. 1.610.96 Machunical Pan.&Supplies
12271 Advanced Engine TeUuclogles Co, 12,40625 Air Quality Monilomg-RATA Tearing
122T2 AerMek 14,00224 Temporary Employment Senecas
122T3 Abgas Safety,Inc. 16.921.97 Safely Supplies
12274 Alrambra Foundry Co.,Ltd. 20,2M.W Manhole Frames&Covers
12275 Ah Robbine.Inc. 74.69 mruumenm Supplies
12276 Annran Akinea 1,714S0 Tmcel Services
12227 Applied Industrial TecMnlogy 1.341.97 Mechanical Pena&Supplies
12278 Ashbrook Corporation Lei Mechanical Pan.&Supplies
122T9 AT B T Long OiMance 2.379.69 Telephone ServNs
1228g AT&T Mobility 11,L.L.C. 7.145.12 Wireless Teephone Services
12281 AWlrsnn,Andelaon,Loa,Rudd&Ruud 3,850.011 Legal Services-Employee Relations
12202 The Mae.Consul 2,323.82 Professional Services J-97
12283 AWSI 1,280.15 Department of Tmnsponalion Program Management&Testing
1=4 &mania Consuhing,Inc. 1,OW.00 Training Regi.irsibn
12285 Bar Tech Telecom,Inmrporated 4,750.00 Considers Sernces Re Shertel VOIP Swilch Concemion
12286 Bass,Chemical Solutions,L.L.C. 23,40226 sodium BbuiSte&Sodium HyErora
12283 BC Wae Rope B Rigging 1."8.47 Mechanical Pans&Supplies
12288 Bennett Bowen Lighthouse 4,282.60 Instiumme Pads&Supplies
Ines SM Management Consulting 1205.00 Professional SBrvs.-Strategic Planning&Faceilatrrg Bernier for EMT Remand&Bond Workshops,
12290 BloMerieua Ytek,Inc. 3,610.19 Lab Pens&Supplies
Mel Blaa,&Vicy"Corporation W.W.43 Professional Services Pt-76&})7
B:wW`a4'F%GEL.aupFaaSlaaE1P®m.P®1 RmorrnAnciaivPa secrt WrAmeN A_p1-tsoaAll EK4IBITA
1N21mp Page 1 of 8 wnyypa
Claims Pale From 07101108 to 07I15108
Warrant No. Veneer Amount DPscHption
12292 BOMlogislix L.L.C. 4.a50.00 Prol So, -Proportion of Interim Arbitrage Rebels R...it Re 1003 Sends COP.
1220 California Climate Allied Registry 1,803.33 Annual Registry ParocipaWn Fee
12294 Calendars Gain of Child Supped 1.263.35 Wage Gamishmenl
12285 California Recreation Company 2,833.67 Boat Slip Rental Fees for Credit Monitoring Vessel Names
12296 Cambrd,beeper Labs 4,150.08 lab Pans 8 Supplies
12297 Can Warren 6 Co. 758.02 Insurance Claims Administrator
12M Career Sales 8 Disbibution,L L C. 141.73 Electrical Pans 8 Supplies
12299 CASA 2.125.00 Meeting Registration-Division 110.15087 10
123V0 Circle,Ina 1282.16 Office Supplies-Toner Cartridges
12301 Clean Harbors Environmental Services 5.9901 Hazardous Waste Management Services
12302 Voided Checi, -
12303 Complicated Electoral Dislnbulo,Inc. WAS Electrical Pads 8 Supplies
12304 Consumers Pipe 6 Supply Co. 33.45 Plumbing Paris 8 Supplies
12305 Conirclle0 Motion Solutions 141.54 Mechanical Pans 8 Supplies
12306 Corporaro Express 447.95 Office Supplies
12307 County of Orange Auditor Conpoilm 17.50 Encroachment Pemrii
123DO Coanyof Orem2e Auditor Ccuithabr 4n.00 Eneeaamenl Permit
12M CX C 394.52 Compuler HerOwaralSollware
12310 DWOUP 1.920.00 Professional Sarvias-Sonoma Upgrale-Exchange 2W7
12311 Orbek B Associates.Inc. 13429.80 Professional Services P268
12312 Dwyer Instruments,Inc. 205.28 Instrument Pans 8 Supplies
IM13 Eagle Ph11echon of California 275.00 BMg.Security Alarm Services-No.County Yard
12011 ENcl Air 458.91 Instrument Pads B Supplie.
12315 En kni Benefits Specialists.Inc. 12.122.53 Reimbursed Prepaid Employee Medical 6 Dependent Care
12316 E.Corporetion 1,840.00 Repair B Maintenance Materiels
12312 Emhonmenul Consulting 6 Supplies.Inc. 79.00 Lab Pads B Supplies
12318 Environmental Resource Associates 1.41)(11 Lab Pads 6 Supplies
12319 Envbommenlel Sampling Supply 1WA I Lab Pads 8 Supplies
12320 Email nmenlal Water Solutonu,Inc. 5AN.62 Pump
12321 Fides 310.14 Poo l Sardines
12322 Ferguson Enterprises.Inc. 1.223.N Mechanical Pads 8 Supplies
12323 Fisher Scientific Company,L.L.C. 275.21 Leo Pads O Supplies
12324 Franchise This Spent 50.00 Wags Garnishment
12325 George Yandley Ce. 147.76 Instrument Paris B Supplies
123M Giedicli Mitchell.Inc. 3,1 pumps 8 Pump Paris
12327 Gabel Awams.Ina 1,829.W Asset Tags
12328 Gai Slate Chterru9hl Delivery Bonn. 192.08 Conner Service
12329 Golden State Witter company 111.33 Water Use
12330 Goldenwesl Cory. 4,060.00 Larchape Maintenance.Wand Abatement,and Hardsape Repairs
12331 Grainger.Inc. 1.5T0.07 Electrical Paris.Supplies 6 Tools
12332 Greybar Electric Company 45.71 Mechanical Pads 6 Supplies
12333 Great Western Sanitary Supplies 142.88 Janitorial Supplies
123M Hach do Portion Industries 1)28.93 lab Pads 8 Supplies
12335 Hamngmn Industrial Plastics Inc. 1.038.93 mechanics Pads 6 Supplies
12338 Health Science Associates 68715 Professional Servies-Asbeslpa Study
12337 Hill Brothers 17.261.72 Chemicals-268 Qhoguao)
12338 Hills Boat Service,Inc. 800.23 016 Filler Change-Ocean Monitoring Vessel Nerisa
12339 Hub Auto Supply 49.52 Vehicle Pad.A Supplies
12NO City of Huntington Beach 14.112.70 Water Use
12311 Information Handling Services 219.00 Publication.B Books
12342 Indiana Child Supped Bureau 290.00 Wage Garnishment
12343 Industrial Distribution Group 1,067.11 Tools B Maintenance Supplies
nwpMalElCEL.do .. shOc4m.ern EXHIBITA
arzlox Page 2 of 8 wlarzaoe
Claims Paid From 0T101I08 to 0711510B
INMI ft. Veal0ar Amount Description
12344 Industrial Thmeded Products,Inc. 394.93 Iirventory Fasteners
12345 Inflm De0mmonl,Inc. 8,898.86 Be.Rakes
12346 Introstructum Engineerilp Cmp. 432.50 Professional Services FE02d6
1Mu17 Internal Rwenua Service 175.00 Wage Garnishment
12US Intl.Union of Open.En,AFL CIO Wcal 5(1 4,6R.41 Dues Deduction
12349 Inre ,Systems.Inc. 5.240.18 Instrmnmd Pads 8 Supplies
12350 Irvine Pipe B SUP* 2,023.02 Iron Prang
12351 Initial Rani Wallis District 8.48 Water Use
I J 6 L Industrial Supply 127.46 Tools
12353 JG Tudsor And San,Inc. 070.00 Road Cones
123U LECO Corporation 458.71 Lab Pam B Supplies
12355 Court Order MIX) Walla Garnishment
12358 Lmmen Education Services 35BW Training ReOistmtion
12357 MCMastenGart 316.01 Lab Pam B Supplies
1058 MAG Systems 3,443.42 Electrical Perk B Supplies
1235E Mabdananm Techmlogy Cam. 598.16 Mechanical Pam B Supplies
12360 MWunkin Red Men Cmmralbn 1,818.99 Mechanical Pens 0 Supplies
12MI McLean Thermal BB3.00 Electrical Paris B Supplier
12362 McMaster Can Supply Co. 722.66 U.S.8 Sfete of CA Flag Sets 6 Mint.Supplies
12363 Mwlin Controls Co. 2,213.41 Instrument Parts B Supplies
12364 Midway Mfg.6 Machining Co. 4.283.06 Mechanical Pelts.Supplies 6 Runnels
12M CpodOrder 225.00 Wags Garnishment
12M Municisl Informed.Byrd.Assst. 240.00 Membership
12367 NAS Associates,Inc. 381.W Lab Paris 8 Supplies
1238E NATEC International,Inc. 391 Two,Rngrstrefon
12389 National Bond B Tons 1,751.49 U.S.Sandi Bonds Payroll Deductions
123T0 Neutron ProduW,Inc. 5,931.T0 Anonc Polymer
12321 Newark Electronics 241 Instrument Supplies
12372 City of Newporl Beech 141 Water Uses
12373 NMI National Water Research Institute 9,503.32 0CSD Disinfec0on Panel Meson-Apni l.2W8(Wear Researc &B nsery Wn of MaNne Response)
12374 OCS Ropeopaphla 22,228.05 Printing Serves-MO 126NO
12375 OCEA 570.58 Dues Deducion
123M OMRON IDM Control,Inc. 4)51.84 Instrument Pads S Supplies
12377 Constance D imbuons,Inc. 78.58 Etesical Supplies
123M Orange County Hale Company 1 W.02 Hydmufic Hoe Supplies 6 Pads
12379 Carl County Sheriff 783.58 Wage Garnishment
12M Orange County Tax Collector 51.78 Unsecured Property Texas-Rocky Point Pump Ste.
12381 Ornmga County Tex Collector III Unsecured Propedy Taxes-Rocky Point Pump Ste.
12382 Orange Counl United Wey W.W Employee Construtions
12383 Orange Fluid System Tachnoogiea Inc. 1,481113 Hydraulic How Supplies 8 Pads
12W Oxygen Service Company 1,242.59 Lab Party B Supplies
12385 Michael Puccid 125.00 Mening?Imining Expense Reimbursement
1=6 Pacific Mechanical Supply 557.29 Plvmbfrg Supplies
12387 PCS Express.Inc. 202A1 Courier Service
12W Peen CRmm Council of CA 2.014.74 Dual Deduction,Superdense B Professionals
12389 Pedmmnmm Pipeline Technologies 17,001.61) SewmHne Video Inspections-Various
12390 Phenomenex $92.49 Lab Pads S Supplies
12391 PL Haan Comfort,Inc. 609.72 EIesINcal Pads B Supplies
12392 Pon Supply 33.61 Raper 6 Maintenance Materials-Ocean Monitoring Vessel Names
12383 Pnmm-E,Ltd. 1,485.00 SONwere-PRIMER v6
lVdal Propipe Professional Pipe Services 17.814.07 SaseNhe Video Inspiumms
IM95 Rainin Instrument.L.L.C. 247.58 Lab Parts 8 Supplies
M.brPIIrsNEllCEL eItlIMMPSIUFFCItlnaPW AepM4mBlCla'msPai4gePon-Amammenl_a_m.IS.d.. EXHIBITA
fiWIINe Paga3afe On.
Claims Pam Phase 07MIMB to O711M
Warrant No. Vermol Amount Description
12M Rerri Pens 8 Componenls.Inc. 1,242.80 Mechanical Pens S Supplies
12397 RMB En9ineenr,0 Sales.Inc. 8.190.00 Instrument Supplies
12398 RMS Engineemng B Design,Inc. 365.00 Facilities Engineering Mnual Design Services
12399 Rockuret Cnikgo Continuing Education 398.00 Tmining Repseelion
124M Rierne0 Englnaemg 8 Eaulpment Do 5.822.49 Vaughan Submersible Chopper Pump
12401 Royale Clusters 654.50 Dry Cleaning Services
124M SAMA(Santa Ma Wale,Protection Agmi 10,000.00 M7-OS Mnual Contribution-Plmse III Slorm Water Quality Task Force
12403 SC Frail!Technical Services 8,014.04 Repair&Maintenance Services-12-Vamc Pressure Vent Valve
124N SCMUT 7,500.00 Membership 08109-Decision Package Supporting So.CA Association of Manna Invertebrate Taxonomlals
12405 SCESA 450.00 Meeting Registraton-Div.153
124M Scleang Beirut 11,TN.40 Pump Pens 8 Supplies
12407 Sonll Specialty Gases,Inc. 338.34 Lab Pans 8 Supplies
1NDS See Bird Elechonics,Inc. 336.00 Lab Instrument Mainlenance 8 Calibration Sensors
12409 Sepandion Processes.Inc. 4.915.00 Engineering Services J-36
1N10 Shamrock Supply Co.,Inc. 1.795.46 Janilontal Suppiles B Locks
12411 Shuraluck Sales 8 Engineering 340.71 Mechanical Pans 8 Supplies
1N12 South Coast Shipyard.Inc. 7,9112.06 Preventative Maintenance-Nausea Ocean Mohilomg Vessel
12413 Southern Counties Lubricants 2,822.96 Oil
12414 SpaMlons 1.004.29 Domain,Walm/Cooler Rentals
1N15 Straining Instruments.Inc 2.794.98 MaghatiC Flow Melmisl
1N16 Spectrum Laboratory Products,Inc 112.62 Lab Pens B Supplies
12417 State Water Resonroes Control Board 9.605.40 SupWemereal Environment Pro,act(SEP)Refund-Flrol Reponl
IN18 STl Coetroles 685.97 Instrument Paris B Supplies
1N19 Sick-II Up III Maintenance Supplies
1N" Summit Steel 1,76097 Metal
1N21 Sunset Ford 6580 Vehicle Pans B Service
124U Sureel Industrial Pans 435.63 Mechanical Pans 6 Supplies
12423 Taco Factory 98.59 Meemg Eileen...
12424 Trmeek tatemallonai Pest Control 435.00 Pest Coned
1N25 Testamsnce Ontario MAN Analysis of Bimolids
124M Thanpson Industrial Supply,Inc. 3.410.74 MCWanical Pans B Supplies
12427 Time Warner Commornranki 51.63 Cable Services
12428 Toed Pending,Inc. 4,170.110 Penn,Services
12429 Then,Pool Servkes 310.00 Weekly Cleaning of AMum Pond
12430 Traffic Control Service.Inc. 3,807.15 Trebc Safely SupplleslRent is
12431 The Treinkg Clink 3,335.35 On-Site Training-Leadership Competency Development
12432 Thermal 2,389.78 Instrument Pans 8 Supplies
12433 T.Incorporated 2,5W.00 Preventative Roof Maintenance-Mmimstration Bld,
124N Untied Parcel Service MA1 Parcel Services
1N35 UnI.1 Plem Simons 2.74141 Repair B Maintenance-Blower Housing
124M Veriaon Celifomia 908]5 Telephone Services
12437 Vern YYreless 708.95 Wrreleas Telephone Services
iN38 Vemes Memoir, 175.00 Service Contract-Testing,RepairBCen.Backnow Devices el Pill.1828 Pump Sts
12439 Vision Service Plan CA 9,540.00 Vision Service Premium
12440 MR Scientific Product 1,492.64 Lab Pens B Supplies
12441 Wastewater Teclmodo,Than. 6.570A0 Training Regisiratian
12442 Weems Sanitary Supply 825.72 Janilonsi Supplies
12413 Workplace Resource 2,960AD Office Furniture-Chains
12444 Wo ld At Work 1,050.00 Tmining Registration
12445 YalelChese Materiels Handling,Inc. 2,143.50 ElecNc Can Pans
1N46 Coral Order 912.50 We,e Gamemoent
1N47 4X Ok moNira.L.L.C. 3,450.00 Soybeans
rtWgaWFIteELmeVNM9HaNfltWm PSG u. EXHIBITA
m¢tpee Page 4 of 8 sns000e
Claims Pam From 07101108 to O7I1M08
warred No. Vastly, Amount Description
12418 Claimed,And. 25(kW MmunglTrammi,Epense Reimbursement
1N49 Mrtleel J.ffamtl 2W.00 Masymy Truning FVense Reimbursement
12450 Emesm Cutro 1M.W Meetingrrmining Expense Reimbursemenl
12451 Viceri. L.Frantla 8N.44 Meeting/Training Expense Reimbursement
1202 Tod E Holmes 378.13 Mendegrbeining Expense Reimbursement
1N53 "pay,J.Rocky 151flM MeaingrTravting Expense Reimbursement
1NS1 Deane T.SmiM 195.W MaeingrTmining Expeny,Reimbursement
1N55 K.T.Tien 195.00 Mee&ngfTnening Expense Reimbursement
12456 Joanne Wad 170.00 Meeting)Imining Expanse Reimbursement
12457 Jeff W.Woodasmtl 195.00 Mea&ng4raining Expense Reimbursemenl
124M Michel 1.ZWek 125.00 Maamr Tp fining Expense Reimbursement
12459 Orange County Sanitation District 1,178.31 Petty Cash Reimb.
12460 John M.Wright 1W.00 ARBA Underpayment
12461 Air Products&Chemicals N.9]2.63 O&M Agreement Call.Gen.Sys.MO 8-9419
12462 Allent Insurance Services,Inc. NT,450.W Excess Liataliry Insurance
12463 Allienl lnsurarce Serve s.Inc. 0&5,182.W fluster&Matl9nery In...
12464 Alli nl bun.Services,Inc. M,MB.W Excess Uatelily Insurance
12465 Dated Pumps&Parts.Inc 26,338.11 Pump Pans&Suppli..-Impale,
12466 Earth Tech,Inc. W AN.OT Pm tedua al Services 3-58
12487 Endsomndial Engineering&Contracting N.OW.W Professional Services-Operator In Tempos,Program
1240 Hasit do Person Industries 32,813.56 Lab Parts&Supplies
12469 Hill Brothers 27,3W.W Clements-Odor If Cormslon COMmI-Nawporl Trunkline
124M JCI Jware ChamiwB.I.. 54.015.65 Sudium Hypochlmile
1N71 Kemiron Companies.Inc. 46.0711.39 Fame Chloride
1N72 Liberty Mutual Intersect,Company 75.=.42 MP Insurance-Liability&Workers'Connie-1st Installment
124n Malcolm Punic.Inc. 11)5,798.65 Professional Services 1-24&J-79
1N74 Occidental Enmgy Marketing.Inc. 171.821.511 Namrel Gas for ClrGerwCOGen
1N75 Sanonn Egineer.ii,he. 40.279.M Repair&Maintenance Services-Markets Rehab.Program&Fold 8 Refomed PVC Ape Rehab.Progam
1N75 SOAP %0W.00 Annual SCAP Membership 2MM9
1N72 Sou&lem California Coastal Wafer 363,466.00 Joint Pawers Aulkenty Agreement
1N78 Stone Water Resources Control Mars 143.875.00 Annual Fee for Storm Water Permil
1N79 Terra Renevol.L.L.C. NA52.W Get If Sut,enirgt Removal&Digester Drying Bud Malarial Removal
124M TAe RancNMagen Fame 363,545.48 Residuals Removal M03.29-95
12481 US Peroxide.L.L.C. 311=12 Color&Common.Control Treatment for Coll.Sys.;Hydmgan Padded.&Fortino Chrome
1N&2 Walker Centrifuge Services,LLC, M.055.81 Repair&Maintenance Services-Cleaning of(4)Digesters al Plank 1 If 2
12483 Woodruff Sisa lie&Stuart M.M4.45 Legal Services MO 7-2695
12464 Voided Check - -
12485 Voided Check -
12486 Voided Check, - -
12487 Voided Check -
124M Oangs Oonnty Salentine District W.OM.49 Workers Comp.Reimb.
124M A W Chesterton 1.213.29 Mechanical Pads&Supplies
12490 Abel Pumps,Inc. 2.W2.20 Mechanical Paris&Supplies
12491 Apavant,Inc 1.70.03 Professional Services-ERP Suppml
12492 Agents Smutime.Inc. 10,6W.W ProfessionalServices-Records Management Study
12493 Air Liquid.Aesma On, 1,148.96 Specialty Cara
124M Aigas Safety,lac. 2,40.56 Safety Supplies
124% AhMed.Inc. W.24 Ergonen6c Computer Supplies
124% AppleCon Employment Service 10,965.13 Temporary Employment Services
12497 AT&T 51M.17 Telephone Service
124N AT&T Motility 11,L L.C. 2,6M.64 Telephone Equipment&Activation
12499 Awards&Trophies Company 40.95 Awards&Plaques
X: %CFLTaVM4P5XMElLIamv Pair RepY, r$e014LnePWRey MahmBn_A 0i15y0ab EXHIBIT
enQlmi Paga 5 of 8 v1vlac8
Claims Paid From 070t108 to 0111510e
assumed,No. Vendor Amoad DescHpBpn
12500 AWSI 511.00 Dep meaent of Transportation Program Management B Testing
12501 Bask Chemical Sdulions 12,502.31 Sodium Bkulfile&Sodium Hydroxide
12502 BC Wre Rope&Rigging 3.M.72 Mechanical Paris&Supplies
12M Bea Man Pest Control 1. 677.00 Pest Control
10504 Bkdlenew Vdek,Inc 611.68 Lab Pad.&Supplies
12 BMM&Veatch Corporation 19.911.0 Professional Sadness J-3"
12506 Blue Marlin Group 860.32 Rebuild Pump
12501 Brenner-Fiedler&Assoc.,Inc. 1,392S5 lab Paris&Supplies
12508 California Relocation Services,Inc. 6S2.SD Cfice Files MormiguRalocation Services
12509 CALPELRA 978.00 Trans,Registration
12510 Cambridge Isotope Labs 3A55.25 Lab Pans&Supplies
1011 Cameron Welding Supply 31421 Welding Paris&Supplies
12512 Carole Engineers 1,12&91 Professkal Services P2-60
12513 Caranaugb Machine Works 1,819.60 Repair&Maintenance Services-Pump Beam,Housing&Sluffiso Box
12514 Circle.Inc. 827.83 CfiSupplies-Toner Centel
12615 City of Huntington Beach 259.00 Water Use
12516 CMAuk 330.00 Training Registration,(Cashuction Management Aeaoc.of Amence)
12517 Consumers Pipe&Supply Co. 2.1134.11 Plumbing Pans&Supplies
12518 Controlled Motion Solutions 144.12 Mechanical Pens&Supplies
12519 Contends Express 2,800.67 Office Supplies
125M County Wholesole Electric Co. 2.7n.70 Elecbi al Pens&Supplies
12521 CWCI Insulation of LA,Inc. 16525 Maintenance Supplies
12522 Can id's Two Sardis 4,530.00 The Mines Serves,
1=1 Deenunk Water Controls cro CS AMSCO 1,678.75 Mechanical Paris&Supplies
12524 Dudek&Associates.led. 13.275.11 Professional Scwias-SOP Development&Land Recoil Information System
12525 Eleaonic Behind,Co. M.00 Repair&Meireen.Services-Balance Impeller&Start Assembly
12526 Enchanter,lac 3.325.00 Ocean Modlonr,&Ouffel Inspection&Maintenance
12527 Environmental Caepkance Inspection Svce. 600.00 Professional Services-Fall.CO Chase(FOG Praram)Inspections
12528 Envidard l Resource Associates 1,826.9E Lab Paris&Supplles
125N Ewa,Idgabon Industrial 212.44 Landscape Irrigated Pens&Supplies
12530 Huber A.Mandator 66822 Refund for Overpaid Health Insurance
12531 Fedax 255.27 Freight Services
12M Fergusen Enterprises,Ipa, 412.83 Mechanical Paris&Supplies
12333 Fisher Sciensc Company,L.L.C. 384.56 Lab Pads&Supplies
12534 Flaming Enviranmenlel,Inc. 1,529.32 Annual Monitor Certificated
12535 Franklin Covey 119S9 Office Supplies
12536 Fys Elecwnia WAS Computer Supplies
12637 GMF Sound.Inc 378.00 Repah&Matinee.Services-Lab Bldg,PA System
12538 Golden Bell Pmduds 4,9W.W Contract"Services-Insecticide Coaling of Manholes
12539 Golden Slate Wemight Ddivat,Service 212.12 Counter Service
12540 Goldenwdst Cap. 1.086.0D Fencer,Repairs&Maireenance Services
12541 Grainger,Inc. 5,455.52 ElecMal&Mechanical Supplies&Touts
12542 Harold Primrose la 1DLN IS For Samples
12543 Hewlett Packed Company 8)48.98 Telephone PBX System Server Replacement
12544 Hewlett Paced Company 2,149.92 S00ware&Updates-SpiOmnge runty
12545 Home Depol 3292.93 Misc.Repair&Maintenance Material
12546 Hopluns Technical Products 1.719.0 Mechanical Pans&Supplies
12547 Hub Auto Supply 51.67 Vehicle Pans&Supplies
12 11 City of Huntington Beach 38.69 Water Use
12549 Huntington Beach Ubmry 515.00 Meeting Room Rental Fs-Exea0ve Management Meeting
12W Industrial Oklnlution Group 170.52 Pecking Supplies
12551 Industrial Threaded Products.Inc. 12y.87 Inventory Fasteners
n emNwnExcEt owo2W P9INREiD-o Potl EXHIBIT A
1Mlac Page 6 of e13QUO
Claims Paid From 07101MB to 07/1 ADS
Wart4n No. Venter M»urd Dinurletlon
IZ52 Info USA 4.172.21 Business Listings
12553 Inland Mft Surveys,Inc 1,961.05 Pndting/Publishing-9-x 9-Coto,Digilid Ims9ss of Mnal PMI wh d P1&P2 o OVD
125M Jets Cater n 1,229.90 Meeting Expenses
12555 J L Wingal Company 4,887.50 Pump 8 Pump Parts&Supplies
12558 Johnatow Supply TSILM Electrical Pans&Supplies
IZ57 Lamed Education Belabor 409.00 Training Registration
125M Mainline Informer ion Systems 5.164.60 Software Maintenance 8 Support-IBM ASI400
125% Maintenance Products.Inc. 11227.55 Mechanical Pens&Supplies-Sloops Ploughs
12M Malnlemence Superintendents Assoc.-Rem 175.00 Membership
12MI MCJunkin Red Man Corporation 1,051.85 Repair&Maintenance Services-Geer Assembly
12562 McMaster Cart Supply Co. 1257.40 Mechanical Pans&Supplies
12503 NACE Inlamaionel 1,965.00 Training Registration
125" Nagodal Business Women'.Leadership Mac. 139.00 Training Reglall
12665 NSSI I Sources&So.,Inc. 852.24 Ropelr&Maintenance Seraces-Varian
12W OCS Reprgnpnics M.647.98 Printing Service-M01I2GI00
12567 OBIca Depot Business Sandra,Di acm 1.892.01 Office Supplies
12M Odesource Oismnbulors.Inc. 24.94 Electrical Pens&Supplier
12669 dads,County Tax Cotleolor 83.14 Unsedaed Pmpeny Taxes-Newport Beath Harbor Moor for Nenssa
12570 Oranse County Vador Control Disktd 65.79 Past Combat
12571 Orion,,Courier 57.71 Courier Services
1MT2 Oxygen SeMw Company 2GS9.90 Retiu ld Shop Gases&Lab Pans&Supplies
12573 Pa.Predalon Products,Inc. 4,793.74 Mednnical Pods&Supplies
125T4 Pacific Mechenlcal Supply 961 Plunds"Supplies.
12575 PaMlause Tire,Inc 2,261.M Time
123T6 Polydyne,In, 23.405.67 Caloric Polymer M03.11-92
12A7 Ponlwilheacorn,L.L.C. 6.950.00 Printing 8 Matling Services Re Regional Sewer Senior Fee Prop 21B Notion;
12578 Procure WOM Injury Cedar 246M Medical Sa6enirs.
12579 Pudic Resources MNsay Group 2.00.00 Financial M Axx,Seromes
125W Guatily Sheds 6,700.00 Storage Shed Fabrication 8 Installation
12591 RL Atbon&MsociNee 2,OOD.00 Kern County Slorunds Consulltng Services
12582 Randolph Mahn Co. 755.39 Plumbbs Supplies
12583 Red Wing Shoes 327.75 Safety Shoes
12W Ron Moor Consullin9,L.L.C. T50.00 Barwar-Schedule Melyaa
12565 Roto Rooter 11001111 558.59 Plumbing Servkas
12W Royale Cleaner 25.50 Dry CNaning Services
12587 SCE 935.03 Porter
12588 Separation Processes.Inc. 130.00 EnBrib ring Servces J-36
12589 Shorral,Inc 22,048.96 Installation of New Phone Sydmem
125N SKC West,Inc. 376.54 Lab Paris&Supplies
12591 Sorts Graphics 2.313.00 Maintenance Agreement-Caplan,Prunes,Pans&Supplies
12592 Southern California Edison 701.27 Power
12593 Sordhwest Scientific,Inc. 480.98 Instrument Supplies
12594 Steven Maw 14.770.O0 Vidso Production Services
12595 To=Pedfic Fir Protection 2.660.00 Only./Annuel Fir Sprinkler Inspection,MoAL&Con.at PIL 1&Pit,2
12NB Tarminixldernaliowl 60.00 Pest Controt
125W Thompson Industrial Supply.lot 7.140.69 Mechanical Part B Supplies
1208 T-Madle 106.67 Wales.Air Time
125N Tolls Lod&Safe Sanice&Sales 20.66 Looks Kays
12600 Ta6dtl,Imemationel Cory 908.47 Instrument Supplies
12601 Townsend Public Affairs ?.SOON LagiisiwB Exawt.Muocale for Gran Fund,
12602 Tremor lncorporaNd 4.4T0.00 RepdB&Maintenance Services-Rod at PI Warateuse
12603 Trick&Auto Supply.Inc. 117.30 kolomoliwx Pans&Supplies
NwglWE%dEL.NMAAP6NM61bwbns Pas nepomA0SKaimsPwaapervNuennM_a m.tsa..m EKHIBRA
Ponta, Page 7 of 8 aryamvo
Claims Paid From 07/01108 to 07115N0
Warrant No. Vander Mrtprrnl Description
1261)4 Tuff Skin 600.W Truck Repairs-Lme X Utility Bed of V-0415
1M05 United Pedric Services,Inc. 17,OBT.51 Lendscepe Maintenar¢a at Plants 182 and Pump Sessions
12806 Unread Parcel Service My!) Parcel Services
1260T MR Scientific Products 61 Lab Pads S Supplies
12600 Wastewater Tedlllology Trainers 4,d80.00 Training Registration
12609 Water Eduwtitn FourWetion 115.00 Membership
1M10 Waeie Sanitary Supply lirCn Janildeal Supplies
12611 WEF 192.00 Membership-Water Emmo mend Fedemlion
1M12 Gallen Slate Console 1.014.29 Insbumed Pans B Supplies
MIS Wedpore Apparatus 08A Breaker Supp. 31.91 Electrical Paris 6 Supplies
1M14 WOson Supply,blc. 56.79 Ptumbing Pans B Supplies
12615 Xerox Corporation 909.41 Slesionery B Old.Supplies
1M18 1.000-Confemma(R) 281.73 Telephone Conference Calls
1M17 James E.Colston 352A0 Mee0ngrTralning Expense Reimbursement
MIS Vledimir A.I(ogan SM IDD MeetingrTmining Expanse Reimbursement
1M19 Paul Kracik 1,016.92 Meelingrtreining Expense Reimbursement
1M20 Michad D.Moore 378.00 MeetinglTrelning Expense ReimW2emed
1M21 Roberl M.Mods 191M Meeting/Training Expanse Reimbursement
12W2 Nicolas Oswald 133.61 MeetinglTrarming Expenses Reimbursement
1M23 Dean Peak, 672.49 MeetingrTraining Expert Reimbursement
12624 Brian K.Reed 12 W Meetinglnaring Expense Reimbursemed
1M25 Jeffrey T.Reed 4,4W.10 MeeinglTraining Expense Rambursemed
1MM GeoW L Robertson 192.W Meetingrr aiding Expanse Reimbursement
12627 Warted L.Stemin 112.20 Mee ng/Training Expense Reimbursement
12628 Simon L.Watson 581.96 Meetirng]Tlaining Expense Reembursemed
12SM J.F.Shea Constmctlon,Inc. 6,144,663.86 Corenudion P2.90
1MM Union Bare,of California 682.740.43 Construction P2-90,Relontion
Told Accounts Payable-Werronts 44392, . 5
Paerele Oisbursemeds
39631 - 39673 Employe Paychecks E 6,9T5.00 Interim Payroll-ARBA(0]N1M)
39674 - 39729 Employee Paychecks 110,083.32 BMmekly Paym0(07412108)
39731 - 39739 Employee Paychecks 12.785.93 Inladn Payroll-Re.B Temenstans(9MMS-0)11 S)B)'
39812 - 390M Employee Paychecks 4.W2.69 Interim Perfect-Palms(0T11 SRO)
157279 - 157MI Direct Deposit Statements 11,819.0 ARBA(07MIMB
157382 - 157932 Direct Deposit Statements 1.2a6.113]4 Biweekly Payroll(07A)W8)
Total Payroll Disbursements 1,d31.0M.24
'CM4s39]]II,.NTbb39011xere,ladoulal—ass.. LMpse.v'x Ponenm64uutctell.
CM Ye 39]d01p3BB11 M Be rexvltl m tls]nlg6 nro,n.
all Transfer yewwnls
DCSD Payroll Taxes 8 Canlnbutionz E 1127.061.65 Biweekly Payroll(O7Ip2100)
Backache Bank 139,561.58 Same 2996 Cedndling dPcares ofP July Interest Payment
Bank of Widew ypd 1 W2M.00 Series 1993 Relulyding Cedficeles d Participation July lnleresl Payment
TOW Wide Transhr Payments �1.6�5. 3
Total Claims Paid 07I1-0711=9 E 16.861.615.02
N bepN'+nEYLEL nuU1dM5NME1Clzm5 Petl EXHIBIT A
mallet Page 8 of 8 wlviaoe
Claims Paid From 07116MB to 07131108
Warrant No. Vender Amami Descriptlan
Accounts Payable-Warrants
12631 All American Asphalt & 40,498.W Manhole Frames and Covers Replacement Services
12632 Ammisan Express 35,025.43 Purchasing Cam Program,Mist Supplies&Services
126M Camlock Fuel Systems,Ire. 36.(KI& 8 Fuel Cam Program-DisMd Vehicles&Mmilonng Vessel
126M Cityof Garden Grove 62,023.55 Reimbursement for Repaidlwlecement of Collapsed Lateral
12M City d Huntington Beach 169.077.02 Cooperative Proj0ds Reimbursement Program
126M Earth Tech Inc. 278,985.80 Pmlassianal Services P1-100
12637 HDR Engineering,Inc. 126.142.56 Professional Services Pl-101
126M K 2 General Contractors,Inc. 233.479.00 Professional Services J-96
12839 Orange County Water Dislricl 163.048.04 Jofni GWRS Prophet J-36
12640 Seiner Enginwdng.Inc. BBd85.00 Repair B Maintenance Services-Manhole Rehab.Program&Fold&Reformed PVC Pipe Rehab.Program
12641 So Cal Gas Company 33.774.610 Natural Gas
12842 J F Shea Construction.Inc. 1,267,028.67 Constructed$108
12643 Nom on A Clanton Colrebuc0on,Inc. 898,011.90 Construction 747
12W Crsrae Community Bank W."11,10 ConsWcllw 7.47.Retention
12645 A W Chesterton 2,581.25 Mechanical Pans 8 Supplies
126M Absolute Standards.Inc. 55.O1) Lab Pads&Supplies
12647 Agilenl Technologies.Inc. 2.044.57 Lab Paris&Supplies
12648 Ago Ind.sln.sDBA So-Cel Sweeping 880.00 Street Sweeping Services
12649 Air&West.Management Assoc. 1W.00 Membership
125W All LiauM America Spedaiy Gases.LL C. 0.51 Cylinder Rentals&Demurrage
12851 Argas Safety,me. 75.86 Sefey Supplies
12652 AM.-West 10.20 Laboratory Supplies
12853 Amamb s Foundry Co..LM. III Manhole Covers
126U Analy0l,Inc. 1.1 W.31 Mechanical Penh&Supplies
12655 Applied Industrial Technology 12,93 Mechanical Parts&Supplies
12656 Arohle Ivy,Inc. 7,445.W Installation of Speed Bump$&A mhell
12657 Awmieted Production Muelc 362.W Music Licawe for OCSD Vldaa'Making Every Day Feel
126W AT&T 1.999.14 Telephone Service
12659 AWSI 166.00 Department of Tmnspatabon Program Management&Tearing
12660 Be0ery Specia0ias 279.30 Ballades&Hand Lanterns
12681 SC Wire Rape&Rl9gin 295.94 Mechanical Pans&Supplies
12M Bee Man Pest Control,Ine. 175.00 Past Control
12653 Bennett Bowen Lighthouse 2,148.74 Instrument Parts&Supplies
12M Bled&Veatch Corporation 3.580.00 Professional Services-Development of Contingency Repair Plans
12665 Black Box Combustion 336.92 Computer SoflwarelHardware
12666 Blue Diamond Car Wash,Inc. 1,266.93 OCSD Vehicle Weshin niVadng Services
12667 Buckram&Assodates,Inc. 290.00 Proleselonel Services-Pavement Management
126W California Dept.of Child Support 1,263.35 Wage Garnishment
1260 Waited Check - -
IN70 Cameron Compression Systems 79.87 Mechanical Pane&Supplies
12e71 Camara Rdling Company,lac. 3,564.00 Welding Supplies
12672 CDN Isotopes 1,0913.00 Lab Pads A Supplies
12673 CDW GovammenL lne. 21,040.08 Computer So&wererHamware
12674 Cade,Inc. 3.439.04 Office Supplies-Toner Cartridges
12875 Claw Harbors Environmental Servicas 3.139.26 Haaamous West.Management Service.
12W8 CMM 1W.00 Meeting Registration -Div.760(Construction Management Assoc.of America)
12677 Cdur la Analytical Services,Inc. 870.00 Analysis of Wastewater,Industrial Weslewater B Biosclids
12678 Commandeer Interior Resource. 13,580.00 Professional Services-hangullalmn of Caress,at Control Center Second Floor Library
N:Nap1aME%CF1AW]PAP.NME1plm Past Rgq 0X8vnAmePddRAxxn Anshinenl_BaJl 48.. EXHIBIT
NUJtbx Page 1 of 13 W..
Claims;Paid From 07116108 t0 07131108
Warrant No. Vendor Amount Description
126M Compressor Components d California 14.463.11 Mechanical B Pump Paris 8 Supplies
1268D Computer Protection Technology,Inc. 10,64675 Quarterly Maintenance of Batteries,peculiars,and UPS System
12681 Consolidated Electrical Distributors.Inc. 206.83 Elecmcal Parts 8 Supplies
12802 Consumers Pipe 8 Supply Co. 836.31 Plumbing Parts 8 Supplies
126133 Con"I Factors Seems,Inc. I,560.W Filter
12664 Controlled Motion Solutions 99,35 Mechanical Parts 8 Supplies
12685 Corporate Express 311.74 Office Supplies
12M County Wholesale Electric Co. 186.45 Electrical Pads B Supplies
12687 CR6R,Inc. 1.260.00 Container Ramada 6 Waste Disposal Bannon
12608 CS-AMSCO 2.81II&M Mechanical Pads 8 Supplies
12609 CWipn of Orange County 52.85 Mdia.Agreement-Con Gen Water Softener System
12680 CWEA Membership 230.00 Membrship(Cal/Water Environment Assoc.(
IM91 Disneyland Reason 510,00 Remndllstion User Fee Refund Progam
126N Davli Tree Seneca 3 W0,00 Tree Main.BaMp
12683 W Gentle 8 Sons Glen Co. 447.40 Window Glen RayairslReplacement
126W OLTBV Systems Engineenng,Inc. 4,600.66 Prolormonal FE07-11
LAM Dudek 6 Associates.Inc. 22.674 64 Professional Servipe FE0545.FE05i1,8 FE05-11
12696 Emergency Management Naiwork,Inc. 5,71500 On-Site Fire Extbiguaha Training
12697 Employee Benefits Specialists,Inc. 12,19536 Reimbursed Pral Employee Medicat 8 Dependant Cara
12690 Enemn Corporation 2,219.00 Repair B Maintenance Supplies
12899 Emmonmental Compliance Inspection Svice. 600.00 Professional Services-Pals.Oil Grease(FOG Pipped(Inspadimu
127W Emsronmemaf Sampling Supply 303.W Lab Parts 8 Supplies
12701 Equipment Speclalges Co. 2.357BS Submersible Solids Pump
12702 Ewhg Insgation Industrial 300.51 Landscape Idgafion Parts 8 Supplies
12703 Ferias Coryomfion 233.98 Freight Services
127N Ferguson Enterprises,Inc. 444.32 Mechanical Pans 8 Supplies
12705 First American Real Been.Sdueons 461 Online Orange County Property Information
127M Fleher SolenG6c Company,L L.C. 1,272.0 Lab Parts 8 Supplies
12707 Fleming Environmental,to . 2,403.24 Repair.Replacement 8 Taming Services-Secondary Containment Linea 8 Still Buckd
12708 Forked Engineering 8 Surveying.Inc. 11,400.1XI Surveying Servicas-Various Capital Projects
12709 Franchise Tex Board 5D00 Wage Garnishment
12710 Franklin Covey "All Office Supplies
12711 Frye Electronics 3,903.74 Computer Supplies
12712 Ganaft Callahan Company 2,41118.22 Chemicals
12713 George Yardley Co. 540.30 Electrical Perms B Supplies
12714 Goodwin Pumps d America.Inc. 1,411 Repair B Maintenance Services-Pump Rentals
12716 Golden Stele O.Ini Niffeery Service 274.40 Counter Service
12716 Golden Sun Marketing 3,273.45 Mechanical Parts 8 Supplies
12717 Goldenwest Cory. 3,238.00 Pamir 8 Mean,Serve.-Replace Speed Bumps.Clean AS Lab,CleaMnspect Ta61C Spikes,Clear Dennis
12718 Grainger,Inc. 2,535.56 Mechanical Parts,Keys.Tools 8 Misc.Supplies
12719 Greybar Electric Company 08.29 Electrical Repair 8 Maintenance Services
12720 GTE.NET.L L.C.(Venison Online) 99.99 Wireless Telephone Services
12721 Guarantee Records Management TM.29 O65iie Records Storage
12722 Hach do Ponton Industries 9712.76 Pump Tubing
1= Harrington Industrial Plastics,Inc. 1,W3.05 Medlanicel P9me 8 Supplies
12724 Hasa Oil Co.,Inc. 367.21 Grasse
12725 Hasler,Inc. 89.43 Maser Rental Charges 8 Misc.Supplies-Inteflitouch System Complete Mail System
12726 Home Depot 49597 Misc.Repair B Maintenance Material
12727 Herb Auto Supply 962.62 Vehicle Pads 8 Supplies
H WepdudlE%CEL 4W]MNPSHxREZhfim Pad NtlMment 8_07J1d8aW EXHIBIT
pNltpW Papa 2 of 13 MIY2oe6
Claims Paid From 0711WH to 07/31108
Warrant No. Vendor Amount Description
1272a Indiana Child Support Bureau 29SW Wage Garnishment
12729 Industrial DleMbutlon Group 1,246.21 Small Tools&Misc.Supplies
12730 Infrastructure Engineering Corp. 705.86 Professional Services FED7-06
12731 Interval Revenue Serves 175.00 Wage Gamishment
12732 Interstate Batteries of CM Coast 3.910.11 Bafferes on Vehicles&Carts
12733 Ing.Union of Oper.EN.AFL CIO Local 501 4,W8.16 Dues Deduction
12734 JCI Janes Chemicals,Inc. 13,519.12 Sodlum Hypochlorde
1273S JohnLarre Supply 2.169.12 Mato
12736 Kemira Water Soldiers 4,487.70 Fantc Chloride
12737 Kissel Ervirermenel Lab W.W Outside Laboratory Services
127M LIN Image Apparel 2,W9.05 OCSO P.I.Shirts
12739 Lance Sal and Lunghad 7,36057 Professional Services-internal Auditors
12740 Court Oder 150.01) Wage Garnishment
12741 Lytle Screen Printing 1,956.44 PMUN Servlee-OCSD Safely Incentive T-Shirts
12742 Machado Emsonmenel Cory.DIM Air Duct Cleo 3.545.04) All Conditioner Duct Services
12743 Malcolm R.W.Inc. 19,850.78 Professional Serrius 1-10
127M Medleys Boller,Inc. 2,015.53 Mechanical Pella&Supplies
12745 McJunen Red Man Corporation 2,978.62 Repah&Maintenance Services-Unnitohaue Actuator
127411 McMaster Can Supply Co. 1,668.73 Toole,Water Heeler,Umbrellas&Keys
12747 Measurement Control Systems,Inc 4,329.43 Repair&Calibration Services-Rotary Gas Meter
12748 Medlin Controls Co. 671.12 Instrument Pads&Supplies
12749 Mender Toledo 2.155.00 Fill&Maintenance Services-Truckonfig Scale Display
1275D Miele.Inc. 12,031.45 Lab Pere&Supplies
12751 Mobile Hose&Hydmu lc Supply 62.88 Huse Repairs
127M Coed Order 225.W Wage Gamisherem
127W Mr.Crane,Inc 7.241.40 Repair&Maintenance Services-Transportation Vehicle at Sunflower Pump Station
12754 National Bad&Trust 1,751.49 U.S.Savings Bonds Payroll Deductions
127M Neal Supply Do. 5,421.84 Plumbing Supp9as
12756 New Humorous,C.L.C.of Santa Ana 1,500.00 Training Registration
12757 Navel Communlcetinns 910.54 AlrTns
127M Nickell Metal Spray 7,160.00 Repair&Maintenance Serrices-Shaft
12759 Ninyo&Moore Corporate Accounting 14,079.00 Professional Services-Soils,Concrete&Other Materiels Testing for Various Capital Projects
12760 NRG Engine Services,L.L.C. 24,184.11 Repair&Maintenance Services-Can-GenkCoGen Spent Plugs
12761 OCEA 570.58 Dues Deduction
12762 Onseaurce Distributors,Inc. 1,820.07 Electrical Parts&Supplies
12763 Checks Corporation 10,841.03 Software License Update&Support-Transparent Gateway
12764 Charge County Sheriff 783.58 We,Garnishment
12765 Orange County United Way 60.00 Employee Conwibutiens
127N Charge Fluid System Tachutoges,Ine. 6.019.41 Plumbing Parts&Supplies
12767 Oxygen Service Company 1.013.90 Lab Pads&Supplies
127N Pacific Mechanical Supply 6W.42 Plural Supplies
12788 Pacfic Pads&Controls.Inc. 3,705.90 Computer SoftwtrelHarewere
1T70 Paffsn Systems,Inc. 1,000.69 Eectrical Pads&Supplies
12"1 PCS Express,Inc. 30.24 Courier Serves
12772 Pee.ONcers Council of CA 2,014.74 Dun Deduction,Supervisors&Professionals
12773 Peak Scientific,Inc. 1,128.11 Lab Pads&Supplies
12774 R%alpushere.Inc. 5,891.60 Professional Services-OCSO Webslte Maintenance
12775 PL Hewn Company,Inc. 65.30 Electrical Pads&Supplies
LUM Pulydyea,Inc. n.W3.18 Cancel Polymer MO 3-11-92
llbaplNME%CEL.JIet]IONP8HME1CWmr Petl Rapm113tCBMAeImWekRepenJibdurcnl B 01-N-0atlu EXHIBITS
oWtax - Page 3of 13 801L 18
Claims Paid From 07liMB o 07/31MO
Wa nt No. Vendor Amount Daman bon
12771 Polish,Inc. 61.0 Lab Pans&Supplies
12778 Pdmawrs 2,990.00 Training Registration
12779 Prudential Orerell Supply 2.090.07 Uniforms&Related AHlcles
12780 0 At Cain.-DN.of Pump Engineering 1.07.13 Air Compressor Parts
12781 Quickstart Intelligence 4,875.W Training Rwistration
127W Rainbow Oispckal Co. 3.376A8 Trash Removal
127M Retm01 Pans If Components,Inc. 660.17 Mechanical Pans&Supplies
127M RommountlUnlloc 4,887.50 Instrument Supplies
12785 RPM Electric Motors 2.992.86 Motor
127% Rutland Tool&Supply 56.94 Small Tools
12787 Schwan,Bucket 1,891.33 Pump Pane If Supplies
lVS3 Expel Voice&Data.Inc. 2,204.80 Telephone System Maintenance
12789 Shammd Supply Co.,Inc. 939.08 Smell Tools.Sealant,Looks&Mix.Supplies
12790 Shureluk Sales&Engmwrirg 137.49 Mechanical Parts&Supphes
12791 Siemens Water Tatlmelagles Corp. 1,234.74 Service Agreement-M Water Systems at Plant.t It 2
127M Sigma Aldrich.Inc. $7.72 Lab Pans&Supplies
127M Smith-Emery Company 11,451.50 Soihs,Concrete&O81er Materials Testing
12M ScAwrinw Com. 891.54 SOReare Maintenance Agreement-Cima DL 100-1&Engineers Edition
12795 Southern California Edison 2,915.44 Power
12790 Southern Counties Lubricants 3,154.75 Oil&Grow
12797 Sperling Iwbumen s.Inc. 2.431.57 Instrument Pan.&Supplies
12798 Spencer Fluid Pom,,Ido. 825.91 Mechanical Pans&Supplies
127M Steven Enterprises,Inc.-Remit 450.94 Office Supplies
128W Summit Steel 2,03557 Metal
12801 Sunwl Industrial Parts 2,196.21 Mechanical Pads&Supplies
128W Systems Solution Company 1,654.16 Repairs&Maintenance Services-Access ConbollCCN Sewnty System
128W Techno Coatings 7.590.W PeinWg Services-Mi ice Blest&Recasting of 8'Steel Pipeline
12804 Terminix International 4W.00 Pwt Control
12805 Testimonials Ontario 5,43525 Analysis of Ennu ids
12806 The Orsnge County Requiter 4.W9.92 Nptiwe&Me
12807 Thermo ENclron Corp. 5.265A0 Lab Parts&Supplies
12M Thompson Industrial Supply,Inc. 5,%328 Mechanical Paris&Supplies
12W9 Tri-Stab Seminar On-the-River 325.00 Treinirg Registration
12810 Tn-Counly Fire 3,859.63 Mein.Agree.for Annual li a mictionlServicing Fire Extinguishers at PM.1&2,Pump Side.&Fleet Vehicles
12811 Truck&Auto Supply,Inc. 42.47 Autorwtiva Pens&Supplies
12812 The Unhaourc,Corporation 60426 Olfiw Supplies
12813 United Parcel Servka 167.27 Parcel Services
12814 UNIVAR USA 1,583.50 Chlorine
12815 US Peroxide.L.L.C. 14.562.09 Odor&Comwion Control Treatment for Coll.Sys.:Hydrogen Peroxide&Famous Chloride
12816 USA Mobility Wuelew.Inc. 841.12 Wlrebss Services
12817 Valley OBtmil Diesel sewn 132.40 Restocking Fee
12818 Vapex,Inc. 3,917.54 Vil Sensors
12819 Venson California 1,956.48 Wheless Services
12820 Vortex Corp. 3,567.45 Door RepaiduReplacements-Various Locations
12821 VWR Scientific Products 5,51116.55 Lab Paris&Supplies
12822 World Waste Tans nolaglea,Inc. 23,287.09 Reco ocur 1pn Liver Fee Refund Program
12823 Assumed.Technology Traners 595.00 Training Registration
12824 Waters Corporation 4,997.08 Lab Pens&Supplies
128M Wince Send.,Supply 451.41 Janitorial Supplies
RW.pMWE%CEL4d@AV,P&HAREWWlm.Pots RnodUWDl knWxRm.All-h—1 B0731n.tiv EXHIBIT
molds, - - Page 40113 a"..
Claims Paid From 07116MO to 07/31/06
Warrant No. Vendor Amount Description
t2828 Weather and Wind Instrument Co. 1.24321 Wind Sock
12827 WEF 308.00 Membership-Water Environment Federation
12828 Weal Coast Safety Supply Co. 1,6W.99 Safety Supplies
12M Wwl Life Supply Company,Inc. 415.92 Electrical Pat B Supplies
12830 Coud Order 912.60 Wage Gamishment
12831 Jeanie M.Fields 147.85 MeetingRrelning Expense Reimbursement
12932 "Under,T.Mfllea 125.00 Meeting?raining Expense Reimbursement
128M Fund R.Patel 114A2 Meeling/Tralning Expense Reimbursement
12034 Simon L.Watson 257.00 MwgnNhaining Expense Reimbursement
129M Berber Fider Trust 935.05 Reconciliation User Fee Refund Progrsm
120W Lori Barre 1,615.98 User Fee Refund Regarding Septic Tanks
12837 County of Orange Auditor Controller 720.00 Administration Fee-Adjustment to Property Tax Bill
12838 County of Orange Auditor Controller 510.00 Administration Fee-Adjustment to Property Tax BIII
12839 County of Orange Auditor Controller SW.W Administrati.,Fee-adjuslmwl w Property Tax BIII
12W County of Orange Auditor Controller 540.00 Morthielration Fee-Adjustment to Property Tax Bill
12841 County of Orange Auditor Controller 540.00 Adminlslratlon Fee-Adjustment to PropaM Tax BIII
12842 County of Oange Auditor Controller 40.00 Administration Fee-Adjustment to Proparty Tax Bill
12843 County of Grange Auditor Controller 675.00 Administration Fee-Adjustment to Property Tax BIII
12844 Rubin Famand. 2,449.55 Reconciliation User Fee Refund Program
12US Valeant Pharmaceuticals 8,080.56 Recondlieliw User Fee Refund Program
12846 Petrick J.SWRImn 684.88 User Fee Refund Regarding Septic Tanks
12047 S41e Board of Equetirallon 800.W An urcilmn Fee
12848 Francis UNnI 320.43 Reconciliation User Fee Refund Program
12849 Air Products&Chemicals 26.972.63 O&M Agrwmanl Oxy,Gan.Sys.MO 8.9419
120W Alan Plummer Associates M.422.00 Professional Servius-SupOmxyganetion Process Feasibility Study
12851 Carolto Engineers 196.459,06 Promsslonel Sarvices P2-W
1202 Cityo(Cypess 284,416.44 Cooperadw Projects Reimbursement Program
12853 City 0 Fourfold Valley 41,816.53 Water Use
12W CSAC Excess Insurance Aumonty 164.940.92 Employees ASSistwCe Program
12855 Gallen Grove Santtery DlsVtot M.313.35 Cwpemtive Projects Reimbursement Pmgrem
12856 HDR Engineering.Inc. 129,851.37 Professional Services Pl-101
12857 JCI Jones Chemicals,Inc. 126.462.26 Sodium Hypochlo Im
12858 Kendra Water Splutbds 94.277A2 Fwic Chloride
12859 Mati-ife Life Insurance Company 41.799.91 Group Life.Manager Adds.Life,Shad&Long-Term GiuMllly&Optional Term Lee Ins,
12860 MWway City Sweaty District 393.014.25 Cwpemtiw Projects Reimbursement Program
12851 Mike Print&Sons 27.309.79 CwaboNm-Emergency Smk Hole Recalls In Tustin
12862 Occidental Energy Marketing,Inc. 145,719.58 14aWrol Gas for CedGeduC4Gen
12863 Orange County Water DlsMd 82.161.36 Green Aces Water Project JGAP)
12W Smith-Emery Company 28,4118.W Stall,Concrete&Other Materials Testing
12865 Southern California Edison 4W.320.77 Power
128W State Board of Equalization 44,531.00 Sales&Use Tex Return
12867 Tells Rem 1,L.L.C. 31,633.16 Gm&Screenings Removal&Digester Drying gad Mideast Removal
128S8 Tula RencId Magan Forms 277.327.17 Readuals Removal MO 3-29-95
128N US Peroxide.L.L.C. 44,806.99 Odor&Concision Control Treatment for Call.Sys.;Hydmgan PeroxWa&Ferrous Chloride
128]0 Water EnWronmwt Research FounEason W,000.00 Contribution-Wernaased Guidance Tool -Minimization of Odors and Concision In Call.By .,Phase 1
12871 Alli.Allied.Inc 57.114.00 Construction SPAR
126M Float Regional Bank of CA 122,116.84 CowWctiw P2-80&P2.91,Feminism
12873 J F Shia Construction.Inc. 1,235,170.47 Ccrubucdan P2E6
12874 J R Foam Construction 226,itMJW Construction Pt-78
H;WolaW41E%LEL 4WMNi8KMEMJSInu PeW fle00m200B1CiNmNM4flegvt Amc-ent__B_07Jrdexax EXHIBITS
ANttMa Page 5 of 13 11,137008
Claims Paid From 0711 WOO m OTMI=
warrant No. Vendor Amount Connotation
12875 Mitred Pacific Co. 5.%5.759.30 Construction Pt-102
1287E Wood Electric Construction Corp. 105,210.00 Construc0ed PI.97
12877 Shimmick Construction Co.,Inc. 1,099,051.62 ConaWction P2-90&P2-91
12875 Stave P.Rados.Inc. 37,787.E ConaWcnon 1-24
12879 Union Bank of AmeMa Esmow 85,OD8.98 Construction P2416.Retention
128M Walls Fargo Bank 616.417.70 CorreVuction P1.402,Retention
12MI A Cremated 9=115 Mechanical Perot&Supplies
12882 Abel Pumps,Inc. 195.24 Mechanical Parts&Supplies
12M Accurate Measumm unl Systems 1,777.67 Electrical Pans&Supplies
12884 Aemtek 11,OD42B Temporary Employment Services
128M Air Pro Supply Co.,Inc. 4,241.04 EleMcel Parts&Supplies
12M Airgas Safety.Inc. 191.96 Safety Supplies
12887 Alhambra Foundry Co.,Ltd, 22,N3.31 Manhole Framps&Covens
12888 AIWX Pe lmodance Systems 700.00 Training Re0a a4on
12809 Advanced Fidelity Assurance Company 5N.04 Employee Voluntary Cancer Insurance
12890 Amlech Elevator Services 1.44DD.0D Monthly Elevator Maintenance at Plis.1&2
12891 Amster,Inc. 690.36 Computer SoflwamMerdware
12892 Applied Industrial Technology 74.02 Mechanical Pans&Supplies
128M ARS Enleromum.Inc. 780.00 Lab Instrument Maintenance Agreement-Autoclaves
120N ASIS International 437.OD Pubfcations&Books
12895 AT&T 737.20 Telephone Service
12896 AT&T Cal9ornalMCl 3.072A9 Telephone Service
12897 Awards&Trophies Company,Inc. 5348 Awards&Minima
128N Bea Man Past Control.Inc. 247.00 Past Control
12899 Bernard Bowan Lighthouse 34.39 Electrical Pan&Supplies
12900 Beryes Governor Service 90.80 Mechanical Pan&Supplies
12MI Beyond Treat Corporation 4,650A0 Computer S011werelHarOware-PC Administration
12M 812Newscasler.mm 250.00 Professional Services-Video Nen-adon
12903 Bodymle Testing Group 375.00 Cutcide Laboratory Services
12904 Brawn&CatowMl 11,149A1 Professional Services P2-91
12905 Budirgton Safety Laboratory of CA,Inc 695.14 Safety Supplies
1N06 Bush&Associates,Inc. 4,824.00 Surveying Services-Various Locations
129D7 Calif.Assm.of Senila0on Agencies 4N.00 Meeting Registration-Coleco 610
129D8 Calms.Inc. 1,215.88 MechenicalfEleclrical Pon&Supplies
12M Cameron Compression Systems 1,773.10 &tecllanical Pan&Supples For LSVB Cooper Engines
1291D Cameron Welding Supply 1,504.18 Welding Pads&Supplies
12911 Canter Sales B Distribution.L.L.C. 80.82 Electrical Paris&Supplies
12912 Garden Greve.City of 331M Permit Fee
12913 Coast Rubber Stamp.Mfg, 43847 CfBce Supplies
12914 Computer Proladlon Tachopol Inc. 3.85&54 Ouadwly Maintenance of Bananas,Race...and UPS System
1N15 Codech Engineering N,253.14 Maledng Pumps
1N16 County Wholesale Electric Co. 1,593.47 Elocution Pan&Supplies
12917 CR&B,Inc. 515.00 Container Famtous&Waste Disposal Service
1N18 CS-AMSCO 3,705.86 Mechanical Pam&Supplies
1N19 CWEA Membemhip 110.00 Membership(Calif.Water Environment Asam.)
12920 CXTEC 984.32 Computer HardweredSo&were
12921 D urik Water Controls 400.57 Mechanics Pan&Supplies
12922 Dickson's,Inc. 901.05 Window Air Condilioner
12923 DLT&V Syslema Engineering.Inc. 7.91347 S05were Maintenance-SCADA
X dapeeWEXCEL aw17NAP&NARE6lsimv Pad Ramm2008dlalmvPaldReov Aewdunent 8 07a14a.Ax EXHIBIT B
sMlhx - - Page 6of 13 ai&.a
Claims Paid From 071IMS to 07731100
Warrant No. Vendor Amoum Description
12924 Dudek&Associates,Inc. 5.926.1V PrMessional Services P260
12925 Donn Edwards Corporation 95.60 Paint Supplies
12M EMSL Analytical,Inc. 30D.00 Co-Gen Cleaning Armysis
12927 Enchanter,Inc. B.00D90 Ocean MoniWdw&Ou6all lnepedion&Maintenance
12928 ENS ResourCBb,Inc. 10,000.00 Prot essionalServices-Legmlafive Advocate
12929 Environmental Resource Assoctams 55226 Lab Parts&Supplies
1nW Ewing brigni Industrial 2,686.42 Lantlsrape Irrigation Parts&Supplies
12931 Ferguson Enterprises, no. 1.nit.61 Medmnical Paris&Supplies
129M FirslAmencen Real Estate Solutions 450.00 Online Orange County Property Inlmmabon
129M Fisher Scientific Company,Ll.C. 1.76922 Lab Paris&Supplies
12934 Patient Engineering&Surveying,Inc. 5,403.75 Surveyi g Services-Various Capital Projects
12935 Franklin Covey 10926 Office Supplies
129W Gadad Manutactursog Co. 62820 Mactanicel Parts Is Supplies
12937 GanaB Callahan Canpany 1.011.78 Chemicals
129M GBC(Gereeml Binding Corn) 89.70 Office Supplies
12939 George T.Hall 383.34 Electrical Parts&Supplies
12940 Global Awards,Inc. 1,099.75 Asset Tags
12941 Goodein Pumps of America.Inc. 2,445.92 Repair&Maintenance Services-Pump Rentals
12942 Goldemvest Corp. 978.00 Repair&Maintenance Services-Steel Security Door Installation
12943 Grainger,Inc. 1.42758 Electrical Parts&Supplies
12W Grsyber Eastern,Company 89.913 Electrical Repair&Maintenance Materials
1294 Hach do Ronson Industries 74.67 Lab Parts&Supplies
12W6 Hanmgson Industrial PIWIM,Inc. 549.23 Mechanical Pads&Supplies
12947 Hub Man Supply 895.81 Vehicle Paris&Supplies
129Q Industrial Distribution Group MB24 Mechanical Pares,Supplies&Tools
12949 Intemagonal Business Machines Corporation 5,560.41 Maintenance Agreement AS-400
12NO Invensys Systems,Inc. 3.536.01 Instrument Paris&Supplies
12951 Ironman Parts&Smvkes 318.14 C an Filters&Gaskets
12852 Irvine Ranch Water District 57.10 Water Use
12953 Johnstone Supply 681.19 Electrical Parts&Supplies
12954 Kiesel Envimnmenal Lab 125.00 CNSMe Laboratory SeMces
12955 L&N Imago Appaml 1,86957 0050 Staff Jackets wrLogo-Medical Team
129M Lab Safety Supply,Inc. MO.16 Lab Parts&Supplies
12957 Lance WI and Lunghad 5.97092 Professional Services-Inmmal Auditors
129M M.J.Schaff and Associates.Inc. 3.WD9D Repair&Maintenance Sen4ces-Newport Force Main
12959 Marley's Boller,Inc. 4.616.47 Repair&Maintenance Services-Pit.2 Boilers
12M Materials and Contract Services 3,700.00 Professional Services-Public Agencies Survey
12961 Maxirrmous Professional Review.Inc. 1.255.00 Training R"musuon
12962 MBC Applied Environmental Sciences 2,9293(l Regional Ocean Monitoring-Aerial Suvey of Kelp Beds from Newport Harbor to Ventura Co.
1290 MCCromemr,Inc. 157.64 Sales Tax
129M MCINeri 1,526.33 Wireless Telephone SeMces
1290 MUunkin Red Man Corporation IMA6 Mechanical Paris&Supper;
129W McLean Thermal 601.02 Electrical Pads&Supplies
12957 McMaster Can Supply CO. 5.47138 Tools&Mechanical&Safety Supplies
12968 Mesa Consolidatetl Water Oisbict 2151 Water Use
12M bid West Assoconss 595.60 Pump Parts&Supplies
12970 MWH Americas,plc. 18.708.21 Professional Services P2-74
12971 Neal Supply Co. 1,346.96 Plumbing Supplies
129M Neutron Products.Inc. 11.800.76 Anionic Polymer
K:vepYuemExcELenvlo'aPsnaxeclelmv Pao xba EMIBITB
mind, Page 7 of 13 Mlaosos
Claims Paw From 07/1 WOO to OTMIRIS
warrant NO. Vendor Amount Description
12973 No tMvest Hyde lk Consultants,Inc. 18,013.80 Pmfesaonal Services-Pedom Hydraulic Ana"of the Ocean Oullall System
1297e OCB Reprographics 9,988.03 Porting Service-MO I12WOO
129T5 OEM Control 1.713S5 Lab Pans&Supplies
12976 Office Capin Business Services Coupon 2,285.a7 Office Supplies
In" Onesource Distributors.Inc. 2,965.24 Ebcirkal Parts&Supplies
12W8 Orange Fluid Birdbath Technologies,Inc. 1,05a.8T Pumping Pens&Supplies
129T9 Oxygen Service Company 418.16 Lab Pens&Supplies
129M Pacific Parts&Carbide.Inc. 2,858.84 Instrument Pans&Supplies
12981 Prlmary Source Office Furnishings.Inc. 111 O6ee Furniture&Misc.Equipment
12M Pmjeet Management line ilute 75BOD Training Registration
12M Prudential Overall Supply 1.749.8e Unilomn&Related Articles
InSel Public Resources Advisory Group 2.00D.00 Financed Advisory Services
12985 RBF CasWting 3,C36.00 Surveying Services-Various Locations
12M Restek Corp. 1,293.18 Lab Paris&Supplies
12967 Robenos Auto Tbnn Shop 1,382.T9 Auto Upholstery Services
12988 Roo Rooter NCI 1 1.W0.00 Pumping Services-Clear Roof Drains
12989 Safetycam.Inc. 269.37 Sell DVDs
12990 Scott Specialty Gases,Inc. 8,787.35 Lab Party&Supplies
12991 Sea Coast Dasgns,Inc 776.91 Office Fumiture-Ergonomic Chair
129N SGS Testcom.Inc. 2.29 Telephone Line-District Vahicle SMOG Slabon
129W Shamrock Supply Co.,Inc. 2,399.07 Janitorial Supplies&LOGs
12951 Shureluck Sales&Engineering 1.182.39 Mechanical Parts&Supplies
12995 Siemens Water Technologies Corp. 61.20 Service Agreement-DI Water Systems at Plants 182
129% Sigma Awnch.Inc. 1.506.52 Lab Paris&Supplies
12997 South Cast Air Quality Management Dist. 12.682.95 Permit Fees-Annual Emission,Operation&Mbc.Fees
12998 Spaklahs 461.10 Drinking WalenCooer Renlals
12999 Summit Steel 5,434.69 Metal
1300D Sunset Industrial Pans 35.90 Mechanical Pens B Supplies
1=1 Technical Service Group,Inc. 1,598.08 SCADA System VAX Services Agreement
1311 Systems Solution Company 6.30339 Repair B MaintenanceServices-GE Picture Penect Protection Plan Renewal
13D03 Terri International 229.00 Pest Control
130131 Testammki;Ontario 5139810 Ammysts of Biosaids
13005 The Orange County Register 84.8) Notices&Ads
13006 Thomivar Industrial Boom ,Inc. 1.924.12 Mechanical Pans&SuMthes
13007 Time Warner Communication 51.6,1 Cable Services
13008 Tremor Incorporated 940.00 Repairs&Maintenance Minriela
13009 Tri-County Fire 991.50 MaiM.Agree.for Annual lnspectianlServicing Fire ExBnguisMrs at Pits.1&2,Pump Sias,B Fleat Vehicles
130f0 Wiaaurce Worldwide,Inc. 3.576.31 Office Supplies
13011 United Partial Service 1.157.39 Pascal Services
13012 Vapex,Inc. 5,520.00 Sample Pump
1W13 Veriea California 139.37 Telephone Services
13014 Vortex Corp. 422.W Ooa RepairslReplaca girls-Various Locations
13015 MR Sc enfific Products 9,201.46 Lab Pans&Supplies
13016 WaleRause Association 500.00 Meeting Registration-Division 631
13017 Weather Semces International Remit 113.00 Proreled Charge-Account Closure
13018 WEF SI Membership-Water Environment Federation
13019 West Ode Supply Company,Inc. 26112 Electrical Paris&Supplies
13020 WorkfOme SoBware,Inc. 1,375.OD Computer So6ware01aNware Maintenance-Worklama Soeware
13021 WondaMW 3,610.00 Training ReOiat ation
Rtle(auNFXLFL�Paid Rgam3WBibMePaH eMn-AtlaMreM 9 QIJILabv EXHIBIT B
bestial - Pap 8 of 13 anvNoe
Claims Paid From 07/16/OB W 07/31/08
Warrant W. Vendor Anount Description
13022 Xerox Corpambon 20,232.37 Copley Services-Equipment Leases,Managed Senicee,&Metered Copy Usage&Chagas
13023 YelelOhase Matorlals Handling,Inc 303.28 Electric Carl Pads
13024 4X Corporal L.L.C. 7,SU0.00 Training Registration
13025 Taney Pinta Bank 4.61BA2 Construction Pt-76,Retention
130M More A.Brawn 164.00 Meetinintairbng Expense Reimbursement
13027 Jin H.Kim 125.00 MeeOng/Trairing Expense Reimbursement
13M Wedtrnli A.Kogan 1,52S.06 Meetingl7aming Expense Reimbursement
13029 Paul Kayaik 1,022.M Meetingrtrelning EWenae Relmburseroent
13030 Janet Oral 191 Meelimprrening Expense Reimbursement
13031 Lucinda Bien Ray 7QA2 Meeting/Training Expense Reimbursement
13032 Curt V.$help 250.00 MeelingrTraintng Expense Relmbursement
13033 Laura A.Temquex 110.21 Meetingrtraining Expense Reimbursement
1MM Union Bank al California 11,690.00 Consbucken Pt-97,Retention
IMM Union Bank M California 1,691.61 Construction 1-24,Retention
130W Mark A.Meyers 2,16825 User Fee Refund!Regarding Septic Tartu
1W37 Omega County Sanitehon District 1,367.76 Potty Cash Reimb.
13038 Brown&Cald"I 180769.55 Professional Servlaa P2-90;Novas&Ads
13039 Carolla Engineers 33,580.17 Prol.Services-Research Strategic Plan;Pt-71;and,Structural Integrity of Concrete at Haedwods 2
13C40 CORRPRO Companies,Inc. 3D.654.92 Temporary Employment Services
13041 EaM Tach,Inc. 28.496.44 Professional Services 1-24
13042 Howlett Pxlard Company 170,016.72 Computer 5a6warelHardwere-Clasp Catelyal Network Swlkhos
IW0 IPMC do Parsons 1,666,851.00 Engineering Services-Integrated PngmMProject Management Temporary Staffing,Mail.&Supplies
13044 J R FIIarec Construction 400,869.00 Construction Pt-82
13045 JCI Jones Chemicals,Inc. 37,740.04 Sodium Hyptichlorite
13M Kent.Water Solutions 911,550.33 Ferric Chloride
13047 Wye&Moore Corporate Accounting 25.751.50 Professional Services-Sella,Concrete&Other Materials Testing for Various Capital Preface
13040 Polydy e,Inc. 63.016.07 tectonic Potymer MO 3-11-92
13049 Ten Renewal,L.L.C. 41,395.54 Grit B Screenings Renew alb Digester Drying Bast Material Removal
13050 T1e Wakenhul Corporation 48.573.82 Security Services
13051 J R Filer ConslroMion 1,284,692.10 Cgnslnetion 1`1-62
13 Absolute Standards.Inc. 1.485.00 Lab Pen&Supplies
13053 Advanced Cooling Technologies 6.471.66 Ar Conditioning Servia
13054 AGM Electronics,Inc. 1.485.61 Electronic Parts&Supplies
13055 Agreeya Solutions,Inc. 3.491 Professioal S..-Records Management Study
13056 Argos Safely.Inc. 9,61527 Satety Supplies
13057 WM Coreulting Engineers 12,675.00 Professional Serdas-Assistant Engineer to Manage Dig Men Utility Identification Program
130M Ahambm Foundry Co.,LM, 5,678.43 Manhole Frames&Covers
13059 Alled Packing&Rubber,Inc. 1,092.91 Mechanical Parts&Supplies
13M Amenan Society for Public Morin. 75.00 Membership
13061 Amster,Inc. 2,940.00 Computer SofnarelHardwere-Master Camera Licensee B Support
13062 AppleOne Employment Service 12,650.43 Temporary Employment Senaces
13063 Applied Incusnial Technology 146.63 Mechanical Paris&Supplies
13064 Archie try,Inc. 4,936.00 Asphalt Instelloban
131185 Aspen Publishers,Inc. 278.44 Publications&Books
13D66 "TM 34726 Publications&Books
13087 AT&T 950.83 Telephone Service
13068 AT&T Long Durance. 1,060.36 Telephone Service
130M AT&T Mel II,L.L.C. 227.98 Telephone Equipment&Activation
13070 AT&T Mobility 11.L.L.C. 11,496.76 Wiretess Telephone Services
N:WIx'+M`9xcEL.aWAISvsIVAflCiWm eei]Repr47gasKJeimePsidnepan MaMmmLB 07 3146.xW EXHIBITS
rmaralc Pegs 9 of 13 V oI11009
dells PoW From 07116108 to 07131108
Wert.. likk Vector Amount Description
13071 ATCC:American Type Culture Collection 425ZI Lob Parts&Supplies
13072 AWSI 750.00 Department of Transportation Program Management&Testing
130y3 Baker Tanks 2,189.00 Tank Rentals
13074 Bask Chemical Solutions,L.L.C. 17.51 Sodium Bisulfte&Sodium Hydroxide
13075 Be.flan Past Control,Inc. 175.00 Pest Control
13076 SennaB Borten Lighthouse 2,950.20 Electrical Pads&Supplies
IM" Seri Gp%nWdr Service 12.710.55 Mechanical Repair&Maintmance Services-Govemm
IM78 BHI Management Consulting 4.245.00 PrWasstonal$erve.-Strategic Planning&Factiteting Services for EMT Reteat It Board Workshops
13019 Boyle Engineering Corporation 4,1511.74 Protessional Services 1-24
13080 Business Protection Specialists,Inc. 2.055A0 Professional Services-Access Control Study&Report
13081 C&D TeMnWogies 913.78 Fleshlighls&Bafenes-Magnets
13082 California Politics$Week,Inc. 80.00 Publications&Space
13083 CARO 175.00 Membership(Calif.Assoc.of Pudic Into Officers)
12084 Cade Nunley Dean DBA Dade Pacific 3,109.05 Crane Rental
13085 Casual Gourmet 527.78 lion lrg Expenses
13086 Cavanaugh Machine Works 12.015.01 Repel&Maintenance Services-Pump Bearing Housing&Stuffing Box
13087 Chet Frohlich Photography 2,T20.69 Pho"rephy Services-Construction Photos
13M Circle,Inc. 191.65 Office,Supplies-Toner Carriages
13089 City of Fountain Valley 264.05 Water Use
13090 Clean Harbors Environmental Services 5.968.67 Hazadous Waste Management Services
13091 Coast Rubber Stamp.Mg. 64.60 Office Supplies
13092 Columbia Analytical Services.Inc. 80.00 Analysis of Wastewater,Industrial Wastewater&Siosollds
IM93 Canmonwi Film ,Inc. 1,127.00 Training Video-Records Management
13 Computer Protection Technology.Inc. 6=UBJ Battery Replacements
13095 Consumers Pipe&Supply Co. 1MCS4 Plumbing Parks&Supplies
13096 Corporate Express MIT Office Supplies
IM97 Corporate Image Maintenance,Inc. 12.250.00 Cusaxfial Services Spec.W.9899-09
130M County Wholesale Electric Co. 510.43 Electrical Parts&Supplies
13M CRAM Inc. 315.00 Conine,Rentals&Waste Disposal Service
131N CSAMSCO 9.054.17 Mechanical Parts&Supplies
13101 CWEA Membership 132A0 Membership(Calif.Water Environment Assoc)
131M 0.R.McHatty&Associates 2,390.00 Trelning Regiata0on
131M Desert Pumps&Pans.Inc. 814.63 Pump Pans Is Supplies
131N DLT&V Systems Engineering,Inc. 20,6611 PMessiona$Services-SCADAuProcess Historian Programming
131M Electra Bond,Inc. 3,02T.79 Repair&Maintenance Services-Fusion Bond Epoxy Coadrg to Pump Pads
131N Employee Benefits Specialists,Inc. 12,875.21 Reimbursed PmpaM Employee Medical&Dependant Co.
13107 Environmental Samp0rg Supply 60.77 Lab Pads&Supplies
13108 EnMronmisi Water Solutions,Inc. 6.214,19 MeteMg Pumps
131N ERI Economic Res "Institute 3,467.00 Subscription Renewal
13110 Express Lens Lab 4,666.75 Salary Glasses
13111 Fedex Corporation 230.11 Fright Services
13112 David Fink 1.750.00 Cold Settlement
13113 Forken Ergineetlng&Surveying,Inc. 2,318.75 Sureying Services-Various Capita$Projects
13114 Francese Tax Board 50.00 Wage Gamishment
13115 Fmsso Pofles 01.75 Human Resources,Background Chiscka
13116 Fri Electrodes 210.07 Computer Supplies
13117 Cilyol Fullerton 39.68 Water Use
13118 Goloenwesl Cory. 1,975.00 Various Maintenance Services-GroundskeeptngRioof Leaves RemovaliCeiling Tte Cleaning,M.
13119 Grainger,Inc. 77431 Mechanical Pan&Supplies
XWvpOusSF. L4M]3PAP MECb Ps0Aepcni[ CtrbmvakReOary us, eni_a_07-31yBtlu EXHIBIT
mrzlse, Page 100113 Wn Iota
CMlma Paid From 07116MB to 07131MS
Warrant No. Vendor Amount Description
131M Great Western Sanitary Supplies 305.88 Janitorial Supplies
13121 Herrington Industrial Plastics,Inc. 8111 Mechanical Pats&Supplies
131U Hill Brothers n,806.69 Chemicals-Odor&Corrosion Control-Navgot Trunkine
131M His.Inc. 5.985.96 HaWasm
13124 HMK Air Conditioning 18,000.00 Pmlesslonal Services-HVAC Replacement
13125 Home Depot 8.57 Misc.Repair&Maintenance Materiel
13126 Hub Auto Supply 46.n Vehicle Paris&Supplies
13127 Cky of Huntington Beach 12,997.13 Water Use
13128 Hyatt Legal Plans.Inc. 1,098.00 Employee Voluntary Legal Plan
131M Indiana Child Subxit Bureau 290,00 Wage Ga enthmenl
13130 InulusWal Disltbution Group 755.97 Tools.Sealants&Mechanical Supplies
13131 Industrial Threaded Products.In, 458.22 Immetory Fasteners
131N Internal Ravens Service 175.00 Wage Garnishment
131M Irvine Ranch Water District 8.57 Water Use
13131 Jamison Engineer,Contractors,Inc. 4,27DD0 Professional Servie.SPE8-1
131M J bsler,Inc. 395.01) Notices&Ads
13136 Lab Safety Supply,Inc. 2.801.0 Lab Pairs&Supplies
13137 Lorman Education Semces 558.00 Training Registration
13138 M.J.Schiff and Associates,Inc. 14,513.24 Temporary Employment Services
131n W.M.Wal Michel Financtal Group 158.08 Exewtive OaaMlity Plan Premium
131Q Materials and Contract Serous 2.304.0D Temporary Employment Semces
13141 MBC Applied Environmental Science. 2M.00 Regional Ocean Monitoring-Aerial Survey of Kelp Bade horn Newport Harbor W Venture Co.
13142 McMaster Can Supply Co. 3,445.93 Mechanical Parts&Supplies
13143 Midway Mfg.&Machining Co. 3,232.18 Mechanical Pats,Supplies&Repairs
131" Mine Safety Appliances Company 185.86 ENdtral Pats&Supplies
13145 Morgan Company(WRM.Inc) 727.31 Electrical Paris&Supplies
1310 MSUS Online,Inc. 200.00 Computer so&wem&Technical Support-MSOS Online Web Sarver
13147 Municipal Information Systems 100.00 Membership
13145 Mu phy Industrial Coatings.Inc. 7,a55.OD Rai elr&Maintenance Senins-Coufing of Low Pressure Gas Holder Roof
13149 HAS Associates,Inc. 1,775.00 Lab Ports&Supplies
131M National Bond&Trust 1.801.49 U.S.SaWngs Bonds Payroll Deductions
13151 Neutron Products,Inc. 2,976.29 Anionic Polymer
13152 Nickell Melal$pmy 2,495.O1) Repair&Maintenance$ervWe.-$haft
1310 O C Tanner Recognition Company 225.04 Employee Semce Aands Program
131M OCS Reprographics 5.060.01 Printing Service.MO 1rz w
1310 OCEA 579.49 Dues Deduction
131M One.ouma Distributors,Inc. 976.85 Electrical Pats&Supplies
13157 Om,.County$heiff 500.40 Wage Gemahment
13158 United Way 60.00 Employe Contributions
131M Orange Fluid System Technologies,Inc. 3.886.08 Plumbing Pets&Supplies
131N Oxygen Service Company 937.50 Rebuild Shop Gases&Lab Paris&Supplies
13161 Pectic Mechanical Supply 1.174.08 Plumhing Supplies
131U Patriot Video Productions 142.12 Video It Editing Services
13163 PCS Express.Inc. 263.11 Counter Service
131U Peace OMcers Council of CA 2,025.81 Dues Deduction,Supamsors&Professionals
13165 People and Processes.IM. 3,995.00 Training Registati.
131N Peppardlne University 4,070.96 On-Ste Leadership Academy Training
13167 PetrmTam Insulation,Inc. 4,298.00 Rabalt&Maintenance Services-Pipe Insulation
13188 Procare Work Injury Center 545.00 Medical Screenings
"We tNWEXCR.M83XMPS MEI WY PaHRepa0700T msPab eW-AYaUr t B_0731L0.tln EXHIBITS
"Inlc Page 11 of 13 wlya(08
Claims Paid From 07/16606 to 07pVOB
Warrant No. Vendor Amount Description
1310 Prudential Overall Supply 5.037.03 Unilkirms&Related Asides
13170 Pnnoaistar America,Inc. 3,471.06 Racelr&Maintenance Semces-No.3 Cake Transfer Unit&No.3 Hydraulic Unit
13171 Rellacler 6,926.23 Employee Voluntary Life,Cancer&Supplamen4l Short-Term Disability Insurance
13172 Reatek Corp. 1.072.87 Lab Pads&Supplied
131M Ralo Rester NOC611 464.24 Plumbing Service.-Clear Done In Maintenance Bldg.Kitchen Sink
13174 RS Hu0hes Co.,Inc. 137.26 Peird Supplies
13176 Ctiy of Seal Beside 354.74 Water Us.
131M Shamrock Supply Co.,Inc. 295.40 Pain.Rope&Misc.Supplies
131" Shumi Sales&Engineering 745.48 Mechanical Pads&Supplies
13178 Smith-Emery Company 18,298.00 Solid,Concrete&Other Materiels Testing
13179 Sou0lem Califun is Edison 72.55 Power
131N Sparkletis 1,679A9 Drinking Watx/CDCIer Rentals
13181 Spec Services,Inc. 9,219.37 Engineering Services J-33-1
13182 Square D Company 1.214.36 Computer So0were-ION Enterpnsa Client License$
131W Stanton Radiator 5.696.0 Radiator Repair
13184 Stratus Emso0mentel,Inc. 8.050.00 Professional Service$-Goundweler Monitoring
13185 Tam Factory 365.58 Meeting Expenses
131N TekSyatems 6.080.00 Temporary Employment Services
13187 Teronolx International 2.897.00 Pest Control
13188 Testamerics0mano 6.273,44 Analysis of Blowlds
13188 The Standard Insurance Company 2,69529 Executive Disability Insurance
131M Thompson Industrial Supply,Inc. 467.38 Mechanical Pad.&Supplied
13191 Thompson Publishing Group 400.50 Publication
13192 Transom 3.761.60 Tons
13193 TA-Gourd Fire 3,796.49 Mand.Agree.for Annual InspectionlServlcing Fluid Extinguishers at Pits.1 8 2,Pump Stes.&Flwt Vehicles
13194 Truck&Auto Supply.Inc. 2.906.67 Aut0mbil Pads&Supplies
1310 UC Regents 725.00 Training Registration
13196 Union Bank of Califomte 4.593.48 Banking Services
13197 United Panic SeMces,Inc. 2.28OAo Landscape Maintenance at Plants 1&2 and Pump Stations
131N Un0ad Parcel Service 55.57 Parcel SeMce.
131% United Stales Postal Service 5.000.00 Postage
132M US Peozide,L.L.C. 4.895.58 Odor&Corrosion Control Treatment for Col.By .;Hydrogen Peroxide&Famous Chloride
13201 Varian,Inc. 825.00 Lab Equipment Repair&Maintenance-Vernon 8400
13202 V L System.,Inc. 675.00 Temporary Employment Services
13203 Vortax Corp. 4,238.30 Door RepeiralRepliaxmenb-Various Locations
132N MR Sciendfso Products 1,658.49 Lab Paris&Supplies
13M Welligfortl S08ware,Inc. 3,000.W Training Registration
13M Xerox Corporation Sill 11 Center Services-Equipment Leve0s,Managed Services.&Metered Copy Usage 8 Charges
1=7 YatelCheae Materials Handling.Inc. 22.82 Electric Cad Pads
1=8 3CMA 375.M Membe omp
13209 Nicholas J.Adontes 768.01 MeetingfTraininp Expanse Reimbursement
13210 Dindo A.CeMil. 265.96 M"bngTralniN Expanse Reimbursement
13211 William 0.Cassidy 440.00 Mea0ng77relning Ezponse Reimbursement
13212 J."F.Evangelista 125.00 Mceeog77raining Expense Reimbursement
13213 Ingrid G.Hillebrand 246.17 Meeting?raining Expense Reimbursement
13214 Chades F.Winwr 222.99 Meafing77reining Expands Reimbursement
13215 Empkryee Benefits Specialists,Inc. 797.50 Reimbursed Prepaid Employee Medical&Dependent Co.
13216 Marc Newsom and Dell 1,246,46 Employee Computer Loan Program
13217 County of Orange Auditor Controller 795.00 Administration Fee-Adjustment In Property To.Bill
HASPIWOgxWLdpU]pVP&IMfcYlmt Paid Repo'1@malCleimaPalEReren Allsor nl B_07JtL8 xlsx EXHIBIT
M/21pte Page 12 of 13 aeIDAea
Claims Paid From 071161O11 to O7/31/OB
Wamand No. VenCar Amount Description
13218 County 0Orange Au01br Controder 90100 Adminis0ation Fee-AE)uslment ro Properly Tax Bill
13219 James Cabrel 1.810A9 Employee Computer Loan Program
13220 Scull Coast Air Duties Mensgemem Dist. 7,027.06 Regulatory Operating Fees
Total Accounts Payable-Warrants S 21.263.35]30
Pmrelt Dlabunamenb
39740 - 39811 Employee Pay&ecks $ 116,888.84 Biweekly Payroll(07/1&D8)'
39821 - 39875 Employee Palchi cks 115,892.3D SkveeNy Payroll(07MM)
39909 - 39817 Employee Paychecks 3,378IS Interim Payroll-AE)ualmenls--
157933-158511 Deatt Deposit Stalemants 1.3od.132,61 9,.kly Payroll(07/161(9)
158512. 159089 Direct Depoelt Stalements 1,4087013.80 Biweekly Payroll(07/2W08)
Total Psyroll Disburwmanta 8 2.950.o00.]d
-Checw 39876 to 39M ware for e0 out of order ellmpOrle6on the roll. 08 report.
••meow 39878 a 39W8 were prime6 pm of order far trip oerol/Dfi p.yroll.
Wire Transfer Payments
OCSD Payroll Taxes 8 Contributions S 790.431.93 Biweekly Payroll-(07/10/O8)
US Bank
Payroll Taxes B Contributions ]BO.d31.93 Biweekly Payroll6 Refunding
US Bank 1,p59,738.25 Series 2000Aefnding 1n8 Cein1sofPirfcistiipatlony July Ptlncipe181nt Pay Payment
US Bents 11.838.5487d Seines M07A Refunding of Part tap ti PBMelpe9oes July PrOlameat l 8lnlerasl Payment
Union Bank of California 7.165.375.22 Seines 2007B Ceintllc rk s of PeHigpation July Interest Payment
Union Bank of California 7,188376.22 Series MOM CeMBcalea of Participation July Interest Payment
Union BaIIk of California 1.567.133.12 Seines 20D3A Ceini6catw of Participation July Interest Payment
Total Wks Transfer Payments S 31.108587.52
Total Claims Pelf 0711WN-O7/3/f011 S 5531BB25.56
N� WE%CELalal]S PR Page 130f 13
yAPSHE1C44e Pao RegMA0464ul'"Rapen-AllaflmrnL607�11110.4ax EXHIBITB
L1LfAY
0
9'
Orange County Sanitation District
MINUTES
BOARD MEETING
July 23, 2008
�o�Nt 3 ANI Tgl�oy
9
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Fcl�N HE ENV�Q��
ADMINISTRATIVE OFFICES
10844 ELLIS AVENUE
FOUNTAIN VALLEY, CALIFORNIA 92708-7018
Minutes of Board Meeting o
07/23/08
Page 2 r
ROLL CALL
A regular meeting of the Board of Directors of the Orange County Sanitation District was
held on July 23, 2008 at 6:30 p.m., in the District's Administrative Offices. Following the
Pledge of Allegiance and invocation, the roll was called and the Clerk of the Board
reported a quorum present as follows:
ACTIVE DIRECTORS ALTERNATE DIRECTORS
X James M. Ferryman, Chair Bob Ooten
X Doug Davert, Vice Chair Jim Palmer
X Charles Antos Gordon Shanks
A Don Bankhead Sharon Quirk
X Larry Crandall Gus Ayer
X Bill Dalton Steven Jones
A Jon Dum@ru Carolyn Cavecche
X Rose Espinoza James Gomez
A Don Hansen Jill Hardy
T Phil Luebben Prakash Narain
X Patsy Marshall Jim Dow
X Darryl Miller Douglas Reinhart
T Roy Moore Ron Garcia
X Joy Neugebauer A[ Krippner
X Chris Norby Janet Nguyen
X Ken Parker Catherine Driscoll
X Brad Reese W. Richard Ulmer
X David Shawver David Cadena
)F Christina Shea Steven Choi
T Harry Sidhu Lucille Kring
-jF Sal Tinajero David Benavides
X Constance Underhill Joseph Aguirre
X Mark Waldman Henry Charoen
X Don Webb Leslie Daigle
X Jim Winder John Anderson
STAFF MEMBERS PRESENT: Jim Ruth, General Manager; Bob Ghirelli, Assistant
General Manager; Penny Kyle, Clerk of the Board; Nick Arhontes; Ed Tortes; Lorenzo
Tyner; Bob Bell; Tod Haynes; Rich Castillon; Bret Colson; Like Kovac; Norbert Gala;
Michael Gold; Martin Holl; Mile Kleinbergs; Mike Reideler; Jeff Reed; Juanita Skillman;
Mary Sue Thompson; Jane Tran; Simon Watson; Norm Whiteman; Paula Zeller
OTHERS PRESENT: Brad Hogin, General Counsel;Al Krippner; Linda Whiteman;
Zachary Whiteman
1
Minutes of Board Meeting
07/23/08
i Page 3
3. MOVED, SECONDED AND DULY CARRIED: Consideration of motion to
receive and file minute excerpts of member agencies relating to appointment of
Directors, if any.
City/Aaenw Active Director Alternate Director
Villa Park Brad Reese W. Richard Ulmer
PUBLIC COMMENTS
There were no public comments.
REPORT OF THE CHAIR
Chair Doug Davert thanked the Board members for their vote and support as Board
Chair and welcomed Director Brad Reese as active director. Chair Davert reported
briefly on a conference call with IRWD and the OC Water District on the impact of
property tax revenue use for balancing the state budget. Chair Davert presented
Director Ferryman with a resolution of commendation and acknowledged his role in the
Sanitation District's progress and achievements during his leadership. Mr. Davert also
reviewed the meeting schedule for August, and asked Director of Technical Services,
Mr. Ed Torres, to present Service Awards to Norm Whiteman and Mike Reideler.
REPORT OF THE GENERAL MANAGER
General Manager, Mr. Jim Ruth, gave a brief update on the IRWD and SAWPA
operating agreements. Mr. Ruth recognized Ed Torres, who reported that OCSD had
been awarded a grant issued by the California Air Resources Control Board for the
production of hydrogen gas. Mr. Tortes made a request for the agencies to participate in
the Biosolids"Take-Back Program." Mr. Torres also reported that OCSD had received
the National Environmental Achievement Award for the educational public outreach on
the campaign "No Drugs Down The Drain.' The newly-released OCSD public education
video was viewed by the Board members.
REPORT OF THE GENERAL COUNSEL
General Counsel, Brad Hogin, did not give a report.
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 06/15/08 06/30/08
Totals $15,185,918.34 $17,811,046.43
r
Minutes of Board Meeting
07/23/08
Page 4 r
Director Luebben abstained from discussion and voting on Warrant Nos. 11446, 11785,
and 11849, 12189. Director Shawver abstained from discussion and voting on Warrant
No. 11885, 12092. Directors Norby, Shea and Sidhu abstained from discussion and
voting on all warrants. Abstentions were pursuant to California Government Code
Section 84308.
CONSENT CALENDAR
7. a. MOVED, SECONDED AND DULY CARRIED: Order the minutes for the
regular meeting held on June 25, 2008, to be filed and deemed approved,
as mailed.
b. MOVED, SECONDED AND DULY CARRIED: 1)Approve a sole source
Service Contract Agreement with Process Equipment Company for
overhaul and repair service of#4 Ocean Outfall Booster Pump, for an
amount not to exceed $272,262; and,
2)Approve a contingency of $27,226.20(10%).
C. MOVED, SECONDED AND DULY CARRIED: Authorize the General
Manager to increase the Delegation of Authority limit(Section 7.02)to
Task Order FE 07-00-15-01 issued to Willdan and Associates, increasing
the total cost to an amount not to exceed $150,000 in connection with the
Professional Design Services Agreement supporting Facilities
Engineering projects(Job No. FE07-00).
d. MOVED, SECONDED AND DULY CARRIED: Approve Amendment No.t
to the Agreement for Purchase of Capacity and Payment of Operational
and Maintenance Charges Relative to San Joaquin Hills Planned
Community with Irvine Ranch Water District, in a form approved by
General Counsel.
e. MOVED, SECONDED AND DULY CARRIED: Approve out-of-country
travel to Denmark for one Orange County Sanitation District employee to
witness factory testing of aeration system blowers in connection with
Secondary Activated Sludge Facility 2 at Plant No. 1, Job No. P1-102,
and all travel, lodging, and per diem costs in accordance with District
travel policy.
1
Minutes of Board Meeting
07/23/08
Page 5
COMMITTEE REPORTS AND RECOMMENDED ACTIONS
8. STEERING COMMITTEE
Chair Davert reported OCSD's state legislative lobbyists, Chris Townsend and
Heather Dion, reported on possible water bond appropriations.
Consent Calendar
a. MOVED, SECONDED AND DULY CARRIED: Order Steering Committee
Minutes for the meeting held on June 25, 2008, to be filed.
b. MOVED, SECONDED AND DULY CARRIED: Adopt Resolution No.
OCSD 08-12, authorizing a payment deferral option of Capital Facility
Capacity Charges(connection fees)through July 31, 2009, to builders of
large housing development projects.
9. OPERATIONS COMMITTEE
Consent Calendar
a. MOVED, SECONDED AND DULY CARRIED: Order Operations
Committee Minutes for the meeting held on July 2, 2008, to be filed.
b. MOVED, SECONDED AND DULY CARRIED: 1)Approve a Professional
Consultant Services Agreement with Black&Veatch Corporation for
Construction Support Services for Newport Trunk Sewer and Force
Mains, Bitter Point Pump Station to Coast Trunk Sewer, Contract
No. 5-58, for an amount not to exceed $973,463; and,
2)Approve a contingency of$58,408 (6%).
C. MOVED, SECONDED AND DULY CARRIED: Authorize staff to enter
into negotiations with Black &Veatch Corporation for construction
support services for Continuous Emissions Monitoring Systems,
Contract No. J-79-1A.
10. ADMINISTRATION COMMITTEE
Consent Calendar
a. MOVED, SECONDED AND DULY CARRIED: Order Administration
Committee Minutes for the meeting held on July 9, 2008, to be fled.
Minutes of Board Meeting
07/23=
Page 6
b. MOVED, SECONDED AND DULY CARRIED: 1)Award a purchase
contract to TCS America, a division of Tate America International
Corporation, for Installation & Implementation of IBM-Maximo
Computerized Maintenance Management System (CMMS), Specification
No. CS-2008-364BD, for a total amount not to exceed $874,480; and,
2)Approve an $87,448 contingency(10%).
C. MOVED, SECONDED AND DULY CARRIED: Approve an agreement
with Banc of America Securities as the Orange County Sanitation
District's Remarketing Agent for the COP Series 2000A and Series 20008
variable rate debt issues, in a form approved by General Counsel.
d. MOVED, SECONDED AND DULY CARRIED: Adopt Resolution No.
OCSD 08-13 Authorizing the Orange County Sanitation District's
Treasurer to Invest and/or Reinvest District's Funds; Adopting District's
Investment Policy Statement and Performance Benchmarks for FY 2008-
09; and Repealing Resolution No. OCSD 07-17.
11. GWR SYSTEM STEERING COMMITTEE (GWRSSC)
Vice Chair Larry Crandall reported that Time Magazine had interviewed staff on
the GWRS system for an article scheduled to be published November 2008.
GWRSSC Consent Calendar
a. MOVED, SECONDED AND DULY CARRIED: Order Joint Groundwater
Replenishment System Steering Committee Minutes for the meeting held
on June 9, 2008, to be filed.
NON-CONSENT CALENDAR
12. MOVED, SECONDED AND DULY CARRIED: a) Approve Plans and
Specifications for the Carbon Canyon Dam Sewer and Pump Station
Abandonment, Contract No. 2-24-1, on file at the office of the Clerk of the Board;
b)Approve Addendum Nos. 1, 2, 3, and 4 to the plans and specifications;
c) Receive and file bid tabulation and recommendation;
d)Award a construction contract to Ken Thompson Inc. for the Carbon Canyon
Dam Sewer and Pump Station Abandonment, Contract No. 2-24-1, for a total
amount not to exceed $5,222,000; and,
e)Approve contingency of$417,760(8%).
Minutes of Board Meeting
07/23/08
i Page 7
13. CONVENE IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE
SECTION 54956.9(b): The Board convened in closed session at 7:25 p.m.
pursuant to Government Code Section 54956.9(b).
RECONVENE IN REGULAR SESSION: The Board reconvened in regular
session at 7:27 p.m.
ADJOURNMENT: The Chair declared the meeting adjourned at 7:30 p.m.
Penny M. Kyle
Clerk of the Board
Orange County Sanitation District
M:\depl\ageMa\Board Minules\2008 Board Minutesk072008 minules.do"
Claims Paid From OW01108 to DWI5108
Wemenl Ne. Vander Amount Description
AteounM Pevablo-Warne,
11430 Blue Crass of California $ 479,314.21 Medical Insurance Premium
11431 Cerolb Engineers 97.808.03 Prot Servicas-2008-09 Rate Sued,Auto Shop Water Sampling.Research Shilegit Plan,&Oulfell Repair
11432 Corporate Image Mohamed.,Inc. 3AT34.00 Custodial Services Spec.No.9699A9
11433 Dube Dental M.118.18 Dental Insulation Plan
11434 Eardl Tail,Mc. M.119.06 Professional Somme 3-58
114W HMK All Conditioning M.M.00 Professional Sa om,-WAC Replucamenl
114M IPMC do Parsons 1,194,335.00 EnBra wing Services-Integrated Pmg2MPmlect Management,Temporary Dealing,MavlI &Supplies
11432 Jami4on Engmearing Contractors.Inc. 54.914.89 paper&Maintenance Sermons-Leak at Influent Splinter Box&Podium ASV System in Board Roam
114M JCI Jonas Chemicals,Ix, 83.997.49 Sodium Hyp lllonle
11439 Kass Founddbn Heath Plan 83,293.29 Medical Insurance Premium
11atO Kemlra Companies,Inc 316,494.84 Femc Chlonaf
11441 Long Beech Roofing,Inc. 31,985.00 Roof Replacemanl at CP Dig Control Room
11442 Malcdm Rroie.mcK 29.259.68 Professional Services J-79
11443 Charge County Water Distl 82,40.61 Green Acres Water Preyed(GAP)
114" Polydyne,Ile. 49,754.98 Casbnk Polymer MO 3-11-92
11445 Southern California Coastal Water Research Project 91.240.00 Collaborative Res bon Project-Endoais Disruption Canpom0e in Coaxal Flatfish-Pheae II
11448 Southern California Edison 89,183.27 Power
11447 US Parboil.,L.L.C. 51,M.74 Who&Cmosbn Control Treatment la Coll.Sys,Hydrogen Perooee&Farrow Chloride
11448 Vile Ford 22,846.93 (1)2008 Ford F-150 XLT 4M-Extended Cab
11449 Walker Constitute Services,LLC, 252.166.31 Repair&Maintenance Services-Cleaning d(4)Digeslers at Plants 1&2
114M Above All Catering 581.40 leading Expends
11451 ABESCO W.." Miscalenenw Meinterens Supplies
114U Agient TeMoologies.Inc. 2TT.15 Lab Pads&Supplies
114W Aiiga.Safety,Inc. 6,215.16 Safety Supplies
114M All Addressed Asphalt 19.35T.00 Paving
11455 American Fidelity Assurance Company 528.04 Employee Voluntary Cooper insurance
114% American Payroll Indiana,Inc. 419.00 Training pluOmetan
11457 American Water Works Aside,Meter Quality 173.00 Mettlesome
114N Applied Industrial Ta hnoe9y 120.62 Mednewl Pads&Supplies
114% APWA Southern California Chapter 400-00 Training Registration
11460 Attlee KY.Inc. 3,285.00 RemmmMoplacement of Temporary Ramping to Truck Loading Scale
11461 AT&T A140.85 Telephone Sems
11482 AT&T Long Distance 1.299.23 Telephone Servos
1141911 AT&T Mobility ll,ILL. 2,005.18 Wireless Telephone Serves
11466 Atlas Technologies.L L.C. &,66D.00 Plumbing Pelt&Supplies
11465 Awards&Treeless Company 78.95 Awards&Plaques
11465 AWSI 133.00 Department of Transportation Program Management&Testing
11462 Basic Chemical Solutions.L.L.C. 19.10.17 Sodium Bisulfile&Sod'mm Hydroxide
114N SioMeriaux Mine.bo. 949.59 Lob Paris&Supplies
11488 Bidquip Produce 45.70 Lab Pals&Supplies
114M Bird B Gone 651 Adl-Rowling Bird Spikes
11471 Bled&Vesta Corporation ;6M.00 Repair&Malmenans Services-Outall Assessment
114U Bnminen Electric BM.92 Reclined Paris&Supplies
114" 1312Nawar Mancem 1,000.00 professional Synocas-Value Notified
11474 California Auto Collision 1.200.00 Whides Raiders&Mainlenanu-V0415
11475 California Deal.of Child Support 1.283.35 Wage Garnishment
11476 California Recreelion Company 2,293.23 Bout Slip Rental Fees for Oran Monitoring Vessel Needs
114" CAPPO.Inc. 2T8.00 Training Registration
114M Canis Coroorafion 1.006.70 Repair&sedimerenon Services-Coils
NtlpMdE%CEL41eV3PAPSWWEYab PaCRdN'n'LteBWenu Pa4Napa.AlWNan1 A- la-Ol W� EXHIBITA
w ahbx - Page 1.19 7.
Claims Palo From 06101100 to 06115108
Warrant No. Vendor y .lml Description
11479 CCP Industries. 5,122.11 Janitorial Supplies
11480 Challen 1,751.04 MOD Promotional Supplies
11481 Chadds P.Cro y Co. 2,58022 Pump,Pump Pads&Suppling
11482 Circle,Inc. 14,498.85 Office Supplies-Toner Cartridges
11483 Clean Harbors Environmental Services 3.154.11 He0adous Waste Management Services
114M Columbia Area ical Servicea.Inc. 870.00 Analysis of Wasloonlar.Irdustdad Waslewaler&Brandies
11485 Computer Protection Technology.Inc. 10,118.29 Destroy Maintenance of Bandiws,Rectifiers,and UPS System
114M COMUS International 119.10 Electrical Pads&Supplies
11487 Con-Way Western Eap-ess 384.55 Freight Semen
11488 Consumers Pipe&Supply Co. 2.203.94 Plumbing Pads&Supplies
11489 Corporate Express 2,579.62 Cedes Supplies
11490 Cedech Engineering 3.941.14 Pump Supplies
11491 Courdy of Orange Auditor Controller 132.00 Encroachment Permit
114W County Wholesale Electric Co. 7,117A7 Electrical Pads&Supplant
1140 CS-AMSCO MA8 Mi danlcal Pads&Sumpter
114N CWEA Specialty Conference 420.00 Meeting Registration
11495 CWEA-TCP 110.00 MembaMrip-CeIIf.Water Environment Assoc.
11496 Dad s Tree Service 6,975.00 Tree Mein".Service
11497 De0urik Water Cadroas 3.314.66 Mechanical Parts&Supplies
1140 DGA Consultants,Inc. 5,310.00 Prokniumnal Services-CCTV Dada Evaluation B Suppod
11499 DO It Right Conabudion.Inc. 2.SW.00 Re.lMeplecement of AV Equipment&Existing Wall at Cannot Center
11500 Duerr EewaNg Corporation 325.63 Paint Supplies
11501 Dwyer Instruments.Mc. 225.55 Instrument Paris&Supplies
11502 Electra Bond,Inc. 888.94 Repair&Maintenance Services-Fusion Send Coating to Plump Pans
11503 Employee Benefits Spacielinds,Inc. 12.726.95 Reimbursed Prepaid Employee Medical&Dependent Care
11504 EMSL Analytical.Inc. 2,100.00 Lab Analyaea
115D5 Enchanter,Inc. 3.225.00 Owen Monitoring A Oafell Inspection&Maintenance
115N Entech Design,Inc. 3,339.19 Instrument Suppose
11507 Ewing Irrigated IMuse ial 1,513.54 Landscape Initiation Pads&Supplles
11508 FEDIl 141.37 Freight Services
11509 Fisher Scientific Canpan,L.L.C. 13,464A2 Lab Pads&Supplant
11510 Fluid Components Ind.,L.L.C. 1.M.50 Ekpriml Pads&Supped.
11511 Frmshlee Tax Boats 50.00 Wage Gamithment
11612 Franchise Tm Bond 117.00 Wage Gumishmenl
11613 Frys Elecbonics 151.30 Computer Supplies
11514 CBy of Fullerton 39.68 Water Use
11515 Gerard Manufacturing Co. 4,186.67 Mechanical Parts&Supplies
11516 Gene&Crashed Company 217.23 Chemicals
11617 Geary Padic Supply 4=65 Ab Conditioner
11518 Gerald Daniel Worldwide 254.56 Mechanical Parts&Supplies
11519 Gienlch Mitchell,Inc. 388.99 Pumps&Pump Pens
11520 GMF Sound,Inc. 1,141.29 Audio System Repair&Maintenance Servods-lab Bldg,
11521 Golden Stete Overnight Delivery Send. 293.30 Courier Samim
11522 GOld.t Corp. 8.293A0 Landanpirg,Grourdskeeping&Repair&Maintenance SeMces-Various
11523 Change,Inc 81163 Electrical Parts&Supplies
11524 Greyber Electric Computed, 716.81 Electrical Pars&Supplies
11525 Guy L.Waded&Sam 70.44 Freight Charges
11528 Heck ck,Portion Indusoes 2.420.77 Repair&Maintenance Services-All Weather Conlreller
11527 Harrington Industrial Plead..Inc 2,775.88 Pump Pads&Supplies
11528 Home Depot n.30 Misc Repair&Maintenance Material
n:upNaa,FYELmsV3gsvaNgFCla'vmptlC npaR00aW Wv Pots Byrn-MYmmmLA_erlgo&Nu E%HIBIT A
"am Prgn 2 of 9 "Peeps
Claims Pala From U6m1N9 to 0 IMS
Warrant No. Vendor Amaunl Description
11529 Voided Check - -
11530 City W Huntington Beach 829.36 Warier Use
11531 Idexx Laborataries,Inc. 8,249.50 Lab Para&Supplies
115N Indiana Child Support Bureau 290.00 Wage Gemithment
115M Ind cam.1 Dtembulion Group 4241.71 Tots.Cleaddr,,Sealants 8 Metllanicill Supplies
11531 homes Revenue Service 175.00 Wage Garnishment
11535 Intended.BMtene.of Cal Coast 1.916.88 Ballades for Vehicles&Care
11538 Intl.Union of O.r.Erg.AFL CIO Local 501 4.11 Dues Deduction
11537 Invertible Systems,Inc. 2.516.72 Instrument Pads&Supplies
11538 Irvine Ranh Water Distant 7.50 Weler Use
1153E ISA 15&W Membership
11W Jays Cntentg 431.15 Meeting Expanses
11541 Johnatona Supply 4,838.21 Electrical Pads&Supplies
11542 JWC Enyimnmentel 11,310.81 Repair&Maintenance Services-MUNn Mori
11543 Kissel Environmental Lab 50.00 Outvde Laboratory Services
11W LIN Image Apparel 677.44 Safety Suppliea
11545 Court Crew 160.00 Wage Garnishment
11548 Daffy Pilot 100.00 Nou..&Me
11547 Mile Killed,Ltd, 9250.00 Installation of City Water Supply at Edinger Pump Station
11518 NAG Systems 1,797.47 Electical Pals&Supplies
11549 Manley'.Boiler,Inc. 4,887.00 Annual Boiler Maintenance
11550 Ma..Mulual Mbhel FinaMal Group 79.04 E.s.dive Disability Plan Premium
11551 MCMseter Cen Supply Co. 665.42 Mechanics Pens,Supplies B Tools
11552 Meda Resurfacing Syeteme.Inc. 300.00 Vehicle Failure&Maimenance Sams-W415
1150 Meador Controls Co. 90.98 Informed Pads&Supplies
115M Maturity Mfg.&MachMing Co. 4,978.05 Repair&Maintenance Services-Roller Sweep Arms for D-DAFT Bering Hub
115M Mitlq Inc. 399A5 Lab Pats&Supplies
115W Court Order 225.00 Wage Garnishment
11507 MSDS Old.,Inc. 3.249.00 Scheme Maintenance-MSDS Online Web Server
11558 MVA Architects 5.525.00 Professional Simmons FE07-00:Bldg.Cade Compliance Review of OCSD Cockdops
11M National Bond B Trust l.M.41 US.Savings Bonds Payroll Deductions
11W National Plant Services,Inc. 8,030.00 Retailer&Meant Serdces-Chemical Grout Sealing of Leaky Sewer Plpirg for Water infiltration Prevention
11581 National Wader Research Institute 5,000.00 NMI Ulllty Banding Network-On-Line Seniors
11562 Neutron produce.Inc. 8.882.19 Mimic Polymer
11563 Newark Electronics MAS Instrument Supplies
115" NRG Engine Serri.e.L.L.C. 3AT0.26 Repair&Maatenavoa Services-40.000 Hire.Cen-GaNCoGsn Overhauls at Ph.18 PIL 2
11565 OCS Reprographics 8.510.70 Printing Servi.-NO 1126/00
11566 OCEA 581.87 Dues Deduction
11687 O.source,Distributors,Inc. 6,681.17 Eleceical Pads&Supplies
11588 Orange County Shed6 IJUSS Wage Garnishment
11589 Orange County United Way 6100 Employee Conlnbunons
11570 Orange Fluid System Technologies.Inc. 56028 Plumbing Pads&Supplies
11571 Oxygen Sentcs Company 429.62 Rebu ld Shop Gases B Lab Pare&Supplies
115T2 PCs Express.tom. 177.58 Courier Send.
11573 Pon.Officers Coundl of CA 2 All Dues Deduction,Supecdmrs B Professlolmis
11574 Pates Wiping Minimal.Co. 494.79 Jenibrbl Supplies
115T5 Performance Pipeline Tedinctagiear 13,107.30 Sewedine Video Inspectors-Vamus
11579 PL Hawn Company,Inc. 310.58 EncMml Pads&Supplies
11577 Plaxair Distribution,Inc 181.19 Lab Pads&Supplies
11578 Phomr,Inc. 59.40 lab Pats&Sup hin,
X:wePW4F%CEL de V'SPAPSIMNFC4'ma Pad Pprm20aB\Gam Pe.RepM-Fminint 0.1S.b... E.CHIBITA
foci Pepe 3 ol9 nudes
Calms Paid Freda o6 IM to 111111151418
Wamnt Per. Vendor Amended Oeaedptlan
11579 Pre-Paid Legal Services,Inc. 1,139.60 Employee Voluntary Legal Service Insucal Premium
11M Propipe Professional Rps Services &OT6.65 Sewarlds,Video Inslaechons
11WI Pmdential Overall Supply 1,567.33 Uniforms&Related Articles
11582 Public Treasury lnsllule 250.00 Training Registration
11M OuiCrstad Intelligence 1,625.00 Them,Registration
11W R L Abbott&Associates 2,OW.00 Kent County Bihou lNs Consulting Services
115M Rain M Rent 2,769.01 Equipment Rentals
11586 Red Veha Company.Inc. 748.88 Repair&Maintenance Services-Sleeve Valve
11587 Restek Corp, 969.69 Lab Paris&Supplies
11508 Rockland College Continuing Education MIN) Training ReSstrallon
11589 Rutland Tool B Supply 57.49 Small Tools
115M Ryan Herco Products Co, 129.69 Mechanipl Pads&Supplies
11591 Sae Coast Designs,Inc. 2.1M.65 Olfica Fumium-Engineering&Construction Trailers
11M 3hamrok Supply Co.,Inc. 2,396.30 Mechanical Supplies.Tools&0agreaserlOmmer
11593 Shureluck Sales&Engineering Bill Mechanical Pads&Supplier
11691 Siemens Water Techrmlogles Cory. 1,T32.71 Service Agreement-Dl Water Systems at Pbnb 1&2
11595 Smardan Supply Company 176.06 Meclmnlcal Pads&Supplier
11M Smith Pent and Supply 224.62 Pan[Supplies
11597 Source Graphics Si Maintenance Agreement-Copima,Printers,Pads 8 Supplies
115% Trans Company 8.210.01 Minors
1158E Southaesl ScienOgc Inc. 1,726.16 Instrument Supplies
11M St.Cuss Sensory,Inc. 1,635.00 01laclomelry Testing Services
11WI Stanley Sbemer Inlemational,Inc. 2,964.05 Caryel Cleaning Servicss
11602 Summit Sleet 263.93 Metal
11603 Sunset IndusNal Pads 63.62 Mechanical Pads&Supplies
11601 Synergy Logistics.Inc.UBA First Ad Supply 137.75 First AN Supplies
11M Technic Ceatlrgs T,35p.OD Pending Services
116% Tmminiv lntamalonal Pas[Control 491 Past ConVd
11607 Tema Renewal.L L.C. 10.119.82 GM&Screenings Removal&Digitab,Drying Bed Material Removal
11608 Testameriw Onlare, &10.W Anarlsisol B:ysolids
Ill Thermo Fisher Scientific 10,710.S0 Instrument Malnlerm.Contract-Albs
11610 Thomas Bros Maps 9,91 GIS Cabbaze B TGDE Viewer So0ware Licenser(.)
11611 Osprey Marine Management 1.501 Coe Ocean Monitoring Samos
11612 Thompson InedusMel Supply,Inc. 131.80 Mechanical Pads&Supplies
11013 T Wamer Communication 51.07 Cable Services
11614 Todugo Pool Services 310.00 Weekly Cleaning of Atrium Pond
11615 The Training Clinic 3,335.35 On-She Training-Leadership Compell Development
11616 Transient Ill Electrical Pads B Supplies
11617 Throw Incorporated 1.370A11 Roof Repairs-Power Bldg.
11618 Truck It AIM Supply,Inc. M.19 Automotive Pads&Supplies
11619 [IC Rea is UCI M.00 MeeOng Registration-Division 620
11620 UBra Scientific 262.08 Lab Parts&Supplies
11621 United Pacific Services,Inc. 2,16110 Landscape Maintenance at Plants 1 It 2 and Pump Sblipms
11822 United Parcel Service 119. 0 Pascal Servces
116M UNNAR USA MM.95 Sell
Heat Varied,Inc ILISM Lab Paris&Supplies
111125 Ver¢on California 7M.65 Telephone Services
11628 Verizon Wireless 650.91 Wireless Telephone Services
11627 Vemas Plumbing 70A0 Service Contract-Teling,Repair&Can.Backl Devices at Pi 18 2&Pump Sta.
Haan Vision Servire Plan CA 9,50&20 Maich Service Premium
X Ngt�1'FMf-EL.AYUIMWSIU0.EiClaliv Pis!Wpm1Wa'ppmr P®t WMmMgmyN A p615p.tly EXHIBRA
Andress Page a of9 siaRaae
Clalme Paid From 06101108 10 06I15108
Warrant No. Vander Amount Meaning.
11629 M.Inc. ON TVOne Mod.IITC2J00-Scaler Rack Mount
11M boater Industries.Inc. 6,07.87 Dour RepaiNReplacemenU-Variant Local
11W1 VWR Saenac Products 2.900.60 Lab Parts&Supplies
11632 Where Corporation 373.52 Lab Parts&Supplies
11M Waddle Seninry Supply 76.W Janitorial Supplies
11631 WEF 626.00 Numbarsi-Water Environment Federation
11635 Westport Appantu.DBA Breaker Sups. 3,456.05 Electrical Pam&Supplies
116M WNon Supply.Inc. 14.66 PWmbing Perot&Supplies
11837 Xenr,Corporation 87.15 Copier Services-Equlpmanl Leases,Managed!Services,&Metered Copy Usage&Charges
11M Court Order 912M Wage Gamishmenl
11639 an Sclenbn, 2,9/1.34 Lab Pam&Supplies
11640 Nicholas J.Arhantes 1.2&1.9/ Meeen iffraining Expense Relmbursemenl
11641 Ronan M.Bell 1,877)9 MeetingTninlrg Expense Reimbursement
1111,12 Jon O.Bradley,Jr. 130.00 MeetinglTralning Expense Reimbursement
116t3 Paler H.Brawn 250.00 Me d nglTraln0g Expense Reimbursement
116t4 Pongaekdi Cady 103.11 MeeWgTralmng Expense Reimbursement
11645 Oindo A Carrillo 213.92 MestinglT aining Expense Reimbursement
11646 Psal M.Camlb 170.00 MestingrtrNning Expense Reimbursement
11W Y.Chit 125.00 MmtinglTraining Expense Reimbursement
11M T has D.Dpdderer 170.00 MemingfTnining Expense Reimbursement
116,19 Santlow A Esoaber 1,115.96 MontinglTraming Expense Reimbursement
11550 Norbert Geia 258.13 MeetingfrrainM1g Expense Reimbursement
11651 Ruben Gomez 12MU Meeting"raft,ing Expense Reimbursement
11652 Florian Ioje 556.00 MeetingTraimng Expense Reimbursement
11M MBM H.Kawamoto 881." Meeting?raimtg Expense Reimbursement
11651 Vladimir A.Kogan 1,611.33 MealmgfTrabting Expense Reimbursement
11655 Umesh N.Murphy 150.00 Mee6ngTraining Expense Retmbunemenl
11656 Kevin R.PachJnm 130.00 MeefingTrainhg Expanse Reimbursement
11657 LBy18.Pens, 690.19 MeeBng?rainmg Expanse Rehnbursemeni
11658 Kurt M.Ranted 170.00 Meeting/Training Expense Reimbursement
11659 Henry R.Salgado 997.06 Meeting/Tninhlp Expense Reimbursement
11660 Ken H.Wong 190.00 MeetingRralning Expense Relmburromenl
11601 Pierre Wang 297.01 MerlinglTrainirlg Expense Reimbursement
11M Orange Corny Sandali0n District 1.433.60 Petty Cash Reimb.
116M Trucar,Inc. 4291.15 RemneflU n User Fee Refund Program
11661 Alan Plummer Assotietas 81,035.58 Pmfessi0nal Service.-Suparoxygenation P...Feasibility Study
116M Alllent Insurance Services,Inc. 38,233.00 Crime,Pmnary&&was Watercraft&Watercraft pollution Insurance Retrewal OBJ19
11666 American Express 29.30.75 Purchasing Carol Program,Mist.Supplies&Services
11667 Blanch&Veatch Corporation 25,019.60 Pmlessi red Services JJ33.J-77&Spcfisation Review
1/68B City of Garden Grove 516,88115 Reuxdisdion User Fee RBNM Ro9nm
11689 JCI Jones Chermcels,Inc. 81,283Aa Sodium Hysuchlorb,
116M Kamm.Compere.,Inc. 101.43&66 Ferric Chun.
11671 Lee&Pa.Ina 20,932.10 Professional Services 5-09
11672 Malcolm simle,Inc. 152,207.35 Pnleee.nal Services 5-M P24D&1-10
11673 Ninyo&Morn 25,1178.25 Professional Servicas-Sons,Concrete&Clesr Melanesia Testing for Various Capital Pmlects
11674 Pulydyne,Inc. 39,402.33 Cationic Polymer MO3-11-92
11675 &Cal Gas Company 44,374.42 Natural Gas
11676 Synal West,Inc. 6s6,061.31 Residuals Removal MO 3-29-95
11672 Tub RanchJMagan Fame 331,792.37 Residuals Removal MO b29-95
11678 US PenrMe.LLC. 120.018.02 Odor It Cmnebn Control TwIMMI for Coll.Sys.;hydrogen Perwrde&Fenaus Chloride
� Pa8e5IN9 IT xxa MDcfxaWa?yAMet.FPGIdxv Pule wwmalperwm Pxd wm p -.VMAmwY�0alsp.oU EXIIBITB
Claims Paid From 06101108 to 06I15I08
Warrant No. Vender BnlouB Description
11679 Woodm6 Spredfin B Smelt 61,594.24 Legal Services MO 7-2 95
116M J.F.Shea Coouhuction,Inc. 4,858,991.91 Construction P290
1101 Uplon Bank W Celifemia 539.W.98 Construction P2.90,Retention
11M Orege County Sanitation District 43283.67 isorke's Comp.Rossi
11683 A W Chesterton 7.045.87 Mechanical Parts&Supplies
11684 Absolute Standards.Inc. 619.00 Lab Parts&Supplies
11M Accurate Measurement Systems 1,43129 Elecliicel Parts 8 Supplies
116N Aceuvant Inc. 8.000.00 Professional Services-ERP Support
11687 Aguent Technologies,Ina 257.69 Lab Parts&Supplies
11688 Ago IrWustnesDBA S Cal Sweeping 860A0 Street Sweeping Services
11689 Machado Erwi cram nlal Cory.DBA As Dud Cfeaning 4,975.00 Air Dud Cleaning Send.
11690 Ag.Safety.Inc. 12.192.71 Safety Supplies
1101 AM Consulting Engineers 14,925.00 Professional Sevices-Part-Time Dig Mod Technician
11692 American Soddy for Ouelity Control 129.00 Membership
11693 Amended Training Resources,Inc. 538.31 Safety Videos
11694 Analysts,Inc. 4.090.64 at Test Kit&Analyses
11695 Applidd Indusral Technology 2.050.26 Mechanical Pads&Supplies
116M APTUS&C 75.00 Membership
11697 Asirtm k Corporation 312.41 Mechanical Parts&Supplies
11698 AT&T Mobility 11,L.L.O. M." Telephone Equipment&Adfva60n
116% Baker Tanks 2.199.00 Tank Renfels
11700 Basic Chemical Sdmidrs,L.L.C. 17,532.35 Sol Bpsulfile&Sodium Hydroxide
111`01 Blue Diamond Car Weed,Inc. 1,190A8 OCSD Venide W idtfid Wa ring Services
11702 Brien Briggs 400.00 Video Services
111`03 Brown&Caldwell 12.570.36 Pmhance nal Sevices P2.91
11704 Burlington Safety laboratory of CA,Inc. W139 Safety Supplies
117M Cambridge Isotope Labs 90 SU lab Parts&Supplies
11106 Camp Dresser&McKee.Inc. 3.545.95 Pedessponel Sensces J-719
11707 Camillo Engineers 2220.20 Professional Services P290
11700 CASA 5,000.00 Statewide Phanmaceulical Campaign Demanded-'No Drugs Doen The Didamr
117M Cavanaugh Machine Works 340.00 Mechanical Paris B Supplied,
11710 CDCE,Inc. 4,997.4.5 Computer HedwareSe&ware-Notebook Vehicle Mounts
11211 CprGs.Inc. 4.118.53 Office Supplies-Toner Caddd9es
11712 Chan HaNers En incern nlal Sinvidea 1,415.88 HaieNous Waste Management Sensors
11213 CMAA 150.00 Training Registration&Meeting Registration-Di760(Coislmdion Management Assoc.of Amnia)
11214 Columbia Arml dcal Senecas,Inc. 500.D0 Analysis of Wastewater,Industrial Wastewater&Bicuspid.
11715 Compressor Components of California 2,82BLW Retail&Maintenance Services-Crank Sham
11716 Consolidated Electrical Disltlbulors.Inc_ M.19 Electrical Pads&Supplies
11717 CdWmfe1 Motion Solutions =1116 Inebriated!Paris&Supplies
11218 Corporate Express 26.93 Office Supplies
11719 Comply Wholesale Eludrk Co. 7.009.14 Electrical Pads&Supplies
11720 DHL Express USA.Inc. 83.35 Freight Services
11221 DunOSesse Containment "M Instrument Paris&Supplies
11M Elecba Bond,Inc. 2,717.46 Repair B Maintenance Services-Belt Press Pads
11323 Eli Joudsls 12500 Books&Publications
11y21 Enctvnter.Inc. 3.000.00 Ocean Monimnng&Oldish Inspection&Maintenance
ilm Enwondamal Express 206.00 Lab Peels&Suppllrs
11T26 Erwimarmntal Resource Assodmes 994.76 Lab Parts&Supplies
11M Express Lana Led 1,931.67 Safety Glasses
11T28 FEDEX 119,83 Freight Services
X Yaedkasdi.als. 5.rd.r—Pad Re%nVecli lime Pad P.- EXHIBIT
ervimWa - - Page6o19 lam
Chums Paid From 08101108 to 06ISA18
Warrant No, Vend., Amoud De celptien
11729 Ferguson Enterprises.Inc. 1.019.91 Mechanical Paris&Supplies
11730 FOnte t Engineering&Surveying,Inc. 6.31625 Surveying Sarvicas-Vaunts Capital Projects
11T31 Gansu Callahan Company 2,746.98 Chemicals
11T42 Geomebia Consultants,Inc. 2.345.75 Profmalonal Services P1.97
11T33 CHO.L.L.C. 6.662.51) Pmfevional SmvI.-Asesl Management Program
11731 GdEenweat Corp. 5,645.00 Repair&Maim.Senees-Chain Link Fance trslellshmuRepelr;Landscaping;Janhaal Serveas
117M Grudger,Ion 450.14 Mechanical Pads&Suppree
11736 Gayber Electra Company 115.36 Electrical Repair&Malnanenca Seodcas
11737 GTE.NET,L.L.C.(Verson Online) 99.99 wireless Telephone Senicas
117M Gid anae Recmda Mmid emem 90.00 Off-Slk Remma Storage
11739 Haldeman,Inc. 1,983.38 MCNenvel Paris&Supplies
11740 Hampton Tedder Technical Services 1,215.00 Prdesslonel Services-Electrical Accepenca Testing-Vadous Capital Projects
11741 Hardy Diagnostics 1,250.98 Let,Paris&Supplies
11742 Heallhpoinle Moc irol Group,Inc. 75.00 Fitness For Duty Evaluation
11743 Hill Brothers 24,85428 Chemicals-Odor&Corrosion Control-Nenpon Tnnkllne
11744 Hub Auto Supply 1,708.54 Vehicle Paris&Supplies
1175 Hydrator 2769.97 Automo"Pena&Supplies
11746 Induanial Disabugun Gmup 414.80 Paint It Miscellaneous Supplies
11747 IndusWel Threaded Products,Inc. 1,483.39 Inventory Fasteners
11748 Internet Affairs Connections.Ix. 3.300.00 Legal Services
11749 Jamoen Engineering Contractors.Inc. 9.395.00 Professional Services-Piping Invalidation&Inspection of By-Pass Channels at NL 1 Headwarks
11750 Jays Calming 1.90476 Meetlng Expenses
11751 Johnstone Supply 112.04 Mechanical Parts&Supplies
117W Lynne E.Riciard ARA 3,500.00 Real Estate Appraisal Sa oss
117S3 Maya HOlfnan McCann,PC 3A00.00 Financial Audding Spruces
11751 No Fadden-0 is Hamaam Co. UAI Automotive Pans&Supplies
11755 Molumrin Red Man Corasedion 104.41 Mechanical Pads&Supplies
11158 Metter Tpado 4,043.M Installation of Truck Loading Sala&Components at Pit.1 Salida Loading Sudan
11757 Midway Mfg.&Machining Co. 2.758.40 Mmclanlwl Pads&Supplies
117SB RMB Engineering&Sales,Inc. 8.190.00 Instooenl Supplies
117% MVA ArohBects 465.00 Professional Services SP-127
11M Neal Supply Co. 1.06.19 plumbing Supplies
11761 Neutron products,Inc. 2.986.47 Anionic Polymer
11782 Ol Analytical 826.75 Ieb Pam&Supplies
11783 Onesource Distributors,Inc. 7,055.46 Electrical Pads It Supplies
11784 Orange FWld System Technologies,In. 2,080.92 plumbing Pads B Supplies
11785 Psefc Mechanical Supply 89B.10 Plumbing Supplies
11M Feudal Video Productions 551.95 VMavo B Editing Services
11767 KS Events,lec. 113.62 Course Serves
11788 Process Epulpmenl Company 3.697.54 Pomp Pads&Supplies
11789 propipe Professional Pipe Services 696.12 Sewedins Cleaning for City of Tustin 8 Unincuryoaled County Property
11710 Pandd1aIOveaIlSupply 3,435,11 Udforms&Related Adidas
11171 Relubm Dlsposel Co. 213.07 Tash Remove)
Win Reinb ye Nut&BOIL Inc. 1,BB0.20 Mechanical Paris It Supplies
11723 Ralimsar 8.912.25 Employee Vdurdey Life,Cancer&Supplemental Staid-Term Disability Insurance
11774 Radial;Cory. 1.038.32 Lab Pens&Supplies
11775 RPM Electno Motors 190.00 Motor Repairs&Testing
11716 Rdleoll Tool&Supply 18.30 Smell Tads
llnif Ryan Heron Products Corp. 69822 Meal
11778 Sean No.Pale 556.85 Signs
H up4aM1E%CELN UV P$XRRFWhm Paul lossaa1C000tine Paid egml-Machines A as-IFa.Naa P BTe19 EXHIBIT
(iMIWt rag ]9RWa
Claims Pam From 06ID1108Is 0611VOS
Wam8 klo. Vendor Aground Dnearipnon
11TI9 Shammd Supply Co..Inc. 2,353.77 Mechanical Supplies.Smell Tools&Locks
1171IND Supelco,Inc. 419.83 Lab Paris&Supplies
11781 SHIIPath Seminars 691 Training Registration
11282 Smi0t-Emery Company 13.11179.50 S0lls,Conorele It Other Materials Testing
11703 Sneg On Tools.Inc. 47.34 Tools
Mill Seem Coast Air Duality Management Did. 1M.W Permit Fees-Annual Emission,Operation It Max.Fees
117M SouMem California Edison 1,82l.79 Power
117% Eliminate 1,792.24 Coding WatodCmler Rural
11787 St.Oroix Sensory,Inc. 1,635,00 Olfactomatry Tossing Services
11788 SY&1CA6 TSO 1,50.08 SCADA Syabm VAX Swim Agreement
117M Tam Factory 195,57 Meeting Expenses
11T9D TCH Associates,Inc. 8,016.63 Lab Paris&Supplies
11791 Trans R.I.L.L.C. 15,408.37 OM&Screenings Removal&Digester Drying Bed Material Removal
117M Teslammim Drado 4M.00 ArMlysb.f BlosolMs
117M The Walking Mar,Inc. 2,125.111) P nfing and Distribution of Notifications of Various CodStrulion Projects
117N Thompson Industrial Supply,Inc. 2,15ILM Mechanical Paris&Supplies
11T95 T-Mobile 108.70 Wreleas Air T.
11796 Trimmed Incorporated 3AM.130 Fred Release-Administration Bmg.lflwomxa Area
11797 TriLounly Fins 753.17 Fire ExtrguisMrs
112110 Truck&Auto Supply,Inc. 2,020.51 A rtonrmtire Pare&Supplies
11799 Untied Parcel Senior 20.19 Parcel Swo s
11MD US Equipment Co.,Inc. 3XLV Meclumicel Pals&Supplies
11111111 Vapor,Inc 100]5 S08ware Maintenance&Support
11802 Verixon CalBoma 40.16 Telephone Services
11M3 Va..Rumbing 3.851 Senior C.ntrad-Tealing,Repair&Cad.Backnow Devices at PIS.1&2&Pump Ste.
11804 Vilage Nurseries MAS landeceping Supplies
1184)!1 MR Scientific Products MAO Lab Pads&Supplies
118W Waxy Earlier,Supply W.81 Janitorial Supplies
11807 MR Incorporated 6.485.9i Repair&Weetworm Sernces-Heat Exchangers
11808 WET MOD Membership-Water Environment Federation
11M West Lite Supply Company,Im. 8.M Electrical Parts&Supplies
11810 Westport Apparatus DM Breaker Supp. 1,19T.44 Electrical Paris&Supplies
11611 Id Confemnce(R) 172.03 Telephonm Conferenm Calls
11812 AsemalMallory Constudion Co..Inc. 1.56T.51) Construction Pt-108
11813 Pacific Mercantile Bend 82.50 Construction Pt-1 W.Retention
11814 Cathode M.Basis 17DDO Meetingamining Expense Reimbursement
11615 Lydia Eden 130.OD Meeting/Training Expense Reimbursement
11816 JaBrey T.Read 748.64 MeetirgRraining Expense Reimbursement
11817 Henry R.SalW o 405.W MeetingTraning Expense Reimbursement
11818 Y.J.Ste. MOD Meliing?reinirg Expense Reimbursement
11819 Rena We, 202.12 Maetie Meaning Expense Reimbursement
118W Anandm Storage Enterprises 809.54 Reran sla5on User Fee Refund Pmgmm
11821 Braley D.Star 615.36 Recondlatian User Fee Refund Program
11922 City 0 Hunfington Beach 12,536.20 Remnd hirti.n User Fee Refund Program
11M3 City of Huntinglm Beads 971.W Reconciliation User Fee Refund Program
11M City of Neweod Beach 2=1110 Reconciliation User Fee Refund Program
11825 County 0f OnsRle Auditor Controller 611100 Administration Fee-Adjustment to Property Tax B81
11M County of Orange Auditor Controller 691 Administration Fee-Adjustment W Property Tax Bin
11M7 County of Credits supplier Controller 435.M Adminbtratbn Fee-AEpdalnsnl a stopped,Tax B81
11028 DlaB Consultants.Inc. 780.33 Reconcilati0n User Fee Refund Pmgnsm
X:Wpsesa�EzcELauIIlaAPSwwEYIFina Pad ago-aApBCbinu P.export-gtlemmnyp ml5mxlu MIBITA
ault6lo Page 8.f 9 r5rW08
Claims Paid From 06101108 to O 15108
Warrard N. Vender Amount Description
11829 Merle Doumanl 1.615.98 User Fee Refuse Regarding Septic Tanks
118M HmaW Douglas Matlox Test 233.03 Recandlle0on User Fee Refund Program
1IMI P yarYl Hodson 2.621.29 Renomination Leer Fee Refund Program iegament,Temporary Stalling,Mat'I.&Supplies
11832 Ilutorage Yams Linda 794.95 ReopndDetion User Fee Refund Program
1103 KeaDa Prolessianal Bolding 789.53 Recmedlietbn Leer Fee Refund Program
11M Anthony H.Coarsemp 3,245.11 Remndliation User Fee Refund Program
11835 Rattles Grrcery,Co.0249 4,4W.51 Reconciliation Leer Fee Refund Program
11M Sursb Singh 4.508.93 Remndllatlon User Fee Refund Program
11837 SG&H Partners.LP 3,823.23 Remadiiagon User Fee Refund Program
118M KenrwU&Pam Treble 626.68 Reconelia0on User Fee Refund Prof.. rogen Peroxide&Ferrous Chloride
11839 Tustin Avenue krveslms,L.L.C. 1,182.41 Reconciliation Leer Fee Refund Program
11840 AON Risk Insurance Services West 1,141.00566 Excess Liability,Pollugun Liability,OCIP Pollution Liability Insurance
Tolel Accounts Payable-Warrants t ,a a2
Payroll Dts mpaVo nib
39488 - 39544 Employee Paychecks $ 112,987.58 BNreekly Payroll(00104N8)
39545 - 39548 Employee Paychecks 2,813.55 Interim Payroll(OINUM)8)
IN124 -156697 Direct Deposit Stetements 1,270,231.59 Blessedly Paying(06104N8)
Total Payroll Disbursements .OT2.T2
Wire Transfer Payments
CCSD Partial Taxes&Contributions S 828,268.00 Bbreekly Payroll(OWO4108)
De dacha Bank 161 Series 2006 Cedi0cetes of Participation June Interest Payment
Lloyds TSB Bank plc 15.894.04 Series=1 Certificates of Panicipmbns Standby Purdmee Agreement Commilment Fee 105101IW-0SReN81 Testing
Bank of Nan,York 102,220.00 Serbs INS Refunding Certificates of Participation(Jule)InbreN Payment
Total Wire Transfer Paymanls
Toted Claims Pals DBI01108-DWI WOB $ 15,185.91B.34
a
-of Ameriea)
i System I;
SI07I08
EXHIBITS
XWmfasnsECEL dIe1220uu`S4RMWms Pad RepanVC091CIame Pan,Rayn-Mad, nlA0a15ma16, EXHIBDA 1111=8
dnsiOnc Page 9 of 7y U
CMme Paid From 0&OIMS W 06115I08
WammtNo. Veneer Amount DoxripBon
11829 Mark Doumani 1,615.98 User Fee Refund Regarding Septic Tanks
11830 Haroul[)m,Iaa Me0ox Trost 233.03 RecmMlad.User Fee Refund Program
11831 PWamli Hashim 2,0119 Recond ation User Fee Refund Program
11832 Irrelora9e YOma Linda 796.95 Recorciliation User Fee Raked Program
11833 smalls ProfeselonN Building 769M Reconciliation User Fee Refund Program
118N Amllmy H.Ostarkamp 3245.11 Reconciliation User Fee Refund Program
11M Ralphs Grocery Co.0249 4,480.51 Reconkiation User Fee Refund Program
11M Sumte Singh 4MO.93 Reconalialion User Fee Reform Program
11837 SG 6 H Partners,LP 3.623.23 Recom liatioo User Fee Refund Program
11M Kenneth&Pam Tipton 626.68 Reconciliation User Fee Refund Program
1109 Tustin Avenue Investors,L.L.C. 1,182.41 Reconciliation User Fee RefmB Pmgmm
11840 AON Risk Insurance SaMces West 1.141,Oo5.88 Excess Liabllily,PollWion Lability.OCIP%lisaan Liability Insurance
Total Accounts Payade-Warrants 1 ,d .4
Pavmll Dls omen manta
39488 - 39W Employee Pay Jie ka $ 112,96].58 Soul Payroll(0 IMS)
39545 . 39548 Employee PaycMka 2,8n.55 Interim Payroll(rl&03108)
1M124 -156697 Died Deposit Statements 1,2]0231.59 Ineeskly Payroll(MUM)
Taal Payroll Disdomemend 1.3 .]
Wire Transfer Pavmenls
OCSD Payroll Taxes B Contribrfions $ 828,26A.Op Bhveekly Payroll(O IMS)
DsulsMe Bank 1M.000.16 Series 2006 Certificates of Participmon June lnmerst Payment
Lloyds TSB Bank plc 15,894.04 Series 20p1 Ceaficetes of Participations Standby Purchase Agreement Commitment Fee(OSI01I00-05129NB)
Bankof New York 102,220A0 Series 1993 Refumirg CeRifcoas of Participation(June)Interest Payment
Total Wlro Transfer Payments
Toml Claims Paid OBm11U8-0SHWD6 $ 15.185.918.34
HWaPnaa4 CELtllaV]MMMRMaims Pai4kggTSA` Cs,ms Palo Repo Aracxo LA Mlsoo,s, EXHIBIT
,.I., Page 9 of 9 nyppa
Claim Paw From 061111111e to 09neroe
Warrant No. Vender llmount Description
Accounts Payable-Warrant,
11841 Black&Veatch Co poralion $ 253,222.30 Professional Services J-79-1&P1-102
11842 Esi Tech,Inc. 310.563.TT Profassimal Services P1-100.1-24
11843 PMC;cf.Persons 1,148,875.00 6pineering Service-integrated Prograp-Project Management,Temporary Sb6mg,Mail.&Supplies
11W JCI Jones Chemicals.Inc. 140.941.81 Sodium Hypocblonle
11845 Kamlmn Companies Inc. 60,076.61 Fsmc Chloride
11846 Orange County Water District 804,629.16 Join GWRS Protect J-36
11847 Po nlyne,Inc. 3g896.11 Caloric Polymer MO 3.11.92
11848 Shomtel,Inc. 311.819.68 Installation of New Phone ayawn
11849 Southern Celiemle Edison 311,128.66 ShoroTel Telephones,activated,and System
11850 US Paroawe.LL C. 102.495.47 Officer&Corrosion Control Treatment for Col.Sys.;Hydrogen Peroxide&Ferrous Chloride
11851 Ken Thompson.Inc. 363,9/3.80 Construction P2-68
11862 A W Chesterton 3.983.14 Mechanical Paris&Supplies
11853 Scoe Specialty Gases,Inc. 96.20 Demurrage
11&54 Airlifts-West 10.54 DemunagNCylinder Rental
11855 MM Consulting Engineers 11.062.50 Professional Servicas-Part-Time Dig Alert Technician
11W Whembrs Foundry Co..Ltd. 495AS Manhole Frames&Covers
11W American Airlines 7.142.50 TWO Semce,
11658 Amencen Chemical Bociety 136.00 Membership
118% American Red C. 700.00 CPR Traireng&Miscellaneous Supplies
11OW AT&T 1.3Q.30 Telephone Service
11861 AT&T Cadifomiali 3.3&3.89 Telephone Service
11862 Awards&Trophies Company 53.19 Awams&Plaques
11863 AWSI 353.00 Department o Transportation Program Management&Testing
11864 Bar Tell Telecom.Incorporated 14,400.00 T,Iephona Service Maintenance and Supplies
11865 Bask Chemical Sobtioe,L.L.C. 10.007.75 Sodium 616ulfite&Sodium Hydroxide
11666 Barge's Governor Service 2.193.06 Mechanical Radio&Maintenance Samices-Govemor
11867 Cal Gloss,to . 1,309.81 lab Pans&Supplies
11868 California Barricade Rentals 1,3DO.00 Barricade Ramada
11869 Cal9omia Dept.of Chill Support 1.263.35 Wage Gamiahment
11870 California Rekcatlon Services,Inc. 157.50 Office Fibs MovingrRelocation Services
11871 Cotro.Inc. 106.57 Madlanical Paris&Supplies
11872 Cameron Comprossion Systems 7,367.39 Mechanical Parts&Supplies For LSVB Cooper Engines
Ilan Casual Goumwt 115.29 Meting Expenses
11874 City of Buwu Pent 8.800.00 Cooperalve Projects
11875 Clean Harbors Environmental Services 5.681 Hasamous Waste Management Services
Ilan CMAA 990.00 Trained Registration(Construction Management Assoc.o(Amenca)
Ilan CMAA 360.OD Membership
11878 Computer Protection Technology,Inc. 460.00 Quarterly Maintenance of Baneries,Rectifiers,and UPS System
11979 Consolidated Electrical Distributors,Inc. 570.60 Electrical Parts&Supplies
118M Consumers Pipe&Supply Co. 3,038.06 Plumbing Pads&Supplies
11861 Corporate Express 1,229.l l Gfica Suppries
11882 Counterpart Enterprises,Inc. 3,781.47 Mechanical Paris&Supplies
11883 County of orange Auditor Controller 1.267.28 Law Enforcement Services During Outlell Repalrs on USl07108
11884 County Wholesale Elections Co. 197.68 Electrical Paris&Supptlas
11885 CR&R.Inc. 1.601.40 Contelner Rentals&Waste Disposal Se ose
11885 CulligonofOrpnge County 52.85 Meted.Agreement-Can Gen Water Softener System
11887 Dapper Time Co. 929.62 Truck Tres
11888 David's Tree Service 4,700.00 Tree Meant.Service
HbeatwesEXCEL 41aVfpAP,HNtaKAeimr Psi,aeaom2adaRimrc Paid Fusion-Aaedemm aoaa ,xlxx EXHIBITS
ante. Page Page 1 of I111620011
Claims Pala From 08116/08 W OW30103
Warrant No. Vendor Amount Description
11M Dickson'.Inc. 901A8 Electncal Paris B Supplies
118M Or.Haney Goldstone MN Safety Glasses
11891 DSZQUP 4,80DA0 Professional Services-So&waraMardwere Upgrade-Exchange 2W7
11M Dutlek B Associates,Inc. 9,583.03 Professumat Services-Land Record Infomfation System Pilot Program
11M Employee Benefits Speclal'wis,Inc. 12,518A2 Reimbursed Prepaid Employee Medlral B D.Perdenl Care
11894 ENE Resources.Inc. 10.000.00 Professional Semcss-Legislative Adwcate
11895 Emmonmenlal&Occupational Risk Mgml. 2,000.00 Professional Senricas-Indoor Air Quality Investigation
118% Emimnmental Resource Associates 300.52 Lab Pens 8 Supplies
11097 Ewing irrigation Industrial 32.85 Landscape litigation Pants&Supplies
118M FED" 90.09 Freight Services
11899 Fast American Real Estate Solutions 1,8911.50 On-Line Orange County Property Information
11900 Flo Systems.Inc. U723 Pump Pans&Supplies
11901 Fortmk Analytical 36.00 Cuisde Laboratory Services
119D2 Fradomarl Tax Bead SU.00 Wage Garnishment
11903 Franklin Corey 25423 OBrca Supplies
11904 Frost Engineering Service Co. 1,18T.BT Electrical Parts&Supplies
11905 Fuller Tprk A¢essnnes 947.11 Truck Parts B Supplies
119p6 Deface Chemical,Inc. 3,090.43 Hydrochloric Acid
11907 Ganahl Lumbar Company 414.03 Lumber/Hadware
119N GDldi n east Corp. 2,418.011 Various Repair and/or Landsape Maintenance SenicauSlec,Vehicle Washing Se,at Plis.1&2
11909 Grainger,Inc. 15a.28 Mechanical Pans&Supplies
1191D Graybar Electric Company 37.DD Mechanical Pans If Supplies
11911 Guaredes Recoils Management 283A.5 Off-Site Rends tannage
11912 Harold Primrose Ica 100.00 Ice For Samples
11913 HUI Brothers 5,81729 Chemicals-Odor B Corrosion Conval-Newport Tr nklime
11914 Hope Depot 664.10 Misc.Repair&Maintenance Material
11915 Nub Auto Supply MA1 Vehicle Paris&Supplies
11916 City of Huntington Beach 104.34 Water Use
11917 Impulse Enterprise 519.01 Lab Parts&S.Ppres
11910 Indiana Cldld Support Bureau 290.0l, Wage Garnishment
11919 Inorganic Ventures,Inc. 310.19 Lab Pats&Supplies
119M Implant Sales,L.L.C. 323.25 Mechanical Parts&Supplies
1f921 Inlemal Radidue SerWce 125.00 "a Garnishment
11922 Imo.Union of Opt.Erg.AFL CIO Lola WI 4,656.66 Dues Deduction
11M Irvine Ranch Water District 5MG7 Water Use
11924 Jamison Engineering Contractors,Inc. 2.200.00 Repair if Maintenance Services-'S'Digester
11925 JDbsta,Irrc. 790.001 whose&Me
11928 Johnstone Supply 120.53 Electrical Parts&Supplies
11W Kelly Paper 73.09 Paper
11928 Kissel Emnronmental Lap 210.110 Ou ka,Laboratory Seniors
11M Court Order 15D.00 Wage Demianded
11930 Lerman Education Services 409.00 Training Registration
11931 Lucas Gourmet Foods.Inc. 22LM Meeting Efpeme
119V Mcluddn Red Man Corporation 110A0 Freight Charges
119M McMaster Carl Supply Co. 3,936M Mechanical&Lab Pans&Supplies
11934 Medlin Controls Co. 1,504.81 Instrument Pads&Supplies
1105 Megger 1,582.W SOBwap Maintenance&Support-Pulse Master/Macernot
119M Mitchell filament Co. 514.02 Instrument Paris&Supplies
119V Court Oder Z25.00 Wage Garnishment
NWepIb XCELUIaVaQrOPSXPA WL Pad RyMWPaC Pyd Re -MCN t 8_061f1NtlY EXHIBITB
mrzlac Pegs 2 of 9 antame
Claims Paid From 05116108 to 06130108
Warrant N. Vendor Amount Description
11938 National Scroll&Tmel 1.728.41 U.S.Savings Bonds Payroll Deductions
11939 Neal Supply Co. 5.355.43 Plumbing Supplies
11940 Neutron Products,Inc. 2.945.58 Anionic Polymer
11941 Newark Electronics 535.28 Electrical Pars,&Supplies
11942 Nickell Metal$play 1.004.25 Repair&Maintenance Service.-Shaft
11943 OCEA 57DSS Dues Deducgon
11944 ON.Depot 3.015.48 Off.Supplies
11945 Ogletree,Deakins,Nash,Smoak&Stewart,P.C. 3,000.00 On-Site Training-Preventiog Workplace Videnc,
11946 Ol Maly0ml 1,313.W Lab Paris&Supplies
11947 Onxource Distrily lore,Inc. 2,022.90 Electrical Pelts&Supplies
11NS Orange County Shorn 782.95 Wage Garnishment
11949 Orange County United Way 60.00 Employee ContrWtions
119W Change FIUW System Technologies.Inc. 478.82 Plumbing Pelts It Supplies
11951 Oxygen Sarum Company 1.057.93 Lob Paris&Supplies
119U Pacific Imrestmenl Management 10.966.77 Investment Management Service 0.es.95-97
1190 Pea.OMcare Council of CA 2.025.81 Does Deduction,Sumrvbore&Professionals
11964 Pep.Mine Univarelly 10.095.68 On-slle Training-Leadership Academy
11955 PIHRA 70.00 Training Registration
119M PL Hewn Company,Inc. 47613 EI9dd.l Pens&Supplies
11957 Pospeaeler 190.00 Post Offce Box Rental
119M Post Inc. 117.00 Lab Paris&Supplies
119W anmery Source Office Furnishings,Inc. 3.689.36 Office Fumilure&Mi..EOuipmant
119M Pomer-E,I.W. 1,800.W Training RegBtratan
11961 P..Walt Injury Center 587.50 Medical Screenings
11962 Pradentiel Overall Supply 4.763.40 Un11ems,&Related Mclas
11983 Quinn Power System Ass., 39.24 Mechanical Parts&Supplies
11964 Rainbow Disposal Co. 2,902.92 Them Removal
11955 Red Wing Shoes 324.W Safety Shoes
11986 RF MacDOnaW Co. 100.00 Repel,&Maintenance Services-Boiler Testing
11987 Risk and lesunnce Management Society.Inc. S65.W Membership
11908 Rojo Ranter NOCN11 1,50D.00 Plumbing Services
11969 RPM Electric Motors 3ANA7 Repair&Maintenance Services-PumplMowm
11970 Safetycere,Inc. 188A6 Safety DVDs
11971 Bann Engineering.Inc. 14,520.00 Repel,&Maintenance Services-Marinate Rehab.Program
11972 SARBS-CWEA W.W Training Registrellon
119M Samonus Mechebonicc Cow. 94.24 Lab Pert&Supplies
11974 Schmog Mideast 193.02 Meet enical&Electrical Paris If Supplies
11975 Stahel V.I.&Data,Inc. 032.50 Telephone System Maintenance
119M See Bird Electronics.Inc. 1,400.00 Lab Instruments Paris It Supplies
11971 Seaviwal CoesWfing,Inc. 7,3810.0p) Professional Services-Strategic Process Studies
11978 Secretary of State 20.00 Filing Fee-Statement of lnfohmalemOomastic Nonprofit Corporation
11979 Shur4uck SM.It Engineering 529.26 Mechanical Pads&Supplies
11980 Siemens Water Tarhnologles Corp. 1,295.94 Service Agreement-Of Water Systems at Plans,l&2
11981 Snap-On Tools,Inc. 610.33 T.Is
11982 Southern California Thane Service 1.096.90 Mechanical Pars,&Supplies
11983 Southern Counties Lubricants 1.516.74 OIVGroam
11984 Spehlelta 225.75 Dtlnking WatedCoder Rentals
11985 SPEX CampreP,Inc. 947.41 Lab Paris&Supplies
11988 Stone River Company 43.64 Framing Services
XWW%ME%CELCt.13aYAVSXAAMWma Pal4RpaM2.91 PMd Rarye-P Me t 80&"Wa EXHIBIT
m.2mnc Page 3 of 9 mumps
Clalma Paid From OBI18N6 to 06131=8
Wamnt No. Ven0or Amount Description
11987 Sunset Idusldel Pads 2,620.63 Mechanical Pan&Supplies
119M Systems Solution Company 13.369.28 Repairs&Maintenance Services-Access COn1idni Security System
11909 Testimonies Ontario 970.00 MDlyais of BiosolNe
119N Tire Orange County Register 1.673.20 Notices&Ads
11991 The Standard Insurance Company 2,695.29 Executive Disability Insuanc0
11992 Think S.M.,Inc.08A HDI 1.095.00 Membership
119M Thompson Internal Supply,Inc. 12.100.70 Mechanical Paris&Supplies
1199e Temeend Public ABaim 7.500.00 Legislative&Executive Advocate lm Grant Funding
1190 Tanscal 111.30 Repair&Calibrabon S.Mme-Digital Test Gauge
119% Trusts&Auto Supply,Inc. 117.51 Automotive Paris&Supplies
11997 ULide 325.78 Office Supplies
11990 Uniaource Corporation Purchasing,Inc. 10.261.14 Ofica Supplies
119% Urdtetl Pacific Sandiest,Inc. 17,067.51 Landscape Maintenance at Plante 1&2 and Pump Slabods
12000 United Fiscal Servica 250.57 Parcel Services
12001 Univeriy of Arvnna 10.000.011 Membership Agreement-Industry/lnMrsty Cpopama Rnwrtll Center for Wa Gasify
12002 US Cemposting Council 500.00 Membership
INXG USA Mobility Wireless.In.. U1.61 Wireless Services
120De Verizon UJorms 166.47 Telephone Services
120M VDnzon California I.M.01 Wimless Services
120M Vemas Plumbing 1,087.06 Service Contact-Testing.Repair&Can.Backilow Devkes.al Pita.1&2&Pump SM.
12007 MR Scientific Products 3,950.96 Lab Pans B Supplies
120D8 Wastewater Technology Trainers 1,005M Training Re0nduatien
12009 West Lite Supply Company,Inc. 539.96 Electrical Pans&Supplies
12010 Wastem Stoles Cer"Is 4.11 88 Electncal Pans&Supplies
12011 Wedded AppaaNS DBA Breaker Sup. 14,1410A9 Electrical Paris&SuRdies
12012 Yahoo,Inc. 1244.10 Notices&Ads
12013 Conn Order 912.50 Wage Garnishment
12014 Mail Adams 130.00 Meeting/Twining Expense Reimbursement
12015 William D.Cassidy 262M Meeting?ramin9 Expense Reimbursement
12016 Peter CheBs 127.00 Maetingrtalnim Expense Relmbursament
12017 Lary R.Crandall 287.25 Me tangRaining Expense Reimbursement
12018 James Ferryman 307.62 MaelingRrainirg Expense Reimbursement
12019 Jeanie M.Fields 2W.00 Meeting7Talning Expense Reimbursement
12020 Robed P.GOMM 6B6.72 Maeting?raining Expanse Reimbursement
1=1 Michael I.Gold 605.% MealmOrl-aining Expense Reimbursement
Mn Michael T.HayroM MOD Meeting7Tmimng Expense Reimbursement
120M Laurie J.Klinger 965.42 MeatingtTalning Expense Reimbursement
12024 Kiss K.Mormakin 125.00 Meetingl Trannng Expanse Reimbursement
12M James D.Niewmger 471.72 MeetingrOmining Expense Reimbursement
12026 Fernando Pammo 118.81) MaetingffWning Expense Reimbursement
12027 Geoge Riven 09020 Meeting/Training EXpenee Reimbursement
12020 Meek S.Roberts 117.00 Meetingl7alning Expense Reimbursement
12029 Christina M.Thomas 220.89 Meatingd-ralning Expense Reimbursement
12030 Bobby L.Unsell 103.00 MeedngRatning Expense Reimbursement
12031 Orange County Sandallon District 1,191 Patty Cash Reimb,
12032 Ashbrpok Corpoation 33,29328 Mechanical Pads&Supplies
12033 Black&Veatch CorpomWn 20ILM.00 Professional Services-DevelopmenVlmplementation of Electronic O&M Manual Project
120M Brown&Cantwell 25d,5W.% Professional Business P1-37&P2-90
120M Vdded Check - -
X WisemaTE%CEL EMr2AUP9URMWm Pelf Pepam'IW4rOxmr Pep Regvl-MCTnxnl B ea30,01 a e EXHIBIT B
snarwx Page 4 of 9 "1"..
Claim.Paid From OW16MO to 06130MO
Wartent W. Vendor Amount Ckauriotlon
12036 Cerolb En9lrleas 10,572.81 Professional Services P26I Structural Inlegdty of Conte Chan"at P-1,Headyrorks Two,Splutter Box
12037 CORRPRO Compened,Inc. 76,810.46 Prokasioral Services-Celhodic Protection P-2 High Pressure System 8 Temporary Employment Services
12DU Dudek B Associates.Inc. 33.473.67 Proksslonal Serviced Ml
12D39 Harrison Tedder Technical Servicas 73,150.00 Professional Services-Elackcel Acceptance Testing
12040 Hill Smithery; 39.888.75 Chemicals-Odor B Corrosion Coniral-Newport TnmNine
12041 J01 Jones Chemicals.Inc. 118.751.73 Sodium Hypochlodk
12042 luamiron Complied,Inc. 76,321.48 Ferric Chloride
12043 Lee 8 Ro,Inc. 44,707.75 Professional Services 5.49
12W MMLife Los Insurance Company 41,352.76 Group Life,Meneger A4d7.Life,Shan It Long-Term Disability B Optional Term Life Ins.
12045 Polydyce,Inc. 30.261.28 Cationic Polymer M03-11-92
12W Shona 1,Inc. 38,892.00 Sh..Care Enterprise Supped Agreement
12047 Tub RanWMepan Farms 247,420.78 Residuals Removal MO 229.95
1200 First Regional Bank of CA 44,237.45 Construction P2-91,Ridual
12049 J F Shea Construction,Inc. 2,440,749.98 Construction P2-66 51-108
12050 J R Fit...Construction 111.024.00 Construction P1-82
12051 Riawll Pi dGC Co. 4.008.375.00 ConsWction Pl-102
120U Mike Sol Construction Co.,Inc. 231.709.21 Construction I-24A
12053 Me=Electric Construction Cold. 202.095.00 Construction P1-97
12054 Shlmmick Construction Co.,Inc. 398,138.98 Construction P2.91
12055 Unkn Bank of Ame cs Escrow 69289.39 Construction P2.86,Retention
12056 First Regional Bank of CA 44,924.26 Construction P2.80,Retention
12057 Shimmick Consul Co.,Ix. 404,318.35 Construction P2.80
120M Wells Fargo Bank 445,375.OD Construction P1-102,paternal
12059 A Chesterton 13,146.04 Mechanical Parts B Supplied
12060 Agllent Technologies,Inc. 369.34 Lab Parts B Supplied
12061 Ago IntlusldesOBA So-Cal Sweeping 860.OD Street Sweeping Services
12062 Aldgae Safety,Inc. 4,435.07 Bill Supplies
120M All American Saver Tools 974.01 Tools-Manhole Cover Extractor
120U Need Packing a Rubber,Inc. 112.05 Mechanical Pedd 6 Supplies
12065 American Air Balance Co.,Inc. 4.950.00 Repair B Maimemance Services-Air Conditioning System
12066 American Fidelity Assurance Company 529.04 Employee Voluntary Cancer Insurance
12067 American Seals west 947.95 Mechanical Pads a Supplies
12068 Applied lnduslrl Techndoi a79.67 Mechanical Pads It Supplies
12069 Amend lndunimt 9a9.10 Instrument Repairs B Calibration Services
12070 AT 8 T MISS Telephony Service
12071 AT 8 T MaEility II,L.L.C. WAS Telephone Equipment It A nivanep
12072 Baker Tends 2.189.00 Tank R6dels
IM73 Bask Chemical Solutions.L.L.C. 5,460.00 Sodium Blsul6le 8 Sodium Hydroxide
IM74 Sa6ery Specialties 1,044.15 Bananas
IM75 Bennett Sowen Lighthouse 900.09 Instrument Pans 8 Supplies
IM76 BioMeneux Vitale,Inc. 611.57 Lab Pads 8 Supplies
IM77 Catilmna Relocatlen Services,Inc. 150.50 Omca Files Mnvingn elorabon Services
12078 CALPELRA 550.00 Treking Replaation
12079 Cameron Compression Systems 303.82 Mechanical Parts a Supplies For LSVB Cooper Engines
12080 Canner Sales 8 Distribution.L L C. 1,253.83 Electrical Parts&Supplies
12001 Casual Gourmet 188.02 Meeting Expenses
12082 City d Westminster 40.88 Water U.
12083 Clean Energy 11,440.00 Annual Operational and Maintenance Services for tiro Compressed Natural Gas Stations at Plant 1
12084 Compressor Component.of California 886.61 MaWnical Pare B Supplies
1:tlegweSE%CELMsQWuP.RARf1CIerm Pod RgwruNDOMNrrm Pod Rayn-FWNnanl B 06]e00.de, EXHIBITS
nnptas Page 5 of 9 ]Itu209d
Claims Paid From OW16MO to O IM0108
Warrant N. Vendor Amount Description
12085 Con-Way Wesnom Express 240.54 Freight Services
12086 Consumers Pipe&Supply Co. 1,564.44 Plumbing Paris&Supplies
12087 CwWIIW Motion Solutions 1,070.23 Mernanael Paris It Supplies
120M Corporate Business Interiors 2.649.57 Work Station Installation
1200 Corporate Image Maintenance,Inc. 780.0O Custodial Services Spec,No.9899.09
12M County Of Orange Auditor Controller 52.W Encroachment Permit 2-0
12091 County Of Orange Auditor CwWlnor 35.W Encroachment Permit 2-66
12092 CR&R,Inc. 315.W Container Rentals&Waste Disposal Service
12D93 CWEA Mambarstrry 220.00 Membership(Calif.Water Environment Assoc.)
12W Dayd's Tree Service 7.600.00 Too M.W.Service
120M Dawson Company 127.77 Mechanical Pails&Supplies
120% Dexurik Water Controls 4,501.80 Mechanical Paris&Supplies
12O97 DIRECTV 419.00 Equipment Rental.&Lease
12096 OLT&V Systems Engineering,Inc. MAT Professional Services-Annual Design Services
12099 Dunn EdwaMS Corporation 203.65 Paint Supplies
12100 Each Tech,inn 2,712J2 Professional Servicas Pl-106
12101 Enchanter,Inc. 3,550.00 Ocean Monitoring&Oudall Inspection&Maintenance
121W Environmental Resource Associates 107.88 Lab Paris&Supplies
12103 Ewing Irrigation Industrial 510.24 Landscape ligation Parts&Supplies
12104 Experune 1.905.00 Sobee,e Meintenence Agreement
12105 FEDEX Corporation 96.22 Freight Services
12106 First American Real Estate Sniutions 450.00 On{ind Orange County Property Information
12107 Fisher Sdenfific Company,L.L.C. 1,516.35 Lab Parts&Supplies
121DO Fresco Profiles 617.00 Human Resources Background Chacks
121N GanaB Callahan Company 10,370.20 Chemicals
12110 Golden Sun Marketing 5.091.19 Mechanical Parts&Supplles
12111 OOldemwesl Cory. 9,737.00 Verses Repab&Maintenance Project and Hardiumm lGroundskeeping Projects
12112 Grainger,Inc. 304.34 Mednwical Supplies,Battery.Paint end How Supplies
12113 Graybar Electric Company 153.34 Electrical Pars&Supplies
12114 Header Equipment Company 16,748.54 Misc.Vehicle,Parts,Repairs&Service
12115 Hach do Ponan Industries 719.82 Lab Pars&Supplies
12116 Haldeman.1.. 1,993.38 Miscellaneous Repair,Pars and Service for Vehicles
12117 Harrington Industrial Pladves,Inc. 1.514.53 Mechanical Parts&Supplies
12118 Hasler Inc. 94.43 Manor Rental Ch.,.&Misc.Supplies-ImalliWudt System Complete Mail System
12119 Hewlett Petard Company 9,050.76 Compulers H.matrelSOTvare-HP Server
121M Hoisting.,Service,Ix. 446.85 Mechanical Parts&Supplies
12121 Havre Depol 908.82 Misc.Repair&Maintenance Material
12122 Hope Hw1WIHAC 542.14 Publimckm-Wellness Newsledars
12123 Idexx Laboretodw Inc. 2,6T2.20 Lab Pecs&S.Wfies
12124 Industrial Distribution Group 1,188A3 Smell Tonle and Misc.Supplies
12125 Industrial Metal Supply 908.33 Meal
12126 IMetsate Batteries of Cal Coast 734.53 Batteries for Vehicles 6 Cads
121V Irrvensyn Systems,Inc. 618.87 Instrument Paris&Supplier
12126 JE Philips Company.Inc. 930.06 Replacement Fibeghns Propeller for 20'Dud Fan
12129 Jaya Catering 695.53 Meeting Expenses
121M Kiesd Environments Lab 50.00 Osmuda Laborelery Services
12131 LACADCorywallon 800.00 AuIdCAD Applicant Assessment
121M Label Master 49.24 Lab Parts&Supplies
121W Lorman Education Services 714.00 Training Registrebw
wWeI NEXCEL4tN SHARE1CWmr Pea Repro OMW,ma Padnepxt-AMMment_a_0a30Aa.tln EXHIBIT
eMi We Page 6 of 9 >,nrzwa
CMims PaM From 06116/08 to 06130/08
Warred N. Veetler Aspens Metal
12134 M.J.Schiff and Associates,Inc. 16,016.W Temporary Employment Servtces
12136 McGrew Hill,Inc. 140.15 Boobs&Publications
121N MCWerizon 1,525.86 Winless Telephone SeMeas
12137 McMesntr Can Supply Co. 2.014.40 Mechanical Parts&Supplies
12136 Medlin Controls Co. 811.05 Instrument Perot&Supplies
12138 Mike Pdich&Sons 11,70D.00 Repair&Maintenance Services-1T VaNe at Bider Point Pump Station
12140 Monica Sanchez&Seat Buy, 1.098.14 Employee Computer Loan Program
12141 MINH Americas,Inc. 19,521Ag Professional Services P2-74
121Q National Rant Services.Inc. 3.WLD0 Pumping Services
12143 Nautilus Ernlronmental,L.L.O. 225.00 Lab Pads&Supplies
IT" Nael Supply Co. 2.00.19 Plumbing Supplies
12145 Neutron Pmducts.Inc. 2.9501 Anionic Polymer
12146 Remit Communnabons 9e8.15 Ar Time
12147 Nlnyo&Moore Corponb Accounting 8,381.59 Professional Services-Solls,Concrete&Other Materah,Testing for Various Capilal Projects
12148 Norm Delivery Services 421.12 Mail Delivery S.M.
12149 Nodhaest Hydraulic Constantino,Inc. 391.60 Professonal Services-Perform Hydraulic Analyses of the Ocean Outrall System
12150 O C Tanner Recognition Company 1,950.91 Employee 5arvica Awards Program
12151 Omega industrial Supply.Inc. 3,312.56 Janes al Supplies
121U Cnespucce Distributors,Inc. 467.W aachcal Pam&Supplies
12163 Oracle Corporation 10.514.20 Software Update&Support-Oracle 8 Enterprise,Internet Developer Suite,&Transparent Gateway
121M Oracle USA,Inc. 19.455.22 Software Support for Enterprise One, Materials,Supplies and Equipment Services
1210 Oxygen Service Company 1,289.35 Rebuild Shop Gases&Lab Pads&Supplies
121M Pacific Craig EnNmnmenw Comarvamy 20.700.00 Professional Sermcee-Endocrine Disruptor Study
12157 Pacific Mechanical Supply 858.79 Plumbing Supplies
121W Parker Supply Company 2.170.W Mechanical Supplies
1210 Performance Pipeline Technologies 1,527.60 Sewadln,Video Inspections-Various
121SO PERMASEAI 620.64 lobe Oil
12161 Phanix Technologies.Inc. 36.63 Elochicel Parts&Supplies
121s2 Ponon Industries,Inc. 3,192.74 Instrument Parts&Supplies
1210 PPM 2M.Inc. 1.158.30 SoBware License Renewal-IXO-IRIMS
121s4 Pnuir,Inc. 223.04 Lab Pam&Supplies
1210 Pre-Paid Legal Senses,Inc. 1,139.00 Employee Voluntary Legal Service Insurance Premium
12166 Progressive Security Technologies.LL.C. 7,643.01 Sori Malntenexe Agreement-BMC Servce Desk Soppon Renewal
12167 Pmdpe Pmfessbnal Pipe Services 14.918.07 Sewedine Cleaning Is City of Tustin and Unincorporated County Prop"
12188 PulXmeisnr America,Inc. 6.921.35 at Fillers-Puhmaililer Pumps
121% Quest So6ware 2.645.00 Service Maintenance Agreement-Oracle Xperi
121M Ragan Communications,Inc. M5.00 Books&Publications
12171 RBF Consulfing 3.995.00 Surveying Sendces-Various Lomtiorre
12172 Restak Corp. 324.68 Lab Pans&Supplies
12173 RM Autsnetim c/o RM Controls 50.56 InHmrent Supplies
12174 Roadway Express 1,125.96 Freight Charges
12175 Rosemount Analytical Inc. 2240.50 Instrument Paris&Supplies
12176 Rosemount Analytical 573.W Instrument Supplies
121" RPM Electric Moors 104.79 Motor Pent&Supplies
12170 South Coast Environmental Co. 17.125.94 Ar Ouslity Montalto
12179 Scohel Voice&Data,Inc. 2.214M Telephone Spain Maintenance
12180 See Bile Electronics.Inc. 461.00 Lab Instrument Maintenencs&Calibration Services
12181 SGS Testcom,Inc. 6A7 Telephone Line-Dialed Vehicle SMOG Station
121W Shamrock Supply Co.,Inc. M.28 Miscellaneous Maintenance Supplies
.1 aYedEXCELcuQsXsPS1UnE W=P RganMO aG Ped Risen-RYe t Ba6]aOB.nv EXHIBRB
Pa Of 7 )IttROps
Claims Pam From OU16MS to 06130108
Vlemast PAR. Vendor Amount Description
12183 Sheshunoff 484.95 Publication
12184 Shureluck Sales B Engineering 7.85229 Mechanical Pars B Supplies
121% Siemens Water Technologies Com. 189.58 $mice Agreement-DI Water Syertems at Plans 1&2
12186 Sk,IIPath Seminars 199.00 Training Registrafion
12187 $d.,On Tools,Inc. 261.02 Tools
121W South Coast Air Country Management Dist. 141A1 Pentad Fees-Annual Emission.Operated&Marc.Fees
12189 Southern Califamia Edison 71.40 Power
1219D Trans Company 4,702.55 Mechanical Parts&Supplies
12191 Southern Counties Lubricants 1,119.41 OR
12192 Square D Company 9.725.50 El6mncal Parts&Supphim
121% Stone River Company 157.32 Framing Services
121N $Indus Envimnmeme,Inc. 7,900.1111, ProfessionalServices-Groundwater Monitoring
12195 Summit Steel 8. ill Metal
121% Sunset Ford 011.08 Vehicle Pane&Service
12197 Sunset Industrial Pens 436.75 MCMadcal Pans&Supplies
12198 Teco Factory 137.38 ~!,Expenses
12199 TCH Associates,Inc. 1.192.36 Lob Pans&Supplies
12200 TekSyerbms 5,778.00 Temporary Employment Services
1=1 Terminix International Past Control 1.174.00 Pest Control
12202 Think Services,Inc.USA HDI 4,885.00 Training Registration
12203 Thomas Bros Maps 9,923.78 GIS Database&TGUE Viewer Software Licanso(s)
12209 Thompson Industrial Supply.Inc. 7,238.97 Mechanical Parts&Surprise
12M Tony's Lock A safe$ervice&Sales 1250.% Locks&Keys
12206 Tortuga Paul Services 310.00 Weekly Cleaning of Atrium Pond
12207 Thrmm Incorporated &,500.0I Raoi Leak Repairs-Administration Bldg.
122% Truck&Anne Supply.Inc. 139.93 Autunothat Parts&Supplies
12209 Underground Service Alan of Be.Cdff 1,809.00 Underground Utility IdentifcafionlDig Alen Notification Service
12210 United Parcel Barrels 1.772.17 Parcel Semces
12211 US Equipment Co.,Inc. 355.28 Repair&Maintenance Services-Air Compressor
12212 US Peroxide,L.L.C. 23,257A0 Odor&Condition Control Treatment for Call.Sys.:Hydrogen Peroxide I Ferrous Chlonde
12213 Valin Corporation 368.49 Mechanical Pens&Supplies
12214 Vernon California 43.59 Telephone Santee
12215 Vamas Plumbing 2.660.00 Service Contrail Tes5ng,Ropelr&Cen.Batflow Devrcesat Plls.182&Pump Ss.
12216 Venex.Inc. 4,465.00 Saki Support-Payroll Tax
12217 Village Nunerias 219.78 Landscaping Supplies
12218 Vertex Industries.Inc. 1.066.00 Door Repaidupeplacemeas-Vanous Locations
12219 VWR Scientific Products 1.668.77 Let,Pans&Supplies
1222D When,Corporation 23.040.76 Lab Pans B Supplies
12221 Waude Sanitary Supply 1,03352 Jen6oial supplies
12222 WEF 38a.00 Membership-Water Environment Federation
12223 Wells Supply Co. 1.185.25 Merdaniel Parrs B Supplies
12224 West Coast Safety supply Co. 2,705.60 salty supplies
12225 West the Supply Company.Inc. 17.95 Electrical Pan&Supplies
12226 Wilson Supply,Inc. 15418 Plumt,ing Pans&Supplies
12227 Woodruff Spredlin&$mad 5.817.19 Legal Samncaa MO 7-26-95
12228 Xerox Corporation 20,625.52 Copier services-Equipment Leases.Managed Services.&Metered Copy Usage&Charges
12229 Jerry F.Evangelisls 1,140.73 Meeting/Training Expense Reimbursement
12230 Crude M.Forman 772.27 Meetingffraining Expense Reimbursement
12231 Dawn K.Myers 110.00 MeesgRrasing Expense Reimbursement
NNaMM,FXd0..dNANPe1MPflGYreMPywNOMpore Pm Nyon-Mpanea a a&'goa.eu EXHIBIT
finaloss Page 8 of m+rzme
Claims Pees From OWIM8 to 06130108
Wafrent No. Vendor Amount Description
122M Lucinda Ellen Rey 1,162.74 MaelingRmining Expense Reimbursement
12233 Semh Redinger 586.80 Meetargamining Expanse Reimbursement
122N Mellon Rocbe 130.00 MeeOrgrtrelning Expanse Reimbursement
122M Lawrence A.Wigington 130.00 MesBrlgrtmining Expense Reimbursement
122M Union Bank of Cellfomia 22A55.00 Construction Pl-97,Retention
12237 County of Orerpe Auditor Controller 2.415.OD Adminishation Fee-Adjustment to Property Tex Else
12238 Furling&Rigging Corp. 6e7.39 Port Supplies
12239 South Coast Alr Quality Management Dist. 143,81 Permit Fees-Laboratory Approval Program-Environmental Lab&Ocean Monitoring Division
12240 Liberty Mutual Insurance Company 753,n4.25 OCIP Insurance-Liability&Warfare'Comp-1 st Installation
Total Accounts Payable-Warrants TT3.77d.'�f.94-
Payroll Disbursements
39549 - 3962D Employee Paychecks 8 116.627.23 Biweekly Payroll(061181D11)
39621 - 39630 Employee Paytlre ks 9,203.64 Interest Payro0.Retirement,Termination(0611]NB-OW2(VDB)
39730 - 39730 Employee Paychecks 573.68 Inlenm Payro0.Termination(U6tt6N8)'
156698 -15]2]8 Direct Deposit Statements 1.297.108.38 &weaky Payroll(06g6m8)
Total Payroll Disbursements S 1.123.B1D91
'GxFr]aeJt.]atta wwe pIMM ar tl oNer for IM OrN3.9B pymll.
Wlro Transfer PBVnlanls
OCSO s Earn, roll Taxes&ConMbutians 8 831,61ll6 Series
PayrollWOO
A&BRefundin
US BarM 61,Sa1.9] Renee i000 A 8 B Refunding Ceril6wles of Partidpetions June 30,20081nlereatrPnrrcipal Payment
Total Wlra Transfer Payments F 913.15J.]J
Total Claims Paid O811 WOO-06/30108 8 1]811.0a8.a3
H Weplu nEMCEL dIeVaxxPSnxpMCleir5 Pea FeP OcxClnms Pee Racon.Alucmeni Bcs3o aix EXHIBITS
n.amnc Page 9 019 m VID]e
BOARD OF DIRECTORS mee"Date To8d.ofDir.
s/27/Da
AGENDA REPORT Item Numhe I[em Numhe
7h
Orange County Sanitation District
aBBBarch d
DBVBIBFment
FROM: James D. Ruth, General Manager
Originator: James D. Herberg, Director of Engineering
Project Manager: Christopher M. MacLeod
SUBJECT: FUEL CELL HYDROGEN GAS GENERATION, PROJECT NO. SP-134
GENERAL MANAGER'S RECOMMENDATION
Approve an agreement with Air Products and Chemicals Inc., for installation and pilot
testing for Fuel Cell Hydrogen Gas Generation, Project No. SP-134, at a cost not to exceed
$200,000, in a form approved by General Counsel.
SUMMARY
• Air Products and Chemicals Inc. (Air Products) has secured funding from the United
States Department of Energy(DOE) and the California Air Resources Board, (GARB),
that will allow them to manufacture, install, operate, and eventually remove a pilot sized
hydrogen fuel cell energy station that is powered by methane generated from Orange
County Sanitation District (OCSD) Plant No. 1 digester gas. The total estimated amount
of grant funding from DOE is at $8.000,000.
• OCSD's portion of the pilot testing project is to provide funding for site improvements to
allow for the installation of the fuel cell equipment. OCSD will reimburse Air Products
and Chemicals Inc., at a cost not to exceed $200,000. to design and construct
improvements needed at Reclamation Plant No. 1. This includes extending utilities and
the installing equipment pads needed for the Fuel Cell. Including the site improvements
in the agreement will allow the project to be completed within the timeframe of the
grants and funding applications.
• Per the funding agreement from GARB, a hydrogen gas fueling station will also be
installed at Plant No. 1. The hydrogen gas supply for this fueling station will be provided
by excess Hydrogen generated from the pilot project facility. OCSD staff and Air
Products have agreed to pursue the entitlements for the fueling station after all design
and construction details for the fuel cell energy station are finalized.
PRIOR COMMITTEE/BOARD ACTIONS
None
ADDITIONAL INFORMATION
Amid the increasing energy demand and cost, and growing public awareness for energy
conservation and pollution prevention, fuel cell power plants are rapidly becoming the
choice for on-site power generation.
Form No.ow-toad a..iaaoxnroi
Page 1
As such, OCSD is currently faced with possible air emissions restrictions that may
eventually lead to expensive plant retrofits for the Central and Co-generation power facilities
at the treatment plants. The fuel cell technology is a programming technology that
significantly reduces the targeted air pollutant emissions.
The fuel cell also has the potential to produce excess hydrogen that can be extracted and
used to fuel vehicles.
A fuel cell is an electrochemical cell that derives its energy from combustible substances,
such as digester gas, and creates water as a waste byproduct. The non-combustion,
electrochemical process occurring in a fuel cell is a direct form of'Yuel-to-energy
conversion" which is much more efficient than conventional heat engine approaches where
an engine burns fuel and uses the pressure created by the expansion of the gases to do
mechanical work. Since energy in a fuel cell is produced without the fuel being combusted,
sulfur oxides (SOx), and the greenhouse gas carbon dioxide (CO2) are significantly
reduced.
Wastewater treatment plants represent a unique opportunity for fuel cell power plants,
primarily due to their fuel flexibility and combined heat and power capabilities. The methane
produced from the anaerobic digester process can be used as the fuel to generate
electricity, while waste heat from the fuel cell can be used to heat the sludge to facilitate the
anaerobic digestion.
The specific fuel cell technology selected for use at OCSD has qualified for several
environmental certifications established by government agencies, such as the Leadership in
Energy and Environmental Design (LEED) program, and Renewable Energy Standards
(RES) as well as being designated as "Ultra-Clean", by the California Air Resources Board
(CARB), by exceeding all CARS emission standards.
Also, what makes this fuel cell installation subject to pilot testing is the attempt to extract
excess Hydrogen from the process. Since the digester gas is considered by the State of
California to be a renewable energy source this project has received significant financial
incentives that have been secured by Air Products from both the DOE and ARB. Air
Products and Fuel Cell Technologies will operate and maintain the system, with OCSD's
limited responsibility to the project installation of utilities and site preparation for the
equipment installation. The budget for OCSD's limited tasks was approved in the FY 2008-
09 Budget for Fuel Cell Hydrogen Gas Generation, Project No. SP-134.
This item complies with authority levels of the Sanitation District's Delegation of Authority.
This item has been budgeted. (Line item: Section 8, Page 72).
AN:sa
KMtglobaMgenda Dm8 Rep tstaoard of Dir orsW r Products Agreement SP-134 August 2008 aoam Agenda Ralroh_vOldw
Form No.o 102-2 as i.osntmr
Page 2
BOARD OF DIRECTORS Meeting Date To Bd.or Din
B/n10B
AGENDA REPORT Item Number Item Number
7(c)
Orange County Sanitation District
Salida Handling
Digestion
FROM: James D. Ruth, General Manager
Originator: James D. Herberg, Director of Engineering
SUBJECT: SOLIDS HANDLING AND BILLING FOR IRWD
GENERAL MANAGER'S RECOMMENDATION
Approve a Memorandum of Understanding Agreement with Irvine Ranch Water District to
obtain the services of an Engineering Consultant to update billing methodologies for an
amount not to exceed $100,000, in a form approved by General Counsel.
SUMMARY
• Currently, all sewerage sludges received by and generated at the Irvine Ranch Water
District(IRWD) IRWD's Michelson Water Reclamation Plant (MWRP) are discharged to
Orange County Sanitation District (OCSD)for treatment and management.
• IRWD pays OCSD for sludge treatment based on billing methodology that was originally
developed in 1986 by the engineering consultant James M. Montgomery. This study
was co-funded by the two agencies and filed with each agency's Board of Directors.
• This Memorandum of Understanding (MOU)Agreement will allow the two agencies to
update the billing methodology, and allow the two agencies to equally share the costs
for these consultant services.
• Changes to the billing methodology are anticipated to include staff and legal costs
associated with Biosolids Management, odor control costs associated with transmitting
sludge from MWRP to OCSD's Reclamation Plant No. 1, and adjustments to distinguish
solids and liquid capital costs attributable to IRWD.
• The timing of this effort coincides with IRWD's projects to reduce Flow and increase
solids discharged to OCSD. Thus, adjustments need to be made to the existing billing
methodology to ensure that IRWD pays its fair share for usage of OCSD existing and
planned facilities.
PRIOR COMMITTEE/BOARD ACTIONS
July 1986—Receive and File the Engineering Evaluation of the Proposed Disposal of Solids
Residuals from the IRWD by James M. Montgomery
Forth No.(w,02.3 n IWOVQIW
Page 1
ADDITIONAL INFORMATION
The resulting study from this MOU will be used to determine solids billing for Fiscal Year
2008-2009.
JB:sa
H)ntglobaRAgenda Draft RepodstBoard of Dire tomMRAD&osolids Study MOU Agreement August 2"Board Agenda
Report.dm
F..No ow 1.2 R--1 mN1A]
Page 2
BOARD OF DIRECTORS Meetlng Date To8d.of Dlr.
oR/n/os
AGENDA REPORT Item Number Item 7Number
Imd)
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Ed Torres, Director of Technical Services
SUBJECT: Resolution: No Drugs Down the Drain Week Proclamation
GENERAL MANAGER'S RECOMMENDATION
1) Adopt Resolution No. OCSD08-14, Proclaiming "No Drugs Down the Drain Week";
and,
2) Request member agencies to declare their support for said program by adopting a
"No Drugs Down the Drain Week" proclamation and utilizing the No Drugs Down the
Drain Week Press Kit.
SUMMARY
• This measure would proclaim the week of October 4 to October 11, 2008,
inclusive, as "No Drugs Down the Drain Week"throughout the State of California
to raise awareness among the public about environmental issues related to
flushing expired or unwanted drugs down the drain.
• The No Drugs Down the Drain Program was developed two and a half years ago
in a joint effort by OCSD, LACSD, and the City of Los Angeles. This year, the
U.S. Environmental Protection Agency, the California Association of Sanitation
Agencies, and State Water Resources Control Board have asked OCSD and
other agencies statewide to promote the proper disposal of unused/unwanted
pharmaceuticals by using OCSD's CASA Award Winning "No Drugs Down the
Drain" (NDDTD) Program and website (www.nodrugsdownthedrain.org) as the
host for the statewide event.
• Aside from OCSDs leadership in developing the statewide event, OCSD's local
promotion of the NDDTD program is achieved through partnership with local area
pharmacies and the California Pharmacists Association. Program materials are
made available to all pharmacies in OCSD's service area in order to educate the
public on the issue of proper disposal of unused or expired medications. By May
2008 all pharmacies in OCSD's service area received new program materials
and the program was discussed with a pharmacist at each pharmacy. The
NDDTD Program currently promotes disposal to either household hazardous
Poem No.M-102 Agenda ReWd-Board
ReWs 121MM
Page 1
waste facilities, or disposal to the trash. Detailed information regarding disposal
is available on the NDDTD website.
• With drug sales doubling in recent years and outpacing population growth,
pharmaceutical waste has emerged as a major issue for the environment. With
this increase, disposal practices of flushing medicine down the toilet or pouring
them in the drains may be a significant source of pharmaceuticals in the
environment. In fact, before data began to show the presence of pharmaceuticals
in our creeks, bays and oceans, it was commonplace for doctors, pharmacists,
and poison control centers to recommend that medication be disposed of down
the toilet.
• Now, amid scientific research showing that improperly disposal of medication is
having a negative impact on wildlife, water pollution prevention agencies are
seeking to educate and thereby persuade residents to properly dispose of
unwanted medication.
• The statewide No Drugs Down the Drain Campaign's goal is to build an
awareness among Californians about this important issue and to give them local
recommendations for proper disposal of unwanted medicine.
PRIOR COMMITTEE/BOARD ACTIONS
None
ADDITIONAL INFORMATION
As part of the statewide NDDTD week, a consulting firm has been hired to help promote
the event through large media outlets. In addition to this we would encourage member
cities to utilize the press kit that was developed by the public relations firm to help get
the word out through local media outlets. The press kit includes the following items:
• Public Service Announcement (PSA) Document
• Template proclamation/resolution
• Media Messages
• Press Release
• Images used in the program
• Postcards
• Flyers
% page advertisements
The press kit materials are located at www.ororkepr.com/NDDD/NDDD.html. For any
further information regarding the No Drugs Down the Drain Program contact Program
Manager Tom Gaworski at (714) 593-7422, or for any information about the Statewide
Event please contact either Tom Gaworski or Jim Colston (714) 593-7458.
Fomt No.W 102 Agen a Rq od—B W
f1lVISLH' 12/OBm6
Page 2
BOARD OF DIRECTORS Meeting Date I TOBd.of Dir.
oelrr/o8
AGENDA REPORT Item Number Item 7 Number
(e)
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: James D. Herberg, Director of Engineering
SUBJECT: Recruitment and Selection Policy as it applies to former
employee Jon Thomsic.
GENERAL MANAGER'S RECOMMENDATION
Approve waiver of OCSD Policies and Procedures Manual, Recruitment and Selection
Policy 1.4, Section 6.1.6, to allow former employee, Jon Thomsic, to work on CIP
projects while employed by Lee & Ro, Inc.
SUMMARY
• Jon Thomsic was employed by Orange County Sanitation District (Sanitation
District) for over ten years as an Instrumentation and Controls (I&C) Engineer before
his retirement on March 27, 2006.
• Lee & Ro, Inc. has retained Jon Thomsic on their I&C staff as a direct employee.
• Neither Jon, his spouse nor any member of his immediate family has any interest in
Lee & Ro, Inc.
• Jon has an in depth knowledge of the Sanitation District's I&C standards that will
assist Lee & Ro, Inc. in finishing their existing Sanitation District projects including
Job No. P1-100, Sludge Digester Rehabilitation at Plant No. 1. Jon would be
assigned to perform QA/QC for I&C design on Job No. P1-100. With the limited
Sanitation District staff available to review the plans and specifications for this
project, Jon's participation on the consultant design team is in the best interest of the
Sanitation District.
• The waiver of Section 6.1.6 is only for performing work on existing Sanitation District
CIP projects prior to one year after leaving the Sanitation District. Other provisions
in the Section shall be enforced, i.e, Jon shall not contact Sanitation District officers
and employees for the purpose of attempting to influence any Sanitation District
decision, including but not limited to, the award of contract, issuance of permits, or
compromise of administrative civil penalties, for a period of one year.
Page 1
PRIOR COMMITTEE/BOARD ACTIONS
None.
ADDITIONAL INFORMATION
None.
JH:MP:eh:tic
Page 2
' MINUTES OF STEERING COMMITTEE MEETING
Orange County Sanitation District
Wednesday, July 23, 2008, at 5:30 p.m.
A meeting of the Steering Committee of the Orange County Sanitation District was held on
Wednesday, July 23, 2008, at 5:30 p.m., in the District's Administrative Office.
(1) A quorum was declared present, as follows:
STEERING COMMITTEE MEMBERS:
DIRECTORS PRESENT: STAFF PRESENT:
Doug Davert, Board Chair
Larry Crandall, Board Vice Chair Jim Ruth, General Manager
Mark Waldman,Administration Committee Bob Ghirelli, Assistant General Manager
Chair Nick Arhontes, Director of Operations and
Ken Parker, Operations Committee Chair Maintenance
Jim Ferryman, Chair Ed Torres, Director of Technical Services
Don Bankhead Lorenzo Tyner, Director of Finance and
Phil Luebben Administrative Services
Michael Gold, Legislative Affairs Liaison
DIRECTORS ABSENT Penny Kyle, Clerk of the Board
Bill Dalton Bret Colson, PIO Manager
OTHERS PRESENT:
Bradley R. Hogin, General Counsel
Juanita Skillman
Heather Dion
Christopher Townsend
Kristine Thalman
(2) PUBLIC COMMENTS
There were no public comments.
(3) REPORT OF THE COMMITTEE CHAIR
Chair Davert briefly reported on a meeting with IRWD to discuss the state budget and possible
impacts on the districts. He also reported that Directors Norby and Ferryman would be
attending the conference for CASA that will be held August 21 —23, 2008.
Vice Chair Crandall reported on a plant tour he attended with Assemblyman Chuck DeVore.
Minutes of the Steering Committee
July 23, 2008
Page 2 t
(4) REPORT OF GENERAL MANAGER
Jim Ruth, General Manager, reported on the SARI Line; negotiation progress of operating
contracts with IRWD and SAWPA; internal employee informational meetings; and an EMT
Retreat focusing on the Strategic Plan. Director of Technical Services, Ed Torres, presented a
brief report on the SARI line reclamation study.
(5) REPORT OF GENERAL COUNSEL
There was no report.
(6) ACTION ITEMS
A. MOVED, SECONDED AND DULY CARRIED: Approve minutes of the June 25,
2008 Steering Committee meeting.
B. MOVED, SECONDED AND DULY CARRIED: Recommend to the Board of
Directors to adopt Resolution No. OCSD 08-12, authorizing a payment deferral
option of Capital Facility Capacity Charges(connection fees) through July 31,
2009, to builders of large housing development projects.
(7) INFORMATIONAL ITEMS
A. Legislative Affairs Report: Christopher Townsend and Heather Dion of
Townsend Public Affairs provided an update on the State Budget and other
legislative matters. Ms. Dion explained that the State budget stalemate
continued with no end in sight, mostly because both sides were so far apart. As
a result of the impasse, legislators continue to consider a property tax shift from
local government to fill the $17 billion deficit hole.
Mr. Townsend reported on the status of a possible water bond and opportunities
OCSD may utilize for future funding on key projects, including waste-to-energy.
TPA also discussed the upcoming tour of GWRS with representatives from Los
Angeles Department of Water and Power and Public Works.
Finally, Michael Gold reported that OCSD would be sending a letter in opposition to
HR 3121, a bill requiring flood insurance for all residents within a 500-year flood zone.
Minutes of the Steering Committee
July 23, 2008
Page 3
(8) CLOSED SESSION
The Steering Committee convened at 6:22 p.m. in Closed Session, pursuant to Government
Code Section 54957(b)(1)and Section 54956.9(b)to discuss two matters. 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 Clerk of the Board in the Official
Book of Confidential Minutes of Board and Committee Closed Meetings.
At 6:29 p.m., the Steering Committee reconvened in regular session.
(9) OTHER BUSINESS, COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS. IF ANY
There were none.
(10) ADJOURNMENT
The next Steering Committee meeting is scheduled for Wednesday, August 27, 2008. The Chair
declared the meeting adjourned at 6:30 p.m.
Submitted by:
Penny M Kyle
Clerk of the Board
GWR System Steering Committee
July 14, 2008
MINUTES
GROUNDWATER REPLENISHMENT SYSTEM STEERING COMMITTEE
STEERING COMMITTEE
(A Committee of Orange County Water District
and Orange County Sanitation District Directors)
OCWD Boardroom, 18700 Ward Street, Fountain Valley
Monday,July 14, 2008, 5:30 p.m.
Committee Members
Philip L. Anthony OCWD Director, Chairman .............Present
Jim Ferryman OCSD Director,Vice Chairman...... Present
Kathryn Bar OCWD Director ...............................Present
Larry Crandall OCSD Director ............................... Present
Roger Yoh OCWD Director............................... Present
Don Bankhead OCSD Director ................................ Present
Alternates
Jan Debay OCWD Director(No. 1)....................Present
Darryl Miller OCSD Director(No. 1)...............Not Present
Denis Bilodeau OCWD Director(No.2).................... Present
Mark Waldman OCSD Director(No.2) ..............Not Present
Steve Sheldon OCWD Director(No. 3)..............Not Present
Don Webb OCSD Director(No. 3) ....................Present
Other Directors Present
OCWD- Claudia Alvarez,Wes Bannister, and IN Pickier
Staff/Consultants Present
Michael R. Markus, OCWD
Bob Ghirelli, OCSD
Mike Wehner, OCWD
Shivaji Deshmukh, OCWD
Mehul Patel, OCWD
Tyson Neely, OCWD
Eleanor Tones, OCWD
Gina Depinto, OCWD
Lo Tan, OCWD
Wendy Sevenandt, OCSD
Ingrid Hellebrend, OCSD
Debra Bulls, DDB Engineering
CONSENT CALENDAR(ITEM NO.1) MOTIOWOTE Acnoa TAKEN
1. MINUTES OF PREVIOUS MEETING Ar ONY- AYE
RECOMMENDATION:Approve Minutes of the June 9,2008 FERRYMM-AYE APPROVED
Groundwater Replenishment System BARR- SECOND,AYE
Steering Committee Meeting as mailed BANKHEAD-AYE
YOH-AYE
CRMDALL- MOTION,AYE
_ 1 _
GWR System Steering Committee
July 14, 2008
END OF CONSENT
INFORMATIONAL ITEMS
2. SINGAPORE NEWATER VISITOR CENTER PRESENTATION INFORMATIONAL
3. GWR SYSTEM REGULATORY UPDATE INFORMATIONAL
4. GWR SYSTEM OPERATIONAL PROGRESS INFORMATIONAL
5. ADVANCED WATER PURIFICATION FACILITY COST INFORMATIONAL -
SAVING UPDATE
6. PROJECT SCHEDULE AND BUDGET UPDATE INFORMATIONAL
7. MONTHLY CHANGE ORDER UPDATE INFORMATIONAL
8. STATUS REPORT INFORMATIONAL
• Grants and Loans Update
• Public Information and Education Update
DIRECTORS'ANNOUNCEMENTSIREPORTS
GENERAL MANAGERS'REPORTS
ADJOURNMENT 6:15 PM
- 2 -
BOARD OF DIRECTORS MeeDDe Dare To act W Dir.
o8/271oa
AGENDA REPORT Item Numbe Ie Nub)mber
9(
Orange County Sanitation District
Water Management
Projects
FROM: James D. Ruth, General Manager
Originator: Jim Herberg, Director of Engineering
Project Manager: Wendy Sevenandt
SUBJECT: GROUNDWATER REPLENISHMENT SYSTEM, JOB NO. J-36
GENERAL MANAGER'S RECOMMENDATION
Ratify Change Order No. 138 to the Advanced Water Purification Facility contract of the
Groundwater Replenishment System, Job No. J-36, with J.F. Shea Construction Inc.,
authorizing an additional amount of$3,439,150, increasing the total contract amount to
$301,851,409, to be cost-shared equally with the Orange County Water District
($1,719,575).
SUMMARY
• The Advanced Water Purification Facility contract is complete and Change Order
No. 138 is the final change order to close out the contract. The final change order
exceeds the authority of the Groundwater Replenishment System (GWR) System
Steering Committee identified in the Joint Operating Agreement, and therefore
requires approval by both Agencies' of the Board of Directors.
• This change order was approved by the GWR System Steering Committee and the
Orange County Water District (Water District) Board on August 11 and August 17,
respectively.
• Contingencies were not set for these contracts in accordance with the Sanitation
District's Delegation of Authority Resolution because the contracts are administered
by the Water District.
PRIOR COMMITTEE/BOARD ACTIONS
Board —April 2004 —Award construction contract by the Water District to J. F. Shea
Construction, Inc., for an amount not to exceed $292,060,066
ADDITIONAL INFORMATION
The Groundwater Replenishment (GWR) System Advanced Water Purification Facility
(AWPF) has recently been completed. Acceptance of project completion was brought
to the GWR System Steering Committee and Water District Board of Directors in
Foem No.DW-102 AWm Report—Boom
Revioe0: 1V06N6
Page 1
August 2008 for approval. The final change order of$3,439,150 exceeds the authority
delegated in the Joint Operating Agreement and requires approval by the Sanitation
District Board.
The Contract was awarded to J.F. Shea Construction, Inc. for $292,060,066 in April of
2004. Because the contractor's bid was over the engineer's estimate, staff negotiated
cost saving measures that resulted in two initial change orders that reduced the contract
amount by$6,680,003 to $285,380,063. There was one bid item that would be the sole
responsibility of the Water District in the amount of$1,260,000. Water District staff
deducted this amount resulting in a revised contract amount for budget purposes of
$284,120,063.
Water District staff applied a 5% contingency to the revised budgetary contract amount
of$284,120,063 for a contingency budget of$14,206,003. During the course of
construction, 136 additional change orders were issued in the total amount of
$16,471,346. The Water District reported a 5.8% change order rate with the notice of
completion, which is based on the revised contract amount of$284,120,063 and the
136 change orders totaling $16,471,346.
The change order rate is 3.4%when all 138 change orders are included and compared
to the original contract amount of$292,060,066 before any deductions are taken.
In March 2006, the Final Design and Construction budget for cost shared items was
approved at$480,900,000. This budget remains unchanged when including
adjustments and reimbursements. The Sanitation District overall budget which includes
the cost share items and internal costs that are not cost shared also remains
unchanged.
This authorization complies with authority levels of the Sanitation District's Delegation of
Authority. This item has been budget. (Line item: Section 8, Page 98). Project
contingency funds will be used for this change order.
Award Date: April 2004 Contract Amount: $292,060,066 Contingency: NIA
JH:WS:tc
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Page 2
BOARD OF DIRECTORS Meeting Date To 6d.of Uir.
OB/2]/Od
AGENDA REPORT Fear,Nu be 10a Number
to
Orange County Sanitation District
YI Collections
Facilities
FROM: James D. Ruth, General Manager
Originator: Jim Herberg, Director of Engineering
Project Manager: Alberto Acevedo
SUBJECT: NEWPORT TRUNK SEWER AND FORCE MAINS, BITTER POINT
PUMP STATION TO COAST TRUNK SEWER, CONTRACT NO. 5-58
GENERAL MANAGER'S RECOMMENDATION
1. Approve Plans and Specifications for the Newport Trunk Sewer and Force Mains,
Bitter Point Pump Station to Coast Trunk Sewer, Contract 5-58, on file at the office
of the Clerk of the Board;
2. Approve Addenda No. 1, 2, 3, 4 and 5 to the plans and specifications;
3. Receive and file bid tabulation and recommendation;
4. Award a contract with Mladen Buntich Construction Co. for the construction of the
Newport Trunk Sewer and Force Mains, Bitter Point Pump Station to Coast Trunk
Sewer, Contract 5-58 for a total amount not to exceed $18,512,931; and
5. Approve a contingency of$925,647 (5%).
SUMMARY
• This project will provide a new point of connection from the proposed new Bitter
Point Pump Station to convey the wastewater from the cities of Newport Beach and
Costa Mesa into Plant No. 2. The existing system has experienced pipe failures and
presents significant operational risks for the Operations and Maintenance
Department. In addition the existing system is not suitable for the new operating
pressure from the proposed Bitter Point Pump Station.
• Black &Veatch Corporation completed the plans and specifications for
Contract No. 5-58 on January 2008. Nine sealed bids were received on July 29,
2008. After the evaluation of the bids by Orange County Sanitation District
(Sanitation District) Evaluation Team, all bids were determined to be "Responsible
and Responsive". Summary information on the bid opening for Contract No. 5-58 is
as follows:
Page 1
Project Budget $ 24,947,000
Construction Contract Budget $ 19,000,000
Engineer's Estimate $ 18,522,921
Lowest Responsive, Responsible Bid: $ 18,512,931
High Bid: $ 27,426,600
PRIOR COMMITTEE/BOARD ACTIONS
• July 2008 -Approval of Professional Consultant Services Agreement with Black &
Veatch Corporation for Construction Support Services for an amount not to exceed
$973,463.
• April 2007 -Approval of Amendment No. 1 to the Professional Design Services
Agreement with Black &Veatch Corporation for an additional amount of$120,082,
increasing the total PSA contract amount not to exceed $1,138,989.
• April 2007 -Authorize staff to commence negotiations with Black &Veatch
Corporation for support services during the construction, commissioning, and
closeout phases of Contract No. 5-58.
• December 2003 -Approval of Professional Design Services Agreement with Black &
Veatch Corporation for an amount not to exceed $1,018,907.
ADDITIONAL INFORMATION
The contractor selection was conducted in accordance with the Sanitation District's
adopted policies and procedures. The nine bids received were:
Bidder Amount of Bid
Mladen Buntich Construction Co. $18,512,931
Ken Thompson, Inc. $19,354.000
Mike Bubalo Construction Co., Inc. $19,519,000
ARB, Inc. $20,648,051
Steve Bubalo Construction Co. $20,651,000
Steve P. Rados, Inc. $21,002,500
Beador Construction Co. $21,839,800
W.A. Rasic Construction Co. $21,884,000
Colich & Sons, L.P. $27,426,600
This item has been budgeted (Section 8 — Page 23).
Award Date: 08/27/08 Contract Amount: $18,512,931 Contingency: $925,647 IS%)
JH:AA:tic:sa
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Page 2
BOARD OF DIRECTORS Meeting Date To ad.or Dlr.
O6/27/Od
AGENDA REPORT Ilan Number IOdn Number
u
Orange County Sanitation District
FROM: James D. Ruth, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: REFUNDING CERTIFICATES OF PARTICIPATION (COPS), SERIES 2008B
GENERAL MANAGER'S RECOMMENDATION
Adopt Resolution No. OCSD08-15, 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 Refunding Certificates of Participation, Series 2008B, Authorizing the Execution
and Delivery of such Certificates Evidencing Principal in an Aggregate Amount of Not to
Exceed $32,000,000, 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 Related Actions.
SUMMARY
As a result of the financial problems and the June 19, 2008, rating downgrade from Asa
to Aa3 (three notches) by Moody's Investors Service of the District's bond insurer on the
District's COP Series 1993 debt issue, the District's remarketing rates have tripled on
certain days from a low of 2.00% in June to a recent high of 6.00%. Starting on July 15,
2008, a number of unsuccessful remarketings have occurred which resulted in investors
tendering over$4.3 million of the COP Series 1993 to Societe Generale (Soc Gen), the
liquidity bank. The tender of bonds to the bank has triggered a clause in the associated
swap agreement which allows Soc Gen, as the swap counterparty, to reduce its floating
rate payment to the District. Depending on the index selected by the swap counterparty,
the reduced Floating rate payment would currently range from 3.39%to 4.39% and result
in an equivalent amount of additional interest cost to the District. As an example within
the current cost range, an additional 4.0% of net interest cost to the District will exceed
$1 million over the next year. It's critical that the District take action to remove itself from
these additional interest expenses.
The District's$46 million COP Refunding Synthetic Fixed Rate debt was issued in 1993
as daily variable rate debt and simultaneously converted by the District to fixed rate debt
through a swap agreement with Soc Gen. This agreement requires the District to pay
Soc Gen a 4.56 percent fixed rate on the outstanding debt while Soc Gen pays the going
variable rate(after the bank tender, Soc Gen pays a lower index-based rate). The
District's underlying insurer on this debt issue,Ambac Assurance Corporation (Ambac),
is currently experiencing financial problems due to difficulties stemming from the
subprime housing crisis causing investors to sell Ambac-backed bonds which has
resulted in the remarketing agent, UBS, to significantly increase rates on the COP Series
1993 over the past two months. In addition, UBS, an investment bank headquartered in
Switzerland, has exited the municipal origination business; therefore, UBS remarketing
support for the COP Series 1993 is expected to continue to be, at best, questionable.
Page 1
Options Available to the District
1. Do Nothing
The District has enjoyed present value savings of$6.8 million since 1993 as a result of
the decision to enter into the swap agreement compared to issuing plain fixed rate debt.
However, if the District was to take no action at this time, based on current market
conditions, the continuation of the reduced swap floating rate payable by the swap
counterparty,would result in a present value cost to the District to final maturity in
2016 of approximately$6.3 million which negates almost all the original realized
savings to date from the swap. In addition, the District will likely need to procure a new
remarketing agent for the COP Series 1993 in the near future when UBS completes its
transition out of the municipal bond underwriting business.
2. Refund COP Series 1993 as a New Refunding COP Synthetic Fixed Rate Debt Issue
In doing so, the District would be issuing this debt under the District's credit rating
without outside insurance as the District did with the COP Series 2006 Variable Rate
Debt issue, thereby eliminating investor concerns about Ambac. In the current market,
investors have no issues with purchasing the District's unenhanced (without bond
insurance)variable rate debt due to the District's high credit ratings(Aa3/AAA/AA)
backed by bank liquidity facilities.
This structure would also amend and transfer the Soc Gen swap agreement from the
COP Series 1993 to the new refunding issue without incurring any termination fees.
(Soc Gen would be entitled to a termination fee currently valued at$2.6 million if the
District were to terminate the swap. This structure was put into place back in 1993 to
offset some of the risk exposure to Soc Gen should interest rates become more
favorable to the District. In a declining interest rate environment, the Soc Gen swap
position increases in value; in a rising interest rate environment, the Soc Gen swap
position reduces in value. The termination fee structure is to ensure that Soc Gen is not
penalized due to the risk they have undertaken by the issuer refunding the debt in a low
interest rate environment.)
Total estimated cost that would be incurred under this alternative would be:
Cost of Issuance $ 330,000
Underwriter Costs 110,000
Additional interest expense
in the paying off of the 1993
debt issue for two months 175,000
Total Estimated Cost S 615.000
Page 2
Additional concerns with this option:
1. Until closing of the refunding, any further deterioration in the financial situation or
credit ratings of Ambac would likely increase costs to the District.
2. Negotiations could be involved and time consuming with Soc Gen and the
remarketing agent successor to UBS.
3. After the closing of the refunding, the District would continue to be exposed to
bank facility provider credit risk and swap risk based on unforeseeable future
market disruptions.
4. Cost of issuance cannot be funded from bond proceeds (must be funded from
District available reserves).
3. Refund COP Series 1993 as New Refunding COP Fixed Rate Debt
This structure mirrors the financing structure recently completed by the District
associated with the refunding of the COP Series 1992. Refunding the debt at a fixed
rate would require the termination of the Soc Gen swap agreement that has a current
market value of approximately $2.6 million that would be owed by the District.
However, since current fixed rate refunding borrowing costs are approximately 3.4
percent (versus approximately 4.89 percent under the existing structure), the present
value in interest rate savings over the remaining eight-year life will offset much of the
termination fee.
Total estimated cost that would be incurred under this alternative would be:
Cost of Issuance $ 255,000
Underwriter Costs 150,000
Estimated Swap termination
Fee 2,595,000
Present Value Debt
Service Savings (2,215,000)
Total Estimated Cost Qpo
Additional benefits from refunding with fixed rates:
1. The District can fund all costs with new bond issue(no out-of-pocket costs).
2. Fixed rate refunding will require less negotiations with third parties.
3. Obtaining ratings from bond rating agencies will be simpler and faster.
4. Once the debt is issued, there will be no further outside risks to the District.
Staff is recommending Option 3, the refunding of the COP Series 1993 Synthetic Fixed
Rate Debt issue as a standalone fixed rate debt issue that will preserve the majority of
the original expected swap savings, has less risk associated with it, and can be
completed sooner than Option 2.
This refinancing will be structured as new fixed rate Certificates of Participation that is to
be sold in a competitive sale. Staff and consultants will make a brief presentation and
provide an overview of the draft documents and the financing schedule at the Board
meeting.
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PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
The approximate$30 million that will be borrowed will be repaid with interest over the
next eight years. The total interest cost is expected to approximate 3.4% (or
approximately$6.7 million).
The Board of Directors and the Financing Corporation will each be required to adopt
separate Resolutions to complete this refinancing. Drafts of these two Resolutions are
attached for review. A Financing Corporation is required by the structure of the COPs
and was formed in April 2000, to satisfy this need. The Board of Directors of the
Corporation is the same as the Board of Directors of the District and the Corporation
meets after an adjournment of the OCSD Board.
The OCSD Resolution authorizes the execution and delivery of certain legal documents
and the execution and delivery of Refunding Certificates of Participation evidencing
principal in an aggregate amount of not to exceed $32,000,000 all as spelled out in the
title as follows:
"A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY
SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE
DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST
AGREEMENT, AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION
WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION
DISTRICT REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2008B,
AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH CERTIFICATES
EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED
$32,000,000,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 RELATED ACTIONS-'
The Resolution of the Corporation is somewhat shorter and simpler. It authorizes three
actions that are similarly enumerated in the title as follows:
"A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY
SANITATION DISTRICT FINANCING CORPORATION AUTHORIZING THE
EXECUTION AND DELIVERY BY THE CORPORATION OF AN INSTALLMENT
PURCHASE AGREEMENT AND A TRUST AGREEMENT IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT
REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2008B; AUTHORIZING
THE EXECUTION AND DELIVERY OF SUCH CERTIFICATES EVIDENCING
PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT-TO-EXCEED$32,000,000 AND;
AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND
CERTIFICATES AND RELATED ACTIONS."
Page 4
o Following is a chart listing the remaining steps to be completed for the issuance of the
COP Series 2008B debt issuance:
Board approval of legal and disclosure documents
August ➢ Publish Notice of Intention to Sell
Receive Ragngs from Bond Raring Agencies
D Competitive Pricing
September ➢ Closing
Redemphon Notice
ATTACHMENTS
1. District Resolution
2. Corporation Resolution
3. Draft Trust Agreement
4. Draft Installment Purchase Agreement
5. Draft Continuing Disclosure Agreement
6. Draft Preliminary Official Statement
7. Draft Official Notice Inviting Bids
8, Draft Notice of Intention to Sell
9. Draft Escrow Agreement
JDR:LT:MW
Page 5
a
RESOLUTION NO. OCSD 08-15
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE
COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION
AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE
AGREEMENT, A TRUST AGREEMENT, AN ESCROW AGREEMENT
AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION
WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY
SANITATION DISTRICT REFUNDING CERTIFICATES OF
PARTICIPATION, SERIES 2008B, AUTHORIZING THE EXECUTION
AND DELIVERY OF SUCH CERTIFICATES EVIDENCING PRINCIPAL
IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $32,000,000,
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 RELATED ACTIONS
WHEREAS, in order to refinance the acquisition, construction and installation of
certain improvements to the wastewater system (the 'Prior Project") of certain
predecessor county sanitation districts of the Orange County Sanitation District (the
"District'), to wit, County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11 (collectively, the
"Predecessor Districts"), the Predecessor Districts purchased the Prior Project by
agreeing to make installment payments (the 'Prior Installment Payments") pursuant to
the Amendatory Agreement for Acquisition and Construction, dated as of September 1,
1993, by and among the Predecessor Districts;
WHEREAS, in order to provide the funds necessary to refinance the Prior
Project, the Predecessor Districts caused the execution and delivery of the Refunding
Certificates of Participation, 1993 Series (the 'Prior Certificates"), evidencing direct,
undivided fractional interests in the Prior Installment Payments;
WHEREAS, the District desires to refinance all of the Prior Project by prepaying
all of the remaining principal components of the Prior Installment Payments, and the
interest components thereof to the date of prepayment, thereby causing all of the Prior
Certificates to be prepaid;
WHEREAS, in order to provide the funds necessary to prepay the Prior
Installment Payments to be so prepaid, the District and the Orange County Sanitation
District Financing Corporation (the "Corporation") desire that the Corporation purchase
the Prior Project from the District and the District sell the Prior Project to the
Corporation, and that the District then purchase the Prior Project from the Corporation
and the Corporation sell the Prior Project to the District, for the installment payments
(the 'Installment Payments") to be made by the District pursuant to an Installment
Purchase Agreement by and between the District and the Corporation (such Installment
Purchase Agreement, in the form presented to this meeting, with such changes,
insertions and omissions as are made pursuant to this Resolution, being referred to
herein as the "Installment Purchase Agreement');
80263"8.2
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WHEREAS, the Corporation intends to assign without recourse certain of its
rights under and pursuant to the Installment Purchase Agreement to U.S. Bank National
Association, as trustee (the "Trustee"), pursuant to a Trust Agreement by and among
the Trustee, the Corporation and the District (such Trust Agreement, in the form
presented to this meeting, with such changes, insertions and omissions as are made
pursuant to this Resolution, being referred to herein as the "Trust Agreement");
WHEREAS, in consideration of such assignment and the execution and delivery
of the Trust Agreement, the Trustee intends to execute and deliver the Orange County
Sanitation District Refunding Certificates of Participation, Series 2008B (the
"Certificates"), evidencing direct, undivided fractional interests in the Installment
Payments, and the interest thereon;
WHEREAS, the funds to pay the Prior Installment Payments to be prepaid, and
the Prior Certificates evidencing interests therein, will be applied to such purpose
pursuant to an Escrow Agreement by and between the District and U.S. Bank National
Association, as prior trustee and escrow agent (such Escrow Agreement, in the form
presented to this meeting, with such changes, insertions and omissions as are made
pursuant to this Resolution, being referred to herein as the "Escrow Agreement");
WHEREAS, the District desires to provide for the public sale of the Certificates;
WHEREAS, a form of the Notice of Intention to Sell to be published in connection
with the public offering and sale of the Certificates has been prepared (such Notice of
Intention to Sell, in the form presented to this meeting, with such changes, insertions
and omissions as are made pursuant to this Resolution, being referred to herein as the
"Notice of Intention to Sell");
WHEREAS, a form of the Official Notice Inviting Bids to be distributed in
connection with the public offering and sale of the Certificates has been prepared (such
Official Notice Inviting Bids, in the form presented to this meeting, with such changes,
insertions and omissions as are made pursuant to this Resolution, being referred to
herein as the "Notice Inviting Bids");
WHEREAS, a forth of the Preliminary Official Statement to be distributed in
connection with the public offering of the Certificates has been prepared (such
Preliminary Official Statement in the form presented to this meeting, with such changes,
insertions and omissions as are made pursuant to this Resolution, being referred to
herein as the "Preliminary Official Statement");
WHEREAS, Rule 15c2-12 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended ("Rule 15c2-12"),
requires that the underwriter thereof must have reasonably determined that the District
has undertaken in a written agreement or contract for the benefit of the holders of the
Certificates to provide disclosure of certain financial information and certain material
events on an ongoing basis;
WHEREAS, to cause such requirement to be satisfied, the District desires to
enter into a Continuing Disclosure Agreement with the Trustee (such Continuing
Disclosure Agreement in the form presented to this meeting, with such changes,
80263848.2 2
d
insertions and omissions as are made pursuant to this Resolution, being referred to
herein as the "Continuing Disclosure Agreement");
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Installment Purchase Agreement;
(b) the Trust Agreement;
(c) the Escrow Agreement;
(d) the Notice of Intention to Sell;
(e) the Notice Inviting Bids;
(f) the Preliminary Official Statement; and
(g) the Continuing Disclosure Agreement; and
WHEREAS, all acts, conditions and things required by the Constitution and laws
of the State of California to exist, to have happened and to have been performed
precedent to and in connection with the consummation of the financing authorized
hereby do exist, have happened and have been performed in regular and due time,
form and manner as required by law, and the District is now duly authorized and
empowered, pursuant to each and every requirement of law, to consummate such
financing for the purpose, in the manner and upon the terms herein provided;
NOW, THEREFORE, the Board of Directors of the District DOES HEREBY
RESOLVE, DETERMINE AND ORDER:
Section 1. All of the recitals herein contained are true and correct and the
Board of Directors of the District (the"Board") so finds.
Section 2. The Installment Purchase Agreement, in substantially the form
submitted to this meeting and made a part hereof as though set forth herein, be and the
same is hereby approved. The Chair of the Board, and such other member of the Board
as the Chair may designate, the General Manager of the District, the Director of Finance
and Administrative Services of the District, and such other officers of the District as the
Director of Finance and Administrative Services may designate (the "Authorized
Officers") are, and each of them is, hereby authorized and directed, for and in the name
of the District, to execute and deliver the Installment Purchase Agreement in the form
submitted to this meeting, with such changes, insertions and omissions as the
Authorized Officer executing the same may require or approve, such requirement or
approval to be conclusively evidenced by the execution of the Installment Purchase
Agreement by such Authorized Officer; provided, however, that such changes,
insertions and omissions shall not result in an aggregate principal amount of Installment
Payments in excess of $32,000,000, shall not result in a true interest cost for the
Installment Payments in excess of 4.25% and shall not result in a final Installment
Payment later than August 1, 2016.
80263948.2 3
m
Section 3. The Trust Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is
hereby approved. The Authorized Officers are, and each of them is, hereby authorized
and directed, for and in the name of the District, to execute and deliver the Trust
Agreement in the form presented to this meeting, with such changes, insertions and
omissions as the Authorized Officer executing the same may require or approve, such
requirement or approval to be conclusively evidenced by the execution of the Trust
Agreement by such Authorized Officer.
Section 4. The execution and delivery of Certificates evidencing principal in an
aggregate amount of not to exceed $32,000,000, payable in the years and in the
amounts, and evidencing principal of and interest on the Installment Payments as
specified in the Trust Agreement as finally executed, are hereby authorized and
approved.
Section 5. The prepayment of the remaining principal components of the Prior
Installment Payments, and the interest components thereof to the date of prepayment,
and the Prior Certificates evidencing interests therein, is hereby authorized and
approved. In connection with such prepayment, the Authorized Officers are authorized
and directed to terminate the Interest Rate Swap Agreement with Societe Generale,
New York Branch, relating to the Prior Certificates, and to apply a portion of the
proceeds of the Certificates to pay any settlement amount or termination payment
thereunder.
Section 6. The Escrow Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is
hereby approved. The Authorized Officers are, and each of them is, hereby authorized
and directed, for and in the name of the District, to execute and deliver the Escrow
Agreement in the form presented to this meeting, with such changes, insertions and
omissions as the Authorized Officer executing the same may require or approve, such
requirement or approval to be conclusively evidenced by the execution of the Escrow
Agreement by such Authorized Officer.
Section 7. The form of Notice of Intention to Sell, in substantially the form
submitted to this meeting and made a part hereof as though set forth in full herein, with
such changes, insertions and omissions therein as may be approved by an Authorized
Officer, is hereby approved, and the use of the Notice of Intention to Sell in connection
with the offering and sale of the Certificates is hereby approved. The Authorized
Officers are each hereby authorized and directed, for and in the name and on behalf of
the District, to cause the Notice of Intention to Sell to be published once in The Bond
Buyer(or in such other financial publication generally circulated throughout the State of
California or reasonably expected to be disseminated among prospective bidders for the
Certificates as an Authorized Officer shall approve as being in the best interests of the
District) at least five days prior to the date set for the opening of bids in the Notice
Inviting Bids, with such changes, insertions and omissions therein as an Authorized
Officer may require or approve, such requirement or approval to be conclusively
evidenced by such publishing of the Notice of Intention to Sell.
80263MB 2 4
s
Section 8. The Notice Inviting Bids, in substantially the form submitted to this
meeting and made a part hereof as though set forth herein, with such changes,
insertions and omissions therein as may be approved by an Authorized Officer, be and
the same is hereby approved, and the use of the Notice Inviting Bids in connection with
the offering and sale of the Certificates is hereby authorized and approved. The terms
and conditions of the offering and sale of the Certificates shall be as specified in the
Notice Inviting Bids. Bids for the purchase of the Certificates shall be received at the
time and place set forth in the Notice Inviting Bids. The Authorized Officers are each
hereby authorized and directed, for and in the name and on behalf of the District, to
accept the bid for the Certificates with the lowest true interest cost, or to reject all bids
therefor, in accordance with the terms of the Notice Inviting Bids.
Section 9. The Preliminary Official Statement, in substantially the form
presented to this meeting and made a part hereof as though set forth in full herein, with
such changes, insertions and omissions therein as may be approved by an Authorized
Officer, is hereby approved, and the use of the Preliminary Official Statement in
connection with the offering and sale of the Certificates is hereby authorized and
approved. The Authorized Officers are each hereby authorized to certify on behalf of the
District that the Preliminary Official Statement is deemed final as of its date, within the
meaning of Rule 15c2-12 (except for the omission of certain information permitted by
Rule 15c2-12 to be omitted). The Authorized Officers are each hereby authorized and
directed to furnish, or cause to be furnished, to prospective bidders for the Certificates a
reasonable number of copies of the Preliminary Official Statement.
Section 10. The preparation and delivery of a final Official Statement (the
"Official Statement"), and its use in connection with the offering and sale of the
Certificates, be and the same is hereby authorized and approved. The Official
Statement shall be in substantially the form of the Preliminary Official Statement, with
such changes, insertions and omissions as may be approved by an Authorized Officer,
such approval to be conclusively evidenced by the execution and delivery thereof. The
Authorized Officers are, and each of them is, hereby authorized and directed to execute
the final Official Statement and any amendment or supplement thereto, for and in the
name of the District.
Section 11. The Continuing Disclosure Agreement, in substantially the form
submitted to this meeting and made a part hereof as though set forth herein, be and the
same is hereby approved. The Authorized Officers are, and each of them is, hereby
authorized and directed, for and in the name of the District, to execute and deliver the
Continuing Disclosure Agreement in the form submitted to this meeting, with such
changes, insertions and omissions as the Authorized Officer executing the same may
require or approve, such requirement or approval to be conclusively evidenced by the
execution of the Continuing Disclosure Agreement by such Authorized Officer.
Section 12. The Authorized Officers are, and each of them hereby is,
authorized and directed to execute and deliver any and all documents and instruments
and to do and cause to be done any and all acts and things necessary or proper for
802636482 5
e
carrying out the execution and delivery of the Certificates and the transactions
contemplated by the notices, agreements and documents referenced in this Resolution.
Section 13. All actions heretofore taken by the officers and employees of the
District with respect to the execution, delivery and sale of the Certificates, or in
connection with or related to any of the agreements or documents referenced in this
Resolution, are hereby approved, confirmed and ratified.
Section 14. This Resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED at a regular meeting held on August 27, 2008.
Chair
ATTEST:
Clerk of the Board
APPROVED:
General Counsel, Orange County
Sanitation District
80263948 2 6
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STATE OF CALIFORNIA )
ss
COUNTY OF ORANGE )
I, Penny M. Kyle, Clerk of the Board of Directors of the Orange County Sanitation
District, do hereby certify that the foregoing Resolution No. OCSD 08- was passed
and adopted at a regular meeting of said Board on the 27" day of August 2008, by the
following vote, to wit:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official
seal of Orange County Sanitation District this 27" day of August 2008.
Clerk of the Board of Directors
Orange County Sanitation District
80263848.2
A
RESOLUTION NO. FC-07
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE
COUNTY SANITATION DISTRICT FINANCING CORPORATION
AUTHORIZING THE EXECUTION AND DELIVERY BY THE
CORPORATION OF AN INSTALLMENT PURCHASE AGREEMENT
AND A TRUST AGREEMENT IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION
DISTRICT REFUNDING CERTIFICATES OF PARTICIPATION, SERIES
2008B, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH
CERTIFICATES EVIDENCING PRINCIPAL IN AN AGGREGATE
AMOUNT OF NOT TO EXCEED $32,000,000 AND AUTHORIZING THE
EXECUTION OF NECESSARY DOCUMENTS AND RELATED
ACTIONS.
WHEREAS, in order to refinance the acquisition, construction and installation of
certain improvements to the wastewater system (the 'Prior Project') of certain
predecessor county sanitation districts of the Orange County Sanitation District (the
"District'), to wit, County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11 (collectively, the
'Predecessor Districts"), the Predecessor Districts purchased the Prior Project by
agreeing to make installment payments (the "Prior Installment Payments") pursuant to
the Amendatory Agreement for Acquisition and Construction, dated as of September 1,
1993, by and among the Predecessor Districts;
WHEREAS, in order to provide the funds necessary to refinance the Prior
Project, the Predecessor Districts caused the execution and delivery of the Refunding
Certificates of Participation, 1993 Series (the "Prior Certificates"), evidencing direct,
undivided fractional interests in the Prior Installment Payments;
WHEREAS, the District desires to refinance all of the Prior Project by prepaying
all of the remaining principal components of the Prior Installment Payments, and the
interest components thereof to the date of prepayment, thereby causing all of the Prior
Certificates to be prepaid;
WHEREAS, in order to provide the funds necessary to prepay the Prior
Installment Payments to be so prepaid, the District and the Orange County Sanitation
District Financing Corporation (the "Corporation") desire that the Corporation purchase
the Prior Project from the District and the District sell the Prior Project to the
Corporation, and that the District then purchase the Prior Project from the Corporation
and the Corporation sell the Prior Project to the District, for the installment payments
(the "Installment Payments") to be made by the District pursuant to an Installment
Purchase Agreement by and between the District and the Corporation (such Installment
Purchase Agreement, in the form presented to this meeting, with such changes,
insertions and omissions as are made pursuant to this Resolution, being referred to
herein as the "Installment Purchase Agreement');
80263852.2
WHEREAS, the Corporation intends to assign without recourse certain of its
rights under and pursuant to the Installment Purchase Agreement to U.S. Bank National
Association, as trustee (the 'Trustee"), pursuant to a Trust Agreement by and among
the Trustee, the Corporation and the District (such Trust Agreement, in the form
presented to this meeting, with such changes, insertions and omissions as are made
pursuant to this Resolution, being referred to herein as the "Trust Agreement");
WHEREAS, in consideration of such assignment and the execution and delivery
of the Trust Agreement, the Trustee intends to execute and deliver the Orange County
Sanitation District Refunding Certificates of Participation, Series 2008E (the
"Certificates"), evidencing direct, undivided fractional interests in the Installment
Payments, and the interest thereon;
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Installment Purchase Agreement; and
(b) the Trust Agreement; and
WHEREAS, all acts, conditions and things required by the Constitution and laws
of the State of California to exist, to have happened and to have been performed
precedent to and in connection with the consummation of the actions authorized hereby
do exist, have happened and have been performed in regular and due time, form and
manner as required by law, and the Corporation is now duly authorized and
empowered, pursuant to each and every requirement of law, to consummate such
actions for the purpose, in the manner and upon the terms herein provided;
NOW, THEREFORE, the Board of Directors of the Corporation DOES HEREBY
RESOLVE, DETERMINE AND ORDER:
Section 1. All of the recitals herein contained are true and correct and the
Board of Directors of the Corporation (the "Board") so finds.
Section 2. The Installment Purchase Agreement, in substantially the form
submitted to this meeting and made a part hereof as though set forth herein, be and the
same is hereby approved. The President of the Corporation, the Vice-President of the
Corporation, the Treasurer of the Corporation and the Secretary of the Corporation, and
such other officers of the Corporation as the President may designate (the "Authorized
Officers") are, and each of them is, hereby authorized and directed, for and in the name
of the Corporation, to execute and deliver the Installment Purchase Agreement in the
form submitted to this meeting, with such changes, insertions and omissions as the
Authorized Officer executing the same may require or approve, such requirement or
approval to be conclusively evidenced by the execution of the Installment Purchase
Agreement by such Authorized Officer; provided, however, that such changes,
insertions and omissions shall not result in an aggregate principal amount of Installment
Payments in excess of $32,000,000, shall not result in a true interest cost for the
Installment Payments in excess of 4.25% and shall not result in a final Installment
Payment later than August 1, 2016.
90263952.2 2
e
Section 3. The Trust Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is
hereby approved. The Authorized Officers are, and each of them is, hereby authorized
and directed, for and in the name of the Corporation, to execute and deliver the Trust
Agreement in the form presented to this meeting, with such changes, insertions and
omissions as the Authorized Officer executing the same may require or approve, such
requirement or approval to be conclusively evidenced by the execution of the Trust
Agreement by such Authorized Officer.
Section 4. The execution and delivery of Certificates evidencing principal in an
aggregate amount of not to exceed $32,000,000, payable in the years and in the
amounts, and evidencing direct, undivided fractional interests in the Installment
Payments, and the interest thereon, as specified in the Trust Agreement as finally
executed, are hereby authorized and approved.
Section 5. The officers and agents of the Corporation are, and each of them
hereby is, authorized and directed to execute and deliver any and all documents and
instruments and to do and cause to be done any and all acts and things necessary or
proper for carrying out the execution and delivery of the Certificates and the
transactions contemplated by the agreements or documents referenced in this
Resolution.
Section 6. All actions heretofore taken by the officers and agents of the
Corporation with respect to the execution, delivery and sale of the Certificates, or in
connection with or related to any of the agreements or documents referenced in this
Resolution, are hereby approved, confirmed and ratified.
Section 7. This Resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED at a meeting held on August 27, 2008.
President, Orange County Sanitation
District Financing Corporation
ATTEST:
Clerk of the Board
Orange County Sanitation
District Financing Corporation
APPROVED:
General Counsel, Orange County
Sanitation District Financing Corporation
80263852.2 3
0
STATE OF CALIFORNIA )
ss
COUNTY OF ORANGE )
I, Penny M. Kyle, Clerk of the Board of Directors of the Orange County Sanitation
District Financing Corporation, do hereby certify that the foregoing Resolution No. FC-
was passed and adopted at a regular meeting of said Board on the 27'" day of
August 2008, by the following vote, to wit:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official
seal of Orange County Sanitation District Financing Corporation this 27" day of August
2008.
Clerk of the Board of Directors
Orange County Sanitation District Financing
Corporation
802638522
s
Eulbdght& Jaworski L.L.E.—Drak—OW07M
TRUST AGREEMENT
by and among
U.S. BANK NATIONAL ASSOCIATION,
as Trustee,
ORANGE COUNTY SANITATION DISTRICT
FINANCING CORPORATION
and
ORANGE COUNTY SANITATION DISTRICT
Dated as of MaySeot� 1,2008
Relating to
$77-14 0 A00.01)0
Orange County Sanitation District
Refunding Certificates of Participation
Series 2008A@
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS;EQUAL SECURITY
Section1.01. Definitions........................................................................................................2
Section 1.02. Definitions in Installment Purchase Agreement..............................................9
Section1.03. Equal Security..................................................................................................9
ARTICLE II
TERMS AND CONDITIONS OF CERTIFICATES
Section 2.01. Preparation and Delivery of Certificates........................................................ 10
Section 2.02. Denomination, Medium and Dating of Certificates....................................... 10
Section 2.03. Payment Dates of Certificates;Interest Computation.................................... 10
Section2.04. Form of Certificates....................................................................................... I I
Section 2.05. Execution of Certificates and Replacement Certificates............................... 11
Section 2.06. Transfer and Payment of Certificates;Exchange of Certificates................... 11
Section 2.07. Certificate Registration Books....................................................................... 12
Section2.08. Temporary Certificates.................................................................................. 12
Section 2.09. Certificates Mutilated, Lost,Destroyed or Stolen......................................... 12
Section2.10. Book-Entry System........................................................................................ 13
ARTICLE III
PROCEEDS OF CERTIFICATES
Section 3.01. Delivery of Certificates.................................................................................. 15
Section 3.02. Deposit of Proceeds of Certificates................................................................ 15
Section 3.03. Costs of Issuance Fund.................................................................................. 15
ARTICLE IV
NO PREPAYMENT OF CERTIFICATES
Section4.01. Prepayment.................................................................................................... 16
ARTICLE V
ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS
Section5.01. Assignment and Pledge.................................................................................. 16
Section 5.02. Installment Payment Fund............................................................................. 16
Section5.03. Reserve Fund ................................................................................................. 17
Section5.04. Rebate Fund................................................................................................... 19
Section5.05. Investment of Moneys.................................................................................... 19
Section 5.06. Brokerage Confirmations...............................................................................20
ARTICLE VI
COVENANTS
Section 6.01. Compliance with Trust Agreement................................................................20
Section 6.02. Compliance with Installment Purchase Agreement.......................................20
Section6.03. Compliance with Master Agreement.............................................................20
WORM i
TABLE OF CONTENTS
(continued)
page
Section 6.04. Observance of Laws and Regulations............................................................20
Section6.05. Other Liens.....................................................................................................21
Section 6.06. Prosecution and Defense of Suits....................._...........................................21
Section 6.07. Accounting Records and Statements................_...........................................21
Section 6.08. Tax Covenants...............................................................................................21
Section 6.09, Continuing Disclosure...................................................................................25
Section6.10. Further Assurances..........................._................................_..........................25
ARTICLE VB
DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01. Action upon Event of Default............................................................_..........25
Section 7.02. Other Remedies of the Trustee......................................................................26
Section7.03. Non-Waiver....................................................................................................26
Section 7.04. Remedies Not Exclusive................................................................................26
Section 7.05. Application of Amounts After Default..........................................................26
Section 7.06. Trustee May Enforce Claims Without Possession of Certificates.................27
Section7.07. Limitation on Suits.........................................................................................27
Section 7.08. No Liability by the Corporation to the Owner...............................................28
Section 7.09. No Liability by the District to the Owners.....................................................28
Section 7.10. No Liability of the Trustee to the Owners.....................................................29
ARTICLE VIII
THE TRUSTEE
Section 8.01. Employment of the Trustee;Duties...............................................................28
Section 8.02. Removal and Resignation of the Trustee.......................................................29
Section 8.03. Compensation and Indemnification of the Trustee........................................30
Section 8.04. Protection of the Trustee................................................................................30
ARTICLE IX
AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT
Section 9.01. Amendment or Supplement................................................................_.........32
Section 9.02. Disqualified Certificates................................................................................33
Section 9.03. Endorsement or Replacement of Certificates After Amendment or
Supplement....................................................................................................33
Section9.04. Amendment by Mutual Consent....................................................................33
ARTICLE X
DEFEASANCE
Section 10.01. Discharge of Certificates and Trust Agreement.............................................33
Section10.02. Unclaimed Moneys........................................................................................34
ARTICLE XI
MISCELLANEOUS
Section11.01. Benefits of Trost Agreement..........................................................................35
8muaew.a09l6.ts43 2 ii
TABLE OF CONTENTS
(continued)
Page
Section 11.02. Successor Deemed Included in all References to Predecessor......................35
Section 11.03. Execution of Documents by Owners.............................................................35
Section 11.04. Waiver of Personal Liability..........................................................................36
Section 11.05. Acquisition of Certificates by District...........................................................36
Section 11.06. Content of Certificates...................................................................................36
Section11.07. Funds and Accounts.......................................................................................36
Section 11.08. Article and Section Headings,Gender and References.................................37
Section 11.09. Partial Invalidity.............................................................................................37
Section11.10. California Law...............................................................................................37
Section11.11. Notices...........................................................................................................37
Section 11.12. Effective Date................................................................................................38
Section 11.13. Execution in Counterparts..............................................................................38
EXHIBIT A-FORM OF CERTIFICATE
90199( sQ7,¢lwl iii
TRUST AGREEMENT
THIS TRUST AGREEMENT(this "Trust Agreement"), dated as of MWAVlembff 1,
2008, by and among U.S. BANK NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, as Trustee (the
"Trustee"), the ORANGE COUNTY SANITATION DISTRICT FINANCING
CORPORATION, a nonprofit public benefit corporation organized and existing under the laws
of the State of California (the "Corporation'), and the ORANGE COUNTY SANITATION
DISTRICT, a county sanitation district organized and existing under the laws of the State of
California(the"District).
WITNESSETH:
WHEREAS, to refinance the acquisition, construction and installation of certain
improvements to the wastewater system (the "Prior Project") of certain predecessor county
sanitation districts of the District, to wit, County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11
(collectively, the "Predecessor Districts"), the Predecessor Districts purchased the Prior Project
by agreeing to make installment payments (the "Prior Installment Payments") pursuant to the
Amendatory Agreement for Acquisition and Construction, dated as of 0e1ebeF§S2tqHbg1 1,
444212a by and among the Predecessor Districts;
WHEREAS, to provide the funds necessary to refinance the Prior Project, the
Predecessor Districts caused the execution and delivery of the Refunding Certificates of
Participation, 122 Series4993(the"Prior Certificates'), evidencing direct, undivided fractional
interests in the Prior Installment Payments;
WHEREAS, the District desires to refinance all of the Prior Project by prepaying all of
the remaining principal components of the Prior Installment Payments, and the interest
components thereof to the date of prepayment, thereby causing all of the Prior Certificates to be
prepaid;
WHEREAS, to provide the funds necessary to prepay the Prior Installment Payments to
be so prepaid, the District and the Corporation desire that the Corporation purchase the Prior
Project from the District and the District sell the Prior Project to the Corporation, and that the
District then purchase the Prior Project from the Corporation and the Corporation sell the Prior
Project to the District, for the installment payments (the`Installment Payments")to be made by
the District pursuant to this Installment Purchase Agreement the Corporation and the District
have agreed to finance such prepayment by executing and delivering S7;465000 QQQ 0Q0
Orange County Sanitation District Refunding Certificates of Participation, Series 2008A@ (the
"Certificates');
WHEREAS, the District desires to terminate interest rate swap with AIG FinaneieF
IlFeduets Societe Generale New York Branch relating to the Prior Certificates and apply a
portion of the proceeds of the Certificates to pay a settlement amount in connection with such
termination;
9ar9299"Auis
WHEREAS, pursuant to the Master Agreement for District Obligations, dated as of
August 1,2000, by and between the District and the Corporation,the District has established and
declared the conditions and terms upon which obligations such as this Installment Purchase
Agreement, and the Installment Payments, and the interest thereon, are to be incurred and
secured;
WHEREAS, the Corporation proposes to assign without recourse certain of its rights
under and pursuant to this Installment Purchase Agreement to the Trustee; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened
and to have been performed precedent to and in connection with the execution and delivery of
this Trust Agreement do exist,have happened and have been performed in regular and due time,
form and manner as required by law, and the parties hereto are now duly authorized to execute
and deliver this Trust Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
and covenants contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged,the parties hereto do hereby agree as follows:
ARTICLE
DEFINITIONS; EQUAL SECURITY
Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the
context otherwise requires, the terms defined in this Section shall for all purposes hereof and of
any amendment hereof or supplement hereto and of the Certificates and of any certificate,
opinion, request or other document mentioned herein or therein have the meanings defined
herein, the following definitions to be equally applicable to both the singular and plural forms of
any of the terms defined herein:
"Authorized Corporation Representative" means the President,the Vice President, the
Treasurer and the Secretary of the Corporation, and any other Person authorized by the President
of the Corporation to act on behalf of the Corporation under or with respect to this Trust
Agreement.
"Authorized Denominations"means $5,000 and integral multiples thereof.
"Authorized District Representative" means the General Manager of the District, the
Director of Finance and Administrative Services of the District,the Controller of the District and
any other Person authorized by the Director of Finance and Administrative Services of the
District to act on behalf of the District under or with respect to this Trust Agreement.
"Beneficial Owners" means those individuals, partnerships, corporations or other
entities for which the Participants have caused the Depository to hold Book-Entry Certificates.
"Book-Entry Certificates"means the Certificates registered in the name of the nominee
of DTC,or any successor securities depository for the Certificates, as the Owner thereof pursuant
to the terms and provisions of Section 2.10 hereof.
9919904.J60263843 2 2
"Business Day" means a day other than (a) Saturday or Sunday, (b) a day on which
banking institutions in the city in which the Principal Office is located are authorized or required
by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or
obligated by law or executive order to be closed.
"Cede & Co." means Cede & Co., the nominee of OTC, and any successor nominee of
DTC with respect to the Certificates.
"Certificate Year"means each twelve-month period beginning on August 2 in each year
and extending to the next succeeding August I, both dates inclusive, except that the first
Certificate Year shall begin on the Closing Date and end on August 1,2009.
"Certificates" means the Orange County Sanitation District Refunding Certificates of
Participation, Series 2008AB,executed and delivered by the Trustee pursuant hereto.
"Closing Date"means May-'-19-.Seotember .2008.
"Code" means the Internal Revenue Code of 1986.
"Continuing Disclosure Agreement" means the Continuing Disclosure Agreement,
dated as of the date hereof, by and between the District and Digital Assurance Certification LLC,
as originally executed and as it may from time to time be amended in accordance with the terms
thereof.
"Corporation" means the Orange County Sanitation District Financing Corporation, a
nonprofit public benefit corporation organized and existing under the laws of the State.
"Costs of Issuance" means all the costs of executing and delivering the Certificates,
including, but not limited to, all printing and document preparation expenses in connection with
this Trust Agreement, the Installment Purchase Agreement, the Certificates and any preliminary
official statement and final official statement pertaining to the Certificates, rating agency fees,
market study fees, legal fees and expenses of counsel with respect to the execution and delivery
of the Certificates, the initial fees and expenses of the Trustee and its counsel and other fees and
expenses incurred in connection with the execution and delivery of the Certificates,to the extent
such fees and expenses are approved by the District.
"Costs of Issuance Fund" means the fund by that name established in accordance with
Section 3.03 hereof.
"Depository" means the securities depository acting as Depository pursuant to Section
2.10 hereof.
"District" means the Orange County Sanitation District, a county sanitation district
organized and existing under the laws of the State, and any successor thereto.
"DTC"means The Depository Trust Company,New York,New York and its successors.
ssaaswe:atazststs.t_ 3
"Escrow Agent" means U.S. Bank National Association,a national banking association,
duly organized and existing under and by virtue of the laws of the United States of America, its
successors and assigns,as escrow agent under the Escrow Agreement.
"Escrow, Agreement" means the Escrow Agreement, dated as of May5=epteMjjr 1,
2008, by and between the District and the Escrow Agent, providing for the defeasance and
refunding of the Refunded Certificates.
"Escrow Fund" means the Escrow Fund established and held by the Escrow Agent
pursuant to the Escrow Agreement.
"Event of Default" shall have the meaning set forth in Section 6.01 of the Installment
Purchase Agreement.
"Government Obligations" means any of the following which are noncallable by the
issuer thereof except to the extent not permitted by the laws of the State as an investment for the
moneys to be invested therein at the time of investment:
(i) (a) direct general obligations of the United States of America, (b)
obligations the payment of the principal of and interest on which are unconditionally
guaranteed as to the full and timely payment by the United States of America, or(c) any
fund or other pooling arrangement whose assets consist exclusively of the obligations
listed in clause (a) or (b) of this clause (i) and which is rated at least "P-l" by Moody's;
provided that, such obligations shall not include unit investment trusts or mutual fund
obligations;
(ii) advance refunded tax-exempt obligations secured by the obligations
specified in clause (i) which tax-exempt obligations are rated "Aaa" by Moody's and
"AAA"by S&P as a result of such obligations being secured by said obligations;
(iii) bonds, debentures or notes issued by any of the following federal
agencies: Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation or
Federal National Mortgage Association; provided that such bonds, debentures or notes
shall be the senior obligations of such agencies (including participation certificates) and
rated "Aaa"by Moody's and"AAA"by S&P; and
(iv) bonds, debentures or notes issued by any Federal agency hereafter created
by an act of Congress, the payment of the principal of and interest on which are
unconditionally guaranteed by the United States of America as to the full and timely
payment; provided, that, such obligations shall not include unit investment trusts or
mutual fund obligations.
"Installment Payment Food" means the fund by that name established in accordance
with Section 5.02 hereof.
"Installment Payments" means the Installment Payments required to be made by the
District pursuant to Section 3.02 of the Installment Purchase Agreement.
8e19erro4 48n26M43.2_ 4
"Installment Purchase Agreement" means the Installment Purchase Agreement, dated
as of the date hereof,by and between the District and the Corporation,as originally executed and
as it may from time to time be amended in accordance with the provisions thereof
"Interest Account" means the account by that name within the Installment Payment
Fund established in accordance with Section 5.02 hereof.
"Interest Payment Date" means February I and August 1 of each year, commencing
AugtrtFebrps. 1,2008-209
"Letter of Representations"means the letter of the District delivered to and accepted by
the Depository on or prior to the delivery of the Certificates as Book-Entry Certificates setting
forth the basis on which the Depository serves as depository for such Book-Entry Certificates, as
originally executed or as it maybe supplemented or revised or replaced by a letter to a substitute
Depository.
"Master Agreement" means the Master Agreement for District Obligations, dated as of
August 1, 2000, by and between the District and the Corporation, as originally executed and as it
may from time to time be amended or supplemented in accordance with the terms thereof
"Moody's" means Moody's Investors Service, a corporation organized and existing
under the laws of the State of Delaware, its successors and assigns, except that if such
corporation shall no longer perform the function of a securities rating agency for any reason, the
term "Moody's" shall be deemed to refer to any other nationally recognized securities rating
agency selected by the District.
"Nominee" means the nominee of the Depository, which may be the Depository, as
determined from time to time pursuant to Section 2.11 hereof.
"Opinion of Counsel" means a written opinion of Fulbright & Jaworski L.L.P. or any
other counsel of recognized national standing in the field of law relating to municipal bonds,
appointed and paid by the District.
"Outstanding,"when used as of any particular time with reference to Certificates, means
(subject to the provisions of Section 9.02 hereof) all Certificates except (a) Certificates
previously canceled by the Trustee or delivered to the Trustee for cancellation, (b) Certificates
paid or deemed to have been paid within the meaning of Section 10.01 hereof, and (c)
Certificates in lieu of or in substitution for which other Certificates shall have been executed and
delivered by the Trustee pursuant to Section 2.09 hereof.
"Owner" means any Person who shall be the registered owner of any Outstanding
Certificate as indicated in the registration books of the Trustee required to be maintained
pursuant to Section 2.07 hereof
"Participants" means those broker-dealers, banks and other financial institutions from
time to time for which the Depository holds Book-Entry Certificates as securities depository.
4aw8e0 1.4833843 1 5
"Participating Underwriter" has the meaning ascribed thereto in the Continuing
Disclosure Agreement.
"Permitted Investments" means any of the following, except to the extent not permitted
by the laws of the State as an investment for the moneys to be invested therein at the time of
investment:
(1) Government Obligations;
(2) Bonds, debentures, notes, participation certificates or other evidences of
indebtedness issued, or the principal of and interest on which are unconditionally
guaranteed, by the Federal Intermediate Credit Bank, the Federal Home Loan Bank
System, the Government National Mortgage Association or any other agency or
instrumentality of or corporation wholly owned by the United States of America when
such obligations are backed by the full faith and credit of the United States for the full
and timely payment of principal and interest;
(3) Obligations of any state of the United States or any political subdivision
thereof, which at the time of investment are rated "Aa3" or higher by Moody's and
"AA-'or higher by S&P;or which are rated by Moody's"VMIGI" or better and by S&P
"A-W' or better with respect to commercial paper, or "VMIGI" and "SP-I",
respectively, with respect to municipal notes;
(4) Bank time deposits evidenced by certificates of deposit, deposit accounts,
and bankers' acceptances, issued by any bank, trust company or national banking
association insured by the Federal Deposit Insurance Corporation(including the Trustee);
provided that (a) such bank, trust company or national banking association be rated
"Aa3" or better by Moody's and "AA-" or better by S&P; and (b) the aggregate of such
bank time deposits and bankers' acceptances issued by any bank, trust company or
banking association does not exceed at any one time 10% of the aggregate of the capital
stock, surplus and undivided profits of such bank, trust company or banking association
and that such capital stock,surplus and undivided profits shall not be less $15,000,000;
(5) Repurchase agreements with any bank, trust company or national banking
association insured by the Federal Deposit Insurance Corporation (including the Trustee),
with subsidiaries (of a parent company),provided the obligations of the subsidiary under
the agreement are unconditionally guaranteed by the parent, or with any government
bond dealer recognized as a primary dealer by the Federal Reserve Bank of New York,
which agreements are fully and continuously secured by a valid and perfected first
priority security interest in obligations described in paragraph (1) or(2) of this definition,
provided that either such bank, trust company or national banking association which (or
senior debt or claims paying ability of the financial entity's guarantor) is rated,at the time
of investment,"Aa3"or better by Moody's and"AA-"or better by S&P;
(6) Repurchase agreements with maturities of not more than one year entered
into with financial institutions such as banks or trust companies organized under state law
or national banks or banking associations (including the Trustee), insurance companies or
MOWN 481126380,2 6
government bond dealers reporting to, trading with, and recognized as a primary dealer
by, the Federal Reserve Bank of New York and a member of the Securities Investor
Protection Corporation or with a dealer or parent holding company that is rated, at the
time of investment, or whose long-term debt obligations (or senior debt or claims paying
ability of the financial entity's guarantor) are rated, at the time of investment, "Aa3" or
better by Moody's and "AA-"or better by S&P, provided such repurchase agreements are
in writing, secured by obligations described in paragraphs (1) and (2) of this definition
having a fair market value, exclusive of accrued interest, at least equal to the amount
invested in the repurchase agreements and in which the Trustee has a perfected first lien
in,and retains possession of, such obligations free from all third party claims;
(7) Investment agreements, forward purchase agreements and reserve fund put
agreements with any corporation, including banking or financial institutions, or
agreements entered into with subsidiaries(of a parent company), provided the obligations
of the subsidiary under the agreement are unconditionally guaranteed by the parent, the
corporate debt of which (or senior debt or claims paying ability of the financial entity's
guarantor) is rated, at the time of investment, "Aa3" or better by Moody's and "AA-" or
better by S&P;
(8) Guaranteed investment contracts or similar funding agreements issued by
insurance companies, provided that either the long term corporate debt of such insurance
company, at the time of investment,is rated, at the time of investment, "Aa3"or better by
Moody's and "AA-" or better by S&P or which agreements are fully and continuously
secured by a valid and perfected first priority security interest in obligations described in
paragraph (1) or (2) of this definition, or that the following conditions are met: (a) the
market value of the collateral is maintained at levels acceptable to Moody's and S&P, (b)
the Trustee or a third party acting solely as agent for the Trustee has possession of the
collateral, (c) the Trustee has a perfected first priority security interest in the collateral,
(d) the collateral is free and clear of third-party liens, and (e) failure to maintain the
requisite collateral level will require the Trustee to liquidate collateral;
(9) Corporate commercial paper rated "P-I"or better by Moody's and"A-1+"
or better by S&P at the time of investment;
(10) Taxable government money market portfolios restricted to obligations the
payment of principal and interest with respect to which is guaranteed by the United States
of America or repurchase agreements secured by such obligations, and which are rated
"AAAm" or "AAAm-G" by S&P and "P-1" by Moody's (including funds for which the
Trustee or an affiliate provides investment advice or similar services);
(11) Deposits with the Local Agency Investment Fund of the State, as may
otherwise be permitted by law; and
(12) Shares in the Franklin Adjustable U.S. Government Securities Fund or any
other similar fund having at least $1,000,000,000 in assets and invested solely in
securities directly guaranteed by the U.S. government or its agencies and rated "AAAP'
by S&P or a comparable rating by Moody's.
somaswamso;4mRD r 7
"Person" means an individual, corporation, limited liability company, firm, association,
partnership, trust, or other legal entity or group of entities, including a governmental entity or
any agency or political subdivision thereof.
"Principal Account" means the account by that name within the Installment Payment
Fund established in accordance with Section 5.02 hereof.
"Principal Office" means the Trustee's principal corporate trust office in Los Angeles,
California.
"Principal Payment Date" means a date on which an Installment Payment evidenced by
the Certificates becomes due and payable.
"Rebate Fund" means the fund by that name established in accordance with Section
5.04 hereof.
"Rebate Requirement"has the meaning ascribed thereto in the Tax Certificate.
"Record Date"means, with respect to the interest payable on any Interest Payment Date,
the 15th day of the calendar month immediately preceding such Interest Payment Date, whether
or not such day is a Business Day.
"Refunded Certificates" means the District's Refunding Certificates of Participation,
49931993 Series, --'• ':Rg ill the . ...._.. 2098 111F. gh 2013,
"Reserve Facility" means any line of credit, letter of credit, insurance policy, surety
bond or other funding instrument issued by an entity the long-term unsecured obligations of
which are then rated "Aa3" or better by Moody's and "AA-" or better by S&P and deposited
with the Trustee pursuant to Section 5.03 hereof.
"Reserve Fund" means the fund by that name established in accordance with Section
5.03 hereof.
"Reserve Requirement" means, as of any date of calculation, an amount equal to the
least of(a) 10%of the original aggregate amount of principal evidenced by the Certificates (or if
the amount of original issue discount or premium applicable to the Certificates exceeds 2%,then
10% of the issue price of the Certificates), (b) the maximum amount of remaining Installment
Payments, and the interest thereon, coming due in any one Certificate Year, and (c) 125%of the
average amount of remaining Installment Payments, and the interest thereon, coming due in each
Certificate Year.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., a corporation organized and existing under the laws of the State of New York,
its successors and assigns, except that if such entity shall no longer perform the functions of a
securities rating agency for any reason, the term "S&P" shall be deemed to refer to any other
nationally recognized securities rating agency selected by the District.
"State"means the State of California.
sB498994AgMU43.2 8
"Tax Certificate" means the Tax Certificate executed by the District at the time of
execution and delivery of the Certificates relating to the requirements of section 148 of the Code,
as originally executed and as it may from time to time be amended in accordance with the
provisions thereof.
"Trust Agreement"means this Trust Agreement, dated as of A4ay&2glnber 1, 2008, by
and among the Trustee,the Corporation and the District,as originally executed and delivered and
as it may from time to time be amended or supplemented in accordance with the provisions
hereof.
"Trustee" means U.S. Bank National Association, a national banking association duly
organized and existing under the laws of the United States of America, or any other bank or trust
company which may at any time be substituted in its place as provided in Section 10.02 hereof.
"Written Certificate"and "Written Request' mean (a)with respect to the Corporation,
a written certificate or written request, respectively, signed in the name of the Corporation by an
Authorized Corporation Representative, and (b) with respect to the District, a written certificate
or written request, respectively, signed in the name of the District by an Authorized District
Representative. Any such certificate or request may, but need not, be combined in a single
instrument with any other instrument, opinion or representation, and the two or more so
combined shall be read and construed as a single instrument.
Section 1.02. Definitions in Installment Purchase Agreement. Except as otherwise
herein defined and unless the context otherwise requires, the terms defined in the Installment
Purchase Agreement shall for all purposes hereof and of any amendment hereof or supplement
hereto and of any report or other document mentioned herein have the meanings defined therein,
such definitions to be equally applicable to both the singular and plural forms of any of the terms
defined therein. With respect to any defined term which is given a different meaning under this
Trust Agreement than under the Installment Purchase Agreement,as used herein it shall have the
meaning given herein.
Section 1.03. Equal Security. In consideration of the acceptance of the Certificates by
the Owners, this Trust Agreement shall be deemed to be and shall constitute a contract between
the Trustee and the Owners to secure the full and final payment of the interest and principal
evidenced by the Certificates which may be executed and delivered hereunder, subject to each of
the agreements, conditions, covenants and terms contained herein; and all agreements,
conditions, covenants and terms contained herein required to be observed or performed by or on
behalf of the Trustee shall be for the equal and proportionate benefit, protection and security of
all Owners without distinction, preference or priority as to security or otherwise of any
Certificates over any other Certificates by reason of the number or date thereof or the time of
execution or delivery thereof or for any cause whatsoever, except as expressly provided herein or
therein.
80198 4,i30243H93.1. 9
ARTICLE 11
TERMS AND CONDITIONS OF CERTIFICATES
Section 2.01. Preparation and Delivery of Certificates. The Trustee is hereby
authorized, upon the Written Request of the District, to execute and deliver the Certificates in the
aggregate principal amount of $;74-63-00& .000.000. evidencing the aggregate principal
amount of the Installment Payments and each evidencing a direct, fractional undivided interest in
the Installment Payments, and the interest thereon. The Installment Payments evidenced by each
Certificate shall constitute the principal evidenced thereby and the interest on such Installment
Payments shall constitute the interest evidenced thereby. The Certificates shall be numbered,
with or without prefixes,as directed by the Trustee.
Section 2.02. Denomination. Medium and Dating of Certificates. The Certificates
shall be designated "Orange County Sanitation District Refunding Certificates of Participation,
Series 2008A@"shall be prepared in the form of fully registered Certificates,without coupons, in
Authorized Denominations and shall be payable in lawful money of the United States of
America.
The Certificates shall be dated as of the Closing Date. Each Certificate shall evidence
interest from the Interest Payment Date next preceding its date of execution to which interest has
been paid in full, unless such date of execution shall be after a Record Date and on or prior to the
following Interest Payment Date, in which case such Certificate shall evidence interest from such
Interest Payment Date, or unless such date of execution shall be on or prior to duly an 15,
3009- Q�l in which case such Certificate shall represent interest from the Closing Date.
Notwithstanding,the foregoing, if, as shown by the records of the Trustee, interest evidenced by
the Certificates shall be in default, each Certificate shall evidence interest from the last Interest
Payment Date to which such interest has been paid in full or duly provided for.
Section 2.03. Payment Dates of Certificates: Interest Computation. (a) Method and
Place of Payment. The principal evidenced by the Certificates shall become due and payable on
August 1 of the years, in the amounts,and shall evidence interest accruing at the rates per annum
set forth below:
Principal Payment Date Principal Interest
(August 1) Component Rate
2008 V5,500,,000 30994
2010 13895,000 440
2011 4,925,00 440
2012 6,515000 449
2013 '^-.� 95,()^0 yY5
MIA
2M
80199044.40263M3Z 10
Except as otherwise provided in the Letter of Representations, payments of interest
evidenced by the Certificates shall be made to the Owners thereof(as determined at the close of
business on the Record Date next preceding the related Interest Payment Date) by check or draft
of the Trustee mailed to the address of each such Owner as it appears on the registration books
maintained by the Trustee pursuant to Section 2.07 hereof, or to such other address as may be
furnished in writing to the Trustee by each such Owner. Except as otherwise provided in the
Letter of Representations, payment of principal evidenced by the Certificates, on their stated
Principal Payment Dates, shall be made only upon presentation and surrender of the Certificates
at the Principal Office.
(b) Computation of Interest. The interest evidenced by the Certificates shall be
payable on each Interest Payment Date to and including their respective Principal Payment
Dates, and shall represent the sum of the interest on the Installment Payments coming due on the
Interest Payment Dates in each year. The principal evidenced by the Certificates shall be
payable on their respective Principal Payment Dates in each year and shall represent the
Installment Payments coming due on the Principal Payment Dates in each year. Interest
evidenced by the Certificates shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
Section 2.04. Form of Certificates. The Certificates shall be in substantially the form
of Exhibit A hereto, with necessary or appropriate insertions, omissions and variations as
permitted or required hereby.
Section 2.05. Execution of Certificates and Replacement Certificates. The
Certificates shall be executed by the Trustee by the manual signature of an authorized signatory
of the Trustee. The Trustee shall deliver replacement Certificates in the manner and as
contemplated by this Article. Such replacement Certificates shall be executed as herein provided
and shall be in Authorized Denominations.
Section 2.06. Transfer and Payment of Certificates; Exchange of Certificates. Each
Certificate is transferable by the Owner thereof, in person or by his attorney duly authorized in
writing, at the Principal Office, on the registration books maintained by the Trustee pursuant to
the provisions of Section 2.07 hereof, upon surrender of such Certificate for cancellation
accompanied by delivery of a duly executed written instrument of transfer in a form acceptable
to the Trustee. The Trustee may treat the Owner of any Certificate as the absolute owner of such
Certificate for all purposes, whether or not the principal or interest evidenced by such Certificate
shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the
contrary; and payment of the interest and principal evidenced by such Certificate shall be made
only to such Owner, which payments shall be valid and effectual to satisfy and discharge the
liability evidenced by such Certificate to the extent of the sum or sums so paid.
Whenever any Certificate shall be surrendered for transfer, the Trustee shall execute and
deliver a new Certificate or Certificates evidencing principal in the same aggregate amount and
having the same stated Principal Payment Date. The Trustee shall require the payment by any
Owner requesting such transfer of any tax or other governmental charge required to be paid with
respect to such transfer.
8919eeWs8026M31 I 1
Each Certificate may be exchanged at the Principal Office for Certificates evidencing
principal in a like aggregate principal amount having the same stated Principal Payment Date in
such Authorized Denominations as the Owner thereof may request. The Trustee shall require the
payment by the Owner requesting such exchange of any tax or other governmental charge
required to be paid with respect to such exchange.
Section 2.07. Certificate Registration Books. The Trustee shall keep at its Principal
Office sufficient books for the registration and transfer of the Certificates, which books shall be
available for inspection and copying by the District at reasonable hours and under reasonable
conditions; and upon presentation for such purpose the Trustee shall, under such reasonable
regulations as it may prescribe, register or transfer the Certificates on such books as hereinabove
provided.
Section 2.08. Temporary Certificates. The Certificates may be initially delivered in
temporary forth exchangeable for definitive Certificates when ready for delivery, which
temporary Certificates shall be printed, lithographed or typewritten, shall be of such
denominations as may be determined by the Trustee, shall be in fully registered form and shall
contain such reference to any of the provisions hereof as may be appropriate. Every temporary
Certificate shall be executed and delivered by the Trustee upon the same conditions and terms
and in substantially the same manner as definitive Certificates. If the Trustee executes and
delivers temporary Certificates, it shall prepare and execute definitive Certificates without delay,
and thereupon the temporary Certificates may be surrendered at the Principal Office in exchange
for such definitive Certificates, and until so exchanged such temporary Certificates shall be
entitled to the same benefits hereunder as definitive Certificates executed and delivered
hereunder.
Section 2.09. Certificates Mutilated, Lost. Destroyed or Stolen. If any Certificate
shall become mutilated, the Trustee, at the expense of the Owner thereof, shall execute and
deliver a new Certificate evidencing a like principal amount and having the same stated Principal
Payment Date and number in exchange and substitution for the Certificate so mutilated, but only
upon surrender to the Trustee of the Certificate so mutilated. Every mutilated Certificate so
surrendered to the Trustee shall be canceled by it. If any Certificate shall be lost, destroyed or
stolen, evidence of such loss, destruction or theft may be submitted to the Trustee, and if such
evidence is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given,
the Trustee, at the expense of the Owner thereof, shall execute and deliver a new Certificate
evidencing a like principal amount and having the same stated Principal Payment Date,
numbered as the Trustee shall determine, in lieu of and in substitution for the Certificate so lost,
destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of
preparing each new Certificate executed and delivered by it under this Section and of the
expenses which may be incurred by it under this Section. Any Certificate executed and delivered
under the provisions of this Section in lieu of any Certificate alleged to be lost, destroyed or
stolen shall be equally and proportionately entitled to the benefits hereof with all other
Certificates executed and delivered hereunder, and the Trustee shall not be required to treat both
the original Certificate and any replacement Certificate as being Outstanding for the purpose of
determining the amount of Certificates which may be executed and delivered hereunder or for
the purpose of determining any percentage of Certificates Outstanding hereunder, but both the
original and replacement Certificate shall be treated as one and the same. Notwithstanding any
SOWW94�1934143,2- 12
other provision of this Section, in lieu of executing and delivering a new Certificate for a
Certificate which has been lost, destroyed or stolen and which evidences principal that is then
payable,the Trustee may make payment of such Certificate to the Owner thereof if so instructed
by the District.
Section 2.10. Book-Entry System. (a) The Certificates shall be initially executed and
delivered as Book-Entry Certificates,and the Certificates for each stated Principal Payment Date
shall be in the form of a separate single fully registered Certificate (which may be typewritten).
Upon initial execution and delivery, the ownership of each Certificate shall be registered in the
registration books maintained by the Trustee in the name of the Nominee, as nominee of the
Depository.
Payment of principal or interest evidenced by any Book-Entry Certificate registered in
the name of the Nominee shall be made on the applicable Interest Payment Date by wire transfer
of New York clearing house or equivalent next day funds or by wire transfer of same day funds
to the account of the Nominee. Such payments shall be made to the Nominee at the address
which is,on the Record Date, shown for the Nominee in the registration books maintained by the
Trustee.
(b) With respect to Book-Entry Certificates, the District, the Corporation and the
Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of
which such a Participant holds an interest in such Book-Entry Certificates. Without limiting the
immediately preceding sentence, the District, the Corporation and the Trustee shall have no
responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the
Nominee or any Participant with respect to any ownership interest in Book-Entry Certificates,
(ii) the delivery to any Participant or any other Person, other than an Owner as shown in the
registration books maintained by the Trustee, of any notice with respect to Book-Entry
Certificates, (iii) the selection by the Depository and its Participants of the beneficial interests in
Book-Entry Certificates to be prepaid in the event Certificates are prepaid in part, (iv) the
payment to any Participant or any other Person, other than an Owner as shown in the registration
books maintained by the Trustee, of any amount with respect to principal, premium, if any, or
interest evidenced by Book-Entry Certificates, or(v) any consent given or other action taken by
the Depository as Owner.
(c) The District,the Corporation and the Trustee may treat and consider the Person in
whose name each Book-Entry Certificate is registered in the registration books maintained by the
Trustee as the absolute Owner of such Book-Entry Certificate for the purpose of payment of
principal and interest evidenced by such Certificate,for the purpose of selecting any Certificates,
or portions thereof, to be prepaid, for the purpose of giving notices of matters with respect to
such Certificate, for the purpose of registering transfers with respect to such Certificate, for the
purpose of obtaining any consent or other action to be taken by Owners and for all other
purposes whatsoever, and the District, the Corporation and the Trustee shall not be affected by
any notice to the contrary.
(d) Reserved.
91119804 180263843 2_ 13
(e) The Trustee shall pay all principal, premium, if any, and interest evidenced by the
Certificates to the respective Owner, as shown in the registration books maintained by the
Trustee, or his respective attorney duly authorized in writing, and all such payments shall be
valid and effective to fully satisfy and discharge the obligations with respect to payment of
principal, premium, if any, and interest evidenced by the Certificates to the extent of the sum or
sums so paid. No Person other than an Owner, as shown in the registration books maintained by
the Trustee, shall receive a Certificate evidencing principal, premium, if any, and interest
evidenced by the Certificates. Upon delivery by the Depository to the Owners, the Trustee and
the District of written notice to the effect that the Depository has determined to substitute a new
nominee in place of the Nominee, and subject to the provisions herein with respect to Record
Dates,the word Nominee in this Taut Agreement shall refer to such nominee of the Depository.
(f) In order to qualify the Book-Entry Certificates for the Depository's book-entry
system,the District shall execute and deliver to the Depository a Letter of Representations. The
execution and delivery of a Letter of Representations shall not in any way impose upon the
Corporation, the District or the Trustee any obligation whatsoever with respect to Persons
having, interests in such Book-Entry Certificates other than the Owners, as shown on the
registration books maintained by the Trustee. Such Letter of Representations may provide the
time, form, content and manner of transmission, of notices to the Depository. In addition to the
execution and delivery of a Letter of Representations by the District,the District,the Corporation
and the Trustee shall take such other actions, not inconsistent with this Trust Agreement, as are
reasonably necessary to qualify Book-Entry Certificates for the Depository's book-entry
program.
(g) In the event the District determines that it is in the best interests of the Beneficial
Owners that they be able to obtain certificated Certificates and that such Certificates should
therefore be made available and notifies the Depository and the Trustee of such determination,
the Depository will notify the Participants of the availability through the Depository of
certificated Certificates. In such event, the Trustee shall transfer and exchange certificated
Certificates as requested by the Depository and any other Owners in appropriate amounts. In the
event(i)the Depository determines not to continue to act as securities depository for Book-Entry
Certificates, or(ii) the Depository shall no longer so act and gives notice to the Trustee of such
determination, then the District shall discontinue the Book-Entry system with the Depository. If
the District determines to replace the Depository with another qualified securities depository,the
District shall prepare or direct the preparation of a new single, separate, fully registered
Certificate for each stated Principal Payment Date of such Book-Entry Certificates, registered in
the name of such successor or substitute qualified securities depository or its nominee. If the
District fails to identify another qualified securities depository to replace the Depository,then the
Certificates shall no longer be restricted to being registered in the registration books maintained
by the Trustee in the name of the Nominee, but shall be registered in whatever name or names
the Owners transferring or exchanging such Certificates shall designate, in accordance with the
provisions of Sections 2.06 and 2.09 hereof. Whenever the Depository requests the District to do
so, the District will cooperate with the Depository in taking appropriate action after reasonable
notice (i) to make available one or more separate certificates evidencing the Book-Entry
Certificates to any Participant having Book-Entry Certificates credited to its account with the
Depository, and (ii) to arrange for another securities depository to maintain custody of
certificates evidencing the Book-Entry Certificates.
NOPSI) .4da263843 2 14
(h) Notwithstanding any other provision of this Trust Agreement to the contrary, if
DTC is the sole Owner of the Certificates, so long as any Book-Entry Certificate is registered in
the name of the Nominee, all payments of principal, premium, if any, and interest evidenced by
such Certificate and all notices with respect to such Certificate shall be made and given,
respectively, as provided in the Letter of Representations or as otherwise instructed by the
Depository.
(i) In connection with any notice or other communication to be provided to Owners
pursuant to the Trust Agreement by the District, the Corporation or the Trustee, with respect to
any consent or other action to be taken by Owners, the Trustee shall establish a record date for
such consent or other action and give the Depository notice of such record date not less than 15
calendar days in advance of such record date to the extent possible. Notice to the Depository
shall be given only when DTC is the sole Owner of the Certificates.
ARTICLE III
PROCEEDS OF CERTIFICATES
Section 3.01. Delivery of Certificates. The Trustee is hereby authorized to execute the
Certificates and deliver the Certificates to the original purchaser thereof upon receipt of a
Written Request of the District and upon receipt of the proceeds of sale thereof.
Section 3.02. Deposit of Proceeds of Certificates. The net proceeds received by the
Trustee from the sale of the Certificates in the amount of$77,;08-036-6rS . plus
the good faith deposit in the amount of $859900 previously deposited with the
Trustee, shall be deposited by the Trustee as follows:
(a) the Trustee shall deposit in the Costs of Issuance Fund the amount of
$373;3k8.88 ,
(b) the Trustee shall deposit in the Reserve Fund the amount of
$7�500.0tY.which is equal to the initial Reserve Requirement;
(c) the Trustee shall transfer to the Escrow Agent for deposit in the Escrow Fund the
amount of$64,623,678.7-7 ; and
(d) the Trustee shall transfer to A IG tr.,a-r-neneialenei l "--a-. �-� acie[e Generale. New
York Branch the amount of$`,°"^_�-°,- -°`".^" representing the settlement amount owed in
connection with the termination of the interest rate swap agreement relating to the Refunded
Certificates.
Section 3.03. Costs of Issuance Fund. The Trustee shall establish and maintain a
separate special fund to be held by the Trustee known as the Costs of Issuance Fund. There shall
be deposited in the Costs of Issuance Fund on the Closing Date the amount required to be
deposited therein pursuant to Section 3.02 hereof. The Trustee shall disburse moneys from the
Costs of Issuance Fund on such dates and in such amounts as are necessary to pay Costs of
Issuance, in each case upon the Written Request of the District stating the Person to whom
payment is to be made, the amount to be paid,the purpose for which the obligation was incurred
*"9Q-i*02fi3U12 15
and that such payment is a proper charge against the Costs of Issuance Fund. On the date that is
six months after the Closing Date, the Trustee shall transfer any amounts then remaining in the
Costs of Issuance Fund to the Installment Payment Fund. Upon such transfer, the Costs of
Issuance Fund shall be closed.
ARTICLE IV
NO PREPAYMENT OF CERTIFICATES
Section 4.01. Prepayment. The Certificates are not subject to prepayment prior to their
stated Principal Payment Dates.
ARTICLE V
ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS
Section 5.01. Assignment and Pledge. The Corporation hereby transfers, conveys and
assigns to the Trustee, for the benefit of the Owners, all of the Corporation's rights, title and
interest in and to the Installment Purchase Agreement (excepting its rights to indemnification
thereunder), including the right to receive Installment Payments, and the interest thereon, from
the District and the right to exercise any remedies provided therein in the event of a default by
the District thereunder. The Trustee hereby accepts said transfer, conveyance and assignment,
solely in its capacity as Trustee, for the benefit of the Owners, subject to the provisions of this
Trust Agreement. All Installment Payments, and the interest thereon, shall be paid directly by
the District to the Trustee, and if received by the Corporation at any time shall be deposited by
the Corporation with the Trustee immediately upon the receipt thereof.
In order to secure the respective rights of the Owners to the payments required to be
made thereto as provided herein, the Corporation and the District hereby irrevocably pledge to
the Trustee, for the benefit of the Owners, all of their right, title and interest, if any, in and to all
amounts on deposit from time to time in the funds and accounts established hereunder (other
than the Rebate Fund). This pledge shall constitute a first lien on the amounts on deposit in such
funds and accounts.
Section 5.02. Installment Payment Fund. (a) The Trustee shall establish and maintain
the Installment Payment Fund until all required Installment Payments, and the interest thereon,
are paid in full pursuant to the Installment Purchase Agreement and until the first date upon
which the Certificates are no longer Outstanding. The Trustee shall deposit in the Installment
Payment Fund all Installment Payments, and the interest thereon, paid by the District and
received by the Trustee. The moneys in the Installment Payment Fund shall be held in trust by
the Trustee for the benefit of the Owners and shall be used and disbursed only for the purposes
and uses herein authorized.
(b) The Trustee shall transfer the amounts on deposit in the Installment Payment
Fund, at the times and in the manner hereinafter provided, to the following respective accounts
within the Installment Payment Fund, each of which the Trustee hereby agrees to establish and
maintain until all required Installment Payments, and the interest thereon, are paid in full
sewsrn 80263s13z 16
pursuant to the Installment Purchase Agreement and until the first date upon which the
Certificates are no longer Outstanding. The moneys in each of such accounts shall be held in
trust by the Trustee for the benefit of the Owners and shall be used and disbursed only for the
purposes and uses herein authorized.
(i) Interest Account. The Trustee, on each Interest Payment Date, shall
deposit in the Interest Account that amount of moneys representing the interest on the
Installment Payments coming due on such Interest Payment Date. Moneys in the Interest
Account shall be used by the Trustee for the purpose of paying the interest evidenced by
the Certificates when due and payable.
(ii) Principal Account. The Trustee, on each Principal Payment Date, shall
deposit in the Principal Account that amount of moneys representing the Installment
Payments coming due on such Principal Payment Date. Moneys in the Principal Account
shall be used by the Trustee for the purpose of paying the principal evidenced by the
Certificates when due and payable.
Section 5.03. Reserve Fund. (a) The Trustee shall establish and maintain the Reserve
Fund until all required Installment Payments, and the interest thereon, are paid in full pursuant to
the Installment Purchase Agreement and until the first date upon which no Certificates are
Outstanding. The moneys in the Reserve Fund, and any Reserve Facility, shall be held in trust
by the Trustee for the benefit of the Owners and shall be used and disbursed only for the
purposes and uses herein authorized. There shall be deposited in the Reserve Fund on the
Closing Date the amount required to be deposited therein pursuant to Section 3.02 hereof
(b) The District may substitute a Reserve Facility for all or a part of the moneys on
deposit in the Reserve Fund by depositing such Reserve Facility with the Trustee so long as, at
the time of such substitution, the amount on deposit in the Reserve Fund, together with the
amount available under such Reserve Facility and any previously substituted Reserve Facilities,
shall be at least equal to the Reserve Requirement. Moneys for which a Reserve Facility has
been substituted as provided herein shall be transferred, at the election of the District, to the
Installment Payment Fund, or upon receipt of an Opinion of Counsel to the effect that such
transfer, in and of itself, will not adversely affect the exclusion of interest evidenced by the
Certificates from gross income for federal income tax purposes, to a special account to be held
by the Trustee and applied to the payment of capital costs of the District, as directed in a Written
Request of the District. Any amounts paid pursuant to any Reserve Facility shall be deposited in
the Reserve Fund.
(c) If, on any Interest Payment Date,the amount on deposit in the Interest Account is
insufficient to pay the interest evidenced by the Certificates on such Interest Payment Date, the
Trustee shall transfer from the Reserve Fund and deposit in the Interest Account an amount
sufficient to make up such deficiency. If a Reserve Facility is credited to the Reserve Fund to
satisfy a portion of the Reserve Requirement, the Trustee shall make a claim for payment under
such Reserve Facility, in accordance with the provisions thereof, in an amount which, together
with other available moneys in the Reserve Fund, will be sufficient to make said deposit in the
Interest Account.
8M98a9CdNUUAU. 17
If, on any Principal Payment Date, the amount on deposit in the Principal Account is
insufficient to pay the principal evidenced by the Certificates on such Principal Payment Date,
the Trustee shall transfer from the Reserve Fund and deposit in the Principal Account an amount
sufficient to make up such deficiency. If a Reserve Facility is credited to the Reserve Fund to
satisfy a portion of the Reserve Requirement, the Trustee shall make a claim for payment under
such Reserve Facility, in accordance with the provisions thereof, in an amount which, together
with other available moneys in the Reserve Fund, will be sufficient to make said deposit in the
Principal Account.
Moneys, if any, on deposit in the Reserve Fund shall be withdrawn and applied by the
Trustee for the final payment of principal and interest evidenced by the Certificates.
(d) Amounts on deposit in the Reserve Fund which were not derived from payments
under any Reserve Facility credited to the Reserve Fund to satisfy a portion of the Reserve
Requirement shall be used and withdrawn by the Trustee prior to using and withdrawing any
amounts derived from payments under any such Reserve Facility. In order to accomplish such
use and withdrawal of such amounts not derived from payments under any such Reserve Facility,
the Trustee shall, as and to the extent necessary, liquidate any investments purchased with such
amounts. If and to the extent that more than one Reserve Facility is credited to the Reserve Fund
to satisfy a portion of the Reserve Requirement, drawings thereunder, and repayment of expenses
with respect thereto, shall be made on a pro rata basis (calculated by reference to the policy
limits available thereunder).
(e) 1% the eve-'�n any transfer from the Reserve Fund or the making of any
claim under any Reserve Facility, the Trustee shall, within five days thereafter, provide written
notice to the District of the amount and the date of such transfer or claim.
(f) The Trustee shall, from amounts received from the District pursuant to Section
3.03 of the Installment Purchase Agreement, deposit in the Reserve Fund an amount of money
which, together with the amount already on deposit therein and the amounts available under all
Reserve Facilities, will be equal to the Reserve Requirement. No deposit need be made in the
Reserve Fund so long as there shall be on deposit therein a sum equal to the amount which,
together with the amounts available under all Reserve Facilities, is at least the Reserve
Requirement. The Trustee shall promptly notify the District in writing if the amount on deposit
is less than the Reserve Requirement.
(g) If, as a result of the scheduled payment of principal or interest evidenced by the
Certificates, the Reserve Requirement is reduced, the Trustee shall transfer an amount equal to
the amount of such reduction to the Installment Payment Fund.
(h) On any date on which Certificates are defeased in accordance with Article X
hereof, the Trustee shall, if so directed in a Written Request of the District,transfer any moneys
in the Reserve Fund in excess of the Reserve Requirement resulting from such defeasance to the
entity or fund so specified in such Written Request of the District, to be applied to such
defeasance.
setcalwaaenz 1wl- 18
Section 5.04. Rebate Fund. (a) In addition to the other funds and accounts created
pursuant hereto, the Trustee shall establish and maintain the Rebate Fund. The District shall
deliver to the Trustee for deposit in the Rebate Fund such amounts as are required to be
deposited therein pursuant to the Tax Certificate. All money at any time deposited in the Rebate
Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate
Requirement, for payment to the United States of America upon the Written Request of the
District. Notwithstanding defeasance of the Certificates pursuant to Article X hereof or anything
to the contrary contained herein, all amounts required to be deposited into or on deposit in the
Rebate Fund shall be governed exclusively by this Section and by the Tax Certificate (which is
incorporated herein by reference). The Trustee shall be deemed conclusively to have complied
with such provisions if it follows the written directions of the District, and shall have no liability
or responsibility to enforce compliance by the District with the terms of the Tax Certificate. The
Trustee may conclusively rely upon the District's determinations, calculations and certifications
required by the Tax Certificate. The Trustee shall have no responsibility to independently make
any calculation or determination or to review the District's calculations.
(b) Any funds remaining in the Rebate Fund after payment in full of all of the
principal and interest evidenced by the Certificates and after payment of any amounts described
in this Section,shall be withdrawn by the Trustee and remitted to the District.
Section 5.05. Investment of Moneys. Except as otherwise provided herein, all moneys
in any of the funds or accounts established pursuant to this Trust Agreement shall be invested by
the Trustee solely in Permitted Investments, as directed by the District pursuant to a Written
Request of the District at least two Business Days prior to the making of such investment.
Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments
maturing not later than the date on which it is estimated that such moneys will be required for the
purposes specified in this Trust Agreement; provided, however, that Permitted Investments in
which moneys in the Reserve Fund are so invested shall mature no later than the final Principal
Payment Date of the Certificates. Absent timely written direction from the District, the Trustee
shall invest any funds held by it in Permitted Investments described in clause (10) of the
definition thereof. Permitted Investments that are registerable securities shall be registered in the
name of the Trustee.
All interest,profits and other income received from the investment of moneys in any fund
or account established pursuant to this Trust Agreement (other than the Reserve Fund) shall be
retained therein. All interest, profits and other income received from the investment of moneys
in the Reserve Fund shall be deposited in the Installment Payment Fund; provided, however,
that,notwithstanding the foregoing,any such transfer shall be made only if and to the extent that,
after such transfer, the amount on deposit in the Reserve Fund is at least equal to the Reserve
Requirement.
Permitted Investments acquired as an investment of moneys in any fund or account
established under this Trust Agreement shall be credited to such fund or account. For the
purpose of determining the amount in any fund, all Permitted Investments credited to such fund
shall be valued by the Trustee at the market value thereof, such valuation to be performed not
less frequently than semiannually on or before each January 15 and July 15.
sawseea.+1026111 z 19
The Trustee may act as principal or agent in the making or disposing of any investment.
The Trustee shall sell or present for redemption any Permitted Investment whenever it shall be
necessary to provide moneys to meet any required payment,transfer,withdrawal or disbursement
from the fund or account to which such Permitted Investment is credited, and the Trustee shall
not be liable or responsible for any loss resulting from any investment made or sold pursuant to
this Section. For purposes of investment, the Trustee may commingle moneys in any of the
funds and accounts established hereunder.
The Trustee is hereby authorized, in making or disposing of any investment permitted by
this Section, to deal with itself (in its individual capacity) or with any one or more of its
affiliates, whether or not such affiliate is acting as an agent of the Trustee or for any third Person
or dealing as principal for its own account.
Section 5.06. Brokerage Confirmations. The District acknowledges that to the extent
regulations of the Comptroller of the Currency or other applicable regulatory entity grant the
District the right to receive brokerage confirmations of securities transactions under this Trust
Agreement,the District specifically waives receipt of such confirmations to the extent permitted
by law. The Trustee is required hereunder to furnish the District with periodic cash transaction
statements which include detail for all securities transactions made by the Trustee on behalf of
the District hereunder.
ARTICLE VI
COVENANTS
Section 6.01. Compliance with Trust Agreement. The Trustee will not execute or
deliver any Certificates in any manner other than in accordance with the provisions hereof, and
the Corporation and the District will not suffer or permit any default by them to occur hereunder,
but will faithfully comply with, keep, observe and perform all the agreements, conditions,
covenants and terms hereof required to be complied with, kept, observed and performed by them.
Section 6.02. Compliance with Installment Purchase Agreement. The Corporation
and the District will faithfully comply with, keep, observe and perform all the agreements,
conditions, covenants and terms contained in the Installment Purchase Agreement required to be
complied with, kept, observed and performed by them and, together with the Trustee, will
enforce the Installment Purchase Agreement against the other party thereto in accordance with its
terms.
Section 6.03. Compliance with Master Agreement. The Corporation and the District
will faithfully comply with, keep, observe and perform all the agreements, conditions,covenants
and terns contained in the Master Agreement required to be complied with, kept, observed and
performed by them and, together with the Trustee,will enforce the Master Agreement against the
other party thereto in accordance with its terms.
Section 6.04. Observance of Laws and Regulations. The Corporation and the District
will faithfully comply with, keep, observe and perform all valid and lawful obligations or
regulations now or hereafter imposed on them by contract, or prescribed by any law of the
9u198eu4asaz63s33.Z 20
United States of America or of the State, or by any officer, board or commission having
jurisdiction or control, as a condition of the continued enjoyment of each and every franchise,
right or privilege now owned or hereafter acquired by them, including their right to exist and
carry on their respective businesses,to the end that such franchises, rights and privileges shall be
maintained and preserved and shall not become abandoned,forfeited or in any manner impaired.
Section 6.05. Other Liens. None of the Trustee, the Corporation or the District shall
create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds
or accounts created hereunder,other than the pledge and lien hereof.
Section 6.06. Prosecution and Defense of Suits. The District will defend against every
action, suit or other proceeding at any time brought against the Trustee or any Owner upon any
claim arising out of the receipt, deposit or disbursement of any of the Installment Payments, or
the interest thereon, or involving the rights of the Trustee or any Owner hereunder; provided,
however, that the Trustee or any Owner at its or his election may appear in and defend any such
action, suit or other proceeding.
Section 6.07. Accounting Records and Statements. The Trustee will keep proper
accounting records in which complete and correct entries shall be made of all transactions made
by the Trustee relating to the receipt, deposit and disbursement of the Installment Payments, and
the interest thereon, and such accounting records shall be available for inspection by the
Corporation and the District at reasonable hours and under reasonable conditions. The Trustee
shall not be obligated to provide an accounting for any fund or account that (a) has a balance of
$0.00 and (b) has not had any activity since the last reporting date. The Trustee will, upon
written request, make copies of the foregoing available to any Owner (at the expense of such
Owner).
Section 6.08. Tax Covenants.
(a) Soecial Definitions. When used in this Section,the following terms shall have the
following meanings:
"Bond Counsel" means Fulbright & Jaworski L.L.P. or any other counsel of recognized
national standing in the field of law relating to municipal bonds, appointed and paid by the
District and reasonably satisfactory to and approved by the Trustee.
"Computation Date" has the meaning set forth in section 1.148-1(b) of the Tax
Regulations.
"Computation Period" means, initially, that period commencing on the date of the
execution and delivery of the Certificates and concluding on the initial Computation Date and,
thereafter, each period commencing on the day next following a Computation Date and
concluding on the immediately succeeding Computation Date.
"Gross Proceeds" of any issue of governmental obligations means any proceeds as
defined in section 1.148-1(b) of the Tax Regulations (referring to sales, investment and
wucsuaw802UM1 21
transferred proceeds) of that issue, and any replacement proceeds as defined in section 1.148-
1(c)of the Tax Regulations, of that issue.
"Investment"has the meaning set forth in section 1.148-1(b)of the Tax Regulations.
"Nonpurpose Investment" means any investment property,as defined in section 148(b)of
the Code, in which Gross Proceeds of an issue are invested and that is not acquired to carry out
the governmental purposes of that issue.
"Opinion of Bond Counsel" means a written opinion of Fulbright & Jaworski L.L.P. or
any other counsel of recognized national standing in the field of law relating to municipal bonds,
appointed and paid by the District and reasonably satisfactory to and approved by the Trustee.
"Prior Issues" shall refer, separately or collectively as the context shall suggest, to-the
1484-seai€ieates,the 1991 Series B Certificates and the Prior Certificates(but in the case of any
of the foregoing executed and delivered for multiple purposes, only to the portion thereof
allocable pursuant to section 1.148-9(h)(4) of the Tax Regulations to other than refunding
purposes).
"Proceeds," with respect to an issue of governmental obligations, has the meaning set
forth in has the meaning set forth in section 1.148-1(b)of the Tax Regulations(referring to sales,
investment and transferred proceeds,but not replacement proceeds).
"Rebate Amount"has the meaning set forth in section 1.148-1(b)of the Tax Regulations.
"Tax Regulations" means the United States Treasury Regulations promulgated pursuant
to sections 103 and 141 through 150 of the Code.
"Yield" of (i) any Investment has the meaning set forth in section 1.148-5 of the Tax
Regulations and (ii) in respect of the Certificates has the meaning set forth in section 1.1484 of
the Tax Regulations.
.ifieates�means the County cam;.,,-o'atien ElistrlBIS Nes. 1, '_ --"-- 3-of o.-f ^--ige
1991 Series B Certificates"means the County Sanitation DisttietsDistrict Nos. 1,2, 3, 5,
6, 7 and I of Orange County, California Certificates of Participation (Capital Improvement
Program 1990-92 Series B)term certificate due August 1,-204-3.Z I(,,
(b) Exclusion of Interest from Gross Income. The District will take all actions
necessary to establish and maintain the exclusion pursuant to section 103(a) of the Code of
interest on the Certificates from the gross income of the owners thereof for federal income tax
purposes, and will not use, permit the use of, or omit to use Gross Proceeds of the Certificates or
any other amounts (or any property the acquisition, construction or improvement of which is to
be refinanced directly or indirectly with Gross Proceeds) in a manner that if made or omitted,
respectively,would cause the interest on any Certificate to fail to be excluded pursuant to section
103(a)of the Code from the gross income of the owners thereof for federal income tax purposes.
Without limiting the generality of the foregoing, unless and until the until the Trustee receives a
se1-18ec4480263843 r_ 22
written Opinion of Bond Counsel to the effect that failure to comply with such covenant will not
adversely affect the exclusion pursuant to section 103(a) of the Code of interest on any
Certificate from the gross income of the owner thereof, the District shall comply with this
covenant and each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as would not cause any Certificate to
become a "private activity bond" within the meaning of section 141 of the Code and the Tax
Regulations and rulings thereunder, the District shall at all times prior to the payment and
cancellation of the last of the Certificates to be retired:
(i) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Certificates and not use or permit the use of such
Gross Proceeds (including all contractual arrangements with terns different than those
applicable to the general public) or any property acquired, constructed or improved with
such Gross Proceeds or the Gross Proceeds of any Prior Issue in any activity carried on
by any person or entity (including the United States or any agency, department and
instrumentality thereof) other than a state or local government, unless such use is solely
as a member of the general public;and
(ii) does not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Certificates or of any Prior Issue, or any property the acquisition, construction or
improvement of which is to be financed or refinanced directly or indirectly with such
Gross Proceeds, other than taxes of general application within the jurisdiction of the
District or interest earned on investments acquired with such Gross Proceeds pending
application for their intended purposes.
(d) No Private Loan. Except as would not cause any Certificate to become a "private
activity bond" within the meaning of section 141 of the Code and the Tax Regulations and
rulings thereunder, the District shall not use of Gross Proceeds of the Certificates to make or
finance loans to any person or entity other than a state or local government. For purposes of the
foregoing covenant, such Gross Proceeds are considered to be `loaned" to a person or entity if:
(i)property acquired,constructed or improved with such Gross Proceeds is sold or leased to such
person or entity in a transaction that creates a debt for federal income tax purposes; (ii) capacity
in or service from such property is committed to such person or entity under a take-or-pay,
output or similar contract or arrangement; or (iii) indirect benefits of such Gross Proceeds, or
burdens and benefits of ownership of any property acquired, constructed or improved with such
Gross Proceeds, are otherwise transferred in a transaction that is the economic equivalent of a
loan. For purposes of this covenant, the District will treat any transaction constituting a loan of
Gross Proceeds of any of the Prior Issues as resulting in a loan of Gross Proceeds of the
Certificates.
(a) Not to Invest at Higher Yield. Except as would not cause any Certificate to
become an "arbitrage bond" within the meaning of section 148 of the Code and the Tax
Regulations and rulings thereunder, the District will not, at any time prior to the final
cancellation of the last Certificate to be retired,directly or indirectly invest Gross Proceeds of the
901980"48n;¢3143,2,. 23
Certificates in any Investment, if as a result of that investment the yield of any Investment
acquired with Gross Proceeds of the Certificates, whether then held or previously disposed of,
would materially exceed the yield of the Certificates within the meaning of said section 148.
(f) Not Federally Guaranteed. Except to the extent such action or failure to act
would not pursuant to section 149(b) of the Code and the Tax Regulations and rulings
thereunder, adversely affect the exclusion pursuant to section 103(a) of interest on the
Certificates from the gross income of the owners thereof for federal income tax purposes, the
District will not take or omit to take any action that would cause any Certificate to be"federally
guaranteed" within the meaning of section 149(b) of the Code and the Tax Regulations and
rulings thereunder.
(g) Information Report. The District will timely file any information necessary to the
exclusion pursuant to section 103(a) of the Code of interest on the Certificates required by
section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary of the Treasury may prescribe.
(h) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Tax Regulations and rulings thereunder, the District will not at any time prior
to the final cancellation of the last of the Certificates to be retired, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to section 148(f) of the
Code because such transaction results in a smaller profit or a larger loss than would have resulted
if the transaction had been at arm's length and had the yield on the Certificates not been relevant
to either party.
(i) Certificates Satisfy section 149(a). The District represents that none of the Prior
Issues or the Certificates are or will become"hedge bonds"within the meaning of section 149(g)
of the Code. Without limitation of the foregoing,with respect to each of the Prior Issues, (i)(A)
on the date of issuance of that issue the District reasonably expected (based upon its own
knowledge and upon representations made by other governmental persons upon the issuance of
those obligations)that within the three-year period commencing on such date no less than 85%
of the spendable proceeds of that issue would be expended for the governmental purposes thereof
and (B)the District believes and represents that at no time has more than 50%of the proceeds of
that issue been invested in Nonpurpose Investments having a substantially guaranteed yield for a
period of four years or more, and with respect to the application of Proceeds of the Certificates
other than for refunding purposes, (ii)(A) the District will not deliver the Certificates unless on
the date of the issuance of the Certificates it reasonably expects that within the three-year period
commencing on such date of issuance at least 85%of such spendable proceeds of the Certificates
will be expended for the governmental purpose of the Certificates and (B) at no time will more
than 50%of such spendable proceeds of the Certificates be invested in Nonpurpose Investments
having a substantially guaranteed yield for a period of four years or more.
0) Elections. The District hereby directs and authorizes any Authorized
Representative to make elections permitted or required pursuant to the provisions of the Code or
the Tax Regulations, as such Authorized Representative (after consultation with Bond Counsel)
deems necessary or appropriate in connection with the Certificates, in the Tax Certificate relating
to the Certificates or similar or other appropriate certificate, form or document.
aaws�wa+8c1a2av z 24
(k) Tax Certificate. The District agrees to execute and deliver in connection with the
execution and delivery of the Certificates a Tax Certificate as to Arbitrage and the Provisions of
Sections 141-150 of the Internal Revenue Code of 1986, or similar document containing
additional representations and covenants pertaining to the exclusion of interest with respect to
the Certificates from the gross income of the owners thereof for federal income tax purposes(the
"Tax Certificate"), which representations and covenants are incorporated as though expressly set
forth herein.
Section 6.09. Continuing Disclosure. Each of the District and the Trustee will comply
with and carry out all of the provisions of the Continuing Disclosure Agreement applicable to it.
Notwithstanding any other provision of this Trust Agreement, failure of the District or the
Trustee to comply with the Continuing Disclosure Agreement shall not be considered an Event
of Default; provided, however, the Trustee may (and, at the request of any Participating
Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding
Certificates and upon being indemnified to its reasonable satisfaction, shall) or any Owner or
Beneficial Owner of Certificates may take such actions as may be necessary and appropriate to
compel performance, including seeking mandate or specific performance by court order.
Section 6.10. Further Assurances. The District will promptly execute and deliver or
cause to be executed and delivered all such other and further assurances, documents or
instruments and promptly do or cause to be done all such other and further things as may be
necessary or reasonably required in order to carry out the purposes and intentions of this Trust
Agreement and for preserving and protecting the rights and interests of the Owners.
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01. Action upon Event of Default. An Event of Default under the Installment
Purchase Agreement shall constitute an Event of Default hereunder and an Event of Default
under the Master Agreement shall constitute an Event of Default hereunder. The Trustee may
give notice, as assignee of the Corporation, of an Event of Default under the Installment
Purchase Agreement to the District, and shall do so if directed to do so by the Owners of not less
than 5% of the aggregate principal evidenced by Certificates then Outstanding. In each and
every case during the continuance of an Event of Default, the Trustee may and, at the direction
of the Owners of not less than a majority of the aggregate principal evidenced by Certificates
then Outstanding, shall, upon notice in writing to the District and the Corporation (a) exercise
any of the remedies granted to the Corporation under the Installment Purchase Agreement, (b)
exercise any of the remedies granted to the Trustee under the Master Agreement, and (c) take
whatever action at law or in equity may appear necessary or desirable to enforce its rights
pursuant to this Trust Agreement, the Installment Purchase Agreement or the Master Agreement
or to protect and enforce any of the rights vested in the Trustee or the Owners by this Trust
Agreement, the Certificates, the Installment Purchase Agreement or the Master Agreement,
either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement or for the enforcement of any other legal or equitable right, including
any one or more of the remedies set forth in Section 9.02 hereof.
90199094.480263aQ Z— 25
Section 7.02. Other Remedies of the Trustee. Subject to the provisions of Section 7.01
hereof,the Trustee shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce
its rights against the Corporation or the District or any member, director, officer or employee
thereof, and to compel the Corporation or the District or any such member, director, officer or
employee to perform or carry out its or his or her duties under law and the agreements and
covenants required to be performed by it or him or her contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Trustee; or
(c) by suit in equity upon the happening of any Event of Default hereunder to require
the Corporation and the District to account as the trustee of an express trust.
Section 7.03. Non-Waiver. A waiver of any default or breach of duty or contract by the
Trustee or the Owners shall not affect any subsequent default or breach of duty or contract or
impair any rights or remedies on any such subsequent default or breach of duty or contract. No
delay or omission by the Trustee or the Owners to exercise any right or remedy accruing upon
any default or breach of duty or contract shall impair any such right or remedy or shall be
construed to be a waiver of any such default or breach of duty or contract or an acquiescence
therein, and every right or remedy conferred upon the Trustee or the Owners by law or by this
Article may be enforced and exercised from time to time and as often the Trustee shall deem
expedient.
If any action, proceeding or suit to enforce any right or to exercise any remedy is
abandoned or determined adversely to the Trustee or any Owner, then subject to any adverse
determination,the Trustee,such Owner,the Corporation and the District shall be restored to their
former positions, rights and remedies as if such action, proceeding or suit had not been brought
or taken.
Section 7.04. Remedies Not Exclusive. Subject to the provisions of Section 7.01
hereof, no remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of
any other remedy, and each such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing in law or in equity or by statute or
otherwise and may be exercised without exhausting and without regard to any other remedy
conferred by any law. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent or subsequent assertion or employment of any other
appropriate right or remedy.
Section 7.05. Application of Amounts After Default. All damages or other payments
received by the Trustee for the enforcement of any rights and powers of the Trustee under this
Article shall be deposited into the Installment Payment Fund and as soon as practicable thereafter
applied:
(a) to the payment of all amounts due the Trustee under Section 8.03 hereof;
89r'r&W SOX3847.2_ 26
(b) unless the unpaid Installment Payments, and the interest thereon, shall have
become,and shall remain, immediately due and payable pursuant to the Master Agreement:
(i) to the payment of all amounts then due for interest evidenced by the
Certificates, in respect of which, or for the benefit of which, money has been collected
(other than Certificates which have become payable prior to such Event of Default and
money for the payment of which is held by the Trustee), ratably without preference or
priority of any kind, according to the amounts of interest evidenced by such Certificates
due and payable; and
(ii) to the payment of all amounts then due for principal evidenced by the
Certificates, in respect of which, or for the benefit of which, money has been collected
(other than Certificates which have become payable prior to such Event of Default and
money for the payment of which is held by the Trustee), ratably without preference or
priority of any kind, according to the amounts of principal evidenced by such Certificates
due and payable.
(c) if the unpaid Installment Payments, and the interest thereon, shall have become,
and shall remain, immediately due and payable pursuant to the Master Agreement, to the
payment of all amounts then due for principal and interest evidenced by the Certificates and, if
the amount available therefor shall not be sufficient to pay in full the whole amount so due and
unpaid, then to the payment thereof ratably, without preference or priority of principal over
interest, or of interest over principal, or of any installment of interest over any other installment
of interest, or of any Certificate over any other Certificate,to the persons entitled thereto without
any discrimination or preference.
Section 7.06. Trustee May Enforce Claims Without Possession of Certificates. All
rights of action and claims under this Trust Agreement or the Certificates may be prosecuted and
enforced by the Trustee without the possession of any of the Certificates or the production
thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners of
the Certificates in respect of which such judgment has been recovered.
Section 7.07. Limitation on Suits. No Owner shall have any right to institute any
proceeding,judicial or otherwise,with respect to this Trust Agreement, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless (a) such Owner shall have
previously given written notice to the Trustee of a continuing Event of Default hereunder,(b)the
Owners of not less than a majority of the aggregate principal evidenced by Certificates then
Outstanding shall have made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder, (c) such Owner or Owners shall
have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities to be incurred in compliance with such request, (d) the Trustee for 60
days after its receipt of such notice, request and offer of indemnity shall have failed to institute
any such proceedings,and (e)no direction inconsistent with such written request shall have been
given to the Trustee during such 60-day period by the Owners of a majority of the aggregate
89198044&9267$1)1 27
principal evidenced by Certificates then Outstanding; it being understood and intended that no
one or more Owners of Certificates shall have any right in any manner whatever by virtue of, or
by availing of, any provision of this Trust Agreement to affect, disturb or prejudice the rights of
any other Owner of Certificates, or to obtain or seek to obtain priority or preference over any
other Owner or to enforce any right under this Trust Agreement, except in the manner herein
provided and for the equal and ratable benefit of all the Owners of Certificates.
Section 7.08. No Liability by the Corporation to the Owner. Except as expressly
provided herein, the Corporation shall not have any obligation or liability to the Owners with
respect to the payment when due of the Installment Payments, and the interest thereon, by the
District,or with respect to the performance by the District of the other agreements and covenants
required to be performed by it contained in the Installment Purchase Agreement, the Master
Agreement or herein,or with respect to the performance by the Trustee of any right or obligation
required to be performed by it contained herein.
Section 7.09. No Liability by the District to the Owners. Except for the payment
when due of the Installment Payments,and the interest thereon,and the performance of the other
agreements and covenants required to be performed by it contained in the Installment Purchase
Agreement,the Master Agreement or herein,the District shall not have any obligation or liability
to the Owners with respect to this Tmst Agreement or the preparation, execution, delivery or
transfer of the Certificates or the disbursement of the Installment Payments, and the interest
thereon, by the Trustee to the Owners, or with respect to the performance by the Trustee of any
right or obligation required to be performed by it contained herein.
Section 7.10. No Liability of the Trustee to the Owners. Except as expressly provided
herein, the Trustee shall not have any obligation or liability to the Owners with respect to the
payment when due of the Installment Payments, and the interest thereon, by the District,or with
respect to the performance by the Corporation or the District of the other agreements and
covenants required to be performed by them, respectively contained in the Installment Purchase
Agreement or herein.
ARTICLE VIII
THE TRUSTEE
Section 8.01. Employment of the Trustee; Duties. The Corporation and the District
hereby appoint and employ the Trustee to receive, deposit and disburse the Installment
Payments, and the interest thereon, to prepare, execute, deliver and transfer the Certificates and
to perform the other functions contained herein, all in the manner provided herein and subject to
the conditions and terms hereof. By executing and delivering this Trust Agreement, the Trustee
accepts the appointment and employment hereinabove referred to and accepts the rights and
obligations of the Trustee provided herein, subject to the conditions and terms hereof. Other
than when an Event of Default hereunder has occurred and is continuing,the Trustee undertakes
to perform such duties and only such duties as are specifically set forth in this Trust Agreement,
and no implied covenants or obligations shall be read into this Trust Agreement against the
Trustee. In case an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Trust Agreement, and use the same degree of
ssweecas yz 28
care and skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
Section 8.02. Removal and Resignation of the Trustee. The Corporation and the
District may, by an instrument in writing, remove the Trustee initially a party hereto and any
successor thereto unless an Event of Default shall have occurred and then be continuing, and
shall remove the Trustee initially a party hereto and any successor thereto if at any time (a)
requested to do so by an instrument or concurrent instruments in writing signed by the Owners of
a majority of the aggregate principal evidenced by the Certificates at the time Outstanding (or
their attorneys duly authorized in writing), or (b) the Trustee shall cease to be eligible in
accordance with the following sentence,and shall appoint a successor Trustee. The Trustee shall
be a bank having trust powers or a trust company in good standing in or incorporated under the
laws of the United States or any state thereof, having (or if such bank or trust company is a
member of a bank holding company system, its parent bank holding company shall have) a
combined capital and surplus of at least $75,000,000, and be subject to supervision or
examination by federal or state banking authorities. If such bank or trust company publishes a
report of condition at least annually,pursuant to law or to the requirements of any supervising or
examining authority above referred to, then for the purposes of this Section the combined capital
and surplus of such bank or trust company shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
The Trustee may at any time resign by giving written notice of such resignation to the
Corporation and the District and by giving notice, by first class mail, postage prepaid, of such
resignation to the Owners at their addresses appearing on the registration books maintained by
the Trustee. Upon receiving such notice of resignation, the Corporation and the District shall
promptly appoint a successor Trustee by an instroment in writing; provided, however,that in the
event the District and the Corporation do not appoint a successor Trustee within 30 days
following receipt of such notice of resignation, the resigning Trustee may, at the expense of the
District, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any
resignation or removal of a Trustee and appointment of a successor Trustee shall become
effective only upon acceptance of appointment by the successor Trustee. Any successor Trustee
appointed under this Trust Agreement shall signify its acceptance of such appointment by
executing and delivering to the District and the Corporation and to its predecessor Trustee a
written acceptance thereof, and thereupon such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the moneys, estates, properties, rights, powers,
trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named
Trustee herein; but,nevertheless,at the written request of the District or of the successor Trustee,
such predecessor Trustee shall execute and deliver any and all instruments of conveyance or
further assurance and do such other things as may reasonably be required for more fully and
certainly vesting in and confirming to such successor Trustee all the right, title and interest of
such predecessor Trustee in and to any property held by it under this Trust Agreement and shall
pay over, transfer, assign and deliver to the successor Trustee any money or other property
subject to the trusts and conditions herein set forth.
Any corporation, association or agency into which the Trustee may be converted or
merged, or with which it may be consolidated, or to which it may sell or transfer its corporate
trust business and assets as a whole or substantially as a whole, or any corporation or association
8p/9ABWF,-0&12638<31 29
resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party,
provided that such entity meets the combined capital and surplus requirements of this Section,
ipso facto, shall be and become successor trustee under this Trust Agreement and vested with all
the trusts, powers, discretions, immunities, privileges and all other matters as was its
predecessor, without the execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.03. Compensation and Indemnification of the Trustee. The District shall
from time to time, subject to any written agreement then in effect with the Trustee, pay the
Trustee reasonable compensation for all its services rendered hereunder and reimburse the
Trustee for all its reasonable advances and expenditures (which shall not include "overhead
expenses" except as such expenses are included as a component of the Trustee's stated annual
fees or disclosed transaction fees) hereunder, including but not limited to advances to and
reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other
experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys
retained by the Trustee, employed by it in the exercise and performance of its rights and
obligations hereunder; provided, however, that the Trustee shall not have any lien for such
compensation or reimbursement against any moneys held by it in any of the funds or accounts
established hereunder. The Trustee may take whatever legal actions are lawfully available to it
directly against the Corporation or the District.
Except as otherwise expressly provided herein, no provision of this Trust Agreement
shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of any of its rights or powers
hereunder.
The District, to the extent permitted by law, agrees to indemnify and save the Trustee, its
directors, officers, employees and agents harmless against any liabilities which it may incur in
the exercise and performance of its powers and duties hereunder, including but not limited to
costs and expenses incurred in defending against any claim or liability, which are not due to its
negligence or willful misconduct.
Section 8.04. Protection of the Trustee. The Trustee shall be protected and shall incur
no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent,
notice, request, requisition, resolution, statement, waiver or other paper or document which it
shall in good faith believe to be genuine and to have been adopted, executed or delivered by the
proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty
to make any investigation or inquiry as to any statements contained or matters referred to in any
such instrument, but may accept and rely upon the same as conclusive evidence of the truth and
accuracy of such statements. The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Trust Agreement at the request or direction of any of the
Owners of the Certificates pursuant to this Trust Agreement, unless such Owners shall have
offered to the Trustee security or indemnity, reasonably satisfactory to the Trustee, against the
reasonable costs, expenses and liabilities which might be incurred by it in compliance with such
request or direction. The Trustee may consult with counsel, who may be counsel to the
Corporation or the District, with regard to legal questions, and the opinion of such counsel shall
suiasa 4 u;D2s3841z 30
• be full and complete authorization and protection in respect to any action taken or suffered by it
hereunder in good faith in accordance therewith.
The Trustee shall not be responsible for the sufficiency of the Certificates or the
Installment Purchase Agreement, or of the assignment made to it hereunder, or for statements
made in the preliminary or final official statement relating to the Certificates.
The Trustee shall not be required to take notice or be deemed to have notice of any
default or Event of Default hereunder, except failure of any of the payments to be made to the
Trustee required to be made hereunder or under the Installment Purchase Agreement, unless the
Trustee shall be specifically notified in writing of such default or Event of Default by the
District, the Corporation or the Owners of not less than 5%of the aggregate principal evidenced
by the Certificates then Outstanding.
Whenever in the administration of its rights and obligations hereunder the Trustee shall
deem it necessary or desirable that a matter be proved or established prior to taking or suffering
any action hereunder, such matter(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a Written Certificate of
the District or a Written Certificate of the Corporation, and such certificate shall be full warrant
to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof,
but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may
require such additional evidence as it deems reasonable.
The Trustee may buy, sell, own, hold and deal in any of the Certificates and may join in
any action which any Owner may be entitled to take with like effect as if the Trustee were not a
party hereto. The Trustee, either as principal or agent, may also engage in or be interested in any
financial or other transaction with the Corporation or the District, and may act as agent,
depository or trustee for any committee or body of Owners or of owners of obligations of the
Corporation or the District as freely as if it were not the Trustee hereunder.
The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers
hereof and perform any rights and obligations required of it hereunder by or through agents,
attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust
and its rights and obligations hereunder, and the Trustee shall not be answerable for the
negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable
care;provided, however, that in the event of any negligence or misconduct of any such attorney,
agent or receiver, the Trustee shall diligently pursue all remedies of the Trustee against such
agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it
in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent
facts.
The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or
for anything whatsoever in connection with the funds established hereunder, except only for its
own willful misconduct,negligence or breach of an obligation hereunder.
The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which
the Corporation or the District is a party and which, in the opinion of the Trustee and its counsel,
sanaecaagp26l8AI 2 31
affects the Certificates or the security therefor, and shall do so if requested in writing by the
Owners of at least S% of the aggregate principal evidenced by Certificates then Outstanding,
provided the Trustee shall have no duty to take such action unless it has been indemnified to its
reasonable satisfaction against all risk or liability arising from such action.
ARTICLE IX
AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT
Section 9.01. Amendment or Supplement. (a) This Trust Agreement and the rights
and obligations of the Corporation, the District, the Owners and the Trustee hereunder may be
amended or supplemented at any time by an amendment hereof or supplement hereto which shall
become binding when the prior written consents of the Owners of a majority of the aggregate
principal evidenced by the Certificates then Outstanding,exclusive of Certificates disqualified as
provided in Section 9.02 hereof, are filed with the Trustee. No such amendment or supplement
shall (i) extend the stated Principal Payment Date of any Certificate or reduce the rate of interest
evidenced thereby or extend the time of payment of such interest or reduce the amount of
principal evidenced thereby, (ii) reduce the percentage of Owners whose consent is required for
the execution of any amendment hereof or supplement hereto without the prior written consent of
the Owners of all Certificates then Outstanding, (iii) modify any of the rights or obligations of
the Trustee without the prior written consent of the Trustee, or (iv) amend this Section without
the prior written consent of the Owners of all Certificates then Outstanding.
(b) This Trust Agreement and the rights and obligations of the Corporation, the
District, the Owners and the Trustee hereunder may also be amended or supplemented at any
time by an amendment hereof or supplement hereto which shall become binding upon execution,
without the written consents of any Owners, but only to the extent permitted by law and only for
any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms required by the
Corporation or the District to be observed or performed herein other agreements,
conditions, covenants and terns thereafter to be observed or performed by the
Corporation or the District, or to surrender any right or power reserved herein to or
conferred herein on the Corporation or the District;
(ii) to make such provisions for the purpose of curing any ambiguity or of
correcting,curing or supplementing any defective provision contained herein or in regard
to questions arising hereunder which the Corporation or the District may deem desirable
or necessary and not inconsistent herewith;
(iii) to make such additions,deletions or modifications as may be necessary or
appropriate to assure the exclusion from gross income for federal income tax purposes of
interest evidenced by the Certificates;or
(iv) for any other reason, provided such amendment or supplement does not
adversely affect the rights or interests of the Owners.
aewxrna.+=61912_ 32
Section 9.02. Disaualified Certificates. Certificates owned or held by or for the
account of the District (but excluding Certificates held in any pension or retirement fund of the
District) shall not be deemed Outstanding for the purpose of any consent or other action or any
calculation of Outstanding Certificates provided in this Article, and shall not be entitled to
consent to or take any other action provided in this Article, and the Trustee may adopt
appropriate regulations to require each Owner, before his consent provided for herein shall be
deemed effective, to reveal if the Certificates as to which such consent is given are disqualified
as provided in this Section.
Section 9.03. Endorsement or Replacement of Certificates After Amendment or
Supplement. After the effective date of any action taken as hereinabove provided in this
Article, the Trustee may determine that the Certificates may bear a notation by endorsement in
faun approved by the Trustee as to such action, and in that case upon demand of the Owner of
any Outstanding Certificate and presentation of such Certificate for such purpose at the Principal
Office a suitable notation as to such action shall be made on such Certificate. If the Trustee shall
receive an Opinion of Counsel advising that new Certificates modified to conform to such action
are necessary, modified Certificates shall be prepared, and in that case upon demand of the
Owner of any Outstanding Certificates such new Certificates shall be exchanged at the Principal
Office without cost to each Owner for Certificates then Outstanding upon surrender of such
Outstanding Certificates.
Section 9.04. Amendment by Mutual Consent. The provisions of this Article shall not
prevent any Owner from accepting any amendment as to the particular Certificates owned by
such Owner,provided that due notation thereof is made on such Certificates.
ARTICLE X
DEFEASANCE
Section 10.01. Discharge of Certificates and Trust Agreement. (a) If the Trustee
shall pay or cause to be paid or there shall otherwise be paid (i)to the Owners of all Outstanding
Certificates the interest and principal evidenced thereby at the times and in the manner stipulated
herein and therein, and (ii) all other amounts due hereunder and under the Installment Purchase
Agreement,then such Owners shall cease to he entitled to the pledge of and lien on the amounts
on deposit in the funds and accounts established hereunder, as provided herein, and all
agreements and covenants of the Corporation, the District, and the Trustee to such Owners
hereunder shall thereupon cease, terminate and become void and shall be discharged and
satisfied.
(b) Any Outstanding Certificate shall be deemed to have been paid within the
meaning and with the effect expressed in this Section when the whole amount of the principal,
premium, if any, and interest evidenced by such Certificate shall have been paid or when (i)
[Reserved], (ii) there shall be on deposit with the Trustee, moneys, or Government Obligations,
or any combination thereof, the principal of and the interest on which when due,and without any
reinvestment thereof, will provide moneys which shall be sufficient to pay when due the
principal,premium, if any, and interest evidenced by such Certificate and due and to become due
on or prior to its stated Principal Payment Date, and (iii) if the stated Principal Payment Date of
M-APIAsn nag RQI.2 33
such Certificate will not occur, and said Certificate is not to be prepaid, within the next
succeeding 60 days, the District shall have given the Trustee irrevocable instructions to give
notice, as soon as practicable to the Owner of such Certificate, stating that the deposit of moneys
or Government Obligations required by clause (ii) of this subsection has been made with the
Trustee and that such Certificate, or portion thereof, is deemed to have been paid in accordance
with this Section and stating such Principal Payment Date upon which moneys are to be
available for the payment of the principal, premium, if any, and interest evidenced by said
Certificate,or portion thereof.
Neither the moneys nor the Government Obligations deposited with the Trustee pursuant
to this Section nor principal or interest payments on any such Government Obligations shall be
withdrawn or used for any purpose other than, and shall he held in trust for and pledged to, the
payment of the principal, premium, if any, and interest evidenced by said Certificate, or portions
thereof. If payment of less than all of the Certificates is to be provided for in the manner and
with the effect expressed in this Section, the Trustee or the District, as applicable, shall select
such Certificates, or portions thereof in the principal amounts designated to the Trustee by the
District.
(c) After the payment of all the interest and principal evidenced by all Outstanding
Certificates and all other amounts due hereunder and under the Installment Purchase Agreement
as provided in this Section, the Trustee shall execute and deliver to the Corporation and the
District all such instruments as may be necessary or desirable to evidence the discharge and
satisfaction of this Trust Agreement, the Trustee shall pay over or deliver to the District all
moneys or securities held by it pursuant hereto which are not required for the payment of the
interest and principal evidenced by such Certificates and all other amounts due hereunder and
under the Installment Purchase Agreement.
(d) Prior to any defeasance becoming effective under this Article, the District shall
cause to be delivered (i) an executed copy of a report, addressed to the Trustee and the District,
in form and in substance acceptable to the Trustee and the District, of a nationally recognized
certified public accountant, or firm of such accountants, verifying that the Government
Obligations and cash, if any, satisfy the requirements of clause (ii) of subsection (b) of this
Section (a"Verification'),(ii) a copy of the escrow deposit agreement entered into in connection
with such defeasance, which escrow deposit agreement shall provide that no substitution of
Government Obligations shall be permitted except with other Government Obligations and upon
delivery of a new Verification and no reinvestment of Government Obligations shall be
permitted except as contemplated by the original Verification or upon delivery of a new
Verification, and (iii) a copy of an Opinion of Counsel, dated the date of such defeasance and
addressed to the Trustee and the District, in form and in substance acceptable to the Trustee and
the District, to the effect that such Certificates have been paid within the meaning and with the
effect expressed in this Trust Agreement, all agreements and covenants of the Corporation, the
District and the Trustee to the Owners of such Certificates under this Trust Agreement have
ceased,terminated and become void and have been discharged and satisfied.
Section 10.02. Unclaimed Moneys. Any moneys held by the Trustee in trust for the
payment and discharge of the interest or principal evidenced by any of the Certificates which
remain unclaimed for two years after the date when such interest or principal evidenced by such
8019ewa4ec2618432 34
Certificates have become payable, if such moneys were held by the Trustee at such date, or for
two years after the date of deposit of such moneys if deposited with the Trustee after the date
when the interest and principal evidenced by such Certificates have become payable, shall be
repaid by the Trustee to the District as its absolute property free from trust, and the Trustee shall
thereupon be released and discharged with respect thereto and the Owners shall look only to the
District for the payment of the interest and principal evidenced by such Certificates.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Benefits of Trust Agreement. Nothing contained herein, expressed or
implied, is intended to give to any Person other than the Corporation, the District, the Trustee
and the Owners any claim, remedy or right under or pursuant hereto, and any agreement,
condition, covenant or term required herein to be observed or performed by or on behalf of the
Corporation or the District shall be for the sole and exclusive benefit of the Trustee and the
Owners.
Section 11.02. Successor Deemed Included in all References to Predecessor.
Whenever the Corporation, the District or the Trustee, or any officer thereof, is named or
referred to herein, such reference shall be deemed to include the successor to the powers, duties
and functions that are presently vested in the Corporation, the District or the Trustee, or such
officer, and all agreements, conditions, covenants and terms required hereby to be observed or
performed by or on behalf of the Corporation, the District or the Trustee, or any officer thereof,
shall bind and inure to the benefit of the respective successors thereof whether so expressed or
not.
Section 11.03. Execution of Documents by Owners. Any declaration, request or other
instrument which is permitted or required herein to be executed by Owners may be in one or
more instruments of similar tenor and may be executed by Owners in person or by their attorneys
appointed in writing. The fact and date of the execution by any Owner or his attorney of any
declaration, request or other instrument or of any writing appointing such attorney may be
proved by the certificate of any notary public or other officer authorized to take
acknowledgments of deeds to be recorded in the state or territory in which he purports to act that
the Person signing such declaration, request or other instrument or writing acknowledged to him
the execution thereof,or by an affidavit of a witness of such execution duly swom to before such
notary public or other officer, or by such other proof as the Trustee may accept which it may
deem sufficient.
The ownership of any Certificates and the amount, payment date, number and date of
owning the same may be proved by the registration books maintained by the Trustee pursuant to
the provisions of Section 2.07 hereof.
Any declaration, request or other instrument in writing of the Owner of any Certificate
shall bind all future Owners of such Certificate with respect to anything done or suffered to be
done by the Corporation,the District or the Trustee in good faith and in accordance therewith.
sewsavcssa�s3&t3,z 35
Section 11.04. Waiver of Personal Liability. Notwithstanding anything contained
herein to the contrary,no member, officer or employee of the District or the Corporation shall be
individually or personally liable for the payment of any moneys, including without limitation,the
interest or principal evidenced by the Certificates, but nothing contained herein shall relieve any
member, officer or employee of the District or the Corporation from the performance of any
official duty provided by any applicable provisions of law, by the Installment Purchase
Agreement or hereby.
Section 11.05. Acquisition of Certificates by District. All Certificates acquired by the
District, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for
cancellation.
Section 11.06. Content of Certificates. Every Written Certificate of the District and
every Written Certificate of the Corporation with respect to compliance with any agreement,
condition, covenant or term contained herein shall include (a)a statement that the Person making
or giving such certificate has read such agreement, condition, covenant or term and the
definitions herein relating thereto, (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in such certificate are based,
(c) a statement that, in the opinion of the signer, the signer has made or caused to be made such
examination or investigation as is necessary to enable the signer to express an informed opinion
as to whether or not such agreement, condition, covenant or term has been complied with, and
(d) a statement as to whether, in the opinion of the signer, such agreement, condition, covenant
or teem has been complied with.
Any Written Certificate of the District and any Written Certificate of the Corporation
may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless the
Person making or giving such certificate knows that the Opinion of Counsel with respect to the
matters upon which each Person's certificate may be based, as aforesaid, is erroneous, or in the
exercise of reasonable care should have known that the same was erroneous. Any Opinion of
Counsel may be based, insofar as it relates to factual matters, upon information which is in the
possession of the District or the Corporation upon a representation by an officer or officers of the
District or the Corporation, as the case may be, unless the counsel executing such Opinion of
Counsel knows that the representation with respect to the matters upon which such counsel's
opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should
have known that the same was erroneous.
Section 11.07. Funds and Accounts. Any fund or account required to be established
and maintained herein by the Trustee may be established and maintained in the accounting
records of the Trustee either as an account or a fund, and may, for the purposes of such
accounting records, any audits thereof and any reports or statements with respect thereto, be
treated either as an account or a fund, but all such records with respect to all such funds and
accounts shall at all times be maintained in accordance with sound accounting practice and with
due regard for the protection of the security of the Certificates and the rights of the Owners. The
Trustee may establish such funds and accounts as it deems necessary to perform its obligations
hereunder.
80 1vswa.4e0243813.2. 36
Trustee may commingle any of the moneys held by it hereunder for investment purposes
only;provided,however,that the Trustee shall account separately for the moneys in each fund or
account established pursuant to this Trust Agreement.
Section 11.08. Article and Section Headings. Gender and References. The singular
form of any word used herein, including the terms defined in Section 1.01 hereof, shall include
the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of
any gender shall include correlative words of the other genders. The headings or titles of the
several Articles and Sections hereof and the table of contents appended hereto shall be solely for
convenience of reference and shall not affect the meaning, construction or effect hereof. All
references herein to "Articles," "Sections," subsections or clauses are to the corresponding
Articles, Sections, subsections or clauses hereof, and the words "hereby," "herein," "hereof,"
"hereto," "herewith," "hereunder" and other words of similar import refer to this Trust
Agreement as a whole and not to any particular Article, Section, subsection or clause thereof.
Section 11.09. Partial Invalidity. If any one or more of the agreements, conditions,
covenants or terms required herein to be observed or performed by or on the part of the
Corporation, the District or the Trustee shall be contrary to law, then such agreement or
agreements, such condition or conditions, such covenant or covenants or such term or terms shall
be null and void to the extent contrary to law and shall be deemed separable from the remaining
agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof
or of the Certificates, and the Owners shall retain all the benefit,protection and security afforded
to them under any applicable provisions of law. The Corporation, the District and the Trustee
hereby declare that they would have executed this Trust Agreement, and each and every Article,
Section, paragraph, subsection, sentence, clause and phrase hereof and would have authorized
the execution and delivery of the Certificates pursuant hereto irrespective of the fact that any one
or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the
application thereof to any Person or circumstance may be held to be unconstitutional,
unenforceable or invalid.
Section 11.10. California Law. This Trust Agreement shall be governed by and
construed in accordance with the laws of the State.
Section 11.11. Notices. Any written notice, statement, demand, consent, approval,
authorization, offer, designation, request or other communication to be given hereunder shall be
given to the party entitled thereto at its address set forth below, or at such other address as such
party may provide to the other parties in writing from time to time,namely:
If to the District: Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, California 92708
Attention: Director of Finance and Administrative Services
8e19sen4.402a"J.2 37
If to the Corporation: Orange County Sanitation District Financing Corporation
c/o Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley,California 92708
Attention: Treasurer
If to the Trustee: U.S. Bank National Association
633 West Fifth Street, 24th Floor
Los Angeles,California 90071
Attention: Corporate Trust Services
Each such notice, statement,demand, consent,approval, authorization, offer,designation,
request or other communication hereunder shall be deemed delivered to the party to whom it is
addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic
communication, whether by telex, telegram or telecopier, upon the sender's receipt of an
appropriate answerback or other written acknowledgment, (c) if given by registered or certified
mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours
after such notice is deposited with the United States mail, (d) if given by overnight courier, with
courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any
other means, upon delivery at the address specified in this Section.
Section 11.12. Effective Date. This Trust Agreement shall become effective upon its
execution and delivery.
Section 11.13. Execution in Counterparts. This Trust Agreement may be
simultaneously executed in several counterparts, each of which shall be deemed an original, and
all of which shall constitute but one and the same instrument.
84%48 182sM.2_ 38
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be
executed by their respective officers thereunto duly authorized, all as of the day and year first
written above.
1 C RANK NATIONAL ASSOCIATION
..''Ta�aofcc
.Ah9F:....A /1C1.......
ORANGE COUNTY SANITATION DISTRICT
FINANCING CORPORATION
By:
Treasurer
ORANGE COUNTY SANITATION DISTRICT
By:
Chair of the Board of Directors
(SEAL)
Attest:
By:
Secretary of the Board of Directors
U.S. BANK NATIONAL ASSOCIATION.
as Trustee
By::. _.
Authorized Officer
80-994 d:4SO263102_ 39
EXHIBIT A
FORM OF CERTIFICATE
No. R—_
Unless this Certificate is presented by an authorized representative of The Depository
Trust Company to the Trustee for registration of transfer, exchange or payment, and any
Certificate executed and delivered is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company and any payment
is made to Cede & Co., ANY TRANSFER,PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the Registered
Owner hereof,Cede&Co., has an interest herein.
ORANGE COUNTY SANITATION DISTRICT
REFUNDING CERTIFICATE OF PARTICIPATION
SERIES2008AB
PRINCIPAL
PAYMENT DATE INTEREST RATE DATED DATE CUSIP
,2008
REGISTERED OWNER: Cede&Co.
PRINCIPAL AMOUNT: DOLLARS
THIS IS TO CERTIFY that the Registered Owner of this Certificate of Participation
(this "Certificate"), as identified above, is the owner of a direct, fractional undivided interest in
certain installment payments ("Installment Payments'), and the interest thereon, payable under
and pursuant to the Installment Purchase Agreement, dated as of MaySS 1� 1, 2008 (the
"Installment Purchase Agreement'), by and between the Orange County Sanitation District (the
"District'), a county sanitation district organized and existing under the laws of the State of
California, and the Orange County Sanitation District Financing Corporation (the
"Corporation'), a nonprofit public benefit corporation organized and existing under the laws of
the State of California. Certain of the rights of the Corporation under the Installment Purchase
Agreement, including the right to receive the Installment Payments, and the interest thereon,
have been assigned without recourse by the Corporation to U.S. Bank National Association, a
national banking association duly organized and existing under the laws of the United States of
America, m trustee (the "Trustee') under the Trust Agreement, dated as of Mey em�ff I,
2008 (the "Trust Agreement'), by and among the Trustee, the District and the Corporation.
Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Trust
Agreement.
so-9sexAsn:63843 r A-1
The District has executed and delivered the Master Agreement for District Obligations,
dated as of August 1, 2000 (the "Master Agreement'), by and between the District and the
Corporation, pursuant to which the District establishes and declares the conditions and terms
upon which obligations such as the Installment Purchase Agreement, and the Installment
Payments and the interest thereon, will be incurred and secured.
This Certificate is one of the duly authorized Orange County Sanitation District
Refunding Certificates of Participation, Series 2008AJa (the "Certificates") evidence principal in
the aggregate amount of $77 44S00& .000.000. executed pursuant to the terms of the Trust
Agreement. The Certificates evidence direct, fractional undivided interests in the Installment
Payments, and the interest thereon, payable under the Installment Purchase Agreement. The
Certificates are executed and delivered to refinance certain improvements to the wastewater
collection,treatment and disposal facilities of the District (the"Wastewater System"),to finance
a reserve fund for the Certificates, to pay the costs of issuance incurred in connection therewith
and to pay certain other related costs.
The Installment Payments,and the interest thereon, are to be paid by the District pursuant
to the Installment Purchase Agreement in consideration for the purchase of certain improvements
to the Wastewater System and for the other agreements and obligations undertaken by the
Corporation under the Installment Purchase Agreement and the Trust Agreement.
The income and revenue received by the District from the operation of the Wastewater
System remaining after the payment of maintenance and operation or ownership costs of the
Wastewater System (as more fully described in the Installment Purchase Agreement, the "Net
Revenues") are, pursuant to the Master Agreement, pledged to the payment of the Senior
Obligations and Reimbursement Obligations with respect to Senior Obligations (as such terms
are defined in the Master Agreement).
The Installment Purchase Agreement constitutes a Senior Obligation and, as such, shall
be subject to the provisions of the Master Agreement, and shall be afforded all of the advantages,
benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement.
The Installment Purchase Agreement is payable on a parity with the other existing Senior
Obligation. The District may at any time incur Senior Obligations in addition to existing Senior
Obligations and the Installment Purchase Agreement payable from Net Revenues as provided in
the Master Agreement on a parity with all other Senior Obligations theretofore incurred,but only
subject to the conditions and upon compliance with the procedures set forth in the Master
Agreement.
The District is not required to advance any moneys derived from any source of income
other than Net Revenues and the other funds provided in the Installment Purchase Agreement for
the payment of the Installment Payments, and the interest thereon, and other payments required
to be made by it under the Installment Purchase Agreement, or for the performance of any
agreements or covenants required to be performed by it contained therein. The obligation of the
District to pay the Installment Payments, and the interest thereon, and other payments required to
be made by it under the Installment Purchase Agreement is a special obligation of the District
payable, in the manner provided in the Installment Purchase Agreement, solely from such Net
Revenues and other funds provided for therein, and does not constitute a debt of the District or of
awes0wr1020w, A-2
the State of California, or of any political subdivision thereof, in contravention of any
constitutional or statutory debt limitation or restriction.
Reference is hereby made to the Master Agreement,the Installment Purchase Agreement
and to the Trust Agreement and any and all amendments thereof and supplements thereto for a
description of the terms under which the District's obligation to pay the Installment Payments,
and the interest thereon, is incurred, the Certificates are executed and delivered, the provisions
with regard to the nature and extent of the Net Revenues, and the rights of the Owners of the
Certificates. All of the terms of the Master Agreement,the Installment Purchase Agreement and
the Trust Agreement are hereby incorporated herein. The Trust Agreement constitutes a contract
among the District, the Corporation and the Trustee for the benefit of the Owners of the
Certificates, to all the provisions of which the Owner of this Certificate, by acceptance hereof,
agrees and consents.
The Registered Owner of this Certificate is entitled to receive, subject to the terms of the
Trust Agreement on the Principal Payment Date set forth above, upon presentation and surrender
of this Certificate at the principal corporate trust office of the Trustee in Los Angeles, California
(the "Principal Office"), the Principal Amount specified above, evidencing the Owner's interest
in the Installment Payments coming due on the Principal Payment Date, and to receive on
February 1 and August I of each year, commencing on AugastEghWr t, 24"ZM (the
"Interest Payment Dates"), interest accrued thereon at the Interest Rate specified above,
computed on the basis of a 360-day year consisting of twelve 30-day months, until said Principal
Amount is paid in full, evidencing the Registered Owner's interest in the interest evidenced by
the Installment Payments coming due on each of said dates.
This Certificate shall evidence interest from the Interest Payment Date next preceding its
date of execution to which interest has been paid in full, unless such date of execution shall be
after the 15th day of the month next preceding an Interest Payment Date, whether or not such day
is a business day (each such date, a "Record Date"), and on or prior to the following Interest
Payment Date, in which case this Certificate shall evidence interest from such Interest Payment
Date,or unless such date of execution shall be on or prior to the first Record Date, in which case
this Certificate shall evidence interest from the Dated Date specified above. Notwithstanding the
foregoing, if, as shown by the records of the Trustee, interest evidenced by the Certificates shall
be in default,this Certificate shall evidence interest from the last Interest Payment Date to which
interest has been paid in full or duly provided for.
Payments of interest evidenced by the Certificates shall be made to the Owners thereof
(as determined at the close of business on the Record Date next preceding the related Interest
Payment Date) by check or draft of the Trustee mailed to the address of each such Owner as it
appears on the registration books maintained by the Trustee pursuant to the Trust Agreement, or
to such other address as may be furnished in writing to the Trustee by such Owner. Payment of
principal evidenced by the Certificates, on their stated principal payment dates, shall be made
only upon presentation and surrender of the Certificates at the Principal Office. All such
amounts are payable in lawful money of the United States of America.
seEeaerws4:4tss3.2_ A-3
The Certificates are authorized to be executed and delivered in the form of fully
registered certificates in denominations of$5,000 or any integral multiple thereof("Authorized
Denominations").
This Certificate may be transferred or exchanged by the Registered Owner hereof, in
person or by his attorney duly authorized in writing, at the Principal Office, but only in the
manner, subject to the limitations and upon payment of the charges provided in the Trust
Agreement.
The Trustee may treat the Registered Owner hereof as the absolute owner hereof for all
purposes, whether or not the principal or interest evidenced by this Certificate shall be overdue,
and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of
the principal and interest evidenced by this Certificate shall be made only to such Registered
Owner, which payments shall be valid and effectual to satisfy and discharge the liability
evidenced by this Certificate to the extent of the sum or sums an,paid.
The Certificates are not subject to prepayment prior to their stated Principal Payment
Dates.
To the extent and in the manner permitted by the terms of the Trust Agreement,the Trust
Agreement and the rights and obligations of the Corporation, the District, the Owners and the
Trustee under the Trust Agreement may be amended or supplemented at any time by an
amendment or supplement thereto which shall become binding when the prior written consents
of the Owners of a majority of the aggregate principal evidenced by the Certificates then
outstanding, exclusive of Certificates disqualified as provided under the Trust Agreement, are
filed with the Trustee. No such supplement or amendment shall (a) extend the stated Principal
Payment Date of any Certificate or reduce the rate of interest evidenced thereby or extend the
time of payment of such interest or reduce the amount of principal evidenced thereby, (b) reduce
the percentage of Owners whose consent is required for the execution of any amendment of or
supplement to the Trust Agreement without the prior written consent of the Owners of all
Certificates then outstanding, (c) modify any of the rights or obligations of the Trustee without
the prior written consent of the Trustee, or (d) amend the amendment provisions of the Trust
Agreement without the prior written consent of the Owners of all Certificates then outstanding.
To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust
Agreement and the rights and obligations of the Corporation, the District, the Owners and the
Trustee under the Trust Agreement may also be amended or supplemented at any time by an
amendment or supplement thereto which shall become binding upon execution, without the
written consents of any Owners, but only to the extent permitted by law and only(a)to add to the
agreements, conditions, covenants and terms required by the Corporation or the District to be
observed or performed under the Trust Agreement other agreements, conditions, covenants and
terms thereafter to be observed or performed by the Corporation or the District, or to surrender
any right or power reserved therein to or conferred therein on the Corporation or the District, and
which in either case shall not adversely affect the rights or interests of the Owners, (b) to make
such provisions for the purpose of curing any ambiguity or of correcting, curing or
supplementing any defective provision contained in the Trust Agreement or in regard to
questions arising thereunder which the Corporation or the District may deem desirable or
sw49e44e4zaray.2- A-4
necessary and not inconsistent therewith, (c) to make such additions, deletions or modifications
as may be necessary or appropriate to assure the exclusion from gross income for federal income
tax purposes of interest evidenced by the Certificates,or (d) for any other reason, provided such
amendment or supplement does not adversely affect the rights or interests of the Owners.
THE DISTRICT HAS CERTIFIED that all acts, conditions and things required by the
statutes of the State of California and by the Trust Agreement to exist, to have happened and to
have been performed precedent to and in connection with the execution and delivery of this
Certificate do exist, have happened and have been performed in regular and due time, form and
manner as required by law, and that the Trustee is duly authorized to execute and deliver this
Certificate.
IN WITNESS WHEREOF, this Certificate has been executed by the manual signature
of an authorized signatory of the Trustee as of the date set forth below.
Date: ,2008
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
9e+994I 49O ias).i_ A-5
ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
the within-mentioned Certificate and
hereby irrevocably constitute(s) and
appoint(s) attorney, to transfer the same
on the books of the Trustee with full power of substitution in the premises.
Dated:
Note: The signature(s)on this Assignment must correspond with the name(s)as written on the
face of the within registered Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Tax I.D. #:
Signature Guaranteed:
Note: Signature(s)most be goaraoleed by m eligible Note: The signa"s)on this Assignment must wnespond
guarantor. with are nane(s)as written on the face of the sMthin Certificate
in every particular without alterelion or enlargement or my
cbaoge whatsoever.
aewse%Htsots�ssa.� A-6
Document comparison done by Delta View on Wednesday, August 20, 2008 12:27:25
PM
Input
Document 1 iMana eDeskSite:HUS DMS/US2008/80198094/4
Document 2 Mana eDeskSite://US DMS/US2008/80263843/2
Rendering set Ptandard
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Deletions 62
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Formatchan ed 0
Total than es 126
Fulbright&Jaworski L.L.P.— Draft—8/1/OS
INSTALLMENT PURCHASE AGREEMENT
by and between
ORANGE COUNTY SANITATION DISTRICT
and
ORANGE COUNTY SANITATION DISTRICT
FINANCING CORPORATION
Dated as of M"&e2temhLr 1,2008
Relating to
$Z�1-63A0000.000.000
Orange County Sanitation District
Refunding Certificates of Participation
Series200SAR
89198327489261MI t
reduction whether by offset or otherwise and shall not be conditional upon the performance or
nonperformance by any party of any agreement for any cause whatsoever.
Section 3.05. Nature of Agreement. This Installment Purchase Agreement constitutes
a Senior Obligation and, as such, shall be subject to the provisions of the Master Agreement and
shall be afforded all of the advantages, benefits, interests and security afforded Senior
Obligations pursuant to the Master Agreement.
ARTICLE IV
NO PREPAYMENT OF INSTALLMENT PAYMENTS; DISCHARGE
Section 4.01. No Prepayment of Installment Payments. (a) Installment Payments
shall not be subject to prepayment prior to their respective Installment Payment Dates.
Section 4.02. Discharge of Obligations. If all Installment Payments, and the interest
thereon, shall be paid as and when due in accordance with the terms hereof, or prepaid in
accordance with Section 4.01 hereof, and if all Certificates shall be fully paid, or provision
therefor made in accordance with Article X of the Trust Agreement, and the Trust Agreement
shall be discharged by its terns, then all agreements, covenants and other obligations of the
District hereunder shall thereupon cease, terminate and become void and be discharged and
satisfied.
ARTICLE V
COVENANTS
Section 5.01. Compliance with Master Agreement. The District will faithfully
observe and perform all the agreements,conditions, covenants and terns contained in the Master
Agreement required to be observed and performed by it and will not cause, suffer or permit any
default to occur thereunder.
Section 5.02. Compliance with Installment Purchase Agreement. The District will
punctually pay the Installment Payments, and interest thereon,and other payments required to be
made by it hereunder in strict conformity with the terms hereof, and will faithfully observe and
perform all the agreements, conditions, covenants and terns contained herein required to be
observed and performed by it, will not cause,suffer or permit any default to occur hereunder and
will not terminate this Installment Purchase Agreement for any cause including, without limiting
the generality of the foregoing, any acts or circumstances that may constitute failure of
consideration, destruction of or damage to the Project, commercial frustration of purpose, any
change in the tax or other laws of the United States of America or of the State or any political
subdivision of either or any failure of the Corporation to observe or perform any agreement,
condition, covenant or term contained herein required to be observed and performed by it,
whether express or implied, or any duty, liability or obligation arising out of or connected
herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the
Corporation or any force majeure, including acts of God, tempest, storm, earthquake, war,
rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial
90198337aE02629411 6
Fulbrleht& Jaworsld L.L.P.—Draft—8LlM
INSTALLMENT PURCHASE AGREEMENT
by and between
ORANGE COUNTY SANITATION DISTRICT
and
ORANGE COUNTY SANITATION DISTRICT
FINANCING CORPORATION
Dated as of May5j&MW 1,2008
Relating to
$Z7�FFr5;00000.000.000
Orange County Sanitation District
Refunding Certificates of Participation
Series 2008AB
84983274=61$41.l
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.................................................................................................2
Section1.01. Definitions............................................................................................2
Section 1.02. Definitions in Master Agreement and Trust Agreement.....................3
ARTICLE II PURCHASE OF PROJECT BY,AND SALE THEREOF TO, THE
CORPORATION;PAYMENT........................................................................4
Section 2.01. Acquisition,Construction and Installation of the Project....................4
Section2.02. Payment................................................................................................4
ARTICLE III PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE
DISTRICT; INSTALLMENT PAYMENTS...................................................4
Section 3.01. Purchase and Sale of Project................................................................4
Section3.02. Installment Payments...........................................................................4
Section3.03. Reserve Fund Payments.......................................................................5
Section3.04. Obligation Absolute.............................................................................5
Section3.05. Nature of Agreement............................................................................6
ARTICLE IV NO PREPAYMENT OF INSTALLMENT PAYMENTS;
DISCHARGE...................................................................................................6
Section 4.01. No Prepayment of Installment Payments.............................................6
Section 4.02. Discharge of Obligations.....................................................................6
ARTICLE V COVENANTS .................................................................................................6
Section 5.01. Compliance with Master Agreement...................................................6
Section 5.02. Compliance with Installment Purchase Agreement.............................6
Section 5.03. Protection of Security and Rights........................................................7
Section 5.04. Indemnification of Corporation...........................................................7
Section5.05. Further Assurances...............................................................................7
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES OF THE
CORPORATION.............................................................................................7
Section 6.01. Events of Default.................................................................................7
Section 6.02. Remedies on Default............................................................................8
Section6.03. Non-Waiver..........................................................................................8
Section 6.04. Remedies Not Exclusive......................................................................8
ARTICLEV11AMENDMENTS.............................................................................................9
Section7.01. Amendments........................................................................................9
ARTICLE Vlll MISCELLANEOUS...................................................................................... 10
Section 8.01. Liability of District Limited............................................................... 10
Section 8.02. Limitation of Rights........................................................................... 10
Section8.03. Assignment........................................................................................ 10
Section8.04. Notices............................................................................................... 10
NOR MA .I.
TABLE OF CONTENTS
(continued)
Page
Section 8.05. Successor Is Deemed Included in all References to Predecessor...... 11
Section 8.06. Waiver of Personal Liability.............................................................. 11
Section 8.07. Article and Section Headings, Gender and References..................... l l
Section 8.08. Partial Invalidity................................................................................. 11
Section 8.09. Law Governing.................................................................................. 12
Section 8.10. Execution in Counterparts.................................................................. 12
EXHIBIT A DESCRIPTION OF PROJECT........................................................A-1
WM3s s sa tt -ii-
INSTALLMENT PURCHASE AGREEMENT
THIS INSTALLMENT PURCHASE AGREEMENT (this "Installment Purchase
Agreement"), dated as of M"SeRuember 1, 2008, is by and between the ORANGE COUNTY
SANITATION DISTRICT, a county sanitation district organized and existing under the laws of
the State of California (the "District'), and the ORANGE COUNTY SANITATION DISTRICT
FINANCING CORPORATION, a nonprofit public benefit corporation organized and existing
under the laws of the State of California(the"Corporation').
WITNESSETH:
WHEREAS, to refinance the acquisition, construction and installation of certain
improvements to the wastewater system (the "Prior Project') of certain predecessor county
sanitation districts of the District, to wit, County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 1 I
(collectively, the "Predecessor Districts"), the Predecessor Districts purchased the Prior Project
by agreeing to make installment payments (the "Prior Installment Payments") pursuant to the
Amendatory Agreement for Acquisition and Construction, dated as of 9etebe Seotember 1,
492-J2 3 by and among the Predecessor Districts;
WHEREAS, to provide the funds necessary to refinance the Prior Project, the
Predecessor Districts caused the execution and delivery of the Refunding Certificates of
Participation, Series 499a1993 (the "Prior Certificates"), evidencing direct, undivided fractional
interests in the Prior Installment Payments;
WHEREAS, the District desires to refinance all of the Prior Project by prepaying all of
the remaining principal components of the Prior Installment Payments, and the interest
components thereof to the date of prepayment, thereby causing all of the Prior Certificates to be
prepaid;
WHEREAS, to provide the funds necessary to prepay the Prior Installment Payments to
be so prepaid, the District and the Orange County Sanitation District Financing Corporation (the
"Corporation") desire that the Corporation purchase the Prior Project from the District and the
District sell the Prior Project to the Corporation, and that the District then purchase the Prior
Project from the Corporation and the Corporation sell the Prior Project to the District, for the
installment payments (the `Installment Payments") to be made by the District pursuant to this
Installment Purchase Agreement the Corporation and the District have agreed to finance such
prepayment by executing and delivering Orange County Sanitation District Refunding
Certificates of Participation, Series 2008AIl (the "Certificates");
WHEREAS, pursuant to the Master Agreement for District Obligations, dated as of
August 1, 2000, by and between the District and the Corporation,the District has established and
declared the conditions and terms upon which obligations such as this Installment Purchase
Agreement, and the Installment Payments, and the interest thereon, are to be incurred and
secured;
sawx�.v_,aoaG3s�t.t
WHEREAS, the Corporation proposes to assign without recourse certain of its rights
under and pursuant to this Installment Purchase Agreement to U.S. Bank National Association,
as trustee(the"Trustee");
WHEREAS, in consideration of such assignment and the execution and delivery of the
Trust Agreement, dated as of the date hereof, by and among the Trustee,the Corporation and the
District, the Trustee has agreed to execute and deliver the Certificates, evidencing direct,
undivided fractional interests in the Installment Payments, and the interest thereon, payable
hereunder,
WHEREAS, a portion of the Certificates will be used to prepay certain of the Prior
Installment Payments; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened
and to have been performed precedent to and in connection with the execution and delivery of
this Installment Purchase Agreement do exist, have happened and have been performed in
regular and due time, form and manner as required by law, and the parties hereto are now duly
authorized to execute and enter into this Installment Purchase Agreement;
NOW, THEREFORE, in consideration of the covenants and provisions herein set forth
and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged,the parties hereto do hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the
context otherwise requires, the terms defined in this Section shall for all purposes hereof and of
any amendment hereof or supplement hereto and of any report or other document mentioned
herein or therein have the meanings defined herein, the following definitions to be equally
applicable to both the singular and plural forms of any of the terms defined herein:
"Business Day" means a day other than (a) Saturday or Sunday, (b) a day on which
banking institutions in the city in which the Principal Office is located are authorized or required
by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or
obligated by law or executive order to be closed.
"Certificates" means the Orange County Sanitation District Refunding Certificates of
Participation, Series 2008A@, executed and delivered under and pursuant to the Trust
Agreement.
"Closing Date"means May39,Se2tember . 2008.
"Corporation" means the Orange County Sanitation District Financing Corporation, a
nonprofit public benefit corporation organized and existing under the laws of the State, and any
successor thereto.
9e192427 490247941.t 2
"District" means the Orange County Sanitation District, a county sanitation district
organized and existing under and by virtue of the laws of the State,and any successor thereto.
"Event of Default"means an event described in Section 6.01 hereof.
"Installment Payments" means the Installment Payments required to be made by the
District pursuant to Section 3.02 hereof.
"Installment Payment Date"means each August 1,commencing August 1,2008.2009.
"Installment Purchase Agreement" means this Installment Purchase Agreement, dated
as of MaySentember 1, 2008, by and between the District and the Corporation, as originally
executed and as it may from time to time be amended or supplemented in accordance with the
teens hereof.
"Interest Payment Date" means February 1 and August 1 of each year, commencing
AegiistFe r r 1,300&29519.
"Master Agreement" means the Master Agreement for District Obligations, dated as of
August 1, 2000, by and between the District and the Corporation,as originally executed and as it
may from time to time be amended or supplemented in accordance with the terms thereof.
"Person" means an individual, corporation, limited liability company, firm, association,
partnership, trust, or other legal entity or group of entities, including a governmental entity or
any agency or political subdivision thereof.
"Principal Office" means the Trustee's principal corporate trust office in Los Angeles,
California.
"Project" means the improvements to the Wastewater System, as described in Exhibit A
hereto.
"Trust Agreement" means the Trust Agreement, dated as of"le ern.jaLr 1, 2008, by
and among the Trustee, the Corporation and the District, as originally executed and as it may
from time to time be amended or supplemented in accordance with its terns.
"Trustee" means U.S. Bank National Association, a national banking association duly
organized and existing under the laws of the United States of America,or any other bank or trust
company which may at any time be substituted in its place as provided in the Trust Agreement.
Section 1.02. Definitions in Master Agreement and Trust Agreement. Except as
otherwise herein defined and unless the context otherwise requires, the terns defined in the
Master Agreement or the Trust Agreement shall for all purposes hereof and of any amendment
hereof or supplement hereto and of any report or other document mentioned herein have the
meanings defined therein, such definitions to be equally applicable to both the singular and
plural forms of any of the terms defined therein. With respect to any defined tern which is given
a different meaning under this Installment Purchase Agreement than under the Master
Agreement or the Trust Agreement,as used herein it shall have the meaning given herein.
ARTICLE II
PURCHASE OF PROJECT BY,AND SALE THEREOF TO,
THE CORPORATION; PAYMENT
Section 2.01. Acanisition. Construction and Installation of the Project. The District
represents and warrants that it is the sole and exclusive owner of the Project. The Corporation
hereby purchases from the District, and the District hereby sells to the Corporation,the Project in
accordance with the provisions of this Installment Purchase Agreement. All right, title and
interest in the Project shall immediately vest in the Corporation on the Closing Date without
further action on the part of the Corporation or the District.
Section 2.02. Payment. On the Closing Date, the Corporation shall pay to the District,
as the purchase price of the Project, the amount of , 0 O 00 which amount shall
be paid from the proceeds of the Certificates.
ARTICLE III
PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE DISTRICT;
INSTALLMENT PAYMENTS
Section 3.01. Purchase and Sale of Project. The District hereby purchases from the
Corporation, and the Corporation hereby sells to the District, the Project in accordance with the
provisions of this Installment Purchase Agreement. All right, title and interest in and to the
Project shall immediately vest in the District on the Closing Date without further action on the
part of the District or the Corporation.
Section 3.02. Installment Payments. The District shall pay to the Corporation, solely
from Net Revenues and from no other sources, the purchase price of the Project in Installment
Payments, with interest thereon, as provided herein. The Installment Payments shall be in the
aggregate principal amount of$3Z:1{rS08�1 00. 00.000 and shall be payable on the Business
Day immediately preceding each of the Installment Payment Dates in the principal amounts and
shall accrue interest at the rates per annum set forth in the following schedule:
840&3v-+lgzsisy.t 4
Installment
Payment Date Installment Interest
(August 1) Payment Rate
2M V5,590;008 3.000%
2009 i c 235 nnnnnn 440L
2010 43;895,oli 4-
2011 4825000 4 000
2012 6,51-5,00 4.000
2013 +ni950002.990
The Installment Payments shall accrue interest from the Closing Date, at the rates set
forth above, payable on the Interest Payment Dates in each year. Such interest shall accrue on
the basis of a 360-day year consisting of twelve 30-day months. Each Installment Payment, and
each payment of interest thereon, shall be deposited with the Trustee, as assignee of the
Corporation, no later than the Business Day next preceding the Installment Payment Date or
Interest Payment Date on which such Installment Payment or payment of interest is due, in
lawful money of the United States of America, in immediately available funds. If and to the
extent that, on any such date, there are amounts on deposit in the Installment Payment Fund
established under the Trust Agreement, or in any of the accounts therein, which amounts are not
being held for the payment of specific Certificates, such amounts shall be credited against the
Installment Payment,or payment of interest thereon,as applicable,due on such date.
Section 3.03. Reserve Fund Payments. The District shall maintain or cause to be
maintained in the Reserve Fund established under the Trust Agreement an amount equal to the
Reserve Requirement; provided, however,that any replenishment thereof shall be payable solely
from Net Revenues. On or before the last Business Day of each month, commencing on or
before the last Business Day of each month during which an event occurs that causes the amount
on deposit in the Reserve Fund to be reduced below,or further below,the Reserve Requirement,
the District shall transfer, from Net Revenues, to the Trustee for deposit in the Reserve Fund,
1/12 of the amount of such reduction, except that no such transfer to the Trustee and deposit in
the Reserve Fund need be made if the amount available and contained therein is at least equal to
the Reserve Requirement.
Section 3.04. Obligation Absolute. The obligation of the District to make the
Installment Payments,and payments of interest thereon,and other payments required to be made
by it under this Article, solely from Net Revenues, is absolute and unconditional, and until such
time as the Installment Payments, payments of interest thereon, and such other payments shall
have been paid in full (or provision for the payment thereof shall have been made pursuant to
Article IV), the District shall not discontinue or suspend any Installment Payments, or payments
of interest thereon, or other payments required to be made by it hereunder when due, whether or
not the Project or any part thereof is operating or operable or has been completed, or its use is
suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such
Installment Payments, payments of interest thereon, and other payments shall not be subject to
9010RA37ae0263131.t 5
reduction whether by offset or otherwise and shall not be conditional upon the performance or
nonperformance by any party of any agreement for any cause whatsoever.
Section 3.05. Nature of Agreement. This Installment Purchase Agreement constitutes
a Senior Obligation and, as such, shall be subject to the provisions of the Master Agreement and
shall be afforded all of the advantages, benefits, interests and security afforded Senior
Obligations pursuant to the Master Agreement.
ARTICLE IV
NO PREPAYMENT OF INSTALLMENT PAYMENTS; DISCHARGE
Section 4.01. No Prepayment of Installment Payments. (a) Installment Payments
shall not be subject to prepayment prior to their respective Installment Payment Dates.
Section 4.02. Discharge of Obligations. If all Installment Payments, and the interest
thereon, shall be paid as and when due in accordance with the terms hereof, or prepaid in
accordance with Section 4.01 hereof, and if all Certificates shall be fully paid, or provision
therefor made in accordance with Article X of the Trust Agreement, and the Trust Agreement
shall be discharged by its terms, then all agreements, covenants and other obligations of the
District hereunder shall thereupon cease, terminate and become void and be discharged and
satisfied.
ARTICLE V
COVENANTS
Section 5.01. Compliance with Master Agreement. The District will faithfully
observe and perform all the agreements, conditions, covenants and terms contained in the Master
Agreement required to be observed and performed by it and will not cause, suffer or permit any
default to occur thereunder.
Section 5.02. Compliance with Installment Purchase Agreement. The District will
punctually pay the Installment Payments,and interest thereon, and other payments required to be
made by it hereunder in strict conformity with the terms hereof, and will faithfully observe and
perform all the agreements, conditions, covenants and terms contained herein required to be
observed and performed by it, will not cause, suffer or permit any default to occur hereunder and
will not terminate this Installment Purchase Agreement for any cause including, without limiting
the generality of the foregoing, any acts or circumstances that may constitute failure of
consideration, destruction of or damage to the Project, commercial frustration of purpose, any
change in the tax or other laws of the United States of America or of the State or any political
subdivision of either or any failure of the Corporation to observe or perform any agreement,
condition, covenant or tern contained herein required to be observed and performed by it,
whether express or implied, or any duty, liability or obligation arising out of or connected
herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the
Corporation or any force majeure, including acts of God, tempest, storm, earthquake, war,
rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial
a199427.+10263831.1 6
disputes, lock outs, lack of transportation facilities, fire, explosion, or acts or regulations of
governmental authorities.
Section 5.03. Protection of Security and Rights. The District will preserve and protect
the security hereof and the rights of the Trustee, as assignee of the Corporation, to the
Installment Payments, and interest thereon, and other payments required to be made by the
District hereunder and will warrant and defend such rights against all claims and demands of all
Persons.
Section 5.04. Indemnification of Corporation. To the extent permitted by law, the
District hereby agrees to indemnify and hold the Corporation and its members and officers
harmless against any and all liabilities which might arise out of or are related to the Project,this
Installment Purchase Agreement or the Certificates, and the District further agrees to defend the
Corporation and its members and officers in any action arising out of or related to the Project,
this Installment Purchase Agreement or the Certificates.
Section 5.05. Further Assurances. The District will adopt, deliver, execute and make
any and all further assurances, instruments and resolutions as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance hereof and for the better assuring
and confirming unto the Corporation, or unto the Trustee, as assignee of the Corporation, the
rights and benefits provided herein to the Corporation, or to the Trustee, as assignee of the
Corporation.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION
Section 6.01. Events of Default. The following shall be Events of Default under this
Installment Purchase Agreement, and "Event of Default' shall mean any one or more of the
following events:
(a) if default shall be made by the District in the due and punctual payment of or on
account of any Senior Obligation as the same shall become due and payable;
(b) if default shall be made by the District in the performance of any of the
agreements or covenants required herein, in the Trust Agreement or in the Master Agreement to
be performed by it (other than as specified in (a) above), and such default shall have continued
for a period of 30 days after the District shall have been given notice in writing of such default
by the Corporation or the Trustee; provided, however,that the party or parties giving such notice
may agree in writing to a reasonable extension of such period prior to the expiration of such 30
day period and, provided further, that if the District shall proceed to take curative action which,
if begun and prosecuted with due diligence, cannot be completed within such a period of 30
days, then such period shall be increased without such written extension to such extent as shall
be necessary to enable the District to diligently complete such curative action and such default
shall not become an Event of Default for so long as shall be necessary to diligently complete
such curative action; or
&OW1174802GRU 7
(c) if the District shall file a petition or answer seeking arrangement or reorganization
under the federal bankruptcy laws or any other applicable law of the United States of America or
any state therein, or if a court of competent jurisdiction shall approve a petition filed with or
without the consent of the District seeking arrangement or reorganization under the federal
bankruptcy laws or any other applicable law of the United States of America or any state therein,
or if under the provisions of any other law for the relief or aid of debtors any court of competent
jurisdiction shall assume custody or control of the District or of the whole or any substantial part
of its property.
Section 6.02. Remedies on Default. Upon the occurrence of an Event of Default, the
Trustee,as assignee of the Corporation,shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce
its rights against the District and to compel the District to perform and carry out its duties under
applicable law and the agreements and covenants required to be performed herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Trustee, as assignee of the Corporation;
(c) by suit in equity to require the District to account as the trustee of an express trust;
and to have a receiver or receivers appointed for the Wastewater System and of the issues,
earnings, income, products and profits thereof, pending such proceedings, with such powers as
the court making such appointment shall confer.
Section 6.03. Non-Waiver. Nothing in this Article or in any other provision hereof
shall affect or impair the obligation of the District, which is absolute and unconditional, to pay
the Installment Payments, and the interest thereon, to the Trustee, as assignee of the Corporation,
at the respective due dates from the Net Revenues and the other funds herein committed for such
payment, or shall affect or impair the right of the Trustee, as assignee of the Corporation, which
is also absolute and unconditional, to institute suit to enforce such payment by virtue of the
contract embodied herein.
A waiver of any default or breach of duty or contract by the Trustee, as assignee of the
Corporation, shall not affect any subsequent default or breach of duty or contract or impair any
rights or remedies on any such subsequent default or breach of duty or contract. No delay or
omission by the Trustee,as assignee of the Corporation,to exercise any right or remedy accruing
upon any default or breach of duty or contract shall impair any such right or remedy or shall be
construed to be a waiver of any such default or breach of duty or contract or an acquiescence
therein,and every right or remedy conferred upon the Trustee, as assignee of the Corporation, by
applicable law or by this Article may be enforced and exercised from time to time and as often as
shall be deemed expedient by the Trustee,as assignee of the Corporation.
If any action,proceeding or suit to enforce any right or exercise any remedy is abandoned
or determined adversely to the Trustee, as assignee of the Corporation, the District and the
Trustee, as assignee of the Corporation, shall be restored to their former positions, rights and
remedies as if such action,proceeding or suit had not been brought or taken.
ae+as.Nv-+EazWALI 8
Section 6.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved
to the Trustee, as assignee of the Corporation, is intended to be exclusive of any other remedy,
and each such remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be
exercised without exhausting and without regard to any other remedy conferred by law.
ARTICLE VII
AMENDMENTS
Section 7.01. Amendments. (a) This Installment Purchase Agreement and the rights
and obligations of the District, the Corporation and the Trustee, as assignee of the Corporation,
may be amended or modified from time to time and at any time by a written amendment hereto
executed by the District, the Corporation and the Trustee, as assignee of the Corporation, with
the written consent of the Owners of a majority of the aggregate principal evidenced by
Certificates then Outstanding. No such amendment shall (i) extend the payment date of any
Installment Payment or reduce the amount of any Installment Payment, or the interest rate
applicable thereto, without the prior written consent of the Owner of each affected Certificate,or
(ii) reduce the percentage of Owners of the Certificates whose consent is required to effect any
such amendment or modification, without the prior written consent of the Owners of all
Certificates then Outstanding.
(b) This Installment Purchase Agreement and the rights and obligations of the
District, the Corporation and the Trustee, as assignee of the Corporation, may be amended or
modified from time to time and at any time by a written amendment hereto executed by the
District, the Corporation and the Trustee, as assignee of the Corporation, without the written
consents of any Owners of the Certificates, but only to the extent permitted by law and only for
any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms required
by the District, the Corporation or the Trustee, as assignee of the Corporation, to be
observed or performed herein other agreements, conditions, covenants and terms
thereafter to be observed or performed by the District, the Corporation or the Trustee,
as assignee of the Corporation, or to surrender any right or power reserved herein to or
conferred herein on the District, the Corporation or the Trustee, as assignee of the
Corporation;
(ii) to make such provisions for the purpose of curing any ambiguity or
of correcting, curing or supplementing any defective provision contained herein or in
regard to questions arising hereunder which the District,the Corporation or the Trustee,
as assignee of the Corporation, may deem desirable or necessary and not inconsistent
herewith;
(iii) to make such additions, deletions or modifications as may be
necessary or appropriate to assure the exclusion from gross income for federal income
tax purposes of interest on the Installment Payments; and
se+ns3az4am 9
(iv) to make such other changes herein or modifications hereto as the
District, the Corporation or the Trustee, as assignee of the Corporation, may deem
desirable or necessary, and which shall not materially adversely affect the interests of
the Owners of the Certificates.
ARTICLE Vlll
MISCELLANEOUS
Section 8.01. Liability of District Limited. Notwithstanding anything contained herein
to the contrary,the District shall not be required to advance any moneys derived from any source
of income other than Net Revenues and the other funds provided herein for the payment of the
Installment Payments, and the interest thereon, and other payments required to be made by it
hereunder, or for the performance of any agreements or covenants required to be performed by it
contained herein. The District may, however, but in no event shall be obligated to, advance
moneys for any such purpose so long as such moneys are derived from a source legally available
for such purpose and may be legally used by the District for such purpose.
The obligation of the District to pay the Installment Payments, and the interest thereon,
and other payments required to be made by it hereunder is a special obligation of the District
payable, in the manner provided herein, solely from Net Revenues and other funds provided for
herein, and does not constitute a debt of the District or of the State, or of any political
subdivision thereof, in contravention of any constitutional or statutory debt limitation or
restriction. Neither the faith and credit nor the taxing power of the District or the State, or any
political subdivision thereof, is pledged to the payment of the Installment Payments, or the
interest thereon, or other payments required to be made hereunder.
Section 8.02. Limitation of Rights. Nothing in this Installment Purchase Agreement
expressed or implied is intended or shall be construed to give to any Person other than the
District, the Corporation and the Trustee, as assignee of the Corporation, any legal or equitable
right, remedy or claim under or in respect of this Installment Purchase Agreement or any
covenant, condition or provision therein or herein contained, and all such covenants, conditions
and provisions are and shall be held to be for the sole and exclusive benefit of the District, the
Corporation and the Trustee, as assignee of the Corporation.
Section 8.03. Assignment. The District and the Corporation hereby acknowledge the
transfer, conveyance and assignment by the Corporation to the Trustee of all of the Corporation's
rights, title and interest in and to this Installment Purchase Agreement (excepting its rights to
indemnification hereunder), including the right to receive Installment Payments, and the interest
thereon, from the District, pursuant to the Trust Agreement.
Section 8.04. Notices. Any written notice, statement, demand, consent, approval,
authorization, offer, designation, request or other communication to be given hereunder shall be
given to the party entitled thereto at its address set forth below, or at such other address as such
party may provide to the other parties in writing from time to time,namely:
891983P 4SD263841.1 10
If to the District: Orange County Sanitation District
10844 Ellis Avenue Fountain Valley,California 92708
Attention: Director of Finance and Administrative Services
If to the Corporation: Orange County Sanitation District Financing Corporation
c/o Orange County Sanitation District
10844 Ellis Avenue Fountain Valley,California 92708
Attention: Treasurer
If to the Trustee: U.S. Bank National Association
633 West Fifth Street,20 Floor
Los Angeles,California 90071
Attention: Corporation Trust Services
Each such notice, statement, demand, consent,approval,authorization,offer,designation,
request or other communication hereunder shall be deemed delivered to the party to whom it is
addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic
communication, whether by telex, telegram or telecopier, upon the sender's receipt of an
appropriate answerback or other written acknowledgment, (c) if given by registered or certified
mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours
after such notice is deposited with the United States mail, (d) if given by overnight courier, with
courier charges prepaid, 24 hours after delivery to said overnight courier, or(e) if given by any
other means, upon delivery at the address specified in this Section.
Section 8.05. Successor Is Deemed Included in all References to Predecessor.
Whenever the District or the Corporation is named or referred to herein, such reference shall be
deemed to include the successor to the powers, duties and functions that are presently vested in
the District or the Corporation, and all agreements and covenants required hereby to be
performed by or on behalf of the District or the Corporation shall bind and inure to the benefit of
the respective successors thereof whether so expressed or not.
Section 8.06. Waiver of Personal Liability. No official, officer or employee of the
District shall be individually or personally liable for the payment of the Installment Payments,or
the interest thereon,or other payments required to be made by the District hereunder,but nothing
contained herein shall relieve any official, officer or employee of the District from the
performance of any official duty provided by any applicable provisions of law or hereby.
Section 8.07. Article and Section Headings. Gender and References. The headings
or titles of the several Articles and Sections hereof and the table of contents appended hereto
shall be solely for convenience of reference and shall not affect the meaning, construction or
effect hereof, and words of any gender shall be deemed and construed to include all genders. All
references herein to "Articles," "Sections" and other subsections or clauses are to the
corresponding articles, sections, subsections or clauses hereof; and the words"hereby," "herein,"
"hereof.. "hereto," "herewith" and other words of similar import refer to this Installment
Purchase Agreement as a whole and not to any particular Article, Section, subdivision or clause
hereof.
80+98i23490263891.1 1 I
Section 8.08. Partial Invalidity. If any one or more of the agreements or covenants or
portions thereof required hereby to be performed by or on the part of the District or the
Corporation shall be contrary to law, then such agreement or agreements, such covenant or
covenants or such portions thereof shall be null and void and shall be deemed separable from the
remaining agreements and covenants and portions thereof and shall in no way affect the validity
hereof.
Section 8.09. Lew, Governing Law. This Installment Purchase Agreement shall be
construed and governed and construed in accordance with the laws of the State.
Section 8.10. Execution in Counterparts. This Installment Purchase Agreement may
be executed in several counterparts, each of which shall be deemed an original, and all of which
shall constitute but one and the same instrument.
9010932z� 12
IN WITNESS WHEREOF, the parties hereto have executed this Installment Purchase
Agreement by their officers[hereunto duly authorized as of the day and year first written above.
ORANGE COUNTY SANITATION DISTRICT
By:
Chair of the Board of Directors
(SEAL)
Attest:
By:
Secretary of the Board of Directors
ORANGE COUNTY SANITATION
DISTRICT FINANCING CORPORATION
By:
Treasurer
9e199327a96I61941.1 13
E7 ]MTT A
DESCRIPTION OF PROJECT
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Fulbright& Jaworski L.L.P.—Draft—8/1/08
CONTINUING DISCLOSURE AGREEMENT
by and between
ORANGE COUNTY SANITATION DISTRICT
and
DIGITAL ASSURANCE CERTIFICATION LLC,
as Dissemination Agent
Dated as of September 1, 2008
Relating to
$00,000,000
Orange County Sanitation District
Refunding Certificates of Participation
Series2008B
80263839.1
CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement"),
dated as of September 1, 2008, is by and between the ORANGE COUNTY SANITATION
DISTRICT, a county sanitation district organized and existing under the laws of the State of
California (the "District"), and DIGITAL ASSURANCE CERTIFICATION LLC, as
Dissemination Agent(the"Dissemination Agent").
WITNESSETH:
WHEREAS, the District has caused to be executed and delivered Orange County
Sanitation District Refunding Certificates of Participation, Series 2008B (the "Certificates"),
evidencing principal in the aggregate amount of $00,000,000, pursuant to a Trust Agreement,
dated as of the date hereof (the "Trust Agreement'), by and among U.S. Bank National
Association, as trustee (the "Trustee"), the Orange County Sanitation District Financing
Corporation(the"Corporation's and the District;and
WHEREAS, this Disclosure Agreement is being executed and delivered by the District
and the Dissemination Agent for the benefit of the owners and beneficial owners of the
Certificates and in order to assist the underwriters of the Certificates in complying with the Rule
(as defined herein);
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained,the parties hereto agree as follows:
Section 1. Definitions. Capitalized undefined terms used herein shall have the
meanings ascribed thereto in the Trust Agreement or, if not defined therein, in the Master
Agreement, dated as of August 1, 2000, by and between the District and the Corporation. In
addition,the following capitalized terms shall have the following meanings:
"Annual Report" means any Annual Report provided by the District pursuant to, and as
described in, Sections 2 and 3 hereof.
"Annual Report Date"means the date in each year that is eight months after the end of
the District's fiscal year, which date,as of the date of this Disclosure Certificate, is March 1.
"Disclosure Representative" means the Director of Finance and Administrative
Services of the District, or such other officer or employee of the District as the District shall
designate in writing to the Dissemination Agent and the Trustee from time to time.
"Dissemination Agent" means an entity selected and retained by the District, or any
successor thereto selected by the District. The initial Dissemination Agent shall be Digital
Assurance Certification LLC.
"Listed Events"means any of the events listed in subsection(a)of Section 4 hereof.
90263839.1 1
"National Repository" means any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule. As of the date hereof, the National
Repositories approved by the Securities and Exchange Commission are identified at
http://www.see.gov/info/municipal/nnnsir.htm.
"Official Statement" means the Official Statement, dated September , 2008,
relating to the Certificates.
"Participating Underwriter" means any of the original underwriters of the Certificates
required to comply with the Rule in connection with the offering of the Certificates.
"Repository"means each National Repository and each State Repository.
"Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under
the Securities Exchange Act of 1934,as the same may be amended from time to time.
"State Repository" means any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized by the
Securities and Exchange Commission. As of the date of this Disclosure Agreement, there is no
State Repository.
Section 2. Provision of Annual Reports. (a) The District shall provide, annually,
an electronic copy of the Annual Report to the Dissemination Agent,together with a copy for the
Tmstee, not later than 15 days prior to the Annual Report Date. Promptly upon receipt of an
electronic copy of the Annual Report, the Dissemination Agent shall provide an Annual Report
to each National Repository and the State Depository(if any)not later than March 1 after the end
of each fiscal year of the District, commencing with the fiscal year ending June 30, 2008. The
Annual Report may be submitted as a single document or as separate documents comprising a
package, and may cross reference other information as provided in Section 3 of this Disclosure
Agreement. If the District's fiscal year changes, it shall give notice of such change in the same
manner as for a Listed Event under subsection(f) of Section 4 hereof.
(b) If on the fifteenth (I5th) day prior to the Annual Report Date, the Dissemination
Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the
Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the
District of its undertaking to provide the Annual Report pursuant to Section 2(a).
(c) If the Dissemination Agent has not received an Annual Report by 12:00 noon on
the first business day following the Annual Report Date for the Annual Report, the District
irrevocably directs the Dissemination Agent to immediately send a notice to each National
Repository or the MSRB and the State Depository (if any) in substantially the form attached as
Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the
name and address of each National Repository and each State Repository, if any;and
802638391 2
(ii) file a report with the District and (if the Dissemination Agent is not the
Tmstee) the Trustee certifying that the Annual Report has been provided pursuant to this
Disclosure Agreement, stating the date it was provided and listing all the Repositories to
which it was provided.
Section 3. Content of Annual Reports. The District's Annual Report shall contain
or incorporate by reference the following:
(a) Audited financial statements prepared in accordance with generally accepted
accounting principles as promulgated to apply to governmental entities from time to time by the
Governmental Accounting Standards Board. If the District's audited financial statements are not
available by the time the Annual Report is required to be filed pursuant to subsection (a) of
Section 2 hereof, the Annual Report shall contain unaudited financial statements in a format
similar to the financial statements contained in the Official Statement, and the audited financial
statements shall be filed in the same manner as the Annual Report when they become available.
(b) The following information with respect to the Certificates:
(i) The principal evidenced by the Certificates Outstanding as of the January
1 next preceding the Annual Report Date and the principal amount of other Senior
Obligations outstanding as of the January 1 next preceding the Annual Report Date.
(ii) The balance in the Reserve Fund, and a statement of the Reserve
Requirement,as of the January 1 next preceding the Annual Report Date.
(c) A summary report showing in reasonable detail Revenues, Operating Revenues,
Maintenance and Operation Costs,Net Revenues,Net Operating Revenues and debt service with
respect to the Senior Obligations for the fiscal year ended the June 30 next preceding the Annual
Report Date.
(d) An update,for the fiscal year ended the June 30 next preceding the Annual Report
Date, of the information contained in the Official Statement in Table Nos. 2, 4, 6 (only with
respect to information on 6 under the headings Fiscal Year and Sewer Service Charge), 8 (not to
include projections), 9, 10, 11, 12, 13, 14 and 16.
(e) In addition to any of the information expressly required to be provided under
subsections (a), (b), (c) and (d) of this Section, the District shall provide such further
information, if any,as may be necessary to make the specifically required statements,in the light
of the circumstances under which they are made, not misleading.
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the District or related public entities,
which have been submitted to each of the Repositories or the Securities and Exchange
Commission. If the document included by reference is a final official statement, it must be
available from the Municipal Securities Rulemaking Board. The District shall clearly identify
each such other document so included by reference.
80263839.1 3
Section 4. Reporting of Significant Events. (a) Pursuant to the provisions of this
Section, the District shall give, or cause to be given, notice of the occurrence of any of the
following events with respect to the Certificates,if material:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults.
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties.
(5) Substitution of credit or liquidity providers, or their failure to
perform.
(6) Adverse tax opinions or events affecting the tax-exempt status of
the security.
(7) Modifications to rights of security holders.
(8) Contingent or unscheduled Certificate calls.
(9) Defeasances.
(10) Release, substitution,or sale of property securing repayment of the
securities.
(11) Rating changes.
(b) The District shall, within one business day of obtaining actual knowledge of the
occurrence of any of the Listed Events, contact the Disclosure Representative, inform such
person of the event, and request that the District promptly notify the Dissemination Agent in
writing whether or not to report the event pursuant to subsection(0 of this Section.
(c) Whenever the District obtains knowledge of the occurrence of a Listed Event,
whether because of a notice from the Dissemination Agent pursuant to subsection (b) of this
Section or otherwise, the District shall as soon as possible determine if such event would be
material under applicable Federal securities law.
(d) If the District has determined that knowledge of the occurrence of a Listed Event
would be material under applicable Federal securities law, the District shall promptly notify the
Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the
occurrence pursuant to subsection(f)of this Section.
(e) If in response to a request under subsection (b) of this Section, the District
determines that the Listed Event would not be material under applicable Federal securities law,
8a263839.1 4
the District shall so notify the Dissemination Agent in writing and instruct the Dissemination
Agent not to report the occurrence pursuant to subsection (f)of this Section.
(f) If the Dissemination Agent has been instructed by the District to report the
occurrence of a Listed Event,the Dissemination Agent shall file a notice of such occurrence with
the Municipal Securities Rulemaking Board and each Repository. Notwithstanding the
foregoing, notice of Listed Events described in paragraphs (8) and (9) of subsection (a) of this
Section need not be given under this subsection any earlier than the notice (if any) of the
underlying event is given to holders of affected Certificates pursuant to the Trust Agreement.
Section 5. Electronic Filing. Submission of Annual Reports and notices of Listed
Events to DisclosureUSA.org or another "Central Post Office" designated and accepted by the
Securities and Exchange Commission shall constitute compliance with the requirement of filing
such reports and notices with each Repository hereunder, and the District may satisfy its
obligations hereunder to file any notice, document or information with a Repository by filing the
same with any dissemination agent or conduit, including DisclosureUSA.org or another"Central
Post Office" or similar entity, assuming or charged with responsibility for accepting notices,
documents or information for transmission to such Repository, to the extent permitted by the
Securities and Exchange Commission or Securities and Exchange Commission staff or required
by the Securities and Exchange Commission. For this purpose, permission shall be deemed to
have been granted by the Securities and Exchange Commission staff if and to the extent the
agent or conduit has received an interpretive letter, which has not been revoked, from the
Securities and Exchange Commission staff. to the effect that using the agent or conduit to
transmit information to the Repository will be treated for purposes of the Rule as if such
information were transmitted directly to the Repository.
Section 6. Termination of Reporting Obligation. The District's obligations under
this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or
payment in full of all of the Certificates. If such termination occurs prior to the final maturity of
the Certificates, the District shall give notice of such termination in the same manner as for a
Listed Event under subsection(f)of Section 4 hereof.
Section 7. Dissemination Agent. The District may, from time to time, appoint or
engage another Dissemination Agent to assist it in carrying out its obligations under this
Disclosure Agreement, and may discharge any such Dissemination Agent, with or without
appointing a successor Dissemination Agent. If at any time there is not any other designated
Dissemination Agent, the Trustee shall be the Dissemination Agent; provided it shall receive
written notice of such designation at the time of such designation.
Section 8. Amendment, Waiver. Notwithstanding any other provision of this
Disclosure Agreement, the District and the Dissemination Agent may amend this Disclosure
Agreement (and the Dissemination Agent shall agree to any amendment so requested by the
District), and any provision of this Disclosure Agreement may be waived, provided that the
following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of subsection(a) of Section 2
hereof, Section 3 hereof or subsection (a) of Section 4 hereof, it may only be made in connection
90263939.1 5
with a change in circumstances that arises from a change in legal requirements,change in law, or
change in the identity, nature or status of an obligated person with respect to the Certificates, or
type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the
opinion of nationally recognized bond counsel, have complied with the requirements of the Rule
at the time of the primary offering of the Certificates, after taking into account any amendments
or interpretations of the Rule,as well as any change in circumstances;and
(c) the proposed amendment or waiver (i) is approved by holders of the Certificates
in the manner provided in the Trust Agreement for amendments to the Trust Agreement with the
consent of holders, or(ii) does not, in the opinion of the Trustee and nationally recognized bond
counsel, materially impair the interests of holders.
If the annual financial information or operating data to be provided in the Annual Report
is amended pursuant to the provisions hereof, the annual financial information containing the
amended operating data or financial information shall explain, in narrative form, the reasons for
the amendment and the impact of the change in the type of operating data or financial
information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be
followed in preparing financial statements,the annual financial information for the year in which
the change is made shall present a comparison between the financial statements or information
prepared on the basis of the new accounting principles and those prepared on the basis of the
former accounting principles. The comparison shall include a qualitative discussion of the
differences in the accounting principles and the impact of the change in the accounting principles
on the presentation of the financial information, in order to provide information to investors to
enable them to evaluate the ability of the District to meet its obligations. To the extent
reasonably feasible, the comparison shall be quantitative. A notice of the change in the
accounting principles shall be sent to the Repositories.
Section 9. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the District from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event,
in addition to that which is required by this Disclosure Agreement. If the District chooses to
include any information in any Annual Report or notice of occurrence of a Listed Event in
addition to that which is specifically required by this Disclosure Agreement, the District shall
have no obligation under this Disclosure Agreement to update such information or include it in
any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the District or the Dissemination
Agent to comply with any provision of this Disclosure Agreement, the Trustee may (and, at the
written direction of any Participating Underwriter or the holders of at least 25%of the aggregate
amount of principal evidenced by Outstanding Certificates and upon being indemnified to its
reasonable satisfaction, shall), or any holder or beneficial owner of the Certificates may, take
such actions as may be necessary and appropriate, including seeking mandate or specific
90263939.1 6
performance by court order,to cause the District,Trustee or the Dissemination Agent,as the case
may be, to comply with its obligations under this Disclosure Agreement. A default under this
Disclosure Agreement shall not be deemed an Event of Default under the Trust Agreement, and
the sole remedy under this Disclosure Agreement in the event of any failure of the District, the
Trustee or the Dissemination Agent to comply with this Disclosure Agreement shall be an action
to compel performance.
Section 11. Duties. Immunities and Liabilities of Trustee and Dissemination
Attent. Article Vlll of the Trust Agreement is hereby made applicable to this Disclosure
Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Trust
Agreement. Neither the Trustee nor the Dissemination Agent shall be responsible for the form or
content of any Annual Report or notice of Listed Event. The Dissemination Agent shall receive
reasonable compensation for its services provided under this Disclosure Agreement. The
Dissemination Agent (if other than the Trustee or the Trustee in its capacity as Dissemination
Agent)shall have only such duties as are specifically set forth in this Disclosure Agreement, and
the District agrees to indemnify and save the Dissemination Agent, its officers, directors,
employees and agents, harmless against any loss, expense and liabilities which it may incur
arising out of or in the exercise or performance of its powers and duties hereunder, including the
costs and expenses (including attorneys fees) of defending against any claim of liability, but
excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The
obligations of the District under this Section shall survive resignation or removal of the
Dissemination Agent and payment of the Certificates.
Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit
of the District, the Trustee, the Dissemination Agent, the Participating Underwriter and holders
and beneficial owners from time to time of the Certificates,and shall create no rights in any other
person or entity.
Section 13. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
80263939.1 7
IN WITNESS WHEREOF,the parties hereto have executed this Disclosure Agreement
as of the date first above written.
ORANGE COUNTY SANITATION DISTRICT
By:
Lorenzo Tyner
Director of Finance and Administrative Services
DIGITAL ASSURANCE CERTIFICATION LLC,
as Dissemination Agent
By:
Authorized Representative
Acknowledged and Accepted:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
80263839.1 $
EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE
TO FILE ANNUAL REPORT
Name of Issuer: Orange County Sanitation District
Name of Issue: Orange County Sanitation District
Refunding Certificates of Participation, Series 2008B
Date of Issuance: , 2008
NOTICE IS HEREBY GIVEN that the Orange County Sanitation District (the"District")
has not provided an Annual Report with respect to the above-named Certificates as required by
Section 6.09 of the Trust Agreement, dated as of September 1, 2008, by and among U.S. Bank
National Association, as Trustee, the Orange County Sanitation District Financing Corporation
and the District. [The District anticipates that the Annual Report will be fled by
Dated: ORANGE COUNTY SANITATION
DISTRICT
By:
cc: Trustee
Dissemination Agent
80263839.1
h. Fulbright& Jaworski L.L.P.- Draft 08/20108-Second Version
s PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 2008
g NEW ISSUE—BOOK-ENTRY-ONLY RATINGS:
g Moody-at ^_^
S&P: ^_^
Fitch:
(Sec"RATINGS"hereluJ
In the opinion of Fulbright& ✓mvorski L.L.A. Los Angeles, California, Special Counsel, under existing Imv the
w i! Interest Component of each Installment Payment, and the allocable portion thereofdistributable in respect of arty Cen(Acote,
a is exempt from personal income taxes of the State of California and, assuming compliance with the tar covenants described
herein, the Interest Component of each Installment Payment, and the allocable portion thereof distributable in respect of any
Certflcate, is excluded pursuant to section 103(a)ofthe Internal Revenue Code of 1986(the "Code)from the gross income
g of the owners thereoffor federal income tax purposes and is not an item of lax preference under section 57(a)of the Cade for
purposes ofthe federal alternative minimum lax. See "TAXMATTERS"herein.
u is
e [District Logos $_,000,000 )DAC Logo(
o ORANGE COUNTY SANITATION DISTRICT
o REFUNDING CERTIFICATES OF PARTICIPATION,SERIES 20089
a
Dated: Date of Delivery Due: August 1,as shown below
cg
The $ ,000,000 Orange County Sanitation District Refunding Certificates of Participation, Series 2OO8B (the
"Certificates") evidence direct, fractional undivided interests of the Owners thereof in the installment payments (the
"Installment Payments"), and the interest thereon, to be made by the Orange County Sanitation District (the "District")
t pursuant to the Installment Purchase Agreement,dated as of September 1,2009(the"Installment Purchase Agreement"),by
5 and between the District and the Orange County Sanitation District Financing Corporation(the"Corporation"). Pursuant to
8 the Master Agreement for District Obligations, dated as of August I, 2000 (the "Master Agreement"), by and between the
S s District and the Corporation,the District has established conditions and terms upon which obligations such as the Installment
S s Payments and the interest thereon, will be incurred and secured. Installment Payments under the Installment Purchase
'f 8 Agreement are payable solely from Net Revenues(as more fully described in the Master Agreement,the"Net Revenues")as
provided in the Installment Purchase Agreement,consisting primarily of all income and revenue received by the District from
s: g the operation or ownership of the Wastewater System of the District(the"Wastewater System")remaining after payment of
E Maintenance and Operation Costs, as further described in "SECURITY AND SOURCES OF PAYMENT FOR THE
a 5 CERTIFICATES" herein. The Installment Purchase Agreement provides that the obligation of the District to pay the
Installment Payments,and payments of interest thereon,and certain other payments required to be made in accordance with
athe Installment Purchase Agreement, solely from Net Revenues, is absolute and unconditional. See "SECURITY AND
8 SOURCES OF PAYMENT FOR THE CERTIFICATES"herein.
31 The proceeds of the Certificates,together with other available moneys,will be used to(I)refund all of the District's
a v outstanding Refunding Certificates of Participation, 1993 Series(the"Refunded Certificates")and pay a settlement amount to
the provider of an interest rate swap agreement relating to the Refunded Certificates, (ii)fund a reserve fund for the
il Certificates and (W)pay the costs incurred in connection with the execution and delivery of the Certificates. Sae
2 "REFUNDING PLAN"herein.
E
g Interest evidenced by the Certificates will be payable semiannually on February I and August I of each year,
S fi commencing on Febmery 1, 2009. See"THE CERTIFICATES"herein. The Certificates will be initially delivered only in
book-entry, form and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New
g" York. New York ("DTC"), which will act as securities depository for the Certificates. Individual purchases of the
9 E Certificates will be made in book-entry form only. Purchasers of Certificates will not receive physical certificates
£ representing their ownership interests in the Certificates purchased. The Certificates will be delivered in denominations of
g8 $5,000 and any integral multiple thereof. Payments of principal and interest evidenced by the Certificates are payable
8� directly to DTC by U.S. Bank National Association,es trustee(the"Trustee"). Upon receipt of payments of such principal
8 d and interest, DTC will in turn distribute such payments to the beneficial owners of the Certificates. See APPENDIX E—
yy "BOOK-ENTRY SYSTEM"herein.
Preliminary;subject to change.
80263844.5
MATURITY SCHEDULE
Maturity Principal Interest CUSIP
(August I Amount Rate Yield 6( 8428P)
2009 $ % %
2010
2011
2012
2013
2014
2015
2016
THE OBLIGATION OF THE DISTRICT TO PAY THE INSTALLMENT PAYMENTS, AND THE INTEREST
THEREON, AND OTHER PAYMENTS REQUIRED TO BE MADE BY IT TINDER THE INSTALLMENT
PURCHASE AGREEMENT IS A SPECIAL OBLIGATION OF THE DISTRICT PAYABLE, IN THE MANNER
PROVIDED IN THE INSTALLMENT PURCHASE AGREEMENT, SOLELY FROM NET REVENUES AND
OTHER FUNDS PROVIDED FOR IN THE INSTALLMENT PURCHASE AGREEMENT, AND DOES NOT
CONSTITUTE A DEBT OF THE DISTRICT OR OF THE STATE OF CALIFORNIA, OR OF ANY POLITICAL
SUBDIVISION THEREOF. IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT
LIMITATION OR RESTRICTION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE
STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF,IS PLEDGED TO THE PAYMENT
OF THE INSTALLMENT PAYMENTS,OR THE INTEREST THEREON, OR OTHER PAYMENTS REQUIRED
TO BE MADE UNDER THE INSTALLMENT PURCHASE AGREEMENT.SEE"SECURITY AND SOURCES OF
PAYMENT FOR THE CERTIFICATES"HEREIN.
This cover page contains information intended for quick reference only. It is not a summary of this issue. Investors
must read the entire Official Statement to obtain information essential to making an informed immanent decision.
BIDS FOR THE PURCHASE OF THE CERTIFICATES WILL BE RECEIVED BY
THE DISTRICT UNTIL 11 JO AM.NEW YORK TIME ON SEPTEMBER 4,2008 UNLESS
POSTPONED OR CANCELLED AS SET FORTH IN THE OFFICIAL.NOTICE INVI ENG BIDS
The Cerallcates are offered when, as and if¢recited and delivered and received by , as the Inthal
Purchase, subject to the approval of Fulbright& Jmvorski LL.P., Los Angeles, California, Special Counsel to the
District, and certain oho conditions. Certain legal matters will be passed upon for the District and the Corporation
by Woodruff, Spradlin & Smarr a Professional Corpoation, Costa Mesa California Public Resources Advisory
Group, Los Angeles, California, has served ar financial advisor to the District in ronnectim with the invention and
delivery of the Cerlificates. It is anticipated that the Centhcate in defnnhtve form will be available fo delivery
through the book-enoyfacilities of D7C on or about September_, 2008.
Dated: September_,2008
$o2taaee.5
_ � ` . . . :
�'�' �.
�lI .;..,�
:;;.� � ,�
r:.:iS. ,, � .. . ..�. .
i
_� . . . :.
.. � � . . . .
�amsitµ3 1
. -. �:;. .
ORANGE COUNTY SANITATION DISTRICT
Board of Directors
Doug Davert(Chair)— Tustin
Larry Crandall—(Vice Chair)—Fountain Valley
Harry Sidhu—Anaheim Jon Dumitm—Orange
Roy Moore—Brea Constance Underhill—Placentia
Patsy Marshall—Buena Park Sal Tinajero—Santa Ana
Phil Luebben—Cypress Charles Antos—Seal Beach
DonBankhead—Fullerton David Shawver—Stanton
Bill Dalton—Garden Grove Brad Reese— Villa Park
Don Hansen—Huntington Beach Jim Winder— Yorba Linda
Christina Shea—Irvine James Ferryman—Costa Mesa Sanitary District
Rose Espinoza—La Habra Darryl Miller—Irvine Ranch Water District
Mark Waldman—La Palma JoyL. Neugebauer—MirhvayCitySanitary
District
Ken Parker—Los Alamitos Chris Norby—Member of the Orange County
Don Webb—Newport Beach Board of Supervisors
Executive Manaeement of the District
James D.Ruth,General Manager
Robert P.Ghirelli,Ph.D.,Assistant General Manager
Lorenzo Tyner,Director of Finance and Administrative Services
James Herberg,Director ojEngineering
Ed Torres,Director of Technical Services
Nick Arhontes,Director of Operations& Maintenance
Special Services
Special Counsel and Disclosure Counsel
Fulbright&Jaworski L.L.P.
Los Angeles,California
District General Counsel
Bradley R. Hogin
Woodruff, Spradlin&Smart,a Professional Corporation
Costa Mesa,California
Financial Advisor
Public Resources Advisory Group
Los Angeles, California
Trustee and Escrow Agent
U.S.Bank National Association
Los Angeles,California
80263W,5
Verification Agent
Causey Demgen&Moore Inc.
Denver,Colorado
This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of the Certificates by any person in any jurisdiction in which it is unlawful for such
person to make such an offer, solicitation or sale. The information set forth herein has been provided by
the District and other sources that are believed by the District to be reliable. No dealer, broker,
salesperson or other person has been authorized to give any information or to make any representations
other than those contained in this Official Statement. If given or made, such other information or
representations must not be relied upon as having been authorized by the District,the Corporation or the
Initial Purchaser in connection with any reoffering.
This Official Statement is not to be construed as a contract with the purchasers of the Certificates.
Statements contained in this Official Statement which involve estimates,projections, forecasts or matters
of opinion, whether or not expressly so described herein, are intended solely as such and are not to be
construed as representations of facts.
The information and expressions of opinion herein are subject to change without notice and
neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the District or the Corporation since
the date hereof. This Official Statement is submitted with respect to the sale of the Certificates referred to
herein and may not be reproduced or used,in whole or in part,for any other purpose,unless authorized in
writing by the District. All summaries of the documents and laws are made subject to the provisions
thereof and do not purport to be complete statements of any or all such provisions. Preparation of this
Official Statement and its distribution have been duly authorized and approved by the District and the
Corporation.
In connection with the offering of the Certificates, the Initial Purchaser in connection with any
reoffering may over-allot or effect transactions which stabilize or maintain the market price of the
Certificates at a level above that which might otherwise prevail in the open market. Such stabilizing, if
commenced, may be discontinued at any time. The Initial Purchaser in connection with any reoffering
may offer and sell the Certificates to certain dealers,institutional investors and others at prices lower than
the public offering prices stated on the cover page hereof and such public offering prices may be changed
from time to time by the Initial Purchaser.
Certain statements included or incorporated by reference in this Official Statement constitme
forward-looking statements. Such statements are generally identifiable by the terminology used such as
"plan,""expect,""estimate,....budget"or other similar words. The achievement of certain results or other
expectations contained in such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results,performance or achievements described to
be materially different from any future results, performance or achievements expressed or implied by
such forward-looking statements.
CUSIP numbers herein are provided by Standard & Poor's CUSIP Service Bureau and are for
convenience of reference only. The District does not assume any responsibility for the accuracy of such
numbers. CUSIP® is a registered trademark of the American Bankers Association. Copyright® 1999-
2008 Standard&Poor's,a Division of The McGraw-Hill Companies, Inc. All rights reserved.
9026.3944.5
TABLE OF CONTENTS
(continued)
Page
80263944.5 Il
TABLE OF CONTENTS
Page
INTRODUCTION......................................................................................................................... 1
General............................................................................................................................... 1
TheDistrict........................................................................................................................2
Security and Sources of Payment for the Certificates.......................................................2
ContinuingDisclosure.......................................................................................................3
Miscellaneous....................................................................................................................3
REFUNDINGPLAN.....................................................................................................................3
ESTIMATED SOURCES AND USES OF FUNDS.....................................................................4
THE CERTIFICATES...................................................................................................................5
General...............................................................................................................................5
NoOptional or Mandatory Prepayment.............................................................................5
SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES...............................5
InstallmentPayments.........................................................................................................5
NetRevenues..................................................................................................................... 7
RateStabilization Account................................................................................................8
Allocationof Revenues......................................................................................................8
RateCovenant....................................................................................................................9
ReserveFund.....................................:...............................................................................9
Limitations on Issuance of Additional Obligations......................................................... 10
Insurance.......................................................................................................................... 12
Allocationof Installment Payments................................................................................. 13
THEDISTRICT........................................................................................................................... 14
Background...................................................................................................................... 14
Organizationand Administration..................................................................................... 15
Services............................................................................................................................ 16
ServiceArea..................................................................................................................... 16
Employees........................................................................................................................ 17
RetirementPlan................................................................................................................ 18
OtherPost-Employment Benefits.................................................................................... 19
RiskManagement............................................................................................................20
ExistingFacilities.............................................................................................................20
Permits, Licenses and Other Regulations........................................................................21
CapitalImprovement Program.........................................................................................23
Groundwater Replenishment System...............................................................................25
PreferredLevel of Treatment...........................................................................................26
BiosolidsManagement.....................................................................................................26
UrbanRunoff...................................................................................................................27
IntegratedEmergency Response Program.......................................................................28
re263944.5 3
TABLE OF CONTENTS
(continued)
P=
DISTRICTREVENUES........................................................................................................._...29
Sewer Service Charges.......................»...........................................................................29
AdditionalRevenues.............................................................................................._........32
Wastewater Treatment History.............................................................................._........33
Customers........................................................................................................................33
AssessedValuation................................................................................................_........35
Tax Levies and Delinquencies..............................................................................._........36
BudgetaryProcess............................................................................................................37
Reserves..........................._..............................................................................................38
Summary of Operating Data...........................................................................................39
Projected Operating Data.................................................................................................40
Management's Discussion and Analysis of Operating Data................_.........................41
Investment of District Funds............................................................................................42
FINANCIAL OBLIGATIONS.........................................................................................._........43
ExistingIndebtedness............................................................................................_........43
Variable Rate and Swap Obligations............................................................................_.44
AnticipatedFinancings....................._.............................................................................44
Direct and Overlapping Bonded Debt..............................................................................44
THECORPORATION................................................................................................................46
LIMITATIONS ON TAXES AND REVENUES........................................................................47
Article XIIIA of the California Constitution..............................................................._..47
Legislation Implementing Article XIIIA.........................................................................47
Article X1I113 of the California Constitution........................................._.........................47
PropositionlA......................................................................................_.........................48
Proposition62........................................................................................................_........49
Article XIIIC and Article XHID of the California Constitution......................................49
Other Initiative Measures......................................................................................._.......51
LEGALMATTERS.....................................................................................................................51
FINANCIALADVISOR..............................»..................................................................._........52
ABSENCE OF LITIGATION..........................................................................................._........52
FINANCIAL STATEMENTS..................................................._......................................_........52
TAXMATTERS..........................»......................................................._.....................................52
VERIFICATION OF MATHEMATICAL COMPUTATIONS........................................_........55
CONTINUING DISCLOSURE........................................................................................._........55
RATINGS....................................................................................................................................55
PURCHASE AND REOFFERING......................................................................................._....56
TABLE OF CONTENTS
(continued)
Page
MISCELLANEOUS....................................................................................................................56
APPENDIX A — COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE
COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED
JUNE30,2007...................................................................................................A-1
APPENDIX B — THE COUNTY OF ORANGE—ECONOMIC AND DEMOGRAPHIC
INFORMATION................................................................................................B-1
APPENDIX C — SUMMARY OF PRINCIPAL LEGAL DOCUMENTS....................................C-1
APPENDIX D — FORM OF CONTINUING DISCLOSURE AGREEMENT.............................D-1
APPENDIX E — BOOK-ENTRY SYSTEM.................................................................................E-1
APPENDIX F — FORM OF APPROVING OPINION OF SPECIAL COUNSEL......................F-1
80163863.5 III
OFFICIAL STATEMENT
$_,000,000'
ORANGE COUNTY SANITATION DISTRICT
REFUNDING CERTIFICATES OF PARTICIPATION,SERIES 2008B
INTRODUCTION
This introduction contains only a brief summary of certain of the terms of the Certificates being
offered and a brief description of the Official Statement. All statements contained in this Introduction are
qualified in their entirety by reference to the entire QQkial Statement. References to, and summaries of,
provisions of the Constitution and laws of the State of California (the "State") and any documents
referred to herein do not purport to be complete and such references are qualified in their entirely by
reference to the complete provisions. All capitalized terms used in this Official Statement and not
otherwise defined herein have the meanings set forth in the Trust Agreement, the Installment Purchase
Agreement and the Master Agreement (each, as hereinafter defined). See APPENDIX C— "SUMMARY
OF PRINCIPAL LEGAL DOCUMENTS—Definitions"herein.
General
This Official Statement, including the cover page and all appendices hereto, provides certain
information concerning the sale and delivery of$_,000,000* aggregate principal amount of the Orange
County Sanitation District Refunding Certificates of Participation, Series 2008B (the "Certificates")
evidencing direct, fractional undivided interests in the Installment Payments(the"Installment Payments")
and the interest thereon, to be made by the Orange County Sanitation District(the"District") pursuant to
the Installment Purchase Agreement, dated as of September I, 2008 (the "Installment Purchase
Agreement"), to be entered into by and between the District and the Orange County Sanitation District
Financing Corporation (the "Corporation"). Pursuant to the Master Agreement for District Obligations,
dated as of August 1, 2000(the "Master Agreement"), by and between the District and the Corporation,
the District has established and declared the conditions and terms upon which obligations such as the
Installment Purchase Agreement, and the Installment Payments and the interest thereon,will be incurred
and secured. Installment Payments under the Installment Purchase Agreement are payable solely from
Net Revenues (as defined hereinafter) as provided in the Installment Purchase Agreement, consisting
primarily of all income and revenue received by the District from the operation or ownership of the
Wastewater System of the District (the "Wastewater System") remaining after payment of Maintenance
and Operation Costs, as further described in "SECURITY AND SOURCES OF PAYMENT FOR THE
CERTIFICATES"herein.
The Certificates are to be executed and delivered pursuant to a Trust Agreement, dated as of
September 1, 2008 (the "Trust Agreement'), by and among the District the Corporation and U.S. Bank
National Association,as trustee(the"Trustee"). Proceeds from the sale of the Certificates,together with
other available moneys,will be used to (i)refund all of the District's outstanding Refunding Certificates
of Participation, 1993 Series(the"Refunded Certificates")and pay a settlement amount to the provider of
an interest rate swap agreement relating to the Refunded Certificates, (ii)fund a reserve fund for the
Preliminary:subject to change.
80263844.5
Certificates and (iii)pay the costs incurred in connection with the execution and delivery of the
Certificates. See"REFUNDING PLAN'herein.
The Certificates will be executed and delivered in the form of fully registered certificates, dated
as of the date of initial delivery thereof and will mature on August I in each year as set forth on the cover
page hereof. Interest evidenced by the Certificates will be payable semiannually on February 1 and
August I of each year, commencing on February 1, 2009. See "THE CERTIFICATES" herein. The
Certificates will be initially delivered only in book-entry form and will be registered in the name of Cede
& Co.,as nominee of The Depository Trust Company,New York,New York("DTC"),which will act as
securities depository for the Certificates. The Certificates will be delivered in denominations of$5,000
and any integral multiple thereof. So long as the Certificates are in the OTC book<ntry system, the
interest, principal, purchase price and prepayment premiums, if any, due with respect to the Certificates
will be payable by the Tnutee, or its agent, to DTC or its nominee. DTC, in turn,will make payments
pursuant to its procedures as described under APPENDIX E-"BOOK-ENTRY SYSTEM"herein.
The District
The District is a public agency responsible for regional wastewater collection, treatment and
disposal. The District is the sixth largest wastewater discharger in the United States. The District
provides service to an area with a population of approximately 2.5 million people in the northern and
central portion of the County of Orange (the "County"), in a service area of approximately 471 square
miles, treating 230 million gallons per day ("mg/d") of wastewater in Fiscal Year 2007-08. See "TIE
DISTRICr,""DISTRICT REVENUES"and"FINANCIAL OBLIGATIONS"herein.
Security and Sources of Payment for the Certificates
The Certificates evidence direct, fractional undivided interests in the Installment Payments, and
the interest thereon, paid by the District pursuant to the Installment Purchase Agreement. The obligation
of the District to pay the Installment Payments and the interest thereon and other payments required to be
made by it under the Installment Purchase Agreement is a special obligation of the District payable,in the
manner provided under the Installment Purchase Agreement, solely from Net Revenues, and other funds
as provided in the Installment Purchase Agreement. Net Revenues generally consist of all income and
revenue received by the District from the operation or ownership of the Wastewater System remaining
after payment of Maintenance and Operation Costs,all as further provided in the Master Agreement. The
Installment Purchase Agreement constitutes a Senior Obligation and as such, is subject to the provisions
of the Master Agreement and is afforded all of the advantages, benefits, interests and security afforded
Senior Obligations pursuant to the Master Agreement.
The District currently has Senior Obligations Outstanding evidenced by seven series of
certificates of participation and one related interest rate swap agreement,payable from Net Revenues on a
parity with the Installment Payments under the Installment Purchase Agreement; upon the execution and
delivery of the Certificates, one of such series of certificates of participation will be refunded and the
related Existing Senior Obligations, including the aforementioned interest rate swap agreement, will be
terminated, as described below. The interest rate swap agreement was originally executed by the
District's predecessor county sanitation districts in connection with the execution and delivery of the
Refunded Certificates. See"REFUNDING PLAN,"ESTIMATED SOURCES AND USES OF FUNDS,"
"FINANCIAL OBLIGATIONS-Existing Indebtedness"and"TILE DISTRICT"herein and APPENDIX
C-"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS-Master Agreement"attached hereto. The
District has no Subordinate Obligations currently outstanding.
Pursuant to the Master Agreement,the District will,to the extent permitted by law, fix,prescribe
and collect fees and charges for the services and facilities of the Wastewater System which will be at least
sufficient to yield during each Fiscal Year (a)Net Revenues equal to 125% of Debt Service on Senior
90263944.5 2
Obligations for such Fiscal Year and(b)Net Operating Revenues equal to 100% of Debt Service on all
Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and
charges and may make such classification thereof as it deems necessary, but shall not reduce the fees and
charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at
all times be sufficient to meet the requirements of the Master Agreement. See "SECURITY AND
SOURCE OF PAYMENT FOR THE CERTIFICATES—Rate Covenant"herein.
The obligation of the District to pay the Installment Payments and the interest thereon,and
other payments required to be made by it under the Installment Purchase Agreement is a special
obligation of the District payable, in the manner provided in the Installment Purchase Agreement,
solely from Net Revenues and other funds provided for in the Installment Purchase Agreement,and
does not constitute a debt of the District or of the State, or of any political subdivision thereof, in
contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and
credit nor the taxing power of the District or the State or any political subdivision thereof, is
pledged to the payment of the Installment Payments, or the interest thereon, or other payments
required to be made under the Installment Purchase Agreement. The Installment Purchase
Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master
Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior
Obligations pursuant to the Master Agreement. See"SECURITY AND SOURCES OF PAYMENT
FOR THE CERTIFICATES"herein.
Continuing Disclosure
The District has covenanted for the benefit of holders and beneficial owners of the Certificates
(a)to provide certain financial information and operating data (the "Annual Report") relating to the
District and the property in the District not later than eight months after the end of the District's Fiscal
Year(which currently would be March 1), commencing with the report for the 2007-08 Fiscal Year, and
(b)to provide notices of the occurrence of certain enumerated events, if material. The specific nature of
the information to be contained in the Annual Report or the notices of material events is set forth in the
Continuing Disclosure Agreement. See "CONTINUING DISCLOSURE" herein and APPENDIX D —
"FORM OF CONTINUING DISCLOSURE AGREEMENT."
Miscellaneous
The descriptions herein of the Trust Agreement,the Master Agreement,the Installment Purchase
Agreement and any other agreements relating to the Certificates are qualified in their entirely by reference
to such documents. Copies of the documents are on file and available for inspection at the corporate trust
office of the Trustee at U.S. Bank National Association, 633 West 56 Street,20 Floor, Los Angeles, CA
90071,Attention: Corporate Trust.
REFUNDING PLAN
A portion of the net proceeds from the sale of the Certificates, together with other available
moneys, will be used to prepay all of the prior installment payments (the "Refunded Installment
Payments") to be made by the District pursuant to the Amendatory Agreement for Acquisition and
Construction, dated as of September 1, 1993 (the "1993 Agreement for Acquisition and Construction")
which was executed in connection with the execution and delivery of the Refunding Certificates of
Participation, 1993 Series (the "1993 Certificates") evidencing $46,000,000 original aggregate principal
amount, of which $26,750,000 in aggregate principal amount remains outstanding (the "Refunded
Certificates").
Pursuant to the terms of the Reformed Trust Agreement, dated as of August 1, 2000 (the "Prior
Trust Agreement"), which amended and restated the Trust Agreement, dated as of September 1, 1993,
80263944.5 3
pursuant to which such 1993 Certificates were executed and delivered the refunding of the Refunded
Certificates will be effected by depositing a portion of the proceeds of the Certificates,together with other
available moneys,in an escrow fund(the"Escrow Fund")to be created and established under the Escrow
Agreement, dated as of September 1, 2008, by and between the District and U.S. Bank National
Association, as escrow agent. Such proceeds and other moneys deposited by the District in the Escrow
Fund will be held uninvested in cash in an ammmt sufficient to provide for the payment of the interest
component of the Refunded Installment Payments through and including November 1, 2008 (the
"Prepayment Date") and to provide the prepayment of the principal component of the Refunded
Installment Payments on the Prepayment Date at a prepayment price (the "Prepayment Price") equal to
the principal amount thereof, without premium. In accordance with the Prior Trust Agreement, the
Refunded Installment Payments will be applied to the payment of interest with respect to the outstanding
Refunded Certificates through and including the Prepayment Date and to the prepayment of the principal
of the outstanding Refunded Certificates on the Prepayment Date at the Prepayment Price. See
"VERIFICATION OF MATHEMATICAL COMPUTATIONS."
The amounts deposited in the Escrow Fund will be held in trust solely for the Refunded
Certificates and will not be available to pay the principal and interest evidenced by the Certificates or any
obligations other than the Refunded Certificates.
Another portion of the net proceeds from the sale of the Certificates will be used to pay the
settlement amount payable by the District to Societe Generale, New York Branch, arising from the
termination of the 1993 Swap relating to the Refunded Certificates. See"ESTIMATED SOURCES AND
USES OF FUNDS."
ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of funds in connection with the delivery of the Certificates are
presented below.
Sources
Certificate Proceeds
Net Original Issue Premium
Reserve Account and Debt Service
Account for 1993 Certificates
District Contribution
Total Sources
Uses
Escrow Fund
Swap Settlement Amount
Reserve Fund
Initial Purchaser's Discount
Costs of Issuance°/
Total Uses
Costs oflss m include,among other things, fees of rating agencies, Special Counsel fees and expenses and
the initial fees of the TnWec.
80263944.5 4
THE CERTIFICATES
General
The Certificates will be prepared in the form of Polly registered certificates in denominations of
$5,000 and any integral multiple thereof. The Certificates will be dated w of the date of initial delivery
thereof and will mature on August 1 in each year as set forth on the cover page hereof. Interest evidenced
by the Certificates will be payable semiannually on February 1 and August 1 of each year, commencing
on February 1, 2009. See `THE CERTIFICATES" herein. The Certificates will be initially delivered
only in book-entry form and will be registered in the time of Cede&Co.,as nominee of The Depository
Trust Company, New York, New York ("DTC"), which will act as securities depository for the
Certificates. Individual purchases of the Certificates will be made in book-entry form only. Purchasers of
Certificates will not receive physical certificates representing their ownership interests in the Certificates
purchased.
The interest evidenced by the Certificates shall be payable on each Interest Payment Date to and
including their respective Principal Payment Dates or prepayment prior thereto, and shall represent the
sum of the interest on the Installment Payments coming due on the Interest Payment Dates in each year.
The principal evidenced by the Certificates shall be payable on their respective Principal Payment Dates
in each year and shall represent the Installment Payments coming due on the Principal Payment Dates in
each year. Each Certificate shall evidence interest from the Interest Payment Date next preceding its date
of execution to which interest has been paid in full, unless such date of execution shall be after a Record
Date and on or prior to the following Interest Payment Date, in which case such Certificate shall evidence
interest from such Interest Payment Date, or unless such date of execution shall be on or prior to
January 15, 2009, in which case such Certificate shall represent interest from its date of initial delivery.
Notwithstanding, the foregoing, if, as shown by the records of the Trustee, interest evidenced by the
Certificates shall be in default,each Certificate shall evidence interest from the last Interest Payment Date
to which such interest has been paid in full or duly provided for. Interest evidenced by the Certificates
shall be computed on the basis of a 360-day yew consisting of twelve 30-day months. See APPENDIX C
—"SUMMARY OF PR NCIPAL LEGAL DOCUMENTS—Trust Agreement."
Payments of principal and interest evidenced by the Certificates are payable directly to DTC by
U.S.Bank National Association,as trustee. Upon receipt of payments of such principal and interest,DTC
will in turn distribute such payments to the beneficial owners of the Certificates. So long as the
Certificates are in the DTC book-entry system, the interest, principal, purchase price and prepayment
premiums, if any,due with respect to the Certificates will be payable by the Trustee,or its agent,to DTC
or its nominee. DTC, in turn, will make payments pursuant to its procedures w described under
APPENDIX E— "BOOK-ENTRY SYSTEM" herein. So long as the Certificates are in the DTC book-
entry system,the interest,principal and prepayment premiums, if any,due with respect to the Certificates
will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in turn, will make payments
pursuant to its procedures as described under APPENDIX E—"BOOK-ENTRY SYSTEM"herein.
No Optional or Mandatory Prepayment
The Certificates are not subject to optional or mandatory prepayment prior to their stated
Principal Payment Dates.
SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES
Installment Payments
Pursuant to the Installment Purchase Agreement,the Project will be acquired by the District from
the Corporation. The District has covenanted to, subject to any rights of prepayment under the
90263944.5 5
Installment Purchase Agreement, pay to the Corporation, solely from Net Revenues and from no other
sources, the Purchase Price in Installment Payments, with interest thereon, as provided in the Installment
Purchase Agreement. Pursuant to the Master Agreement, the District has established and declared the
conditions and terms upon which obligations such as the Installment Purchase Agreement, and the
Installment Payments and the interest thereon payable under the Installment Purchase Agreement,will be
incurred and secured. The obligation of the District to make the Installment Payments, and payments of
interest thereon,and other payments required to be made by it under the Installment Purchase Agreement,
solely from Net Revenues, is absolute and unconditional,and until such time as the Installment Payments,
payments of interest thereon, and such other payments shall have been paid in full (or provision for the
payment thereof shall have been made pursuant to the Installment Purchase Agreement), the District has
covenanted that it will not discontinue or suspend any Installment Payments when due,whether or not the
Project or any part thereof is operating or operable or has been completed, or its use is suspended
interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments,
payments of interest thereon, and other payments shall not be subject to reduction whether offset or
otherwise and shall not be conditional upon the performance or nonperformance by any party of any
agreement or any cause whatsoever. The District's obligation to make Installment Payments from Net
Revenues is on a parity with the District's obligation to make payments with respect to its Outstanding
Senior Obligations. See"—Net Revenues"below. Pursuant to the Trust Agreement,the Corporation has
assigned to the Trustee for the benefit of the Owners of the Certificates substantially all of its rights, title
and interest in the Installment Purchase Agreement, including its right to receive Installment Payments
and the interest thereon.
The District currently has Senior Obligations Outstanding evidenced by seven series of
certificates of participation and one related interest rate swap agreement,payable from Net Revenues on a
parity with the Installment Payments under the Installment Purchase Agreement; upon the execution and
delivery of the Certificates, one of such series of certificates of participation (the Refunded Certificates)
will be refunded and the related Existing Senior Obligations, including the aforementioned interest rate
swap agreement,will be terminated,as described below. The interest rate swap agreement was originally
executed by the District's predecessor county sanitation districts in connection with the execution and
delivery of the Refunded Certificates. See"FINANCIAL OBLIGATIONS—Existing Indebtedness"and
"THE DISTRICT"herein and APPENDIX C—"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—
Master Agreement"attached hereto.
The term "Existing Senior Obligations" w used in this Official Statement refers to the 1993
Agreement for Acquisition and Construction, the 1993 Swap, the 2000 Installment Purchase Agreement,
the 2003 Installment Purchase Agreement, the 2006 Installment Purchase Agreement, the
2007A Installment Purchase Agreement, the 2007B Installment Purchase Agreement and the 2008A
Installment Purchase Agreement, and the term "Senior Obligations" as used in this Official Statement
refers to the Existing Senior Obligations and my additional Senior Obligations, such w the Installment
Purchase Agreement,that may be made payable on a parity basis to the Installment Payments m provided
in the Master Agreement. The District will terminate the 1993 Agreement for Acquisition and
Construction and the 1993 Swap in connection with its refunding of the Refunded Certificates. See
"REFUNDING PLAN' and "ESTIMATED SOURCES AND USES OF FUNDS." Senior Obligations,
together with any Subordinate Obligations payable on a subordinate basis to the Installment Payments
executed and delivered as provided in the Master Agreement, are referred to collectively as the
"Obligations." The District has no Subordinate Obligations currently outstanding. See "FINANCIAL
OBLIGATIONS—Existing Indebtedness"herein and APPENDIX C—"SUMMARY OF PRINCIPAL
LEGAL DOCUMENTS—Master Agreement"attached hereto.
The obligation of the District to pay the Installment Payments, and the interest thereon,and other
payments required to be made by it under the Installment Purchase Agreement and Master Agreement,is
a special obligation of the District payable, in the manner provided in the Installment Purchase
Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase
80263844.5 6
Agreement,and does not constitute a debt of the District,the State or of any political subdivision thereof,
in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and
credit nor the taxing power of the District, the State or any political subdivision thereof, is pledged to the
payment of the Installment Payments, or the interest thereon, or other payments required to be made
under the Installment Purchase Agreement. The Installment Purchase Agreement constitutes a Senior
Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the
advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master
Agreement. See"SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES"herein.
Net Revenues
The District is obligated to make Installment Payments solely from Net Revenues as provided in
the Master Agreement, which consist of Revenues remaining after payment of costs paid by the District
for maintaining and operating the Wastewater System ("Maintenance and Operation Costs"). Revenues
are defined in the Master Agreement to mean, for any period all income and revenue received by the
District during such period from the operation or ownership of the Wastewater System, determined in
accordance with generally accepted accounting principles, including all fees and charges received during
such period for the services of the Wastewater System, investment income received during such period
(but only to the extent that such investment income is generally available to pay costs with respect to the
Wastewater System, including Maintenance and Operation Costs), Net Proceeds of business interruption
insurance received during such period,ad valorem taxes received during such period,payments under the
Agreement Acquiring Ownership Interests, Assigning Rights and Establishing Obligations, entered into
on February 13, 1986, and amendment No. 1 thereto dated December 10, 1986, by and between
predecessor County Sanitation District No. 14 of Orange County and the Irvine Ranch Water District(the
"IRWD Agreement") received during such period and all other money received during such period
howsoever derived by the District from the operation or ownership of the Wastewater System or arising
from the Wastewater System (including any standby or availability charges), but excluding (a)Capital
Facilities Capacity Charges,(b)payments received under Financial Contracts, and(c)refundable deposits
made to establish credit and advances or contributions in aid of construction (which, for purposes of the
Master Agreement, shall not include payments under the IRWD Agreement); provided however, that
(i)Revenues shall be increased by the amounts, if any, transferred during such period from the Rate
Stabilization Account to the Revenue Account and shall be decreased by the amounts, if any,transferred
during such period from the Revenue Account to the Rate Stabilization Account, and III)Revenues shall
include Capital Facilities Capacity Charges collected during such period to the extent that such Capital
Facilities Capacity Charges could be properly expended on a Capital Facilities Capacity Charge Eligible
Project for which the proceeds of Subject Obligations were used or are available to be used. See
"DISTRICT REVENUES—Additional Revenues"herein.
The District's obligation to make the Installment Payments from its Net Revenues is on a parity
with the District's obligation to make payments with respect to its other outstanding obligations described
as Senior Obligations and all Reimbursement Obligations with respect to Senior Obligations,as provided
in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as
such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits,
interests and security afforded Senior Obligations pursuant to the Master Agreement. Pursuant to the
Master Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and
Reimbursement Obligations with respect to Senior Obligations,and the Net Revenues will not be used for
any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to
Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be
apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This
pledge constitutes a first lien on the Net Revenues for the payment of the Senior Obligations and
Reimbursement Obligations with respect to Senior Obligations. The term Senior Obligations, generally
means all revenue bonds or notes(including bond anticipation notes and commercial paper)of the District
authorized,executed,issued and delivered under and pursuant to applicable law,the Installment Purchase
80263344.5 7
Agreement and all other contracts (including financial contracts) or leases of the District authorized and
executed by the District under and pursuant to applicable law, the installment, lease or other payments
under which are,in accordance with the provisions of the Master Agreement,payable from Net Revenues
on a parity with the payments under the Master Agreement.
The District may at any time incur Subordinate Obligations payable on a subordinate basis to the
Installment Payments executed and delivered as provided in the Master Agreement; provided, however,
that prim to incurring such Subordinate Obligations,the District will have determined that the incurrence
thereof will not materially adversely affect the District's ability to comply with the requirements of the
Master Agreement. The District may at any time incur Reimbursement Obligations with respect to
Subordinate Obligations. For a description of the District's Outstanding Senior Obligations and
Subordinate Obligations, see "FINANCIAL OBLIGATIONS — Existing Indebtedness" herein. Them
are currently no Subordinate Obligations or Reimbursement Obligations with respect to Subordinate
Obligations outstanding.
The District may, in connection with the incurrence of Subordinate Obligations, pledge Net
Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to
Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be
junior and subordinate to the pledge of, and lien on,Net Revenues for the payment of Senior Obligations
and Reimbursement Obligations with respect to Senior Obligations.
Rate Stabilization Account
To avoid fluctuations in its fees and charges of the Wastewater System, from time to time the
District may deposit in the Rate Stabilization Account from Net Revenues such amounts as the District
deems necessary or appropriate. From time to time,the District may also transfer moneys from the Rate
Stabilization Account to the Revenue Account to be used by the District, first to pay all Maintenance and
Operations Costs as and when the same shall be due and payable. In addition, any such amount
transferred from the Rate Stabilization Account to the Revenue Account by the District is included as
Revenues for any period, but such transferred amount is excluded from determining Operating Revenues
for any period. Revenues will be decreased by the amounts,if any,transferred from the Revenue Account
to the Rate Stabilization Account. There are presently no funds in the Rate Stabilization Account.
Allocation of Revenues
To carry out and effectuate the pledge of Net Revenues under the Master Agreement as described
above, the District agrees and covenants that all Operating Revenues received by the District will be
deposited when and as received in the Revenue Account. Additionally, amounts may, from time to time
as the District deems necessary or appropriate, be transferred from the Rate Stabilization Account and
deposited in the Revenue Account, as described above under "— Rate Stabilization Account" The
District will pay from the Revenue Account all Maintenance and Operations Costs (including amounts
reasonably required to be set aside in contingency reserves for Maintenance and Operations Costs, the
payment of which is not immediately required)as and when the same shall be due and payable.
After having paid, or having made provisions for the payment of, Maintenance and Operations
Costs, the District shall set aside and deposit or transfer, as the case may be, from the Revenue Account
such amounts at such times as provided in the Master Agreement in the following order of priority:
(1) Senior Obligation Payment Account;
(2) Senior Obligation Reserve Funds;
(3) Subordinate Obligation Payment Account;
eaa63944.5 8
(4) Subordinate Obligation Reserve Funds;and
(5) Rate Stabilization Account.
Amounts required or permitted to be deposited or transferred as described in items 2, 3, 4 and 5
above,shall not be so deposited or transferred unless the District shall have determined that there will be
sufficient Net Revenues available to make the required deposits or transfers on the dates on which such
deposits or transfers are required to be made as described above. So long as the District has determined
that Net Revenues will be sufficient to make all of the deposits or transfers required to be made pursuant
to items 1, 2, 3, 4 and 5 above, on the dates on which such deposits or transfers are required to be made,
Net Revenues on deposit in the Revenue Account may from time to time be used for any purpose for
which the District funds may be legally applied. For additional information, see APPENDIX C —
"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Master Agreement."
Rate Covenant
Pursuant to the Master Agreement,the District will,to the extent permitted by law, fix,prescribe
and collect fees and charges for the services of the Wastewater System which will be at least sufficient to
yield during each Fiscal Year(a)Net Revenues equal to 125%of Debt Service on Senior Obligations for
such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for
such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may
make such classification thereof as it deems necessary, but will not reduce the fees and charges than in
effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be
sufficient to meet the requirements of the Master Agreement.
In addition,the District has covenanted in the Master Agreement to prepare and adopt an annual
budget for the Wastewater System for each Fiscal Yew. Such budget will set forth in reasonable detail
the Revenues anticipated to be derived in such Fiscal Year and the expenditures anticipated to be paid or
provided for therefrom in such Fiscal Year, including, without limitation, the amounts required to pay or
provide for the payment of the Obligations during such Fiscal Year, the amounts required to pay or
provide for the payment of Maintenance and Operations Costs during such Fiscal Year and the amounts
required to pay or provide for the payment of all other claims or obligations required to be paid from
Revenues in such Fiscal Year,and will show that Revenues and Net Revenues will be at least sufficient to
satisfy the requirements of the Master Agreement. On or before September 1 of each Fiscal Year, the
District will file with the Trustee a copy of the adopted budget for such Fiscal Year. See APPENDIX C
— "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master Agreement' for additional
information.
Reserve Fund
The Trust Agreement provides for the funding of the Reserve Fund in an amount equal to the
"Reserve Requirement,"which is defined as an amount,as of any date of calculation,equal to the least of
(a) 10•/6 of the original aggregate amount of principal evidenced by the Certificates (or if the amount of
original issue discount or premium applicable to the Certificates exceeds 2%,than 10%of the issue price
of the Certificates), (b)the maximum amount of remaining Installment Payments, and the interest
thereon, coming due in any one Certificate Year, and (c) 125% of the average amount of remaining
Installment Payments, and the interest thereon, coming due in each Certificate Year. Amounts in the
Reserve Fund may be used to pay principal and interest evidenced by the Certificates to the extent that
amounts in the Principal Account and Interest Account are insufficient therefor. The Trustee shall
establish and maintain the Reserve Fund until all required Installment Payments, and the interest thereon,
are paid in full pursuant to the Installment Purchase Agreement and until the first date upon which no
Certificates are Outstanding. The Reserve Fund will be funded with a portion of the net proceeds of the
802639".5 9
Certificates in the amount of S which amount is sufficient to satisfy the Reserve
Requirement. See"ESTIMATED SOURCES AND USES OF FUNDS."
The District may substitute a Reserve Facility for all or a pan of the moneys on deposit in the
Reserve Fund by depositing such Reserve Facility with the Trustee so long as, at the time of such
substitution, the amount on deposit in the Reserve Fund, together with the amount available under such
Reserve Facility and any previously substituted Reserve Facilities, shall be at least equal to the Reserve
Requirement. Moneys for which a Reserve Facility has been substituted as provided in the Trust
Agreement shall be transferted, at the election of the District,to the Installment Payment Fund or upon
receipt of an Opinion of Counsel to the effect that such transfer, in and of itself,will not adversely affect
the exclusion of interest evidenced by the Certificates from gross income for federal income tax purposes,
to a special account to be held by the Trustee and applied to the payment of capital costs of the District,as
directed in a Written Request of the District. Any amounts paid pursuant to any Reserve Facility shall be
deposited in the Reserve Fund.
If a Reserve Facility is credited to the Reserve Fund to satisfy a portion of the Reserve
Requirement,the Trustee shall make a claim for payment under such Reserve Facility,in accordance with
the provisions thereof, in an amount which, together with other available moneys in the Reserve Fund,
will be sufficient to make said deposit in the Interest Account or Principal Account.
The moneys in the Reserve Fund and any Reserve Facility, shall be held in tout by the Trustee
for the benefit of the Owners and shall be used and disbursed only for the purposes and uses authorized in
the Trust Agreement. Moneys,if my,on deposit in the Reserve Fund shall be withdrawn and applied by
the Trustee for the final payment of principal and interest evidenced by the Certificates.
Amounts on deposit in the Reserve Fund which were not derived from payments under any
Reserve Facility credited to the Reserve Fund to satisfy a portion of the Reserve Requirement shall be
used and withdrawn by the Trustee prior to using and withdrawing any amounts derived from payments
under any such Reserve Facility. In order to accomplish such use and withdrawal of such amounts not
derived from payments under any such Reserve Facility, the Trustee shall,as and to the extent necessary,
liquidate any investments purchased with such amounts. If and to the extent that more than one Reserve
Facility is credited to the Reserve Fund to satisfy a portion of the Reserve Requirement, drawings
thereunder,and repayment of expenses with respect thereto, shall be made on a pro-rate basis(calculated
by reference to the policy limits available thereunder).
The Trustee shall, from amounts received from the District pursuant to the Installment Purchase
Agreement,deposit in the Reserve Fund an amount of money which,together with the amount already on
deposit therein and the amounts available under all Reserve Facilities, will be equal to the Reserve
Requirement. No deposit need be made in the Reserve Fund an long as there shall be on deposit therein a
sum equal to the amount which, together with the amounts available =der all Reserve Facilities, is at
least the Reserve Requirement. The Trustee shall promptly notify the District in writing if the auto=t on
deposit is less than the Reserve Requirement.
If, as a result of the scheduled payment of principal or interest evidenced by the Certificates,the
Reserve Requirement is reduced, the Trustee shall transfer an amount equal to the amount of such
reduction to the Installment Payment Fund. See APPENDIX C—"SUMMARY OF PRINCIPAL LEGAL
DOCUMENTS—Tout Agreement"
Limitations on Issuance of Additional Obligations
Senior OWigations The District may at my time incur Senior Obligations in addition to the
Existing Senior Obligations payable from Net Revenues as provided in the Master Agreement on a parity
SM63944.5 10
with all other Senior Obligations theretofore incurred but only subject to the following conditions under
the Master Agreement:
(1) Upon the incurrence of such Senior Obligations, no Event of Default will be continuing
under the Master Agreement;and
(2) Subject to the provisions of the Master Agreement, the District will have received either
one of the following:
(i) A Written Certificate of the District certifying that, for a 12 consecutive calendar
month period during the 24 consecutive calendar month period ending in the
calendar month prior to the incurrence of such Senior Obligations (which 12
consecutive calendar month period will be specified in such certificate or
certificates):
(A) Net Revenues,as shown by the books of the District,will have amounted
to at least 125% of Maximum Annual Debt Service on all Senior
Obligations to be outstanding immediately after the incurrence of such
Senior Obligations,and
(B) Net Operating Revenues,as shown by the books of the District,will have
amounted to at least 1000/. of Maximum Annual Debt Service on all
Obligations to be outstanding immediately after the incurrence of such
Senior Obligations.
For purposes of demonstrating compliance with the foregoing,Net Revenues and
Net Operating Revenues may be adjusted for(x)any changes in fees and charges
for the services of the Wastewater System which have been adopted and are in
effect on the date such Senior Obligations are incurred, but which, during all or
any part of such 12 consecutive calendar month period, were not in effect,
(y)customers added to the Wastewater System subsequent to such 12
consecutive calendar month period but prior to the date such Senior Obligations
are incurred, and (z) the estimated change in available Net Revenues and Net
Operating Revenues which will result from the connection of existing residences
or businesses to the Wastewater System within one year following completion of
any project to be funded or any system to be acquired from the proceeds of such
Senior Obligations;or
(ii) A certificate or certificates from one or more Consultants which, when taken
together, project that, for each of the two Fiscal Years next succeeding the
incurrence of such Senior Obligations:
(A) Net Revenues will amount to at least 125% of Maximum Annual Debt
Service on all Senior Obligations to be outstanding immediately after the
incurrence of such Senior Obligations,and
(B) Net Operating Revenues will amount to at least 100% of Maximum
Annual Debt Service on all Obligations to be outstanding immediately
after the incurrence of such Senior Obligations.
For purposes of demonstrating compliance with the foregoing,Net Revenues and
Net Operating Revenues may be adjusted for(x)any changes in fees and charges
for the services of the Wastewater System which have been adopted and are in
802631WI.5 11
effect on the date such Senior Obligations are incurred or will go into effect prior
to the end of such two Fiscal Year period,(y)customers expected to be added to
the Wastewater System prior to the end of such two Fiscal Year period, and (z)
the estimated change in available Net Revenues and Net Operating Revenues
which will result from the connection of existing residences or businesses to the
Wastewater System within one year following completion of any project to be
funded or any system to be acquired from the proceeds of such Senior
Obligations. For purposes of preparing the certificate or certificates described
above,the Consultant may rely upon financial statements prepared by the District
that have not been subject to audit by an independent certified public accountant
if audited financial statements for the period are not available.
See, also "FINANCIAL OBLIGATIONS — Existing Indebtedness" herein. The provisions
described above in paragraph (2)need not be complied with if the Senior Obligations being incurred are
Short-Term Obligations excluded from the calculation of Assumed Debt Service pursuant to clause(H)of
the definition thereof. See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS —
Definitions"herein.
The determination of Net Revenues for use in the calculation described above is more fully
described in APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master
Agreement—Senior Obligations"attached hereto. The provisions described in paragraph(2)above need
not be complied with for such portion of such Senior Obligations incurred for the purpose of providing
foods to refund or refmance such Obligations if(i)a portion(which may be all)of the Senior Obligations
are incurred for the purpose of providing fonds to refund or refinance any Obligations, (ii)upon such
refunding or refinancing, debt service on such refunded or refinanced Obligations, or debt service on
bonds,notes or other obligations of an entity other than the District,the debt service on which is payable
from Obligation Payments for such Obligations (the"Related Bonds"),will no longer be included in the
calculation of Assumed Debt Service either because such Obligations, or the Related Bonds of such
Obligations,will have been paid in full or because such debt service is disregarded pursuant to clause(L)
of the definition of Assumed Debt Service, and(iii)Assumed Debt Service in each Fiscal Year for the
portion of such Senior Obligations incurred for the purpose of providing funds to refund or refinance such
Obligations is less than or equal to 105% of Assumed Debt Service in such Fiscal Year for such
Obligations being refunded or refinanced(assuming for such purposes that debt service on such refunded
or refinanced Obligations, or debt service on the Related Bonds of such Obligations, is not disregarded
pursuant to clause(L)of the definition of Assumed Debt Service). See APPENDIX C—"SUMMARY
OF PRINCIPAL LEGAL DOCUMENTS — Master Agreement" attached hereto for additional
information.
The District may at any time incur Reimbursement Obligations with respect to Senior
Obligations.
Subordinate Obligations. The District may at any time incur Subordinate Obligations upon
satisfaction of the conditions provided in the Master Agreement. See APPENDIX C—"SUMMARY OF
PRINCIPAL LEGAL DOCUMENTS—Master Agreement"herein for a description of such conditions.
Insurance
The District will procure and maintain or cause to be procured and maintained casualty insurance
on the Wastewater System with responsible insurers,or provide self insurance(which may be provided in
the form of risk-sharing pools), in such amounts and against such risks (including accident to or
destruction of the Wastewater System) as are usually covered in connection with facilities similar to the
Wastewater System. The District will procure and maintain such other insurance which it will deem
advisable or necessary to protect its interests and the interests of the Corporation. See"THE DISTRICT
807638".5 12
—Risk Management"and APPENDIX C—"SUMMARY OF PRINCIPAL LEGAL DOCUMENT'S—
Master Agreement"herein.
Allocation of Installment Payments
Table 1 below sets forth the estimated Installment Payments with respect to the Certificates. Also
set forth are the payments due on Outstanding Senior Obligations.
Table 1
Estimated Installment Payments of the District
Installment Payments Outstanding Senior
Fiscal Year Relatine to Certificates Obligation Pavmentsrrl
Ending
June 30 Principal Interest Principal bluse, Total
2009M S 5,005,000 S 26,331,838.43
2010 21,390,000 44,966,574.90
2011 22,305,000 44,000,032.10
2012 22,915,000 43,002,750.50
2013 23,890,000 42,063,518.50
2014 38,975,000 40,944,649.45
2015 18,795,000 39,893,700.80
2016 19,530,000 39,108,952.40
2017 24,875,000 38,074,367.30
2019 30,845,000 36,897,514.10
2019 32,125,000 35,619,845.30
2020 33,530,000 34,301,655.50
2021 39,445,000 32,960,605.50
2022 31,775,000 32,064,709.92
2023 36,900,000 30,519,164.23
2024 38,685,000 28,824,971.14
2025 40,625,000 27,005,07337
2026 42,605,000 25,136,013.60
2027 44,735,000 23,159,153.27
2028 46,930,000 21,189,078.94
2029 49,050,000 19,099,195.43
2030 52,160,000 16940,920.23
2031 56,020,000 14,632,376.47
2032 56,775,000 12,094,795.09
2033 $7,025,000 9,425,913.78
2034 32,8%,000 5,267,406.12
2035 34,520,000 3,820,368.15
2036 36,230,000 2,301,531.16
2037 19,870,000 943500.00
Total $1,039,220,000 S770,479,075.98
n Exc udl es�paymdas with respect to the Refunded Certificates,which are to be defeased and refunded with the
proceeds of the Certificates. See"REFUNDING PLAN'herein
m Assumes a per arum interest rate of 3.75% for all variable rate obligations. Sea "FINANCIAL
OBLIGATIONS—Existing Indebtedness"and APPENDIX A—"COMPREHENSIVE ANNUAL FINANCIAL
REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED TUNE 30,
2007"herein.
cs) Excludes payments due on or before September 1,2008.
90263944.5 13
THE DISTRICT
Background
The Orange County Sanitation District is a public agency responsible for regional wastewater
collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United
States. The District provides service to an area with a population of approximately 2.5 million people in
the northern and central portion of the County by treating 230 mg/d of wastewater in Fiscal Year 2007-08.
The District serves approximately 81% of the County population in approximately 471 square miles, or
59%of the County.
The service area which comprises the District was originally formed in 1954 pursuant to the
County Sanitation District Act, as amended, Section 4700 at seq. of the Health and Safety Code of the
State. The District's service area originally consisted of seven independent special districts in the County
which were each responsible for matters relating to their individual districts. These special districts were
jointly responsible for the treatment and disposal facilities which they each used. The seven independent
districts were successors to the Joint Outfall Sewer Organisation, which was formed in 1923 among the
Cities of Anaheim, Santa Ana, Fullerton, and Orange, and the sanitary districts of Placentia, Buena Park
La Habra, and Garden Grove. The Joint Outfall Sewer Organisation constructed a treatment plant and
outfall in the early 1920's to serve its members. It was reorganized in 1947 and 1948 into seven county
sanitation districts - District Nos. 1, 2, 3, 5, 6, 7 and 11. These prior districts were formed based on
engineers' analyses of the gravity flows in the service area. District No. 13 was formed in 1985 and
District No. 14 was added in 1996. These districts were co-participants in a Joint Agreement which
provided for the joint construction,ownership,and operation of the prior districts'joint facilities.
In April 1998, at the request of the District's Board of Directors (the "Board of Directors"), the
Board of Supervisors of the County of Orange (the "County Board") passed Resolution No. 98-140
approving the consolidation of the than existing nine special districts into a new, single sanitation district,
to be known as the Orange County Sanitation District This action was designed to simplify governance
structures, reduce the sin of the Board of Directors, ease administrative processes, streamline decision-
making and consolidate accounting and auditing processes. The consolidation was effective on July 1,
1998.
Pursuant to the Resolution and Government Code Section 57500, the prior districts transferred
and assigned all of their powers, rights, duties, obligations, fmrctions and properties to the District, and
the District assumed all obligations of the prior districts which were several and not joint including,
without limitation, their obligations to repay the then outstanding certificates of participation. See
"FINANCIAL OBLIGATIONS—Existing Indebtedness"herein. The boundaries of the nine predecessor
special districts were initially used by the District to delineate separate revenue areas (the "Revenue
Areas") for budgeting and accounting purposes and in order to facilitate the imposition of fees and
charges imposed by the District See"DISTRICT REVENUES—Sewer Service Charges"herein.
The District is managed by the Board of Directors, whose members are appointed by twenty-five
member cities and agencies which are serviced by the District. The District is responsible for
construction and maintenance of a major portion of the wastewater collection, treatment and disposal
facilities within its boundaries. Revenue Area No. 7 is responsible for approximately 152 miles of local
sewers in its service area, whereas local sanitary districts, water districts and cities are responsible for
local sewers in the remainder of the District's service area.
trowsseo.s 14
Organization and Administration
The District is independent of and overlaps other political jurisdictions. There are many
governmental entities,including the County,that operate within the District's jurisdiction. These entities
are exclusively responsible for the administration of their own fiscal affairs,and the District is not entitled
to operating surpluses of,or responsible for operating deficits of,any of the other entities.
The twenty-five member Board of Directors is comprised of representatives from twenty-one
cities, unincorporated areas of the County and three special districts,including mayors of cities, members
of city councils, directors of independent special districts and one member from the County Board of
Supervisors. Several board committees, made up of members of the Board of Directors, consider topics
for action by the Board of Directors and make recommendations to the Board of Directors. The Chair and
the Vice Chair of the Board of Directors are elected every year by a majority of the Board of Directors,
and serve at the pleasure of the majority of the Board of Directors.
The District has a general manager, general counsel, administrative and operating staff, with
offices located at Reclamation Plant No. I in Fountain Valley,California. The District currently employs
an administrative and operating staff of over 600 under the direction of its General Manager, James D.
Ruth.
James D. Ruth is the District's General Manager, and has served in that capacity since
December 2005. Prior to that time, from January 2003 to October 2004, Mr. Ruth served as Chief
Executive Officer for the County of Orange. Mr. Ruth had previously provided 22 years of service to the
city of Anaheim as parks and recreation director, deputy city manager, assistant city manager and chief
executive officer,a post he held for 1 I years.
Robert P. Ghirelli, Ph.D. is the District's Assistant General Manager, and has served in that
capacity since July 2006. Mr.Ghirelli previously served as Director of Technical Services for the District
since his joining the District in 1998. Prior to joining the District, Mr. Ghirelli served for just over a year
as managing principal of the Los Angeles office of a national environmental consulting firm, served 20
years in supervisory positions with the State and Regional Water Boards,with 13 years Executive Officer
of the California Regional Water Quality Control Board,Los AngelesNentum Region.
Lorenzo Tyner is the District's Director of Finance and Administrative Services. In
September 2005, Mr. Tyner joined the District with nearly 15 years of public finance and budgeting
experience,most recently serving as the Los Angeles Unified School District Budget Director and Deputy
Chief Financial Officer. Mr. Tyner previously worked in large government organizations including the
City of Los Angeles and the Los Angeles County Metropolitan Transportation Authority and private
sector companies IBM Global Services and Northrop.
James Herberg P.E. is the District's Director of Engineering, and has served in that capacity
since November 2006. Prior to becoming Director of Engineering, he was the District's Director of
Operations and Maintenance. Mr. Herberg has over twenty years of experience in water and wastewater
including project management, construction management, design, strategic planning, and operations &
maintenance.
Ed Torres is the District's Director of Technical Services for the District. He has served in this
position since November 2006. Prior to joining the District in 1991, Mr. Torres served in a professional
capacity for the California State University System and TRW Electronics and Defense Sector. Mr.Torres
has twenty-four years of public and private sector experience in protecting public health and the
environment.
90263E443 15
Nick Arhontes, P.E. is the District's Director of Operations and Maintenance and has served the
District since 1988. Mr.Arhontes has over 30 years of experience managing various engineered systems
in the private and public sectors regionally, nationally,and internationally.
Services
The District owns and operates regional wastewater collection, treatment, and disposal facilities
for the metropolitan area in the northern and central portion of the County. The District receives
wastewater from the collection systems of the cities, sanitary districts and unincorporated areas of the
County located within the District. See"THE DISTRICT—Service Areas"herein.
Generally, local agency systems collect wastewater from residential and industrial customers and
convey the wastewater to District bunk sewer pipelines for conveyance to the District's wastewater
treatment plants.
The District's staff is responsible for operating and maintaining the District's infrastructure,
although some operations are provided by external contractors.
Currently, the District has established supply contracts for all chemicals necessary to the
operation and maintenance of the facilities of the District The District has sufficient standby systems in
the event of equipment failures or system outages.
Service Area
The map on the inside cover of this Official Statement shows the District's boundaries and
selected cities located within the District District boundaries were originally established in 1947 and
1948 based on drainage basins. As the existing cities have grown and new areas have incorporated, city
limits have come to overlap District boundaries. The District currently serves an approximately 471
square-mile area including 23 of the County's 33 cities and unincorporated areas of the County. The
District serves a population of approximately 2.5 million residents and owns sanitary sewerage facilities
with a replacement value of approximately$6.26 billion.
[Remainder of page intentionally left blank.]
802638443 16
Table 2 below sets forth the estimated populations of cities and unincorporated areas served by
the District as of January 1,2008.
Table 2
Estimated Populations of Cities and Unincorporated Areas
Served by the Orange County Sanitation District
As of January 1,2008
Qtx Population
Anaheim 346,823
Brea 40,001
Buena Park 82,768
Costa Mesa 113,955
Cypress 49,541
Fountain Valley 57,925
Fullerton 137,437
Garden Grove 173,067
Huntington Beach 201,993
Irvine 209,806
La Habra 62,635
La Palma 16,176
Los Alamitos 12,191
Newport Beach 84,554
Orange 140,849
Placentia 51,727
Santa Ana 353,194
Seal Beach 25,986
Stanton 39,276
Tustin 74,218
Villa Park 6,259
Westminster 93,027
Yorba Linda 68,312
Cities Subtotal 2,441,790
Unincorporated Areas 81,000
(estimated)
Total 2,522,790
Sources: State of California Department of Finance, Demographic Research Unit for city population data: Orange
County Sanitation District for population of unincorporated areas.
Employees
As of August 1, 2008, the District had 641 full-time equivalent ("FTE") staff positions. Most of
the employees who occupy these positions are represented by recognized employee organisations,which
include the following: the Orange County Employees Association ("OCEA"), the International Union of
Operating Engineers—Local 501 ("Local 501"), the Supervisor Group, and the Professional Group. As
of August 1, 2008, the District had 604 represented and non-represented employees. Total represented
employees as of August 1,2008 numbered 554, as follows: 96 were represented by the OCEA, 202 were
80263844.5 17
represented by Local 501 and 256 were represented by the Supervisor and Professional Groups. New
agreements with each of these employee organizations took effect on July 1,2007. The OCEA and Local
501 agreements are in effect through June 30, 2011; the Supervisor and Professional Group agreements
are in effect through June 30,2010. The OCEA has represented administrative/clerical,technical services
and engineering employees since 1979. Local 501 has represented operations and maintenance
employees since October 1985. The Supervisor and Professional Groups have represented supervisory
and professional employees since 1991. The District has historically enjoyed a good working relationship
with the employee organizations and has experienced no work stoppages by represented personnel in the
Past.
For a description of the Orange County Employee's Retirement System, in which the District
participates, and the District's deferred compensation plan, we "Retirement Plan" below and Note 7 to
the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year
Ended June 30,2007,set forth in Appendix A.
Retirement Plan
The District participates in the Orange County Employee's Retirement System ("OCERS"), a
cost-sharing multiple-employer, defined benefit pension plan which is governed and administered by a
nine-member Board of Retirement OCERS was established in 1945 under the provisions of the County
Employees Retirement Law of 1937,and provides members with retirement,death,disability,and cost of-
living benefits.
All District full-time employees participate in OCERS. The amount of the retirement allowance
is based upon the member's age at retirement, the member's "final compensation" as defined in
Section 31462 of the Retirement Law of 1937, the total years of service under OCERS, and the
employee's classification as a Tier 1 or Tier 11 member. As of July 1, 2006, the formula to calculate
retirement benefits was enhanced to 2.5%at age 55,or employees retiring at age 55 or older receive 2.5%
of their average salary for every year of service. Average salary is the highest consecutive 12 months of
compensation for Tier 1 employees and the highest consecutive 36 months of compensation divided by
three for Tier 11 employees. Benefits fully vest under the OCERS retirement plan on reaching five years
of service. Employees who retire at or after age 50 with in or more years of service are entitled to an
annual retirement allowance. OCERS also provides death and disability benefits.
As a condition of participation under the provisions of the County Employees Retirement Law of
1937, members are required to contribute a percentage of their annual compensation to OCERS. The
District is required to make periodic contributions to OCERS in amounts that are estimated to remain a
constant percentage of covered employees' compensation such that, when combined with covered
employees' contributions,will Cully provide for all covered employees' benefits by the time they retire.
A current comparison of OCERS costs for Fiscal Years 2003.04 through 2007-08 and projected
costs for Fiscal Years 2008-09 through 2009-10 is shown in the following table.
90263644.5 18
Table 3
Orange County Sanitation District
Comparison of OCERS Costs for Fiscal Years 2003-04 through 2007-08
and Projected Costs for Fiscal Years 2008-09 through 2009-10
Fiscal Year Ratelul CosP=I
2003-04 9.15% $ 3,668,650
2004-05 12.37 5,524,673
2005-06 15.21 7,416,556
2006-07 19.78 9,848,854
2007-08 20.47 10,877,737
2008-091r1 21.34 12,392,491
2009-10,31 21.34 13,221,264
Req� uired contribution as a percent of covered payroll. Includes amortization of Unheeded Actuarial Accrued
Liability.
cm Amounts represents employer contributions made by the District.
ert Projected.
For Fiscal Years 2003-04 through 2007-08, the District's required contribution was equal to the
contribution that the District actually made. As noted the required contribution set forth above includes
amortization of Unfunded Actuarial Accrued Liability ("UAAL"). For the Fiscal Year ended June 30,
2008, total payroll costs of employees covered by OCERS was $53,148,097. As of the December 31,
2007 valuation, OCERS has an aggregate UAAL ratio of 72.9%, for a total UAAL of$2.71 billion. The
District expects the next OCERS valuation to occur on or about December 31,2008.
For more information regarding OCERS and the District's retirement plan as of June 30, 2007,
see Note 7 to the Comprehensive Annual Financial Report of the Orange County Sanitation District for
Fiscal Year Ended June 30,2007 set forth in Appendix A. The Comprehensive Annual Financial Reports
of the Orange County Employees Retirement System are available on the OCERS website at
http:llrmvrv.ocers.org. The information on such website is not incorporated herein by such reference or
otherwise.
Other Post-Employment Benefits
The Governmental Accounting Standards Board ("GASB") in April 2004 issued Statement
No.43, which requires state and local governmental employers to determine, on an actuarial basis, the
total liability of post-employment benefits other than pension benefits(known as other post-employment
benefits or "OPEB"), including healthcare and life insurance expenses and related liabilities, and an
annual required contribution to fund such liabilities. In June 2004, GASB issued Statement No.45,
which requires state and local governmental employers to fund the actuarially determined annual required
contribution ("ARC")for its OPEB or record the entire amount of the unfunded liability of its OPEB in
its financial statements. The District was required to implement GASB Statement No.43 for the Fiscal
Year ended June 30, 2007, and is required to implement GASB Statement No.45 for the Fiscal Year
ended June 30,2008.
The District's OPEB program currently includes medical and prescription drug benefits and a
program of cash payments, known as Additional Retiree Benefit Account ("ARBA") benefits. Benefits
vest upon retirement after qualifying public service of ten years. Most of the District's retirees under the
80265244.5 19
age of 65 are covered under the same medical and prescription drug plans as active employees of the
District,but an additional retiree-only fee for service plan called"Blue Cud"is also available.
According to the District's actuary, Demsey Filliger Associates (the "Actuary"), the unfunded
OPEB liability as of July 1,2007 is approximately$17.4 million. The ARC is$1,764,000 for Fiscal Year
2008-09. Calculation of the ARC is based on the present value of benefits accruing in the current year, a
30-year amortization of the unfunded OPEB liability and an assumed rate of return on investments in the
retiree fund of 5%per annum.
The Actuary has proposed various methods of funding the District's future OPEB liability and the
District is presently considering such proposed alternatives. The District does not believe that its OPEB
liability will have a material impact on its operational results.
Risk Management
As of the date hereof, the District has in force basic all risk property and casualty insurance,
including theft, fire, flood, terrorism and boiler and machinery losses to the Wastewater System. The
District is self-insured for portions of workers' compensation,property damage and general liability. The
self-insurance portion of workers' compensation is $500,000 per person per occurrence with outside
excess insurance coverage to the statutory limit The self-insured portion for property damage covering
fire and other disasters is $25,000 per occurrence with outside excess insurance coverage to $1 billion.
The self-insured portion for property damage covering flood is $100,000 per occurrence with outside
excess insurance coverage to $300 million. The District is self-insumd for all property damage from the
perils of earthquakes. See "DISTRICT REVENUES — Reserves." The District also maintains outside
comprehensive boiler and machinery insurance, including business interruption insurance, with a $100
million limit with deductibles ranging from $25,000 to$350,000. The District is self-insured for general
liability coverage up to$250,000,with excess geneml liability coverage up to$30 million.
During the past three fiscal years there have been no settlements in excess of covered amounts.
Claims against the District are processed by outside insurance administrators. The District believes that
there are no unrecorded claims as of August 1, 2008 that would materially affect the financial position of
the District.
For more information regarding the District's insurance coverage as of June 30,2007,sec Note I
to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year
Ended June 30,2007 set forth in Appendix A.
Existing Facilities
The District's Wastewater System presently consists of two wastewater treatment plants, an
influent metering and diversion structure, 16 off-plant pump stations, various interplant pipelines and
connections, and the ocean outfall facilities. The District's Wastewater System includes approximately
568 miles of sewers within 12 trunk sewer systems, 152 miles of local sewers located within Revenue
Area No. 7, two treatment plants, two discharge outfalls and two emergency weir outlets. The existing
treatment plants have a rated primary treatment capacity of 366 mg/d,including standby capacity.
Treatment Plant No. 1 ("Plant No. 1")is located in the City of Fountain Valley,about four miles
from the coast, adjacent to the Santa Ana River. Secondary treatment capabilities are provided by a
trickling filter plant and a conventional air activated sludge plant. Up to 15 mg/d of secondary treated
effluent is conveyed to an Orange County Water District(the"OCWD")plant for tertiary treatment prior
to ground water recharge.
90263P4.5 20
Treatment Plant No. 2('Plant No. 2")is located in the City of Huntington Beach, 1,500 feet from
the ocean, at the mouth of the Santa Ann River. Secondary treatment capabilities are provided by a pure
oxygen activated sludge plant.
The District employs several phases in the treatment of wastewater. The first phase, preliminary
treatment,removes debris such as eggshells, send and biodegradable items. Sae also"Preferred Level of
Treatment" and "Biosolids Management" below. In the next phase, primary treatment, wastewater is
pumped to large settling basins. The liquids are separated from the remaining solids which settle or float
as the wastewater passes through large settling basins called clarifiers. The settled solids are sent to solids
treatment facilities. Approximately half of the primary treated wastewater flows into the ocean outfall
pumping station where it is blended with secondary treated wastewater before being discharged into the
ocean. The other half is sent to secondary treatment for farther processing. During secondary treatment,
the wastewater is placed in aeration basins to which naturally occurring bacteria are added to remove
most of the remaining dissolved and suspended microscopic organic solids. The treated wastewater from
both plants is mixed together at Plant No. 2, where it is then pumped through the ocean outfall pipe that
extends five miles offshore.
Table 4 below sets forth the treatment plants' approximate current and future treatment capacities.
Table 4
Wastewater System Treatment Capacities
(mg/d)
2007-08 Existing Primary Total Planned
Actual Treatment Existing Secondary S conda
Flows Capacity Treatment Capacity Ca aci (71
Plant No. 1 92 204 122 182
Plant No. 2 129 168 90 ISO
Aggregate Treatment 221 372 212 332
Plant Facilities
07 Thenned Total Capacity" is based on the Strategic Plan for planned capacity by 2020, which
estimated the District's requirements to meet future expected primary and secondary capacity demands.
The District has the capability to divert a portion of the influent flow from Plant No. 1 to Plant
No. 2 through interplant connections. A portion of the flow destined for Plant No. 2 can also be diverted
to Plant No. 1. The treated wastewater from Plant No. 1 flows by gravity to the outfall system through
interconnecting lines. The combined Plant No. I and Plant No. 2 effluent is then pumped through a
120-inch diameter ocean outfall which is approximately five miles long. The last mile of the outfall pipe
is a diffuser that dilutes the wastewater with seawater in a ratio of 148 parts seawater to one pan treated
wastewater at an average depth of 185 feet. The 120-inch outfall has a capacity of 480 mg/d at high tide.
A smaller 78-inch diameter outfall that terminates at a shallower depth is still maintained, although it is
reserved for use in emergencies. This smaller outfall is estimated to have a capacity of approximately 230
million gallons a day. There is an interplant gas pipeline between Plant No. 1 and Plant No. 2 which
allows digester gas(which is used as fuel for many of the facilities' engines)from one plant to be used at
the other to balance the supply and demand,which results in efficient gas utilization.
90263944.5 21
Permit,Licenses and Other Regulations
The Wastewater System is subject to regulations imposed by the 1972 Clain Water Act, Public
Law 92-500 (the "Clean Water Act"), the California Environmental Quality Act of 1970, as amended
("CEQA")and the Federal Clean Air Act. The regulatory requirements are administered by the United
States Environmental Protection Agency(the"EPA")and the California Regional Water Quality Control
Board("RWQCB"). Regulations of these agencies deal primarily with the quality of effluent which may
be discharged from the treatment plant and the nature of waste material discharged into the collection
system. The Clean Water Act directs the EPA to monitor and to regulate the discharge of pollution into
navigable waterways and to enforce the requirement that all wastewater treatment plant in the nation
provide full secondary treatment for sewage. In 1977, Congress amended the Clean Water Act to allow
waivers of secondary treatment standards for certain ocean dischargers if they can demonstrate, to the
satisfaction of the EPA, that significant adverse environmental impacts would not occur. The District
currently has all applicable permit and licenses necessary to operate it facilities.
The District has discharged treated wastewater into the Pacific Ocean under a permit issued by
the EPA and the RWQCB. The discharge permit included a waiver under the 301(h) provisions of the
Clean Water Act, allowing for less than full secondary treatment based on an ocean discharge of
sufficient depth,distance and dilution. The permit was initially issued in 1985 and was the first modified
Section 301(h) permit issued to a major wastewater treatment facility. The District's permit, which
included the Section 301(h)waiver of secondary treatment requirements,was issued on May 6, 1998 and
expired on June 8,2003.
In July 2002, the Board of Directors approved a change from the existing level of treatment, a
blend of 50% advanced primary and 50% secondary treated wastewater, to full secondary treatment
standards. See "Preferred Level of Treatment" and "Urban Runoff' below. As a result, the District
established a policy to subject all wastewater discharges into the ocean to secondary treatment standards.
San "Preferred Level of Treatment" below. To implement this policy, District staff was directed to
immediately proceed with the planning, design, and implementation of treatment methods with the
expressed purposes of eliminating the need for the permit wavier received under Section 301(h).
Following determination by the Board of Directors in July 2002 to implement full secondary
standards, staff prepared the Secondary Treatment National Pollutant Discharge Elimination System
("NPDES") Permit Application that was required to be submitted to the regional office of the EPA and
the RWQCB in December2002. The NPDES Permit is separate and apart from the permit waiver
received under Section 301(h), and once awarded would negate any necessary waiver. Achieving
secondary treatment standards was originally projected to take six years to complete, with completion
expected in December 2012. Because ocean discharge permit are issued for only five years, and the
EPA has no authority to waive the discharge limits requirements or grant a longer permit (except in
accordance with Sec.301(h)),the District decided to voluntarily seek a consent decree concurrently with
the issuance of the new ocean discharge permit. This negotiated consent decree (the "Consent Decred")
approves the schedule and decrees that no penalties will be imposed for discharges that exceed the
secondary treatment limit during the period of construction. The Consent Decree was signed by the
District, the EPA and the RWQCB and filed with the U.S. District Court on November 15, 2004. The
District is in compliance with the decree and has successfully completed three of the seven milestones
within the specified time deadline required by the decree.
The South Coast Air Quality Management District ("AQMD") is the regional governmental
agency charged with implementing the Federal Clean Air Act AQMD permit are required before a
sewage treatment improvement project can be constructed. Such permits are project specific and contain
construction process requirements, required equipment and standards for predicted air quality. After
construction is completed the AQMD issues an operation permit. These permit are also project specific
and contain air quality standards and other appropriate operational guidelines. Most of the District's
80263W.5 22
facilities are enclosed in order to trap emissions,which are cleaned by air scrubbers that remove odors. In
addition,the District has implemented an air quality risk reduction program which includes a twenty-year
plan to improve treatment plant operations and reduce industrial toxic pollutants. The District currently
has all necessary AQMD permits to operate the Wastewater System.
Capital Improvement Program
The Master Plan. The District's 1989 master plan consisted of a 30-year plan of action for
managing wastewater activities to the year 2020, entitled "2020 Vision, Action Plan for Wastewater
Management and Environmental Protection 1990-2020"(the"Master Plan'). The Master Plan integrated
research facilities planning, environmental analysis, toxic control, water conservation and reclamation,
sludge reuse, other wastewater programs and financial planning into a single unified approach. In
connection with the preparation of the Master Plan,an in-depth land use study was performed,resulting in
the creation of a uniform land use classification system and a map of the District's service area. Land use
designations and unit flow factors were used to project wastewater flows in the District's trunk sewers for
then present conditions, through the yew 2020. These flows were included in a computer model of the
District's Wastewater System which identified future sewer capacity improvements. A thirty-year capital
improvement program was developed to implement the required sewer capacity improvements. This land
use study included the collection and compilation of the latest available land use plans,reports, maps and
studies from the cities within the District and the County, and interviews with the planning directors or
key staff within the District. Land use planning within the District's service area is the responsibility of
the County for unincorporated areas and cities for areas within their boundaries. The California Coastal
Commission has some land use authority within the District's coastal areas.
The Strategic Plan. In October 1999, the District updated the Master Plan with a strategic plan
(the "Strategic Plan'). The Strategic Plan updated the planning process set forth in the Master Plan
through the year 2020 and defined the District's goals, responsibilities, and requirements over the then
following twenty years, including projections through the assumed "build-out" of the District's service
area to the yew 2050. In addition to updating the population and flow assumptions, the Strategic Plan
provided for an operations and financial plan, including a review of the collection,treatment and disposal
facilities, and the District's ocean entrails. Studies on a preferred level of wastewater treatment and in-
sourcing of the ocean monitoring program were prepared and incorporated in the Strategic Plan. Water
and air regulatory agencies require that all wastewater facilities be designed to meet the needs of
anticipated growth and provide a reasonable reserve capacity. With the adoption of the Strategic Plan,the
District's planning process met these requirements by shifting its approach for the development of master
plans from a"size and build"approach to a broad-based,multi-agency cooperative evaluation process.
Many of the assumptions used to develop the Strategic Plan, such as inflation, the projected
service population, the level of building activity, and the volume of wastewater treated, were quite
different from what was assumed ten years earlier under the Master Plan. Critical factors such as
population growth, new construction, the volume of wastewater delivered to the plants and viable water
conservation and reclamation programs were reevaluated.
Interim Strategic Plan. In June 2002, an Interim Strategic Plan Update (the "Interim Strategic
Plan')was completed to further update and revise many of the assumptions used to develop the District's
previous planning documents,including population and land-use projections,the level of building activity
in the District's service area and the volume of wastewater to be treated. The Interim Strategic Plan also
provides for an operations and financial plan including a review of the District's collection,treatment and
disposal facilities, and a study of the District's ocean initial system. In addition,potential changes in the
regulatory climate for the beneficial reuse of biosolids were also considered.
On July 17, 2002, the Board of Directors approved Resolution No. OCSD 02-14, "Establishing
the Policy for Level of Treatment of Wastewater Discharged into the Ocean." This resolution established
80263944.5 23
the District's policy to treat all wastewater discharges into the ocean to secondary treatment standards
thereby providing for continued public safety, marine ecosystem protection, and water reclamation
opportunities. To implement this policy, the District staff was directed to immediately proceed with the
planning, design, and implementation of treatment methods that will allow the agency to meet Clean
Water Act secondary treatment standards. The District currently estimates that it will take approximately
four years (through December 2012) and total capital improvement costs of $630.6 million to reach
secondary treatment discharge standards. In the interim, the District will operate the plants to maximin
available secondary treatment and to reduce effluent biochemical oxygen demand and suspended solid
discharges below currently allowed limits. The then current 50% secondary portion would increase
incrementally as operations change and new facilities are constructed and placed in service. See
"Preferred Level of Treatment"below.
The District's planning process for development of the Interim Strategic Plan incorporated an
analysis of population growth, dry weather and peak wet weather flows and the maximum use of existing
facilities. The population of the District's service area was projected to grow to 2.7 million by the year
2020. Average flow rates at both treatment plants were projected to increase to 278 mg/d by 2020 (134
mg/d of treatment at Plant No. I and 144 mg/d at Plant No.2), up 26% from the Fiscal Year 2007-08
flow.
In combination with the Interim Strategic Plan, the District developed its current Capital
Improvement Program ("CIP"). The District expects to meet future demands on the Wastewater System
through the CIP. This program has been developed to satisfy anticipated regulatory requirements,
increased population, additional treatment requirements, conservation, energy and other resource savings
considerations,odor control improvements,and air quality protection needs. Through 2020,the District's
CIP is scheduled to accomplish:
• Major rehabilitation of the existing headworks, primary treatment, secondary treatment,
outfsll pumping,and solids handling facilities at both treatment plants;
• Replace and rehabilitate 16 of the District's outlying pumping stations, and 44 trunk
sewer improvement projects;
• Reduce fence line odor to levels that do not generate odor complaints;
• Disinfect the District's ocean discharge to reduce bacterial levels below State bathing
standards;
• Reclaim 70 mg/d of the District's effluent, or nearly one-third of the total daily flow
(Crromdwater Replenishment System);and
• Achieve full secondary treatment standards.
CIP Validation Study. In preparation of each year's Budget,the District conducts an annual CIP
validation study to ensure that all projects are necessary and that most recent cost estimates are accurate.
As identified in the Interim Strategic Plan, and verified through the 2008 CIP Validation Study and
Secondary Treatment Review, $456.1 million of additional capital improvements over the next four years
(through December 2012)are needed to reach full secondary standards.
The 2008 CIP Validation Study resulted in proposed revisions to the CIP. The proposed CIP now
consists of 114 individual capital projects through Fiscal Year 2020-21 at a total cost of$2.48 billion,
approximately $1 billion of which has been spent to date. The bulk of construction is scheduled during
the next six years, with average annual expenditures of$200 million. Implementation of full secondary
treatment standards is scheduled to be completed on or before December 31, 2012. A summary of total
80263844.5 24
estimated capital costs for the proposed CIP for Fiscal Years 2008-09 through 2020-21 is set forth in
Table 5 below.
Table 5
Capital Improvement Program—Estimated Costs
Fiscal Years 2008-09 through 2020-21to
Proiect Cost
Collection System Capacity $ 142,693,300
Collection System Repair,Rehabilitation,Replacement 194,679,800
Treatment Plant Capacity 113,537,750
Additional Secondary Treatment 50,561,150
Groundwater Replenishment System,Phase 1 2,766,000
Improved Treatment 506,80 AM
Treatment Plant Repair, Rehabilitation,Replacement 415,743,"0
Support Facilities 47,904,100
Total Validated Capital Improvement Program S1A74.686.000
r All�cosreated as of August 1,2008.
Source: Orange County Sanitation District.
The proposed CIP contemplates expenditures of$373.7 million in Fiscal Year 2008-09. Of this
total, the largest cash outlay within the plant facilities category is $100.1 million for a new secondary
treatment system at Reclamation Plata No. 1, with a total project cast of$265.9 million. New trickling
filters at Treatment Plant No.2 will require$73.7 million in Fiscal Year 20",with a total project cost
of$221.2 million. Another $25.8 million is required for Headworks improvements at Treatment Plant
No.2,with a total project cost of$254.5 million. The proposed CIP contemplates expenditures of$228.9
million in Fiscal Year 2009-10. Of this total,the largest expenditure within the plant facilities category is
$56.9 million for new trickling filters at Treatment Plant No.2. The new secondary treatment system at
Reclamation Plant No. I is expected to require $21.5 million in Fiscal Year 2009-10. Another $13.2
million during this period is proposed for Headworks replacement at Treatment Plant No.2.
The proposed CIP's largest collection system project for Fiscal Year 2008-09 is$22.4 million for
the Bitter Point Force Main Rehabilitation project. For Fiscal Year 2009-10, the three largest projects
include$18.0 million for replacement of the Rocky Point Pump Station,$13.1 million for replacement of
the Bitter Point Pump Station and $7.1 million for the Gisler-Redhill System Improvements, Reach B
project The total budgets for these three projects are $31.0 million, S36.5 million and $9.4 million,
respectively.
Groundwater Replenishment System
The District has taken a multi-jurisdictional approach to planning for capital facilities because
many of the methods for reducing or managing Bows involve otherjurisdictions. One such project is the
Groundwater Replenishment System ("GWRS"). In March 2001,the District entered into an agreement
with the OCWD to design and construct Phase 1 of the GWRS. The cost of this Phase is to be paid
equally (50% shares) by each agency. The GWRS is a joint effort by the two agencies to provide
reclaimed water for replenishment of the Orange County Groundwater Basin and to augment the seawater
intrusion barrier. The GWRS is planned for phased expansions. Phase I recently commenced and once it
becomes fully operational Phase I is expected to produce approximately 72,000 acre-feet per year of
recycled water. Future phases will be funded solely by OCWD and could expand capacity up to 145,600
80263644.5 25
acre-feet per year. With the completion of Phase 1,the GWRS has the capacity to divert up to 100 mg(d
of flow from the District's ocean discharge.
As of June 30, 2008, the total estimated cost of GWRS Phase 1 was $496.8 million. Of this
amount, approximately $90.0 million has been reimbursed through grants from the U.S. Environmental
Protection Agency,the U.S.Bureau of Reclamation,the State Water Resources Control Board and others.
The District's estimated share is $248.4 million. Costs incurred by the District through June 30, 2008
total $204.1 million. As noted above, Phase 1 of the GWRS has commenced operations and the GWRS
will require a cash outlay of$2.8 million in Fiscal Year 2008-09 to complete construction,commissioning
and contract closeout retention payments.
Preferred Level of Treatment
In July 2002, the Board of Directors approved a change from the existing level of treatment, a
blend of 50% advanced primary and 50% secondary treated wastewater, to full secondary treatment
standards. The reasoning behind the decision to move to full secondary standards included (I)the
possibility(no matter how remote)that bacteria from the ocean outfall may at times reach the shoreline,
(2)upgraded treatment will aid additional water reclamation with the Orange County Water District,
(3)and the public clearly stated preference for upgrading wastewater treatment at the time.
In an effort to eliminate most bacteria from being released from the ocean outfall, in 2002 the
District began to use chlorine bleach to disinfect the effluent and then apply sodium bisulfate to remove
any remaining chlorine prior to releasing the treated wastewater to the ocean. In order to protect the
animal life living in the ocean, the District continues to take measures to limit the chlorine residual to a
very low level-essentially non-detectable. This mode of disinfection is anticipated to occur for the short-
term, possibly two or three years, while the District studies, designs and constructs permanent facilities,
and considers alternate disinfection technologies. Beginning in Fiscal Year 2006-07, the addition of
disinfection treatment required an annual outlay of$7 million in additional chemicals within the operating
budget of the District.
Following determination by the Board of Directors in July 2002 to implement full secondary
standards, staff prepared the Secondary Treatment NPDES Permit Application that was required to be
submitted to the regional office of Environmental Protection Agency ("EPA") and the RWQCB in
December 2002. An NPDES permit has been issued to the District and the District is currently operating
under the Consent Decree. See"THE DISTRICT—Permits,Licenses and Other Regulations."
Currently, the District estimates that it will take approximately four years and require additional
capital improvement costs of approximately $456.1 million to add additional secondary treatment
capacity to the Wastewater System, with completion expected in December 2012. In addition, operating
costs will increase by approximately $7.2 million annually upon completion of facilities necessary to
meet secondary treatment standards. In the interim, the District will operate the plants to maximize
available secondary treatment and to reduce effluent biochemical oxygen demand and suspend solid
discharges below those currently allowed limits. The District expects its secondary treatment capacity to
increase incrementally each year as operations change and new facilities are constructed and placed in
service.
Biosolids Management
The District produces approximately 650 tons per day(tpd) of digested and dewatered biosolids.
By 2012, when new secondary treatment processes are expected to be fully operational, the District's
biosolids production is projected to increase to 830 tpd, though with the planned installation of
centrifuges,such production is expected to decrease to 750 tpd in 2014 and 700 tpd in 2016. The District
relies on the following technologies and locations for the management of its biosolids: land application of
80263s+a.5 26
biosolids in Arizona, land application of chemically-stabilized biosolids in Kem County, composting to
high-grade biosolids in Riverside County, Kem County and La Paz County, Arizona, and landfilling of
biosolids in Yours County,Arizona.
Counties throughout California and Arizona have developed,or are in the process of developing,
ordinances that severely restrict or ban the land application of biosolids. In June 2006, Kern County
voters approved an anti-sludge initiative that bans the land application of biosolids. It has become clear
that certain land application options currently available to the District are anticipated to be eliminated in
the near future due to these developments. The District, and most of California's wastewater agencies, is
working to develop sustainable products and management locations for its biosolids.
The dynamic regulatory issues, land application ordinances and bans, and public perception
challenges have prompted the District, with the help of CFI2WEII, to develop a Long-Range Biosolids
Management Plan("LRBMP"). This LRBMP was approved by the Board in December 2003. The goal
of the LRBMP was to develop a sustainable, reliable, and economical program for long-range biosolids
management providing environmentally sound practices that meet the stringent federal, state, and local
regulatory requirements. The LRBMP mcommendations included new in-plant technologies to reduce
the volume of biosolids, explore the production of high-grade biosolids products, and move into the
energy and fuel production and compost markets.
As a result of the LRBMP recommendations,the existing Synagro biosolids management contract
was amended in April 2004 to have 250 tons per day of the District's biosolids composted at Synagro's
South Kern Industrial Center("SKIC")facility. This composting facility is receiving its full allocation of
contracted biosolids. In May 2006,the District entered into a contract with EnerTech Environmental,Inc.
to convert 225 tons of biosolids per day to a renewable fuel at EnerTech's proposed facility in Rialto,
California. The EnerTech solution is a mhdively new, patented heat treatment process that increases the
ability to dewater biosolids in order to maximize the efficiency of the production of fuel. By decreasing
the moisture content of biosolids prior to drying, a smaller dryer is needed, thus reducing capital and
energy consumption. The fuel product will be recycled and mused, under agreements with area cement
kilns and other fuel users. Residual ash from the fuel combustion becomes part of the cement product,
resulting in no residual waste product liability. The EnerTech facility is expected to begin receiving
biosolids from the District in October,2008.
Also in April 2005,the Board of Directors approved the amendment of the existing memorandum
of understanding ("MOU") with South Orange County Wastewater Authority ("SOCWA") for
preliminary facility design, permitting, and community relations activities for the development of a
composting facility at the Prima Deshecha Landfill in South Orange County. Under the previous existing
MOU, SOCWA and the District has worked with the Orange County Integrated Waste Management
Department's Biosolids Committee to site an enclosed bimolids and green waste composting facility at
the Prima Deshecha Landfill. The proposed"South Orange County Composting Facility"would take in
approximately 100 to 110 tons of biosolids daily from the District and SOCWA and,combined with like
amounts of wood chips and yard trimmings, produce approximately 65 to 75 tons of compost per day.
The MOU reflects a 50-50 participation commitment and ownership in the facility between SOCWA and
the District, and consent to initiate and fund the tasks for the initial planning, permitting and concept
design of the project This project is still in the development process.
As a result of the transition to biosolids-based compost and energy products the cost to the
District for biosolids management has increased. The Fiscal Year 2006-07 management budget for
biosolids was $12.8 million. The Fiscal Year 2007-08 management budget for biosolids was $14.3
million. The actual cost of biosolids management in Fiscal Year 2006-07 and Fiscal Year 2007-08 was
$11.7 million and $13.5 million, respectively. The Fiscal Year 2008-09 biosolids management budget is
$19.9 million.
60263944.3 27
Urban Runoff
In June 2002, legislation was passed that allows the District's charter to include permissive
language authorizing the diversion and management of dry weather urban runoff flows. This legislation
allows the District to acquire,construct,operate,maintain, and furnish facilities for the diversion of urban
runoff from drainage courses within the District,the treatment of the urban nmoff,the return of the water
to the drainage courses,or the beneficial use of the water.
The legislation allows the District to divert up to 10 million gallons a day and consider more
extensive options, such as building artificial wetlands that would naturally filter the runoff,or building a
runoff treatment plant, similar to a $9.5 million facility built in Santa Monica that recycles 500,000
gallons of runoff a day.
The County's beaches have been affected by storm water and urban runoff pollution. As a result,
the Santa Ana Regional Quality Control Board has taken direct action to control discharge of pollutants to
tributaries and recreational water bodies in the County by issuing a Stomt Water Permit to the County and
cities. In order to comply with the provisions of the permit, the County and cities have increased
resources to fund municipal stone water/urban runoff management and treatment services. However,this
effort has been difficult to sustain given the complexity of the program and the competing demands on
limited resources.
The District, the County and other local agencies, are currently considering whether to explore
public support for levying a fee to property owners to fund regional storm water/urban runoff
management and treatment services within the County.
Integrated Emergency Response Program
In recognition of the potential damage which could occur in the event of a major earthquake,
flood or other disaster, the District has implemented an Integrated Emergency Response Program (the
"IERP") in 1979. The IERP is a two-volume plan which contains policies, plans and procedures
preparing for, and responding to, emergencies. The District also analyzed disaster preparedness issues
and policies within the Master Plan, and within a 1994 document titled Fault Rupture Hazard
Investigation-Wastewater Treatment Plant No.2.
According to the Master Plan, earthquakes are considered to be the most potentially devastating
natural disaster events which confront the District. The disaster preparedness plan included in the Master
Plan reviewed two possible major earthquake scenarios: an 8.3 Richter magnitude ("M") earthquake on
the southern San Andress fault system and an M 7.0 earthquake 7.0 Newport-Inglewood fault zone,which
includes Plant No.2. An M 8.3 earthquake on the southern San Andreas fault,while on the whole more
destructive than the M 7.0 Newport-Inglewood fault even, would probably result in less damage to the
District's service area due to the distance of the fault from most of the service area However,the 1989
Master Plan stated that damage from such a major earthquake on the San Andreas fault would be
extensive. Also, the Master Plan indicated that an M 7.0 earthquake on the Newport-Inglewood fault
within five miles of the District's sewerage facilities could cause major destruction to those facilities.
The disaster preparedness plan in the Master Plan indicated that it would not be economically feasible to
upgrade all of the existing sanitary sewerage facilities to survive an earthquake of this magnitude along
the Newport-Inglewood fault The IERP outlines the policies and employee actions to be taken before,
during and after an earthquake,earthquake response guidelines and damage assessment procedures.
The Master Plan analyzed the vulnerability of the sanitary sewerage facilities and operations of
the District and planned a risk reduction program wherein the vulnerability of many of the District's
sanitary sewerage facilities to an earthquake could be reduced by recommended retrofit construction
measures. The Master Plan also recommended that designs of existing major structures which were
80263eaa.5 28
constructed prior to development of current seismic design standards be reviewed and the structures
strengthened,if necessary.
Since the 1989 Master Plan and the 1994 Report, the District has completed retrofitting where
deemed appropriate. Pursuant to the Master Plan, all recent and future projects have been, and will be,
designed to the same high earthquake code standards as set for other essential services, such as hospitals
and fire stations. Many of the older buildings analyzed in the Master Plan have been replaced by
structures built after 1989.
The Army Corps of Engineers' "All-River Plan" has mitigated any future flooding of the Santa
Ana River system and potential threats to the District's Wastewater System. Also, both Plant No. I and
Plant No.2 are surrounded by three-foot to six-foot high walls,built to federal standards.
The disaster preparedness plan in the Strategic Plan investigates the damage potential posed by
coastal flooding, tsunamis(large ocean waves generated by seismic activity) and windstorms. However,
based on available information, the District does not believe that any of such events would have a
material adverse impact on the Wastewater System.
The Strategic Plan also makes recommendations regarding fire protection of the Wastewater
System and most of the structures at Plant No. 1 and Plant No. 2 are constructed of fire-resistant
materials. The IERP describes the procedures needed to respond to a possible disaster. For more
information regarding emergency response policies, the disaster preparedness plan described in the
Strategic Plan and the IERP can be reviewed at the District's office.
DISTRICT REVENUES
Sewer Service Charges
General. The District has the power to establish fees and charges for services of the Wastewater
System. Such fees and charges are established by the District's Board of Directors and are not subject to
review or approval by any other agencies.
In Fiscal Year 1997-98, a Rate Advisory Committee (the "RAC") was established comprised of
representatives from industrial, commercial and residential users. The goal of the RAC was to examine
the then current rate structure and, if needed, develop recommendations for change. The RAC analyzed
the District's rate structure to determine whether its then current sewer service user fees (now known as
"Sewer Service Charges') were equitable among residential and industrial customers. This review
resulted in a proposal to expand the number of non-residential user categories from one to twenty-three
and to provide for gradual rate increases in seven of the nine Revenue Areas. The increase in the number
of categories provided a more equitable fee structure and also provided for future reductions in single-
family residential Sewer Service Charges. The Sewer Service Charges for those categories were based on
the average flow and strength of wastewater discharged for each property type and remain currently in
use.
The Board of Directors establishes the annual sanitary sewer service charges by ordinance. The
sanitary sewer service charge ordinances are adopted by a two-thirds vote of the Board of Directors as
required under law after conducting a noticed public hearing in compliance with Proposition 218. See
"LIMITATIONS ON TAXES AND REVENUES — Article XIIIC and Article XIIID of the California
Constitution." In May 2002,the Board of Directors adopted District Ordinance No. OCSD 18 (the"2002
Ordinance") which was effective on July 1, 2002. The 2002 Ordinance included a single family
residential ("SFR") rate increase, the underlying basis for all sanitary sewer service charges including
sanitary sewer rates for multi-family residential units as well as most commercial and industrial
properties, of $7.50 per year, or 9.4%, to $87.50 per year. In Jane 2003, the Board of Directors
80263844.5 29
authorized a Proposition 218 notice on proposed"not to exceed"rate increases for each year over the next
five years. Each year thereafter,the Board of Directors has ratified the next years actual rate.
The District collects Sewer Service Charges from property owners through the semi-annual
property tax bill distributed by the County throughout the District, except in Revenue Area No. 14.
Pursuant to the IRWD Agreement, the District receives quarterly fee payments from the Irvine Ranch
Water District (the "IRWD") which directly collects fees from customers through a monthly billing
procedure in Revenue Area No. 14.
The District has covenamed in the Master Agreement to fix, prescribe and collect fees and
charges to satisfy certain coverage requirements as further described under "SECURITY AND
SOURCES OF PAYMENT FOR THE CERTIFICATES—Rate Covenant"herein.
Residemial and Commercial Sewer Service Charges. Pursuant to the 2002 Ordinance, the
District established residential Sewer Service Charges upon a rational basis between the fees charged each
customer and the services and facilities provided to each customer of the District,except those located in
Revenue Area No. 14. The noticed public hearing held in connection with the 2002 Ordinance considered
increases in the amount of the annual charges by approximately 20% per year for each of the then
following five years. In May 2005, the Board of Directors adopted Ordinance No. OCSD-26 increasing
the Fiscal Year 2005-06 single family residential rate,the underlying basis for all sewer service charges,
by 31%, from $115.00 to $151.00 for all ratepayers, except those located in Revenue Area No. 14. In
June 2007,the Board of Directors adopted Ordinance No.OCSD-32 increasing the Fiscal Year 2007-08
single family residential rate by 9.8%.
On February 27, 2008, the Board of Directors approved increases in its sanitary sewer service
charges for all single family and multi-family residential units, and for all commercial properties. The
Board increased the single family residential rate,which is the basis for all of the District's sewer service
charges, by 10.5%for Fiscal Year 2008-09, 10% for Fiscal Year 2009-10, 10%for Fiscal Year 2010-11,
9.8%for Fiscal Year 2011-12 and 9.8%for Fiscal Year 2012-13.
Table 6 below sets forth the annual ordinance adoptions following the last Proposition 218 notice
and presents a five-year comparison of the Sewer Service Charge rate for single-family residences.
Table 6
Annual Sewer Service Charges
Single Family Residence Rate
Five Year Rate Schedule
Fiscal Years 2004-05 through 2008-09
Effective Sewer Service Percent
Fiscal Year Ordinance No. Date Charee Increase
2004-05 OCSD-20 07/01/04 $115.00 15.0%
2005-06 OCSD-26 07/01/05 151.00 313
2006-07 OCSD-30B 07/01/06 165.80 9.8
2007-08 OCSD-32 07/01/07 182.00 9.8
2008-09 OCSD-35 07/01/08 201.00 10.5
Source: Orange County Sanitation District
Table 7 below sets forth total average annual Sewer Service Charge for single-family residences
within the District,together with comparable total average annual charges for wastewater service within
the jurisdictions of certain other cities and districts within the State as of July 1, 2008. The District's
90263W.5 30
projected SFR rate of$293 in Fiscal Year 2012-13 remains below the current average annual sewer rate
of$406 according to a Fiscal Year 2007-08 survey of 726 agencies encompassing all 58 counties in
California conducted by the State Water Resources Control Board.
Table 7
Comparison of Total Sewer Service Charges
For Single-Family Residences
As of July 1,2008
Average
Dry Annual Property
Weather Sewer Treatment Collection Tax
Flow Service Level1�1 Income(;
Entity (me/d)(3) C e(t( Tr ResoonsibilitvOl 1
City of San Diego 168 $531 2 Yes No
City of Los 428 360 4 Yes No
Angeles
East Bay MUD 80 247 4 No Yes
Sacramento 140 237 3 No Yes
Orange County 233 201 2 No Yes
Sanitation
District
Los Angeles 497 117 4 No Yes
County
SoRr urea: Information obtained from respective entities listed.
la Treatment Level Categories:
"1"—Primary treatment.
"2"—Advanced primary or primary with some secondary treatment.
"3"—Secondary treatment.
"4"—Advanced secondary or secondary with some tertiary treatment.
"5"—Tertiary treatment.
t" Source: 2007-08 Wastewater User Charge Survey Report by the California State Water Resources Control
Board.
Industrial Sewer Service Charges. The District charges industrial Sewer Service Charges to
customers discharging high-strength or high-volume wastes into the sewer systems. Customers subject to
industrial Sewer Service Charges are billed directly by the District. The fee charged to each customer is
based on the customer's sewage volume,the concentration of suspended solids and biochemical oxygen
demand. Pursuant to the 2002 Ordinance, rates for each component factor were revised for certain
industrial users in order to be consistent with the rates charged to residential users. Total industrial Sewer
Service Charges in Fiscal Year 2007-08 were approximately $12 million. Industrial Sewer Service
Charges are applied to both operating and capital funds.
The Sewer Service Charge increases described above are necessary to meet the District's cash
flow needs arising from the addition of disinfection treatment and other operating requirements. As
discussed under the caption "THE DISTRICT — Capital Improvement Program," the CIP Validation
Study in the Spring of 2005 and further in March 2007 developed a capital improvement program to meet
secondary treatment standards as quickly as possible while providing for increased flows and
rehabilitation and refurbishment of existing facilities. As projected out to Fiscal Year 2020-21 the cash
M63944.5 31
flow needs of the CIP total approximately$2.48 billion,approximately$1 billion of which has been spent
to date. The bulk of construction is scheduled during the next six years, with average annual expenditures
of$200 million.
Additional Revenues
The District has several sources of additional revenue, including property taxes,Capital Facilities
Capacity Charges,capacity rights,permit and inspection fees and interest eamings.
Property Tazes. The District receives approximately 2.5%of the one percent County ad valorem
property tax levy, based on the allocation procedure under State law. Property tax revenues were $41.1
million in Fiscal Year 2001-02, $44.6 million in Fiscal Year 2002-03,$46.9 million in Fiscal Year 2003-
04, $35.8 million in Fiscal Year 2004-05, $40.0 million in Fiscal Year 2005-06 and $60.6 million in
Fiscal Year 2006-07. The $11.2 million decrease in property tax revenues from Fiscal Year 2003-04 to
Fiscal Year 2004-05 is reflective of the State of California's then current fiscal crisis and the
implementation of the first year of a two-year 40% secured property tax shift may from independent
special districts. During the 2004-05 State Budget process, the State Legislature and the Governor
enacted Senate Bill 1096 and Assembly Bill 2115, effectively shifting an additional $1.3 billion in local
property tax revenues from counties, cities, special districts and redevelopment agencies to schools and
community colleges. This shift was effective for Fiscal Year 2004-05 and Fiscal Year 2005-06,resulting
in a 400/9 secured property loss for the District. See"LIMITATIONS ON TAXES AND REVENUES—
Proposition IA." This 40°/n reduction for Fiscal Year 2004-05 was somewhat offset by the than existing
strength in the real estate market. Total assessed valuations increased over the 2004-05 Fiscal Year by
10.3%, and the full value of these increases was received on all non-secured property tax distributions.
The District received property tax revenues in its full allotment (no State property tax shift) of$65.2
million in Fiscal Year 2007-08. The District currently projects its property tax receipts to increase by
approximately 5% in Fiscal Year 200" and 5%each year thereafter. This projection reflects the fact
that declines in the market value of property in the County do not necessarily result in decreased property
tax revenue in the new term because of the limiting effect of Proposition 13 on assessed valuations and
other factors. The apportionment of the ad valorem tax is pursuant to a revenue program adopted by the
District in April 1979 to comply with EPA and RWQCB mandates, legal and contractual requirements
and Board of Directors policy.
Capital Factliries Capacity Charges. Capital Facilities Capacity Charges (formerly known as
connection fees) are one-time fees with two components, paid at the time property is developed and
connected to the Wastewater System. The fees are imposed by the District pursuant to Section 5471 of
the California Health and Safety Code and are levied to pay a portion of the District's capital costs and far
access to capacity in the Wastewater System. Currently, the District has Capital Facilities Capacity
Charges of $4,517 per residential unit (three-bedroom); however, under the current industrial use
ordinance, additional Capital Facilities Capacity Charges can be imposed on industrial users who place
larger than average demand on the Wastewater System. Member cities and sanitary districts collect
Capital Facilities Capacity Charges far the District when building permits are issued. Capital Facilities
Capacity Charges are reviewed annually to reflect the changes in the value of the Wastewater System to
which a new customer is connecting.
On December 15, 1999, the Board of Directors approved District Ordinance No. OCSD 99-11
(the"1999 Ordinance")which established a comprehensive Capital Facilities Capacity Charge. The 1999
Ordinance, effective as of January 1, 2000, renamed connection fees es Capital Facilities Capacity
Charges and provided a more equitable schedule of fees among industrial, commercial and residential
users. Pursuant to the 1999 Ordinance,Capital Facilities Capacity Charges were revised for high demand
industrial users in five incremental increases from 1999 through 2001. For a summary of historical and
projected revenues derived from Capital Facilities Capacity Charges,see Table 14 and Table 15 below.
8m63W.5 32
Pursuant to an agreement with the IRWD, the IRWD is not required to pay Capital Facilities
Capacity Charges and in exchange, the IRWD provides funding to the District for the construction costs
of certain wastewater collection, transmission,treatment and disposal facilities to be used by the IRWD
and is obligated to make certain payments to the District for certain services arising from the Wastewater
System(including any standby or availability charges).
Sak of Capacity. The District has entered into agreements with the Santa Ana Watershed Project
Authority ("SAWPA") whereby wastewater from Upper Santa Ana River Basin dischargers can be
transported through the District's Santa Ana River Interceptor to the District's wastewater treatment
facilities. This program was developed in the early 1970's.The agreements establish control mechanisms
regarding the quality of wastes deposited into the Wastewater System. At the present time, SAWPA has
purchased and paid for 30 mg/d of capacity rights in the District's Santa Ana River Interceptor and 17
mg/d of capacity in the District's wastewater treatment plants. Additional treatment plant capacity can be
purchased in increments at the District's current replacement cost.
The Santa Ana River Interceptor Line ("SARI") was built in the Chino Basin Preserve Area in
order to remove dairy farm wastes and accommodate future urban development. Salts in the washwater
generated from the cleaning of cows and milking equipment were leaching into the groundwater in the
Chino Basin and the SARI was built to divert the washwater from this area. However, due to the nature
of the Chino Basin Preserve, the development of any infrastructure in the area to accommodate the SARI
was limited. The current SARI multi-phase project is designed to connect several dairies to the SARI.
Future expansions of this project could include connecting other dairies and other waste streams with the
SARI line. See"THE DISTRICT—Capital Improvement Program"herein.
Wastewater Treatment History
The average yearly influent flow to the District has remained relatively stable for the preceding
four years. The wastewater flow for Fiscal Year 2004-05 was 243 mg/d,for Fiscal Year 2005-06 was 235
mg/d, for Fiscal Year 2006-07 was 229 mg/d and for Fiscal Year 2007-08 was 221 mg/d. The highest
flow rate experienced was during El Nmo storm periods. Peak flows of 500 mg/d were recorded in
December 1997 and February 1998. There were no sewer failures or overflows during these events.
Customers
The historical number of customers served by the District for the Fiscal Years 2003-04 through
2007-08 and the projected number of customers served by the District for the Fiscal Years 2008-09
through 2012-13, identified in Equivalent Dwelling Units("EDUs"), are set forth in Table 8 below. As
discussed below,sewer service charges are based on the expected amount of wastewater flow for a single
family dwelling. This base amount is considered the"equivalent dwelling unit." The EDUs set forth in
Tables 8 and 9 below equate to total Sewer Service Charge levies.
$0263944.5 33
Table 8
Historical and Projected Equivalent Dwelling Units
Fiscal Years 2003-04 through 2012-13
Historical Projected
Fiscal Year EDUs Fiscal Year EDUs111
2003-04121 884,169 2008-09 914,677
2004-0512, 893,501 2009-10 918,336
2005-06 910,469 2010-11 922,009
2006-07 907,986 2011-12 925,697
2007-08 911,033 2012-13 929,400
EDU1�g the projection period is estimated at approximately 0.4%per annum.
tx� With respect to such Fiscal Years,presentation in the Statistical Section of the Distrit's Comprehensive Annual
Financial Report set forth in Appendix A includes EDUs that equate to total Sewer Service Charge collections
rather than levies.
Source: Orange County Sanitation District.
Table 9 below shows the number of residential and commercial customers and industrial
customers and the approximate percentages of Sewer Service Charge revenues derived from the
combined residential and commercial use and industrial use for the last five fiscal years.
Table 9
Number of Accounts and Revenues by Customer Class
for the Fiscal Years 2003-04 through 2007-08
($in Millions)
Residential/Commercial Industrial
Number of Percentage Percentage
Equivalent of Sewer of Sewer
Single- Service Number of Service
Family Total Charge Customer Total Charge
Fiscal Year Dwellings Revenue Revenues Accounts Revenue Revenues
2003- 860,156 $ 86.0 92% 530 $ 7.5 8%
041t1
2004- 860,634 99.0 90 568 10.5 10
0511 l
2005-06 872,859 132.0 92 557 12.2 8
2006-07 867,035 143.8 91 531 13.4 9
2007-08 875,824 159.4 93 520 12.1 7
With rupect to such Fiscal Years, presentation in the Statistical Section of the Comprehensive Annual
Financial Report set forth in Appendix A includes EDUs that equate to total Sewer Service Charge collections
rather than levies.
Source:Orange County Sanitation District.
80263844.5 34
The ten largest principal sewer service customers of the District for the Fiscal Year ended
June 30, 2007 are shown in Table 10 below. These principal sewer service customers paid a total of
$6,817,325 for wastewater service from the District.
Table 10
Largest Principal Sewer Service Customers of the District
for the Fiscal Year Ended June 30,2007
Percentage of Total
Sewer Service Sewer Service
User Charges Charge Revenues
Kimberly-Clark Worldwide, 0.66%
Inc. $1,114,919.81
Alstyle Apparel—A&G Inc. 1,049,362.16 0.63
Stremicks Heritage Foods,LLC 974,473.67 0.58
MPC Foods, Inc. 921,316.91 0.58
Disneyland Resort 791,746.84 0.47
Disneyland Resort-DCA 567,484.57 0.34
House Foods America Corp. 410,058.85 0.24
Pepsi-Cola Bottling Group 374,306.33 0.22
Seven-Up Bottling Company 335,177.79 0.20
Ameripec Inc. 278 478.15 0.17
TOTAL $6,817,325.08 4.06%
Source: Orange County Sanitation District.
Assessed Valuation
The assessed valuation of property in the County is established by the County Assessor, except
for public utility property which is assessed by the State Board of Equalization. Due to changes in
assessment required under State Constitution Article XIIIA, the County assessment roll no longer
purports to be proportional to market value. See "LIMITATIONS ON TAXES AND REVENUES"
herein. Generally, property can be reappraised to market value only upon a change in ownership or
completion of new construction. The assessed value of property that has not incurred a change of
ownership or new construction must be adjusted annually to reflect inflation at a rate not to exceed 2%
per year based on the State consumer price index. In the event of declining property value caused by
substantial damage, destruction, economic or other factors, the assessed value must be reduced
temporarily to reflect market value. For the definition of full cash value and more information on
property tax limitations and adjustments,see"LIMITATIONS ON TAXES AND REVENUES"herein.
The County Assessor determines and molls a value for each parcel of taxable real property in the
County every year. The value review may result in a reduction in value. Taxpayers in the County also
may appeal the determination of the County Assessor with respect to the assessed value of their property.
Table 1 I below shows a five-year history of assessed valuations in the District since Fiscal Year
2004-05.
90263844.5 35
Table 11
Assessed Valuations of Property in the District
Fiscal Years 2004-05 through 2008-09
($ in Billions)
Fiscal Year Value %Change
2004-05 $219.3 8.85%
2005-06 241.8 10.30
2006-07 270.7 11.93
2007-08 292.7 8.13
2008-09 307.6 5.09
Source: County of Onstage Auditor Controller.
Prior to 2006, the housing market in Southern California experienced significant price
appreciation and accelerated demand. During this period, many homebuyers financed the purchase of
their new homes using non-conventional loans. Such loans were made with little or no down payment
and included adjustable interest rates subject to being reset at higher rates on a specified date or upon the
occurrence of specified conditions. In addition, many of these loans allow the borrower to pay interest
only for an initial period,in some cases up to ten years.
Starting in 2006, housing developers, appraisers and real estate consultants began to report
weakening of prices for single-family homes. There has been tightening of underwriting criteria for
mortgage loans such that most lenders now require down payments,stricter verification,higher income to
loan ratios,higher credit ratios or some combination of such factors. These factors have contributed to a
decrease in home sales as prospective purchasers are unable to qualify for loans. Declining home sales in
some areas of Southern California have resulted in a decrease in home prices. As home values decline,
homebuyers may not be able to obtain replacement financing because the outstanding loan balances
exceed the value of their homes. Due to the limiting effect of Proposition 13 on assessed valuations,
declines in the market value of property in the County will not necessarily result in decreased property tax
revenue in the near term. In fact, assessed valuations in the County for Fiscal Year 2008-09 have
increased by $15.2 billion, or 3.74%,over Fiscal Year 2007-08 valuations. Under certain circumstances,
however,the County may reduce assessed valuations as a result of decreases in market value, leading to
decreased property tax collections.
Tax Levies and Delinquencies
Property taxes are based on assessed valuation which is determined as described under
"DISTRICT REVENUES—Assessed Valuation"herein. In accordance with the California Revenue and
Taxation Code,the County tax collector collects secured tax levies for each Fiscal Year. Property taxes
on the secured roll are due in two installments, on November 1 and February 1. The District currently
participates in the County's Teeter Plan under which the District receives annually 100% of the secured
property tax levies and Sewer Service Charges to which it otherwise is entitled, regardless of whether the
County has actually collected the levies. This alternative method provides for funding each taxing entity
included in the Teeter Plan with its total secured property taxes during the year the taxes are levied,
including any amount uncollected at fiscal year end. Under this plan,the District's general fund receives
the full amount of secured property taxes levied each year on its behalf and for so long as such plan
remains in effect, the participating entities, such as the District, no longer experience delinquent taxes.
The County's general fund is the designated recipient of future collections of penalties and interest on all
delinquent taxes collected on behalf of participants in this alternative method of apportionment. In recent
80263944.5 36
years, the County has experienced delinquencies of Sewer Service Charges in the District of
approximately 2%.
Unpaid taxes become delinquent after December 10 and April 10, respectively, and a 100/0
penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to
which taxes are delinquent is declared tax-defaulted on or about June 30. Such property may thereafter be
redeemed by payment of the delinquent taxes and the delinquency penalty, plus costs and redemption
penalty of one and one-half percent per month to the time of redemption. If taxes are unpaid for a period
of five years or more,the tax-defaulted property is subject to sale by the County Treasurer-Tax Collector.
Property taxes on the unsecured roll are due as of the January I lien date and become delinquent,
if unpaid on August 31. A 10% penalty attaches to delinquent taxes on property on the unsecured roll
and an additional penalty of one and one-half percent per month begins to accrue on November 1. The
taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against
the taxpayer; (2)filing a certificate in the office of the County Clerk specifying certain facts in order to
obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for
recordation in the County Recorders office in order to obtain a lien on certain property of the taxpayer;
and(4)seizure and sale of personal property, improvements or possessory interests belonging or assessed
to the taxpayer.
Table 12 below presents a five-year history of the District's ad valorem total property tax and
Sewer Service Charge levies.
Table 12
Total Property Tax and Sewer Service Charge Levies
in the District for Fiscal Years 2003-04 through 2007-08
(In Thousands)
Total Tax and Sewer
Fiscal Year Service Charge Levy
2003-04 $134,132
2004-05 152,745
2005-06 191,290
2006-07 209,206
2007-08 228,622
Source: Orange County Auditor-Controller's Office.
Budgetary Process
The District's operating fund budget relies on revenues from property taxes and Sewer Service
Charges, both of which are collected on the property tax bill. See "DISTRICT REVENUES — Sewer
Service Charges"and"—Additional Revenues" The District receives tax revenues from the County in
eight allocations,with the largest receipts in December and April. The District operates on a Fiscal Year
beginning each July 1. The operating fund budgets include funds to cover the dry period of each tax year,
i.e., the period from the beginning of the Fiscal Year until the first taxes are received. The dry-period
requirement is budgeted at one-half of the annual operating fund budgeted expenditures. The District
uses the accrual method of accounting in its budgets. The District has conformed to its budgets for the
last five fiscal years and is conforming to its budget for the current fiscal year.
80263W,5 37
The District's annual budget preparation process begins in January of each year and concludes in
Jane upon its adoption. The General Manager reviews the final operating budgets and then distributes
them to the Directors and District Committees for consideration. The Board of Directors then adopts the
proposed annual budgets,with any revisions,in June of each year.
Budgetary control is exercised at the individual Department level and administrative policies
provide guidelines on budget transfers and the authorization necessary to implement transfers. A budget
adjustment is a transfer which does not change the total appropriated amount and does not require Board
of Directors action. Approval may be granted by the General Manager or the Department Head in certain
circumstances. Department Heads have the discretion to reapportion funds between certain line items
within a division but may not exceed total appropriated amounts for each department. They may also
transfer staff across divisional lines. The General Manager and Board of Directors must approve
additional capital outlay items.
A budget amendment is an adjustment to the total appropriated amount which was not included in
the original budget. These supplemental appropriations require formal action by the Board of Directors.
Prior year reserves or fond balances may be appropriated to fund items not previously included in the
adopted budget. Reserves or fund balances exceeding minimum amounts required by fiscal policies may
be appropriated if it is determined to be in the best interest of the District Directors may also appropriate
reserves in case of emergencies or unusual circumstances.
Reserves
The District has an established reserve policy with eight separate categories for its reserve fonds.
The following table sets forth actual reserves at Jane 30, 2007, projected reserves at June 30, 2008, and
proposed reserves at June 30, 2009, for each fund. Reserve levels are calculated in accordance with the
District's reserve policy.
Table 13
Actual and Projected Reserves
June 30,2007 through 2009
(In Millions)
June 30,2007 June 30.2008r" June 30.2009(2)
Cash Flow Requirements Reserve—
Operating Expenses $110 $ 65 $ 70
Certificates of Participation Payments — 75 84
Operating Contingencies Reserve 22 13 14
Capital Improvement Program Reserve 51 153 54
Catastrophe and Self Insurance 57 57 57
Capital Replacement and Refurbishment 53 54 55
Debt Service Requited Reserves 79 116 133
Total $372 $533 $467
—Unaudited.
(2)Rojedad.
Source: Orange County Sanitation District
The Cash Flow Requirements Reserve was established to fund operation, maintenance and
certificates of participation debt service expenses for the first half of the fiscal year,prior to the receipt of
the first installment of the property tax allocation and sewer service user fees which are collected as a
separate line item on the property tax bill. The level of this reserve is established as the sum of an amount
80263944.5 38
equal to six months operations and maintenance expense and the total of certificates of participation debt
service expenses due in the subsequent fiscal year. The Operating Contingencies Reserve was established
to provide for non-recurring expenditures that were not anticipated when the annual budget and Sewer
Service Charges were adopted. The level of this reserve is equal to 10%of the District's annual operating
budget. The Capital Improvement Program Reserve was established to fund annual increments of the
Capital Improvement Program with a target level at one-half of the average annual Capital Improvement
Program through the year 2020. Levels higher and lower than the target can be expected while the long-
term financing and capital improvement programs are being finalized. The Catastrophic Loss, or Self-
Insurance Reserve is established for property damage including fire, flood and earthquake, general
liability and workers' compensation. The level of reserve in this fund is maintained at a level to fund the
District's non-reimbursed costs which are estimated to be $57 million. The Capital Replacement and
Refurbishment Reserve was established to provide 30"/u of the funding to replace or refurbish the current
collection,treatment and disposal facilities. The current replacement value of these facilities is estimated
to be approximately$5.56 billion. The initial reserve level for this fund was established at $50 million
and is augmented by interest earnings and a portion of the annual Sewer Service Charges. Debt Service
Required Reserves(or Obligation Reserve Funds w defined in the Mauer Agreement)are controlled by a
trustee pursuant to the provisions of certificates of participation issues and are not available for the
general needs of the District. The Rate Stabilization Reserve accumulates all available funds which
exceed the targets for all other reserves. The Rate Stabilization Reserve is a separate fund from the Rate
Stabilization Account established under the Trust Agreement. These funds are applied to future years'
needs and must be maintained at specified levels. There is currently no established target for this reserve
and, because the reserves of all other funds have not been exceeded,the reserve level for this reserve fund
is zero for Fiscal Years 2005-06 through 2008-09. See APPENDIX A — "COMPREHENSIVE
ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR
FISCAL YEAR ENDED JUNE 30,2007"herein.
Summary of Operating Data
Set forth in Table 14 below is a summary of historic operating results for the District for Fiscal
Years 2002-03 through 2007-08. The District's CIP cash flow budget for Fiscal Year 2007-08 is$302.7
million, an increase of$36.6 million from the prior year total, for the financing of joint works treatment
and disposal system improvement projects,and collection system improvement projects. This increase is
attributable to the additional infrastructure needs identified in the Interim Strategic Plan and in the CIP
Validation Study. The information presented in the summary should be read in conjunction with the
financial statements and notes. See APPENDIX A — "COMPREHENSIVE ANNUAL FINANCIAL
REPORT OF THE. ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED
JUNE 30,2007"herein.
90263944.5 39
Table 14
Summary of Historical District Revenues and Expenses
and Other Financial Information
For Fiscal Years 2002-03 through 2007-08
($ in Millions)
2
2002-03 2003-04 2004-05 2005-06 2006-07 08 '
Revenues:
Sewer Service Charges'" $77.0 $ 86.0 $99.0 $ 132.0 $143.8 $159A
Industrial Sewer Service
Charges 6.3 7.5 10.5 12.2 13.4 12.1
Revenue Area No. 14 Fees 3.2 5.8 6.9 5.3 5.2 5.9
Ad Valorem Taxes 44.6 46.9 35.8 40.0 60.6 65.2
Interest Earnings 25.9 6.8 15.1 10.4 22.2 21.7
Capital Facilities Capacity
Charges("CFCC") 10.1 9.0 9.8 15.6 31.3 19.8
Other Revenues 3.4 4.0 6.1 9.2 8.3 7.8
Total Revenues $170.5 $166.0 $183.2 $224.7 $294.8 $291.9
Operations and Maintenance
Expenses"' $79.7 $ 95.4 $101.8 $105.6 $112.2 $122.9
Net Revenues"' $ U $ 61.6 L6L_ $103.5 $141.3 $1422
Debt Service $22.7 IM $ 37.9 $ 41.9 LIM _AU
Coverage Ratios". MbA 2 l7x LUx L47.x
CIP Outlay $112.9 VA9 5 $187.9 S26U $2U-. $259.4
Ending Reserves'" $394.0 $518.0 $407.0 S4kU $287.0 $424.2
inr) Net o rebates,i any,to commercial users.
Excludes depreciation and amortization expenses.
Calculated in accordance with the Master Agreement,which excludes CFCC from Net Revenues.
'4' Excludes debt service reserves in accordance with the District's reserve policy.
's' Unaudited.
Source: Orange County Sanitation District.
Projected Operating Data
Set forth in Table 15 below are projected operating results for the District for Fiscal Years 2008-
09 through 2012-13. These projections assume the number of projects and scheduled build our set forth
in the CIP Validation Study,and reflect Board-approved annual increases in sewer service rates of 10.5%,
10%, 10%, 9.8% and 10.5% over this five-year period. Principal expenditure components of these
projections are derived from the CIP Validation Study, which identified 114 large capital projects
managed by the Engineering Department through 2020-21 at a total cost of$2.48 billion, and currently
projected to include over $1.1 billion in the next five years. The District's CIP cash flow budget for
Fiscal Yew 2008-09 is $373.7 million, an increase of$94.4 million from the prior year estimated total.
This CIP budget finances joint works treatment and disposal system improvement projects,and collection
system improvement projects. This increase is attributable to the additional infrastructure needs identified
in the CIP Validation Study. The preparation of such projections was based upon certain assumptions and
certain forecasts with respect to conditions that may occur in the future. While the District believes that
them assumptions and forecasts we reasonable for the purposes of the projected selected operating data,it
makes no representations that they will in fact occur. To the extent that actual future conditions differ
from those assumed herein,the data will vary.
90263944.5 40
Table 15
Summary of Projected District Revenues and Expenses
and Other Financial Information
for Fiscal Years 2008-09 through 2012-13
($in Millions)
2008-09 2009-10 2010-11 201142 2012-13
Revenues:
Residential&Commercial Sewer
Service Charges $191.3 $211.3 $2342 $257.4 $284.7
Industrial Sewer Service Charges 9.5 10.4 11.5 12.6 13.8
Revenue Area No. 14 Fees 30.2 17.3 20.3 212 23.1
Ad Valorem Taxes 64.9 682 71.6 752 78.9
Interest Earnings 19.2 18.6 19.5 20.6 21.8
Capital Facilities Capacity Charges("CFCC") 21.7 22.9 24.2 25.6 27.0
Other Revenues 19.2 15.2 18.0 18.2 18.9
Total Revenues $356.0 $363.9 $399.3 $430.8 $468.2
Operations and Maintenance Expenm 146.8 154.0 194.1 199.7 216.9
Net Revenues( l $187.5 $187.0 $191.0 $205.5 $224.3
Debt Proceeds $200.0 $120.0 $ 90.0 $ 60.0 S 80.0
Debt Service $ 74.6 $ 84.3 $ 91.2 $ 95.8 $100.5
CIP Outlays $373.7 $228.9 $182.5 $169.8 $188.6
Ending Reserves1r) $333.9 $341.4 $365.0 $385.8 $421.6
Coverage Ratios(3) 2.51x 2.22x 2.09x 2.15x 2.23x
7 Cal accordance with the Trust Agreement,which excludes CFCC from Net Revenues.
Excludes debt service reserves in accordance with the District's reserve policy.
�r) Calculated in accordance with the Master Agreement,which excludes CFCC from Net Revenues.
Assumptions:
(a) Annual growth in equivalent dwelling units is projected to increase 0.4%over the next five years.
(b)The Residential and Commercial Sewer Service Charge and the Industrial Sewer Service Charges are
forecasts are based on the total projected equivalent dwelling units, the actual 10.5% increase for
200", and the approved rate increases of 10.0%, 10.0% and 9.8%, respectively, for the
following[lace fiscal years.
(c) The Capital Facilities Capacity Charge forecast is based on the total projected equivalent dwelling units
along with a 5.00%project annual increase in the rate.
(d) Revenue Area No. 14 fees are derived based on the projected contribution of sewage flows to the
District from the Irvine Reach Water District
(a) Ad valorem tax revenues are projected to increase at 5.0%per year.
(f) Interest earnings are projected as 4.0%of average annual cash balances.
(g) Operating and Maintenance Expenses are projected to increase 7.0%per year.
(h) Annual CIP Outlays is based on the cash flow projections developed from the CIP Validation Study.
Source: Orange County Sanitation District
Management's Discussion and Analysis of Operating Data
The District's Fiscal Year 2008-09 total operating and capital improvement budget is $601.0
million, a 17.1% increase over the prior year budget of$513.2 million. The District's Fiscal Year 2008-
09 budget includes$72.3 million in capital improvement outlays as the District moves towards reaching
secondary treatment standards by the target date of December 31, 2012, as specified by the Board of
Directors' July 2002 resolution and in keeping with the terms and conditions of its ocean discharge permit
and related Consent Decree.
amurtwU 41
The Fiscal Year 2008-09 operations budget for the collection, treatment, and disposal of
wastewater is$148.8 million, an $6.2 million increase from the prior year budget of$142.6 million. This
increase is primarily attributable to the proposed increase in personnel costs due mostly to the current
capital improvement program, totaling $2.48 billion over the next ten years. Personnel costs increased
$3.9 million, or 4.90%. The contractual services budget increased $7.1 million, or 33.1%. The major
component of this category is biosolids removal and transport costs. Contracts have been executed with
firms for agricultural reuse of residual solids. The utility budget decreased by $0.2 million, or 2.00/9,
primarily as a result of utility rates not increasing as much as anticipated. Electricity is the largest utility
cost incurred by the District and is used to run the plant processes. The Fiscal Year 2008-09 budget
reflects an increase in imported electricity because new government regulations on air emission limits has
forced a reduction in electrical power production at the District's central generation facilities, a process
that converts methane gas into electricity.
The Fiscal Year 2008-09 CIP cash flow budget was approved at $373.7 million an increase of
$94.4 million from the prior year estimated total. In preparation of the Fiscal Year 2006-07 and 2007-08
budgets, the Board of Directors established a CIP Oversight Committee to review the CIP program and
staffs annual validation effort of the CIP to ensure that the scope of the projects was appropriate and that
the cost estimates were accurate, and to gain an understanding of the impact from the CIP to the current
rate structure. The Fiscal Year 2008-09 CIP includes 86 large capital projects and 28 special projects
with a projected 15-year cash outlay of$1.47 billion. Over this time period,the CIP will accomplish:
• Rehabilitation of the existing headworks, primary treatment, secondary treatment, outfall
pumping,and solids handling facilities at both treatment plants;
• Replacement and rehabilitation of nine of the District's outlying pumping stations, and
rehabilitation and upgrade of 29 trunk sewer improvement projects,
• Optimintion of the production of"power"and"biosolids"at each of the treatment plants;
• Reclamation of 70 mg/d of the District's effluent, or nearly one-third of the total daily flow
through the Groundwater Replenishment System;and
• Achieve secondary treatment standards by December 2012.
A review completed by the CIP Oversight Committee in Fiscal Year 2006-07 reaffiroed the need
for further raze increases in future years. Annual increases are ordered to be subject to reaffirmation by
the affirmative vote of two-thirds of the members of the Board of Directors prior to implementation of
any such charge for each fiscal year. Based on the results of the CIP Oversight Committee,the Board of
Directors adopted Ordinance No. OCSD-35 increasing the sanitary sewer service changes by
approximately 10.5% for Fiscal Year 2008-09. This action increased the single family residence user
rate, the basis for all sewer user fee rates, from $182 to $201. See "DISTRICT REVENUES — Sewer
Service Charges."
Investment of District Funds
State statutes authorize the District to invest in obligations of the United States Government,state
and local governmental agencies, negotiable certificates of deposits, bankers acceptances, commercial
paper, reverse repurchase agreements and a variety of other investment instruments which are allowable
under California Government Code Section 53600 at seq.
All District funds, except for Obligation Reserve Funds controlled by a bank trustee pursuant to
the provisions of Existing Senior Obligations, are managed by an external money manager, Pacific
Investment Management Company ("PIMCO"). Mellon Trust ("Mellon Trust") serves as the District's
80263944.5 42
independent custodian bank for its investment program. Callan Associates ("Callan") serves as the
District's independent advisor.
At June 30, 2008, the District's externally managed fund consisted of short-term investment
portfolio of$98,300,000 with an average maturity of 73 days, and a long-term investment portfolio of
$313,700,000 with average maturities of 2.3 years. Investments consist of United States government
securities, corporate bonds and commercial paper. The District's portfolio contains no structured
investment vehicles(SIVs)or reverse repurchase agreements.
Deposits in banks are maintained in financial institutions which provide deposit protection on the
bank balance from the Federal Deposit Insurance Corporation. The California Government Code requires
State banks and savings and loans to secure local government deposits by pledging government securities
equal to I10% of the deposits or by pledging first trust deed mortgage notes equal to 150% of the
deposits.
The District's Investment Policy requires that the District invest public funds in a manner which
ensures the safety and preservation of capital while meeting reasonable anticipated operating expenditure
needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the
investment of public funds. The primary objectives, in order of the District's investment activities are
safety,liquidity and return on investments.
FINANCIAL OBLIGATIONS
Existing Indebtedness
Currently the District has Senior Obligations Outstanding payable on a parity with the Installment
Payments under the Installment Purchase Agreement The table below describes the District's outstanding
certificates of participation as of September I, 2008. The payment obligations in connection with each
series of these certificates constitute Senior Obligations, subject to the provisions of the Master
Agreement and shall be afforded all of the benefits, interests and security afforded Senior Obligations
pursuant to the Muster Agreement The District has no outstanding general obligation bonds.
Table 16
Outstanding Certificates of Participation Debt
As of September 1,2008
Original
Principal Issue Outstanding Final
Amount Date Balance Maturi
1993 Certifiicates.1 $ 46,000,000 09/02/93 $ 26,750,000 08/11/16
2000 Certificates 218,600,000 08/13/00 195,800,000 08/01/30
2003 Certificates 280,000,000 08/26/03 191,500,000 02/01/33
2006 Certificates 200,000,000 03/08/06 196,600,000 02/01/36
2007A Certificates 95,180,000 05/22/07 93,655,000 02/01/30
2007B Certificates 300,000,000 12/20/07 300,000,000 02/01/37
2008A Certificates 77,615,000 05/29/08 61,665,000 08/01/13
Total Long-Term Debt $1,065,970,000
7 ToTo be the proceeds of the Certificates. See"REFUNDING PLAN."
80263944.5 43
In connection with the execution and delivery of the above-referenced outstanding certificates of
participation, the district entered into certain installment purchase agreements, or equivalent documents
providing for the payment of installment payments or similar payments.
Variable Rate and Swap Obligations
In September 1993, the District caused the execution and delivery of certain certificates of
participation which were subsequently designated as the County Sanitation Districts Refunding
Certificates of Participation, 1993 Series (the "1993 Certificates"). The District entered into the 1993
Agreement for Acquisition and Construction, a Reimbursement Agreement (including as thereafter
amended and substituted the"1993 Reimbursement Agreement')to provide for payment of the purchase
price of tendered and unremarketed 1993 Certificates, and an interest rate swap agreement, as amended
(the "1993 Swap") with Societe Generale, New York Branch. The District intends to refund all of the
outstanding 1993 Certificates and terminate the 1993 Swap with proceeds of the Certificates. See
"REFUNDING PLAN."
In August 2000,the District caused the execution and delivery of the Orange County Sanitation
District Refunding Certificates of Participation, Series 2000-A (the "2000-A Certificates") and the
Orange County Sanitation District Refunding Certificates of Participation, Series 2000-B (the "2000-B
Certificates"and together with the 2000-A Certificates,the"2000 Certificates")in the original aggregate
principal amount of$218,600,000, of which $196,600,000 remains outstanding. In connection with the
execution and delivery of the 2000 Certificates, the District entered into an installment purchase
agreement(the"2000 Installment Purchase Agreement')and a Standby Agreement,dated as of August 1,
2000 (the "2000 Standby Agreement'), by and among the District, the Trustee and Dexia Credit Local,
acting through its New York Agency.
In March 2006, the District caused the execution and delivery of the Orange County Sanitation
Refunding Certificates of Participation, 2006 Series (the "2006 Certificates") in the original aggregate
principal amount of$200,000,000, of which $196,600,000 remains outstanding. In connection with the
execution and delivery of the 2006 Certificates, the District and the Corporation entered into an
installment purchase agreement (the "2006 Installment Purchase Agreement") and the District entered
into a Standby Certificate Purchase Agreement, dated as of March 1, 2006 (the "2006 Standby
Agreement"),with DEPFA Bank plc, acting through its New York Branch,to provide for payment of the
purchase price of tendered and unremarketed 2006 Certificates.
The 1993 Reimbursement Agreement, and the 2000 Standby Agreement and the 2006 Standby
Agreement each constitutes a Credit Facility Agreement and a Credit Facility under the Master Indenture.
The obligation of the District to repay amounts drawn on or paid under these agreements,to pay interest
on such amounts and to pay any other amounts in connection with such draw or payment constitutes a
Reimbursement Obligation,each with respect to a Senior Obligation.
Anticipated Financings
From time to time the District expects to deliver other obligations to finance and refinance
portions of the CIP. In Fiscal Year 2008-09 the District expects to incur Additional Senior Obligations in
an aggregate principal amount of approximately$200 million.
Direct and Overlapping Bonded Debt
Table 17 below presents the aggregate direct and overlapping bonded debt of the District as of
June 30,2008.
80263844.5 44
Table 17
Direct and Overlapping Bonded Debt of the District
as of June 30,2008
2007-08 Assessed Valuation(Land&Improvements Only): S292.733,304,951
Redevelopment Increm unil Valuation: 35.5M,345 092
Adjusted Assessed Valuation: $257.168.959,859
OVERLAPPING TAX AND ASSESSMENT DEBT
(Based on redevelopment adjusted all property-am d valuation of$264.164,343.0%6
Total Debt District's Share of
0/0 %Amolicablefll Debt 6130108
Orange County Teeter Plan Obligation $123,725.000 71.941% S 99,885,217
Mehepolium Water District of Southern California 327.215,000 14.941 49,999.193
Coast Community College District 347,75&867 99.495 346,002.685
North(range County Joint Community College District 233,349,001 96.922 226,166,519
Rancho Santiago Community College District 321,779,339 98.363 316.511,911
Brea.Olimla and Laguna Beach Unified School Districts 59,649,029 99.936&12.793 29,155.237
Newport Mesa Unified School District 168,563,480 100. 168,563,490
Placealia-Yorba Linda Unified School District 169,069,034 99.707 166.894971
Saddleback Valley Unified School District 142,480,000 11.915 16,976.492
Sent.An Unified School District 126,037,965 too. 126,037,965
Tustin Unified School District School Facilities Improvement District No.2002-1 43,683.929 99.010 43251,458
Anaheim Union High School Dishid 123.483,955 100. 123,483,955
Fullerton Joint Union High School District 61,554910 90.240 55,345346
Huntington Beach Union High School District 232,274,998 98.919 229,764,105
School Districts 236.130,071 97.319-100. 236,344957
City of Anaheim 5,220,000 99.083 5,172,133
Irvine Ranch Water Dishid Improvement Districts 271,221,669 Various 271,137,342
Ross rmor Community Services District Special Tay Obligation 625,000 100. 625,000
Bonita Canyon Community Facilities District No.98.1 44615.000 too. 42,615,000
Irvine Unified School District Community Facilities Districts 266,430,000 99.998-100. 266,429353
Tustin Unified School District Community Facilities Districts 232,730,345 100. 232,730345
Orange County Community Facilities District No,87-4 59,882,928 99.905 59,926,039
Other Community Facilities Districts 402,455,000 Various 40Z358,006
Orange County Assessment Districts 118.0482% t00. 118,0482%
City of Irvine 1915 Act Bonds 905,675,000 100. 905.675,000
City of Tustin 1915 Act Bonds 52,442,000 100. 52,442,000
Other 1915 Art bonds 20,306,000 100. 20.3015j)
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $4499,922.965
Total Debt District'.Share of
DIRECT AND OVERLAPPING GENERAL FUND DEBT: 6/30/08 %Aeelirable(11 Debt 6/30/08
Orange County Creneral Fund Obligation $532,326,000 71.941% $ 382,428322
Orange County Pension Obligation 72,729,867 71.841 52,249.864
Orange County Board of Education Certificates of Participation 19,590,000 71.841 14,073,652
South Orange County Community College District Certificates of Participation 34,945A00 35.613 12,444.963
Brea-Olinda Unified School District Certificates of Participation 29,800,000 99.936 29,780,928
Orange Unified School District Cenificed s of Participation 49,326,604 96.966 49326,604
Placentie-Ymba Lind.Unified School District Certifrata of Participation 96,910315 98.639 85,628.827
Seem Ana Unified School District Certificates;of Participation 64,955,968 100, 64M5,%S
Other Unified School District Certifiatn of Participation 39317,502 Various 38,988,126
Union High School District Certificates of Participation 117,751,090 Various 114,970,458
School District Certificates of Participation 59,960,000 Various 59,650.779
City of Anaheim General Fund Obligation 679,632.465 99.083 673,400.235
City of Costa Mesa General Fund Obligation 45.970.000 100. 45,970,000
City of Fullerton General Find Obligation 29,302,784 too. 29302,784
City of Huntington Bach General Fond and Judgment Obligation 76,300,000 99.980 76284,740
City of Irvine General Find Obligation 24.170.000 100. 24,170,000
City of Santa Ana General Fund Obligations 116,220,000 100. 116.220,000
Other City General Fund Obligation 172,570,000 Various 145,990247
Orange County Sanitation District Certificates of Participation 0 100. 0(2)
Irvine Ranch Water District Certificates of Participation 38.900,000 89.621 34,772,948
Municipal Water District of Orange County Water Facilities Corporation 19,295,000 66.611 12,952,592
(Continued on next page.)
80263M4.5 45
(Continued from previous page.)
Total Debi District's Shure of
DIRECT AND OVERLAPPING GENERAL FUND DEBT. N30/08% Applicable(I Debt 6/30/08
Yor a Linde County Water District Catifimles of Participation 9,860,000 97.773 9,640,418
Orange County Fue Authority 10,365,000 50.310 5214.632
TOTAL GROSS OVERLAPPING GENERAL FUND DEBT $2.077.117,097
Less: Sane Ara Unified School District self Wporting Qualified Zone Acsdmny Bonds 2,042,300
City of Anaheim self-supporting obligations 650,291,304
Oahe City self-supporting obligations 30,162.670
MWDOC Water Facilities Caparatiou(100%self-supporting) 11852592
TOTAL NET OVERLAPPING GENERAL FUND DEBT S1381.778.221
GROSS COMBINED TOTAL DEBT $6,676,940,052(2)
NET COMBINED TOTAL DEBT S5,981,60L186
(1) Percentage ufovelappctg agency's redevelopment adjusted all property assessed valuation(S264,164,343,096)located within
boundaries of the district.
(2) Excludes wastewater revenue certificale of participation. Previously classified certificate ofparticipation lave been rxlassiEed
as district revenue suppoatd issue and are no longer included us direct debt in the debt statement.
(3) Excludes is and revenue anticipation rotes,enhopr6e revenue,mortgage revenue and to allocation bonds and run-bonded capital
lease obligations.
Radius to:
2007-08 Land and Improvement
Assessd Valuation
Total Owrlapping Tax and Assessment Debt 1.57%
Adjusted Adjusted All Properly
Land&lnrovement Assessed Valuation
Gross Combined Total Debt 2.60% 2.53%
Net Combind Tdal Debt 2.33% 2.26%
STATE SCHOOL BUILDING AID REPAY OF 0/0 : SO
Source: California Municipal Statistim
THE CORPORATION
The Corporation was organized June 19, 2000 as a nonprofit public benefit corporation pursuant
to the Nonprofit Public Corporation law of the State. The Corporation's purpose is to render assistance to
the District in its acquisition of equipment, real property and improvements on behalf of the District.
Under its articles of incorporation,the Corporation has all powers conferred upon nonprofit public benefit
corporations by the laws of the State,provided that it wi11 not engage in any activity other than that which
is necessary or convenient for,or incidental to the purposes for which it was formed
The Corporation is a separate legal entity from the District. It is governed by a twenty-five
member Board of Directors. The Corporation has no employees. All staff work is performed by
employees of the District. The members of the Corporation's Board of Directors are the Board of
Directors of the District.
The District's Director of Finance and Administrative Services and other District employees are
available to provide staff support to the Corporation.
The Corporation has not entered into any material financing arrangements other than those
referred to in this Official Statement. Further information concerning the Corporation may be obtained
from the Orange County Sanitation District office at IOW Ellis Avenue, Fountain Valley, California,
92709-7018.
So263844.5 46
LIMITATIONS ON TAXES AND REVENUES
Article XIIIA of the California Constitution
On June 6, 1978, California voters approved Proposition 13 ("Proposition 13"), which added
Article XIIIA to the State Constitution ("Article XIIIA"). Article XIIIA, as amended, limits the amount
of any of valorem tax on real property to one percent of the full cash value thereof, except that additional
ad vdorem taxes may be levied to pay debt service on (i)indebtedness approved by the voters prior to
July I, 1978,(ii)(as a result of an amendment to Article XIIIA approved by State voters on June 3, 1986)
on bonded indebtedness for the acquisition or improvement of real property which has been approved on
or after July 1, 1978 by two4hird of the voters on such indebtedness, and (iii)bonded indebtedness
incurred by a school district or community college district for the construction, reconstruction,
rehabilitation or replacement of school facilities or the acquisition or lease of real property for school
facilities, approved by 55% of the voters of the district, but only if certain accountability measures are
included in the proposition. Article XIIIA defines full cash value to mean 'the county assessor's
valuation of real property as shown on the 1975-76 tax bill under "full cash value," or thereafter, the
appraised value of real property when purchased, newly constructed, or a change in ownership has
occurred after the 1975 assessment" The full cash value may be adjusted annually to reflect inflation at a
rate not to exceed 2%per year or to reflect a reduction in the consumer price index or comparable data for
the area under the taxing jurisdiction, or reduced in the event of declining property values caused by
substantial damage, destruction, or other factors. Legislation enacted by the State Legislature to
implement Article XIIIA provides that notwithstanding any other law,local agencies may not levy any ad
valorem property tax except to pay debt service on indebtedness approved by the voters as described
above.
Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement Article
XIIIA. Under current law, local agencies are no longer permitted to levy directly any property tax(except
to pay voter-approved indebtedness). The one percent property tax is automatically levied by the County
and distributed according to a formula among taxing agencies. The formula apportions the tax roughly in
proportion to the relative shares of taxes levied prior to 1989.
Increases of assessed valuation resulting from reappraisals of property due to new construction,
change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in
the 'taxing area" based upon their respective "situs." Any such allocation made to a local agency
continues as part of its allocation in future years.
Beginning in the 1981-82 fiscal year, assessors in the State no longer record property values on
tax rolls at the assessed value of 25%of market value which was expressed as$4 per$100 assessed value.
All taxable property is now shown at full market value on the tax rolls. Consequently, the tax rate is
expressed as$1 per$100 of taxable value. All taxable property value included in this Official Statement
is shown at 1000/c of market value (unless noted differently) and all tax rates reflect the $1 per$100 of
taxable value.
Article XIIIB of the California Constitution
An initiative to amend the State Constitution entitled"Limitation of Government Appropriations"
was approved on September 6, 1979, thereby adding Article XIIIB to the State Constitution ("Article
XIIIB"). Under Article XIIIB,the State and each local governmental entity has an annual"appropriations
limit" and is not permitted to spend certain moneys that are called "appropriations subject to limitation"
(consisting of tax revenues, stale subventions and certain other funds) in an amount higher than the
appropriations limit. Article XIIIB does not affect the appropriations of moneys that are excluded from
80263844.3 47
the definition of"appropriations subject to limitation,"including debt service on indebtedness existing or
authorized as of January 1, 1979, or bonded indebtedness subsequently approved by the voters. In
general terms, the appropriations limit is to be based on certain 1978-79 expenditures, and is to be
adjusted annually to reflect changes in consumer prices, populations, and services provided by these
entities. Among other provisions of Article XIIIB, if these entities' revenues in any year exceed the
amounts permitted to be spent,the excess would have to be returned by revising tax rates or fee schedules
over the subsequent two years.
"Appropriations subject to limitation" are authorizations to spend "proceeds of taxes," which
consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory
licenses,user charges or other fees to the extent that such proceeds exceed"the cost reasonably home by
such entity in providing the regulation, product or service," but"proceeds of taxes" excludes tax refunds
and some benefit payments such as unemployment insurance. No limit is imposed on appropriations of
funds which are not"proceeds of taxes," such as reasonable user charges or fees, and certain other non-
tax funds.
Not included in the Article XIIIB limit are appropriations for the debt service costs of bonds
existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations
required to comply with mandates of courts or the federal government and appropriations for qualified
capital outlay projects. The appropriations limit may also be exceeded in certain cases of emergency.
The appropriations limit for the District in each year is based on the District's limit for the prior
year, adjusted annually for changes in the cost of living and changes in population, and adjusted where
applicable, for transfer of financial responsibility of providing services to or from another unit of
government. The change in the cost of living is,at the District's option,either(1)the percentage change
in State per capita personal income, or (2) the percentage change in the local assessment roll on
nonresidential property. Either test is likely to be greater than the change in the cost of living index,
which was used prior to Proposition I IL Change in population is to be measured either within the
jurisdiction of the District or the County as a whole.
As amended by Proposition 111, the appropriations limit is tested over consecutive two-year
periods. Any excess of the aggregate `proceeds of taxes" received by a District over such two-year
period above the combined appropriations limits for those two years is to be returned to taxpayers by
reductions in tax rates or fee schedules over the subsequent two years. As originally enacted in 1979,the
District's appropriations limit was based on 1978-79 authorizations to expend proceeds of taxes and was
adjusted annually to reflect changes in cost of living and population (using different definitions, which
were modified by Proposition 111). Starting with Fiscal Year I990-91,the District's appropriations limit
was recalculated by taking the actual Fiscal Yew 1986-87 limit, and applying the annual adjustments as if
Proposition I I I had been in effect The District does not anticipate that any such appropriations
limitations will impair its ability to make Installment Payments as required by the Installment Purchase
Agreement.
Proposition lA
Proposition IA ("Proposition IA"),proposed by the Legislature in connection with the 2004-05
Budget Act and approved by the voters in November 2004,restricts State authority to reduce major local
tax revenues such as the tax shifts permitted to take place in Fiscal Years 2004-05 and 2005-06.
Proposition ]A provides that the State may not reduce any local sales tax rate, limit existing local
government authority to levy a sales tax rate or change the allocation of local sales tax revenues,subject
to certain exceptions. Proposition IA generally prohibits the State from shifting to schools or community
colleges any share of property tax revenues allocated to local governments for any fiscal year,as set forth
under the laws in effect as of November 3, 2004. Any change in the allocation of property tax revenues
80263944.5 48
among local governments within a county must be approved by two-thirds of both houses of the
Legislature.
Proposition IA provides,however, that beginning in Fiscal Year 2008-09, the State may shift to
schools and community colleges up to 8%of local government property tax revenues,which amount must
be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a
severe state financial hardship, the shift is approved by two thirds of both houses and certain other
conditions are met. The State may also approve voluntary exchanges of local sales tax and property tax
revenues among local governments within a county.
Proposition IA also provides that if the State reduces the vehicle license fee ("VLF") rate
currently in effect, 0.65% of vehicle value, the State most provide local governments with equal
replacement revenues. Further, Proposition IA requires the State, beginning July 1, 2005, to suspend
State mandates affecting cities, counties and special districts, excepting mandates relating to employee
rights, schools or community colleges, in any year that the State does not fully reimburse local
governments for their costs to comply with such mandates.
Proposition 62
On November 4, 1986, California voters adopted Proposition 62, a statutory initiative which
amended the California Government Code by the addition of Sections 53720-53730. Proposition 62
requires that(i)any local tax for general governmental purposes(a"general tax")most be approved by a
majority vote of the electorate; (ii)any local tax for specific purposes(a"special tax")must be approved
by a two-thirds vote of the electorate; (III)any general tax must be proposed for a vote by two-thirds of
the legislative body; and(iv)proceeds of any tax imposed in violation of the vote requirements most be
deducted from the local agency's property tax allocation. Provisions applying Proposition 62
retroactively from its effective date to 1985 are unlikely to be of any continuing importance; certain other
restrictions were already contained in the Constitution.
Most of the provisions of Proposition 62 were affirmed by the 1995 California Supreme Court
decision in Santa Clara County Local Transportation Authority v. Guardino,which invalidated a special
sales tax for transportation purposes because fewer than two-thirds of the voters voting on the measure
had approved the tax. The District has not imposed any taxes subject to the provisions of Proposition 62
and believes that it will not impair its ability to make its Installment Payments as required by the
Installment Purchase Agreement. The requirements of Proposition 62 have generally been superseded by
the enactment of Article XIIIC of the Constitution(Proposition 218)in 1996.
Article XIIIC and Article XIIID of the California Constitution
Proposition 218, a State ballot initiative known as the `Bight to Vote on Taxes Act," was
approved by the voters on November 5, 1996. The initiative added Articles XIIIC and XIIID to the
California Constitution,creating additional requirements for the imposition by most local governments of
"general taxes,""special taxes,""assessments,""fees,"and"charges." Proposition 218 became effective,
pursuant to its terms, as of November 6, 19%, although compliance with some of its provisions was
deferred until July 1, 1997, and certain of its provisions purport to apply to any tax imposed for general
governmental purposes (i.e., "general taxes") imposed, extended or increased on or after January 1, 1995
and prior to November 6, 1996.
Article XIIID imposes substantive and procedural requirements on the imposition, extension or
increase of any"fee" or"charge" subject to its provisions. A"fee" or"charge" subject to Article XIIID
includes any levy, other than an ad valorem tax,special tax or assessment, imposed by an agency upon a
parcel or upon a person as an incident of property ownership. Article XIIID prohibits, among other
things, the imposition of any proposed fee or charge, and, possibly, the increase of any existing fee or
80263944.5 49
charge, in the event written protests against the proposed fee or charge are presented at a required public
hearing on the fee or charge by a majority of owners of the parcels upon which the fee or charge is to be
imposed. Except for fees and charges for water, sewer and refuse collection services, the approval of a
majority of the property owners subject to the fee or charge,or at the option of the agency,by a two-thirds
vote of the electorate residing in the affected area,is required within 45 days following the public hearing
on any such proposed new or increased fee or charge. The California Supreme Court decisions in
Richmond v. Shasta Community Services District, 32 Cal.4th 409 (2004) ("Richmond"), and Bighorn-
Desert New Wafer Agency v. Verjil, 39 Cal.4th 205 (2006) ("Bighorn") have clarified some of the
uncertainty surrounding the applicability of Section 6 of Article XIIID to service fees and charges. In
Richmond, the Shasta Community Services District charged a water connection fee, which included a
capacity charge for capital improvements to the water system and a fire suppression charge. The Court
held that both the capacity charge and the fire suppression charge were not subject to Article XIIID
because a water connection fee is not a property-related fee or charge because it results from the property
owner's voluntary decision to apply for the connection. In both Richmond and Bighorn, however, the
Court stated that a fee for ongoing water service through an existing connection is imposed "as an
incident of property ownership" within the meaning of Article XIIID, rejecting, in Bighorn, the water
agency's argument that consumption-based water charges are not imposed "as an incident of property
ownership"but as a result of the voluntary decisions of customers as to how much water to use.
Article XIIID also provides that"standby charges"are considered"assessments"and most follow
the procedures required for "assessments" under Article XIIID and imposes several procedural
requirements for the imposition of any assessment, which may include (1) various notice requirements,
including the requirement to mail a ballot to owners of the affected property; (2) the substitution of a
property owner ballot procedure for the traditional written protest procedure,and providing that"majority
protest" exists when ballots (weighted according to proportional financial obligation) submitted in
opposition exceed ballots in favor of the assessments; and (3) the requirement that the levying entity
"separate the general benefits from the special benefits conferred on a parcel"of land. Article XIIID also
precludes standby charges for services that are not immediately available to the parcel being charged.
Article XIIID provides that all existing, new or increased assessments are to comply with its
provisions beginning July I, 1997. Existing assessments imposed on or before November 5, 1996, and
"imposed exclusively to finance the capital costs or maintenance and operations expenses for [among
other things] water" are exempted from some of the provisions of Article XIIID applicable to
assessments.
Article XIIIC extends the people's initiative power to reduce or repeal existing local taxes,
assessments,fees and charges. This extension of the initiative power is not limited by the terms of Article
XIIIC to fees, taxes, assessment fees and charges imposed after November 6, 1996 and absent other
authority could result in retroactive reduction in any existing taxes, assessments, fees or charges. In
Bighorn, the Court concluded that under Article XBIC local voters by initiative may reduce a public
agency's water rates and delivery charges. The Court noted, however, that it was not holding that the
authorized initiative power is free of all limitations, stating that it was not determining whether the
electorate's initiative power is subject to the public agency's statutory obligation to set water service
charges at a level that will 'pay the operating expenses of the agency, .. . provide for repairs and
depreciation of works,provide a reasonable surplus for improvements,extensions,and enlargements,pay
the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of
such debt as it may become due."
The District implemented a five-year plan beginning in Fiscal Year 2002-03 which included a
rate increase of$7.50 per year, or 9.4%, for all ratepayers to$87.50 per year. In May 2003,the Board of
Directors approved consideration of a 15%rate increase a year,for each year,over the then following five
years, upon 213 vote of the Board of Directors after conducting a noticed public hearing in compliance
with Article XIIID. The Board of Directors considered this increase necessary to provide needed capital
6026384CS 50
improvements,to cover additional treatment and disinfection costs,and to minimize rate increases over an
extended period of time. On July 2, 2003, the Board of Directors adopted Ordinance No. OCSD-20
increasing sanitary sewer service charges for all single family and multi-family residential units as well as
most commercial and industrial properties. The Ordinance was adopted by a 2/3 vote of the Board of
Directors as required under law after conducting a noticed public hearing in compliance with all laws.
The Ordinance increases the amount of the annual charges by approximately 15%per year for each of the
following five years, commencing with Fiscal Year 2003-04, thereby raising the single family residence
user rate from the then current$87.50 to$100.00,$115.00,$132.00,$152.00,and$175.00 annually. The
Ordinance discounted by 5%the annual increases which were the subject of the required protest hearings
on the fee increase as described above. After the completion of the CIP Validation Study for Fiscal Year
2005-06 that increased its ten year CIP cash Bow projects to $2.2 billion, or an average of$220 million
per year, the Board of Directors adopted Ordinance No. OCSD-26 increasing the Fiscal Year 2005-06
single family residential rate 31%,from$115 to$151 for such year. In May 2006,the Board of Directors
adopted Ordinance No. OCSD-30B increasing the Fiscal Year 2006-07 single family residential rate
9.8%, from$151.00 to$165.80 for such year,except those located in Revenue Area 14. These increases
represented the increase permitted under the protest hearings on the fee increase which was held in 2003.
In June 2007,the Board of Directors adopted Ordinance No.OCSD-32 increasing the Fiscal Year 2007-
08 single family residential rate by 9.8%. In February 2008, after a noticed public hearing,the Board of
Directors adopted Ordinance No.OCSD-35, which provides for annual increases in the single family
residential rate of 10.5%, 10%, 10%, 9.8% and 9.8%, respectively, for Fiscal Years 2008-09 through
2012-13.
Pursuant to the Master Agreement,the District will,to the extent permitted by law, fix,prescribe
and collect fees and charges for the services of the Wastewater System which will be at least sufficient to
yield during each Fiscal Year(a)Net Revenues equal to 125%of Debt Service on Senior Obligations for
such Fiscal Year, and(b)Net Operating Revenues equal to 100"/6 of Debt Service on all Obligations for
such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may
make such classification thereof as it deems necessary, but will not reduce the fees and charges then in
effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be
sufficient to meet the requirements of the Master Agreement. In the event that service charges are
determined to be subject to Article XIIID,and proposed increased service charges cannot be imposed as a
result of a majority protest,such circumstances may adversely effect the ability of the District to generate
revenues in the amounts required by the Master Agreement, and to make Installment Payments as
provided in the Installment Purchase Agreement. No assurance may be given that Articles XIIIC and
XIIID will not have a material adverse impact on Net Revenues.
Other Initiative Measures
Articles XIIIA, XIIIB, XIIIC and XIIID were adopted pursuant to California's constitutional
initiative process. From time to time other initiative measures could be adopted by California voters,
placing additional limitations on the ability of the District to increase revenues.
LEGAL MATTERS
The validity of the Certificates and certain other legal matters are subject to the approving
opinion of Fulbright& Jaworski L.L.P., Los Angeles, California, Special Counsel to the District. A
complete copy of the proposed form of Special Counsel opinion is attached as Appendix F hereto.
Special Counsel, in its capacity as Special Counsel to the District, undertakes no responsibility for the
accuracy, completeness or fairness of this Official Statement. Certain legal matters will be passed upon
for the District and the Corporation by Woodruff, Spradlin & Smart, a Professional Corporation, Costa
Mesa, California, and for the District by Fulbright& Jaworski L.L.P. as Disclosure Counsel to the
District,
802639".5 51
FINANCIAL ADVISOR
The District has retained Public Resources Advisory Group as financial advisor (the "Financial
Advisor") in connection with the execution and delivery of the Certificates. The Financial Advisor has
not been engaged,nor have they undertaken,to audit,authenticate or otherwise verify the information set
forth in the Official Statement, or any other related information available to the District,with respect to
accuracy and completeness of disclosure of such information. The Financial Advisor has reviewed this
Official Statement but makes no guaranty, warranty or other representation respecting accuracy and
completeness of the information contained in this Official Statement.
ABSENCE OF LITIGATION
There is no action, suit, proceeding,inquiry or investigation,at law or in equity,before or by any
court, regulatory agency, public board or body, pending or, to the best knowledge of the District,
threatened against the District affecting the existence of the District or the tides of its directors or officers
to their offices or seeking to restrain or to enjoin the sale or delivery of the Certificates,the application of
the proceeds thereof in accordance with the Trust Agreement, or in any way contesting or affecting the
validity or enforceability of the Certificates,the Trust Agreement,the Master Agreement,the Installment
Purchase Agreement or any action of the District contemplated by any of said documents, or in any way
contesting the completeness or accuracy of this Official Statement, or contesting the power: of the
District or its authority with respect to the Certificates or any action of the District contemplated by any of
said documents,nor,to the knowledge of the District is there any basis therefor.
There is no action, suit, proceeding, inquiry or investigation,at law or in equity,before or by any
court, regulatory agency, public board or body Pending or, to the best knowledge of the District,
threatened against the District contesting or affecting the ability of the District to collect amounts from
which Installment Payments are payable, or which would have a material adverse effect on the District's
ability to make Installment Payments.
FINANCIAL STATEMENTS
The basic financial statements of the District included in Appendix A to this Official Statement
have been audited by Mayer Hoffman McCann P.C., independent certified public accountants. In
January 2006 Mayer Hoffman McCann P.C. merged the District's former auditors, Conrad and
Associates, L.L.P., into its national practice. Sea APPENDIX A — "COMPREHENSIVE ANNUAL
FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR
ENDED JUNE 30, 2007" herein. The District has received the Government Finance Officer's
Association Certificate of Achievement for"Excellence in Financial Reporting"for 13 consecutive years.
The audited financial statements, including the footnotes thereto, should be reviewed in their entirety.
Mayer Hoffman McCann P.C. has consented to the inclusion of its report as Appendix A but has not
undertaken to update its report or to take any action intended or likely to elicit information conceming the
accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is
expressed by Mayer Hoffman McCann P.C. with respect to any event subsequent to its report dated
October 25,2007.
TAX MATTERS
The Internal Revenue Code of 1986(the"Code"), imposes certain requirements that must be met
subsequent to the issuance and delivery of the Certificates for the interest component of each Installment
Payment (the 'Interest Component"), and the allocable portion thereof distributable in respect of each
Certificate (the "Certificate Interest Distribution"), to be and remain excluded from the gross income of
the owner of such Certificate for federal income tax purposes. Noncompliance with such requirements
could cause such amounts to be included in gross income for federal income tax purposes retroactive to
90263944.5 52
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the date of delivery of the Installment Purchase Agreement and the Certificates. The District and the
Corporation have covenanted in the Installment Purchase Agreement and in the Trust Agreement to
maintain the exclusion pursuant to section 103(a) of the Code of the Interest Component from the gross
income of the District and its assigns, and of the Certificateholders, respectively, for federal income tax
Purposes.
Upon the delivery of the Certificates, Fulbright & Jaworski L.L.P., Los Angeles, California,
Special Counsel, will deliver its opinion that, under existing law, and assuming compliance with the
aforementioned covenants, the Interest Component allocable to and the Certificate Interest Distributions
in respect of a Certificate are excluded pursuant to section 103(a) of the Code from the gross income of
the owner of the Certificate for federal income tax purposes; inasmuch as the Installment Purchase
Agreement is not a"specified private activity bond"within the meaning of section 57(a)(5) of the Code,
neither the Interest Component nor any Certificate Interest Distribution is an item of tax preference for
purposes of computing the alternative minimum tax imposed by section 55 of the Code. It is noted that
the Interest Component allocable to and Certificate Interest Distributions in respect of a Certificate owned
by a corporation for federal income tax purposes may affect the computation of the alternative minimum
taxable income,upon which the alternative minimum tax is imposed,to the extent that such amounts are
taken into account in determining the adjusted earnings of that corporation (75%of the excess(if any)of
such adjusted current earnings over the alternative minimum taxable income being an adjustment to the
alternative minimum taxable income(determined without regard to the adjustment or to the alternative tax
net operating loss deduction)). Further, on that same day Special Counsel will render its opinion, based
solely on the foregoing, and upon existing provisions of the laws of California, that such Interest
Component and Certificate Interest Distributions are exempt from personal income taxes of the State of
California.
To the extent that a purchaser of a Certificate acquires that Certificate at a price that exceeds the
aggregate amount of scheduled distributions(other than distributions of qualified stated interest within the
meaning of section 1.1273-1 of the Treasury Regulations) to be made on the Certificate (determined, in
the case of a prepayable Certificate, under the assumption described below) (the "Stated Redemption
Price at Maturity"), such excess will constitute "bond premium" under the Code. Section 171 of the
Code, and the Treasury Regulations promulgated thereunder, provide generally that bond premium on a
tax-exempt obligation must be amortized on a constant yield, economic accrual, basis; the amount of
premium so amortized will reduce the owner's basis in such obligation for federal income tax purposes,
but such amortized premium will not be deductible for federal income tax purposes. In the case of a
purchase of a Certificate that is subject to prepayment, the determination whether there is amortizable
bond premium, and the computation of the accrual of that premium, must be made under the assumption
that the Certificate will be prepaid on the permitted date that would minimize the purchaser's yield on the
Certificate (or that the Certificate will not be prepaid prior to the stated maturity date in respect of that
Certificate if that would minimize the purchaser's yield). The rate and timing of the amortization of the
bond premium and the corresponding basis reduction may result in an owner realizing a taxable gain
when a Certificate owned by such owner is sold or disposed of for an amount equal to or in some
circumstances even less than the original cost of the Certificate to the owner.
The excess, if any, of the Stated Redemption Price at Maturity of a Certificate of a maturity over
the initial offering price to the public of the Certificates of that stated maturity set forth on the cover page
of this Official Statement is"original issue discount." Such original issue discount accruing in respect of
a Certificate is treated for federal income tax and California personal income tax purposes as additional
interest in respect of that Certificate and is excluded from the gross income of the owner thereof for
federal income tax purposes and exempt from the California personal income tax. Original issue discount
accruing in respect of any Certificate purchased at such initial offering price and pursuant to such initial
offering will accrue on a semiannual basis over the term to the stated maturity date in respect of the
Certificate on the basis of a constant yield method and, within each semiannual period, will accrue on a
ratable daily basis. The amount of original issue discount in respect of such a Certificate accruing during
80763844.5 53
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each period is added to the adjusted basis of such Certificate to determine taxable gain upon disposition
(including upon sale,prepayment or payment on maturity)of such Certificate. The Code includes certain
provisions relating to the accrual of original issue discount in the case of a purchaser of a Certificate who
purchases that Certificate other than at the initial offering price and pursuant to the initial offering of that
Certificate.
Any person considering purchasing a Certificate at a price that includes bond premium should
consult his or her own tax advisors with respect to the amortization and treatment of such bond premium,
including, but not limited to,the calculation of gain or loss upon the sale,prepayment or other disposition
of the Certificate. Any person considering purchasing a Certificate of a maturity in respect of which there
is original issue discount should consult his or her own tax advisors with respect to the tax consequences
of ownership of such Certificate, including the treatment of a purchaser who does not purchase in the
original offering and at the original offering price of that Certificate,the allowance of a deduction for any
loss on a sale or other disposition, and the treatment of accrued original issue discount in respect of such
Certificate under federal individual and corporate alternative minimum taxes.
Special Counsel has not undertaken to advise in the future whether any events after the date of
delivery of the Installment Purchase Agreement and the Certificates may affect the tax status of the
Interest Component and Certificate Interest Distributions. No assurance can be given that future
legislation, or amendments to statutes of the State of California or of the United States, if enacted into
law, will not contain provisions that could directly or indirectly reduce the benefit of the exemption of
such amounts from personal income taxes of the State of California or of the exclusion of such amounts
from the gross income of the owners of Certificates for Federal income tax purposes. Furthermore,
Special Counsel will express no opinion as to any federal, state, or local tax law consequences with
respect to the Installment Purchase Agreement, Certificates, Interest Component, or Certificate Interest
Distributions, if any action is taken with respect to the Installment Purchase Agreement,the Certificates,
or the proceeds thereof, or the Trust Agreement permitted or predicated upon the advice or approval of
counsel if such advice or approval is given by counsel other than Fulbright&Jaworski L.L.P.
Although Special Counsel is of the opinion that Interest Component and Certificate Interest
Distributions in respect of a Certificate are exempt from state personal income taxation and excluded
from the gross income of the owner thereof for federal income tax purposes, an owner's federal, state or
local tax liability may be otherwise affected by the ownership or disposition of the Certificate. The nature
and extent of these other tax consequences will depend upon the owner's other items of income or
deduction. Without limiting the generality of the foregoing,prospective purchasers of Certificates should
be aware that: (i) section 265 of the Code denies a deduction for interest on indebtedness incurred or
continued to purchase or carry the Certificates or, in the case of financial institution, that portion of an
owner's interest expense allocated to the Certificates; (ii) with respect to insurance companies subject to
the tax imposed by section 831 of the Code, section 832(bx5XB)(i) reduces the deduction for loss
reserves by 15% of the sum of certain items, including Interest Component and Certificate Interest
Distributions in respect of Certificates owned by such companies;(iii)Interest Component and Certificate
Interest Distributions accrued in respect of Certificates owned by certain foreign corporations doing
business in the United States for federal income tax purposes could be subject to a branch profits tax
imposed by section 884 of the Code; (iv)passive investment income, including Interest Component and
Certificate Interest Distributions accrued in respect of Certificates,accruing to a Subchapter S corporation
that at the close of a taxable year has Subchapter C earnings and profits may be subject to federal income
taxation under section 1375 of the Code if greater than 25% of the gross receipts of such Subchapter S
corporation in passive investment income; (v)section 86 of the Code requires recipients of certain Social
Security and certain Railroad Retirement benefits to take into account, in determining the taxability of
such benefits, histallments Interest and Certificate Interest Distributions accrued in respect of Certificates
owned by such recipients for federal income tax purposes; and (vi) under section 32(i) of the Code,
receipt of investment income, including Interest Component and Certificate Interest Distributions accrued
802638".5 54
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in respect of Certificates, may disqualify the owner thereof from obtaining the earned income credit.
Special Counsel has expressed no opinion regarding any such other tax consequences.
Special Counsel's opinion is not a guarantee of a result, but represents its legal judgment based
upon its review of existing statutes, regulations, published rulings and court decisions and the
representations and covenants of the District and the Corporation described above. No ruling has been
sought from the Internal Revenue Service (the "Service") with respect to the matters addressed in the
opinion of Special Counsel,and Special Counsel's opinion is not binding on the Service. The Service has
an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an audit
of the Certificates is commenced under current procedures the Service is likely to treat the District as the
"taxpayer," and the Owners would have no right to participate in the audit process. In responding to or
defending an audit of the tax-exempt status of the interest with respect to the Certificates,the District may
have different or conflicting interest from the Owners. Further,the disclosure of the initiation of an audit
may adversely affect the market price of the Certificates,regardless of the final disposition of the audit.
The proposed form of opinion of Special Counsel is attached hereto as Appendix F.
VERIFICATION OF MATHEMATICAL COMPUTATIONS
Causey Demgen & Moom Inc., certified public accountants (the "Verification Agent"), will
deliver a report stating that the firm has verified the accuracy of mathematical computations concerning
the adequacy of the uninvested cash initially deposited in the Escrow Fund to pay the interest due with
respect to the Refunded Certificates to and including the Prepayment Date,and to pay on the Prepayment
Date the Prepayment Price thereof.
The report of the Verification Agent will include the statement that the scope of its engagement
was limited to verifying the mathematical accuracy of the computations contained in such schedules
provided to it and that the Verification Agent has no obligation to update its report because of events
occurring,or data or information coming to its attention,after the date of its report
CONTINUING DISCLOSURE
The District has covenanted for the benefit of holders and beneficial owners of the Certificates
(a)to provide certain financial information and operating data (the "Annual ReporP') relating to the
District and the property in the District not later than eight months after the end of the District's Fiscal
Year(which currently would be March 1), commencing with the report for the 2007-08 Fiscal Year, and
(b)to provide notices of the occurrence of certain enumerated events, if material. The Annual Report will
be filed by the Trustee on behalf of the District, with each Nationally Recognized Municipal Securities
Information Repository and with each State Repository, if any. The notices of material events will be
filed by the Trustee on behalf of the District with the Municipal Securities Rulemaking Board and with
each State Repository,if any. The specific nature of the information to be contained in the Annual Report
or the notices of material events is set forth in the Continuing Disclosure Agreement. See APPENDIX D
— "FORM OF CONTINUING DISCLOSURE AGREEMENT." These covenants have been made in
order to assist the Initial Purchaser in complying with S.E.C. Rule 15c2-12 (the"Rule"). During the past
five years, the District has never failed to comply in all material respects with any previous undertaking
with respect to the Rule to provide annual reports or notices of material events.
RATINGS
The Certificates will be rated "_" by Moody's Investors Service ("Moody's"), "_" by
Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc. ("S&P"), and
" "by Fitch Ratings("Fitch"). Such ratings reflect only the views of the rating agencies, and do not
constitute a recommendation to buy, sell or hold the Certificates. Explanation of the significance of such
80263941.5 55
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ratings may be obtained only from the respective organizations at: Standard &Poor's Ratings Group,55
Water Street, New York, New York 10041; Moody's Investors Service, 7 World Trade Center, 250
Greenwich Street, New York, New York 10007; and Fitch Ratings, One State Street Plaza, New York,
New York 10004. There is no assurance that any such ratings will continue for any given period of time
or that they will not be revised downward or withdrawn entirely by the respective rating agencies, if in the
judgment of any such rating agency circumstances so warrant. Any such downward revision or
withdrawal of such ratings may have an adverse effect on the market price of the Certificates.
PURCHASE AND REOFFERING
(the 'Initial Purchaser") has purchased the Certificates from the District at a
competitive sale for a purchase price of$ (representing the aggregate principal amount of the
Certificates, plus a net original issue premium of$ , and less an Initial Purchaser's discount of
$ ). The public offering prices may be changed from time to time by the Initial Purchaser. The
Initial Purchaser may offer and sell Certificates to certain dealers and others at prices lower than the
offering prices shown on the cover page hereof.
MISCELLANEOUS
Included herein are brief summaries of certain documents and reports, which summaries do not
purport to be complete or definitive, and reference is made to such documents and reports for full and
complete statements of the contents thereof. Any statements in this Official Statement involving matters
of opinion, whether or not expressly so stated, are intended as such and not as representations of fact.
This Official Statement is not to be construed as a contract or agreement between the District and the
purchasers or Owners of any of the Certificates.
The execution and delivery of this Official Statement has been duly authorized by the District.
ORANGE COUNTY SANITATION DISTRICT
By:
Chair of the Board of Directors
80263944.5 56
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APPENDIX A
COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY
SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30,2007
20263M 5 A-1
v
APPENDIX B
THE COUNTY OF ORANGE-ECONOMIC AND DEMOGRAPHIC INFORMATION
80263944.5 B-1
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APPENDIX C
SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
80263844.5 C-1
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APPENDIX D
FORM OF CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT(this"Disclosure Agreement"), dated as
of September 1, 2008, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county
sanitation district organized and existing under the laws of the State of California (the "District"), and
DIGITAL ASSURANCE CERTIFICATION LLC,as Dissemination Agent(the"Dissemination Agent').
WITNESSETH:
WHEREAS, the District has caused to be executed and delivered Orange County Sanitation
District Refunding Certificates of Participation, Series 2008B (the"Certificates"), evidencing principal in
the aggregate amount of$_,000,000, pursuant to a Trust Agreement, dated as of the date hereof(the
"Trust Agreement'), by and among U.S. Bank National Association, as trustee (the "Trustee"), the
Orange County Sanitation District Financing Corporation(the"Corporation")and the District;and
WHEREAS, this Disclosure Agreement is being executed and delivered by the District and the
Dissemination Agent for the benefit of the owners and beneficial owners of the Certificates and in order
to assist the underwriters of the Certificates in complying with the Rule(as defined herein);
NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein
contained,the parties hereto agree as follows:
Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings
ascribed thereto in the Trust Agreement or, if not defined therein, in the Master Agreement, dated as of
August 1, 2000, by and between the District and the Corporation. In addition, the following capitalized
terms shall have the following meanings:
"Annual Report" means any Annual Report provided by the District pursuant to, and as
described in, Sections 2 and 3 hereof.
"Annual Report Date" means the date in each year that is eight months after the end of the
District's fiscal year,which date,as of the date of this Disclosure Certificate,is March 1.
"Disclosure Representative" means the Director of Finance and Administrative Services of the
District, or such other officer or employee of the District as the District shall designate in writing to the
Dissemination Agent and the Trustee from time to time.
"Dissemination Agent" means an entity selected and retained by the District, or any successor
thereto selected by the District. The initial Dissemination Agent shall be Digital Assurance Certification
LLC.
"Listed Events"means any of the events listed in subsection(a)of Section 4 hereof.
"National Repository" means any Nationally Recognized Municipal Securities Information
Repository for purposes of the Rule. As of the date hereof, the National Repositories approved by the
Securities and Exchange Commission are identified at http://www.sec.gov/info/mmicipal/�ir.htm.
80263944.5 D-1
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"Official Statement" means the Official Statement, dated September_, 2008, relating to the
Certificates.
"Participating Underwriter" means any of the original underwriters of the Certificates required
to comply with the Rule in connection with the offering of the Certificates.
"Repository"means each National Repository and each State Repository.
"Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934,as the same may be amended from time to time.
"State Repository" means any public or private repository or entity designated by the State of
California as a state repository for the purpose of the Rule and recognimd by the Securities and Exchange
Commission. As of the date of this Disclosure Agreement,there is no State Repository.
Section 2. Provision of Annual Reports. (a) The District shall provide, annually, an
electronic copy of the Annual Report to the Dissemination Agent, together with a copy for the Trustee,
not later than 15 days prior to the Annual Report Date. Promptly upon receipt of an electronic copy of the
Annual Report,the Dissemination Agent shall provide an Annual Report to each National Repository and
the State Depository (if any) not later than March 1 after the end of each fiscal year of the District,
commencing with the fiscal year ending lane 30,2008. The Annual Report may be submitted as a single
document or as separate documents comprising a package, and may cross reference other information as
provided in Section 3 of this Disclosure Agreement. If the District's fiscal year changes, it shall give
notice of such change in the same manner as for a Listed Event under subsection(f)of Section 4 hereof.
(b) If on the fifteenth (15th) day prior to the Annual Report Date, the Dissemination Agent
has not received a copy of the Annual Report, the Dissemination Agent shall contact the Disclosure
Representative by telephone and in writing (which may be by e-mail) to remind the District of its
undertaking to provide the Annual Report pursuant to Section 2(a).
(c) If the Dissemination Agent has not received an Annual Report by 12:00 noon on the first
business day following the Annual Report Date for the Annual Report,the District irrevocably directs the
Dissemination Agent to immediately send a notice to each National Repository or the MSRB and the
State Depository(if any)in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the name
and address of each National Repository and each State Repository, if any;and
(ii) file a report with the District and(if the Dissemination Agent is not the Trustee)
the Trustee certifying that the Annual Report has been provided pursuant to this Disclosure
Agreement, stating the date it was provided and listing all the Repositories to which it was
provided.
Section 3. Content of Annual Reports. The District's Annual Report shall contain or
incorporate by reference the following:
(a) Audited financial statements prepared in accordance with generally accepted accounting
principles as promulgated to apply to governmental entities from time to time by the Governmental
Accounting Standards Board. If the District's audited financial statements are not available by the time
90263844.5 D-2
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the Annual Report is required to be filed punment to subsection(a)of Section 2 hereof,the Annual Report
shall contain unaudited financial statements in a format similar to the financial statements contained in the
Official Statement, and the audited financial statements shall be filed in the same mamer as the Annual
Report when they become available.
(b) The following information with respect to the Certificates:
(i) The principal evidenced by the Certificates Outstanding as of the January 1 next
preceding the Annual Report Date and the principal amount of other Senior Obligations
outstanding as of the January 1 next preceding the Annual Report Date.
(ii) The balance in the Reserve Food,and a statement of the Reserve Requirement,as
of the January 1 next preceding the Annual Report Date.
(c) A summary report showing in reasonable detail Revenues, Operating Revenues,
Maintenance and Operation Costs,Net Revenues,Net Operating Revenues and debt service with respect
to the Senior Obligations for the fiscal year ended the June 30 next preceding the Amual Report Date.
(d) An update,for the fiscal year ended the June 30 next preceding the Annual Report Date,
of the information contained in the Official Statement in Table Nos. 2, 4, 6 (only with respect to
information on 6 under the headings Fiscal Year and Sewer Service Charge), 8 (not to include
projections),9, 10, 11, 12, 13, 14 and 16.
(a) In addition to any of the information expressly required to be provided under subsections
(a), (b), (c) and(d) of this Section, the District shall provide such further information, if my, as may be
necessary to make the specifically required statements,in the light of the circumstances under which they
are made,not misleading.
Any or all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues of the District or related public entities, which have been
submitted to each of the Repositories or the Securities and Exchange Commission. If the document
included by reference is a final official statement, it must be available from the Municipal Securities
Rulemaking Board. The District shall clearly identify each such other document so included by
reference.
Section 4. Reporting of Significant Events. (a) Pursuant to the provisions of this Section,
the District shall give, or cause to be given, notice of the occurrence of any of the following events with
respect to the Certificates,if material:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults.
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties.
(5) Substitution of credit or liquidity providers,or their failure to perform.
80263944.5 D-3
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(6) Adverse tax opinions or events affecting the tax-exempt status of the
security.
(7) Modifications to rights of security holders.
(8) Contingent or unscheduled Certificate calls.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the
securities.
(11) Rating changes.
(b) The District shall, within one business day of obtaining actual knowledge of the
occurrence of any of the Listed Events, contact the Disclosure Representative, inform such person of the
event, and request that the District promptly notify the Dissemination Agent in writing whether or not to
report the event pursuant to subsection(f)of this Section.
(c) Whenever the District obtains knowledge of the occurrence of a Listed Event, whether
because of a notice from the Dissemination Agent pursuant to subsection(b)of this Section or otherwise,
the District shall as soon as possible determine if such event would be material under applicable Federal
securities law.
(d) If the District has determined that knowledge of the occurrence of a Listed Event would
be material under applicable Federal securities law, the District shall promptly notify the Dissemination
Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to
subsection(f)of this Section.
(a) If in response to a request under subsection (b) of this Section, the District determines
that the Listed Event would not be material under applicable Federal securities law, the District shall so
notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the
occurrence pursuant to subsection(f)of this Section.
(f) If the Dissemination Agent has been instructed by the District to report the occurrence of
a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the Municipal
Securities Rulemaking Board and each Repository. Notwithstanding the foregoing, notice of Listed
Events described in paragraphs (8) and(9) of subsection (a)of this Section need not be given under this
subsection any earlier than the notice (if any) of the underlying event is given to holders of affected
Certificates pursuant to the Trust Agreement.
Section 5. Electronic Filing. Submission of Annual Reports and notices of Listed Events
to DisclosureUSA.org or another "Central Post Office" designated and accepted by the Securities and
Exchange Commission shall constitute compliance with the requirement of filing such reports and notices
with each Repository hereunder, and the District may satisfy its obligations hereunder to file any notice,
document or information with a Repository by filing the same with any dissemination agent or conduit,
including DisclosmeUSA.org or another"Central Post Office"or similar entity,assuming or charged with
responsibility for accepting notices, documents or information for transmission to such Repository,to the
extent permitted by the Securities and Exchange Commission or Securities and Exchange Commission
staff or required by the Securities and Exchange Commission. For this purpose, permission shall be
deemed to have been granted by the Securities and Exchange Commission staff if and to the extent the
80263944.5 D-4
A
agent or conduit has received an interpretive letter, which has not been revoked, from the Securities and
Exchange Commission staff to the effect that using the agent or conduit to transmit information to the
Repository will be treated for purposes of the Rule as if such information were transmitted directly to the
Repository.
Section 6. Termination of Reporting Obligation. The District's obligations under this
Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of
all of the Certificates. If such termination occurs prior to the final maturity of the Certificates,the District
shall give notice of such termination in the same manner as for a Listed Event under subsection If) of
Section 4 hereof.
Section 7. Dissemination Agent. The District may, from time to time, appoint or engage
another Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement,
and may discharge any such Dissemination Agent,with or without appointing a successor Dissemination
Agent. If at any time them is not any other designated Dissemination Agent, the Trustee shall be the
Dissemination Agent; provided it shall receive written notice of such designation at the time of such
designation.
Section 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the District and the Dissemination Agent may amend this Disclosure Agreement (and the
Dissemination Agent shall agree to any amendment so requested by the District), and any provision of
this Disclosure Agreement may be waived,provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of subsection(a)of Section 2 hereof,
Section 3 hereof or subsection(a)of Section 4 hereof,it may only be made in connection with a change in
circumstances that arises from a change in legal requirements, change in law, or change in the identity,
nature or status of an obligated person with respect to the Certificates,or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of
nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the
primary offering of the Certificates, after taking into account any amendments or interpretations of the
Rule,as well as any change in circumstances;and
(c) the proposed amendment or waiver (i) is approved by holders of the Certificates in the
manner provided in the Trust Agreement for amendments to the Trust Agreement with the consent of
holders, or(ii)does not, in the opinion of the Trustee and nationally recognized bond counsel,materially
impair the interests of holders.
If the annual financial information or operating data to be provided in the Annual Report is
amended pursuant to the provisions hereof, the annual financial information containing the amended
operating data or financial information shall explain, in narrative form, the reasons for the amendment
and the impact of the change in the type of operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be followed
in preparing financial statements, the annual financial information for the yam in which the change is
made shall present a comparison between the financial statements or information prepared on the basis of
the new accounting principles and those prepared on the basis of the former accounting principles. The
comparison shall include a qualitative discussion of the differences in the accounting principles and the
impact of the change in the accounting principles on the presentation of the financial information,in order
to provide information to investors to enable them to evaluate the ability of the District to meet its
80263844.5 D-5
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obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the
change in the accounting principles shall be sent to the Repositories.
Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed
to prevent the District from disseminating any other information, using the means of dissemination set
forth in this Disclosure Agreement or any other means of communication, or including any other
information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is
required by this Disclosure Agreement. If the District chooses to include any information in any Annual
Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this
Disclosure Agreement, the District shall have no obligation under this Disclosure Agreement to update
such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the District or the Dissemination Agent to
comply with any provision of this Disclosure Agreement,the Trustee may(and,at the written direction of
any Participating Underwriter or the holders of at least 25% of the aggregate amount of principal
evidenced by Outstanding Certificates and upon being indemnified to its reasonable satisfaction,shall), or
any holder or beneficial owner of the Certificates may, take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order, to cause the District,
Trustee or the Dissemination Agent, as the case may be, to comply with its obligations under this
Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of
Default under the Trust Agreement, and the sole remedy under this Disclosure Agreement in the event of
any failure of the District, the Trustee or the Dissemination Agent to comply with this Disclosure
Agreement shall be an action to compel performance.
Section 11. Duties. Immunities and Liabilities of Trustee and Dissemination Arent.
Article VIII of the Trust Agreement is hereby made applicable to this Disclosure Agreement as if this
Disclosure Agreement were (solely for this purpose) contained in the Trust Agreement. Neither the
Trustee nor the Dissemination Agent shall be responsible for the form or content of any Annual Report or
notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services
provided under this Disclosure Agreement. The Dissemination Agent (if other than the Trustee or the
Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in
this Disclosure Agreement, and the District agrees to indemnify and save the Dissemination Agent, its
officers,directors, employees and agents,harmless against any loss, expense and liabilities which it may
incur arising out of or in the exercise or performance of its powers and duties hereunder, including the
costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding
liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the
District under this Section shall survive resignation or removal of the Dissemination Agent and payment
of the Certificates.
Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the
District, the Trustee, the Dissemination Agent, the Participating Underwriter and holders and beneficial
owners from time to time of the Certificates,and shall create no rights in any other person or entity.
Section 13. Countermarts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
am63844.5 D-6
1
IN WITNESS WHEREOF,the parties hereto have executed this Disclosure Agreement as of the
date first above written.
ORANGE COUNTY SANITATION DISTRICT
By:
Lorenzo Tyner
Director of Finance and Administrative Services
DIGITAL ASSURANCE CERTIFICATION LLC,
as Dissemination Agent
By:
Authorized Representative
Acknowledged and Accepted:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
80263944.5 D-7
EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE
TO FILE ANNUAL REPORT
Name of Issuer: Orange County Sanitation District
Name of Issue: Orange County Sanitation District
Refunding Certificates of Participation, Series 2008B
Date of Issuance: September.2008
NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District')has not
provided an Annual Report with respect to the above-named Certificates as required by Section 6.09 of
the Trust Agreement, dated as of September 1, 2008, by and among U.S. Bank National Association, as
Trustee, the Orange County Sanitation District Financing Corporation and the District. [The District
anticipates that the Annual Report will be filed by .]
Dated: ORANGE COUNTY SANITATION DISTRICT
BY
cc: Trustee
Dissemination Agent
90267941.E D-8
APPENDIX E
BOOK-ENTRY SYSTEM
The description that follows of the procedures and recardkeeping with respect to beneficial
ownership interests in the Certificales,payment of principal and interest evidenced by the Certificates to
Participants or Beneficial Owners, corfrrmatton and transfer of beneficial ownership interests in the
Cert fcar s and other Certificate related transactions by and between DTC, Participants and Beneficial
Owners, is based on information furnished by D7C which the District and the Corporation each believes
to be reliable, but the District and the Corporation take no responsibility for the completeness or
accuracy thereof.
The Depository Trost Company—Book-Entry System
The Depository Trust Company("DTC"),New York,NY,will act as securities depository for the
securities (the "Certificates"). The Certificates will be issued as fully-registered securities registered in
the time of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully-registered Certificate will be issued for the Certificates in
the aggregate principal amount of such issue,and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million U.S. and non-U.S.
equity issues, corporate and municipal debt issues, and money market instruments (from over 100
countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the
post-trade settlement among Direct Participants of sales and other securities transactions in deposited
securities,through electronic computerized book-entry transfers and pledges between Direct Participants'
accounts. This eliminates the need for physical movement of securities certificates. Direct Participants
include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing
corporations,and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust
& Clearing Corporation ("DTCC"). DTCC is the holding company for DTC National Securities
Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing
agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also
available to others such as both U.S. and non-U.S. securities brokers and dealers, banks,trust companies,
and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA.
The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission.
More information about DTC can be found at wwwAtoc.com and www.dtc.org. The information on such
websites is not incorporated herein by such reference or otherwise.
Purchases of Certificates under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Certificates on DTC's records. The ownership interest of each actual
purchaser of each Certificate ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are,however,expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Certificates are to be accomplished by entries made on the books of Direct and Indirect Participants acting
an behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
80263844.5 E-1
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ownership interests in the Certificates, except in the event that use of the book-entry system for the
Certificates is discontinued.
To facilitate subsequent transfers, all Certificates deposited by Direct Participants with DTC are
registered in the time of DTC's partnership nominee, Cede & Co. or such other name as may be
requested by an authorized representative of DTC. The deposit of Certificates with DTC and their
registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the Certificates; DTC's records
reflect only the identity of the Direct Participants to whose accounts such Certificates are credited, which
may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible
for keeping account of their holdings on behalf of then customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Beneficial Owners of Certificates may wish to take
certain steps to augment transmission to them of notices of significant events with respect to the
Certificates,such as prepayments,tenders,defaults,and proposed amendments to the security documents.
For example, Beneficial Owners of Certificates may wish to ascertain that the nominee holding the
Certificates for their benefit has agreed to obtain and transmit notices to Beneficial Owners, in the
alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request
that copies of the notices be provided directly to them.
Prepayment notices shall be sent to DTC. If less than all of the Certificates within an issue are
being prepaid DTC's practice is to determine by lot the amount of the interest of each Direct Participant
in such issue to be prepaid.
Neither DTC nor Cede &Co. (nor such other DTC nominee)will consent or vote with respect to
the Certificates unless authorized by a Direct Participant in accordance with DTC's NMI Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Certificates are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Prepayment proceeds, distributions, and dividend payments on the Certificates will be made to
Cede&Co.,or such other nominee as may be requested by an authorized representative of DTC. DTC's
practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail
information from the District or the Trmstce on payable date in accordance with their respective holdings
shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of such Participant and not of
DTC, nor its nominee,the Trustee, or the District, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of prepayment proceeds, distributions, and dividend
payments to Cede &Co. (or such other nominee as may be requested by an authorized representative of
DTC) is the responsibility of the District or the Trustee, disbursement of such payments to Direct
Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial
Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the
Certificates at any time by giving reasonable notice to the District or the Trustee. Under such
e0263e4U E-2
a
circumstances, in the event that a successor securities depository is not obtained, Certificates are required
to be printed and delivered.
The District may decide to discontinue use of the system of book-entry-only transfers through
DTC (or a successor securities depository). In that event, Certificates will be printed and delivered to
DTC.
The information in this section concerning DTC and DTC's book-entry system has been obtained
from sources that the District believes to be reliable, but the District takes no responsibility for the
accuracy thereof.
Discontinuance of DTC Services
In the event(i)DTC determines not to continue to act as securities depository for the Certificates,
(ii)DTC shall no longer act and give notice to the Trustee of such determination or (iii)the District
determines that it is in the best interest of the Beneficial Owners that they be able to obtain Certificates
and delivers a written certificate to the Trustee to that effect, DTC services will be discontinued. If the
District determines to replace DTC with another qualified securities depository, the District shall prepare
or direct the preparation of a new single,separate, fully registered Certificate for each of the maturities of
the Certificates,registered in the name of such successor or substitute qualified securities depository or its
nominee. If the District fails to identify another qualified securities depository to replace DTC then the
Certificates shall no longer be restricted to being registered in the certificate registration books in the
name of Cede&Co., but shall be registered in such names as are requested in a certificate of the District,
in accordance with the Trust Agreement.
All Certificates may be presented for transfer by the Owner thereof, in person or by his attorney
duly authorized in writing, at the Principal Office of the Trustee, on the books required to be kept by the
Trustee pursuant to the previsions of the Trust Agreement, upon surrender of such Certifications for
cancellation accompanied by delivery of a duly executed written instrument of transfer in a form
acceptable to the Trustee. The Trustee may treat the Owner of any Certificate as the absolute owner of
such Certificate for all purposes, whether or not such Certificate shall be overdue, and the Trustee shall
not be affected by my knowledge or notice to the contrary; and payment of the interest and principal
evidenced by such Certificate shall be made only to such Owner, which payments shall be valid and
effectual to satisfy and discharge the liability evidenced by such Certificate to the extent of the sum or
sums so paid.
Whenever any Certificates shall be surrendered for transfer,the Trustee shall execute and deliver
new Certificates representing the same principal amount in Authorized Denominations. The Trustee shall
require the payment of any Owner requesting such transfer of any tax or other governmental charge
required to be paid with respect to such transfer. Certificates may be presented for exchange at the
Principal Office of the Trustee for a like aggregate principal amount of Certificates of other Authorized
Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax
or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be
required to transfer or exchange any Certificate during the period in which the Trustee is selecting
Certificates for prepayment, nor shall the Trustee be required to transfer or exchange any Certificate or
portion thereof selected for prepayment from and after the date of mailing the notice of prepayment
thereof.
80263844.5 E-3
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APPENDIX F
FORM OF APPROVING OPINION OF SPECIAL COUNSEL
Upon the execution and delivery of the Certificates, Fulbright& Jaworski LLP., Los Angeles,
California, Special Counsel to the District, will render its final approving opinion with respect to the
Certificates in substantially the following form:
[Date of Delivery)
Orange County Sanitation District
10944 Ellis Avenue
Fountain Valley,California 92708-7018
S�000,000
Orange County Sanitation District
Refunding Certificates of Participation
Series 2008B
Ladies and Gentlemen:
We have acted as Special Counsel in connection with the $_,000,000 aggregate principal
amount of(range County Sanitation District Refunding Certificates of Participation, Series 2008B (the
"Certificates") which evidence direct, fractional undivided interests of the Owners thereof in the
installment payments (the "Installment Payments'), and the interest thereon, to be made by the Orange
County Sanitation District (the "District") pursuant to the Installment Purchase Agreement, dated as of
September 1, 2008(the "Installment Purchase Agreement"),by and between the District and the Orange
County Sanitation District Financing Corporation(the"Corporation"). Pursuant to the Master Agreement
for District Obligations, dated as of August 1, 2000 (the "Master Agreement"), by and between the
District and the Corporation, the District has established conditions and terms upon which obligations
such as the Installment Payments and the interest thereon, will be incurred and secured. Installment
Payments under the Installment Purchase Agreement are payable solely from Net Revenues as provided
in the Installment Purchase Agreement, consisting primarily of all income and revenue received by the
District from the operation or ownership of the Wastewater System of the District (the "Wastewater
System") remaining after payment of Maintenance and Operation Costs. Capitalized terns used and not
otherwise defined herein shall have the meanings ascribed to such terms in the Installment Purchase
Agreement.
The Certificates are to be executed and delivered pursuant to a Trust Agreement, dated as of
September 1, 2008 (the`Trust Agreement"), by and among the District, the Corporation and U.S. Bank
National Association, as trustee(the "Trustee"). Proceeds from the sale of the Certificates, together with
other available moneys, will be used to (i)refund the District's Refunding Certificates of Participation,
1993 Series(the "Refunded Certificates")and pay a settlement amount to the provider of an interest rate
swap agreement relating to the Refunded Certificates, (ii)fund a reserve fund for the Certificates and
(iii)pay the costs incurred in connection with the execution and delivery of the Certificates.
80263844.5 F-1
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As Special Counsel,we have examined copies certified to us as being true and complete copies of
the Master Agreement,the Trust Agreement and the Installment Purchase Agreement and the proceedings
of the District in connection with the execution and delivery of the Certificates. We have also examined
such certificates of officers of the District, the Corporation and others as we have considered necessary
for the purposes of this opinion.
Based upon the foregoing we are of the opinion that:
1. The Master Agreement, the Installment Purchase Agreement and the Trust
Agreement each has been duly and validly authorized,executed and delivered by the District and,
assuming the Master Agreement, the Installment Purchase Agreement and the Trust Agreement
each constitutes the legally valid and binding obligation of the other parties thereto, enforceable
against such parties in accordance with its respective terms, each constitutes the legally valid and
binding obligation of the District, enforceable against the District in accordance with its
respective terms.
2. The obligation of the District to pay the Installment Payments, and the interest
thereon, and other payments required to be made by it under the Installment Purchase Agreement
is a special obligation of the District payable, in the manner provided in the Installment Purchase
Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase
Agreement lawfully available therefor.
3. Assuming due authorization, execution and delivery of the Trust Agreement and
the Certificates by the Trustee,the Certificates are entitled to the benefits of the Trust Agreement.
4. The Internal Revenue Code of 1986 (the "Code') imposes certain requirements
that must be met subsequent to the execution and delivery of the Certificates for the component of
each payment designated as interest in the Installment Purchase Agreement (the "Payment
Interest'), and the allocable portion thereof distributable in respect of each Certificate (the
"Certificate Interest Distribution'), to be and remain excluded from the gross income of the
owner thereof for federal income tax purposes. Noncompliance with such requirements could
cause such amounts to be included in gross income of such owner for federal income tax purposes
retroactive to the date of delivery of the Certificates. The Corporation and the District have
covenanted in the Trust Agreement, and the District has covenanted in the Installment Purchase
Agreement, to maintain the exclusion pursuant to section 103(a) of the Code of the Payment
Interest from the gross income of the owners thereof for federal income tax purposes.
In our opinion, under existing law, and assuming compliance with the aforementioned
covenant,the Payment Interest allocable to and the Certificate Interest Distributions in respect of
a Certificate are excluded pursuant to section 103(a) of the Code from the gross income of the
owner thereof for federal income tax purposes; inasmuch as the Installment Purchase Agreement
is not a "specified private activity bond" within the meaning of section 57(a)(5) of the Code,
neither the Payment Interest nor any Certificate Interest Distribution is an item of tax preference
for purposes of computing the alternative minimum tax imposed by section 55 of the Code. It is
noted that the acerual of Payment Interest allocable to and Certificate Interest Distributions in
respect of a Certificate owned by a corporation may affect the computation of income, upon
which the alternative minimum tax is imposed to the extent that such amounts are taken into
account in determining the adjusted earnings of that corporation (750/6 of the excess (if any) of
such adjusted current earnings over the alternative minimum taxable income being an adjustment
to the altemative minimum taxable income(determined without regard to the adjustment or to the
alternative tax net operating loss deduction)). Further, based solely on the foregoing and upon
80263saa.5 F-2
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existing provisions of the California Revenue and Taxation Code, we are of the opinion that
Payment Interest allocable to and the Certificate Interest Distributions in respect of a Certificate
are not subject to taxation under the Califoroia personal income tax.
We have not undertaken to advise in the future whether any events after the date of
delivery of the Installment Purchase Agreement may affect the tax status of the Payment Interest
or Certificate Interest Distributions. No assurance can be given that future legislation, if enacted
into law, will not contain provisions that could directly or indirectly reduce the benefit of the
exclusion of such amounts from the gross income of the owner of Certificates for federal income
tax purposes. Furthermore, we express no opinion as to any federal, state, or local tax law
consequences with respect to the Installment Purchase Agreement,Certificates,Payment Interest,
or Certificate Interest Distributions,if any action is taken with respect to the Installment Purchase
Agreement,the Master Agreement,the Trust Agreement,the Certificates,or the proceeds thereof,
permitted or predicated upon the advice or approval of counsel if such advice or approval is given
by counsel other than us.
Except as stated in the preceding three paragraphs, we express no opinion as to any
federal or state tax consequences of the ownership or disposition of the Installment Purchase
Agreement or the Certificates. We have not been requested to express, and do not express, any
view as to the compliance by any person with federal and state securities laws. With the
exception of the opinions expressed above, we have not been requested to express and do not
express, any opinion as to any matter affected by any taxing or other law of the State of
California.
The rights of the owners of the Certificates and the enforceability of the Certificates, the Master
Agreement,the Trust Agreement and the Installment Purchase Agreement may be subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or
hereafter enacted and may also be subject to the exercise of judicial discretion in appropriate cases. The
enforceability of the Certificates, the Master Agreement, the Trust Agreement and the Installment
Purchase Agreement is subject to the effect of general principles of equity,including,without limitation,
concepts of materiality, reasonableness, good faith and fair dealing, to the possible unavailability of
specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at
law,and to the limitations on legal remedies against governmental entities in California
No opinion is expressed herein on the accuracy, completeness or fairness of the Official
Statement or other offering material relating to the Certificates.
Our opinions are based on existing law, which is subject to change. Such opinions are further
based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our
opinions to reflect any facts or circumstances that may hereafter come to our attention or to reflect any
changes in any law that may hereafter occur or become effective. Moreover, our opinions are not a
guarantee of result and are not binding on the Internal Revenue Service; rather, such opinions represent
our legal judgment based upon our review of existing law that we deem relevant to such opinions and in
reliance upon the representations and covenants referenced above.
Respectfully submitted,
80263544.5 F-3
Fulbright&Jaworski L.L.P. Draft-MI3/08
i
OFFICIAL NOTICE INVITING BIDS
$_000,000..
ORANGE COUNTY SANITATION DISTRICT
REFUNDING CERTIFICATES OF PARTICIPATION
SERIES 2008B
(Book-Entry-Only)
NOTICE IS HEREBY GIVEN that bids will be received by the Orange County Sanitation
District (the "District") for the purchase of$_,000,000• original principal amount of Orange County
Sanitation District Refunding Certificates of Participation, Series 2008B(the"Certificates"). Bids for less
than all of the Certificates will not be accepted.The bids will be received in the form,at the place,and up
to the time specified below(unless postponed as described herein):
Date: Thursday,September 4,2008
11:30 a.m.,New York Time
Place: Orange County Sanitation District
10W Ellis Avenue
Fountain Valley,CA 92708-7018
Electronic Bids: As an accommodation to bidders,electronic proposals may be submitted
to Ipreo LLC; at www.newissuehome.i-deal.com and the Parity bid
delivery system (the "Electronic Service"). The Electronic Service will
act as agent of the bidder and not of the District in connection with the
submission of bids and the District assumes no responsibility or liability
for bids submitted through the Electronic Service. See "Information
Regarding Electronic Proposals"herein.
No Facsimile Bids: No bids will be accepted by facsimile.
Terms of the Certificates
The Preliminary Official Statement for the Certificates, August_, 2008, including the cover
page and all appendices thereto (the "Preliminary Official Statement"), provides certain information
concerning the sale and delivery of $_,000,000` aggregate principal amount of the Certificates
evidencing direct, undivided fractional interests in the Installment Payments (the "Installment
Payments"), and the interest thereon, payable by the District pursuant to the Installment Purchase
Agreement, dated as of September I, 2008 (the "Installment Purchase Agreement"), by and between the
District and the Orange County Sanitation District Financing Corporation (the "Corpomtion"). Each
bidder must have obtained and reviewed the Preliminary Official Statement prior to bidding for the
Certificates. This Official Notice Inviting Bids contains certain information for quick reference only, is
not a summary of the issue and governs only the terms of the sale of,bidding for and closing procedures
with respect to the Certificates. Bidders must read the entire Preliminary Official Statement to obtain
information essential to making an informed investment decision.
Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the
"Master Agreement'), by and between the District and the Corporation, the District has established and
Preliminary,subject to change.
SM66490.3
declared the conditions and terms upon which obligations such as the Installment Purchase Agreement,
and the Installment Payments and the interest thereon,will be incurred and secured.Installment Payments
under the Installment Purchase Agreement are payable solely from Net Revenues, as provided in the
Master Agreement and the Installment Purchase Agreement, consisting primarily of all income and
revenue received by the District from the operation or ownership of the Wastewater System of the District
(the"Wastewater System")remaining after payment of Maintenance and Operation Costs.
The Issue
The proceeds from the sale of the Certificates will be used to: (i)prepay all or a portion of certain
outstanding certificates of participation of the District, (ii) at the discretion of the District, finance any
settlement amount or termination payment relating to any certificates of participation prepaid by the
District (iii)fond a reserve fund for the Certificates and (iv) pay costs of execution and delivery of the
Certificates.The Certificates are to be executed and delivered pursuant to a Trust Agreement,dated as of
September 1, 2008 (the "Tout Agreement"), by and among the District, the Corporation and U.S. Bank
National Association,as trustee(the"Trustee"). Capitalized terms not defined herein shall have the same
definitions as used in the Trust Agreement or the Master Agreement.
Authorintion
On August 27,2008,the District and the Corporation authorized the execution and delivery of the
Installment Purchase Agreement and the Trust Agreement in connection with the execution and delivery
of the Certificates.
Outstanding Senior Obligations
The District has outstanding Senior Obligations payable on a parity with the Installment
Payments under the Installment Purchase Agreement, including a swap which is expected to be
terminated in connection with the prepayment of outstanding Senior Certificates (the"1993 Swap"). The
payments under the 1993 Swap are payable on a parity with the Installment Payments under the
Installment Purchase Agreement and other Senior Obligations, as provided in the Master Agreement.The
tern "Existing Senior Obligations" as used in the Preliminary Official Statement refers to the 1993
Agreement for Acquisition and Construction,the 1993 Swap,the 2000 Installment Purchase Agreement,
the 2003 Installment Purchase Agreement, the 2006 Installment Purchase Agreement, the 2007A
Installment Purchase Agreement,the 2007B Installment Purchase Agreement and the 2008A Installment
Purchase Agreement.
Security and Source of Payments
The Certificates evidence direct, undivided fractional interests in the Installment Payments, and
the interest thereon, paid by the District pursuant to the hustallment Purchase Agreement. The obligation
of the District to pay the Installment Payments and the interest thercon and other payments required to be
made by it under the Installment Purchase Agreement is a special obligation of the District payable,in the
mariner provided under the Installment Purchase Agreement, solely from Net Revenues and other funds
as provided in the Installment Purchase Agreement. Net Revenues generally consist of all income and
revenue received by the District from the operation or ownership of the Wastewater System remaining
after payment of Maintenance and Operation Costs,all as further provided in the Master Agreement.
The District's obligation to make Installment Payments from Net Revenues is on a parity with the
District's obligation to make payments with respect to its other outstanding obligations described as
Senior Obligations and all Reimbursement Obligations with respect to Senior Obligations,as provided in
902W9o.3 2
V
the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and is
subject to the provisions of the Master Agreement and is afforded all of the advantages,benefits,interests
and security for Senior Obligations pursuant to the Master Agreement. Pursuant to the Master
Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and
Reimbursement Obligations with respect to Senior Obligations,and the Net Revenues will not be used for
any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to
Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be
apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This
pledge constitutes a that lien on the Net Revenues for the payment of the Senior Obligations and
Reimbursement Obligations with respect to Senior Obligations. The tern Senior Obligations, generally
means all revenue bonds or notes(including bond anticipation notes and commercial paper)of the District
authorized executed, issued and delivered under and pursuant to applicable law,the Installment Purchase
Agreement and all other contracts (including financial contracts) or leases of the District authorized and
executed by the District under and pursuant to applicable law, the installment, lease or other payments
under which are, in accordance with the provisions of the Master Agreement,payable from Net Revenues
on a parity with the payments under the Master Agreement.
The District may at any time incur Subordinate Obligations; provided, however, that prior to
incurring such Subordinate Obligations, the District will have determined that the incurrence thereof will
not materially adversely affect the District's ability to comply with the requirements of the Master
Agreement. The District may at any time incur Reimbursement Obligations with respect to Subordinate
Obligations. For a description of the District's outstanding Senior Obligations and Subordinate
Obligations, see "FINANCIAL OBLIGATIONS — Existing Indebtedness" in the Preliminary Official
Statement.
The District may, in connection with the incurrence of Subordinate Obligations, pledge Net
Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to
Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be
junior and subordinate to the pledge of, and lien on,Net Revenues for the payment of Senior Obligations
and Reimbursement Obligations with respect to Senior Obligations.
Pursuant to the Master Agreement, the District is required to the extent permitted by law,to fix,
prescribe and collect fees and charges for the services and facilities of the Wastewater System which will
be at least sufficient to yield during each Fiscal Year(a)Net Revenues equal to 125% of Debt Service on
Senior Obligations for such Fiscal Year and(b)Net Operating Revenues equal to 100%of Debt Service
on all Obligations for such Fiscal Year.The District may make adjustments from time to time in such fees
and charges and may make such classification thereof as it deems necessary,but shall not reduce the fees
and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will
at all times be sufficient to meet the requirements of the Master Agreement See "SECURITY AND
SOURCES OF PAYMENT FOR THE CERTIFICATES — Rate Covenant" in the Preliminary Official
Statement.
The Trust Agreement provides for the funding of the Reserve Fund in an amount equal to the
"Reserve Requirement,"which is defined as an amount,as of any date of calculation,equal to the least of
(a) 10% of the original aggregate amount of principal evidenced by the Certificates (or if the amount of
original issue discount or premium applicable to the Certificates exceeds 2%.than 10% of the issue price
of the Certificates), (b) the maximum amount of remaining Installment Payments, and the interest
thereon, coming due in any one Certificate Year, and (c) 125% of the average amount of remaining
Installment Payments, and the interest thereon, coming due in each Certificate Year. Amounts in the
Reserve Fund may be used to pay principal of and interest evidenced by the Certificates to the extent that
amounts in the Principal Account and Interest Account we insufficient therefore. A portion of the
8026M90.3 3
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proceeds of the Certificates and,at the District's option, certain other available monies of the District, in
an amount equal to the Reserve Requirement will be deposited into the Reserve Fund.
Additional Obligations
In addition to the Existing Senior Obligations, the District may at any time incur Obligations
payable on a parity or on a subordinate basis to the payment by the District of the Installment Payments
upon satisfaction of conditions provided in the Master Agreement. See "SECURITY AND SOURCES
OF PAYMENT FOR THE CERTIFICATES—Limitations on Issuance of Additional Obligations"in the
Preliminary Official Statement.
Book-Entry-Only
The Certificates will be executed and delivered in the form of fully registered certificates payable
in lawful money of the United States of America.The Certificates will be initially delivered only in book-
entry form and will be registered in the name of Cede & Co., as nominee of The Depository Trust
Company, New York, New York ("DTC"), which will act as securities depository for the Certificates.
Individual purchases of the Certificates will be made in book-entry form only. Purchasers of Certificates
will not receive physical certificates representing their ownership interests in the Certificates purchased.
The Certificates will be delivered in Authorized Denominations of $5,000 and any integral multiple
thereof. Payments of principal and interest evidenced by the Certificates are payable directly to DTC by
the Trustee. Upon receipt of payments of such principal and interest, DTC will in turn distribute such
payments to the beneficial owners of the Certificates. So long as the Certificates are in the DTC book-
entry system,the interest,principal and prepayment premiums, if any, due with respect to the Certificates
will be payable by the Trustee,or its agent,to DTC or its nominee.
Principal and Interest Payments
The Certificates will be dated as of the date of initial delivery and will evidence interest from that
date (computed on the basis of a 360-day year of twelve 30-day months). Interest evidenced by the
Certificates is payable semiannually on February 1 and August I of each year, commencing on
February 1, 2009. Payment of principal and prepayment premium, if any, evidenced by the Certificates
will be paid in lawful money of the United States of America upon presentation and surrender thereof at
the Principal Office of the Trustee.
Principal Amortization
The Certificates will be executed and delivered in the approximate aggregate original principal
amount of $ ,000,000" and will be subject to principal amortization through serial maturities on
August I in the years 2009 though 2016 in the amounts set forth in the Official Bid Form.
No Prepayment
The Certificates are not subject to prepayment prior to maturity.
Preliminary,subject to change.
80266490..3 4
Interest Rates,Reoffering Prices,and Premium or Discount Bids
Bidders must bid to purchase all and not part of the Certificates and must submit their bids on the
Official Bid Form. Bidders must specify a rate of interest for each maturity of the Certificates. The rates
of interest must be expressed in multiples of one-eighth ('/s) or one-twentieth (4p)of one percent (M),
and no interest rate can exceed 6e/u per annum. All Certificates of the same maturity most evidence
interest at the same rate.
The successful bidder will,within 30 minutes after being notified of the award of the Certificates,
advise the District of the initial bona fide public reoffering prices of each maturity of the Certificates on
the date of award. The successful bidder will also be required, prior to delivery of the Certificates, to
furnish to the District a certificate("Bidder's Certificate") acceptable to Special Counsel and taking into
account any post bid adjustment of the principal amount of any of the maturities of the Certificates,which
states with respect to each maturity of the Certificates that such successful bidder either(A)has purchased
the applicable maturity of the Certificates for its own account and not with a view to distribution or resale
and not in the capacity of a bond house,broker or other intermediary and the price at which such purchase
was made, or(B)(1)has made a bona fide public offering to the public of each applicable maturity of the
Certificates at the prices indicated in the information supplied on the date of the award,and(2)an amount
at least equal to 10 percent of each such maturity of the Certificates was sold to the public at the prices
indicated on the date of the award, with the exception of those maturities, if any, identified in such
Bidder's Certificate, as to which such certificate shall explain the reasons why at least 10 percent of each
such maturity was not sold to the public at the price indicated for each such maturity on the date of the
award. For the purposes of the information submitted on the date of the award and the Bidder's
Certificate,the"public" does not include bond houses, brokers or similar persons or organizations acting
in the capacity of underwriters or wholesalers. In making such representations,the successful bidder must
reflect the anticipated existence, if any, of a "derivative product" (e.g., a tender option) offered or to be
offered by the bidder or its affiliate in connection with the initial sale of any of the Certificates. The
successful bidder may also be asked by Special Counsel to clarify any discrepancies between the Bidder's
Certificate and publicly available information relating to trades of the Certificates and to explain the
failure to sell at least 10%of each maturity to the public at the prices indicated on the date of the award.
Bidders may bid to purchase Certificates from the District at a discount or with a premium;
however, no bid will be considered if the bid is to purchase Certificates at an aggregate price less than
99% or more than 103% of the aggregate principal amount of the Certificates. No bid will be accepted
which contemplates the waiver of any interest or other concession by the bidder as substitute for payment
in full of the purchase price. Bids which do not conform to the terms of this section may be rejected. See
"Right to Reject Bids,Waive Irregularities"below.
Adjustment of Principal Amounts After Receipt of Bids
The principal amounts of the Certificates set forth in the Official Bid Form reflect estimates of the
District as to the likely interest rates of the winning bid and the premium or discount contained in the
winning bid. After selecting the winning bid the amortization schedule for the Certificates may be
adjusted in $5,000 increments if the District elects to do so, to reflect the actual interest rates and any
discount or premium in the winning bid to properly fund the prepayment escrow and any swap settlement
or termination amount and to accommodate certain other requirements or preferences of the District.
Such adjustments will not change any Certificate in any year by more than the greater of 10% or
$200,000.The dollar amount bid for the Certificates by the winning bidder will be adjusted to reflect any
such adjustment in the applicable amortization schedule. Any such adjustment will change the total (but
not the per Certificate) dollar amount of purchaser's discount and original issue discount or premium, if
any, provided in such bid. Any such adjustment will be communicated to the winning bidder within 24
90:66e90.3 5
a
hours after receipt of such bid by the District. Changes in the amortization schedule made as described in
this paragraph will not affect the determination of the winning bidder or give the winning bidder any right
to reject the Certificates.
Insurance
The successful bidder may purchase municipal bond insurance, if available, for some or all of the
Certificates. However, the delivery of the Certificates shall not be conditioned upon the issuance of any
such insurance. The District makes no representation as to whether the Certificates qualify for insurance.
Payment of any insurance premium and satisfaction of any conditions to the issuance of a municipal bond
insurance policy, including payment for any legal opinion to be delivered to any insurer, shall be the sole
responsibility of the bidder. In particular, the District, at its option, may not enter into any additional
agreements with respect to the provision of any such insurance. FAILURE OF THE INSURANCE
PROVIDER TO ISSUE ITS POLICY SHALL NOT JUSTIFY FAILURE OR REFUSAL BY THE
SUCCESSFUL BIDDER TO ACCEPT DELIVERY OF, OR PAY FOR THE CERTIFICATES. Each
successful bidder must provide the District with the municipal bond insurance commitment, if any,
including the amount of the policy premium, and information with respect to the municipal bond
insurance policy and insurance provider for the inclusion in the final Official Statement within one
business days following the award of the bid by the District.The successful bidder will be required,prior
to the delivery of the Certificates, to furnish to the District a certificate acceptable to Special Counsel,
Fulbright&Jaworski L.L.P.,stating that,in its opinion,the amount of the premium paid for the municipal
bond insurance policy is not in excess of the present value of the expected interest savings as a result of
such policy.
Form of Bid
BIDS FOR LESS THAN ALL OF THE CERTIFICATES WILL NOT BE ACCEPTED. Each
bid must be on the Official Bid Form. All electronic proposals shall be deemed to incorporate the
provisions of the Official Bid Form and must be unconditional and irrevocable. Except for proposals
submitted in accordance with the following paragraph, each bid must be accompanied by the applicable
bid check or Surety Bond described under the caption "Bid Check" below. In addition, each bidder is
requested to supply an estimate of the true interest cost resulting from its bid, computed as prescribed
below under the caption "Award, Delivery and Payment,"which shall be considered as informative only
and not binding on either the bidder or the District. Each bid most be in accordance with the terms and
conditions set forth in this Official Notice Inviting Bids.
The District will make its best efforts to accommodate the electronic bids; however, the District,
the Financial Advisor(Public Resources Advisory Group) and Special Counsel assume no responsibility
for any error contained in any electronic bid, or for the failure of any electronic bid to be transmitted or
received at the official time for receipt of such bids. The official time for receipt of bids will be
determined by the District at the place of the bid opening, and the District shall not be required to accept
the time kept by Electronic Service as the official time. The District assumes no responsibility for
informing any bidder prior to the deadline that its bid is incomplete,or not received.
If multiple timely bids are received from a single bidder the District shall accept the best of such
bids and each bidder agrees that by submitting any bid to be bound by its best bid.
Information Regarding Electronic Proposals
Electronic proposals most be submitted through the Electronic Service. If any provision of this
Official Notice Inviting Bids conflicts with information provided by the Electronic Service, this Official
803664903 6
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Notice Inviting Bids shall control. The District is not responsible for the proper operation of, and shall
have no liability for any delays or interruptions of or any damages caused by the Electronic Service.The
District is using the Electronic Service as a communication mechanism and not as the District's agent to
conduct electronic bidding for the Certificates. The District is not bound by any advice of or
determination by the Electronic Service to the effect that any particular bid complies with the terns of
this Official Notice Inviting Bids. All costs and expenses incurred by prospective bidders in connection
with their submission of bids through the Electronic Service are the sole responsibility of such bidders
and the District is not responsible for any such casts or expenses. Further information about the Electronic
Service, including any fee charged may be obtained from Ipreo LLC, 1359 Broadway, Second Floor,
New York, NY 10018 (212-849-5021). The District assumes no responsibility or liability for bids
submitted through the Electronic Service. The District shall be entitled to assume that any bid submitted
through the Electronic Service has been made by a duly authorized agent of the bidder.
Bid Check
Each bidder must provide with its bid a certified or cashier's check payable in same day or next
day funds drawn on a responsible bank having an office in Orange County, California equal to
$300,000.00 ("Bid Check Amount") payable to the order of"Orange County Sanitation District," or a
financial surety bond ("Surety Bond") in the amount of the Bid Check Amount issued by an insurance
company rated AAA by Standard & Poor's and licensed to issue such a bond in the State of California,
naming the District as the beneficiary and identifying the bidder whose deposit is guaranteed by the
Surety Bond. If the successful bidder has provided a Surety Bond, such bidder shall wire transfer to the
District the amount of the Bid Check Amount in immediately available federal funds not later than 3:00
p.m. (New York Time)on the business day next succeeding the day of acceptance of the proposal which
amount shall be deposited in an escrow fund or account or a similar fund and applied to the purchase
price of the Certificates. If the District has not received such federal funds wire transfer by the time stated
the District may draw upon the Surety Bond to satisfy the successful bidders deposit requirements. The
check accompanying any accepted proposal shall be cashed and deposited in an escrow fund or account or
a similar fund and applied to the purchase price of the Certificates at the time of delivery of the
Certificates. If after the award of the Certificates,the successful bidder fails to complete the purchase on
the terns stated in its proposal, unless such failure of performance shall be caused by any act or omission
of the District, any amount received from such bidder by the District,whether by paid check or pursuant
to the Surety Bond procedure set forth above, shall be retained by the District as stipulated liquidated
damages.Any check accompanying an unaccepted proposal will be returned promptly.No interest will be
paid upon the deposit made by any bidder.
Official Statement
The District has approved a Preliminary Official Statement for the Certificates, dated the date of
this Official Notice Inviting Bids, which the District has "deemed final" for purposes of Rule 15c2-12
promulgated by the Securities and Exchange Commission, as amended (the "Rule"), although subject to
revision,amendment and completion in conformity with the Rule.The District will provide the successful
bidder such reasonable number of printed copies of the final Official Statement as such bidder may
reasonably request no later than seven business days after the day the Certificates are awarded. Up to 125
copies of the final Official Statement will be famished without cost to the successful bidder and further
copies, if desired, will be made available at the successful bidder's expense. The successful bidder shall
file the final Official Statement with a nationally recognized municipal securities information repository
on a timely basis. The successful bidder shall, by accepting the award agree at all times to comply with
the provisions of the Rule and with all applicable rules of the Municipal Securities Rulemaking Board.
802e6490..3 7
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Award,Delivery and Payment
If satisfactory bids are received,the Certificates will be awarded to the highest responsible bidder
not later than 24 hours after the time established for the receipt of bids. The highest bidder shall be the
bidder submitting the best price for the Certificates,which best price shall be that resulting in the lowest
true interest cost with respect to the Certificates.The true interest cost shall be computed by doubling the
semi-annual interest rate (compounded semi-annually) necessary to discount the debt service payments
from their respective payment dates to the date of the Certificates and to the price bid. If two or more
bidders have bid the same time interest cost,the award shall be made at the sole discretion of the District.
Delivery of the Certificates is expected to occur on or about September 11,2008.The Certificates
will be delivered through the facilities of DTC,New York,New York.The successful bidder shall pay for
the Certificates on the date of delivery in Los Angeles,California in immediately available federal funds.
Any expenses of providing federal funds shall be home by the purchaser. Payment on the delivery date
shall be made in amount equal to the price bid for the Certificates less the amount of the good-faith
deposit.
Right to Reject Bids,Waive Irregularities
The District reserves the right to reject any and all bids and to the extent permitted by law to
waive any irregularity or informality in any bid.
CUSIP Numbers
It is anticipated that CUSIP numbers will be printed on the Certificates, but the District will
assume no obligation for the assignment or printing of such numbers on the Certificates or for the
correctness of such numbers,and neither the failure to print such numbers on any Certificate nor any error
with respect thereto shall constitute cause for a failure or refusal by the purchasers thereof to accept
delivery of and make payment for the Certificates. The cost for the assignment of CUSIP numbers to the
Certificates will be the responsibility of the successful bidder.
California Debt and Investment Advisory Commission
The successful bidder will be required to pay all fees due to the California Debt and Investment
Advisory Commission ("CDIAC") under California law. CDIAC will invoice the successful bidder after
the delivery of the Certificates.
Legal Opinions
The District will furnish to the successful bidder at the closing of the Certificates, the legal
opinion of Special Counsel to the effect that,in the opinion of Special Counsel, based upon an analysis of
existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy
of certain representations and compliance with certain covenants, the interest component of each
Installment Payment and the allocable portion thereof distributable in respect of each Certificate is
excluded from gross income for federal income tax purposes under section 103 of the Internal Revenue
Code of 1986 and is exempt from State of California personal income taxes, and that in the further
opinion of Special Counsel the interest component of each Installment Payment and the allocable portion
thereof distributable in respect of each Certificate is not a specific preference item for purposes of the
federal individual or corporate alternative minimum taxes, although Special Counsel observes that such
interest is included in adjusted current earnings when calculating corporate alternative minimum taxable
9026sa90.3 8
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income. Special Counsel will express no opinion regarding any other tax consequences related to the
ownership or disposition of,or the accrual or receipt of interest on,the Certificates.
Change in Tax Exempt Status
At any time before the Certificates are tendered for delivery,the successful bidder may disaffirm
and withdraw its proposal if the interest on the same type and character as that evidenced by the
Certificates(as determined by Special Counsel)shall be declared to be includable in gross income under
federal income tax laws, either by a ruling of the Internal Revenue Service or by a final decision of any
federal court, or shall be declared taxable by the terms of any federal income tax law enacted subsequent
to the date of this Official Notice Inviting Bids.
Closing Documents
The District will furnish to the successful bidder at the time of delivery of the Certificates: (1)a
certificate certifying(i)that as of and at the time of delivery of the Certificates,there is no action, suit,
proceeding or investigation, pending or, to the best knowledge of the District, threatened against or
affecting the District, (A)which affects or seeks to prohibit, restrain or enjoin the execution and delivery
of the Certificates or the Trust Agreement, (B) in any way contesting the validity of the Certificates,the
Installation Purchase Agreement or the Trust Agreement or the powers of the District to enter into or
perform its obligations under such documents to which it is a party or the existence of the District, or
(C)wherein an unfavorable decision, ruling or finding would materially and adversely affect the District,
or the validity or enforceability of the Certificates, the Installation Purchase Agreement or the Trust
Agreement or the ability of the District to perform its obligations under such documents to which it is a
party, (ii)that the Preliminary Official Statement did not on the date of sale of the Certificates and the
Official Statement does not on the date of delivery contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements contained therein, in the light of the
circumstances under which they were made,not misleading,and(2)a receipt of the District showing that
the purchase price of the Certificates has been received by the District.
Continuing Disclosure
To assist the successful bidder in complying with the Rule, the District will undertake, pursuant
to the Continuing Disclosure Agreement, to provide certain annual financial information, and notices of
the occurrence of certain events, if material. A description of the Continuing Disclosure Agreement is set
forth in the Preliminary Official Statement and will be set forth in the final Official Statement.
Additional Information
Electronic copies of the Trust Agreement, the Installment Purchase Agreement, the Master
Agreement, this Official Notice Inviting Bids, the Official Bid Form, and the Preliminary Official
Statement will be famished to any potential bidder upon request made to the District's Financial Advisor
at: Public Resources Advisory Croup, 11945 West Olympic Boulevard Suite 640, Los Angeles, CA
90064,31 GA77-8487,via e-mail at Ichoi@pmgla.com.
Right to Modify or Amend
The District reserves the right to modify or amend this Official Notice Inviting Bids, including
but not limited to the right to adjust and change the principal amount of the Certificates being offered;
provided,however,that such notifications or amendments shall be made not later than September 3,2008,
by 3:00 p.m., New York Time and communicated through Thomson Municipal Market Monitor
80266490.3 9
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(available at http://w .im3.com)and by facsimile transmission to any qualified bidder timely requesting
such notice. Bidders are required to bid upon the Certificates as so modified.
Cancellation or Postponement
The District reserves the right to cancel or postpone, from time to time,the date established for
the receipt of bids for any reason at any time. Any such postponement will be announced by Thomson
Municipal Market Monitor. If any date fixed for the receipt of bids and the sale of the Certificates is
postponed, any alternative sale date will be announced via Thomson Municipal Market Monitor at least
24 hours prior to such alternative sale date and will be provided by facsimile transmission to any qualified
bidder timely requesting such notice. On any such alternative sale date, any bidder may submit a sealed
bid for the purchase of the Certificates in conformity in all respects with the provisions of this Official
Notice Inviting Bids except for the date of sale and except for the changes announced by Thomson
Municipal Market Monitor at the time the sale date and time are announced.
Dated: August_,2008
90266490.3 10
v
OFFICIAL BID FORM
$_,000,000'
ORANGE COUNTY SANITATION DISTRICT
REFUNDING CERTIFICATES OF PARTICIPATION
SERIES 2008B
September_,2008
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley,CA 92708-7018
Attn: Lorenzo Tyner
Ladies and Gentlemen:
We hereby offer to purchase all of the $_,000,000• aggregate principal amount of the Orange County
Sanitation District, Refunding Certificates of Participation Series 2008B (the "Certificates"), more
particularly described in your Official Notice Inviting Bids dated August_,2008, which is incorporated
herein by reference, and made a part thereof,at a purchase price of$ (which purchase price
is not less than 991.or more than 103% of the aggregate principal amount of the Certificates). This offer
is for Certificates evidencing interest at the rates and in the form of serial maturities as set forth in the
table on the following page.
The bid is subject to acceptance not later than 24 hours after the expiration of the time established for the
final receipt of bids.
Our calculation of the true interest cost, which is considered to be informative only and not a part of the
bid is_%.
(PLEASE CHECK ONE OF THE FOLLOWING TWO PARAGRAPHS)
[ ] There is enclosed herewith a certified check or cashier's check for $300,000 drawn on a
responsible bank having an office in Orange County, California payable in same day or next day funds to
the order of the Orange County Sanitation District(the"District').
[ ] A surety bond has been provided to the District in the amount of $300,000 issued by an
insurance company rated AAA by Standard & Poor's and licensed to issue such a bond in the State of
California, naming the District as beneficiary and identifying the bidder whose deposit is guaranteed by
the surety bond.
We have noted that payment of the purchase price is to be made in immediately available Federal Funds
at the time of delivery of the Certificates. If we are the successful bidder,we will(1)within one hour after
being notified of the award of the Certificates, advise the District of the initial public offering prices of
the Certificates, (2) prior to delivery of the Certificates, furnish a certificate, acceptable to Special
Counsel, Fulbright& Jaworski L.L.P., as to the "issue price" of the Certificates within the meaning of
Section 1273 of the Internal Revenue Code of 1986; and (3) if municipal bond insurance has been
pumbased for some or all of the Certificates, prior to delivery of the Certificates finish a certificate,
Preliminary,subject to change.
80266490.3
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acceptable to said Special Counsel, as to the present value of the expected interest savings as a result of
such insurance.
Maturity Principal Interest
August 1 Amoun a Rate
2009
2009
2010
2011
2012
2013
2014
2015
2016
Total $ ,000,000
We represent that we have full and complete authority to submit this bid on behalf of our bidding
syndicate and the undersigned will serve as the lead manager for the group if the Certificates are awarded
pursuant to this bid. We certify (or declare) under penalty of perjury under the laws of the State of
California that this proposal is genuine, and not a sham or collusive, nor made in the interest of or on
behalf of any person not herein named, and that the bidder has not directly or indirectly induced or
solicited any other bidder to put in a sham bid or any other person, firm or corporation to refrain from
bidding,and that the bidder has not in any manner sought by collusion to secure for himself an advantage
over any other bidder.
Respectfully Submitted,
Account Manager:
By:
Address(for Return of Unsuccessful Bid Check):
City:
State:
Telephone:
Following(or attached)is a list of the members of our account on whose behalf this bid is made.
Preliminary,subject to change.
90266490.3 2
DRAFT OF
Y O9/13/08
NOTICE OF INTENTION TO SELL
S_10001000'
Orange County Sanitation District
Refunding Certificates of Participation
Series 2008B
NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District")
intends to receive sealed bids and electronic bids until 11:30 a.m.,New York time,on Thursday,
September 4,2008,
through the use of an electronic bidding service offered by Ipreo LLC;at www.newissuebome.i-
deal.com and the Parity bid delivery service, for the purchase of all of the above-captioned
Refimding Certificates of Participation(the"Certifieates')dated as of the date of initial delivery,
and maturing on such dates as described in the related Official Notice Inviting Bids (the
"Notice"). No bids will be accepted by facsimile. Bids for less than all of the Certificates will
not be accepted. The District reserves the right to postpone the date established for the receipt of
bids as more fully described under the paragraph"Cancellation or Postponement"in the Notice.
NOTICE IS HEREBY FURTHER GIVEN that electronic copies of the Notice and the
Preliminary Official Statement issued in connection with the sale of the Certificates may be
obtained from the District's financial advisor, Public Resources Advisory Group, 11845 West
Olympic Blvd., Suite 640, Los Angeles, California 90064, 310477-8487, via e-mail:
Ichoi raala.com.
Orange County Sanitation District
Dated: August_,2008
Preliminary,subject to cbmge.
80263885.2
V
ulbrieht& Jawanki L.L.P.-Draft-08/07/08
ESCROW AGREEMENT
by and between
ORANGE COUNTY SANITATION DISTRICT
and
U.S. BANK NATIONAL ASSOCIATION,
as Escrow Agent and Prior Trustee
Dated as of Alayle [ember 1, 2008
Orange County Sanitation District
Refunding Certificates of Participation
49921M Series
BOWS3I l
tl
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Escrow Agreement'), dated as of
MaySe I� 1, 2008, is by and between the ORANGE COUNTY SANITATION DISTRICT,
a county sanitation district organized and existing under the laws of the State of California (the
"District"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, as escrow agent (the
"Escrow Agent') and as trustee under the Prior Trust Agreement referenced below (the "Prior
Trustee").
WITNESSETH:
WHEREAS, to refinance the acquisition, construction and installation of certain
improvements to the wastewater system (the "Prior Projecf) of certain predecessor county
sanitation districts of the District, to wit, County Sanitation District Nos. 1, 2, 3, 5, 6, 7 and 11
(collectively, the "Predecessor Districts"), the Predecessor Districts purchased the Prior Project
by agreeing to make installment payments (the "Prior Installment Payments") pursuant to the
Amendatory Agreement for Acquisition and Construction, dated as of AetebeeSeotember 1,
4992-.1993.by and among the Predecessor Districts;
WHEREAS, to provide the funds necessary to refinance the Prior Project, the
Predecessor Districts caused the execution and delivery of the Refunding Certificates of
Participation,1293 Series 'n�^^_-4the "Prior Certificates"), evidencing direct, undivided fractional
interests in the Prior Installment Payments pursuant to a Trust Agreement, dated as of Aeteber-1,
-4993Seotember 1. 1993 /the "1993 Trust Aereement"1. among the_P_redecessor Districts and
Texas Commerce Bank National Association.as trustee thereunder:
WHEREAS, in connection with the consolidation of the Predecessor Districts into the
District.the 1993 Trust Agreement was amended and restated as the Reformed Trust Aereement
dated as of August 1. 2000 (the "Prior Trust Agreement"), by—And—among the Predecessw
13isfeistsOrange Countv Sanitation District Financing Coroorafion. the District and U.S. Bank
National Association successor to The Chase Manhattan Bank, as trustee thereunder(the "Prior
Trustee");
WHEREAS, the District desires to refinance the Prior Project by prepaying all of the
remaining principal components of the Prior Installment Payments (the "Refunded Installment
Payments"), and the interest components thereof to the date of prepayment, thereby causing all
of the currently outstanding Prior Certificates to be prepaid(the"Refunded Certificates");
WHEREAS, to provide the funds necessary to prepay the Refunded Installment
Payments to be so prepaid, the District and the Orange County Sanitation District Financing
Corporation (the "Corporation's desire that the Corporation purchase the Prior Project from the
District and the District sell the Prior Project to the Corporation, and that the District then
purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the
District, for installment payments (the "Installment Payments") to be made by the District
pursuant to an Installment Purchase Agreement, dated as of MaySeotember 1, 2008 (the
"Installment Purchase Agreement"), by and between the District and the Corporation;
9"99a7441a2fiUD,2
0
WHEREAS, to provide the funds necessary to prepay the Refunded Installment
Payments, the District has caused to be executed and delivered the Orange County Sanitation
District Refunding Certificates of Participation, Series 2008AB (the "Certificates"), evidencing
principal in the aggregate amount of$77,1-64;800 .000.000. pursuant to a Trust Agreement,
dated as of M"512Lem==ba 1, 2008 (the "Trust Agreement"), by and among U.S. Bank National
Association,as trustee(the "Trustee"),the Corporation and the District;
WHEREAS, the District has determined to apply a portion of the proceeds of the
Certificates to prepay all of the outstanding Refunded Installment Payments on 3n4yNjV Mb 1,
2008 (the "Prepayment Date") at a prepayment price equal to the principal amount thereof plus
accrued interest thereon,without premium (the"Prepayment Price"); and
WHEREAS, in accordance with the Prior Trust Agreement, the Refunded Installment
Payments will be vyji1a_bl�, tom the prepayment of then outstanding Refunded
Certificates on the Prepayment Date at the Prepayment Price;
NOW THEREFORE, in consideration of the premises and of the mutual agreements
and covenants contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged,the parties hereto do hereby agree as follows:
Section 1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Prior Trust Agreement.
"Tendered Certificates" means, as of any date prior to the Prepayment Date, the
Refunded Certificates, or any principal portion thereof, that have been tendered for purchase
pursuant to Section 5.01, 5.02, 5.03 or 5.04 of the Prior Trust Agreement, other than Refunded
Certificates that have been remarketed.
Section 2. The Escrow Fund. (a) There is hereby established a fund (the "Escrow
Fund") to be held as an irrevocably pledged escrow by the Escrow Agent, which the Escrow
Agent shall keep separate and apart from all other funds of the District and the Escrow Agent
and to be applied solely as provided in this Escrow Agreement. Pending application as provided
in this Escrow Agreement, amounts on deposit in the Escrow Fund are hereby pledged solely to
the payment of the principal and interest evidenced by the Refunded Certificates to and including
the Prepayment Date and the payment of the Prepayment Price on the Prepayment Date, which
amounts shall be held in trust by the Escrow Agent for the Owners of the Refunded Certificates.
(b) The Prior Trustee is hereby instructed to liquidate any investments held in the
subaccounts held in the Reserve Account established under Section 6.03 of the Prior Trust
Agreement(the "Prior Reserve'). As reflected in the report of the nationally recognized firm of
independent certified public accountants delivered in connection herewith, upon the execution
and delivery of the Certificates, there shall be deposited in the Escrow Fund
$64;623;679I7 received from the proceeds of the sale of the Certificates,
$2 23 c nnn <2 �, n<�on9 u,
��I$ received from the District] and from the
Prior Reserve and the subaccounts held in the Installment Payment Account for the Refunded
Certificates for a total of 01 x"',.,.,��,3,906.`�
80398N9.&N61811.2 2
,y
(c) The District has determined or caused to be determined that upon the deposit of
moneys pursuant to Section 2(b) hereof,the moneys on deposit in the Escrow Fund will be held
by the Escrow Agent in the Escrow Fund uninvested in cash and will be sufficient to make the
payments required by Section 4 hereof.
Section 3. Use of Moseys in Escrow Fund. (a) The Escrow Agent hereby
acknowledges deposit of the moneys described in Section 2(b) hereof and agrees to hold such
moneys uninvested in the Escrow Fund.
(b) The Owners of the Refunded Certificates shall have a first and exclusive lien on
the moneys in the Escrow Fund until such moneys are used and applied as provided in this
Escrow Agreement and the Prior Trust Agreement to prepay in full then outstanding Refunded
Certificates on the Prepayment Date.
(c) The Prior Trustee shall notify the Escrow Agent of any Refunded Certificates that
constitute Tendered Certificates, the Purchase Date and the Certificate Purchase Price therefor.
On the relevant Purchase Date, the Escrow Agent shall transfer the amount of the Certificate
Purchase Price for such Tendered Certificates from moneys held in the Escrow Fund to the Prior
Trustee by 2:00 p.m. (local time in New York City) in immediately available funds. The Prior
Trustee shall deposit such moneys in the Purchase Fund,as described in Section 5.09 of the Prior
Trust Agreement, and shall pay the Certificate Purchase Price for the Tendered Certificates in
accordance with Section 5.03(d) of the Prior Trust Agreement. Any Tendered Certificates so
purchased shall be immediately cancelled,and the interest thereon shall cease to accrue from and
after the relevant Purchase Date.
(d) The Escrow Agent shall not be held liable for investment losses resulting from
compliance with the provisions of this Escrow Agreement.
Section 4. Payment of Refunded Certificates. From the uninvested money held in
the Escrow Fund, the Escrow Agent shall apply such amounts on the Prepayment Date in
accordance herewith. To the extent that the amount on deposit in the Escrow Fund on the
Prepayment Date is in excess of the amount necessary to make the required payments with
respect to the Refunded Certificates, such excess shall be transferred to the Trustee for deposit in
the Installment Payment Account established under the Trust Agreement.
Section S. Irrevocable Instructions to Mail Notices. The District hereby designates
the Refunded Certificates for prepayment on the Prepayment Date and hereby irrevocably
instructs the Prior Trustee, to give, in accordance with the provisions of the Prior Trust
Agreement, notice of prepayment of such Refunded Certificates, substantially in the form set
forth in Exhibit A hereto.
Section 6. Performance of Duties, Acknowledgement with Respect to
Irrevocable Instructions. The Escrow Agent hereby agrees to perform the duties set forth
herein and agrees that the irrevocable instructions to the Escrow Agent herein provided are in a
forth satisfactory to it.
Section 7. Escrow Aeent's Authority to Make Investments. The Escrow Agent
shall have no power or duty to invest any funds held under this Escrow Agreement. The Escrow
90+9917aasuz01312 3
0
Agent shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder
except as provided herein.
Section 8. Indemnity. To the extent permitted by law, the District hereby assumes
liability for, and hereby agrees to indemnify, protect, save and keep harmless the Escrow Agent
and its respective successors, assigns, agents, employees and servants, from and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and
disbursements(including reasonable legal fees,expenses and disbursements)of whatsoever kind
and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any
time in any way relating to or arising out of the execution, delivery and performance of this
Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the
moneys deposited therein, and any payment, transfer or other application of moneys by the
Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however,
that the District shall not be required to indemnify the Escrow Agent against the Escrow Agent's
own negligence or willful misconduct or the negligence or willful misconduct of the Escrow
Agent's respective successors, assigns, agents and employees or the material breach by the
Escrow Agent of the terms of this Escrow Agreement. In no event shall the District or the
Escrow Agent be liable to any person by reason of the transactions contemplated hereby other
than to each other as set forth in this Section. The indemnities contained in this Section shall
survive the termination of this Escrow Agreement.
Section 9. Responsibilities of Escrow Agent. The Escrow Agent makes no
representation as to the sufficiency of the uninvested moneys to accomplish the prepayment of
the Refunded Certificates pursuant to the Prior Trust Agreement or to the validity of this Escrow
Agreement as to the District and, except as otherwise provided herein, the Escrow Agent shall
incur no liability in respect thereof The Escrow Agent shall not be liable in connection with the
performance of its duties under this Escrow Agreement except for its own negligence, willful
misconduct or default,and the duties and obligations of the Escrow Agent shall be determined by
the express provisions of this Escrow Agreement. The Escrow Agent may consult with counsel,
who may or may not be counsel to the District, and in reliance upon the written opinion of such
counsel shall have full and complete authorization and protection in respect of any action taken,
suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent
shall deem it necessary or desirable that a matter be proved or established prior to taking,
suffering, or omitting any action under this Escrow Agreement, such matter(except the matters
set forth herein as specifically requiring a certificate of a nationally recognized firm of
independent certified public accountants or an opinion of counsel of recognized standing in the
field of law relating to municipal bonds) may be deemed to be conclusively established by a
written certification of the District.
The Escrow Agent undertakes to perform only such duties as are expressly set forth in
this Agreement and no implied duties,covenants or obligations shall be read into this Agreement
against the Escrow Agent.
The Escrow Agent may resign by giving written notice to the District,and upon receipt of
such notice the District shall promptly appoint a successor Escrow Agent. If the District does
not appoint a successor Escrow Agent within thirty (30) days of receipt of such notice, the
resigning Escrow Agent may petition a court of competent jurisdiction for the appointment of a
aewsracasoe-3Ma_ 4
tl
successor Escrow Agent, which court may thereupon, upon such notice as it shall deem proper,
appoint a successor Escrow Agent. Upon acceptance of appointment by a successor Escrow
Agent, the resigning Escrow Agent shall transfer all amounts held by it in the Escrow Fund to
such successor Escrow Agent and be discharged of any further obligation or responsibility
hereunder.
Section 10. Amendments. The District and the Escrow Agent may(but only with the
consent of the Owners of all of the Refunded Certificates) amend this Escrow Agreement or
enter into agreements supplemental to this Escrow Agreement.
Section 11. Term. This Escrow Agreement shall commence upon its execution and
delivery and shall terminate on the date upon which the Refunded Certificates have been paid in
accordance with this Escrow Agreement.
Section 12. Comoensation. The District shall from time to time pay or cause to be
paid to the Escrow Agent the agreed upon compensation for its services to be rendered
hereunder, and reimburse the Escrow Agent for all of its reasonable advances in the exercise and
performance of its duties hereunder; provided, however, that under no circumstances shall the
Escrow Agent be entitled to any lien whatsoever on any moneys or obligations in the Escrow
Fund for the payment of fees and expenses for services rendered or expenses incurred by the
Escrow Agent under this Escrow Agreement or otherwise.
Section 13. Severability. If any one or more of the covenants or agreements provided
in this Escrow Agreement on the part of the District or the Escrow Agent to be performed should
be determined by a court of competent jurisdiction to be contrary to law, such covenants or
agreements shall be null and void and shall be deemed separate from the remaining covenants
and agreements herein contained and shall in no way affect the validity of the remaining
provisions of this Escrow Agreement.
Section 14. Counterparts. This Escrow Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as an original but all of which
shall constitute and be but one and the same instrument.
Section 15. Covernine Law. This Escrow Agreement shall be construed under the
laws of the State of California.
90-98379480J/ulu 5
a
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of the date first above written.
U.S. BANK NATIONAL ASSOCIATION,
as Escrow Agent and Prior Trustee
Byr
Authorized Officer
ORANGE COUNTY SANITATION DISTRICT
By.
Lorenzo Tyner,Director of Finance
and Administrative Services
&0199374,180263833.2_ 6
I
EXHIBIT A
NOTICE OF PREPAYMENT
Orange County Sanitation District
Refunding Certificates of Participation
4993 W Series
Principal Outstanding: $77j40-.000 .000.000;CUSB'No.: 684285BM0
NOTICE IS HEREBY GIVEN that on 2008, moneys have been
irrevocably set aside in an escrow fund held by U.S. Bank National Association, as escrow agent
and as prior trustee (the "Prior Trustee") under the Reformed Trust Agreement, dated as of
GetebeeAF M" 1, 44942000 (the "Prior Trust Agreement"), among the Orange County
Sanitation District Nee-1, '''' 11 < e a -_a 11 (the __idse.,ssef to the DistFits. (as defined
hereeker)Financing Corooration the Orange County Sanitation District lthe "Distrito") and the
Prior Trustee, which the Districts has determined;shall
be sufficient to pay the principal and interest,without premium(the"Prepayment Price') on the
above-referenced certificates of participation (the "Refunded Certificates') on Aditvember 1,
2008 (the"Prepayment Date'). On the Prepayment Date there will become due and payable with
respect to each of the Refunded Certificates the Prepayment Price thereof, and from and after
such Prepayment Date, the Related Interest Component due with respect thereto shall cease to
accrue and the Refunded Certificates shall be surrendered at the address of the Prior Trustee set
forth below.
On May nn nnno the Standby Geilifieate n -..hase Agfeement. dated a of A_:l n
2001 L. and a g the DistFie! Stme ctaet Bank and T.. st r...t...an Of Gall femi fi N A and
Seot niber . 2008.the Letter of Credit.dated August 31, 2000_ issued
by Societe Generale. New York Branch supporting the Refunded Certificates will terminate in
accordance with its terms and will not be available to pay the Certificate Purchase Price with
respect to any tendered Refunded Certificates. The Certificate Purchase Price with respect to
tenders in connection with the Refunded Certificates will be paid by the Prior Trustee in
accordance with the Prior Trust Agreement from amounts held by the U.S. Bank National
Association,as escrow agent for the Refunded Certificates.
Dated:Mey29, .2008
By: U.S. Bank National Association,as Trustee
on behalf of the Orange County Sanitation District
[add appropriate address]
Notice
A-1
r
' The District and Trustee shall not be responsible for the use of the CUSIP numbers selected, nor is any
representation made as to their correctness indicated in the notice or as printed on any certificate. They are included
solely for the convenience ofthe Securityholders.
8498P948026111 B-1
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