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HomeMy WebLinkAbout2008-08-27 ORANGE COUNTY SANITATION DISTRICT August 20, 2008 ptene: (71 41 982-2411 NOTICE OF MEETING nialll.y add.: PO B 8127 r ntah Volley.CA 92728-9127 BOARD OF DIRECTORS ""..bdre..: ORANGE COUNTY SANITATION DISTRICT 10844 Ellis Avenue Fountain Valley.LA 9270e-7018 WEDNESDAY, AUGUST 27, 2008 — 6:30 P.M. Monitor "genies DISTRICT'S ADMINISTRATIVE OFFICES 0 10844 Ellis Avenue Citing Fountain Valley, California 92708 Ah.. Brea Buena Perk Cypress Fountain Valley Fullerwn The Regular Meeting of the Board of Directors of the Orange County Sanitation cerden each HununBton Beech District will be held at the above location, time and date. Irvine Le Hatra e Pelme Los Alamitos Newport Beach j ,�(/✓�' ;� //J`i C 0.1. Plecenae Clerl of the Boa d Bane Ana Seal Beach Stanton Tusun ✓rile Perk y ba Linda 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. Midway Gty Water District. Steering Committee - Wednesday,September 17,2008 at 5:30 p.m. 1rvha Pesch -To Protect Ne P.W,c Neagh end Me Envrro ,Nrough Excellence,n YVes[ewe[er Systems' b Q 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 H:Weptlgmo1150t1511BS%gends@008 Meeting NoticesWN08.2.doc ROLL CALL BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT MEETING DATE &TIME: August 27. 2008 D .�50 (SHANKS) ........................ANTOS ......................... ✓ ✓ — (QUIRK) ...........................BANKHEAD................... ✓ (AYER)..............................CRANDALL................... �L /a?rA (JONES)............................DALTON....................... ✓ (PALMER).........................DAVERT...................... — (CAVECCHE)....................DUMITRU ................... �L (GOMEZ) ..........................ESPINOZA................... (OOTEN)...........................FERRYMAN................... ✓ — (HARDY) .........................HANSEN ...................... (NARAIN)..........................LUEBBEN..................... # — (DOW)...............................MARSHALL.................. �L ✓ �L (REINHART) .....................MILLER ......................... �_ (GARCIA)..........................MOORE........................ �L �L — (KRIPPNER) .....................NEUGEBAUER.............. ✓ �L _ — (NGUYEN) ........................NORBY....................... v _ (DRISCOLL)......................PARKER....................... �Ac_��r (ULMER)...........................REESE .............. ..... (CADENA) .......................SHAWVER.................. _L /al%M, 409 �L (CHOI)...............................SHEA.......................... �/ / -L (KRING) ............................SIDHU.......................... ✓ a4-f �L — (BENAVIDES)...................TINAJERO.................... Cv GL (AGUIRRE) .......................UNDERHILL ................. ✓ y _L (CHAROEN)......................WALDMAN.................... Ll ✓ -JL — (DAIGLE) ..........................WEBB ..........................J� — (ANDERSON) ...................WINDER ....................../ T /.Zare3 STAFF: Arhontes Colson ✓ ( � Ghirelli Herberg12 Kovac B;i Kyle Ruth TorresLn<< Tyner OTHERS: Ho in OS/27/08 �•/ __c/ %/� 08/2t\atlmin\BS\OIRECTOR\Oirec[ors Roll Call.tloc SIGN-IN SHEET ORANGE COUNTY SANITATION DISTRICT l a--7 BOARD MEETING NAME ORGANIZATION/FIRM leaseprint) leaseprint) er sD e 3TD 1 o W H:\WP.DTAWDMINIBSIFORMSISIGN-IN FORM.DOC STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, 1 hereby certify that the Notice and Agenda for the Regular Board Meeting of 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 9d�a 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. 's 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. JDR:gg M:\dept\Mno\110\1WAdmin\R(M11RMES\Stotus Reports to Boord\2 GM status Reports\Nl=Proposed Work Mn 2OW2009 to sc. o 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 Q O y 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 H:Ntgloba Agenda Draft ReportsSoard of DirectorsU36 GWRS AMF AR 8.27.08.dm Forrn No.DW-102 Agenda Report—Board Revised. tvostoe 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 H W g1otaMgerda Draft Rewnsa3 of Dirmtorsl W AR CONTRACT AWARD 8.27.08,dm 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. Page 3 s 0 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 0 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 0 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 Legend: LOAM Meved4'rem Moved to Style change Format change M la-r.c�. d delpnvni_lp.:lpti . Inserted cell Deleted cell Moved cell Split/Merged Split/Merged cell Padding cell Statistics: Count Insertions 52 Deletions 62 Moved from 3 Moved to 3 Style thane 0 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 ae+saaazae A-1 Document comparison done by DeltaView on Wednesday, August 20, 2008 12:29:15 PM Input: Document 1 i 12 a eDeskSite://US DMS/US2 008/8 01 9832 7/4 Document Mana eDeskSite://US DMS/US2008/80263841/1 Renderin set IStandard Legend: In rtion Deletiee v Style change Format change Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions 31 Deletions 37 Moved from 0 Moved to 0 Style change 0 Fon me' chan ad 0 Total changes 68 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 P 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 0 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 0 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 t 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 d 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 a APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS 80263844.5 C-1 0 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 0 "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 0 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 t (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 r 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 r 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 t 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 r 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 r 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 m 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 9 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 v 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 V 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 B (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 v 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 I Document comparison done by DeltaView on Wednesday, August 20, 2008 12:24:12 PM Input: Document 1 i 12 a eDeskSite://US DMS/US2008/80198279/4 Document 2 iMana eDeskSite://US DMS/US2008/80263833/2 Renderin set IStandard Legend:, seleEieN Moved--fieni Moved to Style than e Format chan e Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: i Count Insertions 44 Deletions 36 Moved from 1 Moved to 1 Style change 0 Format C han ad 0 Total chan as 82