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Home My WebLink About02-11-2015 Administration Committee Agenda Orange County Sanitation District Wednesday, February 11, 2015 Regular Meeting of the ' 5:30 P.M. Administration Committee Administration Building Board Room 10844 Ellis Avenue Fountain Valley, CA 714 593-7433 AGENDA PLEDGE OF ALLEGIANCE: DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form and give it to the Clerk of the Board. Speakers are requested to limit comments to three minutes. REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Committee Members. These reports are for information only and require no action by the Committee. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: CONSENT CALENDAR: 1. Approve Minutes of the December 10, 2014, Administration Committee Meeting. 2. Recommend to the Board of Directors to: Receive and file Orange County Sanitation District Second Quarter Financial Report for the period ended December 31, 2014. NON-CONSENT CALENDAR: 3. Recommend to the Board of Directors to: Approve the FY 2015-16 budget assumptions and direct staff to incorporate these parameters in preparing the FY 2015-16 budget update. INFORMATION ITEMS: 02;11115 AEminisnation Committee Agenda Page 1 of 2 4. Capital Improvement Projects Overview CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: The next Administration Committee meeting is scheduled for Wednesday, March 11, 2015 at 5:30 p.m. Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at (714) 593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Aoenda Posting: In amordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all,or a majority of the Board of Directors,are available for public inspection in the office of the Clerk of the Board. NOTICE TO DIRECTORS: To place items on the agenda for the Committee Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A. Lore Acting Clerk of the Board (714)593-7433 kloreeocsd.com For any questions on the agenda,Committee members may contact staff at: General Manager James Herberg (714)593-7300 iherbem2Zocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli6ocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 Itwer(cDocsd.com Administrative Services 02/11/15 Administration Committee Agenda Page 2 of 2 ITEM NO. 1 CORRECTED MINUTES OF THE REGULAR MEETING OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, December 10, 2014, at 5:30 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was held on December 10, 2014, at 5:31 p.m., in the Sanitation District's Administration Building. Committee Vice-Chair Keith Curry led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: John Withers, Chair Jim Herberg, General Manager Keith Curry, Vice-Chair Bob Ghirelli, Assistant General Manager David Benavides Lorenzo Tyner, Director of Finance Steven Choi & Administrative Services Tyler Diep Jeff Reed, Director of Human Resources James Ferryman Rob Thompson, Director of Engineering Peter Kim Maria Ayala, Clerk of the Board Gene Hernandez Mike White Teresa Smith Jennifer Cabral Tom Beamish, Board Chair Rich Castillon John Nielsen, Board Vice-Chair Norbert Gaia Al Garcia COMMITTEE MEMBERS ABSENT: Rob Michaels Shawn Nelson (Alternate) Rich Spencer OTHERS PRESENT: Brad Hogin, General Counsel Mitch Cochran, MISAC Joe Carchio (former OCSD Director) Brad Reese (former OCSD Director) PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Committee Chair Withers did not provide a report. 12/10/2014 Administration Committee Minutes Page 1 of 6 REPORT OF GENERAL MANAGER: General Manager, Jim Herberg, announced that the District would be hosting a Board Member Orientation for current, new, active and alternate directors on January 14 and 28. Each date will provide a different focus for the orientation. More information will be forthcoming. Mr. Herberg also announced that at this month's Board meeting, the District will be presenting outgoing Directors with commendations, as well as a resolution for the City of Yorba Linda. Director Choi thanked Mr. Herberg for attending his swearing-in ceremony. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: Director of Finance and Administrative Services, Lorenzo Tyner, introduced Mitch Cochran (representing the Southern Chapter of the Municipal Information Systems Association of California (MISAC)) who presented the District with the MISAC Excellence Award. Rich Castillon, Information Technology Systems and Operations Manager, accepted the award on behalf of the District. CONSENT CALENDAR: 1. MOVED, SECONDED, AND DULY CARRIED to: Approve Minutes of the November 12, 2014 Administration Committee Meeting. AYES: Beamish, Choi, Curry, Diep, Ferryman, Kim, Nielsen, Smith, and Withers NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Narain, and Nguyen 2. MOVED, SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: A. Authorize an additional one-year renewal period to Service agreements with Project Partners, Inc. and Psomas for Enterprise Information Management On-Call Staffing, Specification No. S-2011-50513D, for a total amount not to exceed $211,000 for the renewal period; and B. Approve a contingency of$21,100 (10%). AYES: Beamish, Choi, Curry, Diep, Ferryman, Kim, Nielsen, Smith, and Withers 12/10/2014 Administration Committee Minutes Page 2 of 6 NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Narain, and Nguyen 3. MOVED, SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: Authorize purchases of telecommunications services using the County of Orange cooperative agreement #N1000008297/MA-017-1001150 with TWTelecom/ Leve13, for one year commencing November 14, 2014 through November 13, 2015, for a total amount not to exceed $240,000 in accordance with Ordinance OCSD-44, Section 2.03(B) Cooperative Purchases. AYES: Beamish, Choi, Curry, Diep, Ferryman, Kim, Nielsen, Smith, and Withers NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Narain, and Nguyen 4. MOVED, SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: Authorize purchases of information technology computer, peripheral equipment and services using the U.S. General Services Agreement (GSA) IT Schedule 70 commencing December 22, 2014 through December 31, 2019, for a total amount not to exceed $500,000, in accordance with Ordinance OCSD-44, Section 2.03(B) Cooperative Purchases. AYES: Beamish, Choi, Curry, Diep, Ferryman, Kim, Nielsen, Smith, and Withers NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Narain, and Nguyen 12/10/2014 Administration Committee Minutes Page 3 of 6 5. MOVED, SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: Authorize purchases of information technology consulting services using the City of Richland, Washington cooperative agreement#13-068 with ShareSquared Inc. Commencing January 5, 2015 through June 30, 2016, for a total amount not to exceed $300,000, in accordance with Ordinance OCSD-44, Section 2.03(B) Cooperative Purchases. AYES: Beamish, Choi, Curry, Diep, Ferryman, Kim, Nielsen, Smith, and Withers NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Narain, and Nguyen 6. MOVED, SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: A. Adopt Resolution No. OCSD14-XX entitled, "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 Wastewater Refunding Revenue Obligations, Series 2015A, authorizing the execution and delivery of such Revenue Obligations evidencing principal in an aggregate amount of not to exceed $150,000,000, 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 Revenue Obligations and authorizing the execution of necessary documents and related actions;" and, B. That the Orange County Sanitation District Financing Corporation approve the documents supporting and authorizing the Revenue Obligations in an aggregate amount not to exceed $150,000,000. AYES: Beamish, Choi, *Curry (Item 6B only), Diep, Ferryman, Kim, Nielsen, Smith, and Withers NOES: None ABSTENTIONS: None 12/10/2014 Administration Committee Minutes Page 4 of 6 ABSENT: Benavides, Hernandez, Narain, and Nguyen 'Director Curry recused himself from Item 6A. 7. MOVED, SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: Adopt Resolution No. OCSD 14-XX, entitled "A Resolution of the Board of Directors of the Orange County Sanitation District, 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 calendar year 2015; and Repealing Resolution No. OCSD 14-10". AYES: Beamish, Choi, Curry, Diep, Ferryman, Kim, Nielsen, Smith, and Withers NOES: None ABSTENTIONS: None ABSENT: Benavides, Hernandez, Narain, and Nguyen NON-CONSENT: None. INFORMATION ITEMS: 8. Geographic Information Systems at OCSD Rob Michaels, Information Technology Supervisor, provided a PowerPoint presentation which included an overview of the District's use of the GIS system to improve access and streamline existing business processes. Staff responded to questions from the Committee. Director Benavides arrived at the meeting at 5:39 p.m. Director Hernandez arrived at the meeting 5:53 p.m. 12/10/2014 Administration Committee Minutes Page 5 of 6 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Former OCSD Director Joe Carchio (Huntington Beach) thanked staff and the Directors here at OCSD for the hard work. It has been a pleasure serving on this Board. ADJOURNMENT: Committee Chair Withers declared the meeting adjourned at 6:09 p.m., to the next regularly scheduled meeting of February 11, 2015 at 5:30 p.m. Submitted by: Maria E. Ayala, Clerk of the Board 12/10/2014 Administration Committee Minutes Page 6 of 6 ADMINISTRATION COMMITTEE Naeting/tsoate T1.11111. oz/ttz/zs/ts AGENDA REPORT Item Number Item Number z Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: CONSOLIDATED FINANCIAL REPORT FOR THE SECOND QUARTER ENDED DECEMBER 31, 2014 GENERAL MANAGER'S RECOMMENDATION Receive and file Orange County Sanitation District Second Quarter Financial Report for the period ended December 31, 2014. SUMMARY Included in this consolidated report are the following quarterly financial reports for the period ended December 31, 2014: First Quarter Budget Review The Budget Review Summary provides the Directors, staff, and the general public with a comprehensive overview of the financial results of the Sanitation District through the second quarter ended December 31, 2014. • Quarterly Treasurer's Report This section reports on financial portfolio performance with respect to the Sanitation District's funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the U.S. and global economic outlook from the Sanitation District's investment manager, Chandler Asset Management. • Certificates of Participation Quarterly Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. PRIOR COMMITTEE/BOARD ACTIONS N/A Page 1 of 2 ADDITIONAL INFORMATION N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: • Consolidated Financial Reports for the Second Quarter Ended December 31, 2014 NOTE: The Executive Summary from the Comprehensive Quarterly Financial Report for the second quarter ended December 31, 2014 is included in hard copy; the entire report is available on-line at the OCSD website(www.ocsd.coml with the complete agenda package. Page 2 of 2 Executive Summary Consolidated Financial Reports For the Second Quarter Ended December 31, 2014 Included in this consolidated report are the following quarterly financial reports for the period ended December 31, 2014: • Second Quarter Budget Review: The Budget Review Summary provides the Directors, staff, and the general public with a comprehensive overview of the financial results of the Sanitation District through the second quarter ended December 31, 2014. Contained within this Budget Review is the budget-to-actual status of the Collections, Treatment & Disposal Operations, the Capital Improvement Program, the Self-Insurance Program, and Debt Service Outlays. Also included is a Capital Assets Schedule as of December 31, 2014. Various detail information can be found in this report. In summary: a) Most major expense categories are anticipated to be at or below budget. b) Total revenues are at 104.5 percent mainly due to the receipts of $232.2 million from the issuance of Wastewater Refunding Revenue Obligations, Series 2014A, and Revenue Refunding Certificate Anticipation Notes, Series 2014B, during the first and second quarter of the fiscal year. The 2014A Obligations were used to refund a portion of Certificate of Participation Series 2007B and the 2014E Notes were used to refund the Revenue Refunding Certificate Anticipation Notes, Series 2013A. Excluding debt financing proceeds, total revenues are at 49.6 percent of the budget. Except for Permit Fees, Capital Assessments, and Interest Earnings, all other major revenue sources are currently tracking close to or exceeding revenue estimates. Overall, total revenues are projected to exceed budget at year-end. More detailed information on District revenues is provided within Section 1 — Pages 3 through 5. c) Collection, Treatment and Disposal Costs: As indicated within the Budget Review Summary of this report, the net operating requirements through the second quarter of $73.0 million is currently tracking at 47.9 percent of the $152.5 million budget. In addition, net operating expenses have increased $1.5 million or 2.0 percent in comparison with the same period last year. Overall, staff expects the total operating costs to remain at or below budget throughout the remainder of the year. More detailed information on District operating expenses is provided within Section 1- Pages 1 through 3. Page 1 2014-15 Second Quarter Review The total cost per million gallons is approximately $2,076 based on flows of 191.1 million gallons per day. This is $13 per million gallons, or 0.6 percent lower than the budgeted cost per million gallon per day. A further description of these costs and benchmarking with other agencies is contained within Section 1 — Pages 6 through 8. d) The total projected capital outlay cash flow of the Capital Improvement Program (CIP) for FY 2014-15 has been revised to $152.0 million, or 89.8 percent of the board approved cash outlay of$169.2 million. The actual cash outlay spending through the second quarter is $52.7 million, or 31.2 percent of the total budgeted outlay. More detailed information on the CIP budget review can be found in Section 3. • Quarterly Treasurer's Report; This section reports on financial portfolio performance with respect to the Sanitation District's funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the national economic outlook from the Sanitation District's money manager, Chandler Asset Management (Chandler). Chandler reported that the Long-Term Portfolio returned 0.55 percent over the quarter, outperforming the Merrill Lynch 1-5 year AAA U.S. Corporate and Government Index by 7 basis points, while the Liquid Operating Monies Portfolio returned 0.01 percent over the quarter, outperforming its benchmark, the three- month Treasury Bill index, by one basis points. Chandler further notes that the manufacturing sector continues to show strength and consumer confidence was high heading into 2015. They believe low gas prices should provide an ongoing tailwind for consumer spending. Meanwhile, housing data remains volatile in spite of ongoing low mortgage rates. Overall, they believe the economy continues to grow at a modest pace and the labor market continues to expand. However, weakness in wages and the labor participation rate in December leaves the door open for the Fed to be patient with policy rate changes. The Federal Open Market Committee (FOMC) left policy rates unchanged at its final meeting of 2014. The FOMC indicated that it will take a "patient" approach toward normalizing monetary policy, and implied that the first rate hike is likely to be in (or around) mid-2015 based on the Fed's economic forecasts. Overall, the FOMC's guidance on policy action was consistent with its previous guidance, but the Committee is moving away from its "considerable time" language and emphasizing that policy changes will be data-dependent. During her post-meeting press conference, Fed Chair Yellen indicated that policy rates would likely remain unchanged for at least the next couple of FOMC meetings. This suggests that a rate hike is unlikely to happen any sooner than April, unless there is an Page 2 Executive Summary unexpected change in economic data. The Committee also expects the fed funds rate to approach a more normalized level by the end of 2017, which suggests that any rate increases are likely to be gradual over the next few years. We expect FOMC members will continue to debate the appropriate timing of the first fed funds rate hike when they meet again on January 27-28, 2015. During the past three months, the yield curve flattened. Concerns about weak global economic growth kept downward pressure on longer US Treasury yields, even as the Fed signaled the possibility of a fed funds rate hike this year. Economic Outlook Chandler expects GDP growth between 2.5-3.0% in 2015, a slight uptick from growth in 2014. The drop in commodity prices, particularly oil, will in the long-run prove to be a stimulus to the US economy. Long-run inflation expectations have come down and the Federal Reserve will be challenged to start the rate normalization process in the first half of 2015. Recently markets have been volatile and one of the contributing factors is global central banks surprising markets; Chandler expects the surprise element emanating from central banks to remain high throughout the year. Outside of the US several large central banks are engaging in unconventional policies to depreciate currency valuations in an attempt to stimulate export growth. On the other hand, the Federal Reserve ceased Quantitative Easing in October 2014 and is trying to determine the appropriate timing to begin the process of normalizing monetary policy. The potential tightening of policy by the Federal Reserve is adding to the strength of the dollar and will continue to support current valuations of longer-term Treasury yields in the short-term. • Quarterly Certificates of Participation (COP) Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. Page 3 1. r 1 Y M h � T • Iw 1 ♦_.M ♦ al � I i r• xyr • r + Y , r w r i H 1 X . a oUNZV SANI7gTON 53 oN Orange CountyDistrict A Second Quarter 90 a�aFinancialReport rFOr�'19 THE ENJ\Qo? for - period ended December 1 orange14 Table of Contents ExecutiveSummary...................................................................................................1 Budget Review Section 1 — Budget Review Summary...................................................................................1 Section 2—Operating Budget Review Chart of the Cost per Million Gallons by Department—Budget and Actual..............1 Chart of the Net Expenses by Major Category— Budget and Actual........................1 Divisional Contributions to Cost Per Million Gallons ................................................2 Comparison of Expenses by Department.................................................................3 Summary of Collection, Treatment, and Disposal Expenses by Major Category.....4 Summary of District-Wide Revenues .......................................................................5 Summary of Collection, Treatment and Disposal Revenues....................................5 Summary of Collection, Treatment, and Disposal Expenses by Line Item...............6 Summary of Collection, Treatment, and Disposal Expenses by Process.................8 Chartof Staffing Trends...........................................................................................9 Section 3—Capital Improvement Program Budget Review Capital Improvement Program Graphs by Type and Funding Source......................1 Summary of Capital Improvement Construction Requirements - Current Year........2 Summary of Capital Improvement Construction Requirements - Project Life..........6 Section 4—Capital Assets Schedule & Debt Service Budget Review CapitalAssets Schedule ..........................................................................................1 Debt Service Budget Review....................................................................................1 Section 5—Self Insurance Budget Review General Liability and Property Fund Budget Review................................................1 Workers' Compensation Fund Budget Review.........................................................2 Quarterly Treasurers Repo rt........................................................................................1 QuarterlyCOP Repo rt.................................................................................................1 FY 2014-15 Second Quarter Financial Report This Page Intentionally Left Blank Executive Summary Consolidated Financial Reports For the Second Quarter Ended December 31, 2014 Included in this consolidated report are the following quarterly financial reports for the period ended December 31, 2014: • Second Quarter Budget Review: The Budget Review Summary provides the Directors, staff, and the general public with a comprehensive overview of the financial results of the Sanitation District through the second quarter ended December 31, 2014. Contained within this Budget Review is the budget-to-actual status of the Collections, Treatment & Disposal Operations, the Capital Improvement Program, the Self-Insurance Program, and Debt Service Outlays. Also included is a Capital Assets Schedule as of December 31, 2014. Various detail information can be found in this report. In summary: a) Most major expense categories are anticipated to be at or below budget. b) Total revenues are at 104.5 percent mainly due to the receipts of $232.2 million from the issuance of Wastewater Refunding Revenue Obligations, Series 2014A, and Revenue Refunding Certificate Anticipation Notes, Series 2014B, during the first and second quarter of the fiscal year. The 2014A Obligations were used to refund a portion of Certificate of Participation Series 2007B and the 2014B Notes were used to refund the Revenue Refunding Certificate Anticipation Notes, Series 2013A. Excluding debt financing proceeds, total revenues are at 49.6 percent of the budget. Except for Permit Fees, Capital Assessments, and Interest Earnings, all other major revenue sources are currently tracking close to or exceeding revenue estimates. Overall, total revenues are projected to exceed budget at year-end. More detailed information on District revenues is provided within Section 1 — Pages 3 through 5. c) Collection, Treatment and Disposal Costs: As indicated within the Budget Review Summary of this report, the net operating requirements through the second quarter of $73.0 million is currently tracking at 47.9 percent of the $152.5 million budget. In addition, net operating expenses have increased $1.5 million or 2.0 percent in comparison with the same period last year. Overall, staff expects the total operating costs to remain at or below budget throughout the remainder of the year. More detailed information on District operating expenses is provided within Section 1- Pages 1 through 3. Page 1 2014-15 Second Quarter Review The total cost per million gallons is approximately $2,076 based on flows of 191.1 million gallons per day. This is $13 per million gallons, or 0.6 percent lower than the budgeted cost per million gallon per day. A further description of these costs and benchmarking with other agencies is contained within Section 1 — Pages 6 through 8. d) The total projected capital outlay cash flow of the Capital Improvement Program (CIP) for FY 2014-15 has been revised to $152.0 million, or 89.8 percent of the board approved cash outlay of$169.2 million. The actual cash outlay spending through the second quarter is $52.7 million, or 31.2 percent of the total budgeted outlay. More detailed information on the CIP budget review can be found in Section 3. • Quarterly Treasurer's Report; This section reports on financial portfolio performance with respect to the Sanitation District's funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the national economic outlook from the Sanitation District's money manager, Chandler Asset Management (Chandler). Chandler reported that the Long-Term Portfolio returned 0.55 percent over the quarter, outperforming the Merrill Lynch 1-5 year AAA U.S. Corporate and Government Index by 7 basis points, while the Liquid Operating Monies Portfolio returned 0.01 percent over the quarter, outperforming its benchmark, the three- month Treasury Bill index, by one basis points. Chandler further notes that the manufacturing sector continues to show strength and consumer confidence was high heading into 2015. They believe low gas prices should provide an ongoing tailwind for consumer spending. Meanwhile, housing data remains volatile in spite of ongoing low mortgage rates. Overall, they believe the economy continues to grow at a modest pace and the labor market continues to expand. However, weakness in wages and the labor participation rate in December leaves the door open for the Fed to be patient with policy rate changes. The Federal Open Market Committee (FOMC) left policy rates unchanged at its final meeting of 2014. The FOMC indicated that it will take a "patient" approach toward normalizing monetary policy, and implied that the first rate hike is likely to be in (or around) mid-2015 based on the Fed's economic forecasts. Overall, the FOMC's guidance on policy action was consistent with its previous guidance, but the Committee is moving away from its "considerable time" language and emphasizing that policy changes will be data-dependent. During her post-meeting press conference, Fed Chair Yellen indicated that policy rates would likely remain unchanged for at least the next couple of FOMC meetings. This suggests that a rate hike is unlikely to happen any sooner than April, unless there is an Page 2 Executive Summary unexpected change in economic data. The Committee also expects the fed funds rate to approach a more normalized level by the end of 2017, which suggests that any rate increases are likely to be gradual over the next few years. We expect FOMC members will continue to debate the appropriate timing of the first fed funds rate hike when they meet again on January 27-28, 2015. During the past three months, the yield curve flattened. Concerns about weak global economic growth kept downward pressure on longer US Treasury yields, even as the Fed signaled the possibility of a fed funds rate hike this year. Economic Outlook Chandler expects GDP growth between 2.5-3.0% in 2015, a slight uptick from growth in 2014. The drop in commodity prices, particularly oil, will in the long-run prove to be a stimulus to the US economy. Long-run inflation expectations have come down and the Federal Reserve will be challenged to start the rate normalization process in the first half of 2015. Recently markets have been volatile and one of the contributing factors is global central banks surprising markets; Chandler expects the surprise element emanating from central banks to remain high throughout the year. Outside of the US several large central banks are engaging in unconventional policies to depreciate currency valuations in an attempt to stimulate export growth. On the other hand, the Federal Reserve ceased Quantitative Easing in October 2014 and is trying to determine the appropriate timing to begin the process of normalizing monetary policy. The potential tightening of policy by the Federal Reserve is adding to the strength of the dollar and will continue to support current valuations of longer-term Treasury yields in the short-term. • Quarterly Certificates of Participation (COP) Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. Page 3 2014-15 Second Quarter Review This Page Intentionally Left Blank Page 4 Budget Review Summary Second Quarter Financial Report December 31, 2014 Financial Management is pleased to present the FY 2014-15 second quarter financial report. This report provides a comprehensive overview of the financial condition of the Sanitation District and reports on the status of all capital projects in progress. A summary of the sections contained within this report is provided below. Operating Budget Review., This section reports on collection, treatment and disposal net operating requirements. At December 31, 2014, 47.9 percent, or $73.0 million of the FY 2014-15 revised net operating budget of$152.5 million has been expended. Net operating expenses increased from the same period last year by $1.5 million, or 2.0 percent, mainly due to an increase of $797,000 in Salaries and Benefits, $120,000 in Administrative Expenses, $180,000 in Operating Materials and Supplies, $1.7 million in Repairs and Maintenance, and $233,000 in Utilities. These cost increases have been partially offset by decreases of$21,000 in Contractual Services, $44,000 in Professional Services, $158,000 in Other Operating Supplies, and an increase of $1.3 million in indirect costs allocated out to capital projects. These and other variances that factor into this net increase in expenses are discussed in more detail below. Overall, staff expects the total operating costs to remain below budget throughout the remainder of the year. Significant operating results as of December 31, 2014 include the following: • Salaries. Wages and Benefits — Personnel costs of $48.9 million are at target at 49.4 percent of budget through the second quarter of FY 2014-15. Although the budget is based on a 3 percent vacancy factor, staffing is 39 full-time equivalents (FTE's), or 6.2 percent below the total 626 FTE's approved in the FY 2014-15 budget. Salary and benefit costs are 1.7 percent, or $797,000 higher than the $48.2 million incurred in the same period last year, mainly due to the increase of retirement, medical insurance, and workers' compensation costs. Net operating personnel costs are expected to approximate budget throughout the remainder of the year. • Administrative Expenses — Administrative Expenses totaled $833,000, or 59.6 percent of the $1.4 million budget through December 31. These costs are $120,000 or 16.8 percent higher at December 31 in comparison with the prior year mainly due to an increase in purchases of small computer items. It is anticipated that the administrative costs will approximate budget at year-end. • Printing and Publication Expenses — Printing and Publication Expenses totaled $142,000, or 32.9 percent of the $430,000 budget through December 31. These costs are $27,000 or 23.6 percent higher at December 31 in comparison with the Section 1 - Page 1 FY 2014-15 Second Quarter Report prior year mainly due to the purchase of aluminum prints of the new core values and timing of payments for managed copy center services. It is anticipated that the printing and publication costs will be below budget at year-end • Training and Meetings — Training and meetings of $274,000 are below target at 26.3 percent of the $1.0 million budget. This account is lower than the proportionate budget due to the timing of training throughout the year. These costs have decreased over the same period last year by $23,000 or 7.8 percent. Total training and meeting costs are anticipated to be below budget at year-end. • Operating Materials and Supplies — Operating materials and supplies of $8.1 million is at target at 51.0 percent of budget through December 31. Operating Materials and Supplies have increased from the prior year by $180,000 or 2.3 percent, primarily due to increases in Chemical Coagulants of $89,000 and Odor Control of $313,000, offset by decreases in Safety Equipment/Tools of $196,000. The increases are mainly brought about by timing of chemical deliveries and rate increases. Based on current processes, operating materials and supplies are anticipated to approximate budget at year-end. • Contractual Services — Overall costs for contractual services are below target at approximately $10.7 million or 44.1 percent of budget through December 31. Solids Removal costs, budgeted at $18.3 million, comprise the majority of this expense category. With a decrease of $45,000, or 0.5 percent lower than the prior year, solids removal costs totaled $8.7 million, or 47.5 percent of budget at December 31. Overall, Contractual Services is lower by $21,000 or 0.2 percent, over the same period last year. Total contractual services costs are anticipated to approximate budget at year-end. • Professional Services — Professional services costs totaled $1.1 million or 32.7 percent of the $3.3 million budget through December 31. Many professional service costs, such as Engineering, Environmental Consulting, Software Program Consulting Services, Labor Negotiation, and Other Services, are proportionately low through December 31 due to a variety of factors such as services being in the planning or request for proposal stage, services not being needed until later in the fiscal year, or the need for the service is being re-evaluated. These costs are $44,000 or 3.9 percent lower at December 31 in comparison with the prior year mainly due to timing of services performed. It is anticipated that the costs for this category will be at or below budget at year-end. • Research & Monitoring — Research and monitoring costs totaled $355,000, or 42.8 percent of the $830,000 budget through December 31. These costs are $64,000, or 15.3 percent lower at December 31 in comparison with the prior year, mainly due to a decrease of $87,000 in environmental monitoring. Total Research & Monitoring costs are anticipated to approximate budget at year-end. Section 1 - Page 2 Budget Review Summary • Repairs and Maintenance — Repair and maintenance costs totaled $5.9 million, or 45.1 percent of the $13.1 million budget through December 31. These costs are $1.7 million, or 40.5 percent higher at December 31 in comparison with the prior year, mainly due to current period additional unanticipated service repairs, such as Plant 1 Headworks repairs and carbon media installation in Plant 2 trickling filters. Additionally, several prepayments totaling $432,000 made in the prior year for computer maintenance agreements were recognized as expenses in the current year. It is anticipated that the costs for this category will approximate budget at year-end. • Utilities — Utilities costs totaled $3.8 million, or 51.6 percent of the $7.4 million budget through December 31. These costs are $233,000 or 6.5 percent higher at December 31 in comparison with the prior year, primarily due to an increase in electricity and gas charges totaling $436,000 as a result of increased rates, and usage primarily related to weather variations, offset by a decrease of $220,000 in Green Acres Project (GAP) water usage due to completion of Project J-109, Cengen Cooling Water System Replacement. The overall operating philosophy of the Central Generation facilities is to purchase electricity for power production rather than to purchase natural gas as a supplement to the digester gas needed to run the Central Generation facilities. This operating philosophy allows the Central Generation facilities to meet air emission requirements. It is anticipated that the costs will approximate budget at year-end. • Other Operating Supplies — Other operating supplies costs totaled $1.1 million, or 69.7 percent of the $1.5 million budget through December 31. These costs are $158,000 or 12.8 percent lower at December 31 in comparison with the prior year, primarily due to a decrease of $204,000 in general liability in-lieu premium charges based on the estimated amount required to maintain recommended reserve balances. This cost decrease has been partially offset by an increase of $64,000 in equipment rental for an emergency rental of a vector truck while a District's vector truck was under troubleshooting and repair. It is anticipated that the costs will be above or approximate budget at year-end. • Revenues — Service Fees & Property Taxes — Through December 31, revenues from service fees are at $148.4 million, or 51.4 percent of budget and Property taxes are $36.8 million, or 47.4 percent of budget. These items comprise the majority of the Sanitation District's revenues and are mostly collected by the County through the property tax roll and distributed to the Sanitation District throughout the year based on a set distribution schedule that begins in November of each year. These revenues are expected to approximate budget at year-end. • Revenues — Permittee User Fees — Permittee User Fees are at $5.4 million, or 39.5 percent of the $13.7 million budget. The number of permittees Fluctuates from year to year as businesses are established or close their operations. The revenues through the second quarter are $313,000 or 5.5 percent lower in comparison with the same period last year due to a decrease in amount of discharge Section 1 - Page 3 FY 2014-15 Second Quarter Report from the permittees. It is estimated that the permittee user charges will be at or below budget at year-end. • Revenues — Inter District Sewer Use - SAWPA — Inter District Sewer revenues- SAWPA are at $1.2 million, or 46.7 percent of the $2.5 million budget. This revenue is derived from charges to the Santa Ana Watershed Protection Agency (SAWPA) for treatment of flows. These revenues are expected to be at or below budget at year-end. • Revenues — Intra District Sewer Use — IRWD — Intra District Sewer revenues- IRWD are at $1.3 million, or 58.2 percent of the $2.3 million budget. This revenue is derived from charges to the Irvine Ranch Water District (IRWD) for treatment of flows. The revenues through the second quarter are higher than the same period last year by $208,000 or 18.4 percent mainly due to an increase in unit costs of various charges. These revenues are expected to approximate budget at year-end. • Revenues - Sludge Disposal- IRWD - Sludge Disposal fees-IRWD are at $4.6 million, or 54.8 percent of the $8.4 million budget. The revenue is derived and fluctuated from flows discharged from IRWD to Sanitation District for the handling, treatment and disposal of solids. The revenues through the second quarter are higher than the same period last year by $1.4 million or 43.7 percent mainly due to $522,000 in prior year adjustments due to IRWD and an increase of $711,000 of quarterly capital billing in the current year. In the prior year, the capital charges were billed to IRWD at year-end. These revenues are expected to approximate budget at year-end. • Revenues — Capital Assessments- IRWD — Capital Assessments-IRWD are at <$645,000 >, or <18.6> percent of the $3.5 million budget. The revenues through the second quarter are lower than the same period last year by $8.7 million or 108.0 percent mainly due to the recognition of a $7.5 million reduction in Irvine Ranch Water District's equity interest in the treatment plant as a result of the decrease in their swage flows, and a reversal of $1.5 million from the prior year-end accrual for projects that have been placed in service during the year. Projects that are placed in service are accrued and depreciated at year-end and reversed in the beginning of the following year. It is estimated that the capital assessments will be below budget at year-end. • Revenues — Capital Facilities, Capacity Charges (CFCC) — CFCC are at $9.7 million, or 85.2 percent of the $11.4 million budget. The revenues through the second quarter are higher than the same period last year by $3.5 million or 55.6 percent due to an increase in construction activity in the current year. These revenues are expected to exceed the budget at year-end. • Revenues — Interest Earnings — Interest Earnings are at $2.0 or 15.1 percent of the $13.1 million budget. The revenues through the second quarter are lower Section 1 - Page 4 Budget Review Summary than the proportionate budget due to the total return of the Sanitation District's liquid and long-term operating investments being less than what was anticipated. The revenues through the second quarter are higher than the same period last year by $2.2 million or 937.4 percent due to an increase in current year investment earnings. It is estimated that the interest earnings will be below the budget amount at year-end. • Revenues — Wastehauler — Wastehauler revenues are at $363,000 or 55.0 percent of the $660,000 budget. This revenue is derived from fees charged to wastehaulers allowing them to dump waste into the Sanitation District's system. These revenues are expected to approximate budget at year-end. • Revenues — CNG Sales — CNG Sales revenues are at $213,000 or 64.3 percent of the $331,000 budget. The revenues through the second quarter are higher than the same period last year by $91,000 or 74.5 percent due to the compressed natural gas (CNG) fueling station located at the front entrance of Plant No. 1 being shut down in the prior year for 3 months from mid-August to November 2013 while gas lines were rerouted for the Sludge Dewatering and Odor Control Project (Project No. P1-101). These revenues are expected to approximate budget at year-end. • Revenues - Other — Other non-operating revenues are at $351,000 or 85.6 percent of the $410,000 budget. These revenues consist of charges to Sunset Beach Sanitary District for treatment of flows and other miscellaneous revenues. These revenues are expected to exceed budget at year-end. Section 1 - Page 5 FY 2014-15 Second Quarter Report Comparison of Second Quarter Cost per Million Gallon Results with Budget Last Five Years I 2,075 2000 �W6 2,089 1,925 1,860 1�11 ,aoa teas ss, tas� 1,775 1,700 1,625 1,550 1,475 1,400 1,325 1,250 1,175 1,100 1,025 950 875 800 725 650 575 10-11 11-12 12-13 13-14 14-15 2nd Annual 2nd Annual 2nd Annual 2nd Annual 2nd Annual Qtr Budget Qtr Budget Qtr Budget Qtr Budget Qtr Budget As demonstrated in the preceding graph for each of the last four fiscal years, the cost per million gallons at the end of the second quarter has been 0.8 percent to 6.3 percent lower than the annual budget. The FY 2014-15 second quarter, although higher than previous years, continues with this trend with 0.6 percent lower when compared with this year's budget. Staff believes that overall operating costs will be below budget at year-end. The total cost per million gallons at December 31 is $2,076 based on flows of 191.1 million gallons per day. This is $13 per million gallons, or 0.6 percent, lower than the budgeted cost per million gallons of $2,089. There is an inverse relationship between the amount of flows and the cost per unit of collection, treatment, and disposal. Consequently, the lower cost per million gallons is due to net expenses being 4.3 percent less than the proportionate budget through December 31, which is partially offset by flows of 191.1 million gallons per day being 4.4 percent lower than the budgeted flow of 200 million gallons per day. More detailed information on operating revenues, costs, and related information is provided within Section 2. Section 1 - Page 6 Budget Review Summary Following are data tables showing the last five years of Single Family Residential User Fees (SFR) and the cost per MG to collect, treat, and dispose of wastewater for OCSD and for similar agencies. The agencies used in the table were determined to be those that most closely resembled OCSD in terms of services provided and treatment levels. The summaries demonstrate that OCSD's SFR and cost per million gallons are each one of the lowest in their respective group. Benchmark Study Five-Year Single Family Rate Rates as of July 2010 2011 2012 2013 2014 Agency SFR SFR SFR SFR SFR Notes San Francisco $613.44 $636.00 $667.92 $701.40 $ 744.83 City of San Diego $608.04 $608.04 $572.58 $572.58 $ 572.58 Vallejo Sanitation/Flood Control District $464.52 $483.12 $495.12 $507.48 $ 520.20 Central Contra Costa Sanitary District $311.00 $341.00 $371.00 $405.00 $ 439.00 City of Los Angeles $359.64 $358.66 $391.56 $409.20 $ 435.40 Note 1 Dublin San Ramon Services District $299.46 $345.06 $355.44 $355.44 $ 372.96 East Bay MUD $271.84 $287.98 $305.10 $331.10 $ 358.14 Union Sanitary District $289.84 $304.33 $319.55 $337.76 $ 357.02 Sacramento County $240.00 $264.00 $288.00 $312.00 $ 348.00 City of Hayward $308.40 $317.64 $327.24 $327.24 $ 337.08 Orange County Sanitation District $244.00 $267.00 $294.00 $308.00 $ 316.00 City of Fresno $299.76 $299.76 $309.00 $309.00 $ 309.00 Irvine Ranch Water District $ 199.80 $202.80 $206.40 $220.80 $ 246.00 Note 2 Los Angeles County $ 141.00 $143.00 $149.00 $230.00 $ 245.00 Oro Loma Sanitary District $178.00 $183.00 $189.00 $195.00 $ 200.00 Notes: (1)-Data is for the typical SFR customer rate and is not the average rate. (2)-Data represents the maximum SFR rate and is not the average rate. Section 1 - Page 7 FY 2014-15 Second Quarter Report Benchmark Study Five-Year Cost per MG FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14 Agency Svc. Trt. CosVMG CosUMG CostIMG CosUMG CostIMG Notes Central Contra Costa Sanitary Dislncl B 4 $4,136.89 $3,929.80 $4,203.43 $4,621.84 $5,778.43 San Francisco B 3 $4,339.32 $3,857.80 $4,778.96 $5,006.74 $5,400.28 Note Union Sanitary Distract B 3 $2,964.94 $3,206.10 $3,267.06 $3,805.40 $3,832.47 City of San Diego B 2 $3,583.70 $3,208.48 $3,242.30 $3,340.35 $3,156.43 Note 5 East Bay MUD T 4 $1,856.65 $2,000.31 $2,320.02 $2,359.40 $2,559.18 Dublin San Ramon Setaces District B 3 $1,905.99 $1,964.64 $2,009.57 $2,159.49 $2,506.60 Sacramento County T 3 $1,638.91 $1,591.75 $3,312.50 $2,143.16 $2,375.47 Note City of Los Angeles B 4 $1,880.00 $1,836.00 $1,935.00 $2,062.00 $2,163.00 Note 1 Orange County sanitation District B 3 $1,588.72 $1,816.62 $1,871.47 $1,906.01 $1,935.05 City of Fresno B 3 $1,207.20 $1,263.50 $1,383.60 $1,411.89 $1,552.39 Vallejo SanitationlFlood Control District B 3 $4,911.00 $4,536.00 $5,176.00 $5,435.00 NIA Inure Ranch Water District $1,962.02 WA NIA WA NIA Note 4 Los Angeles County $1,117.00 $1,078.00 $1,156.00 $1,008.00 WA Note Legend for Service Prodded and Treatment Level: B-Agency operates both collection and treatment facilities T-Agency provides treatment seMces but not collection 2-ftenced primary or primary with some secondary treatment 3-Secondary treatment 4-Advanced secondary or secondary with some tertiary treatment Notes: (1)-In FY2003.04 the Cityapplied Engineers and Architects Association(EAA)COLA which covered muriple years. (2)-Does not include source control or overhead costs. (3)-New dataset represents wastewater flows from finalized publicly available audited documents. (4)-Cost of Wastewater Treatment,including Collections,Treatinent,and GenerallAdministrafive Costs minus redaimed water epenses. (5)-Beginning in Fiscal Year 2008-09,cost per mg includes the Point Loma Wastewater Treatment Plant and South Bay Water Reclamation Plant (6)-Miles of sewers number changed in 2012 to include parallel force main pipes per the 2011 State of the District Report. Section 1 - Page 8 Budget Review Summary Capital Outlay Review: $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 12/31/14 Actual Projected 2014-15 2014-15 Capital Outlay Capital Outlay Capital Outlay Cash/low Budget $52,749,559 $152,000,900 $169,235,000 As depicted by the preceding chart, Capital Outlays totaled $52,749,559 or 31.2 percent of the capital outlay cash flow budget for FY 2014-15 as of December 31, 2014. Costs are proportionately low through the second quarter as some projects are still in the design phase or have experienced various delays. Examples as of December 31 are the Sludge Dewatering and Odor Control at Plant 1 which has a FY14-15 cash flow budget of $61.1 million but actual costs of only $13.9 million and the Title 24 Access Compliance and Building Rehabilitation Project, which has a budget of $4.8 million but actual costs of only $405,000. Overall, the capital outlay costs of the capital improvement program are expected to approximate $152.0 million, or 89.8 percent of the capital outlay cash flow budget at year-end. More detailed information on the capital improvement program is provided within Section 3. Capital Assets Schedule 6 Debt Service Budget Review. Section 4 is the Capital Assets Schedule and Debt Service Section. This section shows the cost value of the Sanitation District's capital facilities at December 31, 2014, as well as the debt service costs resulting from the need to provide funding for the construction of capital facilities. Except for the 2013A Certificate of Anticipation Notes (CANs) refunded in October 2014, the majority of principal payments on debt issues are due in August during the second quarter, and in February during the third quarter of each fiscal year. As of Section 1 - Page 9 FY 2014-15 Second Quarter Report December 31 2014, 93.3 percent of the principal payments have been made through the end of the second quarter. Total principal payments are expected to approximate budget at year-end. Interest costs are expensed ratably throughout the fiscal year. Interest expense is anticipated to approximate budget at year-end. Self-Insurance Budget Reviews: Section 5 is the Self-Insurance Section. Through December 31, the Self-Insurance Fund revenues totaled $630,000 or 49.3 percent of the budget, while expenses were $1.0 million or 46.9 percent of the budget. Separate fund accounting is used for recording the revenue and expenses incurred in managing these liability claims. The revenues to these funds represent charges to operating divisions. Expenses to these funds include actual claims paid, claims administration, and excess loss policies. Section 1 - Page 10 Operating Budget Review Cost per Million Gallons by Department Budget and Actual December 31, 2014 $1.300 $1.200 $1,100 $1,000 $900 $Boo $700 $600 $500 $aoo $300 $200 $ioo $o E a Y w E E E — z — E w � �Butlget �Adual Collection,Treatment, & Disposal Expenses by Major Category Budget and Actual (in thousands) December 31, 2014 $65,000 $60,000 $56,000 $50,000 U5,000 $00,000 $36,000 $30,000 $26,000 $20,000 $15,000 $10,000 $5,000 $Q h AIL- E g' m O m 2 C 5m �ButlBet �Aclual O Section 2-Page 1 2014-15 Second Quarter Report Divisional Contributions to Cost Per Million Gallons For the Six Months Ended December 31,2014 2014-15 12/31/12 12/31/13 Annual 12/31/14 Actual Actual Budget Actual Flow in Million Gallons 37,148.00 36,665.15 73,000.00 35,166.23 Flow in Million Gallons per Day 201.89 199.27 200.00 191.12 Executive Management Department General Management Administration $ 22.46 $ 30.66 $ 36.43 $ 25.60 Board Services 8.18 8.70 9.03 7.32 Public Affairs 15.03 7.20 10.93 7.93 Subtotal 45.67 46.56 56.39 40.85 Human Resources Department Human Resources 51.37 51.07 65.25 54.65 Subtotal 51.37 51.07 65.25 54.65 Administrative Services Department Administrative Services 9.19 9.16 9.28 9.87 Financial Management 39.31 40.44 51.09 45.60 Contracts, Purchasing,&Materials Mgmt. 55.29 57.49 61.87 62.59 Information Technology 129.34 125.81 142.34 150.60 Risk Management 51.02 47.92 53.90 48.23 Subtotal 284.15 280.82 318.48 316.89 Facilities Support Services Department Facilities Support Administration 8.41 9.24 9.71 9.89 Facilities Support 8.49 7.17 6.72 8.21 Equipment Rebuild 21.46 21.49 22.62 24.89 Fleet Services 23.81 24.65 27.37 30.11 Facilities Engineering&Repair Services 65.21 41.18 53.04 44.33 NPDES Source Inspection 35.39 38.19 36.17 33.08 Odor and Corrosion Control 94.18 91.39 98.28 104.94 Collection Facilities O&M 54.34 49.13 55.33 60.76 Subtotal 311.29 282.44 309.24 316.21 Engineering Department Engineering Administration 6.05 5.72 5.69 10.43 Planning 42.55 50.70 50.17 44.49 Project Management Office 46.21 48.69 49.03 52.03 Engineering and Construction 121.59 123.69 125.29 129.56 Environmental Compliance 99.20 99.67 92.97 109.09 Subtotal 315.60 328.47 323.15 345.60 Operations&Maintenance Department Operations&Maintenance Administration 17.39 11.47 12.55 10.66 Plant No. 1 Operations 335.98 348.32 362.96 378.10 Plant No.2 Operations 288.43 294.42 310.58 308.15 Building, Grounds&Mechanical Maintenance 160.11 183.a4 230.03 205.58 Instmmentation&Electrical Maintenance 193.83 203.82 216.73 215.79 Environmental Laboratory&Ocean Monitoring 108.06 109.50 112.98 117.48 Subtotal 1,103.80 1,151.37 1,245.83 1,235.76 Total Operating Expenses 2,111.88 2,140.73 2,318.34 2,309.96 Cost Allocation (208.15) (189.57) (229.34) (234.13) Net Operating Requirements $ 1, 003.73 $ 1,951.16 $ 2,089.00 $ 2,075.83 Section 2-Page 2 Operating Budget Review Comparison of Expenses by Department For the Six Months Ended December 31, 2014 2014-15 12/31/12 12131/13 year to Date Budget% Department and Division Actual Actual Budget 12/31/14 Realized Executive Management Departmenl General Management Administration $ 834,498 $ 1,124,039 $ 2,659,070 $ 900,333 33.86% Board Services 303,831 319,016 659,220 257,548 39.07% Public Affairs 558,305 264,011 798,200 278,804 34.93% Subtotal 1,696,634 1,707,066 4,116,490 1,436,685 34.90% Human Resources Department Human Resources 1,908,199 1,872,631 4,763,030 1,921,945 40.35% Subtotal 1,908,199 1,872,631 4,763,030 1,921,945 40.35% Administrative Services Department Administrative Services 341,460 335,920 677,510 347,258 51.26% Financial Management 1,460,349 1,482,644 3,729,300 1,603,533 43.00% Contracts, Purchasing,&Materials Mgmt. 2,053,861 2,107,831 4,516,800 2,200.926 48.73% Information Technology 4,804,896 4,613,021 10,390,790 5,296,062 50.97% Risk Management 1,895,207 1,757,117 3,934,910 1,696,087 43.10% Subtotal 10,555,773 10,296,533 23,249,310 11,143,866 47.93% Facilities Support Services Department Facilities Support Administration 312,318 338,721 709,130 347,941 49.07% Facilities Support 315,249 262,879 490,790 288,601 58.80% Equipment Rebuild 797,269 787,934 1,651,440 875,449 53.01% Fleet Services 884,581 903,886 1,997,800 1,058,813 53.00% Facilities Engineering&Repair Services 2,422,581 1,509,783 3,871,880 1,558,758 40.26% NPDES Source Inspection 1,314,489 1,400,106 2,640,360 1,163,166 44.05% Odor and Corrosion Control 3,498,416 3,350,867 7,174,480 3,690,482 51.44% Collection Facilities O&M 2,018,703 1,801,385 4,039,300 2,136,631 52.90% Subtotal 11,563,606 10,355,561 22,575,180 11,119,841 49.26% Engineering Department Engineering Administration 224,637 209,698 415,210 366,932 88.37% Planning 1,580,615 1,858,747 3,662,170 1,564,599 42.72% Project Management Office 1,716,715 1,785,386 3,579,510 1,829,753 51.12% Engineering and Construction 4,516,650 4,535,138 9,146,430 4,556,182 49.81% Environmental Compliance 3,684,999 3,654,435 6,787,090 3,836,238 56.52% Subtotal 11,723,616 12,043,404 23,590,410 12,153,704 51.52% Operations&Maintenance Department Operations&Maintenance Administration 645,952 420,381 916,210 374,959 40.93% Plant No.1 Operations 12,480,947 12,771,362 26,496,250 13,296,458 50.18% Plant No.2 Operations 10,714,740 10,795,097 22,671,990 10,836,567 47.80% Building,Grounds&Mechanical Maintenance 5,947,812 6,740,602 16,792,130 7,229,649 43.05% Instrumentation&Electrical Maintenance 7,200,311 7,473,215 15,821,250 7,588.641 47.96% Environmental Laboratory&Ocean Monitoring 4,014,133 4,014,998 8,248,570 4,131,065 50.08% Subtotal 41,003,895 42,215,655 90,946,400 43,457,339 47.78% Total Operating Expenses 78,451,723 78,490,850 169,240,820 81,233,380 48.00% Cost Allocation (7,731,858) (6,951,354) (16,740,700) (8,234.303) 49.19% Net Operating Requirements $ 70,719,865 $ 71,539,496 $ 152,500,120 $ 72,999,077 47.87% Section 2-Page 3 2014-15 Second Quarter Report Summary of Collection, Treatment, &Disposal Expenses by Major Category For the Six Months Ended December 31, 2014 Expense Expense Increase Increase Percent Budget Through Through (Decrease) (Decrease) Budget Remaining Description 2014-15 12/31/14 12/31/13 $ % Realized Budget Salary&Wages $ 63,460,100 31,759,579 31,806,983 $ (47,404) -0.15% 50.05% $ 31,700,521 Employee Benefits 35,708,700 17,187,432 16,343,254 844,178 5.17% 48,13% 18,521,268 Administrative Expenses 1,397,070 832,506 712,729 119,777 16.81% 59.59% 564.564 Printing&Publication 430,340 141,552 114,515 27,037 23.61% 32,89% 288,788 Training&Meetings 1,041,710 273,892 296,902 (23,010) -7.75% 26.29% 767.818 Operating Materials&Supplies 15,830,500 8,075,408 7,895,844 179,564 2.27% 51,01% 7,755,092 Contractual Services 24,278,170 10,701,665 10,722,745 (21,080) -0.20% 44.08% 13,576,505 Professional Services 3,269,370 1,070,109 1,113,784 (43,675) -3.92% 32,73% 2,199,261 Research&Monitoring 830.000 355,036 419,313 (64,277) -15.33% 42.78% 474.964 Repairs&Maintenance 13,063,210 5,896,506 4,198,426 1,698,080 40,45% 45,14% 7,166,704 Utilities 7,437,770 3,838.042 3,604,922 233,120 6.47% 51.60% 3,599,728 Other Materials,Supplies, and Services 2,493,880 1,101,653 1,261,433 (159,780) -12.67% 44.17% 1,392,227 Net Cost Allocation (16,740,700) (8,234,303) (6,951,354) (1,282,949) 18.46% 49A9% (8,506,397) Net Operating Requirements 152,500,120 72,999,077 71,539,496 1,459,581 2.04% 47.87% 79,501,043 Gallonage Flow(MG) 73,000000 35,166.23 36,665.15 (1,49&92) A.09% Gallonage Flow(MGD) 200.00 191.12 199.27 (8.15) A.09% Gallonage Flow($'a/MG) $2,089000 $2,075.83 $1,951.16 $124.67 6.39% Section 2-Page 4 Operating Budget Review Summary of Revenues For the Six Months Ended December 31, 2014 Revenue Percent Revenue Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 201445 12(31/14 Realized Budget 12131/13 $ % Service Fees $288,946,000 $148,404,423 51.36% $140,541,577 $150.310,403 $ (1,905,980) .1.27% Permit Fees 13,6B4,000 5,405,811 39.50% 8,278,189 5,718,938 (313,127) -5.48% Inter District Sewer Use-SAWPA 2,529.000 1,180,194 46.67% 1,348,806 1,253,201 (73,007) .5.83% Intre District Sewer Use-IRWD 2,302,140 1,339,826 58.20% 962,314 1,131,390 208,436 18.42% Sludge Disposal-IRWD 8,394,000 4,603,117 54.84% 3,790,883 3,202,383 1,400,734 43.74% Capital Assessments-IRWD 3,469,000 (645,227) -18.60% 4,114,227 8,048,075 (8,693,302) -108.02% Capital Facilities Capacity Charges 11,355.000 9,670,609 85.17% 1,684,391 6,217,021 3,453,588 55.55% Debt Proceeds - 232,240,891 N/A (232,240,891) 131,991,953 100,248,938 75.95% Property Taxes 77,733.000 36,849,090 47.40% 40,883,910 34,708,335 2,140,755 6.17% Interest Earnings 13,143,000 1,986,100 15.11% 11,156,900 (237,166) 2,223,266 937.43% Wastehauler 660.000 363,202 55.03% 296,798 318,167 45,035 14.15% CNG Sales 331,000 212,663 64.25% 118,337 121,868 90,795 74.50% Rents 8 Leases 251.000 127,528 50.81% 123,472 125,072 2,456 1.96% Other 410,000 350,999 85.61% 59,001 308,235 42,764 13.87% Power Sales 4,000 7,472 186.80% (3,472) 2,458 5,014 203.99% Other Sales 9,000 15,203 168.92% (6,203) 2,540 12,663 498.54% Total Revenues $ 423,220,140 $442,111,901 104.46% $(1 B,891,761) $343,222,873 $ 98,889,028 28.81% Section 2-Page 5 2014-15 Second Quarter Report Summary of Collection,Treatment, &Disposal Expenses by Line Item For the Six Months Ended December 31,2014 Expense Percent Expense Moral Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2014-15 IV31114 Expensed Budget lV31/13 $ % Salaries.Wanes&Benefits Salaries&Wages $ 63,460,100 $ 31,759,579 50.05% $ 31,700,521 $ 31,806,983 $ (47,404) -0.15% Employee Benefits Retirement 25,398,200 12,114,068 47.70% 13,284,112 11,581,735 532,353 4.60% Group Insurances 8,965,000 4,423,795 49.35% 4,541,205 4,252,783 171,012 4.02% Tuition&Certifica0on Relmb 173,400 67,750 39.07% 105,650 72.582 (4,832) 4.66% Edu.degrees.Cad.&Lic. 295.800 153,037 5174% 142,763 147,927 5,110 3.45% Uniform Rental 54,100 26,306 48.63% 27,792 27,009 (701) -2.0% Workers Compensation 755,000 377,601 50.00% 377,499 227,501 150,000 65.93% Unemployment nsurance 60,100 4,599 7.65% 55,501 30,127 (25,528) -84.73% EMT Supplemental Benefits 7,100 20,354 286.68% (13,254) 3.590 16,764 461 Total Benefits 35,708,700 17,187,432 48.13% 18,521,268 16,343,254 844,178 5.17% Salaries,Wages&Benefits 99,168,800 48,947,011 49.36% Sg221,789 48,150,237 796,774 1.65% Matt.supply,&Services Administrative Expenses Memberships 576,240 406,810 70.60% 169,430 405.557 1,253 0.31% Office Exp-Supplies 67,840 25,501 37.59% 42.339 27,366 (1,865) 46.82% Postage 38,570 13,316 34.52% 25,254 19,031 (5,715) -30.03% Books&Publications 40,600 15,079 37.14% 25,521 17,550 (2,471) -14.08% Fortes 890 - 0.00% 890 436 (436) -100.00% Small Computer Items 550.000 328,940 59.81% 221,060 206.813 122,127 59.05% Minor Furniture&Fixtures 122,930 42,860 34.87% 80,070 35,976 6,884 19.13% Subtotal 1,397,O70 832,506 59.59% 51 712,729 119,7T1 16.B1% Printing&Publication Repro-In-House 378,640 121,365 32.05% 257,275 84,773 36,592 43.16% Printing-Outside 26,330 13,692 51.62% 12,738 13,524 68 0.50% Notices&Ads 25,110 6,521 25.97% 18,589 16,098 (9,5T1) -59.49% Photo Processing 260 74 28.46% 186 120 Subtotal 430,340 141,552 32.89% 288,788 114,515 27,037 23.61% Training&Meetings Meetings 189.970 58,612 30.85% 131.358 56,826 1,786 3.14% Training 851,740 215,280 25.28% 636,460 240,0T6 (24,796) Subtotal 1,041,710 273,892 26.29% 767,818 296,902 (23,010) -7.75% Operating starts&Supplies Chemical Coagulants 5,T85,000 3,009,374 52.02% 2,T/5,626 2,920,134 89,240 3.06% Odor Control 7,056,600 3,789,472 5370% 3,267,128 3,476,026 313,446 9.02% Disinfection 425,000 177,044 41.66% 247,956 163,199 13,845 a."% Chemicals-Misc&Cogan 68.000 15,918 23.41% 52.082 18.042 (2,124) -11.TT% Gasoline,Diesel&Oil 665,800 287,073 43.12% 378,727 262,485 24,588 9.37% Tools 409,370 146,821 35.87% 262,549 174,131 (27,310) -15.68% Safety equlpmenthods 161,440 244,535 52.99% 216,905 440,132 (195,597) -0 .44% Sol,Paints&Jan.Supplies 90.610 dg019 48.58% 46.591 41,746 2,273 5.44% Lab Chemicals&Supplies 690,770 296,769 42.96% 394,001 334,012 (37,243) -11.15% Other Opeatng Supplies 161,220 64,383 39.93% 96,837 79,480 (15,097) -18.99% Property Tax Fees 16,690 0.00% 16,690 (13,543) 13,543 -100.00% Subtotal 15,830.500 8,O75,408 51.01% 7,755,092 7,895,844 179SM 2.27% Contractual Services Solids Remoyal 18,321,850 8,704,358 47.51% 9,617,492 8,749,434 (45,076) -0.52% Other Waste,Disposal 831.450 472,592 56.84% 358,858 357,362 115,230 32.24% Groundskeeping 170,000 80,071 47.10% 89,929 79,011 1,060 1.34% Janitorial 459,940 244,653 53.19% 215,287 232,954 11,699 5.02% Outside Lab Services 239,400 80,206 33.50% 159,194 103,323 (23,117) -22.37% Oxygen Plant Oper 719.000 292,206 40.64% 426794 345,911 (53,705) -15.53% County Service Fee 686,360 26,640 3.88% 659,720 43,469 (16,829) -38.71% Temporary Sernces 418,990 149,281 35.63% 269,709 161,417 (12,136) -7.52% Security Services 850,000 188,724 22.20% 681,276 63,509 125,215 197.16% Other 1,581,180 462,934 29.28% 1,118,246 586.355 (123,421) Subtotal 24,278,170 10701,665 44.08% 13,576,505 10,722745 (21,080) (Continued) Section 2-Page 6 Operating Budget Review Summary of Expenses by Line Item For the Six Months Ended December 31,2014 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 201d-15 12131114 Expensed Budget 12/31/13 $ % Continued: Professional Services Legal 844,400 415,167 49.17% 429,233 483,400 (68,233) -14.12% Audit&Accounting 224,650 101,952 45.38% 122,698 121,976 (20,024) -16.42% Engineering 635,000 48,974 7.71% 585,026 111,499 (62,525) -56.08% Erwin,Sdentific Consulting 67,500 22,108 32.75% 45,392 26,610 (4,502) -16.92% Software Prgm Consulting 420,000 152,278 36.26% 267,722 143,734 8,544 5.94% Advocacy Efforts 187,000 87,628 46.86% 99,372 78,481 9,147 11.66% Industrial Hygiene Services 50,000 23,139 46.28% 26,861 18,186 4,953 27.24% Labor Negotiation Services 119,080 20,178 16.94% 98,902 35,000 (14,022) 42.35% Other 721,740 198,685 27.53% 523,055 94,898 103.787 109.37% Subtotal 3,269,370 1,070,109 32.73% 2,199,261 1,113,784 (43,675) -3.92% Research&Monitoring Environmental Monitoring 340,000 106,785 31.41% 233,215 194,270 (87,485) 45.03% Air Quality Monitoring 85,000 48,251 56.77% 36,749 20,043 28,208 140.74% Research 405,000 200,000 49.38% 205,000 205,000 (5,000) -2.44% Subtotal 830,000 355,036 42.78% 474,964 419,313 (64,277) Repairs&Maintenance Materials&Services 11,111.070 4,869,837 43.83% 6,241,233 3,565,872 1,303,965 36.57% Svc.Mb, Agreements 1,952,140 1,026,669 52.59% 925,471 632,554 394,115 62.31% Subtotal 13,063,210 5,896,506 45.14% 7,166,704 4,198,426 1,698,080 40.45% Utilities Telephone 320,000 149,089 46.59% 170,911 123,972 25,117 20.26% Diesel For Generators 23,230 12,673 54.55% 10,557 10,956 1.717 15.67% Natural Gas 400,500 265,093 66.19% 135,407 210,235 54,858 26.09% Power 61003.200 3,134,519 52.21% 2,868,681 2,753,513 381,006 13.84% Water 690,840 276,60 40.05% 414,172 506,246 (229,578) -45.35% Subtotal 7,437,770 3,838,042 51.60% 3,599728 3,604,922 233,120 6.47% Other Operating Supplies Outside Equip Rental 7,330 65,730 896.73% (58,400) 1,657 64,073 3866.81% Insurance Premiums 32,000 31,884 99.64% 116 31,862 22 0.07% Prop&Gen Liab Insurance 500,000 250,002 50.00% 249,998 454,5W (204,498) -0 .99% Freight 60,120 31,412 52.25% 28,708 31,408 4 0.01% Misc.Operating Expense 254,290 93,955 36.95% 160,335 90,046 3,909 4.34% Regulatory Operating Fees 688,000 601,597 87.44% 86,403 623,257 (21,660) -3.48% Subtotal 1,541,740 1,074,580 8970% 467,160 1,232,730 (158,150) -12.83% General Mgr Contingency &Reappropriations 885,000 0.00% 885,000 N/A Other Non-Oper Expense Others 67,140 27,073 40.32% 40,067 28,703 (1,630) -5.68% Subtotal 67,140 27,073 40.32% 40,067 28,703 (1,630) -5.68% Total Materials, Supplies&Services 70,072,020 32,286,369 46.08% 37,785,651 30,34Q613 1,945,756 6.41% Total Expenditures 169,24Q820 81,233,380 48.00% 88,007,440 78,490,850 2,742,00 3.49% Cost Allocation (16,740,700) (8,234,303) 49.19% (8,506,397) (6,951,354) (1,282,949) 18.48% Net Operating Requirements $ 152,500,120 $ 72,999,077 47.87% $ 79,501.043 $ 71,539,496 $ 1,459,581 2.04% Section 2-Page 7 2014-15 Second Quarter Report Summary of Collection,Treatment, &Disposal Expenses by Process For the Six Months Ended December 31,2014 Increase Increase Actual Actual (Decrease) (Decrease) 12/31/14 12/31/13 $ % Process: Preliminary Treatment $ 4,491,425 $ 4,505,065 $ (13,640) -0.30% Primary Treatment 6,620,352 6,483,329 137,023 2,11% Secondary Treatment 4,224,456 4,526,602 (302,146) -6.67% Cryogenic Plant(Plant 2) 578,599 729,963 (151,364) -20.74% Ef0uent Disposal 496,791 384,877 111,914 29.08% Solids Handling 24,592,872 23,677,465 915,407 3.87% Cogeneration 6,963,052 7,240,037 (276,985) -3.83% Utilities 1,475,355 1,638,978 (163,623) -9.98% Electrical Distribution 1,058,584 1,229,152 (170,568) -13.88% Miscellaneous Buildings 3,875,232 3,568,589 306,642 8.59% External Location 49,498 880 48,617 5522.69% Nedssa Vessel 138,886 1,269 137,618 10846.71% North County Yard 11 11 - 0.00% Laboratory 6,408,570 6,460,300 (51,730) -0.80% Collections 12,025,395 11,092,979 932,417 8.41% Net Operating Requirements $ 72,999,077 $ 71,539,496 $ 1,459,580 2.04% Section 2-Page 8 Operating Budget Review Staffing Trends Full Time Equivalents December 31, 2014 700 650 641 637 628 626 626 600 8 9 550 500 450 6/30111 6/30/12 6/30113 6/30/14 12/31/14 DActual DVawnt At December 31, 2014,the total head count was 594 employees,or a full time equivalency of 587. Section 2-Page 9 2014-15 Second Quarter Report This Page Intentionally Left Blank Section 2- Page 10 CIP Budget Review Capital Improvement Program By Type and Funding Source For the Six Months Ended December 31, 2014 "Will ctlons Facllites: 26 5% 11HaaEwwks: 1 2% Primary Treatment 0.5% aSecondary Treatment'. 0.8% t•Solid.Hamlin,&0lgestom 41 8% 130cean outlall Systems: O T% Duality systems: 16.7% Process Related Special Projects 11% �lnfannatlon Management Systems: 2.7% EnStrategic ti Master Planning: 0.1% \ lill Management Projects: 0.2% 1•Supp id Fadll 61% am.. 0.0% 1111 Pdor Year Treatment Projects: 0.0% NCapilal Equipment Purchases: 1.0% Total Capital Improvement Outlays -$52,749,559 ReplacemenVRehabilitation: 52% e4! Improved Treatment: 35% ❑Additional Capacity: 9% ■Support: 4% Total Capital Improvement Outlays -$52,749,559 Section 3- Page 1 FY 2014-15 Second Quarter Report Summary of Capital Improvement Construction Requirements-Current Year For the Six Months Ended December 31, 2014 2014-15 2014-15 2014-15 Caching. Actual at Projected Budget IV3112014 Outlay Collection System Improvement Pro Collections Facilities Santa Ana Trunk Sewer Rehab. $ 3,359,755 $ 81,563 $ 3,378,900 SARI Realignment 405,332 113,274 618,900 SARI Rock Stabilizers Removal 211,746 9,047 89,500 Newhoge-Placentia Trunk Gratle Separation Replacement 3,396,918 64,082 3,206,000 Newhoge-Placentia Trunk Replacement 385,216 252,127 4,921,200 Lakeview Gratle Separation Project 283,853 13,687 311,200 Tustin Rose DICTA Gratle Separation Project 452,914 63,519 92,200 Orangethorpe DICTA Gratle Separation Project 719,552 3,405 3,003,500 Rehabilitation of Magnolia Trunk Sewer - (79,892) (79,900) Seal Beach Pumping Station Rehabilitation M3,829 66,042 656,700 Rehabilitation of Western Regional Sewers - 14,61 322,800 Rehabilitation of Balboa Trunk Sewer 2,551,550 52,676 101 Bitter Point Force Main Rehabilitation 410,577 112,583 294,200 Newport Force Main Rehabilitation 20,079,397 10,163,325 19,404,500 Dover Drive Trunk Sewer Relief 4,639,536 2,115,097 2,314,900 District 6 Trunk Sewer Relief 720,854 192,524 470,800 Southwest Costa Mesa Trunk 436,125 116,741 561,900 Gisler-Redhill Trunk Improvements,Reach B 216,393 267,018 678,600 MacArthur Pump Station Rehabilitation - - 36,400 Master Facilities Engineering Projects-Collections 864,029 132,801 353,500 Bay Bridge Pump Station and Force Mains Rehabilitation Study 381,646 5,844 130,400 Collection System Master Planning 1,000,000 37,107 37,200 Additional Charges to CIP Closed at 6130114 (11,320) If 1,400) Subtotal-Collections Facilities 41,179,222 13,791,917 40,892,900 Revenue Area 14 Bitter Point Force Main Rehabilitation(1.65%) 61888 1,889 51000 Newport Force Main Rehabilitation(1.88%) M4,726 194.131 371.800 Subtotal-Revenue Area 14 391,614 196,620 376,800 Total Collection System Improvement Projects 41,570,836 13,91 41,269,700 (Continued) Section 3-Page 2 CIP Budget Review Summary of Capital Improvement Construction Requirements-Current Year For the Six Months Ended December 31, 2014 2014-15 2014-15 2014-15 Cashflow Actual at Projected Budget 12/3112014 Outlay Treatment&Disposal Projects Headworks HeadWOd(s Rehabilitation and Expansion at Plant 1 429,107 184,615 273,900 Truck Line Odor Control Improvements Pi 669,312 418,759 695,200 Headwork.Improvements at Plant 41,899 54.600 Subtotal-Headwork. 1,098,419 545,273 1,023,700 Primary Treatment Joint GWRS Microtiltration Backwash Redirection Project 5,219 2,827 2,900 Plant 1 Primary Treatment Upgrades 3,427,951 235,966 2,406,400 Primary Treatment Area Rehabilitation Study 578,376 4,600 Subtotal-Primary Treatment 4,011.546 238.193 2,413,900 Secondary Treatment New Secondary Treatment System at Plant No.1 139,159 375,104 425,200 Oxygen Plant Demolition at Plant No,2 1,829,561 59,281 944,300 Plant No.1 Secondary Treatment Asset Management Plan W5,015 - 26,800 Plant No.2 Secondary Oxygen Plant Asset Management Plan 93,567 Subtotal-Secondary Treatment 2,427,302 434.385 1,396,300 Solids Handling&Digestion Digester Rehabilitation at Plant 1 5,443,017 2,751,084 6,356,400 Sludge Dewatering and Odor Control at Plant 1 61,050,918 13,859,936 51,526,400 Digester Ferric Chloride System Rehabilitation 320,044 266,476 284,600 Solids Thickening and Processing Upgrades 6,315,445 4,487.971 6,357,000 Sludge Dawalering and Odor Control at Plant 2 1,402,322 542,563 2,539,400 Plant 2 DigeslerslBoilers Plant Asset Management Plan 355,943 1M,335 176,600 Subtotal-Solids Handling&Digestion 74.887,689 22.038,365 67,240,400 Ocean curtail Systems Final Effluent Sampler and Building Area Upgrades 488,290 238,747 51 Carl Land Section and OOBS Piping Rehabilitation 52,879 18,980 191000 Ocean Oulfall System Rehabilitation 713,223 137,657 599700 Subtotal-Ocean Oudall Systems 1,254,392 395.384 1,198,800 UOlity,Systems Cengen Cooling Water System Replacement 284,249 32,802 35,100 Cengen Emissions Control Project 6,988,246 4,807,152 9,081,800 Power Monitoring and Control Systems 286,319 272,714 392,700 Plant Water System Rehabilitation at Plant No.1 2,501,914 1,8Tr,440 3,062,400 Plant Water System Rehabilitation at Plant No.2 2,323,394 1,345,889 2,651,600 Boiler System Rehab&Scmbbers H&I Demolition at Plant 2 1,744766 164143 1715,700 Consolidated Demolition&Utility Improvements at Plant 2 227,821 85,184 439,900 Digester Gas Facilities Study for Plants 1 &2 314,397 209,112 282,800 Utility Water Systems Study 800,000 - 61 Plant Air System Master Plan 147,626 - - Eleobical5ystem Base Map 250,000 Subtotal-Utility Systems 15.868732 8.790,436 17.729,700 (Continued) Section 3-Page 3 FY 2014-15 Second Quarter Report Summary of Capital Improvement Construction Requirements-Current Year For the Six Months Ended December 31, 2014 2014-15 2014-15 2014-15 Caahflow Actual at Projected Budget 1213112014 Outlay Process Related Special Projects Fall Protection Improvements at Plants Nos.I and 50,436 1,224 1,300 Corroslon Management 2,MO,766 451,376 451,400 Odor Control Master Plan 741,412 119,012 181.900 Subtotal-Process Related Special Projects 2,792,614 571,612 634,600 Information Management Systems Programmable Control Panel Upgrades 1,689,364 220,024 1,026,000 Strategic Information Architecture(SIA) 750,222 189,M2 301 InterneVlntranet Development 173,372 65,071 101 Geographic Information System S65,026 86,139 186,800 Information Technology Equipment Upgrade 600,856 270,496 396,400 EAM Software and Process Implementation 833,913 351,656 915,100 PD82D Software Replacement 126,655 35,400 35,400 Software and Computer Equipment Replacement Project 746,895 231,235 496,400 Information Technology Master Plan 232,042 Subtotal-InformaSon Management Systems, 5,518,M5 1,449,623 3,468,600 Strategic&Master Planning Facilities-Wide Safety Assessment 241,481 13,908 14,000 Landscape&Security Master Plan 111.423 - - Stoimwater Master Plan 38,018 - - Treatment Plant Hydraulic Assessment 168,726 18,880 18,900 Asset Management Program 54,641 192 200 Subtotal-Strategic a Master Planning 614.289 32,980 33,100 Water Management Projects Effluent Reuse Study 575,919 92,394 162.300 Subtotal-Water Management Projects 575.919 92,394 162,300 Support Facilities Master Facilities Engineering Projects-Plant 3,T11,179 1,116.593 2,671,000 Master Small Capital ReplacemenVRehabilbation-Plant 4.220,002 171,202 2,428,800 Operators Center Entrance/Building Repairs 35,247 - - Title 24 Access Compliance and Building Rehabilitation Project 4,846,207 405,124 5,092,300 South Perimeter Security&Storm Water Improvements at P1 40,938 34,151 274,900 Site and Security Improvements at Plant Nei 264.806 21,003 26,300 Public Address System Study 100,000 - - Tunnels Systems Asset Management Plan 118,842 -Plant No.2 Administradve Building Master Plan 192,545 - - Administrative Facilities Implementation Planning 662,962 382,934 729,700 Ongoing Small Capital ReplacemenVRehabilitation 1,183,658 1,396,982 1,684,400 Subtotal-Support Facilities 15,436,386 3,628,595 12,907,400 (Continued) Section 3-Page 4 CIP Budget Review Summary of Capital Improvement Construction Requirements-Current Year For the Six Months Ended December 31, 2014 2014-15 2014-15 2014-15 Cashflow Actual at Projected Budget 12/3112014 Outlay Others Future Research Line Item 1,000,381 5,313 352,400 Capital Improvement Program Mgmt.Services 99,999 66.200 Subtotal-Others 1,100,380 5,313 418.600 Additional Charges to CIP Completed at 6130114 25,117 25.200 Total Treatment and Disposal Projects 125.586.013 38.248.270 108,662.600 Capital Equipment Purchases 2,078,600 512,752 2,078,600 Total Colledion,Treatment and Disposal Projects and Capital Equipment Purchases $169,235,449 $ 52,749,559 $ 152,000,900 Section 3-Page 5 FY 2014-15 Second Quarter Report Summary of Capital Improvement Construction Requirements- Project Life For the Six Months Ended December 31, 2014 Current Total Approved June 30,2014 Year Projected Remaining Project Accumulated Projected Coat at Future Budget Cost Cost June 30,2015 Budget Collection System Improvement Pro ects Collections Facilities Santa Ana Trunk Sewer Rehab. 7,676,000 3,1K323 3,378,900 6,533,223 1.142,777 Raid and Bristol Street Sower Extension 10722,000 259,075 - 259,075 10.462,925 SARI Realignment 11,41Y1,000 5,325711 618.900 5,944,611 5.459,389 SARI Rock Stabilizers Removal 3,092,000 26,666 89.500 116,166 2,975,834 Taft Branch Improvements 3,143,000 12,083 - 12,083 3,130,917 Newhope-Placentia Trunk Grade Separation Replacement 5,966,000 559,207 3,206.000 3,765,207 2,200,793 Newhope-Placentia Trunk Replacement 104,890,000 51,792 4,921.200 4,972,992 99,917,008 Yoffie Linda Pumping Station Abandonment 4,696,000 - - - 4,694,000 Coyote Hills Golf Course Odor Control Station 8,365,000 - - - 8,365,000 Lakeview Grade Separation Project 330,000 4,142 311.200 315,342 14,658 Tustin Rose OCTA Grade Separation Project 586,000 36,228 92.200 128,428 457,572 Orangethorpe OCTA Grade Separation Project 31900,000 doll 3,003,500 3,103.528 796,472 Rehabilitation of Magnolia Trunk Sewer 19,812,000 19,647,646 (79.900) 19,567.746 244,254 Miller-Holder Trunk Sewer Relief 17.324,000 - - - 17,324,000 Beach Trunk/Knott Interceptor Sewer Relief 27.599,000 - - - 27,599,000 Seal Beach Pumping Station Rehabilitation 62,041,000 - 6%700 656700 61,384,300 Rehabilitation of Western Regional Sewers 112.222,000 - 322.800 3US00 111,899,200 Rehabilitation of Balboa Trunk Sewer 8,122,000 6,740,612 100,900 6,841,512 1,280,488 Biker Point Force Main Rehabilitation 44.866,287 30,783,269 294,200 31,077],469 13,788,818 Newport Force Main Rehabilitation 51,236,339 6,272,065 19404,500 25,676,%5 25,557,774 Dover Drive Trunk Sewer Relief 14,327,000 10,557,800 2,314,900 12,872,700 1,454,300 Crystal Cove Pumping Station Upgrade and Rehabilitation 7,817,000 - - - 7,817,000 Bay Bridge Pumping Station Rehabilitation 74,431,000 - - - 74.431,000 District 6 Trunk Sewer Relief 7,047,000 671,372 470.800 1,142.172 5,904,828 Southwest Costa Mesa Trunk 14,993,000 1,391.745 561,900 1,9M,645 13.039,355 Gisler-Redhill Trunk Improvements,Reach B 23,073,000 3,376.438 6T8.600 4,05$038 19.017,962 Browning Subtrunk Sewer Relief 13,439,000 - - - 13.439,000 Von Karman Trunk Sewer Relief 433,000 - - - 433,000 MacArthur Pump Station Rehabilitation 7,445,000 - 36.400 36,400 7.408,600 Main Street Pump Station Rehabilitation 40747,000 - - - 40747,000 Edinger/Balsa Chlca Trunk Improvements 6.030,000 - - - 6.030,000 Edinger Pumping Station Upgrade and Rehabilitation 13.629,000 - - - 13.629,000 Slater Avenue Pump Station Rehabilitation 13781,000 - - - 13781,000 Master Facilities Engineering Protects-Collections 12,192,000 273,440 353,500 626,940 11.565,060 Bay Bridge Pump Station and Force Mains Rehabilitation Study 522,838 - 130.400 130,400 392,438 Collection System Master Planning 1.000,000 - 37,200 37,200 962,800 Collection system Odor Control Systems Study 700,000 - - - 700,000 Additional Charges to CIP Closed at 6130114 (11.400) (11,4001 11,400 Subtotal-Collections Facilities 759,595,464 89,243,642 40,892,900 130,136,542 629,458,922 Revenue Area 14: Bitter Point Force Main Rehabilitation(1.65%) 752,714 516,445 5,000 521,445 231,268 Newport Force Main Rehabilitation(1.88%) 981,661 120,174 371,800 491,974 489,687 Subtotal-Revenue Area 14 1,73 .374 636,619 376,800 1,013419 720,955 Total Collection System Improvement Projects 761,329,838 89,880,261 41,269700 131,149,961 630,179,877 (Continued) Section 3-Page 6 CIP Budget Review Summary of Capital Improvement Construction Requirements- Project Life For the Six Months Ended December 31, 2014 Current Total Approved June 30,2014 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2015 Budget Treatment&Disposal Projects Headworks Headworks Rehabilitation and Expansion at Plant 1 76,476,000 23,493 273,900 297,393 76,178,607 Headworks Expansion P1 222,804,000 - - - 222,804,000 Truck Line Odor Control Improvements P1 10,826,000 917.437 695,200 1,612,637 91 Heatlworks Improvements at Plant 2 258.724,000 258,135,521 54,600 258,190,121 533,879 Subtotal-Heatlworks 568,830,000 259,076,451 1,023,700 20,100,151 308.729,549 Primary Treatment Joint GWRS Microfiltration Backwash Redirection Project 387,000 359,168 2,900 362,068 24,932 Primary Scrobber Rehabi@ation at Plant 50,708,000 - - - 50708,000 Primary Effluent Pipeline Joint Repairs 3,246,000 - - - 3,246,000 Plant l Primary Treatment Upgrades 11,535,000 1,048737 2,406,400 3,455,137 8,079,863 Plant 2 Primary Treatment System Rehabilitation 43,210,000 - - - 43,210,000 Primary Treatment Area Rehabilitation Study M8,000 157.161 4,600 161761 686,239 Subtotal-Primary Treatment 109.934.000 1.565.066 2,413,900 3,978,966 105,955,034 Secondary Treatment New Secondary Treatment System at Plant No 255,771,000 254,397,212 425,200 254,822,412 g48,588 Oxygen Plant Demolition at Plant No.2 4,051,000 539,982 944,300 1,484,282 2,566,718 Plant No.l Secondary Treatment Asset Management Plan 400,000 - 26,800 26,800 373,200 Plant No.2 Secondary Oxygen Plant Asset Management Plan 400,000 400,000 Subtotal-Secondary Treatment 260.622.000 254.937.194 1,396,300 256.333.494 4.288.506 Solids Handling&Digestion Digester Rehabilitated at Plant l 64,902,000 45,702,099 6,356,400 52,058,499 12,843,501 Sludge Dewatedng and Odor Control at Plant l 171,978,000 48,624,141 51.526,400 100,150,541 71,827,459 Digester Ferric Chloride System Rehabilitation 4,449,000 4,069,536 284,600 4,354,136 S4,864 Plant No.2 Solids Storage Addition 37,604,000 - - - 37,601 Solids Thickening and Processing Upgrades 48,346,000 32,517,589 6,357,000 38,874,589 9,471,411 Plant No.2 Digester Facilities Rehabilitation 47,600,000 152.343 - 152.343 47,667,657 Sludge Dewatering and Odor Control at Plant 2 87,000,000 8,899,067 2,539,400 11438,467 75,561,533 Plant 2 DigesteraBoilere Plant Asset Management Plan 800,000 46,456 176,600 223,056 576.944 Subtotal-Solids Handling&Digestion 462,679,000 140,011,231 67,240,400 207,251,631 255,427,M9 Ocean Outfall Systems Final Effluent Sampler and Building Area Upgrades 14,770,000 2,540,592 580,100 3,120,692 11,649,308 Call Land Section and OOSS Piping Rehabilitation 20,466,000 19,653,161 19,000 19,672,161 793,839 56-Inch Interplant Effluent Pipeline Rehabilitation 72.517,000 - - - 72,517,000 Ocean Oudall System Rehabilitation 48.194.000 37.154 599,700 636.854 47,567,146 Subtotal-Ocean Outfall Systems 155,947,000 22,230,907 1119818M 23429707 132,517,293 bell Systems Cengen Cooling Water System Replacement 11,337,000 11,215,149 35,100 11,250,249 86,751 Cengen Emissions Control Project 24,950,000 3730,169 9.081,800 12,811,969 12,138,031 UPS System Upgrades 3,817,000 - - - 3,817,000 Digester Gas Facilities Rehabilitation 58,755,000 - - - 58,765,000 Electrical Power Distribution System Improvements 12,791,000 - - - 12791,000 Power Monitoring and Control Systems 10,918,000 10,246,090 392700 10,638,790 279,210 Plant Water System Rehabilitation at Plant No.1 8,000,000 3,763,229 3,062,400 6,825,629 1,174,371 (Continued) Section 3-Page 7 FY 2014-15 Second Quarter Report Summary of Capital Improvement Construction Requirements- Project Life For the Six Months Ended December 31, 2014 Current Total Approved June 30,2014 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2015 Budget Utility Systems Plant Water System Rehabilitation at Plant No.2 5,070,000 1,537,043 2,651,600 4,188,643 881,357 Boiler System Rehab&Scrubbers H&I Demolition at Plant 2 3,095,000 1,023,404 1,715.700 2,739.104 355,896 Consolidated Demolition&Utility Improvements at Plant 43,974,000 136,595 439,900 576,495 43,397,505 SCE Feed Reliability Improvements 22,490,000 - - - 22,490,000 Secondary Area Cable Tray Upgrades 2,154000 - - - 2,154,000 Headworks Cable Tray Upgrades 3,015,000 - - - 3,015,000 Digester Gas Facilities Study for Plants 1&2 750,000 420,565 282,800 703,MS 46,635 Utility Water Systems Study 800,000 - 67,700 67,700 732,300 Plant Air System Master Plan 340,000 - - - 340,000 Elaetdcal System Base Map 250,000 - - - 250,000 Sldestmam Pumping System and Water Chore terruation Study 250,000 250,000 Subtotal-Utility Systems 212,756,000 32,072,244 17,729.700 49,801,944 162,954,056 Process Related Special Projects Fall Preferred Improvements at Plants Nos.1 and 2 2,687,000 2,597,617 1,300 2,598,977 88,023 Corrosion Management 28,500,000 8,979,211 451,400 9,430,611 19,069,389 Odor Control Master Plan 1,600,000 772.885 181.900 954.185 645,215 Subtotal-Process Rdatad Spacial Projects 32.787,000 12,349,773 6X 00 12,984,373 19.802,627 Information Management Systems Process SCADA Rsplacement 24,680,000 - - - 24,680,000 Programmable Control Panel Upgrades 3,477,000 12,393 1,026,000 1,03&393 2,438,607 SCADA System and Network Upgrades 27,839,000 - - - 27,839,000 Strategic Information Architecture(SIA) 1,995,000 1,158,338 30g100 1,462,438 532,562 Inlernetlintranst Development 650,000 42,062 107,800 149,862 500,138 Geographic Information System 4,047000 1,387p91 1861800 1,574,291 2,472709 Information Technology Equipment Upgrade 4,148,000 2,862,842 396,400 3,259,242 888758 EAM Software and Process Implementation 6,500,000 3785,651 915700 4,701,351 1,798,649 PDS2D Software Replacement 525,000 284,988 35,400 320,388 204,612 Software and Computer Equipment Replacement Pmject 5,050,000 1,294717 496,400 1,787,117 3,262,883 Process SCADA Link to Pump Stations 271,000 19,083 - 19,083 251,917 Information Technology Master Plan 500,000 500,000 Subtotal-Information Management Systems 79,682,000 10,843,M5 3,468,600 14,312,165 65,369,835 Strategic&Master Planning Facilities-Wide Safety Assessment 930,000 843,928 14,000 857,928 72,072 Landscape&Severity Master Plan 150,000 - - - 150,000 Climate Change Impact Study 100,000 - - - 100,000 Stormwater Master Plan 300,000 - - - 300,000 Treatment Plant Hydraulic Assessment 300,000 - 18,mo 1$goo 281,100 Settlement&Liquefaction Study 700,000 - - - 700,000 Asset Management Program 4,800,000 2,778,183 200 2,778,383 2,021,617 Subtotal-Strategic&Master Planning 7,280,000 3,622,111 33,100 3,655,211 3,624,789 Water Management Projects Effluent Reuse Study 2,800,000 162,300 162,300 2,637.700 Subtotal-Water Management Projects 2,800,000 - 162,300 162,300 2,637.700 (Confirmed) Section 3-Page 8 CIP Budget Review Summary of Capital Improvement Construction Requirements- Project Life For the Six Months Ended December 31,2014 Current Total Approved June 30,2014 Year Projected Remaining Project Accumulated Protected Cost at Future Budget Coat Cost June 30,2015 Budget Support Faeill6es Master Faculties Engineering Projects-Plant 35,228,000 21,111,389 2,671,000 23,782,389 11,4 .611 Master Small Capital Replacement/Rehabilitation-Plant 18,295,000 - 2,428,800 2,428,800 15,866,200 Operations Center EnbrancelBullding Repairs 2,648,000 526,383 - 526,383 2,121.617 Title 24 Access Compliance and Building Rehabilitation Project 17,437,000 3,459,355 5p92,300 8,551,655 8,885,345 South Perimeter Security B Storm Water Improvements at PI 3,005,000 - 274,900 274,900 2,7M,100 Site and Security Improvements at Plant No.2 1,455,000 199,349 26,300 225,649 1,229,351 Public Address System Study 100,000 - - - 100,000 Tunnels Systems Asset Management Plan 20 ,NO - - - 200,000 Plant No.2 Administrative Building Master Plan 3W,000 - - - 300,000 Administrative Facilities Implementation Planning 8W,000 31,927 729,700 761,627 38,373 Ongoing Small Capital Replacement/Rehabilitation 22,088,000 16,758,367 1,684,400 18442,767 3,645,233 Subtotal-Support Facilities 1011556,000 42,086,770 12,907,400 54,994,170 46,561,830 Others Future Research Line Item 10,440,000 1,527,795 352,400 1,880,195 8,559.805 Capital Improvement Program signs.Services 30D000 66,200 66,200 233,800 Subtotal-Others 10,740,000 1,527,795 418.600 1,946,395 8,793,605 Additional Charges to CIP Completed at 6l30114 25,200 25,200 (25,200) Total Treatment and Disposal Projects 2,005,613,000 780,323,107 108.652,600 888.975,701 1,116,637,293 Capital Equipment Purchases 16,004000 4,171,413 2,078,600 6,250,013 9,749,987 Total Collection,Treatment and Disposal Projects and Capital Equipment Purchases $ 2,782,942,838 $874,374,781 $152,000,900 $1,026,375,681 $1,756,M7,157 Section 3-Page 9 FY 2014-15 Second Quarter Report This Page Intentionally Left Blank Section 3- Page 10 Capital Assets Schedule & Debt Service Budget Review Capital Assets Schedule For the Six Months Ended December 31,2014 Capital Facilities Budget Review Balance Year-to-Date Balance O7101/14 Additions 12/31/14 CONSTRUCTION IN PROGRESS: Treatment Plant $ 218,812,539 $ 38,761,022 $ 257,573,561 Collection System 39,206,400 13,988,537 53,194,937 Subtotal 258,018,939 52,749,559 310.768,498 PROPERTY,PLANT 8 EQUIPMENT(at cost): Land and Property Rights 15,959,559 - 15,959,559 Collection Lines and Pump Stations 753,136,534 - 753,136,534 Treatment Facilities 2,220,814,179 - 2,220,814,179 Effluent disposal facilities 97,014,820 - 97,014,820 Solids disposal facilities 3,463,236 - 3,463,236 General and administrative facilities 224,717,092 - 224,717,092 Excess purchase price over book value on acquired assets 19,979,000 19,979,000 Subtotal 3,335,084,420 3,335,084,420 Total Property,Plant B Equipment S CIP $ 3,593,103,359 $ 52,749,559 $ 3,645,852,918 Debt Service Budget Review 201445 Year-to-Date Remaining Budget Payments %of Budget Budget Principal Payments by Debt Issue: 2007A COP 245,000 - 0.00% 245,000 2007B COP 6,450,000 - 0.00% 6,450,000 2008B COP 8.270,000 8.270,000 100.00% - 2009ACOP 3,855,000 - 0.00% 3,855,000 2010A BABs - - N/A - 2010C BABs - - N/A - 2011ACOP 9.055,000 9.055,000 100.00% - 2012A COP - - N/A - 2012B COP - - N/A - 2013ACANs 129,625,000 129,625,000 100.00% - 2014A COP - - N/A - 2014B CAN. N/A Subtotal Principal Payments 157,500,000 146,950,000 93.30% 10,5W000 Interest Expense by Debt Issue: 2007A COP 4,124,194 2,064,139 50.05% 2,060,055 2007B COP 13,162,962 6,648,669 50.51% 6,514,293 2008E COP 630,980 276,880 43.88% 354,100 2009A COP 8,999,175 4,499,588 50.00% 4,499,587 2010A BABs 2,897,639 2,108,289 72.76% 789,350 2010C BABs 6,523,780 4,746,651 72.76% 1,M,129 2011A COP 5,825,450 2,852,375 48.96% 2,973,075 2012A COP 3,735,900 1,867,950 50.00% 1,867,950 2012E COP 3,187,400 1,593700 50.00% 1,593,700 2013A CANS 2,592,500 760,000 29.32% 1,832,500 2014A COP - 2,153,524 N/A (2,153,524) 2014B CANS 526,559 N/A (526,559) Subtotal Interest Expense 51.679,980 30.098,324 58.24% 21,581,656 Total Debt Service $ 209,179,980 $ 177,048,324 84.64% $ 32,131,656 Section 4-Page 1 2014-15 Second Quarter Report This Page Intentionally Left Blank Section 4- Page 2 Self Insurance Budget Review General Liability and Property Fund Budget Review For the Six Months Ended December 31,2014 Percent Actual of Budget Remaining Actual 2014-15 Through Through 2014-15 Through Increase Budget 12/31/14 12/31/14 Budget 12/31/13 (Decrease) Revenues: In-Lieu Premiums $ 500,000 $ 250,002 50.00% $ 249,998 $ 454,500 $ (204,498) Miscellaneous Other Revenue - - N/A - 129,808 (129,808) Service Department Allocations 24,100 2,748 11.40% 21,352 8,748 (6,000) Total Revenues 524,100 252,750 48.23% 271,350 593,056 (340,306) Expenses: Benefits/Claims 120,000 - 0.00% 120,000 55,394 (55,394) Contractual Services 1,200 - 0.00% 1,200 - - Legal Services 75,000 9,578 12.77% 65,422 3,780 5,798 Professional Services 5,000 0.00% 5,000 Subtotal 201,200 9,578 4.76% 191,622 59,174 (49,596) Policy Premium Expense 1,300,000 550,936 42.38% 749,064 544,696 6,240 Total Expenses 1,501,200 560,514 37.34% 940,686 603,870 (43,356) Excess Revenue(Expense) (977,100) (307,764) $ (669,336) (10,814) (296,950) Beginning Reserves 56B74,500 56,802,224 56,904,863 (102,639) Ending Reserves $55, 997,400 $ 56, 994,460 $ 56, 994,049 $ (399,589) Section 5-Page 1 FY 2014-15 Second Quarter Report Workers'Compensation Fund Budget Review For the Six Months Ended December 31, 2014 Percent Actual of Budget Remaining Actual 2014-15 Through Through 2014-15 Through Increase Budget 12/31/14 12/31/14 Budget 12/31/13 (Decrease) Revenues: In-Lieu Premiums $ 755,000 $ 377,500 50.00% $ 377,500 $ 227,500 $ 150,000 Miscellaneous Other Revenue - - N/A - - - Service Department Allocations - - N/A - - - Total Revenues 755,000 377,500 50.00% 377,500 227,500 150,000 Expenses: Benefits/Claims 400,000 301,605 75.40% 98,395 258,260 43,345 Contractual Services - - N/A - - - Legal Services 100,000 42,573 42.57% 57,427 45,390 (2,817) Professional Services 50,000 15,912 31.82% 34,088 23,217 (7,305) Subtotal 550,000 360,090 65.47% 189,910 326,867 33,223 Policy Premium Expense 150,000 111,263 74.18% 38,737 98,933 12,330 Total Expenses 700,000 471,353 67.34% 228,647 425,800 45,553 Excess Revenue(Expense) 55,000 (93,853) $ 148,853 (198,300) 104,447 Beginning Reserves 1,940,900 1,771,820 2,238,580 (466,760) Ending Reserves $ 1,995,900 _L 1,677,967 $ 2,040,280 $ (362,313) Section 5-Page 2 a C�p January 30, 2015 STAFF REPORT Quarterly Treasurer's Report For the Three Months Ended December 31, 2014 SUMMARY Section 15.0 of the District's Investment Policy includes quarterly reporting requirements for the District's two investment portfolios. These two funds, the "Liquid Operating Monies," and the "Long-Term Operating Monies" are managed by Chandler Asset Management, the District's external money manager. The ongoing monitoring of the District's investment program by staff and Callan Associates, the District's independent investment advisor, indicates that the District's investments are in compliance with the District's adopted Investment Policy and the California Government Code, and that overall performance has tracked with benchmark indices. In addition, sufficient liquidity and anticipated revenues are available for the District to meet budgeted expenditures for the next six months. The District's portfolios do not include any reverse repurchase agreements or derivative securities. ADDITIONAL INFORMATION Performance Reports The Quarterly Strategy Review, prepared by Chandler Asset Management, and the Investment Measurement Service Quarterly Review, prepared by Callan Associates, are attached for reference. Also attached are Long-Term and Liquid Operating Monies Summary of Performance Data and Portfolio Statistics charts that depict the performance results, estimated yield and duration, credit quality, and sector diversification of the District's portfolios, as of December 31, 2014. The Liquid Operating Monies portfolio, with an average maturity of 98 days, consists entirely of high quality fixed income investments consistent with the District's investment policy. Portfolio Performance Summary The following table presents a performance summary of the District's portfolios as compared to their benchmarks for the period October 1 through December 31, 2014. OOSD ♦ P.O.Box B12] ♦ Fountain Valley,LA 9292"127 ♦ (914)962-2411 Quarterly Treasurer's Report For the Three Months Ended December 31, 2014 Page 2 of 3 Portfolio Performance Summary Quarter Ended December 31,2014 Liquid Operating Monies %) Long-Tenn Operating Monies ° Total Rate Total Rate of of Return Benchmarks' Return Benchmarks' 3 Months 0.01 0.00 0.55 0.48 6 Months 0.06 0.01 0.50 0.42 9 Months 0.08 0.02 1.27 1.05 12 Months 0.08 0.03 1.99 1.42 Since inception 30 Sept.95 2.94 2.71 4.83 4.50 Market Value 56SM $433.5M Average Quality "AA." "AA." current Yield(%) 0.8 1.0 Estimated Yield to Maturity(%) 0.2 0.8 Quarterly Deposits(Withdrawals) $23.OM $115.3M Estimated Annual Income $0.1M $3.6M (1) Benchmarks: • Liquid Operating Portfolio: 3-Month Treasury Bill Index • Long-Teml Operating Portfolio: Merrill Lynch Corp/Govt. 1-5 Year Bond Index Portfolio Market Values Comparative marked-to-market quarter-end portfolio values are shown in the following table, and in the attached bar chart. Liquid Long-Term Quarter Operating Operating Ending Monies($M) Monies($M) 31 Mar.14 50.9 439.2 30 Jun.14 85.9 506.2 30 Sep.14 58.9 461.E 31 Dec.14 56.9 433.5 District's Investment Account Balances as of December 31, 2014 Book Balances Estimated Investment Accounts December 31, 2014 Yield(%) Slate of Calif.LAIF $ 44,959,671 0.27 Union Bank Checking Amount 61,302 0.01 Union Bank Overnight Sweep Account 65,000 0.00 Union Bank W/C Checking 60,878 0.00 Chandler-Short-term Portfolio 56,802,024 0.24 Chandler-Long-term Portfolio 433,131,815 0.82 Petty Cash 3,000 N/A BNY Mellon OCIP Reserve 3,606,861 0.37 TOTAL $53A fi9O551 0.71 Debt Service Reserves w/Tmstees $4327.5 447 1.33 Quarterly Treasurer's Report For the Three Months Ended December 31, 2014 Page 3 of 3 District's Cost of Funds on Debt Issues as of December 31,2014 Annual Cost of Funds Outstanding Interest Issue Description COP Balance Raw(%) 2007A Fixed $92,385,000 4.50 2007B Fixed 173,325,000 4.71 2008B Fixed 17,315,000 296 2009A Fixed 184,090,000 4.72 2010A Fixed 80,000,000 3.68 2010C Fixed 157,000,000 4.11 2011A Fixed 121,290,000 2.61 2012A Fixed 100,645,000 3.54 2012B Fixed 66,395,000 1.50 2014A Fixed 85,090,000 2.34 2014B Fixed 120,850.000 0.35 TOTAL $L198385.000 Weighted Avg.Cost of Funds 3.43 ATTACHMENTS 1. Historical Yield Curve Graph 2. Chandler Quarterly Report 3. Quarter End Portfolio Market Value Bar Chart 4. Summary of Performance Data and Portfolio Statistics— Liquid Operating Monies 5. Summary of Performance Data and Portfolio Statistics — L-T Operating Monies 6. Investment Transactions and Balances in LAIF 7. Asset Summary by Asset Type— Liquid Operating Portfolio 8. Asset Summary by Asset Type— Long Term Portfolio 9. Asset Summary by Asset Type — Owner Controlled Insurance Program Escrow Account 10. Investment Listing (Yield Analysis Report). 11. Asset Detail — Consolidated 12. Custody Transaction History -- Consolidated 13. Callan Quarterly Review 14. Chandler Quarterly Review 15. Rating Agency Comparisons HISTORICAL YIELD CURVE 4.00% DEC 14 tSW 14 2.75% 2.00% -._._______...._._..----.._. 2.17 1.97% 107% 1.65% 0.12% 0.04% 0.00% a%m% �Ja 3h ah h 'Oh 3ph C/" CHANDLER AWE MANAGEMENT December 31,2014 Mr. Mike White, CPA Controller Orange County Sanitation District 10844 Ellis Avenue Fountain Valley CA 92708-7018 Dear Mike, Bond Market Recap The December employment report was somewhat mixed. Nonfarm payrolls rose by 252,000 in December, following strong gains of 353,000 and 261,000 in November and October, respectively. The unemployment rate also declined to 5.6% from 5.8%. However, wages declined 0.2% in December and the labor participation rate also fell to 62.7% from 62.9%. The manufacturing sector continues to show strength and consumer confidence was high heading into 2015. We believe low gas prices should provide an ongoing tailwind for consumer spending. Meanwhile, housing data remains volatile in spite of ongoing low mortgage rates. Overall, we believe the economy continues to grow at a modest pace and the labor market continues to expand. However, we believe weakness in wages and the labor participation rate in December leaves the door open for the Fed to be patient with policy rate changes. The Federal Open Market Committee (FOMC) left policy rates unchanged at its final meeting of 2014. The FOMC indicated that it will take a "patient" approach toward normalizing monetary policy, and implied that the first rate hike is likely to be in (or around) mid-2015 based on the Fed's economic forecasts. Overall, the FOMC's guidance on policy action was consistent with its previous guidance, but the Committee is moving away from its "considerable time" language and emphasizing that policy changes will be data-dependent. During her post-meeting press conference, Fed Chair Yellen indicated that policy rates would likely remain unchanged for at least the next couple of FOMC meetings. This suggests that a rate hike is unlikely to happen any sooner than April, unless there is an unexpected change in economic data. The Committee also expects the fed funds rate to approach a more normalized level by the end of 2017, which suggests that any rate increases are likely to be gradual over the next few years. We expect FOMC members will continue to debate the appropriate timing of the first fed funds rate hike when they meet again on January 27-28, 2015. During the past three months, the yield curve flattened. Concerns about weak global economic growth kept downward pressure on longer US Treasury yields, even as the Fed signaled the possibility of a fed funds rate hike this year. Consumer Prices In November, overall Consumer Price Index (CPI) inflation declined to 1.3% on a year-over-year basis from 1.7% in October. The year-over-year Core CPI (CPI less food and energy) also declined to 1.7% in November from 1.8% in October. 6225 Lusk Boulevard I San Diego,CA 92121 1 Phone 800.317.4747 1 Fax 858.546.3741 1 chandlerasset.com C/" CHANDLER AWE MANAGEMENT Retail Sales In November, retail sales rose 5.1% on a year-over-year basis versus a gain of 4.5% in October. On a month-over-month basis, retail sales rose 0.7% in November after increasing 0.5% in October, exceeding expectations. Gasoline sales were a drag on retail sales in both months due to lower prices. Overall, consumer spending is showing positive momentum. Labor Market Nonfarm payrolls rose by 252,000 in December (above the consensus forecast of 245,000), following gains of 353,000 and 261,000 in November and October, respectively. The net revisions in nonfarm payrolls for November and October were +50,000. The unemployment rate declined to 5.6% from 5.8%. Private payrolls rose by 240,000 in December, while government jobs rose by 12,000. Meanwhile, the labor participation rate declined to 62.7% from 62.9%. Wages also decreased 0.2%, versus expectations for a 0.2% increase. Housing Starts Housing data remains volatile. Single-family housing starts fell 5.4% in November after increasing 8.0% in October. TREASURY YIELDS 1213112014 913012014 CHANGE 3 Month 0.04 0.02 0.02 2 Year 0.67 0.57 0.10 3 Year 1.07 1.04 0.03 5 Year 1.65 1.76 (0.11) 7 Year 1.97 2.20 (0.23) 10 Year 2.17 2.49 (0.32) 30 Year 2.75 3.20 6225 Lusk Boulevard I San Diego,CA 92121 1 Phone 800.317.4747 1 Fax 858.546.3741 1 chandlerasset.com C/" CHANDLER ASSET MANAGEMENT ECONOMIC INDICATOR Current Release Prior Release One Year Ago Trade Balance (39.0)$Bln NOV 14 (42.2)$Bin OCT 14 (36.0)$Bln NOV 13 GDP 5.0% SEP 14 4.6%JUN 14 4.5%SEP 13 Unemployment Rate 5.6% DEC 14 5.8% NOV 14 6.7% DEC 13 Prime Rate 3.25% DEC 14 3.25%NOV 14 3.25% DEC 13 CRB Index 229.96 DEC 14 254.37 NOV 14 280.17 DEC 13 Oil (West Texas Int.) $53.27 DEC 14 $66.15 NOV 14 $98.42 DEC 13 Consumer Price Index 1.3% NOV 14 1.7% OCT 14 1.2% NOV 13 WON) Producer Price Index 1.1% NOV 14 1.7% OCT 14 0.8% NOV 13 WON) Dollar/EURO 1.21 DEC 14 1.25 NOV 14 1.37 DEC 13 Performance Attribution Long-Term Portfolio The Long-Term portfolio modestly outperformed the benchmark during the quarter, generating a return of 0.55% versus a return of 0.48% for the Bank of America Merrill Lynch 1-5 Year AAA-A US Corporate and Government Index. Corporate spreads underperformed during the quarter and the portfolio's underweight allocation to the sector added to results. The portfolio's exposure to Treasury Inflation Protection securities detracted from results as break even spreads continue to narrow with the drop in long -term inflation expectations. Liquid Portfolio The Liquid portfolio tracked the performance of the benchmark during the quarter, generating a quarterly return of 0.01%versus the 0.00% return for the Bank of America Merrill Lynch 3-Month Treasury Bill Index. The inclusion of securities with higher yields aided the performance of the portfolio during the quarter. 6225 Lusk Boulevard I San Diego,CA 92121 1 Phone 800.317.4747 1 Fax 858.546.3741 1 chandlerasset.com C'" CHANDLER ASSET MANAGEMENT Economic Outlook We expect GDP growth between 2.5-3.0% in 2015, a slight uptick from growth in 2014. The drop in commodity prices, particularly oil, will in the long-run prove to be stimulative to the US economy. Long - run inflation expectations have come down and the Federal Reserve will be challenged to start the rate normalization process in the first half of 2015. Recently markets have been volatile and one of the contributing factors is global central banks surprising markets; we expect the surprise element emanating from central banks to remain high throughout the year. Outside of the US several large central banks are engaging in unconventional policies to depreciate currency valuations in an attempt to stimulate export growth. On the other hand, the Federal Reserve ceased Quantitative Easing in October 2014 and is trying to determine the appropriate timing to begin the process of normalizing monetary policy. The potential tightening of policy by the Federal Reserve is adding to the strength of the dollar and will continue to support current valuations of longer-term Treasury yields in the short-term. Strateav Strategy highlights for the Lang-Term Portfolio in the coming months: • Reduce exposure to securities with maturities in excess of five years to reposition the portfolio to be more consistent with a 1-5 year strategy. • Reduce exposure to select Corporate securities to modify the concentration levels specific to the Corporate allocation. • Increase exposure to high quality Corporate securities in the Industrial and Finance sectors predominately with maturities in the three to five year range. • Build out the ABS allocation to be in excess of 7.0% of the portfolio. • Build out a more optimal Commercial Paper allocation to coincide with potential liquidity needs. Strategy highlights for the Liquid portfolio in the coming months: • Build out a more optimal allocation to the Commercial Paper sector to increase the yield of the portfolio. • Ladder the Agency Discount Note exposure to coincide with upcoming liquidity needs to increase the earnings potential of the portfolio. • Maintain a dedicated allocation to the US Treasury sector of close to 20.0%of the portfolio. 6225 Lusk Boulevard I San Diego,CA 92121 1 Phone 800.317.4747 1 Fax 858.546.3741 1 chandlerasset.com C/" CHANDLER ASSET MANAGEMENT Compliance Issues C/" Orange County Sa nation 04trict Long Term December31,2014 COMPLIANCE WITH INVESTMENT POLICY Assetsmanaged byChmidlerAsaetManagement ere in Nbmn4*anoe wM Ste4lawmd won Le/mesanentpoary Category Standard Comment Tmasurylssues 5yearsmaxirrnmrnebrity Does not mmW Supenebmel 'AA'a beCer by l of3 PRSRDs; 30%maximim; 5%mex; 5 Complies years mahm , Irides only,. NDB,BRD,and FC perCGC US. les 20%max lssrar5 years maximum maturityCan LLS.Corporate(MM) W or better long term rating by l of3 NRSROs; 30%maxinam; Doesniotcorngly 5%max issuer. 5 yeems mu maturity Municipal Securities W ahigher by l of3 NRSROS;10%maximum; 5%max issuer, Doeswtcomy 5 rsmaumnm Assel Backed/CMOs/ 'AA'or better by l of3 NRSROs; •A•orhigherisaarrating by l Does rolcanply Moniagebacked of3 NSROs; 20%maimm; 5%max issuer(coclding 10113SIgmt agencyX 5 years mmc maturity Negobat*e CDs W or bederon its log tem debt by l of3 NSRDs; 'A11PI"or Complies highest shod tarn ratings by 1 of 3 NFtSRDs; 30%mmemm;5% max issuer 5 years max makwity CDs/TDS 5%max issuer, 5 years max makrily Can es BaNmVaAcceplenres A-1,or egavwet highest shod term rating by I of3 MSROS; Caopties 40%maxinnm; 5%max issuer 180 der max mattalty Commemial Paper A-1,a egavalent by l of3 NFSFlOS,, W or beaerby l of3 Complies NFSREK if"term debtissued; 25%nadmurg 596max isa sr. 270 days me t matidly Money MarketFud Hgheslmtlngby2of3NSROs; 20%madmlm;110%maxbaar Canpkes Re se eme 102%coleteretiaetion CCaann ees Reverse ReFerchase Complies Agreements LAF Nctused hMmhnmlelvlser Can es A Duration Notbexeeed80maea - to 120%o/le benchmark) Maxinan Mc s 5 years maxirmmrnandb Doesmotcom4N •tl emuer mu m>oaNes sus SYrua. Se[uala mae•rierlMa fan paaae merear. ^Ala,MWend CMOpmi w mammrmmum5yeasmESVHE(CL MilMC51)bu AH mrpslWjb/UPexi FLh. Lone se[ulYe.fta awn pe mmmg. 6225 Lusk Boulevard I San Diego,CA 92121 1 Phone 800.317.4747 1 Fax 858.546.3741 1 chandlerasset.com C/" CHANDLER AWE MANAGEMENT Defaulted Bonds r' OCSD Lehman Expomra Holdngs Report Accouniw102e4 As41Y3144 ..Ux. SLNOPNTM Lemmen BMhe,e,lncOm Pmxm +w /A1". 11a14 i0a,e1]SO 0. 44,2V 28 1202% NFINF 0. LonA frpoeU, OOIY 10481250 000% 0M 00529]2) NP OW 100.84.5n 90.361.39 12.02% NRIn0. Y9 IDNI Common Sbcx 59MRM XM 100.e4.50 0.00% 0.00 (60,520SA NN XM 115<ONeoxxo 525ESCIB7 Lehm en BMhe,e Nde v*SAM M. OLY9/NIN 4W,504 B3 1275 75$0000 2077% NP INP OW Due 1L4 015 0.% 4065w03 000% 000 (330 104 5 NN A 525E$AY6 Lehman 9MFer eblal ;®,1mID 1bbi1116 12Y 24 000 67ID% NRfN 3103 Oue 10/QRw9� Om% 1.36671111 0M% L00 0,119,21 S06 NR 0W 1J1],]21.19 ]21,000.00 91.ee% NNINN 2Ae2 }feyeeY 0.00 L1,1f9,]21.i91am eae 1,e1e,13eS8 360,2e3Se 100.00% NNINN a]. TOTALPOUFOL10 X, .Y NM 1,6i6,13all 0.00% 0.00 0,509,053.01) N0. AM TOTAL WRKEi VPW E PLUS ACCRUED ]6g2e1.2e 6225 Lusk Boulevard I San Diego,CA 92121 Phone 800.317.4747 Fax 858.546.3741 I chandlerasset.com C/" CHANDLER ASSET MANAGEMENT Ratings Orange County Sanitation District Long Term Decemioer31,2014 vs. Novemioer30,2014 ■ ,mw • oAau AAA AA A G as I=.. 20.1% 714% 69% 08% 08% 11*044 181% 074% 11.1% 1.7% 1.1% sw w0ap Orange County Sanitation District Liquid December 31,2014 vs. Novenn er 30,W14 wo% wo% wo% UA% EM AO% A% AM M / M ,MNI • nyu AAA AA A M 1Nfm4 0.0% 10.e% 140% 0.0% 00% 19Ary4 17.1% NB% 181% 00% 0.0% Bwo.W eler 6225 Lusk Boulevard I San Diego,CA 92121 Phone 800.317.4747 1 Fax 858.546.3741 chandlerasset.com C/" CHANDLER ASSET MANAGEMENT OCSD Investment Management Program Quarter End Portfolio Values $600,000.000 Liquid Operating Monies $500,000.000 .Long-Term Operating Monies $400,000,000 $300,000,000 $200,000,000 $100,000,000 $- 6225 Lusk Boulevard I San Diego,CA 92121 Phone 800.317.4747 Fax 858.546.3741 chandlerasset.com C/" Orange County Sanitation District Liquid Portfolio Summary Account#10282 As of 12/31/2014 PORTFOLIO CHARACTERISTICS ACCOUNT •- Beg.Values End Values Issuer %Portfolio Average Duration 0.27 as of 11/30/14 as of 12/31/14 Federal Home Loan Bank 19.2% Average Coupon 0.79% Market Value 33,836,960 56,805,133 Federal Home Loan Mortgage Corp 17.2% Average Purchase VTM 0.17% Accrued Interest 84,599 118,210 Federal National Mortgage Assoc 14.5% Average Market VTM 0.24% Total Market Value 33,921,559 56,923,342 Government of United States 11.3% Average S&P/Moody Rating AA+/Aal Income Earned 8,175 3,448 Drefus Treasury MMKT FD 521 7.9% Average Final Maturity 0.27 yrs COnt/2VD 23.000,000 Federal Farm Credit Bank 7.1 % Average Life 0.24 yra Par 33,800,992 56,699,424 Caterpillar Inc 3.5% Book Value 33.837,934 56.807,771 General Electric Cc 1.8% I Cost Value 33,963,087 56,935,854 82.5 Money 80% AA Markel (756 Fun FI E_ US_______ 428% (7.9%) Corporate 80% (185%) Commercial _ w% Paper (4 4%) 1021.3% 19.•% US AAA Agency (11 3%) (58.0%) 0-.29 .25-.9 .5.1 1-15 1.5-2 2-2.5 2.5-9 9• A Chandler Asset Management-CONFIDENTIAL Page 1 Uaec don Time:1Rc!0152:54:14 PM C/" Orange County Sanitation District Long Term Portfolio Summary Account#10268 As of 12/31/2014 PORTFOLIO CHARACTERISTICS ACCOUNT •- Beg.Values End Values Issuer %Portfolio Average Duration 2.12 as of 11/30/14 as of 12/31/14 Government of United States 38.1 % Average Coupon 1.06% Market Value 317,655,389 432,707,879 Federal Home Loan Mortgage Corp 11.3% Average Purchase VTM 0.95% Accrued Interest 1,226,525 825,647 Federal Home Loan Bank 9.4% Average Market VTM 0.82% Total Market Value 318,881,915 433,533,526 Federal National Mortgage Assoc 8.5% Average S&P/Moody Rating AA+/Aal Income Earned 452,915 314,775 Drefus Treasury MMKT FD 521 8.5% Average Final Maturity 2.67 yrs COnffWD 115.277,589 Bank of America Corp 1.9% Average Life 2.38 yrs Par 309,796,022 427,371,498 Honda Motor Corporation 1.8% Book Value 312.718,372 429.390,244 Exxon Mobil Corp 1.8% I Cost Value 313,553,463 430.400,822 81.3 US 50% AA Cgporate (71 u of Treasury 41.7% Municipal Treasury Bons (38.1 %) 4p% BBB (3.8%) (0.8%) Money 30% Marken 26A% MR Fun ABS I (0.8%) MSS 20% A (1.3%) 10.7% (8.9%) Commercial 10% 7.6% 5.5% Paper 22% 3.7% 3.3% (8.2%) A9•noy % CMO (27'7%) 0-.6 .5-1 1-2 2.3 3-6 64 7-10 1M AAA (0.6%) mffw ry(yrs) (20.1%) Chandler Asset Maregemem-CONFIDENTIAL Page 1 ExacWon Tima1R=152:52:21 PM Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund December 31, 2014 Par Value Book Value Market Value Rate Yield Balance December 1, 2014 $30,759,671 $30,759,671 $30,759,671 0.27 0.27 Deposits: 12/4/2014 19,000,000 19,000,000 19,000,000 0.27 0.27 12/18/2014 4,000,000 4,000,000 4,000,000 0.27 0.27 Total Deposits 23,000,000 23,000,000 23,000,000 0.27 0.27 Withdrawals: 12/10/2014 (4,600,000) (4,600,000) (4,600,000) 0.27 0.27 12/23/2014 (1,400,000) (1,400,000) (1,400,000) 0.27 0.27 12/29/2014 (2,800,000) (2,800,000) (2,800,000) 0.27 0.27 Total Withdrawals (8,800,000) (8,800,000) (8,800,000) 0.27 0.27 Balance December 31, 2014 $44,959,671 $44,959,671 $44,959,671 0.27 0.27 Report ID: GL8251 Asset Summary Bare Cturener: Can i BNY MELLON by Asset Type with Sectors Alternate eaxe Cwren�. h..&RaW Exceage ete: OCS LNQ OF CHANDLER-OCSF07511102 12 31 2014 Status: FINAL Net Unrealized bE Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base CASH&CASH EQUWALENTS U.B.DOLLAR COMMERCIAL PAPER-DISCOUNT 2,500,000.000 2,498,210.28 2,498,210.28 4.39% 0.00 FEDERAL HOME LOAN BANK- 1 YR OR LESS 7,400,000.000 7,398,892.98 7,399,000.99 13.00% 108.01 FEDERAL HOME LOAN MORTGAGES- 1 YR OR LESS 7,800,000.000 7,799,190.19 7,799,190.19 13.70% 0.00 FNMA ISSUES- I YR OR LESS 200,000.000 199,984.31 199,984.31 0.35% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 4,508,424.350 4,508,424.35 4,508,424.35 7.92% 0.00 U.S.TREASURY BILLS- 1 YR OR LESS 2,500,000.000 2,499,978.89 2,499,978.89 4.39% 0.00 PENDING TRADES -4,008,030.08 -4,008,030.08 -7.04% 0.00 INTEREST 127,604.00 127,604.00 0.22% 0.00 U.S.DOLLAR 24,908,424.350 21,024,254.92 21,024,362.93 36.93% 109.01 CASH&CASH EQUIVALENTS 24,908,424.350 21,024,254.92 21,024,362.93 36.93% 108.01 FIXED INCOME SECURITIES U.S.DOLLAR BANKING&FINANCE 7,162,000.000 7,247,472.90 7,182,440.14 12.62% -65,032.76 CHEMICALS 387,000.000 401,539.59 390,908.70 0.69% -10,630.89 FOOD BEVERAGE&TOBACCO 1,238,000.000 1,272,538.24 1,239,287.52 2.18% -33,250.72 HEALTHCARE 604,000.000 626,967.92 609,158.16 1.07% -17,809.96 INDUSTRIAL 1,000,000mo 1,003,280.00 1,003,180.00 1.76% -100.00 RETAIL 1,000,000.000 1,001,340.00 1,001,670.00 1.76% 330.00 TECHNOLOGY 1,000,000.000 1,001,880.00 1,001,750.00 1.76% -130.00 US AGENCIES 17,500,000.000 17,578,172.00 17,573,790.00 30.87% -4,382.00 US GOVERNMENTS 5,900,000mo 5,904,528.66 5,903,081.00 10.37% -1,447.66 U.S.DOLLAR 35,791,000.000 36,037,719.31 35,905,269.52 63.07% -132,453.79 FIRED INCOME SECURITIES 35,791,000.000 36,037,719.31 35,905,265.52 63.07% -132,453.79 TOTAL ASSETS-BASE: 60,699,424.350 57,061,974.23 56,929,628.45 100.00% ,132,345.79 111412015 1:35:35PM EST 1 Workbench Asset Summary Report ID: GL8251 Base Currenry: Can BNY MELLON by Asset Type with Sectors Alteesa[e Base Currency: Exchange Rate: OCS LONG clnrvnLER-OCSFO7522202 12 31 2014 Status: FINAL Net Unrealized Cost Market Value % of Gain/Loss Description shares Per Base Base Total Base CASH&CASH EQUWALENTS U.B.DOLLAR CASH EQUIVALENTS 104,812.500 104,812.50 44,283.28 0.01% -60,529.22 COMMERCIAL PAPER-DISCOUNT 35,WO,000.000 35,576,348.26 35,576,348.26 8.20% 0.00 FEDERAL HOME LOAN BANK- I YR OR LESS 40,700,000.000 40,693,930.70 40,695,050.14 9.38% 1,119.44 FEDERAL HOME LOAN MORTGAGES- 1 YR OR LESS 46,300,000.000 46,290,667.67 46,290,667.67 10,67% 0.00 FNMA ISSUES- 1 YR OR LESS 27,900,000.000 27,893,261.28 27,893,261.28 6.43% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 36,737,426.570 36,737,426.57 36,737,426.57 8.46% 0.00 PENDING TRADES 2,264.75 2,264.75 0.00% 0.00 INTEREST 908,128.35 908,128.35 0.21% 0.00 U.S.DOLLAR 189,342,239.090 188,206,840.08 188,147,430.30 43.35% -39,409.78 CASH&CASH EQUIVALENTS 187,342,239.070 188,206,840.08 188,147,430.30 43.35% -59,40998 FIXED INCOME SECURITIES U.S.DOLLAR ASS-HOME EQUITY 379,816.450 322,112.04 367,689.99 0.08% 45,599.95 ASS-SMALL BUSINESS ADMINISTRATION 178,711.650 178,711.65 192,168.64 0.04% 13,456.99 ABS-STUDENT LOANS 50,415.520 50,210.97 51,909.76 0.01% 1,568.79 AUTOMOBILES&COMPONENTS 5,200,000.000 5,200,000.00 5,209,984.00 1.20% 9,9M.00 BANKING&FINANCE 31,000,000.000 32,768,810.58 30,978,569.10 9.14% -1,790,241.48 CAPITAL GOODS 1,200,000.000 1,204,956.00 1,207,116.00 0.28% 2,160.00 COLLATERALIZED MORTGAGE OBLIGATION COMM/( 334,110.690 334,972.07 334,668.65 0.08% -303.42 FHLMC MULTICLASS 2,210,007.120 2,422,385.03 2,476,503.43 0.570% 54,118.42 FHLMC POOLS 2,844.750 2,995.42 2,950.66 0.00% 195.24 FNMA POOLS 2,581,137.040 2,716,225.86 2,829,987.40 0,65% 113,761.54 FNMA REMIC 1,124,617.550 1,126,334.61 1,134,447.31 0.26% 8,112.70 FOOD BEVERAGE&TOBACCO 1,600,000.000 1,854,144.00 1,802,608.00 0.42% -51,536.00 GNMA MULTI FAMILY POOLS 319,594.350 319,601.87 331,663.07 0.08% 12,061.20 GNMA REMIC 62,976.580 62,776.58 63,252.43 0.01% 475.85 HEALTHCARE 5,300,000.000 5,327,727.00 5,372,180.00 1.24% 44,453.00 INSURANCE 500,000.000 499,630.00 508,615.00 0.12% 8,985.00 OIL&GAS 4,000,000.000 3,979,200.00 3,975,280.00 0,92% -1,920.00 REITS 1,000,000.000 996,050.00 1,098,050.00 0.25% 102,000.00 111412015 1:38:52PM EST 1 Workbench Asset Summary Repoft ID: G1,8251 Base Cunenry: Gan BNY MELLON by Asset Type with Sectors Altecsate sass cvreency: Exchange Rate: OCs LONG CHANDLER-OCSF07S22202 12 31 2014 Status: FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base TAXABLE MUNICIPALS 13,640,000.000 13,767,026.89 16,300,279.00 3.76% 2,533,252A1 U.S.TIPS 13,704,536.000 13,594,694.71 13,235,325.91 3.05% -359,368.80 US AGENCIES 5,000,000.000 5,021,500.00 5,012,400.00 1,15% -9,100.00 US GOVERNMENTS 151,700,000.000 151,589,152.48 151,748,813.00 34.96% 159,660.52 UTILITY-ELECTRIC 1,000,000.000 999,810.00 1,010,890.00 0.23% 11,080.00 WHOLE LOAN-CMO-COLLATERALIZED MTG OBLIG 645,503.870 645,500.93 647,291.92 0.15% 1,790.99 U.S.DOLLAR 242,734,071.570 244,982,308.69 245,892,513.29 56.65% 910,204.60 FIRED INCOME SECURITIES 242,734,071.570 244,982,308.69 245,892,513.29 56.65% 910,204.60 TOTAL ASSETS-BASE: 430,076,310."0 433,199,148.77 434,039,943.59 100.00% 950,794.82 111412015 1:38:52PM EST 2 Workbench Asset Summary Repot ID: GL8251 Base Curtenry: USD BNY MELLON by Asset Type with Sectors Altecsate sass cvreency: Exchange Rate: ESCROW ACCOUNT-OCSFOT555SO2 12 31 2014 Status: FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares par Base Base Total Base CASH&CASH EQUIVALENTS U.S.DOLLAR INTEREST 4,020.84 4,020.84 0.11% 0.00 FIXED INCOME SECURITIES U.S.DOLLAR US GOVERNMENTS 3,594,000.000 3,603,596.33 3,596,264.22 99.89% -7,332.11 TOTAL ASSETS-BASE: 3,594,000.000 3,607,617.17 3,600,295.06 I00.00h -7,332.11 111412015 1:44:54PM EST 1 Workbench Yield Analysis Report ID: RAM234 Base Currency: TINY MELLON OCSF07511102 12/31/2014 Liquid Oper-Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj Rating Value Duration CASH &.TEMPORARY Sum o(Acmuut Receivables - 0.00 SUMRECV -3,880,426 AGENCY 200,000.00 FEDERAL NATL MTG ASSN DISC 0.02 Aaa 100.00 199,984 1.06 0.06 313588AV7 MAT01/20/2015 199,984 0.35 900,000.00 FEDERAL HOME LN MTG CORP DISC 0.12 Ana IM.00 899,919 4.76 0.02 313396AM5 0.000%01/12/2015 DO 01/13/201 899,919 1.58 COMMERCIAL PAPER 700,000.00 FEDERAL HOME LN BK CONS DISC 0.02 Aaa 100.00 699,885 3.00 0.05 313384AY5 MAT01/23/2015 699,993 1.23 4,200,000.00 FEDERAL HOME LN BK CONS DISC 0.02 Aaa 100.00 4,199,269 22.22 0.09 313384BN8 MAT 02/06/2015 4,199,269 7.38 1,000,000.00 PACCAR FINL CORP DISC 0.19 P-1 999,889 5.29 0.06 69372BNM8 01/21/2015 999,889 1.96 1,000,000.00 BANK TOKYO-MITSUB DISC - P-1 999,720 5.29 - 06538CNW9 01/30/2015 999,720 1.96 500,000.00 PNC BANK N A DISC - P-1 498,601 2.64 - 69349KW22 09/02/2015 498,601 0.88 OTHER 4,508,424.35 DREYFUS TREAS&AGY CSH CSH MG - Aaa 4,508,424 23.86 0.08 996085247 VAR RT 12/31/2049 DD 04/09/97 4,508,424 T92 TREASURIES AND AGENCIES 0 111412015 1:49:03PM EST 1 Source:The Bouck fNew York Meilan Communion Yield Analysis Report ID: RAM234 Base Currency: Ban TINY MELLON OCSF07511102 12/31/2014 Liquid Oper-Pim<o Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) Yield Quality Price Market Value %Market Adj Rating Value Duration 2,500,000.00 FEDERAL HOME LN BE CONS DISC 0.01 Aaa 100.00 2,499,739 13.23 0.07 313384BDO MAT01/28/2015 2,499,739 4,39 4,000,000.00 FEDERAL HOME LN MTG CORP DISC 0.01 Aaa 100.00 3,999,717 21.16 0.09 313396BD4 MAT01/28/2015 3,999,717 7.03 900,000.00 FEDERAL HOME LN MTG CORP DISC 0.06 Aaa 99.98 899,718 4.06 0.34 313396DU4 MAT 04/01/2015 899,718 1.58 TREASURY 2,500,000.00 U S TREASURY BILL 0.02 Aaa 100.00 2,499,979 13.23 0.04 912796EPO OM00%0 1/15/2015 DO 07/19/14 2,499,979 4.39 US CASH 1.00 USE,(UNITED STATES DOLLAR) - - 0 0.00 - NA9123459 GL PAYABLES RECEIVABLES 0 0.00 TOTAL:CASH&TEMPORARY 0.05 0.00 22,904,844 300.00 0.10 19,024,526 FIXED INCOME AGENCIES&OTHER GOUT OBL 2,000,000.00 FEDERAL HOME LN MTG CORP DISC 0.02 Aaa 100.00 1,999,837 5.26 0.05 313396AY9 0.000%01/23/2015 DO 01/23/201 1,999,837 3.51 2,000,000.00 FEDERAL NATL MTG ASSN 0.16 0.37 Aaa 100.04 2,001,040 5.26 0.21 3135GOHG1 0.375%03/16/2015 DO 02/06/12 2,000,880 3.51 2,000,000.00 FEDERAL HOME LN MTG CORP 0.18 0.50 Aaa 100.10 2,002,184 5.26 0.29 3137EADD8 0.500%04/17/2015 DO 02/21/12 2,001,900 3.52 2,000,000.00 FEDERAL NATL MTG ASSN 0.22 0.50 Aaa 100.11 2,002,740 5.26 0.41 3135G0KM4 0.500%05/27/2015 DO 04/19/12 2,002,240 3.52 111412015 1:49:03PM EST 2 Sou¢ Ma BakofNeu,York Jlf, an Corporaran Yield Analysis Report ID: RAM234 Base Currency: Ban TINY MELLON OCSF07511102 12/31/2014 Liquid Oper-Pim<o Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market AQj Rating Value Duration 2,000,000.00 FEDERAL FARM CR BK CONS BD 0.23 0.50 Aaa 100.13 2,003,400 5.27 0.48 3133EARQ3 0.500%06/23/2015 DO 05/23/12 2,002,580 3.52 2,000,000.00 FEDERAL NATL MTG ASSN 0.26 1.98 Aeo 101.25 2,025,660 5.32 0.92 31398A3T9 2.000%09/21/2015 DO 09/21/10 2,025,060 3.56 1,500,000.00 FEDERAL HOME LN BK CONS BE, 0.28 1.93 Aaa 101.02 1,515,240 3.98 0.69 31337OJB5 1.950%09/11/2015 DO 08/04/10 1,515,330 2.66 2,000,000.00 FEDERAL FARM CR BE CONS BD 0.30 1.48 Aaa 101.05 2,021,180 5.31 0.80 31331J2S1 1.500%11/16/2015 DO 11/15/10 2,021,000 3.55 2,000,000.00 FEDERAL NATL MTG ASSN 0.31 0.50 Aaa 100.09 2,003,408 5.26 0.50 3135GOLNI 0.500%00/02/2015 DO 05/21/12 2,001,860 3.52 2,000,000.00 FEDERAL HOME LN BK CONS BE, 0.33 0.50 Aaa 100.15 2,003,320 5.27 0.88 31338OL96 0.500%11/20/2015 DO 08/23/12 2,002,940 3.52 SARRS is FDIANCE 1,008,000.00 JOHN DEESE CA AL CORD 0.28 0.90 A2 100.28 1,009,341 2.66 0.69 24422ERVS 0300%09/04/2015 DO 09/09/12 1,010,822 1.98 1,000,000.00 CATERPILLAR FINANCIAL SERVICES 0.33 1.10 A2 100.32 1,003,340 2.64 0.41 14912L5D9 L100%05/29/2015 DO 05/30/12 1,003,170 1.76 1,000,000.00 GENERAL ELECTRIC CAPITAL CORP 0.39 1.61 Al 100.63 1,005,820 2.65 0.50 36962G5Z3 1.625%09/02/2015 DO 09/02/12 1,006,280 1.79 653,000.00 CREDIT SUISSE USA INC 0.52 4.89 Al 100.19 672,465 1.02 0.04 225411AR4 4.875%01/15/2015 DO 12/15/04 654,104 1.15 1,000,000.00 CHARLES SCHWAB CORP/THE 0.61 0.85 A2 100.22 1,002,700 2.64 0.92 808513AH8 0.850%12/04/2015 DO 12/06/12 1,002,180 1.96 111412015 1:49:03PM EST 3 Sou¢ M,B¢Nc. fNew York Mellon Corporaran Yield Analysis Report ID: RAM234 Base Currency: Ban TINY MELLON OCSF07511102 12/31/2014 Liquid Oper-Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj Rating Value Duration 645,000.00 BANK OF NEW YORK MELLON CORP/T 0.95 1.20 Al 100.03 649,160 1.90 0.14 06406HCC1 1.200%02/20/2015 DD 02/21/12 645,213 1,13 624,000.00 WACHOVIA BANK NA 1.13 4.86 Al 100.31 643,635 1.65 0.08 92996GAD3 4.875%02/01/2015 DD 01/31/05 625,934 1.10 599,000.00 CITIGROUP INC 2.20 6.00 Baa2 100.14 620,720 1.58 0.04 172967FA4 6.010%01/15/2015 DD 12/15/09 599,851 1.05 DiDUBTRIALS 1,000,000.00 INTERNATIONAL BUSINESS MACHINE 0.26 0.95 Aa3 100.18 1,001,880 2.63 0.36 459200HD6 0.750%05/11/2015 DD 05/11/12 1,001,750 1.76 1,000,000.00 CATERPILLAR INC 0.29 0.95 A2 100.32 1,003,280 2.64 0.49 149123BY6 0A50%06/26/2015 DD 06/26/12 1,003,180 L76 1,000,000.00 COSTCO WHOLESALE CORD 0.47 0.65 Al 100.19 1,001,340 2.63 0.93 22160KAD9 0.650%12/07/2015 DO 12/07/12 1,001,670 L96 633,000.00 JPMORGAN CHASE&CO 0.51 1.89 A3 100.30 640,292 1.69 0.22 46623EJP5 1.895%03/20/2015 DO 03/21/12 634,886 L12 387,000.00 PRAKAIR INC 0.57 4.58 A2 101.01 401,540 1.03 0.25 94005PAR5 4.625%03/30/2015 DD 03/09/08 390,909 0.69 604,000.00 UNITEDHEALTH GROUP INC 0.91 4.83 A3 100.85 626,968 1.60 0.21 91324PAM4 4.875%03/15/2015 DD 03/07/05 609,158 1.09 619,000.00 ANHEUSER-BUSCH INBEV WORLDWIDE 1.71 4.12 A2 100.09 634,537 1.63 0.04 03523TAMO 4.125%01/15/2015 DD 10/16/09 619,576 1.09 619,000.00 PEPSIAMERICAS INC 1.88 4.89 Al 100.12 638,001 1.63 0.04 91343PAA9 4.875%01/15/2015 DD 01/10/05 619,712 1.09 TREASURIES 111412015 1:49:03PM EST 4 Sou¢ Ma BakofNew York Mei/an Corporaran Yield Analysis Report ID: RAM234 Base Currency: Ban TINY MELLON OCSF07511102 12/31/2014 Liquid Oper-Pim<o Units Held YTM/ Current Moody's Market Total Coat %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj Rating Value Duration 3,900,000.00 USTREASURY NOTE 0A0 0.25 A. 100.02 3,902,022 10.26 0.13 912828SE1 0.250%02/15/2015 DD 02/15/12 3,900,741 6.85 2,000,000.00 U S TREASURY NOTE 0.12 0.37 Aaa 100.12 2,002,507 5.27 0.46 9128285Z4 0.375%06/15/2015 DD 06/15/12 2,002,340 3.52 TOTAL:FIRED INCOME 0.39 1.20 38,037,556 100.00 0.43 37,905,102 TOTAL:Liquid Oper-Pimco 0.29 0.90 60,942,400 100.00 0.32 56,929,628 111412015 1:49:03PM EST $ Sou¢ Ma BaNc. fNew York McOan Corporaran Yield Analysis Report ID: RAM234 Base Currency: BNY MELLON OCSF07522202 12/31/2014 Long Term Oper-Pimeo Units Held YTM/ Current Moody's Market Total Coat %Type Option Security ID Security Description can(EOP) Yield Quality Price Market Value %Market Adj Rating Value Duration CASH &.TEMPORARY Sum o(Acmuut Receivables - 0.00 SUMRECV 910,393 AGENCY 3,300,000.00 FEDERAL HOME LN MTG CORP DISC 0.00 Asa 100.00 3,298,276 1.82 0.01 313396AH6 0.000%01/08/2015 DO 01/08/201 3,298,276 0.96 5,000,000.00 FEDERAL NATL MTG ASSN DISC 0.00 Asa IM.00 4,998,899 2.76 0.01 313588AE5 MAT01/05/2015 4,998,899 1.15 7,100,000.00 FEDERAL NATL MTG ASSN DISCOUNT 0.03 Aas IM.00 7,098,629 3.92 0.16 313588CJ2 MAT 02/26/2015 7,098,629 1.64 10,300,000.00 FEDERAL HOME LN BK CONS DISC 0.04 Aaa 100.00 10,297,376 5.68 0.03 313384AP4 MAT01/14/2015 10,297,376 2.37 23,800,000.00 FEDERAL HOME LN MTG CORP DISC 0.05 Aaa 99.98 23,794,728 13.13 0.19 313396CX9 0.000%03/11/2015 DO 03/11/14 23,794,728 3.48 COMMERCIAL PAPER 10,400,000.00 FEDERAL HOME LN BK CONS DISC 0.02 Ana I00.00 10,398,979 5.74 0.05 313384AY5 MAT 01/23/2015 10,399,896 2.40 4,600,000.00 PACCAR FINL CORP DISC 0.17 P-1 4,599,369 2.54 0.08 69372BNV8 01/29/2015 4,599,369 1.06 8,000,000.00 AMERICAN HONDA FN DISC - WR 7,999,333 4.41 - 02665KNG8 01/16/2015 7,999,333 1.84 8,000,000.00 BANK TOKYO-MITSUB DISC - P-1 7,998,320 4.41 - 06538CNW7 01/30/2015 7,998,320 1.84 111412015 1:49:03PM EST 6 Source:Ma HaNc. fNew York Mellen Communion Yield Analysis Report ID: RAM234 Base Currency: Ban BNY MELLON OCSF07522202 12/31/2014 Long Term.Oper-Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj Rating Value Duration 8,000,000.00 EXXON CORP DISC 1`-1 7,998,907 4.41 - 30229BW5 01/29/2015 7,998,907 1,84 7,000,000.00 PNC BANK N A DISC 1`-1 6,980,419 3.85 - 69349KW22 09/02/2015 6,980,419 1.61 OTHER IM,812.50 SLH PROXY LONG EXPOSURE - - 104,813 0.02 - 99WAEU30 SLH0PNTA4 44,283 0.01 36,737,426.57 DREYFUS TREAS&AGY CSH CSH MG - Aaa 36,737,427 20.27 0.08 996085247 VAR RT 12/31/2049 DO 04/09/97 36,737,427 8.46 TREASURMS AND AGENCIES O 20,000,000.00 FEDERAL HOME LN UK CONS DISC 0.01 Asa IM.00 19,997,778 11.03 0.07 313384BDO MAT01/28/2015 19,997,778 4.61 1,000,000.00 FEDERAL HOME LN MTG CORP DISC 0.01 Aaa 100.00 999,929 0.55 0.07 313396BD4 MAT01/28/2015 999,929 0.23 18,200,000.00 FEDERAL HOME LN MTG CORD DISC 0.02 Asa 100.00 18,197,735 10.04 0.07 313396BE2 0.000%01/29/2015 DD 01/29/201 18,197,735 4.19 9,800,000.00 FEDERAL NATL MTG ASSN DISC 0.09 Aaa 99.97 9,796,147 5.40 0.29 313588EK7 0.000%04/16/2015 DD 04/21/201 9,796,147 2.26 US CASH 1.00 LSD(UNITED STATES DOLLAR) - - 0 0.00 - NA9123459 GL PAYABLES RECEIVABLES 0 0.00 TOTAL:CASH 6,TEMPORARY 0.04 0.00 181,296,860 300.00 0.10 182,147,844 FIXED INCOME 111412015 1:49:03PM EST 7 Source:The Bank fNew York M,Oa Corporation Yield Analysis Report ID: RAM234 Ease Currency: Ban BNY MELLON OCSF07522202 12/31/2014 Long Term.Oper-Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj Rating Value Duration AGENCIES&OTHER GOVT GEL 6,000,000.00 FEDERAL NATL MTG ASSN DISC NT 0.02 Aaa 100.00 5,999,587 2.37 0.05 313588AX3 MATOI/22/2015 5,999,587 1.38 5,000,000.00 FEDERAL NATL MTG ASSN 1.69 1.95 Ana 100.25 5,021,500 1.98 4.52 3135GOZG1 1.750%09/12/2019 DO 04/28/14 5,012,400 1.15 BANKS&FINANCE 6,300,000.00 WELLS FARGO BANK NA G31 0.75 Aa3 100.24 6,297,795 2.50 0.55 94985H5F9 0.950%07/20/2015 DO 07/29/13 6,315,183 1.46 5,200,000.00 TOYOTA MOTOR CREDIT CORP 0.38 0.52 Aa3 100.19 5,200,000 2.06 1.39 89236TAK1 VAR RT 05/1]/2016DD05/1]/13 5,209,984 1.20 500,000.00 WELLS FARGO BANK NA 0.49 0.50 Aa3 100.02 500,000 0.20 - 9498W2LO VAR RT 06/15/2017DD06/12/14 500,100 0.12 500,000.00 AFLAC INC 0.69 3.39 A3 101.72 499,630 0.20 0.61 001055AE2 3.450%08/15/2015 DO 08/09/10 508,615 0.12 600,000.00 BANK OF"ERICA NA 0.92 0.65 A2 99.83 600,000 0.24 0.10 06050TLX8 VARRT 05/08/2017DD05/08/14 599,004 0.14 2,000,000.00 GOLDMAN SACHS GROUP INC/THE 0.88 0.70 Haal 99.78 1,895,068 0.49 0.22 38141GEG5 VAR RT 03/22/2016 DO 03/22/06 1,995,540 0.46 70g000.00 MORGAN STANLEY 1.00 5.90 Haa2 101.62 737,361 0.28 0.32 6174TCE3 6.000%04/28/2015 DO 04/28/08 711,326 0.16 200,000.00 CITIGROUP INC 1.15 1.25 Eee2 100.10 198,352 0.08 1.02 172967GGO 1.250%01/15/2016 DO 0 1/10/13 200,202 0.05 500,000.00 d ORGAN CHASE 6:CO 1.16 3.36 A3 102.64 506,326 0.20 1.14 46625HHX1 3.450%03/01/2016 DO 02/24/11 513,200 0.12 111412015 1:49:03PM EST 8 Sou¢ Ma BaNc. fNew Pork McFan Corporation Yield Analysis Report ID: RAM234 Base Currency: Ban BNY MELLON 0CSF07522202 12/31/2014 Long Term.Oper-Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) Yield Quality Price Market Value %Market Adj Rating Value Duration 300,000.00 JPMORGAN CHASE&CO L28 3.06 A3 102.99 299,658 0.12 1.46 46625HJA9 3.150%07/05/2016 DD 06/29/11 308,381 0.09 1,100,000.00 JPMORGAN CHASE BANK NA 1.88 5.41 A2 110.99 1,302,565 0.48 2.54 48121CYK6 6.000%10/O1/2017 DD 09/24/07 1,220,868 0.28 2,900,000.00 AMERICAN EXPRESS CO 1.96 6.05 A3 115.90 3,399,386 1.33 2.90 025816AY5 9.000%03/19/2018 DD 03/19/08 3,355,155 0.97 3,800,000.00 BANK OF AMEMCA CORP 2.03 5.20 Baa2 110.49 4,334,014 1.66 2.71 060505DP6 5.950%12/O1/2017 DD 12/04/07 4,198,620 0.97 3,200,000.00 BEAR STEARNS COS LLC/THE 2.16 4.29 A3 108.36 3,523,520 1.39 3.20 093902CD8 4.650%00/02/2018 DD 06/25/03 3,467,584 0.80 1,200,000.00 JOHN DEERE CAPITAL CORP 2.19 2.29 A2 100.59 1,204,956 0.48 4.46 24422ESS9 2.300%09/16/2019 DD 09/15/14 1,207,116 0.28 600,000.00 GOLDMAN SACHS GROUP INC/THE 2.19 5.36 Baal 111.10 692,806 0.26 2.96 38141GFG4 5.950%O1/18/2018 DD 01/18/08 666,582 0.15 1 Og000.00 JPMORGAN CHASE&CO 2.34 5.42 A3 116.16 112,124 0.05 3.83 46625HHL7 6.300%04/23/2019 DO 04/23/09 116,158 0.03 2,800,000.00 MERRILL LYNCH&CO INC 2A5 5.91 Baal 116.26 3,417,664 1.29 3.46 590188JN9 6.895%11/15/2018 DD 11/24/98 3,255,252 0.95 1,000,000.00 SIMON PROPERTY GROUP LP 2.64 3.98 A2 109.81 996,050 0.43 5.29 828807CF2 4.375%03/O1/2021 DO 08/16/10 1,098,050 0.25 2,800,000.00 MORGAN STANLEY 3.21 4.85 Baal 113.49 3,200,848 1.26 5.55 6174T A63 5.500%07/28/2021 DO 07/28/11 3,199,664 0.93 2,000,000.00 LEHMAN BRTH HLD ESC 124.11 - I4.50 1,366,719 0.11 - 525ESCOY6 0.000%12/30/2016 DD 10/24/05 290,000 0.07 111412015 1:49:03PM EST 9 Sou¢ Ma BaNc. fNew Pork Meilan Corporndon Yield Analysis Report ID: RAM234 Base Currency: Ban BNY MELLON OCSF07522202 12/31/2014 Long Term.Oper-Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market AQj Rating Value Duration 600,000,00 ESC LEHMAN BRTH HLD ESCROW - 14.63 406,605 0.03 - 525ESCIB9 0.000%01/24/2013 DD 01/22/08 8/,950 0,02 COMMBRCLII MORTGAGBS 334,110.69 NCUA GUARANTEED NOTES TR CI AI 0.00 1.60 - 100.19 334,972 0.13 - 62888XAA2 1.600%10/29/2020DD11/10/10 334,669 0.08 FARNIB MAB REMIC 305,846.84 FNMA GTD REMIC P/T 10-MI Al -22.25 3.25 Aaa 101.66 317,507 0.12 0.08 31398MGL4 3.305%06/25/2019 DO 02/01/10 310,912 0.09 618,770.71 FNMA GTD REMIC P/T 11-3 FA 0.52 0.83 Asa 101.24 618,570 0.25 0.12 31347QRE0 VAR RT 02/25/2041 DO 01/25/11 626,450 0.14 20Q000.00 FNMA GTD REMIC P/T 09-114 A6 0.94 0.37 Asa 98.54 190,250 0.08 0.53 31396MQ5 VAR RT 10/27/2037 DO 11/30/07 197,086 0.05 FRLMC 2,844.75 FRLMC POOL#98-606 0.98 2.22 Aaa 103.92 2,995 0.00 0.95 31348SWZ3 VAR RT 01/01/2028 DD 12/01/97 2,951 0.00 FNMA 239,913.82 FNMA POOL#0823358 0.49 2.06 Aaa 109.53 238,039 0.10 1.06 31406XWT5 VAR RT 02/01/2035 DO 04/01/05 257,979 0.06 54,528.29 FNMA POOL#0826080 1.85 4.51 Aaa 110.80 58,618 0.02 2.29 31407BXH7 5M00%07/01/2035 DO 06/01/05 60,418 0.01 308,868.87 FNMA POOL#0357969 2.02 4.52 Aaa 110.69 332,034 0.14 2.30 31396ET22 5.000%09/01/2035 DO 09/01/05 341,816 0.08 290,168.64 FNMA POOL#0745580 2.12 4.52 Aaa 110.63 311,931 0.13 2.59 31403WZ3 5.000%06/01/2036 DO 05/01/06 320,999 0A7 111412015 1:49:03PM EST 10 Sou¢ Ma BaNc. fNew Pork Meilan Corporation Yield Analysis Report ID: RAM234 Base Currency: Ban BNY MELLON OCSF07522202 12/31/2014 Long Term.Opar Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) Yield QuaHty Price Market Value %Market AQj Rating Value Duration 574,180.68 FNMA POOLK0815991 2.14 4.52 Aaa 110.93 617,244 0.25 2.54 31406PQY8 5000%03/0l/2035DD03/0l/05 635,785 0.15 8,438.32 FNMA PO01,#0748678 2.15 4.52 Aaa 110.60 9,091 0.00 2.71 31403GXF4 5.000%10/01/2033 DD 10/01/03 9,333 0.00 589,852.66 FNMA POOL#0888336 2.16 4.52 Aaa 110.03 634,092 0.26 2.74 3141OF4V4 5.000%07/01/2036 DD 04/01/07 653,120 0.15 374,353.78 FNMA PO01,#0466397 2.16 3.20 Aaa 106.24 366,253 0.16 5.08 31381PDA3 3.400%11/01/2020 DD 11/01/10 397,706 0.09 33,406.45 FNMA POOLb0AL0869 2.18 4.15 Aaa 108.52 35,331 0.01 3.11 3138EG6F6 4.500%06/01/2029DD09/01/11 36,253 0.01 54,029.12 FNMA POOLNOMA0022 222 4.15 Aaa 108.52 57,141 0.02 3.22 31419YAY3 4.500%04/01/2029DD03/01/09 58,632 0.01 53,396.41 FNMA POOL90259199 2.25 4.15 Aaa 108.52 56,472 0.02 3.49 31391NUC7 4.500%04/01/2028DD03/01/08 57,946 0.01 FRBDDIR MAC MULTICL 93,149.60 FBLMC MULTICLASS MTG E3 A 0.91 2.88 Aaa 104.02 93,247 0.04 0.83 3133ME95 VAR RT 08/15/2032 DD 12/01/97 96,893 0.02 900,000.00 MILK MULTICLASS MTG K006 A2 2.09 3.87 Aaa 109.84 951,047 0.39 4.48 31398VJ98 4.251%01/25/2020 DD 04/01/10 988,596 0.23 1,216,857.52 MlAfC MULTICLASS MTG 58 2A 2.84 5.69 Aae 114.31 1,378,091 0.55 0.33 31394JY35 6.500%09/25/2043 DD 09/01/03 1,391,014 0.32 O]iMA 117,896.29 GNMA II POOL a0080965 0.18 1.59 Aaa 103.88 117,823 0.05 0.72 36225DCBB VAR RT 04/20/2034DD04/01/04 122,471 0.03 111412015 1:49:03PM EST 11 Sou¢ Ma BaNc. fNew York Meilan Corporndon Yield Analysis Report ID: RAM234 Base Currency: Ban BNY MELLON OCSF07522202 12/31/2014 Long Term.Oper-Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market AQj Rating Value Duration 38,975.97 GNMA 11 POOL k080088M 0.61 1.59 Aaa 103.92 39,829 0.02 0.97 36225CC20 VAR RT 06/20/2029DD06/01/99 40,504 0.01 14,025.28 GNMA 11 POOL#0080395 0.69 1.59 Aaa 103.93 13,898 0.01 0.40 36225CNM4 VAR RT 04/20/2030DD04/01/00 14,548 0.00 116,289.52 GNMA 11 POOL N080408X 0.69 1.59 Aaa 103.03 115,108 0.05 0.56 36225CN28 VAR RT 05/20/2030DD05/01/00 120,627 0.03 32,407.29 GNMA 11 POOL#0080023 0.96 1.60 Aaa 103.41 32,944 0.01 1.22 36225C 9 VAR RT 12/20/2026 DD 12/01/96 33,513 0.01 GNMA REMIC 62,796.58 GNMA GTD REMIC P/T 00-9 FH 0.03 0.66 Aaa 100.76 62,777 0.03 0.12 3839H4NX9 VAR RT 02/16/2030 63,252 omi HOME EQUITY 40,503.44 WELLS FARGO HOME EQUITY 2 AI6 1.83 4.97 Asa 100.47 40,200 0.02 0.00 94980GAG6 VARRT 10/25/2034DD09/01/04 40,695 0.01 133,743.29 AMRESCO RESIDEN SECURI I A 2.20 1.02 - 91.98 100,433 0.05 -0.01 03215PFN4 VAR RT 06/25/2029 DD 10/20/99 123,018 0.03 205,569.72 SOUNDVIEW HOME LOAN TR OPr3 A4 3.66 0.46 - 99.23 181,480 0.08 0.01 83611MGS1 VARRT 11/25/2035DD09/30/05 203,999 0.05 INDUSTRW.B 1,000,000.00 SOUTHERN CO/THE 0.82 2.35 Hall 101.09 999,810 0.40 0.90 842587CGO 2.375%09/15/2015 DD 09/17/10 1,010,890 0.23 4,000,000.00 CHEVRON CORP 1.32 1.11 Aal 99.38 3,999,200 1.57 2.89 166764AA8 1.104%12/05/2017 DO 12/05/12 3,975,280 0.92 111412015 1:49:03PM EST 12 Sou¢ Ma HaNc. fNew York Meilan Corporndon Yield Analysis Report ID: RAM234 Ease Currency: Ban BNY MELLON OCSF07522202 12/31/2014 Long Term.Oper-Pimco Units Held YTM/ Current Moody's Market Total Coat %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj Rating Value Duration 1,600,000.00 PHILIP MOMS INTERNATIONAL IN 197 5.01 A2 112.66 1,854,144 0.71 3.11 918192AA9 5650%05/16/2018 DD 05/16/08 1,802,608 042 4,000,000.00 ELI LILLY Is CO 1.82 1.94 A2 100.54 4,009,675 1.59 4.04 532457BF4 1.950%03/15/2019 DD 02/25/14 4,021,480 0.93 1,300,000.00 AMGEN INC 2.71 3.32 Baal 103.90 1,318,052 0.53 5.23 031162BD1 3.450%10/01/2020 DD 09/16/10 1,350,700 0.31 OTHER CMO OOVT AGENCIES 645,503.87 NCUA GUARANTEED NOTES TR R2 lA 0.16 0.69 Asa 100.28 645,501 0.26 0.01 62888UAA8 VARRT 11/06/2017 DO 11/17/10 647,292 0.15 178,711.65 SBA GM PARTN CTFS 2001-20C 1 2.34 5.90 Asa 109.53 178,712 0.08 1.84 83162CWO 6.340%03/01/2021 192,169 0.04 STUDENT 50,415.52 SLM STUDENT LOAN TRUST 200 9 A 1.30 1.69 Aaa 102.71 50,211 0.02 0.06 78445JAA5 VARRT 04/25/2023DD08/28/08 51,780 0.01 TtPs 0.00 US TREAS-CPI INF T 1.89 1.08 Aaa 103.88 0 0.00 4.66 912828PP9 1.125%01/15/2021 DD 01/15/11 0 0.00 3,304,224.00 US TREAS-CPI INFLAT 2.04 0.13 Aaa 47.43 3,311,667 1.29 6.00 912828MO 0.125%07/15/2022 DD 07/15/12 3,219,305 0.94 TREASURIES 10,000,000.00 U S TREASURY NOTE 0.24 0.25 Aaa 100.01 9,997,299 3.96 0.96 912828UC2 0.250%12/15/2015 DD 12/15/12 10,000,800 2.30 7,500,000.00 U S TREASURY NOTE 0.24 0.39 Aaa 100.09 7,510,572 2.99 OB9 91282M8 0.395%11/15/2015 DD 11/15/12 7,507,050 1.73 111412015 1:49:03PM EST 13 Sou¢ Ma NaNc. fNew Pork Meilan Corporation Yield Analysis Report ID: RAM234 Base Currency: Ban BNY MELLON OCSF07522202 12/31/2014 Long Term.Oper-Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj Rating Value Duration 3,500,000.00 USTREASURY NOTE 0.33 0.32 A. 100.00 3,500,340 1.38 0.00 91282SD31 VAR RT 04/30/2016DD04/30/14 3,499,825 0.81 19,600,000.00 USTREASURY NOTE 0.52 0.50 Ann 99.96 19,596,172 7.05 1.65 912828D64 0.500%08/31/2016 DO 08/31/14 19,592,356 4.51 15,000,000.00 U S TREASURY NOTE 0.63 0.50 Ass, 99.95 14,965,871 5.92 1.91 91282SG46 0.500%11/30/2016 DO 11/30/14 14,962,500 3.45 12,500,000.00 U S TREASURY NOTE 1.04 0.88 Asa 99.52 12,435,979 4.92 2.84 91282SG20 0.875%11/15/2017 DO 11/15/14 12,440,375 2.89 52,900,000.00 U S TREASURY NOTE 1.59 1.62 Asa 100.25 52,816,985 20.98 4.37 912828WS5 1.625%06/30/2019 DO 06/30/14 53,032,250 12.22 17,400,000.00 U S TREASURY NOTE 1.59 1.62 Asa 100.16 17,443,113 6.89 4.42 912828WW6 1.625%00/31/2019 DO 00/31/14 17,427,144 4.02 5,800,000.00 U S TREASURY NOTE 1.62 1.44 Ase 100.59 5,873,187 2.31 4.57 912828F39 1.750%09/30/2019 DO 09/30/14 5,833,988 1.34 7,500,000.00 U S TREASURY NOTE L63 1.51 Ase 99.37 7,449,635 2.95 4.96 912828G61 1.500%11/30/2019 DO 11/30/14 7,452,525 1.72 10,400,312.00 US TREAS-CPI INFLATION INDEXED 2.23 0.13 Asa 96.31 10,283,028 3.96 7.60 912828W O 0.125%07/15/2024 DO 07/15/14 10,016,020 2.31 US TAXABLE MUM BONDS 2,440,000.00 PORTAUTHOFNEWYORK&NEWJE 2.22 4.64 Aa3 114.34 2,509,634 1.10 4.41 93358WAG9 5.309%12/01/2019 DO 07/01/09 2,789,774 0. l 1,400,000.00 NEWYORK CITY NYTRANSITIONAL 2.68 3.99 Aal 109.47 1,400,000 0.60 5.24 64971M5E8 4.075%11/01/2020 DO 11/03/10 1,504,636 0.35 111412015 1:49:03PM EST 14 Soume:The B¢Nc. fNew Pork Meilan Corporation Yield Analysis Report ID: RAM234 Base Currency: Ban BNY MELLON OCSF07522202 12/31/2014 Long Term.Oper-Pimco Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj Rating Value Duration 400,000.00 UNIV OF CALIFORNIA CA ROTS RED 2.93 4.49 Aa3 112.15 400,000 0.18 5.55 913366E,15 5035%05/15/2021 DD 11/18/10 448,580 0,10 1,200,000.00 TEXAS ST TRANSPRTN COMMISSION 2.98 4.29 Asa 117.26 1,200,000 0.56 7.98 88283LHT6 5.028%04/01/2026 DD 08/05/10 1,407,156 0.32 1,300,000.00 NEW YORK NY 3.43 4.65 Aa2 122.42 1,373,502 0.63 9.21 64966=0 5.698%03/01/2027 DD 03/30/10 1,591,395 0.37 1,300,000.00 BAY AREA CA TOLL AUTH TOLL BRI 3.60 5.32 Al 127.69 1,300,000 0.66 7.99 092024NT5 6.793%04/01/2030 DD 09/01/10 1,659,983 0.38 2,500,000.00 ILUNOIS ST TOLL HIGHWAY AUTH 3.72 4.87 Aa3 108.60 2,464,750 1.09 4.00 452252FJ3 5.293%01/01/2024 DD 05/21/09 2,714,900 0.63 1,500,000.00 CALIFORNIA ST 4.04 4.96 Aa3 148.12 1,509,825 0.88 12.98 13063BBU5 7.350%11/01/2039 DD 11/10/09 2,221,800 0.51 300,000.00 MET TRANSPRTN AUTH NY REVENUE 4A2 4.93 A2 138.30 311,316 0.16 12.96 59259YGFO 6.814%11/15/2040 DD 12/29/10 414,912 0.10 1,300,000.00 MASSACHUSETTS ST PORT AUTH FAC 4.21 5.21 A3 119.01 1,300,000 0.61 8.92 595898C58 6.202%07/01/2031 DD 06/15/11 1,547,143 0.36 TOTAL:FLED INCOME 1.82 1.76 250,981,895 300.00 3.46 251,892,300 TOTAL:Long Term Oper-Pimco 1.06 1.21 432,278,756 100.00 2.20 434,039,944 111412015 1:49:03PM EST 15 Source:The Bank fNew York McOen Corporation Yield Analysis Report ID: NAM234 Base currency: BNY MELLON OCSF07555502 12/31/2014 O.C.S.Escrow Account Units Held YTM/ Current Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj Rating Value Duration CASH &.TEMPORARY Sum o(Acmunt Receivables - 0.00 SUMRECV 4,021 TOTAL:CASH 3:TEMPORARY 0.00 0.00 100.00 4,021 FIXED INCOME TREASURIES 3,594,000.00 U S TREASURY NCTE 0.09 0.39 Asa 100.06 3,603,596 99.89 0.20 912828SK7 0.375h03/15/2015DD03/15/12 3,596,264 99.89 TOTAL:FIXED INCOME 0.07 0.37 3,603,596 100.00 0.20 3,596,264 TOTAL:O.C.S.Escrow Account 0.07 0.37 3,603,596 100.00 0.20 3,600,285 111412015 1:49:03PM EST 16 Source:The BaNc. fNew York McOm Communion Asset Detail Report ID: GL8013 �' Base Curtency: Ban BNY ME LLON by Currency Alternate Base Currency: Exchange Rate: OCSD CONSOMDATED-OCSG00030000 12/31/2014 Statue: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base U.S.DOLLAR CABR a CASK EQUIVALENTS INTEREST RECEIVABLE 1,039,753.19 1,039,753.19 0.21% 0.00 RECEIVABLE FOR INVESTMENTS 2,264.75 2,264.75 0.00% 0.00 SOLD PAYABLE FOR INVESTMENTS -4,008,030.08 -4,008,030.08 -0.81% 0.00 PURCHASED AMERICAN HONDA FN DISC 99.9917 8,000,000A00 7,999,333.36 7,999,333.36 1.62% 0.00 01/16/2015 SEC TO 02665KNG8 BANK TOKYO-MITSUB DISC 99.9790 9,M0,000A00 8,998,040.00 8,998,040.00 1.82% 0.00 01/30/2015 SEC TO 06538CNW7 EKKON CORP DISC 99.9863 SIM0,000A00 7,998,906.67 7,998,906.67 1.62% 0.00 01/29/2015 SEC ID:30229BNV5 FEDERAL HOME LN BK CONS DISC 99.9745 10,300,000.MO 10,297,376.36 10,297,376.36 2.08% 0.00 MAT 0I/14/2015 SEC ID:313384AP4 FEDERAL HOME LN BK CONS DISC 99.9990 11,100,000.000 11,098,661.55 11,099,889.00 2.24% 1,227.45 MAT 01/23/2015 SEC ID:313384AY5 FEDERAL HOME LN BK CONS DISC 99.9896 22,500,000.000 22,497,516.67 22,499,516.67 4.55% 0.00 MAT Ol/28/2015 SEC ID:313384BDO FEDERAL HOME LN BK CONS DISC 99.9826 4,200,000.000 4,199,269.10 4,199,269A0 0.85% 0.00 MAT 02/06/2015 SEC ID:313384BN8 FEDERAL HOME LN MTG CORP DISC 99.9478 3,300,000.000 3,298,275.75 3,298,29595 0,67% 0.00 0.000%01/08/2015 DO 01/08/201 SEC ID:313396AH6 FEDERAL HOME LN MTG CORP DISC 99.9910 900,000.000 899,918.60 899,918.60 0.18% 0.00 0.000%01/12/2015 DD 01/13/201 SEC ID:313396AM5 FEDERAL HOME LN MTG CORP DISC 99.9918 2,000,000.000 1,999,836.67 1,999,836.69 0,40% 0.00 0.000%01/23/2015 DD 01/23/201 SEC ID:313396AY9 FEDERAL HOME LN MTG CORP DISC 99.9929 5,000,000.000 4,999,645.84 4,999,645.84 1.01% 0.00 MAT 01/28/2015 SEC ID:313396BD4 FEDERAL HOME LN MTG CORP DISC 99.9876 18,200,000.000 18,197,735.11 18,197,735.11 3.68% 0.00 0.000%01/29/2015 DD 01/29/201 SEC ID:313396BE2 111412015 1:46:33PM EST 1 Workbench Asset Detail Report ID: GL8013 �' Baae Cocteau: LED BNY ME LLON by Currency Alternate Base Currency: Exchange Rate: OCSD CONSOLIDATED-OCSWOOl0000 12/31/2014 Sterna: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base FEDERAL HOME LN MTG CORP DISC 99.9778 23,800,000.000 23,794,727,64 23,794,727,64 4S1% 0,00 0.000%03/11/2015 DD 03/11/14 SEC ID:313396CX9 FEDERAL HOME LN MTG CORP DISC 99.9687 900,000.000 899,718.25 899,918.25 0.18% 0.00 MAT 04/01/2015 SEC ID:313396DU4 FEDERAL NATL MTG ASSN DISC 99.9780 5,000,000.000 4,998,898.61 4,998,898.61 1.01% 0.00 MAT 01/05/2015 SEC ID:313588AE5 FEDERAL NATL MTG ASSN DISC 99.9922 200,000.000 199,984.31 199,984.31 0.04% 0.00 MAT 01/20/2015 SEC ID:313588AV7 FEDERAL NATL MTG ASSN DISC NT 99.9931 6,000,000.000 5,999,586.67 5,999,586.67 1.21% 0.00 MAT 01/22/2015 SEC ID:313588AX3 FEDERAL NATL MTG ASSN DISCOUNT 99.9807 7,100,000.000 7,098,629.31 7,098,629.31 1.44% 0.00 MAT 02/26/2015 SEC ID:313588CJ2 FEDERAL NATL MTG ASSN DISC 99.9607 9,800,000.000 9,796,146.69 9,796,146.69 1.98% 0.00 0.000%04/16/2015 DD 04/21/201 SEC ID:313588EK7 PNC BANK N A DISC 99.7203 7,500,000.000 7,479,020.83 7,479,020.83 1.51% 0.00 09/02/2015 SEC ID:69349KW22 PACCAR FINL CORP DISC 99.9889 I,000,000.000 999,888.89 999,888.89 0.20% 0.00 01/21/2015 SEC ID:69392BNM8 PACCAR FINL CORP DISC 99.9863 4,600,000.000 4,599,368.79 4,599,368.79 0.93% 0.00 01/29/2015 SEC ID:69302BW8 U S TREASURY BILL 99.9992 2,500,000.000 2,499978.89 2,499,978.89 0.51% 0.00 0.000%01/15/2015 DD 07/17/14 SEC ID:912096EP0 DREYFUS TREAS&AGY CSH CSH MG 100.0000 41,245,850.920 41,245,850.92 41,245,8W92 8.34% 0.00 VAR RT 12/31/2049 DO 04/09/97 SEC ID:996085247 SLH PROXY LONG EXPOSURE 0,4225 104,812.500 104,812.50 44,283.28 0.01% -60,529.22 SLHOPNTA4 SEC ID:99WAEU30 TOTAL CASH a CASH EQUIVALENTS 212,250,663.420 209,235,115.84 209,175,814.07 42.29% -59,301.77 FLKED INCOME SECURITIES 111412015 1:46:33PM EST 2 Workbench Asset Detail Report ID: GL8013 �' Base Curtency: LED BNY ME LLON by Currency Alternate Base Currency: Exchange Rate: OCSD CONSOLIDATED-OCSW0030000 12/31/2014 Statue: FINAL Net Unrealized Price Coat Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base AFLAC INC 101.7230 500,000.000 499,630,00 508,615.00 0.10% 8,985,00 3,450%08/15/2015 DD 08/09/10 SEC ID:001055AE2 AMERICAN EXPRESS CO 115.6950 2,900,000.000 3,399,385.79 3,355,155.00 0.68% -22,230.79 7.000%03/19/2018 DD 03/19/08 SEC ID:025816AY5 AMGEN INC 103.9000 1,300,000.000 1,318,052.00 1,350,700.00 0.27% 32,648.00 3.450% 10/01/2020 DD 09/16/10 SEC ID:031162BD1 AMRESCO RESIDENTIAL SECURI 1 A 91.9810 133,743.290 100,432.85 123,018.42 0.02% 22,585.57 VAR RT 06/25/2029 DO 10/20/99 SEC ID:03215PFN4 ANHEUSER-BUSCH INBEV 100.0930 619,000.000 634,536.90 619,575.67 0.13% -14,961.23 WORLDWIDE 4.125%01/15/2015 DD 10/16/09 SEC ID:03523TAMO BANK OF AMERICA CORP 110.4900 3,800,000.000 4,334,014.00 4,198,620.00 0.85% -135,394.00 5.950% 12/01/2017 DD 12/04/09 SEC ID:060505DP6 BANK OF AMERICA NA 99.8340 600,000.000 600,000.00 599,004.00 0,12% -996.00 VAR RT 05/08/2017 DD 05/08/14 SEC ID:06050TLX8 BANK OF NEW YOM MELLON 100.0330 645,000.000 649,160.25 645,212S5 0,13% -3,947.40 CORP/T 1.200%02/2012015 DD 02/21/12 SEC ID:06406HCCI BAY AREA CA TOLL AUTH TOLL BRI 127.6910 1,300,000.000 1,300,OM.00 1,659,983.00 0.34% 359,983.00 6.793%M/01/2030 DD 07/01/10 SEC ID:072024NT5 BEAR STEARNS COS LW/THE 108.3620 3,200,000.000 3,523,520.00 3,467,584.00 0.90% -55,936.00 4.650%07/02/2018 DD 06/25/03 SEC ID:073902CDS CALIFORNIA ST 148.1200 1,500,000.000 1,509,825.00 2,221,800.00 0.45% 711.975.00 7.350% 11/01/2039 DD 11/10/09 SEC ID: 13063BBU5 CATERPILLAR INC 100.3180 1,000,000.000 1,003,280.00 1,003,180.00 0.20% -100.00 0.950%06/26/2015 DD 06/26/12 SEC ID: 149123BY6 CATERPILLAR FINANCIAL SERVICES 100.3170 1,000,000.000 1,003,340.00 1,003,170.00 0.20% -190.00 1.100%05/29/2015 DD 05/30/12 SEC ID: 14912L5D9 CHEVRON CORP 99,3820 4,000,000.000 3,977,200.00 3,975,280.00 0.80% -1,920.00 1.104% 12/05/2017 DD 12/05/12 SEC ID: 166064AA8 111412015 1:46:33PM EST 3 Workbench Asset Detail Report ID: GL8013 �' Base Cocteau: Dan BNY ME LLON by Currency Alternate Buse Currency: Exchange Rate: OCW CONSOLIDATED-OCSG00030000 12/31/2014 Statue: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base CITIGROUP INC 100,1420 599,000.000 620,719.74 599,850,58 0.12% -20,869.16 6.010%01/15/2015 DO 12/15/09 SEC ID: 192967FA4 CITIGROUP INC 100.1010 200,000.000 198,352.00 200,202.00 0.04% 1,850.00 1.250%01/15/2016 DO 01/10/13 SEC ID: 192967GGO COSTCO WHOLESALE CORP 100.1670 1,000,000.000 1,001,340.Oo 1,091,690.00 0,20% 330.00 0.650% 12/07/2015 DO 12/07/12 SEC ID:22160KAD7 CREDIT SUISSE USA INC 100.1690 653,000.000 672,464.66 654,103.57 0.13% -18,361.09 4.875%01/15/2015 DD 12/15/04 SEC ID:22541LAR4 JOHN DEERE CAPITAL CORP 100.2800 1,008,000.000 1,009,340.64 1,010,822.40 0.20% 1,481.76 0.900%09/04/2015 DD 09/07/12 SEC ID:24422ERV3 JOHN DEERE CAPITAL CORP 100.5930 1,200,000.000 1,204,956.00 1,204,116.M 0.24% 2,160.00 2.300%09/16/2019 DD 09/15114 SEC ID:24422ESS9 FEDERAL FARM CR BK CONS BD 101.0500 2,000,000.000 2,021,180.00 2,021,000.M 0.41% -180.00 1.500% 11/16/2015 DD 11/15/10 SEC ID:31331J2S1 FEDERAL HOME LN BK CONS BD 101.0220 1,500,000.000 1,515,240.00 1,515,330A0 0.31% 90.00 1.750%09/11/2015 DO 08/O4/10 SEC ID:3133 WB5 FEDERAL HOME LN BK CONS BD 100.1470 2,000,000.000 2,003,320.00 2,002,940.00 0.40% -380.00 0.500% 11/20/2015 DO 08/23/12 SEC ID:31338OL96 FEDERAL FARM CR BE CONS BD 100.1290 2,000,000.000 2,003,400.00 2,002,580.00 0.40% -820.00 0.500%06/23/2015 DO 05/23/12 SEC ID:3133EARQ3 FHLMC MULTICLASS MTG E3 A 104.0190 93,149.600 93,247.03 96,893.28 0.02% 3,646.25 VAR RT 08/15/2032 DO 12/01/97 SEC ID:3133WE95 FHLMC POOL#78-6064 103.7230 2,844.750 2,775.42 2,950.66 0.00% 195.24 VAR RT 01/01/2028 DO 12/01/97 SEC ID:31348SWZ3 FEDERAL NATL MTG ASSN 100.0440 2,000,000.000 2,001,040.00 2,000,880.00 0.40% -160.00 0.375%03/16/2015 DO 02/06/12 SEC ID:313500HOI FEDERAL NATL MTG ASSN 100.1120 2,000,000.000 2,002,740.00 2,002,240.00 0.40% -500.00 0,500%05/27/2015 DD 04/19/12 SEC ID:3135GOKM4 111412015 1:46:33PM EST 4 Workbench Asset Detail Report ID: GL8013 �' Base Curtency: LED BNY ME LLON by Currency Alternate Base Currency: Exchange Rate: OCSW CONSOLIDATED-OCSG00030000 12/31/2014 Statue: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base FEDERAL NATL MTG ASSN 100.0930 2,000,000.000 2,003,408.00 2,001,860.00 0.40% -1,548.00 0,500%07/02/2015 DD 05/21/12 SEC ID:3135GOLN1 FEDERAL NATL MTG ASSN 100.2480 5,000,000.000 5,021,500.00 5,012,400.00 1.01% -9,100.00 1.750%09/12/2019 DD 09/28/14 SEC ID:3135GOZG1 FNMA POOLk0257179 108.5200 53,396.410 56,471.92 51,945.78 0.01% 1,473.86 4.500%04/01/2028 DD 03/01/08 SEC ID:31371NUC9 FNMA POOLb0357969 110.6670 308,868.870 332,034.04 341,815.91 0.07% 9,781.87 5.000%09/01/2035 DD 09/01/05 SEC ID:31396KT22 FEDERAL HOME LN MTG CORP 100.0950 2,000,000.000 2,002,184.00 2,001,900.00 0.40% -284.00 0.500%04/17/2015 DD 02/21/12 SEC TO 3139EADD8 FNMA POOL#0466397 106.2380 374,353.780 366,252.53 397,705.97 0.08% 31,433.44 3.400% 11/01/2020 DD 11/01/10 SEC TO 31381PDA3 FNMA POOL N0AL0869 108.5200 33,406.450 35,330.60 36,252.68 0.01% 922.08 4.500%06/01/2029 DD 09/01/11 SEC ID:3138EG6F6 MIMIC MULHCLASS MTG 58 2A 114.3120 1,216,857.520 1,378,091.12 1,391,014.17 0.28% 12,923.05 6.500%09/25/2043 DD 09/01/03 SEC ID:31394 35 FNMA GTD REMIC P/T 09-114 A6 98.5430 200,000.000 190,250.00 197,086.00 0.04% 6,836.00 VAR RT 10/27/2037 DO 11/30/07 SEC ID:31396X3Q5 FNMA GTD REMIC P/T 11-3 FA 101.2410 618,770.710 618,577.35 626,449.65 0.13% 7,872.30 VAR RT 02/25/2Ml DO 01/25/11 SEC ID:31397QRE0 FEDERAL NATL MTG ASSN 101.2530 2,000,000.000 2,025,660.00 2,025,060.00 0,41% -600.00 2.000%09/21/2015 DO 09/21/10 SEC ID:3I398A3V FNMA GTD REMIC P/T 10-MI Al 101.6560 305,846.840 317,507.26 310,91 L66 0.06% -6,595.60 3.305%06/25/2019 DO 02/01/10 SEC ID:31398MGL4 FHLMC MULnCLASS MTG K006 A2 109.8440 900,000.000 951,046.88 988,596.00 0,20% 37,549.12 4.251%01/25/2020 DO 04/01/10 SEC ID:31398VJ98 FNMA POOL#0745580 110.6250 290,168.640 311,931.28 320,999.06 0.06% 9,067.78 5.000%06/01/2036 DO 05/01/06 SEC ID:31403DJZ3 111412015 1:46:33PM EST 5 Workbench Asset Detail Report ID: GL8013 �' Base Curtency: LED BNY ME LLON by Currency Alternate Base Currency: Exchange Rate: OCSD CONSOLIDATED-OCSG00030000 12/31/2014 Statue: FINAL Net Unrealized Price Coat Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base FNMA POOL#0748678 110.6030 8,438,320 9,071,19 9,333.04 0.00% 26185 5,000% 10/01/2033 DO 10/01/03 SEC ID:31403GXF4 FNMA POOLk0815971 110.7290 574,180.680 617,244.23 635,784.53 0.13% 18,540.30 5.000%03/01/2035 DO 03/01/05 SEC ID:31406PQY8 FNMA POOLk0823358 107.5300 239,913.820 238,039.49 257,979.33 0.05% 19,939.84 VAR RT 02/01/2035DD04/01/05 SEC ID:31406X S FNMA POOLb0826080 110.8020 54,528.290 58,617.91 60,418.44 0.01% 1,800.53 5.000%07/01/2035 DO 06/01/05 SEC ID:31409BXH9 FNMA POOL#0888336 110.7260 589,852.660 634,091.61 653,120.26 0.13% 19,028.65 5.000%07/01/2036 DO 04/01/07 SEC TO 31410F4V4 FNMA POOL#OMA0022 108.5200 54,029.120 57,141.06 58,632.40 0.01% 1,491.34 4.500%M/01/2029 DO 03/01/09 SEC TO 31419YAY3 GNMA 11 POOL#0080023 103.4120 32,407.290 32,944.04 33,513.03 0.01% 568.99 VAR RT 12/20/2026 DO 12/01/96 SEC ID:36225CAZ9 GNMA II POOL F080088M 103.9200 38,975.970 39,828.59 40,503.83 0.01% 675.24 VAR RT 06/20/2027 DO 06/01/97 SEC ID:36225CC20 GNMA II POOL F080408X 103.7300 116,289.520 115,108.46 120,627.12 0.02% 5,518.66 VAR RT 05/20/203ODD05/01/00 SEC ID:36225CN28 GNMA II POOL#0080395 103.7300 14,025.280 13,698.16 14,548.42 0.00% 650.26 VAR RT 04/20/203ODD04/01/00 SEC ID:36225CNM4 GNMA II POOL#0080965 103.8800 117,896.290 117,622.62 122,490.67 0,02% 4,648.05 VAR RT 07/20/2034 DD 07/01/04 SEC ID:36225DCB8 GENERAL ELECTRIC CAPITAL CORP 100.6280 1,000,000.000 1,005,820.00 I,006,28000 0,20% 460.00 1.625%07/02/2015 DD 09/02/12 SEC ID:36962G5Z3 GOLDMAN SACHS GROUP INC/THE 99.9990 2,000,000.000 1,895,068.00 I,995,54000 0,40% 100,472.00 VAR RT 03/22/2016 DD 03/22/06 SEC ID:38141GEG5 GOLDMAN SACHS GROUP INC/THE 111.0970 600,000.000 692,806.00 666,582.00 0,13% -26,224.00 5.950%01/18/2018 DD 01/18/08 SEC ID:38141GFG4 111412015 1:46:33PM EST 6 Workbench Asset Detail Report ID: GL8013 �' Bese Curtency: LED BNY ME LLON by Currency Alternate Base Currency: Exchange Rate: OCSD CONSOLIDATED-OCSW0030000 12/31/2014 Statue: FINAL Net Unrealized Price Coat Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base GNMA GTD REMIC P/T 00-9 FH 100.7580 62,776.580 62,976,58 63,252A3 0.01% 495.85 VAR RT 02/16/2030 SEC ID:3839H4NX9 ILLINOIS ST TOLL HIGHWAY AUTH 108.5960 2,500,000.000 2,464,750.00 2,714,900.00 0.55% 250,150.00 5.293%01/01/2024 DD 05/21/09 SEC ID:452252FJ3 INTERNATIONAL BUSINESS MACHINE 100.1750 I,000,000.000 1,001,880.00 1,001,750.00 0.20% -130.00 0.750%05/11/2015 DD 05/11/12 SEC ID:45920OHD6 JPMORGAN CHASE&CO 100.2980 633,000.000 640,292.16 634,886.34 0.13% -5,405.82 1.895%03/20/2015 DO 03/21/12 SEC ID:46623EJP5 JPMORGAN CHASE&CO 116.1580 100,000.000 112,124.00 116,158.00 0.02% 4,034.00 6.300%04/23/2019 DO 04/23/09 SEC TO 46625HHL/ JPMORGAN CHASE&CO 102.6400 500,000.000 506,326.00 513,200.00 0.10% 6,874.00 3.450%03/01/2016 DO 02/24/11 SEC TO 46625HHX1 JPMORGAN CHASE&CO 102.7937 300,000.000 299,658.00 308,381.10 0.06% 8,723.10 3.150%07/05/2016 DO 06/29/11 SEC ID:46625HJA9 JPMORGAN CHASE BANK NA 110.9880 1,100,000.000 1,302,565.00 1,220,868.00 0.25% -81,697.00 6.000% 10/01/2017 DO 09/24/07 SEC ID:48121CYK6 LEHMAN BWH HLD ESC 14.5000 2,000,000.000 1,366,718.96 290,000.00 0.06% -1,076,718.96 0.000% 12/30/2016 DD 10/24/05 SEC ID:525ESCOY6 ESC LEHMAN BRTH BUD ESCROW 14.6250 600,000.000 406,604.83 87,750.00 0.02% -318,854.83 0.000%01/24/2013 DD 01/22/08 SEC ID:525ESCIB7 ELI LILLY&CO 100.5370 4,000,000.000 4,009,675.00 4,021,480.00 0,81% 11,805.00 1.950%03/15/2019 DD 02/25/14 SEC ID:532451BF4 MASSACHUSETTS ST PORT AUTH FAC 119.0110 1,300,000.000 1,300,000.00 1,549,143.00 0,31% 247,143.00 6.202%07/01/2031 DD 06/15/11 SEC ID:575898CS8 MERRILL LYNCH&CO INC 116.2590 2,800,000.000 3,419,664.00 3,255,252.00 0.66% -162,412.00 6.895% 11/15/2018 DD 11/24/98 SEC ID:590188JN9 MET TRANSPRTN AUTH NY REVENUE 138.3040 300,000.000 311,316.00 414,912MO 0.08% 103,596.00 6.814% 11/15/2040 DD 12/29/10 SEC ID:59259YGFO 111412015 1:46:33PM EST 7 Workbench Asset Detail Report ID: GL8013 �' Base Curteney: LED BNY ME LLON by Currency Alternate Base Currency: Exchange Rate: OCBD CONSOMDATED-OCSG00030000 12/31/2014 Statue: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base MORGAN STANLEY 113.4880 2,800,000.000 3,200,848.00 3,1/9,664.00 0.64% -23,184,00 5,500%07/28/2021 DD 07/28/11 SEC ID:61949WAL3 MORGAN STANLEY 101.6180 700,000.000 737,361.00 711,326.00 0.14% -26,035.00 6.000%04/28/2015 DO 04/28/08 SEC ID:61949YCE3 NCUA GUARANTEED NOTES TR R2 lA 100.2790 645,503.870 645,500.93 640,291.92 0.13% 1,790.99 VARRT 11/06/2017DD11/19/10 SEC ID:62888UAA8 NCUA GUARANTEED NOTES TR C1 Al 100.1670 334,110.690 334,972.07 334,668.65 0.07% -303.42 1.600% 10/29/2020 DO 11/10/10 SEC ID:62888XAA2 NEW YORK NY 122.4150 1,300,000.000 1,373,502.00 1,591,395.00 0.32% 217,893.00 5.698%03/01/2027 DD 03/30/10 SEC ID:64966HYK0 NEW YORK CITY NY TRANSITIONAL 107.4740 1,400,000A00 1,400,000.00 1,504,636.00 0.30% 104,636.00 4.075% 11/01/2020 DD 11/03/10 SEC ID:64971M5E8 PEPSIAMERICAS INC 100.1150 619,000.000 638,001.34 619,711.85 0.13% -18,289.49 4.875%01/15/2015 DD 01/10/05 SEC ID:91343PAA9 PHILIP MORRIS INTERNATIONAL IN 112.6630 1,600,000.000 1,854,144.00 1,802,608.00 0.36% -51,536.00 5.650%05/16/2018 DD 05/16/08 SEC ID:718172AA7 PORT AUTH OF NEW YORK&NEW JE 114.3350 2,440,000.000 2,507,633.89 2,989,994.00 0.56% 282,140.11 5.309% 12/01/2019 DD 07/01/09 SEC ID:73358WAG9 PRAXAIR INC 101.0100 387,000.000 401,539.59 390,908.70 0.08% -10,630.89 4.625%03/30/2015 DD 03/07/08 SEC ID:74005PAR5 SLM STUDENT LOAN TRUST 200 9 A 102.7060 50,415.520 50,210.97 51,79936 0,01% 1,568.79 VAR RT 04/25/2023 DD 08/28/08 SEC ID:]8445JAA5 CHARLES SCHWAB CORP/THE 100.2180 1,000,000.000 1,002,700.00 1,002,180.00 0,20% -520.00 0.850% 12/04/2015 DD 12/06/12 SEC ID:808513AH8 SIMON PROPERTY GROUP LP 109.8050 Ip00,000.000 996,050.00 1,098,050.00 0,22% 102,000.00 4.375%03/01/2021 DD 08/16/10 SEC ID:828807CF2 SBA GTD PARTN CTFS 2001-20C 1 107.5300 178,711.650 178,711.65 192,16&64 0.04% 13,456.99 6.340%03/01/2021 SEC ID:83162CWO 111412015 1:46:33PM EST $ Workbench Asset Detail Report ID: GL8013 �' Base Curtency: LED BNY ME LLON by Currency Alternate Base Currency: Exchange Rate: OCSD CONSOLIDATED-OCSW0030000 12/31/2014 Statue: FINAL Net Unrealized Price Coat Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base SOUNDVIEW HOME LOAN TR OPT3 A4 99.2250 205,569.720 181,479,53 203,96.55 0.04% 22,497,02 VAR RT 11/25/2035DD09/30/05 SEC ID:83611MGS1 SOUTHERN CO/THE 101.0890 I,000,000.000 999,810.00 1,010,890.00 0.20% 11,080.00 2.395%09/15/2015 DD 09/19/10 SEC ID:842589CGO TEXAS ST TRANSPRTN COMMISSION 117.2630 1,200,000.000 1,200,000.00 1,407,156.00 0.28% 207,156.00 5.028%04/01/2026 DD 08/05/10 SEC ID:88283LHT6 TOYOTA MOTOR CREDIT CORP 100.1920 5,200,000.000 5,200,000.00 5,209,984.00 1.05% 9,984.00 VAR RT 05/17/2016 DD 05/17/13 SEC ID:89236TAKI U S TREASURY NOTE 99.9950 3,500,000A00 3,500,340.41 3,499,825.00 0.71% -515.41 VAR RT 04/30/2016 DD 04/30/14 SEC ID:912828D31 U STREASURY NOTE 99.9610 19,600,000.000 19,596,171.88 19,592,356.00 3.96% -3,815.88 0.500%08/31/2016 DD 08/31/14 SEC ID:912828D64 U STREASURY NOTE 100.5860 5,800,000.000 5,873,186.87 5,833,988.00 1.18% -39,198.87 1.950%09/30/2019 DD 09/30/14 SEC ID:912828F39 U S TREASURY NOTE 99.5230 12,500,000.000 12,435,979.37 12,440,375.00 2.32% 4,395.63 0.895% 11/15/2017 DD 11/15/14 SEC ID:912828G20 U S TREASURY NOTE 99.7500 15,MO,000.000 14,965,870.56 14,962,500.00 3.03% -3,370.56 0.500% 11/30/2016 DD 11/30/14 SEC ID:912828046 U S TREASURY NOTE 99.3670 7,500,000.000 7,449,634.50 9,452,525.00 1.51% 2,890.50 1.500% 11/30/2019 DD 11/30/14 SEC ID:912828G61 U S TREASURY NOTE 100.0190 3,900,000.000 3,902,021.96 3,900,941.00 0.99% -1,280.96 0.250%02/15/2015 DD 02/15/12 SEC ID:9I2828SE1 U S TREASURY NOTE 100.0630 3,594,000.000 3,603,596.33 3,596,264.22 0.93% -7,332.11 0.395%03/15/2015 DD 03115/12 SEC ID:912828SK7 U S TREASURY NOTE 100.1170 2,000,000.000 2,002,506.70 2,002,340.00 0,40% -166.70 0.395%06/15/2015 DD 06115/12 SEC ID:912828SZ US TREAS-CPI INFLAT 97.4300 3,304,224.000 3,311,666.82 3,219,305.44 0,65% -92,361.38 0.125%07/15/2022 DD 07/15/12 SEC ID:912828TE0 111412015 1:46:33PM EST 9 Workbench Asset Detail Report ID: GL8013 �' Beae Curtency: USD BNY ME LLON by Currency Alte ne[e Base Currency: Exchange Rate: OCSD CONSOLIDATED-OCSG00030000 12/31/2014 Status: FINAL Net Unrealized Price Cost Market Value % of Gain/Loss Description Base Shares Par Base Base Total Base U STREASURY NOTE 100.0940 7,500,000.000 7,510,572.00 7,507,050.00 1.52% -3,522,00 0,375% 11/15/2015 DD 11/15/12 SEC ID:912828TX8 U S TREASURY NOTE 100.0080 10,000,000.000 9,997,299.13 10,000,800.00 2.02% 3,500.87 0.250% 12/15/2015 DD 12/15/12 SEC ID:912828UC2 U S TREASURY NOTE 100.2500 52,900,000.000 52,816,985.09 53,032,250.00 10.72% 215,264.91 1.625%06/30/2019 DD 06/30/14 SEC ID:912828WS5 US TREAS-CPI INFLATION INDEXED 96.3050 10,400,312.000 10,283,027.89 10,016,020.47 2.03% -267,007.42 0.125%07/15/2024 DD 07/15114 SEC ID:91282SWUO U STREASURY NOTE 100.1560 17,400,000A00 17,443,112.67 17,427,144.00 3.52% -15,968.67 1.625%07/3112019 DD 07/31/14 SEC ID:9I2828W W6 UNITEDHEALTH GROUP INC 100.8540 604,000.000 626,967.92 609,158.16 0.12% -17,809.76 4.895%03/15/2015 DD 03/07/05 SEC ID:9I324PAM4 UNIV OF CALIFORNIA CA ROTS MED 112.1450 400,000.000 400,000.00 448,580.00 0.09% 48,580.00 5.035%05/15/2021 DD 11/18/10 SEC ID:913366EJ5 WACHOWA BANK NA 100.3100 624,000.000 643,635.45 625,934.40 0.13% -17,701.05 4.895%02/01/2015 DD 01/31/05 SEC ID:92976GAD3 WELLS FARGO HOME EQUITY 2 A16 100.4730 40,503.440 40,199.66 40,695.02 0.01% 495.36 VAR RT 10/25/2034 DD 09/01/04 SEC ID:94980GAG6 WELLS FARGO BANK NA 100.2410 6,300,000.000 6,297,795.00 6,315,183.00 1.28% 17,388.00 0.950%07/20/2015 DD 09/29/13 SEC ID:94985H5F7 WELLS FARGO BANK NA 100.0200 500,000.000 500,000.00 500,100.00 0.10% 100.00 VAR RT 06/15/2017 DD 06/12/14 SEC ID:94988J2L0 TOTAL FLUID INCOME SECURITIES 292,119,071.570 284,623,624.33 285,394,043.03 97.71% 770,418.70 TOTAL ASSETS U.B.DOLLAR 494,369,734."0 493,858,740.17 494,569,857.10 LOU 005/e 711,116.93 TOTAL ASSETS-BASE: 494,369,734."0 493,858,740.17 494,569,857.10 100.001/e 711,116.93 111412015 1:46:33PM EST 10 Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Ctura.ry: USD OCSD-CONSOLIDATED -OCSGOOOl0O00 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Cost Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base RECEIPTS AND DISBURSEMENT TRANSACTIONS CASH/SECURITIES RECEIVED FROM PLAN ADMINISTRATOR U.S.DOLLAR RECD FROM PLAN ADMIN CD 9/19/2014 0.000 6,738.75 0.00 0.00 6,738.75 0.00 0.00 OCSF07511102 OCS LIQ OF CHANDLER RECENED FROM PLAN ADMIN CD 12/4/2014 0.000 20,500,000.00 0.00 0.00 20,500,000.00 0.00 0.00 OCSF07522202 OCS LONG CHANDLER CD 12/18/2014 0.000 23,000,000.00 0.00 0.00 23,000,000.00 0.00 0.00 OCSF07511102 OCS LIQ OF CHANDLER CD 12/18/2014 0.000 95,000,000.00 0.00 0.00 95,000,000.00 0.00 0.00 OCSF07522202 OCS LONG CHANDLER 138,5M,000.00 0.00 0.00 138,500,00ILM 0.00 0.00 0.001 0.00 T 0.00 C 0.008 TOTAL U.B.DOLLAR: 138,506,738.75 0.00 0.00 138,506,738.75 0.00 0.00 0.001 0.00 T 0.00 C 0.006 TOTAL CASH/SECURITIES RECEIVED 138,506,738.75 0.00 0.00 138,506,739.75 0.00 0.00 FROM PLAN ADMINISTRATOR: 0.001 0.00 T 0.00 C O.OD S MISCELLANEOUS INCOME U.S.DOLLAR TO BRING ACCOUNT INTO BALANCE WITH 31 DEC 2014 SEC ID:912828W O SW 12/31/2014 -25,064,000 0.00 -25,064.00 0.00 0.00 0.00 0.00 OCSF07522202 OCS LONG CHANDLER TO BRING ACCOUNT INTO BALANCE W M 31 DEC 2014 SEC ID:912828TEO SW 12/31/2014 -7,968.000 0.00 -7,968.00 0.00 0.00 0.00 0.00 OCSF07522202 OCS LONG CHANDLER TOTAL U.B.DOLLAR: 0.00 -33,032.00 0.00 0.00 0.00 0.00 0.001 0.00 T 0.00 C 0.00 S 111412015 1:54:41PM EST 1 'Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Ctura.ry: USD OCSD-CONSOLIDATED -OCSGOOOl0O00 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Cost Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base TOTAL MISCELLANEOUS INCOME: 0.00 .33,032.00 0.00 0.00 0.00 0.00 0.001 0.00 T 0.00 C coca TOTAL RECEIPTS AND DISBURSEMENT 138,506,739.75 -33,032.00 0.00 139,506,739.75 0.00 0.00 TRANSACTIONS: 0.001 0.00 T 0.00 C 0.008 PURCHASES CASH&CASH EQUIVALENTS U.S.DOLLAR AMEWCAN HONDA FN DISC Ol/1612015 SEC ID:02665KNG8 B 12/22/2014 8,000,000.000 -7,999,333.36 7,999,333.36 0.00 -7,999,333.36 0.00 0.00 12/22/2014 OCSF07522202 OCS LONG CHANDLER BANK OF NEW YORK CASH RESERVE 0.063%12/31/2049 DO 10/30/08 SEC ID:99WAH408 B 12/15/2014 1,998.400 -1,998.40 1,998.40 0.00 -1,998.40 0.00 0.00 12/15/2014 OCSF07522202 OCS LONG CHANDLER BANK TOKYO-MITSUB DISC 01/30/2015 SEC ID:06538CNW7 B 12/4/2014 1,000,000.000 -999,720.00 999,720.00 0.00 -999,720.00 0.00 0.00 12/5/2014 OCSF09511102 OCS LIQ OF CHANDLER B 12/19/2014 8,000,000.000 -7,998,320.00 7,998,320.00 0.00 -7,998,320.00 0.00 0.00 12/19/2014 OCSF07522202 OCS LONG CHANDLER .8,998,090.00 8,998,0,;oDo 0.00 .8,998,090.00 0.00 0.00 0.001 0.00 T 0.00 C 0.00 S DREYFUS TREAS&AGY CSH CSH MG VAR RT 12/31/2049 DD 04/09/97 SEC ID:996085247 B 12/1/2014 180,811.380 -180,811.38 180,811.38 0.00 -180,811.38 0.00 0.00 12/t/2014 OCSF07522202 OCS LONG CHANDLER B 12/2/2014 12.310 -12.51 12.51 0.00 -12.51 0.00 0.00 12/2/2014 OCSF07511102 OCS LIQ OF CHANDLER B 12/2/2014 12,020 -12.02 12.02 0.00 -12.02 0.00 0.00 12/2/2014 OCSF07522202 OCS LONG CHANDLER 111412015 1:54:41PM EST 2 'Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Cu.renoy: DSD OCSD-CONSOLMATED -OCSG00030000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Coat Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base B 12/3/2014 600,000.000 -600,000.00 600,000.00 0.00 -600,000.00 0.00 0.00 12/3/2014 OCSF07511102 OCS LIQ OF CHANDLER B 12/4/2014 20,500,000.000 -20,500,000.00 20,500,000.00 0.00 -20,500,000.00 0.00 0.00 12/4/2014 OCSF07522202 OCS LONG CHANDLER e 12/12/2014 12,290,381.250 -12,290,381.25 12,290,381.25 0.00 -12,290,381.25 0.00 0.00 12/12/2014 OCSF07522202 OCS LONG CHANDLER B 12/12/2014 1,080,372.220 -1,080,372.22 1,080,372.22 0.00 -1,080,372.22 0.00 0.00 12/12/2014 OCSF07511102 OCS LIQ OF CHANDLER B 12/15/2014 664,994.950 -664,994.95 664,994.95 0.00 -664,994.95 0.00 0.00 12/15/2014 OCSF07511102 OCS LIQ OF CHANDLER B 12/15/2014 645.470 -645.47 645.47 0.00 -645.47 0.00 0.00 12/15/2014 OCSF07522202 OCS LONG CHANDLER B 12/18/2014 23,000,000.000 -23,000,000.00 23,000,000.00 0.00 -23,000,000.00 0.00 0.00 12/18/2014 OCSF07511102 OCS LIQ OF CHANDLER B 12/18/2014 95,000,000.000 -95,000,000.00 95,000,000.00 0.00 -95,000,000.00 0.00 0.00 12/18/2014 OCSF07522202 OCS LONG CHANDLER B 12/23/2014 5,000.000 -5,000.00 5,000.00 0.00 -5,000.00 0.00 0.00 12/23/2014 OCSF07511102 OCS LIQ OF CHANDLER B 12/26/2014 170,750.650 -170,750.65 170,750.65 0.00 -170,750.65 0.00 0.00 12/26/2014 OCSFO7522202 OCS LONG CHANDLER B 12/30/2014 6,782.440 -6,982A4 6,782.44 0.00 -6,782.44 0.00 0.00 12/30/2014 OCSF07522202 OCS LONG CHANDLER e 12/31/2014 429,812.500 -429,812.50 429,812.50 0.00 -429,812.50 0.00 0.00 12/31/2014 OCSF07522202 OCS LONG CHANDLER B 12/31/2014 2,300,000.000 -2,300,000.00 2,300,000.00 0.00 -2,300,000.00 0.00 0.00 12/31/2014 OCSF07511102 OCS LIQ OF CHANDLER -156,229,359.39 156,229,355.39 0.00 -156,229,359.39 0.00 0.00 0.001 0.00 T 0.00 C 0.008 EXXON CORP DISC 01/29/2015 SEC ID:30229BW5 111412015 1:54:41PM EST 3 'Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Cu.renoy: DSD OCSD-CONSOLIDATED -OCSG00010000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Coat Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base B 12/19/2014 8,000,000.000 -7,998,906.67 7,998,906.67 0,00 -7,998,906.67 0.00 0.00 12/19/2014 OCSF07522202 OCS LONG CHANDLER FEDERAL HOME LN BE CONS DISC MAT 01/28/2015 SEC ID:313384BDO B 12/12/2014 2,500,000.000 -2,499,738.89 2,499,738.89 0.00 -2,499,738.89 0.00 0.00 12/12/2014 OCSF07511102 OCS LIQ OF CHANDLER B 12/19/2014 20,000,000.000 -19,997,997.78 19,997,999.78 0.00 -19,997,999.78 0.00 0.00 12/19/2014 OCSF07522202 OCS LONG CHANDLER -22,497,516.67 22,497,516.67 0.00 -22,497,516.67 0.00 0.00 0.001 0.00 T 0.00 C 0.008 FEDERAL HOME LN MTG CORP DISC 0.000%01/23/2015 DD 01/23/201 SEC ID:313396AY9 B 12/5/2014 2,000,000.000 -1,999,836.67 1,999,836.67 0.00 -1,999,836.67 0.00 0.00 12/5/2014 OCSF07511102 OCS LIQ OF CHANDLER FEDERAL HOME LN MTG CORP DISC MAT 01/28/2015 SEC ID:313396BD4 B 12/5/2014 4,000,000.000 -3,999,716.67 3,999,716.67 0.00 -3,999,716.67 0.00 0.00 12/8/2014 OCSF07511102 OCS LIQ OF CHANDLER B 12/5/2014 1,000,000.000 -999,929.17 999,929.17 0.00 -999,929.17 0.00 0.00 12/8/2014 OCSF07522202 OCS LONG CHANDLER -4,999,645.84 4,999,645.84 0.00 -4,999,645.84 0.00 0.00 0.001 0.00 T 0.00 C 0.003 FEDERAL NATL MTG ASSN DISC NT MAT 01/22/2015 SEC ID:313588AX3 B 12/22/2014 6,000,000.000 -5,999,586.67 5,999,586.67 0.00 -5,999,586.67 0.00 0.00 12/22/2014 OCSF07522202 OCS LONG CHANDLER PACCAR FINL CORP DISC 01/21/2015 SEC ID:6939213NM8 B 12/12/2014 1,000,000.000 -999,888.89 999,888.89 0.00 -999,888.89 0.00 0.00 12/12/2014 OCSF07511102 OCS LIQ OF CHANDLER PACCAR FINL CORP DISC 01/29/2015 SEC ID:69392BW8 B 12/22/2014 4,600,000.000 -4,599,368.79 4,599,368.79 0.00 -4,599,368.79 0.00 0.00 12/22/2014 OCSF07522202 OCS LONG CHANDLER 111412015 1:54:41PM EST 4 'Pending SM0.e ut Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Ctura.ry: USD OCSD-CONSOLIDATED -OCSG00010000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Cost Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base PNC BANK N A DISC 09/02/2015 SEC ID:69349KW22 e 12/10/2014 500,000.000 -498,601.39 498,601.39 0.00 -498,601.39 0.00 0.00 12/11/2014 OCSF07511102 OCS LIQ OF CHANDLER B 12/10/2014 7,000,000.000 -6,980,419.44 6,980,419.44 0.00 -6,980,419.44 0.00 0.00 12/11/2014 OCSFO7522202 OCS LONG CHANDLER -7,479,020.83 7,479,020.83 0.00 -7,479,020.83 0.00 0.00 0.001 0.00 T 0.00 C 0.008 TOTAL SETTLED U.S.DOLLAR: -229,802,498.18 229,802,499.19 0.00 -229,802,498.18 0.00 0.00 0.001 0.00 T 0.00 c 0.008 TOTAL SETTLED CASH&CASH -229,802,498.18 229,802,498.18 0.00 -229,SM,498.18 0.00 0.00 EQUIVALENTS: 0.001 0.00 T 0.00 C 0.008 FIXED INCOME SECURITIES U.S. DOLLAR CATERPILLAR FINANCIAL SERVICES 1.100%05/29/2015 DD 05/30/12 SEC ID: 14912L5D9 B 12/22/2014 1,000,000.000 -1,003,340.00 1,003,340.00 0.00 -1,003,340.00 0.00 0.00 12/26/2014 OCSF07511102 OCS LIQ OF CHANDLER CATERPILLAR INC 0.950%06/26/2015 DO 06/26/12 SEC ID: 149123BY6 B 12/22/2014 1,000,000.000 -1,003,280.00 1,003,280.00 0.00 -1,003,280.00 0.00 0.00 12/26/2014 OCSF0751 t 102 OCS LIQ OF CHANDLER CHARLES SCHWAB CORP/THE 0.850%12/04/2015 DO 12/06/12 SEC TO 808513AHS B 12/29/2014 1,000,000.000 -1,002,700.00 1,002,700.00 0.00 0.00 0.00 0.00 1/2/2015 OCSF07511102 OCS LIQ OF CHANDLER CHEVRON CORP 1.104% 12/05/2017 DO 12/05/12 SEC ID: 166964AA8 B 12/4/2014 4,000,000.000 -3,977,200.00 3,997,200.00 0.00 -3,997,200.00 0.00 0.00 12/9/2014 OCSF07522202 OCS LONG CHANDLER COSTCO WHOLESALE CORP 0.650% 12/07/2015 DO 12/07/12 SEC TO 22160KAD7 111412015 1:54:41PM EST 5 'Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Cu.renoy: DSD OCSD-CONSOLIDATED -OC8000010000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Coat Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base " B 12/29/2014 1,000,000.000 -1,001,340.00 1,001,340.00 0,00 0.00 0.00 0.00 1/2/2015 OCSF07511102 OCS WQ OF CHANDLER ELI LILLY&CO 1A50%03/15/2019 DD 02/25/14 SEC ID:532457BF4 B 12/4/2014 2,500,000.000 -2,507,125.00 2,507,125.00 0.00 -2,507,125.00 0.00 0.00 12/9/2014 OCSF07522202 OCS LONG CHANDLER B 12/9/2014 1,500,000.000 -1,502,550.00 1,502,550.00 0.00 -1,502,550.00 0.00 0.00 12/12/2014 OCSF07522202 OCS LONG CHANDLER -4,009,675.00 4,009,675.00 0.00 -4,009,675.00 0.00 0.00 0.001 0.00 T 0.00 C 0.008 FEDERAL FARM CR BK CONS BD 0,500%06/23/2015 DO 05/23/12 SEC ID:3133EARQ3 B 12/19/2014 2,000,000.000 -2,003,400.00 2,003,400.00 0.00 -2,003,400.00 0.00 0.00 12/22/2014 OCSF07511102 OCS LIQ OF CHANDLER FEDERALFARM CREK CONS BD 1.500%11/16/2015DD11/15/10 SEC ID:31331J251 B 12/26/2014 2,000,000.000 -2,021,180.00 2,021,180.00 0.00 -2,021,180.00 0.00 0.00 12/29/2014 OCSF07511102 OCS LIQ OF CHANDLER FEDERAL HOME LN BK CONS BD 0.500% 11/20/2015 DD 08/23/12 SEC ID:31338OL96 B 12/24/2014 2,000,000.000 -2,003,320.00 2,003,320.00 0.00 -2,003,320.00 0.00 0.00 12/26/2014 OCSF07511102 OCS LIQ OF CHANDLER FEDERAL HOME LN BK CONS BD 1.750%09/11/2015 DD 08/04/10 SEC ID:313340JB5 B 12/26/2014 1,500,000.000 -1,515,240.00 1,515,240.00 0.00 -1,515,240.00 0.00 0.00 12/29/2014 OCSF07511102 OCS LIQ OF CHANDLER FEDERAL HOME LN MTG CORP 0.500%04/17/2015 DO 02/21/12 SEC ID:3137EADD8 B 12/19/2014 2,000,000.000 -2,002,184.00 2,002,184.00 0.00 -2,002,184.00 0.00 0.00 12/22/2014 OCSF07511102 OCS LIQ OF CHANDLER FEDERAL NATL MTG ASSN 0.375%03/16/2015 DO 02/06/12 SEC ID:3135GOHGI B 12/19/2014 2,000,000.000 -2,001,040.00 2,001,040.00 0.00 -2,001,040.00 0.00 0.00 12/22/2014 OCSF07511102 OCS LIQ OF CHANDLER FEDERAL NATL MTG ASSN 0.500%05/27/2015 DO 04/19/12 SEC TO 3135GOKM4 111412015 1:54:41PM EST 6 'Pending SM0.e ut Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Cu.renoy: USD OCSD-CONSOLIDATED -OCSG00010000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Coat Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base B 12/19/2014 2,000,000.000 -2,002,740.00 2,002,740.00 0,00 -2,002340.00 0.00 0.00 12/22/2014 0CSF07511102 OCS LIQ OF CHANDLER FEDERAL NATL MTG ASSN 0.500%07/02/2015 DO 05/21/12 SEC ID:3I35GOLN1 B 12/19/2014 2,000,000.000 -2,003,408.00 2,003,408.00 0.00 -2,003,408.00 0.00 0.00 12/22/2014 OCSF07511102 OCS LIQ OF CHANDLER FEDERAL NATL MTG ASSN 1.750%09/12/2019 DO 07/28/14 SEC ID:3135GOZG1 B 12/15/2014 5,000,000.000 -5,021,500.00 5,021,500.00 0.00 -5,021,500.00 0.00 0.00 12/16/2014 OCSF07522202 OCS LONG CHANDLER FEDERALNATLarGASSN 2.000%09/21/2015DD09/21/10 SEC ID:31398MT7 B 12/24/2014 2,000,000.000 -2,025,660.00 2,025,660.00 0.00 -2,025,660.00 0.00 0.00 12/26/2014 OCSF07511102 OCS LIQ OF CHANDLER GENERAL ELECTRIC CAPITAL CORP 1,625%07/02/2015 DD 07/02/12 SEC ID:36962G5Z3 B 12/22/2014 1,000,000.000 -1,005,820.00 1,005,820.00 0.00 -1,005,820.00 0.00 0.00 12/26/2014 OCSF07511102 OCS LIQ OF CHANDLER INTERNAMONAL BUSINESS MACHINE 0.750%05/11/2015 DO 05/11/12 SEC ID:459200HD6 B 12/22/2014 1,000,000.000 -1,001,880.00 1,001,880.00 0.00 -1,OO1,880.00 0.00 0.00 12/26/2014 OCSF07511102 OCS LIQ OP CHANDLER JOHN DEERE CAPITAL CORP 0.900%09/04/2015 DO 09/07/12 SEC TO 24422ERV3 B 12/22/2014 1,008,000.000 -1,009,340.64 1,009,340.64 0.00 -1,009,340.64 0.00 0.00 12/26/2014 OCSF07511102 OCS LIQ OF CHANDLER JOHNDEERECAP[TALCORP 2.300%09/16/2019DD09/15/14 SEC ID:24422ESS9 B 12/4/2014 1,200,000.000 -1,204,956.00 1,204,956.00 0.00 -1,204,956.00 0.00 0.00 12/9/2014 OCSF00522202 OCS LONG CHANDLER U STREASURY NOTE 0.250% 12/15/2015 DO 12/15/12 SEC TO 912828UC2 B 12/19/2014 10,000,000.000 -9,997,299.13 9,997,299.13 0.00 -9,997,299.13 0.00 0.00 12/22/2014 OCSF07522202 OCS LONG CHANDLER U S TREASURY NOTE 0.375%06/15/2015 DO 06/15/12 SEC ID:912828SM 111412015 1:54:41PM EST 7 'Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Cu.renoy: USD OCSD-CONSOLMATED -OC8000010000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Coat Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base " B 12/31/2014 2,000,000.000 -2,002,506.70 2,002,506.70 0,00 0.00 0.00 0.00 1/2/2015 OCSF07511102 OCS UQ OF CHANDLER US TREASURY NOTE 0.375% 11/15/2015 DO 11/15/12 SEC ID:9I2828TX8 B 12/15/2014 7,500,000.000 -7,510,5/2.00 7,510,512.00 0.00 -7,510,512.00 0.00 0.00 12/16/2014 OCSF07522202 OCS LONG CHANDLER U S TREASURY NOTE 0.500% 11/30/2016 DO 11/30/14 SEC ID:912828G46 B 12/8/2014 5,000,000.000 -4,986,930.81 4,986,930.81 0.00 -4,986,930.81 0.00 0.00 12/9/2014 OCSF07522202 OCS LONG CHANDLER B 12/15/2014 2,500,000.000 -2,496,492.75 2,496,492.73 0.00 -2,496,492.73 0.00 0.00 12/16/2014 OCSF07522202 OCS LONG CHANDLER B 12/19/2014 7,500,000.000 -7,482,447.00 7,482,447.00 0.00 -7,482,447.00 0.00 0.00 12/22/2014 OCSF07522202 OCS LONG CHANDLER -14,965,B70.56 14,965,B70.56 0.00 -14,965,B70.56 0.00 0.00 0.001 0.00 T 0.00 C 0.008 U S TREASURY NOTE 0.875% 11/15/2017 OD 11/15/14 SEC ID:912828G20 B 12/8/2014 5,000,000.000 -4,972,868.31 4.972,868.31 0.00 -4,972,868.31 0.00 0.00 12/9/2014 OCSF07522202 OCS LONG CHANDLER B 12/19/2014 7,500,000.000 -7,463,111.06 7,463,111.06 0.00 -7,463,111.06 0.00 0.00 12/22/2014 OCSF07522202 OCS LONG CHANDLER -12,435,979.37 12,435,979.37 0.00 .12,435,979.37 0.00 0.00 0.001 0.00 T 0.00 C 0.008 U S TREASURY NOTE 1.500% 11/30/2019 DO 11/30/14 SEC TO 9I2828G61 B 12/19/2014 7,500,000.000 -7,449,634.50 7,449,634.50 0.00 -7,449,634.50 0.00 0.00 12/22/2014 OCSF07522202 OCS LONG CHANDLER TOTAL SETTLED B.S.DOLLAR: -99,174,919.20 89,174,519.20 0.00 -99,174,919.20 0.00 0.00 0.001 0.00 T 0.00 C 0.008 111412015 1:54:41PM EST 8 'Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Ctura.ry: USD OCSD-CONSOLIDATED -OCSG00010000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Cost Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base TOTAL SETTLED FIXED INCOME -89,174,519.20 89,174,519.20 0.00 -89,174,519.20 0.00 0.00 SECURITIES: 0.001 0.00 T 0.00 c coca TOTAL SETTLED PURCHASES: -319,977,017.39 318,999,017.38 0.00 -318,977,017.38 0.00 0.00 0.001 0.00 T 0.00 C 0.008 SALES CASH&Case EQUIVALENTS U.S.DOLLAR BANK OF NEW YORK CASH RESERVE 0.063%12/31/2M9 DD 10/30/08 SEC ID:99WAH408 S 12/16/2014 -1,998,400 1,998.40 -1,998.40 0.00 1,998.40 0.00 0.00 12/16/2014 OCSF07522202 OCS LONG CHANDLER DREYFUS TREAS&AGY CSH CSH MG VAR RT 12/31/2049 DD 04/09/97 SEC ID:996085247 S 12/5/2014 -2,999,556.670 2,999,556.67 -2,999,556.67 0.00 2,999,556.67 0.00 0.00 12/5/2014 OCSF07511102 OCS LIQ OP CHANDLER S 12/5/2014 -128,601.000 128,601.00 -128,601.00 cw 128,601.00 0.00 0.00 12/5/2014 OCSF07522202 OCS LONG CHANDLER S 12/8/2014 -3,999,716.670 3,999,716.67 -3,999,716.67 0.00 3,999,716.67 0.00 0.00 12/8/2014 OCSF07511102 OCS LIQ OF CHANDLER S 12/8/2014 -985,673.040 985,673.04 -985,673.04 0.00 985,673.04 0.00 0.00 12/8/2014 OCSM7522202 OCS LONG CHANDLER S 12/9/2014 -13,245,113.400 13,245,113.40 -13.245,113.40 0.00 13,245,113.40 0.00 0.00 12/9/2014 OCSF07522202 OCS LONG CHANDLER S 12/11/2014 -498,601.390 498,601.39 -498,601.39 0.00 498,601.39 0.00 0.00 12/11/2014 OCSF07511102 OCS WQ OF CHANDLER S 12/11/2014 -2,925,255.900 2,925,255.90 -2,925,255.90 0.00 2,925,255.90 0.00 0.00 12/11/2014 OCSF07522202 OCS LONG CHANDLER S 12/16/2014 -15,051,264.530 15,051,264.53 -15,051,264.53 0.00 15,051,264.53 0.00 0.00 12/16/2014 OCSF07522202 OCS LONG CHANDLER 5 12/19/2014 -35,895,004.450 35,895,004.45 -35,895,004.45 0.00 35,895,004.45 0.00 0.00 12/19/2014 OCSF07522202 OCS LONG CHANDLER 111412015 1:54:41PM EST 9 'Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Currency: USD OCSD-CONSOLMATED -OC8G00010000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Coat Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base S 12/22/2014 -10,026,966.440 10,026,966.44 -10,026,966.44 0.00 10,026,966.44 0.00 0.00 12/22/2014 OCSF07511102 OCS LIQ OF CHANDLER S 12/22/2014 -32,899,162.310 32,899,162.31 -32,899,162.31 0.00 32,899,162.31 0.00 0.00 12/22/2014 OCSF07522202 OCS LONG CHANDLER 5 12/26/2014 -9,076,008.070 9,076,008.07 -9,076,008.07 0.00 9,076,008.07 0.00 0.00 12/26/2014 OCSF07511102 OCS LIQ OF CHANDLER S 12/29/2014 -3,547,878.330 3,547,878.33 -3,547,878.33 0.00 3,547,878.33 0.00 0.00 12/29/2014 OCSF07511102 GUS MQ OF CHANDLER 131,278,902.20 -131,279,902.20 0.00 131,278,802.20 0.00 0.00 0.001 0.00 T 0.00 C 0.008 TOTAL SETTLED U.S.DOLLAR: 131,280,800.60 -131,280,800.60 0.00 131,280,800.60 0.00 0.00 0.001 0.00 T 0.00 C 0.00 S TOTAL SETTLED CASH Is CASH 131,280,800.60 -131,280,800.60 0.00 131,280,800.60 0.00 0.00 EQUIVALENTS: 0.001 0.00 T 0.00 C coos FIRED INCOME SECURITIES U.S.DOLLAR AMERICAN MUM MR-OHIO INC OH 7.734%02/15/2033 DO 12/21/10 SEC ID:02765UEH3 S 12/8/2014 -1,300,000.000 1,765,010.00 -1,337,284.00 427,726.00 1,765,010.00 0.00 0.00 12/11/2014 427,726.001 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S GOLDMAN SACHS GROUP INC/THE 3.625%01/22/2023 DD 01/22/13 SEC ID:38141GRD8 S 12/4/2014 -2,500,000.000 2,528,900.00 -2,503,600.00 25,300.00 2,528,900.00 0.00 0.00 12/9/2014 25,300,001 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S NEW JERSEY ST TURNPIKE AUTH 7.4140%01/01/2040 DD 04/28/09 SEC ID:646139W35 S 12/8/2014 -1,500,000.000 2,208,330.00 -1,634,565.00 573,765.00 2,208,330.00 0.00 0.00 12/t 1/2014 573,765.001 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S TOTAL SETTLED U.S.DOLLAR: 6,502,240.00 .5,475,449.00 1,026,791.00 6,502,240.00 0.00 0.00 1,026,791.00 1 0.00 T 0.00 C 0.00 S 111412015 1:54:41PM EST 10 'Pending SctUemcnt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Ctut,a. y: USD OCSD-CONSOLIDATED -OCSG00010000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Cost Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base TOTAL SETTLED FIXED INCOME 6,502,240.00 -5,475,449.00 1,026,791.00 6,502,240.00 0.00 0.00 SECURITIES: 1,026,791.001 0.00 T 0.00 C coca TOTAL SETTLED SALES: 137,783,040.60 -136,756,249.60 1,026,791.00 137,783,040.60 0.00 0.00 1,026,791.001 0.00 T 0.00 C 0.008 PRINCIPAL PAYMENTS FDOSD INCOME SECURITIES U.S.DOLLAR FNLMC POOL#98-6064 VAR RT 01/01/2028 DD 12/01/97 SEC ID:3I348SWZ3 PC 11/1/2014 -15.5W 15.56 0.00 0.00 15.56 0.00 0.00 12/15/2014 OCSF07522202 OCS LONG CHANDLER ' PD 12/1/2014 -15.600 15.60 -15.22 0.38 0.00 0.00 0.00 12/1/2014 0.381 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S 15.56 0.00 0.00 18.56 0.00 0.00 0.001 0.00 T 0.00 C 0.00 8 FNLMC MULTICLASS MTG 58 2A 6.500%09/25/2043 DO 09/01/03 SEC ID:31394 35 PD 12/1/2014 -5,480,480 5,480.48 -6,206.64 -926.16 5,480.48 0.00 0.00 12/26/2014 -926.16E 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FHLMC MULTICLASS MPG E3 A VAR RT 08/15/2032 DD 12/01/97 SEC ID:3133TCE93 PD 11/1/2014 -1,998.400 1,998.40 -2,000.49 -2.09 1,998.40 0.00 0.00 12/15/2014 -2.09 1 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOL#0257179 4.500%04/01/2028 DO 03/01/08 SEC ID:31371NUC7 PD 12/1/2014 -2,340.460 2,340.46 -2,475.27 -134.81 2,340.46 0.00 0.00 12/26/2014 -134.911 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOL#0357969 5.000%09/01/2035 DO 09/01/05 SEC ID:31376=2 PD 12/1/2014 -8,150.460 8,150.46 -8,761.74 -611.28 8,150.46 0.00 0.00 12/26/2014 -611.281 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOL#0466395 3.400% 11/01/2020 DO 11/01/10 SEC ID:31381PDA3 111412015 1:54:41PM EST 11 'Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Cu.renoy: DSD OCSD-CONSOLIDATED -OCSG00030000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Cost Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base PO 12/1/2014 -597.440 597.44 -584.51 12.93 597.44 0.00 0.00 12/26/2014 12.931 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOL80745580 5.000%06/01/2136DD05/01/06 SEC ID:31403WM PD 12/1/2014 -6,981.730 6,981.73 -7,505.36 -523.63 6,981.73 0.00 0.00 12/26/2014 -523.63 1 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOL#0748678 5.000% 10/01/2033 DO 10/01/03 SEC ID:31403GXF4 PD 12/1/2014 -599.470 599.47 -644.43 -44.96 599.47 0.00 0.00 12/26/2014 -44.961 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOLA0815971 5.000%03/01/2035DD03/01/05 SEC ID:31406PQY8 PD 12/1/2014 -21,791.580 21,791.58 -23,425.95 -1,634.37 21,791.58 0.00 0.00 12/26/2014 -1,634,371 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOL#0823358 VAR RT 02/01/2035 DO 04/01/05 SEC TO 31406XWT5 PD 12/1/2014 -772.240 772.24 -966.21 6.03 772.24 0.00 0.00 12/26/2014 6.031 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOLX0826080 5.000%07/01/2035DD06/01/05 SEC TO 31409BXH7 PD 12/1/2014 -884.380 884.38 -950.71 -66.33 884.38 0.00 0.00 12/26/2014 -66.331 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOL#0888336 5.000%07/01/2036 DO 04/01/07 SEC ID:3I41OF4V4 PD 12/1/2014 -11,390.590 11,390.59 -12,244.88 -854.29 11,390.59 0.00 0.00 12/26/2014 -854,291 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOL80AL08694.5000/,06/01/2029DD09/01/11 SEC ID:3I38EG6F6 PD 12/1/2014 -668.530 668.53 407.04 -38.51 668.53 0.00 0.00 12/26/2014 -38.511 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA POOL A0MA00224.500%04/01/2029 DO 03/01/09 SEC ID:3141TYAY3 PD 12/1/2014 -971,020 971.02 -1,026.95 -55.93 971.02 0.00 0.00 12/26/2014 -55.931 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA GTD REMIC P/T 10-M1 Al 3.305%06/25/2019 DD 02/Ol/10 SEC ID:31398MGL4 111412015 1:54:41PM EST 12 'Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Cu.renoy: DSD OCSD-CONSOLMATED -OC8G00030000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Coat Gain/Loss Code Settle Date Shares/Par Base Base Base Baae Base Base PD 12/1/2014 -43,891.500 43,891.50 -45,564.87 -1,673.37 43,891.50 0.00 0.00 12/26/2014 -1,673.37 1 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S FNMA GTD REMIC P/T 11-3 FA VAR RT 02/25/2041 DD Ol/25/11 SEC ID:31397QMO PD 12/25/2014 -13,482.950 13,482.95 -13,478.74 4.21 13,482.95 0.00 0.00 12/26/2014 4.21 I 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S GNMA GM REMIC P/T 00-9 FH VAR RT 02/16/2030 SEC ID:3839H4NX9 PD 12/16/2014 -1,072.150 1,072.15 -1,072.15 0.00 1,072.15 0.00 0.00 12/16/2014 OCSF07522202 OCS LONG CHANDLER GNMA II POOL#0080023 VAR RT 12/20/2026 DD 12/01/96 SEC ID:36225CAZ9 PD 12/1/2014 -811.750 811.75 -825.19 -13.44 811.75 0.00 0.00 12/22/2014 -13.441 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S GNMA II POOL#0080395 VAR RT 04/20/2030 DD 04/01/00 SEC ID:36225CNM4 PD 12/1/2014 -64.520 64.52 -63.94 0.58 64.52 0.00 0.00 12/22/2014 0.581 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S GNMA II POOL#0080965 VAR RT 07/20/2034 DD 07/01/04 SEC ID:36225DCB8 PD 12/t/2014 -802.240 802.24 -801.74 0.50 802.24 0.00 0.00 12/22/2014 0.501 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S GNMA II POOL M080088M VAR RT 06/20/2027 DO 06/01/97 SEC ID:36225CC20 PD 12/1/2014 -323.330 323.33 -330.40 -T09 323.33 0.00 0.00 12/22/2014 -7.07 I 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S GNMA II POOL M080408X VAR RT 05/20/2030 DO 05/01/00 SEC ID:36225CN28 PD 12/1/2014 -1,966.700 1,966.70 -1,946.73 19.97 1,966.70 0.00 0.00 12/22/2014 19.971 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S NCUA GUARANTEED NOTES TR CI Al 1.600% 10/29/2020 DD 11/10/10 SEC ID:62888XAA2 PD 11/27/2014 -6,329.300 6,329.30 -6,345.62 -16.32 6,329.30 0.00 0.00 12/1/2014 -16.321 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S PD 12/27/2014 -6,267.420 6,267.42 -6,283.58 -16.16 6,267.42 0.00 0.00 12/30/2014 -16.161 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S 111412015 1:54:41PM EST 13 -Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Ctura.ry: USD OCSD-CONSOLIDATED -OCSG00030000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Cost Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base 12,596.72 .12,629.20 .32.48 12,596.72 0.00 0.00 -32.48 1 0.00 T 0.00 C 0.008 NCUA GUARANTEED NOTES TR R2 IA VAR RT 11/06/2017 DD 11/17/10 SEC ID:62888UAA8 * POE 11/5/2014 11,349.730 -11,349.73 11,349.68 -0.05 0.00 0.00 0.00 11/5/2014 -0.05 1 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S PD 12/5/2014 -13,948.090 13,948.09 -13,948.03 0.06 13,948.09 0.00 0.00 12/8/2014 0.061 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S PD 11/5/2014 -11,348.120 11,348.12 -11,348.07 0.05 11,348.12 0.00 0.00 11/6/2014 0.051 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S 25,2%.21 .25,2%.10 0.11 25,296.21 0.00 0.00 0.111 0.00 T 0.00 C 0.008 SOUNDVIEW HOME LOAN TR OPT3 A4 VAR RT 11/25/2035 DD 09/30/05 SEC ID:83611MGS1 PD 12/25/2014 -5,408.640 5,408.64 -4,774.82 633.82 5,408.64 0.00 0.00 12/26/2014 633.821 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S WELLS FARGO HOME EQUITY 2 A16 VAR RT 10/25/2034 DD 09/01/04 SEC ID:94980GAG6 PD 12/1/2014 -14,169.770 14,169.77 -14,063.49 106.28 14,169.77 0.00 0.00 12/26/2014 106.281 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S TOTAL SETTLED V.B.DOLLAR: 182,528.82 -198,147.55 -5,634.29 182,528.82 0.00 0.00 -5,634.29 1 0.00 T 0.00 C 0.00 S TOTAL SETTLED PUGH)INCOME 192,529.82 -189,147.55 -5,634.29 182,529.92 0.00 0.00 SECURITIES: -5,634.29 1 0.00 T 0.00 C coca TOTAL SETTLED PRINCIPAL PAYMENTS: 182,528.82 -188,147.55 -5,634.29 182,528.82 0.00 0.00 -5,634.29 1 0.00 T 0.00 C 0.008 MATURITIES CASH Is CASH EQUIVALENTS U.S.DOLLAR FEDERAL HOME LN BE CONS DISC MAT 12/03/2014 SEC ID:313385R93 111412015 1:54:41PM EST 14 *Pending S 0.e nt Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Cu.reaoy: USD OCSD-CONSOLIDATED -OCSG00010000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Coat Gain/Loss Code Settle Date Shares/Par Base Base Base Base Base Base MT 12/3/2014 -600,000.000 599,959.63 -599,959.63 0,00 599,959.63 0.00 0.00 OCSF07511102 OCS LIQ OF CHANDLER FEDERAL HOME LN BK CONS DISC MAT 12/19/2014 SEC ID:313385Y1 MT 12/19/2014 -100,000.000 99,993.00 -99,993.00 0.00 99,993.00 0.00 0.00 OCSF07522202 OCS LONG CHANDLER FEDERAL HOME LN BKS CONS DISC DD 12/12/2013 0.00%12/12/2014 SEC ID:313385S80 MT 12/12/2014 -13,800,000.000 13,797,905.50 -13,797,905.50 0.00 13,797,905.50 0.00 0.00 OCSF07522202 OCS LONG CHANDLER MT 12/12/2014 -700,000.000 699,893.76 -699,893.76 0.00 699,893.76 0.00 0,00 OCSF07511102 OCS LIQ OF CHANDLER 14,497,799.26 -14,497,799.26 0.00 14,497,799.26 0.00 0.00 0.001 0.00 T 0.00 c 0.008 FEDERAL HOME LN MTG CORP DISC 0.000% 12/22/2014 DO 12/23/201 SEC ID:313397U25 MT 12/22/2014 -18,100,000.000 18,098,881.32 -18.098,881.32 0.00 18,098,881.32 0.00 0.00 OCSF07522202 OCS LONG CHANDLER FEDERAL NATL ASSN DISCOUNT MAT 12/12/2014 SEC ID:313589S89 MT 12/12/2014 -3,880,000.000 3,879,716.27 -3,879,716.27 0.00 3,879,716.27 0.00 0.00 OCSF07511102 OCS LIQ OF CHANDLER FEDERAL NATL MTG ASSN DISC MAT 12/31/2014 SEC ID:313589V34 MT 12/31/2014 -2,300,000.000 2,299,712.50 -2,299,712.50 0.00 2,299,712.50 0.00 0.00 OCSF07511102 OCS LIQ OF CHANDLER TOTAL U.S.DOLLAR: 39,476,061.98 -39,476,061.98 0.00 39,476,061.98 0.00 0.00 0.001 0.00 T 0.00 C 0.008 TOTAL CASH&CASH EQUIVALENTS: 39,476,061.98 -39,476,061.98 0.00 39,476,061.98 0.00 0.00 0.001 0.00 T 0.00 C 0.00 S FLCED INCOME SECURITIES U.S.DOLLAR EMEMON ELECTRIC CO 5.000% 12/15/2014 DD 12/11/02 SEC ID:291011AS3 MT 12/15/2014 -631,000.000 631,000.00 -648,718.48 -17,718.48 631,000.00 0.00 0.00 OCSF07511102 OCS LIQ OF CHANDLER -17,718.48 1 0.00 T 0.00 C o.00 s 111412015 1:54:41PM EST 15 -Pendin85MUem ut Workbench 3► Transaction Report Report ID: TX8355 BUY MELLON Base Ctura.ry: USD OCSD-CONSOLIDATED -OCSG00030000 12/1/2014 - 12/31/2014 Status: FINAL Trade Date Investment Investment Settle Date Currency Currency Tran Effective Date Amount Cost Gain/Loss Amount Cost Gain/Loss Code Settle Date Shares/Per Base Base Base Base Base Base TOTAL 14ATURITIES: 40,107,061.98 -40,124,780.46 .17,718.48 40,107,061.98 0.00 0.00 -17,71SAS 1 0.00 T 0.00 C 0.005 CORPORATE ACTIONS U.S.DOLLAR DOMINION RESOURCES MC/VA 5.600% 11/15/2016 DD 11/14/06 SEC ID:25746UBB4 CAL 12/9/2014 -1,697,000.000 1,856,067.75 -1,983,941.61 -127,873.86 1,856,067.75 0.00 0.00 12/9/2014 -127,873.861 0.00 T OCSF07522202 OCS LONG CHANDLER 0.00 C 0.00 S GRAND TOTAL ACTIVITY: -541,579.48 139,890,866.16 875,564.37 -541,5T9.48 0.00 0.00 875,564.37 1 0.00 T 0.00 C 0.00 S 111412015 1:54:41PM EST 16 *Pending Be 0.e ut Workbench Callan December 11,2014 Orange County Sanitation District Investment Measurement service Quarterly Review The following report was prepared by Callan Associates Inc. ("CAI') using information from sources that include the following ford bussels); fund costodiams);investment menagerie);CAI computer sodwars;CAI investment manager and fund sponsor database;third party data vendors;and other outside sources as directed by Me client.CAI assumes no responsibility for the accuracy or completeness of the information previded,or methodologies employed,by any information providers external to CAI.Reasonable care has been taken to assure the accuracy of the CAI database and computer believers.In preparing the following roped, CAI has not reviewed the risks of Individual security holdings or the compliancelnon-compliance of 'individual security holdings with investment policies and guidelines of a fund sponsor,nor has II assumed any responsibility to do so.Copyright 2015 by Callan Associates Inc. Table of Contents December 31, 2014 Capital Markel Review 1 Active Management Overview Market Overview 9 Domestic Fixed Income 10 Asset Allocation Investment Manager Asset Allocation 12 Investment Manager Returns 13 Asset Class Risk and Return 17 Manager Analysis Chandler-Long Term Operating Fund 19 Chandler-Liquid Operating Money 23 Callan Research/Education 25 Definitions 31 Disclosures 36 Callan Orange County Sanitation District Executive Summary for Period Ending December 31, 2014 Asset Allocation December 31, 2014 Market Value Weight Domestic Fixed Income Long Tenn Operating Fund* 434,039,944 88.40% Trial Fund $490,969,572 100.0% Performance Last Last Last Last Last 3 5 T Quarter Year Years Years Years Domestic Fixed Income Long Tenn Operating Fund 0.54% 1.98% 1.07% 2.43% 3.28% Barclays Gmt/Creel 1-5 Year ldx 0.41% 1.42% 1.31% 2.22% 2.97% ML1-5 Govt/Corp 0.40% 1.51% 1.43% 2.30% 3.00% Liquid Operating Monies 0,01% 0.09% 0,13% 0,17% 0.55% Citicrouo 3-Month Treasury Bill 000% 003% 005% 007% 033% Total Fund 0.48% 1.73% 0.96% 2.04% 2.78% Target' 0.32% 1.21% 1.15% 1.86% 2.47% 'Curtin quarter target=80.0%ML 1-5 GOWCom and 20%3-monih T-Bills "Chandler Asset Management assumed discretion over the Liquid Operating Monies and Long Term Operating Fund e8sctive, 12/l/2014.Prior pedoimance Is from PIMCO. Recent Developments During the quarter, $31.5 million was withdrawn from the total portfolio. $29.5 million came from the Long Term Operating Fund and $2.0 million from the Liquid Operating Monies. Chandler Asset Management started managing the Long Term Operating Fund and Liquid Operating Monies on 1211/14. Oraanizationa I Issues NA Manager Performance The yield curve flattened during the fourth quarter, continuing a trend throughout 2014. The short end of the yield curve was pushed higher on the expectation of the Fed raising rates while the long end was held down by dampened inflation expectations. Over the course of Callan Orange Cauniy Sanilatm Dinnd Febm.,2.2014 the year, the 30-year yield fell 121 basis points while the 2-year yield rose 29 basis points. The 10-year U.S. Treasury finished the year at 2.17%, falling 35 basis points over the quarter. The Barclays Aggregate Index returned 1.8% in the fourth quarter with U.S. Treasuries performing the best (Barclays Government Index: +1.9%). For the year, the Barclays Aggregate Index returned a respectable 6.0% and credit (Barclays: Credit Index) led the broader market by gaining 7.5%. High yield corporate bonds (Merrill Lynch: High Yield Corporate Index: -1.1%) experienced negative returns for the quarter as the energy sector weighed on the index. The Long Term Operating Portfolio returned 0.54% in the 4'h quarter, outperforming the MIL 1-5 GovtlCorp Index (+.40%) and ranking 7" percentile versus peers. The Portfolio had less than 30% invested in credit and less than the permitted 20% invested in the combination of asset-backed securities, mortgages, and CMOs as of December 31, 2014(see page 22). The Liquid Operating Portfolio returned -0.03% (after fees) in the quarter, which was behind the return of the 3-Month Treasury Bill (+0.00%). Interest rates remain very low on the short end of the yield curve. The Portfolio returned-0.06% (after fees)for the trailing year. Gordon M. Weightman, CFA Vice President 2 v v m m m F CALLAN INVES Callan INST TUTENTS lit CMR Preview Fourth Quarter 2014 This "Preview" contains excerpts from the upcoming Capital Broad Market Quarterly Returns Market Review (CMR) newsletter, which will be published at the and of the month. Us.Equly(Ruseell]WD) Nun-U.S.Equly(MSCI ACWI ex USA) U.S.Fixed(Berdays Aggregate) American Dream -2.91%— Nao-U.S.FixeU(CRIi Non-U.S.) U.S. EQUITY I Lauren Mathias,CFA Cash(N-Dayr-Bllls) ODD% Sources'.Bemlrys,DugmuR Merril Lynch,MBCI.Fussell tr tmeN Omup U.S. equities ended the year on a strong note. The S&P 500 Index posted positive quarterly (+4.93%) and annual (+13.69%)returns.The U.S.economys tailwinds included low inflation, low interest rates, and low energy prices.The unem- Ending on a High Note ployment rate continued to decline and wage growth ticked up. U.S. FIXED INCOME I Nathan Wong,CFA Continued on pg.2 An improving economic picture in the U.S., along with con- cerns about slower growth in the euro zone and emerging mar- Wary and Weary kets,contributed to gains in U.S.fixed income.The yield curve NON-U.S. EQUITY I Mall Lai flattened for the fourth consecutive quarter as long Treasury bonds rallied, driven by lower inflation expectations and rising As the U.S.Continued its upward march,international markets global demand. failed to keep pace.Periods of optimism were clouded by sink- ing oil prices and volatile inflation. Investors turned watchful Continued on pg.4 eyes to Central banks as the year drew to a close. December's drag dented an otherwise decent quarter. The greenback Deflation Demons gained formidable ground against most currencies.The MSCI NON-U.S. FIXED INCOME I Kyle Fakers ACWI ex USA Index (.3.81%) notched a yearly tally down 3.44%in dollar terms,but up 6.52%in local currency.Quarterly Deflationary concerns, weakening currencies, and further sector performance failed to surprise as international Energy bifurcation among world economies continued to weigh on (-19.79%) and Materials (-7.54%) provided Considerable foreign bond returns. The relative strength of the U.S. dol- headwinds; crude oil ended the year at$53/barrel. Consumer lar depressed local currency investments; the Citi Non-U.S. confidence boosted Information Technology (+0.68%) and World Government Bond Index(WGBI)tumbled 2.91%.The Consumer Discretionary(+2.39%)out of the red—the quarter's dollar-hedged Citi Non-U.S.WGBI climbed 3.02%, illustrating only positive sectors. the disparity against foreign currencies. Continued on pg.3 Continued on pg.5 Knowledge.Experience.Integrity. U.S. Equity: American Dream Quarterly Performance of Select Sectors Continued from pg. 1 0Rusae111000 0RusaN12000 Corporate profits in the U.S. remained solid despite the 20%1 17.1% 17.3% ' 1 ' 12.7% strengthening U.S. dollar, minimal global economic growth, 10%I new e'e% and weak commodity prices. With this backdrop, a lopsided 0% market emerged for U.S. equities. Energy sector returns col- I I I 4.3% I I lapsed in tandem with oil prices while REITs posted the best 1o%I 11 -usx -2°%I results in all U.S.indices on the heels of low interest rates.This dichotomy proved challenging to the majority of active manag- -30% a34X am whose exposures were on the wrong side of the seesaw. -<°%' Additionally, the difference between the winning and losing umulas eeenh CO. Telecom. En.W stocks was narrow, further challenging stock pickers. With Source.Ruasell mvesvuem Gmup increased consumer confidence and strong U.S. GDP growth (third-quarter GDP was revised up to 5%),2014 was a banner yearfor U.S.equities.Can U.S.markets keep up these dreamy between growth and value was narrow(Russell 1000 Growth results,or will 2015 be a wakeup call? Index: +4.78%; Russell 1000 Value Index: +4.98%). Large value slightly edged out large growth thanks to higher expo- Despite solid returns (Russell 1000 Index: +4,88%), large sure to the Utilities sector and less to Energy. In small cap, cap stocks took the back seat for the quarter. Small (Russell growth beat value as the highest return-on-equity companies 2000 Index: +9,73%) and mid cap (Russell Mid-Cap Index: did well while those with lower stock prices declined. +5.94%)came back strong; small cap growth stocks trumped value for the fifth time in the last six years. Micro cap beat Small and large cap sectors posted mostly positive quarterly all other cap ranges in the fourth quarter(Russell Microcap results. The exception was Energy, which faced challenges Index: +11.19%), but still trailed for the year. The distinction across capitalizations as oil and commodity prices continued to decline. Utilities added significant value for the quarter and the year as investors search for income persisted.Health Care Rolling One-year Relative Returns (vs.Russell 1000) was also strong as a result of biotechnology and pharmaceuti- cal companies. Finally,despite small cap stocks outperforming e Rumell 1000 Grmnh a Russell 1900 value •Russell 1090 large caps in the fourth quarter,for the year larger was better- 30% - and the difference between the two was the widest since 1998. __ ____ Though the U.S. equity market experienced strong absolute 10%------ - - - - - - - - - - - - - - - - - - -- returns, active management was incredibly challenged—large cap active funds had their worst year versus the Russell 1000 Vv VWK, V Index in a decade. The fourth quarter showed that investors -10%------ - - - - - - - - - - - - - - - - - - -- preferred companies that feature low beta, high return on equity, and larger market capitalizations. For the year, global -------- ------ - - - - - - - - - - - - --- growth concerns resulted in elevated volatility, which fed into the search for safety and the outperformance of higher-quality "'I"'I"9 95 96 97 98 99 00 01 02 03 M 06 O6 07 08 09 10 11 12 13 14 and lower-risk securities. source."Sell Investment Group 2 1 Callan Non-U.S. Equity: Wary and Weary Regional Quarterly Performance (U.S.Dollar) Continued from pg. 1 -I.SM-MSCI Peafic ex Japan Developed countries in the MSCI World ex USA Index s.,M% MSCI Japan (-3.69%) reversed the previous quarter's slump against the 3.57X-MSCI EAFE MSCI Emerging Markets Index(-4.44%),but lost in a year-to- -3.81%--MSCI ACWI ex USA date comparison:-3.88%to-1.82%,respectively.For the quar- ter, the ACWI ex USA Growth Index (-2.26%) trumped the 4.35% MSCI Eura, ACWI ex USA Value Index (-5.38%), and jumped 231 basis 4."% 1 MSCI Ennaren,Man<eia points ahead for 2014, S.pr MSC Weak signals from Europe rekindled fears of a possible triple- dip recession.The MSCI Europe Index(-4.35%)fell 6.18%in (+3.10%) and New Zealand (+2.51%). The former benefited 2014. Unemployment in the E.U. (10.0% in November)came from a resilient telecom industry (+8.23%) and a quieting down from 10.7%the year prior, but remained largely flat this Umbrella Revolution. New Zealand saw year-over-year GDP quarter. More troubling, euro area inflation fell to -0.2% in growth revised up to 3.2%as of September 30,along with fall- December,driven by dropping Energy prices(-19.02%). Made ing unemployment and record immigration. Japan weighed Dmghi held the ECB's rock-bottom rate of 0.5%,though expec- on the Index (-2.42%), though it was up 6.65% in yen terms. tations are mounting for the Bank to take action.Of the devel- Prime Minister Shinzo Abe called for snap December elections oped nations,oil-dependent Norway(-24.99%)suffered most. after annual GDP was revised down to -1.9% (from -1.6%), Second-weakest Portugal (-23.01%) was dragged down by continuing the country's recession. Abe's Liberal Democratic continued Financials woes (-39.25%) and was 2014's worst- Party won easily, earning him four more years in office. He performing developed country(-38.24%).Ireland held the quar- postponed the 2%April tax hike by 18 months. ter's crown(+1.86%),lifted by news of 3.5%GDP growth in the third quarter. Lithuania(-5.41%), a frontier market, adopts the Emerging economies felt the commodities slump more than auto in 2015. developed nations,with Energy falling 24.45%while Financials (+1.68%) and Information Technology (+1.46%) managed to The MSCI Pacific Index (-2.08%) fared better than Europe advance. Powerhouse China (+7,17%; +8.26% YTD) was owing to the quarter's developed leaders, Hong Kong buoyed by a strong Financials sector(+24.92%), though GDP growth slowed and was projected to fall short of the govern- ment's 7.5%target-the weakest in 24 years. Factory output Rolling One-Year Relative Returns(vs.MSCI EAFE U.S.Dollar) declined, prompting the government to hasten $1.1 trillion in •MSCI PacXlc •MSCI Eumpa •MSOIEAFE infrastructure projects to prop up growth. Last-place Russia 40% (-32.78%)was hammered by falling oil prices,continued san0- 30% tions from the West, and declining ruble reserves; it ended the - - - - - - - - - - - ------ year down a whopping 45.86%.Greece fell 28.76%ahead of its 10% ,r „ own snap elections in late January,and the specter ofa"Grexit" -19% -- (Greek exit from the euro zone)still looms. Commodities sunk MSCI EM Latin America(-13.38%),where sectors universally -z0%--- - ---- - - - - - - - - - - - - - - - - - - - ' suffered. MSCI Frontier Markets tanked 12.44%, but finished 11 the year up 7.21%, led by a strong MSCI FM Asia (-0.84%in -40%........ . I"' 95 96 97 98 99 00 01 02 03 M 05 06 07 N 09 10 11 12 13 14 4Q. 1664%VTD. )' Source:MSCI Knowledge.Experience.Integrity. 1 3 U.S. Fixed Income: Ending on a High Note Fixed Income Index quarterly Returns Continued from pg. 1 Meeluh Relum Bamlaya Aggra9ata 1.79% Yield spreads widened considerably in both the invest- ------ - - - - - - - - -- - BamlaysTreasury 1.93% ment grade and highyield corporate sectors. The Barclays BamlaysAgenoles usx Aggregate Index climbed 1.79%during the quarter. Barclays ones Barclays ABS 0.55% Weakness in oil and a strengthening equity market drove the aamlap teas _ _ _ 1_]9% _ Bemlays CreOit 1.78% flattening of the yield curve;the 24o-30-year spread tightened Barclays Corp.High vela 00% ______ _ - - - - - - - ---- to 2.08%. Short-tens rates rose as the Fed hinted at a nor- souroa:earolays malization of rotes in the not-too-distant future. The belly of the curve underperformed the most, with three-and five-year Treasuries rising 22 bps and 17 bps,respectively. Industrials and financials were hit hardest. The Fed pledged The 30-year yield ended the year at 2.75% and saw its larg- to continue buying agency mortgage-backed securities est annual decline since 2011.The breakeven rate (the differ- (MBS),which gained 1.79%. High yield corporate bonds were ence between nominal and real yields)on the 10-year Treasury impacted most by the drop in oil prices (the energy complex dropped to 1.68%, a level comparable to that seen during the makes up 15%of the index). High yield bonds lagged against financial crisis,as inflation expectations dissipated commensu- investment-grade corporates,with BB-rated bonds performing rarely with the fall in oil. better than lower-rated credits.The Barclays Corporate High Yield Index fell 1.00%. New issue activity matched the record Investment-grade corporates climbed 1.77% as Corporate issuance of 2013. During 2014, 544 high yield bonds totaling spreads widened, mainly as a result of falling oil prices. approximately$356 billion were issued. Historical 10-Year Ylelds U.S.Treasury Yield Curves *U.S.levee Tmasury Yiem e10l TIPS Yield eareake nlrfioxx Rate •Dacember31,2o14 a seplemher30,2a14 a oecember31,2o13 5% 8% 5%_ _ _ _ _________ _ _ _ _ _ _ _ _ _ _ _ _ . 41 4% ______ ________ _ _ _ _ _ _ _ _ _ _ . 3%---------- 3% -------- - - - - - - - - - ---- 2%. c _ _ _ _ _ _ _ _ _ ___________ 1%_________ _____ - - - - - - - - - - - 0% 1% ' I ' ' I ' . . ' ' I ' ' I ' . . ' ' I ' • I 05 08 07 08 W 10 11 12 13 14 0% . . . I ' ' ' ' I ' ' ' ' I ' . . . I ' ' ' ' I ' ' ' ' I Source'.Bloomberg 0 5 10 15 20 25 30 Mahift(Ye..) Source:Bloomberg 4 1 Callan Non-U.S. Fixed Income: Deflation Demons Emerging Spreads Over Developed (By Region) Continued from pg. l •Emerging Amendas •Emerging EMEAls.opa.e da Sap j ill Earea Hale 600 bps The sure zone's battle with disinflation raised concerns of Japan-like deflation among major economies. (In the early '90s, the Bank of Japan lowered interest rates to near zero 400 bps - ------- - - - - - - - - - - - in order to stimulate inflation, but to no avail. Its deflationary run has lasted well over a decade.) In response to prolonged 200bps anemic growth,the ECB announced it would consider a quan- titative easing program that would include adding sovereign bonds to its balance sheet. Speculation and a flight to qual- 0bps . . 10 11 12 13 16 ity fuelled a rally in both core and fringe European sovereign Spp. Sands, bonds as yields dropped.The German 10-year yield declined to a record low of 0.54%;the spread with U.S.Treasuries wid- ened to 1.63%.The German two-year note remained in nega- 10-Year Global Government Bond Yields tive territory, indicating investors would receive less than what they paid for the debt.Yield on U.K.sovereign debt declined 67 •U.S.Treasury •0erman, e U K. a Canada 0 Japan a% bps as the pound sterling sank and the Bank of England dis- cussed adjusting interest rates. Yields on Spanish and Italian 6%- - - - - - - - - - - -------------- debt declined 52 bps and 44 bps, respectively. 4% - - - - - ------------ 3%____ _ _ _ _ _ _ _ _ _ In Asia Pacific, recessionary Japan experienced a fourth z%____ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ __ ____ straight month of weakening inflation.The 10-year yield fell to 0.33%, its lowest level ever,as the Bank of Japan maintained 1%- --- - - - - - - - - - - -- - ------ its aggressive stimulus program. Australia's 10-year yield 0%1 i , , , I , , I , , , I , I , , , I I , , , i , , , I . . . I declined 73 bps,the most compared to its developed peers. 05 06 W M N 10 v 12 13 14 Change in 10-Year Yields from 3D14 to d414 The JPM GBI-EM Global Diversified Index, tracking emerg- a2 bps - U.S.readea, ing market government bonds denominated in local currencies, 41 bps - carmen, plummeted 5.71% given the broad-based currency weakness -m bps U.x. versus the U.S.dollar.The U.S.dollar-denominated JPM EMBI -26 bps - Canada Global Diversified Index fell 0.55%for the quarter.Sinking oil -so bps Jspsn prices weighed heavily on the emerging markets' exporters. Russia's debt continued its downward spiral as the 10-year sopme:Bloomberg bond fell 44% in dollar terms. In December, the Russian cen- tral bank raised interest rates to 17% from 10.5% in an effort Turkey was a bright spot among emerging market economies. to stem the ruble's decline. Low oil prices were a major burden The 10-year bond gained 6.23%despite the negative currency on the currency.Colombian debt declined 14%;oil accounts for effect.The country's inflationary outlook improved on the back roughly 50%of the Country's exports. of falling oil prices. Knowledge.Experience.Integrity. 1 5 This"Preview'contains excerpts from the upcoming Capital Market Review(CMR)newsletter,which will be published at the end of the month.The CMR is a quarterly macroeconomic indicator newsletter that provides thoughtful insights on the economy and recent performance in the equity,fixed income,altent tives,international,real estate,and other Capital markets. If you have any questions or comments,please email institute@callan.com. Editor-in-Chief—Karen Wdham Performance Data—Alpay Soyoguz, CFA;Adam Mills Publication Layout—all Hoagland About Callan Callan was founded as an employee-owned investment consulting firm in 1973. Ever since, we have empowered institutional clients with creative,customized investment solutions that are uniquely backed by proprietary research,exclusive data,ongoing education,and decision support.Today,Callan advises on more than$1.8 trillion in total assets,which makes us among the largest independently owned invest- ment consulting firms in the U.S.We use a client-focused consulting model to serve public and private pension plan sponsors,endowments,foundations,operating funds,smaller investment consulting firms, investment managers,and financial intermediaries.For more information,please visit www.callan.com. About the Callan Investments Institute The Callan Investments Institute, established in 1980, is a source of continuing education for those in the institutional investment community.The Institute conducts conferences and workshops and provides published research,surveys,and newsletters.The Institute strives to present the most timely and relevant research and education available so our clients and our associates stay abreast of important trends in the investments industry. ®2016 Callan eased at.Inc. Certain information herein has been compiled by Callan and is based on information provided by a variety of sources believed to be reliable for which Callan has not necessarily settled the accuracy or completeness of or updated.This report is for Informational purposes only and should not be construed as legal or tax advice on any matter Any investment decieian you make on the basis of this roped Is your sole responsibility.You should consult with legal and tax advisers before applying any of this information to your particular slNatlon.Reference In this repoMo any product,service or entity should not has construed as a recommendation,approval, affiliation or endorsement of such product,service or entity by Callan.Past performance is no guarantee of future results.This report may consist of statements of opinion,which are made as of the date may are expressed and are not statements of fact.The Callan Investments Institute(the'Institute-)Is,and will be,the sole owner and copyright holder of all material prepared or developed by the Institute.No parts has the right to reproduce,revise,resell,disseminate externallg disseminate to subsidiaries or parents,or post on Internal was area any .it of any material prepared or developed by the Insurer ,wittmat the Institute'a permiasion.Institute clients only have the right N class such matedal Internally in their business. e 1 Callan D 2 Om m � 2 01 m'm £m 3 m Market Overview Active Management vs Index Returns Market Overview The charts below illustrate the range of returns across managers in Callan's Separate Account database over the most recent one quarter and one year time periods. The database is broken down by asset class to illustrate the difference in returns across those asset classes.An appropriate index is also shown for each asset class for comparison purposes.As an example, the first bar in the upper chart illustrates the range of returns for domestic equity managers over the last quarter. The triangle represents the S&P 500 return. The number next to the triangle represents the ranking of the S&P 500 in the domestic equity manager database. Range of Separate Account Manager Returns by Asset Class One Quarter Ended December 31,2014 12% 10% 8% 6% (60) E 4% (45)® 2% 9) N IY 0% (2%) 64)® (4%) (69) (6%) (8%) Domestic Non-US Domestic Non-US Real Cash EquNy Equity Fixed Income Fixed Income Estate Equivalents s xs S&P No MSCI EAFE Barclays Aggr ad Cie Non-US Gov NCREIF Index 3 Mon T-Bills 1 Om25m Percentile 9.68 list) 1.67 (223) 359 0,08 25M Perc.rble ]26 ( 3) (((( 33 75M Pecentiie 4.9 �5.0) (0.B) (3.46) 2.18 0.02 901h Percentile 2.20 Index • 4,93 (357) 1.T9 (2sl) 304 0,00 Range of Separate Account Manager Returns by Asset Class One Year Ended December 31,2014 25% 20% 5% (19)� c 10% (52) 3 S% d)® K 0% 65) (5%) (fi0) (10%) (15%) Domestic Non-Us Domestic Non-US Real Cash Equity Equity Fixed Income Fixed Income Estate Equivalents 5&P No MSCI EAFE Barclays Aggr Bd Citi Non-US Gov NCREIF Index 3 Mon T-Bills 10ih Percentile 14.89 0.06 8.87 3.60 18.59 0.97 251h Percentile 13.18 2.46 6.37 1,27 15.34 0,89 ,ad 9.84 4.13 4.55 1.03 1180 0.32 75th Percentile 5.81 5.85 2.48 3.00 9.58 0.19 901h Percentile 1.80 7.73 1.12 473 6.79 0.08 '� Index • 13.69 (4.90) 597 (2.68) 11.82 0.03 CaIIQr l Orange County Sanitation Distnct g Domestic Fixed Income Active Management Overview Active vs.the Index The Barclays U.S.Aggregate Index returned 1.8% in the 4th quarter, bringing 2014 returns to a very respectable 6.0%. The 10-year U.S. Treasury finished the year at 2.17%, 87 bps lower than 12/31/13 and 35 bps lower than 9/30. The yield curve continued to flatten.TIPS underperformed nominal Treasuries as prospects for inflation all but evaporated with the collapse in oil prices.The Barclays TIPS Index returned-0.0%for the quarter and 3.6%for the year,far short of its nominal Treasury counterparts. Within the Aggregate Index, corporates underperformed like-duration U.S. Treasuries by 112 bps in the 4th quarter with energy-related credits faring the worst. The energy sector underperformed Treasuries by more than 460 bps. The Barclays Corporate High Yield Index returned -1.0% for the quarter, trimming its full year return to 2.5%. Energy comprises about 15% of this Index, and energy-related high yield credits sank more than 10%over the quarter as falling oil prices raised credit concerns at leveraged energy companies. Intermediate vs.Long Duration Longer duration managers outperformed intermediate and short duration strategies in the 4th quarter as yields dropped. The yield curve continued to flatten with long bond yields falling and short term yields rising. The median Extended Maturity manager returned 5.07%while the median Intermediate manager posted a 0.88%return and the median Defensive manager returned 0.22%. Barclaya Universal: 1.34% Barclays Aggregate: 1.79% Barclays GovilCreeit 1.02% Separate Account Style Group Median Returns Barclays Mortgage: t79% for Quarter Ended December 31,2014 Barclays High tale: (t00%) Barclays US TIPS: (0,03%) 8% 6% 5,07% y 4% E N 1.46% 1.28% 0.88% 0% 0.07% 0.22% (0.74%) (2%) Active Defenaive Interned Core Core EMeneee Active Mortgage High Cash Bone Plus Maturity Duration Bated Yield Barclays Universal: 5,55% Barclays Aggregate: 5.97% BoncSeparate Account Style Group Median Returns Barclays Mo gege:lt 6.01 for One Year Ended December 31,2014 Barclays High Yield: 2.45% 25% Barclays US TIPS: 3.64% 20% 17,99% or11% ---------------------- -------------- N 6,23% 8A1 % 6,36% 5% ------------- 491% 3.38% 2.92% -- 0.71% 1.Ofi% 0% Active Defensive Intannetl Core Core Maturity Active Mortgage High /'�,� 1,� Cash Bond Plus Maturity Duration Backetl Yield Callan change County Sanitation Disi ,0 N 6_ R a 0 0 Investment Manager Asset Allocation The table below contrasts the distribution of assets across the Fund's investment managers as of December 31, 2014,with the distribution as of September 30,2014.The change in asset distribution is broken down into the dollar change due to Net New Investment and the dollar change due to Investment Return. Asset Distribution Across Investment Managers December 31,2014 September 30,2014 Market Value Weight Net New Inv. Inv.Return Market Value Weight Domestic Fixed Income Long Term Operating Fund' 434.039.944 8040% (29.500.000) 2.156.707 461.383.236 88.68% liquid Ooeratirs Monies' 56,929,628 11.60% (1,993,261) 4.105 58.918]05 11.32% Total Fund 0490,969,570 100.0% 9(31,493,201) $2,160,02 $520.301,941 100.0% 'Chandler replaced PIMCO during the 4th Quarter of 2014.Assets were transferred lmklnd as of 1&01I2014. Callan Orange County Sanitation District 12 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended December 31, 2014. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended December 31,2014 Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund 0.54% 1.98% 1.07% 2.43% 3.28% Barclays GovtfCred 1-5 Year Idx 0.41% 1.42% 1.31% 2.22% 2.97% ML 1-5 GovUCorp 0.40% 1.51% 1.43% 2.30% 3.00% Liquid Operating Monies 0.01% 0.09% 0.13% 0,17% 0,55% Ciligroup 3-Month Treasury Bill 0.00% 0.03% 0.05% 0.07% 0.33% Total Fund 0.48% 1.73% 0.96% 2.04% 2.78% Target' 0.32% 1.21% 1.15% 1.86% 2.47% 'Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Callan Onar,County Santlerinn Distnd 19 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended December 31, 2014. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended December 31,2014 Last Last Last 10 15 19.1/4 Years Years Years Domestic Fixed Income Long Term Operating Fund 3.70% 4.47% 4.82% Barclays GovtfCred 1-5 Year Idx 3.36% 4.30% 4.59% ML 1-5 GovUCorp 3.39% 4.29% 4.62% Liquid Operating Monies 1,72% 2,23% 2.94% Ciligroup 3-Month Treasury Bill 1.46% 1.91% 2.60% Total Fund 3.34% 4.12% 4.54% Target' 3.00% 3.81% 4.22% 'Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Callan Onar,County Sandarinn DisNtl 14 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 2014 2013 2012 2011 2010 Domestic Fixed Income Long Term Operating Fund 1.98% (1.77%) 3.06% 4.59% 4.42% Barclays Govt/Cred 1-5 Year Idx 1.42% 0.28% 2.24% 3.14% 4,08% ML1-5 Govt/Corp 1.51% 0.32% 2.47% 3.10% 4.17% Liquid Operating Monies 0.09% 0.13% 0.17% 0.24% 0,25% Citigroup 3-Month Treasury Bill 0.03% 0.05% 0.07% 0.08% 0.13% Total Fund 1.73% (1.49%) 2.70% 3.70% 3.68% Target` 1.21% 0.26% 1.99% 2.49% 3.36% 'Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Callan 0mr,,e County aantlerinnDist c ,s Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 2009 2008 2007 2006 2005 Domestic Fixed Income Long Term Operating Fund 5.52% 5.37% 7.21% 4.41% 2.47% Barclays Govt/Cred 1-5 Year Idx 4.62% 5,12% 7.27% 4,22% 1,44% ML1-5 Govt/Corp 4.88% 4.65% 7.27% 4.26% 1.43% Liquid Operating Monies 0.58% 2,40% 5.25% 5.05% 3,21% Ciligroup 3-Month Treasury Bill 0.16% 1.80% 4.74% 4.76% 3.00% Total Fund 4.65% 4.61% 6.84% 4.60% 2.59% Target` 3.93% 4.08% 6.76% 4.36% 1.75% 'Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Callan 0mr,,e County aantle,InnDISNtl ,a Asset Class Risk and Return The charts below show the seven year annualized risk and return for each asset class component of the Total Fund.The first graph contrasts these values with those of the appropriate index for each asset class.The second chart contrasts them with the risk and return of the median portfolio in each of the appropriate CAI comparative databases. In each case, the crosshairs on the chart represent the return and risk of the Total Fund. Seven Year Annualized Risk vs Return Asset Classes vs Benchmark Indices 3.5% 3.0% z5% m 2,0% N � LS% 10% 05% 0.0% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 14% 1.6% 1.8% 2.0% 2.2% 2.4% Standard Deviation Seven Year Annualized Risk vs Return Asset Classes vs Asset Class Median 3.0% 2.5% 2.0% 1.5% N K 1.0% 0.5% 0 0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 14% 16% 1.8% 20% 22% 2.4% Standard Deviation Callan Omrr County san8a8nn DIsfti „ d d v Long Term Operating Fund Period Ended December 31, 2014 Investment Philosophy Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Long Term Operating Fund's portfolio posted a 0.54%return Beginning Market Value $461.383,236 for the quarter placing it in the 7 percentile of the CAI Net New Investment $-29,500,000 Defensive Fixed-Inc Style group for the quarter and in the 4 percentile for the last year. Investment Gains/(Losses) $2,156,707 • Long Term Operating Fund's portfolio outperformed the ML Ending Market Value $434,039,944 1-5 Govt(Corp by 0.15% for the quarter and outperformed the ML 1-5 Govt/Corp for the year by 0.48%. Performance vs CAI Defensive Fixed-Inc Style(Gross) 6% 5% �) afz > 6)F BB ) A(7 •Alt 6)�B12 ) 3% 11 )23)�812 ) B(1 3 2% •A(4 5) 10)nB(1 Id ___j A(6 1% l 0% Laal Gondar Land Las43Yeare Laal5Yeare Laal7Yaara Last 10Years Last 15Yeare Laatl9114 Year Years 10M Famen111e 041 1As 2.25 279 349 360 4A2 a70 25M Percentile 025 128 151 2.15 2.% 344 420 452 Median 0.22 1.06 1.17 1.88 2.57 3.09 3.86 4.29 751h Percentile 0.18 0.88 0.94 1.43 2.19 2.79 3.65 4.04 90M Percentile 007 070 0.69 1,24 1,95 265 3A3 388 Long Term Operating Fund *A 0.54 198 1,07 2.43 3.28 3.70 4.47 4.82 Barclays Goetrued 1-5 Year lux •B 0.41 142 1,31 2.22 2.97 3.36 4.30 4.59 AL 1-5 GaysGa, ♦ 0.40 151 143 2.30 3.00 3.39 4.29 452 CAI Defensive Fixed-Inc Style(Gross) Relative Return vs ML 1.5 Govt/Corp Annualized Seven Year Risk vs Return 2.0% 4 0% 3.5% m 1.0% -- -- -- -- ---- . . 4. E a - ---- E to 3.0% 0.0% Y no 2.5% at 2.0% (1.5%) 1.5% 2008 2009 2010 2011 2012 2013 2014 0 1 2 3 4 5 6 0 Long Term Operating Fund Standard Deviation L.&,�11,�M 3 L crease County sanitation District 19 Long Term Operating Fund Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a dsk-adjusted and unadjusted basis.The first chart illustrates the manager's ranking over different periods versus the appropriate style group.The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last two charts illustrate the manager's ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Chandler on 12M/2014. Previous performance reflects PIMCO. Performance vs CAI Defensive Fixed-Inc Style(Gross) 20% 15% 15% A 1 1 iL9 BI 2®B) B( 0) M �5TF0� 1 A 8) 0% ®A 161gr&as A 10 ) (5%) (10%) 2014 2013 2012 2011 2010 2009 2006 2007 2006 2005 100 Percentile 1.49 1.20 4.46 2.72 4.69 13.74 6.63 9.03 5.11 2.61 25th Pemen0le 1.28 0.80 2.60 2.28 4.01 8.60 5.fi4 688 4.84 2.40 Median 1.06 0.65 181 18T 3.18 591 375 039 4.61 2.18 75th Pememile 0.08 0.41 1A6 165 2T3 2.53 (0.17) 566 4.46 1.9T 90th Percentile 0.70 0.31 0.92 1 A4 242 1.82 (3.47) 3.95 4.32 1.84 Long Term 0pera6n9 Fund *A 1,98 (1 nl 306 469 442 5.52 5.37 121 441 247 Barclays Gov1/Cred 1-5 Year ids •B 1.42 0.28 244 3.14 4.08 4.62 5.12 7.27 4.22 1." ML1-5 GOWCOT ♦ 1.51 0.32 2.49 3.10 4.17 4.80 4.65 7.27 4.26 1.43 Cumulative and Quarterly Relative Return vs MIL 1-5 Govt/Corp 6% 4% E 2% i o! m o% K (6%) 2005 2" 2007 2008 2009 2010 2011 2012 2013 2014 Long Term Operating Fmk 0 Barclays GoWCred 15 Year Ids 0 CAI Defensive F-1 Style Risk Adjusted Return Measures vs ML 1-5 GovtfCorp Rankings Against CAI Defensive Fixed-Inc Style(Gross) Seven Years Ended December 31,2014 6 2.0 W A�g 0 3 �B193) 0.5 As 2 A1185)) 0.0 05 i 1 s(10 99 ( c0� aPRO ) (2� Alpha Tnyrwr ( "51 Information Sharpe Excess Return RNIO Rest, Ratio Ratio IOn Percentile 1.23 5.24 loth Percentile 1.12 1.66 0.18 251h Percentile rise 4.11 25th Percentile 0.79 1A8 peo) Median 0.48 3.33 Median 0.50 1.30 (0.38) 751h Percentile 0.18 2.91 7511 Percentile 0.22 1.12 �0.65) son Percentile 0.02 2.64 son Percentile 0.03 0.96 0.86 Long Term Long Term Operating Fund •A (0.35) 2.33 Operating Fund •A (0.38) 1.13 0.27 Barclays Gowcred Barclays GOVOCred /'� 1-5 Year Idx ■B (0.15) 247 1-5 Year Idx •B (0.60) 1.25 (0.11) Callan orange County Sanitation Diatdct 20 Long Term Operating Fund Bond Characteristics Analysis Summary Portfolio Characteristics This graph compares the managers portfolio characteristics with the range of characteristics for the portfolios which make up the manager's style group. This analysis illustrates whether the manager's Current holdings are consistent with other managers employing the same style. Fixed Income Portfolio Characteristics Rankings Against CAI Defensive Fixed-Inc Style as of December 31,2014 40 3.5 3.0 2.5 �(18) 001) (33) 2.0 5 1.0 42) Nina) 0.5 0S (0.5) A-90 ERaceve cougar CA Duration 'It. Yield Raft, convexity 10@ Pemen1le 2.15 2.]] 2.fi0 3.35 O.Ofi 25th Percentile 1.88 2.22 1.63 2.i4 005 Median 1.]5 2.00 1.16 2.01 0.02 75th Percentile i.55 1.84 0.98 1.66 goo 901h Pemen0le 1.05 1.62 0.75 0.86 (0.07) Long Term Operating Fund • 2.12 2.38 - 1.06 - exclave GovVCmd1-5 Ye ♦ 2.65 2.]] 1.23 2.27 0.07 Sector Allocation and Quality Ratings The first graph compares the managers sector allocation with the average allocation across all the members of the manager's style.The second graph compares the manager's weighted average quality rating with the range of quality ratings for the style. Sector Allocation Quality Ratings December 31,2014 vs CAI Defensive Fixed-Inc Style i They US They ina. AM US RMBS �> Nla US$C)drd 4x in, (39) AA (56) Cash Other ssx AA- U$Muni Aa US CMBS nx x A Weighted Average US CMOs oor Quality Rating loth Percentile AAA Us ABS x 25th Percentile M. Median AN 75th Percentile As, US$GoA Related Sun Percentile At 0% 10% 20% 30% 4D% 50% 60% 70% 8(% Long Term OrrerLong TFunderm • AA Long Term Operating Fund E CAI Defen r e Fixed-Inc$yle Baclays Callan GovItCmd 1-5 Ye GoWcred 1-5 Ve ♦ AA* Callan Grange County Sanitation Distinct 21 Long Term Operating Fund Portfolio Characteristics Summary As of December 31, 2014 Portfolio Structure Comparison The charts below compare the structure of the portfolio to that of the index from the three perspectives that have the greatest influence on return. The first chart compares the two portfolios across sectors. The second chart compares the duration distribution.The last chart compares the distribution across quality ratings. Sector Allocation US Troy US Trsy 38% 60% US ABS Me r 0% 8% US Muni 4% US RMBS Cis. 28% 8% US$Gavt Related US CMBS US$Corp 15% 1% us$Corp US CMOs 25% 12% 1% Long Term Operating Fund Barclays GoWCredit 1.5 Year Duration Distribution ZWeigh�dverage: Dundee 70% erm OpereOng Fund 2.12 o GoWCredit l-5 Year: 2.65---- 52.3% 50%40% __ __ __30.7%30% ____ __ __ __ �. __ ____10% ____ __ 8A� V.M __0% 00% 00% 0.5% 0.0% 0.0% 0.0% '0 0-1 1-2 2-3 3-5 S7 710 >10 Years Duration Quality Distribution wsighted Average: Quality 100% Long Tenn Operating Fund: AA O Barclays GoWCredit 1-5 Year: M. 80% -- --- ------ --- --- 7aax d 60% — _ ___ ___ __ ___ ___ ______ ___ O � 40% v a26% 10 _ _ o% anw anw anw anw ans nnw ans AAA AA A oABBB BB �B CCC oo OCox C ooxD aeNIR Quality Rating CallanOrange County Sanitation Distinct Liquid Operating Money Net Period Ended December 31, 2014 Investment Philosophy Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Liquid Operating Money Net's portfolio posted a (0.03)% Beginning Market Value $58.918,705 return for the quarter placing it in the 94 percentile of the MF Net New Investment $-1,993,261 - Money Market Funds Database group for the quarter and Investment Gains/(Losses) $4,185 in the 99 percentile for the last year. • Liquid Operating Money Nefs portfolio underperformed the Ending Market Value $56,929,628 Citigroup 3-Month Treasury Bill by 0.03%for the quarter and underperformed the Citigroup 3-Month Treasury Bill for the year by 0.09%. Performance vs MF-Money Market Funds Database(Net) 3.0% -TO 37)u(12 2.5% I 2.0% 29) (12. 1.5% 41) (24 1.o% 0.5% 53(®(31 0.0% (0.5%) Vat quarter Leaf Lsst3Yeam LastSYeers Last7Years Lest 10 Years Lest l5 Years Lest 19-i14 Year Years 1 a%Percentile 001 007 0.11 0,11 0,55 1.70 209 282 25th Percentile 0.00 0.02 0.03 0.03 0.42 1.% 1.94 2.66 Median 0.00 0.01 0.01 0.01 ou 1.43 1.78 2.51 75M Paroentlle 000 ono ool 0,01 0,24 1.30 189 237 90T Percentile 0.00 000 000 0,00 0.18 1.17 147 220 Liquid o ey Net M t 0 (003) (008) (0,02) 0,02 040 1.57 207 219 Ciligmup 3-Month Treasury Bill • 000 0.03 0,05 0.07 0.33 1.46 1.91 2.60 Relative Returns vs Cumulative Returns vs Citigroup 3-Month Treasury Bill Ciggroup 3-Month Treasury Bill 0.15% 1.0% - Li quid '^ O8% - M0.10% -- __ __ __ ____E 0.6% __of oas% 0.4%tK � 000% � n2% m - � 1p o.o% o.os%) (0.10%) (0.4%) 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 Callan Liquid Opereing More,Net Callan l Orercg County Sanitation DisNct 21 Liquid Operating Money Net Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a dsk-adjusted and unadjusted basis.The first chart illustrates the manager's ranking over different periods versus the appropriate style group.The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last two charts illustrate the manager's ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Chandler on 12 I2014. Previous performance reflects PIMCO. Performance vs MF-Money Market Funds Database(Net) 6% 5% 50®18 27g�15 4% 3% 151011 2% 60®38 1% o% 0%) 2014 2e13 2012 2011 2010 20M 2006 2007 2006 2005 101h Percentile 0.07 009 0.19 008 0.15 0.53 278 522 4.95 3.07 25th Percentile 0.02 0.02 003 0.03 0.05 029 Zile 501 4.79 2.00 Median 0.01 0.01 0.01 0.01 0.01 0.12 2.03 4.73 4.53 2.65 TSth Percentile 0.00 0.00 0.00 0.00 0.01 0.03 1.46 4.39 4.23 2.38 901h Percentile 0.00 0.00 000 000 0.00 0.01 108 389 3.87 2.03 Liquid Operating Money Net • (0.06) (0.02) 0.02 0 09 0.10 0.43 2.25 5.09 4.89 3.06 Citigroup 3-MorM Treasury Bill ♦ 0.03 0.05 0.09 008 0.13 0.16 1.00 4.74 4.76 3.00 Cumulative and Quarterly Relative Return as Citigroup 3-Month Treasury Bill 20% 1.5% of o.s% w > o.o% (1.0%) (1.5%) 2005 2" 2007 2008 2009 2010 2011 2012 2013 2014 Liquid Operating Moray Net MMocey MaMH Poe Oa Risk Adjusted Return Measures vs Citigroup 3-Month Treasury Bill Rankings Against MF-Money Market Funds Database(Net) Seven years Ended December 31,2014 0.30 1.5 0.20 1.0 0.5 (21) (1B) 0.10 •(31) Do - 0.00 • LL5) (010) (1.0J (LS) (0.20) glpM1a Treynor (P'U) IMonna[ion Sharpe Eaceaa Return RHip RHio Red. RHIO 10M Percentile 0.20 023 10th Percentile 0.86 0.30 0.94 250 Percentile Us 0.05 25N Percentile oils 0.09 0.56 Median 0.00 0.06 Median 0.02 0.12 0.10 75th Percentile 0 OB 0.13 ]5M Percentile 1.1 0A9 (1 28) 90th Percentile 0.13 (0.15) 90th Percentile (1,61) (0.19) (1.67) Liquid Operating Liquid Operating /'� Money NH • 0.05 0.02 Money NH • 0.51 0.03 0.66 Callan Orange County Sandation DiaHct 24 d a m m d m n c 0 CALLAN Callan INST TUTENTS l FOURTH QTR 2014 l Education Research and Educational Proarams The Callan Investments Institute provides research that keeps clients updated on the latest industry trends while helping them learn through carefully structured educational programs.Below are the Institute's recent publications— all of which can be found at www.callan.comlresearch. White Papers ,,, .® Emerging Managers:Small Finns with Big Ideas In this interview, Callan's Uvan Tsang and Lauren Mathias discuss trends and issues in the emerging manager arena.(Also see our related video:"Manager Trends:Emerging Managers and Minority,Women,and Disabled-owned Firms.") Managing DC Plan Investments:A Fiduciary Handbook In this handbook, Lori Lucas covers eight key areas of responsibility for DC plan fiduciaries, �r— including investment structure, Investment Policy Statement,QDIA oversight,and others.We also include a customizable"Fiduciary Checklist" What Do Money Market Reforms Mean for Investors?A Roundtable Discussion with Callan Experts In July 2014, the SEC adopted amendments to the rules that govern money market mutual funds.The amendments address the risks of an investor run on money market funds, while -- seeking to preserve the benefits of these funds. Real Estate Grows Greener: Environmental Sustainability within Institutional Real _ Estate Investment = Sarah Angus shares commonly held sentiments on the rationale for utilizing environmentally sustainable practices in real estate management. She provides an overview of influential organizations and key trends in the institutional real estate investment industry. Quarterly Publications DC Observer B Callan DC Index-:A quarterly newsletter that offers Callan's observations on a variety of topics pertaining to the defined contribution industry.Each issue is updated with the latest Callan DC IndexTM returns. Capital Market Review: A quarterly macroeconomic indicator newsletter that provides thoughtful insights on the economy as well as recent performance in the equity,fixed income,altematives,international, real estate,and other capital markets. Hedge Fund Monitor.A quarterly newsletter that provides a current view of hedge fund industry trends and detailed quartedy performance commentary. Private Markets Trends:A seasonal newsletter that discusses the market environment,recent events,performance, and other issues involving private equity. Quarterly Data:The Market Pulse reference guide covers the U.S.economy and investment trends in domestic and international equities and fixed income, and alternatives. Our Inside Callan's Database report provides performance information gathered from Callan's proprietary database,allowing you to compare your funds with your peers. Real Assets Reporter.A recurring newsletter that offers Callan's data and insights on real estate and other real asset investment topics. Surveys ESG Interest and Implementation Survey Callan conducted a brief survey to assess the status of ESG, including responsible - and sustainable investment strategies and SRI, in the U.S. institutional market. We col- lected responses from 211 U.S. funds representing approximately $1.4 trillion in assets. This survey mentcaptures Management Fee Survey This survey captures institutional investment management fee payment practices and trends. We supplemented survey data(from 72 fund sponsors,$859 billion in assets and 211 invest- ment managers, $15 trillion In AUM)with Information from Callan's proprietary databases to establish the trends observed in this report. Callan conducted similar surveys in 2004,2006. 2009,and 2011. ® 2014 DC Trends Survey This annual survey presents findings such as: Plan sponsors made changes to target dale fund funds in 2013 and will continue to do so in 2014;Passive investment offerings are increasingly common in the core investment lineup:Plan fees Continue to be subject to considerable down- ward pressure;Retirement income solutions made little headway in 2013;and much more. 2013 Cost of Doing Business Survey Callan compares the costs of administering funds and trusts across all types of tax-exempt -3C and tax-qualifed organizabons in the U.S.,and we identify ways to help institutional investors manage expenses.We fielded this survey in April and May of 2013, The results incorporate responses from 49 fund sponsors representing$219 billion in assets. Callan Callan Investments Institute Events Did you miss out on a Callan conference or workshop?If so, you can catch up on what you missed by reading our 'Event Summaries"and downloading the actual presentation slides from our websile.Our most recent programs: 7,,, ■_ October 2014 Regional Workshop, The Education of Beta:An exploration of smart beta strategies, or alternatives to traditional cap-weighted indices. Our speakers were Angel Haddad;Gene Podkaminer,CFA;and Mark Stahl,CFA. ,„ ■� June 2014 Regional Workshop,Policy Implementation Decisions:A discussion of portfo- lio biases and the challenges therein.We looked at the common biases,how they've worked (or not) for the portfolio, and evaluating time horizons. Our speakers were Jay Kloepfer, 7_:_ Andy Ised,and Mike Swinney. Upcoming Educational Programs The 351h National Conference January 26-28,2015 in San Francisco Speakers include: Erskine Bowles,Alan Simpson, Maddy Dychtwald, Gary Locke, Daniel Pink, Philippe Cousleau, and the 2015 Capital Markets Panel.Workshops on active share, retirement in America, endowments and founda- tions,and DC plan fees. June and October 2015 Regional Workshops Dates and locations TBA Our research can be found at www.callan.comlresearch or feel free to contact us for hard copies. For more information about research or educational events,please contact Ray Combs or Gina Falsetto at institute@callan.com or 415-974-5060. Callan Callan Investments Institute 'CALLAN Callan COLLEGE" FOURTH OTR 2014 Education The Center for Investment Training Educational Sessions This educational forum offers basic-to-intermediate level instruction on all components of the investment manage- ment process.The'Callan College"courses cover topics that are key to understanding your responsibilities,the roles of everyone involved in this process, how the process works,and how to incorporate these strategies and concepts into an investment program.Listed below are the 2015 dates. An Introduction to Investments April 14-15,2015 in Atlanta July 21-22,2015 in San Francisco October 27-28,2015 in Chicago This one-and-one-half-day session is designed for individuals who have less than two years'experience with institu- tional asset management oversight and/or support responsibilities.The session will familiarize fund sponsor trustees, staff,and asset management advisors with basic investment theory,terminology,and practices. Participants in the introductory session will gain a basic understanding of the different types of institutional funds, including a description of their objectives and investment session structures.The session includes: A description of me different parties involved in the investment management process, including their roles and responsibilities • A brief outline of the types and characteristics of different plans(e.g.,defined benefit,defined contribution, endowments,foundations,operating funds) An introduction to fiduciary issues as they pertain to fund management and oversight • An overview of capital market theory,characteristics of various asset classes,and the processes by which fiduciaries implement their investment sessions Tuition for the Introductory"Callan College"session is$2,350 per person.Tuition includes instruction, all materials, breakfast and lunch on each day,and dinner on the first evening with the instructors. Customized Sessions A unique feature of the"Callan College"is its ability to educate on a specialized level through its customized sessions. These sessions are tailored to meet the training and educational needs of the participants,whether you are a plan spon- sor or you provide services to institutional tax-exempt plans.Past customized"Callan College"sessions have covered topics such as:custody,industry trends,sales and marketing,client service,international,fixed income,and managing the RFP process.Instruction can be tailored to be basic or advanced. For more information please contact Kalh leen Currie,at 415.274.3029 or cu nnie@callan.com. 0 m 0 Risk/Reward Statistics The risk statistics used in this report examine performance characteristics of a manager or a portfolio relative to a benchmark (market indicator) which assumes to represent overall movements in the asset class being considered. The main unit of analysis is the excess return, which is the portfolio return minus the return on a risk free asset (3 month T-Bill). Alpha measures a portfolio's return in excess of the market return adjusted for disk. It is a measure of the manager's contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk which was taken for that level of market exposure. Beta measures the sensitivity of rates of portfolio returns to movements in the market index. A portfolio's beta measures the expected change in return per 1% change in the return on the market. If a beta of a portfolio is 1.5,a 1 percent increase in the return on the market will result,on average, in a 1.5 percent increase in the return on the portfolio. The converse would also be true. Downside Risk stems from the desire to differentiate between "good risk" (upside volatility) and "bad risk" (downside volatility). Whereas standard deviation punishes both upside and downside volatility, downside disk measures only the standard deviation of returns below the target. Returns above the target are assigned a deviation of zero. Both the frequency and magnitude of underperformance affect the amount of downside risk. Excess Return Ratio is a measure of risk adjusted relative return. This ratio captures the amount of active management performance (value added relative to an index) per unit of active management risk (tracking error against the index.) It is calculated by dividing the managers annualized cumulative excess return relative to the index by the standard deviation of the individual quarterly excess returns. The Excess Return Ratio can be interpreted as the manager's active riskireward tradeoff for diverging from the index when the index is mandated to be the"riskless"market position. Information Ratio measures the manager's market risk-adjusted excess return per unit of residual risk relative to a benchmark. It is computed by dividing alpha by the residual risk over a given time period. Assuming all other factors being equal, managers with lower residual risk achieve higher values in the information ratio. Managers with higher information ratios will add value relative to the benchmark more reliably and consistently. R-Squared indicates the extent to which the variability of the portfolio returns are explained by market action. It can also be thought of as measuring the diversification relative to the appropriate benchmark. An r-squared value of.75 indicates that 75% of the fluctuation in a portfolio return is explained by market action. An r-squared of 1.0 indicates that a portfolio's returns are entirely related to the market and it is not influenced by other factors. An r-squared of zero indicates that no relationship exists between the portfolio's return and the market. Relative Standard Deviation is a simple measure of a managers risk(volatility)relative to a benchmark. It is calculated by dividing the manager's standard deviation of returns by the benchmark's standard deviation of returns. A relative standard deviation of 1.20, for example, means the manager has exhibited 20% more risk than the benchmark over that time period. A ratio of .80 would imply 20% less risk. This ratio is especially useful when analyzing the risk of investment grade fixed-income products where actual historical durations are not available. By using this relative risk measure over rolling time periods one can illustrate the "implied" historical duration patterns of the portfolio versus the benchmark. Residual Portfolio Risk is the unsystematic risk of a fund,the portion of the total risk unique to the fund(manager)itself and not related to the overall market. This reflects the"bets"which the manager places in that particular asset market. These bets may reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager considers a good investment opportunity. Diversification of the portfolio will reduce or eliminate the residual risk of that portfolio. Callan 32 Risk/Reward Statistics Sharpe Ratio is a commonly used measure of risk-adjusted return. It is calculated by subtracting the "risk-free" return (usually 3 Month Treasury Bill)from the portfolio return and dividing the resulting"excess return" by the portfolio's risk level (standard deviation).The result is a measure of return gained per unit of risk taken. Sortino Ratio is a downside risk-adjusted measure of value-added. It measures excess return over a benchmark divided by downside risk. The natural appeal is that it identifies value-added per unit of truly bad risk. The danger of interpretation, however, lies in these two areas: (1)the statistical significance of the denominator,and (2) its reliance on the persistence of skewness in return distributions. Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of the observations from their sample mean. Standard deviation is used as an estimate of risk since it measures how wide the range of returns typically is. The wider the typical range of returns,the higher the standard deviation of returns,and the higher the portfolio risk. If returns are normally distributed (ie. has a bell shaped curve distribution) then approximately 2/3 of the returns would occur within plus or minus one standard deviation from the sample mean. Total Portfolio Risk is a measure of the volatility of the quarterly excess returns of an asset. Total risk is composed of two measures of risk: market(non-diversifiable or systematic)risk and residual(diversifiable or unsystematic) risk. The purpose of portfolio diversification is to reduce the residual risk of the portfolio. Tracking Error is a statistical measure of a portfolio's risk relative to an index. It reflects the standard deviation of a portfolio's individual quarterly or monthly returns from the index's returns. Typically,the lower the Tracking Error, the more "Index-like"the portfolio. Traynor Ratio represents the portfolio's average excess return over a specified period divided by the beta relative to its benchmark over that same period. This measure reflects the reward over the risk-free rate relative to the systematic risk assumed. Note:Alpha,Total Risk,and Residual Risk are annualized. Callan 33 Fixed Income Portfolio Characteristics All Portfolio Characteristics are derived by first calculating the characteristics for each security, and then calculating the market value weighted average of these values for the portfolio. Allocation by Sector- Sector allocation is one of the tools which managers often use to add value without impacting the duration of the portfolio. The sector weights exhibit can be used to contrast a portfolio's weights with those of the index to identity any significant sector bets. Average Coupon-The average coupon is the market value weighted average coupon of all securities in the portfolio. The total portfolio coupon payments per year are divided by the total portfolio par value. Average Moody's Rating for Total Portfolio- A measure of the credit quality as determined by the individual security ratings. The ratings for each security, from Moody's Investor Service, are compiled into a composite rating for the whole portfolio. Quality symbols range from Aaa+ (highest investment quality-lowest credit risk)to C (lowest investment quality- highest credit risk). Average Option Adjusted(Effective)Convexity-Convexity is a measure of the portfolio's exposure to interest rate risk. It is a measure of how much the duration of the portfolio will change given a change in interest rates. Generally,securities with negative convexities are considered to be risky in that changes in interest rates will result in disadvantageous changes in duration. When a security's duration changes it indicates that the stream of expected future cash-flows has changed, generally having a significant impact on the value of the security. The option adjusted convexity for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-Flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Option Adjusted(Effective)Duration- Duration is one measure of the portfolio's exposure to interest rate risk. Generally, the higher a portfolio's duration, the more that its value will change in response to interest rate changes. The option adjusted duration for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-Flows for the security based on various interest rate scenarios. Expected cash-Flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Price-The average price is equal to the portfolio market value divided by the number of securities in the portfolio. Portfolios with an average price above par will tend to generate more current income than those with an average price below par. Average Years to Expected Maturity-This is a measure of the market-value-weighted average of the years to expected maturity across all of the securities in the portfolio. Expected years to maturity takes into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Years to Stated Maturity- The average years to stated maturity is the market value weighted average time to stated maturity for all securities in the portfolio. This measure does not take into account imbedded options, sinking fund paydowns,or prepayments. Current Yield-The current yield is the current annual income generated by the total portfolio market value. It is equal to the total portfolio coupon payments per year divided by the current total portfolio market value. Callan Fixed Income Portfolio Characteristics Duration Dispersion- Duration dispersion is the market-value weighted standard deviation of the portfolio's individual security durations around the total portfolio duration. The higher the dispersion, the more variable the security durations relative to the total portfolio duration ('barbellness"), and the smaller the dispersion, the more concentrated the holdings' durations around the overall portfolio's ('bulletness"). The purpose of this statistic is to gauge the 'bulletness" or 'barbellness'of a portfolio relative to its total duration and to that of its benchmark index. Effective Yield-The effective yield is the actual total annualized return that would be realized if all securities in the portfolio were held to their expected maturities. Effective yield is calculated as the internal rate of return, using the current market value and all expected future interest and principal cash flows. This measure incorporates sinking fund paydowns,expected mortgage principal prepayments,and the exercise of any"in-the-money"imbedded put or Call options. Weighted Average Life-The weighted average fife of a security is the weighted average time to payment of all remaining principal. It is calculated by multiplying each expected future principal payment amount by the time left to the payment. This amount is then divided by the total amount of principal remaining. Weighted average life is commonly used as a measure of the investment life for pass-through security types for comparison to non-pass-through securities. Callan 35 0 0 'm Callan Quarterly List as of _ December 31, 2014 List of Managers That Do Business with Callan Associates Inc. Confidential—For Callan Client Use Only Callan Associates takes its fiduciary and disclosure responsibilities to dients very seriously.The list below is compiled and updated quarterly because we believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As of 1931114, Callan provided educational, consulting, software, database, or reporting services to this list of managers through one or more of the following business units: InstiNtlonal Consulting Group, Independent Adviser Group, Fund Sponsor Consulting,the Callan Investments Institute and the "Callan College."Per stud policy these manager relationships do not affect the outcome or process by which any of Callan s services are conducted. Fund sponsor clients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to Callan by the managers employed by their fund. Per company policy, information requests regarding fees are handled exclusively by Callan's Compliance Department. Clients should also be aware that Callan maintains an asset management division, the Trust Advisory Group (TAG).TAG specializes in the design, implementation and on-going management of multi-manager portfolios for institutional Investors.Currently TAG serves as the sponsor and advisor to a mulemanager small cap equity fund and as the non-discretionary adviser to a series of Target Maturity Funds known as the Callan GlidePatho Funds. We are happy to provide clients with more specific information regarding TAG, including detail on the portfolios that it oversees. Per company policy these requests are handled by TAG's Chief Investment Cultures. Manager Name--Educational Services ' 1607 Capital Partners,LLC Y Aberdeen Asset Management Y Acadian Asset Management,Inc. Y Advisory Research '' Y = ' Affiliated Managers Group Y AllianceBemstein Y Allianz Global Investors U.S.LLC Y Y Allianz Life Insurance Company of North America Y Altnnsic Global Advisors,LLC Y American Century Investment Management I Apollo Global Management Y AQR Capital Management I 1� Area Management Y Adel Investments Anstotle Capital Management Y Aronson♦Johnson+01 1� Artisan Holdings Y Atlanta Capital Management Co.,L.L.C. Asset Strategy Consultants Y AXA Rosenberg Investment Management Babson Capital Management LLC Y Bill Gifford International LLC — Baird Advisors Y Y Bank of America IIIIIIIIII� Binding Asset Management Y Barrow,Hanley,Mewhinney&Strauss,Inc. BlackRock Y BMO Asset Management BNP Paribas Investment Partners Y BNY Mellon Asset Management Boston Company Asset Management,LTG(The) Y Y Boston Partners(aka Robeco Investment Management) Brandes Investment Partners,L.P. Y Y Bren lywine Global Investment Management,LLC / i Brown Brothers Harman&Company Y llan I Knowledge.Experience.Integrity. 1 List of Managers That Do Business with Callan Associates Inc.(continued) Confidential—For Callan Client Use Only Callan Associates takes its fiduciary and disclosure responsibilifies to clients very seriously.The list below is compiled and updated quarterly because we believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As of 1ZI31114, Callan provided educational, consulting, software, database, or reporting services to this list of managers through one or more of the following business units Institutional Consulting Group,Independent Adviser Group,Fund Sponsor Consulting,the Callan Investments Institute and the "Callan College."Per aged policy these manager relationships do not affect the outcome or process by which any of Callan'a services are conducted. Fund sponsor dients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to Callan by the managers employed by their fund. Per company policy, information requests depending fees are handled exclusively by Callan's Compliance Department. Clients should also be aware that Callan maintains an asset management division.the Trust Advisory Group (TAG).TAG spedalizes in the mail implementation and on-going management of multi-manager portfolios far institutional investors.Currently TAG serves as the sponsor and advisor to is multi-manager small cap equity fund and as the nan-discreoonary adviser to a series of Target Maturity Funds known as the Callan GlidePaths Funds. We are happy to provide clients with more specific information reganding TAG, including detail on the portfolios that it oversees. Per company policy these requests are handled by TAG's Chief Investment Office, Cadence Capital Management I— Y Capital Group Y CasheAA Management,LLC I— Y— Causeway Capital Management Y Central Plains Advisors,Inc. I— Y— Chandler Asset Management Y Cromwell Investment Partners — CleaiBridge Investments,LLC(No ClearBridge Advisors) Y Cohen&Steers Y— Columbia Management Investment Advisors,LLC Y Y Columbus Circle Investors Y— Corbin Capital Partners Y Cornerstone Capital Management Holdings(fka Madison Square) Cornerstone Investment Partners,LLC Y Cramer Rosenthal McGlynn,LLC Crawford Investment Council Y Credit Suisse Asset Management Crestime Investors Y Y Cutwater Asset Management IDS Advisors Y Y Delaware Investments Deplete,Race&Zollo,Inc. Y Y Deutsche Asset &Wealth Management Diamond Hill Investments Y DSM Capital Pampers — Duff&Phelps Investment Mi Y Y Eagle Asset Management,Inc. — EARNEST Partners,LLC Y Eaton Vance Management — Epoch Investment Partners Y Fayez Samfim&Company ' Federated Investors Y First Eagle Investment Management First State Investments Y Fisher Investments Franklin Templeton Y Y Fred Alger Management Co.,Inc. Fuller&Thaler Asset Management Y GAM(USA)Inc. GE Asset Management Y Y Geneva Capital Management —� Goldman Sachs Asset Management Y Y GrendJeam Capital Management —� GMO(f m Grantham,Mayo,Van Otterloo&Co.,LLC) Y Great Lakes Advisors,Inc. The Guardian Life Insurance Company of America Y Callan I Knowledge.Experience.Integrity. 2 List of Managers That Do Business with Callan Associates Inc.(continued) Confidential—For Callan Client Use Only Callan Associates takes its fiduciary and disclosure responsibiliges to clients Very seriously.The list below is compiled and updated quarterly because vas believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As of 1931114, Callan provided educational, consulting, software, database, or reporting services to this list of managers through one or more of the following business units Institutional Consulting Group,Independent Adviser Group,Fund Sponsor Consulting,the Callan Investments Institute and the "Callan College."Per aged policy these manager relationships do not affect the outcome or process by which any of Callan'a services are conducted. Fund sponsor dients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to Callan by the managers employed by their fund. Per company policy, information requests depending fees are handled exclusively by Callan's Compliance Department. Clients should also be aware that Callan maintains an asset management division.the Trost Advisory Group (TAG).TAG specializes in the resign, implementation and on-going management of multi-manager portfolios far institutional investors.Currently TAG serves as the sponsor and advisor to is multi-manager small cap equity fund and as the nan-discreoonary adviser to a series of Target Maturity Funds known as the Callan GlidePath®Funds. We are happy to provide clients with more specific information reganding TAG, including detail on the portfolios that it oversees. Per company policy these requests are handled by TAG's Chief Investment Officer. Guggenheim Investments Asset Management(No Security Global) — GW&K Investment Management Y Hancock National Resources Group )— Hares Associates Y Harbor Capital 1- Y— Hartford Investment Management Co. Y Y Heightman Capital Management Corporation Henderson Global Investors Y Y Hotchkis&Wiley Impax Asset Management Limited Y Income Research&Management Industry Funds Management Y Insight Investment Management Institutional Capital LLC Y INTECH Investment Management Invesco Y Y Investment Management of Virginia Invested Asset Management Y Jacobs Levy Equity Management Janus Capital Group mm Janus Capital Management,LLC) Y Y Jensen Investment Management J.M.Hartwell Y J.P.Morgan Asset Management KeyCOrp Y Lazand Asset Management Lee Murder Capital Group Y Lincoln National Corporation Logan Circle Partners,L.P. Y Longview Partners Loomis,Store&Company,L.P. Y Y Lod Abbeft&Company Los Angeles Capital Management Y LSV Asset Management Lyrical Partners Y MacKay Shields LLC V Man Investments Y Manufde Asset Management Y Martin Currie Y Marvin&Palmer Associates,Inc. Mellon Capital Management Y MPS Investment Management MidFirst Bank Y Mondrian Investment Partners Limited Montag&Caldwell,Inc. Y Y Morgan Stanley Alternative Investment Partners Morgan Stanley Investment Management Y Y Callan I Knowledge.Experience.Integrity. 3 List of Managers That Do Business with Callan Associates Inc.(continued) Confidential—For Callan Client Use Only Callan Associates takes its fiduciary and disclosure responsibilifies to clients very seriously.The list below is compiled and updated quarterly because vas believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As of 1931114, Callan provided educational, consulting, software, database, or reporting services to this list of managers through one or more of the following business units Institutional Consulting Group,Independent Adviser Group,Fund Sponsor Consulting,the Callan Investments Institute and the "Callan College."Per aged policy these manager relationships do not affect the outcome or process by which any of Callan'a services are conducted. Fund sponsor dients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to Callan by the managers employed by their fund. Per company policy, information requests depending fees are handled exclusively by Callan's Compliance Department. Clients should also be aware that Callan maintains an asset management division.the Trust Advisory Group (TAG).TAG specializes in the resign, implementation and on-going management of multi-manager portfolios far institutional investors.Currently TAG serves as the sponsor and advisor to is multi-manager small cap equity fund and as the nan-discreoonary adviser to a series of Target Maturity Funds known as the Callan GlidePath®Funds. We are happy to provide clients with more specific information reganding TAG, including detail on the portfolios that it oversees. Per company policy these requests are handled by TAG's Chief Investment Officar. Mountain Lake Investment Management LLC I- MUFG Union Bank,N.A. Y Neuberger Berman.LLC(fie,Lehman Brothers) I- V Newton Capital Management Y Northern Lights Capital Group I- 1 Nodhem Trust Global Investment Services Y Y Nuveen Investments Institutional Services Group LLC I 1 Old Mutual Asset Management Y Y OppenheimerFunds,Inc. 1 O'Shaughnessy Asset Management,LLC Y Pacific Investment Management Company 1 Palisade Capital Management LLC Y Parametric Portfolio Associates 1 Peregrine Capital Management,Inc. Y Y Philadelphia International Advisors,LP 1 PineBridge Investments(formerly AIG) Y Pinnacle Asset Management I 1 Pioneer Investment Management,Inc. Y PNC Capital Advisers(tka Allegiant Asset Mgmt) Pull Capital Management Y Post Advisory iiiiiiiiiiiin 1 Principal Financial Group Y Principe)Global Investors I 1 Private Advisers Y Prudential Fixed Income Management I 1 Prudential Investment Management,Inc. Y Y Putnam Investments,LLC I 1 Pyramis Global Advisors Y Rainier Investment Management I 1 RBC Global Asset Management(U.S.)Inc. Y Y Research Affiliates I 1 Regions Financial Corporation Y RCM I 1 Robeco Investment Management(aka Boston Partners) Y Y Rothschild Asset Management,Inc. I 1 IRS Investments Y Russell Investment Management Santander Global Facilifies Y Schrader Investment Management North America Inc. I 1 Scout Investments Y SEI Investments I 1 SEIX Investment Advisors,Inc. Y Select Equity Group I 1 Silvercrest Asset Management Company Y Smith Graham and Company I 1 Callan I Knowledge.Experience.Integrity. 4 List of Managers That Do Business with Callan Associates Inc.(continued) Confidential—For Callan Client Use Only Callan Associates takes its fiduciary and disclosure responsibilil es to clients very seriously.The list below is compiled and updated quarterly because vas believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As of 1931114, Callan provided educational, consulting, software, database, or reporting services to this list of managers through one or more of the following business units Institutional Consulting Group,Independent Adviser Group,Fund Sponsor Consulting,the Callan Investments Institute and the "Callan College."Per aged policy these manager relationships do not affect the outcome or process by which any of Callan'a services are conducted. Fund sponsor dients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to Callan by the managers employed by their fund. Per company policy, information requests depending fees are handled exclusively by Callan's Compliance Department. Clients should also be aware that Callan maintains an asset management division.the Trust Advisory Group (TAG).TAG specializes in the resign, implementation and on-going management of multi-manager portfolios far institutional investors.Currently TAG serves as the sponsor and advisor to is multi-manager small cap equity fund and as the nan-discreoonary adviser to a series of Target Maturity Funds known as the Callan GlidePaths Funds. We are happy to provide clients with more specific information reganding TAG, including detail on the portfolios that it oversees. Per company policy these requests are handled by TAG's Chief Investment Officar. Smith Group Asset Management V Standard Life Investments T - Standish dues,Standish Mellon Asset Management) y State Street Global Advisors - Stone Harbor Investment Partners,L.P. V V Systematic Financial Management ) �� T.Rowe Price Associates,Inc. V V Taplin,Carl&Habacht TCW Asset Management Company V UBS Van Eck V Victory Capital Management Inc. Voya Investment Management(No ING Investment Management) V V Vulcan Value Partners,LLC Waddell&Reed Asset Management Group V V Wall Street Associates WCM Investment Management V WEDGE Capital Management Wellington Management Company,LLP V Wells Capital Management Western Asset Management Company V William Blair&Co.,Inc. Callan I Knowledge.Experience.Integrity. 5 CLIENT: Orange County Sanitation District REPORT TYPE: IMS ORGID: 4236 REPORT ID: 109 REPORT DATE: Dec 31, 2014 CONSULTANT OFFICE MAILING DUE DATE Gordis Weightman CO Feb 42015 BINDING: GBC Binding PRINT PAGE: DOUBLE TOTAL COPIES CLIENT COPIES CONSULT COPIES 5 5 0 DATE MAILED: TAB POS#: 1 PAGE NUMBER: 3 TAB POS#: 2 PAGE NUMBER: 10 TAB POS#: 3 PAGE NUMBER: 13 TAB POS#:4 PAGE NUMBER: 20 TAB POS#: 5 PAGE NUMBER: 27 TAB POS#: 1 PAGE NUMBER: 33 TAB POS#: 2 PAGE NUMBER: 38 END COPY INSERT PAGE NUMBER: 44 CLIENT: Orange County Sanitation District Mr. Michael White Controller Number of Reports County Sanitation Districts of Orange County 5 10844 Ellis Avenue P.O. Box 8127 Fountain Valley, CA 92708 D8 Investment Report Orange County Sanitation District Period Ending December 31, 2014 Diego, CA 92121 1 Phone 800.317.4747 All Table of Contents SECTION 1 Economic Update SECTION 2 Account Profile SECTION 3 Consolidated Information SECTION 4 Portfolio Holdings SECTION 1 Economic Update o. GKI Economic Update ■ The December employment report was somewhat mixed. Nonfarm payrolls rose by 252,000 in December, following strong gains of 353,000 and 261,000 in November and October, respectively. The unemployment rate also declined to 5.6% from 5.8%. However, wages declined 0.2% in December and the labor participation rate also fell to 62.7% from 62.9%. The manufacturing sector continues to show strength and consumer confidence was high heading into 2015. We believe low gas prices should provide an ongoing tailwind for consumer spending. Meanwhile, housing data remains volatile in spite of ongoing low mortgage rates. Overall, we believe the economy continues to grow at a modest pace and the labor market continues to expand. However, we believe weakness in wages and the labor participation rate in December leaves the door open for the Fed to be patient with policy rate changes. ■ The Federal Open Market Committee (FOMC)left policy rates unchanged at its final meeting of 2014. The FOMC indicated that it will take a "patient" approach toward normalizing monetary policy, and implied that the first rate hike is likely to be in (or around) mid-2015 based on the Fed's economic forecasts. Overall, the FOMC's guidance on policy action was consistent with its previous guidance, but the Committee is moving away from its "considerable time" language and emphasizing that policy changes will be data-dependent. During her post-meeting press conference, Fed Chair Yellen indicated that policy rates would likely remain unchanged for at least the next couple of FOMC meetings.This suggests that a rate hike is unlikely to happen any sooner than April, unless there is an unexpected change in economic data. The Committee also expects the fed funds rate to approach a more normalized level by the end of 2017, which suggests that any rate increases are likely to be gradual over the next few years. We expect FOMC members will continue to debate the appropriate timing of the first fed funds rate hike when they meet again on January 27-28, 2015. ■ During the past three months,the yield curve flattened. Concerns about weak global economic growth kept downward pressure on longer US Treasury yields, even as the Fed signaled the possibility of a fed funds rate hike this year. 0111 Employment Nonfarm Payroll (000's) Unemployment Rate mo &0% 350 7.5% 300 z50 7.0% S zoo O 6.5% 150 VV 100 6.0% 50 5.5% LJd J,� J3 J3 J3 o Ja z J� Jy Jy Jy Ja o Ji 2'Jv Sow U.S.0epert f arLa Nonfarm payrolls rose by 252,000 in December,above the consensus forecast of 245,000. The unemployment rate declined to 5.6% from 5.8%. The net revisions in nonfarm payrolls for November and October were +50,000 (with very strong gains of 353,000 and 261,000 in November and October, respectively). private payrolls rose by 240,000 in December, while government jobs rose by 12,000. Meanwhile, the labor participation rate declined to 62.7%from 62.9%.Wages also decreased 0.2%,versus expectations for a 0.2% increase. 0111 Consumer Retail Sales Y-O-Y % Change Consumer Credit 6.0% M 5.0% 25 q 4.0% p 20 m 3.0% W 15 R 2.0% C 10 O 1.0% 5 0.0% Wkw 0 >, 3 " 3 3 3 % 4 4 4 9 4 )y 12 3 3 3 a� 3 13 4 4 9 4 4 14 Source:U.S.O partment o(Commeroe Source:FeEeral Reserve In November, retail sales rose 5.1% on a year-over-year basis versus a gain of 4.5% in October. On a month- over-month basis, retail sales rose 0.7% in November after increasing 0.5% in October, exceeding expectations. Gasoline sales were a drag on retail sales in both months due to lower prices. Overall, consumer spending is showing positive momentum. Consumer credit rose by$14.1 billion in November versus a gain of $16.0 billion in October. The gain was fueled by nonrevolving credit(student and auto loans)which rose$15.0 billion in November,while revolving credit(credit cards)fell by$0.9 billion. C1111 Broad Measures Single-Family Housing Starts Leading Economic Indicators 800 1.2% 700 1.0% wo 0.8% wo 0.6% n 0 40D 0.4% e wo 0.2% 200 0.0% 100 -0.2% >�> �>� .Z>� .L>� �>3 .%>� >�> �>9 .✓>9 &>p �>9 H,>4 >�> >�> >/>�, 3i>3 �>3 �/>�, 9i>�, >�> L>p �>g Si>A �>A W>g >�> 2 3 9 2 3 9 source:US Department of commertn so.. The coakre.8.a Housing data remains volatile. Single-family housing starts fell 5.4% in November after increasing 8.0% in October.The index of Leading Economic Indicators (LEI)rose 0.6% in November after a 0.6%gain in October. Overall,the LEI index continues to point to modest economic growth. Cjjjj Manufacturing Institute of Supply Management Capacity Utilization Purchasing Manager Index 60.0 80.5% Et<"ndin8 80.0% 57.5 ]9.5% 55.0 79.0% 8.5% 52.5 ]8.0% 50.0 77.5% 77.0% 47.5 CaMraNn 76.5% 45.0 76.0% q> di> )Q >? >� L> �) Si) i) ,Q) > L) .Z) ,�> i) Q) >� 9 4 , 3 J .3 3 4 P A 4 A lP Souae:InVaUR(w SUWIY Management S.:FWtle Reserve During December, the ISM manufacturing index declined to 55.5 from 58.7 in November. Nevertheless, the December reading continued to signal ongoing growth in the manufacturing sector. A reading above 50.0 is viewed as expansionary in the manufacturing sector, while a reading below 50.0 suggests contraction. Capacity utilization, which is production divided by capacity, increased to 80.1% in November from 79.3% in October. The capacity utilization rate is now in line with the long- run average of 80.1% (1972-2013). Cjjjj Inflation CPI Y-O-Y % Change Core CPI Y-O-Y % Change 2.5% 2.5% 2.0% 2.0% 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% >> L� Source:US Department of Labor In November, overall Consumer Price Index (CPI) inflation declined to 1.3% on a year-over-year basis from 1.7% in October.The year-over-year Core CPI(CPI less food and energy) also declined to 1.7% in November from 1.8% in October. Gross Domestic Product GDP Quarterly % Change 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% $j2 '2�>?Wj3 �j3 Si�3 '2�>3�jp Bid? BijY Sour US.Departmento/Donxrcvice Real annualized GDP growth for the third quarter of 2014 was revised up to 5.0%from the second estimate of 3.9%. Personal consumption expenditures (particularly in the services sector) and nonresidential fixed investment increased more than previously estimated. The third quarter gain follows GDP growth of 4.6% in the second quarter, and a 2.1%decline in GDP during the first quarter. Interest Rates Yield on the Two-Year Note December 2012 through December 2014 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% Bourte:BlownOery The yield on the two-year Treasury note increased in December, following two months of declines. Domestic economic data continued to be fairly solid in December, but concerns about weak global economic growth (particularly in Europe) remained elevated. RI Yield Curves September 30, 2014 and December 31, 2014 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Jo .JQ 0 0 swae:BbamUdg During the past three months, the yield curve flattened. Concerns about weak global economic growth kept downward pressure on longer US Treasury yields, even as the Fed signaled the possibility of a fed funds rate hike this year. . S= Account Profile 011 Objectives Investment Objectives The investment objectives of the Orange County Sanitation District are first, to preserve principal; second, to ensure liquidity; and third, to earn a return that is commensurate with the first two objectives. Funds available for investment are segregated into two separate portfolios in order to meet the District's investment goals. The Liguid Operating Monies The Liquid Operating Fund will be compared to the 3-month T-Bill. The Long-Term Operating Monies The Long-Term Operating Fund will be compared to the Bank of America Merrill Lynch 1-5 Year "A-A US Corporate and Government Index. Chandler Asset Management Performance Objectives The performance objective of the Liquid Operating Fund shall be to exceed the return on the benchmark index of the 3-month T-Bill over a market cycle. The performance objective of the Long-Tenn Operating Fund shall be to exceed the return on the benchmark index of the 1-5 Year AAA-A US Corporate and Government Index over a market cycle. Strategy The accounts invest in high-quality fixed income securities. The maximum final maturity for any security is five years. Compliance C'" Orange County Sanitation District Long Term December 31,2014 COMPLIANCE WITH INVESTMENT POLICY Assets managed by Chandler Asset Management are in full compliance uvth State lawand Wth the immstmentpolicy Category Standard Comment Treasury Issues 5 years maximum maturity Does not comply' Supranational "AA"or better by l of 3 NRSROs; 30%maximum; 5%max; 5 Complies yearsmatuft Includesonl : tADB IBRD and IFC per CGC U.S.A encies 20%max issuer 5 yeam maximum mawrity, Complies U.S.Corporate(MTNs) "A"or better long term rating by 1 of 3 NRSROs; 30%maximum; Does not compy' 5%max issuer' 5 yeams max maturity Municipal Securities "A"or higher by l of 3 NRSROS;10%maximum; 5%max issuer, Does not comply' 5 years maximum maturty Asset Backed/CMOs/ "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 Does not comply" Mortgage-backed of3NRSROs; 20%maximum; 5%maxissuer(excluding MBS/ijovtagency):5 ars max maturity Negotiable CDs "A"or better on its long tens debt by l of 3 NRSROs; "Al/Pi"or Complies highest short tens ratings by 1 of 3 NRSROs; 30%maximum;5% max issuer' S Wars max maturity CDs1TDS 5%max issuer' S Were max aturfty complies Banker's Acceptances A-1,or equivalent highest short tens rating by l of 3 NRSR0S; Complies 40%maximun; 5%max issuer;180 days max maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS; "A"or better by l of 3 Complies NRSROs,if long tens debt issued; 25%maximum; 5%max issuer, 270 days max maturity Money Market Fund Highest rating by 2 of 3 NRSROs; 20%maximum;10%max issuer Complies Repurchase A reements 102%collaterallzation Complies Reverse Repurchase 5%maximum,90 days max maturity Complies Agreements LAIF 1 Not usetlb hn stmerftadviser Com lies A Duration Not to exceed 60 months - 80%to 120%of the benchmark Complies Maximum Maturity 5 years maximum maturity Does net comply' 063 securi ies hale maturities deer 5 years. Securities sere inhented from previous manager. "ABS,MBS and CMO positions with matunties over ,5 years and SVHE(CUSIP 83611MGS1)Is retell AHA raspectively by S&P and Fitch. These securities wars Inherited tram previous manager. 11% Account Profile Portfolio Characteristics Orange County Sanitation District Long Term 12/31/2014 11/30/2014 Benchmark` Portfolio Portfolio Average Maturity(yrs) 2.77 2.67 3.52 Modified Duration 2.61 2.12 2.63 Average Purchase Yield n/a 0.95 % 1.18 Average Market Yield 1.11 % 0.82 % 0.92 % Average Quality— AAA AA+/Aal AA+/Aal Total Market Value 433,533,526 318,881,915 '1-5 Year GOWA Rated or better Goryodds Benchmark Is a blended rating of S&P,Moody's,and Fitch.POMollo Is S&P and Moody's respecewly. Multiple securities were purchased across the Treasury, Agency, Commercial Paper, and Corporate sectors of the market to begin the process of altering the sector allocation and maturity distribution of the portfolio to be more consistent with a 1-5 year mandate. The purchased securities ranged in maturity from January 2015 to November 2019. Several securities were sold with maturities greater than five years; the Chandler team will continue to reduce the longer maturity exposure of the portfolio in coming months. $115.5 million was contributed to the portfolio in two tranches during the month of December. jj'j Sector Distribution Orange County Sanitation District Long Term December 31, 2014 November 30, 2014 Municipal Municipal Bolls US sBars U8 3.8% 6.5% c-pama Corporate Money % 11.8% 14.8% Market Money Fur Market FI Fund FI 2.9% MBS 13% May 1.8% Commercial Paper 8.2% I C6% Un 0.8% US CMO Treasury Treasury 0.8% 38.1% 357% Agency Agency 37.6% 21]% ABS ------_____ ABS 01 %- 0.1 °o— The sector allocation changed moderately during the quarter. The Agency and Corporate allocation each declined by 9.9% and 2.8%, respectively, offset by an 8.2% allocation to Commercial Paper and the 2.4% increase to the Treasury allocation. Going forward the Chandler team anticipates opportunistically building out the Corporate and ABS exposure at the expense of the Treasury allocation. Issuers G" orange county sanuaflon 131alrlct Lots Tema Issuer Report Account Yf0288 As o112l31=14 Govemmentof UnikAstales USl� 39.11% Federal Home Loan Mortgage Cap Agency 10.68% Federal Home Loan Book Agency 939% Dmfus Treasury MMKT FD 521 Moncy Market Fund FI 8.47% Federal National Mortgage Association Agency 7AO% Hankof America Corp US Coryaate 1.97% Hona Motor Con mlion Commercial Paper 1.0% Exxon Mobil Corp Commercial Pap, 1.95% Bank of Tokyo-Mit UFJ Commercial Paper 1.95% PNC Financial Services Group Commercial Paper 1.61% Wells Fargo Corp IISCorpumm 1.58% JP Morgan Chao R Co US Cory lc 131% Toyma Maa Cory US Corporate 12 % Paeear Financial Commecial Paper Lffi% Eli Lilly A Cc US Corpaste 0.93% ChavronTex.Corp US Corpmte 0.92% Morgan Stanley US Corporate 0.91% Federal Natural Mortgage Association MB5 0.80% Amman Express Cnedil US Coryomlc O.T9% Pat Amhonry of New Yak an New Jersey Municipal Bond 0."% Illinois St Toll Highway Auelonry Municipal Bons 0."% Goldman Sachs Jm. US Corporate 0.62% StmeofCalif is Municipal Bons 052% Philip Mortis US Corporate 0.42% Bay Area Goat As . Municipal Bond 039% New Yode NY Municipal Bonds 037% Massachusetts St Pon Anlhonty Municipal Bons 036% New York City T.itiooal Finance Authority Municipal Bons 033% Texa.Sale Tonoolation Canmision Municilel Bons 033% Federal Home Loan Mortgage Cory MBS 0.32% Amgen Inc US Cmry me 0.32% Deere A Company US Co porme 028% Simon P openy Group Inc US Corporae 0.26% ill Issuers Continued Gill OrangeCounty Sanitation District Long Term Issuer Report Account#10288 As of 12/31/2014 Federal Home Loan Mortgage Corp C\IU 0.25% Southern Company US Corporate 0.23% NCUA Guaranteed Notes CMO 0.23% AFLAC Inc US Corporate 0.12% Federal National Mortgage Association CMO 0.12% University orcalifomia Municipal Bonds 0.11% Met Traraportation Authority NY Municipal Bonds 0.10% GNMA MBS 0.09% Soundview Home Equity Loan Trust MBS 0.05% Citigroup Inc US Corporate 0.05% Small Business Administration ABS 0.04% AMRESCO Residents]Securities Cap MBS 0.03% SLM Cory ABS 0.01% Wells Fargo Home Equity Trust MBS 0.01% Total 100.00% Quality Distribution Orange County Sanitation District Long Term December 31, 2014 vs. November 30, 2014 faoox wb% &oox 700% eoox soox 400x 300% z0ox 1o0% oo x AAA AA A <A NR 11/31114 11/30/14 AAA AA A <A NR 12/31/14 20.1 % 71.4% 6.9% 0.8% 0.8% 11130114 18.7% 67.4% 11.1 % 1.7% 1.1 % Soume:S&P Ratings Duration Distribution Orange County Sanitation District Long Term Portfolio Compared to the Benchmark as of December 31, 2014 50.0 x 45.0 x 400x 350x 300% 250x 20.0 15.0 w.o% 5.0 x 0.0 x 0-025 025-0.50 050-1 1-2 2 - - - 4-5 5+ Portfolio Bwwdwn rk' 0-0.25 0.25-0.50 0.50-1 1 -2 2-3 3-4 4.5 5+ Portfolio 42.4% 2.5% 7.6% 8.4% 6.1 % 2.5% 23.3% 7.4% Benchmark' 0.3% 0.0% 3.0% 31.1 % 28.6% 23.0% 13.9% 0.0% '1-5 Year GoWA Rated or better corporate The duration of the portfolio contracted to 2.12 versus 2.63 due to the aforementioned large contribution to the portfolio. The District has a large liquidity need at the end of January so the Chandler team is keeping liquidity high, and the duration short, until the cash flows out of the portfolio at the end of January. ��" Investment Performance Orange County Sanitation District Long Term Period Ending December 31, 2014 Total Rate of Return Since Inception November 30,2014 0.00 x -0.05 x -0.10 -0.15 -0.20 -0.25 x -0.30 -0.35 Since Inception Orange County Sanitation District Long Tam 1-5 Year GovdA Rated a better Corporate Latest 3 months Since Inception Orange County Sanitation District Long Tenn N/A -0.22% 1-5 Year Govt/A Rated or better Corporate N/A -0.32% Total rate of retum:A measure of a portfolio's performance overtime. It is the internal rate of retum,which equates the beginning value of the portfolio with the ending value;it includes interest earnings,realized and unrealized gains and losses in the portfolio. Compliance CAS Orange County Sanitation District Liquid December 31,2014 COMPLIANCE • Assets managed by Chandler Asset Management are in full compliance aith State lawand with the investmentpolicy Category Standard Comment Treasury issues 1 year maximum maturity, Minimum allocation of 10% Complies Supranationtil "AA"orbetterby1of3NRSR0s; 30%maximum; 5%maK 1 Complies ar maturi , Includes o . fADB,BRD,and IFC erCGC U.S.Agencies 20%max issuer; 1 year maximum maturity Complies U.S.Corporate(MTNs) "A"or better long term rating by 1 of 3 NRSROs;30%maximum; Complies 5%max issuer; 1 year max maluri Asset Backed/CMOs "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 Complies of 3 NRSROs; 20%maximum; 5%max issuer, 1 year max maturity Negotiable CDs "A"or better on its long term debt by l of 3 NRSROs; "A1/Pl"or Complies highest short term ratings by 1 of 3 NRSROs; 30%maximum;5% max issued year max maturity CDs/TDS 5%max issuer; 1 year max maturi Complies Banker's Acceptances A-1,or equivalent highest short term rating by l of 3 NRSROS; Complies 40%maximum; 5%max issuer 180 days max maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS; "A"or better by l of 3 Complies NRSROs,if long term debt issued; 25%maximum; 5%max issuer, 270 days max maturity Money Market Fund Highest rating by 2 of 3 NRSROs; 20%maximum; 10%max issuer Complies Repurchase A reements 102%collatemlietion Complies Reverse Repurchase 5%maxmurn,90 days max maturity Complies Agreements LAIF Not mad by investment adviser lComplies Prohibited Municipal Securities Cam lies Prohibited Mortgage Securities Com lies Avg Duration Notto exceed 180 days; Maxdumtion of 1/2 year 1COMDlies Maximum Maturity 1 year maximum maturity Complies 11% Account Profile Portfolio Characteristics Orange County Sanitation District Liquid 12/31/2014 11/30/2014 Benchmark` Portfolio Portfolio Average Maturity(yrs) 0.16 0.27 0.12 Modified Duration 0.15 0.27 0.11 Average Purchase Yield n/a 0.17 % 0.10 Average Market Yield 0.02 % 0.24 % 0.14 % Average Quality— AAA AA+/Aal AA+/Aal Total Market Value 56,923,342 33,921,559 '91 Day T-bill "Benchmark Is a blended rating of S&P,Moody's,and Fitch.POMollo Is S&P and Moody's respecdvely. Multiple securities were purchased across the Agency, Commercial Paper, and Corporate sectors of the market to spend down contributed cash and diversify the individual holdings by sector, maturity, and issuer. The purchased securities ranged in maturity from January 2015 to November 2015. Six securities matured during the reporting period and $23 million was contributed to the liquidity strategy. C�" I Sector Distribution Orange County Sanitation District Liquid December 31, 2014 November 30, 2014 Money Co n nemial Market Paper Fund 4.4% FI 20.7% Money Amy McAuet us 58.0% Fund Corporate FI Al 18.1% 7s% \us A9enq Cmporete 424% 14 8.5% us us Treasury Treasury 11.3% 1&9% The sector allocation changed materially with the aforementioned large contribution to the portfolio. The Agency allocation increased by 15.6% to 58.0% of the portfolio, offset by the 12.8%decline in the money market allocation to 7.9% of the portfolio and the 7.6% decline in the Treasury allocation to 11.3% of the portfolio. Additionally, Chandler began to utilize Commercial Paper in the strategy and the allocation at year end was 4.4%of the portfolio. Issuers C/" Orange County Sanitation District Liquid Issuer Report Account k10282 As of 12131/2014 Federal Home Loan Bank Agency 0,20% Federal Home Loan Mortgage Corp Agency 17.22% Federal National Mortgage Association Agency 14.49% Government of United States US Treasury 11.25% Dreftes Treasury MMKT Fly 521 Money Market Fund FI 7.92% Federal Faun Credit Bank Agemy 7.08% Caterpillar Inc US Corporate 3.53% General Electric Cc US Corporate 1.78% Deere&Company US Corporate 1.78% IBM Corp US Corporate 1.76% Paccar Financial Commercial Paper 1.76% Banc of Tokyo-Mit UFJ Commercial Paper 1.76% Credit Suisse Group US Corporate 1.17% Bank of New York US Corporate 1.14% Wells Fargo Corp US Corporate L 12% 1P Morgan Chase&Cc US Corporate 1.12% Pepsi.Inc US Corporate 1.11% Anheuser-Basch US Corporate 1.10% United Health Group Inc US Corporate 1.09% Citigroup Inc US Corporate 1.06% MC Financial Services Group Commercial Paper 0.88% Prmemr US Corporate 0.69% Total 100.00% Quality Distribution Orange County Sanitation District Liquid December 31, 2014 vs. November 30, 2014 faoox wb% 800x 7o0x eoox soox 400x 300% z00x 1o0% oo x AAA AA A <A NR 11/31114 0 11/30/14 AAA AA A <A NR 12/31/14 9.5% 75.6% 14.9% 0.0% 0.0% 11/30114 27.1 % 54.8% 18.1 % 0.0% 0.0% Source:S&P Ratings Duration Distribution Orange County Sanitation District Liquid December 31, 2014 vs. November 30, 2014 100.0•r, 90.0 x 80.0 x Me x 80.0 50.0 40.0 30.0 Mex 10.0% 0.0% 0-025 025-050 0.50-1 1-1.5 1.5-2 2-2.5 2.5-3 3. 12r3l/14 1lr"4 0-0.25 0.25-0.50 0.50-1 1 -1.5 1.5-2 2-2.5 2.5-3 3+ 12131/14 62.9% 17.6% 19.5% 0.0% 0.0% 0.0% 0.0% 0.0% 11130/14 92.5% 7.5% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% The duration of the portfolio increased to 0.27 versus 0.11 at the end of November. Chandler will be working with staff to better understand long-term liquidity needs specific to the liquidity portfolio to positon the portfolio accordingly. ��" Investment Performance Orange County Sanitation District Liquid Period Ending December 31, 2014 Total Rate of Return Since Inception November 30,2014 Latest 3 months Since Inception Orange County Sanitation District Liquid N/A 0.00% 91 Day T-bill N/A 0.00 Total rate of retum:A measure of a portfolio's performance overtime. It is the internal rate of return,which equates the beginning value of the portfolio with the ending value;it includes interest earnings,realized and unrealized gains and losses in the portfolio. SECTION 3 i Consolidated Information IA Account Profile Portfolio Characteristics Orange County Sanitation District Consolidated 12/31/2014 11/30/2014 Portfolio Portfolio Average Maturity(yrs) 2.41 3.22 Modified Duration 1.90 2.39 Average Purchase Yield 0.85 % 1.07 % Average Market Yield 0.76 % 0.85% Average Quality— AA+/Aa1 AA+/Aa1 Total Market Value 490,825,152 353,195,507 jj'j Sector Distribution Orange County Sanitation District Consolidated December 31, 2014 November 30, 2014 Money Maret Municipal Fund! Municipal Bonds5.8% US FI Bonds Cownde 3A% Money 1&0% MBS ;' Market 1.1% Fund! FI Comran Stack US MBS OD% Corporate 1.6% 128 9a comr ancial Common Paper Stock 7.8% 0.0% US US CIAO Treasury CMO Treasury 0.5% 35.0% 0.8% X0% Agency Agency 312% 38.0% ABS ABS 0.0% 0.1% SECTION 4 Portfolio Holdings OROrange County Sanitation District Long Term Holdings Report Account#10268 As of 12/31/14 P.rch.a.Data cosuvalue Md Price Market Value %of Pod. Moody/S&P Maturity CUSIP Security Description Par ValuelUnits Book Yield Book Value Mkt YTM Accrued Ind. Galall-oss Fitch Duration ABS 831620LJO Small Business Administration 2001-20C 178,711.65 OW06/2001 178,711.65 105.53 188,596,73 0.04% Asa IAA+ 617 6.34%Due 3/1/2021 6.34% 178,711.65 4.51 % 3,776.77 9,885.08 AAA 2.93 78445JAA5 SLMA200MA 50,415.52 08/2W2008 SO,21OS7 102.71 51,779.61 0.01 % Aaa/AA+ 8.32 1.733%Due 4/25/2023 1.82% 50,352.66 0.85% 165.04 1,426.95 AAA 0.12 228,922.62 240,376.34 a."% Aaa/AA+ 6.63 Total ASS 229,127.17 5.35% 229,084.31 3.73% 3,941.81 11,312.03 Aaa 2.33 AGENCY 313588AE5 FNMA Discount Note 5,000,000.00 09/03/2014 4,998,898.61 100.00 4,999,963.89 1.15% P-1/A-1+ 0.01 Due 1/5/2015 O.oT% 4,999,963.89 0.07% 0.00 non F-1+ 0.01 313396AH6 FHLMC Discount Note 3.300,000.00 06/122014 3.298,275.75 100.00 3,299,942.25 0,76% Asa/AA+ 0.02 Due 118/2015 0.09% 3,299,942.25 0.09% 0.00 0.00 AAA 0.02 313384AP4 FHLB Discount Note 10,300,000.00 09/03/2014 10,297,376.36 100.00 10,299,739.64 2.30% P-1/A-1+ 0.04 Due 1/14/2015 0.07% 10,299,739.64 0.07% 0.00 0.00 F-l+ 0.04 313588AX3 FNMA Discount Note 6,000,000.00 1MM014 5,999,586.67 100.00 6,999,720.00 1.38% P-1/A-1+ 0.06 0.08%Due 1/22/2015 0.08% 5,999720.00 0.08% 0.00 0.00 F-l+ 0.06 313384AY5 FHLB Discount Note 10.400,000.00 11/072014 10,398]]6.56 100.00 10.399,650.45 2.40% Ass/AA+ 0.06 Due 1/23/2015 0.06% 10,399,650+45 0.06% 0.00 0.00 AAA 0.06 313391 FHLMC Discount Note 1,000,000.00 12052014 999,929.17 100.00 999,962.50 0.23% Aaa/AA+ 0.08 0.05%Due 1/28/2015 0.05% 999,962.50 0.05% 0.00 0.00 AAA 0.08 3133MBDO FHLB Discount Note 20,000,000.00 12/192014 19,97,777]8 99.99 19,998,500.00 4.61 % Aaa/AA+ 0.08 0.1%Due 1/28/2015 0.10% 19,998,500.00 0.10% 0.00 0.00 AAA 0.08 313396BE2 FHLMC Discount Note 18.200,000.00 10/082014 18,197,735.11 100.00 18,199,433.78 4.20% P-1/A-1+ 0.08 Due 1/29/2015 0.04% 18,199,433.78 0.04% 0.00 0.00 F-1+ 0.08 313588CJ2 FNMA Discount Note 7,100,000.00 10/092014 7,098,629.31 99.99 7,099,447J8 1.64% Asa/AA+ 0.16 Due 2/26/2016 0.06% 7,011 0.05% 0.00 0.00 AAA 0.16 313396CX9 FHLMC Discount Note 23,800,000.00 10/16/2014 23.794,727.64 99.99 23,797,491.08 5.49% Aaa/AA+ 0.19 Due 3/11/2015 0.06% 23,797.491.08 0.06% 0.00 0.00 AAA 0.19 313588EK7 FNMA Discount Note 9.800,000.00 11/172014 9,796.146.69 99.97 9,797,284.58 2.26% Aea/AA+ 0.29 Due 4/16/2015 0.10% 9,797,284.58 0,10% 0.00 0.00 AAA 0.29 3135GOZG1 FNMA Not. 5,000,000.00 lVl WD14 5,021,500.00 100.25 5,012,390.00 1.16% Asa/AA+ 4.70 1.75%Due 9/122019 1.66% 5,021,301.27 1.69% 26,493.06 (8,911.27) AAA 4.47 119,899,359.65 119,903,525.95 27.66% P-1/A-1 0.31 Total Agency 119,900,000.00 0.13% 119,912,437.22 0.14% 26,493.06 (8,911.27) F-1+ 0.30 CMO 62888UAA8 NCUA Guaranteed Note CMO 2010-R2 645,503.87 11/10/2010 645,500.93 100.28 647,288.69 0.15% Aaa/AA+ 2.85 0.S4%Due 11/6/2017 0.00% 645,500.93 0.45% 235.17 1,78]]6 NR 0.05 31398MGL4 FNMA FNA 2010-Mt Al 305,846.84 12/022010 317.507.26 101.66 310,912.28 0.07% Aaa/AA+ 4.48 3.305%Due 6/25/2019 2.44% 311,957.17 0,68% 168.47 (1,044,89) AAA 0.71 Chandler Amel Management-CONFIDENTIAL Executl.n TlmeV 13=540026 PM 33 OROrange County Sanitation District Long Term Holdings Report Account#10268 As of 12/31/14 Purchase Date Cosuvalue Md Pri.a Market Value %of Pod. Moody/S&P maturity CUSIP Security Description Par ValuelUnits Book Yield Book Value Mkt YTM Accrued Ind. Galrdl-oss Fitch Duration CMO 31398VJ98 FHLMC FHMS K006 A2 W0,000.00 11/23/2010 951.04688 109.84 988,595,10 0.23% Asa IAA+ 507 4.251%Due 1/25/2020 3.02% 928,240.65 2.09% 637.65 60,354.45 AAA 4.43 62888XAA2 NCUA Guaranteed Notes CMO 2010-131 33g110.69 11/09/2010 334,972D7 100.17 334,667.32 0.08% NRIAA- 5.83 1.6%Due 10129/2020 1AB% 334,110.69 1.48% 29.70 556.63 AAA 1.37 3133TCE95 FHLMC FSPC E3A 93,149.60 03/11/1998 93,247.03 104.72 97,543.56 0.02% Aaa/AA+ 17.64 2.893%Due 811512032 2.86% 93.199.63 2.28% 224.57 4,343.93 AAA 2.33 31396X305 FNMA FNR 2007-114 A6 200,000+00 01/10/2008 190,250.00 98.54 197,086.40 0,05% Ass IAA+ 22.84 0.369%Due 10/27/2037 0.71% 192,529.30 0.80% 8.19 4,557.10 AAA 0.80 2,532,524.17 2,576,093.35 0.59% Aaa/AA+ 6.38 Total CMO 2,478,611.00 1.78% 2,505,538.37 1.34% 1,303.75 70,554.98 Asa 2.13 COMMERCIAL PAPER 02665KNG8 American Honda Discount CP 8,000,000.00 12/22/2014 7,999,333.36 100.00 7,999,600.02 1.85% P-1/A-1 0.04 0.12%Due 1/16/2016 0.12% 7,999,600.02 0.12% 0.00 0.00 F-1 0.04 W229BNV5 Exxon Mobil Corp Discount CP 8,000,000.00 12/19/2014 ],998,906.6] 99.99 7,999,253.34 1.85% P-1/A-1+ 0.08 0.12%Due IIN12015 0.12% 7,999.253.34 0.12% 0.00 0.00 NR 0.08 69372BNV8 Paccar Financial Discount CP 4.600,000.00 12/=014 4,599.368.79 99.99 4,599,534.90 1.06% P-1/A-1 0.08 0.13%Due 112912015 0.13% 4,599,534.90 0.13% 0.00 0.00 NR 0.08 06530CNW/ Bank of Tokyo Mitsubishi NV Discount 8,000,000.00 1Z19W4 7,998,320.00 99.99 7,998,840.00 1.85% P-1/A-1 0.08 CP 0.18% 7,998,84ODO 0.18% 0.00 0.00 F-1 OD8 0.18%Due 1/30/2016 69U91,W22 PNC Bank Discount CP 7,000,000.00 lVl OI2014 6,980,419.44 99.74 6,981,971.11 1.61 % P-1/A-1 0.67 0.38%Due 9=015 0.39% 6,981,971.11 0.39% 0,00 000 F-1 0.67 35,576,30.26 35,579,199.37 8.21% P-1/A-1 0.19 Total Commercial Paper 35,600,000.00 0.19% 35,579,199.37 0.19% 0.00 0.00 F-1 0.19 MISS 31381PDA3 FNMA FN 466397 374,353.78 12/01/2010 366,252.53 106.24 397,707.47 0.09% Asa IAA+ 5.84 3.4%Due 1111/2020 3.80% W9,582.15 2.22% 247.49 28,125.32 AAA 5D2 36225CA29 GNMA Pool#G280023 32,407.29 OB/OB/1997 32,944.04 103.41 33,513.19 0.01 % Aaa/AA+ 11S8 1.625%Due 12120Y2026 1.62% 32.626.37 1.14% 43.88 886.82 AAA 6.01 W225CC20 GNMA PooI#G28068 38,975.97 08r11/1997 39.828.59 103.92 40,503.79 0.01 % Aaa/AA+ 12.48 2%Due 612012027 1.86% 39.332.41 1.30% 64.96 1,171.38 AAA 5.52 31348SM3 FHLMC PH 786064 2,845.07 02/1wmo 2,775.78 103.72 2,951.00 0.00% Asa/AA+ 13.01 2.262%Due 11112028 2.45% 2,812.73 1.67% 5.36 138.27 AAA 1.01 31371NUC7 FNMA FN 257179 53,396.41 1WOS/2011 W,471S2 100.52 57,946.00 0.01 % Aaa/AA+ 13.26 4.5%Due 4/1/2028 3.72% 55,895.55 3.14% 200.24 2,050.45 AAA 6.17 3141]YAV3 FNMA Pod#FN MA0022 56,029.12 12/OS2011 57.141.06 108.52 58,632.62 0.01 % Aaa/AA+ 14.26 4.5%Due 4/1=29 3.76% 56.591.55 1.43% 202.61 2.041.07 AAA 2.84 Chandler Amel Management-CONFIDENTIAL Executlan Time:V13=540026 PM 34 OROrange County Sanitation District Long Term Holdings Report Account#10268 As of 12/31/14 P.rrh�a.Data Cosuvalue Md Price Market Value %of Pod. Moody/S&P maturity CUSIP Security Description Par VoluelUnits Book Yield Book Value Md YTM Accrued Ind. Galall-oss Fitch Duration MBS 3138EG61`6 FNMA FN AL0869 33,406.45 12/0S/2011 35.33060 108,52 36.252.81 0.01 % Asa IAA+ 1443 4.5%Due 6/12029 3.77% 34,994.08 1.79% 29.23 1,258.73 AAA 3.19 03215PFN4 AMRESCO Residential Securities 1W9-1 133,743.20 05/20/2011 100,43238 92.56 123,796.05 0.03% NR I AA- 14A9 A 4.04% 107.077.72 2.01 % 16.61 16,718.33 BBB 9.01 0.639%Due 612512029 3837H4NX9 GNMA Pool#2000-9 62,976.58 01242000 62,776.58 100.58 63,129.70 0.01 % Aaa/AA+ 15.14 0.661%Due 2/16/2030 0.66% 62,776.58 0.39% 34.58 353.12 AAA 0.03 36225CNM4 GNMA Pool#G280395 14,025+28 OW152000 13,898.16 103.73 14,548.41 0.00% Asa/AA+ 15.31 1.625%Due 412012030 1.68% 13,960.25 1.21 % 18.99 588.16 AAA 6.10 W225CN28 GNMA Pool#G280408 116,289.62 03/152000 115,108.46 103.73 120,627.24 0.03% Aaa/AA+ 15.39 1.625%Due 512012030 1.69% 115.683.73 1.01 % 157.48 4,943.51 AAA 4.50 31403GXF4 FNMA Pool#FN 748678 8,438.32 OW102013 9.071.19 110.60 9,333.01 0.00% Asa/AA+ 18.76 5%Due 101112033 4.16% 9,025.33 1,49% 35.16 307.68 AAA 3.27 W225DCB8 GNMA Pool#G280965 117,896.29 O7/192004 117,822.62 103.88 122,470.08 0.03% Aaa/AA+ 19.56 1.625%Due 7120120M 1.63% 117,848A3 1.13% 159.65 4,621S5 AAA 5.81 94980GAG6 Wells Fargo Home Equity Trust 40,503.44 09/13/2011 40,199.66 100.63 40,758.17 0.01 % Aso I AAA 19.83 5%Due 1012512OU 5.13% 40,242.99 3.76% 33.75 516.18 AAA 0.74 31406XWT5 FNMA P.I#FN 8233M 239,913.82 01/112006 238.039.49 107.53 257,978.85 0.06% Aea/AA+ 20.10 2.247%Due 2/112035 2.30% 238.616.64 1.41 % 449.24 19,36221 AAA 1.06 31406POY8 FNMA Pod#FN 815971 574,180.68 06/102013 617,244.23 110.73 635,786.25 0.15% Asa/AA+ 20.18 5%Due 311/2035 4.21% 614,327.53 1.52% 2,392.42 21,458.72 AAA 3.14 31407BXH7 FNMA Pool#FN 8260BO 54,528.29 O6/102013 58,61 T.91 110.80 60,418.49 0.01 % Aaa/AA+ 20S1 5%Due 7/12035 4.22% 58,345.13 1.57% 227.20 2,073.36 AAA 3.21 31376KTU FNMA FN M7969 308,868.87 OW10QO13 332,034.04 110.67 341,817.46 0.08% Aaa/AA+ 20.68 5%Due 9/12035 4.22% 330.500.78 1.94% 300.29 11.316.68 AAA 3.54 83611MG61 Soundview Home Equity Loan Tr.2005- 205,569.72 09/132011 181,479.53 99.08 203,674.57 0.05% NR/A+ 20.92 OPT3 A4 1.53% 184,761.71 0.55% 18.74 18,912.86 A 0.46 0.469%Due 11/25/2035 31403DJZ3 FNMA Pool#745580 290,168.64 OW10/2013 311,931.28 110.63 320,999.35 0.07% Aaa/AA+ 21A3 5%Due 6/1/2036 4.26% 310,538.08 1.69% 1,209.04 10,461.27 AAA 3.27 3141OF4V4 FNMA P.I#FN 8883M 589,852.66 OW102013 04.091.61 110.73 653,119.67 0.15% Aaa/AA+ 21.52 5%Due]/12036 4.25% 01,269.64 1,60% 2,457.72 21.850.03 AAA 3.21 31397GREO FNMA FNR 2011-3 FA 618,770.71 12/202010 618,577.35 101.25 626,505.34 0.14% Asa/AA+ 26.17 0.849%Due 2/25/2041 0.85% 618,602S9 4.97% 87.61 7,90235 AAA US 313943Y35 FHLMC FSPC T-582A 1,216,857.52 06/09/2011 1,378,091.12 114.96 1,398,957.81 0.32% McIM+ 28.75 6.6%Due 9252043 5.40% 1,360,355.56 3.64% 1,318.26 38,602.25 AAA 5.14 5,420,160.53 5,621,427.33 1.30% Aaa/AA+ 21.66 Total MISS 5,181,797.63 3.73% 5,405,767.23 2.0% 9,710.51 215,660.10 Asa 3.51 Chandler Aural Management-CONFIDENTIAL Execution TlmeV 13=540026 PM 35 C/" Orange County Sanitation District Long Term Holdings Report Account#10268 As of 12/31/14 Purchase Data Cossuvalue Md Price Market Value %of Pod. Mosoll maturity CUSIP Security escription Par ValuetUnits Book Yield Book Value Mkt Y7M Accrued Ind. GaIrl Fitch Duration MONEY MARKET FUND Fit 261908107 Dreyfus Short-Intermediate Gov Treasury 36,737,426.57 Various 36.]3],42657 1.00 36,737426.57 847% Ass I AAA 000 Cash Management Fd521 0.01% 36,737,426.57 0.01 % 0.00 000 AAA 000 36,737,426.57 36,737,426.57 8.47% Aso I AAA 0.00 Total Money Market Fund Fit 36,737,426.57 0.01% 36,737,426.57 0.01% 0.00 0.00 Asa 0.00 MUNICIPAL BONDS 73358WA09 Port Authority of NY B NJ TE-REV 2,440,000.00 Various 2,507,633.89 114.02 2,782,161.20 0.64% Aa3/AA. 4.92 5.309%Due 121112019 4.97% 2,471,919.07 2.28% 10,794.97 310,242.13 AA- 4.37 6491 New York NY TE-REV 1,400,000.00 101 1,400,000.00 107.98 1,511,776.00 0.35% Aal IAAA 5.84 4.075%Due 1111/2020 4.08% 1,600.000.00 2.59% 9,508,33 111,776.00 AAA 5.18 913366EJ5 Univ of California Rgls Mad TE-REV 400,000.00 11/092010 400,000.00 113.96 455,836,00 0.11 % Aa3/AA- 6.38 5.035%Due 5/15/2021 5.04% 400,000.00 2.64% 2,573.44 55,836.00 NR 5.49 452252FJ3 Illinois ST Toll Hwy Authority TE-REV 2,500,000.00 06/29/2009 2,464,750.00 100.16 2,704,075.00 0.64% Aa3/AA- 9.01 5.293%Due 11112024 5A3% 2.478,121.84 4.20% 66,162.50 225,953.16 AA- 4.11 8628311-1T6 Texas Transportation Comm.TE-REV 1,200,000.00 07=010 1,200,000.00 117.26 1,407,166.00 0.33% Ann I AAA 11.26 5.028%Due 41112026 5.03% 1,200.000.00 3.19% 15,084.00 207.156.00 NR 7.92 U966HYKO New York NY TE-GO 1.300,000.00 04262011 1,373.502.00 122.78 1.596,192.00 0.37% Ae2/AA 12.17 5.698%Due 31112027 5.17% 1,356,438.36 3.40% 24,691.33 239,753.64 AA 9.00 072024NTS Bay Area Toll Authority TE-REV 1,300,000.00 06242010 1,300,000.00 127.69 1,659,983.00 0.39% Al/A+ 15.26 6.793%Due 411/2030 6.79% 1,300,000.00 4.30% 22,077.25 359,983.00 NR T.83 576898CSB Mass ST Port Auth Rev TE-REV 1,300,000.00 06/092011 1,300,000.00 117.40 1,526,252.00 0.36% A3/A 16.51 6.202%Due 71112031 6.20% 1,W0,000.00 4.68% 40,313.00 226,252.00 A- 9.10 1301 Coforms ST TEGO 1.500,000.00 01272011 1,509.825.00 148.12 2,221,800.00 0.52% Aa3/A. 24.85 7.35%Due 11/112039 7.29% 1,50$486.93 4.21 % 18,375.00 713,313+07 A 13.03 59259YGFO Met Transport Auth NY TE-REV 300,000+00 01/11/2011 311,316.00 138.30 414,912.00 0.10% A2/AA- 25.89 6.814%Due 1111512NO 6,53% 309,81246 4,34% 2,612,03 105,099,54 A 1298 13,707,026.89 16,280,143,20 3.80% Aa3l AA- 12,39 Total Municipal Bonds 13,640,000.00 5,57% 13,724,778.66 3.5B% 212,191.85 2,555,364.54 AA- 7.39 US CORPORATE 11 61747YCE3 Morgan Stanley Note 700,000.00 Various 737,361.00 101.62 711,328.80 0.17% Baal/A- 0.32 6%Due 4/28/2015 3.79% 704,703.07 0.99% 7,350.00 6,625.73 A 0.32 949851-1517T Wells Fargo Bank Note 6.300,000.00 07/22/2013 6,297,795.00 100.24 6,315,157.80 1.46% Aa3/AA- 0.55 0 75%Due 7/20/2015 0.77% 6,299,388.35 0.31 % 21,131.25 15,769+45 AA- 0.55 001055AE2 AOac Inc Note 500,000.00 08/04/2010 499,630.00 101.72 508,614.00 0.12% A3/A 0.62 3A5%Due 8/152015 3.47% 499,954.36 0.67% 6,516.67 8,659.64 A. 0.61 M2687CGO Southern Cc Note 1,000,000.00 09/132010 999,810.00 101.09 1,010,888.00 0.23% Baal/A. 071 2.375%Due 911512015 2.38% S99,9T3.23 0.82% 6,993.06 10,914.77 A 0.70 172967GGO Citignoup Inc Note 200,000.00 08/202013 198.352.00 100.10 200,202.80 0.05% Beat/A- 1.04 1.25%Due IIIW2016 1.60% 199,286.18 1,15% 1,152.78 916.62 A 1.02 Chandler Asset Management-CONFIDENTIAL Executlan Time:V13=5400:26 PM 36 OROrange County Sanitation District Long Term Holdings Report Account#10268 As of 12/31/14 P.rch.a.Data Cosuvalue Md Price Market Value %of Pod. Moodi Maturity CUSIP Security Description Par ValuelUnits Book Yield Book Value Mkt N7M Accrued Ind. Galrl Fitch Duration US CORPORATE AL 46625HHX1 JP Morgan Chase Note 500,000.00 Various 506.32600 102.64 513,201,50 0.12% A3IA 117 3.45%Due 311/2016 3.13% 51 1.16% 5,750.00 11,494.93 A+ 1.14 38141GEG5 Goldman Sachs Group Inc Note 2,000,000.00 Ot/04/2011 1,B95,068.00 99.7B 1,995,540.00 o. % Baal/A- 1.22 0.697%Due 312212016 1.74% 1.975.381.55 0.88% 387.28 20,158.45 A 0.22 89236TWI Toyota Motor Credit Corp Note 6,200,000.00 05/142013 5,200.000.00 100.19 5,209,963.20 1.20% Aa3/AA- 1.38 0.522%Due 511712016 0.52% 5,200.000.00 0.38% 3,165.89 9.963.20 A 0.13 466251-JA9 JP Morgan Chase Note 300,000.00 11/082011 299,658.00 102.79 308,381.10 0.07% A3/A 1.51 3.15%Due 71WO16 3.18% 299,888.82 1.28% 4,620.00 8,492+28 A+ 1.46 06050TLXB Bank cfAmedca Note 600,000.00 05/01/2014 W0,000.00 99.83 599,006.40 0.14% A2/A 2.35 0.653%Due 5IW2017 0.65% 600,000.00 0.72% 576.46 (993.60) NR 0AO 94988J210 Wells Fargo Bank Callable Note ally 500,000.00 06/052014 500,000.00 100.02 500,098.00 0.12% Aa3/AA- 2.46 W152016 0.50% 500.000.00 0.49% 111.69 98.00 AA- 0.21 0.503%Due 6/1512017 48121CTK6 JP Morgan Chase Bank Note 1,100,000+00 09/112012 1,302,565.00 110.99 1,220,872.40 0.2B% A2/A 2.75 6%Due 10/12017 2.13% 1,210,350A1 1.88% 16,500.00 10,522.29 A 2S3 060505DK Bank of America Corp Note 3,800,000.00 01/15/2014 4,334,014.00 110.49 4,198,608.60 0.97% Baal/A- 2S2 5.75%Due 121112017 1.95% 4,203,351.00 2.03% 18,208.33 (4,742.40) A 2.70 161 Chevron Corp.Callable Note Coat 4,000,000.00 12/062D14 3,977.200.00 99.38 3,975,272.00 0.92% And!/AA 2.93 1115/17 1.30% 3,977.680.22 1.32% 3,189.33 (2,408.22) NR 2.79 1.104%Due 12/512017 38141GFG4 Goldman Sachs Group Inc Note 600,000.00 Various 692,806.00 111.10 666,580.80 0.16% Baal/A- 3.05 5.95%Due 1/18/2018 2.72% 654,657.09 2.17% 16,164.17 11,923.71 A 2.75 025816AV5 American Express Credit Note 2,900,000.00 Various 3.377,385]9 115.70 3,365,163.70 0.79% A3I BBB+ 3.22 7%Due 3/19/2018 4.28% 3,116.157.56 1.94% 57,516.67 239,006.14 A+ 2.88 718172AA7 Philip Morris Ind Inc Note 1.600,000.00 08/232010 1,854.144.00 112.66 1,802,603.20 0.42% A2/A 3.38 565%Due W1612018 3.30% 1,710,940.16 1.77% 11,300.00 91,663.04 A 3.09 073902CD8 Bear Stearns Note 3,200,000.00 01/152014 3,523,520.00 108.36 3,467,580.80 0.80% A3I NR 3.50 4.65%Due 702018 2.26% 3,454,749.57 2.16% 11,986.67 12,83L23 A+ 3.24 59018WN9 Merrill Lynch&Cc Inc Debenture 2,800,000.00 Various 3.417,664.00 116.26 3,255,254.80 0.76% Baa2/A. 3.88 6,875%Due 1111 W2018 2.87% 3,196.413.11 2.45% 24,597.23 58,841.69 A 3.43 532457BF4 Eli Lilly&Co Note 4,000,000.00 Various 4,009,675.00 101 4,021,488.00 0.93% A2/AA- 4.21 1.95%Due 31IW2019 1.89% 4,009,536.93 1,82% 22,966.67 11,951.07 A 4.00 46625HHL7 JP Morgan Chase Note 100,000+00 11/102011 112,124.00 116.16 116,157.50 0.03% A3/A 4.31 6.3%Due 4/23/2019 4.37% 107,024.33 2.34% 1,190.00 9,133A7 A+ 3.80 24422ESS9 John Deere Capital Corp Note 1,200,000.00 1204/2014 1,204,956.00 100.59 1,207,119.60 0.28% A2/A 4.71 2.3%Due 9/162019 2.21% 1,204,890.56 2.17% 8,126.67 2,229.04 NR 4.41 031162BD1 Amgen Inc Note 1,300,000.00 Various 1,318.052.00 103.90 1,350,691 0.32% Baal IA 5.76 3A5%Due 101112020 3.23% 1,314.104.71 2.71 % 14,950.00 36.590.09 BBB 5.15 828807CF2 Simon Preperiy,Group Callable Note 1,000,000.00 01 996,050.00 109.81 1,098,053.00 0.26% A2/A 6.17 Cant 1211/2020 4.42% 997,690.53 2.58% 18,229.17 100,362.47 A 5.16 4.375%Due 311/2021 Chandler Asam MaregemeM-CONFIDENTIAL Executlan rim, IIIMD154:00:26 PM 37 OROrange County Sanitation District Long Term Holdings Report Account#10268 As of 12/31/14 P.rch�..Data Cosuvalue Md Price Market Value %of Pod. Moody/S&P Maturity CUSIP Security Description Par ValuelUnits Book Yicld Book Value Mkt YTIA Accrued Int. Galall-ose Fitch Duration US CORPORATE JE 6174NAL3 Morgan Stanley Note 2,800,000.00 06/06/2014 3.200.84800 113.49 3,177,666.80 075% Baal/A- 6.58 5.5%Due 7/28/2021 3.24% 3,169,445.16 3.21 % 65,450.00 8,22164 A 5.48 51,00,003.79 50,785,497.60 11.79% A2/A 2.92 Total US Corporate 48,200,000.00 2.09% 0,107,273.17 CH% 348,129.99 878,224.43 A 2.45 US TREASURY 912828TXB US Treasury Note 7,500,000.00 12/15/2014 7,510,572.00 100.09 7,507,035.00 1.73% Aaa/AA+ 0.87 0.375%Due 11/15/2015 0.22% 7.510.065.56 0.27% 3,661.69 (3,030.66) AAA 0.87 912828UC2 US Treasury Note 10,000,000.00 12/19/2014 9,997,299.13 100.01 10,000,780.00 2.31 % Aea/AA+ 0.96 0.25%Due 1211512015 0.28% 9,997,374.57 0.24% 1,167.58 3.405.43 AAA 0.95 912828D31 US Treasury Note 3,500,000.00 OS1WO14 3,500,340.41 100.00 3,499,835.50 0.81 % Asa/AA- 1.33 0.089%Due 413012016 0.08% 3,500,235.52 0.09% 529.12 (400.02) AAA 0.08 912828D64 US Treasury Note 19,600,000.00 09/08/2014 19,596,171.88 99.96 19,592,336.40 4.53% McIAA+ 1.67 0.6%Due 8/31/2016 0.51% 19.596,776.32 0.52% 33,298.34 (4,439.92) AAA 1.65 912828G46 US Treasury Note 15,000,000.00 Various 14,965,870.56 99.75 14,962,600.00 3.45% Aaa/AA+ 1.92 0.5%Due 1113012016 0.62% 14,966.612.94 0.63% 6,593.40 (4,112.94) AAA 1.90 912828,320 US Treasury Note 12.500,000.00 Various 12,435.979.37 99.52 12.440,425.00 2.87% Ass/AA+ 2.88 0.875%Due 11/15/2017 1.05% 12,436,909.83 1.04% 14,200.62 3,515.17 AAA 2.83 912828WS5 US Treasury Note 52,900,000.00 Various 52,816,985.09 100.25 0,032,250.00 12.23% Aaa/AA+ 4.50 1.625%Due 61W/2019 1.66% 52,824,383S2 1.57% 2,374.65 207,866.08 AAA 4.32 91282BM6 US Treasury Note 17,400,000.00 Various 17,443,112.67 100.16 17,427,178.80 4.05% Aaa/AA+ 4.58 1.625%Due 713112019 1.57% 17,439,795.88 1.59% 118,324.73 (12,617.08) AAA 4.37 912828F39 US Treasury Note 5.800,000.00 10/27/2014 5,873.186.87 100.59 5,833,982.20 1.35% Aea/AA+ 4.75 1.75%Due 913012019 1.48% 5,870,541.07 1.62% 25,932.69 (36,558.87) AAA 4.52 91282BG61 US Treasury Note 7,500,000.00 12/19/2014 7,449,634.50 99.37 7,452,540.00 1.72% Asa/AA+ 4.92 1.5%Due 11/30W9 1.64% 7,449,913.69 1.63% 9,890.11 2,626.31 AAA 4.71 912828TED US Treasury Inflation Index Note 3,304,224.00 Various 3.311,666.82 97.43 3,219,305.44 0.74% Aaa/AA+ 7.54 0.125%Due 711512022 0.10% 3,311.557.56 0.47% 1,908.00 (92,252.12) AAA 7.80 912828WUO US Treasury Inflation Index Note 10.400,312.00 Various 10,283.308.41 96.31 10,016,020.48 2.31 % Aea/AA+ 9.55 0.125%Due 7n5/2024 0.24% 10.288,262.64 0,52% 6,005.62 (272,242,16) AAA 9.81 165,184,127.71 164,984,188.82 38.11% Aaa/AA+ 3.76 Total US Treasury 165,404,536.00 1.06% 165,192,429.50 1A7% 223,876.45 1208,240,68) Ana 3.65 430,400,900.19 432,707,878.53 100.00% Aa1 I AA- 2.67 TOTAL PORTFOLIO 427,371,498.37 0.95% 429,393,914.40 0.82% 825,647A2 3,313,964.13 As. 2.12 TOTAL MARKET VALUE PLUS ACCRUED 433,533,525.95 Chandler Asset Management-CONFIDENTIAL Execution Time:V13=540026 PM 38 C/" Orange County Sanitation District Liquid Holdings Report Account#10282 As of 12/31/14 I'Lirchase Date cosuvalue Md Price Market Value %of Pod. Moodi maturity CUSIP Security Description Par ValuelUnits Book Yield Book Value Mkt YTM Accrued Ind. call Fitch Duration AGENCY Ir 313396AM5 FHLMC Discount Note 900,000.00 10/15/2014 899.91860 100.00 899,989.83 1,58% P-1/A-1+ 003 Due 111212015 0.04% 899,989.83 0.04% 0.00 0.00 F-1+ 0.03 3135MW FNMA Discount Note 200,000.00 0929W,I 199,984.31 100.00 199,997.36 0.35% Aaa/AA+ OD5 Due 1/20/2015 0.03% 199,997.36 0.03% 0.00 0.00 AAA 0.05 313384AY5 FHLB Discount Note 700,000.00 10242014 699,884.99 100.00 699,972.20 1.23% Aaa/AA+ 0.06 Due 1/23/2015 0.07% 899.972.20 0.07% 0.00 0.00 AAA 0.06 313396AY9 FHLMC Discount Note 2,000,000.00 12/052014 1,999,836.67 100.00 1,999,926.67 3.51 % Ass/AA- 0.06 0.06%Due 112312015 0.06% 1,999,926.67 0.06% 0.00 0.00 AAA 0.06 313396BD4 FHLMC Discount Note 4,000,000.00 1205/2014 3,999,]16.6] 100.00 3,999,850.00 7.03% Aaa/AA+ 0.08 0.05%Due 112812015 0.05% 3,999,850D0 0.05% 0.00 0.00 AAA 0.08 3133MBDO FHLB Discount Note 2,500,000.00 12/12/2014 2,499,738.89 99.99 2,499,850.00 4.39% Aaa/AA+ 0.08 ODG%Due 1/28/2015 0.08% 2,499.850.00 0.08% 0.00 0.00 AAA 0.08 313384BN8 FHLB Discount Nate 4.200,000.00 11/172014 4,199.269.10 99.99 4,199,674.00 7.38% Ass/AA+ 0.10 Due 21612015 0.08% 4,199,674.00 0.08% 0.00 0.00 AAA 0.10 3135GOHGI FNMA Note 2,000,000.00 1V19/2014 2,001,040.00 100.04 2,000,880.00 3.52% Me/AA+ 0.21 0.375%Due 3/16/2015 0.16% 2,000,916.19 0.16% 2,187.50 (36.19) AAA 0.21 313396DU4 FHLMC Discount Note 900,000.00 10/21/2014 899,718.26 99.98 899,842.50 1.58% Aaa/AA+ 0.25 Due 4/112015 0.07% 899.842.50 0.07% 0.00 0.00 AAA 0.25 3137EADD8 FHLMC Note 2.000,000.00 12/192014 2,002.184.00 100.10 2,001,900.00 3.52% Aee/AA+ 0.29 0.5%Due 4/172015 0.16% 2,001,895.72 0.18% 2,055.56 (95.72) AAA 0.29 3135GOKM4 FNMA Not. 2,000,000+00 1V192014 2,002,740.00 100.11 2,002,238.00 3.52% Asa/AA+ 0.40 0.5%Due 5/212015 0.18% 2,002,564.36 0.22% 944.44 (326.36) AAA OAl 3133EARG3 FFCB Note 2,000,000.00 1V19/2014 2,003,400.00 100.13 2,002,580.00 3.52% Aaa/AA+ OA8 0.6%Due 6232015 0.16% 2,003,214.21 0.23% 222.22 (634.21) AAA 0.48 3135GOLN1 FNMA Note 2,000,000.00 12/192014 2,003,408.00 100.09 2,001,860.00 3.53% Anal 0.50 0.5%Due 722015 0.18% 2,003,230.50 0.31 % 4,972.22 (1,370,50) AAA 0.50 313370JB5 FHLB Note 1,500,000.00 12 6/2014 1,515,240.00 101.02 1,515,324.00 2.68% Asa/AA+ 0.70 1.75%Due 9/112015 0.30% 1,515,061A1 0.28% 8,020.83 262.59 AAA 0.69 313981 FNMA Callable Note 1X 3/21/2011 2,000,000.00 1224/2014 2,025,660DO 101.25 2,026,068.00 3.50% Me/AA+ 072 2%Due 9/21/2016 0.25% 2,025,087.66 0.26% 11,111.11 (19.66) AAA 072 31331J2S1 FFCB Note 2,000,000.00 12262014 2,021.180.00 101.05 2,020,994.00 3.56% Aaa/AA+ 0.88 1.5%Due 1111612015 0.29% 2,020.982.67 0.30% 3750.00 11.33 AAA 0.87 3133BOL96 FHLB Note 2.000,000.00 12242014 2,003,320.00 100.15 2,002.946.00 3.52% Asa/AA- 0.89 0.5%Due 11/2012015 0.32% 2,003,259.45 0.33% 1,138.89 (313.45) AAA 0.88 32,976,239.48 32,972,892.56 51.99% P-1/A-1 0.34 Total Agency 32,900,000.00 0.15% 32,975,414.73 0.17% 34,402.77 (2,522.17) F-1+ 0.34 COMMERCIAL PAPER 69372BNMB Paccar Financial Discount CP 1,000,000,00 12/12/2014 999,88889 99,99 999,944.45 176% P-1IA-1 0.06 0.1%Due 1/21/2015 0.10% 999,944.45 0.10% 0.00 0.00 NR 0.06 Chandler Asset Management-CONFIDENTIAL Execution Time:IIIMD154:00:0 PM 39 C/" Orange County Sanitation District Liquid Holdings Report Account#10282 As of 12/31/14 Purchase Date costvalue Md Price Market Value %of Pod. Moodl Maturity CUSIP Security Description Par Valuei Book Yicld Book Value Mkt YTM Accrued Ind. Gairl Fitch Duration COMMERCIAL PAPER 061 Bank of Tokyo Mitsubishi NY Discount 1,000,000,00 12/04/2014 999.72000 99.99 999.855.00 176% P-1 IA-1 008 CP 0.18% 999,855.00 0.18% 0.00 0.00 F-1 0.08 0.18%Due 1/30/2015 693491(VJ22 PNC Bank Discount CP 500,000.00 12/10/2014 498,601.39 99.74 498,712.22 0.88% P-1/A-1 0.67 0.38%Due 9IM015 0.39% 498,712.22 0.39% 0.00 0.00 F-1 0.67 2,498,210.28 2,490,511.67 4.39% P-1/A-1 0.19 Total Commercial Paper 2,500,000.00 0.19% 2,498,511.67 0.19% 0.00 0.00 F-1 0.19 MONEY MARKET FUND FI 261908107 Dreyfus Short-Intermediate Gov Treasury 4,508,424,35 Various 4,508,424.35 1.00 4,508,424.35 7.92% Abe I AAA 0.00 Cash Management Fd521 0.01% 4,508,424.35 0.01 % 0.00 0.00 AAA 0.00 4,508,424.35 4,508,424.35 7.92% McIAAA 0.00 Total Money Market Fund FI 4,508,424.35 0.01% 4,508,424.35 0.01 % 0.00 0.00 Abe 0.00 US CORPORATE 03523TAMO Anheuser-Busch Note 619,000,00 05/09/2014 634,53690 100,09 619,577,53 1.10% A2/A 004 4.125%Due 111512015 0.37% 619,684.21 1.60% 5,390.46 (306.68) A 0.04 225411AR4 Credit Suisse Note 653,000.00 Various 672,464.66 100.17 654,100.30 1.17% Al/A 0.04 4.875%Due 1/15/2015 OAO% 654,109.91 0.53% 14,678.89 (9.61) A 0.04 71343PAA9 PepsiAmericas Inc Note 619,000.00 Various 638.001.34 100.11 619710.00 1.11 % ALA 0.04 4.875%Due 111512015 0.28% 620,081.94 1.88% 13,914.60 (371.94) A 0.04 172967FM CNgroup Inc Note 599,000.00 05/13/2014 620,719.74 100.14 599,852.38 1.06% Baal/A- 0.04 6.01%Due l/15/2015 0.53% WO,246.22 2.20% 1,600.00 (393.81 A 0.04 92976GAD3 Wachovia Bank Note 624,000.00 Various 61 100.31 626,935.65 1.12% Al/A+ 0.09 4.875%Due 21112015 OAO% 626.345.18 1.13% 12,675.00 (409.53) A+ 0.08 06401 Bank of New York Callable Note Cont 645,000.00 05/09,2014 649,160.25 100.03 645,210.27 1.14% Al/A+ 0.14 1/a0/15 0.25% 645,314.92 0.55% 2,816.50 (104.65) AA- 0.06 1.2%Due 2/20/2015 91324PAW United Health Group Inc Note 604,000.00 Various 626,967.92 100.85 609,159.97 1.09% A3/A+ 0.20 4.875%Due 311512015 0.31% 69,507A2 070% 8,669.92 (347.15) A- 0.21 46623EJP5 JP Morgan Chase Note 633,000.00 O5r13/2014 61 100.30 634,886.97 1.12% A3/A 0.22 1.875%Due 312012015 0.51% 04.846.72 0.51 % 3,329.84 40.25 A+ 0.22 74005PAR5 Prerair Note 387,000.00 05/09/2014 401,539.59 101.01 390,910.25 0.69% A2/A 0.24 4.625%Due 313012015 0.33% 390,%8.39 0.57% 4,524.41 (88.14) NR 0.25 45920OHD6 IBM Corp Note 1,000,000.00 1l/22/2014 1,001,880.00 100.10 1,001,751.00 1.76% Aa3/AA- 0.36 0.75%Due 5/11/2015 0.25% 1p01,797.06 0.26% 1,041.67 (46.06) A+ 0.36 14912L5D9 Caterpillar Finance Sew Corp Note 1,000,000.00 12/22/2014 1,003,340.00 100.32 1,003,170.00 176% A2/A 0.41 1.1%Due 5/29/2015 0.31% 1,003,209.87 0.33% 977.78 (39.87) A 0.41 149123BY6 Caterpillar Inc.Note 1.000,000.00 1MM014 1,003,280.00 100.32 1,003,179.00 176% A2/A 0.48 0.95%Do.612612015 0.29% 1,003,171.87 0.30% 131.94 7.13 A 0.49 Chandler Asset Management-CONFIDENTIAL Executlio Tima:V13201540055PM 40 C/" Orange County Sanitation District Liquid Holdings Report Account#10282 As of 12/31/14 P.r0.a.Data cosuvalue Md Price Market Value %of Pod. Moody/S&P Maturity CUSIP Security Description Par ValuelUnits Book Yield Book Value Md YTM Accrued Ind. Galall-oss Fitch Duration US CORPORATE 36962G5Z3 General Electric Capital Corp Notes 1,000,000.00 12/22/2014 1,005,820.00 100.63 1,006,284.00 1.78% Al/AA+ 0.50 1.625%Due]/212015 0.50% 1,005,634.26 0.37% 8,079.86 649.74 NR 0.50 24422ERV3 John Deere Capital Corp Note 1,008,000.00 lW2W2014 1,009,340.64 100.28 1,010,820.38 1.78% A2/A 0.68 0.7%Due 9/4/2015 0.51% 1,009,308.72 0.28% 2,293.20 1,511.66 NR 0.67 10,50,978.65 10,424,547]0 18A5% A2/A+ 0.29 Total US Corporate 10,391,000.00 0.37% 10,424,456.39 0.71% 80,12A.07 91.31 A 0.29 US TREASURY 912796EPO US Treasury Bill 2,500,000.00 10/30/2014 2,499,978.89 100.00 2,499,996.11 4.39% Aaa/AA+ 0.04 Due 1/15/2015 o00% 2,499,996.11 0.00% 0.00 pop AAA 0.04 912828SE1 US Treasury Note 3,900,000.00 11/12/2014 3,902,021.96 100.02 3,900,760.50 6.85% Aaa/AA+ 0.13 0,25%Due 2/15/2015 0.05% 3,900,967.96 0.09% 3,682.74 (207.46) AAA 0.12 6,402,000.85 6,400,756.61 11.25% Aaa/AA+ 0.09 Total US Treasury 6,400,000.00 0.03% 6,400,964.07 0.06% 3,682.74 (207.46) Aso 0.09 56,935,853.61 56,805,132.89 100.00% P-2/A-1 0.27 TOTAL PORTFOLIO 56,699,62A.35 0.17% 56,807,771.21 0.24% 118,209.56 (2,638.32) F-1+ 0.27 TOTAL MARKET VALUE PLUS ACCRUED 56,923,342A7 Chandler Aural Management-CONFIDENTIAL Executlor TlmeV 13=560055 PM 41 C/" OCSD Lehman Exposure Holdings Report Account#10284 As of 12/31/14 Purchase Date costvalue Md Price Market Value %of Pod. Moody/S&P Maturity CUSIP Security Description Par ValuelUnits Book Yield Book Value Mkt Y7M Accrued Ind. Gairml-oss Fitch Duration COMMON STOCK SLHOPNTA4 Lehman Brothers,Inc Open Position 10481250 11/21/2014 104.81250 042 4428328 12.02% NRINR 000 Long Exposure 0.00% 104,812.50 0.00% 0.00 (60,529.22) MR 0.00 Due 12131/2014 104,812.50 44,283.28 12.02% NRINR 0.00 Total Common Stock 104,812.50 NIA 104,812.50 0.00% 0.00 (60,529.22) MR 0.00 US CORPORATE or 525ESCI67 Lehman Brothers Note-Defaulted 600000.00 09/19/2008 406,604.83 12.75 76,500.00 20.77% NRINR 0.07 Due 112412015 0,00% 406,60483 000% 0,00 (330,104.83) NR 0.00 525ESCOV6 Lehman Brothers Note-Defaulted 2000,000,00 09/18/2008 1,366718.96 12,38 247,500,00 67.20% NRINR 34.83 Due 10=049 0.00% 1,366,718.96 0.00% 0.00 (1,119,218.96) MR 0.00 i,T23,323.79 324,000.00 87.98% NRINR 26.62 Total US Corporate 2,600,000.00 NIA 1,113,323.79 0.00% 0.00 (1,M9,323.79) MR 0.00 1,878,136.29 368,283.28 100.00% MR 1 MR 23.42 TOTAL PORTFOLIO 2,704,812.50 NIA 1,878,136.29 0.00%. 0.00 (1,509,853.01) MR 0.00 TOTAL MARKET VALUE PLUS ACCRUED 368,283.28 Chandler Aaeel Management-CONFIDENTIAL Execution Time:V13=56016 PM 42 Rating Agency Comparisons A summary of investment grade ratings are listed below. More complete descriptions of Moody's and Standard & Poor's ratings are included in the following pages. Quality/Grade Moody's Standard & Poor's Fitch Best Quality Aaa AAA AAA High Quality Aal AA+ AA+ Aa2 AA AA Aa3 AA- AA- Upper Medium Grade Al A+ A+ A2 A A A3 A- A- Medium Grade Baal BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB1 Moody's - Investment Grade "Aaa" - Bonds rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. "Aa" - Bonds which are rated As are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. "A" - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Mae" - Bonds which are rated Baa are considered as medium grade obligations; i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Bonds in the Aa, A, and Bee are also assigned "1", "2", or "S' based on the strength of the issue within each category. Accordingly, "At" would be the strongest group of A securities and "AY would be the weakest A securities. Be, B, Caa, Ca, and C - Bonds that possess one of these ratings provide questionable protection of interest and principal ("Be" indicates some speculative elements; "B" indicates a general lack of characteristics of desirable investment; "Caa" represents a poor standing; "Ca" represents obligations which are speculative in a high degree; and "C" represents the lowest rated class of bonds). "Caa", "Ca" and "C" bonds may be in default. Standard and Poor's-investment Grade AAA - Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay interest and repay principal Is extremely strong. AA - Debt rated "AA" has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in small degree. A - Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB - Debt rated "BBB" is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. Standard and Poor's - Speculative Grade Retina Debt rated "BB", "B", "CCC", "CC" and "C" is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. "BB" indicates the least degree of speculation and "C" the highest. While such debt will likely have some quality and protective characteristics these are outweighed by major uncertainties or major exposures to adverse conditions. BB - Debt rated "BB" has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The "BB" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BBB" rating. B - Debt rated "B" has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The "B" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BB" or "BB" rating. CCC - Debt rated "CCC" has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The "CCC" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "B" or"B" rating. CC - The rating "CC" typically is applied to debt subordinated to senior debt that is assigned an actual or implied "CCC" debt rating. C - The rating "C" typically is applied to debt subordinated to senior debt which is assigned an actual or implied "CCC" debt rating. The "C" rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued. Cl -The rating "Cl" is reserved for income bonds on which no interest is being paid. D - Debt rated "D" is in payment default. The "D" rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized. Plus (+) or Minus (-) - The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. NR - Indicates no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular type of obligation as a matter of policy. FY 2014-15 Second Quarter Report This Page Intentionally Left Blank a ab January 30, 2015 STAFF REPORT Certificates of Participation (COP) Quarterly Report for the Period Ended December 31, 2014 Summary The District began issuing Certificates of Participation (COPs) in 1990. These COPS were a part of our long-term financing plan that included both variable interest rate and traditional fixed rate borrowing. Following are the current outstanding debt issues of the District: In May 2007, the District issued $95.18 million of fixed rate COPS, Series 2007A refunding a portion of the Series 2003 fixed rate debt. The true interest cost for the issue is 4.5 percent. In December 2007, the District issued $300 million of fixed rate COPS, Series 2007B at a true interest cost of 4.71 percent for the issue. In September 2008, the District issued $27.8 million of fixed rate COPS, Series 2008E refunding the Series 1993 variable rate debt. The true interest cost for the issue is 2.96 percent. In May 2009, the District issued $200 million of fixed rate COPS, Series 2009A at a true interest cost of 4.72 percent for the issue. In May 2010, the District issued $80.0 million of fixed rate BABs, Series 2010A at a true interest cost of 3.68 percent for the issue. In December 2010, the District issued $157.0 million of fixed rate BABs, Series 2010C at a true interest cost of 4.11 percent for the issue. In October 2011, the District issued $147.595 million of fixed rate COPs, Series 2011A refunding a portion of the Series 2000 variable rate debt and a portion of the Series 2003 fixed rate debt. The true interest cost for the issue is 2.61 percent. O SD 6 P.O.8=8127 • Foum in Valley.C SM"127 • (714)M.2411 Quarterly COP Report For the Three Months Ended December 31, 2014 Page 2 of 2 In March 2012, the District issued $100.645 million of fixed rate COPs, Series 2012A refunding the Series 2003 fixed rate debt. The true interest cost for the issue is 3.54 percent. In August 2012, the District issued $66.395 million of fixed rate COPs, Series 2012E refunding the Series 2000 variable rate debt. The true interest cost for the issue is 1.50 percent. With the issuance of Series 2012B, there remains no variable interest rate COPs at the District. In October 2013, the District issued $129.625 million of fixed rate CANS, Series 2013A paying the Series 2012C fixed rate debt. The true interest cost for the issue is 0.17 percent. In August 2014, the District issued $85.090 million of fixed rate COPS, Series 2014A, refunding a portion of Series 2007B debt. The true interest cost for the issue is 2.34 percent. In October 2014, the District issued $120.850 million of fixed rate COPs, Series 2014B, paying the Series 2013A debt. The true interest cost for the issue is 0.41 percent. Additional Information The graph entitled, "OCSD COP Rate History Report,' shows the various fixed interest rates of the District's eleven debt issues. Attachments 1. Graph - OCSD COP Rate History Report Prepared 0y Finance,121M014,2:24 PM OCSD COP RATE HISTORY REPORT DECEMBER 2014 6.00 5.00 4.00 �¢ 3.00 2.00 1.00 0.00 S 7 S S F s T, gf, � g •r $ d • 5 A DATE - —FSMrs2WBB Fua'1 -�8e0�2(HPA Fka] y—Sxiec20128 Feretl �aans R011AFi� �SMes2W]AFIxeG —Sefin200]a Fbet ��3MaRS0iA F6etl —Banes 2010AFi�mtl �SMea2010CF — Selea NllQFl —rSe�In A1/A F¢M G^excel.dta10n122201gegg0Finarme RATEHIST.g] FY 2014-15 Second Quarter Report This Page Intentionally Left Blank ORANGE COUNTY SANITATION DISTRICT FINANCIAL MANAGEMENT DIVISION 10844 Ellis Avenue Fountain Valley, California 92708-7018 714.962.2411 www.oGsewers.com 12/31/14 ADMINISTRATION COMMITTEE MeetlngDale TOBd 011Di,. OVJJ115 ozRS/1S AGENDA REPORT Item Number Item Number 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance &Administrative Services SUBJECT: CONSIDERATION OF BUDGET ASSUMPTIONS AND BUDGET CALENDAR FOR PREPARATION OF THE FY 2015-16 BUDGET UPDATE. GENERAL MANAGER'S RECOMMENDATION Approve the FY 2015-16 budget assumptions and direct staff to incorporate these parameters in preparing the FY 2015-16 budget update. SUMMARY For the budget update process, the Administration Committee establishes the Budget Assumptions and approves the Budget Calendar. Staff will make a brief presentation at the Committee meeting. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Currently, there are no proposed changes to the District Fiscal Policy. The Fiscal Policy is published in the FY 2014-15 and 2015-16 Budget document (Section 3, Pages 1-8), and is available on the Sanitation District's website. BUDGET / PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENTS The following attachment(s) are attached in hard copy and may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Preliminary Budget Assumptions Highlights (Pages 2-6) • Budget Update Calendar (Pages 7-10) JH:LT:MW:te Page 1 of 10 FY 2015-16 Preliminary Budget Assumptions Economic Assumptions • Inflation for Orange County in FY 2015-16 is projected to be 2.4 percent based on the 2015 projected percentage change in consumer price index obtained from the December 2014 Economic and Business Review report prepared by Chapman University. This approximates the 2.3 percent inflation factor that was used in the FY 2015-16 budget. Revenue Assumptions • Based upon the five-year Sewer Service Fee Rate Schedule approved by the Board in March 2013, the single-family residence (SFR) rate will increase by 2.2 percent ($7) to $323 in FY 2015-16. • Each $1 increase in the SFR rate generates approximately $900,000 per year. • The capital facilities capacity charge (CFCC) fee captures only those infrastructure costs that relate to additional capacity. Other infrastructure costs such as improved treatment, rehabilitation, refurbishment, and replacement, will be supported through userfees. • Given the Facilities Master Plan adopted in December 2009, a rate study was completed in January 2013 to ensure that the CFCC fee methodology remains equitable and to confirm that an appropriate share of system costs would be recovered from new development. • Revenues will be budgeted to reflect little growth in Equivalent Dwelling Unit (EDU) connections that have remained flat over the past five years. • Permit user rates for flow, Biochemical Oxygen Demand (BOD) and Total Suspended Solids (TSS) will follow the most recent Rate Study. • Annexation fees capture both the net current assets and the equivalent property tax allocations totaling $4,235 per acre. • Annexable property in the District's service area sphere is minimal; consequently, no FY 2015-16 income from annexation fees is anticipated. • Property tax revenues are preliminarily estimated to increase by approximately five percent from FY 2014-15 to $81,620,000. A two percent annual increase in Assessed Value is authorized by the state constitution and is included in the increases noted above. The additional increase in assessed value is from authorized increases to market value when property is sold at a higher value. 2 FY 2015-16 Preliminary Budget Assumptions • Earnings on the investment of the District's operating cash and reserves will be budgeted at 1.0 percent of the average cash and investment balance projected for the fiscal year. • No additional debt issuance is scheduled for FY 2015-16. Operating Assumptions • Operating expenses are expected to be $9.4 million lower than the adopted FY 2015-16 budget of $155,004,500 as a result of paying down the OCERS Unfunded Actuarial Accrued Liability (UAAL) by$125 million. • All secondary treatment facilities are completed and fully operational. • Average daily flows are projected at 190 mgd for FY 2015-16. This projection reflects an expectation that increased economic activity and urban runoff will be more than offset by effects of conservation and minimal rainfall, resulting in an overall decrease in the average daily flow. The FY 2015-16 flow projection of 190 mgd is 2 mgd below the actual for the first 5 months of the current year and 8 mgd below the final actual flow for FY 2013-14. Employee/Staffing Assumptions • Staffing level is expected to remain flat. The total FY 2015-16 authorized staffing level is 626.00 FTEs. • Vacant positions as of 12/31/14 are budgeted at 50 percent of step 1 for the remainder of FY 2014-15 and at 100 percent of step 2 for FY 2015-16. • New positions will be projected at 100 percent of step 1 for FY 2015-16. • A 5.0 percent vacancy factor on authorized positions has been budgeted for FY 2015-16. The actual vacancy factor for 2013-14 was 6.9 percent. This vacancy factor accounts for time spent for recruitment and turnover. • The Memorandum of Understanding (MOU) for the Supervisor and Professional (SPMT) group expired June 30, 2013. Pending the completion of the negotiation process, no salary adjustments will be included in the budget for COLA for periods beyond the expiration of the current MOU. • The MOUs for both OCEA and Local 501 expired June 30, 2014. Pending the completion of the negotiation process, no salary adjustments will be included in the budget for COLA for periods beyond the expiration of the current MOU's. • OCERS rates for FY 2015-16 will decrease as a result of paying down the UAAL by $125 million in FY 2014-15. Retirement costs for employees enrolled in OCERS 3 FY 2015-16 Preliminary Budget Assumptions Plans G and H are estimated at a rate of 24.25 percent of the employee's base salary for FY 2015-16, down from 40.07 percent in FY 2014-15. The rates for Plans G and H include the District's pickup of 3.5 percent of employees' required contributions. Employees enrolled in OCERS Plan B are estimated at a rate of 18.39 percent of the employee's base salary for FY 2015-16, down from 34.87 percent in FY 2014-15. All employees hired on or after January 1, 2013 are enrolled in OCERS Plan U and are estimated at a rate of 17.52 percent for FY 2015-16, down from 33.52 percent in FY 2014-15. Interns are not enrolled in OCERS so their retirement benefits are calculated at 6.2 percent (FICA rate). • Other employee benefits and insurances will be budgeted to increase in FY 2015-16 by moderate but yet to be determined amounts. Materials, Supplies, & Services Assumptions • The proposed operating budget will continue to reflect an emphasis on safety, security, and maintenance of plant assets and infrastructure. • An amount equal to half of one percent of the Operating materials and services budget will be a contingency for prior year re-appropriations. Since the current year's budget lapses on June 30, a contingency is needed in the succeeding budget year for goods or services ordered at the end of one budget year but not delivered until the following year. • An amount equal to 0.85 percent of the Operating materials and services budget will be the General Manager's contingency budget. These funds will be allocated to appropriate line items during the year after requests and justifications for unanticipated needs are approved by the General Manager. • Resource needs for strategic initiatives will be included in the budget. Capital Improvement Program Assumptions • The FY 2015-16 cash flow budget, based on the most current Validated Capital Improvement Program (CIP), is the target. • The baseline CIP cash flow for FY 2015-16 is $180 million. • Continual evaluation of the CIP by the Asset Management Team may result in deferral or reduction of some projects and a resultant increase in O&M repair costs for materials and services, if the net cash Flow impact is a decrease. • The FY 2015-16 CIP budget will only increase for critical projects which were not previously identified in the Strategic Plan Update. • For the first five months of FY 2014-15, $42.5 million of the $169.2 million CIP budget, approximately 25.1 percent, was expended. 4 FY 2015-16 Preliminary Budget Assumptions Debt Financing • The District will issue new debt in the form of Certificates of Participation (COP) as needed to fund the CIP and to maintain reserves. • No additional debt issuance is scheduled for FY 2015-16. • Debt will only be used for CIP and capital expenses, not for operating expenses. • Capital financing plans which include fewer future borrowings and higher user fees after FY 2015-16 will be considered. • Borrowing is proposed only for facilities which do not add capacity and that are funded by all users for replacement, rehabilitation, and improved treatment. Reserve Assumptions • The current reserve policy was reviewed by Public Resources Advisory Group and the Board during FY 2003-04. No changes were proposed and direction was given to continue to maintain reserve levels at a level that is adequate to offset exposure to variable rate COPs due to interest rate increases. • The current reserve policy is summarized as follows: ► A cash Flow reserve will be established to fund operations, maintenance and certificates of participation expenses for the first half of the fiscal year, prior to 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 will be established as the sum of an amount equal to six months operations and maintenance expenses and the total of the annual debt (COP) service payments due in August each year. ► An operating contingency reserve will be established to provide for non-recurring expenditures that were not anticipated when the annual budget and sewer service fees were considered and adopted. The level of this reserve will be established at an amount equal to ten percent of the annual operating budget. ► A capital improvement reserve will be maintained to fund annual increments of the capital improvement program. The long-term target is for one half of the capital improvement program to be funded from borrowing and for one half to be funded from current revenues and reserves. With this program in mind, the target level of this reserve has been established at one-half of the average annual capital improvement program through the year 2024. 5 FY 2015-16 Preliminary Budget Assumptions ► Catastrophic loss, or self-insurance, reserves will be maintained for property damage including fire, flood and earthquake, for general liability and for workers' compensation. These reserves are intended to work with purchased insurance policies, FEMA disaster reimbursements and State disaster reimbursements. The potential infrastructure loss from a major earthquake, of which the District currently has no outside insurance coverage, has been estimated to be as high as $1.3 billion. The level of this reserve has been set at $57 million should such a catastrophic event occur. This reserve amount will assist the District with any short-term funding needs until Federal and State assistance becomes available. ► Accumulated capital funds will be set aside for certain specific, short-term capital improvements as the need and availability arise. ► A capital replacement/renewal reserve policy has been established to provide thirty percent of the funding to replace or refurbish the current collection, treatment and disposal facilities at the end of their useful economic lives. Based on the FY 2011-12 Asset Management Plan, the current replacement value of these facilities is estimated to be $3.14 billion for the collection facilities and $3.12 billion for the treatment and disposal facilities. The initial reserve level has been established at $50 million, which will be augmented by interest earnings and a small portion of the annual sewer user fee, in order to meet projected needs through the year 2030. ► Provisions of the various certificates of participation (COP) issues require debt service reserves to be under the control of the Trustee for that issue. These reserve funds are not available for the general needs of the District and must be maintained at specified levels. The current level of required COP service reserves is projected to be $2.12 million. ► Accumulated funds exceeding the levels specified by District policy will be maintained in a rate stabilization fund. These funds will be applied to future years' needs in order to maintain rates or to moderate annual fluctuations. There is no established target for this reserve. 6 Budget Calendar Tasks Responsibility EvenUDue Date PHASE I—BUDGET PREPARATION Preliminary Budget Assumptions Identified Financial Planning 12/12/14 Capital Improvement Program (CIP)— Future Engineering Planning 1/9/15 Project Attributes Reviewed and Updated Preliminary Budget Assumptions Presented to Financial 1/12/15 Executive Management Team (EMT) Management Draft Budget Calendar Presented to EMT Financial 1/12/15 Management Preparation for Budget Kickoff/Training Session: Financial Planning 1/13/15 • Salary and benefits downloaded to Excel worksheets • Develop line item worksheets with mid-year actual expense • Prepare/update budget instruction manual Budget Kickoff/Training Session: Financial Planning 1/20/15 • Distribute budget instruction manual update • Conduct budget training session • Review submission deadlines CIP— Engineering Validation Inputs Complete Engineering Project 1123/15 Managers CIP— New Project Numbers Assigned Engineering Project 1/30/15 Management Office (PMO) Operating Divisional Budgets: New Position and Divisional Budget 2/5/15 Change to Existing Position Decision Packages Coordinators Due to Human Resources (Richard Spencer, Ext. 7164)with copies to John Ralston Operating Budget: Promotional Items Request Divisional Budget 2/5/15 Forms Due to Dr. Robert Ghirelli (Division 110) Coordinators Capital Equipment Budget: Vehicle Capital Divisional Budget 2/5/15 Equipment Decision Packages Due to Fleet Coordinators Services (Jim Tintle, Ext. 7214) 7 Budget Calendar Tasks Responsibility Event/Due Date Capital Equipment Budget: Computer Capital Divisional Budget 2/5/15 Equipment Decision Packages Due to Information Coordinators Technology (Rich Castillon, Ext. 7283) Budget Assumptions Presented to Administration Financial 2111/15 Committee Management Mid-Year Financial Report to Administration Financial 2/11/15 Committee Management Division Budget Packages Due to Financial Divisional Budget 2119/15 Planning: Coordinators • Projection of current year actual operating costs • Proposed operating costs for 2015-16 • Operating Budget Expense Detail • Meetings, Memberships and Training Requests • Capital Equipment Decision Packages (other than computer and vehicle decision packages which were due on 2/5/15) • New program decision packages (Financial Planning will collate and bind these items—along with salary information -into the Preliminary Division Budget Document for use during the budget review process.) CIP— Non-engineering CIP project validation Non-engineering 2/22/15 forms completed & approved Project Managers CIP— Preliminary capital equipment request Financial Planning 2/23/15 estimates delivered to PMO Mid-Year Financial Report to Board Financial 2/25/15 Management Complete the Compilation of the Preliminary Financial Planning 2/25/15 Division Budget Update Packages CIP— Unified Preliminary CIP Budgets & Engineering PMO 315/15 Equipment Request Reports and Analysis Created CIP—Validated CIP budgets delivered to Engineering PMO 3/12/15 IT/Finance 8 Budget Calendar Department Budgets— Update the department text Department Budget 3119/15 from the FY 2014-15 & 2015-16 Budget Executive Coordinator Summary PHASE 11- BUDGET REVIEW Divisional Budgets - Distribution of Preliminary Financial Planning 2/27/15 Line Item Requested Budgets to Department Heads and Managers along with Analysis/Questions for Review Tasks Responsibility Event/Due Date Operating Budget— Information on New Positions, Human Resources 3/2/15 Position Upgrades & Reclassifications Submitted to the General Manager Operating Budget— Division Budget Review Financial Planning & 3/2/15—3/6/15 Meetings with Finance and Division Division Representatives Representatives CIP— Review/Adjust Preliminary CIP Budget Engineering 3/9/15 Management CIP— Preliminary Engineering/FinanceBudget Engineering/Financial 3/12/15 Review Workshop Management Operating Budget - Completion of Preliminary Financial Planning 3/12/15 Divisional Budgets and Compilation into Departmental Budgets Operating Budget— Recommendations to General Financial Planning 3/12/15 Manager CIP— Final Adjustments/Confirm 20 Year Cash Engineering/Financial 3/19/15 Flow Schedules/Final capital equipment requests Management delivered to PMO Final Operating Budget— General Manager Financial Planning, 3/16/15— 3/19/15 Review of Budget Recommendations General Manager, & Department Heads Capital Equipment Budget— Requests Reviewed Financial Planning, 3/16/15— 3/19/15 & Approved General Manager, & Department Heads Operating Budget— Report of General Manager's Human Resources 3/23/15 Decisions on New Positions, Position Upgrades & Reclassifications Submitted to the Financial Planning CIP—Approve Proposed CIP Budget EMT 3123/15 9 Budget Calendar CIP - Operations Committee Review Engineering 4/1/15 PHASE III- BUDGET PRESENTATION Operating Budget— Presentation of Preliminary Financial 4/6/15 Budget Update by Division/Department to EMT Management Operating Budget Update— Overview to Financial 4/8/15 Administration Committee Management CIP - Final CIP Budget Document Preparation and Financial Planning 4/9/15 Incorporation into Final Budget Document Tasks Responsibility Event/Due Date CIP— Review draft of Final Budget Document Financial Planning 4/9/15 pages with Engineering Planning & PMO Initial - Proposed Budget finalized Financial Planning 4/27/15 Initial - Proposed 2015-16 Budget Update Financial Ops—516/15 Presented to Committees Management Admin —5/13/15 General Manager's Budget Message Completed General Manager/ 5/8/15 Financial Management Approval of General Manager's Budget Message General Manager 5/13/15 Final - Proposed Budget to Printer Financial Planning 5/20/15 PHASE IV- BUDGET DELIBERATIONS Final Draft- Proposed 2015-16 Budget Update Financial Ops—6/3/15 Presented to Committees Management Admin — 6/10/15 Public Hearing & Board Adoption Board of Directors 6124/15 PHASE V—DISTRIBUTION OF BUDGET Final line item budget and equipment budgets Financial Planning 7/10/15 posted in H:\ntglobal 10 ADMINISTRATION COMMITTEE Meeting Dare To ad.of Dir. oz/tt/os -- AGENDA REPORT Item Number Item Number a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: CIP OVERVIEW GENERAL MANAGER'S RECOMMENDATION Information Only. SUMMARY Staff will present an informational overview on the Capital Improvement Program (CIP). The presentation will illuminate the process by which projects are created, designed, and constructed. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A BUDGET/PURCHASING ORDINANCE COMPLIANCE N/A ATTACHMENT N/A RT:KM:sa:gc Page 1 of 1 ORANGE COUNTY SANITATION DISTRICT Agenda Terminology Glossary Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOD Biochemical Oxygen Demand CARB California Air Resources Board CASA California Association of Sanitation Agencies CCTV Closed Circuit Television CEQA California Environmental Quality Act CRWQCB California Regional Water Quality Control Board CWA Clean Water Act CWEA California Water Environment Association EIR Environmental Impact Report EMT Executive Management Team EPA U.S. Environmental Protection Agency FOG Fats, Oils, and Grease FSSD Facilities Support Services Department gpd Gallons per day GWR System Groundwater Replenishment System (also called GWRS) ICS Incident Command System IERP Integrated Emergency Control Plan LOS Level of Service MGD Million gallons per day NACWA National Association of Clean Water Agencies NPDES National Pollutant Discharge Elimination System NWRI National Water Research Institute O&M Operations and Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District GOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration POTW Publicly Owned Treatment Works ppm Parts per million RFP Request For Proposal RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency Glossary of Terms and Abbreviations SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board SAWPA Santa Ana Watershed Project Authority SCADA Supervisory Control and Data Acquisition system SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SSMP Sanitary Sewer Management Plan SSO Sanitary Sewer Overflow SWRCB State Water Resources Control Board TDS Total Dissolved Solids TMDL Total Maximum Daily Load TSS Total Suspended Solids WDR Waste Discharge Requirements WEF Water Environment Federation WERF Water Environment Research Foundation Activated-sludge process — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved nutrients in the wastewater. Benthos— The community of organisms, such as sea stars, worms and shrimp, which live on, in, or near the seabed, also know as the benthic zone. Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farm land or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. Collections system — In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. Certificate of Participation (COP) —A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Glossary of Terms and Abbreviations Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (D!f) — the dilution at which the majority of the people detect the odor becomes the DrT for that air sample. Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect"). Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons a day of drinking quality water to replenish the local groundwater supply. Levels of Service (LOS)—Goals to support environmental and public expectations for performance. NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S. Environmental Protection Agency (EPA). NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation in order to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility. Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant. Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban run-off. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge—Untreated solid material created by the treatment of wastewater. Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater. Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Glossary of Terms and Abbreviations Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed —A land area from which water drains to a particular water body. OCSD's service area is in the Santa Ana River Watershed.