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HomeMy WebLinkAbout05-10-2017 Administration Committee Agenda Orange County Sanitation District Wednesday, May 10, 2017 Regular Meeting of the 5:00 P.M. ADMINISTRATION - Administration Building COMMITTEE Board Room 10844 Ellis Avenue w` Fountain Valley, CA 714 593-7433 AGENDA CALL TO ORDER: PLEDGE OF ALLEGIANCE: DECLARATION OF QUORUM: (Clerk of the Board) PUBLIC COMMENTS: If you wish to address the Committee on any item, please complete a Speaker's Form (located at the table outside of the Board Room) and submit it to the Clerk of the Board or notify the Clerk of the Board the item number on which you want to speak. Speakers will be recognized by the Chairman and 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: The Consent Calendar Items are considered to be routine and will be enacted, by the Committee, after one motion, without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1. APPROVAL OF MINUTES (Clerk of the Board) RECOMMENDATION: Approve Minutes of the April 12, 2017 Administration Committee Meeting. O5/1012017 Administration Commikee Agenda Page 1 d4 2. GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to: A. Receive and file Orange County Sanitation District purchases made under the General Manager's authority for the period of January 1, 2017 — March 31, 2017; and B. Approve the following additions to the pre-approved Original Equipment Manufacturer(OEM) Sole Source List: • ALFA-LAVAL— Pumps and Parts • CHEMINEER - Mixers • HARTZELL - Exhaust fans • VERDERFLEX- Pumps and Parts • WOODWARD - Engine and Turbine Systems 3. CONSOLIDATED FINANCIAL REPORT FOR THIRD QUARTER ENDED MARCH 31, 2017 (Lorenzo Tyner) RECOMMENDATION: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District Third Quarter Financial Reportfor the period ended March 31, 2017. 4. IBM TIVOLI MAXIMO AND WEBSPHERE (ENTERPRISEONE) ANNUAL SUBSCRIPTION AND SUPPORT (Lorenzo Tyner) RECOMMENDATION: A. Approve an Annual Purchase Order Contract with Carahsoft Technology Corporation for the Renewal of Software Licensing and Maintenance Agreement for IBM Maximo and WebSphere using GSA Contract GS35F0119Y, for an amount not to exceed $158,637; and B. Approve a contingency of$15,864, (10%) 5. WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION PROGRAM (Celia Chandler) RECOMMENDATION: Recommend to the Board of Directors to: Approve an additional one-year renewal period of the agreement with Keenan and Associates, for Workers' Compensation Third Party Administration Program, for O5/1012017 Administration Commikee Agenda Page 2 d 4 the period of July 1, 2017 through June 30, 2018, for a total amount not to exceed $48,000. NON-CONSENT: 6. 2017-18 OPERATIONAL PROPERTY-LIABILITY INSURANCE RENEWALS (Celia Chandler) RECOMMENDATION: Recommend to the Board of Directors to: Approve not-to- exceed numbers as follows, with the understanding that the Orange County Sanitation District's insurance broker will continue to negotiate with insurers to seek the lowest possible premiums prior to the expiration date of the current major insurance policies: Excess liability insurance from $405,126 to $445,639. Property and Boiler& Machinery combined from $665,813 to $677,628. • Earthquake insurance—from $76,385 to $78,062. • Excess workers' compensation insurance - a rate of $0.3133 per $100 of payroll not to exceed $208,000. INFORMATION ITEMS: 7. CAPITAL IMPROVEMENT PROGRAM (CIP) UPDATE FOR FY 2017/18 (Rob Thompson) CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: The next Administration Committee meeting is scheduled for Wednesday, June 14, 2017 at 5:00 p.m. O5/1012017 Administration Commikee Agenda Page 3 d 4 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. Agenda Postina: In accordance 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. Agenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. 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 Clerk of the Board (714)593-7433 klore(docsd.com For any questions on the agenda, Committee members may contact staff at: General Manager James Herberg (714)593-7300 iherbero(docsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli(docsd.00m Director of Finance and Lorenzo Tyner (714)593-7550 Itvner(doasd.com Administrative Services Director of Human Resources Celia Chandler 714 593-7202 cchandler ocsd.com 05/10/2017 Administration Committee Agenda Page 4 of 4 ITEM NO. 1 MINUTES OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, April 12, 2017 at 5:00 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Committee Chairman Wanke on April 12, 2017 at 5:01 p.m. in the Administration Building of the Orange County Sanitation District. Committee Chair Wanke led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Chad Wanks, Chair Jim Herberg, General Manager Donald P. Wagner, Vice-Chair Bob Ghirelli, Assistant General Manager Cheryl Brothers (Alternate) Celia Chandler, Director of Human Resources Jim Ferryman Jim Colston, Director of Environmental Services Peter Kim Rob Thompson, Director of Engineering Mark Murphy (Alternate) Ed Torres, Director of Operations & Maintenance Scott Peotter Lorenzo Tyner, Director of Finance & Erik Peterson (Alternate) Administrative Services Greg Seboum, Board Chair Tina Knapp, Deputy Clerk of the Board David Shawver, Board Vice-Chair Jennifer Cabral Al Garcia COMMITTEE MEMBERS ABSENT: Mark Manzo Al Krippner Kathy Millea Glenn Parker Jeff Mohr Sal Tinajero Ddaze Phuong John Swindler Mike White OTHERS PRESENT: Brad Hogin, General Counsel PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Committee Chair Wanke did not provide a report. W12J2017 Administration Committee Minutes Page 1 of REPORT OF GENERAL MANAGER: General Manager Jim Herberg announced that there will be a Joint Meeting of the Legislative and Public Affairs Committee and the Steering Committee on April 26, 2017 at 4:30 p.m. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: Director of Finance and Administrative Services Lorenzo Tyner did not provide a report. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED AND DULY CARRIED TO: Approve Minutes of the March 8, 2017 Administration Committee Meeting. AYES: Ferryman, Kim, Peotter, Peterson (Alternate), Seboum, Shawver, and Wanke NOES: None ABSTENTIONS: Brothers (Alternate) ABSENT: Krippner, M. Murphy (Alternate), Parker, Tinajero, and Wagner 2. FINANCIAL INFORMATION SYSTEM PURCHASE ORDER CONTRACT RENEWAL (Lorenzo Tyner) MOVED, SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a five-year Purchase Order Contract with Oracle America, Inc. for an annual amount of$92,143,for a total not to exceed amount of$460,715, commencing July 1, 2017 through June 30, 2022; and B. Approve a contingency of$46,072 (10%). AYES: Brothers (Alternate), Ferryman, Kim, Peotter, Peterson (Alternate), Seboum, Shawver, and Wanks NOES: None ABSTENTIONS: None ABSENT: Krippner, M. Murphy (Alternate), Parker, Tinajero, and Wagner 0412t2017 Administration Committee Minutes Page 2 of 4 3. PURCHASE OF RADIO COMMUNICATION EQUIPMENT AND SERVICES (Lorenzo Tyner) MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Authorize an additional $400,000 to sole source Purchase Order No. 105821-OB with Motorola Solutions utilizing Orange County Price Book Agreement No. MA060-15011560, for purchases of equipment, services, and repairs, for a total amount not to exceed $480,000 for the period ending May 207 2020; B. Authorize an immediate purchase of equipment and services for Orange County Sanitation District's Motorola radio systems, for a total amount of $148,613, plus applicable tax and freight; and C. Approve a contingency of $14,861 (10%). AYES: Brothers (Alternate), Ferryman, Kim, Peotter, Peterson (Alternate), Seboum, Shawver, and Wanks NOES: None ABSTENTIONS: None ABSENT: Krippner, M. Murphy (Alternate), Parker, Tinajero, and Wagner NON-CONSENT: None. Alternate Director M. Murphy arrived at 5:09 p.m. Vice-Chair Wagner arrived at5:11p.m. INFORMATION ITEMS: 4. FY 2017-18 BUDGET UPDATE (Lorenzo Tyner) Mr. Tyner introduced Mike White, Controller, who presented a PowerPoint presentation that included the proposed staffing increase in FY 2017-18, benefit costs, operating and materials supplies expenses, biosolids removal costs, major costs components, power costs, engineering services costs, insurance and research funds costs, training costs, and the Orange County Employees Retirement System (OCERS) Unfunded Actuarial Accrued Liability (UAAL) pay down and costs. 0412J2017 Administration Committee Minutes Page 3 of 4 5. BIOSOLIDS MASTER PLAN, PROJECT NO. PS15-01 INFORMATION UPDATE (Rob Thompson) Mr. Thompson introduced this item and Engineering Manager Jeff Mohr provided an informative PowerPoint presentation that included an overviewof what biosolids are, drivers for the Biosolids Master Plan, biosolids costs, proposed projects, and the AquaCritox Demonstration Project evaluation study. Mr. Mohr advised the Committee that compost is available tonight in the buckets provided. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: Committee Chair Wanke declared the meeting adjourned at 6:12 p.m.to the next regularly scheduled meeting of Wednesday, May 10, 2017 at 5:40 p.m. Submitted by: Tina Knapp Deputy Clerk of the Board 0412J2017 Administration Committee Minutes Page 4 of 4 ADMINISTRATION COMMITTEE Melting D310 TOBE.Or Dir. gs/10117 os/z4/17 AGENDA REPORT ItemNumber Item Number z Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST GENERAL MANAGER'S RECOMMENDATION A. Receive and file Orange County Sanitation District purchases made under the General Manager's authority for the period of January 1, 2017 — March 31, 2017; and B. Approve the following additions to the pre-approved Original Equipment Manufacturer(OEM) Sole Source List: • ALFA-LAVAL - Pumps and Parts • CHEMINEER - Mixers • HARTZELL - Exhaust fans • VERDERFLEX- Pumps and Parts • WOODWARD - Engine and Turbine Systems BACKGROUND Staff provides the Administration Committee and the Board of Directors quarterly reports of General Manager approved purchases between $50,000 and $100,000, and additions to the pre-approved OEM Sole Source List. RELEVANT STANDARDS • Quarterly financial reporting • Ensure the public's money is wisely spent PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Minute Order 12(b) authorized the General Manager to ratify additions or deletions to the OEM Sole Source list on the General Managers quarterly approved purchases agenda report. Page 1 of 3 ADDITIONAL INFORMATION In accordance with Ordinance No. OCSD-47, the General Manager has authority to approve purchases between $50,000 and $100,000. Below is a summary of General Manager approved purchases, in amounts exceeding $50,000, for the third quarter of fiscal year 2016-17: Vendor Name Amount Department Description/Discussion Preventive Maintenance, Testing, BEC BUILDING Administrative Inspection, Repair and Alteration of Fire ELECTRONIC $60,000.00 Services Alarm Systems CONTROLS INC 3/1/17 to 2/28/18 Board Award: M.O. 12/14/16, Item 12 DEMARIA Operations & Repair& Rebuild SAILS Hidrostal Pump#4 ELECTRIC MOTOR $95,500.00 Maintenance Sole Source Justification# 1690 SERVICES, INC. Reason: Emergency As-Needed IT Consulting Services DYNTEK Administrative 4/28/17 to 10/14/17 SERVICES INC $60,000.00 Services GSA Contract No. GS-35F-0025N, in accordance with Ordinance OCSD-47, Section 2.03 (B) Cooperative Purchases ESRI Enterprise Advantage Program ESRI INC $83,000.00 Administrative (EEAP) Services 7/1/17 to 6/30/18 Board Award: M.O. 12/14/16, Item 12 GRAYBAR Convenience Blanket PO for ELECTRIC Operations & Miscellaneous Electrical Parts and COMPANY $85,000.00 Maintenance Supplies WALNUT CA 3/1/17 to 6/30/18 GM Article 2, Section 2.2 (b)(1) Emergency Work to Repair a Sinkhole J R FILANC $g000000 Operations & near OCSD Manhole SAR0720-0000 , . CONSTRUCTION Maintenance Sole Source Justification# 1726 Reason: Emergency Page 2 of 3 Vendor Name Amount Department Descri tion/Discussion Provide EPA Protocol Calibration Gas MATHESON TRI Operations & Cylinder Refills and Cylinder Demurrage GAS, INC. $80,000.00 Maintenance 7/1/17 to 6/30/18 Specification No. C-2017-829 Convenience Blanket PO for ONESOURCE Miscellaneous Electrical Parts and Operations & DISTRIBUTORS $85,000.00 Maintenance Supplies INC 3/1/17 to 6/30/18 GM Article 2, Section 2.2 (b) (1) ROYAL TRUCK Operations & Truck Bed Installations on Two (2) BODY $57,717.38 Maintenance 2014 Ford F-550 Trucks Specification No. S-2016-811-R Consulting Services for Plant Facility Impacts from OCTA/Caltrans I-405 STADIA REALTY $96,000.00 Engineering Widening Project INC. 3/3/17 to 3/2/18 Sole Source Justification # 1718 Reason: Unique Product/Service ADDITIONS TO PRE-APPROVED OEM SOLE SOURCE LIST • ALFA-LAVAL — Pumps and Parts • CHEMINEER - Mixers • HARTZELL - Exhaust fans • VERDERFLEX - Pumps and Parts • WOODWARD - Engine and Turbine Systems ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: N/A Page 3 of 3 ADMINISTRATION COMMITTEE Melting D310 TOBE.Of Dir. Bs/10117 os/z4/17 AGENDA REPORT Item Item Number 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: CONSOLIDATED FINANCIAL REPORT FOR THIRD QUARTER ENDED MARCH 31, 2017 GENERAL MANAGER'S RECOMMENDATION Receive and file the Orange County Sanitation District Third Quarter Financial Report for the period ended March 31, 2017. BACKGROUND Included in this consolidated report are the following quarterly financial reports for the period ended March 31, 2017: • Third Quarter Budget Review The budget review summary provides the Directors, staff, and general public with a comprehensive overview of the financial results of the Orange County Sanitation District (Sanitation District)through the third quarter ended March 31, 2017. • 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 (COP) Quarterly Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. RELEVANT STANDARDS • Quarterly financial reporting ADDITIONAL INFORMATION The quarterly treasurer's report contained within the Consolidated Financial Reports for the Third Quarter Ended March 31, 2017 is being submitted in accordance with the Sanitation District's investment policy, which requires the report be submitted to the governing body following the end of each quarter and includes the following information: Page 1 of 3 • Performance results in comparison with the 3-month treasury bill index for the liquid operating portfolio; and the Merrill Lynch Corp./Govt. 1-5 Year Bond index for the long-term portfolio as identified in the investment policy; and the time- weighted total rate of return for the portfolio for the prior three months, six months, nine months, 12 months, year to date, and since inception compared to the Benchmark returns for the same periods: Portfolio Performance Summary Quarter Ended March 31,2017 Liquid Operating Monies(%) Long-Term 0 7onfing Monies Total Rate Total Rate of of Return Benchmark Return Benchmark 3 Months 0.14 0.10 0.52 0.47 6 Months 0.27 0.19 -0.33 7.59 9 Months 0.37 0.28 -0.27 :565 12 Months 0.46 0.36 0.45 0.21 Annualized Since inception 30 Nov 2014 0.37 0.21 1.12 1.08 • A listing of individual securities held at the end of each reporting period (see the detailed listings of each security contained within the report). • Cost and market values of the portfolios: Liquid Oper. Long-Term Cost $85.0 M $318.0 M MV $85.2 M $318.2 M • Modified duration of the portfolio compared to Benchmark: Liquid Oper. Long-Term B.M. 0.15 2.61 Port. 0.16 2.43 • Dollar change in value of the portfolio for a one-percent (1%) change in interest rates: Liquid Oper. — $133,206 Long-Term — $7,723,544 • None of the portfolios are currently invested in reverse repurchase agreements. • The percent of the Liquid Operating Monies portfolio maturing within 90 days: 74.3% • Average portfolio credit quality: Liquid Oper. —AAA/Aaa Long-Term —AA/Aa1 Page 2 of 3 • Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities: Liquid Portfolio— no exceptions Long Term Portfolio— Percent of portfolio-3.4% Maturity Cost Date Moody S&P Fitch AMRESCO Residential Securities 1999-1 $ 100,432.85 6/25/2029 Not Rated AA+ BBB Bank of America Corp Note $4,334,014.00 12/1/2017 Baal BBB+ A Goldman Sachs Group Inc. Note $ 692,806.00 1/18/2018 A3 BBB+ A American Express Credit Note $ 3,377,385.79 3/19/2018 A3 BBB+ A Morgan Stanley Note $ 3,200,848.00 7/28/2021 A3 BBB+ A • All investments are in compliance with this policy and the California Government Code, except for the following Lehman Brothers holdings that the Sanitation District is pursuing collection through the bankruptcy court: Lehman Brothers Note-Defaulted $ 600,000 par value purchased 9/19/2008 Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008 • Sufficient funds are available for the Sanitation District to meet its operating expenditure requirements for the next six months. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Consolidated Financial Reports for the Third Quarter Ended March 31, 2017 Page 3 of 3 0 NGE CO4UY.S ANIT DISTRICT NO � 1 ; - a • for the period ended March 31 , 2017 �k ,ua?s 1�11ly■. !a .s pZGl01�:� 13%. ~ , I�j- . . IN. i r .41 are t Y _ _ ■ _ �" - - �■ - - - ' � Orange County, California Table of Contents ExecutiveSummary...................................................................................................1 Budget Review Section 1 —Consolidated Financial Reports..........................................................................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 Reoort.................................................................................................1 FY 2016-17 Third Quarter Financial Report This Page Intentionally Left Blank Executive Summary Consolidated Financial Reports For the Third Quarter Ended March 31, 2017 Included in this consolidated report are the following quarterly financial reports for the period ended March 31, 2017: Third Quarter Budget Review: The Consolidated Financial Reports Section provides the Directors, staff, and the general public with a comprehensive overview of the financial results of the Sanitation District through the third quarter ended March 31, 2017. Contained within the Consolidated Financial Reports is the budget-to-actual status of the Collections, Treatment and Disposal Operations, the Capital Improvement Program, the Self-Insurance Program, and Debt Service Outlays. Also included is a Capital Assets Schedule as of March 31, 2017. 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 107.7 percent mainly due to the receipt of total debt proceeds of $195.1 million, $112.5 million from the issuance of Revenue Refunding Certificate Anticipation Notes, Series 2016B, during the second quarter; and $82.6 million from the issuance of Wastewater Refunding Revenue Obligations, Series 2017A, during the third quarter of the fiscal year. The 2016B Notes were used to refund the Revenue Refunding Certificate Anticipation Notes, Series 2014B. The 2017A Obligations were used to refund the Certificate of Participation Series 2007A. Excluding debt financing proceeds, total revenues are at 62.3 percent of the budget. Except for IRWD Intra District Sewer Use, IRWD Capital Assessments, Interest Earnings, and Other Revenues, 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 Consolidated Financial Reports Section of this report, the net operating requirements through the third quarter of $100.6 million is currently tracking at 68.7 percent of the $146.4 million budget. In addition, net operating expenses have decreased $3.9 million or 3.8 percent in comparison with the same period last year. Overall, staff expects the total operating costs to remain within 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 FY 2016-17 Third Quarter Review The total cost per million gallons is approximately $1,951.3 based on flows of 188.1 million gallons per day. This is $215.8 per million gallons, or 10.0 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 2016-17 has been revised to $144.7 million, or 79.5 percent of the board approved cash outlay of$181.9 million. The actual cash outlay spending through the third quarter is $101.0 million, or 55.5 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 notes that the Long-Term Portfolio returned 57 basis points over the quarter outperforming the Bank of America Merrill Lynch 1-5 year AAA-A U.S. Corporate and Government Index return of 47 basis points, while the Liquid Operating Monies Portfolio returned 14 basis over the quarter, outperforming the three-month Treasury Bill index return benchmark of 10 basis points. Chandler further notes that: • the Federal Open Market Committee (FOMC) left the target federal funds rate unchanged at the first meeting of this year but raised the target federal funds rate in March by 25 basis points to a range of 0.75%-1.00%. The March rate hike was the FOMC's third rate hike since the 2008 financial crisis when the fed funds target rate reached a historical low range of 0.00%-0.25% (the other two 25 basis point rate hikes were in December 2015 and December 2016). The Fed noted that economic activity has expanded at a moderate pace, labor market gains remain solid, and inflation is moving close to the Fed's 2.0% target. The Fed is still projecting a 1.4% fed funds rate by the end of this year, which implies two more 25 basis point hikes. The FOMC's long-run fed funds rate projection was also unchanged at 3.0%. • Market participants estimate the economy grew at an annualized pace of about 1.8% in the first quarter, following growth of 2.1% in the fourth quarter. Labor market trends continued to improve in the first quarter, and the economy is now likely at or near full employment. The unemployment rate declined to 4.5% in March, down from 4.7% in December. Wage Page 2 Executive Summary growth increased during the first quarter, and payrolls increased by an average of 178,000 per month (more than enough to absorb new entrants into the labor market). Consumer confidence remained strong during the first quarter and housing trends remained favorable. Furthermore, manufacturing indicators improved during the first quarter. Inflation indices increased during the first quarter. This was driven in part by the year-over- year increase in energy prices. Overall, core inflation seems to be approaching the Fed's 2.0% target. • In the past quarter, the 2-year Treasury yield is rose about 7 basis points and the 10-year Treasury yield is declined about 6 basis points. Notably, shorter-term yields (1-year and under) increased more than 20 basis points during that time-period. On a year-over-year basis the 2-year Treasury yield has increased 53 basis points and 10-year Treasury yield is up about 62 basis points. • Corporate credit spreads, or the additional compensation investors receive for purchasing non-US treasury securities, tightened during the first quarter, based on the Bank of America Merrill Lynch US Corporate Index. • The Consumer Price Index (CPI) was up 2.7% year-over-year in February, versus up 2.5% year-over-year in January. Core CPI (CPI less food and energy) was up 2.2% year-over-year in February, versus up 2.3% year- over-year in January. The Personal Consumption Expenditures (PCE) index was up 2.1% year-over-year in February, versus up 1.9% year-over- year in January. Core PCE (excluding food and energy) was up 1.8% year- over-year in February, versus up 1.7% year-over-year in January. CPI is already trending above 2.0%, and the Fed's primary inflation gauge (PCE) is approaching the Fed's 2.0% target. • Economic Outlook Risk markets have performed well since the US election, predicated partially on the belief by investors tax reform will take place late in 2017 and fiscal stimulus in 2018. As the realities of the visceral political environment set-in for the new Presidential Administration, it is likely expectations of tax reform and fiscal spending will be moderated, potential leading to a pull-back in risk asset performance. The Treasury curve flattening experienced during Q1 seems to reflect the above reality, whereas the equity markets maintain a much more sanguine view specific to tax policy and fiscal spending. The Federal Reserve remains intent on continuing the process of'normalizing' monetary policy and moving further away from the zero-interest rate policy of the past several years. The Chandler team holds the view the Fed's forecast for interest rates is too optimistic, as the still very aggressive monetary policies being implemented abroad by both the European Central Bank and the Bank of Japan will put a ceiling on how high US rates can go before the corresponding increase in the dollar derails the domestic economic recovery. The Federal Reserve will be able to raise the Federal Funds rate, but not too the level consistent with the Page 3 FY 2016-17 Third Quarter Review March 2017 Summary of Economic Projections. The Chandler team expects interest rates in general to drift higher over the coming months and will be looking to add spread product, predominately in the Corporate and Asset Backed sectors, to enhance the total return opportunity of the portfolio. • 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 4 Consolidated Financial Reports Third Quarter Financial Report March 31, 2017 Financial Management is pleased to present the FY 2016-17 third 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 March 31, 2017, 68.7 percent, or $100.6 million of the FY 2016-17 net operating budget of $146.4 million has been expended. Net operating expenses decreased from the same period last year by $3.9 million, or 3.8 percent, mainly due to a decrease of$2.0 million in Salaries and Benefits, $1.1 million in Utilities, $983,000 in Operating Materials and Supplies, $465,000 in Repairs and Maintenance, and $92,000 in Administrative Expenses, and an increase of $713,000 in indirect costs allocated out to capital projects. These reductions to net operating expenses have been partially offset by increases of $627,000 in Contractual Services, $485,000 in Other Operating Supplies, $131,000 in Professional Services, and $107,000 in Training and Meetings. These and other variances that factor into this net decrease in expenses are discussed in more detail below. Overall, staff expects the total operating costs to remain at or slightly below budget throughout the remainder of the year. Significant operating results as of March 31, 2017 include the following: • Salaries. Wanes and Benefits — Personnel costs of $66.6 million are on target at 74.6 percent of budget through the third quarter of FY 2016-17. Although the budget is based on a 5 percent vacancy factor, staffing is 50 full-time equivalents (FTE's), or 8.0 percent below the total 627 FTE's approved in the FY 2016-17 budget. Salary and benefit costs are $2.0 million or 2.9 percent lower than the $68.6 million incurred in the same period last year, mainly due to the decrease in OCERS retirement of $3.6 million. This decrease is reflective of the decrease in the employee contribution rate as a result of the $214.1 million pay down on the unfunded actuarial accrued liability over the current and previous two fiscal years. This decrease is partially offset by an increase of $1.5 million in salaries and wages due primarily to the completion of bargaining unit agreements, following the completion of the FY 2017-18 budget, that became effective as of July 1, 2016. Net operating personnel costs are expected to be slightly below budget throughout the remainder of the year. • Administrative Expenses — Administrative Expenses totaled $1.1 million, or 58.5 percent of the $2.0 million budget through March 31. These costs are $92,000 or 7.4 percent lower at March 31 in comparison with the prior year mainly due to a decrease of $96,000 in purchases of small computer items, primarily Microsoft Section 1 - Page 1 FY 2016-17 Third Quarter Report Surface Pro tablets purchased in the prior year. It is anticipated that the administrative costs will be below budget at year-end. • Printing and Publication Expenses — Printing and Publication Expenses totaled $190,000, or 61.1 percent of the $311,000 budget through March 31. These costs are $6,000 or 3.1 percent higher at March 31 in comparison with the prior year, mainly due to an increase of $23,000 in notices and ads for career recruitment, offset by a decrease of $20,000 in copy center costs as a result of removing mailroom services from the Xerox contract. It is anticipated that the printing and publication costs will be below budget at year-end • Training and Meetings — Training and meetings of $623,000 are below target at 52.3 percent of the $1.2 million budget. This account is lower than the proportionate budget due to the timing and need for training throughout the year. These costs have increased over the same period last year by $107,000 or 20.8 percent, which includes $72,000 for Total Productive Maintenance Certification Program costs and $22,000 for taxonomy training not incurred in the prior period. Total training and meeting costs are anticipated to be below budget at year- end. • Operating Materials and Supplies — Operating materials and supplies of $11.0 million is below target at 65.8 percent of budget through March 31. Operating Materials and Supplies have decreased from the prior year by $983,000 or 8.2 percent, primarily due to decreases in Chemical Coagulants of $668,000, Odor Control of $153,000, Tools of $93,000, Safety Equipment of $30,000, and Lab Chemicals and Supplies of $20,000. The decreases are mainly brought about by chemical process optimization, a decrease in unit costs, and a decrease of purchases for tools and equipment from the prior year. Based on current processes, operating materials and supplies are anticipated to approximate budget at year-end. • Contractual Services — Contractual services is below target at $17.3 million or 68.9 percent of budget through March 31. Solids Removal costs, budgeted at $17.2 million, comprise the majority of this expense category. With a decrease of $438,000 or 3.3 percent lower than the prior year, due to renegotiation of composting contract rates, solids removal costs totaled $12.8 million, or 74.3 percent of budget at March 31. Overall, Contractual Services is higher by $627,000 or 3.8 percent over the same period last year. Security Services increased by $524,000 due to heighted security and the addition of armed patrol services at both plants. In addition, Other Contractual Services increased by $511,000 due to an increase in preventive maintenance services for the Civil Assets Management Program (CAMP), and Temporary Services increased by $146,000 due to position vacancies. These increases were offset by decreases of $64,000 in Janitorial Service dues to renegotiation of contract rates and $43,000 in Oxygen due to prior period flows diverted from plant 2. County Service Fees totaled only $45,000, or 6.7 percent of the $672,000 budget through the third quarter as the preponderance of these fees Section 1 - Page 2 Consolidated Financial Reports are always billed by the County in the fourth quarter. Total contractual services costs are anticipated to approximate budget at year-end. • Professional Services — Professional services costs totaled $2.2 million or 52.1 percent of the $4.3 million budget through March 31. Professional service costs, such as Audit and Accounting, Engineering, Environmental Scientific Consulting, and Other Services, are proportionately low through March 31 due to a variety of factors such as timing of services needed, services being in the planning or request for proposal stage, the need for the service being re-evaluated, or utilization of internal staffing for projects. These costs are $131,000 or 6.2 percent higher at March 31 in comparison with the prior year mainly due to an increase of$175,000 in engineering services and timing of services performed. It is anticipated that the costs for this category will be below budget at year-end. • Research and Monitoring — Research and monitoring costs totaled $525,000, or 65.6 percent of the $806,000 budget through March 31. These costs are $3,000, or 0.5 percent higher at March 31 in comparison with the prior year, mainly due to an increase in environmental monitoring costs, offset by a decrease in air quality monitoring costs. Total Research and Monitoring costs are anticipated to be below budget at year-end. • Repairs and Maintenance — Repair and maintenance costs totaled $9.5 million, or 67.0 percent of the $14.2 million budget through March 31. These costs are $465,000, or 4.7 percent lower at March 31 in comparison with the prior year, mainly due to Plant 2 digester treatment and engine repairs in the prior year. It is anticipated that the costs for this category will approximate or be below budget at year-end. • Utilities — Utilities costs totaled $4.7 million, or 56.8 percent of the $8.2 million budget through March 31. These costs are $1.1 million or 18.3 percent lower at March 31 in comparison with the prior year, primarily due to a decrease in electricity charges of $1.0 million as a result of lower usage related to decreased activities and outfall pumping as well as a new operating strategy implemented to reduce utility- provided electricity. It is anticipated that the costs will be below budget at year- end. • Other Operating Supplies — Other operating supplies costs totaled $1.8 million, or 79.7 percent of the $2.3 million budget through March 31. Property and General Liability Insurance comprise the majority of this expense category. These costs are $461,000 or 124.0 percent higher at March 31 in comparison with the prior year primarily due to an increase in budgeted in-lieu premium charges in order to maintain recommended reserve balances. It is anticipated that the costs will approximate budget at year-end. • Revenues — Service Fees and Property Taxes — Through March 31, revenues from service fees are at $179.5 million, or 62.6 percent of budget and Property taxes are $55.3 million, or 63.6 percent of budget. These items comprise the majority of the Sanitation District's revenues and are mostly collected by the County Section 1 - Page 3 FY 2016-17 Third Quarter Report 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. A decrease of$1.4 million or 0.8 percent in service fee revenue over the prior period is due in part to timing of customer payments, transfer of local sewer service fees to East Orange County Water District, change in invoicing wholly-exempt agency invoices, and an increase in user fee refunds issued in the current period, offset by an increase in fees of 1.6 percent. An increase of $2.5 million or 4.7 percent in property tax revenues over the prior period is due to an increase of approximately 2.0 percent in property tax rates, and higher construction activities and property values. These revenues are expected to approximate budget at year-end. • Revenues — Permittee User Fees — Permittee User Fees are at $9.6 million, or 85.0 percent of the $11.3 million budget. The number of permittees fluctuates from year to year as businesses are established or close their operations. The revenues through the third quarter are $1.3 million or 15.0 percent higher in comparison with the same period last year due to an increase in the number of permittees and an increase in the amount of discharge from the permittees. It is estimated that the permittee user charges will approximate or slightly exceed budget at year-end. • Revenues — Inter District Sewer Use — SAWPA and SBSD — Inter District Sewer revenues - SAWPA and SBSD are at $2.4 million, or 73.5 percent of the $3.3 million budget. This revenue is derived from charges to the Santa Ana Watershed Protection Agency (SAWPA) and Sunset Beach Sanitary District (SBSD) for treatment of flows. These revenues are expected to approximate budget at year-end. • Revenues — Intra District Sewer Use — IRWD — Intra District Sewer revenues- IRWD are at <$3.6 million>, or <97.4> percent of the $3.7 million budget. This revenue is derived from charges to the Irvine Ranch Water District (IRWD) for treatment of flows. The revenues through the third quarter are lower than the same period last year by $5.5 million or 300.9 percent mainly due to a reduction of $6.1 million of pension costs allocated to IRWD based on their desire to amortize their share of the $214.1 million of unfunded actuarial liability paydowns the District made over the past two fiscal years over the original 15 year amortization period established by the Orange County Employees Retirement System, offset by an increase of $733,000 in operation and maintenance charges to IRWD. These revenues are expected to be below budget at year-end. • Revenues - Sludge Disposal — IRWD — Sludge Disposal fees - IRWD are at $11.5 million, or 126.7 percent of the $9.1 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 third quarter are higher than the same period last year by $4.0 million or 52.5 percent, mainly due to actual cost adjustments covering a two-year period. The quarterly billing to IRWD is based on estimates. These revenues are expected to exceed budget at year-end. Section 1 - Page 4 Consolidated Financial Reports • Revenues — Capital Assessments — IRWD — Capital Assessments-IRWD are at $1.7 million, or 38.8 percent of the $4.4 million budget. The revenues through the third quarter are lower than the same period last year by $204,000 or 10.7 percent mainly due to a decrease in joint capital costs allocable to IRWD. It is estimated that the capital assessments will be below budget at year-end. • Revenues — Capital Facilities Capacity Charges ICFCCI — CFCC are at $8.1 million, or 60.0 percent of the $13.5 million budget. The revenues through the third quarter are lower than the same period last year by $2.5 million or 23.9 percent due to decreased construction activity and timing of payments from local agencies, offset by more supplement capital facilities capacity charges from industrial dischargers than at this time last year. These revenues are expected to be below the budget at year-end. • Revenues — Interest Earnings — Interest Earnings are at $1.5 million or 17.9 percent of the $8.6 million budget. The revenues through the third quarter are lower than the same period last year by $5.1 million or 76.6 percent due to lower yields earned on investments and lower cash and investment balances. It is estimated that the interest earnings will be below the budget amount at year- end. • Revenues — Wastehauler — Wastehauler revenues are at $717,000 or 95.6 percent of the $750,000 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 exceed budget at year-end. • Revenues — Grant Revenue — Grant revenue though the third quarter is lower than the same period last year by $450,000 or 100.0 percent. This revenue consists of a prior period federal grant received from the United States Bureau of Reclamation for $450,000. Grant funds were received related to the Effluent Reuse Study for the Groundwater Replenishment System (GWRS), of which one half of the consultant costs less grant funds received will be reimbursed by the Orange County Water District once the study is complete. • Revenues — CNG Sales — CNG Sales revenues are at $332,000 or 82.9 percent of the $400,000 budget. This revenue is derived from public sales at the District's Compressed Natural Gas (CNG) fueling station. The revenues through the third quarter are higher than the same period last year by $39,000 or 13.4 percent. These revenues are expected to approximate or exceed budget at year-end. • Revenues - Other — Other revenues are at $270,000 or 33.7 percent of the $800,000 budget. These revenues consist of miscellaneous revenues, such as reimbursements from insurance and employees. The revenues through the third quarter are lower than the same period last year by $507,000 or 65.3 percent mainly due to a settlement received in the prior year from the County of Orange bankruptcy filing in 1994 of $480,000. These revenues are expected to be below budget at year-end. Section 1 - Page 5 FY 2016-17 Third Quarter Report Comparison of Third Quarter Cost per Million Gallon Results with Budget Last Five Years 2,200 2,154 2.167 2,100 2,050 2,000 z.oss 2.or6 1,950 1.900 1,850 1,800 1,750 1,700 1,650 1,600 1,550 1.500 ]7:t3 1314 1415 15=L@ 1.6_1Z 3rd Annual 3rd Annual 3rd Annual 3rd Annual 3rd Annual QV 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 third quarter has been between 3.0 percent lower to 1.2 percent higher than the annual budget. The FY 2016-17 third quarter is 10.0 percent lower when compared with this year's budget. The variance from previous years is primarily due to a decrease in operating expenses, which are 3.8 percent lower than the same period last year and an increase in flows, which are 2.0 percent higher than the same period last year. Staff believes that overall operating costs will be below budget at year-end. The total cost per million gallons at March 31 is $1,951 based on flows of 188.1 million gallons per day. This is $216 per million gallons, or 10.0 percent, lower than the budgeted cost per million gallons of $2,167. 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 8.4 percent less than the proportionate budget through March 31 and flows of 188.1 million gallons per day being 1.7 percent higher than the budgeted flow of 185 million gallons per day. More detailed information on operating revenues, costs, and related information is provided within Section 2. Section 1 - Page 6 Consolidated Financial Reports 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 2012 2013 2014 2015 2016 Agency SFR SFR SFR SFR SFR Notes San Francisco $667.92 $701.40 $744.83 $ 784.44 $ 842.14 City of San Diego $572.58 $572.58 $572.58 $ 572.58 $ 572.58 Vallejo Sanitation/Flood Control District $495.12 $507.48 $520.20 $ 520.20 $ 520.20 Central Contra Costa Sanitary District $371.00 $405.00 $439.00 $ 471.00 $ 503.00 City of Los Angeles $391.56 $409.20 $435.40 $ 464.04 $ 494.77 Note 1 Sacramento County $288.00 $312.00 $348.00 $ 384.00 $ 420.00 Dublin San Ramon SerHces District $355.44 $355.44 $372.96 $ 382.38 $ 382.38 Union Sanitary District $319.55 $337.76 $357.02 $ 377.00 $ 380.05 East Bay MUD $305.10 $331.10 $358.14 $ 355.18 $ 372.50 City of Hayward $327.24 $327.24 $337.08 $ 347.16 $ 357.60 Orange County Sanitation District $294.00 $308.00 $316.00 $ 322.00 $ 327.00 City of Fresno $309.00 $309.00 $309.00 $ 309.00 $ 309.00 Irene Ranch Water District $206.40 $220.80 $246.00 $ 288.60 $ 309.00 Note 2 Om Loma Sanitary District $189.00 $195.00 $200.00 $ 206.00 $ 221.00 Los Angeles County $149.00 $150.00 $151.00 $ 155.00 $ 159.00 Note 3 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. (3)- Data for 2013 and 2014 was revised to remo%ad valorem monies that were inadvertently included. Section 1 - Page 7 FY 2016-17 Third Quarter Report Benchmark Study Five-Year Cost per MG FY 11-12 FY 12-13 FY 13-14 FY 14-15 FY 15-16 Agency Svc.Trt. Cost]MG Cost/MG CosVMG Cost/MG CosVMG Notes Central Contra Costa Sanitary District B 4 $4,203.43 $4,621.84 $5,778.43 $6,280.58 $6,453.65 Vallejo SanitatiordFlood Control District B 3 $5,176.00 $5,435.00 $6,153.00 $5,590.00 $5,396.00 San Francisco B 3 $4,778.96 $5,006.74 $5,400.28 $5,357.97 $5,268.23 Note 1 Union Sanitary District B 3 $3,267.06 $3,805.40 $3,832.47 $3,910.73 $3,957.08 City of San Diego B 2 $3,242.30 $3,340.35 $3,156.43 $3,591.69 $3,171.51 Dublin San Ramon Services District B 3 $2,009.57 $2,159.49 $2,506.60 $2,522.00 $2,895.95 East Bay MUD T 4 $2,320.02 $2,359.40 $2,559.18 $2,727.97 $2,598.53 Sacramento County T 3 $3,312.50 $2,143.16 $2,375.47 $2,494.40 $2,571.14 Note City of Los Angeles B 4 $1,935.00 $2,062.00 $2,163.00 $2,269.00 $2,452.00 Orange County Sanitation District B 3 $1,871.47 $1,906.01 $1,935.05 $2,070.97 $2,110.43 City of Fresno B 3 $1,383.60 $1,411.89 $1,552.39 $1,628.91 $1,678.28 Los Angeles County B 4 $1,156.00 $1,008.00 $1,223.72 $1,239.40 $1,371.06 Note 3 Legend for Service Provided and Treatment Level: B-Agencyoperates both collection and treatment facilities T-Agency provides treatment services but not collection 2-Advanced primary or pdmarywith some secondary treatment 3-Secondarytreatment 4-Advanced secondaryor secondarywith some tertiary treatment Notes: (1)-Beginning in Fiscal Year 2012-13,dataset represents wastewater flows from finalbed publidyavailable audited documents, (2)-Miles of sewers number changed in 2012 to include parallel force main pipes per the 2011 State of the District Report. (3)-Does not include source control or overhead costs. Section 1 - Page 8 Consolidated Financial Reports Capital Outlay Review: $200,000,000 $150,000,000 $100,000,000 S50,000,000 $0 3/31/17 Actual Projected 2016-17 2016-17 Capital Outlay Capital Outlay Capital Outlay Cashflow Budget $101,039,226 $144,666,300 $181,913,075 As depicted by the preceding chart, Capital Outlays totaled $101.0 million or 55.5 percent of the capital outlay cash flow budget for FY 2016-17 as of March 31, 2017. Costs are proportionately low through the third quarter as some projects are still in the design phase or have experienced various delays or deferrals. Examples as of March 31 are the Sludge Dewatering and Odor Control for Plants 1 and 2, which has a combined FY16-17 cash flow budget of $41.9 million but actual costs of only $23.7 million and the Rehabilitation of Western Regional Sewers, which has a budget of$16.0 million but actual costs of only $3.8 million. Overall, the capital outlay costs of the capital improvement program are expected to approximate $144.7 million, or 79.5 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 and 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 March 31, 2017, as well as the debt service costs resulting from the need to provide funding for the construction of capital facilities. The majority of principal payments on debt issues are due in August during the first quarter, and in February during the third quarter of each fiscal year. Excluding payments on refunding debt from the Certificate of Participation, Series 2007A, and Revenue Refunding Certificate Anticipation Notes, Series 2014B, as of March 31, 2017, 100.0 percent of the principal payments have been made through the end of the third Section 1 - Page 9 FY 2016-17 Third Quarter Report quarter. Total principal payments, excluding refundings, 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 March 31, the Self-Insurance Fund revenues totaled $1.8 million or 75.1 percent of the budget, while expenses were $2.1 million or 85.4 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 March 31, 2017 $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $500 $500 $400 $300 $200 $100 $0 'uw Z8 � N j �eutlget �Aclual Collection, Treatment, & Disposal Expenses by Major Category Budget and Actual (in thousands) March 31,2017 $70,000 M'000 $00,000 $55,000 W'000 U5,000 $40,000 $35,000 $ '000 $25,Ooo $20,000 $15,000 $10,000 $5,000 $0 Eu o' 2 8 Meuaeac Nnmai Section 2-Page 1 2016-17 Third Quarter Report Divisional Contributions to Cost Per Million Gallons For the Nine Months Ended March 31,2017 2016-17 3131115 3/31116 Annual 3131117 Actual Actual Budget Actual Flow in Million Gallons 51,846.53 50,51269 67,525.00 51,544.07 Flow In Million Gallons per Day 189.22 183.68 185.00 188.12 Executive Management Department General Management Administration $ 2&53 $ 30.72 $ 46.27 $ 33.41 Board Services &22 7.44 9.38 8.08 Public Affairs 8.60 1&09 15.11 14.86 Subtotal 40.35 51.25 70.76 56.35 Human Resources Detainment Human Resources 55.10 56.43 58.04 50.33 Risk Management/Safety I Security 48.85 45.35 70.33 60.10 Subtotal 103.95 101.78 128.37 110.43 Administrative Services Department Administrative Services 9S5 8.65 8.75 7.36 Financial Management 44.50 47.50 50.51 42.21 Contracts,Purchasing,&Materials Mgmt. 62.15 62.97 61.74 61.91 Information Technology 151.12 148.83 154.39 139.12 Subtotal 267.42 267.95 275.39 250.60 Facilities Support Services Department Facilities Support Administration 10.57 16.86 - - Facilities Support 5.85 - - - Equipment Rebuild 17.96 - - - FleetSevices 29.38 31A6 - - Collections Engineering 40.10 40.00 - - NPDES Source Inspection 31.97 34.45 - - Odor and Corrosion Control 100.61 98.08 - - Collection Facilities 0&M 5736 56.85 Subtotal 294.20 277.40 Environmental Services Department Environmental Services Administration - - 12.41 11.86 Resource Protection - - 85.14 79.23 Laboratory&Ocean Monitoring 15376 150.62 Subtotal 251.31 241.71 Engineering Department Engineering Administration 9.89 7.17 5.91 6.45 Planning 42.94 50.28 48.61 48.48 Project Management Office 51.86 36.85 39.89 39.58 Civil and Mechanical Engineering 128.20 141.09 124.51 123.56 Electrical&Control System Engineering - - 68.29 61.08 Environmental Compliance 103.99 98.08 Subtotal 336.88 333.47 287.21 279.15 Operations&Maintenance Department Operations&Maintenance Administration 10.49 13.11 10.15 6.88 Collections Facilities O&M - - 190.21 167.47 Fleet Services - - 31.27 29.12 Plant No.l Operations 384.50 486.55 429.21 374.65 Plant No.2 Operations 294.43 301.91 301 304.97 Building,Grounds&Mechanical Maintenance 203.69 - - - Instrumentation&Electrical Maintenance 209.91 - - - PlantNo.lMaintenance - 233.22 240.67 228.67 Maintenance Reliability and Planning - - 59.03 23.11 Plant No.2 Maintenance - 167.78 168.14 171.25 Environmental Laboratory&Ocean Monitoring 116.10 120.18 Subtotal 1,219.12 1,321.75 1,438.48 1,306.12 Total Operating Expenses 2,261.92 2,353.60 2,451.52 2,244.36 Cost Allocation (23529) (28503) (284.52) (29311) Net Operating Requirements $ 2,02663 $ 2,068.57 $ 2,16700 $ 195125 Section 2-Page 2 Operating Budget Review Comparison of Expenses by Department For the Nine Months Ended March 31,2017 2016-17 3/31115 3/31/16 Year to Dale Budget% Department and Division Actual Actual Budget 3131/17 Realbed Executive Management Department General Management Administration $ 1,220,179 $ 1,551,933 $ 3.124,220 $ 1,721,995 55.12% Board Services 426,090 375,805 633,540 416,378 65.72% Public Affairs 445,732 661,151 1,020,100 766,109 75.10% Subtotal 2,092,001 2,588,889 4,777,860 2,904,482 60.79% Human Resources Department Human Resources 2,856,736 2.850,633 3.918,890 2,594,345 66.20% Risk Management l Safety/Security 2,532,910 2,290,593 4,749,050 3,097,847 65.23% Subtotal 5,389,646 5.141,226 8.667,940 5,692,192 65.67% Administrative Services Department Administrative Services 500,062 436,875 590,830 379,381 64.21% Financial Management 2,307,149 2,399,205 3,410,810 2,175,718 63.79% Contracts,Purchasing,&Materials Mgmt. 3,222,169 3,180,634 4,169,220 3,191,115 76,54% Information Technology 7,835,083 7.517,576 10.425,510 7,170.618 68.78% Subtotal 13,864,463 13,534,290 18,596,370 12,916,832 69.46% Facilities Support Services Department Facilities Support Administration 547,868 851,413 - - 0.00% Facilities Support 303,532 - - - 0,00% Equipment Rebuild 930,925 - - - 0.00% Fleet Services 1,523,297 1.573,934 - - 0.00% Collections Engineering 2,079,232 2,020,418 - - 0.00% NPDES Source Inspection 1,657,580 1,739,984 - - 0,00% Odor and Corosion Control 5,216,353 4,954,267 - - 0.00% Collection Facilities O&M 2,994,449 2,871,400 0.00% Subtotal 15.253,236 14,011,416 0.00% Environmental Services Department Environmental Services Administration - - 838,250 611,470 72.95% Resource Protection - - 5.748,920 4,083,835 71.04% Laboatorr&Ocean Monitoring 10,382,450 7,763,786 74.78% Subhund 16,969,620 12,459,091 73.42% Engineering Department Engineering Administration 512,848 362,398 399,390 332,514 83.26% Planning 2,226,241 2,539,623 3,282,440 2,499,012 76.13% Project Management Office 2,688,734 11861,190 2,693,360 2,040,356 75,76% Civil and Mechanical Engineering 6,646,5% 7.127,049 8.407,280 6,369,027 75.76% Electrical&Control System Engineering - - 4,610,980 3,148,377 68.28% Environmental Compliance 5,391,390 4,954,520 0.00% Subtotal 17,465.769 16.844,780 19,393,450 14,389,286 74,20% Operations&Maintenance Department Operations&Maintenance Administration 543,765 662,192 685,600 354,662 51,73% Collections Facilities 0&M - - 12,844,162 8,632,002 67.21% Fleet Services - - 2.111,320 1,501,172 71.10% Plant No.l Operations 19,934,%9 24,526,402 28,982,656 19,310,893 66.63% Plant No.2 Opemons 15,265,251 15,250,445 20,918,950 15,719,496 75.14% Building,Grounds&Mechanical Maintenance 10,560,783 - - - 0,00% Instrumentation&Electrical Maintenance 10,883,108 - - - 0.00% Plant No.1 Maintenance - 11.780,439 16,250,917 11,786,631 72.53% Maintenance Reliability and Planning - - 3,985,895 1,191,251 29.89% Plant No.2 Maintenance - 8,474,898 11,353,810 8,827,127 77.75% Environmental Laboratory,&Ocean Monitoring 6,019,195 6.071,382 0.00% Subtotal 63,207,089 66,765,758 97,133,310 67,323,234 69.31% Total Operating Expenses 117,272,204 118.886,359 165,538,550 115,685,117 69.88% Cost Allocation (12,198,701) (14.397,165) (19.182,030) (15,109,e85) 78P7% Net Operating Requirements $ 105,073,503 $ 104.489,194 $ 146.356,520 $ 100,575,232 68.72% Section 2-Page 3 2016-17 Third Quarter Report Summary of Collection, Treatment, &Disposal Expenses by Major Category For the Nine Months Ended March 31,2017 Expense Expense Increase Increase Percent Budget Through Through (Decrease) (Decrease) Budget Remaining Description 2016-17 3131117 3131116 $ % Realized Budget Salary&Wages $ 66,833,000 49,447,575 47,969,719 $ 1,477,856 3.08% 73.99% $ 17.385,425 Employee Benefits 22,456,800 17,145,625 20,601,768 (3,456,143) -16.78% 76.35% 5,311,175 Administrative Expenses 1,964,150 1,148.500 1,240,525 (92,025) -7.42% 58.47% 815,650 Printing&Publication 310,690 189,860 184,110 5,750 3.12% 61.11% 120,830 Training&Meetings 1,193,070 623,323 516,071 107,252 20.78% 52.25% 569,747 Operating Materials&Supplies 16,698,250 10,991,904 11,975,064 (983,160) -8.21% 65.83% 5,706,346 Contractual Services 25,138,420 17,320,602 16,694,008 626,594 3.75% 68.90% 7,817,818 Professional Services 4,275,830 2,228,015 2,097,059 130,956 6.24% 52.11% 2,047,815 Research&Monitoring 800,000 524,509 521,887 2,622 0.50% 65.56% 275,491 Repairs&Maintenance 14,220,930 9,524,542 9,989,533 (464,991) -4.65% 66.98% 4,696,388 Utilities 8,242,240 4,683.734 5,735,818 (1,052,084) -18.34% 56.83% 3,558,506 Other Materials,Supplies, and Services 3,405,170 1,856,928 1,360,797 496,131 36.46% 54.53% 1,548,242 Net Cast Allocation (19,182,030) (15,109,885) (14,397,165) (712,720) 4.95% 78.77% (4,072,145) Net Operating Requirements 146,356,520 100,575,232 104,489,194 (3,913,962) .3.75% 68.72% 45,781,288 Gallonage Flow(MG) 67,52&00 51,544.07 50,512.69 1,031.38 2.04% Gallonage Flow(MGD) 185.00 188.12 183.68 4.44 2.42% Gallonage Flow($'a/MG) $2,167000 $1,951.25 $2,068.57 ($117.32) -5.67% Section 2-Page 4 Operating Budget Review Summary of Revenues For the Nine Months Ended March 31, 2017 Revenue percent Revenue Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2016-17 3/31/17 Realized Budget 3131116 $ % Service Fees $286,554,000 $179,469,176 62.63% $107,084,824 $180,908,846 $ (1,439,670) -0.80% Permit Fees 11,272,000 9,576,8% 84.96% 1,695,102 8,325,182 1,251,716 1504% Inter District Sewer Use-SAWPA&SBSD 3,283,000 2,413,258 73.51% 869,742 2,404,756 8,502 0,35% Intra District Sewer Use-IRWD 3,737,690 (3,640,415) -97.40% 7,378,105 1,812,401 (5,452,816) -300.86% Sludge Disposal-IRWD 9,090,000 11,516,699 126.70% (2,426,699) 7,553,298 3,963,401 52.47% Capital Assessments-IRWD 4,402,000 1,709,692 38.84% 2,692,308 1,913,704 (204,012) -10A6% Capital Facilities Capacity Charges 13,500,000 8,097,989 59.99% 5,402,011 10,635,657 (2,537,668) -23.86% Debt Proceeds - 195.083,269 N/A (195,083,269) 174,868,588 20,214,681 11.56% Property Taxes 87,017,000 55,307,967 63,56% 31,709,033 52,841,724 2,466,243 4.67% Interest Earnings 8,606,000 1,543,527 17.94% 7,062,473 6,602,933 (5,059,406) -76.62% Wastehauler 750,000 716,662 95.55% 33,338 530,914 185,748 34.99% Grant Revenue - - NIA - 450,000 (450,000) -100.00% CNG Sales 400,000 331,711 82.93% 68,289 292,519 39,192 13.40% Rents&Leases 255,000 194,238 76A7% 60,762 192,079 2,159 1.12% Other 800,000 269,604 33.70% 530,396 776,669 (507,065) -65.29% Power Sales 20,000 37,555 187.78% (17,555) 17,703 19,852 112A4% Other Sales 35,000 48,875 139.64% (13,875) 38,512 10,363 26.91% Total Revenues $429,721,690 $462,676,705 107.67% $(32,955,015) $450,165,485 $ 12,511,220 278% Section 2-Page 5 2016-17 Third Quarter Report Summary of Collection,Treatment, &Disposal Expenses by Line Item For the Nine Months Ended March 31, 2017 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2016.17 3131117 Expensed Budget =1116 $ % Salaries.Wanes&Benefits Salaries&Wages $ 66,833,000 $ 49,447,575 73.99% $ 17,385,425 $ 47,969,719 $ 1,477,856 3.08% Employee Benefits Retirement 10,950,600 8,573,349 78.29% 2,377,251 12,189,137 (3,615,788) -29.66% Group Insurances 9,725,700 7,102,677 73.03% 2,623,023 6,875,339 227,338 3.31% Tuition&Certification Relmb 175,600 80,407 4579% 95,193 112,084 (31,657) -28.25% Edu.degraea,Cad.&Lic. 314.600 312,062 99.19% 2.538 243.756 68,305 28.02% Uniform Rental 53,200 87,655 164.77% (34,455) 38,548 49,107 127.39% Workers Compensation 1,196,300 897,226 75.00% 299,074 1,109,028 (211,802) -19.10% Unemployment insurance 2,900 14,048 484.41% (11,148) 2,424 11,624 479.54% EMT Supplemental Benefits 37.900 78,201 206.34% 140.301) 311472 46,729 148.48% Total Benefits 22,456,800 17,145,625 76.35% 5,311,175 20,601,768 (3,456,143) Salaries,Wages&Benefits 89,289,800 66,593,200 74.58% 22,696,600 68,571,487 (1,978,287) -2.88% Matl.Supply.&Services Administrative Expenses Memberships 596,050 483,474 81.11% 112,576 161,636 21,838 4.73% Office Exp-Supplies 61.370 45,523 74.18% 15.847 41.981 3,542 8."% Postage 41,040 27,969 68.15% 13,071 22,529 5,440 24.15% Books&Publications 50,970 25,754 50.53% 25,216 19,604 6,150 31.37% Fortes 1,300 - 0.00% 1.300 231 (231) -100.01 Small Computer Items 908,000 494,526 54.46% 413.474 590.491 (95,965) -16.25% Minor Furniture&Fixtures 305,420 71,254 23.33% 234,166 104,053 (32,799) Subtotal 1,964,150 1,148,500 58.47% 815,650 1,240,525 (92,025) .7.42% Printing&Publication Repro-In-House 243,690 141,396 53.02% 102,294 160,912 (19,516) -12.13% Printing-Outside 22,250 8,925 40.11% 13,325 6,314 2,611 41.35% Notions&Ads 44,700 39,539 88.45% 5,161 16,884 22,655 134.18% Photo Processing 50 0.00% 50 NIA Subtotal 310,690 189,860 61.11% 120,830 184,110 5,750 3.12% Training&Meetings Meetings 188.310 79,984 42.47% 108.326 100.945 (20,961) -20.76% Training 1,004,760 543,339 54.08% 461,421 415,126 128,213 30.89% Subtotal 1,193,070 623,323 52.25% 569747 516,071 107,252 20.78% Operating starts&Supplies Chemical Coagulants 5,126,550 3,827,411 74.66% 1,299,139 4,495,488 (668,0P) -14.81 Odor Control 8,157,300 5,144,367 63.06% 3,012,933 5,297,203 (152,836) .2.89% Disinfection 170,500 140,780 82.57% 29,720 142.950 (2,170) -1.52% Chemicals-Mist&Cogan 472.000 224,707 47.61% 247.293 217.914 6,793 3.12% Gasoline,Diesel&Oil 632,790 397,407 62.81% 235,303 410,007 (12,520) -3.05% Tools 691,950 219,384 31.71% 472,566 312,809 (93,425) -29.87% Safety equlpmenthools 587,560 442,313 75.28% 145,247 472.500 (30,187) -6.39% Sol,Paints&Jan.Supplies 82.390 60,178 73.04% 22.212 63,0m (2,846) 4.52% Lab Chemicals&Supplies 601,360 416,942 69.33% 184,418 437,413 (20,471) 4.68% Other Operating Supplies 171,850 117,304 68.26% 54,546 123,863 (6,659) -5.30% Property Tax Fees 4,000 1,031 25.78% 2,969 1,893 (862) 45.54% Subtotal 16,698,250 10,991,904 65.83% 5706.346 11,975,064 (983,160) Contractual Services Solids Remoyal 17,206,000 12,785,999 74.31% 4,420,001 13,224,276 (438,277) -3.31% Other Waste Disposal 886,400 609,058 6871% 277.342 608.228 830 0.14% Groundskesping 129,720 115,145 88.76% 14,575 103,959 11,186 10.76% Janitorial 345,700 269,678 77.98% 76,122 333,643 (S4,065) -19.20% Outside Lab Services 275,000 86,156 31.33% 188,844 114,304 (28,148) -24.63% Oxygen 406.000 252,460 62.18% 153,540 295.124 (42,664) -14.46% County Service Fee 671,700 45,213 6.73% 626,487 38,869 6,344 16.32% Temporary Services 814,400 454,756 55.84% 359,644 308,375 146,381 47.47% Security Services 1,330,000 828,882 62.32% 501,118 305,200 523,682 171.59% Other 3,073,500 1,873,355 60.95% 1,200,145 1,362,030 511,325 37.54% Subtotal 25,138,420 17,320,602 68.90% 7,817,818 16,694,008 626,594 3.75% (Continued) Section 2-Page 6 Operating Budget Review Summary of Expenses by Line Item For the Nine Months Ended March 31,2017 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 20111 Y31117 Expensed Budget 3131116 $ % Continued: Prohssional Services Legal 1,363,500 877,711 64.37% 485,789 1,012,062 (134,351) -1&27% Audit&Accounting 270,700 72,056 26.62% 19&644 99,908 (27,852) -27.88% Engineering 743,000 359,471 48.38% 383,529 184,279 175,192 95.07% Enviro Scientific Consulting 125,000 35,674 28.54% 89,326 47,531 (11,057) -24.95% Software PMm Consulting 370,000 286,540 77.44% 83,460 187,429 99,111 52.88% Advocacy Eltods 176,000 122,620 69.67% 53,3W 129,475 (6,855) -5.29% Industrial Hygiene Services 50,000 45,494 90.99% 4,506 115,480 (69,986) -60.60% Labor Negotiation Services 80,000 56,350 70.44% 23,650 - 56,350 N/A Other 1,097,6W 372,099 33S0% 725,631 320,895 51,204 15S6% Subtotal 4,275,830 2,228,015 52.11% 2,047,815 2,097,059 130,956 6.24% Research&Monitoring Environmental Monitoring 305,000 221,5T7 72.65% 83,423 209,980 11,597 5S2% Air Quality Monitoring 95,000 2,932 3.09% 92,068 11,907 (8,975) -75.38% Research 400,000 3001000 75.00% 10010W 300,000 0.00% Subtotal 800,000 524,509 65.56% 275,491 521,887 2,622 0.50% Repairs&Maintenance Materials&Services 11.408,670 7,666,335 68.95% 3,542,335 8.295,480 (428,145) -5.17% Svc.Mtc Agreements 2,812,260 1,650,207 58.96% 1,154,053 1,694,053 (35,846) -2.12% Subtotal 14,220,930 9,524,542 88.98% 4,696,388 9,989,533 (464,991) 4.65% Utilities Telephone 400,000 236,305 59.08% 163,695 265,994 (29,669) -11.16% Diesel For Generators 18,240 4,750 2&G4% 13,490 6,986 (2,236) -32.01% Natural Gas 519,000 404,302 77.90% 114,698 349,467 54,835 15.69% Pmver 6,654,000 3,606,859 54.21% 3,047,141 4.656,516 (1,D49,657) -22.54% Water 651,000 431,518 66.29% 219,482 456,855 (25,337) -5.55% Subtotal 8,242,240 4,683,734 56.83% 3,558,506 5,736,818 (1,052,084) -%U% Other Operating Supplies Outside Equip Rental 139,600 63,779 45.69% 75,821 12,837 50,942 396.84% Insurance Premiums 32,000 31,049 97.03% 951 31,386 (337) -1.07% Prop&Gen Liab Insurance 1,111,100 833,328 75.00% 277,772 371,997 461,331 124.01% Freight 70,030 53,001 75.68% 17,029 60,072 (7,071) -11.77% Misc.Operating Expense 207,310 136,754 65.97% 70,556 159,867 (23,113) -14.46% Regulatory Operating Fees 716,900 696,808 97.33% 19,092 693,160 3,648 0.53% Subtotal 2,275,940 1,814,719 79.73% 461,221 1,329,319 485,400 36.51% General Mgr Contingency &Reappropriaeons 1,015,700 0.00% 1,015,700 N/A Other Non-Oper Expense Others 113,530 42,208 37.18% 71,321 31,478 10,731 34.09% Subtotal 113,530 42,209 37.18% 71,321 31,478 10,731 34.09% Total Materials, Supplies&Services 76,248,750 49,091,917 64.38% 27,156,833 5Q314,872 (1,222,955) -2.43% Total Expenditures 165,538,550 116,685,117 69S8% 49,863,433 118,886,359 (3,201,242) -2S9% Cost Allocation (19,182,030) (15,109,885) 7877% (4,072,145) (14,397,165) (712,720) 4S6% Net Operating Requirements $ 146.356,520 $ 100,575,232 68.72% $ 45781,288 $ 104,489,194 $ (3,913,962) -3.75% Section 2-Page 7 2016-17 Third Quarter Report Summary of Collection, Treatment,8 Disposal Expenses by Process For the Nine Months Ended March 31,2017 Increase Increase Actual Actual (Decrease) (Decrease) 3/31/17 3/31/16 $ % Process: Preliminary Treatment $ 5,974,349 $ 6,674,036 $ (699,687) -10.48% Primary Treatment 7,561,814 9,205,661 (1,643,848) -17.86% Secondary Treatment 5,783,659 5,725,918 57,740 1.01% Cryogenic Plant(Plant 2) 483,506 544,922 (61,416) -11.27% Ef0uent Disposal 463,598 742,103 (278,505) -37.53% Solids Handling 33,382,002 34,610,347 (1,228,345) -3.55% Cogeneration 9,586,630 12,203,558 (2,616,928) -21.44% Utilities 2,182,329 2,050,225 132,104 6.44% Electrical Distribution 1,024,199 1,608,264 (584,066) -36.32% Miscellaneous Buildings 6,750,270 6,606,730 143,540 2.17% External Location 32,237 72,967 (40,729) 55.82% Nedssa Vessel 162,216 175,521 (13,305) -7.58% North County Yard 2,084 39,879 (37,795) -94.78% Laboratory 11,317,241 9,114,751 2,202,490 24.16% Collections 15,869,098 15,116,374 752,724 4.98% Net Operating Requirements $ 100,575,232 $ 104,491,257 $ (3,916,025) -3.75% Section 2-Page 8 Operating Budget Review Staffing Trends Full Time Equivalents March 31, 2017 700 650 626 624 624 624 627 600 38 44 52 50 550 :1 500 450 6/30/13 6130114 6/30/15 6130/16 3/31/17 8Actua1 8Va.a t At March 31, 2017, the total head count was 591 employees, or a full time equivalency of 577. Section 2-Page 9 2016-17 Third Quarter Report This Page Intentionally Left Blank Section 2- Page 10 CIP Budget Review Capital Improvement Program By Type and Funding Source For the Nine Months Ended March 31,2017 MCollectlons Facilities: 313% eHeadearks: 05% ePdmaryTreahnenC 2.9% oSecondary Treatment 0.1% MSolids Handling&Olgestion: 30.1% 00.n Outbll Sysems: 6.9% Glttllity Systeme: 1.3% MPmoess Related Special Projects: 10 Mlnbrmatlon Management Systems. 1]% MStrategic&Master Planning: 2.9% Ill Management Projects: 0.3% MResearnh: 01% OSuppod Faaltlies: 15.2% Mothers: 0.0% MPdor Year Treatment Projects: 02% MCapital Equipment Purchases: 15% Total Capital Improvement Outlays-$101,039,226 Replacement/Rehabilitation: 41% #1 Improved Treatment: 15% ❑Additional Capacity: 30% ■Support: 14% Total Capital Improvement Outlays -$101,039,226 Section 3- Page 1 FY 2016-17 Third Quarter Report Summary of Capital Improvement Construction Requirements - Current Year For the Nine Months Ended March 31, 2017 2016-17 2016-17 2016.17 Cashflow Actual at Projected Budget 3/31/2017 Outlay Collection System Improvement Proiects Collections Facilities Santa Ana Trunk Sewer Rehab. $ 74,119 $ 18,914 $ 41,900 Raitt and Bristol Street Sewer Rehab& Extension 204,379 - 196,600 Santa Ana River Interceptor(SARI) Realignment 562,271 64,651 73,300 SARI Rock Stabilizers Removal 312,927 (23,686) 242,500 Newhope-Placentia Trunk Grade Separation Replacements 934,520 9,889 37,300 Newhope-Placentia Trunk Replacement 7,181,679 13,056,756 16,3B4,800 Newhope-Placentia Trunk Replacement, Segment B 13,762,266 2,594,018 2,594,100 Lakeview Grade Separation Project 154,706 784 80,200 Tustin Rose OCTA Grade Separation Project 71,317 134,901 135,000 Seal Beach Pumping Station Upgrade and Rehabilitation 5,964,626 947,120 3,042,400 Rehabilitation of Western Regional Sewers 16,018,059 3,764,275 7,137,300 Doig Drive Building Improvements - - 173,600 Newport Force Main Rehabilitation 5,903,015 1,387,403 1,387,500 Bay Bridge Pumping Station Replacement - 143,560 143,600 District 6 Trunk Sewer Relief 4,623,818 319,446 979,800 Southwest Costa Mesa Trunk 876,199 199,105 199,200 Gisler-Redhill System Improvements, Reach "B" 11,951,892 8,399,875 11,209,200 Gisler Red-Hill Interceptor Rehabilitation 102,511 - 46,700 Master Facilities Engineering Projects-Collections 1,429,603 222,147 1,194,400 Master Planning Studies-Collections 2,748,262 171,022 171,100 Bay Bridge Pump Station and Force Mains Rehab Study 361,019 92,961 93,000 Additional Charges to CIP Closed at 6/30/16 44,652 44,700 Subtotal-Collections Facilities 73,237,188 31,547,793 45,608,200 Revenue Area 14 Newport Force Main Rehabilitation (2.18%) 131,554 30,919 31,000 Subtotal -Revenue Area 14 131,554 30,919 31,000 Total Collection System Improvement Projects 73,368,742 31,578,712 45,639,200 (Confined) Section 3-Page 2 CIP Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Nine Months Ended March 31, 2017 2016-17 2016-17 2016.17 Cashflow Actual at Projected Budget 3/31/2017 Outlay Treatment&Disposal Projects Headworks Headworks Rehabilitation and Expansion at Plant 1 6,705,388 2,915,996 5,855,000 Truck Line Odor Control Improvements P1 3,244,621 1,448,506 1,448,600 Headworks Modifications at P2 for GWRS Final Expansion 139,894 168,100 Subtotal -Headworks 9,950,009 4,504,396 7,471,700 Primary Treatment Primary Clarifier&Trickling Filter Odor Control at P1 95,767 - 58,700 Plant No. 1 Primary Treatment Upgrades 293,871 207,399 207,400 Primary Clarifiers Repl & Impr at Plant No. 1 - 463,607 463,700 A-Side Primary Clarifiers Repl.at P2 1,684,096 2,233,178 3,650,300 Subtotal-Primary Treatment 2,073,734 2,904,184 4,380,100 Secondary Treatment Return Activated Sludge Piping Replacement Plant No.1 - 19,397 24,600 Activated Sludge Aeration Basin Deck Repair at P2 295,085 107,492 107,500 Oxygen Plant Demolition at Plant No. 2 428,585 20,304 36,700 Subtotal-Secondary Treatment 723,670 147,193 168,800 Solids Handling& Digestion Digester Rehabilitation at Plant 1 4,754,023 5,760,338 5,978,300 Sludge Dewatedng and Odor Control at Plant 1 18,460,389 9,980,163 12,043,300 Solids Thickening and Processing Upgrades 4,208,003 1,035,123 1,035,200 Sludge Dewatering and Odor Control at Plant 2 23,463,706 13,676,460 19,863,800 Subtotal-Solids Handling &Digestion 50,886,121 30,452,084 38,920,600 Ocean Outfall Systems Final Ef0uent Sampler and Building Area Upgrades 5,602,416 4,478,642 4,862,900 Ocean Outfall System Rehabilitation 4,648,804 2,312,252 4,136,400 Interplant Effluent Pipeline Rehabiliation 192,329 192,400 Subtotal-Ocean Oulfall Systems 10,251,220 6,983,223 9,191,700 Utility Systems Cengen Cooling Water System Replacement - 9,547 9,700 Cengen Emissions Control Project 692,372 272,122 272,200 Digester Gas Facilities Rehabilitation 332,017 92,997 93,000 Natural Gas Pipelines Repl at Plant No. 1 and 2 33,573 20,360 85,400 Plant Water System Rehabilitation at Plant No. 1 11,645 420 500 Plant Water System Rehabilitation at Plant No. 2 1,884 4,084 4,100 Consolidated Demolition&Utility Improvements at P2 1,081,187 873,939 1,088,000 Plant Air System Master Plan 45,061 (42) (100) Subtotal-Utility Systems 2,197,739 1,273,427 1,552,800 (Confined) Section 3-Page 3 FY 2016-17 Third Quarter Report Summary of Capital Improvement Construction Requirements - Current Year For the Nine Months Ended March 31, 2017 2016-17 2016-17 2016-17 Cashflow Actual at Projected Budget 3/3112 01 7 Outlay Process Related Special Projects Safety Improvements at Plants Nos. 1 and 2 704,960 625,616 2,624,300 Odor Control Master Plan 585,791 420,403 626,000 Subtotal -Process Related Special Projects 1,290,751 1,046,019 3,250,300 Information Management Systems Programmable Control Panel Upgrade 74,645 25,178 62,200 Project Management Information System - 571 137,500 Power Monitoring &Control Systems at P2 2,590,934 651,010 1,977,300 Master Information Technology Capital Program 502,307 486,725 486,800 Geographic Information System 616,445 403,459 433,500 EAM Software and Process Implementation 471,467 52,005 77,100 PD82D Software Replacement 98,061 10,000 30,000 Process Control System Upgrades Study 1,348,089 43,099 222,600 Subtotal-Information Management Systems 5,701,948 1,672,047 3,427,000 Strategic& Master Planning Master Planning Studies 3,363,060 2,953,955 5,872,100 Climate Change Impact Study 1,126 1,200 Subtotal-Strategic&Master Planning 3,363,060 2,955,081 5,873,300 Water Management Projects Effluent Reuse Study 1,104,241 341,418 341,500 Subtotal -Water Management Projects 1,104,241 341,418 341,500 Research Research Program 1,149,080 40,874 77,000 Fuel Cell Demo 16,644 12,984 13,000 SCCWRP Nutrient Cycling Sampling 42,659 23,750 23,800 AquaCrilox Evaluation/Design 255,469 57,736 131,900 Subtotal-Research 1,463,852 135,344 245,700 Support Facilities Master Facilities Engineering Projects- Plant 11,042,558 3,768,230 5,070,700 Pl Fleet Services UST Leak Remediation 1,693,273 60,171 60,200 Master Small Capital Replacement/Rehabilitation 1,711,019 28,649 491,800 Title 24 Access Compliance&Building Rehab Project 3,816,143 696,591 2,128,100 Headquarters Complex, Site& Security&Entrance Realign. 5,951,410 158,664 1,909,700 Site and Security Improvements at Plant No.2 12,797 5,030 5,100 Property Purchase 15475 Pacific St& 18484 Bandilier Cir 10,635,682 10,634,339 10,634,400 Subtotal-Support Facilities 34,862,882 15,351,674 20,300,000 (Continued) Section 3-Page 4 CIP Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Nine Months Ended March 31, 2017 2016-17 2016-17 2016-17 Cashflow Actual at Projected Budget 313 112 01 7 Outlay Others Capital Improvement Program Mgmt. Services 24,326 37,772 37,800 Subtotal-Others 24,326 37,772 37,800 Additional Charges to CIP Completed at 6130116 182,962 183,000 Total Treatment and Disposal Projects 123,893,553 67,986,824 95,344,300 Capital Equipment Purchases 3,682,780 1,473,690 3,682,800 Total Collection,Treatment and Disposal Projects and Capital Equipment Purchases 200,945,075 101,039,226 144,666,300 Less: CIP Savings and Deferrals (19,032,000) Net Collection,Treatment and Disposal Projects and Capital Equipment Purchases $181,913,075 $101,039,226 $144,666,300 Section 3-Page 5 FY 2016-17 Third Quarter Report Summary of Capital Improvement Construction Requirements- Project Life For the Nine Months Ended March 31,2017 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Collection System Improvement Projects Collections Facilities Santa Ana Trunk Sewer Rehab. 6,974,000 6,686,800 41,900 6,728,700 245,300 Raiff and Bristol Street Sewer Rehab&Extension 13,622,000 259,075 196,600 455,675 13,166,325 Santa Ana River Interceptor(SARI)Realignment 11,404,000 5,592,473 73,300 5,665,773 5,738,227 SARI Rock Stabilizers Removal 4,046,000 265,733 242,500 508,233 3,537,767 Taft Branch Sewer Relief 1,928,000 12,083 - 12,083 1,915,917 Newhope-Placentia Trunk Grade Separation Replacements 5,739,000 4,045,695 37,300 4,082,995 1,656,005 Newhope-Placentia Trunk Replacement 34,708,000 9,737,373 16,384,800 26,122,173 8,585,827 Newhope-Placentia Trunk Replacement,Segment 66,667,000 26,909 2,594,100 2,621,009 64,045,991 Yoffie Linda Pumping Station Abandonment 7,053,000 - - - 7,053,000 Lakeview Grade Separation Project 330,000 68,892 80,200 149,092 180,908 Tustin Rose OCTA Grade Separation Project 586,000 283,638 135,000 418,638 167,362 Beach Tmnk/Knott Interceptor Sewer Relief 118,678,000 - - - 118,678,000 Seal Beach Pumping Station Upgrade and Rehabilitation 60,840,000 2,073,689 3,042,400 5,116,089 55,723,911 Rehabilitation of Western Regional Sewers 217,069,000 2,518,370 7,137,300 9,655,670 207,413,330 Doig Drive Building Improvements 2,436,000 - 173,600 173,600 2,262,400 Newport Force Main Rehabilitation 62,604,800 56,646,974 1,387,500 58,034,474 4,570,326 Crystal Cove Pumping Station Rehabilitation 10,882,000 - - - 10,882,000 Bay Bntlge Pumping Station Replacement 54,000,000 - 143,600 143,600 53,856,400 Newport Beach Pump Stations Odor Control Improvements 4,066,000 - - - 4,066,000 District 6 Trunk Sewer Relief 7,965,000 1,421,400 979,800 2,401,200 5,563,800 Southwest Costa Mesa Trunk 29,650,000 1,747,830 199,200 1,947,030 27,702,970 Gisler-Redhill System Improvements,Reach"B" 25,213,000 6,299,980 11,209,200 17,509,180 7,703,820 Browning Subtrunk Sewer Relief 16,952,000 - - - 16,952,000 MacArthur Pumping Station Rehabilitation 8,762,000 - - - 8,762,000 Main Street Pump Station Rehabilitation 39,219,000 - - - 39,219,000 Gisler Red-Hill Interceptor Rehabilitation 5,486,000 - 46,700 46,700 5,439,300 Edinger/Bolsa Chiw Trunk Improvements 5,159,000 - - - 5,159,000 Edinger Pumping Station Rehabilitation 8,880,000 - - - 8,880,000 Slater Avenue Pump Station Rehabilitation 9,729,000 - - - 9,729,000 Master Facilities Engineering Projects-Collections 12,192,000 1,199,298 1,194,400 2,393,698 9,798,302 Master Planning Studies-Collections 10,636,304 402,264 171,100 573,364 10,062,940 Bay Bridge Pump Station and Force Mains Rehab Study 725,000 341,878 93,000 434,878 290,122 Additional Charges to CIP Closed at 6130116 44,700 4g700 (44,700) Subtotal-Collections Facilities 864,201,104 99,630,3M 45,608,200 145,238,554 718,962,550 Revenue Area 14: Newport Force Main Rehabilitation(2.18%) 1,395,200 1,262,425 31,000 1,293,425 101,775 Subtotal-Revenue Area 14 1,395,200 1,262,425 31,000 1,293,425 101,775 Total Collection System Improvement Projects 865,596,304 100,892,779 45,639,200 146,531,979 719,064,325 (Continued) Section 3-Page 6 CIP Budget Review Summary of Capital Improvement Construction Requirements- Project Life For the Nine Months Ended March 31,2017 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Treatment&Disposal Projects Headworks Headworks Rehabilitation and Expansion at Plant 1 274,841,000 2,433,404 5,855,000 8,288,404 266,552,596 Truck Line Odor Control Improvements P1 9,299,000 7,359,325 1,448,600 8,807,925 491,075 Headworks Modifications at P2 for GWRS Final Expansion 50,000,000 168,100 168,100 49,831,900 Subtotal-Headworks 334,140,000 9,792,729 7,471,700 17,264,429 316,875,571 Primary Treatment Primary Clarifier&Trickling Filter Odor Control at Pi 94,228,000 - 58,700 58,700 94,169,300 Plant No.1 Primary Treatment Upgrades 9,146,000 8,118,861 207,400 8,326,261 819,739 Primary Clarifiers Repl&Impr at Plant No.1 158,332,000 - 463,700 463,700 157,868,300 A-Side Primary Clarifiers Repl.at P2 428,264,000 978,734 3,650,300 4,629,034 423,634,966 Interim Food Waste Receiving Facility 5,400,000 5,400,000 Subtotal-Primary Treatment 695,370,000 9,097,595 4,380,100 13,477,695 681,892,305 Secondary Treatment Return Activated Sludge Piping Replacement Plant No.1 3,300,000 - 24,600 24,600 3,275,400 Activated Sludge Aeration Basin Deck Repair at P2 2,331,000 55,798 107,500 163,298 2,167,702 Oxygen Plant Demolition at Plant No.2 3,444,000 2,816.671 36,700 2,853,371 590,629 Subtotal-Secondary Treatment 9,075,000 2,872.469 168,800 3,041,269 6,033,731 Solids Handling&Digestion Digester Rehabilitation at Plant 1 67,150,000 57,765,401 5,978,300 63,743,701 3,406,299 Sludge Dewatering and Odor Control at Plant l 188,328,000 152,105,764 12,043,300 164,149,064 24,178,936 Solids Thickening and Processing Upgrades 51,150,000 46,778,286 1,035,200 47,813,486 3,336,514 Plant No.2 Digester Facilifies Rehabilitation 49,220,000 152,343 - 152,343 49,067,657 Sludge Dewatering and Odor Control at Plant 2 90,477,000 25,961,621 19,863,800 45,825,421 44,651,579 Subtotal-Solids Handling&Digestion 446,325,000 282,763,415 38,920,600 321,684,015 124,640,985 Ocean Oulfall Systems Final Effluent Sampler and Building Area Upgrades 16,411,000 11,079,895 4,862,900 15,942,795 468,205 Ocean Outfall System Rehabilitafion 91,000,000 3,043,856 4,136,400 7,180,256 83,819,744 Interplant Effluent Pipeline Rehabiliation 25,200,000 192,400 192,400 25,007,600 Subtotal-Ocean Ouffall Systems 132,611,000 14,123,751 9,191,700 23,315,451 109,295,549 Utility Systems Cengen Cooling Water System Replacement 11,477,000 11,374,655 9,700 11,384,355 92,645 Cengen Emissions Control Project 23,820,000 21,945,471 272,200 22,217,671 1,602,329 UPS System Upgrades 8,087,000 - - - 8,087,000 Digester Gas Facilities Rehabilitation 87,897,000 9,458 93,000 102,458 87,794,542 Natural Gas Pipelines Repl at Plant No.1 and 2 1,310,000 2,282 85,400 87,682 1,222,318 Electrical Power Distribution System Improvements 34,608,000 - - - 34,608,000 Plant Water System Rehabilitation at Plant No.1 6,157,000 6,113,517 500 6,114,017 42,983 (Confined) Section 3-Page 7 FY 2016-17 Third Quarter Report Summary of Capital Improvement Construction Requirements- Project Life For the Nine Months Ended March 31,2017 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Utility Systems(continued) Central Generation Rehab at Plant No. 1 73,151,000 - - - 73,151,000 Plant Water System Rehabilita0on at Plant No.2 3,704,000 3,737,750 4,100 3,741,850 (37,850) Consolidated Demolition&UOlity Improvements at P2 38,460,000 3,205,873 1,088,000 4,293,873 34,166,127 Central Generation Rehab at Plant No.2 95,906,000 - - - 95,906,000 Plant Air System Master Plan 225,000 187,096 (100) 186,996 38,004 Subtotal-Utility Systems 384,802,000 46,576,102 1,552,800 48,128,902 336,673,098 Process Related Special Projects Safety Improvements at Plants Nos.l and 2 11,202,000 202,858 2,624,300 2,827,158 8,374,842 Odor Control Master Plan 1,950,000 1,233,922 626,000 1,859,922 90,078 Subtotal-Process Related Special Projects 13,152,000 1,436.780 3,250,300 4,687,080 8,464,920 Information Management Systems Process Control Systems Upgrades 102,399,000 - - - 102,399,000 Programmable Control Panel Upgrade 2,283,000 1,785,807 62,200 1,848,007 434,993 Project Management Information System 4,000,000 - 137,500 137,500 3,862,500 Power Monitoring&Control Systems at P2 34,123,000 604,790 1,977,300 2,582,090 31,540,910 Master Information Technology Capital Program 10,000,000 - 486,800 486,800 9,513,200 Geographic Information System 4,568,000 1,947,390 433,500 2,380,890 2,187,110 EAM Software and Process Implementation 7,500,000 4,700,097 77,100 4,777,197 2,722,803 PDS2D Software Replacement 525,000 342,351 30,000 372,351 152,649 Process Control System Upgrades Study 3,554,000 222,600 222,600 3,331,400 Subtotal-Information Management Systems 168,952,000 9,380,435 3,427,000 12,807,435 156.144,565 Strategic&Master Planning Master Planning Studies 13,015,696 1,190,605 5,872,100 7,062,705 5,952,991 Climate Change Impact Study 590,000 1,200 1,200 588,800 Subtotal-Strategic&Master Planning 13,605,696 1,190,605 5,873,300 7,063,905 6,541,791 Water Management Projects Effluent Reuse Study 3,250,000 2,529,365 341,500 2,870,865 379,135 Subtotal-Water Management Projects 3,250,000 2,529.365 341,500 2,870,865 379,135 Research Research Program 8,500,000 - 77,000 77,000 8,423,000 Fuel Cell Demo 135,000 118,192 13,000 131,192 3,808 SCCWRP Nutrient Cycling Sampling 95,000 71,250 23,800 95,050 (50) AquaCrilox Evaluatron/Design 588,000 402,510 131,900 534,410 53,590 Subtotal-Research 9,318,000 591,952 245,700 837,652 8,480,348 (Continued) Section 3-Page 8 CIP Budget Review Summary of Capital Improvement Construction Requirements- Project Life For the Nine Months Ended March 31, 2017 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Support Facilities Master Facilities Engineering Projects-Plant 28,373,000 7,756,133 5,070,700 12,826,833 15,546,167 P1 Fleet Services UST Leak Remediation 14,952,000 99,904 60,200 160,104 14,791,896 Master Small Capital ReplacementlRehabilitation 15,622,000 2,065,761 491,800 2,557,561 13,064,439 Title 24 Access Compliance&Building Rehab Project 17,509,000 12,967,931 2,128,100 15,096,031 2,412,969 Headquarters Complex,Site&Security&Entrance Realign. 179,067,000 169,006 1,909,700 2,078,706 176,988,294 Site and Security Improvements at Plant No.2 252,000 227,660 5,100 232,760 19,240 Property Purchase 18475 Pacific St&18484 Bandilier Cir 10,635,682 10.634,400 10,634,400 1,282 Subtotal-Support Facilities 266,410,682 23,286,395 20,300,000 43,586,395 222,824,287 Others Banning Gale Relocation&Grading at Plant No.2 2,812,000 - - - 2,812,000 Capital Improvement Progrem Mgml.Services 300,000 9,591 37,800 47,391 252,609 Subtotal-Others 3,112,000 9,591 37,800 47,391 3.064,609 Additional Charges to CIP Completed at M0116 183,000 183,000 (183,000) Total Treatment and Disposal Projects 2,480,123,378 403.651,184 95,344,300 498,995,484 1,981,127,894 Capital Equipment Purchases 16,000,000 7,083,097 3,682,800 10,765,897 5,234,103 Total Collection,Treatment and Disposal Projects and Capital Equipment Purchases $3,361,719,682 $511,627,060 $144,666.300 $656,293,360 $2,705,426,322 Section 3-Page 9 FY 2016-17 Third Quarter Report This Page Intentionally Left Blank Section 3- Page 10 Capital Assets Schedule & Debt Service Budget Review Capital Assets Schedule For the Nine Months Ended March 31, 2017 Capital Facilities Budget Review Balance Year-to-Dats Balance 07/O1116 Additions 3M1117 CONSTRUCTION IN PROGRESS: Treatment Plant $ 405,065,130 $ 69,460,514 $ 474,525,644 Collection System 94,310,929 31,578,712 125,889,641 Subtotal 499,376,059 101,039,226 600,415,285 PROPERTY,PLANT&EQUIPMENT(at cost): Land and Property Rights 15,959,559 - 15,959,559 Collection Lines and Pump Stations 781,138,758 - 781,138,758 Treatment Facilities 2,278,136,004 - 2,278,136,004 Effluent disposal facilities 97,014,820 - 97,014,820 Solids disposal facilities 3,463,236 - 3,463,236 General and administrative facilities 229,446,444 - 229,446,444 Excess purchase price over book value on acquired assets 19,979,000 19,979,000 Subtotal 3,425,137,821 3,425,137,821 Total Property,Plant&Equipment&CIP $ 3,924,513,880 $ 101,039,226 $ 4,025,553,106 Debt Service Budget Review 2016-17 Year-to-Date Remaining Budget Payments %of Budget Budget Principal Payments by Debt Issue: 2007A COP 265,000 91,885,000 34673.58% (91,620,000) 2007E COP 7,110,000 7,110,000 100.00% - 2008B COP 8,815,000 8,815,000 100.00% - 2009A COP 4,250,000 4,250,000 100.00% - 2010ABABs - - 0.00% - 2010CBABs - - 0.00% - 2011ACOP 15,135,000 15,135,000 100.00% - 2012ACOP - - 0.00% - 2012BCOP - - 0.00% - 2014ACOP - - 0.00% - 2014B CANS 7,827,411 120,850,000 1543.93% (113,022,589) 2015A COP - - 0.00% - 2016ACOP - - 0.00% - 2016B CANs - - 0.00% - 2017A COP 0.00% Subtotal Principal Payments 43,402,411 248,045,000 571.50% (204,642,589) Interest Expense by Debt Issue: 2007A COP 4,108,278 2,396,478 58.33% 1,711,800 2007E COP 355,500 207,400 58.34% 148,100 2008E COP 132,225 22,025 16.66% 110,200 2009A COP 585,250 417,650 71.36% 167,600 2010A BABs 2,897,639 2,495,917 86.14% 401,722 2010C BABs 6,523,780 5,619,457 86.14% 904,323 2011ACOP 4,774,725 3,360,325 70.38% 1,414,400 2012A COP 3,735,900 2,802,000 75.00% 933,900 2012E COP 3,187,400 2,390,500 75.00% 796,900 2014A COP 4,254,500 3,190,900 75.00% 1,063,600 2014E CANS 496,694 1,624,711 327.11% (1,128,017) 2015A COP 6,375,500 4,781,600 75.00% 1,593,900 2016A COP 5,833,798 5,237,798 89.78% 596,000 2016E CANs - 1,201,349 N/A (1,201,349) 2017A COP 984,147 N/A (984,147) Subtotal Interest Expense 43,261,189 36,732,257 84,91% 6,524,528 Total Debt Service $ 86,663,600 $ 284,777,257 328.60% $ (198,118,061) Section 4- Page 1 2016-17 Third Quarter Report This Page Intentionally Left Blank Section 4 - Page 2 Self Insurance Budget Review General Liability and Property Fund Budget Review For the Nine Months Ended March 31,2017 Percent Actual of Budget Remaining Actual 2016-17 Through Through 2016-17 Through Increase Budget 3131117 3131117 Budget 3/31116 (Decrease) Revenues: In-Lieu Premiums $ 1,111,100 $ 833,328 75.00% $ 277,772 $ 371,997 $ 461,331 Miscellaneous Other Revenue - 8,865 N/A - 16,369 (7,504) Service Department Allocations 18,700 14,022 74.98% 4,678 4,122 9,900 Total Revenues 1,129,800 856,215 75.78% 282,450 392,488 463,727 Expenses: Benefits/Claims 40,000 671,865 1679.66% (631,865) 16,133 655,732 Legal Services 130,000 77,032 59.26% 52,968 105,453 (28,421) Professional Services 25,976 N/A (25,976) 25,976 Subtotal 170,000 774,873 455.81% (604,873) 121,586 653,287 Policy Premium Expense 1,220,000 878,290 71.99% 341,710 870,393 7,897 Total Expenses 1,390,000 1,653,163 118.93% (263,163) 991,979 661,184 Excess Revenue(Expense) (260,200) (796,948) $ 545,613 (599,491) (197,457) Beginning Reserves 55,260,200 55,252,299 56,125,511 (873,212) Ending Reserves $55A00,000 $54,455,351 $ 55,526.020 $(1,070,669) Section 5-Page 1 FY 2016-17 Third Quarter Report Workers' Compensation Fund Budget Review For the Nine Months Ended March 31,2017 Percent Actual of Budget Remaining Actual 2016-17 Through Through 2016-17 Through Increase Budget 3/31/17 3/31/17 Budget 3131116 (Decrease) Revenues: In-Lieu Premiums $ 1,196,300 $ 897,225 75.00% $ 299,075 $ 1,109,025 $ (211,800) Miscellaneous Other Revenue 10,000 - 0.00% 10,000 10,280 (10,280) Total Revenues 1,206,300 897,225 74.38% 309,075 1,119,305 (222,080) Expenses: Benefits/Claims 660,000 236,299 35.80% 423,701 506,851 (270,552) Legal Services 170,000 29,361 17.27% 140,639 151,028 (121,667) Professional Services 60,000 50,307 83.85% 9,693 46,403 3,904 Subtotal 890,000 315,967 35.50% 574,033 704,282 (388,315) Policy Premium Expense 200,000 148,421 74.21% 51,579 145,754 2,667 Total Expenses 1,090,000 464,388 42.60% 625,612 850,036 (385,648) Excess Revenue(Expense) 116,300 432,837 $ (316,5371 269,269 163,568 Beginning Reserves 1,883,700 1,913,178 1,523,264 389,914 Ending Reserves $ 2,000,000 _L 2.346015 $ 1.792,533 $ 553,482 Section 5-Page 2 'e? Op April 30, 2017 STAFF REPORT Quarterly Treasurer's Report For the Three Months Ended March 31, 2017 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, is attached for reference. Also attached are Long-Term and Liquid Operating Monies Summary of Performance Data and Portfolio Statistics charts that depict the performance results, estimated yield and duration, credit quality, and sector diversification of the District's portfolios, as of March 31, 2017. The Liquid Operating Monies portfolio, with an average maturity of 58 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 January 1 through March 1, 2017. ODSD ♦ P.0.Box8127 ♦ Foun in Velley,C 9272M127 ♦ (714)%2-2411 Quarterly Treasurer's Report For the Three Months Ended March 31, 2017 Page 2 of 3 Portfolio Performance Summary Quarter Ended March 31,2017 Liquid Operating Monies(h) Long-Term Operating Monies(%) Total Rate of Total Rate of Realm Eanchmark(u Return Benchmadc"' 3 Months 0.14 0.10 0.52 0.47 6 Months 0.27 0.19 -0.33 -0.59 9 Months 0.37 0.28 -0.27 -0.65 12 Months 0.46 0.36 0.45 0.21 Annualized Since inception 30 Nov M14 0.37 0.21 1.12 1.08 Market Value 85.2M $318.21A Average Quality 'AAA"fAee" "AA"/"Aa1" Current Yield(%) 1.0 1.7 Estimated Yield to Maturity(%) 0.7 1.6 Quarterly Deposits Wilhdmwals 28.010 0.0M Estimated!Annual Income O.BM .2M (1) Benchmarks: • Liquid Operating Portfolio: 3-Month Treasury Bill Index • Long-Tenn Operating Portfolio: Merrill Lynch Corp/Govt. 1-5 Year Bond Index Portfolio Market Values Comparative marked-to-market quarter-end portfolio values are shown in the following table, and in the attached bar chart. Liquid Long-Term Quarter Operating Operating Ending Monies($M) Monies($M) 30 Jun.16 139.4 332.7 30 Sep.16 58.0 325.9 31 Dec.16 113.0 316.6 31 Mar.17 85.2 318.2 District's Investment Account Balances as of March 31,2017 Book Balances Estimated Investment Accounts March 31,2017 Yield(%) State of Calif.LAIF $15,172,201 0.82 Union Bank Checking Account 62,076 0.00 Union Bank Overnight Sweep Account 510,000 0.01 Union Bank W/C Checking 79,415 0.00 Chandler-Short-term Portfolio 84,963,348 0.73 Chandler-Long-term Portfolio 317,383,956 1.55 Petty Cash 3,000 N/A BNY Mellon OCIP Reserve 3.611.270 0.87 TOTAL $421]8.5 2RR 1.35 Debt Service Reserves w/Trustees 5 04Z 43 0.38 Quarterly Treasurer's Report For the Three Months Ended March 31, 2017 Page 3 of 3 District's Cost of Funds on Debt Issues as of March 31,2017 Annual Cost of Funds Outstanding Interest Issue Description COP Balance Rate(%) 2009A Fixed $9,155,000 4.72 2010A Fixed 80,000,000 3.68 2010C Fixed 157,000,000 4.11 2011A Fixed 96,330,000 2.61 2012A Fixed 100,645,000 3.54 2012B Fixed 66,395,000 1.50 2014A Fixed 85,090,000 2.34 2015A Fixed 127,510,000 3.30 2016A Fixed 145,880,000 3.02 2016B Fixed 109,875,000 0.87 2017A Fixed 66.370.000 2.55 TOTAL $1.044.250.000 Weighted Avg.Cost of Foods 2.89 ATTACHMENTS 1. Chandler Quarterly Report 2. Summary of Performance Data and Portfolio Statistics — Liquid Operating Monies 3. Summary of Performance Data and Portfolio Statistics— L-T Operating Monies 4. Investment Transactions and Balances in LAIF 5. Asset Summary by Asset Type — Liquid Operating Portfolio 6. Asset Summary by Asset Type— Long Term Portfolio 7. Asset Summary by Asset Type — Owner Controlled Insurance Program Escrow Account 8. Investment Listing (Yield Analysis Report) 9. Asset Detail — Consolidated 10. Custody Transaction History—Consolidated 11. Callan Quarterly Review 12. Chandler Quarterly Review 13. Rating Agency Comparisons C/" CHANDLER ASSET MANAGEMENT March 31, 2017 Mr. Mike White, CPA Controller Orange County Sanitation District 10844 Ellis Avenue Fountain Valley CA 92708-7018 Dear Mike, Bond Market Recap The Federal Open Market Committee (FOMC) left the target federal funds rate unchanged at the first meeting of this year but raised the target federal funds rate in March by 25 basis points to a range of 0.75%-1.00%. The March rate hike was the FOMC's third rate hike since the 2008 financial crisis when the fed funds target rate reached a historical low range of 0.00%-0.25% (the other two 25 basis point rate hikes were in December 2015 and December 2016). There was one dissenting vote at the March meeting from Minneapolis Fed President Neel Kashkari who preferred no rate hike. The Fed noted that economic activity has expanded at a moderate pace, labor market gains remain solid, and inflation is moving close to the Fed's 2.0% target. The Fed is still projecting a 1.4%fed funds rate by the end of this year, which implies two more 25 basis point hikes. The FOMC's long-run fed funds rate projection was also unchanged at 3.0%. The FOMC did not make any decisions about their balance sheet reinvestment plans at the March meeting and will continue that discussion during future meetings. The minutes from the March FOMC meeting indicate that the Fed is contemplating a change to their balance sheet reinvestment program sometime later this year. At least one FOMC member has suggested that the process of reducing the size of the Fed's balance sheet could take around 5 years. It is likely that the Fed would move more slowly with rate hikes once they begin changing their reinvestment program. Market participants estimate the economy grew at an annualized pace of about 1.8% in the first quarter, following growth of 2.1% in the fourth quarter. Labor market trends continued to improve in the first quarter, and the economy is now likely at or near full employment. The unemployment rate declined to 4.5% in March, down from 4.7% in December. Wage growth increased during the first quarter, and payrolls increased by an average of 178,000 per month (more than enough to absorb new entrants into the labor market). Consumer confidence remained strong during the first quarter and housing trends remained favorable. Furthermore, manufacturing indicators improved during the first quarter. Inflation indices increased during the first quarter. This was driven in part by the year-over-year increase in energy prices. Recall that crude oil prices bottomed in February 2016 around $26/barrel, but hovered around $50/barrel during the first quarter of this year. The Personal Consumption Expenditures (PCE) index was up 2.1% year-over-year in February and Core PCE (excluding food and energy)was up 1.8% C/" CHANDLER ASSET MANAGEMENT year-over-year in February. Overall, core inflation seems to be approaching the Fed's 2.0% target. During the first quarter, the yield curve flattened, following a dramatic post-election curve steepener. In the past three months, the 2-year Treasury yield is up about 7 basis points and the 10-year Treasury yield is down about 6 basis points. Notably, shorter-term yields (1-year and under) increased more than 20 basis points during that time period. On a year-over-year basis the 2-year Treasury yield has increased 53 basis points and 10-year Treasury yield is up about 62 basis points. At the end of 2016, following the US Presidential election, US Treasury yields increased meaningfully driven by heightened expectations for fiscal stimulus and growth under the Trump administration and Republican-controlled Congress. Some of the post-election exuberance regarding fiscal spending, tax reform, and healthcare reform has started to wane, as market participants begin to sense the timeline and magnitude of such policies may be delayed or potentially less robust than previously hoped. Corporate credit spreads, or the additional compensation investors receive for purchasing non- US treasury securities, tightened during the first quarter, based on the Bank of America Merrill Lynch US Corporate Index. Consumer Prices The Consumer Price Index (CPI) was up 2.7% year-over-year in February, versus up 2.5% year-over-year in January. Core CPI (CPI less food and energy)was up 2.2% year-over-year in February, versus up 2.3% year-over-year in January. The Personal Consumption Expenditures (PCE) index was up 2.1% year-over-year in February, versus up 1.9% year-over-year in January. Core PCE (excluding food and energy) was up 1.8% year-over-year in February, versus up 1.7% year-over-year in January. CPI is already trending above 2.0%, and the Fed's primary inflation gauge (PCE) is approaching the Fed's 2.0% target. Retail Sales On a year-over-year basis, total retail sales were up 5.7% in February compared with a 6.0% increase in January. On a month-over-month basis, retail sales were up 0.1% in February, following a 0.6% increase in January. Excluding autos and gas, retail sales increased 0.2% in February, following a 1.2% gain in January. On average, retail sales trends were solid in the first two months of the year. 2 GAL CHANDLER ASSET MANAGEMENT Labor Market Nonfarm payrolls were significantly lower than expected in March, up 98,000 versus the consensus forecast of 175,000. January and February payrolls were revised down by 38,000. On a trailing 3-month and 6-month basis, payrolls increased by an average of 178,000 and 163,000 per month, respectively. The unemployment rate fell to 4.5% in March from 4.7% in February. The participation rate was unchanged at 63.0%. A broader measure of unemployment called the U-6, which includes those who are marginally attached to the labor force and employed part time for economic reasons, decreased to 8.9% in March from 9.2% in February. Wage growth rose 0.2% in March, versus expectations for a 0.3% increase. This follows an upwardly revised gain of 0.3% in February (previously 0.2%). On a year-over-year basis, wages were up 2.7% in March, vs. 2.8% in February. Housing Starts Total housing starts rose 3.0% in February, following a 1.9% decrease in January. Single-family starts rose 6.5% in February, but multi-family starts declined 3.7%. On a year-over-year basis, total housing starts were up 6.2% in February. 3 CHANDLER ASSET MANAGEMENT TREASURYYIELDS 3/3112017 12131/2016 CHANGE 3 Month 0.75 0.50 0.25 2 Year 1.26 1.19 0.07 3 Year 1.49 1.45 0.04 S Year 1.92 1.93 (0.01) 7 Year 2.21 2.25 (0.04) 10 Year 2.39 2.45 (0.06) 30 Year 3.01 3.07 (0.06) Economic Data Points to Continued Slow Growth ECONOMIC INDICATOR Current Release Prior Release One Year Ago Trade Balance (43.6)$Bln FEB 17 (48.2)$Bln JAN 17 (45.6)SBIn FEB 16 GDP 2.1%DEC 16 3.5%SEP 16 0.9%DEC 15 Unemployment Rate 4.5%MAR 17 4.7%FEB 17 5.0%MAR 16 Prime Rate 4.00%MAR 17 3.75%FEB 17 3.5%MAR 16 CRB Index 185.88 MAR 17 190.62 FEB 17 170.52 MAR 16 Oil(West Texas Int.) $50.60 MAR 17 $54.01 FEB 17 $38.34 MAR 16 Consumer Price Index(y/o/y) 2.7%FEB 17 2.5%JAN 17 1.0%FEB 16 Producer Price Index(y/o/y) 3.7%FEB 17 3.0%JAN 17 (2.0%)FEB 16 Dollar/Euro 1.07 MAR 17 1.06 FEB 17 1.14 MAR 16 Swrce.B)oomberg 4 C/" CHANDLER ASSET MANAGEMENT Performance Attribution Long-Term Portfolio The long-term portfolio generated both a positive absolute and relative return during the quarter. The quarterly return for the District's portfolio was 0.52% versus 0.47% for the Bank of America Merrill Lynch 1-5 Year AAA-A US Corporate and Government Index. Several factors contributed to the modest outperformance during the quarter, both from the sector positioning and the maturity distribution standpoint. On the sector side, the overweight to the Supranational and Agency sectors, relative to the benchmark, were additive to results. The maturity distribution of the portfolio, with overweight exposure in the short and longer ends of the spectrum, also contributed to the positive performance differentiation relative to the benchmark. The Chandler team added to exposure across the majority of the investable universe during the quarter. The Treasury, Agency, Supranational and Corporate additions to the portfolio were all close to the five year maturity point, offset by short maturity exposure in Asset Backed securities and Commercial Paper. Overall the portfolio has been avoiding maturities close to the two year point; in Chandler's judgement the pricing in the maturity segment is unattractive. The duration of the portfolio contracted moderately, currently 2.43 versus 2.48 at the end of the prior quarter. The team will be tactically extending the duration of the portfolio in the coming quarter as the Right to quality pricing in the Treasury market, pushing down yields, dissipates. Liquid Portfolio Similar to the long-term portfolio, the liquidity portfolio generated a positive absolute and relative return during the quarter. The District's liquidity portfolio returned 0.14% for the quarter, compared to the 0.10% returned of the Bank of America Merrill Lynch Three Month Treasury Bill Index. The portfolio experienced a $28 million outflow during the quarter. Many securities were purchased across the Treasury, Agency, Commercial Paper, and Corporate sectors of the market to offset upcoming liquidity needs first and secondarily to enhance to overall return potential of the portfolio via attractively valued longer maturity securities. 5 OIL CHANDLER ASSET MANAGEMENT Economic Outlook Risk markets have performed well since the US election, predicated partially on the belief by investor's tax reform will take place late in 2017 and fiscal stimulus in 2018. As the realities of the visceral political environment set-in for the new Presidential Administration, it is likely expectations of tax reform and fiscal spending will be moderated, potential leading to a pull-back in risk asset performance. The Treasury curve flattening experienced during Q1 seems to reflect the above reality, whereas the equity markets maintain a much more sanguine view specific to tax policy and fiscal spending. The Federal Reserve remains intent on continuing the process of 'normalizing' monetary policy and moving further away from the zero interest rate policy of the past several years. The Chandler team holds the view the Fed's forecast for interest rates is too optimistic, as the still very aggressive monetary policies being implemented abroad by both the European Central Bank and the Bank of Japan will put a ceiling on how high US rates can go before the corresponding increase in the dollar derails the domestic economic recovery. The Federal Reserve will be able to raise the Federal Funds rate, but not too the level consistent with the March 2017 Summary of Economic Projections. The Chandler team expects interest rates in general to drift higher over the coming months and will be looking to add spread product, predominately in the Corporate and Asset Backed sectors, to enhance the total return opportunity of the portfolio. Strategy Strategy highlights for the Long-Term Portfolio in coming months: • Continue to optimize the term structure of the portfolio via underweighting the one to three year maturity points and overweighting the shorter and longer maturity segments of the maturity distribution. o Keep the duration mismatch relative to the benchmark relatively tight. o Extend the overall duration of the portfolio when five year Treasury notes have a yield in excess of 2.00%. • Opportunistically increase the Corporate allocation of the portfolio, predominately in longer maturity securities, and add some CDs and other short-term credit instruments that offer attractive relative value. o Focus will be on sector diversification and relative value when adding longer maturity Corporate notes. o De-emphasize the Agency sector until spreads become more attractive. • Remain active in the new issue Asset Backed sector and keep a dedicated exposure between 7-10% of the total portfolio. 6 OIL CHANDLER ASSET MANAGEMENT Strategy highlights for the Liquidity Portfolio in coming months: • Continue to ladder the Agency discount note and Treasury exposure to correspond to upcoming liquidity needs. • Periodically add to the Corporate exposure of the portfolio with maturities between six months to one year, where the additional spread compensation versus the Treasury curve is compelling. • Maintain a dedicated exposure to the Treasury sector on an ongoing basis to ensure ample liquidity in the portfolio at all times. 7 C/" CHANDLER ASSET MANAGEMENT Compliance Issues Orange County Sanitation District Long Term OW March 31,2017 COMPLIANCE WITH INVESTMENT POLICY Assets managed by ChandlerAwethlanagementare in Tull compliance Win State missend say,the invesmnen(policy Caag., Standard Comment Treasury Issues 5ysammaximummaWdy Complies' Slpmretioml "AA"or better by 10 3 Ni 30%maximum; 5%max issuer, 5ram mal Complies Includes only, ADS,BRD and IFC per CGC U.S.Agenda. 20%max issuer; 5 ram maximum maturity Compiles U.S.Conomte(MI'll "A"or batter br,term rating by l of3 NRSRCa; 30%meximor,5%max issuer; 5 Were Complies max msMd Municipal Securities "A"or higher by l of3 NRSROS;10%madmorn; 5%maxissueq 5 ram maximum Compiles maNri Asset Backed/CMWillortgage- "AA"or better by l of 3 NRSROs 'A"or higher issuer tadng by 1 of3 NRSRCa; 20% Complies' backed nomeno. 5%maxAsian(excluding MBS/ odA agarl 5 ram max maWd Negolable Was "A"or better on its king tmlm debt by l of3 NRSR(ys; "AlMl"or Nghestalort term Complies ratings by 1 of 3 NRSROs; 30%maximum;5%max issuer; 5 years max mal CDSITDS 5%maxlaser, 5yearsmaxmatuly Compiles Barkers Acceptances A-1, requyident highest short son rating by l of 3 NRSROS; AO%maximxn; 5%men Compiles issuer 1N days max maturity Commercial Paper A-1,orequyak:nby1of3NRSR0S; 'A"orbetler by t of3 NRSROs,if keg teml debt Compiles isewd; 25%maximum; 5%maxissuer, 270da maxmaturi Mutual Fuld&MoreyMarket Highestratingby2NRSROs; 20%maximum;10%maxpermulualMM; 20%maxper Complies Mutual Fund rwre marketmutualNM Repurcleas Agpromme 102%w1tetemimtion Complies Raeeree Repurchase,A reements 5%rnaximun.90 days max maturity Complies IAIF Not used by investment adviser Complies Ayg Duarob NottoexceedaOmooffe, - 0%b120%of the beraMnark) Compiles Meximvn MaWdy 5ysetemeumvnmaWny Complies' 'The pM1hmb has WxMyder did)xerxi le vdlB malWllm gratErtMn 5 YQ891nnluEhg me(t)ABS,flt¢(5)Wits,9mandeen oln MBa and am(1)ananun, All eecuMimx mhe Wfom IMG msmanoraMwmplMMtime&Gumhase. 8 C/" CHANDLER ASSET MANAGEMENT Orange County Sanitation District Liquid OL March 31,2017 COMPLIANCE WITH INVESTMENT POLICY Assets managed by CbendlerAsset Management are in Tull compliance wth State lawand WM Me in,extmempolicy Category Standard Comment Treaserylsaues 1 War maximum mawriry. Minimum allocation of 10% Complies Suprersdonal 'AA'or befter by l of 3 NRSROs; 30%maximum; 5%max issuer, 1War Complies madetf, hdudes oH . ADS,BRD and lFC per CGC U.S.Agimles 20%max issuer; lyear mimmum mi Complies U.S.Corporate(MTNs) 'A'or hefted long term rating by l of 3 NRSRGs 30%maximum;5%max issuer, Complies 1 war newmatunty Meet Backed/CMGs 'AA'or bell by l of 3 NRSROs; 'N'or higher issuer pri by l of 3 NRSRCs; Complies 20%mavmum 5%max issuer 1 Warmax made Negotiable CDs 'A'or heft¢r on its long term debtby l of3 NRSRCs; 'A1IP1'or Nghestshon Complies term ratings by 1 of 3 NRSRO, 30%maxmun;5%mexissuer,l year max matunly CDSi 5%maxissuer,1 War maxme inry Complies Bankei's Acceptances A-1,orequiWientshod term ri by l of3 NRSROS;40%maximum:5%max Complies Issuer 180 days max meanly Commercial Paper A-1,orequiWient by 1 of 3 NRSROS;"A"orbefter by 1 of 3 NRSROs,if bng Complies term debt issued; 25%maxmum;5%max issuer'270 days max maturity Mulual Fad B Money Market MuGel Fad Highest mdrg by 2 NFri 20%mavmum;10%max per mi MrM; 20% Complies max ermore maiketmidslMM Repurchase AgreemeHs 102%ca11atensixab n Complies Pei Repi Agreements 5%maximum,90 days mi Complies LAF Not used byimeaMant admser Complies Prohibited Municipal Securities Complies Prohibited Mortgage Secundes Complies Aug DUredOn Nottoexceed180days; Maxdurodonofl"ar Complies Maximum Mai 11War maximum grei Complies 9 C/" CHANDLER ASSET MANAGEMENT CA OCSD Lehman Exposure March 31,2017 COMPLIANCE WITH INVESTMENT POLICY Assets managed by Chandler Asset Managementam in Poll compliance wM State lawand wth the mvestmentpolmy Category Standard Comment Treasury hsues 5yearsmadmummannrity Complies Suprenatiorel "AA"or better by 1 of 3 NRSR0s; 30%maximum; 5%real 5years maturity, Includes Complies ell AIDE,IBIRD,and FC par CGC U.S.Agencies 20%max issuer, 5 years maximum maturity Complies U.S.Corporate(Ml "Al or better long term mtiig by l of 3 NRSROs; 30%maximum;5%max issuer 5 Complies' ars max maturi Municipal Securities "Al or higher by l of3 NRSROS;10%maximum; 5%max issuer, 5 tears maximum Complies marthinty Asset Backed/Cyl "AA"or better by l of 3 NRS *A"or nigher issuer rating by l of 3 NRSROs; 20% Complies Mortgage-backed maximum; 5%max issuer(excluding MBS/goN agerl 5 years max mal Negotiable CDs "A"or better an its long term debt by l of 3 NRSR0s; "A11P1"or Nghest shortterm Complies ratings by 1of 3 NRSR0s730%max mums 5%max Issuers ars max mandrity CDaITDS 5%max issuer; 5 years max maturity Complies Banker's Acceptances A-1,or equivalent highest short term rating by l of 3 NRSROS; 40%maximum; 5% Complies max issuer;180 days max maturity Commercial Paper A-1,or equiyal lbyl of3 Ni A"or better by l of 3 NRSROs,iflong term debt Complies issued; 25%mavmum; 5%max issuer, 270 days max maturity It"I Fund!&Money Market Highest ral by2 NRSROs; 20%maximum;l0%maxpermutualfund; 20%dexper Complies lit" Furl stone marketmtaualftnd Repurchase A reements 102%crollaterelim0on Complies Reverse Repurchase 5%maximum,90 days max maturity Complies reemeras LAF Not wed b imeslawn"dNser complies rtieDuren NOtwexceed50 to oxh-she— 80% 120%ofthebenctmark Com lies Maxim in Matinry 5 years maximum maturity Complies 'Account-.1d.$2 million lace slue(cusi0535E6WV6)ard$600,000 Face.1.(cuaip 525Ea01 W)dnicufted LeM1man Bea I ldil that were pichai by IM preJouc menagar. comgiedidfinedpurchhh, 10 C/" CHANDLER ASSET MANAGEMENT Defaulted Bonds CAIIAOCOD....INmanEx916me Holdings Report cwuN p1028< A6 d3 1/17 m ssoNsMCR SLHOPNiM Nc/yen Pofllon .19 3 ll % m9E o n 000% 842 64 Dm% D➢0 pp21 mJ NP 00D Dw 3Ii1401] pep!6p MR Omm mRP..T1 535E WIBi m e W66m06 m% 34358]1 SD ABV% NR/NP 0.eVM1 0 17 313 11) N. Of0 12113 1v elalletl ].�i0mm 13 Ba00 mn00 1136391➢6 % ➢0 ]% NR/NP 12. Dm 10/L/3009 000% itiE�3910E DW% 000 D�313ss1% Nfl OW 21. S CopoAe 3pI�6IIII 1po,6Y191 1m ""%I- N iKPORIFOW 3¢V�6Nlxe 1�NB�4R.Il1 eI g1611]t.IWMR30.Y YNII1 R....ff. Tl] IT OIL CHANDLER ASSET MANAGEMENT Ratings Orange County Sanitation District Long Tetm Mamh 31,201] vs. Decern er 31,2016 M mmr mme W M A A M Y31117 103% 01% 10.9% 3A% BA% 1.111. 166% fi50% 103% 3.1% 4.0% Bry W Rrap Orange County Sanitation District Liquid March 31,2013 vs. December 31,2016 sa. ve— mug JM M A J R ]hurl .9% 157% u% 0.0% 0U% 193ms 70.1% m]% 31% 00% 00% v—v s aq. 12 C/" CHANDLER ASSET MANAGEMENT OCSD Investment Program Quarter End Portfolio Value $600,000.000 Liquid Operaling Monies $500,000,000 •Long-Term Opereting Monies $400,000,000 $300,000,000 $200,000.000 $100,000,000 �'� 4'� �.g �G��9 '0q.'Q �'9 y9.s �L7�s re4.�s ��S yV^.�S ✓4�J.�9 �Q�T ��B y�:�) HISTORICAL YIELD CURVE 4.00% MAR 2017 -: FEB 201] 3.00% - MAR 2016 _____________________________________________________ 3.01% 2.39% 2.00% ___________________ ____2?1qS__ ______ ____________________________ 1.92% 0.90% 1A9% 0.76% �f_/ 0.00% o h h 13 C/" Orange County Sanitation District Liquid Portfolio Summary Account#10282 As of 3/31/2017 PORTFOLIO CHARACTERISTICS ACCOUNTSUMMARY •• 01111110 Beg.Values End Values Issuer %Portfolio Average Duration 0.16 as of 2/28/17 as of 3131/17 Government of United States 46.9% Average Coupon 1.01 % Market Value 85.024,770 85,024,655 Federal Home Loan Bank 18.8 Average Purchase YTM 0.69% Accrued Interest 117,500 152,507 Federal National Mortgage Assoc 10.1 % Averse Market YTM 0.73% Total Market Value 85,142,270 85,177,162 9 Dreyfus Treasury Money Market F 4.4 Average S&P/Moody Rating AAA/Aaa Income Earned 45,303 42,549 Federal Home Loan Mortgage Corp 2.4% Average Final Maturity 0.16 yrs Cont/WD 0 Bank of Tokyo-MR UFJ 2.0 Average Life 0.06 ym Par 85,015,581 85,010,584 Intl Bank Recon and Development 1.4% Book Value 85,024,739 85,032,281 Toronto Dominion Holdings 1.4 Cost Value 85,042,875 85.021,444 87.3% • - - • • MATURITY DISTRIBUTION u5 BOW° 743% AAA us Treasury (79.9%) Corporate (459%) (10.4%) 60%, Negotiable Co Commercial (14%) 40% Paper (3.2%) supomational 209% (2 5%) 20% Money 0% lk A Market (4A%) Fund Agency % FI (31.2%) 0- 25 25- 5 51 1-15 152 2.25 as-3 31 (4.4%) Maturity(Y.) (15.7%) Total Rate of Return Current Latest Year Annualized Since As of 3/31/2017 Month 3 Months To Date 1 Yr 3 Yrs 5Yra 10 Yrs 11/30/2014 11/30/2014 Orange County Sanitation District Liquid 0.04% 0.14% 0.14% 0.46% N/A N/A N/A 0.37% 0.86% BAML 3-Month US Treasury Bill Index 0.02% 0.10% 0.10% 0.36% N/A N/A N/A 0.21 % 0.48% Chandler Ansel Management-CONFIDENTIAL Page 1 Execution Time:N02017 8:58:02 PM C/" Orange County Sanitation District Long Term Portfolio Summary Account#10268 As of 3/31/2017 PORTFOLIO CHARACTERISTICS ACCOUNTSUMMARY •• Millis Beg.Values End Values Issuer %Portfolio Average Duration 2.43 as of 2/28/17 as of 3131/17 Government of United States 29.7 Average Coupon 1.70% Market Value 316,830,995 317,222,451 Federal National Mortgage Assoc 10.1 % Average Purchase YTM 1.62% Accrued Interest 1,191,796 1,000,829 Federal Home Loan Bank 8.0 Averse Market YTM 1.55% Total Market Value 318,022,791 318,223,280 9 Federal Home Loan Mortgage Corp 7.7 Average S&P/Moody Rating AA/Aal Income Earned 415,268 428,540 Inter-American Dev Bank 3.6 Average Final Maturity 2.80 yrs COntAVD 612 John Deere ASS 2.6% Average Life 2.51 yrs Par 316,038,433 316,751,389 Intemational Finance Corp 2.3 Book Value 315,966,322 316,645,629 Bank of Tokyo-Mit UFJ 2.0% I Cost Value 317.286,963 317.994,586 68 1 Y • - • • MATURITY DISTRIBUTION Mortgage 25% 2I.e% AA Pass OS us Treasury corporate (297%) 2096 19.5°/ Commercial 15'1 Paper 15% 129% 13.4% Municipal Supranational I fonds (75%) lots .1% BBB Money - (3.4%) Market 5% 3.5% 4.3% NR CMO (0-9%) Agency (6.8%) (24.6%) % ABS o-15 ss-s 5-1 1-3 2-3 s-a 4-5 s. AAA A (74%) Maturity yrs) (133%) �(1o.9%) is - Total Rate of Return Current Latest Year Annualized Since As of 3/31/2017 Month 3 Months To Date 1 Yr 3 Yrs 5 Yrs 10 Yrs 11/30/2014 11/30/2014 Orange County Sanitation District Long Tenn 0.06% 0.52% 0.52% 0.45% N/A N/A N/A 1.12% 2.64% BAML 1-5 Yr US Corporate/Govt Rated AAA-A Index 0.06% 0.47% 0.47% 0.21 % N/A N/A N/A 1.08% 2.54% BAML US 15 Yr US Corp/Gout Rated AAA-BBB Index 0.07% 0.56% 0.56% 0.56% N/A N/A N/A 1.22% 2.87% Chandler Asset Menagement-CONFIDENTIAL Page 1 Execution Time:N32017 8:55:25 PM Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund March 31, 2017 Par Value Book Value Market Value Rate Yield Balance March 1, 2017 $19,672,201 $19,672,201 $19,672,201 0.82 0.82 Deposits: 3/9/2017 15,800,000.00 15,800,000.00 15,800,000.00 0.82 0.82 Total Deposits 15,800,000.00 15,800,000.00 15,800,000.00 0.82 0.82 Quarterly Interest Distribution 0.82 0.82 Withdrawals: 3/1/2017 (2,400,000) (2,400,000) (2,400,000) 0.82 0.82 3/2/2017 (2,100,000) (2,100,000) (2,100,000) 0.82 0.82 3/15/2017 (1,800,000) (1,800,000) (1,800,000) 0.82 0.82 311 612 01 7 (2,500,000) (2,500,000) (2,500,000) 0.82 0.82 3/2 312 01 7 (7,000,000) (7,000,000) (7,000,000) 0.82 0.82 3/29/2017 (2,800,000) (2,800,000) (2,800,000) 0.82 0.82 3/30/2017 (1,700,000) (1,700,000) (1,700,000) 0.82 0.82 Total Withdrawals (20,300,000) (20,300,000) (20,300,000) 0.82 0.82 Balance March 31,2017 $15,172,201 $15,172,201 $15,172,201 0.82 0.82 Report ID: GL8251 Asset Summary Beat Cunene,: UBD i BNY MELLON by Asset Type with Sectors Alternate ease Current,: Exchange Rate; OCS LTQ OF CHANDLER-OCSF07511102 $ 31 2G 1.7 Status: PRELIMINARY Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base CASH&CASH EQUIVALENTS U.B.DOLLAR CERTIFICATES OF DEPOSIT-U.S. 1,150,000.000 1,149,964.14 1,149,964.14 1.35% 0.00 COMMERCIAL PAPER-DISCOUNT 2,705,000.000 2,694,871.33 2,694,871.33 3.16% 0.00 FEDERAL HOME LOAN BANK- 1 YR OR LESS 16,000,000.000 15,976,599.18 15,976,599.18 18.76% 0.00 FNMA ISSUES- t YR OR LESS 4,000,000.000 3,993,990.50 3,993,990.50 4,69% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 3,753,584.000 3,753,584.00 3,753,584.00 4.41% 0.00 U.S.TREASURY BILLS- 1 YR OR LESS 40,000,000.000 39,926,413.75 39,926,413.75 46.87% 0.00 INTEREST 217,086.17 217,086.17 0.25% 0.00 U.S.DOLLAR 67,608,584.000 67,712,509.07 67,712,509.07 79.49% 0.00 CASH&CASH EQUIVALENTS 67,608,584.000 67,712,509.07 67,712,509.07 79.49% O.00 FIXED INCOME SECURITIES U.S.DOLLAR BANKING&FINANCE 3,740,000.000 3,751,038.75 3,741,126.60 4.39% -9,912.15 CAPITAL GOODS 1,000,000.000 1,033,650.00 1,025,330.00 1.20% -8,320.00 INSURANCE 1,000,000.000 1,001,760.00 1,000,210.00 1.17% -1,550.00 OIL&GAS 1,000,000.000 1,000,780.00 1,000,340.00 1.17% -440.00 SUPRANATIONAL ISSUES 2,162,000.000 2,164,147.42 2,161,763.80 2.54% -2,383.62 TECHNOLOGY 2,000,000.000 2,002,460.00 1,999,790.00 2.35% -2,670.00 US AGENCIES 6,500,000.000 6,572,185.00 6,539,365.00 7.68% -32,820.00 U.S. DOLLAR 17,402,000.000 17,526,021.17 17,467,925.40 20.51% .58,095.77 FIXED INCOME SECURITIES 17,402,000.000 17,526,021.17 17,467,925.40 20.51% -58,095.77 TOTAL ASSETS-BASE: 85,010,584.000 85,238,530.24 85,180,434.47 300.00% -58,095.77 41612017 8:17.-53PM EDT 1 Workbench Asset Summary Repeft ID: GL8251 Base Curtenry: Can BNY MELLON by Asset Type with Sectors Alteesa[e Base Currency: Exchange Rate: OCS LONG CHANDLER-0CSF07S22202 3 31 201.7 Status: PRELIMINARY Net Unrealized Cost Market Value % of Gain/Loss Description shares Per Base Base Total Base CASH&CASH EQUIVALENTS U.S.DOLLAR CASH EQUIVALENTS 60,641.490 93,294.59 25,621.03 0.01% -67,673.56 COMMERCIAL PAPER-DISCOUNT 12,645,000.000 12,571,626.30 12,571,626.30 3.95% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 2,783,IW780 2,783,196.78 2,783,196.78 0.87% 0.00 PENDMG TRADES 23.99 23.99 0.00% 0.00 INTEREST 1,034,310.62 1,034,310.62 0.32% 0.00 U.S.DOLLAR 15,488,838.270 16,482,452.28 16,414,77S.72 5.16% -67,673.56 CASH&CASH EQUIVALENTS 15,488,838.270 16,482,452.28 16,414,778.72 5.16% .67,673.56 FL4ED INCOME SECURITIES U.S.DOLLAR ADS-CAR LOANS 11,006,490.660 11,005,658.06 10,998,270.27 3.45% -7,387.79 Ass-CREDIT CARDS 4,140,000.000 4,139,643.13 4,136,605.20 1.30% -3,037.93 ASS-EQUIPMENT 8,252,709.850 8,252,817.78 8,243,993.15 2.59% -8,824.63 ABS-HOMEEQUNY 133,743.290 100,432.85 126,237.62 0.04% 25,804.77 ABS-SMALL BUSINESS ADMINISTRATION 62,182.380 62,182.38 65,821.91 0.02% 3,639.53 ABS-STUDENT LOANS 34,564.350 34,424.12 35,254.60 0.01% 830.48 BANXWG&FINANCE 41,870,000.000 42,751,475.06 40,286,944.60 12.65% -2,464,530.46 CAPITAL GOODS 5,000,000.000 5,014,950.00 5,054,000.00 1.59% 39,050.00 FHLMC MULTICLASS 1,893,286.310 2,070,845.71 2,098,655.75 0.66% 27,810.04 FHLMC POOLS 2,3&1.340 2,282.94 2,433.33 0.00% 150.39 FNMA POOLS 1,509,732.160 1,575,415.69 1,625,755.96 0.51% 50,340.27 FNMA REMIC 316,679.570 316,561.36 321,021.85 0.10% 4,460.49 GNMA MULTI FAMILY POOLS 230,335.150 230,403.22 238,561.47 0,07% 8,158.25 GNMA REMIC 28,937.040 28,937.04 29,073.91 0.01% 136.87 HEALTH CARE 4,000,000.000 4,009,675.00 4,027,920.00 1.26% 18,245.00 OIL&GAS 9,500,000.000 9,476,387.40 9,479,875.00 2.98% 3,487.60 SUPRANATIONAL ISSUES 24,000,000.000 24,059,735.00 23,889,895.00 7.50% -169,840.00 TAXABLE MUNICIPALS 4,240,000.000 4,307,633.89 4,600,846.00 1.44% 293,212A1 TECHNOLOGY 14,045,000.000 14,095,700.55 13,991,659.35 4.39% -104,041.20 U.S.TIPS 10,634,208.000 10,516,923.89 10,534,990.84 3,31% 18,066.95 US AGENCIES 78,365,000.000 78,147,661.40 77,989,501.85 24.49% -158,159.55 41612017 8:18:34PM EDT 1 Workbench Asset Summary Repeft ID: GL825I Base Currenry: USD BNY MELLON by Asset Type with Sectors Alteesa[e Base Currency: Exchange Rate: OCS LONG CNANDLBR-OCSF07522202 3 31 2017 Status: PRELIMINARY Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base US GOVERNMENTS 84,300,000.000 83,638,633.57 83,868,150.00 26.34% 229,516.43 WHOLE LOAN-CMO-COLLATERALIZED MTG OBLIG 357,959.001 357,946.27 358,019.85 0.11% 73.58 U.S. DOLLAR 303,923,192.101 304,196,326.31 302,003,487.51 94.84% -2,192,838.80 FIRED INCOME SECURITIES 303,923,192.101 304,196,326.31 302,003,487.51 94.84% -2,192,838.80 TOTAL ASSETS-BASE: 319,412,030.371 320,678,778.59 318,418,266.23 100.00% .2,260,512.36 41612017 8:18:34PM EDT 2 Workbench Asset Summary RePnrt ID: GL8251 Base Cunenry: Van BNY MELLON by Asset Type with Sectors Alteenate Ease Cwrene : Exchange Rate: ESCROW ACCOUNT-OCS"7555502 $ 31 2017 Status: PRELIMINARY Net Unrealized Cost Market Value % of Gain/Loss Description shares Par Base Base Total Base CASH&CASH EQUWALENTS U.B.DOLLAR INTEREST 14,486.64 14,486.64 0.40% 0.00 PUKED INCOME SECURITIES U.S.DOLLAR US GOVERNMENTS 3,587,000.000 3,599,330.31 3,587,286.96 99.60% -12,043.35 TOTAL ASSETS-BASE: 3,587,000.000 3,613,816.95 3,601,773.60 I00.00% -12,033.35 41612017 8:18:58PM EDT 1 Workbench Yield Analysis Report ID: RAM234 Base Currency: BNY MELLON OCSF07511102 3/31/2017 Liquid Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmuut Receivables - 0.00 SUMRECV 217,086 AGENCY 5,000,000.00 FEDERAL HOME LN BK CONS DISC 0.67 Aaa 99.94 4,993,475 8.67 0.07 313385EXO 04/28/2017 4,993,475 5.86 4,000,000.00 FEDERAL NATL MTG ASSN DISC 0.69 Aaa 99.95 3,993,991 6.94 0.08 313589FA6 05/01/2017 3,993,991 4.69 2,000,000.00 FEDERAL HOME LN BK CONS DISC 0.69 Aaa 99.93 1,996,792 3.47 0.09 313385FE1 05/05/2017 1,996,792 2.34 9,000,000.00 FEDERAL HOME LN BK CONS DISC N 0.74 Aaa 99.85 8,986,333 15.61 0.19 313385GR1 06/09/2017 8,986,333 10.55 CERTIFICATES OF DEPOSIT 1,150,000.00 TORONTO-DOMINIONNYINSTLC/D 0.89 1,15 Aal 100.02 1,149,964 2.00 0.09 89113E7K6 1.150%05/03/2017 DD 05/05/l6 1,149,964 1.35 COMMERCLU,PAPER 1,705,000.00 BANKTOKYO-MITSUB DISC 1.12 1.12 P-t 99.60 1,698,182 2.95 0.35 06538BU76 07/07/2017 1,698,182 L99 OTHER 3,753,584.00 DREYFUS TREAS&AGY CSH CSH MG - Aaa 3,753,584 6.52 0.08 996085247 VAR RT 12/31/2049 DID 04/09/97 3,753,584 4.41 TREASURIES AND AGENCIES O 1,000,000.00 TOYOTA MTR CR CP DISC 6.06 P-1 99.67 996,689 1.73 0.05 89233GRL2 04/20/2017 996,689 1.17 41612017 8:32:37PM EDT 1 Source:The Bouck fNew York Mel/an Communion Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07511102 3/31/2017 Liquid Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Rice Market Value %Market Adj Yield Rating Value Duration TREASURY 15,000,000.00 U S TREASURY BILL 0.62 Aaa 99.99 14,972,000 26.01 0.06 912796KC5 0.000%04/20/2017 DD 10/20/16 14,972,000 17.58 15,000,000.00 U S TREASURY BILL 0.75 Aaa 99.85 14,962,819 25.99 0.27 912796LG2 0.000%07/06/2017 DD 01/05/17 14,962,819 17.57 TOTAL:CASH Is TEMPORARY 0.81 0.06 57,503,828 100.00 0.15 67,720,924 FIXED INCOME AGENCIES&OTHER GOVT GEL 2,000,000.00 FEDERAL HOME LN MTG CORP 0.87 1.00 Aaa 100.03 2,000,880 7.25 0.24 3137EADH9 1.000%06/29/2017 DD 05/14/12 2,000,620 2.35 4,500,000.00 FEDERAL NATL MTG ASSN 0.99 5.33 Aaa 100.86 4,571,305 16.44 0.20 31398ADM1 5.375%06/12/2017 DD 06/08/07 4,538,745 5.33 BARKS&FINANCE 1,000,000.00 WELLS FARGO&CO L39 2.10 A2 100.07 1,008,550 3.62 0.10 94974BFD7 2.100%05/08/2017 DD 05/07/12 1,000,720 1.17 1,000,000.00 BERESHIRE HATHAWAY FINANCE COR 1.42 1.60 Aa2 100.02 1,001,760 3.62 0.12 084664BS9 1.600%05/15/2017 DD 05/15/12 1,000,210 1.17 740,000.00 US BANCORP 1.57 1.65 Al 100.01 740,929 2.68 0.12 91159HHD5 1.650%05/15/2017 DD 05/08/12 740,067 0.87 INDUSTRIALS 1,000,000.00 APPLE INC 0.97 1.05 Ael 100.01 1,002,590 3.62 0.10 037833AM2 1.050%05/05/2017 DD 05/06/14 1,000,050 1.17 41612017 8:32:37PM EDT 2 Sourc Ma B¢Nc. fNew York M,Ou Corporadou Yield Analysis Report ID: RAM234 Base Currency: BED BNY MELLON OCSF07511102 3/31/2017 Liquid Oper Unit.Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 1,000,000.00 JOHN DEERE CAPITAL CORP L17 1.13 A2 99.99 1,000,420 3.62 0.20 24422ESN0 1.125%06/12/2017 DO 06/12/14 999,900 IA7 1,000,000.00 ORACLE CORP 1.25 1.20 Al 99.97 999,870 3.62 0.53 68389XAN5 1.200%10/15/2017 DD 10/25/12 999,740 1.17 1,000,000.00 CHEVRON CORP 1.29 1.34 As2 100.03 1,000,780 3.62 0.60 166764BC3 1.344%11/09/2017 DD 11/17/15 1,000,340 1.17 1,000,000.00 AMERICAN HONDA FINANCE CORP 1.45 1.50 Al 100.04 1,001,140 3.62 0.94 02665WAT8 1.500%03/13/2018 DD 03/13/15 1,000,440 1.17 1,000,000.00 GENERAL ELECTRIC CO 1.49 5.12 Al 102.53 1,033,650 3.71 0.66 369604BC6 5.250%12/06/2017 DD 12/06/07 1,025,330 1.20 SUPBANATIONALS 1,162,000.00 INTERNATIONAL BANK FOR RECONST 1.16 1.13 Asa 99.99 1,163,057 4.21 0.30 459058DC4 1A25%07/18/2017 DO 07/16/13 1,161,884 L36 1,000,000.00 INTERNATIONAL FINANCE CORP 1.19 1.00 Ass 99.99 1,001,090 3.62 0.06 45950KBS8 1.000%04/24/2017 DD 04/24/12 999,880 L17 TREASURIES 10,000,000.00 U S TREASURY BILL 0.30 Aao 99.99 9,991,595 36.19 0.02 912796KQ1 0.000%04/06/2017 DD 10/06/16 9,991,595 11.73 TOTAL:]PIKED INCOME 0.85 1.63 27,517,616 300.00 0.19 27,459,521 TOTAL:Liquid Oper-Punco 0.82 0.59 85,021,444 100.00 0.16 85,180,434 41612017 8:32:37PM EDT 3 Source:The Dcuk fNew York M,Ou Corporadou Yield Analysis Report ID: RAM234 Base Currency: BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmuut Receivables - 0.00 SUMRECV 1,034,335 COMMERCIAL PAPER 6,345,000.00 BANK TOKYO-MITSUB DISC L12 1.12 P-1 99.60 6,319,627 41.01 0.35 06538BU76 07/07/2017 6,319,627 1.98 6,300,000.00 TOYOTA MTR CR CP DISC 2.23 P-1 99.24 6,251,999 40.57 0.34 89233GV29 08/02/2017 6,251,999 1.96 OTHER 60,641.49 SLH PROXY LONG EXPOSURE - - 93,295 0.17 - 99WAEU30 SLHOPNTA4 25,621 0.01 2,783,196.78 DREYFUS TREAS 8;AGY CSH CSH MG - Aaa 2,783,197 18.06 0.08 996085247 VAR RT 12/31/2049 DD 04/09/97 2,783,197 0.87 US CASH 1.00 USD(UNITED STATES DOLLAR) - - 0 0.00 - NA9123459 GL PAYAELES RECEIVABLES 0 0.00 TOTAL:CASH&TEMPORARY 1.67 1.12 15,44S,lls 100.00 0.30 16,414,779 FIXED INCOME AGENCIES&OTHER GOVT OBL 5,000,000.00 FEDERAL HOME LN MTG CORP 0.88 0.75 Ana 99.96 4,994,250 1.65 0.29 3137EADV8 0.750%07/14/2017 DO 05/29/15 4,998,150 1.57 41612017 8:32:37PM EDT 4 Source:The Bank fNew York Mellen Commotion Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 5,000,000.00 FEDERAL HOME LN MTG CORD 1.04 0.75 Aaa 99.77 4,967,500 1.65 0.78 3137EADN6 0350%01/12/2018 DD 11/21/12 4,988,700 1,57 5,000,000.00 FEDERAL HOME LN MTG CORP 1.12 0.88 Aaa 99.77 4,974,100 1.65 0.93 3137EADP1 0.875%03/07/2018 DD 01/17/13 4,988,700 1.57 7,500,000.00 FEDERAL HOME LN BK CONS BE, 1.13 1.37 Aaa 100.23 7,544,850 2.48 0.93 313378A43 1.375%03/09/2018 DD 02/13/12 7,517,175 2.36 5,000,000.00 FEDERAL NATL MTG ASSN 1.27 1.13 Aaa 99.76 4,963,950 1.65 1.68 3135GOG72 1.125%12/14/2018 DD 11/03/15 4,987,950 1.57 7,500,000.00 FEDERAL HOME LN BK CONS BD 1.36 1.50 Aaa 100.26 7,589,190 2.48 1.90 3133782M2 1.500%03/08/2019 DD 02/06/12 7,519,800 2.36 7,500,000.00 FEDERAL HOME LN MTG CORP 1.48 1.26 Aaa 99.44 7,399,650 2.46 2.44 3137EADM8 1.250%10/02/2019 DD 10/02/12 7,458,150 2.34 5,000,000.00 FEDERAL NATL MTG ASSN L64 1.51 Aaa 99.56 4,955,650 1.64 3.14 3135GOD75 1.500%06/22/2020 DD 04/27/15 4,978,100 1.56 5,000,000.00 FEDERAL HOME LN BK CONS BE, L69 1.75 Aaa 100.19 5,008,950 1.65 3.09 313383HU8 1.750%06/12/2020 DO 06/03/13 5,009,450 1.57 7,500,000.00 FEDERAL NATL MTG ASSN 173 1.51 Aaa 99.17 7,370,726 2.45 3.55 31350OF73 1.500%11/30/2020 DO 10/19/15 7,437,675 2.34 5,365,000.00 FEDERAL HOME LN BK CONS BD L78 1.40 Aaa 98.47 5,343,325 1.74 3.78 313OA7CV5 1.375%02/18/2021 DO 02/18/16 5,282,862 1.66 10,000,000.00 FEDERAL NATL MTG ASSN 1.84 1.40 Aaa 98.24 10,040,950 3.24 3.80 3135GW20 1.375%02/26/2021 DO 02/05/16 9,823,900 3.09 3,000,000.00 FEDERAL NATL MTG ASSN 2.01 2.00 Aaa 99.96 2,994,570 0.99 4.54 3135GOS38 2.000%01/05/2022 DD 0 1/09/17 2,998,890 0.94 41612017 8:32:37PM EDT 5 Sou¢ Ma D¢Nc. fNew Pork Mellon Corporation Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration BANKS&FINANCE 600,000.00 BANK OF AMEMCA NA 1.05 1.45 Al 100.04 600,000 0.20 0.11 06050TLX8 VARRT 05/08/2017DD05/08/14 600,264 0.19 500,000.00 WELLS FARGO BANK NA 1.25 1.39 Aa2 100.03 500,000 0.17 0.20 94988J2L0 VAR RT 06/15/2017 DO 06/12/14 500,145 0.16 3,000,000.00 HSBC USA MC 1.70 1.63 A2 99.94 3,003,290 0.99 0.78 40428HPH9 1.625%01/16/2018 DO 12/20/12 2,998,110 0.94 3,800,000.00 BANK OF AMERICA CORP 1.75 5.60 Baal 102.64 4,334,014 1.29 0.65 060505DP6 5.750%12/01/2017 DO 12/04/07 3,900,206 122 2,900,000.00 AMEWCAN EXPRESS CO 1.75 6.67 A3 105.01 3,377,386 1.01 0.94 025816AY5 7A00%03/19/2018 DD 03/19/08 3,045,232 0A6 5,000,000.00 GENERAL ELECTRIC CO 1.80 2.18 Al 101.08 5,014,950 1.67 2.68 36962G7M0 2.200%01/09/2020 DD 01/09/15 5,054,000 L59 600,000.00 GOLDMAN SACHS GROUP INC/THE L80 5.76 A3 103.27 692,806 0.20 0.78 38141GFG4 5A50%01/18/2018 DO 0 1/18/08 619,602 0.19 5,000,000.00 JOHN DEERE CAPFfA6 CORP L85 2.28 A2 101.07 5,046,984 1.67 2.39 24422ESS9 2.300%09/16/2019 DO 09/15/14 5,053,700 1.59 3,200,000.00 BEAR STEARNS COS LLC/THE 1.86 4.50 A3 103.43 3,523,520 1.09 1.21 073902CD8 4.650%07/02/2018 DD 06/25/03 3,309,888 1.04 2,120,000.00 BANK OF NEW FORK MELLON CORP/T 1.90 2.28 Al 100.95 2,142,175 0.71 2.37 06406HCW7 2.300%09/11/2019 DD 09/11/14 2,140,098 0.67 2,000,000.00 JPMORGAN CHASE&CO 2.12 2.24 A3 100.34 1,994,880 0.66 2.71 46625HKA7 2.250%01/23/2020 DD 01/23/15 2,006,880 0.63 41612017 8:32:37PM EDT 6 Sou¢e:The BaNc. fNew York Mellon Corporation Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON 0CSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 1,250,000.00 HSBC USA INC 2.26 2.34 A2 100.26 1,222,788 0.41 2.82 40428HPR7 2.350%03/05/2020 DD 03/05/15 1,253,225 0,39 5,000,000.00 WELLS FARGO&CO 2.29 2.57 A2 100.99 5,001,650 1.67 3.16 94974BGM6 2.600%07/22/2020 DD 07/22/15 5,049,450 1.59 2,500,000.00 BANK OF NEW YORK MELLON CORP/T 2.59 2.60 Al 100.05 2,504,475 0.83 4.55 06406RAA5 2.600%02/07/2022 DD 02/07/17 2,501,125 0.79 2,800,000.00 MORGAN STANLEY 2.81 4.96 A3 110.90 3,200,848 1.02 3.87 61747WAL3 5.500%07/28/2021 DD 07/28/11 3,105,060 0.98 600,000.00 ESC LEHMAN BRTH HLD ESCROW - - 6.50 352,614 0.01 - 525ESCIB7 0.000%11/24/2013 DD 01/22/08 39,000 0.01 2,000,000.00 LEHMAN BRTH HLD ESC - - 6.50 1,207,405 0.04 - 525ESCOY6 0.000%12/30/2016 DD 10/24/05 130,000 0.04 CARDS 4,140,000.00 CHASE ISSUANCE TRUST A7 A7 1.24 1.06 - 99.92 4,139,643 1.37 0.45 161571HH0 1.060%09/16/2019 DO 09/13/16 4,136,605 1.30 1,810,000.00 HONDA AUTO RECEIVABLES 202 A3 1.55 1.39 Aaa 99.80 1,809,965 0.60 1.24 43814QAC2 1.390%04/15/2020 DO 05/31/16 1,806,416 0.57 CARE 1,885,000.00 HONDA AUTO RECEIVABLES 20 1 A2 0.00 1.42 Aas 100.03 1,884,955 0.62 - 43814TAB8 1.420%07/22/2019 DD 03/28/17 1,885,528 0.59 1,365,000.00 NISSAN AUTO RECEIVABLES A A2A 0.00 1.47 Asa 100.00 1,364,993 0.45 - 654S47AB0 1.470%O1/15/2020 DO 03/28/17 1,364,986 0.43 1,302,300.19 HONDA AUTO RECEIVABLES 201 I2 1.07 1.01 - 99.98 1,302,170 0.43 0.19 43814NAB1 1.010%06/18/2018 DO 02/25/16 1,302,040 0.41 41612017 8:32:37PM EDT 7 Sou¢ M: E¢Nc.of New York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 76,628.87 TOYOTA AUTO RECENABLES C A2A IA7 0.92 A. 99.99 76,623 0.03 0.04 89231TAB6 0A20%02/15/2018 DD 08/26/15 76,619 0,02 2,207,690.52 TOYOTA AUTO RECEIVABLES 2 A A3 1.32 1.12 Asa 99.90 2,207,357 0.73 0.01 89236WAC2 1.120%02/15/2019 DD 03/04/15 2,205,549 0.69 2,085,000.00 NISSAN AUTO RECEIVABLES C A2A 1.32 1.07 Aaa 99.88 2,084,918 0.69 0.39 65478WAB1 1.070%05/15/2019 DD 08/10/16 2,082,456 0.65 274,871.08 HONDA AUTO RECEIVABLES 20 2 A3 1.33 0.77 Aaa 99.93 274,678 0.09 0.08 43814GAC4 0.770%03/19/2018 DD 05/21/14 274,676 0.09 BQUIplez"LOANS 1,442,709.85 JOHN DEERE OWNER TRUST 20 B A3 1.34 1.07 Asa 99.95 1,443,386 0.48 0.17 477877AD6 1M70%11/15/2018 DO 09/03/14 1,442,017 0.45 2,980,000.00 JOHN DEERE OWNER TRUST 20 B A2 1.38 1.09 Ass 99.91 2,979,818 0.98 0.24 47788NAB4 1A90%02/15/2019 DO 07/27/16 2,977,348 0.94 1,410,000.00 JOHN DEERE OWNER TRUST 20 A A2 1.51 1.50 Aas 99.98 1,409,994 0.47 2.48 47787XAB3 1.500%10/15/2019 DO 03/02/17 1,409,662 0.44 2,420,000.00 JOHN DEERE OWNER TRUST 20 A A3 1.63 1.36 Aaa 99.79 2,419,619 0.80 0.78 47788MAC4 1.360%04/15/2020 DO 03/02/16 2,414,966 036 FANNIE MAE REMIC 397.59 FNMA GTD REMIC P/T 07-114 A6 -53.71 0.78 Aaa 99.93 378 0.00 0.21 31396X3Q5 VAR RT 10/27/2037 DO 11/30/07 397 0.00 316,281.98 FNMA GTD REMIC P/T 11-3 FA 1.36 1.44 Ass 101.37 316,183 0.11 0.15 31397QRE0 VAR RT 02/25/2041 DO 01/25/11 320,625 0.10 FHLMC 41612017 8:32:37PM EDT 8 Sou¢ Ma ofNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOp) t Quality Price Market Value %Market Adj Yield Rating Value Duration 2,364.34 FHLMC POOL#78-6064 1.98 2.95 Aaa 102.92 2,283 0.00 0.80 31348SWZ3 VAR RT 01/01/2028 DD 12/01/97 2,433 0,00 FNMA 141,969.86 FNMA POOL#0823358 2.03 3.19 Aaa 105.28 140,861 0.05 0.82 31406X 5 VAR RT 02/01/2035DD04/01/05 149,470 0.05 357,855.83 FNMA POOL#0456397 2.10 3.26 Aaa 104.18 350,112 0.12 3.29 31381PDA3 3.400%11/01/2020 DO 11/01/10 372,825 0.12 23,613.45 FNMA POOL#0257179 2.43 4.19 Aaa 107.44 24,974 0.01 3.33 31371NUC7 4.500%04/01/2028DD03/01/08 25,371 0.01 28,029.81 FNMA POOL#014A0022 2.45 4.19 Aaa 107.46 29,644 0.01 3.25 31417YAY3 4.500%04/01/2029 DO 03/01/09 30,120 0.01 17,667.44 FNMA POOL#0AL0869 2A6 4.19 Aaa 107.41 18,685 0.01 3.20 3138EG6F6 4.500%06/01/2029DD09/01/11 18,977 0.01 4,979.69 FNMA POOL#0748678 2A7 4.56 Aaa 109.73 5,353 0.00 2.95 31403GXF4 5.000%10/01/2033 DO 10/01/03 5,464 0.00 28,209.58 FNMA POOL#0826080 2.56 4.58 Aae 109.21 30,325 0.01 2.73 31407BXH7 5.000%07/01/2035 DD 06/01/05 30,807 0.01 164,593.04 FNMA POOL#0357969 2.62 4.57 Aaa 109.44 176,938 0.06 2.77 31376M2 5.000%09/01/2035DD09/01/05 180,122 0.06 159,334.93 FNMA POOL#0745580 2.64 4.57 Aaa 109.41 171,285 0.06 2.90 31403WZ3 5.000%06/01/2036DD05/01/06 174,330 0.05 314,186.23 FNMA POOL#0888336 2.65 4.57 Aaa 109.40 337,750 0.11 2.99 31410F4V4 5.000%07/01/2036 DD 04/01/07 343,723 0.11 41612017 8:32:37PM EDT 9 Sourre:7heB¢Nc. fNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 269,292.30 FNMA POOLK0815991 2.51 4.57 Aaa 109.38 289,489 0.10 3.01 31406PQY8 5.000%03/01/2035DD03/01/05 294,547 0,09 FREDDIE MAC MULTICLASS 39,012.85 FHLMC MULTICLASS MTG E3 A 1.64 2.90 Aaa 103.34 39,054 0.01 0.66 3133ME95 VAR RT 08/15/2032 DO 12/01/97 40,315 0.01 900,000.00 FHLMC MULTICLASS MTG K006 A2 1.86 4.01 NR 106.02 951,047 0.31 2.54 31398VJ98 4.251%01/25/2020 DO 04/01/10 954,189 0.30 954,273.46 FHLMC MULTICLASS MTG 58 2A 3.28 5.62 Aaa 115.71 1,080,745 0.36 3.00 31394JY35 6.500%09/25/2043 DO 09/01/03 1,104,152 0.35 GNMA 84,228.29 GNMA lI POOL#0080965 1A2 2.29 Asa 103.92 84,176 0.03 0.54 36225DCB8 VAR RT 07/20/2034DD07/01/04 87,526 0.03 24,891.89 GNMA lI POOL#0080023 1.48 2.31 Aaa 103.21 25,304 0.01 0.94 36225CA 9 VAR RT 12/20/2026 DO 12/01/96 25,691 0.01 10,213.05 GNMA II POOL#0080395 1.50 2.30 Aaa 103.59 10,120 0.00 1.38 36225CNM4 VARRT 04/20/2039DD04/01/00 10,580 0.00 28,982.80 GNMA 11 POOL 4080088M 1.51 2.31 Aaa 103.19 29,617 0.01 0.47 36225CC20 VAR RT 06/20/2027 DO 06/01/97 29,908 0.01 82,019.12 GNMA 11 POOL s080408X 1.53 2.30 Aaa 103.46 81,186 0.03 0.38 36225CN28 VARRT 05/20/2030DD05/01/00 84,857 0.03 GNMA REMIC 28,937.04 GNMA GM REMIC P/T 00-9 FH 1.11 1.42 Aaa 100.47 28,937 0.01 -0.03 3837H4NX9 VAR RT 02/16/2030 29,074 0.01 HOME EQUITY 41612017 8:32:37PM EDT 10 Sou¢ Ma H¢Nc. fNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Rice Market Value %Market AQj Yield Rating Value Duration 133,743.29 AMRESCO RESIDENTIAL SECURI 1 A L67 1.00 - 94.39 100,433 0.04 0.04 03215PFN4 VAR RT 06/25/2029 DO 10/20/99 126,238 0.04 INDUSTRIALS 2,000,000.00 INTEL CORP 1.26 1.35 Al 100.07 2,008,280 0.66 0.70 458140AL4 1.350%12/15/2017 DD 12/11/12 2,001,300 0.63 2,000,000.00 CHEVRON CORP 1.35 1.11 Aa2 99.83 1,988,600 0.66 0.67 166764AA8 1.104%12/05/2017 DD 12/05/12 1,996,660 0.63 2,000,000.00 OCCIDENTAL PETROLEUM CORP 1.53 1.50 A3 99.97 1,986,340 0.66 0.86 674599CD5 1.500%02/15/2018 DD 06/22/12 1,999,400 0.63 4,000,000.00 ELI LILLY&CO 1.59 1.94 A2 100.70 4,009,675 1.33 1.91 532457BF4 1A50%03/15/2019 DD 02/25/14 4,027,920 L27 4,000,000.00 AMERICAN HONDA FINANCE CORP 1.87 2.23 Al 100.87 4,046,640 1.33 2.30 02665WAH4 2.250%08/15/2019 DO 09/09/14 4,034,960 I27 4,000,000.00 APPLE INC 2.17 2.24 Aal 100.30 4,050,840 1.32 3.73 037833BS8 2.250%02/23/2021 DO 02/23/16 4,012,120 L26 3,045,000.00 MICROSOFT CORP 2.17 1.59 Aae 97.44 3,041,385 0.98 4.20 594918BP8 1.550%08/08/2021 DO 08/08/16 2,967,139 0A3 3,000,000.00 EX ON MOBIL CORP 2.17 2.22 Aaa 100.19 3,016,097 0.99 3.75 30231GAV4 2.222%03/01/2021 DO 03/03/16 3,005,790 0A4 5,0W,000.00 QUALCOMM INC 2.18 2.25 Al 100.22 4,995,195 1.65 3.00 747525AD5 2.250%05/20/2020 DO 05/20/15 5,011,100 1.57 2,500,000.00 CHEVRON CORP 2.32 2.12 Aa2 99.12 2,485,350 0.82 3.92 166764BG4 2.100%05/16/2021 DO 05/16/16 2,478,025 0.78 OTHER CMO OOVT AGENCIES 41612017 8:32:37PM EDT 11 Source:The BaNc. fNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 357,959.00 NCUA GUARANTEED NOTES TR R2 IA L33 1.15 Aaa 100.02 357,946 0.12 0.09 62888UAA8 VARRT 11/06/2017 DD 11/17/10 358,020 OA1 62,182.38 SBA GTD PARTN CTFS 2001-20C 1 2.04 5.99 Aaa 105.85 62,182 0.02 1.35 83162CWO 6.340%03/01/2021 65,822 0.02 STUDENT 34,564.35 SLM STUDENT LOAN TRUST 200 9 A 2.04 2.49 Baa3 102.00 34,424 0.01 0.13 78445JAA5 VAR RT 04/25/2023 DO 08/28/08 35,255 0.01 SUPRANATIONALS 5,000,000.00 INTER-AMERICAN DEVELOPMENT BAN L10 1.00 Aaa 99.97 5,019,550 1.65 0.29 4581XOCG 1 1.000%07/14/2017 DO 04/30/14 4,998,500 1.57 5,000,000.00 INTERNATIONAL FINANCE CORP 1.19 1.00 Aaa 99.99 5,020,700 1.65 0.06 45950KB58 L000%04/24/2017 DO 04/24/12 4,999,400 1.57 5,000,000.00 INTERNATIONAL DANE FOR RECONST 129 1.00 Aaa 99.65 4,991,170 1.64 1.19 459058EJ8 1.000%06/15/2018 DO 04/30/15 4,982,650 1.56 3,500,000.00 INTER-AMERICAN DEVELOPMENT BAN 1.95 1.88 Aaa 99.70 3,590,405 1.15 3.82 4381X0055 1.875%03/15/2021 DO 01/14/16 3,489,605 1.10 2,500,000.00 INTERNATIONAL FINANCE CORP 2.02 1.17 Aaa 96.33 2,441,600 0.79 4.19 45950KCF7 1.125%07/20/2021 DO 07/20/16 2,408,250 0.76 3,000,000.00 INTER-AMERICAN DEVELOPMENT BAN 2.04 2.12 Aaa 100.38 2,996,310 0.99 4.56 4581XOCW6 2.125%01/18/2022 DO 01/18/17 3,011,490 0.95 TUS 0.00 US TREAS-CPI INFLAT 1.75 1.07 Aaa 105.29 0 0.00 2.65 912828PP9 1.125%01/15/2021 DO 01/15/11 0 0.00 41612017 8:32:37PM EDT 12 Sou¢e:Ma of New York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 10,634,208.00 US TREAS-CPI INFLAT 2.28 0.13 Aaa 99.07 10,516,924 3.48 5.21 912828W O O.125%07/15/2024 DD 07/15/14 10,534,991 3,31 TRBASmm 2,500,000.00 U S TREASURY NOTE 0.68 0.87 Aaa 100.02 2,500,204 0.83 0.08 912828SSO 0.875%04/30/2017 DD 04/30/12 2,500,400 0.79 2,500,000.00 U S TREASURY NOTE 0.95 0.88 Aaa 99.95 2,487,196 0.82 0.62 91282SG20 0.875%11/15/2017 DD 11/15/14 2,498,825 0.78 3,500,000.00 U S TREASURY NOTE 1.06 0.75 Aaa 99.72 3,496,457 1.15 0.91 912828UR9 0.750%02/28/2018 DD 02/28/13 3,490,165 1.10 11,000,000.00 U S TREASURY NOTE 1.24 1.49 Aaa 100.47 11,042,439 3.65 1.81 91282SB33 1.500%01/31/2019 DD 01/31/14 11,051,150 3A7 5,000,000.00 U S TREASURY NOTE 1.26 1.49 Aaa 100.47 5,016,423 1.66 1.97 912828SN1 1.500%03/31/2019 DD 03/31/12 5,023,650 1.58 2,000,000.00 U S TREASURY NOTE 1.33 1.61 Aaa 100.65 1,996,861 0.66 2.20 912828WSS 1.625%06/30/2019 DD 06/30/14 2,013,040 0.63 5,000,000.00 U S TREASURY NOTE 1.35 1.61 Aaa 100.63 5,012,389 1.66 2.29 912828W W6 1.625%09/31/2019 DD 09/31/14 5,031,250 1.58 5,800,000.00 U S TREASURY NOTE 1.38 1.73 Aaa 100.90 5,873,187 1.93 2.45 912828F39 1.750%09/30/2019 DD 09/30/14 5,851,910 1.84 7,50Q000.00 U S TREASURY NOTE 1.44 1.50 Aaa 100.17 7,449,635 2.48 2.60 91282SG61 1.500%11/30/2019 DD 11/30/14 7,512,600 2.36 5,000,000.00 U S TREASURY NOTE 1.58 1.50 Aaa 99.75 4,966,423 1.65 3.08 912828X 5 1.500%05/31/2020 DD 05/31/15 4,987,500 1.57 41612017 8:32:37PM EDT 13 Sou¢ M: E¢Nc.of New York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: BED BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 5,500,000.00 U S TREASURY NOTE L69 1.39 Aaa 98.91 5,424,667 1.80 3.48 9128281.99 1.375%10/31/2020 DD 10/31/15 5,439,830 191 6,OOQ000.00 U S TREASURY NOTE 1.75 1.39 Aaa 98.60 5,895,840 1.95 3.73 91282SN89 1.375%01/31/2021 DD 01/31/16 5,915,880 1.86 7,000,000.00 U S TREASURY NOTE 1.88 1.16 Aaa 96.75 6,757,914 2.24 4.39 912828T34 1.125%09/30/2021 DD 09/30/16 6,772,220 2.13 6,000,000.00 U S TREASURY NOTE 1.89 1.29 Aaa 97.20 5,813,692 1.92 4.44 912828767 1.250%10/31/2021 DD 10/31/16 5,831,940 1.83 7,000,000.00 U S TREASURY NOTE 1.90 1.76 Aaa 99.35 6,900,492 2.30 4.47 912828U65 1.750%11/30/2021 DD 11/30/16 6,954,360 2.18 3,000,000.00 U S TREASURY NOTE 1.92 1.88 Aaa 99.78 3,004,815 0.99 4.63 912828V72 1.875%01/31/2022 DD 0 1/31/17 2,993,430 0.94 US TAXABLE MUM BONDS 2,440,000.00 PORT AUTH OF NEW YORK&NEW JE 183 4.87 Aa3 109.03 2,507,634 0.88 2.47 73358WAG9 5.309%12/01/2019 DO 07/01/09 2,660,210 0A4 1,400,000.00 NEW YORK CITY NY TRANSITIONAL L96 3.80 Aal 107.29 1,400,000 0.50 3.31 64971M5E8 4.075%11/01/2020 DO 11/03/10 1,502,088 0A7 400,000.00 UNIV OF CALIFORNIA CA ROTS MED 2.56 4.59 Aa3 109.64 400,000 0.14 3.70 913366EJ5 5.035%05/15/2021 DD 11/IS/10 438,548 0.14 TOTAL:FIXED INCOME 1.62 1.72 304,196,326 100,00 2.47 302,003,488 TOTAL:Long Term Oper-Pimco 1.62 1.71 319,644,444 100.00 2.36 318,419,266 41612017 8:32:37PM EDT 14 Source:TheB of New YorkM tba Corporation Yield Analysis Report ID: NAM234 Base currency: BNY MELLON OCSF07555502 3/31/2017 O.C.S.Escrow Account Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &TEMPORARY Sum o(Acmunt Receivables - 0.00 SUMRECV 14,487 TOTAL:CASH&TEMPORARY 0.00 0.00 100.00 14,487 FIXED INCOME TREASURIES 3,587,000.00 U S TREASURY NCTE 0.68 0.87 Asa 100.01 3,599,330 99.60 0.04 91282SC73 0.875%04/15/2017 DD 04/15/14 3,587,287 99.60 TOTAL:FIXED INCOME 0.68 0.87 3,599,330 100.00 0.04 3,587,287 TOTAL:O.C.S.Escrow Account 0.68 0.97 3,599,330 100.00 0.04 3,601,774 41612017 8:32:37PM EDT 15 Source:Ma D¢Nc. fNew York McOm Commotion j*. Asset Detail BNY MELLON OCSD-CONSOLIDATED-0CSGOOO1O000 As Of Date 3/31/2017 IF Mallon Base Markel Pamnl of Local Unreafwtl Sswrily l0 Securlt)OescXpllon Base Price SM1ereslPar Base Cost Value Tda GaiNLoss XN Unrealized GelnlLasa Base Grand Tdal 408,00 10.]H 4O9,531,125.78 4W,]00A]AA9 100.00 -2,339,6NA8 CASH&CASH EQUIVALENTS 83,097,d2290 84,209,WaD BCp01}%O3 20.68 47,013,56 U.S.DOLIAN 83,09]A22270 81,209,W99 64,141}]4,43 20,66 47,673.56 1185884/ Ill .11 ll55EM 1G--1H.MEW&(OONSOI.AGM17 � "ClocOW0 <,BW,a]8po <AMA]So 1. I—S FELFRAL HOMPLININSIONS OISGDAGAIIDI] A. lIJUS— FLES7.e] LJXM7JI 17 ooe Y INESIL MIGG RL2 TOYOT�A INS!OR OR Drv8MRn00�] 54P"301] .10 154%0000S9Y18 � 1,01 LW NO SBBaoORION. oxe 00 o a POI8O%NLx09 uoo. A,SNI P25 I'Lles1] SICANKS U S TREASURY BILLF IDEA OAXAC7 DO locals SAI I I ace 110 1 TOOT NI 58 KSGJDANCIA 1 IN He He aepo55Y] OxewuSTALAS a ACY GIN HEN MGVM FIT1Y3ffiW wB]B DD O & FLOGY 663E 78meo g538.]mm IB$SCALF1 tm o0 00 FIXED INCOME SECURITIES SxPROxv LONG FxsOLURESLNOFx)u pays 324,912,192101 325,321,8]]A9 123,058,899.97 79.34 6!e]a50 -3262977,92 U.S.DOLLIR 324,912,192101 325,RI,67L79 U3,0N,699.07 IS.. -2,262,977.92 .ttO t RESIDENTIAL It lIDA R FReca De x AW.oO aF iICUPS t ]a. I p ].11 115 x, ,77 x 77 COUNA., APPLE OIL MO% SIIDI]OSU OD MANS11 1. 1,.So.Fro I,W25B3oo "OHN .O0 I2C aslo IF axo IF DD 6DFp SORDFMIEACACOPPe IEO%1]g1rR0ll GO 121Nq] 7. BMi08HLW] BANN OF HEW YOxN MELLON CORP?23V%DWI 1 CUTS DO Near II10 Ne x % o ouoa NEW L M4%Oxq]ROy DOO 7117 , o � 3 o o Iaac. CHEVRON GORE Has,1mMnon DD CHNIaDpv1r _ IllNG Tw,oN.00 LNAAAAGC 149 FINe on Aomoo HIMIGH. GRECON FORRIm%I IMBrzpv DD lMnns o. BNo 1.ro Pvop%MI1820100DOw1Au CALL 3OHx DEERE CAPITAL CDR of map Sow M,11is oM:LD= EVON MUSIC CORFECSN 0.1.1 L0 WOVIS 1.1. ISILLIGH, 3,01808]AO z.Da,HI00 .11 1p,3mao YNYICCA FEDERAL HOME IN RK CONS SDI CAIA WAF/xoI DO 0918118 AS JASO ¢ ¢ ¢ 6$52M1t8 w, ass 358 Sty ryW FEDICALx MELx&t CON58D115p%WINOHODOALSO CO A ".TCEM F.-F—11CLALA STG El.1 R]GOACE.DD RpIM as,A3se 39 012 OF NYFRJL7 p350 t 3 3 Is, FECERALIUR MTOA99N1.50p%11AW'M'OCO1M&15 � 7AIRA.WO GOITZI.Oo ] ..He ars..po Rep-Itl GLW13 POSO Ti—cols,ThN A,S 201]OSLN3S PM Page of j� Asset Detail BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 As Of Date 3/31/2017 IF Mallon ease Markel Pamnl of Local Unreafwtl Seourily l0 Security Base PriceSM1areslPar Base Cost Value Ta.I GaINLaaa XN Unrealized GelnlLass Base al..- FEDE RAL Iwn OLD A55X 1.125%I L11R8180011 NL15 as.- s000 coo Ms sOMIso oo o,seie.Po.00 1 ol00 xaomoo 9)5%01Ye5R0]1 CO.511 IN 1. 1s"I"I Me le'.a.ro, UHNM or A, Illooll, 11 220.W3.50 ol 111gLC FNMA L ]eBS.OW%IflNin035D00W1N5 1 • t a, 171,91112 Hallooll, 1. 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SOL "I t -. oro al'AHUNCE US UCCRIN Marc 1 6a31 O 6 mN5A6VxV NSTE1y500%Olcoloc 91 ED 01 COO 1U."UND,00 C 71 1 Ell 11 t25RBC73 U 3 TRFA3VRV RECREA1E%ARCER017 ED NIIW14 w. 0 .7 1.1 Or 35A7 R@x. 12 5 5 1 RV HO 11.NOWASAND.1.111, 5,424C.17 1A3eA30,W 11. 1 A t 1 A t 91282BN69 J A TREASURY NoTal CIA OV3✓M1 DOHooll .1.0 6 coo coo mo IFOEAw.a1 1IFINOOR 1.aE xo mASo xo- 5C0a 0A]4'A19 EO.1112 01.111 eT31 NATE1.125%OWIW'N3 I ED WINYI 6 TPl RW.W 1.68I COI AC 1430592 i2COTea m RV NOTE135051R3VNY ED 1W3N16 Jo-1 11111111111 COO' 00 1A9 x 1 — x x TRUESSEARY NOTEI TEO%11hOPA21 CO 11COO 6 IN Cal coo No 0 5.9V.M3.001711 AS A,Ao 53,e5T80 2. I.C., US TEACGPI INFUTOG125%OTI151PN ED J7N04 as OWN 1.1.2rear, 10.111D23ae IO.SN.BW.M 0 leoeses Ie oPA.es RW2. U A TREASURY Norral ral WI31Ix019 oD AREN14 RAINCIA S000 O000so O;335.eo x FAN C0 aea Ao .411 OR IF FEWELI UNIV OF CALIFORNIA CA ED %0LWOYWIi DOOSIWIIt 11B&10 LMa5W.00 1lNEII T, T, AREADGM9 WE US FACTO A We AQO%O7IR ODo 0=16 1m saw SOO000mo SWIASO.00 S.OaBA`A.00 tm 47 No00 Lee.oo R.-Itl GL8013 Regal Timndmp:Too ARE 6 2017 OR IA PM Page 3 of j� Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 Effective Contract Trade Data Investment Investment Base 6ecuri[y 10 Description Data Settle Data 6M1aresl Par Base Amount Base Amount GaINLoce 6eMe Base Amount GRANDTOTAL 460,261.28 .708,877.76 d4,119.57 -660,285.27 CORPORATE ACTIONS 92,897.65 -92,705.31 192.36 92,897.65 92,897.65 -92,705.31 192.34 92,897.65 U.S.DOLLAR 92,897.65 -92,705.31 192.3" 92,897.65 89231MACH TOYOTAAUTO RECENASLES2 AMD aM%lansOXV DO 0911&14 3I1E.17 .1.17 82887,600 82887.BS -82)0531 lt2 si 82,B9i as MATURITIES 26,506,754.52 -26,533,884.52 -32,130.00 26,506,754.52 GASH&CASH EQUIVALENTS 23,506,750.52 -23,506,754.52 SOO 23,506,754.52 U.S.DOLLAR 23,506,750.52 -23,506,756.52 DODD 23,506,756.52 085308083 RANKTOKYPMI5UB DISC OYNSCSP 32IID1] Oei -1,OW,00omo 996.280.58 538,260.58 000 .6.2.fe O65J88063 BANK TOKYOMITSUS DISC 032NL017 1M201T OSO.Ol] S,B7g000W0 58<A1fi6.8H 1,.ilr530 000 SB46,116 at 313JBSOR4 FEDERAL HOME OR Be CONS DISC MAT O1281ID17 3syom7 .2.17 3<W,000.W0 3397OL167 yOSS754167 000 3,397,54107 FEDERAL HOME W Be CONS DISC N MAT 03124W2017 3Rd2017 598VH_1. 5.991]3416 111397DKd FEDERAL HOME IN ROD CORR DISC MAT avOc2017 32Ld117 3I21201] I ..a..f 1,049,114�. -1,24a11458 000 1,2d9,114,58 313589DR1 FEDERAL NATL MTGASSN DISC OOW%01292017 DO WOMB 3292117 129I2017 -1 raaoo tc0 1..91.. -1948,91868 000 L9i6,91866 89113VMF6 TORONTO DOMI NION BANK Up 1.19M=1=017 OD 0123116 IL13YOP 11.17 A075,0W.W0 40]S.WO.W 4,075,00000 0.00 4.075.00000 FIXED INCOME SECURITIES 3,000,000.00 -3,032,130.00 -32,130.00 3,000,000.00 U.S.DOLLAR 3,000,000.00 4,033,13D.00 42,130.DD 3,000,OSSOO 1]2]SRAT9 CISCO SYSTEMS INC 1100%01D32017 DO 01aL 11 R7 13IID17 10W,000.WO 10..WO.W -1002 NO 00 2660.00 1.WO,O0000 592457BB3 ELI LILLY 60O 52W%0115211]D003114I0] 1..17 11.17 -10WOW.WO 1,00i -1,027,93000 -22.9J000 I.O.S.OD aMlvr8Ve INTER-AIERICAN DEVELOPMENT BAN I]25%OW15/ro17 DO 01111112 3.1S.17 3n5¢e17 gOW,OW.WO ;OCOOBo 00 1,W 1'W080080 MISCELLANEOUS ACTIVITY 0.00 -1166 -19.64 ON 0.00 -19.64 -19.6" 0.00 U.S.DOLLAR 0.00 -19.60 -19.60 0.00 313105N. 118 ADJUSTMENT FHLMC POOL M]b808d 101.17 13VN17 2d.9T0 0.00 000 000 0Or 62888. ILB ADJUSTMENT NOUN GUARANTEED NOTES TR R2 IA SSIM17 131SN17 19.W9 OW is. -1014 Lou PRINCIPAL PAYMENTS 979,585.39 -966,5M.01 -2,217.51 919,561A0 FIXED INCOME SECURITIES 979,585.39 -966,5M.61 -2,217.51 979,561.4 U.S.DOLLAR 9]9,565.39 -966,52A.01 -2,217.51 979,551.40 313d83saa FHLMC NCI N85os4 VAR FIT 01NV20ID DO 121alsa ...17 WlQD17 ]3.820 23.S2 0OD 000 2392 31340SA. FHLMC POOL 17..VAR RT 01N1YNR80012p 118] WlQO17 1V2017 @3.W0 23.99 33d1 O58 000 111.113, FROM MULTICLMS MTG 582A N500 25Y1W30D ORO,N1 Y112017 111201] d.482.WO S.Mt'N 98oeae -112422 SAK,ar 3133TCE95 FHLMC MULTICLASS MTG E3 A VAR M OVIV2032 D012A119] .1S17 2LIAO17 .".Do0 151320 .1,1.al A61 1pd320 313]1NUQ FNMA PODL W2571R d.WM WN1IID260D 010V00 Y1I201] 11I201] R13.330 21232 ]20.55 1223 21332 31376KT22 FNMA POOL W357S695.SAM WNlQMS DO MIM L1I201] WlQD17 -2 Co 15D 2.07.15 3,8OC 69 185.50 2,fi0].11 11381P. FNMA POOL M0W63W 3A00%1101Y2020 DO 11N1110 IW112017 11.017 -]S9.W0 ]SBW -A266 1543 TOROS 314030dY3 FNMA POOL n7455W 5 W0%0yml 036 DD DyOlN8 WIQ017 L1IID1T d 500 410 3.S20G1 3TW.df 2.03 352041 31403G%F4 FNMA POOL W74MM S.NO%lMlQO33 DD 1MIM L11201] DIlY] 20.]d a _ 2014 31406POYS FNMA POOL 008RE71 SLOON 3,L1Y2N5000101N5 YII201] 11.01] 5.815.230 B81523 ],328.3] 511.14 6,81523 W 314 %W MA PWL p3 T5 FNMA VM AT Oaealca 500 WN1p5 . 110)17 -16SisMO 16.879,76 -16,74789 10167 16.8]a)0 31407B%H7 FNMA POOL W82WW 5000%07MI12095 DO WN1N5 Y112017 311I2017 548400 94548 -1,01a62 -7114 are 4S 410F4 FNMA PODL flies 95 WO%0]N1I206 DD ONOIM W112017 .112017 $,BR 00 8.872 SO -717303 2 44 8,6]2On 3138EWF8 FNMA F L MAL0869 4,5Oas XNl12029 DO 03anI 1II2017 111201T 1.am .1D, 4149] 22.Or 39231 31417. FNMA FWL MMAXo245W%MSHONN DO AsSlM9 L1I201] AI.O17 d13.8B0 SO.69 331.]8 -lOm 311 as 3139MVOG FNMAGTDREMICPROT-114ANVARRT 1OQS2N]OD11I30N] .17 2125f20P $ ..WO fi.]8RW 000 000 6)939D 111RECC. FNMAGIDREMICPRW-114ANVARRT IW2]I2W]ODllcuVT 32LTO1T 325I201] Lt..Wa 5]23.94 11.14 12]BOI BR3W a.-M 1.355 RepH Thames,Thu Ap 6201]05:31:46 PM Page l of j� Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 Security ID Description DadeEffective Contract SIRTRIPar Trade Data Investment Investment Base Some Base Amount Dade Seattle Data Baae Amount Base Amount GaINLoss 31397OREO FNMA GTDREMIO PR 140 FAVAR RT 0325RM1 DO 011U911 OVESS17 OV&2017 -5821/10 5,821A1 d,81959 ill 6,821A1 3837WNXF SAW GTOREMIC P?W9 FX VAR U OVIW030 A. 3I1YNI7 -1319310 1319.2] -1213.27 0.00 1213.27 IrOACAZ9 DOW 11 PWLMOBW23 VAR RT 1000SSA8 Do 12ORSO All. 11/2%] -186.300 196.30 -198.55 1.25 196.3p MACIAS GNMA II FOOL MAOSSI5 VAR RT ON203O0 DO OPOINO W112017 11Rp1] 5]120 5]12 - 052 17 IS XCOICC56 6NMA II POOL MMM65 VAR AT O]/20203d On ONORM N1/201] 11IID1] .VOd90 31Oil3 d<OR 021 34093 MOSECM GNMA II POOL MWOMM VAR RT 062020V DO memo] YIf301] 11/2O1] -3b.150 N0.15 2<500 525 OF Is 36225CNH DOW II FOOL MWWBXVAR RT 052020W DO OESINO L1I201] 11JO17 JV<.3f0 K0.3< LJ803 4 51 1 4.Ol G3B14NA31 HONDA AUTO RECEIVABLES 201 AS 101DX XFBY101S OD 02SN/R ..11 110/2017 -233.92]NO R39.32]A -233,30 23.91 23332].N HONDA AUTO RECEIVABLES 202 A30 RON=192018 DO 05IN114 Al.1] OJIW201783,520%p 09,52056 58)2 4]]8]]A06 JOHN DEERE OWNER TRUST SO 3A310ID%11I15RL18 D003N11< NUSS1] 1192017 -207.643.NO 207,613N 20Y,]<051 9233 20],62M 62888UW NOUA GUARANTEED NOTES TR R2 M VAR RT 11N&201]DO11/1]/ID L&'201] 2/8/2017 loNse00 -1Q219.90 1121171 0.10 -1021990 BRBBB. NCUA GUARNTEED NOTES TRR3 M VAR RT 11N&2M]OD 11tl]/10 L&2M] 382D17 $ ELLSIS B.%8.]9 B,368<0 090 B96R)9 SAND. NCUA GUARANTEED NOTES TR R2 IA VAR RT 1 IMW2017 DO 11/17/10 2/LV201] Z6201] 40,213 W0 1O.NSSO -1021319 F37 IS 21111 1,1620W1 DNA AM PAM CTE52W1-AC 16 NO%OLO1/2021 W112016 ."As $482.070 "207 000 IF. 846207 69236WAC2 TOYOTA AUTO RECEIVABLES 2 A AS 1120%OL15IN119 DO(COMES YISY[1117 119201] -013A,194301 N3,61963 21361713 32IS NO NO 43 SUATAB8 TOYOTA AUTO RECENABLE5 C A ANONO211MOM OD WREFS L15201] .1.17 -153.574.76) 153.57436 -153,56241 12.35 153,570.76 PURCHASES -55,M,230.88 50,533,240.52 O.DO 55,903,239.88 CASH A CASH EQUIVALENTS 45,263,522.53 45,263,522.53 GDO 45,263,522.53 U.S.DOLLAR 45,2W,528.53 45.263,521.53 0.00 45,263,522.53 085306U]8 BFNKTOKYOMISUBOISLO]N]209 &&201] 1A 11] 1]O6,OCO.WO �1898,10109 189016109 OOp 4898 IS,89 085306U78 6ANNTOKYOMITSUB DISCO]N]201] 321201] 1]I201] 8,3R,OW.WO 8,319,82).05 8,319,82)OS 000 d319,62]OS 998085N7 DREYFUS TREAS&AGY CSH CSX MG VAR RT 1L312WB ODMN9fl] L1Q01] 112D1] INASSE]BO 50.83679 50,035)9 FFO _ -54635]9 89fi0852J] DREYFUS TREAS&AGYCSX CS-1 MG VAR RT 12I31I2W90D CIMR] 1Z201] 1Z2p1] 1,Ofi33AD 1,W3d< 1,0633f 000 -1,063J< FASHIONS DREYFUS THESE AGY CSH GN1 MG VAR RT 12W12W9 DO MM9] 11201] 13201] 1Ocal AX IOW.WOW 1,W150001 IF. 1.WS5000p 996005247 DREYFUS TREAS a AGY CAN FAR MG VAR AT 1213112M9 DO W/0397 3M2017 .111] 1,SW,00 A .1OL0,W0.US 1,W0000 OF 000 ".AX000 FOSSAMI DREYFUS TREAS&AGY CSH CSX MG VARRT 1SSIQWB DO FRANM7 321 N7 18201] AFIA. ].SOD -1 reNam'. E.88].50 OOO $664,687W 996005247 DREYFUS TREAS&AGY CSH CSX MG VAR RT 12131I2049 DO N/W9] Ser. 1012017 E8,25VVaF Sell.0. SC COO r0 010 IS 21F F0 AROS247 DREYFUS TREAS&AGY CSH CSH MG VAR RT 12I312W9 DO WWW] 1&20T] 192017 W,293 NO W.. .D1 SO 2.01 010 60$9301 996095247 DREYFUS TREAS&AGY CAN ORR MO VAR RT 1MI12WO DO FORMS 113K01] L11209 012Q589 ar, 412CV568 412658968 1F. 412658968 996085247 DREYFUS TREAS A AGY CSH CSH MG VA0.RT t2/312d9 DO NN39] YISRCI] 119201] 2,031,a25 W0 IOO".5W 2,031,All 00 000 -2.031,82500 996005247 DREYFUS TREAS&AGY CSH CSX MG VAR RT 1201QN9 DO SOWS] 1152017 11512017 SMFJAX.260 -759.WS29 75900528 000 ]59.80528 KNOE5247 DREYFUS TREAS&AGY CSH CSHMG VAR HT 121 DD CIMflT L6SEV? 116209 MU.S.13D 59.74518 58745.18 010 SB.N5.1B F06085247 DREYFUS TREAS&AGY CSX CSX MG VAR RT 12I3112M9 DO pIMR] SOUSS17 12N20P Qtval170 42156157 .15615] 000 A21561.17 VrWSAN] DREYFUS MINER AGY CSH CAN MG VA0.RT 12/3$N9 DO Maser 3AW017 31232011 1SKAX,Wp -1260,000 W 125000000 I _-1,250000 OF 998085247 DREYFUS TREAS a AGY CSH CSH MG VAR RT 1MIQaSs DO N/039] .17 WNV017 6,OW.WO WO BOW,W000 NSFA 0.OF 000 $WO,00000 FsVASN] DREYFUS MEANS&AGY CSH CSX MG VAR RT 12UNQOU DO WNd9] L2]201] 12]201] 09.OS9.39D -sesedA 09,069.39 000 da,369.39 N6005247 DREYFUS TREAS&AGY CSH CSH MG VAR RT I2131I2W9 DD CIMR] L2W10P iO.NP E72V360 5.72E 16 S70F IF 000 072F 11 VN0NN7 DREYFUS TREAS&AGY CAN CSH MG VAR RT 121312049 DO NOW 1292C1] W202017 1AVINO WO -63W.W000 5,35000o O0 DREYFUS TREA56 AGY OSH CSH MG VAR AT 1213112N90D FORMS .1.11 LT209 1OSNES W0 - 27,62500 313305GR1 FEDEML HOME LN BK CONS DISC N O&q&2017 3302017 AOONn] 9,OW,000.WO FXNA0251 390633251 00a 1,906M211 FIXED INCOME SECURITIES -10,679,712.35 9,269,717.99 0.00 -10,679,712.35 U.S.DOLLAR .10,679,712.35 9,269,717.99 ODD -10,679,712.35 026850iAT8 AMERIGN HONDA FINANCE CARP 1 evil 01131M10000311115 1.1, 130/20ll 1,OW,000.WO 40011'"0 1W1,14000 000 4001,14000 3137EADH9 FEDERAL HOME W are WRP IOW%Bfl29IM1]DOOLi V13 390201] 131Q017 20W,W4.W0 2.OW..A 0. 2,W0,8 oFF 000 -2W0,6a00, 31390ADM1 FEDERAL NATL NITS ASSN 53NN ON121N11 DO OsO.7 .17 13120P 20W,OW.WO -201).B00.00 2,017,66000 010 2.017,60011 JW14TABB HONDA AUTO RECEIVABLES SO 1 AX 1A1 07Q22019 SO 032B117 9R12D17 WAW2017 WON,)So'! 1, W,9NBN.9%.BS 36 1.BN,851.95 000 -1,BN,851.95 83 JOHN DEERE OWNER(RUST 00 A A21600%10152019 DO O0017 ZR21201] LZ201] 1d10S.OAO -1,< .38 RPoa1M TX8355 Rapid Thiessen,OFF Apr 6201]05:31:46 PM Page 2 of j� Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 SecuriWID Description Effective Contract Shama[Par Trans Data Investment Investment Base Settle Base Amount Date A m Settle Date Baae mount Bace Aount GaINoe sL BU747ABO NISSAN AUTO RECEIVABLES A Anon,1 A70%ORICA300D Steel 7 .1.11 W2W2017 138b,no.M0 -1,d.,.a 0< 1'.na0A4 000 1.300,99804 68389%AN5 ORACLE CORE I RW%lWUVO17 DO 1MARS .17 W31eO17 1,000000 W0 -959 870.00 FAFQ70 On 000 99487000 RECEIPTS AND DISBURSEMENT TRANSACTIONS _ 0.00 59,696.00 0.00 Dell MISCELLANEOUS INCOME 0.00 59,696.00 0.00 0.00 U.S.DOLLAR 0.00 59,696.00 O.DO Sea 912828WUO IRA INFLATION ADJUSTMENTS US TRCkanEl INFLAT OUI209 11I201] 1.Ono 000 1M 00 000 000 912UMUD US INFLATION ADJUSTMENTS U3 TREAE{PI INFEST ..17 ED.S17 ISSUDDO St. 19]800 000 000 912828WU0 ILB INFLATION ADJUSTMENTS US TRESSLPI INFLAT 13'201] 1312017 6828.W0 _0.00 5,82800 000 000 013838WUO 1US INFLATION ADJUSTMENTS US TREASLPI INFLAT 3 SO17 ..017 1.976 W0 OW 19]600 000 000 912828WU0 IRA INFLATION ADJUSTMENTS US TRF/S-0PI INFLAT ORI2017 1]IID1] 1,9]B WO 000 197600 000 000 Eln..UO ILS INFLATION ADJUSTMENTS US TREASCPI INFLAT .017 ..017 2,Ot0.W0 _a- 2,0W 00 000 000 91282MUO IS INFLATION ADJUSTMENTS US TREASLPI INFLAT 39I3M] 19I2017 1.976.WO O.W 19]600 000 000 91282MUO LIB NFUVRON ADJUSTMENTS US TRECELPI INFLAT L1060P W10(N9 SISOLW0 OW 592800 0no 000 FloSoNUO LIB INFLATION ADUSTMENTS US TRFASCPI INFLAT 113201] 1,9]6 W0 0an Sloven. IRA NFIATION ADJUSTMENTS US TRF/S-0PI INFLAT yLR➢17 11VID17 ,a.Ono O.W Ia.a0 912828WUO ILB NFLATION ADJUSTMEM6 US TREASCPI INFLAT lince11] 113R017 lom WO 0. 19]800 000 000 91282MUO US INFLATION ADJUSTMENTS US TRESSLPI INFLAT SUSSAI 1Iaer17 1,9]B.WO 0.00 I,9]600 000 0no 91282SWUO ILS INFLATION ADJUSTMENTS US TRECE CPI INFLAT W. 11]I201] 8,032.W0 0.. 593300 000 000 91RBRBWUO LIB INFLATION ADLUSIWERS US TRFA9LPI INFLAT YNMIP 13WA17 19]B.W1 OW fro 00 91282MUO ILB NFIATION ADJUSTMENTS US TRFAS-0PI INFLAT 121RO1] 121)2017 19]SW0 OW 197600 91282MUO ILS INFLATION ADJUSTMENTS US TREASCPI INFLAT 3R220P 3c.n7 IESSOOO OW 19]S00 000 000 91282MUO ILB INFLATION ADJUSTMENTS US TRESSLPI INFLAT 3R3ROP 12.17 1976.WO as 1,F.00 000 000 R1282MUO LIB INFLATION ADJUSTMENTS US TREASLPI INFLAT S"1@O17 12V2017 3.O.'ane OW 6.200 000 000 91282MUD e81NFLATION ADJUSTMENTS US TREASCPI INFLAT 32]201] OCm2017 1a]B.WO - ]S .0 19]6O0 Or. 000 W FiSS UO IIRSNFIA TION ADJUSTMENTS US TRFASCPI INFLAT 3?BIM1] Oce.So] 1,9M0 OW 1,900 0no .1 912828WUO ILB NFLATION ADJUSTMENTS US TREASCPI INFLAT 329IM1] 129R01] 1,976 WDDS 0.W 1,97S00 000 000 91282MUO US INFLATION ADJUSTMENTS US TREAELPI INFLAT L3MOP 13.11 1.." a an. I,9]600 0DO 000 912828WUO LIB INFLATION ADJUSTMENTS US TRESS CPI INFLAT 3I3V10P 1312017 19]6 W0 1 0.00 1,9]600 000 OOO SALES 27,703,736.04 -27,703,680.80 55.24 27,703,736.04 CASH S CASH EQUIVALENTS 27,203,64eO6 -27,203,640.06 0.00 27,203,600.86 U.S.DOLLAR 27,203,610.06 -27,203,11G0.06 Sea 27,203,64W.06 996005247 DREYFUS TRESS&AGO CSR CSH MG VAR RT 1213112049 DO OVW9] 3R12017 12.U1] -14M 378 MD 1A09.3]876 -140937676 USA 1409,3]6]S AROB5247 DREYFUS TRE4S&AGY CSH CBH MG VAR RT 12MR2049 DO MMR] 1]I201] 3l]I201] 1ON.1 U.B90I 1,BW,101.89 -LOSS la,B9 000 1.68B.181 as DREYFUS TRESS&AGY CSH CSH MG VAR RT I2131QW9 DD OUW9T .017 ORCO17 57W,121190 5,796121t9 s,T9 , 5,79612119 99EAS247 DREYFUS TRFAS&AGY CSH CSH MG VAR RT ISKe2d9 DO MIe297 3R2/M17 12S.11 aato A. .1. LOO 8.34 990005N7 DREYFUS TREAS a AGY CSH OSH MG VAR RT lX3112049 DO WI099] 3R8211P 12812017 S14S.793O 1.447R99 -3249,947 99 000 1...299 N6005247 DREYFUS TRESS&AGY CSH CSH MG VAR RT SSUQWB DO MNdfl] .17 130f2017 99831BO.W0 99B61SD.W -tatia 1.084 Son &WB.180.W A6085247 DREYFUS TRESS&AGY CSH CSH MG VAR Pr 1213112W90D Sci .1.17 131.17 5061,823050 1oal1a2305 1,081,82305 000 6W1,82305 FIXED INCOME SECURITIES 500,095.98 -500,040.74 55,24 500,095.98 U.S.DOLLAR 500,095.98 -500,UD.74 55.0 500,095.98 912828E30 U 3 TREASURY NOTE0.8]5%ORRXC017 CO WM.112 ISS712017 SRmO17 1 SW.OW.WO SW,W5.98 EDO 01074 55.24 500.OBS9B RPoa1 M TX8355 Rapt Tinashro,Thu AI1r 6201]05:31:46 PM Page 3 of Callan March 31,2017 Orange County Sanitation District 1 Investment Measurement service Quarterly Review The hairdo, aided waa prepared by Callan Associates Inc. ("CAI"I using information from sconces that include the following: fund thusands); fund dietodian(s);Investment managaidel CAI computer service;CAI investment manager and fund sponsor database;third party data vendors;and other outside sources as directed by the client CAI assumes no responsibility for the accuracy or completeness of the information provided,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 software.Callan does not provide advice regarding, nor shall Callan be responsible for,the purchase,sale, hedge or holding of individual securities, including,without limitation occurred of the client(i.e. company stock)or derivatives in the clients accounts.In preparing the following report CAI has not reviewed the risks of individual cunt,holdings or the conformity of individual seventy holdings with the client's Investment policies and guidelines,nor has it assumed any responsibility to do c.Advice pertaining to Me meets of individual securities and derivatives sal be discussed with a Mind party securities expert.Copyright 2017 by Callan Associates Inc. Table of Contents March 31, 2017 Capital Markel Review 1 Active Management Overview Market Overview 8 Domestic Fixed Income 9 Asset Allocation Investment Manager Asset Allocation 11 Investment Manager Retums 12 Asset Class Risk and Return 16 Manager Analysis Chandler-Long Term Operating Fund 18 Chandler-Liquid Operating Money 22 Callan Research/Education 24 Definitions 27 Disclosures 32 Callan Orange County Sanitation District Executive Summary for Period Ending March 31, 2017 Asset Allocation March 31, 2017 Market Value Weight Net New Inv Do eesSc Fixed!Inane Long Ten,(3peowJng Fund' 318,418,266 79,89% 0 Total Fund $403,599,701 100.0% Fn8,000,000) Performance Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Tenn Operating Fund" 0.51% 0.54% 1.40% 1.17% 1.98% Chandler 0.51% 0.54% - - - Blmbg GovtlCred 1-5 Year lox 0.57% 0.52% 1.38% 1.30% 1.86% ML 1-5 Govt/Corp 0.56% 0.56% 1.43% 1.38% 1.92% Liquid Operating Monies" 0.14% 0.45% 0.30% 0.24% 0.23% Chandler 0.14% 0.45% - - - Citi rou Month Treasuw Bill 0.12% O.M% 0.15% 0.11% .11 Total Fund 0.43% 0.35% 1.16% 1.00% 1.65% Target' 0.47% 0.52% 1,17% 1,12% 1.56% Cunent OuarterTarget=80.0%ML 15 GoWCorp and 20.0%3mo T-Bills. "Assets were transferred in kind to Chandleron 12/1/2014.Previous pedolmance reflects PIMCO. Recent Developments During the quarter, $28.0 million was withdrawn from the total portfolio. The entire sum was taken fromlhe Liquid Operating Monies. Organizational Issues NA Manager Performance - In March, the Federal Open Market Committee (FOMC) raised the federal funds rate to a range of 0.75%-1.00%. The 0.25% rate increase was widely anticipated by the market. FOMC members are currently indicating two more hikes this year of 25 basis points each. U.S. Treasury yields were relatively range-bound in the first quarter. 10-year U.S. Treasury yields fluctuated between 2.3% and 2.6% over the period. After hitting an intra--quarter high of 2.63% on March 13th, the 10-year ended March at 2.40%, five basis points bwer than where it finished 2016.The yield curve was more stable on the long end than the short over Callan Orange County Sanitadw Qstr Mey 1,2017 the three months. One-month Treasury yields rose 30 basis points during the period while 30-year Treasury yields fell four basis points. The Long Term Operating Fund rose 0.51% in the quarter, lagging the ML 1-5 Govt/Corp Index (+0.56%) and ranking in the 30 percentile versus peers. The portfolio was short duration (2.4 versus 2.8 years), which helped relative performance as the very short end of the yield curve rose. However, the portfolio has a slightly lower yield than the benchmark (1.62%versus 1.75%), which effected results. The Long Term Operating Fund had less than 30°% invested in credit and less than the permitted 20% invested in the combination of asset- backed securities, commercial mortgage backed securities, and CMOs as of March 31, 2017 (see page 21). The Liquid Operating Portfolio gained 0.11%(after fees) in the quarter, which slightly trailed the return of the 3-month Treasury(+0.12%).The Portfolio returned 0.30%(after fees) for the trailing 12 months and ranked 31 at percentile versus peers. Cordially, Gordon M.Weightman, CFA Vice President 2 Capital Market Review CA LLAN Callan INSTITUTE L * CMR Preview First Quarter 2017 This "Preview" contains excerpts from the upcoming Capital Broad Market Quarterly Returns Market Review(CMR) newsletter, which will be published in several weeks. U.S.Equity(Russell 3coo)-SM% Non-U.S.Equity(MSCI ACWI ex USA)- 7.86% US.Fixetl(Bloombeg BarclaysA ompar l E 0.82% Steady as She Goes NonU S.Fixed(Bbombeg Beroleys Global ex Us)_ 2.48% U.S. EQUITY I Lauren Mathias, CFA Cash(00-oay T-9IIIs)1 0.10% Soumes'.Bloomberg Barclays,Mar ll Lynch,MSCI,Russell Imastment Group Despite concerns over the Tramp administration's ability to fol- low through on promises of lower taxes and decreased regula- tion,the market accelerated higher in the first quarter.The S&P Up, Up, and Away 500 Index hit a peak(2,396)in March and notched a 6.07%gain U.S. FIXED INCOME I Rufash Lama over the full three-month period.But the quarter was marked by reversals from the previous ona—small cap fell behind large During the first quarter,the U.S. bond market generated posi- cap (Russell 2000 Index: +2.47% vs. Russell 1000 Index: tive returns across the board due in part to strong economic -6.03%) and growth overtook value (Russell 1000 Growth data and upbeat investors. U.S.fourth quarter GDP grew at an Index:+8.91%vs.Russell 1000 Value Index:+3.27%). annualized rate of 2.1%, Consumer spending rose 3.5%, and the unemployment rate fell to 4.7%.High yield bonds performed Continued on pg.2 best; the Bloomberg Barclays High Yield Index Limbed Profits Trump Populism 2.70%for the quarter. Continued on pg.4 NON-U.S. EQUITY I Irina Sushch A Flurry of political skirmishes and uneven growth in Asia failed to deter non-U.S. equity investors, and the "risk-on"theme of Separation Anxiety last year Continued into 2017. The weak U.S. dollar also bol- NON.U.S. FIXED INCOME I Kyle Fekete stered overseas returns for U.S.investors. Sovereign debt performed well in the first quarter amid politi- The MSCI ACWI ex USA Index jumped 7.86% during the cal uncertainty about the future of the European Union (EU). quarter. All of its sectors were in the black, with the excep- Emerging market debt outperformed developed market debt tion of Energy (-0.91%), which was hurt by falling oil prices. for the third straight quarter as the JPM Gall Global Economically sensitive sectors led the pack: Information Diversified Index advanced 6.50% versus the Bloomberg Technology Contributed 14.59% and Industrials added 9.48%. Barclays Global Aggregate ex-US Index's 2.48% gain. Defensive and cyclical sectors such as Telecommunications Returns were bolstered by the U.S.dollar's drop against most (+5.98%)and Real Estate(+6.72%)lagged. currencies. Continued an pg.3 Continued on pg.5 Knowledge.Experience.Integrity. U.S. Equity: Steady as She Goes Rolling One-Year Relative Returns (vs.Russell 1000) Continued from pg. 1 e Russell 1000 GroMh a Russell 1000 Value a Russell 1000 any____ The broader U.S. economy reflected the market's optimism, and to no one's surprise the Fed raised rates a quarter-point 20%----ke�n - - - - - - - - - - - - - - - - --- - in mid-March. Wages continued to rise, consumer confidence was up,inflation moved closer to the 2%target,and unemploy- 1wc__ - - - - - - - - - - - - - - - - - - - . ment fell to 4.7%.Yet some headwinds persisted in the U.S., D% with slowing GDP growth (the fourth quarter trailed the third, 2.1% vs. 3.5%), and significant issues abroad: elections and -10%yvit'l Brexit in Europe,the Syrian war in the Middle East, and South -zD% _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___- Korea's presidential impeachment in Asia. Valuations in the U.S. remain high by various measures, but investors appear a0% ..l"'I"'I"'I"'I"'I"'I"'I"'I'"I"'I"'I"'I"'I'^I"'I"'I"'I"'I^•I• unfazed—for now. 97N Ba 00 01 02 os 04 05 N 07 09 09 1D 11 12 13 14 15 1617 Source:Russell lnv vent Group Technology shares were especially strong; the FANG stocks— Facebook, Amazon, Netflix, and Google—hit record highs Reflecting the reversal in investor preference, the best-per- during the quarter. (Technically it should be the FANA stocks forming sectors in the S&P 500 Index during the quarter were because Google is officially Alphabet—but FANG sounds bet- growth-oriented;Technology(+12.57%)was No.1,followed by ter!) Micro and small cap companies ran out of steam after a Consumer Discretionary(+8.45%),and Health Care(+8.37%). strong 2016, while mid and large cap stocks charged ahead After leading in the fourth quarter, Financials (+2.53%) and (Russell Microcap Index: +0,38%, Russell 2000 Index: Energy(-6.68%)trailed the broad market in the first.Both Health +2.47%, Russell Midcap Index: +5.15%, and Russell 1000 Care and Financials traded on President Donald Tramp's failure Index: +6.03%). Value lost its lead over growth in all capital- to amend the Affordable Care Act—Health Care stocks gained izations(Russell 2000 Value Index:-0.13%vs. Russell 2000 on the certainty of the status quo and Financials dropped on Growth Index: +5.35%). The dispersion in style returns was fear the administration may fall short on deregulation and tax broad across market capitalizations. reform as well.Energy was the worst-performing sector during the quarter as last year's agreement by the Organization of the Petroleum Exporting Countries(OPEC)has not reduced fears of oversupply or meaningfully increased the price of oil. Quarterly Performance of Select Sectors •Russell 1000 •Russel 20M As the U.S. equity market powered on, valuations across indi- ces traded at historically high levels—the S&P 500 Index NTM (next 12 months) P/E was 17.5x versus the 25-year average I of 14x as of March 31, 2017. Correlation (measured by S&P MEI 1 gxa I 500 stocks)ended the quarter below average and at levels not N seen in 10 years, a positive for active management. Volatility (as measured by the CBOE Market Volatility Index, or VIX) also tracked below its average, seemingly unfazed by geopo- litical uncertainty. Technology HealM Can Utilities Energy Souse:Russell li stment Gr., 2 1 Callan Non-U.S. Equity: Profits Trump Populism Rolling One-Year Relative Returns Continued from pg. 1 (vs.MSCI World ex USA,USD hedged) e MSCI Pacific a MSCI Europe a MSCI Ward ex USA Helped by a weaker dollar,emerging markets(MSCI Emerging 40%- - - - - - - - - - - - - ----------------' Markets Index: +11.44%)outperformed their developed peers 30% (MSCI World ex USA Index: +6.81% and MSCI EAFE Index: 20% +7.25%). The MSCI ACWI ex USA Growth Index (+9.13%) 10%__ resumed dominance over the MSCI ACWI ex USA Value Index (+6.68%). Small cap stocks also performed well (MSCI ACWI ex USA Small Cap Index:+8.78%). -20% -30% Politics continued to roil Europe. Most notably, British Prime "00%. 9". .. 1,'1"'I"'I"'I...1'..1... ,...1" 1...I"'1'..1...,..'I' 97M 99 So 01 02 03 04 05 06 07 N 09 10 11 12 13 14 15 1617 Minister Theresa May triggered Article 50 of the Lisbon Treaty soama:Msa on March 29,giving the U.K.two years to negotiate an exit from the European Union.The negotiations are likely to be arduous, In Southeast Asia and the Pacific, Japan's economy grew at particularly conceming trade and immigration. France's presi- a meager(yet notably positive) annualized 1.2% in the fourth dential elections will be held in April and May. Marine Le Pen, quarter. Industdal output and inflation rose and unemployment the far right contender,has consistently led in the polls, in step fell. But the stranger yen (+5%)dampened exporters' returns, with the global rise of nationalist populist movements. On the and Japan ended the quarter up just 4.49%;only New Zealand other hand,the economic outlook brightened in the sure zone. posted worse returns (+1.95%) in the region, owing to a fal- Inflation hit a four-year high (2%) in February. Fourth quarter taring Materials sector (-19.33%). Singapore (+13.46%) and GDP was 1.7% (year-over-year) and positive in each coun- try except Greece (-1.2%). The MSCI Europe Index jumped Hong Kong(tralia dv fared best,thanks to thriving real estate markets.Australia advanced 10.98%, propped up by currency 7.44% in the first quarter; all of the countries posted positive strength.The MSCI Pacific Index was up 6.92% and exclud- retums.Spain(+14.76%)and the Netherlands(+11.33%)con- ing Japan jumped even more (MSCI Pacific ex Japan Index: tributed most, while Ireland (+3.75%) and Norway (+1.43%) +11 76%). lagged. Information Technology (+12.89%) and Industrials (+10.39%) rallied, while Energy stocks (-3.10%) brought up Emerging market returns were boosted by a weaker dollar,am- the rear. nomic growth in China,and rising industrial metal prices. India (+17.12%)and South Korea (+16.85%)were the top perform- ers.The party of India's prime minister, Narendra Modi,won a key regional election despite an abrupt currency recall last year, Regional Quarterly Performance (U.S.Dollar) and the central bank predicted strong economic growth for the china 12.93% next 12 months. Copious gains in IT stocks bolstered Korean MSCI Pacific ex Japan 1176% returns. China, which makes up more than a quarter of the MSCI Emeging Markets 11A4% MSCI Emerging Markets Index, also experienced growth in its Mscl Acwl ex use-7.86% IT sector, as well as in Manufacturing and Real Estate. Fourth quarter GDP came in at 6.8%,and China ended the quarter up MSCI Eumpe-7. % 12.93%. Mexico was among the top performers(+16.03%)as MSCI word ex USA-6.91% the peso rebounded 9%.Russia(4.61%)and Greece(-3.49%) MScl Japan-"9% were the region's poorest performers.Russia was hurt by falling Sooma.MSCI oil prices,and Greece by negative GDP growth. Knowledge.Experience.Integrity. 1 3 U.S. Fixed Income: Up, Up, and Away an excess return of 85 bps and outperformed AAA securities Continued from pg. 1 by 70 bps. Investment-grade and ABS spreads tightened by 5 The Fed increased rates by 25 basis points in March, to a bps and rose 1.22%and 0.54%,respectively.Mortgage-backed securities (MSS) (+0.47%) underperformed duration-matched range of 0.75% — 1.00%, as U.S. economic indicators contin- Treasuries by 17 bps.Commercial mortgage-backed securities ued to signal growth;two additional hikes are expelled over the rest of the year. The Treasury yield curve flattened during the (CMBS) rose 0.86%for the quarter and benefited from strong demand. quarter as short-term Treasuries rose while longer-term issues fell. Despite hitting an infra-quarter high of 2.62%, the bench- Municipal bonds also delivered a strong quarter as expectations mark 10-year Treasury note ended the quarter at 2.39%,5 bps for U.S. tax reform fell and new issuance remained light. The lower than the yield at the end of 2016. For the quarter, U.S. Bloomberg Barclays Municipal Bond Index jumped 1.58%. Treasuries increased 0.67%; long Treasuries(+1.40%)outper- formed intermediate ones (+0.54%). TIPS were up 1.26% as expectations for future inflation rose.At the end of the quarter, Historical 10-Year Yields the 10-year breakeven inflation rate, a market-based gauge of investors'expectations for future inflation,stood at 1.97%. •U.smxaar Taxau,yYard 010-YearTIP3 Yield 81Breeke rIr6alion Role 6% All fixed income sectors reported returns in the black as both s% the corporate credit market and the structured-debt market ben- 4% efited from strong investor demand;the Bloomberg Barclays 3% _ _ _ _ U.S. Aggregate Bond Index rose 0.82%. Issuance in the investment-grade primary market totaled $390 billion, easily 2% surpassing the prior record of$357 billion in the second quarter 1% - - - - - - ----------------- . of 2015. Overall, spreads tightened and investor appetite for o% bonds remained strong despite the headwind of higher rates. High yield spreads over comparable Treasuries tightened by 26 -1% ,071 o„e I oe, I ,10 i l ,n, , l ,tz, , l ,13, , l to, , l , , l „ 1s 16' In, bps and delivered the strongest return.Lower-rated bonds out- source:Bloomberg performed higher-rated issues; BBB-mted securities generated U.S.Treasury Yleld Curves Fixed Income Index Quarterly Returns Mercb 31,2017 •necernber 31,M16 •March 31,2016 4% Bloomberg Bardays Aggregate _0.82% Bloomberg Barclays Treasury _0.67% Bloomberg Bardays Agendes _0.76% 3% - - - ------- BloOmb¢rg Barclays CUSS —U.86% 'INBloomberg Barcl _ ays Ass -O.W% 2% ---- __ _ _ _ _ _ _ _ ___________ Bloomberg Barclays MBS -0.47% Bloomber0 Barclays Credit —1.30% Slaomberg Barda,a Co,High Yield —2,70% 1% Bloomberg Barclays US TIPS —1.26% Soame'.Bloombeig Barclays 0% 1 1 . . 0 5 10 15 20 25 30 Maturity(Years) Source:Bloomberg 4 1 Callan Non-U.S. Fixed Income:Separation Anxiety Emerging Spreads Over Developed (By Region) Continued from pg. 1 e Emegin0 Mran.s a Emerging EME4,as,,...bis nmai a Emerging Asia 8% European sovereign bond yields rose in the midst of critical elections and debate over the future of the EU. The safe- 6% _ haven German 10-year bond climbed 12 basis points to 0.33%, steepening the yield curve to its highest since 2014. 4% ____ _____ _____ _ _ _ _ _ France's 10-year bonds sold off in the middle of the quar- ter as the markets priced in the risk of a potential victory by 2% presidential candidate Marine Le Pen,who wants the French to vote on whether to leave the EU.The Italian 10-year yield o% ' ' ' . ' ' . 13 13 14 15 18 1] jumped 50 bps to 2.32%as an air of political risk also loomed spproa:eippmbam over Europe's third-largest economy. The European Central Bank Continued its stimulus efforts, extending its bond-buying program until December 2017 10-Year Global Government Bond Yields and maintaining interest rates near record lows. Yet there 0U3.Treasury 0Gaimany 4,U.K. •Canada •Japan was renewed Confidence in the region's economic health as 6% a result of solid manufacturing data, strength in the region's 5% labor market, and encouraging inflation news. The sure 4% strengthened against the U.S. dollar, providing some head- 3%---- wind to the hedged Bloomberg Barclays Global Aggregate 2%_____________ ex-US Index,which increased only slightly(+0.06%). In the Asia-Pacific region, Japan's 10-year yield edged up 2 0% bps to 0.07%, in line with the Bank of Japan's goal of main- -1%"m 0 1 "e' i "Ba' 1 "1o' 1 n 1Y i "13' i "14' i "Is, i 1"5' iv' taining its yield at approximately zero. The Reserve Bank of Australia left rates unchanged despite rapid growth in Change In 10-Year Yields from 4016 to 1017 household debt.The Australian 10-year yield declined 6 bps .s bps- U.s.Treasury to 2.70%. Both Countries' currencies advanced roughly 5% Germany - lxbpe against the U.S.dollar. .lobp.- U.K. -10 bps- Canada Emerging markets performed quite well. The U.S. dollar- Japan = 2bps denominated JPM EMBI Global Diversified Index rose Sopn,,Bmorabera 3.87%, and only three countries out of 65 posted negative returns for the quarter. Mexice, the most heavily weighted in the Index, was the strongest performer(+5.46%). Venezuela was the worst, falling 1.29%. Emerging market currencies posted the strongest return (+15.60%). Maxim (+13.60%) also generally appreciated versus the U.S. dollar, account- and Brazil (+9.69%) were also top performers, while Turkey ing for the JPM GBI-EM Global Diversified Index's 6.50% (-0.68%)was the only country to deliver a negative return in rise.Argentina reentered the Index in February, and its debt the Index. Knowledge.Experience.Integrity. 1 5 Active Management Overview 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 Large Cap Equity manager database. Range of Separate Account Manager Returns by Asset Class One Quarter Ended March 31,2017 12% 10% 8% (70)� E 6% (55) 4%- r 2% (54)• 194) 82)� Eid 63) 0% (2%) large Cep Small Cap Non-US Domestic Nan-US Real EquNy Equity Equity Fixed Income Fixed Income Estate V. s vs vs 5&p No Russell 2000 MSCI EAFE Blmbg Aggr Bd Citi NomUS Govt NCREIF Index 10ih Percantil. 9.96 8.16 9.E0 1,32 4.96 3.92 251 Percentile 8.56 Us 8.72 1.08 393 2.87 Median 6,50 305 7.90 0,95 353 1,88 75ih Percentile 4.43 0]] 7.03 0,83 2.78 1,19 90ih Percentile 3.25 (007) 6.27 0,80 2.37 0.31 Index • 6,07 247 7.25 0,82 202 1,55 Range of Separate Account Manager Returns by Asset Class One Year Ended March 31,2017 35% 30% 25% 91)� 20% 9) 15% X. K 10% 63) 5% 0% (5%) 82) (10%) Large Cep Small Cap NomUS Domestic Non-Us Real Evcl Equity Equity Fixed Income Fixed Income Estate Sap50D Russell 2000 MSCI EAFE Blmbg Aggr Bd Giti Non USGovt NCREIF Index 10M Percentile U M 29.98 16.13 2.5] 6.91 14.2] 25ih Percentile 1951. 2689 13.83 1,98 1.03 11.19 Median 17.13 24.10 11.91 1.14 (248) 7.90 75th Percentile IN 2104 9.31 0.64 4.64 5.21 With Percentile 12.52 17.78 6.42 0.34 5.19 (1.19) Callan • 17.17 26.22 11.67 c. (4.80) 7.27 CallanOran,,e County Sanitation District e Domestic Fixed Income Active Management Overview U.S.Treasury yields were relatively range-bound in the first quarter despite a Fed hike in March.The 10-year U.S.Treasury hit an intra-quarter high of 2.62% on March 13 and closed the quarter at 2.40%, five basis points lower than at year-end. TIPS performed relatively well as expectations for future inflation climbed. The 10-year breakeven spread (the difference between nominal and real yields)was 197 bps as of quarter-end, and the Bloomberg Barclays TIPS Index gained 1.3%for the quarter. The Bloomberg Barclays Aggregate Index earned 0.8%; within the Index, corporate bonds outperformed like-duration Treasuries,with BBB-rated credit(+1.7%) posting the strongest returns. Mortgages underperformed Treasuries on a duration-adjusted basis,as expectations that the Fed would begin to trim its reinvestment in the sector weighed on the market. The Bloomberg Barclays High Yield Index gained 2.7%, with lower-rated bonds again outperforming higher-rated issues. Separate Account Style Group Median Returns for Quarter Ended March 31,2017 earning Aggregate: 0.82% 3.5% Blmbg High Yield: 2.70% Blmbg Long GovlCred 1.58% 3.0% 2.5% -------------------------------- 2.55 E 2.0% -- -------------------------------- 119 N ---------------------- .27 1.08 1.0% --------------1195- 0.81 0.5% ----JL4Z— -- 0.0% Defensive Interned core Core Plus Extended Bank High Vleld Band Maturity Loans Separate Account Style Group Median Returns for One Year Ended March 31,2017 Birrng Aggregate. om% 20% Blmbg High Yield 16.39% Biri Long GovlCred 0.98% 15% ----------------------------------148E---- as C � 10% m 8.93 5% 3.15 80 1.02 073 1.14 0% Defensive Intermetl Care Core Plus Extended Bank High Ylek ,,11,,M Band Maturity Loan. L.A3 r charcg County Sanitation District g Asset Allocation Investment Manager Asset Allocation The table below contrasts the distribution of assets across the Fund's investment managers as of March 31, 2017, with the distribution as of December 31,2016.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 March 31,2017 December 31,2016 Market Value Weight Net New Inv. Inv.Return Market Value Weight Domestic Filed Income long Term Operating Fund' 318.418,266 78,89% 0 1.631.030 316.787.228 73,70% liquid ODeratina Monies' 85.180A34 21.11% (28,000,000) 135.734 113,044,701 26.30% Total Fund 0403,598,701 100.0% $(18,000,000) 91,788,n2 $429.01.929 100.0% 'Chandler replaced PIMCO during the 4th Quarter of 2014.Assets were transferred In+lnd as of 1001I2014. Callancoerce county Sandation DisNct „ Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended March 31, 2017. Negative retums 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 March 31,2017 Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating FundA 0.51% 0.54% 1.40% 1.17% 1.98% Chandler 0.51% 0.54% - - Blmbg Govl/Cred 1-5 Year Idx 0.57% 0.52% 1.38% 1.30% 1.86% ML 1-5 Govt/Corp 0.56% 0.56% 1.43% 1.38% 1.92% Liquid Operating MoniesA 0.14% 0.45% 0.30% 0.24% 0.23% Chandler 0.14% 0.45% - - - Citigroup 3-Month Treasury Bill 0.12% 0,34% 0.15% 0.11% 0,11% Total Fund 0.43% 0.35% 1.16% 1.00% 1.65% Target* 0,47% 0,52% 1.17% 1,12% 1,56% Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan Oran,County Santleann Distnd 12 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended March 31, 2017. Negative retums 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 March 31,2017 Last Last Last 10 15 21-1/2 Years Years Years Domestic Fixed Income Long Term Operating FundA 3.15% 3.53% 4.44% Blmbg GovUCred 1-5 Year Idz 2.95% 3.33% 4.25% ML 1-5 Govt/Corp 2.98% 3.34% 4.28% Liquid Operating Monies^ 0.85% 1.48% 2.67% Citigroup 3-Month Treasury Bill 0.61% 1.24% 2.35% Total Fund 2.71% 3.18% 4.17% Target` 2.51% 2.92% 3.90% Current Quarter Target=80.0%MIL 1-5 Govt/Corp and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan Onar,County Sandarinn Distnd 19 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. 12/2016- 3/2017 2016 2015 2014 2013 Domestic Fixed Income Long Term Operating Fund^ 0.51% 1.58% 0.85% 1.98% (1.77%) Chandler 0.51% 1,58% 0.85% - - Blmbg Govl/Cred 1-5 Year Idx 0.57% 1.56% 0.97% 1.42% 0.28% ML 1-5 Govt/Com 0.56% 1.62% 1.05% 1.51% 0.32% Liquid Operating Monies^ 0.14% 0.47% 0.22% 0.09% 0.13% Chandler 0.14% 0.47% 0.22% - Citiarouo 3-Month Treasury Bill 0.12% 0.27% 0.03% 0.03% 0.05% Total Fund 0.43% 1.15% 0.80% 1.73% (1.49%) Target* 0.47% 1.35% 0.85% 1.21% 0.26% *Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. Callan were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan Orarxre County Santlerinn 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. 12/2016- 3/2017 2016 2015 2014 2013 Domestic Fixed Income Long Term Operating Fund^ 0.51% 1.58% 0.85% 1.98% (1.77%) Blmbg Govt/Cred 1-5 Year Idx 0.57% 1.56% 0.97% 1.42% 0,28% ML1-5 Govt/Corp 0.56% 1.62% 1.05% 1.51% 0.32% Liquid Operating Monies- 0.14% 0,47% 0.22% 0.09% 0,13% Ciligroup 3-Month Treasury Bill 0.12% 0.27% 0.03% 0.03% 0.05% Total Fund 0.43% 1.15% 0.80% 1.73% (1.49%) Target` 0.47% 1.35% 0.85% 1.21% 0.26% Current Quarter Target=80.0%MIL 1-5 Govt/Corp and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan 0mr,,e County SantlerinnDist c ,s 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 2.5% 2.0% 1.5% N K 1 0% 0.5% iLLLaWIIC7 0.0% 0.0% 02% 0.6% 0.6% 0.8% 1.0% 1.2% 1.6% 1.8% Standard Deviation Seven Year Annualized Risk vs Return Asset Classes vs Asset Class Median 2.0% 1.8% n% 1.2% 1.0% v 0.8% o6% 0.6% 0.2% 0.0% 0.0% 02% 0.4% 0.6% 0.8% 10% 1.2% 1.6% 1.6% /'�,, 1,, Standard Deviation Callan Omrr County Sandation Oistnd 16 Manager Analysis Chandler-Long Term Operating Fund Period Ended March 31, 2017 Investment Philosophy Chandler Asset Management's Short Term Bond strategy is driven by quantitative models and focuses on active duration management,sector selection and term structure.The strategy seeks to achieve consistent above-benchmark returns with low volatility relative to the style's performance benchmark. The firm has a unique focus on high quality fixed income management, and places risk control as a higher objective than return. Assets were transferred in kind to Chandler on 12/l/2014.Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Long Term Operating Fund's portfolio posted a 0.51%return Beginning Market Value $316,787,228 for the quarter placing it in the 34 percentile of the CAI Net New Investment $0 Defensive Fixed Income group for the quarter and in the 77 Investment Gains/(Losses) $1,631,038 percentile for the last year. • Long Term Operating Fund's portfolio underperformed the Ending Market Value $318,418,266 MIL 1-5 Govt/Corp by 0.04% for the quarter and underperformed the MIL 1-5 Govt/Corp for the year by 0.02%. Performance vs CAI Defensive Fixed Income(Gross) 6% 5% 4% 28)®BE2 3% )27)®BE2 3 2% ® (( ® � ®AE5 301®BE3 ) (( 447 H(5 3) BE4 91 B 4 1% ®A(3 6) B(7pp % Laat Qr Last Chandler Lasl3 Yrs Last 5Ym Last 7Ym LmA10Yra Last20.5Yrs Yr Inception I MP.mentlle oes 252 2,03 1,82 1,95 2.52 342 452 250,Percentile 056 161 1.64 L54 162 2.07 303 431 Median 0.47 102 1,31 1.27 1.25 1.69 2.62 4.00 75M Percentile 0.41 060 1,08 1.04 1.00 1.31 2.33 3.84 90M Percentile 033 030 0.94 0.95 086 1.19 2A0 370 Long Term Operating Fund *A 0.51 0.54 1,31 1.40 1.17 1.98 3.15 4.44 Blmb9 GoWOred 1-5 Year lux IN B 0.57 0.52 1,38 1.38 1.30 1.86 2.95 4.25 AL 1-5 GoWCorp a 0.56 056 143 1.43 1.38 1.92 2.98 4.28 CAI Defensive Fixed Income(Gross) Relative Return vs ML 1-5 Govt/Corp Annualized Seven Year Risk vs Return 2.0% 3.5% 30% E 2.5% E m 2.0% v 0.0% � 1s% 1.0% 1s%) os% 2010 2011 2012 2013 2014 2015 2016 17 00 0.5 1.0 1.5 2.0 Long Term Operating Fund Standard Deviation Callan Omm,e County sanitation Distnct 18 Long Term Operating Fund Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-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 chart illustrates 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 Income(Gross) 20% 15% 1B% (( 5� 1 1 5% e A B ] A ]®A 1 4"A1 17 Bl 072 B( 279 BI et 0% A ) (5%) (10%) 12116&W17 M16 2015 2014 2013 2012 2011 2010 2009 2003 101h Pemenule 0.68 2.82 1.18 1.50 1.20 4.66 2.]2 4.71 13.74 6.63 25th Pemenule 0.56 2.18 1.03 1.2] 0.80 2.On 2.28 4.02 8.60 5.64 Median 04] i56 090 1.11 0.65 181 tel 3.19 "1 3.88 75th Pemereis 041 1.19 0]6 08] 041 146 185 2]2 2.53 (0.1]j 90h PerceMile 0.33 1.03 0.64 0,70 0.31 0.92 1." 2.41 1,82 (3.4] Long Term Opemun9 Fund *A 0.51 1.58 085 1,98 (1,77) 3.06 4.59 442 5.52 5.37 elm GoWCred -5 Year ldx ■B 0.57 1.% 0.97 142 0.28 2.24 3.14 4.08 4.62 5.12 NIL 1-5 GOWCOP A 0.56 1.62 1.05 151 0.32 2.47 3.10 4.17 4.88 4.65 Cumulative and Quarterly Relative Return vs MIL 1-5 GoWCorp 6% 4% 2% of 0% N (6%) (8%) 20m 2008 20P3 2010 2011 2012 2013 2014 2015 2016 17 10 Long Tema Operating Fund E Blmbg GOWCred 1-5 Year Idx 0 CAI Defensive Fixed Inc Risk Adjusted Return Measures vs ML 1-5 GovVCorp Rankings Against CAI Defensive Fixed Income(Gross) Seven Years Ended March 31,2017 38 2.5 2.0 1.5 B�92` 1.0 IINA 9] 0.5 0 (0.5) A 95 Bpt) (1.0) (1.5) Alpha Sharpe Excess Return Ret10 Ratio 1 Olh Percentlla 1.14 2.20 0.65 25th Percenule 0.79 1.8] 0.19 Median 0.43 1.70 0.38 75th Percen118 0.24 1.4] 0.a] 9In Percentile 0.05 1.28 1.09 Longg Term Opecong Fund *A 0.1] 1.02 O.Ofi Blmbg GovVCred 1-5 Vear ltlx ■B 0.0] 1.23 (0.]9) Callan Orarcg County sanitation District 19 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 Cunent holdings are Consistent with other managers employing the same style. Fixed Income Portfolio Characteristics Rankings Against CAI Defensive Fixed Income as of March 31,2017 35 3.0 (3)♦ (6) 25- �(13) 2.0 1.5 (35)�;(55) H(84) 1.0 0.5 0.0 (0.5) A-90 Stand. Coupon CA Duration 'it. Yield Rate convexity 101h Pementile 2.23 2.80 2.28 2.53 0.09 251h PercenNe 1.96 2.15 1.96 2.42 0.05 Median 1.84 1.97 1.66 2.07 0." 75th Percentile i 72 1.91 1.49 1.90 0,02 901h Pemen6le 1.fi0 i.fi9 1.35 1.35 (0.00) Long Term Operating Fund • 2.43 2.51 1.62 1.70 - elmbg Gov/Grad 1-5 Yr ♦ 2.78 2.91 1.85 2.22 pop 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 March 31,2017 vs CAI Defensive Fixed Income �os Tray US Tr, s----____sas___ AAA RMBS COry(IIKI 144A) M+ o (23) Other AA •(54) ASS AA- Tax-Exempt US Muni A+ CMOs Cash A Weighted Average Quality Rating Gov Related sun 10m Percentile AAA 251M1 Percentile AA CMBS Malian AA Satin Percentile AA, in A+ 0% 10% 20% 30% 60% 50% 60% 70% 80% Long Term Operating Fund CAI Defensive Fixed Inoame Long Term Operating Fund 0 AA Callan Gw/Cred 1-5 Yr Blmbg Gav/Cred 1-5 Yr ♦ AA+ Callan Grange County Sanitation Qistdct 20 Long Term Operating Fund Portfolio Characteristics Summary As of March 31, 2017 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 Trsy US Trsy 30% 60% 1% ABS A11111111ftCM0 s )% Clher RUBS 12% 25% Tax-Exam US Muni V 4 Gov13eellated %% Cash con,(inc116dA) Corp 123%144A) 1% 27 % Long Term Operating Fund Blmbg Govt/Credit 1.5 Year Weighted Average: Duration Duration Distribution ■ Long Term 0,among Fund: 2.43 70% ■ Blmbg GOWC%dit l-S Year 2.78 0 60% ——————————Via- —————— —————— —————— —————— 0 ______ ______ o az.1 id ______ __ c g% ______ ______ ______ 0% 0.5 3A <1 1-3 35 5-0 7-10 NO Years Duration WelgMed Average: Duality Quality Distribution Long Term Oyemting Fund M 100% ■ Blmbg GOWCmdit l-S Year: AA+• p80% ______ ___ ___ __ ___ ___ ___ __ ___ ___ 68.8 65.5 L 60% JL�.;M-- M ___ ___ __ ___ ___ ______o 4 20% 10.911.0 T27 6.8 0% APA A BBB Be B CCC CC C 0 NIR Quality Rating Callan Oret6re County Sanitation Disend 21 Chandler-Liquid Operating Money Period Ended March 31, 2017 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 0,11% Beginning Market Value $113.044,701 return for the quarter placing it in the 38 percentile of the CAI Net New Investment $-28,000,000 Money Market Funds group for the quarter and in the 31 percentile for the last year. Investment Gains/(Losses) $135,734 • Liquid Operating Money Nefs portfolio underperformed the Ending Market Value $85,180,434 Citigroup 3-Month Treasury Bill by 0.02%for the quarter and underperformed the Citigroup 3-Month Treasury Bill for the year by 0.04%. Performance vs CAI Money Market Funds(Net) 2. % �(15 2.0% 9) 1.5% 1.0% 8)®(26 30) (38 27) (31 25) (22 24) (24 20) (2B 161 (22 00% Last Oa Last Chandler Last 3 Yrs Last 5Yrs Last 7 Yrs LBMIOYrs Last2o5Yrs Yr I.C.Mlon 10T Percentile 024 O80 043 0.33 0.22 0.19 085 259 25M Percentile 0.14 035 0.19 0.14 0.09 0.07 070 2.42 Msdian 0.08 rite 0.09 0.07 ou 0.03 0.61 2.26 75M Peroantlls 001 002 0.02 0,01 0,01 001 052 2.15 90T Perwntile 000 001 000 0,00 0,00 0W 044 199 Liquid Operating Money Net • 0.11 030 0,22 0,15 0.09 0.08 010 252 Ciligmup 3-Month Treasury Bill ♦ 0.12 034 0,19 0.15 0.11 0.11 0.61 2.35 Relative Returns vs CAI Money Market Funds(Net) Citigroup 3-Month Treasury Bill Annualized Seven Year Risk vs Return 0.10% 2 5% 008% _ 20% E 1s% y 0.02% _ __ __ __ - __ 1.0% s, 0.00% 0.s% 0.0% (0.04%) _ __ __ __ __ __ (0.06%) (0.5%) 2010 2011 2012 2013 2014 2015 2016 17 (0.5) 00 05 10 15 20 2.5 3.0 /'� ■Liquid operating Money NN Standard Deviation Callan Oran,e County Sanitation Oistdct 22 Liquid Operating Money Net Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-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 chart illustrates 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 Money Market Funds(Net) 3.5% 30% 2.6% 2.0% 1.5% 61 1.0% 0.5% 26 22 02 14 0.0% (0.5%) 121163I17 M16 2015 2014 2013 2012 2011 2010 2009 2008 101h PeroarNle 024 071 0.11 007 0.08 0.18 008 0.15 0.52 2.]] 25th PercznOle 0.14 028 003 002 0.02 003 002 005 0.20 2.46 Median 0.08 0.10 0.01 001 0.01 0.01 0.01 0.01 0.12 2.03 75th Pemendle 0.01 0.01 0.00 o rl 0.00 0.01 0.00 0.01 0.03 1.46 Mh Pertende 0.00 cW 000 000 0.00 000 000 run oci 1.08 Liquid Operating Money Net 01 0.11 0.32 0.07 (Orin (0.02) 0.02 ON 0.10 OA3 2.25 Citigrwp 3-MoMh Treasury Bill ♦ 0.12 0.27 0.03 003 0.05 0.07 0.08 0.13 0.16 1.80 Cumulative and Quarterly Relative Return vs Citigroup 3-Month Treasury Bill 1.4% 12% -- --- --- --- ----- ut 1.0% -- --- -- _ - --- --- --- ----- of y 04% 0.2% d o0% (0.2%) 0.4%) 0.6%) 2007 2008 2009 2010 2011 M12 2013 2014 2015 2016 17 Liquid opened,Money Net 0CAI Money Market Funda Risk Adjusted Return Measures vs Citigroup 3-Month Treasury BIII Rankings Against CAI Money Market Funds(Net) Seven Years Ended March 31,2017 10 0 1a) (20) (30) (40) (50)- 7 (e0) (70) Alpha SM1 rpe Excess Return Rad. Ratio 101h Pa.ndle 0.08 0.45 1.02 25th Pa.ndla (0.03) 10.95) 1.03 Median (0.07) 2.951 1.85 75th Peroanhle (0.10) (15.60) 2.08 901h Par ndle (0.11) (5].56) 2.61 /'� Liquid Operating Money Net • MN) (0.63) (0.61) Callan l Orercg County Sendation0istrid 21 Callan Research/Education CALLAN Callan INSTITUTE 1st Quarter 2017 Education Research and Educational Programs The Callan Institute provides both research to update clients on the latest industry trends and carefully structured educational programs to enhance the knowledge of industry professionals.Visit www.callan.condlibrary to see all of our publications,and www.callan.com/blog to view our blog"Perspectives,"For more information contact Anna West at 415.974,5060/institute@callan.mm. New Research from Callan's Experts Smart Beta Is the Gateway Drug to Factor Investing I In this best to worst performance for each calendar year. The Collection paper,a reprint from the Journal of Portfolio Management's spe- includes 10 additional versions,such as the indices relative to in0a- cial issue on Factor Investing,author Eugene Podkaminer, CFA, tion,real estate,and hedge fund sub-strategies. of Callan's Capital Markets Research group describes the con- nection between alternative indices and more sophisticated risk Periodicals premia strategies. Real Assets Reporter, Winter/Spring 2017 1 Avery Robinson, 2017 National Conference: 'It's Private' I A summary of "It's CAIA,explores how we developed our Real Estate Indicators.We Private: Real Estate Debt and Middle Market Direct Lending; a also cover the latest on the real estate market, and share charts presentation from Callan experts Kristin Bradbury,Alex Browning, and tables on the long-term performance of various real assets. and Jay Nayak. Private Markets Trends,Winter 2017 1 Gary Robertson provides Capital Market Projections for 2017-2026 1 Callan prepares an overview of the environment for private equity In 2016 and a look capital market projections annually to help guide clients with their ahead at 2017.He sees continued liquidity in the private equity mar- long-term strategic planning.We publish three pieces authored by ket,and writes that distributions will continue to benefit investors. the team that creates them:Jay Kloepfer,John Pitons,CFA,CAIA, Hedge Fund Monitor,4th Quarter 20161 Jim McKee provides a and Jim Van Heuit. A white paper delves into the process and view of the hedge fund industry and detailed quarterly performance. thinking behind the 2017 figures;a Manifesto outlines the reasons This quarter's cover story:"Alternative Facts and the Evolving Role that Callan produces its annual capital market projections and the of Hedge Funds." rigorous process behind it;and a"charticle°(chart+article)sum- marizes key figures from Callan's 2017 capital market projections. DC observer, tat Quarter 2017 1 Lod Lucas discusses the best approach to crafting,implementing,and maintaining an investment It's a(Fiduciary)Trapl But You Don't Have to Fall In I Defined policy statement for defined contribution plans. contribution (DC) plan sponsors often worry about landing in hot water for doing the wrong thing. However, many fiduciary issues Market Pulse Flipbook,Fourth Quarter 20161 Aquarterly market crop up because plan sponsors have failed to take action.Author reference guide covering investment and fund sponsor trends in Lori Lucas, CFA, Callan's Defined Contribution Practice Leader, the U.S. economy, U.S. and non-U.S. equities and fixed income, lists eight potential fiduciary traps and ways for plan sponsors to alternatives,and defined contribution. avoid falling into them in 2017. Capital Market Review,4th Quarter 20161 A quarterly macroeco- The Callan Periodic Table of Investment Returns(Key Indices: nomic newsletter providing thoughtful insights on the economy and 1997-2016) and Collection I The Periodic Table of Investment recent performance in equity, fixed income, alternatives, interna- Retums depicts annual returns for 10 asset classes, ranked from tional,real estate,and other capital markets. The Center for Investment Training Events Educational Sessions Miss out on a Callan conference or workshop? Event summa- The Center for Investment Training, better known as the -Callan des and speakers presentations are available on our websile: College;provides a foundation of knowledge for industry profes- https:/An ..callan.com/education/Cil/ sionals who are involved in the investment decision-making pro. 'Why Diversify' cess.It was founded in 1994 to provide clients and non-clients alike with basic-to intermediate-level instruction.Our next sessions are: Our June Regional Workshops,June 27 in Atlanta and June 29 in San Francisco, will focus on diversification, which has turned Introduction to Investments out to be very expensive for U.S.-based investors, especially San Francisco,July 25-26,2017 since the Global Financial Crisis.In this workshop,Callan experts Chicago, October 24-25,2017 Mark Andersen, Jay Kloepfer, and Brian Smith analyze diversifi- This program familiarizes fund sponsor trustees, staff, and asset cation from multiple angles, answering the questions of whether management advisors with basic investment theory,terminology, investors erred in adopting diversified portfolios over the last 30 and practices. It lasts one-and-a-half days and is designed for in- years,and what investors should do now. dividuals who have less than two years of experience with asset. Also mark your calendars for our October Regional Workshops, management oversight and/or support responsibilities.Tuition for October 24 in New York and October 26 in Chicago. the Introductory "Callan College" session is $2,350 per person. Tuition includes instruction, all materials, breakfast and lunch on For more Information about events, please contact Barb each day,and dinner on the first evening with the Instructors. Gerraty:415.274.3093/gerraty@callan.com Customized Sessions The "Callan College" is equipped to customize a curriculum to meet the training and educational needs of a specific organization. These tailored sessions range from basic to advanced and can take place anywhere even at your office. Learn more at https://www.callan.com/education/college/or contact Kathleen Curdle:415.274.30291 cunnie@callan.com Education: By the Numbers 500 Attendees(on average)of the 50+ Unique pieces of research the Institutes annual National Conference Institute generates each year 3 500 Total attendees of the'Callan 1980 Year the Callan Institute College since 1994 was founded "We think the best way to learn something is to teach it. Entrusting client education to our consultants and specialists ensures that they have a total command of their subject matter. This is one reason why education and research have been cornerstones of our firm for more than 40 years:" Ron Peyton,Chairman and CEO Callan 9 @CallanAssoc ID Callan Associates Definitions 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 managers 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 risk 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 28 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 disk 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 29 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 30 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 life 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 31 Disclosures Callan 1 Quarterly List as of March 31, 2017 List of Callan's Investment Manager Clients Confidential-For Callan Client Use Only Callan takes its fiduciary and disclosure responsibilities to clients very seriously.We recognize that there are numerous potential cooficts of interest encountered in the investment consulting industry and that it is our responsibility to manage those conflicts effectively and in the best interest of our clients. At Callan,we employ a robust process to Identify,manage,monitor and disclose potential conflicts on an on�oing basis. The list below is an important component of our conflicts management and disclosure process. It identities those investment managers that pay Callan fees for educational,consulting,softwood,database or reporting products and services. We update the list quarterly because we believe that our fund sponsor clients should know the investment managers that do business with Callan,particularly those investment manager clients that the fund sponsor clients may be using or considering using.Please refer to Callan's ADV Pad 2A for a more detailed description of the services and products that Callan makes available to investment manager clients through our Institutional Consulting Group,Independent Adviser Group and Fund Sponsor Consulting Group. Due to the complex corporate and organizational ownerehip structures of many investment management gams,parent and affiliate firm relationships are not indicated on our list. Fund sponsor clients may request a copy of Me most currently available list at any time.Fund sponsor clients may also request specific information regarding the fees paid to Callan by particular fund manager clients. Per company policy.information requests regaling fees are handled exclusively by Callan's Compliance Department. Manager Name Manager Name 1607 Capital Partners,LLC Campbell Global,LLC Aberdeen Asset Management PLC Capital Group Acadian Asset Management LLC CastleArk Management,LLC Ji AEGON USA Investment Management Causeway Capital Management Affiliated Managers Group,Inc. Caramel Hill Investment Management,Inc. IIIIIIIIIII� Alcentra Chartwell Investment Partners AllianceBernstein Cleadridge Investments,LLC _ Arleta,Global Investors Cohen&Steam Capital Management,Inc. Allianz Life Insurance Company of North America Columbia Management Investment Advisers,LLC American Century Investments Columbus Circle Investors Around Smith Breeden LLG Cornerstone Capital Management Angelo,Gordon&Co. Cove Street Capital,LLC Apollo Global Management Counter Rosenthal McGlynn,LLC _ AOR Capital Management Credit Suisse Asset Management Ares Management LLC Crestiine Investors,Inc. Adel Investments,LLC DDJ Capital Management,LLC Mature Capital Management LLC D.E.Shaw Investment Management,L.L.C. Artisan Holdings Defended,Race&Zollo,Inc. Atlanta Capital Management Co.,LLC Deutsche Asset Management Aviva Investors Americas Diamond Hill Capital Management,Inc. AM Investment Managers Dimensional Fund Advisors LP Bathe Gifford Overseas Limited Doubleline Baird Advisors Duff&Phelps Investment Mgmt.Co. Bank of Amerces Eagle Asset Management,Inc. Ratings LLC EARNEST Partners,LLC Broom Capital Management,Inc. Eaton Vance Management Barrow,Hanley,Mewhinney&Strauss,LLC Epoch Investment Partners,Inc. BlackRock Fayez Sarofim&Company BMO Global Asset Management Federated Investors BNP Paribas Investment Partners Fidelity Institutional Asset Management BNy Mellon Asset Management Fidelity Management&Research Boston Partners Finite Capital Corporation Bmndes Investment Partners,L.P. First Eagle Investment Management,LLC Brandywine Global Investment Management,LLC First Hawaiian Bank Wealth Management Division Brown Brothers Harriman&Company Fisher Investments BTG Pactual Franklin Templeton Gambler Investors,LLC Franklin Templeton Institutional Callan I Knowledge.Experience.Integrity. Page 1 of 2 Manager Name Manager Name Fred Alger Management,Inc. Nuveen Investments,Inc. Frost Investment Advisors,LLC OR Global Asset Management Fuller&Thaler Asset Management,Inc. Old Mutual Asset Management GAM(USA)Inc. Opus Capital Management Inc. GlobeFlex Capital,L.P. O'Shaughnessy Asset Management,LLC GMO Pacific Investment Management Company Goldman Sachs Asset Management Peregrine Capital Management.Inc. Great Lakes Ad rums,LLC PGIM Guggenheim Investments PGIM Fixed Income GW&K Investment Management PineBridge Investments Harbor Capital Group Trust Pioneer Investments Hartford Funds PNC Capital Advisors,LLC Hartford Investment Management Co. Principal Global Investors Hagman LLC Private Advisors,LLC Henderson Global Investors Putnam Investments,LLC Patches&Wiley Capital Management,LLC QMA(Quantital Management Associates) HSBC Global Asset Management RBC Global Asset Management Income Research+Management,Inc. Regions Financial Corporation Insight Investment Management Limited Reinhart Partners,Inc. INTECH Investment Management,LLC RidgeWorth Capital Management,Inc. Invesco Rockefeller&Co..Inc. Invested Asset Management Rothschild Asset Management,Inc. Ivy Investments Russell Investments Janus Capital Management,LLC Santa Barbara Asset Management Jensen Investment Management Santander Global Facilities Jobs Peak Advisors Schrader Investment Management North America Inc. J.P.Morgan Asset Management Smith,Graham&Co.Investment Advisors,L P. Keyes Anderson Capital Advisors LP Smith Group Asset Management KeyCorp Standard Life Investments Limited Lazard Asset Management Standish Legal&General Investment Management America State Sheet Global Advisors Lincoln National Corporation Stone Harbor Investment Partners,L.P. LMCG Investments,LLC T.Rowe Price Associates,Inc. Longview Partners Tapir,Centre&Haman Loomis,Sayler&Company,L.P. The Boston Company Asset Management,LLC Lord Abbetl&Company The Hartford Los Angeles Capital Management The London Company LSV Asset Management The TCW Group,Inc. -� MacKay Shields LLC Thompson,Siegel&Wellesley LLC Man Investments Inc. Thornburg Investment Management,Inc. Marietta Asset Management Tn-Star Trust Bank Macquarie Investment Management(formerly Delaware UBS Asset Management Investments) Van Eck Global McKinley Capital Management,LLC FS Investment Management Versus Capital Group M MidFirst Bank Victoryl AsCapital Management Inc. Mondrian Investment Partners Limited Voya Fin Asset Management,Inc. Montag&Caltlwell,LLC Voya Financial Morgan Stanley Investment Management Voya Investment Management(&a ING) Waterton Associates L.L.C. Mountain Lake Investment Management LLC MUFG Union Bank,N.A. WCM a Management Neuberger Berman WEDGE Capital Management Newton Investment Management(fka Newton Capital Wellington Management Company,LLP Wells Capital Management Management) Nikko Asset Management Co.,Ltd Western Asset Management Company Northern Trust Asset Management William Blair&Company Callan I Knowledge.Experience.Integrity. Page 2 of 2 March 31,2017 Investment Report Orange County Sanitation District Period Ending March 31, 2017 0 All Table of Contents SECTION 1 Economic Update SECTION 2 Account Profile SECTION 3 Consolidated Information SECTION 4 Portfolio Holdings SECTION 1 Economic Update 011 Economic Update ■ The Federal Open Market Committee(FOMC) raised the fed funds target rate by 25 basis points to a range of 0.75%- 1.00% in March. There was one dissenting vote from Minneapolis Fed President Neel Kashkari who preferred no rate hike. The Fed noted economic activity expanded at a moderate pace, labor market gains remain solid, and inflation is moving close to the Fed's 2.0% target. The Fed is still projecting a 1.4%fed funds rate by the end of this year, which implies two more 25 basis point hikes. The long-run fed funds rate projection was also unchanged at 3.0%. Notably, the Fed anticipates the longer-run neutral level of the fed funds rate (the level of the fed funds rate that is neither stimulative to the economy nor contractionary) is likely to remain relatively low which should warrant a gradual pace of rate hikes. Fed Chair Yellen indicated the current level of the fed funds rate is below the neutral rate, but not significantly lower. The FOMC did not make any decisions about their balance sheet reinvestment plans and will continue that discussion during future meetings. ■ Domestic economic data remains indicative of slow growth. The economy is likely at or near full employment, consumer confidence is strong, manufacturing indicators have improved, and housing trends remain favorable. Looking further ahead, a potential boost in fiscal stimulus could provide a further tailwind to economic growth. GDP grew by 2.1% in the fourth quarter.We expect GDP growth of 2.0"/0 2.5%in 2017. ■ The Treasury yield curve continued to flatten modestly in March. Short-term Treasury yields (under 2-year maturities) increased while the rest of Treasury yield curve was essentially unchanged. Meanwhile sovereign yields in Germany increased in March, and yields in Japan were little changed. At the end of 2016, following the election, US Treasury yields increased meaningfully driven by heightened expectations for fiscal stimulus and growth under the Trump administration and Republican-controlled Congress. Some of the post-election exuberance regarding fiscal spending, tax reform, and healthcare reform has started to wane, as market participants begin to sense the timeline and magnitude of such policies may be delayed or potentially less robust than previously hoped. s CiIII Employment Nonfarm Payroll (000's) Unemployment Rate 4W 13.0% 35U 12.0% —Underemployment Ram(Ue) 11 0°/ -Unempbym00 enl Rate(U3) ^ 300 0.0% 250 a � u 9.0% a 200 8.0% L 150 7.0% O i 100 6.0% 50 5.0% 0 4.0% O .,15 16A s s°a S s 441,10 q'n,'s s°n,1s 10 a,�> .,�s �s $ ac`7$ a1, 76 141,76 �1s 1s461,7> Sturm:USOep drt &&Labor Sw :USCepaNnent MLaG r Nonfarm payrolls were significantly lower than expected in March, up 98,000 versus the consensus forecast of 175,000. January and February payrolls were revised down by 38,000. On a trailing 3-month and 6-month basis, payrolls increased by an average of 178,000 and 163,000 per month, respectively. The unemployment rate fell to 4.5% in March from 4.7% in February. The participation rate was unchanged at 63.0%. A broader measure of unemployment called the U-6, which includes those who are marginally attached to the labor force and employed part time for economic reasons, decreased to 8.9% in March from 9.2% in February. Wage growth rose 0.2% in March, versus expectations for a 0.3% increase. This follows an upwardly revised gain of 0.3% in February (previously 0.2%). On a year-over-year basis,wages were up 2.7% in March,vs.2.8% in February. GRI Inflation Consumer Price Index (CPI) Personal Consumption Expenditures 3.5% 3.5% (PCE) CPIYOY%CM1enge —PCE Nce MlgN YOY%CM1 2.5%30% �Lwe CPI VOY%LM1ange 3.0% enga PCE Core Rgetor YOY%CSe�ge .5% 2.5% u $ �2.0% - 2.0% L X1.5% 1.5% 9 1.0% >O 1.0% 0.5% 0.5% 0.0% 0.0% -0.5% -45% A "tr 11"R 61 4°t 6, � bl �h � �Ok Q5. �h �1. ��S �S �S �S �B �6 �6 �B �> �S �S �S �S �6 �6 �6 >B O Source:US Department oLLaW Sw :US Department of LaO r The Consumer Price Index(CPI)was up 2.4%year-over-year in March, versus up 2.7%year-over-year in February. Core CPI (CPI less food and energy) was up 2.0% year-over-year in March, versus up 2.2% year-over-year in February. The Personal Consumption Expenditures (PCE) index was up 2.1% year-over-year in February, versus up 1.9% year-over-year in January. Core PCE (excluding food and energy)was up 1.8%year-over-year in February, versus up 1.7%year-over-year in January. Core CPI is in line with the Fed's 2.0%target, and the Fed's primary inflation gauge(PCE) may be approaching the Fed's 2.0%target. IIII© CIR I Consumer Retail Sales YOY % Change Consumer Confidence 7.0% 130 6.0% 125 5.0 20 m 115 c 4.0% - > 110 U J 3.0% - v 105 O c� 2.0% 100 95 1.0% 90 0.0% ¢ a5 y `£ Se Q 4f� ✓4�, `rsp, OpG y ye, 41ek ,� Aeq. k Ilk% 'e; 44A 'Gib `Sea +1 ✓%, '1k 76 70 16 79 '7> 's 7S '1' 7S 7S 18 7C 76 C )B 7C 7) 7) Source:US CePert Ior Cor . Souce:Federal Reserve On a year-over-year basis, total retail sales were up 5.2% in March compared with a 5.1% increase in February. On a month-over- month basis, retail sales declined 0.2% in March, following a downwardly revised 0.3% decrease in February (previously reported up 0.1%). Excluding autos and gas, retail sales increased 0.1% in March, following a 0.1% gain in February. Overall, March retail sales trends and the downward revisions to February sales results were disappointing. Meanwhile, the consumer confidence index remained robust in March at 125.6 versus 116.1 in February. GRI Economic Activity Leading Economic Indicators (LEI) Chicago Fed National Activity Index (CFNAI) a.>% oso 0.6% 0.5% 0.40 d 0.4% v 0.3% IF 0.20 u 0.2% "> c 0 0.0% -at% Y -0.20 -a2% a40 -aa% a4% -aso >S >S >S >S >E >6 >E �>9 �» e'>S >S >S >S o, Source:the COM Mre Boats Source Fe em?Reserve Bank or Chicago The Index of Leading Economic Indicators (LEI) rose 0.4% in March, exceeding expectations of 0.2%, following a 0.5% increase in February. Eight out of ten components in the index were positive contributors in March. According to the Conference Board, the LEI suggests economic growth may accelerate later this year if consumer spending and investment pick up. Meanwhile,the Chicago Fed National Activity Index(CFNAI)decreased to 0.03 in March on a 3-month moving average basis from 0.16 in February. The CFNAI suggests that the economy is growing at a slow pace. s CIRI Housing Housing Starts S&P/CaseShiller20 City Composite Home 1600 Price Index 6.5% •Mu10 Famlly Hou.-Sfatls Y 1400 �SIn8le Famlly Wu®ng 5lar@ 6.0% `0 1200 1000 orn 5.5% 5 0 F 800 ti 5.0% T 600 4.5% � O c 400 U 4.0% C 200 f p 3.5% 44, ( y 4,JS. 76 l,S O�I,S ya'J6. 6. J6. 1& -y'1j ��s �i'�s 's fills I& -%,'7s s 41.1s 1> Souse:US Census Bureau Soumm S&P Total housing starts fell 6.8% in March, following a 5.0% increase in February. Single-family starts fell 6.2% in March, and multi-family starts declined 7.9%. However, both single-and multi-family starts are up on a year-over-year basis. Permits were slightly stronger than expected in March, due to a 14.0% gain in mufti-family permits. According to the Case-Shiller 20-City home price index, home prices were up 5.7%year-over-year in January, compared to 5.5%in December. C1111 Manufacturing Institute of Supply Management Purchasing Capacity Utilization Manager Index 80.0% so Expanding 58 79.0% 56 78.0% 54 X 77.0% sz 8 76.0% 50 48 75.0% Contn tlng 46 74.0% ya.S lkI& �l1s Oac70 4 1, 70 �pi•70 10 O�1G ya•�1 ya,10 1�n•)S �IS O�'$ "k's Itk's %76 %1s "1"', Source:Inaifule for Supply Management Source:Fetleral Reserve The Institute for Supply Management (ISM) manufacturing index decreased to 57.2 in March from 57.7 in February, suggesting that manufacturing activity remains above trend. Notably, a reading above 50.0 suggests the manufacturing sector is expanding. Meanwhile, capacity utilization, which is production divided by capacity, increased to 76.1% in March from 75.7% in February. The capacity utilization rate remains below the long-run average of 79.9% (1972-2016), suggesting there is still excess capacity in the industrial sector. Gross Domestic Product (GDP) Gross Domestic Product(GDP) 6.0% Personal consumption Expenditures 1.1% 2.9% 2.0% 2.4% 5.0% Gross Private Domestic Investment -0.6% -1.3% 0.5% 1.5% 4.0% 3.0% Net Exports and Imparts 0.0% 0.2% 0.9% -1.8% 2.0% 1.0% Federal Government Expenditures -0.1% 0.0% 0.2% -0.1% 0.0% State and Local(consumption and Gross _10% r�GDP DOG%Charge Investment) 0.4% -0.3% 0.0% 0.1% GDP YOY%Ch"e p� p� Q Total 0.8% 1.4% 3.5% 2.1% "pO,� °p�11�% I'og "2 'x22 B lot 11O%' `p 11 O%'S °h 0.4@ oh O ) ) 2 2 u' 9 � S B Source: US Dapanmenf or Commerce Soule: USDeevhnentof Conxn According to the third estimate, fourth quarter real GDP grew at an annualized rate of 2.1%, 0.2% higher compared to the prior estimate. This compares to growth of 3.5% in the third quarter of 2016. Personal consumption expenditures continued to fuel GDP growth in the fourth quarter, while net exports detracted from growth. The consensus forecast for first quarter GDP growth has been trending downward. Market participants are currently forecasting GDP growth of just 1.4% in the first quarter of 2017. iii� G111 Bond Yields US Treasury Note Yields US Treasury Yield Curve 3.5% 3.5% 2-Yeer —Ma117 3.0% � Year 3.0% �0ec-16 10-Yeer —Mervib 2.5% 2.5% X 2.0% 92.0% Y 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% loor 0.0% 0.0% Source:BW bery Source:Bloomberg 0 Over the past three months, the yield curve Flattened, following a dramatic post-election curve steepener. In the past three months,the 2-year Treasury yield is up about 7 basis points and the 10-year Treasury yield is down about 6 basis points. Notably, shorter-term yields (1-year and under) are up more than 20 basis points during that time period. On a year-over-year basis the 2-year Treasury yield has increased 53 basis points and 10-year Treasury yield is up about 62 basis points. IIIIIIIII� SEA Account Profile so � 011 Objectives Investment Objectives The investment objectives of the Orange County Sanitation District are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio; second, to provide sufficient liquidity to meet all operating requirements; and third, to earn a commensurate rate of return consistent with the constraints imposed by the safety and liquidity objectives. Chandler Asset Management Performance Objective Liquid Operating Monies—will be compared to the 3-month T-Bill rate and operate with a maximum maturity of one year. Long-Term Operating Monies—will be compared to the Bank of America Merrill Lynch 1-5 Year Corporate Government Rated AAA—A Index. Strategy In order to achieve these objectives, the portfolio invests in high quality fixed income securities consistent with the investment policy and California Government Code. �jjjj Compliance fill OrangeCounty Sanitation District Long Term March 31,2017 POLICYCOMPLIANCE WITH INVESTMENT Assets managed by ChandlerAsset Management are in full compliance Wth State lawand Wth the investmentpolicy Category Standard Comment Treasury Issues 5 years maximum maturity Complies* Supranational "AA"or better by of3NRSROs; 30%maximum; 5%maxissuer; 5yearsmaturity, Complies Includes only: IADB BIRD,and IFC per CGC U.S.Agencies 20%max issuer; 5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better long term rating by 1 of 3 NRSROs; 30%maximum;5%max issuer; 5 years Complies max maturity Municipal Securities "A"or higher by l of 3 NRSROS;10%mabmum; 5%max issuer, 5years maximum Complies maturity Asset Backed/CMOs/Mortgage- "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 NRSROs; 20% Complies* backed maximum 5%max issuer(excluding MBS/ ovtagency);5 ars max maturity Negotiable CDs "A"or better on its long term debt by l of 3 NRSROs; "At/P1"or highest shortteml Complies ratings by l of 3 NRSROs; 30%maximum;5%max issuer, 5years max maturity CDs/TDS 5%max issuer, 5years max maturity Complies Bankers Acceptances A-1,or equivalent highest short term rating by l of 3 NRSROS; 40%maximum; 5%max Complies issuer' 180 days max maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS; "A"or better by l of 3 NRSROs,if long term debt Complies issued' 25%maximum' 5%max issuer, 270 days max maturity Mutual Fund&Money Market Highest rating by 2 NRSROs; 20%maximum; 10%max per mutual fund; 20%max per Complies Mutual Fund pronary,market mutual fund Repurchase Agreements 102%collateralization Complies Reverse Repurchase A reements 5%mabmum 90 days max maturity Complies LAIF Not used by investment adviser Complies Avg Duration Not to exceed 00 months - (80%to 120%of the benchmark) Complies Maximum Maturity 15 years maximum maturity Complies* "The podfdio has twenty-four(24)secunties with maturities greater than 5 years including one(1)ABS,five(5)CMOs,secenteen(17)MBS and one(1)treasury. All sacudties were inherited from the nnnOus manager and complied at time 0 pumhase. C1111 Portfolio Characteristics Orange County Sanitation District Long Term 3/31/2017 12/31/2016 Benchmark` Portfolio Portfolio Average Maturity(yrs) 2.73 2.80 2.87 Modified Duration 2.61 2.43 2.48 Average Purchase Yield n/a 1.62% 1.57% Average Market Yield 1.62% 1.55% 1.51% Average Quality" AAA AA/Aa1 AA+/Aai Contributions/Withdrawals -10,117 Total Market Value 318,223,280 316,592,849 `BAML 1-5 Yr US Corporate/Gov:Rated AAA-A Index '"Benchmark is a blended rating of S&P, Moody's,and Fitch.Portfolio is S&P and Moody's respectively. Multiple securities were purchased across the Treasury,Agency, Supranational, Asset Backed, Commercial Paper and Corporates sectors of the market to keep the portfolio structure in-line with Chandler objectives. The purchased securities ranged in maturity from July 2017 to February 2022. Several securities were sold and two matured to help facilitate the additions to the portfolio. Sector Distribution Orange County Sanitation District Long Term March 31, 2017 December 31,2016 Negotiable ABS CD ABS 1.3 US Treasury 7.4% 7.1% 29.7% US Treasury 30.1 Agency Agency 24.6% 23.7% CMO CMO 0.9% Commercial 0.9% Paper Commercial Paper US Corporate 4.0% US Corporate 3.6% 22 9% Money Market Fund FI 22.4% Money Market 0.9% Fund FI Supranational Municipal Mortgage Supranational Municipal Mortgage 1.9% 75% Bonds Pass Thru 66� Bonds Pass Thm 1.5% 0.6% 1.5% 0.7% The sector allocation of the portfolio was stable with no sector change greater than 1.0%of the portfolio. Issuers CAROrange County Sanitation District Long Term Issuer Report Account M70268 As ot5rdt2Dn Govemmenl of United States US Treasury 29.75% Federal National Mortgage Association Agency 9.53% Federal Hume Loan Bank Agency 7.97% FWcml Home Loan Mortgage Corp Agency 7.07% Inter-American Dev Bank Sup sational 3.62% John IXo,ABS ADS 2.59% Imematiotal Finance Corp SuPmnational 2.34% Bank of Toky.Mie UFJ Commercial Paper L"% Toyota Motor Cory Commercial Paper 1.97% Wells Fargo Cory US Corporate 1.75% JP Morgan Chase&Co US Corporate 1.68% Honda ADS ABS 1.66% General Electric Cc US Corporate 1. 0% Deere&Company US Corporate 1.59% Qualcomm Inc US Corp", 1.59% Intl Bank R.and Development Supressaiaral 1.57% Bank of New York US Corporate 1.46% Bank of America Corp US Corporate 1.44% ChevronTexaco Corp US Corporate 1 AI% HSBC USA Corp US Corporate, L34% 1P Morgan ABS ABS 130% Honda Motor Corpoximn US Corporate 1,27% Eli Lilly&Co US Corporate 1.17% Apple Inc US Corporate L26% Nissan ABS ABS 1.08% Morgan Stanley US Corporate: 0.98% American Express Credit US Corporate L%% Exxon Mobil Corp US Corporate 0.95% Microsoft US Corporate 0.93% Dreyf Treasury Money Market Fund Money Market Fund FI 0.87% Port Authority ofNcw York and New Jersey Municipal Bonds 0.85% Toyota ABS ABS 0.72% Federal Dome Loan Mortgage Corp CMO 0.66% KI Issuers Continued C/" Orange County Sanitation District Long Term Issuer Report Account#10266 As of 3/3112017 Intel Corp US Corporate 0.63% Occidental Petroleum Corporation US Corporate 0.63% Federal National Mortgage Association Mortgage Pass Ihru 0.51% New York City Transitional Finance Authority Municipal Bonds 0.48% Goldman Sachs Inc. US Corporate 0.20% University of California Municipal Bonds 0.14% NCUA Guaranteed Notes CMO 0.11% Federal National Mortgage Association CMO 0.10% GNMA Mortgage Pass"fhru 0.08% AMRESCO Residerttal Securities Corp Morigegc Pass Th. 0.04% Small Business Administration ASS 0.02% SLM Corp ASS 0.01% GNMA CMO 0.01% Federal Home Loan Mortgage Corp Mortgage Pass"Item 0.00% Total 100.00% Quality Distribution Orange County Sanitation District Long Term March 31, 2017 vs. December 31, 2016 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% AAA AA A <A NR •3/31M11 1213112016 AAA AA A cA NR 03/31/17 13.3% 65.5% 10.9% 3.48/o 6.8% 12/31/16 16.6% 65.0% 10.2% 3.40/6 4.8% 6oum :58P Rrtings Duration Distribution Orange County Sanitation District Long Term Portfolio Compared to the Benchmark as of March 31, 2017 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 0-0.25 0.25-0.50 0.50-1 1-2 2-3 3-4 4-5 5+ �PanMb � Berlphinark' 0-0.25 0.25-0.50 0.50-1 1 -2 2-3 3-4 4-5 5+ Portfolio 4.3% 10.5% 13.9% 15.1 % 17.7% 23.0% 12.1 % 3.4% Benchmark' 0.1 % 0.0% 1.6% 31.0% 29.3% 22.5% 15.7% 0.0% `BAML 1-5 Vr US Corporate/Gov Rated AAA-A Index The duration of the portfolio contracted slightly, currently 2.43 versus 2.48 at the end of the prior reporting period. The Chandler team will be looking to opportunistically increase the duration of the portfolio in the coming quarter. KI Investment Performance NINE Orange County Sanitation District Long Term Period Ending March 31, 2017 Total Rate of Return Annualized Since Inceptor, November 30,2014 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 12 months 2years 3years 5years 10 years Since Inception .Orange County Sanitation District Long Term Annualized 3 months 12 months 2 years 3 years 5 years 10 yearn Since InCBptlOn Orange County Sanitation District Long Term 0.52% 0.45% 1.01% N/A N/A N/A 1.12% BAIL 1-5 Vr US Corporate/Gout Rated AAA-A Index 0.47% 0.21% 0.94% N/A N/A N/A 1.08% Total rate of return:A measure of a poMolio's performance over time.It is the intemal 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. C1111 Compliance C1" Orange County Sanitation District Liquid March 31,2017 COMPLIANCE • Assets managed by ChandlerAsset Management are in full compliance wth State lawand with the investment policy Category Standard Comment Treasury Issues l year maximum maturity; Minimum allocation of 10% Complies Supranational "AA"or better by l of 3 NRSROs; 30%maximum; 5%max issuer; 1year Complies maturity', Includes only: IADB IBRD,and IFC per CGC 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;5%max issuer; Complies 1 year max maturity Asset Backed/CMOs "AA"or better by l of 3 NRSROs: "A"or higher issuer rating by l of 3 NRSROs; Complies 20%maximum; 5%max issuer, 1 year max maturity Negotiable CDs "A"or betteron its long term debt by l of 3 NRSROs; "A1/P1"or Nghestshort Complies tens ratings by 1 of 3 NRSROs; 30%maximum;5%max issuer, 1 year max maturity CDs/TDS 5%max issuer;1 year max maturity Complies Bankers Acceptances A-1,or equivalent short tens mting by l of 3 NRSROS;40%maximum;5%max Complies issuer, 180 days max maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS;"A"or better by l of 3 NRSROs,if long Complies tens debt issued; 25%maximum;5%max issuer,270 days max maturity Mutual Fund&Money Market Mutual Fund Highest rating by 2 NRSROs; 20%maximum; 10%max per mutual fund; 20% Complies max per money market mutual fund Repurchase Agreements 102%collaterelization Complies Reverse Repurchase A reements 5%maximum,90 days max maturity Complies LAIF Not used by investment adviser Complies Prohibited Municipal Securities Complies Prohibited Mortgage Securities Complies Avg Duration Not to exceed 180 days; Max duration of 1/2 year Complies Maximum Maturity 1 year maximum maturity Complies C1111 Portfolio Characteristics Orange County Sanitation District Liquid 3/31/2017 12/31/2016 Benchmark` Portfolio Portfolio Average Maturity(yrs) 0.15 0.16 0.14 Modified Duration 0.15 0.16 0.14 Average Purchase Yield n/a 0.69% 0.52% Average Market Yield 0.71% 0.73% 0.55% Average Quality" AAA AAA/Aaa AAA/Aaa Contributions/Withdrawals -28,000,000 Total Market Value 85,177,162 113,042,677 `BAML 3-Month US Treasury Bill Index '"Benchmark is a blended rating of S&P, Moody's,and Fitch.Portfolio is S&P and Moody's respectively. Many securities were purchased across the Treasury,Agency, Commercial Paper and Corporate sectors of the market to keep the portfolio invested in short maturity assets. The purchased securities ranged in maturity from April 2017 to March 2018. Multiple securities matured throughout the quarter; $28 million was withdrawn from the portfolio in January. Sector Distribution SEEN Orange County Sanitation District Liquid March 31,2017 December 31,2016 Agency US Treasury 31.2% 34.8% US Treasury 46.9% Agency 46.4% Commercial Paper US Corporate 3.2% 5.8 Money Market Fund FI Supmnational US Corporate Negotiable 4.4% 1.8% Commercial 104% CD Negotiable Money Market Paper Supranational 14% CD Fund Fl P 2.5% 1.0% 5.0% 5.2% The sector allocation changed materially due to the impact of the maturing securities and the aforementioned $28 million withdrawal. The two largest percentage changes were the 12.1% increase in the Treasury allocation, to 46.9%of the portfolio, offset by the 15.2%decline in the Agency allocation, to 31.2%of the portfolio. Issuers C/" Orange County Sanitation District Liquid Issuer Report Account 010282 As of 3/31QO17 Government of Uniled States US Ireu,", 46.93% Federel Home Loan Bank Agency 19.77% Fedeal National Mortgage Association Agency 10.11% Dreyfus Treasury Money Market Fund Money Market Fund FI 4.41% Federal Home Loan Mortgage Corp Agency 2.35% Bank of Tokyo.Mit UFJ Commercial Paper 2.00% Intl Bank Recon and Development Suprenational 1.37% Toronto Daninion Holdings Negotiable CO 1.36% Generel Electric Co US Corporate 1.22% Wells Fargo Corp US Corporate 1.19% Berkshire Hathaway US Corporate 1.18% ChevmnTexaco Corp US Corporate 1.18% Oracle Corp US Corporate 1.19% Apple Inc US Corpomte 1.18% International Finance Corp Supmnational 1.19% Deere&Company US Corporate 1.18% Honda Motor Corporation US Corpoate 1.18% Toyota Motor Credit Corp Commercial Paper 1.17% US Baranrp US Corpumte 0.97% Total 100.00% Quality Distribution Orange County Sanitation District Liquid March 31, 2017 vs. December 31, 2016 100.0% 60.0% 60.D% 40.0% 20.0% 0.0% AAA AA A <A NR W31117 12131116 AAA AA A <A NR 3/31/17 79.9% 15.7% 4.4% 0.0% 0.0% 12/31/16 70.7% 26.2% 3.1 % 0.0% 0.0% Source:S&P Ratings GKI Duration Distribution Orange County Sanitation District Liquid Portfolio Compared to the Benchmark as of March 31, 2017 120.0% 100.0% eo.0% 60.0% 40.0% 20.0% 0.0% 0-0.25 0.25-Ds) 0.50-1 1-1.5 1.5-2 2-2.5 2.5-3 3+ �Palfdb � Banchnark' 0-0.25 0.25-0.50 0.50-1 1 -1.5 1.5-2 2-2.5 2.5-3 3+ Portfolio 74.3% 20.9% 4.8% 0.0% 0.0% 0.0% 0.0% 0.0% Benchmark' 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 'BAML 3-Month US Treasury Bill Index `The duration of the portfolio was relatively stable, currently 0.16 versus 0.14 at the end of the prior quarter. The maturity structure of the portfolio remains short to account for the upcoming forecasted liquidity needs in June, July, and August. KI Investment Performance Orange County Sanitation District Liquid Period Ending March 31, 2017 Total Rate of Return Annualized Since Inception November 30,2014 0.50% 0.45% 0.40% 0.35% 0.30% 0.25% 0,20% 0.15% 0.10% 0.05% 0.00% 12 months 2years 3years 5Were 10 years Since Inception •Orange County Sanitation District Liquid BAIL 3-Month US Treasury Bill Index Annualized 3 months 12 months 2 years 3 years 5 years 10 yearn Since InCBptlOn Orange County Sanitation District Liquid 0.14% 0.46% 0.39% N/A N/A N/A 0.37% BAML 3-Month US Treasury Bill Index 0.10% 0.36% 0.24% N/A N/A N/A 0.21% Total rate of return:A measure of a poMolio's performance over time.It is the intemal 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. �jjjj Compliance OCSD Lehman Exposure March 31,2017 COMPLIANCE • Assets managed by Chandler Asset Management are in full compliance mith State lawand with the investment policy Category Standard Comment Treasury Issues 5 years maximum maturity Complies Suprenational "AA"or better by of NRSROs; 30%maximum; 5%max; 5years maturity, Includes Complies only. IADB,BIRD,and IFCper CGC U.S.Agencies 20%max issuer, 5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better long term rating by l of 3 NRSROs; 30%maxmum;5%max issuer; 5 Complies' years max matudty Municipal Securites "A"or higher by l of 3 NRSROS; 10%maximum; 5%max issuer, 5 years maximum Complies maturity Asset Backed/CMOs/ "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 NRSROs; 20% Complies Mortgage-backed maximum; 5%max issuer(excluding MBS/gout agency);5 years max maturity Negotiable CDs "A"or betteron its long tens debt by l of 3 NRSROs; "A1/P1"or highest shortterm Complies ratings b 1of3 NRSROs; 30%maximum;5%max issuer, 5 years max maturity CDs/TDS 5%max issuer, 5 years max maturity Complies Bankers Acceptances A-1,or equivalent highest short term rating by l of 3 NRSROS; 40%maximum; 5% Complies max issuer 180 days max maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS; "A"or better by l of 3 NRSROs,if long term debt Complies issued; 25%maximum; 5%max issuer; 270 days max maturity Mutual Fund B Money Market Highest rating by 2 NRSROs; 20%maximum; 10%max per mutual fund; 20%max per Complies Mutual Fund money market mutual fund Repurchase A reements 102%collateralization Complies Reverse Repurchase 5%maximum,90 days max maturity Complies Agreements LAIF Not used by investmentadAser Complies Avg Duration Not to exceed 60 months - 80%to 120%of the benchmark Complies Maximum Maturity 5 years maximum maturity Complies -Account holds$2 million face value(cusip 525ESCOy6)and$600,000 face value(cusip 525ESC1137)of defaulted Lehman Bros Holdings that vrere purchased by the predous manager. Complied at time of purchase. IS Account Profile Portfolio Characteristics OCSD Lehman Exposure 03/31/2017 12/31/2016 Portfolio Portfolio Average Maturity(yrs) 21.50 21.65 Modified Duration 0.00 0.00 Average Purchase Yield 0.00 % 0.00 Average Market Yield 0.00 % 0.00 % Average Quality* NR/NR NR/NR Total Market Value 187,121 183,871 SECTION 3 i Consolidated Information S,`I Account Profile Portfolio Characteristics Orange County Sanitation District Consolidated 03/31/2017 12/31/2016 Portfolio Portfolio Average Maturity(yrs) 2.25 2.16 Modified Duration 1.95 1.86 Average Purchase Yield 1.42 % 1.29 Average Market Yield 1.37 % 1.26 % Average Quality* AA+/Aa1 AA+/Aa1 Total Market Value 403,587,563 429,819,397 Portfolio is S&P and Mows respectively. Sector Distribution Orange County Sanitation District Consolidated March 31, 2017 December 31, 2016 us—Corp MBS US COT 20.3% 0.5% 18.0% CP CP _ MBS 3.8% 4.2%- 0.5% Munkipak Municipals 1.2% 1.1% MMF USTmasury MMF 1.6% MA% 2.7% CMO CMO us Tmasury 0.7% 01% / 31.3% PBS Negotiable CD ABS 5.8% 0.3% 5.2% Common Stock i,. Negotiabk CD 0.0% /1.2% Agovey ". 26.0% Supra6.5% tional Agency Common Sloth 28.0% 6.5% 29.7% 0.0% Supramfional 5.3% SECTION 4 1 IN _'==- Portfolio Holdings ��" Orange County Sanitation District Long Term Holdings Report Account 010268 As of 3/31/17 Purchase Da:o Cost Va:u Mid Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va u: Mkt YTM Accrued Int. Gain/Loss Fitch Duration ABS 89231TAB6 Toyota Auto Receivables Owner 2015-C 76,628.87 08/18/2015 76,62271 99.99 76,619.14 0.02% Aaa I AAA 0.88 0.92%Due 2/15/2018 0.93% 76,626S9 1A3% 31.33 (7.55) NR 0.02 43814GAC4 Honda Auto Receivables 2014-2 A3 274,870.98 0410812015 274,677.71 99.93 274,675.27 0.09% Aaa/AAA 0.97 0.77%Due 3/19/2018 0.83% 274,859.12 1.32% 76.43 (183.85) NR 0.13 43814NAB1 Honda Auto Receivables 2016-1 A2 1,302,300.19 0211612016 1.302,170.09 99.98 1,302,038.43 0.41 % NR/AAA 1.22 1.01%Do.6/1812018 1.02% 1,302,231.90 1.10% 474.98 (193.47) AAA 0.22 4778nAD6 John Deere Owner Trust 2014E A3 1,442,709.85 02/04/2015 1,443,386.11 99.95 1,442,021.68 0.45% Aaa/NR 1.63 1.07%Due 11/1512018 1.05% 1,442,862.51 1.24% 686.09 (840.83) AAA 0.28 89236WAC2 Toyota Auto Receivables Owner 2015-A 2,207,690.52 02/24/2015 2207,356.72 99.90 2,205,544.64 0.69% Aaa/AAA 1.88 1.12%Due 2/15/2019 1.13% 2,207,591.52 1.35% 1,098.94 (2,046.88) NR 0.43 47788NAM John Deere Owner Trust 2016-B A2 2,980,000.00 07/19/2016 2,979,818.22 99.91 2,977,353.76 0.94% Asa INR 1.88 1.09%Due 211512019 1.10% 2,979,866.54 L28% 1,443.64 (2,512.78) AAA 0.47 65478WAB1 Nissan Auto Receivables Owner 2016-C 2,085,000.00 0810212016 2,084,917.85 Was 2,082,456.30 0.65% Asa/NR 2.12 A2A 1.08% 2,084,936.92 1.30% 991.53 (2,480.62) AAA 0.54 1.07%Due 5/15/2019 43814TAB8 Honda Auto Receivables 2017-1 A2 1,885,000.00 0312112017 1,884,954.95 100.03 1,885,525.92 0.59% Aaa/NR 2.31 1.42%Due 712212019 1.43% 1,884,955.16 1.39% 223.06 570.76 AAA 0.83 161571HHO Chase CHAT Pool k2016-A7 4,140,000.00 MIN12016 4,139,643.13 99.92 4,136,609.34 1.30% Aaa I AAA 2.46 1.06%Due 9/16/2019 1.08% 4.139,837.61 1.25% 1,950.40 (3,228.27) AAA 0.44 47787XAB3 John Deere Owner Trust 2017-A A2 1,410,000.00 02/22/2017 1,409,994.36 99.98 1,409,651.60 0.44% Aaa INR 2.54 1.5%Due 1011512019 1.50% 1,409,994.54 1.53% 1,703.75 (332.94) AAA 1.06 654747AB0 Nissan Auto Receivables 2017-A A2A 1,365,000.00 031210H7 1,364,993.04 100.00 1,364,993.18 0.43% Aaa/NR 2.79 1.47%Due 1/15/2020 1.47% 1,364,993.07 1.48% 891.80 0.11 AAA 1.04 47788MA04 John Deere Owner Trust 2016-A A3 2,420,000.00 02/23/2016 2.419,619.09 99.79 2,414,968.82 0.76% AmINR 3.04 1.36%Dua 411512020 1.37% 2.419,719.06 1.54% 1,462.76 (4,750.24) AAA 1.18 438140AC2 Honda Auto Receivables 2016-2 A3 1,810,0W.W 0512412016 1,809,964.89 99.80 1,806,408.96 0.57% Aaa INR 3.04 1.39%Due 411512020 1.40% 1,809,972.46 1.54% 1,118.18 (3,563.6)) AAA 1.34 83162CUO Small Business Administration 2001-20C 62,182.39 031M12001 62,182.39 104.46 64,956.35 0.02% Aaa/AA- 3.92 6.34%Due 3/1=1 6.34% 62,182.39 4.20% 328.53 2,773.96 AAA 2.06 78445JAA5 SLMA 2008-9A 36,564.38 MIU/2008 34,424.15 102.00 35,256.49 0.01 % Baa31 AA+ 6.07 2.537%Due 4/25/2023 2.60% 34,506.35 2.05% 160.79 748.14 B 3.46 23,494,725.41 23,479,087.88 7.38% Aaa I AAA 2.29 Total ABS 23,495,947.18 1.23% 23,495,135.84 1.36% 12,642.21 (16,047.961 AAA 0.68 AGENCY 3137EADVB FHLMC Note 5,000,000.00 06/25/2015 4,994,250.00 99.96 4,998,155.00 1.57% Ann/AA+ 0.29 0.75%Due 7/14/2017 0,81 % 4,999,201,60 088% 8,020.83 (1,046.60) AAA 0.29 3137EADN6 FHLMC Note 5,000,000.00 0112312015 4,967,500+00 99.77 4,988,720.00 1.57% Aaa/AA+ 0.79 075%Do.1/12/2018 0.97% 4,991,409+43 1.04% 8,229.17 (2,689.43) AAA 0.77 3137EADPI FHLMC Note 5,000,000.00 01/13/2015 4.974,100.00 99.77 4,988,690.00 1.57% Am/AA,, 0.93 0.875%Due W12018 1.04% 4,992,329.27 1.12% 2,916.67 (3,639.27) AAA 0.93 Chandler Asset Menpemant-CONFIDENTIAL 35 C�" Orange County Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Purchase Da:o Cost Va:u: Nut Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt YTIM Accrued Int. Gain/Loss Fitch Duration AGENCY 313378A43 FHLB Note 7,500,000.00 02/11/2015 7,544,850.00 100.23 7,517,205.00 2.36% Ann/AA+ 0.94 1.375%Due 319I2018 1.18% 7,513,683.05 lA3% 6,302.08 3,521.95 AAA 0.93 3135GOG72 FNMA Note 5,000,000.00 1211812015 4,963,950.00 99.76 4,987,940.W 1.57% Aaa/AA+ 1.71 1.125%Due 12114/2018 1.37% 4,979,409+46 1.27% 16,718.75 8,530.54 AAA 1.68 3133782102 FHLB NO. 7,500,000.00 Various 7.589,190.00 100.26 7,519,807.50 2.37% Aaa/AA+ 1.94 1.5%Due 3/8/2019 1.14% 7,550,466.60 1.36% 7,187.W (30,659.00) AAA 1.90 3137EADMB FHLMC Note 7,500,000.00 Various 7,399,650.00 99.44 7,458,172.W IN% Aaa/AA+ 2.51 1.25%Due 101212019 1.61 % 7,434,068.56 1.48% 46,614.50 24,103.94 AAA 2.44 313383HU8 FHLB Note 5,000,000.00 M11312015 5,008,950+00 WAS 5,009,470.00 1.58Is Aaa/AA+ 3.20 1.75%Due 6/12/2020 1.71 % 5.005,926.08 1.69% 26,493.06 3,543.92 NR 3.08 3135GOD76 FNMA Note 6,000,000.00 11/16/2016 4,956,660.00 99.56 4,978,110.W 1.57% Aaa/AA+ 3.23 1.5%Due 6/22/2020 1.70% 4,968,883.68 1.64% 20,625.00 9,226.32 AAA 3.12 3135GOF73 FNMA Note 7,500,00.0 Various 7,370,726.00 99.17 7,437,675.W 2.WIs Aaa/AA+ 3.67 1.5%Due Il/MI2020 1.87% 7,404,396.21 1.73% 37,812.50 33,278+79 AAA 3.53 313OA7CV5 FHLB Note 5,365,000.00 0211712016 5,343,32SAO 90.47 5,282,877.95 1.66% Aaa/AA+ 3.89 1.375%Due DIW2021 1.46% 5,348,166.70 1.78% 8,811.27 (65,287.75) AAA 3]5 3135GOJ20 FNMA Note 10,000,000.00 Various 10,040,950.00 98.24 9,823,940.W 3.09% Aaa/AA+ 3.91 1.375%Due 212612021 1.28% 10,034,870.29 1.84% 13,368.06 (210,930.29) AAA 3.77 3135GOS38 FNMA Note 3,000,000.00 0113012017 2,994,570.00 99.96 2,998,881.00 0.95% Aaa/AA- 4.77 2%Due 1I5/2022 IN% 2,994,751.00 2.01% 13,666.67 4,130.00 AAA 4.50 78,147,661.40 77,989,663.95 24.58% Asa I AA+ 2.46 Total Agency 78,365,000.00 1.38% 78,217,560.83 1.47% 216,766.14 (227,916.88) AAA 2.38 C610 628881JAA8 NCUA Guaranteed Note CMO 2010-R2 357,959,00 11/10/2010 357,957,39 100.02 358,018.42 0.11 % Aaa/AA. 0.60 1.353%Due 11/612017 0.00% 357,957.39 1.32% 290.01 61.03 NR 0.08 31398VJ98 FHLMC FHMS K006 A2 900,000.00 11/23/2010 951,046A8 IM.02 954,186.30 0.30% Aaa/AA+ 2.82 4.251%Due 112512020 3.54% 915,707.91 1.83% 3,188.25 38,478.39 AAA 2.51 3837H4NX9 GNMA PooIN 2000-9 28,936.98 0112412000 28,936+98 100.41 29,054.46 0.01 % Aaa/AA+ 12.89 1.478%Due 2/16/2030 1.49% 28,936S8 1A7% 33.28 117A8 AAA 0.03 3133TCE95 FHLMC FSPC E3A 39,012.55 03/11/1998 39,053.37 104.88 40,917.30 0.01 % Aaa/AA+ 15.39 3.082%Due W1512032 3.05% 39,030.84 2.08% 100.20 1,886.46 AAA 1.58 313%X305 FNMA FNR 2W7-114 A6 397.59 0111012008 378.21 99.93 397.32 0.0)% Aaa/AA+ 20.59 1.182%Do.10/27/2037 1.54% 384.20 1.20% 0.05 13.12 AAA 0.12 31397OREO FNMA FNR 20113 FA 316,282.00 1212012010 316,183.17 101.41 320,728.92 0.10% Aaa/AA+ 23.92 1.663%Due 2I25I2041 1.66% 316,203.46 1.30% 87.65 4,625.46 AAA 0.10 313WY35 FHLMC FSPC T4i82A 954,273.47 O6/WI2011 1,080,714S9 116.09 1,107,854.24 0.35% Aaa/AA+ 26.50 6.5%Due 9I25/2043 5.40% 1,058,002+24 3.33% 1,033.80 49,852+00 AAA 4.98 2,774,270.69 2,811,156.96 0.88% Aaa I AA+ 14.56 Total CMO 2,596,861.59 3.55% 2,716,223.02 2.29% 4,733.22 94,933.94 AAA 2.86 Chandler Aesel Management-CONFIDENTIAL 36 CAROrangeCounty Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Purchase Da:o Cost Va:u Mut Price Market Value %of Pod. Moody]S&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va u: Mid YTM Accrued Ind. Gain/Loss Fitch Duration COMMERCIAL PAPER 06538BU76 Bank of Tokyo Mitsubishi NV Discount 6,345,000.00 03/06/2017 6,319,627.05 99.68 6,324,826.43 1.99% P-1 /A-1 027 CP 1.20% 6,324,826A3 L20% 0.00 0.00 NR 0,27 1.18%Due 717/2017 89233GV29 Toyota Motor Credit Discount CP 6,300,000.00 12/22/2016 6.251,999.25 99.58 6,273,524.25 1.97% P-1/A-1+ 0.34 1.23%Due 812/2017 1.26% 6,273,524.25 1.26% 0.00 0.00 NR 0.34 12,571,626.30 12,598,350.68 3.96% P-1/A-1 0.30 Total Commercial Paper 12,645,000.00 1.23% 12,598,350.68 1.23% 0.00 0.00 NR 0.30 MONEY MARKET FUND FI 261908107 Dreyfus Trsy/Agcy Cash Management 2,783,196.78 Various 2,783,196,78 1.00 2,783,191 0.87% Aaa/AAA 0.00 521 0.61 % 2,783,196.78 0.61% 0.00 0.00 AAA 0.00 2,783,196.78 2,783,196.78 0.87% Aaa/AAA 0.00 Total Money Market Fund FI 2,783,196.78 0.61% 2,783,196.78 0.61% 0.00 0.00 AAA 0.00 MORTGAGE PASS THRU 31381PDA3 FNMA FN 466397 357,855.81 12/01/2010 350,111.61 1".18 372,824.20 0.12% Aaa/AA+ 3.59 3.4%Due 1111/2020 3.80% 355,051.80 2A5% 236.58 17,772.40 AAA 3.27 36225CAZ9 GNMA Pooh#G280023 24,891.95 MINII997 25,304.22 103.21 25,691.50 0.01 % Aaa/AA+ 9.73 1.625%Due 12120/2026 1,52% 25,028+62 1.99% 33.71 662.96 AAA 4.55 36225CC20 GNMA PooI#G280088 28,982.87 08/11/1997 29,616A8 103.19 29,907.60 0.01 % Aea/AA+ 10.23 2.42%Due 612012027 2.28% 29,200.13 2.01% 58.45 707A7 AAA 4.67 31348SM3 FHLMC FH 786064 2,364.35 02/180M0 2,306.77 102.92 2,433.34 0.00% Aaa/AA+ 10.76 3.057%Due 1/112028 3.25% 2,342.12 2.61% 6.02 91.22 AAA 4.58 3137INUC7 FNMA FN 257179 23,613.49 121OWNII 24,973+58 107.44 25,370.88 0.01 % Ass/AA. 11.01 4.5%Due V112028 3.72% 24,531A8 2.05% 88.55 839.70 AAA 3.46 31417YAY3 FNMA Pool#FN MA0022 28,029.80 12/05/2011 29,644.25 107.46 30,119.62 0.01 % Aaa/AA+ 12.01 4.5%Due 4/1/2029 3.76% 29,149.44 2.31% 105.11 970.18 AAA 3.58 3138EG6F6 FNMA FN AL0869 17,667.47 1210512011 18,685+08 107.41 18,977.27 0.01 % Aaa/AA+ 12.18 4.5%Due 611/2029 3.77% 18,376+18 2.08% 15.46 601.09 AAA 3.12 03215PFN4 AMRESCO Residential Samoans 1999-1 133,743.29 05/20/2011 100,432.85 94.23 126,026.30 0.04% NR IAA+ 12.24 A 5.51 % 111,217.02 2.70% 50.00 14,809.28 BBB 8.22 1.923%Due 6/2512029 36225CNM4 GNMA Pool#G280395 10,213.04 0311512000 10,120+47 103.59 10,579.61 0.00% Me/AA+ 13.06 2.42%Due 4/20/2030 2.48% 10,172.64 1.94% 20.60 406.97 AAA 4.90 36225CN28 GNMA Pool#G280408 82,019.13 03/15/2000 81,186A4 103.46 84,856.66 0.03% Aea/AA+ 13.15 2.42%Due 512012030 2.49% 81,654.31 2.06% 165.41 3,202.35 AAA 6.23 31403GXF4 FNMA Pool#FN 748678 4,979.68 O6/1012013 5,353.15 109.73 5,464.27 0.00% Me/AA+ 16.52 5%Due 10/112033 4.16% 5,284.56 2.51% 20.75 179.71 AAA 3.91 36225DCBB GNMA Pool#G280965 84,228.29 07/19/2004 84,175.65 103.92 87,525.91 0.03% Aaa/AA+ 17.32 2.09%Due 7/20/2034 2.10% 84,197.83 1.83% 146.70 3,328.08 AAA 4.66 Chandler Ae nManagement-CONFIDENTIAL 37 OROrange County Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Descriptiona u: Mid Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security MORTGAGE PASS THRU 31406XWT5 FNMA For*FN 823358 141,969.84 01/11/2006 140,86071 105.28 149,469.82 0.05% Ann/AA- 17.85 3.275%Due 211I2035 3.34% 141,288.14 0.91 % 387.46 8,181.68 AAA 1.96 314%POY8 FNMA P.I#FN 815971 269,292.32 G611012013 289,489.26 1G9.38 294,545.75 0.09% Aaa/AA+ 17.93 5%Due 311/2035 4.21 % 286,022+11 2.69% 1,122.05 8,523.64 AAA 4.17 31407BXH7 FNMA Pool#FN 826080 28,209.60 0611012013 30,325.31 109.21 30,807.28 0.01 % Aaa/AA+ 18.26 5%Due 711/2035 4.22% 29,967.64 2.69% 117.54 839.64 AAA 4.18 31376KTU FNMA FN 357969 164,593.09 G6/10/2013 176,937.57 109.43 180,122.12 0.06% Aaa/AA+ 18.43 5%Due 911/2035 4.22% 174,866.67 2.65% 160.02 5,255.45 AAA 4.21 31403DJM FNMA Pool#745580 159,334.92 NIIO12013 171,285.04 1M.41 174,330.25 0.05% Aaa/AA+ 19.18 5%Due 611/2036 4.26% 169,346.02 2.71% 663.90 4,984.23 AAA 4.22 3141OF4V4 FNMA P.I#FN 888336 314,186.24 M/1012013 337,760.23 109.40 343,722.26 0.11 % Aaa/AA+ 19.27 5%Due 7I1/2G36 4.25% 333,940A3 L84% 1,309.11 9,781.83 AAA 3.10 1,908,558.77 1,992,774.72 0.63% Aaa I AA+ 14.56 Total Mortgage Pass Than 1,876,175.18 3.90% 1,911,636.84 2.20% 4,707.42 81,137.88 AAA 4.01 MUNICIPAL BONDS 73358WAG9 Pon Authority of NY&NJ TE-REV 2,440,000,00 Various 2,507,633,89 109.24 2,665,529.20 0.85% Aa3/AA- 2.67 5,309%Due lW/2019 4,97% 2,457,319+87 1,75% 43,179.87 208,209,33 AA- 2.47 64971M5E8 New York NY TE-REV 1,400,000.00 1012712010 1,400,000+00 106.63 1,492,862.00 0.48% Ant/AAA 3.59 4.075%Due 11/1/2020 4.08% 1.400,000.00 2.14% 23,770.83 92,862.00 AAA 3.29 913366EJ5 Univ of California Rgts Med TE-REV 400,000.00 11I09/2010 400,000.00 111.m 4,tE536.00 0.14% Aa3/AA- 4.13 5.035%Due 511512021 5.04% 400,000.00 2A3% 7,608.44 45,536.00 NR 3.69 4,307,633.89 4,603,927.20 1.47% Aa21 AA 3.11 Total Municipal Bonds 4,240,000.00 4.68% 4,257,319.87 1.91% 74,559.14 346,607.33 AA 2.85 SUPRANATIONAL 4595OKBS8 International Finance Corp Note 5,000,000.00 03/16/2015 5,020,700.00 99.99 4,999,405.00 1.58% Ann IAAA 0.07 1%Due 412412017 0.80% 5,000,619A2 1A8% 21,805.56 (1,214.12) NR 0.06 4581XOCGI Inter-American Dev Bank Note 5,000,000.00 MIK12015 5,019,550.00 99.97 4,998,520.00 1.57% Aaa I AAA 0.29 1%Due 7/14/2017 0.81 % 5.002,70372 1.10% 10,694.44 (4,183.72) AAA 0.29 4590MEJB Intl.Bank Recon&Development Note 5,000,000.00 Various 4,991,170,00 99.65 4,982,630.00 1.57% Me IAAA 1.21 1%Do.6/15/2018 1.07% 4,996,006.12 1.29% 14,722.22 (13,376.12) AAA 1.19 4581XOCS5 Inter-American Day Bank Note 3,500,000.00 0712 016 3,590,405.00 99.70 3,489,615.51) 1.10% Aaa I AAA 3.96 1.875%Due 3115/2021 1.30% 3,577,108+58 1.95% 2,916.67 (87,493.08) AAA 3.79 4595DKCJ7 International Finance Corp Note 2,500,000.00 ll/D9/2016 2,441,600.00 96.33 2,408,240.00 0.76% Aaa IAAA 4.31 1.125%Due 7/20/2021 1.64% 2,446,441.10 2.02% 5,546.88 (38,201.10) NR 4.16 Chandler Aseer Menegement-CONFIDENTIAL 38 CAROrangeCounty Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Purchase Da:o Cost Va:u: Mut Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security Description Par Value/Units Book Yie d Book Va Mut Y7rM Accrued Int. Gain/Loss Fitch Duration SUPRANATIONAL 4581XOCW6 Inter-American Dev Bank Note 3,000,000.00 01/10/2017 2,996,310.00 100.38 3,011,490.00 0.95% Aaa/NR 4.81 2.125%Due 1/1812022 2.15% 2,996,457.52 2.04% 12,927.08 15,032,48 AAA 4.52 24,059,735.00 23,889,900.50 7.53% Asa/AAA 1.94 Total Supranational 24,000,000.00 1.19% 24,019,336.16 1.49% 68,612.85 (129,435.66) AAA 1.86 US CORPORATE 11 06050TLX8 Bank of America Note 600,000.00 05/01/2014 600,000.00 100.04 600,261.00 0.19% Al/A+ 0.10 1.454%Due 51812017 1.45% 600,000.00 1.03% 1,284.12 261.00 NR 0.10 94988J21.0 Walls Fargo Bank Callable Note Curly 500,000.00 NIOW2014 W0,000.00 100.03 500,142.50 0.16% Aa2/AA- 0.21 6/15/2016 0.41 % 500,000.00 0.27% 90.70 142.50 AA 0.21 0.408%Due 6/15/2017 060505DP6 Bank of America Corp Note 3,800,000.00 01/15/2014 4,334,014.00 102.64 3,900,217.40 1.25% Baal/BBB+ 0.67 5.75%Due 121112017 1.95% 3,892,410.93 1.75% 72,833.33 7,806.47 A 0.65 166764AAB Chevron Corp Callable Note Cunt 2,000,000.00 121M12014 1,08,600.00 99.83 1,996,668A0 0.63% Aa2/AA- 0.68 11&17 1.30% 1.997,410.99 1.38% 7,114.67 (742.99) NR 0.59 f.104%Due 121512017 458140AL4 Intel Corp Note 2,000,00D00 01/26/2015 2,008,280.00 100.06 2,001,290.00 0.0% Al/A+ 0.71 1.35%Due 12115/2017 1.20% 2,002,032+58 1.26% 7,950.00 (742.58) A+ 0.70 40628HPH9 HSBC USA Inc Note 3,000,000.00 Various 3.003,290.00 99.94 2,998,116.00 0.95% A2IA 0.80 1.625%Due 111612018 1.59% 3,000,875.35 1.70% 10,156.25 (2,759.35) AA- 078 38141GFG4 Goldman Sachs Group Inc Note 600,000.00 Various 692,806.00 103.27 619,603.20 0.20% A3/BBB+ 0.80 5.95%Due 111812018 2.73% 614,339.50 1SO% 7,239.17 5,263.70 A 078 674599CD5 Occidental Petroleum Callable Note Cont 2,000,000.00 011MIN15 1,986,340.00 99.97 1,999,39SM 0.63% MIA 0.88 1/15/18 1.73% 1.996,141.92 1.53% 3,833.33 3,254.08 A 0.78 1.5%Do.V1512018 025816AY5 American Express Coach Note 2,900,000.00 Various 3,377,385.79 105.01 3,045,234.90 0.96% A3/BBB+ 0.97 7%Due 311912018 4.20% 2,964,865.70 135% 6,766.66 80,369.20 A 0.94 073902CD8 Bear Stearns Note 3,200,000.00 0111WH14 3,523,520.00 103.43 3,309,878.40 1.05% A31NR 1.25 4.65%Due 7/212018 2.25% 3.291,095,90 1.86% 36,786.67 18782.50 A+ 1.21 532457BF4 Eli Lilly B CO Note 4,000,000.00 Various 4,009,675.00 100.70 4,027,916.00 1.27% A2/AA- 1.96 1.95%Due 3115/2019 1.89% 4,004,43274 1.59% 3,466.67 23,483.26 A 'Si 02665WAH4 American Honda Finance Note 4,000,000.00 Various 4,046,640.00 100.87 4,034,972.00 1.27% Al/A+ 2.38 2.25%Due 8/1512019 1.93% 4,029,041.41 1.87% 11,500.00 5,930.59 NR 2.30 06406HCW7 Bank of New York Callable Note Cont 2,120,000.00 0211012016 2,142,175.20 100.95 2,140,095.48 0.67% At/A 2.45 wll/2019 1.99% 2.135,027.53 1.89% 2,708.89 5,067.95 AA- 2.29 2.3%Due 9/11/2019 24422ESS9 John Dears Capital Corp Note 5,000,000.00 Various 5,046,984.00 101.07 5,053,685.00 1.59% A2/A 2.46 2.3%Due 9/16/2019 2,07% 5,026,366.27 1.85% 4,791.67 27,318.73 A 2.38 Chandler Asset Management-CONFIDENTIAL 39 ��" Orange County Sanitation District Long Term Holdings Report Account As of 3/31/17 Purchase Da:o Cost Va:u: Mid Price Market Value %of Pod. Ml Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt Y7M Accrued Int. Gain/Loss Fitch Duration US CORPORATE 36962G7MO General Electric Capital Corp Callable 5,000,000.00 Various 5,014,950.00 101.08 5,053,980.00 1.60% Al/AA- 278 Note 1X 1M/2019 2.13% 5,008,499.02 118% 25,055.55 45,480.98 AA- 2.59 2.2%Due 1/92020 46625HKA7 JP Morgan Chase Callable Note Cant 2,000,000.00 0210612015 1.994,880.00 100.34 2,006,886.00 0.63% A3/A- 2.82 1212312019 2.30% 1.997,090.07 2.12% 8,500.00 9,795.93 A+ 2.63 2.25%Due 112312020 4042811PR7 HSBC USA Inc Note 1,250,000.00 02/05 016 1,222,787.50 100.26 1,253,226.25 0.39% A2/A 2.93 2.35%Due 3I52020 2.92% 1,230,410+66 2.26% 2,121,53 22,815+59 AA- 2.81 747525AD5 Oualcomm Inc Note 5,000,000.00 OW1912015 4,995,195AO 100.22 5,011,075.00 1.59% Al/A+ 3.14 2.25%Due 512012020 2.27% 4.996,985.61 2.18% 40,937.51 14,089.39 NR 2.99 94974BGM6 Wells Fargo Corp Note 5,000,000.00 07/16/2015 5,001,660.00 100.99 5,049,440.00 1.59% A2/A 3.31 2.6%Due 7/22/2020 2.59% 5,001,090.97 2.29% 24,916.67 48,349.03 AA- 3.14 037833BS8 Apple Inc Callable Note Cant 1/23/2021 4,000,000.00 OW2312016 4,050,840.00 100.30 4,012,128.00 1.26% Aa1/AA+ 3.90 2.25%Due 2/23/2021 1.98% 4.041,585.51 2A7% 9,500.00 (29,457.51) NR 3.70 30231 GAV4 Exxon Mobil Corp Callable Note Cant 3,000,000.00 Various 3,016,097AO 100.19 3,005,802.00 0.95% Aaa/AA+ 3.92 212021 2.10% 3,013,237.08 2.17% 5,555.01 (7,435.06) NR 3.73 2.222%Due 31112021 166764BG4 Chavron Corp Callable Note Cant 2,500,000.00 OW20IN16 2,485,350.00 99.12 2,478,020.00 0.78% Aa2/AA- 4.13 Vl MD21 2.23% 2.487,857.51 2.32% 19,687.50 (9,837.51) NR 3.90 2.1%Due V16/2021 61747WAL3 Morgan Stanley Note 2,800,000.00 06/O6/2014 3,200,848.00 110.90 3,105,065.60 0.98% AS I BBB+ 4.33 5.5%Due 7/28/2021 3.24% 3,043,064.13 2.81% 26,950.00 62,001.47 A 3.85 594918BPB Microsoft Callable Nate Cont 7/e/21 3,045,000.00 Various 3,041,385.15 97.44 2,967,133.26 0.93% Aaa IAAA 4.36 1.55%Due 802021 1.57% 3.041,852.35 2.17% s948.52 (74,719.09) AA-, 4.17 0640BRAA5 BANK OF NY MELLON CORP Note 2,500,000.00 02/08/2017 2,504,475.00 100.04 2,501,122.50 0.79% At[A 4.86 Callable 117/22 CONT 2.56% 2,504,35T43 2.59% 9,760.00 (3,234.93) M. 4.44 2.6%Due 2/72022 73,788,168.44 72,671,354.49 22.95% At/A+ 2.54 Total US Corporate 71,815,000.00 2.18% 72,420,071.16 1 96% 356,444.42 251,283,33 A+ 2.40 US TREASURY 912828SSO US Treasury Note 2,500,000.00 12/22/2015 2.500203.68 100.02 2,500,395.00 079% Aaa IAA+ 0.08 0,875%Due 4/3012017 0,87% 2,500,011,96 O68% 9,185.08 383.04 AAA 0.08 91282SG20 US Treasury Note 2,500,000.00 Various 2,487,195.87 99.95 2,498,827.50 0.79% Aaa/AA+ 0.63 0.875%Due 11/15/2017 1.05% 2,497,257A7 0.95% 8,278.66 1,570.03 AAA 0.62 912828UR9 US Treasury Note 3,500,000.00 AM/2016 3,496,457.04 99.72 3,490,158.00 1.10% Aaa/AA+ 0.92 0.75%Due 2/2812018 0.81 % 3,498,249+55 1.06% 2,282.61 (8,091.55) AAA 0.91 9128281533 US Treasury Note 11,000,000.00 Various 11.042,439,19 100.46 11,051,126.00 3.48% Aaa/AA+ 1.84 1.5%Due 1/31/2019 1.37% 11,025,102.49 1.24% 27,368.07 26,026.61 AAA 1.80 912828SN1 US Treasury Note 5,000,000.00 12282016 5,016,423.00 100.47 5,023,635.00 1.58% Aaa/AA+ 2.00 1.5%Due 3/312019 1.35% 5,014,564.92 1.26% 204.92 9,070.08 AAA 1.97 Chandler Aseel Menegerant-CONFIDENTIAL 40 ��" Orange County Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Purchase Da:o Cost Va:u: Mut Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security Description Par Value/Units Book Yie d Book Va Mkt YTM Accrued Int. Gain/Loss Fitch Duration US TREASURY IM 912828WS5 US Treasury Note 2,000,000.00 Various 1,996,861.44 100.65 2,013,046.00 0.64% Ann/AA+ 2.25 1.625%Due 6/3012019 1.66% 1,998,571.45 1.33% 8,169.89 14,474.55 AAA 2.20 912828WW6 US Treasury Note 5,000,000.00 Various 5,012,388.70 100.63 5,031,249.99 1.59% Aaa/AA+ 2.33 1.625%Due 713112019 1.57% 5,005,820+39 1.35% 13,466.85 25,429+60 AAA 2.28 912828F39 US Treasury Note 5,800,000.00 10/27/2014 5.873,186.87 100.89 5,851,881.00 1.84% Aaa/AA+ 2.50 1.75%Due 9/3012019 1.48% 5,837,122.60 1.38% 277.33 14,768.40 AAA 2.44 91282BG61 US Treasury Note 7,500,000.00 12/19/2014 7,449,634.50 100.17 7,512,600.00 2.37% Ass/AA+ 2.67 1.5%Due 1113012019 1.64% 7,472,835.02 1.44% 37,706.04 39,764.98 AAA 2.59 912828XE5 US Treasury Note 5,000,000.00 12/21/2016 4,966,423+00 99.75 4,987,500.00 IN Is Aaa/AA+ 3.17 1.5%Due 5/31/2020 170% 4.969,096.33 1.58% 25,137.36 18,403.67 AAA 3.07 91282BL99 US Treasury Note 5,500,000.00 Various 5,424,666.87 98.91 5,439,841.00 1.72% Aaa/AA+ 3.59 1.375%Due 10/31Y2020 1.67% 5,445,016.67 1.89% 31,754.14 (5,175.67) AAA 3.46 9128281489 US Treasury Note 6,000,00000 Various 5,895,840.41 98.60 5,915,862.00 1.86% Aaa/AA+ 3.84 1.375%Due 113112021 1.81 % 5,903,593+35 1.75% 13,674.03 12,268+65 AAA 3.71 912828TM US Treasury Note 7,000,000.00 Various 6757,914.08 96.75 6772,227.00 2.13% Aaa/AA+ 4.50 1.125%Do.9/3012021 1.88% 6,773,309.66 1.88% 215.16 (1,082.56) AAA 4.36 91282BT67 US Treasury Note 6,000,000.00 12/13/2016 5,813,691.98 97.20 5,831,952A0 1.84% Ass/AA+ 4.59 1.25%Due 1013112021 1.92% 5,824,983.38 1.89% 31,491.71 6,968.62 AAA 4.40 91282BU65 US Treasury Note 7,000,000.00 12/28/2016 6,900,492+20 W.35 6,954,339.00 2.20% Aaa/AA+ 4.67 1.75%Due 11/30/2021 2.06% 6,905,642.02 1.90% 41,057.69 48,696.98 AAA 4.43 91282SV72 US Treasury Note 3,000,000.00 02/27/2017 3,004,814.74 99.78 2,993,436.00 0.94% Ass/AA+ 4.84 1.875%Due 1/31/2022 1.84% 3,004729.05 1 M% 9,323.20 (11,293.05) AAA 4.59 912828WUO US Treasury Inflation Index Note 10,634,208.00 Various 10,520,376.09 99.07 10,534,980.20 3.31 % Aaa IAA+ 7.30 0.125%Due 711512024 023% 10,550,891.93 025% 2,79075 (15,91173) AAA 7.25 94,159,D09.66 94,403,057.69 29.75% Anal AA+ 3.45 Total US Treasury 94,934,208.00 1.44% 94,226,798.14 1,37% 262,363.49 176,259,55 AAA 3.35 317,994,586.34 317,222,450.85 100.00% Aat I AA 2A0 TOTAL PORTFOLIO 316,751,388.73 1.62% 316,645,629.32 1.55% 1,000,828.89 576,821.53 AAA 2.43 TOTAL MARKET VALUE PLUS ACCRUED 318,223,279.74 Chandler Asset Management-CONFIDENTIAL 41 OROrange County Sanitation District Liquid Holdings Report Account#10282 As of 3/31/17 Purchase Da:o Cost Va:u: Mut Price Market Value %of Pod. Moodi Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt YTM Accrued Int. Gain/Loss Fitch Duration AGENCY 313385EXO FHLB Discount Note 5,000,000.00 01/31/2017 4,993,475.00 99.96 4,997,975.00 5.87% P-1/A-1+ 0.08 0.54%Due 4/26/2017 0.55% 4,997,975.00 0.55% 0.00 0.00 F-1+ 0.08 3131 FNMA Discount Note 4,000,000.00 01/20/2017 3,993,990.50 91 3,998,215.00 4.69% P-1IA-1+ 0.08 054%Due 511/2017 0.54% 3,998,215+00 0.54% 0.00 0.00 F-1+ 0.08 313385FE1 FHLB Discount Note 2,000,000.00 0112012017 1.996,791.67 99.95 1,998,961.11 2.35% P-1 I A-1+ 0.10 0.56%Due 515/2017 0.56% 1,998,961.11 0.56% 0.00 0.00 F-1+ 0.10 313385GR1 FHLB Discount Note 9,000,000.00 03/30/2017 8,986,332.51 99.85 8,986,717.51 10.55% P-1/A-1+ 0.19 0.77%Due 619/2017 0.78% 8,986,717.51 0.78% 0.00 0.00 F-1+ 0.19 31398AD1,11 FNMA Note 4,500,000.00 Various 4,571,305+00 101 4,538,727.00 5.41 % Aaa/AA+ 0.20 5.375%Due 6/12/2017 0.74% 4.540,807.36 0.99% 73,234.37 (2,080.36) AAA 0.20 3137EADH9 FHLMC Note 2,000,000.00 03/30/2017 2,000,880.00 100.03 2,000,622.00 2.35% Aea/AA+ 0.26 1%Due 6/29/2017 0.82% 2,000,870.22 0.87% 5,111.11 (248.22) AAA 0.24 26,542,774.68 26,521,217.62 31.23% Aaa/AAA 0.15 Total Agency 26,500,000.00 0.68% 26,523,546.20 0.73% 78,345.48 (2,328.58) AAA 0.15 COMMERCIAL PAPER i31 89233GRL2 Toyota Motor Credit Discount CP 1,000,000.00 12/23/2016 996,689.44 99.95 999,466.94 1.17% P-1/A-1+ 0.05 1,01%Due 412012017 1,03% 999,466.94 103% 0.00 0,00 NR 0.05 06538BU76 Bank of Tokyo Mitsubishi NY Discount 1,705,000.00 031M12017 1,698,181.89 all 1,699,579.04 2.00% P-1/A-1 0.27 CP 1.20% 1,699,579.04 1.20% 0.00 0.00 NR 0.27 1.18%Doe 71W2017 2,694,871.33 2,699,045.98 3.17% P-1/A-0 0.19 Total Commercial Paper 2,705,000.00 1.14% 2,699,045.98 1.14% 0.00 0.00 NR 0.19 MONEY MARKET FUND Fit 261908107 Dreyfus Trsy/Agcy Cash Management 3,753,584.00 Various 3,753,5M 00 1.00 3,753,581 4.41 % Aso I AAA 0.00 521 0,61 % 3,753,584.00 0S1% 0.00 0,00 AAA 000 3,753,584.00 3,753,584.00 4.41 % Aaa/AAA 0.00 Total Money Market Fund FI 3,753,584.00 0.61% 3,753,584.00 0.61% 0.00 0.00 AAA 0.00 NEGOTIABLE CD 89113E7K6 Toronto Dominion Yankee CD 1,150,000.00 12/20/2016 1,149,964.14 100.00 1,149,991.44 1.36% P-1IA-1+ 0.09 1.15%Due 5IW2017 1.15% 1,149,991.44 1A5% 12,159.65 0.00 NR 0.09 1,1,10 10 1,149,911.44 1.36% P-1/A-1+ 0.09 Total Negotiable CD 1,150,000.00 1.15% 1,149,991.44 1.15% 12,159.65 0.00 NR 0.09 SUPRANATIONAL 45950KBS8 International Finance Corp Note 1,000,000,00 10/26/2016 1,001,090,00 99.99 999,881,00 1.18% Ass I AAA 007 1%Due 4/2412017 078% 1.000,140.84 118% 4,361.11 (259.84) NR 006 Chandler Aosn Management-CONFIDENTIAL 42 CAROrangeCounty Sanitation District Liquid Holdings Report Account f)10282 As of 3/31/17 Purchase Da:o Cost Va:u: Mut Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mut Y"IrM Accrued Ind. Gain/Loss Fitch Duration SUPRANATIONAL 459058DC4 Intl.Bank Recon B Development Note 1,162,000.00 02/06/2017 1,163,057.42 99.99 1,161,887.29 1.37% Aaa I AAA 0.30 1.125%Due 7/1812017 0.92% 1,162,718.25 1.16% 2,650.81 (830,96) AAA 0.30 2,164,147.42 2,161,768.29 2.55% Ann I AAA 0.19 Total Supranational 2,162,000.00 0.85% 2,162,859.09 1A7% 7,011.92 (1,090.80) AAA 0.19 US CORPORATE 037833AM2 Apple Inc Note 1,000,000.00 M/08/2016 1,002,590.00 100.01 1,000,052.00 1.18% Apt/AA+ 0.10 1.05%Due 5I5/2017 0.76% 1,000,270.12 0.96% 4,229.17 (218.12) NR 0.10 94974BFD7 Walls Fargo Cory Note 1,000,000.00 W10212016 1,008,550.00 100.07 1,000,724.00 1.18% A21A 0.10 2.1%Due 5/8/2017 1.16% 1,000.944.33 1.38% 8,361.67 (220.33) AA- 0.10 084664BS9 Berkshire Hathaway Note 1,000,000.00 01/18/2017 1,001,760.00 100.02 1,000,212.00 1.18% Aa2/AA 0.12 1.6%Due 5/15/2017 1.03% 1,000,691A3 1A2% 6,044.44 (479.43) A+ 0.12 91159HHD5 US Bancorp Callable Note Cant 740,000.00 Various 740,928.75 100.01 740,064.39 0.87% Al/A+ 0.12 4/15/2017 1,08% 740,163.55 1.33% 4,612.67 (99,16) AA 0.04 1.65%Due 5/15/2017 24422ESN0 John Deere Capital Corp Note 1,000,000.00 01/18/2017 1,000,420.00 N.N 999,903.00 1.18% A2/A 0.20 1.125%Due 611212017 1.01 % 1,000,216.00 1A7% 3,406.25 (313.00) A 0.20 68389XAN5 Oracle Corp Note 1,000,000.00 03130I2017 999,870.00 99.87 999,740.00 1.18% Al/AA- 0.54 1.2%Due 1 0/1 512 01 7 in% 999,870+66 1.25% 5,533.33 (130.66) A+ 0.53 166764BC3 Chevron Carp Note 1,000,000.00 0111612017 1,000,780.00 100.03 1,000,335.00 1.18% As2/AA- 0.61 1.344%Due I1/912017 1.24% 1,000,597.10 1.29% 5,301.33 (262.10) NR 0.60 369604BC6 General Electric Cc Note 1,000,000.00 01I26I2017 1,033,650.00 102.0 1,025,325.00 1.22% At IAA. Me 5.25%Due 1MM17 1.24% 1,027,116.02 1.49% 16,770.83 (1,791.02) AA- 0.66 02665WATB American Honda Finance Note 1,000,000.00 0312712017 1,001,140.00 101 1,000,4 1.00 1.18% Al/A+ 0.95 1.5%Due W13/2018 1.38% 1.001,133.45 1AS% 750.00 (692.45) NR 0.94 8,789,688.75 8,766,796.39 10.36% At/AA- 0.39 Total US Corporate 8,740,000.00 1.13% 8,771,002+66 1.31% 64,989.89 (4,208.27) A+ 0.38 USTREASURY 9127%K01 US Treasury Bill 10,000,000.00 0113112017 9,991,595A4 99.99 9,999,353.47 11.74% P-1/A-1+ 0.02 0.47%Due 416/2017 0.47% 9,999,353A7 0.47% 0.00 0.00 F-1+ 0.02 912791 US Treasury Bill 15,000,000.00 1212312016 14,971,999.58 99.97 14,995,491.46 17.61 % P-11A-1+ 0.05 0.57%Due 412012017 0.50% 14,995,491.46 0.58% 0.00 0.00 F-1+ 0.05 Chandler Asset Mane9emenl-CONFIDENTIAL 43 GilOrange County Sanitation District Liquid Holdings Report Account#10282 As of 3/31/17 Purchase Da:o Cost Va:u: Mid Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt Y7M Accrued Ind. Gain/Loss Fitch Duration US TREASURY 912796LG2 US Treasury Bill 15,000,000.00 Various 14,962,819.03 99.85 14,977,406.67 17.58% P-1IA-1+ 027 0.567%Due 7/6I2017 0.57% 14,977,406.67 0.57% 0.00 0,00 F-1+ 0,26 39,926,413.75 39,972,251.60 46.93% P-1/A-1+ 0.12 Total US Treasury 40,000,000.00 0.55% 39,972,251.60 0.55 H 0.00 0.00 F-1+ 0.12 85,021,444.07 85,024,655.32 100.00% Aaa I"A 0.16 TOTAL PORTFOLIO 85,010,584.00 0.69% 85,032,280.97 0.73% 152,506.74 (7,625.65) AAA 0.16 TOTAL MARKET VALUE PLUS ACCRUED 85,177,182A6 Chandler Aseel Management-CONFIDENTIAL 44 CAROCSDLehman Exposure Holdings Report Account#70284 As of 3/31/17 Purchase D :a Cost V :u: Mid Price Market Value %of Pon Ma.d,IS&P Maturity CUSIP Security Description Par Value/Units Book YI:d Book Va Mkt Y­TM Accrued Int. Gain/Loss Fitch Duration COMMON STOCK SLHOPNTA4 Lehman Brothers,Inc Open Position 60,641.49 11/21/2014 57,842.64 0.42 25,621.03 13.69% NR/NR 0.00 Long Exposure 0.00% 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 Due 3/31/2017 57,842.64 25,621.03 13.69% NR/NR 0.00 Total Common Stock 60,641.49 NIA 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 US CORPORATE 525ESC167 Lehman Brothers Note-Defaulted 600,000,00 09/19/2008 352,258,37 6.50 39,000,00 20.84% NRINR 082 Due 112412018 0.00% 352258.37 000% 0.00 (313,258.37) NR 000 525ESCOV6 Lehman Brothers Note-Defaulted 2,000,000.00 09/18/2008 1,138,391,06 6.13 122,500.00 65.47% NR/NR 3258 Due 10/2212049 0.00% 1,138,391.06 0.00% 0.00 (1,015,891.06) NR 0.00 1,490,649.43 161,500.00 86.31 % NR I NR 2/.91 Total US Corporate 2,600,000.00 N/A 1,490,649.43 0.00% 0.00 (1,329,149.43) NR 0.00 1,548,492.07 187,121.03 100.00% NRINR 21.50 TOTAL PORTFOLIO 2,660,641.49 NIA 1,548,492.07 0.00% 0.00 (1,361,371.04) NR 0.00 TOTAL MARKET VALUE PLUS ACCRUED 187,121.03 Chandler Ae cManagement-CONFIDENTIAL 45 c111JI Disclosure Information contained herein is confidential. Prices are provided by IDC, an independent pricing source. In the event IDC does not provide a price or if the price provided is not reflective of fair market value, Chandler will obtain pricing from an alternative approved third party pricing source in accordance with our written valuation policy and procedures. Our valuation procedures are also disclosed in Item 5 of our Form ADV Part 2A. 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 Mood '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 Moodv'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 Aa 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 As, 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. 'e? Op April 30, 2017 STAFF REPORT Certificates of Participation (COP) Quarterly Report for the Period Ended March 31, 2017 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 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 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 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. 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 2012B 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. 0 Sl) ♦ P.O.Box 8127 ♦ FouMeln Valley,C 9272M127 ♦ C714)992-2411 Quarterly COP Report For the Three Months Ended March 31, 2017 Page 2 of 2 In August 2014, the District issued $85.09 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 February 2015, the District issued $127.51 million of fixed rate COPs, Series 2015A, refunding $152.99 million of the Series 2007E debt. The true interest cost for the issue is 3.30 percent. In March 2016, the District issued $145.88 million of fixed rate CANS, Series 2016A, refunding $162.78 million of the Series 2009A fixed rate debt. The true interest cost for the issue is 3.02 percent. In November 2016, the District issued $109.875 million of fixed rate CANS, Series 2016B, refunding the Series 2014B CANS. The true interest cost for the issue is 0.87 percent. In February 2017, the District issued $66.37 million of fixed rate COPs, Series 2017A, refunding $91.885 million of the Series 2007A debt. The true interest cost for the issue is 2.55 percent. Additional Information The graph entitled, "OCSD COP Rate History Report,' shows the various fixed interest rates of the District's thirteen debt issues. Attachments 1. Graph - OCSD COP Rate History Report Prepared by Finance,4/1 312 01 7,4:33 PM OCSD COP RATE HISTORY REPORT MARCH 2O17 0.00 4.00 3.00 w 2.00 1.00 0.00 ° ° DATE g i a ,�: & .. '� a a 3 +Series 2007A Fixed —Series 20070 Fixed denied 2008E Fixed .Senee 20M Fixed SeAes 2010A Fxetl +Sei 2010C Fixed sense 2011A'xM �Berea 2012F Fixed — Si 2012B Fixed aeries 201"9xed —Sed.2010B 1. sense 201 Is H. —Sedn.18F Fixed —sell.2018B Fhb sense 2017A Rxed HAdeptiasdi220\CommonWoniMy and Quarterly Treasumes Report\FV 10-17TCOP Rate History Report FV 1&17 2016-17 Third Quarter Review This Page Intentionally Left Blank ORANGE COUNTY SANITATION DISTRICT FINANCIAL MANAGEMENT DIVISION 10844 Ellis Avenue Fountain Valley, California 92708-7018 714.962.2411 www.ocsd.com 3/31/17 ADMINISTRATION COMMITTEE Meeting Date To Bd.of Dir. 05/10,17 — AGENDA REPORT Item Number Item Number a — Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: IBM TIVOLI MAXIMO AND WEBSPHERE (ENTERPRISEONE) ANNUAL SUBSCRIPTION AND SUPPORT GENERAL MANAGER'S RECOMMENDATION A. Approve an Annual Purchase Order Contract with Carahsoft Technology Corporation for the Renewal of Software Licensing and Maintenance Agreement for IBM Maximo and WebSphere using GSA Contract GS35F0119Y, for an amount not to exceed $158,637; and B. Approve a contingency of$15,864, (10%) BACKGROUND IBM Maximo was implemented in January 2015, and is used by Orange County Sanitation District's (Sanitation District) Operations and Maintenance in the lifecycle management of the treatment plants' physical assets. The product provides real-time visibility into asset performance and enables staff to proactively control and optimize asset performance. This includes improved asset and labor productivity, better optimization of maintenance resources, improved efficiency in inventory management, and prevention of asset failure. IBM WebSphere is a necessary software component of JD Edwards, our Financial Management system. To properly maintain and repair the Sanitation District's facilities, the Information Technology (IT) division needs to purchase software support and maintenance as a service for IBM Maximo and IBM WebSphere software. Such requirements will help maintain our Enterprise Asset Management system (IBM Maximo) and the Financial Management system. The renewal and payment for software support and maintenance is executed on an annual basis. RELEVANT STANDARDS • Maintain and Support Enterprise Asset and Financial Management Systems • Investment proposals and decisions based on clearly defined standards Page 1 of 2 PROBLEM The annual software maintenance for IBM Maximo and IBM WebSphere will expire on June 30, 2017. Failure to renew the maintenance agreement will prevent the Sanitation District from accessing software support and necessary updates from IBM to enhance and correct any software issues that may cause interruption in service. PROPOSED SOLUTION Renew the annual software maintenance for IBM Maximo and IBM WebSphere before June 30, 2017. Not renewing the support will cause the Sanitation District to be ineligible to receive support and software enhancement from IBM. TIMING CONCERNS The renewal must be completed prior to June 30, 2017. RAMIFICATIONS OF NOT TAKING ACTION Not renewing the annual software maintenance will cause the Sanitation District to lose support and software enhancement from IBM. The Sanitation District would also need to repurchase all the software at a cost of more than a million dollars. PRIOR COMMITTEE/BOARD ACTIONS June 2016— Board Award M.O. 6/22/2016, Item No. 10 June 2015— Board Award M.O. 6/2 412 0 1 5, Item No. 8 ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. ATTACHMENT The following attachment(s)may be viewed on-line at the OCSD webslte(www.ocsd.com)with the complete agenda package: N/A Page 2 of 2 ADMINISTRATION COMMITTEE Melting Dat0 TOBE.Of Dir. Bs/10117 os/z4/17 AGENDA REPORT ItemNumber Item Number s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION PROGRAM GENERAL MANAGER'S RECOMMENDATION Authorize an additional one-year renewal period of the agreement with Keenan and Associates, for the period July 1, 2017 through June 30, 2018, for a total amount not to exceed of$48,000. BACKGROUND In 2012, the Orange County Sanitation District (Sanitation District) competitively bid for the services of a workers' compensation third party administrator (TPA). Keenan and Associates was chosen from a group of qualified firms and the Sanitation District entered into a one-year agreement with four subsequent one-year renewals. The current and last renewal expires on June 30, 2017. Keenan and Associates provides oversight of injured workers' medical claims to include referrals to the appropriate medical provider, utilization review for appropriateness of medical services requested, claims payment for services rendered, disability payments to employees, assures all state mandated timelines are met, and works as a liaison between the employee and the medical provider. Additionally, the TPA provides legal representation on behalf of the Sanitation District to the Workers' Compensation Board and manages any litigated claims. To ensure continuity of medical care and service on existing claims, as well as continued legal representation on litigated claims, staff recommends continuing the relationship with Keenan and Associates for one additional renewal period to prepare for a Request for Proposal. RELEVANT STANDARDS Protection of Orange County Sanitation District assets PROBLEM Transitioning to a new workers' compensation TPA at this time would be extremely disruptive, due to number of ongoing cases and their complexity. Page 1 of 2 PROPOSED SOLUTION Maintain Keenan and Associates as the Sanitation District workers' compensation TPA for one additional year to ensure program continuity, optimal service, and continued reliable and timely program administration while a Request for Proposal is completed. This will allow a smooth transition if an alternate vendor is chosen. TIMING CONCERNS Board approval is necessary to ensure the Sanitation District meets our workers' compensation program administration demands. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District will not have access to workers' compensation services. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance No. OCSD47. This item has been budgeted in the FY 2016-17 budget. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: N/A Page 2 of 2 ADMINISTRATION COMMITTEE Melting Dat0 TOBE.Or Dir. gs/10117 os/z4/17 AGENDA REPORT Item Item Number 6 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: 2017-18 OPERATIONAL PROPERTY-LIABILITY INSURANCE RENEWALS GENERAL MANAGER'S RECOMMENDATION Approve not-to-exceed numbers as follows, with the understanding that the Orange County Sanitation District's insurance broker will continue to negotiate with insurers to seek the lowest possible premiums prior to the expiration date of the current major insurance policies: • Excess liability insurance from $405,126 to $445,639. • Property and Boiler & Machinery combined from $665,813 to $677,628 . • Earthquake insurance—from $76,385 to $78,062. • Excess workers' compensation insurance — a rate of $0.3133 per $100 of payroll not to exceed $208,000. BACKGROUND The Orange County Sanitation District's (Sanitation District) budget provides funds for the renewal of the following five major insurances for the Sanitation District operations: • Excess General Liability Insurance that also includes public officials errors and omission insurance and professional liability • Excess Workers' Compensation • All-Risk Property and Flood insurance that includes cyber liability insurance • Boiler& Machinery insurance • Earthquake Insurance RELEVANT STANDARDS • Ensure the public's money is wisely spent • Provide a safe and collegial workplace PROBLEM Insurance is necessary to protect the Sanitation District's assets and financial well-being. Page 1 of 2 TIMING CONCERNS The current operations property and liability insurance expires on June 30, 2017. RAMIFICATIONS OF NOT TAKING ACTION Action must be taken before June 30, 2017 or the Sanitation District's insurance will lapse. PRIOR COMMITTEE/BOARD ACTIONS May 2016 - The Board approved renewal of the above five policies for the period July 1, 2016 through June 30, 2017. ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. ATTACHMENTS The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Informational item presented in March 2017 • Letter dated April 17, 2017 from Alliant Page 2 of 2 ADMINISTRATION COMMITTEE Meeting Dare To ad.ofDir. 03/08,17 — AGENDA REPORT Item Number Item Number a — Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: STATUS OF 2017-18 PROPERTY-LIABILITY INSURANCE RENEWALS GENERAL MANAGER'S RECOMMENDATION Information Only. BACKGROUND The Risk Management Division of Human Resources (Risk Management) provides the Administration Committee an annual status update regarding the renewals of the Orange County Sanitation District's (Sanitation District) major insurance policies for the upcoming year. Risk Management and the operational insurance broker begin the process of renewal each January, and final quotes are typically received in June, shortly before the beginning of the new fiscal year. The Sanitation District's budget provides funds for the renewal of the following five major insurances for Sanitation District operations: 1) Excess General Liability Insurance 2) Excess Workers' Compensation 3) All-Risk Property and Flood insurance 4) Boiler& Machinery insurance 5) Earthquake Insurance The Sanitation District's operational insurance broker will be present at the March Administration Committee meeting to give a short informational presentation about this years insurance outlook. RELEVANT STANDARDS Protection of Orange County Sanitation District assets TIMING CONCERNS Current insurance expires June 30, 2017. RAMIFICATIONS OF NOT TAKING ACTION None at this time because this is informational only; however, action must be taken before June 30, 2017 or the Sanitation District's insurance will lapse. Page 1 of 4 PRIOR COMMITTEE/BOARD ACTIONS May 2016 -The Board approved renewal of the above policies for the period July 1, 2016 through June 30, 2017. ADDITIONAL INFORMATION 1) Excess General Liability Insurance Program The Sanitation District's Excess General Liability Insurance Program is currently provided through the California Municipal Excess Liability Program (CAMEL) and its sister program, the Alliant National Municipal Liability Program (ANML). The Sanitation District has participated in the CAMEL program since FY 1996-97. This program currently provides the Sanitation District with a $40 million dollar policy of comprehensive coverage for municipal liability, bodily injury and property damage, and personal injury. The program was structured to also include Employment Practices and Public Officials Errors & Omissions coverage. The $40 million dollar coverage has a self-insured deductible of $500,000. Since 1997, the Employment Practices portion of coverage has been enhanced from a $2 million dollar sub-limit to the full policy limit of$40 million dollars. The premium cost, approved by the Board (May 2016), forthe current fiscal year, July 2016 June 2017, was $414,927. 2) Excess Workers' Compensation Insurance The Excess Workers' Compensation insurance coverage is with the California State Association of Counties Excess Insurance Authority (CSAC EIA). The Sanitation District has participated in this program or its predecessor since 2003. The Excess Workers' Compensation program currently provides "Statutory" (unlimited) coverage with a self-insured retention (SIR), or deductible, of$1 million dollars. The use of Excess Workers' Compensation Insurance dates back to the late 1980's. The renewal of the Excess Workers' Compensation Insurance for the period July 1, 2016 through June 30, 2017 was approved by the Board (May 2016) and was at an estimated premium of$208,825 based on the estimated 2016-17 payroll. Since the premium itself is based on final payroll, the Sanitation District will not know the exact final premium until the year is over. 3) All-Risk Property and Flood Insurance The All-Risk Property and Flood Insurance Program (Property Insurance) provides for comprehensive coverage for much of the Sanitation District's real and personal property regarding virtually all perils including fire, flood, and business interruption. Page 2 of 4 Current Property Insurance limits are $1 billion dollars for most perils other than flood and earthquakes, and $300 million dollars for flood, with many sub-limits for various situations. In order to reach $1 billion dollars in limits, the broker had to arrange for more than a dozen different insurers. The SIR is $250,000 per occurrence for most types of losses. Since the late 1990's, the Property Insurance has been with a nationwide joint purchase property insurance program called Public Entity Property Insurance Program (PEPIP), one of the world's largest property programs. It is important to note that this joint purchase property insurance program offers the purchasing power of numerous large public entities without the pooling or sharing of coverage or losses. The renewal of All-Risk Property and Flood Insurance (excluding Boiler& Machinery) for the period July 1, 2016 through June 30, 2017 was approved by the Board (May 2016) at a premium of$641,956.23. 4) Boiler& Machinery Insurance The Boiler& Machinery insurance program provides comprehensive coverage for loss caused by machinery breakdown and explosion of steam boilers or other covered process equipment, including damage to the equipment itself and damage to other property caused by covered accident. The current Boiler& Machinery insurance program provides coverage of$100 million dollars per occurrence with deductibles ranging from $25,000 to $350,000 for losses caused by covered machinery breakdown (e.g., motors, steam turbines, digesters, co- gen engines). Damages to the equipment, as well as damages to other property and improvements caused by the machinery breakdown, are covered by the boiler & machinery insurance. This program augments the Sanitation District's all-risk property insurance that covers perils such as fire and flood. The renewal of the Boiler& Machinery Insurance Program was approved by the Board (May 2016)for the period July 1, 2016 through June 30, 2017 $23,857. 5) Earthquake Insurance The Sanitation District previously carried earthquake insurance as part of its Property Insurance, but in the last 15 years earthquake insurance proved difficult to obtain or not cost-effective. The Sanitation District asked its insurance broker each year to survey the market to see if rates have changed. Finally, in 2015 a plan was created to insure several key Sanitation District structures identified by Engineering, thus keeping the cost in line. The insurance is a high deductible plan with a limit of $25 million dollars in total. The cost of the Earthquake Insurance was approved by the Board (May 2016) for fiscal year 2016-17 for nine key structures at $79,448 dollars. Page 3 of 4 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: N/A Page 4 of 4 A4/liant DRIVER SPECIALTY GROUP April 17, 2017 Mr. Randall Kleinman Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 2017-2018 Insurance Renewal Budgeting Dear Randy: We are midstream in the 2017 renewal process with discussions occurring with OCSD's insurance carriers and other markets for the forthcoming coverage year. While it is too early to have exact renewal costs,we can say that outside of the general liability arena, which we discuss below, the insurance market is trending favorably as respects the outlook for OCSD. Therefore, aside from any market shocks, or significant changes in OCSD's operations, we feel comfortable with the following"not to exceed" cost projections: Excess Liability 2016 2017 $Change % Change Limit 40,000,000 40,000,000 0 0% SIR 5OOk/500k 500k/500k 0 - Premium 405,126 445,639 40,513 10% Excess Workers' Comp Payroll 65,659,233 66,394,910 735,677 1% Limit Statutory Statutory - - Rate Per$100 0.3180 0.3133 (0) -1% SIR 1,000,000 1,000,000 - - Premium 208,825 208,000 (825) 0% Property(incl. B&M) Values 1,919,329,040 1,934,047,456 14,718,416 1% Rate Per$100 0.0346899 0.03504 0 1% Premium 665,813 677,628 11,815 2% Earthquake Values 67,717,939 67,847,862 129,923 0.19% Rate Per$100 0.1128 0.1151 0 2% Premium 76,385 78,062 1,677 2% Total Premium 1,356,149 1,409,329 53,180 3.9% Alliant Insurance Services,Inc. • 100 Pine Sheet, 10 Floor.San Francisco,CA 94111 Pnon°(415)403-1400•w .alliantinsurancc.com•License No.OC36861 A4/liant DRIVER SPECIALTY GROUP Mr. Randall Kleinman April 17, 2017 Page 2 What is most noticeable in the table above is the increase projected, for the General Liability Program. As you are aware, the District participates in the Alliant National Municipal Liability Program (ANML). As we have discussed, the ANML underwriters have expressed concern, or at least an interest, in developing activity on "outside the norm" claims involving a contract dispute, and an employment matter that recently settled beyond expectations. For this reason, we are projecting a 10% increase as a precautionary measure. We expect that the actual renewal costs will come in below this projection, yet we want to allow for a"worst case scenario, and the underwriting of the renewal is still ongoing. Of note, two years ago, the District reviewed three options for adjusting the Self-Insured Retentions (SIR) on the program. The $500,000 attachment point "feels right"based on our understanding of the Districts' tolerance for risk, and its comfort level with historic premium costs. We are happy to present options again if desired. The property and workers compensation markets remain stable, with little in the way of rate change anticipated. This is good news on workers compensation where over the past few years there has been price pressure, and on property, after a few years of a relatively soft market, the pricing floor may have been reached. On a continued positive note, the Earthquake market remains aggressive, and we are cautiously optimistic that a decrease in rate may be achieved. Again however, we want to err to the conservative, so would are asking the District to budget 2% for this coverage. With this amount, combined with any savings achieved from a reduced rate, the District may be able to add more buildings to the schedule of covered buildings. I know that you and Karen are in discussion on this point, and I will leave it to the two of you to resolve this question as we get closer to the renewal date and a firm quote is received. As always, we look forward to discussing the programs and the renewal strategy in more detail with you, and appreciate the opportunity to be of service to the District. Ver y, De u l $ lor Ice n" (415)403-142 direct dmuluueeney(a),alliant.com Alliant Insurance Services,Inc. • 100 Pine Sheet, 10 Floor•San Francisco,CA 94111 rnoes(415)403-1400•wvm.alliantinsursncc.com•License No.OC36861 ADMINISTRATION COMMITTEE Meeting Date To Bd.of Dir. os/Io/v — AGENDA REPORTItem Number Item Number Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: CAPITAL IMPROVEMENT PROGRAM (CIP) UPDATE FOR FY 2017-18 GENERAL MANAGER'S RECOMMENDATION Information Only. BACKGROUND Staff will present the Capital Improvement Program (CIP)validation results to be included in the upcoming FY2017-18 Budget Update recommendation. RELEVANT STANDARDS • 20-year CIP plans updated annually • Protection of Orange County Sanitation District assets • Ensure the public's money is wisely spent ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: N/A KM:sa 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 CIP Capital Improvement Program 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 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 COBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration PCSA Professional Consultant Services Agreement PDSA Professional Design Services Agreement POTW Publicly Owned Treatment Works ppm Parts per million PSA Professional Services Agreement Glossary of Terms and Abbreviations RFP Request For Proposal RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency 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 SRF State Revolving Fund 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 WE&RF Water Environment& Reuse Foundation WIFIA Water Infrastructure Financing and Innovation Act WIIN Water Infrastructure Improvements for the Nation Act 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 known 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. Biogas — A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used as a fuel. 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. Glossary of Terms and Abbreviations 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. coil 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. Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (DIT) — the dilution at which the majority of the people detect the odor becomes the D/T 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 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. Glossary of Terms and Abbreviations 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. 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.