HomeMy WebLinkAbout11-12-2014 Administration Committee Agenda Orange County Sanitation District SANITATION msrRicr Wednesday, November 12, 2014
Regular Meeting of the \ 5:30 P.M.
Administration Committee I Administration Building
Board Room
10844 Ellis Avenue
Fountain Valley, CA
(714) 593-7130
AGENDA
PLEDGE OF ALLEGIANCE:
DECLARATION OF QUORUM:
PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form and give it to the
Clerk of the Board. Speakers are requested to limit comments to three minutes.
REPORTS: The Committee Chair and the General Manager may present verbal reports on
miscellaneous matters of general interest to the Committee Members. These reports are for information
only and require no action by the Committee.
REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES:
CONSENT CALENDAR:
1. Approve Minutes of the October 8, 2014, Administration Committee Meeting.
2. Recommend to the Board of Directors to:
Authorize purchases of information technology computer and peripheral
equipment using the U.S. Communities cooperative agreement #4400001195
with Insight Public Sector or agreement#4400001197 with UNICOM Government
through the contract expiration date, April 30, 2016 for a total amount not to
exceed $700,000, in accordance with Ordinance OCSD-44, Section 2.03(B):
Cooperative Purchases.
11/12/14 Administration Committee Agenda Page 1 d 3
3. Recommend to the Board of Directors to:
Authorize purchases of information technology Cisco networking equipment
using the Western States Contracting Alliance (WSCA) cooperative agreement
#AR233 (14-19), Addendum for CA#7-14-70-04, through the expiration date May
31, 2019 for a total amount not to exceed $250,000, in accordance with
Ordinance OCSD-44, Section 2.03(B): Cooperative Purchases.
4. Recommend to the Board of Directors to:
Receive and file Orange County Sanitation District First Quarter Financial Report
for the period ended September 30, 2014.
5. Recommend to the Board of Directors to:
Receive and file District purchases made under the General Manager's authority
for the period of July 1, 2014—September 30, 2014.
NON-CONSENT CALENDAR:
6. Recommend to the Board of Directors to:
Receive and file the Sanitation District's Comprehensive Annual Financial Report
for the year ended June 30, 2014, prepared by staff and audited by McGladrey,
Certified Public Accountants, along with the following reports prepared by
McGladrey:
A. Report to the Administration Committee; and
B. Report on Internal Controls; and
C. Independent Accountants' Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets.
7. Recommend to the Board of Directors to:
Authorize the General Manager to issue new fixed rate Certificates of
Participation (COP), to be referred to as Wastewater Refunding Revenue
Obligations, Series 2015A, in an amount sufficient to refund up to $152,990,000
of COP Series 2007B.
INFORMATION ITEMS:
8. Annual Strategic Plan Update and General Managers Work Plan Overview
9. Legislative Affairs Program
1111 V14 Administration Committee Agenda Page 2 of 3
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA
ITEMS, IF ANY:
ADJOURNMENT:
The next Administration Committee meeting is scheduled for Wednesday, December
10, 2014 at 5:30 p.m.
Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability
related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at
(714) 593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability
and the type of accommodation requested.
Aoenda Posting: In 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.
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.
Made E.Ayala
Clerk of the Board
(714)593-7130
mavala(a)ocsd.com
For any questions on the agenda,Committee members may contact staff at:
General Manager James Herberg (714)593-7300 iherbemRDomd.com
Assistant General Manager Bob Ghirelli (714)593-7400 rohirellita)ocsd.com
Director of Finance and Lorenzo Tyner (714)593-7550 Itvner(docsd.com
Administrative Services
Director of Human Resources Jeff Reed (714)593-7144 ireed(cbocsd.com
11/12114 Administration Committee Agenda Page 3 of 3
ITEM NO. 1
MINUTES OF THE REGULAR MEETING OF
THE ADMINISTRATION COMMITTEE
Orange County Sanitation District
Wednesday, October 8, 2014, at 5:30 P.M.
A regular meeting of the Administration Committee of the Orange County Sanitation
District was held on September 10, 2014, at 5:32 p.m., in the Sanitation District's
Administration Building. Director Carchio led the Flag Salute.
A quorum was declared present, as follows:
COMMITTEE MEMBERS PRESENT: STAFF PRESENT:
Brad Reese, Chair Jim Herberg, General Manager
John Withers, Vice-Chair Bob Ghirelli, Assistant General Manager
David Benavides Lorenzo Tyner, Director of Finance
Joe Carchio &Administrative Services
Tyler Diep Jeff Reed, Director of Human Resources
Gene Hernandez Ed Torres, Director of Operations and
Peter Kim Maintenance
Prakash Narain Kelly Lore, Acting Clerk of the Board
Teresa Smith Mike White
Tom Beamish, Board Chair Mike Berdis
John Nielsen, Board Vice-Chair Rich Castillon
Marc Dubois
COMMITTEE MEMBERS ABSENT: Norbert Gaia
Steven Choi Al Garcia
James Ferryman Dave Halversen
Janet Nguyen Kathy Millea
Carlos Quiroz
Jim Spears
OTHERS PRESENT:
Brad Hogin, General Counsel
Steven Center, Callan Investments
PUBLIC COMMENTS:
None.
REPORT OF COMMITTEE CHAIR:
Committee Chair Reese did not provide a report.
10/08/2014 Administration Committee Minutes Page 1 of4
REPORT OF GENERAL MANAGER:
General Manager, Jim Herberg, notified the Committee that per direction from the Board
of Directors, an item has been placed on the Groundwater Replenishment Steering
Committee Meeting agenda of Monday, October 13, 2014, regarding cost sharing with
Orange County Water District for additional security services. He further stated that any
outcome would be brought back for the Board's consideration at a future meeting.
REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES:
Director of Finance and Administrative Services, Lorenzo Tyner did not provide a report.
CONSENT CALENDAR:
1. MOVED, SECONDED, AND DULY CARRIED to: Approve Minutes of the
September 10, 2014 Administration Committee Meeting.
AYES: Beamish, Carchio, Diep, Hernandez, Kim, Narain, Nielsen,
Reese and T. Smith
NOES: None
ABSTENTIONS: None
ABSENT: Choi, Benavides, Ferryman, Nguyen and Withers
NON-CONSENT CALENDAR:
Director Benavides arrived at 6.37 p.m.
Director of Finance and Administrative Services, Lorenzo Tyner stated that this item
was continued from last month with a request for further information. Mr. Tyner provided
a PowerPoint presentation and informed the Committee of current developments
concerning our current Investment Portfolio Manager. He then responded to questions
regarding: fees, final returns, PIMCO management structure, stability and performance
of alternate managers and negotiation criteria.
2. MOVED, SECONDED, AND DULY CARRIED to: Recommend to the Board of
Directors to:
Approve the selection of Chandler Asset Management as the District's External
Investment Portfolio Manager and authorize staff to negotiate a professional
service agreement.
10/08/2014 Administration Committee Minutes Page 2 of 4
AYES: Beamish, Benavides, Carchio, Diep, Hernandez, Kim, Narain,
Nielsen, Reese and T. Smith
NOES: None
ABSTENTIONS: None
ABSENT: Choi, Ferryman, Nguyen and Withers
Mr. Tyner informed the Committee that Item No. 3 was continued from the Board of
Directors meeting and returned to this meeting for additional information and
clarification. He provided a brief presentation regarding the quantities being purchased,
warranties and the procurement process. Mr. Tyner, Engineering Manager, Dave
Halversen and Engineering Supervisor, Riaz Moinuddin responded to questions
regarding: plans to move to the next version of these controllers, transitioning periods
and new programming standards.
3. MOVED, SECONDED, AND DULY CARRIED to: Recommend to the Board of
Directors to:
Approve a Purchase Order with PLC LTD, the lowest responsive and responsible
bidder, for the purchase of Modicon computer equipment, Specification No. E-
2014-626, for an amount of$636,579.
AYES: Beamish, Benavides, Carchio, Diep, Hernandez, Kim, Narain,
Nielsen, Reese and T. Smith
NOES: None
ABSTENTIONS: None
ABSENT: Choi, Ferryman, Nguyen and Withers
Committee Vice-Chair Withers arrived at 5:48 p.m.
INFORMATION ITEMS:
4. Informational Presentation on Wastewater Treatment Operations:
Mike Berdis, Operations Supervisor provided a PowerPoint presentation
regarding a broad overview of the treatment operations at Plants 1 & 2 including:
water resource recovery processes; secondary treatment; primary clarification
process; trickling filter operations; secondary final clarifier; biosolids recycling and
recovery processes; anaerobic digesting; belt filter operations; methane gas
recovery and uses; odor control issues and levels of service.
10/08/2014 Administration Committee Minutes Page 3 of 4
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA
ITEMS, IF ANY:
None.
ADJOURNMENT:
Committee Chair Reese declared the meeting adjourned at 6:00 p.m., to the next
regularly scheduled meeting of November 12, 2014.
Submitted by:
Kelly A. Lore
Acting Clerk of the Board
10/08/2014 Administration Committee Minutes Page 4 of 4
ADMINISTRATION COMMITTEE Neelbng Dare TOBA.of Dir.
1 /12/14 11/19/14
AGENDA REPORT IternNumber Item Numbe
z
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director, Finance and Administrative Services
SUBJECT: COOPERATIVE PROCUREMENT WITH U.S. COMMUNITIES
GENERAL MANAGER'S RECOMMENDATION
Authorize purchases of information technology computer and peripheral equipment
using the U.S. Communities cooperative agreement #4400001195 with Insight Public
Sector or agreement #4400001197 with UNICOM Government through the contract
expiration date, April 30, 2016 for a total amount not to exceed $700,000, in accordance
with Ordinance OCSD-44, Section 2.03(B) Cooperative Purchases.
SUMMARY
In order to properly maintain and repair Orange County Sanitation District's (OCSD)
facilities the Information Technology division has needs to purchase computers and
peripheral parts and supplies. Such item requirements have been forecasted based
upon projected obsolete equipment, historical product failure rates, and new items to
address general capacity, redundancy, or security. Since technology changes so
frequently, it is not appropriate to stock these items in OCSD's warehouses.
OCSD wishes to select the US Communities cooperative agreement #4400001195 or
#4400001197 as established by the County of Fairfax Virginia as the lead agency, as
the primary providers of computer and peripheral equipment based on contract pricing,
breadth of product offerings, availability and the ease of using online ordering systems.
Large capital items will be procured through the bidding process.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
U.S. Communities is the leading national government purchasing cooperative, providing
government procurement resources and solutions to local and state government
agencies, school districts (K-12), higher education institutes, and nonprofits looking for
the best overall supplier government pricing. The program is available to all State of
California governmental entities (State agencies, cities, counties, special districts,
Page 1 of 2
school districts, universities, etc.) that expend public funds for the acquisition of both
goods and services.
The U.S. Communities Government Purchasing Alliance is a government purchasing
cooperative that reduces the cost of goods and services by aggregating the purchasing
power of public agencies nationwide. U.S. Communities has over 55,000 participating
agencies, from both the public and nonprofit sectors. The U.S. Communities Advisory
Board is made up of key government purchasing officials from across the United States.
The Advisory Board provides leadership and overall direction for the U.S. Communities
Government Purchasing Alliance. The State of California Procurement Division (PD) is
the central purchasing authority for all State departments and local government
agencies. With a massive marketplace and billions of dollars in purchasing power they
are able to offer a lower procurement cost to California's State, county, city, special
district, education and other government entities through their Leveraged Procurement
Agreements (LPAs). LPAs allow entities/agencies to buy directly from suppliers through
existing contracts and agreements. One of the LPA's that the state offers to California
governmental agencies is the US Communities for technology products, equipment and
technology services, and solutions.
CEQA
N/A
BUDGET / PURCHASING ORDINANCE COMPLIANCE
This request complies with authority levels of the Sanitation District's Purchasing
Ordinance. The items purchased through the process are budgeted in the yearly Joint
Operating Budget.
ATTACHMENT
None.
Page 2 of 2
ADMINISTRATION COMMITTEE Neelbng Dare TOBA.of Dir.
1 /12/14 11/19/14
AGENDA REPORT ern Number Item Numbe
3
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director, Finance and Administrative Services
SUBJECT: COOPERATIVE PROCUREMENT WITH WESTERN STATES
CONTRACTING ALLIANCE (WSCA)
GENERAL MANAGER'S RECOMMENDATION
Authorize purchases of information technology Cisco networking equipment using the
Western States Contracting Alliance (WSCA) cooperative agreement #AR233 (14-19),
Addendum for CA #7-14-70-04 through the expiration date, May 31, 2019 for a total
amount not to exceed $250,000, in accordance with Ordinance OCSD-44, Section
2.03(B) Cooperative Purchases.
SUMMARY
In order to properly maintain and repair Orange County Sanitation District's (OCSD)
facilities, the Information Technology division has needs to purchase Cisco networking
parts and supplies. Such requirements have been forecasted based upon projected
obsolete equipment, historical product failure rates, and new items to address network
capacity, redundancy, or security. Since technology changes so frequently, it is not
appropriate to stock these items in OCSD's warehouses.
OCSD wishes to select the Western States Contracting Alliance (WSCA) cooperative
agreement #AR233 (14-19), Addendum for CA #7-14-70-04 as the primary provider of
Cisco networking equipment based on contract pricing, breadth of product offerings,
availability and the ease of using online ordering systems. Large capital items will be
procured through the bidding process.
PRIOR COMMITTEE/BOARD ACTIONS
April1992: Established Cisco Equipment as the Sanitation District's standard
networking equipment.
ADDITIONAL INFORMATION
The Western States Contracting Alliance (WSCA) agreements are available to all State
of California governmental entities (State agencies, cities, counties, special districts,
school districts, universities, etc.) that expend public funds for the acquisition of both
goods and services.
Page 1 of 2
The State of California purchases a wide variety of goods and services ranging from
pencils to temporary labor. Annual purchases total almost $10 billion. The
Procurement Division (PD) is the central purchasing authority for all State departments
and local government agencies. With a massive marketplace and billions of dollars in
purchasing power they are able to offer a lower procurement cost to California's State,
county, city, special district, education and other government entities through their
Leveraged Procurement Agreements (LPAs). LPAs allow entities/agencies to buy
directly from suppliers through existing contracts and agreements. One of the LPA's
that the state offers to California governmental agencies is the Western State
Contracting Alliance (WSCA) for Commodities, IT Goods & Services, and
Telecommunication Goods and Services.
CEQA
N/A
BUDGET / PURCHASING ORDINANCE COMPLIANCE
This request complies with authority levels of the Sanitation District's Purchasing
Ordinance. The items purchased through the process are budgeted in the yearly Joint
Operating Budget.
ATTACHMENT
None.
Page 2 of 2
ADMINISTRATION COMMITTEE Needng Dare TOBd.of Dir.
11/12/14 11/lg/14
AGENDA REPORT IternNumber Item Numbe
a
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: CONSOLIDATED FINANCIAL REPORT FOR THE FIRST QUARTER
ENDED SEPTEMBER 30, 2014
GENERAL MANAGER'S RECOMMENDATION
Receive and file Orange County Sanitation District First Quarter Financial Report for the
period ended September 30, 2014.
SUMMARY
Included in this consolidated report are the following quarterly financial reports for the
period ended September 30, 2014:
First Quarter Budget Review
The Budget Review Summary provides the Directors, staff, and the general
public with a comprehensive overview of the financial results of the Sanitation
District through the first quarter ended September 30, 2014.
• Quarterly Treasurer's Report
This section reports on financial portfolio performance with respect to the
Sanitation District's funds. Both Long-Term and Liquid Operating Monies
Portfolios are summarized. A performance summary table can be found on
page 2 of this section. The report also contains information on the U.S. and
global economic outlook from the Sanitation District's investment manager,
Pacific Investment Management Company.
• Certificates of Participation Quarterly Report
The report includes a summary of each outstanding debt issuance and a
comparative chart illustrating the COP rate history.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
Page 1 of 2
ADDITIONAL INFORMATION
N/A
ATTACHMENT
• Consolidated Financial Reports for the First Quarter Ended September 30, 2014
NOTE: The Executive Summary from the Comprehensive Quarterly Financial Report for the first
quarter ended September 30, 2014 is included in hard copy; the entire report is available on-line
at the OCSD website(www.ocsd.coml with the complete agenda package.
Page 2 of 2
Executive Summary
Consolidated Financial Reports
For the First Quarter Ended
September 30, 2014
Included in this consolidated report are the following quarterly financial reports for the
period ended September 30, 2014:
• First Quarter Budget Review:
The Budget Review Summary provides the Directors, staff, and the general public
with a comprehensive overview of the financial results of the Sanitation District
through the first quarter ended September 30, 2014.
Contained within this Budget Review is the budget-to-actual status of the
Collections, Treatment & Disposal Operations, the Capital Improvement Program,
the Self-Insurance Program, and Debt Service Outlays. Also included is a Capital
Assets Schedule as of September 30, 2014.
Various detail information can be found in this report. In summary:
a) Most major expense categories are anticipated to be at or below budget.
b) Total revenues are at 26.7 percent mainly due to the receipts of $102.3
million from the issuance of Wastewater Refunding Revenue Obligations,
Series 2014A during the first quarter of the fiscal year. The 2014A
Obligations were used to refund a portion of Certificate of Participation Series
2007B. Excluding debt financing proceeds, total revenues are at 2.6 percent
of the budget due to the timing of property tax and sewer fee distribution from
the County that occurs mostly in the second and fourth quarters. These two
revenue sources make up 86.6 percent of the District's total budgeted
revenue. Except for Service Fees, Property Taxes, User Fees, Capital
Assessments, Interest Earnings, and Other, all other major revenue sources
are currently tracking close to or exceeding revenue estimates. Overall, total
revenues are projected to exceed budget at year-end. More detailed
information on District revenues is provided within Section 1 — Pages 3
through 5.
c) Collection, Treatment and Disposal Costs:
As indicated within the Budget Review Summary of this report, the net
operating requirements through the first quarter of $35.6 million is currently
tracking at 23.3 percent of the $152.5 million budget. In addition, net
operating expenses have increased $1.9 million or 5.5 percent in comparison
with the same period last year. Overall, staff expects the total operating costs
to remain at or below budget throughout the remainder of the year. More
detailed information on District operating expenses is provided within Section
1- Pages 1 through 3.
Page 1
2014-15 First Quarter Review
The total cost per million gallons is approximately $1,985.6 based on flows of
194.7 million gallons per day. This is $103.4, or 4.9 percent lower than the
budgeted cost per million gallon per day. A further description of these costs
and benchmarking with other agencies is contained within Section 1 — Pages
6 through 8.
d) The total projected capital outlay cash flow of the Capital Improvement
Program (CIP) for FY 2014-15 has been revised to $155.1 million, or 91.6
percent of the board approved cash outlay of$169.2 million. The actual cash
outlay spending through the first quarter is $21.8 million, or 12.9 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 (PIMCO).
PIMCO reported that the Long-Term Portfolio returned 0.06 percent over the
quarter, outperforming the Merrill Lynch 1-5 year Government Corporate Index by
1 basis points, while the Liquid Operating Monies Portfolio returned 0.03 percent
over the quarter, outperforming its benchmark, the three-month Treasury Bill
index, by two basis points.
PIMCO further notes that Far from the third quarter was marked by geopolitical
tension and diverging markets. Most developed market government yields were
led lower by easy central bank policies, while credit markets backed up. Equity
markets somersaulted their way to modest gains in the U.S., but were flat or
slightly negative in many other regions as economic data varied. U.S. growth
became more sure-footed, but the eurozone recovery sputtered and growth
decelerated in parts of Asia. In addition to headline volatility around central bank
actions and the Scottish independence referendum, geopolitical tensions flared in
Ukraine and the Middle East.
U.S. GDP growth was strong in the second quarter (4.6%), more than reversing
the weather-induced weakness from the first quarter. A large upswing in business
conditions and still high capacity utilization suggested companies will expand their
investment in both capital and labor. Similarly, consumer confidence rose to the
highest level in more than six years. Given this improvement in the outlook for
growth, the Federal Reserve's (Fed) policy rate projections increased modestly
and the U.S. dollar surged more than 7.5% versus its major trading partners.
Nevertheless, with inflation running well-below target, the Fed continued to signal
Page 2
Executive Summary
a dovish bias as it re-affirmed that the policy rate will be at current levels for a
"considerable time" after Quantitative Easing (QE) ends.
News and data from Europe were front and center last quarter. A referendum for
Scottish independence from Great Britain generated substantial interest from the
public and markets, but concerns were laid to rest by a 55% vote against
independence. The eurozone's economic recovery went from anemic to
worrisome, as growth weakened (0% for the second quarter), German business
confidence fell and geopolitical tensions created uncertainty. Importantly,
inflationary expectations continued to fall, spurring European Central Bank
President, Mario Draghi, to expand previous easing measures by cutting rates
and launching a securitized debt buying program. Core rates fell to all-time lows
(below 1% for the 10-year German Bund) and peripheral spreads also tightened.
With a lingering threat of deflation and smaller than expected take-up of the first
targeted longer-term refinancing operation tranche, expectations for full-scale QE
continued to build.
Further east, growth concerns developed in Asia's largest economies, China and
Japan. While recent attempts by the Chinese government to stimulate the
economy appeared to bear some fruit, markets grew concerned that the
traditional policy tools were becoming less effective. In Japan, falling industrial
production and mixed survey data after April's tax hike indicated that the
economy's underlying strength may be lower than previously believed. Moreover,
the slow progress on structural reform added to concerns about Prime Minister
Abe's willingness and capacity to implement less popular growth-enhancing
measures.
In the emerging markets (EM), a number of headlines and country-specific events
drove markets. Tensions over Ukraine pushed the U.S. and European Union to
expand sanctions on Russia, where the economy is likely headed toward a
recession and may eventually reduce growth for neighboring Eastern European
countries. Brazil's upcoming presidential election grabbed market attention as
support for opposition candidate Marina Silva, who entered the race following the
tragic death of Eduardo Campos, became a credible threat to current president
Dilma Rousseff. And lastly, Argentina defaulted on its debt for the second time
since 2001 as the nation was barred from paying interest by a New York judge.
Despite the inability of the government, the "hold-outs" and the U.S. courts to
come to an agreement, bonds were up at quarter end.
The following summarizes fixed income sector returns during the third quarter of
2014:
• U.S. Treasuries returned 0.34% for the quarter and 3.06% year to d
ate (Barclays U.S. Treasury Index). U.S. Treasuries rallied through mid-
August as the market responded to heightened geopolitical risk and still
easy Fed policies. Rates oscillated for the rest of the quarter as stronger
Page 3
2014-15 First Quarter Review
economic data and expectations that the Fed might raise rates sooner
were countered by the return of geopolitical concerns later in the quarter.
In the end, yields rose modestly at the front end of the curve on Fed hike
expectations (2-year yields rose 11 basis points), while long-term yields
remained anchored by low inflation expectations (10- and 30-year
yields declined 4 and 16 basis points, respectively). Finally, the
Barclays U.S. Aggregate Index returned 0.17% during the third quarter.
• Agency mortgage-backed securities (MBS) returned 0.18% for the quarter
and 4.26% year to date (Barclays Agency Fixed-Rate MBS Index). Agency
MBS underperformed like-duration U.S. Treasuries during the quarter,
driven largely by larger levels of issuance and increasing concerns of
MBS demand once the Fed ends its purchase program in October.
• U.S. investment grade credit returned -0.03% during the third quarter and
5.67% year to date, as measured by the Barclays U.S. Credit Index. The
sector underperformed like-duration Treasuries by -0.67% during the
quarter as spreads widened by 11 basis points to 1.07%.
• Treasury Inflation-Protected Securities (TIPS) returned -
2.04% for the third quarter (based on the Barclays U.S. TIPS Index)
and 3.67% year to date. TIPS posted negative returns as real yields in the
U.S. increased and underperformed nominal Treasuries as inflation and
inflation expectations both decreased. Inflation decelerated from the 2%
level seen earlier this year as food and energy prices fell, as did prices for
transportation.
• Tax-
exempt municipals returned 1.49% during the quarter and 7.58% yea
r to date, based on the Barclays Municipal Bond Index. Taxable
municipals also posted positive returns of 0.86% in the third quarter and
11.81% year to date, according to the Barclays Taxable Municipal
Index. Municipal bonds posted positive returns and outperformed
Treasuries. Consistent with the 2014 trend, returns were driven by lower
Treasury rates, negative net new issue supply, and mutual fund inflows.
Net
supply continued to contract, as new issuance did not keep pace wit
h seasonally high levels of maturing bonds.
• 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
Orange County Sanitation District
First Quarter
Financial Report
for the period ended September 30, 2014
I�
-71
� I
Mal
a'1'
r
1.
4�JNSV SANITgT O,I,
N�
$ I p
ti
90
rECTT'Y9 THE ENJPo���2
Table of Contents
ExecutiveSummary...................................................................................................1
Budget Review
Section 1 — Budget Review Summary...................................................................................1
Section 2—Operating Budget Review
Chart of the Cost per Million Gallons by Department—Budget and Actual..............1
Chart of the Net Expenses by Major Category— Budget and Actual........................1
Divisional Contributions to Cost Per Million Gallons ................................................2
Comparison of Expenses by Department.................................................................3
Summary of Collection, Treatment, and Disposal Expenses by Major Category.....4
Summary of District-Wide Revenues .......................................................................5
Summary of Collection, Treatment and Disposal Revenues....................................5
Summary of Collection, Treatment, and Disposal Expenses by Line Item...............6
Summary of Collection, Treatment, and Disposal Expenses by Process.................8
Chartof Staffing Trends...........................................................................................9
Section 3—Capital Improvement Program Budget Review
Capital Improvement Program Graphs by Type and Funding Source......................1
Summary of Capital Improvement Construction Requirements - Current Year........2
Summary of Capital Improvement Construction Requirements - Project Life..........6
Section 4—Capital Assets Schedule & Debt Service Budget Review
CapitalAssets Schedule ..........................................................................................1
Debt Service Budget Review....................................................................................1
Section 5—Self Insurance Budget Review
General Liability and Property Fund Budget Review................................................1
Workers' Compensation Fund Budget Review.........................................................2
Quarterly Treasurers Repo rt........................................................................................1
QuarterlyCOP Repo rt.................................................................................................1
FY 2014-15 First Quarter Financial Report
This Page Intentionally Left Blank
Executive Summary
Consolidated Financial Reports
For the First Quarter Ended
September 30, 2014
Included in this consolidated report are the following quarterly financial reports for the
period ended September 30, 2014:
• First Quarter Budget Review:
The Budget Review Summary provides the Directors, staff, and the general public
with a comprehensive overview of the financial results of the Sanitation District
through the first quarter ended September 30, 2014.
Contained within this Budget Review is the budget-to-actual status of the
Collections, Treatment & Disposal Operations, the Capital Improvement Program,
the Self-Insurance Program, and Debt Service Outlays. Also included is a Capital
Assets Schedule as of September 30, 2014.
Various detail information can be found in this report. In summary:
a) Most major expense categories are anticipated to be at or below budget.
b) Total revenues are at 26.7 percent mainly due to the receipts of $102.3
million from the issuance of Wastewater Refunding Revenue Obligations,
Series 2014A during the first quarter of the fiscal year. The 2014A Obligations
were used to refund a portion of Certificate of Participation Series 2007B.
Excluding debt financing proceeds, total revenues are at 2.6 percent of the
budget due to the timing of property tax and sewer fee distribution from the
County that occurs mostly in the second and fourth quarters. These two
revenue sources make up 86.6 percent of the District's total budgeted
revenue. Except for Service Fees, Property Taxes, User Fees, Capital
Assessments, Interest Earnings, and Other, all other major revenue sources
are currently tracking close to or exceeding revenue estimates. Overall, total
revenues are projected to exceed budget at year-end. More detailed
information on District revenues is provided within Section 1 — Pages 3
through 5.
c) Collection, Treatment and Disposal Costs:
As indicated within the Budget Review Summary of this report, the net
operating requirements through the first quarter of $35.6 million is currently
tracking at 23.3 percent of the $152.5 million budget. In addition, net
operating expenses have increased $1.9 million or 5.5 percent in comparison
with the same period last year. Overall, staff expects the total operating costs
to remain at or below budget throughout the remainder of the year. More
detailed information on District operating expenses is provided within Section
1- Pages 1 through 3.
Page 1
2014-15 First Quarter Review
The total cost per million gallons is approximately $1,985.6 based on flows of
194.7 million gallons per day. This is $103.4, or 4.9 percent lower than the
budgeted cost per million gallon per day. A further description of these costs
and benchmarking with other agencies is contained within Section 1 — Pages
6 through 8.
d) The total projected capital outlay cash flow of the Capital Improvement
Program (CIP) for FY 2014-15 has been revised to $155.1 million, or 91.6
percent of the board approved cash outlay of$169.2 million. The actual cash
outlay spending through the first quarter is $21.8 million, or 12.9 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 (PIMCO).
PIMCO reported that the Long-Term Portfolio returned 0.06 percent over the
quarter, outperforming the Merrill Lynch 1-5 year Government Corporate Index by
1 basis points, while the Liquid Operating Monies Portfolio returned 0.03 percent
over the quarter, outperforming its benchmark, the three-month Treasury Bill
index, by two basis points.
PIMCO further notes that Far from the third quarter was marked by geopolitical
tension and diverging markets. Most developed market government yields were
led lower by easy central bank policies, while credit markets backed up. Equity
markets somersaulted their way to modest gains in the U.S., but were flat or
slightly negative in many other regions as economic data varied. U.S. growth
became more sure-footed, but the eurozone recovery sputtered and growth
decelerated in parts of Asia. In addition to headline volatility around central bank
actions and the Scottish independence referendum, geopolitical tensions flared in
Ukraine and the Middle East.
U.S. GDP growth was strong in the second quarter (4.6%), more than reversing
the weather-induced weakness from the first quarter. A large upswing in business
conditions and still high capacity utilization suggested companies will expand their
investment in both capital and labor. Similarly, consumer confidence rose to the
highest level in more than six years. Given this improvement in the outlook for
growth, the Federal Reserve's (Fed) policy rate projections increased modestly
and the U.S. dollar surged more than 7.5% versus its major trading partners.
Nevertheless, with inflation running well-below target, the Fed continued to signal
Page 2
Executive Summary
a dovish bias as it re-affirmed that the policy rate will be at current levels for a
"considerable time" after Quantitative Easing (QE) ends.
News and data from Europe were front and center last quarter. A referendum for
Scottish independence from Great Britain generated substantial interest from the
public and markets, but concerns were laid to rest by a 55% vote against
independence. The eurozone's economic recovery went from anemic to
worrisome, as growth weakened (0% for the second quarter), German business
confidence fell and geopolitical tensions created uncertainty. Importantly,
inflationary expectations continued to fall, spurring European Central Bank
President, Mario Draghi, to expand previous easing measures by cutting rates
and launching a securitized debt buying program. Core rates fell to all-time lows
(below 1% for the 10-year German Bund) and peripheral spreads also tightened.
With a lingering threat of deflation and smaller than expected take-up of the first
targeted longer-term refinancing operation tranche, expectations for full-scale QE
continued to build.
Further east, growth concerns developed in Asia's largest economies, China and
Japan. While recent attempts by the Chinese government to stimulate the
economy appeared to bear some fruit, markets grew concerned that the
traditional policy tools were becoming less effective. In Japan, falling industrial
production and mixed survey data after April's tax hike indicated that the
economy's underlying strength may be lower than previously believed. Moreover,
the slow progress on structural reform added to concerns about Prime Minister
Abe's willingness and capacity to implement less popular growth-enhancing
measures.
In the emerging markets (EM), a number of headlines and country-specific events
drove markets. Tensions over Ukraine pushed the U.S. and European Union to
expand sanctions on Russia, where the economy is likely headed toward a
recession and may eventually reduce growth for neighboring Eastern European
countries. Brazil's upcoming presidential election grabbed market attention as
support for opposition candidate Marina Silva, who entered the race following the
tragic death of Eduardo Campos, became a credible threat to current president
Dilma Rousseff. And lastly, Argentina defaulted on its debt for the second time
since 2001 as the nation was barred from paying interest by a New York judge.
Despite the inability of the government, the "hold-outs" and the U.S. courts to
come to an agreement, bonds were up at quarter end.
The following summarizes fixed income sector returns during the third quarter of
2014:
• U.S. Treasuries returned 0.34% for the quarter and 3.06% year to date
(Barclays U.S. Treasury Index). U.S. Treasuries rallied through mid-August
as the market responded to heightened geopolitical risk and still easy Fed
policies. Rates oscillated for the rest of the quarter as stronger economic
Page 3
2014-15 First Quarter Review
data and expectations that the Fed might raise rates sooner were
countered by the return of geopolitical concerns later in the quarter. In the
end, yields rose modestly at the front end of the curve on Fed hike
expectations (2-year yields rose 11 basis points), while long-term yields
remained anchored by low inflation expectations (10- and 30-year yields
declined 4 and 16 basis points, respectively). Finally, the Barclays U.S.
Aggregate Index returned 0.17% during the third quarter.
• Agency mortgage-backed securities (MBS) returned 0.18% for the quarter
and 4.26% year to date (Barclays Agency Fixed-Rate MBS Index). Agency
MBS underperformed like-duration U.S. Treasuries during the quarter,
driven largely by larger levels of issuance and increasing concerns of MBS
demand once the Fed ends its purchase program in October.
• U.S. investment grade credit returned -0.03% during the third quarter and
5.67% year to date, as measured by the Barclays U.S. Credit Index. The
sector underperformed like-duration Treasuries by -0.67% during the
quarter as spreads widened by 11 basis points to 1.07%.
• Treasury Inflation-Protected Securities (TIPS) returned -2.04% for the third
quarter (based on the Barclays U.S. TIPS Index) and 3.67% year to date.
TIPS posted negative returns as real yields in the U.S. increased and
underperformed nominal Treasuries as inflation and inflation expectations
both decreased. Inflation decelerated from the 2% level seen earlier this
year as food and energy prices fell, as did prices for transportation.
• Tax-exempt municipals returned 1.49% during the quarter and 7.58% year
to date, based on the Barclays Municipal Bond Index. Taxable municipals
also posted positive returns of 0.86% in the third quarter and 11.81% year
to date, according to the Barclays Taxable Municipal Index. Municipal
bonds posted positive returns and outperformed Treasuries. Consistent
with the 2014 trend, returns were driven by lower Treasury rates, negative
net new issue supply, and mutual fund inflows. Net supply continued to
contract, as new issuance did not keep pace with seasonally high levels of
maturing bonds.
• 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
Budget Review Summary
First Quarter Financial Report
September 30, 2014
Financial Management is pleased to present the FY 2014-15 first 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 September 30, 2014, 23.3 percent, or $35.6 million of
the FY 2014-15 revised net operating budget of$152.5 million has been expended. Net
operating expenses increased from the same period last year by $1.9 million, or 5.5
percent, mainly due to an increase of $542,000 in Salaries and Benefits, $116,000 in
Administrative Expenses, $308,000 in Operating Materials and Supplies, $1.4 million in
Repairs and Maintenance, and $229,000 in Utilities. These cost increases have been
partially offset by decreases of$43,000 in Contractual Services, $61,000 in Professional
Services, $88,000 in Other Operating Supplies, and an increase of $511,000 in indirect
costs allocated out to capital projects. These and other variances that factor into this
net increase in expenses are discussed in more detail below. Overall, staff expects
the total operating costs to remain at or below budget throughout the remainder
of the year.
Significant operating results as of September 30, 2014 include the following:
• Salaries. Wages and Benefits— Personnel costs of$22.7 million are below target
at 22.9 percent of budget through the first quarter of FY 2014-15. Although the
budget is based on a 3 percent vacancy factor, staffing is 43 full-time equivalents
(FTE's), or 6.9 percent below the total 626 FTE's approved in the FY 2014-15
budget. Salary and benefit costs are 2.4 percent, or $542,000 higher than the $22.2
million incurred in the same period last year mainly due to the increase of retirement
costs offset by a decrease in salaries and wages. Net operating personnel costs
are expected to approximate budget throughout the remainder of the year.
• Administrative Expenses — Administrative Expenses totaled $402,000, or 28.8
percent of the $1.4 million budget through September 30. These costs are
$116,000 or 40.4 percent higher at September 30 in comparison with the prior year
mainly due to an increase in purchases of small computer items and the timing of
membership payments. It is anticipated that the administrative costs will
approximate budget at year-end.
• Printing and Publication Expenses — Printing and Publication Expenses totaled
$74,000, or 17.2 percent of the $430,000 budget through September 30. These
costs are $19,000 or 35.4 percent higher at September 30 in comparison with the
Section 1 - Page 1
FY 2014-15 First Quarter Report
prior year mainly due to the purchase of aluminum prints of the new core values and
timing of payments for managed copy center services. It is anticipated that the
printing and publication costs will be below budget at year-end
• Training and Meetings — Training and meetings of $125,000 are below target at
12.0 percent of the $1.0 million budget. This account is lower than the
proportionate budget due to the timing of training throughout the year. These costs
have decreased over the same period last year by $3,000 or 2.0 percent. Total
training and meeting costs are anticipated to be below budget at year-end.
• Operating Materials and Supplies — Operating materials and supplies of $4.1
million is at target at 25.9 percent of budget through September 30. Operating
Materials and Supplies have increased from the prior year by $308,000 or 8.1
percent, primarily due to increases in Chemical Coagulants of $195,000, Odor
Control of $45,000, Gas, Diesel & Oil of $14,000, and Safety Equipment of$46,000.
The increases are mainly brought about by timing of chemical deliveries and rate
increases. Based on current processes, operating materials and supplies are
anticipated to approximate budget at year-end.
• Contractual Services — Overall costs for contractual services are below target at
approximately $5.3 million or 21.7 percent of budget through September 30.
Solids Removal costs, budgeted at $18.3 million, comprise the majority of this
expense category. With a decrease of $3,000, or 0.1 percent lower than the prior
year, solids removal costs totaled $4.4 million, or 24.0 percent of budget at
September 30. Additional decreases include $132,000 in Other Contractual Services
due to manhole rehabilitations and sewer line cleaning in the prior period, offset by
increases of $58,000 in Grit & Screenings Disposal and $30,000 in Security
Services. Overall, Contractual Services is lower by $43,000 or 0.8 percent, over the
same period last year. Total contractual services costs are anticipated to
approximate budget at year-end.
• Professional Services — Professional services costs totaled $454,000 or 13.9
percent of the $3.3 million budget through September 30. Most professional
service costs, such as Legal, Engineering, Environmental Consulting, Software
Program Consulting Services, Industrial Hygiene Services, Labor Negotiation, and
Other Services, are proportionately low through September 30 due to a variety of
factors such as services being in the planning or request for proposal stage, services
not being needed until later in the fiscal year, or the need for the service is being re-
evaluated. These costs are $61,000 or 11.8 percent lower at September 30 in
comparison with the prior year mainly due to timing of services performed. It is
anticipated that the costs for this category will be at or below budget at year-
end.
• Research & Monitoring — Research and monitoring costs totaled $199,000, or
24.0 percent of the $830,000 budget through September 30. These costs are
$2,000, or 1.2 percent lower at September 30 in comparison with the prior year.
Section 1 - Page 2
Budget Review Summary
Total Research & Monitoring costs are anticipated to approximate budget at
year-end.
• Repairs and Maintenance — Repair and maintenance costs totaled $3.3 million,
or 24.9 percent of the $13.1 million budget through September 30. These costs
are $1.4 million, or 71.8 percent higher at September 30 in comparison with the prior
year, mainly due to current period additional unanticipated service repairs, such as
Plant 1 Headworks repairs and carbon media installation in Plant 2 trickling filters.
Additionally, several prepayments totaling $432,000 were made in the prior year for
computer maintenance agreements recognized as expenses in the current year. It
is anticipated that the costs for this category will approximate budget at year-
end.
• Utilities — Utilities costs totaled $2.4 million, or 32.0 percent of the $7.4 million
budget through September 30. These costs are $229,000 or 10.6 percent higher
at September 30 in comparison with the prior year, primarily due to an increase in
electricity and gas charges totaling $323,000 as a result of increased rates, and
usage primarily related to weather variations, offset by a decrease of $102,000 in
Green Acres Project (GAP) water usage due to completion of Project J-109, Cengen
Cooling Water System Replacement. The overall operating philosophy of the
Central Generation facilities is to purchase electricity for power production rather
than to purchase natural gas as a supplement to the digester gas needed to run the
Central Generation facilities. This operating philosophy allows the Central
Generation facilities to meet air emission requirements. It is anticipated that the
costs will approximate budget at year-end.
• Other Operating Supplies — Other operating supplies costs totaled $297,000, or
19.3 percent of the $1.5 million budget through September 30. These costs are
$88,000 or 22.8 percent lower at September 30 in comparison with the prior year,
primarily due to a decrease in general liability in-lieu premium charges based on the
estimated amount required to maintain recommended reserve balances. It is
anticipated that the costs will be below budget at year-end.
• Other Non-Operating Expenses — Other Non-Operating costs totaled $15,000, or
22.8 percent of the $67,000 budget through September 30. These costs are 0.8
percent higher at September 30 in comparison with the prior year. It is anticipated
that the costs will be at or below budget at year-end
• Revenues — Service Fees & Property Taxes — Through September 30, revenues
from service fees are at <$533,000>, or <0.2> percent of budget and Property
taxes are $2.5 million, or 3.3 percent of budget. These items comprise the
majority of the Sanitation District's revenues and are mostly collected by the County
through the property tax roll and distributed to the Sanitation District throughout the
year based on a set distribution schedule that begins in November of each year.
The decrease in service fee revenue is due to an increase of $585,000 in user fee
Section 1 - Page 3
FY 2014-15 First Quarter Report
refunds issued in the current year. These revenues are expected to approximate
budget at year-end.
• Revenues — Permittee User Fees — Permittee User Fees are at $1.6 million, or
11.7 percent of the $13.7 million budget. The number of permittees fluctuates
from year to year as businesses are established or close their operations. The
revenues through the first quarter are $1.1 million or 40.6 percent lower in
comparison with the same period last year due to a decrease in amount of discharge
from the permittees. It is estimated that the permittee user charges will be at or
below budget at year-end.
• Revenues — Inter District Sewer Use - SAWPA — Inter District Sewer revenues-
SAWPA are at $526,000, or 20.8 percent of the $2.5 million budget. This
revenue is derived from charges to the Santa Ana Watershed Protection Agency
(SAWPA) for treatment of flows. These revenues are expected to be at or below
budget at year-end.
• Revenues — Intra District Sewer Use — IRWD — Intra District Sewer revenues-
IRWD are at $711,000, or 30.9 percent of the $2.3 million budget. This revenue
is derived from charges to the Irvine Ranch Water District (IRWD) for treatment of
flows. The revenues through the first quarter are higher than the same period last
year by $268,000 or 60.7 percent mainly due to an increase in unit costs of various
charges and a fluctuation of interest earnings of $120,000 allocated to IRWD.
These revenues are expected to approximate budget at year-end.
• Revenues - Sludge Disposal- IRWD - Sludge Disposal fees-IRWD are at $2.4
million, or 28.7 percent of the $8.4 million budget. The revenue is derived and
fluctuated from flows discharged from IRWD to Sanitation District for the handling,
treatment and disposal of solids. These revenues are expected to approximate
budget at year-end.
• Revenues — Capital Assessments- IRWD — Capital Assessments-IRWD are at
<$1.2 million>, or <33.4> percent of the $3.5 million budget. The revenues
through the first quarter are lower than the same period last year by $1.3 million or
805.6 percent mainly due to a reversal of$1.5 million from the prior year-end accrual
for projects that have been placed in service during the year. Projects that are
placed in service are accrued and depreciated at year-end and reversed in the
beginning of the following year. It is estimated that the capital assessments will
be below budget at year-end.
• Revenues — Capital Facilities, Capacity Charges (CFCC) — CFCC are at $4.5
million, or 39.9 percent of the $11.4 million budget. The revenues through the
first quarter are higher than the same period last year by $505,000 or 12.6 percent
due to an increase in construction activity in the current year. These revenues are
expected to exceed the budget at year-end.
Section 1 - Page 4
Budget Review Summary
• Revenues — Interest Earnings — Interest Earnings are at <$135,000> or <1.0>
percent of the $13.1 million budget. The revenues through the first quarter are
lower than the proportionate budget due to the total return of the Sanitation District's
liquid and long-term operating investments being less than what was anticipated. It
is estimated that the interest earnings will be at or below the budget amount at
year-end.
• Revenues — Wastehauler — Wastehauler revenues are at $148,000 or 22.4
percent of the $660,000 budget. This revenue is derived from fees charged to
wastehaulers allowing them to dump waste into the Sanitation District's system.
These revenues are expected to approximate budget at year-end.
• Revenues — CNG Sales — CNG Sales revenues are at $109,000 or 32.9 percent
of the $331,000 budget. The revenues through the first quarter are higher than the
same period last year by $73,000 or 199.8 percent due to the compressed natural
gas (CNG) fueling station located at the front entrance of Plant No. 1 being shut
down in the prior year for 3 months from mid-August to November 2013 while gas
lines were rerouted for the Sludge Dewatering and Odor Control Project (Project No.
P1-101). These revenues are expected to approximate budget at year-end.
• Revenues - Other — Other non-operating revenues are at $48,000 or 11.6
percent of the $410,000 budget. These revenues consist of charges to Sunset
Beach Sanitary District for treatment of flows and other miscellaneous revenues.
The revenues in the first quarter are $112,000, or 70.2 percent lower in comparison
with the same period last year mainly due to $70,000 of purchasing card rebate
credits received in the first quarter of the prior year. The rebate credit was $118,000
for the current year, but not received until the beginning of the second quarter.
These revenues are expected to be below budget at year-end.
Section 1 - Page 5
FY 2014-15 First Quarter Report
Comparison of First Quarter Cost per
Million Gallon Results with Budget
Last Five Years
I
2,075
2,000 2,o 9
1,925 2,01 7 1'%6
1,850
1,775
1,700 �• �.� 1,761
1,625
1,550
1,475
1,400
1,325
1,250
1,175
1,100
1,025
950
875
800
725
650
575
10-11 11-1 19:13 13-14 14-1
tat Annual tat Annual tat Annual tat Annual let Annual
Qtr Budget Qtr Budget Qtr Budget Qtr Budget Qtr Budget
As demonstrated in the preceding graph for each of the last four fiscal years, the cost
per million gallons at the end of the first quarter has been 8.0 percent to 10.4 percent
lower than the annual budget. The FY 2014-15 first quarter, although higher than
previous years, continues with this trend with 4.9 percent lower when compared with
this year's budget. Staff believes that overall operating costs will be below budget at
year-end.
The total cost per million gallons at September 30 is $1,985.6 based on flows of
194.7 million gallons per day. This is $103.4 or 4.9 percent lower than the budgeted
cost per million gallons of $2,089.0. 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 6.7
percent less than the proportionate budget through September 30, which is partially
offset by flows of 194.7 million gallons per day being 2.6 percent lower than the
budgeted flow of 200 million gallons per day.
More detailed information on operating revenues, costs, and related information is
provided within Section 2.
Section 1 - Page 6
Budget Review Summary
Following are data tables showing the last five years of Single Family Residential User
Fees (SFR) and the cost per MG to collect, treat, and dispose of wastewater for OCSD
and for similar agencies. The agencies used in the table were determined to be those
that most closely resembled OCSD in terms of services provided and treatment levels.
The summaries demonstrate that OCSD's SFR and cost per million gallons are each
one of the lowest in their respective group.
Benchmark Study
Five-Year Single Family Rate
Rates as of July
2010 2011 2012 2013 2014
Agency SFR SFR SFR SFR SFR Notes
San Francisco $613.44 $636.00 $667.92 $701.40 $ 744.83
City of San Diego $608.04 $608.04 $572.58 $572.58 $ 572.58
Vallejo Sanitation/Flood Control District $464.52 $483.12 $495.12 $507.48 $ 520.20
Central Contra Costa Sanitary District $311.00 $341.00 $371.00 $405.00 $ 439.00
City of Los Angeles $359.64 $358.66 $391.56 $409.20 $ 435.40 Note 1
Dublin San Ramon Services District $299.46 $345.06 $355.44 $355.44 $ 372.96
East Bay MUD $271.84 $287.98 $305.10 $331.10 $ 358.14
Union Sanitary District $289.84 $304.33 $319.55 $337.76 $ 357.02
Sacramento County $240.00 $264.00 $288.00 $312.00 $ 348.00
City of Hayward $308.40 $317.64 $327.24 $327.24 $ 337.08
Orange County Sanitation District $244.00 $267.00 $294.00 $308.00 $ 316.00
City of Fresno $299.76 $299.76 $309.00 $309.00 $ 309.00
Irvine Ranch Water District $ 199.80 $202.80 $206.40 $220.80 $ 246.00 Note 2
Los Angeles County $ 141.00 $143.00 $149.00 $230.00 $ 245.00
Oro Loma Sanitary District $178.00 $183.00 $189.00 $195.00 $ 200.00
Notes:
(1)-Data is for the typical SFR customer rate and is not the average rate.
(2)-Data represents the maximum SFR rate and is not the average rate.
Section 1 - Page 7
FY 2014-15 First Quarter Report
Benchmark Study
Five-Year Cost per MG
FY 08-09 FY S10 FY 10-11 FY 11-12 FY 12-13
Agency Svc. Trt. Cost/MG Cost/MG CosUMG CostIMG Cost/MG Notes
Vallejo Sanitation/Flood Control District B 3 $4,865.00 $4,911.00 $4,536.00 $5,176.00 $5,435.00
San Francisco B 3 $3,994.34 $4,339.32 $3,857.80 $4,778.96 $5,006.74 Note 3
Central Contra Costa Sanitary District B 4 $3,874.06 $4,136.89 $3,929.80 $4,203.43 $4,621.84
Union Sanitary District B 3 $2,83252 $2,964.94 $3,206.10 $3,267.06 $3,80540
City of San Diego B 2 $3,060.41 $3,583.70 $3,208.48 $3,242.30 $3,340.35 Note 5
East Bay MUD T 4 $2,081.36 $1,856.65 $2,000.31 $2,320.02 $2,359.40
Dublin San Ramon Services District B 3 $2,039.79 $1,905.99 $1,964.64 $2,009.57 $2,159.49
Sacramento County T 3 $1,791.44 $1,638.91 $1,591.75 $3,312.50 $2,143.16 Note
City of Los Angeles B 4 $1,904.00 $1,880.00 $1,836.00 $1,935.00 $2,062.00 Note 1
Orange County Sanitation District B 2 $1,576.67 $1,598.72 $1,816.62 $1,871.47 $1,906.01
City of Fresno B 3 $1,227.68 $1,207.20 $1,263.50 $1,383.60 $1,411.89
Los Angeles County $1,096.00 $1,117.00 $1,078.00 $1,156.00 $1,008.00 Note
Irene Ranch Water District $1,935A5 $1,962.02 WA NIA NIA Note 4
Legend for Service ProWed and Treatment Letel:
B-Agency operates both collection and tretment facilities
T-Agency proudes treatment services but not collection
2-Advanced primary or primary with some secondary treatment
3-Secondary treatment
4-Advanced secondary or secondary with some tertiary treatment
Notes:
(1)-In FY2003.04 the Cityapplied Engineers and Architects Association(EAR COLA which covered multiple}ears.
(2)-Does not include source control or ohedhead costs.
(3)-New dataset represents wastwater flows from finalized publiclyavailable audited documents.
(4)-Cost of Wastewater Treatment,including Collections,Treatment and GenerallAdministrative Costs minus rederned water e)penses.
(5)-Beginning in Fiscal Year200H9,cost per mg includes the Point Loma Wastewater Treament Plant and South Bay Water Redamation Plant.
(6)-Mles of sewers number changed in 2012 to include parallel force main pipes per the 2011 State of the District Report.
NIA-Not currently available.
Section 1 - Page 8
Budget Review Summary
Capital Outlay Review:
$200,000,000
$150,000,000
$100,000,000
$50,000,000
$0
9130/14 Actual Projected 2014-15 2014-15 Capital
Capital Outlay Capital Outlay Outlay Cashflow
$21,847,000 $155,062,300 Budget
$169,235,000
As depicted by the preceding chart, Capital Outlays totaled $21,847,000 or 12.9
percent of the capital outlay cash flow budget for FY 2014-15 as of September 30,
2014. Costs are proportionately low through the first quarter as some projects are still
in the design phase or have experienced various delays. Examples as of September 30
are the Sludge Dewatering and Odor Control at Plant 1 which has a FY14-15 cash flow
budget of $61.1 million but actual costs of only $6.4 million, and the Title 24 Access
Compliance and Building Rehabilitation Project, which has a budget of $4.8 million but
actual costs of only $134,000. Overall, the capital outlay costs of the capital
improvement program are expected to approximate $155.1 million, or 91.6 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 & 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 September 30, 2014, 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. As of September
30 2014, 11.0 percent of the principal payments have been made through the end of the
first quarter. Total principal payments are expected to approximate budget at year-end.
Interest costs are expensed ratably throughout the fiscal year. Interest expense is
anticipated to approximate budget at year-end.
Section 1 - Page 9
FY 2014-15 First Quarter Report
Self-Insurance Budget Reviews: Section 5 is the Self-Insurance Section. Through
September 30, the Self-Insurance Fund revenues totaled $315,000, 24.6 percent of the
budget, while expenses were $503,000, 22.9 percent of the budget.
Separate fund accounting is used for recording the revenue and expenses incurred in
managing these liability claims. The revenues to these funds represent charges to
operating divisions. Expenses to these funds include actual claims paid, claims
administration, and excess loss policies.
Section 1 - Page 10
Operating Budget Review
Cost per Million Gallons by Department
Budget and Actual
September 30, 2014
$1.300
$1.200
$1,100
$1,000
$900
$800
$700
E600
E599
$a00
E300
E299
$ioo
$0
E E —
z —
E
w � �Butlgei �Adual
Collection,Treatment, & Disposal Expenses by Major Category
Budget and Actual (in thousands)
September 30, 2014
$65,000
$60,000
$56,000
$50,000
U5,000
EA0,000
$36,000
$30,000
$26,000
$20,000
$15,000
$10,000
$5.000
$Q
y E N N a a
F N
h E g' m O m 2 C 5m
-
vQ
�ButlBet �Aclual O
Section 2-Page 1
2014-15 First Quarter Report
Divisional Contributions to Cost Per Million Gallons
For the Three Months Ended September 30,2014
2014-15
9/30112 9/30113 Annual 9130114
Actual Actual Budget Actual
Flow in Million Gallons 18,912.00 18,635.08 73,000.00 17,915.60
Flow in Million Gallons per Day 205.57 202.56 200.00 194.73
Executive Management Department
General Management Administration $ 22.62 $ 25.49 $ 36.43 $ 24.31
Board Services 6.03 7.57 9.03 5.57
Public Affairs 16.68 6.53 10.93 6.68
Subtotal 45.33 39.59 56.39 36.56
Human Resources Department
Human Resources 49.48 47.58 65.25 50.48
Subtotal 49.48 47.58 65.25 50.48
Administrative Services Department
Administrative Services 8.34 7.88 9.28 8.36
Financial Management 36.07 37.60 51.09 42.16
Contracts, Purchasing,&Materials Mgmt. 50.84 52.45 61.90 59.49
Information Technology 113.57 120.20 142.28 154.53
Risk Management 49.41 41.68 53.90 44.97
Subtotal 258.23 259.81 318.45 309.51
Facilities Support Services Department
Facilities Support Administration 7.34 7.49 9.71 8.45
Facilities Support 6.29 6.13 6.72 6.65
Equipment Rebuild 18.66 19.65 22.62 24.65
Fleet Services 20.79 22.24 27.37 28.66
Facilities Engineering&Repair Services 59.43 35.76 53.04 39.11
NPDES Source Inspection 29.39 32.57 36.17 29.06
Odor and Corrosion Control 91.20 88.95 98.59 96.93
Collection Facilities O&M 54.61 46.67 55.33 58.63
Subtotal 287.71 259.46 309.55 292.14
Engineering Department
Engineering Administration 5.51 5A4 5.69 8.79
Planning 38.20 42.13 50.17 41.06
Project Management Office 42.53 44.18 49.03 49.68
Engineering and Construction 113.88 112.52 125.29 114.57
Environmental Compliance 77.55 77.59 92.56 85.75
Subtotal 277.67 281.86 322.74 299.85
Operations&Maintenance Department
Operations&Maintenance Administration 9.16 10.70 12.55 10.36
Plant No. 1 Operations 319.13 344.61 362.96 371.88
Plant No.2 Operations 291.05 290.39 310.58 313.66
Building, Grounds&Mechanical Maintenance 141.35 163.29 230.03 204.14
Instrumentation&Electrical Maintenance 175.41 184.87 216.73 193.08
Environmental Laboratory&Ocean Monitoring 98.77 99.40 113.11 112.18
Subtotal 1,034.87 1,093.26 1,245.96 1,205.30
Total Operating Expenses 1.953.29 1,981.56 2,318.34 2,193.84
Cost Allocation (192.11) (172.81) (229.34) (208.23)
Net Operating Requirements $ 1,711.18 $ 1,808.75 $ 2,089.00 $ 1,985.61
Section 2-Page 2
Operating Budget Review
Comparison of Expenses by Department
For the Three Months Ended September 30, 2014
2014-15
9130112 9130/13 year to Date Budget%
Department and Division Actual Actual Budget 9/30/14 Realized
Executive Management Department
General Management Administration $ 427,844 $ 475,084 $ 2,659,070 $ 435,580 16.38%
Board Services 113,985 141,003 659,220 99,731 15.13%
Public Affairs 315,398 121,617 798,200 119,695 15.00%
Subtotal 857,227 737,704 4,116,490 655,006 15.91%
Human Resources Department
Human Resources 935,823 886,595 4,763,030 904,423 18.99%
Subtotal 935,823 886,595 4,763,030 904,423 18.99%
Administrative Services Department
Administrative Services 157,791 146,781 677,510 149,838 22.12%
Financial Management 682,094 700,717 3,729,300 755,290 20.25%
Contracts, Purchasing,&Materials Mgmt. 961,429 977,396 4,518,800 1,065,857 23.59%
Information Technology 2,147,916 2,239,878 10,386,290 2,768,527 26.66%
Risk Management 934,484 776,733 3,934,910 805,719 20.48%
Subtotal 4,883,714 4,841,505 23,246,810 5,545,231 23.85%
Facilities Support Services Department
Facilities Support Administration 138,814 139,537 709,130 151,457 21.36%
Facilities Support 118,979 114,239 490,790 119,146 24.28%
Equipment Rebuild 352,931 366,267 1,651,440 441,691 26.75%
Fleet Services 393,216 414,371 1,997,800 513,519 25.70%
Facilities Engineering&Repair Services 1,124,007 666,339 3,871,880 700,751 18.10%
NPDES Source Inspection 555,831 606,908 2,640,360 520,712 19.72%
Odor and Corrosion Control 1,724,845 1,657,536 7,196,980 1,736,597 24.13%
Collection Facilities O&M 1,032,878 869,665 4,039,300 1,050,312 26.00%
Subtotal 5,441,501 4,834,862 22,597,680 5,234,185 23.16%
Engineering Department
Engineering Administration 104,254 101,340 415,210 157,505 37.93%
Planning 722,344 785,070 3,662,170 735,592 20.09%
Project Management Office 804,238 823,327 3,579,510 890,090 24.87%
Engineering and Construction 2,153,693 2,096,765 9,146,430 2,052.518 22.44%
Environmental Compliance 1,466,694 1,445,942 6,757,090 1,536,320 22.74%
Subtotal 5,251,223 5,252,444 23,560,410 5,372,025 22.80%
Operations&Maintenance Department
Operations&Maintenance Administration 173,203 199,309 916,210 185.645 20.26%
Plant No. 1 Operations 6,035,328 6,421,854 26,496,250 6,662,415 25.14%
Plant No.2 Operations 5,504,272 5,411,340 22,671,990 5,619,386 24.79%
Building,Grounds&Mechanical Maintenance 2,673,277 3,042,961 16,792,130 3,657,346 21.78%
Instrumentation&Electrical Maintenance 3,317,354 3,444,986 15,821,250 3,459.180 21.86%
Environmental Laboratory&Ocean Monitoring 1,867,760 1,852,906 8,258,570 2,009,382 24.33%
Subtotal 19,571,194 20,373,356 90,956,400 21,593,354 23.74%
Total Operating Expenses 36,940,682 36,926,466 169,240,820 39,304,224 23.22%
Cost Allocation (3,633,154) (3,220,325) (16,740,700) (3,730.868) 22.29%
Net Operating Requirements $ 33,307,528 $ 33,706,141 $ 152,500,120 $ 35,573,356 23.33%
Section 2-Page 3
2014-15 First Quarter Report
Summary of Collection, Treatment, &Disposal Expenses by Major Category
For the Three Months Ended September 30, 2014
Expense Expense Increase Increase Percent
Budget Through Through (Decrease) (Decrease) Budget Remaining
Description 2014-15 9130114 9/30/13 $ % Realized Budget
Salary&Wages $ 63,460,100 14.958,814 15,089,551 $ (130,737) -0.87% 23.57% $48,501,286
Employee Benefits 35,708,700 7,788,032 7,114,954 673,078 9.46% 21,81% 27,920,668
Administrative Expenses 1,397,070 401,662 286,070 115,592 40.41% 28.75% 995,408
Printing&Publication 430,340 74,161 54,769 19,392 35.41% 17,23% 356,179
Training&Meetings 1,041,710 124,555 127,065 (2,510) -1.98% 11.96% 917,155
Operating Materials&Supplies 15,830,500 4,097,453 3,789,135 308,318 8.14% 25.88% 11,733,047
Contractual Services 24.278,170 5,257,651 5,300,881 (43,230) -0.82% 21.66% 19,020,519
Professional Services 3,269,370 454,072 514,685 (60,613) -11,78% 13.89% 2,815,298
Research&Monitoring 830,000 198,984 201,375 (2,391) -1.19% 23.97% 631,016
Repairs&Maintenance 13,063,210 3,254,607 1,894,989 1,359,618 71,75% 24,91% 9,808,603
Utilities 7,437,770 2,381,775 2,153,072 228,703 10.62% 32.02% 5.055,995
Other Materials,Supplies,
and Services 2,493,880 312,458 399,920 (87,462) -21.87% 12.53% 2,181,422
Net Cost Allocation (16,740,700) (3,730,868) (3,220,325) (510,543) 15.85% 22.29% (13,009,832)
Net Operating Requirements 152,600,120 35,573,356 33,706,141 1,867,215 5.54% 23.33% 116,926,764
Gallonage Flow(MG) 73,000.00 17,915.60 18.635.08 (719.48) -3.86%
Gallonage Flow(MGD) 200.00 194.73 202.56 (7.83) -3.87%
Gallonage Flow(Vs/MG) $27089000 $1,985.61 $1,808.75 $176.86 9.78%
Section 2-Page 4
Operating Budget Review
Summary of Revenues
For the Three Months Ended September 30, 2014
Revenue Percent Revenue Increase Increase
Budget Through Budget Remaining Through (Decrease) (Decrease)
Description 2014-15 9/30/14 Realized Budget 9130113 $ %
Service Fees $ 288,946,000 $ (533,104) .0.18% $289,479,104 $ 14,282 $ (547,386) -3832.70%
User Fees(Permits) 13,684,000 1,606,607 11.74% 12,077,393 2,702,972 (1,096,365) -40.56%
Inter District Sewer Use-SAWPA 2,529,000 525.900 20.79% 2,003,100 642,582 (116.682) -18.16%
Intra District Sewer Use-IRWD 2,302,140 710,569 30.87% 1,591,571 442,122 268,447 60.72%
Sludge Disposal-IRWD 8,394,000 2.410.196 28]1% 5,983,804 1,788,461 621.735 34.76%
Capital Assessments-IRWD 3,469,000 (1,158,624) -33.40% 4,627,624 164,194 (1,322,818) -805.64%
Capital Facilities Capacity Charges 11,355,000 4,526,294 39.86% 6,828,706 4,021,097 505.197 12.56%
Debt Proceeds - 102,251,006 N/A (102,251,006) - 102,251,006 100.00%
Property Taaes 77,733,000 2,529,548 3.25% 75,203,452 2,118,777 410.771 19.39%
Interest Earnings 13,143,000 (135,463) -1.03% 13,278,463 1,226,338 (1,361,801) -111.05%
Wastehauler 660,000 147.839 22.40% 512,161 132,141 15,698 11.88%
CNG Sales 331,000 108,905 32.90% 222,095 36,328 72,577 199.78%
Rents&Leases 251,000 59,726 23.80% 191,274 58.555 1,171 2.00%
Other 410,000 47,522 11.59% 362,478 159,246 (111,724) -70.16%
Power Sales 4.000 7,267 181.68% (3,267) 1.380 5,887 426.59%
Other Sales 9,000 1,643 18.26% 7,357 1,140 503 44.12%
Total Revenues $ 423,220,140 $ 113,105,831 26.73% $310,114,309 $13,509,615 $ 99,596,216 737.22%
Section 2-Page 5
2014-15 First Quarter Report
Summary of Collection,Treatment, &Disposal Expenses by Line Item
For the Three Months Ended September 30,2014
Expense Percent Expense Increase Increase
Budget Through Budget Remaining Through (Decrease) (Decrease)
Description 2014.15 9130116 Expensed Budget 950113 $ %
Salaries.Wanes&Benefits
Salaries&Wages $ 63,460,100 $ 14,958,814 23.57% $ 48,501,286 $ 15,089,551 $ (130,737) -0.87%
Employee Benefits
Retirement 25,398,200 5,340,009 21.03% 20,058,191 4,753,349 586,660 12.34%
Group Insurances 8,965,000 2,146,180 23.94% 6,818,820 2,103,887 42,293 2.01%
Tuition&Certlficaan Relmb 173,400 28,839 16.63% 144,561 48,077 (19,238) 40.01%
Edu.degreea,Cad.&Lic. 295.800 69,535 23.51% 226,265 68.663 872 1.27%
Untorm Rental 54,100 12,055 22.28% 42,045 11,242 813 7.23%
Workers Compensation 755,000 188,750 25.00% 566,250 113,750 75,000 65.93%
Unemployment nsurance 60,100 1,085 1.81% 59,015 14,407 (13,322) -92.47%
EMT Supplemental Benefits 7,100 1,579 22.24% 5.521 1.579 0.00%
Total Benefits 35,708,700 T,788,032 21.81% 27,920,668 7,114,954 673,078 9.46%
Salaries,Wages&Barnette 99,168,800 22,746,846 22.94% 76,421,954 22,204,505 542,341 2.44%
Mail.supply,&Services
Administrative Expenses
Memberships 576,240 238,200 41.34% 338,040 145.527 92,673 63.61
Office Exp-Supplies 67,840 8,297 12.23% 59,543 11.841 (3,544) -29.93%
Postage 38,570 6,806 17.65% 31,764 11,574 (4,766) 41.20%
Books&Publications 40,600 2,691 6.63% 37,909 5,426 (2,73,1) -50.40%
Fortes 890 - 0.00% 890 - - NIA
Small Computer Items 550.000 133,322 24.24% 416.678 90.342 42,980 47.57%
Minor Furniture&Fixtures 122,930 12,346 10.04% 1101584 21,361 (9,015) 42120%
Subtotal 1,397,070 401,662 28.75% 995,408 286,070 115,592 40.41%
Printing&Publication
Repro-In-House 378,640 63,908 16.88% 314,732 37,877 26,031 68.73%
Printing-Oulside 26,330 6,616 25.13% 19,714 7,957 (1,341) -16.85%
Nations&Ad. 25,110 3,418 13.61% 21,692 8,842 (5,424) -61.34%
Photo Processing 260 219 84.23% 41 93 126 135.48%
Subtotal 430,340 74,161 17.23% 355,179 54,169 19,392 35.41%
Training&Meetings
Meetings 189.970 25,873 13.62% 164,O97 23.648 2,225 9.41%
Training 851,740 98,682 11.59% 753,058 103,417 (4,735) 4.58%
Subtotal 1p41,710 124,555 11.96% 917,156 127,065 (2,610) -1.98%
Operating Marls&Supplies
Chemical Coagulants 5,785,000 1,678,584 29,02% 4,106,416 1,483,976 194,608 13.11%
Odor Control 7,056,600 1,779,767 25.22% 5,276,833 1,734,844 44,923 2.59%
Disinfection 425,000 70,348 16.55% 354,652 70,504 (1m) -0.22%
Chemicals-Miss,&Cogan 68.000 2,400 3.53% 65.600 6.373 (3,973) -62.34%
Gasoline,Diesel&Oil 665,800 135,934 20.42% 529,866 122,128 13,806 11.30%
Tools 409,370 93,101 22.74% 316,269 85,677 7,424 8.67%
Safety equlpmentlools 461,440 130,162 28.21% 331,278 83,693 46,469 55.52%
Sol,Paints&Jan.Supplies 90.610 23,153 25.55% 67,457 21.096 2,057 9.75%
Lab Chemicals&Supplies 690,770 154,664 22.39% 536,106 145,431 9,233 6.35%
Other Operatng Supplies 161,220 29,340 18.20% 131,880 35,413 (6,073) -11.15%
Property Tax Fees 16,690 0.00% 16,690 NIA
Subtotal 15,830,500 4,097,453 25.88% 11,733.067 3789,135 308,318 8.14%
Contractual Services
Solids Removal 18,321,850 4,399,507 24.01% 13,922,343 4,402,307 (2,800) -0.06%
Other Waste Disposal 831,450 211,50 25.45% 619,882 153,617 57,951 37.72%
Groundskeeping 170,000 38,633 22.73% 131,367 49,406 (10,773) -21.81%
Janitorial 459,940 126,853 27.58% 333,087 109,710 17,143 15.63%
Outside Lab Services 239,400 40,609 16.96% 198,791 48,159 (7,550) -15.68%
Oxygen Plant Oper 719.000 157,520 21.91% 561,480 170.205 (12,685) -7.45%
County Service Fee 686,360 10,935 1.59% 675,425 8,690 2,245 25.83%
Temporary Sernces 418,990 70,781 16.89% 348,209 55,997 14,784 26.40%
Security Services 850,000 93,037 10.95% 756,963 62,709 30,328 48.36%
Other 1,581,180 108,208 6.84% 1,472,972 240,081 (131,873)
Subtotal 24,278,170 5,257,651 21.66% 19,020,519 5,300,881 (43,230)
(Continued)
Section 2-Page 6
Operating Budget Review
Summary of Expenses by Line Item
For the Three Months Ended September 30,2014
Expense Percent Expense Increase Increases
Budget Through Budget Remaining Through (Decrease) (Decrease)
Description 20W5 9/30/14 Expensed Budget 9I30/13 $ %
Continued:
Professional Services
Legal 844,400 111,837 13.24% 732,563 173,000 (61.163) -35.35%
Audit&Accounting 224,650 67,712 30.14% lm,938 75,830 (8,118) -10.71%
Engineering 635,000 30,478 4.80% 604,522 90,714 (60,236) -66.40%
Erwin,Saentific Consulting 67,500 5,569 8.25% 61,931 11,725 (6,156) -52.50%
Soffware Prgm Consulting 420,000 79,462 18.92% 340,538 59,663 19,799 33.18%
Advocacy Efforts 187,000 44,743 23.93% 142,257 21,000 23,743 113.06%
Industrial Hygiene Services 50,000 380 0.76% 49,620 6,845 (6,465) -94.45%
Labor Negotiation Services 119,080 7,348 6.17% 111,732 30,000 (22,652) -75.51%
Other 721,740 106,543 14.76% 615,197 45,908 60,635 132.08%
Subtotal 3,269,370 454072 13.89% 2,815,298 514,685 (60,613) -11.78%
Research&Monitoring
Environmental Monitoring 340,000 51,687 15.17% 288,413 100,610 (49,023) 48.73%
Air Quality Monitoring 85,000 47,397 55.76% 37,603 765 46,632 6095.69%
Research 405,000 100,000 24.69% 305,000 1001000 0.00%
Subtotal 830,000 198,984 23.97% 631,016 201,375 (2,391) -1.19%
Repairs&Maintenance
Materials&Services 11,111.070 2,545,484 22.91% 8,565,586 1,534,949 110101535 65.84%
Svc.Mb, Agreements 1,952,140 709,123 36.33% 1,243,017 360,040 349,063 96.96%
Subtotal 13,063,210 3,25 ,607 24.91% 9,808,603 1,894,989 1,359,618 71]5%
Utilities
Telephone 320,000 67,043 20.95% 252,957 62,145 4,898 7.88%
Diesel For Generators 23,230 10,766 46.35% 12,464 7,340 3,426 46.68%
Natural Gas 400,500 193,725 48.37% 208,n5 117,647 76,078 64.67%
Power 61003.200 11959,100 32.63% 4,044,100 1,712,408 246,692 14.41%
Water 690,840 151,141 21.88% 539,699 253,532 (102,391) 40.39%
Subtotal 7,437,770 2,381,775 37202% 5,055,995 2,153,072 228,703 10.62%
Other Operating Supplies
Outside Equip Rental 7,330 26,290 358.66% (18,960) 127 26,163 20600.79%
Insurance Premiums 32,000 31,884 99.64% 116 31,862 22 0.07%
Prop&Gen Liab Insurance 500,000 125,001 25.00% 374,999 227,250 (102,249) -0 .99%
Freight 0,120 17,286 28.75% 42,834 12,17] 51109 41.96%
Misc.Operating Expense 254,290 30,657 12.06% 223,633 35,663 (5,006) -14.04%
Regulatory Operating Fees 688,000 66,063 9.60% 621,937 77,692 (11,629) -14.97%
Subtotal 1,541,740 297,181 19.28% 1,244,559 384,771 (87,590) -22.76%
General Mgr Contingency
&Reappropriations 885,000 0.00% 885,000 N/A
Other Non-Oper Expense
Others 67,140 15,277 22.75% 51,863 15,149 128 0.84%
Subtotal 67,140 15,2T/ 22.75% 5103 15,149 128 0.84%
Total Materials,
Supplies&Services 70,072,020 16,557,378 23.63% 53,514,642 14,721,961 1,835,417 12.47%
Total Expenditures 169,24 ,820 39,304,224 23.22% 129,936,596 36,926,466 2,3T/,758 6.44%
Cost Allocation (16,]40,]00) (3,730,868) 22.29% (13,009,832) (3,220,325) (510,543) 15.85%
Net Operating Requirements $ 152,500,120 $ 35,573,356 23.33% $ 116,926.764 $ 33,706,141 $ 1,867.215 5.54%
Section 2-Page 7
2014-15 First Quarter Report
Summary of Collection, Treatment, &Disposal Expenses by Process
For the Three Months Ended September 30,2014
Increase Increase
Actual Actual (Decrease) (Decrease)
9/30/14 9/30/13 $ %
Process:
Preliminary Treatment $ 2,080,602 $ 2,053,127 $ 27,475 1.34%
Primary Treatment 3,262,877 2,970,292 292,585 9.85%
Secondary Treatment 1,842,014 1,763,375 78,639 4.46%
Cryogenic Plant(Plant 2) 292,779 351,174 (58,395) -16.63%
Ef0uent Disposal 168,348 196,013 (27,665) -14.11%
Solids Handling 12,323,336 11,385.708 937,628 8,24%
Cogeneration 3,894,820 4,136,242 (241,422) -5.84%
Utilities 765,130 701,440 63,690 9,08%
Electrical Distribution 508,104 602,977 (94,873) -15.73%
Miscellaneous Buildings 1,882,638 1,527,427 355,211 23.26%
External Location 796 230 566 245.95%
Nedssa Vessel 38,817 395 38,422 9727.06%
North County Yard 14 14 - 0.00%
Laboratory 3,056,909 2,885,150 171,759 5.95%
Collections 5,456,171 5,132,577 323,594 6.30%
Net Operating Requirements $ 36,573,356 $ 33,706,141 $ 1,867,215 5.54%
Section 2-Page 8
Operating Budget Review
Staffing Trends
Full Time Equivalents
September 30,2014
700
650 641 637 628 626 626
600 6 43
550
500
450
6/30111 6/30/12 6/30113 6/30/14 9/30/14
DAdual DVawnt
At September 30, 2014, the total head count was 592 employees, or a full time equivalency of 583.
Section 2-Page 9
2014-15 First Quarter Report
This Page Intentionally Left Blank
Section 2- Page 10
CIP Budget Review
Capital Improvement Program
By Type and Funding Source
For the Three Months Ended September 30,2014
@Collections Facllittea: 29.1%
@Headwwks: 0a%
@Primary Treatment 0.0%
3Secandary Treatment 1.2%
@Solids Handling&nlgeston: 46.1%
OOcean outlall S,mrna: o T%
131l410ty Systems: 131%
@Process Related Special Pmjeds 0.6%
@Infamlaton Management Systems: 3.2%
@Strategic 8 Master Planning: 0.1%
@Water Management Projects: 0.0%
@Suppod Fadlites: 45%
@ Pdor Year Treatment Projecta: 0.1%
@Capital Equipment Purchases: 0.7%
Total Capital Improvement Outlays -$21,847,000
Replacement/Rehabilitation: 52%
Improved Treatment: 33%
❑Additional Capacity: 12%
■Support: 3%
Total Capital Improvement Outlays -$21,847,000
Section 3- Page 1
FY 2014-15 First Quarter Report
Summary of Capital Improvement Construction Requirements-Current Year
For the Three Months Ended September 30,2014
2014-15 2014-15 2014-15
Cartons. Actual at Projected
Budget 9/30/2014 Outlay
Collection System Improvement Projects
Collections Facilities
Santa Ana Trunk Sewer Rehab. $ 3,359,755 $ 32,651 $ 3,365,000
SARI Realignment 405,332 58,352 594,600
SARI Rock Stabilizers Removal 211,746 2,222 123,800
Newhope-Placentia Trunk Grade Separation Replacement 3,396,918 28,132 3,203,200
Newhope-Placentia Trunk Replacement 38S,216 96,812 6,044,700
Lakeview Grade Separation Project 283,853 218 274,100
Tustin Rose DICTA Gratle Separation Project 452,914 30,411 336,800
Orangethorpe DICTA Gratle Separation Project 719,552 - 3,007,600
Rehabilitation of Magnolia Trunk Sewer - 17 100
Seal Beach Pumping Station Rehabilitation 663,829 11,944 588,5m
Rehabilitation of Balboa Trunk Sewer 2,551,550 41,798 148,100
Bitter Point Force Main Rehabilitation 410,517 73,092 276,100
Newport Force Main Rehabilitation 20,079,397 4,045,652 18,321,200
Dover Drive Trunk Sewer Relief 4,639,536 1,483,245 2,150,500
District 6 Trunk Sewer Relief 720,854 54,892 376,800
Southwest Costa Mesa Trunk 436,125 91,737 557,300
Gisler-Redhill Trunk Improvements,Reach B 216,393 114,448 633,400
Master Facilities Engineering Projects-Collections 864,029 103,993 341,200
Bay Bridge Pump Station and Force Mains Rehabilitation Study 381,646 24 157,900
Collection System Master Planning 1,000,000 19,950 720,000
Additional Charges to CIP Closed at 6130114 (7.617) (7700)
Subtotal-Collections Facilities 41,179,222 6,283,973 41,213,200
Revenue Area 14
Sifter Point Force Main Rehabilitation(1.65h) 6.888 1,226 4700
Newport Force Maln Rehabilitation(1.88%) 384.726 77,516 351.100
Subtotal-Revenue Area 14 391,614 78,742 355,800
Total Collection System Improvement Projects 41,570,836 6,362,715 41,569,000
(Continued)
Section 3-Page 2
CIP Budget Review
Summary of Capital Improvement Construction Requirements-Current Year
For the Three Months Ended September 30,2014
2014-15 2014-15 2014-15
Cashflow Actual at Projected
Budget 9/30/2014 Outlay
Treatment&Disposal Protects
Headworks
Headwoiks Rehabilitation and Expansion at Plant 1 429,107 79,443 346,000
Truck Line Odor Control Improvements Pi 669,312 43,063 658,800
Headworks Improvements at Plant 2 15,261 36.100
Subtotal-Headworks 1,N8,419 137767 1,040,900
Primary Treatment
Joint GWRS Microtiltration Backwash Redirection Project 5,219 2,407 11,100
Plant 1 Primary Treatment Upgrades 3,427,951 (29,690) 3.364,300
Primary Treatment Area Rehabilitation Study 578,376 129,500
Subtotal-Primary Treatment 4,011.548 (27,283) 3.504.900
Secondary Treatment
New Secondary Treatment System at Plant No.1 139,159 232,254 687,000
Oxygen Plant Demolition at Plant No,2 1,829,561 21,122 1,455,500
Plant No.1 Secondary Treatment Asset Management Plan W5,015 - -
Plant No.2 Secondary Oxygen Plant Asset Management Plan 93,567
Subtotal-Secondary Treatment 2,427,302 253.381 2,142,500
Solids Handling&Digestion
Digester Rehabilitation at Plant 1 5,443,017 1,055,035 4,850,400
Sludge Dewatering and Odor Control at Plant 1 61,050,918 6,362,488 56,583,200
Digester Ferric Chloride System Rehabilitation 320,044 177,581 309,600
Solids Thickening and Processing Upgrades 6,315,445 1,988,665 5,519,000
Sludge Dawslering and Odor Control at Plant 2 1,402,322 477,484 2,514,000
Plant 2 DigesterslBoilers Plant Asset Management Plan 355,943 4,004 10019M
Subtotal-Solids Handling&Digestion 74.887,689 10,065,263 69,871,100
Ocean Oudall Systems
Final Effluent Sampler and Building Area Upgrades 488,290 82,925 51
Ouffall Land Section and OOBS Piping Rehabilitation 52,879 1,261 9,400
Ocean Ouffall System Rehabilitation 713,223 67,N9 458700
Subtotal-Ocean Outfall Systems 1,254,392 151,255 1,062,000
UOlity Systems
Cengan Cooling Water System Replacement 284,249 11,106 18,600
Cengen Emissions Control Project 6,988,246 1,20il 7,M,400
Power Monitoring and Control Systems 286,319 128,696 320,200
Plant Water System Rehabilitation at Plant No.1 2,501,914 701,34S 2,578,300
Plant Water System Rehabilitation at Plant No.2 2,323,394 877,656 2,652,000
Boiler System Rehab&Scmbbers H&I Demolition at Plant 2 1,744766 42,058 1,751,100
Consolidated Demolition&Utility Improvements at Plant 2 227,821 42,082 480,400
Digester Gas Facilities Study for Plants 1 &2 314,397 6g287 269,900
Utility Water Systems Study 800,000 - 142,400
Plant Air System Master Plan 147,626 - 148,900
Electrical System Base Map 250,000
Subtotal-Utility Systems 15.868,732 2,872,763 15,410,200
(Continued)
Section 3-Page 3
FY 2014-15 First Quarter Report
Summary of Capital Improvement Construction Requirements-Current Year
For the Three Months Ended September 30,2014
2014-15 2014-15 2014-15
Cashfi. Actual at Projili
Budget 9/30/2014 Outlay
Process Related Special Projects
Fall Protection Improvements at Plants Nos.I and 50,436 726 800
Corrosion Management 2,000,766 115,522 1,649,200
Odor Control Master Plan 741,412 19,242 159.800
Subtotal-Process Related Special Projects 2,792,614 135,490 11809,800
Information Management Systems
Programmable Control Panel Upgrades 1,689,364 175,519 1,482,900
Strategic Information Architecture(SIA) 750,222 114,044 344,100
InterneVlntranet Development 173,372 - 70,000
Geographic In eri ration System 365,026 75,763 195,800
Information Technology Equipment Upgrade 600,856 270,746 460,800
EAM Software and Process Implementation 833,913 40,096 1,000,100
PD82D Software Replacement 126,655 - -
BoftwarsandComputerEquipmentReplacementProlect 746,895 31,218 631,300
Information Technology Master Plan 232,042
Subtotal-InformaSon Management Sya/ame 5,518,345 707,386 4,185,000
Strategic&Master Planning
Facilities-Wide Safety Assessment 241,481 7,156 21,700
Landscape&Security Master Plan 111.423 - -
Stomwater Mager Plan 38,018 - 3,300
Treatment Plant Hydraulic Assessment 168,726 18,880 18,9m
Asset Management Program 54,641 47.300
Subtotal-Strategic a Master Planning 614.289 26,036 91,200
Water Management Projects
Effluent Reuse Study 575,919
Subtotal-Water Management Projects 575.919
Support Facilities
Master Facilities Engineering Projects-Plant 3,T11,179 548,104 2,416,200
Master Small Capital ReplacemenVRehabilbation-Plant 4.220,002 106,355 3,314,900
Operators Center Entrance/Building Repairs 35,247 - -
Title 24 Access Compliance and Building Rehabilitation Project 4,846,207 134,115 4,644,000
South Perimeter Security&Storm Water Improvements at P1 40,938 13,896 66,4W
Site and Security Improvements at Plant Nei 264.806 21,497 136,400
Public Address System Study 100,000 - icom
Tunnels Systems Asset Management Plan 118,842 -Plant No.2 Administradve Building Master Plan 192,545 - -
Administrative Facilities Implementation Planning 662,962 27,967 729,700
Ongoing Small Capital ReplacemenVRehabilitation 1,183,658 121.327 715700
Subtotal-Support Facilities 15,436,386 979,321 12,033,300
(Continued)
Section 3-Page 4
CIP Budget Review
Summary of Capital Improvement Construction Requirements-Current Year
For the Three Months Ended September 30,2014
2014-15 2014-15 2014-15
Cashflow Actual at Projected
Budget 9/30/2014 Outlay
Other.
Future Research Line Item 1,000,381 3,541 180,600
Capital Improvement Program Mgmt.Services 99,999 66.200
Subtotal-Others 1,100,380 3.541 246.800
Additional Charges to CUP Completed at 6/30114 20.958 21.000
Total Treatment and Disposal Projects 125.586.013 15,325,878 111,414,700
Capital Equipment Purchases 2,078,600 158,b07 2,078,600
Total Colledion,Treatment and Disposal Projects
and Capital Equipment Purchases $169,235,449 $ 21,84],000 $ 155,062,300
Section 3-Page 5
FY 2014-15 First Quarter Report
Summary of Capital Improvement Construction Requirements- Project Life
For the Three Months Ended September 30,2014
Current Total
Approved June 30,2014 Year Projected Remaining
Project Accumulated Projected Coat at Future
Budget Cost Cost June 30,2015 Budget
Collection System Improvement Pro ects
Collections Facilities
Santa Ana Trunk Sewer Rehab. 7,676,000 3,154,323 3,365,000 6,519,323 1.156,677
Raid and Bristol Street Sewer Extension 10722,000 259,075 - 259,075 10.462,925
SARI Realignment 11,414,000 5,325711 594.600 5,920,311 5.483,689
SARI Rock Stabilizers Removal 3,092,000 26,666 123.800 154466 2.91
Taft Branch Improvements 3,143,000 12,083 - 12,083 3.130,917
Newhope-Placentia Trunk Grade Separation Replacement 5,966,000 559,207 3,203.200 3,762,407 2.203,593
Newhope-Placentia Trunk Replacement 104,890,000 51,792 6,044700 6,096,492 98793,508
Yoffie Linda Pumping Station Abandonment 4,694,000 - - - 4,694,000
Coyote Hills Golf Course Odor Control Station 8,365,000 - - - 8.365,000
Lakeview Grade Separation Project 330,000 4,142 274.100 278,242 51,758
Tustin Rose OCTA Grade Separation Project 586,000 36,228 336.800 373,028 212,972
Orangethorpe OCTA Grade Separation Project 31900,000 1(1 3,007,600 3,107.628 292,372
Rehabilitation of Magnolia Trunk Sewer 19,812,000 19,647,646 100 19,647.746 164,254
Miller-Holder Trunk Sewer Relief 17.324,000 - - - 17,324,000
Beach Trunk/Knott Interceptor Sewer Relief 27.599,000 - - - 27,599,000
Seal Beach Pumping Station Rehabilitation 62,041,000 - 588.500 5881500 61,452,500
Rehabilitation of Western Regional Sewers 112.222,000 - - - 112,222,000
Rehabilitation of Balboa Trunk Sewer 8,122,000 6,740,612 148,100 6,888,712 1,233,288
Biker Point Force Main Rehabilitation 44.866,287 30,783,269 276,100 31,059,369 13,806,918
Newport Force Main Rehabilitation 51,234,339 6,272,065 18,321,200 24,593,265 26.641,074
Dover Drive Trunk Sewer Relief 14,327,000 10,557.800 2,150,500 12,708,300 1.618,700
Crystal Cove Pumping Station Upgrade and Rehabilitation 7,817,000 - - - 7.817,000
Bay Bridge Pumping Station Rehabilitation 74,431,000 - - - 74.431,000
District 6 Trunk Sewer Relief 7,047,000 671,372 376.800 1,048,172 5.998,828
Southwest Costa Mesa Trunk 14,993,000 1,391.745 557,300 1,949.045 13.043,955
Gisler-Redhill Trunk Improvements,Reach 9 23,073,000 3,376.438 633,400 4,008.836 19.063,162
Browning Subtrunk Sewer Relief 13,439,000 - - - 13.439,000
Von Karman Trunk Sewer Relief 433,000 - - - 433,000
MacArthur Pump Station Rehabilitation 7,445,000 - - - 7.445,000
Main Street Pump Station Rehabilitation 40747,000 - - - 40747,000
Edinger/Balsa Chlca Trunk Improvements 6.030,000 - - - 6.030,000
Edinger Pumping Station Upgrade and Rehabilitation 13.629,000 - - - 13.629,000
Slater Avenue Pump Station Rehabilitation 13781,000 - - - 13781,000
Master Facilities Engineering ProlecLs-Collections 12,192,000 273,440 341,200 614,640 11,577,360
Bay Bridge Pump Station and Force Mains Rehabilitation Study 522,838 - 157,900 151,900 364,938
Collection System Master Planning 1.000,000 - 720.000 720,000 280,000
Collection System Odor Control Systems Study 700,000 - - - 700,000
Additional Charges to CIP Closed at 6130114 (7700) (7,700) 7,700
Subtotal-Collections Facilities 759,595,464 89,243,642 41,213,200 130,456,842 629,138,622
Revenue Area 14:
Bitter Point Force Main Rehabilitation(1.65%) 752,714 516,445 4,700 521,145 231,568
Newport Force Main Rehabilitation(1.88%) 981,661 120,174 351,100 471,274 510,387
Subtotal-Revenue Area 14 1,234,374 636,619 355,800 992419 741,955
Total Collection System Improvement Projects 761,329,838 89,880,261 41,569,000 131,449,261 629,880,577
(Continued)
Section 3-Page 6
CIP Budget Review
Summary of Capital Improvement Construction Requirements - Project Life
For the Three Months Ended September 30,2014
Current Total
Approved June 30,2014 Year Projected Remaining
Project Accumulated Projected Cost at Future
Budget Cost Cost June 30,2015 Budget
Treatment&Disposal Projects
Headworks
Headworks Rehabilitation and Expansion at Plant 1 76,476,000 23,493 346,000 369,493 76,106,507
Headworks Expansion P1 222,804,000 - - - 222,804,000
Truck Line Odor Control Improvements P1 10,826,000 917.437 658,800 1,576,237 9,249,763
Heatlworks Improvements at Plant 2 258.724,000 258,135,521 36,100 258,171,621 552,379
Subtotal-Heatlworks 568,830,000 259,076,451 1,040,900 20,117,351 308,712,649
Primary Treatment
Joint GWRS Microfiltration Backwash Redirection Project 387,000 359,168 11,100 370,268 16,732
Primary Scrobbm Rehabi@ation at Plant 1 50,708,000 - - - 50,708,000
Primary Effluent Pipeline Joint Repairs 3,246,000 - - - 3,246,000
Plant l Primary Treatment Upgrades 11,535,000 1,048737 3,364,300 4,413,037 7,121,963
Plant 2 Primary Treatment System Rehabilitation 43,210,000 - - - 43,210,000
Primary Treatment Area Rehabilitation Study 848,000 157.161 129,500 286.661 561,339
Subtotal-Primary Treatment 109.934.000 1.565.066 3.504.900 5,069,966 104.864.034
Secondary Treatment
New Secondary Treatment System at Plant No.1 255,P1,000 254,397,212 687,000 255,084,212 686,788
Oxygen Plant Demolition at Plant No.2 4,051,000 539,982 1,455,600 1,995,482 2,065,518
Plant No.l Secondary Treatment Asset Management Plan 400,000 - - - 401
Plant No.2 Secondary Oxygen Plant Asset Management Plan 400,000 400,000
Subtotal-Secondary Treatment 260.622.000 254.931.194 2,142,500 257.0]9.694 3.542.306
Solids Handling&Digestion
Digester Rehabilitated at Plant l 60,547,000 45,702,099 4,850,400 50,552,499 9,994,501
Sludge Dewatedng and Odor Control at Plant l 171,978,000 48,624,141 56.583,200 105,201 66,770,659
Digester Ferric Chloride System Rehabilitation 4,449,000 4,069,536 309,600 4,379,136 69,864
Plant No.2 Solids Storage Addition 37,604,000 - - - 37,601
Solids Thickening and Processing Upgrades 48,346,000 32,517,589 5,519,000 38,036,589 10,309,411
Plant No.2 Digester Facilities Rehabilitation 47,600,000 152.343 - 152.343 47,667,657
Sludge Dewatering and Odor Control at Plant 2 87,000,000 8,899,067 2,514,000 11413,067 75,586,933
Plant 2 Digestersfaoilers Plant Asset Management Plan 800,000 46,456 100,900 147,356 652.644
Subtotal-Solids Handling&Digestion 458,324,000 140,011,231 69,877,100 209.888,331 248,43S669
Ocean Outfall Systems
Final Effluent Sampler and Building Area Upgrades 14,770,000 2,540,592 583,900 3,124,492 11,645508
Call Land Section and OOSS Piping Rehabilitation 20,466,000 19,653,161 9,400 19,662,561 803,439
fire-Inch Interplant Effluent Pipeline Rehabilitation 72.517,000 - - - 72,517,000
Ocean Oudall System Rehabilitation 48.194.000 37.154 458,700 495.854 47,698,146
Subtotal-Ocean Outfall Systems 155,947,000 22,230,907 1,052,000 23,282,907 132,664,093
bell Systems
Cengen Cooling Water System Replacement 11,337,000 11,215,149 18,600 11,233,749 103,251
Cengen Emissions Control Project 24,950,000 3730,169 7.048,400 10.778,569 14,171,431
UPS System Upgrades 3,817,000 - - - 3,817,000
Digester Gas Facilities Rehabilitation 58,755,000 - - - 58,765,000
Electrical Power Distribution System Improvements 12,791,000 - - - 12,791,000
Power Monitoring and Control Systems 10,918,000 10,246,090 320,200 10,586,290 351,710
Plant Water System Rehabilitation at Plant No.1 8,000,000 3,763,229 2,578,300 6,341,529 1,658,471
(Continued)
Section 3-Page 7
FY 2014-15 First Quarter Report
Summary of Capital Improvement Construction Requirements- Project Life
For the Three Months Ended September 30,2014
Current Total
Approved June 30,2014 Year Projected Remaining
Project Accumulated Projected Costal Future
Budget Cost Cost June 30,2015 Budget
Utility Systems
Plant Water System Rehabilitation at Plant No.2 5,070,000 1,537,043 2,652.000 4,189,043 880,957
Boiler System Rehab&Scrubbers H&I Demolition at Plant 2 3,095,000 1,023,404 1,751.100 2,774,504 320,496
Consolidated Demolition&Utility Improvements at Plant 43,974,000 136,595 48(1 616,995 43,357,005
SCE Feed Reliability Improvements 22,490,000 - - - 22,490,000
Secondary Area Cable Tray Upgrades 2,154000 - - - 2,154,000
Headworks Cable Tray Upgrades 3,015,000 - - - 3,015,000
Digester Gas Facilities Study for Plants 1&2 750,000 420,565 269,900 690,465 59,535
Utility Water Systems Study 800,000 - 142,400 142,400 657,600
Plant Air System Master Plan 340,000 - 148,900 148,900 191,100
Electrical System Base Map 250,000 - - - 250,000
Sldestream Pumping System and Water Chamctedzation Study 250,000 250,000
Subtotal-Utility Systems 212,756,000 32,072,244 15,410,200 47,482,444 165,213,556
Process Related Special Projects
Fall Prompted Improvements at Plants Nos.1 and 2 2,687,000 2,597,617 800 2,598,477 88,523
Corrosion Management 28,500,000 8,979,211 1,649,200 10,628.411 17,871,589
Odor Control Master Plan 1,600.000 772.885 159,800 932.685 667,315
Subtotal-Process Rdatad Spacial Projects 32.787,000 12,349,773 1,809,800 14,159.573 18.627,427
Information Management Systems
Process SCADA Rsplaoement 24,680,000 - - - 24,680,000
Programmable Control Panel Upgrades 3,477,000 12,393 1,482,900 1,495,293 1,981,707
SCADA System and Network Upgrades 27,839,000 - - - 27,839,000
Strategic Information Architecture(SIA) 1,995,000 1,158,338 34s,100 1,502,438 492,562
Inlernetlintranst Development 650,000 42,062 70,000 112,062 537,938
Geographic Information System 4,047000 1,387p91 195,800 1,583,291 2,463,709
Information Technology Equipment Upgrade 4,148,000 2,862,842 464800 3,323,642 824,358
EAM Software and Process Implementation 6,500,000 3785,651 1,00(1,100 4,785,751 1,714,249
PDS2D Software Replacement 525,000 284,988 - 284,988 240,012
Software and Computer Equipment Replacement Project 5,050,000 1,294717 631,300 1,922,017 3,127983
Process SCADA Link to Pump Stations 271,000 19,083 - 19,083 251,917
Information Technology Master Plan 500,000 500,000
Subtotal-Information Management Systems 79,682,000 10,843,565 4,185,000 15,028,565 64,653,435
Strategic&Master Planning
Facilities-Wide Safety Assessment 930,000 843,928 21,700 865,628 64,372
Landscape&Severity Master Plan 150,000 - - - 150,000
Climate Change Impact Study 100,000 - - - 100,000
Stormwater Master Plan 300,000 - 3,300 3,300 296,700
Treatment Plant Hydraulic Assessment 300,000 - 18,900 18,900 281,100
Settlement&Liquefaction Study 700,000 - - - 700,000
Asset Management Program 4,800,000 2,778,183 47,300 2,825,483 1,974,517
Subtotal-Strategic&Master Planning 7,280,000 3,622,111 91,200 3,713,311 3,566,689
Water Management Projects
Effluent Reuse Study 2,800,000 21800,000
Subtotal-Water Management Projects 2,800,000 - - - 2,800,000
(Confined)
Section 3-Page 8
CIP Budget Review
Summary of Capital Improvement Construction Requirements- Project Life
For the Three Months Ended September 30,2014
Current Total
Approved June 30,2014 Year Projected Remaining
Project Accumulated Projected Cost at Future
Budget Cost Cost June 30,2015 Budget
Support Facilities
Master Facilities Engineering Projects-Plant 35,228,000 21,111,389 2,416,200 23,527,589 11,700,411
Master Small Capital Replacement/Rehabilitation-Plant 18,295,000 - 3,314,900 3,314,900 14,980I00
Operations Center EnbrancelBullding Repairs 2,648,000 526,383 - 526,383 2,121.617
Title 24 Access Compliance and Building Rehabilitation Project 17,437,000 3,459,355 4,644,000 8,103,355 9,333,645
South Perimeter Security B Storm Water Improvements at PI 3,005,000 - 66,400 66,400 2,938,600
Site and Security Improvements at Plant No.2 1,455,000 199,349 136.400 335,749 1,119,251
Public Address System Study 10g000 - 10.000 10,000 90,000
Tunnels Systems Asset Management Plan 20g000 - - - 200,000
Plant No.2 Administrative Building Master Plan 3W,000 - - - 300,000
Administrative Facilities Implementation Planning 80 ,000 31,927 729,700 761,627 38,373
Ongoing Small Capital Replacement/Rehabilitation 22,088,000 16,758,367 715,700 17,474,067 4,613,933
Subtotal-Support Facilities 1011556,000 42,086,770 12,033,300 54,120,070 47,435,930
Others
Future Research Line Item 10,440,000 1,527,795 180,600 1,708,395 8,731.605
Capital Improvement Program Mgmt.Services 300.000 66,200 66,200 233.800
Subtotal-Others 10,74g000 1,527,795 246.800 1,T74,595 8,965,405
Additional Charges to CIP Completed at 6l30114 21,000 21,000 (21.000)
Total Treatment and Disposal Projects 2.001.258.000 780,323,107 111,414,700 891,737,807 1,109,520,193
Capital Equipment Purchases 16,004000 4,171,413 2,078,600 6,250,013 9,749,987
Total Collection,Treatment and Disposal Projects
and Capital Equipment Purchases $ 2,778,587,838 $874,374,781 $155,062,300 $1,029,437,081 $1,749,150,757
Section 3-Page 9
FY 2014-15 First Quarter Report
This Page Intentionally Left Blank
Section 3- Page 10
Capital Assets Schedule & Debt Service Budget Review
Capital Assets Schedule
For the Three Months Ended September 30,2014
Capital Facilities Budget Review
Balance Yearto-Date Balance
07/01/14 Additions 09/30/14
CONSTRUCTION IN PROGRESS:
Treatment Plant $ 218,812,539 $ 15,484,286 $ 234,296,825
Collection System 39,206,400 6,362,714 45,569,114
Subtotal 258,018,939 21,847,000 279,865,939
PROPERTY,PLANT&EQUIPMENT(at cost):
Land and Property Rights 15,959,559 - 15,959,559
Collection Lines and Pump Stations 753,136,534 - 753,136,534
Treatment Facilities 2,220,814,179 - 2,220,814,179
Effluent disposal facilities 97,014,820 - 97,014,820
Solids disposal facilities 3,463,236 - 3,463,236
General and administrative facilities 224,717,092 - 224,717,092
Excess purchase price over book value on acquired assets 19,979,000 19,979,000
Subtotal 3,335,084,420 3,335,084,420
Total Property,Plant&Equipment&CIP $ 3,593,103,359 $ 21,847,000 $ 3,614,950,359
Debt Service Budget Review
2014-15 Year-to-Date Remaining
Budget Payments %of Budget Budget
Principal Payments by Debt Issue:
2007A COP 245,000 - 0.00% 245.000
2007E COP 6,450,000 - 0.00% 6,450.000
2008E COP 8,270,000 8,270,000 100.00% -
2009ACOP 3,865,000 - 0.00% 3,855.000
2010A BAB. - - N/A -
2010C BASs - - N/A -
2011ACOP 9,065,000 9,055,000 100.00% -
2012ACOP - - N/A -
20128 COP - - N/A -
2013ACAN. 129,625,000 - 0.00% 129,625,000
2014A COP N/A
Subtotal Principal Payments 157,500,000 17,325,000 11.00% 140,175,000
Interest Expense by Debt Issue:
2007A COP 4,124,194 1,032,039 25.02% 3,092,155
2007E COP 13,162,962 3,324,269 25.25% 9,838,693
2008E COP 630,980 186.680 29.59% 444,300
2009A COP 8,999,175 2,249,788 25.00% 6,749,387
2010A BAB. 2,897,639 993.789 34.30% 1,903,850
2010C BASs 6,523,780 2,237,551 34.30% 4,286,229
2011ACOP 5,825,450 1,501,675 25.78% 4,323,775
2012A COP 3,735,900 934.050 25.00% 2,801,850
2012E COP 3,187,400 796.800 25.00% 2,390,600
2013A CANS 2,592,500 653.500 25.21% 1,939,000
2014A COP 802.857 N/A (802,857)
Subtotal Interest Expense 51,679,980 14,712,998 28.47% 36,966,982
Total Debt Service $ 209,179,980 $ 32,037,998 15.32% $ 177,141,982
Section 4-Page 1
2014-15 First Quarter Report
This Page Intentionally Left Blank
Section 4- Page 2
Self Insurance Budget Review
General Liability and Property Fund Budget Review
For the Three Months Ended September 30,2014
Percent
Actual of Budget Remaining Actual
2014-15 Through Through 2014-15 Through Increase
Budget 9/30/14 9130114 Budget 9/30/13 (Decrease)
Revenues:
In-Lieu Premiums $ 500,000 $ 125,001 25.00% $ 374,999 $ 227,250 $ (102,249)
Miscellaneous Other Revenue - - N/A - 129,808 (129,808)
Service Department Allocations 24,100 1,374 5.70% 22,726 4,374 (3,000)
Total Revenues 524,100 126,375 24.11% 397,725 361,432 (235,057)
Expenses:
Benefits/Claims 120,000 - 0.00% 120,000 45,000 (45,000)
Contractual Services 1,200 - 0.00% 1,200 - -
Legal Services 75,000 3,451 4.60% 71,549 (16) 3,467
Professional Services 51000 0.00% 5,000
Subtotal 201,200 3,451 1.72% 197,749 44,984 (41,533)
Policy Premium Expense 1,300,000 275,468 21.19% 1,024,532 272,348 3,120
Total Expenses 1,501,200 278,919 18.58% 1,222,281 317,332 (38,413)
Excess Revenue(Expense) (977,100) (152,544) $ (824,556) 44,100 (196,644)
Beginning Reserves 56B74,500 56,802,224 56,904,863 (102,639)
Ending Reserves $55, 997,400 $ 56, 449,680 $ 56, 448,963 $ (299,283)
Section 5-Page 1
FY 2014-15 First Quarter Report
Workers'Compensation Fund Budget Review
For the Three Months Ended September 30,2014
Percent
Actual of Budget Remaining Actual
2014-15 Through Through 2014-15 Through Increase
Budget 9/30/14 9/30/14 Budget 9130113 (Decrease)
Revenues:
In-Lieu Premiums $ 755,000 $ 188,750 25,00% $ 566,250 $ 113,750 $ 75,000
Miscellaneous Other Revenue - - N/A - - -
Service Department Allocations - - N/A - - -
Total Revenues 755,000 186,750 25.00% 566,250 113,750 75,000
Expenses:
Benefits/Claims 400,000 141,499 35.37% 258,501 104,182 37,317
Contractual Services - - N/A - - -
Legal Services 100,000 26,848 26.85% 73,152 19,689 7,159
Professional Services 50,000 N/A 50,000 13,267 (13,267)
Subtotal 550,000 168,347 30.61% 381,653 137,138 31,209
Policy Premium Expense 150,000 55,632 37.09% 94,368 49,467 6,165
Total Expenses 700,000 223,979 32.00% 476,021 186,605 37,374
Excess Revenue(Expense) 55,000 (35,229) $ 90,229 (72,855) 37,626
Beginning Reserves 1,940,900 1,771,820 2,238,580 (466,760)
Ending Reserves $ 1,995,900 $ 1,736,591 $ 2,165,725 $ (429,134)
Section 5-Page 2
a
C�p
October 30, 2014
STAFF REPORT
Quarterly Treasurer's Report
For the Three Months Ended September 30, 2014
SUMMARY
Section 15.0 of the District's Investment Policy includes quarterly reporting requirements
for the District's two investment portfolios. These two funds, the "Liquid Operating
Monies," and the "Long-Term Operating Monies" are managed by PIMCO, the District's
external money manager.
The ongoing monitoring of the District's investment program by staff and Callan
Associates, the District's independent investment advisor, indicates that the District's
investments are in compliance with the District's adopted Investment Policy and the
California Government Code, and that overall performance has tracked with benchmark
indices. In addition, sufficient liquidity and anticipated revenues are available for the
District to meet budgeted expenditures for the next six months. The District's portfolios
do not include any reverse repurchase agreements or derivative securities.
ADDITIONAL INFORMATION
Performance Reports
The Quarterly Strategy Review, prepared by PIMCO, and the Investment Measurement
Service Quarterly Review, prepared by Callan Associates, are attached for reference.
Also attached are Long-Term and Liquid Operating Monies Summary of Performance
Data and Portfolio Statistics charts that depict the performance results, estimated yield
and duration, credit quality, and sector diversification of the District's portfolios, as of
June 30, 2014 and September 30, 2014. The Liquid Operating Monies portfolio, with an
average maturity of 37 days, consists entirely of cash equivalent investments such as
U.S. Treasuries and corporate discount notes.
Portfolio Performance Summary
The following table presents a performance summary of the District's portfolios as
compared to their benchmarks for the period July 1 through September 30, 2014.
OOSD ♦ P.O.Box B127 ♦ Fountain Valley,LA 9272B-B127 ♦ (714)962-2411
Quarterly Treasurer's Report
For the Three Months Ended September 30, 2014
Page 2 of 3
Portfolio Performance Summary
Quarter Ended September 30,2014
Liquid Operating Monies %) Long-Tenn Operating Monies °
Total Rate Total Rate of
of Return Senohmarkn Return Benohmarkn
3 Months 0.03 0.01 -0.06 -0.07
6 Months 0.06 0.02 0.72 0.66
9 Months 0.07 0.03 1.43 1.11
12 Months 0.07 0.04 1.05 1.25
Since inception 30 Sept.95 2.98 2.64 4.86 4.64
Market Value 58.9M WIAM
Average Quality "AA+" "AA+-
Current Yield(%) 0.8 1.1
Estimated Yield to Maturity(%) 0.1 1.0
Quarterly Deposits(Withdrawals) 27.OM - 44.3M
Estimated Annual Income $0.4M $5.OM
(1) Benchmarks:
• Liquid Operating Portfolio: 3-Month Treasury Bill Index
• Long-Teml Operating Portfolio: Merrill Lynch Corp/Govt. 1-5 Year Bond Index
Portfolio Market Values
Comparative marked-to-market quarter-end portfolio values are shown in the following table, and in the
attached bar chart.
Liquid Long-Term
Quarter Operating Operating
Ending Monies($M) Monies($M)
31 Dec.13 75.9 460.9
31 Mar.14 50.9 439.2
30 Jun.14 85.9 5W1
30 Sep.14 58.9 461.6
District's Investment Account Balances as of September 30, 2014
Book Balances Estimated
Investment Accounts September 30,2014 Yield(%)
Slate of Calif.LAIF $ 16,841,566 0.25
Union Bank Checking Account 56,763 0.01
Union Bank Overnight Sweep Account 522,000 0.00
Union Bank W/C Checking 63,235 0.00
PIMCO-Short-term Portfolio 58,836,408 0.13
PIMCO-Long-term Portfolio 460,195,963 0.92
Petty Cash 3,000 N/A
BNY Mallon OCIP Reserve 3,606,509 0.37
TOTAL $540.12i444 0.80
Debt Service Reserves w/Tmstees A 43220 443 1.31
Quarterly Treasurer's Report
For the Three Months Ended September 30, 2014
Page 3 of 3
District's Cost of Funds on Debt Issues as of September 30,2014
Annual
Cost of Funds Outstanding Interest
Issue Description COP Balance Raw(%)
2007A Fixed $92,385,000 4.50
2007B Fixed 173,325,000 4.71
2008B Fixed 17,315,000 296
2009A Fixed 184,090,000 4.72
2010A Fixed 80,000,000 3.68
2010C Fixed 157,000,000 4.11
2011A Fixed 121,290,000 2.61
2012A Fixed 100,645,000 3.54
2012B Fixed 66,395,000 1.50
2013A Fixed 129,625,000 0.17
2014A Fixed 85,090,000 2.34
TOTAL $1.207.160.000
Weighted Avg.Cost of Funds 3.38
ATTACHMENTS
1. Historical Yield Curve Graph
2. PIMCO Quarterly Report
3. Quarter End Portfolio Market Value Bar Chart
4. Summary of Performance Data and Portfolio Statistics— Liquid Operating Monies
5. Summary of Performance Data and Portfolio Statistics — L-T Operating Monies
6. Investment Transactions and Balances in LAIF
7. Asset Summary by Asset Type— Liquid Operating Portfolio
8. Asset Summary by Asset Type— Long Term Portfolio
9. Asset Summary by Asset Type — Owner Controlled Insurance Program Escrow
Account
10. Investment Listing (Yield Analysis Report).
11. Asset Detail — Consolidated
12. Custody Transaction History -- Consolidated
13. Callan Quarterly Review
14. PIMCO Quarterly Review
15. Rating Agency Comparisons
Prepared by Finance, 10/30/2014, 1:56 PM
HISTORICAL YIELD CURVE
5.50
5.25
5.00
4.75
4.50
4.25
4.00
3.75
3.50
3.25
3.00
° 2.75
w 2.50
} 2.25
2.00
1.75
1.50
1.25
1.00
0.75
0.50
0.25
0.00
E 0
E N n a n n o 0 0
t+f t0 � N th
31-Mar-14 30Jun-14 30Sep14
G:\excel.dta\fin\2220\geggi\Finance\Historic ITREASURYyieldcuwe
P I M C O
650 Newport Center Drive
Newport Beach,CA 92660
Tel: 949.720.6000
Fax: 949.720.1376
October 29, 2014
Mr. Mike White,CPA
Controller
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley,CA 92708-7018
Dear Mike:
The following is a description of events in the bond markets during the third quarter of 2014 in addition
to an analysis of the strategies undertaken in the Orange County Sanitation District's Long-Term and
Liquid portfolios over the period. We have also included a section on strategies to be pursued in your
portfolios during the coming months.
Bond Market Recap
Far from the typical summer lull,the third quarter was marked by geopolitical tension and diverging
markets. Most developed market government yields were led lower by easy central bank policies,while
credit markets backed up. Equity markets somersaulted their way to modest gains in the U.S., but were
flat or slightly negative in many other regions as economic data varied. U.S.growth became more sure-
footed, but the eurozone recovery sputtered and growth decelerated in parts of Asia. In addition to
headline volatility around central bank actions and the Scottish independence referendum,geopolitical
tensions flared in Ukraine and the Middle East.
U.S.GDP growth was strong in the second quarter(4.6%),more than reversing the weather-induced
weakness from the first quarter.A large upswing in business conditions and still high capacity utilization
suggested companies will expand their investment in both capital and labor.Similarly,consumer
confidence rose to the highest level in more than six years. Given this improvement in the outlook for
growth,the Federal Reserve's(Fed) policy rate projections increased modestly and the U.S. dollar
surged more than 7.5%versus its major trading partners. Nevertheless,with inflation running well-
below target,the Fed continued to signal a dovish bias as it re-affirmed that the policy rate will be at
current levels for a "considerable time'after Quantitative Easing(QE)ends.
News and data from Europe were front and center last quarter.A referendum for Scottish independence
from Great Britain generated substantial interest from the public and markets, but concerns were laid to
rest by a 55%vote against independence.The eurozone's economic recovery went from anemic to
worrisome,as growth weakened (0%for the second quarter),German business confidence fell and
geopolitical tensions created uncertainty. Importantly, inflationary expectations continued to fall,
spurring European Central Bank President, Mario Draghi,to expand previous easing measures by cutting
rates and launching a securitized debt buying program.Core rates fell to all-time lows(below 1%for the
10-year German Bund)and peripheral spreads also tightened.With a lingering threat of deflation and
smaller than expected take-up of the first targeted longer-term refinancing operation tranche,
expectations for full-scale CIE continued to build.
Further east,growth concerns developed in Asia's largest economies, China and Japan.While recent
attempts by the Chinese government to stimulate the economy appeared to bear some fruit, markets
Mr. Mike White,CPA October 29, 2014
Orange County Sanitation District Page 2
grew concerned that the traditional policy tools were becoming less effective. In Japan,falling industrial
production and mixed survey data after April's tax hike indicated that the economy's underlying
strength may be lower than previously believed. Moreover,the slow progress on structural reform
added to concerns about Prime Minister Abe's willingness and capacity to implement less popular
growth-enhancing measures.
In the emerging markets(EM),a number of headlines and country-specific events drove markets.
Tensions over Ukraine pushed the U.S.and European Union to expand sanctions on Russia,where the
economy is likely headed toward a recession and may eventually reduce growth for neighboring Eastern
European countries. Brazil's upcoming presidential election grabbed market attention as support for
opposition candidate Marina Silva,who entered the race following the tragic death of Eduardo Campos,
became a credible threat to current president Dilma Rousseff.And lastly,Argentina defaulted on its debt
for the second time since 2001 as the nation was barred from paying interest by a New York judge.
Despite the inability of the government,the"hold-outs"and the U.S. courts to come to an agreement,
bonds were up at quarter end.
Bond Returns Were Mixed as Yields Declined but Spreads Widened
The following summarizes fixed income sector returns during the third quarter of 2014:
• U.S. Treasuries returned 0.34% for the quarter and 3.06% year to date (Barclays U.S. Treasury
Index). U.S. Treasuries rallied through mid-August as the market responded to heightened
geopolitical risk and still easy Fed policies. Rates oscillated for the rest of the quarter as stronger
economic data and expectations that the Fed might raise rates sooner were countered by the return
of geopolitical concerns later in the quarter. In the end,yields rose modestly at the front end of the
curve on Fed hike expectations (2-year yields rose 11 basis points), while long-term yields remained
anchored by low inflation expectations (10- and 30-year yields declined 4 and 16 basis points,
respectively). Finally,the Barclays U.S.Aggregate Index returned 0.17%during the third quarter.
• Agency mortgage-backed securities (MBS) returned 0.18% for the quarter and 4.26% year to date
(Barclays Agency Fixed-Rate MBS Index). Agency MBS underperformed like-duration U.S.Treasuries
during the quarter, driven largely by larger levels of issuance and increasing concerns of MBS
demand once the Fed ends its purchase program in October.
• U.S. investment grade credit returned-0.03%during the third quarter and 5.67%year to date,as
measured by the Barclays U.S. Credit Index.The sector underperformed like-duration Treasuries by-
0.67%during the quarter as spreads widened by 11 basis points to 1.07%.
• Treasury Inflation-Protected Securities (TIPS) returned -2.04% for the third quarter (based on the
Barclays U.S. TIPS Index) and 3.67%year to date. TIPS posted negative returns as real yields in the
U.S. increased and underperformed nominal Treasuries as inflation and inflation expectations both
decreased. Inflation decelerated from the 2% level seen earlier this year as food and energy prices
fell, as did prices for transportation.
• Tax-exempt municipals returned 1.49% during the quarter and 7.58% year to date, based on the
Barclays Municipal Bond Index.Taxable municipals also posted positive returns of 0.86%in the third
quarter and 11.81% year to date, according to the Barclays Taxable Municipal Index. Municipal
bonds posted positive returns and outperformed Treasuries. Consistent with the 2014 trend, returns
Mr. Mike White,CPA October 29, 2014
Orange County Sanitation District Page 3
were driven by lower Treasury rates, negative net new issue supply, and mutual fund inflows. Net
supply continued to contract, as new issuance did not keep pace with seasonally high levels of
maturing bonds.
Performance Attribution
Long-Term Portfolio
The Long-Term portfolio that PIMCO manages on behalf of Orange County Sanitation District returned -
0.06 percent over the quarter, outperforming the Merrill Lynch 1-5 year Government Corporate Index
by 1 basis point. The following points summarize returns for the quarter ended September 30, 2014.
• The portfolio outperformed its benchmark for the quarter
• The following strategies were positive for the quarter:
➢ An underweight to U.S. duration,particularly at 1-5 year maturities,as the U.S.yield curve
steepened
• The following strategies were negative or neutral for returns:
➢ Holdings of U.S. inflation-protected securities as inflation expectations decreased during the
quarter
Liquid Portfolio
The Liquid portfolio that PIMCO manages on behalf of Orange County Sanitation District returned 0.03
percent over the quarter, outperforming its benchmark, the 3-month Treasury Bill Index, by 2 basis
points. The following points summarize returns for the period ending September 30,2014.
• The portfolio outperformed its benchmark for the quarter
• The following strategies were positive for the quarter:
➢ Use of higher yielding securities with slightly longer maturities
Economic Outlook
We expect the U.S. to continue to be a bright spot in the global economy, with growth of 2.5-3%. This
growth is likely to be driven by acceleration in capital expenditures, as corporations experience
additional pricing power and better expected returns on their investments.
Underlying this view, monetary policy remains supportive, as the Federal Reserve (Fed) looks to reflate
the U.S. economy. Given the overall muted level of U.S. growth, compared to historical recoveries, we
anticipate that the Fed is likely to raise policy rates only gradually. Our expectation is that the first rise in
the federal funds rate will take place in mid-2015.
One implication is that the continued intervention by monetary policy authorities, balanced with
moderate GDP growth and strong corporate balance sheets, provides support for investments in bonds
that trade at a spread to Treasuries. Additionally, given that maturities have been pushed out for a
couple of more years, we expect it to be some time before there is a catalyst for a change in the
financial cycle.
Mr. Mike White,CPA October 29, 2014
Orange County Sanitation District Page 4
Strata
The following list highlights the strategies that will be used in the Long Term portfolio in the coming
months:
• Plan to be largely underweight U.S.interest rate risk;focus on intermediate maturities
• Selectively add exposure to short-dated credit in companies with strong growth and pricing power
and in industries with high barriers to entry and improving fundamentals; focus on issuers within
housing,healthcare,and energy
• Maintain tactical allocations to Agency MBS; focus on security selection to capitalize on relative
value opportunities within the coupon stack
• Hold intermediate Treasury Inflation-Protected Securities(TIPS) as we believe inflation protection is
attractively priced at these maturities
• Retain exposure to high quality municipal bonds that offer attractive yields
The following list highlights the strategies that will be used in the Liquid Portfolio in the coming months:
• Concentrate on maturities just outside the money market space that offer better potential for price
appreciation and "roll down"given continued dovish central bank policy
Compliance Issues
Long-Term Portfolio
• July 2014: None
• August 2014: None
• September2014: None
Defaulted bonds
The account continues to hold$2 million face value of LEHMAN BROS HLDGS FRN 2008(cusip
52517PC58)that was purchased on 10/24/2005,which has had its rating withdrawn by S&P and
Moody's as a result of Lehman's bankruptcy on 09/15/2008. The account also holds$600,000 face value
of LEHMAN BROS HLDGS SR UNSEC(cusip 5252MOBZ9)that was purchased on 01/15/2008,which has
had its rating withdrawn by S&P and Moody's as a result of Lehman's bankruptcy.
The account received an initial partial payment of claims against Lehman in the amount of$36,267.83
and$120,464.84.The amount and timing of subsequent payments remains uncertain. Ultimate recovery
value will depend upon how fast and when their remaining assets are liquidated. We are monitoring the
situation closely and expect to get more clarity as Lehman continues moving through the bankruptcy
process.
Ratings
The account holds approximately $10.7 million face value of mortgage backed securities and pass-
throughs that were purchased following a coding error in our compliance system.
Mr. Mike White,CPA October 29, 2014
Orange County Sanitation District Page 5
Your Investment Policy Statement requires that Collateralized mortgage obligations (CMOs) issued by
agencies of the U.S. Government and asset-backed securities be rated "Aaa" by Moody's AND "AAA" by
S&P.
Currently, there are three securities that are not rated by both Moody's and S&P, one of which is rated
below AA+ by S&P and unrated by Moody's, violating both rules. Twelve securities have minimum
ratings from S&P and Moody's below AAA. All securities were compliant at the time of purchase.
On 11/16/2012, S&P lowered its rating on certain classes of RMBS transactions from AAA to A+. The
affected holding (cusip N83611MGS1) represents approximately 0.2% of the portfolio's total market
value. We believe the position remains attractive despite the downgrade. Only 35% of the principal
remains outstanding and the security does not have a history of delinquent or defaulted payments. We
plan to hold the position unless directed otherwise.
On 1/18/2013, S&P lowered its rating on certain classes of RMBS transactions from AAA to AA+. The
affected holding (cusip #03215PFN4) represents approximately 0.03% of the portfolio's total market
value. Only 1% of the principal remains outstanding and the security does not have a history of
delinquent or defaulted payments. We plan to hold the position unless directed otherwise.
On 11/14/2013, Moody's downgraded the senior unsecured debt of Goldman Sachs from A3 to Baal
(cusip 38141GeG5 and 38141GFG4), and the senior unsecured debt of Morgan Stanley from Baal to
Baal (cusip 61747VCE3). The downgrades came after the company concluded their comprehensive
review of eight U.S. banks that began in August. The affected securities represent approximately 0.93%
of the total market value of the portfolio. We plan to retain the positions unless directed otherwise.
Liquid Portfolio
• July 2014
Due to the client-directed withdrawal of$27,000,000 on July 31, the following maximum concentration
rules were breached:
• U.S.Agencies-exposure increased above the max 20%limit to 25.47%on July 31
• Corporates-exposure increased above the max 30%limit to 30.86%on July 31
• Repos-exposure increased above the max 20% limit to 29.03%on July 31
Compliance was subsequently restored in a prudent manner over the following trading days:
• US Agencies-compliance was restored on August 13
• Corporates-compliance was restored on August 13
• Repos-compliance was restored on August 1
August 2014
Due to the client-directed withdrawal of$27,000,000 on July 31, the following maximum concentration
rules were breached:
Mr. Mike White,CPA October 29, 2014
Orange County Sanitation District Page 6
• U.S.Agencies-exposure increased above the max 20%limit to 25.47%on July 31
• Corporates-exposure increased above the max 30%limit to 30.86%on July 31
• Repos-exposure increased above the max 20% limit to 29.03%on July 31
Compliance was subsequently restored in a prudent manner over the following trading days:
• US Agencies-compliance was restored on August 13
• Corporates-compliance was restored on August 13
• Repos-compliance was restored on August 1
September 2014: None
We look forward to discussing these and other topics with you in the near future.
Best Regards,
/s/ /s/
Stephanie King,CFA Todd Staley,CFA
Executive Vice President,Account Manager Vice President,Account Manager
DDSD Investment Management Program
Quarter End Portfolio Values
(Marked4o-Market)
$600,000,000
$500,000,000
$400,000,000
$300,000,000
$200,000,000
$100,000,000
$0
30 Jun 13 30 Sep 13 31 Dec 13 31 Mar 14 30 Jun 14 30 Sep 14
euy�Mo .re.-. 8w,Urr,oww,o M—. ,
Summary of Performance Data and Portfolio Statistics
Orange County Sanitation District
Liquid Operating Portfolio
10-Year Ferum vs.Standard DeWarrm
1R
•• •-• ' 1 1 ��®®®��� t0
Total Portfolio e
x
Before Fees(%) 2.82 1.58 0.02 0.02 0.07 0.07 0.06 0.03 a chi 10-
After Fees %) 2 82 1.58 0.02 -0.02 -0.O9 -0.05 -0.02 -0.02 a Yrfn ML 13 Yr,SHIP
1 s 4 vr.Treaaury
Citi 3-Month Treasury Bill Index(%)° 264 1.51 0.08 0.05 0.04 0.03 0.02 0.01 g A
= R9 Por la
0 Index
-2
4 -R 0 R 4 8 0 10 1R
mandem DevlceonaRMine s)
%of Market Value Duration in Yrs
Total Market Value(USD in millions) 85.9 58.9 Government-Related 40 5 003 0.01
Quarterly Contributions(USD In millions) 35.0 -27.0 Mortgage 0 0 000 0.00
Estimated Annual Income(USD In millions) 0.7 0.4 Invest.Grade Credit 21 18 0.12 0.06
Estimated Yield M Maturity(%) 0.1 0.1 High Yield Credit 0 0 010 0.00
Effective Duration(yra) 0.2 0.1 Non U.S.Developed 0 0 0.00 0.00
Effective Maturity(ym) 0.2 0.1 Emerging Markets 0 a 0.00 0.00
Average Quality AA+ AA+ Municipal 0 0 0.00 0.00
Average Coupon(%) 0.8 0.8 Other 0 0 0.00 0.00
Net Currency Exposure(%) 0.0 0.0 Net Cash Equivalents:° 39 ]] 0.06 0.06
Tracking Error(10 yes,%)x' 0.1 0.1 Commercial Paper/STIF 36 57 0.06 0.06
Information Ratio(10 ye l 2.8 2.9 ST Government-Related! 0 0 0.00 0.00
'See example of tracking error/Information ratio on Certificates of Deposit 0 0 0.00 0.00
footnote page of the Appendix.
U.S.Money Mkt FutureslOptions 0 0 0.00 0.00
Non-U.S.Money Market Futures 0 0 0.00 0.00
Other 5 40 0.00 0.00
Less:Liabilities -2 .20 0.00 0.00
Total 100 100 0.21 0.14
Govemment-Related may include nominal and inflation-protected Treasuries,agencies,interest rate swaps,
See footnotes in Appendix. Treasury futures and options,and FDIC-guaranteed corporate securities.
2
Summary of Performance Data and Portfolio Statistics
Orange County Sanitation District
Long Term Portfolio
10-Year as urn,n.smndeN o--anon
8
Total Portfolio' a: B CepInI U.S.
Before Fees(%) 4.86 3.0 2.42 1.13 1.05 1.43 0.72 -0.06 a Aasrasam
After Fees(%) 4.71 3.52 2.26 0.98 0.91 1.33 0.65 -0.10 5rc` A
p Pammlio
Bork Merrill Lynch U.S.Corporate/Government Index
1-5 Year Bond Index(%)� 4.64 3.33 226 1.35 1.25 1.11 bad -0.07 2
all a_
Ma
0
e2 4 a e
SentlaN oevlz0oaaf lteWml(x)
%of Market Value %of Duration
1 1 r r r r 1 1 • 1 1
Total Market Value(USD in millions) 506.2 461.6 Government-Related 25 30 68 62
Quarterly Contributions(USD In millions) 63.2 - .3 Mortgage 1 1 1 1
Estimated Annual Income(USD in millions) 5.9 5.0 Invest.Grade Credit 10 9 14 iT
Estimated Yield to Maturity(%) 1.0 1.0 High Yield Credit 0 0 0 0
Effective Duredon(yrs) 2.5 2.2 Non U.S.Developed 0 0 0 0
Benchmark Duration(yrs) 2.7 2.7 Emerging Markets 0 0 0 0
Effective Matudly(yrs) 3.0 2.6 Municipal/Other 4 4 14 iT
Average Quality M. AAe Net Cash Equivalents:' 60 56 3 3
Average Coupon(%) 1.2 1.1 Commercial Paper I STIF 35 31 3 2
Net Currency Exposure(%) 0.0 0.0 ST Government-Related 3 1 0 0
Tracking Error(10 yrs,%)r 0.8 0.8 ST Mortgage 1 1 0 0
Information Ratio(10 yis)d' 04 0.4 ST Credit 1 3 0 1
'See example of cracking error I information ratio on footnote page U.S.Money Market Futures/Options 0 0 0 0
of the Appendix. Non U.S.Money Market Futures 0 0 0 0
char 40 40 0 0
Less:Liabilities -20 40 0 0
Total 100 100 100 100
Govemment-Related may include nominal and inflation-protected Treasuries,agencies,interest rate
swaps,Treasury futures and options,and FDIC-guaranteed corporate securities.
See footnotes in Appendix.
2
Orange County Sanitation District
Investment Transactions and Balances in the
State of California Local Agency Investment Fund
September 30, 2014
Par Value Book Value Market Value Rate Yield
Balance
September 1, 2014 $31,341,566 $31,341,566 $31,341,566 0.25 0.25
Deposits:
Total Deposits 0 0 0 0.25 0.25
Withdrawals:
9/3/2014 (3,900,000) (3,900,000) (3,900,000) 0.25 0.25
9/11/2014 (3,600,000) (3,600,000) (3,600,000) 0.25 0.25
9/17/2014 (1,700,000) (1,700,000) (1,700,000) 0.25 0.25
9/25/2014 (5,300,000) (5,300,000) (5,300,000) 0.25 0.25
Total Withdrawals (14,500,000) (14,500,000) (14,500,000) 0.25 0.25
Balance
September 30, 2014 $16,841,566 $16,841,566 $16,841,566 0.25 0.25
Asset Summary Report ID: G1,8251
'� Base Cwnenry: Can
BNY MELLON by Asset Type with Sectors Alternate Base Currency:
Exchange Rate:
LI VID OPER-PIMCO-OCSFO7511302 9 30 2014 Status: FINAL
Net Unrealized
Cost Market Value % of Gain/Loss
Description Shares Par Base Base Total Base
CASH&CASH EQUIVALENTS
U.B.DOLLAR
FEDERAL HOME LOAN BANK- I YR OR LESS 11,700,000.000 11,698,069.45 11,698,069.45 19.85% 0.00
FEDERAL HOME LOAN MORTGAGES- 1 YR OR LESS 10,130,000.000 10,128,713.21 10,129,065.21 17.19% 352.00
FNMA ISSUES- t YR OR LESS 11,300,000.000 11,299,172.62 11,299,172.62 19.18% 0.00
REPURCHASE AGREEMENTS 23,400,000.000 23,400,000.00 23,400,000.00 39.72% 0.00
SHORT TERM INVESTMENT FUNDS(US REGULATED) 535,336.630 535,336.63 535,336.63 0.91% 0.00
U.S.TREASURY BILLS- 1 YR OR LESS 2,900,000.000 2,899,928.44 2,899,928.44 4.92% 0.00
PENDING TRADES -11,700,000.00 -11,700,000.00 -19.86% 0.00
INTEREST 82,297.20 82,297.20 0.14% 0.00
U.S.DOLLAR 59,965,336.630 48,343,317.55 48,343,869.55 82.05% 352.00
CASH&CASH EQUIVALENTS 59,965,336.630 48,343,517.55 48,343,869.55 82.05% 352.00
FIXED INCOME SECURITIES
U.S.DOLLAR
BANKING&FINANCE 5,479,000.000 5,604,548.85 5,535,765.02 9.40% -68,783.83
CHEMICALS 672,000.000 697,247.04 686,172.48 1.16% -11,074.56
FOOD BEVERAGE&TOBACCO 2,150,000.000 2,209,981.59 2,175,101.25 3.69% -34,880.34
HEALTH CARE 1,050,000.000 1,089,927.68 1,071,231.00 1.82% -18,696.68
INDUSTRIAL 1,096,000.000 1,126,775.68 1,106,565.44 1.88% -20,210.24
U.S.DOLLAR 10,447,000.000 10,T28,480.84 10,574,835.19 17.95% ,153,646.65
FIRED INCOME SECURITIES 30,447,000W0 10,728,480.84 10,574,835.19 17.98% .153,64S.65
TOTAL ASSETS-BASE: 70,412,336.630 59,071,998.39 58,918,704.74 300.00% -153,293.65
101812014 6:12:I9PM EDT 1 Workbermh
Asset Summary Report ID: GL8251
'� Base Cunenry: Can
BNY MELLON by Asset Type with Sectors Alternate Base Currency:
Exchange Rate:
TANG TERM OPER-PIMCO-OCSF07522202 9 30 2014 Status: FINAL
Net Unrealized
Cost Market Value % of Gain/Loss
Description Shares Par Base Base Total Base
CASH&CASH EQUNALENTS
U.B.DOLLAR
CASH EQUIVALENTS 104,812.500 104,812.50 43,890.23 0.01% -60,922.27
FEDERAL HOME LOAN BANK- 1 YR OR LESS 63,299,000.000 63,286,618.68 63,286,618.68 13.72% 0.00
FEDERAL HOME LOAN MORTGAGES- 1 YR OR LESS 51,900,000.000 51,890,413.74 51,890,413.74 11.25% 0.00
FNMA ISSUES- t YR OR LESS 29,200,000.000 29,193,242.28 29,193,242.28 6,33% 0.00
REPURCHASE AGREEMENTS 154,500,000.000 184,500,000.00 184,500,000.00 39.99% 0.00
SHORT TERM INVESTMENT FUNDS(US REGULATED) 603,537.280 603,537.28 603,537.28 0.13% 0.00
U.S.TREASURY BILLS- 1 YR OR LESS 100,000.000 99,969.16 99,969.16 0.02% 0.00
PENDING TRADES -92,297,680.16 -92,297,680.16 -20.00% 0.00
INTEREST 1,187,386.72 1,187,386.72 0.26% 0.00
U.B. DOLLAR 329,7O7,349.780 238,568,300.20 238,507,377.93 91.69% -60,922.27
CASH&CASH EQUNALENTS 329,7O7,349.780 238,568,300.20 238,507,377.93 51.69% -60,922.27
FIXED INCOME SECURITIES
U.S.DOLLAR
ABS-HOME EQUITY 446,200.610 384,149.67 433,893.22 0.09% 49,743.55
ABS-SMALL BUSINESS ADMINISTRATION 178,711.650 178,711.65 192,311.61 0.04% 13,599.96
ADS-STUDENT LOANS 52,247.280 52,035.30 54,151.17 0.01% 2,115.87
AUTOMOBILES&COMPONENTS 5,200,000.000 5,200,000.00 5,218,668.00 1.13% 18,668.00
BANKING&FINANCE 41,134,000.000 43,670,032.55 41,906,689.59 9.08% -1,763,342.96
COLLATERALIZED MORTGAGE OBLIGATION COMM/( 352,878.220 353,787.99 354,078.01 0.08% 290.02
FHLMC MULTICLASS 2,254,204.380 2,471,508.58 2,509,118.17 0.54% 37,609.59
FHLMC POOLS 2,892.390 2,821.90 2,909.46 0.00% 87.56
FNMA POOLS 2,738,069.920 2,884,388.56 2,995,781.60 0,65% 111,393.04
FNMA REMIC 1,282,799.830 1,288,858.51 1,300,336.67 0.28% 11,478A6
FOOD BEVERAGE&TOBACCO 1,600,000.000 1,854,144.00 1,809,520.00 0.39% -44,624.00
GNMA MULTI FAMILY POOLS 330,132.270 330,133.96 342,021.59 0.07% 11,887.63
GNMA REMIC 66,486.830 66,486.83 67,017.39 0.01% 530.56
HEALTHCARE 1,300,000.000 1,318,052.00 1,345,851.00 0.29% 27,799.00
INSURANCE 800,000.000 884,844.67 878,815.00 0.19% -6,029.67
REITS 1,000,000.000 996,050.00 1,089,290.00 0,24% 93,240.00
TAXABLE MUNICIPALS 16,440,000.000 16,738,875.89 19,876,798.60 4.31% 3,137,922.71
101812014 6:14:IOPM EDT 1 Workbench
Asset Summary Repoft ID: GL8251
'� Base Cunenry: USD
BNY MELLON by Asset Type with Sectors Alternate Ease Currency:
Exchange Rate:
TANG TERM 0PER-PIMC0-OCSF07522202 9 30 2014 Status: FINAL
Net Unrealized
Cost Market Value % of Gain/Loss
Description Shares Per Base Base Total Base
U.S.TIPS 19,864,660.000 17,708,575.27 17,204,846.91 3.739% -503,728.36
US GOVERNMENTS 122,300,000.000 122,287,536.57 121,735,980.00 26.39% -551,556.57
UTILITY-ELECTRIC 2,697,000.000 2,983,751.61 2,873,521.64 0,62% -110,229.97
WHOLE LOAN-CMO-COLLATERALIZED MTG OBLIG 682,825.010 682,821.91 684,258.94 0.15% 1,43T03
U.B.DOLLAR 218,723,108.390 222,337,567.42 222,875,868.57 48.31% 538,291.15
FIXED INCOME SECURITIES 218,723,108.390 222,337,567.42 222,895,85B.59 48.31% 538,291.15
TOTAL ASSETS-BASE: 548,430,458.170 460,905,867.62 461,383,236.50 300.00% 477,368.80
101812014 6:14:I0PM EDT 2 Workbench
Asset Summary Report ID: GL8251
Base Cuuenry: USD
BNY MELLON by Asset Type with Sectors Alteenate Ease Cwrene .
Exchange Rate:
ESCROW ACCOUNT-OCSFOT555502 9 30 2014 Status: FINAL
Net Unrealized
Cost Market Value % of Gain/Loss
Description RL Shares par Base Base Total Base
CASH&CASH EQUWALENTS
U.B.DOLLAR
INTEREST 595.68 595.68 0.02% 0.00
PUKED INCOME SECURITIES
U.S.DOLLAR
US GOVERNMENTS 3,594,000.000 3,603,596.33 3,599,319.12 99.98% -4,277.21
TOTAL ASSETS-BASE: 3,594,000.000 3,604,192.01 3,599,914.80 100.00% -4,277.21
101812014 6;15:48PM EDT 1 Workbench
Yield Analysis Report ID: RAM234
Base Currency:
BNY MELLON
OCSF07511102 9/30/2014
Liquid Oper-Pimco
Units Held YTM/ Current Moody's Market Total Coat %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj
Rating Value Duration
CASH &.TEMPORARY
Sum o(Acmuut Receivables - 0.00
SUMRECV -11,617,703
AGENCY
5,500,000.00 FEDERAL HOME LN BK CONS DISC 0.00 Aaa 100.00 5,499,278 11.39 0.00
313385J23 MAT 10/03/2014 5,499,278 9.33
100,000.00 FEDERAL HOME LN MTG CORP DISC 0.00 Asa IM.00 99,994 0.21 0.00
3133471495 MAT 10/02/2014 99,994 0.17
100,000.00 FEDERAL HOME LN MTG CORP DISC 0.00 Asa IM.00 99,993 0.21 0.01
313399JS1 MAT 10/06/2014 100,000 0.17
179,000.00 FEDERAL HOME LN MTG CORP DISC 0.00 Ass 100.00 178,984 0.37 0.03
313397K59 0.000%10/14/2014 DD 10/15/201 178,984 0.30
246,000.00 FEDERAL HOME LN MTG CORP DISC 0.01 Aaa 100.00 245,967 0.51 0.08
313397M99 0.000%11/03/2014 DO 11/04/201 245,967 0.42
5,500,000.00 FEDERAL HOME LN BK CONS DISC 0.01 Ana IM.00 5,498,898 11.39 0.08
313385M60 MAT 10/31/2014 5,498,898 9.33
515,000.00 FEDERAL HOME LN MTG CORP DISC 0.01 Asa 100.00 514,941 1.09 0.04
313397M24 MAT 10/27/2014 514,941 0.87
700,000.00 FEDERAL HOME LN BKS CONS DISC 0.02 lau 99.99 699,894 1.45 0.19
313385S80 DD 12/12/2013 0.00%12/12/2014 699,894 1.19
2,300,000.00 FEDERAL HOME LN MTG CORP DISC 0.02 Ana 99.99 2,299,609 4.77 0.12
31339MO MAT 11/17/2014 2,299,954 3.90
101812014 6:25:541M EDT 1 Source:The Bank fNew York Mellon Communion
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07511102 9/30/2014
Liquid Oper-Pim<o
Units Held YTM/ Current Moody's Market Total Cost %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market AQj
Rating Value Duration
400,000.00 FEDERAL HOME LN MTG CORP DISC 0.02 Aaa 99.98 399,946 0.83 0.18
313397S44 MAT 12/08/2014 399,946 0,68
500,000.00 FEDERAL HOME LN MTG CORP DISC 0.02 Aaa 99.98 499,923 1.04 0.11
313397P21 0.000%11/12/2014 DD 11/12/201 499,923 0.85
200,000.00 FEDERAL NATL MTG ASSN DISC 0.02 Ann 99.99 199,984 0.41 0.30
313588AV7 MAT 01/20/2015 199,984 0.34
900,000.00 FEDERAL HOME LN MTG CORP DISC 0.03 Aaa 100.00 899,924 1.86 0.03
313397K69 MAT 10/15/2014 899,924 1.53
COMMERCIAL PAPER
690,000.00 FEDERAL HOME LN MTG CORD DISC 0.01 Aaa 99.99 689,923 1.43 0.09
3133971,74 MAT 10/24/2014 689,923 1.19
3,300,000.00 FEDERAL HOME LN MTG CORD DISC 0.02 Aaa 100.00 3,299,589 6.84 0.05
313399133 MAT 10/20/2014 3,299,589 &W
OTHER
535,336.63 DREYFD THE AGY CSH MGT 521 INC - Aaa 535,337 1.11 0.08
996085247 VAR RT 12/31/2049 DD 04/09/97 535,337 0.91
REPURCHASE AGREEMENTS
11,700,000.00 JP MORGAN CP REP REPO 0.00 0.00 - 100.00 11,700,000 24.24 -
99ZALP9K1 0.000%10/01/2014 DD 09/29/14 11,700,000 19.86
11,700,000.00 JP MORGAN CP REP REPO 0.05 0.05 - 100.00 11,700,000 24.24 0.01
99ZALQB67 0.050%10/02/2014 DD 09/30/14 11,700,000 19.86
TREASURIES AND AGENCIES O
11,100,000.00 FEDERAL NATL ASSN DISCOUNT 0.01 Aaa 99.99 11,099,188 23.00 0.20
313589S89 MAT 12/12/2014 11,099,188 1&84
101812014 6:25:54PM EDT 2 Sourr Ma BakofNeu,Pork Mei/an Corporaran
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07511102 9/30/2014
Liquid Oper-Pim<o
Units Held YTM/ Current Moody's Market Total Cost %Type Option
Security ID Security Description can(EOP) Yield Quality Price Market Value %Market Adj
Rating Value Duration
900,000.00 FEDERAL HOME LN MTG CORP DISC 0.03 A. 100.00 899,922 1.86 0.04
313397K75 0.000%10/16/2014 DO 10/16/201 899,922 1,53
TREASURY
900,000.00 U S TREASURY BILL 0.01 Aaa 100.00 899,993 1.86 0.14
912796EE5 0.000%11/20/2014 DO 05/22/14 899,993 1.53
2,000,000.00 U S TREASURY BILL 0.02 Asa 100.00 1,999,936 4.14 0.26
912796EM7 0.000%0 1/02/2015 DO 04/03/14 1,999,936 3.39
US CASH
1.00 USD(UNITED STATES DOLLAR) - - 0 0.00 -
NA9123459 GLPAYABLES RECEIVABLES 0 0.00
TOTAL: CASH&TEMPORARY 0.02 0.01 59,961,220 100.00 0.12
49,343,870
FIXED INCOME
BANKS&FINANCE
1,120,000.00 BANK OF NEW YORK MELLON CORP/T 0.50 1.20 Al 100.27 1,127,224 10.54 0.39
06406HCCI 1.200%02/20/2015 DD 02/21/12 1,123,024 1.91
1,135,000.00 CREDIT SUISSE USA INC 0.52 4.81 Al 101.27 1,168,832 10.99 0.29
22541LAR4 4.895%01/15/2015 DO 12/15/04 1,149,369 1.95
1,040,000.00 CITIGROUP INC 0.59 5.92 Baal 101.58 1,077,710 9.91 0.29
172967FA4 6.010%01/15/2015 DO 12/15/09 1,056,390 1.79
1,084,000.00 WACHOVIA BANK NA 0.61 4.81 Al 101.43 1,118,110 10.32 0.34
92976GAD3 4.895%02/01/2015 DO 0 1/31/05 1,099,480 1.89
INDUSTRIALS
101812014 6:25:54PM EDT 3 Sou¢ Ma BakofNew York Mei/an Corporad.n
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07511102 9/30/2014
Liquid Oper-Pim<o
Units Held YTM/ Current Moody's Market Total Coat %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj
Rating Value Duration
1,096,000.00 EMERSON ELECTRIC CO 0.36 4.95 A2 100.96 1,126,996 10.39 0.21
291011AS3 &000%12/15/2014 DD 12/11/02 1,106,565 1,88
672,000.00 PRAXAIRINC 0.40 4.53 A2 102.11 697,247 6.44 0.50
74005PAR5 4.625%03/30/2015 DO 03/07/08 686,172 1.16
1,100,000.00 ,IPMORGAN CHASE&CO 0.43 1.86 A3 100.68 1,112,672 10.39 0.49
466231 JP5 1.875%03/20/2015 DD 03/21/12 1,107,502 1.88
1,050,000.00 UNITEDHEALTH GROUP INC 0.45 4.98 A3 102.02 1,089,928 10.05 0.46
91324PAM4 4.875%03/15/2015 DD 03/07/05 1,071,231 1.82
1,075,000.00 ANHEUSER-BUSCH INBEV WORLDWIDE 0.46 4.08 A2 101.09 1,101,983 10.20 0.29
03523TAMO 4.125%01/15/2015 DD 10/16/09 1,086,460 1.84
1,075,000.00 PEPSIAMERICAS INC 0.51 4.81 Al 101.27 1,107,999 10.22 0.29
91343PAA9 4.895%01/15/2015 DD 01/10/05 1,088,642 1.85
TOTAL:FU(Ru INCOME, 0." 4.12 10,'M8,481 100.00 0.34
10,574,835
TOTAL:Liquid Oper-Pleura 0.11 0.76 70,689,701 100.00 0.17
58,918,705
101812014 6:25:54PM EDT 4 Source:The Bank fNew York Meilan Corporaran
Yield Analysis Report ID: RAM234
Base Currency:
BNY MELLON
OCSF07522202 9/30/2014
Long Term Oper-Pimeo
Units Held YTM/ Current Moody's Market Total Coat %Type Option
Security ID Security Description can(EOP) Yield Quality Price Market Value %Market AQj
Rating Value Duration
CASH &.TEMPORARY
Sum o(Acmuut Receivables - 0.00
SUMRECV -91,110,293
AGENCY
18,100,000.00 FEDERAL HOME LN MTG CORP DISC 0.01 Aae 99.98 18,098,881 7.63 0.22
313397U25 0.000%12/22/2014 DO 12/23/201 18,098,881 3.92
7,099,000.00 FEDERAL HOME LN BK CONS DISC 0.01 Aes 99.99 7,096,201 2.99 0.07
313385M45 MAT 10/29/2014 7,096,201 1.54
100,000.00 FEDERAL HOME LN BK CONS DISC 0.01 Aas 99.99 99,993 0.04 0.21
313385T71 MAT 12/19/2014 99,993 0.02
45,800,000.00 FEDERAL HOME LN BKS CONS DISC 0.02 Aaa 99.99 45,793,049 19.29 0.19
313385S80 DID 12/12/2013 0.00%12/12/2014 45,793,049 9.93
10,300,000.00 FEDERAL HOME LN BK CONS DISC 0.02 Aas 99.98 10,297,376 4.34 0.28
313384AP4 MAT01/14/2015 10,297,376 2.23
3,300,000.00 FEDERAL HOME LN MTG CORP DISC 0.02 Aea 99.99 3,298,276 1.39 0.27
313396AH6 0.000%0 1/08/2015 DO 0 1/08/201 3,298,276 0.71
COMMERCIAL PAPER
9,200,000.00 FEDERAL NATL MTG ASSN DISC 0.00 Aaa 100.00 9,197,869 3.88 0.01
31358WS3 MAT 10/06/2014 9,197,869 1.99
2,500,000.00 FEDERAL HOMES LN MTG CORP DISC 0.01 Aaa 99.99 2,499,106 1.05 0.13
313347Q38 MAT 11/21/2014 2,499,106 0.54
28,000,000.00 FEDERAL HOME LN MTG CORP DISC 0.02 Aaa 100.00 27,994,151 11.80 0.05
313397M3 MAT 10/20/2014 27,994,151 6.07
101812014 6:25:54PM EDT 5 Source:The Bouck o FPew Pork Mellen Communion
Yield Analysis Report ID: RAM234
Ease Currency: Ban
BNY MELLON
OCSF07522202 9/30/2014
Long Term.Oper-Pimco
Units Held YTM/ Current Moody's Market Total Cost %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj
Rating Value Duration
OTHER
10 ,812.50 SLH PROXY LONG EXPOSURE - - 104,813 0.02 -
99WAEU30 SLHOPNTA4 43,890 0.01
603,537.28 DREYFU THE AGY CSH MGT 521 INC - Aaa 603,537 0.25 0.08
996085247 VARRT12/31/2049DD04/09/97 603,537 0.13
REPURCHASE AGREEMENTS
92,200,000.00 JP MORGAN CP REP REPO 0.00 0.00 - 100.00 92,200,000 38.85 -
99ZALP9K1 0.000%10/01/2014 DO 09/29/14 92,200,000 19.98
92,300,000.00 JP MORGAN CP REP REPO 0.05 0.05 - 100.00 92,300,000 38.89 0.01
99ZALpB67 0.050%10/02/2014 DO 09/30/14 92,300,000 20.01
TREASURIEB AND AGENCIES O
15,000,000.00 FEDERAL NATL WG ASSN DISC 0.00 Ann 100.00 14,996,475 6.32 0.00
313589H89 MAT 10/01/2014 14,996,475 3.25
5,000,000.00 FEDERAL NATL WG ASSN DISC 0.02 Asa 99.98 4,998,899 2.11 0.29
313588AE5 MAT01/05/2015 4,998,899 1.08
TREASURY
100,000.00 U S TREASURY BILL 0.02 Asa 100.00 99,969 0.04 0.22
912796EK1 0.000%12/18/2014 DO 06/19/14 99,969 0.02
US CASH
1.00 USD(UNITED STATES DOLLAR) - - 0 0.00 -
NA9123459 GL PAYABLES RECEIVABLES 0 0.00
TOTAL:CASH&TEMPORARY 0.03 0.02 329,678,594 300.00 0.14
238,507,378
FEXED INCOME
101812014 6:25:54PM EDT 6 Sourr Ma DaNc. fNew York M,Sa Corporndon
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07522202 9/30/2014
Long Term.Oper-Pimco
Units Held YTM/ Current Moody's Market Total Coat %Type Option
Security ID Security Description can(EOP) Yield QuaHty Price Market Value %Market Adj
Rating Value Duration
BANKS&FINANCE
5,200,000.00 TOYOTA MOTOR CREDIT CORP 0.30 0.52 As3 100.36 5,200,000 2.33 1.62
89236TAK1 VARRT 05/17/2016DD05/17/13 5,218,668 1.13
6,300,000.00 WELLS FARGO BANK NA 0.36 0.75 Aa3 100.32 6,297,795 2.82 0.80
94985H5F7 0.750%07/20/2015 DD 07/29/13 6,319,845 1.37
500,000.00 WELLS FARGO BANK NA 0.51 0.49 - 99.95 500,000 0.22 -
94988J2L0 VAR RT 06/15/2017 DD 06/12/14 499,725 0.11
2,000,000.00 GOLDMAN SACHS GROUP INC/THE 0.54 0.68 Baal 100.22 1,895,068 0.89 0.23
38141GEG5 VARRT 03/22/2016DD03/22/06 2,004,300 0.43
500,000.00 AFLAC INC 0.61 3.37 A3 102.48 499,630 0.23 0.86
001055AE2 3A50%08/15/2015 DD 08/09/10 512,380 0.11
700,000.00 MORGAN STANLEY 0.65 5.82 Baa2 103.08 737,361 0.32 0.56
61747YCE3 &000%04/28/2015 DD 04/28/08 721,567 OA6
600,000.00 BANK OF AMERICA NA 0.65 0.66 A2 100.02 600,000 0.27 0.10
06050TLX8 VAR RT 05/08/2017DD05/08/14 600,144 OAS
200,000.00 CITIGROUP INC 0.85 1.24 Baa2 100.52 198,352 0.09 1.28
172967GGO 1.250%01/15/2016 DD 0 1/10/13 201,032 0.04
500,000.00 JPMORGAN CHASE&CO 0.92 3.33 A3 103.56 506,326 0.23 1.39
46625HHX1 3A50%03/01/2016 DD 02/24/11 517,815 OA1
134,000.00 CITIGROUP INC 1.01 5.49 Baa2 100.19 142,584 0.06 0.04
172967UG 5.500%10/15/2014 DD 09/24/09 134,249 0.03
30Q000.00 JPMORGAN CHASE&CO 1.16 3.04 A3 103.46 299,658 0.14 1.71
46625HJA9 3.150%07/05/2016 DD 06/29/11 310,391 0.07
101812014 6:25:54PM EDT 7 Sou¢e:The Bank fNew Pork Meilan Corporation
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07522202 9/30/2014
Long Term.Opar Pimco
Units Held YTM/ Current Moody's Market Total Coat %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj
Rating Value Duration
1,100,000.00 JPMORGAN CHASE BANK NA L93 5.37 A2 111.81 1,302,565 0.55 2.92
48121CYK6 &000%10/01/2017 DD 09/24/07 1,229,866 0,29
2,900,000.00 AMERICAN EXPRESS CO 1.99 6.00 A3 116.43 3,377,386 1.51 3.16
025816AY5 7.000%03/19/2018 DD 03/19/08 3,376,412 0.93
3,800,000.00 BANK OF AMERICA CORP 2.06 5.17 Baa2 111.29 4,334,014 1.89 2.90
060505DP6 5.750%12/01/2017 DD 12/04/07 4,228,260 0.92
3,200,000.00 BEAR STEARNS COS LLC/THE 2.13 4.26 A3 109.06 3,523,520 1.56 3.46
093902CD8 4.650%07/02/2018 DD 06/25/03 3,490,048 0.96
600,000.00 GOLDMAN SACHS GROUP INC/THE 2.18 5.31 Bael 111.95 692,806 0.30 3.02
38141GFG4 5.950%01/18/2018 DD 01/18/08 671,694 0.15
300,000.00 AMERICAN INTERNATIONAL GROUP I 2.25 6.45 Baal 122.15 385,215 0.16 3.41
026874BT3 8.250%08/15/2018 DD 02/15/09 366,435 0.08
2,800,000.00 MERRILL LYNCH&CO INC 2.55 5.88 Bae2 116.83 3,417,664 1.46 3.62
590188JN9 6.875%11/15/2018 DD 11/24/98 3,271,156 0.91
l W,000.00 JPMORGAN CHASE&CO 2.56 5.43 A3 115.99 112,124 0.05 3.98
46625HHL7 6.300%04/23/2019 DO 04/23/09 115,993 0.03
500,000.00 DANK OF AMERICA CORP 2A3 6.31 Baal 120.81 619,600 0.27 3.99
060510DZ9 7.625%06/01/2019 DO 06/02/09 604,030 0.13
1,000,000.00 SIMON PROPERTY GROUP LP 2E4 4.02 A2 108.93 996,050 0.49 5.91
828807CF2 4.375%03/01/2021 DO 08/16/10 1,089,290 0.24
1,000,000.00 JPMORGAN CHASE&CO 2.94 4.08 A3 107.75 1,104,074 0.48 5.18
46625HHS2 4.400%07/22/2020 DO 07/22/10 1,099,450 0.23
500,000.00 JPMORGAN CHASE&CO 3.03 3.98 A3 106.69 499,876 0.24 5.33
46625HHU7 4.250%10/15/2020 DD 10/21/10 533,460 0.12
101812014 6:25:54PM EDT 8 Sou¢ Ma BaNc. fNew Pork Meilan Corporndon
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07522202 9/30/2014
Long Term.Oper-Pimco
Units Held YTM/ Current Moody's Market Total Coat %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market AQj
Rating Value Duration
5,600,000.00 MORGAN STANLEY 3A1 4.88 Baal 112.63 6,401,696 2.82 5.81
61747WAL3 5500%07/28/2021 DD 07/28/11 6,307,280 1,39
5,000,000.00 GOLDMAN SACHS GROUP INC/THE 3.93 3.65 Baal 99.27 5,007,200 2.22 7.21
38141GRD8 3.625%01/22/2023 DD 01/22/13 4,963,400 1.08
200,000.00 BANK OF AMERICA CORP 3.88 4.05 Baa2 101.91 206,082 0.09 7.80
06051GMO 4.125%01/22/2024 DD 01/21/14 203,822 0.04
2,000,000.00 LEHMAN BRTH HLD ESC 85.60 - 20.13 1,459,687 0.18 -
525ESCOY6 0.000%12/30/2016 DD 10/24/05 402,500 0.09
600,000.00 ESC LEHMAN BRTH HLD ESCROW - - 20.38 434,594 0.05 -
525ESCIB9 0.000%01/24/2013 DD 01/22/08 122,250 0.03
COMMERCIAL MORTGAGES
352,878.22 NCUA GUARANTEED NOTES TR Cl Al 0.00 1.59 - 100.34 353,788 0.16 -
62888XAA2 1.6U0%10/29/2020 DO 11/10/10 354,078 0.08
FAHNIE MAE REMIC
420,085.47 FNMA GTD REMIC P/T 10-Ml Al -30.21 3.23 Aaa 102.32 436,101 0.19 0.08
31398MGL4 3.305%06/25/2019 DO 02/01/10 429,815 0.09
200,000.00 FNMA GTD REMIC P/T 07-114 A6 0.42 0.37 Aaa 99.80 190,250 0.09 0.15
31396X3Q5 VAR RT 10/27/2037 DO 11/30/07 199,590 0A4
662,714.36 FNMA GTD REMIC P/T 11-3 FA 0.54 0.82 Asa 101.24 662,507 0.30 0.39
31397QRE0 VAR RT 02/25/2041 DO 01/25/11 670,932 0.15
FHLMC
2,892.39 FHLMC POOL#78-6064 1.96 2.24 Aae 100.59 2,822 0.00 0.35
31348SWZ3 VAR RT 01/01/2028 DD 12/01/97 2,909 0.00
FNMA
101812014 6:25:54PM EDT 9 Sou¢e:TAe Bank fNew York Meilan Corporndon
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07522202 9/30/2014
Long Term.Opar Pimco
Units Held YTM/ Current Moody's Market Total Cost %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj
Rating Value Duration
242,223.98 FNMA POOL#0823358 0.25 2.06 Aaa 107.58 240,332 0.12 0.48
31406X 5 VAR RT 02/01/2035DD04/01/05 260,580 0.06
58,213.50 FNMA PO01,#0826080 2.05 4.53 Aae 110.49 62,580 0.03 2.34
31409BXH9 5.000%07/01/2035 DD 06/01/05 64,310 0.01
333,212.44 FNMA POOL#0357969 2.20 4.52 Aaa 110.62 358,203 0.16 2.35
31376XT22 5.000%09/01/2035 DD 09/01/05 368,600 0.08
9,399.46 FNMA POOL#0748678 2.23 4.52 Aaa 110.59 10,104 0.00 2.62
31403GXF4 5.000%10/01/2033 DD 10/01/03 10,395 0.00
311,560.86 FNMA POOL#0745580 224 4.52 Aaa 110.54 334,928 0.15 2.63
31403WZ3 5.000%06/01/2036 DD 05/01/06 344,387 0.07
631,726.82 FNMA POOL#0888336 2.31 4.52 Aaa 110.52 679,106 0.31 2.77
3141OF4V4 5.000%07/01/2036 DD 04/01/07 698,159 0.15
624,403.37 FNMA POOL#0815971 2.31 4.52 Aaa 110.63 671,234 0.31 2.58
31406POY8 5.000%03/01/2035 DD 03/01/05 690,752 0.15
35,612.86 FNMA POOLNOAL0869 2A0 4.17 Aaa 107.95 37,664 0.02 3.16
3138EG6F6 4.500%06/01/2029DD09/01/11 38,445 0.01
376,089.08 FNMA POOLN0466397 2A1 3.23 Aaa 105.12 367,950 0.18 5.26
31381PDA3 3.400%11/01/2020 DD 11/01/10 395,330 0.09
57,376.82 FNMA POOLd0257179 2A2 4.17 Aaa 107.95 60,682 0.03 3A8
31371N CT 4.500%04/01/2028DD03/01/08 61,940 0.01
58,250.73 FNMA P001,bOMA0022 2.42 4.17 Aaa 107.95 61,606 0.03 3.27
3141 TPAY3 4.500%04/01/2029DD03/01/09 62,883 0.01
FREDDIE MAC MULTICLASS
101812014 6:25:54PM EDT 10 Sou¢ Ma DaNc. fNew York Meilan Corporndon
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07522202 9/30/2014
Long Term.Oper-Pimco
Units Held YTM/ Current Moody's Market Total Coat %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market AQj
Rating Value Duration
100,223.15 FHLMC MULTICLASS MTG E3 A 0.60 2.89 Aaa 104.29 100,328 0.05 0.68
3133ME95 VAR RT 08/15/2032 DD 12/01/97 104,519 0,02
900,000.00 MILK MULTICLASS MTG X006 A2 2.29 3.89 Aae 109.36 95I,047 0.44 4.69
31398VJ98 4.251%01/25/2020 DD 04/01/10 984,240 0.21
1,253,981.23 FHLMC MULTICLASS MTG 58 2A 2.61 5.94 Aaa 113.29 1,420,134 0.63 -0.25
31394JY35 6.500%09/25/2043 DD 09/01/03 1,420,359 0.31
ORMA
121,917.71 GNMA II POOL a0080965 0.15 1.58 Aaa 103.95 121,842 0.06 0.85
36225DCB8 VARRT 09/20/2034DD09/01/04 126,731 0.03
39,878.58 GNMA II POOL a080088M 0.56 1.58 Aaa 104.13 40,751 0.02 0.94
36225CC20 VARRT 06/20/2029DD06/01/97 41,524 0.01
14,394.67 GNMA II POOL s0080395 0.99 1.59 Aaa 103.26 14,264 0.01 0.65
36225CNM4 VARRT 04/20/2030DD04/01/00 14,864 0A0
120,278.52 GNMA II POOL s080408X 0.80 1.59 Aaa 103.26 119,057 0.06 0.99
36225CN28 VAR RT 05/20/2030DD05/01/00 124,197 0.03
33,662.79 GNMA II POOL#0080023 0.83 1.59 Aaa 103.10 34,220 0.02 0.35
36225CAE9 VAR RT 12/20/2026 DD 12/01/96 34,705 0.01
ORMA REMIC
66,486.83 GNMA GM REMIC P/T 00-9 FH 0.03 0.65 Aaa 100.80 66,487 0.03 0.15
3837114NX9 VAR RT 02/16/2030 69,019 0.01
HOME EQUITY
133,743.29 AMRESCO RESIDENTIAL SECURI 1 A 2.54 1.02 - 92.12 100,433 0.06 -0.03
03215PFN4 VAR RT 06/2512029 DD 10/20/99 123,198 0.03
101812014 6:25:54PM EDT 11 Sou¢ Ma HaNc. fNew York Meilan Corporndon
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07522202 9/30/2014
Long Term.Oper-Pimco
Units Held YTM/ Current Moody's Market Total Cost %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market AQj
Rating Value Duration
240,651.10 SOUNDVIEW HOME LOAN TR OPTS A4 2.85 0.46 - 99.06 212,455 0.11 0.02
83611MGS1 VARRT 11/25/2035DD09/30/05 238,395 0.05
71,800.22 WELLS FARGO HOME EQUNY 2 A16 3.87 4.90 Aaa 100.90 71,262 0.03 0.00
94980GAG6 VARRT 10/25/2034DD09/01/04 72,301 0.02
UiDUSTRIALS
1,000,000.00 SOUTHERN CO/THE 0.61 2.34 Baal 101.68 999,810 0.45 0.95
842587CGO 2.395%09/15/2015 DD 09/19/10 1,016,800 0.22
1,600,000.00 PHIMP MORRIS INTERNATIONAL IN 1.90 5.00 A2 113.10 1,854,144 0.81 3.29
718172AA7 5.650%05/16/2018 GO 05/16/08 1,809,520 0.39
1,300,000.00 AMGEN INC 2.81 3.33 Baal 103.53 1,318,052 0.60 5.41
031162BD1 3A50%10/01/2020 DD 09/16/10 1,345,851 0.29
OTHER=0 OOVT AGENCIES
682,825.01 NCUA GUARANTEED NOTES TR R2 lA 0.33 0.40 Asa 100.21 682,822 0.31 0.02
62888UAA8 VARRT 11/06/2017 DD 11/17/10 684,259 0.15
178,711.65 SBA GM PARTN CTFS 2001-20C 1 2.73 5.89 Aaa 107.61 178,712 0.09 2.08
83162CWO 6.340%03/01/2021 192,312 0.04
STUDENT
52,247.28 SLM STUDENT LOAN TRUST 200 9 A 1.18 1.67 Aaa 103.64 52,035 0.02 0.00
78445JAA5 VARRT 04/25/2023DD08/28/08 54,151 0.01
TD'8
0.00 US TREAS-CPI INFLAT 2.13 1.09 Asa 104.89 0 0.00 5.57
912828PP9 1.125%01/15/2021 DD 0 1/15/11 0 GAO
3,315,360.00 US TREAS-CPI UUTAT 2.34 0.13 Aae 97.62 3,322,803 1.44 9.12
912828MO O.125%07/15/2022 DD 07/15/12 3,236,355 O.70
TREASURIES
101812014 6:25:54PM EDT 12 Sou¢e:The Bank fNew Pork Meilan Corporndon
Yield Analysis Report ID: RAM234
Base Currency: Ban
BNY MELLON
OCSF07522202 9/30/2014
Long Term.Oper-Pimco
Units Held YTM/ Current Moody's Market Total Cost %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj
Rating Value Duration
3,500,000.00 USTREASURY NOTE 0.08 0.11 Aaa 100.05 3,500,340 1.56 0.00
91282SD31 VAR RT 04/30/2016DD04/30/14 3,501,785 0.96
25,800,000.00 U S TREASURY NOTE 0.55 0.50 Aae 99.90 25,794,961 11.50 1.91
912828D64 0.500%08/31/2016 DO 08/31/14 25,773,684 5.59
52,900,000.00 U S TREASURY NOTE 1.74 1.63 Aaa 99.47 52,816,985 23.49 4.60
912828WS5 1.625%06/30/2019 DO 06/30/14 52,619,101 11.40
38,600,000.00 USTREASURY NOTE 1.76 1.64 Aaa 99.38 38,695,6,i1 17.12 4.68
912828WW6 1.625%07/31/2019 DO 07/31/14 38,358,750 8.31
1,500,000.00 U S TREASURY NOTE 2.19 2.02 Aaa 98.84 1,479,609 0.66 6.29
912828WN6 2.000%05/31/2021 DO 05/31/14 1,482,660 0.32
14,549,300.00 US TREAS-CPI INFLATION INDEXED 2.59 0.13 Aaa 96.01 14,385,772 6.23 8.97
912828W O 0.125%07/15/2024 DO 07/15/14 13,968,492 3.03
US TAXABLE MUM BONDS
2,440,000.00 PORT AUTH OF NEW YORK&NEW JE 2.16 4.60 Aaa 115.33 2,507,634 1.26 4.57
73358WAG9 5.309%12/01/2019 DO 07/01/09 2,814,028 0.61
1,400,000.00 NEW YORK CITY NY TRANSITIONAL 2.55 3.75 Aal 108.55 1,400,000 0.68 5.42
64971M5E8 4.075%11/01/2020 DO 11/03/10 1,519,756 0.33
400,000.00 UNIV OF CALIFORNIA CA RUTS MED 3.05 4.50 Aa3 111.83 400,000 0.20 5.70
913366E,15 &035%05/15/2021 DO 11/18/10 447,332 0A0
1,200,000.00 TEXAS ST TRANSPRTN COMMISSION 3.26 4.37 Aae 115.05 1,200,000 0.62 8.07
88283LHT6 5.028%04/01/2026 DO 08/05/10 1,380,552 0.30
1,300,000.00 NEW YORK NY 3.82 4.81 Aa2 118.48 1,373,502 0.69 9.43
64966=0 5.698%03/01/2027 DO 03/30/10 1,540,240 0.33
101812014 6:25:54PM EDT 13 Soume:The E¢Nc. fNew Pork Meilan Corporndon
Yield Analysis Report ID: RAM234
Ease Currency: Ban
BNY MELLON
OCSF07522202 9/30/2014
Long Term.Opar Pimco
Units Held YTM/ Current Moody's Market Total Coat %Type Option
Security ID Security Description can(EOP) Yield Quality Price Market Value %Market Adj
Rating Value Duration
1,300,000.00 BAY AREA CA TOLL AUTH TOLL BRI 3.92 5.44 Al 124.95 1,300,000 0.93 Z98
092024NT5 6993%04/01/2030 DO 09/0 1/10 1,624,389 0.35
2,500,000.00 ILLINOIS ST TOLL HIGHWAY AUTH 4.12 4.90 Aa3 106.53 2,464,750 1.19 4.54
452252FJ3 5.293%01/01/2024 DO 05/21/09 2,663,350 0.58
300,000.00 MET TRANSPRTN AUTH NY REVENUE 4.21 4.98 A2 136.84 311,316 0.18 12.86
59259YGFO 6.814%11/15/2040 DO 12/29/10 410,532 0.09
1,500,000.00 CALIFORNIA ST 4.47 5.23 As3 140.43 1,509,825 0.94 12.63
13063BBU5 9.350%11/01/2039 DO 11/10/09 2,106,480 0.46
1,500,000.00 NEW JERSEY ST TURNPIKE AUTH 4.52 5.18 A3 143.22 1,634,565 0.96 13.54
646139W35 7.414%01/01/2040 DO 04/28/09 2,148,285 0.47
1,300,000.00 MASSACHUSETTS ST PORT AUTH FAC 4.59 5.38 A3 115.31 1,300,000 0.67 9.10
575898CS8 6.202%00/01/2031 DD 06/15/11 1,499,056 0.32
1,300,000.00 AMERICAN MUM MR-OHIO MC OH 5.01 5.84 A3 132.52 1,337,284 0.77 11.04
02765UEH3 7.734%02/15/2033 DD 12/21/10 1,722,799 0.37
=HIES
1,697,000.00 DOMINION RESOURCES MC/VA 1.11 5.12 Baa2 109.41 1,983,942 0.83 MO
25746UBB4 5.600%11/15/2016 DO 11/14/06 1,856,722 0.40
TOTAL:FTKED INCOME 1.95 2.21 222,337,567 100.00 4.44
222,875,859
TOTAL:Long Term Oper.Pimeo 0.96 1.08 552,016,161 100.00 2.75
461,383,237
101812014 6:25:54PM EDT 14 Sou¢e:The Bank fNew York Megan Corporndon
Yield Analysis Report ID: NAM234
Base currency:
BNY MELLON
OCSF07555502 9/30/2014
O.C.S.Escrow Account
Units Held YTM/ Current Moody's Market Total Cost %Type Option
Security ID Security Description can(SOP) Yield Quality Price Market Value %Market Adj
Rating Value Duration
CASH &.TEMPORARY
Sum o(Acmunt Receivables - 0.00
SUMRECV 596
TOTAL:CASH 6:TEMPORARY 0.00 0.00 300.00
596
FIXED INCOME
TREASURIES
3,594,000.00 U S TREASURY NCTE 0.05 0.37 Asa 100.15 3,603,596 99.98 0.46
912828SK7 0.375h03/15/2015DD03/15/12 3,599,319 99.98
TOTAL:FIXED INCOME 0.05 0.37 3,603,S% 300.00 0.46
3,599,319
TOTAL:O.C.S.Escrow Account 0.05 0.37 3,603,596 100.00 0.46
3,599,915
101812014 6:25:54PM EDT 15 Source:The DaNc. fNew York McOm Communion
Asset Detail Report ID: GL8013
�' Base Curtency: USD
BNY ME LLON by Currency Alternate Base Currency:
Exchange Rate:
OCW CONSOMDATED-0CSGOOOl0O00 9/30/2014 Statue: FINAL
Net Unrealized
Price Cost Market Value % of Gain/Loss
Description Base Shares Par Base Base Total Base
U.S.DOLLAR
CASH a CASH EQUIVALENTS
INTEREST RECEIVABLE 1,270,279.60 1,270,279.60 0.24% 0.00
RECEIVABLE FOR INVESTMENTS 2,319.84 2,319.84 0.00% 0.00
SOLD
PAYABLE FOR INVESTMENTS -104,000,000.00 -104,000,000.00 -19.85% 0.00
PURCHASED
FEDERAL HOME LN BK CONS DISC 99.9745 10,300,000.000 10,297,376.36 10,297,376.36 1.97% 0.00
MAT 01/14/2015
SEC TO 313384AP4
FEDERAL HOME LN BK CONS DISC 99.9869 5,500,OOOA00 5,499,278.13 5,499,278.13 1.05% 0.00
MAT 10/03/2014
SEC TO 313385J23
FEDERAL HOME LN BK CONS DISC 99.9606 7,099,000A00 7,096,200.63 7,096,200.63 1.35% 0.00
MAT 10/29/2014
SEC ID:31338SM45
FEDERAL HOME LN BK CONS DISC 99.9800 5,500,000.MO 5,498,897.56 5,498,897.56 1.05% 0.00
MAT 10/31/2014
SEC ID:313385M60
FEDERAL HOME LN BKS CONS DISC 99.9846 46,500,OOOA00 46,492,942.45 46,492,942.45 8.89% 0.00
DD 12/12/2013 0.000/, 12/12/2014
SEC ID:313385580
FEDERAL HOME LN BK CONS DISC 99.9930 100,000.000 99,993.00 99,993.00 0.02% 0.00
MAT 12/19/2014
SEC ID:313385T71
FEDERAL HOME LN MTG CORP DISC 99.9478 3,300,000.000 3,298,275.75 3,298,275.95 0,63% 0.00
0.000%O1/08/2015 DO O1/08/201
SEC ID:313396AH6
FEDERAL HOME LN MTG CORP DISC 99.9937 100,000.000 99,993.67 99,993.69 0,02% 0.00
MAT 10/02/2014
SEC ID:3133971-195
FEDERAL HOME LN MTG CORP DISC 100.0000 100,000.000 99,993.00 100,000.00 0,02% 7.00
MAT 10/06/2014
SEC ID:313397JSI
FEDERAL HOME LN MTG CORP DISC 99.9910 179,000.000 178,983.84 198,983S4 0,03% 0.00
0.000%10/14/2014 DD 10/15/201
SEC ID:313397K59
FEDERAL HOME LN MTG CORP DISC 99.9915 900,000.000 899,923.50 899,923S0 0,19% 0.00
MAT 10/15/2014
SEC ID:313397K67
FEDERAL HOME LN MTG CORP DISC 99.9913 900,000.000 899,922.00 899,922.00 0.19% 0.00
0.000% 10/16/2014 DD 10/16/201
SEC ID:313397K75
101812014 6:22:38PM EDT 1 Workbench
Asset Detail Report ID: GL8013
�' Base CurteaeF: LED,
BNY ME LLON by Currency Alteraate Be..Cartency:
Exchange Rate:
OCW CONSOLIDATED-OCSG00030000 9/30/2014 Statue: FINAL
Net Unrealized
Price Cost Market Value % of Gain/Loss
Description Base Shares Par Base Base Total Base
FEDERAL HOME LN MTG CORP DISC 99.9875 31,300,000.000 31,293,739,62 31,293,739,62 SA7% 0,00
MAT 10/20/2014
SEC ID:313397I 3
FEDERAL HOME LN MTG CORP DISC 99.9888 690,000.000 689,922.95 689,922A5 0,13% 0.00
MAT 10/24/2014
SEC ID:313341L74
FEDERAL HOME LN MTG CORP DISC 99.9886 515,000.000 514,941.42 514,94142 0.10% 0.00
MAT 10/2I/2014
SEC ID:313397M24
FEDERAL HOME LN MTG CORP DISC 99.9864 246,000.000 245,966.52 245,966.52 0.05% 0.00
0.000% 11/03/2014 DD 11/04/201
SEC ID:313397M99
FEDERAL HOME LN MTG CORP DISC 99.9846 500,000.000 499,923.19 499,923.19 0.10% 0.00
0.000%11/12/2014 DD 11/12/201
SEC ID:313399P21
FEDERAL HOME LN MTG CORP DISC 99.9980 2,300,000.000 2,299,609.00 2,299,954.00 0.44% 345.00
MAT 11/17/2014
SEC ID:313399P70
FEDERAL HOMES LN MTG CORP DISC 99.9642 2,500,000.000 2,499,105.56 2,499,105.56 0.48% 0.00
MAT 11/21/2014
SEC ID:313399Q38
FEDERAL HOME LN MTG CORP DISC 99.9864 400,000.000 399,945.61 399,945.61 0.08% 0.00
MAT 12/08/2014
SEC ID:313399S44
FEDERAL HOME LN MTG CORP DISC 99.9938 18,100,000.000 18,098,881.32 18,098,881.32 3.45% 0.00
0.000%12/22/2014 DD 12/23/201
SEC ID:313399U25
FEDERAL NATL MTG ASSN DISC 99.9780 5,000,000.000 4,998,898.61 4,998,898.61 0.95% 0.00
MAT01/05/2015
SEC ID:313588AE5
FEDERAL NATL MTG ASSN DISC 99.9922 200,000.000 199,984.31 199,984.31 0.04% 0.00
MAT 01/20/2015
SEC ID:313588AV9
FEDERAL NATL MTG ASSN DISC 99.9765 15,000,000.000 14,996,475.00 14,996,475.00 2.860% 0.00
MAT 10/01/2014
SEC ID:3135891189
FEDERAL NATL MTG ASSN DISC 99.9768 9,200,000.000 9,197,868.67 9,197,868.67 1.960% 0.00
MAT 10/06/2014
SEC ID:313589J53
FEDERAL NATL ASSN DISCOUNT 99.9927 11,100,000.000 11,099,188.31 11,099,188.31 2.12% 0.00
MAT 12/12/2014
SEC ID:313589S89
101812014 6:22:38PM EDT 2 Workbench
Asset Detail Report ID: GL8013
�' Base Curteaey: LED
BNY ME LLON by Currency Alternate Base Currency:
Exchange Rate:
OCSD CONSOLIDATED-OCSW0030000 9/30/2014 Statue: FINAL
Net Unrealized
Cost Market Value % of Gain/Loss
Description Embies Par Base Base Total Base
U STREASURY BILL 99.9992 900,000.000 899,992.88 899,992.88 0.19% 0,00
0,000% 11/20/2014 DD 05/22/14
SEC ID:912796EE5
U S TREASURY BILL 99.9692 100,060.000 99,969.16 99,969.16 0.02% 0.00
0.000% 12/18/2014 DO 06/19/14
SEC ID:912796EK1
U S TREASURY BILL 99.9968 2,000,000.000 1,999,935.56 1,999,935.56 0.38% 0.00
0.000%01/02/2015 DO 07/03/14
SEC ID:912996EM7
DREYFU THE AGY CSH MGT 521 INC 100.0000 1,138,873.910 1,138,873.91 1,138,873.91 0.22% 0.00
VAR RT 12/31/2049 DD 04/09/99
SEC ID:996085247
SLH PROXY LONG EXPOSURE 0.4188 104,812.500 104,812.50 43,890.23 0.01% -60,922.27
SLHOPNTA4
SEC ID:99WAEU30
JP MORGAN CP REP REPO 100.0000 103,900,000.000 103,900,000.00 103,900,000.00 19.83% 0.00
0.000% 10/01/2014 DD 09/29/14
SEC ID:99ZALP9K1
JP MORGAN CP REP REPO 100.0000 104,000,000.000 104,000,000.00 104,000,000.00 19.85% 0.00
0.050% 10/02/2014 DO 09/30/14
SECID:99ZALQB67
TOTAL cABe a cABe EQONALssrs 389,672,686.410 186,912,413.43 286,851,843.16 54.75% -60,570.27
FmD INCOME SECURITIES
AFLAC INC 102.4760 500,000.000 499,630.00 512,380.00 0110% 12,750.00
3.450%08/15/2015 DD 08/09/10
SEC ID:001055AE2
AMERICAN EXPRESS CO 116.4280 2,900,000.000 3,377,385.79 3,376,412.00 0.64% -973.79
7.000%03/19/2018 DD 03/19/08
SEC ID:025816AY5
AMERICAN INTERNATIONAL GROUP I 122.1450 300,000.000 385,214.67 366,435.00 0.07% -18,799.67
8.250%08/15/2018 DD 02/15/09
SEC ID:026874BT3
AMERICAN MUM MR-OHIO INC OH 132.5230 1,300,000.000 1,337,284.00 1,722,799.00 0.33% 385,515.00
7.734%02/1512 033 DD 12/21/10
SEC ID:02I65UEH3
"GEN INC 103.5270 1,300,000.000 1,318,052.00 1,345,851.00 0.260% 27,799.00
3.450% 10/0112 020 DD 09/16/10
SEC ID:031162BD1
AMRESCO RESIDENTIAL SECURI I A 92.1150 133,743.290 100,432.85 123,197.63 0.02% 22,764.78
VAR RT 06/25/2029 DD 10/20/99
SEC ID:03215PFN4
101812014 6:22:38PM EDT 3 Workbench
Asset Detail Report ID: GL8013
�' Ba..Curteney: LED
BNY ME LLON by Currency Ahetnate Be..Curt.nU:
Exchange Rate:
OCW CONSOLIDATED-OCSG00030000 9/30/2014 Statue: FINAL
Net Unrealized
Price Cost Market Value % of Gain/Loss
Description Base Shares Par Base Base Total Base
ANHEUSER-BUSCH INBEV 101.0660 1,075,000,000 1,101,982,50 1,086,459.50 0,21% -15,523.00
WORLDWIDE
4.125%01/15/2015 DD 10/16/09
SEC ID:03523TAM0
BANK OF AMEMCA CORP 111.2700 3,800,000.000 4,334,014.00 4,228,260.00 0.81% -105,T54.00
5.750% 12/01/2017 DD 12/04/07
SEC ID:060505DM
BANK OF AMERICA NA 100.0240 600,000.000 600,000.00 600,144.00 0.11% 144.00
VAR RT 05/08/2017 DD 05/08/14
SEC ID:06050TLX8
BANK OF AMERICA CORP 120.8060 500,000.000 619,600.00 604,030.00 0.12% -15,570.00
7.625%06/01/2019 DD 06/02/09
SEC ID:06051GDZ9
BANK OF AMEMCA CORP 101.9110 200,000.000 206,082.00 203,822.00 0.04% -2,260.00
4.125%01/22/2024 DD 01/21/14
SECID:06051GFBO
BANK OF NEW YORK MELLON 100.2700 1,120,000.000 1,127,224.00 1,123,024.00 0,21% -4,200.00
CORP/T
1.200%02/20/2015 DD 02/21/12
SEC ID:06406HCC1
BAY AREA CA TOLL AUTH TOLL BRI 124.9530 1,300,000.000 1,300,000.00 1,624,389.00 0.31% 324,389.00
6.793%04/0112 030 DD 07/01/10
SEC ID:072024NT5
BEAR STEARNS COS LLC/THE 109.0640 3,200,000.000 3,523,520.00 3,490,048.M 0.69% -33,472.00
4.650%07/0212018 DD 06/25/03
SEC ID:093902CD8
CALIFORNIA ST 140.4320 1,500,000.000 1,509,825.00 2,106,480.00 0.40% 596,655.00
7.350% 11/0112 039 DD 11/10/09
SEC ID: 13063BBU5
CITIGROUP INC 100.1860 134,000.000 142,384.04 134,249.24 0.03% -8,334.80
5.500% 10/15/2014 DD 09/24/09
SEC ID: 172967EM
CITIGROUP INC 101.5760 1,040,000.000 1,077,710.40 1,056,390.40 0.20% -21.320.00
6.010%01/15/2015 DD 12/15/09
SEC ID: 172969FA4
CITIGROUP INC 100.5160 200,000.000 198,352.00 201,032.00 0.04% 2,680.00
1.250%01/15/2016 DD 01/10/13
SEC ID: 172967000
CREDIT SUISSE USA INC 101.2660 1,135,000.000 1,168,832.15 1,149,369.10 0.22% -19,463.05
4.875%01/15/2015 DD 12/15/04
SEC ID:22541LAR4
DOMINION RESOURCES INC/VA 109.4120 1,697,000.000 1,983,941.61 1,856,721.64 0.35% -127,219.97
5.600% 11/15/2016 DD 11/14/06
SEC ID:25746UBB4
101812014 6:22:38PM EDT 4 Workbench
Asset Detail Report ID: GL8013
�' Base CurteaeF: LED
BNY ME LLON by Currency Altente Be..Cartency:
Exchange Rate:
OCSW CONSOLIDATED-OCSW0030000 9/30/2014 Statue: FINAL
Net Unrealized
Price Cost Market Value % of Gain/Loss
Description Base Shares Par Base Base Total Base
EMERSON ELECTRIC CO 100.9640 1,096,000A00 1,126,775,68 1,106,565,44 0.21% -20,210.24
5.000% 12/15/2014 DO 12/11/02
SECID:291011AS3
FHLMC MULTICLASS MTG E3 A 104.2860 100,223.150 100,327.98 104,518.71 0,02% 4,190.73
VAR RT OS/15/2032 DO 12/01/97
SEC ID:3133WE95
FHLMC POOL#78-6064 100.5900 2,892.390 2,821.90 2,909.46 0.00% 87.56
VAR RT 01/01/2028 DO 12/01/97
SEC ID:31348SWZ3
FNMA POOL#0257179 107.9530 57,376.820 60,681.59 61,940.00 0.01% 1,258.41
4.500%04/01/2028 DO 03/01/08
SEC ID:31371NUC1
FNMA POOL#0357969 110.6200 333,212.440 358,203.38 368,599.60 0.07% 10,396.22
5.000%09/01/2035 DO 09/01/05
SEC ID:31376=2
FNMA POOL#0466397 105.1160 376,089.080 367,950.28 395,329.80 0.08% 27,379.52
3.400% 11/0112 020 DO 11/01/10
SEC ID:3138IPDA3
FNMA POOL#0AL0869 107.9530 35,612.860 31,664.10 38,445.15 0.01% 781.05
4.500%06/0112 029 DO 09/01/11
SEC ID:3138EG6F6
FHLMC MULTICLASS MTG 58 2A 113.2680 1,253,981.230 1,420,133.72 1,420,359.46 0.27% 225.74
6.500%09/25/2G43 DD 09/01/03
SEC ID:31394 35
FNMA GTD REMIC P/T07-114 A6 99.7950 200,000.000 190,250.00 199,590.00 0.04% 9,340.00
VARRT 10/27/2037DD11/30/07
SEC ID:3139(M3QS
FNMA GTD REMIC P/T 11-3 FA 101.2400 662,714.360 662,307.27 670,932.02 0.13% 8,424.75
VAR RT 02/25/2041 DO 01/25/11
SEC ID:31397QRE0
FNMA GTD REMIC P/T 10-MI Al 102.3160 420,085.470 436,101.24 429,814.65 0.08% -6,286.59
3.305%06/25/2019 DD 02/01/10
SEC ID:31398MGL4
FHLMC MULTICLASS MTG K006 A2 109.3600 900,000.000 951,046.88 984,240.00 0.19% 33,193.12
4.251%01/25/2020 DO 04/01/10
SEC ID:31398VJ98
FNMA POOL#0745580 110.5360 311,560.860 334,927.91 344,386.91 0.07% 9,459.00
5.000%06/01/2036 DO 05/01/06
SEC ID:31403Wn
FNMA POOL#0748678 110.5930 9,399A60 10,104.41 10,395.14 0.00% 290.73
5,000% 10/01/2033 DD 10/01/03
SEC ID:31403GXF4
101812014 6:22:38PM EDT 5 Workbench
Asset Detail Report ID: GL8013
�' Ba..CurteneF: LED
BNY ME LLON by Currency Alternate Be..Currency:
Exchange Rate:
OCSW CONSOLIDATED-OCSG00030000 9/30/2014 Statue: FINAL
Net Unrealized
Price Coat Market Value % of Gain/Loss
Description Base Shares Par Base Base Total Base
FNMA POOLk0815971 110.6260 624,403,370 671,233,62 690,452A7 0.13% 19,518,75
5,000%03/01/2035 DD 03/01/05
SEC ID:31406PQY8
FNMA POOL#0823358 107.5180 242,223A80 240,331.61 260,579.71 0.05% 20,248.10
VAR RT 02/01/2035 DD 04/01/05
SEC ID:31406XWT5
FNMA POOLk0826080 110.4730 58,213.500 62,579.51 64,310.20 0.01% 1,730.69
5.000%07/01/2035 DD 06/01/05
SEC ID:31407BXH9
FNMA POOLb0888336 110.5160 631,726.820 679,106.32 698,159.21 0.13% 19,052.89
5.000%07/01/2036 DD 04/01/07
SEC ID:31410F4V4
FNMA POOL bOMA0022 107.9530 58,250.730 61,605.83 62,883.41 0.01% 1,277.58
4.500%04/01/2029 DD 03/01/09
SEC TO 3141TFAY3
GNMA lI POOL#0080023 103.0970 33,662.790 34,220.33 34,705.33 0.01% 485.00
VAR RT 12/20/2026 DD 12/01/96
SEC TO 36225CAZ9
GNMA lI POOL F080088M 104.1260 39,878.580 40,750.95 41,523.97 0.01% 773.02
VAR RT 06/20/2027 DD 06/01/97
SEC ID:36225CC20
GNMA II POOL F080408X 103.2580 120,278.520 119,056.95 124,197.19 0.02% 5,140.24
VAR RT 05/20/203ODD05/01/00
SEC ID:36225CN28
GNMA II POOL#0080395 103.2610 14,394.670 14,264.21 14,864.08 0.00% 5W87
VAR RT 04/20/203ODD04/01/00
SEC ID:36225CNM4
GNMA II POOL#0080965 103.9480 121,917.710 121,841.52 126,731.02 0.02% 4,889.50
VAR RT 07/20/2034 DO 07/01/04
SEC ID:36225DCB8
GOLDMAN SACHS GROUP INC/THE 100.2150 2,000,000A00 1,895,068.00 2,004,30000 0,38% 109,232.00
VAR RT 03/22/2016 DO 03/22/06
SECID:38141GEG5
GOLDMAN SACHS GROUP INC/THE 111.9490 600,000.000 692,806.00 691,694.00 0,13% -21,112.00
5.950%01/18/2018 DO 01/18/09
SECID:38141GFG4
GOLDMAN SACHS GROUP INC/THE 99.2680 5,000,000.000 5,007,200.00 4,963,40000 0.95% -43,800.00
3.625%01/22/2023 DO 01122/13
SECID:38141GRD8
GNMA GM REMIC P/T 00-9 FH 100.7980 66,486.830 66,486.83 67,017.39 0.01% 530.56
VAR W 02/16/2030
SEC ID:3837H4NX9
101812014 6:22:38PM EDT 6 Workbench
Asset Detail Report ID: GL8013
�' Base Curteaey: LED
BNY ME LLON by Currency Alternate Base Currency:
Exchange Rate:
OCSD CONSOLIDATED-OCSW0030000 9/30/2014 Statue: FINAL
Net Unrealized
Price Cost Market Value % of Gain/Loss
Description Base Shares Par Base Base Total Base
ILLINOIS ST TOLL HIGHWAY AUTH 106.5340 2,500,000.000 2,464,750,00 2,663,350.00 0.51% 198,600.00
5.293%01/01/2024 DO 05/21/09
SEC ID:452252FJ3
JPMORGAN CHASE&CO 100.6820 1,100,000.000 1,112,672.00 1,107,502.00 0.21% -5,170.00
1.895%03/20/2015 DO 03/21/12
SEC ID:46623EJP5
JPMORGAN CHASE&CO 115.9930 100,060.000 112,124.00 115,993.00 0.02% 3,869.00
6.300%04/23/2019 DO 04/23/09
SEC ID:46625HHL7
JPMORGAN CHASE&CO 107.7450 1,000,000.000 1,104,074.00 1,099,450.00 0.21% -26,624.00
4.400%07/22/2020 DO 09/22/10
SEC ID:46625HHS2
JPMORGAN CHASE&CO 106.6920 500,000.000 499,876.00 533,460.00 0.10% 33,584.00
4.250% 10/15/2020 DO 10/21/10
SEC TO 46625HHU9
JPMORGAN CHASE&CO 103.5630 500,000.000 506,326.00 517,815.00 0.10% 11,489.00
3.450%03/01/2016 DO 02/24/11
SEC TO 46625HHX1
JPMORGAN CHASE&CO 103.4638 300,000.000 299,658.00 310,391.35 0.06% 10,733.35
3.150%07/05/2016 DO 06/29/11
SEC ID:46625HJA9
JPMORGAN CHASE BANK NA 111.8060 1,100,000.000 1,302,565.00 1,229,866.00 0.23% -72,699.00
6.000% 10/01/2017 DO 09/24/07
SEC ID:48121CYK6
LEHMAN SETH HLD ESC 20.1250 2,000,000.000 1,459,687.31 402,500.00 0.08% -1,057,187.31
0.000% 12/30/2016 DD 10/24/05
SEC ID:525ESCOY6
ESC LEHMAN BRTH HLD ESCROW 20.3750 600,000.000 434,594.41 122,250.00 0.02% -312,344.41
0.000%01/24/2013 DD 01/22/08
SEC ID:525ESCIB7
MASSACHUSETTS ST PORT AUTH FAC 115.3120 1,300,000.000 1,300,000.00 1,499,05&00 0,29% 199,056.00
6.202%07/01/2031 DD 06/15/11
SEC IT, 575898CS8
MERRILL LYNCH&CO INC 116.8270 2,800,000.000 3,417,664.00 3,291,15&00 0,62% -146,508.00
6.895% 11/15/2018 DD 11/24/98
SEC IT, 590188JN9
MET TRANSPRTN AWH NY REVENUE 136.8440 300,000.000 311,316.00 410,532.00 0.08% 99,216.00
6.814% I1/15/2U40 DD 12/29/10
SEC IT, 59259YGM
MORGAN STANLEY 112.6300 5,600,000.000 6,401,696.00 6,307,280MO 1,20% -94,416.00
5.500%07/28/2021 DD 07/28/11
SEC ID:6174TWAL3
101812014 6:22:3SPM EDT 7 Workbench
Asset Detail Report ID: GL8013
�' Ba..Curteney: LED,
BNY ME LLON by Currency Alternate Be..Cutt.nU:
Exchange Rate:
OCW CONSOLIDATED-OCSG00030000 9/30/2014 statue: FINAL
Net Unrealized
Price Cost Market Value % of Gain/Loss
Description Base Shares Par Base Base Total Base
MORGAN STANLEY 103.0810 700,000.000 737,361,00 921,569.00 0.14% -15,994.00
6,000%04/28/2015 DD 04/28/08
SEC ID:61747YCE3
NCUA GUARANTEED NOTES TR R2 IA 100.2100 682,825.010 682,821.91 684,258.94 0.13% 1,437.03
VARRT 11/06/2017DDll/17/10
SEC ID:62888UAA8
NCUA GUARANTEED NOTES TR C1 Al 100.3400 352,878.220 353,787.99 354,078.01 0.07% 290.02
1.600% 10/29/2020 DD 11/10/10
SEC ID:62888XAA2
NEW JERSEY ST TURNPIKE AUTH 143.2190 1,500,000.000 1,634,565.00 2,148,285.00 0.41% 513,720.00
7.414%01/01/2040 DD 04/28/09
SEC ID:646139W35
NEW YORK NY 118.4800 1,300,000A00 1,373,502.00 1,540,240.00 0.29% 166,738.00
5.698%03/01/2027 DD 03/30/10
SEC ID:64966HYK0
NEW YORK CITY NY TRANSITIONAL 108.5540 1,400,000.000 1,400,000.00 1,519,756.00 0.29% 119,756.00
4.075% 11/01/2020 DD 11/03/10
SEC ID:64971M5E8
PEPSIAMERICAS INC 101.2690 1,075,000.000 1,107,999.09 1,088,641.75 0.21% -19,337.34
4.875%01/15/2015 DD 01/10/05
SEC ID:71343PAA9
PHILIP MORRIS INTERNATIONAL IN 113.0950 1,600,000.000 1,854,144.00 1,809,520.00 0.35% -44,624.00
5.650%05/16/2018 DD 05/16/08
SEC ID:718172AA7
PORT AUTH OF NEW YORK&NEW JE 115.3290 2,440,000.000 2,507,633.89 2,814,02Z60 0.54% 306,393.71
5.309% 12/01/2019 DD 07/01/09
SEC ID:73358WAG9
PRAXAIR INC 102.1090 672,000.000 697,247.04 686,172.48 0.13% -11,074.56
4.625%03/30/2015 DD 03/07/08
SEC ID:]4005PAR5
SLM STUDENT LOAN TRUST 2009 A 103.6440 52,247.280 52,035.30 54,15117 0,01% 2,115.87
VAR RT 04/25/2023 DD 08/28/08
SEC ID:78445JAA5
SIMON PROPERTY GROUP LP 108.9290 1,000,000.000 996,050.00 1,089,290.00 0,21% 93,240.00
4.375%03/01/2021 DD 08/16/10
SEC ID:828807CF2
SBA GTD PARTN CTFS 2001-20C 1 107.6100 178,711.650 178,711.65 192,31 L61 0.04% 13,599.96
6.340%03/01/2021
SEC ID:83162CWO
SOUNDVIEW HOME LOAN TR OPTS A4 99.0600 240,657.100 212,455.11 238,394.92 0.05% 25,939.81
VARRT 11/25/2035DD09/30/05
SEC ID:83611MGS1
101812014 6:22:38PU EDT $ Workbench
Asset Detail Report ID: GL8013
�' Ba..Curteaey: LED
BNY ME LLON by Currency Ahetmte Be..Curt.nU:
Exchange Rate:
OCSD CONSOLIDATED-OCSW0030000 9/30/2014 Statue: FINAL
Net Unrealized
Price Coat Market Value % of Gain/Loss
Description Base es Par Base Base Total Base
SOUTHERN CO/THE 101.6800 1,000,000.000 999,810,00 1,016,800.00 0.19% 16,990.00
2,375%09/15/2015 DO 09/17/10
SEC ID:842587CGO
TEXAS ST TRANSPRTN COMMISSION 115.0460 1,200,000.000 1,200,000.00 1,380,552.00 0.26% 180,552.00
5.028%04/01/2026 DD 08/05/10
SEC ID:88283LHT6
TOYOTA MOTOR CREDIT CORD 100.3590 5,200,000.000 5,200,000.00 5,218,668.00 1.00% 18,668.00
VAR RT 05/17/2016 DD 05/17/13
SEC ID:89236TAKI
U S TREASURY NOTE 100.0510 3,500,000.000 3,500,340.41 3,501,785.00 0.67% 1,444.59
VAR RT 04/30/2016 DD 04/30/14
SEC ID:9I2828D31
U S TREASURY NOTE 99.8980 25,800,000A00 25,794,960.94 25,773,684.00 4.92% -21,276.94
0.500%08/31/2016 DD 08/31/14
SEC TO 9I2828D64
U S TREASURY NOTE 100.1480 3,594,000A00 3,603,596.33 3,599,319.12 0.69% -4,277.21
0.375%03/15/2015 DD 03/15/12
SEC ID:9I2828SK7
US TREAS-CPI INFLAT 97.6170 3,315,360.000 3,322,802.82 3,236,354.97 0.62% -86,447.85
0.125%07/15/2022 DD 07/15/12
SEC ID:912828TEO
U S TREASURY NOTE 98.8440 1,500,000.000 1,479,609.38 1,482,660.00 0.28% 3,030.62
2.000%05/31/2021 DD 05/31/14
SEC ID:912828WN6
U STREASURY NOTE 99.4690 52,900,000.000 52,816,985.09 52,619,101.00 10.04% -197,884.09
1.625%06/30/2019 DO 06/30/14
SEC ID:9I2828WS5
US TREAS-CPI INFLATION INDEXED 96.0080 14,549,300.000 14,385,992.45 13,968,491A4 2.67% -417,280.51
0.125%09/15/2024 DO 09/15/14
SEC ID:912828WU0
U S TREASURY NOTE 99.3750 38,600,000.000 38,695,640.75 38,358,750.00 7.32% -336,890.75
1.625%07/31/2019 DD 07/31/14
SEC ID:9I2828W W6
UNITEDHEALTH GROUP INC 102.0220 1,050,000.000 1,089,927.68 1,091,231.00 0,20% -18,696.68
4.895%03/15/2015 DD 03/07/05
SEC ID:91324PAM4
UNIV OF CALIFORNIA CA ROTS MED 111.8330 400,000.000 400,000.00 447,332.00 0.09% 47,332.00
5.035%05/15/2021 DO 11/18/10
SEC ID:913366E.I5
WACHOVIA BANK NA 101.4280 1,084,000.000 1,118,110.30 1,099,479.52 0,21% -18,630.78
4.875%02/01/2015 DO 01/31/05
SEC ID:92976GAD3
101812014 6:22:38PM EDT 9 Workbench
Asset Detail Report ID: GL8013
�' Base Curtency: LED
BNY ME LLON by Currency Alternate Base Currency:
Exchange Rate:
OCSD CONSOLIDATED-OCSGOOOl0O00 9/30/2014 Statue: FINAL
Net Unrealized
Price Cost Market Value % of Gain/Loss
Description Base Shares Par Base Base Total Base
WELLS FARGO HOME EQUITY 2 AI6 100.6970 71,800.220 71,261.71 72,300.67 0.01% 1,038,76
VAR RT 10/25/2034 DD 09/01/04
SEC ID:94980GAG6
WELLS FARGO BANK NA 100.3150 6,300,000.000 6,297,795.00 6,319,845.00 1.21% 22,050.00
0.750%07/20/2015 DD 09/29/13
SEC ID:94985H5F9
WELLS FARGO BANK NA 99.9450 500,000MOO 500,000.00 499,725.00 0.10% -275.00
VAR RT 06/15/2017 DD 06/12/14
SEC ID:949SW2IA
TOTAL FTKED INCOME SECURITIES 232,764,308.390 236,669,644.59 237,050,012.88 45.2s% 380,368.29
TOTAL ASSETS U.S.DOLLAR 622,436,794.900 523,582,058.02 523,901,856.04 100.00% 319,798.02
TOTAL ASSETS-BASE: 622,436,794.800 523,582,058.02 523,901,866.04 100.00Y. 319,798.02
101812014 6:22:38FM EDT 10 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON RaseCarrena,: USD
OCSD-CONSOMDATED 9/1/2014 - 9/30/2014
OCSGo0010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
9/2/2014
U.S.DOLLAR(USD)
FREE RECEIPT-SD
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 8/29/2014 192.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 01-SEP-2014 FACTOR OF 8/29/2014 0.ONO 0.00
9/2/2014 0.00 0.00
1.03644 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142450007312
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 8/29/2014 870.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 01-SEP-2014 FACTOR OF 8/29/2014 000000.00
9/2/2014 0..00 0.00
1.00398 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142450007313
SEC ID:912828WUO REG:FRB
Total FREE RECEIPT-BD(21 Total Principal: 0.00
Total Commission: 0.00
Total I.e..: 0.00
Total Net 0.00
RECEIVE VS PAY-BUY
UNITED STATES TREASURY BILL DTD 04/10/20140.000%10/09/2014 8/29/2014 2,000,000,000 -1,999,958.89
TRADING BROKER:DEUTSCHE BE SECS INC,NY NWSCUS33)00000573 9/2/2014 99.9979 0.00
( 9/2/2014 0.00 0.00
CLEARING BROKER:DEUTSCHE BE SECS INC,NY)NWSCUS33)00000573 0.00 -1,999,958.89
CMS REF: 1142410203302 CLIENT REF:000060300022414
SEC ID:912796DZ9 REG:FEB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 8/29/2014 21,000,049.030 -21,000,049.03
OS/29/2014 0.0900% 9/2/2014 100.0000 0.00
9/2/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -21,000,049.03
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142410205229 CLIENT REF:000020300060871
SEC ID:99ZALKUV4 REG:REPO
101812014 6:24:19PM EDT 1 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ba.Carrent,: USD
OCSO-CONSOLIDATED 9/1/2014 - 9/30/2014
oCsc000l0000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 8/29/2014 11,700,000.000 -11,700,000.00
08/29/2014 0.0900% 9/2/2014 100.0000 0.00
9/2/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -1I,900,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142410205242 CLIENT HER 000060300022413
SEC TO 99ZALKUV4 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTI) 8/29/2014 49,099,950.970 -49,099,950.97
08 29 2014 0.0900% 9/2/2014 100.0000 0.00
/ / 9/2/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -49,099,950.97
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142410205451 CLIENT REF:000020300060870
SECID:99ZALKUV4 REG:REPO
Total RECEIVE YS PAY-BUY(4( Total Principal: -83,799,958.89
Total Commission: 0.00
Total Income: 0.00
Total Net: -83,799,958.89
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/2/2014 -32A00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 02-SEP-2014 FACTOR OF 9/2/2014 0.0 0.00
9/2/2014 0..00 00 0.00
1.03643 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142450058102
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/2/2014 -290.MO 0.00
TO BRING ACCOUNT INTO BALANCE WITH 02-SEP-2014 FACTOR OF 9/2/2014 0.0 0.00
9/2/2014 0..00 00 0.00
1.00396 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142450058104
SEC ID:912828W O REG:FRB
Total DELVER FREE-SW(2( Total Principal: 0.00
Total Comrniceion: Mw
Total Income: null
Total Net: 0.00
DBLIVBR VS PAY-MT
101812014 6:24:19PM EDT 2 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Easecavener: UNIT)
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG0001MIX)
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL HOME LN MTG CORP DISC NT DTD 09/03/2013 0.000% 9/2/2014 -29,200,000.000 29,194,667.3I
09/02/2014 9/2/2014 100.0000 0.00
9/2/2014 0.00 2,332.63
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 0.00 29,200,000.00
29,200,000.000
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142419000363
SEC ID:313397E31 REG:FRB
UNITED STATES TREASURY NOTE DID 08/31/2012 0.250%08/31/2014 9/2/2014 -2,000,000.000 2,000,000.00
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 9 100.0 0.00
9//2/2014 2/2014 0..00 00 0.00
2,000,000.000 0.00 2,000,000.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROEER TRADE,BOSTON 00009999
CMS REF: 1142419001347
SEC ID:912828171,1 REG:FEB
UNITED STATES TREASURY NOTE DTD 08/31/2012 0.250%08/31/2014 9/2/2014 -4,400,000,000 4,400,000.00
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 9/2/2014 100.0000 0.00
9/2/2014 0.00 0.00
4,400,000.000 0.00 4,400,000.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142419001348
SEC ID:912828TLt REG:FEB
Total DELIVER VS PAY-MT(3) Total Principal: 35,597,667.37
Total Commission: 0.00
Total Income: 2,332.63
Total Net: 35,600,000.00
DELIVER VS PAY-PD
SMALL BUSINESS ADMIN GM DEV PARTN CTF SER 2001-20C 1 6.340% 9/2/2014 -40,626.600 40,626.60
RECD PRINT AMORT FOR AUGUST RECD TNT FOR AUGUST ON 219,338.25 9/2/2014 100.0000 0.00
9/2/2014 0.00 6,953.02
UNITS 0.00 47,579.62
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142450001543
SEC ID:83162CWO REG:DTC
DELIVER VS PAY-MIX
101812014 6:24:19PM EDT 3 Workbench
i� Custody Transaction History Report ID: CUA356
BNY MELLON Ba.Carrener: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSGOo01MIX)
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Set Local Amount
JP MORGAN CORPORATE REPURCHASE AGREEMENT DTD 08/28/2014 9/2/2014 -36,400,000.000 36,400,000.00
0.0800% 9/2/2014 100.0000 0.00
9/2/2014 0.00 323.56
CLOSE FOR 1142400180033 0.00 36,400,323.56
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142450000085
SEC ID:99ZALKL28 REG:REPO
JP MORGAN CORPORATE REPURCHASE AGREEMENT DTD 08/28/2014 9/2/2014 -11,700,000,000 11,700,000.00
0.0800% 9/2/2014 100.0000 0.00
9/2/2014 0.00 ]04.00
CLOSE FOR 1142400180201 0.00 11,900,104.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142450000123
SEC ID:99ZALU28 REG:REPO
Total DELIVER VS PAY-BELL(2) Total Principal: 48,100,000.00
Total Coramiadov: 0.00
Total Income: 427.56
Total Net 48,100,427.56
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/2/2014 2,645AI0 -2,645.11
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/2/2014 0.0 0.00
9/2/2014 0..00 00 0.00
CMS REF: 1142450648444 0.00 -2,645.11
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/2/2014 20,940.180 -20,940.18
BOUGHT DREYFUS TREAS 8:AGY CSH MGT 521 INC 9/2/2014 0.0000 0.00
9/2/2014 0.00 0.00
CMS REF: 1142450648445 0.00 -20,940.18
SEC ID:996085247 REG:05
Total MARGIN RELEASE-BUY(2) Total Peft eipal: -23,585.29
Total Commission: 0.00
Total Income: 0.00
Total Net: .23,585.29
FOREIGN HOLDER RELEASE-CD
JPMORGAN CHASE EE CO SR UNSECURED 9/2/2014 0.000 0.00
REG INT ON 500000.000 UNITS PAY 09/02/14 RATE.0192500000 9/2/2014 0.0 .00
9/2/2014 0..00 00 8,625.00
CMS REF: 1142450023943 0.00 8,625.00
SEC ID:46625HHX1
101812014 6:24:19PM EDT 4 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON So.CaneneP: USD
OCSACONSOLIDATED 9/1/2014 - 9/30/2014
OCSGD0ol0000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
NEW YORK NY BUILD AMERICA BONDS 9/2/2014 0000 0.00
REC INT ON 1300000.000 UNITS PAY 09/02/14 RATE G284900000 9/2/2014 0.0000 0.00
9/2/2014 0.00 37,037.00
CMS REF: 1142450023946 0.00 37,037.00
SEC ID:64966HYK0
SIMON PROPERTY GROUP LP SR UNSECURED 9/2/2014 0.000 0.00
REC INT ON 1000000.000 UNITS PAY 09/02/14 RATE.0218950000 9/2/2014 0.0000 0.00
9/2/2014 0.00 21,875.00
CMS REF: 1142450023940 0.00 21,875.00
SEC ID:828807CF2
UNITED STATES TREASURY NOTE DTD 08/31/20120.250%08/31/2014 9/2/2014 0.000 0.00
REC INT ON 2000000.000 UNITS PAY 09/02/14 RATE.0012500000 9/2/2014 0.0 0.00
9/2/2014 0..00 00 2,500.00
CMS REF: 1142450023934 0.00 2,500.00
SEC ID:9I2828TL4
UNITED STATES TREASURY NOTE DTD 08/31/2012 0.250%08/31/2014 9/2/2014 (LOGO 0.00
00
REC INT ON 4400000,000 UNITS PAY 09/02/14 RATE.0012500000 9/2/2014 0.0 0
9/2/2014 0..00 00 5,500G.0O
CMS REF: 1142450023937 0.00 5,500.00
SEC ID:9I2828TL4
Total FOREIGN HOLDER RELEASE-CD(51 Total Principal: 0.00
Total Commission: 0.00
Total Income: 75,537.00
Total Net: 75,537.00
Total U.B.DOLLAR(USD)(21( Total Principal: -85,250.21
Total Comvniaaon: 0.00
Total Income: $5,250.21
Total Net: 0.00
9/3/2014
U.S.DOLLAR(USD(
RECEIVE VS PAY-BUV
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/2/2014 49,(149,791.490 -49,049,791.49
9/3/2014 100.0000 0.00
09/02/2014 0.0900% 9/3/2014 OGO 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -49,049,791.49
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142460090807 CLIENT REF:000020300060944
SEC ID:99ZALK6J8 RED:REPO
101812014 6:24:19PM EDT 5 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ea.Cunencr: USD
OCSD-CONSOMDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/2/2014 21,050,208.510 -21,050,208.51
09/02/2014 0.0900% 9/3/2014 100.0000 0.00
9/3/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -21,050,208.51
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142460091555 CLIENT HER 000020300060945
SEC TO 99ZALK6,18 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT BTD 9/2/2014 11,700,000.000 -11,700,000.00
09 02 2014 0.0900% 9/3/2014 100.0000 0.00
/ / 9/3/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142460091581 CLIENT REF:000060300022429
SECID:99ZALK608 REG:REPO
Total RECEIVE YS PAY-xUY(3) Total Principal: -81,800,000.00
Total Commission: 0.00
Total Income: 0.00
Total Net: -81,800,000.00
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/3/2014 -64.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 03-SEP-2014 FACTOR OF 9/3/2014 0.0 0.00
9/3/2014 0..00 00 0.00
1.03641 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142460009071
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/3/2014 -145.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 03-SEP-2014 FACTOR OF 9/3/2014 0.0 0.009/3/2014 0..00 00 0.00
1.00395 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142460009073
SEC ID:912828W O REG:FRB
Tote)DELIVER FREE-SW(2) Total Principal: O.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-SELL
101812014 6:24:19PM EDT 6 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ba.Canenc : USD
WC CONSOMDATED 9/1/2014 - 9/30/2014
OCBGOOOl00oo
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT LOU 9/3/2014 -21,000,049.030 21,000,049.03
08/29/2014 0.0900% 9/3/2014 100.0000 0.00
9/3/2014 0.00 52.50
CLOSE FOR 1142410205229 0.00 21,000,10L53
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142460000029
SEC ID:99ZALKUV4 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/3/2014 -11,700,000,000 11,700,000.00
08/29/2014 OM900% 9/3/2014 100.0000 0.00
9/3/2014 0.00 29.25
CLOSE FOR 1142410205242 0.00 11,700,029.25
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142460000035
SEC ID:99ZALKW4 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/3/2014 -49,099,950.970 49,099,950.97
9/3/2014 100.0000 0.00
08/29/2014 0.0900% 9/3/2014 0.00 122.75
CLOSE FOR 1142410205451 0.00 49,100,073.72
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142460000095
SEC TO 99ZALKW4 REG:REPO
Total DELIVER VS PAY-SELL(3) Total Principal: 81,800'"0.00
Total Co—iaaion: 0.00
Total Income: 204.50
Total Net: 81,800,204.50
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/3/2014 33.910 -33.91
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/3/2014 0.0 0.00
9/3/2014 0..00 00 .9
CMS REF: 1142460665758 0.00 -33.91
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/3/2014 183.760 -183.76
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/3/2014 0.0 0.00
9/3/2014 0..00 00 .00
CMS REF: 1142460685759 0.00 -18396
SEC ID:996085247 REG:05
101812014 6:24:19PM EDT 7 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON So.Carrenc : USD
OCSACONSOLMATED 9/1/2014 - 9/30/2014
OCSGOoOIO000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total MARGIN RELEASE-BUY(2) Total Principal: -217.67
Total commission: 0.00
Total Income: 0.GO
Total Net: -217.67
FOREIGN HOLDER RELEASE-CD
DREYFU THE AGY CSH MGT 5211NC FUND 9/3/2014 0.000 0.00
RECEIVED INTEREST DREYFU THE AGY CSH MGT 521 INC FUND 9/3/2014 0.0000 0.00
9/3/2014 0.00 4.66
CMS REF: 1142460023848 0.00 4.66
SEC ID:996085247
DREYFU THE AGY CSH MGT 5211NC FUND 9/3/2014 (IM00 0.00
RECEIVED INTEREST DREYFU THE AGY CSH MGT 5211NC FUND 9/3/2014 0.0 .
9/3/2014 0..00 800 .5151
CMS REF: 1142460023849 0.00 8.51
SEC ID:996085247
Told FOREIGN HOLDER RELEASE-CD(2) Total Principal: 0."
Total Commission: 0."
Total Income: 13.17
Total Net: 13.17
Total U.S.DOLLAR(USD)(12) Total Principal: -217.67
Total Commisalon: 0.00
Total Income: 217.67
Total Net: 0.00
9/4/2014
U.S.DOLLAR(USD)
RECEIVE VS PAY-BUY
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/3/2014 33,450,082.050 -33,450,082.05
09 03 2014 OM900% 9/4/2014 100,0000 0.00
/ / 9/4/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -33,450,082.05
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142470056206 CLMNT REF:000020300060949
SEC ID:99Z LLF49 REG:REPO
101812014 6:24:19PM EDT 8 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ba.Canencr: USD
ocBD-CONSOMDATED 9/1/2014 - 9/30/2014
OCBG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Set Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/3/2014 8,300,000.000 -8,300,000.00
09/03/2014 OM900% 9/4/2014 100.0000 0.00
9/4/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -8,300,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142470056239 CLIENT HER 000060300022432
SEC ID:99Z 1,149 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/3/2014 49,049,917.950 -49,049,9IT95
09/03/2014 0.0900 0 9/4/2014 100.0000 0.00
9/4/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -49,049,9IT95
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142470056329 CUE" REF:000020300060948
SEC ID:99ZALLF49 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/3/2014 3,400,000.000 -3,400,000.00
09/03/2014 0.0900Y 9/4/2014 100.0000 0.00
9/4/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -3,400,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142470056338 CLIENT HER 000060300022431
SEC ID:99ZALLF49 REG:REPO
Total RECEIVE VS PAY-BUY(4( Total Principal: -94,200,000.00
Total Cotnmiaslon: 0.00
Total Income: 0.00
Total Net: -94,200,000.00
DELIVER FREE-BW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/4/2014 -32.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 04-SEP-2014 FACTOR OF 9/4/2014 0.0000 0.00
9/4/2014 0.00 0.00
1.0364 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS HER 1142470011363
SEC ID:912828TEO REG:FRB
101812014 6:24:19PM EDT 9 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ea.Cavener: USD
OCBD-CONSOMDATED 9/1/2014 - 9/30/2014
OCBo00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/4/2014 -145M00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 04-SEP-2014 FACTOR OF 9/4/2014 0.0000 0.00
9/4/2014 0.00 0.00
1.00374 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142470011364
SEC ID:91282SWUO REG:FRB
Total DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-MT
FEDERAL HOME LN BK CONS DISC NT DTD 09/04/2013 0.000% 9/4/2014 -12,400,000.000 12,398,987.33
09/04/2014 9/4/2014 100.0000 0.00
9/4/2014 0.00 1,012.67
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 0.00 12,400,000.00
12,400,000.000
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142469000199
SEC ID:313385E51 REG:FRB
DELIVER VS PAY-SELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/4/2014 -49,049,791.490 49,049,791.49
09/02/2014 0.0900% 9/4/2014 100.0000 0.00
9/4/2014 0.00 122.62
CLOSE FOR 1142460090807 0.00 49,049,914.11
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142470000270
SEC ID:99ZALKW8 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/4/2014 -21,050,208.510 21,050,208.51
09/02/2014 0.0900% 9/4/2014 100.0000 0.00
9/4/2014 0.00 52.63
CLOSE FOR 1142460091555 0.00 21,050,261.14
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142470000494
SEC ID:99ZALK6J8 REG:REPO
101812014 6:24:19PM EDT 10 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON So.Cunener: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/4/2014 -11,700,000.000 11,700,000.00
09/02/2014 0.0900Y 9/4/2014 100.0000 0.00
9/4/2014 0.00 29.25
CLOSE FOR 1142460091581 0.00 11,700,029.25
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142470000504
SEC ID:99ZALK6J8 REG:REPO
Total DELIVER VS PAY-BBLL(3) Total Principal: 81,800,000.00
Total Commission: 0.00
Total Income: 204.50
Total Net: 81,800,204.50
NAROIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/4/2014 29.250 -29.25
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/4/2014 0.0 0.00
9/4/2014 0..00 00 0.00
CMS REF: 1142470572364 0.00 -299.2525
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/4/2014 175.250 -175.25
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/4/2014 0.0 0.00
9/4/2014 0..00 00 0.00
CMS REF: 1142470572365 0.00 -1T5.2525
SEC ID:996085247 REG:05
Total IdARGIN RELEASE-BUY(2) Total Principal: -204.50
Total Commisaion: 0.00
Total Income: 0.00
Total Net: -204.50
Total U.S.DOLLAR(USD)(12) Total Principal: -1,217.17
Total Commission: 0.00
Total Income: 1,217.17
Total Net 0.00
9/5/2014
U.S.DOLLAR(USDI
FREE RECEIPT-SD
101812014 6:24:19PM EDT 11 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ba.Cu.ner: USD
WSD-CONSOLIDATED 9/1/2014 - 9/30/2014
oCBG000l0000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
UNITED STATES TREASURYNOTE DTD 03/15/2012 0.375%03/15/2015 3/6/2014 3,594,000.000 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999 3/6/2014 0.0000 0.00
9/5/2014 0.00 0.00
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999 0.00 0.00
CMS REF: 1142480129150
SEC ID:912828SK7 RED:ANH
RBCBIVB VS PAY-BUY
FEDERAL HOME LN BE CONS DISC NT DTD 01/14/2014 0.000% 9/3/2014 10,300,000.000 -10,297,376.36
01 14 2015 9/5/2014 99.9745 0.00
/ / 9/5/2014 0.00 0.00
TRADING BROKER:BARCLAYS CAPITAL INC,NEW YORK 00007256 0.00 -10,297,376.36
CLEARING BROKER:BARCLAYS CAPITAL INC,NEW YORK 00007256
CMS REF: 1142460260517 CLENT REF:000020300060951
SEC ID:313384AP4 PRO:FRB
FEDERAL NATL MUG ASSN DISC NT DTD 01/11/2014 0.000%01/05/2015 9/3/2014 5,000,000.000 -4,998,898.61
TRADING BROKER:BARCLAYS CAPITAL INC,NEW YORK 00007256 9 99.9780 0.00
9//5/2014 5/2014 00 0 0.00
CLEARING BROKER:BARCLAYS CAPITAL INC,NEW YORK 00007256 0.00 4,998,898.6161
CMS REF: 1142460257109 CLIENT REF:000020300060950
SEC ID:3I3588AE5 REG:FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/4/2014 49,M9 917.950 -49,049,91795
2014 0.1000% 9/5/2014 f00.0000 0.00
09/04
/ 9/5/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -49,049,917.95
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142470211648 CUE" REF:000020300060965
SEC ID:99ZALLK01 RED:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/4/2014 33,450,082.050 -33,450,082.05
09/04/2014 0.1000% 9/5/2014 100.0000 0.00
9/5/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -33,450,082.05
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142470211863 CLIENT REF:000020300060966
SEC ID:99ZALLK01 RED:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/4/2014 11,700,000.000 -11,700,000.00
09 04 2014 0A000% 9/5/2014 100.0000 0.00
/ / 9/5/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142470212116 CLIENT REF:000060300022439
SEC ID:99ZALLK01 RED:REPO
101812014 6:24:19PM EDT 12 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON BaseCarrencr: USD
OCSO-CONSOLMATEn 9/1/2014 - 9/30/2014
OCB000o30000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total RECEIVE VS PAY-BUY(51 Total Principal: -109,496,274.97
Total Commission: 0.00
Total Income: 0.00
Total Net: -309,496,2T4.9T
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/5/2014 -128A00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 09-SEP-2014 FACTOR OF 9/5/2014 0.0 0.00
9/5/2014 0..00 00 0.00
1.03636 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142480011277
SEC ID:912828TEO RE@ FRB
US TREASURY INFLATION INDEXED NOTKS 1/8%7/15/2024 9/5/2014 -580.MO 0.00
TO BRING ACCOUNT INTO BALANCE WITH 9/5/2014
FACTOR OF 9/5/2014 0.0 0.00
9/5/2014 0..00 00 0.00
1.0039 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142480011278
SEC ID:912828WUO REG:FEB
Tote)DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-PD
NCUA GUARANTEED NOTES TR R2 IA DM 11/17/2010 VAR RT 9/5/2014 -12,626.070 12,626.07
11/o6/zo1T 9/5/2014 100.0000 0.00
9/5/2014 0.00 305.36
RECD PRIN AMORT FOR SEPTEMBER RECD INT FOR SEPTEMBER ON 0.00 12,931.43
695,451.08 UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142480000949
SEC ID:62888UAA8 REG:DTC
DELIVER VS PAY-BELL
101812014 6:24:19PM EDT 13 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON xa.Canenc : USD
OCSACORSOMDATRD 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
UNITED STATES TREAS BILL DTD 05/29/2014 0.000% 11/28/2014 9/3/2014 -13,300,000.000 15,299,286.00
TRADING BROKER:DEUTSCHE BK SECS INC,NY(NWSCUS33)00000573 9/5/2014 99.9953 0.00
9/5/2014 0.00 0.00
CLEARING BROKER:DEUTSCHE BK SECS INC,NY(NWSCUS33)00000573 0.00 15,299,286.00
CMS REF: 1142460227745 CLIENT REF:000020300060946
SEC ID:912796EF2 REG FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/5/2014 -33,450082.050 33,450,082.05
09/03/2014 0.0900% 9/5/2014 t00.0000 0.00
9/5/2014 0.00 83.63
CLOSE FOR 1142470056206 0.00 33,450,165.68
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142480001174
SECID:99ZALLF49 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/5/2014 -8,300,000.000 8,300,000.00
09/03/2014 0.0900% 9/5/2014 100.0000 0.00
9/5/2014 0.00 20.75
CLOSE FOR 1142470056239 0.00 8,300,020.75
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142480001323
SEC ID:99ZALLF49 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/5/2014 -49,049,917.950 49,049,917.95
09/03/2014 0.0900% 9/5/2014 100.0000 0.00
9/5/2014 0.00 122.62
CLOSE FOR 1142470056329 0.00 49,050,040.57
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142480001448
SEC ID:99ZALLF49 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/5/2014 -3,400,000.000 3,400,000.00
0.0900%09/03/2014 9/5/2014 100,0000 0.00
9/5/2014 0.00 8.50
CLOSE FOR 1142470056338 0.00 3,400,008.50
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142480001467
SEC ID:99ZALLF49 REG:REPO
101812014 6:24:19PM EDT 14 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON So.Carrenc : Dan
OCSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total DELIVER VS PAY-SELL(5) Total Principal: 109,499,286.00
Total Commission: 0.00
Total Income: 235.50
Total Net: 109,499,521.50
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/5/2014 29.250 -29.25
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/5/2014 0.0 0.00
9/5/2014 0..00 00 0.00
CMS REF: 1142480595099 0.00 -29.2525
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/5/2014 16,148.710 -16,148.71
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/5/2014 0.0 0.00
9/5/2014 0..00 00 .00
CMS REF: 1142480595098 0.00 -16,148.71
SEC ID:996085247 REG:05
Total MARGIN RELEASE-BUY(2) Total Principal: .16,177.96
Total Commission: 0.00
Total Income: 0.00
Total Net: -16,177.96
Total U.S.DOLLAR(USD)(16) Total Principal: -540.86
Total Commission: 0.00
Total Income: 540.86
Total Net: 0.00
9/8/2014
U.S.DOLLAR(IISD)
RECEIVE VS PAY-BUY
UNITED STATES TREASURY BILL DTI)07/03/2014 0.000%01/02/2015 9/4/2014 2,000,000.000 -1,999,935.56
TRADING BROKER:MERRILL LYNCH PIERCE FENNER,CHARLOTTE 9/8/2014 99.9968 0.00
9/8/2014 0.00 0.00
00000773 0.00 -1,999,935.56
CLEARING BROKER:MERRILL LYNCH PIERCE FENNER,CHARLOTTE
00000773
CMS REF: 1142470151431 CLIENT REF:000060300022437
SEC ID:912796EM7 REG: FRB
101812014 6:24:19PM EDT 15 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON BaseCarren<r: USD
ocaD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCBG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/5/2014 33,450,023.720 -33,450,023.72
09/05/2014 0MS00% 9/8/2014 100.0000 0.00
9/8/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -33,450,02392
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142510061763 CLIENT HER 000020300060984
SECID:99ZALLUJ9 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/5/2014 11,900,000.OM -1 1,700,000.00
09/05/2014 0.0800% 9/8/2014 100.0000 0.00
9/8/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142510061766 CUE" REF:000060300022447
SEC ID:99ZALLUJ9 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/5/2014 49,049,976.280 -49,049,976.28
09/OS/2014 0.0800% 9/8/2014 100.0000 0.00
9/8/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -49,049,976.28
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142510061781 CLIENT HER 000020300060983
SEC ID:99ZALLUJ9 REG:REPO
Total RECBIYB YB PAY-BUY(4( Total Principal: -96,199,935.56
Total Conuniadon: 0.00
Total Income: 0.00
Total Net -96,199,935.56
DEUWR FREE-BW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/8/2014 -32.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 08-SEP-2014 FACTOR OF 9/8/2014 0.0000 0.00
9/8/2014 0.00 0.00
1.03635 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS HER 1142510011249
SEC ID:912828TEO REG:FRB
101812014 6:24:19PM EDT 16 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON BaseCanener: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSGOOo10000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/8/2014 -145M00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 08-SEP-2014 FACTOR OF 9/8/2014 0.0000 0.00
9/8/2014 0.00 0.00
1.00369 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142510011250
SEC ID:91282SWUO REG:FRB
Total DELIVER FREE-SW(2) Total Principal: 0.00
Total Comvnission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-SELL
UNITED STATES TREASURY BILL ETD 04/10/20140.000%10/09/2014 9/4/2014 -2,000,000.000 1,999,993.11
TRADING BROKER:DEUTSCHE BE SECS INC,NY(NWSCUS33)00000573 9/8/2014 99.9997 0.00
9/8/2014 0.00 0.00
CLEARING BROKER:DEUTSCHE BE SECS INC,NY(NWSCUS33)00000573 0.00 1,999,993.11
CMS REF: 1142470118624 CLIENT REF:000060300022436
SEC ID:9I2796DZ9 REG:FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/8/2014 -49,049,917.950 49,049,917.95
09/04/2014 0.1000% 9/8/2014 100.0000 0.00
9/8/2014 0.00 408.75
CLOSE FOR 1142470211648 0.00 49,050,326.70
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142510000046
SEC ID:99ZALLK01 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/8/2014 -33,450,082.050 33,450,082.05
0.00
09/04/2014 0.1000% 9/8/ 000 2014 100.0.00 278.75
CLOSE FOR 1142470211863 0.00 33,450,360.80
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142510000076
SEC ID:99ZALLK01 REG:REPO
101812014 6:24:19PM EDT 17 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON as.Canancr: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ ER Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amoont
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/8/2014 -11,900,000.000 11,700,000.00
09/04/2014 0A000% 9/8/2014 100.0000 0.00
9/8/2014 0.00 97.50
CLOSE FOR 1142470212116 0.00 11,700,09T50
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142510000106
SECID:99ZALLK01 REG:REPO
Total DELIVER VS PAY-SELL(4) Total Principal: 96,199,993.11
Total Commission: 0.00
Total Income: 785.00
Total Net: 96,200,778.11
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/8/2014 155.050 -155.05
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/8/2014 0.0000 0.00
9/8/2014 0.00 0.00
CMS REF: 1142510611186 0.00 -155.05
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/8/2014 687.500 -689.50
BOUGHT DREYFUS TREAS 8:AGY CSH MGT 521 INC 9/8/2014 0.0 0.00
9/8/2014 0..00 00 0. 0
CMS REF: 1142510611189 0.00 -687.50
SEC ID:996085247 REG:05
Total MARGIN RELEASE-BUY(2) Total Principal: -842.55
Total Commission: 0.00
Total Income: 0.00
Total Net: -842.55
Total U.B.DOLLAR(USD)(12) Total Principal: -785.00
Total Commission: 0.00
Total Income: 786.00
Total Net 0.00
9/9/2014
U.S.DOLLAR(USDI
RECEIVE VS PAY-BUY
101812014 6:24:19PM EDT 18 Wcrkberoh
Custody Transaction History Report ID: CUA356
BNY MELLON Ba«Curran.,: USD
We CONSOMDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Set Local Amount
UNITED STATES TREASURY NOTE DTD 08/31/20140.500%08/31/2016 9/8/2014 25,800,000.000 -25,794,960.94
TRADING BROKER:CITIGROUP GBL MKTS/SALOMON,NEW YORK 9/9/2014 99.9805 0.00
9/9/2014 0.00 -3,207.18
00000274 0.00 -25,798,168A2
CLEARING BROKER:CITIGROUP GBL MKTS/SALOMON,NEW YORK
00000274
CMS REF: 1142510153763 CLIENT REF:000020300061022
SEC ID:912828D64 REG:FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/8/2014 49,058,668,220 -49,058,668.22
0.0900% 9/9/2014 100.0000 0.00
09/08/2014
9/9/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -49,058,668.22
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142520179625 CLIENT REF:000020300061024
SEC ID:99ZALIAR0 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/8/2014 33,441 331.780 -33,441,331.78
09/08/2014 0.0900% 9/9/2014 f00.0000 0.00
9/9/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -33,441,331.78
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142520179722 CLIENT REF:000020300061025
SEC ID:99Z TARO REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/8/2014 11,700,000.000 -11,700,000.00
09/08/2014 0.0700% 9/9/2014 100.0000 0.00
9/9/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142520179749 CLIENT REF:000060300022452
SECID:99ZALL4R0 REG:REPO
Total RECEIVE VS PAY-BUY)4) Total Principal: ,119,994,960.94
Total Commission: 0.00
Total lncome: -3,207.19
Total Net: -119,998,168.12
DELIVER FREE-SW
101812014 6:24:19PM EDT 19 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ea.Canencr: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCBG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/9/2014 -64M00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 09-SEP-2014 FACTOR OF 9/9/2014 0.0000 0.00
9/9/2014 0.00 0.00
1.03633 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520029262
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/9/2014 -290.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 09-SEP-2014 FACTOR OF 9/9/2014 000000.00
9/9/2014 0..00 0.00
1.00367 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520029269
SEC ID:912828WUO REG:FRB
Total DELIVER FREE-BW(2) Total Principal: 0.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-SEIM
FEDERAL HOME LN BK CONS DISC NT DTD 09/24/2013 0.000% 9/9/2014 -24,800,000,000 24,799,896.67
24 2014 9/9/2014 99,9996 0.00
09
/ / 9/9/2014 0.00 0.00
TRADING BROKER:JEFFERIES&CO INC,NEW YORK 00000019 0.00 24,799,896.67
CLEARING BROKER:JEFFERIES&CO INC,NEW YORK 00000019
CMS REF: 1142520181899 CLIENT REF:000020300061037
SEC ID:313385G91 REG FRB
UNITED STATES TREASURY NOTE DTD 09/15/2011 0.250%09/15/2014 9/9/2014 -1,000000.000 1,000,039.06
000
TRADING BROKER:CITIGROUP GBL MKTS/SALOMON,NEW YORK 9/9/2014 I00.0
9/9/2014 0.00.00 1,2 .
00000274 0.00 1,001,2489.24
48.3030
CLEARING BROKER:CITIGROUP GEL MKTS/SALOMON,NEW YORK
00000274
CMS REF: 1142520190846 CLENT REF:000020300061038
SEC ID:912828RG1 REG:FRB
101812014 6:24:19PM EDT 20 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON as.Caneno,: USD
OCSD-CONSOMDATED 9/1/2014 - 9/30/2014
0CSG00010000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/9/2014 -33,450,023920 33,450,02392
09/05/2014 0MS00% 9/9/2014 100.0000 0.00
9/9/2014 0.00 74.33
CLOSE FOR 1142510061763 0.00 33,450,098.05
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142520000222
SEC ID:99ZALLUJ9 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/9/2014 -11,700,000.000 11,700,000.00
OS 2014 0.0800% 9/9/2014 100,0000 0.00
09
/ / 9/9/2014 0.00 26.00
CLOSE FOR 1142510061766 0.00 11,700,026.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142520000237
SEC ID:99ZALLUJ9 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/9/2014 -49,049,976.280 49,049,976.28
09 OS 2014 0.0800% 9/9/2014 100.0000 0.00
/ / 9/9/2014 0.00 109.00
CLOSE FOR 1142510061781 0.00 49,050,083.28
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142520000278
SEC ID:99ZALLUJ9 REG:REPO
Total DEL R VS PAY-SELL(5) Total Principal: 119,999,935.73
Total Commission: 0.00
Total Income: 1,418.57
Total Net: 120,001,354.30
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/9/2014 26.000 -26.00
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/9/2014 0.0000 0.00
9/9/2014 0.00 0.00
CMS REF: 1142520607945 0.00 -26.00
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/9/2014 3,160.180 -3,160.18
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/9/2014 0.0000 0.00
9/9/2014 0.00 0.00
CMSREF: 1142520607946 0.00 -3,160.18
SEC ID:996085247 REG:05
101812014 6:24:19PM EDT 21 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ba.Caneno,: USD
OCSD-CONSOLUMTED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total MARGIN RELEASE-BUY(2) Total Principal: -3,186.18
Total Commission: 0.00
Total Income: 0.00
Total Net: -3,186.18
Total U.S.DOLLAR(USD)(13) Total Principal: 1,788.61
Total Commission: 0.00
Total Income: -1,788.61
Total Net 0.00
9/10/2014
U.S.DOLLAR NSIn
RECEIVE VS PAY-BUY
FEDERAL HOME LN MTG CORP DISC NT DTD 12/09/2013 0.000% 9/9/2014 400,000.000 -399,945.61
08 2014 9/10/2014 99.9864 0.00
12
/ / 9/10/2014 0.00 0.00
TRADING BROKER:JP MORGAN CHASE BANK/HSBCI,NEW YORK 0.00 -399,945.61
00002467
CLEARING BROKER:JP MORGAN CHASE BANK/HSBCI,NEW YORK
00002467
CMS REF: 1142520321254 CLIENT REF:000060300022456
SEC ID:3I3397S44 REG:FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/9/2014 11,700,000.000 -11,700,000.00
09/09/2014 0.0700% 9/10/2014 100.0000 0.00
9/10/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142520336472 CUE" REF:000060300022458
SEC ID:992 1,847 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/9/2014 34,499,720.730 -34,499,720.73
09/09/2014 O.OT00% 9/10/2014 100.0000 0.00
9/10/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -34,499,720.73
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142520336601 CLIENT REF:000020300061041
SEC ID:99Z 1,847 REG:REPO
101812014 6:24:19PM EDT 22 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Rase Carrencr: USD
WSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCBGo0010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/9/2014 48,000,279.270 -48,000,279.27
09/09/2014 0.0900% 9/10/2014 100.0000 0.00
9/10/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -48,000,279.27
CLEARING BROILER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142520336609 CLIENT PER 000020300061040
SECID:99ZALL847 REG:REPO
Total RECEIVE VS PAY-BUT(41 Total Principal: -94.599.946.61
Total Commission: 0.00
Total Income: 0.00
Total Net: -94.899.946.61
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/10/2014 -32.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 10-SEP-2014 FACTOR OF 9/10/2014 0.0000 0.00
9/10/2014 0.00 0.00
1.03632 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS PER 1142530011996
SEC TO 912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/10/2014 -145.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 10-SEP-2014 FACTOR OF 9/10/2014 0.0000 0.00
9/10/2014 0.00 0.00
1.00366 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS NET: 1142530011997
SEC ID:912828WUD REG:FRB
Total DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: nw
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-MT
101812014 6:24:19PM EDT 23 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ea.Cavener: USD
OCSD-CONEOMDATED 9/1/2014 - 9/30/2014
OCSG(XK`Iw00
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL HOME LN BE CONS DISC NT DTD 09/10/2013 0.000% 9/10/2014 -400,000 000 399,967.33
09/10/2014 9/10/2014 100.0000 0.00
9/10/2014 0.00 32.67
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 0.00 400,000.00
400,000.000
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142529000334
SEC ID:313385F35 REG:FRB
DELIVER VS PAY-BELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/10/2014 -49,058,668.220 49,058,668.22
09/08/2014 O.OT00% 9/10/2014 100.0000 0.00
9/10/2014 0.00 95.39
CLOSE FOR 1142520179625 0.00 49,058,763.61
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142530000145
SEC ID:99ZALL4RO REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/10/2014 -33,441,331.780 33,441,331.78
09/08/2014 O.oT00% 9/10/2014 100.0000 0.00
9/10/2014 0.00 65.02
CLOSE FOR 1142520179722 0.00 33,441,396.80
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142530000244
SEC ID:99ZALIAR0 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/10/2014 -11,700,000,000 11,700,000.00
09/08/2014 O.O700% 9/10/2014 100.0000 0.00
9/10/2014 0.00 22.75
CLOSE FOR 1142520179749 0.00 11,900,022.95
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142530000361
SEC ID:99ZALL4R0 REG:REPO
Total DELVER VS PAY-SELL(3) Total Principal: 94,200,000.00
Total Commission: 0.00
Total Income: 183.16
Total Net: 94,200,183.16
MARGIN RELEASE-BUY
101812014 6:24:19PM EDT 24 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Us.Carrent,: USD
OCSuCONSOLIDATRD 9/1/2014 - 9/30/2014
OCSGo0o10000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
DREYFU THE AGY CSH MGT 521 INC FUND 9/10/2014 79.140 -97.14
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/10/2014 0.0000 0.00
9/10/2014 0.00 0.00
CMS REF: 1142530655401 0.00 -77.14
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/10/2014 160.410 -160.41
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/10/2014 0.0000 0.00
9/10/2014 0.00 0.00
CMS REF: 1142530655405 0.00 -160.41
SEC ID:996085247 REG:05
Total MARGIN RELEASE-BUY(2) Total Principal: -230.55
Total Commission: null
Total Income: 0.00
Total Net: -237.55
Total U.B.DOLLAR(USD)(12) Total Principal: -215.83
Tote)Cotamission: 0.00
Total Income: 215.83
Total Net 0.00
9/11/2014
U.S.DOLLAR(USDI
RECEIVE VB PAY-BUV
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/10/2014 11,700,000.000 -11,700,000.00
09 10 2014 0.0600% 9/11/2014 100.0000 0.00
/ / 9/11/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142530208885 CLIENT REF:000060300022464
SEC ID:99ZALMFQ8 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/10/2014 48,90Q016.360 -48,900,016.36
09/10/2014 0.O600Yo 9/11/2014 100.0mo 0.00
9/11/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -48,900,016.36
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142530208907 CLIENT NET 000020300061054
SEC ID:99ZALMFQ8 REG:REPO
101812014 6:24:19PM EDT 25 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Rase Carrenc : USD
OCSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCBGo0o10000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/10/2014 33,599,983.640 -33,599,983.64
09/10/2014 0M600% 9/11/2014 100.0000 0.00
9/11/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -33,599,983.64
CLEARING BROILER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142530208921 CLIENT REF:000020300061055
SEC ID:99ZALMFQ8 REG:REPO
Total RECEIVE VS PAY-BUT(31 Total Principal: -94.200.000.00
Total Commission: 0."
Total Income: 0.00
Total Net: -94.200.000.00
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/11/2014 -32.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH I1-SEP-2014 FACTOR OF 9/11/2014 0.0000 0.00
9/11/2014 0.00 0.00
1.03631 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS PER 1142540020105
SEC TO 912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/11/2014 -145.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 1 1-SEP-2014 FACTOR OF 9/11/2014 0.0000 0.00
9/11/2014 0.00 0.00
1.00365 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS NET: 1142540020108
SEC ID:912828WUD REG:FRB
Total DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: nw
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-SELL
101812014 6:24:19PM EDT 26 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base Carreno : USD
WSD-CONSOMDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/11/2014 -11,900,000.000 11,700,000.00
09/09/2014 0.0900% 9/11/2014 100.0000 0.00
9/11/2014 0.00 2295
CLOSE FOR 1142520336472 0.00 11,900,02295
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142540000260
SEC ID:99ZALL849 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/11/2014 -34,499,720.730 34,499,720.73
09 2014 O.OT00% 9/11/2014 100,0000 0.00
09
/ / 9/11/2014 0.00 67.08
CLOSE FOR 1142520336601 0.00 34,499,787.81
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142540000374
SEC ID:99ZALLS47 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/11/2014 -48,000,279.270 48,000,279.27
09 09 2014 0.0700% 9/11/2014 100.0000 0.00
/ / 9/11/2014 0.00 93.33
CLOSE FOR 1142520336609 0.00 48,000,372.60
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142540000382
SEC ID:99ZALL847 REG:REPO
Total DELIVER VS PAY-SELL(3) Total Principal: 94,200,000.00
Total Commission: 0.00
Total lnoome: 193.16
Total Net 94,200,183.16
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/11/2014 22.750 -22.75
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/11/2014 0.0000 0.00
9/11/2014 0.00 0.00
CMS REF: 1142540629650 0.00 -2295
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/11/2014 160.410 -160.41
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/11/2014 0.0000 0.00
9/11/2014 0.00 0.00
CMS REF: 1142540629651 0.00 -160.41
SEC ID:996085247 REG:05
101812014 6:24:19PM EDT 27 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ba.Carrano,: USD
OCSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total MARGIN RELEASE-BUY(2) Total Principal: -183.16
Total Commission: 0.00
Total Income: 0.00
Total Net: -183.16
Total U.S.DOLLAR(USD)(10) Total Principal: -183.16
Total Commission: 0.00
Total Income: 183.16
Total Net 0.00
9/12/2014
U.S.DOLLAR NSDI
RECEIVE VS PAY-BUY
FEDERAL HOME LN BKS CONS DISC NTS DID 12/12/2013 0.000% 9/11/2014 45,800,000.000 -45,793,048.69
12 12 2014 9/12/2014 99.9848 0.00
/ / 9/12/2014 0.00 0.00
TRADING BROKER:CITIGROUP GBL MKTS/SALOMON,NEW YORK 0.00 -45,793,048.69
00000274
CLEARING BROKER:CITIGROUP GBL MKTS/SALOMON,NEW YORK
00000274
CMS REF: 1142540242454 CLIENT REF:000020300061069
SEC ID:31338SS80 REG:FRB
FEDERAL HOME LN BKS CONS DISC NTS DID 12/12/2013 0.000% 9/11/2014 700,000.000 -699,89396
12 12 2014 9/12/2014 99.9848 0.00
/ / 9/12/2014 0.00 0.00
TRADING BROKER:CITIGROUP GBL MKTS/SALOMON,NEW YORK 0.00 -699,893.76
00000274
CLEARING BROKER:CITIGROUP GBL MKTS/SALOMON,NEW YORK
00000274
CMS REF: 1142540242457 CLIENT REF:000060300022470
SEC ID:3I3385S80 REG:FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DID 9/11/2014 11,000,000.000 -11,000,000.00
09 11 2014 0.0700% 9/12/2014 100.0000 0.00
/ / 9/12/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,000,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142550069919 CLIENT REF:000060300022469
SEC ID:99Z MRXO REG:REPO
101812014 6:24:19PM EDT 28 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Rase Canener: Ban
WSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG0001MIX)
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/11/2014 36,700,000.000 -36,700,000.00
09/11/2014 0.0900% 9/12/2014 100.0000 0.00
9/12/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -36,700,000.00
CLEARING BROILER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142550069923 CLIENT REF:000020300061068
SECID:99ZALMRX0 REG:REPO
Total RECEIVE VS PAY-BUY(4) Total Principal: -94,192,942.46
Total Conwiadon: 0.00
Total Income: 0.00
Total Net: -94,192,942.45
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/12/2014 -128.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 14-SEP-2014 FACTOR OF 9/12/2014 0.0000 0.00
9/12/2014 0.00 0.00
1.03627 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS HER 1142550019464
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/12/2014 -580.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 14-SEP-2014 FACTOR OF 9/ 0.0.00 0.00
9/12/2014 2/2014 0.00 0.00
1.00361 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142550019465
SEC ID:912828WUO REG:FEB
Total DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-SELL
101812014 6:24:19PM EDT 29 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base Carreno : USD
OCSD-CONSOMDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/12/2014 -11,900,000.000 11,700,000.00
09/10/2014 0M600% 9/12/2014 100.0000 0.00
9/12/2014 0.00 19.50
CLOSE FOR 1142530208885 0.00 11,900,019.50
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142550000132
SEC ID:99ZALMM8 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/12/2014 -48,900,016.360 48,900,016.36
10 2014 0.0600% 9/12/2014 100,0000 0.00
09
/ / 9/12/2014 0.00 81.50
CLOSE FOR 1142530208907 0.00 48,900,097.86
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142550000199
SEC ID:99ZALMM8 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/12/2014 -33,599,983.640 33,599,983.10
09 10 2014 0.0600% 9/12/2014 100.0000 0.00
/ / 9/12/2014 0.00 56.00
CLOSE FOR 1142530208921 0.00 33,WO,039.64
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142550000223
SEC ID:99ZALMMS REG:REPO
Total DEL R VS PAY-SELL(3) Total Principal: 94,200,000.00
Total Commission: 0.00
Total lnoome: 157.00
Total Net 94,200,157.00
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/12/2014 125.740 -125.74
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/12/2014 0.0000 0.00
9/12/2014 0.00 0.00
CMS REF: 1142550590143 0.00 -125.74
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/12/2014 7,088.810 -7,088.81
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/12/2014 0.0000 0.00
9/12/2014 0.00 0.00
CMS REF: 1142550590144 0.00 -7,088.81
SEC ID:996085247 REG:05
101812014 6:24:19PM EDT 30 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON BaseCaneno,: USD
OCSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCS0000I0000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total MARGIN RELEASE-BUY(2) Total Principal: -7,214.55
Total Commission: 0.00
Total Income: 0.00
Total Net: -7,214.55
Total U.S.DOLLAR(USD)(11) Total Principal: -157.00
Total Commission: 0.00
Total Income: 157.00
Total Net 0.00
9/15/2014
U.S.DOLLAR NSIn
RECEIVE VS PAY-BUY
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/12/2014 11,100000.000 -11,100,000.00
09/12/2014 0.0800% 9/15/2014 t00.0000 0.00
9/15/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,100,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142580067992 CUE" REF:000060300022475
SEC ID:99ZALMYM6 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/12/2014 38,100,000.000 -38,100,000.00
09/12/2014 0.0800% 9/15/2014 100.0mo 0.00
9/15/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -38,100,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 0000018T
CMS REF: 1142580068064 CLIENT REF:000020300061082
SECID:99ZALMYM6 REG:REPO
Total RECEIVE Va PAY-BUY(2) Total Principal: -49,200,000.00
Total Commission: O.GO
Total Income: 0.00
Total Net: -49,200,000.00
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/15/2014 -64.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 15-SEP-2014 FACTOR OF 9/15/2014 0.0000 0.00
9/15/2014 0.00 0.00
1.03625 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142580021101
SEC ID:912828TEO REG:FRB
101812014 6:24:19PM EDT 31 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ea.Canencr: USD
OCSD-CONSOMDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
US TREASURY INFLATION INDEXED NOTES 1/8%9/15/2024 9/15/2014 -145.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 15-SEP-2014 FACTOR OF 9/15/2014 0.0000 0.00
9/15/2014 0.00 0.00
1.0036 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142580021102
SEC ID:912828WUO REG:FRB
Total DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-MT
CITIGROUP INC SUBORDINATED 9/15/2014 -1,350,000.000 1,350,000.00
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 9/15/2014 100.0 0.00
9/15/2014 0..00 00 0.00
1,350,000.000 0.00 1,350,000.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142559000245
SEC ID: 192967CQ2 REG:DTC
DELPMR VS PAY.PD
FEDERAL HOME LN MTG COST MULTICLASS MTG PAWN CTFS GTD SER 8/l/2014 -2,714.750 2,714.75
E3 CL A 9/15/2014 100.0000 0.00
9/15/2014 0.00 255.03
RECD PRIN AMORT FOR JULY RECD INT FOR JULY ON 107,878.00 UNITS 0.00 2,969.78
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142200048038
SEC ID:3133WE95 REG:FRB
FEDERAL HOME LN MTG CORP PAWN CTFS POOL 78-6064 VAR RATE 8/1/2014 -16.400 16.40
1/1/2028 9/15/2014 100.0000 0.00
9/15/2014 0.00 5.51
RECD PRIN AMORT FOR JULY RECD INT FOR JULY ON 2,941.59 UNITS 0.00 21.91
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142200051906
SEC ID:31348SWZ3 REG: FRB
101812014 6:24:19PM EDT 32 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Haas Carrencr: Dan
OCSACONSOLMATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total DELIVER VS PAY-PD(2) Total Prinoipal: 2,731.15
Total Commission: 0.00
Total Income: 260.54
Total Net: 2'"1.69
DELIVER Vs PAY-SELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/15/2014 -11,000,000.000 11,000,000.00
09/11/2014 0.0'/00% 9/15/2014 100.0000 0.00
9/15/2014 0.00 6a.17
CLOSE FOR 1142550069919 0.00 11,000,064.17
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142580000409
SEC ID:99ZALMRX0 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DM 9/15/2014 -36,700,000.000 36,700,000.00
09/11/2014 0.0900% 9/15/2014 100.00DO 0.00
9/15/2014 0.00 214.08
CLOSE FOR 1142550069923 0.00 36,700,214.08
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142580000420
SEC ID:99ZALMRX0 REG:REPO
Total DELIVER VS PAY-BELL(2) Total Principal: 47,700,000.00
Total Commission: 0.00
Total Income: 278.25
Total Net: 47,700,278.25
SELL-SELL
DREYFU THE AGY CSH MGT 521 INC FUND 9/15/2014 74,342.080 74,342D8
SOLD DRES TREAS&AGY CSH MGT 521 INC 9/15/2014 0.0000 0.00
YFU
9/I5/2014 0.00
0.00
CMS REF: 1142580981299 0.00 T4,342D82.08
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/15/2014 522.310 522.31
SOLD DREYFUS TREAS&AGY CSH MGT 521 INC 9/15/2014 0. 0.00
9/I5/2014 D00 0.00 0.00
CMS REF: 1142580981298 0.00 522.3131
SEC ID:996085247 REG:05
Total SELL-SELL(2) Total Principal: 74,864.39
Total Commission: 0.00
Total Income:. 0.00
Total Net: 74,864.39
101812014 6:24tl9PM EDT 33 workbench
Custody Transaction History Report ID: CUA356
BNY MELLON BaseCanena,: ORD
OCSACONEOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description RL Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FOREIGN HOLDER RELEASE-CD
CITIGROUP INC SUBORDINATED 9/15/2014 0.000 0.00
REC INT ON 1350000.000 UNITS PAY 09/15/14 RATE.0250000000 9/15/2014 0.0 0.00
9/15/2014 0..00 00 33, 50.00
CMS REF: 1142580087858 0.00 33,750.00
SEC ID: 172967CQ2
SOUTHERN CO/THE SR UNSECURED A 9/15/2014 OMO 0.00
REC INT ON 1000000,000 UNITS PAY 09/15/14 RATE.0118750000 9/15/2014 0.0000 0.00
9/15/2014 0.00 11,875.00
CMS REF: 1142580087852 0.00 11,875.00
SEC ID:842587CGO
UNITEDHEALTH GROUP INC SR UNSECURED 9/15/2014 0.000 0.00
REC INT ON 1050000.000 UNITS PAY 09/15/14 RATE.0243T50000 9/15/2014 0.0000 0.00
9/15/2014 0.00 25,593.75
CMS REF: 1142580087849 0.00 25,593.75
SEC ID:9I324PAM4
WELLS FARGO BANK NA SR UNSECURED BKNT 9/15/2014 0.000 0.00
REC INT ON 500000.000 UNITS PAY 09/15/14 RATE.00129384T0 9/15/2014 0.0000 0.00
9/15/2014 0.00 646.92
CMS REF: 1142580087856 0.00 646P2
SEC ID:949SW210
Total FOREIGN HOLDER RELEASE-CD(4) Total Principal: 0.00
Total Commission: 0.00
Total I.e..: 71,865.67
Total Net 71,865.67
Total U.S.DOLLAR(USD)(15) Total Principal: -72,404.46
Total Commission: 0.00
Total Income: 72,404.46
Total Net: 0.00
9/16/2014
U.B.DOLLAR(USDI
FREE RECEIPT-SO
UNITED STATES TREASURY NOTE DTD 03115/2012 0.375%03/15/2015 3/6/2014 3,594,000.000 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999 3/6/2014 0.0mo 0.00
9/16/2014 0.00 0.00
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999 0.00 0.00
CMS REF: 1142590067588
SEC ID:9I2828SK1 RED:ANH
RECEIVE VS PAY-BUY
101812014 6:24:19PM EDT 34 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base Canener: Ban
We CONSOLIDATED 9/1/2014 - 9/30/2014
OCS00001o000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/15/2014 125,000.000 -125,000.00
09/15/2014 0.0800% 9/16/2014 100.0000 0.00
9/16/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -125,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 0000018T
CMS REF: 1142590075111 CLIENT HER 000020300061099
SEC ID:99ZALM589 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/15/2014 11,100,000.000 -11,100,000.00
0.0800%09/15/2014 9/16/2014 100.0000 0.00
9/16/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,100,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142590075172 CLIENT REF:000060300022481
SECID:99ZALM589 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/15/2014 38,175,000.000 -38,175,000.00
09/15/2014 0.0800% 9/16/2014 100.0000 0.00
9/16/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -38,175,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142590075225 CLIENT REF:000020300061100
SEC ID:99ZALM589 REG:REPO
Total RBCBIYB VS PAY-BUY(3( Total Principal: -49,400,000.00
Total Coaunission: 0.00
Total Income: MIX)
Total Net: -49,400,000.00
DELIVER FREE-SW
UNITED STATES TREASURY NOTE DTD 03/15/2012 0.375%03/15/2015 3/6/2014 -3,594,000.000 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999 3/6/2014 0.0000 0.00
9/16/2014 0.00 0.00
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999 0.00 0.00
CMS RE7: 1142590067458
SEC ID:9I2828SK7 REG:ANH
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/16/2014 -32M00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 16-SEP-2014 FACTOR OF 9/16/2014 0.0 0.00
9/16/2014 0..00 00 0.00
1.03624 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142590018591
SEC ID:912828TEO REG:FRB
101812014 6:24:19PM EDT 35 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ea«Carron.,: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
US TREASURY INFLATION INDEXED NOTES 1/8%9/15/2024 9/16/2014 -290.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 16-SEP-2014 FACTOR OF 9/16/2014 0.0000 0.00
9/16/2014 0.00 0.00
1.00358 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142590018594
SEC ID:912828WUO REG:FRB
Total DELIVER FREE-SW(3( Total Principal: 0.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-MT
FEDERAL HOME LN MTG CORP DISC NT DTD 09/16/2013 0.000% 9/16/2014 -200,000.000 199,976.33
09/16/2014 9/16/2014 100.0000 0.00
9/16/2014 0.00 23.69
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 0.00 200,000.00
200,000.000
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142589000228
SEC ID:313397F99 REG:FRB
DBLIVER VS PAY.PD
GOVERNMENT NATL MTG ASSN GTD REMIC PASSTHRU SECS 2000-9 9/I6/22014 014 1 61 0000 1,612.91
REMIC TR CL 9/16/2014 0.00 37.17
RECD PRIN AMORT FOR SEPTEMBER RECD INT FOR SEPTEMBER ON 0.00 1,650.08
68,099.74 UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142590001140
SEC ID:3839H4NX9 REG: FRB
DELIVER VS PAY-SELL
101812014 6:24:19PM EDT 36 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON RaseCanener: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/16/2014 -11,100,000.000 11,100,000.00
09/12/2014 0MS00% 9/16/2014 100.0000 0.00
9/16/2014 0.00 24.67
CLOSE FOR 1142580067992 0.00 11,100,024.69
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142590000313
SEC ID:99ZALMYM6 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/16/2014 -38,100,000.000 38,100,000.00
12 2014 0.0800% 9/16/2014 100,0000 0.00
09
/ / 9/16/2014 0.00 84.67
CLOSE FOR 1142580068064 0.00 38,100,084.67
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142590000377
SEC ID:99ZALMYM6 REG:REPO
Total DELIVER VS PAY-BELL(2) Total Principal: 49.200,WnW
Total Commission: 0.00
Total Income: 109.34
Total Net: 49,200,109.34
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/16/2014 24.670 -24.69
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/16/2014 0.0 0.00
9/16/2014 0..00 00 .00
CMS REF: 1142590638366 0.00 -24.67
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/16/2014 1,734,750 -1,734.75
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/ 0.0000 0.00
9/16/2014 fi/2014 0.00 .00
CMS REF: 1142590638367 0.00 -1,734.75
SEC ID:996085247 REG:05
Tote)MARGIN RELEASE-BUY(2) Total RIncipal: -1,759.42
Total Commission: 0.00
Total Income: 0.00
Total Net: .1,759.42
Total U.S.DOLLAR(UBD)(13) Total Principal: -170.19
Total Commission: 0.00
Total Income: 170.18
Total Net: 0.00
9/17/2014
101812014 6:24:19PM EDT 37 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON RasecaneneF: USD
WSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSGGO3l0000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
Is FX Fee Net Local Amount
U.S.DOLLAR(USDI
RECEIVE VS PAY-BUY
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/16/2014 38,300,000.000 -38,300,000.00
09 16 2014 0.0700% 9/17/2014 100.0000 0.00
/ / 9/17/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -38,300,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142590231280 CLIENT REF:000020300061115
SECID:99ZALM9W2 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/16/2014 11,100,000.000 -11,100,000.00
09/16/2014 O.OT00% 9/17/2014 100.0000 0.00
9/17/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,100,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142590231316 CLIENT REF:000060300022486
SEC ID:99ZALM9W2 REG:REPO
Total RECEIVE VS PAY-BUY(2) Total Principal: -49,400,000.00
Total Commission: 0.00
Total Income: 0.00
Total Net: -49,400,000.00
DELIVER FREE-SW
UNITED STATES TREASURY NOTE DTD 08/15/2003 4.250%08/15/2013 8/15/2014 -3,610,000,000 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999 8/15/2014 0.0000 0.00
9/17/2014 0.00 0.00
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999 0.00 0,00
CMS REF: 1142600057196
SEC ID:912828BH2 REG:ANH
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/17/2014 -64M00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 19-SEP-2014 FACTOR OF 9/1 0.0 0,00
9/I7/2014/2014 0..00 00 0.00
1.03622 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142600011745
SEC ID:912828TEO REG:FRB
101812014 6:24:19PM EDT 38 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ea.Cavener: USD
OCSD-CONEOLIDATED 9/1/2014 - 9/30/2014
OCSo0()0Iw O
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/17/2014 -145M00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 19-SEP-2014 FACTOR OF 9/17/2014 0.0000 0.00
9/17/2014 0.00 0.00
1.00357 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142600011746
SEC ID:91282SWUO REG:FRB
Total DELIVER FREE-SW(3) Total Principal: 0.00
Total Coeunission: 0.00
Total Income: MW
Total Net: 0.00
DELIVER VS PAY-SELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/17/2014 -125,000.000 125,000.00
09/15/2014 0.0800% 9/17/2014 100.0000 0.00
9/17/2014 0.00 0.28
CLOSE FOR 1142590075111 0.00 125,000.28
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142600000043
SEC ID:99ZALM589 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/17/2014 -11,100,000,000 11,100,000.00
0.0800% 9/17/2014 100,0000 0.00
09/15/2014
9/17/2014 0.00 24.67
CLOSE FOR 1142590075172 0.00 11,100,024.67
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142600000065
SEC ID:99ZALM589 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/17/2014 -38,175,000.000 38,175,000.00
9/17/2014 100.0000 0.00
09/15/2014 0.0800% 9/17/2014 0.00 84.83
CLOSE FOR 1142590075225 0.00 38,175,084.83
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142600000071
SEC ID:99ZALM589 REG:REPO
101812014 6:24:19PM EDT 39 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Baas C9rrenc : Dan
OCSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total DELIVER VS PAY-BELL(3) Total Principal: 49,400,000.00
Total Commission: 0.00
Total Income: 109.78
Total Net: 49,400,109.78
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/17/2014 24.670 -24.67
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/ 0.0000 0.00
9/17/2014/2014 0.00 . 7
CMS REF: 1142600584153 0.00 -24.67
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/17/2014 85A10 -85.11
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/1 0.0000 0.00
9/I7/2014/2o14 0.00 0.00
CMS REF: 1142600584154 0.00 -85.1111
SEC ID:996085247 REG:05
Total MARGIN RELEASE-BUY(2) Total Principal: -109.78
Total Commission: O.OII
Total Income: 0.00
Total Net: -109.78
Total U.S.DOLLAR(USD)(10) Total Principal: -109.78
Total Commission: 0.00
Total Income: 109.78
Total Net: 0.00
9/18/2014
U.S.DOLLAR(USDI
RECEIVE VS PAY-BUY
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/17/2014 11,100,000.000 -11,100,000.00
1Y 2014 0.0600% 9/18/2014 100,0000 0.00
09
/ / 9/18/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,100,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142600254462 CLIENT REF:000060300022491
SEC ID:99Z LNHT8 REG:REPO
101812014 6:24:19PM EDT 40 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Rase Carrencr: USD
OCSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCBGo0o10000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/17/2014 46,800,000.000 -46,800,000.00
09/17/2014 0M600% 9/18/2014 100.0000 0.00
9/18/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -46,800,000.00
CLEARING BROILER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142600254498 CLIENT PER 000020300061128
SECID:99ZALNHT8 REG:REPO
Total RECEIVE VS PAY-BUY(21 Total Principal: .57.900.000.00
Total Commission: 0."
Total Income: 0.00
Total Net: -57,900,000.00
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/18/2014 -32.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 18-SEP-2014 FACTOR OF 9/18/2014 0.0000 0.00
9/18/2014 0.00 0.00
1.03621 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS PER 1142610011971
SEC TO 912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/18/2014 -145.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 18-SEP-2014 FACTOR OF 9/18/2014 0.0000 0.00
9/18/2014 0.00 0.00
1.00356 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS NET: 1142610011972
SEC ID:912828WUD REG:FRB
Total DELIVER FREE-SW(a) Total Principal: 0.00
Total Commission: nw
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-MT
101812014 6:24:19PM EDT 41 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Eaee Canener: USD
WSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL HOME LN MTG CORP DISC NTS 09/18/2014 INCOME AT MAT 9/18/2014 -8,500,000 000 8,498,44L69
PROCEEDS RECENED AS A RESULT OF A MATURITY FOR CASH AMOUNT 9/18/2014 100.0000 0.00
9/18/2014 0.00 1,558.33
8,500,000.000 0.00 8,500,000.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142609000453
SEC ID:313397G39 REG:FRB
DELIVER VS PAY-SELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/18/2014 -38,300,000.000 38,300,000.00
09/16/2014 0.0900% 9/18/2014 100.0000 0.00
9/18/2014 0.00 74.47
CLOSE FOR 1142590231280 0.00 38,300,074.49
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142610000179
SEC ID:99ZALM9W2 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/18/2014 -11,100,000,000 11,100,000.00
0.0900%09 16 2014 9/18/2014 100.0000 0.00
/ / 9/18/2014 0.00 21.58
CLOSE FOR 1142590231316 0.00 11,100,021.58
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142610000185
SEC ID:99ZALM9W2 REG:REPO
Total DELIVER VS PAY-BELL(2) Total Principal: 49,400,000.00
Total Commiesion: 0.00
Total Income: 96.05
Total Net 49,400,096.05
MARGIN RELEASE-EUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/18/2014 21.580 -21.58
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/18/2014 0.0000 0.00
9/18/2014 0.00 0.00
CMS REF: 1142610576629 0.00 -21.58
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/18/2014 3,725.880 -3,725.88
BOUGHT DREYFUS TREAS 8:AGY CSH MGT 521 INC 9/18/2014 0.0000 0.00
9/18/2014 0.00 0.00
CMS REF: 1142610576630 0.00 -3,725.88
SEC ID:996085247 REG:05
101812014 6:24:19PM EDT 42 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base CYrrenc : USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
oCSGOoolO000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total MARGIN RELEASE-BUY(2) Total Prinoipal: -3,747.46
Total commission: O.W
Total Income: 0.00
Total Net: -3,747.46
FOREIGN HOLDER RELEASE-CD
CITIGROUP INC DEP SH REPSTG I/1000TH INT NON CUMULATIVE PM 9/18/2014 0.000 3,764.34
SER 9/18/2014 0.0000 0.00
9/18/2014 0.00 0.00
CITIGROUP BONDS CLASS ACT PROCEEDS FOR ACCOUWOCSF0752222 0.00 3,764.34
CMS REF: 1142610547614
SEC TO 172967556
CASH WITRDRAWAL-cur
CITIGROUP INC DEP SH REPSTG I/1000M INT NON CUMULATIVE PFD 9/18/2014 0.000 0.00
SEE 9/18/2014 0.0000 0.00
9/18/2014 0.00 -112.93
CITIGROUP BONDS CLASS ACT PROCESSING FEE FOR 0.00 -112.93
ACCOUNTOCSF0752222
CMS REF: 1142610547610
SEC ID: 172967556
Total U.S.DOLLAR(USDI(11) Total Principal: -1,541.45
Tote)Commiallon: 0.00
Total Income: 1,641.45
Total Net: 0.00
9/19/2014
U.S.DOLLAR(USDj
RECEIVE VS PAY-BUY
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/18/2014 11,100,000,000 -11,100,000.00
09 18 2014 0.0600% 9/19/2014 100.0000 0.00
/ / 9/19/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000189 0.00 -11,100,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 0000018T
CMS REF: 1142610219219 CLIENT REF:000060300022496
SEC ID:99Z NQ35 REG:REPO
101812014 6:24:19PM EDT 43 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ease Canency: USD
OCSACONSOMDATED 9/1/2014 - 9/30/2014
OCBG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/18/2014 46,900,000.000 -46,900,000.00
09/18/2014 0M600% 9/19/2014 100.0000 0.00
9/19/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -46,900,000.00
CLEARING BROILER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142610219254 CLIENT REF:000020300061141
SEC ID:99ZALNQ35 REG:REPO
Total RECEIVE VS PAY-BUY(21 Total Principal: -5s,000.000.o0
Total Commission: 0.00
Total Income: 0.00
Total Net: -5s,000,000.00
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/19/2014 -128.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 21-SEP-2014 FACTOR OF 9/19/2014 0.0000 0.00
9/19/2014 0.00 0.00
1.03617 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS PER 1142620014513
SEC TO 912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/19/2014 -580.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 21-SEP-2014 FACTOR OF 9/19/2014 0.0000 0.00
9/19/2014 0.00 0.00
1.00352 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS NET: 1142620014515
SEC ID:912828WUD REG:FRB
Total DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: nw
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-SELL
101812014 6:24:19PM EDT 44 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ba.Cavener: Ilan
0can-00NS0MDATED 9/1/2014 - 9/30/2014
OGSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/19/2014 -11,100,000.000 11,100,000.00
09/17/2014 0M600% 9/19/2014 100.0000 0.00
9/19/2014 0.00 18.50
CLOSE FOR 1142600254462 0.00 11,100,0I&SO
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142620000071
SEC ID:99ZALNHT8 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/19/2014 -46,800,000.000 46,800,000.00
1T 2014 0.0600% 9/19/2014 100,0000 0.00
09
/ / 9/19/2014 0.00 78.00
CLOSE FOR 1142600254498 0.00 46,800,078.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142620000075
SEC ID:99ZALNHT8 REG:REPO
Total DELIVER VS PAY-BELL(2) Total Principal: 67,900,000.00
Total Commission: 0.00
Total Income: 96.50
Totai Net 57,90Q096.50
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/19/2014 6,757.250 -6,757.25
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/19/2014 0.0 0.00
9/19/2014 0..00 00 0.00
CMS REF: 1142620599264 0.00 -6,TST.2525
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/19/2014 1,578,000 -1,578.00
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/19/2014 0.0 0.00
9/19/2014 0..00 00 .00
CMS REF: 1142620599265 0.00 -1,57
8.00
SEC ID:996085247 REG:05
Tote)MARGIN RELEASE-BUY(2) Total Principal: -8,335.29
Total Commission: O.GU
Total Income: 0.00
Total Net: .9,335.25
FOREIGN HOLDER RELEASE-CD
AMERICAN EXPRESS CO SR UNSECURED 9/19/2014 0.000 0.00
REC INT ON 2900000.000 UNITS PAY 09/19/14 RATE.0350000000 9/19/2014 0.0 0.00
9/19/2014 0..00 00 101,500.00
CMS REF: 1142620009010 0.00 101,500.00
SEC ID:025816AY5
101812014 6:24:19PM EDT 45 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON So.Carrancy: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
UNITED STATES TREASURYBULDTD 10/17/2013 0.000%04/17/2014 9/19/2014 0.000 6,738.75
INTEREST 9/19/2014 0.0000 0.00
9/19/2014 0.00 0.00
CMS REF: 1142620546961 0.00 6,73895
SEC ID:912796CHO
Total FOREIGN HOLDER RELEASE-CD(2) Total Principal: 6,738.75
Total Commission: 0.00
Total Income: 101,5U0.00
Total Net: 108,238.75
Total U.S.DOLLAR(USD)(10( Total Principal: -101,596.50
Tots)Commission: 0.00
Total Income: 101,596.50
Total Net 0.00
9/22/2014
U.S.DOLLAR[USD(
RECEIVE V8 PAY-BUY
FEDERAL NATL ASSN DISCOUNT NT DTD 12/17/2013 0.000% 12/12/2014 9/22/2014 11,100,000.000 -11,099,188.31
TRADING BROKER:DAIWA SECS AMER INC,NEW YORK 00000647 9/22/2014 99.9 0.00
9/22/2014 0.00.00 0.00
CLEARING BROKER:DAIWA SECS AMER INC,NEW YORK 00000647 0.00 -11,099,188.3131
CMS REF: 1142650085125 CLIENT REF:000060300022507
SEC ID:313589S87 REG:FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/19/2014 48,849,741,250 -48,849,741.25
09 19 2014 OM500% 9/22/2014 100.0000 0.00
/ / 9/22/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 0000018] 0.00 -48,849,741.25
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 0000018]
CMS REF: 1142620206495 CLIENT REF:000020300061154
SEC ID:99ZALNYT9 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/19/2014 11,700 000.000 -11,700,000.00
09/19/2014 0.0500% 9/22/2014 t00.0000 0.00
9/22/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142620206659 CUE" REF:000060300022501
SEC ID:99ZALNYT9 REG:REPO
101812014 6:24:19PM EDT 46 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Rase Cavener: Ban
WSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG0001MIX)
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/19/2014 15,150,258.750 -15,150,258.95
09/19/2014 0.0500% 9/22/2014 100.0000 0.00
9/22/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -15,150,25895
CLEARING BROILER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142620206771 CLIENT REF:000020300061155
SEC ID:99ZALN 9 REG:REPO
Totd RECEIVE VS PAY-RUY(4) Total Principal: -86,799,1S8.31
Total Conwiadon: 0."
Total Income: 0.00
Total Net -86,799,188.31
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/22/2014 -32.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 22-SEP-2014 FACTOR OF 9/22/2014 0.0000 0.00
9/22/2014 0.00 0.00
1.03616 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS HER 1142650014796
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/22/2014 -290.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 22-SEP-2014 FACTOR OF 9/22/2014 0.0 0.00
9/22/2014 0..00 00 0.00
1.0035 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142650014797
SEC ID:912828WUO REG:FEB
Told DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-MT
101812014 6:24:19PM EDT 47 Workbench
i� Custody Transaction History Report ID: CUA356
BNY MELLON Rase Cavener: USD
DCSD-CONSOMDATED 9/1/2014 - 9/30/2014
OCSGOOD1o000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL NATLMTG ASSN DISCOUNT NTDTD 09/27/20130.000% 9/22/2014 -11,700,000000 11,699,172.60
09/22/2014 9/22/2014 100.0000 0,00
9/22/2014 0.00 2,827.50
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 0.00 1I,900,000.00
11,700,000.000
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142629000251
SEC ID:313589G92 REG:FRB
FEDERAL NATL MTG ASSN DISCOUNT NT DTD 09/27/20130.000% 9/22/2014 -17,001,000.000 16,996,891.42
09/22/2014 9/22/2014 100.0000 0.00
9/22/2014 0.00 4,108.58
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 0.00 19,001,000.00
17,001,000.000
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142629000252
SEC ID:313589G92 REG:FRB
Total DELIVER VS PAY-MT(21 Total Principal: 28,694,063.92
Total Canunieaion: 0.00
Total Income: 6,936.08
Total Net: 28,701,000.00
DELIVER VS PAY.PD
COW NATL MTG ASSN 11 PASS THROUGH POOL 80023 VAR RATE 9/2/2014 -240A50 240.15
12/20/2026 9/22/2014 100.0000 0.00
9/22/2014 0.00 45.91
RECD PMN AMORT FOR AUGUST RECD INT FOR AUGUST ON 33,902.94 0.00 286.06
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520122558
SEC ID:36225CAZ9 REG:FRB
101812014 6:24:19PM EDT 48 Workbench
i� Custody Transaction History Report ID: CUA356
BNY MELLON xaao Carron,: USD
OCSD-CONSOMDATED 9/1/2014 - 9/30/2014
OCS(30001MIX)
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
GOVT NATL MTG ASSN E1 PASS THROUGH POOL 080088 VAR RATE 9/2/2014 -304.950 304.93
6/20/2027 9/22/2014 100.0000 0.00
9/22/2014 0.00 66.97
RECD PRIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 40,183.53 0.00 391.92
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520122721
SEC ID:36225CC20 REG:FRB
GOUT NATL MTG ASSN II PASS THROUGH POOL 080408 VAR RATE 9/2/2014 -574.060 574.06
5/20/2030 9/22/2014 100.0000 0.00
9/22/2014 0.00 163.65
RECD MIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 120,852.58 0.00 739.71
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520123239
SEC ID:36225CN28 REG:FRB
GOUT NATL MTG ASSN II PASS THROUGH POOL 80395 VAR RATE 9/2/2014 -67.400 67.40
0 0.00
4/20/2030 9/22/2014 100.0.00 19.58
RECD PRIN AMORT FOR AUGUST REC ,INT FOR AUGUST ON 14,462.07 0.00 86.98
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520123168
SEC ID:36225CNM4 REG:FEB
GOVT NATL MTG ASSN 11 PASS THROUGH POOL 80965 VAR RATE 9/2/2014 -440.590 440.59
9/20/2034 9/22/2014 100.0000 0.00
9/22/2014 0.00 165.69
RECD PEEN AMORT FOR AUGUST RECD INT FOR AUGUST ON 122,358.30 0.00 606.28
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520123727
SEC ID:36225DCB8 REG:FEB
Total DELIVER VS PAY-PD(5( Total Principal: 1,627.15
Total Commission: 0.00
Total Income: 461.80
Total Net: 2,088.95
101812014 6:24:19PM EDT 49 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base Carrenc : LED
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSGGoo10000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
DELIVER VS PAY-SELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/22/2014 -11,100,000.000 11,100,000.00
09/18/2014 0.0600% 9/22/2014 100.0000 0.00
9/22/2014 0.00 55.50
CLOSE FOR 1142610219219 0.00 11,100,055.50
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142650000179
SEC ID:99ZALNQ35 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/22/2014 -46,900,000.000 46,900,000.00
09/18/2014 0.0600% 9/22/2014 100.0000 0.00
9/22/2014 0.00 234.50
CLOSE FOR 1142610219254 0.00 46,900,234.50
TRADING BROI(ER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142650000225
SEC ID:99ZALNQ35 REG:REPO
Total DELIVER VS PAY-SELL(2) Total Principal: 58,000,000.00
Total Commission: 0.00
Total Income: 290.00
Total Net: 58,000,290.00
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/22/2014 11,179.690 -11,179.69
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/22/2014 0.0 0.00
9/22/2014 0..00 00 0.00
CMS REF: 1142650654203 0.00 -11,1T9.6969
SEC ID:996085247 REG:05
SELL-8ELL
DREYFU THE AGY CSH MGT 521 INC FUND 9/22/2014 93,240.790 93,240.79
SOLD DREYFUS TREAS&AGY CSH MGT 521 INC 9/22/2014 0.0000 0.00
9/22/2014 0.00 0.00
CMS REF: 1142650654204 0.00 93,240.79
SEC TO 996085247 REG:05
FOREIGN HOLDER RELEASE-CD
GOLDMAN SACHS GROUP INC/THE SR UNSECURED 9/22/2014 0.000 0.00
RECD INT ON 2000000.000 UNITS PAY 09 22 14 RATE.00YI1T8T80 9/22/2014 0.0000 0.00
/ / 9/22/2014 0.00 3,435.76
CMS REF: 1142650629214 0.00 3,435.76
SEC ID:38141GEG5
101812014 6:24:19PM EDT 50 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON So.Canancr: USD
OCSD-CONEOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JPMORGAN CHASE&CO SR UNSECURED MTN 9/22/2014 0.000 0.00
REC INT ON 1100000.000 UNITS PAY 09/22/14 RAM M93950000 9/22/2014 0.0000 0,00
9/22/2014 0.00 10,312.50
CMS REF: 1142650014082 0.00 10,312.50
SEC ID:466231JP5
Total FOREIGN HOLDER RELEASE-CD(21 Total Principal: 0.00
Total Commission: 0.00
Total Income: 13,748.26
Total Net: 13,748.26
Total U.S.DOLLAR(USD)(19( Total Principal: -21,436.14
Total Commission: 0.00
Total Income: 21,436.14
Total Net 0.00
9/23/2014
U.S.DOLLAa[USD(
RECEIVE VS PAY-SW
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/22/2014 15,076 320.940 -15,096,320A4
09/22/2014 0.0500 0 9/23/2014 t00.0000 0.00
9/23/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -15,076,320.94
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142650224117 CUE" REF:000020300061172
SEC ID:99ZALN5H7 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/22/2014 11,700,000.000 -11,700,000.00
09/22/2014 O.OSOOYo 9/23/2014 100.0000 0.00
9/23/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142650224473 CLIENT REF:000060300022509
SEC ID:99ZALNSH7 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/22/2014 48,923,679.060 -48,923,679.06
09/22/2014 0.0500% 9/23/2014 100.0000 0.00
9/23/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -48,923,679.06
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142650224502 CLIENT REF:000020300061171
SEC ID:99ZALN5H7 REG:REPO
101812014 6:24:19PM EDT 51 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON BaseCarrencr: USD
OCSO-CONSOLMATEn 9/1/2014 - 9/30/2014
OCBGOOol0000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total RECEIVE VS PAY-BUY(31 Total Principal: -75,700,000.00
Total Commission: 0.00
Total Income: 0.00
Total Net: -75,700,000.00
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/23/2014 -64.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 23-SEP-2014 FACTOR OF 9/23/2014 000000.00
9/23/2014 0..00 0.00
1.03614 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142660011994
SEC ID:912828TEO RE@ FRB
US TREASURY INFLATION INDEXED NOTKS 1/8%7/15/2024 9/23/2014 -145.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 9/23/2014
FACTOR OF 9/23/2014 0.0 0.00
9/23/2014 0..00 00 0.00
1.00349 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142660011995
SEC ID:912828WUO REG:FEB
Tote)DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-SELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DM 9/23/2014 -48,849,741.250 48,849,741.25
09/19/2014 0.0500% 9/23/2014 100.0000 0.00
9/23/2014 0.00 67.85
CLOSE FOR 1142620206495 0.00 48,849,809.10
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142660000305
SEC ID:99Z NYT9 REQ REPO
101812014 6:24:19PM EDT 52 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base Canener: USD
OCSD-CONEOMDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/23/2014 -11,900,000.000 11,700,000.00
09/19/2014 OM500% 9/23/2014 100.0000 0.00
9/23/2014 0.00 16.25
CLOSE FOR 1142620206659 0.00 11,900,016.25
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142660000362
SEC ID:99ZALNYT9 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/23/2014 -15,150,258.750 15,150,259.75
19 2014 0.0500% 9/23/2014 100,0000 0.00
09
/ / 9/23/2014 0.00 21.04
CLOSE FOR 1142620206791 0.00 15,150,279.79
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142660000532
SEC ID:99ZALNYT9 REG:REPO
Total DELIVER VS PAY-SELL(3) Total Principal: 75,700,000.00
Total Commission: 0.00
Total Income: 105.14
Total Net: 75,700,305.14
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/23/2014 16.250 -16.25
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/23/2014 0.0 0.00
9/23/2014 0..00 00 0.00
CMS REF: 11426606491T4 0.00 -166.2525
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/23/2014 88.890 -88.89
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/23/2014 0.0 0.00
9/23/2014 0..00 00 0.00
CMS REF: 1142660649175 0.00 -88.8989
SEC ID:996085247 REG:05
Total MARGIN RELEASE-BUY(2) Total Principal: -105.14
Total Commission: 0.00
Total Income: 0.00
Total Net: -105.14
Total U.S.DOLLAR(USD)(10) Total Principal: -105.14
Total Commission: 0.00
Total Income: 105.14
Total Net: 0.00
9/24/2014
101812014 6:24:19PM EDT 53 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON BaseCanener: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSGOOoIw00
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
Is FX Fee Net Local Amount
U.S.DOLLAR(USDI
RECEIVE VS PAY-BUY
FEDERAL HOME LN MTG CORP DISC NT DTD 12/23/2013 0.000% 9/23/2014 18,100,000.000 -18,098,881.32
12 22 2014 9/24/2014 99.9938 0.00
/ / 9/24/2014 0.00 0.00
TRADING BROKER:DEUTSCHE BE SECS INC,NY(NWSCUS33)00000573 0.00 -18,098,881.32
CLEARING BROKER:DEUTSCHE BE SECS INC,NY(NWSCUS33)00000573
CMS REF: 1142660212266 CLIENT REF:000020300061184
SEC ID:313397U25 REG:FRB
UNITED STATES TREASURY BILL DTD 05/22/2014 0.000%11/20/2014 9/23/2014 900,000.000 -899,992.88
TRADING BROKER:JPMORGAN CHASE BK/RBS SEC INC,NEW YORK 9/24/2 9/24/200 14 99.914 0..0000 0.00
.
00
00002230 0.00 -899,992.8888
CLEARING BROKER:JPMORGAN CHASE BK/RBS SEC INC,NEW YORK
00002230
CMS REF: 1142660223666 CMENT REF:000060300022515
SEC ID:912196EE5 REG:FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/23/2014 11,700,000.000 -11,700,000.00
09/23/2014 0.0500% 9/24/2014 100.0mo 0.00
9/24/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -1 I,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142660223966 CLIENT REF:000060300022514
SEC TO 99Z PBT9 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/23/2014 49,649,973.070 -49,649,973.07
09/23/2014 0.0500% 9/24/2014 100.0000 0.00
9/24/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -49,649,973.07
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142660224007 CLIENT REF:000020300061186
SECID:99Z PBT9 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/23/2014 42,550,026.930 -42,550,026.93
09/23/2014 0.0600% 9/24/2014 100.0000 0.00
9/24/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -42,550,026.93
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142660224180 CLIENT REF:000020300061187
SEC ID:99Z PBT9 REG:REPO
101812014 6:24:19PM EDT 54 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON xa.Canencr: UED
OCSACONSOMDATRD 9/1/2014 - 9/30/2014
OCBG00010000
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total RECEIVE VS PAY-BUY(51 Total PAvcipel: -122,898,974.20
Total Commission: 0.00
Total Income: 0.00
Total Net: -122,899,874.20
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/24/2014 -32.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 24-SEP-2014 FACTOR OF 9/24/2014 0.0000 0.00
9/24/2014 0.00 0.00
1.03613 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142670025314
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTKS 1/8%7/15/2024 9/24/2014 -145.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 9/24/2014
FACTOR OF 9/24/2014 0.0 0.00
9/24/2014 0..00 00 0.00
1.00348 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142670025315
SEC ID:912828WUO REG:FRB
Tote)DELIVER FREE-SW(2) Total Principal: 0.00
Total Commisaton: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-MT
FEDERAL HOME LN BE CONS DISC NT DTI)09/24/2013 0.000% 9/24/2014 -29,100,000.000 29,094,422.68
09/24/2014 9/24/2014 100.0000 0.00
9/24/2014 0.00 5,577.32
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 0.00 29,100,000.00
29,100,000.000
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142669000207
SEC ID:313385G91 REG:FRB
101812014 6:24:19PM EDT 55 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON So.Cavener: USD
OCSuMASOLrDATED 9/1/2014 - 9/30/2014
OCSGOODIMIX)
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL HOME LN MTG CORP DISC NT DTD 09/24/2013 0.000% 9/24/2014 -900,000 000 899,962.50
09/24/2014 9/24/2014 100.0000 0.00
9/24/2014 0.00 37.50
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 0.00 900,000.00
900,000.000
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS PER: 1142669000227
SEC ID:313397G96 REG:FRB
FEDERAL NATL MTG ASSN DISC NT DTD 09/30/2013 0.000%09/24/2014 9/24/2014 -17,200,000.000 17,197,635.00
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 9/24/2014 100.0000 0.00
9/24/2014 0.00 2,365.00
17,200,000.000 0.00 17,200,000.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142669000233
SEC ID:313589G98 REG:FRB
Total DELIVER VS PAY-MT(31 Total Principal: 47,192,020.18
Total Commission: O.OD
Total Income: 7,979.82
Total Net: 47,200,000.00
DELIVER VS PAY-SELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/24/2014 -15,076,320.940 15,076,320.94
09/22/2014 O.Os00Y 9/24/2014 100.0000 0.00
9/24/2014 0.00 20.94
CLOSE FOR 1142650224117 0.00 15,076,341.88
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142670001310
SEC ID:99ZALN5H7 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/24/2014 -11,700,000,000 11,700,000.00
09/22/2014 0M500% 9/24/2014 100.0000 0.00
9/24/2014 0.00 16.25
CLOSE FOR 1142650224473 0.00 11,700,016.25
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142690001995
SEC ID:99ZALNSH7 REG:REPO
101812014 6:24:19PM EDT 56 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON So.Carrencr: USD
OCSuMNSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/24/2014 -48,923,679.060 48,923,679.06
09/22/2014 0.0500Y 9/24/2014 100.0000 0.00
9/24/2014 0.00 67.95
CLOSE FOR 1142650224502 0.00 48,923,74T01
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142670001808
SEC ID:99ZALN5H7 REG:REPO
Total DELIVER VS PAY-SBLL(3) Total Principal: 75,700,000.00
Total Commisaion: 0.00
Total Income: 105.14
Total Net: 75,700,105.14
NAROIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/24/2014 23.370 -23.37
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/24/2014 0.0 0.00
9/24/2014 0..00 00 0.00
CMS REF: 1142670649459 0.00 -23.3737
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/24/2014 1,207.570 -1,207.57
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/24/2014 0.0 0.00
9/24/2014 0..00 00 0.00
CMS REF: 1142670649460 0.00 -1,207.5757
SEC ID:996085247 REG:OS
Total MARGIN RELEASE-BUY(2) Total Principal: -1,230.94
Total Commission: 0.00
Total Income: 0.00
Total Net: -1,230.94
Total U.S.DOLLAR(USD)(15) Total Principal: -0,084.96
Total Commission: 0.G0
Total Income: 8,084.96
Total Net 0.00
9/25/2014
U.S.DOLLAR NSDI
RECEIVE VS PAY-BUV
101812014 6:24:19PM EDT 57 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base Canencr: Ban
WSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSGG0010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/24/2014 11,700,000.000 -11,700,000.00
09/24/2014 OM500% 9/25/2014 100.0000 0.00
9/25/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142680065503 CLIENT PER 000060300022521
SEC TO 99ZALPL01 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/24/2014 50,299,999.670 -50,299,999.67
0.0500 0 09/24/2014 9/25/2014 100.0000 0.00
/ 9/25/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -50,299,999.67
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142680065519 CUE" REF:000020300061204
SEC ID:99ZALPL01 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT GTE 9/24/2014 41,900,000.330 -41,900,000.33
09/24/2014 O.Os00Y 9/25/2014 100.0000 0.00
9/25/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -41,900,000.33
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142680065577 CLIENT HER 000020300061205
SEC ID:99ZALPL01 REG:REPO
IN,W RECEIVE VS PAY-BUY(3( Total Principal: -103,900,000.00
Total Commiaalon: 0.00
Total Income: 0.00
Total Net: -103,900,000.00
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/25/2014 -32.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 25-SEP-2014 FACTOR OF 9/25/2014 0.0000 0.00
9/25/2014 0.00 0.00
1.03612 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS HER 1142680023158
SEC ID:912828TEO REG:FRB
101812014 6:24:19PM EDT 58 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ease Cavener: uBD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCBo0()0Iw O
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/25/2014 -290A00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 25-SEP-2014 FACTOR OF 9/25/2014 0.0000 0.00
9/25/2014 0.00 0.00
1.00346 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142680023162
SEC ID:91282SWUO REG:FRB
Total DELIVER FREE-SW(2) Total Principal: 0.00
Total Coeunission: 0.00
Total Income: MW
Total Net: 0.00
DELIVER VS PAY-MT
FEDERAL HOME LN MTG CORP DISC NTS DTD 09/25/2013 0.000% 9/25/2014 -200,000.000 199,990.53
09/25/2014 9/25/2014 100.0000 0.00
9/25/2014 0.00 9.44
PROCEEDS RECEIVED AS A RESULT OF A MATURITY FOR CASH AMOUNT 0.00 200,000.00
200,000.000
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142679000234
SEC ID:313397H2O REG:FRB
DELIVER VS PAY-PD
FEDERAL NATL MTG ASSN GM PASS THRU CTF POOL 257179 4 l/2% 9/2/2014 -2,232.680 2,232.68
4/1/2028 9/25/2014 100.0000 0.00
9/25/2014 0.00 223.54
RECD PON AMORT FOR AUGUST RECD INT FOR AUGUST ON 59,609.50 0.00 2,456.22
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520065706
SEC ID:31391NUC7 REG:FRB
101812014 6:24:19PM EDT 59 Workbench
i� Custody Transaction History Report ID: CUA356
BNY MELLON xa.Cavan,: USD
WSD-CONEOMDATED 9/1/2014 - 9/30/2014
OCSGO0030D00
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL NAIL MTG ASSN GM PASS THEO CTF POOL 357969 5% 9/2/2014 -4,042300 4,042,70
9/1/2035 9/25/2014 100.0000 0.00
9/25/2014 0.00 1,405.23
RECD PRIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 337,255.14 0.00 5,447.93
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520069746
SEC ID:31376=2 REG:FRB
FEDERAL NATL MTG ASSN GTD PASS THEO CTF POOL 466399 3.4009S 9/2/2014 -540.280 540.28
11/1/2020 9/25/2014 100.0000 0.00
9/25/2014 0.00 1,102.58
RECD MIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 376,629.36 0.00 1,642.86
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520070431
SEC ID:31381PDA3 REG:FRB
FEDERAL NATL MTG ASSN GM PASS THEO CTF POOL A10869 4 1/2% 9/2/2014 -982.260 982.26
6/1/2029 9/25/2014 100.0000 0.00
9/25/2014 0.00 13Z23
RECD PRIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 36,595.12 0.00 1,119.49
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520057958
SEC ID:3138EG6F6 REG:FRB
FEDERAL HOME LN MTG CORP MULMCLASS MTG PARIN CTFS GTD SEE 9/2/2014 -30,700.450 30,700.45
58 CL 2A 9/25/2014 100.0000 0.00
9/25/2014 0.00 6,958.69
RECD PMN AMORT FOR AUGUST RECD INT FOR AUGUST ON 1,284,681.68 0.00 37,659.14
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142670007888
SEC ID:31394 35 REG:OTC
101812014 6:24:19PM EDT 60 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Rase Cavener: USD
WSD-CONSOMDATEn 9/1/2014 - 9/30/2014
OCSGG0010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL NATL MTG ASSN GM REMIC PASSTHRU CTF REMIC TR 2011-3 9/25/2014 -16,]6].120 16,76I.12
CL FA 9/25/2014 100.0000 0,00
9/25/2014 0.00 452.81
RECD PRIN AMORT FOR SEPTEMBER RECD INT FOR SEPTEMBER ON 0.00 17,239.93
679,481.48 UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142680008472
SEC ID:31397QMO REG:FRB
FEDERAL NATL MTO ASSN GTD REMIC PASSTHRU CTF REMIC TR 2010-Ml 9/2/2014 -16,965.760 16,965.76
CL Al 9/25/2014 100.0000 0.00
9/25/2014 0.00 1,203.71
RECD PRIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 437,051.23 0.00 18,169.47
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142550008200
SEC ID:31398MGL4 REG:FRB
FEDERAL NATL MTO ASSN GM PASS THRU CTF POOL 945580 5% 9/2/2014 -8,083.910 8,083.91
6/1/2036 9/25/2014 100.0000 0.00
9/25/2014 0.00 1,331.85
RECD PRIN AMORT FOR AUGUST REC ,INT FOR AUGUST ON 319,644.77 0.00 9,415.76
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520079508
SEC ID:31403D323 REG:FEB
FEDERAL NATL MTG ASSN GM PASS THRU CTF POOL 748678 5% 9/2/2014 -35.640 35.64
10/1/2033 9/25/2014 100.0000 0.00
9/25/2014 0.00 39.31
RECD PRIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 9,435.10 0.00 74.95
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520080776
SEC ID:31403GXF4 REG:FEB
101812014 6:24:19PM EDT 61 Workbench
i� Custody Transaction History Report ID: CUA356
BNY MELLON Rase Cavener: USD
ocsD-rnxsouDarED 9/1/2014 - 9/30/2014
oGS0000loo00
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL NATL MTG ASSN GM PASS THRU CTF POOL 815971 5% 9/2/2014 -15,207.330 15,207.33
3/1/2035 9/25/2014 100.0000 0.00
9/25/2014 0.00 2,665.04
RECD PRIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 639,610.70 0.00 17,872.37
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520089156
SEC ID:31406MY8 REG:FRB
FEDERAL NATL MTG ASSN GTD PASS THEO CTF POOL 823358 VAR RATE 9/2/2014
100.600 TT 8.60
2/1/2035 9/25/2014 0.00 462.72
RECD MIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 243,002.58 0.00 1,241.32
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520090476
SEC ID:31406 5 REG:FEB
FEDERAL NATL MTG ASSN GTD PASS THEO CTF POOL 826080 5% 9/2/2014 -2,370.000 2,370.00
T/1/203s 9/25/2014 100.0000 0.00
9/25/2014 0.00 252.43
RECD PMN AMORT FOR AUGUST SECT,INT FOR AUGUST ON 60,583.50 0.00 2,622.43
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520091019
SEC ID:31409BM7 REG:FRB
FEDERAL NATL MTG ASSN GM PASS THEO CTF POOL 888336 5% 9/2/2014 -19,826.530 19,826.53
9/1/2036 9/25/2014 100.0000 0.00
9/25/2014 0.00 2,714.81
RECD PRIN AMORT FOR AUGUST SECT,INT FOR AUGUST ON 651,553.35 0.00 22,541.34
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520101310
SEC ID:3I410F4V4 REG:FEB
101812014 6:24:19PM EDT 62 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ea.Cavener: USD
OCSD-CONSm.mATED 9/1/2014 - 9/30/2014
OCSn000I0000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL NATL MTG ASSN GM PASS THEO CTF POOL MA0022 4 1/2% 9/2/2014 -1,856 130 1,856 13
4/1/2029 9/25/2014 100.0000 0.00
9/25/2014 0.00 225.40
RECD PRIN AMORT FOR AUGUST RECD INT FOR AUGUST ON 60,106.86 0.00 2,081.53
UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142520112316
SEC ID:3141WAY3 RE4.FRB
SOUNDVIEW HOME LOAN TR OPT3 A4 DTD 09/30/2005 VAR RT 9/25/2014 -16,354.530 16,354.53
11/25/2035 9/25/2014 100.0000 0.00
9/25/2014 0.00 100.90
RECD MIN AMORT FOR SEPTEMBER RECD INT FOR SEPTEMBER ON 0.00 16,455.23
257,011.63 UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142680014136
SECID:83611MG51 REG:DTC
WELLS FARGO HOME EQUITY 2 AI6 DTD 09/01/2004 VAR RT 10/25/2034 9/2/2014 -19,191.910 19,191.91
RECD MN AMORT FOR AUGUST RECD INT FOR AUGUST ON 90,992.13 9/25/2014 100.0 .
9/25/2014 0..00 00 399.13
UNITS 0.00 19,ST1.0404
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142620006307
SEC ID:94980GAG6 REG:OTC
Tote)DELIVER V8 PAY-PD(16) Total Principal: 155,935.83
Total Commission: MIX)
Total Income: 19,675.18
Total Net: 175,611.01
DELIVER VS PAY-SELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/25/2014 -11,700,000.000 11,700,000.00
09/23/2014 O.OSOOW 9/25/2014 100.0000 0.00
9/25/2014 0.00 16.25
CLOSE FOR 1142660223966 0.00 11,700,016.25
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142680000223
SEC ID:99ZALPBT9 REG:REPO
101812014 6:24:19PM EDT 63 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base Carrencr: USD
OCSD-CONSOMDATED 9/1/2014 - 9/30/2014
OCSGOo010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT LOU 9/25/2014 -49,649,973.070 49,649,973.07
09/23/2014 0.0500Y 9/25/2014 100.0000 0.00
9/25/2014 0.00 68.96
CLOSE FOR 1142660224007 0.00 49,650,042.03
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142680000243
SEC ID:99ZALPBT9 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/25/2014 -42,550,026,930 42,550,026.93
0M500%09 23 2014 9/25/2014 100.0000 0.00
/ / 9/25/2014 0.00 59.10
CLOSE FOR 1142660224180 0.00 42,550,086.03
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142680000369
SEC ID:99ZALPBT9 REG:REPO
Total DELIVER VS PAY-BELL(3) Total Principal: 103,900,000.00
Total Commieslon: 0.00
Total Income: 144.31
Total Net 103,900,144.31
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/25/2014 200,016.250 -200,016.25
BOUGHT DREYFUS TREAS It AGY CSH MGT 521 INC 9/25/2014 0.0 0.00
9/25/2014 0..00 00 . 5
CMS REF: 1142680669120 0.00 -200,016.25
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/25/2014 179,053.430 -179,053.43
BOUGHT DREYFUS TREAS 8:AGY CSH MGT 521 INC 9/25/2014 0.0000 0.00
9/25/2014 0.00 0.00
CMS REF: 1142680669121 0.00 -179,05SA3
SEC ID:996085247 REG:05
Total MARGIN RELEASE-BUY(2) Total Principal: -379,069.68
Total Comtniasion: 0.00
Total Income: 0.00
Total Net: -379,069.68
FOREIGN HOLDER RELEASE-CD
AMRESCO RESIDENTIAL SECURI 1 A DTD 1 012 0/19 99 VAR RT 06/25/2029 9/25/2014 0.000 0.00
000
INTEREST ON 9190463.00 PAYABLE 092514 9/25/2014 0.0 .
9/25/2014 0..00 00 126.1111
CMS REF: 1142680005004 0.00 126.11
SEC ID:03215PFN4
101812014 6:24:19PM EDT 64 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON BaseCaneneP: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCS000010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
FEDERAL HOME LN MTG CORP MULTTCLASS MTG PARTN CTFS GTD SEE 9/25/2014 0.000 0.00
K006 CL A2 9/25/2014 0.0000 0.00
9/25/2014 0.00 3,188.25
INTEREST DUE ON PAY DATE 09251 4 0.00 3,188.25
CMS REF: 1142680013601
SEC ID:31398VJ98
Total POEEIGN HOLDER RELEASE-CD(2) Total Principal: 0.00
Total Commission: 0.00
Total Income: 3,314.36
Total Net: 3,314.36
Total U.S.DOLLAR(USD)(29) Total Principal: -23,143.32
Total Commission: 0.00
Total lacome: 23,143.32
Total Net: 0.00
9/26/2014
U.S.DOLLAR(USDI
RECEIVE VS PAY-BUY
FEDERAL HOME LN UK CONS DISC PITS DTD 12/19/2013 0.000% 9/25/2014 100,000.000 -99,993.00
19 2014 9/26/2014 99.9930 0.00
12
/ / 9/26/2014 0.00 0.00
TRADING BROKER:DEUTSCHE BE SECS INC,NY(NWSCUS33)00000573 0.00 -99,993.00
CLEARING BROKER:DEUTSCHE BE SECS INC,NY(NWSCUS33)00000573
CMS REF: 1142680229250 CLIENT REF:000020300061222
SEC ID:313385T11 RED:FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/25/2014 50,349 992.520 -50,349,992.52
09/2s/2014 0.0500°h 9/26/2014 foo.0000 0.00
9/26/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -50,349,992.52
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142690061536 CLIENT REF:000020300061224
SEC ID:99ZALPPW3 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/25/2014 11,700,000.000 -11,700,000.00
09/25/2014 0.0500% 9/26/2014 100.0000 0.00
9/26/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,900,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 0000018Y
CMS REF: 1142690061551 CLIENT REF:000060300022527
SEC ID:99ZALPTW3 RED:REPO
101812014 6:24:19PM EDT 65 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Rase Curren,: Ban
OCSD-CONSOMDATED 9/1/2014 - 9/30/2014
OCSG0001MIX)
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/25/2014 41,850,007.480 -41,850,007.48
09/25/2014 0.0500% 9/26/2014 100.0000 0.00
9/26/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -4I,850,00748
CLEARING BROILER:JPMORGAN SECURITIES INC,NEW YORK 00000189
CMS REF: 1142690061585 CLIENT REF:000020300061225
SEC ID:99ZALPTW3 REG:REPO
Totd RECEIVE VS PAY-BUY(4( Total Principal: -103,999,993.00
Total Cotamisdon: 0.00
Total Income: 0.00
Total Net -103,999,993.00
DELIVER FREE-SW
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/26/2014 -128.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 28-SEP-2014 FACTOR OF 9/26/2014 0.0000 0.00
9/26/2014 0.00 0.00
1.03608 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS HER 1142690010160
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/26/2014 -435.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 28-SEP-2014 FACTOR OF 9/26/2014 0.0 0.00
9/26/2014 0..00 00 0.00
1.00343 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142690010161
SEC ID:912828WUO REG:FEB
Told DELIVER FREE-SW(2) Total Principal: 0.00
Total Commission: 0.00
Total Income: 0.00
Total Net: 0.00
DELIVER VS PAY-SELL
101812014 6:24:19PM EDT 66 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base C..m,: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/26/2014 -11,700,000.000 11,700,000.00
09/24/2014 OM500% 9/26/2014 100.0000 0.00
9/26/2014 0.00 16.25
CLOSE FOR 1142680065503 0.00 11,700,016.25
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142690000149
SECID:99ZALPL01 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/26/2014 -50,299,999.670 50,299,999.67
24 2014 0.0500% 9/26/2014 100,0000 0.00
09
/ / 9/26/2014 0.00 69.86
CLOSE FOR 1142680065519 0.00 50,300,069.53
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142690000211
SEC ID:99ZALPL01 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/26/2014 -41,900,000.330 41,900,000.33
09 24 2014 0.0500% 9/26/2014 100.0000 0.00
/ / 9/26/2014 0.00 58.19
CLOSE FOR 1142680065577 0.00 41,900,058.52
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142690000397
SEC ID:99ZALPL01 REG:REPO
Total DELIVER VS PAY-SELL(3) Total Principal: 103,900,000.00
Total Commission: 0.00
Total Income: 144.30
Total Net: 103,900,144.30
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/26/2014 16.250 -16.25
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/26/2014 0.0000 0.00
9/26/2014 0.00 0.00
CMS REF: 1142690772974 0.00 -16.25
SEC ID:996085247 REG:05
SELL-SELL
DREYFU THE AGY CSH MGT 521 INC FUND 9/26/2014 99,864.950 99,864.95
SOLD DREYFUS TREAS&AGY CSH MGT 521 INC 9/26/2014 0.0000 0.00
9/26/2014 0.00 0.00
CMS REF: 1142690772975 0.00 99,864.95
SEC ID:996085247 REG:05
101812014 6:24:19PM EDT 67 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Be.CarreneF: USD
WSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG000Iww
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total U.S. DOLLAR(USD)(11) Total Principal: -144.30
Total Commission: 0.00
Total Income: 144.30
Total Net: 0.00
9/29/2014
U.S.DOLLAR(USDI
RECEIVE VS PAY-BUY
FEDERAL NATL MTG ASSN DISC NT DTD 01/27/2014 0.000%01/20/2015 9/29/2014 200,000.000 -199,984.31
TRADING BROKER:JEFFERIES&CO INC,NEW YORK 00000019 9/29/2014 99.9922 0.00
9/29/2014 0.00 0.00
CLEARING BROKER:JEFFERIES&CO INC,NEW YORK 00000019 0.00 -199,984.31
CMS REF: 1142720093844 CLIENT REF:000060300022534
SEC ID:313588AV9 REG:FRB
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/29/2014 11,700,000,000 -11,700,000.00
09 29 2014 0.0500E 9/29/2014 100,0000 0.00
/ / 9/29/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000189 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 0000018T
CMS REF: 1142720152859 CLIENT REF:000060300022536
SEC ID:99ZALP21,6 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/26/2014 49,649 973.070 -49,649,973.09
09/26/2014 0.0500E 9/29/2014 t00.0000 0.00
9/29/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -49,649,973.07
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142690236042 CLIENT REF:000020300061240
SEC ID:99ZALPZCO REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/26/2014 42,550,026.930 -42,550,026.93
09/26/2014 OG500% 9/29/2014 100.0mo 0.00
9/29/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -42,550,02&93
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 0000018Y
CMS REF: 1142690236169 CLIENT REF:000020300061241
SECID:99ZALPZC0 REG:REPO
Total RECEIVE VB PAY-BUY(4) Total Principal: -104,099,984.31
Total Commission: 0.00
Total Income: 0.00
Total Net: -104,099,984.31
DELIVER FREE-8W
101812014 6:24:19PM EDT 68 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Rase Canencr: USD
OCSD-CONBULMA= 9/1/2014 - 9/30/2014
OCBG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/29/2014 -64.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 29-SEP-2014 FACTOR OF 9/29/2014 0.0000 0.00
9/29/2014 0.00 0.00
1.03606 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142720012269
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/29/2014 -290.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 29-SEP-2014 FACTOR OF 9/29/2014 0.0000 0.00
9/29/2014 0.00 0.00
1.00341 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142720012270
SEC ID:91282SWUO REG:FRB
Tote)DELIVER FREE-SW(2) Total Principal: 0.00
Total Coaaaiedon: 0.00
Total Income: 0.00
Total Net nw
DELIVER YE PAY-PD
NCUA GUARANTEED NOTES TR CI Al DTI) 11/10/20101.600% 9/26/2014 -13,553470 13,553.47
10/29/2020 9/29/2014 100.0000 0.00
9/29/2014 0.00 488.58
RECD PRIN AMORT FOR SEPTEMBER RECD INT FOR SEPTEMBER ON 0.00 14,042.05
366,431.69 UNITS
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142720000820
SEC ID:62888XAA2 REG:DTC
DELIVER VS PAY-BELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/29/2014 -50,349,992.520 50,349,992.52
09/25/2014 0.0500% 9/29/2014 100.0mo 0.00
9/29/2014 0.00 2N.79
CLOSE FOR 1142690061536 0.00 50,350,202.31
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142720000084
SEC ID:99ZALPTW3 REG:REPO
101812014 6:24:19PM EDT 69 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ea.Canencr: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCBGOM)IMI )
Trade/ Ex Date Unit$ Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT LOU 9/29/2014 -11,700,000.000 11,700,000.00
09/25/2014 0.0500Y 9/29/2014 100.0000 0.00
9/29/2014 0.00 48.75
CLOSE FOR 1142690061551 0.00 11,700,04895
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142720000092
SEC ID:99ZALPTW3 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/29/2014 -41,850,007,480 41,850,007.48
09 25 2014 OM500% 9/29/2014 100.0000 0.00
/ / 9/29/2014 0.00 174.38
CLOSE FOR 1142690061585 0.00 41,850,18186
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS HER 1142720000114
SEC ID:99ZALPTW3 REG: REPO
Total DELIVER VS PAY-BELL(3) Total Principal: 103,900,000.00
Total Commieslon: 0.00
Total Income: 432.92
Total Net 103,900,432.92
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/29/2014 14,487.360 -14,487.36
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/29/2014 0.0 0.00
9/29/2014 0..00 00 . 6
CMS REF: 1142720625091 0.00 -14,487.36
SEC ID:996085247 REG:05
SELL-SELLL
DREYFU THE AGY CSH MGT 521 INC FUND 9/29/2014 199,935.560 199,935.56
SOLD DREYFUS TREAS&AGY CSH MGT 521 INC 9/29/2014 0.0 0.00
9/29/2014 0..00 00 0.00
CMS REF: 1142720625090 0.00 199,935.5656
SEC ID:996085247 REG:05
FOREIGN HOLDER RELEASE-CD
FEDERAL NATL MTG ASSN GTD REMIC PASSTHRU UP REMIC TR 9/29/2014 0.000 0.00
2007-114 CL 9/29/2014 0.0000 0.00
9/29/2014 0.00 61.14
INTEREST DUE ON PAY DATE 09291 4 0.00 61.14
CMS REF: 1142720603677
SEC ID:31396K3Q5
101812014 6:24:19PM EDT 70 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Be.Carrene,: USD
OCSO-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
Total U.S. DOLLAR(USD)(13) Total Principal: -982.64
Total Commission: 0.00
Total Income: 982.64
Total Net: 0.00
9/30/2014
U.S.DOLLAR(Usm
RECEIVE VS PAY-BUY
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/29/2014 11,700 000.000 -11,900,000.00
09/29/2014 0.0000 0 9/30/2014 I00.0000 0.00
9/30/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -11,700,000.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142730125197 CUE" REF:000060300022557
SEC ID:99Z nK1 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/29/2014 48,200,077.000 -48,200,071.00
09/29/2014 0.0000% 9/30/2014 100.0000 0.00
9/30/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -48,200,077.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142730131918 CLIENT REF:000020300061291
SEC ID:99Z P9K1 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/29/2014 43,999,923.000 -43,999,923.00
09/29/2014 0.0000% 9/30/2014 100.0000 0.00
9/30/2014 0.00 0.00
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187 0.00 -43,999,923.00
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142730145458 CLIENT REF:000020300061292
SEC ID:99Z 1?!)K1 REG:REPO
Total RECEIVE VB PAY-BUY(3) Total Principal: -303,900,000.00
Total Commission: 0.00
Total Income: 0.00
Total Net: -103,900,000.00
DELIVER FREE-SW
101812014 6:24:19PM BUT 71 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Ease Canener: USD
OCSD-CONSOMDA= 9/1/2014 - 9/30/2014
OCBG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2022 9/30/2014 -32M00 0.00
TO BRING ACCOUNT INTO BALANCE WITH 30-SEP-2014 FACTOR OF 9/30/2014 0.0000 0.00
9/30/2014 0.00 0.00
1.03605 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142730013013
SEC ID:912828TEO REG:FRB
US TREASURY INFLATION INDEXED NOTES 1/8%7/15/2024 9/30/2014 -145.000 0.00
TO BRING ACCOUNT INTO BALANCE WITH 30-SEP-2014 FACTOR OF 9/30/2014 000000.00
9/30/2014 0..00 0.00
1.0034 0.00 0.00
TRADING BROKER:NON-BROKER TRADE,BOSTON 00009999
CLEARING BROKER:NON-BROKER TRADE,BOSTON 00009999
CMS REF: 1142730013014
SEC ID:912828WUO REG:FRB
Total DELVER FREE-8W(2) Total Principal: 0.00
Total Conwiedon: 0.00
Total Income: 0.00
Totem Net: 0.G0
DELIVER VB PAY-BELL
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/30/2014 -11,700,000.000 11,700,000.00
29 2014 0.0500% 9/30/2014 100.0000 0.00
09
/ / 9/30/2014 0.00 16.25
CLOSE FOR 1142720152859 0.00 11,700,016.25
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142730000728
SEC ID:99ZALP216 REG:REPO
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/30/2014 -49,649,973.070 49,&N,973.07
9/30/2014 100.0000 0.00
09/26/2014 0.0500% 9/30/2014 0.00 68.96
CLOSE FOR 1142690236042 0.00 49,650,042.03
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142730000015
SEC ID:99ZALPZC0 REG:REPO
101812014 6:24:19PM EDT 72 Workbench
Custody Transaction History Report ID: CUA356
BNY MELLON Base Carrena,: USD
OCSD-CONSOLIDATED 9/1/2014 - 9/30/2014
OCSG00010000
Trade/ Ex Date Units Principal
Settle/ Pay Date Trade Price Commission
Description Actual Settlement Date Misc. Expense Income
FX Fee Net Local Amount
JP MORGAN CORPORATE REPO REPURCHASE AGREEMENT DTD 9/30/2014 -42,550,026.930 42,550,026.93
09/26/2014 0.0500% 9/30/2014 100.0000 0.00
9/30/2014 0.00 59.10
CLOSE FOR 1142690236169 0.00 42,550,086.03
TRADING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CLEARING BROKER:JPMORGAN SECURITIES INC,NEW YORK 00000187
CMS REF: 1142730000031
SEC ID:99ZALPZC0 REG:REPO
Total DELIVER VS PAY-BBLL(3) Total Principal: 103,900,000.00
Total Commission: 0.00
Total Income: 144.31
Total Net: 103,900,144.31
MARGIN RELEASE-BUY
DREYFU THE AGY CSH MGT 521 INC FUND 9/30/2014 15,556.250 -15,556.25
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/30/2014 0.0 0.00
9/30/2014 0..00 00 0.00
CMS REF: 1142030648613 0.00 -15,556.2525
SEC ID:996085247 REG:05
DREYFU THE AGY CSH MGT 521 INC FUND 9/30/2014 128.060 -128.06
BOUGHT DREYFUS TREAS&AGY CSH MGT 521 INC 9/30/2014 0.0 0.00
9/30/2014 0..00 00 .0
CMS REF: 1142730648619 0.00 -128.06
SEC ID:996085247 REG:05
Total nARGM RELEASE-BUY(2) Total Principal: -15,684.31
Total Commission: 0.00
Total looms: 0.00
Total Net: -15,684.31
FOREIGN HOLDER RELEASE-CD
PRAXAIR INC SR UNSECURED 9/30/2014 0A00 0.00
REC INT ON 672000,000 UNITS PAY 09/30/14 RATE.0231250000 9/30/2014 0.0000 0.00
9/30/2014 0.00 15,540.00
CMS REF: 1142730016992 0.00 15,540.00
SEC TO 7400SPARS
Total U.S.DOLLAR(UBD)(11) Total Principal: .15,684.31
Total Commission: 0.00
Total looms: 15,684.31
Total Net: 0.00
101812014 6:24:19PM EDT 73 Workbench
Callan
September 30,2014
Orange County Sanitation District
7
Investment Measurement Service
Quarterly Review
The following report was prepared by Callan Associates Inc, ("CAI') using information from sources that include the following: fame truslee(sl: fund
custodiardid;investment managerls);CAI computer eoflwad,CAI investment manager and fund sponsor database;third party data vendors:and other outside
sources as directed by Me client.CAI assumes no responsibility for the accuracy or completeness of the information provided,or methodologies employed,by
any information providers eidernal to CAI.Reasonable care has been taken to assure the accuracy of the CAI database and computer software.In preparing
the following report, CAI has not reviewed the risks of Individual security holdings or the complia oscon-compliance of 'individual security holUMgs with
investment policies and guidelines of a fund sponsor,nor has II assumed any responsibility to do so.Copyright 2014 by Callan Associates Inc.
Table of Contents
September 30, 2014
Capital Markel Review 1
Active Management Overview
Market Overview 9
Domestic Fixed Income 10
Asset Allocation
Investment Manager Asset Allocation 12
Investment Manager Returns 13
Asset Class Risk and Return 17
Manager Analysis
PIMCO-Long Term Operating Fund 19
PIMCO-Liquid Ooerating Money 23
Callan Research/Education 25
Definitions 31
Disclosures 36
Callan
CALLAN
INVES
Callan INST TUTENTS
lit
CMR
Preview
Third Quarter 2014
This "Preview" contains excerpts from the upcoming Capital Broad Market Quarterly Returns
Market Review (CMR) newsletter, which will be published at
the end of the month. U.S.Egwy(Russell WOO) 0.01%
-588% — Non-US.EquIN(MSCI WE)
Bigger is Better U.S.Fred!(BarelaysAggregate) t 8.1g%
5.38% - Ni need(Cid Non-U.S.)
U.S. EQUITY I Lauren Mathias, CFA Cash(90-Dayaaills) 8.81%
After a volatile three months, U.S. equities managed a posi- sourgas:Cereal augroup.Merrill L nm,Msci.Ruseen investment ensue
tive return (S&P 500 Index +1.13%). Economic data in the
U.S., including housing improvements, declining unemploy-
ment, and tempered inflation, have instilled confidence. The All Eyes on Fixed Income
U.S. Federal Reserve announced the end of tapering with a U.S. FIXED INCOME I Kevin Machin
final $15 billion bond purchase in October. Though interest Risk aversion grew during the third quarter as global financial
rates currently remain low,hikes are on the horizon. In its most market volatility increased significantly, geopolitical events
recent estimate of U.S.GDP for the second quarter,the Bureau continued to create headwinds for investors, and the ECB
Continued on pg.2 announced further measures to loosen monetary policy. The
yield curve flattened for the third Consecutive quarter. Yield
spreads reversed Course and began to widen across most non-
My Kingdom for Stability Treasury sectors.The Barclays Aggregate Index landed just
NON-U.S. EQUITY I Malt Lai Continued on pg.4
Global volatility pummeled the markets at summer's end: Negative Territory
Intensified conflicts in Eastern Europe and the Middle East,
the Umbrella Revolution in Hong Kong,and the alarming resur- NON-U.S. FIXED INCOME I KylC Fekete
gence of Ebola,cast a pall over the markets.The MSCI ACWI There were few positive numbers in non-U.S.fixed income for
ex USA Index dropped 5.19%(+0.39%YTD). the third quarter. Divergent economic trends throughout the
globe, currency weakness, and increased geopolitical risks in
Small cap stocks were hit particularly hard (ACWI ex USA the emerging markets heavily impacted non-U.S. bond mar-
Small Cap Index: -6.72%). Energy (-10.01%) and Materials kets. The European and Japanese central banks loosened
(-9.52%)bore the brunt of America's flourishing dollar and flag- their monetary policies in an attempt to stimulate their lacklus-
ging Commodities. Notably, Brent Crude—a major Crude oil ter economies and fight off deflation.At home, the U.S. dollar
benchmark—tumbled below$95 from a high of$116 in June, inched upward as the higher yields offered by long-term Trea-
and looked to head to its mid-2012 lows. Only Health Care suries attracted global investors. The auto, yen, pound, and
stocks(+0.94%)were positive this quarter. dollar bloc(Australia, New Zealand, and Canada)all declined
Continued on pg.3 Continued on pg.5
Knowledge.Experience.Integrity.
U.S. Equity: Bigger is Better Quarterly Performance of Select Sectors
Continued from pg. 1 e Russell 1000 •Russell 20M
10%1 1 1 1
of Economic Analysis reported that the economy expanded to s%, 5.2% C3% 1
,
a 4.6% annual rate, up from 4.2% last month and the stroll- '
gest since late 2011.Geopolitical concerns and conflicts in the a%
-6% a.4x : d.4x
a.6%
Middle East and Ukraine weighed on markets in the quarter, ,
nox asX
adding to pressure from the vote for Scottish independence I I I I
and Argentina's selective default.The outcome was a wave of
p%I
uncertainty and a flight to safety. U.S. capital markets—par- ' ' 40.6% �
ticularly larger companies—beneftted from this"risk off"trade. -25%I
H.IM Oare InbrmaOGn utilities Energy
Technology
Large cap stocks easily led the pack (Russell 1000 Index, Source:Russell bvesMem Group
+0.66%),and large growth companies overtook value(Russell
1000 Growth Index, +1.49% vs. Russell 1000 Value Index,
-0.19%). Small cap (Russell 2000 Index, -7.36%) and mid Small and large cap sectors posted mostly negative quarterly
cap(Russell Midcap Index,-1.66%)stocks landed in the red; results (the exceptions were large cap companies in Tele-
value lost to growth in both capitalizations. Micro cap lagged communications, Information Technology, and Health Care).
behind other capitalizations for the quarter(Russell Microcap Energy and Utilities were hit the hardest. Oil and commodity
Index,-8.21%).The most pronounced distinction was between prices declined, pushing Energy—last quarter's top perform-
large and small cap:the S&P 500 bested the Russell 2000 by ing sector—to the bottom of the heap. Utilities dropped with
8%,the widest spread in 15 years. just the hint of interest rates rising. Large cap Health Care and
Technology posted positive results as the market's preference
Rolling One-Year Relative Returns (vs.Russell 1000) for growth over value provided a tailwind for these sectors.
Over the full quarter, investors generally showed a preference
e Russell loon Gm h a Russell100o4eme a Russell low for high quality,low beta,and larger size.
ax
Active management did well against indices in the third quar-
20%
ter; however, year to date very few active managers have
10%------ - - - - - - - - - - - - - - - - - - - outperformed.Mergers and acquisitions were prevalent along
with some high-profile IPOs. Stock correlations continued
0% to trend downward, and the CBOE Markel Volatility Index
10%------ d --- - - - - - - - - - - - - - - . (VIX) increased from previous below-average levels. Froma
style perspective, growth characteristics such as high ROE
-2ax--------- ----- - - - - -- - - - - - - -- were rewarded over the previous three months while low P/E
was not.
95 96 97 90 99 00 01 02 03 09 OS O6 07 OB 09 10 11 12 1314
Source'.Russell lnv srmeni Gmup
2 1 Callan
Non-U.S. Equity: My Kingdom for Stability Regional Quarterly Performance (U.S.Dollar)
Continued from pg. 1 -2.3Mh- MSCI Japan
The MSCI Emerging Markets Index (-3.36%) bested its J.26% - MSCI Emer9lro Markets
developed counterparts in the MSCI World ex USA Index d19x - MSCI ACWI ex USA
(-5.74%). Canada (4.47%) trumped its colleagues across .5.38% - MSCIEAFE
the pond in the MSCI EAFE Index (-5.88%). ACWI ex USA .590% - MSCI Pacific ex Japan
Growth(-4.83%)edged ACWI ex USA Value(-5.55%)for the 700% - MSCI Europe
quarter,though the latter has an 85 basis point lead YTD.The
Source:MSCI
dollar strengthened across the board, surging 8% against the
sure and the yen.
yen continued to fall, exports still declined 1.3% in August.
Polarizing statements from Mario Draghi characterized a vola- Fears of stagnation plagued the Abe administration when
tile quarter in Europe(MSCI Europe Index:-7.00%and-1.91% the nation's second-quarter 2014 GDP was revised down
YTD). Draghi's optimism in spite of a weak sure spurred an 7.1% on an annualized basis, the worst contraction since the
August rally, but an unexpected combination of a rate cut(to a first quarter of 2009. The only bright spots were Health Care
record 0.05%)and an ASS buyback announcement sent stocks (+1.03%) and Information Technology (+0.75%) stocks. Aus-
plummeting in September.Inflation fell to an estimated 0.3%in tralia (-7.93%) kept its 2.5% key rate, but was hampered by
September, a decline from August and a troubling downward worsening unemployment, which rose to 6.1% in September.
trend for the region. Health Care (+0.17%) scraped together New Zealand reelected Prime Minister John Key to a third
a win, while Consumer Discretionary (-12.67%) and Energy term, but once again was the region's weakest link (-8.92%).
(-11.69%) businesses suffered. The government of Portugal Singapore(-1.19%)landed in the red,but was nonetheless the
(-24.95%) had to rescue mammoth lender Banco Espirito area's best performer.
Santo, tanking the country's Financials sector(42.70%). Fin-
land (-2.88% USD, +5.26% local) was the best-performing Emerging economies fared well, landing far ahead of regional
country in Europe. peers (MSCI Emerging Markets Index: -3.36%, +2.75%
YTD). Like the broad market,emerging Health Care(+9.85%)
Japan(-2.30% USD, +5.79%local)boosted the MSCI Pacific counterbalanced Energy (-7.47%) and Materials (-8.16%).
Index, which fell 3.64% to land at -0.63% YTD. Though the China (+1.53%) suffered from a slew of sour data, prompting
Prime Minister Li Keqiang to ease property restrictions for the
first time since 2009. Russia (-15.07%) suffered from more
Rolling One-Year Relative Returns(vs.MSCI EAFE U.S.Dollar) sanctions, imposed due to the ongoing Ukraine (+2.32%)cri-
•MSCI Pacnc a MSCI Eumpe •MSCIEAFE sis. Egypt(+28.21%)benefitted from promised tax reform and
40% accelerating business activity. Stable and oil-rich United Arab
30%----- - -- - - - - - - - - - - - - - - - - - - - - Emirates (+22.92%) had the region's strongest YTD perfor-
2096--- -
----- - - - - - - - - - - - - - - --
manco(+g5.11°/4),though the lMF warned that oil prim fluctua-
10% ____ _ __ _ _ _ _ _ _ _ _-
bons could derail further growth. Mexico's(+2.09%)continued
°%
- ". . , success under reformist President Pena Nieto could not save
-10% - -- - - - - - - Y MSCI EM Latin America Index (-5.44%), as every other
-2096--- --------- - - - - - - - - - - - - - - - ' nation saw red. The MSCI Frontier Markets Index(+1.57%,
30% +22.44%YTD)outperformed the MSCI EM Index(-3.36%)for
-40%r95 56 97 98 99 00 01 02 0 04 05 06 07 08 09 10 11 12 18 14 the sixth straight quarter.
Source:MSCI
Knowledge.Experience.Integrity. 1 3
U.S. Fixed Income: All Eyes on Fixed Fixed Income Index Quarterly Returns
Continued from pg. 1 Ahsolnts Return
Ramian Aggr goue o.t]%
above zero at 0.17%for the quarter.The markets were abuzz -- - - -- - - - - - - - - ----
BerelaysTreasury 0.34%
__ _ _ __ _ _ _ _ _ _ _ _ ____
after Janus Capital Group surprised investors with the news earneyaAgenciea oes%
_ _ _ _
that Bill Gross was joining the firm and departing PIMCO. samisys crvtes a.28x
______ _ _ _ _ _ _ _ _ _ _ _ _
Barclays ABS 0.0-
Bercloys MBS 0.18%
The Fed has continued on the path toward eliminating its BemleysCredit______ _ _ _ _ _a_.o_3% ----
quantitative easing (QE) program by year end. October's pur- Bemlays Corp.High Yield ve]%
_ _
chase will total$15 billion,down from$25 billion in September. -3% -z% -1% o% 1%
Global risk aversion caused long-term rates to fall.The 20-and source'.Barclays
30-year yields dropped by 10 and 13 bps, respectively. Nev-
ertheless, there were some signs that short-term rates could
soon become unanchored.Two-year and five-year U.S. Trea- and quarter. Commercial mortgage-backed securities(CMBS)
sury yields increased substantially, 11 and 16 bps,respectively. and asset-backed securities(ABS)dipped slightly against like-
The result was a fattening of the yield curve that caught many duration Treasuries at 0.19% and 0.01%, respectively. Corpo-
investors by surprise.Short-term rates remained stable,as the rate spreads widened,with a strong selloff in BBB-rated paper.
Fed once again pegged the federal funds and discount rates During the quarter, Utilities, Financials, and Industrials under-
at 0.00%-0.25%and 0.75%, respectively.The breakeven rate performed 0.69%,0.45%,and 0,90%,respectively.
(the difference between nominal and real yields)on the 10-year
Treasury fell significantly(31 bps)to 1.97%during the quarter, High yield Corporate bonds were one of the worst performers
as TIPS underperformed nominal Treasuries. in the U.S.fixed income market, reversing a previous trend of
strong returns.The Barclays Corporate High Yield Index fell
Non-Treasury sectors generally underperformed like-dura- 1.87%. New issue activity is on pace with the record issuance
tion Treasuries. Agency mortgage-backed securities (MBS) of 2013. Year-to-date, 544 high yield bonds totaling approxi-
dropped0.39%on a relative basis,a reversal after a strong sec- mately$286 billion were issued.
Historical 10-Year Ylelds U.S.Treasury Yield Curves
•U.s.10-Yuo Treasury Yeld 1110-Year TIPS vdd •Breekeveningetbn Rate It September 30.2014 •June 30,2014 •September W,M13
5%
e%
5% ____ _ _ _ _ _ _ _ _ _ _ - 4%
4%_ _ ______ ____ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -
3% 3%
2%
2% _____ _
_ _ _ _ _ _ _ _ _ _ ___________
- - - - - - - - - - -
o% 1%
n%
05 OB 07 � OB 08 10 H � 12 � 13 14 � B% , .
Source'.Bloomberg 0 5 10 15 20 25 30
Mai(years)
Source:Bloomberg
4 1 Callan
Non-U.S. Fixed Income: Negative Territory Emerging Spreads Over Developed (By Region)
Continued from pg. 1 e Emerging Prances a Emerging EMEAPumn Mid&EMPo ) a Emarging Asia
too e a
substantially against the U.S.dollar.The Citi Non-U.S.World
Government Bond Index plunged 5.38% due to its currency
exposure. The hedged version of this index, CIO Non-U.S. 400bps - - - - - - - - - - - - - - - - -
WGBI-Hedged gained 2,01%, as yields dropped across the
board.
200 bps
Amid deflation concems, ECB President Mario Draghi
announced a comprehensive stimulus package that included Obrs ' ' ' ' ' ' ' ' '
10 it 12 13 14
cutting interest rates and purchasing asset-backed securities. source:Barclays
The German 10-year bund declined 30 bps to 0.95% in the
third quarter, 154 bps below U.S. Treasuries. Peripheral gov-
emment bonds continued to outperform bunds. Spanish and 10-Year Global Government Bond Ylelds
Italian yields both declined half a percentage point to 2.14% a U.S.TrasaMry a Ga.., •U.K. a Canada a Japan
and 2.33%, respectively.
6%
- - - ---------------
5%
The Bank of Japan announced it would sustain its monetary
easing policy after the country's GDP revision was lower than 4%- - - - - -------------
expected; the economy sank 7.1% in the second quarter, 3%----- - - - - - - - - - - ------ -
-
bringingonmoredeflationaryconcerns.The Japanese 10-year 2%
note dropped 7.06%in dollar terms for the third quarter,follow-
1%_____ _ _ _ _ _ _ _ _ _ _ __
ing the yen's 5.1%drop in September—the steepest fall since
January 2013. 0%. . . . . . . . . . . . . . . . . . . . . . . . . , . . . , . ,
05 N 07 0B 09 10 11 12 13 14
Geopolitical risks continued to plague the emerging markets Change in 10-Yeeryields from 2014 to 3014
and further hampered growth.The JPM GBI-EM Global Diver- Abpe U.S,Treasury
sifted Index,tracking government bonds that are denominated -30 bps Germany
in local currencies, plummeted 5.66% given the broad-based -25bpa - U.K.
currency weakness versus the U.S. dollar. The U.S. dollar- 4bpa Cana
denominated JPM EMBI Global Diversified Index declined Ibps Japan
0.59%for the quarter. 40eps -3teps -PObps -10eps 0bps
source:eioomeerg
The Brazilian 10-year note tumbled 8.62%in U.S.dollar terms.
In September, Moody's cut Brazil's credit rating to just above highest among developing Countries,amid the threat of default,
"junk"status after GDP data showed that the country is now in Russia's sanctions pushed the country's dollar-denominated
recession.The prospects of Brazilian President Dilma Rousseff debt down 3.31%,while local currency debt fell 15.88%in U.S.
being reelected also disheartened investors after the death of dollar terms. The Ukrainian economy also continued to suffer
reformist Candidate Eduardo Campos turned the election race as inflation remained elevated. Ukrainian dollar-denominated
upside down. Venezuela's 10-year yield reached 15.93%, the debt declined 9.36%.
Knowledge.Experience.Integrity. 1 5
This"Preview contains excerpts from the upcoming Capital Market Review(CMR)newsletter,which will
be published at the end of the month.The CMR is a quarterly macroeconomic indicator newsletter that
provides thoughtful insights on the economy and recent performance in the equity,fixed income,altent
lives,international,real estate,and other Capital markets.
If you have any questions or comments,please email institute@callan.com.
Editor-in-Chief—Karen Wdham
Performance Data—Alpay Soyoguz, CFA;Adam Mills
Publication Layout—Nicole Silva,Jack!Hoagland
About Callan
Callan was founded as an employee-owned investment consulting firm in 1973. Ever since, we have
empowered institutional clients with creative,customized investment solutions that are uniquely backed
by proprietary research,exclusive data,ongoing education,and decision support.Today,Callan advises
on more than$1.8 billion in total assets,which makes us among the largest independently owned invest-
ment consulting firms in the U.S.We use a client-focused Consulting model to serve public and private
pension plan sponsors,endowments,foundations,operating funds,smaller investment consulting firs,
investment managers,and financial intermediaries.For more information,please visit wermcallan.com.
About the Callan Investments Institute
The Callan Investments Institute, established in 1980, is a source of continuing education for those in
the institutional investment community.The Institute conducts Conferences and workshops and provides
published research,surveys,and newsletters.The Institute strives to present the most timely and relevant
research and education available so our clients and our associates stay abreast of important trends in the
investments industry.
®zeta Callan eased at.Inc.
Certain information herein has been compiled by Callan and is based on information dmaded by a variety of sources believed to
be reliable for which Callan has not necessarily settled the accuracy or completeness of or updated.This report is for Informational
purposes only and should not be construed as legal or tax advice on any matter Any investment decision you make on the belie of
this roped Is your sole responsibility You should consult with legal and tar advisers before applying any of gas information to your
particular mists,Reference In this abotto any product,service or entity should no he construed as a recommendation,approval,
affiliation or endorsement of such product,service or entity by Callan.Past performance is no guarantee of future results.This report
may consist of statements of opinion,which are made as of the fate they are expressed and are not statements of fact.The Callan
Investments Institute(the'Institute-)Is,and will be,the sole center and copyright holder of all material prepared or costumed by the
Institute.No parts has the right to reproduce,revise,resell,disseminate eMernally,disseminate to subsidiaries or parents,or post on
Internal web sites any part of any materal aRparetl or developed by the Institute,without the Institute permission,institute clients
only have the right to citrus such material Internally In their business.
e 1 Callan
Market Overview
Active Management vs Index Returns
Market Overview
The charts below illustrate the range of returns across managers in Callan's Separate Account database over the most
recent one quarter and one year time periods. The database is broken down by asset class to illustrate the difference in
returns across those asset classes.An appropriate index is also shown for each asset class for comparison purposes.As an
example, the first bar in the upper chart illustrates the range of returns for domestic equity managers over the last quarter.
The triangle represents the S&P 500 return. The number next to the triangle represents the ranking of the S&P 500 in the
domestic equity manager database.
Range of Separate Account Manager Returns by Asset Class
One Quarter Ended September 30,2014
6%
4%
2% (43)Ed
el
o%
E
� (2%)
Y
(4%)
(6%) (68)� (93)
(8%)
Domestic Non-US Domestic Non-US Real Cash
Equity Equity Fixed Income Fixed Income Estate Equivalents
s vs
nla 500 MSCI FA))FE Barclays Aggr Bd Cie N/on-U)S Gov NCREIF Index 3 Mon T43i11s
1 am
25M Percentile 0.85 1edian (1,31 (4]13) ((026 L(3.90) 3.08 0,09
15M Percent le (6.89� 1y 13) (10.84� (5�31) 0.82 0.02
90ih Percentile
Index • 1.13 (5,88) 0.17 (5.38) 2,63 0,01
Range of Separate Account Manager Returns by Asset Class
One Year Ended September 30,2014
zs%
20% (17)
Is%
M
$ 10% 8)
K
5% (62)H (62)
0% (83)
(5%) Domestic Non-US Domestic Non-Us Real Cash
Equity Equity Fixed Income Fixed Income Estate Equivalents
s.Bap No MSCI EAFE Barclays Ager Bd Citi Non-US Gov NCREIF Indez 3 Mon T-Bills
10M Percentile 20.92 8.23 9.0 5.67 21.88 1.01
25m Percentile 18]9 )Ot 7.02 349 17.08 0.80
Median 14.69 5.23 4.52 0.84 11.98 0.37
751h Percentile 8.42 273 2.76 0.54 9.3T 0.19
901h Percentile 4.13 1.38 1.43 1.20 7.01 0.098
'� Index • 19.73 4.25 3% (0.99) 11.26 0.05
L.A3 r Change County Sanitation District g
Domestic Fixed Income
Active Management Overview
Active vs.the Index
The 10-year U.S.Treasury traded in a 29 by range in the 3rd quarter, hitting a low for the year(2.34%)on August 281h and
an intro-quarter high of 2.63% on September 18th before closing the quarter at 2.52%. An improving U.S. economy put
upward pressure on rates, but a significant yield advantage relative to other developed markets helped to dampen this effect.
While the U.S.economy gained traction,news from Europe and Japan was far bleaker with euro zone GDP barely positive in
the 2nd quarter versus a +4.6% print in the U.S. Foreign investors were lured to the relatively high yields in the U.S. market,
propelling the dollar sharply higher. The Barclays Aggregate Index returned 0.2% in the 3rd quarter with U.S. Treasuries
performing the best. Both corporates and mortgages underperformed like-duration Treasuries for the quarter. High yield
corporate bonds sank nearly 2%as the sector endured heavy outflows amid concems over rich valuations. Bank loans,also
hit by outflows, returned -0.5% as measured by the S&P/LSTA Index. TIPS underperformed nominal Treasuries by a
significant margin as inflation expectations fell.The Barclays U.S.TIPS Index fell 2.0%versus a return of+0.3%for the U.S.
Treasury Index. The curve continued to flatten with the 30-year yield dropping 13 bps and the 5-year yield rising 16 bps as
investors contemplated the timing of eventual rate hikes. For the 3rd quarter, the median Core Bond manager returned
0.19%,essentially in line with the Barclays Aggregate Index(+0.17%).
Intermediate as.Long Duration
Longer duration managers outperformed intermediate and short duration strategies in the 3nd quarter.The median Extended
Maturity manager returned 0.97% while the median Intermediate manager posted a flat return and the median Defensive
manager returned 0.03%.
Barclays Universal: (0,03%)
Barclays Aggregate: 0.17%
Separate Account Style Group Median Returns Barclays Mo gagaal 0.10%
for Quarter Ended September 30,2014 Barclays High Yield: (1,67%)
Barclays US TIPS: (2.04%)
2%
I% ——————————————————————a . 0.9]009% 0 % 00 % 00 % 0. 5%
0%
0.34%
_MVN
(2%) TIM?
Actier%)
Cash Defensive Interred Core Core BxleMetl Acgve Mortggage HIaw
Cash Band Plus Maturity Duration Beck tl VIeM
Barclays Universal: 4.30%
Barclays Aggregate: 3.96%
Separate Account Style Group Median Returns Barclays Morlga l 3.78%
for One Year Ended September 30,2014 Barclays High Yield: 7.20%
Barclays US TIPS: 1.59%
20%
15%
13.36%
H
E
N
� 7.36%
S.S1%
3.59%
2.60%
0.76%
0%
AGive Defensive Interned Core Core Extended Active Margin. High
/'�,, 1,, Cal Bontl Plus Maturity Duration Backed Vieltl
Callan change County Sanitation Diatd t 10
Investment Manager Asset Allocation
The table below contrasts the distribution of assets across the Fund's investment managers as of September 30, 2014,with
the distribution as of June 30,2014. The change in asset distribution is broken down into the dollar change due to Net New
Investment and the dollar change due to Investment Return.
Asset Distribution Across Investment Managers
September 30,2014 June 30,2014
Market Value Weight Net New Inv. Inv.Return Market Value Weight
Domestic Flva Income
Long Term Operating Fund 461,383,236 Sa m% (44.300.000) (290,657) 505.913.893 85.49%
Liquid ODeratind Monies 58,918,705 11.32% (27,000,000) 26,713 85,891,992 14.51%
Total Fund 3520,301,941 100.0% $(71,300,000) S(263,944) 3591,8d5,885 100.0%
Callan Orm,e County Sandation District 12
Investment Manager Returns
The table below details the rates of return for the Fund's investment managers over various time periods ended September
30, 2014. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The
first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class.
Returns for Periods Ended September 30,2014
Last Last Last
Last Last 3 5 7
Quarter Year Years Years Years
Domestic Fixed Income
Long Term Operating Fund (0.06%) 1.07% 1.12% 2.41% 3.59%
Barclays GovtfCred 1-5 Year Idx (0.05%) 1.15% 1.32% 2.23% 3.28%
ML1-5 Govt/Corp (0.07%) 1.25% 1.44% 2.31% 3.30%
Liquid Operating Monies 0,05% 0,10% 0.14% 0,19% 0,72%
Citigroup 3-Month Treasury Bill 0.01% 0.04% 0.05% 0.08% 0.47%
Total Fund (0.04%) 0.93% 1.00% 2.02% 3.04%
Target* (0.05%) 1.00% 1.17% 1.86% 2.74%
Current Quarter Target=80.0%ML 1-5 Govl/Corp and 20.0%3mo T-Bills.
Callan 0mr,e County Santle,Inn Dlstnd „
Investment Manager Returns
The table below details the rates of return for the Fund's investment managers over various lime periods ended September
30, 2014. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The
first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class.
Returns for Periods Ended September 30,2014
Last Last Last
10 15 19
Years Years Years
Domestic Fixed Income
Long Term Operating Fund 3.68% 4.48% 4.85%
Barclays GovtfCred 1-5 Year Idx 3.34% 4.30% 4.63%
ML 1-5 Govt/Corp 3.36% 4.29% 4.66%
Liquid Operating Monies 1,77% 2.31% 2.98%
Citigroup 3-Month Treasury Bill 1.51% 1.99% 2.64%
Total Fund 3.32% 4.13% 4.57%
Target` 2.99% 3.83% 4.26%
Current Quarter Target=80.0%ML 1-5 GovVCorp and 20.0%3mo T-Bills.
Callan Omrr Cnmrty Santle,Inn DlsNtl ,4
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.
12/2013-
912014 2013 2012 2011 2010
Domestic Fixed Income
Long Term Operating Fund 1.43% (1.77%) 3.06% 4.59% 4.42%
Barclays GovtfCred 1-5 Year Idx 1.01% 0.28% 2.24% 3.14% 4,08%
ML1-5 Govt/Corp 1.11% 0.32% 2.47% 3.10% 4.17%
Liquid Operating Monies 0.08% 0.13% 0.17% 0.24% 0,25%
Ciligroup 3-Month Treasury Bill 0.03% 0.05% 0.07% 0.08% 0.13%
Total Fund 1.24% (1.49%) 2.70% 3.70% 3.68%
Target` 0.89% 0.26% 1.99% 2.49% 3.36%
Current Quarter Target=80.0%ML 1-5 GovVCorp and 20.0%3mo T-Bills.
Callan 0mr,,e County santlerinnDist c ,s
Investment Manager Returns
The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns
are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each
asset class represents the composite returns for all the fund's accounts for that asset class.
2009 2008 2007 2006 2005
Domestic Fixed Income
Long Term Operating Fund 5.52% 5.37% 7.21% 4.41% 2.47%
Barclays GovtfCred 1-5 Year Idx 4.62% 5,12% 7.27% 4,22% 1,44%
ML1-5 Govt/Corp 4.88% 4.65% 7.27% 4.26% 1.43%
Liquid Operating Monies 0.58% 2,40% 5.25% 5.05% 3,21%
Ciligroup 3-Month Treasury Bill 0.16% 1.80% 4.74% 4.76% 3.00%
Total Fund 4.65% 4.61% 6.84% 4.60% 2.59%
Target` 3.93% 4.08% 6.76% 4.36% 1.75%
Current Quarter Target=80.0%ML 1-5 GovVCorp and 20.0%3mo T-Bills.
Callan 0mr,,e County santle,InnDISNtl ,a
Asset Class Risk and Return
The charts below show the seven year annualized risk and return for each asset class component of the Total Fund.The first
graph contrasts these values with those of the appropriate index for each asset class.The second chart contrasts them with
the risk and return of the median portfolio in each of the appropriate CAI comparative databases. In each case, the
crosshairs on the chart represent the return and risk of the Total Fund.
Seven Year Annualized Risk vs Return
Asset Classes vs Benchmark Indices
4.0%
3.5%
3.0%
2.5%
2.0%
N
K
1.5%
1.0%
0.5%
0.0%
0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 14% 1A% 18% 2.0% 2.2% 24%
Standard Deviation
Seven Year Annualized Risk vs Return
Asset Classes vs Asset Class Median
3.5%
3.0%
2.5%
o 2.0%
N
� LS%
10% }��
05%
0.0%
0.4% 08% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 20% 2.2% 2.4%
Standard Deviation
Callan Omrr County 6an8a11nn DIsfti „
PIMCO-Long Term Operating Fund
Period Ended September 30, 2014
Investment Philosophy
PIMCOs Low Duration strategy revolves around a simple core investment philosophy of extensive research analytics, and
a highly effective decision making process. This strategy embodies three key principles: First, major shifts in portfolio
strategy should be driven by longer term views, not by short-term aberrations in interest rates. Second, consistent
investment performance is achieved by avoiding extreme swings in maturity/duration of the portfolio. Third,value can be
added through advanced tools such as futures,options,and volatility analysis as well as through adjustments to traditional
variables such as sector,coupon,and quality.
Quarterly Summary and Highlights Quarterly Asset Growth
• PIMCO-Long Term Operating Fund's portfolio posted a Beginning Market Value $505,973,893
(0.06)% return for the quarter placing it in the 98 percentile Net New Investment $44,300,000
of the CAI Defensive Fixed-Inc Style group for the quarter Investment Gains/(Losses) $-290,657
and in the 52 percentile for the last year.
• PIMCO-Long Term Operating Fund's portfolio outperformed Ending Market Value $461,383,236
the ML 1-5 Govt(Corp by 0.01% for the quarter and
underperformed the ML 1-5 Govt(Corp for the year by
0.18%.
Performance vs CAI Defensive Fixed-Inc Style(Gross)
6%
5% 25)"B(2 25)C BtO )
3% 22)"B12 g) B�2 )
( 27j A112 1111
1% 43)®Al5 Bj"Nl6 ( B
0% Ag
(1%) Laal quarts Land Laat3Yeara Laal5Yeam Laat]Yeam La A10Yedm Laati5Yeara Laatl9Years
Year
10M Perpentile 0.16 201 2,41 3.08 3.56 363 4A5 415
250,Percentile 006 140 1,66 2,33 3,23 3.50 429 466
Median 0.03 1,10 1,19 1.79 2.85 3.17 3.92 434
75M Percentile 0.01 des 0,92 1.43 2.43 2.89 3.71 4.14
90M Pe.nllle (002) 084 0.68 1,20 221 2.64 350 401
PIMCO-Long Term
Operating Fund *A (0.06) 1.07 1,12 2.41 3.59 3.68 448 465
Ba ,lara GoWCled
1-5 Year lux •B (0.05) 1.15 1,32 2.23 3.28 3.34 4.30 4,63
ML 1-5 G.WCmp ♦ (0.07) 125 1" 2.31 3.30 3.36 4.29 466
CAI Defensive Fixed-Inc Style(Gross)
Relative Return vs ML 1-5 Govt/Corp Annualized Seven Year Risk vs Return
2.0% 4.5%
15% __ _______ __ _ _
E1.0%
3.5%
•. .
0.5% - ____ __ _ E
y 3.0%
15
00%
_ 5%
(OS%) _______ _ _
T1
(1.0%) __ _______ __ _ 2.0%
(1.5%) 1.5%
07 2008 2009 2010 2011 2012 2013 2014 0 1 2 3 4 5 6
PIMCO-Long Term Operating Fund Standard Deviation
Callan Orange County sanitation corned 19
PIMCO-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 two charts illustrate the manager's
ranking relative to their style using various risk-adjusted return measures.
Performance vs CAI Defensive Fixed-Inc Style(Gross)
20%
15%
16% 16� ®B B0 A
0 � 8)
(5%)
(ID%) 12113-9/14 M13 2012 2011 2010 2009 2008 2007 2006 2005
10th Pementile 1.52 1.23 4.46 2.72 4.69 13.74 6.63 7.03 5.11 2.61
25th Percentile 1.06 0.79 2.60 228 4.01 sm 5.61 6.88 4.84 2.40
Median 0.86 0.0 1.81 1.85 3.18 5.91 3.75 6.39 4.64 2.16
75th Pemenele 0.63 0.39 1A6 162 2.73 2.53 (0.17) 5A2 4A6 1.97
sour Pemenlile 0.55 0.15 0.92 1.44 2.42 1.82 (347) 3.75 4.32 1.84
PIMCO-Long Term
Operating Fund *A 1.43 (LA) 3.06 469 4,42 5.52 5.37 7.21 441 2.47
Barclays GOW/Gmd
1-5 Year 1& 0B 1.01 0.28 2.24 3.14 4.08 4.62 5.12 7.27 4.22 1.44
ML1-5
GOW/GOrp ♦ 1.11 0.32 2.47 3.10 4.17 4.88 4.65 7.27 4.26 1.43
Cumulative and Quarterly Relative Return vs MIL 1-5 Govt/Corp
6%
6%
in
�5 2%
N
a 0%
v
K
(6%)- F
04 2005 2006 2007 2006 2009 2010 2011 2012 2013 2014
PIMCO-Long Term Operating Fund N Barclays GOWGred 1E Year Idx N CAI Defensive F-I We
Risk Adjusted Return Measures vs ML 1-5 Govt/Corp
Rankings Against CAI Defensive Fixed-Inc Style(Gross)
Seven Years Ended September 30,2014
2.5
4 0 ®A�fi6
3 �BS933
A96 pp El I A5
(0 A 99 (05) g�g9g9
(2� Alpha Traynor (1"$) Information Sharpe Excess Return
RMO RMie Re ie Ratio
t On Percantile 1.27 5.73 loth Percentile 1.30 1.73 0.16
25th Percentile OA6 4.20 25th Percentile 0.80 1.50 (065)
Median 0.50 3.54 Median 0.56 1.30 O.41)
751h Percentile 0.17 3.04 75m Percentile 0.18 1.08 30.68)
son Percentile 0.W 2.82 son Percentile o" 0.98 0.87
PIMCO-Long Term PIMCO-Long Term
Operating Fund •A (038) 2.46 Operating Fund •A (0.41) 1.15 0.27
Bemis,GOWGred Bed.,GOWCred
/'�
1-5 Year Mx ■B (0.15) 2.62 1-5 Yearldx •B (0.62) 1.27 (0.09)
Callan Odense County Sanitation District 20
PIMCO-Long Term Operating Fund
Bond Characteristics Analysis Summary
Portfolio Characteristics
This graph compares the managers portfolio characteristics with the range of characteristics for the portfolios which make up
the manager's style group. This analysis illustrates whether the manager's Current holdings are consistent with other
managers employing the same style.
Fixed Income Portfolio Characteristics
Rankings Against CAI Defensive Fixed-Inc Style
as of September 30,2014
4,0
3.5
30
2.5 fl)♦ (81 (161
2.0
1.5
1.0 (35) (64) 1801
0.5
0.0
(0.5)
(t'o) Average Effective Coupon CA
Qumran dr. Yield Rate Convealty
1 Oth Percen1le 2.10 2.67 2.71 3.40 0.08
25th Percentile 1.90 2.17 1.40 2.64 005
Median 1.85 1.97 1.03 1.97 0.02
75th Percenl i.64 1.88 0.89 1.53 (006)
901h Percen0le 1.39 i.fi9 0.67 1.08 0.22
PIMOO-Long Tam
Operating Fund • 2.18 2.59 0.96 1.10 006
Bamlaye GO Cred 1-5 Ye ♦ 2.67 2.78 1.17 2.27 O07
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
September 30,2014 ��� vs CAI Defensive Fixed-Inc Style
�� rsy
6.0%---
Cash 1.2% oAo
X
00-
2S. . % g m
US Trsy 59.4% AA4 (32)
34)
USacon, .1% AA
1
4.0%
US Muni M
1.0%
US was 1.3% A-
US ASS 16.5% A weighty Average
Quality Rating
US E G Related IOn Percentile AAA
1S5% 25th Percentile M.
Median M
UB CMSS 5.9% 75th Percentile M-
901h Percentile A4
0% 10% 20% 30% 40% 50% 60% 70% 80% PIMCPLong Term
OlC,Long FundTerm • M4
0 PIMCO-Lon9 Tenn Operetin9 Fund CAI Defensive Fixed-Inc Syle Bamlays
/'�
0 Barclays GoWCred 1-5 Ye GoWCred 1-SYe ♦ M4
Callan Gramre County Sanitation Distdd 21
PIMCO-Long Term Operating Fund
Portfolio Characteristics Summary
As of September 30, 2014
Portfolio Structure Comparison
The charts below compare the structure of the portfolio to that of the index from the three perspectives that have the greatest
influence on return. The rest 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
Cash US Trsy
56% 59%
US RMBS
1%
us$carp
9%
US Muni 4us$
Govl Related
4% US Tray Us$corp 15%
30% 25%
PIMCO-Long Term Operating Fund Barclays GoWCredit 1.5 Year
Duration Distribution weighted Average: Deranon
60% 0PIMGO-Long Term Operating Fund 2.18
50%o AZ� Barelap GovWreUQ 1-5 Year: 2.67
E
d 33.3% 3(41%
30% ———— ———— __
u L _____ 21.0%
z0% ____ ____ __ __ __ ____
12.0%
0% 0.0% 0.0% 3.0% 0.6% 1A% 0.0% 0.0% 0.0%
'0 0-1 1-2 2-3 3-5 5-7 7-10 >10
Years Duration
Quality Distribution weiehted Average. Gualiry
100% : PIMCG-Long Term Operating Fund AA+
0 84.0% Barclays GovJGn,dil l-5 Year: AA+
p 60%
OdaR
a0%
. ————
% ———9———
60% _________ _____ ____
N20% ��
50% 6.9% 110% 9%
0 0.0%
AAA AA A BBB
Quality Rating
Callan orange county Sandation Diana
PIMCO-Liquid Operating Money Net
Period Ended September 30, 2014
Investment Philosophy
PIMCO utilizes a core investment philosophy in managing its short term portfolios, similar to all PIMCO's fixed income
accounts. Key to the short term approach, where client objectives permit, is to often extend maturities beyond three
months. Moving to slightly longer securities also greatly expands the opportunity set of investments, allowing PIMCO to
effectively utilize its analytical capabilities to identify value without significantly differing the variability of returns. In
particular, the value added in their short term accounts is enhanced by their ability to use non-traditional, short-term
instruments, including floating rate securities, high coupon mortgages,short tranche CMO's,and callable corporate bonds.
These can trade for extended time periods as essentially short term securities,while providing high yields.They emphasize
extremely high credit quality in their short term accounts.Their view is that the reward for taking additional credit risk on a
short term security is low,while the potential for loss, in the event of an issuer default,is significant.
Quarterly Summary and Highlights Quarterly Asset Growth
• PIMCO-Liquid Operating Money Net's portfolio posted a Beginning Market Value $85.891,992
0.01% return for the quarter placing it in the 14 percentile of Net New Investment $-27,000,000
the MF - Money Market Funds Database group for the
quarter and in the 99 percentile for the last year. Investment Gains/(Losses) $26,713
• PIMCO-Liquid Operating Money Net's portfolio outperformed Ending Market Value $58,918,705
the Citigroup 3-Month Treasury Bill by 0.00%for the quarter
and underperformed the Citigroup 3-Month Treasury Bill for
the year by 0.09%.
Performance vs MF-Money Market Funds Database(Net)
3.5%
3.5%
2. 37)Kn
0%
2.0% 311�112',
1.s% 41)®(24
1.0%
0.5% 57)®(30',
dd%
(0,5%)L Lest Last 3 Years Uotfi Years Lasl]Years LastlOYBars Les115Yeers Lest 19 Yet.
Year
1 OT Percentile 0,01 ol0 0.11 0,11 0.73 1.76 2,18 285
25th Percentile 0.00 002 0.03 0.03 pad 1.60 2.03 2.70
Median 0.00 0.01 0.01 0.01 0.50 1.46 1.87 2.65
75M Percentile too ood out 0,01 0.38 1.33 114 z41
9m Perwntil, 000 too too 0,00 0.31 1.19 156 223
PIMC0.Uquld
Operating Ali Net • 001 (005) (0,01) 0.04 0,57 1.61 2.16 283
CiOgroup 3-Month
Treasury Bill ♦ 0.01 0.04 0,05 0.08 0.47 1.51 1.99 2.64
Relative Returns vs Cumulative Returns vs
Citigroup 3-Month Treasury Bill Ciggroup 3-Month Treasury Bill
0.25% 1.2%
- PIMCO-Liquid Operating Money Net
0 o%, -- ------- -- -- - in t0% - Money Market Fds OB
E
E 015% _ _ _______ __ __ _ X 0.8%
Ae
am
_
0 o.a%5%
a0.0 % E
(0.05% U ob% _
(0.10%) 07 2008 2009 2010 2011 2012 2013 2014 (02%)
07 2008 2009 2010 2011 2012 2013 2014
10 PIMCO-1-i itl operating Money Net
Callan Orange County Sandation0istind 21
PIMCO-Liquid Operating Money Net
Return Analysis Summary
Return Analysis
The graphs below analyze the manager's return on both a dsk-adjusted and unadjusted basis.The first chart illustrates the
manager's ranking over different periods versus the appropnate style group.The second chart shows the historical quarterly
and cumulative manager returns versus the appropriate market benchmark. The last two charts illustrate the manager's
ranking relative to their style using various risk-adjusted return measures.
Performance vs MF-Money Market Funds Database(Net)
6%
5% 5g�18 21�15
5%
3% 159�11
2% 60®36
0%
(1%) 12111 wi4 2013 2012 2011 2010 2000 2008 2007 2006 2005
loth Percentile o.o0 0.09 0.19 0.08 0.15 0.53 2.78 5.22 4.95 3.07
25th PercenNe 0.01 0.02 0.03 003 0.05 0.29 2.46 5.01 479 2.88
Median 0.01 0.01 0.01 0.01 0.01 0.12 2.03 4.73 4.53 2.65
75th Percertile 0.00 0.00 0.00 0.00 0.01 0.03 1.46 4.39 4.23 2.38
9Mh Percentile 0.00 ow 0.00 0.00 0.00 0.01 1.06 3.99 3.87 2.03
PIMCO-Liquid
Operating Money Net • (0.03) (0.02) 0.02 009 0.10 0.43 2.25 5.09 4.89 3.06
Ctlgroup 3-Month
Treasury 6lll ♦ 0.03 0.05 0.07 0.08 0.13 0.16 1.80 4.74 4.76 3.00
Cumulative and Quarterly Relative Return vs Cltlgroup 3-Month Treasury Bill
2.0%
1.5%
N
1.0%
to 0.5%
a
> 0.0%
(0.5%)
it.0%) --- --- - ___ __ ___
(1.5%)
04 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
10 PIMC0.Liquitl Operating Money Ne[ Money Market Ftla DB
Risk Adjusted Return Measures vs Cltlgroup 3-Month Treasury BIII
Rankings Against MF-Money Market Funds Database(Nat)
Seven Years Ended September 30,2014
0.40 1.5
0.30 1.0 (16)
ago a5 9)
0.10 )3a) •I2s) 0.0
0.00 05)
(0.10) (1.0)
(0.20) (1 s)
(0.30) Alpha Traynor (2'0) In(onna[ion Sharpe Eaceaa Return
Red. Ratio Rise Ratio
I on Percentile 0.23 0.34 1001 Percentile 093 028 101
250,Percentile 0A0 0.10 2511 Percentile am 0.10 0,66
Median 0.01 0.05 Manion 0.11 0.06 0.25
15th Percentile o 08 0.14 75th Percentile (1.12) 0.34 1 23)
901h Percentile 0.13 (0.16) grit,Percentile 0 W) do 5m) 166)
PIMC0.Liquitl PIMCO-Li uitl
operating Money NO • 0.07 0.06 Operating Money NM • 0." 0.06 0.82
Callan Orange County Santlation DiaNct 24
CALLAN
Callan INST TUTENTS l THIRD QTR 2014
l Education
Research and Educational Programs
The Callan Investments Institute provides research that keeps clients updated on the latest industry trends while help-
ing them learn through carefully structured educational programs. Below are the Institute's recent publications—all of
which can be found at www.callan.cum/research.
White Papers
Saving Public Defined Benefit Plans:Talking Points
The funded status of public employee defined benefit IDS)retirement plans continues to garner
great debate in the industry and press.DB plans are the primary vehicle for ensuring retirement
- income security for public workers,and Callan believes these plans are viable and necessary
in this sector.This paper provides talking points to help to move the discussion forward around
the importance of IDS plans.
Fixed Income Benchmark Review
This data-driven report is designed to aid in portfolio monitoring and evaluation by helping
- readers assess the similarities and differences in coverage, performance,and characteristics
of popular fixed income indices alongside comparable Callan manager style and database
---- groups.The indices cover most of the global bond markets.
2014 Nuclear Decommissioning Funding Study
Nuclear decommissioning trusts have faced pressure in recent years in multiple areas, includ-
ing challenging capital markets and unresolved waste burial issues. Despite rising costs and
declining contributions,funding levels have improved over the past six years and currently stand
at 73%.This study covers 27 investor-owned and 28 public power utilities with an ownership
interest in the 100 operating nuclear reactors and nine of the non-operating reactors in the U.S.
Private Equity Policy Benchmarking and Performance Attribution
This paper focuses on the conundrum that private equity Introduces to total plan policy bench-
marking and performance attribution. There are fundamental pdvale/public comparison mis-
matches and a range of options available, which makes the choice of a private equity policy
benchmark and attribution approach an inherently political decision that requires consensus and
ongoing education.In this analysis,we explore the causes and review the available options that
investors can consider.
Quarterly Publications
DC Observer&Callan DC Index-:A quarterly newsletter that offers Callan's observations on a variety of topics per-
taining to the defined contribution industry.Each issue is updated with the latest Callan DC Index^" returns.
Capital Market Review: A quarterly macroeconomic indicator newsletter that provides thoughtful insights on the
economy as well as recent performance in the equity,fixed income,alternatives,international, real estate,and other
capital markets.
Hedge Fund Monitor.A quarterly newsletter that provides a current view of hedge fund industry trends and detailed
quarterly performance commentary.
Private Markets Trends:A seasonal newsletter that discusses the market environment,recent events,performance,
and other issues involving private equity.
Quarterly Data:The Market Pulse reference guide covers the U.S.economy and investment trends in domestic and
international equities and fixed income, and alternatives. Our Inside Callan's Database report provides performance
information gathered from Callan's proprietary database,allowing you to compare your funds with your peers.
RealAssets Reporter.A recurring newsletter that offers Callan's data and insights on real estate and other real asset
investment topics.
Surveys
2014 Investment Management Fee Survey
This survey captures institutional investment management fee payment practices and trends.
We supplemented survey data(from 72 fund sponsors,$859 billion in assets and 211 invest-
ment managers, $15 trillion in AUM)with information from Callan's proprietary databases to
establish the trends observed in this report.Callan conducted similar surveys in 2004, 2006,
2009,and 2011.
® 2014 DC Survey le This annual survey presents findings such as: Plan sponsors made changes to target da
in
funds n 2013013 an and will continue to do so in 2014;Passive investment offerings are increasingly
common in the core investment lineup;Plan fees continue to be subject to considerable down-
ward pressure;Retirement income solutions made little headway in 2013;and much more.
® and t Cost of Doing Business Survey
Callan compares the costs of administering funds and trusts across all types of tax-exempt
and tax-qualified organizations in the U.S.,and we identify ways to help institutional investors
manage expenses.We fielded this survey in April and May of 2013,The results incorporate
responses from 49 fund sponsors representing$219 billion in assets.
m, ■® 2013 Risk Management Survey
The 2008 market crisis put risk in the Spotlight and prompted fund fiduciaries to look at risk
management in a new light.Callan fielded this survey in November 2012. Responses came
from 53 fund sponsors representing$576 billion in assets.The vast majority of this group has
taken concrete steps in the past five years to address investment risks.
Callan Callan Investments Institute
Events
Did you miss out on a Callan conference or workshop? If so, you can catch up on what you missed by reading our
'Event Summaries"and downloading the actual presentation slides from our webshe.Our most recent programs:
7�, ■a The 2014 National Conference Summary features a synopsis of our speakers:David Ger-
gen,Janet Hill, Laura Carstensen,and the 2014 Capital Markets Panel.The Summary also
reviews our three workshops:managing corporate pension risk,peripheral real asset strate-
gies, and target date fund analysis. Slide-decks of the conference presentations are also
available on our website.
Our June 2014 Regional Workshop,Policy Implementation Decisions,discussed portfolio
biases and the challenges therein.Welooked at the common biases,how they've worked(or
not)for the portfolio,and evaluating time horizons.Our speakers were Callan's Jay Kloepfer,
Andy Isen, and Mike Swinney. Check out the summary write-up of this workshop to get a
good Overview of the session.
Upcoming Educational Programs
The 351h National Conference
January 26-28,2015 in San Francisco
Speakers include:Alan Simpson, Erskine Bowles, Olivia Mitchell, Gary Locke, Daniel Pink and the 2015 Capital
Markets Panel.More speakers,as well as workshop topics,to be announced.
Details will be sent to you via email and U.S. Mail in late October.
Our research can be found at www.callan.com/research or feel free to contact us for hard copies.
For more information about research or educational events,please contact Ray Combs or Gina Falsetto
at institute@callan.com or 415-974-5060.
Callan Callan Investments Institute
'CALLAN
Callan COLLEGE" THIRD QTR 2014
Education
The Center for Investment Training Educational Sessions
This educational forum offers basic-to-intermediate level instruction on all components of the investment manage-
ment process.The'Callan College"courses cover topics that are key to understanding your responsibilities,the roles
of everyone involved in this process, how the process works,and how to incorporate these strategies and concepts
into an investment program.Listed below are the 2015 dates.
An Introduction to Investments
April 14-15,2015 in Atlanta
July 21-22,2015 in San Francisco
October 27-28,2015 in Chicago
This one-and-one-half-day session is designed for individuals who have less than two years'experience with institu-
tional asset management oversight and/or support responsibilities.The session will familiarize fund sponsor trustees,
staff,and asset management advisors with basic investment theory,terminology,and practices.
Participants in the introductory session will gain a basic understanding of the different types of institutional funds,
including a description of their objectives and investment session structures.The session includes:
A description of the different parties involved in the investment management process, including their roles and
responsibilities
• A brief outline of the types and characteristics of different plans(e.g.,defined benefit,defined contribution,
endowments,foundations,operating funds)
An introduction to fiduciary issues as they pertain to fund management and oversight
• An overview of capital market theory,characteristics of various asset classes,and the processes by which
fiduciaries implement their investment sessions
Tuition for the Introductory"Callan College"session is$2,350 per person.Tuition includes instruction, all materials,
breakfast and lunch on each day,and dinner on the first evening with the instructors.
Customized Sessions
A unique feature of the"Callan College"is its ability to educate on a specialized level through its customized sessions.
These sessions are tailored to meet the training and educational needs of the participants,whether you are a plan spon-
sor or you provide services to institutional tax-exempt plans.Past customized"Callan College"sessions have covered
topics such as:custody,industry trends,sales and marketing,client service,international,fixed income,and managing
the RFP process.Instruction can be tailored to be basic or advanced.
For more information please contact Kalh leen Currie,at 415.274.3029 or cu nnie@callan.com.
Risk/Reward Statistics
The risk statistics used in this report examine performance characteristics of a manager or a portfolio relative to a benchmark
(market indicator) which assumes to represent overall movements in the asset class being considered. The main unit of
analysis is the excess return, which is the portfolio return minus the return on a risk free asset (3 month T-Bill).
Alpha measures a portfolio's return in excess of the market return adjusted for disk. It is a measure of the manager's
contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively
rewarded for the residual risk which was taken for that level of market exposure.
Beta measures the sensitivity of rates of portfolio returns to movements in the market index. A portfolio's beta measures the
expected change in return per 1% change in the return on the market. If a beta of a portfolio is 1.5,a 1 percent increase in
the return on the market will result,on average, in a 1.5 percent increase in the return on the portfolio. The converse would
also be true.
Downside Risk stems from the desire to differentiate between "good risk" (upside volatility) and "bad risk" (downside
volatility). Whereas standard deviation punishes both upside and downside volatility, downside disk measures only the
standard deviation of returns below the target. Returns above the target are assigned a deviation of zero. Both the frequency
and magnitude of underperformance affect the amount of downside risk.
Excess Return Ratio is a measure of risk adjusted relative return. This ratio captures the amount of active management
performance (value added relative to an index) per unit of active management risk (tracking error against the index.) It is
calculated by dividing the managers annualized cumulative excess return relative to the index by the standard deviation of
the individual quarterly excess returns. The Excess Return Ratio can be interpreted as the manager's active riskireward
tradeoff for diverging from the index when the index is mandated to be the"riskless"market position.
Information Ratio measures the manager's market risk-adjusted excess return per unit of residual risk relative to a
benchmark. It is computed by dividing alpha by the residual risk over a given time period. Assuming all other factors being
equal, managers with lower residual risk achieve higher values in the information ratio. Managers with higher information
ratios will add value relative to the benchmark more reliably and consistently.
R-Squared indicates the extent to which the variability of the portfolio returns are explained by market action. It can also be
thought of as measuring the diversification relative to the appropriate benchmark. An r-squared value of.75 indicates that
75% of the fluctuation in a portfolio return is explained by market action. An r-squared of 1.0 indicates that a portfolio's
returns are entirely related to the market and it is not influenced by other factors. An r-squared of zero indicates that no
relationship exists between the portfolio's return and the market.
Relative Standard Deviation is a simple measure of a managers risk(volatility)relative to a benchmark. It is calculated by
dividing the manager's standard deviation of returns by the benchmark's standard deviation of returns. A relative standard
deviation of 1.20, for example, means the manager has exhibited 20% more risk than the benchmark over that time period.
A ratio of .80 would imply 20% less risk. This ratio is especially useful when analyzing the risk of investment grade
fixed-income products where actual historical durations are not available. By using this relative risk measure over rolling
time periods one can illustrate the "implied" historical duration patterns of the portfolio versus the benchmark.
Residual Portfolio Risk is the unsystematic risk of a fund,the portion of the total risk unique to the fund(manager)itself and
not related to the overall market. This reflects the"bets"which the manager places in that particular asset market. These
bets may reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager
considers a good investment opportunity. Diversification of the portfolio will reduce or eliminate the residual risk of that
portfolio.
Callan
32
Risk/Reward Statistics
Sharpe Ratio is a commonly used measure of risk-adjusted return. It is calculated by subtracting the "risk-free" return
(usually 3 Month Treasury Bill)from the portfolio return and dividing the resulting"excess return" by the portfolio's risk level
(standard deviation).The result is a measure of return gained per unit of risk taken.
Sortino Ratio is a downside risk-adjusted measure of value-added. It measures excess return over a benchmark divided by
downside risk. The natural appeal is that it identifies value-added per unit of truly bad risk. The danger of interpretation,
however, lies in these two areas: (1)the statistical significance of the denominator,and (2) its reliance on the persistence of
skewness in return distributions.
Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of the observations from their
sample mean. Standard deviation is used as an estimate of risk since it measures how wide the range of returns typically is.
The wider the typical range of returns,the higher the standard deviation of returns,and the higher the portfolio risk. If returns
are normally distributed (ie. has a bell shaped curve distribution) then approximately 2/3 of the returns would occur within
plus or minus one standard deviation from the sample mean.
Total Portfolio Risk is a measure of the volatility of the quarterly excess returns of an asset. Total risk is composed of two
measures of risk: market(non-diversifiable or systematic)risk and residual(diversifiable or unsystematic) risk. The purpose
of portfolio diversification is to reduce the residual risk of the portfolio.
Tracking Error is a statistical measure of a portfolio's risk relative to an index. It reflects the standard deviation of a
portfolio's individual quarterly or monthly returns from the index's returns. Typically,the lower the Tracking Error, the more
"Index-like"the portfolio.
Traynor Ratio represents the portfolio's average excess return over a specified period divided by the beta relative to its
benchmark over that same period. This measure reflects the reward over the risk-free rate relative to the systematic risk
assumed.
Note:Alpha,Total Risk,and Residual Risk are annualized.
Callan
33
Fixed Income Portfolio Characteristics
All Portfolio Characteristics are derived by first calculating the characteristics for each security, and then calculating the
market value weighted average of these values for the portfolio.
Allocation by Sector- Sector allocation is one of the tools which managers often use to add value without impacting the
duration of the portfolio. The sector weights exhibit can be used to contrast a portfolio's weights with those of the index to
identity any significant sector bets.
Average Coupon-The average coupon is the market value weighted average coupon of all securities in the portfolio. The
total portfolio coupon payments per year are divided by the total portfolio par value.
Average Moody's Rating for Total Portfolio- A measure of the credit quality as determined by the individual security
ratings. The ratings for each security, from Moody's Investor Service, are compiled into a composite rating for the whole
portfolio. Quality symbols range from Aaa+ (highest investment quality-lowest credit risk)to C (lowest investment quality-
highest credit risk).
Average Option Adjusted(Effective)Convexity-Convexity is a measure of the portfolio's exposure to interest rate risk. It
is a measure of how much the duration of the portfolio will change given a change in interest rates. Generally,securities with
negative convexities are considered to be risky in that changes in interest rates will result in disadvantageous changes in
duration. When a security's duration changes it indicates that the stream of expected future cash-flows has changed,
generally having a significant impact on the value of the security. The option adjusted convexity for each security in the
portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected
stream of cash-Flows for the security based on various interest rate scenarios. Expected cash-flows take into account any
put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal
prepayments.
Average Option Adjusted(Effective)Duration- Duration is one measure of the portfolio's exposure to interest rate risk.
Generally, the higher a portfolio's duration, the more that its value will change in response to interest rate changes. The
option adjusted duration for each security in the portfolio is calculated using models developed by Lehman Brothers and
Salomon Brothers which determine the expected stream of cash-Flows for the security based on various interest rate
scenarios. Expected cash-Flows take into account any put or call options embedded in the security, any expected
sinking-fund paydowns or any expected mortgage principal prepayments.
Average Price-The average price is equal to the portfolio market value divided by the number of securities in the portfolio.
Portfolios with an average price above par will tend to generate more current income than those with an average price below
par.
Average Years to Expected Maturity-This is a measure of the market-value-weighted average of the years to expected
maturity across all of the securities in the portfolio. Expected years to maturity takes into account any put or call options
embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments.
Average Years to Stated Maturity- The average years to stated maturity is the market value weighted average time to
stated maturity for all securities in the portfolio. This measure does not take into account imbedded options, sinking fund
paydowns,or prepayments.
Current Yield-The current yield is the current annual income generated by the total portfolio market value. It is equal to the
total portfolio coupon payments per year divided by the current total portfolio market value.
Callan
Fixed Income Portfolio Characteristics
Duration Dispersion- Duration dispersion is the market-value weighted standard deviation of the portfolio's individual
security durations around the total portfolio duration. The higher the dispersion, the more variable the security durations
relative to the total portfolio duration ('barbellness"), and the smaller the dispersion, the more concentrated the holdings'
durations around the overall portfolio's ('bulletness"). The purpose of this statistic is to gauge the 'bulletness" or
'barbellness'of a portfolio relative to its total duration and to that of its benchmark index.
Effective Yield-The effective yield is the actual total annualized return that would be realized if all securities in the portfolio
were held to their expected maturities. Effective yield is calculated as the internal rate of return, using the current market
value and all expected future interest and principal cash flows. This measure incorporates sinking fund paydowns,expected
mortgage principal prepayments,and the exercise of any"in-the-money"imbedded put or Call options.
Weighted Average Life-The weighted average fife of a security is the weighted average time to payment of all remaining
principal. It is calculated by multiplying each expected future principal payment amount by the time left to the payment. This
amount is then divided by the total amount of principal remaining. Weighted average life is commonly used as a measure of
the investment life for pass-through security types for comparison to non-pass-through securities.
Callan
35
Callan
Quarterly List as of
September 30, 2014
List of Managers That Do Business with Callan Associates Inc.
Confidential—For Callan Client Use Only
Callan Associates takes its fiduciary and disclosure responsibilities to dients very seriously.The list below is compiled and updated quarterly because
we believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As
of 09130114, Callan provided educational, consulting, software, database, or reporting services to this list of managers through one or more of the
following business units: InstiNtlonal Consulting Group, Independent Adviser Group, Fund Sponsor Consulting,the Callan Investments Institute and the
"Callan College."Per stud policy these manager relationships do not affect the outcome or process by which any of Callan s services are conducted.
Fund sponsor clients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to
Callan by the managers employed by their fund. Per company policy, information requests regarding fees are handled exclusively by Callan's
Compliance Department.
Clients should also be aware that Callan maintains an asset management division, the Trust Advisory Group (TAG).TAG specializes in the design,
implementation and on-going management of multi-manager portfolios for institutional Investors.Currently TAG serves as the sponsor and advisor to a
mulemanager small cap equity fund and as the non-discretionary adviser to a series of Target Maturity Funds known as the Callan GlidePatho Funds.
We are happy to provide clients with more specific information regarding TAG, including detail on the portfolios that it oversees. Per company policy
these requests are handled by TAG's Chief Investment Cultures.
Manager Name--Educational services '
1607 Capital Partners,LLC Y
Aberdeen Asset Management Y
Acadian Asset Management,Inc. Y
Advisory Research '' Y = '
Affiliated Managers Group Y
AllianceBemstein Y
Allianz Global Investors U.S.LLC Y Y
Allianz Life Insurance Company of North America Y
Altnnsic Global Advisors,LLC Y
American Century Investment Management I Apollo Global Management Y
AQR Capital Management I 1�
Area Management Y
Adel Investments
Anstotle Capital Management Y
Aronson♦Johnson+Chi
Artisan Holdings Y
Atlanta Capital Management Co.,L.L.C.
AxA Rosenberg Investment Management Y
Babson Capital Management LLC
Baillie Gifford International LLC Y Y
Baird Ad isers Y Y
Bank of America Y
Banng Asset Management Y
Barrow,Hanley,Mewhinney&Strauss,Inc. Y Y
BlackRock
BMO Asset Management Y
BNP Paribas Investment Partners
BNY Mellon Asset Management Y Y
Boston Company Asset Management,LLC(The)
Boston Partners(aka Robeco Investment Management) Y Y
Bounces Investment Barrel L.P.
Brandywine Global Investment Management,LLC Y
Brown Brothers Harman&Company
Cadence Capital Management Y
Callan I Knowledge.Experience.Integrity. 1
List of Managers That Do Business with Callan Associates Inc.(continued)
Confidential—For Callan Client Use Only
Callan Associates takes its fiduciary and disclosure responsibilifies to clients very seriously.The list below is compiled and updated quarterly because
vas believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As
of 09130114, Callan provided educational, consulting, software, database, or morning services to this list of managers through one or more of the
following business units Institutional Consulting Group,Independent Adviser Group,Fund Sponsor Consulting,the Callan Investments Institute and the
"Callan College."Per aged policy these manager relationships do not affect the outcome or process by which any of Callan'a services are conducted.
Fund sponsor dients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to
Callan by the managers employed by their fund. Per company policy, information requests depending fees are handled exclusively by Callan's
Compliance Department.
Clients should also be aware that Callan maintains an asset management division.the Trost Advisory Group (TAG).TAG specializes in the resign,
implementation and on-going management of multi-manager portfolios for institutional investors.Currently TAG serves as the sponsor and advisor to is
multi-manager small cap equity fund and as the non-discreoonary adviser to a series of Target Maturity Funds known as the Callan GlidePatha Funds.
We are happy to provide clients with more specific information reganding TAG, including detail on the portfolios that it oversees. Per company policy
these requests are handled by TAG's Chief Investment Office,
Capital Group Y —
CastleArk Management,LLC Y
Causeway Capital Management V
Central Plains Advisors,Inc. Y
Chartwell Investment Panders —
ClearBddga Investments,LLC like ClearBddge Advisors) Y
Cohen&Steers
Columbia Management Investment Advisors,LLC Y Y
Columbus Circle Investors
Corbin Capital Partners Y
Cornerstone Capital Management Holdings like Madison Square)
Cornerstone Investment Partners,LLC Y
Cramer Rosenthal McGlynn,LLC
Crawford Investment Council Y
Crack Suisse Asset Management
Crestline Investors Y Y
Cutwater Asset Management
DB Advisors Y Y
Delaware Investments
DePrince,Race&Zollo,Inc. Y Y
Deutsche Mast &Wealth Management
Diamond Hill Investments Y
DSM Capital Farmers
Duff&Phelps Investment Mgmt Y Y
Eagle Asset Management,Inc.
EARNEST Partners,LLC Y
Eaton Vance Management
Epoch Investment Partners Y
Fayez Sarefim&Company
Federated Investors Y
First Eagle Investment Management
First State Investments Y
Fisher Investments Y
Franklin Templeton Y Y
Fred Alger Management Co.,Inc. V
Fuller&Thaler Asset Management Y
GAM(USA)Inc.
GE Asset Management Y Y
Geneva Capital Management
Goldman Sachs Asset Management Y Y
GrandJean Capital Management •i
GMO Qka Grantham,Maya,Van Oftedoo&Co.,LLC) Y
Great Lakes Advisors,Inc.
The Guardian Life Insurance Company of America Y
Guggenheim Investments Asset Management III Security Global) —
GW&K Investment Management Y
Callan I Knowledge.Experience.Integrity. 2
List of Managers That Do Business with Callan Associates Inc.(continued)
Confidential—For Callan Client Use Only
Callan Associates takes its fiduciary and disclosure responsibilities to clients very seriously.The list below is compiled and updated quarterly because
vas believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As
of 09130114, Callan provided educational, consulting, software, database, or morning services to this list of managers through one or more of the
following business units Institutional Consulting Group,Independent Adviser Group,Fund Sponsor Consulting,the Callan Investments Institute and the
"Callan College."Per aged policy these manager relationships do not affect the outcome or process by which any of Callan'a services are conducted.
Fund sponsor dients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to
Callan by the managers employed by their fund. Per company policy, information requests depending fees are handled exclusively by Callan's
Compliance Department.
Clients should also be aware that Callan maintains an asset management division.the Trust Advisory Group (TAG).TAG specializes in the resign,
implementation and on-going management of multi-manager portfolios for institutional investors.Currently TAG serves as the sponsor and advisor to is
multi-manager small cap equity fund and as the non-discreoonary adviser to a series of Target Maturity Funds known as the Callan GlidePaths Funds.
We are happy to provide clients with more specific information reganding TAG, including detail on the portfolios that it oversees. Per company policy
these requests are handled by TAG's Chief Investment Officer.
Harbor Capital —
Hartford Investment Management Co. Y Y
Heightened Capital Management Corporation JIM
Henderson Global Investors Y Y
Hogchkis&Wiley Y
Impax Asset Management Limited Y
Income Research&Management M A
Industry Funds Management Y
Insight Investment Management
Institutional Capital LLC Y
INTECH Investment Management
Invesco Y Y
Investment Management of Virginia
Invested Asset Management Y
Jacobs Levy Equity Management
Janus Capital Group like Janus Capital Management,LLC) Y Y
Jensen Investment Management
J.M.Hartwell Y
J.P.Morgan Asset Management
KeyCorp Y
Lazard Asset Management
Lee Murder Capital Group Y
Lincoln National Corporation J
Logan Circle Partners,L.P. Y
Longview Partners —
Loomis,Sayles&Company,L.P. Y Y
Lord Abbot&Company —
Los Angeles Capital Management Y
LSV Asset Management —
Lyrical Partners Y
MacKay Shields LLC
Man Investments Y
Manul ns Asset Management
Martin Curie Y
Marvin&Palmer Associates,Inc. Y
Mellon Capital Management Y
Metropolitan West Capital Management,LLC
MFS Investment Management Y Y
Mondrian Investment Partners Limited
Montag&Caldwell,Inc. Y Y
Morgan Stanley Alternative Investment Partners
Morgan Stanley Investment Management Y Y
Mountain Lake Investment Management LLC
National Investment Services,Inc. Y
Neuberger Berman,LLC(fim,Lehman Brothers)
Newton Capital Management Y
Callan I Knowledge.Experience.Integrity. 3
List of Managers That Do Business with Callan Associates Inc.(continued)
Confidential—For Callan Client Use Only
Callan Associates takes its fiduciary and disclosure responsibilifies to clients very seriously.The list below is compiled and updated quarterly because
vas believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As
of 09130114, Callan provided educational, consulting, software, database, or reporting services to this list of managers through one or more of the
following business units Institutional Consulting Group,Independent Adviser Group,Fund Sponsor Consulting,the Callan Investments Institute and the
"Callan College."Per aged policy these manager relationships do not affect the outcome or process by which any of Callan'a services are conducted.
Fund sponsor dients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to
Callan by the managers employed by their fund. Per company policy, information requests depending fees are handled exclusively by Callan's
Compliance Department.
Clients should also be aware that Callan maintains an asset management division,the Trust Advisory Group (TAG).TAG specializes in the resign,
implementation and on-going management of multi-manager portfolios for institutional investors.Currently TAG serves as the sponsor and advisor to is
multi-manager small cap equity fund and as the non-discreoonary adviser to a series of Target Maturity Funds known as the Callan GlidePaths Funds.
We are happy to provide clients with more specific information reganding TAG, including detail on the portfolios that it oversees. Per company policy
these requests are handled by TAG's Chief Investment Officar.
Northern Lights Capital Group I- Y Northern Trust Global Investment Services Y Y
Nuveen Investments Institutional Services Group LLC I- Y
Old Mutual Asset Management Y Y
OppenheimerFunds,Inc. I ��
O'Shaughnessy Asset Management,LLC Y
Pacific Investment Management Company -
Palisade Capital Management LLC Y
Pammetec Portfolio Associates
Peregrine Capital Management,Inc. Y Y
Philadelphia International Advisors,LP -
PineBridge Investments(formerly AIG) Y
Pinnacle Asset Management Y -
Pioneer Investment Management,Inc. Y
PNC Capital Advisors(like Allegiant Asset Mgmt) a
Poll Capital Management Y
Post Advisory
Principal Financial Group Y
Principal Global Investors
Private Advisors Y
Prudential Fixed Income Management
Prudential Investment Management,Inc. Y Y
Putnam Investments,LLC
Pymmis Global Advisors Y
Rainier Investment Management
RBC Global Asset Management(U.S.)Inc. Y Y
Research Affiliates
Regions Financial Corporation Y
RCM
Foredo Investment Management(aka Boston Partners) Y Y
Rothschild Asset Management,Inc.
RS Investments Y
Russell Investment Management
Santander Global Facilities Y
Schroder Investment Management Norm America Inc.
Scout Investments Y
SEI Investments
SEIX Investment Advisors,Inc. Y
Select Equity Group
Silvercrest Asset Management Company Y
Smith Graham and Company
Smith Group Asset Management Y
Standard Life Investments
Standish dill Standish Mellon Asset Management) Y
State Street Global Advisors
Callan I Knowledge.Experience.Integrity. 4
List of Managers That Do Business with Callan Associates Inc.(continued)
Confidential—For Callan Client Use Only
Callan Associates takes its fiduciary and disclosure responsibilil es to clients very seriously.The list below is compiled and updated quarterly because
vas believe our fund sponsor clients should have a clear understanding of the investment management organizations that do business with our firm.As
of 09130114, Callan provided educational, consulting, software, database, or reporting services to this list of managers through one or more of the
following business units Institutional Consulting Group,Independent Adviser Group,Fund Sponsor Consulting,the Callan Investments Institute and the
"Callan College."Per aged policy these manager relationships do not affect the outcome or process by which any of Callan'a services are conducted.
Fund sponsor dients may request a copy of this list at any time. Fund sponsor clients may also request specific information regarding the fees paid to
Callan by the managers employed by their fund. Per company policy, information requests depending fees are handled exclusively by Callan's
Compliance Department.
Clients should also be aware that Callan maintains an asset management division.the Trust Advisory Group (TAG).TAG specializes in the resign,
implementation and on-going management of multi-manager portfolios for institutional investors.Currently TAG serves as the sponsor and advisor to is
multi-manager small cap equity fund and as the non-discreoonary adviser to a series of Target Maturity Funds known as the Callan GlidePaths Funds.
We are happy to provide clients with more specific information reganding TAG, including detail on the portfolios that it oversees. Per company policy
these requests are handled by TAG's Chief Investment Officar.
Stone Harbor Investment Partners,L.P. V V
Systematic Financial Management T T.Rowe Price Associates,Inc. y y
Taplin,Canida&Hallachg y (♦ —
TCW Asset Management Company y
Thompson,Siegel&Walmslay LLC �� (♦
UBS V V
Union Bank of California —�
Van Eck V
Victory Capital Management Inc. (—
Voya Investment Management like ING Investment Management) y y
Vulcan Value Partners,LLC (—
Waddell&Reed Asset Management Group V V
Wall Street Associates —
WCM Investment Management V
WEDGE Capital Management —
Wellington Management Company,LLP y
Wells Capital Management (—
Western Asset Management Company y
William Blair&Co.,Inc. —
Callan I Knowledge.Experience.Integrity. 5
P I M C O
Your Global Investment Authority
Strategy review
Orange County Sanitation District
30 October 2014
ivO
EM2013
For professional use only. III II
Client-specific update-
not for public distribution.
A company of Ali
Disclosures
Past performance is not a guarantee or a reliable indicator of future results. Shares distributed by PIMCO Investments U.C.
PIMCO and YOUR GLOBAL INVESTMENT AUTHORITY are trademarks or registered trademarks of Allianz Asset Management of America L.P. and Pacific
Investment Management Company LLC, respectively, in the United States and throughout the world.
The Morningstar Fixed-Income Fund Manager of the Year award (PIMCO Income, 2013)is based on the strength of the manager, performance, strategy and
firm's stewardship. Morningstar Awards 20130. Morningstar,Inc.All Rights Reserved.Awarded to Dan Ivascyn and Alfred Murata for U.S. Fixed Income Fund
Manager of the Year.
PIMCO Your Global Investment Authority pg1
Biographical information
Stephanie L. King, CFA
Ms. King is an executive vice president and account manager in the Newport Beach office,focusing on
U.S. institutional investors within the public client practice. Previously at PIMCO, she worked with a
variety of institutional client types and co-headed the U.S. corporate client practice.Additionally,
she led the firm's global recruiting function as part of PIMCO's business management group and
worked on a variety of talent management initiatives.She currently serves on the steering committee
for PIMCO's global inclusion, diversity and culture initiative. Prior tojoining PIMCO in 2001,she was
with Morgan Stanley, Blue Capital Management and Bain &Company. She has 15 years of investment
experience and holds an MBA from Stanford University Graduate School of Business and an
undergraduate degree from the Wharton School of the University of Pennsylvania.
P I M C O Your Global Investment Authority pg2
Agenda
1. Market review and performance
2. Outlook and strategy
3. Appendix
P I M C O Your Global Investment Authority pg3
1 . Market review and performance
P I M C O Your Global Investment Authority pg4
Geopolitics and economic data drove Q3 market sentiment
Yellen cautions of "considerable time" 20 U.S.Treasury maturities ■H3'14 0Q3 '14
before first rate hike 0
19
n
• Fed remains focused on data, citing low wage g -20 2
growth and ongoing labor market slack v
• Short-end yields rose as markets brought forward
rate hike expectations '�° -m
u
-80
• Expect increased volatility as the Fed transitions -77 -79
away from QE to forward guidance -100 96
Tyr Syr Tyr 10yr 30yr 2s-30s 55-30s
spread spread
Labor market and private sector are 6
—ISM Composite Index(RHS) ■Real GDP(LHS) 60
above 50 reflects expansion
driving ongoing U.S. recovery s sa
• 6-month average payrolls reached a 17-year high in ;, 3 ss a
August amid a mid-cycle pick-up in employment a 2 0000 53 x
• Q2 GDP revised up, driven by cap ex and net exports o so
below 50 reflectscontraction
-2 48
-3 4s
2012 2013 2014
As of 30 September 2014
SOURCE:Bloomberg, Haver,Barclays
P I M C O I Your Global Investment Authority pg5
Central banks increase easing programs amid growth concerns
ECB announces asset-purchase 1.0 Euro area GDP growth (QoQ)
program as growth slows 0.s
• ECB will buy covered bonds and ABS securities but 0.0 — , M '
■ _
remains silent on total size a -0.5
• Euro area GDP growth weakened, driven partially by -1.0
new sanctions in Russia 2011 2012 2013 2014
Signs of short-term improvement in
104 Japan annual CP1
Japan, but secular risks persist 102
x
a 100
• Japanese CPI picked up in Q3, but wages still
lag inflation 98
96
• The April VAT hike weakened output and sales, 2008 2009 2010 2011 2012 2013 2014
hindering the case for structural fiscal reform
—China industrial production(tHS)
—China real quarterly GDP(RHS)
Questions around China growth engine � 21 — 15
0
• China's slowdown has impacted industrial m 15 10
production and commodity pricesrs
".'
A
• China eased property restrictions in an attempt to 9 6
engineer a soft landing a
3 0
2008 2010 2011 2012 2013 2014
As of 30 September 2014
SOURCE:Bloomberg, Haver,J Morgan,Barclays
P I M C O I Your Global Investment Authority pg 6
Central bank policies intensify as global market performance diverges
Core fixed income Non-core fixed income Global fixed income and currency Equity and commodity
11
■Q3 '14 ■YTD14
7
4
0
� 0
c
E -4
i
z
-7
-11
-14
U.S. MTG IGC Treasuries Munis TIPS HY CMBS Global EM EM ($) USD($) Global U.S. EM Commodities
bonds local equities equities equities
• USTs rallied early in Q3 driven • Demand for high yield • EM local bonds • U.S. equities sold off in late July
by geopolitical volatility amid decreased as prices rose, even underperformed, driven by on geopolitical concerns but
the Fed's ongoing taper as default expectations remain currency effects as the USD later rallied amid better
low strengthened domestic data
• Agency MBS underperformed
given more issuance and • Municipals outperformed • Global fixed income rallied • Negative Q3 commodities
concerns on post-taper demand largely due to positive with incremental central bank performance offset prior gains
supply/demand dynamics support in the EU and Japan driven by agriculture and
energy sectors
As of 30 September 2014
SOURCE:Barclays,Bloomberg, Federal Reserye,)PMorgan,PIMCO
Barclays U.S.Aggregate;Barclays MBS Fixed Rate Mortgage;Barcays Investment Grade Credit Barclays U.S.Treasury;Barclays Municipal Bond;Barclays U.S.TIPS;BofA Merrill Lynch U.S.High
Yield BB-B Rated;Barclays CMBS ERISA-Eligible;lPMorgan EMBI Global;lPMorgan GBI Global ex-U.S.USD Hedged Index,lPMorgan GBI-EM Global Diversified(Unhedged);Dollar Index Spot;
MSCI World;S&P 500;MSCI EM;DJ-UBS Commodity
USD($)measured relative to basket of seven currencies on a trade-weighted basis
P I M C O I Your Global Investment Authority pg 7
Performance review
Orange County Sanitation District— Long Term Portfolio
$ 367,390,754
$ 88,900,000
Net Investment Earnings $ 5,265,352
Market value as of Sep 14 $ 461,556,106
Performance ■Portfolio(beforefees) ■Benchmark
10
8
6
4
E
2
0 MEN
-2
-4
'00 101 '02 '03 '04 '05 '06 '07 '08 109 110 Ill '12 '13 YTD'14
Orange County Sanitation District
Before fees (%) REEMEMER
R
After fees (%) 4.7 3.5 2.3 1.0 -0.2 0.9 0.7 -0.1 1.3
Benchmark(%) 4.6 3.3 2.3 1.4 0.7 1.3 0.7 -0.1 1.1
As of 30 September 2014
All periods longer than one year are annualized
Benchmark:BofA Merrill 1-5 Year Gov[/Corp.prior,Performance Holiday from COB 12/19/2012 to COB 01/01/2013, BofA Merrill 1-5 Year Gov t/Corp.from 01/01/2013
P I M C O I Your Global Investment Authority I Pg 9
Performance review
Orange County Sanitation District— Liquid Operating Portfolio
$ 46,067,896
$ 12,800,335
$ 45,782
$ 58,914,013
Performance ■Portfolio(before fees) ■Benchmark
8
7
6
a? 5
E 4
Z
z
3
2
1
0
100 101 '02 '03 '04 '05 '06 '07 '08 109 .10 Ill '12 '13 YTD '14
Orange County Sanitation District
MEMEMEME M
Before fees (%) 3.0 1.8 0.2 0.1 0.1 0.1 0.1 0.0 0.1
After fees (%) 2.8 1.6 0.0 0.0 0.0 -0.1 0.0 0.0 -0.1
Benchmark(%) 2.6 1.5 0.1 0.1 0.1 0.0 0.0 0.0 0.0
As of 30 September 2014
All periods longer than one year are annualized
Benchmark:Citi 3-Month Treasury Bill Index
P I M C O I Your Global Investment Authority pg9
Portfolio positioning
Orange County Sanitation District- Long Term Portfolio Orange County Sanitation District- Liquid Operating Portfolio
r Portfolio 2.8 2.5 2.2 1 Portfolio 0.1 0.2 0.1
Effective duration (yrs.) Index 2.7 2.7 27 Effective duration (yrs.) Index 0.2 0.2 0.2
Yield to maturity(%) 1.0 1.0 1.0 Yield to maturity(%) 0.0 0.1 0.1
Total curve duration': -0.8 Total curve duration': 0.0
031 Mar'14 030 Jun '14 031 Mar'14 030 Jun '14
3.0 Sector allocations-duration weighted ■30 Sep '14 ■Benchmark 10 Sector allocations-duration weighted ■30 Sep '14 ■Benchmark
25 0.8
2.1
2.0 L9
17 0.6
u 15 i
0.4
10 0.7
0.2
0.5 0.2 0.1
0.3 0.1 0.0 0.1 ITT 0.1
0.10.00.00.0 0.0 0.0 0.0` 0.0 0.0 + 0.0
0.0 0.0
Government Mortgage Credit Muni/Other Government Related* Credit Net Cash Equivalents/
Related* MY Futures**
NOTE."Other is comprised of municipals,convertibles,euro/yankees,preferred stock
' In November 2011 PIMCO modified its duration calculation to account for the potential that holders of securities subject to credit risk may,in the event of default,recover a portion of
their investment prior to maturity.The duration reflects the revised calculation.
' Measures a portfolio's price sensitivity relative to the benchmark to changes in the slope of the yield curve,measured between the 2-30 year government yields,holding the 7-year
yield constant.For every one basis point of steepening(flattening),a portfolio with curve duration of one year will nse(fall)in price by one basis point relative to the benchmark.
P I M C O I Your Global Investment Authority I pg 10
PIMCO has achieved its performance targets for OCSD
in the Long-Term portfolio. . .
■OCSD Long-Term Portfolio
■ BAML 1-5 yr Gov/Corp
Periods ended 30 Sep '14 ■Adj.benchmark'
6
5
4
3
2
1
0
51 10 yrs. 5 yrs. 3 yrs. 1 yr. 6 mos. YTD Sep '14
Orange County Sanitation District Long-Term Portfolio
pnception:07 Sep '95)
S.t 10 yrs. 5 yrs. 3 yrs 1 yr 6 mos YTD Sep '14
Performance vs. benchmark(bps) 22 35 16 -22 -20 6 32
Performance vs, adj. benchmark(bps) N/A 54 53 18 19 18 56
• PIMCO has achieved its performance objectives for OCDS's "long-term' portfolio over the 5-year, 10-year and since inception
(1995) periods
• OCDS's investment policy limits the investment opportunity set to CD's, CID, US Treasuries, US Federal Agencies and Corporate
Notes (rated A or higher)
• Given these investment limitations, target gross-of-fee alpha for the OCDS "long-term' portfolio is 20-30 basis points
As of 30 September 2014
Performance is gross of fees.Fees are 15 bps.Primary benchmark-BAML 1-5 year Govt/Corp,performance holiday from COB 12/19/2012 to COB 01/01/2013
• Adjusted benchmark excludes 8138-rated securities,securities with non-U.S.countras of ask,perpetual bonds and 144A private placements to align with client guidelines
P I M C O I Your Global Investment Authority I pg 11
. . .and the Liquid Operating portfolio
■OCSD liquid Operating portfolio
Periods ended 30 Sep '14 ■Citi 3-month T-Bill
3.5
3
2.5
2
1.5
1
0.5
0
S.L 10 yrs. 5 yrs. 3 yrs. 1 yr. 6 mos. YTD Sep '14
Orange County Sanitation Liquid Operating portfolio
(Inception:07 Sep '95)
S.I. 10 yrs. 5 yrs. 3 yrs. 1 yr. 6 mos. YTD Sep '14
Performance vs. benchmark(bps) 34 24 10 a 3 4 4
As of 30 September 2014
Performance is gross of fees.Fees are 15 bps
P I M C O I Your Global Investment Authority pg12
PIMCO's hallmark: Consistent outperformance over market cycles
for the Long-Term portfolio. . .
10 OCSD portfolio vs benchmark'
Outperformance
8
• MD LT portfolio outperformed its benchmark in 43 out
of 57 rolling 5-year periods (75% of the time)'
0 6 Im
v �
a
4
r
2
Underperformance
0 '
0 2 4 6 8 10
Benchmark' returns M
8 OCSD portfolio vs adj.benchmark2
Outperformance
6
• MD LT portfolio outperformed the adjusted a 90""
benchmark, which excludes prohibited investments, in 32 0 �;
out of 32 rolling 5-year periods (100% of the time)2 g 4 �•�
As of 30 September 2014 a
Performance is gross of fees.Fees are 15 bps. 2
SOURCE:PIMCO
Since inception:30 September1995;Benchmark:BAML1-5 Year Gov/Corp.Netoffeesthe
portfolio has outperformed 63%of the time. Underperformance
' Since inception:31 December 2001;Adj.benchmark excludes BBB rated securities,non U.S. 0
countries of risk,144a private placements and perpetual bonds.Net of fees the portfolio has 0 2 4 6 8
outperformed 94%of the time. Ad'. benchmark' returns %
P I M C O Your Global Investment Authoritypg 13
. . . and the Liquid Operating portfolio
OCSD Liquid Operating portfolio vs.benchmark'
• OCSD Liquid Operating portfolio outperformed its 10
benchmark in 57 out of 57 rolling 5-year periods (200% a Outperformance
of the time)'
5
s
0
0 0
0
V
on
0
O
Underperformance
-5
-5 0 5 30
Benchmark'returns (%)
As of 30 September 2014
Performance is gross of fees.Fees are 15 bps
SOURCE:PIMCO
Since inception:30 September 1995;Benchmark:Citi 3-Month Treasury Bill Index
P I M C O I Your Global Investment Authority pg 14
2. Outlook and strategy
P I M C O Your Global Investment Authority pg15
PIMCO's global economic outlook
� �' '�art• Russian sanctions impact Ma
iS Eurozone trade linkages "
,� Fiscal tightening
U.S.growth bolsters j keeps Bank of
USD and Canadian/ ! ,—/'^ Japan engaged
Mexican exports
-1 Levered Chinese banking
'�- system threatens growth
Chinese slowdown
impacts commodity
exporters y.
•
■ Monetary Policy Expansion
• Monetary Policy Normalization
■ Commodity Related Slowdown
■ GeopolRical/Economic Risks
As of 30 September 2014
P I M C O I Your Global Investment Authority pg 16
Global policy decoupling underscores multi-speed outlook
U
Private sector sets stage for Fed exit s 112 .S. GDP growth —Publicsector —Privatesector
108
• Pricing power and high capacity utilization should 6 104
drive business investment $ 100 Public sectorsupported
private seRorposTcrisis
• Fed's first rate hike (25 bps) likely to occur 96 Drog from public
in Q2/Q3 2015 92 _ sectordiminishing
2007 Zoos 2009 2010 2011 2012 2013 2014
Monthly change
Eurozone private credit flows —6-month moving average
Eurozone growth will remain weak 300 —
200
• ECB to combat worryingly low inflation and tight `0 100
credit with more aggressive monetary easing
a 0 1111111111101111111
mr
• Stronger recovery contingent on bank -ino
recapitalization and balance sheet policies -200
2006 2007 2008 2009 2011 2012 2013
70 major cities property prices ■Rising •Sta ble ■Dropping
China poses largest cyclical risk 70
a
• Government-directed, investment-led growth model o
has fueled a real estate boom that is losing steam a 35
E
• Over-leveraged banks and corporations are a source
0
of instability 2011 2012 2013 2014
As of 30 September 2014
SOURCE:Haver Analytict,PBOC
P I M C O I Your Global Investment Authority pg 17
Low Duration portfolio strategy
Interest rate strategies
U.S. interest rate strategies Underweight U.S. interest rate exposure and seek opportunities abroad
TIPS: Favor intermediate maturities Capture higher real yields and attractive break-even pricing
Spread strategies
Differentiate amongst MBS 1) Agency i valuations are stretched and remain sensitive to Fed tapering
Favor shorter-dated credit 1) Focus on financials that are poised to benefit from the ongoing economic recovery
2) Seek "rising stars" where there is potential for rating upgrades
Tactical strategies
Currencies F
As of 30 September 2014
P I M C O Your Global Investment Authority pg 18
3. Appendix
P I M C O Your Global Investment Authority py19
PIMCO cyclical forum economic forecasts
REAL GDP HEADLINE INFLATION
® 2.5% 2.5%to 3.0% 1.9% 1.75%to 2.25%
® 0.7% 0.75%to 1.25% 0.3% 0.75%to 1.25%
® 3.2% 2.5%to 3.0% 1.6% 1.75%to 2.25%
® -0.1% 1.0%to 1.5% 1.3% 0.75%to 1.25%
® 7.5% 6.0%to 7.0% 2.2% 2.5%to 3.5%
® 1.6% 1.5%to 2.5% 6.7% 5.5%to 6.5%
As of 17 September 2014
SOURCE:BI°omberg, PIMCO calculations
Current data for real GDP growth and inflation is actual and represents four quarters ending Q22014
Brazil/Russia/India/Mexico
s Word is weighted average sum of countries listed in table above
P I M C O I Your Global Investment Authority try20
Assets under management by strategy
PIMCO manages $1.87 trillion in assets, including $1.47 trillion in third-party client assets
Alternatives Billions(S)
Liquid Absolute Return Unconstrained bond strategies,credit absolute return,other absolute return strategies 37.86
Hedge Funds Global macro, long/short credit, multi-asset volatility arbitrage strategies, relative value commodities 16.38
Opportunistic/Distressed Opportunistic strategies focusing on real estate related assets(residential,commercial),corporate credit 5.00
Asset Allocation
Asset Allocation Strategies Global Multi Asset,All Asset EM Multi Asset Real Retirement Inflation-Response Multi Asset,DRA 77.87
Equity Strategies Combines enhanced equities and active equities 24.63
Real Return Strategies Combines inflation linked strategies,actively managed commodities,and real-estate linked exposure 86.58
Fixed Income
Total Return' Total Return 233.57
Intermediate' Core Strategies,Moderate Duration 210.04
Credit Investment Grade Corporates, Bank Loans, High Yield Corporates,Convertibles 178.80
Long Duration Focus on long-term bonds;asset liability management 138.65
Global Non-U.S.and global multiple currency formats 119.04
Cash Management' Money Market,Short-Term, Low Duration 114.59
Income Income-oriented, insurance income 74.73
Emerging Markets Local debt,external debt currency 61.16
Mortgages Agency MBS,structured credit(non-Agency MBS,CMBS,and ABS) 37.81
Diversified Income Global credit combining corporate and emerging markets debt 26.89
Municipals Tax-efficient total return management 13.09
Other Custom mandates 11.76
Stable Value' Stable incomewith emphasis on principal stability 29.13
Tail-Risk Hedging' Pooled and customized portfolios of actively managed tail-risk hedges 4T26
As of 30 September 2014
SOURCE:PIMCO
Assets reflect those managed on behalf of third-party clients and exclude affiliated assets.Fund of funds assets have been netted from each strategy.
Potential differences in asset totals are due to rounding.Represents assets of strategy group in dedicated and non-dedicated portfolios.
Total Return has been segregated to isolate the assets of PIMCO sponsored U.S.Total Return 1940-act fund and foreign pool fund accounts.All other U.S.Total Return portfolios are included
in the Intermediate category.
Stable value assets have not been netted from U.S.Total Return,U.S.Moderate Duration and U.S.Low Duration assets
3 Tail-risk hedging assets reflect total notional value of dedicated mandates and are not counted towards PIMCO total assets under management
P I M C O I Your Global Investment Authority pg 21
PIMCO snapshot
r . . Global presence
• Founded in 1971 Employees 2,462
• Investment solutions include fixed • Investment professionals 758 Amsterdam 2
income, equities, alternatives and asset • Technical and support 1,704 Hong Kong 15
allocation London 131
• Assets under management: $1.87 trillion • Collaborative team-oriented approach ■ Milan 3
Highly experienced Avg Yrs Avg Yrs Munich 63
— $1A7 trillion in third-party Experience at PIMCO New York 120
client assets • All investment Newport Beach 358
— Full complement of vehicles to meet professionals 13 6 Rio de Janeiro 6
client needs (mutual funds, separate • Senior professionals 20 9 Singapore 10
accounts, _Ps, ETFs) Sydney 15
• Award-winning client service Tokyo 27
Toronto 4
Zurich 4
ii
•• •i r
i
As of 30 September 2014
Effective 31 March 2012,PIMCO began reporting the assets managed on behalf of its parent's affiliated companies as part of its assets under management
PIMCO Your Global Investment Authority pg22
Rating Agency Comparisons
A summary of investment grade ratings are listed below. More complete descriptions of
Moody's and Standard & Poor's ratings are included in the following pages.
Quality/Grade Moody's Standard & Poor's Fitch
Best Quality Aaa AAA AAA
High Quality Aal AA+ AA+
Aa2 AA AA
Aa3 AA- AA-
Upper Medium Grade Al A+ A+
A2 A A
A3 A- A-
Medium Grade Baal BBB+ BBB+
Baa2 BBB BBB
Baa3 BBB- BBB1
Moody's - Investment Grade
"Aaa" - Bonds rated Aaa are judged to be of the best quality. They carry the smallest
degree of investment risk. Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
"Aa" - Bonds which are rated As are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.
"A" - Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to principal
and interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment sometime in the future.
Mae" - Bonds which are rated Baa are considered as medium grade obligations; i.e.,
they are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative characteristics as
well.
Bonds in the Aa, A, and Bee are also assigned "1", "2", or "S' based on the strength of
the issue within each category. Accordingly, "At" would be the strongest group of A
securities and "AY would be the weakest A securities.
Be, B, Caa, Ca, and C - Bonds that possess one of these ratings provide questionable
protection of interest and principal ("Be" indicates some speculative elements; "B"
indicates a general lack of characteristics of desirable investment; "Caa" represents a
poor standing; "Ca" represents obligations which are speculative in a high degree; and
"C" represents the lowest rated class of bonds). "Caa", "Ca" and "C" bonds may be in
default.
Standard and Poor's-investment Grade
AAA - Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay
interest and repay principal Is extremely strong.
AA - Debt rated "AA" has a very strong capacity to pay interest and repay principal and
differs from the highest rated issues only in small degree.
A - Debt rated "A" has a strong capacity to pay interest and repay principal although it is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than debt in higher rated categories.
BBB - Debt rated "BBB" is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this category than in higher rated
categories.
Standard and Poor's - Speculative Grade Retina
Debt rated "BB", "B", "CCC", "CC" and "C" is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay principal.
"BB" indicates the least degree of speculation and "C" the highest. While such debt will
likely have some quality and protective characteristics these are outweighed by major
uncertainties or major exposures to adverse conditions.
BB - Debt rated "BB" has less near-term vulnerability to default than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse business,
financial, or economic conditions which could lead to inadequate capacity to meet timely
interest and principal payments. The "BB" rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied "BBB" rating.
B - Debt rated "B" has a greater vulnerability to default but currently has the capacity to
meet interest payments and principal repayments. Adverse business, financial, or
economic conditions will likely impair capacity or willingness to pay interest and repay
principal. The "B" rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied "BB" or "BB" rating.
CCC - Debt rated "CCC" has a currently identifiable vulnerability to default, and is
dependent upon favorable business, financial, and economic conditions to meet timely
payment of interest and repayment of principal. In the event of adverse business,
financial, or economic conditions, it is not likely to have the capacity to pay interest and
repay principal. The "CCC" rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied "B" or"B" rating.
CC - The rating "CC" typically is applied to debt subordinated to senior debt that is
assigned an actual or implied "CCC" debt rating.
C - The rating "C" typically is applied to debt subordinated to senior debt which is
assigned an actual or implied "CCC" debt rating. The "C" rating may be used to cover a
situation where a bankruptcy petition has been filed, but debt service payments are
continued.
Cl -The rating "Cl" is reserved for income bonds on which no interest is being paid.
D - Debt rated "D" is in payment default. The "D" rating category is used when interest
payments or principal payments are not made on the date due even if the applicable
grace period has not expired, unless S&P believes that such payments will be made
during such grace period. The "D" rating also will be used upon the filing of a bankruptcy
petition if debt service payments are jeopardized.
Plus (+) or Minus (-) - The ratings from "AA" to "CCC" may be modified by the addition
of a plus or minus sign to show relative standing within the major rating categories.
NR - Indicates no rating has been requested, that there is insufficient information on
which to base a rating, or that S&P does not rate a particular type of obligation as a
matter of policy.
FY 2014-15 First Quarter Financial Report
This Page Intentionally Left Blank
a
C7 q
October 30, 2014
STAFF REPORT
Certificates of Participation (COP) Quarterly Report
for the Period Ended September 30, 2014
Summary
The District began issuing Certificates of Participation (COPs) in 1990. These COPS
were a part of our long-term financing plan that included both variable interest rate and
traditional fixed rate borrowing. Following are the current outstanding debt issues of the
District:
In May 2007, the District issued $95.18 million of fixed rate COPs, Series 2007A
refunding a portion of the Series 2003 fixed rate debt. The true interest cost for the
issue is 4.5 percent.
In December 2007, the District issued $300 million of fixed rate COPS, Series 2007E at
a true interest cast of 4.71 percent for the issue.
In September 2008, the District issued $27.8 million of fixed rate COPs, Series 2008B
refunding the Series 1993 variable rate debt. The true interest cost for the issue is 2.96
percent.
In May 2009, the District issued $200 million of fixed rate COPS, Series 2009A at a true
interest cost of 4.72 percent for the issue.
In May 2010, the District issued $80.0 million of fixed rate BABs, Series 2010A at a true
interest cost of 3.6B percent for the issue.
In December 2010, the District issued $157.0 million of fixed rate BABs, Series 2010C
at a true interest cost of 4.11 percent for the issue.
In October 2011, the District issued $147.595 million of fixed rate COPS, Series 2011A
refunding a portion of the Series 2D00 variable rate debt and a portion of the Series
2003 fixed rate debt. The true interest cost for the issue is 2.61 percent.
O D ♦ P.O.B 819 4 r unWin V.1l ,CA 82728-81 V ♦ (714)M.2411
Quarterly COP Report
For the Three Months Ended September 30, 2014
Page 2 of 2
In March 2012, the District issued $100.645 million of fixed rate COPs, Series 2012A
refunding the Series 2003 fixed rate debt. The true interest cost for the issue is 3.54
percent.
In August 2012, the District issued $66.395 million of fixed rate COPS, Series 2012E
refunding the Series 2000 variable rate debt. The true interest cost for the issue is 1.50
percent.
With the issuance of Series 2012B, there remains no variable interest rate COPs at the
District.
In October 2013, the District issued $129.625 million of fixed rate CANS, Series 2013A
paying the Series 2012C fixed rate debt. The true interest cost for the issue is 0.17
percent.
In August 2014, the District issued $85.090 million of fixed rate COPS, Series 2014A,
refunding a portion of Series 2007E debt. The true interest cost for the issue is 2.34
percent.
Additional Information
The graph entitled, "OCSD COP Rate History Report," shows the various fixed interest
rates of the District's eleven debt issues.
Attachments
1. Graph - OCSD COP Rate History Report
Pmpamd by Finance, 11M2014,2:18 PM
OCSD COP RATE HISTORY REPORT
SEPTEMBER 2014
6.00
&00
4.00
X
WQ
C
3.00
2.00
1.00
0.00
DATE - x - � ^
y—W..2MB F..d W.20MFl.W —. Ms2012BF� SW.2011AFk.
—�Smw 20 AFU �Wm2W]BFi� ~weftsWt Fn �SWW2010AFina1
r—S..20=Fi sal.mm Fustl �Se�ea 20tCA FveE
Gbxcel.dtaVn22201geNl\Flnanme ATEHIST.97
FY 2014-15 First Quarter Financial Report
This Page Intentionally Left Blank
ORANGE COUNTY SANITATION DISTRICT
FINANCIAL MANAGEMENT DIVISION
10844 Ellis Avenue
Fountain Valley, California 92708-7018
714.962.2411
www.oGsewers.com
9/30/14
ADMINISTRATION COMMITTEE Meeting Date TOBE.Of Dir.
nnvta 'Iisna
AGENDA REPORT tennNumber Item Number
s
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: GENERAL MANAGER APPROVED PURCHASES
GENERAL MANAGER'S RECOMMENDATION
Receive and file District purchases made under the General Manager's authority for the
period of July 1, 2014—September 30, 2014.
SUMMARY
In accordance with Board purchasing policies, Ordinance OCSD-44, the General Manager
has authority to approve purchases between $50,000 and $100,000. Below is a summary of
General Manager approved purchases exceeding $50,000 for the first quarter of fiscal year
2014-15.
SUMMARY
Vendor Name Amount Department Description/Discussion
White Nelson Diehl Evans $75,000 Administrative Internal Auditing Services
LLP Services
Operations UPS/Battery Charger
Camali Corp. $98,720 & Maintenance
Maintenance Specification No. S-2014-619
Monterey Bay Aquarium Operations Ocean Acidification Mooring
Research $73,236 & construction and servicing
Maintenance
CSL Services, Inc. $98,000 Engineering 2-72 Flow Monitoring Services
Operations Rotating Rectifier
Gierlich Mitchell Inc $66,279 & Sole Source#1087
Maintenance
Operations Rebuild Sals Msp#4
Weir Specialty Pumps $62,323 & Sole Source#1048
Maintenance
PRIOR COMMITTEE/BOARD ACTIONS
None
Page 1 of 2
ADDITIONAL INFORMATION
N/A
CEQA
N/A
ATTACHMENT
None
Page 2 of 2
ADMINISTRATION COMMITTEE Meeting Date TOBA.of Dir.
11/12/14 Il/Ig/14
AGENDA REPORT IemNumber Item Number
6
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL
FINANCIAL REPORT (CAFR) FOR THE YEAR END JUNE 30, 2014.
GENERAL MANAGER'S RECOMMENDATION
Receive and file the Sanitation District's Comprehensive Annual Financial Report for the
year ended June 30, 2014, prepared by staff and audited by McGladrey, Certified Public
Accountants, along with the following reports prepared by McGladrey:
A. Report to the Administration Committee; and
B. Report on Internal Controls; and
C. Independent Accountants' Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets.
SUMMARY
The Sanitation District's independent auditors, McGladrey, have completed their
examination of the Sanitation District's financial statements for the year ended June 30,
2014, and have issued an unmodified opinion. Each year, the Administration
Committee reviews the results of the audit and the corresponding Auditor's report.
During their audit, McGladrey, noted no matters involving the internal control over
financial reporting and its operations that they consider to be material weakness.
McGladrey will attend the meeting to respond to any questions of Directors.
Staff has prepared the Comprehensive Annual Financial Report, including the audited
financial statements. As the Sanitation District has consistently earned the Certificate of
Achievement for Excellence in Financial Reporting from the Government Finance
Officers Association (GFOA), this year's report will be submitted to GFOA for their
review.
Page 1 of 2
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
N/A
ATTACHMENTS
The following attachment(s) are included in hard copy, and may also be viewed on-line at the OCSD
website(www.ocsd.com) with the complete agenda package and attachments:
• Report to the Administration Committee
• Report on Internal Controls
• Response to Recommendation from Auditor's Internal Control Report
• Independent Accountants' Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets
• Comprehensive Annual Financial Report for the Year Ended June 30, 2014.
(Separately bound document)
Page 2 of 2
Orange County Sanitation
District
Report to the Administration Committee
October 30, 2014
McGladrey Assurance-Tax•Consulting
M<Gledrcy LLV
18401 Von Kaanan,5"Floor
Irvine,CA 92612-8531
McGladrey 0949.2556500 F949255.5091
w.ve.mcglatlrey.com
October 30, 2014
Members of the Administration Committee
Orange County Sanitation District
Fountain Valley, CA
We are pleased to present this report related to our audit of the financial statements of the Orange
County Sanitation District(the District)as of and for the year ended June 30, 2014. This report
summarizes certain matters required by professional standards to be communicated to you in your
oversight responsibility for the District's financial reporting process.
This report is intended solely for the information and use of the Administration Committee,the Board of
Directors and management, and is not intended to be, and should not be, used by anyone other than
these specified parties. It will be our pleasure to respond to any questions you have about this report.We
appreciate the opportunity to continue to be of service to the District.
/%CT-&� L�/�
.. l-,Mux eI.1.1—m 1-1-1—k.1 mtltPe,tleM... tNs,n-n .—.,M1,—
Contents
Required Communications 1-2
Summary of Significant Accounting Estimates 3-4
Summary of Uncorrected Misstatements 5
Exhibit A—Letter Communicating a Significant Deficiency in Internal Control Over Financial
Reporting
Exhibit B—Significant Written Communication Between Management and Our Firm
Representation Letter
Required Communications
Generally accepted auditing standards (AU-C 260, The Auditor's Communication With Those Charged
With Governance)require the auditor to promote effective two-way communication between the auditor
and those charged with governance. Consistent with this requirement, the following summarizes our
responsibilities regarding the financial statement audit as well as observations arising from our audit that
are significant and relevant to your responsibility to oversee the financial reporting process:
Area Comments
Our Responsibilities With Our responsibilities under auditing standards generally accepted in
Regard to the Financial the United States of America have been described to you in our
Statement Audit arrangement letter dated August 4, 2014.
Overview of the Planned We have issued a separate communication regarding the planned
Scope and Timing of the scope and timing of our audit and have discussed with you our
Financial Statement Audit identification of, and planned audit response to, significant risks of
material misstatement.
Accounting Policies and Preferability of Accounting Policies and Practices
Practices Under generally accepted accounting principles, in certain
circumstances, management may select among alternative
accounting practices. In our view, in such circumstances,
management has selected the preferable accounting practice.
Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of
the accounting policies used by the District. The District did not adopt
any significant new accounting policies nor have there been any
changes in existing significant accounting policies during the current
period.
Significant or Unusual Transactions
We did not identify any significant or unusual transactions or
significant accounting policies in controversial or emerging areas for
which there is a lack of authoritative guidance or consensus.
Management's Judgments and Accounting Estimates
Summary information about the process used by management in
formulating particularly sensitive accounting estimates and about our
conclusions regarding the reasonableness of those estimates is in the
attached Summary of Significant Accounting Estimates.
Audit Adjustments There were no audit adjustments made to the original trial balance
presented to us to begin our audit.
Uncorrected Misstatements Uncorrected misstatements are summarized in the attached
Summary of Uncorrected Misstatements.
1
Area Comments
Disagreements With We encountered no disagreements with management over the
Management application of significant accounting principles, the basis for
management's judgments on any significant matters,the scope of the
audit, or significant disclosures to be included in the financial
statements.
Consultations with Other We are not aware of any consultations management had with other
Accountants accountants about accounting or auditing matters.
Significant Issues Following is a description of significant issues arising from the audit
Discussed With that were discussed with management:
Management
• Significant deficiency for complex accounting matters,as
described in Exhibit A
• Capitalized costs and insurance recoveries identified in the
Summary of Uncorrected Misstatements
Significant Difficulties We did not encounter any significant difficulties in dealing with
Encountered in Performing management during the audit.
the Audit
Letter Communicating a We have separately communicated a significant deficiency in internal
Significant Deficiency in control over financial reporting identified during our audit of the
Internal Control Over financial statements, and this communication is attached as Exhibit A.
Financial Reporting
Significant Written A copy of a significant written communication between our Firm and
Communication Between the management of the District, the representation letter provided to
Management and Our Firm us by management, is attached as Exhibit B.
2
Orange County Sanitation District
Summary of Significant Accounting Estimates
Year Ended June 30, 2014
Accounting estimates are an integral part of the preparation of financial statements and are based upon
management's current judgment.The process used by management encompasses its knowledge and
experience about past and current events, and certain assumptions about future events. You may wish to
monitor throughout the year the process used to determine and record these accounting estimates.The
following describes the significant accounting estimates reflected in the District's June 30, 2014 financial
statements:
Basis for Our
Conclusions on
Management's Reasonableness of
Estimate Accounting Policy Estimation Process Estimate
Useful Lives of Long- The estimated useful Management reviews We tested the
Lived Assets lives of assets generally for changes in the reasonableness of
have the following useful lives of long-lived information underlying
ranges:sewage assets by evaluating management's
collection facilities, prominent events or estimate. Based on our
50 years; sewage changes in procedures,we
treatment facilities, circumstances affecting concluded that the
40 years; sewage capital assets to assigned useful lives of
disposal facilities, determine whether capital assets are
40 years; and general impairment or change in reasonable.
plant and administrative the useful life of a
facilities, 11.5 years. capital asset has
These assets are occurred.A capital
depreciated using the asset is considered
straight-line method. impaired if both the
Construction in process decline in the service
is not depreciated until utility of the capital
ready for intended use. asset is large in
magnitude and the
event or change in
circumstances is
outside the normal fife
cycle of the capital
asset.
Pension Obligations A pension or OPEB For OPEB, We tested the
and Postemployment asset is recorded if management utilizes an reasonableness of the
Benefits Other Than contributions exceed the actuarial consulting firm information underlying
Pensions (OPEB) annual required to perform an evaluation the actuarial
contribution. A pension using the entry age evaluations. Based on
or OPEB liability is actuarial cost method. our procedures,we
recorded if the Management reviewed concluded that the
contributions are less and approved the pension and OPEB
than the annual required actuarial assumptions costs recorded are
contribution. and calculations used to reasonable.
determine the
postemployment benefit
costs.
3
Basis for Our
Conclusions on
Management's Reasonableness of
Estimate Accounting Policy Estimation Process Estimate
Pension Obligations For pension obligation,
and Postemployment management utilizes
Benefits Other Than Orange County
Pensions (OPEB) Employees' Retirement
(Continued) System's (OCERS)
actuaries for its defined
benefit plan.
Management reviewed
and approved the
actuarial assumptions
and calculations used to
determine the pension
costs.
For the Additional
Retiree Benefit Account
(ARBA)defined benefit
plan obligation,
management utilizes an
actuarial consulting firm
to perform an evaluation
using the projected unit
credit cost method.
Management reviewed
and approved the
actuarial assumptions
and calculations used to
determine the AREA
costs.
4
Orange County Sanitation District
Summary of Uncorrected Misstatements
Year Ended June 30, 2014
During the course of our audit, we accumulated uncorrected misstatements that were determined by
management to be immaterial, both individually and in the aggregate,to the statements of financial
position, results of operations and cash flows, and to the related financial statement disclosures.
Following is a summary of those differences:
Effect—Increase loser easa)
Description Assets Liabilities Equity Revenue Expenditure
Prior Year Misstatements
• Error related to IRW D annual integration
adjustment $ - $ - $ 9.468788 $ - $ 91
• Capitalized repair costs and accrual of
loss contingency for Project 5-58 (6,011,098) 8,458,286 (14,469,384) - -
• Unamoriized goodwill amortization related
to the IRWD transactions (2,220,857) - (2,220,857) - -
• Effects of additional capitalized Interest
from the prior year 638,625 - 638,625 - -
• Variance in premiums and discounts of
long-term obligations between straight-
line and the effective interest methods - (1,308,824) 1.308.824 - -
Current Year Misstatements
• Insurance recoveries received and netted
against Project 5-58 13.600.000 - - 13,600,000 -
• To reverse the capitalization of loss
contingency for Project 5-58 (8,458,286) (8,458,286) - - -
• Invoices not properly accrued in the
current year - 164,483 - - 164,483
• Current year adjustment unamortized
goodwill related to the IRWDtransactions 657,709 - - - (667,709)
• Current year depreciation of additional
capitalized interest from poor years (16,375) - - - 16,375
• Current year adjustment to premiums
and discounts of long-tern obligations
for the difference between straight-line
and the effective interest methods - (382,636) - - (382,636)
• Variance in the estimated amount for
Incurred but not reported of claims
liability - 568,100 - 568,100
Total effect 4,422,599 $ 13,600,000 $ 9,177,401
Balance sheet effect $ (1,810,282) $ (958,877) $ (851,405)
5
Exhibit A—Letter Communicating a Significant Deficiency in Internal Control Over
Financial Reporting
M<Gladmyl
18401 Von Karel 5"Floor
Irvine,CA 92612-8531
• McGladrey 0949.2556500 F949255.5091
glatlrey.com
To Management and Board of Directors
Orange County Sanitation District
Fountain Valley, CA
In planning and performing our audit of the financial statements of the Orange County Sanitation District
(the District)as of and for the year ended June 30, 2014, in accordance with auditing standards generally
accepted in the United States of America,we considered the District's internal control over financial
reporting(internal control)as a basis for designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the District's internal control.Accordingly,we do
not express an opinion on the effectiveness of the District's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be significant deficiencies or
material weaknesses. Therefore,there can be no assurance that all deficiencies, significant deficiencies
or material weaknesses have been identified. However, as discussed below, we identified a certain
deficiency in internal control that we consider to be a significant deficiency.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions,to prevent, or
detect and correct, misstatements on a timely basis.A material weakness is a deficiency, or combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the financial statements will not be prevented, or detected and corrected, on a timely basis.
A significant deficiency is a deficiency,or a combination of deficiencies, in internal control that is less
severe than a material weakness,yet important enough to merit attention by those charged with
governance.We consider the following deficiency to be a significant deficiency:
Documentation of Complex Accounting Matters
During our audit,we discussed with management significant accounting matters that had occurred during
the period under audit. These matters include the corrections made by financial management to the Irvine
Ranch Water District liability that was caused by a prior year error, and the accounting for insurance
recoveries and certain capitalized costs.When significant accounting and reporting matters arise, the
District's system of accounting controls needs to provide a means to better identify and ensure that these
matters are accurately recorded within the financial records.The process should address all technical
documentation requirements,the approval process, and communication with the Board of Directors and
users of financial statements.
This communication is intended solely for the information and use of management,the Board of Directors
and others within the organization, and is not intended to be,and should not be, used by anyone other
than
/these specified parties.
/yCaEl GLP
Irvine, CA /
October 23, 2014
MambrdNaa5Mln1erna11-1-1-1,.1lndpertlenl a¢ou ,lvanJ mnwk,gfirmt.
Exhibit B—Significant Written Communication Between Management and Our
Firm
ServinV Orange County Sanitation District
10844 Ellis Avenue,Fountain Valley,CA 92706
Anaheim (714)962-2411Brea www.ocsE.wers.com
October 23, 2014
Buena Park
Cypress McGladrey LLP
18401 Von Karman Avenue, 5th Floor
FounhalnValley Irvine, CA 92612
Fullerton
Garden Goove This representation letter is provided in connection with your audit of the financial
Huntington Beach ,t statements of the Orange County Sanitation District (the District) as of and for the
year ended June 30, 2014 for the purpose of expressing an opinion on whether
Invine a the financial statements are presented fairly, in all material respects, in
LaHabm accordance with accounting principles generally accepted in the United States of
America (U.S. GAAP).
La Palma
We confirm, to the best of our knowledge and belief, that as of October 23, 2014:
Los Alamitos
Newport Beach Financial Statements
Orange 1. We have fulfilled our responsibilities, as set out in the terms of the audit
Placentia arrangement letter dated August 4, 2014, for the preparation and fair
presentation of the financial statements referred to above in accordance with
Santa Ana U.S. GAAP.
SealBeach
2. We acknowledge our responsibility for the design, implementation and
Stanton maintenance of internal control relevant to the preparation and fair
Tustin presentation of financial statements that are free from material misstatement,
Villa Park whether due to fraud or error.
Yorba Linda 3. We acknowledge our responsibility for the design, implementation and
OrangeCounty of maintenance of internal control to prevent and detect fraud.
Costa Mesa, 4. Significant assumptions used by us in making accounting estimates, including
Sanitary District those measured at fair value, are reasonable and reflect ourjudgment based
on our knowledge and experience about past and current events and our
Midway City SanitaryDistrict assumptions about conditions we expect to exist and courses of action we
expect to take.
Invine Ranch
Water District 5. All events subsequent to the date of the financial statements, and for which
U.S. GAAP requires adjustment or disclosure, have been adjusted or
disclosed.
6. The effects of all known actual or possible litigation and claims have been
accounted for and disclosed in accordance with U.S. GAAP.
7. Net interest costs of approximately $7.6 million were properly capitalized on
projects of the District. All projects included in construction in progress for
which interest is not being capitalized is due to the assets being ready for
their intended use in accordance with U.S. GAAP.
MP
8. There are no capital assets that have experienced permanent impairment as
we protect public health and the environment by providing
effective wastewater collection, treatment,and recycling.
McGladrey LLP
too October 23,2014
Page 2
indicated in Governmental Accounting Standards Board (GASS) Statement
No. 42, Accounting and Financial Reporting for Impairment of Capital Assets
and for Insurance Recoveries.
9. The amounts due to the Irvine Ranch Water District of$29,107,270 have
been accurately calculated based on the applicable agreements. Additionally,
the journal entry error of$9,468,768, which occurred for the year ended June
30, 2013, was corrected in the current year's financial statements, which
results in nonoperating revenue being overstated by$9,468,768.
Management concludes that the correction reported in the year ended June
30, 2014 report would not mislead a user of the financial statements.
10. The $8,458,286 in current year costs for Project 5-58 were anticipated as of
June 30, 2013, and management considers these part of the overall project
cost (i.e., capitalized costs versus expenses). As a result, management
believes these costs were properly capitalized into construction in progress
during the year ended June 30, 2014. In connection with this project, the
District received $13,600,000 in insurance recoveries during the year ended
June 30, 2014, which is netted against capitalized cost related to the project.
Management believes the exclusion of the amount from nonoperating
revenues is not a material misstatement to the June 30, 2014 financial
statements.
11. There are no restatements of net position that should be reported as of June
30, 2014 and all uncorrected misstatements are immaterial to the financial
statements.
12. There are no unasserted claims or assessments that our lawyer has advised
us are probable of assertion and must be disclosed in accordance with
Statement of Financial Accounting Standards No.5 and/or GASS Statement
No.10.
13. We have no direct or indirect, legal or moral obligation for any debt of any
organization, public or private that is not disclosed in the financial statements.
14. We have complied with all aspects of contractual agreements that would
have a material effect on the financial statements in the event of
noncompliance. In connection therewith, we specifically represent that we are
responsible for determining that we are not subject to the requirements of the
Single Audit Act and U.S. Office of Management and Budget Circular No. A-
133, because we have not received, expended, or otherwise been the
beneficiary of the required amount of federal awards during the period of this
audit.
15. We have informed you of all uncorrected misstatements.
As of and for the year ended June 30, 2014, we believe that the effects of the
uncorrected misstatements aggregated by you and summarized below are
immaterial, both individually and in the aggregate, to the financial statements. For
v Star, McGladrey LLP
October 23,2014
Page 3
�• purposes of this representation, we consider items to be material, regardless of
1ME ea their size, if they involve the misstatement or omission of accounting information
that, in light of surrounding circumstances, makes it probable that the judgment
of a reasonable person relying on the information would be changed or
influenced by the omission or misstatement.
Even-Increase(Decrease)
Destdpron Assert Liopltes Equity Revenue Expemdituna
Prior Year Mlsstatememts
•Emu related M IRWD annual m egral
adjustment S S - S 9.468,788 S - S 9468.788
•Capitalized repair costs and accrual of
his,roya ray la Prejed 558 (6011,098) 8.458.286 (14,469,384) - -
•Unamorlized goccoll onontraaon related
to the IRWD thansacrions (2720,857) - (2,220,857) - -
• Effects of additional capitalized interest
from the prior year 638625 - 638,625 - -
Variance in premiums and discounts of
long lerm oblgations Statement Still
Ism aid the effec8.e interests IMS (1,308,824) 1,708B24 - -
Cement Year Misstatement,
•Irmaance moments received and needed
agoersl Projects a 13.600,000 - - 13.600,000
•To reverse then cmpilolutlen of less
con6ngancy for Project 5.58 (8.458.286) (8,458,286) - - -
•are"..1 primary,accrued is the
'need Year - 164.483 - 164,483
•Cuuemtyearaljuslmenlunomnlded
gooAeiX related to the lRWD eansaclwns 657,709 - - (657709)
•Current Year depreciation of additional
capitalized interest from prig years (18375) - - 16.375
•Current year adjustment to premiums
and discounts of lorp.temn obligations
for the difference bemoan straight line
and the eBetlrve interest methods - (382,636) (382,636)
•Vanance in the estimated amount for
incurred thin had national of claims
legally 568,100 568,100
Total effect 4,422,590 517600000 $ 9,177401
Balance sheet effect S (1810,282) S (958,877) $ (051405i
Information Provided
16. We have provided you with:
a. Access to all information of which we are aware that is relevant to the
preparation and fair presentation of the financial statements such as
records, documentation and other matters.
b. Additional information that you have requested from us for the purpose of
the audit.
x ex,q, 4 McGladrey LLP
October 23,2014
Page 4
,• c. Unrestricted access to persons within the District from whom you
determined it necessary to obtain audit evidence.
d. Minutes of the meetings of the governing board and committees, or
summaries of actions of recent meetings for which minutes have not yet
been prepared.
17. All transactions have been recorded in the accounting records and are
reflected in the financial statements.
18. We have disclosed to you the results of our assessment of risk that the
financial statements may be materially misstated as a result of fraud.
19. We have no knowledge of allegations of fraud or suspected fraud affecting
the District's financial statements involving:
a. Management.
b. Employees who have significant roles in internal control.
c. Others where the fraud could have a material effect on the financial
statements.
20. We have no knowledge of any allegations of fraud or suspected fraud
affecting the District's financial statements received in communications from
employees, former employees, analysts, regulators or others.
21. We have no knowledge of noncompliance or suspected noncompliance with
laws or regulations whose effects were considered when preparing financial
statements.
22. We have disclosed to you all known actual or possible litigation and claims
whose effects should be considered when preparing the financial statements.
23. We have disclosed to you the identity of the District's related parties and all
the related-party relationships and transactions of which we are aware.
24. We have informed you of all significant deficiencies, including material
weaknesses, in the design or operation of internal controls that could
adversely affect the District's ability to record, process, summarize and report
financial data.
25. We are aware of no communications from regulatory agencies concerning
noncompliance with, or deficiencies in,financial reporting practices.
26. During the course of your audit, you may have accumulated records
containing data that should be reflected in our books and records. All such
data have been so reflected. Accordingly, copies of such records in your
possession are no longer needed by us.
McGladrey LLP
October 23,2014
Page 5
a
Pa
ORANGE COUNTY SANITATION DISTRICT
J+'��
meserberg, General-M1annage,r
J "✓
Lorenzo Tyne irector of Finance and
Adm��inistrUtratt e Services
��
Mike White, Controller
M<Gladmyl
18401 Von Karel 5"Floor
Irvine,CA 92612-8531
• McGladrey 0949.2556500 F949255.5091
glatlrey.com
To Management and Board of Directors
Orange County Sanitation District
Fountain Valley, CA
In planning and performing our audit of the financial statements of the Orange County Sanitation District
(the District)as of and for the year ended June 30, 2014, in accordance with auditing standards generally
accepted in the United States of America,we considered the District's internal control over financial
reporting(internal control)as a basis for designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the District's internal control.Accordingly,we do
not express an opinion on the effectiveness of the District's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be significant deficiencies or
material weaknesses. Therefore,there can be no assurance that all deficiencies, significant deficiencies
or material weaknesses have been identified. However, as discussed below, we identified a certain
deficiency in internal control that we consider to be a significant deficiency.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions,to prevent, or
detect and correct, misstatements on a timely basis.A material weakness is a deficiency, or combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the financial statements will not be prevented, or detected and corrected, on a timely basis.
A significant deficiency is a deficiency,or a combination of deficiencies, in internal control that is less
severe than a material weakness,yet important enough to merit attention by those charged with
governance.We consider the following deficiency to be a significant deficiency:
Documentation of Complex Accounting Matters
During our audit,we discussed with management significant accounting matters that had occurred during
the period under audit. These matters include the corrections made by financial management to the Irvine
Ranch Water District liability that was caused by a prior year error, and the accounting for insurance
recoveries and certain capitalized costs.When significant accounting and reporting matters arise, the
District's system of accounting controls needs to provide a means to better identify and ensure that these
matters are accurately recorded within the financial records.The process should address all technical
documentation requirements,the approval process, and communication with the Board of Directors and
users of financial statements.
This communication is intended solely for the information and use of management,the Board of Directors
and others within the organization, and is not intended to be,and should not be, used by anyone other
than
/these specified parties.
/yCaEl GLP
Irvine, CA /
October 23, 2014
MambrdNaa5Mln1erna11-1-1-1,.1lndpertlenl a¢ou ,lvanJ mnwk,gfirmt.
p ORANGE COUNTY SANITATION DISTRICT
np Staff Report
DATE: November 12, 2014
TO: Administration Committee
FROM: Michael D. White, Controller
SUBJECT: Response to Recommendation from Auditor's Internal Control Letter
Dated October 23, 2014
The auditing firm McGladrey completed their audit of the District's financial statements
as of and for the year ended June 30, 2014. Their audit took into consideration the
District's internal controls over financial reporting in designing their audit procedures for
the purpose of expressing an opinion on these statements.
During their limited review of internal controls, they uncovered what they believe to be a
significant deficiency, but not a material weakness, in the accounting and reporting of
complex accounting matters. This finding is related to the two following instances:
Annual Adjustment to Allocated Joint Capital Assets
Finding
The first instance involved an annual adjustment to allocate the joint capital assets
within Revenue Area 14 based on their proportional share of the District. During the
prior year's financial reporting process, a journal entry to record this adjustment was
prepared incorrectly that erroneously increased the liability to the Irvine Ranch Water
District (IRWD). However, this error was uncovered by Financial Management following
the prior year end close during the annual reconciliation reporting to IRWD, and
corrected during the current year. This was an accounting and financial reporting error
and not a cash transaction error as no cash payments were made as a result of this
error.
Response
Financial Management has now increased its oversight review on journal entries
containing large dollar amounts by requiring a second approval process.
Accounting for Insurance Recoveries and Certain Capitalized Costs
Finding
The second instance involved the accounting for insurance recoveries and certain
capitalized costs. The District incurred construction failures related to Project 5-58—
Bitter Point Force Main Rehabilitation. All costs related to the project, including the
Response to Internal Audit Report on Accounting Policies and Procedures Issued on
November 12, 2014
Page 2 of 2
costs incurred to correct the deficiencies, were capitalized as construction costs. When
insurance recoveries were eventually received, they were recording as a reduction to
the total project cost. According to generally accepted accounting principles (GAAP),
the construction deficiencies, or repairs, should have been recorded as a non-operating
expense as opposed to capital assets and the insurance recoveries as non-operating
revenues as opposed to being a reduction to the capital asset. As all receipts and
disbursements have been properly accounted for, the net effect in the recording of this
capital asset is an overstatement of the capital asset, Project 5-58, and total equity by
$869,000. Project 5-58 has accumulated $36.2 million in construction-in-progress at
June 30, 2014.
Response
A procedure has been put into place where Financial Management will meet with
Engineering at the end of each fiscal year to determine if any there are any existing
projects that have impairments or construction defects that requires additional costs, or
are subject to litigation or have potential insurance recoveries to ensure that the cost of
these projects are properly accounted for.
McGladmyLLP
19401 Von Kannan,5"Floor
Irvine,CA 92612-8531
• McGladrey 094e255.6500 F949255.5091
w.ve.mcglatlrey.com
Independent Accountant's Report on
Applying Agreed-Upon Procedures
Board of Directors
Orange County Sanitation District
Fountain Valley, CA
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Calculation of the Orange County Sanitation District (the District) for the year ended June 30, 2014.
These procedures, which were agreed to by the District and the League of California Cities (as presented
in the publication entitled Agreed-Upon Procedures Applied to the Appropriations Limitation Prescribed by
Article XIII-B of the California Constitution), were performed solely to assist the District in meeting the
requirements of Section 1.5 of Article XIII-B of the California Constitution. The District's management is
responsible for the Appropriations Limit Calculation.
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these procedures
is solely the responsibility of those parties specified in this report. Consequently, we make no
representation regarding the sufficiency of the procedures described below, either for the purpose for
which this report has been requested or for any other purpose.
The procedures performed and our findings were as follows:
1. We obtained the completed internal calculations from management and compared the limit and
annual adjustment factors included in those calculations to the limit and annual adjustment factors
that were adopted by a resolution of the Board of Directors. We also compared the population and
inflation options included in the aforementioned worksheets to those that were selected by a recorded
vote of the Board of Directors.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Calculation, we added line A, last year's limit, to line E,
total adjustments, and compared the resulting amount to line F, this year's limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the current year information presented in the accompanying Appropriations Limit
Calculation to the supporting calculations described in item 1 above.
Finding: No exceptions were noted as a result of our procedures.
4. We compared the prior year Appropriations Limit presented in the accompanying Appropriations Limit
Calculation to the prior year Appropriations Limit adopted by the Board of Directors for the prior year.
Finding: No exceptions were noted as a result of our procedures.
M. LM,wu,RSM IM—n-1 nM,S ,kM ma MOM a—MMI,tMMA rem.minnnn..
We were not engaged to and did not conduct an audit, the objective of which would be the expression of
an opinion on the accompanying Appropriations Limit Calculation of the District. Accordingly, we do not
express such an opinion. Had we performed additional procedures, other matters might have come to our
attention that would have been reported to you. No procedures have been performed with respect to the
determination of the appropriations limit for the base year, as defined by Article XIII-B of the California
Constitution.
This report is intended solely for the information and use of the Board of Directors and management of
the District, and is not intended to be, and should not be, used by anyone other than these specified
parties. HHjo/�we'ver,this report is a matter of public record and its distribution is not limited.
/`/G 112n G LP
Irvine, CA /
October 23,2014
Orange County Sanitation District
Appropriations Limit Calculation
Year Ended June 30,2014
Amount Source
A. Last year's limit $ 85,833,923
B. Adjustment factors
1. Population change 1.0072 State Finance
2. Per capita change 1.0512 State Finance
Total adjustment[(B.1 x B.2)-1.0] 0.0588 (B.1xB.2)
C. Annual adjustment 5,044,343 (BxA)
D. Other adjustments:
1. Loss responsibility(- ) -
2.Transfer to private (- ) -
3.Transfer to fees(- ) -
4.Assumed responsibility(+ )
Subtotal
E. Total adjustments 5,044,343 (C+D)
F. This year's limit $ 90,878,266 (A+E)
Orange County Sanitation District
Comprehensive Annual
Financial Report
for the period ended June 30, 2014
with comparative totals for June 30, 2013
y't: r z44
r J 1
ti r►
Orange County, California
ORANGE COUNTY SANITATION DISTRICT
ORANGE COUNTY, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2014
WITH COMPARATIVE TOTALS FOR JUNE 30, 2013
Prepared By:
Administrative Services Department
Financial Management Division
Michael D.White, CPA
Controller
(THIS PAGE LEFT INTENTIONALLY BLANK)
ORANGE COUNTY SANITATION DISTRICT
Comprehensive Annual Financial Report
Table of Contents
For the Year Ended June 30, 2014
With Comparative Totals for the Year Ended June 30,2013
Paae
INTRODUCTORY SECTION:
Letter of Transmittal i-vii
GFOA Certificate of Achievement vill
Boardof Directors........................................................................................................................ ix
OrganizationChart...................................................................................................................... x
Mapof Service Area.................................................................................................................... A
FINANCIAL SECTION:
Independent Auditor's Report...................................................................................................... 1-2
Management Discussion and Analysis—Required Supplementary Information. 3-8
Basic Financial Statements:
Statement of Net Position 10
Statement of Revenues, Expenses, and Changes in Net Position 11
Statement of Cash Flows 12
Notes to Basic Financial Statements 13-37
Supplementary Information:
Combining Area Schedule of Net Position.......................................................................... 40
Combining Area Schedule of Revenues, Expenses, and Changes in Net Position .......... 41
Combining Area Schedule of Cash Flows.......................................................................... 42
STATISTICAL SECTION:
Net Position by Component—Last Ten Fiscal Years.................................................................. 44
Revenues and Gross Capital Contributions by Source—Last Ten Fiscal Years........................ 45
Expenses by Type—Last Ten Fiscal Years................................................................................ 46
Change in Net Position—Last Ten Fiscal Years......................................................................... 47
Cash and Investment Reserve Balances—Last Ten Fiscal Years............................................. 48
Sewer Service Fees—Last Nine Fiscal Years& Next Fiscal Year............................................. 49
Number of Accounts and Revenues by Customer Class—Last Ten Fiscal Years..................... 50
Principal Sewer Service Customers—Current Fiscal Year and Nine Years Ago....................... 51
Ratio of Annual Debt Service to Total Expenses—Last Ten Fiscal Years................................. 52
Debt Coverage Ratios—Last Ten Fiscal Years.......................................................................... 53
Computation of Direct and Overlapping Debt—Current Fiscal Year.......................................... 54
Ratios of Outstanding Debt—Last Ten Fiscal Years. 55
Comparison of the Volume of Wastewater Treated—Last Ten Fiscal Years. 56
Authorized Full-time Equivalents by Function—Last Ten Fiscal Years. 57
Biosolids Produced—Last Ten Fiscal Years............................................................................... 58
Capital Asset Statistics—Last Ten Fiscal Years......................................................................... 59
Demographic Statistics—Last Ten Fiscal Years......................................................................... 60
Estimated Population Served by Orange County Sanitation District—Current Fiscal Year....... 61
Principal Orange County Employers—Current Fiscal Year and Nine Years Ago....................... 62
OperatingIndicators.................................................................................................................... 63
OTHER DATA&TRENDS:
Cash and Investment Portfolio—As of June 30, 2014................................................................ 66
Property Tax Rates—Direct and Overlapping Governments—Last Ten Fiscal Years............... 67
Assessed and Estimated Actual Value of Taxable Property—Last Ten Fiscal Years................ 68
Property Tax and User Fee Levies and Collections—Last Ten Fiscal Years. 69
Property Value and Construction—Last Ten Fiscal Years ......................................................... 70
Insurance in Force 71
(THIS PAGE LEFT INTENTIONALLY BLANK)
Orange County Sanitation District
Serving 30844 BIG Aerie.Fountain Valley.G192708
Anaheim 7149622411Cyaress . wwwo6ewescom
Brea
Butena Park
October 23,2014
Fountain Valley
Fullermin The Board of Directors of the
Garden Grove Orange County Sanitation District,
Orange County, California
Hantiagon Beach
Submitted herewith is the Comprehensive Annual Financial Report of the Orange County Sanitation
Irvine District, Orange County, California for the fiscal year ended June 30, 2014. This report includes the
La Habe financial position and activity of individual revenue areas, as described within the Governmental
Structure below, as of June 30, 2014 and was prepared by the Financial Management Division of
La Palm the Sanitation District's Administrative Services Department.
LosAiamitte
Responsibility for both the accuracy of the data, and the completeness and fairness of the
presentation, including all disclosures, rests with the Sanitation District. To the best of our
knowledge and belief, the enclosed data is accurate in all material respects and is reported in a
• a manner designed to present fairly the financial position and results of operations of the Sanitation
Placenta District. All disclosures necessary to enable the reader to gain an understanding of the agency's
financial activities have been included.
Santa Ana Included within the accompanying financial statements are all of the organizations, activities, and
Seal Beach functions controlled by the Sanitation District's Board of Directors in accordance with the
Stanton Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and
Financial Reporting. For the purpose of this evaluation, control was determined by the Board's
responsibility for: (1) adoption of the budget and user charges, (2) taxing authority, and (3)
establishment of policies. The reporting entity and its services are described in further detail in Note
Villa Pan, 1 of the financial statements.
Yortua Linda An audit of the books, financial records and transactions of the Sanitation District is conducted
countyoforarge annually by independent certified public accountants. The Sanitation District selected the
accounting firm of McGladrey LLP to perform the audit for the year ended June 30, 2014. The
Costs• auditors' report on the Sanitation District's basic financial statements and supplementary information
Sanitary istrict is located on page 1 within the financial section of this report. This report renders an unmodified
opinion on the Sanitation District's basic financial statements for the year ended June 30, 2014.
MidwaySanitary r^
Management's discussion and analysis (MD&A) immediately follows the independent auditor's
Iname Reach report and provides a narrative introduction, overview, and analysis of the basic financial
DefunctWater statements. The MD&A complements this letter of transmittal and should be read in conjunction
with it.
GOVERNMENTALSTRUCTURE
The Orange County Sanitation District encompasses the Northern section of Orange County. The
�g Sanitation District provides wastewater treatment for an area of the County covering 479 square
miles and serving a population of approximately 2.5 million, or 81 percent of the County's
population. The Sanitation District was originally incorporated in 1954 as nine separate public
corporations, or districts. In April of 1998, at the Sanitation District's request, the Board of
Supervisors of the County of Orange passed Resolution No. 98-140 ordering the consolidation of
,E these nine County Sanitation Districts into a new, single sanitation district, to be known as the
Orange County Sanitation District, effective July 1, 1998. This action was recommended to the
Board by the Local Agency Formation Commission in order to simplify governance structures,
i
We protect public health and the environment by providing
effective wastewater collection, treatment,and recycling
reduce the size of the Board, ease administrative processes, streamline decision-making and consolidate
accounting and auditing processes. The boundaries of the nine previous districts had remained intact for
the purpose of collecting sewer user fees at the previously established rate schedules, and were referred
to as nine individual revenue areas through June 30, 2000. Effective July 1, 2003, all Revenue Areas,
except Revenue Area 14, consolidated user fee rates and all enterprise fund accounting and budgeting
activities and are now known as the Consolidated Revenue Area.
The Sanitation District is managed by an administrative organization composed of directors appointed by
the agencies or cities which are serviced by the Sanitation District. Each of the two remaining Revenue
Areas, the Consolidated Revenue Area and Revenue Area 14, has its own budget and is responsible for
the construction and maintenance of its own collection system. All Revenue Areas, except Revenue Area
14 and the portion of the Consolidated Revenue Area previously known as Revenue Area 13, receive
their own share of the one-percent ad valorem property tax levy. In addition, all Revenue Areas except
Revenue Area 14, collect user fees from property owners. Revenue Area 14 receives all of its revenues
from service charges to the Irvine Ranch Water District.
The purpose of the Sanitation District's wastewater management program is to protect the public's health,
preserve the beneficial uses of the coastal waters, and maintain air quality. The objectives of operating
the treatment plants are to process and dispose of the treated wastewater and the separated solids in
accordance with Federal, state, and local laws including the Environmental Protection Agency.
The Sanitation District sewerage system includes approximately 580 miles of sewers that convey
wastewater generated within the Sanitation District's boundaries to the Sanitation District's two
wastewater treatment plants, Reclamation Plant No. 1 located in the City of Fountain Valley, and
Treatment Plant No.2located in the City of Huntington Beach.
Plants No. 1 and No. 2 have secondary treatment capacities of 182 million gallons per day(mgd)and 150
mgd, respectively. Both plants are master-planned for a future primary and secondary treatment capacity
of 235 mgd for a combined total of 470 mgd by the year 2070.
After wastewater receives secondary treatment at Plant No. 1, it flows to the Groundwater Water
Replenishment System (GWRS) at the Orange County Water District, located adjacent to the Sanitation
District, where it undergoes a state-of-the-art purification process consisting of microfiltration, reverse
osmosis, and ultraviolet light with hydrogen peroxide. The product water is near-distilled quality.
Approximately 35 million gallons (132,500 cubic meters) per day of the GWRS water are pumped into
injection wells to create a seawater intrusion barrier. Another 35 million gallons (132,500 cubic meters)
are pumped daily to Orange County Water District's percolation basins in Anaheim where the GWRS
water naturally filters through sand and gravel to the deep aquifers of the groundwater basin.
Remaining outflows of treated wastewater from Plants 1 and 2 are combined and discharged to the
ocean off the Huntington Beach coast through an ouffall pipe that is 120 inches in diameter and
approximately five miles long. The last mile of the outfall pipe is a diffuser that dilutes the wastewater
with seawater in a ratio of 148 parts seawater to one part treated wastewater at an average depth of 185
feet.
ECONOMIC CONDITIONS AND OUTLOOK
In April 2014, the Institute for Economic and Environmental Studies at the California State University
Fullerton Mihaylo College of Business and Economics(CSUF)forecasts that the real U.S. gross domestic
product will grow an average of 2.4 percent this year, less than originally anticipated due to the weather
setbacks and the reduction of an inventory buildup in the first half of the year, and then rise to 3.1 percent
in 2015.
The CSUF forecast reports that Orange County payroll employment rose by 36,000 during 2013 for a 2.5
percent increase, approximately the same amount as in 2012. The two years of solid growth comes after
a loss of 141,000 jobs during 2007-2010. Over the three-year period from 2010-2013, Orange County
has regained approximately 88,000 jobs of all the total jobs lost during the devastation of the Great
Recession. Job losses during the recession were concentrated in a handful of sectors with the largest
decline occurring in Construction (-35,000) that shrank by an unprecedented 45 percent. In magnitude,
this was followed by Manufacturing (-30,000), Professional & Business Service (-30,000), Financial
Services (-24,000)and Retail Sales (-20,000). Some of these most hard-hit sectors have also rebounded
over the past three years. The gains were led by Professional & Business Services (20,000), Leisure &
Hospitality (19,000), Educational and Health Services (16,000), Construction (9,000), and Financial
Services(9,000).
CSUF expects Orange County payroll employment to increase by 38,000, or 2.7 percent in 2014 and by
41,000, or 2.8 percent in 2015. The Orange County average annual unemployment rate is forecasted to
drop slightly below 6.0 percent in 2014 and to 5.5 percent in 2015.
According to CSUF, housing construction has improved significantly but has a long way to go before
getting to the pre-recession levels. Housing starts fell unexpectedly in 2013 but are showing better
performance in early 2014 and are expected to continue to improve. Spending on residential and
commercial developments continued to show healthy growth in 2013 and is expected to maintain that
pace.
A strengthening economy and lower inventory levels have been pushing up the prices of housing. The
number of foreclosures has gone down substantially and there has been little addition to the stock of
housing due to relatively slow improvement in construction. The annual increase on the basis of
Corelogic data for Orange County housing price for an existing single-family home was 19.3 percent for
2013 to a level of$625,000. CSUF expects a 7-9 percent increase in 2014 and a 5-7 percent increase in
2015.
MAJOR INITIATIVES
Following are the District's current major initiatives as outlined in the General Manager's work plan for FY
2015-15:
1. Safety and Security— Prioritize and implement measures to reduce risk and provide a secure and
safe workplace for our employees, as well as protecting our regional infrastructure. Complete
Administrative or Engineering Controls for high priority items identified in the Safety Study (SP-145)
by December 31, 2014. Develop an Implementation Plan for the standard Administration and
Engineering Controls identified in the Safety Study by June 30, 2015. Complete a Vulnerability Self-
Assessment and identify security improvements by December 31, 2014.
2. Future Water Recvclina — Work with Orange County Water District (OCWD) to jointly study
improvements needed to support the Groundwater Replenishment System Final Expansion.
Determine partnerships, needs, strategies, benefits and costs associated with recycling any
remaining flows from Plant No. 2 effluent water. Issue Request for Proposals for SP-173 Effluent
Reuse Study by January 2015 and update agreement with OCWD by June 2015.
3. Infrastructure Stability — Expand the current asset management program to enhance the
maintenance of civil assets (concrete, structures, steel, etc.). Develop by June 30, 2015 a civil asset
management plan including goals, implementation tasks and resource needs.
4. Operational Optimization — Continue to evaluate and optimize operations at the Sanitation District
focusing on:
• Efficiency — Effective Utility Management Model — Complete the review and self-assessment by
December 31,2014.
iii
• Cost Savings — By June 30, 2015, continue stakeholder outreach efforts, submit request to re-
open ocean discharge permit, negotiate removal of disinfection requirements, and discontinue use
of disinfection chemicals for effluent discharge through the long outfall, realizing an annual cost
savings of$425,000.
• Best Management Practices — Develop business work Flows for implementing best practices for
planning and scheduling maintenance, conduct training, and go-live with Maximo, the new
computerized maintenance management system(CMMS)by June 30, 2015.
• Shared Services— Explore and determine areas where shared services can improve performance
and reduce costs for OCSD rate payers by consolidating functions.
5. Communication Strategy—Prepare a recommendation by June 30, 2015 for the Board of Directors
on OCSD's corporate identity and the possibility of moving OCSD's brand from "wastewater' to a
.resource recovery facility'.
6. Capital Budget Expenditure—Target 90 percent expenditure on major Engineering Capital Projects
for FY 14115.
7. Workforce Planning and Workforce Development — Improve, increase, and implement tools to
expand labor force capacity and staff skill levels by June 30, 2015.
8. Administrative Facilities — Prepare and present an Implementation Plan for the replacement of
Plant No. 1 administrative facilities to the Board of Directors by June 30,2015.
9. Operational Resiliency — By June 30, 2015 complete a comprehensive review of the Integrated
Emergency Response Plan with three table top drills exercises, complete a risk register and develop
a scope of work for a business continuity plan to ensure OCSD is prepared to continue operations in
the event of a significant event.
10. Odor Control Master Plan— Develop a recommendation on odor treatment technologies and levels
of service goals for both plant facilities. Issue a request for proposal for SP-166, Plant Odor Control
Master Plan by January 31, 2015.
11. Research — Finalize fuel cell research project and present findings with recommendations to the
Board of Directors by December 31, 2014. Identify and propose two research opportunities to the
Board of Directors by June 30, 2015.
12. Energy Efflciencv — Evaluate OCSD facilities, through an energy audit, to identify energy savings
strategies that are economically and operationally feasible. Present findings and recommendations to
the Board of Directors by June 30, 2015.
Strategic Planning
In November 2013, the Board of Directors approved the annual update to the rolling five-year strategic
plan. This is a comprehensive strategic plan to steer OCSD's efforts and engage the organization to
envision service levels and operational needs for the next five years. This annual process begins with the
General Manager's Office initiating the planning effort with the Executive Management Team, and then
soliciting input and ideas from managers and supervisors. A draft of the updated five-year strategic plan
is then presented to the Board of Directors during a workshop, where Board Members discuss and
deliberate changes and additions to the plan.
Driven by the Sanitation District's mission, vision and core values, the 2014 Strategic Plan update
maintains an aggressive effort to meet the sanitation, health, and safely needs of the 2.5 million people
being served in a cost effective manner,while protecting the environment where we live.
iv
Since the implementation of the first strategic plan in 2007, 38 strategic goals have been established and
completed. Following are the strategic goals included in the 2014 Strategic Plan:
1. Providing Exceptional Customer Service
a. Completion of the Odor Control Master Plan.
2. Protecting the Public Health
a. Development of Future Biosolids Management Options.
b. Research new energy efficiency and conversion technologies.
3. Managing and Protecting the Public's Funds
a. Cessation of Disinfection of Ocean Discharge.
b. Ownership transfer of local sewers.
4. Stakeholder Understanding and Support
a. Communicating the District's mission and strategies with those we serve and other
stakeholders.
b. Partnering with others to benefit our customers,this region, and our industry.
5. Organizational Effectiveness
a. Creating the best possible workforce in terms of safety, productivity, customer service,
and training.
This strategic plan continues to chart a focused roadmap of success for the future of the Orange County
Sanitation District. It addresses critical issues and challenges, and communicates clear and concise
future direction to Sanitation District staff.
SERVICE EFFORTS AND ACCOMPLISHMENTS
In January 2014, the Sanitation District and with the Orange County Water District were named the
recipients of the 2014 U.S. Water Prize for the Ground Water Replenishment System by the U.S. Water
Alliance. This is award goes to those agencies that best promote the value of water and the power of
innovating and integrating water sustainability.
In February 2014, the Sanitation District received the Wastewater Treatment Project of the Year Award
from the American Society of Civil Engineers, the Engineering Project of the Year Award from the Orange
County Engineering Council, and the Project Achievement Award for Projects Over$100 million from the
Construction Management Association of America for the Plant No.2 Headworks Replacement Project.
In March 2014, the Sanitation District received the 2014 Plant Safety Award (for plants requiring 76 or
more employees)from the Califomia Water Environment Association.
In March 2014, the Sanitation District received the award for the Best Marketing/Communications
Campaign from the California Association of Public Information Officers.
In May 2014, the Sanitation District received the 2014 American In-house Design Award from Graphic
Design USA for the Fats, Oils and Grease residential campaign.
ACCOUNTING AND BUDGETARY CONTROLS
The Sanitation District's accounting records are maintained on the accrual basis. In developing and
evaluating the Sanitation District's accounting system, consideration is given to the adequacy of internal
accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute,
assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition;
v
and (2)the reliability of financial records for preparing financial statements and maintaining accountability
for assets. The concept of reasonable assurance recognizes that: (1) the cost of a control should not
exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires estimates
and judgments by management. We believe that the Sanitation District's internal accounting controls
adequately safeguard assets and provide reasonable assurance of proper recording of financial
transactions.
Each year the Sanitation District's Board of Directors adopts an annual operating plan. A joint works
budget is first prepared that identifies the specific capital projects and operating activities to be
undertaken by the Sanitation District during the year. The budgetary level of control, the level at which
expenses cannot exceed budget, is exercised at the individual district, or fund level. The Sanitation
District has adopted a Uniform Purchasing Policy that identifies the agreed upon purchasing standards.
ACCUMULATED FUNDS AND RESERVES POLICY
The Board of Directors of the Orange County Sanitation District has established the following
Accumulated Funds and Reserves Policy:
Cash Flow Reserve: is established to fund operations, maintenance and certificates of participation
expenses for the first half of the fiscal year, prior to the receipt of the first installment of the property tax
allocation and the sewer service user fees which are collected as a separate line item on the property tax
bill. The level of this reserve will be established as the sum of an amount equal to six months operations
and maintenance expenses and the total of the annual debt (COP) service payments due in August each
year.
Operating Contingency Reserve: is established to provide for non-recurring expenditures that were not
anticipated when the annual budget and sewer service fees were considered and adopted. The level of
this reserve will be established at an amount equal to ten percent of the annual operating budget.
Capital Improvement Reserve: is established to fund annual increments of the capital improvement
program. The long-term target is for one half of the capital improvement program to be funded from
borrowing and for one half to be funded from current revenues and reserves. With this program in mind,
the target level of this reserve has been established at one half of the average annual capital
improvement program through the year 2020. Levels higher and lower than the target can be expected
while the long-term financing and capital improvement programs are being finalized.
Catastrophic Loss or Self-Insurance Reserves: are established for property damage including fire,
flood and earthquake; for general liability; and for workers' compensation. These reserves are intended
to work with purchased insurance policies, FEMA disaster reimbursements and State disaster
reimbursements. Based on the current infrastructure replacement value of$6.2 billion, the reserve level
has been set to fund the District's non-reimbursed costs, estimated to be$57 million.
Capital Replacement/Renewal Reserve Policy: is established to provide thirty percent of the funding to
replace or refurbish the current collection and treatment and disposal facilities at the end of their useful
economic lives. The current replacement value of these facilities is estimated to be $3.09 billion for the
collection facilities and $3.11 billion for the treatment and disposal facilities. The initial reserve level was
established at$50 million, which will be augmented by interest earnings and a small portion of the annual
sewer user fees in order to meet projected needs through the year 2030.
Debt Service Reserves: Provisions of the various Certificate of Participation (COP) issues require debt
service reserves to be under the control of the Trustee for that issue. These reserve funds are not
available for the general needs of the District and must be maintained at specified levels. The level of
required COP service reserves at June 30, 2014 was $45.3 million. In addition, the District's Debt
vi
Service Reserve policy requires total debt service reserves to be ten percent of the total outstanding COP
debt, or$131 million at June 30,2014.
Accumulated funds exceeding the levels specified by District policy will be maintained in a rate
stabilization fund. These funds will be applied to future years' needs in order to maintain rates or to
moderate annual fluctuations. There is no established target for this reserve. _
As of June 30, 2014,the Sanitation District was in compliance with the Accumulated Funds and Reserves
Policy with designated cash and investments totaling $673 million, and have been earmarked for the
following specific purposes in accordance with the Sanitation District's reserve policy:
Designated Cash and Investments
Designated For Cash Flow Contingency $189 million
Designated For Self-Insurance 57 million
Designated For Capital Improvements 296 million
Designated For Debt Service Requirements 131 million
Total Designated Cash and Investments $_millb2i673 million
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE
IN FINANCIAL REPORTING
The Government Finance Officers' Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the Orange County Sanitation District
for the Sanitation District's comprehensive annual financial report for the year ended June 30,2013. This
was the twentieth consecutive year that the Sanitation District has received this award. In order to be
awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently
organized comprehensive annual financial report, whose contents conform to program standards. Such
reports must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program
requirements and we are submitting it to GFOA to determine its eligibility for another certificate.
ACKNOWLEDGMENTS
This report could not have been accomplished without the dedicated services of the Financial
Management Division staff, and I would like to especially express my appreciation to Line Hsiao,
Accounting Supervisor, who assisted in its preparation. I would also like to thank the Sanitation District's
Board of Directors, the General Manager, and the Director of Finance and Administrative Services for
their interest and support in conducting the financial operations of the Sanitation District in a responsible
and progressive manner.
Resp�y su itt
Michael D.White, CPA
Controller
vii
G�9
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Orange County Sanitation District
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2013
Psccutice. Director/l
viii
ORANGE COUNTY SANITATION DISTRICT
Board of Directors
As of June 30, 2014
Aaencv Active Director Alternate Director
Cities:
Anaheim Lucille Kring Jordan Brandman
Brea Brett Murdock Roy Moore
Buena Park Fred Smith Steve Berry
Cypress Prakash Narain Doug Bailey
Fountain Valley Steve Nagel Michael Vo
Fullerton Gregory Sebourn Jan Flory
Garden Grove Steve Jones Kris Beard
Huntington Beach Joe Carchio Dave Sullivan
Irvine Steven Choi Christina Shea
La Habra Tom Beamish Rose Espinoza
La Palma Peter Kim Gerard Goedhart
Los Alamitos Troy Edgar Richard Murphy
Newport Beach Keith Curry Rush Hill
Orange Teresa Smith Mark Murphy
Placentia Scott Nelson Constance Underhill
Santa Ana David Benavides Sal Tinajero
Seal Beach Michael Levitt Gordon Shanks
Stanton David Shawver Carol Warren
Tustin John Nielsen Allan Bernstein
Villa Park Brad Reese Greg Mills
Yorba Linda Gene Hernandez John Anderson
Sanitary Water Districts:
Costa Mesa Sanitary District James M. Ferryman Robert Ooten
Midway City Sanitary District Tyler Diep Allan P. Krippner
Irvine Ranch Water District John Withers Douglas Reinhart
County Areas:
Member of the Board Janet Nguyen Shawn Nelson
of Supervisors
ix
ORANGE COUNTY SANITATION DISTRICT
Organizational Chart
As of June 30, 2014
oenua Cpniex ompe
FMD
�� MD 0&mM
BaaE Sas
FFv,ml Mpnt. FaalAn&,W � w Ramp
ROpFddaF
Ca,axb. EpipieM RapW2 pwdm
WMr,pa RabWf OD Off
Mtupu rp
Bun4' ap�ip6
FMM SwNm Oau 1 W ���
Hanatioi Mfd�A4id
Trh,oMd�
Fain Mu�FYm6 Enwan�Y
E y,m�g EIerYCIMa Gmpbre
Y q EmmnaY
� IaEveby6
Owa�Mwibiq
OCvd Gaimim
Ca�eUvn
X
ORANGE COUNTY SANITATION DISTRICT
Map of Service Area
As of June 30, 2014
LA HABRA
} BREA
Orange County, FULLERTON
Calrfomia
map nma uaw VORBA LINDA
PLA TIA
A ARK
ANAHEIM
RE VILLA
PARK
LOS NTO ORANGE
ITOS
RD VE
NS R
SEAL
BEACH A
IVT
61 TUS
P1
H TCN
COST
Pacific Oceav MESA
P
Outfalls
BEACH
N
Service Area Boundary A
DISCUIMER:Map prepared by Me Orange Cwnq
- Reclamation Plant No. 1 (P1) sanitation Distm,.7hm map Ia Imende lwr
Treatment Plant No. 2(P2) e,a0pal represenvtion only No level or aocuvaq
Is aalmeol poisons of No,aenvea pipi,upl oontan
unincorporated orange Count white areas 9ep,raphcal Inannawn copyNhud by Rand
ng y( ) Mol 2013.An Rrehh Resents.
Sewer pipelines Reused:oWm,e
A
(THIS PAGE LEFT INTENTIONALLY BLANK)
xii
MaGtadMLLP
18a01 Von Karman.5m Floor
Irvine.CA 92612 8531
McGladrey mc56500 F9<92555091
vMwv
� www.mrgfadreYctyn
Independent Auditor's Report
To the Board of Directors
Orange County Sanitation District
Fountain Valley, CA
Report on the Financial Statements
We have audited the accompanying financial statements of the Orange County Sanitation District (the
District) as of and for the year ended June 30, 2014, and the related notes to the financial statements,
which collectively comprise the District's basic financial statements, as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally aceepted in the United States of America; this includes
the design, implementation and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the District as of June 30, 2014, and the changes in its financial position and its cash
Flows for the year then ended, in accordance with accounting principles generally accepted in the United
States of America.
1
Me mMr of the B SM Intern at Ienet nat—kal lnE Men armu Iing na antl mnsoh4gfirms.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's
discussion and analysis be presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board, which considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that comprise
the District's basic financial statements. The separate"Combining Area" financial statements, introductory
section, statistical section, and other data and trends are presented for purposes of additional analysis
and are not a required part of the basic financial statements.
The"Combining Area"financial statements are the responsibility of management and were derived from,
and relate directly to, the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the"Combining Area"financial statements are fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
The introductory and statistical sections and other data and trends have not been subjected to the
auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not
express an opinion or provide any assurance on them.
Report on Summarized Comparative Information
We have previously audited the District's June 30, 2013 financial statements, and we expressed an
unmodified audit opinion on those audited financial statements in our report dated October 30, 2013. In
our opinion, the summarized comparative information presented herein as of and for the year ended
June 30, 2013 is consistent, in all material respects, with the audited financial statements from which it
has been derived.
�G�r![w�tzy GAP
Irvine,CA
October 23, 2014
2
Management Discussion and Analysis
June 30,2014
This section of the financial statements of the Orange County Sanitation District (District) is
management's narrative overview and analysis of the financial activities of the District for the fiscal year
ended June 30, 2014. The information presented here is to be considered in conjunction with additional
information provided within the letter of transmittal located in the Introductory Section of this report.
Financial Highlights
• As of June 30, 2014, the assets and deferred outflows of the District exceeded its liabilities by
$1,822.3 million (net position). Of this amount, $617.6 million represents unrestricted net position,
which may be used to meet the District's ongoing obligations to citizens and creditors.
• The District's total net position increased$121.6 million,or 7.1 percent over the prior year.
• Net Capital Assets, consisting of non-depreciable capital assets and depreciable capital assets net of
accumulated depreciation,decreased $12.2 million, or 0.5 percent over the prior year.
• Net investment in capital assets increased $24.4 million, or 2.1 percent.
• Unrestricted Net Assets increased$97.2 million, or 18.7 percent from the prior year.
• The District's total outstanding bonded debt decreased by$416.7 million over the prior year to $1.233
billion.
Overview of the Basic Financial Statements
The District operates as a utility enterprise and presents its financial statements using the economic
resources measurement focus and the full accrual basis of accounting. As an enterprise fund, the
District's basic financial statements are comprised of two components: financial statements and notes to
the financial statements. This report also contains other supplementary information in addition to the
basic financial statements themselves.
In accordance with the Governmental Accounting Standards Board (GASB)Codification of Governmental
Accounting and Financial Reporting Standards, the District's financial statements include a Statement of
Net Position; Statement of Revenues, Expenses and Changes in Net Position; and a Statement of Cash
Flows. The Statement of Net Position includes all of the District's assets, deferred outflow of resources
and liabilities; and provides information about the nature and amounts of investments in resources
(assets) and the obligations to District creditors (liabilities). It also provides the basis for computing the
rate of return, evaluating the capital structure of the District, and assessing the liquidity and financial
flexibility of the District.
The Statement of Revenues, Expenses, and Changes in Net Position accounts for the current year's
revenues and expenses. This statement measures the success of the District's operations over the past
year and can be used to determine the District's creditworthiness. It also highlights the District's
dependency on property tax revenues in supplementing user fees and other charges for recovering total
cost.
The final required financial statement, the Statement of Cash Flows, reports cash receipts, cash
payments, and net changes in cash resulting from operations and investments of the reporting period.
Net Position
As previously noted, net position increased $121.6 million, or 7.1 percent over the net position for FY
2012-13, to$1,822.3 million in Fiscal Year 2013-14. In comparison, net position increased $103.1 million,
or 6.5 percent in FY 2012-13 over Fiscal Year 2011-12, to$1,700.7 million.
3
(Dollars in thousands)
Percentage
June 30, June 30, Increase Increase
2014 2013 (Decrease) (Decrease)
Assets and deferred outflow
of resources
Assets
Current and other assets $ 755,807 $ 691,853 $ 63,954 9.2%
Net Capital assets 2,420,005 2,432,214 (12,209) -0.5%
Total assets 3,175,812 3,124,067 51,745 1.7%
Deferred outflow of
resources 18,173 20,723 (2,550) -12.3%
Total Assets and deferred
outflow of resources 3,193,985 3,144,790 49,195 1.6%
Liabilities
Current liabilities 113,987 278,265 (164,278) -59.0%
Noncurrent liabilities 1,257,703 1,165,800 91,903 7.9%
Total liabilities 1,371,690 1,444,065 (72,375) -5.0%
Net position:
Net investment in
capital assets 1,204,706 1,180,298 24,408 2.1%
Unrestricted 617,589 520,427 97,162 18.7%
Total net position E 1,822,295 $ 1,700,725 $ 121,570 7.1%
Current and other assets increased $64.0 million, or 9.2 percent, due primarily to net cash provided by
operations of $134.6 million, proceeds from property taxes of $75.1 million, receipt of capital facilities
capacity charges of $12.5 million, and other government repayments of $10.7 million offset by capital
outlays of$75.3 million, interest expense of$53.4 million, and bonded debt retirements of$39.3 million.
Net Capital assets decreased $12.2 million, or 0.5 percent, due mostly to the ongoing capital
improvement program construction in progress additions of $87.5 million less depreciation of $98.8
million. Included in total capital outlay additions is the Sludge Dewaterng and Odor Control Project at
Plant No. 1 with a total project budget of$172.0 million. This project constructs primary sludge thickening
facilities to improve solids handling capacity, replace aging sludge dewatering facilities, reduce biosolids
handling and disposal, and rehabilitate obsolete solids handling odor control equipment. In FY 2013-14,
the District incurred project costs of$21.9 million bringing the total cost-to-date to $48.6 million. Another
solids handling project underway is the Solids Thickening and Processing Upgrades at Plant No. 2. This
project consists of the rehabilitation and upgrades to the four existing dissolved air flotation thickeners
(DAFTs) to treat the current activated sludge plant solids as well as the additional solids that will be
generated from the new secondary trickling filterlsolids contractor process. In FY 2013-14, $15.1 million
of the total project budget of $48.1 million was incurred bringing the cost-to-date to $32.5 million with
completion in FY 2017-18.
Two large collection system projects; Dover Drive Trunk Sewer Relief, with total project budget of$13.8
million; and Balboa Trunk Sewer Rehabilitation, with a total project budget of $8.1 million; incurred
significant outlays in FY 2013-14. The Dover Drive project is being built to increase the hydraulic capacity
for 7,300 lineal feet of existing 15-inch to 18-inch sewer line located in the City of Newport Beach. In FY
2013-14, the District incurred project costs of$7.8 million bringing the total cost-to-date to $10.6 million.
The Balboa project consists of the rehabilitation of the existing Balboa Trunk Sewer, also in the City of
Newport Beach, that includes a new protective lining in approximately 12,000 feet of sewer pipeline. In
4
FY 2013-14, the District incurred project costs of$5.0 million bringing the total cost-to-date to$6.7 million.
See page 7 for the Schedule of Capital Assets and listing of other major capital additions for FY 2013-14.
Current Liabilities decreased $164.3 million, or 59.0 percent over the prior year due primarily to the
refunding of the $129.6 million Certificates of Anticipation Notes (CANS) Series 2013A, maturing in
October 2014, and being replaced with the non-current two-year$120.9 million CANS Series 2014B.
Net Investment in capital assets increased $24.4 million, or 2.1 percent over the prior year primarily as a
result of the net reduction in capital assets of$12.3 million offset by the $36.6 million decrease in related
debt. The net reduction in capital assets consists of the $87.5 million increase in construction in progress
offset by capital asset depreciation for the year of$99.8 million.
Unrestricted net position increased $97.2 million, or 18.7 percent due to the overall increase in net
position of$121.6 million offset by the increase in net investment in capital assets of$24.4 million.
Changes In Net Position
Net position increased $121.6 million in FY 2013-14, a 7.1 percent increase over the prior year.
(Dollars in thousands)
Percentage
June 30, June 30, Increase Increase
2014 2013 (Decrease) (Decrease)
Revenues:
Operating revenues
Service Charges $ 300,611 $ 303,400 $ (2,789) -0.9%
Permit and inspection fees 848 1,176 (328) -27.9%
Total operating revenues 301,459 304,576 (3,117) -1.0%
Non-operating revenues
Property taxes 74,944 79,240 (4,296) -5.4%
Investment and interest income 6,498 (3,913) 10,411 266.1%
Contrib.from other government 11,278 2,064 9,224 449.1%
Other 1,317 1,727 (410) -23.7%
Total non-operating revenues 94,037 79,108 14,929 18.9%
Total revenues 395,496 383,684 11,812 3.1%
Expenses:
Operating expense other than
depreciation and amortization 146,447 149,817 (3,370) -2.2%
Depreciation and amortization 99,805 63,907 35,898 56.2%
Non-operating expense 41,767 79,650 (37,883) 47.6%
Total expenses 288,019 293,374 (5,355) -1.8%
Income before capital
contributions 107,477 90,310 17,167 19.0%
Capital facilitites capacity charges 14,093 12,797 1,296 10.1%
Increase in net position 121,570 103,107 18,463 17.9%
Beginning net position 1.700.725 1,597,618 103,107 6.5%
Ending net position $ 1,822,295 $ 1,700,725 121,570 7.1%
5
Sources of Revenue Functional 6rpenses III Collections
June 30,2014 June 30,2014
'111j(
14% 9% ■Treatment&
III Disposal
■User Fees ❑Depreciation&
Amortization
❑Other
❑Taxes Levied 40% ❑Interest
35% Expense
■Other
As previously stated, an enterprise fund is used to account for the operations of the District, which is
financed and operated in a manner similar to private business enterprises. This allows the District to
determine that the costs (expenses, including depreciation and amortization) of providing wastewater
management services on a continuing basis are financed or recovered primarily through user charges.
Sewer service user fees are evaluated annually based primarily on budget requirements for total
operation and maintenance expenses and capital outlays for providing wastewater management services.
Property tax revenues are dedicated for the payment of debt service.
In FY 2013-14, operating revenues decreased $3.1 million, or 1.0 percent over the prior year that is
reflective of a $16.2 million decrease in the solids capital lease revenue from IRWD that is mostly offset
by the increase in service charges from $288.6 million in FY 2012-13 to $302.1 million in FY 2013-14, or
a $13.5 million or 4.7 percent increase. The increase in service charges is primarily due to the 4.8 percent
increase in the average sewer user fee rate over the prior year. The decrease in solids capital lease
revenue is mostly due to the adjustments made to the estimated solids capital lease revenue previously
recorded for the past three years against the final reconciliation when all relevant construction and
laboratory data became available.
The $14.9 million, or 18.9 percent increase in non-operating revenues primarily consists of a $10.4
million, or 266.1 percent increase in investment and interest income, a $9.2 million, or 449.1 percent
increase in contributions from other governments that is partially offset by a $4.3 million, or 5.4 percent
decrease in property tax revenues, and a $0.4 million, or 23.7 percent decrease in other non-operating
revenues. The increase in investment and interest income is attributable to higher yields earned on
investments and higher cash and investments balances. Yields earned on investments increased from a
0.6 percent loss in FY 2012-13 to a gain of 1.1 percent in FY 2013-14 while cash and investment
balances increased from $600 million to $673 million. The increase in contributions from other
governments is reflective of the increase in capital contributions from IRWD. The decrease in property
tax revenue is primarily the result of the receipt of $8.7 million in one-time redevelopment dissolution
proceeds in the prior year. Discounting this one-time receipt, property taxes increased 4.4 percent over
the prior year, approximating the year-to-year increase in total assessed valuations of 4.1 percent. The
decrease in other non-operating revenues is mostly reflective of the $500,000 earned from a State grant
in the prior year.
Operating expense before depreciation and amortization decreased $3.4 million or 2.2 percent over the
prior year. The majority of this decrease is attributable to the $5.2 million decrease in feasibility studies
conducted in FY 2013-14 over the prior year. In addition, supplies, repairs and maintenance decreased
$0.8 million, or 3.3 percent due to reductions in disinfection chemicals of$0.4 million,or 56.0 percent, and
in chemical coagulants of $0.3 million, or 5.3 percent, due primarily to decreased disinfection
requirements and optimization of chemical dosing. Contractual services also decreased $0.6 million or
2.2 percent, as research and monitoring costs were lowered by $0.4 million, or 38.1 percent, due to
planned streamlining on these efforts during the FY 2013-14 budget process, and legal costs decreased
6
$0.3 million, or 18.5 percent, as legal arbitration costs of the prior year did not exist for fiscal year 2013-
14.
These decreases were partially offset by the increase in operating salaries and benefits of$2.3 million to
$79.2 million, a 3.0 percent increase over the prior year. The operating salaries and benefits costs are
part of the overall increase of $1.3 million in total salaries and benefits when including the salaries and
benefits capitalized within the capital improvement program. Overall, total District salaries and benefits
were $91.9 million, a 1.4 percent increase over the prior year total of $90.6 million. This increase is
mostly attributable to the $1.9 million, or 6.6 percent increase in benefits, as salaries and wages alone
decreased $0.6 million, or 1.0 percent. Meetings and training expenses also increased $0.2 million, or
29.5 percent primarily due to expanded efforts being placed towards safety and electrical maintenance
training.
Non-operating expense decreased $37.9 million, or 47.6 percent, and is primarily reflective of the
decrease in capital distribution back to the Irvine Ranch Water District (IRWD) as none was owed in FY
2013-14 but $26.6 million of capital distribution was owed back to IRWD in FY 2012-13. The decline in
FY 2013-14 was reflective of the decline in IRWD's equity share ownership based on decreased flows
discharged to the District. The flow level in FY 2013-14 had leveled out from the large decreases in prior
years. In addition, the loss on asset disposal of assets declined $9.4 million, or 49.1 percent from the
prior year primarily due to the write-off of the obsolete odor master plan and design totaling$8.1 million in
the prior year. A new odor master plan and project designs are currently underway.
Capital Facility Capacity Charges increased $1.3 million, or 10.1 percent over the prior year due to the
rebound in the economy and the increase activity in construction as total the total building permit
valuation in Orange County increased 21.8 percent in Fiscal Year 2013-14 over the prior year.
Capital Assets
At June 30, 2014, the District had a net investment of$2.420 billion in capital assets. This represents a
net decrease (including additions and deletions)of$12.2 million or 0.5 percent over the prior year.
(Dollars in thousands)
Percentage
June 30, June 30, Increase Increase
2014 2013 (Decrease) (Decrease)
Land $ 15,960 $ 15,960 $ - 0.0%
Construction in Progress 258,019 1,197,777 (939,758) -78.5%
Sewage collection facilities 453,824 351,731 102,093 29.0%
Sewage treatment facilities 1,568,340 738,893 829,447 112.3%
Effluent disposal facilities 39,314 40,902 (1,588) -3.9%
Solids disposal facilities 326 336 (10) -3.0%
General and administrative facilities 82,659 84,394 (1,735) -2.1%
Assets acquired in excess of book value 1,563 2,221 (658) -29.6%
Capital assets, net $ 2,420,005 $ 2,432,214 $ (12,209) -0.5%
Major capital asset additions for the current fiscal year included the following:
• $21.9 million-Sludge Dewatering and Odor Control at Plant No. 1
• $15.1 million-Solids Thickening and Processing Upgrades at Plant No.2
• $ 7.8 million-Dover Drive Trunk Sewer Relief
• $ 7.7 million-Sludge Digester Rehabilitation at Plant No. 1
• $ 5.0 million-Replacement of the Bitter Point Pump Station
7
More detailed information about the District's capital assets is provided in Notes 1 and 3 of Notes to the
Financial Statements.
Debt Administration
At June 30, 2014, the District had $1.275 billion outstanding in COP debt, a net decrease of$42.0 million,
or 3.3 percent over the prior year. This reduction consisted of the accumulation of principal payments
made in accordance with the schedule of debt service payments. In addition, Revenue Refunding
Certificate Anticipation Notes, Series 2013A Certificates of Anticipation Notes (CANS)fixed rate debt was
issued in the amount of$129.6 million in October 2013 to refund the $131.7 million outstanding principal
balance of the CANS Series 2012C fixed rate debt.
Both Standard and Poor's Corporation and Fitch Ratings reaffirmed their AAA rating of the Orange
County District in the past fiscal year. The District's long-range financing plan is designed to maintain this
high rating. Over the next five years, the District is projecting an additional $1.0 billion in future treatment
plant and collection system capital improvements. In accordance with the District's long-term debt fiscal
policy, the District will restrict long-tern borrowing to capital improvements that cannot be financed from
current revenue. However, no new debt issuances are being proposed over the next five years to assist
with the funding of the system improvements scheduled over this time period.
For more information on long-term debt activities, see Note 4 of the Notes to Basic Financial Statements.
Economic Factors and Next Year's Budgets and Rates
• The unemployment rate within the County of Orange is currently 5.4 percent, a decrease from the
rate of 6.1 percent a year ago.
• Inflation for Orange County in 2013 increased 1.1 percent based on the actual percentage change in
the consumer price index according to the June 2014 Economic and Business Review report
prepared by Chapman University.
• The actual rate of return on investments increased from the-0.6 percent earnings rate in FY 2012-13
to 1.1 percent for FY 2013-14.
All of these factors were considered in preparing the District's biennium budget beginning July 1, 2014.
The District's user fee schedule was increased by 2.6 percent for FY 2014-15 over the prior year. The
annual fee applicable to the District's largest customer base and the underlying basis for all other user
rates: the single-family residential fee, increased by $8.00, from $308.00 to $316.00. This rate increase
was necessary to finance the District's cash flow needs as capital improvement outlays alone are
projected to be $186.4 million in FY 2014-15 and are projected to total $2.3 billion over the next 10 years
in order to rehabilitate and upgrade existing facilities and provide for full secondary treatment standards.
Requests for Information
The financial report is designed to provide a general overview of the District's finances. Questions
concerning any of the information provided in this report or requests for additional financial information
should be addressed to the Financial Management Division, Orange County Sanitation District, 10844
Ellis Avenue, Fountain Valley, CA 92708-7018.
8
ORANGE COUNTY SANITATION DISTRICT
BASIC FINANCIAL STATEMENTS
9
ORANGE COUNTY SANITATION DISTRICT
Statement of Net Position
June 30, 2014
(With Comparative Data for June 30, 2013)
2014 2013
Current assets:
Cash and cash equivalents $ 215,296,895 $ 208,278,072
Investments 412,473,309 339,152,573
Accounts receivable, net of allowance for uncollectibles$29,452 7,829,997 9,757,514
Accrued interest receivable 1,396,378 1,596,362
Connection fees receivable 3,204,465 1,565,534
Property tax receivable 1,206,314 1,363,536
Inventories 5,837,424 5,689,074
Prepaid expenses 707,365 600,214
Prepaid retirement 20,113,512 17,555,710
Total current assets 668,065,659 585,558,589
Noncurrent assets:
Restricted:
Cash and cash equivalents 28,360,917 36,118,018
Investments 16,940,965 16,940,965
Accrued interest receivable 224,383 230,648
Unrestricted:
Non-depreciable capital assets 273,978,498 1,213,736,882
Depreciable capital assets, net of accumulated depreciation 2,146,026,324 1,218,477,069
Prepaid insurance on outstanding debt payable 1,582,280 1,658,521
Due from other governmental agency 40,623,151 51,336,000
Other noncurrent assets, net 10,344 10,344
Total noncurrent assets 2,507,746,862 2,538,508,447
Total assets 3,175,812,521 3,124,067,036
Deferred outflow of resources:
Deferred charges on refunding debt 18,172,646 20,722,872
Total assets and deferred outflow of resources 3,193,985,167 3,144,789,908
Current liabilities:
Accounts payable 11,922,059 11,485,962
Accrued expenses 7,295,661 8,123,120
Retentions payable 2,821,953 8,286,811
Interest payable 22,619,300 23,153,100
Due to other governmental agency 29,107,270 48,700,573
Current portion of long-term obligations 40,221,191 178,515,737
Total current liabilities 113,987,434 278,265,303
Noncurrent liabilities:
Noncurrent portion of long-term obligations 1,257,703,009 1,165,799,690
Total liabilities 1,371,690,443 1,444,064,993
Net position:
Net investment in capital assets 1,204,705,609 1,180,297,943
Unrestricted 617,589,115 520,426,972
Total net position $ 1,822,294,724 $ 1,700,724,915
See Accompanying Notes to Basic Financial Statements.
10
ORANGE COUNTY SANITATION DISTRICT
Statement of Revenues, Expenses, and Changes in Net Position
For the Year Ended June 30, 2014
(With Comparative Data for the Year Ended June 30, 2013)
2014 2013
Operating revenues:
Service charges $ 300,611,253 $ 303,399,529
Permit and inspection fees a48,060 1,176,106
Total operating revenues 301,459,313 304,575,635
Operating expenses other than depreciation
and amortization:
Salaries and benefits 79,178,740 76,878,551
Utilities 6,381,394 6,403,013
Supplies, repairs and maintenance 23,306,317 24,093,927
Contractual services 26,212,348 26,791,095
Directors'fees 157,715 144,713
Meetings and training 931,679 719,521
Feasibility studies 5,421,882 10,646,100
Other 4,857,006 4,140,333
Total operating expenses other than
depreciation and amortization 146,447,081 149,817,253
Operating income before depreciation
and amortization 155,012,232 154,758,382
Depreciation and amortization 99,804,966 63,906,B48
Operating income 55,207,266 90,851,534
Non-operating revenues:
Property taxes 74,943,941 79,239,497
Investment and interest income 6,497,653 (3,912,925)
Contributions from other government 11,278,421 2,054,154
Other 1,317,047 1,727,320
Total non-operating revenues 94,037,062 79,108,046
Non-operating expenses:
Interest 40,450,377 42,314,928
Contributions to other government - 26,590,533
Other 60,455 54,549
Loss on disposal of assets 1,256,400 10,689,755
Total non-operating expenses 41,767,232 79,649,765
Income before capital contributions 107,477,096 90,309,815
Capital Contributions;
Capital facilities capacity charges 14,092,713 12,797,483
Change in net position 121,569,809 103,107,298
Total net position-beginning 1,700,724,915 1,597,617,617
Total net position-ending $ 1,822,294,724 $ 1,700,724,915
See Accompanying Notes to Basic Financial Statements.
11
ORANGE COUNTY SANITATION DISTRICT
Statement of Cash Flows
For the Year Ended June 30,2014
(With Comparative Data for the Year Ended June 30,2013)
2014 2013
Cash flows from operating activities:
Receipts from customers and users $ 283,783,166 $ 305,300,505
Payments to employees (78,952,182) (77,697,268)
Payments to suppliers (72,736,404) (68,387,501)
Net cash provided by operations 132,094,580 159,215,736
Cash flows from noncapital financing activities:
Proceeds from property taxes 75,101,164 79,418,183
Proceeds from various resources 1,255,229 1,674,942
Net cash provided by noncapital financing acfivities 76,356,393 81,093,125
Cash flows from capital and related financing activities:
Capital facilities capacity charges 12,453,782 11,879,435
Additions to capital assets (72,852,832) (109,353,843)
Interest paid (53,434,264) (51,970,472)
Principal payments on debt obligation (171,290,000) (259,070,000)
Proceeds from debt issuances 131,991,954 216,506,206
Debt issuance costs (262,462) (838,884)
Contribution from other government 651
Net cash used in capital and related financing activities (153,393,171) (192,847,558)
Cash flows from investing activities:
Proceeds from the sale of investments 5,764,356,629 8,932,206,118
Purchases of investments (5,828,672,603) (8,896,971,673)
SARI project(advanceypayments 10,712,849 (20.483,710)
Interest received (2,192,955) 10,627,896
Net cash provided by(used in)investing activities (55,796,080) 25,378,631
Net increase(decrease)in cash and cash equivalents (738,278) 72,839,934
Cash and cash equivalents,beginning of year 244,396,090 171,556,156
Cash and cash equivalents,end of year $ 243,657,812 $ 244,396,090
Reconciliation of operating income to net cash provided by operating activities:
Operating income $ 55,207,266 $ 90,851,534
Adjustments to reconcile operating income to net cash provided by operations:
Depreciation and amortization 99,804,966 63,906,848
Bad debt expense(Net recoveries) 10,361 11,398
Feasibility studies - 6,058,284
(Increase)/decrease in operating assets:
Accounts receivable 1,917,156 (316,323)
Inventories (250,624) (30,340)
Prepaid and other assets (2,664,953) (2,359,320)
Increase/(decrease)in operating liabilities:
Accounts payable (2,068,622) (746,578)
Accrued expenses (816,828) 733,795
Due to other governmental agency (19,593,303) 1,041,192
Pension/OPEB/Catastrophe leave payable 257,493 347,732
Compensated absences (116,222) (136,296)
Other payable 79,774 (277,285)
Claims and judgments 318,116 131,095
Net cash provided by operations $ 132,094,580 $ 159,215,736
Noncash Activities:
Unrealized gain(loss)on the fair value of investments $ 9,004,762 $ (14,438,658)
Contributions from(to)other government 11,277,770 (24,536,380)
Capital assets acquired through accounts payable 2,494,717 7,450,400
Feasibility studies with no cash effect - 6,032,722
See Accompanying Notes to Basic Financial Statements.
12
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
(11 Summary of Siqnificant Accountina Policies
Reporting Entity
The Orange County Sanitation District(OCSD) is a public agency which owns and operates certain
wastewater facilities in order to provide regional wastewater collection, treatment, and disposal
services to approximately 2.5 million people in the northern and central portion of the County of
Orange, California. OCSD is managed by an administrative organization comprised of directors
appointed by the agencies and cities which are serviced by OCSD.
OCSD's service area was originally formed in 1954 pursuant to the County Sanitation District Act
and consisted of seven independent special districts. Two additional districts were formed and
additional service areas were added in 1985 and 1986. These special districts were jointly
responsible for the treatment and disposal facilities which they each used. In April of 1998, the
Board of Supervisors of Orange County passed Resolution 98-140 approving the consolidation of
the existing nine special districts into a new, single sanitation district. This action was taken in
order to simplify the governance structures, reduce the size of OCSD's Board of Directors, ease
administrative processes, streamline decision-making and consolidate accounting and auditing
processes. Pursuant to the Resolution and Government Code Section 57500, the predecessor
special districts transferred and assigned all of their powers, rights, duties, obligations, functions
and properties to OCSD, including all assets, liabilities, and equity.
Effective July 1, 1998, the organization became known as the Orange County Sanitation District.
The boundaries of one of the previous districts, now known as Revenue Area No. 14, have been
maintained separately because their use of OCSD's collection, treatment, and disposal system is
funded by the Irvine Ranch Water District(IRWD). The boundaries of the other eight districts have
been consolidated and are collectively referred to as the Consolidated Revenue Area. OCSD
utilizes joint operating and capital outlay accounts to pay joint treatment, disposal, and construction
costs. These joint costs are allocated to each revenue area based on gallons of sewage Flow. The
supplemental schedules and statements show internal segregations and are not intended to
represent separate funds for presentation as major or non-major funds in the basic financial
statements.
The accompanying financial statements present OCSD and its blended component unit, the
Orange County Sanitation District Financing Corporation. The Corporation is a legally separate
entity although in substance it is considered to be part of OCSD's operations. OCSD is considered
to be financially accountable for the Corporation which is governed by a board comprised entirely
of OCSD's board members. There is no requirement for separate financial statements of the
Corporation; consequently, separate financial statements for the Corporation are not prepared.
The Corporation had no financial activity during the fiscal year ended June 30, 2014, other than
principal and interest payments on outstanding certificates of participation/revenue obligations and
notes(see Note 4).
OCSD is independent of and overlaps other formal political jurisdictions. There are many
governmental entities, including the County of Orange, that operate within OCSD's jurisdiction;
however, financial information for these entities is not included in the accompanying financial
statements in accordance with the Governmental Accounting Standards Board (GASS)
Codification of Governmental Accounting and Financial Reporting Standards.
Comparative Information
The financial statements include partial prior-year comparative information. Such information does
not include all of the information required for a presentation in conformity with accounting principles
13
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
generally accepted in the United States of America. Accordingly, such information should be read
in conjunction with the government's financial statements for the year ended June 30, 2013, from
which such partial information was derived.
Measurement Focus and Basis of Accounting
OCSD operates as an enterprise activity. Enterprise funds account for operations that are
financed and operated in a manner similar to private business enterprises, where the intent of the
Board of Directors is that the costs (expenses, including depreciation and amortization) of
providing services to the general public on a continuing basis be financed or recovered primarily
through user charges.
Basis of accounting refers to when revenues and expenses are recognized in the accounts and
reported in the financial statements. Enterprise funds are accounted for on the flow of economic
resources measurement focus and use the accrual basis of accounting, whereby revenues are
recognized when earned and expenses are recognized when incurred, regardless of the timing of
related cash flows.
The accounting policies of the District conform to accounting principles generally accepted in the
United States of America (GAAP) as applicable to governments. The Governmental Accounting
Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles in the United States.
Operating Plans
Each year, OCSD staff prepares an annual operating plan which is adopted by the Board of
Directors. The annual operating plan is used to serve as a basis for monitoring financial progress,
estimating the levy and collection of taxes, and determining future service charge rates. During
the year,these plans may be amended as circumstances or levels of operation dictate.
Cash and Cash Equivalents
Investments with original maturities of three months or less when purchased are considered to be
cash equivalents.
Investments
All investments are stated at fair value (the value at which a financial instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation
sale). Changes in fair value that occur during the fiscal year are reported as part of investment
and interest income. Investment and interest income includes interest earnings and realized and
unrealized gains or losses in fair value.
Accounts Receivable
Accounts receivable is shown net of the allowance for uncollectible receivables. Uncollectible
receivables were $29,452 at June 30, 2014. Unbilled sewer services through June 30, 2014 are
recorded as revenue and receivables. Management determines the allowance for uncollectible
receivables by evaluating individual accounts receivable at least one year past due and
considering a customer's financial condition, credit history and current economic conditions.
Accounts receivables are written off when deemed uncollectible. Recoveries of accounts
receivables previously written off are recorded when received.
14
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Inventories
Inventories, which is held for consumption and not resale, is stated at cost on a weighted-average
basis, and then is expensed when used.
Capital Assets
Outlays for property, plant, equipment, and construction in progress are recorded in the revenue
area which will use the asset. Such outlays may be for individual revenue area assets or for a
revenue area's share of joint assets.
Capital assets of property, plant, and equipment are defined as assets with an initial, individual
cost of more than $5,000 and an estimated useful life of at least three years. Such assets are
recorded at cost, except for assets acquired by contribution, which are recorded at fair market
value at the time received. Cost includes labor; materials; outside services;vehicle and equipment
usage; other ancillary costs consisting of direct charges such as engineering, purchasing,
supervision, or fringe benefits. Interest costs, net of interest earnings, are capitalized on projects.
During the fiscal year ended June 30,2014, net interest costs of$7,598,770 were capitalized.
Depreciation of plant and equipment is provided for over the estimated useful lives of the assets
using the straight-line method in accordance with generally accepted accounting principles.
OCSD also considers the guidelines of estimated useful lives as recommended in the State of
California Controller's Uniform System of Accounts for Waste Disposal Districts, which range from
3 to 75 years. The following are estimated useful lives for major classes of depreciable assets:
Sewage collection facilities — 50 years, Sewage treatment facilities — 40 years, Sewage disposal
facilities—40 years, and General plant and administrative facilities—11.5 years.
Amortization
Amortization of the excess purchase price over the book value of assets acquired is provided
using the straight-line method over an estimated useful life of 30 years.
Premiums and discounts on certificate anticipation notes and wastewater refunding revenue
obligations are amortized to interest expense over the respective terms of the installment
obligations based on the effective interest method (Note 4).
Restricted Assets
Certain assets are classified as restricted because their use is limited by applicable debt
covenants. Specifically, the assets are restricted for installment payments due on certificates of
participation and revenue obligations or are maintained by a trustee as a reserve requirement for
the certificates of participation and revenue obligations. When both restricted and unrestricted
resources are available for use, it is OCSD's policy to use restricted resources first, then
unrestricted resources as they are needed.
Deferred Outflows of Resources
For advance refundings resulting in defeasance of debt, the difference between the reacquisitions
price and the net carrying amount of the old debts (i.e. defamed charges)is reported as a deferred
outflow of resources and amortized to interest expense based on the effective interest method over
the remaining life of the old debt or the life of the new debt, whichever is shorter. OCSD's defamed
charges on the refunding debts at June 30, 2014 are$18,172,646.
15
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Net Position
Net position represents the total of assets and deferred outflows of resources less liabilities,and
is classified into two categories:
Net Investment in Capital Assets—This amount consists of capital assets, net of accumulated
depreciation, reduced by the outstanding balances of any borrowings used for the acquisition,
construction or improvement of those assets and excludes unspent debt proceeds. Deferred
outflows of resources that are attributable to the acquisition, construction or improvement of those
assets or related debt also should be included in this component of net position.
Unrestricted—This amount represents the residual of amounts not classified in the other category
and represents the net equity available for the District.
Compensated Absences
OCSD's employees, other than operations and maintenance personnel, are granted vacation and
sick leave in varying amounts with maximum accumulations of 200 hours and 560 hours for
vacation and sick days earned but unused, respectively. Operations and maintenance personnel
accrue between 80 and 250 personal leave hours per year depending on years of service.
Personal leave can be accumulated up to a maximum of 440 hours.
Vacation and sick leave benefits and personal days are recorded as an expense and liability when
earned by eligible employees. The distribution between current and long-term portions of the
liability is based on historical trends.
Claims and Judgments
OCSD records estimated losses when it is probable that a claim liability has been incurred and
when the amount of the loss can be reasonably estimated. Claims payable includes an estimate
for incurred but unreported claims. The distribution between current and long-term portions of the
liability is based on historical trends.
Property Taxes
The County is permitted by State law (Proposition 13) to levy taxes at one percent of full market
value (at time of purchase) and can increase the assessed value no more than two percent per
year. OCSD receives a share of this basic levy, proportionate to what was received in the 1976 to
1978 period.
Property taxes are determined annually as of January 1 and attached as enforceable liens on real
property as of July 1 and are payable in two installments which become delinquent after December
10 and April 10. The County bills and collects the property taxes and remits them to OCSD in
installments during the year. Property tax revenues are recognized when levied for. The Board of
Directors has designated property tax revenue to be used for the annual debt service requirements
prior to being used as funding for current operations.
Capital Facilities Capacity Charges
Capital facilities capacity charges represent fees imposed at the time a structure is newly
connected to the District's system, directly or indirectly, or an existing structure or category of use
is increased. This charge is to pay for District facilities in existence at the time the charge is
imposed or to pay for new facilities to be constructed that are of benefit to the property being
charged.
16
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Operatino and Non-operating Revenues and Expenses
Operating revenues and expenses result from collecting,treating, and disposing of wastewater and
inspection and permitting services. OCSD's operating revenues consist of charges to customers
for the services provided. Operating expenses include the cost of providing these services,
administrative expenses,and depreciation and amortization expenses. All revenues and expenses
not meeting these definitions and which are not capital in nature are reported as non-operating
revenues and expenses.
Construction Commitments
OCSD has active construction projects to add additional capacity, improve treatment, or
replace/rehabilitate existing assets. At June 30, 2014, the outstanding commitments with
contractors totaled $177,291,471.
Self-Insurance Plans
For the year ended June 30, 2014, OCSD was self-insured for portions of workers' compensation,
property damage, and general liability. The self-insurance portion of the workers' compensation
exposure is the$750,000 deductible per occurrence under the outside excess insurance coverage
to statutory levels. The self-insurance portion of the property damage exposure covering fire and
other perils is the $250,000 per occurrence deductible (for most perils) under the outside excess
property insurance coverage to $1 billion. The self-insurance portion of the property damage
exposure covering flood is the $100,000 per occurrence deductible with outside excess property
insurance coverage to $300 million. OCSD is self-insured for virtually all property damage from
the peril of earthquake. The self-insurance portion of the boiler & machinery exposure is the
deductible ranging from $25,000 to $350,000 under the outside excess boiler & machinery
insurance coverage to $100 million per occurrence combined limit. The self-insurance portion of
the general liability exposure is the$250,000 per occurrence deductible ($500,000 for employment
practices liability) under the outside excess liability coverage to $30 million per occurrence and
aggregate. The self-insurance portion of the pollution liability exposure is the $100,000 per loss
deductible under the outside pollution liability insurance coverage to $10 million. There were no
significant changes in insurance coverage during the fiscal year ended June 30, 2014.
During the past three fiscal years there have been no settlements in excess of covered amounts.
Claims against OCSD are processed by outside insurance administrators. These claims are
charged to claims expense based on amounts which will ultimately be paid. Claims incurred but
not yet reported have been considered in determining the accrual for loss contingencies. OCSD
management believes that there are no unrecorded claims as of June 30, 2014 that would
materially affect the financial position of OCSD.
Deferred Compensation Plan
OCSD offers its employees a deferred compensation plan established in accordance with Internal
Revenue Code Section 457. The plan permits all employees of OCSD to defer a portion of their
salary until future years. The amount deferred is not available to employees until termination,
retirement, death or for unforeseeable emergency. The assets of the plan are held in trust for the
exclusive benefit of the participants and their beneficiaries. Since the plan assets are administered
by an outside party and are not subject to the claims of OCSD's general creditors, in accordance
with GASS Statement 32, the plan's assets and liabilities are not included within OCSD's financial
statements.
17
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
(2) Cash and Investments
Cash and investments as of June 30, 2014 are classified within the accompanying Statement of
Net Position as follows:
Statement of Net Position:
Current, Unrestricted:
Cash and cash equivalents $215,296,895
Investments 412,473,309
Subtotal -current, unrestricted 627,770,204
Restricted:
Cash and cash equivalents 28,360,917
Investments 16,940,965
Subtotal -restricted 45,301,882
Total cash and cash equivalents and investments $673,072,086
Cash and investments consist of the following as of June 30, 2014:
Cash on hand $ 3,000
Deposits with financial institutions 2,436,803
Managed portfolio-cash and investments 625,330,401
Subtotal -unrestricted cash and investments 627,770,204
Monies held by trustees:
Cash and cash equivalents $ 28,360,917
Investment contracts 16,940,965
Subtotal -monies held by trustees 45,301,882
Grand total cash and investments $673,072,086
Investments Authorized by the California Government Code and OCSD's Investment Policv
The following table identifies the investment types that are authorized by the California
Government Code and OCSD's investment policy. This table, and the subsequent tables on
pages 19-23 also identifies certain provisions of either the California Government Code or OCSD's
investment policy (whichever is more restrictive) that address interest rate risk, credit risk, and
concentration of credit risk.
18
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Authorized Maximum
by OCSD's Maximum Investment
Investment Type-Authorzed by the Investment Maximum Percentage in a Single
California Government Code Policy? Maturity(g(3) of Portfolio to Issuer(„
Local Agency Bonds Yes 5 years 10% (2) 10% (2)
U.S. Treasury Obligations Yes 5 years No limit No limit
California State Treasury Obligations Yes 5 years No limit No limit
U.S. Agency Securities Yes 5 years No limit No limit
Bankers Acceptances Yes 180 days 40% 30%
Commercial Paper Yes 270 days/31 days 15%/25% (2) 10%
Negotiable Certificates of Deposit Yes 5 years 30% 30%
Repurchase Agreements Yes 1 year 20% (2) 20% (2)
Reverse Repurchase Agreements Yes 90 days (2) 5% (2) 5% (2)
Corporate Medium-Term Notes Yes 5 years 30% 30%
Mutual Funds Yes N/A 15% (2) 10%
Money Market Mutual Funds Yes N/A 15% (2) 15% (2)
Mortgage Pass-Through Securities/CMO Yes 5 years 20% 20%
County Investment Pools Yes N/A 15% (2) 15% (2)
Local Agency Investment Fund (LAIF) Yes N/A 15% (2) 15% (2)
Nolen
(1)ResNctions are in accomance with the CMifomia Govemment Code unless indicated otherwise.
(2)The restriction is in accomance with OCSD's investment Policy which is more restrictive then the CelRomia Govemment Code.
(3)As allowed by California Govemment Code Section 53501,the Boa d of Directors has adopted a policy of no maximum maturty
for investments purchased by OCSD's external money managerforthe long-term investment portfolio. However the duration
of the long-term invastmanl pomolio can newmexceed 60 months. investments purchased forth.short-Wornportfolio are
subjectlo the maturity restrictions noted in thistable.
Investments Authorized by Debt Agreements
The investment of debt proceeds held by trustees is governed by provisions of the debt covenant
agreements, rather than the general provisions of the California Government Code or OCSD's
investment policy. The following table identifies the investment types that are authorized for
investments held by OCSD's debt trustees. This table, and the subsequent tables on pages 20-23
also identifies certain provisions of the debt covenant agreements that address interest rate risk,
credit risk, and concentration of credit risk.
Maximum Maximum
Investment Type-Authorized by the Maximum Percentage Investment in a
Debt Covenant Agreement Maturity of Portfolio Single Issuer
State and Local Agency Bonds 5 years No limit No limit
U.S. Treasury Obligations 5 years No limit No limit
U.S. Agency Securities 5 years No limit No limit
Bankers Acceptances 180 days 40% 30%
Commercial Paper 270 days 40% 10%
Negotiable Certificates of Deposit 5 years 30% 10%
Repurchase Agreements 1 year No limit No limit
Corporate Medium-Term Notes 5 years 30% 30%
Mutual Funds N/A 20% 10%
Money Market Mutual Funds N/A 20% 20%
Local Agency Investment Fund (LAIF) N/A No limit No limit
Guaranteed Investment Contracts N/A No limit No limit
19
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Disclosures Relatina to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Generally, the longer an investment has before maturity, the greater the
sensitivity of its fair value to changes in market interest rates. One of the ways that OCSD
manages its exposure to interest rate risk is by purchasing a combination of shorter term and
longer term investments and by timing cash flows from maturities so that a portion of the portfolio
is maturing or coming close to maturity evenly over time, as necessary to provide the cash flow
and liquidity needed for operations.
OCSD monitors the interest rate risk inherent in its managed portfolio by measuring the modified
duration of its portfolio. The duration of monies held for shorter term purposes is recommended by
OCSD's Treasurer and is based on OCSD's cash flow requirements in meeting current operating
and capital needs. The average duration of monies invested for shorter term purposes may never
exceed 180 days. The duration of monies held for longer term purposes is recommended annually
by OCSD's Treasurer and is based on OCSD's five-year cash flow forecast. The average duration
may not exceed 120 percent nor be less than 80 percent of the recommended duration. The
average duration of monies invested for longer term purposes may never exceed 60 months.
There is no stated maximum maturity for the Money Market Mutual Funds. The money market
mutual funds for Blackrock Institutional Fund and the US Bank Money Market Fund are daily liquid
funds available on demand.
Following is a table which summarizes OCSD's managed portfolio investments by purpose with the
modified duration as of June 30, 2014.
20
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Modified Modified
Duration Duration
Investment Type Fair Value (in years) (in months)
Short-Term Portfolio:
U.S. Treasury Bills $ 32,498,971 0.085 1.02
U.S. Agency Securities 30,594,140 0.158 1.90
U.S. Treasury Notes 2,000,540 0.168 2.02
Corporate Medium-Tenn Notes 18,235,027 0.602 7.22
Repurchase Agreements 1,800,000 0.002 0.02
Local Agency Investment Fund (LAIF) 31,231,595 0.636 7.63
Money Market Mutual Funds 558,613 0.083 1.00
Short-term portfolio subtotal $ 116,918,886 0.332 3.98
Long-Term Portfolio:
U.S. Treasury Bills $ 99,969 0.468 5.62
U.S. Treasury Notes 125,988,566 5.680 68.16
U.S. Treasury Inflation-Protected Securities (TIPS) 18,212,525 9.141 109.69
U.S. Agency Securities 179,139,271 0.273 3.27
U.S. Govt. Backed Mortgage Pools (GNMA)* 355,315 3.464 41.57
Taxable Municipal Bonds 19,933,910 8.572 102.87
Corporate Medium-Tenn Notes 57,056,092 3.458 41.49
Repurchase Agreements 101,000,000 0.002 0.02
Money Market Mutual Funds 618,354 0.077 0.92
Mortgage Pass-Through Securities/CMO ' 6,007,513 2.922 35.07
Long-tens portfolio subtotal $ 508,411,515 2.593 31A2
Total Portfolio $ 625,330,401
'Includes highly sensitive securities.
OCSD monitors the interest rate risk inherent in its other investments using specific identification
of the investments. Following is a table of these investments all held by trustees, as of June 30,
2014.
Fair Value Maturities
Cash equivalents held by fiscal agents:
US Bank Cash $ 25 N/A
Money Market Mutual Funds:
Blackrock Institutional Funds 42,286 45 days
US Bank Money Market Fund 64,548 N/A
Local Agency Investment Fund (LAIF) 28,254,058 232 day average
Investments held by fiscal agents:
Guaranteed Investment Agreements:
FSA Capital Management Services LLC-2007A COP 9,518,000 January 29, 2030
Bayerische Landesbank Girozentrale-2009A COP 7,422,965 August 1, 2016
Total Fair Value of Investments Held by Fiscal Agents $ 45,301,857
21
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Investments with Fair Values Hiahly Sensitive to Interest Rate Fluctuations
OCSD's investments (including investments held by trustees) include the following investments
that are highly sensitive to interest rate Fluctuations (to a greater degree than already indicated in
the information provided above):
Mortgage-backed securities: These securities are subject to early payment in a period of
declining interest rates. The resulting reduction in expected total cash Flows affects the fair
value of these securities, making them highly sensitive to change in interest rates. At fiscal
year end, the fair value of investments in mortgage-backed securities totaled $9,635,002
including $6,007,513 of mortgage pass-through securities, $3,272,174 of U.S. agency
securities, and $355,315 of U.S. government backed mortgage pools.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. The following table presents the minimum rating as
required by the California Government Code, OCSD's investment policy, or debt agreements, and
the actual rating as of year-end for each investment type:
22
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Investment Type and the Low est Rating Reported at Year End Fair Value
Investments w th no legal ninimum rating&no required disclosure:
U.S.Treasury Obligations $ 178,800,571
U.S.Govt.Backed Mbngage Pools(GNMW) 355,315
Subtotal $ 179,155,886
Investments w ilh no legal mninum rating:
U.S.Agency Securities(other than GNM):
Rating of AA+(Standard&Poor's) 209,733,411
Municipal Bonds:
Rating of Aaa(Mbody's) 1,397,748
Rating of Aal (Mbody's) 1,506,148
Rating of Aa2(Mbody's) 1,539,473
Rating of Aa3(Mbody's) 5,964,179
Rating of Al (Wwdy's) 1,611,779
Rating of A(Fitch) 2,145,960
Rating of A2(Mbody's) 404,754
Rating of A3(Mbody's) 5,363,869
Repurchase Agreements:
Not rated 102,800,000
Local Agency hvestnent Fund(LAF):
Not rated 59,485,653
Investments w fth fiscal agents-Guaranteed Investment Contracts:
Rating of A3(Mbody's) 7,422,965
Rating of A2(Mbody's) 9,518,000
Subtotal 408,893,939
Investments w 8h a legal mininum rating(or its equivalent)of A:
Corporate MlediumTerm Notes:
Rating of Aa3(Mbody's) 6,326,145
Rating of Al (Wwdy's) 3,655,306
Rating of A(Fitch) 8,842,775
Rating of A2(Mbody's) 9,227,026
Rating of A31Mbody's)" 10,049,406
Rating of R2(Mbody's)' 1,300,563
Rating of Baal (Mbody's)' 9,097,983
Rating of BBB+(Standard&Poor's)' 3,448,535
Rating of Baal(MbodY's)' 19,613,477
Rating of BBB(Rich)' 1,359,501
Rating of Saa3(MbadY's)' 1,361,947
Not rated 1,008,455
Money Mlarket Mutual Funds:
Rating of Aaa(Mbody's) 1,129,801
Not rated 47,166
invested w ith fiscal agents:
Rating of Aaa-rrt(Mbody's) 42,286
Rating of P-1 (Mbody's) 64,548
Subtotal 75,574,920
Investments w ilh a legal Minimum rating(or its equivalent)of AA:
Mbrtgage Pass-Through Securities/C100:
Rating of Aaa(Mbody's) 126,035
Rating of AA-(Standard&Poor's) 5,482,155
Rating of BBB(Mtch)' 399,323
Subtotal 6,007,513
Total $ 670,632,258
Investment w as in compliance w ith legal requirements at the time it w as purchased.
23
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Concentration of Credit Risk
Limitations on the amount that OCSD is allowed to invest in any one issuer have been identified
previously in the section "Investments Authorized by the California Government Code and OCSD's
Investment Policy" and in the section "Investments Authorized by Debt Covenant Agreements."
OCSD follows whichever guideline is the most restrictive.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that in the event of the failure of a depository financial
institution, a government will not be able to recover its deposits or will not be able to recover
collateral securities that are in the possession of an outside party. The California Government
Code and OCSD's investment policy contain legal requirements that limit the exposure to custodial
credit risk for deposits as follows: a financial institution must secure deposits made by state or
local governmental units by pledging securities in an undivided collateral pool held by a depository
regulated under state law (unless so waived by the governmental unit). The market value of the
pledged securities in the collateral pool must equal at least 110% of the total amount deposited by
the public agencies. California law also allows financial institutions to secure deposits by pledging
first trust deed mortgage notes having a value of 150% of the secured public deposits.
Custodial credit risk for investments is the risk that in the event of the failure of the counlerparty
(e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its
investment or collateral securities that are in the possession of another party. The California
Government Code and OCSD's investment policy do not contain legal or policy requirements that
would limit the exposure to custodial credit risk for investments. As of June 30, 2014, in
accordance with OCSD's investment policy, none of OCSD's investments were held with a
counterparty. All of OCSD's investments were held with an independent third party custodian bank
registered in the name of the District. OCSD uses Bank of New York(BNY) Mellon as a third party
custody and safekeeping service for its investment securities.
Investment in State Investment Pool
OCSD is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by
California Government Code Section 16429 under the oversight of the Treasurer of the State of
California. The fair value of OCSD's investment in this pool is reported in the accompanying
financial statements at amounts based upon OCSD's pro-rata share of the fair value provided by
LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance
available for withdrawal is based on the accounting records maintained by LAIF, which are
recorded on an amortized cost basis. Included in LAIF's investment portfolio are mortgage-backed
securities, other asset-backed securities, loans to certain state funds, securities with interest rates
that vary according to changes in rates greater than a one-for-one basis, and structured notes.
The amounts invested in LAIF are recorded as cash and cash equivalents at June 30, 2014.
24
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
(3) Capital Assets
Capital asset activity for the year ended June 30, 2014 is as follows:
Balance at Additions/ Deletions/ Balance at
June 30,2013 Transfers Transfers June 30,2014
Capital assets not depreciated:
Cost:
Land $ 15,959,559 $ - $ - $ 15,959,559
Construction in progress 1,197,777,323 87,504,402 (1,027,262,786) 258,018,939
Total nondepreciable assets 1,213,736,882 87,504,402 (1,027,262,786) 273,978,498
Depreciable capital assets:
Cost:
Sewage collection facilities 634,548,135 118,953,611 (365,212) 753,136,534
Sewage treatment facilities 1,315,220,114 905,616,584 (22,519) 2,220,814,179
Effluent disposal facilities 97,014,820 - - 97,014,820
Solids disposal facilities 3,463,236 - - 3,463,236
General and administrative facilities 219,801,240 5,107,864 (192,012) 224,717,092
Excess purchase price over book
value on acquired assets 19,979,000 19,979,000
Subtotal 2,290,026,545 1,029,678,059 (579,743) 3,319,124,861
Accumulated depreciation:
Sewage collection facilities (282,817,318) (16,860,467) 365,212 (299,312,573)
Sewage treatment facilities (576,326,904) (76,169,503) 22,519 (652,473,888)
Effluent disposal facilities (56,112,931) (1,588,008) - (57,700,939)
Solids disposal facilities (3,127,097) (9,719) - (3,136,816)
General and administrative facilities (135,407,083) (6,843,398) 192,012 (142,058,469)
Excess purchase price over book
value on acquired assets (17,758,143) (657,709) (18,415,852)
Subtotal (1,071,549,476) (102,128,804) 579,743 (1,173,09 S 7)
Netdepreciable assets 1,218,477,069 927,549,255 2,146,026,324
Netcapital assets $2,432,213,951 $1,015,053,657 $(1,027,262,786) $2,420,004,822
25
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
(4) Long-Term Liabilities
The following is a summary of the changes in long-term liabilities for the year ended June 30,2014:
Due within Long-term
Balance,Jury 1 Additions Deletions Balance,June 30 one year amount
Arbitrage Payable $ V9,987 $ 79,775 $ - $ 209,762 $ - $ 209,762
Compensated Absences 7.465,066 6,422,467 (6,535,758) 7,351,775 (6,787,498) 564,277
Claims and Judgments 1,578,036 989,463 (671,347) 1,896,152 (423,590) 1,472,562
Certificates of
Participation/Revenue
Obligations and Notes 1,274,990,000 129,625,000 (171,290,000) 1,233,325,000 (27,875,000) 1,205,450,000
Unanorlized
(Discount)/Premium 50,938,512 2,366,953 (7,632,341) 45,673,124 (5.135,M) 40,538.021
Net Pension Obligation 8,629,918 1,087,975 (454,120) 9.263,773 - 9,263,773
Net Old Obligation 583,908 744,667 (1,123,961) 204,614 204,614
Totals $1,344,315,427 $M1,3'16,300 $(187,707,527) $ 1,297,924,200 $ (40,221,191) $1,25],]03,009
Arbitrage Payable
The Tax Reform Act of 1986 (the Act) requires OCSD to calculate and remit rebatable arbitrage
earnings to the Internal Revenue Service. Certain of OCSD's debt and interest earnings on the
proceeds thereof are subject to the requirements of the Act. OCSD's liability at June 30, 2014 is
$209,762.
Compensated Absences
OCSD's policies related to compensated absences are described in Note 1. OCSD's liability at
June 30, 2014 is$7,351,775 with an estimated $6,787,498 to be paid or used within the next fiscal
year.
Claims and Judgments Payable
OCSD is self-insured in a number of areas as described in Note 1. The following is a summary of
the change in claims and judgments payable for the years ended June 30, 2014 and 2013:
2013-14 2012-13
Claims and judgments payable at July 1 $1,578,036 $1,446,941
Claims incurred during the fiscal year 989,463 298,026
Payments on claims during the fiscal year (671,347) (166,931)
Claims and judgments payable at June 30 1,896,152 1,578,036
Less: current portion (423,590) (416,720)
Total long-ton claims and judgments payable $1,472,562 $1,161,316
Certificates of Participation/Revenue Obligations and Notes
OCSD issues certificates of participation, revenue obligations and notes in order to finance
construction of the treatment facilities. Each issuance represents a direct and proportionate
interest in the semi-annual interest payments. Installment payments for the issues are payable
26
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
from any source of lawfully available funds of OCSD. Certificates of participation, revenue
obligations,and notes at June 30,2014 are summarized as follows:
Amount
2007A refunding certificates of participation $ 92,385,000
2007B certificates of participation 267,255,000
2008B refunding certificates of participation 25,585,000
2009A certificates of participation 184,090,DDD
2010A wastewater revenue obligations 80,000,000
2010C wastewater revenue obligations 157,000,000
2011A wastewater refunding revenue obligations 130,345,000
2012A wastewater refunding revenue obligations iD0,645,000
2012B wastewater refunding revenue obligations 66,395,000
2013A revenue refunding certificate anticipation notes 129,625,000
Total certificates of participation, revenue obligations, and notes $1,233,325,000
Outstanding Certificates of Participation/Revenue Obligations and Notes
All of the outstanding debt of OCSD is senior lien debt with rate covenants that require a minimum
coverage ratio of 1.25. The minimum coverage ratio is the ratio of net annual revenues available
for debt service requirements to total annual debt service requirements. As of June 30, 2014, the
coverage ratio for senior lien debt was 2.68.
May 2007 Refunding Certificates of Participation. Series 2007A
On May 22, 2007, OCSD completed the sale of $95,180,000 of refunding certificates of
participation. The certificates were issued to refund $88,500,000 of the outstanding principal
balance of the 2003 Series certificates of participation. The interest rate on the refunding
certificates is fixed and will range from 4.00 percent to 4.5 percent. Annual principal payments
are due on February 1, beginning February 1, 2008 through February 1, 2030.
The trust agreement for the certificates requires the establishment of a reserve which was
funded from certificate proceeds. The June 30, 2014 reserve of$9,518,000 is held by Union
Bank, the trustee,and meets the reserve requirement.
December 2007 Certificates of Participation. Series 2007E
On December 20, 2007, OCSD completed the sale of $300,000,000 of certificates of
participation. The certificates were issued to finance and to reimburse OCSD for the
acquisition, construction, and installation of additional improvements made to the wastewater
system. The interest rate on the refunding certificates is fixed and will range from 4.00 percent
to 5.25 percent. Annual principal payments are due on February 1, beginning February 1,
2008 through February 1, 2037.
The trust agreement for the certificates requires the establishment of a reserve which was
funded from certificate proceeds. The June 30, 2014 reserve of$19,840,045 is held by Union
Bank, the trustee,and meets the reserve requirement.
27
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
September 2008 Refundina Certificates of Participation. Series 2008B
On September 11, 2008, OCSD completed the sale of$27,800,000 of refunding certificates of
participation. The certificates were issued to refund the $26,900,000 outstanding principal
balance of the 1993 Series certificates of participation. The interest rate on the refunding
certificates is fixed and will range from 2.80 percent to 3.0 percent. Annual principal payments
are due on August 1, beginning August 1, 2009 through August 1,2016.
The trust agreement for the certificates requires the establishment of a reserve which was
funded from certificate proceeds. The June 30, 2014 reserve of $2,781,581 is held by US
Bank, the trustee,and meets the reserve requirement.
May 2009 Certificates of Participation. Series 2009A
On May 7, 2009, OCSD completed the sale of $200,000,000 of certificates of participation.
The certificates were issued to finance and to reimburse OCSD for the acquisition,
construction, and installation of additional improvements made to the wastewater system. The
interest rate on the certificates is fixed and will range from 3.00 percent to 5.00 percent.
Annual principal payments are due on February 1, beginning February 1, 2010 through
February 1, 2039.
The trust agreement for the certificates requires the establishment of a reserve which was
funded from certificate proceeds. The June 30, 2014 reserve of $13,118,005 is held by US
Bank,the trustee, and meets the reserve requirement.
May 2010 Wastewater Revenue Obligations, Series 2010A
On May 18, 2010, OCSD completed the sale of $80,000,000 of wastewater revenue
obligations under the federally taxable Build America Bonds program. The obligations were
issued to finance and to reimburse OCSD for the acquisition, construction, and installation of
additional improvements made to the wastewater system. The stated interest rate on the
obligations is fixed and will range from 5.56 percent to 5.58 percent, however, in accordance
with their designation as Build America Bonds, OCSD expects to receive a cash subsidy from
the United States Treasury equal to 35 percent of the interest payable with respect to these
revenue obligations. The expected net interest rate on the obligations is fixed and will range
from 3.614 percent to 3.627 percent. Annual principal payments are due on February 1,
beginning February 1, 2034 through February 1,2040.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
December 2010 Wastewater Revenue Obligations, Series 2010C
On December 8, 2010, OCSD completed the sale of $157,000,000 of wastewater revenue
obligations under the federally taxable Build America Bonds program. The obligations were
issued to finance and to reimburse OCSD for the acquisition, construction, and installation of
additional improvements made to the wastewater system. The stated interest rate on the
obligations is fixed and will range from 6.35 percent to 6.40 percent, however, in accordance
with their designation as Build America Bonds, OCSD expects to receive a cash subsidy from
the United States Treasury equal to 35 percent of the interest payable with respect to these
revenue obligations. The expected net interest rate on the obligations is fixed and will range
from 4.1275 percent to 4.16 percent. Annual principal payments are due on February 1,
beginning February 1, 2031 through February 1,2044.
28
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
October 2011 Wastewater Refunding Revenue Obligations, Series 2011A
On October 3, 2011, OCSD completed the sale of $147,595,000 of wastewater refunding
revenue obligations. The obligations were issued to refund $89,800,000 of the outstanding
principal balance of 2000 Series A and B refunding certificates of participation, and
$83,320,000 of the outstanding principal balance of 2003 certificates of participation. The
stated interest rate on the obligations is fixed and will range from 3 percent to 5 percent.
Annual principal payments are due on August 1 and February 1, beginning August 1, 2012
through February 1, 2026.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
March 2012 Wastewater Refunding Revenue Obligations, Series 2012A
On March 22, 2012, OCSD completed the sale of $100,645,000 of wastewater refunding
revenue obligations. The obligations were issued to refund the $108,180,000 outstanding
principal balance of the 2003 certificates of participation. The stated interest rate on the
obligations is fixed and will range from 3 percent to 4 percent. Annual principal payments are
due on February 1, beginning February 1,2031 through February 1, 2033.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
August 2012 Wastewater Refunding Revenue Obligations, Series 2012B
On August 16, 2012, OCSD completed the sale of $66,395,000 of wastewater refunding
revenue obligations. The obligations were issued to refund the remaining $91,900,000
outstanding principal balance of the Series 2000A and 2000B refunding certificates of
participation. The stated interest rate on the obligations is fixed and will range from 3 to 5
percent. Annual principal payments are due on February 1, beginning February 1, 2019
through February 1, 2026.
The trust agreement for the revenue obligations does not require the establishment of a
reserve.
October 2013 Revenue Refunding Certificate Anticipation Notes, Series 2013A
On October 16, 2013, OCSD completed the sale of $129,625,000 of revenue refunding
certificate anticipation notes. The notes were issued to refund the $131,700,000 outstanding
principal balance of the 2012 Series C revenue refunding certificate anticipation notes. The
interest rate on the notes is fixed at 2.0 percent. The notes will mature on October 16, 2014.
OCSD expects the principal and interest on the notes to be paid from proceeds of the sale,
prior to the maturity date, of a future series of certificates of participation, notes or other
obligations.
The aggregate difference in debt service between the refunding debt and the refunded debt is
a negative amount of approximately $20,000. The total future payments for the new debt
provide a net present value loss of approximately$298,000 to refund the old debt.
The trust agreement for the certificates does not require the establishment of a reserve.
29
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Annual Amortization Requirements
The annual requirements to amortize all debt related to certificates of participation, revenue
obligations, and anticipation notes as of June 30, 2014, including the Revenue Refunding
Certificate Anticipation Notes, Series 2013A that currently matures in October 2014,are as follows:
Year Ending June 30, Principal Estimated Interest Total
2015 $ 157,500,000 $ 51,679,980 $ 209,179,580
2016 29,405,000 47,899,830 77,304,830
2017 35,575,000 46,530,755 82,105,755
2018 33,170,000 44,994,888 78,164,888
2019 32,735,000 43,855,263 76,590,263
2020-2024 164,955,000 194,736,813 359,691,813
2025-2029 190,270,000 153,582,322 343,852,322
2030-2034 301,655,000 101,292,106 402,947,106
2035-2039 217,975,000 40,204,384 258,179,384
2040-2044 70,085,000 6,378,600 76,463,600
Total $1,233,325,000 $ 731,154,940 $ 1,964,479,940
(5) Pension Benefits
OCSD has two pension plans for retirees: a defined benefit pension plan maintained through and
by the Orange County Employees' Retirement System (OCERS)and the Additional Retiree Benefit
Account(ARBA)administered directly by OCSD.
Pension Plan
OCSD participates in the Orange County Employee's Retirement System (OCERS), a cost-sharing
multiple-employer, defined benefit pension plan which is governed and administered by a nine
member Board of Retirement. OCERS was established in 1945 under the provisions of the County
Employees Retirement Law of 1937, and provides members with retirement, death, disability, and
cost-of-living benefits. OCERS issues a stand-alone comprehensive annual financial report which
can be obtained from OCERS at 2223 Wellington Avenue, Santa Ana, California 92701.
Benefits: All OCSD employees except for interns and the Board of Directors participate in
OCERS. Employees who retire at or after age 50 with five or more years of service are entitled to
an annual retirement allowance. The amount of the retirement allowance is based upon the
member's age at retirement, the member's"final compensation"as defined in Section 31462 of the
Retirement Law of 1937, the total years of service under OCERS, and the Plan under which the
employee is covered. OCERS also provides death and disability benefits.
Eligible employees are covered under one of four plans, depending on their entry date into the
plan. Plans G and H provide 2.5% of final average compensation per year of service at age 55;
Plan B provides 1.667% per year of service at age 57.5; Plan U provides 2.5% per year of service
at age 67. Plan G members' retirement benefit are calculated using the highest single year of
compensation, while Plans B and H are based on the average of the highest three consecutive
years of compensation. Plan U retirement benefits are based on the highest three consecutive
years of compensation, with a cap for each year equal to 120% of the maximum wages subject to
Social Security Tax for that calendar year.
30
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Contributions: As a condition of participation under the provisions of the County Employees
Retirement Law of 1937, members are required to contribute a percentage of their annual
compensation to OCERS. Employees covered by Plans B, G, H, and U are required to contribute
6.11% - 12.04%, 8.72% - 15.05%, 8.33% - 15.05%, and 6.25% - 12.25%, respectively, of their
annual compensation to OCERS. OCSD is required to make periodic contributions to OCERS in
amounts that are estimated to remain a constant percentage of covered employees'compensation
such that, when combined with covered employees' contributions, will fully provide for all covered
employees' benefits by the time they retire. For the fiscal years ended June 30, 2014, 2013, and
2012, the "Annual Required Contribution' equaled the contributions actually made. Required
contributions,which are actuarially determined, are set by OCERS.
The following table provides salary and contributions requirements for the two previous fiscal years
and the current year:
Forthe Fiscal Year Ending
June 30,2012 June 30,2013 June 30,2014
Total payroll costs $62,603,878 $61,878,748 $61,245,924
Payroll costs of employees covered by OCERS 60,419,910 59,832,408 59,360,635
Contribution requirements:
Contributed byemployees 4,566,386 4,462,869 4,822,540
Contributed bythe Disincton behalf of employees 2,089,868 1,923,875 1,841,851
Total employee required contribution 6,656,254 6,386,744 6,664,391
District required contribution 15,767,050 16,363,917 18,920,212
Total contribution $22,423,304 $22,750 661 $25,584,602
Total actual contribution as a percent of the
"Annual Required Contribution(ARC)" 100.00% 100.00% 100.00%
Employee required contribution as a percent of
covered payroll 11.02% 10.67% 11.23%
District required contribution as a percentof
covered payroll 26,10% 27.35% 31.87%
Total contribution as a percent of all participating
entities'contributions 3.60% 3.90% 3.80%
Additional Retiree Benefit Account(ARBA)
The OCSD ARBA plan is a single-employer defined benefit plan which was administered by
OCERS until February 29, 2008, when OCSD began direct administration. This benefit was
established by the OCSD Board of Directors on October 25, 1992. It provides a monthly payment
to retirees towards the premium costs of health insurance for the retiree and eligible dependents.
The retiree is not required to use this amount for health insurance premium or to remain on the
OCSD medical plan. The plan is currently paying benefits to 222 retirees. The plan is included in
OCSD's financial statements; stand-alone financial statements are not issued for the plan.
Benefits: Employees who retire receive $10 per month for every year of service up to a maximum
of 25 years, or $250 per month. This amount is independent of salary and is fixed at retirement.
Because the District cannot ensure the use of the benefit for payment of eligible health insurance
expenses, the benefit is taxable to the retiree. Survivor benefits are provided in the event that a
retiree pre-deceases his/her spouse. For retirees hired prior to July 1, 1988, OCSD provides
health insurance coverage for 2%months per year of service (see Note 7—Other Postemployment
31
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Benefits). ARBA benefits begin immediately after this benefit ends. For those hired on or after
July 1, 1988, ARBA benefits begin immediately upon retirement and continue for life. Employees
hired into the OCEA bargaining group after August 1, 2011 are ineligible for this benefit.
Funding: There are no employee contributions for this plan; OCSD covers 100% of the cost. An
actuarial evaluation was performed as of July 1, 2013, using the Projected Unit Credit Cost
method. This method represents the present value of benefits earned to date assuming that an
employee earns benefits ratably over his/her career. An investment rate of return of 4.0% per year
and an inflation rate of 2.5% were used; no salary adjustment was used due to the flat dollar
nature of the benefit. The unfunded actuarial liability was amortized on a level dollar basis over an
open period of 30 years. OCSD utilizes a pay-as-you-go method for funding the plan.
Trend Information and Funding Progress: Trend information gives an indication of the progress
made in accumulating sufficient assets to pay benefits when due. The District's trend information
follows.
Annual Pension Cost
Fiscal Year Annual Pension Percentage of Net Pension
Ending Cost(APC) APC Contributed Obligation
6/30/12 978,398 37.5% 8,082,368
6/30/13 969,200 43.5% 8,629,918
6/30114 1,087,975 41.7% 9,263,773
The Schedule of Funding Progress shows the recent history of the actuarial value of assets,
actuarial accrued liability, their relationship, and the relationship of the unfunded actuarial accrued
liability to payroll. This schedule presents multiyear trend information about whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability
for benefits.
Actuarial Actuarial Actuarial UAAL as a
Valuation Accrued Value of Unfunded Funded Covered Percentage of
Date Liability (AAL) Assets AAL(UAAL) Ratio Payroll Covered Payroll
71112009 8,904,499 - 8,904,499 0.0% 57,681,058 15.4%
7/1/2011 10,753,718 - 10,753,718 0.0% 59,787,560 18.0%
7/1/2013 13,735,277 - 13,735,277 0.0% 59,832,408 23.0%
32
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
The annual pension cost and net pension obligation for the years ended June 30, 2014, 2013 and
2012 were as follows:
For the Fiscal Year Ending
June 30, 2014 June 30, 2013 June 30, 2012
Annual required contribution $ 1,241,847 $ 1,090,849 $ 1,090,849
Interest on net pension obligation 345,197 404,118 373,559
Adjustment to annual required contribution (499,069) (525,767) (486,010)
Annual pension cost 1,087,975 969,200 978,398
Contributions made (454,120) (421,650) (367,210)
Increase in net pension obligation 633,855 547,550 611,188
Net pension obligation, beginning of year 8,629,918 8,082,368 7,471,180
Net pension obligation, end of year $ 9,263,773 $ 8,629,918 $ 8,082,368
The net pension obligation is reported in the noncurrent portion of long-term obligations on the
Statement of Net Position.
(61 Other Postemolovment Benefits
OCSD offers medical insurance to active and retired employees, as well as their qualified
dependents. This is a single-employer defined benefit plan administered by OCSD. All retirees
may choose coverage in an OCSD medical plan, with retirees paying the full premium. However,
for employees hired prior to July 1, 1988, medical benefits begin immediately at retirement with
OCSD paying 2.5 months of premium for each year of continuous service toward the cost of
coverage under OCSD medical plans. At the termination of this period the retiree may elect to
continue coverage at his/her own expense. This plan was established and may be modified only
by action of the OCSD Board of Directors. The plan is included in the OCSD financial statements;
stand-alone financial statements are not issued.
As of the date of the latest actuarial valuation (711/13), there were 593 active employees, 58
retirees paying premiums, and 71 retirees whose premium is fully paid by OCSD. Premiums
ranged between $174 and $3,256 per month, depending on the plan and number of dependents
covered.
Funding Policy., There are no employee contributions to this plan; OCSD covers 100% of the cost
for qualifying employees as stated above. Retirees opting to remain with the plan after
employment pay 100% of the premium cost, except for those for whom the District pays for a
period (see above). An actuarial evaluation was performed as of July 1, 2013, using the Projected
Unit Credit Cost method. This method represents the present value of benefits earned to date,
assuming that an employee earns benefits ratably over his/her career. An investment rate of
return of 4.0% per year was used. The rate of increase for healthcare premium was set at 8.0%.
The unfunded actuarial liability was amortized on a level dollar basis over an open period of 30
years. OCSD utilizes a pay-as-you-go method for funding the plan. For fiscal year 2013-14, OCSD
contributed$1,123,961 and retirees contributed $506,811 to cover current year expenses.
Annual OPEB Cost and Net OPEB Obligation: The annual OPEB cost is calculated based on the
annual required contribution of the employer (ARC), an amount actuarially determined in
33
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
accordance with the parameters of GASB Statement 45. The ARC represents a level of funding
that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize the
unfunded actuarial liabilities over 30 years.
The following OPEB cost and net OPEB obligation was determined for the years ended
June 30, 2014, 2013, and 2012:
For the Fiscal Year Ending
June 30, 2014 June 30, 2013 June 30, 2012
Annual required contribution $ 755,078 $ 900,035 $ 900,035
Interest on net OPEB obligation 23,356 39,260 51,784
Adjustment to annual required contribution (33,767) (51,078) (67,373)
Annual OPEB cost 744,667 888,217 884,446
Contributions made (1,123,961) (1,089,516) (1,134,925)
Increase (decrease)in net OPEB obligation (379,294) (201,299) (250,479)
Net OPEB obligation, beginning of year 583,908 785,207 1,035,686
Net OPES obligation, end of year $ 204,614 $ 583,908 $ 785,207
The District's annual OPEB cost contributed and the net OPEB obligation for the years ended
June 30, 2014, 2013, and 2012 are shown in the following table.
Annual OPES Cost
Fiscal Annual Percentage of
Year OPES Actual OPEB Cost Net OPEB
Ending Cost Contributions Contributed Obligation
6/30/12 884,446 1,134,925 128.3% 785,207
6130/13 888,217 1,089,516 122.7% 583,908
6/30/14 744,667 1,123,961 150.9% 204,614
The net OPEB obligation is reported in the noncurrent portion of long-term obligations on the
Statement of Net Position.
Funded Status and Progress: The funding status of the plan as of the most recent actuarial
valuation dates are as follows:
Actuarial Actuarial Actuarial UAAL as a
Valuation Accrued Value of Unfunded Funded Covered Percentage of
Date Liability (AAL) Assets AAL (UAAL) Ratio Payroll Covered Payroll
7/1/2009 8,799,624 - 8,799,624 0.0% 57,681,058 15.26%
7/1/2011 10,706,789 - 10,706,789 0.0% 59,787,560 17.91%
7/1/2013 10,650,711 - 10,650,711 0.0% 59,832,408 17.80%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Actuarially
determined amounts are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. The schedule of funding progress,
presented above, compares whether the actuarial values of plan assets are increasing or
decreasing overtime relative to the actuarial liabilities for benefits.
34
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Actuarial methods and assumptions: Projections of benefits for financial reporting purposes are
based on the substantive plan (the plan as understood by the employer and plan members) and
include the types of benefits provided at the time of each valuation and the historical pattern of
sharing the benefit costs between the employer and plan members to that point. The actuarial
methods and assumptions used include techniques that are designed to reduce the effects of
short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with
the long-term perspective of the calculations.
The ARC for the current year was determined as part of the Julyl, 2013 actuarial valuation using
the Projected Unit Credit cost method. The actuarial assumptions include a 4.0% investment rate
of return, an annual rate of inflation of 2.5%, and an annual healthcare cost trend rate of 8.0%.
The UAAL is being amortized ratably over 30 years. Inflation assumptions are included as part of
the healthcare cost trend. No benefit increase is anticipated and the benefit is unaffected by
changes in salary.
(7) Transactions with Irvine Ranch Water District—Revenue Area No. 14
Formation of Revenue Area No. 14&Excess Purchase Price Over Book Value of Acquired Assets
On July 1, 1985, Revenue Area No. 14 was formed as an independent special district as a result of
a negotiated agreement between OCSD and Irvine Ranch Water District (IRWD). At the time of
Revenue Area 14's creation, OCSD consisted of eight independent special districts (see Note 1 —
Reporting Entity). The eight existing districts sold a portion of the joint treatment facilities and land
to the newly created district and recorded capacity rights revenue at the time of the sale.
In accordance with the negotiated agreement between OCSD and IRWD, IRWD paid OCSD
$34,532,000 for an initial 15,000,000 gallons per day capacity in OCSD's joint treatment facilities
(with an ultimate collection capacity of 32,000,000 gallons per day) and for a pro-rata interest in
real property (based on flow of 32,000,000 gallons per day). The book value of the assets
acquired was determined to be $14,553,000 as of June 30, 1986; these assets were recorded at
book value in Revenue Area 14. The excess of the purchase price over the assets' book value
was$19,979,000 and was recorded as an intangible asset in Revenue Area 14. The excess of the
purchase price over the assets' book value is being amortized over the remainder of the useful
lives of the original assets acquired. As of June 30, 2014, after recognizing current year
amortization of$657,709,the unamortized amount of the excess of purchase price over the assets'
book value was$1,563,148.
35
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Annual Transactions
IRWD entered into a separate agreement with Revenue Area 14 on January 1, 1986 whereby
IRWD agreed to fund quarterly payments of Revenue Area 14's proportionate share of OCSD's
joint capital outlay revolving fund budget requirements and certain capital improvements during the
term of the agreement,which contribution of$5,339,376 was recorded in 2014. IRWD also agreed
to fund the annual integration adjustment of Revenue Area 14's equity share in OCSD's Joint
Works Treatment Facilities based on the Flows discharged to OCSD. Capital contributions of
$5,938,394 to Revenue Area 14 was recognized and reported as contributions from other
government in 2014. This amount included a capital contributions adjustment of$9,468,788 from
the prior year resulting in a reduction of due to other governmental agency. These capital
contributions received from or credited to IRWD for their agreed-upon share of capital assets and
equity share in OCSD's Joint Works Treatment Facilities are calculated as prescribed in the
agreements.
In addition, a separate agreement for transfer of IRWD's wastewater solids residuals to OCSD was
entered on April 28, 2010. IRWD agreed to pay OCSD a charge for interim solids handling charge
which include annual capital and quarterly operating expense components designed to
compensate OCSD for IRWD's share of the cost of operating and maintaining the existing facilities
for the treatment of solids. As a result, a total of $1,475,657 in annual solids capital handling
charges was reported as operating revenue in Consolidated Revenue Area, and $9,335,455 in
solids quarterly operating and maintenance charges were reported as operating revenue in
Revenue Area No. 14 in 2014.
Any amounts credited to IRWD are not refunded in cash but are held as a credit to satisfy future
contributions required of IRWD resulting in a balance due to other governmental agency of
$29,107,270 as of June 30, 2014.
Annual Cash Reserve Requirement
The cash reserve contribution requirement from IRWD at June 30, 2014; in accordance with
Amendment No. 2 to the Agreement between IRWD and OCSD Acquiring Ownership Interests,
Assigning Rights, and Establishing Obligations; is $8.2 million. This rash reserve requirement is
recognized as a liability to IRWD.
(8) Commitments. Due From Other Governmental Agency. and Contingencies
Relocation of the Santa Ana Regional Interceptor: On June 29, 2010, the District entered into an
agreement to lend the Orange County Flood Control District(OCFCD)60 percent of the amount of
the contract awarded to design and construct the relocation of the Santa Ana Regional Interceptor,
but not to exceed $72 million. On December 18, 2012, a new agreement was executed that
superseded the prior agreement and reduced the District's maximum loan obligation to
$59,036,400 based on lower than expected construction costs. OCFCD agrees to repay the loan
from any subvention funds received by OCFCD, with the total balance repaid by no later than
July 1, 2022. Repayment installments will be made within 30 days equal to 60 percent of any
subvention funds received by OCFCD. Interest shall aocme on the unpaid balance from July 1,
2018 at an annual interest rate of two percent until the unpaid balance has been repaid. As of
June 30, 2013, $51,336,000 had been loaned to OCFCD, leaving the District with an outstanding
obligation to loan an additional amount not to exceed $7,700,400. During the fiscal year ended
June 30, 2014, the District received loan repayments totaling $10,712,849, leaving an outstanding
loan receivable balance of$40,623,151.
36
ORANGE COUNTY SANITATION DISTRICT
Notes to Basic Financial Statements
For the Year Ended June 30, 2014
Local Sewer Facilities Transfer: On February 27, 2014, the District entered into an agreement to
transfer 174 linear miles of local sewer facilities in the unincorporated area of Area 7 and in the
City of Tustin, to East Orange County Water District (EOCWD). The transfer is contingent upon
receiving Orange County Local Agency Formation Commission (OC LAFCO) approval of
EOCWD's request to activate EOCWD's latent powers to provide wastewater services and to
slightly adjust EOCWD's boundary, solely for local sewer service, which is not currently within
EOCWD's water service area. If approved by OC LAFCO, the proposed transfer may then
proceed. In addition to the transfer of the sewer facilities, the agreement also provides for the
transfer of $25,000,000 of accumulated capital repair and replacement reserve funds from the
District to EOCWD payable in two installments. The first payment of$15,000,000 is due within five
days following OC LAFCO's approval of EOCWD's request and the remaining $10,000,000 is due
on July 1, 2018. As of June 30, 2014, no transactions have occurred.
Litigation: Certain claims involving disputed construction costs have arisen in the ordinary course
of business. Additionally, the District is a defendant in lawsuits. Although the outcome of these
matters is not presently determinable, management does not expect that the resolution of these
matters will have a material adverse impact on the financial condition of the District.
(9) Subsequent Events
On August 7, 2014, the District issued Wastewater Refunding Revenue Obligations, Series 2014A
(Series 2014A), in the amount of$85,090,000. The obligations were issued to refund a portion of
the Certificates of Participation, Series 2007E (Series 2007B). The debt was issued at a premium
of$17,161,006. The total proceeds of$102,251,006, along with $2,048,651 in 2007E reserves,
were used to refund $93,930,000 of the$267,255,000 outstanding 2007E obligations. The interest
rate on the Series 2014A obligations is 5.00%with a final maturity date of February 1, 2027.
On October 8, 2014, the District issued Revenue Refunding Certificate of Anticipation Notes
(CANS), Series 2014B, in the amount of$120,850,000. The notes were issued to pay off all of the
CANS Series 2013A. The true interest cost on the CANS Series 2014B, maturing on
November 15, 2016, is 0.411076%.
In July 2014, the OCSD Board of Directors approved the pay down on the District's unfunded
actuarial accrued liability within the Orange County Employee's Retirement System (OCERS) in
the amount of$125 million.This payment is expected to be made in November 2014.
37
(THIS PAGE LEFT INTENTIONALLY BLANK)
38
ORANGE COUNTY SANITATION DISTRICT
SUPPLEMENTARY INFORMATION
39
ORANGE COUNTY SANITATION DISTRICT
Combining Area Schedule of Net Position
June 30,2014
Wdh Comparative Totals for June 30,2013
Revenue Consolidated Totals
Area No.14 Revenue Area 2014 2013
Current assets:
Cash and cash equivalents $ 9,982,482 $ 205,314,413 $ 215,296,895 $ 208,278,072
Investments 19,124,788 393,348,521 412,473,309 339,152,573
Accounts receivable,net of allowance
for uncollectibles$29,452 - 7,829,997 7,829,997 9,757,514
Accrued interest receivable - 1,396,378 1,396,378 1,596,362
Connection fees receivable - 3,204,465 3,204,465 1,565,534
Property tax receivable - 1,206,314 1,206,314 1,363,536
Inventories - 5,837,424 5,837,424 5,689,074
Prepaid expenses - 707,365 707,365 600,214
Prepaid retirement 20,113,512 20,113,512 17,555,710
Total current assets 29,107,270 638,958,389 668,065.659 585.558,589
Noncurrent assets:
Restricted:
Cash and cash equivalents - 28,360,917 28,360,917 36,118,018
Investments - 16,940,965 16,940,965 16,940,965
Accrued interest receivable - 224,383 224,383 230,648
Unrestricted:
Non-depreciable capital assets 4,831,074 269,147,424 273,978,498 1,213,736,882
Depreciable capital assets,net of
accumulated depreciation 51,135,545 2,094,890,779 2,146,026,324 1,218,477,069
Prepaid insurance on outstanding debt payable - 1,582,280 1,582,280 1,658,521
Due from other governmental agency - 40,623,151 40,623,151 51,336,000
Other noncurrent assets,net 10,344 10,344 10,344
Total noncurrent assets 55,966,619 2,451,780,243 2.507,746,862 2,538.508,447
Total assets 85,073,889 3,090,738,632 3,175,812,521 3,124,067,036
Deferred outflow of resources:
Deferred charges on refunding debt 18.172,646 18,172,646 20,722,872
Total assets and deferred outflow of resources 85,073,889 3,108,911,278 3,193,985.167 3,144.789,908
Current liabilities:
Accounts payable - 11,922,059 11,922,059 11,485,962
Accrued expenses - 7,295,661 7,295,661 8,123,120
Retentions payable - 2,821,953 2,821,953 8,286,811
Interest payable - 22,619,300 22,619,300 23,153,100
Due to other governmental agency 29,107,270 - 29,107,270 48,700,573
Current portion of
long-term obligations 40,221,191 40,221,191 178,515,737
Total current liabilities 29,107,270 84,880,164 113,987,434 278.265,303
Noncurrent liabilities:
Noncurrent portion of
long-term obligations 1,257,703.009 1.257,703,009 1,165.799,690
Total liabilities 29,107.270 1,342,583,173 1,371,690.443 1,444.064,993
Net position:
Net investment in capital assets:
Collection system 19,388,638 440.936,358 460,324.996 508,994,825
Treatment and disposal-Land 406,846 4.068,905 4,475,751 4,475,751
Treatment and disposal system 36,171,135 1,919,032,940 1,955,204.075 1,918.743,375
Capital assets related debt (1,215,299,213) (1,215,299.213) (1,251.916,008)
Subtotal 55,966,619 1,148,738,990 1,204,705.609 1,180.297,943
Unrestricted 617,589,115 617,589.115 520,426,972
Total net position $ 55,966,619 $ 1,766,328,105 $ 1,822,294.724 $ 1,700.724,915
40
ORANGE COUNTY SANITATION DISTRICT
Combining Area Schedule of Revenues,Expenses,and Changes in Net Position
For the Year Ended June 30,2014
With Comparative Totals for June 30,2013
Revenue Consolidated Totals
Area No.14 Revenue Area 2014 2013
Operating revenues:
Service charges $ 9,826,969 $ 290,784,284 $ 300,611,253 $ 303,399,529
Permit and inspection fees 5,004 843,056 848,060 1,176,106
Total operating revenues 9,831,973 291,627,340 301,459,313 304,575,635
Operating expenses other than depreciation
and amortization:
Salaries and benefits $ 1,096,399 $ 78,082,341 79,178,740 76,878,551
Utilities 128,790 6,252,604 6,381,394 6,403,013
Supplies,repairs and maintenance 648,410 22,657,907 23,306,317 24,093,927
Contractual services 9,551,628 16,660,720 26,212,348 26,791,095
Directors'fees 512 157,203 157,715 144,713
Meetings and training 11,236 920,443 931,679 719,521
Feasibility studies 69,454 5,352,428 5,421,882 10,646,100
Other 815,618 4,041,388 4,857,006 4,140,333
Total operating expenses other than
depreciation and amortization 12,322,047 134,125,034 146,447,081 149,817,253
Operating income(loss)before
depreciation and amortization (2,490,074) 157,502,306 155,012,232 154,758,382
Depreciation and amortization 3,008,840 96,796,126 99,804,966 63,906,848
Operating income(loss) (5,498,914) 60,706,180 55,207,266 90,851,534
Non-operating revenues:
Property taxes 2,135,797 72,808,144 74,943,941 79,239,497
Investment and interest income 346,535 6,151,118 6,497,653 (3,912,925)
Contributions from other government 11,277,770 651 11,278,421 2,054,154
Other 8,670 1,308,377 1,317,047 1,727,320
Total non-operating revenues 13,768,772 80,268,290 94,037,062 79,108,046
Non-operating expenses:
Interest - 40,450,377 40,450,377 42,314,928
Contributions to other government - - - 26,590,533
Other 743 59,712 60,455 54,549
Loss on disposal of assets 21,843 1,234,557 1,256,400 10,689,755
Total non-operating expenses 22,586 41,744,646 41,767,232 79,649,765
Income before capital contributions 8,247,272 99,229,824 107,477,096 90,309,815
Capital Contributions:
Capital facilities capacity charges - 14,092,713 14,092,713 12,797,483
Change in net position 8,247,272 113,322,537 121,569,809 103,107,298
Total net position-beginning 47,719,347 1,653,005,568 1,700,724,915 1,597,617,617
Total net position-ending $ 55,966,619 $ 1,766,328,105 $1,822,294,724 $1,700,724,915
41
ORANGE COUNTY SANITATION DISTRICT
Combining Area Schedule of Cash Flows
For the Year Ended June 30,2014
With Comparative Totals for June 30,2013
Revenue Consolidated Totals
Area No.14 Revenue Area Eliminations 2014 2013
Cash flows from operating activities:
Receipts from(refunds to)customers and users $ (9,761,330) $ 293,544,498 $ - $ 283,783,166 $ 305,300,505
Payments to employees (1,096,911) (77,855,271) - (78,952,182) (77,697,268)
Payments to suppliers (11,225,136) (61,511,268) (72,136,4N) (68.387,501)
Net cash provided by operations (22,083,3T1) 154,177,957 132,04,580 159,215,736
Cash flows from noncapital financing activities:
Proceeds from property taxes 2,136,797 72,965,367 - 75,101,164 79,418,183
Proceeds from various resources 6,566 1,248,663 1,255,229 1,61
Net cash provided by noncapital financing activities 2,142,363 74,214,030 76.356,393 1
Cash flows from capital and related financing activities:
Capital facilities capacity charges - 12,453,782 - 12,453,782 11,879,435
Additions to capital assets (11,276,594) (81,041,794) 19,465,556 (72,852,832) (109,353,843)
Disposal of capital assets - 8.187,786 (8,187,786) -Interest paid - (53,434,264) - (53,434,264) (51,970,472)
Principal payments on debt obligation - (171,290,000) - (171,290,000) (259,070,000)
Proceeds from debt issuances - 131,991,954 - 131,1 216,506,206
Debt issuance vests - (262,462) - (262.462) (838,886)
Contnbution from other government 11,277,770 651 (11,277,770) 651
Net cash used In capital and related
financing activities 1,176 (153,394,W) (153,393,171) (192,847.558)
Cash flows from Investing activities:
Proceeds form the sale of investments 302,898,079 5,461,458,550 - 5,764,356,629 8,932,206,118
Purchases of investments (291,433,630) (5,537,238,973) - (5,828,672,603) (8,896,971,673)
SARI project(advance)Ipayments - 10,712,849 - 10,712,849 (20,483,710)
Interest received (70,981) (2,121,974) (2,192,955) 10,627,896
Net cash provided by fund in)investing activities 11,393,488 (67,189,548) (55,796,080) 25,378,631
Net increase(decrease)in cash and cash equivalents (8,546,370) 7,808,092 - (738,278) 72,839,934
Cash and cash equivalents,beginning of year 18,528,852 226.867,238 24g396,090 171,556,156
Cash and cash equivalents,end of year $ 9,982,482 $ 233,675,330 $ $ 243,657,812 $ 244,396,090
Reconciliation of operating income(loss)to net cash provided
by operating activities:
Operating income(ion) $ (5,498,914) $ 60706,180 $ - $ 55,207,266 $ 90,851,534
Adjustments to reconcile operating Income(loss)
to net cash provided by operations:
Depreciation and amortization 3,008,840 96,796,126 - 99,804,966 63,906,848
Bad debt exper.(Net recoveries) - 10,361 - 10.361 11.398
Feasibility studies - - - 6,058,286
(Increase)Idecrease in operating assets:
Accounts receivable - 1,917,156 - 1,917,156 (316,323)
Inventories - (250,624) - (250,624) (30,340)
Prepaid and other assets - (2,664,953) - (2,664,953) (2,359,320)
Increasai(decrease)in opem8ng liabilities:
Accounts payable - (2,058,622) - (2,058,622) (746,578)
Accrued expanses - (816,828) - (816.828) 733.795
Due to other governmental agency (19,593,303) - - (19,593,303) 1,131
PensionlOPEBICaUstrophe leave payable - 257,493 - 257,493 34],]32
Compensated absences - (116,222) - (116,222) (136,296)
Otherpayable - 79774 - 79.774 (277.285)
Claims and judgments 318,116 318.116 131.095
Net cash provided by operations $ (22D83,3]]) $ 154,177,957 $ $ 132p94,580 $ 159,215,736
Noncash Activities:
Unrealized gain(loss)on the fair value of investments $ 417516 8,587,246 $ 9,004,762 $ (14,438,658)
Contributions from(to)other government 11271790 - 11,277,770 (24,536,380)
Capital assets acquired through accounts payable - 2,494,217 2,494717 7,450,400
Feasibility studies woo no cash effect - - - 6,032,722
42
ORANGE COUNTY SANITATION DISTRICT
STATISTICAL SECTION
This part of the comprehensive annual financial report of the Orange County Sanitation District (OCSD)
presents detailed information as a content for understanding what the information in the financial
statements, note disclosures, and required supplementary information says about OCSD's overall
financial health.
Contents Pages
Financial Position and Trends
These schedules contain current and trend information to help the reader understand
OCSD's financial position and how OCSD's financial performance and well-being have
changed over time. 44-48
Revenue Capacity
These schedules contain information to help the reader assess OCSD's most
significant revenue source of sewer service fees. 49-51
Debt Capacity
These schedules present information to help the reader assess the affordability of
OCSD's current levels of outstanding debt and OCSD's ability to issue additional debt
in the future. All of OCSD's debt is recorded in a proprietary fund; consequently,many 52-55
of the schedules which are applicable to governmental funds are not presented.
Operating Information
These schedules contain data to help the reader understand how the information in
OCSD's financial report relates to the services it provides and the activities it performs. 56-59
Demographic and Economic Factors
These schedules offer demographic information to help the reader understand the
environment within which OCSD's financial activities take place. 60-63
43
ORANGE COUNTY SANITATION DISTRICT
Net Position by Component
(Dollars in Thousands)
Last Ten Fiscal Years
$2,000,000
$1,800,000
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,00)
$400,00)
$200,00)
$0
2004-06 2008-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
a Net investment in Capital Assets
■Restncted for Debt Senrm&Capital Acquisition
OUnrestricted
Restricted for
Debt Service
Net Investment In &Capital
Fiscal Year Capital Assets Acquisition Unrestricted Total Net Position
2004-05 $ 558,391 $64,514 $ 418,342 $1,041,247
2005-06 664,060 3,003 422,036 1,089,099
2006-07 886,463 3,904 299,370 1,189,737
2007-08 B47,426 - 428,561 1,275,987
2008-09 948,869 - 399,452 1,348,321
2009-10 1,121,057 - 310,016 1,431,073
2010-11 1,131,063 - 379,423 1,510,486
2011-12 1,125,966 - 471,651 1,597,617 (1)
2012-13 1,180,298 - 520,427 1,700,725
2013-14 1,204,706 - 617,589 1,822,295
I'I Beginning net position restated due to implementation of GASS 65.
Source: Orange County Sanitation Distncl's Financial Management Division.
44
ORANGE COUNTY SANITATION DISTRICT
Revenues and Gross Capital Contributions by Source
(Dollars in Thousands)
Last Ten Fiscal Years
$325,000
$300,000
$275,000
$250,000
$225,000
$200,000
$175,000
$150,000
$125,000
$100,000
$75,000
$50,000
$25,000
$6
-$25,000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
GOperating Revenue ■Non-Operating Revenue ■Capital Contnbutions
Operating Revenue Non-Operating Revenue
Permit& Total
Fiscal Service Inspection Total Property Non- Capital
Year Charges Fees Operating Taxes Interest Other Operating Contributions
2004-05 $ 120,917 $ 498 $ 121,415 $ 35,764 $ 15,118 $ 1,051 $ 51,933 $19,350
2005-06 154,291 874 155,165 39,958 10,426 3,477 53,861 32,990
2006-07 167,790 1,866 169,656 60,565 22,243 1,068 83,876 50,207
2007-08 184,180 1,196 185,376 65,210 20,235 13 85,458 35,408
2008-09 206,422 895 207,317 66,427 14,836 1,634 82,897 17,937
2009-10 225,059 629 225,688 64,759 19,166 6,939 90,864 (2,406)
2010-11 244,465 784 245,249 64,307 10,092 11,015 85,414 9,800
2011-12 259,491 1,030 260,521 67,882 15,747 8,486 92,115 8,936
2012-13 303,400 1,176 304,576 79,240 (3,913) 3,781 79,108 12,797
2013-14 300,611 848 301,459 74,944 6,498 12,595 94,037 14,093
Source: Orange County Sanitation District's Financial Management Division.
45
ORANGE COUNTY SANITATION DISTRICT
Expenses by Type
(Dollars in Thousands)
Last Ten Fiscal Years
$250,000
$225,000
$200,000
$175,000
$150,000
$125,000
$100,000
$75,000
$50,000
$25,000
$0
2004-05 2005-06 2006 07 2007-03 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
•Operating Expense ■Non-Opeating Expense
Operating Expense Non-Operating Expense
Fiscal Salaries& Maint& Depr& Total Interest Total Non-
Year Benefits Utilities Other Amon Operating Expense Other Operating
2004-05 $ 53,048 $ 6,473 $ 42,325 $ 48,095 $ 149,941 $ 17,470 $ 8,172 $ 25,642
2005-06 53,246 7,563 44,823 49,887 155,519 20,078 18,567 38,645
2006-07 57,802 8,072 46,281 53,111 165,266 21,747 16,089 37,836
2007-08 67,629 8,092 56,169 47,767 179,657 22,517 17,818 40,335
2008-09 67,498 7,242 89,816 32,520 197,076 24,899 13,842 38,741
2009-10 69,652 6,934 61,499 52,036 190,121 27,537 13,736 41,273
2010-11 73,112 6,948 63,328 49,288 192,676 29,129 39,245 68,374
2011-12 75,642 7,405 89,272 56,051 228,370 28,700 8,433 37,133 111
2012-13 76,878 6,403 66,536 63,907 213,724 42,315 37,335 79,650
2013-14 79,179 6,381 60,887 99,805 246,252 40,450 1,317 41,767
(1) Non-operating expense restated due to implementation of GASS 65.
Source: Orange County Sanitation District's Financial Management Division.
46
ORANGE COUNTY SANITATION DISTRICT
Change in Net Position
(Dollars in Thousands)
Last Ten Fiscal Years
$2,000,000
$1,800,000
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
2004-06 2006-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Ending Net Position by Fiscal Year
Fiscal Total Total Change in Beginning Ending
Year Revenues Expenses Net Position Net Position Net Position
2004-05 $192,698 $ 175,583 $ 17,115 $1,024,133 $ 1,041,248
2005-06 242,016 194,164 47,852 1,041,248 1,089,100
2006-07 303,739 203,102 100,637 1,089,100 1,189,737
2007-08 306,242 219,992 86,250 1,189,737 1,275,987
2008-09 308,151 235,817 72,334 1,275,987 1,348,321
2009-10 314,146 231,394 82,752 1,348,321 1,431,073
2010-11 340,463 261,050 79,413 1,431,073 1,510,486
2011-12 361,572 265,503 96,069 1,501,549 (1) 1,597,618
2012-13 396,481 293,374 103,107 1,597,618 1,700,725
2013-14 409,589 288,019 121,570 1,700,725 1,822,295
nl Beginning net position restated due to implementation of GASS 65.
Source: Orange County Sanitation District's Financial Management Division.
47
ORANGE COUNTY SANITATION DISTRICT
Cash and Investment Reserve Balances
(Dollars in Millions)
Last Ten Fiscal Years
Capital Debt
Cash Flow Self- Improvement Service
Fiscal Year Contingency Insurance Program Requirements Total
2004-05 $ 71 $ 57 $ 242 $ 65 $ 472
2005-06 132 57 196 105 490
2006-07 132 57 104 79 372
2007-08 149 57 219 108 533
2008-09 172 57 172 133 534
2009-10 185 57 102 129 473
2010-11 187 57 176 141 561
2011-12 196 57 186 138 577
2012-13 174 57 234 135 600
2013-14 189 57 296 131 673
Notes:
The Cash Flow Contingency Reserve is to fund operations, maintenance, and certificates of participation debt service
expenses for the first half of the fiscal year, prior to the receipt of the first installment of the property tax allocation and
sewer service user fees.
The Self-Insurance Reserve is to provide requirements for property damage including fire,flood and earthquake,general
liability and workers'compensation.
The Capital Improvement Program Reserve is to fund annual increments of the capital improvement program with a
target level at one half of the average annual capital improvement program through the year 2020.
The Debt Service Required Reserves are monies held and controlled by a trustee pursuant to the provisions of
certificates of participation issues, and the monies are not available for the general needs of the District.
Source: Orange County Sanitation District's Financial Management Division.
48
ORANGE COUNTY SANITATION DISTRICT
Sewer Service Fees
Single Family Residence Rate
Last Nine Fiscal Years and Next Fiscal Year
Sewer service fees are comprised of three categories: residential customers, commercial customers, and
industrial customers. Although the majority of sewer service fee revenues are from residential and commercial
customers(see the schedule of Number of Accounts and Revenues by Customer Class), the fee paid by each
residential and commercial customer is less than the individual fees paid by industrial customers. The rates for
commercial and industrial customers are derived from the base sewer service fee charged for a single-family
residence and are based on the type of business and the strength and volume of waste that is discharged into
the sewer system. Due to the complexity of the rate structure for commercial and industrial customers and
since the rates are derivatives of the single-family residence rate, only the single-family residence rate is
presented within the statistical section.
Sewer Service
Fiscal Year Charge
2005-06 $ 151.00
2006-07 165.80
2007-08 182.00
2008-09 201.00
2009-10 221.00
2010-11 244.00
2011-12 267.00
2012-13 294.00
2013-14 308.00
2014-15 316.00
Annual Sewer Service Fees
Single Family Residence
350
300
LL 250
200
LL 150
M
100
50
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 201&14 2014-15
Fiscal Year
Source: Orange County Sanitation Districfs Financial Management Division.
49
ORANGE COUNTY SANITATION DISTRICT
Number of Accounts and Revenues by Customer Class
(Dollars in Millions)
Last Ten Fiscal Years
Residential/Commercial Industrial
Number of Total Percentage Total Percentage
Equivalent Sewer Svc. of Sewer Number of Sewer Svc. of Sewer
Single-Family Charge Service Charge Customer Charge Service Charge
Fiscal Dwellings Revenue Revenues Accounts Revenue Revenues
2004-05 860,634 99.0 90% 568 10.5 10%
2005-06 872,859 132.0 92% 557 12.2 8%
2006-07 867,035 143.8 91% 531 13.4 9%
2007-08 875,739 159.4 93% 520 12.1 7%
2008-09 882,747 177.4 95% 515 9.9 5%
2009-10 875,442 193.5 95% 487 10.8 5%
2010-11 874,130 213.3 95% 479 10.1 5%
2011-12 869,709 232.2 96% 516 9.5 4%
2012-13 879,443 258.6 96% 527 10.8 4%
2013-14 869,461 267.8 95% 489 14.4 5%
$300,000,000
$250,000,000
$200,000,000
$150,000,000 MEMO
$100,000,000
$50,000,000
$0
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
■Residential/Commercial Users ■Industrial Users
Source: Orange County Sanitation District's Financial Management Division.
50
ORANGE COUNTY SANITATION DISTRICT
Principal Sewer Service Customers
For the Current Fiscal Year and Nine Years Ago
Fiscal Year Ended 6130114 Fiscal Year Ended 6130/05
Industrial Industrial
Permittee %to Total Pennittee %to Total
Service Service Charge Service Service Charge
User Charges Rank Revenue Charges Rank Revenue
House Foods America Corp. $ 1,096,791 1 0.36% $ 540,548 6 0.45%
Kimberly-Clark Worldwide, Inc. 1,059,850 2 0.35% 727,318 3 0.60%
Stremicks Heritage Foods, LLC 971,832 3 0.32% 591,308 4 0.49%
MCP Foods, Inc. 898,925 4 0.30% 881,089 1 0.73%
Dean Foods Co.of CA Inc. 585,374 5 0.19%
Nor-Cal Beverage Co. Inc(NCB) 577,261 6 0.19%
Jazz Semiconductor 475,299 7 0.16%
Amerlpec Inc. 420,365 8 0.14%
Pepsi-Cola Bottling Group 402,513 9 0.13%
Pulmuone Wildwood, Inc. 383,365 10 0.13%
Alstyle Apparel-Activewear Mfg. 793,035 2 0.66%
Disneyland Resort 569,661 5 0.47%
Disneyland Resort--DCA 411,368 7 0.34%
Van Law Food Products, Inc. 359,771 8 0.30%
Seven-Up Bottling Company 235,146 9 0.19%
Expo-Dyeing 8 Finishing, Inc. 218,959 10 0.18%
$ 6,871,575 2.27% $ 5,328,203 4.41%
Although the majority of sewer service fee revenues are from residential and commercial customers (see the schedule
of Number of Accounts and Revenues by Customer Class), the fee paid by each residential and commercial customer
is less than the individual fees paid by industrial customers. Consequently, this schedule shows the largest sewer
service fee customers.
Source: Orange County Sanitation Districts Financial Management Division.
51
ORANGE COUNTY SANITATION DISTRICT
Ratio of Annual Debt Service to Total Expenses
(Dollars in Thousands)
Last Ten Fiscal Years
70%
60%
50%
40%
30%
20%
10%
0%
200 05 2005 06 2006 07 2007 08 2008 09 2009 10 2010-11 2011-12 2012-13 201314
Ratio of Debt
Total Service to Total
Fiscal Principal Total Debt Operating Operating
Year (1) Interest Service(3) Expenses(2) Expenses
2004-05 $ 12,040 $ 25,871 $ 37,911 $ 101,846 37.22%
2005-06 12,755 29,563 42,318 105,632 40.06
2006-07 13,465 32,673 46,138 112,155 41.14
2007-08 11,025 36,484 47,509 131,890 36.02
2008-09 21,305 40,840 62,145 164,556 37.77
2009-10 24,030 46,052 70,082 138,085 50.75
2010-11 25,895 49,426 75,321 143,388 52.53
2011-12 14,370 50,975 65,345 172,319 37.92
2012-13 23,965 53,640 77,605 149,817 51.80
2013-14 39,590 53,163 92,753 146,447 63.34
Notes
(1)-Excludes principal reductions due to advanced refunding.
(2)-Excludes depreciation and amortization expense.
(3)-Debt consists of certificates of participation, revenue obligations, and anticipation notes.
Source: Orange County Sanitation District's Financial Management Division.
52
ORANGE COUNTY SANITATION DISTRICT
Debt Coverage Ratios
(Dollars in Millions)
Last Ten Fiscal Years
The Orange County Sanitation District has no legal debt limits as imposed by State legislation. The District does have contractual covenants
within the existing Certificates of Participation indenture agreements which require minimum coverage ratios of 1.25. The coverage ratio is
calculated as the ratio of net annual revenues available for debt service payments to total annual debt service requirements.
3.50
3.00
2,50
2.00
1.50
1,00
0,50
2004-05 2005-06 2906-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Fiscal Year Ending June 30,
M05 2006 2007 2008 Mae 2010 2011 M12 2013 2014
0pemtin9 8 Non-operating Revenues:
Service Charges,Net of Refunds-Regional $ 99.0 $ 132.0 $ 143.8 $ 159.4 $ 177.4 $ 193.6 $213.3 $ 232.2 $ 258.6 $ 267.8
Service Charges,Net of Refunds-Local - - - - 5.6 5.6 5] 5] 5.8 S.T
Industrial Sewer Service Charges 10.5 12.2 13.4 12.1 9.9 10.8 10.1 9.5 10.8 14.4
Revenue Area No,14 Fees 6.9 5.3 5.2 7.1 10.3 10.2 21.4 18.0 12.5 23.6
Ad Valorem Taxes 35.8 40.0 60.6 66.2 66.4 64.8 64.3 6]9 T1.3 72.8
Interest Earnings 15.1 10.4 228 20.2 14.8 19.2 10.1 15.7 (3.6) 6A
Other Revenues 6.1 9.2 0.3 6.9 5.8 12.5 5] 3.6 22.3 5.1
Total Revenues 173.4 209.1 253.5 270.9 290.2 316.6 330.6 352.6 383.7 395.5
Operaling Expenses(1) 1018 105.6 112.2 131.9 164.6 13sl 1434 1723 149-8 1464
Net Revenues $ 71.6 $ 103.5 $ 141.3 $ 139.0 $ 125.6 $ 178.5 $ 181.2 $ 180.3 $ 233.9 $ 249.1
Debt Service Requirements
Principal Payments 12.0 12a 13.5 119 21.3 24a 259 144 24a 39.6
Interest Payments 25.9 29.1 35.3 318 36.3 43.1 46.5 51.0 53.6 532
Total Debt Samoa Requirements $ 37.9 $ 41.9 $ 48.8 $ 42.8 $ 57.6 $ 67.1 $ 72.4 $ 65.4 $ 77.6 $ 92.8
Coverage Ratios 189 247 2,90 3.25 2.18 2.66 259 276 3.01 2.68
Ending Reserves(2) $ 4070 $ 385.0 $ 293.0 $ 425.0 $ 401.0 $ 344.0 $420.0 $ 4390 $ 465.0 $ 642.0
Notes
(1)-Operating expenses exclude depreciation and annunciation expenses.
(21-Excludes debt service reserves In accoriance with the District's reserve policy.
Source:Orange County Sanitation Districts Financial Management Division.
53
ORANGE COUNTY SANITATION DISTRICT
Computation of Direct and Overlapping Debt
June 30,2014
2013-14 Assessed Valuation(Land R Improvements Ook): S329.285,498,672
OVERLAPPING TAX AND ASSESSMENT DEBT(Based no all omeor m sweated valuation OfS 332.843,667,456)
T.WDMI DbtticPs San"Of
6130/14 lY A oDea6M(1) Debt 6/30/I4
Metlopolitew W&W District of Somhem Calif is S133:75000 152201. S 20,132,255
Coast Conwuoin'College District 632.413698 99.354 628,323,306
North Oreuge Comm,Joint Commmity College District 201,239.001 91432 1%,091,183
Rancho Senl.go Commmity College District 285,430.201 98996 282,56ga32
Bien-Olindaand Laguna B each Unified School Districts 47.834M9 99.999A 15.204 23,698,542
Gneden Grace Unified School District 244,995,160 100.000 244,995,160
Los A hmitos Unified School District School Facilities lmprmxment District No. 1 100,990,124 96.554 97,510,004
Necpoa Mesa Unified School District 236,334,150 100.000 M6,854,150
Placentia-Yoda Linda Unified School District 257,071,375 99.949 254,366,914
Rua land Unified School District 208,566,229 0.135 281,564
Saddleback title'Unified School District 126,840,W0 11.990 15,081,276
Santa Ana Unified School District 239,561,562 100.000 2a9,561,562
Tustin Unified School District School Facilities lmptm'ement District]o.200}1 53,319,6a5 99.961 53,298,950
Tustin Unified School District School Facilities lmprm'ement District No.2008.1 72,13$,WO 99.960 72,lofla6
Tustin Unified School District School Facilities loncroo dent District No.201-1 35,WO,WO 99974 34,M,M
Anaheim Union Hipb Scbool District 100,323,955 100.000 100,323,955
Full.Jowl Union HiEh School District 50,237,910 91.479 45,957,138
Huntington Beach Union High School District 206,874,998 99.991 24]4,787,629
School Distric6 425,492,392 99.339-100.0W 424,WS,T89
Cim,of Anaheim LSS5,W0 99.209 1,9'J9,220
Irvine Reach Water District lmprm'ament Districts 509,537,480 Various 509,536,259
Roxmoor C ommmitc Satires District Special Tax Obligations 2W,WO MOW 2W.M
Boni.Canyon Communim,Facilities District No.96-1 36,355,WO 100.000 36,355,000
[mine Unified School District Commuvin FaciBties Dishicle 411,492,332 1W.OW 411,492,332
Toad.Unified School District Commuvim Facilities Districts 244,707,675 1W.OW 244,707,675
Cim of Taste Commmib-Facilities D iscic. TT,ITO,WO 100000 77,170,000
Oder Commml.][ecifities Dishic. 315,853,077 99822-1000W 315,808,143
OreageCweNAssexmmlDuhids 83,815,000 Italian 83815,f100
Ci.of Wine 1915 Act Bonds 831,924,000 Mount W1,924,Oa0
Oda 1915 Act bonds I5,796,6T0 MAN IST96.690
TOTAL OVERLAPPNG TAX AND ASSESSMENT DEBT S5,754,583,174
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Orange Custom Gen ml Fond Obligatious S145p6,000 95230% S 109,441,595
0.,Counn'P...Obligafinos 32,195,299 75.230 24,=,515
Ocut Count,Boats of Education Cafificata of Paiticipatiov 15,500,W0 75.230 11,W,650
Bonnm-Clinch Unified School District Cmificates ofPadicip.lio. 22,96S,W0 99.979 23,960,177
Ormge Unified School District Certificates of Participation and Benefit Obligations 119,856,560 97.897 117,335,976
PBcesh.-Yotba Linda Unified School District Certificates of Participstino 107,23$,670 98948 I06,107,551
Sao.Ava Uoifled School District Certificates ofPuticipstiva 76,291,353 100.000 76,291,353
Other Unified School District Certificates;of Pa.icipa4m 60,704,9223 Various 54,228,509
UnionHleh School District Certificates of Participation 119,354,185 Various 115,953.232
School District Cenificates of Participation 75,736,299 Various 95,2W,056
City of Anaheim General Food Obligations 729,677,465 99.209 723,905,716
Cu, of Costa Mesa G metal Fund Obligations 28,130,W0 100.000 28,130,000
Co, of Garden come Gene.l Food Obligations 17,830,W0 lOOOW 17,830,000
Co, of Hunting too Bach General Fund and Judgment Obligations 45,679,W0 96.7.21 415,094,71%
Citr of La Habra General Food OO ligation, lif"it W0 MOW 18,aa0,000
Ci.of San.Ana Gmaal Fund Obligations 83,250,000 MOW 82,250,000
Oder Cth General Food Obligations 221,938,253 Vanous 20),429,739
Ore.ge CouK Seek.flues Dhlrtct 0 1410000 0 (2)
Municipal Wcone District of O.nge County Water Facilities Coryo.fino T,TS,WO 70419 5.475.000
TOTAL GROSS OV ERLA"No GENERAL FLIND DEBT $1,934,934,935
Lea: Cinrof Aveheim xlf-anppanwp oblipatlava 716,484,883
Other City self oopponing obligations 18,799,613
MWDOCWaterFacilities Capo.fim(100%xlf-mpg g) 5475.OW
TOTAL NET OVERLAPPING GENERAL FUND DEBT $1,094,1116,339
OVERLAPPING TAX INCREMENT DEBT: $1,184,766,565 36.4661W.000% $1,178,055,011
GROSS COMBINED TOTAL DEBT S8,767,573,020 (3)
NET COMBINED TOTAL DEBT S8,026,$N,524
lU ThepemmlMe deyalappv{deb appli<etleled<6strict is ndmamd vrivpmWle arsnsedprapatyydve. ApdicY,lepercmlya was admated by daermiviv{de
por8av dde m'erlapPOE dimids nrnudr'W e tWt it aidiv de bomdmin of M1e rmitadov datdct drihdbY de 6am<6 mtd turtle usened rdve.
Q) Eatlud<swmewma memeceritlirnes dperd<ipatlm. Proioudytlmi6ed<adfiues dpmtidprtim have hem redmu6edD district ramvuappmWis400 ud
vo induct true.debtivdedebtnemmmt
(3) Eadvdes.ma md.omv<miiupmiovvom.mleryrisemmve.mort[a[e rnmuemdvm-bovdedupiW lame dli[edom.Qudified Zme Aced®y Bonds reiv<Ivded
bsed oar ptiv<gd O.m mamdp.
Rana is Total Overlapping Tex end Aaseament increment Debt Gross Combined Total Debt Net Combined To.l Debt
Land andlmPim'ement A ssased Valuation 1.75% 2.66% 244%
All"arm ADessed Valentino NA 2.63% 241%
RederelOpment lndemen.I Valuation($41,656,805,T16) 2.83% NA NA
Smm.Cdifmoia Mi u<ipd Seadsfics
54
ORANGE COUNTY SANITATION DISTRICT
Ratios of Outstanding Debt
Last Ten Fiscal Years
Debt as a
(5) (3) Percentage
Total Median of Median (4) Debt
Fiscal Outstanding Family Family Population per
Year Debt Income(1) Income Estimate(2) Capita
2004-05 $ 620,520,145 $ 75,700 0.012°% 2,467,850 251.44
2005-06 807,809,704 78,300 0.010% 2,481,540 325.53
2006-07 801,389,769 78,700 0.010% 2,505,180 319.89
2007-08 1,096,049,542 84,100 0.008% 2,522,820 434.45
2008-09 1,262,936,747 86,100 0.007% 2,539,990 497.22
2009-10 1,306,255,753 87,200 0.007% 2,563,170 509.63
2010-11 1,427,792,453 84,200 0.006% 2,457,571 580.98
2011-12 1,376,404,782 85,300 0.006% 2,472,122 556.77
2012-13 1,325,928,512 84,100 0.006% 2,491,268 532.23
2013-14 1,278,998,124 84,900 0.007% 2,521,803 507.18
Notes & Data Sources
(1)- Data is for the entire County of Orange.
(2)- Data is for the estimated population served by the Orange County Sanitation District.
(3)- Data Source: U.S. Department of Housing and Urban Development.
(4)- Data Source: Demographic Research Unit, California Department of Finance.
(5)- Data Source: Orange County Sanitation District. Debt includes certificates of participation,
revenue obligations, and anticipation notes and is presented net of original issuance discounts and
premiums.
55
ORANGE COUNTY SANITATION DISTRICT
Comparison of the Volume of Wastewater Treated
With Revenues and Expenses
Last Ten Fiscal Years
Millions of
Gallons of Collection,
Waste- Treatment
water &Disposal Total Total Total Total
Treated Cost per Operating Non-Operating Operating Non-Operating
Fiscal Per Million Costs Costs Revenues Revenues
Year Day Gallons (In Thousands) (In Thousands) (In Thousands) (In Thousands)
2004-05 243 1,095.79 $ 149,941 $ 25,642 $ 121,415 $ 51,933
2005-06 235 1,216.77 155,519 38,645 155,165 53,861
2006-07 229 1,268.38 165,266 37,836 169,656 83,876
2007-08 221 1,541.18 179,657 40,335 185,376 85,458
2008-09 211 1,576.67 197,076 38,741 207,317 82,897
2009-10 196 1,588.72 190,121 41,273 225,688 90,864
2010-11 207 1,816.62 192,676 68,374 245,249 85,414
2011-12 201 1,871.47 228,370 37,133 260,521 92,115
2012-13 200 1,906.01 213,724 79,650 304,576 79,108
2013-14 198 1,936.64 246,252 41,767 301,459 94,037
A Facilities Master Plan to the year 2030 was completed in December 2009 that projects wastewater treatment flows to
increase to 279 millions of gallons per day(mgd) in 2020,to 286 mgd in 2025, and to 294 mgd in the year 2030. The
anticipated need to meet the projected flows is included in the overall CIP program of$2.0 billion out to 2021-22.
Total expenses in FY 2013-14 increased$112.4 million,or 64.0 percent since FY 2004-05, primarily as a result of OCSD's
decision beginning in FY 2002-03 to maximize existing secondary treatment facilities as OCSD moved from a 50/50 mix of
primary and secondary effluent treatment to meeting secondary treatment standards as of December 31,2012.
Maintenance, chemicals, utilities,and other operating costs represent 16 percent of the increase,primarily due to the
increase in the levels of treatment referred to above. Depreciation expense represents another 46 percent of the increase
as a result of the previous expansion in capital facilities and the financing associated with the expansion. In FY 2013-14,
personnel expenses rose 3.0 percent over the prior year. This increase is mainly due to increases in health insurance and
retirement premiums. The full-time equivalent positions authorized decreased by 2 in FY 2013-14.
As depicted from the chart above, actual wastewater treatment flows have generally remained between 221 mgd and 243
mgd in the past. Due to unusually dry weather conditions during the last six years, FY 2008-09, FY 2009-10, FY 2010-11
FY 2011-12, FY 2012-13 and FY 2013-14 had flows of only 211 mgd, 196 mgd, 207 mgd, 201 mgd 200 mgd and 198 mgd
respectively.
Source: Orange County Sanitation District.
56
ORANGE COUNTY SANITATION DISTRICT
Authorized Full-lime Equivalents by Function
Last Ten Fiscal Years
300
250
zoo
150
100
50
0
2005 2006 200 09 2010 2011 2012 2013 2014
GGeneral Management ■Human Resources oAdministrdlive Services GFacilities Support Services
wTechnical Services •Engineering •Operations and Maintenance
Fiscal Year Ending June 30,
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
General Management 17 2 25 30 30 15 15 13 14 14
Human Resources 27 28 19 16 16 17 27 20 16 18
Administrative Services 96 117 83 82 81 92 85 111 111 110
Facilities Support Services 62 62 51 57 68 71 70 84 81 78
Technical Services 112 114 119 109 107 105 102 - - -
Engineering 95 99 98 93 98 96 112 128 125 123
Operations and Maintenance 220 222 249 247 241 245 230 281 281 283
Total FTE's 629 644 644 634 641 641 641 637 628 626
Source: Orange County Sanitation District's Financial Management Division.
57
ORANGE COUNTY SANITATION DISTRICT
Biosolids Produced
Last Ten Fiscal Years
300,000
250,000
200,000
150,000
100,000
50,000
01 UU1111CLiii
2004-05 2005-06 2000-07 2007-08 2009-09 2009-10 2010-11 2011-12 2012-13 2013-14
DWet Tonnage DDry Tonnage
Fiscal Year Wet Tonnaae Dry Tonnage
2004-05 246,194 51,700
2005-06 233,996 49,554
2006-07 236,460 49,184
2007-08 248,717 50,884
2008-09 249,202 51,342
2009-10 245,668 50,799
2010-11 253,557 49,133
2011-12 280,572 47,556
2012-13 274,957 43,365
2013-14 279,362 50,764
Source:Orange County Sanitation District's Environmental Compliance Division.
58
ORANGE COUNTY SANITATION DISTRICT
Capital Asset Statistics
Last Ten Fiscal Years
Miles of Number Primary Secondary
Trunk& of Treatment Treatment
Fiscal Subtrunk Pump Capacity Capacity
Year Sewers Stations (1) (1)
2004-05 620 18 306 170
2005-06 584 16 366 200
2006-07 581 16 372 200
2007-08 568 17 372 200
2008-09 582 17 372 212
2009-10 579 17 372 212
2010-11 587 17 372 212
2011-12 572 17 372 332
2012-13 572 17 372 332
2013-14 580 17 372 332
Notes
(1) -Capacity is presented as million gallons treated per day.
Source: Orange County Sanitation District
59
ORANGE COUNTY SANITATION DISTRICT
Demographic Statistics
Covering The Entire County of Orange (1)
Last Ten Fiscal Years
Total (5) (8)
(2) Personal Per Capita Median Public (7)
Fiscal Population Income Personal Family School Unemployment
Year Estimates (in thousands) Income Income Enrollment Rate
2004-05 3,047,000 $ 139,408,948 (3) $ 45,753 $ 75,700 514,000 3.9%
2005-06 3,072,000 150,598,354 (3) 49,023 78,300 510,114 3.7%
2006-07 3,090,000 153,446,641 (3) 49,659 78,700 503,955 3.9%
2007-08 3,108,000 155,925,156 (3) 50,169 84,100 503,492 5.3%
2008-09 3,135,000 145,247,447 (3) 46,331 86,100 504,136 9.3%
2009-10 3,166,000 147,138,449 (3) 46,475 87,200 502,239 9.5%
2010-11 3,030,000 154,131,535 (3) 50,868 84,200 502,903 9.2%
2011-12 3,056,000 161,743,800 (4) 52,927 85,300 502,195 7.9%
2012-13 3,082,000 168,778,500 (4) 54,763 84,100 501,801 6.1%
2013-14 3,114,000 177,412,900 (4),(a) 56,973 84,900 500,487 5.2%
Notes and Data Sources
(1) - The Orange County Sanitation District services 479 square miles or 60% of the total 799 square miles that
make up the boundaries of the County of Orange.
(2)-Data Source: Demographic Research Unit, California Department of Finance.
(3)-Data Source: Bureau of Economic Analysis, U.S. Department of Commerce.
(4)-Data Source:A. Gary Anderson Center for Economic Research, Chapman University.
(5)-Data Source: U.S. Department of Housing and Urban Development.
(6)-Data Source: California Department of Education, Educational Demographics Unit.
(7)-Data Source: State of California, Employment Development Department as of June 30 of each fiscal year.
(8)-Forecasted number.
60
ORANGE COUNTY SANITATION DISTRICT
Estimated Population Served by the
Orange County Sanitation District
June 30, 2014
Population
as of
January 1,2014
Anaheim 348,305
Brea 42,397
Buena Park 82,344
Costa Mesa 111,846
Cypress 48,886
Fountain Valley 56,702
Fullerton 140,131
Garden Grove 173,953
Huntington Beach 195,999
Irvine 242,651
La Habra 61,717
La Palma 15,896
Los Alamitos 11,729
Newport Beach 86,874
Orange 139,279
Placentia 52,094
Santa Ana 331,953
Seal Beach 24,591
Stanton 38,963
Tustin 78,360
Villa Park 5,935
Westminster 91,652
Yorba Linda 67,069
Subtotal Cities I'I 2,449,326
Estimated Population Served in
Unincorporated Areas(2) 72,477
2,521,803
Data Sources:
(1) Demographic Research Unit, State of California Department of Finance
(2) Center for Demographic Research, California State University, Fullerton.
61
ORANGE COUNTY SANITATION DISTRICT
Principal Orange County Employers(1)
Forthe Current Fiscal Year and Nine Years Ago
Fiscal Year Ended 6130/14 Fiscal Year Ended 6/30/05
Percentage of Percentage of
Number of Total County Number of Total County
Employers Employees(2) Rank Employment(3) Employess(2) Rank Employment(4)
Walt Disney Co. 25,000 1 1.64% 21,000 1 1.38%
University of California, Irvine 22,253 2 1.46% 15,500 3 1.02%
County of Orange 18,035 3 1.19% 17,597 2 1.15%
St.Joseph Health System 12,062 4 0.79% 8,975 5 0.59%
Boeing Co. 6,890 5 0.45% 11,160 4 0.73%
Kaiser Permanents 6,040 6 0.40%
Bank of America Corp. 6,000 7 0.39%
Walmart 6,000 8 0.39%
Memorial Care Health System 5,635 9 0.37%
Target Corp. 5,400 10 0.36% 5,436 10 0.36%
Albertsons Inc. 8,700 6 0.57%
Tenet Healthcare Corp. 8,389 7 0.55%
YUMI Brands Inc. 6,500 8 0.43%
SBC Communications, Inc. 5,658 9 0.37%
Total 113,315 7.44% 108,915 7.15%
Notes&Data Sources
(1)-Data is for the entire County of Orange.
(2)-Data Sources: Orange County Business Journal Book of Lists,County of Orange
(3)-Data Source:State of California,Employment Development Department.
-Percentage is calculated by dividing employees by total employment of 1,520,100 as of June 2014.
(4)-Data Source: Stale of California, Employment Development Department.
-Percentage is calculated by dividing employees by total employment of 1,525,700 as of June 2005.
62
ORANGE COUNTY SANITATION DISTRICT
Operating Indicators
June 30, 2014
District Organization: The Orange County Sanitation District is one consolidated district made up of two revenue
areas which service unincorporated county areas and twenty-three cities and related special districts, as follows:
Consolidated Revenue Area
County of Orange(unincorporated areas)
Cities:
Anaheim Huntington Beach Santa Ana
Brea Irvine Seal Beach
Buena Park La Habra Stanton
Costa Mesa La Palma Tustin
Cypress Los Alamitos Villa Park
Fountain Valley Newport Beach Westminster
Fullerton Orange Yorba Linda
Garden Grove Placentia
Special Districts:
Midway City Sanitary Districl
Costa Mesa Sanitary District
Revenue Area No. 14
County of Orange(unincorporated areas)
Cities:
Irvine
Orange
Tustin
Special District:
Irvine Ranch Water District
Governing Body: 25-member Board of Directors
Authorized Full-Time Equivalent Employees: 626
Operational Date: July 1, 1954
Authority: California Health & Safely Code Section 4700 at. seq.
Services: Wastewater collection,treatment, and disposal
Service Area: 479 square miles
Population Served: 2.5 million
Total Miles of Sewers (including force mains): 580 miles
Number of Pumping Stations: 17
Wastewater System Treatment Capacities (Million Gallons per Day)
Existing Primary Existing Secondary
Actual Flows Treatment Capacity Treatment Capacity
Plant 1 96 204 182
Plant 2 102 168 150
Total 10- M
Source: Orange County Sanitation District's Financial Management Division.
63
(THIS PAGE INTENTIONALLY LEFT BLANK)
64
ORANGE COUNTY SANITATION DISTRICT
OTHER DATA &TRENDS
Information within this section consists of other data and trends including
additional annual disclosures as required by the Sanitation Districts debt
covenants beyond what is allowed to be reported in the Statistical Section.
65
ORANGE COUNTY SANITATION DISTRICT
Cash and Investment Portfolio
As of June 30,2014
Net Unrealized
Cost Mad<et Value Gain1(LOss)
Shares Par Base Base %of Total Base
INVESTMENT PORTFOLIO:
CASH&CASH EQUIVALENTS(U.S.DOLLAR):
CASH EQUIVALENTS $ 104,812.50 $ 104,812.50 $ 47,165.63 0.01% $ (57,646.87)
FEDERAL HOME LOAN BANK-1 YR OR LESS 115,99%000.00 115,980,915.54 115,980,915.54 19.52% -
FEDERAL HOME LOAN MORTGAGES-1 YR OR LESS 16,300,000.00 16,295,191.87 16,295,191.67 2.74% -
FNMA ISSUES-1 YR OR LESS 74,201,000.00 74,185,129.42 74,185,12942 12.49% -
OTHER BONDS-1 YR OR LESS 1,300,000.00 1,300,563.00 1,300,563.00 on REPURCHASE AGREEMENTS 205,800,000.00 205,800,000.00 205,800,000.00 34.64% -
SHORTTERMINVESTMENTFUNDS(US REGULATED) 1,129,800.27 1,129,800.27 1,129,800.27 0.19% -
U.S.TREASURY BILLS-1 YR OR LESS 32,600,000.00 32,598,939.99 32,598,939.99 5,49%PENDING TRADES (102,97,657.38) (102,997,667.38) -17.34%
SUBTOTAL-CASH&CASH EQUIVALENTS 447,434,612.77 344397,695.21 344,340,048.34 57.96% (57,646,87)
FIXED INCOME SECURITIES(U.S.DOLLAR):
ABS-HOME EQUITY 638,297.29 471,293.70 625,357.43 0.09% 54,063.73
ASS-SMALL BUSINESS ADMINISTRATION 219,338,25 219.338.25 237.444,62 0,04% 18.106.37
ASS-STUDENT LOANS 53,904.94 63,686.23 55,741.48 0.01% 2,055.25
AUTOMOBILES&COMPONENTS 5,200,000.00 5.200.000.00 5,216,692.00 0,88% 16.692.00
BANKING&FINANCE 51,463,000.00 54,2]8,5]7.39 52,902,596.41 8.90% (1,375,980.98)
CHEMICALS 672,000,00 697,247,04 693,403.20 0,12% (3,843,84)
COLLATERALIZED MORTGAGE OBLIGATION COMMIC 379,1n.05 380,15,1.62 381,391.44 0.06% 1,236.82
FHLMC MULTICLASS 2,315,272.92 2.539.662.45 2,599,133.27 0.44% 59.470.82
FHLMC POOLS 2,941.59 2,869.90 2,956.59 0.00% 86.69
FNMA POOLS 2,979767.43 3,140,865.50 3,269,199.62 0.55% 128,334.12
FNMA REMIC 1,392,415.12 1,400,469.28 1,414,384.31 0.24% 13,915.03
FOOD BEVERAGE&TOBACCO 4,750,000.00 5,092,024.00 5,057,344.75 0.85% (34,679.25)
GNMA MULTI FAMILY POOLS 342,705.49 342,665.04 355,315.36 0.06% 12,650.31
GNMA REMIC 71,013.68 71.013.68 71,593.86 0,01% 580.18
HEALTH CARE 2,950,000.00 3,030,795.50 3,062,862.00 0.52% 32,066.50
INDUSTRIAL 2,096,000,00 2,154,855,68 2,139,911.20 0.36% (14,944.48)
INSURANCE 800,000.00 884,844.67 889,198.00 0.15% 4,353.33
REITS 11000.000,00 996.050100 1,099,480.00 0,19% 103,430,00
TAXABLE MUNICIPALS 16,440,000.00 16,738,875.89 19,933,909.80 3.36% 3,195,033.91
U.S.TIPS 17,575,416.00 18,049,401,68 18,212,524.83 3,07% 163.123.15
US GOVERNMENTS 128,810,000.00 127,421,758.65 127,989,106.00 21.54% 567,347.45
UTILITY-ELECTRIC 2,727,000.00 3.013.791.51 2,929,069.65 0,49% (84721.86)
WHOLE LOAN-CMO-COLLATERALIZED MTG OBLIG 718,582.06 718,57879 720,141.38 0.12% 1,562.59
SUBTOTAL-FIXED INCOME SECURITIES 243,496,831.82 246,898,819.35 249,758,757.19 42.04% 2,859,937.84
TOTAL INVESTMENT PORTFOLIO $690,931,444.59 591,296,514.66 594,098,805.53 100.00% $ 2,802.290.97
DEMAND DEPOSITS AND CASH ON HAND 2.439.802.78 2,439,802.78
MONIES HELD WITH FISCAL AGENTS 45,301,882.29 45,301,882.29
MONIES WITH THE LOCAL AGENCY INVESTMENT FUND 31.222,267,53 31,231,595.48
TOTAL CASH AND INVESTMENTS $670.200,46716 $6➢3,0➢2.086.08
Sourv, BNYMellon Toon and Orange Count,Sanitation Dialnota Fitamial Management 0msion.
66
ORANGE COUNTY SANITATION DISTRICT
Property Tax Rates-Direct and Overlapping Governments
Last Ten Fiscal Years
Tax Rate
OCSD
1958 OCSD's
General Average
Fiscal Basic Obligation Total Share of
Year Levy Bonds Tax Rate Basic Levy
2004-05 1.00% 0.00% 1.00% 1.67%
2005-06 1.00% 0.00% 1.00% 1.65%
2006-07 1.00% 0.00% 1.00% 1.65%
2007-08 1.00% 0.00% 1.00% 1.63%
2008-09 1.00% 0.00% 1.00% 164%
2009-10 1.00% 0.00% 1.00% 1.63%
2010-11 1.00% 0.00% 1.00% 1.64%
2011-12 1.00% 0.00% 1.00% 1.64%
2012-13 1.00% 0.00% 1.00% 1.64%
2013-14 1.00% 0.00% 1.00% 1.65%
Notes
In 1978, California voters passed Proposition 13 which set the property tax rate at a
1.00% fixed amount of assessed value. This 1.00% is shared by all taxing agencies
within which the subject property resides. In addition to the 1.00% fixed amount,
property owners were charged taxes as a percentage of assessed property values for
the payment of OCSD general obligation bonds (which were paid in full in fiscal year
1998-99).
Source: County of Orange Auditor-Controller's Office.
67
ORANGE COUNTY SANITATION DISTRICT
Assessed and Estimated Actual Value of Taxable Property
(Dollars In Thousands)
Last Ten Fiscal Years
axso,mo.000
Esw,mo.000
Exw,mo.000
$1.0,0,000
SrOo,�O 000
Ew,mo 0m
2004-05 200506 2006-07 2007-08 2000-09 2009-10 2010-11 2011-12 2012-13 2013-14
.Secured ourd.cured
Percent
Change in
Fiscal Assessed
Year Secured Unsecured Total Value
2004-05 214,529,000 4,743,000 219,272,000 8.85%
2005-06 236,826,573 5,023,423 241,849,996 10.30%
2006-07 264,241,033 6,452,111 270,693,144 11.93%
2007-08 288,051,467 4,681,838 292,733,305 8.14%
2008-09 301,717,479 5,894,003 307,611,482 5.08%
2009-10 299,038,654 6,116,530 305,155,184 -0.80%
2010-11 298,099,034 6,238,834 304,337,868 -0.27%
2011-12 302,526,970 6,163,979 308,690,949 1.43%
2012-13 310,451,986 5,901,040 316,353,026 2.48%
2013-14 323,064,994 6,220,505 329,285,499 4.09%
In 1978,the voters of the Stale of California passed Proposition 13 which limited property taxes to a
total maximum rate of 1% based upon the assessed value of the property being taxed. Each year,
the assessed value of property may be increased by an inflation factor which is limited to a maximum
increase of 2%. With few exceptions, property is only reassessed at the time that it is sold to a new
owner. Al that point, the new assessed value is reassessed at the purchase price of the property
sold. The assessed valuation data shown above represents the only data currently available with
respect to the actual market value of taxable property and is subject to the limitations described
above. Consequently,the assessed and estimated values are the same.
Source: Orange County Auditor-Controllers Office.
68
ORANGE COUNTY SANITATION DISTRICT
Property Tax and User Fee Levies and Collections
(Dollars in Thousands)
Last Ten Fiscal Years
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$
99
2004-06 2005-06 2006-07 2W7-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
OTdal Taxand User Fee Le, ItTolal Tax and User Fee Calllentan
(1)
Total Tax Current Tax Percent Total Tax %of Total %of Pass.
Fiscal and User ERAF III and User Fee of Levy Delinquent and User Fee Collection ods Delinquencies Through
Year Fee Levy Deduction Collection Collected Collection Collection tom Delinquencies to Tax Levy Payments
2004-05 $153,187 $(16,198) $ 152,745 99.71 $ 92 $ 152,837 99.77 $ 257 0.17 $ -
200546 191,711 (16,198) 191,290 99.78 122 191,412 99.84 421 0.22 -
2006-07 209,766 - 209,206 99.73 215 209,421 99A4 560 0.27 -
2007-08 228,622 - 228,635 100.01 329 228,964 100.15 (13) (0.01) -
2008-09 254,092 - 254,106 100.01 395 254,501 100.16 (14) (0.01) -
2009-10 272,050 - 272.110 100.02 226 272,336 100.11 (60) (0.02) -
2010-11 292,646 - 292,689 100.01 120 292,809 1W06 (43) (0.01) -
2011-12 314,077 - 314,133 100.02 121 314,254 100.06 (56) (0.02) 3,116
2012-13 340,298 - 340,156 99.96 64 M,220 99.98 142 0.04 14,687
2013-14 356,607 - 356.108 99.86 76 356,184 99.88 499 0.14 7,274
Notes
(1)Upon dissolution of California redevelopment agencies during fiscal year 2011-12,property tax increment formerly remitted to OCSD by its
member city redevelopment agencies was instead deposited into the newly formed Redevelopment Property Tax Trust Fund(RPTTF)from
which the Auditor/Controller makes disbursements on behalf of the successor agencies. There is no tax levy associated with these
collections; thus,they have been excluded from the"%of Total Collection to Levye calculation.
Source:Orange County Auditor-Controller's Office.
69
ORANGE COUNTY SANITATION DISTRICT
Property Value and Construction
Covering The Entire County of Orange(1)
(Dollars In Thousands)
Last Ten Fiscal Years
Non-
Assessed Residential Residential
Property Value(2) Construction (3) Construction(3) Total
Fiscal Calendar No.of Construction
Year Value Year Value Units Value Value(3)
2004-05 $ 311,802,395 2005 $ 1,494,759 7,206 $ 2,100,436 $ 3,595,195
2005-06 342,576,859 2006 2,400,569 8,371 2,316,948 4,717,517
2006-07 381,007,391 2007 2,005,198 7,072 1,792,270 3,797,468
2007-08 412,669,779 2008 1,439,120 3,159 1,037,713 2,476,833
2008-09 428,809,224 2009 952,480 2,200 855,193 1,807,673
2009-10 422,965,596 2010 1,151,929 3,091 1,029,407 2,181,336
2010-11 420,751,575 2011 1,300,019 4,807 1,236,973 2,536,992
2011-12 424,769,642 2012 1,265,430 6,163 1,560,509 2,825,939
2012-13 432,902,274 2013 1,521,280 10,453 2,653,728 4,175,008
2013-14 447,749,156 2014 1,617,693 9,634 2,555,847 4,173,540 (4)
Notes and Data Sources
(1) -The Orange County Sanitation District services 479 square miles or 60% of the total 799 square miles
that make up the boundaries of the County of Orange.
(2)-Data Source: Orange County Auditor-Controller's Office.
(3)-Data Source: A. Gary Anderson Center for Economic Research, Chapman University.
(4)-Forecasted numbers.
70
ORANGE COUNTY SANITATION DISTRICT
Insurance in Force
As of June 30, 2014
Type Insurer Deductible Limit
All-Risk Property
Fire and Other Perils Public Entity Property $250,000 per $1 billion/occurrence
Insurance Program occurrence
(Lexington and others)
Flood Public Entity Property $100,000 per $300 million/occurrence
Insurance Program occurrence
Earthquake Not Applicable Not Applicable Self-insured
Boiler&Machinery Public Entity Property $25,000 to $100 million/occurrence
Insurance Program $350,000
(Lexington and others)
Crime Insurance National Union Fire $25,000 $5 million
Excess Security National Insurance $250,000 $30 million/occurrence
General Liability (first$10 million layer); $500,000 for and annual aggregate
Berkley National EPLI
($20 million layer
excess$10 million)
Travel&Accident Chubb Group of Insurance None Accidental Death&Dismemberment:
Companies Class 1: Elected Officials,
$500,000 per occurrence
Class 2: Employees, 10X annual
salary, up to$500,000 per occur.
Excess Workers' CSAC Excess Insurance $750,000 Unlimited statutory coverage
Compensation Authority Program Each Accident each accident,each employee
$4.25 million employer's liability
Pollution Liability CSAC Excess Insurance $100,000 $10,000,000 per loss
Authority Program
Watercraft
Liability Atlantic Specialty $15,000 $10 million
Hull&Machinery Atlantic Specialty $15,000 $1.3 million
Pollution Liability Great American Ins. Co, None $5 million
OCIP Main Basket("OCIP"=Owner Controlled Ins. Program for Construction)
Workers Comp. Liberty Mutual $250,000/occur. Unlimited statutory coverage
General Liability Liberty Mutual $250,000/occur. $2 million/occurrence;$4 million agg.
OCIP Excess Liability AIG $10,000 $100 million
OCIP Pollution Liability Liberty Surplus $250,000 $10 million
Source: Orange County Sanitation Districts Risk Management Office.
71
(THIS PAGE INTENTIONALLY LEFT BLANK)
72
ORANGE COUNTY SANITATION DISTRICT
FINANCIAL MANAGEMENT DIVISION
10844 Ellis Avenue
Fountain Valley, California 92708-7018
714.962.2411
www.oGsewers.com
06/30/14
ADMINISTRATION COMMITTEE Neetng Dare TOBt.of Dir.
11/12/14 11/19/14
AGENDA REPORTItem Number Item Number
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2015A
GENERAL MANAGER'S RECOMMENDATION
Authorize the General Manager to issue new fixed rate Certificates of Participation
(COP), to be referred to as Wastewater Refunding Revenue Obligations, Series 2015A,
in an amount sufficient to refund up to $152,990,000 of COP Series 2007B.
SUMMARY
Tax-exempt interest rates have decreased significantly during 2014 due to the lack of
municipal new issuance volume this year and a reversal of outflows from (inflows to)
municipal bond funds, along with greater bond redemptions than new issuance. This
drop in interest rates is shown in the recent rate history for the AAA GO Municipal
Market Data Index for 18-year (which reflects the average life of the potential refunding
candidates described below) maturities below:
18-Year Maturities AAA MMD
January 1, 2014 to Present
4.0%
3.5%
3.0%
2.5% V Pe
2.0%
v a v a a a a a a a v
Date
With the decline in interest rates, there is the potential opportunity to refinance the
outstanding callable COP Series 2007B maturities to reduce interest costs for the
Sanitation District.
Under current market conditions, the remaining ten callable maturities of the COP
Series 2007B, equal to $152,990,000, may be advance refunded generating in excess
Page 1 of 4
of 3.0% present value savings (the minimum percentage required by the Sanitation
District's debt policy). The savings are contingent on market conditions at the time of
the refunding sale. The outstanding amount of COP Series 2007B is currently $173.3
million which includes $20.3 million of non-callable COPS.
Approval of the recommended actions above will direct staff to begin the process of
refunding a portion of the outstanding $173.3 million COP Series 2007B debt utilizing
the assistance of Public Resources Advisory Group (PRAG), as financial advisor, and
the bond counsel firm of Fulbright & Jaworski.
PRIOR COMMITTEE/BOARD ACTIONS
September 2014 — Adopt Resolution No. OCSD 14-12, authorizing the execution and
delivery by the Orange County Sanitation District of an Installment Purchase
Agreement, a Trust Agreement and a Continuing Disclosure Agreement in connection
with the execution and delivery of Orange County Sanitation District Revenue
Refunding Certificate Anticipation Notes, Series 2014B, authorizing the execution and
delivery of such Notes evidencing principal in an aggregate amount of not to exceed
$135,000,000, approving a Notice of Intention to Sell, authorizing the distribution of an
Official Notice Inviting Bids and an Official Statement in connection with the offering and
sale of such Notes and authorizing the execution of necessary documents and related
actions.
June 2014 — Adopt Resolution No. OCSD 14-08, authorizing the execution and delivery
by the District of an Installment Purchase Agreement, a Trust Agreement, an Escrow
Agreement and a Continuing Disclosure Agreement in connection with the execution
and delivery of Orange County Sanitation District Wastewater Refunding Revenue
Obligations, Series 2014A, authorizing the execution and delivery of such Revenue
Obligations evidencing principal in an aggregate amount of not to exceed $225,000,000,
approving a Notice of Intention to Sell, authorizing the distribution of an Official Notice
Inviting Bids and an Official Statement in connection with the offering and sale of such
Revenue Obligations and authorizing the execution of other necessary documents and
related actions.
ADDITIONAL INFORMATION
The Sanitation District currently has eleven series of debt issuances outstanding in the
par amount of $1.20 billion. The table below lists each issuance, the outstanding
amount, and the interest rate mode.
Outstanding Interest Rate
Par Amountq) Mode
eries 2014B CANs(4) $ 120,850,000 Fixed Rate (two-year)
eries 2014A Refunding(7) 85,090,000 Fixed Rate
eries 2012B Refunding(2) 66,395,000 Fixed Rate
Page 2 of 4
eries 2012A Refunding(3) 100,645,000 Fixed Rate
eries 2011A Refunding(2X3) 121,290,000 Fixed Rate
eries 20100) 157,000,000 Fixed Rate
eries 2010Atfi) 80,000,000 Fixed Rate
eries 2009A Refunding(3) 184,090,000 Fixed Rate
eries 2008B Refunding(6) 17,315,000 Fixed Rate
eries 2007B(3) 173,325,000 Fixed Rate
eries 2007A Refunding(3) 92,385,000 Fixed Rate
Total : $1,198,385,000
(1) As of November 1,2014
(2) Refunded a portion of Series 20M
(3) Refunded a portion of Sodas 2003
(4) Sodas 2014B are fixed two-year certificate of anticipation notes (CANS), that refunded the
Series 2013A CANS (one-year), that refunded the Series 2012C CANS, that refunded the
Series 2011B CANS, that refunded the 2010E CANS, that refunded the Series 2009B
CANS, that refunded the 2008C CANS that were issued to refund the Series 2006 Daily
Variable Rate that were supported by a weak liquidity facility bank.
(5) New money debt issue
(6) Sedes 2008B refunded the Series 1993 Synthetic Variable-to-Fixed Rate Debt issues that
were supported by a failing insurance provider. Series 1993 and 1992 refunded the Series
1986 and a portion of the Series W COPs.
(7) Refunded a portion of Series 2007B
Refunding Strategv
Depending on market conditions, staff is proposing to refund $152,990,000 of COP
Series 2007B maturing in years 2028 through 2037 with annual coupon rates of 5.00%,
as shown in the chart below. A refunding of these maturities would produce $16.2
million in present value savings (10.6% of refunded par) in the current market.
Maturity Princi al Am Call Da
02/01/28 $ 12,165,000 5.00% 02/01/17
02/01/29 12,770,000 5.00% 02/01/17
02/01/30 13,410,000 5.00% 02/01/17
02/01/31 14,080,000 5.00% 02/01/17
02/01/32 14,785,000 5.00% 02/01/17
02/01/33 15,525,000 5.00% 02/01/17
02/01/34 16,300,000 5.00% 02/01/17
02/01/35 17,115,000 5.00% 02/01/17
02/Ol/31 17,970,000 5.00% 02/01/11
02/01/37 18,870:000 5.00% 02/01/97
Total : $ 152,990,000
Page 3 of 4
Timeline
Since the proposed refunding is a fixed-rate debt issuance, staff is proposing to issue
the refunding through a competitive sale because it is the most expeditious way to
access the market and it is expected to provide the lowest interest cost for this given
structure.
➢ Board approval of legal and disclosure documents
December ➢ Financing Corporation approval of legal and
disclosure documents
➢ Rating Agency discussions, if any
➢ Publish Notice of Intention to Sell
January ➢ Marketing and Sale through a Competitive Sale
Process
February ➢ Closing
➢ Begin debt administration
All costs involved with the refunding, including costs for PRAG and Fulbright & Jaworski
will be paid from the proceeds of the new refunding issue.
CEQA
N/A
BUDGET/PURCHASING ORDINANCE COMPLIANCE
N/A
ATTACHMENT
N/A
Page 4 of 4
ADMINISTRATION COMMITTEE Meeting Dare To ad.of Dir.
u/tz/t4
AGENDA REPORT Item Number Item Number
e
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Robert Ghirelli, Assistant General Manager
SUBJECT: ANNUAL STRATEGIC PLAN UPDATE & GENERAL MANAGER'S WORK
PLAN OVERVIEW
GENERAL MANAGER'S RECOMMENDATION
Informational Only.
SUMMARY
Strategic Plan - In November 2013, the Board of Directors adopted the 2014-2019
5-Year Strategic Plan after going through a collaborative effort to develop the Plan that
contains the Board of Director's new Vision, articulates the values of the organization
through a set of core values, outlines the risks facing the Sanitation District, lays out a
series of targets that define our Levels of Service, and a number of strategic goals
designed to support the service levels.
General Managers Work Plan — In September, 2014 the Board of Directors approved
the FY 2014-2015 General Manager's Work Plan. The Board has requested an
overview of the plan that was approved.
PRIOR COMMITTEE/BOARD ACTIONS
Strategic Plan
September 2013 - The Board of Directors participated in a Strategic Planning
Workshop to create a new Board Vision and review past strategic
goals and progress.
October 2013 - The Board of Directors participated in a second Strategic Planning
Workshop to review recommended strategic goals.
November 2013 - The Board of Directors Adopted the 2014-2019 5-Year Strategic
Plan.
FY 14/15 General Manager's Work Plan
August 2014 - Presented the proposed General Manager's FY 2014 -15 Work
Plan to the Steering Committee for review.
Page 1 or 2
September 2014 - The Board of Directors approved the Fiscal Year 2014-2015
General Manager's Work Plan.
ADDITIONAL INFORMATION
Staff will provide an update on progress made with the Strategic Goals and levels of
service and provide an overview of the FY 14/15 General Manager's Work Plan.
CEQA
N/A
BUDGET/PURCHASING ORDINANCE COMPLIANCE
N/A
ATTACHMENT
None
Page 2 of 2
ADMINISTRATION COMMITTEE Neebng Dare To ad.of Dir.
11,12,14 --
AGENDA REPORT Item Number Item Number
9
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Robert Ghirelli, Assistant General Manager
SUBJECT: INFORMATIONAL PRESENTATION ON THE LEGISLATIVE AFFAIRS
PROGRAM
GENERAL MANAGER'S RECOMMENDATION
Information Only.
SUMMARY
As part of the ongoing Board Member Orientation effort, OCSD staff will provide a
general presentation on specific topics that the Board of Directors requested via a survey
conducted in October 2013. Each month a different topic will be presented to both the
Operations Committee and Administration Committee.
This presentation will provide a brief and general overview of the Legislative Program.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
The following informational presentations have been provided to both Operations and
Administration Committees:
• February - OCSD Budget and Finances
• March -Water Quality and OCSD's Disinfection Program
• April - Community Outreach Program
• May- Reserves, Investments and Financial Policies
• June - Collections
• July- Procurement Process
• September- Cessation of Disinfection of Ocean Discharge
• October- Wastewater Treatment
CEQA
N/A
Page 1 of 2
BUDGET/PURCHASING ORDINANCE COMPLIANCE
N/A
ATTACHMENT:
None
Page 2 of 2
ORANGE COUNTY SANITATION DISTRICT
Agenda
Terminology Glossary
Glossary of Terms and Abbreviations
AQMD Air Quality Management District
ASCE American Society of Civil Engineers
BOD Biochemical Oxygen Demand
CARB California Air Resources Board
CASA California Association of Sanitation Agencies
CCTV Closed Circuit Television
CEQA California Environmental Quality Act
CRWQCB California Regional Water Quality Control Board
CWA Clean Water Act
CWEA California Water Environment Association
EIR Environmental Impact Report
EMT Executive Management Team
EPA U.S. Environmental Protection Agency
FOG Fats, Oils, and Grease
FSSD Facilities Support Services Department
gpd Gallons per day
GWR System Groundwater Replenishment System (also called GWRS)
ICS Incident Command System
IERP Integrated Emergency Control Plan
LOS Level of Service
MGD Million gallons per day
NACWA National Association of Clean Water Agencies
NPDES National Pollutant Discharge Elimination System
NWRI National Water Research Institute
O&M Operations and Maintenance
OCCOG Orange County Council of Governments
OCHCA Orange County Health Care Agency
OCSD Orange County Sanitation District
OCWD Orange County Water District
GOBS Ocean Outfall Booster Station
OSHA Occupational Safety and Health Administration
POTW Publicly Owned Treatment Works
ppm Parts per million
RFP Request For Proposal
RWQCB Regional Water Quality Control Board
SARFPA Santa Ana River Flood Protection Agency
Glossary of Terms and Abbreviations
SARI Santa Ana River Inceptor
SARWQCB Santa Ana Regional Water Quality Control Board
SAWPA Santa Ana Watershed Project Authority
SCADA Supervisory Control and Data Acquisition system
SCAP Southern California Alliance of Publicly Owned Treatment Works
SCAQMD South Coast Air Quality Management District
SOCWA South Orange County Wastewater Authority
SSMP Sanitary Sewer Management Plan
SSO Sanitary Sewer Overflow
SWRCB State Water Resources Control Board
TDS Total Dissolved Solids
TMDL Total Maximum Daily Load
TSS Total Suspended Solids
WDR Waste Discharge Requirements
WEF Water Environment Federation
WERF Water Environment Research Foundation
Activated-sludge process — A secondary biological wastewater treatment process where bacteria
reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved
nutrients in the wastewater.
Benthos— The community of organisms, such as sea stars, worms and shrimp, which live on, in, or
near the seabed, also know as the benthic zone.
Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes
decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in
water.
Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the
wastewater treatment process. This high-quality product can be recycled as a soil amendment on
farm land or further processed as an earth-like product for commercial and home gardens to improve
and maintain fertile soil and stimulate plant growth.
Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets.
Also includes treatment improvements, additional capacity, and projects for the support facilities.
Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also
occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common
bacteria in wastewater.
Collections system — In wastewater, it is the system of typically underground pipes that receive and
convey sanitary wastewater or storm water.
Certificate of Participation (COP) —A type of financing where an investor purchases a share of the
lease revenues of a program rather than the bond being secured by those revenues.
Glossary of Terms and Abbreviations
Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic
wastewater contaminants.
Dilution to Threshold (D!f) — the dilution at which the majority of the people detect the odor
becomes the DrT for that air sample.
Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane,
nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse
effect").
Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively
responds to Southern California's current and future water needs. This joint project between the
Orange County Water District and the Orange County Sanitation District provides 70 million gallons a
day of drinking quality water to replenish the local groundwater supply.
Levels of Service (LOS)—Goals to support environmental and public expectations for performance.
NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been
found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide
with extra ultra-violet treatment.
National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water
Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S.
Environmental Protection Agency (EPA). NBP is committed to developing and advancing
environmentally sound and sustainable biosolids management practices that go beyond regulatory
compliance and promote public participation in order to enhance the credibility of local agency
biosolids programs and improved communications that lead to public acceptance.
Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility.
Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant.
Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million
gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the
ocean for disposal, after treatment.
Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial
wastewater. Combined sewers carry both wastewater and urban run-off.
South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that
develops plans and regulations designed to achieve public health standards by reducing emissions
from business and industry.
Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process,
where bacteria and other microorganisms consume dissolved nutrients in wastewater.
Sludge—Untreated solid material created by the treatment of wastewater.
Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater.
Trickling filter — A biological secondary treatment process in which bacteria and other
microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in
wastewater as it trickles over them.
Glossary of Terms and Abbreviations
Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm
drains, rivers, lakes, and oceans.
Wastewater—Any water that enters the sanitary sewer.
Watershed —A land area from which water drains to a particular water body. OCSD's service area is
in the Santa Ana River Watershed.