HomeMy WebLinkAbout12-10-2014 Administration Committee Agenda Orange County Sanitation District SANITATION msrRicr Wednesday, December 10, 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:
Municipal Information Systems Association of California (MISAC) Excellence
Award
CONSENT CALENDAR:
1. Approve Minutes of the November 12, 2014, Administration Committee Meeting.
2. Recommend to the Board of Directors to:
A. Authorize an additional one-year renewal period to Service agreements
with Project Partners, Inc. and Psomas for Enterprise Information
Management On-Call Staffing, Specification No. S-2011-5056D, for a total
amount not to exceed $211,000 for the renewal period; and
B. Approve a contingency of$21,100 (10%).
12/10/14 Administration Committee Agenda Page 1 of
3. Recommend to the Board of Directors to:
Authorize purchases of telecommunications services using the County of Orange
cooperative agreement #N1000008297/MA-017-1001150 with TWTelecom/
Leve13, for one year commencing November 14, 2014 through November 13,
2015, for a total amount not to exceed $240,000 in accordance with Ordinance
OCSD44, Section 2.03(B) Cooperative Purchases.
4. Recommend to the Board of Directors to:
Authorize purchases of information technology computer, peripheral equipment
and services using the U.S. General Services Agreement (GSA) IT Schedule 70
commencing December 22, 2014 through December 31, 2019, for a total amount
not to exceed $500,000, in accordance with Ordinance OCSD44, Section
2.03(B) Cooperative Purchases.
5. Recommend to the Board of Directors to:
Authorize purchases of information technology consulting services using the City
of Richland, Washington cooperative agreement#13-068 with ShareSquared Inc.
Commencing January 5, 2015 through June 30, 2016, for a total amount not to
exceed $300,000, in accordance with Ordinance OCSD-44, Section 2.03(B)
Cooperative Purchases.
6. Recommend to the Board of Directors to:
A. Adopt Resolution No. OCSD14-XX entitled, "A Resolution of the Board of
Directors of the Orange County Sanitation District authorizing the
execution and delivery by the District of an Installment Purchase
Agreement, a Trust Agreement, an Escrow Agreement and a Continuing
Disclosure Agreement in connection with the execution and delivery of
Orange County Sanitation District Wastewater Refunding Revenue
Obligations, Series 2015A, authorizing the execution and delivery of such
Revenue Obligations evidencing principal in an aggregate amount of not
to exceed $150,000,000, approving a Notice of Intention to Sell,
authorizing the distribution of an Official Notice Inviting Bids and an Official
Statement in connection with the offering and sale of such Revenue
Obligations and authorizing the execution of necessary documents and
related actions;" and,
B. That the Orange County Sanitation District Financing Corporation approve
the documents supporting and authorizing the Revenue Obligations in an
aggregate amount not to exceed $150,000,000.
12/10/14 Adminisfation Commiftee Agenda Page 2 of 4
7. Recommend to the Board of Directors to:
Adopt Resolution No. OCSD 14-XX, entitled "A Resolution of the Board of
Directors of the Orange County Sanitation District, Authorizing the Orange
County Sanitation District's Treasurer to Invest and/or Reinvest District's Funds;
Adopting District's Investment Policy Statement and Performance Benchmarks
for calendar year 2015; and Repealing Resolution No. OCSD 14-10".
NON-CONSENT CALENDAR:
None.
INFORMATION ITEMS:
8. Geographic Information Systems at OCSD
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA
ITEMS, IF ANY:
ADJOURNMENT:
The next Administration Committee meeting is scheduled for Wednesday, February 11,
2015 at 5:30 p.m.
1210A4 Administration Committee Agenda Page 3 of 4
Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability
related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at
(714) 593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability
and the type of accommodation requested.
Agenda 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
mavalalglocsd.com
For any questions on the agenda,Committee members may contact staff at:
General Manager James Herberg (714)593-7300 iherberofgocsd.com
Assistant General Manager Bob Ghirelli (714)593-7400 rohirelli0ocsd.com
Director of Finance and Lorenzo Tyner (714)593-7550 Itvnerfrpocsd.com
Administrative Services
Director of Human Resources Jeff Reed (714)593-7144 ireeddocsd.com
12/10/14 Administration Committee Agenda Page 4 of 4
ITEM NO. 1
MINUTES OF THE REGULAR MEETING OF
THE ADMINISTRATION COMMITTEE
Orange County Sanitation District
Wednesday, November 12, 2014, at 5:30 P.M.
A regular meeting of the Administration Committee of the Orange County Sanitation
District was held on November 12, 2014, at 5:30 p.m., in the Sanitation District's
Administration Building.
Board Chair, Tom Beamish, thanked Brad Reese for his years of service to the
Sanitation District. In light of Director Reese's upcoming departure from the District,
Chair Beamish has appointed Director John Withers as the new Administration
Committee Chair, and Director Keith Curry as the new Administration Committee Vice-
Chair.
Committee Chair Withers assumed his new position as Committee Chair.
Director Gene Hernandez led the Flag Salute.
A quorum was declared present, as follows:
COMMITTEE MEMBERS PRESENT: STAFF PRESENT:
John Withers, Chair Jim Herberg, General Manager
David Benavides Bob Ghirelli, Assistant General Manager
Joe Carchio Lorenzo Tyner, Director of Finance
Tyler Diep & Administrative Services
James Ferryman Jeff Reed, Director of Human Resources
Gene Hernandez Rob Thompson, Director of Engineering
Peter Kim Ed Torres, Director of Operations and
Prakash Narain Maintenance
Janet Nguyen Maria Ayala, Clerk of the Board
Brad Reese Mike White
Teresa Smith Jennifer Cabral
Tom Beamish, Board Chair Rich Castillon
John Nielsen, Board Vice-Chair Norbert Gaia
Al Garcia
COMMITTEE MEMBERS ABSENT: Rich Spencer
Steven Choi
Keith Curry, Vice-Chair OTHERS PRESENT:
Omar Sandoval, General Counsel
Jeff Altshuler, McGladrey LLP
Noah Daniels, McGladrey LLP
Ed Soong, Public Resources Advisory
Group
Heather Stratman, Townsend Public Affairs
11112J2014 Administration Committee Minutes Page 1 of 7
PUBLIC COMMENTS:
None.
REPORT OF COMMITTEE CHAIR:
Committee Chair Withers did not provide a report.
REPORT OF GENERAL MANAGER:
General Manager, Jim Herberg, announced that Rob Thompson, Director of
Engineering, will be providing a quick update on a recent spill that occurred in Newport
Beach.
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
October 8, 2014 Administration Committee Meeting.
AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez,
Kim, Narain, Nielsen, Reese, and Withers
NOES: None
ABSTENTIONS: None
ABSENT: Choi, Curry, Nguyen, and T. Smith
2. MOVED, SECONDED, AND DULY CARRIED to: 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.
11112J2014 Administration Committee Minutes Page 2 of 7
AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez,
Kim, Narain, Nielsen, Reese, and Withers
NOES: None
ABSTENTIONS: None
ABSENT: Choi, Curry, Nguyen, and T. Smith
3. MOVED, SECONDED, AND DULY CARRIED to: 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.
AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez,
Kim, Narain, Nielsen, Reese, and Withers
NOES: None
ABSTENTIONS: None
ABSENT: Choi, Curry, Nguyen, and T. Smith
4. MOVED, SECONDED, AND DULY CARRIED to: 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.
AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez,
Kim, Narain, Nielsen, Reese, and Withers
NOES: None
ABSTENTIONS: None
ABSENT: Choi, Curry, Nguyen, and T. Smith
11/12/2014 Administration Committee Minutes Page 3 of 7
5. MOVED, SECONDED, AND DULY CARRIED to: 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.
AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez,
Kim, Narain, Nielsen, Reese, and Withers
NOES: None
ABSTENTIONS: None
ABSENT: Choi, Curry, Nguyen, and T. Smith
NON-CONSENT CALENDAR:
Chair Withers announced that Agenda Item #7 would be addressed first.
Mr. Tyner announced that this agenda item deals with the refunding of some of the
District's existing debt.
7. MOVED, SECONDED, AND DULY CARRIED to: 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.
AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez,
Kim, Narain, Nguyen, Nielsen, Reese, T. Smith and Withers
NOES: None
ABSTENTIONS: None
ABSENT: Choi, Curry, Nguyen, and T. Smith
11/12/2014 Administration Committee Minutes Page 4 of 7
Mr. Tyner announced that Agenda Item #6 deals with the District's annual financial
report. Mr. Mike White, Controller, will be providing a staff presentation, and a brief
report by the auditors will follow.
Mr. White gave an informational PowerPoint presentation on the District's
Comprehensive Annual Financial Report that included information on the different
financial measurements such as: the change in net position, change in cash and
investments, and change in cost.
Director T Smith arrived at 5:35 p.m.
Director Nguyen arrived at 5:53 p.m.
Jeff Altshuler, auditor from McGladrey LLP, provided a summary of the firm's audit
findings. He made reference to the report included in the agenda package, attachment
#1, Report to the Administration Committee dated October 30, 2014.
Director Smith had questions regarding areas identified for risk of potential fraud. Mr.
Tyner and Mr. Altshuler addressed the questions, responding that there are both
internal District procedures to identify the risk for fraud; and also the audit procedures
conducted by the firm that could also identify risk of fraud.
Director Kim had questions regarding the OPEB funding and when the District might
pay this off completely. Mr. White responded by explaining about the different elements
involved with paying off this obligation.
6. MOVED, SECONDED, AND DULY CARRIED to: 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.
AYES: Beamish, Benavides, Carchio, Diep, Ferryman, Hernandez,
Kim, Narain, Nguyen, Nielsen, Reese, T. Smith and Withers
NOES: None
ABSTENTIONS: None
1111212014 Administration Committee Minutes Page 5 of 7
ABSENT: Choi and Curry
INFORMATION ITEMS:
8. Annual Strategic Plan Update and General Managers Work Plan Overview
General Manager Herberg provided an informative PowerPoint presentation on
the District's Five-Year (FY 2014-19) Strategic Plan. Mr. Herberg explained: the
process of the formulation and adoption of the strategic plan; District's vision and
mission statements; and gave a status report on each of the eight goals
identified in the District's Strategic Plan.
Mr. Herberg also provided a review of his annual General Managers work plan,
and the various action plans in place and progress of these 15 items.
Tyler Diep departed the meeting at 6:27 p.m.
9. Legislative Affairs Program
Assistant General Manager, Dr. Bob Ghirelli, introduced this report as part of a
series of information presentations being provided to the committees. Dr. Ghirelli
explained that the District's legislative affairs program is supported by Townsend
Public Affairs in Sacramento, and Eric Sapirstein in Washington DC. He also
explained the different elements of the legislative program that include: lobbyists
identifying key legislation that either supports or hinders the efforts of the District;
District sponsored legislation; and, federal and state funding opportunities. The
District also adopts an annual legislative platform that outlines the District's
legislative agenda and goals for the year. Dr. Ghirelli also provided information
on the different agencies that the District works closely with.
Dr. Ghirelli introduced Heather Stratman, from Townsend Public Affairs, who
spoke about the District's legislative program successes during 2014 that
included information on the District's impact by: SB 946, SB 1390, AS 371, etc.
Ms. Stratman also provided brief information on what some of the District's
efforts might be moving forward in 2015 with regards to the Water Bond, future
funding, timelines, outreach and communication efforts.
OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA
ITEMS, IF ANY:
Director Nguyen shared concerns over the recent Governors visit, while campaigning
for the Water Bond, and the actions that followed that event wherein comments
regarding her candidacy were made. Director Nguyen asked that rules be implemented
so that this type of action and/or treatment does not happen in the future on public
11/12/2014 Administration Committee Minutes Page 6 of 7
property.
Ms. Stratman did explain that the Water District would be seeking full reimbursement for
all costs associated with that event to ensure that no public funding was spent.
Mr. Omar Sandoval, General Counsel, also explained how it is usually advised that
these types of events not be held on District premises.
Director Benavides departed the meeting at 6:52 p.m.
Mr. Thompson, Director of Engineering, briefly reported on the recent sewage spill in
Newport Beach on November 1" of about 3,000 to 5,000 gallons. Mr. Thompson
explained the different factors that caused the spill and the District's action plan to
immediately address the spill and plans moving forward with current repair and
construction.
ADJOURNMENT:
Committee Chair Withers declared the meeting adjourned at 6:55 p.m., to the next
regularly scheduled meeting of December 10, 2014 at 5:30 p.m.
Submitted by:
Maria E. Ayala
Clerk of the Board
11112J2014 Administration Committee Minutes Page 7 of 7
ADMINISTRATION COMMITTEE Neeing Dare TOBA.Of Dir.
tz/JD/ta tz/v/ta
AGENDA REPORT Item Number Item Number
z
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director, Finance and Administrative Services
SUBJECT: RENEW ON-CALL SERVICE AGREEMENTS
GENERAL MANAGER'S RECOMMENDATION
A. Authorize an additional one-year renewal period to Service agreements with
Project Partners, Inc. and Psomas for Enterprise Information Management On-
Call Staffing, Specification No. S-2011-50513D, for a total amount not to exceed
$211,000 for the renewal period; and
B. Approve a contingency of$21,100 (10%).
SUMMARY
Enterprise Information Management (EIM), a business unit in OCSD's Information
Technology Division, is responsible for facility records management and enterprise data
quality and systems. The EIM group also provides Computer Assisted Drawing (CAD),
Geographic Information System (GIS), and Engineering Library support at various
stages throughout a project's lifecycle. As a result of cyclical workloads, outside on-call
staffing support is required.
PRIOR COMMITTEE/BOARD ACTIONS
December 2011 — Establish an on-call service agreement with Project Partners, Inc.
and Psomas with two one-year renewals.
ADDITIONAL INFORMATION
The original bid specification allows for up to three one-year renewals. There was a
typographical error in the original minute order that only addressed the first two years.
This action corrects this error and exercises the third one-year renewal.
CEQA
N/A
Page 1 of 2
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 SP-15,
Geographic Information System.
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the
complete agenda package:
Draft amendments
Page 2 of 2
Return to Mende Report
AMENDMENTNO. 1
To Service Agreement
Enterprise Information Management(EIM) On-Call Staffing
S-2011-505BD
THIS AMENDMENT TO THE AGREEMENT is made and entered into, to be effective January
1, 2015, by and between ORANGE COUNTY SANITATION DISTRICT hereinafter referred to as
"OCSD" with main offices located at 10844 Ellis Avenue, Fountain Valley, California 92708-7018 and
PROJECT PARTNERS, INC. with a principal business at 23195 La Cadena Drive, Suite 101, Laguna
Hills, CA 92653 (hereinafter referred to as " Service Provider") collectively referred to as the "Parties".
WHEREAS, OCSD and Service Provider executed, delivered and entered into the Agreement
between OCSD and Service Provider, the effective date of which is January 5, 2012 ('the
Agreement"); and
WHEREAS, the Parties wish to amend the Agreement to make certain modifications which
shall be called Amendment No. 1 ("Amendment'); and
WHEREAS, on December 17, 2014, the Board of Directors of OCSD, by minute order,
authorized execution of this Amendment between OCSD and Service Provider; and
WHEREAS, the Parties to the Agreement desire that this Amendment be incorporated into the
Agreement and become a part thereof from the beginning; and
WHEREAS, the Parties desire that the Agreement as modified by this Amendment shall
constitute the sole and entire Agreement among the Parties;
NOW, THEREFORE, in consideration of these premises and the mutual covenants contained
herein, the Parties agree to amend the Agreement to renew for one additional one-year period
commencing January 1, 2015 and continuing through December 31, 2015.
Except as expressly amended above, the Agreement will remain unchanged and in full
force and effect.
IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this
Amendment No. 1 to be signed by the duly authorized representatives as of the day and year last
signed below.
ORANGE COUNTY SANITATION DISTRICT PROJECT PARTNERS, INC.
By:
Contracts/Purchasing Manager Date Date
Name:
Chairman, Board of Directors Date
Title:
Clerk of the Board Date
12/3/14
Return to Mende Report
AMENDMENTNO. 1
To Service Agreement
Enterprise Information Management(EIM) On-Call Staffing
S-2011-505BD
THIS AMENDMENT TO THE AGREEMENT is made and entered into, to be effective January
1, 2015, by and between ORANGE COUNTY SANITATION DISTRICT hereinafter referred to as
"OCSD" with main offices located at 10844 Ellis Avenue, Fountain Valley, California 92708-7018 and
PSOMAS with a principal business at 3 Hutton Centre Drive, Suite 200, Santa Ana, CA 92707
(hereinafter referred to as " Service Provider") collectively referred to as the "Parties".
WHEREAS, OCSD and Service Provider executed, delivered and entered into the Agreement
between OCSD and Service Provider, the effective date of which is January 5, 2012 ('the
Agreement"); and
WHEREAS, the Parties wish to amend the Agreement to make certain modifications which
shall be called Amendment No. 1 ("Amendment'); and
WHEREAS, on December 17, 2014, the Board of Directors of OCSD, by minute order,
authorized execution of this Amendment between OCSD and Service Provider; and
WHEREAS, the Parties to the Agreement desire that this Amendment be incorporated into the
Agreement and become a part thereof from the beginning; and
WHEREAS, the Parties desire that the Agreement as modified by this Amendment shall
constitute the sole and entire Agreement among the Parties;
NOW, THEREFORE, in consideration of these premises and the mutual covenants contained
herein, the Parties agree to amend the Agreement to renew for one additional one-year period
commencing January 1, 2015 and continuing through December 31, 2015.
Except as expressly amended above, the Agreement will remain unchanged and in full
force and effect.
IN WITNESS WHEREOF, intending to be legally bound, the Parties hereto have caused this
Amendment No. 1 to be signed by the duly authorized representatives as of the day and year last
signed below.
ORANGE COUNTY SANITATION DISTRICT PSOMAS
By:
Contracts/Purchasing Manager Date Date
Name:
Chairman, Board of Directors Date
Title:
Clerk of the Board Date
12/3/14
ADMINISTRATION COMMITTEE Neeing Dare TOBA.Of Dir.
JVJO114 12/17/14
AGENDA REPORT Item Number Item Number
3
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director, Finance and Administrative Services
SUBJECT: COOPERATIVE PROCUREMENT WITH THE COUNTY OF ORANGE
GENERAL MANAGER'S RECOMMENDATION
Authorize purchases of telecommunications services using the County of Orange
cooperative agreement #N1000008297/MA-01 7-1 001 1 50 with TWTelecom/Level3, for
one year commencing November 14, 2014 through November 13, 2015, for a total
amount not to exceed $240,000 in accordance with Ordinance OCSD44, Section
2.03(B) Cooperative Purchases.
SUMMARY
In order to establish and maintain telecommunications and internet services, the Orange
County Sanitation District's (OCSD) Information Technology division has needs to
maintain existing services and add services to existing pumping facilities. Such
requirements have been forecasted based upon current and projected project demands.
OCSD desires to select the cooperative agreement #N1000008297/MA-017-1001150
as established by the County of Orange as the lead agency, naming TWTelecom/Level3
as the primary provider telecommunication services based on contract pricing, breadth
of service offerings, availability and technical expertise.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
The County of Orange initiated an agreement for telecommunications services with
Time Wamer Telecom Holdings Inc. in November of 2006. The agreement was
amended and approved by the County of Orange Board of Supervisors in November of
2014 to extend the agreement through November 13, 2015.
OCSD has been using this cooperative agreement since April, 2009.
Page 1 of 2
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
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the
complete agenda package and attachments:
Cooperative Agreement between County of Orange and TWTelecom/Level3
Page 2 of 2
Attachment A
County oforange Contract N IODOOO8297I MA-01740011150 .i
tw telecom holdings inc.
AMENDMENT NO.I
TO
CONTRACT NUMBER N1000008297 AS MA-017-10011150
FOR
WIDE AREA NETWORK TRANSPORT SERVICES
FOR
ORANGE COUNTY
t
This Amendment Number Eleven(hereinafter"Amendment")is made and entered into by the County of
Orange,a political subdivision of the State of California,(hereinafter referred to as"County")and tw telecom
holdings inc„with its principal place of business at 10475 Park Meadows Drive,Littleton,CO$0124,
(hereinafter referred to as"Contractor"),which may be referred individually as"Party"or collectively as
"Parties".
WHEREAS,County and Contractor executed Contract N 1000008297 for wide area network transport
services for a three-year term commencing November 13,2006,hemiirafter"Contract';and
WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract;and
WHEREAS,the Parties issued Amendment Number Two to renew the Contract as number MA-017-
I00I I150 for an additional year effective November 14,2009 through and including November 13,2010,and
amend Attachment B to reflect amended pricing;
WHEREAS,the Parties issued Amendment Three to extend the Contract for an additional year effective
November 14,2010 through and including November 13,2011,amend Attachment B to reflect amended
pricing,and change vendor name from Time Warner Telecom Holdings,Inc.to TW Time Warner Holdings,
Inc.;
WHEREAS,the Parties issued Amendment Four to extend the Contract for an additional year effective
November 14,2011 through and including November 13,2012,reduce the contract amount by 10%for the
period effective July 1,2011 through and including November 13,2012;and change vendor name to tw telecom
holdings inc.;
WHEREAS,the Parties issued Amendment Five to increase internal band width in the amount of
$32,305.00 effective September I,2011 through November 13,2012;
WHEREAS,the Parties issued Amendment Six to upgrade the data circuit between Solano Disaster
Recovery Site and the County Wide Area Network in the amount of$71,957.20 effective November 1,2011
through November 13,2012;
WHEREAS,the Parties issued Amendment Seven to extend the Contract for an additional year effcetive
November 14,2012 through and including November 13,2013;
W l IEREAS,the Parties issued Amendment Eight to increase internet band width From 300mbps to
350mbps in the amount of$11,748.00 effective December 19,2012 through November 13,2013;
WI IEREAS,the Parties issued Amendment Nine to extend the Conti-act for an additional year effective
November 14,2013 through and including November 13,2014,and removed the Contract's"Termination
Liability"language;
Page I of
I
Attachment A
County ofOmngc Contract N100000g2971 MA-017-10011150
nv lelocam holdings ine
WHEREAS,the Parties issued Amendment Ten to provide a"Burstable Line"option for the intemet
services provided under the Contract;
WHEREAS,the Parties desire to issue Amendment Eleven to remove the Internet Services provided
under the Contract,and to extend the Contract for an additional year effective November 14,2014 through and
including November 13,2015;
NOW,THEREFORE, in consideration of the mutual obligations set forth herein,the Parties agree as
follows:
1. The term of contract NI000008297,now MA-017-10011150, is extended for a period of one year,
thereby amending the Contract period effective November 14,2014 through and including
November 13,2015,unless otherwise terminated by County.
2. The total Contract Amount for the period November 14,2014 through November 13,2015 shall not
exceed$392,001.00.
3. Attachment A Scope of Wark for Wide Area Network Tmnsport Services is amended to remove the
Internet Services from the Scope of Work,and a revised true and accurate copy of the amended
Attachment A Scope of Work is attached hereto.
4. Atmclunent B Cost/Compensation for Contractor Services is amended to remove the Internet
Services fi one the Cost/Compensation,and a revised five and accurate copy of the amended
Attachment B Cost/Compensation is attached hereto.
Except as otherwise expressly set forth herein,all terms and conditions contained in the Contract and its
amendments are incorporated by this reference as if fully set forth herein and shall remain in force and
effect as amended herein.
(Amendment Signatures an Following Pugo)
Page 2 of 9
Attachment A
CeuntyafOrange C mract N1000008297/MA-
in,telecom holdings ine
0 01]-100111J0
In WITNESS WHEREOF,the patties hereto have executed this Amendment on the dates shown opposite their
respective signatures below:
Iry tolecam holdings inch �t1 /�///1�/f/�
DATE: 9 �7 SIGNATURE: -U / V v�
PRINT NAME: 14
tf TITLE: Ly
DATE: 3 I I SIGNATURE*: IlBN��
PRINT NAME:Jonathan Dhillon
TITLE:Assistant Secretary
*If the contracting party is a corporation,the document must be signed by Me corporate offices.The fist signature must
be either the Chairmen of the Board,President or any Vice President,The second signature must be the secretary,an
aaslsmat secretary,the Chief Financial Officer or my as bm"t aenawars.in theahernadve,a single corporate sigoatore is
acceptable when accompanied by a corporate document demonstrating the legal authority of the signature to bind the
company.
COUNTY OF ORANGE
A political Subdivision of the State of California
SIGNATURE:
PRINT NAME;
TITLE:
P
TI.Abbot��D:ep-uty
Fn 1
Approved by Board of Supervisors on:
Page 3 of 9
Attachment A
County ofOmnge Commot NIDOOD08297 IMA-017-10011150
tw telecom holdings Inc.
ATTACHMENT A
SCOPE OF WORK
FOR
WIDE AREA NETWORKTRANSPORT SERVICES
A. SERVICE LEVELS
Contractor shall provide transport services with highavailability and minimum downtime.Service Level Agreements
(SLAs)are a critical component of any transport service to assure that negotiated services levels are contractually
adhered to by tie Convector.The County requires a minimum of 99,99%up time on all proposed circuits.The
Contractor will ensure that available bandwidth or throughput will not drop below 90%of declared circuit capacity at
any time on any proposed circuit.The Contractor will further produce reports to the County showing bandwidth
utilization and availability of throughput on an hourly,daily,weekly,monthly,and yearly basis.These reports will be
available on-line mid allow for on-demand bandwidth reporting by County staff at any time.Scheduled impact to
transport services needs to be documented and sent to designated County contacts five(5)working days in advance.
The County roust be notified within 30 minutes of any outages thmugh a pre-defined County escalation plan.All
SLAs will be actively enforced by the County. Fee reductions Specified in Attachment B may result from
Contractor's failure to notify County of planned and unplanned service interruptions,reduction in available circuit
capacity,delays in repair or any other disruption of service without regard to the county's actual monetary loss from
such disruptions.
B. SECURITY
The County Enterprise Network requires that Contractor provides detailed documentation outlining security
policestprocedmes,"Best Practices",and technologies that are implemented in the proposed WAN Transport Service
offering to increase security and mitigate risk.
C. NEMORKAND TRANSPORT MONITORING
Contractor shall provide a method for on-line monitoring by the County of all proposed circuits.The Contractor
should be able to provide reports on real-time and historical bandwidth utilization.All reports will include the ability
to show detail on an hourly,daily,weekly,monthly and yearly basis.Additionally,the Contractor may provide a
portal or secure web access for the County to monitor circuit up-time and outages.A secure Internet-accessible
website is preferred for County access to Contractor transport statistics and information.
D. TRANSITION,TESTING AND ACCEPTANCE
All services must be in place no later than January 15,2007.The County,will require the Data Center(1400 S.Grand
Ave.)and 301 The City Drive South,Orange,be operational by December 15,2006,to insure smooth integration
with existing County infrastructure.These dates may be change upon mutual agreement of the Parties.No payments
to the Contractor shell be made until the Comity has determined that a successful testing of each circuit and
Integration with County network is operational.Contractor will provide a comprehensive testing and acceptance plan
Page 4 of 9
Attachment A
County oforange Correa NI WD008297/MA-017-10011150
by Telecom holdings inc
for each site and each circuit type.Ate minimum the County expects these testing and acceptance criteria to include
pre-acceptance uptime periods and through put validation methodologies.
E. ADDMONAL CONTRACTOR REODUIEMENTS
1.Contnactorshall provide full,24 hours by 7 days a week,support including telephone support(i.e.help desk)and
maintenance of communication links,if applicable. .
2.Contractor will coordinate ordain&shipping and delivery of equipment and materials to any installation site,in
the event such materials are required. 1
3.Contractor will provide any necessary equipment to initiate new services at a given location.
4.County shall receive at minimum a one-year warranty on all new pate and equipment.
F. COUNTY TELECOMMUNICATIONS PROCEDURES
All telecommunication and data services projects in County facilities fall under the direct authority of the office of the
County information Officer,Deputy CEO for County Executive Offlce/Infonnation Technology(CEO/IT).No work
is to be performed at any County owned or occupied facility without direct authorization from County Project
Manager.Additionally,no consultation or engineering of any sort will occur directly between the Contractor and any
other County agency regarding any County facility without the involvement,coordination and pre-approval of County
Project Manager.The County uses a Telephone Services Request(TSR)for all services requested from Contractor.
The TSR will indicate the installation address and the billing address,which may or may not be the same.No work is
to be performed at any County owned or occupied facility without a signed TSR from the County Project Manager.
Additionally,no consultatlon or engineering ofany sort will occur'directly bebveen file Contractor and any agency
regarding any County facility without the involvement,coordination,and written approval frogr County Project
Manager.Failure to comply with these instructions can lead to termination of the Contract.Additionally,ift he
Contractor installs any transport Circuits without a signed TSR from the County Project Manager at any County
facility,said performance will be deemed outside the scope of this Contract and die service shall not be compensated.
If Contractor is unsure of a course of action or whether to undertake any service including but not limited to
installation,repair,delefion,or termination of any transport circuit,prior to providing any service Contractor's Project
Manager shall notify,in writing,the County Project Manager For consultation and written approval or denial of the
work.All services are to be coordinated using the outlined methods,and through the County designated Project
Manager only.The County Project Manager may provide a minimum of thirty(30)days notice for all mgrtests to
terminate or delete any transport ciinuil.The only acceptable method to proceed with work is an authorized TSR.As
part of this Contract,direct technical contact procedures and access shall be established fa-241ourn day week
operational response by the Contractor.The Telephone Service Request(TSR)process is as follows:
•The County Project Manager is responsible for processing and tracking the TSR and will be the single point of
contact for any service.
•The County Project Manager will notify the Contractor of a pending TSR.
•The Contractor will pick up the TSR from the County Project Manager and arrive at the site on the due date to
perform the work.The TSR can be faxed or e-mailed to the Contractor upon request.
•The Contractor will cover all the work to be done with the designated County contact and be prepared to answer any
questions.
• Upon arrive[at Vie County location,the Contractor will be escorted to the work location and will porfe n all the
necessary work In a professional and workman like manner and notify the contact when work is completed.
•The Contractor will explain all the work that was done and have the County departme tlagency contact sign off on
the TSR as completed.
Page 5 of 9
Attachment A
County of Orange Counsel N1000008297/MA-017-10011150
ov telecom holdings inc.
•The Contractor will return the signed TSR and all ancillary documentation associated with the TSR to the County
Project Manager.
•The Contractor shall submit an invoice to County indicating labor and material used and referencing a TSR and
Contract number.The invoice will include a copy of the TSR with the signature of the County contact that accepted
the work performed.The Contractor will invoice the County within 60 days of the accepted completion of the project.
Conimefto shall submit a list of all employees who will be directly performing tasks associated with this Contract to
the County Project Manager.Contractor employees may be subject to a background check performed by the County's
Sheriff Department and Probation Department,if required to obtain access at certain locations.Cost for my
background check will be the responsibility of the Contractor.If changes occur to this list an updated list will be
submitted,in writing,by the Contractor,to the County Project Manager.At no time will unauthorized Contractor
employees perform any task associated with this Contract If this occurs the Contractor will be notified that they have
not complied with the terms of this Contract and the Conti act may be terminated.
Page 6 of 9
Attachment A
i
County oromgc Cowniv N 1000008297/MA-017-10011150
nv telecom holdings ine.
ATTACHMENT B
COST/COMPENSATION
FOR
CONTRACTOR SERVICES
1. COMPENSATION
r
This is a fixed fee Contract between the County and Contractor for services provided in Attachment A,
Scope of Work in accordance with the pricing specified below.
2. SERVICE PURCHASE
Contractor shall supply the following service for the period November 14,2014 through and including
November 13,2015,except as noted below:
Circuit Type Circuit ID From To Address Total
Label Address Qty Moutlrl
Fiber-14 IGigE 46/KFFN/101417/TWCS 1400S. 301 The City Dr. 1 $3,71520
Grand Ave South
Fiber-6 I GigE 46/KFrN/101420/TWCS 14005. 1275 Berkeley 1 $3,715.20
Grand Ave Ave.
Fiber-9 IGigE 46/KFFN/101422/TWCS 14005. 840 N. Eckhoff 1 $3,715.20
Grand Ave
Fiber-2 IGigE 46/KFFN/1014321fWCS Grand Ave Broadway 77"land S. load 1 $3,715.20
N.
Fiber-3 1 GigE 46/KFFN/101431/TWCS 1400 S. 1001 S.Grand 1 $3,715.20
Grand Ave Ave.
Fiber-4 I GigE 46/KFFN/101429/-rWCS rand S. 4601 Jamboree Grand $3,715.20
Grand Ave Rd.
Fiber-7 I GigE 46/KFFN/101427/TWCS I4005. I $3,715.20
Grand S Oraan wonaswo od
4fi/VLJGS/104319lI'WCS land S.
Fiber-5 100mg-B 46/KFFN/104320/TWCS Grand Ave Solano DR Site 1 $5,725.60
64/KFFN/103146fiVCS
Taxea: $934.75
Total Marrthly Coat: $32,666.75
Ad
•Additional County location may 6e added and/or deleted to this schedule during the teen of the Conhaa.
The Contract may be amended,as set forth in paragraph C,to add circuit locations.
Fee reduction for Contractor's failure to notify County of planned and unplanned service interruptions
reduction in available circuit capacity,delays in repairs or any other disruption of service,that result in an
individual circuit not meetbrg the 99.99%uptime for any sequential 0rhty(30)day period:
Page 7 of 9
Attachment A
County 00range Contrecr NIMMOS297/MA-0174001I t50
In,telecom holdings Inc.
Per Service Outage Percentage Credit
Less than t minute(99.00%availability) No in
I minute up to 4 hours 5%of the MRC
4 hours up to 8 hours i M.of the MRC
8 hours up to 12 hours 15%of the MRC
12 hours up to 16 hours 200/6 of the MRC
16 hours up to 24 hours 35%of the MRC
24 hours or greater 50%of the MRC
3. PAYMENT TERMS
[tidal Set-up, invoices for initial set-up are to be submitted in aneers,unless otherwise directed in this
Contract,upon the satisfactory completion and acceptance of testing of the entire system. If service does not
meet acceptance specifications herein,Contractor assumes all costs and may not seek reimbursement from
County.
Monthly Service:Invoices for monthly service are payable monthly, in arrears,unless otherwise directed in
this Contract.Payment for monthly services,as specified in Attachment B,shall begin upon the date of
acceptance of Ole system.
Contractor shall reference Contract number on invoice.Payment will be net 30 days after receipt of an
invoice In a format acceptable to the County of Orange and verified and approved by the agency/department
and subject to routine processing requirements.The responsibility for providing an acceptable invoice rests
with the Contractor. Incomplete or incorrect invoices are not acceptable and will be returned to the
Contractor for correction.
Billing shall cover services and/or goods not previously invoiced.The Contractor shall reimburse the
County of Orange for any monies paid to the Contractor for goods or service not provided or when goods or
services do not meet the Contract requirements.
Payments made by the County shall not preclude the right of rile County from thereafter disputing any items
or services involved or bit led underthis Contract and shall not be construed as acceptance of any part of the
goods or services.
4. PAYMENT/LWOICING/INSTRUCTIONS:The Contractor will provide an invoice on Contractor's
letterhead for services rendered.Each invoice will have a number and will include the following
information:
1, Contractor's name and address
2. Contractor's remittance address(if different from l above)
3, Name of County agency department(if county agency is actual cuticular name)
4. County Contract number(to be added as part of the billing address)
5, Service dete(s)
6. Circuit Label
7, Service description
Page 8 of 9
Attachment A
County ofOrarge Cannot N1000008297IMA-017-10011150
nv futon holdings lac.
B. Total
Invoices mid support documentation are to be forwarded to:
County of Orange
1501 E.Saint Andrew Place,Suite 200
Santa Ana,CA 92705
Attu:Accounts Payable
Page 9 of 9
Attachment B
C iaayofOrana" Price
hr kkaom h"Mie�ga rcm Asraement Na NIcaD003397
A M,NDMENT NO.10
TO
CONTRACT NUMBER NID00008297 AS MA-017-10011150
FOR
WIDE AREA NETWORK TRANSPORT SERVICES
FOR
ORANGECOUNTY
This Amendment Number Ten(hereinafter"Amendment)is made and entered into by Lire County of
Orange,a political subdivision ofthe State of California,(hereinafter r'efened to as"County")and tw telecom
holdings inc„with its principal place of business at 10475 Park Meadows Drive,Littleton,CID 80124,
(hereinafter referred to as"Contractor"),which may be r'efened individually as"Party"or collectively as
Parties".
WHEREAS,County and Contractor executed Contract N1000008297 for wide area network transport
services for a three-year term commencing November 13,2006,hereinafter"Contract';and
WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract;and
WHEREAS,the Parties issued Amendmorrt Number Two to rrnow the Contract as number MA-017-
10011150 for an additional year effective November 14,2009 through and including November 13,M 10,and
amend Attachment B to reflect amended pricing;
WHEREAS,Ore Parties issued Amendment Ttnee to extend the Contractfnr an additional yea-elective
November 14,2010 through and including November 13,2011,amend Attachment B to reflect amended
pricing,and change vendor name from Time Warner Telecom Holdings,Inc.to TW Time Warner Holdings,
Luc;
WHEREAS,the Parties issued Amendment Four to extend the Contract fur an additional year effective
November 14,2011 through and including November 13,2012,reduce the contract amount by 10%for the
period effectve July 1,2011 through and including November 13,2012;and change vendor name to tw telecom
holdings inc.;
WHEREAS,the Parties issued Amendment Five to increase internet bard width in the amount of
$32,305.00 effective September 1,2011 through Novanher 13,2012;
WHEREAS,the Parties issued Amendment Six to upgrade the data circuit between Solana Disaster
Recovery Site and the County Wide Area Network in the amount of$71,957.20 effectiveNovember 1,2011
through November 13,2012;
WHEREAS,the Parties issued Amendment Severn to extend the Contract for an additional year effective
November 14,2012 through and including November 13,2013;
WHEREAS,the Parties issued Amendment Sight to increase internet band width fl'om 300mbps to
350mbps in the amount of$11,748.00 effective December 19,2012 through November 13,2013;
WHEREAS,One Parties issued AmendmentNine to extend die Contract for an additional year effective
November 14,2013 through and including November 13,2014,and removed the Contract's"Termination
Liability"language;
Page 1 of 80
Attachment B
Counryo£Orenge Rim Agrocmcot No.14100000e291
tm telecom holdings ins
W111-REAS,the Parties desire to issue Amendment Ton to provide a"Borstable Line"option for the
internet services provided under the Contract;
NOW,TBF..REFORB,in consideration of the mutual obligations set forth heroin,the Parties agree as
follows:
1. The corn et Contract Internet Bandwith Access shall be modified from a"Dedicated"350 mbps line
to a`Bmstahle"Line Option,expandable from the Dedicated 350 mbps tip to a maximum of 1000
mbps,expanding the hrtomatBandwith Access provided raider the Contract.
2. The total Contract Amount for the period November 14,2013 through November 13,2014,shall
increase in an amount not to exceed$42,000,for an amended Total Contact Not to Exceed Limit of
$464,400.00,to cover the expenses provided by this"Burstable"Une Option.
3. Attachment B Cost/Compcnsation for Contractor Services is amended in its entirety to include the
"Burstable"Line Option,and attached hereto.
Except as otherwise expressly set forth herein,all terms and conditions contained in the Contact and its
amendments are incorporated by this referencc as if filly set Faith herein and shall remain in force and
effect as amended herein.
(Amendment Signatures on Following Page)
i
2
Page 2 of 80
Attachment B
County of Orange Pike Agreement No.N1000008297
uv lelmom holdings Imo.
In WITNESS WHEREOF,the parties hereto have executed this Amendment on the dates shown opposite their
respective signatures Wow:
thy telecom holdines MO;
�IA/
DATE: l • I c? � �Li SIGNATURE:� �
�.
PRINT NAME: tt ' r'' f e? •iCY_�LF(1,
TITLE: if`Y I (:I'✓'
DATE: �0 SIGNATURE*:jL (v( Yvu,�
PRTNTNAME: P Irk WN 0-h�rv—
TITLE: IZvP- Pctu- fiti.
*If the contracting party is a corporation,the document must be signed by two corporate officers.The first
signature must be either the Chairman of the Board,President or any Vice President.The second signature must
be the secretary;an assistant secretary,the Chief Financial Officer or any assistant treasurers.In the alternative,
a single corporate signature is acceptable when accompanied by a corporate document demonstrating the legal
authority of the signature to bind the company.
COUNTY OF ORANGE
A political Subdivision of the State of California
SIGNAI URE:'�—r_>
PRINT NAME: V�C�
TITLE: �tI �V art�b
3
Page 3 of 80
Attachment B
Counry oforivir Price Agne cntTo.Ntaaa0 S297
W telecom holdings ine.
ATTACHMENT13
COSTICOMPENSATION FOR CONTRACTOR SERVICES
I. COMPENSATION
Tllis is a fixed The Contract between the County and Contractor for services provided in Attachment A,
Scope of Work in accordance with the pricing specified below.
2. SERVICE PURCIIASE
Contractor shall supply the fallowing service forthe period November 14,2013 through and including
November 13,2014,except as noted below:
Circuit Type From Address To Address Qty Toml Montidy
Label
Fiber- 1 GigE 1400 S.Grand Ave 301 The City Dr.South 1 $31715.20
14
Fiber-6 1 Gi E 1400 S. Grand Ave 1275 Berkeley Ave. 1 $3,71520
Fiber-9 1 qjigE 1400 S.Grand Ave 840 N.Eckhoff 1 $3 715.20
Fiber-2 1 GigB 1400 S.Grand Ave 1770 N.Broadway i $3 715.20
Fiber-3 l GigF 1400 S.Grand Ave 1001 S.Grand Ave. 1 $3 715.20
Fiber4 1 Gi"E 1400 S.Grand Ave 4601 Jamboree Rd, i $3 715.20
Fiba-7 I GigE 1400 S.Grand Ave 1535 B.Oran ewood 1 $3 71S20
Fiber-5 100r -E 1400 S.Grand Ave Selene DR Site 1 $5 725.60 l
1
Internet 1400 S.Grand Ave Burstable Gigabit Internet 1 $3,221.60
Bandwidl Circuit
Access 350mg to I000mg**
350111 ps (Monthl Char e
Internet
Traas rt (MontWY Char e) 1 $400.00 r
Add/Mova
Change Fee (One-Time Charge) 1 $250.00 j
Not Included in JI
Total MoMh1 CostBelmr
Total Monthly Cost $35,353.60
Notes:
*Additional County location may be added and/or deleted to this schedule during the term of the Contract.
The Contract may be amended,as set forth in paragraph C,to add circuit locations.
*+Burstable Gigabit Internet circuit.
Burstable from 350mg to 1000mg.
The County Burstable rate will be$92 per mg for all'Bursting"ova 350mg(351mgto 1000mg)
TWT sand sample at the 95%percentile.
Example,with 100 samples,the 95th percentile would be the 950t higbesl sample.lit a 30-day month
there are 8,640 samples,die 95th percentile would correspond with the 8,208ds highest sample(8,208=
0.95* 8,640). Using this Calcutation;The County shall effectively get 36 hours of"Bursting"at no cost
each month.
4
Page 4 of 80
Attachment B
cou t"f Orange Net Alimernent No.N1000009297
lv,telecom holdings ina
Pee reduction for Contractor's failure to notify County of planned and unplanned service interruptions
r'erhretion in avaiiabte circuit capacity,delays in repair or any other disruption ofservice,that result in an
individual circuit not meeting the 99.99%optima for any sequential thirty(30)day period:
Per Service Out -Per-tentage Credit
Lessthan l rninute99.00%availabili No credit
l minute up to 4houts 5%of the MRC
4 hours up to 8 hours I0%ofthe MRC
8 hours up to 12 hours 15%of the MRC
12 hours up to 16 hours 20°%ofthe MRC
16 boom up to 24 hours 35%of the MRC
24hnmsor eater 50%of the MRC
3. PAYMENT TERMS
Ind tin)Set-up: Invoices for initial set-up are to be admitted in arrears,unless otherwise directed in this
Contract,upon the satisfactory completion and acceptance of testing of the emirs system.If service does not
meet acceptance specifications herein,Contractor assumes all costs and may not seek reimbursement from
County.
Monthly Service:invoices for moodily service are payable monthly,in arrears,unless otherwise directed in
this Contract.Payment for monthly services,as specified in Attachment B,shaa begin upon the data of
acceptance of the system.
Contractor shall reference Contract number on invoice.Payment will be net 30 days after receipt of an
invoion in a format acceptable to the County of Orange and verified and approved by the agency/department
and subject to routine processing requirements.The responsibility for providing an acceptable invoice rests
with the Contractor.Incomplete or incorrect invoices are not acceptable and will be returned to the
Contractor for corinotioti.
Billing shall cover services andfor goods not previously invoiced.The Contractor shall reimburse the
County of Orange for any monies paid to the Contractor for goods or service not provided m when goods or
services do not meet the Contract requirements.
Payments made by the County shall not preclude the right of the County from thereafter disputing any items
or services involved or billed order this Contract and shall not be construed as acceptance of any pan ofthe
goods or services.
4. PAYMEN'TlINVOIChNG/INSTROCTIONS:The Contractor will provide an invoice on Contractor's
letterhead for services rendered.Bach invoice will have a number and will include the following
information:
1. Contractor's name add address
2. Contractor's remittance address (if different from l above)
3. Name of County agency department(if county agency is actual customer name)
4. County Contract number(to be added as part of the billing addross)
5. Service date(s)
5
Page 5 of 80
Attachment B
Coaatp ofornnge Ildco Agreement No.N la0000297
nr telecom holdings inc.
6. Circuit Label
7. Service d=iptioa
S. Total
Invoices and support documentation a e to be forwarded to:
County 0f Orange
1501 E.Saint Andrew Place,Suite 200
Santa Ana,CA 92705
Attn:Accounts Payable
6
Page 6 of 80
Attachment 6
Service Modification Order form ��Yelecom.
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Page 7 of 80
Attachment B
Coarty oPOnagc Pd..Agres.,eat No.NJ D00000297
twtelecom holdings mu
AMENDMENT NO.9
TO
CONTRACT NUMBER N1000008297 AS MA-017-10011150
FOR
WIDE AREA NETWORK TRANSPORT SERVICES
FOR
ORANGECOUNTY
This Amendment Number brine(hereinafter°Amendment')is made and entered into by the
Cmmty of Orange,apolitical subdivision of the State of California,(hereinafter referred to as"Comity°)
and tw taleeom holdings inc.,whit its principal place of business at 10475 Park Meadows Drive, -
Littleton,CO 80124,Qimsinafterreferred to es"Contractor"),which may be refaced individually as
'Tarty"or collectively as"Parties".
WHSRSAS,County and Contractor executed ContractNI000008297 for wide area network
transport services for a throe-year term commeneingNovenber 13,2006,horchisfur"Contract';and
WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract;
and
WHEREAS,the Parties issued Ameadmemblumber Two to ranew the Connactes number MA-
017-10011150 for an additional your effective November 14,2009 through and inoludingNovamber 13,
2010,and amendAttachmern B to reflect amended pricing;
WHEREAS,the Parties issued Amendment Three to extend the Contract for an additional year
effective November 14,20I0 through and including November 13,2011,amend Attachment B to reflect
amended pricing,aid change vendor name from Time Warner Telecom Holdings,Inc.to TW Time
Warner Holdings,Inc.;
WHEREAS,the Parties issued Amendment Four to extend the Contract for an additional yew
effective November 14,2011 through and including November 13,2012,reduce the contract amount by
!0%far the paled effective July 1,2011 thamigb and including November 13,2012;and change vendor
name to tic telecom holdings htc.;
WHEREAS,the Parties issued Amendment Five to increase internet band width in the amount of
$32,305,00 offeetive September 1,2011 through November 13,2012;
WBEMS,the Parties issued Amendment Six to upgrade the data circuit between Solano
Disaster Recovery Site and the CDunty Wide AreeNetworkin the amount of$71,957.20 effective
November 1,2011 through November 13,2012;
WHEREAS,the Parties issued Amendment Seven to extend the Contract for an additional year
effective November 14,2012 through and includingNovember 13,2013;
WHEREAS,the Parties issued Amendment Bight to increase intemet bandwidth from 300mbps
to 350mbps in the amount of$11,748.00 effective December 19,2012 through November'13,2013;
WHEREAS,the Parties desire to i§sue Amendment Nine to extend the Contract for an additional
year effective November 14,2013 through and including November 13,2014,and remove the Contract's
"Termination Liability"language;
I
Page 8 of 80
Attachment 6
Countyaforangc Price AgreementNe.N1DDDDDs297
by iclecera holdings lae .
NOW,TFIEREE0RE,inconsideration of the mutual obligations set fords lu ehn,the Parties agree
es follows:
1. The term of contmctN1000008297,now MA-017-10011150,is extended for a palod of one
year,thereby amendingthe Contrectpedod effective November 14,2013 though and
including November 13,2014,unless otherwise terminated by County.
2. The total Contact Amount for the period November 14,2013 through November 13,2014
shall not exceed$422,400.00.
3. Contract's Article,General Terms and Conditions,K.Termination is replaced in its entirety
with the following:
"K.Termination:In addition to any other remedies or rights it may have by law,County has
the right to terminate this Contract without penalty for cause.County shall afford
Contractor written notice of its intent to terminate for cause and ten calendar days or such
shorter time that may be specified in this Contract witliin which to aura the breads.
County has the right to terminate This contract after-30 days'written notice without cause,
unless otherwise specified. Cause shall be defined as any breaeh of coatrair,my
misrepresentation or fraud on the part of the Contractor. Exercise by County of its right
to terminate the Contact shill relieve County of all further obligation,except,County
must pay for services until such disconnection actually occurs.
Termination by Contractor.(a)Contractor may terminate this Contract w any service
orderhemuade•or suspendseNices,with 30 days prior writen notice,upon:(i)Comity's
failure to pay any amounts as provided herein;(ii)County's breach of any provision of
this Contract or any law,mle or regulation governing the services;(III)any insolvency,
banlaaptcy,assignment for the benefit of creditors,appointment of trustee in receiver or
similar eventwith respeetto County;or(iv)any governmental probibition or required
alteration ofthe services. Conhractor shall afooid Countywrhten notice ofthe breech and
ten calendar days or such shorter time that may be spodn"od In this Contmc within which
to cure the breach. (b)Cortracmr may terminate or suspend services without notice if:(i)
necessay to protect Contmctoes network;Corrtraetorhos reasonable evidence of
Cormy's fraudulent or illegal use of services;or(ii)required by legal or regulatory
authority. Any termination shall not relieve County of any liability incurred priorw such
termination,infer payment of unaffected services.All terms and conditions of the
Conti-act shall continue to apply to any services notso terminated,regardless ofthe
termination of this Contract Ifthe service provided under any service order hereunder
Ines been terminated by Contractor in accordance with this section,and County wants to
restoe such service terminated due to County breach,County must first pay all pest due
charges,a nonreauring oharge and mooimatlona obarge. All requests for disconnection
will beprocessedby Contractor in30 days o'kss. County must pay for services until
such disconnection actually oama."
4. Attachment B Cost dompencation for Contractor Services is amended in Its enthety and
attached hereto.
2
Page 9 of 80
Attachment B
Coupty.foni. a Price Agr.mtNo.NIOOOW&M
nvtelecom holdings Inc.
Except as otherwise expressly set forth herein,all terms and conditions contained in the Contract
and its amendments are incorporated by this reference as if fully set forth herein and shall remain
in force and effect as amended herein.
In WITNESS WHEREOF,the patties hereto have executed this Amendment on the dates shown opposite
their respective signatures below:
by telecom holdinas inc*:
DATE: SIGNATURE: 116A4/Tw6
PR1141'NAME: 7fimc. U0.UI5
TITLE: SV —y�¢Xa�l^(,ntengol
DATE: 4� fl� SIGNATURE*: M&L !
PRINT NAMjjE: CTII VKn_ i�l'�
TITLE: Fit' " ECG d ll tr
*If the contracting party is a corporation,the document must be signed by two corporate officers.The
fust signature must be either the Chairman of the Board,President or any Vice President.The second
signature must be the secretary,an assistant secretaty,the Chief Financial Officer or any assistant
hrasurars.In the altemetive,a single corporate signature is acceptable when accompanied by a oorporatc
document demonstrating the legal authority of the signature to hired the company.
COUNTY OF ORANGE
A political Subdivision of the Stato of California
SIGNATURE------�'> ` '[E'• ll S i3
FRINTNAME: TVEaL I- KeJ.11=1�1
TITLE: DM My y 1�' 1ReAAaa2r A 6-(= ST-
APPROVED AS TO FORM
County Counsel
Sohn H.Abbott,Deputy
3
Page 10 of 80
Attachment B
County of Umnge Price Agreement No.NIOODO08297
W telecom holdings ina
Except as otherwise expressly set forth herein,all terms and conditions contained in the Contract
and its amendments are incorporated by this reference as if fully set forth herein and shall remain
in force and effect as amended herein.
In WITNESS WHEREOF,the parties hereto have executed this Amendment on the dates shown opposite
their respective signatures below:
tw telecom huidluo hri&:
DATE: SIGNATURE:
PRDITNAME:
TITLE:
DATE: SIGNATURE*:
PRINT NAME:
TITLE:
*If the contracting party is a corporation,the document must be signed by two corporate officers.The
first signature must be either the Chairman of the Board,President or any Vice President.The second
signature must be the secretary,an assistant secretary,the Chief Financial Officer or any assistant
treasurers.In the alternative,a single corporate signature is acceptable when accompanied by a corporate
document demonstrating the legal authority of the signature to bind the company.
COUNTY OF ORANGE
A political Subdivision of the State of California
SIGNATURE:
PRINT NAME:
TITLE:
APPROVED AS TO FORM
County Counsel
(.�5� r°' 2r• r3
3
Page 11 of 80
Attachment B
Ceuniyof0mrgo PriceAgmementNo.NIOOOOGB297
0v telecom holdivgs Inc.
Approved by Hoard of Supervisors on: 1�
4
Page 12 of 80
Attachment B
County to., Price Agmemen tlo.N1000008297
uvtele.rr haldings inc.
ATTAC=-NT B
COST/COMPENSATION FOR CONTRACTOR SERVICES
1. COMPENSATION
This is a fixed fee Contract between the County and Contractor for services provided in Attachment
A,Scope of Work in accordance with the pricing specified below.
2. SERVICEPURCHASE
Contractor shall supply the following service for the period November 14,20I3 through and ,
including November 13,2014,except as noted below:
Circuit Type Flom Address To Address Qty I Total Monthly
Label
Fiber- 1 GOP 1400 S.Grand Ave 301 The City Dr.South 1 $3,715.20
14
Fiber-6 1 GgE 1400 S.Grand Ave 1275 Bo1•kel Ave. 1 $3,715.20
Fiber-9 I 1 GeB 11400 S.Grand Ave 840 N.Eckhoff 1 $3,71520
Fiban2 1 GgB 140D S.Upend Ave 1770 N.Broadway 1 $3,715.20
Fibcr-3 1 GgR 1400 S.Good Ave 1001 S.Grand Ave. 1 $3,715.20
Fibsr-4 1 GgE 1400 S.Grand Ave 4601 Jamboree Rd. 1 1 $3 71S.20
Fiber-7 1 GgE 1400 S.Grand Ave 1535 E.Orangewood 1 1 $3,715.20
Fibe 5 100m -E 1400 S.Grand Ave I Selene DR Site 1 $5 725.60
Fixed/Timed 1400 S.Grand Ave Q3igabitInternet circuit> 1 $3,069,00
EIS w/Gig 300mg
Port
Internet Increase In Bandwith from 1 S400.00
Bandwith 300mbps to 350mhps
Access
350mb s
Total Monthly Cost 1 $35,200.00
Note:*Additional County location may be added and/or deleted to this schedhleduring the term of
the Contract The Contract may be amended,as set forth in paragraph C,to add circuit locations.
Fee reduction for Contractor's failure to notify County ofplamud and unplanned service interruptions
reduction in available circuit capacity,delays in repair ar any other disruption of service,that result in
an individual circuit act meeting the 99.99%uptime for any sequential thirty(30)day period:
Per Service Outa a I Percentage Credit
Less than l minute 9.00%availabi' No credit
l minute up to 4 hats 1 5%of the MRC
4 homes up to8how 10%ofthe MRC
8 homsa to 12 hours 15%of the MRC
12 hours up to 16 hours 20%of the MRC
16 hours up to 24 hours 35*A oftha MRC
24 hours or greater 50%ofthe MRC
5
Page 13 of 80
Attachment B
(]eaaly of Orsage Price AgeemewWc.N1000008297
tw telxom holdings ire.
3. PAYMENT TERMS
Initial Set-up:Invoices for initial set-up mreto be submitted in arrears,unless otherwise directed in
this Contract,upon the satufactoty completion mid acceptance of testing of the entire system.If
service does not meet acceptance specifications herein,Contractor assumes all costs and may not seek
reimbursement from County.
Monthly Service:invoices for monthly service are payable monthly,in arrears,unless otherwise
directed in this Contract.Payment for monthly services,as specified in Attachment S,shall begin
upon the date of acceptance of the system.
Contractor shall reference Contract number on invoice.Payment will be net 30 days after receipt of
an invoice in a format acceptable to the County of Orange and verified mid approved by the
agency/department and subject to routine processing requhaments.The responsibility for providing
an acceptable invoice rests with the Contractor.incomplete or incorrect invoices are not acceptable
and will be returned to the Contractor for correction.
]filling shall cover services and/or goods not previously invoiced.Tire Contractor shall reimburse the
County of Orange for my monies paid to the Contractor for goods or service not provided or when
goods or services do not meet the Contract requirements.
Payments made by the County shall not preclude the right of the County from thereafter disputing any
items or services involved or billed under this Contract and shall not be construed as acceptance of
any part ofthe goods or services.
4. PAYMENTINVOICINGMSTRUCTIONS:The Contractor will provide an invoice on
Contractor's letterhead for services rendered.Each invoice will have a mimber and will include the
following information
1. Contractor's name and address
2. Contractor's remittance address(if different from 1 above)
3. Name of County agency department(if county agency is actual anstomw name)
4. County Conhnetnumber(to be added as pact of the billing address)
5. Seavica date(s)
6. Circuit Label
7. Service description
8. TOW
Invoices and support documentation woto be forwarded to:
County of Orange
1501 E.Saint Andrew Place,Suite 200
Santa Ana,CA 92705
Attn:AcoomrtsPayable
6
Page 14 of 80
Attachment B
Service,'Modification Order Form;,:? Jtelecorr>_
Thhaervlce Call enamel Into by Wteleeom bolding.Nabyem N l hathey vvvadauloodlada eMcee to]ere cercad to nnida bee s
Nebel.added hereunbor(mllsellved, I U9 and Counwof Omnpe
S.M. Is etten shut
up.tOM telecommunication
el b0Nby Owttion end TwlC.TwtC vAl Od taree.goS 4m rOasedrce per earemalaunder NY
Sella Order,vmlCr oum ell.ladle bee Islemmmuni atlone(Bfiltivs.Ulhera i.a...drard.1 a 1aplicMca Ortlarantl Me pnwagleemanl(a)hf the
seMoa belly mvNlm wrenawm,tltla SeMce Crdx shell prevail ovr Neploraprevmenl and sty epplbblelarlR,
Mont Resealed Charge(MRC): 506,2ab.00 Mo.Meurring Cherie(NRC): I.
Customer and the Indlviduai hill MROW represent Nat such Indbldual has the adMav to bind Customer to this SeMce Order.
by Lelemm hate a o. Coatemvr. Coushof0vnge
Sl9naturc: Slgne(ure:
Print Name: PrInLNeme:X
TIUv: Title:% \N6 AE81.�T
Date: I OI/LN o/R D.C.X l 5
Sala Person: Ronaldi
Renewal Form
Except as amended in Obe SeMce Could,all exhloug terms and condglon;Call to the mnaweu SmOol rsmaln In 0a0 farce and effect,
The Renew al Tom"I commence On the data thet this SaNice Order Is Implemented by TWTC.
Any services Nat are peel of the Original Service Order for the services 1191W below,but are net themselves Bated,are also renewed for he same Renewal
Term,and for Nair oe l itt a usage rates.
Di nnWWlce: IfCusbannals deconneding Services for any reason,It must deliver notice it either byfacslm0e to 303403-9836 or by small to
'CusbmerCere®b4lelecom.com'.No0ca by f leslmle cremes Y deemed given when deMered.
AutomedI.Renewal Upon MplCaH nofihe Tad,of Md.Service Chose,the Term for services will nutomatlaaly renew for succassive monlhlo-momh tines
unless eitherpany n000es the otberinwtltln9 Oil PC)Mil poll the expliallon Ofthe than commit tonn fir it wishes to temJnale bee servire.
S.M.Addressll I 1006ovtle Wend Avenue;sane AM.Da92Taa
Renewal Term 12 Morons
Sol Renceal ONyNO technical changes rates remeln Me dome.entrance Site 140o S Grand Avenue Sane Arse.
.Order Notee -
aware,.. -" :'Clrould l0 lfao lira le I She, USRMRC Teei WINGRenewed
IrrlemN Transport 45MFFNn014501NYGS 1 53,098.00 S .Ml
Intemel Gand, Ift ..3mms 1 4'JKFFNN01450RVECS 1 1 $ 00.00 1 5400.00
Sub-Total 33,458.00
Oul Addmes Y.2 840 EC MOFF,ORANGE CA hot
Rees Tarm 12114oldhs
rat Renewal Con".Weirdest d mi Isla remain Me same.Z Lecalon Is 1400 S Grand Awn,Same Ana,00,9270A Pddly usual
_OrEeallotSe_: PMat1400S Grand Avenue;same Mato FodnshoOl Nslool
leato Nama' choultiDoftoplici Cut, 1 untt MRC Total MRC Renews
NMNeIMJ-EAM 48rKFFNl101422]IWCS 1 Sol53,Tt620
Submoei I Solid 0
"Saralee AEdresslea 1275 BERKELEY FULLERTON CA 92531
Renewal Tonn'i. 121Loatia
-Seel Renewed!OnlyNo technical chanem fall tamale bee same.Z LoeSan Ia 140J 8 Grand A.,,Sane Ara.CA MO5.Pricing incomes
C) Notes°,.Fee at 1400 S.Grand Avarua;Santa Arse N Pod gsed Or this lecher,
der
BaMddwmer _ Clmug IS fitapplicable) cad Unllmoc Total MRC laddedgend,
NatW IAN-eye 4wKFFNNm420![WCS 1 89]15.29 I 6AT16.20 )
SubdWal $3,716120
Verson 41 rev.930-12 mialwem-OmddenY 111 F,Z
Page 15 of 88 t
Attachment 6
6ervic.Addrroa W InO OROADWAY.SANTAANA CA8320S
`Renewal Term 12mmVIS
Slip.Ranenal Gnly-No IeGNmI Hanpe[rates Rmeln Natame ZW.Hank1,1008 Grand Avenue,Santa An.,CA MOM.R. ,Inelutles
Drder NOka . PoRatl40DS.GMMRVSIWS;enlSAnat0 PORbladsrthlckaUen
eaMceHalne Clmuit 10oa Ilceble ON I MRC newad
Not.1AN-Eple 961KFFNli01492lRNC9 1 1 0,71520 $3.71S.20
`.:Sub•Total'c";`' 33,715.20
Stands.Ad3rasi a 1001 GRAND,SANTAAA CA WOS
Ranewal Term 12 Monba
Snlyle Renewal Only-No twM1Nml changes lades remain M came.Z toplknk 14008 Orand Avanue;SmihAna,G0210S.PtlWD ad.dx
Order Nate. PMat14ODS.GWdAmde:SanbAnatD Portllsletl fu lhk lOcallon.
S.rvle'Nema Clrou1t10 Ifs ilbehlel- MY Unit MRC 1 To151MRC Renern
Nat]"W1-all 49MFFW101431NSW 1 53.]15.20 $3710,20
..:Sub-Totai-:' 53,T15.�
SeMCe Addrasc96 16390RANGEWOOD,ANAHEIMG0280.5
Renews Tour 12 Mortis
S ple Renewal Onryio kchnlnal cnangm mla remaln She aeme.21¢alkn Is 1400 S Cmnd Avawe;Santa Ana,CA SVCS,Plftg Includes
Order Nob. PoNat14008.GrandAvenue;Sans Ana to Pedllsletl ftrblckafieR
Name CIMURIO 0z Ikabl. O " U.It MRO Toi.iN=flbn wed
Native lAN-ElL 4WKFFNI1m4WfflNC8 I 1 I 58.1MM it 6371520
- ,Sub-Total 33,]tfi,Zl
SwW.Add..W 4mi JAMBOKM NEVNPORT WEACH S26SO
:„Rumwd Term 12Montha
elmpie Renewal OnlyNo L2hniW Wngesnba bmein w.ema 2 Lac.tionln l4W S Gib Avenue,BznL=Ana,GS905.Pntl�pbtlWec
Ordx N.ba Pmt91140DS.GaB11tl AV611119;GBnIOAa to Part tl.IBdfx W.ba00n.
eeMaNema oncuml) Ue ullceble Qatar U.ItARSO - To ti MRC" news
Native LAN-FJIe 4SdSI'M10142anI i I 43,716.20 03]1fi20
Sub-Total
Suvlce Aadreea#0 301 THE CITY,ORANGE CA 92MB
Renews Term. 12Mmlhe
... Simile Ranaw.i Only-No ieehnled.hengea natatimam 0S..me.z l safionk 140DS Greed Avow.;SSnb An0.G92205.Pddng btludea
Odder r N.W. Pdat140OS.GrSsd Av.nue;SanaAalo PMOeIedbrlblalosalbon.
SeMe.Namo CIrcUIt ID Ifs IkeblaCISI
Unk MRE - :ToleI MRC Renewed
Native LW-Ells 4WKFFW10141]TNCS 1 S ]15.20 53Tie20
Sus-Tool 50,]ii20
Gmka AMP..N 12 mi.CenierFiva Suds An.,Ca Win
RerlewalTarm 12 Months
-, 8lmpla Renews Only-Includes Portz,Typal],and 9NIAN,Cud E111AN's,brlea0on. 1201vk Canler Plxa;SxitaAnaxs MST....Stray
Ordx Nota. FegOeId.CAS4IS3
�3er41Ce Name cirnAtlplfa ilabb Unit MRC -TOhi MRC n.wad
lalA M3.ona1E]OSra 46A/LXIU104319nWCS 1 1 S5.405.00 $103,00
NaWe IAN-Enlemriae Swilthed Senb Ana G 491KFFNN043201IWC3 1 51240.a Si U
Native tAN-Ea@ dwa StNltl�ed-Fassd G BgA4FPNIto3148lfWCS i u,aa.a 52a0RO
St TdHI - SS.]2S.S0
Wnbn4d rer.430.8 twtelo:om-CorAdMtlal PtP208-
CFL
Page 16 of 80
Attachment B
0momyof Orange PdceAgnement No.NIO0a008297
h,tmovortholdinas,inc
AMENDMENT NO,S
TO
CONTRACT NUMBER N1000008297 AS MA-017-IODI IISO
FOR
WIDE AREA NETWORI{TRANSPORT SERVICES
FOR
ORANGE COUNTY
This Amendment Number Eight (hereinafter "Amendment") is made and uttered hito upon
execution of all necessary signatures by and between the County of Orange,a political subdivision of the
State of California, (hereinafter rofared to as"County)and tw telecom holdings inc.,with Its principal
Place of business at 10475 Pads Meadows Dive, Littleton, CO 80124, (hereirmflor referred to as
"ConOncmr'),which may be referred individually as"Party"or collectively as"Parties",
WfiBRBAS, County and Contractor executed Contract N1000008297 for wide area network
transport services fur a Ocoee-yeartoral commencing November 13,2006,heeinnfter"Contract".-end
WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract,
and
WHEREAS, the Parties issued Amendment Numbe Two In renew the Contract as number MA-
017-10011150 for an additional year affective November 14, 2009 through and including November 13,
2010,and amend Attachment B to reflect amended pricing;
WHEREAS, the Parties issued Amendment Three to extend the Contract for an additional year
effective November 14,2010 through and including November 13,2011,emend Attachment B to reflrwt
marinaded pricing, and change vendor name from Time Warner Telecom Holdings, Inc. to TW Time
Wamer Holdings,Lao.;
WHEREAS, the Parties issued Amendment Four to extend the Canned for an additional year
effective November 14,2011 through and including November 13, 2012,reduce the contract amount by
10%for the period affective July 1,2011 through and including November 13,2012,aid change vendor
nine to tw telecom holdings Inc.;
WHEREAS,the Parties issued Amendment Five to increase Intenret band width in the amount of
$32,.305.00 effective September 1,2011 Ouangh November 13,2012;
WHEREAS,the Pities issuedAmeudnent Six to upgrade the data circuit between Sulamo Disaslo
Recovery Site and the County Wide Area Network in the amount of$71,957,20 effective November 1,
2011 through November 13,2012;
WHEREAS, the Parties issued Amendment Seven to extend the Contract for an additional year
effective November 14,2012 through and including November 13,2013;
WHEREAS, the Parties desire to issue Amendment Bight to inee se internal bandwidth in the
amount of$11,748.00 for the period mulingNovember 13,2013,
NOW,THEREFOR$in consideration of the mutual obligations set forth herein,the Parties agree
as fallows;
I
Page 17 of 80
Attachment B
Cbontyuf oreagc Pdce Aareo c.t No.N3a00nDW7
Iwklemmholdiago,lac
1, hmrease interact bandwidth from 300mbps to 350mbps and inaease Contract Amount by
$11,749.00 forihe period andingNovember 13,2013.
2. A true and eonectcopy of Attachment B CostfCompenssNoa for Contractor Services is
attached.
Except as Otherwise expressly set£mill herein,all tams and conditions contained in Ore Conhact
and its amendments are incorporated by this rcf6mmse as if fully set forth herein and simll remain
in fill forme and effect as amended herein.
2
Page 18 of 80
Attachment 6
County ofl7mnge PrIm Agn ement No.NIC00008297
f w telecom holdlags,Ina
In WITNESS VAMEOP, the pmties hereto have executed this Aineasdmont on the datee shown
opposite their respective signatures below:
Tw teleom haldines Inc.-:
DATE: 12 I SIGNATUM ttl"�"y��
PEMTNAME: L ' N
TITLE: r .T1\
DATE:I2- Ig Y- SIGNA'I'URE4: y/
PaiNTNAME: /
Tt'17,x: t/�'&ta�/lam 1e,,k a 44,4 aA
elf the caatmating party is a corporation,the document nest be signed by two atyorme office¢ The fiat aignalum must be
abhor the Chohmm ef(he Ennrd,Presldent or any Vice PreddwL Th<xcontl signature must be the seuelvy,an assistant
+eaxtary,the l'adefl•7moalai O�evvmy assistont trcnsmeis. fit theoltermtive,a single corpoMesigvnmre is neceptnble
when aaompnnied by a cvp.te document demmotmting IhelcmI authority eftha slgnatum to bind tic company.
COUNTY OF ORANGE
A polidoel Subdi7•ision of the,^atyeofCahfoania
'SIGNATURE: lm "'`'r{,
T17LE: 'URCHAkrual
DATE: 2
3
Page 19 of 80
Attachment B
County or Omnge Prke Aa,mme°o No.NI69000g297
talelee mnoldings,ine
A'ITACIIMENT 0
COSVCGWENSATIONFOR CONTRACTORMY1CFS
1. COMPENSATION
This Is a fixed fee Connect between dre County and Contractor for sa'viaas provided in Attechment
A,Scope of Work fit accordance with the pricing specified below.
2. 8MICE PURCHASE
Contractor shall supply die following service for the period ending November 13,2013, less 10%
discount,except as noted below:
ChTalt Type From Address To Address Q(y Total
Label Monthly
Fibre- 1 GiSS 1400 S.(]read Ave 301 The City Dr.South 1 $4,128.00
14
Fiber4i I G1 E 1400 S.Grand Ave 1275 Bedcelo Ava. 1 $4,128.00
Fiber-9 IGi1l 1400 S.Grand Ave 840 N.Eckhoff 1 $4,128.00
Fiber-2 I Gitall 1400 S.Grand Ave 1770 N.Broadway 1 $4128.00
Fiber-3 I ORE 1400 S.Grand Ave 1001 S.Grand Avc. 1 $4128.00
FLbaA I Gla 1400 S.Grand Ave 4601 Jemboreelld. 1 $4 128.00
Fiber-7 I GIgE 1400 S.Grand Ave 1535 E.Orangewood 1 $4128.00
Fiber-5 100mg-E 14D0 S.Grand Ave Soinnc DR Site 1 $5,725.60
(10%included
in cost)
Non-Recurring Charge of ±,480
3250.00 for Fib r5
FixedlTiered 1400 S.Gland Ave <Gigabit Internet cirouitV .00Ely w/Gig 350mbps(from 300nig) iuciudedPort oast)
subtotal $42,I01.60
Less: 10'A discount $2,899.60
Total Monthly Cost $39,212.00
Now: 'Additional County location may,be added and/or deleted to this schedale during the tern of
the Connect. The Contract may be amended, as set forth in paragraph C.to add oirctrit locations.
Fee reduction for Contractor's failure to notify County of planned and unplanned sa'vtoe
interruptions reduction fit available circuit capacity,delays in repair or any other disrupdonofservice,
that result In an individual circuit not meeting the 99.99% aptime for any sequential thirty(30 day
period:
4
Page 20 of 80
Attachment B
County of0mege Price An,eement No.N10eDDD8291
hvlelowm hel0inga,inc
e• a•vlce Onta c Pernnta ¢Credit
less than 1 sarab 9.00%availabW No credit
1 minute up to 4 hours 5%of the Mc
4 botur up to a hours 10%of the MRC
8 hours up to 12 hours 15%ofthe MRC
12 boors Up to 16hours 20%of the MRC
16 hours ep to 24 hoots 35%of We MRC
24 hours or greater 50%of the MRC
3. PAYAMTTCfdMB
Initial5et-un: hrvoice$for initial.set-up are to be subinitted in anaars,miless otherwise directed in
this Contract, upon the satisfactory completion and acceptance of testing of ilea entire system. If
service does not meet acceptance specifications heroin, Contractor assumes all costs and may not
seek reimbursement from County.
Monthly Service-. Tnvoices for monthly service are payable monthly, in arturs, mdess otherwise
directed in this Contract Payment fir monthly services, as specified in Attachment B,shalt begin
upon the date of acceptance of the system.
Contractor shall roference Contract number an invoice. Payment will be net 30 days after receipt of
an invoice is a format acceptable to the County of Orange and verified and approved by the
agency/department and subject to routine processing requireumuts. The responsibility for providing r
sit acceptable invoice rests wilt tire Connector. incomplete or iueonnot invoices are not acceptable
and will be returned to the Contractor far correction.
Billing shall cover services and/tor goods not previously invoiced. The Contractor shall whnbnse the
County of Orange for any mordes paid to flue Contractor for goods or service not provided or when
goods or services do not asset the Contract requireanonts.
Paymeats made by the County shall not preclude the right of due County from(Installer disputing any
items or services involved or billed under this Contract and shall not be construed as acceptance of
any part of the goods or services.
4. PAYAUNT/IIWOIC)NOAKSTRUMONS:The Contactor will provide an invoice on Contractor's
letterhead for services rendered. Each invoice will have a number and will include the following
information:
1. Connectors name and address
2, Contractor's remittance address(if different from 1 above)
3. Name of County agency department(if caunty agency is actual customer'lame)
4. Conuly,Crannect nauabw(to be added as part of the billing address)
5. Service datc(s)
6. Circuit Label
7. Service description
8. Total
Invoices and support documentation are to be forwarded to:
County of Orange
1501 E.Saint Andrew Place,Suite 200
Santa Are,CA 92705
Attn:Accounts Payable
5
Page 21 of 80
Attachment 6
Service Modlficathfn Order Fori n Otelecolrn_
mbsenk.Graermanbmd eftel Immanbuldoll h IsI nimv NWndl .ad..l,dIdI mat we taffordlosson4d.lneaenmoa
wine and I cnunl er Dran
road,,t and is ailncllw upon eveetaon both by Cuslomerand MG.MG all amYnandoat For me pedeImellm nl la cubs 'a'sman tans
S.W.Groan wts aw'i ancepemu no tdeeommunka0a+x IeAHm.If mere Is amnlllcl brad IMe Sallee OAm oMerpoora9renmemlol Im Nn[ndt
bergart Ned orondadd,Ilis Servl[a GMwxtall PW oarine Wblag:earde-adanye111IseIff-
met neamrinB Cherge III j]740 0 NomFemrting Ghmga B4nCp ".OB '
Colama and Ille ImpVtluY Year,belnrvn aRnl NY man IntlMdual has Her nulllMp b MM Cuxbmw to'his S'I Cana.
tw teleoam Mlldngs llnI Cuslamm: Cuunl I draw
F,s, p
Stearns. (,�/J�"'1 � Sartanurc:x "`L A 41., P't-
PYnlNamo: WIGan Pmdedskwn id Nems: 1 T ��
Till e: VP)Gm ;IIUe:X
taoln: i i / mb:X y
set.Porto.: noodle M01:
Chan a Form
IOGuabmarosed. smominaw sYy eXala lh9[pe[N[veMcedtlsleebeWw.Efapl nxmndfedby NE%nl¢Mcdblbn.Ne WnwtldeavbMbelowremslnslnlull
tw wtl aGecl.'"pd®onY ewWrm In Ihre wl Ih o:IgM of mnlmcl wlll ho robtmlmua la Inlll pl,0ke SeMeoe." �
A[counl Numbs: 6m9514 j ILSk: IJON6iBP00 FxpMm: I '1�
c6rua[tTme: vnlm A INntrol Seance Umr Foam 4vl8mFl ; ov.WGral Ca:aneltalnesa^`: tt1i5 0
end oml Rat ea sled SxNCB moeflwlbn
SMOF Is knIr emel6andwhSb Access uPyaEu Iran loom en auser b men.by SOmE Iv 111 bandwldlh o1350mb.Part Is GIBE and no changes b Pan.I
This upgrade is service alleclln"d tad OUet4ma;In advance to aehadub upgrade of Warren be idh.EXISTING CIRCUIT to:461 KFFN/101450/ I
T WCS.Lonallon is On Net.CUrreN billing for 300mb and GigE Pon Is$IIJd0 man.now telMg for 550mb and GIBE Pan Is$7,4B0.00 Mflfl,
Sentddrad4$t 19BOScaaGmlbAverur,$anmArti CA 92]OS
s30rdanaraw..: I upradn
t IhId ,eln Is service
ddtb IIconlanuslarer In W. ka ace 11.a Connalka OnsirlEWrolandyasbmerinstivenceb
ON Nol�7- EaSTBmdalsservl o:461iKFIFNI mola0laatalS. mete see Nei.
Cat Ullin Uar300s and
upgmdo to.412.00M
EXISTING CIRCUIT IG.4 GiaS P /10145000 00 M.Lastbn seen Npl.Gwrenf Nlling War 300mb and GIBE PoM1IS$6.41200 Mflfl,
'. now blgnB for 35Dmb end GlgE Panic¢]f BODD Mflfl.
9eNke Neme Y b 0 "UMI LARD TWI eO UnIINPC F. Total NNC
Flemal naMVAtlNPccsss Y V.t=m ST.460A0 .oil :c.o0
NlsmatTmrc {g e f SO.m 30.00 I WIN
b.SATotals 146GW b.00
.a..an.IS M.'a 4r[Wwm-C[a110emW Nod dl
Page 22 of 80
Attachment 6
Coin'aformegc Price Agreement No.NICONDS297
tw telttom hddinga ina
AAMNDMENT NO.7
TO
CONTRACTNOMEER N100000S297 AS MA-017-10611150
FOR
WIDE AREA NETWORI{TRANSPORT SERVICES
FOR
ORANGE COUNTY
This Amumdment Number Savors (hereinafter "Amendmeaf) Is made and entered into by the
County of Orange,a political subdivision of the State of California,@mefnafler referred to as"County')
and tw tolecorn holdings Inc., with its principal place of business at 10475 Park Meadows Drfvo,
Littletou, CO 80124, (berohrafter referred to oa "Contractor'), which may be referred individually as
"Party"or collectively as`Parties".
WHEREAS, County and Contractor executed Contact N1000008297 for wide area network
transport services for a thr a ycar term commencing November 13,2006,berefi after"Contract";and
WHEREAS,the Parties issued Amendment Number One to amend Attachment A of the Contract;
and
WHEREAS, the Parties issued Amendment Number Two to renew the Contract as number MA-
017-10011150 far an additional yenr effective November 14,2009 through and including November 13,
2010,and amend Attachment B to reflect amended pricing;
WHEREAS, the Parties issued Amendment Three to extend the Contract for an additional year
effective November 14,2010 through and including November 13,2011, amend Attachment D to reflect
amended pricing, and change vendor name Own Time Wanner Telecom Holdings, Inc. to TW Time
Warner Holdings,hrc.;
WHEREAS, One Parties issued Amendment Pour to extend the Contract for an additional year
effective November 14, 2011 through and including November 13, 2012,reduce tiro contract amount by
10%for the period effective July 1, 2011 through and including November 13,2012;and change vendor
name to 4Y telecom holdings Inc,;
WHEREAS,the Parties issued-Amendment Five to Increase intomet band width in 0ne amount of
$32,305.00 effective September 1,2011 OuroughNovember 13,2012;
WHEREAS,the Patties Issued Amendment Sixto upgrade the data circuit between Solaro Disaster
Recovery SIte and the County Wide Area Network in the amount of$71,957.20 effective Nove nbet• 1,
2011 through November 13,2012;
WHEREAS,the Parties desire to issue Amendment Seven to extend the Contract for an additional
you effective Novomber 14,2012 through and including November 13,2013.
NOW,THEREFORE, In consideration of One mutual obligations set forth hemlu,the Parties agree
as follows:
1. The term of contract N1000008297,now MA-017-10011150, is code aded for a period of one
your, thereby amending the Contract period effeotivo November 14, 2012 tlunugh mad
iuchudiagNovember•13,2013,unless otherwise terminated by County.
1
Page 23 of 80
Attachment B
County doraage Price Afire mnallo.NL00000M7
nv tnkcemheldkgs lec.
2. The total CentractAmomrt for the period November 14,2012 through November 13,2013
shall not exceed$457,728.00.
3. A true and correct copy of Attaclunent A Cost/Compensation for Contractor Services is
attached.
Pxoept as otherwise expressly set forth herein,all terms and conditions contained in the Conhaot
and its amendments are incorporated by this refoence as if fully sot fordr herein mid shalt remain
in fill force and effect as amended havein.
2
Page 24 of 80
Attachment B
Countyofomnge pdceAgreeme nNe.NIODOODS297
ur lalecmn holdings inc.
In WITNESS WHBRBOP, the parties hereto have executed this s Amendmani on the dates shown
opposite their respective signattues below:
tw telecom rholdines inc.*,
DATE:J 0 — 41'1,Z SIGNA'MM:�..yt^•rl t/fTUlm
PRINTNAME: ! rid .d ad,' <
TfrL& SI/P� K >!.. 4G./pm n/� .. / efe„wrc /
DATE: /0,Aha SIGNATUREa: IA24
PRINTNAMR: DuA l" <4ry- : bk ,.)4,
TrfLE: r vn
'Ifthc crntnmting pxny ix x corpamtien,the dowment mast he algned by nvo wrpomm oflicas. T'hc Rrn ni6tmtum mun be
Olmr the tgrainnun of the Board,P idnn or any Vice Pmsident. The second signetnco must be dm xmretxq,a ..ismnt
Rnmtap•,dte Chief Financial Offmev ar mry axsisWnl teasnem. In Ilm eilcrnnlivq rt single corpemic sigvoMe is ncce➢table
sehw nmompmlcd by ncorperate dontmmtdcmonslmdogilulegW nuthorlty ofihe signotum W hiad the conspany.
COUNTY OR ORANGE
A political Subdivisiiopo��n of thee''State
s of
C,aalifo nia
SIGNATURE: V'I ��W "IM et t/ )
PRINTNAMI1 r,XCG CrIppa4ie �/•pli �p�
TITI.H: I W� ap'vltA,�
DFt 'r {O
ROVE FORM
Illtfy CA nS
John H.A butt,Deputy
Approved by Botud ofSupetvisom on: �Z-
3
Page 25 of 80
Attachment 6
Calatyafoyinge PflwAgmemear No.M1000OOS297
rw telecom hehliags inc,
ATTACHMENT B
COSTICOMPTiNSATIONFOR CONTRACTORSERVICFS
1. COMPENSATION
This is a fixed fee Cmntnet between the County and Contractor for services provided in Attachment
A,Scope of Work in accordance with tke pricing specified below,
2. SERVICEPURCHASE
Contractor shall supply the folluwhng service for the period Noveaba' 14, 2012 dnough and
inchrdungNovembor 13.2013,less 1094.diseonmt,except as noted below:
Circuit Type Fivin Address To Address Qty Total
Lobel Monthl
Fiber- 1 GigE 1400 S.Grand Ave 301 Thu City Dr.South 1 $4,128.00
Flb%6 I GUE 1400 S.Grand Ave 1275 Bes-keley Ave. 1 $4 128,00
Fier-9 I Glgli 1400 S.Grand Ave 840 N.Eckboff 1 $4 129.00
Fiberv2 I GIRB 1400 S.Gmnd Ave 1770H.Bivadway 1 $4128.00
Fiber-3 I Gl E 1400 S.Grand Ave 1001 S.Gmnd Ave. 1 $4128.00
Fiber-4 I Gl B 1400 S.Grand Avis 4601 Jamboree Rd. 1 $4,128.00
Fiber-7 1 Gi B 1400 S.Grand Ave 1535 B.Oran ewood 1 $4128.00
Fiber-5 100mg-E 14008,Grand Ave SolanoDRSits 1 $5,725.60
(10%included
in cost
Non-Recirning Charge of I
$3 250.00 fur Fiber 5
11kodfriomd 114110S.GrandAve, <Gigebit latemid ob•a4t> 1 $6,412.00
PIS w/Gig 300mg (10%included
Port 10 cost)
Subtotal $41,033.60
Less: 10%discount $2,889.60
Total Monthly Cost $38,144.00
Note: *Additional County location may be added and/or,deleted to this schedule during dse twin of
the Contract. Tba Contract nnsy be amended, as set forth in paragraph C,to add oirenit locations.
Fee reduction for Contractor's failure to notify County of planned and unplanned service
intmrupdons reduction in available oimuit enpnoily,delays in repair or any other disruption of vervice,
that insult in an individual chervil not meeting One 99.99e/o uptime for any sequential thirty(30 day
Wind:
d
Page 26 of 80
Attachment B
Countyoforsnae PdoaAerannatNo.NI000008297
ar tde.om hddln'Inc.
Per Service Octane Pencentag.credit
Less than l minute 99.00'%availability) No credit
I minuteu le4hova 5%of1he MRC
4 how.up to 8 hours 10%oftlwh9tC
8 hours up ml2hours 15%o tIm MRC
12hovi a up to Means 20%ofthe MRC
16 tics.up to 24 hours 35%oftho MRC
24 hours or greater 50%ofth.MRC
3. PAYMBNTTL'RMS
Initial Set-up: Invoices for initial set-up are to be submitted in arrears,unless otherwise directed in
this Contract, open Clio satisfactory completion and acceptance of testing of the entire system. If
service does not meat acceptance specifications herein, Contractor assumes all costs and may not
seen reimbm'scntetrtt}ore County.
Monthly Service: Invoices for monthly service are payable monthly, in arroars, unless otherwise
directed in (his Contract, Payment for monthly services, as specified in Attachment B, shall begin
upon the data of acceptance ofthe system.
Contractor shall reference Contract number on invoice. Payment will be net 30 days after receipt of
mr invoice in a format acceptable to the County of Orange and verified and approved by the
agency/depvtment and subject to routine processing imin temeuts. The responsibility for providing
an acceptable invoice rests with the Cmnractor. Incomplete or incorrect invoices are not acceptable
and will be roamed to the Contractor for correction.
Billing shall cover sorvices mid/or goods not previously invoked, The Contractor shot]reimburse the
County of Orange for any manias paid to the Contractor far goods or service not provided or when
goods or services do riot meet the Contuct requirements.
Payments made by the County shall not preclude,the right of the County from thereafter disputing any
flans or services involved or billed under this Contract and shall not be consbued as acceptance of
any part ofthe goods or sorvices.
4. PAYMENT/INVOICING(INSTRUCTIONS:The Contractor will provide an invoice an Contractor's
lottedu id for services rendered. Such invoice will have a number and will Include the following
Infomtellar:
1. Counselor's name and address
2. Contfictm's iemithineb address(ifdifferont from l shove)
3. Name of County agency dopm Intent(ifcounty agarcy is actual customer unto)
4, Comity Contract number(to be added as part of die hitting address)
5. Service date(s)
6. Circuit Label
7. Service description
S. Total
Invoices and support documentation are to be forwarded to:
County of orange
1501 E.Saint Andrew Place,Suite 200
Santa Ana,CA 92705
5
Page 27 of 80
Attachment 8
Ceuntyofolvage Pi,c Agmeine0Ne.NIGa00a8297
he W..ho7d ngsiuc.
Atin:Accounts Payable
I
G
Page 28 of 80
Attachment B
County dom"ge F,ice Agreement No.NIIMlJ0aR297
tw telecom Wldlogs.Is-
AMEND1v1.ENT NO.6
TO
COMRACT NUMBER N1000008297 AS MA-017.10011156
FOR
wmE AREA Nmvon1 TRANSPORT SERVICPS
FOR
ORANGECOVNTY
This Amendment Number Six(hereinafter"Amcndroent")is made and entered into by the
County of Orange,apolitical subdivision of the Stem of California,(hereinafter referred to as"County')
and tar n4ecpm)loldings;nc.,with its Inincipai place of business at 10475 Park Meadows Drive,
1;it"n,CO 80124,(hueina0urrufeued tC as"Conunctor"),which may berehncd inxlivira,ally e5
"Petty"or collectively as'Pan)es".
WHEREAS,Comity and Conomctor executed Contract N1000008297fm•wide area network
tmuspmtservim for:a three-year term commencing.Novemher 13,2006,hereivafier"Contract";and
WHEREAS,the Parties issued Amendment Number One to amend Attachment of the CCntmGt;
WEMAS,the Parties issuedAmendmant Number Two to mew the Contract as number MA-
017-10 01 11 5 0 for has additional year effective November 14,20W through end including November 13,
2010,and amead.AttschmuntB m reflect wamded pricing;
W-IMMA.c,the Parties issued Amewbat at Three to extend the Contract for an additional year
effecGveNovembax 14,20)0 through and including November 13,7,011,amad Attruhment B to reflect
amanded pricing,and change vardor name from Time Warner Telecom Holdings,Inc.toTW Time
wamer73o1du�gs,luc.;
WHEMAS,the Parties issued Ameadmanat Four to extend tine Contract for an additional year
effective November 14,2011 0nougltand including November 13,2012,reduce the contact amount by
10 a fa the period effective July J.2021 through ad hncluding November 13,2012;and change vendor
name to tw telecom holdings lac;
WEEREAS,the Parties issued AmendmentFive.to inmate imernetbondwidth in flu:amount of
$32,305.00 eflactim September 1,2011 tfaoughNovmnber 13,2012,
WH MEAS,the Pities des m to issue Amendment Six to upgrade the data circuit between
Sulanobisaster Recovery Site and the Couary Wide Area Network in the amount of$71,957.20 effective
November 1,2011 through November 13,20M
NOW,THEREFORE,in conelderidlon of the mutual obligations set forth herein,the Parties agreo
as follows:
1. Effective November 1,2011,Coadmotorsha0 providea 100mg P data cimult between the
Comity Wide Area Nrnvmk and the Solano Disaster Recovery She.
2. The total Commas Amomttforthepedod November 1,2011 duoughblovember 13,2o12is
Increased by$71,957.20.
1
Page 29 of 80
Attachment B
Camay of Orange Price Agreement No.N1000008297
nv telecom holdings,lw
3. Atme and contact copy of Attachment13 Cosr/Compensetlon for CommemrServices is
attached.
Bacept as otherwise expressly sec forth bar'ein,all terms and condilions contained indla Contract
and its amendments are incorporated by this reference as if fully satfortb herein aid shall remain
in full force and eMetas amended hereiu.
2
Page 30 of 80
Attachment B
County of Omnge price Aprennenl No.NIMOOOR297
sm telecom holdings,inc
IN WTITIDSS WMR80F,the pasties hereto heve executed this Ambbdment on the dates shown
opposite their respeotive signatures below:
tw telecom haldines inn.*:
DATE: p4-16-2ait SIGNATUILB: pA
PRINPNAMH 1 U
yna QyiS
�j TITLE: A55//S�f/7,{KIyJ'1' SGOYI: /'1 _
DATE: l �-G �I S.IGMTURE:
FRBdTNAM 7 (A (1f�
TME
1
alfdte eonuncdvgpazty isarnipromuoa Ihcdvwment mpstbeagnTi se=ad signamoma b Iha = Ligaalvraswathe
uNm ne(hh Cnicfvttheawsd ftr-ar ni essay Viaepmsided. Tim zemndiw.awclao b thexve�..is usisinnl
seen•wry,the GdctF>mn�d OFGar-army assistant tressure¢ in INc eliorndive,asiogiecmpamh sigaauve is aaegable
when xxampadsdbY a eonomle docmuen[ticmovoatle;We Legal arthv:ity vtihcaigodwe m biad Newmpwy.
COUNTY OF ORANOC
ApEllitiMIsubalvision of the State of Cadornla ,
TME:
DATE: 41 a
Approved as toform
Office of the Coanry Counsel ` (/
Orange Cowry.California
DATE:07 -26� I BY.
Deputy County Counsel
Approved by Board of Supervisors on:
3
Page 31 of 80
Attachment B
County ororunp Price AgreemenrNo.N10000DEP97
tw tekcom holdings,inc
ATTACBMENTB
COSTMOM'ENSATION FOR CONTRACTOR SERVICES
1. COMPENSATION
This is a fixed fee Contract between the County and Contractor for s mices provided in Attachment
A,Scope of Work ha Accordance with tbepdcing srecified below.
2. INITIAL SERVICE PURCHASE
Contractor shall supply the£oUewing sorv)ce for the period November 14,7010 through and
including November 13,20121 less 30%far the pnrlod MY 1,2011 through And including
November 13,2012,except As noted helow:
a-cuit Type Prom Address To Address Qty Tote)
Label I I Monthly
Fiber- IrigE 14MS,GrwdAve I 30IThe GStyDr.Sou41 1 $4,128.00
14
Fiber-6 1 Gi 14IXI S.Cxsnd Ave 1275 Bake Ave. f 54.128.00
Fiber-9 1 Gia 1400S-Grand Ave I840N.Pckhoff 1 $4,128.00
Fibar2 1 GigS 1400 S.Grand Ave 1 177D N.Broad we 1 $4,128.00
Pibev3 I CiRE 1400 S.Grand Ave 1001 S.G and Ave. 1 $4128.00
Ffl=4 1 QW 1400 S.Orand Ave 46017ambome Rd. 1 $ 128.00
Fiber-7 1 MgB I400 S.Grsnd Ave 1535 E.Orangewood 1 $4,128.00
Fiber•5 100mg•P 1400 S.Orand Ave Solano DRSire(effeciive 1 $5,725.60
1111/11 01rovgh L0112 (10%included
in coat
Nan-Recurring Chergeor 1
$3,250.00 for Fiber S
MedtTiamd t400 S.Grand Ave cGigabit Internet circuib $4,750.00
HISw/Gig (increasedhom 100rngto ($6,4MOD
Port 300mgeffective9/112011 monthly cost
through 1111312012) offec6ve
9/1/11 through
MY20M
10%included
in coati
Total 1 $33,646.00
($35,308.00
etfee0ve
9/l/I1 through
11113/2012)
($41.033.60
effective
I1/1/11
through
111IM2012)
4
Page 32 of 80
Attachment 6
County of Orange Price Agreement No.N1000DO9297
rwrelecom holdings,!no
.Mote; *Additivaal Cuuuty Location may be added and/or deleted to Gs schedule during the term of the
Contract. The Contract may be atnanded,as set fordl in paragraph C,to add circuit locations
Fee reduction for Contractor's failmn to notify County of planned and unplanned service interruptions,
reducfon in evaiinble circuit capacity,delays in repair or any odiar disruption of service, that result in on
individual circuit not meeting the 99.99%uptime for any sequential thirty(30)day period,
s
Page 33 of 80
Attachment B
County of0+angc Price Agreemeot No.N1000008297
nM le!eeenl holdings,in:
Per Service OWRE Percentage Creft
Less than I minute(99.00%aVaRabi ity) No credit
i minute up to 4hours 5%Of the MRC
4hours u2 to 8hours 10%of tho MRC
8 hours up to 12 hours 15%of the MRC
12 hours u to 16 bours 20%of the MRC
16 houiav to 24 boms 35%of the MRC
24 hours or greater 50%of die WC
6
Page 34 of 80
Attachment B
County oFOrnnge Price Agnsse entX0.N100000g297
tw telecom holdings,inc
3. PAYMENT TERMS
Initial Set-in: Invoices for initial set-up are to be submitted in ancan,unless otherwise directed in
this Contract, upon the satisfactory compledon and aeceprencc of testing of the entire System If
service does not meet acceptance specifications herein,Contractor assumes all costs and may not seek
reimbursement from County.
Moot v Service: Invoices for monthly service are payable monthly, in aaeus,unless otherwise
directed in this Contract Payment for monthly services, as specified in Attachment B, shall begin
upon the date of acceptance of tine Systern.
Contractor sball mfetcuce Connaa numltrr ou invoice. Payment will its net 30 days aflerteceipt of
an invoioe in a format acceptable to the County of Orange and verified and approved by the
agency/departrrwnt and subject to tontine Processing mquimments. The responsibility for providing
an acceptable invoice tests with the Contractor. Incomplete or incorrect invoices am not acceptable
and will be returned to the Contratmv furcotmetion.
Billing shall cover service and/or goods netpre dously invoiced. The Contractor shall reimburse the
County of Orango for any manes paid to the Coamoor for goods or service not provided or whets
goods a services do not meet the Coutmctrcquiremants
Payments made by the County shall notprecludo the right of the County from thereafor disputing my
items of services involved or biflud under this Contract and shall not be constmed as acceptance of
my pact of the goods or services.
4. PAYM[EN TINV07CING INSTRUCTIONS: The Contractor will provide m invoice an
Contractor's letterbeed for services rendered. Bach invoice will have a number-and will include the
11DUO ing infotmation:
1. Cno actor's name and address
2. Contrracau's remittance address(if dif etentfrom 1 above)
3. Name of County agency department(if county agency is actual customer name)
A. Qyunty Contract number(to be added as put of the billing address)
5. Setvim dawn)
6. CimuitlaW
7. Service description
8 Total
Invoices and support documentation am to be forwarded to:
County of Orange
150113 Saint Andrew Place,Suite 200
$oamAm,CA 92705
Attn: Amount Payable
7
-- Page 35 of 80
Attachment B
Jtelecom.
Extended NLAN Service Order Form
Customer Information
Select Order Adtvtty Status of Contract TINTO Standard Terms and Comment On Flk Castled; 1111deas
TWTC Master SeNAx Agreement Attached
Customer Name County of OmMie ACCome Number 2BM14
Samuel Address 12 CINC Center Plena B311nit Addre55 County M Charge;1501 E$Writ AMmW PL M 200
City,County.State,Zip Saints Ana CA 91 City.County.State,Zip SamaAna,CAS2705
Extended NLAN Service Information
(1) Product Name F Sarin ENLAN (2) Typed SerWce F Paldt ftldm FJJLAN
(1) Product Name Enterprise SNLAN (2) Bandwidth Type
(3) Configuration PomPro-Print (4) VLARTag Semite Unrmged Tagged Servlo.(UTS)
(5) #d Owens =1 am Pon =10eMPat =10OPed
(s) COS S.mlee Package F Basle
Pricing end Charge Summer
Tote)Monthly Raurdng Chage(MRC) $ 5,125'60 Total Non-Recurring Charge(NRC) $ 3,250D0
Contract Term(W) 12 MmMs
LGHN6fi6UU9.
Pessntage of interstate Usega(PM) JOB Number
Addifiw .le,as may be oeaeaedl If Cie..,soma.coley he Inetaeloo orn Wring he MUM"Whice,me comae Wd.aW d+:mMmlydemamdw palm.
Remarks
TERM:The term of title Service Order shall be co-terminus with Customers WAN Services and shag terminate an November 14,2012.
ENUN Shol hom IXanee County le scene Court,net.Center.10ome mrvMidth.and DUKE Pries,M bet SUN-O Uca)Hanson VAIN MNLLMMO Flow pH mother M oost Slmen
thes,.00 ane Come,otIXHlOe won as requtrM to UTENO OMARK AT Sol.DATA CENTER AND PROVIDE RACK SPACE for TW Wis..a acme alb.TM WlapeW
DMARK N Omltge county sae.12 OMc.
SlmtlHtl edoet Wlndwrs:NTC maypeRo,m muene natlwM maintenmce aeMean 12:01 AM ens 6:00 AM keel Ilene,M1hnsay INVupM1 SMtlay.T1TG meyaKantl OrsahWub
tldYlon al w xiMonit a n naeacary.
Customer siprotes and aceper this ahemN MNEoh,Wet EcwdW NIANrnealmal Ethirme Sent.O:der,Mlkre a+Mbchpmwessha asecosad'hiNTC SImOie Tomeers
Cwarwor the Msmer Senea Agreement mtened tom Main page And he V"NTV Smdu ONM. DestrM Insblbllm Ode Nreazholde:b m%ecrb'RVTC inlemel pmmsbning
inlercals,xilicM1 dttspedfi[IosvMn type,guan111Y.ktPliw oM avaeNll'M- P:wA bning Inlemlbpi s alley rereipl G slgnM H v mtl MY dherMui:M d=manlWIM,Ton MM
eceanlperSonv'nplv.MeaNm Ouesale toeuNmmerupon reeelplotylmpiire!Nkrmallon. Cue10moa VMetlaee IM1Hthe In: uWae ling Sits OMemQ omens CehNthae
hII Md Pomp1e16 dJlh0lip'bbNd NSIOmH,
twtaledom holding.ta. Customer. County
oof orange
Signature: x Stimulate:
Name: WMun lersteddem. Name: Paula Kielich
Title: VPJGM Title: iTComraoU Man er
oats: x Data:
Salesperson: Ronald Mills
Venbn 5.5 ReWSM 52411 N/mbmm-Geddimhl Pape 1.15
Page 36 of 80
Attachment B
Extended NLAN Service Order Form &elecom_
' `F ENliN'M atro,.L•o Ea'S Mn.Eo4.m auron
sNecl ° Selx�CllYl _
PM InwWn NUMa Lxallen et lxgbn iR LMSYM 0] Laee6an 66
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PizPwl6he PeR] ISb Pul] 1L8 StlW Pal Sbef StlMpS 6h6!
. 1W ME 1W NE SaN46viMtlBO Sgatl3wtlMlOff
P OL9nv 12CiAc[ erfl®RaMli6104 61S WTmna@ SfW
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MP oematlgmlFV OE WOE
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aervAUIdJINPO S,aL ' — ibOO.W 5 ^•1..�1>60.W S i. 'S
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Page 37 of 80
Attachment B
Extended NLAN Service Order Form 4i)telecom.
ENLAN Metro Locatlon Information
Cit,Name oLIIMn. I CelJentl I I SO.a ± I I 5e1aaci117
Pon Lrcztion NumGr bwllPn 61 L.Mlpn SY L.wtlen W I I L..a.rt G1
N.rkAilw OnNal OIIN.I NeM.A Saluz? .Yelvrork Slatu¢?
Ineri. Optical PoK.I IMMaze Tvve? InlerbceT pe±
PM S'va Pen11Gb Pon21Gb so.firl Size± Select Pm Sm]
BaMwitlN YOO Mb lb]Mb SekclBMtlwAlh? 6AecIBaMwi$h?
Phyfral MUress 12 C'mc C.nler PlazaR :6H 675 W Tmas Street 3u"ww
Wv.Cwn s.nla An..IXa -a County.' Fairfieltl.sket,Cpunl
Sat&LP Ltell. 94533 weteiti.94533
D.mardHiri MPOE WIDE
aupt irp Namu Cbu'ntyaOranp. Die.c..,
Sit.coulee lSt..lbi, te,Nua
se.ph.-N.. f n14t W44e91 1 914)W+9%I
Naurs prAmsss lsa -`i m bam
M.11mI A.ws. C.".a St..Nwnv Cwtact5mw 14.
NPNNXY, 71ME45 T%1298
Cline,to
n4Tc Epfgmenl
Typo of H -OfifiwE a C FmE PORT WC, m v
S 6EO.a4 ISSISm S itServlwlBarbwltlih k6lC 4 mB� t fiSB.fiD 5 S
Bantlwltllh NNC i Y.SW.W E LT66Gfl E S
Typ.2MiC
Tw2NRC W.W S..." It S -
C :b e, I li ] it CV? I Sdmct ] Selectw,?
Pp[lmaS.n NumCX bwll.n K LeuNen 06 Lbwtl.n M Li—elun kB
Nt.statue NMwM6Wus? W..K Status? Ne..ik Smlue] Nelx'.m Slams?
lmerlece Im.m:<rvPe± Ire.0.T .? "I.e.- Tece] mtana=er a
Pen 6Ve a'alecl2pn Si¢P SNecl Ppn bizz] Selen Port Size? Selzer Porl biu]
P.n Selar:
B.Mwehh bveW S.bclBMtlxVClh] Soled BantlmNh? S.BCI 9aMwgN? SantlwtllM
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Need More Locations r
REMARKS
@dAN SaMca ham Onnpa County f.3pMrp Cwrily Oala CeNm.lOMbhutivAtllh,aptl ei4E PMbtl bvlh s4esOPYwI NpM.Nvnllr MullldMia F3v Poreufi.mer ezpuest 6bven Wzenp ena4al
SNe.CwNY.lara�pe Eba rapuirtltoEXIEND DtdAIiKRT$cknn DATACEMEP MVa PeONBE PACK SPACE br]Wt.lemm al zamea%e.TN wMMantl OMASKaI Drnn4.wunty a%411 C1ve
TWTC cu.l.m.r v
Iwial mhl.l
Versipn 5.5 RevisW 62411 WMeer,-Coill ial 111,2 05
Page 38 of 80
Attachment B
Extended Native LAN(ENLAN) �Jtelecom_
ENLAN Virtual Port Location Information
POn Lodeendsuzmer O.CLMne I MCmd, OWadl MAC Atldr Selcu Ne.010 MAC AWr Select RW . M4CMEr
BandNdlh 100 Mhm 100 Mhea 8d.d B.d.61h, SNetIBMtlWAtM
COL.Wn 1 Mason:IMM,CA 1970 Bane—,Cduand CA
Pl,ApAudnoee TM.;l,i.,CA 19708,oadwa;Oahland CA
OkyCojnty 7M..;GnnosCsu.ly 1970 Bala
SlAv.LP CNibmle 92610 Calibmia9<612
oemar@1mlFlr ended OPce Cemral OB.
ClaziRaAoneleihed 802.1P
Suoan Name I Cenud Ofe. Central Oft.
Slra Corned Tedl on Ddy T,V on Oun,
site Phone Me, W94,2L300 19251953-00W
Hours d A.. NHR 29Hn
MI ID
E mml
ENIAN Bendxlah MRC $ 746.00 $ ? .00 $
ENtAN BUHu1Mh N.9C 50.00 0.00 $ 8
M.L. O.&MACAddr S.W.1011? MACAdtlr SokeI NW 010 MAC MYr SeleclNVl Cny? MAC Atldr 6Yed Neq Cl µACAdtlr
Bentivndtli eM Sekd Baneedon? Baled BaMxiolh? SeW.H lundd a Bend BeNutidN?
CO--hors it
Phydod More.
Cry.Ccun
ad.LP
OmnardRMN
0eev0.lion Medloe SWAP
Swan,Ndne
skoConlad
Site Phone Na
H.edA.o..
Ckcuh to
TNTC E4ul monl
ENLANBentivdem MFlC S S S $
FMAN Banseeft NRC is $ S $
Pal LoeetlonBMAC Mdr a.,.tie.ale MAC Aedr 3ele914WO11 MACAddr U.NMCMy? MAOmd, Seectt Neil Cily? I WC Mar
BndnAm sneeal SN610ardAme SNeq Bbldmdlh? seen BAvs Axh? Select Banowrmh?
w iuxa
P Ardms
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911eC od
Sae Phone No.
Havrsol Ac.w
amuitlD
TNTC Pqu mare
ENtAN BendwiMMRC s s a s
FNLAN BeMWAm NRC E B $ it
Remarks
ENLAN Service from Ore a County to SOlm County Dena Comer.100rt BanAyidh,exi GgE Pone al Celh ones-Optical Hannef wm Mulll-Moe.Feer per customer
request Steven Huang email of 8I10.County of Oneonta will be acquiretl to EXTEND DMARK AT Conn.DATA CENTER AND PPOADE RACK SPAOE for h Wood.at
same Me will eland DMARK at O.MQO county age,12 Wis.
MTC Cumem ,
InoW Mltlei ' X
vewso 5.5 Fel SW mtelecom-Confioenlid Pal.ads
Page 39 of 80
Attachment B
,O)v telecotn
{Switched N.LAN Service :Addendum
GanN TBImD:CY310maecMm'BiMAed PnB dArPP6lp el pl Ns9pe[IY3BmI6 wJ mMM1Nns M1zeM rNatiry loTWTCS AnmM NBXvaLM'6aMsv.
Cu61pnW a'sB�mps IBTVITCESIaMmtl TBrm6aM Cmtlili3n W 1ABMUIMSmia PottBmegeNBABtl AareloaMlmxpozlN by Ws relereas.
Suvlm:11u8rvikAep NLW(6NIFN(emWxlsBxniaMM ENPma[xeruicv Yuxlm4rporalw Ev¢sxiklrry IxMdo-ryinb YvprWi¢.I WAUPFNPused
ENvnat svNMa F Va TVf TC naMAM.Mz u a CPalarycn avava W I ell Bw6 mUtlple CLncmm b acres a slpr W,mars W urisM metro ENemel
InhxWclme WaiyM1 ElFamMpaM1s 11e1M unlqus to Baml.Wix�dPal ryslBm&dM Itt IWtliOre.RSSNV.N9aMfe wHlxapl wOmryVdA i1)Td990!
IMw d va Tcgerc abs,c tl(H V 10s)eN6ken LMu 9oYm[Wr.XL M loabaccRrd amass Tan9 TVM na nhN Trace
MlyEy aIAee CtleuN6mfimeOxaz,IdM Cb rW ernashcamBNleBA BnN
VNANAT..arfora.
a CVne9unllBm lire pnmaryiWTCtlyloymenllmMvn Nlasirq mElMmelEw'2T In MTCSCanuN u(LmwM NlMme:sw#Avs Ircxlotlel
aanaNc uwmerbolian.Tn COEWme1 axilcM1eMlha sntlnsEBplgo-lm Nn Cuabmarpramnwaze irvmeonnoaotl Wry Mni-GpaNl anWBr IO
GIABbM1 OM1BmBI®rd¢.N ame NSLL'Iws,Qemma wNnerparlsmry0e oXwaOham VmxpcnryONET�bnW1 Nu'rymaN.TFna ortesppilArq
BmntlpM azaeYrlEtl BwrWEG.NETinhxMWmbNaTWT000 ENe sxihM1xbere NsylNgeBnned WNB tvq[FM 9hemetruAroNM1A BNW
loxtimE.
MalnLnvnm MTC mwpnell Pf/TC 618AN epulpmaNremdsty han XmTWTC NeNmR Oparafion CenlW(NP:y XCuslBmveReneMv[EEm'cd
ex.IM1e CuslwaamuddlNalACh GrePrvusN Ylldpa,Cdwatloard tlesvbP NPsavb iuua.hoElemlEenEf[atim,VouElesFaWnp,mN mwltYcn
sashicpmca a,sa'said.0 NGC persanrW.Navledatl wes,wMnlnuermdu8en mrylredvnNa NOCcvilax5n9 Ne GyOpsraBmu hr
mSPbmPantlloraispWrAWaIxANclart
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JZETCWIImplYa mai.,1ENamvl aarnl asmeM IMrsearyl d anElad Or nan
(Ty EqulpmWtleggetl MEukYPia"I al Cu[.dbytte IsclVeaO an0mmdAa]WiWTLUAessdAalwisa slmMperaArnmmdwW NP
G¢Icmer aMkr zzl tl epvlpmeN Is tlPPI ryP!vtl BwreB By IYs CmIBmB:.
Cudan"RMODS11,1110":
(xi Cunomvls rnpmibb IsrpaAypv nPumnnx4ortmW In r.IvcAlo IOWP NA apWpmsnL
12)Oses.is rB arand.forprWft primvry p..rerXre$NUN ea,ra.m.
N e rtivl[e IssYe resYlla bom U's9amer MI maBfiry NB MpersiN Iltin a el rmp Ngve.G[slcmc w11 wminue to bB OIYetl ro:Xw uM ro mC N eBEilian MII
PaYa^YaPPT NactagnaaxuleE w:NeeNwresdWm.
ae marks
emnXwganaAe . rq G �nrndgaeem EX1EX OIAWXAiatlwMaBOaIER IJInPP%'IaEPACKSFACEIrTM1'Ya mYvvnvYe.TA'Ircl
memttMeKazOraryswntlula,lttnt
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Page 40 of 80
Attachment B
�JKelecom
VLAN Tag Serulce Order Form
VLAN Tag Order Information
cuNomel Name Colwatom a QUntaggnd SeNlae NMatrawo
ACCGant NUmb& 26e314 Qlntllvidual Toggne S.ry (in
Assettated SeAilco Orda Number QE Unllmitesi Tagged S.nion(UT51
CSNumber
CIIcuf 1p Told Number of Tam I Told MRC of Taps Told NRC of Toga
amll Tow Numbw olrls 745 -WMRC*fNmTns SO- ToWNRCONew Ta, O
aNh2 TOWNumhxol Chomxl Taps OO TOW MAC d Due, aTaps O Tsw MCd0bweeo Tips O
amts Tvwlewsbvd Rr Tns OO Tml MRCOIRwa4Teu TWNACAR.WTm
Tag Number antl Activity Information
(For Individual Toggod Service use only)
Tag Number AdlvRy WC NRC I Tag Number ACRyRy MRC NRC
a8
25
s sa
e 9
5 m
fi 91
T 92
8 31
11 9z
0
11
12 9
13 2e
1¢
Is p
us
1] 2
10 9
19 4
as
as
21
pp
21 8
2¢ In
25 In
Remarks
WY S—f"hu.Usumlw*b&am Canymamna.lWmbbmtlwldh surd 01AEPo N al en son-CpVw Hum(Nilh MWtl MMe p rpvmeaurr Wrusu —,e;wlWP�1e Ouu,W
Cra�05wlll hOrtgWM la FXtENndAAPKAT SAao nATA CFNTERANC PgONDE RACK 9PACElaIN Ideam al0mailln l W wllleneM OMIAI:YOMnpeAwny01W,12 q'Ac
Nsmnaappmra an0 aveRs Wi W.tITp 5vakfi Cmv,wNd WIN InmmmaR0Wea6mtla9tlTlVTCSantlaNTumsaw[atliwm or We M¢Nn Savlm Aplwmer(rererm wffiaveand We NaWe
W1/FNntlet kllNi0.aJMal EWene5sWm0Nv.Tm V1AX TaA 5aM[<miY M Buppv[aNNYyv2NnMMp Prokte'S[e g.CeP,VR,SM1]&pen0ly w tlletrensmrtmMSMyy usM to tltluvtlM
FNvetalr1 /NaNe lMl/61vWa1 tN.Nl2alhnal fNnref Swlm.0am1 LubAatlur Bate IarxN amvlz whfttt blW(C Inlemtl pmArIo111M InW Vilz wNN ate5pMA0b PYMR typGquantlty kmWn
Inf isWo.Xy. lumer pNedl,s dedfla,wivitol or9prsV Us Oa enyo ftyu?s d�mealaedaelpert wtmmd peam MlpMvy¢ilmn tlu¢Oab bwdanerupSlrCvpt o(iA rtquW
InlamaAM GlaomvetlmOwlM9es MM WGInEIuMrwd01Uh9 Us Okn m CUMnBfs doll'has NB mE mhpkhaWlMN b bin0 Neanv.
M(N¢mm1MWrmlW.
.....Me C..WoroMupa
90nbee: a 91Armhae: a&549
Named lwl: William FredNideen N-.A( meol: Paula K1.110
TM: VPIGM Tina: ITConl—n Mxna er
U. OBte: x
Saw,aOmn: Ronaltl Witt
Vv®n55 RaNW&2411 rw WeOmm-Cad00Md Ppo505
Page 41 of 80
Attachment B
CoumyufOrauge Price Agreement No.N1000006297
tw telecom holdings,his
AMENDME NT wo.5
TO
CONTRACT NIJI"ER NIOOW98297 AS MA417-10011150
FOR
WIDE AREA NETWORK TRANSPORT SERVICES
I'OR
ORANGE COUNTY
This Amendment Number Five(hereinafter"Amendment')is trade and entered into by the
County ofOrmige,a political mnbdivisiar of the Stem ofCelifinnia,(heminafter mfnrrcd(a as,"County")
and tw telecom holdings Inc.,with its principal place of business at 10475 Park Meadows Drive,
Littleton,CO 00124,(hereinafter referred to as"Contractor"),which may be referred individually as
"Party"or collectively as'Tarties".
WHEREAS,County and Contractor.asserted CoatraotN100000112,47 for wide area mdwmdc
tmnsporkservices for a three year term ca erearmingNovember 13,2006,hereinafter"Contmot";and
WHEREAS,the Parties issued Amendment Number One to amend Attachment of the Contract,
WHEREAS,the Parties issued Amendment Num4w,Two to renew the Coutrect m number MA-
017-10011150 for an additional year effective November 14,2009 through and Including November 13,
2010,and amend AtteohnuwtB to reflect amended pricing;
WHEREAS,the Parties issued Amendment Tines to extend the Contract for an additional year
effective November 14,2010 through and including November 13,2011,emend Attachment B to refloat
emended pricing,and change vendor mine from Time Wamer Telecom Holdings,Inc,to TW Time
Warner Holdings,Inc.;
WHEREAS,the Parties issued Amendment Four to mond the Contract for an additional year•
ef5arliveNovember 14,2011 through and including November 13,2012,reduce the contract amount by
10%fa the period effective July 1,2011 through and including November 13,2012;mid change vendor
name to,tw telecom holdings inc.;
WHBRRAS,the Pieties desire to Jews Amendment Five to increase intem et bandwidth in the
amount of$32,305,00 effective September 1,2011 through November 13,2012.
NOW,THEREFORE,in consideration of the mutual obligations set forth heminy the Parties agree as
follows;
1. Effective September 1,2011 through November 13,2012,increase internet bandwith from
200mg to 300mg.
2. The total Contract Amount for the period September I,2011 through November 13,2012 is
increased by$32,305.OD.
3. A true and ccrrea copy ofAttschmentB CosNCanpensadon for Contractor Services is
attaobed,
1
Page 42 of 80
Attachment 6
County sfOutage Prim Agreement Na.N1000009297
tw telecom holding;Inc
4. Excopt as otherwise expressly set forth heroin,all terms mid emhditions contained in the
Contrast as amended shall remain iafull force and affect as amended herein.
2
Page 43 of 80
Attachment B
County ofOmuge Price AgreemeatNo.N1000008297
by telecrom holdings,ine
IN WITNESS WHEREOF,the parties berate have executed this Amendment on the dates
shown opposite their respective signatures below:
to,(elecrnn holdinee Inc.*:
DATE: SIGNATGRE: IAY—&pny
PRWTNAME: TinDev(s
en nr ce Pe8 e0t
p (l TITLE: DepotyGeasral Counsel
DATE: 1 5 SIGNATURE: ✓'�
PRINT NAME: W,
TITLE: V
'Ifthe conbecdng perryls a eerpom6on,Ilia doconteareast iiesigned by two aorpomm atawrs.Tnefirst sigmone at be
ellbwthocheirmnofthe Saord.President,wm Vim President. The uaondslgnemromvu bethesecretery,mmsinont
whan ery,tineanied by a cant roadoorsoysenexan Ueamrws le fheenornafli esinstaewo bind the orepeny. eproh7e
when ecmmpmded by n eorporetcdauneatdenmatladng the legal tWhoray oPilreslgnetam m bind the wmpsny.
COUNTY OF ORANGE
Apolitical subdivision of the State of California
SIGNATURRn:, t/A) d LAIC.
TITLE;
DATE:
3
Page 44 of 80
Attachment B
Covavorcrenga Pricer AgxranentNa.NICOODDR297
tw telecom holdings,Inc
ATTACHMENT B
COST/COMPENSATION FOR CONTRACTOR SERVICES
1. COMPENSATION
This is a fixed fee Contract between the Comity and Coutmetar for services provided in Attachment
A,Scope of Waic in accordance with Ore pricing specified below.
2. INWALSMVICEPURCH42D
Contractor shall arpphy the following servicefor Ore period November 14,2010 through and
includingNovanbe•13,2012,less 10%for the period July 1,2011 through and including
November 13,2012,except as noted below:
Circuit Type From Address To Address Qty Totes
Label Man
Fiber, 1 GigE 1400 S.Grand Ave 301 The City Dr.South 1 $4,128.00
14
Fiber-6 1 Gi II 11400 S.Grand Ave 127513erkcic Ave. 1 $4,128.00
Fiber9 1 GleE 11400 S.Grand Ave 140 N.Eokhoff 1 $4128.00
Fiber-2 I GbJ3 11400 S.Orand Ave 1770 N.Broadway 1 $4128,00
F16er,3 1 OWE 1400 S.Orand Ave 1001 S.Grand Ave. 1 $4128.00
Fiber-4 1 GbE 1 1400 S.Grand Ave 46011amboreeRd. 1 $4128.00
Fibeh7 1400S.GrandAve 1535 E.Oren ewoad 1 $4,128.00
Maed 1400 S.Grand Ave <Gigabit Internet cimaiU $4,750.00
EIS w/GIB (iilcesse� a�.�,0,Ojyg ( �42,1lg
Pat 300?p8 atTgctime-QQ2011 niP cost
Ortough7'I i3l4012) a oi.).y0
l: s0k�ln`ded
id;coat
Total 1 $33,646.00
I$Y19�2014
Note: *Additional County location may be added and/or deleted to this schedule during the term of the
Contract. The Contract may be attended,asset forth in paragraph C,to add circuit locations
Fee reduction for Contractor's failure to notify Coady of planned and unplanned service Interruptions,
reduction in available circuit capacity,delays In repairerany other dismptian o£sawuce,that result in an
Individual Owed act meeting the 99.99%uptim,for any sequential thidy(30)day period:
4
Page 45 of 80
Attachment B
county of Omnge price Agreement No.N70000082V
tw tekwmholdinp,Inc
Per Setvira Out me Pet•cenfn a Credit
Laos than 1 atiuute 9,00%wailabili Na credit
I Minuft UP to 4 hares 5%of the MRC
4 hours up to 8 hours 10°k oftM MRC
8 bollis up to 12 horu•s 15%of the MRC
12 hotas up k hours 20%ofiho MRC
lb houmvp a,24 hour 35%of the MRC
24 hours or greater 50%offhe MRC
5
Page 46 of 80
Attachment B
County of Orange Price AgreementNo.NIDOOOD9297
wiWemm holdings,ins
3. PAYMENT TERMS
Initial Set-up: Invoices for initial set-up are to be submitted in exercise,unless otherwise directed in
this Contract, upon the satisfactory completion and acceptance of testing of the eirthe system. If
service does n etmeet accepimrce specifications homi%Contractor assumes all costs and may not seek
reimbursementfronr County.
Monthly Setvice• Invoices for monthly sravica are payable monthly, in arrears, unless otherwise
directed In this Contract Payment fro•mouOdy services, as specified In Attachment B,shall begin
upon the date ofucceptsnce o£fhe system.
Contractor simli mfereneo Ceutract ntanbec on]nvoim. Payment will be not 30 days after receipt of
an invoices in a format acceptable to the County of Orange and veri lle d and approved by the
agency/department and subject to routine processing requirements. Tlm responsibility for pri iding
on acceptable invoice tests with Ore Contractor. Incomplete or incon•ect invoices ere not acceptable
and will be returned to the Contractor for correction.
Billing shall cover service andlor goods not previously invoiced. The Contractor shall reimburse the
County of Orange for any movies paid to the Contractor for goods or service not provided or when
goads or services do not meet the Contract requirements.
Paymeds made by the County shall not prectude,the right ofilie,County fine thereafter disputing any
items or services involved or billed under this Contact and shell not be construed as acceptance of
any part of the goods or sordoes.
4. PAYMENTIINVOICING INSTRUCTIONS: The Contractor will provide on invoice on
Contractor's letterhead for services tendered. Each invoice will have a number and will include the
following information:
1. Contractor's name and address
2. Contractor's remittance address(ifdiffereatfrom l above)
3. Name of County agency department(if county agency is actual customermmnc)
4. County Contract number(to he added as pert of tlrc billing address)
5. Service dam(s)
6. Circuit Label
7. Service description
8. Total
Invoices and support documentation are to be forwarded to:
County of Orange
1501 E.Saint Andrew Piece,Suite 200
Santa Ana,CA 92705
Attu: Account Payable
6
Page 47 of 80
Attachment 6
Servlce ModNlcatloq_OrdBt Form `Jteleconn.
TN+BeMwaGrbeAemd NbgMbleRmhONlnpalro.gaM Ib mmMeuarWmletpWvemM'eamprmNOWwnku
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faubmerA cx Naremre wwsww0fnerx WQNbmerenalVYfC.TPrtCwa lmPNnmganeNlsbrNetwNam:emeMMeuhe�ewmtlrmle
SeNwOmN.nNcxomeMep;e4tlmmlearrvnunWtloPsweWn.XRu:e bAwnad Ortreanah BMa WaueMNepiereammenl(sl MllasNkaB
pNpmpeBptlerronexNd,tlp.9eMeswaaretaupnwYamalepMep:.eme:vudagepphagomdtl. �^ 1
WnNYPxuMnp OM1UR.(nRCp ftptR NanflewMnpaM;pe PaW)% �_+�_�
ta:emmerem pmadYNUY PNMabalmx tep'ssenlULLPmb ba WAU ee wawaam bhbCuwemwm NNBeeelw O:Oer,
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Im[a e:NNb1^M6mnN ee:rbe.h;usxflnmM1#Nwnvmxw0awmrminausmwlal,mmaemme••
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enwvwmatmxbnw+eaeemaNmuproma+euoxmarmm�muwexwxm�v YwaasetYmwawmm.Nanacu;aReurecaY�
aenlwaeereeaW - teW awlxweeArmee•awaana CSUemh 01YM
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3LQnp Noatlxralwpuap{rpro0h:squmlpnert6 IlbeamlpleaxiTeenia.AAiRWIMIbo1M1rC6
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Page 48 of 80
Attachment 6
County of Orange Price Agreement No.N1000008297
tw telecom holdings,Inc
AMENDMENT NO.4
TO
CONTRACT NUMBER N1000008297 AS MA-017-10011150
-FOR
WIDE AREA NETWORK TRANSPORT SERVICES
FOR
ORANGE COUNTY
This Amendment Number Four(hereinafter"Amendment")is made and entered into by the
County of Orange,a political subdivision of the State of California,(hereinafter referred to as"County')
and tw telecom holdings Inc.,with its principal place of business at 10475 Park Meadows Dave,
Lildemn,CO 80124,(bereinefterreferred toas"Contraetor'%which maybereferredindividually as
'Pent}°'or w1kxdve(y ss"Pardee'.
WHEREAS,County and Contractor assumed ConractN 1000008297 for wide trust network
transport services for a three-year term commencing November 13,2006,hereinafter"Cont=V';and
WHEREAS,the Pardee issued Amendment Number One to amend Attachment A of the Contract
WHEREAS,the Patties issued Amendment Number Two to renew the Contract as numberMA-
017.10011150 for an additional year effective November 14,2009 through and including November 13,
2010,and amend Attachment B to reflect amended pricing;
WHEREAS,the Parties issued Amendment Three to extend the Contract for an additional year
affective November 14,2010 through and including November 13,2011,amend Attachment to reflect
amended pricing and change vendor name fmm'rime Warner Telecom Holdings,Inc,toTW Time
Warner Holdings,Inc.;
WHEREAS,the Parties desire to Issue Amendment Four to extend the Contract for an additional
year effective November 14,2011 through and including November 13,2012,reduce the contract amount
by 10%for the period effective July 1,2011 through and including November 13,2012;god change
vendor name to tw telecom holdings inc.;
NOW,THEREFORE,in consideration ofthe mutual obligations stet forth herein,the Parties agree
as follows;
1. The term of the Contract N1009008297,now MA-017-10011150,is extended for a period of
one year,thereby amending the Contract period effective November 14,2011 through and
Including Novernber 13,2012,unisss otherwise terminated by County.
2, The total Contract Amount for the period July 1,2011 through and including November 13,
2011 will be reduced by I(Ate for an annual not to exceed amount of g388,6l l.30.
3. The total Contract Amount for the period November 14,2011 through November 13,2012
shall will be reduced by 10%fur a not exceed amount of$363,376,80.
4. A true and correct copy of Attachment B Cost/Compensation for Contractor Services is
attached.
1
Page 49 of 80
Attachment E
County ofOmnge Price Agreement Na NIOODDD8297
M teleram holdings,too
Except as otherwise expressly set forth herein,all terms and conditions contained in the Contract
and its amendments are incorporated by this reference as if fully sat forth heroin and shall remain
in full force and effect as emended herein.
z
Page 50 of 80
Attachment B
County of Orange Price Agreement Na.N1000009297
tw telecom holdings,Inc
IN WITNESS WHEREOF,the parties hereto have executed this Amendment an the dotes shown
opposite their respective signatures below:
tw telecoons holdings ine.r:
—�
DATE: �I I U I l o I SIGNATURE: iJ97M 7r r ('VI.C�
PRINT NAME:: nu�NA A 0 H re v-
TITLE: v P - &I I.; E.L.—
DATE: SIGNATURE: 1M4 1d*
PRINTNAME: 646t Ds'yts
TITLE: As5;s'fttq' Secretary
i
�tfthcemnmoing pmry Is a eorpomuan,lhedocumatmuabesigied by two wryomtl oRrors. The fimtsignnmro muss be
olNm Ne Chairmen oCthc Board,Pmaidrt,or any Vlec PruMdml. 7bnsec Wslgtmtum=Abct eu retery,mmslant
when acc m anted b a Corp ruic do,to eny dvoocnt w ng thes. In the elterslive,asingle roto bind thc-m Iesewpmbie
when accompanied byn wrpemie document demonnmsingtbe kgel eu0odry ofW:signslurt to bind Nernmpmy.
COUNTY OF ORANGE
A political guhdl on of the Stat�e�of Ce�llf�or4a
SIGNATURE: 'LF+GI�
TITLE: A __
DATE:
Approved by Hoard of Supervisors on:
Ap ved as
O of th n -e 1
Deputy
3
Page 51 of 80
Attachment 6
County of Orange Pd.Agnsment Nc.NI o00008297
tw telecom holdings,inc
ATTACHMENT B
COST/COAVENSATION FOR CONTRACTOR SERVICES
1. COMPENSATION
This is a fixed fee Contract between the County and Contractor for services provided in Attachment
A,Scope of Work in accordance with the pricing specified below.
2. I MMI,SERVICE PURCHASE
Contractor shall supply the following service for the period November 14,2010 through and
including November 13,2012,leas 10%for the period July 1,2011 through and including
November 13,2012t
Circuit Type Fevm Address To Address Illy Total
Label Monthly
Fiber-14 1 Gi 1400 S.Grand Ave 301 The City Dr.South 1 $4128.00
Fiber-6 1 of 1400 S.Grand Ave 1275 Berkel Ave. 1 $4129.00
Fiber-9 1 Gi E 1400 S.Grand Ave 840 N.Eckhoff 1 $4129.00
Fiber-2 1 Gi 1400 S.Grand Ave 1770N.Broadway l $4 129.00
Fiber-3 1 Gi 1400 S.Grand Ave 1001 S.Grand Ave. I $4129.00
Fiber4 1 Gi 1400 S.Grand Ave 4601 3amborue Rd. 1 $4.128.00
Fiben7 I Gi E 1400 S.Gmnd Ave 1535 E.Orangewood I $4 129.00
FizedrTiercd 1400 S.Omnd Ave Kiigabit httemet oirouit> $4,750.00
HIS w/Oig
Port
Total I 533 646.00
Note: $Additional County location may be added andlor deleted to this schedule during the tern of the
Contract. The Contract may be amended,as set forth in paragraph C,to add circuit locations
Fee reduction for Contractor's failure to notify County of planned and unplanned service interruptions,
reduction in available cimuit capacity,delays in repairor any other disruption of service,that result in an
individual oimuit not meeting the 99.99%optima for any sequential thirty(30)day period:
PerService0wattle Percents eCredit
Less than l minute 99.00%availability) No credit
1 minute up to 4 hours 5W.of the MRC
4 boom up to 8 hours 10%ofthe MRC
8 boom u to 12 hours 151/.ofthe MRC
12 hours up to 16 hours 20%of the MRC
16 hours up to24hours 35%o£the MRC
24 hours or granter 50%of the MRC
4
Page 52 of 80
Attachment B
County oforange Price Agreement No.N100000S297
tw telecom holdings,im
3. PAYMENT TERMS
Initial Setup: Invoiess for initial set-up are to be submitted In arrears,unless otherwise directed in
this Contract upon the satisfactory completion and acceptance of testing of the entire system. If
service does not meat acceptance specifications herein,Contractor assumes all costs and may not seek
reimbursement from County,
Monthly Service: Invoices for monthly service are payable monthly, in arrears,unless otherwise
directed in this Contract. Payment fir monthly servces,as specified in Attachment B,shell begin
upon the date of acceptance of the system.
Contractor shall reference Contract number on invoice. Payment will be net 30 days after receipt of
an invoice in a format acceptable to the County of Orange and verged and approved by the
agencyldepmtment and subject to motion processing requirements. The responsibility for providing
an acceptable invoice rests with the Contractor. Incomplete or incorrect invoices are not acceptable
and will be returned to the Contractor for correction.
Billing shall cover service andlor goods not previously invoiced. The Contractor shalt reimburse the
County of Orange for any monies paid to the Contractor for goods or service not provided or when
goods or services do not meet the Contract requirements.
Payments made by the County shall not preclude the right of the County from thereafter disputing any
items or services involved or billed under this Contract and shall not be consnued as aecepmnce of
any part of the goods or services.
4. PAYMENT/INVOICING INSTRUCTIONS: The Contractor will provide an invoice on
Contractor's letterhead for services rendered. Each invoice will have a number andwill include,the
following information:
1. Contractor's name and address
2. Conh=Wr's remittance address(if WIlmantfrom l above)
3. Noun of County agency department(if county agency is actual customer name)
4. County Contract number(to be added es part of the billing address)
5. Servicedate(a)
6. Circuit Label
7. Swim description
S. Total
Invoices and support documentation art,to be forwarded to:
County of Orange
1501 E.Saint Andrew Place,Suite 200
Santa Ana,CA 92705
Attn: Account Payable
5
Page 53 of 80
Attachment B
�R4 R o
Voluntary Contract Cost
Reduction PCOgralu
PARTICIPATING AGREEMENT
THIS Agreement(hemimftw"Participating Amendme4P)is made end entered into uponexeeution ofall necessary
signatures,between the County ofOranee.a poluicst subdivision of the Scale of California(hereinafter"County")and tw
telecom holdings lee,with a Place of business 07 Maven,Uvinct CA 92618.2707(homimttor"Canh t e),with
County and Contmceirsometimes individually retuned toes"Party",orcollectivelyrefared to as"Pentes".
WHEREAS,the County of Orange has impleenentad the Pohmmo,Contract Corr RohundeaProganr to redues
contract casts by tan percent duringfscat yemr2011.2012 to exchange for one additional contract year,and
WHEREAS,County and Conbactorentered into Comma gN100008297,now know as MA-017-10D11150,for
Wide Area Network Transport Services,commemingonNovember 14,2006 and expiring enNovember 13,2011
(herouafter referred to as"Camrarn");and
WHEREAS,the Contractor has voluntarily agreed to participate in the County's PoGrmary Cons od Cost -
Reduction Program;and
WHEREAS, the Orange County Board of Supervisors lots approved the Pofunrmy Contract Can Reduction
Program and authorized the County Purchasing Agent to execute departmenml Participating Agreements and contract
eximmiums within the wtabliched limits,
NOW THEREFORE,in consideration of the mutual obligations set forth herein,both County and Contractor
agree as follows:
1. Voluntary Contract Coss Reduction Program — Term: The term of this Participating Agreement stall
commemw upon exaction of all necessary signatures and be in till foss and effect commencing on July 1,2011
through and Including November 13,2012.
2. Voluntary Contract Cost Reduction Program—Invoicing Procedures: During the term of this Participating
Agreement(July 1,2011 through November 13,2012),the vendor has reduced their cart by 10%as agreed upon
in Amendment Four to Conirad N1000001297,now known as MA-017-10011150.
3. Voluntary Contract Cost Reduction Program—No Compete Contract Rxsemton:participating vendme will
be granted a 12 month extension beyond she original term of their contract under the following conditions:U)0m
County agency/department has an ongoing need to purchase the produces, & services and market catalysts is
favorable to support the extension; and (ii) iM 12 month mmwal/extemim period is approved by the
agmeyidepartment;and(M)the agency/department has the approved fiscal appropriations during the tear of the
extemion and if such appropriations am net approved by the County Board of Supervisors,the connect will be
terminated without penalty to the County;and IN)the vendor's port performance and quality of produchis ovices
has remained at the levels required by the origlml coutrech
4. ALL TERMS AND CONDITIONS OF THE ORIGINAL CONTRACT ahtoo0ooa1F7,rww lonnm as M0,017-
1aa111SD AND SUBSEQUENT AMENDMENTS BETWEEN COUNTY AND CONTRACTOR, TO THE
EXTENT THEY ARE NOT MODIFIED HEREIN, ARE INCORPORATED BY THIS REFERENCE AS IF
FULLY SET FORTH HEREIN AND SHALL REMAIN IN FULL FORCE.
CEO/IT Page 1 oft-
Page 54 of 80
Attachment 6
SIGNATURES
The parties hereto have executed this Participating Agreement on the dates shown opposite their respective signatures
Below.
tw tollee�com holdings Inc.
lTir,6, fill 90hv1tV— R2FtWle-( VILe &Stra(nf- Pqu,6t
Print amc� ul.r [/(�� TRIO
Signature Date
v• /TWI - S-��F-�
Tna boils &s�slntO- Sect e rzti a/
Ptft ame Title ekw 5. 13 - 11
Signature Date
*If the Contractor As a corporetbn,signatures of two specific corporate officers are required as forth"set forth.
The first corporate officer signature most be one of the following:l)the Chairman of the Board;2)the Presidenh 3)
any Vice President.The second corporate officer signature must he one of the following:1)Secretary;2)Asshteot
Secretary;3)Chief Financial Officer,4)Ambient Treasurer.
In the alternative,a single corporate signature is acceptable when accompanied by a corporate resolution
demanstmting the lcgal authority ofthe signature to bind the company.
XRR4tlttkftRf}RFR1ttfRfiR4dRhblt#fb M1RMHRMM14RRtt0M14RM1YIMYM1bYM1fFFRRNYRRRtR44M1IRRRF
County of Orange,a po8fical subdivision of the State of California
��a pW�
�of2.QJ_ /__O _//_ ..�s. County
PurohesMg ABentfDepuy 'gnalm¢ --_�-.-Data
kkkMftkklkkkiklklRMk#tkktkkMt RkkR#RRXRIkMRRk#4RMRk44kkM#kM1MkXMMRRkY}4b4kiRk#R444dtkM#
CEOAT Pase2off/
Page 55 of 80
Attachment B
Coualyof Orange Price AgceemeasNo.1470i1dd09297
TNUccomHoldings,trc.
AMENDMENT NO.3
TO
CONTRACT NOMRER NI MM8297 AS MA-017-18031150
FOR
WIDE AREA NBTWORKTRANSPORT SERVICES
FOR
ORANGE COUNTY
This Amendment Number Three(hereinafter"Amendment"}is made and entered into by the
County of Ormge,apolitical subdivision of the Score ofCelifomia,(herebaterreferred m as"Count;") .
andTW Telecom Roldingglnc.,witbim principal piece of business at 10415 park Meadows Drive,
Lif lrton,CO 80124,(h=inafw ref=W to as'rmmdm"),which may benteaW iAdividuauy es
"Party"or collectively as'Tenies".
WHEREAS County and Contactor ueoured Contract NI000003297 for wide once network
tnmportservices for a due year term commencing November IS,2006,hereinafter"Contraee';and
WHEZW,ft Parties burned Amendment Number One to amend Attachment A of the Contact;
WIMPAS,the parties ismed Amendment Number Two In renew the Contract as number MA-
017.10011150 for M additional year effective November 14,2009,through and IncludingNovembn 13,
2010,and amend Attachment to reflect amended pricing;
WinMkS,the County deshes to issue Amendment Those m exceed the Contact for an
additional year of tiveNovember 14,2010 through and including November 13.2011. amend
AttaohmentB to reflect amendedpcicing,and change vendor name from Time WamerTelecomEoldmgs,
Inc,to TW Time Warner Holdings,Em;
NOW,TIMEFOPE,in consideration of the mutual obligations act fonh berms,the parties agree
as follows;
1. The term of the Centeno N1000008297,now MA-017-10011150,ise nsaeedforapatina of
one ym,thereby contending the Contract period effective November 14,2010 tbrougb and
Including November 13,2011,orders otherwise terminated by County. _
2, The total Contract Amount for ths period November 14,2010 throughNovenrnber.13,2011
shall not exceed$403,752.OD.
3. Ame and connect copy ofAtmebareatB Cosr/Compensabon fee ConhecmrServices is
anached,
4. Except as otherwise axpresdy act forth hernia,all terms and conditions contained in the
Original Contract and its amendmentalmodification at incorporated by this reference as if
fu[ly W forth herein and shell remain in full fora and effects amendedhemin,All
obligations of the patties that would have been terminated on Novamben13,2010 are hereby
extended to November 13,2011.
i
Page 56 of 80
Attachment B
Coomyof TW Hot PriaAgteemwt No.Ntd00069291
1t7eramAokIDgs,In.
INWITNESS WHEMP,lheput!"hereto dove executed this Amendment on the dates shown opposite
theitmspective signaturcebelow:
TWTar.Gn— Opp H0r�1N�5. 111C*,SIGNAT
DATE: 7 �I URE: /P/y� g�1"/GClti-:
PRINT NAME: f,1 IA JITILB �'!a?'t7"—
)6I : )Wf- Pal�(A4-It/r
DATE: gb��ADda SIONATURE:
PRINT NAMe: �T1inlyndut n y'ly
TfTfF.: QAlf/JLtN,917
•IfrM1e smwrtiagpam/u amryoreum,etstlmrVrat,ms[bcugmdbYProcmpomk offxus. thefira dgaaNmmuzbc
<idxdu:Qtelcm®efs5e 8omd Pnsi".eator mry Vitt Ppddsor. 13cacmnd,tlenmmzmuubctbetevemry,masstaam
wb�Ne(Slef6 mmciel OtRca�mNyt tla oi�thsuurt+z to�eimmenvs.e®etc eoTem¢elpimueLxro�uble
mPe^'� Y mRamu H eeatw onryo[ffiesi�mrobmd Ne mmpenY
COUNTTOPORANG$
A po➢tical subdl ' aofthe State of CaQ for
da
SIGNATURfi. '� •4
TPILE:
DATE: f /
Approved as to foam
Office of the County Counsel
Orange Cormty,California
DATE: BY; ii !%! r✓
Deputy County Coanset
' Approved by Boadof Supervisors on:
2
Page 57 of 80
Attachment E
County,oforenga Pdre Agreemret No,NI 000009297
TW Teleoom Eold'mgs,Snc.
ATTACHMENT B
COST/COMPENSATION BOR CONTRACTOR SERVICES
I. COMPENSATION
This is a fixed fee Contract between the County and Conrnetar for services provided in Attachment
A,Scope of Work in axordance with thepricingspeciflM below.
2. INITTAL SERVICE PURCHASE
Coonuoutrshatl st"lythefollowiog service for thepedod November 14,2010 through and
includingNovomb r I3,2011:
Clrmlt Type Fvm Address To Address Qty Total
Label I ?&Rthw
FIM-14 1 Gi 14D0 3.CaendA: 301 The Ci br.South 1 $4128.00
F1er-6 lGi I400 S.OrmrdAve 1275 Bedrele Ma 1 $4,128.OD
Fff 1Gi 1400 S.Gland Ave 840N.Pckhoff 1 $4,123.00
F'ha-2 1 99B 14DO S.Grand Ave 1770 N.Bmadwa I $4,128.00
fTi6er•3 1 Gigs 1001 S.Gmod Ave. 1 128.00
Fha-4 I GigP 46011ambo Rd. 1 $4.128.00
Fber-7 1 Gi 14(10 S.GrmtdAve 153 S.Orangewood 1 912 000
FiraVPiend 1400S.GraedAve GGigdllftlnL•CpU CQLIa171 $4050.00
PIS wlGig
Port
Total 1 $33,646.00
Nola: -Additional County location my be added s adfor deleted to this srhedule during the tam of the
Contract. The Contraamay be amended,as set forth in paragraph C,m add circuit locations
Fee reduction for Connaaor's failure to notify County of planned and unplanned service interruptions,
reduction in ava8able cueait rapacity,delays in repah Many other dismpdon of service,th"MU11 in an
individual c'aouitnot meeting the 99.99%uptimefor any sequential thirty(30)day period:
parSsvmvaoutage Pervantage Credit
lsss than 1 mimde(99.00%availab0i No credit
l ronuteu m4 ra 596of the MRC
4 bom up to Shunts 10%ofthewc
8 hunts up ml2 hours 15%cftheMRC
12 hours UP to 16horus 20%of theblRC
16 how up to 24 bows 35%of thoAM
24 hours or greater 50%offtMRC
3
Page 58 of 80
Attachment B
Cowy ofor nge Price Agseme+u No NIDD0009297
TW Talmo,Holdings.Inc.
3. PAYMENT TERMS I
initial Set-vo: Lrvoices for initial set-up as to be MbmiWA in arrmca,unless otherwise directed in
this Contrac4 upon the satisfactory completion and acceptance of Matto of the entice system. If
tervicedoes not mat acceptance specifications herein.Contractor assumes all costs and may out seek
reimbursement from County.
Monthly Service: Invoices for monthly service ate payable numbly. in seems, unless odenvia
directed in this Contract. Payment for monthly services,as specified in Attachment B, shall begin
upon the date of acceptance of the system.
Cmtmetor shall reference Conned number on invoice. Psymentwill be tot 30 days after receipt of
an invoice in a former acceptable to the Comity of 0rm9e and verified and approved by the
ageoWdepattroent end subject to routine processing tequiremenrs. The responsibility for providing
an acceptable invoice rests with the Connector. Incomplete or income[iMiea ate not acceptable
and will be¢paned to the Coatmotorfor correetien.
Billing shall cover service amMor goods not previously invoiced The Contractor shall mimburus the
County of Orange for any monies paid to the Contractor for goods or service not provided or when
goods or services do nd meet the Contracttequtremenm.
Payments made by the County shag not preclude the right of the County from thereafter disputing MY
items or services involved or billed under this Conned and shall not be construed as acceptance of
any partof thegoods a services.
4. PAYMENTANVOICEdG INSTRUCTIONS: The Contractor will provide an invoice em
Contractor's Iemartmad for services tendered. Each invoice will bane a number and will include the
fogowmgiaformeton:
1. Coudador'e name and address
2. Contractor's remittance address(if different from 1 above)
3. Name of County agency depmunent(ifcounty agency is actual customermwne)
4. County Contract number(to be added as pert ofthebilling address)
S. Service dae(s)
6. CSmuit7-abel
7. Service description
a. Total
Invoices and support documeunation are to be forwarded to:
County of Orange
1501 E.SaintAndrew Place,Shin 200
Santa Ana.CA 92705
Am: AccountNyable
4
Page 59 of 80
Attachment R
Renewal Service Order Form(RSOF) &`a1ecom_
nee Rerewal SeMm Ortbr is Wesel ino by M hNenm holdings Inc.by Withstand)llzwMll,owned nJlfimna pONJBtM
aeMces.1,ortlwetl w:.".,lu9vatrvery TVTC-)sent (Nanty al 0nce,
CcesonnuI,and Is eflWe.span second,MM By Co...,eM TYTC.TWTC MO Won higgerchbe or 1M Iwrlon—W of i6 subsl®ades Wor this Agreement.
wlicb own eM apereto ties scemmmunl¢Oons lazlllllm 6 ^ n c�dy cnoRetn,alrg
n n.....e �a...n a...
n EyyOpeaemaerNetrlmWSPdnwrd59NtrnIW '11Cp1101'd(n@RR91XYM long
Class ry oraosdab barvnewd 6emzaznmauir'n lJl kr[oaM'eHeet:�a�,
..._. _ .
p Wsurld mOrnenlorlM zemiss listed Ulm but an MllMmwNez lhlW.are chi iaMWatlIs,one nme RtirNWel Tom eM on
Net"'M ossaye Maa.
Gran Total for SarvkeS RoroMd: 328.No.00
Sorel...Kamen:
Uselse, 81: 14008.GaaMAveroa.Santa Pr;CaMomlg92]O6-Almka(t Cbeek®1 MonNyneeurtlnp LryYgm IMRG)
RmwWYhrm L af6mNw chnish0 a Ilwbb flemwY rUnN Remwel aYl
12Monoc 1 Natlw IAN-EMe <fiIKFFW101416TVIC6 H.128.00 S0.1P0.W
12 MdnIM 1 NNsa UN-flbo `%MFFW101<2IcVCB 56.128.00 56,128Ap
12 Me". 1 Nd,.UN-EMe <SMFFW10141DIRVCf 54.125.00 54,13P20
12 Months 1 Nesve IAN-EIilc 46MFFW101<P4TV1 f1.1M- 84.fPB.W
12 Months i Na11ve UN-E0a 46MFFW101428nVICS 50.1o_ 51.1}8.W
12MonW NaWe UN-EIBe 4IOURVI014SSIFWCS S0.13BA0 $d,120.00
Verges 1 NaWeLPN-EMB 96MFFWIM<2bNlC9 K.f211.00 84.138AD
vwavamnma.aaanmaa suo-rgm asB.eef.ag
Swim MCwk3: Mundsolsbmm t➢n0ono-Sbciffoo LYvaN®'e Meninhostuning CMNIes IMRQ
g1214�sIAN-Eftc
m d18aMm CIwIIO a Imble Renewal UnN 1 NaWeIAN-Elik 4NKFFWI014I7TGS Co1 14 WsUN-EP10 4P11ffiW10142YfVIC6 f0001 NaWeUN-Elpe 4FMFFW1082MWC8 Moo 1 NaYvs IAN-Floe 45MFFWf01H'21fWC3 moo 1 4VKF I0i421TVCS 010 I I NaMse UN-EIAB 4HKFFW10142gGWC5 SOAO F1.00
Nceseffifwry "nooMW S cb`[W! SA00
Sonfi NNnn F3: I Manny Round, GhWh RARE)
RemWYTord 0 e16eMoa ClrcW 10 a SmWe RpnewY rued Ratuwel 041
12 MmIM 1 NalivelAN-E s 4,,`V=1014tdch S no nos
1ti MmUc 1 NeMe UN.So 4po"48Yn"l no no
t2 Mm0e 1 Native LAN-E41e 4YSM1)CV/f0142NfHrC6 S0.W 50.00
12 MdnNs 1 WMa IAN-E%e 48MY.XIIMAIITVC6 Moo no
12= 1 Note.IMN EMe 48N"*148]IIWCB moo mp0
12MOMM 1 Native IAN-Ella 4flNl]YJ1014S1TVC5 Who no
12MOMr¢ 1 Native IAN-into WYIY_"JIo14] cs I $.so I ness
PbueatltlaWzaa:neeeea gob-Total 50.110
Additional Nortee:
Versbnt]Rsn,4.I1a Mneewm-mrnmed "go'Yf
Page 60 of 80
Attachment 6
Ce.,M CbrgebrerrexAg @Ilo NUJJ CimW6(I Ds I!Yml abmc nor UrM n1A Term.108 RFAI -B�.Prkuq=u9milp Cpb Per OlmurwkeNnYlNee A
.z Lrmelm5b101mLA.C...,Kmam Nmrder f2.1:.Rrr we.b—dal.ofsgr tmmlNl Baran ,.NOTa.]rU C.rgoc aM NO..,krmrgos.
Billirq PemItl6151mple gene'rvel CBanpe ONLY,
Vorelon 1S Rw,4lE me W.-Cuereedw hl2rt.
Page 61 of 80
Attachment 6
Olaepnnen Nplica
IICusNma�baiecvmeRy$NVIRahr&M mason.e r� Ml Over wUWbT4TC.I&11. auimib to 109 aW-asa9orty omLlm
'CYslome�Cal!$M101BMm.Cnlf.Nollu Eg M.W.p�B:nail lF WamatlgiwnwNnEallverM.
A^M.01c RRanawal
IIIAfaWpS�at�190F,•pp�eml o eaMCOEWJI"ampmM�lylenvHprsucesaheA2-maON relms(m.uvlM1amive5plstlln lFaSleMnE
l4rmses6das�Itl�I��iRMBjvNersmlMiNaR>•mYfeslNalMfln WnYlq Nltly�9p OxYs'pnarWYM16lRiRQO^dUW lM1ancwBn118im W111 WIshBe 1p plmu'rep
4lslemerantl IFe MtlWtlualslpnly below rcpruentspel eucF Ntllvltluvl FvslM1aaWllollryla Oln!Cuslomor Io1Na G®oonienl.
IwmleCom FaWMga 1M. CYslomar:Cou<n/Njlgol G�mpo
Slpnolum: CIg^eWre:xU}'H��R,J•,414'eW
Prinl Nema: MM—FrvEel . PnM Neme:k ((T�LL 'IW�aWV�/l �GI f�.GI
Mle: VP/GU "w:v �Ly_
GaW �GB, 1 J
Selea PeMan: Pon FUUs
Venbn IA Pw.4e1-03 M Wxm�CapboNsl Pay]Wa
Page 62 of 80
Attachment 6
Renewal Service Order Form(RSOF) �Jtelecom_
orsaemml Sondra Order Is anbmtl Inm b,M lei ewmXeldlnesI-,by am Iborgh lowMOv^wnnlmGsldmrbn Vml amrallied IopmtlGe eas
seMeee bairy oadelad lereader Woods*T Cl ardl counryonma"
("Omaboar),eM Is aXe]Ne upon exoadon boar by C.IonenN MTG.T OMI ar .rdrmlN.lot too pe do.of ire wb5ltlkdec Wor A,ramoM,
.W.ft am am Mo.Me leboar imWkN0.4MUUee bad,
reo-�md.NkP.anaaaLSer.•nm• en= lavM.lbapdm e2..,I and arty e'Noreve od"
6mpbsemerdaoimOisHerewL Se:vk¢ONerFormrtll esiaUq hm¢2M wiMitlm>,NatlpM Ure:mmvetlSenSastevlal6i¢4!L(wca.atl.eNacl.—�
MFIR159w3Uem.'e'pf orripne Servi:aado,laa.Navarre fakd Mlaw,bN ere M Ilnmeer lipled,aro also mrnwed for Ue more armorer Tom,and for
orantl Total Nor Sorvicea Rammed: 14.750A0
8ammill Fonowo,l:
Servko AddroaaYl: I00a6 GraMAveiwc,Sanla My C4 @FU6Npb MOMMy Realrol'CNrpnpm
Nmee9l Team of SeMce C.A 10 Wimallarribill R—al deal Reareaselffivera
12 ManNu 1 ademalAmess �rWI01atslr ".75040 U..a
Nwe eadswbee so nenad IWbTeW Sa.TsooO
Malifloned Notes:
uMyNO.anpe Is remwi ,INermi.ICS Rk11SS1002 Pod,aoo.ranadamerm 1peep.all..led Wrtenl drW110.CJSlgaarP2apnl NumMrY2E6de4.
Tmm Mll belor1yur112 Mantlss 1from dale of 90reWra.Ms FenewL mgdres NO TetlmIW ClapesaM NO raNmIX MargaN.&MM Femds l Simp:a oaed
Coarrare ONLY.
VertMld Rev.a�YM1p9 bare mm-Cw4lamlal Papal ore
Page 63 of 80
Attachment 6
Uisbmnneci Nalim
G Cmtamer Is doowmemrq 9aMmo term,roawn,It m Pat doIIwn m[be to nyTOaMor by Iasmile to 303 003 9Mwby amyl to
-OmdamvCerad Nmlwaammm'.NI by txslmily on wn all to deemed Omn wlan mAP,Imd.
LdS�°mnSL°,fl u4we1
mIdI sseft JIg$gyTl.(KnefY�synll.eulattrmiN tamw.l firermamh.I.:mv for aaollamya alawam GaSlaMae
TagpO,N,N.6.Wrdltlwnl mpplunkzaeXherpaM m�fimllNalhwlnwnGn01KM(9111CaYa p11wa0Pb oXplreGan of W InenWnent lanninat itwlei:ss to lem5ole
IbBIBIOi u.
Cmbearm nee Me InIIIIal0nln0 helow mare.-hold itshlbeleldmi home NeaulMtlrylo blod(t.m.b IMe dreeemont.
Iw I....hotel.,Ine Cmlotnm:CeuMV.f,Cannot.
slenalure: sbmWm:: ^pGk�°,''"�I$id �/ i ' l' �
Print Name: WIIIWmemed.loksan W1nt Neme:x �p�`��wwL, ls�..Ta�t�� fN
Me! Vice Pm.1derlI(ImeralMar,os lle:z (!.p&tAeA-a IN. *'
Dote: z 0.1mz N%PhD
Saba Pants: Roulti Mlllm
me.nt9 F\c.a.314a yWamm-Gnu M. Pppax
Page 64 of 80
Attachment 6
County of Orange Nee Agreement No.N1000009297
hw telecom holdings inc.
AMENDMENTNO.2
TO
CONTRACT NUMBER N1000008297 AS MA-017-10011150
FOR
WIDE AREA NETWORK TRANSPORT SERVICES
FOR
ORANGE COUNTY
This Amendment Number Two(hereinafter"Amendment")is madeand entered into bythe
County of Orange,a political subdivision of the State of Califomia,(hereinafter refencd m es`County'D
and tw telecom holdings inc.(formerly Time Warner Tolman Holdings,Inc.),with its principal place of
business at 7 Mason,Irvine,CA 92618.2707,(hereinafter referred to as"Contracto2j,which may be
referred individually as"Party"or collectively as"Parties'.
WHEREAS,Countyand Contractor emcuted Contract N 1000008297 for wide area network
transport services for a threryear term commencing November 13,2006,hereinafter"Contrecf';and
WHEREAS,the Parties issued Amendment Number One to emend Attachment A of the Connect;
WHEREAS,the County desires to iswe Amendment Number Two to renew the Contract as
number MA-017.10011150 for an additional year effective November 14,2009 through and including
November 13,2010,and amend Attachment B to reflect amended pricing;
NOW,THEREFORE,in consideration of the mums]obligations set forth herein,the Parties agree
as follows;
I. The teen of the Contract N1000008297,now MA-017-10011150,is renewed for apcdod of
one yeer,thereby amending the Contract period effective November 14,2009 through and
including November 13,2010,unless otherwise terminated by County.
2. The total Contract Amount for the period November 14,2009 through November 13,2010
shall not exceed$418,800A8.
3. A true and correct copy of Attachment B Cost/Compensation For Conitaotor Services is
attached.
4. Except as otherwise expressly,set forth herein,all temm and conditions contained in the
Original Contract and its amendments/madificmion we incorporated by this reference as if
fully set forth herein and shall remain in full force and effect as amended berein. All
obligations of the parties that would have been terminated on November13,2009 ere hereby
extended to November 13,2010. This renewal period of November 14,2009 through and
including November 13,201 D maybe referred toss Contract MA-017-10011150 for County
purposes.
1
Page 65 of 80
Attachment B
County of Orange Price Agreement No.NIOg0009297
tw telecom holdings inc.
IN WITNESS WNEREOP,the parties hereto have executed this Amendment on the dates shown opposite
their respective signatures below:
few Wert.holdings lac.":
DATE: I�-1,}'LJ-�r� SIGNATURE:
PRTNTNAW: (nr M flAyfrr
TITLE; P,VP- Alrl
DATE:IC_ 20 '2001 SIGNATURE:
PRINT NAME: 1",'n�a/[(0 �&0"d
TITLE: �M.fNRA/fV X �
•Iltbeawuacdng parry is a cupantiory the doeaenentmun basiamd bynvo coryorue otecers. The flrnaigne[urc mmtbe
either the Chalrow ofine Barad.PresideM.or am/Vke I'MMUa The secmd sigoamm muubethc seantnry,nn msisrem
secretary.the Chief Fnewiel ORrer,wanYmsistmt treazoren. In the aaemmive,a single corporeteslgnamm is aooepable
whrn acaompanicd by a wipomte document demomhati ng the Iegal emh odty of rh a si gnaNrc to bind thn wmpeny.
COUNTY OF ORANGE
A political subdt�'((yyr���s+}}ion of the State of
California
SIGNATUREY 061. J A J " I J e
Tnia
DATE:
Approved as to form
Office of the County Counsel /
Orange Coun Cnlifomm
DATE
Deputy Cou C ad
2
Page 66 of 80
Attachment B
County ofOmnge Price Agreement No.N1000009297
tw telecom holdings inc.
Approved by Board of Supervisors on:
ATTACHMENTS
COSUCOMPENSATION FOR CONTRACTOR SERVICES
1. COMPENSATION
This is a fixed fee Contract between the County and Contractor for services provided in Attachment
A,Scope of Work in accordance with the pricing specified below.
2. INITIAL SERVICE PDRCRASE
Contractor shall supply the following service for the period November 14,2009 through and
including November 13,2010;
Circuit kF'j7'xedTiercd
From Address To Address Qty Total
Label Montbl
Fiber.14 L400 S.Grand Ave 301 T nsCi Dr.South 1 $4,285.72
Fiber-6 1400 S.Grand Ave 1275 BerkeleyAve. I 54,285.72
Fiber-9 140D S.Grand Ave 840 N.Eckhoff 1 $4,285.72
Fiber-2 1400 S.Grand Ave 1770N.BroadwayI S455.72
Fiber-3 1403 S.Grand Ave 1001 S.Grand Ave. 1 $4 95.72
33m-4 1400 S.Grand Ave 46017ambores Rd. I $4295,72
Fiber-7 1400 S.Grand Ave 1535 B.Orangewood I 54285.72
nd 1400 S.Grand Ave <Gigabitlnternetoi=iP 4.900.00
ig
Port
Total I 1 34,900.04
Note: -Additional County location may be added endlor deleted to this schedule during the term of the
Contract. The Contract may be amended,as act forth in paragraph C,to add circuit locations
Fee reduction for Contractor's failure to notify County of planned and unplanned service interruptions,
reduction in available circuit capacity,delays in repair or any other disrupfns of service,that result in an
individual circuit not meeting the 99.99%uptime for any sequential thirty(30)day period:
Per Service Outage Percentage Credit
Less than I minute 9.00%availabli No credit
1 minute up m 4 hours 594.of the MRC
4 boom up to 8 hours 10%of the MRC
8 boom up roll hours 15°%of the MRC
12 items up ml6 hours 20%ofthe MRC
16hcursu te,24hours 35°%ofthe MRC
24 hours or greater 50%of the MRC
3
Page 67 of 80
Attachment B
County oR)rengc Price AgreementNo.N1000009297
tw telecom holdings ire.
3. PAYMENT TERMS
Initial Set.uo; Invoices for initial set-up we to be submitted in arrests,unless otherwise directed in
this Contract, upon the satisfactory completion and acceptance of testing of the entire system. If
service does not meet acceptance specifications herein,Contractorassumes all costs and may not seek
reimbursemrntfrom County.
Monthly Service: Invoices for monthly service are payable monthly, in arrears, unless otherwise
directed in this Contract. Payment for monthly services, se specified in Attachment B, shall begin
upon the dare ofaccepmnce of the system.
Connector shell reference Contract number on invoice. Payment will be net 30 days after receipt of
an invoice in a format acceptable to the County of Orange and verified and approved by the
agency/department and subjcot to routine processing requirements. The responsibility for providing
an acceptable Invoice rests with the Contractor. Incomplete or incorrect invoices an not acceptable
and will be returned to the Contractor for correction.
Billing shall cave,service and/or goads not previously invoiced. The Contractor shall reimburse the
County of Orange for any monies,paid to the Contractor for goods or service not Provided or when
goods or services do not meet the Contract requirements.
Payments made by the County shall net preclude the right of the County from thereafter disputing any
items or services involved or billed under this Contract and shell not be construed as acceptance of
any pan of the goads or services.
4. PAYMENTANVOICING INSTRUCTIONS: The Contractor will provide an invoice on
Contractor's letterhead for services rendered. Each invoice will have a number and will include the
fallowing information:
1. Contractor's name and address
2. Contractor's remittance address(if different from l above)
3. Name of County agency department(Ifeounty agency is actual cusmmer name)
4. County Contract number(to be added as pan of the billing address)
5. Service dates)
6. Circuit label
7. Service desctiption
a. Total
Invoices and support documentation are to be forwarded to:
CoumyofOrange
1501 E.Saint Andrew Place,Suite 200
Santa Ana,CA 82705
Attu: Account Payable
4
Page 68 of 80
Attachment R
Renewal Service Order Form (RSOF) &elecom.
TN.R...,6aMW Cher1aen19rW 1.Woe, I..MIdIngame by.mmuitykawNIT ansayNbsidnedos slide.cershod mpmiae the
mnsold g oMolM Mmunear bditMivaly'lYJlC7 ard COwryaf oran0e
PCustro.j,ends helletlbe Nan asuNon bath by Groaner aMIWTC.WIT win remdla hasg2lCle for IN pef..I Is subsidiaries orals,has 0pmemem,
whkh awn eM speahe W ToNeu sank etisre Ianotlea.If Isere In a forest between INs Roiewal S.M.Oder W Vre Piet aptten aloe)he Ids O"ose Wire
• newe0.tbk assess!Service O dmahLl p:avail worlds prior airannesseMarry spininess IaiN.
Escape as ameMtl In his Reamval Semen Oder Fsrm,all aFlslirylmu6 aMcoMlAmriNues y To IN rernwetl SeMa s hensele N111.aMeflKt
Any fervors Oat ase total ft orgenal Serveca Oder far Yw 58NIss IIned bevq hat ON.1 reaNd,ef ftled,are as,mrened tariffs aame Renewal Tenn,and lo,
the,Mitre!M1WCso,use nos.
Grand Total for Services Renewed: 6]0.000.Od
Sorvlces Renewed:
BeMO Addrasea: 1400S.GraMAvonuc WOMlyN .'eha MRC)
Muwtl Lnn Two o1 Mo. OI.A 10 IS nonflarri flenewel(year ontl RemWM Useen
12 my. I Na4velM'-E61e SSMFFW101418rIWGS 90.295.72 54,205.12
12M ass, 1 Na1rvr LW-File 4NKFFW101421RWC6 6c.2&472 f usi
12 Mcn0e I Was,L -a. AWKWWTOI. (M1YCS M.20.5.I2 9<.20i.R
12 Wathy I Neale UN-EN. 4WWK 101QNVsVCS $4,205.72 Kill!
12 Mmtlz I' Nds.LAN-as, 461KFFWI014MRWGS $42B5.]2 54205.i2
12 MdtlN I N.W.0 ma 461YFFW101LT1IMrC5 &. .H, 54.2II
12MONhs I Nanue UN-Etna Assa FW10142 cfy SKITS.]. S4205,12
Rew atla—ImnanMvtl BubTONI f30.M0.b
seNtf,"a am. MUN01eLualamarlaulWc-2lLruYw EYWIINY I.snWyaaomMOChequlMPC)
aenowr T.— ON a 1HO I Ocable Panawal(fassonll Perewtl es
12Mfnr:a lloerv,1PN-En.
Native lAN-Este WKFFW10141Trt1YC6 W.00 SOLO
12 Mnntns ease,UN-Eire 4SWFW101a221RVC6 0.00 AO
I;:IMnlna NPoMe UN-RWm 46MFFW101426RYlCS Visa soym
121MrtNe aa anUN-Ese 46IflFFW1014TTlIWCS 50.00 food
12 M,11. N.Wa IAN-Ells 46MFFW101a3IiTWCS Son) SO.O1)
12 MasheNil -MIN 4SNWNrI0IQ7TTlC6 Mae WAO
12 Msnlla 46IIffFW1014221tWC5 Was WAp
WAD WAD
o-lseamsemaesazueod ad TMN fO.W
SeMm Mdruap: ]Mauon;IMm.Le 02018.14VRCmW O111n Moe Clrcu1110'a ItonNlyRwhosICINIINMPC)
Psrewvl Txm 0 atfaMu VnNITIOPHeoptibi Ranawan WO Renewal asl
t2 MOMrs 1' N.W.LAN-Ste ISM1M1)f/J101420TVC5 SHAD W.00
12 ManIFs 1 Ni IAN-ate 46NI-XiQW142STVGS 0.00 $NW
12 MOrN 1 Wtv.IAN-St. 23 UOU10"OsTYCS W.CO W.W
12 Abnllrs 1 Native LW-Esa 4W=ID1414IWC6 "do WOO
121Aonihs 1 Native IAN-Efts rSNWJ1D143]lfWG6 WA0 SS.sa
12 MsnW 1 NaEva UN-Es. 46MIW10143.VIVICS W.00 WAO
t2 Man0¢ I NMwIAN-aeb aSNL floh4t6'IWCS SO.oO WO0
PYaze Miun4asazneMM SY'TOIee So.W
Additlonel Notes:
Verson fARM.91,1T ov W Mh,-COYdyofa1 Page I N3
Page 69 of 80
Attachment 6
Ce of Onn9ele reroxfig E%e NUN Cim[IS(IO'e IISIM tl a(Ior12 MOMM1 TOM,ICB RMVRMIS-]WCWW.P4dIpaSS-MI9ds Cacl PerGrcWlwNtlr
ilt,lb A VSZ LMUans br C Im Cusbmof AIS,Itl N=WlM3MIk Ren 1fI-I Ilh3!2fd9 b 1111MO0.T R—A requbee NO TttM1NWClgrgvartl
NOneISMI% Si.BIIIIrq RemrtlS!Rei—M CMNII:ONLY.
VeuMotd Rrv.R¢1M txrtlxom dnl�lY Pµ 212
Page 70 of 80
Attachment 6
019connect Notice
II Cu ..,In4i...efipSerclrnloleny reewq 11.dnftwr mfice.T Coilnw W 1a20nho W e0]-6o]N6e9 of ty emYl to
'GuslpmerGa:e�tMalewm.wm'.Wife W mcmmXe of enwn b deemed given wean deuwxed.
AlNcmetic Renewal
Upon a ign.U.W Vn T.of INs fl newzl5 F,IM To-Iar-M—wID 12monl,Wmo le1.1 ellw-.e1ened In the Clnp'sd
Tsma eM C"ifmne IlappllvWel dnb55 eilhel peM wtlllea IM oft,nwll jo,in1,(301 days pllm In Me e¢4atlon of fine Ilan Gun ue non tW0 wiahee lo Iounno o
IM M..
Conte—ond lM lndliMuel alpnlnB bot..,e-M lMl..MI.&Wdual has the oulhMly to tlnd MO.—to W.A,--nl.
lw I.Ioc—holdi,o 1— CYHomen Cot MpV/�,al".1,� y/ /J�� G
SlBnallve: Sl0latlln:x r../�40 'w..✓L?t:16pi/�C.:.Gf
Pdnl Home: WIIIIael"folekkLn MnINaM.x N.U� S e4LCA
Tiff.: wy Cu TBN:k k&(45 /Ln"w
Bala: Delon.
Selea parmn: Ren MlN
Verson 13 Rev.4 if A ne waoom.PoMd.nW Pape3el0
Page 71 of 80
Attachment R
Renewal Service Order Form (RSOF) OtelecorT
THs Removal$emce Orion is en@red No by lw hisi holdings I—b/aMlMarpb ikwMlly roman p1avIMIM
mcec buy mdeul hsmugm iWlxMely'IWIC'l and county of onrlgo
CG,odo.seband is0asotlre uponeeassaao WNby CWbaMr andN .TWTCWlh remaln respolEffinbIOr&s pMshoo.allla s oddlaniy.rdar Win AgreemaN,
.Woo am ond opowe pe sh—oun inica4ons 1.:Isgex It here is a moist beNrean IN.Felmrnl Service Ordw eM IM pMr aereamang[I tar IM samoss Mang
strewed lNZPenexel SeldroOMerslall pereY overlM prior ngraomanlandorty appllcadolorill.
Ercepl ac ameMoi In pv[flanaud SeINea Oker Fonn,ell ozlollrglema ant mMitlare relatlry blhamnewad 8arukes remainin IJl torus artn oXecL
AnysaMreslhat are pan alfts i,bad good.Odi Ila mM—I51ed Mass.bN are not IhamselvesgNM,are also remwe0lar IM same Renewal Tism,and in,
.I,ah,i Ii ar uavge maa.
Grand Total tar galviwa RPnawetl: U.M.00
aenipn Renewed:
saMm addreaa11 14W S.(bIerAAagrur,Sable An ,CafhMa,9P05-A Location ClrcuX 10'o MonWy R.MnBChelgef"FIC)
Perpwel Temr id Serving Clooutt lC Uffe tlaebla Ronshill(M UMI RamWal olel
12 MOMls 1 INYMIAEC®a dbNFFW10145NIWC5 Khoo.. s4,NA00
Pbeve and—hmar naHW CYbTMU
AddlSpul Nolas:
COmay MOlanaBklasMry lNerlcet lC8 R1[Ing mhsao,>WCW9M.PrICly as x o reoacla ramval plitllq.prsl®ner 0®uIt Wghes#280S14.Seasonal tom
11/131A09b 1Yl131010,TNs Renevmi r6aulres NO Technical Chayss and NO network chayes.III RPmMsI Peruwal CINW ONLY.
YartlwlBPe/.a21-09 Oulala sh-donldeMPl Pan els
Page 72 of 80
Attachment 6
If
Ota ne'ss Mormoct,it Meatier rmssq imwldeIvorml bn lines Uc(IMe103d9IBorbyOmXro
GsManCere�Nsebom.W.NMI ebya�NIe oremallls tooted vorw deiewrN.Autdmmle Renewal
Upon eoprosn M No Teom N Hos Peneerel SOF.IKTem for seniws MI a4oma4all,renus braucueslve NmonN Note(or as attire al&oll in be SbrderU
To.aN C tress...It...Kmbl,toles,Os e,IN,roLYe[Ihs star In wrili,ihl,(ID)do s Prior In IM1e¢FpIraWO a,tot1tolosta a.INS 11.1ohu01MMmPo
Ile.—rrI
Cus,.oned In.IMIMbel e10nIN below represent at eudl MdM..l has to eu brolly to bind ILslemw to law Apramms.
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Page 73 of 80
Attachment B
County of Orange Price Agreement No.NIOO0008297
Time Warner Telecom Holdings,Inc.
AMENDMENT NO.1
TO
PRICE AGREEMENT NO.N100000S297
FOR
WIDE AREA NETWORK TRANSPORT SERVICES
FOR
ORANGE COUNTY
This Amendment Number One(hereinafter"Amendment") is made and entered into this 1st day of May 2007, by and
between the County of Orange,hereinafter"County"and Time Warner Telecom Holdings,Inc.,hereinafter"Contractor,"
which are sometimes individually referred to as"Party,"or collectively referred to as"Parties"
WHEREAS, County and Contractor executed Contract NIBO0008297 for wide area network transport services for a
three-year term commencing November 13,2006,hereinafter"Contract";and
WHEREAS,the Parties desire to amend the Attachment A of the Contract;
NOW THEREFORE,it is mutually agreed as follows:
1. Attachment A of the original Contract is replaced in its entirety with Exhibit A which is attached hereto and
incorporated by this reference:
2. All other provisions of the original Contract remain unchanged and in full force and effect.
3. All other provisions of the original Agreement, a copy of which is attached hereto as Exhibit B and incorporated
by this reference,and any previous amendments,to the extent they are not inconsistent with this Amendment,
remain unchanged and in full force and effect.
Page 1 of 7
folder 547018
Page 74 of 80
Attachment B
County of Orange Price Agreement No.N1000008297
Time Warner Telecom Holdings,Inc.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment on the dates shown opposite their
respective signatures below.
TIME WARNER TELECOM HOLDINGS,INC.*:
DATE: Signature �6A
Print Name: t k^ If Apr a-s
Title: k2c "A V"E C R I s .9-4
DATE: Signature:'Ala W Q
Print Name: I1IV�lm VAp Vic,
„��� /y�"��y ��[; ,�,,,/Yy���.
Title, SO, i 71N�4 yyr�gC�l/A�A.0
* If the contracting party is a corporation, (2) two signatures are required as further set forth in thistthis paragraph.
The first signature shall be: (a) the Chairman of the Board; b) the President; or c) any Vice President. The second
signature shall be a)the Secretary;or 2)any Assistant Secretary;or 3)the Chief Financial Officer, or d)any Assistant
.?.r.....r...................................................................................
County of Orange
A political Subdivision of the State of California
By;t�lrw Qbs� — Title: �QJL gtjIvxSn� ,
Dater r�
Page 2 of 7
folder547018
Page 75 of 80
Attachment B
County of Orange Price Agreement No. N1000008297
Time Warner Telecom Holdings,Inc.
Exhibit A
ATTAC MENT A
SCOPE OF WORK
WIDE AREA NETWORK TRANSPORT SERVICES
A. SERVICE LEVELS
Contractor shall provide transport services with high-availability and minimum downtime. Service Level Agreements
(SLAB) are a critical component of any transport service to assure that negotiated services levels are contractually
adhered to by the Contractor. The County requires a minimum of 99.99% up time on all proposed circuits. The
Contractor will ensure that available bandwidth or throughput will not drop below 90%of declared circuit capacity at
any time on any proposed circuit The Contractor will further produce reports to the County showing bandwidth
utilization and availability of throughput on an hourly, daily, weekly, monthly, and yearly basis. These reports will
be available on-line and allow for on-demand bandwidth reporting by County staff at any time. Scheduled impact to
transport services needs to be documented and sent to designated County contacts five(5)working days in advance.
The County must be notified within 30 minutes of any outages through a pre-defined County escalation plan. All
SLAB will be actively enforced by the County. Fee reductions specified in Attachment B may result from
Contractor's failure to notify County of planned and unplanned service interruptions, reduction in available circuit
capacity,delays in repair or any other disruption of service without regard to the County's actual monetary loss from
such disruptions.
B. INTERNET SERVICES
1. Network Availability
Contractor shall be available to County at least 99.99%of the time in a calendar month("Network Availability")
or County will receive service outage credits per the table below. A service outage causing Network non-
availability is defined as the inability to transmit and receive data due to a failure in Contractor's equipment or
network("Service Outage"). Credits are based upon a percentage of the monthly recurring charge("MRC'j for
the non-performing Internet Service as follows:
Per Service Outage Percentage Credit
Up to 5 minutes(99.99%availability) No Credit
5 minutes up to 4 hours 5%of the MRC
4 hours up to 8 hours 10%of the MRC
8 hours up to 12 hours 15%of the MRC
12 hours up to 16 hours 20%of the MRC
16 hours up to 24 hours 35%of the MRC
24 hours or greater 50%of the MRC
2. Network Latency
Contractor's Internet Services will have an average round-trip transmission of 50 milliseconds ("ms") or less
between Contractor Internet points of presence ("POPs") in the forty-eight contiguous United States and an
average round-trip transmission of 75 milliseconds or less between Contractor's Intemet POPS located in Hawaii
and the mainland United States("Latency"). If Contractor fails to meet the applicable Latency standard,credits
Page 3 of 7
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Page 76 of 80
Attachment B
County of Orange Price Agreement No.N1000008297
Time Warner Telecom Holdings,Inc.
will be calculated per the table below. Credits are based upon a percentage of the MRC for the non-performing
Internet Service as follows:
48 Contiguous US. Hawaii Credits
0,00 to 50.00 ms 0.00 to 75.00 ms No Credit
50.01 to 60.00 ms 75.01 to 85.00 ms 590 of the MRC
60.01 to 65.00 ms 85.01 to 90.00 ms 10%of the MRC
65.01 to 70.00 ms 90.0110 95.00 ms 15%of the MRC
70.01 to 75.00 ms 95.01 to 100,00 ms 20%of the MRC
75.01 to 80.00 ms 100.01 to 105.00 its 35%of the MRC
80.01 ms or greater 105.01 ms or greater 50%of the MRC
3. Packet Delivery
Contractor's Internet Services will have packet delivery of 99.5% or greater. Packet Delivery is determined by
averaging sample measurements taken during the most recent full calendar month between Contractor Internet
POPS.If Contractor fails to meet the applicable Packet Delivery objective,credits will be calculated per the table
below. Credits are based upon a percentage of the MRC for the non-performing Internet Service as follows:
Packet Delivery Credits
99.595or greater No Credit
99%to 99.4% 5%of the MRC
98%to 98.9% 10%of the MRC
97%to 97.9% 15%of the MRC
96%to 96.9% 20%of the MRC
95%to 95.9% 35%of the MRC
Less than 95% 50%of the MRC
4. One-time Installation
For Internet Services provisioned completely on Contractors Network, Contractor will complete
installation within 12 business days from the date the Service Order is received by Contractor's
Provisioning Network Operations Center ("PNOC"). For Off-net Services(provisioned through another
provider), Contractor will complete installation within 12 business days from the date the Service Order
is received by the PNOC,plus the underlying provider's actual installation interval.If Contractor fails to
meet the installation interval,it will provide County with a 50%credit off the installation fee set forth in
the applicable Service Order.
5. General Terms
County shall report problems with its Services by contacting Contractor's Customer & Network Reliability
Center("CNRC")at 1-800-829-D420. Contractor will open a trouble ticket and provide a trouble ticket number
for tracking purposes. For the purpose of determining the applicable credit, a Service Outage begins upon
monitoring systems report of a"down"circuit and ends when the Service is restored. The resources,equipment
and methodology used to measure service level metrics are determined by Contractor in its sole discretion.
Service Outages and failures to meet the performance objectives herein do not include outages and failures
caused by the County's equipment, acts or omissions of County or its end users, failure of elements of the
Internet outside of Contractor's control or outages occurring during scheduled or emergency maintenance.
Standard maintenance windows are based on the time cone of a city's location and are available at:
http://info.twtelecom.mdinfo.pbp?id=1. County shall be notified in advance of any planned or emergency
outages. Notification shall be a minimum of 10 business days for planned outages and 3 days for emergency
outages. The duration of a Service Outage does not include any time during which Contractor is denied access to
Page 4 of 7
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Page 77 of 80
Attachment B
County of Orange Price Agreement No.NIODD008297
Time Warner Telecom Holdings, Inc.
the premises necessary to restore the Service. County has the right to exercise any one of the SLA credits at any
time during the month and can exercise multiple credits during any month.
C. SECURITY
The County Enterprise Network requires that Contractor provides detailed documentation outlining security
polices/procedures,`Best Practices",and technologies that are implemented in the proposed WAN Transport Service
offering to increase security and mitigate risk.
D. NETWORK AND TRANSPORT MONITORING
Contractor shall provide a method for on-line monitoring by the County of all proposed circuits. The Contractor
should be able to provide reports on real-time and historical bandwidth utilization.All reports will include the ability
to show detail on an hourly, daily, weekly, monthly and yearly basis. Additionally, the Contractor may provide a
portal or secure web access for the County to monitor circuit up-time and outages.A secure Intemet-accessible web
site is preferred for County access to Contractor transport statistics and information.
E. TRANSITION,TESTING AND ACCEPTANCE
All services must be in place no later than January 15,2007, The County will require the Data Center(1400 S.Grand
Ave.) and 301 The City Drive South, Orange, be operational by December 15, 2006, to insure smooth integration
with existing County infrastructure. These dates may be change upon mutual agreement of the Patties. No payments
to the Contractor shall be made until the County has determined that a successful testing of each circuit and
integration with County network is operational.
Contractor will provide a comprehensive testing and acceptance plan for each site and each circuit type. At a
minimum the County expects these testing and acceptance criteria to include pre-acceptance uptime periods and
throughput validation methodologies.
F. ADDITIONAL CONTRACTOR REODUtEMENTS
1. Contractor shall provide full,24 hours by 7 days a week,support including telephone support(i.e.help desk)and
maintenance of communication links,if applicable.
2. Contractor will coordinate ordering,shipping and delivery of equipment and materials to any installation site, in
the event such materials are required.
3. Contractor will provide any necessary equipment to initiate new services at a given location.
4. County shall receive at minimum a one-year warranty on all new parts and equipment.
G. COUNTY TELECOMMUNICATIONS PROCEDURES
All telecommunication and data services projects in County facilities fall under the direct authority of the office of
the County Information Officer, Deputy CEO for County Executive OfftceAnformation Technology (CE01M. No
work is to be performed at any County owned or occupied facility without direct authorization from County Project
Manager.Additionally,no consultation or engineering of any sort will occur directly between the Contractor and any
other County agency regarding any County facility without the involvement,coordination and pre-approval of County
Project Manager.
Page 5 of 7
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Page 78 of 80
Attachment B
County of Orange Pnce Agreement No.NI000008297
Time Warner Telecom Holdings,Inc.
The County uses a Telephone Services Request (TSR) for all services requested from Contractor. The TSR will
indicate the installation address and the billing address,which may or may not be the same.
No work is to be performed at any County owned or occupied facility without a signed TSR from the County Project
Manager.Additionally,no consultation or engineering of any sort will occur directly between the Contractor and any
agency regarding any County facility without the involvement, coordination, and written approval from County
Project Manager. Failure to comply with these instructions can lead to termination of the Contract. Additionally, if
the Contractor installs any transport circuits without a signed TSR from the County Project Manager at any County
facility,said performance will be deemed outside the scope of this Contract and the service shall not be compensated.
If Contractor is unsure of a course of action or whether to undertake any service including but not limited to
installation, repair, deletion, or termination of any transport circuit, prior to providing any service Contractor's
Project Manager shall notify, in writing,the County Project Manager for consultation and written approval or denial
of the work.
All services are to be coordinated using the outlined methods, and through the County designated Project Manager
only. The County Project Manager may provide a minimum of thirty(30)days notice for all requests to terminate or
delete any transport circuit. The only acceptable method to proceed with work is an authorized TSR. As part of this
Contract, direct technical contact procedures and access shall be established for 24 hour/7 day week operational
response by the Contractor.
The Telephone Service Request(TSR)process is as follows:
• The County Project Manager is responsible for processing and tracking the TSR and will be the single
point of contact for any service.
• The County Project Manager will notify the Contractor of a pending TSR.
• The Contractor will pick up the TSR from the County Project Manager and arrive at the job site on the
due date to perform the work. The TSR can be faxed or e-mailed to the Contractor upon request.
• The Contractor will cover all the work to be done with the designated County contact and be prepared to
answer any questions.
• Upon arrival at the County location,the Contractor will be escorted to the work location and will perform
all the necessary work in a professional and workman like manner and notify the contact when work is
completed.
• The Contractor will explain all the work that was done and have the County departmentlagency contact
signoff on the TSR as completed.
• The Contractor will return the signed TSR and all ancillary documentation associated with the TSR to
the County Project Manager.
• The Contractor shall submit an invoice to County indicating labor and material used and referencing a
TSR and Contract number.The invoice will include a copy of the TSR with the signature of the County
contact that accepted the work performed. The Contractor will invoice the County within 60 days of the
accepted completion of the project.
Contractor shall submit a list of all employees who will be directly performing tasks associated with this Contract to
the County Project Manager.Contractor employees may be subject to a background check performed by the County's
Sheriff Department and Probation Department, if required to obtain access at certain locations. Cost for any
background check will be the responsibility of the Contractor. If changes occur to this list an updated list will be
submitted, in writing, by the Contractor, to the County Project Manager. At no Lime will unauthorized Contractor
employees perform any task associated with this Contract.If this occurs the Contractor will be notified that they have
not complied with the terms of this Contract and the Contract may be terminated.
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Attachment B
County of Orange Price Agreement No. N1000008297
Time Warner Telecom Holdings,Inc.
Exhibit H
Original Contract N1000008297
(This page intentionally left blank)
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Page 80 of 80
Attachment C
Agreement for
Wide Area Network Transport Services
Between
The County of Orange
And
Time Warner Telecom Moldings, Inc.
Page 1 of 27
Attachment C
Table of Contents
Recitals..................................................................................................................................................4
ARTICLES...................................................._........_........................._....._.._..._..._...._..._....PACE
General Terms and Conditions
A.Governing Law and Venue...............................................................................................................4
B.Entire Contract..................................................................................................................................4
C.Amendments.....................................................................................................................................4
D.Taxes.................................................................................................................................................4
E.Delivery..................................................................................................................................
F.Acceptance/Payment.........................................................................................................................5
G.Wamamy...........................................................................................................................................5
H.Patent/Copyright Material/Propriety Infringement...........................................................................5
I.Assignment or Subcontracting..........................................................................................................5
I.Non-Discrimination...........................................................................................................................5
K.Termination......................................................................................................................................5
L.Consent to Breach not Waiver..........................................................................................................6
M.Remedies Not Exclusive..................................................................................................................6
N.Independent Contractor................................_..................................................................................6
O.Performance......................................................................................................................................7
P.Indemnification/Insurance.................................................................................................................6
Q.Bills and Liens..................................................................................................................................9
R. Changes.............................................................................................................................................9
S.Change of Ownership........................................................................................................................9
T.Force Majeure...................................................................................................................................9
U.Confidentiality .................................................................................................................................9
V.Compliance with Laws ....................................................................................................................9
W.Freight..............................................................................................................................................9
X.Pricing...............................................................................................................................................10
Y.Waiver of luny Trial ........................................................................................................................10
Z.Terms and Conditions ......................................................................................................................10
A.A.Headings........................................................................................._.............................................10
BB.Sevembility....................................................................................................................................10
CC.Calendar Day..................................................................................................................................10
DD.Attorney Fees ................................................................................................................................10
EE.Interpretation..................................................................................................................................10
FF.Authority.........................................................................................................................................10
Additional Terms and Conditions
1. Scope of Contract...........................................................................................................................10
2. Term of Contract—.........................................................................................................................11
3. Fiscal Appropriations.....................................................................................................................11
4. Precedence.....................................................................................................................................it
5. Compensation................................................................................................................................11
6. Project Manager—County/Contractor...........................................................................................11
TContractor Personnel..............................................._...................................................................II
8. ReporlsMIeetings...........................................................................................................................12
9. Contractor's Records.....................................................................................................................12
10. Conflict of Interest—Contractor. ..................................................................................................12
11. Ownership of Documents..............................................................................................................12
12. Data-Title to...................................................................................................................................12
2
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Attachment C
13. Breach of Contract..................................................................................................................I......12
14. Contract Disputes...........................................................................................................................13
15. Stop Work......................................................................................................................................13
16. Termination—Orderly.........................................................._.......................................................13
17. Notices.........................................................................................................................................14
18. Incorporation..................................................................................................................................14
19. Usage......................._....................................................................................................................14
20. Auditslfnspections..........................................................................................................................14
21. Conditions Affecting Work............................................................................................................IS
22. Contractor's Expense.....................................................................................................................15
23. Gratuities............................................................................................................._.........................15
24. Authorization Warranty.................................................................................................................15
25. News/Information Release.............................................................................................................15
26. County of Orange Child Support Enforcement Requirements ......................................................15
27. Errors and Omissions.....................................................................................................................16
ContractSignature Page....................................................................................................................17
Attachments
A. Scope of Work...............................................................................................................................18
B. Cost/Compeasation for Contractor Services..................................................................................21
C. Staffing Plan..................................................................................................................................23
Exhibits
I. Blank County of Orange Child Support Enforcement Certification Requirements Form.............24
3
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Attachment C
AGREEMENT BETWEEN COUNTY OF ORANGE
AND TIME WARNER TELECOM HOLDINGS,INC.,
FOR WIDE AREA NETWORK TRANSPORT SERVICES
This Agreement, hereinafter referred to as "Contract", is made and entered into as of the date fully executed by
and between the County of Orange, a political subdivision of the State of California,hereinafter referred to as"County",
and Time Warner Telecom Holdings, Inc., with a place of business at 7 Mason Irvine, CA, hereinafter referred to as
"Contractor",which are sometimes individually referred to as"Party",or collectively referred to as"Parties".
RECITALS
WHEREAS, County desires to enter into a Contract with Contractor to provide wide area network transport
services("WAN");and
WHEREAS, Contractor is willing to provide the services specified in the Scope of Work, attached hereto and
hereinafter referred to as Attachment A,in accordance with the following Terms and Conditions;
NOW,THEREFORE,the Parties mutually agree as follows:
ARTICLES
General Terms and Conditions
A. Governing Law and Venue: This Contract has been negotiated and executed in the state of California and shall be
governed by and construed under the laws of the state of California. In the event of any legal action to enforce or
interpret this Contract, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange
County. California, and the Parties hereto agree to and do hereby submit to the jurisdiction of such court,
notwithstanding Code of Civil Procedure section 394. Furthermore,the Parties specifically agree to waive any and all
rights to request that an action be transferred for trial to another County.
B. Entire Contract: This Contract, including its Attachments and Exhibit which have been incorporated, when
accepted by the Contractor either in writing or by the shipment of any article or other commencement of performance
hereunder, contains the entice Contract between the Parties with respect to the matters herein and there are no
restrictions, promises, warranties or undertakings other than those set forth herein or referred to herein. No
exceptions, altemadves, substitutes or revisions are valid or binding on County unless authorized by County in
writing. Electronic acceptance of any additional terms, conditions or supplemental Contracts by any County
employee or agent, including but not limited to installers of software, shall not be valid or binding on County unless
accepted in writing by the County's Purchasing Agent or his designee,hereinafter"Purchasing Agent",
C. Amendments: No alteration or variation of the terms of this Contract shall be valid unless made in writing and
signed by the Parties; no oral understanding or agreement not incorporated herein shall be binding on either of the
Parties; and no exceptions, alternatives, substitutes or revisions are valid or binding on County unless authorized by
County in writing.
D. Taxes: Unless otherwise provided herein or by law,price quoted does not include California state sales or use tax.
E. Delivery: Time of delivery of goods or services is of the essence in this Contract. County reserves tie right to refuse
any goods or services and to cancel all or any part of the goods not conforming to applicable specifications,drawings,
samples or description,or services that do not conform to the prescribed statement of work. Acceptance of any part of
the order for goods shall not bind County to accept future shipments,nor deprive it of the right to return goods already
accepted,at Contractor's expense. Over shipments and under shipments of goods shall be only as agreed to in writing
File Folder$47018 4
Page 4 of 27
Attachment C
by County. Delivery shall not be deemed to be complete until all goods,or services,have actually been received and
accepted in writing by County.
F. AcceptancelPsyment: Unless otherwise agreed to in writing by County, 1)acceptance shall not be deemed complete
unless in writing and initial testing of transport circuit has been completed as set forth in Attachment A,Transition,
Testing and Acceptance,and 2) payment shall be made in arrears after satisfactory acceptance by the County and in
accordance with Attachment B,Cost/Compensation.
G. Warranty: Contractor expressly warrants that the goods/services covered by this Contract are 1) free of liens or
encumbrances, 2) merchantable and good for the ordinary purposes for which they are used, and 3) fit for the
particular purpose for which they are intended. Acceptance of this order shall constitute an agreement upon
Contractor's part to indemnify,defend and hold County and its indernm ees as identified in paragraph'?"below, and
as more fully described in paragraph"P", harmless from liability, loss, damage and expense, including reasonable
counsel fees, incurred or sustained by County by reason of the failure of the goods/services to conform to such
warranties, faulty work performance, negligent or unlawful acts, and non-compliance with any applicable state or
federal codes, ordinances, orders, or statutes, including the Occupational Safety and Health Act (OSHA) and the
California Industrial Safety Act. Such remedies shall be in addition to any other remedies provided by law.
H. Patent/Copyright MateriaLdProprietary Infringement: Unless otherwise expressly provided in this Contract,
Contractor shall be solely responsible for clearing the right to use any patented or copyrighted materials in the
performance of this Contract. Contractor warrants that any software as modified through services provided hereunder
will not infringe upon or violate any patent, proprietary right, or trade secret right of any third patty. Contractor
agrees that, in accordance with the more specific requirement contained in paragraph"P"below, it shall indemnify,
defend and hold County and County hidemnitees harmless from any and all such claims and be responsible for
payment of all costs, damages, penalties and expenses related to or arising from such claim(s), including, but not
limited to,auomey's fees,costs and expenses.
I. Assignment or Sub-contracting: The terms,covenants,and conditions contained herein shall apply to and bind the
heirs, successors, executors, administrators and assigns of the Parties. Furthermore,neither the performance of this
Contract nor any portion thereof may be assigned or sub-contracted by Contractor without the express written consent
of County. Any attempt by Contractor to assign or sub-contract the performance or any portion thereof of this
Contract without the express written consent of County shall be invalid and shall constitute a breach of this Contract.
I. Non-Discrimination: In the performance of this Contract, Contractor agrees that it will comply with the
requirements of Section 1735 of the California Labor Code and not engage nor permit any subcontractors to engage in
discrimination in employment of persons because of the race,religious creed,color,national origin,ancestry,physical
disability,mental disability, medical condition,marital status,or sex of such persons. Contractor acknowledges that a
violation of this provision shall subject Contractor to all the penalties imposed for a violation of anti-discrimination
law or regulation including but not limited to Section 1720 et se�(r.of the California Labor Code.
K. Termination: In addition to any other remedies or rights it may have by law and those set forth in the Contract,
County has the right to terminate this Contract without penalty immediately with cause or after 30 days'written notice
without cause, unless otherwise specified. In the event County terminates this Contract or any of the Services
specified in Attachment B, Number 2 ("Initial Service Purchase") without cause, County shall pay to Contractor
Termination Liability equal to 100% of the applicable monthly recurring charge for the terminated services for the
remaining term of the Contract, County may terminate individual Services without terminating the Contract in its
entirety. County shall not be responsible for Termination Liability associated with the termination of individual
services that are part of the Initial Service Purchase provided that the following conditions are met:(a)within 30 days
of the termination of such service, County orders new Services from Contractor at a service address specified in
Attachment B for a term not less than the unexpired term of the terminated Services; (b) the new Services do not
require Contractor to incur capital expenditures; and(c)the new Services have monthly rectnring charges equal to or
File Folder547018 $
Page 5 of 27
Attachment C
greater than the monthly recurring charges for the terminated Services;or,(d),in lieu of(a),(b)and(c)above, within
30 days of the termination of such Services, (i) County orders new Services from Contractor at any location, (ii)
County pays for any capital or build out expenses incurred in providing the new Services as a one time fee or
incorporated in the applicable monthly recurring charge, and (iii) the new Services have monthly recurring charges
pess any portion of the monthly recurring charge associated with capital or build out expenses),equal to or greater
than the monthly recurring charges for the terminated Services. Termination Liability for future services ordered at
locations other than those referenced in Attachment B,Number 2,Initial Service Purchase,shall be determined by the
parties at the time such services are ordered and shall be reflected in an amendment to this Agreement as referenced in
Paragraph C above. Cause shall be defined as any breach of Contract, any misrepresentation or fraud on the part of
the Contractor. Exercise by County of its right to terminate the Contract shall relieve County of all further obligations
except as provided herein.
Termination by Contractor: (a) Contractor may terminate this Contract or any service order hereunder or suspend
services, with 30 days prior written notice, upon: (i) County's failure to pay any amounts as provided herein; (H)
County's breach of any provision of this Contract or any law, rule or regulation governing the services; (iii) any
insolvency,bankruptcy assignment for the benefit of creditors,appointment of trustee or receiver or similar event with
respect to County; or(iv)any governmental prohibition or required alteration of the services. Contractor shaft afford
County written notice of the breach and ten calendar days or such shorter time that may be specified in this Contract
within which to cure the breach. (b)Contractor may terminate or suspend services without notice if: (i)necessary to
protect Contractors network;Contractor has reasonable evidence of County's fraudulent or illegal use of services;or
(ii)required by legal or regulatory authority. Any termination shall not relieve County of any liability incurred prior
to such termination,or for payment of unaffected services. All terms and conditions of the Contract shall continue to
apply to any services not so terminated, regardless of the rermination of this Contract. If the service provided under
any service order hereunder has been terminated by Contractor in accordance with this section,and County wants to
restore such service terminated due to County breach, County must first pay all past due charges, a non-recurring
charge and reconnections charge. All requests for disconnection will be processed by Contractor in 30 days or less.
County must pay for services until such disconnection actually occurs, unless County has exercised its right to
terminate for cause as set forth in this Section.
L. Consent to Breach Not Waiver: No term or provision of this Contractor shall be deemed waived and no breach
excused, unless such waiver or consent shall be in writing and signed by the Party claimed to have waived or
consented. Any consent by any Party to, or waiver of, a breach by the other, whether express or implied, shall not
constitute consent to,waiver of,or excuse for any other different or subsequent breach.
M. Remedies Not Exclusive: The remedies for breach set forth in this Contract are cumulative as to one another and as
to any other provided by law, rather than exclusive;and the expression of certain remedies in this Contract does not
preclude resort by either Party to any other remedies provided by law.
N. Independent Contractor: Contractor shall be considered an independent Contractor and neither Contractor, its
employees nor anyone working under Contractor shall be considered an agent or an employee of County. Neither
Contractor its employees nor anyone working under Contractor, shall qualify for workers' compensation or other
fringe benefits of any kind through County.
O. Performance: Contractor shall perform all work under this Contract, taking necessary steps and precautions to
perform the work to County's satisfaction. Contractor shall be responsible for the professional quality, technical
assurance, timely completion and coordination of all documentation and other goods/services furnished by the
Contractor under this Contract. Contractor shall perform all work diligently,carefully, and in a good and workman-
like manner; shall ftm ish all labor, supervision, machinery, equipment, materials, and supplies necessary therefore;
shall at its sole expense obtain and maintain all permits and licenses required by public authorities,including those of
County required in its governmental capacity, in connection with performance of the work; and, if permitted to
subcontract,shall be fully responsible for all work performed by subcontractors.
File Folder 547018 6
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Attachment C
P. IndemruficatiordInsurance:
INDEMNIFICATION PROVISIONS
Contractor agrees to indemnify,defend with counsel approved in writing by County,and hold County, its elected and
appointed officials, officers, employees, agents and those special districts and agencies which Coun[y's Board of
Supervisors acts as the governing Board("County Indemnitem")harmless from any claims, demands or liability for
personal injury or property damage, arising from or related to the services,products or other perfomtance provided by
Contractor pursuant to this Contract. Contractor is not liable for any indirect, incidental, consequential, special or
punitive damages (including without limitation, lost profits or revenue) arising out of or related to the provision of
services hereunder, including any claims made by or through third parties. Contractor's liability to County may not
exceed one month's calculation of monthly charges for the applicable services. Contractor has no liability whatsoever
for the content of information passing through its network If judgment is entered against Contractor and County by a
court of competent jurisdiction because of the concurrent active negligence of County or County Indemnitees,
Contractor and County agree that liability will be apportioned as determined by the court. Neither Party shall request
a jury apportionment.
INSURANCE PROVISIONS
Prior to the provision of services under this Contract, the Contractor agrees to purchase all required insurance at
Contractor's expense and to deposit with the County Certificates of hvsurance, including all endorsements required
herein, necessary to satisfy the County that the insurance provisions of this Contract have been complied with and to
keep such insurance coverage and the certificates therefore on deposit with the County during the entire term of this
Contract. In addition, all subcontractors performing work on behalf of Contractor pursuant to this Contract shall
obtain insurance subject to the same terms and conditions as set forth herein for Contracmr.
All insurance policies required by this Contract shall declare any deductible or self-insured retention (SIR) in an
amount in excess of$25,000($5,000 for automobile liability Contractor shall be responsible for reimbursement of any
deductible to the insurer. Any self-insured retentions(Slits)or deductibles shall be clearly stated on the Certificate of
Insurance.
If the Contractor fails to maintain insurance acceptable to the County for the full term of this Contract, the County
may terminate this Contract.
Oualified Insurer
The policy or policies of insurance must be issued by an insurer licensed to do business in the state of California
(California Admitted Cattier).
Minimum insurance company ratings m detemtined by the most current edition of the Best's Rev Ratme
Gulde/Prooerty-Casualtv/United States or ambest.com shall be A-(Secure Best's Rating)and VM(Financial Size
Category).
If the carrier is a non-admitted carrier in the state of California, CEO/Office of Risk Management retains the right to
approve or reject cagier after a review of the company's performance and financial ratings.
The policy or policies of insurance maintained by the Contractor shall provide the minimum limits and coverage as set
forth below:
Coveraee Minimum Limits
Commercial General Liability with broad form $1,000,000 combined single
property damage and contractual liability limit per occurrence
$2.000,000 aggregate
File Folder 547018 7
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Attachment C
Automobile liability including coverage $1,000,000 combined single
for owned,non-owned and hired vehicles limit per occurrence
Workers'Compensation Statutory
Employers'Liability Insurance $1,000,000 per occurrence
All liability insurance,except Professional Liability, required by this Contract shall be at least$1,000,000 combined
single limit per occurrence. Professional Liability may also be provided on a "claims made" basis. The minimum
aggregate limit for the Commercial General Liability policy shall be$2,000,000.
The County of Orange shall be added as an additional insured on all insurance policies required by this Contract with
respect to work done by the Contractor under the terms of this Contract (except Workers' Compensation/Employers'
Liability). An additional insured endorsement evidencing that the County of Orange is an additional insured shall
accompany the Certificate of Insurance.
All insurance policies required by this Contract shall be primary insurance, and any insurance maintained by the
County of Orange shall be excess and non-contributing with insuramm provided by these policies. An endorsement
evidencing that the Contractor's insurance is primary and non-contributing shall specifically accompany the
Certificate of Insurance for the Commercial General Liability.
All insurance policies required by this Contract shall give the County of Orange 30 days notice in the event of
cancellation. This shall be evidenced by an endorsement separate from the Certificate of Insurance. In addition, the
cancellation clause must include language as follows,which edits the pre-printed ACORD certificate:
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION
DATE THEREOF, THE ISSUING COMPANY WILL MAIL 30 DAYS WRITTEN NOTICE TO THE
CERTIFICATE HOLDER NAMED TO THE LEFT.
All insurance policies required by this Contract shall waive all rights of subrogation against the County of Orange and
members of the Board of Supervisors,its elected and appointed officials,officers,agents and employees when acting
within the scope of their appointment or employment.
If Contractor's Professional Liability policy is a"claim made"policy,Contractor shall agree to maintain professional
liability coverage for two years following completion of Contract
The Commercial General Liability policy shall contain a severability of interests clause.
The Contractor is aware of the provisions of Section 3700 of the California Labor Code which requires every
employer to be insured against liability for Workers' Compensation or be self-insured in accordance with provisions
of that code. The Contractor will comply with such provisions and shall furnish the County satisfactory evidence that
the Contractor has secured, for the period of this Contract, statutory Workers' Compensation insurance and
Employers'Liability insurance with minimum limits of$1,000,000 per occurrence.
Insurance certificates should be forwarded to the agency/department address listed on the solicitation.
If the Contractor fails to provide the insurance certificates and endorsements within seven days of notification by
CEO/Purchasing or the agency/department purchasing division,award may be made to the next qualified Offeror.
County expressly retains the right to require Contractor to increase or decrease insurance of any of the above
insurance types throughout the term of this Contract. Any increase or decrease in insurance will be as deemed by
County of Orange Risk Manager as appropriate to adequately protect County.
File Folder 547018 $
Page 8 of 27
Attachment C
County shall notify Contractor in writing of changes in the insurance requirements. if Contractor does not deposit
copies of acceptable certificates of insurance and endorsements with County incorporating such changes within thirty
days of receipt of such notice, this Contract may be in breach without further notice to Contractor, and County shall
be entitled to all legal remedies.
The procuring of such required policy or policies of insurance shall not be consorted to limit Contractor's liability
hereunder nor to fulfill the indemnification provisions and requirements of this Contract.
The County of Orange Certificate of Insurance and the Special Endorsement for the County of Orange can be utilized
to verify compliance with the above-mentioned insurance requirements in place of commercial insurance certificates
and endorsements
Q. Bills and Liens: Contractor shall pay promptly all indebtedness for labor, materials and equipment used in
performance of the work. Contractor shall not permit any lien or charge to attach to the work or the premises,but if
any does so attach, Contractor shall promptly procure its release and, in accordance with the requirements of
paragraph "P" above, indemnify, defend, and hold County harmless and be responsible for payment of all costs,
damages,penalties and expenses related to or arising from or related thereto.
R. Changes: Contractor shall make no changes in the work or perform any additional work without the County's
specific written approval.
S. Change of Ownership: Contractor agrees that if there is a change or transfer in ownership of Contractor's business
prior to completion of this Contract,the new owners shall be required under terms of sale or other transfer to assume
Contractor's duties and obligations contained in this Contract and complete them an the satisfaction of County.
T. Force Majeure: Contractor shall not be assessed with liquidated damages or unsatisfactory performance penalties
during any delay beyond the time named for the performance of this Contract caused by any act of God,war, civil
disorder, employment strike or other cause beyond its reasonable control,provided Contractor gives written notice of
the cause of the delay to County within 36 (thirty-six)hours of the start of the delay and Contractor avails himself of
any available remedies.
U. Confidentiality: Contractor agrees to maintain the confidentiality of all County and County-related records and
information pursuant to all statutory laws relating to privacy and confidentiality that currently exist or exist at any
time during the term of this Contract. All such records and information shall be considered coiTidential and kept
confidential by Contractor and Contractor's staff,agents and employees.
V. Compliance with Laws: Contractor represents and warrants that services to be provided under this Contract shall
fully comply, at Contractor's expense, with all standards, laws, statutes, restrictions, ordinances, requirements, and
regulations (collectively "laws'), including, but not limited to those issued by County in its governmental capacity
and all other laws applicable to the services at the time services are provided to and accepted by County.Contractor
acknowledges that County is relying on Contractor to ensure such compliance, and pursuant to the requirements of
paragraph "P" above, Contractor agrees that it shall defend, indemnify and hold County and County Indemnitees
harmless from all liability,damages,costs and expenses arising from or related to a violation of such laws.
W. Freight(F.O.B.Destination): Contractor assumes full responsibility for all transportation,transportation scheduling,
packing,handling, insurance,and other services associated with delivery of all products deemed necessary under this
Contract.
X. Pricing: The Contract price shall include full compensation for providing all required goods in accordance with
required specifications, or services as specified herein or when applicable, in the Scope of Work attached to this
Contract,and no additional compensation will be allowed therefore, unless otherwise provided for in this Contract.
File Folder 547018 9
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Attachment C
Y. Waiver of Jury Trial: Each Parry acknowledges that it is aware of and has had the opportunity to seek advice of
counsel of its choice with respect to its rights to trial by jury, and each Party,for itself and its successors,creditors,
and assigns, does hereby expressly and knowingly waive and release all such rights to trial by jury in any action,
proceeding or counterclaim brought by any Party hereto against the other (and/or against its officers, directors,
employees, agents,or subsidiary or affiliated entities)on or with regard to any matters whatsoever arising out of or in
any way connected with this Contract and/or any other claim of injury or damage,
Z. Terms and Conditions: Contractor acknowledges that it has read and agrees to all terns and conditions included in
this Contract.
AA. Headings: The various headings and numbers herein, the grouping of provisions of this Contract into separate
clauses and paragraphs, and the organization hereof are for the purpose of convenience only and shall not limit or
otherwise affect the meaning hereof.
BE. Severability: If any term, covenant, condition or provision of this Contract is held by a court of competent
jurisdiction to be invalid, void or unenforceable,the remainder of the provisions hereof shall remain in full force and
effect and shall in no way be affected,impaired or invalidated thereby.
CC. Calendar Days: Any reference to the word "day" or "days" herein shall mean calendar day or calendar days,
respectively,unless otherwise expressly provided.
DD. Attorneys Fees: In any action or proceeding to enforce or interpret any provision of this Contract, or where any
provision hereof is validly asserted as a defense,each party shall bear its own atmmey's fees,costs and expenses.
EE. Interpretation: This Contract has been negotiated at arm's length and between persons sophisticated and
knowledgeable in the matters dealt with in this Contract. In addition,each Party has been represented by experienced
and knowledgeable independent legal counsel of their own choosing,or has knowingly declined to seek such counsel
despite being encouraged and given the opportunity to do so. Each Party further acknowledges that they have not
been influenced to any extent whatsoever in executing this Contract by any other Party hereto or by any person
representing them, or both. Accordingly, any rule of law (including California Civil Code Section 1654) or legal
decision that would require interpretation of any ambiguities in this Contract against the Party that has drafted it is not
applicable and is waived. The provisions of this Contract shall be interpreted in a reasonable manner to affect the
purpose of the Parties and this Contract.
FF. Authority: The Parties to this Contract represent and warrant that this Contract has been duly authorized and
executed and constitutes the legally binding obligation of their respective organization or entity, enforceable in
accordance with its terms.
Additional Terms and Conditions
1. Scope of Contract: This Contract specifies the contractual terms and conditions by which the County will
procure and receive good(services from Contractor as set forth in Attachment A. This Contract supersedes the
Time Warner Telecom Standard Terms and Conditions submitted in response to RFPS 14Z0000005. County of
Orange tray submit service orders to Contractor to purchase telecommunication and related services under this
Agreement("Service Orders'). The Service Orders describe the telecommunication and related services that are
available for purchase C`Services'7. When fully executed by both Parties,the Service Orders and this Contract
form the final written agreement between the Parties ("Agreemenf'). However,should a conflict arise between
the contents of this Contract and the contents of a specific Service Order or the Service Orders collectively,the
Tema and Conditions of this Contract shall prevail.
Ale Folder 547018 10
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Attachment C
2. Term of Contract: The initial tern of this Contract is for three(3)years effective on the date execution is completed
by both Parties,continuing for three(3)years from that date,unless terminated by County. Contract may be renewed for
up to two (2) additional one-year, consecutive terms, upon mutual agreement of the Patties. Each renewal of this
Contract may require approval by the County Board of Supervisors. County is not required to provide a reason, or
rationale in the event it elects not to renew the Contract.
3. Fiscal Appropriations: This Contract is subject to and contingent upon applicable budgetary appropriations
being approved by the County of Orange Board of Supervisors for each year during the term of this Contract. If
such appropriations are not forthcoming, the Contract will be terminated without penalty. Contractor
acknowledges that funding or portions of funding for this Contract may also be contingent upon the receipt of
funds from, and/or appropriation of funds by, the state of California to County. If such funding and/or
appropriations are not forthcoming, or are otherwise limited, County may immediately terminate or modify this
Contract without penalty,
4. Precedence: The Contract documents consist of this Contract including its Attachments and Blank Exhibit. In
the event of a conflict between the Contract documents,the order of precedence shall be the 1)the General Terms
of this Contract,2)the Additional Terns of the Contract and 3)the Attachments and Exhibit.
5. Compensation: The Contractor agrees to accept the specified compensation as set forth in Attachment B as full
remuneration for performing all services and famishing all staffing and materials required, for any reasonably
unforeseen difficulties which may arise or be encountered in the execution of the services until acceptance, for
risks connected with the services, and for performance by the Contractor of all its duties and obligations
hereunder.
6. County and Contractor Project Manager: The County shalt appoint a Project Manager to act as liaison
between the County and the Contractor during the term of this Contract. The County's Project Manager shall
notify Contractor of any transport circuits to be added or terminated. Contractor shall not add, delete, install,
remove or terminate any individual or group of transport circuit(s) without a TSR submitted by the County's
Project Manager. Contractor shall not be compensated for any transport circuit, service, termination,deletion or
monthly charges, fees or rates for any transport circuit which has not been requested in writing by the County
Project Manager.
Contractor shall appoint a Project Manager to direct the Contractor's efforts in fulfilling Contractor's obligations
under this Contract. Contractor's Project Manager shall be subject to approval by the County and shall not be
changed without the written consent of the County's Project Manager. The County's Project Manager shall have
the right to require the removal and replacement of the Contractor's Project Manager from providing services to
the County under this Contract. The County's Project Manager shall notify the Contractor in writing of such
action. The Contractor shall accomplish the removal within 14 calendar days after written notice by the County's
Project Manager.The County is not required to provide any reason,rationale or factual information in the event it
elects to request the removal of Contractor's Project Manager from providing services to the County under this
Contract.
7. Contractor Personnel: In addition to the rights set forth in paragraph 6, the County's Project Manager shall
have the right to require the removal and replacement of any of Contracroes personnel from providing services to
the County under this Contract. The County's Project Manager shall notify the Contractor's Project Manager in
writing of such action. The Contractor shall accomplish the removal of the specified personnel within one (1)
calendar days after written notice by the County's Project Manager. The County is not required to provide any
reason, rationale or factual information in the event it elects to request the removal of any of Contractor's
personnel from providing services to the County under this Contract.
File Folder 54i018 11
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Attachment C
8. Reports/Meetings: The Contractor shall develop reports and any other relevant documents necessary to
complete die services and requirements as or forth in this Contract. The County's Project Manager and the
Contractor's Project Manager will meet on reasonable notice to discuss the Contractor's performance and
progress under this Contract. If requested, the Contractor's Project Manager and other project personnel shall
attend all meetings. The Contractor shall provide such information that is requested by the County for the
purpose of monitoring progress under this Contract.
9. Contractor's Records: The Contractor shall keep true and accurate accounts, records, books and data which
shall correctly reflect the business transacted by the Contractor in accordance with generally accepted accounting
principles. These records shall be stored in Orange County for a period of four years after final payment is
received from the County. Storage of records in another county will require written approval from the County of
Orange assigned buyer.
10. Conflict of Interest — (Contractor): Contractor shall exercise reasonable care and diligence to prevent any
actions or conditions that result in a conflict with the but interests of the County. This obligation shall apply to
the Contractor; the Contractor's employees, agents, relatives, sub-tier Contractors, and third parties associated
with accomplishing work and services hereunder. Contractor's efforts shall include, but not be limited to
establishing precautions to prevent its employees or agents from making, receiving, providing or offering gifts,
entertainment,payments,loans or other considerations which could be deemed to appear to influence individuals
to act contrary to the best interest of the County.
11. Ownership of Documents: The County has permanent ownership of all directly connected and derivative
materials produced under this Contract by the Contractor. All documents, reports and other incidental or
derivative work or materials furnished hereunder shall become and remains the sole property of the County and
may be used by the County as it may require without additional mst to the County. None of the documents,
reports and other incidental or derivative work or furnished materials shall be used by the Contractor without the
express written consent of the County.
12. Data—Title to: All materials,documents,data or information obtained from the County data files or any County
medium furnished to the Contractor in the performance of this Contract will at all times remain the property of the
County. Such data or information may not be used or copied for direct or indirect use by the Contractor after
completion or termination of this Contract without the express written consent of the County. All materials,
documents,data or information,including copies,must be retuned to the County at the end of this Contract.
13. Btuch of Contract: The failure of the Contractor to comply with any of the provisions,covenants or conditions
of this Contract shall be a material breach of this Contract, In such event the County may, and in addition to any
other remedies available at law, in equity,or otherwise specified in this Contract:
1. Afford the Contractor written notice of the breach and ten calendar days or such shorter time that may be
specified in this Contract within which to cure the breach;and
2. Discontinue payment to the Contactor for and during the period in which the Contractor is in breach;and
3. Offset against any monies billed by the Contractor but yet unpaid by the County those monies disallowed
pursuant to the above;and
4. County may terminate the Contract immediately without penalty.
14. Contract Disputes:
A. The Parties shall deal in good faith and attempt to resolve potential disputes informally. If the dispute
concerning a question of fact arising under the terms of this Contract is not disposed of in a reasonable period
File Folder547n18 12
Page 12 of 27
Attachment C
of time by the Contractor's Project Manager and the county's Project Manager,such matter shall be brought
to the attention of the County Purchasing Agent by way of the following process:
1. The Contractor shall submit ro the agency/department assigned buyer a written demand for a final
decision regarding the disposition of any dispute between the parties arising under, related to, or
involving this Contract, unless the County, on its own initiative, has already rendered such a final
decision.
2. The Contractor's written demand shall be fully supported by factual information,and if such demand
involves a cost adjustment to the Contract, the Contractor shall include with the demand a written
statement signed by a senior official indicating that the demand is made in good faith, that the
supporting data are accurate and complete, and that the amount requested accurately reflects the
Contract adjustment for which the Contractor believes the County is liable.
B. Pending the final resolution of any dispute arising under,related to,or involving this Contract,the Contractor
agrees to diligently proceed with the performance of this Contract, including the delivery of goods and/or
provision of services. The Contractor's failure to diligently proceed shall be considered a material breach of
this Contract.
C. If County disputes any charges billed hereunder, County must submit a documented claim regarding the
disputed amount within 120 days of knowing or having should have known that the charges billed are
incorrect. All claims regarding disputed charges not submitted to Contractor within such time are deemed
waived.
Any final decision of the County shall be expressly identified as such,shall be in writing, and shall be signed by
the County Purchasing Agent or his designee. If the County fails to render a decision within 90 days after receipt
of the Contractor's demand, it shall be deemed a final decision adverse to the Contractor's contentions.
15, Stop Work: The County may,at any time,by written stop work order to the Contractor,require the Contractor to
stop all or any part of the work called for by this Contract for a period of 90 working days after the stop work
order is delivered to the Contractor and for any further period to which the Patties may agree. The stop work
order shall be specifically identified as such and shall indicate it is issued under this clause. Upon receipt of the
step work order,the Contractor shall immediately comply with its terms and take all reasonable steps to minimize
the incurrence of costs allocable to the work covered by the stop work order during the period of work stoppage.
Within a period of 90 working days after a stop work order is delivered to the Contractor or within any extension
of that period to which the Parties shall have agreed,the County shall either
1. Cancel the stop work order;or
2. Terminate the Contract in whole or in part in writing as soon as feasible. County is not required to
provide thirty (30) days notice of the termination of the Contract to Contractor if a stop work has been
issued by County.
16. Orderly Termination: Upon termination or other expiration of this Contract,each Party shall promptly return to
the other Parry all papers,materials,and other properties of the other held by each for purposes of execution of the
Contract. In addition, each Party will assist the other Party in orderly termination of this Contract and the
transfer of all aspects, tangible and intangible, as may be necessary for the orderly, non-dismptive business
continuation of each Party.
17. Notices: Any and all notices permitted or required to be given hereunder shall be deemed duly given (1) upon
actual delivery,if delivery is by hand;or(2)upon delivery by the United States mail if delivery is by postage paid
File Folder 5i7018 13
Page 13 of 27
Attachment C
registered or certified return receipt requested mail. Each such notice shall be sent to the respective Party at the
address indicated below or to any other address as the respective Parties may designate from time to time.
For Contractor.
Name: Time Warner Telecom Holdines,Inc.
Address: 7 Mason
City,State,Zip Code: Irvine.CA 92618
Attn: Manuel Lopez
Title: Account Manager
Phone: (949) 672-0319
For County:
County of Orange
CEOQTIFtmmce&Contracts
1501 E.St.Andrew Place,2e'Floor
Santa Ana,CA 92705
Attn: Diana Banzet
Deputy Pmcbasing Agent
714-567-7506
714-567-5195 Fax
18. Incorporation: This Contract, its Attachments A through C, and blank form Exhibit I are attached hereto and
incorporated by reference and trade a part of this Contract.
19. Usage: No guarantee is given by the County to the Contractor regarding usage of this Contract. Usage figures,if
provided, are approximate, based upon the last usage. The Contractor agrees to supply services and/or
commodities requested,as needed by the County of Orange, at prices listed in the Contract,regardless of quantity
requested.
20. Audits(Inspections: Contractor agrees to permit the County's Auditor-Controller or the County's authorized
representative(including auditors from a private auditing firm hired by the County)access during normal working
hours to all books,accounts,records,reports,files,financial records,supporting documentation,including payroll
and accounts payable/receivable records,and other papers or property of Contractor for the purpose of auditing or
inspecting any aspect of performance under this Contract. The inspection andfor audit will be confined to those
matters connected with the performance of the Contract including, but not limited to, the costs of administering
the Contract. The County will provide reasonable notice of such an audit a inspection.
The County reserves the right to audit and verify the Contractor's records before payment is made.
Contractor agrees to maintain such records for possible audit for a minimum of four years after final payment,
unless a longer period of records retention is stipulated under this Contract or by law. Contractor agrees to allow
interviews of any employees or others who might reasonably have information related to such records. Further,
Contractor agrees to include a similar right to the County to audit records and interview staff of any subcontractor
related to performance of this Contract.
Should the Contractor cease to exist as a legal entity,the Contractor's records pertaining to this Contract shall be
forwarded to the surviving entity in a merger or acquisition or,in the event of liquidation,to the County's Project
Manager.
21. Conditions Affecting Work: The Contractor shall be responsible for taking all steps reasonably necessary to
ascertain the nature and location of the work to be performed under this Contract and to know the general
File Folder 547018 14
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Attachment C
conditions which can affect the work or the cost thereof. Any failure by the Contractor to do so will not relieve
Contractor from responsibility for successfully performing the work without additional cost to the County. The
County assumes no responsibility for any understanding or representations concerning the nature, location(s) or
general conditions made by any of its officers or agents prior to the execution of this Contract, unless such
understanding or representations by the County are expressly stated in the Contract.
22. Contractor's Expense: The Contractor will be responsible for all costs related to photo copying, telephone
communications, fax communications, and parking while on County sites during the performance of work and
services under this Contract uNess otherwise specified. The County will not provide free parking for any service
in the County Civic Center.
23. Gratuities: The Contractor warrants that no gratuities, in the form of entertainment, gifts or otherwise, were
offered or given by the Contractor or any agent or representative of the Contractor to any officer or employee of
the County with a view toward securing the Contract or securing favorable treatment with respect to any
determinations concerning the performance of the Contract. For breach or violation of this warranty,the County
shall have the right to terminate the Contract,either in whole or in part,and any loss or damage sustained by the
County in procuring on the open market any goods or services which the Contractor agreed to supply shall be
home and paid for by the Contractor. The rights and remedies of the County provided in the clause shall not be
exclusive and are in addition to any other rights and remedies provided by taw or under the Contract.
24. Authorization Warranty: The Contractor represents and warrants that the person executing this Contract on
behalf of and for the Contractor is an authorized agent who has actual authority to bind the Contractor to each and
every term, condition and obligation of this Contract and that all requirements of the Contractor have been
fulfilled to provide such actual authority.
25. News/Information Release: The Contractor agrees that it will not issue any news releases in connection with
either the award of this Contract or any subsequent amendment of or effort under this Contract without first
obtaining review and written approval of said news releases from the County through the County's Project
Manager.
26. County of Orange Child Support Enforcement Requirements Blank Form (Exhibit 1) In order to comply
with the child support enforcement requirements of the County of Orange, within ten days of notification of
selection of award of Contract but prior to official award of Contract,the selected Contractor agrees to furnish to
the Deputy Purchasing Agent:
A. In the case of an individual Contractor, his/her name, date of birth, Social Security number, and
residence address;
B. In the case of a Contractor doing business in a form other than as an individual,the name,date of
birth, Social Security number, and residence address of each individual who owns an interest of
10 percent or more in the contracting entity;
C. A certification that the Contractor has fully complied with all applicable federal and state
reporting requirements regarding its employees;and
D. A certification that the Contractor has fully complied with all lawfully served Wage and Earnings
Assignment Orders and Notices of Assignment and will continue to so comply. The required
certification is listed in Exhibit I. A blank Exhibit I is attacbed hereto.
Failure of the Contractor to timely submit the data and/or certifications required may result in the Contract being
awarded to another Contractor. In the event a Contract has been issued,failure of the Contractor to comply with
all federal, state, and local reporting requirements for child support enforcement or to comply with all lawfully
FBe Foider547018 15
Page 15 of 27
Attachment C
served Wage and Earnings Assignment Orders and Notices of Assignment shall constitute a material breach of the
Contract. Failure to cure such breach within 60 calendar days of notice from the County shall constitute grounds
for termination of the Contract.
27. Errors and Omissions: All reports, files and other documents prepared and submitted by Contractor shall be
complete and shall be carefully checked by the professionals) identified by Contractor as project manager and
key personnel attached hereto, prior to submission to the County. Contractor agrees that County review is
discretionary and Contractor shall not assurne that the County will discover errors and/or omissions. If the
County discovers any errors or omissions prior to approving Contractor's reports, files and other written
documents,the reports, files or documents will be returned to Contractor for correction. Should the County or
others discover errors or omissions in the reports,files or other written documents submitted by Contractor after
County approval thereof, County approval of Contractor's reports, files or documents shall not be used as a
defense by Contractor in any action between the County and Contractor, and the reports,files or docu cents will
be returned to Contractor for correction.
File FOlder547018 16
Page 16 of 27
Attachment C
Signature Page
The Parties hereto have executed this Contract on the dates shown opposite their respective signatures below
TIME WARNER TELECOM HOLDINGS,INC.*:
DATE: j D r 2��t7(p Signature: &+ // t g)tv2..fGli—
Print Name: CT rtu rh Uohf-eP/'
Title: &RI-0val f('e5tz(en+- $y tr wt�t
DATE: l o ��.? 86 Signature:_ OF/✓rl IOw"rp
Print NarneA f h� 1 2
i
Title: C T t_� .1F„6p,94.64v"OL—
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• If the contracting party is a corporation, (2)two signatures are required as further set forth in this paragraph.
The first signature shall be: (a) the Chairman of the Board; b) the President; or c) any Vice President. The second
signature shall be a)the Secretary;or 2)any Assistant Secretary;or 3)the Chief Financial Officer; or d) any Assistant
Treasurer.
...........................................................................................
COUNTY OF ORANGE
A political subdivision of the State of California
By
Date It f t 4 L(p
Approved by Board of Supervisors on: (]lo
Approved as to form,County Counsel
County of Orange,California
By: �
Date: 2.t.-P - d
File Folder 547018 17
Page 17 of 27
Attachment C
ATTAcHmENT A
SCOPE OR WORK
WR)E AREA NETWORK TRANSPORT SERVICES
A. SERVICE LEVELS
Contractor shall provide transport services with high-availability and minimum downtime. Service Level Agreements
(SLAB) are a critical component of any transport service to assure that negotiated services levels ate contractually
adhered to by the Contractor. The County requires a minimum of 99.99% up time on all proposed circuits. The
Contractor will ensure that available bandwidth or throughput will not drop below 90%of declared circuit capacity at
any time on any proposed circuit. The Contractor will further produce reports to the County showing bandwidth
utilization and availability of throughput on an hourly,daily,weekly, monthly,and yearly basis. These reports will be
available on-line and allow for on-demand bandwidth reporting by County staff at any time. Scheduled impact to
transport services needs to be documented and sent to designated County contacts five(5) working days in advance.
The County must be notified within 30 minutes of any outages through a pre-defined County escalation plan. All
SLAB will be actively enforced by the County. Fee reductions specified in Attachment B may result from
Contractor's failure to notify County of planned and unplanned service interruptions, reduction in available circuit
capacity,delays in repair or any other disruption of service without regard to the County's actual monetary loss from
such disruptions.
B. SECURITY
The County Enterprise Network requires that Contractor provides detailed documentation outlining security
polices/procedures,'Best Practices",and technologies that are implemented in the proposed WAN Transport Service
offering to increase security and mitigate risk
C. NETWORK AND TRANSPORT MONITORING
Contractor shall provide a method for on-line monitoring by the County of all proposed circuits. The Contractor
should be able to provide reports on real-time and historical bandwidth utilization.All reports will include the ability
to show detail on an hourly, daily, weekly, monthly and yearly basis. Additionally, the Contractor may provide a
portal or secure web access for the County to monitor circuit up-time and outages.A secure Internet-accessible web
she is preferred for County access to Contractor transport statistics and information.
D. TRANSITION.TESTING AND ACCEPTANCE
All services must be in place no later than January 15,2007, The County will require the Data Center(1400 S.Grand
Ave.)and 301 The City Drive South,Orange,be operational by December 15,2006,to insure smooth integration with
existing County infrastructure. These dates may be change upon mutual agreement of the Parties. No payments to
the Contractor shall be made until the County has determined that a successful testing of each circuit and integration
with County network is operational.
Contractor will provide a comprehensive testing and acceptance plan for each site and each circuit type. At a
minimum the County expects these testing and acceptance criteria to include pre-acceptance uptine periods and
throughput validation methodologies.
E. ADDITIONAL CONTRACTOR REQUIREMENTS
1. Contractor shall provide full,24 hours by 7 days a week,support including telephone support(i.e.help desk)and
maintenance of communication links,if applicable.
2. Contractor will coordinate ordering, shipping and delivery of equipment and materials to any installation site, in
the event such materials are required.
18
File U&r54'1018
Page 18 of 27
Attachment C
3. Contractor will provide any necessary equipment to initiate new services at a given location.
4. County shall receive at minimum a one-year warranty on all new parts and equipment.
F. COUNTY TELECOMMUNICATIONS PROCEDURES
All telecommunication and data services projects in County facilities fall under the direct authority of the office of the
County Information Officer, Deputy CEO for County Executive Officeftnformation Technology(CEO/1T). No work
is to be performed at any County owned or occupied facility without direct authorization from County Project
Manager.Additionally,no consultation or engineering of any sort will occur directly between the Contractor and any
other County agency regarding any County facility without the involvement,coordination and pre-approval of County
Project Manager.
The County uses a Telephone Services Request (TSR) for all services requested from Contractor. The TSR will
indicate the installation address and the billing address,which may or may not be the same.
No work is to be performed at any County owned or occupied facility without a signed TSR from the County Project
Manager.Additionally,no consultation or engineering of any son will occur directly between the Contractor and any
agency regarding any County facility without the involvement, coordination, and written approval from County
Project Manager. Failure to comply with these instructions can lead to termination of the Contract. Additionally, if
the Contractor installs any transport circuits without a signed TSR from the County Project Manager at any County
facility, said performance will be deemed outside the scope of this Contract and the service shall not be compensated.
If Contractor is unsure of a course of action or whether to undertake any service including but not limited to
installation,repair, deletion,or termination of any transport circuit,prior to providing any service Contractor's Project
Manager shall notify, in writing, the County Project Manager for consultation and written approval or denial of the
work.
All services are to be coordinated using the outlined methods, and through the County designated Project Manager
only. The County Project Manager my provide a minimum of thirty(30)days notice for all requests to terminate or
delete any transport circuit. The only acceptable method to proceed with work is an authorized TSR. As part of this
Contract, direct technical contact procedures and access shall be established for 24 hour/7 day week operational
response by the Contractor.
The Telephone Service Request(TSR)process is as follows:
• The County Project Manager is responsible for processing and tracking the TSR and will be the single
point of contact for any service.
• The County Project Manager will notify the Contractor of a pending TSR.
• The Contractor will pick up the TSR from the County Project Manager and arrive at the job site on the
due date to perform the work The TSR can be faxed or e-mailed to the Contractor upon request.
• The Contractor will cover all the work to be done with the designated County contact and be prepared to
answer any questions.
• Upon arrival at the County location,the Contractor will be escorted to the work location and will perform
all the necessary work in a professional and workman like manner and notify the contact when work is
completed.
• The Contractor will explain all the work that was done and have the County depar[mentlagency contact
signoff on the TSR as completed.
• The Contractor will term the signed TSR and all ancillary documentation associated with the TSR to the
County Project Manager.
• The Contractor shall submit an invoice to County indicating labor and material used and referencing a
TSR and Contract number.The invoice will include a copy of the TSR with the signature of the County
contact that accepted the work performed. The Contractor will invoice the County within 60 days of the
accepted completion of the project.
File Folder 547018 19
Page 19 of 27
Attachment C
Contractor shall submit a list of all employees who will be directly performing tasks associated with this Contract to
the County Project Manager.Contractor employees may be subject to a background check performed by the County's
Sheriff Department and Probation Department, if required to obtain access at certain locations. Cost for any
background check will be the responsibility of the Contractor. l:changes occur to this list an updated list will be
submitted, in writing, by the Contractor, to the County Project Manager. At no time will unauthorized Contractor
employees perform any task associated with this Contract.If this occurs the Contractor will be notified that they have
not complied with the terms of this Contract and the Contract may be terminated.
File Folder547018 20
Page 20 of 27
Attachment C
ATTACHMENTS
COST/COMPENSATION FOR CONTRACTOR SERVICES
1. COMPENSATION
This is a fixed fee Contract between the County and Contractor for services provided in Attachment A, Scope of
Work in accordance with the pricing specified below.
2. INITIAL SERVICE PURCHASE
Contractor shall supply the following service:
Circuit Type From Address To Address Qty Total Total
Label Setup Monthly
Fiber-14 1 Gi E 1400 S.Grand Ave 301 The City Dr.South 1 $2,000 $SOW
Fiber-6 I 1 Gi E 1400 S.Grand Ave 1275 Berkley Ave 1 $2,000 MOW
Fiber-9 1 1 Gi E 1400 S.Grand Ave 840 Eckhoff 1 $2,000 $5,000
Fiber-2- I 1 Gi E 1400 S.Grand Ave 1770 N.Broadway 1 $2000 $5,000
Fiber-3 1 Gi E 1400 S.Grand Ave 1001 S.Grand Ave 1 $2,000 $5,000
Fiber-4 1 Gi E 1400 S.Grand Ave 4601 Jamboree Rd 1 $2,000 $5,000
Fiber-7 1 Gi E 1400 S.Grand Ave 1535 E.Orangewood 1 $2,000 $5,000
Fixed/Tiered 1400 S.Grand Ave $0 $5,000
EIS w/Gig <Gigabit Internet circuit>
Port
Total 1 $14,000 $40000
Note: *Additional County locations may be added and/or deleted to this schedule during the term of the Contract. The
Contract may be amended,as set forth in paragraph C,to add circuit locations.
Fee reduction for Contractor's failure to notify County of planned and unplanned service interruptions, reduction in
available circuit capacity,delays in repair or any other disruption of service,that result in an individual circuit not meeting
the 99.99%updme for any sequential thirty(30)day period:
Per Service Outage Percentage Credit
Less than 1 minute(9999%availability) No credit
1 minute up to 4 hours 5%of the MRC
4 hours up to 8 hours 10% of the MRC
8 hours up to 12 hours 15% of the MRC
12 hours up to 16 hours 20%of the MRC
16 hours up to 24 bours 35%of the MRC
24 hours or greater 50%of the MRC
3. PAYMENT TERMS
Initial Set-up: Invoices for initial set-up are to be submitted in arrears, unless otherwise directed in this Contract,
upon the satisfactory completion and acceptance of testing of the entire system. If service does not meet acceptance
specifications herein,Contractor assumes all costs and may not seek reimbursement from County.
Morality Service: Invoices for monthly services are payable monthly, in arrears, unless otherwise directed in this
Contract. Payment for monthly services,as specified in Attachment B,shall begin upon the date of acceptance of the
system
21
Filefbldv549018
Page 21 of 27
Attachment C
Contractor shall reference Contract number on invoice. Payment will be net 30 days after receipt of an invoice in a
format acceptable to the County of Orange and verified and approved by the agency/department and subject to routine
processing requirements. The responsibility for providing an acceptable invoice rests with the Contractor.
Incomplete or incorrect invoices are not acceptable and will be returned to the Contractor for correction.
Billing shall cover services and/or goods not previously invoiced. The Contractor shall reimburse the County of
Orange for any monies paid to the Contractor for goods or services not provided or when goods or services do not
meet the Contract requirements.
Payments made by the County shall not preclude the right of the County from thereafter disputing any items or
services involved or billed under this Contract and shall not be construed as acceptance of any part of the goods or
services.
4. PAYMENTANVOICING INSTRUCTIONS:The Contractor will provide an invoice on Contractor's letterhead for services
rendered.Each invoice will have a number and will include the following information:
1. Contractor's name and address
2. Contractor's remittance address(if different from 1 above)
3. Name of County agency department(if county agency is actual customer name)
4. County Contract number(to be added as part of the billing address)
S. Service clarets)
6. Circuit Label
7. Service description
S. Total
Invoices and support documentation are to be forwarded to:
County of Orange—CEOIIT
1501 E.Saint Andrew Place,Suite 200
Santa Ana,CA 92705
Attn:Accounts Payable
Cowry of Orange Sxuw m
RF 14MDOODOX 22 AttachmenrH
Page 22 of 27
Attachment C
ATCACHMENT C
STATFING PLAN
1. Prirnary Staff to perfornn contract duties
Name 02ssirlcatic,D/Deftrtation
Joe Wirthman City Operations Director
Lance Rubio Operations Manager
Rachael Preston Project Manager
Jose Cruz Central Office Engineer
Jan Van Graunin en Plant Manager
Scott Sanducci Network Technician II
Gerardo Issasi Network Technician II
2. Alternate Staff(for use only if primary staff are not available)
Name Classilleation/Designation
Richard Guard City Operations Director of LA
Myles Nanbu Vice President of Operations
Steven Sutter Network Technician III
Do gFaloon O ation Manager
Reggie Roberts Central Office En inear
Eart VanWe Plant Manager
Jose Centeno NetworkTeclntician III
Substitution or addition of Contractor's key personnel in any given category or classification shall be allowed
only with prior written approval of the County'a Project Manager.
File Folder347018 23
Page 23 of 27
Attachment C
EXHIBIT I
COUNTY OF ORANGE CHILD SUPPORT ENFORCEMENT
CERTIFICATION REQUIREMENTS
A. In the case of an individual Contractor,his/her name,date of birth, Social Security number,and residence address:
Name:
D.O.B:
Social Security No:
Residence Address:
B. In the case of a Contractor doing business in a form other than as an individual, the name, date of birth, Social
Security number, and residence address of each individual who owns an interest of 10 percent or more in the
contracting entity:
Name:
D.O.B:
Social Security No:
Residence Address:
Name:
D.OB:
Social Security No:
Residence Address:
(Additional sheets may be used if necessary)
C. A certification that the Contractor has fully complied with all applicable federal and state reporting requirements
regarding its employees;and
D. A certification that the Contractor has fully complied with all lawfully served Wage and Earnings Assignment
Orders and Notices of Assignment and will continue to so comply.
"I certify that is in full compliance with all applicable federal and state reporting
requirements regarding its employees and with all lawfully served Wage and Earnings Assignment Orders and
Notices of Assignments and will continue to be In compliance throughout the tern of Contract
with the County of Orange. I understand that failure to comply shall constitute a material
breach of the Contract and that failure to cure such breach within 10 calendar days of notice from the County
shall constitute grounds for termination of the Contract.
Authorized Signature Name Title
Fuc Wro 547018 24
Page 24 of 27
Attachment C
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ADMINISTRATION COMMITTEE Neeing Dare TOBA.Of Dir.
12/10/14 12/17/14
AGENDA REPORT Item Number Item Number
a
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director, Finance and Administrative Services
SUBJECT: COOPERATIVE PROCUREMENT WITH THE U.S. GENERAL
SERVICES AGREEMENT (GSA)
GENERAL MANAGER'S RECOMMENDATION
Authorize purchases of information technology computer, peripheral equipment and
services using the U.S. General Services Agreement (GSA) IT Schedule 70
commencing December 22, 2014 through December 31, 2019, for a total amount not to
exceed $500,000, in accordance with Ordinance OCSD-44, Section 2.03(B)
Cooperative Purchases.
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 desires to select the U.S. General Services Agreement (GSA) IT Schedule 70,
as a provider 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
The U.S. General Services Agreement IT Schedule 70 is the largest, most widely used
acquisition vehicle in the federal government. Schedule 70 is an indefinite
delivery/indefinite quantity (IDIQ) multiple award schedule, providing direct access to
products, services, and solutions from more than 5,000 certified industry partners. As
one of the leading national government purchasing cooperative, providing government
Page 1 of 2
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, school districts,
universities, etc.) that expend public funds for the acquisition of both 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
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the
complete agenda package:
• U.S. General Services Agreement (GSA) IT Schedule 70
Page 2 of 2
70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 1 of 18
® 70--General e Purpose Commercial Information Technology Equipment,
Software and Services
Solicitation Number: FCISJB-980001-B
Agency: General Services Administration
Office: Federal Acquisition Service(FAS)
Location:Center for IT Schedule Operations(QTFA)
Notice Type: Original Posted Date:
Combined Synopsis/Solicitation April 30,2014
Posted Date: Response Data:
April 30,2014 -
Original Response Date: Archiving Policy:
- Manual Archive
Original Archive Dale: Archive Date:
Original Set Aside:
N/A
Set Aside:
N/A
Classification Code:
70—General purpose information technology equipment
NAICS Code:
541 --Professional,Scientific,and Technical Services/541512--Computer Systems Design Services
Synopsis:
Added:Apr 30,2014 1:46 pm Modified: Dec 02,2014 2:30 pm Track Changes
No Description Provided
Solicitation 1
Type:Solicitation
Posted Date:April 30,2014
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htlo://sws.asa.aov/sws-search/viewSolDocument.do?
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Description:01 -Read Me First
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Description:02-Solicitation
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method=view&solNum=RkNJU iKQi05ODAwMDEtQ ==&solRefmsh=MzM=&solDoc=MDkwMDAOMmi4MmQ z wN
Description:03-SF1449
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70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 2 of 18
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http://sws.asa.aov/sws-search/viewSolDmument.do?
method=view&solNum=RkNJU iK i050DAwMDEt ==&solRefresh=MzM=&solDoc=MDkwMDAOMm14Mm z xMi
Description:04-Regulations Incorporated by Reference
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http://sws.asa.aov/sws-search/viewSolDmument.do?
method=view&solNum=RkNJU iK i050DAwMDEt ==&solRefresh=MzM=&solDoc=MDkwMDAOMm14MmJm )DUM
Description:05-Past Performance Evaluation
http://sws.asa.aov/sws-search/viewSolDocu ment.do?
method=view&solNum=RkNJU iK i05ODAwMDEt ==&solRefresh=MzM=&solDo�MDkwMDAOMml4Mm GVkN
Description:06-Small Business Sub Contracting Plan
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http://sws.asa.aov/sws-search/viewSolDmument.do?
method=view&solNum=RkNJU iK i05ODAwMDEt ==&solRefresh=MzM=&solDo�MDkwMDAOMm14Mm mFIZ/
Description: 07-Proposal Price List Preparation
........... ... ............................................................................................
hnv://sws.asa.00v/sws-search/viewSolDmument.do?
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Description:08-Commercial Sales Practice Format(CSP-1)
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method=view&solNum=RkNJU lK i05ODAwMDE1 ==&solRefresh=MzM=&solDoc=MDkwMDAOMmi4MmJm DIJO
Description:09-Agent Authorization Letter
.... ..._- .......... .....................................................................................
http://sws.asa.00v/sws-search/viewSolDmument.do?
method=view&solNum=RkNJU lK i05ODAwMDEt ==&solRefresh=MzM=&solDo�MDkwMDAOMmi4MmJm ITY10
Description: 10-Letter of Supply Template
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htto://sws.asa.aov/sws-search/viewSolDocu ment.do?
method=view&solNum=RkNJU iKQi05ODAwMDEt ==&solRefresh=MzM=&solDoc-MDkwMDAOMm14Mm GZ'N
Description: 11 -SCA Wage of Determinations Index
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method=view&solNum=RkNJU lKQi05ODAwMDEt ==&solRefresh=MzM=&solDoc-MDkWMDAOMml4Mm mJZF
Description: 12-Sample Labor Category Matrix
htty,//sws.asa.aov/sws-search/viewSolDmument.do?
method=view&solNum=RkNJU 1KQi050DAwMDEt ==&solRefresh=MzM=&so1Do�MDkwMDAOMml4Mm mRIV�
Description: 13-Critical Information Specific to Schedule 70
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http://sws.gs .gov/sws-search/viewSolDmument.do?
method=viewZi &solicitationNumber=RkNJU 1 KQi05ODAwMDEtQ ==&refreshNumber--MzM=&scheduleNumb r-MD
Description:All Files
Point of Contact(s):
Customer Service
IT ACQUISITION CENTER,2200 CRYSTAL DR..CP 4.ARLINGTON,VA 22202
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70--General Purpose Commercial Information Technology Equipment, Software and Serv...Page 3 of 18
ALL FILES
Solicitation 1 11
Apr 30,2014
01 -Read Me First
02-Solicitation
03-SF1449
04-Regulations Incom(
05-Past Performance E
06-Small Business Sul
07-Proposal Price List
08-Commercial Sales I
09-Agent Authorizatior
10-Letter of Supply Tei
11 -SCA Wage of Datei
12-Sample Labor Cate
13-Cdgcal Information
All Files
Opportunity History
• Original Synopsis
Combined SynopsislSolicitation
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11:45 am
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6:00 am
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10:00 am
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4:30 pm
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4:45 pm
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4:45 pm
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10:15 am
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12:15 pm
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1:45 pm
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2:30 pm
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4:15 pm
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12:15 pm
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2:00 pm
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8:45 am
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10:30 am
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11:45 am
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11:00 am
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Nov 06,2014
11:33 am
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Nov 06,2014
6:15 pm
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8:45 pm
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6:15 am
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1:30 pm
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6:15 pm
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6:45 am
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11:15 am
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12:45 pm
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1:45 pm
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11:30 am
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10'.15 am
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10:45 am
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11:30 am
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9:15 am
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5:33 pm
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7:45 am
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11:30 am
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2:30 pm
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4:15 pm
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4:18 pm
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5:00 pm
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9:30 am
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11:15 am
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9:15 am
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10:00 am
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11:00 am
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4:45 pm
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Dec 01,2014
4:48 pm
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Dec 01,2014
9:00 pm
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Dec 02,2014
10:15 am
• Award
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2:30 pm
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ADMINISTRATION COMMITTEE Neeing Dare TOBA.Of Dir.
JVJO114 12/17/14
AGENDA REPORT Item Number Item Number
s
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director, Finance and Administrative Services
SUBJECT: COOPERATIVE PROCUREMENT ON THE CITY OF RICHLAND
CONTRACT NO. 13-068
GENERAL MANAGER'S RECOMMENDATION
Authorize purchases of information technology consulting services using the City of
Richland, Washington cooperative agreement #13-068 with ShareSquared Inc.
Commencing January 5, 2015 through June 30, 2016, for a total amount not to exceed
$300,000, in accordance with Ordinance OCSD-44, Section 2.03(B) Cooperative
Purchases.
SUMMARY
In order to properly maintain and repair Orange County Sanitation District's (OCSD)
SharePoint site the Information Technology division has needs to purchase consulting
services. Such item requirements have been forecasted based upon projected project
demands as well as expected troubleshooting.
OCSD desires to select the cooperative agreement #13-068 as established by the City
of Richland, Washington as the lead agency, naming ShareSquared Inc. as the primary
provider of SharePoint professional and implementation of SharePoint-based Enterprise
Content Management (ECM) solutions based on contract pricing, breadth of service
offerings, availability and technical expertise.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
OCSD is upgrading the Microsoft SharePoint environment to the current version and
implementing the SharePoint records and document management solution. Consulting
services with an experienced implementer is required to upgrade and maintain the
software environment as well as consulting with the OCSD business units to establish
their records management framework.
Page 1 of 2
CEQA
N/A
BUDGET / PURCHASING ORDINANCE COMPLIANCE
This request complies with authority levels of the Sanitation District's Purchasing
Ordinance Compliance. The items purchased through the process are budgeted in the
yearly Joint Operating Budget.
ATTACHMENT
The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the
complete agenda package:
Cooperative Agreement between City of Richland and ShareSquared, Inc.
Page 2 of 2
Return b Mende Report
Contract No. 13-068
Riehlantl
AGREEMENT BETWEEN CITY AND CONSULTANT
THIS AGREEMENT,entered into this 2nd day of October, 2013 ("Effective Date") by and
between the City of Richland,505 Swift Aye., Richland,Washington,(hereinafter referred to as the
"City), and ShareSquared. Inc., 2155 Verdugo Bhd #33, Montrose, CA91020 (hereinafter
referred to as the"Consultant).
WITNESSEfH:
1) SCOPE OF WORK
a) The Consultant shall fumish sermcesand products as designated in this Agreement and
E)hibits hereto, all of which are hereby incorporated by reference. The Consultant shall
proHde professional and implementation services for a SharePoint-based Enterprise
Content Management(ECK solution,
b) The following eldlibit(s)are attached hereto and made a part of this Agreement:
() Exhibit A Detailed Scope of Work
(i) Fxhibit B:RFP 13-33 Proposal response submitted by ShareSquared, Inc.. dated
August23, 2013
c) This Agreementoonsists of this Agreement,the above referenced ExIiibits and other
documents listed below. These form the entire Agreement and all areas fulty apart of the
Agreement as if attached to this Agreement orrepeated herein. In the event of a conflict
between documents the order of precedence will be the order listed below. An
enumeration of the Agreement documents is set forth below:
(i) City of Richland Agreement No. 13-068
(i) EtdtibitA Detailed Scope of Work
(iii) E1dlibit B:RFP 13-33 proposal response submitted by ShareSqu ared, Inc.
dated August 23, 2013
(iy City Richland RFP 13-33
2) GENERAL REQUIREMENTS
a) The Consultant shall attend status, progress, and coordination meetings with the
designated Cityof Richland project team. If additional meetings are requested,the Citywill
proddethe Consultant sufficient notice prior to those meetings requiring Consultant
participation.
RevWV 2a13 Page 1 of 13
Contract No. 13-068
b) The Consultants hall prepare a monthlyprogress report if requested,in a form approved by
the City,that will outline in written and graphical form the various phases and the order of
performance of the work in sufficient details so that the progress of the work can easily be
evaluated.
3) TIME FOR BEGINNING AND COMPLETION
The Consultant shall not begin anywork under the terms of this Agreement until authored
in writing bythe City.Cons ullant agrees to use best efforts to complete all work described
under this Agreement by W rch 31,2014.
4) PAYMENT
a) The City shall pay the Consultant an amount not to exceed three hundred forty-five
thousand nine hundred seventyseven dollars($345,977)to complete the services detailed
under this Agreement and accompanying Exhibits. Payment shall be made on a"time and
materials"basis. Payment as idertifed in this section shall be full compensation for all
services rendered and forall labor, products,travel and incidentals necessaryto complete
the work specified herein.
b) Invoices not in dispute bythe Cilywi l l be paid net thirty(30)days and shall referencethe
contract number and/or purchase order applicable to the work.The invoice shall provide
sufficient detail on the work being billed and include detailed receipts for any invoices.
c) Invoices will be submitted on a biweekly basis and shall be payable for all work
completed to date.
d) Pre-approved travel, meals and lodging will be reimbursed at cost and onlywhen
consultant travels at least 50 miles per one waytrip.Reimbursable expenses are limited to
the following: coach airfare, ground transportation (tab, shuttle, car rental), hotel
accommodations at the government rate,personal or company vehicle use at the then-
current federal mileage rate,and meals at the current federal per-diem meal allowance or
up to the currentfederal per-diem with detailed receipts,no alcohol,and a 20% maxmum
gratuity.
e) Reimbursement for reproduction services,phone, postage, andothersimilar expenses is
not authorised under this Agreement.
f) The Consultant will allow access to the City,the State of Washington,the Federal Grantor
Agency,the Comptroller General of the United States, or any of their duly authorized
representatives to any books,documents, papers,and records which are directly pertinent
to the specific contract forthe purpose of making audit, examination, excerpts, and
transcriptions. Unless otherwise provided,said records must be retained for three years
from the date of receipt of final payment. If any l itigation,claim, or audit arising out of, in
connection with,or relating to this contract is initiated before the expiration of the three-year
period,the records shall be retained until such litigation, claim, or audit involving the
records is completed.
Rev0427-2013 Page 2 of 13
Return b Mende Report
Contract No. 13-068
5) INDEPENDENT CONTRACTOR
The Consultant, and any and all employees of the Consultant or otherpersons engaged in the
performance of anywork orservices required of the Consultant under this Agreement, are
independent contractors and shall not be considered employees of the City. Anyandallclaims
that arise at anytime underany Workers'Compensation Acton behalf of said employees or
other persons while so engaged, and any and all claims made by third parry as a
consequence of any actor omission on the part of the Consultant's employees orolher
persons engaged in anyof the work orservices required to be provided herein, shall bathe
sole obligation and responsibility of the Consultant.
6) OWNERSHIP OF DOCUMENTS
Al designs,drawings, specifications,documents,reports and other work products prepared
pursuant to this Agreement, will become the property of the City upon payment to the
Consultant of the fees asset forth in this Agreement. The City acknowledges the Consultant's
plans and specifications,including all documents on electronic media, as instruments of
professional services.The plans and specifications prepared under this Agreement shall
become the property of the City upon completion of the services and payment in full of all
payment due to the Consultant. The City may make orpernit to be made any modifications to
the plans and specifications without the priorwritten authorization of the Consultant.The City
agrees to waive any claim against the Consultant arising from any unauthorized reuse of the
plans and specifications,and to indemn'dyand hold the Consultant harmless from anyclaim,
I iabilityor costa rising or allegedly arising out of any reuse of the plans and specifications bythe
Cityor its agent not authorized by the Consultant.
7) TERMINATION
a) This Agreement maybe terminated byeither party upon thirty(30)days' written notice. In
the event the City terminates this Agreement, the City shall pay the Consultant for the
hourly s ervices performed and any approved product purchases made on behalf of the City
up until such termination becomes effective.
b) The work underthis Agreement may be suspended upon written notice. If anywork
covered bythis Agreement shall be suspended or abandoned bythe Citybefore the
Consultant has completed the assig ned work the City s hall pay the Consultant for the
hourlyseroces performed and anyapproved product purchases made on behalfof theCity
up until such suspension or abandonment becomes effective.
8) DISPUTE RESOLUTION
a) The City and the Consultant agree to negotiate in good faith for a period of thirty(30)days
from the date of notice of all disputes between them prior to exercising their rights under
this Agreement, or under law.
Page 3 of 13
R ev 0929-2013
Contract No. 13-068
b) All disputes between the City and the Consultant not resolved by negotiation betweenthe
parties maybe arbitrated onlybymutual agreement ufthe Cityand the Consultant. Ifnot
m utualy agreed to resole the claim by arbitration,the claim will reached by legal action.
9) DEBARMENT CERTIFICATION
The Cc nsuttantcertifies that neitherthe Consultant nor its principals are presently debarred,
suspended, proposed for debarment, declared ineligible, or voluntarilyewAuded from
participating in this Contract by any Federal or State department or agency. Further,the
Consultant agrees not to enterinto any arrangements or contracts related to completion of the
work contemplated under this Agreementwith anyparlythat is on the "General Service
Administration List of Parties Excluded from Federal Procurement or Non-procurement
Programs"which can be found at:
www.sam.covand
http:/Awww ini wa covdTradesLicensing/PrevWage/AwardingAgencies/defaultasp
10) VENUE APPLICABLE LAW AND PERSONAL JURISDICTION
In the eventthat eitherpartydeems itnecessaryto initiate a legal action to enforce any right or
obligation underthis Agreement,the parties agreethat anysuch action shall be initiated in the
Superior Court of the State of Washington situated in Benton County.The parties agree that all
questions shall be resolved byapplication of Washington law, and that the parties to such
action shall have the right of appeal from such decision of the Superior Court in accordance
with the laws of the State of Washington. The Consultant hereby consents to the personal
jurisdiction of the Superior Court of the State of Washington situated in Benton County.
11) ATTORNEYS FEES
The parties agree that should legal action be necessary to enforce any of the provisions of
this Agreement,that the prevailing partywill be awarded its reasonable attorneys fees and
costs in action, including costs and attorneys fees on appeal if appeal is taken.
12) INSURANCE
The Consultantshall procure and maintain for the duration of the Agreement insurance
against claims for injuries to persons ordamage to propertywhich mayarise from or in
connection with the performance of the work hereunder by the Consultant, its agents,
representatives, or employees.
a) No Limitation.Consuhanfs maintenance of insurance as required bythis Agreement
shall not beconstrued to Iimdthe liabilityof the Consultant to the coverage provided by
such insurance, or otherwise limit the Citys recourse to any remedy ava i lable at law or
in equity.
b) Minimum Scooeof Insurance.Consuhantshall obtain insurance of the types described
below:
R"0a7-2013 Page 4 of 13
Return to Agenda Reporl
Contract No. 13-068
1. Automobile Liability insurance covering all owned.non-owned,hired and leased
vehicles.Coverage shall be written on Insurance Services Office (ISO)form CA
0001 or substitute form providing equivalent liability coverage. If necessary,
the policyshall be endorsed to provide contractual liability coverage.
2. Commercial General Liability insurance shall bewritten on ISO occurrence form
CG 00 01 ora substitute form providing equivalent coverage and shall cover
I iability arising from premises,operations,independent contractors and personal
injuryand advertising injury.The City shall be named as an insured under the
Consultant's Commercial General Liability insurance policywith respect to the
work performed for the City.
3. Workers'Comoensation coverage as required by the Industrial Insurance laws of
the State of Washington.
4. Professional Liability insurance appropriate to the Consultant's profession.
c) Mnimum Amounts of Insurance.Consultant shall maintain the following insurance limits:
1. Automobile Liabildv insurancewith a minimum combined single limit for bodily
injury and property da m age of$1,000,000 per accident.
2. Commercial General Liability insurances hall bewritten with limits no less than
$1,000,000 each occurrence, $2,000,000 general aggregate.
3. Professional Liability insurance shall be written with limits no less than
$1,000,000 per claim and $1,000,000 poliryaggregate limit.
d) Olherinsurance Provisions. The Consultant's insurance coverage shall be primary
insurance with respect to the City.Any insurance, self-insurance, or insurance pool
coverage maintained bythe City s hal l be excess of the Consultant's insurance and shall
not contribute with it.
e) Acceptabilityof Insurers. Insuranceislo be placed with insurers with a currentAM best
rating of not less than AMI.
f) Verification ofCoverape.Consultant shall furnish the Citywith original certificates and
copyofthe amendatory endorsements evidencing the insurance requirements ofthe
Consultant before co mmencement of the work including, but not necessarily limited,to
the additional insured endorsement.
g) Notice of Cancellation.The Consultant shall provide the City with written notice of any
policy cancellation within two (2)business days of Cons ulta nt's receipt of such notice.
Page 5 of 13
Rev09-2]-2013
Contract No. 13-068
h) Failure to Maintain Insurance. Failure on the part of the Consultant to maintain the
insurance as required shall constitute a material breach ofcontract,upon which the City
may,aftergiving five(5)business days'notice to the Consultant to correct the breach,
im mediatelytenm inate the contract or,at its discretion,procure or renew such insurance
and payanyand all premiums in connection therewith,with anysums so expanded to be
repaid to the Cityon demand,or at the sole discretion of the City, offset against funds
due the Consultant from the City.
13) INDEMNIRCATION IHOLD HARMLESS
a) Consultant shall defend,indemnify,and hold the City, its officers, officials, employees
and volunteers harmless from anyand all claims, injuries, damages, losses or suits
including attomeyfees,arising out of or resullingfrom the acts, errors or omissions of
the Consultant or the Consultant's employees or agents in performance of this
Agreement,except for injuries and damages caused bythe sole negligence of the City.
b) Should a courtof competent jurisdiction determine that this Agreement is subject to
RCW 4.24.115,then,in the event of liability for damages arising out of bodily injury to
persons or damages to propertycaused byor resulting from the concurrent negligence
of the Consultant and the City, its officers, officials, employees, and volunteers,the
Consultant's liability,including the dutyand costto defend,shall be only to the extent of
the Consultant's negligence. It is further specifically and expressly understood that the
indemnification provided herein constitutes the Cons ultanfs waiver of immunity under
Industrial Insurance,Title 51 RCW,solelyfor the purposes of this indemnification. This
waiver has been mutually negotiated bythe parties.The provisions of this section shall
survive the expiration or term ination of this Agreement.
14) STANDARD OF CARE
The professional services will be furnished in accordance with the care and skill ordinarily
used by members of the same profession practicing under similar conditions at the same
time and in the same locality.
15) SUCCESSORS OR ASSIGNS
All of the terms, conditions and provisions hereof shall inure to the benefit of and be binding
upon the parties hereto,and their respective successors and assigns; provided, however,
that no assignment of the Agreement shall be made without written consent of the parties to
the Agreement.
16) EQUAL OPPORTUNITY AGREEMENT
Consultant shall not discriminate against any employee orjob applicants for work under this
Agreement for reasons of race, sex nationality, religious creed, or sexual orientation.
17) PARTIAL INVALIDITY
Any provision of this Agreement which is found to be invalid or unenforceable shall be
ineffective to the extent of such invalidity or unenforceability, and the invalidity or
unenforceabililyof such provision shall not afkctthevalidityorenforceabililyof the remaining
provisions hereof.
Rev09-27-2013 Page 6 of 13
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Contract No. 13-068
18) AMENDMENT CLAUSE
All amendments must be in writing and be approved and signed bybolh parties.
19) CHANGE IN LAW
The parties hereto agree that in the event that legislation is enacted or regulations are
promulgated,or a decision of court is rendered, or any interpretive policy or opinion of any
govemmental agency charged with the enforcement of any such law or regulation is
published that affects or may affect the legality of this Agreement or any part thereof or
materialyand adverselyaffects the ability of either parlyto perform its obligations orreceive
the benefits intended hereunder("Adverse Change in Law),then within fourteen (14) days
fol lowing written notice byeither parlyto the other party of such adverse change in law,the
parties shall meet to negotiate in good faith an amendment which will carry out the original
intention of the parties to the event possible in I ight of the adverse change in law.If,despite
good faith attempts,the parties cannot reach agreement upon an amendment within s ivy
(60)days after commencing negotiation,then this Agreement maybe terminated byeither
party as of the earlier of: (i)the effective date of the adverse change in law, or(ii)the
e)piration of period of sivy(60)days following written notice of termination provided by
one paryto the other.
20) CONFIDENTIALITY
In the course of performing under this Agreement, Consultant, including its employees,
agents or representatives,may receive,be a)posed to,or acquire confidential information.
Confidential information may include, but is not limited to, patient information,contract
terms,sensitive employee information,or proprietarydata in anyform,whetherwritten,oral,
or contained in anycomputer database or computer readable form.Consultant shall: t)not
disclose confidential information exept as permitted bythis Agreement; (it)only permit use
of such confidential information byemployees,agents and representatives having a need to
know in connection with performance under this Agreement; and (III) advise each of its
employees, agents, and representatives of their obligations to keep such information
confidential.
Confidential Information shall not include information or materials that (i)were generally
known to the public as of the effective date of this Agreement;or(ii) become generally
known to the public after the effective date of this Agreement byresultofan act oromission
other than an act or omission of Consultant:or(iii)were rightfully known to Consultant prior
to disclosure by Customer; or (iy are or were disclosed by Customer to a third party
generalywithout restriction on disclosure;or(y the Consultant lawfullyreceived from a third
parry without that third partys breach of agreement or obligation of trust; or (4) are
independently developed by Consultant.
21) CHANGES OFWORK
a) When required to do so,and without anyaddifionalcompensalion, the Consultant shall
m a ke such changes and revisions in the completed work of this Agreement as necessary
to correct or revise any significant errors,omissions of items asspecified in the e>dhibits
Page 7 of 13
Rev09-27-2013
Contract No. 13-068
hereto,or other appreciable deficiencies in the design,drawings, specifications, reports,
and other similar documents or work product which the Consultant is responsible for
preparing or furnishing under this Agreement Forpurposesofdarity,sigrrficantemors and
appreciable deficiencies are defined herein to mean errors ordefciencies that if allowed to
remain,undermine the effected use or functionalityof the SharePoint-based Enterprise
Content Management(ECM1 solution prodded bythe Consultant,or otherwise adversely
affect the essential purpose of this agreement.
b) Should the Cityfrnd it desirable for its own purposes to have previously s atisfactorily
corn pleted work or parts thereof changed or revised, the Consultant shall make such
revisions as directed bythe City.This works hall be considered as E)dra Work and will
be paid for as herein provided under Section 22. E)dra Work.
22) EXTRA WORK
The Citymay desire to have the Consultant perform work or render additional services within
the general scope of this Agreement.Such work shall be considered as E#ra Work and will be
specified in a written supplement to this Ag reemenl which will setforth the nature ofthe scope,
schedule for additional work,additional fees and the method of payment.Work under a
supplemental Agreement shall not proceed until authorized in writing bythe City.
23) INTER-LOCAL AGREEMENT
It is theintentof this Agreement to make available workof similar nature and scope to other
local government entities of the Slate of Washington,orany other state as long as individual
statelawallows entitiesto enlerintoan Inter-local agreement,bymutual agreementwith the
successful bidder and properlyauthorized inter-local purchasing agreements as provided for by
RC W 39.34,which details the right to purchase the same equipment,product or service at the
prices quoted and for the period of the contract,in addition to orders from the City of Richland.
The Cityof Richland does not accept anyresponsibility for purchase orders issued by other
public agencies.
Rev OB-27-2or3 Page 8 of 13
Return to Agenda Reporl
Contract No. 13-068
IN WITNESS WHEREOF,the parties hereto have a)ecuted th is Agreement as of the dayand year
firstabo%e written.
CITY OF RICHLAND, WASHINGTON CONSULTANT� D
1�
CYNTFtWp-. JOHN ON Signature
City Mat ger
Damd Krualov/Mananina Director
Printed Name &Title
ATTEST: /J
-la'blc. C�b✓�iCvt✓y ShareSauared Inc.
�r NMCIA HOPKINS
City Clerk
2155 Verdugo BIW.#33
Montrose CA 91020
APPROVED AS TO FORM: Address
`1^ Ion K ' Phone: 800.445.1279 A00
HEATHER D. KINTZLEY Email: DavW&ShareSauared com
City Attomey
R.v O9-27-2013 Page 9 of 13
Contract No. 13-068
B(HIBIT A: Detailed Scope of Work
The purpose ofthis Scope of Work is to have ShareSquared, Inc. perform the following
professional services and deliverthe specified products.
I. Establish City of Richland Enterprise SharePoint2013 Deployment Plan
1. Promde tech nical leadership and expertise in establishing the Enterprise SharePoint
2013 Deployment Plan and overall system architecture for a fleuble, scalable ECM
solution.
2. Promde an Information, Logical, and Physical Architecture Plan and recommendation
that addresses SharePoint govemance and'taxonomyas well as an overarching
SharePoint 2013 Deployment Plan.
3. Provide a detailed breakdown of all labor costs associated with installing,configuring,
and deploying a test and production Enterprise SharePoint2013 environmentas
presaibed in the Deployment Plan documentation.
4. Provide a detailed breakdown of time,materials,and all costs associated with
implementing the followi ng third party software in the Cityof Rich land's SharePoi nt
environment:
• Collabware CLM Standard Edition
• KnowledgeLake Imaging,Unify,Capture,and Connect for SharePoint
• Arx Cosign Connector for SharePoint
5. Remew the current ECM solution and provide recommendation and cost estimates to
migrate Enterprise content to Share Point enHronment. If additional software and/or
hardware are needed to accomplish content m igration,ShareSquared, Inc.will supply
applicable details.
II.SharePoint Implementation
1. Design,install,setup,configure,and document Enterprise SharePoint2013
infrastructure in accordance with Mcros oft best practices.
2. Work with the Cityof Richland to design and implement a backup and recoverystrategy.
3. Monitor and troubleshoot hardware/software installation in conjunction with Cityof
Richland Information Technology(IT)staff.
4. Provide detailed documentation of installation and configuration.
Rev0427-2073 Page 10 of 13
Rd,,.l A tl R d
Contract No. 13-068
5. Execute testing and validation of Enterprise SharePoint2013 deployment and resolution
of all identified risks and issues prior to system launch date.
6. Upon completion of SharePointimplenrentation,acceptance criteria will be reviewed by
the City of Richland IT staff and ShareSquared, Inc.to ensure that all project
requirements have been met,all deliverables are operational and working as elpected
per deployment plan,and support is transitioned and accepted byCityof Richland IT
staff.
III.Third Party Product Integration with SharePoint
1. Work with City of Richland IT staff to install and configure Collabware CLM in the
SharePoint environmem according to vendorbest practices and recommendations.
Configure test and production environments and run pilot to ensuretesting and quality
assurance is performed to identity rislrs,software bugs,and any system shodcomings
prior to going live. If additional software a ndlor hardware are needed to fu Ily i m plement
solution,ShareSquared,Inc.will supply applicable details.
2. Workwith City of Richland IT staff to install and configure Knowledgelake Imaging,
Unify, Capture,and Connect in the SharePoint environment according to vendor best
practices and recommendations. Configuretest and production environments and run
pilot to ensure testing and quality assurance is performed to iden*risks,software
bugs,and anysystem shortcomings prior to going live. If additional software and/or
hardware are needed to fullyimplementsolution,ShareSquared,Inc.will supply
applicable details.
3. Workwith City of Richland IT staff to install and configure Arx CoSign in the SharePoint
environment according to vendor best practices and recommendations. Configuretest
and production environments and run pilot to ensure testing and quality assurance is
performed to identify risks,software bugs,and any system shortcomings prior to going
live. If additional s oflware and/or hardware are needed to fully implement solution,
ShareSquared, Inc.will supply applicable details.
IV. Project Support and Training
1. Develop overarching project plan that can be used tofu l ly im plement the SharePoint
2013 platform according to the City of Richland's business requirements. Thisproject
plan must include the third party product integration with a list of prioritized tasks,
required human, physical,and financial resources,and projected scheduleltimeline.
Page 11 of 13
Rev Og-27-2013
Contract No. 13-068
2. Recommend and educate City of Richland IT staff in SharePoint development and
configuration tasks,as well as integration with the above-stated 3"party products. This
work can be done via onsite vis its or remote assistance,as agreed upon by both parties.
a. During the project duration,provide Cityof Richland IT staff with best practice
reviews and recommendations.
V. Initial Phase—Schedule of Deliverables
1. ShareSquared,Inc.s hall,byJanuary 31,2014,the SharePoint 2013 platform will be fully
im plemented including the third party product integrations with Collabware,
Knowledge Lake,and Cosign in the production environment provided however that there
are no project delays attributable to the City.
2. ShareSquared,Inc.shall byNlarch 1, 2014,complete all activities in this scope of work;
deliver to the Cityof Richland all project planning and implementation documents,
education and training,as well as a II appropriate knowledge transfer to fu I lys u pport the
SharePoint environment provided however that there are no project delays attributable
to the City.
Vl. Payment Schedule
1. The City of Richland will make progress payments as setforth in section4)c)to
ShareSquared, Inc.upon acceptance of the work by owner as outlined below and as set
forth in Exhibit A:Scope of Work. No products shall be ordered and/or delivered
without written approval of the City.
Date Description Amount
11/15/13 Phase Completion—Discovery, Requirements Elicitation and $81,850
the Development and Delfveryof the SharePoint Governance
Plan Template
12/02/13 Phase 2 Procurement—Metaogixsoftware for Content $10,000
Mgration
12/02113 Phase 3 Procurement—Software and Licensing for the PILOT $109,920
Implementation of Collabware CLM and Knowledgel-ake
Imaging, Uni ,Ca lure,and Connectfor SharePoint
12/31/13 Phase 2 Completion—Content Mgration Professional Services $7.000
01/31/14 Phase 3 Procurement -Software and Licensing for the $118,595
Remaining Production Implementation of Collabware CLMand
KnowledgeLake Imaging,Unify,Capture,and Connect for
SharePoint
02/07/14 Phase 4 Procurement —ArxCosign Connectorfor SharePoint $17,112
software and licensing
0228/14 Phase 4 Completion—Digital Signature Professional Services $1,500
RmW27-2013 Page 12 of 13
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Contract No. 13-066
and Training
EXHIBIT B: RFP 13-33 proposal response submitted by Shared Squared, Inc.. dated
August23, 2013
RevM27-2013 Page 13 of 13
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CERTIFICATE HOLDER CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE UPMMMDATETNEREOF,NOTICEWILLBECE VEREDIN
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City Of RkHand,WaeNlglOn ANTNOROFD REPRESENTATIVE
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AFRO CERTIFICATE OF LIABILITY INSURANCE 1 10)01/13
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THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTfTUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER,AND THE CERTIFICATE HOLDER.
IMPORTANT: If the cedificate holder is an ADDITIONAL INSURED,the pdicy(les) must be endorsed. If SUBROGATION IS WAIVED,subject to
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COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:
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INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE NAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS
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no City of Richland Nahington is added as additional insured on the
General Liability coverage as respects their contract with the insured.
CERTIFICATE HOLDER CANCELLATION
CITYRI3
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
City of Richland,Washington WE CCOOPANCEEN DAM THERE",WITH WE OLICY PROVISIONS.
WILL BE DELIVERED IN
505 Swift Boulevard
Richland,WA 99352 AGrxoe¢ep�o7 RRE>EPR�EESENTATWE n ,
01988-2010 ACORD CORPORATION. All rights reserved.
ACORD 25(201 DI05) The ACORD name and logo are registered marks of ACORD
ADMINISTRATION COMMITTEE Neetlng Dare TOBA.Of Dir.
12/10/14 12/17/14
AGENDA REPORT Item Number Item Number
6
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
A. Adopt Resolution No. OCSD 14-XX entitled; "A Resolution of the Orange County
Sanitation District authorizing the execution and delivery by the District of an
Installment Purchase Agreement, a Trust Agreement, an Escrow Agreement and a
Continuing Disclosure Agreement in connection with the execution and delivery of
Orange County Sanitation District Wastewater Refunding Revenue Obligations,
Series 2015A, authorizing the execution and delivery of such Revenue Obligations
evidencing principal in an aggregate amount of not to exceed $150,000,000,
approving a Notice of Intention to Sell, authorizing the distribution of an Official
Notice Inviting Bids and an Official Statement in connection with the offering and
sale of such Revenue Obligations and authorizing the execution of necessary
documents and related actions;" and,
B. That the Orange County Sanitation District Financing Corporation approve the
documents supporting and authorizing the Revenue Obligations in an aggregate
amount not to exceed $150,000,000
SUMMARY
On December 20, 2007, the Sanitation District issued $300,000,000 of Certificates of
Participation, Series 2007B (2007B COPS) to finance certain improvements to the
Wastewater System. The 2007B COPS are fixed rate obligations. On August 7, 2014,
the Sanitation District issued $85,090,000 of Wastewater Refunding Revenue
Obligations, Series 2014A to refund a portion ($93,930,000 of maturities 2018 through
2027) of the 2007B COPS. With the recent drop in interest rates, the longer maturities of
the 2007B COPS can be refunded and provide attractive savings to the Sanitation District.
The outstanding amount of COP Series 2007E is currently $173,325,000 million of which
$152,990,000 are subject to optional redemption prior to maturity.
In November 2014, the Administration Committee and the Board authorized the General
Manager to pursue a fixed rate refunding of the remaining callable 2007E COPs.
Approval of the recommended actions and the associated legal documents will enable
staff to complete the refunding process.
PRIOR COMMITTEE/BOARD ACTIONS
Page 1 of 4
November 19, 2014: Authorize the General Manager to issue new fixed rate Certificates
of Participation (COP), to be referred to as Wastewater Refunding
Revenue Obligations, in an amount sufficient to refund up to
$152,990,000 of COP Series 2007B.
September 24, 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.
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 Amount ) Mode
Series 2014B CANS(4) $ 120,850,000 Fixed Rate(two-year)
Series 2014A Refunding(7) 85,090,000 Fixed Rate
Series 2012B Refunding() 66,395,000 Fixed Rate
Series 2012A Refunding(3) 100,645,000 Fixed Rate
Series 2011A Refunding()(3) 121,290,000 Fixed Rate
Series 2010C(e) 157,000,000 Fixed Rate
Series 2010A(5) 80,000,000 Fixed Rate
Series 2009A Refunding(3) 184,090,000 Fixed Rate
Series 2008B Refunding(6) 17,315,000 Fixed Rate
Series 200713(5) 173,325,000 Fixed Rate
Series 2007A Refunding(3) 92,385,000 Fixed Rate
Total : $1,198,385,000
(1) As of December 1,2014
(2) Refunded a portion of Sense 20M
(3) Refunded a portion of Sense 2003
(4) Sense 2014B are fixed two-year certificate of anticipation notes (CANS), that refunded the
Sense 2013A CANS (one-year), that refunded the Senes 2012C CANS, that refunded the
Senes 2011B CANS,that refunded the 2010B CANS, that refunded the Series 2009E CANS,
Page 2 of 4
that refunded the 20MC 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) Series 2008E 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"B"COPa.
(7) Refunded a portion of Series 20078
Legal Authorization and Approvals
The Board of Directors and the Financing Corporation will each be required to adopt
separate Resolutions to complete this refunding. A Financing Corporation is required by
the structure of the Revenue Obligations and was formed in April 2000 solely to satisfy
this need. The Board of Directors of the Corporation is the same as the Board of
Directors of the Sanitation District and the Corporation meets after an adjournment of the
OCSD Board.
The OCSD Resolution authorizes the execution and delivery of certain legal documents
and the execution and delivery of Wastewater Refunding Revenue Obligations, Series
2015A, evidencing principal in an aggregate amount of not to exceed $150,000,000 all as
spelled out in the title as follows:
"A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY
SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE
DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT,
AN ESCROW AGREEMENT AND A CONTINUING DISCLOSURE AGREEMENT IN
CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY
SANITATION DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS,
SERIES 2015A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH
REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT
OF NOT TO EXCEED $150,000,000, APPROVING A NOTICE OF INTENTION TO
SELL, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL NOTICE INVITING BIDS
AND AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE
OF SUCH REVENUE OBLIGATIONS AND AUTHORIZING THE EXECUTION OF
NECESSARY DOCUMENTS AND RELATED ACTIONS."
The Resolution of the Corporation is somewhat shorter and simpler. It authorizes three
actions that are similarly enumerated in the title as follows:
"A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY
SANITATION DISTRICT FINANCING CORPORATION AUTHORIZING THE
EXECUTION AND DELIVERY BY THE CORPORATION OF AN INSTALLMENT
PURCHASE AGREEMENT AND A TRUST AGREEMENT IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT
WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES
2015A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH REVENUE
OBLIGATIONS EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO
EXCEED $150,000,000 AND AUTHORIZING THE EXECUTION OF NECESSARY
DOCUMENTS AND RELATED ACTIONS."
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 Public Resources Advisory
Group, serving as Financial Advisor, and Fulbright & Jaworski, serving as Special
Counsel and Disclosure Counsel, will be paid from the proceeds of the new refunding
issue.
CEQA
N/A
BUDGET/PURCHASING ORDINANCE COMPLIANCE
N/A
ATTACHMENTS
The following attachment(s) are available in hard copy and may also be viewed on-line at the OCSD
website(www.ocsd.coml with the complete agenda package:
• Draft District Resolution OCSD 14-XX
• Draft Corporation Resolution FC-XX
• Draft Trust Agreement
• Draft Installment Purchase Agreement
• Draft Escrow Agreement
• Draft Continuing Disclosure Agreement
• Draft Preliminary Official Statement
• Draft Official Notice Inviting Bids
• Draft Notice of Intention to Sell
Page 4 of 4
Return to Mende Report
DRAFT OF
12/01/14
RESOLUTION NO. OCSD 14-XX
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE
COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION
AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE
AGREEMENT, A TRUST AGREEMENT, AN ESCROW AGREEMENT,
AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION
WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY
SANITATION DISTRICT WASTEWATER REFUNDING REVENUE
OBLIGATIONS, SERIES 2015A, AUTHORIZING THE EXECUTION AND
DELIVERY OF SUCH REVENUE OBLIGATIONS EVIDENCING
PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED
$150,000,000, APPROVING A NOTICE OF INTENTION TO SELL,
AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL NOTICE
INVITING BIDS AND AN OFFICIAL STATEMENT IN CONNECTION
WITH THE OFFERING AND SALE OF SUCH REVENUE OBLIGATIONS
AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS
AND RELATED ACTIONS
WHEREAS, to refinance the acquisition, construction and installation of certain
improvements to its wastewater system (the "Prior Project"), the Orange County
Sanitation District (the "District") has heretofore purchased the Prior Project from the
Orange County Sanitation District Financing Corporation (the "Corporation"), and the
Corporation has heretofore sold the Prior Project to the District, for the installment
payments (the "Prior Installment Payments") made by the District pursuant to the
Installment Purchase Agreement, dated as of August 1, 2000 (the "Prior Installment
Purchase Agreement"), each by and between the District and the Corporation;
WHEREAS, to provide the funds necessary to finance the Prior Project, the
District caused the execution and delivery of the Orange County Sanitation District
Certificates of Participation, Series 2007B (the "Prior Certificates"), evidencing direct,
undivided fractional interests in the Prior Installment Payments;
WHEREAS, the District desires to refinance a portion of the Prior Project by
paying and prepaying the remaining Prior Installment Payments, and the interest
thereon to the date of prepayment, thereby causing all or a portion of the remaining
Prior Certificates to be prepaid;
WHEREAS, to provide the funds necessary to pay and prepay a portion of the
remaining Prior Installment Payments, the District and the Corporation desire that the
Corporation purchase the Prior Project from the District and the District sell the Prior
Project to the Corporation, and that the District then purchase the Prior Project from the
Corporation and the Corporation sell the Prior Project to the District, for the installment
payments (the "Installment Payments") to be made by the District pursuant to an
Installment Purchase Agreement by and between the District and the Corporation (such
Installment Purchase Agreement, in the form presented to this meeting, with such
changes, insertions and omissions as are made pursuant to this Resolution, being
referred to herein as the "Installment Purchase Agreement");
56089867.2 11411481
Return to Mende Report
WHEREAS, the Corporation intends to assign without recourse certain of its
rights under and pursuant to the Installment Purchase Agreement to U.S. Bank National
Association, as trustee (the 'Trustee'), pursuant to a Trust Agreement by and among
the Trustee, the Corporation and the District (such Trust Agreement, in the form
presented to this meeting, with such changes, insertions and omissions as are made
pursuant to this Resolution, being referred to herein as the "Trust Agreement');
WHEREAS, in consideration of such assignment and the execution and delivery
of the Trust Agreement, the Trustee intends to execute and deliver the Orange County
Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the
'Revenue Obligations"), evidencing direct, undivided fractional interests in the
Installment Payments, and the interest thereon;
WHEREAS, the District desires to provide for the public sale of the Revenue
Obligations;
WHEREAS, a form of the Notice of Intention to Sell to be published in connection
with the public offering and sale of the Revenue Obligations has been prepared (such
Notice of Intention to Sell, in the form presented to this meeting, with such changes,
insertions and omissions as are made pursuant to this Resolution, being referred to
herein as the "Notice of Intention to Sell");
WHEREAS, a form of the Official Notice Inviting Bids to be distributed in
connection with the public offering and sale of the Revenue Obligations has been
prepared (such Official Notice Inviting Bids, in the form presented to this meeting, with
such changes, insertions and omissions as are made pursuant to this Resolution, being
referred to herein as the "Notice Inviting Bids");
WHEREAS, a form of the Preliminary Official Statement to be distributed in
connection with the public offering of the Revenue Obligations has been prepared (such
Preliminary Official Statement in the form presented to this meeting, with such changes,
insertions and omissions as are made pursuant to this Resolution, being referred to
herein as the "Preliminary Official Statement');
WHEREAS, Rule 15c2-12 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended ('Rule 15c2-12"),
requires that the underwriter thereof must have reasonably determined that the District
has undertaken in a written agreement or contract for the benefit of the holders of the
Revenue Obligations to provide disclosure of certain financial information and certain
material events on an ongoing basis;
WHEREAS, to cause such requirement to be satisfied, the District desires to
enter into a Continuing Disclosure Agreement with the Trustee (such Continuing
Disclosure Agreement in the form presented to this meeting, with such changes,
insertions and omissions as are made pursuant to this Resolution, being referred to
herein as the "Continuing Disclosure Agreement');
WHEREAS, to cause such requirement to be satisfied, the District desires to
enter into a Escrow Agreement with MUFG Union Bank, N.A., as escrow agent (such
Escrow Agreement in the form presented to this meeting, with such changes, insertions
56089867.2 OCSD 14-XX-2
Return to Mende Report
and omissions as are made pursuant to this Resolution, being referred to herein as the
"Escrow Agreement');
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Installment Purchase Agreement;
(b) the Trust Agreement;
(c) the Notice of Intention to Sell;
(d) the Notice Inviting Bids;
(e) the Preliminary Official Statement;
(f) the Continuing Disclosure Agreement; and
(g) the Escrow Agreement;
WHEREAS, all acts, conditions and things required by the Constitution and laws
of the State of California to exist, to have happened and to have been performed
precedent to and in connection with the consummation of the financing authorized
hereby do exist, have happened and have been performed in regular and due time,
form and manner as required by law, and the District is now duly authorized and
empowered, pursuant to each and every requirement of law, to consummate such
financing for the purpose, in the manner and upon the terms herein provided.
NOW, THEREFORE, the Board of Directors of the District DOES HEREBY
RESOLVE, DETERMINE AND ORDER:
Section 1. All of the recitals herein contained are true and correct and the
Board of Directors of the District (the "Board") so finds.
Section 2. The Installment Purchase Agreement, in substantially the form
submitted to this meeting and made a part hereof as though set forth herein, be and the
same is hereby approved. The Chair of the Board, and such other member of the Board
as the Chair may designate, the General Manager of the District, the Director of Finance
and Administrative Services of the District, and such other officers of the District as the
Director of Finance and Administrative Services may designate (the "Authorized
Officers") are, and each of them is, hereby authorized and directed, for and in the name
of the District, to execute and deliver the Installment Purchase Agreement in the form
submitted to this meeting, with such changes, insertions and omissions as the
Authorized Officer executing the same may require or approve, such requirement or
approval to be conclusively evidenced by the execution of the Installment Purchase
Agreement by such Authorized Officer; provided, however, that such changes,
56089861.2 OCSD 14-XX-3
Return to Mende Report
insertions and omissions shall not result in an aggregate principal amount of Installment
Payments in excess of $150,000,000, shall not result in a true interest cost for the
Installment Payments in excess of 5.0% and shall not result in a final Installment
Payment later than February 1, 2037.
Section 3. The Trust Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is
hereby approved. The Authorized Officers are, and each of them is, hereby authorized
and directed, for and in the name of the District, to execute and deliver the Trust
Agreement in the form presented to this meeting, with such changes, insertions and
omissions as the Authorized Officer executing the same may require or approve, such
requirement or approval to be conclusively evidenced by the execution of the Trust
Agreement by such Authorized Officer.
Section 4. The execution and delivery of Revenue Obligations evidencing
principal in an aggregate amount of not to exceed $150,000,000, payable in the years
and in the amounts, and evidencing principal of and interest on the Installment
Payments as specified in the Trust Agreement as finally executed, are hereby
authorized and approved.
Section 5. The prepayment of all or a portion of the remaining principal
components of the Prior Installment Payments, and the interest components thereof to
the dates of prepayment, and the Prior Certificates evidencing interests therein, as
determined by any Authorized Officer, is hereby authorized and approved.
Section 6. The form of Notice of Intention to Sell, in substantially the form
submitted to this meeting and made a part hereof as though set forth in full herein, with
such changes, insertions and omissions therein as may be approved by an Authorized
Officer, is hereby approved, and the use of the Notice of Intention to Sell in connection
with the offering and sale of the Revenue Obligations is hereby approved. The
Authorized Officers are each hereby authorized and directed, for and in the name and
on behalf of the District, to cause the Notice of Intention to Sell to be published once in
The Bond Buyer (or in such other financial publication generally circulated throughout
the State of California or reasonably expected to be disseminated among prospective
bidders for the Revenue Obligations as an Authorized Officer shall approve as being in
the best interests of the District) at least five days prior to the date set for the opening of
bids in the Notice Inviting Bids, with such changes, insertions and omissions therein as
an Authorized Officer may require or approve, such requirement or approval to be
conclusively evidenced by such publishing of the Notice of Intention to Sell.
Section 7. The Notice Inviting Bids, in substantially the form submitted to this
meeting and made a part hereof as though set forth herein, with such changes,
insertions and omissions therein as may be approved by an Authorized Officer, be and
the same is hereby approved, and the use of the Notice Inviting Bids in connection with
the offering and sale of the Revenue Obligations is hereby authorized and approved.
The terms and conditions of the offering and sale of the Revenue Obligations shall be
as specified in the Notice Inviting Bids. Bids for the purchase of the Revenue
5WS98612 OCSD 14-XX-4
Return to Mende Rom
Obligations shall be received at the time and place set forth in the Notice Inviting Bids.
The Authorized Officers are each hereby authorized and directed, for and in the name
and on behalf of the District, to accept the bid for the Revenue Obligations with the
lowest true interest cost, or to reject all bids therefor, in accordance with the terms of the
Notice Inviting Bids.
Section 8. The Preliminary Official Statement, in substantially the form
presented to this meeting and made a part hereof as though set forth in full herein, with
such changes, insertions and omissions therein as may be approved by an Authorized
Officer, is hereby approved, and the use of the Preliminary Official Statement in
connection with the offering and sale of the Revenue Obligations is hereby authorized
and approved. The Authorized Officers are each hereby authorized to certify on behalf
of the District that the Preliminary Official Statement is deemed final as of its date, within
the meaning of Rule 15c2-12 (except for the omission of certain information permitted
by Rule 15c2-12 to be omitted). The Authorized Officers are each hereby authorized
and directed to furnish, or cause to be furnished, to prospective bidders for the Revenue
Obligations a reasonable number of copies of the Preliminary Official Statement.
Section 9. The preparation and delivery of a final Official Statement (the
"Official Statement'), and its use in connection with the offering and sale of the Revenue
Obligations, be and the same is hereby authorized and approved. The Official
Statement shall be in substantially the form of the Preliminary Official Statement, with
such changes, insertions and omissions as may be approved by an Authorized Officer,
such approval to be conclusively evidenced by the execution and delivery thereof. The
Authorized Officers are, and each of them is, hereby authorized and directed to execute
the final Official Statement and any amendment or supplement thereto, for and in the
name of the District.
Section 10. The Continuing Disclosure Agreement, in substantially the form
submitted to this meeting and made a part hereof as though set forth herein, be and the
same is hereby approved. The Authorized Officers are, and each of them is, hereby
authorized and directed, for and in the name of the District, to execute and deliver the
Continuing Disclosure Agreement in the form submitted to this meeting, with such
changes, insertions and omissions as the Authorized Officer executing the same may
require or approve, such requirement or approval to be conclusively evidenced by the
execution of the Continuing Disclosure Agreement by such Authorized Officer.
Section 11. The Escrow Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth herein, be and the same is hereby
approved. The Authorized Officers are, and each of them is, hereby authorized and
directed, for and in the name of the District, to execute and deliver the Escrow
Agreement in the form submitted to this meeting, with such changes, insertions and
omissions as the Authorized Officer executing the same may require or approve, such
requirement or approval to be conclusively evidenced by the execution of the Escrow
Agreement by such Authorized Officer.
5WS98612 OCSD 14-XX-5
Return to Mende Report
Section 12. The Authorized Officers are, and each of them hereby is,
authorized and directed to execute and deliver any and all documents and instruments
and to do and cause to be done any and all acts and things necessary or proper for
carrying out the execution and delivery of the Revenue Obligations and the transactions
contemplated by the notices, agreements and documents referenced in this Resolution.
Section 13. All actions heretofore taken by the officers and employees of the
District with respect to the execution, delivery and sale of the Revenue Obligations, or in
connection with or related to any of the agreements or documents referenced in this
Resolution, are hereby approved, confirmed and ratified.
Section 14. This Resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED at a regular meeting held on December 17, 2014.
Tom Beamish
Chairman of the Board
ATTEST:
Maria E. Ayala
Clerk of the Board
APPROVED:
Bradley Hogin
General Counsel
Orange County Sanitation District
56089867.2 OCSD 14-XX-6
Return to Mende Report
STATE OF CALIFORNIA )
ss
COUNTY OF ORANGE )
I, Maria E. Ayala, Clerk of the Board of Directors of the Orange County Sanitation
District, do hereby certify that the foregoing Resolution No. OCSD 14-XX was passed
and adopted at a regular meeting of said Board on the 171h day of December, 2014, by
the following vote, to wit:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official
seal of Orange County Sanitation District this 17t^ day of December, 2014.
Maria E. Ayala
Clerk of the Board of Directors
Orange County Sanitation District
56089867.2
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DRAFT OF
12/01/14
RESOLUTION NO. FC-XX
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE
COUNTY SANITATION DISTRICT FINANCING CORPORATION
AUTHORIZING THE EXECUTION AND DELIVERY BY THE
CORPORATION OF AN INSTALLMENT PURCHASE AGREEMENT
AND A TRUST AGREEMENT IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION
DISTRICT WASTEWATER REFUNDING REVENUE OBLIGATIONS,
SERIES 2015A, AUTHORIZING THE EXECUTION AND DELIVERY OF
SUCH REVENUE OBLIGATIONS EVIDENCING PRINCIPAL IN AN
AGGREGATE AMOUNT OF NOT TO EXCEED $150,000,000 AND
AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND
RELATED ACTIONS.
WHEREAS, to refinance the acquisition, construction and installation of certain
improvements to its wastewater system (the 'Prior Project"), the Orange County
Sanitation District (the 'District") has heretofore purchased the Prior Project from the
Orange County Sanitation District Financing Corporation (the "Corporation"), and the
Corporation has heretofore sold the Prior Project to the District, for the installment
payments (the 'Prior Installment Payments") made by the District pursuant to the
Installment Purchase Agreement, dated as of August 1, 2000 (the 'Prior Installment
Purchase Agreement'), by and between the District and the Corporation;
WHEREAS, to provide the funds necessary to refinance the Prior Project, the
District caused the execution and delivery of the Orange County Sanitation District
Certificates of Participation, Series 2007B (the 'Prior Certificates'), evidencing direct,
undivided fractional interests in the related Prior Installment Payments;
WHEREAS, the District desires to refinance a portion of the Prior Project by
paying and prepaying the remaining Prior Installment Payments, and the interest
thereon to the date of prepayment, thereby causing all or a portion of the remaining
Prior Certificates to be prepaid;
WHEREAS, to provide the funds necessary to pay and prepay a portion of the
remaining Prior Installment Payments, the District and the Corporation desire that the
Corporation purchase the Prior Project from the District and the District sell the Prior
Project to the Corporation, and that the District then purchase the Prior Project from the
Corporation and the Corporation sell the Prior Project to the District, for the installment
payments (the "Installment Payments") to be made by the District pursuant to an
Installment Purchase Agreement by and between the District and the Corporation (such
Installment Purchase Agreement, in the form presented to this meeting, with such
changes, insertions and omissions as are made pursuant to this Resolution, being
referred to herein as the "Installment Purchase Agreement");
56089900.2 11411481
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WHEREAS, the Corporation intends to assign without recourse certain of its
rights under and pursuant to the Installment Purchase Agreement to U.S. Bank National
Association, as trustee (the 'Trustee"), pursuant to a Trust Agreement by and among
the Trustee, the Corporation and the District (such Trust Agreement, in the form
presented to this meeting, with such changes, insertions and omissions as are made
pursuant to this Resolution, being referred to herein as the "Trust Agreement');
WHEREAS, in consideration of such assignment and the execution and delivery
of the Trust Agreement, the Trustee intends to execute and deliver the Orange County
Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the
"Revenue Obligations"), evidencing direct, undivided fractional interests in the
Installment Payments, and the interest thereon;
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Installment Purchase Agreement; and
(b) the Trust Agreement;
WHEREAS, all acts, conditions and things required by the Constitution and laws
of the State of California to exist, to have happened and to have been performed
precedent to and in connection with the consummation of the actions authorized hereby
do exist, have happened and have been performed in regular and due time, form and
manner as required by law, and the Corporation is now duly authorized and
empowered, pursuant to each and every requirement of law, to consummate such
actions for the purpose, in the manner and upon the terms herein provided;
NOW, THEREFORE, the Board of Directors of the Corporation DOES HEREBY
RESOLVE, DETERMINE AND ORDER:
Section 1. All of the recitals herein contained are true and correct and the
Board of Directors of the Corporation (the "Board") so finds.
Section 2. The Installment Purchase Agreement, in substantially the form
submitted to this meeting and made a part hereof as though set forth herein, be and the
same is hereby approved. The President of the Corporation, the Vice-President of the
Corporation, the Treasurer of the Corporation and the Secretary of the Corporation, and
such other officers of the Corporation as the President may designate (the "Authorized
Officers") are, and each of them is, hereby authorized and directed, for and in the name
of the Corporation, to execute and deliver the Installment Purchase Agreement in the
form submitted to this meeting, with such changes, insertions and omissions as the
Authorized Officer executing the same may require or approve, such requirement or
approval to be conclusively evidenced by the execution of the Installment Purchase
Agreement by such Authorized Officer; provided, however, that such changes,
insertions and omissions shall not result in an aggregate principal amount of Installment
Payments in excess of $150,000,000, shall not result in a true interest cost for the
Installment Payments in excess of 5.0% and shall not result in a final Installment
Payment later than February 1, 2037.
eso8eeoo.2 FC-XX-2
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Section 3. The Trust Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is
hereby approved. The Authorized Officers are, and each of them is, hereby authorized
and directed, for and in the name of the Corporation, to execute and deliver the Trust
Agreement in the form presented to this meeting, with such changes, insertions and
omissions as the Authorized Officer executing the same may require or approve, such
requirement or approval to be conclusively evidenced by the execution of the Trust
Agreement by such Authorized Officer.
Section 4. The execution and delivery of Revenue Obligations evidencing
principal in an aggregate amount of not to exceed $150,000,000, payable in the years
and in the amounts, and evidencing direct, undivided fractional interests in the
Installment Payments, and the interest thereon, as specified in the Trust Agreement as
finally executed, are hereby authorized and approved.
Section 5. The officers and agents of the Corporation are, and each of them
hereby is, authorized and directed to execute and deliver any and all documents and
instruments and to do and cause to be done any and all acts and things necessary or
proper for carrying out the execution and delivery of the Revenue Obligations and the
transactions contemplated by the agreements or documents referenced in this
Resolution.
Section 6. All actions heretofore taken by the officers and agents of the
Corporation with respect to the execution, delivery and sale of the Revenue Obligations,
or in connection with or related to any of the agreements or documents referenced in
this Resolution, are hereby approved, confirmed and ratified.
Section 7. This Resolution shall take effect immediately upon its adoption.
esoseeoo.z FC-XX-3
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PASSED AND ADOPTED at a meeting held on December 17, 2014.
Tom Beamish
President, Orange County Sanitation
District Financing Corporation
ATTEST:
Maria E. Ayala
Secretary/Clerk of the Board
Orange County Sanitation District
Financing Corporation
APPROVED:
Bradley Hogin,
General Counsel, Orange County
Sanitation District Financing Corporation
esoseeoo.z FC-XX-4
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STATE OF CALIFORNIA )
ss
COUNTY OF ORANGE )
I, Maria E. Ayala, Clerk of the Board of Directors of the Orange County Sanitation
District Financing Corporation, do hereby certify that the foregoing Resolution No. FC-
XX was passed and adopted at a regular meeting of said Board on the 171" day of
December, 2014, by the following vote, to wit:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official
seal of Orange County Sanitation District Financing Corporation this 17" day of
December, 2014.
Maria E. Ayala
Secretary/Clerk of the Board of Directors
Orange County Sanitation District
Financing Corporation
56089900.2 FC-XX-5
DRAFT OF
12/01/14
TRUST AGREEMENT
by and among
U.S. BANK NATIONAL ASSOCIATION,
as Trustee,
ORANGE COUNTY SANITATION DISTRICT
FINANCING CORPORATION
and
ORANGE COUNTY SANITATION DISTRICT
Dated as of February 1, 2015
Relating to
ge County Sanitation District
Wastewater Refunding Revenue Obligations
Series 2015A
411636112 1141/48/
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section1.01. Definitions........................................................................................................2
Section 1.02. Definitions in Installment Purchase Agreement..............................................9
Section1.03. Equal Security..................................................................................................9
ARTICLE II
TERMS AND CONDITIONS OF REVENUE OBLIGATIONS
Section 2.01. Preparation and Delivery of Revenue Obligations ..........................................9
Section 2.02. Denomination, Medium and Dating of Revenue Obligations .........................9
Section 2.03. Payment Dates of Revenue Obligations; Interest Computation.................... 10
Section 2.04. Form of Revenue Obligations........................................................................ 11
Section 2.05. Execution of Revenue Obligations and Replacement Certificates................ 11
Section 2.06. Transfer and Payment,Exchange or Cancellation of Revenue
Obligations..................................................................................................... 11
Section 2.07. Revenue Obligation Registration Books........................................................ 11
Section 2.08. Temporary Revenue Obligations................................................................... 12
Section 2.09. Revenue Obligations Mutilated, Lost,Destroyed or Stolen.......................... 12
Section 2.10. Book-Entry System........................................................................................ 12
ARTICLE III
PROCEEDS OF REVENUE OBLIGATIONS
Section 3.01. Delivery of Revenue Obligations................................................................... 15
Section 3.02. Deposit of Proceeds of Revenue Obligations ................................................ 15
Section 3.03. Costs of Issuance Fund.................................................................................. 15
ARTICLE IV
PREPAYMENT OF REVENUE OBLIGATIONS
Section 4.01. Optional Prepayment..................................................................................... 15
Section4.02. Reserved......................................................................................................... 16
Section 4.03. Selection of Revenue Obligations for Optional Prepayment......................... 16
Section 4.04. Notice of Prepayment .................................................................................... 16
Section 4.05. Partial Prepayment of Revenue Obligations.................................................. 17
Section 4.06. Effect of Prepayment..................................................................................... 17
ARTICLE V
ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS
Section 5.01. Assignment and Pledge.................................................................................. 17
Section 5.02. Installment Payment Fund............................................................................. 18
Section5.03. Reserved......................................................................................................... 19
Section 5.04. Investment of Moneys.................................................................................... 19
Section 5.05. Brokerage Confirmations............................................................................... 19
41163611.2 i
TABLE OF CONTENTS
(continued)
Page
ARTICLE VI
COVENANTS
Section 6.01. Compliance with Trust Agreement................................................................20
Section 6.02. Compliance with Installment Purchase Agreement.......................................20
Section 6.03. Compliance with Master Agreement.............................................................20
Section 6.04. Observance of Laws and Regulations............................................................20
Section6.05. Other Liens.....................................................................................................20
Section 6.06. Prosecution and Defense of Suits ..................................................................20
Section 6.07. Accounting Records and Statements.............................................................21
Section 6.08. Tax Covenants ...............................................................................................21
Section 6.09. Continuing Disclosure ...................................................................................24
Section 6.10. Further Assurances.........................................................................................25
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01. Action upon Event of Default........................................................................25
Section 7.02. Other Remedies of the Trustee......................................................................25
Section7.03. Non-Waiver....................................................................................................25
Section 7.04. Remedies Not Exclusive................................................................................26
Section 7.05. Application of Amounts After Default..........................................................26
Section 7.06. Trustee May Enforce Claims Without Possession of Revenue
Obligations.....................................................................................................27
Section 7.07. Limitation on Suits.........................................................................................27
Section 7.08. No Liability by the Corporation to the Owners.............................................27
Section 7.09. No Liability by the District to the Owners.....................................................27
Section 7.10. No Liability of the Trustee to the Owners.....................................................28
ARTICLE VI I
THE TRUSTEE
Section 8.01. Employment of the Trustee; Duties...............................................................28
Section 8.02. Removal and Resignation of the Trustee.......................................................28
Section 8.03. Compensation and Indemnification of the Trustee........................................29
Section 8.04. Protection of the Trustee................................................................................30
ARTICLE IX
AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT
Section 9.01. Amendment or Supplement...........................................................................31
Section 9.02. Disqualified Revenue Obligations.................................................................32
Section 9.03. Endorsement or Replacement of Revenue Obligations After
Amendment or Supplement...........................................................................32
Section 9.04. Amendment by Mutual Consent....................................................................33
41163611.2 ii
TABLE OF CONTENTS
(continued)
Page
ARTICLE X
DEFEASANCE
Section 10.01. Discharge of Revenue Obligations and Trust Agreement.............................33
Section10.02. Unclaimed Moneys........................................................................................34
ARTICLE XI
MISCELLANEOUS
Section 11.01. Benefits of Trust Agreement..........................................................................35
Section 11.02. Successor Deemed Included in all References to Predecessor......................35
Section 11.03. Execution of Documents by Owners.............................................................35
Section 11.04. Waiver of Personal Liability..........................................................................35
Section 11.05. Acquisition of Revenue Obligations by District............................................36
Section11.06. Content of Certificates...................................................................................36
Section 11.07. Funds and Accounts.......................................................................................36
Section 11.08. Article and Section Headings, Gender and References.................................36
Section 11.09. Partial Invalidity.............................................................................................37
Section 11.10. California Law...............................................................................................37
Section11.11. Notices...........................................................................................................37
Section 11.12. Effective Date................................................................................................38
Section 11.13. Execution in Counterparts..............................................................................38
EXHIBIT A—FORM OF REVENUE OBLIGATION
41163611.2 111
TRUST AGREEMENT
THIS TRUST AGREEMENT (this "Trust Agreement'), dated as of February 1, 2015,
is made by and among U.S. BANK NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States of America, as trustee(the
"Trustee"), the ORANGE COUNTY SANITATION DISTRICT FINANCING
CORPORATION, a nonprofit public benefit corporation organized and existing under the laws
of the State of California (the "Corporation"), and the ORANGE COUNTY SANITATION
DISTRICT, a county sanitation district organized and existing under the laws of the State of
California(the"District').
WITNESSETH:
WHEREAS, to refinance the acquisition, construction and installation of certain
improvements to its wastewater system (the "Prior Project'), the District has heretofore
purchased the Prior Project from the Corporation, and the Corporation has heretofore sold the
Prior Project to the District, for the installment payments (the "Prior Installment Payments")
made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000
(the"Prior Installment Purchase Agreement'),by and between the District and the Corporation;
WHEREAS, to provide the funds necessary to refinance the Prior Project, the District
caused the execution and delivery of the Orange County Sanitation District Certificates of
Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional
interests in the related Prior Installment Purchase Agreement and the related Prior Installment
Payments;
WHEREAS,the District desires to refinance a portion of the Prior Project(the "Project')
by prepaying a portion of the remaining Prior Installment Payments, and the interest thereon to
the date of prepayment, thereby causing a portion of the Prior Certificates to be retired;
WHEREAS, to provide the funds necessary to pay and prepay a portion of the remaining
Prior Installment Payments,the District and the Corporation desire that the Corporation purchase
the Project from the District and the District sell the Project to the Corporation, and that the
District then purchase the Project from the Corporation and the Corporation sell the Project to
the District, for the installment payments (the"Installment Payments") to be made by the District
pursuant to the Installment Purchase Agreement, dated the date hereof(the"Installment Purchase
Agreement');
WHEREAS, the Corporation proposes to assign without recourse certain of its rights
under and pursuant to the Installment Purchase Agreement to the Trustee;
WHEREAS, in consideration of such assignment and the execution and delivery of this
Trust Agreement, the Trustee has agreed to execute and deliver Orange County Sanitation
District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"),
which are certificates of participation, evidencing direct, undivided fractional interests in the
Installment Purchase Agreement and the related Installment Payments,and the interest thereon;
4116361L2
WHEREAS, a portion of the proceeds of the Revenue Obligations will be used to prepay
[all] [a portion] of the Prior Installment Payments; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened
and to have been performed precedent to and in connection with the execution and delivery of
this Trust Agreement do exist, have happened and have been performed in regular and due time,
form and manner as required by law, and the parties hereto are now duly authorized to execute
and deliver this Trust Agreement;
NOW, THEREFORE, in consideration of the promises and of the mutual agreements
and covenants contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged,the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the
context otherwise requires, the terms defined in this Section shall for all purposes hereof and of
any amendment hereof or supplement hereto and of the Revenue Obligations and of any
certificate, opinion, request or other document mentioned herein or therein have the meanings
defined herein, the following definitions to be equally applicable to both the singular and plural
forms of any of the terms defined herein:
"Authorized Corporation Representative"means the President,the Vice President, the
Treasurer and the Secretary of the Corporation, and any other Person authorized by the President
of the Corporation to act on behalf of the Corporation under or with respect to this Trust
Agreement.
"Authorized Denominations"means $5,000 and integral multiples thereof.
"Authorized District Representative" means the General Manager of the District, the
Director of Finance and Administrative Services of the District, the Controller of the District and
any other Person authorized by the Director of Finance and Administrative Services of the
District to act on behalf of the District under or with respect to this Trust Agreement.
"Beneficial Owners" means those individuals, partnerships, corporations or other
entities for which the Participants have caused the Depository to hold Book-Entry Certificates.
"Book-Entry Certificates" means the Revenue Obligations registered in the name of the
nominee of DTC, or any successor securities depository for the Revenue Obligations, as the
Owner thereof pursuant to the terms and provisions of Section 2.10 hereof.
"Business Day" means a day other than (a) Saturday or Sunday, (b)a day on which
banking institutions in the city in which the Principal Office is located are authorized or required
by law to be closed, and (c)a day on which the New York Stock Exchange is authorized or
obligated by law or executive order to be closed.
au636n2 2
"Cede & Co." means Cede & Co., the nominee of DTC, and any successor nominee of
DTC with respect to the Revenue Obligations.
"Certificate Year" means each twelve-month period beginning on February 2 in each
year and extending to the next succeeding February 1, both dates inclusive, except that the first
Certificate Year shall begin on the Closing Date and end on February 1,2016.
"Closing Date"means February_, 2015.
"Code" means the Internal Revenue Code of 1986.
"Continuing Disclosure Agreement" means the Continuing Disclosure Agreement,
dated as of the date hereof, by and between the District and Digital Assurance Certification LLC,
as originally executed and as it may from time to time be amended in accordance with the terms
thereof.
"Corporation' means the Orange County Sanitation District Financing Corporation, a
nonprofit public benefit corporation organized and existing under the laws of the State.
"Costs of Issuance" means all the costs of executing and delivering the Revenue
Obligations, including, but not limited to, all printing and document preparation expenses in
connection with this Trust Agreement, the Installment purchase Agreement, the Revenue
Obligations and any preliminary official statement and final official statement pertaining to the
Revenue Obligations, fees of a financial advisor, rating agency fees, market study fees, legal fees
and expenses of counsel with respect to the execution and delivery of the Revenue Obligations,
the initial fees and expenses of the Trustee and its counsel and other fees and expenses incurred
in connection with the execution and delivery of the Revenue Obligations, to the extent such fees
and expenses are approved by the District.
"Costs of Issuance Fund" means the fund by that name established in accordance with
Section 3.03 hereof.
"Depository" means the securities depository acting as Depository pursuant to
Section 2.10 hereof.
"District" means the Orange County Sanitation District, a county sanitation district
organized and existing under the laws of the State, and any successor thereto.
"DTC"means The Depository Trust Company,New York,New York and its successors.
"Escrow Agent"means MUFG Union Bank,N.A. and its successor or assign.
"Escrow Agreement" means the Escrow Agreement, dated as of February 1, 2015,
between the Escrow Agent and the District.
"Escrow Fund" means the escrow fund established under the Escrow Agreement and
held by the Escrow Agent.
au636n2 3
"Event of Default" shall have the meaning set forth in Section 6.01 of the Installment
Purchase Agreement.
"Government Obligations" means any of the following which are noncallable by the
issuer thereof except to the extent not permitted by the laws of the State as an investment for the
moneys to be invested therein at the time of investment:
(i) (a) direct general obligations of the United States of America,
(b)obligations the payment of the principal of and interest on which are unconditionally
guaranteed as to the full and timely payment by the United States of America, or (c) any
fund or other pooling arrangement whose assets consist exclusively of the obligations
listed in clause(a) or (b) of this clause(i) and which is rated at least `P-1" by Moody's;
provided that, such obligations shall not include unit investment trusts or mutual fund
obligations;
(ii) advance refunded tax-exempt obligations that (a) are rated by Moody's
and S&P, (b) are secured by obligations specified in clause(i), (c) me tax-exempt
because they are secured by obligations specified in clause (i), and (d) have the same
ratings as the obligations specified in clause (i);
(iii) bonds, debentures or notes issued by any of the following federal
agencies: Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation or
Fannie Mae; provided, that such bonds, debentures or notes shall be the senior
obligations of such agencies (including participation certificates) and have the same
ratings by Moody's and S&P as the obligations specified in clause(i); and
(iv) bonds, debentures or notes issued by any Federal agency hereafter created
by an act of Congress, the payment of the principal of and interest on which are
unconditionally guaranteed by the United States of America as to the full and timely
payment; provided, that, such obligations shall not include unit investment trusts or
mutual fund obligations.
"Installment Payment Fund" means the fund by that name established in accordance
with Section 5.02 hereof.
"Installment Payments" means the Installment Payments required to be made by the
District pursuant to Section 3.02 of the Installment Purchase Agreement.
`Installment Purchase Agreement' means the Installment Purchase Agreement, dated
as of the date hereof, by and between the District and the Corporation, as originally executed and
as it may from time to time be amended in accordance with the provisions thereof.
"Interest Account" means the account by that name within the Installment Payment
Fund established in accordance with Section 5.02 hereof.
"Interest Payment Date" means February 1 and August 1 of each year, commencing
August 1,2015.
4116361L2 4
"Letter of Representations"means the letter of the District delivered to and accepted by
the Depository on or prior to the delivery of the Revenue Obligations as Book-Entry Certificates
setting forth the basis on which the Depository serves as depository for such Book-Entry
Certificates, as originally executed or as it may be supplemented or revised or replaced by a
letter to a substitute Depository.
"Master Agreement" means the Master Agreement for District Obligations, dated as of
August 1, 2000,by and between the District and the Corporation, as originally executed and as it
may from time to time be amended or supplemented in accordance with the terms thereof.
"Moody's" means Moody's Investors Service, a corporation organized and existing
under the laws of the State of Delaware, its successors and assigns, except that if such
corporation shall no longer perform the function of a securities rating agency for any reason, the
term "Moody's" shall be deemed to refer to any other nationally recognized securities rating
agency selected by the District.
"Nominee" means the nominee of the Depository, which may be the Depository, as
determined from time to time pursuant to Section 2.10 hereof.
"Opinion of Counsel" means a written opinion of Fulbright& Jaworski LLP or any
other counsel of recognized national standing in the field of law relating to municipal bonds,
appointed and paid by the District.
"Outstanding," when used as of any particular time with reference to Revenue
Obligations, means (subject to the provisions of Section 9.02 hereof) all Revenue Obligations
except (a)Revenue Obligations previously canceled by the Trustee or delivered to the Trustee
for cancellation, (b) Revenue Obligations paid or deemed to have been paid within the meaning
of Section 10.01 hereof, and(c) Revenue Obligations in lieu of or in substitution for which other
Revenue Obligations shall have been executed and delivered by the Trustee pursuant to
Section 2.09 hereof.
"Owner" means any Person who shall be the registered owner of any Outstanding
Revenue Obligation as indicated in the registration books of the Trustee required to be
maintained pursuant to Section 2.07 hereof.
"Participants" means those broker-dealers, banks and other financial institutions from
time to time for which the Depository holds Book-Entry Certificates as securities depository.
"Participating Underwriter" has the meaning ascribed thereto in the Continuing
Disclosure Agreement.
4116361L2 5
"Permitted Investments"means any of the following, except to the extent not permitted
by the laws of the State as an investment for the moneys to be invested therein at the time of
investment:
(1) Government Obligations;
(2) Bonds, debentures, notes, participation certificates or other evidences of
indebtedness issued, or the principal of and interest on which are unconditionally
guaranteed, by the Federal Intermediate Credit Bank, the Federal Home Loan Bank
System, the Government National Mortgage Association or any other agency or
instrumentality of or corporation wholly owned by the United States of America when
such obligations are backed by the full faith and credit of the United States for the full
and timely payment of principal and interest;
(3) Obligations of any state of the United States or any political subdivision
thereof, which at the time of investment are rated "Aa3" or higher by Moody's and
"AA-" or higher by S&P; or which are rated by Moody's "VMIG 1" or better and by
S&P "A-1+" or better with respect to commercial paper, or "VMIG 1" and "SP-111
,
respectively, with respect to municipal notes;
(4) Bank time deposits evidenced by certificates of deposit, deposit accounts,
and bankers' acceptances, issued by any bank, trust company or national banking
association insured by the Federal Deposit Insurance Corporation (including the Trustee);
provided that (a) such bank, trust company or national banking association be rated
"Aa3" or better by Moody's and "AA-" or better by S&P; and (b)the aggregate of such
bank time deposits and bankers' acceptances issued by any bank, trust company or
banking association does not exceed at any one time 10% of the aggregate of the capital
stock, surplus and undivided profits of such bank, trust company or banking association
and that such capital stock, surplus and undivided profits shall not be less than
$15,000,000;
(5) Repurchase agreements with any bank, trust company or national banking
association insured by the Federal Deposit Insurance Corporation(including the Trustee),
with subsidiaries (of a parent company), provided the obligations of the subsidiary under
the agreement we unconditionally guaranteed by the parent, or with any government
bond dealer recognized as a primary dealer by the Federal Reserve Bank of New York,
which agreements are fully and continuously secured by a valid and perfected first
priority security interest in obligations described in paragraph(1) or (2) of this definition,
provided that either such bank, trust company or national banking association which (or
senior debt or claims paying ability of the financial entity's guarantor) is rated, at the time
of investment,"Aa3"or better by Moody's and"AA-" or better by S&P;
(6) Repurchase agreements with maturities of not more than one year entered
into with financial institutions such as banks or trust companies organized under state law
or national banks or banking associations (including the Trustee), insurance companies or
government bond dealers reporting to, trading with, and recognized as a primary dealer
by, the Federal Reserve Bank of New York and a member of the Securities Investor
4116361L2 6
Protection Corporation or with a dealer or parent holding company that is rated, at the
time of investment, or whose long-term debt obligations (or senior debt or claims paying
ability of the financial entity's guarantor) are rated, at the time of investment, "Aa3" or
better by Moody's and"AA-"or better by S&P,provided such repurchase agreements are
in writing, secured by obligations described in paragraphs (1) and (2) of this definition
having a fair market value, exclusive of accrued interest, at least equal to the amount
invested in the repurchase agreements and in which the Trustee has a perfected first lien
in, and retains possession of, such obligations free from all third party claims;
(7) Investment agreements, forward purchase agreements and reserve fund put
agreements with any corporation, including banking or financial institutions, or
agreements entered into with subsidiaries (of a parent company), provided the obligations
of the subsidiary under the agreement are unconditionally guaranteed by the parent, the
corporate debt of which (or senior debt or claims paying ability of the financial entity's
guarantor) is rated, at the time of investment, "Aa3" or better by Moody's and "AA-" or
better by S&P;
(8) Guaranteed investment contracts or similar funding agreements issued by
insurance companies, provided that either the long term corporate debt of such insurance
company, at the time of investment, is rated, at the time of investment, "Aa3" or better by
Moody's and "AA-" or better by S&P or which agreements are fully and continuously
secured by a valid and perfected first priority security interest in obligations described in
paragraph(1) or (2) of this definition, or that the following conditions are met: (a) the
market value of the collateral is maintained at levels acceptable to Moody's and S&P,
(b)the Trustee or a third party acting solely as agent for the Trustee has possession of the
collateral, (c) the Trustee has a perfected first priority security interest in the collateral,
(d) the collateral is free and clear of third-party liens, and (e)failure to maintain the
requisite collateral level will require the Trustee to liquidate collateral;
(9) Corporate commercial paper rated"P-1"or better by Moody's and"A-1+"
or better by S&P at the time of investment;
(10) Taxable government money market portfolios which are rated"AAAm"or
"AAAm-G" by S&P and "P-l"by Moody's (including funds for which the Trustee or an
affiliate provides investment advice or similar services); and
(11) Deposits with the Local Agency Investment Fund of the State, as may
otherwise be permitted by law.
"Person" means an individual, corporation, limited liability company, firm, association,
partnership, trust, or other legal entity or group of entities, including a governmental entity or
any agency or political subdivision thereof.
"Prepayment Account"means the account by that name within the Installment Payment
Fund established in accordance with Section 5.02 hereof.
"Principal Account" means the account by that name within the Installment Payment
Fund established in accordance with Section 5.02 hereof.
4116361L2 7
"Principal Office" means the Trustee's principal corporate trust office in Los Angeles,
California.
"Principal Payment Date"means a date on which an Installment Payment evidenced by
the Revenue Obligations becomes due and payable.
"Prior Certificates" means the District's Certificates of Participation, Series 2007B,
maturing in the years through , inclusive.
"Prior Trust Agreement" means the Trust Agreement, dated as of December 1, 2007,
by and among the Prior Trustee, the Corporation and the District, as amended and supplemented,
pursuant to which the Prior Certificates were executed and delivered.
"Prior Trustee" means MUFG Union Bank, N.A., formerly known as Union Bank of
California,N.A., as trustee under the Prior Trust Agreement.
"Project" has the meaning ascribed thereto in the recitals hereto.
"Record Date"means, with respect to the interest payable on any Interest Payment Date,
the 15th day of the calendar month immediately preceding such Interest Payment Date, whether
or not such day is a Business Day.
"Revenue Obligations" means the Orange County Sanitation District Wastewater
Refunding Revenue Obligations, Series 2015A, executed and delivered by the Trustee pursuant
hereto, which are certificates of participation, evidencing direct, undivided fractional interests in
the Installment Purchase Agreement and the related Installment Payments, and the interest
thereon.
"S&P" means Standard & Poor's Ratings Services, a Standard & Poor's Financial
Services LLC business, its successors and assigns, except that if such entity shall no longer
perform the functions of a securities rating agency for any reason, the term "S&P" shall be
deemed to refer to any other nationally recognized securities rating agency selected by the
District.
"State"means the State of California.
"Trust Agreement" means this Trust Agreement, dated as of February 1, 2015, by and
among the Trustee, the Corporation and the District, as originally executed and delivered and as
it may from time to time be amended or supplemented in accordance with the provisions hereof.
"Trustee" means U.S. Bank National Association, a national banking association duly
organized and existing under the laws of the United States of America, or any other bank or trust
company which may at any time be substituted in its place as provided in Section 8.02 hereof.
"Written Certificate" and"Written Request"mean (a)with respect to the Corporation,
a written certificate or written request, respectively, signed in the name of the Corporation by an
Authorized Corporation Representative, and (b)with respect to the District, a written certificate
or written request, respectively, signed in the name of the District by an Authorized District
4116361L2 8
Representative. Any such certificate or request may, but need not, be combined in a single
instrument with any other instrument, opinion or representation, and the two or more so
combined shall be read and construed as a single instrument.
Section 1.02. Definitions in Installment Purchase Agreement. Except as otherwise
herein defined and unless the context otherwise requires, the terms defined in the Installment
Purchase Agreement shall for all purposes hereof and of any amendment hereof or supplement
hereto and of any report or other document mentioned herein have the meanings defined therein,
such definitions to be equally applicable to both the singular and plural forms of any of the terms
defined therein. With respect to any defined term which is given a different meaning under this
Trust Agreement than under the Installment Purchase Agreement, as used herein it shall have the
meaning given herein.
Section 1.03. Equal Seeurity. In consideration of the acceptance of the Revenue
Obligations by the Owners, this Trust Agreement shall be deemed to be and shall constitute a
contract between the Trustee and the Owners to secure the full and final payment of the interest
and principal evidenced by the Revenue Obligations which may be executed and delivered
hereunder, subject to each of the agreements, conditions, covenants and terms contained herein;
and all agreements, conditions, covenants and terms contained herein required to be observed or
performed by or on behalf of the Trustee shall be for the equal and proportionate benefit,
protection and security of all Owners without distinction, preference or priority as to security or
otherwise of any Revenue Obligations over any other Revenue Obligations by reason of the
number or date thereof or the time of execution or delivery thereof or for any cause whatsoever,
except as expressly provided herein or therein.
ARTICLE II
TERMS AND CONDITIONS OF REVENUE OBLIGATIONS
Section 2.01. Preparation and Delivery of Revenue Obligations. The Trustee is
hereby authorized, upon the Written Request of the District, to execute and deliver the Revenue
Obligations in the aggregate principal amount of $ evidencing the aggregate
principal amount of the Installment Payments and each evidencing a direct, fractional undivided
interest in the Installment Payments, and the interest thereon. The Installment Payments
evidenced by each Revenue Obligation shall constitute the principal evidenced thereby and the
interest on such Installment Payments shall constitute the interest evidenced thereby. The
Revenue Obligations shall be numbered,with or without prefixes, as directed by the Trustee.
Section 2.02. Denomination, Medium and Dating of Revenue Obligations. The
Revenue Obligations shall be designated "Orange County Sanitation District Wastewater
Refunding Revenue Obligations, Series 2015A" and shall be prepared in the form of fully
registered Revenue Obligations, without coupons, in Authorized Denominations and shall be
payable in lawful money of the United States of America.
The Revenue Obligations shall be dated as of the Closing Date. Each Revenue
Obligation shall evidence interest from the Interest Payment Date next preceding its date of
execution to which interest has been paid in full, unless such date of execution shall be after a
4116361L2 9
Record Date and on or prior to the following Interest Payment Date, in which case such Revenue
Obligation shall evidence interest from such Interest Payment Date, or unless such date of
execution shall be on or prior to July 15, 2015, in which case such Revenue Obligation shall
represent interest from the Closing Date. Notwithstanding, the foregoing, if, as shown by the
records of the Trustee, interest evidenced by the Revenue Obligations shall be in default, each
Revenue Obligation shall evidence interest from the last Interest Payment Date to which such
interest has been paid in full or duly provided for.
Section 2.03. Payment Dates of Revenue Obligations: Interest Computation.
(a)Method and Place of Payment. The principal evidenced by the Revenue Obligations shall
become due and payable, subject to prior prepayment, on February 1 of the years, in the
amounts,and shall evidence interest accruing at the rates per annum set forth below:
Principal Payment Date Principal Interest
(February 1) Component Rate
Except as otherwise provided in the Letter of Representations, payments of interest
evidenced by the Revenue Obligations shall be made to the Owners thereof(as determined at the
close of business on the Record Date next preceding the related Interest Payment Date)by check
or draft of the Trustee mailed to the address of each such Owner as it appears on the registration
books maintained by the Trustee pursuant to Section 2.07 hereof, or to such other address as may
be furnished in writing to the Trustee by each such Owner. Except as otherwise provided in the
Letter of Representations, payment of principal and prepayment premium, if any, evidenced by
the Revenue Obligations, on their stated Principal Payment Dates or on prepayment in whole or
in part prior thereto, shall be made only upon presentation and surrender of the Revenue
Obligations at the Principal Office.
(b) Computation oflnterest. The interest evidenced by the Revenue Obligations shall
be payable on each Interest Payment Date to and including their respective Principal Payment
Dates or prepayment prior thereto, and shall represent the sum of the interest on the Installment
Payments coming due on the Interest Payment Dates in each year. The principal evidenced by
the Revenue Obligations shall be payable on their respective Principal Payment Dates in each
year and shall represent the Installment Payments coming due on the Principal Payment Dates in
each year. Interest evidenced by the Revenue Obligations shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
4116361L2 10
Section 2.04. Form of Revenue Obligations. The Revenue Obligations shall be in
substantially the form of Exhibit A hereto, with necessary or appropriate insertions, omissions
and variations as permitted or required hereby.
Section 2.05. Execution of Revenue Obligations and Replacement Certificates. The
Revenue Obligations shall be executed by the Trustee by the manual signature of an authorized
signatory of the Trustee. The Trustee shall deliver replacement Revenue Obligations in the
manner and as contemplated by this Article. Such replacement Revenue Obligations shall be
executed as herein provided and shall be in Authorized Denominations.
Section 2.06. Transfer and Payment, Exchange or Cancellation of Revenue
Obligations. Each Revenue Obligation is transferable by the Owner thereof, in person or by his
attorney duly authorized in writing, at the Principal Office, on the registration books maintained
by the Trustee pursuant to the provisions of Section 2.07 hereof,upon surrender of such Revenue
Obligation for cancellation accompanied by delivery of a duly executed written instrument of
transfer in a form acceptable to the Trustee. The Tmstee may treat the Owner of any Revenue
Obligation as the absolute owner of such Revenue Obligation for all purposes, whether or not the
principal or interest evidenced by such Revenue Obligation shall be overdue, and the Trustee
shall not be affected by any knowledge or notice to the contrary; and payment of the interest and
principal evidenced by such Revenue Obligation shall be made only to such Owner, which
payments shall be valid and effectual to satisfy and discharge the liability evidenced by such
Revenue Obligation to the extent of the sum or sums so paid.
Whenever any Revenue Obligation shall be surrendered for transfer, the Trustee shall
execute and deliver a new Revenue Obligation or Revenue Obligations evidencing principal in
the same aggregate amount and having the same stated Principal Payment Date. The Trustee
shall require the payment by any Owner requesting such transfer of any tax or other
governmental charge required to be paid with respect to such transfer.
Each Revenue Obligation may be exchanged at the Principal Office for Revenue
Obligations evidencing principal in a like aggregate principal amount having the same stated
Principal Payment Date in such Authorized Denominations as the Owner thereof may request.
The Trustee shall require the payment by the Owner requesting such exchange of any tax or
other governmental charge required to be paid with respect to such exchange.
Whenever in this Trust Agreement provision is made for the cancellation by the Trustee
of any Bonds, the Trustee shall destroy such Bonds and deliver a certificate of such destruction
to the District.
Section 2.07. Revenue Obligation Registration Books. The Trustee shall keep at its
Principal Office sufficient books for the registration and transfer of the Revenue Obligations,
which books shall be available for inspection and copying by the District at reasonable hours and
under reasonable conditions; and upon presentation for such purpose the Trustee shall, under
such reasonable regulations as it may prescribe, register or transfer the Revenue Obligations on
such books as hereinabove provided.
4116361L2 11
Section 2.08. Temporary Revenue Obligations. The Revenue Obligations may be
initially delivered in temporary form exchangeable for definitive Revenue Obligations when
ready for delivery, which temporary Revenue Obligations shall be printed, lithographed or
typewritten, shall be of such denominations as may be determined by the Trustee, shall be in
fully registered form and shall contain such reference to any of the provisions hereof as may be
appropriate. Every temporary Revenue Obligation shall be executed and delivered by the
Trustee upon the same conditions and terms and in substantially the same manner as definitive
Revenue Obligations. If the Trustee executes and delivers temporary Revenue Obligations, it
shall prepare and execute definitive Revenue Obligations without delay, and thereupon the
temporary Revenue Obligations may be surrendered at the Principal Office in exchange for such
definitive Revenue Obligations, and until so exchanged such temporary Revenue Obligations
shall be entitled to the same benefits hereunder as definitive Revenue Obligations executed and
delivered hereunder.
Section 2.09. Revenue ObBeations Mutilated, Lost, Destroyed or Stolen. If any
Revenue Obligation shall become mutilated, the Trustee, at the expense of the Owner thereof,
shall execute and deliver a new Revenue Obligation evidencing a like principal amount and
having the same stated Principal Payment Date and number in exchange and substitution for the
Revenue Obligation so mutilated, but only upon surrender to the Trustee of the Revenue
Obligation so mutilated. Every mutilated Revenue Obligation so surrendered to the Trustee shall
be canceled by it. If any Revenue Obligation shall be lost, destroyed or stolen, evidence of such
loss, destruction or theft may be submitted to the Trustee, and if such evidence is satisfactory to
the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense
of the Owner thereof, shall execute and deliver a new Revenue Obligation evidencing a like
principal amount and having the same stated Principal Payment Date, numbered as the Trustee
shall determine, in lieu of and in substitution for the Revenue Obligation so lost, destroyed or
stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing
each new Revenue Obligation executed and delivered by it under this Section and of the
expenses which may be incurred by it under this Section. Any Revenue Obligation executed and
delivered under the provisions of this Section in lieu of any Revenue Obligation alleged to be
lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with
all other Revenue Obligations executed and delivered hereunder, and the Trustee shall not be
required to treat both the original Revenue Obligation and any replacement Revenue Obligation
as being Outstanding for the purpose of determining the amount of Revenue Obligations which
may be executed and delivered hereunder or for the purpose of determining any percentage of
Revenue Obligations Outstanding hereunder, but both the original and replacement Revenue
Obligation shall be treated as one and the same. Notwithstanding any other provision of this
Section, in lieu of executing and delivering a new Revenue Obligation for a Revenue Obligation
which has been lost, destroyed or stolen and which evidences principal that is then payable, the
Trustee may make payment of such Revenue Obligation to the Owner thereof if so instructed by
the District.
Section 2.10. Book-Entry System. (a) The Revenue Obligations shall be initially
executed and delivered as Book-Entry Certificates, and the Revenue Obligations for each stated
Principal Payment Date shall be in the form of a separate single fully registered Revenue
Obligation (which may be typewritten). Upon initial execution and delivery, the ownership of
each Revenue Obligation shall be registered in the registration books maintained by the Trustee
411636111 12
in the name of the Nominee, as nominee of the Depository. Payment of principal or interest
evidenced by any Book-Entry Certificate registered in the name of the Nominee shall be made
on the applicable Interest Payment Date by wire transfer of New York clearing house or
equivalent next day funds or by wire transfer of same day funds to the account of the Nominee.
Such payments shall be made to the Nominee at the address which is, on the Record Date, shown
for the Nominee in the registration books maintained by the Trustee.
(b) With respect to Book-Entry Certificates, the District, the Corporation and the
Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of
which such a Participant holds an interest in such Book-Entry Certificates. Without limiting the
immediately preceding sentence, the District, the Corporation and the Trustee shall have no
responsibility or obligation with respect to (i)the accuracy of the records of the Depository, the
Nominee or any Participant with respect to any ownership interest in Book-Entry Certificates,
(ii)the delivery to any Participant or any other Person, other than an Owner as shown in the
registration books maintained by the Trustee, of any notice with respect to Book-Entry
Certificates, including any notice of prepayment, (iii)the selection by the Depository and its
Participants of the beneficial interests in Book-Entry Certificates to be prepaid in the event
Revenue Obligations are prepaid in part, (iv) the payment to any Participant or any other Person,
other than an Owner as shown in the registration books maintained by the Trustee, of any
amount with respect to principal, premium, if any, or interest evidenced by Book-Entry
Certificates, or(v)any consent given or other action taken by the Depository as Owner.
(c) The District, the Corporation and the Trustee may treat and consider the Person in
whose name each Book-Entry Certificate is registered in the registration books maintained by the
Trustee as the absolute Owner of such Book-Entry Certificate for the purpose of payment of
principal, prepayment premium, if any, and interest evidenced by such Revenue Obligation, for
the purpose of selecting any Revenue Obligations, or portions thereof, to be prepaid, for the
purpose of giving notices of prepayment and other matters with respect to such Revenue
Obligation, for the purpose of registering transfers with respect to such Revenue Obligation, for
the purpose of obtaining any consent or other action to be taken by Owners and for all other
purposes whatsoever, and the District, the Corporation and the Trustee shall not be affected by
any notice to the contrary.
(d) Reserved.
(e) The Trustee shall pay all principal, premium, if any, and interest evidenced by the
Revenue Obligations to the respective Owner, as shown in the registration books maintained by
the Trustee, or his respective attorney duly authorized in writing, and all such payments shall be
valid and effective to fully satisfy and discharge the obligations with respect to payment of
principal, premium, if any, and interest evidenced by the Revenue Obligations to the extent of
the sum or sums so paid. No Person other than an Owner, as shown in the registration books
maintained by the Trustee, shall receive a Revenue Obligation evidencing principal, premium, if
any, and interest evidenced by the Revenue Obligations. Upon delivery by the Depository to the
Owners, the Trustee and the District of written notice to the effect that the Depository has
determined to substitute a new nominee in place of the Nominee, and subject to the provisions
herein with respect to Record Dates, the word Nominee in this Trust Agreement shall refer to
such nominee of the Depository.
41163611.2 13
(f) To qualify the Book-Entry Certificates for the Depository's book-entry system,
the District shall execute and deliver to the Depository a Letter of Representations. The
execution and delivery of a Letter of Representations shall not in any way impose upon the
Corporation,the District or the Trustee any obligation whatsoever with respect to Persons having
interests in such Book-Entry Certificates other than the Owners, as shown on the registration
books maintained by the Trustee. Such Letter of Representations may provide the time, form,
content and manner of transmission, of notices to the Depository. In addition to the execution
and delivery of a Letter of Representations by the District, the District, the Corporation and the
Trustee shall take such other actions, not inconsistent with this Trust Agreement, as are
reasonably necessary to qualify Book-Entry Certificates for the Depository's book-entry
program.
(g) If the District determines that it is in the best interests of the Beneficial Owners
that they be able to obtain certificated Revenue Obligations and that such Revenue Obligations
should therefore be made available and notifies the Depository and the Trustee of such
determination, the Depository will notify the Participants of the availability through the
Depository of certificated Revenue Obligations. In such event, the Trustee shall transfer and
exchange certificated Revenue Obligations as requested by the Depository and any other Owners
in appropriate amounts. In the event (i)the Depository determines not to continue to act as
securities depository for Book-Entry Certificates, or(ii)the Depository shall no longer so act and
gives notice to the Trustee of such determination, then the District shall discontinue the Book-
Entry system with the Depository. If the District determines to replace the Depository with
another qualified securities depository, the District shall prepare or direct the preparation of a
new single, separate, fully registered Revenue Obligation for each stated Principal Payment Date
of such Book-Entry Certificates, registered in the name of such successor or substitute qualified
securities depository or its nominee. If the District fails to identify another qualified securities
depository to replace the Depository, then the Revenue Obligations shall no longer be restricted
to being registered in the registration books maintained by the Trustee in the name of the
Nominee, but shall be registered in whatever name or names the Owners transferring or
exchanging such Revenue Obligations shall designate, in accordance with the provisions of
Sections 2.06 and 2.09 hereof. Whenever the Depository requests the District to do so, the
District will cooperate with the Depository in taking appropriate action after reasonable notice
(i)to make available one or more separate certificates evidencing the Book-Entry Certificates to
any Participant having Book-Entry Certificates credited to its account with the Depository, and
(ii)to arrange for another securities depository to maintain custody of certificates evidencing the
Book-Entry Certificates.
(h) Notwithstanding any other provision of this Trust Agreement to the contrary, if
DTC is the sole Owner of the Revenue Obligations, so long as any Book-Entry Certificate is
registered in the name of the Nominee, all payments of principal, premium, if any, and interest
evidenced by such Revenue Obligation and all notices with respect to such Revenue Obligation
shall be made and given, respectively, as provided in the Letter of Representations or as
otherwise instructed by the Depository.
(i) In connection with any notice or other communication to be provided to Owners
pursuant to the Trust Agreement by the District, the Corporation or the Trustee, with respect to
any consent or other action to be taken by Owners, the Trustee shall establish a record date for
411636111 14
such consent or other action and give the Depository notice of such record date not less than 15
calendar days in advance of such record date to the extent possible. Notice to the Depository
shall be given only when DTC is the sole Owner of the Revenue Obligations.
ARTICLE III
PROCEEDS OF REVENUE OBLIGATIONS
Section 3.01. Delivery of Revenue Obligations. The Trustee is hereby authorized to
execute the Revenue Obligations and deliver the Revenue Obligations to the original purchaser
thereof upon receipt of a Written Request of the District and upon receipt of the net proceeds of
sale thereof.
Section 3.02. Deposit of Proceeds of Revenue Obligations. The net proceeds received
by the Trustee from the sale of the Revenue Obligations in the amount of$
(which amount includes the security deposit for the Revenue Obligations in the amount of
$ on deposit with the Trustee) shall be deposited or transferred by the Trustee
as follows:
(a) the Trustee shall deposit in the Costs of Issuance Fund the amount of
$ ; and
(b) the Trustee shall transfer to the Escrow Agent for deposit in the Escrow Fund
established under the Escrow Agreement the amount of$ from the proceeds of
the Revenue Obligations, to apply, together with other available monies released from the Prior
Trust Agreement, to the payment and prepayment of a portion of the installment payments
related to the Prior Certificates as provided in the Escrow Agreement.
Following the above transfers and deposits, the Proceeds Fund shall be closed.
Section 3.03. Costs of Issuance Fund. The Trustee shall establish and maintain a
separate special fund to be held by the Trustee known as the Costs of Issuance Fund. There shall
be deposited in the Costs of Issuance Fund on the Closing Date the amount required to be
deposited therein pursuant to Section 3.02 hereof. The Trustee shall disburse moneys from the
Costs of Issuance Fund on such dates and in such amounts as are necessary to pay Costs of
Issuance, in each case upon the Written Request of the District stating the Person to whom
payment is to be made, the amount to be paid, the purpose for which the obligation was incurred
and that such payment is a proper charge against the Costs of Issuance Fund. On the date that is
six months after the Closing Date, the Trustee shall transfer any amounts then remaining in the
Costs of Issuance Fund to the Installment Payment Fund. Upon such transfer, the Costs of
Issuance Fund shall be closed.
ARTICLE IV
PREPAYMENT OF REVENUE OBLIGATIONS
Section 4.01. Optional Prepayment. The Revenue Obligations with stated Principal
Payment Dates prior to February 1, 2026 are not subject to optional prepayment prior to their
4116361L2 15
stated Principal Payment Dates. The Revenue Obligations with stated Principal Payment Dates
on or after February 1, 2026 are subject to optional prepayment prior to their stated Principal
Payment Dates, on any date on or after February 1, 2025, in whole or in part, in Authorized
Denominations, from and to the extent of prepaid Installment Payments paid pursuant to
Section 4.01 of the Installment Purchase Agreement or from any other source of available funds,
any such prepayment to be at a price equal to the principal evidenced by the Revenue
Obligations to be prepaid, plus accrued interest evidenced thereby to the date fixed for
prepayment,without premium.
Section 4.02. Reserved.
Section 4.03. Selection of Revenue Obligations for Optional Prepayment. Whenever
less than all the Outstanding Revenue Obligations are to be prepaid on any one date pursuant to
Section 4.01 hereof, with respect to optional prepayment of Revenue Obligations, the Trustee
shall select the Revenue Obligations to be prepaid among Revenue Obligations with different
Principal Payment Dates as directed in a Written Request of the District. Whenever less than all
the Outstanding Revenue Obligations with the same stated Principal Payment Date are to be
prepaid on any one date pursuant to Section 4.01 hereof, the Trustee shall select the Revenue
Obligations with such Principal Payment Date to be prepaid as directed in a Written Request of
the District, or at the discretion of the District by lot in any manner that the Trustee deems fair
and appropriate, which decision shall be final and binding upon the District and the Owners. The
Trustee shall promptly notify the District in writing of the numbers of the Revenue Obligations
so selected for prepayment on such date. For purposes of such selection, any Revenue Obligation
may be prepaid in part in Authorized Denominations.
Section 4.04. Notice of Prepayment. When prepayment of Revenue Obligations is
authorized pursuant to Section 4.01, the Trustee shall give notice, at the expense of the District,
of the prepayment of the Revenue Obligations. The notice of prepayment shall specify (a) the
Revenue Obligations or designated portions thereof(in the case of prepayment of the Revenue
Obligations in part but not in whole) which are to be prepaid, (b) the date of prepayment, (c)the
place or places where the prepayment will be made, including the time and address of any
paying agent, (d) the prepayment price, (e)the CUSIP numbers assigned to the Revenue
Obligations to be prepaid, (t)the numbers of the Revenue Obligations to be prepaid in whole or
in part and, in the case of any Revenue Obligation to be prepaid in part only, the principal
evidenced by such Revenue Obligation to be prepaid, and (g)the interest rate and stated
Principal Payment Date of each Revenue Obligation to be prepaid in whole or in part. Such
notice of prepayment shall further state that on the specified date there shall become due and
payable upon each Revenue Obligation or portion thereof being prepaid the prepayment price
and that from and after such date interest evidenced thereby shall cease to accrue and be payable.
With respect to any notice of prepayment of Revenue Obligations pursuant to Section 4.01
hereof, unless at the time such notice is given the Revenue Obligations to be prepaid shall be
deemed to have been paid within the meaning of Section 10.01 hereof, such notice shall state that
such prepayment is conditional upon receipt by the Trustee, on or prior to the date fixed for such
prepayment, of moneys sufficient to pay for the prepayment price of the Revenue Obligations to
be prepaid, and that if such moneys shall not have been so received said notice shall be of no
force and effect and the District shall not be required to prepay such Revenue Obligations. If a
notice of prepayment of Revenue Obligations contains such a condition and such moneys are not
4116361L2 16
so received, the prepayment of Revenue Obligations as described in the conditional notice of
prepayment shall not be made and the Trustee shall, within a reasonable time after the date on
which such prepayment was to occur, give notice to the persons and in the manner in which the
notice of prepayment was given,that such moneys were not so received and that there shall be no
prepayment of Revenue Obligations pursuant to such notice of prepayment.
The Trustee shall, at least 20 but not more than 60 days prior to any prepayment date,
give notice of prepayment to the respective Owners of Revenue Obligations designated for
prepayment by first-class mail, postage prepaid, at their addresses appearing on the registration
books maintained by the Trustee as of the close of business on the day before such notice of
prepayment is given.
The actual receipt by the Owner of any notice of such prepayment shall not be a
condition precedent to prepayment, and neither failure to receive such notice nor any defect
therein shall affect the validity of the proceedings for the prepayment of such Revenue
Obligations or the cessation of interest evidenced thereby on the date fixed for prepayment.
A certificate by the Trustee that notice of prepayment has been given to Owners as herein
provided shall be conclusive as against all parties, and no Owner whose Revenue Obligation is
called for prepayment may object thereto or object to the cessation of interest evidenced thereby
on the fixed prepayment date by any claim or showing that said Owner failed to actually receive
such notice of prepayment.
Section 4.05. Partial Prepayment of Revenue Obligations. Upon surrender of any
Revenue Obligation prepaid in part only, the Trustee shall execute and deliver to the Owner
thereof a new Revenue Obligation or Revenue Obligations evidencing the unprepaid principal
with respect to the Revenue Obligation surrendered.
Section 4.06. Effect of Prepayment. If notice of prepayment has been duly given as
aforesaid and moneys for the payment of the prepayment price of the Revenue Obligations to be
prepaid are held by the Trustee, then on the prepayment date designated in such notice, the
Revenue Obligations so called for prepayment shall become payable at the prepayment price
specified in such notice; and from and after the date so designated, interest evidenced by the
Revenue Obligations so called for prepayment shall cease to accrue, such Revenue Obligations
shall cease to be entitled to any benefit or security hereunder and the Owners of such Revenue
Obligations shall have no rights in respect thereof except to receive payment of the prepayment
price thereof The Trustee shall, upon surrender for payment of any of the Revenue Obligations
to be prepaid, pay such Revenue Obligations at the prepayment price thereof, and such moneys
shall be pledged to such payment. All Revenue Obligations prepaid pursuant to the provisions of
this Article shall be canceled by the Trustee and shall not be redelivered.
ARTICLE V
ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS
Section 5.01. Assignment and Pledge. The Corporation hereby transfers, conveys and
assigns to the Trustee, for the benefit of the Owners, all of the Corporation's rights, title and
4116361L2 17
interest in and to the Installment Purchase Agreement (excepfing its rights to indemnification
thereunder), including the right to receive Installment Payments, and the interest thereon, from
the District and the right to exercise any remedies provided therein in the event of a default by
the District thereunder. The Trustee hereby accepts said transfer, conveyance and assignment,
solely in its capacity as Trustee, for the benefit of the Owners, subject to the provisions of this
Trust Agreement. All Installment Payments, and the interest thereon, shall be paid directly by
the District to the Trustee, and if received by the Corporation at any time shall be deposited by
the Corporation with the Trustee immediately upon the receipt thereof.
To secure the respective rights of the Owners to the payments required to be made thereto
as provided herein, the Corporation and the District hereby irrevocably pledge to the Trustee, for
the benefit of the Owners, all of their right, title and interest, if any, in and to all amounts on
deposit from time to time in the funds and accounts established hereunder. This pledge shall
constitute a first lien on the amounts on deposit in such funds and accounts.
Section 5.02. Installment Payment Fund. (a)The Trustee shall establish and maintain
the Installment Payment Fund until all required Installment Payments, and the interest thereon,
are paid in full pursuant to the Installment Purchase Agreement and until the first date upon
which the Revenue Obligations are no longer Outstanding. The Trustee shall deposit in the
Installment Payment Fund all Installment Payments, and the interest thereon, paid by the District
and received by the Trustee. The moneys in the Installment Payment Fund shall be held in trust
by the Trustee for the benefit of the Owners and shall be used and disbursed only for the
purposes and uses herein authorized.
(b) The Trustee shall transfer the amounts on deposit in the Installment Payment
Fund, at the times and in the manner hereinafter provided, to the following respective accounts
within the Installment Payment Fund, each of which the Trustee hereby agrees to establish and
maintain until all required Installment Payments, and the interest thereon, are paid in full
pursuant to the Installment Purchase Agreement and until the first date upon which the Revenue
Obligations are no longer Outstanding. The moneys in each of such accounts shall be held in
trust by the Trustee for the benefit of the Owners and shall be used and disbursed only for the
purposes and uses herein authorized.
(i) Interest Account. The Trustee, on each Interest Payment Date, shall
deposit in the Interest Account that amount of moneys representing the interest on the
Installment Payments coming due on such Interest Payment Date. Moneys in the Interest
Account shall be used by the Trustee for the purpose of paying the interest evidenced by
the Revenue Obligations when due and payable.
(ii) Principal Account. The Trustee, on each Principal Payment Date, shall
deposit in the Principal Account that amount of moneys representing the Installment
Payments coming due on such Principal Payment Date. Moneys in the Principal Account
shall be used by the Trustee for the purpose of paying the principal evidenced by the
Revenue Obligations when due and payable.
(iii) Prepayment Account. The Trustee, on the prepayment date specified in
the Written Request of the District filed with the Trustee at the time that any prepaid
4116361L2 18
Installment Payment is paid to the Trustee pursuant to the Installment Purchase
Agreement, shall deposit in the Prepayment Account that amount of moneys representing
such prepaid Installment Payment, the accrued interest thereon to the prepayment date
and any premium payable with respect thereto. The Trustee shall deposit in the
Prepayment Account any other amounts made available by the District that the District,
pursuant to a Written Request of the District, instructs the Trustee to apply to the
prepayment of Revenue Obligations pursuant to Section 4.01 hereof. Moneys in the
Prepayment Account shall be used by the Trustee for the purpose of paying the interest,
premium, if any, and principal evidenced by the Revenue Obligations to be prepaid
pursuant to Section 4.01 hereof.
Section 5.03. Reserved.
Section 5.04. Investment of Moneys. Except as otherwise provided herein, all moneys
in any of the funds or accounts established pursuant to this Trust Agreement shall be invested by
the Trustee solely in Permitted Investments, as directed by the District pursuant to a Written
Request of the District at least two (2) Business Days prior to the making of such investment.
Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments
maturing not later than the date on which it is estimated that such moneys will be required for the
purposes specified in this Trust Agreement. Absent timely written direction from the District,
the Trustee shall invest any funds held by it in Permitted Investments described in clause (10) of
the definition thereof. Permitted Investments that are registerable securities shall be registered in
the name of the Trustee. All interest, profits and other income received from the investment of
moneys in any fund or account established pursuant to this Trust Agreement shall be retained
therein.
Permitted Investments acquired as an investment of moneys in any fund or account
established under this Trust Agreement shall be credited to such fund or account. For the
purpose of determining the amount in any fund, all Permitted Investments credited to such fund
shall be valued by the Trustee at the market value thereof, such valuation to be performed not
less frequently than semiannually on or before each January 15 and July 15.
The Trustee or an affiliate may act as principal or agent in the making or disposing of any
investment. The Trustee shall sell or present for redemption any Permitted Investment whenever
it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or
disbursement from the fund or account to which such Permitted Investment is credited, and the
Trustee shall not be liable or responsible for any loss resulting from any investment made or sold
pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any
of the funds and accounts established hereunder.
The Trustee is hereby authorized, in making or disposing of any investment permitted by
this Section, to deal with itself (in its individual capacity) or with any one or more of its
affiliates, whether or not such affiliate is acting as an agent of the Trustee or for any third Person
or dealing as principal for its own account
Section 5.05. Brokerase Confirmations. The Trustee shall furnish the District periodic
cash transaction statements which include detail for all investment transactions effected by the
4116361 L2 19
Trustee or brokers selected by the District. Upon the District's election and request, the Trustee
shall provide the District online access to such statements. The District waives the right to
receive brokerage confirmations of securities transactions effected by the Trustee as they
occur,to the extent permitted by law. The District further understands that trade confirmations
for securities transactions effected by the Trustee will be available upon request and at no
additional cost and other trade confirmations may be obtained from the applicable broker
ARTICLE VI
COVENANTS
Section 6.01. Compliance with Trust Agreement. The Trustee will not execute or
deliver any Revenue Obligations in any manner other than in accordance with the provisions
hereof, and the Corporation and the District will not suffer or permit any default by them to
occur hereunder, but will faithfully comply with, keep, observe and perform all the agreements,
conditions, covenants and terms hereof required to be complied with, kept, observed and
performed by them.
Section 6.02. Compliance with Installment Purchase Agreement. The Corporation
and the District will faithfully comply with, keep, observe and perform all the agreements,
conditions, covenants and terms contained in the Installment Purchase Agreement required to be
complied with, kept, observed and performed by them and, together with the Trustee, will
enforce the Installment Purchase Agreement against the other party thereto in accordance with its
terms.
Section 6.03. Compliance with Master Agreement. The Corporation and the District
will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants
and terms contained in the Master Agreement required to be complied with, kept, observed and
performed by them and,together with the Trustee,will enforce the Master Agreement against the
other party thereto in accordance with its terms.
Section 6.04. Observance of Laws and Regulations. The Corporation and the District
will faithfully comply with, keep, observe and perform all valid and lawful obligations or
regulations now or hereafter imposed on them by contract, or prescribed by any law of the
United States of America or of the State, or by any officer, board or commission having
jurisdiction or control, as a condition of the continued enjoyment of each and every franchise,
right or privilege now owned or hereafter acquired by them, including their right to exist and
carry on their respective businesses,to the end that such franchises, rights and privileges shall be
maintained and preserved and shall not become abandoned, forfeited or in any manner impaired.
Section 6.05. Other Liens. None of the Trustee, the Corporation or the District shall
create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds
or accounts created hereunder, other than the pledge and lien hereof.
Section 6.06. Prosecution and Defense of Suits. The District will defend against every
action, suit or other proceeding at any time brought against the Trustee or any Owner upon any
claim arising out of the receipt, deposit or disbursement of any of the Installment Payments, or
4116361 L2 20
the interest thereon, or involving the rights of the Trustee or any Owner hereunder; provided,
however, that the Trustee or any Owner at its or his election may appear in and defend any such
action, suit or other proceeding.
Section 6.07. Accounting Records and Statements. The Trustee will keep proper
accounting records in which complete and correct entries shall be made of all transactions made
by the Trustee relating to the receipt, deposit and disbursement of the Installment Payments, and
the interest thereon, and such accounting records shall be available for inspection by the
Corporation and the District at reasonable hours and under reasonable conditions. The Trustee
shall not be obligated to provide an accounting for any fund or account that (a)has a balance of
$0.00 and (b) has not had any activity since the last reporting date. The Trustee will, upon
written request, make copies of the foregoing available to any Owner (at the expense of such
Owner).
Section 6.08. Tax Covenants.
(a) Special Definitions. When used in this Section, the following terms shall have the
following meanings:
"Bond Counsel" means Fulbright& Jaworski LLP or any other counsel of recognized
national standing in the field of law relating to municipal bonds, appointed and paid by the
District.
"Computation Date" has the meaning set forth in section 1.148-1(b) of the Tax
Regulations.
"Computation Period' means, initially, that period commencing on the date of the
execution and delivery of the Revenue Obligations and concluding on the initial Computation
Date and, thereafter, each period commencing on the day next following a Computation Date and
concluding on the immediately succeeding Computation Date.
"Gross Proceeds" of any issue of governmental obligations means any proceeds as
defined in section 1.148-1(b) of the Tax Regulations (referring to sales, investment and
transferred proceeds) of that issue, and any replacement proceeds as defined in section 1.148-
1(c)of the Tax Regulations, of that issue.
"Investment"has the meaning set forth in section 1.148-1(b)of the Tax Regulations.
"Nonpurpose Investment"means any investment property, as defined in section 148(b) of
the Code, in which Gross Proceeds of an issue are invested and that is not acquired to carry out
the governmental purposes of that issue.
"Opinion of Bond Counser' means a written opinion of Fulbright&Jaworski LLP or any
other counsel of recognized national standing in the field of law relating to municipal bonds,
appointed and paid by the District.
au636n2 21
"Prior Issue" shall refer to the Prior Certificates (but in the case of any of the foregoing
executed and delivered for multiple purposes, only to the portion thereof allocable pursuant to
section 1.148-9(b)(4) of the Tax Regulations to other than refunding purposes).
"Proceeds," with respect to an issue of governmental obligations, has the meaning set
forth in has the meaning set forth in section 1.148-1(b) of the Tax Regulations (referring to sales,
investment and transferred proceeds, but not replacement proceeds).
"Rebate Amount"has the meaning set forth in section 1.148-1(b) of the Tax Regulations.
"Tax Regulations" means the United States Treasury Regulations promulgated pursuant
to sections 103 and 141 through 150 of the Code.
"Yield" of (i) any Investment has the meaning set forth in section 1.148-5 of the Tax
Regulations and (ii) in respect of the Revenue Obligations has the meaning set forth in
section 1.148-4 of the Tax Regulations.
(a) Exclusion of Interest from Gross Income. The District will take all actions
necessary to establish and maintain the exclusion pursuant to section 103(a) of the Code of
interest on the Revenue Obligations from the gross income of the owners thereof for federal
income tax purposes, and will not use, permit the use of, or omit to use Gross Proceeds of the
Revenue Obligations or any other amounts (or any property the acquisition, construction or
improvement of which is to be refinanced directly or indirectly with Gross Proceeds) in a manner
that if made or omitted, respectively, would cause the interest on any Revenue Obligation to fail
to be excluded pursuant to section 103(a) of the Code from the gross income of the owners
thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless
and until the Trustee receives a written Opinion of Bond Counsel to the effect that failure to
comply with such covenant will not adversely affect the exclusion pursuant to section 103(a) of
the Code of interest on any Revenue Obligation from the gross income of the owner thereof, the
District shall comply with this covenant and each of the specific covenants in this Section.
(b) No Private Use or Private Payments. Except as would not cause any Revenue
Obligation to become a "private activity bond" within the meaning of section 141 of the Code
and the Tax Regulations and rulings thereunder, the District shall at all times prior to the
payment and cancellation of the last of the Revenue Obligations to be retired:
(i) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Revenue Obligations and not use or permit the use
of such Gross Proceeds (including all contractual arrangements with terns different than
those applicable to the general public) or any property acquired, constructed or improved
with such Gross Proceeds or the Gross Proceeds of the Prior Issue in any activity carried
on by any person or entity (including the United States or any agency, department and
instrumentality thereof) other than a state or local government, unless such use is solely
as a member of the general public; and
(ii) does not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the Revenue
4/1636111 22
Obligations or of the Prior Issue, or any property the acquisition, construction or
improvement of which is to be financed or refinanced directly or indirectly with such
Gross Proceeds, other than taxes of general application within the jurisdiction of the
District or interest earned on investments acquired with such Gross Proceeds pending
application for their intended purposes.
(c) No Private Loan. Except as would not cause any Revenue Obligation to become
a"private activity bond"within the meaning of section 141 of the Code and the Tax Regulations
and rulings thereunder,the District shall not use of Gross Proceeds of the Revenue Obligations to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be `loaned" to a
person or entity if. (i) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction that creates a debt for federal income tax
purposes; (ii) capacity in or service from such property is committed to such person or entity
under a take-or-pay, output or similar contract or arrangement; or (iii) indirect benefits of such
Gross Proceeds, or burdens and benefits of ownership of any property acquired, constructed or
improved with such Gross Proceeds, are otherwise transferred in a transaction that is the
economic equivalent of a loan. For purposes of this covenant, the District will treat any
transaction constituting a loan of Gross Proceeds of the Prior Issue as resulting in a loan of Gross
Proceeds of the Revenue Obligations.
(d) Not to Invest at Higher Yield. Except as would not cause any Revenue
Obligation to become an "arbitrage bond"within the meaning of section 148 of the Code and the
Tax Regulations and rulings thereunder, the District will not, at any time prior to the final
cancellation of the last Revenue Obligation to be retired, directly or indirectly invest Gross
Proceeds of the Revenue Obligations in any Investment, if as a result of that investment the yield
of any Investment acquired with Gross Proceeds of the Revenue Obligations, whether then held
or previously disposed of, would materially exceed the yield of the Revenue Obligations within
the meaning of said section 148.
(e) Not Federally Guaranteed. Except to the extent such action or failure to act
would not pursuant to section 149(b) of the Code and the Tax Regulations and rulings
thereunder, adversely affect the exclusion pursuant to section 103(a) of interest on the Revenue
Obligations from the gross income of the owners thereof for federal income tax purposes, the
District will not take or omit to take any action that would cause any Revenue Obligation to be
"federally guaranteed" within the meaning of section 149(b) of the Code and the Tax
Regulations and rulings thereunder.
(f) Information Report. The District will timely file any information necessary to the
exclusion pursuant to section 103(a) of the Code of interest on the Revenue Obligations required
by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other
form and in such place as the Secretary of the Treasury may prescribe.
(g) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Tax Regulations and rulings thereunder, the District will not at any time prior
to the final cancellation of the last of the Revenue Obligations to be retired, enter into any
transaction that reduces the amount required to be paid to the United States pursuant to
4116361 L2 23
section 148(f) of the Code because such transaction results in a smaller profit or a larger loss
than would have resulted if the transaction had been at arm's length and had the yield on the
Revenue Obligations not been relevant to either party.
(h) Revenue Obligations Satisfy Section 149(g). The District represents that neither
the Prior Issue nor the Revenue Obligations are or will become "hedge bonds" within the
meaning of section 149(g) of the Code. Without limitation of the foregoing, with respect to the
Prior Issue, (i)(A) on the date of issuance of that issue the District reasonably expected (based
upon its own knowledge and upon representations made by other governmental persons upon the
issuance of those obligations) that within the three-year period commencing on such date no less
than 85% of the spendable proceeds of that issue would be expended for the governmental
purposes thereof and (B) the District believes and represents that at no time has more than 50%
of the proceeds of that issue been invested in Nonpurpose Investments having a substantially
guaranteed yield for a period of four years or more, and with respect to the application of
Proceeds of the Revenue Obligations other than for refunding purposes, (ii)(A) the District will
not deliver the Revenue Obligations unless on the date of the issuance of the Revenue
Obligations it reasonably expects that within the three-year period commencing on such date of
issuance at least 85% of such spendable proceeds of the Revenue Obligations will be expended
for the governmental purpose of the Revenue Obligations and(B) at no time will more than 50%
of such spendable proceeds of the Revenue Obligations be invested in Nonpurpose Investments
having a substantially guaranteed yield for a period of four years or more.
(i) Elections. The District hereby directs and authorizes any Authorized
Representative to make elections permitted or required pursuant to the provisions of the Code or
the Tax Regulations, as such Authorized Representative (after consultation with Bond Counsel)
deems necessary or appropriate in connection with the Revenue Obligations, in the Tax
Certificate (as defined below)or similar or other appropriate certificate, form or document.
0) Tax Certificate. The District agrees to execute and deliver in connection with the
execution and delivery of the Revenue Obligations a Tax Certificate as to Arbitrage and the
Provisions of Sections 141-150 of the Internal Revenue Code of 1986, or similar document
containing additional representations and covenants pertaining to the exclusion of interest with
respect to the Revenue Obligations from the gross income of the owners thereof for federal
income tax purposes (the "Tax Certificate"), which representations and covenants are
incorporated as though expressly set forth herein.
Section 6.09. Continuing Disclosure. The District will comply with and carry out all of
the provisions of the Continuing Disclosure Agreement applicable to it. Notwithstanding any
other provision of this Trust Agreement, failure of the District to comply with the Continuing
Disclosure Agreement shall not be considered an Event of Default; provided, however, the
Trustee at the request of any Participating Underwriter or the Owners of at least 25% aggregate
principal amount of Outstanding Revenue Obligations and upon being indemnified to its
reasonable satisfaction, shall, or any Owner or Beneficial Owner of Revenue Obligations may
take such actions as may be necessary and appropriate to compel performance, including seeking
mandate or specific performance by court order. The Trustee is authorized and directed to
execute the acceptance and acknowledgement of the Continuing Disclosure Agreement.
4116361 L2 24
Section 6.10. Further Assurances. The District will promptly execute and deliver or
cause to be executed and delivered all such other and further assurances, documents or
instruments and promptly do or cause to be done all such other and further things as may be
necessary or reasonably required in order to carry out the purposes and intentions of this Trust
Agreement and for preserving and protecting the rights and interests of the Owners.
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01. Action upon Event of Default. An Event of Default under the Installment
Purchase Agreement shall constitute an Event of Default hereunder and an Event of Default
under the Master Agreement shall constitute an Event of Default hereunder. The Trustee may
give notice, as assignee of the Corporation, of an Event of Default under the Installment
Purchase Agreement to the District, and shall do so if directed to do so by the Owners of not less
than 5%of the aggregate principal evidenced by Revenue Obligations then Outstanding. In each
and every case during the continuance of an Event of Default, the Trustee may and, at the
direction of the Owners of not less than a majority of the aggregate principal evidenced by
Revenue Obligations then Outstanding, shall, upon notice in writing to the District and the
Corporation (a)exercise any of the remedies granted to the Corporation under the Installment
Purchase Agreement, (b) exercise any of the remedies granted to the Tmstee under the Master
Agreement, and (c)take whatever action at law or in equity may appear necessary or desirable to
enforce its rights pursuant to this Trust Agreement, the Installment Purchase Agreement or the
Master Agreement or to protect and enforce any of the rights vested in the Trustee or the Owners
by this Trust Agreement, the Revenue Obligations, the Installment Purchase Agreement or the
Master Agreement, either at law or in equity or in banlauptcy or otherwise, whether for the
specific enforcement of any covenant or agreement or for the enforcement of any other legal or
equitable right, including any one or more of the remedies set forth in Section 7.02 hereof.
Section 7.02. Other Remedies of the Trustee. Subject to the provisions of Section 7.01
hereof, the Trustee shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce
its rights against the Corporation or the District or any member, director, officer or employee
thereof, and to compel the Corporation or the District or any such member, director, officer or
employee to perform or carry out its or his or her duties under law and the agreements and
covenants required to be performed by it or him or her contained herein;
(b) by suit in equity to enjoin any acts or things which we unlawful or violate the
rights of the Trustee; or
(c) by suit in equity upon the happening of any Event of Default hereunder to require
the Corporation and the District to account as the trustee of an express trust.
Section 7.03. Non-Waiver. A waiver of any default or breach of duty or contract by the
Trustee or the Owners shall not affect any subsequent default or breach of duty or contract or
impair any rights or remedies on any such subsequent default or breach of duty or contract. No
4116361 L2 25
delay or omission by the Trustee or the Owners to exercise any right or remedy accruing upon
any default or breach of duty or contract shall impair any such right or remedy or shall be
construed to be a waiver of any such default or breach of duty or contract or an acquiescence
therein, and every right or remedy conferred upon the Trustee or the Owners by law or by this
Article may be enforced and exercised from time to time and as often as the Trustee shall deem
expedient.
If any action, proceeding or suit to enforce any right or to exercise any remedy is
abandoned or determined adversely to the Trustee or any Owner, then subject to any adverse
determination,the Trustee, such Owner,the Corporation and the District shall be restored to their
former positions, rights and remedies as if such action, proceeding or suit had not been brought
or taken.
Section 7.04. Remedies Not Exclusive. Subject to the provisions of Section 7.01
hereof, no remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of
any other remedy, and each such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing in law or in equity or by statute or
otherwise and may be exercised without exhausting and without regard to any other remedy
conferred by any law. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent or subsequent assertion or employment of any other
appropriate right or remedy.
Section 7.05. Application of Amounts After Default. All damages or other payments
received by the Trustee for the enforcement of any rights and powers of the Trustee under this
Article shall be deposited into the Installment Payment Fund and as soon as practicable and
thereafter applied:
(a) to the payment of all amounts due the Trustee under Section 8.03 hereof;
(b) unless the unpaid Installment Payments, and the interest thereon, shall have
become, and shall remain, immediately due and payable pursuant to the Master Agreement:
(i) to the payment of all amounts then due for interest evidenced by the
Revenue Obligations, in respect of which, or for the benefit of which, money has been
collected (other than Revenue Obligations which have become payable prior to such
Event of Default and money for the payment of which is held by the Trustee), ratably
without preference or priority of any kind, according to the amounts of interest evidenced
by such Revenue Obligations due and payable; and
(ii) to the payment of all amounts then due for principal evidenced by the
Revenue Obligations, in respect of which, or for the benefit of which, money has been
collected (other than Revenue Obligations which have become payable prior to such
Event of Default and money for the payment of which is held by the Trustee), ratably
without preference or priority of any kind, according to the amounts of principal
evidenced by such Revenue Obligations due and payable.
(c) if the unpaid Installment Payments, and the interest thereon, shall have become,
and shall remain, immediately due and payable pursuant to the Master Agreement, to the
4116361 L2 26
payment of all amounts then due for principal and interest evidenced by the Revenue Obligations
and, if the amount available therefor shall not be sufficient to pay in full the whole amount so
due and unpaid, then to the payment thereof ratably, without preference or priority of principal
over interest, or of interest over principal, or of any installment of interest over any other
installment of interest, or of any Revenue Obligation over any other Revenue Obligation, to the
persons entitled thereto without any discrimination or preference.
Section 7.06. Trustee May Enforce Claims Without Possession of Revenue
Obligations. All rights of action and claims under this Trust Agreement or the Revenue
Obligations may be prosecuted and enforced by the Trustee without the possession of any of the
Revenue Obligations or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Owners of the Revenue Obligations in respect of which such
judgment has been recovered.
Section 7.07. Limitation on Suits. No Owner shall have any right to institute any
proceeding,judicial or otherwise,with respect to this Trust Agreement, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless (a) such Owner shall have
previously given written notice to the Trustee of a continuing Event of Default hereunder, (b)the
Owners of not less than a majority of the aggregate principal evidenced by Revenue Obligations
then Outstanding shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee hereunder, (c) such Owner or
Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities to be incurred in compliance with such request, (d)the
Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such proceedings, and (e)no direction inconsistent with such written
request shall have been given to the Trustee during such 60-day period by the Owners of a
majority of the aggregate principal evidenced by Revenue Obligations then Outstanding; it being
understood and intended that no one or more Owners of Revenue Obligations shall have any
right in any manner whatever by virtue of, or by availing of, any provision of this Trust
Agreement to affect, disturb or prejudice the rights of any other Owner of Revenue Obligations,
or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right
under this Trust Agreement, except in the manner herein provided and for the equal and ratable
benefit of all the Owners of Revenue Obligations.
Section 7.08. No Liability by the Corporation to the Owners. Except as expressly
provided herein, the Corporation shall not have any obligation or liability to the Owners with
respect to the payment when due of the Installment Payments, and the interest thereon, by the
District, or with respect to the performance by the District of the other agreements and covenants
required to be performed by it contained in the Installment Purchase Agreement, the Master
Agreement or herein, or with respect to the performance by the Trustee of any right or obligation
required to be performed by it contained herein.
Section 7.09. No Liability by the District to the Owners. Except for the payment
when due of the Installment Payments, and the interest thereon, and the performance of the other
4116361 L2 27
agreements and covenants required to be performed by it contained in the Installment Purchase
Agreement, the Master Agreement or herein, the District shall not have any obligation or liability
to the Owners with respect to this Trust Agreement or the preparation, execution, delivery or
transfer of the Revenue Obligations or the disbursement of the Installment Payments, and the
interest thereon, by the Trustee to the Owners, or with respect to the performance by the Trustee
of any right or obligation required to be performed by it contained herein.
Section 7.10. No Liability of the Trustee to the Owners. Except as expressly provided
herein, the Trustee shall not have any obligation or liability to the Owners with respect to the
payment when due of the Installment Payments, and the interest thereon, by the District, or with
respect to the performance by the Corporation or the District of the other agreements and
covenants required to be performed by them, respectively contained in the Installment Purchase
Agreement or herein.
ARTICLE VIH
THE TRUSTEE
Section 8.01. Employment of the Trustee; Duties. The Corporation and the District
hereby appoint and employ the Trustee to receive, deposit and disburse the Installment
Payments, and the interest thereon, to prepare, execute, deliver and transfer the Revenue
Obligations and to perform the other functions contained herein, all in the manner provided
herein and subject to the conditions and terms hereof. By executing and delivering this Trust
Agreement, the Trustee accepts the appointment and employment hereinabove referred to and
accepts the rights and obligations of the Trustee provided herein, subject to the conditions and
terns hereof. Other than when an Event of Default hereunder has occurred and is continuing,the
Trustee undertakes to perform such duties and only such duties as are specifically set forth in this
Trust Agreement, and no implied covenants or obligations shall be read into this Trust
Agreement against the Trustee. In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this Trust Agreement, and use
the same degree of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
Section 8.02. Removal and Reshmation of the Trustee. The Corporation and the
District may, by an instrument in writing, remove the Trustee initially a party hereto and any
successor thereto unless an Event of Default shall have occurred and then be continuing, and
shall remove the Trustee initially a party hereto and any successor thereto if at any time
(a)requested to do so by an instrument or concurrent instruments in writing signed by the
Owners of a majority of the aggregate principal evidenced by the Revenue Obligations at the
time Outstanding (or their attorneys duly authorized in writing), or(b)the Trustee shall cease to
be eligible in accordance with the following sentence, and shall appoint a successor Trustee. The
Trustee shall be a bank having trust powers or a trust company in good standing in or
incorporated under the laws of the United States or any state thereof, having (or if such bank or
trust company is a member of a bank holding company system, its parent bank holding company
shall have) a combined capital and surplus of at least $75,000,000, and be subject to supervision
or examination by federal or state banking authorities. If such bank or trust company publishes a
report of condition at least annually, pursuant to law or to the requirements of any supervising or
411636111 28
examining authority above referred to, then for the purposes of this Section the combined capital
and surplus of such bank or trust company shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
The Trustee may at any time resign by giving written notice of such resignation to the
Corporation and the District and by giving notice, by first class mail, postage prepaid, of such
resignation to the Owners at their addresses appearing on the registration books maintained by
the Trustee. Upon receiving such notice of resignation, the Corporation and the District shall
promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the
event the District and the Corporation do not appoint a successor Trustee within 30 days
following receipt of such notice of resignation, the resigning Trustee may, at the expense of the
District, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any
resignation or removal of a Trustee and appointment of a successor Trustee shall become
effective only upon acceptance of appointment by the successor Trustee. Any successor Trustee
appointed under this Trust Agreement shall signify its acceptance of such appointment by
executing and delivering to the District and the Corporation and to its predecessor Trustee a
written acceptance thereof, and thereupon such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the moneys, estates, properties, rights, powers,
trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named
Trustee herein;but,nevertheless, at the written request of the District or of the successor Trustee,
such predecessor Trustee shall execute and deliver any and all instruments of conveyance or
further assurance and do such other things as may reasonably be required for more fully and
certainly vesting in and confirming to such successor Trustee all the right, title and interest of
such predecessor Trustee in and to any property held by it under this Trust Agreement and shall
pay over, transfer, assign and deliver to the successor Trustee any money or other property
subject to the trusts and conditions herein set forth.
Any corporation, association or agency into which the Trustee may be converted or
merged, or with which it may be consolidated, or to which it may sell or transfer its corporate
trust business and assets as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party,
provided that such entity meets the combined capital and surplus requirements of this Section,
ipso facto, shall be and become successor trustee under this Trust Agreement and vested with all
the trusts, powers, discretion, immunities, privileges and all other matters as was its
predecessor, without the execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.03. Compensation and Indemnification of the Trustee. The District shall
from time to time, subject to any written agreement then in effect with the Trustee, pay the
Trustee reasonable compensation for all its services rendered hereunder and reimburse the
Trustee for all its reasonable advances and expenditures (which shall not include "overhead
expenses" except as such expenses are included as a component of the Trustee's stated annual
fees or disclosed transaction fees) hereunder, including but not limited to advances to and
reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other
experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys
retained by the Trustee, employed by it in the exercise and performance of its rights and
4116361 L2 29
obligations hereunder; provided, however, that the Trustee shall not have any lien for such
compensation or reimbursement against any moneys held by it in any of the funds or accounts
established hereunder. The Trustee may take whatever legal actions are lawfully available to it
directly against the Corporation or the District.
Except as otherwise expressly provided herein, no provision of this Trust Agreement
shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of any of its rights or powers
hereunder.
The District, to the extent permitted by law, agrees to indemnify and save the Trustee, its
directors, officers, employees and agents harmless against any liabilities which it may incur in
the exercise and performance of its powers and duties hereunder or any other document related
to this Trust Agreement, including but not limited to costs and expenses incurred in defending
against any claim or liability,which are not due to its negligence or willful misconduct.
Section 8.04. Protection of the Trustee. The Trustee shall be protected and shall incur
no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent,
notice, request, requisition, resolution, statement, waiver or other paper or document which it
shall in good faith believe to be genuine and to have been adopted, executed or delivered by the
proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty
to make any investigation or inquiry as to any statements contained or matters referred to in any
such instrument, but may accept and rely upon the same as conclusive evidence of the truth and
accuracy of such statements. The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Trust Agreement at the request or direction of any of the
Owners of the Revenue Obligations pursuant to this Trust Agreement, unless such Owners shall
have offered to the Trustee security or indemnity, reasonably satisfactory to the Trustee, against
the reasonable costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction. The Trustee may consult with counsel, who may be counsel to the
Corporation or the District, with regard to legal questions, and the opinion of such counsel shall
be full and complete authorization and protection in respect to any action taken or suffered by it
hereunder in good faith in accordance therewith.
The Trustee shall not be responsible for the sufficiency of the Revenue Obligations or the
Installment Purchase Agreement, or of the assignment made to it hereunder, or for statements
made in the preliminary or final official statement relating to the Revenue Obligations.
The Trustee shall not be required to take notice or be deemed to have notice of any
default or Event of Default hereunder, except failure of any of the payments to be made to the
Trustee required to be made hereunder or under the Installment Purchase Agreement, unless the
Trustee shall be specifically notified in writing of such default or Event of Default by the
District, the Corporation or the Owners of not less than 5% of the aggregate principal evidenced
by the Revenue Obligations then Outstanding.
Whenever in the administration of its rights and obligations hereunder the Trustee shall
deem it necessary or desirable that a matter be proved or established prior to taking or suffering
any action hereunder, such matter(unless other evidence in respect thereof be herein specifically
41163611.2 30
prescribed) may be deemed to be conclusively proved and established by a Written Certificate of
the District or a Written Certificate of the Corporation, and such certificate shall be full warrant
to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof,
but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may
require such additional evidence as it deems reasonable.
The Trustee may buy, sell, own, hold and deal in any of the Revenue Obligations and
may join in any action which any Owner may be entitled to take with like effect as if the Trustee
were not a party hereto. The Trustee, either as principal or agent, may also engage in or be
interested in any financial or other transaction with the Corporation or the District, and may act
as agent, depository or trustee for any committee or body of Owners or of owners of obligations
of the Corporation or the District as freely as if it were not the Trustee hereunder.
The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers
hereof and perform any rights and obligations required of it hereunder by or through agents,
attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust
and its rights and obligations hereunder, and the Trustee shall not be answerable for the
negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable
care; provided, however, that in the event of any negligence or misconduct of any such attorney,
agent or receiver, the Trustee shall diligently pursue all remedies of the Trustee against such
agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it
in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent
facts.
The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or
for anything whatsoever in connection with the funds established hereunder, except only for its
own willful misconduct, negligence or breach of an obligation hereunder.
The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which
the Corporation or the District is a party and which, in the opinion of the Trustee and its counsel,
affects the Revenue Obligations or the security therefor, and shall do so if requested in writing
by the Owners of at least 5% of the aggregate principal evidenced by Revenue Obligations then
Outstanding, provided the Trustee shall have no duty to take such action unless it has been
indemnified to its reasonable satisfaction against all risk or liability arising from such action.
ARTICLE IX
AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT
Section 9.01. Amendment or Supplement. This Trust Agreement and the rights and
obligations of the Corporation, the District, the Owners and the Trustee hereunder may be
amended or supplemented at any time by an amendment hereof or supplement hereto which shall
become binding when the prior written consents of the Owners of a majority of the aggregate
principal evidenced by the Revenue Obligations then Outstanding, exclusive of Revenue
Obligations disqualified as provided in Section 9.02 hereof, are filed with the Trustee. No such
amendment or supplement shall (i) extend the stated Principal Payment Date of any Revenue
Obligation or reduce the rate of interest evidenced thereby or extend the time of payment of such
4116361L2 31
interest or reduce the amount of principal evidenced thereby or change the prepayment terms and
provisions or the provisions regarding delivery of notice of prepayment without the prior written
consent of the Owner of each Revenue Obligation so affected, (ii)reduce the percentage of
Owners whose consent is required for the execution of any amendment hereof or supplement
hereto without the prior written consent of the Owners of all Revenue Obligations then
Outstanding, (iii)modify any of the rights or obligations of the Trustee without the prior written
consent of the Trustee, or (iv)amend this Section without the prior written consent of the
Owners of all Revenue Obligations then Outstanding.
(a) This Trust Agreement and the rights and obligations of the Corporation, the
District, the Owners and the Trustee hereunder may also be amended or supplemented at any
time by an amendment hereof or supplement hereto which shall become binding upon execution,
without the written consents of any Owners, but only to the extent permitted by law and only for
any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms required by the
Corporation or the District to be observed or performed herein other agreements,
conditions, covenants and terms thereafter to be observed or performed by the
Corporation or the District, or to surrender any right or power reserved herein to or
conferred herein on the Corporation or the District;
(ii) to make such provisions for the purpose of curing any ambiguity or of
correcting, curing or supplementing any defective provision contained herein or in regard
to questions arising hereunder which the Corporation or the District may deem desirable
or necessary and not inconsistent herewith; or
(iii) for any other reason, provided such amendment or supplement does not
adversely affect the rights or interests of the Owners.
Section 9.02. Disqualified Revenue Obligations. Revenue Obligations owned or held
by or for the account of the District (but excluding Revenue Obligations held in any pension or
retirement fund of the District) shall not be deemed Outstanding for the purpose of any consent
or other action or any calculation of Outstanding Revenue Obligations provided in this Article,
and shall not be entitled to consent to or take any other action provided in this Article, and the
Trustee may adopt appropriate regulations to require each Owner, before his consent provided
for herein shall be deemed effective, to reveal if the Revenue Obligations as to which such
consent is given are disqualified as provided in this Section.
Section 9.03. Endorsement or Replacement of Revenue Obligations After
Amendment or Supplement. After the effective date of any action taken as hereinabove
provided in this Article, the Trustee may determine that the Revenue Obligations may bear a
notation by endorsement in form approved by the Trustee as to such action, and in that case upon
demand of the Owner of any Outstanding Revenue Obligation and presentation of such Revenue
Obligation for such purpose at the Principal Office a suitable notation as to such action shall be
made on such Revenue Obligation. If the Trustee shall receive an Opinion of Counsel advising
that new Revenue Obligations modified to conform to such action are necessary, modified
Revenue Obligations shall be prepared, and in that case upon demand of the Owner of any
au636n2 32
Outstanding Revenue Obligations such new Revenue Obligations shall be exchanged at the
Principal Office without cost to each Owner for Revenue Obligations then Outstanding upon
surrender of such Outstanding Revenue Obligations.
Section 9.04. Amendment by Mutual Consent. The provisions of this Article shall not
prevent any Owner from accepting any amendment as to the particular Revenue Obligations
owned by such Owner,provided that due notation thereof is made on such Revenue Obligations.
ARTICLE X
DEFEASANCE
Section 10.01. Discharee of Revenue Obligations and Trust Agreement. (a)If the
Trustee shall pay or cause to be paid or there shall otherwise be paid (i)to the Owners of all
Outstanding Revenue Obligations the interest and principal evidenced thereby at the times and in
the manner stipulated herein and therein, and (ii)all other amounts due hereunder and under the
Installment Purchase Agreement,then such Owners shall cease to be entitled to the pledge of and
lien on the amounts on deposit in the funds and accounts established hereunder, as provided
herein, and all agreements and covenants of the Corporation,the District, and the Trustee to such
Owners hereunder shall thereupon cease, terminate and become void and shall be discharged and
satisfied.
(b) Any Outstanding Revenue Obligation shall be deemed to have been paid within
the meaning and with the effect expressed in this Section when the whole amount of the
principal, premium, if any, and interest evidenced by such Revenue Obligation shall have been
paid or when (i) in case said Revenue Obligation or portion thereof has been selected for
prepayment in accordance with Section 4.03 hereof prior to its stated Principal Payment Date,
the District shall have given to the Trustee irrevocable instructions to give, in accordance with
the provisions of Section 4.03 hereof, notice of prepayment of such Revenue Obligation, or
portion thereof, (ii)there shall be on deposit with the Trustee, moneys, or Government
Obligations, or any combination thereof, the principal of and the interest on which when due, and
without any reinvestment thereof,will provide moneys which shall be sufficient to pay when due
the principal, premium, if any, and interest evidenced by such Revenue Obligation and due and
to become due on or prior to the prepayment date or its stated Principal Payment Date, as the
case may be, and (iii)in the event the stated Principal Payment Date of such Revenue Obligation
will not occur, and said Revenue Obligation is not to be prepaid, within the next succeeding 60
days, the District shall have given the Trustee irrevocable instructions to give notice, as soon as
practicable in the same manner as a notice of prepayment given pursuant to Section 4.03 hereof,
to the Owner of such Revenue Obligation, or portion thereof, stating that the deposit of moneys
or Government Obligations required by clause (ii) of this subsection has been made with the
Trustee and that said Revenue Obligation, or portion thereof, is deemed to have been paid in
accordance with this Section and stating such Principal Payment Date or prepayment date upon
which moneys are to be available for the payment of the principal, premium, if any, and interest
evidenced by said Revenue Obligation, or portion thereof.
Neither the moneys nor the Government Obligations deposited with the Trustee pursuant
to this Section nor principal or interest payments on any such Government Obligations shall be
4116361L2 33
withdrawn or used for any purpose other than, and shall be held in trust for and pledged to, the
payment of the principal, premium, if any, and interest evidenced by said Revenue Obligation, or
portions thereof If payment of less than all of the Revenue Obligations is to be provided for in
the manner and with the effect expressed in this Section, the Trustee or the District, as
applicable, shall select such Revenue Obligations, or portions thereof, in the manner specified in
Section 4.03 hereof for selection for prepayment of less than all of the Revenue Obligations, in
the principal amounts designated to the Trustee by the District.
(c) After the payment of all the interest, prepayment premium, if any, and principal
evidenced by all Outstanding Revenue Obligations and all other amounts due hereunder and
under the Installment Purchase Agreement as provided in this Section, the Trustee shall execute
and deliver to the Corporation and the District all such instruments as may be necessary or
desirable to evidence the discharge and satisfaction of this Trust Agreement, the Trustee shall
pay over or deliver to the District all moneys or securities held by it pursuant hereto which are
not required for the payment of the interest, prepayment premium, if any, and principal
evidenced by such Revenue Obligations and all other amounts due hereunder and under the
Installment Purchase Agreement.
(d) Prior to any defeasance becoming effective under this Article, the District shall
cause to be delivered (i)an executed copy of a report, addressed to the Trustee and the District,
in form and in substance acceptable to the District, of a nationally recognized certified public
accountant, or firm of such accountants, verifying that the Government Obligations and cash, if
any, satisfy the requirements of clause (ii) of subsection(b) of this Section (a `Verification"),
(ii) a copy of the escrow deposit agreement entered into in connection with such defeasance,
which escrow deposit agreement shall provide that no substitution of Government Obligations
shall be permitted except with other Government Obligations and upon delivery of a new
Verification and no reinvestment of Government Obligations shall be permitted except as
contemplated by the original Verification or upon delivery of a new Verification, and(iii) a copy
of an Opinion of Counsel, dated the date of such defeasance and addressed to the Trustee and the
District, in form and in substance acceptable to the District, to the effect that such Revenue
Obligations have been paid within the meaning and with the effect expressed in this Trust
Agreement, and all agreements and covenants of the Corporation, the District and the Trustee to
the Owners of such Revenue Obligations under this Trust Agreement have ceased, terminated
and become void and have been discharged and satisfied.
Section 10.02. Unclaimed Moneys. Any moneys held by the Trustee in trust for the
payment and discharge of the interest or principal evidenced by any of the Revenue Obligations
which remain unclaimed for two years after the date when such interest or principal evidenced
by such Revenue Obligations have become payable, if such moneys were held by the Trustee at
such date, or for two years after the date of deposit of such moneys if deposited with the Trustee
after the date when the interest and principal evidenced by such Revenue Obligations have
become payable, shall be repaid by the Trustee to the District as its absolute property free from
trust, and the Trustee shall thereupon be released and discharged with respect thereto and the
Owners shall look only to the District for the payment of the interest and principal evidenced by
such Revenue Obligations.
4116361 L2 34
ARTICLE XI
MISCELLANEOUS
Section 11.01. Benefits of Trust Agreement. Nothing contained herein, expressed or
implied, is intended to give to any Person other than the Corporation, the District, the Trustee
and the Owners any claim, remedy or right under or pursuant hereto, and any agreement,
condition, covenant or term required herein to be observed or performed by or on behalf of the
Corporation or the District shall be for the sole and exclusive benefit of the Trustee and the
Owners.
Section 11.02. Successor Deemed Included in all References to Predecessor.
Whenever the Corporation, the District or the Trustee, or any officer thereof, is named or
referred to herein, such reference shall be deemed to include the successor to the powers, duties
and functions that are presently vested in the Corporation, the District or the Trustee, or such
officer, and all agreements, conditions, covenants and terms required hereby to be observed or
performed by or on behalf of the Corporation, the District or the Trustee, or any officer thereof,
shall bind and inure to the benefit of the respective successors thereof whether so expressed or
not.
Section 11.03. Execution of Documents by Owners. Any declaration, request or other
instrument which is permitted or required herein to be executed by Owners may be in one or
more instruments of similar tenor and may be executed by Owners in person or by their attorneys
appointed in writing. The fact and date of the execution by any Owner or his attorney of any
declaration, request or other instrument or of any writing appointing such attorney may be
proved by the certificate of any notary public or other officer authorized to take
acknowledgments of deeds to be recorded in the state or territory in which he purports to act that
the Person signing such declaration, request or other instrument or writing acknowledged to him
the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such
notary public or other officer, or by such other proof as the Trustee may accept which it may
deem sufficient.
The ownership of any Revenue Obligations and the amount, payment date, number and
date of owning the same may be proved by the registration books maintained by the Trustee
pursuant to the provisions of Section 2.07 hereof.
Any declaration, request or other instrument in writing of the Owner of any Revenue
Obligation shall bind all future Owners of such Revenue Obligation with respect to anything
done or suffered to be done by the Corporation, the District or the Trustee in good faith and in
accordance therewith.
Section 11.04. Waiver of Personal Liability. Notwithstanding anything contained
herein to the contrary, no member, officer or employee of the District or the Corporation shall be
individually or personally liable for the payment of any moneys, including without limitation,the
interest or principal evidenced by the Revenue Obligations, but nothing contained herein shall
relieve any member, officer or employee of the District or the Corporation from the performance
au636m2 35
of any official duty provided by any applicable provisions of law, by the Installment Purchase
Agreement or hereby.
Section 11.05. Acquisition of Revenue Obligations by District. All Revenue
Obligations acquired by the District, whether by purchase or gift or otherwise, shall be
surrendered to the Trustee for cancellation.
Section 11.06. Content of Certificates. Every Written Certificate of the District and
every Written Certificate of the Corporation with respect to compliance with any agreement,
condition, covenant or term contained herein shall include (a)a statement that the Person making
or giving such certificate has read such agreement, condition, covenant or term and the
definitions herein relating thereto, (b)a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in such certificate are based,
(c) a statement that, in the opinion of the signer, the signer has made or caused to be made such
examination or investigation as is necessary to enable the signer to express an informed opinion
as to whether or not such agreement, condition, covenant or term has been complied with, and
(d)a statement as to whether, in the opinion of the signer, such agreement, condition, covenant
or tern has been complied with.
Any Written Certificate of the District and any Written Certificate of the Corporation
may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless the
Person making or giving such certificate knows that the Opinion of Counsel with respect to the
matters upon which each Person's certificate may be based, as aforesaid, is erroneous, or in the
exercise of reasonable care should have known that the same was erroneous. Any Opinion of
Counsel may be based, insofar as it relates to factual matters, upon information which is in the
possession of the District or the Corporation upon a representation by an officer or officers of the
District or the Corporation, as the case may be, unless the counsel executing such Opinion of
Counsel knows that the representation with respect to the matters upon which such counsel's
opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should
have known that the same was erroneous.
Section 11.07. Funds and Accounts. Any fund or account required to be established
and maintained herein by the Trustee may be established and maintained in the accounting
records of the Trustee either as an account or a fund, and may, for the purposes of such
accounting records, any audits thereof and any reports or statements with respect thereto, be
treated either as an account or a fund, but all such records with respect to all such funds and
accounts shall at all times be maintained in accordance with sound accounting practice and with
due regard for the protection of the security of the Revenue Obligations and the rights of the
Owners. The Trustee may establish such funds and accounts as it deems necessary to perform its
obligations hereunder.
Trustee may commingle any of the moneys held by it hereunder for investment purposes
only; provided, however, that the Trustee shall account separately for the moneys in each fund or
account established pursuant to this Trust Agreement.
Section 11.05. Article and Section Headings. Gender and References. The singular
form of any word used herein, including the terms defined in Section 1.01 hereof, shall include
4116361L2 36
the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of
any gender shall include correlative words of the other genders. The headings or titles of the
several Articles and Sections hereof and the table of contents appended hereto shall be solely for
convenience of reference and shall not affect the meaning, construction or effect hereof. All
references herein to "Articles," "Sections," subsections or clauses are to the corresponding
Articles, Sections, subsections or clauses hereof, and the words "hereby," "herein," "hereof,"
"hereto," "herewith," "hereunder" and other words of similar import refer to this Trust
Agreement as a whole and not to any particular Article, Section, subsection or clause thereof.
Section 11.09. Partial Invalidity. If any one or more of the agreements, conditions,
covenants or terms required herein to be observed or performed by or on the part of the
Corporation, the District or the Trustee shall be contrary to law, then such agreement or
agreements, such condition or conditions, such covenant or covenants or such term or terms shall
be null and void to the extent contrary to law and shall be deemed separable from the remaining
agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof
or of the Revenue Obligations, and the Owners shall retain all the benefit,protection and security
afforded to them under any applicable provisions of law. The Corporation, the District and the
Trustee hereby declare that they would have executed this Trust Agreement, and each and every
Article, Section, paragraph, subsection, sentence, clause and phrase hereof and would have
authorized the execution and delivery of the Revenue Obligations pursuant hereto irrespective of
the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or
phrases hereof or the application thereof to any Person or circumstance may be held to be
unconstitutional, unenforceable or invalid.
Section 11.10. California Law. This Trust Agreement shall be governed by and
construed in accordance with the laws of the State.
Section 11.11. Notices. Any written notice, statement, demand, consent, approval,
authorization, offer, designation, request or other communication to be given hereunder shall be
given to the party entitled thereto at its address set forth below, or at such other address as such
party may provide to the other parties in writing from time to time, namely:
If to the District: Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, California 92708
Attention: Director of Finance and Administrative Services
4116361L2 37
If to the Corporation: Orange County Sanitation District Financing Corporation
c/o Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, California 92708
Attention: Treasurer
If to the Trustee: U.S. Bank National Association
633 West Fifth Street
24th Floor
Los Angeles, California 90071
Attention: Corporate Trust Services
Each such notice, statement, demand, consent, approval, authorization, offer, designation,
request or other communication hereunder shall be deemed delivered to the party to whom it is
addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic
communication, e.g. facsimile or telecopier or e-mail (with a PDF attachment, if applicable),
upon the sender's receipt of an appropriate written acknowledgment, (c) if given by registered or
certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72
hours after such notice is deposited with the United States mail, (d) if given by overnight courier,
with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e)if given by
any other means,upon delivery at the address specified in this Section.
Section 11.12. Effective Date. This Trust Agreement shall become effective upon its
execution and delivery.
Section 11.13. Execution in Counterparts. This Trust Agreement may be
simultaneously executed in several counterparts, each of which shall be deemed an original, and
all of which shall constitute but one and the same instrument.
[Remainder of page intentionally left blank.]
4116361L2 38
IN WITNESS WHEREOF,the parties hereto have caused this Trust Agreement to be
executed by their respective officers thereunto duly authorized, all as of the day and year first
written above.
ORANGE COUNTY SANITATION DISTRICT
FINANCING CORPORATION
By:
Treasurer
ORANGE COUNTY SANITATION DISTRICT
By:
Chair of the Board of Directors
(SEAL)
Attest:
By:
Clerk of the Board of Directors
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
4116361 L2 39
EXHIBIT A
FORM OF REVENUE OBLIGATION
No. R— •*•$•*•
Unless this Revenue Obligation is presented by an authorized representative of The
Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and
any Revenue Obligation executed and delivered is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
Registered Owner hereof, Cede&Co.,has an interest herein.
ORANGE COUNTY SANITATION DISTRICT
WASTEWATER REFUNDING REVENUE OBLIGATION
SERIES 2015A
Such revenue obligations are certificates of participation evidencing direct,undivided fractional
interests in the Installment Purchase Agreement,dated as of February 1,2015,by and between the
Orange County Sanitation District and the Orange County Sanitation District Financing
Corporation and the related Installment Payments,and the interest thereon.
PRINCIPAL
PAYMENT DATE INTEREST RATE DATED DATE CUSIP
February 1, February_, 2015
REGISTERED OWNER: Cede&Co.
PRINCIPAL AMOUNT: DOLLARS
THIS IS TO CERTIFY that the Registered Owner of this Revenue Obligation (this
"Revenue Obligation"), as identified above, is the owner of a direct, fractional undivided interest
in certain installment payments ("Installment Payments"), and the interest thereon,payable under
and pursuant to the Installment Purchase Agreement, dated as of February 1, 2015 (the
"Installment Purchase Agreement'), by and between the Orange County Sanitation District (the
"District'), a county sanitation district organized and existing under the laws of the State of
California, and the Orange County Sanitation District Financing Corporation (the
"Corporation"), a nonprofit public benefit corporation organized and existing under the laws of
the State of California. Certain of the rights of the Corporation under the Installment Purchase
Agreement, including the right to receive the Installment Payments, and the interest thereon,
have been assigned without recourse by the Corporation to U.S. Bank National Association, a
national banking association duly organized and existing under the laws of the United States of
America, as trustee (the "Trustee") under the Trust Agreement, dated as of February 1, 2015 (the
"Trust Agreement'), by and among the Trustee, the District and the Corporation. Capitalized
undefined terms used herein shall have the meanings ascribed thereto in the Trust Agreement.
41163611.2 A-1
The District has executed and delivered the Master Agreement for District Obligations,
dated as of August 1, 2000 (the "Master Agreement'), by and between the District and the
Corporation, pursuant to which the District establishes and declares the conditions and terms
upon which obligations such as the Installment Purchase Agreement, and the Installment
Payments and the interest thereon, will be incurred and secured.
This Revenue Obligation is one of the duly authorized Orange County Sanitation District
Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations")
evidencing principal in the aggregate amount of $ , executed pursuant to the
terms of the Trust Agreement. The Revenue Obligations evidence direct, fractional undivided
interests in the Installment Payments, and the interest thereon, payable under the Installment
Purchase Agreement. The Revenue Obligations are executed and delivered to refinance certain
improvements to the wastewater collection, treatment and disposal facilities of the District (the
"Wastewater System") and to pay the costs of issuance incurred in connection therewith and to
pay certain other related costs.
The Installment Payments, and the interest thereon, are to be paid by the District pursuant
to the Installment Purchase Agreement in consideration for the purchase of certain improvements
to the Wastewater System and for the other agreements and obligations undertaken by the
Corporation under the Installment Purchase Agreement and the Trust Agreement.
The income and revenue received by the District from the operation of the Wastewater
System remaining after the payment of maintenance and operation or ownership costs of the
Wastewater System (as more fully described in the Installment Purchase Agreement, the "Net
Revenues") are, pursuant to the Master Agreement, pledged to the payment of the Senior
Obligations and Reimbursement Obligations with respect to Senior Obligations (as such terms
are defined in the Master Agreement).
The Installment Purchase Agreement constitutes a Senior Obligation and, as such, shall
be subject to the provisions of the Master Agreement, and shall be afforded all of the advantages,
benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement.
The Installment Purchase Agreement is payable on a parity with the other existing Senior
Obligations. The District may at any time incur Senior Obligations in addition to existing Senior
Obligations and the Installment Purchase Agreement payable from Net Revenues as provided in
the Master Agreement on a parity with all other Senior Obligations theretofore incurred,but only
subject to the conditions and upon compliance with the procedures set forth in the Master
Agreement.
The District is not required to advance any moneys derived from any source of income
other than Net Revenues and the other funds provided in the Installment Purchase Agreement for
the payment of the Installment Payments, and the interest thereon, and other payments required
to be made by it under the Installment Purchase Agreement, or for the performance of any
agreements or covenants required to be performed by it contained therein. The obligation of the
District to pay the Installment Payments, and the interest thereon, and other payments required to
be made by it under the Installment Purchase Agreement is a special obligation of the District
41163611.2 A-2
payable, in the manner provided in the Installment Purchase Agreement, solely from such Net
Revenues and other funds provided for therein, and does not constitute a debt of the District or of
the State of California, or of any political subdivision thereof, in contravention of any
constitutional or statutory debt limitation or restriction.
Reference is hereby made to the Master Agreement, the Installment Purchase Agreement
and to the Trust Agreement and any and all amendments thereof and supplements thereto for a
description of the terms under which the District's obligation to pay the Installment Payments,
and the interest thereon, is incurred, the Revenue Obligations are executed and delivered, the
provisions with regard to the nature and extent of the Net Revenues, and the rights of the Owners
of the Revenue Obligations. All of the terms of the Master Agreement, the Installment Purchase
Agreement and the Trust Agreement are hereby incorporated herein. The Trust Agreement
constitutes a contract among the District, the Corporation and the Trustee for the benefit of the
Owners of the Revenue Obligations, to all the provisions of which the Owner of this Revenue
Obligation,by acceptance hereof, agrees and consents.
The Registered Owner of this Revenue Obligation is entitled to receive, subject to the
terms of the Trust Agreement and any right of prepayment as provided herein or therein, on the
Principal Payment Date set forth above, upon presentation and surrender of this Revenue
Obligation at the principal corporate trust office of the Trustee in Los Angeles, California (the
`Principal Office"),the Principal Amount specified above, evidencing the Owner's interest in the
Installment Payments coming due on the Principal Payment Date, and to receive on February I
and August 1 of each year, commencing on August 1, 2015 (each an "Interest Payment Date"),
interest accrued thereon at the Interest Rate specified above, computed on the basis of a 360-day
year consisting of twelve 30-day months, until said Principal Amount is paid in full, evidencing
the Registered Owner's interest in the interest evidenced by the Installment Payments coming
due on each of said dates.
This Revenue Obligation shall evidence interest from the Interest Payment Date next
preceding its date of execution to which interest has been paid in full, unless such date of
execution shall be after the 15th day of the month next preceding an Interest Payment Date,
whether or not such day is a business day (each such date, a "Record Date"), and on or prior to
the following Interest Payment Date, in which case this Revenue Obligation shall evidence
interest from such Interest Payment Date, or unless such date of execution shall be on or prior to
the first Record Date, in which case this Revenue Obligation shall evidence interest from the
Dated Date specified above. Notwithstanding the foregoing, if, as shown by the records of the
Trustee, interest evidenced by the Revenue Obligations shall be in default, this Revenue
Obligation shall evidence interest from the last Interest Payment Date to which interest has been
paid in full or duly provided for.
Payments of interest evidenced by the Revenue Obligations shall be made to the Owners
thereof(as determined at the close of business on the Record Date next preceding the related
Interest Payment Date) by check or draft of the Trustee mailed to the address of each such
Owner as it appears on the registration books maintained by the Trustee pursuant to the Trust
Agreement, or to such other address as may be famished in writing to the Trustee by such
Owner. Payment of principal and prepayment premium, if any, evidenced by the Revenue
Obligations, on their stated principal payment dates or on prepayment in whole or in part prior
41163611.2 A-3
thereto, shall be made only upon presentation and surrender of the Revenue Obligations at the
Principal Office. All such amounts are payable in lawful money of the United States of America.
The Revenue Obligations are authorized to be executed and delivered in the form of fully
registered certificates in denominations of$5,000 or any integral multiple thereof("Authorized
Denominations").
This Revenue Obligation may be transferred or exchanged by the Registered Owner
hereof, in person or by his attorney duly authorized in writing, at the Principal Office,but only in
the manner, subject to the limitations and upon payment of the charges provided in the Trust
Agreement.
The Trustee shall not be required to transfer or exchange any Revenue Obligation during
the period commencing on the date five days before the date of selection of Revenue Obligations
for prepayment and ending on the date of mailing of notice of such prepayment, nor shall the
Trustee be required to transfer or exchange any Revenue Obligation or portion thereof selected
for prepayment from and after the date of mailing the notice of prepayment thereof.
The Trustee may treat the Registered Owner hereof as the absolute owner hereof for all
purposes, whether or not the principal or interest evidenced by this Revenue Obligation shall be
overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and
payment of the principal and interest evidenced by this Revenue Obligation shall be made only
to such Registered Owner, which payments shall be valid and effectual to satisfy and discharge
the liability evidenced by this Revenue Obligation to the extent of the sum or sums so paid.
The Revenue Obligations are subject to prepayment prior to their stated Principal
Payment Dates in accordance with the Trust Agreement.
To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust
Agreement and the rights and obligations of the Corporation, the District, the Owners and the
Trustee under the Trust Agreement may be amended or supplemented at any time by an
amendment or supplement thereto which shall become binding when the prior written consents
of the Owners of a majority of the aggregate principal evidenced by the Revenue Obligations
then outstanding, exclusive of Revenue Obligations disqualified as provided under the Trust
Agreement, are filed with the Trustee. No such supplement or amendment shall (a)extend the
stated Principal Payment Date of any Revenue Obligation or reduce the rate of interest evidenced
thereby or extend the time of payment of such interest or reduce the amount of principal
evidenced thereby or change the prepayment terms and provisions or the provisions regarding
delivery of notice of prepayment without the prior written consent of the Owner of each Revenue
Obligation so affected, (b)reduce the percentage of Owners whose consent is required for the
execution of any amendment of or supplement to the Trust Agreement without the prior written
consent of the Owners of all Revenue Obligations then outstanding, (c)modify any of the rights
or obligations of the Trustee without the prior written consent of the Trustee, or (d)amend the
amendment provisions of the Trust Agreement without the prior written consent of the Owners
of all Revenue Obligations then outstanding.
41163611.2 A-4
To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust
Agreement and the rights and obligations of the Corporation, the District, the Owners and the
Trustee under the Trust Agreement may also be amended or supplemented at any time by an
amendment or supplement thereto which shall become binding upon execution, without the
written consents of any Owners,but only to the extent permitted by law and only(a)to add to the
agreements, conditions, covenants and terns required by the Corporation or the District to be
observed or performed under the Trust Agreement other agreements, conditions, covenants and
terms thereafter to be observed or performed by the Corporation or the District, or to surrender
any right or power reserved therein to or conferred therein on the Corporation or the District, and
which in either case shall not adversely affect the rights or interests of the Owners, (b)to make
such provisions for the purpose of curing any ambiguity or of correcting, curing or
supplementing any defective provision contained in the Trust Agreement or in regard to
questions arising thereunder which the Corporation or the District may deem desirable or
necessary and not inconsistent therewith or (c) for any other reason, provided such amendment
or supplement does not adversely affect the rights or interests of the Owners.
THE DISTRICT HAS CERTIFIED that all acts, conditions and things required by the
statutes of the State of California and by the Trust Agreement to exist, to have happened and to
have been performed precedent to and in connection with the execution and delivery of this
Revenue Obligation do exist, have happened and have been performed in regular and due time,
form and manner as required by law, and that the Trustee is duly authorized to execute and
deliver this Revenue Obligation.
IN WITNESS WHEREOF, this Revenue Obligation has been executed by the manual
signature of an authorized signatory of the Trustee as of the date set forth below.
Date: February_, 2015
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
41163611.2 A-5
ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
the within-mentioned Revenue Obligation
and hereby irrevocably constitute(s) and
appoint(s) attorney, to transfer the same
on the books of the Trustee with full power of substitution in the premises.
Dated:
Note: The signature(s)on this Assignment must correspond with the narne(s) as written on the
face of the within registered Revenue Obligation in every particular, without alteration
or enlargement or any change whatsoever.
Tax I.D. #:
Signature Guaranteed:
Now: Signatme(s)must be guaranteed by an eligible Note: The signature(s)on this Assignment must correspond
guarantor. with the name(s)as written on the face of the within Revenue
Obligation in every particular without alteration or
enlargement or any change whatsoever.
41163611.2 A-6
DRAFT OF
12/01/14
INSTALLMENT PURCHASE AGREEMENT
by and between
ORANGE COUNTY SANITATION DISTRICT
and
ORANGE COUNTY SANITATION DISTRICT
FINANCING CORPORATION
Dated as of February 1, 2015
Relating to
Orange County Sanitation District
Wastewater Refunding Revenue Obligations
Series 2015A
411635412 11411481
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.................................................................................................2
Section 1.01. Definitions............................................................................................2
Section 1.02. Definitions in Master Agreement and Trust Agreement......................3
ARTICLE II PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE
CORPORATION; PAYMENT OF PURCHASE PRICE...............................4
Section 2.01. Acquisition of the Project....................................................................4
Section 2.02. Payment of Purchase Price...................................................................4
ARTICLE IH PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE
DISTRICT; INSTALLMENT PAYMENTS...................................................4
Section 3.01. Purchase and Sale of Project................................................................4
Section 3.02. Installment Payments...........................................................................4
Section3.03. Reserved...............................................................................................6
Section 3.04. Obligation Absolute.............................................................................6
Section 3.05. Nature of Agreement............................................................................6
ARTICLE IV PREPAYMENT OF INSTALLMENT PAYMENTS.....................................7
Section 4.01. Prepayment of Installment Payments...................................................7
Section4.02. Notice...................................................................................................7
Section 4.03. Discharge of Obligations.....................................................................7
ARTICLE COVENANTS .................................................................................................7
Section 5.01. Compliance with Master Agreement...................................................7
Section 5.02. Compliance with Installment Purchase Agreement.............................7
Section 5.03. Protection of Security and Rights........................................................ 8
Section 5.04. Indemnification of Corporation........................................................... 8
Section 5.05. Further Assurances............................................................................... 8
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES OF THE
CORPORATION............................................................................................. 8
Section 6.01. Events of Default................................................................................. 8
Section 6.02. Remedies on Default............................................................................9
Section6.03. Non-Waiver..........................................................................................9
Section 6.04. Remedies Not Exclusive.................................................................... 10
ARTICLE VII AMENDMENTS ........................................................................................... 10
Section7.01. Amendments...................................................................................... 10
ARTICLE VIII MISCELLANEOUS...................................................................................... 11
Section 8.01. Liability of District Limited............................................................... 11
Section 8.02. Limitation of Rights........................................................................... 11
Section8.03. Assignment ........................................................................................ 11
Section8.04. Notices............................................................................................... 12
41163542.2 _i_
TABLE OF CONTENTS
(continued)
Page
Section 8.05. Successor Is Deemed Included in all References to Predecessor...... 12
Section 8.06. Waiver of Personal Liability.............................................................. 12
Section 8.07. Article and Section Headings, Gender and References..................... 12
Section 8.08. Partial Invalidity................................................................................. 13
Section 8.09. Governing Law.................................................................................. 13
Section 8.10. Execution in Counterparts.................................................................. 13
EXHIBIT A DESCRIPTION OF PROJECT........................................................A-1
41163542.2 -11-
INSTALLMENT PURCHASE AGREEMENT
THIS INSTALLMENT PURCHASE AGREEMENT (this "Installment Purchase
Agreement"), dated as of February 1, 2015, is by and between the ORANGE COUNTY
SANITATION DISTRICT, a county sanitation district organized and existing under the laws of
the State of California (the "District"), and the ORANGE COUNTY SANITATION DISTRICT
FINANCING CORPORATION, a nonprofit public benefit corporation organized and existing
under the laws of the State of California(the"Corporation").
WITNESSETH:
WHEREAS, to refinance the acquisition, construction and installation of certain
improvements to its wastewater system (the `Prior Project"), the District has heretofore
purchased the Prior Project from the Corporation, and the Corporation has heretofore sold the
Prior Project to the District, for the installment payments (the `Prior Installment Payments")
made by the District pursuant to the Installment Purchase Agreement, dated as of August 1, 2000
(the`Prior Installment Purchase Agreement"),by and between the District and the Corporation;
WHEREAS, to provide the funds necessary to refinance the Prior Project, the District
caused the execution and delivery of the Orange County Sanitation District Certificates of
Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional
interests in the related Prior Installment Payments;
WHEREAS,the District desires to refinance a portion of the Prior Project(the `Project')
by prepaying a portion of the remaining Prior Installment Payments, and the interest thereon to
the dates of prepayment, thereby causing a portion of the remaining Prior Certificates to be
prepaid;
WHEREAS,to provide the funds necessary to pay and prepay a portion of the remaining
Prior Installment Payments,the District and the Corporation desire that the Corporation purchase
the Project from the District and the District sell the Project to the Corporation, and that the
District then purchase the Project from the Corporation and the Corporation sell the Project to
the District, for the installment payments (the`Installment Payments") to be made by the District
pursuant to this Installment Purchase Agreement;
WHEREAS, pursuant to the Master Agreement for District Obligations, dated as of
August 1, 2000,by and between the District and the Corporation,the District has established and
declared the conditions and terms upon which obligations such as this Installment Purchase
Agreement, and the Installment Payments, and the interest thereon, are to be incurred and
secured;
WHEREAS, the Corporation proposes to assign without recourse certain of its rights
under and pursuant to this Installment Purchase Agreement to U.S. Bank National Association,
as trustee(the"Trustee");
411635412
WHEREAS, in consideration of such assignment and the execution and delivery of the
Trust Agreement, dated as of the date hereof, by and among the Trustee, the Corporation and the
District, the Trustee has agreed to execute and deliver the Orange County Sanitation District
Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"),
evidencing direct, undivided fractional interests in the Installment Payments, and the interest
thereon,payable hereunder;
WHEREAS, a portion of the proceeds of the Revenue Obligations will be used to prepay
certain of the Prior Installment Payments; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened
and to have been performed precedent to and in connection with the execution and delivery of
this Installment Purchase Agreement do exist, have happened and have been performed in
regular and due time, form and manner as required by law, and the parties hereto are now duly
authorized to execute and enter into this Installment Purchase Agreement;
NOW, THEREFORE, in consideration of the covenants and provisions herein set forth
and for other good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged,the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Except as provided in Section 1.02 hereof or unless the
context otherwise requires, the terms defined in this Section shall for all purposes hereof and of
any amendment hereof or supplement hereto and of any report or other document mentioned
herein or therein have the meanings defined herein, the following definitions to be equally
applicable to both the singular and plural forms of any of the terms defined herein:
"Business Day" means a day other than (a) Saturday or Sunday, (b) a day on which
banking institutions in the city in which the Principal Office is located are authorized or required
by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or
obligated by law or executive order to be closed.
"Closing Date"means February_, 2015.
"Corporation" means the Orange County Sanitation District Financing Corporation, a
nonprofit public benefit corporation organized and existing under the laws of the State, and any
successor thereto.
"District" means the Orange County Sanitation District, a county sanitation district
organized and existing under and by virtue of the laws of the State, and any successor thereto.
"Event of Default"means an event described in Section 6.01 hereof.
"Installment Payments" means the Installment Payments required to be made by the
District pursuant to Section 3.02 hereof.
411635412 2
"Installment Payment Dates"means each February 1, commencing February 1, 2028.
"Installment Purchase Agreement" means this Installment Purchase Agreement, dated
as of February 1, 2015, by and between the District and the Corporation, as originally executed
and as it may from time to time be amended or supplemented in accordance with the terms
hereof.
"Interest Payment Date" means February 1 and August 1 of each year, commencing
August 1,2015.
"Master Agreement" means the Master Agreement for District Obligations, dated as of
August 1, 2000, by and between the District and the Corporation, as originally executed and as it
may from time to time be amended or supplemented in accordance with the terms thereof.
"Person" means an individual, corporation, limited liability company, firm, association,
partnership, trust, or other legal entity or group of entities, including a governmental entity or
any agency or political subdivision thereof.
"Principal Office" means the Trustee's principal corporate trust office in Los Angeles,
California.
"Project" means the improvements to the Wastewater System, as described in Exhibit A
hereto.
"Revenue Obligations" means the Orange County Sanitation District Wastewater
Refunding Revenue Obligations, Series 2015A, executed and delivered by the Trustee, which are
certificates of participation, evidencing direct, undivided fractional interests in the Installment
Payments, and the interest thereon, executed and delivered under and pursuant to the Trust
Agreement.
"Trust Agreement" means the Trust Agreement, dated as of February 1, 2015, by and
among the Trustee, the Corporation and the District, as originally executed and as it may from
time to time be amended or supplemented in accordance with its terns.
"Trustee" means U.S. Bank National Association, a national banking association duly
organized and existing under the laws of the United States of America, or any other bank or trust
company which may at any time be substituted in its place as provided in the Trust Agreement.
Section 1.02. Definitions in Master Agreement and Trust Agreement. Except as
otherwise herein defined and unless the context otherwise requires, the terms defined in the
Master Agreement or the Trust Agreement shall for all purposes hereof and of any amendment
hereof or supplement hereto and of any report or other document mentioned herein have the
meanings defined therein, such definitions to be equally applicable to both the singular and
plural forms of any of the terms defined therein. With respect to any defined term which is given
a different meaning under this Installment Purchase Agreement than under the Master
Agreement or the Trust Agreement, as used herein it shall have the meaning given herein.
411635412 3
ARTICLE II
PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE CORPORATION;
PAYMENT OF PURCHASE PRICE
Section 2.01. Acquisition of the Protect. The District represents and warrants that it is
the sole and exclusive owner of the Project. The Corporation hereby purchases from the District,
and the District hereby sells to the Corporation, a portion of the Project equal to
$ as described in Exhibit A hereto in accordance with the provisions of this
Installment Purchase Agreement. All right, title and interest in and to such portion of the Project
shall immediately vest in the Corporation on the Closing Date without further action on the part
of the Corporation or the District.
Section 2.02. Payment of Purchase Price. On the Closing Date, the Corporation shall
pay to the District, as the purchase price of the applicable portion of the Project specified in
Section 2.01, the amount of$ , which amount shall be paid from the proceeds
of the Revenue Obligations.
ARTICLE IU
PURCHASE OF PROJECT BY,AND SALE THEREOF TO,THE DISTRICT;
INSTALLMENT PAYMENTS
Section 3.01. Purchase and Sale of Protect. The District hereby purchases from the
Corporation, and the Corporation hereby sells to the District, the Project in accordance with the
provisions of this Installment Purchase Agreement. All right, title and interest in and to the
Project shall immediately vest in the District on the Closing Date without further action on the
part of the District or the Corporation.
Section 3.02. Installment Payments. The District shall, subject to any rights of
prepayment provided in Article W hereof, pay to the Corporation, solely from Net Revenues and
from no other sources, the purchase price of the Project in Installment Payments, with interest
thereon, as provided herein. The Installment Payments and the interest thereon shall be payable
on the Business Day immediately preceding each of the Installment Payment Dates in the
amounts and at the interest rates per annum set forth in the following schedule:
411635412 4
Interest on
Payment Installment Installment Interest
Date Payment Payment Total Rate
08/01/2015
02/01/2016
08/01/2016
02/01/2017
08/01/2017
02/01/2018
08/01/2018
02/01/2019
08/01/2019
02/01/2020
08/01/2020
02/01/2021
08/01/2021
02/01/2022
08/01/2022
02/01/2023
08/01/2023
02/01/2024
08/01/2024
02/01/2025
08/01/2025
02/01/2026
08/01/2026
02/01/2027
08/01/2027
02/01/2028
08/01/2028
02/01/2029
08/01/2029
02/01/2030
08/01/2030
02/01/2031
08/01/2031
02/01/2032
08/01/2032
02/01/2033
08/01/2033
02/01/2034
08/01/2034
02/01/2035
08/01/2035
411635412 5
Interest on
Payment Installment Installment Interest
Date Payment Payment Total Rate
02/01/2036
08/01/2036
02/01/2037
The Installment Payments shall accrue interest from the Closing Date, at the rates set
forth above, payable on the Interest Payment Dates in each year. Such interest shall accrue on
the basis of a 360-day year consisting of twelve 30-day months. Each Installment Payment, and
each payment of interest thereon, shall be deposited with the Trustee, as assignee of the
Corporation, no later than the Business Day next preceding the Installment Payment Date or
Interest Payment Date on which such Installment Payment or payment of interest is due, in
lawful money of the United States of America, in immediately available fonds. If and to the
extent that, on any such date, there are amounts on deposit in the Installment Payment Fund
established under the Trust Agreement, or in any of the accounts therein, which amounts are not
being held for the payment of specific Revenue Obligations, such amounts shall be credited
against the Installment Payment, or payment of interest thereon, as applicable, due on such date.
Section 3.03. Reserved.
Section 3.04. Obligation Absolute. The obligation of the District to make the
Installment Payments, and payments of interest thereon, and other payments required to be made
by it under this Article, solely from Net Revenues, is absolute and unconditional, and until such
time as the Installment Payments, payments of interest thereon, and such other payments shall
have been paid in full (or provision for the payment thereof shall have been made pursuant to
Article N), the District shall not discontinue or suspend any Installment Payments, or payments
of interest thereon, or other payments required to be made by it hereunder when due, whether or
not the Project or any part thereof is operating or operable or has been completed, or its use is
suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such
Installment Payments, payments of interest thereon, and other payments shall not be subject to
reduction whether by offset or otherwise and shall not be conditional upon the performance or
nonperformance by any party of any agreement for any cause whatsoever.
Section 3.05. Nature of Agreement. This Installment Purchase Agreement constitutes
a Senior Obligation and, as such, shall be subject to the provisions of the Master Agreement and
shall be afforded all of the advantages, benefits, interests and security afforded Senior
Obligations pursuant to the Master Agreement.
411635412 6
ARTICLE IV
PREPAYMENT OF INSTALLMENT PAYMENTS
Section 4.01. Prepayment of Installment Payments. (a) The Installment Payments
shall be subject to prepayment prior to their respective Installment Payment Dates as provided in
Article IV of the Trust Agreement.
(b) The District may prepay, from any source of available funds, all or any portion of
the Installment Payments by depositing with the Trustee moneys or securities as provided, and
subject to the terms and conditions set forth, in Article X of the Trust Agreement sufficient to
pay such Installment Payments, and the interest thereon, when due or to pay such Installment
Payments, and the interest thereon, through a specified date on which the District has a right to
prepay such Installment Payments pursuant to subsection(a) of this Section, and to prepay such
Installment Payments on such prepayment date, at a prepayment price determined in accordance
with subsection(a)of this Section.
(c) If less than all of the Installment Payments are prepaid then, as of the date of such
prepayment pursuant to subsection (a) of this Section, or the date of a deposit pursuant to
subsection (b) of this Section, the schedule of Installment Payments shall be recalculated to take
such prepayment into account.
Section 4.02. Notice. The District shall give written notice to the Trustee specifying the
date on which the prepayment will be made prior to making any prepayment pursuant to this
Article, which date shall be not less than 25 nor more than 60 days from the date such notice is
given to the Trustee,unless such time period shall be waived by the Trustee.
Section 4.03. Discharge of Obligations. If all Installment Payments, and the interest
thereon, shall be paid as and when due in accordance with the terms hereof, or prepaid in
accordance with Section 4.01 hereof, and if all Revenue Obligations shall be fully paid, or
provision therefor made in accordance with Article X of the Trust Agreement, and the Trust
Agreement shall be discharged by its terms, then all agreements, covenants and other obligations
of the District hereunder shall thereupon cease, terminate and become void and be discharged
and satisfied.
ARTICLE V
COVENANTS
Section 5.01. Compliance with Master Agreement. The District will faithfully
observe and perform all the agreements, conditions, covenants and terms contained in the Master
Agreement required to be observed and performed by it and will not cause, suffer or permit any
default to occur thereunder.
Section 5.02. Compliance with Installment Purchase Agreement The District will
punctually pay the Installment Payments, and interest thereon, and other payments required to be
made by it hereunder in strict conformity with the terms hereof, and will faithfully observe and
perform all the agreements, conditions, covenants and terms contained herein required to be
411635412 7
observed and performed by it, will not cause, suffer or permit any default to occur hereunder and
will not terminate this Installment Purchase Agreement for any cause including, without limiting
the generality of the foregoing, any acts or circumstances that may constitute failure of
consideration, destruction of or damage to the Project, commercial frustration of purpose, any
change in the tax or other laws of the United States of America or of the State or any political
subdivision of either or any failure of the Corporation to observe or perform any agreement,
condition, covenant or term contained herein required to be observed and performed by it,
whether express or implied, or any duty, liability or obligation arising out of or connected
herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the
Corporation or any force majeure, including acts of God, tempest, storm, earthquake, war,
rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial
disputes, lock outs, lack of transportation facilities, fire, explosion, or acts or regulations of
governmental authorities.
Section 5.03. Protection of Security and Rights. The District will preserve and protect
the security hereof and the rights of the Trustee, as assignee of the Corporation, to the
Installment Payments, and interest thereon, and other payments required to be made by the
District hereunder and will warrant and defend such rights against all claims and demands of all
Persons.
Section 5.04. Indemnification of Corporation. To the extent permitted by law, the
District hereby agrees to indemnify and hold the Corporation and its members and officers
harmless against any and all liabilities which might arise out of or are related to the Project, this
Installment Purchase Agreement or the Revenue Obligations, and the District further agrees to
defend the Corporation and its members and officers in any action arising out of or related to the
Project,this Installment Purchase Agreement or the Revenue Obligations.
Section 5.05. Further Assurances. The District will adopt, deliver, execute and make
any and all further assurances, instruments and resolutions as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance hereof and for the better assuring
and confirming unto the Corporation, or unto the Trustee, as assignee of the Corporation, the
rights and benefits provided herein to the Corporation, or to the Trustee, as assignee of the
Corporation.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION
Section 6.01. Events of Default. The following shall be Events of Default under this
Installment Purchase Agreement, and "Event of Default' shall mean any one or more of the
following events:
(a) if default shall be made by the District in the due and punctual payment of or on
account of any Senior Obligation as the same shall become due and payable;
(b) if default shall be made by the District in the performance of any of the
agreements or covenants required herein, in the Trust Agreement or in the Master Agreement to
411635412 8
be performed by it (other than as specified in (a) above), and such default shall have continued
for a period of 30 days after the District shall have been given notice in writing of such default
by the Corporation or the Trustee; provided, however, that the party or parties giving such notice
may agree in writing to a reasonable extension of such period prior to the expiration of such 30
day period and, provided further, that if the District shall proceed to take curative action which,
if begun and prosecuted with due diligence, cannot be completed within such a period of 30
days, then such period shall be increased without such written extension to such extent as shall
be necessary to enable the District to diligently complete such curative action and such default
shall not become an Event of Default for so long as shall be necessary to diligently complete
such curative action; or
(c) if the District shall file a petition or answer seeking arrangement or reorganization
under the federal bankruptcy laws or any other applicable law of the United States of America or
any state therein, or if a court of competent jurisdiction shall approve a petition filed with or
without the consent of the District seeking arrangement or reorganization under the federal
bankruptcy laws or any other applicable law of the United States of America or any state therein,
or if under the provisions of any other law for the relief or aid of debtors any court of competent
jurisdiction shall assume custody or control of the District or of the whole or any substantial part
of its property.
Section 6.02. Remedies on Default. Upon the occurrence of an Event of Default, the
Trustee,as assignee of the Corporation, shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce
its rights against the District and to compel the District to perform and carry out its duties under
applicable law and the agreements and covenants required to be performed herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Trustee, as assignee of the Corporation;
(c) by suit in equity to require the District to account as the trustee of an express trust;
and to have a receiver or receivers appointed for the Wastewater System and of the issues,
earnings, income, products and profits thereof, pending such proceedings, with such powers as
the court making such appointment shall confer.
Section 6.03. Non-Waiver. Nothing in this Article or in any other provision hereof
shall affect or impair the obligation of the District, which is absolute and unconditional, to pay
the Installment Payments, and the interest thereon, to the Trustee, as assignee of the Corporation,
at the respective due dates from the Net Revenues and the other funds herein committed for such
payment, or shall affect or impair the right of the Trustee, as assignee of the Corporation, which
is also absolute and unconditional, to institute suit to enforce such payment by virtue of the
contract embodied herein.
A waiver of any default or breach of duty or contract by the Trustee, as assignee of the
Corporation, shall not affect any subsequent default or breach of duty or contract or impair any
rights or remedies on any such subsequent default or breach of duty or contract. No delay or
omission by the Trustee, as assignee of the Corporation,to exercise any right or remedy accruing
411635412 9
upon any default or breach of duty or contract shall impair any such right or remedy or shall be
construed to be a waiver of any such default or breach of duty or contract or an acquiescence
therein, and every right or remedy conferred upon the Trustee, as assignee of the Corporation,by
applicable law or by this Article may be enforced and exercised from time to time and as often as
shall be deemed expedient by the Trustee, as assignee of the Corporation.
If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned
or determined adversely to the Trustee, as assignee of the Corporation, the District and the
Trustee, as assignee of the Corporation, shall be restored to their former positions, rights and
remedies as if such action,proceeding or suit had not been brought or taken.
Section 6.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved
to the Trustee, as assignee of the Corporation, is intended to be exclusive of any other remedy,
and each such remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be
exercised without exhausting and without regard to any other remedy conferred by law.
ARTICLE VII
AMENDMENTS
Section 7.01. Amendments. (a) This Installment Purchase Agreement and the rights
and obligations of the District, the Corporation and the Trustee, as assignee of the Corporation,
may be amended or modified from time to time and at any time by a written amendment hereto
executed by the District, the Corporation and the Trustee, as assignee of the Corporation, with
the written consent of the Owners of a majority of the aggregate principal evidenced by Revenue
Obligations then Outstanding. No such amendment shall (i) extend the payment date of any
Installment Payment or reduce the amount of any Installment Payment, or the interest rate
applicable thereto, without the prior written consent of the Owner of each affected Revenue
Obligation, or (ii)reduce the percentage of Owners of the Revenue Obligations whose consent is
required to effect any such amendment or modification, without the prior written consent of the
Owners of all Revenue Obligations then Outstanding.
(b) This Installment Purchase Agreement and the rights and obligations of the
District, the Corporation and the Trustee, as assignee of the Corporation, may be amended or
modified from time to time and at any time by a written amendment hereto executed by the
District, the Corporation and the Trustee, as assignee of the Corporation, without the written
consents of any Owners of the Revenue Obligations, but only to the extent permitted by law and
only for any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms required by the
District, the Corporation or the Trustee, as assignee of the Corporation, to be observed
or performed herein other agreements, conditions, covenants and terns thereafter to be
observed or performed by the District, the Corporation or the Trustee, as assignee of the
Corporation, or to surrender any right or power reserved herein to or conferred herein
on the District,the Corporation or the Trustee,as assignee of the Corporation;
411635412 10
(ii) to make such provisions for the purpose of curing any ambiguity or of
correcting, curing or supplementing any defective provision contained herein or in
regard to questions arising hereunder which the District, the Corporation or the Trustee,
as assignee of the Corporation, may deem desirable or necessary and not inconsistent
herewith; and
(iii) to make such other changes herein or modifications hereto as the District,
the Corporation or the Trustee, as assignee of the Corporation, may deem desirable or
necessary, and which shall not materially adversely affect the interests of the Owners of
the Revenue Obligations.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Liability of District Limited. Notwithstanding anything contained herein
to the contrary,the District shall not be required to advance any moneys derived from any source
of income other than Net Revenues and the other funds provided herein for the payment of the
Installment Payments, and the interest thereon, and other payments required to be made by it
hereunder, or for the performance of any agreements or covenants required to be performed by it
contained herein. The District may, however, but in no event shall be obligated to, advance
moneys for any such purpose so long as such moneys are derived from a source legally available
for such purpose and may be legally used by the District for such purpose.
The obligation of the District to pay the Installment Payments, and the interest thereon,
and other payments required to be made by it hereunder is a special obligation of the District
payable, in the manner provided herein, solely from Net Revenues and other funds provided for
herein, and does not constitute a debt of the District or of the State, or of any political
subdivision thereof, in contravention of any constitutional or statutory debt limitation or
restriction. Neither the faith and credit nor the taxing power of the District or the State, or any
political subdivision thereof, is pledged to the payment of the Installment Payments, or the
interest thereon, or other payments required to be made hereunder.
Section 8.02. Limitation of Rights. Nothing in this Installment Purchase Agreement
expressed or implied is intended or shall be construed to give to any Person other than the
District, the Corporation and the Trustee, as assignee of the Corporation, any legal or equitable
right, remedy or claim under or in respect of this Installment Purchase Agreement or any
covenant, condition or provision therein or herein contained, and all such covenants, conditions
and provisions are and shall be held to be for the sole and exclusive benefit of the District, the
Corporation and the Trustee, as assignee of the Corporation.
Section 8.03. Assignment. The District and the Corporation hereby acknowledge the
transfer, conveyance and assignment by the Corporation to the Trustee of all of the Corporation's
rights, title and interest in and to this Installment Purchase Agreement (excepting its rights to
indemnification hereunder), including the right to receive Installment Payments, and the interest
thereon,from the District,pursuant to the Trust Agreement
411635412 11
Section 8.04. Notices. Any written notice, statement, demand, consent, approval,
authorization, offer, designation, request or other communication to be given hereunder shall be
given to the party entitled thereto at its address set forth below, or at such other address as such
party may provide to the other parties in writing from time to time, namely:
If to the District: Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, California 92708
Attention: Director of Finance and Administrative Services
If to the Corporation: Orange County Sanitation District Financing Corporation
c/o Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley, California 92708
Attention: Treasurer
If to the Trustee: U.S. Bank National Association
633 West Fifth Street, 241"Floor
Los Angeles, California 90071
Attention: Corporate Trust
Each such notice, statement, demand, consent, approval, authorization, offer, designation,
request or other communication hereunder shall be deemed delivered to the party to whom it is
addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic
communication, whether by facsimile or telecopier, upon the sender's receipt of an appropriate
answerback or other written acknowledgment, (c) if given by registered or certified mail, return
receipt requested, deposited with the United States mail postage prepaid, 72 hours after such
notice is deposited with the United States mail, (d) if given by overnight courier, with courier
charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other
means,upon delivery at the address specified in this Section.
Section 8.05. Successor Is Deemed Included in all References to Predecessor.
Whenever the District or the Corporation is named or referred to herein, such reference shall be
deemed to include the successor to the powers, duties and functions that are presently vested in
the District or the Corporation, and all agreements and covenants required hereby to be
performed by or on behalf of the District or the Corporation shall bind and inure to the benefit of
the respective successors thereof whether so expressed or not
Section 8.06. Waiver of Personal Liability. No official, officer or employee of the
District shall be individually or personally liable for the payment of the Installment Payments, or
the interest thereon, or other payments required to be made by the District hereunder, but nothing
contained herein shall relieve any official, officer or employee of the District from the
performance of any official duty provided by any applicable provisions of law or hereby.
Section 8.07. Article and Section Headings. Gender and References. The headings
or titles of the several Articles and Sections hereof and the table of contents appended hereto
shall be solely for convenience of reference and shall not affect the meaning, construction or
411635412 12
effect hereof, and words of any gender shall be deemed and construed to include all genders. All
references herein to "Articles," "Sections" and other subsections or clauses are to the
corresponding articles, sections, subsections or clauses hereof; and the words "hereby,""herein,"
"hereof," "hereto," "herewith" and other words of similar import refer to this Installment
Purchase Agreement as a whole and not to any particular Article, Section, subdivision or clause
hereof.
Section 8.08. Partial Invalidity. If any one or more of the agreements or covenants or
portions thereof required hereby to be performed by or on the part of the District or the
Corporation shall be contrary to law, then such agreement or agreements, such covenant or
covenants or such portions thereof shall be null and void and shall be deemed separable from the
remaining agreements and covenants and portions thereof and shall in no way affect the validity
hereof.
Section 8.09. Governing Law. This Installment Purchase Agreement shall be construed
and governed and construed in accordance with the laws of the State.
Section 8.10. Execution in Counterparts. This Installment Purchase Agreement may
be executed in several counterparts, each of which shall be deemed an original, and all of which
shall constitute but one and the same instrument.
411635412 13
IN WITNESS WHEREOF,the parties hereto have executed this Installment Purchase
Agreement by their officers thereunto duly authorized as of the day and year first written above.
ORANGE COUNTY SANITATION DISTRICT
By:
Chair of the Board of Directors
(SEAL)
Attest:
By:
Clerk of the Board of Directors
ORANGE COUNTY SANITATION
DISTRICT FINANCING CORPORATION
By:
Treasurer
411635412 14
EXHIBIT A
DESCRIPTION OF PROJECT
The Project is consists of the acquisition, construction and installation of certain
improvements to the Wastewater System, including the acquisition, construction and installation
of improvements to the District's collection system, two wastewater treatment plants, and Ocean
Outfall systems, including the following Project components:
Magnolia Trunk Sewer Trickling Filters at Plant 2
Ellis Avenue Pump Station Sludge Digester at Plant 1
Rocky Point Pump Station Sludge Dewatering at Plant 1 and 2
Bitter Point Pump Station Rehabilitation of Solids Storage
Bitter Point Force Main Rehabilitation Silos C &D at Plant 2
Euclid Relief Improvements -Headworks at Plant 2 Digester Rehabilitation at Plant 2
Primary Treatment System Rehabilitation at Plant 2 Cable Tray Improvements at Plant 1 and 2
New Secondary Treatment System at Plant 1 Rehabilitation of Odor Control Facilities
A portion of the Project in the amount of$ shall be sold and purchased
as described in Article II of this Installment Purchase Agreement.
411635412 A-1
DRAFT OF
12/01/14
ESCROW AGREEMENT
by and between
ORANGE COUNTY SANITATION DISTRICT
and
MUFG UNION BANK N.A.,
as Escrow Agent and Prior Trustee
IV
Dated as of February 1, 2015
Orange County Sanitation District
Certificates of Participation
Series 2007B
4116080G2 11411481
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Escrow Agreement'), dated as of February 1,
2015, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county
sanitation district organized and existing under the laws of the State of California (the
"District'), and MUFG UNION BANK, N.A., a national banking association organized and
existing under the laws of the United States of America, as escrow agent (the "Escrow Agent")
and as trustee under the Prior Trust Agreement referenced below(the"Prior Trustee").
WITNESSETH:
WHEREAS, to finance the acquisition, construction and installation of certain
improvements to its wastewater system (the "Prior Project'), the District has heretofore
purchased the Prior Project from the Orange County Sanitation District Financing Corporation
(the "Corporation"), and the Corporation has heretofore sold the Prior Project to the District, for
the installment payments (the "Prior Installment Payments") to be made by the District pursuant
to the Installment Purchase Agreement, dated as of December 1, 2007 (the "Prior Installment
Purchase Agreement'),by and between the District and the Corporation;
WHEREAS, to provide the funds necessary to finance the Prior Project, the District
caused the execution and delivery of the Orange County Sanitation District Certificates of
Participation, Series 2007B (the "Prior Certificates"), evidencing direct, undivided fractional
interests in the related Prior Installment Payments, pursuant to the Trust Agreement, dated as of
December 1, 2014 (the "Prior Trust Agreement'), by and among the Prior Trustee, formerly
known as Union Bank of California,N.A., the Corporation and the District;
WHEREAS, the District has determined to refinance a portion of the Prior Project by
paying and prepaying a portion of the remaining principal components of the Prior Installment
Payments (the "Refunded Installment Payments"), and the interest components thereof to the
date of prepayment, thereby causing to be prepaid a portion of the currently outstanding Prior
Certificates maturing on February 1 in the yews through , inclusive, in the
aggregate principal amount of$ (the "Refunded Certificates");
WHEREAS, to provide the funds necessary to pay and prepay the Refunded Installment
Payments, the District has caused to be executed and delivered the Orange County Sanitation
District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"),
evidencing principal in the aggregate amount of $ , pursuant to the Trust
Agreement, dated as of February 1, 2015, by and among U.S Bank National Association, as
trustee, the Corporation and the District;
WHEREAS, in accordance with the Prior Trust Agreement, the prepayment of the
Refunded Installment Payments will be applied to the payment of principal and interest
evidenced by the Refunded Certificates to and including February 1, 2017 (the "Prepayment
Date") and to the prepayment of the outstanding Refunded Certificates on the Prepayment Date
at a prepayment price equal to the principal amount thereof plus accrued interest thereon,without
premium(the "Prepayment Price"),pursuant to this Escrow Agreement;
411WSOU
NOW THEREFORE, in consideration of the premises and of the mutual agreements
and covenants contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
Section 1. Definitions. Unless otherwise defined herein, capitalized terns used
herein shall have the meanings ascribed to such terns in the Prior Trust Agreement.
Section 2. The Escrow Fund. (a) There is hereby established a fund (the "Escrow
Fund") to be held as an irrevocably pledged escrow by the Escrow Agent, which the Escrow
Agent shall keep separate and apart from all other funds of the District and the Escrow Agent
and to be applied solely as provided in this Escrow Agreement. Pending application as provided
in this Escrow Agreement, amounts on deposit in the Escrow Fund are hereby pledged solely to
the payment of the principal and interest evidenced by the Refunded Certificates to and including
the Prepayment Date and the payment of the Prepayment Price on the Prepayment Date, which
amounts shall be held in trust by the Escrow Agent for the Owners of the Refunded Certificates.
(b) The Prior Trustee is hereby instructed to release $ held in the
Reserve Fund established under Section 5.03 of the Prior Trust Agreement (the "Prior Reserve")
for deposit in the Escrow Fund. As reflected in the report of the nationally recognized firm of
independent certified public accountants delivered in connection herewith, upon the execution
and delivery of the Revenue Obligations, there shall be deposited in the Escrow Fund
$ received from the proceeds of the sale of the Revenue Obligations and
$ from release of the Prior Reserve for a total of $ (the
"Escrow Deposit').
(c) The District has determined or caused to be determined that upon the deposit of
the Escrow Deposit pursuant to Section 2(b) hereof, $ of the moneys on
deposit in the Escrow Fund will be invested in the Government Obligations specified in
Schedule I hereto which, together with uninvested cash in the amount of $ , will be
sufficient to make the payments required by Section 4 hereof.
Section 3. Use of Moneys in Escrow Fund. (a) The Escrow Agent hereby
acknowledges deposit of the moneys described in Section 2(b) hereof and agrees to invest such
moneys credited to the Escrow Fund in the Government Obligations specified in Schedule I
hereto.
(b) The Owners of the Refunded Certificates shall have a first and exclusive lien on
the moneys and Government Obligations credited to the Escrow Fund until such moneys and
Government Obligations are used and applied as provided in this Escrow Agreement and the
Prior Trust Agreement to pay principal and interest evidenced by the Refunded Certificates to
and including the Prepayment Date and to prepay in full then outstanding Refunded Certificates
on the Prepayment Date.
(c) The Escrow Agent shall not be held liable for investment losses resulting from
compliance with the provisions of this Escrow Agreement.
aucosoU 3
Section 4. Payment of Refunded Certificates. From the uninvested money and
proceeds of maturing Government Obligations held in the Escrow Fund, the Escrow Agent shall
apply such amounts to the payment of the principal and interest evidenced by the Refunded
Certificates to and including the Prepayment Date and to the payment of the Prepayment Price of
the Refunded Certificates on the Prepayment Date, all as set forth in Schedule II hereto. To the
extent that the amount on deposit in the Escrow Fund on the Prepayment Date is in excess of the
amount necessary to make the required payments with respect to the Refunded Certificates, such
excess shall be transferred to the Trustee for deposit in the Installment Payment Fund established
under the Prior Trust Agreement.
Section 5. Irrevocable Instructions to Mail Notices. The District hereby
irrevocably instructs the Prior Trustee to give notice within five business days of delivery of the
Revenue Obligations of defeasance of the Refunded Certificates to the Owners thereof and to
Assured Guaranty Municipal Corp., as successor to Financial Security Assurance Inc.,
substantially in the form set forth in Exhibit A hereto. The District hereby designates the
Refunded Certificates for prepayment on the Prepayment Date and hereby irrevocably instructs
the Prior Trustee, to give, in accordance with the provisions of Section 4.04 of the Prior Trust
Agreement, notice of prepayment of such Refunded Certificates to the Owners thereof,
substantially in the form set forth in Exhibit B hereto.
Section 6. Performance of Duties: Acknowledgement with Respect to
Irrevocable Instructions. The Escrow Agent hereby agrees to perform the duties set forth
herein and agrees that the irrevocable instructions to the Escrow Agent herein provided are in a
form satisfactory to it.
Section 7. Substitution of Government Obligations. (a) Upon the written direction
of the District, subject to the conditions and limitations set forth in paragraph (c) below, the
Escrow Agent shall sell, transfer and request the redemption of or otherwise dispose of the initial
Government Obligations held in and credited to the Escrow Fund; provided that, subject to
paragraph (c) below, there are substituted therefor and delivered to the Escrow Agent other
Government Obligations as hereinafter provided.
(b) Upon the written direction of the District, subject to the conditions and limitations
set forth in paragraph (c) below, the Escrow Agent shall reinvest cash balances in the Escrow
Fund in Government Obligations; provided, that any such securities purchased pursuant to this
paragraph (b) shall mature (1) on the next Interest Payment Date for any of the Refunded
Certificates or(2) as on such other date or dates necessary to meet the requirements of Section 4
hereof, as certified by a nationally recognized firm of independent certified public accountants.
(c) The District, by this Escrow Agreement, hereby covenants and agrees that it will
not request the Escrow Agent to exercise any of the powers described in paragraph (a) or (b)
above in any manner, which if such exercise of powers had been reasonably expected on the date
of delivery of the Refunded Certificates, would cause any of the Refunded Certificates to be
arbitrage bonds within the meaning of section 103(c) of the Internal Revenue Code of 1986 (the
"Code"), and the regulations thereunder in effect on the date of such request and applicable to
obligations issued on the date of such Refunded Certificates. Any purchase of substitute
securities by the Escrow Agent shall be accomplished in accordance with paragraph (a) above to
411WSOU 4
the extent such purchases are to be made with the proceeds derived from the sale, transfer,
redemption or other disposition of the Government Obligations. Such sale, transfer, redemption
or other disposition of the Government Obligations and such substitution may be effected only
by a simultaneous transaction and only if(i)a nationally recognized firm of independent certified
public accountants shall certify that (a) such substitute securities, together with the Government
Obligations and cash which will continue to be held in the Escrow Fund, will mature in such
principal amounts and earn interest in such amounts and at such times so that sufficient moneys
will be available from such maturing principal and interest to pay, as the same become due, all
principal,premium and interest payable with respect to the Refunded Certificates which have not
previously been paid, and (b) the amounts and dates of the anticipated payments by the Escrow
Agent of the principal, premium and interest payable with respect to the Refunded Certificates
will not be diminished or postponed thereby, (ii) the Escrow Agent shall have received an
opinion of nationally recognized bond counsel to the effect that the sale, transfer, redemption or
other disposition and substitution of the Government Obligations does not cause interest on
either the Revenue Obligations or the Refunded Certificates to be subject to federal income
taxation under relevant provisions of the Code and the regulations thereunder in effect on the
date of such sale, transfer, redemption or other disposition and substitution and applicable to
obligations issued on the date of execution and delivery of the Revenue Obligations.
Section 8. Escrow Agent's Authority to Make Investments. Except as expressly
provided in Sections 3 and 7 hereof, the Escrow Agent shall have no power or duty to invest any
funds held under this Escrow Agreement. The Escrow Agent shall have no power or duty to
transfer or otherwise dispose of the moneys held hereunder except as provided herein.
Section 9. Indemnity. To the extent permitted by law, the District hereby assumes
liability for, and hereby agrees to indemnify, protect, save and keep harmless the Escrow Agent
and its respective successors, assigns, agents, employees and servants, from and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and
disbursements (including reasonable legal fees, expenses and disbursements) of whatsoever kind
and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any
time in any way relating to or arising out of the execution, delivery and performance of this
Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the
moneys deposited therein, and any payment, transfer or other application of moneys by the
Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however,
that the District shall not be required to indemnify the Escrow Agent against the Escrow Agent's
own negligence or willful misconduct or the negligence or willful misconduct of the Escrow
Agent's respective successors, assigns, agents and employees or the material breach by the
Escrow Agent of the terms of this Escrow Agreement. In no event shall the District or the
Escrow Agent be liable to any person by reason of the transactions contemplated hereby other
than to each other as set forth in this Section. The indemnities contained in this Section shall
survive the termination of this Escrow Agreement.
Section 10. Responsibilities of Escrow Agent. The Escrow Agent makes no
representation as to the sufficiency of the funds deposited in accordance with Section 2(b) and
invested pursuant to Section 3(a) and earnings thereof, if any, to accomplish the prepayment of
the Refunded Certificates pursuant to the Prior Trust Agreement or to the validity of this Escrow
Agreement as to the District and, except as otherwise provided herein, the Escrow Agent shall
411 W80&2 5
incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the
performance of its duties under this Escrow Agreement except for its own negligence, willful
misconduct or default, and the duties and obligations of the Escrow Agent shall be determined by
the express provisions of this Escrow Agreement. The Escrow Agent may consult with counsel,
who may or may not be counsel to the District, and in reliance upon the written opinion of such
counsel shall have full and complete authorization and protection in respect of any action taken,
suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent
shall deem it necessary or desirable that a matter be proved or established prior to taking,
suffering, or omitting any action under this Escrow Agreement, such matter (except the matters
set forth herein as specifically requiring a certificate of a nationally recognized firm of
independent certified public accountants or an opinion of counsel of recognized standing in the
field of law relating to municipal bonds) may be deemed to be conclusively established by a
written certification of the District.
The Escrow Agent undertakes to perform only such duties as are expressly set forth in
this Agreement and no implied duties, covenants or obligations shall be read into this Agreement
against the Escrow Agent.
The Escrow Agent may resign by giving written notice to the District, and upon receipt of
such notice the District shall promptly appoint a successor Escrow Agent. If the District does
not appoint a successor Escrow Agent within thirty (30) days of receipt of such notice, the
resigning Escrow Agent may petition a court of competent jurisdiction for the appointment of a
successor Escrow Agent, which court may thereupon, upon such notice as it shall deem proper,
appoint a successor Escrow Agent. Upon acceptance of appointment by a successor Escrow
Agent, the resigning Escrow Agent shall transfer all amounts held by it in the Escrow Fund to
such successor Escrow Agent and be discharged of any further obligation or responsibility
hereunder.
Section 11. Amendments. The District and the Escrow Agent may (but only with the
consent of the Owners of all of the Refunded Certificates) amend this Escrow Agreement or
enter into agreements supplemental to this Escrow Agreement.
Section 12. Term. This Escrow Agreement shall commence upon its execution and
delivery and shall terminate on the date upon which the Refunded Certificates have been paid in
accordance with this Escrow Agreement.
Section 13. Compensation. The District shall from time to time pay or cause to be
paid to the Escrow Agent the agreed upon compensation for its services to be rendered
hereunder, and reimburse the Escrow Agent for all of its reasonable advances in the exercise and
performance of its duties hereunder; provided, however, that under no circumstances shall the
Escrow Agent be entitled to any lien whatsoever on any moneys or obligations in the Escrow
Fund for the payment of fees and expenses for services rendered or expenses incurred by the
Escrow Agent under this Escrow Agreement or otherwise.
411WSOU 6
Section 14. Severability. If any one or more of the covenants or agreements provided
in this Escrow Agreement on the part of the District or the Escrow Agent to be performed should
be determined by a court of competent jurisdiction to be contrary to law, such covenants or
agreements shall be null and void and shall be deemed separate from the remaining covenants
and agreements herein contained and shall in no way affect the validity of the remaining
provisions of this Escrow Agreement.
Section 15. Counterparts. This Escrow Agreement may be executed in several
counterparts, all or any of which shall be regarded for all purposes as an original but all of which
shall constitute and be but one and the same instrument.
Section 16. Governing Law. This Escrow Agreement shall be construed under the
laws of the State of California.
411WSOU 7
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of the date first above written.
MUFG UNION BANK,N.A.,
as Escrow Agent and Prior Trustee
By:
Authorized Officer
ORANGE COUNTY SANITATION DISTRICT
By:
Lorenzo Tyner,Director of Finance
and Administrative Services
41lWSOU 8
SCHEDULE I
INITIAL GOVERNMENT OBLIGATIONS IN ESCROW FUND
[See attached.]
41160806.2
I-1
SCHEDULED
PAYMENT REQUIREMENTS OF THE REFUNDED CERTIFICATES
ISee attached.]
41lWSOU II-I
EXHIBIT A
NOTICE OF DEFEASANCE
ORANGE COUNTY SANITATION DISTRICT
CERTIFICATES OF PARTICIPATION
SERIES 2007B
MATURING ON FEBRUARY 1 IN THE YEARS THROUGH , INCLUSIVE
Principal CUSIP
Payment Date Interest Rate Principal Outstandine Number*
NOTICE IS HEREBY GIVEN that on February_, 2015, the Orange County Sanitation
District (the "District") caused there to be deposited with MUFG Union Bank, N.A., as escrow
agent (the "Escrow Agent"), pursuant to an Escrow Agreement, dated as of February 1, 2015,by
and between the District and the Escrow Agent, proceeds of its Wastewater Refunding Revenue
Obligations, Series 2015A, together with other available monies, which will be sufficient (i) to
pay the principal and interest evidenced by the District's Certificates of Participation, Series
2007B maturing on February 1 in the years through . inclusive (the "Refunded
Certificates"), to and including February 1, 2017 (the "Prepayment Date") and (ii) to pay all of
the principal evidenced by the Refunded Certificates, plus accrued interest evidenced thereby to
the Prepayment Date, without premium (the "Prepayment Price"), on the Prepayment Date.
Thus, on the Prepayment Date there will become due and payable with respect to each of the
Refunded Certificates the Prepayment Price thereof, and from and after such Prepayment Date,
the interest evidenced thereby shall cease to accrue and be payable. The Escrow Agent is
obligated to pay or cause to be paid to the Owners of the Refunded Certificates all sums due
thereon,but only from moneys deposited with the Escrow Agent as described in this paragraph.
aucosoU A-1
Dated: February_, 2015
By: MUFG Union Bank,N.A.,
as Trustee and Escrow Agent on behalf of the
Orange County Sanitation District
-Neither the District nor the Trastee/Escrow Agent shall have any responsibility for any defect in the CUSIP
numbers that appear in this defiasance notice. The CUSIP numbers have been assigned by an independent service
for convenience of reference, and neither the District nor the Trustee/Escrow Agent shall not be liable for any
inaccuracy in such number.
4116080U A-2
EXHIBIT B
NOTICE OF PREPAYMENT
ORANGE COUNTY SANITATION DISTRICT
CERTIFICATES OF PARTICIPATION
SERIES 2007B
MATURING ON FEBRUARY 1 IN THE YEARS THROUGH , INCLUSIVE
Principal CUSIP
Payment Date Interest Rate Principal Outstandine Number*
NOTICE IS HEREBY GIVEN that the Orange County Sanitation District Certificates of
Participation, Series 2007B, in the maturities and principal amounts specified above (the
"Refunded Certificates") are hereby subject to prepayment on February 1, 2017 (the
"Prepayment Date") at a price equal to the principal evidenced by the Refunded Certificates,plus
accrued interest evidenced thereby to the Prepayment Date, without premium (the "Prepayment
Price"). On the Prepayment Date there will become due and payable with respect to each of the
Refunded Certificates the Prepayment Price thereof, and from and after such Prepayment Date,
the interest evidenced thereby shall cease to accrue and be payable. The Refunded Certificates
shall be surrendered at the address of MUFG Union Bank,N.A., as Trustee, set forth below.
MUFG Union Bank,N.A.
120 S. San Pedro Street, Suite 410
Los Angeles, California 90012
Attention: Bond Redemptions
The method of presentation and delivery of a Refunded Certificate is at the option and risk of the
owner of each Refunded Certificate(the"Owner"). If mail is used,insured registered mail,
return receipt requested is suggested.
The Trustee may be obligated to withhold a percentage of the Prepayment Price from any Owner
who fails to furnish the Trustee with a valid taxpayer identification number or a certification that
such Owner is not subject to backup withholding. Owners who wish to avoid the application of
4116080&2 B-I
these provisions should submit a completed IRS Form W-9 when presenting their Refunded
Certificates.
Dated: 20
By: MUFG Union Bank,N.A.,
as Trustee and Escrow Agent on behalf of the
Orange County Sanitation District
*Neithcr the District nor the Trustee/Escrow Agent shall have any responsibility for any defect in the CUSIP
numbcrs that appear in this prepayment notice. The CUSIP numbers have been assigned by an independent service
for convcmcnce of reference, and neither the District nor the Trustee/Escrow Agent shall not be liable for any
inaccuracy in such number.
41lWSOU B-2
DRAFT OF
12/01/14
CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement'),dated as
of February 1, 2015, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county
sanitation district organized and existing under the laws of the State of California (the "District'), and
DIGITAL ASSURANCE CERTIFICATION LLC, as Dissemination Agent(the"Dissemination Agent').
WITNESSETH:
WHEREAS, the District has caused to be executed and delivered the Orange County Sanitation
District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue Obligations"),
evidencing principal in the aggregate amount of$ ,pursuant to a Trust Agreement,dated as
of the date hereof(the"Trust Agreement'),by and among U.S. Bank National Association,as trustee(the
"Trustee"), the Orange County Sanitation District Financing Corporation (the "Corporation") and the
District;and
WHEREAS, this Disclosure Agreement is being executed and delivered by the District and the
Dissemination Agent for the benefit of the owners and beneficial owners of the Revenue Obligations and
in order to assist the purchaser of the Revenue Obligations in complying with the Rule (as defined
herein);
NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein
contained,the parties hereto agree as follows:
Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings
ascribed thereto in the Trust Agreement or, if not defined therein, in the Master Agreement, dated as of
August 1, 2000, by and between the District and the Corporation. In addition, the following capitalized
terms shall have the following meanings:
"Annual Report" means any Annual Report provided by the District pursuant to, and as
described in, Sections 2 and 3 hereof.
"Annual Report Date" means the date in each yew that is eight months after the end of the
Fiscal Year,which date,as of the date of this Disclosure Agreement,is March 1.
"Disclosure Representative" means the Director of Finance and Administrative Services of the
District, or such other officer or employee of the District as the District shall designate in writing to the
Dissemination Agent and the Trustee from time to time.
"Dissemination Agent" means an entity selected and retained by the District, or any successor
thereto selected by the District. The initial Dissemination Agent shall be Digital Assurance Certification
LLC.
"EMMA" shall mean Electronic Municipal Market Access system, maintained on the internet
at htto://emma.msrb.ore by the MSRB.
"Fiscal Year" shall mean the period beginning on July 1 of each year and ending on the next
succeeding June 30, or any twelve-month or fifty-two week period hereafter selected by the District,with
notice of such selection or change in fiscal year to be provided as set forth herein.
41256736.1 11411481
1
"Listed Events" means any of the events listed in Section 4 hereof and any other event legally
required to be reported pursuant to the Rule.
"MSRB" means the Municipal Securities Rulemaking Board established pursuant to
Section 15B(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or authorized by
the SEC to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the SEC,
filings with the MSRB are to be made through EMMA.
"Official StatemenP" means the Official Statement, dated , 2015, relating to the
Revenue Obligations.
"Participating Underwriter"means any of the original purchaser(s) of the Revenue Obligations
required to comply with the Rule in connection with the offering of the Revenue Obligations.
"Repository"means,until otherwise designated by the SEC,EMMA.
"Rule" means Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as
the same has been or may be amended from time to time.
"SEC" shall mean the United States Securities and Exchange Commission.
Section 2. Provision of Annual Reports.
(a) The District shall provide, or shall cause the Dissemination Agent to provide, to MSRB,
through EMMA, not later than 15 days prior to the Annual Report Date, an Annual Report which is
consistent with the requirements of Section 3 of this Disclosure Agreement. The Annual Report must be
submitted in electronic format, accompanied by such identifying information as provided by the MSRB.
The Annual Report may be submitted as a single document or as separate documents comprising a
package, and may include by reference other information as provided in Section 3 of this Disclosure
Agreement. Not later than 15 Business Days prior to such date, the District shall provide the Annual
Report to the Dissemination Agent. If the Fiscal Year changes for the District, the District shall give
notice of such change in the manner provided under Section 4(e)hereof.
(b) If by 15 Business Days prior to the date specified in subsection(a) for providing the
Annual Report to the MSRB, through EMMA, the Dissemination Agent has not received a copy of the
Annual Report the Dissemination Agent shall contact the District to determine if the District is in
compliance with subsection(a). The District shall provide a written certification with each Annual
Report famished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual
Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon
such certification of the District and shall have no duty or obligation to review such Annual Report.
(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided
to the MSRB by the date required in subsection(a), the Dissemination Agent shall send a notice to the
MSRB in substantially the form attached as Exhibit A.
41256736.1 2
(d) The Dissemination Agent shall:
(i) determine the electronic filing address of, and then-current procedures For
submitting Annual Reports to, the MSRB each year prior to the date for providing the Annual
Report; and
(ii) (if the Dissemination Agent is other than the Trustee), to the extent appropriate
information is available to it,file a report with the Authority certifying that the Annual Report has
been provided pursuant to this Disclosure Agreement, stating the date it was provided.
Section 3. Content of Annual Reports. The District's Annual Report shall contain or
incorporate by reference the following:
(a) Audited financial statements prepared in accordance with generally accepted accounting
principles as promulgated to apply to governmental entities from time to time by the Governmental
Accounting Standards Board. If the District's audited financial statements are not available by the
Annual Report Date,the Annual Report shall contain unaudited financial statements in a format similar to
the financial statements contained in the Official Statement, and the audited financial statements shall be
filed in the same manner as the Annual Report when they become available.
(b) The principal evidenced by the Revenue Obligations Outstanding as of the June 30 next
preceding the Annual Report Date and the principal amount of other Senior Obligations outstanding as of
the June 30 next preceding the Annual Report Date.
(c) Updated information (not to include projections), for the Fiscal Year ended the June 30
next preceding the Annual Report Date, comparable to the information contained in the Official
Statement in Table Nos. 2,4, 6 (only with respect to information on 6 under the headings Fiscal Year and
Sewer Service Charge), 8,9, 10, 11, 12, 13, 14 and 16.
(d) In addition to any of the information expressly required to be provided under subsections
(a), (b) and (c) of this Section, the District shall provide such farther information, if any, as may be
necessary to make the specifically required statements, in the light of the circumstances under which they
are made,not misleading.
Any or all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues with respect to which the District is an"obligated person" (as
defined by the Rule), which are available to the public on EMMA or filed with the SEC. The District
shall clearly identify each such document to be included by reference.
Section 4. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 4, the District shall give, or cause to be given,
notice of the occurrence of any of the Following events with respect to the Revenue Obligations, in a
timely manner not more than ten(10)Business Days after the event:
(1) principal and interest payment delinquencies;
(2) defeasances;
(3) tender offers;
41256736.1 3
(4) rating changes;
(5) adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the tax- status of
the Revenue Obligations;
(6) unscheduled draws on the debt service reserves reflecting financial
difficulties;
(7) unscheduled draws on credit enhancements reflecting financial
difficulties;
(8) substitution of credit or liquidity providers or their failure to perform;or
(9) bankruptcy,insolvency,receivership or similar proceedings.
For these purposes, any event described in the immediately preceding paragraph(9)is considered to occur
when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the
District in a proceeding under the United States Bankruptcy Code or in any other proceeding under state
or federal law in which a court or governmental authority has assumed jurisdiction over substantially all
of the assets or business of the District, or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject to the supervision and orders of a court
or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or
liquidation by a court or governmental authority having supervision or jurisdiction over substantially all
of the assets or business of the District.
(b) Pursuant to the provisions of this Section 4, the District shall give, or cause to be given,
notice of the occurrence of any of the following events with respect to the Revenue Obligations, if
material:
(1) mergers, consolidations,acquisitions,the sale of all or substantially all of
the assets of the obligated persons or their termination;
(2) appointment of a successor or additional Trustee or the change of the
time of a Trustee;
(3) nonpayment related defaults;
(4) modifications to the rights of Owners;
(5) a notices of prepayment; or
(6) release, substitution or sale of property securing repayment of the
Revenue Obligations.
(c) Whenever the District obtains knowledge of the occurrence of a Listed Event, described
in subsection(b)of this Section 4,the District shall as soon as possible determine if such event would be
material under applicable federal securities law.
41256736.1 4
(d) If the District determines that knowledge of the occurrence of a Listed Event described in
subsection(b) of this Section 4 would be material under applicable federal securities law, the District
shall promptly notify the Dissemination Agent in writing and instruct the Dissemination Agent to report
the occurrence to the Repository in a timely manner not more than ten(10)Business Days after the event.
(e) If the Dissemination Agent has been instructed by the District to report the occurrence of
a Listed Event,the Dissemination Agent shall file a notice of such occurrence with the MSRB.
Section 5. Filines with the MSRB. All information, operating data, financial statements,
notices and other documents provided to the MSRB in accordance with this Disclosure Agreement shall
be provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying
information as prescribed by the MSRB.
Section 6. Termination of Reporting Obligation. The District's obligations under this
Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of
all of the Revenue Obligations. If such termination occurs prior to the final maturity of the Revenue
Obligations, the District shall give notice of such termination in the same manner as for a Listed Event
under Section 4 hereof.
Section 7. Dissemination Agent. The District may, from time to time, appoint or engage
another Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement,
and may discharge any such Dissemination Agent,with or without appointing a successor Dissemination
Agent If at any time there is not any other designated Dissemination Agent, the Trustee, if the Trustee
agrees to act, shall be the Dissemination Agent; provided it shall receive written notice of such
designation at the time of such designation. Notwithstanding any other provision to this Disclosure
Agreement to the contrary,the District may provide any Annual Report to Beneficial Owners by means of
posting such Annual Report on an intemet site that provides open access to Beneficial Owners.
Section 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the District may amend this Disclosure Agreement, provided no amendment increasing or
affecting the obligations or duties of the Dissemination Agent shall be made without the consent of such
party, and any provision of this Disclosure Agreement may be waived if such amendment or waiver is
supported by an opinion of counsel expert in federal securities laws acceptable to the District and the
Dissemination Agent to the effect that such amendment or waiver would not, in and of itself, cause the
undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof
but taking into account any subsequent change in or official interpretation of the Rule.
Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed
to prevent the District from disseminating any other information, using the means of dissemination set
forth in this Disclosure Agreement or any other means of communication, or including any other
information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is
required by this Disclosure Agreement. If the District chooses to include any information in any Annual
Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this
Disclosure Agreement, the District shall have no obligation under this Disclosure Agreement to update
such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the District or the Dissemination Agent to
comply with any provision of this Disclosure Agreement, the Trustee, at the written direction of any
Participating Underwriter or the holders of at least 25% of the aggregate amount of principal evidenced
by Outstanding Revenue Obligations and upon being indemnified to its reasonable satisfaction, shall, or
any holder or beneficial owner of the Revenue Obligations may, take such actions as may be necessary
41256736.1 5
and appropriate, including seeking mandate or specific performance by court order, to cause the District,
Trustee or the Dissemination Agent, as the case may be, to comply with its obligations under this
Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of
Default under the Trust Agreement, and the sole remedy under this Disclosure Agreement in the event of
any failure of the District, the Trustee or the Dissemination Agent to comply with this Disclosure
Agreement shall be an action to compel performance.
Section 11. Duties. Immunities and Liabilities of Trustee and Dissemination Agent.
Article Vill of the Trust Agreement is hereby made applicable to this Disclosure Agreement as if this
Disclosure Agreement were (solely for this purpose) contained in the Trust Agreement. Neither the
Trustee nor the Dissemination Agent shall be responsible for the Form or content of any Annual Report or
notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services
provided under this Disclosure Agreement. The Dissemination Agent (if other than the Trustee or the
Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in
this Disclosure Agreement, and the District agrees to indemnify and save the Dissemination Agent, its
officers, directors, employees and agents,harmless against any loss, expense and liabilities which it may
incur arising out of or in the exercise or performance of its powers and duties hereunder, including the
costs and expenses (including attorney's fees) of defending against any claim of liability, but excluding
liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the
District under this Section shall survive resignation or removal of the Dissemination Agent and payment
of the Revenue Obligations.
Section 12. Beneficiaries. This Disclosure Agreement shall more solely to the benefit of the
District, the Trustee, the Dissemination Agent, the Participating Underwriter and holders and beneficial
owners from time to time of the Revenue Obligations, and shall create no rights in any other person or
entity.
Section 13. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
41256736.1 6
IN WITNESS WHEREOF,the parties hereto have executed this Disclosure Agreement as of the
date first above written.
ORANGE COUNTY SANITATION DISTRICT
By:
Lorenzo Tyner
Director of Finance and Administrative Services
DIGITAL ASSURANCE CERTIFICATION LLC,
as Dissemination Agent
By:
Authorized Representative
Acknowledged and Accepted:
U.S.BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
41256736.1 7
EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE
TO FILE ANNUAL REPORT
Name of Obligor: Orange County Sanitation District
Name of Issue: Orange County Sanitation District
Wastewater Refunding Revenue Obligations, Series 2015A
Date of Execution and Delivery: ,2015
NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District')has not
provided an Annual Report with respect to the above-captioned Revenue Obligations as required by
Section 6.09 of the Trust Agreement, dated as of February 1, 2015, by and among U.S. Bank National
Association, as Trustee, the Orange County Sanitation District Financing Corporation and the District.
[The District anticipates that the Annual Report will be filed by .]
Dated: 20_ ORANGE COUNTY SANITATION DISTRICT
By
Title:
cc: Trustee
Dissemination Agent
41256736.1
Fulbright&Jaworsld LLP—Draft of 12/01/14
PRELIMINARY OFFICIAL STATEMENT DATED JANUARY ,2015
'Ecy
y NEW ISSUE—BOOK-ENTRY-ONLY RATINGS:
m 3 S&P:
Fitch:
(See"RATINGS"herein.)
O c In the opinion of Fulbright& Jaworsld LIP, a member of Norton Rose Fulbright, Los Angeles,
c�5 California, Special Counsel, under existing statutes, regulations, rulings and court decisions, and assuming
compliance with the tax covenants described herein, the interest component of each Installment Payment, and
$ the allocable portion thereof disMbutable in respect of any Revenue Obligation, is excluded pursuant to section
103(a)of the Internal Revenue Code of 1986 from the gross income of the owners thereoffor federal income tax
5 purposes and is not an item of tax preference far purposes of the federal alternative minimum tax. It is also the
:9= opinion of Special Counsel that under existing law the interest component of each Installment Payment, and the
y s, allocable portion thereof distributable in respect of any Revenue Obligation, is exempt from personal income
s tares of the State of California.See, however, "TAXMATTERS"herein.
� a
[District Logo] $[Par Amount]* [DAC Logo]
- - ORANGE COUNTY SANITATION DISTRICT
�a WASTEWATER REFUNDING REVENUE OBLIGATIONS
C 5 SERIES 2015A
a T
c 9 Dated: Date of Delivery Due: as shown on the inside cover
The $[Par Amount]' Orange Cowry Sanitation District Wastewater Refunding Revenue Obligations,
Series 2015A (the `Revenue Obligations") are certificates of participation that evidence direct, fractional
undivided interests of the Owners thereof in certain installment payments(the"Installment Payments"),and
c u the interest thereon, to be made by the Orange County Sanitation District (the "District") pursuant to the
Installment Purchase Agreement, dated as of February 1, 2015 (the"Installment Purchase Agreemenf'),by and
a o between the District and the Orange County Sanitation District Financing Corporation (the "Corpomdon").
oPursuant to the Master Agreement for District Obligations, dared as of August 1, 2000 (the "Master
o Agreement"),by and between the District and the Corporation,the District has established conditions and terms
G upon which obligations such as the Installment Payments,and the interest thereon,will be incurred and secured.
Z m Installment Payments under the Installment Purchase Agreement are payable solely from Net Revenues(as more
fully described in the Master Agreement, the "Net Revenues") as provided in the Installment Purchase
'S Agreement, consisting primarily of all income and revenue received by the District from the operation or
r ownership of the Wastewater System of the District (the "Wastewater System") remaining after payment of
c" `o Maintenance and Operation Costs, as further described in"SECURITY AND SOURCES OF PAYMENT FOR
THE REVENUE OBLIGATIONS"herein. The Installment Purchase Agreement provides that the obligation of
a the District to pay the Installment Payments, and payments of interest thereon, and certain other payments
0 o required to be made in accordance with the Installment Purchase Agreement, solely from Net Revenues, is
c `o absolute and unconditional. See "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE
'A c OBLIGATIONS"herein.
� 5
co The proceeds of the Revenue Obligations will be used to(i)prepay and retire a portion of the District's
Certificates of Participation, Series 2007B, currently outstanding in the aggregate principal amount of
$173,325,000 and (ii)pay the costs incurred in connection with the execution and delivery of the Revenue
°m Obligations. See`REFUNDING PLAN"herein.
v.g Interest evidenced by the Revenue Obligations will be payable semiannually on February 1 and
m `o August 1 of each year, commencing on August 1, 2015. See"THE REVENUE OBLIGATIONS"herein. The
9 „
Revenue Obligations initially will be delivered only in book-entry form and will be registered in the name of
�E Cede&Co., as nominee of The Depository Trust Company,New York,New York("DTC'), which will act as
O securities depository for the Revenue Obligations. Individual purchases of the Revenue Obligations will be
a3 ' Preliminary,subject to change.
o=
4719437M 11411481
made in book-entry form only. Purchasers of Revenue Obligations will not receive physical certificates
representing their ownership interests in the Revenue Obligations purchased. The Revenue Obligations will be
delivered in denominations of$5,000 and any integral multiple thereof Payments of principal and interest
evidenced by the Revenue Obligations are payable directly to DTC by U.S. Bank National Association, as
trustee(the"Trusted'). Upon receipt of payments of such principal and interest,DTC will in turn distribute such
payments to the beneficial owners of the Revenue Obligations. See APPENDIX E — "BOOK-ENTRY
SYSTEM"herein.
THE OBLIGATION OF THE DISTRICT TO PAY THE INSTALLMENT PAYMENTS, AND THE
INTEREST THEREON, AND OTHER PAYMENTS REQUIRED TO BE MADE BY IT UNDER THE
INSTALLMENT PURCHASE AGREEMENT IS A SPECIAL OBLIGATION OF THE DISTRICT PAYABLE,
IN THE MANNER PROVIDED IN THE INSTALLMENT PURCHASE AGREEMENT, SOLELY FROM
NET REVENUES AND OTHER FUNDS PROVIDED FOR IN THE INSTALLMENT PURCHASE
AGREEMENT, AND DOES NOT CONSTITUTE A DEBT OF THE DISTRICT OR OF THE STATE OF
CALIFORNIA, OR OF ANY POLITICAL SUBDIVISION THEREOF, IN CONTRAVENTION OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. NEITHER THE FAITH
AND CREDIT NOR THE TAXING POWER OF THE STATE OF CALIFORNIA, OR ANY POLITICAL
SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE INSTALLMENT PAYMENTS, OR
THE INTEREST THEREON, OR OTHER PAYMENTS REQUIRED TO BE MADE UNDER THE
INSTALLMENT PURCHASE AGREEMENT. SEE"SECURITY AND SOURCES OF PAYMENT FOR THE
REVENUE OBLIGATIONS'HEREIN.
This cover page contains information intended for quick reference only. It is not a summary of
this issue. Investors must read the entire Official Statement to obtain information essential to making an
informed investment decision.
BIDS FOR THE PURCHASE OF THE REVENUE OBLIGATIONS WILL BE RECEIVED BY THE
DISTRICT UNTIL : A.M.NEW YORK TIME ON JANUARY ,2015 UNLESS POSTPONED OR
CANCELLED AS SET FORTH IN THE OFFICIAL NOTICE INVITING BIDS.
The Revenue Obligations are offered when, as and if executed and delivered and received by
, as the Initial Purchaser, subject to the approval of Fulbright&Jaworski LIP, a member
of Norton Rose Fulbright, Los Angeles, California,Special Counsel and Disclosure Counsel to the District, and
certain other conditions. Certain legal matters will be passed upon for the District and the Corporation by
Woodruff, Spradlin &Smart, a Professional Corporation, Costa Mesa, California. Public Resources Advisory
Group, Los Angeles, California, has served as financial advisor to the District in connection with the execution
and delivery of the Revenue Obligations. It is anticipated that the Revenue Obligations in definitive form will be
available far delivery through the book-entry facilifies of DTC on or about February 2015.
Dated: January—,2015
491943!&5
MATURITY SCHEDULE*
Maturity Date Principal Interest CUSIPi
(Februarys Amount Rate Yield Price (Base No. 68428T1
2018 $ % % %
2019
2020
2021
2022
2023
2024
2025
2026
2027
Preliminary,subject to change.
t CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global
Services, managed by Standard &Poor's Financial Services LLC on behalf of The American Bankers Association. This
data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the
District,the Initial Purchaser or the Financial Advisor is responsible for the selection or correctness of the CUSIP numbers
set forth herein.
4719437M
[INSERT MAP]
47194378.5
ORANGE COUNTY SANITATION DISTRICT
Board of Directors
Tom Beamish (Chair) La Habra
John Nielsen—(Vice Chair)—Tustin
Lucille KringAnaheim Teresa Smith—Orange
Brett Murdock—Brea Scott Nelson—Placentia
Fred Smith—Buena Park David Benavides Santa Ana
Prakash NarainCypress Michael Levitt—Seal Beach
Steve Nagel—Fountain Valley David Shawver—Stanton
Gregory Sebourn Fullerton Brad Reese Villa Park
Steve Jones—Garden Grove Gene Hernandez— Yorba Linda
Joe Carchio—Huntington Beach James M. Ferryman—Costa Mesa Sanitary District
Steven Choi—Irvine John Withers—Irvine Ranch Water District
Peter Kim—La Palma Tyler Diep—Midway City Sanitary District
Richard Murphy—Los Alamitos Janet Nguyen— Member of the Orange County
Keith Curry Newport Beach Board of Supervisors
Executive Mana¢ement of the District
James Herberg, General Manager
Robert P. Ghirelli,D.Env.,Assistant General Manager
Lorenzo Tyner,Director of Finance and Administrative Services
Ed Torres,Director of Operations and Maintenance
Nick Arhontes,Director of Facilities Support Services
Robert Thompson,Director of Engineering
Jeff Reed,Director of Human Resources
Special Services
Special Counsel and Disclosure Counsel
Fulbright&Jaworski LLP
(a member of Norton Rose Fulbright)
Los Angeles,California
District General Counsel
Bradley R.Hogin
Woodruff, Spradlin&Smart,a Professional Corporation
Costa Mesa,California
Financial Advisor
Public Resources Advisory Group
Los Angeles,California
Trustee Verification Agent
U.S. Bank National Association Grant Thornton LLP
Los Angeles,California Minneapolis,Minnesota
4919437M
This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of the Revenue Obligations by any person in any jurisdiction in which it is
unlawful for such person to make such an offer, solicitation or sale. The information set forth herein has
been provided by the Orange County Sanitation District (the "District') and other sources that are
believed by the District to be reliable. No dealer,broker, salesperson or other person has been authorized
to give any information or to make any representations other than those contained in this Official
Statement. If given or made, such other information or representations must not be relied upon as having
been authorized by the District,the Corporation or the Initial Purchaser in connection with any reoffering.
This Official Statement is not to be construed as a contract with the purchasers of the Revenue
Obligations. Statements contained in this Official Statement which involve estimates, projections,
forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such
and are not to be construed as representations of facts.
The information and expressions of opinion herein are subject to change without notice and
neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the District or the Corporation since
the date hereof This Official Statement is submitted with respect to the sale of the Revenue Obligations
referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless
authorized in writing by the District. All summaries of the documents and laws are made subject to the
provisions thereof and do not purport to be complete statements of any or all such provisions. Preparation
of this Official Statement and its distribution have been duly authorized and approved by the District and
the Corporation.
In connection with the offering of the Revenue Obligations, the Initial Purchaser in connection
with any reoffering may over-allot or effect transactions which stabilize or maintain the market price of
the Revenue Obligations at a level above that which might otherwise prevail in the open market. Such
stabilizing,if commenced,may be discontinued at any time. The Initial Purchaser in connection with any
reoffering may offer and sell the Revenue Obligations to certain dealers,institutional investors and others
at prices lower than the public offering prices stated on the inside cover page hereof and such public
offering prices may be changed from time to time by the Initial Purchaser.
Certain statements included or incorporated by reference in this Official Statement constitute
forward-looking statements. Such statements me generally identifiable by the terminology used such as
"plan,""expect,""estimate,""budget'or other similar words. The achievement of certain results or other
expectations contained in such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results,performance or achievements described to
be materially different from any future results, performance or achievements expressed or implied by
such forward-looking statements.
4919437M
TABLE OF CONTENTS
(continued)
Paee
INTRODUCTION......................................................................................................................... 1
General............................................................................................................................... 1
TheDistrict........................................................................................................................2
Security and Sources of Payment for the Revenue Obligations........................................2
Continuing Disclosure.......................................................................................................3
Miscellaneous ....................................................................................................................3
REFUNDING PLAN.....................................................................................................................4
ESTIMATED SOURCES AND USES OF FUNDS..................................................................... 5
THE REVENUE OBLIGATIONS................................................................................................ 5
General............................................................................................................................... 5
Prepayment Provisions.......................................................................................................6
SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS............7
InstallmentPayments.........................................................................................................7
Available Funds of the District.......................................................................................... 8
NetRevenues.....................................................................................................................9
Rate Stabilization Account.............................................................................................. 10
Allocation of Revenues.................................................................................................... 10
RateCovenant.................................................................................................................. 11
Limitations on Issuance of Additional Obligations......................................................... 11
Insurance.......................................................................................................................... 13
Allocation of Installment Payments................................................................................. 14
THEDISTRICT........................................................................................................................... 15
Background...................................................................................................................... 15
Organization and Administration..................................................................................... 16
Services............................................................................................................................ 17
ServiceArea..................................................................................................................... 17
Employees........................................................................................................................ 18
RetirementPlan................................................................................................................ 19
Other Post-Employment Benefits....................................................................................21
RiskManagement............................................................................................................21
ExistingFacilities.............................................................................................................21
Permits, Licenses and Other Regulations ........................................................................23
District Planning and Capital Improvement Program.....................................................24
Groundwater Replenishment System...............................................................................25
Preferred Level of Treatment...........................................................................................26
BiosolidsManagement.....................................................................................................26
UrbanRunoff...................................................................................................................27
Integrated Emergency Response Program.......................................................................28
Five-Year Strategic Planning...........................................................................................29
4919437&5 -i-
TABLE OF CONTENTS
(continued)
Page
DISTRICT REVENUES..............................................................................................................30
SewerService Charges ....................................................................................................30
AdditionalRevenues........................................................................................................33
Wastewater Treatment History........................................................................................34
Customers ........................................................................................................................34
AssessedValuation..........................................................................................................36
Tax Levies and Delinquencies........................................................................................37
BudgetaryProcess............................................................................................................38
Reserves...........................................................................................................................39
Summaryof Operating Data............................................................................................40
Forecasted Operating Data...............................................................................................42
Management's Discussion and Analysis of Operating Data............................................44
Investment of District Funds............................................................................................45
FINANCIAL OBLIGATIONS....................................................................................................45
ExistingIndebtedness......................................................................................................45
AnticipatedFinancings ....................................................................................................46
Direct and Overlapping Bonded Debt..............................................................................46
THECORPORATION................................................................................................................46
LIMITATIONS ON TAXES AND REVENUES........................................................................47
Article XIIIA of the California Constitution...................................................................47
Legislation Implementing Article XIIIA.........................................................................47
Article XIIIB of the California Constitution....................................................................48
Proposition IA and Proposition 22..................................................................................49
Article XIIIC and Article XIIID of the California Constitution......................................50
Other Initiative Measures.................................................................................................52
LEGALMATTERS.....................................................................................................................52
FINANCIAL ADVISOR.............................................................................................................52
ABSENCE OF LITIGATION.....................................................................................................52
FINANCIAL STATEMENTS.....................................................................................................53
TAXMATTERS..........................................................................................................................53
TaxExemption.................................................................................................................53
Tax Accounting Treatment of Bond Premium and Original Issue Discount...................55
Other Tax Consequences.................................................................................................56
4719437M
_ jj _
TABLE OF CONTENTS
(continued)
Page
VERIFICATION OF MATHEMATICAL COMPUTATIONS..................................................56
CONTINUING DISCLOSURE...................................................................................................57
RATINGS....................................................................................................................................57
PURCHASE AND REOFFERING.............................................................................................57
MISCELLANEOUS....................................................................................................................58
APPENDIX A — COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE
ORANGE COUNTY SANITATION DISTRICT FOR FISCAL
YEAR ENDED JUNE 30,2014.............................................................................A-1
APPENDIX B — THE COUNTY OF ORANGE—ECONOMIC AND DEMOGRAPHIC
INFORMATION....................................................................................................B-I
APPENDIX C — SUMMARY OF PRINCIPAL LEGAL DOCUMENTS........................................C-1
APPENDIX D — FORM OF CONTINUING DISCLOSURE AGREEMENT..................................D-1
APPENDIX E — BOOK-ENTRY SYSTEM......................................................................................E-1
APPENDIX F — FORM OF APPROVING OPINION OF SPECIAL COUNSEL............................F-1
4719437M
OFFICIAL STATEMENT
$[PAR AMOUNT]'
ORANGE COUNTY SANITATION DISTRICT
WASTEWATER REFUNDING REVENUE OBLIGATIONS
SERIES 2015A
INTRODUCTION
This introduction contains only a brief summary of certain of the terms of the Revenue
Obligations being offered and a brief description of the Offrcial Statement. All statements contained in
this introduction are qualified in their entirety by reference to the entire Official Statement. References
to, and summaries of,provisions of the Constitution and laws of the State of California (the "State') and
any documents referred to herein do notpurport to be complete and such references are qualified in their
entirely by reference to the complete provisions. All capitalized terms used in this Official Statement and
not otherwise defined herein have the meanings set forth in the Trust Agreement, the Installment
Purchase Agreement and the Master Agreement (each, as hereinafter defined). See APPENDIX C—
"SUMMARY OFPRINCIPAL LEGAL DOCUMENTS—Definitions"herein.
General
This Official Statement, including the cover page and all appendices hereto, provides certain
information concerning the sale and delivery of$[Par Amount]aggregate principal amount of the Orange
County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the "Revenue
Obligations"), which are certificates of participation evidencing direct,fractional undivided interests
in certain installment payments (the "Installment Payments") and the interest thereon, to be made by
the Orange County Sanitation District (the "District") pursuant to the Installment Purchase Agreement,
dated as of February 1, 2015 (the"Installment Purchase Agreement"),by and between the District and the
Orange County Sanitation District Financing Corporation(the"Corporation"). Unless the context clearly
indicates to the contrary, a reference herein to either of the Installment Purchase Agreement or the
Revenue Obligations is intended to refer to the corresponding interest in the Installment Purchase
Agreement. Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the
"Master Agreement'), by and between the District and the Corporation, the District has established and
declared the conditions and terms upon which obligations such as the Installment Purchase Agreement,
and the Installment Payments and the interest thereon, will be incurred and secured. Installment
Payments under the Installment Purchase Agreement are payable solely from Net Revenues (as defined
hereinafter) as provided in the Installment Purchase Agreement, consisting primarily of all income and
revenue received by the District from the operation or ownership of the Wastewater System of the District
(the "Wastewater System") remaining after payment of Maintenance and Operation Costs, as further
described in "SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS"
herein.
Preliminary,subject to change.
47194378.5
The Revenue Obligations me to be executed and delivered pursuant to a Trust Agreement, dated
as of February 1, 2015 (the "Trust Agreement'), by and among the District, the Corporation and U.S.
Bank National Association,as trustee(the"Trustee"). Proceeds from the sale of the Revenue Obligations
will be used to (i)prepay and retire a portion of the District's Certificates of Participation, Series 2007B,
currently outstanding in the aggregate principal amount of$173,325,000,and(ii)pay the costs incurred in
connection with the execution and delivery of the Revenue Obligations. See "REFUNDING PLAN"
herein.
The Revenue Obligations will be executed and delivered in the form of fully registered
certificates of participation, dated as of the date of initial delivery thereof and will mature on February 1
in each such year as set forth on the inside cover page hereof. Interest evidenced by the Revenue
Obligations will be payable semiannually on February 1 and August 1 of each year, commencing on
August 1, 2015. See"THE REVENUE OBLIGATIONS"herein. The Revenue Obligations initially will
be delivered only in book-entry form and will be registered in the name of Cede & Co., as nominee of
The Depository Trust Company,New York, New York ("DTC"), which will act as securities depository
for the Revenue Obligations. The Revenue Obligations will be delivered in denominations of$5,000 and
any integral multiple thereof So long as the Revenue Obligations are in the DTC book-entry system, the
interest, principal, purchase price and prepayment premiums, if any, due with respect to the Revenue
Obligations will be payable by the Trustee, or its agent,to DTC or its nominee. DTC, in tam,will make
payments pursuant to its procedures as described under APPENDIX E — "BOOK—ENTRY SYSTEM"
herein.
The District
The District is a public agency responsible for regional wastewater collection, treatment and
disposal. The District is the sixth largest wastewater discharger in the United States. The District
provides service to an area with a population of approximately 2.5 million people in the northern and
central portion of the County of Orange (the "County"), in a service was of approximately 479 square
miles, treating an average of 198 million gallons per day("mg/d")of wastewater in Fiscal Year 2013-14.
See`THE DISTRICT,""DISTRICT REVENUES"and"FINANCIAL OBLIGATIONS"herein.
Security and Sources of Payment for the Revenue Obligations
The Revenue Obligations, which are certificates of participation, evidence direct, fractional
undivided interests in the Installment Payments, and the interest thereon, paid by the District pursuant to
the Installment Purchase Agreement. The obligation of the District to pay the Installment Payments and
the interest thereon and other payments required to be made by it under the Installment Purchase
Agreement is a special obligation of the District payable, in the manner provided under the Installment
Purchase Agreement, solely from Net Revenues, and other funds as provided in the Installment Purchase
Agreement. Net Revenues generally consist of all income and revenue received by the District from the
operation or ownership of the Wastewater System remaining after payment of Maintenance and Operation
Costs, all as further provided in the Master Agreement. The Installment Purchase Agreement constitutes
a Senior Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all
of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master
Agreement.
The District currently has Outstanding Senior Obligations payable from Net Revenues on a parity
with the Installment Payments under the Installment Purchase Agreement. See "ESTIMATED
SOURCES AND USES OF FUNDS," "FINANCIAL OBLIGATIONS — Existing Indebtedness" and
"THE DISTRICT"herein and APPENDIX C—"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—
Master Agreement'attached hereto.The District has no Subordinate Obligations currently outstanding.
47194378.5
2
Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix, prescribe
and collect fees and charges for the services and facilities of the Wastewater System which will be at least
sufficient to yield during each Fiscal Year (a)Net Revenues equal to 125% of Debt Service on Senior
Obligations for such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all
Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and
charges and may make such classification thereof as it deems necessary, but shall not reduce the fees and
charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at
all times be sufficient to meet the requirements of the Master Agreement. See "SECURITY AND
SOURCE OF PAYMENT FOR THE REVENUE OBLIGATIONS—Rate Covenant"herein.
The obligation of the District to pay the Installment Payments and the interest thereon,and
other payments required to be made by it under the Installment Purchase Agreement is a special
obligation of the District payable, in the manner provided in the Installment Purchase Agreement,
solely from Net Revenues and other funds provided for in the Installment Purchase Agreement,and
does not constitute a debt of the District or of the State, or of any political subdivision thereof, in
contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and
credit nor the taxing power of the District or the State or any political subdivision thereof, is
pledged to the payment of the Installment Payments, or the interest thereon, or other payments
required to be made under the Installment Purchase Agreement. The Installment Purchase
Agreement constitutes a Senior Obligation and, as such, is subject to the provisions of the Master
Agreement and is afforded all of the advantages, benefits, interests and security afforded Senior
Obligations pursuant to the Master Agreement. See"SECURITY AND SOURCES OF PAYMENT
FOR THE REVENUE OBLIGATIONS"herein.
Continuing Disclosure
The District has covenanted for the benefit of holders and beneficial owners of the Revenue
Obligations (a)to provide certain financial information and operating data(the"Annual Report')relating
to the District and the property in the District not later than eight months after the end of the District's
Fiscal Year (which currently would be March 1), commencing with the report for the 2013-14 Fiscal
Year, and (b)to provide notices of the occurrence of certain enumerated events. The specific nature of
the information to be contained in the Annual Report or the notices of enumerated events is set forth in
the Continuing Disclosure Agreement. See "CONTINUING DISCLOSURE" herein and APPENDIX D
—"FORM OF CONTINUING DISCLOSURE AGREEMENT."
Miscellaneous
The descriptions herein of the Trust Agreement,the Master Agreement, the Instalbnent Purchase
Agreement, the Continuing Disclosure Agreement and any other agreements relating to the Revenue
Obligations are qualified in their entirety by reference to such documents. Copies of the Trust
Agreement, the Master Agreement and the Installment Purchase Agreement are on file and available for
inspection at the corporate trust office of U.S. Bank National Association, Los Angeles, California
Attention: Corporate Trust.
47194378.5
3
REFUNDING PLAN
A portion of the net proceeds of sale of the Revenue Obligations, together with other available
moneys, will be used to prepay and retire a portion of the installment payments (the `Refunded
Installment Payments") to be made by the District pursuant to an Installment Purchase Agreement, dated
as of December 1,2007 (the "200713 Installment Purchase Agreement'),by and between the District and
the Corporation. Contemporaneous with the execution and delivery of the 2007B Installment Purchase
Agreement, the District caused the execution and delivery of its Certificates of Participation, Series
2007B (the "2007B Certificates") evidencing direct, fractional undivided interests in certain installment
payments (the "2007B Installment Payments") and the interest thereon, to be made by the District. The
2007B Certificates were executed and delivered on December 20, 2007 in an aggregate principal amount
equal to the original aggregate amount of the 2007B Installment Payments ($300,000,000), of which
$173,325,000 is currently outstanding. Pursuant to the terms of the Trust Agreement, dated as December
1, 2007 (the "2007B Trust Agreement'), by and among the District, the Corporation and MUFG Union
Bank, N.A., as successor trustee thereunder, the prepayment of the 2007B Installment Payments (the
`Refunded Installment Payments"), and prepayment of the 2007B Certificates maturing on February 1 in
the years _` through inclusive, in the aggregate principal amount of $ * in respect
thereof (the `Refunded Certificates"), will be effected by depositing a portion of the proceeds of the
Revenue Obligations,together with other available moneys, in an escrow fund(the"Escrow Fund")to be
created and established under the Escrow Agreement, dated as of February 1, 2015, by and between the
District and MUFG Union Bank,N.A.,as escrow agent thereunder.
The District will cause the Escrow Fund deposit to be invested in Government Obligations (as
defined in the 200713 Trust Agreement). The Government Obligations will be scheduled to mature in
such amounts and at such times and will pay principal and interest at such rates as to provide amounts
sufficient to pay the Refunded Installment Payments and interest thereon and to make scheduled
distributions thereof with respect to the Refunded Certificates due and payable through February 1,2017,
and on February 1, 2017 to prepay without premium the unpaid Refunded Installment Payments, and
through distribution of such prepayment to prepay the remaining Refunded Certificates, all in accordance
with the terms of the 2007B Installment Purchase Agreement, the 2007B Trust Agreement and the
Refunded Certificates. See "VERIFICATION OF MATHEMATICAL COMPUTATIONS" herein. The
amounts deposited in the Escrow Fund will be held in trust solely for the Refunded Certificates and will
not be available to pay the principal and interest evidenced by the Revenue Obligations or any obligations
other than the Refunded Certificates.
Preliminary,subject to change.
47194378.5
4
ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of funds in connection with the execution and delivery of the
Revenue Obligations are presented below.
Sources
Principal Amount of Revenue Obligations $
Premium
Refunded Certificates Reserve Release
Total Sources $
Uses
Deposit to Escrow Fund $
Initial Purchaser's Discount
Costs of Issuance"'
Total Uses $
Costsinclude,among other things,fees and expenses of rating agencies,verification agent, Special
Counsel and Disclosure Counsel,and the initial fees of the Tmstee.
THE REVENUE OBLIGATIONS
General
The Revenue Obligations will be prepared in the form of fully registered certificates of
participation in denominations of$5,000 and any integral multiple thereof. The Revenue Obligations will
be dated as of the date of initial delivery thereof and will mature on February 1 in such years as set forth
on the inside cover page hereof. Interest evidenced by the Revenue Obligations will be payable
semiannually on February 1 and August 1 of each year, commencing on August 1, 2015. The Revenue
Obligations initially will be delivered only in book-entry form and will be registered in the name of Cede
&Co., as nominee of The Depository Trust Company,New York, New York("DTC"),which will act as
securities depository for the Revenue Obligations. Individual purchases of the Revenue Obligations will
be made in book-entry form only. Purchasers of Revenue Obligations will not receive physical certificates
representing their ownership interests in the Revenue Obligations purchased.
The interest evidenced by the Revenue Obligations shall be payable on each Interest Payment
Date to and including their respective Principal Payment Dates or prepayment prior thereto, and shall
represent the sum of the interest on the Installment Payments coming due on the Interest Payment Dates
in each year. The principal evidenced by the Revenue Obligations shall be payable on their respective
Principal Payment Dates in each year and shall represent the Installment Payments coming due on the
Principal Payment Dates in each year. Each Revenue Obligation shall evidence interest from the Interest
Payment Date next preceding its date of execution to which interest has been paid in full,unless such date
of execution shall be after a Record Date and on or prior to the following Interest Payment Date,in which
case such Revenue Obligation shall evidence interest from such Interest Payment Date, or unless such
date of execution shall be on or prior to July 15, 2015, in which case such Revenue Obligation shall
represent interest from its date of initial delivery. Notwithstanding, the foregoing, if, as shown by the
records of the Trustee, interest evidenced by the Revenue Obligations shall be in default, each Revenue
Obligation shall evidence interest from the last Interest Payment Date to which such interest has been paid
in full or duly provided for. Interest evidenced by the Revenue Obligations shall be computed on the
basis of a 360-day year consisting of twelve 30-day months. See APPENDIX C — "SUMMARY OF
PRINCIPAL LEGAL DOCUMENTS—Trust Agreement'
47194378.5
5
Payments of principal and interest evidenced by the Revenue Obligations me payable directly to
DTC by U.S. Bank National Association, as trustee. Upon receipt of payments of such principal and
interest, DTC will in turn distribute such payments to the beneficial owners of the Revenue Obligations.
So long as the Revenue Obligations are held in the DTC book-entry system, the interest, principal,
purchase price and prepayment premiums, if any, due with respect to the Revenue Obligations will be
payable by the Trustee, or its agent, to DTC or its nominee. DTC, in win, will make payments pursuant
to its procedures as described under APPENDIX E—"BOOK-ENTRY SYSTEM"herein.
Prepayment Provisions
Optional Prepayment. The Revenue Obligations with stated Principal Payment Dates prior to
February 1, 2026 me not subject to optional prepayment prior to their stated Principal Payment Dates.
The Revenue Obligations with stated Principal Payment Dates on or after February 1, 2026 we subject to
optional prepayment prior to their stated Principal Payment Dates, on any date on or after February 1,
2025, in whole or in part, in Authorized Denominations, from and to the extent of prepaid Installment
Payments paid pursuant to the Installment Purchase Agreement or from any other source of available
funds, any such prepayment to be at a price equal to the principal evidenced by the Revenue Obligations
to be prepaid,plus accrued interest evidenced thereby to the date fixed for prepayment,without premium.
Selection of Revenue Obligations for Prepayment Whenever less than all the Outstanding
Revenue Obligations are to be prepaid on any one date pursuant to provisions of the Trust Agreement
with respect to optional prepayment of Revenue Obligations, the Trustee shall select the Revenue
Obligations to be prepaid among Revenue Obligations with different Principal Payment Dates as directed
in a Written Request of the District. Whenever less than all the Outstanding Revenue Obligations with
the same stated Principal Payment Date are to be prepaid on any one date in accordance with the Trust
Agreement, the Trustee shall select the Revenue Obligations with such Principal Payment Date to be
prepaid as directed in a Written Request of the District, or at the discretion of the District by lot in any
manner that the Trustee deems fair and appropriate, which decision shall be final and binding upon the
District and the Owners. The Trustee shall promptly notify the District in writing of the numbers of the
Revenue Obligations so selected for prepayment on such date. For purposes of such selection, any
Revenue Obligation may be prepaid in part in Authorized Denominations.
Notice of Prepayment When prepayment of Revenue Obligations is authorized pursuant to the
Trust Agreement, the Trustee shall give notice, at the expense of the District, of the prepayment of the
Revenue Obligations. The notice of prepayment shall specify(a)the Revenue Obligations or designated
portions thereof(in the case of prepayment of the Revenue Obligations in part but not in whole)which are
to be prepaid, (b)the date of prepayment, (c)the place or places where the prepayment will be made,
including the name and address of any paying agent, (d)the prepayment price, (e)the CUSIP numbers
assigned to the Revenue Obligations to be prepaid, (f)the numbers of the Revenue Obligations to be
prepaid in whole or in part and, in the case of any Revenue Obligation to be prepaid in part only, the
principal evidenced by such Revenue Obligation to be prepaid, and (g)the interest rate and stated
Principal Payment Date of each Revenue Obligation to be prepaid in whole or in part. Such notice of
prepayment shall further state that on the specified date there shall become due and payable upon each
Revenue Obligation or portion thereof being prepaid the prepayment price and that from and after such
date interest evidenced thereby shall cease to accrue and be payable. With respect to any notice of
optional prepayment of Revenue Obligations, unless at the time such notice is given the Revenue
Preliminary,subject to change.
47194308.5
6
Obligations to be prepaid shall be deemed to have been paid within the meaning of the Trust Agreement,
such notice shall state that such prepayment is conditional upon receipt by the Trustee, on or prior to the
date fixed for such prepayment, of moneys sufficient to pay for the prepayment price of the Revenue
Obligations to be prepaid, and that if such moneys shall not have been so received said notice shall be of
no force and effect and the District shall not be required to prepay such Revenue Obligations. In the
event a notice of prepayment of Revenue Obligations contains such a condition and such moneys are not
so received, the prepayment of Revenue Obligations as described in the conditional notice of prepayment
shall not be made and the Trustee shall,within a reasonable time after the date on which such prepayment
was to occur, give notice to the persons and in the manner in which the notice of prepayment was given,
that such moneys were not so received and that there shall be no prepayment of Revenue Obligations
pursuant to such notice of prepayment.
The Trustee shall,at least 20 but not more than 60 days prior to any prepayment date, give notice
of prepayment to the respective Owners of Revenue Obligations designated for prepayment by first-class
mail,postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as
of the close of business on the day before such notice of prepayment is given.
The actual receipt by the Owner of any notice of such prepayment shall not be a condition
precedent to prepayment, and neither failure to receive such notice nor any defect therein shall affect the
validity of the proceedings for the prepayment of such Revenue Obligations or the cessation of interest
evidenced thereby on the date fixed for prepayment.
Effect of Prepayment If notice of prepayment has been duly given as aforesaid and moneys for
the payment of the prepayment price of the Revenue Obligations to be prepaid are held by the Trustee,
then on the prepayment date designated in such notice, the Revenue Obligations so called for prepayment
shall become payable at the prepayment price specified in such notice; and from and after the date so
designated,interest evidenced by the Revenue Obligations so called for prepayment shall cease to accrue,
such Revenue Obligations shall cease to be entitled to any benefit or security hereunder and the Owners
of such Revenue Obligations shall have no rights in respect thereof except to receive payment of the
prepayment price thereof. The Trustee shall, upon surrender for payment of any of the Revenue
Obligations to be prepaid, pay such Revenue Obligations at the prepayment price thereof, and such
moneys shall be pledged to such payment.
SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS
Installment Payments
Pursuant to the Installment Purchase Agreement, the Project will be reacquired by the District
from the Corporation. The District has covenanted to, subject to any rights of prepayment under the
Installment Purchase Agreement, pay to the Corporation, solely from Net Revenues and from no other
sources, the Purchase Price in Installment Payments, with interest thereon, as provided in the Installment
Purchase Agreement. Pursuant to the Master Agreement, the District has established and declared the
conditions and terms upon which obligations such as the Installment Purchase Agreement, and the
Installment Payments and the interest thereon payable under the Installment Purchase Agreement,will be
incurred and secured. The obligation of the District to make the Installment Payments, and payments of
interest thereon,and other payments required to be made by it under the Installment Purchase Agreement,
solely from Net Revenues,is absolute and unconditional,and until such time as the Installment Payments,
payments of interest thereon, and such other payments shall have been paid in full (or provision for the
payment thereof shall have been made pursuant to the Installment Purchase Agreement), the District has
covenanted that it will not discontinue or suspend any Installment Payments when due,whether or not the
Project or any part thereof is operating or operable or has been completed, or its use is suspended,
47194378.5
interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments,
payments of interest thereon, and other payments shall not be subject to reduction whether offset or
otherwise and shall not be conditional upon the performance or nonperformance by any party of any
agreement or any cause whatsoever. The District's obligation to make Installment Payments from Net
Revenues is on a parity with the District's obligation to make payments with respect to its Outstanding
Senior Obligations. See "Net Revenues"below. Pursuant to the Trust Agreement, the Corporation has
assigned to the Trustee for the benefit of the Owners of the Revenue Obligations substantially all of its
rights, title and interest in and to the Installment Purchase Agreement, including its right to receive
Installment Payments and the interest thereon.
The District has certain Existing Senior Obligations Outstanding payable from Net Revenues on a
parity with the Installment Payments under the Installment Purchase Agreement. The term "Existing
Senior Obligations" as used in this Official Statement refers to the Installment Purchase Agreements
relating to the District's currently Outstanding Senior Obligations, as set forth on Table 16 under the
caption "FINANCIAL OBLIGATIONS—Existing Indebtedness"herein. The term"Senior Obligations"
as used in this Official Statement refers to the Existing Senior Obligations and to any additional Senior
Obligations, such as the Installment Purchase Agreement, that may be made payable on a parity basis to
the Installment Payments as provided in the Master Agreement. Senior Obligations, together with any
Subordinate Obligations payable on a subordinate basis to the Installment Payments incurred as provided
in the Master Agreement, are referred to collectively as the "Obligations." The District has no
Subordinate Obligations currently outstanding. See "FINANCIAL OBLIGATIONS Existing
Indebtedness" herein and APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—
Master Agreement"attached hereto.
The obligation of the District to pay the Installment Payments, and the interest thereon,and other
payments required to be made by it under the Installment Purchase Agreement and Master Agreement, is
a special obligation of the District payable, in the manner provided in the Installment Purchase
Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase
Agreement, and does not constitute a debt of the District,the State or any political subdivision thereof, in
contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit
nor the taxing power of the District, the State or any political subdivision thereof, is pledged to the
payment of the Installment Payments, or the interest thereon, or other payments required to be made
under the Installment Purchase Agreement. The Installment Purchase Agreement constitutes a Senior
Obligation and, as such, is subject to the provisions of the Master Agreement and is afforded all of the
advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master
Agreement. See"SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS"
herein.
Available Funds of the District
As Senior Obligations under the Master Agreement, the Installment Payments are payable from
and secured by a pledge of Net Revenues. Should Net Revenues prove insufficient, the Installment
Purchase Agreement further provides that the Installment Payments are payable from any other lawfully
available funds of the District The primary lawfully available funds of the District are its reserve funds,
other than trustee-held amounts required to be in any Obligation Reserve Fund securing certain of the
District's Senior Obligations, as described in the Master Agreement. At June 30, 2014, the District's
Debt Service Required Reserves totaled $132 million, of which $43.1 million were trustee-held amounts
in Obligation Reserve Funds as required under the Master Agreement. See APPENDIX C —
"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master Agreement" attached hereto. District
reserve funds are maintained in accordance with the District's reserve policy. See "DISTRICT
REVENUES — Reserves." Available reserves at June 30, 2013 and June 30, 2014 were approximately
47194378.5
8
$651 million and$_million, respectively. See"DISTRICT REVENUES—Reserves,"= Summary
of Operating Data"and'—Projected Operating Data."
Net Revenues
The District is obligated to make Installment Payments from, among other things, Net Revenues
as provided in the Master Agreement, which consist of Revenues remaining after payment of costs paid
by the District for maintaining and operating the Wastewater System ("Maintenance and Operation
Costs"). Revenues are defined in the Master Agreement to mean, for any period, all income and revenue
received by the District during such period from the operation or ownership of the Wastewater System,
determined in accordance with generally accepted accounting principles, including all fees and charges
received during such period for the services of the Wastewater System, investment income received
during such period(but only to the extent that such investment income is generally available to pay costs
with respect to the Wastewater System, including Maintenance and Operation Costs), Net Proceeds of
business interruption insurance received during such period, ad valorem taxes received during such
period,payments under the Agreement Acquiring Ownership Interests,Assigning Rights and Establishing
Obligations, entered into on February 13, 1986, and amendment No. 1 thereto dated December 10, 1986
(the "IRWD Agreement'), by and between predecessor County Sanitation District No. 14 of Orange
County and the Irvine Ranch Water District (the "IRWD") received during such period and all other
money received during such period howsoever derived by the District from the operation or ownership of
the Wastewater System or arising from the Wastewater System (including any standby or availability
charges), but excluding (a)Capital Facilities Capacity Charges, (b)payments received under Financial
Contracts, and (c)refundable deposits made to establish credit and advances or contributions in aid of
construction (which, for purposes of the Master Agreement, shall not include payments under the IRWD
Agreement); provided, however, that (i)Revenues shall be increased by the amounts, if any, transferred
during such period from the Rate Stabilization Account to the Revenue Account and shall be decreased by
the amounts, if any, transferred during such period from the Revenue Account to the Rate Stabilization
Account, and(ii)Revenues shall include Capital Facilities Capacity Charges collected during such period
to the extent that such Capital Facilities Capacity Charges could be properly expended on a Capital
Facilities Capacity Charge Eligible Project for which the proceeds of Senior Obligations were used or are
available to be used. Any Federal Subsidy payments received by the District will constitute Revenues as
defined in the Master Agreement. See"DISTRICT REVENUES—Additional Revenues"herein.
The District's obligation to make the Installment Payments from its Net Revenues is on a parity
with the District's obligation to make payments with respect to its other outstanding obligations described
as Senior Obligations and all Reimbursement Obligations with respect to Senior Obligations, as provided
in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and, as
such, is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits,
interests and security afforded Senior Obligations pursuant to the Master Agreement. Pursuant to the
Master Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and
Reimbursement Obligations with respect to Senior Obligations, and the Net Revenues will not be used for
any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to
Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be
apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This
pledge constitutes a first lien on the Net Revenues for the payment of the Senior Obligations and
Reimbursement Obligations with respect to Senior Obligations. The term"Senior Obligations"generally
means all revenue bonds or notes(including bond anticipation notes and commercial paper)of the District
authorized, issued,executed and delivered under and pursuant to applicable law,the Installment Purchase
Agreement, and all other contracts (including financial contracts) or leases of the District authorized and
executed by the District under and pursuant to applicable law, including, without limitation, installment,
47194308.5
9
lease or other payments which are, in accordance with the provisions of the Master Agreement, payable
from Net Revenues on a parity with the payments under the Master Agreement.
The District may at any time incur Subordinate Obligations payable on a subordinate basis to the
Installment Payments as provided in the Master Agreement; provided, however, that prior to incurring
such Subordinate Obligations, the District shall have determined that the incurrence thereof will not
materially adversely affect the District's ability to comply with the requirements of the Master
Agreement. The District may at any time incur Reimbursement Obligations with respect to Subordinate
Obligations. For a description of the District's Outstanding Senior Obligations and Subordinate
Obligations, see "FINANCIAL OBLIGATIONS Existing Indebtedness" herein. There are currently
no Subordinate Obligations or Reimbursement Obligations with respect to Subordinate Obligations
outstanding.
The District may, in connection with the incurrence of Subordinate Obligations, pledge Net
Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to
Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be
junior and subordinate to the pledge of, and lien on,Net Revenues for the payment of Senior Obligations
and Reimbursement Obligations with respect to Senior Obligations.
Rate Stabilization Account
To avoid fluctuations in its fees and charges of the Wastewater System, from time to time the
District may deposit in the Rate Stabilization Account from Net Revenues such amounts as the District
deems necessary or appropriate. From time to time, the District may also transfer moneys from the Rate
Stabilization Account to the Revenue Account to be used by the District, first to pay all Maintenance and
Operations Costs as and when the same shall be due and payable. In addition, any such amount
transferred from the Rate Stabilization Account to the Revenue Account by the District is included as
Revenues for any period,but such transferred amount is excluded from determining Operating Revenues
for any period. Revenues will be decreased by the amounts,if any,transferred from the Revenue Account
to the Rate Stabilization Account. There are presently no funds in the Rate Stabilization Account.
Allocation of Revenues
To carry out and effectuate the pledge of Net Revenues under the Master Agreement as described
above, the District agrees and covenants that all Operating Revenues received by the District will be
deposited when and as received in the Revenue Account. Additionally, amounts may, from time to time
as the District deems necessary or appropriate, be transferred from the Rate Stabilization Account and
deposited in the Revenue Account,as described above under'—Rate Stabilization Account"above. The
District will pay from the Revenue Account all Maintenance and Operations Costs (including amounts
reasonably required to be set aside in contingency reserves for Maintenance and Operations Costs, the
payment of which is not immediately required)as and when the same shall be due and payable.
After having paid, or having made provisions for the payment of, Maintenance and Operations
Costs, the District shall set aside and deposit or transfer, as the case may be, from the Revenue Account
such amounts at such times as provided in the Master Agreement in the following order of priority:
(1) Senior Obligation Payment Account;
(2) Senior Obligation Reserve Funds (the Revenue Obligations are not secured by any
Reserve Fund);
(3) Subordinate Obligation Payment Account;
47194378.5
10
(4) Subordinate Obligation Reserve Funds;and
(5) Rate Stabilization Account.
Amounts required or permitted to be deposited or transferred as described in items 2, 3, 4 and 5
above, shall not be so deposited or transferred unless the District shall have determined that there will be
sufficient Net Revenues available to make the required deposits or transfers on the dates on which such
deposits or transfers are required to be made as described above. So long as the District has determined
that Net Revenues will be sufficient to make all of the deposits or transfers required to be made pursuant
to items 1, 2, 3, 4 and 5 above, on the dates on which such deposits or transfers are required to be made,
Net Revenues on deposit in the Revenue Account may from time to time be used for any purpose for
which the District funds may be legally applied. For additional information, see APPENDIX C —
"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement."
Rate Covenant
Pursuant to the Master Agreement, the District will,to the extent permitted by law, fix, prescribe
and collect fees and charges for the services of the Wastewater System which will be at least sufficient to
yield during each Fiscal Yen(a)Net Revenues equal to 125%of Debt Service on Senior Obligations for
such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for
such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may
make such classification thereof as it deems necessary, but will not reduce the fees and charges then in
effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be
sufficient to meet the requirements of the Master Agreement.
In addition, the District has covenanted in the Master Agreement to prepare and adopt an annual
budget for the Wastewater System for each Fiscal Year. Such budget will set forth in reasonable detail
the Revenues anticipated to be derived in such Fiscal Year and the expenditures anticipated to be paid or
provided for therefrom in such Fiscal Year, including, without limitation, the amounts required to pay or
provide for the payment of the Obligations during such Fiscal Year, the amounts required to pay or
provide for the payment of Maintenance and Operations Costs during such Fiscal Year and the amounts
required to pay or provide for the payment of all other claims or obligations required to be paid from
Revenues in such Fiscal Year, and will show that Revenues and Net Revenues will be at least sufficient to
satisfy the requirements of the Master Agreement. On or before September 1 of each Fiscal Year, the
District will file with the Trustee a copy of the adopted budget for such Fiscal Year See APPENDIX C
— "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master Agreement' for additional
information.
The District has an established reserve policy with eight separate reserve fund categories. Over
the next ten years,the year ending reserve total for each year is projected not to fall below$500 million as
indicated in the District's ten-year cash flow forecast for Fiscal Years 2014-15 through 2023-24. At its
election,the District may use unrestricted reserves to help satisfy the rate covenant described above. See
"DISTRICT REVENUES Reserves"herein.
Limitations on Issuance of Additional Obligations
Senior Obligation& The District may at any time incur Senior Obligations in addition to the
Existing Senior Obligations payable from Net Revenues as provided in the Master Agreement on a parity
with all other Senior Obligations theretofore incurred but only subject to the following conditions under
the Master Agreement:
47194308.5
11
(1) Upon the incurrence of such Senior Obligations, no Event of Default will be continuing
under the Master Agreement;and
(2) Subject to the provisions of the Master Agreement, the District will have received either
one of the following:
(1) A Written Certificate of the District certifying that, for a 12 consecutive calendar
month period during the 24 consecutive calendar month period ending in the
calendar month prior to the incurrence of such Senior Obligations (which 12
consecutive calendar month period will be specified in such certificate or
certificates):
(A) Net Revenues,as shown by the books of the District,will have amounted
to at least 125% of Maximum Annual Debt Service on all Senior
Obligations to be outstanding immediately after the incurrence of such
Senior Obligations,and
(B) Net Operating Revenues,as shown by the books of the District,will have
amounted to at least 100% of Maximum Annual Debt Service on all
Obligations to be outstanding immediately after the incurrence of such
Senior Obligations.
For purposes of demonstrating compliance with the foregoing,Net Revenues and
Net Operating Revenues may be adjusted for(x)any changes in fees and charges
for the services of the Wastewater System which have been adopted and are in
effect on the date such Senior Obligations are incurred, but which, during all or
any part of such 12 consecutive calendar month period, were not in effect,
(y)customers added to the Wastewater System subsequent to such 12
consecutive calendar month period but prior to the date such Senior Obligations
are incurred, and (z) the estimated change in available Net Revenues and Net
Operating Revenues which will result from the connection of existing residences
or businesses to the Wastewater System within one year following completion of
any project to be funded or any system to be acquired from the proceeds of such
Senior Obligations;or
(ii) A certificate or certificates from one or more Consultants which, when taken
together, project that, for each of the two Fiscal Years next succeeding the
incurrence of such Senior Obligations:
(A) Net Revenues will amount to at least 125% of Maximum Annual Debt
Service on all Senior Obligations to be outstanding immediately after the
incurrence of such Senior Obligations,and
(B) Net Operating Revenues will amount to at least 100% of Maximum
Annual Debt Service on all Obligations to be outstanding immediately
after the incurrence of such Senior Obligations.
For purposes of demonstrating compliance with the foregoing,Net Revenues and
Net Operating Revenues may be adjusted for(x) any changes in fees and charges
for the services of the Wastewater System which have been adopted and are in
effect on the date such Senior Obligations are incurred or will go into effect prior
to the end of such two Fiscal Year period, (y) customers expected to be added to
47194308.5
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the Wastewater System prior to the end of such two Fiscal Year period, and (z)
the estimated change in available Net Revenues and Net Operating Revenues
which will result from the connection of existing residences or businesses to the
Wastewater System within one year following completion of any project to be
funded or any system to be acquired from the proceeds of such Senior
Obligations. For purposes of preparing the certificate or certificates described
above,the Consultant may rely upon financial statements prepared by the District
that have not been subject to audit by an independent certified public accountant
if audited financial statements for the period are not available.
See, also "FINANCIAL OBLIGATIONS — Existing Indebtedness" herein. The District is not
required to comply with the provisions described above in paragraph (2) if the Senior Obligations being
incurred are Short-Terre Obligations excluded from the calculation of Assumed Debt Service pursuant to
clause (H) of the definition thereof. See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL
DOCUMENTS Definitions"herein.
The determination of Net Revenues for use in the calculation described above is more fully
described in APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master
Agreement Senior Obligations" attached hereto. The District is not required to comply with the
provisions described in paragraph (2) above for such portion of Senior Obligations incurred for the
purpose of providing funds to refund or refinance Senior Obligations if (i)upon such refunding or
refinancing, debt service on such refunded or refinanced Obligations, or debt service on bonds, notes or
other obligations of an entity other than the District,the debt service on which is payable from Obligation
Payments for such Obligations (the "Related Bonds"), will no longer be included in the calculation of
Assumed Debt Service either because such Obligations, or the Related Bonds of such Obligations, will
have been paid in full or because such debt service is disregarded pursuant to clause (L) of the definition
of Assumed Debt Service, and (ii)Assumed Debt Service in each Fiscal Year for the portion of such
Senior Obligations incurred for the purpose of providing funds to refund or refinance such Obligations is
less than or equal to 105% of Assumed Debt Service in such Fiscal Year for such Obligations being
refunded or refinanced (assuming for such purposes that debt service on such refunded or refinanced
Obligations, or debt service on the Related Bonds of such Obligations, is not disregarded pursuant to
clause (L) of the definition of Assumed Debt Service). See APPENDIX C — "SUMMARY OF
PRINCIPAL LEGAL DOCUMENTS—Master Agreement'attached hereto for additional information.
The District may at any time incur Reimbursement Obligations with respect to Senior
Obligations.
Subordinate Obligations. The District may at any time incur Subordinate Obligations upon
satisfaction of the conditions provided in the Master Agreement. See APPENDIX C "SUMMARY OF
PRINCIPAL LEGAL DOCUMENTS—Master Agreement'herein for a description of such conditions.
There are currently no Subordinate Obligations outstanding.
Insurance
The District will procure and maintain or cause to be procured and maintained casualty insurance
on the Wastewater System with responsible insurers, or provide self- insurance (which may be provided
in the form of risk-sharing pools), in such amounts and against such risks (including accident to or
destruction of the Wastewater System) as are usually covered in connection with facilities similar to the
Wastewater System. The District will procure and maintain such other insurance which it will deem
advisable or necessary to protect its interests and the interests of the Corporation. See "THE DISTRICT
47194308.5
13
—Risk Management" and APPENDIX C—"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—
Master Agreement'herein.
Allocation of Installment Payments
Set forth in Table I are the principal and interest payments on the Revenue Obligations. Also set
forth are the payments due on Existing Senior Obligations,including the Refunded Certificates.
Table 1
Payments Relating to the Revenue Obligations
and Existing Senior Obligations of the District
Fiscal Year Installment Payments Other
Ending Relating to Revenue Obligations Senior Obligations1111t1
June 30 Principal Interest Principal Interest Total
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
Total
The District nds to refinance its Reveane Refunding Certificate Anticipation Notes,Series 2014B("2014B Certificates')
on or before their maturity on November 15,2016. Assumes principal is amortized from 2022 through 2036 and an interest
rate of 3%per annum.See"FINANCIAL OBLIGATIONS—Recent and Anticipated Financings"herein.
a) Includes payments with respect to the Refunded Certificates,a portion of which are to be refunded with the proceeds of the
Revenue Obligations, See"REFUNDING PLAN"herein.
47194378.5
14
THE DISTRICT
Background
The Orange County Sanitation District is a public agency responsible for regional wastewater
collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United
States. The District provides service to an area with a population of approximately 2.5 million people in
the northern and central portion of the County by treating an average of 198 mg/d of wastewater in Fiscal
Year 2013-14. The District serves approximately 81% of the County population in approximately 479
square miles,or approximately 60%of the County's area.
The service area which comprises the District was originally formed in 1954 pursuant to the
County Sanitation District Act, as amended, Section 4700 et seq. of the Health and Safety Code of the
State. The District's service area originally consisted of seven independent special districts in the County
which were each responsible for matters relating to their individual districts. These special districts were
jointly responsible for the treatment and disposal facilities which they each used. The seven independent
districts were successors to the Joint Outfall Sewer Organization, which was formed in 1923 among the
Cities of Anaheim, Santa Ana, Fullerton, and Orange, and the sanitary districts of Placentia, Buena Park,
La Habra, and Garden Grove. The Joint Outfall Sewer Organization constructed a treatment plant and
outfall in the early 1920s to serve its members. It was reorganized in 1947 and 1948 into seven county
sanitation districts — District Nos. 1, 2, 3, 5, 6, 7 and 11. These prior districts were formed based on
engineers' analyses of the gravity flows in the service area. District No. 13 was formed in 1985 and
District No. 14 was added in 1986. These districts were co-participants in a Joint Agreement which
provided for the joint construction,ownership,and operation of the prior districts'joint facilities.
In April 1998, at the request of the Board of Directors of the District (the`Board of Directors"),
the Board of Supervisors of the County of Orange (the "County Board") passed Resolution No. 98-140
approving the consolidation of the then existing nine special districts into a new, single sanitation district,
to be known as the Orange County Sanitation District. This action was designed to simplify governance
structures, reduce the size of the Board of Directors, ease administrative processes, streamline decision-
making and consolidate accounting and auditing processes. The consolidation was effective on July 1,
1998.
Pursuant to the Resolution and Government Code Section 57500, the prior districts transferred
and assigned all of their powers, rights, duties, obligations, functions and properties to the District, and
the District assumed all obligations of the prior districts which were several and not joint including,
without limitation, their obligations to repay the then outstanding certificates of participation. The
boundaries of the nine predecessor special districts were initially used by the District to delineate separate
revenue areas (the"Revenue Areas") for budgeting and accounting purposes and in order to facilitate the
imposition of fees and charges imposed by the District. See "DISTRICT REVENUES — Sewer Service
Charges"herein.
The District is managed by the Board of Directors, whose members are appointed by 25 member
cities and agencies which are serviced by the District. The District is responsible for construction and
maintenance of a major portion of the wastewater collection, treatment and disposal facilities within its
boundaries. Revenue Area No. 7 is responsible for approximately 170 miles of local sewers in its service
area, whereas local sanitary districts, water districts and cities are responsible for local sewers in the
remainder of the District's service area.
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Organization and Administration
The District is independent of and overlaps other political jurisdictions. There are many
governmental entities, including the County,that operate within the District's jurisdiction. These entities
are exclusively responsible for the administration of their own fiscal affairs,and the District is not entitled
to operating surpluses of,or responsible for operating deficits of,any of the other entities.
The 25-member Board of Directors is composed of representatives from 21 cities, unincorporated
areas of the County and three special districts, including mayors of cities, members of city councils,
directors of independent special districts and one member from the County Board. Several board
committees, made up of members of the Board of Directors, consider topics for action by the Board of
Directors and make recommendations to the Board of Directors. The Chair and the Vice Chair of the
Board of Directors are elected every yew by a majority of the Board of Directors, and serve at the
pleasure of the majority of the Board of Directors.
The District has a general manager, outside general counsel, and administrative and operating
staff, with offices located at Reclamation Plant No. 1 in Fountain Valley, California. The District
currently employs an administrative and operating staff of approximately 600 under the direction of its
General Manager,James Heiberg.
James Herberg, P.E. is the General Manager of the District and has served in this capacity since
April 2013. During his 20 years with the District,he has held the positions of Assistant General Manager,
Director of Engineering, and Director of Operations and Maintenance. Mr. Herberg has more than 27
years of experience in the water and wastewater industries, including six years at the Orange County
Water District with whom the District has partnered on the Groundwater Replenishment System project.
Robert P. Ghirelb, D.Env. is the Assistant General Manager of the District, and has served in that
capacity since July 2006. Dr. Ghirelli previously served as Director of Technical Services for the District
since his joining the District in 1998. Prior to joining the District,Dr. Ghirelli served for just over a year
as managing principal of the Los Angeles office of a national environmental consulting firm, and served
20 years in supervisory positions with the State Water Resources Control Board and Regional Water
Quality Control Boards, including 13 years serving as Executive Officer of the California Regional Water
Quality Control Board,Los AngelesiVentura Region.
Lorenzo Tyner is the District's Director of Finance and Administrative Services. In September
2005, Mr. Tyner joined the District with more than 20 years of public finance and budgeting experience,
most recently serving as the Los Angeles Unified School District Budget Director and Deputy Chief
Financial Officer. Mr. Tyner previously worked in large government organizations including the City of
Los Angeles and the Los Angeles County Metropolitan Transportation Authority and with private sector
companies IBM Global Services and TRW Space and Defense.
Ed Torres is the District's Director of Operations and Maintenance for the District. He has
served the District since 1991. Prior to joining the District, Mr. Torres served in a professional capacity
for the California State University System and TRW Electronics and Defense Sector. Mr. Torres has
more than 25 years of public and private sector experience in protecting public health and the
environment.
Nick Arhontes, P.E. is the District's Director of Facilities Support Services and has served the
District since 1988. Mr. Arhontes has more than 30 yens of experience managing various engineered
systems in the private and public sectors regionally,nationally,and internationally.
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Robert Thompson, P.E. is the District's Director of Engineering. He has worked for the district
since 1995. Mr. Thompson has served has served as manager in several departments with OCSD,
including Information Technology, Operations and Maintenance,and Engineering. He has had a lead role
in creating and maintaining engineering,programming,tagging and asset standards for the District.
Jeff Reed is the District's Director of Human Resources. He has worked for the District since
1987. Mr. Reed serves as the District's Employee Relations Officer, administering to employer-employee
relations between the District and its local public employee organizations. In addition to human
resources,Mr.Reed has served the District in leadership roles in both safety and operations.
Services
The District owns and operates regional wastewater collection, treatment, and disposal facilities
for the metropolitan area in the northern and central portion of the County. The District receives
wastewater from the collection systems of the cities, sanitary districts and unincorporated areas of the
County located within the District. See"THE DISTRICT—Service Areas"herein.
Generally, local agency systems collect wastewater from residential and industrial customers and
convey the wastewater to District trunk sewer pipelines for conveyance to the District's wastewater
treatment plants.
The District's staff is responsible for operating and maintaining the District's infrastructure,
although some work is performed by external contractors.
Currently, the District has established supply contracts for all chemicals necessary to the
operation and maintenance of the facilities of the District. The District has sufficient standby systems in
the event of equipment failures or system outages.
Service Area
The map on the inside cover of this Official Statement shows the District's boundaries and
selected cities located within the District. District boundaries were originally established in 1947 and
1948 based on drainage basins. As the existing cities have grown and new areas have incorporated, city
limits have come to overlap District boundaries. The District currently serves an approximately 479
square-mile area including 23 of the County's 34 cities and various unincorporated areas of the County.
The District serves a population of approximately 2.5 million residents.
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Set forth in Table 2 below is the estimated populations of cities and unincorporated areas served
by the District as of January 1,2014.
Table 2
Estimated Populations of Cities and Unincorporated Areas
Served by the Orange County Sanitation District
As of January 1,2014
CRY Population
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
Cities Subtotal 2,449,326
Unincorporated Areas(estimated)(z) 72,095
Total 2 521 421
Demogr�i Research esea ch Rp h Unit,State of Califomia Department of Finance.
o) Center for Demographic Research,Califomia State University,Fullerton.
Employees
As of June 30, 2014, the District had a total of 584 employees. The majority of District
employees are represented by recognized employee organizations, which include the following: the
Orange County Employees Association("OCEA"),representing administrative/clerical,technical services
and engineering employees since 1979, the International Union of Operating Engineers — Local 501
("Local 501"), representing operations and maintenance employees since October 1985, and the
Supervisory and Professional Management Group ("SPMT"), representing employees within the
Supervisor Group and Professional Group since 1991. The total number of represented employees as of
June 30, 2014 was 545, and is broken down as follows: 99 employees represented by OCEA, 196
employees represented by Local 501, and 250 employees represented by the SPMT. The contractual
agreements between District and the Supervisor Group and Professional Group were renegotiated in 2010
47194378.5
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and expired on June 30, 2013. The District is continuing to bargain with the Supervisor Group and
Professional Group to reach agreement. The contractual agreements between OCEA and District and the
Local 501 and District were renegotiated in 2011 and expired on June 30,2014. The terms of the existing
contractual agreements will continue until renegotiation of the arrangements between the District and
OCEA and Local 501,respectively, are completed. Historically, the District has experienced positive and
collaborative working relationships with each organization and has not endured any work stoppages since
the early 1980s.
Retirement Plan
The District participates in the Orange County Employees Retirement System ("OCERS'), a
cost-sharing multiple-employer defined benefit pension plan, which is governed and administered by a
nine-member Board of Retirement. OCERS was established in 1945 under the provisions of the County
Employees Retirement Law of 1937,and provides members with retirement,death,disability,and cost of-
living benefits.
All full-time and part-time District employees participate in OCERS. Contributions are based on
an OCERS actuarial-determined rate structure and age at time of employment; contributions are deducted
on a pre-tax basis. Most employees do not pay into Social Security with the exception of 1.45% of gross
income, which is paid into the Medicare portion of Social Security. The amount of the retirement
allowance is based upon the member's age at retirement,the member's"final compensation"as defined in
Section 31462 of the Retirement Law of 1937, the total years of service under OCERS, and the
employee's classification as a Plan B, G, H, or U member. Plan U applies to all full-time and part-time
employees hired on or after January 1, 2013. Plan B applies to supervisor and professional employees
hired on or after October 1, 2010, Local 501 employees hired on or after July 1, 2011 and OCEA
employees hired on or after August 1, 2011. Plan G applies to employees hired before September 21,
1979. Plan H applies to employees hired on or after September 21, 1979 and prior to the eligibility dates
for Plan B or Plan U. Plan G and H provide 2.5% of final compensation per year of service at age 55.
Plan B provides 1.667% of final compensation per year of service at age 57.5, and Plan U provides 2%at
62. "Final compensation"is the highest consecutive 12 months of compensation for Plan G members and
the highest consecutive 36 months of compensation divided by three for Plan B, H, and U members.
Benefits fully vest under the OCERS retirement plan upon reaching five years of service. Employees
who retire at or after age 50 with ten or more years of service are eligible to receive an annual retirement
allowance,but at a reduced benefit for those employees retiring prior to age 62 for Plan U members, 57.5
for Plan B members, or prior to age 55 for Plan G and H members. OCERS also provides death and
disability benefits.
As a condition of participation under the provisions of the County Employees Retirement Law of
1937, members are required to contribute a percentage of their annual compensation to OCERS. The
District contributes a percentage of covered employees' base salary towards the employee's contribution
to OCERS for members of Plans G and H. Members of Plans U and B do not receive any contributions
toward employee's contribution to OCERS.
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Set forth in Table 3 below is a current comparison of the District's contributions to OCERS for
Fiscal Years 2009-10 through 2013-14 and projected contributions for Fiscal Year 2014-15.
Table 3
Orange County Sanitation District
Comparison of District Contributions to OCERS for Fiscal Years 2009-10 through 2013-14
and Projected Contributions for Fiscal Year 2014-15
District
Fiscal Year RateM Contributions
2009-10 21.50% $13,029,795
2010-11 24.04 14,370,158
2011-12 26.10 15,767,050
2012-13 27.35 16,363,917
2013-14 31.87 18,920,212
2014-15t�1
Requi�on as a percent of covered payroll. Includes amortization of Unfunded Actuarial Accrued
Liability.Combined one for all Plans.
(�) Projected.
Source: Orange County Sanitation District.
For Fiscal Years 2008-09 through 2013-14, the District's required contribution was equal to the
contribution that the District actually made. As noted, the required contribution set forth above includes
amortization of Unfunded Actuarial Accrued Liability ("UAAL"). For the Fiscal Year ended June 30,
2014, total payroll costs of employees covered by OCERS was $59,360,635. As of the December 31,
2012 valuation, OCERS has an aggregate UAAL ratio of 62.52%, for a total UAAL on an actuarial basis
of$5.68 billion.
The District's retirement program includes Additional Retiree Benefit Account ("ARBA')
benefits. ARBA benefits provide 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 OCERS medical plan. Benefits vest upon retirement. The District
pays 100%of the cost for the ARBA plan and utilizes a pay-as-you-go method for funding the plan. The
District paid $367,210 in ARBA benefits during Fiscal Year 2013-14. Effective August 1, 2011, ARBA
benefits are no longer available to new OCEA Group employees of the District.
For more information regarding OCERS and the District's retirement plan as of June 30, 2014,
see Note 5 and 6 to the Comprehensive Annual Financial Report of the Orange County Sanitation District
for Fiscal Year Ended June 30, 2014 set forth in Appendix A. The Comprehensive Annual Financial
Reports of the Orange County Employees Retirement System are available on the OCERS website at
http://www.ocers.org. The information on such website is not incorporated herein by such reference or
otherwise. The District cannot predict whether the OCERS investment portfolio will experience
additional losses in the future; however, any future losses could result in material increases in the
District's required contributions.
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Other Post-Employment Benefits
In June 2004, Governmental Accounting Standards Board ("GASB") issued Statement No. 45,
which requires state and local governmental employers to fund the actuarially determined annual required
contribution("ARC")for its post-employment benefits other than pension benefits (known as other post-
employment benefits or"OPEB") or record the entire amount of the unfunded liability of its OPEB in its
financial statements. OPEB includes healthcare and life insurance expenses and related liabilities, and an
annual required contribution to fund such liabilities. The District adopted Statement No. 45 for the fiscal
year beginning July 1, 2007, as required of a GASB "Phase 1 Agency." According to the District's
actuary, Demsey Filliger Associates (the "Actuary"), the unfunded OPEB liability as of July 1, 2013 is
approximately $11.6 million. The ARC was determined to be $755,078 for the three years beginning
with Fiscal Year 2013-14, the period covered by the last actuarial valuation. Calculation of the ARC is
based on the present value of benefits seeming in the current year,a 30-year amortization of the unfunded
OPEB liability and an assumed rate of return on investments in the retiree fund of 4% per arum. The
District does not believe that its OPEB liability will have a material impact on its operational results.
Risk Management
As of the date hereof, the District has in force basic all risk property and casualty insurance,
including theft, fire, flood,terrorism and boiler and machinery losses at its plants and pump stations. The
District is self-insured for portions of workers' compensation,property damage and general liability. The
self-insurance portion of workers' compensation is $750,000 per person per occurrence with outside
excess insurance coverage to the statutory limit. The self-insured portion for property damage covering
fire and other disasters is $250,000 per occurrence with outside excess insurance coverage to $1 billion.
The self-insured portion for property damage covering flood is $100,000 per occurrence with outside
excess insurance coverage to $300 million. The District also maintains outside comprehensive boiler and
machinery insurance, including business interruption insurance, with a $100 million limit with
deductibles ranging from$25,000 to$350,000.
The District is self-insured for general liability coverage up to $500,000 per occurrence, with
excess general liability coverage up to $40 million. In addition, the District relies on a combination of
self-insurance and District reserves for all property damage from the perils of seismic activity as well as
the expectation that some disaster relief funds may be available from the Federal Emergency Management
Agency ("FEMA") to address any resulting damage. See "DISTRICT REVENUES —Reserves" and "—
Integrated Emergency Response Program." There is no assurance that, in the event of a significant
seismic event, a combination of self-insurance, District reserves or FEMA assistance would be available
or sufficient for the repair or replacement of the affected property.
During the past five fiscal years there have been no settlements in excess of covered amounts.
Claims against the District are processed by outside claim administrators. The District believes that there
are no unrecorded claims as of June 30, 2014 that would materially affect the financial position of the
District.
For more information regarding the District's insurance coverage as of Jane 30, 2014, see Note 1
to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year
Ended Jane 30,2014 set forth in Appendix A.
Existing Facilities
The Wastewater System presently consists of two wastewater treatment plants, an influent
metering and diversion structure, 15 off-plant pump stations,various interplant pipelines and connections,
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and the ocean outfall facilities. The District's Wastewater System includes approximately 403 miles of
sewers within 11 trunk sewer systems, 170 miles of local sewers located within a portion of Revenue
Area No. 7, two treatment plants, two discharge outfalls and two emergency weir outlets. The existing
treatment plants have a rated primary treatment capacity of 372 mg/d,including standby capacity.
Treatment Plant No. 1 ("Plant No. 1")is located in the City of Fountain Valley, about four miles
from the coast, adjacent to the Santa Ana River. Secondary treatment capabilities are provided by a
trickling filter plant and two conventional air activated sludge plants. Up to 105 mg/d of secondary
treated effluent is conveyed to an Orange County Water District (the "OCWD") plant for tertiary
treatment prior to reclamation and groundwater recharge. See "Groundwater Replenishment System"
below.
Treatment Plant No. 2 ("Plant No.2")is located in the City of Huntington Beach, 1,500 feet from
the ocean, at the mouth of the Santa Ana River. Secondary treatment capabilities are provided by a Pure
Oxygen Activated Sludge plant and a Solids Contact Trickling Filter plant.
The District employs several phases in the treatment of wastewater. The first phase, preliminary
treatment,removes debris such as eggshells, sand and other non-biodegradable items. See also`Preferred
Level of Treatment" and `Biosolids Management" below. In the next phase, primary treatment,
wastewater is pumped to large settling basins. The liquids are separated from the remaining solids which
settle or float as the wastewater passes through large settling basins called clarifiers. The settled solids
are sent to solids treatment facilities. All of the wastewater received by the District is sent to secondary
treatment for further processing. During secondary treatment, the wastewater is treated with naturally
occurring bacteria to remove most of the remaining dissolved and suspended microscopic organic solids.
The treated wastewater from both plants is mixed together at Plant No. 2,where it is then pumped through
the ocean outfall pipe that extends five miles offshore.
Set forth in Table 4 below are the treatment plants' approximate treatment capacities.
Table 4
Wastewater System Treatment Capacities
(mWd)
2013-14 Primary Secondary
Actual Flows Treatment Capacity Treatment Capacity
Plant No. 1 96 204 182
Plant No. 2 102 168 150
Aggregate Treatment 198 372 332
Source: Orange County Sanitation District.
The District also has the capability to divert a portion of the influent flow from Plant No. 1 to
Plant No. 2 through interplant connections. A portion of the flow destined for Plant No. 2 can also be
diverted to Plant No. 1. Another interplant facility allows gas generated during solids treatment to be
transported between Plant No. 1 and Plant No. 2 and allows digester gas (which is used as fuel for many
of the facilities' engines)from one plant to be used at the other to balance the supply and demand, which
results in efficient gas utilization.
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Permits,Licenses and Other Regulations
The District is subject to laws, rules and permits issued by federal, state, regional and local
regulatory bodies. The Wastewater System is subject to regulations imposed by the 1972 Clean Water
Act, Public Law 92-500 (the "Clean Water Act"), the California Environmental Quality Act of 1970, as
amended ("CEQA") and the Federal Clean Air Act. The regulatory requirements are primarily
administered by the United States Environmental Protection Agency (the "EPA"), the California Air
Resources Board, the Santa Ana Regional Water Quality Control Board ("RWQCB"), and the South
Coast Air Quality Management District ("AQMD"). Regulations of these agencies deal primarily with
the quality of effluent which may be discharged from the treatment plants and air quality emissions. The
Clean Water Act directs the EPA to monitor and to regulate the discharge of pollution into navigable
waterways and to enforce the requirements that all wastewater treatment plants in the nation provide full
secondary treatment for sewage. In 1977, Congress amended the Clean Water Act to allow waivers of
secondary treatment standards for certain ocean dischargers if they can demonstrate,to the satisfaction of
the EPA that significant adverse environmental impacts would not occur. The District currently has all
applicable permits and licenses necessary to operate its facilities.
The District has discharged treated wastewater into the Pacific Ocean under a permit issued by
the EPA and the RWQCB. The discharge permit included a waiver under the 301(h) provisions of the
Clean Water Act, allowing for less than full secondary treatment based on an ocean discharge of
sufficient depth, distance and dilution. The permit was initially issued in 1985 and was the first modified
Section 301(h)permit issued to a major wastewater treatment facility. The permit was re-issued on May
6, 1998 and expired on June 8,2003.
On July 17,2002,the Board of Directors adopted Resolution No. OCSD 02-14, "Establishing the
Policy for Level of Treatment of Wastewater Discharged into the Ocean." This resolution established the
District's policy to treat all wastewater discharges into the ocean to secondary treatment standards thereby
providing for continued public safety, marine ecosystem protection, and water reclamation opportunities.
To implement this policy, District staff was directed to immediately proceed with the planning, design,
and implementation of treatment methods that will allow the District to meet Clean Water Act secondary
treatment standards with the expressed purposes of eliminating the need for the permit waiver received
under Section 301(h). The District completed these improvements on time by December 2012 at a total
capital improvement cost of$537.8 million.
Following the determination by the Board of Directors on July 2002 to implement full secondary
standards, staff prepared the Secondary Treatment National Pollutant Discharge Elimination System
("NPDES") Permit Application that was required to be submitted to the regional office of the EPA and
the RWQCB in December 2002. The NPDES Permit is separate and apart from the permit waiver
received under Section 301(h), and once awarded would negate the need for a waiver. Achieving
secondary treatment standards was originally projected to take nine years to complete, with completion
expected in December 2012. Because ocean discharge permits are issued for only five years, and the
EPA has no authority to waive the discharge limit requirements or grant a longer permit (except in
accordance with Section 301(h)), the District decided to voluntarily seek a consent decree concurrently
with the issuance of the new ocean discharge permit. This negotiated cement decree (the "Consent
Decree") approves the schedule and decrees that no penalties will be imposed for discharges that exceed
the secondary treatment limits during the period of construction. The Consent Decree was signed by the
District, the EPA and the RWQCB and filed with the U.S. District Court on November 15, 2004. The
District is in compliance with the Consent Decree, having completed all of the improvements on time by
the deadline of December 2012.
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The District is also subject to the requirements of the Federal Clean Air Act which mandates
attainment with national ambient air quality standards for criteria pollutants (ozone, particulate matter,
carbon monoxide,lead,nitrogen dioxide,and sulfur dioxide). Criteria air pollutants cause adverse effects
on human health and environment. AQMD is the local air pollution control agency charged with
implementing the Federal Clean Air Act. In addition to criteria pollutants, AQMD also implements
numerous federal and state requirements related to the toxic air pollutants which can cause cancer or other
severe localized health effects. The State's Air Toxic Hot Spots Act, for example, requires facilities to
conduct health risk assessments and notify the neighboring communities if the health risk exceeds the
regulatory thresholds.
Pursuant to AQMD's requirements, the District must obtain permits before sewage treatment
improvement projects can be constructed and operated. Such permits are project specific and may contain
conditions that govern design criteria, operating parameters, and emissions standards. Most of the
District's treatment facilities are enclosed in order to capture and treat emissions to meet regulatory
emissions standards and to minimize odor impact to the neighboring communities. The District's
treatment plants are also subject to the requirements of Title V of the Federal Clean Air Act amendments.
The Title V permit is a single air quality permit for a facility that consolidates and replaces all of the air
permits for individual pieces of equipment previously issued by the local air quality district. The permit
contains all of the applicable local, state, and federal requirements, including periodic self-certification of
compliance and mandatory self-reporting of permit deviation.
All Title V permit related reporting and documents submitted to the AQMD must be signed by
the highest District official — in this case the General Manager. The Title V program also demands
facilities to organize and conduct extensive training of the staff involved,including the field operation and
maintenance staff. Another Title V important feature is a possibility of the public active participation and
intervention in the cases of potential emission limits and monitoring violations. The District Title V
permits did not receive any negative public responses or comments during the required public review
period. The District received initial Title V permits for the treatment plants in January 2009. Title V
permits are issued for a five-year period. Title V permits for both plants were issued on April 16,2014.
They will expire on April 16,2019.
District Planning and Capital Improvement Program
In November 2007, the Board of Directors adopted a new comprehensive strategic plan to
consider the District's service levels and operational needs for the next five years. The Strategic Plan has
been updated annually to continue looking at a five-year horizon(each,a"Five-Year Strategic Plan"). See
"THE DISTRICT—Five-Year Strategic Planning."
In December 2009, the Board of Directors adopted a Facilities Master Plan (the "Master Plan").
The Master Plan updated the planning processes set forth in the 1989 Master Plan,the 1999 Strategic Plan
and the 2002 Interim Strategic Plan Update. The Master Plan also incorporates and implements the levels
of services defined by the Board of Directors that are included in the 2009 Five-Year Strategic Plan. The
result is a plan that integrates research, facilities planning, water conservation and reclamation, sludge
reuse, other wastewater programs and financial planning into a single unified approach. Key components
of the Master Plan include updated flow projections and collection system hydraulic modeling.
The District expects to satisfy required sewer capacity and rehabilitation improvements for the
Wastewater System through its Capital Improvement Program ("CIP"). The District =natty reviews
and validates its CIP. The CIP was developed to satisfy anticipated regulatory requirements, increased
population, anticipated rehabilitations and replacements, additional treatment requirements, conservation,
47194378.5
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energy and other resource savings considerations, odor control improvements, and air quality protection
needs. Through Fiscal Year 2033-34,the current CIP is scheduled to accomplish:
• Major rehabilitation of the existing headworks, primary treatment, secondary treatment,
outfall pumping, and solids handling facilities at both treatment plants;
• Replace and rehabilitate nine of the District's outlying pumping stations, and 27 trunk
sewer improvement projects;and
• Reduce fence line odor to levels that minimize odor complaints.
The 2014 CIP Validation Study resulted in revisions to the CIP. The CIP currently consists of
115 individual capital projects through Fiscal Yen 2033-34 with remaining outlays of$1.9 billion. Over
the next five years, the CIP contemplates average annual capital expenditures of$141.7 million based on
the 2014 CIP Validation Study. Implementation of full secondary treatment standards was completed in
December,2012. Set forth in Table 5 below is a summary of total estimated capital costs for the CIP for
Fiscal Years 2014-15 through 2033-34.
Table 5
Capital Improvement Program—Estimated Capital Costs
Fiscal Years 2014-15 through 2033-34
Project Cost
Collection System Capacity $ 215,855,000
Collection System Repair,Rehabilitation,Replacement 419,878,000
Treatment Plant Capacity 311,193,000
Additional Secondary Treatment 121,784,000
Improved Treatment 147,557,000
Treatment Plant Repair,Rehabilitation, Replacement 663,011,000
Support Facilities 33,096.00
Total Validated Capital Improvement Program 1.912.374.000
Source: 2014-I6 Budget Update,Orange County Sanitation District.
The CIP included budgeted expenditures of$169.2 million in Fiscal Year 2014-15. There are
currently 37 projects in the construction phase with proposed capital outlay spending in 2014-15. The two
most significant projects in the construction phase are the Sludge Dewatering and Odor Control at Plant 1
and the Newport Force Main Rehabilitation with projected Fiscal Year 2014-15 expenditures of$61.1
million and$20.4 million respectively.
Groundwater Replenishment System
The District has taken a multi-jurisdictional approach to planning for capital facilities because
many of the methods for reducing or managing flows involve other jurisdictions. One such project is the
Groundwater Replenishment System ("GWRS"). In March 2001, the District entered into an agreement
with the OCWD to design and construct Phase I of the GWRS. The capital cost of this Phase was shared
equally (50% shares) by each agency. The GWRS is a joint effort by the two agencies to provide
reclaimed water for replenishment of the Orange County Groundwater Basin and to augment the seawater
intrusion barrier. Phase I of the GWRS became operational in January of 2008. In 2013, GWRS
produced approximately 72,000 acre-feet. The Phase II expansion broke ground in January 2012 to add
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approximately 33,000 acre-feet per year. The District expects the Phase 11 expansion to be completed in
the first quarter of 2015. The Phase II expansion and all future phases will be funded solely by OCWD.
The District has committed 168,000 acre-feet per year of secondary effluent to these future expanded
operations. The District and OCWD amended their 2001 agreement in 2010 to provide OCWD with the
first right of refusal of secondary treated water flows from the District's Fountain Valley-based Plant No.
1 for these future phases; however, no capital funding is anticipated or dedicated from the District for
these future expansion phases.
OCWD and the District have agreed to share equally in the cost of the Joint GWRS
Microftltration Backwash Redirection Project which will increase the quantity of water available during
the early morning hours when the flows are low. This project will save the District operational costs in
the form of reduced primary treatment chemical usage.
Preferred Level of Treatment
In July 2002, the Board of Directors approved a change from the existing level of treatment, a
blend of 50% advanced primary and 50% secondary treated wastewater, to full secondary treatment
standards. The District completed all of the necessary expansion projects to support full secondary
treatment by December 2012. See "THE DISTRICT — Permits, Licenses and Other Regulations." On
July 20, 2012, the District received a new NPDES permit, which reflects the full secondary treatment
requirements. The new NPDES permit will expire on July 19,2017.
Biosolids Management
Through the treatment of wastewater,the District recovers and treats nutrient-rich, organic matter
(solids) to produce biosolids. Biosolids can be recycled through composting or fertilizing non-food farm
fields(land application)or disposed in a landfill for methane gas recovery. The District's goal is to ensure
our biosolids management strategies align with existing market conditions and continue a sustainable,
reliable and economical biosolids management program that provides environmentally sound practices
and meets the stringent federal, State and local regulatory requirements.
The District's biosolids averaged about 765 tons per day("tpd') in Fiscal Year 2013-14, with an
average cost per ton of$62.17 in July 2014 for managing at offsite locations, as described in the table
below. These biosolids management costs totaled about $17.4 million last fiscal year. Anticipated
increases in biosolids production in Fiscal Years 2014-16 increased the budget to about $18.32 million
(5.3%). In these fiscal years,the District's biosolids tonnage will peak at about 785 tpd until the following
new facilities come online to reduce biosolids costs by about one-third.
• Irvine Ranch Water District is constructing solids processing facilities and will stop
sending their solids to the District in 2016.
• Plant No. 1 centrifuges are currently under construction and anticipated to start creating
drier solids and reducing hauling costs by mid-2017.
• Plant No. 2 centrifuges will begin operating by early 2019.
• In the next few years,the District also will be implementing several significant
construction,maintenance and rehabilitation projects affecting the solids treatment
portions of both plants.These projects,along with the start-up of the next phase of
GWRS(Ground Water Replenishment System),may increase the biosolids hauling
budget as the treatment process becomes more complex.
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Biosolids Management Contracts
Current tons
Contract per day Average
(Minimum tons managed cost per ton
Contractor Location Product per day and ter ml (approximate) (July 20141
Synagro Kem County,CA Compost 250 tpd—10 years plus two 250 tpd $75.21
five-year renewals,first
renewal 12/27/16
Synagro La Paz County,AZ Compost 0 tpd—10 years plus two 70 tpd $63.03
five-year renewals,first
renewal 12/27/16
Tule Ranch Yuma County,AZ Land 0 tpd—5 years plus one 350 tpd $54.66
application five year renewal,renewal
I/l/18
Orange Orange County,CA Local 0 tpd—8 years plus one 70 tpd $53.40
County Landfill 10-year renewal,first
Waste& renewal 6/30/18
Recycling
The District's contractors provide back-up biosolids management capacity in California and
Arizona that include compost, land application, lime stabilization before land application and landfill.
Together, these options have the additional available capacity to manage more than ten times the
District's daily biosolids production to ensure sustainable,consistent,and reliable operations.
The District anticipates issuing a request for proposals ("RFP") in 2016 in advance of the
Synagro contract renewal. In Fall 2013, the Board of Directors adopted a new Five-Year Strategic Plan
that included studying biosolids management options in order to make recommendations for a potentially
longer-term management option RFP in 2018.
In 2003, the District was the first agency in the nation to be certified by the National Biosolids
Partnership for its biosolids program. Certification requires regular third-party audits and a robust internal
management system based on the ISO 14001 Environmental Management System standard. The District
is committed to a diverse biosolids program to help ensure a sustainable, reliable, and economical
program.
Urban Runoff
Recognizing that County beaches were being affected by pollution carried by urban runoff, the
Board of Directors adopted a number of resolutions agreeing to accept dry weather urban runoff into the
sewer system. In Jane 2002, Assembly Bill 1892 amended the District's charter to formally allow the
diversion and management of dry weather urban runoff flows. Resolution No. 01-07, adopted March 28,
2001, declared that the District will initially waive fees and charges associated with authorized discharges
of dry weather urban runoff to the sewer system until the total volume of all runoff discharges exceeds
four million gallons per day ("MGD") calculated on a monthly average. For the first 12 years of the
Urban Runoff Program,the average monthly flow averages remained less than the 4 MGD threshold thus
avoiding user fee costs being assessed to the diversion permittees. In 2012, the District received a
number of diversion proposals to deal with bacteria and selenium loading to the upper Newport Bay. The
discharge from the additional proposed diversions combined with the existing diversion flows would
eventually exceed the four MGD fee threshold. On June 12, 2013, the Board adopted Resolution No. 13
09 expanding the waiver of fees or charges on the treatment of dry weather urban runoff from four MGD
to ten MGD. According to the Board, the change was necessary not only to protect the County's coastal
resources, but also to provide an economic benefit to the local economy by helping to keep our beaches
open.
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There are currently 19 active urban runoff diversion structures, four owned and operated by the
County, 11 owned and operated by the City of Huntington Beach, one owned and operated by the City of
Newport Beach, two owned and operated by the IRWD, and one owned and operated by The Irvine
Company. The Dry Weather Urban Runoff Program is administered by the Environmental Compliance
Division which issues a discharge permit for each of the diversion structures. The permit functions as a
control mechanism that specifically prohibits storm runoff and authorizes discharge only during periods
of dry weather. The permit also establishes specific discharge limits, constituent monitoring, and flow
metering requirements. In addition, the District conducts quarterly sampling and analysis of the urban
runoff discharges to ensure discharge limit compliance for the various regulated constituents.
Since 1999, the District has treated a total of 7.9 billion gallons of dry-weather urban runoff that
would otherwise have been discharged into the ocean with no treatment. From July 1, 2013 through June
30,2014,the daily average urban runoff flow ranged between 0.59 and 1.72 MGD with a cumulative total
diversion of 386 million gallons for this period. At the existing operations and maintenance cost of
$1,657 per million gallons (2013-14 rate), the District's cost for treating the urban runoff discharge for
this period is estimated at$640,360.
Due to increasingly strict receiving water quality standards, the District is receiving requests to
accept additional urban mnoff discharges. Five additional urban ranoff diversions have been proposed to
deal with bacteria and selenium loading to the Newport Back Bay Watershed: Peters Canyon in the City
of Irvine, Big Canyon Wash in the City of Newport Beach, and the Delhi, Santa Fe, and Lane flood
control channels in the City of Santa Ana. Peters Canyon Wash, which collects selenium from selenium-
laden shallow groundwater, is the biggest contributor of selenium in the San Diego Creek watershed in
dry weather. The proposed urban runoff flows will result in average monthly flows of 4-6 MUD.
Integrated Emergency Response Program
In recognition of the potential damage which could occur in the event of a major earthquake,
flood, or other disaster, the District implemented an Integrated Emergency Response Program (the
"IERP")in 1979.The IERP is a two-volume plan which contains policies,plans and procedures preparing
for, and responding to, emergencies. The District also analyzed disaster preparedness issues and policies
within the Master Plan, and within a 1994 report titled Fault Rupture Hazard Investigation—Wastewater
Treatment Plant No.2(the"1994 Report").
The disaster preparedness plan included in the Master Plan reviewed two possible major
earthquake scenarios: an 8.3 Richter magnitude ("M") earthquake on the southern San Andreas fault
system and an M 7.0 earthquake on the Newport-Inglewood fault zone,which includes Plant No. 2. An
M 8.3 earthquake on the southern San Andreas fault,while on the whole more destructive than the M 7.0
Newport-Inglewood fault, may result in less damage to the District's service area due to the distance of
the fault from most of the service area. However, the Master Plan stated that damage from such a major
earthquake on the San Andreas fault would be extensive. Also, the Master Plan indicated that an M 7.0
earthquake on the Newport-Inglewood fault within five miles of the District's sewerage facilities could
cause major destruction to those facilities. The disaster preparedness plan in the Master Plan indicated
that it would not be economically feasible to upgrade all of the existing sanitary sewerage facilities to
survive an earthquake of this magnitude along the Newport-Inglewood fault. The IERP outlines the
policies and employee actions to be taken before, during and after an earthquake, earthquake response
guidelines and damage assessment procedures.
The Master Plan analyzed the vulnerability of the sanitary sewerage facilities and operations of
the District and planned a risk reduction program wherein the vulnerability of many of the District's
sanitary sewerage facilities to an earthquake could be reduced by recommended retrofit construction
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measures. The Master Plan also recommended that designs of existing major structures which were
constructed prior to development of current seismic design standards be reviewed and the structures
strengthened,if necessary.
Since the Master Plan and the 1994 Report, the District has completed retrofitting where deemed
appropriate. Pursuant to the Master Plan, all recent and future projects have been, and will be, designed
to the same high earthquake code standards as set for other essential services, such as hospitals and fire
stations. Many of the older buildings analyzed in the Master Plan have been replaced by structures built
after 1989.
The Army Corps of Engineers' "All-River Plan" has mitigated any future flooding of the Santa
Ana River system and potential threats to the District's Wastewater System. Also, both Plant No. 1 and
Plant No. 2 are built to federal standards.
The IERP takes into account the damage potential posed by coastal flooding, tsunamis (large
ocean waves generated by seismic activity) and windstorms. No assurance can be given that any such
events would not have a material adverse impact on the Wastewater System.
The Strategic Plan and IERP makes recommendations regarding fire protection of the Wastewater
System. Most of the structures at Plant No. 1 and Plant No. 2 we constructed of fire-resistant materials.
The IERP describes the procedures needed to respond to a possible disaster. For more information
regarding emergency response policies, the disaster preparedness plan described in the IERP can be
reviewed at the District's office.
Five-Year Strategic Planning
The Strategic Plan envisions an organizational culture that adheres to the District's core values
and makes efficient and effective use of all available resources. Over the past six years, the District
completed thirty-eight strategic goals and made strides to improve technical operations, biosolids
management, odor control,and regulatory compliance. Through a newly developed Vision Statement,the
District is committed to focusing efforts on customer service, protecting public health and the
environment, fiscal responsibility,communications,partnering with others, and creating the best possible
workforce.
As a result of two Strategic Planning workshops, individual Board of Director's interviews,
employee and management focus groups,the following eight new strategic goals were identified:
1. Odor Control—Completion of the Odor Control Master Plan.
2. Future Biosolids Management Options — Study biosolids management options including
third party contracts and onsite capital facilities.
3. Energy Efficiency— Continue to research new energy efficiency and energy conversion
technologies.
4. Disinfection of Ocean Discharge — Develop an implementation plan that includes the
technical,financial and societal factors associated with cessation of disinfection of the ocean discharge.
5. Local Sewer Transfers—Complete the transfer of 174 miles of local sewers serving parts
of the City of Tustin and unincorporated areas north of the City of Tustin and local sewer transfers in the
City of Santa Ana.
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6. Legislative Advocacy and Public Outreach—Develop a unified legislative advocacy and
public outreach program.
7. Future Water Recycling — Determine partnerships, needs, strategies, benefits and costs
associated with recycling of Plant No. 2 effluent water.
8. Workforce Planning and Workforce Development—This initiative is ongoing and part of
a comprehensive workforce planning and development effort to ensure that the District has the right
people with the right skills and abilities, in the right place,at the right time.
DISTRICT REVENUES
Sewer Service Charges
General. The District has the power to establish fees and charges for services of the Wastewater
System. Such fees and charges are established by the District's Board of Directors and are not subject to
review or approval by any other agencies.
In Fiscal Year 1997-98, a Rate Advisory Committee (the "RAC") was established comprised of
representatives from industrial, commercial and residential users. The goal of the RAC was to examine
the then current rate structure and, if needed, develop recommendations for change. The RAC analyzed
the District's rate structure to determine whether its then current sewer service user fees (now known as
"Sewer Service Charges") were equitable among residential and industrial customers. This review
resulted in a proposal to expand the number of non-residential user categories from one to 23 and to
provide for gradual rate increases in seven of the nine Revenue Areas. The Sewer Service Charges for
those categories were based on the average flow and strength of wastewater discharged for each property
type and remain currently in use.
The Board of Directors establishes the annual sanitary sewer service charges by ordinance. The
sanitary sewer service charge ordinances are adopted by a two-thirds vote of the Board of Directors as
required under law after conducting a noticed public hearing in compliance with Proposition 218. See
"LIMITATIONS ON TAXES AND REVENUES — Article XIIIC and Article XIIID of the California
Constitution."
The District collects Sewer Service Charges from property owners through the semi-annual
property tax bill distributed by the County throughout the District, except in Revenue Area No. 14.
Pursuant to the IRWD Agreement, the District receives quarterly fee payments from the IRWD which
directly collects fees from customers through a monthly billing procedure in Revenue Area No. 14.
The District currently participates in the County's Teeter Plan under which the District receives
annually 100% of the secured property tax levies to which it otherwise is entitled, regardless of whether
the County has actually collected the levies.
The District has covenanted in the Master Agreement to fix, prescribe and collect fees and
charges to satisfy certain coverage requirements as further described under "SECURITY AND
SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS—Rate Covenant'herein.
Residential and Commercial Sewer Service Charges. In May 2002, the Board of Directors
adopted District Ordinance No. OCSD 18 (the "2002 Ordinance') which became effective on July 1,
2002. The 2002 Ordinance included a single family residential ("SFR") rate increase, the underlying
basis for all sanitary sewer service charges including sanitary sewer rates for multi-family residential units
as well as most commercial and industrial properties, of$7.50 per year, or 9.4%,to $87.50 per year. In
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June 2003, the Board of Directors authorized a Proposition 218 notice on proposed "not to exceed"rate
increases for each year over the next five years. Paramour to the 2002 Ordinance, the District established
residential Sewer Service Charges, except within Revenue Area No. 14,based on the cost of services and
facilities provided to each customer of the District. The noticed public hearing held in connection with
the 2002 Ordinance considered increases in the amount of the annual charges of approximately 20%per
year for each of the then following five years. In May 2005, the Board of Directors adopted Ordinance
No. OCSD-26 increasing the Fiscal Year 2005-06 single family residential rate, the underlying basis for
all sewer service charges, by 31%, from $115.00 to $151.00 for all ratepayers, except those located in
Revenue Area No. 14. In June 2007,the Board of Directors adopted Ordinance No. OCSD-32 increasing
the Fiscal Year 2007-08 single family residential rate by 9.8%.
On February 27, 2008, the Board of Directors approved increases in its sanitary sewer service
charges for all SFRs and multi-family residential units, and for all commercial properties. The Board of
Directors increased the SRF rate, which is the basis for all of the District's sewer service charges, by
10.4%for Fiscal Year 2008-09, 10.0%for Fiscal Year 2009-10, 10.4%for Fiscal Year 2010-11, 9.4% for
Fiscal Year 2011-12 and 10.1% for Fiscal Year 2012-13. On March 27, 2013, the Board of Directors
adopted Ordinance No. OCSD-41 approving increases in its sanitary sewer service charges for all SRFs,
multi-family residential units, and all non-residential properties. The Board increased the SRF rate,
which is the basis for all of the District's sewer service charges, by 4.8% for Fiscal Year 2013-14 and
thereafter by an average annual increase of 2.4%for each Fiscal Year through Fiscal Year 2017-18.
Set forth in Table 6 below is a comparison of the Sewer Service Charge rate for single family
residences for the fiscal years shown.
Table 6
Annual Sewer Service Charges
Single Family Residence Rate
Ten Year Rate Schedule
Fiscal Years 2008-09 through 2017-18
Fiscal Sewer Service Fiscal Sewer Service
Year Charee Year Charee
2008-09 $201 2013-14 $308
2009-10 221 2014-15 316
2010-11 244 2015-16 323
2011-12 267 2016-17 331
2012-13 294 2017-18 339
Source: Orange County Sanitation District
Set forth in Table 7 below are the total average annual Sewer Service Charges for SFRs within
the District, together with comparable total average annual charges for wastewater service within the
jurisdictions of certain other cities and districts within the State as of the dates indicated. The District's
approved SFR rate of$316 in Fiscal You 2014-15 remains below the average annual sewer rate of$484
according to a Fiscal Year 2012-13 survey of 759 agencies encompassing all 58 counties in California
conducted by the State Water Resources Control Board.
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Table 7
Comparison of Total Sewer Service Charges
For Single Family Residences
As of July 1,2013
Average Dry Annual
Weather Sewer
Flow Service Treatment Collection Property Tax
End (me/d)to Charge"' Levelo"' Resuonsibili to Income"'
City of San Diego 168 $573 2 Yes No
City of Los Angeles 428 435 4 Yes No
East Bay MUD 80 358 4 No Yes
Sacramento County 140 348 3 No Yes
Orange County 221 316 3 No Yes
Sanitation District
Los Angeles County 497 245 4 No Yes
Source: Information obtained from respective entities listed.
17 Treatment Level Categories:
"1"—Primary treatment.
"2"—Advanced primary or primary with some secondary treatment.
"3"—Secondary treatment.
"4"—Advanced secondary or secondary with some tertiary treatment.
(3) "5"—Tertiary treatment Source: Wastewater User Charge Survey Report by the California State Water Resources Control Board.
Industrial Sewer Service Charges. The District charges industrial Sewer Service Charges to
customers discharging high-strength or high-volume wastes into the sewer systems. Customers subject to
industrial Sewer Service Charges are billed directly by the District. The fee charged to each customer is
based on the customer's sewage volume, the concentration of suspended solids and biochemical oxygen
demand. Pursuant to the 2002 Ordinance, rates for each component factor were revised for certain
industrial users in order to be consistent with the rates charged to residential users. Total industrial Sewer
Service Charges in Fiscal Year 2013-14 were approximately $14.4 million. Industrial Sewer Service
Charges are applied to both operating and capital funds.
The Sewer Service Charge increases described above are necessary to meet the District's cash
flow needs arising from the addition of disinfection treatment and other operating requirements. As
projected through Fiscal Year 2030-31, the cash flow needs of the CIP total approximately $1.9 billion.
Over the next five years the CIP contemplates average annual capital expenditures of$141.7 million. In
addition, the CIP contemplates $286 million, or an annual average of$57 million, to finance projects
currently unknown or unidentified as forecasted by the District's Asset Management Program(the"Asset
Management Program").
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Additional Revenues
The District has several sources of additional revenue, including property taxes, Capital Facilities
Capacity Charges,capacity rights,permit and inspection fees and interest earnings.
Property Taxes. The District receives approximately 2.5%of the one percent County ad valorem
property tax levy, based on the allocation procedure under State law. Property tax revenues were $64.8
million in Fiscal Year 2009-10, $64.3 million in Fiscal Year 2010-11, $67.9 million in Fiscal Year 2011-
12, $77.3 million in Fiscal Year 2012-13, and are estimated to be 74.0 million in Fiscal Year 2013-14.
Because of one-time redevelopment dissolution property tax proceeds received in Fiscal Year 2012-13,
the District currently estimates that its property tax receipts will decrease slightly in Fiscal Year 2013-14,
but increase by approximately 5.0%each year thereafter through Fiscal Year 2018-19. The apportionment
of the ad valorem tax is made pursuant to a revenue program adopted by the District in April 1979 to
comply with EPA and RWQCB mandates, legal and contractual requirements and Board of Director's
policy.
Capital Faclities Capacity Charges. Capital Facilities Capacity Charges (commonly referred to
as connection fees) are one-time fees with two components, paid at the time property is developed and
connected to the Wastewater System. The fees are imposed by the District pursuant to Section 5471 of
the California Health and Safety Code and are levied to pay a portion of the District's capital costs and for
access to capacity in the Wastewater System. The District currently has Capital Facilities Capacity
Charges of $3,341 per residential unit (three-bedroom); however, under the current industrial use
ordinance, additional Capital Facilities Capacity Charges can be imposed on industrial users who place
larger than average demand on the Wastewater System. Member cities and sanitary districts collect
Capital Facilities Capacity Charges for the District when building permits are issued. Capital Facilities
Capacity Charges are reviewed annually to reflect the changes in the value of the Wastewater System to
which a new customer is connecting.
On December 15, 1999, the Board of Directors approved District Ordinance No. OCSD 99-11
(the"1999 Ordinance")which established a comprehensive Capital Facilities Capacity Charge. The 1999
Ordinance, effective as of January 1, 2000, renamed connection fees as Capital Facilities Capacity
Charges and provided a more equitable schedule of fees among industrial, commercial and residential
users. Pursuant to the 1999 Ordinance,Capital Facilities Capacity Charges were revised for high demand
industrial users in five incremental increases from 1999 through 2001. For a summary of historical and
projected revenues derived from Capital Facilities Capacity Charges, see Table 14 and Table 15 below.
Pursuant to an agreement with the IRWD, the IRWD is not required to pay Capital Facilities
Capacity Charges and, in exchange, the IRWD provides funding to the District for the construction costs
of certain wastewater collection, transmission, treatment and disposal facilities to be used by the IRWD
and is obligated to make certain payments to the District for certain services arising from the Wastewater
System(including any standby or availability charges).
Sale of Capacity. The District has entered into agreements with the Santa Ana Watershed Project
Authority ("SAWPA") whereby wastewater from Upper Santa Ana River Basin dischargers can be
transported through the District's Santa Ana River Interceptor to the District's wastewater treatment
facilities. This program was developed in the early 1970s. The agreements establish control mechanisms
regarding the quality of wastes deposited into the Wastewater System. At the present time, SAWPA has
purchased and paid for 30 mg/d of maximum regulated flow capacity rights in the District's Santa Ana
River Interceptor and 17 mg/d of monthly average flow capacity in the District's wastewater treatment
plants. Projected revenues from SAWPA range from$4.5 million to$5.3 million over the next five years.
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Additional treatment plant capacity can be purchased in increments at the District's current replacement
cost.
Federal Subsidy Payments. In connection with the District's Revenue Obligations,Series 2010A
(the "2010A Revenue Obligations") and the District's Revenue Obligations, Series 2010C (the "2010C
Revenue Obligations"), issued as "Build America Bonds," the District is scheduled to receive certain
federal subsidy payments of approximately $5.1 million annually through 2031 and lesser amounts
thereafter until 2044. Subsidy payments with respect to the 2010A Revenue Obligations and the 2010C
Revenue Obligations constitute Revenues as defined in the Master Agreement. In its financial reports,the
District accounts for subsidy payments received in connection with the 2010A Revenue Obligations and
the 2010C Revenue Obligations as a reduction in interest expense with respect to such obligations.
For the 2010A Revenue Obligations and the 2010C Revenue Obligations to be and remain Build
America Bonds, the District must comply with certain covenants and establish certain facts and
expectations with respect to the 2010A Revenue Obligations and the 2010C Revenue Obligations,the use
and investment of proceeds thereof and the use of property financed thereby. Thus, it is possible that the
District may not receive the federal subsidy payments due to the District's noncompliance. The federal
subsidy payments are also subject to offset against amounts that may, for unrelated reasons, be owed by
the District to any agency of the United States of America.
On March 1, 2013, the federal government announced the implementation of certain automatic
spending cuts (mown as the sequester. As a result of the sequester, federal subsidy payments for the
2010A Revenue Obligations were reduced by 8.7% (or$67,874)and by 7.2% (or$67,874) for the federal
fiscal years ended September 30, 2013 and September 30, 2014, respectively, and federal subsidy
payments for the 2010C Revenue Obligations were reduced by 8.7% (or $152,807) and by 7.2% (or
$152,807) for the federal fiscal years ended September 30, 2013 and September 30, 2014, respectively.
According to the Internal Revenue Service, subsidy payments will be reduced by 7.3% for the federal
fiscal year ending September 30, 2015. The District is obligated to make all payments with respect to the
2010A Revenue Obligations and the 2010C Revenue Obligations, however, from Revenues as defined in
the Master Agreement,regardless of whether it receives the full amount of federal subsidy payments. The
District cannot predict whether future reductions in federal subsidy payments will occur due to the
sequester. However, the District does not believe that any reduction in federal subsidy payments will
have a material adverse effect on the District's ability to pay the 2010A Revenue Obligations or the
2010C Revenue Obligations.
Wastewater Treatment History
The wastewater flows for Fiscal Year 2008-09 through Fiscal Year 2013-14 were 211 mg/d, 196
mg/d, 207 mg/d,201 mg/d, 200 mg/d and 198 mg/d respectively. The highest flow rate experienced was
during El Nifio stomt periods. Peak flows of 500 mg/d were recorded in December 1997 and February
1998. There were no sewer failures or overflows during these events.
Customers
The historical number of customers served by the District for the Fiscal Years 2009-10 through
2013-14 and the projected number of customers served by the District for the Fiscal Years 2014-15
through 2018-19, identified in Equivalent Dwelling Units ("EDUs"), are set forth in Table 8 and Table 9
below. As discussed below, sewer service charges are based on the expected amount of wastewater flow
for a single family dwelling. This base amount is considered the "equivalent dwelling unit." Set forth in
Table 8 below are the EDUs that equate to total Sewer Service Charge levies,while the EDUs set forth in
Table 9 equate to total sewer service charge collections.
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Table 8
Historical and Projected Equivalent Dwelling Units
Fiscal Years 2009-10 through 2018-19
Historical Projected
Fiscal Year EDUs([) Fiscal Year EDUs
2009-10 930,164 2014-15 920,506121
2010-11 924,622 2015-16 923,175
2011-12 924,525 2016-17 925,898
2012-13 915,685 2017-18 928,676
2013-14 917,936 2018-19 931,462
With respect Fiscal Years, presentation in the Statistical Section of the District's Comprehensive
Annual Financial Report set forth in Appendix A includes EDUs that equate to total Sewer Service Charge
collections rather than levies.
n) EDUs projected in the proposed two-year budget as of June 2014.
Source: Orange County Sanitation District.
Set forth in Table 9 below are the number of residential and commercial customers and industrial
customers and the approximate percentages of Sewer Service Charge revenues derived from the
combined residential and commercial use and industrial use for the last five fiscal years.
Table 9
Number of Accounts and Revenues by Customer Class
for the Fiscal Years 2009-10 through 2013-14
(S in Millions)
Residential/Commercial Industrial
Number of Percentage Percentage
Equivalent of Sewer of Sewer
Single- Service Number of Service
Family Total Charge Customer Total Charge
Fiscal Year Dwellings Revenue Revenues Accounts Revenue Revenues
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
Source:Orange County Sanitation District.
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Set forth in Table 10 below are the ten largest principal sewer service customers of the District
for the Fiscal Year ended June 30,2014.
Table 10
Largest Principal Sewer Service Customers of the District
for the Fiscal Year Ended June 30,2014
Sewer Service
User Charees
House Foods America Corp. $1,096,791
Kimberly-Clark Worldwide, Inc. 1,059,850
Stremicks Heritage Foods,LLC 971,832
MCP Foods,Inc. 898,925
Dean Foods Co. of CA Inc. 585,374
Nor-Cal Beverage Co. Inc. (NCB) 577,261
Jazz Semiconductor 475,299
Ameripec Inc. 420,365
Pepsi-Cola Bottling Group 402,513
Pulmuone Wildwood,Inc. 383,365
Total
Source: Orange County Sanitation District.
Assessed Valuation
The assessed valuation of property in the County is established by the County Assessor, except
for public utility property which is assessed by the State Board of Equalization. Due to changes in
assessment required under State Constitution Article XIIIA, the County assessment roll no longer
purports to be proportional to market value. See "LIMITATIONS ON TAXES AND REVENUES"
herein. Generally,property can be reappraised upward to market value only upon a change in ownership
or completion of new construction. The assessed value of property that has not incurred a change of
ownership or new construction most be adjusted annually to reflect inflation at a rate not to exceed 2%
per year based on the State consumer price index. In the event of declining property value caused by
substantial damage, destruction, economic or other factors, the assessed value must be reduced
temporarily to reflect market value. For the definition of full cash value and more information on
property tax limitations and adjustments,see"LIMITATIONS ON TAXES AND REVENUES"herein.
The County Assessor determines and enrolls a value for each parcel of taxable real property in the
County every year. The value review may result in a reduction in value. Taxpayers in the County also
may appeal the determination of the County Assessor with respect to the assessed value of their property.
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Set forth in Table 11 below is a five-year history of assessed valuations in the District for the
fiscal years shown.
Table 11
Assessed Valuations of Property in the District
Fiscal Years 2010-11 through 2014-15
($in Billions)
Fiscal Year Value Percent Chance
2010-11 $304.3 (0.27%)
2011-12 308.7 1.43
2012-13 316.4 2.48
2013-14 329.3 4.09
2014-15 350.5 6.44
Source: County of Orange Auditor-Controller.
Tax Levies and Delinquencies
Property taxes are based on assessed valuation which is determined as described under
"DISTRICT REVENUES—Assessed Valuation"herein. In accordance with the California Revenue and
Taxation Code, the County tax collector collects secured tax levies for each Fiscal Year. Property taxes
on the secured roll are due in two installments, on November 1 and February 1. The District currently
participates in the County's Teeter Plan under which the District receives annually 100% of the secured
property tax levies and Sewer Service Charges to which it otherwise is entitled,regardless of whether the
County has actually collected the levies. This alternative method provides for funding each taxing entity
included in the Teeter Plan with its total secured property taxes during the year the taxes are levied,
including any amount uncollected at fiscal year-end. Under this plan,the District's general fund receives
the full amount of seemed property taxes levied each year on its behalf and, for so long as such plan
remains in effect, the participating entities, such as the District, no longer experience delinquent taxes.
The County's general fund is the designated recipient of future collections of penalties and interest on all
delinquent taxes collected on behalf of participants in this alternative method of apportionment. In recent
years, the County has experienced delinquencies of Sewer Service Charges in the District of
approximately 2.0%.
Set forth in Table 12 below is a five-year history of the District's ad valorem total property tax
and Sewer Service Charge levies.
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Table 12
Total Property Tax and Sewer Service Charge Levies
in the District for Fiscal Years 2010-11 through 2014-15
(In Thousands)
Total Property Tax and Sewer
Fiscal Year Service Charge Lew
2010-I1 $292,646
2011-12 314,077
2012-13 340,298
2013-14 356,904
2014-15 363,144
Source: County of Orange Auditor-Controller.
Budgetary Process
The District's operating fund budget relies on revenues from Sewer Service Charges and property
taxes,both of which me collected on the property tax bill, as previously described under the captions'—
Sewer Service Charges" and '— Additional Revenues." The District receives tax revenues from the
County in eight allocations, with the largest receipts in December and April. The District operates on a
Fiscal Year beginning each July 1. The operating fund budgets include funds to cover the dry period of
each tax year, i.e.,the period from the beginning of the Fiscal Year until the first taxes are received. The
dry-period requirement is budgeted at one-half of the annual operating fund budgeted expenditures. The
District uses the accrual method of accounting in its budgets. The District has conformed to its budgets
for the last five fiscal years and is conforming to its budget for the current fiscal year.
The District's annual budget preparation process begins in January of each year and concludes in
June upon its adoption. The General Manager reviews the final operating budgets and then distributes
them to the Directors and District Committees for consideration. The Board of Directors then adopts the
proposed annual budgets,with any revisions,in June of each year.
Budgetary control is exercised at the individual Department level and administrative policies
provide guidelines on budget transfers and the authorization necessary to implement transfers. A budget
adjustment is a transfer which does not change the total appropriated amount and does not require Board
of Directors action. Approval may be granted by the General Manager or the Department Head in certain
circumstances. Department Heads have the discretion to reapportion funds between certain line items
within a division but may not exceed total appropriated amounts for each department. They may also
transfer staff across divisional lines. The General Manager and Board of Directors most approve
additional capital outlay items.
A budget amendment is an adjustment to the total appropriated amount which was not included in
the original budget. These supplemental appropriations require formal action by the Board of Directors.
Prior you reserves or fund balances may be appropriated to fund items not previously included in the
adopted budget. Reserves or fund balances exceeding minimum amounts required by fiscal policies may
be appropriated if it is determined to be in the best interest of the District. Directors may also appropriate
reserves in case of emergencies or unusual circumstances.
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Reserves
The District has an established reserve policy with eight separate categories for its reserve funds.
Collectively, these individual reserve requirements total over $500 million for each year of the current
ten-year cash flow forecast.
Set forth in Table 13 below are the actual reserves at June 30, 2012, June 30, 2013 and June 30,
2014, and projected reserves at June 30,2015 for each fund.
Table 13
Cash Reserves
June 30,2012 through 2014
and Projected at June 30,2015
(In Millions)
Actual Projected
2012 2013 2014 2015
June 30 June 30 June 30 June 30
Cash Flow Requirements Reserve—
Operating Expenses $ 76 $ 76 $ 76 $76
Certificates of Participation Payments 92 98 98 86
Operating Contingencies Reserve 15 15 15 15
Capital Improvement Program Reserve 171 209 275 216
Catastrophe and Self Insurance 57 57 57 57
Capital Replacement and Refurbishment 59 61 61 62
Debt Service Required Reserveslo 138 135 132 129
Total 608 651 $L S641
"Debt Service Required Reserves" constitute all amounts held in Obligation Reserve Funds, together with
additional amounts held by the District that may be used for the payment of debt service on District obligations
in accordance with the District's reserve policy. As of June 30, 2014, $132 million of Debt Service Required
Reserves were held in Obligation Reserve Funds,of which$43.1 million is restricted by covenant for the specific
obligations for which such Obligation Reserve Funds were established.
Source: Orange County Sanitation District.
The District's reserves consist of the following components:
• The Cash Flow Requirements Reserve was established to fund operation, maintenance and
certificates of participation debt service expenses for the first half of the fiscal year, prior to the
receipt of the first installment of the property tax allocation and sewer service user fees which are
collected as a separate line item on the property tax bill. The level of this reserve is established as
the sum of an amount equal to six months operations and maintenance expense and the total of
certificates of participation debt service expenses due in the subsequent fiscal year.
• The Operating Contingencies Reserve was established to provide for non-recurring expenditures
that were not anticipated when the annual budget and Sewer Service Charges were adopted. The
level of this reserve is equal to 10%of the District's annual operating budget.
• The Capital Improvement Program Reserve was established to fund annual increments of the
Capital Improvement Program with a target level at one-half of the average annual Capital
Improvement Program through the year 2020. Levels higher and lower than the target can be
expected while the long-term financing and capital improvement programs are being finalized.
47194378.5
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• The Catastrophic Loss, or Self-Insurance Reserve is established for property damage including
fire, flood and earthquake, general liability and workers' compensation. The level of reserve in
this fund is maintained at a level to fund the District's non-reimbursed costs which are estimated
to be$57 million.
• The Capital Replacement and Refurbishment Reserve was established to provide 30% of the
funding to replace or refurbish the current collection, treatment and disposal facilities. The
current replacement value of these facilities is estimated to be approximately $6.2 billion. The
initial reserve level for this fund was established at $50 million and is augmented by interest
earnings and a portion of the annual Sewer Service Charges.
• Debt Service Required Reserves include trustee-held amounts in any Obligation Reserve Fund
and additional amounts held by the District for the payment of debt service in accordance with the
District's reserve policy. The District's current policy is to maintain reserves (including trustee-
held reserves) for debt service in the amount of 10% of the principal amount of the District's
outstanding debt obligations.
• The Rate Stabilization Reserve accumulates all available funds which exceed the targets for all
other reserves. The Rate Stabilization Reserve is a separate fund from the Rate Stabilization
Account established under the Trust Agreement. There is currently no established target for this
reserve and,because the reserves of all other funds have not been exceeded, the reserve level for
this reserve fund has been zero for Fiscal Year 2010-11 through Fiscal Year 2013-14.
• In Fiscal Year 2009-10, Financial Management staff and the Board of Directors concluded that
given the nature of the likely events that may cause a withdrawal from the District's reserves and
the degree of overlap among reserve categories,the total amount reserved need not equal the sum
of each separate reserve category. As a result, the District adjusted the application of its reserve
policy, leading to a reduction of $40 million of the accumulated total, or approximately 8%.
Reserve levels are calculated in accordance with the District's reserve policy.
Summary of Operating Data
Set forth in Table 14 below is a summary of historic operating results for the District for Fiscal
Years 2009-10 through Fiscal Year 2013-14. The information presented in the summary should be read
in conjunction with the financial statements and notes. See APPENDIX A — "COMPREHENSIVE
ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR
FISCAL YEAR ENDED TUNE 30,2014."
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Table 14
Summary of District Historical Revenues and Expenses
and Other Financial Information
For Fiscal Years 2009-10 through 2013-14
($in Millions)
Audited
2009-10 2010-11 2011-12 2012-13 2013-14
Revenues:
Residential &Commercial
Sewer Service Charges(l)
Regional $193.5 $213.3 $232.2 $258.6 $267.8
Local 5.6 5.7 5.7 5.8 5.7
Industrial Sewer Service Charges 10.8 10.1 9.5 13.5 14.4
Revenue Area No. 14 Fees 10.2 21.4 18.0 27.5 23.6
Ad Valorem Taxes 64.8 64.3 67.9 77.3 72.8
Interest Earnings 19.2 10.1 15.7 (3.6) 6.1
Other Revenues 12.5 5.7 3.6 4.6 5.1
Total Revenues $316.6 $330.6 $352.6 $383.7 $395.5
Operations and Maintenance
Expenses(1) 138.1 143.4 172.31s7 149.8 146.4
Net Revenues $178 5 $187 2 $180 3 $233 9 24 1
Debt Service 67.1 $_72. 65.4 $ 77. $_2"
Coverage Ratios 2.66x 2.59x 2.76x 3.01x 2.68x
CIP Outlay $251.1 $1607 $1017 $ 416 $$7.5
Ending Reserves $473.0 $597.0 1608.0 $615, $713.7
al Net of rebates,if any,to commercial users.
(n) Excludes depreciation and amortization expenses.
o) Includes a one-time write-down of$34.2 million for costs of feasibility studies (which costs were previously
capitalized and being amortized over a five-year period) to properly conform to generally accepted accounting
principles.
Source: Orange County Sanitation District.
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Forecasted Operating Data
Set forth in Table 15 below are forecasted operating results for the District for Fiscal Years 2014-
15 through 2018-19. These projections assume the number of projects and scheduled build out set forth
in the 2014 CIP Validation Study, and reflect the Board-approved rate increase of 2.6% in Fiscal Year
2014-15, and the average annual rate increases of 2.4% over the following three fiscal years. Principal
expenditure components of these projections are derived from the 2014 CIP Validation Study, which
identified 77 large capital projects and 38 special projects with a 20-year projected outlay of$1.9 billion.
Much of the construction is scheduled during the next four and a half years, with average annual capital
outlays of$141.7 million. The District's CIP cash flow budget for Fiscal Year 2014-15 is $169.2 million.
This CIP budget finances joint works treatment and disposal system improvement projects, and collection
system improvement projects. The preparation of such projections was based upon certain assumptions
and certain forecasts with respect to conditions that may occur in the future. While the District believes
that these assumptions and forecasts are reasonable for the purposes of the projected selected operating
data, it makes no representation that they will in fact occur. To the extent that actual future conditions
differ from those assumed herein,the data will vary.
[Remainder of page intentionally left blank.]
47194378.5
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Table 15
Summary of Forecasted District Revenues and Expenses
and Other Financial Information
for Fiscal Years 2014-15 through 2018-19
($in Mitlions)"41
2014-15 2015-16 2016-17 2017-18 2018-19
Revenues
Residential&Commercial
Sewer Service Charges $288.9 $296.3 $304.5 $312.9 $321.4
Industrial Sewer Service Charges 13.7 14.0 14.3 14.7 15.0
IRWD Assessments 14.2 13.5 8.8 4.6 5.0
SAWPA Assessments 2.5 2.7 2.8 2.9 3.0
Ad Valorem Taxes 77.7 81.6 85.7 90.0 94.5
Interest Earnings 13.1 14.7 17.4 17.5 20.6
Other Revenues 1.7 1.7 10.1 1.8 1.8
Total Revenues $411.8 $424.5 $443.6 $444.4 $461.3
Add: Build America Bonds
Federal Subsidy") $ 5.1 $ 5.1 $ 5.1 $ 5.1 $ 5.1
Operations and Maintenance Expenses (152.5) (155.0) (158.8) (162.6) (169.9
)
Net Revenues(2) $2644 $274.6 $289.9 $286.92 65
Debt Service $ 85.8 $ 86.7 $ 91.7 $ 87.8 $ 86.0
Build America Bonds Federal Subsidy 5.1 5.1 5.1 5.1 5.1
Gross Debt Service $ 90 9 $2L8 S 96.8 S-92.9 S 91.1
Coverage Ratios(2) 1.91x 2 99x 2 99x 3,42x 3 25x
CIE Outlays $186.4 206.0 $1966 $205.9 $198.9
Replacement,Refurbishment and
Rehabilitation(�1 17.2 25.7 61.1 100.5 90.9
Ending Reserves %599.8 $5$74 S593A $590 $606.9
See REVENUES-Additional Revenues-Federal Subsidy Payments"herein.
(%) Calculated in accordance with the Master Agreement and the Installment Purchase Agreement.
n) Represents future capital outlays identified within the District's Asset Management Program that have not been
developed into specific proposed projects and included within the CIP.
(4) Assumptions:
a) Annual growth in EDUs is projected to increase 0.3%over the next five years.
b) The Residential and Commercial Sewer Service Charge and the Industrial Sewer Service Charges forecasts
are based on the total projected EDUs, and the actual board approved rate increase of 2.6% in Fiscal Year
2014-15,and board approved rate increases over the next three years averaging 2.4%per year.
c) Revenue Area No. 14 Fees are derived based on the projected contribution of sewage flows to the District
from the IRWD.
d) Ad valorem taxes are projected with annual increases of 5.0%.
c) Interest eamings are projected to average 2.0%of annual cash balances.
f) Operating and Maintenance Expenses are forecasted with a base increase of 1.1%per year with adjustments
for known periodic outlays that do not occur annually.
g) Annual CIP Outlays are based on the cash flow projections developed from the CIP Validation Study.
Source: Orange County Sanitation District.
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Management's Discussion and Analysis of Operating Data
The District's Fiscal Year 2014-15 total operating, capital improvement, debt service, and other
financing requirement budget is $554.4 million, a 39.6% increase over the prior year budget of$397.0
million. This overall increase is primarily attributable to a one-time reduction of$125 million in long-
term liabilities. This one-time reduction is the result of some of the 2013-14 CIP program being spread
out into future years and the receipt of unexpected one-time revenues in Fiscal Year 2013-14. This $125
million one-time reduction will consist of a pay-down of a portion of the $200 million current unfunded
accrued actuarial pension liability. Excluding this one-time reduction, the total proposed cash flow
budget for Fiscal Year 2014-15 totals $429 million, an 8.2% increase over the prior year. This overall
increase consists of an increase in capital outlay of$41.5 million or 28.2%, a decrease in debt service
requirements of$12.4 million or 12.6%,and an increase in operating expenses of$3.2 million or 2.1%.
The Fiscal Yew 2014-15 proposed budget to operate, maintain and manage am sewage
collection, treatment and disposal system is $152.5 million, an increase of 2.1% over the prior year
budget. Personnel costs have increased by$1.2 million,or 1.2%, due to the retirement of many long-term
employees, as there were 23 retirees in Fiscal Year 2013-14 and 17 retirees in Fiscal Year 2012-13. As of
Much 31, 2014,there were 44 vacant positions,or 7.0%of total staffing, and staffing levels are proposed
to remain unchanged from the current full-time equivalent("FTE")positions of 626.0.
Repairs and maintenance costs me proposed to increase $1.8 million or 15.8%. This increase is
mostly attributable to increases in basic repairs and maintenance costs including the scheduling of
digester cleanings totaling$1.0 million and one central generation engine overhaul totaling$893,000.The
biosolids hauling budget was raised $0.92 million, or 5.3%, due to a slight increase in unit cost and the
anticipated increase in biosolids production that is projected to peak at about 785 tons per day, up from
the prior fiscal year average of 765 tons per day,because of several projects that could reduce operational
performance.
Overhead cost allocation out to the CIP has been reduced by$1.5 million, or 8.1%reduction due
to decreased CIP outlay over the past several years.
Conversely affecting these operating increases,chemical supplies have decreased$1.0 million,or
6.8%, as a result of the decrease disinfection, odor control, and chemicals used in the treatment process
due to chemical optimization and decreased disinfection requirements. In addition,property and liability
insurance premiums me proposed to decrease $900,000, or 64.3%, due to favorable market conditions on
premiums for insurance renewals.
In preparation of the Fiscal Year 2014-16 biennium budget,District staff developed and reviewed
with the Board of Directors a capital improvement program to deliver the levels of service included in the
District's five-year strategic plan. These levels of services and associated capital projects are included in
the District's Five-Year Strategic Plan. In addition, District staff validated the active CIP projects
currently being executed to ensure that the scope of work on the active projects remains appropriate, and
that the cost estimates have been accurately updated. The Fiscal Year 2014-15 CIP cash flow budget was
approved at $169.2 million. The 2014 validated CIP includes 77 large capital projects and 38 special
projects with 20-year outlays totaling$1.9 billion.
The completion of the CIP Validation Study in 2013 reaffirmed the need for rate increases in
future years. Based on the results of the CIP Validation Study and the Five-Year Plan, the Board of
Directors adopted Ordinance No. OCSD-41, increasing the sanitary sewer service charges by
approximately 4.8% in Fiscal Year 2013-14, and by an average of 2.4% over the following four years.
These rate increases were approved by a vote of two-thirds of the members of the Board of Directors and
47194378.5
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are not subject to reaffirmation in any of the future fiscal years covered by this five-yew period. This
action increased the single family residence user rate,the basis for all sewer user fee rates, from $308 in
Fiscal Year 2013-14 to $316 in Fiscal Year 2014-15. See "DISTRICT REVENUES — Sewer Service
Charges."
Investment of District Funds
State statutes authorize the District to invest in obligations of the United States Government,state
and local governmental agencies, negotiable certificates of deposits, bankers acceptances, commercial
paper, reverse repurchase agreements and a variety of other investment instruments which are allowable
under California Government Code Section 53600 et seq.
All District funds, except for Obligation Reserve Funds controlled by a bank trustee pursuant to
the provisions of Existing Senior Obligations, are managed by an external money manager, Pacific
Investment Management Company. Mellon Trust serves as the District's independent custodian bank for
its investment program. Callan Associates serves as the District's independent advisor.
As of October 31, 2014, the District's externally managed fund consisted of a short-term
investment portfolio of$58.8 million with an average maturity of 37 days, and a long-term investment
portfolio of$416.8 million with average maturities of 2.6 years. Investments consist of United States
government securities, corporate bonds and commercial paper. The District's portfolio contains no
structured investment vehicles("SIVs")or reverse repurchase agreements.
Deposits in banks are maintained in financial institutions which provide deposit protection on the
bank balance from the Federal Deposit Insurance Corporation. The California Government Code requires
State banks and savings and loans to secure local government deposits by pledging government securities
equal to 110% of the deposits or by pledging first trust deed mortgage notes equal to 150% of the
deposits.
The District's Investment Policy requires that the District invest public funds in a manner which
ensures the safety and preservation of capital while meeting reasonable anticipated operating expenditure
needs, achieving a reasonable rate of return and conforming to all state and local statutes governing the
investment of public funds. The primary objectives, in order, of the District's investment activities are
safety,liquidity and return on investment.
FINANCIAL OBLIGATIONS
Existing Indebtedness
Currently, the District has Senior Obligations Outstanding payable on a parity with the Revenue
Obligations. The table below describes the District's outstanding parity certificates of participation as of
January 1, 2015. The payment obligations in connection with each series of these certificates of
participation constitute Senior Obligations,subject to the provisions of the Master Agreement and shall be
afforded all of the benefits, interests and security afforded Senior Obligations pursuant to the Master
Agreement. The District has no general obligation bonds or subordinate bonds outstanding.
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Table 16
Outstanding Senior Obligations
As of January 1,2015
Original Principal Issue Outstanding Final
Amount Date Balance Maturi
2007A Certificates $ 95,180,000 05/22/07 $ 92,385,000 02/01/30
2007B Certificates 300,000,000 12/20/07 173,325,0001D 02/01/37
2008B Certificates 27,800,000 09/11/08 17,315,000 08/01/16
2009A Certificates 200,000,000 05/07/09 184,090,000 02/01/39
2010A Certificates 80,000,000 05/18/10 80,000,000 02/01/40
2010C Revenue Obligations 157,000,000 11/29/10 157,000,000 02/01/44
2011A Revenue Obligations 147,595,000 10/03/11 121,290,000 02/01/26
2012A Revenue Obligations 100,645,000 03/22/12 100,645,000 02/01/33
2012B Revenue Obligations 66,395,000 08/16/12 66,395,000 02/01/26
2014A Revenue Obligations 85,090,000 08/07/14 85,090,000 02/01/27
2014B Certificates(2) 120,850,000 10/08/14 120,850,000 11/15/16n1
Total Senior Obligations 1.3R0.555.000 $1.198.385.000
Includes the Refunded Certificates to be refunded with the proceeds of the Revenue Obligations. See
"REFUNDING PLAN"herein.
I�1 The District may in the future refund the 2014B Certificates with Senior Obligations amortizing over a term of
approximately 21 years.
In connection with the execution and delivery of the above-referenced outstanding certificates of
participation, the District entered into certain installment purchase agreements, or equivalent documents,
providing for the payment of installment payments or similar payments.
Anticipated Financings
From time to time the District may incur other obligations to finance portions of the CIP. Over
the next ten years,however,the District does not expect to issue any additional debt,other than refunding
debt. The District expects to refund outstanding obligations from time to time, such as the 2014B
Certificates mentioned in Table 16 above.
Direct and Overlapping Bonded Debt
The aggregate direct and overlapping bonded debt of the District as of June 30, 2014 is set forth
on page 54 of Appendix A.
THE CORPORATION
The Corporation was organized on June 19, 2000 as a nonprofit public benefit corporation
pursuant to the Nonprofit Public Corporation law of the State. The Corporation's purpose is to render
assistance to the District in its acquisition of equipment,real property and improvements on behalf of the
District. Under its articles of incorporation, the Corporation has all powers conferred upon nonprofit
public benefit corporations by the laws of the State,provided that it will not engage in any activity other
than that which is necessary or convenient for, or incidental to the purposes for which it was formed.
47194378.5
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The Corporation is a separate legal entity from the District. It is governed by a twenty-five
member Board of Directors. The Corporation has no employees. All staff work is performed by
employees of the District. The members of the Corporation's Board of Directors are the Board of
Directors of the District.
The District's Director of Finance and Administrative Services and other District employees are
available to provide staff support to the Corporation.
The Corporation has not entered into any material financing arrangements other than those
referred to in this Official Statement. Further information concerning the Corporation may be obtained
from the Orange County Sanitation District office at 10844 Ellis Avenue, Fountain Valley, California,
92708-7018.
LIMITATIONS ON TAXES AND REVENUES
Article XIIIA of the California Constitution
On June 6, 1978, California voters approved proposition 13 ("Proposition 13"), which added
Article XIIIA to the State Constitution ("Article XIIIA"). Article XIIIA, as amended, limits the amount
of any ad valorem tax on real property to one percent of the full cash value thereof, except that additional
ad valorem taxes may be levied to pay debt service on (i)indebtedness approved by the voters prior to
July 1, 1978,(ii)(as a result of an amendment to Article XIIIA approved by State voters on Jane 3, 1986)
on bonded indebtedness for the acquisition or improvement of real property which has been approved on
or after July 1, 1978 by two-third of the voters on such indebtedness, and (iii)bonded indebtedness
incurred by a school district or community college district for the construction, reconstruction,
rehabilitation or replacement of school facilities or the acquisition or lease of real property for school
facilities, approved by 55% of the voters of the district, but only if certain accountability measures are
included in the proposition. Article XIIIA defines full cash value to mean "the county assessor's
valuation of real property as shown on the 1975-76 tax bill under "full cash value," or thereafter, the
appraised value of real property when purchased, newly constructed, or a change in ownership has
occurred after the 1975 assessment" The full cash value may be adjusted annually to reflect inflation at a
rate not to exceed 2%per year or to reflect a reduction in the consumer price index or comparable data for
the area under the taxing jurisdiction, or reduced in the event of declining property values caused by
substantial damage, destruction, or other factors. Legislation enacted by the State Legislature to
implement Article XIIIA provides that notwithstanding any other law, local agencies may not levy any ad
valorem property tax except to pay debt service on indebtedness approved by the voters as described
above.
Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement Article
XIIIA. Under current law,local agencies are no longer permitted to levy directly any property tax(except
to pay voter-approved indebtedness). The one percent property tax is automatically levied by the County
and distributed according to a formula among taxing agencies. The formula apportions the tax roughly in
proportion to the relative shares of taxes levied prior to 1989.
Increases of assessed valuation resulting from reappraisals of property due to new construction,
change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in
the "taxing area" based upon their respective "situs." Any such allocation made to a local agency
continues as part of its allocation in future years.
47194378.5
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Beginning in the 1981-82 fiscal year, assessors in the State no longer record property values on
tax rolls at the assessed value of 25%of market value which was expressed as$4 per$100 assessed value.
All taxable property is now shown at full market value on the tax rolls. Consequently, the tax rate is
expressed as $1 per$100 of taxable value. All taxable property value included in this Official Statement
is shown at 100% of market value (unless noted differently) and all tax rates reflect the $1 per $100 of
taxable value.
Article XIIIB of the California Constitution
An initiative to amend the State Constitution entitled"Limitation of Government Appropriations"
was approved on September 6, 1979, thereby adding Article XIIIB to the State Constitution ("Article
XBIB"). Under Article XIIIB,the State and each local governmental entity has an annual"appropriations
limit" and is not permitted to spend certain moneys that are called "appropriations subject to limitation"
(consisting of tax revenues, state subventions and certain other funds) in an amount higher than the
appropriations limit. Article XIBB does not affect the appropriations of moneys that are excluded from
the definition of"appropriations subject to limitation,"including debt service on indebtedness existing or
authorized as of January 1, 1979, or bonded indebtedness subsequently approved by the voters. In
general terms, the appropriations limit is to be based on certain 1978-79 expenditures, and is to be
adjusted annually to reflect changes in consumer prices, populations, and services provided by these
entities. Among other provisions of Article XIIIB, if these entities' revenues in any year exceed the
amounts permitted to be spent,the excess would have to be returned by revising tax rates or fee schedules
over the subsequent two years.
"Appropriations subject to limitation" are authorizations to spend `proceeds of taxes," which
consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory
licenses, user charges or other fees to the extent that such proceeds exceed "the cost reasonably borne by
such entity in providing the regulation, product or service,"but"proceeds of taxes" excludes tax refunds
and some benefit payments such as unemployment insurance. No limit is imposed on appropriations of
funds which are not `proceeds of taxes," such as reasonable user charges or fees, and certain other non-
tax funds.
Not included in the Article XIIIB limit we appropriations for the debt service costs of bonds
existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations
required to comply with mandates of courts or the federal government and appropriations for qualified
capital outlay projects. The appropriations limit may also be exceeded in certain cases of emergency.
The appropriations limit for the District in each year is based on the District's limit for the prior
year, adjusted annually for changes in the cost of living and changes in population, and adjusted, where
applicable, for transfer of financial responsibility of providing services to or from another unit of
government. The change in the cost of living is, at the District's option, either(1)the percentage change
in State per capita personal income, or (2) the percentage change in the local assessment roll on
nonresidential property. Either test is likely to be greater than the change in the cost of living index,
which was used prior to Proposition 111. Change in population is to be measured either within the
jurisdiction of the District or the County as a whole.
As amended by Proposition 111, the appropriations limit is tested over consecutive two-year
periods. Any excess of the aggregate "proceeds of taxes" received by a District over such two-year
period above the combined appropriations limits for those two years is to be returned to taxpayers by
reductions in tax rates or fee schedules over the subsequent two years. As originally enacted in 1979,the
District's appropriations limit was based on 1978-79 authorizations to expend proceeds of taxes and was
adjusted annually to reflect changes in cost of living and population (using different definitions, which
47194378.5
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were modified by Proposition 111). Starting with Fiscal Year 1990-91,the District's appropriations limit
was recalculated by taking the actual Fiscal Year 1986-87 limit, and applying the annual adjustments as if
Proposition 111 had been in effect. The District does not anticipate that any such appropriations
limitations will impair its ability to make Installment Payments as required by the Installment Purchase
Agreement.
Proposition lA and Proposition 22
Proposition lA ("Proposition lA"), proposed by the Legislature in connection with the 2004-05
Budget Act and approved by the voters in November 2004,restricts State authority to reduce major local
tax revenues such as the tax shifts permitted to take place in Fiscal Years 2004-05 and 2005-06.
Proposition IA provides that the State may not reduce any local sales tax rate, limit existing local
government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject
to certain exceptions. Proposition lA generally prohibits the State from shifting to schools or community
colleges any share of property tax revenues allocated to local governments for any fiscal year,as set forth
under the laws in effect as of November 3, 2004. Any change in the allocation of property tax revenues
among local governments within a county most be approved by two-thirds of both houses of the
Legislature.
Proposition IA provides, however, that beginning in Fiscal Year 2008-09, the State may shift to
schools and community colleges up to 8%of local government property tax revenues,which amount must
be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a
severe state financial hardship, the shift is approved by two-thirds of both houses and certain other
conditions are met. Such a shift may not occur more than twice in any ten-year period. The State may
also approve voluntary exchanges of local sales tax and property tax revenues among local governments
within a county.
Proposition IA was generally superseded by the passage of a new initiative constitutional
amendment at the November 2010 election, known as Proposition 22 ("Proposition 22"). The effect of
Proposition 22 is to prohibit the State, even during a period of severe fiscal hardship, from delaying the
distribution of tax revenues for transportation,redevelopment, or local government projects and services.
It prevents the State from redirecting redevelopment agency property tax increment to any other local
government or from temporarily shifting property taxes from cities, counties and special districts to
schools. This is intended to, among other things,stabilize local government revenue sources by restricting
the State's control over local property taxes.
Prior to the passage of Proposition 22, the State invoked Proposition IA to divert $1.935 billion
in local property tax revenues in fiscal year 2009-10 from cities, counties,and special districts to the State
to offset State general fund spending for education and other programs. Approximately$5 million of the
District's property tax revenues were diverted to the State as a result of this Proposition IA suspension.
The District participated in a Proposition IA Securitization Program (the `Program") sponsored by the
California Statewide Communities Development Authority. The Program allowed the District to
exchange its anticipated State property tax receivable for an equal amount of cash. In addition,the State's
adopted 2009-10 budget included a $1.7 billion diversion in local property tax revenues from local
redevelopment agencies. Many California Redevelopment Association members are actively engaged in
litigation to block such diversion and recoup certain payments already made under certain legislation
passed in July 2009 that is beyond the reach of Proposition 22,known as"ABX4 26."
Proposition IA also provides that if the State reduces the vehicle license fee ("VLF") rate
currently in effect, 0.65% of vehicle value, the State most provide local governments with equal
replacement revenues. Further, Proposition lA requires the State to suspend State mandates affecting
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cities, counties and special districts, excepting mandates relating to employee rights, schools or
community colleges, in any year that the State does not fully reimburse local governments for their costs
to comply with such mandates.
Article XIIIC and Article XIIID of the California Constitution
Proposition 218, a State ballot initiative (mown as the "Right to Vote on Taxes Act," was
approved by the voters on November 5, 1996. The initiative added Articles XIIIC and XIIID to the
California Constitution, creating additional requirements for the imposition by most local governments of
"general taxes,""special taxes,""assessments,""fees,"and`charges." Proposition 218 became effective,
pursuant to its terns, as of November 6, 1996, although compliance with some of its provisions was
deferred until July 1, 1997, and certain of its provisions purport to apply to any tax imposed for general
governmental purposes (i.e., "general taxes") imposed, extended or increased on or after January 1, 1995
and prior to November 6, 1996.
Article XIIID imposes substantive and procedural requirements on the imposition, extension or
increase of any"fee" or"charge" subject to its provisions. A"fee" or"charge" subject to Article XIIID
includes any levy, other than an ad valorem tax, special tax or assessment, imposed by an agency upon a
parcel or upon a person as an incident of property ownership. Article XIIID prohibits, among other
things, the imposition of any proposed fee or charge, and, possibly, the increase of any existing fee or
charge, in the event written protests against the proposed fee or charge are presented at a required public
hearing on the fee or charge by a majority of owners of the parcels upon which the fee or charge is to be
imposed. Except for fees and charges for water, sewer and refuse collection services, the approval of a
majority of the property owners subject to the fee or charge,or at the option of the agency,by a two-thirds
vote of the electorate residing in the affected area, is required within 45 days following the public hearing
on any such proposed new or increased fee or charge. The California Supreme Court decisions in
Richmond v. Shasta Community Services District, 32 Cal.4th 409 (2004) ("Richmond"), and Bighorn-
Desert View Water Agency v. Verjil, 39 Cal.4th 205 (2006) ("Bighorn") have clarified some of the
uncertainty surrounding the applicability of Section 6 of Article XIIID to service fees and charges. In
Richmond, the Shasta Community Services District charged a water connection fee, which included a
capacity charge for capital improvements to the water system and a fire suppression charge. The Court
held that both the capacity charge and the fire suppression charge were not subject to Article XIIID
because a water connection fee is not a property-related fee or charge because it results from the properly
owner's voluntary decision to apply for the connection. In both Richmond and Bighorn, however, the
Court stated that a fee for ongoing water service through an existing connection is imposed "as an
incident of property ownership" within the meaning of Article XIIID, rejecting, in Bighorn, the water
agency's argument that consumption-based water charges are not imposed "as an incident of property
ownership"but as a result of the voluntary decisions of customers as to how much water to use.
Article XIIID also provides that"standby charges"are considered"assessments"and must follow
the procedures required for "assessments" under Article XIIID and imposes several procedural
requirements for the imposition of any assessment, which may include (1) various notice requirements,
including the requirement to mail a ballot to owners of the affected property; (2) the substitution of a
property owner ballot procedure for the traditional written protest procedure, and providing that"majority
protest" exists when ballots (weighted according to proportional financial obligation) submitted in
opposition exceed ballots in favor of the assessments; and (3) the requirement that the levying entity
"separate the general benefits from the special benefits conferred on a parcel"of land. Article XIIID also
precludes standby charges for services that are not immediately available to the parcel being charged.
Article XIIID provides that all existing, new or increased assessments are to comply with its
provisions beginning July 1, 1997. Existing assessments imposed on or before November 5, 1996, and
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"imposed exclusively to finance the capital costs or maintenance and operations expenses for [among
other things] water" are exempted from some of the provisions of Article XIIID applicable to
assessments.
Article XIIIC extends the people's initiative power to reduce or repeal existing local taxes,
assessments, fees and charges. This extension of the initiative power is not limited by the terms of Article
XIIIC to fees, taxes, assessment fees and charges imposed after November 6, 1996 and absent other
authority could result in retroactive reduction in any existing taxes, assessments, fees or charges. In
Bighorn, the Court concluded that under Article XIIIC local voters by initiative may reduce a public
agency's water rates and delivery charges. The Court noted, however, that it was not holding that the
authorized initiative power is free of all limitations, stating that it was not determining whether the
electorate's initiative power is subject to the public agency's statutory obligation to set water service
charges at a level that will `pay the operating expenses of the agency, . . . provide for repairs and
depreciation of works,provide a reasonable surplus for improvements,extensions,and enlargements,pay
the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of
such debt as it may become due."
The District implemented a five-year plan beginning in Fiscal Year 2002-03 which included a
rate increase of$7.50 per year, or 9.4%, for all ratepayers to$87.50 per year. In May 2003,the Board of
Directors approved a 15% rate increase per year, for each year, over the then following five years, upon
2/3 vote of the Board of Directors after conducting a noticed public hearing in compliance with Article
XIIID. The Board of Directors considered this increase necessary to provide needed capital
improvements,to cover additional treatment and disinfection costs,and to minimize rate increases over an
extended period of time. On July 2, 2003, the Board of Directors adopted Ordinance No. OCSD-20
increasing sanitary sewer service charges for all single family and multi-family residential units as well as
most commercial and industrial properties. The Ordinance was adopted by a 2/3 vote of the Board of
Directors as required under law after conducting a noticed public hearing in compliance with all laws.
The Ordinance increases the amount of the annual charges by approximately 15%per year for each of the
following five years, commencing with Fiscal Year 2003-04, thereby raising the single family residence
user rate from the then current$87.50 to$100.00, $115.00, $132.00, $152.00, and$175.00 annually. The
Ordinance discounted by 5%the annual increases which were the subject of the required protest hearings
on the fee increase as described above. After the completion of the CIF Validation Study for Fiscal Year
2005-06 that increased its ten year CIP cash flow projects to $2.2 billion, or an average of$220 million
per year, the Board of Directors adopted Ordinance No. OCSD-26 increasing the Fiscal Year 2005-06
single family residential rate 31%,from$115 to$151 for such year. In May 2006,the Board of Directors
adopted Ordinance No. OCSD-30B increasing the Fiscal Year 2006-07 single family residential rate
9.8%, from $151.00 to $165.80 for such year, except those located in Revenue Area 14. These increases
represented the increase permitted under the protest hearings on the fee increase which was held in 2003.
In June 2007, the Board of Directors adopted Ordinance No. OCSD-32 increasing the Fiscal Year 2007-
08 single family residential rate by 9.8%. In February 2008, after a noticed public hearing, the Board of
Directors adopted Ordinance No. OCSD-35, which provides for annual increases in the single family
residential rate of 10.4%, 10.0%, 10.4%, 9.4%and 10.1%,respectively, for Fiscal Years 2008-09 through
2012-13. On March 27, 2013, the Board of Directors adopted Ordinance No. OCSD41 approving
increases in its sanitary sewer service charges for all single family residences, multi-family residential
units, and all non-residential properties. The Board of Directors increased the single family residential
rate, which is the basis for all of the District's sewer service charges, by 4.8% for Fiscal Year 2013-14
and thereafter by an average of 2.4%annually for each Fiscal Year through Fiscal Year 2017-I8.
Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix,prescribe
and collect fees and charges for the services of the Wastewater System which will be at least sufficient to
yield during each Fiscal Year(a)Net Revenues equal to 125%of Debt Service on Senior Obligations for
47194378.5
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such Fiscal Year, and(b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for
such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may
make such classification thereof as it deems necessary, but will not reduce the fees and charges then in
effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be
sufficient to meet the requirements of the Master Agreement. If service charges are determined to be
subject to Article XIIID, and proposed increased service charges cannot be imposed as a result of a
majority protest, such circumstances may adversely affect the ability of the District to generate revenues
in the amounts required by the Master Agreement, and to make Installment Payments as provided in the
Installment Purchase Agreement. No assurance may be given that Articles XIIIC and XIIID will not have
a material adverse impact on Net Revenues.
Other Initiative Measures
Articles XIIIA, XIIIB, XIIIC and XIIID were adopted pursuant to California's constitutional
initiative process. From time to time other initiative measures could be adopted by California voters,
placing additional limitations on the ability of the District to increase revenues.
LEGAL MATTERS
The validity of the Revenue Obligations and certain other legal matters are subject to the
approving opinion of Fulbright & Jaworski LLP, a member of Norton Rose Fulbright, Los Angeles,
California, Special Counsel to the District. A complete copy of the proposed form of Special Counsel
opinion is attached as Appendix F hereto. Special Counsel, in its capacity as Special Counsel to the
District,undertakes no responsibility for the accuracy,completeness or fairness of this Official Statement.
Certain legal matters will be passed on for the District and the Corporation by Woodruff, Spradlin &
Smart, a Professional Corporation, Costa Mesa, California, and for the District by Fulbright & Jaworski
LLP,a member of Norton Rose Fulbright,Disclosure Counsel to the District.
FINANCIAL ADVISOR
The District has retained Public Resources Advisory Group as an independent registered
municipal advisor(the"Financial Advisor")in connection with the execution and delivery of the Revenue
Obligations. The Financial Advisor has not been engaged, nor have they undertaken, to audit,
authenticate or otherwise verify the information set forth in the Official Statement, or any other related
information available to the District, with respect to accuracy and completeness of disclosure of such
information. The Financial Advisor has reviewed this Official Statement but makes no guaranty,
warranty or other representation respecting accuracy and completeness of the information contained in
this Official Statement.
ABSENCE OF LITIGATION
There is no action, suit,proceeding, inquiry or investigation,at law or in equity,before or by any
court, regulatory agency, public board or body, pending or, to the best knowledge of the District,
threatened against the District affecting the existence of the District or the titles of its directors or officers
to their offices or seeking to restrain or to enjoin the sale or delivery of the Revenue Obligations, the
application of the proceeds thereof in accordance with the Trust Agreement, or in any way contesting or
affecting the validity or enforceability of the Revenue Obligations, the Trust Agreement, the Master
Agreement,the Installment Purchase Agreement or any action of the District contemplated by any of said
documents, or in any way contesting the completeness or accuracy of this Official Statement, or
contesting the powers of the District or its authority with respect to the Revenue Obligations or any action
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of the District contemplated by any of said documents, nor, to the knowledge of the District is there any
basis therefor.
There is no action, suit,proceeding, inquiry or investigation,at law or in equity,before or by any
court, regulatory agency, public board or body pending or, to the best knowledge of the District,
threatened against the District contesting or affecting the ability of the District to collect amounts from
which Installment Payments are payable, or which would have a material adverse effect on the District's
ability to make Installment Payments.
FINANCIAL STATEMENTS
The basic financial statements of the District included in Appendix A to this Official Statement
have been audited by McGladrey & Pullen, LLP, independent certified public accountants. See
APPENDIX A—"COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY
SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30, 2014" herein. The District has
received the Government Finance Officers Association Certificate of Achievement for "Excellence in
Financial Reporting" for 20 consecutive years. The audited financial statements, including the footnotes
thereto, should be reviewed in their entirety. McGladrey & Pullen, LLP, the District's independent
auditor, has not been engaged to perform, and has not performed, since the date of its report included in
Appendix A, any procedures on the financial statements addressed in that report. McGladrey & Pullen,
LLP also has not performed any procedures relating to this official statement.
TAX MATTERS
Tax Exemption
The Internal Revenue Code of 1986 (the"Code") imposes certain requirements that must be met
subsequent to the execution and delivery of the Installment Purchase Agreement for the interest
component of each Installment Payment (the "Interest Component"), and the allocable portion thereof
distributable in respect of each Revenue Obligation (each a "Certificate Interest Distribution"), to be and
remain excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for
federal income tax purposes. Noncompliance with such requirements could cause such amounts to be
included in gross income for federal income tax purposes retroactive to the date of delivery of the
Installment Purchase Agreement and the Revenue Obligations. The District has covenanted to maintain
the exclusion of the Interest Components and the Certificate Interest Distributions from the gross income
of the owners thereof for federal income tax purposes.
Upon the execution and delivery of the Installment Purchase Agreement, Fulbright & Jaworski
LLP, Los Angeles, California, Special Counsel, will deliver its opinion that under existing law, and
assuming compliance with the covenants referred to herein, each Interest Component, and each
Certificate Interest Distribution in respect thereof,is excluded pursuant to section 103(a)of the Code from
the gross income of the owner thereof for federal income tax purposes. Further, on that same day Special
Counsel will render its opinion,based solely on the foregoing, and upon existing provisions of the laws of
California, that each Interest Component, and each Certificate Interest Distribution in respect thereof, is
exempt from personal income taxes of the State of California. Special Counsel will render its further
opinion that, under existing statutes, regulations, rulings and court decisions, the Installment Purchase
Agreement will not constitute a "specified private activity bond" within the meaning of section 57(a)(5)
of the Code and, therefore, that neither any Interest Component, nor any Certificate Interest Distribution
in respect thereof, will be treated as an item of tax preference for purposes of computing the alternative
minimum tax imposed by section 55 of the Code. Receipt or accrual of an Interest Component allocable
to, or Certificate Interest Distribution in respect of a Revenue Obligation owned by, a corporation may
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affect the computation of the alternative minimum taxable income of that corporation. A corporation's
alternative minimum taxable income is the basis upon which the alternative minimum tax imposed by
section 55 of the Code is computed.
Pursuant to the Installment Purchase Agreement and in the Tax Certificate Pertaining to
Arbitrage and Other Matters under Sections 103 and 141-150 of the Internal Revenue Code of 1986, to
be delivered by the District in connection with the execution and delivery of the Installment Purchase
Agreement, and the issuance of the Revenue Obligations, the District will make representations relevant
to the determination of, and will make certain covenants regarding or affecting, the exclusion of the
Interest Component of the Installment Payments, and of each Certificate Interest Distribution in respect
thereof, from the gross income of the owners thereof for federal income tax purposes. In reaching its
opinions described above, Special Counsel will assume the accuracy of each such representation and the
present and future compliance by the District with each of its covenants.
Except as stated in this section above, Special Counsel will express no opinion as to any Federal
or state tax consequence of the receipt or accrual of an Interest Component of an Installment Payment, or
of a Certificate Interest Distribution in respect thereof, or of the ownership or disposition of, a Revenue
Obligation. Furthermore, Special Counsel will express no opinion as to any federal, state or local tax law
consequences with respect to the Installment Purchase Agreement or the Revenue Obligations, or of the
Interest Components or Certificate Interest Distributions in respect thereof, if any action is taken with
respect to the Installment Purchase Agreement, or the use or investment of proceeds thereof, the Trust
Agreement or the Revenue Obligations predicated or permitted upon the advice or approval of other
counsel. Special Counsel has not undertaken to advise in the future whether any events after the date of
execution and delivery of the Installment Purchase Agreement may affect the tax status of Interest
Components or Certificate Interest Distributions or the tax consequences of the ownership of a Revenue
Obligation.
Special Counsel's opinion is not a guarantee of a result, but represents its legal judgment based
upon its review of existing statutes, regulations, published rulings and court decisions and the
representations and covenants of the District described above. No ruling has been sought from the
Internal Revenue Service (the "Service') with respect to the matters addressed in the opinion of Special
Counsel, and Special Counsel's opinion is not binding on the Service. The Service has an ongoing
program of auditing the tax-exempt status of the interest on municipal obligations. If an audit of the
Installment Purchase Agreement and Revenue Obligations is commenced, under current procedures the
Service is likely to treat the District as the "taxpayer,"and the owners of the Revenue Obligations would
have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt
status of the Interest Components and Certificate Interest Distributions, the District may have different or
conflicting interests from the owners. Public awareness of any future audit of the Installment Purchase
Agreement and Revenue Obligations could adversely affect the value and liquidity of the Revenue
Obligations during the pendency of the audit,regardless of its ultimate outcome.
Existing law may change to reduce or eliminate the benefit to bondholders of the exclusion of
interest on the Interest Components and Certificate Interest Distributions accrued in respect of Revenue
Obligations from gross income for federal income tax purposes. Any proposed legislation or
administrative action, whether or not taken, could also affect the value and marketability of the Revenue
Obligations. Prospective purchasers of the Revenue Obligations should consult with their own tax
advisors with respect to any proposed or future changes in tax law.
A copy of the proposed form of opinion of Special Counsel relating to the Revenue Obligations is
included in Appendix F.
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Tax Accounting Treatment of Bond Premium and Original Issue Discount
For purposes of the following discussion, each Revenue Obligation should be treated as a debt
instrument, the scheduled payments of principal of and interest on which are the scheduled distributions
of Installment Principal and Installment Interest,respectively, to be allocated to that Revenue Obligation
in accordance with the terms of the Installment Purchase Agreement and Revenue Obligation.
To the extent that a purchaser of a debt instrument acquires that debt instrument at a price that
exceeds the aggregate amount of scheduled interest payments (other than payments of"qualified stated
interest" as defined in section 1.1273-1 of the Treasury Regulations) to be made on that debt instrument
(determined, in the case of a prepayable debt instrument, under the assumption described below) (the
"stated redemption price at maturity" of the instrument), such excess will constitute "bond premium"
under the Code. Section 171 of the Code, and the Treasury Regulations promulgated thereunder,provide
generally that bond premium on a tax-exempt obligation must be amortized on a constant yield,economic
accrual, basis; the amount of premium so amortized will reduce the owner's basis in such obligation for
federal income tax purposes, but such amortized premium will not be deductible for federal income tax
purposes. In the case of a purchase of a Revenue Obligation that is subject to redemption(in whole or in
part)upon a permitted optional prepayment of an Installment Payment,the determination whether there is
amortizable bond premium, and the computation of the accrual of that premium, must be made under the
assumption that the Installment Payment will be prepaid on the permitted date that would minimize the
yield on the Revenue Obligation (or that the Revenue Obligation will not be prepaid prior to the stated
maturity date in respect of that Revenue Obligation if that would minimize the purchaser's yield). The
rate and timing of the amortization of the bond premium and the corresponding basis reduction may result
in an owner realizing a taxable gain when a Revenue Obligation owned by such owner is sold or disposed
of for an amount equal to or in some circumstances even less than the original cost of the Revenue
Obligation to the owner.
The excess,if any, of the stated redemption price at maturity of a Revenue Obligation of a stated
maturity over the initial offering price to the public of the Revenue Obligations of that stated maturity set
forth on the inside cover page of this Official Statement is `original issue discount." Original issue
discount accruing in respect of a Revenue Obligation is treated for federal income tax and California
personal income tax purposes as additional interest in respect of that debt instrument and is excluded from
the gross income of the owner thereof for federal income tax purposes and exempt from the California
personal income tax to the same extent as would be stated interest on that debt instrument. Original issue
discount accruing in respect of any Revenue Obligation purchased at its initial offering price and pursuant
to such initial offering will accrue on a semiannual basis over the tern to the stated maturity date in
respect of the Revenue Obligation on the basis of a constant yield method and, within each semiannual
period, will accrue on a ratable daily basis. The amount of original issue discount in respect of such a
Revenue Obligation accruing during each period is added to the adjusted basis of such Revenue
Obligation to determine taxable gain upon disposition (including upon sale, prepayment or payment on
maturity) of such Revenue Obligation. The Code includes certain provisions relating to the accrual of
original issue discount in the case of a purchaser of a Revenue Obligation who purchases that Revenue
Obligation other than at the initial offering price and pursuant to the initial offering of that Revenue
Obligation.
Any person considering purchasing a Revenue Obligation at a price that includes bond premium
should consult his or her own tax advisors with respect to the amortization and treatment of such bond
premium, including, but not limited to, the calculation of gain or loss upon the sale, prepayment or other
disposition of the Revenue Obligation. Any person considering purchasing a Revenue Obligation of a
maturity in respect of which there is original issue discount should consult his or her own tax advisors
with respect to the tax consequences of ownership of such Revenue Obligation,including the treatment of
47194378.5
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a purchaser who does not purchase in the original offering and at the original offering price of that
Revenue Obligation, the allowance of a deduction for any loss on a sale or other disposition, and the
treatment of seemed original issue discount in respect of such Revenue Obligation under federal
individual and corporate alternative minimum taxes.
Other Tax Consequences
Although each Interest Component, and each Certificate Interest Distribution in respect thereof,
may be excluded pursuant to section 103(a) of the Code from the gross income of the owner thereof for
federal income tax purposes, an owner's federal, state or local tax liability may be otherwise affected by
the ownership or disposition of the Revenue Obligations. The nature and extent of these other tax
consequences will depend upon the owner's other items of income or deduction. Without limiting the
generality of the foregoing, prospective purchasers of the Revenue Obligations should be aware that (i)
section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase
or carry the Revenue Obligations and the Code contains additional limitations on interest deductions
applicable to financial institutions that own tax-exempt obligations(such as the Revenue Obligations),(ii)
with respect to insurance companies subject to the tax imposed by section 831 of the Code, section
832(b)(5)(B)(i) reduces the deduction for loss reserves by 15% of the sum of certain items, including
Interest Component and Certificate Interest Distributions in respect of the Revenue Obligations, (iii)
Interest Component and Certificate Interest Distributions accrued in respect of Revenue Obligations
owned by certain foreign corporations doing business in the United States could be subject to a branch
profits tax imposed by section 884 of the Code, (iv) passive investment income, including Interest
Component and Certificate Interest Distributions seemed in respect of Revenue Obligations, may be
subject to federal income taxation under section 1375 of the Code for Subchapter S corporations that have
Subchapter C earnings and profits at the close of the taxable year if greater than 25%of the gross receipts
of such Subchapter S corporation is passive investment income, (v) section 86 of the Code requires
recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in
determining the taxability, of such benefits, Interest Distributions and Certificate Interest Distributions
seemed in respect of Revenue Obligations owned by such recipients for federal income tax purposes,and
(vi) under section 32(i) of the Code, receipt of investment income, including Interest Components and
Certificate Interest Distributions seemed in respect of Revenue Obligations, may disqualify the recipient
thereof from obtaining the earned income credit. Special Counsel has expressed no opinion regarding any
such other tax consequences.
VERIFICATION OF MATHEMATICAL COMPUTATIONS
Grant Thornton LLP, a firm of independent arbitrage consultants, will verify the accuracy of
(i)mathematical computations concerning the adequacy of the maturing principal amounts of and interest
earned on the Federal Securities deposited in the Escrow Fond, together with amounts held as cash
therein, to provide for payment of the redemption prices (including seemed interest) of the Refunded
Certificates on the Redemption Date and (ii)certain mathematical computations supporting the
conclusion that the Revenue Obligations are not"arbitrage bonds"under the Code,which will be used in
part by Special Counsel in concluding that interest on the Interest Components and Certificate Interest
Distributions accrued in respect of Revenue Obligations is excluded from gross income for federal
income tax purposes under present laws, including applicable provisions of the Code, existing court
rulings,regulations and Internal Revenue Service rulings.
The report of such independent arbitrage consultants will include the statement that the scope of
their engagement was limited to verifying the mathematical accuracy of the computations contained in
such schedules provided to them and that they have no obligation to update their report because of events
occurring,or data or information coming to their attention, subsequent to the date of their report.
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CONTINUING DISCLOSURE
The District has covenanted for the benefit of holders and beneficial owners of the Revenue
Obligations (a)to provide certain financial information and operating data(the"Annual Report")relating
to the District and the property in the District not later than eight months after the end of the District's
Fiscal Year (which currently would be March 1), commencing with the report for the 2013-14 Fiscal
Year, and(b)to provide notices of the occurrence of certain enumerated events. The Annual Report will
be filed by the Trustee on behalf of the District, with the Municipal Securities Rulemaking Board. The
notices of enumerated events will be filed by the Trustee on behalf of the District with the Municipal
Securities Rulemaking Bond. The specific nature of the information to be contained in the Annual
Report or the notices of enumerated events is set Forth in the Continuing Disclosure Agreement See
APPENDIX D— "FORM OF CONTINUING DISCLOSURE AGREEMENT." These covenants have
been made in order to assist the Initial Purchaser in complying with S.E.C. Rule 15c2-12 (the"Rule"). In
2010, the District failed to file certain notices of enumerated events relating to upgrades in the ratings of
certain of the District's then outstanding obligations. The District has since filed such enumerated event
notices in connection with the rating upgrades on its obligations. Except as described in the preceding
two sentences, during the past five years, the District has never failed to comply in all material respects
with any previous undertaking with respect to the Rule to provide annual reports or notices of enumerated
events.
RATINGS
The Revenue Obligations will be rated " " by Standard & Poor's Financial Services LLC
("S&P")and—by Fitch Ratings("Fitch"). Such ratings reflect only the views of the rating agencies,
and do not constitute a recommendation to buy, sell or hold the Revenue Obligations. Explanation of the
significance of such ratings may be obtained only from the respective organizations at: Standard &
Poor's Ratings Services, 55 Water Street, New York, New York 10041 and Fitch Ratings, One State
Street Plaza,New York,New York 10004. There is no assurance that any such ratings will continue for
any given period of time or that they will not be revised downward or withdrawn entirely by the
respective rating agencies, if in the judgment of any such rating agency circumstances so warrant. Any
such downward revision or withdrawal of such ratings may have an adverse effect on the market price of
the Revenue Obligations.
PURCHASE AND REOFFERING
(the "Initial Purchaser") has purchased the Revenue Obligations from the
District at a competitive sale for a purchase price of$ (representing the aggregate principal
amount of the Revenue Obligations, plus a premium of $ , and less an Initial Purchaser's
discount of$ ). The public offering prices may be changed from time to time by the Initial
Purchaser. The Initial Purchaser may offer and sell Revenue Obligations to certain dealers and others at
prices lower than the offering prices shown on the inside cover page hereof.
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MISCELLANEOUS
Included herein are brief summaries of certain documents and reports, which summaries do not
purport to be complete or definitive, and reference is made to such documents and reports for full and
complete statements of the contents thereof Any statements in this Official Statement involving matters
of opinion, whether or not expressly so stated, are intended as such and not as representations of fact.
This Official Statement is not to be construed as a contract or agreement between the District and the
purchasers or Owners of any of the Revenue Obligations.
The execution and delivery of this Official Statement has been duly authorized by the District.
ORANGE COUNTY SANITATION DISTRICT
By:
Chair of the Board of Directors
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APPENDIX A
COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY
SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30,2014
47194378.5
A-1
APPENDIX B
THE COUNTY OF ORANGE-ECONOMIC AND DEMOGRAPHIC INFORMATION
47194378.5
APPENDIX C
SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
47194378.5
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APPENDIX D
FORM OF CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement'),dated as
of February 1, 2015, is by and between the ORANGE COUNTY SANITATION DISTRICT, a county
sanitation district organized and existing under the laws of the State of California (the "District"), and
DIGITAL ASSURANCE CERTIFICATION LLC,as Dissemination Agent(the"Dissemination Agent').
WITNESSETH:
WHEREAS, the District has caused to be executed and delivered the Orange County Sanitation
District Wastewater Refunding Revenue Obligations, Series 2015A (the `Revenue Obligations"),
evidencing principal in the aggregate amount of$ ,pursuant to a Trust Agreement,dated as
of the date hereof(the"Trust Agreement'),by and among U.S. Bank National Association, as trustee(the
"Trustee"), the Orange County Sanitation District Financing Corporation (the "Corporation") and the
District;and
WHEREAS, this Disclosure Agreement is being executed and delivered by the District and the
Dissemination Agent for the benefit of the owners and beneficial owners of the Revenue Obligations and
in order to assist the purchaser of the Revenue Obligations in complying with the Rule (as defined
herein);
NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein
contained,the parties hereto agree as follows:
Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings
ascribed thereto in the Trust Agreement or, if not defined therein, in the Master Agreement, dated as of
August 1, 2000, by and between the District and the Corporation. In addition, the following capitalized
terms shall have the following meanings:
"Annual Report" means any Annual Report provided by the District pursuant to, and as
described in, Sections 2 and 3 hereof.
"Annual Report Date" means the date in each year that is eight months after the end of the
Fiscal Year,which date,as of the date of this Disclosure Agreement, is March 1.
"Disclosure Representative" means the Director of Finance and Administrative Services of the
District, or such other officer or employee of the District as the District shall designate in writing to the
Dissemination Agent and the Trustee from time to time.
"Dissemination Agent" means an entity selected and retained by the District, or any successor
thereto selected by the District The initial Dissemination Agent shall be Digital Assurance Certification
LLC.
"EMMA" shall mean Electronic Municipal Market Access system, maintained on the internet at
htto://emma.msrb.ore by the MSRB.
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"Fiscal Year" shall mean the period beginning on July 1 of each year and ending on the next
succeeding June 30, or any twelve-month or fifty-two week period hereafter selected by the District,with
notice of such selection or change in fiscal year to be provided as set forth herein.
"Listed Events" means any of the events listed in Section 4 hereof and any other event legally
required to be reported pursuant to the Rule.
"MSRB" means the Municipal Securities Rulemaking Board established pursuant to
Section 1513(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or authorized by
the SEC to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the SEC,
filings with the MSRB are to be made through EMMA.
"Official Statement" means the Official Statement, dated , 2015, relating to the
Revenue Obligations.
"Participating Underwriter"means any of the original purchaser(s) of the Revenue Obligations
required to comply with the Rule in connection with the offering of the Revenue Obligations.
"Repository"means,until otherwise designated by the SEC,EMMA.
"Rule" means Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as
the same has been or may be amended from time to time.
"SEC" shall mean the United States Securities and Exchange Commission.
Section 2. Provision of Annual Reports.
(a) The District shall provide, or shall cause the Dissemination Agent to provide, to MSRB,
through EMMA, not later than 15 days prior to the Annual Report Date, an Annual Report which is
consistent with the requirements of Section 3 of this Disclosure Agreement. The Annual Report must be
submitted in electronic format, accompanied by such identifying information as provided by the MSRB.
The Annual Report may be submitted as a single document or as separate documents comprising a
package, and may include by reference other information as provided in Section 3 of this Disclosure
Agreement. Not later than 15 Business Days prior to such date, the District shall provide the Annual
Report to the Dissemination Agent. If the Fiscal Year changes for the District, the District shall give
notice of such change in the manner provided under Section 4(e)hereof.
(b) If by 15 Business Days prior to the date specified in subsection(a) for providing the
Annual Report to the MSRB, through EMMA, the Dissemination Agent has not received a copy of the
Annual Report the Dissemination Agent shall contact the District to determine if the District is in
compliance with subsection(a). The District shall provide a written certification with each Annual
Report famished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual
Report required to be famished by it hereunder. The Dissemination Agent may conclusively rely upon
such certification of the District and shall have no duty or obligation to review such Annual Report.
(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided
to the MSRB by the date required in subsection(a), the Dissemination Agent shall send a notice to the
MSRB in substantially the form attached as Exhibit A.
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(d) The Dissemination Agent shall:
(1) determine the electronic filing address of, and then-current procedures for
submitting Annual Reports to, the MSRB each year prior to the date for providing the Annual
Report; and
(ii) (if the Dissemination Agent is other than the Trustee), to the extent appropriate
information is available to it,file a report with the Authority certifying that the Annual Report has
been provided pursuant to this Disclosure Agreement, stating the date it was provided.
Section 3. Content of Annual Reports. The District's Annual Report shall contain or
incorporate by reference the following:
(a) Audited financial statements prepared in accordance with generally accepted accounting
principles as promulgated to apply to governmental entities from time to time by the Governmental
Accounting Standards Board. If the District's audited financial statements are not available by the
Annual Report Date,the Annual Report shall contain unaudited financial statements in a format similar to
the financial statements contained in the Official Statement, and the audited financial statements shall be
filed in the same manner as the Annual Report when they become available.
(b) The principal evidenced by the Revenue Obligations Outstanding as of the June 30 next
preceding the Annual Report Date and the principal amount of other Senior Obligations outstanding as of
the June 30 next preceding the Annual Report Date.
(c) Updated information (not to include projections), for the Fiscal Year ended the June 30
next preceding the Annual Report Date, comparable to the information contained in the Official
Statement in Table Nos. 2,4, 6 (only with respect to information on 6 under the headings Fiscal Year and
Sewer Service Charge), 8,9, 10, 11, 12, 13, 14 and 16.
(d) In addition to any of the information expressly required to be provided under subsections
(a), (b) and (c) of this Section, the District shall provide such further information, if any, as may be
necessary to make the specifically required statements, in the light of the circumstances under which they
are made,not misleading.
Any or all of the items listed above may be included by specific reference to other documents,
including official statements of debt issues with respect to which the District is an"obligated person" (as
defined by the Rule), which are available to the public on EMMA or filed with the SEC. The District
shall clearly identify each such document to be included by reference.
Section 4. Reportine of Sienificant Events.
(a) Pursuant to the provisions of this Section 4, the District shall give, or cause to be given,
notice of the occurrence of any of the following events with respect to the Revenue Obligations, in a
timely manner not more than ten(10)Business Days after the event:
(1) principal and interest payment delinquencies;
(2) defeasances;
(3) tender offers;
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(4) rating changes;
(5) adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the tax- status of
the Revenue Obligations;
(6) unscheduled draws on the debt service reserves reflecting financial
difficulties;
(7) unscheduled draws on credit enhancements reflecting financial
difficulties;
(8) substitution of credit or liquidity providers or their failure to perform; or
(9) bankruptcy,insolvency,receivership or similar proceedings.
For these purposes,any event described in the immediately preceding paragraph(9)is considered to occur
when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the
District in a proceeding under the United States Bankruptcy Code or in any other proceeding under state
or federal law in which a court or governmental authority has assumed jurisdiction over substantially all
of the assets or business of the District, or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject to the supervision and orders of a court
or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or
liquidation by a court or governmental authority having supervision or jurisdiction over substantially all
of the assets or business of the District.
(b) Pursuant to the provisions of this Section 4, the District shall give, or cause to be given,
notice of the occurrence of any of the following events with respect to the Revenue Obligations, if
material:
(1) mergers, consolidations,acquisitions,the sale of all or substantially all of
the assets of the obligated persons or their termination;
(2) appointment of a successor or additional Trustee or the change of the
time of a Trustee;
(3) nonpayment related defaults;
(4) modifications to the rights of Owners;
(5) a notices of prepayment; or
(6) release, substitution or sale of property securing repayment of the
Revenue Obligations.
(c) Whenever the District obtains knowledge of the occurrence of a Listed Event, described
in subsection(b)of this Section 4,the District shall as soon as possible determine if such event would be
material under applicable federal securities law.
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(d) If the District determines that knowledge of the occurrence of a Listed Event described in
subsection(b) of this Section 4 would be material under applicable federal securities law, the District
shall promptly notify the Dissemination Agent in writing and instruct the Dissemination Agent to report
the occurrence to the Repository in a timely manner not more than ten(10)Business Days after the event.
(e) If the Dissemination Agent has been instructed by the District to report the occurrence of
a Listed Event,the Dissemination Agent shall file a notice of such occurrence with the MSRB.
Section 5. Filines with the MSRB. All information, operating data, financial statements,
notices and other documents provided to the MSRB in accordance with this Disclosure Agreement shall
be provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying
information as prescribed by the MSRB.
Section 6. Termination of Reporting Obligation. The District's obligations under this
Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of
all of the Revenue Obligations. If such termination occurs prior to the final maturity of the Revenue
Obligations, the District shall give notice of such termination in the same manner as for a Listed Event
under Section 4 hereof.
Section 7. Dissemination Agent. The District may, from time to time, appoint or engage
another Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement,
and may discharge any such Dissemination Agent,with or without appointing a successor Dissemination
Agent If at any time there is not any other designated Dissemination Agent, the Trustee, if the Trustee
agrees to act, shall be the Dissemination Agent; provided it shall receive written notice of such
designation at the time of such designation. Notwithstanding any other provision to this Disclosure
Agreement to the contrary,the District may provide any Annual Report to Beneficial Owners by means of
posting such Annual Report on an internet site that provides open access to Beneficial Owners.
Section 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the District may amend this Disclosure Agreement, provided no amendment increasing or
affecting the obligations or duties of the Dissemination Agent shall be made without the consent of such
party, and any provision of this Disclosure Agreement may be waived if such amendment or waiver is
supported by an opinion of counsel expert in federal securities laws acceptable to the District and the
Dissemination Agent to the effect that such amendment or waiver would not, in and of itself, cause the
undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof
but taking into account any subsequent change in or official interpretation of the Rule.
Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed
to prevent the District from disseminating any other information, using the means of dissemination set
forth in this Disclosure Agreement or any other means of communication, or including any other
information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is
required by this Disclosure Agreement. If the District chooses to include any information in any Annual
Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this
Disclosure Agreement, the District shall have no obligation under this Disclosure Agreement to update
such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the District or the Dissemination Agent to
comply with any provision of this Disclosure Agreement, the Trustee, at the written direction of any
Participating Underwriter or the holders of at least 25% of the aggregate amount of principal evidenced
by Outstanding Revenue Obligations and upon being indemnified to its reasonable satisfaction, shall, or
any holder or beneficial owner of the Revenue Obligations may, take such actions as may be necessary
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and appropriate, including seeking mandate or specific performance by court order, to cause the District,
Trustee or the Dissemination Agent, as the case may be, to comply with its obligations under this
Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of
Default under the Trust Agreement, and the sole remedy under this Disclosure Agreement in the event of
any failure of the District, the Trustee or the Dissemination Agent to comply with this Disclosure
Agreement shall be an action to compel performance.
Section 11. Duties. Immunities and Liabilities of Trustee and Dissemination Agent.
Article VIII of the Trust Agreement is hereby made applicable to this Disclosure Agreement as if this
Disclosure Agreement were (solely for this purpose) contained in the Trust Agreement. Neither the
Trustee nor the Dissemination Agent shall be responsible for the Form or content of any Annual Report or
notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services
provided under this Disclosure Agreement. The Dissemination Agent (if other than the Trustee or the
Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in
this Disclosure Agreement, and the District agrees to indemnify and save the Dissemination Agent, its
officers, directors, employees and agents,harmless against any loss, expense and liabilities which it may
incur arising out of or in the exercise or performance of its powers and duties hereunder, including the
costs and expenses (including attorney's fees) of defending against any claim of liability, but excluding
liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the
District under this Section shall survive resignation or removal of the Dissemination Agent and payment
of the Revenue Obligations.
Section 12. Beneficiaries. This Disclosure Agreement shall more solely to the benefit of the
District, the Trustee, the Dissemination Agent, the Participating Underwriter and holders and beneficial
owners from time to time of the Revenue Obligations, and shall create no rights in any other person or
entity.
Section 13. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
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IN WITNESS WHEREOF,the parties hereto have executed this Disclosure Agreement as of the
date first above written.
ORANGE COUNTY SANITATION DISTRICT
By:
Lorenzo Tyner
Director of Finance and Administrative Services
DIGITAL ASSURANCE CERTIFICATION LLC,
as Dissemination Agent
By:
Authorized Representative
Acknowledged and Accepted:
U.S.BANK NATIONAL ASSOCIATION,
as Trustee
By:
Authorized Officer
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EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE
TO FILE ANNUAL REPORT
Name of Obligor: Orange County Sanitation District
Name of Issue: Orange County Sanitation District
Wastewater Refunding Revenue Obligations, Series 2015A
Date of Execution and Delivery: ,2015
NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District')has not
provided an Annual Report with respect to the above-captioned Revenue Obligations as required by
Section 6.09 of the Trust Agreement, dated as of February 1, 2015, by and among U.S. Bank National
Association, as Trustee, the Orange County Sanitation District Financing Corporation and the District.
[The District anticipates that the Annual Report will be filed by .]
Dated: 20_ ORANGE COUNTY SANITATION DISTRICT
By
Title:
cc: Trustee
Dissemination Agent
47194308.5
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APPENDIX E
BOOK-ENTRY SYSTEM
The description that follows of the procedures and recordkeeping with respect to beneficial
ownership interests in the Revenue Obligations, payment of principal and interest evidenced by the
Revenue Obligations to Participants or Beneficial Owners, confirmation and transfer of beneficial
ownership interests in the Revenue Obligations, and other Revenue Obligation-related transactions by
and between DTC, Participants and Beneficial Owners, is based on information furnished by DTC which
the District and the Corporation each believes to be reliable, but the District and the Corporation take no
responsibility for the completeness or accuracy thereof.
The Depository Trust Company—Book-Entry System
The Depository Trust Company("DTC"),New York,NY,will act as securities depository for the
securities (the "Revenue Obligations"). The Revenue Obligations will be issued as fully-registered
securities registered in the name of Cede& Co. (DTC's partnership nominee)or such other name as may
be requested by an authorized representative of DTC. One fully-registered certificate will be issued for
the Revenue Obligations in the aggregate principal amount of such issue, and will be deposited with
DTC.
DTC is a limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million U.S. and non-U.S.
equity issues, corporate and municipal debt issues, and money market instruments (from over 100
countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the
post-trade settlement among Direct Participants of sales and other securities transactions in deposited
securities,through electronic computerized book-entry transfers and pledges between Direct Participants'
accounts. This eliminates the need for physical movement of securities certificates. Direct Participants
include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing
corporations,and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust
& Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities
Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing
agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also
available to others such as both U.S. and non-U.S. securities brokers and dealers,banks, trust companies,
and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly(`Indirect Participants"). DTC has a Standard&Poor's rating of"AA+." The
DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More
information about DTC can be found at www.dtcc.com. The information on such website is not
incorporated herein by such reference or otherwise.
Purchases of Revenue Obligations under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Revenue Obligations on DTC's records. The ownership
interest of each actual purchaser of each Revenue Obligation (Beneficial Owner") is in tam to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written
confirmations providing details of the transaction, as well as periodic statements of their holdings, from
the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Revenue Obligations are to be accomplished by entries made on
47194378.5
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the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in the Revenue Obligations, except in
the event that use of the book-entry system for the Revenue Obligations is discontinued.
To facilitate subsequent transfers, all Revenue Obligations deposited by Direct Participants with
DTC are registered in the time of DTC's partnership nominee,Cede&Co. or such other name as may be
requested by an authorized representative of DTC. The deposit of Revenue Obligations with DTC and
their registration in the time of Cede&Co. or such other nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the Revenue Obligations; DTC's
records reflect only the identity of the Direct Participants to whose accounts such Revenue Obligations
are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will
remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Beneficial Owners of Revenue Obligations may wish
to take certain steps to augment transmission to them of notices of significant events with respect to the
Revenue Obligations, such as prepayments, tenders, defaults, and proposed amendments to the security
documents. For example, Beneficial Owners of Revenue Obligations may wish to ascertain that the
nominee holding the Revenue Obligations for their benefit has agreed to obtain and transmit notices to
Beneficial Owners, in the alternative, Beneficial Owners may wish to provide their names and addresses
to the registrar and request that copies of the notices be provided directly to them.
Prepayment notices shall be sent to DTC. If less than all of the Revenue Obligations within an
issue are being prepaid, DTC's practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be prepaid.
Neither DTC nor Cede &Co. (nor such other DTC nominee)will consent or vote with respect to
the Revenue Obligations unless authorized by a Direct Participant in accordance with DTC's MMI
Procedures. Under its usual procedures,DTC mails an Omnibus Proxy to the District as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the Revenue Obligations are credited on the record date(identified
in a listing attached to the Omnibus Proxy).
Prepayments with respect to the Revenue Obligations will be made to Cede & Co., or such other
nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct
Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the
District or the Trustee on payable date in accordance with their respective holdings shown on DTC's
records. Payments by Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant and not of DTC, nor its
nominee, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of prepayment proceeds,distributions, and dividend payments to Cede
& Co. (or such other nominee as may be requested by an authorized representative of DTC) is the
responsibility of the District or the Trustee, disbursement of such payments to Direct Participants will be
the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
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DTC may discontinue providing its services w securities depository with respect to the Revenue
Obligations at any time by giving reasonable notice to the District or the Trustee. Under such
circumstances, in the event that a successor securities depository is not obtained,Revenue Obligations are
required to be printed and delivered.
The District may decide to discontinue use of the system of book-entry-only transfers through
DTC (or a successor securities depository). In that event, Revenue Obligations will be printed and
delivered to DTC.
The information in this section concerning DTC and DTC's book-entry system has been obtained
from sources that the District believes to be reliable, but the District takes no responsibility for the
accuracy thereof.
Discontinuance of DTC Services
In the event (i)DTC determines not to continue to act as securities depository for the Revenue
Obligations, (ii)DTC shall no longer act and give notice to the Trustee of such determination or(iii)the
District determines that it is in the best interest of the Beneficial Owners that they be able to obtain
Revenue Obligations and delivers a written certificate to the Trustee to that effect, DTC services will be
discontinued. If the District determines to replace DTC with another qualified securities depository, the
District shall prepare or direct the preparation of a new single, separate, fully registered Revenue
Obligation for each of the maturities of the Revenue Obligations,registered in the name of such successor
or substitute qualified securities depository or its nominee. If the District fails to identify another
qualified securities depository to replace DTC then the Revenue Obligations shall no longer be restricted
to being registered in the certificate registration books in the time of Cede&Co.,but shall be registered
in such names as are requested in a certificate of the District, in accordance with the Trust Agreement.
All Revenue Obligations may be presented for transfer by the Owner thereof, in person or by his
attorney duly authorized in writing,at the Principal Office of the Trustee,on the books required to be kept
by the Trustee pursuant to the provisions of the Trust Agreement, upon surrender of such Certifications
for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form
acceptable to the Trustee. The Tmstee may treat the Owner of any Revenue Obligation as the absolute
owner of such Revenue Obligation for all purposes, whether or not such Revenue Obligation shall be
overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary;and payment of
the interest and principal evidenced by such Revenue Obligation shall be made only to such Owner,
which payments shall be valid and effectual to satisfy and discharge the liability evidenced by such
Revenue Obligation to the extent of the sum or sums so paid.
Whenever any Revenue Obligations shall be surrendered for transfer, the Trustee shall execute
and deliver new Revenue Obligations representing the same principal amount in Authorized
Denominations. The Trustee shall require the payment of any Owner requesting such transfer of any tax
or other governmental charge required to be paid with respect to such transfer. Revenue Obligations may
be presented for exchange at the Principal Office of the Trustee for a like aggregate principal meant of
Revenue Obligations of other Authorized Denominations. The Trustee shall require the payment by the
Owner requesting such exchange of any tax or other governmental charge required to be paid with respect
to such exchange. The Trustee shall not be required to transfer or exchange any Revenue Obligation
during the period in which the Trustee is selecting Revenue Obligations for prepayment, nor shall the
Trustee be required to transfer or exchange any Revenue Obligation or portion thereof selected for
prepayment from and after the date of mailing the notice of prepayment thereof.
47194378.5
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APPENDIX F
FORM OF APPROVING OPINION OF SPECIAL COUNSEL
Upon the execution and delivery of the Revenue Obligations, Fulbright& Jaworski LLP, a
member of Norton Rose Fulbright, Los Angeles, California, Special Counsel to the District, will render its
final approving opinion with respect to the Revenue Obligations in substantially the following form:
[Date of Delivery]
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley,California 92708-7018
Orange County Sanitation District
Wastewater Refunding Revenue Obligations
Series 2015A
Ladies and Gentlemen:
We have acted as Special Counsel in connection with the $ aggregate principal
amount of Orange County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A
(the "Revenue Obligations") which are certificates of participation that evidence direct, fractional
undivided interests of the Owners thereof in the installment payments (the "Installment Payments"), and
the interest thereon, to be made by the Orange County Sanitation District (the"District') pursuant to the
Installment Purchase Agreement, dated as of February 1, 2015 (the "Installment Purchase Agreement"),
by and between the District and the Orange County Sanitation District Financing Corporation (the
"Corporation"). Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000
(the "Master Agreement"), by and between the District and the Corporation, the District has established
conditions and terns upon which obligations such as the Installment Payments, and the interest thereon,
will be incurred and secured. Installment Payments under the Installment Purchase Agreement are
payable solely from Net Revenues as provided in the Installment Purchase Agreement, consisting
primarily of all income and revenue received by the District from the operation or ownership of the
Wastewater System of the District (the "Wastewater System") remaining after payment of Maintenance
and Operation Costs. Capitalized terns used and not otherwise defined herein shall have the meanings
ascribed to such terns in the Installment Purchase Agreement.
The Revenue Obligations are to be executed and delivered pursuant to a Trust Agreement, dated
as of February 1, 2015 (the "Trust Agreement"), by and among the District, the Corporation and U.S.
Bank National Association,as trustee(the"Trustee"). Proceeds from the sale of the Revenue Obligations
will be used to (i)purchase and retire all of the District's outstanding Certificates of Participation, Series
2007B and (it)pay the costs incurred in connection with the execution and delivery of the Revenue
Obligations.
47194378.5
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As Special Counsel,we have examined copies certified to us as being true and complete copies of
the Master Agreement, the Trust Agreement and the Installment Purchase Agreement and the proceedings
of the District in connection with the execution and delivery of the Revenue Obligations. We have also
examined such certificates of officers of the District, the Corporation and others as we have considered
necessary for the purposes of this opinion.
Based upon the foregoing,we are of the opinion that:
I. The Master Agreement, the Installment Purchase Agreement and the Trust
Agreement each has been duly and validly authorized,executed and delivered by the District and,
assuming the Master Agreement, the Installment Purchase Agreement and the Trust Agreement
each constitutes the legally valid and binding obligation of the other parties thereto, each
constitutes the legally valid and binding obligation of the District, enforceable against the District
in accordance with its respective terms.
2. The obligation of the District to pay the Installment Payments, and the interest
thereon, and other payments required to be made by it under the Installment Purchase Agreement
is a special obligation of the District payable, in the manner provided in the Installment Purchase
Agreement, solely from Net Revenues and other funds provided for in the Installment Purchase
Agreement lawfully available therefor.
3. Assuming due authorization, execution and delivery of the Trust Agreement and
the Revenue Obligations by the Trustee, the Revenue Obligations me entitled to the benefits of
the Trust Agreement.
4. Under existing statutes, regulations, rulings and court decisions, and, assuming
compliance with the covenants mentioned below, the component of each Installment Payment
designated as "Interest on Installment Payment" in Section 3.02 of the Installment Purchase
Agreement (each, an "Interest Component"), and the allocable portion thereof distributable in
respect of any Revenue Obligation (the"Certificate Interest Distribution"), is excluded pursuant
to section 103(a)of the Internal Revenue Code of 1986(the"Code")from the gross income of the
owners thereof for federal income tax purposes. We are further of the opinion that under existing
statutes, regulations, rulings and court decisions, the Installment Purchase Agreement is not a
"specified private activity bond" within the meaning of section 57(a)(5) of the Code and,
therefore, that the Interest Components and the Certificate Interest Distributions will not be
treated as items of tax preference for purposes of computing the alternative minimum tax imposed
by section 55 of the Code.Receipt or accrual of an Interest Component allocable to,or Certificate
Interest Distribution in respect of a Revenue Obligation owned by, a corporation may affect the
computation of the alternative minimum taxable income of that corporation. A corporation's
alternative minimum taxable income is the basis upon which the alternative minimum tax
imposed by section 55 of the Code is computed. We me further of the opinion that under existing
laws of the State of California the Interest Component allocable to and the Certificate Interest
Distributions in respect of a Revenue Obligation are exempt from personal income taxes of the
State of California under present state law.
Pursuant to the Installment Purchase Agreement and in the Tax Certificate Pertaining to
Arbitrage and Other Matters under Sections 103 and 141-150 of the Internal Revenue Code of
1986,to be delivered by the District in connection with the execution and delivery of the Revenue
Obligations, the District has made representations relevant to the determination of, and has
undertaken certain covenants regarding or affecting,the exclusion of the Interest Component,and
the Certificate Interest Distribution, from the gross income of the owners thereof for federal
47194378.5
F-2
income tax purposes. In reaching the opinions described in the immediately preceding paragraph,
we have assumed the accuracy of such representations and the present and future compliance by
the District with its covenants.
Except as stated in the second preceding paragraph, we express no opinion as to any
federal or state tax consequence of the ownership or disposition of the Installment Purchase
Agreement or the Revenue Obligations. Furthermore, we express no opinion as to any federal,
state or local tax law consequence with respect to the Installment Purchase Agreement or the
Revenue Obligations,or of the Interest Components or Certificate Interest Distributions in respect
thereof, if any action is taken with respect to the Installment Purchase Agreement, or the use or
investment of the proceeds thereof, the Master Agreement, the Trust Agreement, the Revenue
Obligations permitted or predicated upon the advice or approval of other counsel.
The rights of the owners of the Revenue Obligations and the enforceability of the Revenue
Obligations,the Master Agreement,the Trust Agreement and the Installment Purchase Agreement may be
subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in
appropriate cases. The enforceability of the Revenue Obligations, the Master Agreement, the Trust
Agreement and the Installment Purchase Agreement is subject to the effect of general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, to the
possible unavailability of specific performance or injunctive relief,regardless of whether considered in a
proceeding in equity or at law, and to the limitations on legal remedies against governmental entities in
California.
No opinion is expressed herein on the accuracy, completeness or fairness of the Official
Statement or other offering material relating to the Revenue Obligations.
Our opinions are based on existing law, which is subject to change. Such opinions are further
based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our
opinions to reflect any facts or circumstances that may hereafter come to our attention or to reflect any
changes in any law that may hereafter occur or become effective. Moreover, our opinions are not a
guarantee of result; rather, such opinions represent our legal judgment based upon our review of existing
law that we deem relevant to such opinions and in reliance upon the representations and covenants
referenced above.
Respectfully submitted,
47194378.5
F-3
DRAFT OF
12/01/14
OFFICIAL NOTICE INVITING BIDS
ORANGE COUNTY SANITATION DISTRICT
WASTEWATER REFUNDING REVENUE OBLIGATIONS
SERIES 2015A
(Book-Entry-Only)
NOTICE IS HEREBY GIVEN that bids will be received by the Orange County Sanitation
District (the "District") for the purchase of $ original principal amount of Orange
County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A Evidencing Direct,
Fractional Undivided Interests of the Owners Thereof in Installment Payments to be Made by the Orange
County Sanitation District to the Orange County Sanitation District Financing Corporation(the"Revenue
Obligations"). Bids for less than all of the Revenue Obligations will not be accepted. The bids will be
received in the form, in the manner and up to the time specified below (unless postponed as described
herein):
Date: January_,2015
11,00 a.m.,New York Time
Electronic Bids' Electronic proposals may be submitted to Ipreo, at
wwwnewissuehome.i-deal.com and the Parity electronic bid submission
system (the "Electronic Service"). The Electronic Service will act as
agent of the bidder and not of the District in connection with the
submission of bids and the District assumes no responsibility or liability
for bids submitted through the Electronic Service. See `Information
Regarding Electronic Proposals"herein.
No facsimile,hand delivery or sealed bids will be accepted.
Terms of the Revenue Obligations
The Preliminary Official Statement for the Revenue Obligations, dated January . 2015,
including the cover page and all appendices thereto (the "Preliminary Official Statement"), provides
certain information concerning the sale and delivery of$ 'aggregate principal amount of
the Revenue Obligations, which are certificates of participation evidencing direct, undivided fractional
interests in the Installment Payments (the `Installment Payments"), and the interest thereon, payable by
the District pursuant to the Installment Pmchase Agreement, dated as of February 1, 2015 (the
`Installment Purchase Agreement"), by and between the District and the Orange County Sanitation
District Financing Corporation (the "Corporation"). Each bidder most have obtained and reviewed the
Preliminary Official Statement prior to bidding for the Revenue Obligations. This Official Notice
Inviting Bids, including all exhibits and attachments, contains certain information for quick reference
only, is not a summary of the issue and governs only the terms of the sale of, bidding for and closing
procedures with respect to the Revenue Obligations. Bidders must read the entire Preliminary Official
Statement to obtain information essential to making an informed investment decision.
Preliminary,subject to change.
56089901.2 11411481
Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the
"Master Agreement'), by and between the District and the Corporation, the District has established and
declared the conditions and terms upon which obligations such as the Installment Purchase Agreement,
and the Installment Payments and the interest thereon, will be incurred and secured. Installment
Payments under the Installment Purchase Agreement are payable solely from Net Revenues, as provided
in the Master Agreement and the Installment Purchase Agreement, consisting primarily of all income and
revenue received by the District from the operation or ownership of the Wastewater System of the District
(the"Wastewater System")remaining after payment of Maintenance and Operation Costs.
The Issue
The proceeds from the sale of the Revenue Obligations will be used to: (i)defease and prepay a
portion of the District's outstanding Certificates of Participation, Series 2007B (the "Prior Certificates')
and(ii)pay costs of execution and delivery of the Revenue Obligations. The Revenue Obligations are to
be executed and delivered pursuant to a Trust Agreement, dated as of February 1, 2015 (the "Trust
Agreement'), by and among the District, the Corporation and U.S. Bank National Association, as trustee
(the`Trustee"). Capitalized terms not defined herein shall have the same definitions as used in the Trust
Agreement or the Master Agreement.
Authorization
On December 17, 2014,the District and the Corporation authorized the execution and delivery of
the Installment Purchase Agreement,the Trust Agreement and the Revenue Obligations.
Outstanding Senior Obligations
The District has outstanding Senior Obligations payable on a parity with the Installment
Payments under the Installment Purchase Agreement. The term"Existing Senior Obligations"as used in
the Preliminary Official Statement refers to the 2007A Installment Purchase Agreement, the 2007B
Installment Purchase Agreement, the 2008B Installment Purchase Agreement, the 2009A Installment
Purchase Agreement, the 2010A Installment Purchase Agreement, the 2010C Installment Purchase
Agreement, the 201 IA Installment Purchase Agreement,the 2012A Installment Purchase Agreement, the
2012B Installment Purchase Agreement, the 2014A Installment Purchase Agreement and the 2014B
Installment Purchase Agreement.
Security and Source of Payments
The Revenue Obligations are certificates of participation which evidence direct, undivided
fractional interests in the Installment Payments, and the interest thereon, paid by the District pursuant to
the Installment Purchase Agreement. The obligation of the District to pay the Installment Payments and
the interest thereon and other payments required to be made by it under the Installment Purchase
Agreement is a special obligation of the District payable, in the manner provided under the Installment
Purchase Agreement, solely from Net Revenues and other funds as provided in the Installment Purchase
Agreement. Net Revenues generally consist of all income and revenue received by the District from the
operation or ownership of the Wastewater System remaining after payment of Maintenance and Operation
Costs,all as further provided in the Master Agreement.
The District's obligation to make Installment Payments from Net Revenues is on a parity with the
District's obligation to make payments with respect to its other outstanding obligations described as
Senior Obligations and all Reimbursement Obligations, if any, with respect to Senior Obligations, as
provided in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation
56089901z 2
and is subject to the provisions of the Master Agreement and is afforded all of the advantages, benefits,
interests and security for Senior Obligations pursuant to the Master Agreement Pursuant to the Master
Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and
Reimbursement Obligations with respect to Senior Obligations,and the Net Revenues will not be used for
any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to
Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be
apportioned such sums for such purposes as are expressly permitted by the Master Agreement. This
pledge constitutes a first lien on the Net Revenues for the payment of the Senior Obligations and
Reimbursement Obligations with respect to Senior Obligations. The term Senior Obligations, generally
means all revenue bonds or notes(including bond anticipation notes and commercial paper)of the District
authorized, executed,issued and delivered under and pursuant to applicable law, the Installment Purchase
Agreement and all other contracts (including financial contracts) or leases of the District authorized and
executed by the District under and pursuant to applicable law, the installment, lease or other payments
which are, in accordance with the provisions of the Master Agreement, payable from Net Revenues on a
parity with the payments under the Master Agreement.
The District may at any time incur Subordinate Obligations; provided, however, that prior to
incurring such Subordinate Obligations,the District will have determined that the incurrence thereof will
not materially adversely affect the District's ability to comply with the requirements of the Master
Agreement The District may at any time incur Reimbursement Obligations with respect to Subordinate
Obligations. Currently, there are no Subordinate Obligations outstanding. For a description of the
District's outstanding Senior Obligations, see "FINANCIAL OBLIGATIONS— Existing Indebtedness"
in the Preliminary Official Statement.
The District may, in connection with the incurrence of Subordinate Obligations, pledge Net
Revenues to the payment of Subordinate Obligations and Reimbursement Obligations with respect to
Subordinate Obligations; provided, however, that such pledge, and any lien created thereby, shall be
junior and subordinate to the pledge of, and lien on,Net Revenues for the payment of Senior Obligations
and Reimbursement Obligations with respect to Senior Obligations.
Pursuant to the Master Agreement, the District is required, to the extent permitted by law, to fix,
prescribe and collect fees and charges for the services and facilities of the Wastewater System which will
be at least sufficient to yield during each Fiscal Year(a)Net Revenues equal to 125% of Debt Service on
Senior Obligations for such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service
on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such
fees and charges and may make such classification thereof as it deems necessary,but shall not reduce the
fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and
charges will at all times be sufficient to meet the requirements of the Master Agreement. See
"SECURITY AND SOURCES OF PAYMENT FOR THE REVENUE OBLIGATIONS — Rate
Covenant"in the Preliminary Official Statement.
Additional Obligations
In addition to the Existing Senior Obligations, the District may at any time incur Obligations
payable on a parity or on a subordinate basis to the payment by the District of the Installment Payments
upon satisfaction of conditions provided in the Master Agreement. No Obligations payable on such a
subordinate basis are currently outstanding. See "SECURITY AND SOURCES OF PAYMENT FOR
THE REVENUE OBLIGATIONS Limitations on Issuance of Additional Obligations" in the
Preliminary Official Statement
56089901.2 3
Book-Entry-Only
The Revenue Obligations will be executed and delivered in the form of fully registered
certificates payable in lawful money of the United States of America. The Revenue Obligations will be
initially delivered only in book-entry form and will be registered in the name of Cede & Co., as nominee
of The Depository Trust Company, New York, New York ("DTC'), which will act as securities
depository for the Revenue Obligations. Individual purchases of the Revenue Obligations will be made in
book-entry form only. Purchasers of Revenue Obligations will not receive physical certificates
representing their ownership interests in the Revenue Obligations purchased. The Revenue Obligations
will be delivered in Authorized Denominations of$5,000 and any integral multiple thereof. Payments of
principal and interest evidenced by the Revenue Obligations are payable directly to DTC by the Trustee.
Upon receipt of payments of such principal and interest,DTC will in turn distribute such payments to the
beneficial owners of the Revenue Obligations. So long as the Revenue Obligations are in the DTC book-
entry system, the interest, principal and prepayment premiums, if any, due with respect to the Revenue
Obligations will be payable by the Trustee,or its agent,to DTC or its nominee.
Principal and Interest Payments
The Revenue Obligations will be dated as of the date of initial delivery and will evidence interest
from that date(computed on the basis of a 360-day year of twelve 30-day months). Interest evidenced by
the Revenue Obligations is payable semiannually on February I and August I of each yen, commencing
on August 1, 2015. Payment of principal and prepayment premium, if any, evidenced by the Revenue
Obligations will be paid in lawful money of the United States of America upon presentation and surrender
thereof at the Principal Office of the Trustee.
Principal Amortization
The Revenue Obligations will be executed and delivered in the original principal amount of
$ 'and will be subject to principal amortization on February I in the years 2028 through
2037 in the amounts set forth in the Official Bid Form.
Mandatory Sinking Account Prepayment
If the successful bidder designates principal amounts to be combined into a term maturity, such
term maturity shall be subject to mandatory sinking account payments commencing on February I of the
first year which has been combined to form such term maturity and continuing on February 1 in each year
thereafter until the stated maturity date of that term maturity The prepayment price will be equal to the
principal amount for such year set forth in the Official Bid Form,plus accrued interest evidenced thereby
to the date fixed for prepayment, without premium. The amount of each such prepayment shall be
reduced in the event and to the extent that Installment Payments payable on the corresponding Installment
Payment Date are prepaid pursuant to provisions of the Installment Purchase Agreement governing
optional prepayment.
Optional Prepayment
The Revenue Obligations with stated Principal Payment Dates prior to February 1, 2026 are not
subject to optional prepayment prior to their stated Principal Payment Dates. The Revenue Obligations
with stated Principal Payment Dates on or after February 1,2026 are subject to optional prepayment prior
Preliminary,subject to change.
56089901.2 4
to their stated Principal Payment Dates, on any date on or after February 1, 2025, in whole or in part, in
Authorized Denominations, from and to the extent of prepaid Installment Payments paid pursuant to the
Installment Purchase Agreement or from any other source of available funds, any such prepayment to be
at a price equal to the principal evidenced by the Revenue Obligations to be prepaid,plus accrued interest
evidenced thereby to the date fixed for prepayment,without premium.
Selection of Revenue Obligations for Prepayment
Whenever less than all the Outstanding Revenue Obligations me to be prepaid on any one date
pursuant to provisions of the Trust Agreement with respect to optional prepayment of Revenue
Obligations, the Trustee shall select the Revenue Obligations to be prepaid among Revenue Obligations
with different Principal Payment Dates as directed in a Written Request of the District. Whenever less
than all the Outstanding Revenue Obligations with the same stated Principal Payment Date are to be
prepaid on any one date pursuant to the Trust Agreement, the Trustee shall select the Revenue
Obligations with such Principal Payment Date to be prepaid as directed in a Written Request of the
District, or at the discretion of the District by lot in any manner that the Trustee deems fair and
appropriate,which decision shall be final and binding upon the District and the Owners. The Trustee shall
promptly notify the District in writing of the numbers of the Revenue Obligations so selected for
prepayment on such date.
Notice of Prepayment
The Trustee shall,at least 20 but not more than 60 days prior to any prepayment date, give notice
of prepayment to the respective Owners of Revenue Obligations designated for prepayment by first-class
mail,postage prepaid, at their addresses appearing on the registration books maintained by the Trustee as
of the close of business on the day before such notice of prepayment is given. The actual receipt by the
Owner of any notice of such prepayment shall not be a condition precedent to prepayment, and neither
failure to receive such notice nor any defect therein shall affect the validity of the proceedings for the
prepayment of such Revenue Obligations or the cessation of interest evidenced thereby on the date fixed
for prepayment.
Interest Rates,Reoffering Prices,Premium or Discount Bids and Certificate of Initial Purchaser
Bidders most bid to purchase all and not part of the Revenue Obligations and must submit their
bids on the Official Bid Form. Bidders must specify a rate of interest for each maturity of the Revenue
Obligations. The rates of interest must be expressed in multiples of either one-eighth ('s) or one-
twentieth ('/is) of one percent (10/6), and no interest rate on Revenue Obligations maturing on or after
February 1, 2026 may be less than 5.0%per armour. All Revenue Obligations of the same maturity must
evidence interest at the same rate.
The successful bidder will, within 30 minutes after being notified of the award of the Revenue
Obligations, advise the District of the initial bona fide public reoffering prices of each maturity of the
Revenue Obligations on the date of award. The successful bidder will also be required to furnish to the
District a certificate("Certificate of Initial Purchaser") in the form of the Certificate of Initial Purchaser
attached hereto(with such modifications as may be acceptable to Special Counsel). At any time before or
after delivery of the Revenue Obligations to the successful bidder, that successful bidder also may be
required by the District or Special Counsel to clarify any discrepancies between the Certificate of Initial
Purchaser and publicly available information relating to trades of the Revenue Obligations that might
suggest that the initial sale of a substantial portion of any maturity of the Revenue Obligations to the
public was at a materially higher price than the price stated for that maturity in the Certificate of Initial
Purchaser.
56089901.2 5
Bidders may bid to purchase the Revenue Obligations from the District at a discount or with a
premium; however, no bid will be considered if the bid is to purchase Revenue Obligations at an
aggregate price less than 111% or more than 120% of the aggregate principal amount of the Revenue
Obligations.
No bid will be accepted that contemplates the waiver of any interest or other concession by the
bidder as substitute for payment in full of the purchase price. Bids that do not conform to the terms of
this section may be rejected. See`Right to Reject Bids,Waive Irregularities"below.
Adjustment of Principal Amounts After Receipt of Bids
The principal amounts of the Revenue Obligations set forth in the Official Bid Form reflect
estimates of the District as to the likely interest rates of the winning bid and the premium or discount
contained in the winning bid. After selecting the winning bid, the amortization schedule for the Revenue
Obligations will be adjusted in $5,000 increments, to reflect the actual interest rates and any discount or
premium in the winning bid to properly fund the purchase price of the Prior Certificates and to
accommodate certain other requirements or preferences of the District. Such adjustments will not change
any Revenue Obligation in any yen by more than the greater of$350,000 or 10%of the principal amount
for such year. The dollar amount bid for the Revenue Obligations by the winning bidder will be adjusted
to reflect such adjustment in the applicable amortization schedule. Any such adjustment will change the
total (but not the per Revenue Obligation) dollar amount of purchaser's discount and original issue
discount or premium, if any, provided in such bid. Any such adjustment will be communicated to the
winning bidder within 24 hours after receipt of such bid by the District. Changes in the amortization
schedule made as described in this paragraph will not affect the determination of the winning bidder or
give the winning bidder any right to reject the Revenue Obligations.
No Insurance
THE SUCCESSFUL BIDDER SHALL NOT PURCHASE MUNICIPAL BOND INSURANCE
IN CONNECTION WITH THE REVENUE OBLIGATIONS.
Form of Bid
BIDS FOR LESS THAN ALL OF THE REVENUE OBLIGATIONS WILL NOT BE
ACCEPTED. Each bid must be on the Official Bid Form, submitted through the Electronic Service as
specified herein. All electronic proposals shall be deemed to incorporate the provisions of the Official
Bid Form and must be unconditional and irrevocable. In addition, each bidder is requested to supply an
estimate of the true interest cost resulting from its bid, computed as prescribed below under the caption
"Award, Delivery and Payment,"which shall be considered as informative only and not binding on either
the bidder or the District. Each bid must be in accordance with the terms and conditions set forth in this
Official Notice Inviting Bids.
The District will make its best efforts to accommodate electronic bids; however, the District,the
Financial Advisor (Public Resources Advisory Group) and Special Counsel assume no responsibility for
any error contained in any electronic bid, or for the failure of any electronic bid to be transmitted or
received at the official time for receipt of such bids. The official time for receipt of bids will be
determined by the District at the place of the bid opening, and the District shall not be required to accept
the time kept by Electronic Service as the official time. The District assumes no responsibility for
informing any bidder prior to the deadline that its bid is incomplete,or not received.
56089901.2 6
If multiple timely bids are received from a single bidder the District shall accept the best of such
bids and each bidder agrees,by submitting any bid,to be bound by its best bid.
Information Regarding Electronic Proposals
All proposals most be submitted through the Electronic Service. If any provision of this Official
Notice Inviting Bids conflicts with information provided by the Electronic Service, this Official Notice
Inviting Bids shall control. The District is not responsible for the proper operation of, and shall have no
liability for any delays or interruptions of or any damages caused by the Electronic Service. The District
is using the Electronic Service as a communication mechanism and not as the District's agent to conduct
electronic bidding for the Revenue Obligations. The District is not bound by any advice of or
determination by the Electronic Service to the effect that any particular bid complies with the terms of
this Official Notice Inviting Bids. All costs and expenses incurred by prospective bidders in connection
with their submission of bids through the Electronic Service are the sole responsibility of such bidders
and the District is not responsible for any such costs or expenses. Further information about the
Electronic Service, including any fee charged, may be obtained from Ipreo, 1359 Broadway, Second
Floor,New York,NY 10018 (212-849-5023). The District assumes no responsibility or liability for bids
submitted through the Electronic Service. The District shall be entitled to assume that any bid submitted
through the Electronic Service has been made by a duly authorized agent of the bidder.
Bid Security Deposit
Each bidder must provide with its bid a wire transfer of immediately available federal funds in the
amount of$1,500,000(the"Bid Security Deposit").
Bid Security Deposit wire transfers must be received in federal funds prior to the deadline for
examination of the bids, and should be directed as follows:
BANK: U.S.Bank,N.A.
ABA: 091000022
FBO: U.S.Bank Trust N.A.
A/C: 180121167365
REF: OCSD
ATTN: Linda Verstuyft
(213)615-6052
The wire transfers of unsuccessful bidders will be returned promptly on the bid date after the
examination of bids. The wire transfer of the successful bidder will be retained by the District and
applied to the purchase price at the time of delivery of the Revenue Obligations. The District disclaims
any liability for funds sent by wire transfer,except for any willful misconduct or reckless disregard for its
duties.
If after the award of the Revenue Obligations,the successful bidder fails to complete the purchase
on the terms stated in its bid,unless such failure of performance shall be caused by any act or omission of
the District, the Bid Security Deposit shall be retained by the District as stipulated liquidated damages.
No interest will be paid upon any Bid Security Deposit.
Official Statement
The District has approved a Preliminary Official Statement for the Revenue Obligations, dated
January_,2015,which the District has"deemed final"for purposes of Rule 15c2-12 promulgated by the
56089901.2 7
Securities and Exchange Commission, as amended(the"Rule"), although subject to revision,amendment
and completion in conformity with the Rule. The District will provide the successful bidder such
reasonable number of printed copies of the final Official Statement as such bidder may reasonably request
no later than seven business days after the day the Revenue Obligations are awarded. Up to 50 copies of
the final Official Statement will be famished without cost to the successful bidder and further copies, if
desired, will be made available at the successful bidder's expense. The successful bidder shall file the
final Official Statement with a nationally recognized municipal securities information repository on a
timely basis. The successful bidder shall, by accepting the award, agree at all times to comply with the
provisions of the Rule and with all applicable roles of the Municipal Securities Rulemaking Board.
Award,Delivery and Payment
If satisfactory bids are received, the Revenue Obligations will be awarded to the highest
responsible bidder not later than two hours after the time established for the receipt of bids. The highest
bidder shall be the bidder submitting the best price for the Revenue Obligations,which best price shall be
that resulting in the lowest true interest cost with respect to the Revenue Obligations. The true interest
cost shall be computed by doubling the semi-annual interest rate (compounded semi-annually) necessary
to discount the debt service payments from their respective payment dates to the date of the Revenue
Obligations and to the price bid. If two or more bidders have bid the same true interest cost, the award
shall be made at the sole discretion of the District.
Delivery of the Revenue Obligations is expected to occur on or about February _, 2015. The
Revenue Obligations will be delivered through the facilities of DTC, New York, New York. The
successful bidder shall pay for the Revenue Obligations on the date of delivery in Los Angeles,California
in immediately available federal funds. Any expenses of providing federal funds shall be home by the
purchaser. Payment on the delivery date shall be made in an amount equal to the price bid for the
Revenue Obligations less the amount of the bid security deposit.
Right to Reject Bids,Waive Irregularities
The District reserves the right to reject any and all bids, and to the extent permitted by law, to
waive any irregularity or informality in any bid.
CUSIP Numbers
It is anticipated that CUSIP numbers will be printed on the Revenue Obligations,but the District
will assume no obligation for the assignment or printing of such numbers on the Revenue Obligations or
for the correctness of such numbers, and neither the failure to print such numbers on any Revenue
Obligation nor any error with respect thereto shall constitute cause for a failure or refusal by the
purchasers thereof to accept delivery of and make payment for the Revenue Obligations. The cost for the
assignment of CUSIP numbers to the Revenue Obligations will be the responsibility of the successful
bidder.
California Debt and Investment Advisory Commission
The successful bidder will be required to pay all fees due to the California Debt and Investment
Advisory Commission ("CDIAC")under California law. CDIAC will invoice the successful bidder after
the delivery of the Revenue Obligations.
56089901.2
Legal Opinions
The District will furnish to the successful bidder at the closing of the Revenue Obligations the
legal opinion of Special Counsel to the effect that, in the opinion of Special Counsel, based upon an
analysis of existing laws,regulations,rulings and court decisions,and assuming, among other matters,the
accuracy of certain representations and compliance with certain covenants,the interest component of each
Installment Payment and the allocable portion thereof distributable in respect of each Revenue Obligation
is excluded from gross income for federal income tax purposes under section 103 of the Internal Revenue
Code of 1986 and is not a specific preference item for purposes of the federal alternative minimum tax
and is exempt from State of California personal income taxes. Special Counsel will express no opinion
regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt
of interest on,the Revenue Obligations.
Closing Documents
The District will furnish to the successful bidder at the time of delivery of the Revenue
Obligations: (1)a certificate certifying (i) that as of and at the time of delivery of the Revenue
Obligations,there is no action, suit,proceeding or investigation,pending or,to the best knowledge of the
District, threatened against or affecting the District, (A) which affects or seeks to prohibit, restrain or
enjoin the execution and delivery of the Revenue Obligations or the Trust Agreement, (B) in any way
contesting the validity of the Revenue Obligations, the Installation Purchase Agreement or the Trust
Agreement or the powers of the District to enter into or perform its obligations under such documents to
which it is a party or the existence of the District, or (C)wherein an unfavorable decision, ruling or
finding would materially and adversely affect the District, or the validity or enforceability of the Revenue
Obligations, the Installation Purchase Agreement or the Trust Agreement or the ability of the District to
perform its obligations under such documents to which it is a party, (ii)that the Preliminary Official
Statement did not on the date of sale of the Revenue Obligations and the Official Statement does not on
the date of delivery contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein, in the light of the circumstances under which they
were made, not misleading, and (2) a receipt of the District showing that the purchase price of the
Revenue Obligations has been received by the District.
Continuing Disclosure
To assist the successful bidder in complying with the Rule, the District will undertake, pursuant
to the Continuing Disclosure Agreement, to provide certain annual financial information, and notices of
the occurrence of certain enumerated events. A description of the Continuing Disclosure Agreement is
set forth in the Preliminary Official Statement and will be set forth in the final Official Statement.
Additional Information
Electronic copies of the Trust Agreement, the Installment Purchase Agreement, the Master
Agreement, this Official Notice Inviting Bids, the Official Bid Form, and the Preliminary Official
Statement will be furnished to any potential bidder upon request made to the District's Financial Advisor
at: Public Resources Advisory Group, 11500 West Olympic Boulevard, Suite 502, Los Angeles, CA
90064,310-477-8487,via e-mail at Ichoi@pmgadvison.com.
Right to Modify or Amend
The District reserves the right to modify or amend this Official Notice Inviting Bids, including
but not limited to the right to adjust and change the principal amount of the Revenue Obligations being
56089901.2 9
offered; provided, however, that such notifications or amendments shall be made not later than the
business day prior to the date fixed for the receipt of bids, by 4:00 p.m., New York Time and
communicated through Thomson Municipal News (available at http://w .tm3.com) and by facsimile
transmission to any qualified bidder timely requesting such notice. Bidders are required to bid for the
Revenue Obligations as so modified.
Cancellation or Postponement
The District reserves the right to cancel or postpone, from time to time, the date established for
the receipt of bids for any reason at any time. Any such postponement will be announced by Thomson
Municipal News. If any date fixed for the receipt of bids and the sale of the Revenue Obligations is
postponed, any alternative sale date will be announced via Thomson Municipal News at least 24 hours
prior to such alternative sale date and will be provided by facsimile transmission to any qualified bidder
timely requesting such notice. On any such alternative sale date, any bidder may submit a sealed bid for
the purchase of the Revenue Obligations in conformity in all respects with the provisions of this Official
Notice Inviting Bids except for the date of sale and except for the changes announced by Thomson
Municipal News at the time the sale date and time are announced.
Dated: January_,2015
5608990L2 10
EXHIBIT A
FORM OF CERTIFICATE OF INITIAL PURCHASER
January_2015
Orange County Sanitation District
Fountain Valley,California
Fulbright&Jaworski LLP
Los Angeles,California
Ladies and Gentlemen:
We have served as the Underwriter in connection with the execution and delivery on behalf of the
Orange County Sanitation District (the "District') of $ Orange County Sanitation District
Wastewater Refunding Revenue Obligations, Series 2015A(the"Revenue Obligations").
We hereby certify that:
(i) January_, 2015 was the first day on which there was a binding contract in writing for
the sale or exchange of the Revenue Obligations by the District to the Underwriter, and
on that day (the "Sale Date"), we undertook pursuant to such contract to make a bona
fide public offering of all of the Revenue Obligations. On the Sale Date all of each
maturity of the Revenue Obligations was offered in a bona fide initial offering to the
general public at the initial offering price or initial offering yield (the "Initial Offering
Price") shown, for such maturity on the inside cover page of the Official Statement,
dated January ,2015,relating to such offering(the"Official Statement'). The Initial
Offering Price for each maturity represented: (i) our reasonable determination of a fair
market value on the Sale Date of that maturity of the Revenue Obligations; and (ii) the
price at which we reasonably expected to sell all the Revenue Obligations of that maturity
to the general public;
(ii) based upon our records and other information available to us that we believe to be
correct,the first price at which a substantial portion(but in no event less than ten percent)
of each maturity of the Revenue Obligations[, (except for the Revenue Obligations
maturing an (the "Unsold Maturity"),] was sold by the Underwriter to the
general public was the Initial Offering Price in respect of that maturity as described
above. [For[the] [each]Unsold Maturity,on the Sale Date we reasonably expected that a
substantial portion (at least ten percent) of that Unsold Maturity would be sold at the
initial offering price or yield in respect of that maturity];
(iii) at the time that we agreed to purchase the Revenue Obligations, based upon then
prevailing market conditions, we had no reason to believe that the first sale of any of the
Revenue Obligations to a member of the general public would be at an initial offering
price greater than or an initial offering yield less than the fair market value thereof;
(iv) taking into account the aggregate amount of each maturity, and treating the Initial
Offering Price as the issue price of each Revenue Obligation of that maturity, the
aggregate issue price of the Revenue Obligations is $ ; and
56089901.2 11411481
(v) we provided the yield proof attached hereto as Exhibit A to Special Counsel;we make no
representations regarding its legal sufficiency for any purpose.
For purposes of this Certificate, the term"general public"does not include bond houses,brokers,
or similar persons or organizations acting in the capacity of underwriters or wholesalers.
The undersigned understands that the statements made herein will be relied upon by the District
in its efforts to comply with the conditions imposed by the Internal Revenue Code of 1986 (the "Code"),
and will be relied upon by Special Counsel in rendering its legal opinion, concerning the exclusion from
gross income for federal income tax purposes of the interest component of each Installment Payment
under the Installment Purchase Agreement, dated as of February 1, 2015, and described in more detail in
the Official Statement,and the amount thereof distributable with respect to the Revenue Obligations.
[MTIAL PURCHASER],
as Underwriter
By:
Title:
56089901.2 2
Exhibit A
Yield Proof
(See attached)
560899012 3
OFFICIAL BID FORM
ORANGE COUNTY SANITATION DISTRICT
WASTEWATER REFUNDING REVENUE OBLIGATIONS
SERIES 2015A
January ,2015
Orange County Sanitation District
10844 Ellis Avenue
Fountain Valley,CA 92708-7018
Attn: Lorenzo Tyner
Ladies and Gentlemen:
We hereby offer to purchase all of the $ aggregate principal amount of the Orange
County Sanitation District (the "District') Wastewater Refunding Revenue Obligations, Series 2015A
(the `Revenue Obligations"), more particularly described in the Official Notice Inviting Bids, dated
January _, 2015 (the "Official Notice Inviting Bids"), which is incorporated herein by reference, and
made a part thereof, at a purchase price of $ . This offer is for Revenue Obligations
evidencing interest at the rates and in the form of serial maturities or term maturities with mandatory
sinking account prepayments as set forth in the table on the following page.
The bid is subject to acceptance not later than two hours after the expiration of the time established for the
final receipt of bids.
Our calculation of the true interest cost, computed in accordance with the instructions in the Official
Notice Inviting Bids, and which is considered to be informative only and not a part of the bid, is
With this bid we are providing the District a wire transfer in immediately available federal funds in the
amount of$1,500,000 to an account specified by the District or its representative, in accordance with the
Official Notice Inviting Bids.
We have noted that payment of the purchase price is to be made in immediately available Federal Funds
at the time of delivery of the Revenue Obligations. If we are the successful bidder,we will (1)within 30
minutes after being notified of the verbal award of the Revenue Obligations, advise the District of the
initial public offering prices of the Revenue Obligations; and (2) prior to delivery of the Revenue
Obligations furnish a certificate, acceptable to Special Counsel, Fulbright& Jaworski LLP, as to the
"issue price"of the Revenue Obligations in the form specified in the Official Notice Inviting Bids.
Preliminary,subject to change.
56089901.2 11411481
Sinking
Maturity Principal Interest Serial Account
(February1 Amount* Rate Maturity Prepayment
2028 (Check one column)
2029
2030
2031
2032
2033
2034
2035
2036
2037
We represent that we have full and complete authority to submit this bid on behalf of our bidding
syndicate and the undersigned will serve as the lead manager for the group if the Revenue Obligations are
awarded pursuant to this bid. We certify(or declare)under penalty of perjury under the laws of the State
of California that this proposal is genuine, and not a sham or collusive, nor made in the interest of or on
behalf of any person not herein named, and that the bidder has not directly or indirectly induced or
solicited any other bidder to put in a sham bid or any other person, firm or corporation to refrain from
bidding, and that the bidder has not in any manner sought by collusion to secure for himself an advantage
over any other bidder.
Respectfully Submitted,
Account Manager:
By:
Address:
City:
State:
Telephone:
Following(or attached)is a list of the members of our account on whose behalf this bid is made.
Preliminary,subject to change.
56089901.2 2
DRAFT
12/01/14
NOTICE OF INTENTION TO SELL
S
Orange County Sanitation District
Wastewater Refunding Revenue Obligations
Series 2015A
NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District')
intends to receive electronic bids until 11:00 a.m.,New York time, on
January 2015,
through the use of an electronic bidding service offered by Ipreo; at www.newissuehome.i-
deal.com and the Parity electronic bid submission system, for the purchase of all of the Orange
County Sanitation District Wastewater Refunding Revenue Obligations, Series 2015A (the
"Revenue Obligations"), dated as of the date of initial delivery, and maturing on such dates as
described in the related Official Notice Inviting Bids (the "Notice"). No bids will be accepted by
facsimile. Bids for less than all of the Revenue Obligations will not be accepted. The District
reserves the right to postpone the date established for the receipt of bids as more fully described
under the paragraph"Cancellation or Postponement"in the Notice.
NOTICE IS HEREBY FURTHER GIVEN that electronic copies of the Notice and the
Preliminary Official Statement issued in connection with the sale of the Revenue Obligations
may be obtained from the District's financial advisor, Public Resources Advisory Group, 11500
West Olympic Boulevard, Suite 502, Los Angeles, California 90064, 310-477-8487, via e-mail:
lchoi@pmgadvisors.com.
Orange County Sanitation District
Dated: .January_, 2015
' Preliminary, subject to change.
56089541.2 11411481
ADMINISTRATION COMMITTEE Meeting Date TOBA.of Dir.
iV10/i4 i2/v/r4
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: INVEST AND/OR REINVEST DISTRICT'S FUNDS
GENERAL MANAGER'S RECOMMENDATION
Adopt Resolution No. OCSD 14-XX, entitled "A Resolution of the Board of Directors of
the Orange County Sanitation District, Authorizing the Orange County Sanitation
District's Treasurer to Invest and/or Reinvest District's Funds; Adopting District's
Investment Policy Statement and Performance Benchmarks for calendar year 2015; and
Repealing Resolution No. OCSD 14-10".
SUMMARY
This agenda item presents an update to the Orange County Sanitation District's
Investment Policy Statement to the Administration Committee for consideration in the
Committee's capacity as the oversight committee for the Investment Policy (Section
16.2). With adoption of the Resolution, the Board of Directors would readopt the
Sanitation District's current Investment Policy Statement, portfolio performance
benchmarks, and monitoring and reporting requirements for calendar year 2015.
The Sanitation District's Investment Policy Statement was previously approved by the
Administration Committee and Board for FY 2015-15 in July 2014. In October 2014, the
Board replaced the District's contracted investment manager from Pacific Investment
Management Company (Pimco) with Chandler Asset Management (Chandler). Staff
previously stated in the July 2014 staff report that the future investment management
firm may have recommendations on changes to the investment policy for Board
consideration prior to the next investment policy update a year from now. Chandler has
since performed an extensive review of the District's adopted investment policy and has
provided recommendations to further enhance the policy.
PRIOR COMMITTEE/BOARD ACTIONS
July 2014 — Board adopted Resolution No. OCSD 14-10, Authorizing the Orange
County Sanitation District's Treasurer to Invest and/or Reinvest District's Funds;
Adopting District's Investment Policy Statement and Performance Benchmarks for FY
2014-15; and, Repealing Resolution No. OCSD 13-13.
ADDITIONAL INFORMATION
The Investment Policy will govern the investment activities of Chandler Asset
Management, the Sanitation District's external money manager, on behalf of the District.
Page 1 of 3
On December 11, 2012, the Sanitation District's Investment Policy Statement received
the Investment Policy Certification of Excellence Award from the California Municipal
Treasurer's Association (CMTA). A copy of the letter of certification is included each
year in the annual Investment Policy document. The Sanitation District received its first
Award of Excellence for the Investment Policy Statement in December 1996.
Annual Review of Investment Policy
The Investment Policy includes the requirement that the Sanitation District shall review
its Investment Policy annually (Sections 1.2 and 16.1).
Chandler reviewed the existing policy to ensure that the language is consistent with the
California Government Code, expand on the best practices utilized by CMTA (i.e.,
minimum allocation to the Treasury sector) and to remove some of the language in the
policy specific to the prior manager.
The proposed investment policy is attached with redlined changes from the most recent
approved policy in July 2014. Some of the more significant proposed changes include:
• US Treasury securities make up at least 10 percent of the portfolio.
• Approval of Supranational Obligations not exceeding 30 percent of the portfolio
to be consistent with the California Government Code beginning January 1, 2015
(53601 Q).
• Expansion on the description of mortgage securities and a 20 percent limitation
on mortgage securities against the entire portfolio.
• Rating requirement reference has been changed to the National Recognized
Statistical Rating Organization (NRSRO) and not exclusively to Moody's and
S&P.
Annual Delegation of Investment Authority
Effective January 1, 1997, Section 53607 of the Code states that governing boards of
local agencies may only delegate authority to invest and/or reinvest agency funds to the
agency's Treasurer for a one-year period.
With adoption of the Resolution, the Board of Directors would renew its delegation of
investment authority to the Director of Finance/Treasurer for a one-year period, January
1, 2015 to December 31, 2015, in compliance with the requirements of Section 53607.
Each year, the Board of Directors will consider similar actions along with the annual
reconsideration of the Sanitation District's Investment Policy.
CEQA
N/A
BUDGET / PURCHASING ORDINANCE COMPLIANCE
N/A
Page 2 of 3
ATTACHMENTS
The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD
website(mmocsd.coml with the complete agenda package:
• Exhibit A - OCSD Calendar Year 2015 Investment Policy Statement-redlined
• Exhibit B - Performance Monitoring & Reporting Summary
• Proposed Resolution No. OCSD 14-XX
Page 3 of 3
Return to Aaenda Reo.,
a`
ORANGE COUNTY SANITATION
DISTRICT
INVESTMENT
POLICY
STATEMENT
Proposed for
Review and Approval
By
Administration Committee
On
Decemberdaly 108, 2014
And for Adoption
By
Board of Directors
On
Decemberdaly 2317, 2014
TABLE OF CONTENTS
Section TOPIC Page
1.0 Policy......................................................................................1
2.0 Scope......................................................................................1
3.0 Standard of Prudence.............................................................1
4.0 Investment Objectives.............................................................2
5.0 Delegation of Authority............................................................2
6.0 Ethics and Conflicts of Interest................................................3
7.0 Authorized Financial Dealers and Institutions.........................4
8.0 Authorized and Suitable Investments......................................5
9.0 Collateralization.......................................................................9
10.0 Safekeeping and Custody.......................................................9
11.0 Diversification..........................................................................9
12.0 Maximum Maturities..............................................................11
13.0 Internal Control......................................................................12
14.0 Performance Objectives and Benchmarks............................12
15.0 Reporting ..............................................................................12
16.0 Investment Policy Adoption and Revision.............................13
Appendix
A. Summary of Investment Authorization
B. Treasury Management Procedures
C. Investment Manager Certification
D. Investment Pool Questionnaire (LAIF)
E. Board Resolution No. OCSD-I4-XX,Authorizing the Districrs Treasurer to Invest
and/or Reinvest District Funds, and Adopting Investment Policy and Performance
Benchmarks
F. Quarterly Investment Program Monitoring Reports
G. Sections of the California Government Code Pertinent to Investing Public Funds
H. Glossary of Investment Terms
Return to Anerda Report
ORANGE COUNTY SANITATION DISTRICT
INVESTMENT POLICY STATEMENT
1.0 Policv:
It is the policy of the Orange County Sanitation District(OCSD)to invest public funds in
a manner which ensures the safety and preservation of capital while meeting
reasonably anticipated operating expenditure needs, achieving a reasonable rate of
return and conforming to all state and local statutes governing the investment of public
funds.
1.1. This Investment Policy is set forth by OCSD for the following purposes:
1.1.1. To establish a clear understanding for the Board of Directors,
OCSD management, responsible employees and third parties of the
objectives, policies and guidelines for the investment of the OCSD's idle
and surplus funds.
1.1.2. To offer guidance to investment staff and any external
investment advisors on the investment of OCSD funds (see Appendix
..A").
1.1.3. To establish a basis for evaluating investment results.
1.2. OCSD establishes investment policies which meet its current investment
goals. OCSD shall review this policy annually,and may change its
policies as its investment objectives change.
2.0 Scope:
This Investment Policy applies to all financial assets of OCSD;except for the proceeds
of OCSD's capital projects financing program,which are invested in accordance with
provisions of their specific bond indentures; and such other funds excluded by law or
other Board-approved covenant or agreement.
These funds are accounted for by OCSD as Enterprise Funds as represented in
OCSD's Comprehensive Annual Financial Report.
3.0 Standard of Prudence:
The standard of prudence to be used by OCSD internal staff, and any authorized
investment advisor(s),shall be as described in Section 53600.3 of the California
Government Code as follows: Except as provided in subdivision (a)of Section
27000.3, all governing bodies of local agencies or persons authorized to make
investment decisions on behalf of those local agencies investing public funds
Page 1 ef-03
pursuant to this chapter are trustees and therefore fiduciaries subject to
the prudent investor standard.When investing, reinvesting, purchasing,
acquiring, exchanging, selling,or managing public funds, a trustee shall act with
care, skill, prudence, and diligence under the circumstances then prevailing,
including, but not limited to,the general economic conditions and the anticipated
needs of the agency,that a prudent person acting in a like capacity and
familiarity with those matters would use in the conduct of funds of a like character
and with like aims,to safeguard the principal and maintain the liquidity needs of
the agency.Within the limitations of this section and considering individual
investments as part of an overall strategy, investments may be acquired as
authorized by law.
4.0 Investment Objectives:
The primary objectives of OCSDs investment activities, in priority order, and as
described in Section 53600.5 of the California Government Code, shall be:
4.1 Safety: The safety and preservation of principal is the foremost objective
of the investment program of OCSD. Investments shall be selected in a
manner that seeks to ensure the preservation of capital in OCSD's overall
portfolio. This will be accomplished through a program of diversification,
more fully described in Section 11.0,and maturity limitations, more fully
described in Section 12.0, in order that potential losses on individual
securities do not exceed the income generated from the remainder of the
portfolio.
4.2 Liquidity:The investment program will be administered in a manner that
will ensure that sufficient funds are available for OCSD to meet its
reasonably anticipated operating expenditure needs.
4.3 Return on Investments: The OCSD investment portfolio will be
structured and managed with the objective of achieving a rate of return
throughout budgetary and economic cycles, commensurate with legal,
safety,and liquidity considerations.
5.0 Delectation of Authority:
5.1 Authority to manage OCSD's investment program is derived from the
California Government Code Sections 53600 at seq. and Sections 53635
at seq. The Board of Directors hereby delegates management
responsibility for the OCSD investment program to its Director of Finance
and Administrative Services/Treasurer,who shall establish written
procedures for the operation of the investment program, consistent with
this Policy. The Controller/Assistant Treasurer shall be responsible for
day-to-day administration, monitoring, and the development of written
administrative procedures for the operation of the investment program,
consistent with this Policy. The current treasury management procedures
Page 2 ef79
Return to Mends Report
are presented in Appendix"B." No person may engage in an investment
transaction except as provided under the terms of this Policy and the
procedures established by the Treasurer. The Treasurer shall be
responsible for all transactions undertaken by OCSD internal staff, and
shall establish a system of controls to regulate the activities of internal
staff and external investment advisors engaged in accordance with
Section 5.3.
5.2 The administrative procedures for the operation of OCSD's investment
program will provide for, but not be limited to,the following:
5.2.1 Formats for monthly and quarterly reports to the Administration
Committee, and the Board of Directors.
5.2.2 Compliance with generally accepted accounting principles of
the Government Accounting Standards Board.
5.2.3 Establishment of benchmarks for performance measurement.
5.2.4 Establishment of a system of written internal controls.
5.2.5 Establishment of written procedures for competitive bids and
offerings of securities that may be purchased or sold by intemal OCSD
staff.
5.2.6 Establishment of a Desk Procedures Manual for treasury
operations and management.
5.3 The Board of Directors of OCSD may, in its discretion, engage the
services of one or more registered investment advisors to assist in the
management of OCSD's investment portfolio in a manner consistent with
OCSD's objectives. Such external investment advisors,which shall be
selected through a competitive process, shall be granted discretion to
purchase and sell investment securities in accordance with this
Investment Policy. Such advisors must be registered under the
Investment Advisers Act of 1940, or be exempt from such registration.
6.0 Ethics and Conflicts of Interest:
6.1 Officers and employees of OCSD involved in the investment process shall
refrain from personal business activities that could conflict with proper
execution of OCSD's investment program,or which could impair their
ability to make impartial investment decisions. Employees and investment
officials shall disclose to the General Manager any material financial
interests in financial institutions that conduct business within OCSD's
boundaries, and they shall further disclose any large personal
financial/investment positions,the performance of which could be related
to the performance of positions in OCSD's portfolio.
Page 3 443
Page 4 of 13
Return to Mends Report
7.0 Authorized Financial Dealers and Institutions:
7.1 For investment transactions conducted by OCSD internal staff,the
Treasurer will maintain a list of financial institutions authorized to provide
investment services to OCSD, including "primary"or regional dealers that
qualify under Securities and Exchange Commission Rule 15C3-1 (Uniform
Net Capital rule), and Federal or State of California chartered banks. No
public deposit shall be made except in a qualified public depository as
established by State law.
All financial institutions which desire to become qualified bidders for
investment transactions with OCSD must supply the following for
evaluation by the Treasurer:
7.1.1. Audited financial statements for the institution's three(3)most
recent fiscal years.
7.1.2. A statement, in the format prescribed by the Government
Finance Officers Association (GFOA),certifying that the institution has
reviewed OCSD's Investment Policy and that all securities offered to the
Districts shall comply fully and in every instance with all provisions of the
California Government Code and with this Investment Policy. The current
statement is presented in Appendix"C."
7.1.3. A statement describing the regulatory status of the dealer, and
the background and expertise of the dealer's representatives.
Selection of financial institutions, brokeddealers, and banks authorized to
engage in transactions with OCSD shall be made through a competitive
process. An annual review of the financial condition of qualified
institutions will be conducted by the Treasurer.
7.2 Selection of broker/dealers used by external investment advisors retained
by OCSD, shall be in compliance with contract provisions between OCSD
and any external investment advisors, and shall be in substantially the
following form:
Use of Securities Brokers: Neither the Investment Advisor nor any parent,
subsidiary or related firm shall act as a securities broker with respect to
any purchases or sales of securities which may be made on behalf of
OCSD, provided that this limitation shall not prevent the Investment
Advisor from utilizing the services of a securities broker which is a parent,
subsidiary or related firm, provided such broker effects transactions on a
"cost only"or"nonprofit"basis to itself and provides competitive execution.
The Investment Advisor shall provide the Districts with a list of suitable
independent brokerage firms(including names and addresses)meeting
the requirements of Government Code Section 53601.5, and, unless
otherwise directed by OCSD, the Investment Advisor may utilize the
Page 5 ef-03
service of any of such independent securities brokerage firms it deems
appropriate to the extent that such firms are competitive with respect to
price of services and execution.
8.0 Authorized and Suitable Investments:
All investments shall be made in accordance with the California Government Code
including Sections 16429.1 of seq., 53600 of seq.,and 53684, and as described within
this Investment Policy. Permitted investments under this Policy shall include:
8.1 Securities, obligations, participations, or other instruments of, or
issued by, or fully guaranteed as to principal and interest by the US
Government, a federal agency,or a US Government-sponsored
enterprise pursuant to Section 53601 (at)of the California Government
Code. US Treasury securities must make up at least 10%of the portfolio.
investment n mortgage backed bend� and rMOs s not governed by th a
SeGt on 8.1, even fsuGh bonds are ssued by age no as of the I IS
G.".FRM.Rt Se. SeGt.R 8.2 for GO Rd t ORS of purchase of mortgage
8.2 ISupranational Obligations issued or unconditionally guaranteed by the
International Bank for Reconstruction and Development. International
Finance Corporation. or Inter-American Development Bank. Securities
must be eligible for purchase in the United States and be US dollar
denominated senior unsecured unsubordinated obligations, with a
maximum maturity of five years. Securities eligible for purchase under this
section must be rated "AA"or better by a Nationally Recognized Statistical
Ratm O anization NRSRO and shall not exceed 30%of the total
O Cpnmeart INDl]:Efl n 1/1/15,Msse are
C=:. In CGc Sedon 535011yI.
8.23 Mortgage 4mckedpass-through securities collateralized
mortgage obligation, mortgage-backed or other Day-through bond,
equipment lease-backed certificate, consumer receivable pass-
through certificate,or consumer receivable-backed bond of a
maximum maturity of five years. Securities eligible for investment under
this subdivision shall be issued by an issuer having an"A"or higher rating
for the issuer's debt as provided by an NRSRO and rated in a rating
category WAN"or its eauivalenl or better by an NRSRO. Purchase of
securities
authorized by this subdivision may not exceed 20 percent of the agency's
surplus moneys that may be invested Dursuant to this section.issued-ban agency of the US Government, which are backed by peels 9
^•o ^o. Purchase of mortgage derivatives, which include
interest-only payments(IOs)and principal-only payments (POs); inverse
Floaters, and RE-REMICs (Real Estate Mortgage Investment Conduits), is
hereby prohibited.
Page 6 ef-13
Return to Mende Report
8.34 Commercial paper of"prime"quality and sated"Pi"by Meady's Invests
(S&Pjof the highest ranking or of the highest letter and number rating as
provided by an NRSRO, and issued by a domestic corporation organized
and operating in the United States with assets in excess of$500 million
and having a rating of"A"or better on its long-tens debt as provided by
AAeedy's-eeSBRan NRSRO. Purchases of eligible commercial paper may
not exceed 270 days to maturity from the date of purchase. Purchases of
commercial paper shall not exceed 4525%of the market value of the
portfolio, except that^ max mum of 25% of the MaFk^t ^ „of the
portfol o may be nvested n oommerG al paper, so long as the average
matUFty of a" GommeFo al paper n the portal a does not exceed 31 days.
No more than 5%of the market value of the portfolio, or 10%of the
issuer's outstanding paper, may be invested in commercial paper issued
by any one(1)eligible corporation.
8.45 Banker's acceptances issued by institutions,the short-term obligations of
which are rated of the highest ranking or the highest letter and number
ratina as provided by an NRSRO^ n �
by S&P provided that: (a)the acceptance is eligible for purchase by the
Federal Reserve System; (b)the maturity does not exceed 180 days; (c)
no more than 40%of the total portfolio may be invested in banker's
acceptances;and (d)no more than 30%of the total portfolio may be
invested in the banker's acceptances of any one(1)commercial bank.
8.6 Medium term(or corporate) notes of a maximum of five(5)years
maturity issued by corporations organized and operating within the United
States, or issued by depository institutions licensed by the United States,
or any state,and operating within the United States with assets in excess
of$500 million, and which is rated in a rating category of"A"or better on
its long-term debt as provided by Moody's-gr-S&an NRSROR. Notes
better by Mood)4s, OF"A"OF better by S&P. if, at the t me Of PURGhase, an
agency,the note shall also be rated at least"BIBB" by the other rat ng
agency. If, after purchase,the rating of an eligible note n a-rating
^^t^_^^.^."N'eF be4^- :^ .^...^gaaded t^•1380 ^falls below the minimum
rating category stipulated above,the external investment advisor shall
notify the District of the downgrade,and shall present an analysis and
recommendations as to the disposition of the note consistent with the
investment objectives of this Investment Policy. TAe-abeve-resHistiens
88uer'and do not extend to the parent Gorporat on o
:�-^• �" ^^ ^�No more than 3530%of the portfolio may be invested in
beg medium term notes,
^tV,^"^v. ^^t'^^^ ^^d..^^.'v.^d '^ oa _ - CanmeM rND3l:stele wtle reAnu1s MTNs
V to 30%anE is nM mmdrretl wiM Mls olM1er
e ion.
8.7 Notes, bonds, or other obligations that are at all times secured by a
valid-first priority security interest in securities of the types listed by
Page 7 st43
California Government Code Section 53651 as eligible securities for the
purpose of securing local agency deposits having a market value at least
equal to that required by California Government Code Section 53652 for
the purpose of securing local agency deposits. The securities serving as
collateral shall be placed by delivery or book entry into the custody of a
trust company or the trust department of a bank that is not affiliated with
the issuer of the secured obligation, and the security interest shall be
perfected in accordance with the requirements of the Uniform Commercial
Code or federal regulations applicable to the types of securities in which
the security interest is granted.
C."ent reD31:There le ro state w e
..tdcllan an the mnceMretlan M this sec ty
8.78 Shares of mutual funds investing in securities permitted under this policy type_
and under Section 53601 (WI)of the California Government Code. Such
funds must either: (1)attain the highest ranking,or the highest letter and
numerical rating, provided by not less than two of the three largest
nationally recognized rating services; or(2)have an Investment Advisor
registered with the Securities and Exchange Commission with not less
than five(5)years of experience investing in the securities and obligations
authorized under this Policy and under California Government Code
Section 53601, and with assets under management in excess of$500
million. The purchase price of shares of beneficial interest purchased
pursuant to this policy, and the California Government Code may not
include any commission that the companies may charge, and shall not
exceed 4520%of the Districts surplus money that may be invested
pursuant
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to this section. However, no more than 10%of the District's surplus funds
may be invested in shares of beneficial interest of any one(1)mutual fund
pursuant to this section.
8.8-9 Certificates of deposit:
8.99.1 Secured(collateralized)time deposits issued by a nationally or
state-chartered bank or state or federal savings and loan association,as
defined by Section 5102 of the California Financial Code, and having a net
operating profit in the two(2)most recently completed fiscal years.
Collateral must comply with Chapter 4, Bank Deposit Law, Section 16500
at seq.,and Chapter 4.5, Savings and Loan Association and Credit Union
Deposit Law, Section 16600 at seq., of the California Government Code.
8.89.2 Negotiable certificates of deposit(NCDs) issued by a nationally
or Mate-chartered bank or state of federal savings and loan association,
as defined by Section 5102 of the California Financial Code; and which
shall have a rating of"A"or better on its long-term debt as provided by
Moedy's er-S&Pa NRSRO; or which shall have the fellewing-min mum
SheFt
eFM MtqRgS by at least
\]oM♦ ,"A!"for d.pos to b •S&P, o comparably rate I
iohest letter and
number rating for deposits as provided by a NRSRO; or as otherwise
approved by the District's Board of Directors. No more than 30%of the
portfolio may be invested in securities ousuant to this section.
8.99.3 To be eligible to receive local agency money, a bank, savings
association,federal association, or federally insured individual loan
company shall have received an overall rating of not less than
'satisfactory'in its most recent evaluation by the appropriate federal
financial supervisorial agency of its record of meeting the credit needs of
California's communities, including low and moderate income
neighborhoods, pursuant to Section 2906 of Title 12 of the United States
Code.
8.910 Taxable or tax-exempt municipal bonds issued by any of the 50 United
States. Such securities must be rated"""'eF h" heF by""--"•'S, -•
""A"-or higher by SSPa NRSRO; or as otherwise approved by the
Districts' Board of Directors.
8.4011 The State of California Local Agency Investment Fund (LAIF).
The LAW is an investment alternative for California's local governments
and special districts managed by the State Treasurers Office. LAIF is
more fully described in the Glossary(See Appendix"H.") The District
shall use LAIF as a short-term cash management facility. Investment of
District funds in LAIF shall be subject to investigation and due diligence
prior to investing,and on a continual basis to a level of review pursuant to
Section 3.0, Standard of Prudence,of this Policy. See Appendix"D"for
Page 9 ef79
investment pool questionnaire.
8.a412 The Orange County Treasurer's Money Market Commingled
Investment Pool(OCCIP). The OCCIP is a money market investment
pool managed by the Orange County Treasurer's Office. OCCIP is more
fully described in the Glossary. (See Appendix 'H.") The District has no
funds invested in OCCIP at this time. Investment of District funds in
OCCIP would be subject to investigation and due diligence prior to
investing,and on a continual basis to a level of review pursuant to Section
3.0, Standard of Prudence, of this Policy.
'-IS; Government wh& W, backed by pea's of mortgages guaranteed b
asset backed qpcurit as rated"Ass" by Moody's and"AAA"by S&P.
Select on of mortgage deFVat Yes, wh Gh n6lude meFest only payments
REMICS (Real Estate Mortgage investment Gondu ts), a thereby
net exceed 20% of the tota' Long Term Operat ng Man as paFffol a.
8.13 Repurchase agreements provided that:
8.13.1 All repurchase agreements shall be collateralized with
securities eligible for purchase under this Policy. In order to anticipate
market changes and to provide a level of security for all repurchase
agreement transactions,collateralization shall be maintained at a level of
at least 102%of the market value of the repurchase agreements, and
shall be adjusted no less than weekly.
8.13.2 All repurchase agreements must be the subject of a Master
Repurchase Agreement between OCSD and the provider of the
repurchase agreement. The Master Repurchase Agreement shall be
substantially in the form developed by The Bond Market Association.
8.14 Reverse repurchase agreements provided that:
8.14.1 No more than five percent(5%)of OCSD's portfolio shall be
invested in reverse repurchase agreements, and there shall be no long-
term reverse repurchase agreements unless otherwise authorized by the
Districts' Board of Directors.
8.14.2 The maximum maturity of reverse repurchase agreements shall
be ninety(90)days.
8.14.3 Reverse repurchase agreements shall mature on the exact
Page 10 ef-1S
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dale of a known cash flow which will be unconditionally available to repay
the maturing reverse repurchase agreement.
8.14.4 Proceeds of reverse repurchase agreements shall be used
solely to supplement portfolio income or to provide portfolio liquidity, and
shall not be used to speculate on market movements.
8.14.5 All reverse repurchase agreements must be the subject of a
Master Repurchase Agreement between OCSD and the provider of the
reverse repurchase agreement. The Master Repurchase Agreement shall
be substantially in the form developed by The Bond Market Association.
8.15 Sales of OCSD-owned securities in the secondary market may incur
losses in order to improve the risk or return characteristics of the portfolio,
to prevent anticipated further erosion of principal, or when trading for
securities that result in an expected net economic gain to OCSD.
8.16 If securities owned by the OCSD are downgraded by^'ham..,.,Meedy's ar
SBP--tea-level-below the quality required by this Investment Policy, it shall
be OCSD's policy to review the credit situation and make a determination
as to whether to sell or retain such securities in the portfolio. If a decision
is made to retain the downgraded securities in the portfolio,their presence
in the portfolio will be monitored and reported monthly to the OCSD
General Manager,the Administration Committee and Board of Directors.
9.0 Collateralization:
Generally,the value to secure deposits under this Policy shall comply with Section
53652 of the California Government Code. Collateralization will be required for secured
time deposits,as more fully described in Section 8.8.1; and repurchase agreements, as
more fully described in Section 8.13.1. Collateral will always be held by an independent
third-party, as more fully described in Section 10.1. The right of collateral substitution is
granted.
10.0 Safekeeoina and Custody:
10.1 All securities transactions, including collateral for repurchase agreements,
entered into by,or on behalf of OCSD,shall be conducted on a
delivery-versus-payment(DVP)basis. Securities will be held by
OCSD's third-party custodian bank,which shall be selected through a
competitive process,or that agent's representative,or in the agent's
account at the Federal Reserve Bank, or within clearing corporations in
the U.S., and evidenced by book entry statements.
Page 11 of 13
11.0 Diversification:
OCSD will diversify its investments by security type, issuer,and financial institution in
accordance with the following:
11.1 There is no limit on investment in securities issued by or guaranteed by
the full faith and credit of the U.S.government.
11.2 No more than 20%of the portfolio may be invested in securities of a single
agency of the U.S.government,which does not provide the full faith and
credit of the U.S.government.
11.3 No more than 5%of the portfolio may be invested in securities of any one
issuer,other than the U.S. government or its agencies. Investment in
mutual funds is not governed by this Section 11.3. See Section 11.8 for
conditions of purchase of mutual funds.
11.4 No individual holding shall constitute more than 5%of the total debt
outstanding of any issuer.
11.5 No more than 40%of the portfolio may be invested in banker's
acceptances.
11.6 No more than 4525%of the portfolio may be invested in commercial
paper, except that 25% of the portfolio may be so nested so long s the
average matuFty of all summers al paper n the portfal a does not exceed
31 days.
11.7 No more than 30%of the portfolio may be invested in medium-term
(corporate)notes.
11.8 No more than 4520%of the portfolio may be invested in mutual funds.
However, no more than 10%of the District's portfolio may be invested in
shares of beneficial interest of any one(1) mutual fund.
11.9 No more than 30%of the portfolio may be invested in negotiable
certificates of deposit.
11.10 No more than 10%of the portfolio may be invested in eligible municipal
bonds.
11.11 No more than 20%of the Long Term Operating Monies portfolio may be
invested in a combination of mortgage-backed securities, CMOs and
asset-backed securities.
Board approval (author zed by Board M Puts Order, jaRuary 22, 1997),
and may not be Purchased by the D StF GVS staff7
Page 12 of 13
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11.12 No more than the lesser of 15%of the portfolio or the statutory maximum
may be invested in LAIR
11.13 No more than 15%of the portfolio may be invested in the Orange County
Investment Pool.
11.14 No more than 20%of the portfolio may be invested in repurchase
agreements.
11.15 No more than 5%of the portfolio may be invested in reverse repurchase
agreements.
12.0 Maximum Maturities:
To the extent possible, OCSD will attempt to match its investments with reasonably
anticipated cash flow requirements. The Treasurer shall develop a five-year cash flow
forecast, which shall be updated quarterly. Based on this forecast, the Treasurer shall
designate,from time-to-time, the amounts to be allocated to the investment portfolio.
OCSD monies invested in accordance with this Policy are divided into two(2)
categories:
12.1 Liquid Operating Monies. Funds needed for current operating and
capital expenditures are known as Liquid Operating Monies.
12.1.1 The maximum final staled maturity of individual securities in the
Liquid Operating Monies account portfolio shall be one(1)year from the
date of purchasesettlement.
12.1.2 The average duration of the Liquid Operating Monies account
portfolio shall be recommended by the Treasurer based on the Districts'
cash flow requirements, but may never exceed 180 days.
12.2 Long Term Operating Monies. Funds needed for longer term purposes
are known as the Long Term Operating Monies.
12.2.1 Except for the purchase of seount as by the D stnGt's extemal
money manager, PJM693The maximum final stated maturity of individual
securities in the Long Term Operating Monies account portfolio shall be
five(5)years from the date of purchasesettlement. PIMCO may purchase
these wh oh may have a stated matUF ty ef mene than five (5)years from
FaqU below,.
12.2.2 The duration of the Long Term Operating Monies account
portfolio shall be recommended by the Treasurer based on the Districts'
five-year cash flow forecast, but may never exceed 60 months.
12.2.3 The duration of the Long Term Operating Monies account
Page 13 ef-1S
portfolio shall never exceed 120%of the duration as established in
accordance with Section 12.2.2.
12.2.4 The duration of the Long Tenn Operating Monies account
portfolio shall never be less than 80%of the duration as established in
accordance with Section 12.2.2
13.0 Internal Control:
13.1 The Treasurer shall establish an annual process of independent review by
an external auditor. This review will provide internal control by assuring
compliance with policies and procedures. The current treasury
management procedures are presented in Appendix"B"
14.0 Performance Objectives and Benchmarks:
14.1 Overall objective. The investment portfolio of OCSD shall be designed
with the overall objective of obtaining a rate of return throughout budgetary
and economic cycles,commensurate with investment risk constraints and
reasonably anticipated cash flow needs.
14.2 The Liquid Operating Monies. The investment performance objective
for the Liquid Operating Monies shall be to earn a total rate of return over
a market cycle which exceeds the return on a market index approved by
the Administration Committee, and by the District's Board of Directors,
when the duration of the portfolio is established.This market index is more
fully described in Board Resolution No. OCSD-00-18 14 XX(see
Appendix"E").
14.3 The Long Term Operating Monies. The investment performance
objective for the Long Term Operating Monies shall be to earn a total rate
of return over a market cycle which exceeds the return on a market index
selected by the Administration Committee and approved by the Districts'
Board of Directors,when the duration of the portfolio is established. This
market index is more fully described in Board Resolution No. OCSD-00-16
1414XX(See Appendix"E").
15.0 Reporting:
15.1 Quarterly investment reports shall be submitted by the Treasurer to the
Administration Committee which shall forward the reports to the District's
Board of Directors.The quarterly reports shall be submitted to the
Administration Committee within 30 days of the end of the month in
accordance with California Government Code Sections 53607,53646, and
this Investment Policy. The quarterly reports shall provide clear and
concise status information on the District's portfolios at the end of each
reporting period, including performance measures using the benchmarks
described in Section 14.0 of this Investment Policy. Sample quarterly
reports are presented in Appendix"F."These reports shall contain listings
Page 14 of 13
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of individual securities held at the end of each reporting period, and shall
disclose, at a minimum,the following information about the risk
characteristics of OCSD's portfolio:
15.1.1 Cost and accurate and complete market value of the portfolio.
15.1.2 Modified duration of the portfolio compared to Benchmark.
15.1.3 Dollar change in value of the portfolio for a one-percent(I )
change in interest rates.
15.1.4 Percent of portfolio invested in reverse repurchase
agreements,and a schedule which matches the maturity of such reverse
repurchase agreements with the cash Flows which are available to repay
them at maturity.
15.1.5 For the Liquid Operating Monies account only, the percent of
portfolio maturing within 90 days.
15.1.6 Average portfolio credit quality.
15.1.7 Percent of portfolio with credit ratings below"A"by any rating
agency,and a description of such securities.
15.1.8 Stale that all investments are in compliance with this policy and
the California Government Code, or provide a listing of any transactions or
holdings which do not comply with this policy or with the California
Government Code.
15.1.9 Time-weighted total rate of return for the portfolio for the prior
three months,twelve months,year to date, and since inception compared
to the Benchmark returns for the same periods.
15.1.10 State that sufficient funds are available for OCSD to meet its
operating expenditure requirements for the next six months,or if not, state
the reasons for the shortfall.
15.2 OCSD's Treasurer shall meet quarterly with the Administration Committee
to review investment performance, proposed strategies and compliance
with this Investment Policy. External investment advisors may be required
to attend said meetings at the discretion of the Chairman of the
Administration Committee.
16.0 Investment Policy Adoption and Revision:
16.1 The Investment Policy of OCSD shall be reviewed by the Administration
Committee and shall be adopted by resolution of the Board of Directors of
OCSD. The Policy shall be reviewed on an annual basis in accordance
with California Government Code Section 53646, and this Investment
Page 15 of-13
Policy, by the Administration Committee,which shall recommend
revisions,as appropriate, to the Board of Directors. Any modifications
made thereto shall be approved by the Board of Directors.
16.2 The Administration Committee shall serve as the oversight committee for
the District's Investment program and shall adopt guidelines for the
ongoing review of duration, quality and liquidity of the District's portfolio.
Page 16 of 13
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APPENDIX "A"
SUMMARY OF INVESTMENT AUTHORIZATION
INTERNAL AND EXTERNAL MANAGERS
SHORT TERM OPERATING FUND
INVESTMENT INTERNAL EXTERNAL
U.S. Treasuries OK OK
Federal Agencies Fixed coupon,fixed mat. OK
Supranationals NO NOOK
Mortgage-backed NO NO
Commercial paper OK OK
Banker's Accept. OK OK
Medium Term Notes Fixed coupon,fixed mat.* OK
Mutual Funds Money Market Only*` Money Market Only
Negotiable CDs Fixed coupon,fixed mat.* OK
Municipal Bonds OK* NO
LAIF OK NO
OCIP OK NO
CMOs NO 490K
Asset-backed NO NOOK
Repurchase Agree. OK OK
Reverse Repos OK* OK
LONG TERM OPERATING PORTFOLIO
INVESTMENT INTERNAL EXTERNAL
U.S.Treasuries OK OK
Federal Agencies Fixed coupon,fixed mat. OK
Supranationals NO OK
Mortgage-backed NO OK
Commercial Paper OK OK
Banker's Acceptances OK OK
Medium Term Notes Fixed coupon,fixed mat` OK
Mutual Funds Money Market Only** OK
Negotiable CDs Fixed coupon,fixed mat.* OK
Municipal Bonds OK* OK
LAW OK NO
OCIP OK NO
CMOs NO With-Beard AppfevalOK
Asset-backed NO With-Bpard-ApprevalOK
Repurchase Agree. OK OK
Reverse Repos OK* OK
*With prior approval of the Administation Committee.
"Using financial institutions approwd by the Atlministnation Committee.
x:w.vn..eaiamnMwe.nconm�.w.+ro�.wcnn�.nm.mwiry eoo�a�..ea,
EXHIBIT "B" Return W Aaenda Reo.,
ORANGE COUNTY SANTIATION DISTRICT
PERFORMANCE MONITORING & REPORTING SUMMARY
FOR THE
DISTRICT'S INVESTMENT PROGRAM
POLICY
REFERENCE PERFORMANCE CHARACTERISTIC REPORTING PARTY*
Chandler BNY Callan
15.1.1 Cost and market value of the portfolio(monthly mark-to-market). M, Q M, Q Q
15.1.2 Modified duration of the portfolio compared to benchmark. M, Q Q
15.1.3 Dollar change in value of the portfolio for a 1%change in interest rate. M, Q Q
15.1.4 Percent of portfolio invested in reverse repurchase agreements, and a schedule which M, Q
matches the maturity of such reverse repurchase agreements with the cash flows which
are available to repay them at maturity.
15.1.5 For the Liquid Operating Monies account only,the percent of portfolio maturing within 90 M, Q Q
days.
15.1.6 Average portfolio credit quality. M, Q Q
15.1.7 Percent of portfolio with credit ratings below"A" by any rating agency, and a description M, Q Q
of such securities.
15.1.8 Listing of any transaction or holdings which do not comply with this policy or with the M, Q
California Government Code.
15.1.9 Time-weighted total rate of return for the portfolio forthe priorthree months,twelve M, Q Q
months, year-to-date, and since inception compared to the benchmark returns for the
same periods.
ADDL** Comparison of portfolio performance to market index benchmark. M, Q Q
ADDL** Comparison of Manager's performance to peer group benchmark. Q
ADDL** Monitoring of organizational and structural changes of investment management firm. Q
ADDL** Audit portfolios for compliance with investment policy guidelines. Q
15.1.10 OCSD will report if sufficient funds are available for it to meet operating expenditure requirements for the next six months, or if
not, state the reason for the shortfall.
Notes
*M = Monthly
*Q =Quarterly
**ADDL= Monitoring of Additional Performance Characteristics
EXHIBIT "B"
Calendar Year 2015 Performance Monitoring & Reporting Schedule
For the Administration Committee The Quarterly Investment
and Board of Directors meetings of: Management Program Report to be
resented for the period of:
January 2015 Board only)
February Oct— Dec 2014
March
April
May Jan — March 2015
June
Jul
August Board only) Aril —June 2015
September
October
November Jul — Sept 2015
December
Return to Mende Report
RESOLUTION NO. OCSD 14-XX
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE
COUNTY SANITATION DISTRICT, AUTHORIZING THE DISTRICT'S
TREASURER TO INVEST AND/OR REINVEST DISTRICT'S FUNDS,
AND ADOPTING DISTRICT'S INVESTMENT POLICY STATEMENT
AND PERFORMANCE BENCHMARKS; AND REPEALING
RESOLUTION NO. OCSD 14-10
WHEREAS, on July 23, 2014, the Board of Directors adopted Resolution
No. 00SD 14-10, readopting the District's Investment Policy Statement, and
establishing specific performance benchmarks and objectives, together with a schedule
of frequency of investment performance reports; and
WHEREAS, pursuant to California Government Code Section 53607, the Board
of Directors may delegate authority to invest and/or reinvest District's funds to the
Treasurer for a one-year period; and
WHEREAS, pursuant to California Government Code Section 53646, the District
is required to review its Investment Policy annually and readopt its Policy at a public
meeting, which Policy will establish specific performance benchmarks and objectives,
and specific monitoring and reports.
NOW, THEREFORE, the Board of Directors of the Orange County Sanitation
District, DOES HEREBY RESOLVE, DETERMINE AND ORDER:
Section 1: That the authority of the Board of Directors to invest or reinvest
District's surplus funds, or to sell or exchange securities so purchased, or to deposit for
safekeeping the funds and investments of the Districts with depositories, as provided for
in California Government Code Sections 53608 and 53630, is hereby delegated to the
District's Treasurer for a one-year period commencing on the date this Resolution is
adopted, as authorized by California Government Code Section 53607.
OCSD 14-XX-1
Section 2: That the Board of Directors hereby adopts the Investment Policy
Statement of the Orange County Sanitation District, as set forth in Exhibit "A", attached
hereto and incorporated herein by reference.
Section 3: That the Board of Directors hereby adopts the following specific
performance benchmarks for their two investment funds in accordance with Section
14.0 of the District's Investment Policy:
LIQUID OPERATING MONIES: The Short-Terre Operating Fund will be
compared to the three-month T-Bill rate, and the Callan Active Cash Flow
Income Style Group. The Callan Active Cash Flow Income Style Group
represents a peer group of managers who operate with a maximum maturity of
one year.
LONG-TERM OPERATING MONIES: The Long-Term Operating Fund will be
compared to the Merrill Lynch Government and Corporate One-to-Five Year
Maturity Index and to the Callan Defensive Fixed Income Style Group.
Section 4: That the Board of Directors hereby adopts a performance
monitoring and reporting schedule, as required by Section 15.0 of the District's
Investment Policy, which schedule is attached hereto as Exhibit "B", and incorporated
herein by reference.
OCSD 14-XX-2
Return to Mende Report
Section 5: That Resolution No. OCSD 14-10 is hereby repealed.
PASSED AND ADOPTED at regular meeting of the Board of Directors, Orange
County Sanitation District held December 17, 2014.
Tom Beamish
Board Chair
ATTEST:
Maria E. Ayala
Clerk of the Board
OCSD 14-XX-3
ADMINISTRATION COMMITTEE Meeting Dare To ad.of Dir.
tz/tD/ta --
AGENDA REPORT Item Number Item Number
e
Orange County Sanitation District
FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Director of Finance and Administrative Services
SUBJECT: GEOGRAPHIC INFORMATION SYSTEMS (GIS)AT OCSD
GENERAL MANAGER'S RECOMMENDATION
Information Only.
SUMMARY
Geographic Information Systems (GIS) technologies are critical tools for improving the
quality, accuracy, efficiency, and responsiveness of services provided by the Orange
County Sanitation District (OCSD).
Staff will provide a presentation on GIS data, how it is stored: Points (e.g., addresses,
locations, etc.), Lines (e.g., streets, highways, sewers, etc.), Polygons (e.g., areas,
political jurisdictions, etc.) and Images that can be viewed in various combinations along
with how they provide easy access to information regarding the treatment plants and
collections system.
PRIOR COMMITTEE/BOARD ACTIONS
N/A
ADDITIONAL INFORMATION
N/A
CEQA
N/A
BUDGET/PURCHASING ORDINANCE COMPLIANCE
N/A
ATTACHMENT
N/A
Page 1 of 1
ORANGE COUNTY SANITATION DISTRICT
Agenda
Terminology Glossary
Glossary of Terms and Abbreviations
AQMD Air Quality Management District
ASCE American Society of Civil Engineers
BOD Biochemical Oxygen Demand
CARB California Air Resources Board
CASA California Association of Sanitation Agencies
CCTV Closed Circuit Television
CEQA California Environmental Quality Act
CRWQCB California Regional Water Quality Control Board
CWA Clean Water Act
CWEA California Water Environment Association
EIR Environmental Impact Report
EMT Executive Management Team
EPA U.S. Environmental Protection Agency
FOG Fats, Oils, and Grease
FSSD Facilities Support Services Department
gpd Gallons per day
GWR System Groundwater Replenishment System (also called GWRS)
ICS Incident Command System
IERP Integrated Emergency Control Plan
LOS Level of Service
MGD Million gallons per day
NACWA National Association of Clean Water Agencies
NPDES National Pollutant Discharge Elimination System
NWRI National Water Research Institute
O&M Operations and Maintenance
OCCOG Orange County Council of Governments
OCHCA Orange County Health Care Agency
OCSD Orange County Sanitation District
OCWD Orange County Water District
GOBS Ocean Outfall Booster Station
OSHA Occupational Safety and Health Administration
POTW Publicly Owned Treatment Works
ppm Parts per million
RFP Request For Proposal
RWQCB Regional Water Quality Control Board
SARFPA Santa Ana River Flood Protection Agency
Glossary of Terms and Abbreviations
SARI Santa Ana River Inceptor
SARWQCB Santa Ana Regional Water Quality Control Board
SAWPA Santa Ana Watershed Project Authority
SCADA Supervisory Control and Data Acquisition system
SCAP Southern California Alliance of Publicly Owned Treatment Works
SCAQMD South Coast Air Quality Management District
SOCWA South Orange County Wastewater Authority
SSMP Sanitary Sewer Management Plan
SSO Sanitary Sewer Overflow
SWRCB State Water Resources Control Board
TDS Total Dissolved Solids
TMDL Total Maximum Daily Load
TSS Total Suspended Solids
WDR Waste Discharge Requirements
WEF Water Environment Federation
WERF Water Environment Research Foundation
Activated-sludge process — A secondary biological wastewater treatment process where bacteria
reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved
nutrients in the wastewater.
Benthos— The community of organisms, such as sea stars, worms and shrimp, which live on, in, or
near the seabed, also know as the benthic zone.
Biochemical Oxygen Demand (BOD)—The amount of oxygen used when organic matter undergoes
decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in
water.
Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the
wastewater treatment process. This high-quality product can be recycled as a soil amendment on
farm land or further processed as an earth-like product for commercial and home gardens to improve
and maintain fertile soil and stimulate plant growth.
Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets.
Also includes treatment improvements, additional capacity, and projects for the support facilities.
Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also
occasionally found elsewhere used as indicators of sewage pollution. E. coli are the most common
bacteria in wastewater.
Collections system — In wastewater, it is the system of typically underground pipes that receive and
convey sanitary wastewater or storm water.
Certificate of Participation (COP) —A type of financing where an investor purchases a share of the
lease revenues of a program rather than the bond being secured by those revenues.
Glossary of Terms and Abbreviations
Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic
wastewater contaminants.
Dilution to Threshold (D!f) — the dilution at which the majority of the people detect the odor
becomes the DrT for that air sample.
Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane,
nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse
effect").
Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively
responds to Southern California's current and future water needs. This joint project between the
Orange County Water District and the Orange County Sanitation District provides 70 million gallons a
day of drinking quality water to replenish the local groundwater supply.
Levels of Service (LOS)—Goals to support environmental and public expectations for performance.
NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been
found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide
with extra ultra-violet treatment.
National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water
Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S.
Environmental Protection Agency (EPA). NBP is committed to developing and advancing
environmentally sound and sustainable biosolids management practices that go beyond regulatory
compliance and promote public participation in order to enhance the credibility of local agency
biosolids programs and improved communications that lead to public acceptance.
Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility.
Publicly-owned Treatment Works (POTW)— Municipal wastewater treatment plant.
Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million
gallons per day (MGD) of non-reclaimable wastewater from the upper Santa Ana River basin to the
ocean for disposal, after treatment.
Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial
wastewater. Combined sewers carry both wastewater and urban run-off.
South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that
develops plans and regulations designed to achieve public health standards by reducing emissions
from business and industry.
Secondary treatment — Biological wastewater treatment, particularly the activated-sludge process,
where bacteria and other microorganisms consume dissolved nutrients in wastewater.
Sludge—Untreated solid material created by the treatment of wastewater.
Total suspended solids (TSS)—The amount of solids floating and in suspension in wastewater.
Trickling filter — A biological secondary treatment process in which bacteria and other
microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in
wastewater as it trickles over them.
Glossary of Terms and Abbreviations
Urban runoff — Water from city streets and domestic properties that carry pollutants into the storm
drains, rivers, lakes, and oceans.
Wastewater—Any water that enters the sanitary sewer.
Watershed —A land area from which water drains to a particular water body. OCSD's service area is
in the Santa Ana River Watershed.