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Home My WebLink About09-25-2013 Board Agenda Packet Wednesday, September 25, 2013 Orange County Sanitation District 6:30 P.M. Regular Meeting of the Board Room Board of Directors 10844 Ellis Avenue Fountain Valley, CA 92708 it (714)593-7130 AGENDA INVOCATION AND PLEDGE OF ALLEGIANCE: (Troy Edgar, City of Los Alamitos) ROLL CALL & DECLARATION OF QUORUM: PUBLIC COMMENTS: If you wish to speak, please complete a Speaker's Form (located at the table outside of the Board Room) and give it to the Clerk of the Board. Speakers are requested to limit comments to three minutes. REPORTS: The Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Directors. These reports are for information only and require no action by the Directors. CLAIMS: DIRECTORS: Pursuant to Government Code Section 84308, you are required to disclose any campaign contribution greater than $250 received in the past twelve months from any party seeking a contract with OCSD. This requires that you identify the contributor by name. Further, you may not participate in the decision making process to award a contract to such party. For reference, you are directed to the Register of Warrants as to all current contractors vendors with OCSD. For the specifics of Government Code Section 84308,please see your Director's Handbook or call the office of General Counsel. 1. Ratify payment of claims of the District, by roll call vote, as follows: Claims Paid for the Period Ending: 08/15/13 08/31/13 Totals $7,238,119.99 $9,244,149.29 09125A3 OCSD Board of Directors Agenda Page 1 of 7 CONSENT CALENDAR: Consent Calendar Items are considered to be routine and will be enacted, by the Board of Directors, after one motion, without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 2. A. Approve minutes for the Regular Board Meeting held on August 28, 2013; and B. Approve minutes for the Special Board Meeting held on September 11, 2013. 3. A. Receive and file the General Manager's FY 2012 — 2013 Work Plan Year- End Report; and B. Approve the General Manager's FY 2013—2014 Work Plan 4. A. Approve a decrease in the budget for Plant Water System Rehabilitation at Plant No.1, Project No. P1-112, by $475,000 for a total project budget of$9,094,000; and B. Approve an increase in the budget for Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101, by $475,000 for a total project budget of$4,484,000; and C. Approve plans and specifications for Plant Water System Rehabilitation at Plant No. 1, Project No.P1-112, and Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101, on file at the Office of the Clerk of the Board; and D. Approve Addendum Nos. 1, 2, and 3 to the plans and specifications; and E. Receive and file bid tabulation and recommendation; and F. Award a construction contract to W. M. Lyles Co. for Plant Water System Rehabilitation at Plant No. 1, Project No. P1-112, and Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101, for a total amount not to exceed $6,038,000; and G. Approve a contingency of $374,300 (10%) for Plant Water System Rehabilitation at Plant No. 1, Project No. P1-112; and H. Approve a contingency of $275,400 (12%) for Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101. STEERING COMMITTEE: 5. Approve minutes for the Steering Committee Meeting held on August 28, 2013. 09125 13 OCSD Board of Directors Agenda Page 2 of 7 OPERATIONS COMMITTEE: 6. Approve Minutes of September 4, 2013, Operations Committee meeting. 7. A. Approve a Professional Services Agreement with Black & Veatch Corporation for providing Gas Facilities Study for Plants 1 & 2, Project No. SP-141, for an amount not to exceed $665,021; and B. Approve a contingency of$13,306 (2%) 8. A. Approve a Professional Consultant Services Agreement with Carollo Engineers to provide construction support services for Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101, for an amount not to exceed $225,108; and B. Approve a contingency of$22,511 (10%). ADMINISTRATION COMMITTEE: 9. Approve Minutes of the September 11, 2013 Administration Committee Meeting. 10. Receive and file report of reimbursements to Board Members and Staff per Government Code 53065.5 for the period July 1, 2012 through June 30, 2013. 11. A. Approve the Electronic Recording Memorandum of Understanding (MOU) with the County of Orange, Clerk-Recorder's office; and B. Authorize the Clerk of the Board, or her designee, to transmit/record any and all required Orange County Sanitation District real property documents in an electronic format. 12. A. Adopt Resolution No. OCSD 13-14, 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 2013A, 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; and B. That the Orange County Sanitation District Financing Corporation approve the documents supporting and authorizing the Notes in an aggregate amount not to exceed $135,000,000. 09125 13 OCSD Board of Directors Agenda Page 3 of 7 13. A. Approve a Professional Services Agreement with enfoTech & Consulting, Inc., Specification CS-2012-52513D, for Implementation of a Commercial- off-the-shelf Pretreatment Information Management System, for an amount not to exceed $749,993; and B. Approve first year technical support and maintenance for the amount of $65,266; and C. Approve a contingency of $81,526 (10%). ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION The members of the Orange County Sanitation District Board of Directors are each being compensated $212.50 for the Board Meeting; there is no additional compensation for the Financing Corporation Meeting. CALL TO ORDER: Board of Directors, Orange County Sanitation District Financing Corporation. ROLL CALL: APPROVAL OF MINUTES: If no corrections or amendments are made, the minutes for the meeting held on September 26, 2012, will be deemed approved and be so ordered by the Chair. ACTION ITEM: Adopt Resolution No. FC-20, 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 Revenue Refunding Certificate Anticipation Notes, Series 2013a, Authorizing the Execution and Delivery of Such Notes Evidencing Principal in an Aggregate Amount of not to Exceed $135,000,000 and Authorizing the Execution of Other Necessary Documents and Related Actions. (See Agenda Report for Item No. 12) Adjourn, Board of Directors, Orange County Sanitation District Financing Corporation. 09125 13 OCSD Board of Directors Agenda Page 4 of 7 Reconvene, Board of Directors, Orange County Sanitation District. LEGISLATIVE AND PUBLIC AFFAIRS SPECIAL COMMITTEE: 14. Receive and file the minutes of the September 9, 2013 meeting of the Legislative and Public Affairs Special Committee. 15. Legislative and Public Affairs Special Committee Update (Information Item) CLOSED SESSION: During the course of conducting the business set forth on this agenda as a regular meeting of the Board, the Chair may convene the Board in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employment actions or negotiations with employee representatives;or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Board during a permitted closed session and are not available for public inspection. At such time as the Board takes final action on any of these subjects, the minutes will reflect all required disclosures of information. Convene in closed session. (A) CONFERENCE WITH LABOR NEGOTIATORS (Government Code Section 54967.6) Agency Designated Representatives: James D. Herberg, General Manager, Jeff Reed, Director of Human Resources, and James D. Ruth, Chief Negotiator Employee Organizations: Supervisor Group and Professional Group (B) CONFERENCE WITH LEGAL COUNSEL RE. EXISTING LITIGATION (Government Code Section 54956.9(d)(1)) 4 cases: (1) Case: Mladen Buntich v. Orange County Sanitation District, Riverside County Superior Court, Case No. RIC 1201005 (2) Case: Santa Ana Watershed Project Authority v. Orange County Sanitation District, Contractual Arbitration before Judicial Arbitration and Mediation Services, Jams Reference No. 1210030062 09/25/13 OCSD Board of Directors Agenda Page 5 of 7 (3) Case: City of Cypress, at al., v. Matosantos, at al., Sacramento Superior Court, Case No. 34-2013-80001585 (4) Case: City of Fountain Valley, at al., v. Matosantos, at al., Sacramento Superior Court, Case No. 34-2013-80001564 (C) CONFERENCE WITH LEGAL COUNSEL RE. ANTICIPATED LITIGATION (Government Code Section 54956.9(d)(4)) 2 cases: (1) Anticipation of Litigation re: SAW PA Enforcement Action /Cost Recovery Action (2) Anticipation of Litigation re: Disclosure of Information Reconvene in regular session. Consideration of action, if any, on matters considered in closed session. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: Adjourn the Board meeting until the Special Board Meeting on October 2, 2013, at 6:00 p.m. The next regular Board Meeting will be held on October 23, 2013, at 6:30 p.m. 09125 13 OCSD Board of Directors Agenda Page 6 of 7 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. Maria E.Ayala Clerk of the Board (714)593-7130 mavala(aocsd.com For any questions on the agenda,Committee members may contact staff at: General Manager Jim Herberg (714)593-7300 iherbem0ocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rghirelli(olocsd.com Director of Engineering Nick Kanetis (714)593-7310 nkanetisfgocsd.com Director of Facility Support Services Nick Amenities (714)593-7210 narhontes(clocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 Itvneraocsd.com Administrative Services Director of Human Resources Jeff Reed (714)593-7144 ireedRDocsd.com Director of Operations&Maintenance Ed Tortes 714 593-7080 etorres ocsd.com 09/2W13 OCSD Board of Directors Agenda Page 7 of 7 BOARD OF DIRECTORS Neebng Date I TOBA.Of Dir. 09/24/13 AGENDA REPORT Item Number Item N t umber Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: PAYMENT OF CLAIMS OF THE ORANGE COUNTY SANITATION DISTRICT GENERAL MANAGER'S RECOMMENDATION Ratify Payment of Claims of the District by Roll Call Vote. CONFLICT OF INTEREST NOTIFICATION Pursuant to Government Code Section 84308, you are required to disclose any campaign contribution greater than $250 received in the past twelve months from any party to a contract involving the Orange County Sanitation District. Further, you may not participate in the decision making process to award a contract to such party. For reference, you are directed to the Register of Warrants as to all current contractors/vendors with the District. In general, you must disclose the basis of the conflict by identifying the name of the firm or individual who was the contributor. For the specifics of Government Code Section 84308, please see your Director's Handbook or call the office of General Counsel. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION See attached listing. ATTACHMENTS The following attachment(s) are attached in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.com) with the complete agenda package: 1. Copies of Claims Paid reports from 8/01/13— 8/15/13 and 8/16/13— 8/31/13 Page 1 of 1 Return to Agenda Report Claims Paid From 811113 to$115/13 Vendor Warrant No. Amount Description Accounts Payable Warrants Aerotek 58356 $ 483.15 Professional ServicesRemporary Services Aomtek 58500 484.20 Professional Services/rempormy Services Ago IndusidesDBA So-Cal Besetting 58602 980.00 Street Sweeping Services Air Filtration Resources,Inc. 58501 1,019.30 Repair&Maintenance Services and/or Supplies Air Liquids America Cory. 58502 1,329.85 Laboratory Services&Supplies Air Liquids America Specialty Gases LLC U503 562.47 Laboratory Services&Supplies Air Products&Chemicals,Inc. 58357 13,362.63 Chemicals,Water/Wastawater Treatment Air Products&Chemicals,Inc. 56504 7,730.09 Chemicals,WaterMastewater Treatment Airgas Safety,Inc. 1220 8,897.45 Safety,Security,Health Equipment,Supplies,and Services Airgas USA,LLC 1221 4,307.36 Laboratory Services&Supplies All American Asphak 58338 35,340.00 Repair&Maintenance Services and/or Supplies American Concrete Institute M506 222.00 Books and Publications American Integrated Services,Inc. R359 19,605.40 Grit&Screenings Disposal American Society of Mechanical Engineers U507 147.00 Professional Orgarmattions Me rtingffamning/Membership American Water Works Assoc/Water puaR 58360 W8.00 Professional Organizations Meetingaraining/Membership/Meeting Registration Amtech Elevator Services M361 1,035.00 Miscellaneous Services Anaheim Memorial Med.Center R362 12,099.67 Reconciliation User Fee Refund Program Apex Pumping Equipment U508 8,279.84 Repair&Maintenance Services and/or Supplies AppleOne Employment Service 12M 854.43 Professional ServicesRamporary Services ApplaOne Employment Service 1222 1,199.20 Professional Services/Temporary Services Aquatic Biosystems,Inc. R509 307.50 Laboratory Services&Supplies Argus-Hazco U511 4,260.46 Repair&Maintenance Services and/or Supplies ARS Enterprises,Inc. 58363 400.00 Laboratory Services&Supplies AT&T Universal Biller M365 2,311.71 Telecommunications AT&T Universal Biller R513 154.15 Telecommunications AT&T 58364 37.00 Telecommunications AT&T 58512 37.00 Telecommunications Atkins North America M514 17,723.99 Professional Servicea/Engineering Design Services Awards&Trophies Company R516 73.88 Awards and Framing Services Ayala Engineering U516 6,850.00 Repair&Maintenance Services and/or Supplies Bank of New York Mallon Trust 58517 8,687.82 Professional Services-Financial Bank of New York Mellon Trust 56518 10,811.92 Professional Services-Financial Battery Specialties R366 273.78 Batteries,Various Battery Specialties U519 906.16 Batteries,Various Battery Systems,Inc. 58367 280.56 Repair&Maintenance Services and/or Supplies Battery Systems,Inc. M520 1,102.95 Repair&Maintenance Services and/or Supplies BC Wire Rope&Rigging R521 1,200.00 Tools&Supplies BEGBullding Electronic Controls,Inc U368 2,243.02 Electrical/Electronic Equipment,Parts&Repairs Gently Nevada Inc. 58369 2,609.28 Repair&Maintenance Services andlor Supplies BHI Management Consulting M522 9,379.33 Professional Services/Strategic Planning Black&Veatch Corporation R370 6,648.97 Professional Services/Engineenng Design Services BNI Building News U371 209.92 Books&Publications SOC Edwards Inc. 585" 2,380.71 Laboratory Services&Supplies Brand Scaffold Rental&Erection Inc M523 1,532.69 Miscellaneous Services Brea 9Owner LLC R372 2,600.00 Miscellaneous Services Brenntag Pacific,Inc. 58340 74,105.75 Miscellaneous Pads and Supplies Brenntag Pacific,Inc. 58524 6,617.69 Miscellaneous Pads and Supplies Brian K.Reed M636 164.00 Meeting/Tmining Expense Reimbursement EXHISITA nnntormm Page 1 of 8 81n 013 Claims Paid From 8/1/13 to 8115/13 Vendor Warrant No. Amount Description Brown&Caldwell 58341 211,930.46 Professional Services/Engineering Design Services Brown&Caldwell 58486 112,267.33 Professional Services/Engineering Design Services Bureau Ventas North America,Inc. 1223 6,657.00 Industrial Hygiene Services Burlington Safety Laboratory of CA,Inc. M373 4,031.93 Safety,Security,Health Equipment,Supplies,and Services California Barricade Reems U374 5'5`10.00 Miscellaneous Services California garniture Rentals 58525 5,060.00 Miscellaneous Services California Department of Public Health M526 25.00 Professional Organizations MeetingRraining/Membemhip California Dept.of Child Support M375 2,369.63 Judgments Payable California Recreation Company 1210 3,578.13 Boat Slip Rental-Nerissa Ocean Monitoring Vessel California Relocation Services,Inc. 58376 180.00 Miscellaneous Services-MovinglRelommon California Relocation Services,Inc. M527 180.00 Miscellaneous Services-MovinglRelocation California Special District Association M535 112.66 Professional Organizations Meetingnmuningt Membership California Water Technologies 58342 98,532.53 Chemicals Carollo Engineers 58487 136,841.58 Professional Services/Engineering Design Services Camillo Engineers M528 2,610.50 Professional Services Chad.P.Crowley Co. M529 4,987.32 Repair&Maintenance Services and/or Supplies Chem Search U530 2,678.32 Repair&Maintenance Services and/or Supplies Chuck Hodge 58633 150.00 Meetingansining Expense Reimbursement City of Huntington Beach M563 22.14 Water Use CMS Communications,Inc. M371 20,871.00 Computer Applications&Services Columbia Analytical Services U368 660.00 Laboratory Services&Supplies Columbia Analytical Services 58505 990.00 Laboratory Services&Supplies Compline.LLC M531 600.00 Professional Organizations MeetingRraining/Membership Connell ChevroleAGEO M532 40.38 Autos,Trucks&Manne Equipment,Parts,Accessories&Services Control Factors Seattle,Inc. U533 1,103.59 Repair&Maintenance Services and/or Supplies Controlled Motion Solutions 58378 84.78 Repair&Maintenance Services and/or Supplies Corner Bakery Cafe(CBC) 58379 460.71 Catering Services Corner Bakery Cafe(CBC) 58534 161.92 Catering Services Cornerstone Ondemand,Inc. U488 29,140.00 Professional Services/I.T. Corporate Image Maintenance,Inc. 58380 515.00 Janitor&Household Service&Supplies Corporate Image Maintenance,Inc. 58489 37,404.00 Janitor&Household Service&Supplies Cortech Engineering M381 6,006.14 Repair&Maintenance Services and/or Supplies County of Orange Auditor Controller U382 236.00 Governmental Agency Fees&Charges Court Order 58414 2,179.38 Judgments Pavable Court Order 58443 108.00 Judgments Payable Court Omer M482 912.50 Judgments Payable CS-AMSCO U383 1,276.56 Repair&Maintenance Services and/or Supplies CSU Dominguez Hills 58536 725.00 Professional Organizations Meeting/fraininglMembership Culligan of Orange County 583U 64.25 Repair&Maintenance Services and/or Supplies CWEA Membership M537 140.00 Professional Organizations Meetingnmuningt Membership CWEA Specialty Conference U538 199.00 Professional Organizations Miumagnmining/Membership DAC(Digital Assurance Congestion) 58385 1,500.00 Professional Services/Financial Document Repository David Gutoff 58539 225.00 Laboratory Services&Supplies David Wheeler Pest Control,Inc. M540 2,680.00 Pest Control Services DOB Engineering,Inc. 58541 2,640.00 Professional Services-Advocacy Dosed Pumps&Parts,Inc. 58542 49.24 Repair&Maintenance Services and/or Supplies Detection Instruments Corporation 58343 33,339.87 Electrical/Electronic Equipment,Pans&Repairs Dion Deas M631 195.00 Meeting/Training Expense Reimbursement Doug galleon U637 749.74 Meeting/fmining Expense Reimbursement EXHIBITA fnrzlWirm Page 2 of 8 WM013 Return to Agenda Rom Claims Paid From 8/1113 to$115/13 Vendor Warrant No. Amount Description Dunn-Edwards Corporation 58543 272.01 Facilities,Maintenance,Services&Supplies Duro-Sense Corporation M386 673.13 Electrical/Electronic Equipment,Parts&Repairs EIA.Harvey 58483 135.00 Meeting/Training Expense Reimbursement Employee Benefits Specialists,Inc. 58387 12,047.93 Reimbursed Prepaid Employee Medical&Dependent Care Enchanter,Inc. 58388 3,040.00 Vessel Services-Monitoring Vessel Names Enchanter,Inc. 58545 2,280.00 Vessel Services-Monitoring Vessel Nerissa Environmental Engineering&Contracting 58546 2,000.00 Professional Services/Speclalty Course Audits Environmental Express,Inc. 58547 3,931.24 Laboratory Services&Supplies ESRI,Inc. 58490 75,Oo0.00 Computer Applications&Services Ewing Irrigation 5854a 435.46 Irrigation Repair&Maintenance Services and/or Supplies Excel Door&Gate Co.,Inc. 58549 1,025.00 Repair&Maintenance Services and/or Supplies Facility Process Solutions Consuking 58389 3,712.20 Professional ServicealBiotrickling Filter Inspection Services Faviola Miranda 58635 514.16 Meeting/Training Expense Reimbursement Faces Corporation 58390 227.80 Freight Services Fedex Corporation 58550 35.77 Freight Services Fisher Scientific 58551 726.06 Laboratory Services&Supplies Flames Products,Inc. M552 459.20 Electrical/Elecbonic Equipment,Pads&Repairs Fountain Valley AAA Auto Site 58391 105.90 Autos,Trucks&Manne Equipment,Pads,Accessories&Services Franchise Tax Board 58392 150.00 Judgments Payable Franklin Covey 58393 17.24 Office Supplies Fresno First Bank-Acct 100013307 58628 1,209.30 Construction,Retention Garrett Callahan Company 58394 2,625.54 Chemicals,WatedWastewater Treatment Garrett Callahan Company 58553 33.61 Chemicals,WatedWasteweter Treatment Gates Fiberglass Installers 58554 3,696.00 Repair&Maintenance Services and/or Supplies George Yardley Co. 58555 1,025.52 Repair&Maintenance Services and/or Supplies GHD 58396 10,704.74 Professional Services/Engineering Design Services Glens Alignment&Brake Service 58556 344.00 Autos,Trucks&Marine Equipment,Pans,Accessories&Services Golden State Overnight Delivery Service 58396 6.18 Courier Services Golden State Overnight Delivery Service 58557 44.56 Courier Services Golden West Machine,Inc, 58397 13,900.00 Repair&Maintenance Services and/or Supplies Golden West Window Service 58398 1,764.45 Facilities,Maintenance,Services&Supplies Grainger,Inc. 58399 2,97644 Repair&Maintenance Services and/or Supplies Grainger,Inc. 58558 4,195.99 Repair&Maintenance Services and/or Supplies Graybar Electric Company 58400 1,70466 Electrical/Electronic Equipment,Pans&Repairs Graybar Electric Company 58559 5,456.60 ElmdricaVElechoic Equipment,Part.&Repairs Hach Company 58401 116.79 Laboratory Services&Supplies Harrington Industrial Plastics,Inc. 58402 168.01 Repair&Maintenance Services and/or Supplies Harrington Industrial Plastics,Inc. 58560 611,50 Repair&Maintenance Services and/or Supplies Haunt Raca lon Systems,Inc. U403 11,742]] Professional Services/ISO-Base Seismic Isolation Protection Installation HOR Engineering,Inc. 584N 12,603.38 Professional ServicesrEngineming Design Services Helix Electric,Inc. M499 13],250.00 Construction Hewlett Packard Company 58406 13,835,32 Computers,Software/Hardware Hill Brothers 1207 61,411.59 Chemicals,WatedWasteweter Treatment Hill Brothers 1219 63,304.86 Chemicals,WaterlWastewater Treatment Hilti,Inc. 58406 917.99 Repair&Maintenance Services and/or Supplies Home Depot 58407 539.37 Miscellaneous Pads and Supplies Home Depot 58561 104.88 Miscellaneous Pads and Supplies Hub Auto Supply 58408 940.62 Autos.Trucks&Marine Equipment,Parts,Accessories&Services Hub Auto Supply 58562 a85.25 Autos,Trucks&Manne Equipment,Parts,Accessories&Services EXHISITA finntomm Page 3 of 8 kca sls Claims Paid From 8/1/13 to 8115/13 Vendor Warrant No. Amount Description Indiana Child Support Bureau 58409 290.00 Judgments Payable Industrial Distribution Group 585" 112.04 Repair&Maintenance Services and/or Supplies Infrastructure Engineering Col. 58410 19489.88 Professional Services Insight Public Sector,Inc. M411 6,229.03 Computers,Software/Hardware Insight Public Sector,Inc. U565 4,649.40 Computers,Software/HaNware International Business Machines 58491 38,671.60 Computer Applications&Services Intl.Union of Oper.Eng.AFL CIO Local 58412 4,823.89 Dues Deductions Intratek Computer,Inc. M413 1,004.48 Nesork/Server/Printer Maintenance Services Imprisons Systems,Inc. 1224 278.61 Electrical/Electomic Equipment,Parts&Repairs James D.Ruth 58485 10,000.00 Professional Services/Consultant Jamison Engineering Contractors,Inc. 583" 93,922.93 Professional ServicesrConstruction Support Services Jays Catering M567 726.57 Catering Services JIG Tucker And Son,Inc. U566 756.00 Safety,Security,Health Equipment,Supplies,and Services Johnson Ma they Inc 58568 3,599.15 Repair is Maintenance Services and/or Supplies Johnstone Supply 58569 101.41 Repair&Maintenance Services and/or Supplies Kathleen T.Millea 58634 174.00 MeetinglTraining Expense Reimbursement Keenan&Associates U570 6,633.32 Professional ServicesiWorker's Compensation Program Kemire Water Solutions 1208 142,399.85 Chemicals,WaterWastewater Treatment Koff&Associates,Inc. M415 105.00 Professional Servicesri&Class Study L.Johnson Painting M416 250.00 Facilities,Maintenance,Services&Supplies L.Johnson Painting U571 3,750.00 Facilities,Maintenance,Services&Supplies Lexis-Nexis 58572 6,438.00 Books&Publications On-Line Lori Khajadounan 58484 109.38 MsetinglTraining Expense Reimbursement Lynde-ONway Company,Inc. M573 3,000.00 Computer Applications&Services Mail Dispatch,LLC U417 314.70 Mail Delivery Service MBC Applied Environmental Sciences 58418 3,413.75 Professional Services-Regional Ocean Monitoring MCGladrey&Pullen LLP M419 10,W0.00 Professional Services-Financial Auditing McMaster-Carr Supply Co. 1225 3,177.34 Repair&Maintenance Services and/or Supplies Media Resurfacing Systems,Inc. U574 520.00 Repair&Maintenance Services and/or Supplies Michael 1.Zedek 58639 383.84 MeiongRreining Expense Reimbursement Mid-West Associates,Inc. M575 907.69 Repair&Maintenance Services and/or Supplies Miele,Inc. M576 547.32 Laboratory Services&Supplies Mike J.Herrel U632 646.70 Meeting/Tmining Expense Reimbursement Municipal Water District of O.C. 58577 19,923.00 Governmental Agency Fees&Charges MWH Americas,Inc. M492 T 'Strt.00 Professional Services/Engineering Design Services NASSCO/PACP M578 325.00 Professional Organiutions MeetinglTraining/Membership Natures Image Inc. U579 4,583.70 Landscape Removal Services Neal Supply Co. 58420 518.40 Repair is Maintenance Services and/or Supplies Neal Supply Co. M580 1,549.37 Repair&Maintenance Services and/or Supplies Napped USA Inc. M581 63.54 Equipment Lease/Postage Meter NetsurkFleet Inc. U582 2,819.48 Software Maintenance Agreement Newark Electronics 58421 62.85 ElectricaMlectronic Equipment,Parts&Repairs Nicholas J.Ardennes M630 184.00 Meetingffmining Expense Reimbursement NO,General Computing,Inc. 511 45 25,W0.00 Computer Applications&Services OCB Reprographics U510 9,191.32 Printing/Reprographics Services OCEA 58422 692.25 Dues Deductible Office Depot 58583 6,491.22 Office Supplies Olin Corporation M423 2,293.70 Chemicals,WaterfWastewater Treatment OneSource Distributors,Inc. 58584 1,377.65 ElectricapBectronic Equipment,Parts&Repairs EXHnnrztwmm Page 4 of 8 WM013 Return to Anemia Rom Claims Paid From 8/1113 to$115/13 Vendor Warrant No. Amount Description Orange County Auto Parts M585 5,208.95 Truck Supplies Orange County Hose Company M424 77.52 Miscellaneous Paris and Supplies Orange County Sheriff U425 1,385.37 Judgments Payable Orange County United Way 58426 40.00 Employee Contributions Pace,Inc. M427 3,906.00 Professional Services Pacific Mechanical Supply 1211 795.96 Repair&Maintenance Services and/or Supplies Pacific Mechanical Supply 1226 114.22 Repair&Maintenance Services and/or Supplies Parker Supply Company 1227 1,707.48 Miscellaneous Pads and Supplies Parkhouse Tire,Inc. M428 3,663.15 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Parkson Corporation M429 906.71 Mechanical Pans&Supplies PBS&J U339 56,433.71 Professional Services/Engineedng Design Services PCS Express,Inc. 58430 171.33 Courier Services PCS Express,Inc. M586 329.21 Courier Services Peace Officers Council of CA R431 2,070.00 Dues Deductions,Supervisors&Professionals Panto,Inc. Still 30,103.81 Chemicals Performance Pipeline Technologies 58493 30,588.52 Professional SBNICes CCTV InspectionlSeserline Cleaning PL Hawn Company,Inc. M432 2,537.38 Repair&Maintenance Services and/or Supplies PL Hawn Company,Inc. R587 3,016.20 Repair&Maintenance Services and/or Supplies Polydyne,Inc. 1212 24,174.04 Chemicals,WatenWastermar Treatment Ponton Industries,Inc. 58433 8,579.84 Laboratory Services&Supplies Port Supply 58434 636.19 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Port Supply R588 381.83 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Powarilo Products,Inc. U435 934.26 Repair&Maintenance Services and/or Supplies Prexair Distribution,Inc. 58436 Sol Laboratory Services&Supplies Prexair Distribution,Inc. 58589 75.28 Laboratory Services&Supplies Primrose Ice Co.,Inc. 58437 131.25 Water&Ice Services Priority Meiling Systems,L.L.C. 58438 8,221.00 Postage/Scale Machine-MelmenancelSofwera Update Progressive Business Publications 58439 299.00 Books and Publications Project Management Institute 58440 337.50 Professional Omanizations MeetinglTraining/Membemhip Project Management Institute 58590 2,810.00 Professional Organizations Meeting/fraining/Membership Projects Partners 58591 7,564.57 Professional Services/remporary Employment Services Prudential Insurance Company of America 58347 48,514.71 Benefits Prudential Overall Supply 1213 3,028.51 Uniforms PSI R592 8,850.60 Repair&Maintenance Services and/or Supplies Pump Action 58441 7,000.00 Oil Fllters Quinn Power Systems 58442 165.15 Autos.Trucks&Marine Equipment,Parts,Accessories&Services Rainbow Disposal Co. 58444 6,998.00 Waste Disposal Restek Corp. 1228 615.18 Laboratory Services&Supplies Royal Wholesale Electric 58593 433.35 Repair&Maintenance Services and/or Supplies Royale Cleaners 58445 308.60 Miscellaneous Services Royale Cleaners 58594 130.50 Miscellaneous Services Ryan M.Wyland 58638 170.00 Meeting/Training Expense Reimbursement San DlegolOrenge Fluid System Technologl 58595 3,674.30 Repair&Maintenance Services and/or Supplies Sancon Engineering,Inc. 5834E 46,970.00 Repair&Maintenance Services and/or Supplies Santa Ana River Flood Protection Agency 58446 1,100.00 Professional Organization SC Fuels 58447 8,461.30 Fuel and Lubricants San Bird Electronics,Inc. 58596 901.00 Elecincal/Elecbonic Equipment,Pads&Repels Securitas Security Services USA,Inc. 58448 1,169.53 Safety,Security,Health Equipment,Supplies,and Services Securitas Security Services USA,Inc. 58494 31,013.18 Safety,Security,Health Equipment,Supplies,and Services EXHISITA nnM01rrm Page 5 of 8 81 v 013 Claims Paid From 8/1/13 to 8/15/13 Vendor Warrant No. Amount Description Shamrock Supply Co.,Inc. 58449 3,017.55 Repair&Maintenance Services and/or Supplies Shamrock Supply Co.,Inc. 58597 4,173.27 Repair&Maintenance Services and/or Supplies Shureluck Sam&Engineering 58450 399.60 Repair&Maintenance Services and/or Supplies Shureluck Sales&Engineering M598 1,307.99 Repair&Maintenance Services and/or Supplies Siemens Technology U599 405.28 Air Conditioner Automation System Siemens Water Technologies Corp. 1229 1,479.49 Repair&Maintenance Services and/or Supplies Sierra Instruments,Inc. 58600 847.66 Repair&Maintenance Services and/or Supplies Sigma-Aldrich,Inc. M451 252.76 Laboratory Services&Supplies So.Cal Gas Company U601 24.103.27 Utilities South Coast Air Quality Management Dist. 58452 1,253.48 Governmental Agency Fees&Charges Southern Cairene Setac 58603 20.00 Professional Organization Southern California Edison M453 2,270.13 Utilities Southern California Edison U495 235.332.58 Utilities Southern California User Group 586" 50.00 Professional Organizations Maetingffouning/Membership Sparklett-Dallas 58605 1,579.20 Miscellaneous Services St.Croix Sensory,Inc. 58454 2,970.00 Olfactometry Testing Services Somali Trenchless Consultants,Inc. U606 10.81 Construction Staples 58455 742.50 Office Supplies Staples 58607 911.49 Office Supplies Stratus Environmental,Inc. M456 4,100.00 Professional Services/Groundwater Removal Summit Steel 1230 1,721.36 Repair&Maintenance Services and/or Supplies Sunset Industrial Parts 58457 71.15 Repair&Maintenance Services and/or Supplies Synagro West,Inc. 58349 214,210.77 Biosolids Management Tr stAmerica Ontario 1214 104.00 Laboratory Services&Supplies Tesbimen.Ontario 1231 1,981.00 Laboratory Services&Supplies Tatra Tech,Inc. 58608 1,163.46 Professional Services/Enginaering Design Servirsi Thatcher Company Of California M350 42,221.10 Chemicals,Water/wastewater Treatment Thatcher Company Of California M609 17,811.57 Chemicals,WaterMastewater Treatment The Bank of New York Mellon U468 1,703.58 Quarterly Service Fee-Asset Administration The Schooley Company 58459 2,000.00 Professional Services/Appraisal Summary UBlity Easement Theodore Robins Ford M610 263.13 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Thompson Industrial Supply,Inc. 1215 20,598.22 Repair&Maintenance Services and/or Supplies Thompson Industrial Supply,Inc. 1232 8,941.18 Repair&Maintenance Services and/or Supplies Tongs Lock&Safe Service&Sales 58460 674.90 Repair&Maintenance Services and/or Supplies Tongs Lock&Safe Service&Sales M611 193.27 Repair&Maintenance Services and/or Supplies Total Resource Management,Inc. M351 62,981.00 Professional Service sfmplementation of IBM Maxim Total Resource Management,Inc. U612 5,500.00 Professional Sewiceogroplementation of IBM Maxim Trans U.S.Inc 58613 2,978.64 Repair&Maintenance Services and/or Supplies Transient 1216 189.78 Repair&Maintenance Services and/or Supplies Tri-State Seminar On-the-River M614 380.00 Professional Organizations Meeting/Training/Membership Truck&Auto Supply,Inc. U461 61.67 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Truck&Auto Supply,Inc. 58615 13.54 Autos.Trucks&Marine Equipment,Parts,Accessories&Services Tula RancNMagan Farms 58496 304,748.85 Biosolids Management TW Telecom Holdings,Inc. M462 9,873.95 Telecommunications Two Wheels One Planet U616 55.07 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Ultre Scientific 58463 475.24 Laboratory Services&Supplies Union Bank of California 58464 455.00 Annual Administrative Fee for Series 2007A Certificates of Participation Union Bank of California M617 1,078.64 Banking Services United Parcel Service U465 583.44 Freight Services EXHnnrzrwmm Page 6 of 8 WM013 Return to Agenda Report Claims Paid From 8/1113 to$115/13 Vendor Warrant No. Amount Description United Pamel Service M618 144.95 Freight Services United States Department Of The Treasury M466 399.86 Judgments Payable UPS Ground Freight,Inc. 58467 38.30 Freight Services US Aimonditioning Distributors,Inc. 58619 636.65 Electrical Paris&Supplies US Peroxide,L L.C. 58352 78,664.52 Chemicals,Water/Wastewater Treatment USC 58497 46,243.73 Professional Services/Studies Valid Corporation 1217 3,074.66 Repair&Maintenance Services and/or Supplies Valley Power Systems,Inc. 58620 1,010.73 Repair&Maintenance Services and/or Supplies Valve Automation&Controls 58468 1,222.00 Repair&Maintenance Services and/or Supplies Valve Automation&Controls 58621 900.80 Repair&Maintenance Services and/or Supplies Verbal Ink 58469 101.75 Human Resources Services Vermin California 58470 644.81 Telecommunications Veriwn Wireless M471 1,257.02 Telecommunications Veme's Plumbing R472 455.33 Plumbing Services&Supplies Village Nurseries U473 67.52 Repair&Maintenance Services and/or Supplies Vortex Corp. 1218 1,080.20 Repair&Maintenance Services and/or Supplies Vortex Corp. 1233 5,568.30 Repair&Maintenance Services and/or Supplies Voyager Fleet Systems,Inc. R353 26,053.77 Autos,Trucks&Marine Equipment,Parts,Accessories&Services MR Scientific Products U474 5,110.29 Laboratory Services&Supplies MR Scientific Products 58622 357.32 Laboratory Services&Supplies W.M.Lyles Co. M629 22,976.70 Construction Water Environment Fedembon R476 187.00 Professional Organizations MeetinglTraining/Membership Waxle Sanitary Supply U476 1,913.48 JanitorB Household Sri&Supplies Winds Sanitary Supply 58623 522.72 Janitor&Household Service&Supplies Wayne Parry Inc 58624 1,900,00 Laboratory Services&Supplies WCR Incorporated 58626 4,921.14 Miscellaneous Services Weber Scientific 58477 347.44 Laboratory Services&Supplies WEFTEC 58478 1,123.00 Professional Organizations Meetingaraining/Memberehip White Cap-Remit 58479 344.53 Painting Supplies Wildlife Supply Co. 58480 38.95 Laboratory Services&Supplies Woodvif Spmdlin&Smart 583M 163,754.13 Professional Services-Legal WoddatWork 58626 245.00 Professional Organizations Meetingaraining/Memberehip Xerox Corporation 12M 129.43 Computers,Software/Hardware&Managed Services Vale/Chase Materials Handling,Inc. 58481 688.42 Electrical/Electronic Equipment,&Electric Cart Parts&Repairs Vale/Chase Materials Handling,Inc. 58627 435.29 Electrical/Electronic Equipment,&Electric Cart Parts&Repairs 24 Hour Fire Protection,Inc. 58355 285.00 Repair&Maintenance Services and/or Supplies Total Accounts Payable-Warrants $ 374],246]5 Payroll Disbursements Employee Paychecks 51587 - 51609 $ 3,816.33 Interim Payroll-ARM(Sri Employee Paychecks 51610 - 51658 85,261.73 Bivreekly Payroll(8/01/13) Employee Paychecks 51659 2,952.99 Interim Payroll-Termination(8102113) Employee Paychecks 51660 1,443.16 Interim Payroll-Termination Payout(8/02/13) Employee Paychecks 51661 113.40 Interim Payroll-Reissue voided check(8I05113) Employee Paychecks 51662 573.68 Interim Payroll-Lump sum payment(8108/13) Employee Paychecks 51663 - 51664 4,728.27 Interim Payroll-Retirement,intern resignation(8106113) Employee Paychecks 51665 21,811.43 Interim Payroll-Retirement leave payout(81=13) Direct Deposit Statements 34f 088-3,11265 41,312.63 Interim Payroll-ARM(8/01/13) Direct Deposit Statements U1266-Ul US 1,401,624.56 Blesekly Payroll(8/OT/13) EXHISITA nncHiii Page 7 of 8 erzvzms Claims Paid From 8/1/13 to 8115/13 Vendor Warrant No. Amount Description Total Payroll Disbursements $ 1,563,638.18 Wire Transfer Payments OCSD Payroll Taxes 8 Contributions $ 8a9,271]g Biweekly Payroll(8/07/13) Union Bank of California 20,855,52 Workers'Compansetion$ervices(8115113) Magnus Pacific Corporation 1,057,107.75 Construction 558DIPPI(8/15/13) Total Wire Transfer Payments $ 1,927,235.06 Total Claims Paid 8101/1 3-811 511 3 $ 7,238,119.99 EXHn�rziormm 1 Page 8 of 8 fl�M013 Return to Agenda Report Claims Paid From 8116/13 to 8/31113 Vendor Warrant No. Amount Description Accounts Payable Warrants AAAS 581 99.00 Professional Organizations MeedrigRraining/Membeiship AACE Internatlonel 58655 300.00 Professional Organizations Meelang/rrzining/Membership AECOM Technical Services,Inc. Santa, 113,697.66 Professional Services/Engineering Design Services Aerotek 58656 844.20 Professional Services/Temporary Services Animal 58792 1,242.55 Professional ServicesRemporary Services Air Liquids America Corp. U793 459.21 Laboratory Services&Supplies Air Products&Chemicals,Inc. 58657 15,523.52 Chemicals,WaterlWastewater Treatment Air Products&Chemicals,Inc. 581 5,201.18 Chemicals,Water/Wastewater Treatment Airgas USA,LLC 1237 746.25 Laboratory Services&Supplies Airgas USA,LLC 1245 757.66 Laboratory Services&Supplies Amazing Tents&Events 58658 112.25 Event Supplies Amazing Tents&Events M796 74.00 Event Supplies American Express TVL Related Svcs Co.,I R659 3,027.37 Purchasing Card Program for Miscellaneous Travel Expenses American Integrated Services,Inc. 586t1 30,679.15 Grit&Screenings Disposal AppleOne Employment Service 1246 2,173.55 Professional ServicesRamporary Services Applied Industrial Technology 58176 25,128.34 Repair&Maintenance Services and/or Supplies Argus-Hazco 58797 2,449.90 Repair&Maintenance Services and/or Supplies Arizona Instruments,L.L.C. 58660 6,825.00 Elechlcal/Electronic Equipment,Pads&Repairs Asphalt Institute 58661 195.00 Publication AT&T Long Distance. 58798 84.33 Telecommunications AT&T Mobility II,L.L.C. 58799 7,444.08 Telecommunications AWSI 58662 290.40 Professional Servirss-DOT Program Administration AWSI 58800 56.00 Professional Services-DOT Program Administration Ayala Engineering 58801 2,900.00 Repair&Maintenance Services and/or Supplies B&K Electric Wholesale H663 228.55 Electrical/ElecVonic Equipment,Pans&Repairs Benjamin&Cathedra Mayberry U713 2,298.73 Sewer User Refund Black&Veatch Corporation 58643 131,587.32 Professional ServicesrEngin airing Design Services Black&Veatch Corporation 58177 63,707.78 Professional Services/Engineering Design Services Bobby L.Unsell R912 191.00 Meeting/Training Expense Reimbursement Brown&Celdurell U802 3,360.66 Professional Services/Engineer ng Design Services Bureau Verdes Nonh America,Inc. 1247 4,516.00 Industrial Hygiene Services Burlington Safety Laboratory of CA,Inc. 58664 315.00 Safety,Security,Health Equipment,Supplies,and Services Burlington Safety Laboratory of CA,Inc. 58803 853.96 Safety,Security,Health Equipment,Supplies,and Services Bush&Associates,Inc. 58665 8,690.00 Professional Services/Surveying Services C.S.M.F.O 58819 120.00 Professional Organizations Meetingareining/Membership California Bank&Trust 11201037519 58649 35,743.86 Construction California Barricade Rentals 58804 2,100.00 Miscellaneous Services California Dept.of Child Support 58666 2,524.58 Judgments Payable California Municipal Statistics,Inc. 58805 525.00 Governmental Agency Fees&Charges Caddell Com. 58806 17,996.60 Repair&Maintenance Services and/or Supplies CAPPO,Inc. 58807 297.00 Professional Organizations Meeting/Training/Membership Carl Warren&Co. 58667 327.50 Professional Services-Workers'Compensation Cacho Engineers 58668 7,139.26 Professional Services/Engineering Design Services Cemtek Environmental,Inc. 58669 8,510.34 CEMS Maintenance Agreement Cemtek Environmental,Inc. 58808 4,291.67 CEMS Maintenance Agreement Chem Search 58809 221.16 Repair&Maintenance Services and/or Supplies CHMIA 58810 300.00 Training Registration-Calif.Hazardous Materiels Investigators Assoc. City of Fountain Valley 58811 357.32 Per EXHIBIT S nnntolmm Page 1 of 7 varzms Claims Paid From 8116/13 to 8/31113 Vendor Warrant No. Amount Description City of Fountain Valley 58812 4,162.98 Permits City of Garden Grove 58670 11.00 Water Use City of Huntington Beach 58699 12.83 Water Use City of Huntington Beach M837 15,328.84 Water Use City of Huntington Beach U913 125.00 Permit Fees City of Newport Beach 58717 1,414.40 Water Use City of Tustin 58671 1,782.32 Water Use Clean Harbors Environmental Services 12" 2,277.65 Grit&Screenings;Hazard]Waste Disposal Coast Rubber Stamp,Mfg. U672 43.20 Stationery&Office Supplies Columbia Analytical Services 58795 2,830.00 Laboratory Services&Supplies Concept Power Inc. M673 2,889.20 Electrical/Electronic Equipment,Pads&Repairs Consumers Pipe&Supply Co. 12H 657.20 Repair&Maintenance Services and/or Supplies Consumers Pipe&Supply Co. 1249 1,119.34 Repair&Maintenance Services and/or Supplies Cooperative Personnel Services 58818 463.45 Human Resources Services Corporate Image Maintenance,Inc. M814 663.00 Janitor&Household Service&Supplies Ronald]J.Coss M768 238.00 Meeting/Training Expense Reimbursement Counterpart Enterprises,Inc. U674 467.93 Repair&Maintenance Services and/or Supplies County of Orange-Health Care Agency 58817 13,255.00 Governmental Agency Fees&Charges County of Orange Auditor Controller M675 795.00 Governmental Agency Fees&Charges County of Orange Auditor Controller M815 961.50 Governmental Agency Fees&Charges County of Orange Auditor Controller U816 70.00 Governmental Agency Fees&Charges Court Order 58704 2,179.38 Judgments Payable Court Order M735 108.00 Judgments Payable Court Order 58164 912.50 Judgments Payable CR&R,Inc. U676 2,408.63 Waste Disposal CWEA Membership 58820 148.00 Professional Organizations Meetingf raining/Membership David Manning M906 325.00 Meeting/Treining Expense Reimbursement David Wheeler Pest Control,Inc. M677 1,260.00 Pest Control Services David Wilsons Ford Of Orange U678 23.289.12 Vehicle Purchase Deaver Manufacturing Co. 58821 1,181.38 Autos.Trucks&Marine Equipment,Fare,Accessories&Services Dion Deas 589N 66.95 Meeting/Treining Expense Reimbursement DunnEdwards Corporation M679 309.03 Facilities,Maintenance,Services&Supplies Electmbond U680 4,687.20 Repair&Maintenance Services and/or Supplies Employee Benefits Specialists,Inc. 58W 820,342.99 Reimbursed]Prepaid Employee Medical&Dependent Care Employee Benefits Specialists,Inc. 58681 11,165.28 Reimbursed]Prepaid]Employee Medical&Dependent Care Enchanter,Inc. M682 3,040.00 Vessel Services-Monitoring Vessel Nerissa Entech Instruments,Inc. U822 800.00 Laboratory Services&Supplies Ewing Irrigation 58683 123.84 Irritation Repair&Maintenance Services and/or Supplies Ewing Irrigation M823 1,566.00 Irrigation Repair&Maintenance Services and/or Supplies particle Miranda M909 1,586.68 MeetingRmining Expense Reimbursement Feces Corporation 58684 70.60 Freight Services Fedex Corporation 58824 60.98 Freight Services First American Corelogic M813 105.50 Software Maintenance Agreement Fisher Scientific M685 829.78 Laboratory Services&Supplies Fisher Scientific U826 1,701.11 Laboratory Services&Supplies Flex Core 58686 286.16 Repair&Maintenance Services and/or Supplies Franchise Tax Board 58687 150.00 Judgments Payable Fresno First Bank-Acct 100013315 M787 45,830.75 Construction,Retention Full Spectrum Analybes,Inc. U827 10,625.48 Laboratory Services&Supplies Onrz m lWm Page 2 of 7 EXHIBIT 1�8 p13 Return to Agenda Rom Claims Paid From 8116/13 to 8/31113 Vendor Warrant No. Amount Description Ganahl Lumber Company M828 962.69 Facilities,Maintenance,Services&Supplies Garland Manufacturing Go. 58688 796.34 Repair&Maintenance Services and/or Supplies Garrett Callahan Company 58829 1,818.90 Chemicals,WaterfWastewater Treatment Golden State Overnight Delivery Service 58689 582.93 Courier Services Golden State Overnight Delivery Service 58830 65.29 Courier Services Golden West Machine,Inc. 58690 214.92 Repair&Maintenance Services and/or Supplies Golden West Window Service 58831 4,841.33 Facilities,Maintenance,Services&Supplies Grainger,Inc. 58691 1,608.44 Repair&Maintenance Services and/or Supplies Grainger,Inc. 58832 2465.34 Repair&Maintenance Services and/or Supplies Gmybar Electric Company 58692 1,469.36 Electrical/Electronic Equipment,Pans&Repairs Great Western Sanitary Supplies 58693 85.77 Janitor&Household Service&Supplies GRM Information Management Services 58833 371.10 Miscellaneous Services&Supplies Guarantee Records Management 58834 880.14 Professional Services-Document Storage&Shredding Hardy Diagnostics 58694 139.85 Laboratory Services&Supplies Harrington Industrial Plastics,Inc. 58695 1,408.76 Repair&Maintenance Services and/or Supplies Harrington Industrial plastics,Inc. 58835 186.35 Repair&Maintenance Services and/or Supplies HDR Engineering,Inc. 58645 116,945.50 Professional Services/Engineedng Design Services Hill Brothers 1235 125,466.29 Chemicals,WatertWastewater Treatment Hill Brothers 12M 2,747.61 Chemicals,WaterfWastewater Treatment Home Depot 58696 513.07 Miscellaneous Pans and Supplies Horizon Technology M697 317.12 Laboratory Services&Supplies Hub Auto Supply R698 253.15 Autos,Trucks&Marine Equipment,Pans,Accessories&Services Hub Auto Supply U836 25.36 Autos,Trucks&Marine Equipment,Pans,Accessories&Services Hyatt Legal Plans 58700 1,729.00 Professional Services-Legal Indiana Child Support Bureau M701 290.00 Judgments Payable Insight Public Sector,Inc. R702 10,381]2 Computers,Software/HaMme Intl.Union of Oper.Eng.AFL CIO Local U703 4,723.89 Dues Deductions Inhatek Computer,Inc. 58838 12,000.00 Netuork/Server/Printer Maintenance Services Irvine Ranch Water District M839 23.86 Water Use IT Voon,Inc. 58840 11,700.00 Professional Services/Repons Design Ocean Monitoring Program J F Shea Construction,Inc. U778 213,455.00 Construction J R Filanc Construction 58788 456,448.88 Construction Jacobs Project Management Co. 58779 100,620.14 Professional ServicesRempprary Services Jamison Engineering Contractore,Inc. 58780 190,472.64 Professional Services/Construction Support Services JIG Tucker And Son,Inc. 58841 872.10 Safety,Security,Health Equipment,Supplies,and Services John Miikovich 58910 150.00 Meetingamining Expense Reimbursement Johnstone Supply 58842 419.14 Repair&Maintenance Services and/or Supplies JP Morgan Chase Bank,NA 58W 67,574.01 Purchasing Cant Program for Miscellaneous Pads and Supplies JWC Environmental LLC 58843 11,316.79 Repair&Maintenance Services and/or Supplies Kathleen T.Millea 58908 150.00 Meetingarsining Expense Reimbursement Kelly Paper 58705 49.54 Office Supplies Kemim Water Solutions 1244 123,368.37 Chemicals,WatertWastewater Treatment Ken A.Sakamoto 58911 371.30 Meeting/rmining Expense Reimbursement KSR Associates.LLC 58844 250.96 Repair&Maintenance Services and/or Supplies Lab Support 58706 11,571.11 Professional Services/Temporary Services Laura A.Teniquez 58746 43.31 Meeting/Training Expense Reimbursement Leeward Shelving&Filing Systems 58845 4,977.03 OBIce Supplies Lexis-Nexis 58707 84.00 Books&Publications On-Line Lexis-Nexis 58846 6,438.00 Books&Publications On-Line EXHIBIT S nnnl01mm Page 3 of 7 Wa 013 Claims Paid From 8/16/13 to 8/31113 Vendor Warrant No. Amount Description Liberty Mutual Claims 58708 13,827.43 Insurance Liberty Mutual Claims 58847 19,471.26 Insurance Ullestrend and Associates M848 5,048.65 Professional Services Linda Losurdo 58171 103.42 MeetingRraining Expense Reimbursement Lisa K.Haney U770 313.72 Meeting/rmining Expense Reimbursement LuccPS Gourmet Foods,Inc. 58709 145.00 Catenng Services Luccrs Gourmet Foods,Inc. 58849 132.50 Canning Services Malcolm Pimie Inc. 56642 66,137.67 Construction Malcolm Pimie,Inc. U710 1,221.40 Professional Services/Engineering Design Services Malcolm Pimie,Inc. 58850 12,333.01 Professional Servicee/Engineenng Design Services Matheson Tn Gas,Inc. 58711 2,466.21 Laboratory Services&Supplies Matheson Tn Gas,Inc. M851 1,079.70 Laboratory Services&Supplies Maxim Security Systems U712 17.147.29 Safety,Security,Health Equipment,Supplies,and Services McMaster-Carr Supply Co. 1251 206.29 Repair is Maintenance Services and/or Supplies Midway Mfg.&Machining Co. M852 9,422.74 Repair&Maintenance Services and/or Supplies Minako America Corporation M652 91,291.50 Construction Monterey Bay Aquarium Research Institute U714 3,985.51 Professional Services/Ocean Monitoring Studies Monterey Bay Aquarium Research Institute 58853 806.32 Professional Services/Ocean Monitoring Studies MTM Recognition Corporation 58715 319.12 Service Awaits MTM Recognition Corporation 56854 173.20 Service Awaits NACE International U865 1,955.00 Professional Omanizations Meeting/Raining/Membership NAFA,Inc. 58856 475.00 Professional Organzations Meetinglhaining/Membership National Safety Council 58716 995.00 Professional Organizations MeetingRraining/Membership Ninyo&Moore M857 2,437.25 Professional Services/Geotech&Material Testing Norman A.Traub Associates 68647 31.079.90 Legal Services Northeast Laboratory Services,Inc. 58718 550.25 Laboratory Services&Supplies NRG Engine Services,L.L.C. 58719 8,452.27 Repair&Maintenance Services and/or Supplies NRG Engine Services,L.L.C. M858 3,165.27 Repair&Maintenance Services and/or Supplies Oau Shave Ice,LLC U720 700.00 Public Outreach Services and Supplies OCEA 58721 702.00 Dues Deductible CDC Engineering&Technology 58789 76,T73.30 Construction Office Depot 58722 2,172.15 Office Supplies Olin Corporation U781 29,543.04 Chemicals,WaterWastewater Treatment OneSoume Distributors,Inc. 58859 2,110.32 Electncal/Electronic Equipment,Pads&Repays Operation Technology,Inc. 58723 9,257.04 Repair&Maintenance Services and/or Supplies Orange County Auto Parts M860 105.65 Truck Supplies Orange County Sanitation District U775 1,370.81 Petry Cash Expense Orange County ShedH 58724 664.17 Judgments Payable Orange County United Way 58725 40.00 Employee Contributions Pacific Mechanical Supply 1239 295.85 Repair&Maintenance Services and/or Supplies Paragon Plastics Company U726 298.06 Miscellaneous Parts and Supplies Pmkhouse Tire,Inc. 58727 1,818.10 Autos.Trucks&Marine Equipment,Parts,Accessories 8 Services Parkson Coroomtion 58728 806.56 Mechanical Pads&Supplies Patriot Video Productions M861 442.05 Miscellaneous Services Peace Officers Council of CA U729 2,041.00 Dues Deductions,Supervisors&Professionals Peter Chaffs 58903 169.00 MeetingRreining Expense Reimbursement PL Hawn Company,Inc. 58730 341.32 Repair&Maintenance Services and/or Supplies PL Hawn Company,Inc. M862 784.08 Repair&Maintenance Services and/or Supplies Polydyne,Inc. 1236 65,353.32 Chemicals,Water/Wastewater Treatment EXHIBIT fnrztwmm Page 4 of 7 9/arzotg Return to Abaci Rom Claims Paid From 8116/13 to 8/31113 Vendor Warrant No. Amount Description Porair Distribution,Inc. M863 638.46 Laboratory Services&Supplies Primrose Ice Co.,Inc. M731 131.25 Water&Ice Services Primrose Ice Co.,Inc. 58864 262.50 Water&Ice Services Procans Work Injury Center 58732 110.00 Medical Services Procam Work Injury Center M865 490.00 Medical Services Prudential Overall Supply 1240 2,976.09 Uniforms Pump Action U733 501.75 Oil Fllters Q Air-Calif.Div.Pump Engineering 58734 3,779.61 Repair&Maintenance Services and Supplies Quayle Consulting Inc. M782 70,264.01 Computer Applications&Services Rabobank,Escrow Acche 272295573 M766 22,023.15 Construction Randstad Technologies,L.P. U736 4,410.00 Computer Applications&Services Raymond Handling Solutions,Inc. 58866 249.00 Material Handling Tools&Equipment RBF Consulting 58867 8,919.00 Professional Services/Engineenng Design Services Rebecca A.Brooks 58767 115.00 Meeting/Training Expense Reimbursement Red Zone Robotics Inc 58868 16,662.50 Professional Servlces/Sonar Inspection Evaluation Regents of the University of Calif. 58737 3,062.09 Meeting?reining Registration Regents of Unw.of California M783 27,000.00 Professional Services Rellastar R869 3,690.31 Voluntary Employee Life&Cancer Insurance Rentacrate,L.L.C. U870 654.90 Facilities,Maintenance,Services&Supplies Restek Cam. 1252 436.96 Laboratory Services&Supplies Rexel Electrical&Datacom Supplies M871 14,297.60 Electiicel/Electmnic Equipment,Pads&Repairs Richard N.Leon R906 2,79448 Meeting/Training Expense Reimbursement RMC Water and Environment U738 16,736.62 Professional Services RMS Engineering&Design,Inc. 58872 2,625.00 Professional SamicesrEngineerng Design Services Robed M.Whitney 58174 100.00 Meeting/Training Expense Reimbursement Roberts Auto Trim Shop R873 237.60 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Royale Cleaners U874 119.70 Miscellaneous Services RT Contractor Corn 58875 785.20 Plumbing Services&Supplies Ruben Gomez M769 487.90 Meeting/Tmining Expense Reimbursement Safety-Kleen R739 1,650.24 Repair&Maintenance Services and/or Supplies San Dlego/Oange Fluid System Technclogl U876 388.29 Repair&Maintenance Services and/or Supplies Scientific Construction Laboratories 58740 2,945.00 Professional Services Shamrock Supply Co.,Inc. M741 7,934.35 Repair&Maintenance Services and/or Supplies Shamrock Supply Co.,Inc. R877 27.06 Repair&Maintenance Services and/or Supplies Shinni Scientific Instruments Inc. U742 318.28 Laboratory Services&Supplies Shureluck Sales&Engineering 58743 1,878.55 Repair&Maintenance Services and/or Supplies Shumluck Sales&Engineering M878 1272.13 Repair&Maintenance Services and/or Supplies Siemens Energy,Inc. Sill 1,231,20 Repair&Maintenance Services and/or Supplies Smith Pipe&Supply,Inc. U879 44.82 Facilities,Maintenance,Services&Supplies Southern California Edison 58648 244,095.02 UOlides Southern Counties Lubricants M880 3,269.17 Fuel and Lubricants Southwest Scientific,Inc. R881 460.85 Laboratory Services&Supplies SST Baneiks Corrupting&Insurance Sew U882 5,000.00 Professional Services Standard Automation and Control 58883 2,225.00 Computer Applications&Services Stanek Constructors Inc M650 321,694.78 Construction Stool Consulting Services,Inc. Rem 1,056.50 Professional Services/Surveying Stephen M.Markus U772 250.00 Meeting/ralning Expense Reimbursement Stephen M.Markus 58907 590.00 Meetingamining Expense Reimbursement Summit Steel 1253 194.48 Repair&Maintenance Services and/or Supplies EXHIBIT S fnntolmm Page 6 of 7 W ozms Claims Paid From 8/16/13 to 8/31113 Vendor Warrant No. Amount Description Sunny Express 58885 51.82 Freight Charges Surat Industrial Pads 58745 58.32 Repair&Maintenance Services and/or Supplies Synagro West,Inc. 58784 828,839.09 Biosolids Management TDI M886 12,412.50 Professional Services/Infoimation TechndWy Tarry H.Ahn M902 150.00 Meeting/Tmining Expense Reimbursement TestAmedaa Ontario 12M 1,711.00 Laboratory Services&Supplies Tharaos 58785 71,810.00 Professional Services/North Scrubbers Complex Bleach Tank Replacement Thatcher Company Of California M747 12,164.87 Chemicals,WateoWastewater Treatment The Fire X-Tinguisher Service Co. U825 690.98 Safety,Security,Health Equipment,Supplies,and Services The Standard Insurance Company 58748 2,594.18 Disability Insurance The Walking Man,Inc. M887 425.00 Miscellaneous Services Theodore Robins Ford M749 208.51 Autos,Trucks&Marine Equipment,Parts,Accessories&Services Thermo Election North America,L.L.C. 1241 12,865.00 Laboratory Services&Supplies Thompson Industrial Supply,Inc. 1242 4,061.15 Repair&Maintenance Services and/or Supplies Thompson Industrial Supply,Inc. 1255 129.25 Repair&Maintenance Services and/or Supplies Titan Pourer,Inc. M750 1,311.81 Battery Replacement Tony§Lock&Safe Service&Sales U888 276.64 Repair&Maintenance Services and/or Supplies Townsend Public Affairs 58751 5,000.00 Professional Services-Stet.Legislative Advocacy Tremco Incorporated 1243 438.65 Repair&Maintenance Services and/or Supplies Tri-State Seminar On-the-River M752 190.00 Professional Organiations Meeting/Training/Membership Tropical Plaza Nursery,Inc. U763 1,272.00 Landscape Maintenance Services Truck&Auto Supply,Inc. 58889 14.17 Autos.Trucks&Marine Equipment,Peru,Accessories&Services Tule RancNMagan Farms M786 310,817.32 Biosolids Management UC Regents M758 2,600.00 Professional Organizations Meeting/Training/Membership Underground Service Alert of So.Calk U890 1,861.50 Professional Services-Dig Alen Notification Service United Parcel Service 58754 76.79 Freight Services United Parcel Service M891 567.05 Freight Services United Rentals,Inc. M755 1,244.86 Striping Paint United States Department Of The Treasury U766 399.86 Judgments Payable United States Plastic Corp. 58757 31.40 Miscellaneous Pads and Supplies Universal Flooring Systems,Inc. 58892 516.00 Facilities,Maintenance,Services&Supplies Valve Automation&Controls M893 849.41 Repair&Maintenance Services and/or Supplies Venznn Wireless U759 47.83 Telecommunications Veterinary Pet Insurance Company 588" 680.59 Employee Voluntary Benefits Vision Internet Providers,Inc 58895 255.00 Professional ServiceroWeb Design Services MR Scientific Products M896 3,892.22 Laboratory Services&Supplies W.M.Lyles Co. M651 413.439.85 Construction W.M.Lyles Co. 58790 870,784.25 Construction Water Environment Federation 58760 581.00 Professional Organizations Meetingffraining/Membership Water Environment Federation M897 1,391.00 Professional Organizations Meeting/Training/Membership West Coast Arbonsts,Inc. U761 4,650.00 Landscape Maintenance Services West Coast Arborsts,Inc. 58898 600.00 Landscape Maintenance Services Western BluennsighVHewleti Packard 58889 10,427.67 Computers,Software/HaNware Winger Corporation M762 428.29 Repair&Maintenance Services and/or Supplies WPL Publishing 58900 246.00 Books&Publications Yale/Chase Matenals Handling,Inc. 58763 361.25 Electrical/Electronic Equipment,&Electric Cad Parts&Repairs Yale/Chase Materials Handling,Inc. 58901 164.94 Electnwl/Electionic Equipment,&Electric Can Parts&Repairs Yoiba Linda Water District M765 54.24 Utilities Yu-Li Tsai U773 970.07 Meeting/rmining Expense Reimbursement nnrzrwmm Page 6 of 7 EXHIBIT Return to Apenda Rom Claims Paid From 8116/13 to 8/31113 Vendor Warrant No. Amount Description 24 Hour Fire Protection,Inc. M653 3,168.69 Repair&Maintenance Services and/or Supplies 24 Hour Fire Protection,Inc. M791 1,619.00 Repair&Maintenance Services and/or Supplies Total Accounts Payable-Warrants _L6.875.791.19 Payroll Disbursements Employee Paychecks 51666 - 51703 $ 80,978.76 Biweekly Payroll(8/21/13) Employee Paychecks 51704 - 51705 751.28 Interim Payroll-Adjustment to Floater Pay(81201131 Employee Paychecks 51706 16.20 Interim Payroll-Refund OCERS Contributions(W20113) Employee Paychecks 51707 - 51729 3,716.33 Interim Payroll-ARBA(W3W13) Direct Deposit Statements 341846 -3244N 1,388,962.68 Siveekly Payroll(8/21/13) Direct Deposit Statements M2405 -342584 41,977.65 Interim Payroll-ARBA(W30/13) Total Payroll Disbursements $ 1,516,402.90 Wire Transfer Payments OCSD Payroll Taxes&Contributions $ 801,342.05 Biweekly Payroll(W21/13) Union Bank of California 50,613.15 Workers'Compenni S.M.(8/1W13) Total Wire Transfer Payments $ 851,955.20 Total Claims Paid 8116113-8131113 $ 9,24g149.29 EXHIBIT S ni,12101mm Page 7 of 7 WCM13 Item No. 2(a) Orange County Sanitation District MINUTES BOARD MEETING August 28, 2013 1 SANITgTj�y Q ? ¢ e� o � Fcl�N HE Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 08/2a/13 Minutes of Board Meeting Page 1 of 6 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was held on August 28, 2013, at 6:30 p.m., in the Administration Building. Director Kim delivered the invocation and led the Pledge of Allegiance. The Clerk of the Board declared a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X Troy Edgar, Chair Richard Murphy X John Anderson, Vice Chair Gene Hernandez X Tom Beamish Rose Espinoza David Benavides X Sal Tinajero X Steven Choi Christina Shea X Keith Curry Rush Hill X Tyler Diep AI Krippner X James M. Ferryman Bob Ooten X Steven Jones Kris Beard X Peter Kim Gerard Goedhart A Lucille Kring Jordan Brandman A Michael Levitt Gordon Shanks Brett Murdock X Roy Moore X Steve Nagel Mark McCurdy X Prakash Narain Doug Bailey X Scott Nelson Constance Underhill X Janet Nguyen Shawn Nelson X John Nielsen Jerry Amante X Brad Reese Greg Mills X Gregory Sebourn Jan Flory X Joe Shaw Joe Carchio X David Shawver Carol Warren X Fred Smith Steve Berry X Teresa Smith Mark Murphy A John Withers Douglas Reinhart STAFF MEMBERS PRESENT: Jim Herberg, General Manager; Bob Ghirelli, Assistant General Manager; Nick Kanetis, Director of Engineering, Nick Arhontes, Director of Facilities Support Services; Ed Torres, Director of Operations and Maintenance; Lorenzo Tyner, Director of Finance & Administrative Services; Jeff Reed, Director of Human Resources; Maria E. Ayala, Clerk of the Board; Janine Aguilar, Jennifer Cabral; Jim Colston; Norbert Gaia; Al Garcia; Kelly Lore; Rich Spencer, and Paula Zeller. OTHERS PRESENT: Brad Hogin, General Counsel, and Jim Ruth, Consultant. 0812W13 Minutes of Board Meeting Page 2 of 6 PUBLIC COMMENTS: None. REPORTS: John Anderson, Board Vice-Chair, reported out on his attending the CASA Conference in San Diego. Chair Edgar announced that a draft of the new OCSD Vision statement was distributed tonight for the Board's review. Chair Edgar also reported on the District's Honor Walk Ceremony. Ed Torres, Director of Operations and Maintenance, presented employee James Hauter, Instrumentation Tech II, with a 25-Year Service Award. Jim Herberg, General Manager, reported on the two upcoming Board workshops. The Board workshop of September 11 will focus on the draft vision statement; and the October 2 workshops will focus on the other elements of the strategic plan for the next five years. Director Nguyen arrived at the meeting at 6:46 p.m. RATIFICATION OF PAYMENT OF CLAIMS: 1. MOVED, SECONDED, AND DULY CARRIED: Ratify payment of claims of the District, by roll call vote, as follows: Claims Paid for the Period Ending: 07/15/13 07/31/13 Totals $7,723,444.37 $14,907,253.97 Directors Curry, Diep, Moore, Nguyen, Nielsen, and Sebourn abstained. CONSENT CALENDAR: The Clerk of the Board announced the following corrections to Agenda Item No. 2: • On the 07/24/13 Board Minutes, Item 16, Page 6 of 8, should read that Director Nguyen "abstained" - not opposed. • Under "Consideration of Action, if any, on matters considered in closed session". The report out of closed session should be: 0812W13 Minutes of Board Meeting Page 3 of 6 (1) Board of Directors unanimously voted to deny the claim related to Project P1-102. (2) Board of Directors authorize litigation against Federal OSHA Department to recover stolen data. (3) Board of Directors authorizes General Council to appear and defend the interest of the Orange County Sanitation District. 2. MOVED, SECONDED, AND DULY CARRIED: Approve minutes, with corrections, for the Regular Board Meeting held on July 24, 2013. Directors Kim and Underhill abstained. 3. A. MOVED, SECONDED, AND DULY CARRIED: Rescind June 26, 2013 Board Meeting Minute Order#16 awarding a Contract to Air Products and Chemicals Inc., for the purchase of liquid oxygen, Specification No. C-2013-567BD, due to the company's failure to comply with the insurance and indemnification requirements; and, B. Ratify contract award to the second lowest responsive and responsible bidder, Air Liquide, Industrial U.S LP, Specification No. C-2013-567BD, for the period August 1, 2013 through July 31, 2014 with four additional one- year renewals, for the purchase of liquid oxygen at a unit price of $0.2234 per 100 cubic feet delivered, plus applicable sales tax for an estimated annual amount of $555,000 subject to price adjustments based upon energy, labor, maintenance and distribution indices from Southern California Edison and Bureau of Labor Statistics for subsequent contract periods; and for services related to routine and emergency maintenance of OCSD's liquid oxygen storage and vaporization equipment for an estimated annual amount of $20,000, based upon actual invoice costs plus 20% and labor cost at established manpower hourly rates adjusted annually based upon Bureau of Labor Statistics' Employment Cost Index; and, C. Ratify Amendment No. 1 to contract with Air Liquide, Industrial U.S. LP, Specification No. C-2013-567BD to amend contract term. Agenda Item No. 4 was pulled by staff from the Consent Calendar and addressed as a Non-Consent Item. 0812B113 Minutes of Board Meeting Page 4 of 6 Nick Kanetis and Rob Thompson gave a brief background on the zoning permitting. 4. A. MOVED, SECONDED, AND DULY CARRIED: Approve an Agreement between the City of Fountain Valley and the Orange County Sanitation District for the City building permits of thirteen existing buildings that were constructed at Reclamation Plant No. 1, for a total cost of $315,945.04; and, B. Approve the transfer of $145,777.89 from the Replacement, Rehabilitation, and Refurbishment line 13, page A-2 of the 2013-14 Budget update, to the P1-115 budget to cover the cost for permitting eight of the thirteen buildings. STEERING COMMITTEE: Chair Edgar reported that the Steering Committee has established a Legislative and Public Affairs Special Committee that should last no more than one year. The Committee will be working with Heather Stratman to develop these legislative and public affairs programs in the District. 5. MOVED, SECONDED, AND DULY CARRIED: Approve minutes for the Steering Committee Meeting held on July 24, 2013. CLOSED SESSION CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS: 54956.9(d)(1), 54956.9(d)(4), and 54957.6. The Board convened in closed session at 7:05 p.m. to discuss five items. Confidential Minutes of the Closed Session have been prepared in accordance with the above Government Code Sections and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. RECONVENE IN REGULAR SESSION: The Committee reconvened in regular session at 7:25 p.m. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: Brad Hogin, General Counsel, reported out that the Board reached a unanimous decision to settle the Kiewit litigation regarding Project P1-102, with a settlement of $500,000 in exchange for a settlement of action and release from all future liability. 0812W13 Minutes of Board Meeting Page 5 of 6 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: The Chair adjourned the meeting at 7:26 p.m. until the next regular meeting on August 28, 2013, at 6:30 p.m. Maria E. Ayala, Clerk of the Board 08/28/13 Minutes of Board Meeting Page 6 of 6 Item No. 2(b) Orange County Sanitation District MINUTES SPECIAL BOARD MEETING Board Workshop September 11 , 2013 1 SANI rAT�oy O� c 9 ¢ ea 0 1 Fcl�N HE Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 09/11/13 Minutes of Board Wore hop Page 1 of 3 ROLL CALL A special meeting of the Board of Directors of the Orange County Sanitation District was held on September 11, 2013, at 6:30 p.m., in the Administration Building. Chair Edgar led the Pledge of Allegiance. The Clerk of the Board declared a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X Troy Edgar, Chair Richard Murphy X John Anderson, Vice Chair Gene Hernandez X Tom Beamish X Rose Espinoza X David Benavides Sal Tinajero X Steven Choi X Christina Shea X Keith Curry X Rush Hill X Tyler Diep AI Krippner X James M. Ferryman X Bob Ooten A Steven Jones Kris Beard X Peter Kim Gerard Goedhart X Lucille Kring Jordan Brandman X Michael Levitt Gordon Shanks X Brett Murdock X Roy Moore X Steve Nagel X Mark McCurdy X Prakash Narain Doug Bailey X Scott Nelson X Constance Underhill X Janet Nguyen Shawn Nelson A John Nielsen Jerry Amante X Brad Reese Greg Mills X Gregory Sebourn Jan Flory X Joe Shaw Joe Carchio X David Shawver X Carol Warren X Fred Smith Steve Berry X Teresa Smith Mark Murphy X John Withers Douglas Reinhart STAFF MEMBERS PRESENT: Jim Herberg, General Manager; Bob Ghirelli, Assistant General Manager; Nick Kanetis, Director of Engineering, Nick Arhontes, Director of Facilities Support Services; Ed Torres, Director of Operations and Maintenance; Lorenzo Tyner, Director of Finance & Administrative Services; Jeff Reed, Director of Human Resources; Maria E. Ayala, Clerk of the Board; and Jennifer Cabral; Norbert Gala; Al Garcia; and Paula Zellar. OTHERS PRESENT: Brad Hogin, General Counsel, and Brent Ives, Consultant. 09/11/13 Minutes of Boad WOMshop Page 2 of 3 PUBLIC COMMENTS: None. OPENING REMARKS: Chair Edgar thanked the Directors and Alternate Directors for attending the meeting. He briefly went over the agenda for tonight's workshop. 2012 STRATEGIC PLAN Jim Herberg, General Manager, reported on the 2012 Strategic Plan initiatives. He gave an overview of each one and reported on the outcome of the work progress over the last five years. STRATEGIC PLAN PROCESS Brent Ives, Consultant, explained the process that will be taking place in order to develop and establish the Sanitation District's new strategic plan for the next five years. DRAFT OCSD MISSION AND VISION STATEMENTS Mr. Ives facilitated the dialogue for the Board on the proposed draft vision statement. The Board provided input and made suggestions towards an updated vision statement. CONCLUSION Mr. Ives concluded the meeting with an explanation of the next steps to be taken. A second Board workshop will be taking place on October 2. At this meeting, the Board will focus on the strategic initiatives for the next five years. The Board was presented with the proposed strategic initiatives for 2013-19 Strategic plan that will be discussed on October 2. Various Board members made suggestions of topics to consider for future strategic initiatives, such as: public outreach program; asset management; a goal to produce energy; updating the District's infrastructure; etc. ADJOURNMENT: The Chair adjourned the meeting at 8:30 p.m. until the next regular meeting on September 25, 2013, at 6:30 p.m. Maria E. Ayala, Clerk of the Board 09/11/13 Minutes of Board WOMshop Page 3 of 3 BOARD OF DIRECTORS Neebng Dare I TOBA.Of Dir. — Og/25/13 AGENDA REPORT em Number Item Numbe 3 Orange County Sanitation District FROM: James D. Herberg, General Manager SUBJECT: GENERAL MANAGER'S FY 2012 — 2013 WORK PLAN YEAR-END REVIEW AND FY 2013-2014 WORK PLAN GENERAL MANAGER'S RECOMMENDATION A. Receive and file the General Manager's FY 2012 - 2013 Work Plan Year End Review; and B. Approve the General Manager's FY 2013 -2014 Work Plan SUMMARY Each year, the General Manager prepares a work plan of activities for the coming fiscal year and prior to presenting to the Board of Directors, reviews the plan with the Steering Committee. Additionally, a review of accomplishments for the past year is presented. Both documents are now being submitted for consideration by the Board of Directors. PRIOR COMMITTEE/BOARD ACTIONS August 2013 - Presented the proposed General Manager's FY 2013 -14 Work Plan to the Steering Committee for review. ADDITIONAL INFORMATION N/A CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A ATTACHMENT The following attachment(s) are provided in hard copy and may be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: • General Manager's FY 2012 - 2013 Work Plan Year-End Review • General Manager's FY 2013 - 2014 Work Plan Page 1 of 1 ada�9 GENERAL MANAGER`S 2012-2013 WORK PLAN YEAR-END REVIEW SEPTEMBER 25, 2013 tiC txF ORANGE COUNTY SANITATION DISTRICT Memorandum September 25, 2013 TO: Chairman and Members of the Board of Directors FROM: James D. Herberg, General Manager SUBJECT: Fiscal Year 2012-2013 Year-End Revie At the close of the 2012-13 Fiscal Year, I am pleased to present this year-end review of progress on the General Manager's work plan. 1. LABOR NEGOTIATIONS: Conduct labor negotiations with the Supervisor Group and Professional Group (S&P) bargaining units over successor labor agreements that expired June 30, 2013, in compliance with the Meyers-Milias-Brown Act (MMBA). STATUS: Preliminary discussions with the exclusive representative of the S&P bargaining units occurred in December 2012. The S&P Groups' initial proposals were provided on April 2na. Good faith bargaining in compliance with the MMBA is demonstrated by the Sanitation District in the following: • Seven meet and confer sessions conducted in the past three months. • Six proposals/counterproposals exchanged over that period. • Three meetings conducted by the Board to consider S&P proposals over that period, including one special meeting. • Two of those Board meetings were conducted prior to the adoption of the Fiscal Year 2013-2014 budget, and the third one occurred at the Board meeting during which the budget was adopted. Return to Agenda Report • The Board provided negotiating instructions during conference with Its labor representatives during the three meetings,following thoughtful consideration of S&P proposals. The S&P Groups are currently considering the Sanitation District's June 27,h counterproposal. The Sanitation District continues to meet its duty to bargain and anticipates receiving a response from S&P in the near future. The Memoranda of Understanding for the Local 501 and OCEA bargaining units expire on June 30, 2014. 2. PUBLIC OUTREACH: Undertake aggressive public education and outreach efforts leading up to June 2013 Board vote on rates. STATUS: COMPLETED. Staff developed a comprehensive outreach plan that focused on community outreach and elected official support to both lay the foundation, as well as inform the various audiences of the critical work that OCSD does and the important decision that the Board of Directors would be faced with regarding rates. Beginning in July 2012, OCSD provided 142 plant tours, spoke at more than 30 events including high profile engagements such as city council meetings,special districts Board meetings, and professional organizations including the Orange County Business Council (OCBC),Orange County Taxpayer Association (OCTax), and various Chambers of Commerce. We received letters of support endorsing the proposed rate Increase from both OCBC and OCTax. In addition, OCSD participated in 30 community events and for the first time ever, hosted a joint Open House with the Orange County Water District that was attended by over 1,000 people. These efforts provided direct contact by OCSD to more than 5,000 OCSD customers. 3. RATE PROPOSAL: Recommend a rate program for Board approval no later than June 2013. 2 STATUS: COMPLETED. Over the past two years, the Board Chair and Vice Chair have worked closely with the General Manager and staff to thoroughly explore options for a sustainable rate schedule to replace the rate schedule that expired on June 30, 2013. After extensive meetings among Board leadership and Committee briefings, staff has proposed a five-year rate program that essentially addresses inflationary increases (4.8% in the first year followed by 2.4% in the following years) while maintaining our current level of service. These rate adjustments were minimized by various cost efficiencies and the prudent use of District reserves; and will keep OCSD's rates in the bottom third of its comparable agencies. Following additional analysis, presentations to member cities and agencies and Committee and Board meetings, at its April Board meeting, the Board approved the proposed new five-year rate program which achieves the goals of keeping OCSD's rates among the lowest in the state, issues no new debt and prudently reduces it reserves. These rates went into effect July 1, 2013. 4. SECONDARY TREATMENT: Complete commissioning of secondary treatment by the December 31, 2012 consent decree deadline and optimize the various treatment processes considering cost, compliance, and GWRS requirements. Conduct a celebratory event in fall 2012 to recognize this historic milestone. STATUS: COMPLETED. This $600 million construction project is complete and all of the facilities are constructed, tested and in operation. The facilities are operating in accordance with a secondary treatment operational study that was completed in 2011 to optimize the operation of the secondary treatment facilities relative to meeting permit conditions, reducing risk and reducing costs. In October 2012, the Sanitation District held a dedication ceremony to celebrate the completion of the secondary treatment program and to mark this milestone for the Sanitation District and for the public. General Counsel has petitioned the federal district court to dismiss the consent decree. Pace, 3 Return W Ma .d,Reoort S. OCEAN PROTECTION AND DISINFECTION: Complete water quality studies and recommend a solution for improving environmental conditions around the ocean outfall. STATUS: COMPLETED. Since 2005, there has been a gradual decline in the population of marine organisms that live in the sediments around our ocean outfall discharge. Staff has concluded ten special studies that in total indicate effluent disinfection with bleach is likely the primary cause for the decline due to the formation of chlorination by- products,as well as the presence of chlorination and de-chlorination chemical residuals. Decreased final effluent flow, especially during low flow periods, as a result of supplying 100 million gallons per day of effluent to GWRS, was initially suspected to be a contributing factor to the observed affects, however, after further investigation, staff concludes that it is not likely a contributing factor. With OCSD treating influent wastewater to full secondary standards beginning in May 2011, bleach addition has been substantially reduced and staff has seen improvement in the marine ecosystem around the outfall,though it is unclear whether full recovery can be achieved. Draft final reports have been prepared addressing not only the likely causation of the observed marine ecosystem affects, but also whether or not OCSD's disinfection of our treated effluent has resulted In any improved public health protection. Preliminary discussions with OC Health Care Agency staff to gauge the feasibility of ceasing disinfection has been initiated and staff will be discussing this issue with the Board at the upcoming Strategic Planning workshop. 6. TRANSITION PLAN: Successfully implement the Steering Committee's General Manager transition plan by April 1, 2013. STATUS: COMPLETED. The new Director of Engineering, Nick Kanetis, started on January 21 and I assumed the role of General Manager on April 1,as scheduled. vnp•4 7. SAWPA ARBITRATION: Working with General Counsel, aggressively pursue successful outcome on SAWPA's arbitration claim. STATUS: Document discovery and interrogatories for the arbitration claim are complete. Parties continue to proceed with percipient witness depositions. The final percipient witness for OCSD was deposed July 9". The percipient witness depositions should be completed by August 1". The parties exchanged their designation of expert witnesses on June &", the parties may supplement their expert witness lists by July 19`". The Sanitation District at this time does not foresee any reason to supplement its expert witness designation. Expert witness depositions should be concluded by September 18, 2013. Reserved Hearing Dates for the arbitration are as follows: November 7,8, 13, 14, 15,25, 26, 27. B. LOCAL SEWER TRANSFERS: Complete the transfer of local sewers to member agencies and cities,focusing on completion of the Tustin transfer. STATUS: Staff continues to work with the City of Tustin to transfer 174 miles of small diameter local sewers within Tustin and the unincorporated areas north of the City including El Modena in the City of Orange's sphere of influence. The City met with OCSD and requested additional time to evaluate the proposal and work with its City Council. We expect a conclusion by December 2013. OCSD currently collects a local fee in these areas. The City of Anaheim has accepted the transfer of 3.02 miles of local sewers in Ball, Walnut, Katella, and Ninth Streets. Discussions have also been held with the City of Santa Ana, City of Huntington Beach, City of Orange, Costa Mesa Sanitary District and the City of Newport Beach regarding potential transfer of local sewer facilities from OCSD. The 2013-14 Strategic Planning process will provide additional direction regarding the transfer of sewers. Pagc 5 Return to Aoenda Reporl 9. TRANSPARENCY: In response to Grand Jury recommendations, complete upgrades to OCSD website to enhance transparency related to compensation and benefits information and undertake performance audits of various programs. STATUS: COMPLETED. On June 14, 2012, the Orange County Grand Jury released a report entitled, "Transparency Breaking Up Compensation Fog— But Why Hide Pension Costs?' The report evaluated each city, county and special district website for compensation cost transparency. This report assigned OCSD an "A" grade for accessibility and a less than favorable grade for reporting executive and employee compensation. We launched a new section on our Website called OoenGov that, among other things, displays compensation information, in a format consistent with the recommendations of the Grand Jury. OpenGov is our way of showing how important transparency is to us. This is a tool to locate documents and a resource for navigating the governmental maze of requirements, regulations, and information as well as an educational resource for the public to learn about who we are and what we do. In addition to these enhancements, we also offer an "e-notify" system. By signing up, the public can be notified by email when new Board agendas, minutes, or other reports are posted. Over the past year, we extended our outreach with the use of Twitter YouTube Facebook and other social media communities. Finally, OCSD staff, working with a Board appointed audit subcommittee, undertakes an external review of selected programs to ensure they are operating efficiently and in accordance with the Board of Directors' policies and procedures. Recent examples include audits of debt management, sole source contracts, information technology, asset management, and construction contracts. 10. WORKFORCE PLANNING AND DEVELOPMENT: Continue to develop comprehensive workforce planning and development activities that improve workforce capability, P"'.6 adaptability, efficiency, and accountability, and that address employee turnover and retirements. STATUS: Workforce planning and development activities remain a priority for the Sanitation District.These activities are focused on ensuring available technical skills and knowledge in the labor pool and leadership development. Staff engages organizations external to the Sanitation District to maximize these efforts, as well as leverages internal resources to improve on these opportunities. Highlights of such activities include the following: Orange County Workforce Investment Board (OCW IB) A partnership has been developed with the OCWIB to: • Pursue recruitment outreach to the community and veterans; • Provide training fund subsidies for new hires; • Program for labor pool needs with local educational institutions; • Advertise job openings through the OCWIB One-Stop Career Center; and, • Organize a water/wastewater industry symposium for October 2013 to identify industry needs. Vocational Internship Program (expansion including Veterans) Steps have been taken to ensure that viable pools of qualified applicants are accessible in the future for Sanitation District operations and maintenance jobs by establishing partnerships with Santiago Canyon Community College and San Bernardino Valley College for paid internships. • Santiago canyon College A Vocational Internship Program was initiated in cooperation with Santiago Canyon Community College in 2010. The program remains ongoing, expanding Ng". Return W Aaentla Reoort from two interns to six in July 2013. Participating students are required to be enrolled in the Water Utility Science course of study. • San Bernardino Valley College Similarly, a relationship has been established with San Bernardino Valley College. The relationship supports U.S. Veterans, of which seven are participating. The Veterans were welcomed at a reception and workplace orientation in June 2013. Participating Veterans are required to be enrolled in the Water Supply Technology Program. These internships provide access over a 52-week period to hands-on learning environments in our workplace. Students develop meaningful career-related knowledge and gain practical job-related experience, rotating through five different work areas: plant operations; collections system operations; mechanical maintenance; rebuild shop; and, electrical and instrumentation support. Students from both colleges earn educational credits toward an associate degree or certificate in their respective programs and work toward qualifying for wastewater industry professional association and/or state wastewater certification exams. Local Water Advisory Committee Staff established a collaborative effort between local water/wastewater agencies and community colleges to address educational program needs, future industry needs, and workforce development efforts. Building Leaders.Abilities. and Skills for Tomorrow(BLAST) The BLAST program remains critical for the ongoing development of the workforce. Job shadowing was Implemented as a resource available to interested employees. Onsite training opportunities offered through the BLAST program have been utilized by employees, with 167 employees having participated in at least one of the bi-monthly Rig'S leadership training courses or Supervisor Transition and Readiness Training (S.T.A.R.T.). The BLAST program training schedule was established for FY 2013/2014. 11. SAFETY AND SECURITY: Working with the Department of Homeland Security,conduct a thorough assessment of our emergency preparedness planning and fill identified gaps, including business continuity planning, and security upgrades to treatment plants and pump stations. STATUS: Risk Management reviewed its third party Voluntary Protection Program (VPP) Gap Analysis study to compare OCSD's safety program improvement to the 2010 VPP Gap Analysis. OCSD has improved its safety programs based upon the study from meeting 81% of Cal/OSHA safety program requirements to meeting 92%. Staff worked with the OC Sheriff, DHS, and CaIEMA to receive approximately $130,000 in grant funding to improve security at its Plant No. 1 facility. The funding was used to replace analog video cameras with digital and to upgrade support equipment along with video data storage capacity. Based upon the cyber key study success at Rocky Point Pump Station, staff implemented the cyber key out to all pump stations. OCSD has contacted other public agencies to compare Business Continuity Plans (RCP) to develop OCSD's BCP. Risk Management will coordinate the organization's efforts to ensure the agency is prepared in the event daily operations are interrupted. OCSD is in the process of signing a Memorandum of Understanding with the County to use their Alert OC mass notification system. The system will allow OCSD to send out mass notification, similar to reverse 911, to tell residents and businesses in specific areas not to use the sewer if there were a failure or clog that would cause a spill. 12. STRATEGIC PLAN: Conduct a strategic planning Board workshop in October 2012 and prepare the annual update of the 5-year strategic plan in December 2012 with a critical review of our levels of service. page 9 Re(xn to Ao da Rw.rt STATUS: COMPLETED. A Strategic Planning workshop was held in October 2012 and the updated strategic plan was unanimously approved by the Board of Directors in December 2012. The updated strategic plan includes several new strategic initiatives related to chemical sustainability, business continuity planning and biosolids recycling policy. The plan also updates several levels of service related to odor complaints, secondary treatment standards,and biosolids recycling. We are making good progress implementing the Board's Strategic Plan that was adopted in October 2012. Staff has completed 50 percent of the current Strategic Plan goals,with 50 percent scheduled for completion in 2013/14. OCSD is currently meeting 87 percent of its level of service targets and we have plans and projects in place to achieve the remaining targets over the next several years. We will bring forward the complete list of results for the 2012-13 Strategic Plan during the annual Strategic Planning workshop sessions which will occur in the fall of 2013. 13. CHEMICAL SUSTAINABILITY: Continue efforts to ensure strategic positioning in the market by creating competitive markets for chemicals and reducing utilization of chemicals. STATUS: For over 15 years, OCSD had been dependent on a single supplier for ferric chloride. Over the last year,staff proactively worked with potential suppliers and other regional wastewater entities to attract new suppliers in a single source dominated ferric chloride supply market. At the May 2013 Board Meeting, multiple vendor contract awards were approved for all four qualified vendors who submitted proposals in response to the Sanitation District's ferric chloride RFP, resulting in a 15 percent annual savings compared to the previous single source contract. The multiple vendor contracts will significantly mitigate potential regulatory compliance and fiscal implications related to the risk of ferric supply disruption from its current single source. Staff will continue its efforts to ensure chemical sustainability for all chemicals used in the treatment plant, including polymers. These efforts will include evaluating use of Page 10 alternative chemicals, usage optimization and encouraging a competitive chemical supply market environment. 14. CAPITAL IMPROVEMENT PROGRAM: Continue the transition from expansion to rehabilitation in our CIP program,with a focus on completing key projects Including SARI line, secondary treatment, and beach box repair. Integrate supplemental CIP program staffing through Jacobs Engineering project management consulting services. STATUS: Over the last year, the secondary treatment expansion program came to a close with the completion of all of the major secondary treatment projects and a petition in for dismissal of the EPA consent decree. Key rehabilitation projects in the capital improvement program continue to move forward, including rehabilitating and replacing the biosolids dewatering facilities at both treatment plants, digester rehabilitations at both treatment plants and several pipeline rehabilitations in the cities of Newport Beach and Tustin. The Santa Ana River Interceptor (SARI) pipeline project being completed through the County of Orange is continuing construction and remains on schedule to be completed in late 2013, prior to the 2013-14 rain season. Earlier this year,the Sanitation District successfully completed the difficult rehabilitation of the primary ocean outfall pipeline and beach box which is an extremely sensitive facility. Both the ocean outfall project and the SARI pipeline project remove critical risks for the treatment facilities. Several sewer rehabilitation projects in the Cities of Newport Beach and Tustin are moving forward with the first of these projects starting construction in early July, while others are being advertised for construction currently or in the near future. The major biosolids dewatering facility is starting construction at Plant No. 1 with the Plant No. 2 project scheduled to be advertised for construction in late 2013. Jacobs Engineering is assisting staff where needed to provide timely and efficient resources to keep projects moving forward successfully. Page 11 Return to Agenda Report 15. ADMINISTRATIVE FACILITIES MASTER PLAN: Complete a comprehensive study of space planning needs by October 2012 and implement recommendations for access compliance improvements and office building options. STATUS: A study was completed by the Austin Company in October 2012 that reviewed all of the Sanitation District's administrative facilities and recommended potential master plan solutions taking into account the business needs of the Sanitation District, the age and condition of the facilities and compliance with building codes. These recommended alternatives will be presented to the Board through the strategic planning process. Board direction will serve as a guide for future improvement projects to these facilities. 1Da:Clr VeY.r li GENERAL MANAGER'S 2013-2014 WORK PLAN SEPTEMBER 25, 2013 Hti • Ilq,� 4 orange County sanitation , , District n Return to Agenda Reoor[ ORANGE COUNTY SANITATION DISTRICT Memorandum September 25,2013 TO: Chairman and Members of the Board of Directors FROM: James D. Herberg,General Manager SUBJECT: Fiscal Year 2013-2014 Work Plan I am pleased to present to you my work plan for Fiscal Year 2013-2014. 1 have identified thirteen areas that I will focus on during the next year including strategic planning, labor negotiations, and operational optimization. This work plan was reviewed with the Steering Committee in August. 1. EFFECTIVE OUTREACH AND COMMUNICATIONS: Implement effective public outreach and legislative affairs programs to position the Sanitation District as a leading voice on innovative solutions to infrastructure issues. 2. LABOR NEGOTIATIONS: Complete negotiations with the Supervisor Group and Professional Group (S&P) bargaining units over successor labor agreements that expired June 30, 2013, in compliance with the Meyers-Milias-Brown Act. Conduct labor negotiations with the Local 501 and OCEA bargaining units over successor labor agreements that expire June 30,2014. 3. SAWPA ARBITRATION: Working with General Counsel,aggressively pursue a successful outcome on SAWPA's arbitration claim. 4. LOCAL SEWER TRANSFER: Complete the transfer of local sewers to the City of Tustin and unincorporated areas north of Tustin by December 31, 2013. Make a recommendation to the Board whether to continue to pursue transfers of other sewers and pumping facilities to local sewer agencies. S. DISINFECTION: Make a recommendation to the Board of Directors regarding the feasibility of ceasing the ocean outfall (final effluent) disinfection program considering scientific studies, regulatory requirements and public perception. 6. ADMINISTRATIVE FACILITIES: Working with the Steering Committee and the Board, devise an approach for setting direction on future Improvement projects to replace or rehabilitate the Sanitation District's administrative buildings. 7. BUSINESS RISK MANAGEMENT: Undertake a comprehensive review of risk exposure to the Sanitation District's continued operations and put in place mitigation measures and updated emergency response plans to address identified risks. Prepare a business continuity plan to ensure OCSD is prepared to continue operations after a significant risk event. 8. STRATEGIC PLAN: Conduct strategic planning workshops with the Board in September and October 2013, and prepare an updated 5-year strategic plan for the Board's consideration in November 2013. 9. OPERATIONAL OPTIMIZATION: Continue to evaluate and optimize operations at the Sanitation District focusing on asset management, use of technology for maintenance planning and scheduling, and implementing a utility management model. 20. BOARD ORIENTATION: Review, evaluate and implement an improved approach for New Board Orientation and ongoing Board education. Nge 2 ReW,n to Ao da Rw.rt 11. SAFETY AND SECURITY: Working with the Department of Homeland Security and building on a previous assessment of Plant No. 1, staff has conducted an assessment of our emergency preparedness planning at Plant No. 2 and has identified some vulnerability gaps. Staff will work to close these gaps with specific focus on access control systems at the pump stations, metering and diversion structures, monitoring stations and other remote facilities. 12. CAPITAL IMPROVEMENT PROGRAM: Continue the transition of the Sanitation District's capital improvement program from increasing capacity and level of service to rehabilitation, with a focus on executing critical collections projects included in the Newport Beach construction program in concert with a well-coordinated and effective community outreach program. 13. WORKFORCE PLANNING AND DEVELOPMENT: Continue to develop comprehensive workforce planning and development activities that improve workforce capability, adaptability, efficiency, and accountability, and that address employee turnover and retirements. 1nH.dr Ng 3 BOARD OF DIRECTORS Meeting Date TO 91j5 Dir. AGENDA REPORT Item Number IemNumber a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Nick Kanetis, Director of Engineering CIP Project Manager: Victoria Pilko SUBJECT: PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1, PROJECT NO. P1-112, AND PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2, PROJECT NO. P2-101 GENERAL MANAGER'S RECOMMENDATION A. Approve a decrease in the budget for Plant Water System Rehabilitation at Plant No.1, Project No. P1-112, by $475,000 for a total project budget of $9,094,000; and B. Approve an increase in the budget for Plant Water System Rehabilitation at Plant No. 2, Project No. 132-101, by $475,000 for a total project budget of $4,484,000; and C. Approve plans and specifications for Plant Water System Rehabilitation at Plant No. 1, Project No.P1-112, and Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101, on file at the Office of the Clerk of the Board; D. Approve Addendum Nos. 1, 2, and 3 to the plans and specifications; and E. Receive and file bid tabulation and recommendation; and F. Award a construction contract to W. M. Lyles Co. for Plant Water System Rehabilitation at Plant No. 1, Project No. 131-112, and Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101, for a total amount not to exceed $6,038,000; and G. Approve a contingency of $374,300 (10%) for Plant Water System Rehabilitation at Plant No. 1, Project No. P1-112; and H. Approve a contingency of $275,400 (12%) for Plant Water System Rehabilitation at Plant No. 2, Project No. 132-101. SUMMARY The purpose of Plant Water System Rehabilitation at Plant No. 1, Project P1-112 and Plant Water System Rehabilitation at Plant No. 2, Project P2-101, is to rehabilitate or replace deteriorated plant water pipes and valves at both plants. Page 1 of 3 To be efficient, both of these projects were bid together as one contract since the type of work, engineering discipline and professional trades are very similar and an administrative savings could be realized on managing the construction of the two projects together as one. The construction costs will be tracked separately between the two projects as budgeted. The design work for Project No. P2-101 was completed by Carollo Engineers in the spring 2013, and the design work for Project No. P1-112 was completed by in-house engineers in the spring 2013. The Orange County Sanitation District (Sanitation District) advertised for bids on June 11, 2013. Four sealed bids were received on July 30, 2013. The bids were evaluated in accordance with the Sanitation District's policies and procedures. W. M. Lyles Co. was deemed the lowest responsive, responsible bidder. The total bid amount was significantly lower than the engineers estimate. However, the individual project bid for Project No. P2-101 was higher than budgeted. A budget increase for Project No. P2-101 is being recommended, along with a commensurate decrease in budget for Project No. P1-112 to keep the overall Capital Improvement Program budget unchanged. Staff recommends awarding a construction contract to W. M. Lyles Co. for Plant Water System Rehabilitation at Plant No. 1, Project No. P1-112, and Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101, for a total amount not to exceed $6,038,000. A contingency for change orders is being requested at 10% for Project No. P1-112 and 12% for Project No. P2-101 due to the higher than normal risks associated with rehabilitation work in congested tunnels with limited access. Summary information regarding project budget and bid costs is as follows: P2-112/P2-101 Project Budget $13,578,000 Construction Contract Budget $ 7,320,000 Engineer's Estimate $ 7,070,000 Lowest Responsive, Responsible Bid $ 6,038,000 High Bid $10,761,080 Bidder W.M. Lyles Company $ 6,038,000 J.F. Shea Construction $ 6,494,691 Environmental Construction $ 8,283,470 Irwin Industries $10,761,080 Page 2 of 3 PRIOR COMMITTEE/BOARD ACTIONS None. ADDITIONAL INFORMATION None. CECIA A Notice of Exemption was filed and recorded on April 14, 2011. BUDGET/DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted (FY 2013-14 Update, Page A-10, Item 75 for P1-112 and FY 2013-14 Update, Page A-10, Item 76 for P2-101). The P1-112 budget is sufficient for the recommended action and the P2-101 budget will be funded from offsets in the CIP program. Date of ADDroval Contract Amount Continaencv 09/25/13 $3,743,000 (P1-112) $374,300(10%) 2 295 000 (P2-101) $275,400(12%) $6,038,000 ATTACHMENT The following attachment(s) may he viewed on-line at the OCSD wehsite (www.ocsd.com) with the complete agenda package: • Construction Contract NK:VP:dm:gc Page 3 of 3 Return to Aaenda Report PART A CONTRACT AGREEMENT C-CA-020113 TABLE OF CONTENTS CONTRACT AGREEMENT SECTION - 1 GENERAL CONDITIONS..................................................................1 SECTION -2 MATERIALS AND LABOR.................................................................4 SECTION -3 PROJECT..........................................................................................4 SECTION -4 PLANS AND SPECIFICATONS ........................................................5 SECTION -5 TIME OF COMMENCEMENT AND COMPLETION ..........................5 SECTION -6 TIME IS OF THE ESSENCE .............................................................5 SECTION -7 EXCUSABLE DELAYS......................................................................6 SECTION -8 EXTRA WORK...................................................................................6 SECTION -9 CHANGES IN PROJECT...................................................................7 SECTION - 10 LIQUIDATED DAMAGES FOR DELAY.............................................7 SECTION - 11 CONTRACT PRICE AND METHOD OF PAYMENT.........................7 SECTION - 12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS ..............................................................................................9 SECTION - 13 COMPLETION.................................................................................10 SECTION - 14 CONTRACTOR'S EMPLOYEES COMPENSATION.......................10 SECTION - 15 SURETY BONDS ............................................................................12 SECTION - 16 INSURANCE....................................................................................13 SECTION - 17 RISK AND INDEMNIFICATION.......................................................22 SECTION - 18 TERMINATION................................................................................22 SECTION - 19 WARRANTY....................................................................................23 SECTION -20 ASSIGNMENT.................................................................................24 SECTION -21 RESOLUTION OF DISPUTES ........................................................24 SECTION -22 SAFETY& HEALTH........................................................................24 SECTION -23 NOTICES.........................................................................................25 C-CA-020113 Return to Aaende Report CONTRACT AGREEMENT ORANGE COUNTY SANITATION DISTRICT PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 And PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 THIS AGREEMENT is made and entered into, to be effective, this September 25, 2013, by and between W.M. Lyles Company, hereinafter referred to as"CONTRACTOR" and the Orange County Sanitation District, hereinafter referred to as "OCSD". WITNESSETH That for and in consideration of the promises and agreements hereinafter made and exchanged, OCSD and CONTRACTOR agree as follows: SECTION-1 GENERAL CONDITIONS CONTRACTOR certifies and agrees that all the terms, conditions and obligations of the Contract Documents as hereinafter defined, the location of the job site, and the conditions under which the Work is to be performed have been thoroughly reviewed, and enters into this Contract based upon CONTRACTOR's investigation of all such matters and is in no way relying upon any opinions or representations of OCSD. It is agreed that this Contract represents the entire agreement. It is further agreed that the Contract Documents are each incorporated into this Contract by reference, with the same force and effect as if the same were set forth at length herein, and that CONTRACTOR and its Subcontractors, if any, will be and are bound by any and all of said Contract Documents insofar as they relate in any part or in any way, directly or indirectly, to the Work covered by this Contract. A. Contract Documents Order of Precedence "Contract Documents" refers to those documents identified in the definition of"Contract Documents" in the General Conditions—Definitions. C-CA-020113 PROJECT NO. P1-112,PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101,PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 1 of 26 1. In the event of a conflict between one Contract Document and any of the other Contract Documents, the provisions in the document highest in precedence shall be controlling. The order of precedence of the Contract Documents is as follows: a. Supplemental Agreements—the last in time being the first in precedence b. Addenda issued prior to opening of Bids—the last in time being the first in precedence c. Contract Agreement d. Permits and other regulatory requirements e. Special Provisions f. General Conditions (GC) g. Notice Inviting Bids and Instruction to Bidders h. Geotechnical Baseline Report(GBR), if attached as a Contract Document I. Plans and Specifications—in these documents the order of precedence shall be: i. Specifications (Divisions 01-17) ii. Plans H. General Requirements (GR) iv. Standard Drawings and Typical Details j. CONTRACTOR'S Bid 2. In the event of a conflict between terms within an individual Contract Document, the conflict shall be resolved by applying the following principles as appears applicable: a. Figured dimensions on the Contract Documents shall govern. Dimensions not specified shall be as directed by the ENGINEER. Details not shown or specified shall be the same as similar parts that are shown or specified, or as C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 2 of 26 Return to Aaenda Report directed. Full-size details shall take precedence over scale Drawings as to shape and details of construction. Specifications shall govern as to material and workmanship. b. The Contract Documents calling for the higher quality material or workmanship shall prevail. Materials or Work described in words, which so applied, have a well known technical or trade meaning shall be deemed to refer to such recognized standards. In the event of any discrepancy between any Drawings and the figures thereon, the figures shall be taken as correct. C. Scale Drawings, full-size details, and Specifications are intended to be fully complementary and to agree. Should any discrepancy between Contract Documents come to the CONTRACTOR's attention, or should an error occur in the efforts of others, which affect the Work, the CONTRACTOR shall notify the ENGINEER, in writing, at once. In the event any doubts or questions arise with respect to the true meaning of the Contract Documents, reference shall be made to the ENGINEER whose written decision shall be final. If the CONTRACTOR proceeds with the Work affected without written instructions from the ENGINEER, the CONTRACTOR shall be fully responsible for any resultant damage or defect. d. Anything mentioned in the Specifications and not indicated in the Plans, or indicated in the Plans and not mentioned in the Specifications, shall be of like effect as if indicated and mentioned in both. In case of discrepancy in the Plans or Specifications, the matter shall be immediately submitted to OCSD's ENGINEER, without whose decision CONTRACTOR shall not adjust said discrepancy save only at CONTRACTOR's own risk and expense. The decision of the ENGINEER shall be final. C-CA-020113 PROJECT NO. P1-112,PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101,PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 3 of 26 In all matters relating to the acceptability of material, machinery or plant equipment; classifications of material or Work; the proper execution, progress or sequence of the Work; and quantities interpretation of the Contract Documents, the decision of the ENGINEER shall be final and binding, and shall be a condition precedent to any payment under the Contract, unless otherwise ordered by the Board of Directors. B. Definitions Capitalized terms used in this Contract are defined in the General Conditions, Definitions. Additional terms may be defined in the Special Provisions. SECTION—2 MATERIALS AND LABOR CONTRACTOR shall furnish, under the conditions expressed in the Plans and Specifications, at CONTRACTOR'S own expense, all labor and materials necessary, except such as are mentioned in the Specifications to be furnished by OCSD, to construct and complete the Projects, in good workmanlike and substantial order. If CONTRACTOR fails to pay for labor or materials when due, OCSD may settle such claims by making demand upon the Surety to this Contract. In the event of the failure or refusal of the Surety to satisfy said claims, OCSD may settle them directly and deduct the amount of payments from the Contract Price and any amounts due to CONTRACTOR. In the event OCSD receives a stop payment notice from any laborer or material supplier alleging non-payment by CONTRACTOR, OCSD shall be entitled to deduct all of its costs and expenses incurred relating thereto, including but not limited to administrative and legal fees. SECTION-3 PROJECT The Projects are described as: PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 And PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 4 of 26 Return to Aaenda Report SECTION —4 PLANS AND SPECIFICATONS The Work to be done is shown in a set of Plans and Specifications entitled: PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 And PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 Said Plans and Specifications and any revision, amendments and addenda thereto are attached hereto and incorporated herein as part of this Contract and referred to by reference. SECTION —5 TIME OF COMMENCEMENT AND COMPLETION CONTRACTOR agrees to commence the Projects within 15 calendar days from the date set forth in the"Notice to Proceed" sent by OCSD, unless otherwise specified therein and shall diligently prosecute the Work to completion within 815 calendar days from the date of the "Notice to Proceed" issued by OCSD, excluding delays caused or authorized by OCSD as set forth in Sections 7, 8, and 9 hereof, and applicable provisions in the General Conditions. The time for completion includes 14 calendar days determined by OCSD likely to be inclement weather when CONTRACTOR will be unable to work. In addition, CONTRACTOR shall accomplish such milestones within the periods of performance set forth in Appendix A of the Special Provisions entitled "Work Completion Schedule." SECTION —6 TIME IS OF THE ESSENCE Time is of the essence of this Contract. As required by the Contract Documents, CONTRACTOR shall prepare and obtain approval of all shop drawings, details and samples, and do all other things necessary and incidental to the prosecution of CONTRACTOR's Work in conformance with an approved construction progress schedule. CONTRACTOR shall coordinate the Work covered by this Contract with that of all other contractors, subcontractors and of OCSD, in a manner that will facilitate the efficient completion of the entire Work and C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 5 of 26 accomplish the required milestone(s), if any, by the applicable deadline(s) in accordance with Section 5 herein. OCSD shall have the right to assert complete control of the premises on which the Work is to be performed and shall have the right to decide the time or order in which the various portions of the Work shall be installed or the priority of the work of subcontractors, and, in general, all matters representing the timely and orderly conduct of the Work of CONTRACTOR on the premises. SECTION—7 EXCUSABLE DELAYS CONTRACTOR shall only be excused for any delay in the prosecution or completion of the Projects as specifically provided in General Conditions, "Extensions for Delay", and the General Requirements, "By CONTRACTOR or Others— Unknown Utilities during Contract Work". Extensions of time and extra compensation arising from such excusable delays will be determined in accordance with the General Conditions, "Extension of Time for Delay"and "Contract Price Adjustments and Payments", and extensions of time and extra compensation as a result of incurring undisclosed utilities will be determined in accordance with General Requirements, "By CONTRACTOR or Others— Unknown Utilities during Contract Work". OCSD's decision will be conclusive on all parties to this Contract. SECTION—S EXTRA WORK The Contract Price as set forth in Section 11, includes compensation for all Work performed by CONTRACTOR, unless CONTRACTOR obtains a Change Order signed by a designated representative of OCSD specifying the exact nature of the Extra Work and the amount of extra compensation to be paid all as more particularly set forth in Section 9 hereof and the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)", "OWNER Initiated Changes", and "Contract Price Adjustments and Payments". C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 6 of 26 Return b Aaen6a Report In the event a Change Order is issued by OCSD pursuant to the Contract Documents, OCSD shall extend the time fixed in Section 5 for completion of the Projects by the number of days, if any, reasonably required for CONTRACTOR to perform the Extra Work, as determined by OCSD's ENGINEER. The decision of the ENGINEER shall be final. SECTION-9 CHANGES IN PROJECT OCSD may at any time, without notice to any Surety, by Change Order, make any changes in the Work within the general scope of the Contract Document, including but not limited to changes: 1. In the Specifications (including Drawings and designs); 2. In the time, method or manner of performance of the Work; 3. In OCSD-furnished facilities, equipment, materials, services or site; or 4. Directing acceleration in the performance of the Work. No change of period of performance or Contract Price, or any other change in the Contract Documents, shall be binding until the Contract is modified by a fully executed Change Order. All Change Orders shall be issued in accordance with the requirements set forth in the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)" and "OWNER Initiated Changes". SECTION-10 LIQUIDATED DAMAGES FOR DELAY Liquidated Damages shall be payable in the amounts and upon the occurrence of such events or failure to meet such requirements or deadlines as provided in the Special Provisions, "Liquidated Damages and Incentives." SECTION—11 CONTRACT PRICE AND METHOD OF PAYMENT A. OCSD agrees to pay and the CONTRACTOR agrees to accept as full consideration for the faithful performance of this Contract, subject to any additions or deductions as provided in C-CA-020113 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 7 of 26 approved Change Orders, the sum of Six Million Thirty-Eight Thousand Dollars ($6,038,000) as itemized on the Attached Exhibit"A". Upon satisfaction of the conditions precedent to payment set forth in the General Requirements, Additional General Requirements and General Conditions (including but not limited to Sections entitled "Mobilization Payment Requirements"and "Payment Itemized Breakdown of Contract Lump Sum Prices"), there shall be paid to the CONTRACTOR an initial Net Progress Payment for mobilization. OCSD shall issue at the commencement of the job a schedule which shows: 1. A minimum of one payment to be made to the CONTRACTOR for each successive four(4)week period as the Work progresses, and 2. The due dates for the CONTRACTOR to submit requests for payment to meet the payment schedule. After the initial Net Progress Payment, and provided the CONTRACTOR submits the request for payment prior to the end of the day required to meet the payment schedule, the CONTRACTOR shall be paid a Net Progress Payment on the corresponding monthly payment date set forth in the schedule. Payments shall be made on demands drawn in the manner required by law, accompanied by a certificate signed by the ENGINEER, stating that the Work for which payment is demanded has been performed in accordance with the terms of the Contract Documents, and that the amount stated in the certificate is due under the terms of the Contract. Payment applications shall also be accompanied with all documentation, records, and releases as required by the Contract, Exhibit A, Schedule of Prices, and General Conditions, "Payment for Work—General". The Total amount of Progress Payments shall not exceed the actual C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 8 of 26 Return to Aaenda Report value of the Work completed as certified by OCSD's ENGINEER. The processing of payments shall not be considered as an acceptance of any part of the Work. B. As used in this Section, the following defined terms shall have the following meanings: 1. "Net Progress Payment" means a sum equal to the Progress Payment less the Retention Amount and other qualified deductions (Liquidated Damages, stop payment notices, etc.). 2. "Progress Payment" means a sum equal to: a. the value of the actual Work completed since the commencement of the Work as determined by OCSD; b. plus the value of material suitably stored at the worksite, treatment plant or approved storage yards subject to or under the control of OCSD since the commencement of the Work as determined by OCSD; C. less all previous Net Progress Payments; d. less all amounts of previously qualified deductions; e. less all amounts previously retained as Retention Amounts. 3. "Retention Amount"for each Progress Payment means the percentage of each Progress Payment to be retained by OCSD to assure satisfactory completion of the Contract. The amount to be retained from each Progress Payment shall be determined as provided in the General Conditions—"Retained Funds; Substitution of Securities." SECTION— 12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS Pursuant to Public Contract Code Section 22300 at seq., the CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities." C-CA-020113 PROJECT NO. P1-112,PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101,PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 9 of 26 SECTION - 13 COMPLETION Final Completion and Final Acceptance shall occur at the time and in the manner specified in the General Conditions, "Final Acceptance and Final Completion", "Final Payment" and Exhibit A-Schedule of Prices. Upon receipt of all documentation, records, and releases as required by the Contract from the CONTRACTOR, OCSD shall proceed with the Final Acceptance as specified in General Conditions. SECTION-14 CONTRACTOR'S EMPLOYEES COMPENSATION A. Davis-Bacon Act: CONTRACTOR will pay and will require all Subcontractors to pay all employees on said Projects a salary or wage at least equal to the prevailing rate of per diem wages as determined by the Secretary of Labor in accordance with the Davis-Bacon Act for each craft or type of worker needed to perform the Contract. The provisions of the Davis-Bacon Act shall apply only if the Contract is in excess of Two Thousand Dollars ($2,000.00) and when twenty-five percent (25%) or more of the Contract is funded by federal assistance. If the aforesaid conditions are met, a copy of the provisions of the Davis-Bacon Act to be complied with are incorporated herein as a part of this Contract and referred to by reference. B. General Prevailing Rate: OCSD has been advised by the State of California Director of Industrial Relations of its determination of the general prevailing rate of per diem wages and the general prevailing rate for legal holiday and overtime Work in the locality in which the Work is to be performed for each craft or type of Work needed to execute this Contract, and copies of the same are on file in the Office of the ENGINEER of OCSD. The CONTRACTOR agrees that not less than said prevailing rates shall be paid to workers employed on this C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 10 of 26 Return to Aaentle Report public works Contract as required by Labor Code Section 1774 of the State of California. Per California Labor Code 1773.2, OCSD will have on file copies of the prevailing rate of per diem wages at its principal office and at each job site, which shall be made available to any interested party upon request. C. Forfeiture for Violation: CONTRACTOR shall, as a penalty to OCSD, forfeit Two Hundred Dollars ($200.00)for each calendar day or portion thereof for each worker paid (either by the CONTRACTOR or any Subcontractor under it) less than the prevailing rate of per diem wages as set by the Director of Industrial Relations, in accordance with Sections 1770-1780 of the California Labor Code for the Work provided for in this Contract, all in accordance with Section 1775 of the Labor Code of the State of California. D. Apprentices: Sections 1777.5, 1777.6, 1777.7 of the Labor Code of the State of California, regarding the employment of apprentices are applicable to this Contract and the CONTRACTOR shall comply therewith if the prime contract involves Thirty Thousand Dollars ($30,000.00) or more. E. Workday: In the performance of this Contract, not more than eight(8) hours shall constitute a day's work, and the CONTRACTOR shall not require more than eight (8) hours of labor in a day from any person employed by him hereunder except as provided in paragraph (B)above. CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Section 1810 at sea.)of the Labor Code of the State of California and shall forfeit to OCSD as a penalty, the sum of Twenty-five Dollars ($25.00)for each worker employed in the execution of this Contract by CONTRACTOR or any Subcontractor for each calendar day during which any worker is required or permitted to labor more than eight (8) hours in any one calendar day and forty C-CA-020113 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 11 of 26 (40) hours in any one week in violation of said Article. CONTRACTOR shall keep an accurate record showing the name and actual hours worked each calendar day and each calendar week by each worker employed by CONTRACTOR in connection with the Projects. F. Record of Wages: Inspection: CONTRACTOR agrees to maintain accurate payroll records showing the name, address, social security number, work classification, straight-time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker or other employee employed by it in connection with the Projects and agrees to require that each of its Subcontractors do the same. All payroll records shall be certified as accurate by the applicable CONTRACTOR or Subcontractor or its agent having authority over such matters. CONTRACTOR further agrees that its payroll records and those of its Subcontractors shall be available to the employee or employee's representative, the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards and shall comply with all of the provisions of Labor Code Section 1776, in general. Penalties for non- compliance with the requirements of Section 1776 may be deducted from Project payments per the requirements of Section 1776. SECTION— 15 SURETY BONDS CONTRACTOR shall, before entering upon the performance of this Contract, furnish Bonds approved by OCSD's General Counsel—one in the amount of one hundred percent (100%)of the Contract amount, to guarantee the faithful performance of the Work, and the other in the amount of one hundred percent (100%)of the Contract amount to guarantee payment of all claims for labor and materials furnished. As changes to the Contract occur via approved Change Orders, the CONTRACTOR shall assure that the amounts of the Bonds are adjusted to maintain 100% of the Contract Price. This Contract shall not become effective until such Bonds C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 12 of 26 Return to Aaenda Report are supplied to and approved by OCSD. Bonds must be issued by a Surety authorized by the State Insurance Commissioner to do business in California. The Performance Bond shall remain in full force and effect through the warranty period, as specified in Section 19 below. All Bonds required to be submitted relating to this Contract must comply with California Code of Civil Procedure Section 995.630. Each Bond shall be executed in the name of the Surety insurer under penalty of perjury, or the fact of execution of each Bond shall be duly acknowledged before an officer authorized to take and certify acknowledgments, and either one of the following conditions shall be satisfied: A. A copy of the transcript or record of the unrevoked appointment, power of attorney, by- laws, or other instrument, duly certified by the proper authority and attested by the seal of the insurer entitling or authorizing the person who executed the Bond to do so for and on behalf of the insurer, is on file in the Office of the County Clerk of the County of Orange; or B. A copy of a valid power of attorney is attached to the Bond. SECTION— 16 INSURANCE CONTRACTOR shall purchase and maintain, for the duration of the Contract, insurance against claims for injuries to persons, or damages to property which may arise from or in connection with the performance of the Work hereunder, and the results of that Work by CONTRACTOR, its agents, representatives, employees, or Subcontractors, in amounts equal to the requirements set forth below. CONTRACTOR shall not commence Work under this Contract until all insurance required under this Section is obtained in a form acceptable to OCSD, nor shall CONTRACTOR allow any Subcontractor to commence Work on a subcontract until all insurance required of the Subcontractor has been obtained. CONTRACTOR shall maintain all of the foregoing insurance coverages in force through the point at which the Work under this Contract is fully completed and accepted by OCSD pursuant to the provisions of the General Conditions, "Final Acceptance and Final Completion'. Furthermore, CONTRACTOR shall C-CA-020113 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 13 of 26 maintain all of the foregoing insurance coverages in full force and effect throughout the warranty period, commencing on the date of Final Acceptance. The requirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of OCSD by CONTRACTOR under Section 17 of this Contract. Notwithstanding nor diminishing the obligations of CONTRACTOR with respect to the foregoing, CONTRACTOR shall subscribe for and maintain in full force and effect during the life of this Contract, inclusive of all changes to the Contract Documents made in accordance with the provisions of the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)" and/or"OWNER Initiated Changes", the following insurance in amounts not less than the amounts specified. OCSD reserves the right to amend the required limits of insurance commensurate with the CONTRACTOR's risk at any time during the course of the Projects. No vehicles may enter OCSD premises/worksite without possessing the required insurance coverage. CONTRACTOR's insurance shall also comply with all insurance requirements prescribed by agencies from whom permits shall be obtained for the Work and any other third parties from whom third party agreements are necessary to perform the Work (collectively, the "Third Parties'), The Special Provisions may list such requirements and sample forms and requirements from such Third Parties may be included in an attachment to the General Requirements. CONTRACTOR bears the responsibility to discover and comply with all requirements of Third Parties, including meeting specific insurance requirements, that are necessary for the complete performance of the Work. To the extent there is a conflict between the Third Parties' insurance requirements and those set forth by OCSD herein, the requirement(s) providing the more protective coverage for both OSCD and the Third Parties shall control and be purchased and maintained by CONTRACTOR. C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 14 of 26 Return to Aaentle Report A. Limits of Insurance 1. General Liability: Ten Million Dollars ($10,000,000) per occurrence and a general aggregate limit of Ten Million Dollars ($10,000,000)for bodily injury, personal injury and property damage. Coverage shall include each of the following: a. Premises-Operations. b. Products and Completed Operations, with limits of at least Ten Million Dollars ($10,000,000) per occurrence and a general aggregate limit of Ten Million Dollars ($10,000,000)which shall be in effect at all times during the warranty period set forth in the Warranty section herein, and as set forth in the General Conditions, "Warranty (CONTRACTOR's Guarantee)", plus any additional extension or continuation of time to said warranty period that may be required or authorized by said provisions. C. Broad Form Property Damage, expressly including damage arising out of explosion, collapse, or underground damage. d. Contractual Liability, expressly including the indemnity provisions assumed under this Contract. e. Separation of Insured Clause, providing that coverage applies separately to each insured, except with respect to the limits of liability. f. Independent CONTRACTOR's Liability. To the extent first dollar coverage, including defense of any claim, is not available to OCSD or any other additional insured because of any SIR, deductible, or any other form of self insurance, CONTRACTOR is obligated to assume responsibility of insurer until the deductible, SIR or other condition of insurer assuming its defense and/or indemnity has been satisfied. CONTRACTOR shall be responsible to pay any deductible or SIR. C-CA-020113 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 15 of 26 g. If a crane will be used, the General Liability insurance will be endorsed to add Riggers Liability coverage or its equivalent to cover the usage of the crane and exposures with regard to the crane operators, riggers and others involved in using the crane. h. If divers will be used, the General Liability insurance will be endorsed to cover marine liability or its equivalent to cover the usage of divers. 2. Automobile Liability: The CONTRACTOR shall maintain a policy of Automobile Liability Insurance on a comprehensive form covering all owned, non-owned, and hired automobiles, trucks, and other vehicles providing the following minimum limits of liability coverage: Either(1)a combined single limit of Five Million Dollars ($5,000,000) and a general aggregate limit of Five Million Dollars ($5,000,000)for bodily injury, personal injury and property damage; Or alternatively, (2) Five Million Dollars ($5,000,000) per person for bodily injury and Five Million Dollars ($5,000,000) per accident for property damage. 3. Umbrella Excess Liability: The minimum limits of general liability and automobile liability insurance required, as set forth above, shall be provided for either in a single policy of primary insurance or a combination of policies of primary and umbrella excess coverage. Excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automobile liability. Worker's Compensation/Employer's Liability: CONTRACTOR shall provide such Worker's Compensation Insurance as required by the Labor Code of the State of California, including employer's liability with a minimum limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease. If an exposure to Jones Act C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 16 of 26 Return b Aaenda Report liability may exist, the insurance required herein shall include coverage with regard to Jones Act claims. Where permitted by law, CONTRACTOR hereby waives all rights of recovery by subrogation because of deductible clauses, inadequacy of limits of any insurance policy, limitations or exclusions of coverage, or any other reason against OCSD, its or their officers, agents, or employees, and any other contractor or subcontractor performing Work or rendering services on behalf of OCSD in connection with the planning, development and construction of the Projects. In all its insurance coverages related to the Work, CONTRACTOR shall include clauses providing that each insurer shall waive all of its rights of recovery by subrogation against OCSD, its or their officers, agents, or employees, or any other contractor or subcontractor performing Work or rendering services at the Projects. Where permitted by law, CONTRACTOR shall require similar written express waivers and insurance clauses from each of its Subcontractors of every tier. A waiver of subrogation shall be effective as to any individual or entity, even if such individual or entity (a)would otherwise have a duty of indemnification, contractual or otherwise, (b)did not pay the insurance premium, directly or indirectly, and (c)whether or not such individual or entity has an insurable interest in the property damaged. 4. Pollution Liability Insurance: CONTRACTOR shall purchase and maintain insurance for pollution liability covering bodily injury, property damage (including loss of use of damaged property or property that has not been physically injured or destroyed), cleanup costs, and defense costs (including costs and expenses for investigation, defense, or settlement of claims). Coverage shall carry limits of at least One Million Dollars ($1,000,000) Dollars and shall apply to sudden and non- C-CA-020113 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 17 of 26 sudden pollution conditions (including sewage spills), both at the site or needed due to migration of pollutants from the site, resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials, or other irritants, contaminants or pollutants. If CONTRACTOR provides coverage written on a claims-made basis, OCSD has the right to approve or reject such coverage in its own discretion. If written on a claims- made basis, the CONTRACTOR warrants that any retroactive date applicable to coverage under the policy precedes the effective date of this Contract, and that continuous coverage will be maintained, or an extended discovery period will be exercised, for a period of two years beginning from the time that the Project under this Contract is completed. B. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by OCSD. At the option of OCSD, either: the Insurer shall reduce or eliminate such deductibles or self- insured retentions as respects OCSD, its Directors, officers, agents, CONSULTANTS, and employees; or CONTRACTOR shall provide a financial guarantee satisfactory to OCSD guaranteeing payment of losses and related investigations, claim administration, and defense expenses. C. Other Insurance Provisions 1. Each such policy of General Liability Insurance and Automobile Liability Insurance shall be endorsed to contain, the following provisions: a. OCSD, its Directors, officers, agents, CONSULTANTS, and employees, and all public agencies from whom permits will be obtained, and their Directors, C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 18 of 26 Return to Aaenda Report officers, agents, and employees are hereby declared to be additional insureds under the terms of this policy, but only with respect to the operations of CONTRACTOR at or from any of the sites of OCSD in connection with this Contract, or acts and omissions of the additional insured in connection with its general supervision or inspection of said operations related to this Contract. b. Insurance afforded by the additional insured endorsement shall apply as primary insurance, and other insurance maintained by OCSD shall be excess only and not contributing with insurance provided under this policy. 2. Each insurance policy required herein shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30)days prior written notice by certified mail, return receipt requested, and that coverage shall not be cancelled for non-payment of premium except after ten (10)days prior written notice by certified mail, return receipt requested. Should there be changes in coverage or an increase in deductible or SIR amounts, CONTRACTOR undertakes to procure a manuscript endorsement from its insurer giving thirty (30)days prior notice of such an event to OCSD, or to have its insurance broker/agent send to OCSD a certified letter describing the changes in coverage and any increase in deductible or SIR amounts. The certified letter must be sent Attention: Risk Management and shall be received not less than twenty (20) days prior to the effective date of the change(s). The letter must be signed by a Director or Officer of the broker/agent and must be on company letterhead, and may be sent via e-mail in pdf format. 3. Coverage shall not extend to any indemnity coverage for the active negligence of any additional insured in any case where an agreement to indemnify the additional insured would be invalid under California Civil Code Section 2782(b). C-CA-020113 PROJECT NO. P1-112,PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101,PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 19 of 26 4. If required by a public agency from whom permit(s)will be obtained, each policy of General Liability Insurance and Automobile Liability Insurance shall be endorsed to specify by name the public agency and its legislative members, officers, agents, CONSULTANTS, and employees, to be additional insureds. D. Acceptability of Insurers Insurers must have an "A-", or better, Policyholder's Rating, and a Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best Rating Guide. OCSD recognizes that State Compensation Insurance Fund has withdrawn from participation in the A.M. Best Rating Guide process. Nevertheless, OCSD will accept State Compensation Insurance Fund for the required policy of workers compensation insurance, subject to OCSD's option, at any time during the term of this Contract, to require a change in insurer upon twenty (20)days written notice. Further, OCSD will require CONTRACTOR to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within twenty (20)days of written notice to CONTRACTOR by OCSD or its agent. E. Verification of Coverage CONTRACTOR shall furnish OCSD with original certificates and mandatory endorsements affecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by OCSD before Work commences. OCSD reserves the right to require complete, certified copies of all required insurance policies, including endorsements, affecting the coverage required by these Specifications at any time. C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 20 of 26 Return to Aaenda Report F. Subcontractors CONTRACTOR shall be responsible to establish insurance requirements for any Subcontractors hired by CONTRACTOR. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subcontractor's operations and work. OCSD and any public agency issuing permits for the Projects must be named as "Additional Insured" on any General Liability or Automobile Liability policy obtained by a Subcontractor. The CONTRACTOR must obtain copies and maintain current versions of all Subcontractors' policies, Certificate of Liability and mandatory endorsements effecting coverage. Upon request, CONTRACTOR must furnish OCSD with the above referenced required documents. G. Required Forms and Endorsements 1. Required ACORD Form a. Certificate of Liability Form 25-S (7/97) 2. Required Insurance Services Office, Inc. Endorsements (when alternative forms are shown, they are listed in order of preference) In the event any of the following forms are cancelled by Insurance Services Office, Inc. (ISO), or are updated, the ISO replacement form or equivalent must be supplied. a. Commercial General Liability Form CG-0001 1001 b. Additional Insured Including Form CG-2010 10 01 and Products-Completed Operations Form CG-2037 10 01 C. Waiver of Transfer of Rights of Form CG-2404 11 85; or Recovery Against Others to Us/ Form CG-2404 10 93 Waiver of Subrogation 3. Required State Compensation Insurance Fund Endorsements a. Waiver of Subrogation Endorsement No. 2570 b. Cancellation Notice Endorsement No. 2065 C-CA-020113 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 21 of 26 4. Additional Required Endorsements a. Notice of Policy Termination Manuscript Endorsement 5. Pollution Liability Endorsements OCSD shall be named as the Loss Payee in the policy or by endorsement. There shall be a Separation of Insured Clause or endorsement, providing that coverage applies separately to each insured, except with respect to the limits of liability. There shall also be an endorsement or policy language containing a waiver of subrogation rights on the part of the insurer. OCSD, its directors, officers, agents, CONSULTANTS and employees and all public agencies from whom permits will be obtained as well as their directors, officers, agents, and employees shall be included as insureds under the policy. Any additional insured endorsement shall contain language at least as broad as the coverage language contained in ISO form CG 20 10 11 85 or alternatively in both CG 20 10 10 01 and CG 20 37 10 01 together SECTION-17 RISK AND INDEMNIFICATION All Work covered by this Contract done at the site of construction or in preparing or delivering materials to the site shall be at the risk of CONTRACTOR alone. CONTRACTOR shall save, indemnify, defend, and keep OCSD and others harmless as more specifically set forth in General Conditions, "General Indemnification". SECTION-18 TERMINATION This Contract may be terminated in whole or in part in writing by OCSD in the event of substantial failure by the CONTRACTOR to fulfill its obligations under this Agreement, or it may be terminated by OCSD for its convenience provided that such termination is effectuated in a manner and upon such conditions set forth more particularly in General Conditions, C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 22 of 26 Return to Aaende Report "Termination for Default"and/or"Termination for Convenience', provided that no termination may be effected unless proper notice is provided to CONTRACTOR at the time and in the manner provided in said General Conditions. If termination for default or convenience is effected by OCSD, an equitable adjustment in the price provided for in this Contract shall be made at the time and in the manner provided in the General Conditions, "Termination for Default" and "Termination for Convenience". SECTION — 19 WARRANTY The CONTRACTOR agrees to perform all Work under this Contract in accordance with the Contract Documents, including OCSD's designs, Drawings and Specifications. The CONTRACTOR guarantees for a period of at least one (1)year from the date of Final Acceptance of the Work, pursuant to the General Conditions, "Final Acceptance and Final Completion"that the completed Work is free from all defects due to faulty materials, equipment or workmanship and that it shall promptly make whatever adjustments or corrections which may be necessary to cure any defects, including repairs of any damage to other parts of the system resulting from such defects. OCSD shall promptly give notice to the CONTRACTOR of observed defects. In the event that the CONTRACTOR fails to make adjustments, repairs, corrections or other work made necessary by such defects, OCSD may do so and charge the CONTRACTOR the cost incurred. The CONTRACTOR's warranty shall continue as to any corrected deficiency until the later of(1)the remainder of the original one-year warranty period; or(2) one year after acceptance by OCSD of the corrected Work. The Performance Bond and the Payment Bond shall remain in full force and effect through the guarantee period. The CONTRACTOR's obligations under this clause are in addition to the CONTRACTOR's other express or implied assurances under this Contract, including but not limited to specific C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 23 of 26 manufacturer or other extended warranties specified in the Plans and Specifications, or state law and in no way diminish any other rights that OCSD may have against the CONTRACTOR for faulty materials, equipment or Work. SECTION-20 ASSIGNMENT No assignment by the CONTRACTOR of this Contract or any part hereof, or of funds to be received hereunder, will be recognized by OCSD unless such assignment has had prior written approval and consent of OCSD and the Surety. SECTION-21 RESOLUTION OF DISPUTES OCSD and the CONTRACTOR shall comply with the provisions of California Public Contract Code Section 20104 at. seq., regarding resolution of construction claims for any Claims which arise between the CONTRACTOR and OCSD, as well as all applicable dispute and Claims provisions as set forth in the General Conditions and as otherwise required by law. SECTION—22 SAFETY & HEALTH CONTRACTOR shall comply with all applicable safely and health requirements mandated by federal, state, city and/or public agency codes, permits, ordinances, regulations, and laws, as well as these Contract Documents, including but not limited to the General Requirements, Section entitled "Safety." C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 24 of 26 Return to Aaenda Report SECTION -23 NOTICES Any notice required or permitted under this Contract may be given by ordinary mail at the address set forth below. Any party whose address changes shall notify the other party in writing. TO OCSD: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708-7018 Attn: Clerk of the Board Copy to: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708-7018 Attn: Construction Manager Bradley R. Hogin, Esquire Woodruff, Spradlin & Smart 555 Anton Boulevard Suite 1200 Costa Mesa, California 92626 TO CONTRACTOR: W.M. Lyles Company 1250 West Olive Avenue Fresno, CA 93728 Copy to: David Dawson, Sr. Vice-President W.M. Lyles Company 1250 West Olive Avenue Fresno, CA 93728 C-CA-020113 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 25 of 26 IN WITNESS WHEREOF, the parties hereto have executed this Contract Agreement as the date first hereinabove written. CONTRACTOR: W.M. Lyles Company 1250 West Olive Avenue Fresno, CA 93723 By Printed Name Its CONTRACTOR's State License No. 422390 (Expiration Date—5/31/2014) OCSD: Orange County Sanitation District By Chair, Board of Directors By Maria Ayala Clerk of the Board By Marc Dubois Contracts, Purchasing and Materials Management Division Manager C-CA-020113 PROJECT NO. P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 26 of 26 Return to Aaenda Report EXHIBIT A SCHEDULE OF PRICES C-EXA-071012 TABLE OF CONTENTS EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION ..............................................................................1 EXA-2 PROGRESS PAYMENTS....................................................................................1 EXA-3 RETENTION AND ESCROW ACCOUNTS .........................................................1 EXA-4 STOP PAYMENT NOTICE ..................................................................................3 EXA-5 PAYMENT TO SUBCONTRACTORS..................................................................3 EXA-6 PAYMENT OF TAXES.........................................................................................3 EXA-7 FINAL PAYMENT ................................................................................................4 EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT.....5 ATTACHMENT 1 CERTIFICATION FOR REQUEST FOR PAYMENT........................7 ATTACHMENT 2 SCHEDULE OF PRICES ...........................................................8 C-EXA-071012 Return to Aaenda Report EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION CONTRACTOR will be paid the Contract Document price according to the Schedule of Prices, and all other applicable terms and conditions of the Contract Documents. EXA-2 PROGRESSPAYMENTS Progress payments will be made in accordance with all applicable terms and conditions of the Contract Documents, including, but not limited to: 1. Contract Agreement—Section 11 —"Contract Price and Method of Payment;" 2. General Conditions—"Payment—General"; 3. General Conditions—"Payment—Applications for Payment"; 4. General Conditions—"Payment— Mobilization Payment Requirements;" 5. General Conditions—"Payment— Itemized Breakdown of Contract Lump Sum Prices"; 6. General Conditions—"Contract Price Adjustments and Payments"; 7. General Conditions—"Suspension of Payments"; 8. General Conditions—"OCSD's Right to Withhold Certain Amounts and Make Application Thereof'; and 9. General Conditions—"Final Payment." EXA-3 RETENTION AND ESCROW ACCOUNTS A. Retention: OCSD shall retain a percentage of each progress payment to assure satisfactory completion of the Work. The amount to be retained from each progress payment shall be determined as provided in General Conditions— "Retained Funds; Substitution of Securities". In all contracts between CONTRACTOR and its Subcontractors and/or Suppliers, the retention may not exceed the percentage specified in the Contract Documents. C-EXA-071012 PROJECT NO. Pi-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25, 2013 Page 1 of 8 B. Substitution of Securities: CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities." Payment of Escrow Agent: In lieu of substitution of securities as provided above, the CONTRACTOR may request and OCSD shall make payment of retention earned directly to the escrow agent at the expense of the CONTRACTOR. At the expense of the CONTRACTOR, the CONTRACTOR may direct the investment of the payments into securities consistent with Government Code §16430 and the CONTRACTOR shall receive the interest earned on the investments upon the same terms provided for in this article for securities deposited by the CONTRACTOR. Upon satisfactory completion of the Contract, the CONTRACTOR shall receive from the escrow agent all securities, interest and payments received by the escrow agent from OCSD, pursuant to the terms of this article. The CONTRACTOR shall pay to each Subcontractor, not later than twenty (20)calendar days after receipt of the payment, the respective amount of interest earned, net of costs attributed to retention withheld from each Subcontractor, on the amount of retention withheld to ensure the performance of the Subcontractor. The escrow agreement used by the escrow agent pursuant to this article shall be substantially similar to the form set forth in §22300 of the California Public Contract Code. C. Release of Retention: Upon Final Acceptance of the Work, the CONTRACTOR shall submit an invoice for release of retention in accordance with the terms of the Contract. D. Additional Deductibles: In addition to the retentions described above, OCSD may deduct from each progress payment any or all of the following: 1. Liquidated Damages that have occurred as of the date of the application for progress payment; 2. Deductions from previous progress payments already paid, due to OCSD's discovery of deficiencies in the Work or non-compliance with the Specifications or any other requirement of the Contract; 3. Sums expended by OCSD in performing any of the CONTRACTOR'S obligations under the Contract that the CONTRACTOR has failed to perform, and; 4. Other sums that OCSD is entitled to recover from the CONTRACTOR under the terms of the Contract, including without limitation insurance deductibles and assessments. C-EXA-071012 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 2 of 8 Return to Aaenda Report The failure of OCSD to deduct any of the above-identified sums from a progress payment shall not constitute a waiver of OCSD's right to such sums or to deduct them from a later progress payment. EXA-4 STOP PAYMENT NOTICE In addition to other amounts properly withheld under this article or under other provisions of the Contract, OCSD shall retain from progress payments otherwise due the CONTRACTOR an amount equal to one hundred twenty-five percent (125%)of the amount claimed under any stop payment notice under Civil Code§9350 at. seq. or other lien filed against the CONTRACTOR for labor, materials, supplies, equipment, and any other thing of value claimed to have been furnished to and/or incorporated into the Work; or for any other alleged contribution thereto. In addition to the foregoing and in accordance with Civil Code §9358 OCSD may also satisfy its duty to withhold funds for stop payment notices by refusing to release funds held in escrow pursuant to public receipt of a release of stop payment notice executed by a stop payment notice claimant, a stop payment notice release bond, an order of a court of competent jurisdiction, or other evidence satisfactory to OCSD that the CONTRACTOR has resolved such claim by settlement. EXA-5 PAYMENT TO SUBCONTRACTORS Requirements 1. The CONTRACTOR shall pay all Subcontractors for and on account of Work performed by such Subcontractors, not later than seven (7) days after receipt of each progress payment as required by the California Business and Professions Code §7108.5. Such payments to Subcontractors shall be based on the measurements and estimates made pursuant to article progress payments provided herein. 2. Except as specifically provided by law, the CONTRACTOR shall pay all Subcontractors any and all retention due and owing for and on account of Work performed by such Subcontractors not later than seven (7)days after CONTRACTOR'S receipt of said retention proceeds from OCSD as required by the California Public Contract Code §7107. EXA-6 PAYMENT OF TAXES Unless otherwise specifically provided in this Contract, the Contract Price includes full compensation to the CONTRACTOR for all taxes. The CONTRACTOR shall pay all federal, state, and local taxes, and duties applicable to and assessable against any Work, including but not limited to retail sales and use, transportation, export, import, business, and special taxes. The CONTRACTOR shall ascertain and pay the taxes when due. The CONTRACTOR will maintain auditable records, subject to OCSD reviews, confirming that tax payments are current at all times. C-EXA-071012 PROJECT NO. PIA 12, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 3 of 8 EXA-7 FINAL PAYMENT After Final Acceptance of the Work, as more particularly set forth in the General Conditions, "Final Acceptance and Final Completion", and after Resolution of the Board authorizing final payment and satisfaction of the requirements as more particularly set forth in General Conditions—"Final Payment", a final payment will be made as follows: 1. Prior to Final Acceptance, the CONTRACTOR shall prepare and submit an application for Final Payment to OCSD, including: a. The proposed total amount due the CONTRACTOR, segregated by items on the payment schedule, amendments, Change Orders, and other bases for payment; b. Deductions for prior progress payments; c. Amounts retained; d. A conditional waiver and release on final payment for each Subcontractor(per Civil Code Section 8136); e. A conditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8136); f. List of Claims the CONTRACTOR intends to file at that time or a statement that no Claims will be filed, g. List of pending unsettled claims, stating claimed amounts, and copies of any and all complaints and/or demands for arbitration received by the CONTRACTOR; and h. For each and every claim that resulted in litigation or arbitration which the CONTRACTOR has settled, a conformed copy of the Request for Dismissal with prejudice or other satisfactory evidence the arbitration is resolved. 2. The application for Final Payment shall include complete and legally effective releases or waivers of liens and stop payment notices satisfactory to OCSD, arising out of or fled in connection with the Work. Prior progress payments shall be subject to correction in OCSD's review of the application for Final Payment. Claims filed with the application for Final Payment must be otherwise timely under the Contract and applicable law. 3. Within a reasonable time, OCSD will review the CONTRACTOR'S application for Final Payment. Any recommended changes or corrections will then be forwarded to the CONTRACTOR. Within ten (10) calendar days after receipt of recommended changes from OCSD, the CONTRACTOR will make the changes, or list Claims that will be filed as a result of the C-EXA-071012 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 4 of 8 Return to Aaenda Rom changes, and shall submit the revised application for Final Payment. Upon acceptance by OCSD, the revised application for Final Payment will become the approved application for Final Payment. 4. If no Claims have been filed with the initial or any revised application for Final Payment, and no Claims remain unsettled within thirty (30)calendar days after Final Acceptance of the Work by OCSD, and agreements are reached on all issues regarding the application for Final Payment, OCSD, in exchange for an executed release, satisfactory in form and substance to OCSD, will pay the entire sum found due on the approved application for Final Payment, including the amount, if any, allowed on settled Claims. 5. The release from the CONTRACTOR shall be from any and all Claims arising under the Contract, except for Claims that with the concurrence of OCSD are specifically reserved, and shall release and waive all unreserved Claims against OCSD and its officers, directors, employees and authorized representatives. The release shall be accompanied by a certification by the CONTRACTOR that: a. It has resolved all Subcontractors, Suppliers and other Claims that are related to the settled Claims included in the Final Payment; b. It has no reason to believe that any party has a valid claim against the CONTRACTOR or OCSD which has not been communicated in writing by the CONTRACTOR to OCSD as of the date of the certificate; c. All warranties are in full force and effect, and; d. The releases and the warranties shall survive Final Payment. 6. If any claims remain open, OCSD may make Final Payment subject to resolution of those claims. OCSD may withhold from the Final Payment an amount not to exceed one hundred fifty percent(150%) of the sum of the amounts of the open claims, and one hundred twenty-five percent(125%) of the amounts of open stop payment notices referred to in article entitled stop payment notices herein. 7. The CONTRACTOR shall provide an unconditional waiver and release on final payment from each Subcontractor and Supplier providing Work under the Contract (per Civil Code Section 8138)and an unconditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8138)within thirty (30) days of receipt of Final Payment. EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT Notwithstanding OCSD's acceptance of the application for Final Payment and irrespective of whether it is before or after Final Payment has been made, OCSD shall not be precluded from subsequently showing that: 1. The true and correct amount payable for the Work is different from that previously accepted; C-EXA-071012 PROJECT NO. P1-112,PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO. P2-101,PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 5 of 8 2. The previously-accepted Work did not in fad conform to the Contract requirements, or; 3. A previous payment or portion thereof for Work was improperly made. OCSD also shall not be stopped from demanding and recovering damages from the CONTRACTOR, as appropriate, under any of the foregoing circumstances as permitted under the Contract or applicable law. C-EXA-071012 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 6 of 8 Return to Aaenda Report ATTACHMENT CERTIFICATION FOR REQUEST FOR PAYMENT I hereby certify under penalty of perjury as follows: That the claim for payment is in all respects true, correct; that the services mentioned herein were actually rendered and/or supplies delivered to OCSD in accordance with the Contract. I understand that it is a violation of both the federal and California False Claims Ads to knowingly present or cause to be presented to OCSD a false claim for payment or approval. A claim includes a demand or request for money. It is also a violation of the False Claims Ads to knowingly make use of a false record or statement to get a false claim paid. The term "knowingly" includes either actual knowledge of the information, deliberate ignorance of the truth or falsity of the information, or reckless disregard for the truth or falsity of the information. Proof of specific intent to defraud is not necessary under the False Claims Acts. I understand that the penalties under the Federal False Claims Ad and State of California False Claims Act are non-exclusive, and are in addition to any other remedies which OCSD may have either under contract or law. I hereby further certify, to the best of my knowledge and belief, that: 1. The amounts requested are only for performance in accordance with the Specifications, terms, and conditions of the Contract; 2. Payments to Subcontractors and Suppliers have been made from previous payments received under the Contract, and timely payments will be made from the proceeds of the payment covered by this certification; 3. This request for progress payments does not include any amounts which the prime CONTRACTOR intends to withhold or retain from a Subcontractor or Supplier in accordance with the terms and conditions of the subcontract; and 4. This certification is not to be construed as Final Acceptance of a Subcontractor's performance. Name Title Date C-EXA-071012 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 7 of 8 ATTACHMENT SCHEDULE OF PRICES Item Approx. Item Unit Total No. Qty. Price Price 1. Lump MOBILIZATION Sum Mobilization at Plant 1 in accordance with General Conditions, Payment-Mobilization Payment Requirements and, in conformance with the Contract Documents,for the lump sum price of... L.S. $ 160,000.00 2. Lump PLANT 1 PLANT WATER PIPING Sum REPLACEMENT Furnish all labor, materials, and equipment necessary for the Construction of Plant 1 Plant Water Piping Replacement excluding Bid Item No. 1 above, in conformance with the Contract Documents and all applicable laws for the lump sum price of... L.S. $ 3,528,000.00 3. Lump DEMOBILIZATION Sum Demobilization at Plant 1, including final cleanup in conformance with the Contract Documents and all applicable laws,for the lump sum price of... L.S. $ 55,000.00 SUM TOTAL AMOUNT FOR PLANT 1 —PROJECT NO. Pi-112 $ 3,743,000.00 4. Lump MOBILIZATION Sum Mobilization at Plant 2 in accordance with General Conditions, Payment-Mobilization Payment Requirements and, in conformance with the Contract Documents,for the lump sum price of... L.S. $ 55,000.00 5. Lump PLANT 2 PLANT WATER PIPING Sum REHABILITATION AND REPLACEMENT Furnish all labor, materials, and equipment necessary for the Construction of Plant 2 Plant Water Piping Replacement excluding Bid Item No. 4, in conformance with the Contract Documents and all applicable laws,for the lump sum price of... L.S. $ 2,222,000.00 6. Lump DEMOBILIZATION Sum Demobilization at Plant 2,final progress payment, including final cleanup in conformance with the Contract Documents and all applicable laws,for the lump sum price of... L.S. $ 18,000.00 SUM TOTAL AMOUNT FOR PLANT 2—PROJECT NO. P2.101 $ 2,295,000.00 TOTAL AMOUNT OF BID(BASIS OF AWARD) $ 6,038,000.00 C-EXA-071012 PROJECT NO.P1-112, PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 1 PROJECT NO.P2-101, PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 CONFORMED SEPTEMBER 25,2013 Page 8 of 8 Item No. 5 MINUTES STEERING COMMITTEE MEETING Orange County Sanitation District The Steering Committee meeting convened on Wednesday, August 28, 2013, at 5:30 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS STAFF PRESENT PRESENT: Jim Herberg, General Manager Troy Edgar, Chair Bob Ghirelli, Assistant General John Anderson, Vice-Chair Manager Tom Beamish, Operations Committee Nick Arhontes, Director of Facilities Chair Support Services Brad Reese, Administration Committee Nick Kanetis, Director of Engineering Chair Jeff Reed, Director of Human John Nielsen Resources Ed Torres, Director of Operations & Maintenance COMMITTEE MEMBERS ABSENT: Lorenzo Tyner, Director of Finance & John Withers Administrative Services Maria Ayala, Clerk of the Board Janine Aguilar Jim Colston Norbert Gaia Rich Spencer OTHERS PRESENT: Brad Hogin, General Counsel Jim Ruth, Consultant Heather Stratman, Townsend Public Affairs PUBLIC COMMENTS: None. COMMITTEE CHAIR REPORT: Chair Edgar reported on having attended the Sanitation District's Honor Walk Ceremony and being able to present Honor Walk Bricks to two retired employees as well as one former Board Member. Minutes of the Steering Committee August 28, 2013 Page 2 of 4 Chair Edgar announced the two upcoming Board Workshops, scheduled to take place on September 11 and October 2. These will be sessions where the Board will focus on the District's vision statement and 5-Year Strategic Plan. A draft statement of the vision statement was distributed. Chair Edgar also announced that he and General Manager, Jim Herberg, will be speaking at the Water Advisory Committee of Orange County next week and give a presentation on the District's Capital Improvement Projects and Full Secondary treatment. Vice-Chair Anderson reported on having attended the CASA Conference in San Diego. He commented on various topics of discussion throughout the conference. GENERAL MANAGER REPORT: Mr. Herberg distributed a draft copy of the General Manager's 2013 - 2014 Work Plan for the Committee's review. A final draft, incorporating any feedback from the Steering Committee, will be presented to the Board next month for approval. Mr. Herberg also reminded the Committee about the tentative dates for the Ocean Monitoring tour. Chair Edgar encouraged the Committee to participate in the tour. CONSENT CALENDAR: 1. MOVED, SECONDED, AND DULY CARRIED: Approve Minutes of the July 24, 2013 Steering Committee Meeting. 2. MOVED, SECONDED, AND DULY CARRIED: Approve Amendment No. 1 to Professional Services Agreement with Townsend Public Affairs (Purchase Order No. 104836-OB) for State Legislative Services, to enhance legislative assistance for the period September 1, 2013 through August 31, 2014, for an additional contractual amount of$2,500 per month. ACTION ITEMS: Mr. Herberg briefly reported on the current resolution for purchasing and contracting (from 2007), and General Counsel's plan to update it, and establish it as an ordinance. The Committee held considerable discussion on this item. Minutes of the Steering Committee August 28, 2013 Page 3 of 4 3. Direct General Manager and General Counsel to include approval authority up to $200,000 for standing Committees in the draft purchasing and contracting ordinance. After the Committee held considerable discussion on this item, the following action was taken: MOTION, SECONDED, AND, DULY CARRIED to leave the current purchasing and contracting resolution, Resolution No. OCSD 07-04, as is. 4. Establish a Legislative and Public Affairs Committee of the Board of Directors. After the Committee held considerable discussion on this item, the following action was taken: MOTION, SECONDED, AND DULY CARRIED to form a new committee titled the Legislative and Public Affairs Special Committee. The Committee will consist of seven members and be compliant with the Brown Act. The Committee will be active for one year to develop the District's legislative and public affairs programs, and will report to the Board. INFORMATION ITEMS: 5. Legislative Update Jim Colston, Environmental Compliance and Regulatory Affairs Manager, reported on the federal legislation as it pertains to the District, such as: the Federal Resources Water Act Bill; EPA; municipal bonds, etc. Heather Stratman, Senior Director for Townsend Public Affairs, provided a state legislative update as it pertains to the District, such as: SB 691; SB 33, etc. Ms. Stratman also reported on the County's legislative platform. CLOSED SESSION CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS: 54956.9(d)(1), 54956.9(d)(4), and 54957.6. The Committee convened in closed session at 6:00 p.m. to discuss five items. Confidential Minutes of the closed Session have been prepared in accordance with the above Government Code Sections and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. Minutes of the Steering Committee August 28, 2013 Page 4 of 4 RECONVENE IN REGULAR SESSION: The Committee reconvened in regular session at 6:24 p.m. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: The Chair declared the meeting adjourned at 6:24 p.m. Submitted by: Maria E. Ayala Clerk of the Board Item No. 6 MINUTES OF THE OPERATIONS COMMITTEE Engineering, Operations & Maintenance, and Facilities Support Services Orange County Sanitation District A regular meeting of the Operations Committee of the Orange County Sanitation District was held on September 4, 2013, at 5:00 p.m. at the District's Administrative Office. A quorum was declared present, as follows: Operations Directors Present: Staff Present: Tom Beamish, Chair Jim Herberg, General Manager John Nielsen, Vice Chair Nick Kanetis, Director of Engineering Keith Curry Nick Arhontes, Director of Facilities Support Steve Jones Services Lucille Kring Ed Torres, Director of Operations & Maintenance Michael Levitt Lorenzo Tyner, Director of Finance & Brett Murdock Administrative Services Mark McCurdy (Alternate) Maria Ayala, Clerk of the Board Scott Nelson Jennifer Cabral Greg Sebourn Rich Castillon Fred Smith Norbert Gaia Troy Edgar, Board Chair At Garcia John Anderson, Board Vice Chair Todd Haynes Rob Thompson Operations Directors Absent: Steve Nagel Others Present: Brad Hogin, General Counsel Bob Ooten, Alternate Director Ted Gerber, enfoTech PUBLIC COMMENTS: No public comments. REPORT OF COMMITTEE CHAIR: Tom Beamish, Committee Chair, did not provide a report. REPORT OF GENERAL MANAGER: Jim Herberg, General Manager, did not provide a report. 09/04/13 Opeations CommRtee Minutes Page 1 d 3 CONSENT CALENDAR: 1. MOVED, SECONDED, and DULY CARRIED: Approve Minutes of July 3, 2013, Operations Committee Meeting. 2. MOVED, SECONDED, and DULY CARRIED: Recommend to the Board of Directors to: A. Approve a Professional Services Agreement with Black & Veatch Corporation for providing Gas Facilities Study for Plants 1 & 2, Project No. SP-141, for an amount not to exceed $665,021; and, B. Approve a contingency of$13,306 (2%) 3. MOVED, SECONDED, and DULY CARRIED: Recommend to the Board of Directors to: A. Approve a Professional Consultant Services Agreement with Carollo Engineers to provide construction support services for Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101, for an amount not to exceed $225,108; and, B. Approve a contingency of$22,511 (10%). INFORMATION ITEMS: 4. ENFOTECH IPACS Pretreatment System Implementation Rich Castillon explained some of the issues and challenges with the District's current software and the benefits of moving towards purchasing a commercial software. Ted Gerber, representative from enfoTech, provided a brief description of the software and what the company will handle in terms of implementation and maintenance. Mr. Gerber distributed a handout titled, "OCSD Source Control Data Relationships:' The Committee had considerable discussion on this item. Staff responded to questions from the Committee. Directors Kring and Jones arrived at 5:12 p.m. 09/04/13 Operations Committee Minutes Page 2 of 3 DEPARTMENT HEAD REPORTS: • Odor Complaints Update Ed Torres, Director of Operations and Maintenance, gave an update on the odor complaints, and explained what the different levels of service and procedures in place are to address these complaints. Staff responded to questions from the Committee. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Nick Arhontes, Director of Facility Support Services Department, reported on the recent spill from the Costa Mesa Sanitary District, and how OCSD was prepared to provide assistance. Mr. Herberg announced that the next Administration Committee meeting will be held on September 11, with the first of two Board Workshops following right after at 6:30 p.m. This meeting will focus on the vision and mission statements. The second of the two workshops will be held on October 2 at the same time. This meeting will focus on the strategic initiatives for the next five years. ADJOURNMENT: Committee Chair Beamish declared the meeting adjourned at 5:25 p.m. Submitted by: Maria E. Ayala Clerk of the Board 09IM13 Operations CommRtee Minutes Page 3 of 3 OPERATIONS COMMITTEE Meeting Dare TOBA.Of DIr. 09/04/13 Og/25/13 AGENDA REPORT Item Number Item Numbe z Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Nick Kanetis, Director of Engineering Project Manager: Mike Lahlou SUBJECT: GAS FACILITIES STUDY FOR PLANTS 1 & 2, PROJECT NO. SP-141 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Services Agreement with Black & Veatch Corporation for providing Gas Facilities Study for Plants 1 & 2, Project No. SP-141, for an amount not to exceed $665,021; and, B. Approve a contingency of$13,306 (2%) SUMMARY The Orange County Sanitation District (Sanitation District) desires the services of a consulting engineering firm to conduct a comprehensive study of the digester gas facilities at Plant Nos. 1 and 2. The facilities consist of low-pressure digester gas (LPDG) distribution piping from anaerobic sludge digesters, gas compressor buildings with gas compressors and associated dehumidification equipment, high-pressure digester gas (HPDG) piping to the Central Generation (CenGen) Buildings, and HPDG interplant line, HPDG flares, activated carbon vessels, and a low-pressure digester gas holder. The facilities were built during the 1980s and commissioned in the early 1990s and are in need of upgrading and optimization to meet current and future needs. In addition, equipment obsolescence and equipment at the end of useful life must be addressed. The purpose of this study is to address these needs by providing capacity and needs study, gas treatment1cleaning, operational and regulation evaluation, equipment condition assessment, and evaluation of alternatives with recommendations and budget estimates. The results of this study will be used to identify and plan future rehabilitation efforts for the Digester Gas System Improvements, Project No. J-124. In response to a Request for Proposal (RFP) four fines submitted proposals. Sanitation District staff reviewed the proposals in accordance with Sanitation District policy. Based on the project understanding and approach, related project experience, and project team and qualifications, staff recommends awarding a Professional Services Agreement (PSA)to Black &Veatch Corporation, for an amount not to exceed $665,021. Page 1 of 3 This comprehensive study is recommended because there are several major issues with the digester gas handling systems that are interrelated. An overall plan is needed to clarify and resolve those issues, and provide a comprehensive scope of work for future Project No. J-124, Digester Gas System Improvements. The Sanitation District will benefit greatly by having a consistent facility-wide assessment of the digester gas system that addresses equipment condition problems, capacity expansion, new technology opportunities, and anticipated regulatory drivers. PRIOR COMMITTEE/BOARD ACTIONS None ADDITIONAL INFORMATION Request for Proposals (RFP) An RFP which outlined the Scope of Work and selection criteria for this study was sent to all firms who were registered in the Online Bidding System. Four proposals were received. A panel of staff members reviewed and ranked each proposal in accordance with the evaluation process set forth in the Sanitation District's Resolution No. OCSD 07-04, Section 5.07. The proposals were evaluated and ranked according to the following criteria: Evaluation Criteria Weighting Project Understanding and Ap roach 40% Related Project Experience 25% Project Team and Staff Qualifications 35% PROPOSAL EVALUATION & RANKING Consultant Rankin Black & Veatch 1 Carollo 2 Brown and Caldwell 3 Worley Parsons 4 Page 2 of 3 The Black & Veatch team has the combination of the digester gas facilities assessment and wastewater treatment plant design experience needed to develop responsive and practical alternatives. The Black & Veatch team has a full services project team of experienced managers, engineers, and designers with competitive hourly rates. Based on the above, staff determined the final cost proposal of $665,021 to be fair and reasonable for the scope of work. Background There are several major issues with the Digester Gas handling systems that are interrelated. An overall plan is needed to clarify and resolve those issues. Scope of Work The proposed study will conduct a comprehensive study of the digester gas facilities at Plants No. 1 and 2 (both plants) in Fountain Valley and Huntington Beach. The Scope Elements are summarized below: 1. Develop a capacity and needs study of the digester gas facilities at both plants. 2. Evaluate current and anticipated future AQMD and NFPA requirements pertaining to the digester gas facilities at both plants. 3. Evaluate and mitigate operational concerns for the digester gas facilities at both plants. 4. Provide a condition assessment of the digester gas facilities at both plants. 5. Produce an evaluation of the various alternatives recommended in the previous elements, development of preferred alternatives, and prepare budget estimates for future operation of the digester gas facilities at both plants. CEQA Notice of Exemption was filed on April 14, 2011. BUDGET/DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted (Line item: Section 8, Page 74) at $700,000 which is sufficient. Date of ADuroval Contract Amount Continaencv 09/25/13 $665,021 $13,306 ATTACHMENT The following affachment(s) maybe viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: Professional Services Agreement Page 3 of 3 Return to Mende Report PLANNING SERVICES AGREEMENT THIS AGREEMENT, is made and entered into to be effective the 25th day of September, 2013 by and between the ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "SANITATION DISTRICT', and Black & Veatch Corporation, for purposes of this AGREEMENT hereinafter referred to as "CONSULTANT'. The SANITATION DISTRICT and CONSULTANT are referred to herein collectively as the "Parties" or individually as a "Party." WITNESSETH: WHEREAS, the SANITATION DISTRICT desires to engage a consultant for a Gas Facilities Study for Plants 1 &2, SP-141, and to produce a study that will provide a condition assessment, capacity and needs study, regulation evaluations, and evaluation of alternatives with recommendations and budget estimates; and WHEREAS, CONSULTANT is qualified to provide the necessary services in connection with these requirements and has agreed to provide the necessary planning services; and, WHEREAS, the SANITATION DISTRICT has adopted procedures for the selection of planning services and has proceeded in accordance with said procedures to select CONSULTANT to perform this work; and, WHEREAS, at its regular meeting on August 28, 2013, the Board of Directors, by Minute Order, accepted the recommendation of the Operations Committee to approve this AGREEMENT between the SANITATION DISTRICT and CONSULTANT. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this AGREEMENT, it is mutually agreed as follows: 1. SCOPE OF WORK. CONSULTANT agrees to furnish necessary planning services to accomplish those project elements outlined in the Scope of Work attached hereto as "Attachment A", and by this reference made a part of this AGREEMENT. In the event of a conflict between the Scope of Work and this AGREEMENT, the terms of this AGREEMENT shall prevail. A. The CONSULTANT shall be responsible for the professional quality, technical accuracy, and completeness of the work and services furnished by the CONSULTANT under this AGREEMENT, including the work performed by its Subconsultants. Where approval by the SANITATION DISTRICT is indicated, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all applicable laws, regulations, codes, industry standards and liability for damages caused by errors, omissions, noncompliance with industry standards, and/or negligence on the part of the CONSULTANT or its Subconsultants. PSA 1- SP-141 Rev 052312 B. CONSULTANT is responsible for the quality of work prepared under this AGREEMENT and shall ensure that all work is performed to the standards of best professional practice for clarity, uniformity, and completeness. CONSULTANT shall timely respond to all comments, suggestions, and recommendations from the SANITATION DISTRICT. All comments from the SANITATION DISTRICT, or its agent, shall be incorporated into the report prior to the next review deadline or addressed, in writing, as to why the comment(s) has/have not been incorporated. CONSULTANT shall ensure that each submittal is 100% accurate for the level of work submitted (i.e. correct references, terms, capitalization or equal status, spelling, punctuation, etc.) C. In the event that CONSULTANT's services and/or work product(s) is not to the satisfaction of the SANITATION DISTRICT and/or does not conform to the requirements of this AGREEMENT or the applicable industry standards, the CONSULTANT shall, without additional compensation, promptly correct or revise any errors or deficiencies in its work product(s) within the timeframe specified by the Project Engineer/Project Manager. The SANITATION DISTRICT may charge to CONSULTANT all costs, expenses and damages associated with any such corrections or revisions. D. Any CAD drawings, figures, and other work shall be produced by CONSULTANT and Subconsultants using the SANITATION DISTRICT CAD Manual. Conversion of CAD work from any other non-standard CAD format to the SANITATION DISTRICT format shall not be acceptable in lieu of this requirement. Electronic files shall conform to the Format for Deliverables listed in "Attachment A", Scope of Work. Any changes to these specifications by the CONSULTANT require advance written approval of the SANITATION DISTRICT. E. All planning services performed by the CONSULTANT, including, but not limited to, all drafts, data, correspondence, proposals, and reports compiled or composed by the CONSULTANT, pursuant to this AGREEMENT, are for the sole use of the SANITATION DISTRICT, its agents and employees. Neither the documents nor their contents shall be released to any third party without the prior written consent of the SANITATION DISTRICT. This provision does not apply to information that (a) was publicly known, or otherwise known to the CONSULTANT, at the time that it was disclosed to the CONSULTANT by the SANITATION DISTRICT, or (b) subsequently becomes publicly known to the CONSULTANT other than through disclosure by the SANITATION DISTRICT. Except for Subconsultants covered by Section 2 (a) neither the documents nor their contents shall be released to any third party without the prior written consent of the SANITATION DISTRICT. PSA -2- SP-141 Rev 052312 Return to Mende Report 2. COMPENSATION. Total compensation shall be paid to CONSULTANT for services performed in accordance with the following provisions: A. Total Compensation. Total compensation for the services provided under this AGREEMENT shall be in an amount not to exceed $665,021("Total Compensation"). Total Compensation to CONSULTANT, which includes burdened labor (salaries plus benefits), overhead, profit, direct costs, and Subconsultants)fees and costs, shall not exceed the sum set forth herein. As a portion of the Total Compensation, CONSULTANT shall pay to all Subconsultants, excluding out-of-pocket costs, on an hourly-rate basis per Attachment 'B." The SANITATION DISTRICT shall pay to CONSULTANT the actual costs of Subconsultant fees and charges subject to the limitations set forth herein. Profit for CONSULTANT and Subconsultants shall be 10%. Amendments shall be governed by the established profit percentage stated in the RFP. The profit percentage shall apply to the Prime CONSULTANT and all Subconsultants. B. Labor. As a portion of the Total Compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall pay to CONSULTANT a sum equal to the fully burdened salaries (salaries plus benefits and overhead and profit) charged on an hourly-rate basis to this Project. CONSULTANT and all Subconsultants will provide the SANITATION DISTRICT with certified payroll records of all employees where time is charged to this Project. C. Overhead. As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall compensate CONSULTANT for overhead at a rate of 105.00% and a fringe rate of 50.7% for labor paid by CONSULTANT pursuant to this Compensation Section hereof. D. Subconsultants. CONSULTANT shall pay all Subconsultants in accordance with Section 2. Total Compensation. Payments shall be based on the hourly-rates per the schedule attached hereto as Attachment "J". E. Direct Costs. As a portion of the Total Compensation, the SANITATION DISTRICT shall reimburse CONSULTANT and Subconsultants for the expenses described as Other Direct Costs, and identified as allowable on Attachment "D" hereto that CONSULTANT and Subconsultants actually incur in performance of this AGREEMENT. Attachment "D" is hereby incorporated by reference. Reimbursement for Other Direct Costs for CONSULTANT and all Subconsultants shall not include markup of any kind. CONSULTANT shall provide to the SANITATION DISTRICT itemized receipts, regardless of amount, and other documentary records PSA -3- SP-141 Rev 052312 to support each request for reimbursement. SANITATION DISTRICT shall pay to CONSULTANT the actual direct costs for an amount not to exceed $34,020. The SANITATION DISTRICT shall also pay to CONSULTANT actual costs for equipment rentals, leases or purchases with prior written approval of the SANITATION DISTRICT. All incidental expenses shall be included in overhead pursuant to Compensation Section above. (See Attachment E). 3. REALLOCATION OF TOTAL COMPENSATION. The SANITATION DISTRICT, by its Director of Engineering, shall have the right to approve a reallocation of the incremental amounts constituting the Total Compensation, provided that the Total Compensation is not increased. 4. When the SANITATION DISTRICT determines that all Work authorized under the AGREEMENT is fully complete and that the SANITATION DISTRICT requires no further work from CONSULTANT, or the AGREEMENT is otherwise terminated or expires in accordance with the terms of the AGREEMENT, the SANITATION DISTRICT shall give the Consultant written notice that the AGREEMENT will be closed out. CONSULTANT shall submit all outstanding billings, work submittals, deliverables, reports or similarly related documents as required under the AGREEMENT within thirty (30) days of receipt of notice of AGREEMENT closeout. Upon receipt of CONSULTANT'S submittals, the SANITATION DISTRICT shall commence a closeout audit of the AGREEMENT and will either: i. Give the CONSULTANT a final AGREEMENT Acceptance: or H. Advise the CONSULTANT in writing of any outstanding item or items which must be furnished, completed, or corrected at the CONSULTANT'S cost. Notwithstanding the final AGREEMENT acceptance, the CONSULTANT will not be relieved of its obligations hereunder, nor will the CONSULTANT be relieved of its obligations to complete any portions of the work, the non-completion of which were not disclosed to the SANITATION DISTRICT (regardless of whether such nondisclosures were fraudulent, negligent, or otherwise), and the CONSULTANT shall remain obligated under all those provisions of the AGREEMENT which expressly or by their nature extend beyond and survive final AGREEMENT Acceptance. Any failure by the SANITATION DISTRICT to reject the work or to reject the CONSULTANT'S request for final AGREEMENT Acceptance as set forth above shall not be deemed to be an acceptance of the work by the SANITATION DISTRICT for any purpose nor imply acceptance of, or AGREEMENT with, the Consultant's request for final AGREEMENT Acceptance. PSA -4- SP-141 Rev 052312 Return to Mende Report 5. PAYMENT. A. CONSULTANT will submit monthly statements covering services and/or work performed for payment for those items included in Section 2 hereof no later than the second Wednesday of the following month and in the format required by the SANITATION DISTRICT. The format must include, as a minimum: 1) current billing period invoicing, 2) current billing period "total percent invoiced to date", 3)future activities, 4) previous billing period "total invoiced to date', 5) potential items that are not included in the Scope of Work, 6) concerns and possible delays, 7) percentage of completion to date, and 8) budget status and amount remaining. Such requests shall be accompanied by such supporting data as may be required by the SANITATION DISTRICT. Monthly Invoice. CONSULTANT shall include in its monthly invoice, a detailed breakdown of costs associated with the performance of any corrections or revisions of the work for that invoicing period. CONSULTANT shall warrant and certify the accuracy of these costs and provide all support documentation required by the SANITATION DISTRICT. CONSULTANT understands that submitted costs are subject to Section 12 Audit Provisions. Upon approval of such payment request by the SANITATION DISTRICT, payment shall be made to CONSULTANT as soon as practicable of one hundred percent (100%) of the invoiced amount on a per-project-element basis. If the SANITATION DISTRICT determines that the work under this AGREEMENT or any specified project element hereunder, is incomplete and that the amount of payment is in excess of: i. The amount considered by the SANITATION DISTRICT's Director of Engineering to be adequate for the protection of the SANITATION DISTRICT; or ii. The percentage of the work accomplished for each project element, The SANITATION DISTRICT may, at the discretion of the Director of Engineering, retain an amount equal to that which insures that the total amount paid to that date does not exceed the percentage of the completed work for the Project in its entirety. B. Upon satisfactory completion by CONSULTANT of the work called for under the terms of this AGREEMENT, and upon acceptance of such work by the SANITATION DISTRICT, CONSULTANT will be paid the unpaid balance of any money due for such work based on the monthly statements, including any retained percentages relating to this portion of the work. PSA -5- SP-141 Rev 052312 C. Upon satisfactory completion of the work performed hereunder and prior to final payment under this AGREEMENT for such work, or prior settlement upon termination of this AGREEMENT, and as a condition precedent thereto, CONSULTANT shall execute and deliver to the SANITATION DISTRICT a release of all claims against the SANITATION DISTRICT arising under or by virtue of this AGREEMENT other than such claims, if any, as may be specifically exempted by CONSULTANT from the operation of the release in stated amounts to be set forth therein. D. Pursuant to the California False Claims Act (Government Code sections 12650-12655), any CONSULTANT that knowingly submits a false claim to the SANITATION DISTRICT for compensation under the terms of this AGREEMENT may be held liable for treble damages and up to a $10,000 civil penalty for each false claim submitted. This section shall also be binding on all Subconsultants. A CONSULTANT or Subconsultant shall be deemed to have submitted a false claim when the CONSULTANT or Subconsultant: (a) knowingly presents or causes to be presented to an officer or employee of the SANITATION DISTRICT a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the SANITATION DISTRICT; (c) conspires to defraud the SANITATION DISTRICT by getting a false claim allowed or paid by the SANITATION DISTRICT; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to the SANITATION DISTRICT; or(e) is a beneficiary of an inadvertent submission of a false claim to the SANITATION DISTRICT, and fails to disclose the false claim to the SANITATION DISTRICT within a reasonable time after discovery of the false claim. 6. PREVAILING WAGES A. To the extent CONSULTANT intends to utilize employees who will perform work during the contract, as more specifically defined under Labor Code Section 1720, CONSULTANT shall be subject to prevailing wage requirements with respect to such employees. 7. DOCUMENT OWNERSHIP— SUBSEQUENT CHANGES TO PLANS AND SPECIFICATIONS— CONSULTANT PERFORMANCE A. Ownership of Documents for the Planning Services performed, all documents in all forms (electronic, paper, etc.), including, but not limited to, studies, sketches, drawings, computer printouts, disk files, and electronic copies prepared in connection with or related to the Scope of Work or Planning Services, shall be the property of the SANITATION DISTRICT. The SANITATION DISTRICT's ownership of these documents includes use of, reproduction or reuse of and all incidental rights, whether or not the work for which they were prepared has been performed. The PSA -6- SP-141 Rev 052312 Return to Mende Report SANITATION DISTRICT ownership entitlement arises upon payment or any partial payment for work performed and includes ownership of any and all work product completed prior to that payment. This Section shall apply whether the CONSULTANT's Planning Services are terminated: a) by the completion of the AGREEMENT, or b) in accordance with other provisions of this AGREEMENT. Notwithstanding any other provision of this paragraph or AGREEMENT, the CONSULTANT shall have the right to make copies of all such plans, studies, sketches, drawings, computer printouts and disk files, and specifications. B. CONSULTANT shall not be responsible for damage caused by subsequent changes to or uses of the study or deliverable where the subsequent changes or uses are not authorized or approved by CONSULTANT, provided that the service rendered by CONSULTANT was not a proximate cause of the damage. C. The CONSULTANT's performance shall be evaluated by the SANITATION DISTRICT. A copy of the evaluation shall be sent to the CONSULTANT for comment. The evaluation, together with the comments, shall be retained by the SANITATION DISTRICT and may be considered in future CONSULTANT selection processes. 8. INSURANCE. A. General. i. Insurance shall be issued and underwritten by insurance companies acceptable to the SANITATION DISTRICT. ii. Insurers must have an "A-" Policyholder's Rating, or better, and Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best's Guide Rating. However, the SANITATION DISTRICT will accept State Compensation Insurance Fund, for the required policy of Worker's Compensation Insurance subject to the SANITATION DISTRICT's option to require a change in insurer in the event the State Fund financial rating is decreased below"B". Further, the SANITATION DISTRICT will require CONSULTANT to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within 20 days of written notice to CONSULTANT, by the SANITATION DISTRICT or its agent. iii. Coverage shall be in effect prior to the commencement of any work under this AGREEMENT. PSA -7- SP-141 Rev 052312 B. General Liability: The CONSULTANT shall maintain during the life of this AGREEMENT, including the period of warranty, Commercial General Liability Insurance written on an occurrence basis providing the following minimum limits of liability coverage: $2,000,000 per occurrence with $2,000,000 aggregate. Said insurance shall include coverage for the following hazards: Premises- Operations, blanket contractual liability (for this AGREEMENT), products liability/completed operations (including any product manufactured or assembled), broad form property damage, blanket contractual liability, independent contractors liability, personal and advertising injury, mobile equipment, owners and contractors protective liability, and cross liability and severability of interest clauses. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement(s). If requested by SANITATION DISTRICT and applicable, XCU coverage (Explosion, Collapse and Underground) must be included in the General Liability policy and coverage must be reflected on the submitted Certificate of Insurance. C. Umbrella Excess Liability: The minimum limits of general liability and automotive liability insurance required, as set forth herein, shall be provided for through either a single policy of primary insurance or a combination of policies of primary and umbrella excess coverage. Umbrella excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automotive liability. D. AutomotiveNehicle liability Insurance: The CONSULTANT shall maintain a policy of Automotive Liability insurance on a comprehensive form covering all owned, non-owned, and hired automobiles, trucks, and other vehicles providing the following minimum limits of liability coverage: Combined single limit of$1,000,000 or alternatively, $1,000,000 per person for bodily injury and $1,000,000 per accident for property damage. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement. E. Worker's Compensation Insurance: The CONSULTANT shall provide such Workers' Compensation Insurance as required by the Labor Code of the State of California in the amount of the statutory limit, including Employer's Liability Insurance with a minimum limit of$1,000,000 per occurrence. Such Worker's Compensation PSA -8- SP-141 Rev 052312 Return to Mende Report Insurance shall be endorsed to provide for a waiver of subrogation in favor of the SANITATION DISTRICT. A statement on an insurance certificate will not be accepted in lieu of the actual endorsements unless the insurance carrier is State of California Insurance Fund and the identifier "SCIF" and endorsement numbers 2570 and 2065 are referenced on the certificate of insurance. F. Errors and Omissions/Professional Liability: CONSULTANT shall maintain in full force and effect, throughout the term of this AGREEMENT, standard industry form professional negligence errors and omissions insurance coverage in an amount of not less than two million dollars ($2,000,000)with limits in accordance with the provisions of this Paragraph. If the policy of insurance is written on a "claims made" basis, said policy shall be continued in full force and effect at all times during the term of this AGREEMENT, and for a period of five (5) years from the date of the completion of the services hereunder. In the event of termination of said policy during this period, CONSULTANT shall obtain continuing insurance coverage for the prior acts or omissions of CONSULTANT during the course of performing services under the term of this AGREEMENT. Said coverage shall be evidenced by either a new policy evidencing no gap in coverage or by separate extended "tail' coverage with the present or new carrier. In the event the present policy of insurance is written on an "occurrence" basis, said policy shall be continued in full force and effect during the term of this AGREEMENT or until completion of the services provided for in this AGREEMENT, whichever is later. In the event of termination of said policy during this period, new coverage shall be obtained for the required period to insure for the prior acts of CONSULTANT during the course of performing services under the term of this AGREEMENT. CONSULTANT shall provide to the SANITATION DISTRICT a certificate of insurance in a form acceptable to the SANITATION DISTRICT indicating the deductible or self-retention amounts and the expiration date of said policy, and shall provide renewal certificates not less than ten (10) days prior to the expiration of each policy term. G. Proof of Coverage: The CONSULTANT shall furnish the SANITATION DISTRICT with original certificates and amendatory endorsements effecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by the SANITATION DISTRICT before work commences. The PSA -9- SP-141 Rev 052312 SANITATION DISTRICT reserves the right to require complete, certified copies of all required insurance policies, including endorsements, Effecting the coverage required, at any time. The following are approved forms that must be submitted as proof of coverage: • Certificate of ACORD Form 25 or equivalent. Insurance • Additional Insurance (ISO Form) CG2010 11 85 or (General Liability) The combination of(ISO Forms) CG 2010 1001 and CG 2037 1001 All other Additional Insured endorsements must be submitted for approval by the SANITATION DISTRICT, and the SANITATION DISTRICT may reject alternatives that provide different or less coverage to the SANITATION DISTRICT. • Additional Insured Submit endorsement provided by carrier (Auto Liability) for the SANITATION DISTRICT approval. • Waiver of State Compensation Insurance Fund Subrogation Endorsement No. 2570 or equivalent. • Cancellation Notice State Compensation Insurance Fund Endorsement No. 2065 or equivalent. H. Cancellation Notice: Each insurance policy required herein shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30) days' prior written notice. The Cancellation Section of ACORD Form 25 shall state the required thirty (30) days' written notification. The policy shall not terminate, nor shall it be cancelled, nor the coverage reduced until thirty (30) days after written notice is given to the SANITATION DISTRICT except for nonpayment of premium, which shall require not less than ten (10) days written notice to the SANITATION DISTRICT. Should there be changes in coverage or an increase in deductible or SIR amounts, the CONSULTANT and its insurance broker/agent shall send to the SANITATION DISTRICT a certified letter which includes a description of the changes in coverage and/or any increase in deductible or SIR amounts. The certified letter must be sent to the attention of Purchasing, PSA -10- SP-141 Rev 052312 Return to Mende Report Div. 230, and shall be received by the SANITATION DISTRICT not less than thirty (30) days prior to the effective date of the change(s) if the change would reduce coverage or increase deductibles or SIR amounts or otherwise reduce or limit the scope of insurance coverage provided to the SANITATION DISTRICT. I. Primary Insurance: All liability policies shall contain a Primary and Non Contributory Clause. Any other insurance maintained by the SANITATION DISTRICT shall be excess and not contributing with the insurance provided by CONSULTANT. J. Separation of Insured: All liability policies shall contain a "Separation of Insureds" clause. K. Non-Limiting (if applicable): Nothing in this document shall be construed as limiting in any way, nor shall it limit the indemnification provision contained in this AGREEMENT, or the extent to which CONSULTANT may be held responsible for payment of damages to persons or property. L. Deductibles and Self-Insured Retentions: Any deductible and/or self-insured retention must be declared to the SANITATION DISTRICT on the Certificate of Insurance. All deductibles and/or self-insured retentions require approval by the SANITATION DISTRICT. At the option of the SANITATION DISTRICT, either: the insurer shall reduce or eliminate such deductible or self-insured retention as respects the SANITATION DISTRICT; or the CONSULTANT shall provide a financial guarantee satisfactory to the SANITATION DISTRICT guaranteeing payment of losses and related investigations, claim administration and defense expenses. M. Defense Costs: Liability policies shall have a provision that defense costs for all insureds and additional insureds are paid in addition to and do not deplete any policy limits. PSA -11- SP-141 Rev 052312 N. Subconsultants: The CONSULTANT shall be responsible to establish insurance requirements for any Subconsultant hired by the CONSULTANT. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subconsultant's operations and work. 9. SCOPE CHANGES. In the event of a change in the Scope of Work or a change in the proposed Project, as requested by the SANITATION DISTRICT, the Parties hereto shall execute an Amendment to this AGREEMENT setting forth with particularity all terms of the new AGREEMENT, including, but not limited to any additional CONSULTANT's fees, changes in the period of performance, or modifications to the Scope of Work. CONSULTANT must obtain written approval from the SANITATION DISTRICT Project Manager prior to performing any work outside the approved Scope of Work. When CONSUTLANT foresees the possibility that any of the Project goals will not be met, CONSULTANT shall immediately notify the SANITATION DISTRICT Project Manager to discuss a corrective plan. A corrective plan will be required for any changes to Attachment"A", Scope of Work, schedule, budget, or level of quality. 10. PROJECT TEAM AND SUBCONSULTANTS. CONSULTANT shall provide to SANITATION DISTRICT, prior to execution of this AGREEMENT, the names and full description of all Subconsultants and CONSULTANT's project team members anticipated to be used on this Project under this AGREEMENT by CONSULTANT. CONSULTANT shall include a description of the work and services to be done by each Subconsultant and each of CONSULTANT's Project team members. CONSULTANT shall include the respective compensation amounts for CONSULTANT and each Subconsultant on a per-project-element basis, broken down as indicated in Section 2 (Compensation). There shall be no substitution of the listed Subconsultants and CONSULTANT's project team members without prior written approval by the SANITATION DISTRICT. 11. ENGINEERING REGISTRATION. The CONSULTANT's employees and Subconsultants are comprised of registered engineers and a staff of specialists and draftsmen in each department. The firm itself is not a registered engineer but represents and agrees that wherever, in the performance of this AGREEMENT, the services of a registered engineer is required, such services hereunder will be performed under the direct supervision of registered engineers who are registered in California. 12. AUDIT PROVISIONS. A. SANITATION DISTRICT retains the reasonable right to access, review, examine, and audit, any and all books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT PSA -12- SP-141 Rev 052312 Return to Mende Rom determines are necessary to discover and verify that the CONSULTANT is in compliance with all requirements under this AGREEMENT. The CONSULTANT shall include the SANITATION DISTRICT's right as described above, in any and all of their subagreements, and shall ensure that these rights are binding upon all Subconsultants. B. SANITATION DISTRICT retains the right to examine CONSULTANT's books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify all direct and indirect costs, of whatever nature, which are claimed to have been incurred, or anticipated to be incurred or to ensure CONSULTANT's compliance with all requirements under this AGREEMENT during the term of this AGREEMENT and for a period of three (3) years after its termination. C. CONSULTANT shall maintain complete and accurate records in accordance with generally accepted industry standard practices and the SANITATION DISTRICT's policy. The CONSULTANT shall make available to the SANITATION DISTRICT for review and audit, all Project related accounting records and documents, and any other financial data within 15 days after receipt of notice from the SANITATION DISTRICT. Upon SANITATION DISTRICT's request, the CONSULTANT shall submit exact duplicates of originals of all requested records to the SANITATION DISTRICT. If an audit is performed, CONSULTANT shall ensure that a qualified employee of the CONSULTANT will be available to assist SANITATION DISTRICT's auditor in obtaining all Project related accounting records and documents, and any other financial data. 13. LEGAL RELATIONSHIP BETWEEN PARTIES. The legal relationship between the parties hereto is that of an independent contractor and nothing herein shall be deemed to transform CONSULTANT, its staff, independent contractors, or Subconsultants into employees of the SANITATION DISTRICT. CONSULTANT'S staff performing services under the AGREEMENT shall at all times be employees and/or independent contractors of CONSULTANT. CONSULTANT shall monitor and control its staff and pay wages, salaries, and other amounts due directly to its staff in connection with the AGREEMENT. CONSULTANT shall be responsible for hiring, review, and termination of its staff and shall be accountable for all reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation, workers' compensation and similar matters. PSA -13- SP-141 Rev 052312 14. NOTICES. All notices hereunder and communications regarding the interpretation of the terms of this AGREEMENT, or changes thereto, shall be effected by delivery of said notices in person or by depositing said notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid and addressed as follows: ORANGE COUNTY SANITATION DISTRICT 10844 Ellis Avenue Fountain Valley, CA 92708 Attention: Sarah L. Strader, Senior Contract Administrator CONSULTANT: Black &Veatch Corporation Jeffrey S. Berk, P.E. 15651 Alton Parkway, #300. Irvine, CA 92618 All communication regarding the Scope of Work, will be addressed to the Project Manager. Direction from other OCSD staff must be approved by the OCSD Project Manager prior to action from the CONSULTANT. 15. TERMINATION. The SANITATION DISTRICT may terminate this AGREEMENT at any time, without cause, upon giving thirty (30) days written notice to CONSULTANT. In the event of such termination, CONSULTANT shall be entitled to compensation for work performed on a prorated basis through and including the effective date of termination. CONSULTANT shall be permitted to terminate this AGREEMENT upon thirty (30) days written notice only if CONSULTANT is not compensated for billed amounts in accordance with the provisions of this AGREEMENT, when the same are due. Notice of termination shall be mailed to the SANITATION DISTRICT at the address listed in Paragraph 13. 16. DOCUMENTS AND STUDY MATERIALS. The documents and study materials for this Project shall become the property of the SANITATION DISTRICT upon the termination or completion of the work. CONSULTANT agrees to furnish to the SANITATION DISTRICT copies of all memoranda, correspondence, electronic materials, computation and study materials in its files pertaining to the work described in this AGREEMENT, which is requested in writing by the SANITATION DISTRICT. COMPLIANCE. CONSULTANT certifies by the execution of this AGREEMENT that it pays employees not less than the minimum wage as defined by law, and that it does not discriminate in its employment with regard to race, color, religion, sex or national origin; that it is in compliance with all federal, state and local directives and executive orders regarding non-discrimination in employment; and that it agrees to demonstrate positively and aggressively the principle of equal opportunity in employment. PSA -14- SP-141 Rev 052312 Return to Mende Report 17. AGREEMENT EXECUTION AUTHORIZATION. Both the SANITATION DISTRICT and CONSULTANT do covenant that each individual executing this document by and on behalf of each Party is a person duly authorized to execute this AGREEMENT for that Party. 18. DISPUTE RESOLUTION. In the event of a dispute arising between the parties regarding performance or interpretation of this AGREEMENT, the dispute shall be resolved by binding arbitration under the auspices of the Judicial Arbitration and Mediation Service ("JAMS"), or similar organization or entity conducting alternate dispute resolution services. 19. ATTORNEY'S FEES, COSTS AND NECESSARY DISBURSEMENTS. If any action at law or inequity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this AGREEMENT, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 20. WARRANTY. CONSULTANT shall perform its services in accordance with generally accepted industry and professional standards. If, within the 12-month period following completion of its services, the SANITATION DISTRICT informs CONSULTANT that any part of the services fails to meet those standards, CONSULTANT shall, within the time prescribed by the SANITATION DISTRICT, take all such actions as are necessary to correct or complete the noted deficiency(ies). 21. INDEMNIFICATION. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend (at CONSULTANT'S sole cost and expense and with legal counsel approved by the SANITATION DISTRICT, which approval shall not be unreasonably withheld), protect and hold harmless the SANITATION DISTRICT and all of SANITATION DISTRICT'S officers, directors, employees, CONSULTANT's, and agents (collectively the "Indemnified Parties"), from and against any and all claims, damages, liabilities, causes of action, suits, arbitration awards, losses,judgments, fines, penalties, costs and expenses (including, without limitation, attomeys' fees, disbursements and court costs, and all other professional, expert or CONSULTANT'S fees and costs and the SANITATION DISTRICT'S general and administrative expenses; individually, a "Claim"; collectively, "Claims")which may arise from, pertain to, or relate to any work performed, or any operations, activities, or services provided by CONSULTANT in carrying out its obligations under this AGREEMENT to the extent of the negligent, recklessness and/or willful misconduct of CONSULTANT, its principals, officers, agents, employees, CONSULTANT'S suppliers, CONSULTANT, subconsultants, subcontractors, and/or anyone employed directly or indirectly by any of them, regardless of any contributing negligence or strict liability of an Indemnified Party. Notwithstanding the foregoing, nothing herein shall be construed to require CONSULTANT to indemnify the Indemnified Parties from any Claim arising solely from: PSA -15- SP-141 Rev 052312 (A) the active negligence or willful misconduct of the Indemnified Parties; or (B) a natural disaster or other act of God, such as an earthquake; or (C)the independent action of a third party who is neither one of the Indemnified Parties nor the CONSULTANT, nor its principal, officer, agent, employee, nor CONSULTANT'S supplier, CONSULTANT, subconsultant, subcontractor, nor anyone employed directly or indirectly by any of them. Exceptions (A)through (B) above shall not apply, and CONSULTANT shall, to the fullest extent permitted by law, indemnify the Indemnified Parties, from Claims arising from more than one cause if any such cause taken alone would otherwise result in the obligation to indemnify hereunder. CONSULTANT'S liability for indemnification hereunder is in addition to any liability CONSULTANT may have to the SANITATION DISTRICT for a breach by CONSULTANT of any of the provisions of this AGREEMENT. Under no circumstances shall the insurance requirements and limits set forth in this AGREEMENT be construed to limit CONSULTANT'S indemnification obligation or other liability hereunder. The terms of this AGREEMENT are contractual and the result of negotiation between the parties hereto. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this AGREEMENT. 23. DUTY TO DEFEND. The duty to defend hereunder is wholly independent of and separate from the duty to indemnify and such duty to defend shall exist regardless of any ultimate liability of CONSULTANT and shall be consistent with Civil Code section 2782.8. Such defense obligation shall arise immediately upon presentation of a Claim by any person if, without regard to the merit of the Claim, such Claim could potentially result in an obligation to indemnify one or more Indemnified Parties, and upon written notice of such Claim being provided to CONSULTANT. Payment to CONSULTANT by any Indemnified Party or the payment or advance of defense costs by any Indemnified Party shall not be a condition precedent to enforcing such Indemnified Party's rights to indemnification hereunder. In the event a final judgment, arbitration, award, order, settlement, or other final resolution expressly determines that the claim did not arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, to any extent, then the DISTRICT will reimburse CONSULTANT for the reasonable costs of defending the Indemnified Parties against such claims. CONSULTANT'S indemnification obligation hereunder shall survive the expiration or earlier termination of this AGREEMENT until such time as action against the Indemnified Parties for such matter indemnified hereunder is fully and finally barred by the applicable statute of limitations. PSA -16- SP-141 Rev 052312 Return to Mende Rom 24. ENTIRE AGREEMENT. This AGREEMENT constitutes the entire understanding and AGREEMENT between the Parties and supersedes all previous negotiations between them pertaining to the subject matter thereof. IN WITNESS WHEREOF, this AGREEMENT has been executed in the name of the SANITATION DISTRICT, by its officers thereunto duly authorized, and CONSULTANT as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT By Chair, Board of Directors Date By Clerk of the Board Date BLACK & VEATCH CORPORATION By Date By Date ORANGE COUNTY SANITATION DISTRICT By Marc Dubois Date Contracts, Purchasing and Materials Management Manager SLS:ms EDMS: 003977287 Attachments: Attachment"A:'—Scope of Work Attachment"B" (NOT USED) Attachment"C" (NOT USED) Attachment"D"—Allowable Direct Costs Attachment"E"—Fee Proposal Form Attachment"F" (NOT USED) Attachment"G"—Cost Matrix Attachment"H" (NOT USED) Attachment"I" (NOT USED) Attachment"J"—Minor Subconsultant Hourly Rate Schedule PSA -17- SP-141 Rev 052312 OPERATIONS COMMITTEE Meeting Dare TOBA.Of DIr. 09/04/13 Og/25/13 AGENDA REPORT Item Number Item Number 3 8 Orange County Sanitation District FROM: James Herberg, General Manager Originator: Nick Kanetis, Director of Engineering CIP Project Manager: Victoria Pilko SUBJECT: PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2, PROJECT NO. P2-101 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Consultant Services Agreement with Carollo Engineers to provide construction support services for Plant Water System Rehabilitation at Plant No. 2, Project No. P2-101, for an amount not to exceed $225,108; and, B. Approve a contingency of$22,511 (10%). SUMMARY This project will rehabilitate or replace deteriorating plant water pipe and valves that are in need of replacement due to corrosion. This project also includes temporary measures to ensure that the treatment plant maintains continuous operations during the repairs. Carollo Engineers has satisfactorily furnished engineering services for the design of Project No. P2-101, and their engineering support services during construction will provide continuity through the completion of the project. The proposed engineering services during construction will be provided on an as-needed basis and will include reviewing submittals, responding to Contractor's Requests for Information, reviewing and preparing design changes, preparing record drawings, and assisting in closeout of the project. Staff negotiated with Carollo Engineers for these support services in accordance with the Orange County Sanitation District's (Sanitation District) adopted policies and procedures. A review of the proposed price was conducted using estimated quantities of Requests for Information, submittals, meetings, site visits, change order review, and design revisions, as well as the level of effort for preparing record drawings. Based on this review, staff determined the negotiated fee to be fair and reasonable for these services. Staff recommends awarding a Professional Consultant Services Agreement with Carollo Engineers for an amount not to exceed $225,108, and approving a contingency of$22,511 (10%). Page 1 of 2 PRIOR COMMITTEE/BOARD ACTIONS June 2013 — Authorized staff to enter into negotiations with Carollo Engineers for construction support services for Plant Water System Rehabilitation at Plant No. 2, Project P2-101. ADDITIONAL INFORMATION None. CEQA A Notice of Exemption was filed and recorded on May 5, 2008. BUDGET/DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted (Line item: FY 2013-14 Update, Page A-10) and the budget is sufficient for the recommended action. Date of ADDroval Contract Amount Continaencv 09/25/13 $225,108 $22,511 (10%) ATTACHMENT The following attachment(s) maybe viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: Professional Consultant Services Agreement NK:DF:VP:dm:gc Page 2 of 2 Return to Mends Report PROFESSIONAL CONSULTANT SERVICES AGREEMENT THIS AGREEMENT, is made and entered into to be effective the 250 day of September, 2013 by and between the ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "SANITATION DISTRICT", and Carollo Engineers, for purposes of this Agreement hereinafter referred to as "CONSULTANT'. WITNESSETH: WHEREAS, the SANITATION DISTRICT desires to engage a CONSULTANT to provide Construction Support Services for Plant Water System Rehabilitation at Plant No. 2, P2.1011; and, WHEREAS, CONSULTANT is qualified to provide the necessary services for Construction Support Services in connection with these requirements; and, WHEREAS, the SANITATION DISTRICT has adopted procedures in accordance with the Delegation of Authority (DOA) Section 5.7 (f)and (g)for the selection of Construction Support Services and has proceeded in accordance with said procedures to perform this work; and, WHEREAS, at its regular meeting on September 25, 2013 the Board of Directors, by Minute Order, accepted the recommendation of the Operations Committee to approve this Agreement between the SANITATION DISTRICT and CONSULTANT. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this Agreement, it is mutually agreed as follows: 1. SCOPE OF WORK CONSULTANT agrees to furnish necessary professional and technical services to accomplish those project elements outlined in the Scope of Work attached hereto as "Attachment A", and by this reference made a part of this Agreement. A. The CONSULTANT shall be responsible for the professional quality, technical accuracy, completeness, and coordination of all design, drawings, specifications, and other services furnished by the CONSULTANT under this Agreement, including the work performed by its Subconsultants. Where approval by the SANITATION DISTRICT is indicated, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all laws, codes, industry standards and liability for damages caused by errors, omissions, noncompliance with industry standards, and/or negligence on the part of the CONSULTANT or its Subconsultants. B. CONSULTANT is responsible for the quality of work prepared under this Agreement and shall ensure that all work is performed to the standards of best engineering practice for clarity, uniformity, and completeness. PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 1 of 16 C. In the event that work is not performed to the satisfaction of the SANITATION DISTRICT and does not conform to the requirements of this agreement or any applicable industry standards, the CONSULTANT shall, without additional compensation, promptly correct or revise any errors or deficiencies in its designs, drawings, specifications, or other services within the timeframe specified by the Project Engineer/Project Manager. The SANITATION DISTRICT may charge to CONSULTANT all costs, expenses and damages associated with any such corrections or revisions. D. All CADD drawings, figures, and other work shall be produced by CONSULTANTS and Subconsultants using the SANITATION DISTRICT standard software. Conversion of CADD work from any other non-standard CADD format to the SANITATION DISTRICT format shall not be acceptable in lieu of this requirement. Electronic files shall be subject to an acceptance period of thirty (30)calendar days during which the SANITATION DISTRICT shall perform appropriate acceptance tests. CONSULTANT shall correct any discrepancies or errors detected and reported within the acceptance period at no additional cost to the SANITATION DISTRICT. E. All professional services performed by the CONSULTANT, including but not limited to all drafts, data, correspondence, proposals, reports, and estimates compiled or composed by the CONSULTANT, pursuant to this Agreement, are for the sole use of the SANITATION DISTRICT, its agents and employees. Neither the documents nor their contents shall be released to any third parry without the prior written consent of the SANITATION DISTRICT. This provision does not apply to information that (a)was publicly known, or otherwise known to the CONSULTANT, at the time that it was disclosed to the CONSULTANT by the SANITATION DISTRICT, (b)subsequently becomes publicly known to the CONSULTANT other than through disclosure by the SANITATION DISTRICT. 2. COMPENSATION Total compensation shall be paid to CONSULTANT for services in accordance with the following provisions: A. Total Compensation Total compensation shall be in an amount not to exceed Two Hundred Twenty- Five Thousand One Hundred Eight Dollars ($225,108). Total compensation to CONSULTANT including burdened labor (salaries plus benefits), overhead, profit, direct costs, and Subconsultant(s)fees and costs shall not exceed the sum set forth in Attachment"E" - Fee Proposal. B. Labor As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall pay to CONSULTANT a sum equal to the burdened salaries (salaries plus benefits)actually paid by CONSULTANT PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 2 of 16 Return to Mends Report charged on an hourly-rate basis to this project and paid to the personnel of CONSULTANT. Upon request of the SANITATION DISTRICT, CONSULTANT shall provide the SANITATION DISTRICT with certified payroll records of all employees'work that is charged to this project. C. Overhead As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall compensate CONSULTANT and Subconsultants for overhead at the rate equal to the percentage of burdened labor as specified in Attachment"E"- Fee Proposal. D. Profit Profit for CONSULTANT and Subconsultants shall be a percentage of consulting services fees (Burdened Labor and Overhead). When the consulting or subconsulting services amount is $250,000 or less, the maximum Profit shall be 10%. Between $250,000 and $2,500,000, the maximum Profit shall be limited by a straight declining percentage between 10% and 5%. For consulting or subconsulting services fees with a value greater than $2,500,000, the maximum Profit shall be 5%. Addenda shall be governed by the same maximum Profit percentage after adding consulting services fees. As a portion of the total compensation to be paid to CONSULTANT and Subconsultants, the SANITATION DISTRICT shall pay profit for all services rendered by CONSULTANT and Subconsultants for this project according to Attachment"E"- Fee Proposal. E. Subconsultants For any Subconsultant whose fees for services are greater than or equal to $100,000 (excluding out-of-pocket costs), CONSULTANT shall pay to Subconsultant total compensation in accordance with the Subconsultant amount specified in Attachment"E"- Fee Proposal. For any Subconsultant whose fees for services are less than $100,000, CONSULTANT may pay to Subconsultant total compensation on an hourly-rate basis and as specified in the Scope of Work. The SANITATION DISTRICT shall pay to CONSULTANT the actual costs of Subconsultant fees and charges in an amount not to exceed the sum set forth in Attachment"E"- Fee Proposal. F. Direct Costs The SANITATION DISTRICT shall pay to CONSULTANT and Subconsultants the actual costs of permits and associated fees, travel and licenses for an amount not to exceed the sum set forth in Attachment"E"- Fee Proposal. The SANITATION DISTRICT shall also pay to CONSULTANT actual costs for equipment rentals, leases or purchases with prior approval of the SANITATION PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 3 of 16 DISTRICT. Upon request, CONSULTANT shall provide to the SANITATION DISTRICT receipts and other documentary records to support CONSULTANT's request for reimbursement of these amounts, see Attachment"D"—Allowable Direct Costs. All incidental expenses shall be included in overhead pursuant to Section 2 -COMPENSATION above. 3. REALLOCATION OF TOTAL COMPENSATION The SANITATION DISTRICT, by its Director of Engineering, shall have the right to approve a reallocation of the incremental amounts constituting the total compensation, provided that the total compensation is not increased. 4. PAYMENT A. Monthly Invoice: CONSULTANT shall include in its monthly invoice, a detailed breakdown of costs associated with the performance of any corrections or revisions of the work for that invoicing period. CONSULTANT shall allocate costs in the same manner as it would for payment requests as described in this Section of the Agreement. CONSULTANT shall warrant and certify the accuracy of these costs and understand that submitted costs are subject to Section 11 -AUDIT PROVISIONS. B. CONSULTANT may submit monthly or periodic statements requesting payment for those items included in Section 2- COMPENSATION hereof in the format as required by the SANITATION DISTRICT. Such requests shall be based upon the amount and value of the work and services performed by CONSULTANT under this Agreement and shall be prepared by CONSULTANT and accompanied by such supporting data, including a detailed breakdown of all costs incurred and project element work performed during the period covered by the statement, as may be required by the SANITATION DISTRICT. Upon approval of such payment request by the SANITATION DISTRICT, payment shall be made to CONSULTANT as soon as practicable of one hundred percent (100%)of the invoiced amount on a per-project-element basis. If the SANITATION DISTRICT determines that the work under this Agreement or any specified project element hereunder, is incomplete and that the amount of payment is in excess of: i. The amount considered by the SANITATION DISTRICT's Director of Engineering to be adequate for the protection of the SANITATION DISTRICT; or ii. The percentage of the work accomplished for each project element. He may, at his discretion, retain an amount equal to that which insures that the total amount paid to that date does not exceed the percentage of the completed work for each project element or the project in its entirety. PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 4 of 16 Return to Mende Report C. CONSULTANT may submit periodic payment requests for each 30-day period of this Agreement for the profit as set forth in Section 2- COMPENSATION above. Said profit payment request shall be proportionate to the work actually accomplished to date on a per-project-element basis. In the event the SANITATION DISTRICTS Director of Engineering determines that no satisfactory progress has been made since the prior payment, or in the event of a delay in the work progress for any reason, the SANITATION DISTRICT shall have the right to withhold any scheduled proportionate profit payment. D. Upon satisfactory completion by CONSULTANT of the work called for under the terms of this Agreement, and upon acceptance of such work by the SANITATION DISTRICT, CONSULTANT will be paid the unpaid balance of any money due for such work, including any retained percentages relating to this portion of the work. E. Upon satisfactory completion of the work performed hereunder and prior to final payment under this Agreement for such work, or prior settlement upon termination of this Agreement, and as a condition precedent thereto, CONSULTANT shall execute and deliver to the SANITATION DISTRICT a release of all claims against the SANITATION DISTRICT arising under or by virtue of this Agreement other than such claims, if any, as may be specifically exempted by CONSULTANT from the operation of the release in stated amounts to be set forth therein. F. Pursuant to the California False Claims Act(Government Code Sections 12650- 12655), any CONSULTANT that knowingly submits a false claim to the SANITATION DISTRICT for compensation under the terms of this Agreement may be held liable for treble damages and up to a $10,000 civil penalty for each false claim submitted. This Section shall also be binding on all Subconsultants. A CONSULTANT or Subconsultant shall be deemed to have submitted a false claim when the CONSULTANT or Subconsultant: a) knowingly presents or causes to be presented to an officer or employee of the SANITATION DISTRICT a false claim or request for payment or approval; b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the SANITATION DISTRICT; c) conspires to defraud the SANITATION DISTRICT by getting a false claim allowed or paid by the SANITATION DISTRICT; d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to the SANITATION DISTRICT; or e) is a beneficiary of an inadvertent submission of a false claim to the SANITATION DISTRICT, and fails to disclose the false claim to the SANITATION DISTRICT within a reasonable time after discovery of the false claim. 5. PREVAILING WAGES To the extent CONSULTANT intends to employ employees who will perform work during the design and preconstruction phases of a construction contract, as more specifically defined under Labor Code Section 1720, CONSULTANT shall be subject to prevailing wage requirements with respect to such employees. PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 5 of 16 6. DOCUMENT OWNERSHIP—SUBSEQUENT CHANGES TO PLANS AND SPECIFICATIONS A. Ownership of Documents for the Professional Services performed. All documents, including but not limited to, original plans, studies, sketches, drawings, computer printouts and disk files, and specifications prepared in connection with or related to the Scope of work or Professional Services, shall be the property of the SANITATION DISTRICT. The SANITATION DISTRICT's ownership of these documents includes use of, reproduction or reuse of and all incidental rights, whether or not the work for which they were prepared has been performed. The SANITATION DISTRICT ownership entitlement arises upon payment or any partial payment for work performed and includes ownership of any and all work product completed prior to that payment. This Section shall apply whether the CONSULTANT's Professional Services are terminated: a) by the completion of the Agreement, or b) in accordance with other provisions of this Agreement. Notwithstanding any other provision of this paragraph or Agreement, the CONSULTANT shall have the right to make copies of all such plans, studies, sketches, drawings, computer printouts and disk files, and specifications. B. CONSULTANT shall not be responsible for damage caused by subsequent changes to or uses of the plans or specifications, where the subsequent changes or uses are not authorized or approved by CONSULTANT, provided that the service rendered by CONSULTANT was not a proximate cause of the damage. 7. INSURANCE A. General i. Insurance shall be issued and underwritten by insurance companies acceptable to the SANITATION DISTRICT. ii. Insurers must have an "A-" Policyholder's Rating, or better, and Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best's Guide Rating. However, the SANITATION DISTRICT will accept State Compensation Insurance Fund, for the required policy of Workers Compensation Insurance subject to the SANITATION DISTRICT's option to require a change in insurer in the event the State Fund financial rating is decreased below"B". Further, the SANITATION DISTRICT will require Contractor to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within 20 days of written notice to Contractor, by the SANITATION DISTRICT or its agent. III. Coverage shall be in effect prior to the commencement of any work under this Agreement. B. General Liability The CONSULTANT shall maintain during the life of this agreement, including the period of warranty, Commercial General Liability Insurance written on an occurrence basis providing the following minimum limits of liability coverage: One PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 6 of 16 Return to Mends Report Million Dollars ($1,000,000) per occurrence with One Million Dollars ($1,000,000) aggregate. Said insurance shall include coverage for the following hazards: Premises-Operations, blanket contractual liability (for this Agreement), products liability/completed operations (including any product manufactured or assembled), broad form property damage, blanket contractual liability, independent contractors liability, personal and advertising injury, mobile equipment, owners and contractors protective liability, and cross liability and severability of interest clauses. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement(s). If requested by SANITATION DISTRICT and applicable, XCU coverage (Explosion, Collapse and Underground) must be included in the General Liability policy and coverage must be reflected on the submitted Certificate of Insurance. C. Umbrella Excess Liability The minimum limits of general liability and automotive liability insurance required, as set forth herein, shall be provided for through either a single policy of primary insurance or a combination of policies of primary and umbrella excess coverage. Umbrella excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automotive liability. D. AutomotiveNehicle liability Insurance The CONSULTANT shall maintain a policy of Automotive Liability insurance on a comprehensive form covering all owned, non-owned, and hired automobiles, trucks, and other vehicles providing the following minimum limits of liability coverage: Combined single limit of One Million Dollars ($1,000,000)or alternatively, One Million Dollars ($1,000,000) per person for bodily injury and One Million Dollars ($1,000,000) per accident for property damage. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement. E. Worker's Compensation Insurance The CONSULTANT shall provide such Workers' Compensation Insurance as required by the Labor Code of the State of California in the amount of the statutory limit, including Employer's Liability Insurance with a minimum limit of One Million Dollars ($1,000,000) per occurrence. Such Worker's Compensation Insurance shall be endorsed to provide for a waiver of subrogation in favor of the SANITATION DISTRICT. A statement on an insurance certificate will not be accepted in lieu of the actual endorsements unless the insurance carrier is State of California Insurance Fund and the identifier'SCIF' and endorsement numbers 2570 and 2065 are referenced on the certificate of insurance. F. Errors and Omissions/Professional Liability CONSULTANT shall maintain in full force and effect, throughout the term of this Agreement, standard industry form professional negligence errors and omissions insurance coverage in an amount of not less than Two Million Dollars PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 7 of 16 ($2,000,000)with limits in accordance with the provisions of this Paragraph. If the policy of insurance is written on a "claims made" basis, said policy shall be continued in full force and effect at all times during the term of this Agreement, and for a period of five (5) years from the date of the completion of the services hereunder. In the event of termination of said policy during this period, CONSULTANT shall obtain continuing insurance coverage for the prior acts or omissions of CONSULTANT during the course of performing services under the term of this Agreement. Said coverage shall be evidenced by either a new policy evidencing no gap in coverage or by separate extended "tail" coverage with the present or new carrier. In the event the present policy of insurance is written on an "occurrence" basis, said policy shall be continued in full force and effect during the term of this Agreement or until completion of the services provided for in this Agreement, whichever is later. In the event of termination of said policy during this period, new coverage shall be obtained for the required period to insure for the prior acts of CONSULTANT during the course of performing services under the term of this Agreement. CONSULTANT shall provide to the SANITATION DISTRICT a certificate of insurance in a form acceptable to the SANITATION DISTRICT indicating the deductible or self-retention amounts and the expiration date of said policy, and shall provide renewal certificates not less than ten (10)days prior to the expiration of each policy term. G. Proof of Coverage The CONSULTANT shall furnish the SANITATION DISTRICT with original certificates and amendatory endorsements effecting coverage. Said policies and endorsements shall conform to the requirements herein stated.All certificates and endorsements are to be received and approved by the SANITATION DISTRICT before work commences. The SANITATION DISTRICT reserves the right to require complete, certified copies of all required insurance policies, including endorsements, effecting the coverage required, at any time. The following are approved forms that must be submitted as proof of coverage: • Certificate of Insurance ACORD Form 25-5(7/97)or equivalent. • Additional Insurance (ISO Form) CG2010 11 85 or (General Liability) The combination of(ISO Forms) CG 2010 1001 and CG 2037 1001 All other Additional Insured endorsements must be submitted for approval by the SANITATION DISTRICT, and the SANITATION DISTRICT may reject alternatives that provide different or less coverage to the SANITATION DISTRICT. PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 8 of 16 Return to Anemia Report • Additional Insured Submit endorsement provided by carrier for the (Auto Liability) SANITATION DISTRICT approval. • Waiver of Subrogation State Compensation Insurance Fund Endorsement No. 2570 or equivalent. • Cancellation Notice State Compensation Insurance Fund Endorsement No. 2065 or equivalent. H. Cancellation Notice Each insurance policy required herein shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty(30) days' prior written notice. The Cancellation Section of ACORD Form 25-5 (7/97) shall state the required thirty (30)days' written notification. The policy shall not terminate, nor shall it be cancelled, nor the coverage reduced until thirty (30)days after written notice is given to the SANITATION DISTRICT except for nonpayment of premium, which shall require not less than ten (10)days written notice to the SANITATION DISTRICT. Should there be changes in coverage or an increase in deductible or SIR amounts, the CONSULTANT and its insurance broker/agent shall send to the SANITATION DISTRICT a certified letter which includes a description of the changes in coverage and/or any increase in deductible or SIR amounts. The certified letter must be sent to the attention of Contracts Administration, Div. 230, and shall be received by the SANITATION DISTRICT not less than thirty (30)days prior to the effective date of the change(s) if the change would reduce coverage or increase deductibles or SIR amounts or otherwise reduce or limit the scope of insurance coverage provided to the SANITATION DISTRICT. I. Primary Insurance All liability policies shall contain a Primary and Non Contributory Clause. Any other insurance maintained by the SANITATION DISTRICT shall be excess and not contributing with the insurance provided by CONSULTANT. J. Separation of Insured All liability policies shall contain a 'Separation of Insureds" clause. K. Non-Limiting (if applicable) Nothing in this document shall be construed as limiting in any way, nor shall it limit the indemnification provision contained in this Agreement, or the extent to which CONSULTANT may be held responsible for payment of damages to persons or property. L. Deductibles and Self-Insured Retentions Any deductible and/or self insured retention must be declared to the SANITATION DISTRICT on the Certificate of Insurance. All deductibles and/or PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 9 of 16 self insured retentions require approval by the SANITATION DISTRICT. At the option of the SANITATION DISTRICT, either: the insurer shall reduce or eliminate such deductible or self-insured retention as respects the SANITATION DISTRICT; or the CONSULTANT shall provide a financial guarantee satisfactory to the SANITATION DISTRICT guaranteeing payment of losses and related investigations, claim administration and defense expenses. M. Defense Costs Liability policies shall have a provision that defense costs for all insureds and additional insureds are paid in addition to and do not deplete any policy limits. N. Subconsultants The CONSULTANT shall be responsible to establish insurance requirements for any Subconsultant hired by the CONSULTANT. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subconsultant's operations and work. 8. SCOPE CHANGES In the event of a change in the scope of the proposed project, requested by SANITATION DISTRICT, the parties hereto shall execute an addendum to this Agreement setting forth with particularity all terms of the new Agreement, including but not limited to any additional CONSULTANT's fees. 9. PROJECT TEAM AND SUBCONSULTANTS CONSULTANT shall provide to SANITATION DISTRICT, prior to execution of this Agreement, the names and full description of all Subconsultants and CONSULTANT's project team members anticipated to be used on this project by CONSULTANT. CONSULTANT shall include a description of the scope of work to be done by each Subconsultant and each CONSULTANT's project team member. CONSULTANT shall include the respective compensation amounts for CONSULTANT and each Subconsultant on a per-project-element basis, broken down as indicated in Section 2-COMPENSATION. There shall be no substitution of the listed Subconsultants and CONSULTANT's project team members without prior written approval by the SANITATION DISTRICT. 10. ENGINEERING REGISTRATION The CONSULTANT's personnel are comprised of registered engineers and a staff of specialists and draftsmen in each department. The firm itself is not a registered engineer but represents and agrees that wherever in the performance of this Agreement requires the services of a registered engineer. Such services hereunder will be performed under the direct supervision of registered engineers. PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 10 of 16 Return to Mends Report 11. AUDIT PROVISIONS A. SANITATION DISTRICT retains the reasonable right to access, review, examine, and audit, any and all books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify that the CONSULTANT is in compliance with all requirements under this Agreement. The CONSULTANT shall include the SANITATION DISTRICT's right as described above, in any and all of their subcontracts, and shall ensure that these rights are binding upon all Subconsultants. B. SANITATION DISTRICT retains the right to examine CONSULTANT's books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify all direct and indirect costs, of whatever nature, which are claimed to have been incurred, or anticipated to be incurred or to ensure CONSULTANT's compliance with all requirements under this Agreement during the term of this Agreement and for a period of three (3)years after its termination. C. CONSULTANT shall maintain complete and accurate records in accordance with generally accepted industry standard practices and the SANITATION DISTRICT's policy. The CONSULTANT shall make available to the SANITATION DISTRICT for review and audit, all Project related accounting records and documents, and any other financial data within 15 days after receipt of notice from the SANITATION DISTRICT. Upon SANITATION DISTRICT's request, the CONSULTANT shall submit exact duplicates of originals of all requested records to the SANITATION DISTRICT. If an audit is performed, CONSULTANT shall ensure that a qualified employee of the CONSULTANT will be available to assist SANITATION DISTRICT's auditor in obtaining all Project related accounting records and documents, and any other financial data. 12. LEGAL RELATIONSHIP BETWEEN PARTIES The legal relationship between the parties hereto is that of an independent contractor and nothing herein shall be deemed to make CONSULTANT an employee of the SANITATION DISTRICT. 13. NOTICES All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of said notices in person or by depositing said notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid. Notices shall be mailed to the SANITATION DISTRICT at: ORANGE COUNTY SANITATION DISTRICT 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Attention: Natasha K. Dubrovski, Principal Contracts Administrator Copy: Victoria Pilko, Project Manager PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 11 of 16 Notices shall be mailed to CONSULTANT at: CAROLLO ENGINEERS 10540 Talbert Avenue, Suite 200 East Fountain Valley, CA 92708 Attention: Douglas J. Lanning, Project Manager All communication regarding the Scope of Work, will be addressed to the Project Manager. Direction from other SANITATION DISTRICT's staff must be approved in writing by the SANITATION DISTRICT's Project Manager prior to action from the CONSULTANT. 14. TERMINATION The SANITATION DISTRICT may terminate this Agreement at any time, without cause, upon giving thirty(30) days written notice to CONSULTANT. In the event of such termination, CONSULTANT shall be entitled to compensation for work performed on a prorated basis through and including the effective date of termination. CONSULTANT shall be permitted to terminate this Agreement upon thirty (30)days written notice only if CONSULTANT is not compensated for billed amounts in accordance with the provisions of this Agreement, when the same are due. Notice of termination shall be mailed to the SANITATION DISTRICT and/or CONSULTANT in accordance with Section 13- NOTICES. 15. DOCUMENTS AND STUDY MATERIALS The documents and study materials for this project shall become the property of the SANITATION DISTRICT upon the termination or completion of the work. CONSULTANT agrees to furnish to the SANITATION DISTRICT copies of all memoranda, correspondence, computation and study materials in its files pertaining to the work described in this Agreement, which is requested in writing by the SANITATION DISTRICT. 16. COMPLIANCE CONSULTANT certifies by the execution of this Agreement that it pays employees not less than the minimum wage as defined by law, and that it does not discriminate in its employment with regard to race, color, religion, sex or national origin; that it is in compliance with all federal, state and local directives and executive orders regarding non-discrimination in employment; and that it agrees to demonstrate positively and aggressively the principle of equal opportunity in employment. 17. AGREEMENT EXECUTION AUTHORIZATION Both the SANITATION DISTRICT and CONSULTANT do covenant that each individual executing this document by and on behalf of each party is a person duly authorized to execute agreements for that party. PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 12 of 16 Return to Mends Report 18. DISPUTE RESOLUTION In the event of a dispute arising between the parties regarding performance or interpretation of this Agreement, the dispute shall be resolved by binding arbitration under the auspices of the Judicial Arbitration and Mediation Service ("JAMS"), or similar organization or entity conducting alternate dispute resolution services. 19. ATTORNEY'S FEES, COSTS AND NECESSARY DISBURSEMENTS If any action at law or in equity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 20. PROGRESS REPORTS Monthly progress reports shall be submitted for review by the tenth day of the following month and must include as a minimum: 1)current activities, 2)future activities, 3) potential items that are not included in the Scope of Work, 4) concerns and possible delays, 5) percentage of completion, and 6) budget status. 21. WARRANTY CONSULTANT shall perform its services in accordance with generally accepted industry and professional standards. If, within the 12-month period following completion of its services, the SANITATION DISTRICT informs CONSULTANT that any part of the services fails to meet those standards, CONSULTANT shall, within the time prescribed by the SANITATION DISTRICT, take all such actions as are necessary to correct or complete the noted deficiency(ies). 22. INDEMNIFICATION To the fullest extent permitted by law, CONSULTANT shall indemnify, defend (at CONSULTANT'S sole cost and expense and with legal counsel approved by the SANITATION DISTRICT, which approval shall not be unreasonably withheld), protect and hold harmless the SANITATION DISTRICT and all of SANITATION DISTRICT'S officers, directors, employees, CONSULTANT's, and agents (collectively the "Indemnified Parties"), from and against any and all claims, damages, liabilities, causes of action, suits, arbitration awards, losses,judgments, fines, penalties, costs and expenses (including, without limitation, attomeys' fees, disbursements and court costs, and all other professional, expert or CONSULTANT'S fees and costs and the SANITATION DISTRICT'S general and administrative expenses; individually, a "Claim"; collectively, "Claims')which may arise from or are in any manner related, directly or indirectly, to any work performed, or any operations, activities, or services provided by CONSULTANT in carrying out its obligations under this Agreement to the extent of the negligent, recklessness and/or willful misconduct of CONSULTANT, its principals, officers, agents, employees, CONSULTANT'S suppliers, CONSULTANT, Subconsultants, subcontractors, and/or anyone employed directly or indirectly by any of them, regardless of any contributing negligence or strict liability of an Indemnified Party. Notwithstanding the foregoing, nothing herein shall be construed to require PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 13 of 16 CONSULTANT to indemnify the Indemnified Parties from any Claim arising solely from: (A)the active negligence or willful misconduct of the Indemnified Parties; or (B)a natural disaster or other act of God, such as an earthquake; or (C)the independent action of a third party who is neither one of the Indemnified Parties nor the CONSULTANT, nor its principal, officer, agent, employee, nor CONSULTANT'S supplier, CONSULTANT, Subconsultant, subcontractor, nor anyone employed directly or indirectly by any of them. Exceptions (A)through (B) above shall not apply, and CONSULTANT shall, to the fullest extent permitted by law, indemnify the Indemnified Parties, from Claims arising from more than one cause if any such cause taken alone would otherwise result in the obligation to indemnify hereunder. CONSULTANT'S liability for indemnification hereunder is in addition to any liability CONSULTANT may have to the SANITATION DISTRICT for a breach by CONSULTANT of any of the provisions of this Agreement. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit CONSULTANT'S indemnification obligation or other liability hereunder. The terms of this Agreement are contractual and the result of negotiation between the parties hereto. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654)that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. 23. DUTY TO DEFEND The duty to defend hereunder is wholly independent of and separate from the duty to indemnify and such duty to defend shall exist regardless of any ultimate liability of CONSULTANT and shall be consistent with Civil Code Section 2782.8. Such defense obligation shall arise immediately upon presentation of a Claim by any person if, without regard to the merit of the Claim, such Claim could potentially result in an obligation to indemnify one or more Indemnified Parties, and upon written notice of such Claim being provided to CONSULTANT. Payment to CONSULTANT by any Indemnified Party or the payment or advance of defense costs by any Indemnified Party shall not be a condition precedent to enforcing such Indemnified Party's rights to indemnification hereunder. In the event a final judgment, arbitration, award, order, settlement, or other final resolution expressly determines that the claim did not arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, to any extent, then the DISTRICT will reimburse CONSULTANT for the reasonable costs of defending the Indemnified Parties against such claims. CONSULTANT'S indemnification obligation hereunder shall survive the expiration or earlier termination of this Agreement until such time as action against the Indemnified Parties for such matter indemnified hereunder is fully and finally barred by the applicable statute of limitations. PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 14 of 16 Return to Aaenda Report 24. CONSULTANT PERFORMANCE The CONSULTANT's performance shall be evaluated by the SANITATION DISTRICT. A copy of the evaluation shall be sent to the CONSULTANT for comment. The evaluation, together with the comments, shall be retained by the Department and may be considered in future CONSULTANT selection processes. 25. CLOSEOUT When the SANITATION DISTRICT determines that all Work authorized under the Agreement is fully complete and that the SANITATION DISTRICT requires no further work from CONSULTANT, or the Agreement is otherwise terminated or expires in accordance with the terms of the Agreement, the SANITATION DISTRICT shall give the Consultant written notice that the Agreement will be closed out. CONSULTANT shall submit all outstanding billings, Work submittals, deliverables, reports or similarly related documents as required under the Agreement within thirty(30) days of receipt of notice of Agreement closeout. Upon receipt of CONSULTANT'S submittals, the SANITATION DISTRICT shall commence a closeout audit of the Agreement and will either: L Give the CONSULTANT a final Agreement Acceptance: or ii. Advise the CONSULTANT in writing of any outstanding item or items which must be furnished, completed, or corrected at the CONSULTANT'S cost. CONSULTANT shall be required to provide adequate resources to fully support any administrative Closeout efforts identified in this Agreement. Such support must be provided within the timeframe requested by the SANITATION DISTRICT. Notwithstanding the final Agreement Acceptance the CONSULTANT will not be relieved of its obligations hereunder, nor will the CONSULTANT be relieved of its obligations to complete any portions of the Work, the non-completion of which were not disclosed to the SANITATION DISTRICT(regardless of whether such nondisclosures were fraudulent, negligent, or otherwise); and the CONSULTANT shall remain obligated under all those provisions of the Agreement which expressly or by their nature extend beyond and survive final Agreement Acceptance. Any failure by the SANITATION DISTRICT to reject the work or to reject the CONSULTANT'S request for final Agreement Acceptance as set forth above shall not be deemed to be Acceptance of the Work by the SANITATION DISTRICT for any purpose nor imply Acceptance of, or agreement with, the Consultant's request for final Agreement Acceptance. 26. ENTIRE AGREEMENT This Agreement constitutes the entire understanding and agreement between the Parties and supersedes all previous negotiations between them pertaining to the subject matter thereof. PCSA P2-wt Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 15 of 16 IN WITNESS WHEREOF, this Agreement has been executed in the name of the SANITATION DISTRICT, by its officers thereunto duly authorized, and CONSULTANT as of the day and year first above written. CONSULTANT: CAROLLO ENGINEERS By Date Printed Name &Title ORANGE COUNTY SANITATION DISTRICT By Chair, Board of Directors Date By Maria Ayala Clerk of the Board Date By Marc Dubois Date Contracts, Purchasing and Materials Management Division Manager Attachments: Attachment"A"—Scope of Work Attachment'B"—Not Attached Attachment"C"— Not Attached Attachment"D"—Allowable Direct Costs Attachment"E"—Fee Proposal Attachment"F"— Not Attached Attachment"G"—Cost Matrix& Cost Summary Attachment"H"— Not Attached Attachment"I"—Not Attached NKD:ms EDIAS 003977495 PCSA P2-101 Revised 07/29/13 Plant Water System Rehabilitation at Plant No.2 Page 16 of 16 Return to Mende Report ATTAC H M E NT "A" CONSTRUCTION SUPPORT SERVICES SCOPE OF WORK Plant Water System Rehabilitation at Plant No. 2 Project No. P2-101 SCOPE OF WORK PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 September 2013 PROJECT NO. P2-101 Page 1 of 9 TABLE OF CONTENTS I. SUMMARY..........................................................................................................................................3 II. PROJECT SCHEDULE......................................................................................................................3 III.PROJECT IMPLEMENTATION.....................................................................................................3 PHASE 1—PROJECT DEVELOPMENT—COMPLETED......................................................................4 PHASE 2—PRELIMINARY DESIGN-COMPLETED...........................................................................4 PHASE 3-FINAL DESIGN-COMPLETED.............................................................................................4 PHASE 4—CONSTRUCTION AND INSTALLATION SERVICES...................................................4 Task 4.1 —Project Management..................................................................................................................4 Task 4.2—Initial Project Meetings..............................................................................................................5 Task4.3—Submittals..................................................................................................................................5 Task 4.4—Request for Information(RFIs).................................................................................................5 Task 4.5—Contract Document Modifications,Design Changes,and Change Orders................................6 Task 4.6—Weekly Progress Meetings, Site Visits and As-Built Review Meetings...................................6 PHASE 5—COMMISSIONING SERVICES—NOT USED....................................................................7 PHASE6—CLOSEOUT...........................................................................................................................7 Task 6.1 —Final Inspection and Punch Lists...............................................................................................7 Task6.2—Record Drawings.......................................................................................................................7 Task 6.3—Project Management..................................................................................................................9 IV.STAFF ASSISTANCE........................................................................................................................9 SCOPE OF WORK PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 September 2013 PROJECT NO. P2-101 Page 2 of 9 Return to Mende Report I. SUMMARY Provide construction engineering support services for the construction and installation, and closeout for the Plant Water System Rehabilitation at Plant No.2, Project No. P2-101. Quality Assurance/Quality Control (QA/QC): CONSULTANT shall administer a program of QA/QC procedures for producing quality work and shall effectively manage and control the work. Specific procedures shall include but not be limited to planning, coordination, tracking, checking, reviewing and scheduling the work. CONSULTANT shall subject all work products prepared by the CONSULTANT to the CONSULTANT's in-house QA/QC procedures prior to submittal to OCSD. QA/QC hours and costs shall be incorporated into other tasks within this Scope of Work. II. PROJECT SCHEDULE CONSULTANT shall adhere to the following schedule: Major Milestones Estimated Schedule Provide Construction and Installation Services October 1, 2013 to March 1, 2016 Project Closeout March 1, 2016 to September 30, 2016 TOTAL SCHEDULE TIME Approximately 36 months III. PROJECT IMPLEMENTATION All Orange County Sanitation District (OCSD) projects are divided into six(6) phases. CONSULTANT shall provide engineering support services for Phase 4—Construction and Installation Services and Phase 6—Closeout. Phase 1 —Project Development— Completed Phase 2—Preliminary Design— Completed Phase 3— Final Design— Completed Phase 4—Construction and Installation Services Phase 5—Commissioning Services—not used Phase 6—Closeout SCOPE OF WORK PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 September 2013 PROJECT NO. P2-101 Page 3 of 9 PHASE 1 — PROJECT DEVELOPMENT — COMPLETED PHASE 2 — PRELIMINARY DESIGN — COMPLETED PHASE 3 - FINAL DESIGN — COMPLETED PHASE 4 — CONSTRUCTION AND INSTALLATION SERVICES OCSD will administer and provide field inspection for construction contracts. Construction and installation support services shall be provided by the CONSULTANT as requested by OCSD. CONSULTANT shall refer to the Engineering Design Guidelines, Chapter 01 for detailed requirements. CONSULTANT shall provide the key management personnel as described in their proposal on this project. CONSULTANT shall not reassign the key project personnel without prior approval of OCSD. OCSD may request reassignment of any of the CONSULTANT's or their subconsultant's personnel, based on that individual's performance. For purposes of the proposal, CONSULTANT shall include labor-hours and fees in the proposal for appropriate personnel classifications to perform the following tasks: Task 4.1 — Project Management CONSULTANT shall be responsible for detailed management of the project, including managing its subconsultants, and shall keep OCSD apprised of the status of the project. CONSULTANT shall conduct monthly project management meetings with OCSD's Project Manager via conference call on as needed basis. These meetings shall be attended by OCSD's Project Manager and CONSULTANT's Project Manager at a mutually agreeable time, generally around the second week of the month. The purpose of the meetings shall be to review the CONSULTANT Project Managers progress report and the status of the project scope, budget, and any issues which may affect completion of the project. Meetings should be arranged so that the progress report can be submitted at each meeting. Invoices: CONSULTANT shall prepare and submit monthly invoices to OCSD. The invoices shall document the labor-hours and billing rate for each person that works on the project for each task. Overhead, profit, and any direct costs shall also be shown for each task. As part of the summary section of the invoice, CONSULTANT shall also include the following information: • Budget • Current billing period invoicing • Previous billing period "total invoiced to date" • Budget Amount Remaining • Current billing period "total percent invoice to date" • Current billing period "total percent completed to date" SCOPE OF WORK PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 September 2013 PROJECT NO. P2-101 Page 4 of 9 Return b Agenda Report Progress Reports: The monthly progress report shall be submitted with the project invoice as part of the monthly request for payment. The monthly progress report will include the following: • Work completed in previous billing period • Work anticipated for the upcoming month • Outstanding project issues • Status and issues impacting project scope and budget • Construction contract changes • Percent complete, tabulated on a per task basis • Cost to complete, tabulated on a per task basis • Overall project budget, tabulated on a per task basis • Travel and site visit summary CONSULTANT shall also provide percent budget spent for each of OCSD's WBS cost codes (i.e. by work package and phase). OCSD shall provide a list of cost codes by phase to the CONSULTANT. Task 4.2—Initial Project Meetings Preconstruction Conference: CONSULTANT's attendance is not required. Construction Scheduling Meetings: CONSULTANT's attendance is not required Pre-Submittal Meeting: CONSULTANT shall attend a two-hour pre-submittal meeting with OCSD and Contractor staff to coordinate the submittal effort. Task 4.3—Submittals OCSD will receive and log-in all submittals from the Contractor. OCSD will forward two (2) copies of selected shop drawing and submittals requiring CONSULTANT review. CONSULTANT shall review the shop drawings and submittals for conformance with the requirements of the Contract Documents and return the submittal review comments to OCSD within ten (10) calendar days after receipt of submittal. CONSULTANT shall return comments to OCSD allowing sufficient time for OCSD to incorporate all comments into a combined review comment set that OCSD will return to the Contractor. CONSULTANT shall accommodate occasional expedited reviews for time sensitive submittals. Submittals shall include but not be limited to shop drawings, vendor tests, certifications, and test reports. For the purpose of this proposal, the CONSULTANT shall assume thirty(30) Contractor submittals/shop drawings and twenty (20) resubmittals shall be reviewed by the CONSULTANT. Task 4.4—Request for Information (RFIs) OCSD will log in and forward to CONSULTANT certain RFIs generated by the Contractor or OCSD. CONSULTANT shall return written responses to OCSD as soon as possible or within five (5) calendar days of receipt of RFI, clarifying the requirements of the Contract Documents. CONSULTANT shall generate necessary sketches, figures, and modifications to the drawings for clarifications. CONSULTANT shall occasionally expedite the review of time sensitive RFIs. SCOPE OF WORK PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 September 2013 PROJECT NO. P2-101 Page 5 of 9 If any changes to the Contract Drawings are required, the CONSULTANT shall prepare these drawings and submit them as AutoCAD files to OCSD. The CONSULTANT shall update all AutoCAD drawings and specifications upon OCSD acceptance of any changes resulting from RFIs and change orders. For the purpose of estimating the effort for this task, assume the number of RFIs for a project of this size and scope to be thirty (30)shall be reviewed and responded to by the CONSULTANT. Task 4.5—Contract Document Modifications, Design Changes, and Change Orders If the Contract Documents require modifications, due to changed conditions, OCSD requested changes, omissions or design errors; CONSULTANT shall prepare preliminary change order documents and forward them to OCSD, as needed. OCSD shall review the proposed change and request CONSULTANT to incorporate any changes. OCSD will issue the change order documents in a formal Request for Proposal (RFP)or Field Change Order(FCO)to the Contractor. CONSULTANT shall forward design calculations and other design backup documents as necessary to OCSD. CONSULTANT shall prepare cost estimates for the changes when requested by OCSD. For the purpose of this proposal, the CONSTULANT shall assume fifteen (15) change orders shall be prepared by the CONSULTANT. Any Contract Document that requires changes shall be identified with date of change and reference (RFI number, RFP number, FCO number, etc.) shown on the document. Changes shown on drawings shall be clearly marked and "clouded"for accurate identification of the scope of change by the Contractor and inspection staff. CONSULTANT shall maintain up-to- date Contract Documents. When a change is required on a contract drawing that has previously undergone a change, the updated drawing showing the previous change shall be used as the base document to identify new changes. CONSULTANT shall submit complete change documentation to OCSD for use in RFIs, RFPs, and FCOs. This change documentation shall include plan drawings, schematics, details, schedules, and specifications, as required. CONSULTANT shall also allocate time for required efforts to analyze and provide input on issues that may arise on a weekly basis. Expect to spend approximately 12-15 hours per month on this support effort Task 4.6—Weekly Progress Meetings, Site Visits and As-Built Review Meetings CONSULTANT'S is not required to attend weekly progress meetings. CONSULTANT shall plan on making up to twenty(20)field visits to assist in field problem resolution and design clarification/verification to help resolve construction issues as they arise and as requested by OCSD. CONSULTANT shall report the nature of the field site visits, the problem resolved, and identify staff requesting the site visit in CONSULTANT's monthly project report. OCSD will provide project inspection, except as required in other sections of this scope. SCOPE OF WORK PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 September 2013 PROJECT NO. P2-101 Page 6 of 9 Return b Mende Report When requested by OCSD, CONSULTANT shall inspect the Contractor's as-built drawings at the 75, and 100 percent of project completion to verify that the Contractor has included all relevant information from approved change orders and RFIs. CONSULTANT shall prepare a report for each of these inspections and forward it to OCSD. Task 4.7 -Specialty Services In addition to the "key personnel" indicated above, the CONSULTANT shall retain to its staff or subcontract the services of: 1)A person with at least ten (10)years of experience in the design and installation of CIPP systems. Budget this person's time to be associated with RFIs, FCOs, submittals review, when technically applicable. This task maybe done by OCSD. Budget twenty (20) hours for this task. Resumes shall be submitted to OCSD for approval. PHASE 5 — COMMISSIONING SERVICES — NOT USED PHASE 6 — CLOSEOUT Closeout tasks include completion of punchlist work by the Contractor, final inspection, completion of record drawings and electronic data. CONSULTANT shall submit a final invoice at the completion of the project. Task 6.1 — Final Inspection and Punch Lists CONSULTANT's construction coordinator shall attend the final inspection job walk with the Contractor and OCSD staff. CONSULTANT shall make recommendations on the completion of the work including, but not limited to, completion of punch list items, site cleanup, leakage, and overall system operations. Each engineering discipline will be involved in the final inspection job walk. CONSULTANT shall assist OCSD in developing punch lists of items required to be completed prior to final acceptance of the project by OCSD. Task 6.2— Record Drawings With resource hours accounted for under Site Visit Task 4.5, CONSULTANT shall inspect the field markup set maintained by the Contractor and inspected by OCSD staff at the 75, and 100 percent completion points of construction. As part of the review process, CONSULTANT shall verify that the Contractor's As-Built set correctly reflects the information included in the approved shop drawings, Requests for Information, approved Field Change Orders, Plan Clarifications, Plan Changes and other deviations from the conformed drawings, and that the information in the set is complete. SCOPE OF WORK PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 September 2013 PROJECT NO. P2-101 Page 7 of 9 Based on the findings, CONSULTANT shall prepare a written report on the completeness of the field markup set. CONSULTANT shall attend periodic workshops with the Inspector, Resident Engineer, and Enterprise Information Management to ensure Contractors As-Built set contains all relevant material. Discipline engineers shall meet with the Contractor and inspector to reconcile conflicting information and ensure all contract changes have been incorporated. Under this task 6.2, CONSULTANT shall prepare draft record drawings from the approved Contractor's As-Built set for all drawings in accordance with the requirements in the CAD Manual. The CONSULTANT shall submit the draft Record Drawings to OCSD Project RE. The Draft Record Drawings will be reviewed for content and CAD Compliance by OCSD staff. A comment log will be returned to the CONSULTANT and, if any comments are generated, the CONSULTANT shall revise the record drawings and resubmit to the RE for review of the changes and acceptance of the record drawings. When no additional comments are identified, CONSULTANT shall prepare the final record drawings and submit them along with the Contractors Feld markup set to the Project Manager. All record drawings shall contain a stamp indicating: "Record Drawings These record drawings have been prepared based on information provided by others. The Engineer has not verified the accuracy of this information and shall not be responsible for any errors or omissions which may be herein as a result." The stamp shall optimally be placed in the bottom right hand comer of the border and may be included via x-ref. If importing the stamp via x-ref interferes with content in the bottom right hand corner, the stamp may also be placed in other open space along the bottom of the border. In addition, a note shall be placed over the engineer's seal stating that"This drawing was originally approved for construction by [name of engineer] on [date] and sealed by[name of engineer] a licensed professional engineer in the State of California No. [License number] ". CONSULTANT shall submit an electronic copy of the record drawings to OCSD for review and approval. The acceptance of the record drawings shall be deemed a condition for completion of work. The Contractor generated drawings described in the Design Guidelines and the shop drawings will not be updated by CONSULTANT. The format and quantities for delivery of the submittals shall be as specified in the Design Guidelines section titled "Software and Electronic File Format Requirements' and as defined in Exhibit 5 of the project design Scope of Work. CONSULTANT shall prepare the electronic file of the final sewer lines to reflect the as-built conditions based on the Contractor's and OCSD's "red-line" drawings, and ready to merge to OCSD Facility Model documentation (electronic media submittal is required). SCOPE OF WORK PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 September 2013 PROJECT NO. P2-101 Page 8 of 9 Return to Mende Report Task 6.3—Project Management CONSULTANT shall also include project management support man-hours related to closeout activities per requirements stated in Phase 4, Project Management Task. IV. STAFF ASSISTANCE OCSD staff member or designee assigned to work with CONSULTANT on the construction phase of this project is Victoria Pike at(714) 593-7189, e-mail to: vpilko@ocsd.com. VP:dm EDMS: 00397777415.1. SCOPE OF WORK PLANT WATER SYSTEM REHABILITATION AT PLANT NO. 2 September 2013 PROJECT NO. P2-101 Page 9 of 9 ATTACHMENT "D" ALLOWABLE DIRECT COSTS Return to Aaeode Report ATTACHMENT "D" ALLOWABLE DIRECT COSTS LONG DISTANCE TOLL All long distance toll charges incurred will be reimbursed as direct costs. Toll CHARGES charges to area codes serving Los Angeles, Orange, Riverside, and San Bernardino Counties will not be reimbursed. FACSIMILE TRANSMISSION Facsimile transmission charges will not be reimbursed,except the long distance toll CHARGES charges,as described above. In-house reproduction of records and documents will not be reimbursed by the REPRODUCTION AND OCSD. Use of an outside copy service for specialty items and volume reproduction PRINTING CHARGES will be reimbursed at direct cost. Use of a professional printing service will be reimbursed at actual cost. OVERNIGHT MAIL DELIVER Use of Federal Express, Express Mail, UPS, or such similarly-related service, as AND MESSENGER SERVICE well as a messenger service,will be reimbursed at direct cost only when necessary. POSTAGE Incidental postage will not be reimbursed by OCSD. FILM PROCESSING Film processing will be reimbursed at actual cost. COMPUTER USAGE Computer use by Consultant and/or support staff will not be reimbursed. MILEAGE AND TOLL FEES Per mile reimbursement will be at the current rate set by the Internal Revenue Service. Toll fees will be reimbursed. TEMPORARY STAFF The use of outside temporary support staff will be reimbursed at direct cost with prior approval of OCSD. OFFICE SUPPLIES The purchase of office supplies by Consultant will not be reimbursed. The cost of lodging including room and all applicable taxes will be reimbursed. LODGING Lodging incidentals including movies, Internet, laundry service,valet service, room service,etc,will not be reimbursed. GROUND TRANSPORTATION The cost of ground transportation for taxi, shuttle,train,etc.,will be reimbursed. Limousine service will not be reimbursed. Airline ticket cost including one bag will be reimbursed only if pre-approved by AIRFARE OCSD. First class tickets will not be reimbursed unless pre-approved by OCSD. Membership dues for corporate card frequent user programs or the cost of airline club membership will not be reimbursed. AUTO RENTAL Rental car cost and rental car gas will be reimbursed. PARKING FEE Parking fees for hotel, airport, rail station,etc will be reimbursed. Meals including tip for traveler will be reimbursed. Meals for non-traveler included on traveler receipt will not be reimbursed. Cost of alcoholic beverages will not be TRAVEL MEALS reimbursed. Multiple travelers must get individual receipts. All receipts must be itemized; credit card receipts without an itemized receipt will not be reimbursed. The daily total reimbursement for meals shall not exceed the OCSD per diem rate which is available upon request. Cost of miscellaneous personal items such as, but not limited to newspapers, toiletries, shoeshine,tobacco products, pay TV, movies,valet services, health club MISCELLANEOUS charges, in-room mini bars, clothing and footwear will not be reimbursed. ATM/bank fees incurred by professional while traveling will not be reimbursed. Costs for project team lunches will not be reimbursed unless pre-approved by OCSD. RENTAL EQUIPMENT Consultant will be reimbursed at actual cost, no mark-up. PCSA PROJECT NO. P2-101 Revision 081613 Plant Water System Rehabilitation at Plant No.2 ATTACHMENT "E" FEE PROPOSAL Return to Mende Report ATTACHMENT "E' FEE PROPOSAL FORM (Submit with Proposal) SERVICES DURING CONSTRUCTION INCLUDING: Plant Water System Rehabilitation at Plant No. 2 Project No. P2-101 Consultant(Prime'a Name): Carollo Emil M Raw Labor $58,464 Fringe Rate 72.08% $42,141 %X Raw Labor Burdened labor $100,605 (Raw Labor+ Fringe Rate Overhead 103% $103.623 %X Burden Labor Subtotal (Burden $204,228 Labor+Overhead Profit 9.0% (overhead + $18,380 burdened labor Total Direct Costs, $2,500 not to exceed TOTAL—"Consultant" Consulting Services, not to exceed. $225,108 GRAND TOTAL for Design Services,not to exceed: $225.108 V\CI.WR X501PN01P0-1011.PrypO.M..l-ME-Fee P o .l F. Real]d. ATTACHMENT "G" COST MATRIX & SUMMARY Return to Aoenda Renorl PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 PROJECT NO.P2-101 Tees dem IanwlUsess . pYM teed nW Per PnI MBr IeW Fryr EM1llike, g6nlNgar stake Use Underal Reb kaw..is a lasefllal.1 3iE6 f110 Me {Mk sees uor. EEpnuv PHASE 4-CONSTRUCTION AND INSTALLATION SERVICES Task 41,PrpjM Martmemem Task 41 Tom 50 0 @ p 1@ mai Coll- S 13BEP E - E 8.3K E Task 4.2-Inlml Prolecl staki Task 42T lal B a II Total Cosl= E Iim E E I,41a E - i E ?1T S - B Tax aa.SnkmIWN Task 4a Tabl I a ad +W p p 1- E Z. $ 7 m t 2e.Bn s s - $ Y.EW s IkIll Task a.E-Regast lormlamnnpn IRFleI Task 4.4ll 21 ]< p11 p,IaltIaW f nsi t 1 5 I],Ra E 0 E - S 2130 3 - 5 4t 353 Tess 4 6-CContracDocumentaclDocumentW I M flceYne a .Oalg n CIIBnpes.am CM Nark pe Oen Teak 45 Used 25 763p1 M 25 5pg UdIoN- f B.B15 3 1BABB 3 5]91] t p,]W E ales% f ad. E - 5 Task 4S.WOMy Plrynse Meetings,Site Visits,and ASAUIIt RaNW MMpnBs Task 46 Uld S le p as WI Cca $ 2.4ep IIIaled E 122Ues i - 3 S 'All, 3 Take aA-Speclaly Services Taal4.7.1 d 20 0 O u= S i NA 3 0 3 - E S a.Mb 3 T0181 HOum for Phase 109 161 SS] 10 a tide TONI Cost for Phase v E E0.1Y S ..14]1$ 11e.070 E l..n3 S 2,655 f sa"An E S 1$ 200 B2E ANchmentG PLANT WATER SYSTEM REHABILITATION AT PLANT NO.2 PROJECT NO.P2d01 Taskllem la6ar Noun anp Cql Treat de""COp OW Par "Net 4ap En,, 31an Eqr Tash aM1NNOW IYwNaua Oiaaaa,4e m. Take,B.r.Fhft( nRala=BmH1m),B11 $126 fI's the MA 6N qLy iN Ergnsen PHASE 6-CLOSE OUT Task 6.1-Final In.wr on and Punch Use, Tank 6.1 Total a 0 12 0 TWICon= f 2,213 6 s 2121 6 - 6 - F a,322 E - S - 3 7337 Task 0.2-Reoold Gncln6s Tank 6.2 Tolal a • a b I.,C..= $ 1.1M 6 624 6 1p6 a 9No 6 - 2 12,55a 6 � $ 25W $ 15059 Task 6.3-Project aft"gessanl Task 53 Tool 1 0 12 0 22 Ton Coeo- s 2IDa f . S 2,124 S a a 4. b - 3 � 5 4950 Total Hours for Phase 6 22 a 32 b 0 122 Total Cost for Phase 6= a 6,066 s a.a s 6,666 f 9,063 S a 21,266 S a 2.500 f 20,286 Total Hours for Phase a and Phase 6 131 166 Ha ta0 26 1160 Grand Total Coal for Phase 6 and Phase 6= a R,3A 5 .,is, a I.J. 5 16,6211 a Use a 22260a $ � s 2.500 a 225.10a Item No. 9 MINUTES OF THE REGULAR MEETING OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, September 11, 2013, at 5:30 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was held on September 11, 2013, at 5:30 p.m., in the Sanitation Districts Administration Building. Following the Pledge of Allegiance, a quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Brad Reese, Chair Jim Herberg, General Manager John Withers, Vice-Chair Bob Ghirelli, Assistant General Manager David Benavides Lorenzo Tyner, Director of Finance Steven Choi & Administrative Services Tyler Diep Jeff Reed, Director of Human Resources Jim Ferryman Nick Arhontes, Dir. Of Facilities Support Peter Kim Services Prakash Narain Ed Torres, Director of Operations & Janet Nguyen Maintenance Joe Shaw Kelly Lore, Administrative Assistant Teresa Smith Maria Ayala, Clerk of the Board Troy Edgar, Board Chair Rich Castillon, IT Systems & Operations John Anderson, Board Vice Chair Manager Wesley Bauer COMMITTEE MEMBERS ABSENT: Jennifer Cabral Jim Colston None Ted Gerber Roya Sohanaki Rob Thompson OTHERS PRESENT: Brad Hogin, General Counsel Stephanie King, Consultant, PIMCO Todd Stanley, Consultant, PIMCO PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Committee Chair Reese did not give a report. 09/11/13 Administration Committee Minutes Page 1 of 4 REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: Lorenzo Tyner introduced Wes Bauer, Safety and Health Supervisor who briefly explained and demonstrated the two types of Atmospheric Monitors. Lorenzo Tyner introduced PIMCO representatives, Stephanie King and Todd Stanley, who provided a "Strategy Review" handout to the Committee and reported on the status of the Orange County Sanitation District Investment Portfolio. The Committee expressed concerns over the market performance of the portfolio and requested further clarification of the Investment Policy and also requested a 10-year trend comparison to other agencies be completed and presented to the Committee at a future meeting. CONSENT: 1. MOVED, SECONDED, AND DULY CARRIED: Approve Minutes of the July 10, 2013 Administration Committee Meeting. 2. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: Receive and file report of reimbursements to Board Members and Staff per Government Code 53065.5 for the period July 1, 2012 through June 30, 2013. Director Nguyen abstained. 3. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: A. Approve the Electronic Recording Memorandum of Understanding (MOU) with the County of Orange, Clerk-Recorder's office; and B. Authorize the Clerk of the Board, or her designee, to transmit/record any and all required Orange County Sanitation District real property documents in an electronic format. Director Nguyen abstained. NON-CONSENT: 4. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: A. Adopt Resolution No. OCSD 13-XX, 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 09/11A3 Administration Committee Minutes Page 2 of 4 Notes, Series 2013A, 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; and B. That the Orange County Sanitation District Financing Corporation approve the documents supporting and authorizing the Notes in an aggregate amount not to exceed $135,000,000. Lorenzo Tyner responded to questions from the Committee regarding the refunding of the notes and its fixed-rate debt issuance. 5. MOVED, SECONDED, AND DULY CARRIED: Recommend to the Board of Directors to: A. Approve a Professional Services Agreement with enfoTech & Consulting, Inc., Specification CS-2012-5256D, for Implementation of a Commercial- off-the-shelf Pretreatment Information Management System, for an amount not to exceed $780,393; and B. Approve first year technical support and maintenance for the amount of $65,266; and C. Approve a contingency of$84,566 (10%). Lorenzo Tyner, Rich Castillion and Ted Gerber responded to various questions from the Committee regarding: proposal evaluations, software functionality and costs. INFORMATION ONLY: None OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. 09/11/13 Administration Committee Minutes Page 3 of 4 ADJOURNMENT: Committee Chair Reese declared the meeting adjourned at 6:30 p.m. Submitted by: Kelly A. Lore Administrative Assistant 09/11/13 Administration Committee Minutes Page 4 of 4 ADMINISTRATION COMMITTEE Neebng Date TOBA.Of DIr. 09/11,13 09/25/13 AGENDA REPORT Item Number Item Numbe 2 10 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: REIMBURSEMENTS TO BOARD MEMBERS AND STAFF GENERAL MANAGER'S RECOMMENDATION Receive and file report of reimbursements to Board Members and Staff per Govemment Code 53065.5 for the period July 1, 2012 through June 30, 2013. SUMMARY Government Code Section 53065.5 requires all Special Districts to disclose any reimbursements paid by the Sanitation District within the immediately preceding fiscal year of at least one hundred dollars ($100) or more for each individual charge for services or product received. The individual charge includes, but is not limited to, tuition reimbursement, certificate or license reimbursement, or meals, lodging, and transportation, or registration fee reimbursed to any employee or member of the governing body of the Sanitation District. The disclosure requirement shall be fulfilled by including the reimbursement information in a document published or printed at least annually by a date determined by that district and shall be made available for public inspection. Attached is the report of these reimbursements for the fiscal year ended June 30, 2013. PRIOR COMMITTEE/BOARD ACTIONS N/A ATTACHMENTS The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.com) with the complete agenda package: Report of reimbursements per Government Code 53065.5 for the period July 1, 2012 through June 30, 2013. JDH:LT:MW/jmf Page 1 of 1 Return to Anemia Report Orange County Sanitation District Government Code 53065-5,Public Disclosure Reports-Reimbursements by OCSD July 1,2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Adams,Matt Sr.Plant Operator 300.00 CERT REIMBURSEMENT Alexander, Jennifer L. Sr. Plant Operator 190.00 CERT REIMBURSEMENT Alter,Marian M. Principal Accountant 107.24 2012 WARN MTG San Diego,CA 10-9-12 Anderson,John S. Board of Directors 655.98 CASA CONFERENCE Indian Wells,CA 1-16 to 1-18-13 Anderson,John S. Board of Directors 1,370.42 CASA CONFERENCE Monterey,CA 8-11 to 8-12-12 Andrade, David Lead Mechanic 170.00 CERT REIMBURSEMENT Archie, Stephanie L. Admin.Asst. 177.79 EMPLOYEE LUNCH Arhontes,Nicholas J. Dir of Facilities Support Svcs 580.93 CWEA TRAINING Palm Springs, CA 4-17 to 4-19-13 Arhontes,Nicholas J. Dir of Facilities Support Svcs 213.20 CASSE MEETING San Luis Obispo,CA 2.27 to.2.28.13 Arhontes,Nicholas J. Dir of Facilities Support Svcs 115.00 CERT REIMBURSEMENT Ariston, Emilio Lead Mechanic 532.48 TUITION REIMBURSEMENT Ayala,Maria E. Clerk of the Board 419.88 TRAINING FOR CLERKS Riverside, CA 9-11 to 9-14-12 Baker,Charles Eddie Sr. Plant Operator 250.00 CERT REIMBURSEMENT Baker,Charles Eddie Sr. Plant Operator 190.00 CERT REIMBURSEMENT Basrai,Shabbir S. Sr. Engineer 534.48 WEF MTG Boston,MA 6-8 to 6-11-13 Basrai,Shabbir S. Senior Engineer 794.00 TUITION REIMBURSEMENT Bauer 11,Wesley G. Safety B Health Supry 293.10 PUBLIC SPK SEMINAR Los Angeles, CA 5-14 to 5-15-13 Bauer II,Wesley G. Safety Bt Health Supry 325.85 CAL-VPP SYMPOSIUM San Francisco, CA 2-19 to 2-20-13 Bauer II,Wesley G. Safety it Health Supry 120.00 CERT REIMBURSEMENT Bauer 11,Wesley G. Safety B:Health Supry 150.00 CERT REIMBURSEMENT Bewley, Benjamin W. Electrical Tech 1 175.00 CERT REIMBURSEMENT Bewley, Benjamin W. Electrical Tech 1 7,078.02 TUITION REIMBURSEMENT Bingman, Brian Sr. Engineer 200.00 CERT REIMBURSEMENT Bingman, Brian Sr. Engineer 115.00 CERT REIMBURSEMENT Blakeley, Gregory R. Buyer 156.30 CAPPO SEMINAR San Diego,CA 4.18.13 Boess,Michael J. Sr. Plant Operator 190.00 CERT REIMBURSEMENT Bolster, Michael Lead Mechanic 170.00 CERT REIMBURSEMENT Boyd,Mark S. Plant Operator 130.00 CERT REIMBURSEMENT Bradley Jr., Jon 0. Lead Plant Operator 6,350.00 TUITION REIMBURSEMENT Brooks, Rebecca A. Engineer 170.00 CERT REIMBURSEMENT 1 of 12 PrWareL By: Liu P.oq Orange County Sanitation District Government Code 53065-5, Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Brown, Ian M. Maintenance Worker 132.00 CERT REIMBURSEMENT Brown, Marc A. Principal Staff Analyst 689.54 NAGDCA MEETING San Diego, CA 10.1 to 10.3-12 Buonacorsi, Curtis Sr. Plant Operator 582.13 TRI STATE SEMINAR Primm, NV 9-24 to 9-27-12 Buonacorsi, Curtis Sr. Plant Operator 700.00 GRADE V CERT TRAINING Vacaville, CA 3-11 to 3-13-13 Burror,James L. Engineering Supry 185.00 CERT REIMBURSEMENT Burror, James L. Engineering Sup" 320.00 MEMBERSHIP RENEWAL Burror,James L. Engineering Sup" 280.00 MEMBERSHIP RENEWAL Caren, Darrin L. Environmental Technician 140.00 MEMBERSHIP RENEWAL Carrillo, Dindo A. Sr. Environmental Spclst 527.94 CWEA CONFERENCE Palm Springs, CA 4-17 to 4-19-13 Carrillo, Dindo A. Sr. Environmental Spclst 140.00 MEMBERSHIP RENEWAL Carrillo, Dindo A. Sr. Environmental Spclst 540.00 MEMBERSHIP RENEWAL Cassidy,William D. Engineering Sup" 330.24 CWEA CONFERENCE Palm Springs, CA 4-17 to 4-19-13 Castillon, Richard A. IT Syst Et Operations Mgr 355.81 WATER CIO FORUM Colorado Springs, CO 4-29 to 5-2-13 Castillon, Richard A. IT Syst&Operations Mgr 597.75 MS PUB CIO MTG Portland,OR 3.25 to 3-28-13 Castillon, Richard A. IT Syst Et Operations Mgr 257.62 MISAC San Diego, CA 10.14 to 10.16.12 Cervellone, Chris A. Engineering Sup" 270.95 CWEA CONFERENCE Palm Springs, CA 4-18 to 4-19-13 Chang,Jie K. Instrumentation Tech II 180.00 CERT REIMBURSEMENT Chavez, Frank Operations Supry 190.00 CERT REIMBURSEMENT Chong,Tatiana Staff Analyst 6,975.07 TUITION REIMBURSEMENT Christensen, Kimberly C. Sr. Scientist 1,478.15 PITTCON Philadelphia, PA 3-16 to 3-21-13 Cleveland, Donald R. Lead Mechanic 305.80 TUITION REIMBURSEMENT Coghill,Adam D. Engineer 172.50 CERT REIMBURSEMENT Collins, Rodney L. Sr. Safety Et Health Rep 388.88 I%VPPPA CONFERENCE Tucson,AZ 4.2 to 4-4.13 Collins, Rodney L. Sr. Safety 8 Health Rep 270.00 CERT REIMBURSEMENT Collins, Rodney L. Sr. Safety B,Health Rep 175.00 CERT REIMBURSEMENT Collins, Rodney L. Sr. Safety Ft Health Rep 175.00 CERT REIMBURSEMENT Colston,James E. Environ Compl-Reg Affairs Mgr 900.83 BIOSOLIDS CONFERENCE Nashville,TN 5.4 to 5-8.13 Colston,James E. Environ Compl-Reg Affairs Mgr 799.22 NACWA CONFERENCE Seattle,WA 11-13 to 11-16-12 Conklin,Gary P. Senior Engineer 429.00 TUITION REIMBURSEMENT Connor,Matthew J. Plant Operator 130.00 CERT REIMBURSEMENT 2 of 12 Prepared By: Lisa Rogers Return to Anemia Report Orange County Sanitation District Government Code 53065.5,Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Connor,Matthew J. Plant Operator 195.00 CERT REIMBURSEMENT Connor,Matthew J. Plant Operator 300.00 CERT REIMBURSEMENT Connor,Matthew J. Plant Operator 113.55 TUITION REIMBURSEMENT Coronet, Robbie A. Sr. Plant Operator 170.00 CERT REIMBURSEMENT Coronet, Robbie A. Sr. Plant Operator 5,250.00 TUITION REIMBURSEMENT Corral,Cesar Sr.Mechanic 341.50 TRI STATE SEMINAR Pnmm, NV 9-24 to 9-27-12 Corral,Cesar Sr.Mechanic 190.00 CERT REIMBURSEMENT Coss, Ronald J. Environ Lab&OM Mgr 1,303.82 WEF CONFERENCE Glendale,AZ 3-9 to 3-13-13 Coss, Ronald J. Environ Lab&OM Mgr 205.00 CERT REIMBURSEMENT Coss, Ronald J. Environ Lab&OM Mgr 185.00 CERT REIMBURSEMENT Coss, Ronald J. Environ Lab It OM Mgr 120.00 CERT REIMBURSEMENT Coss, Ronald J. Environ Lab It OM Mgr 238.76 EMPLOYEE LUNCH Coss, Ronald J. Environ Lab It OM Mgr 192.19 EMPLOYEE LUNCH Coss, Ronald J. Environ Lab&OM Mgr 404.00 MEMBERSHIP RENEWAL Coss, Ronald J. Enviran lab&OM Mgr 238.00 MEMBERSHIP RENEWAL Coss, Ronald J. EnAron Lab&OM Mgr 6,223.73 TUITION REIMBURSEMENT Covarrubias, Daisy G. Sr. Staff Analyst 661.85 WRITING CEQA DOCS Sacramento,CA 4-23 to 4-27-13 Crafton,Ann Principal Financial Analyst 100.00 CERT REIMBURSEMENT Crandall, Larry R. Board of Directors 1,066.30 CASA CONFERENCE Monterey,CA 8.8 to 8.11.12 Crandall, Larry R. Board of Directors 303.85 CASA CONFERENCE Monterey,CA 8.8 to 8.11.12 Crandall, Larry R. Board of Directors 906.20 WEFTEC New Orleans,LA 9-29 to 10-3-12 Cuellar, Raul Engineer 468.20 NO DIG CONFERENCE Sacramento,CA 3-4 to 3-6-13 Dake,Yvonne Asst. Engineer 232.04 NASST CONFERENCE Sacramento,CA 3-4 to 3-6-13 DalgoR,Jacob Asst. Engineer 362.93 CWEA CONFERENCE Palm Springs,CA 4-16 to 4-19-13 Dalgoff,Jacob Asst. Engineer 825.00 CERT REIMBURSEMENT DeAnda,Bernardo Maintenance Supry 185.00 CERT REIMBURSEMENT DeVries, Patrick Thys Human Resources Analyst 250.00 CERT REIMBURSEMENT DeVries, Patrick Thys Human Resources Analyst 3,555.10 TUITION REIMBURSEMENT Diaz,Arturo Principal laboratory Analyst 132.00 CERT REIMBURSEMENT Dillon,Carta D. Engineering Sup" 694.36 IWA CONFERENCE San Francisco,CA 3-4.13 3 of 12 Prepared By: Um Rogers Orange County Sanitation District Government Code 53065-5, Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Dorman, Michael T. Engineering Supry 187.50 CERT REIMBURSEMENT Dorman, Michael T. Engineering Supry 115.57 EMPLOYEE LUNCH Dubois, Marcus Contract&Purchasing Mgr 680.76 CAPPO CONFERENCE Napa, CA 1-15 to 1-18-13 Dumlao,Allan P. Plant Operator 230.00 CERT REIMBURSEMENT Dysart, Doug M. Plant Operator 230.00 CERT REIMBURSEMENT Edgar, Troy D. Board of Directors 588.89 CASA CONFERENCE Indian Wells, CA 1.16 to 1-18-13 Escobar, Santiago A. Associate Engineer 1,222.86 CSI PREDICTION TRAINING Knoxville,TN 3.17 to 2-22-13 Escobar, Santiago A. Associate Engineer 100.00 MEMBERSHIP RENEWAL Esquer,Mark A. Engineering Mgr 553.52 WEE SEMINAR Sacramento, CA 6-9 to 6-12-13 Esquer,Mark A. Engineering Mgr 115.00 CERT REIMBURSEMENT Evans,Theresa Executive Assistant 6,890.D0 TUITION REIMBURSEMENT Falkenstein, John B. Engineer 1,238.36 WORLD OF CONCRETE CONE. Las Vegas, NV 2-4 to 2-8-13 Farmer, Michele Pr Environmental Specialist 2,040.00 TUITION REIMBURSEMENT Ferraro, Benjamin J. Laboratory Assistant 4,945.50 TUITION REIMBURSEMENT Fisher, Dean M. Engineering Mgr 150.00 CERT REIMBURSEMENT Fisher, Dean M. Engineering Mgr 200.00 CERT REIMBURSEMENT Fisher, Dean M. Engineering Mgr 115.00 CERT REIMBURSEMENT Fladrich,John C. Plant Operator 170.00 CERT REIMBURSEMENT Flores,John M. Sr. Construction Inspector 140.00 MEMBERSHIP RENEWAL Flores,John M. Sr. Construction Inspector 613.40 TUITION REIMBURSEMENT Forman, Chuck M. Facilities Mgr 146.59 FLEET MGMT SEMINAR Los Angeles, CA 1-23 to 1-25-13 Forman, Chuck M. Facilities Mgr 262.94 FASTER USER CONFERENCE Norfolk,VA 10.21 to 10.24.12 Forman, Chuck M. Facilities Mgr 1,647.17 FLEET EXPO San Antonio,TX 6.9 to 6-13-13 Francis,Victoria L. Sr. Engineer 115.00 CERT REIMBURSEMENT Gabriel, Lawrence C Plant Operator 170.00 CERT REIMBURSEMENT Gadzinski, Joscelynn M. Plant Operator 250.00 CERT REIMBURSEMENT Gadzinski, Joscelynn M. Plant Operator 5,886.02 TUITION REIMBURSEMENT Gamber, Robert M. Sr. Environ. Specialist 212.52 SETAC NORTH AMERI Long Beach, CA 11-12 to 11-15-12 Garchow, Matthew N. Sr. Info Tech Analyst 818.28 LABWARE ELN TRAINING Wilmington, DE 9-25 to 9-28-12 Garcia,Alfredo Office Asst 173.88 HALLOWEEN EVENT 4 of 12 Prepared By: Lisa Rogers Return to Aaenda Report Orange County Sanitation District Government Code 53065.5,Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30,2013 Employee Name Title Amount Description Site Location Duration Gerber, Harold T. Engineer 364.60 TRI STATE SEMINAR Primm, NV 9-25 to 9-27.12 GhireUi, Robert P. Assistant General Manager 1,322.51 CASA CONFERENCE Monterey,CA 8-8 to 8-11-12 GhireUi, Robert P. Assistant General Manager 185.00 CERT REIMBURSEMENT Ginest, Lance Maintenance Supry 577.66 MAINT REL MGRS Houston,TX 8-20 to 8-23-12 Ginest,Lance Maintenance Supry 647.86 MINT REL MGRS Houston,TX 11-12 to 11-15-12 Ginest, lance Maintenance Supry 710.38 MINT RELIAB MGRS Houston,TX 10-1 to 10-4-12 Ginest, Lance Maintenance Supry 581.53 MNTNCE B RELIABILITY TRNG Houston,TX 7-16 to 7-19-12 Gold,Michael I. Public Affairs Mgr 460.88 CASA CONFERENCE Indian Wells,CA 1-16 to 1-18-13 Gold,Michael I. Public Affairs Mgr 223.04 CASA CONFERENCE Monterey,CA 8-8 to 8-11-12 Gold,Michael I. Public Affairs Mgr 768.89 3CMA TRAINING Portland,OR 9.4 to 9.7-12 Gold,Michael I. Public Affairs Mgr 689.55 CSDA LEGISLATIVE DAYS Sacramento,CA 5.13 to 5.15.13 Gold,Michael I. Public Affairs Mgr 1,265.00 CASA CONFERENCE Washington DC 2-24 to 2-27-13 Gold,Michael I. Public Affairs Mgr 310.11 OPEN HOUSE BOOTHS Gomez, Ruben Sr. Construction Insp 1,594.16 OSHA TRAINING San Diego,CA 6-24 to 6-28-12 Gomez, Ruben Sr. Construction Imp 735.63 OSHA TRAINING San Diego,CA 3-31 to 4-4-13 Goodloe,Verna L. Records Management Spec. 214.51 CERT. REC MGMT PREP COURSE Pat.Springs,CA 1-11 to 1-12-13 Gray, Janet L. HR Analyst 231.54 WRIPAC TRNG Sacramento,CA 2-5 to 2-6-13 Green,Scott A. Plant Operator 195.00 CERT REIMBURSEMENT Green,Scott A. Plant Operator 170.00 CERT REIMBURSEMENT Green,Scott A. Plant Operator 113.55 KEN KERRI WASTEWATER BOOK Green,Scott A. Plant Operator 113.55 TUITION REIMBURSEMENT Hall, Brent M. Mechanic 155.00 CERT REIMBURSEMENT Hall, Brent M. Mechanic 132.00 MEMBERSHIP RENEWAL Hall, Brent M. Mechanic 178.00 TUITION REIMBURSEMENT Halverson, David D. Engineering Mgr 115.00 CERT REIMBURSEMENT Halverson, David D. Engineering Mgr 149.55 EMPLOYEE LUNCH Halverson, David P. Sr. Engineer 116.00 CERT REIMBURSEMENT Haney, Lisa Sr Environ Specialist 530.42 CASQA CONFERENCE San Diego,CA 11-5 to 11-7-12 Haworth,Michael T. Lead Plant Operator 340.00 CERT REIMBURSEMENT Hawthorne, Donald A. Reliability Maint Tech 1,030.46 AMS COURSE Knoxville,TN 5-19 to 5-24.13 5 of 12 Prepared By: Lisa Regers Orange County Sanitation District Government Code 53065-5, Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Hawthorne, Donald A. Reliability Maint Tech 609.84 THERMOGRAPHIC APP COURSE San Diego, CA 2-4 to 2-8-13 Haynes,Tod E. Engineering Mgr 2D0.00 CERT REIMBURSEMENT Heinz, David R. Operations Mgr 116.53 CASA MEETING Sacramento, CA 8-28-12 Heinz, David R. Operations Mgr 340.00 CERT REIMBURSEMENT Hellebrand, Ingrid G. Sr. Public Affairs Spec. 378.40 GRANT WRITING Santa Barbara, CA 4-22 to 4-24-13 Hellebrand, Ingrid G. Sr. Public Affairs Spec. 1D0.60 MICROPHONE TOUR BUS Herberg,James D. General Manager 654.55 CASA CONFERENCE Indian Wells, CA 1.16 to 1-18-13 Herberg, James D. General Manager 465.24 CSDA GENERAL MGR SUMMIT Napa, CA 7-15 to 7-17-12 Herberg, James D. General Manager 185.00 CERT REIMBURSEMENT Herberg,James D. General Manager 220.00 MEMBERSHIP RENEWAL Hernandez, Kenneth L. Risk Mgr 1,113.87 PARMA CONFERENCE Rancho Mirage, CA 2.2 to 2-6.13 Herrera, Mike J. Principal Info Tech Analyst 490.D0 TUITION REIMBURSEMENT Herrera, Yolanda Data Mgmt Tech 1 3,750.00 TUITION REIMBURSEMENT Herrigstad,Carl A. Lead Instrumentation Tech 305.83 EMPLOYEE LUNCH Herrigstad,Carl A. Lead Instrumentation Tech 630.38 SAFETY LUNCH Hetherington,Michelle R. Sr. Engineer 1,474.64 WEFTEC New Orleans, LA 9-28 to 10-3-12 Hopkins,Tim H. Sr. Mechanic 184.51 EMPLOYEE LUNCH Hsiao, Lina Accounting Supry 107.30 MILEAGE-SUPERVISOR TRNG Oceanside, CA 3.7 and 4-24-13 Hsiao, Line Accounting Supry 1,540.54 GFOA CONFERENCE San Francisco,CA 5.31 to 6.5-13 Hsiao, Line Accounting Supry 120.00 CERT REIMBURSEMENT Huls,Michael R Plant Operator 170.00 CERT REIMBURSEMENT Jimenez,Margil Assistant Engineer 134.64 EMPLOYEE LUNCH Jones, Larry J. Data Mgmt Tech 11 317.17 TUITION REIMBURSEMENT Kanetis, Nicolas Director of Engineering 140.92 SAFETY BOOTS Kants, Douglas Sr. Engineer 140.00 CERT REIMBURSEMENT Kanis, Douglas Sr. Engineer 2,877.80 TUITION REIMBURSEMENT Kavokhs,John Chief Plant Operator 340.00 CERT REIMBURSEMENT Kenerson, Roger A. Sr. Plant Operator 170.00 CERT REIMBURSEMENT Key,Jeffrey L. Maintenance Specialist 661.11 MAXIMO TRAINING Portland, OR 4-29 to 5-2-13 Khublall, Hardat S. CIP Project Mgr 200.00 CERT REIMBURSEMENT 6 of 12 Prepared By: Lisa Rogers Return to Aaerda Report Orange County Sanitation District Government Code 53065.5,Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Khubtall, Harder S. CIP Project Mgr 164.00 MEMBERSHIP RENEWAL Killion,Matthew J. Information Tech Analyst II 394.81 TUITION REIMBURSEMENT Kim,An H. Engineer 115.00 CERT REIMBURSEMENT Kim,Jin H. Engineer 150.00 CERT REIMBURSEMENT Kim,Jin H. Engineer 115.00 CERT REIMBURSEMENT Kim,Jin H. Engineer 185.00 MEMBERSHIP RENEWAL Kleinbergs,Mila S. Engineer 115.00 CERT REIMBURSEMENT Klembergs,Mila S. Engineer 364.60 TRI STATE SEMINAR Primm,NV 9-25 to 9-27-12 Koester, Pamela A. CIP Project Mgr 129.00 MEMBERSHIP RENEWAL Koester, Pamela A. CIP Project Mgr 228.00 MEMBERSHIP RENEWAL Kogan,Vladimir A. Sr. Scientist 794.15 AWMA CONFERENCE Chicago, IL 6.25 to 6.28.13 Kogan,Vladimir A. Sr. Scientist 193.00 TUITION REIMBURSEMENT Kogan,Vladimir A. Sr. Scientist 195.00 MEMBERSHIP RENEWAL Kovaq Liba Staff Analyst 169.00 NOTARY TRAI NING Anaheim, CA 3-21-12 Kovaq Lilia Staff Analyst 287.50 NOTARY SUPPLIES Krie,Terry W. Sr. Construction Insp Supv 958.20 MACE MEETING Orlando, FL 3-16 to 3-21-13 Kne,Terry W. Sr. Construction Insp Supv 140.00 MEMBERSHIP RENEWAL Kyi,May T. Assistant Engineer 852.53 IWA/GRATRAINING San Francisco,CA Kyi,May T. Assistant Engineer 115.00 CERT REIMBURSMENT Lapus, Ludwig Contracts Administrator 925.00 TUITION REIMBURSEMENT Lee,Tony S. Chief Plant Operator 122.33 EMPLOYEE LUNCH Lester, Edwin M. Sr. Plant Operator 170.00 CERT REIMBURSEMENT Liang,Jian Senior Info Tech Analyst 4,125.27 TUITION REIMBURSEMENT Lin,John H. Sr. Engineer 115.00 CERT REIMBURSEMENT Lindel, Deborah L. Scientist 100.00 BOOKS Lopez, John M. Plant Operator 300.00 CERT REIMBURSEMENT Losurdo, Linda Admin.Asst. 847.88 CWEA CONFERENCE Palm Springs,CA 4-16 to 4-20-13 Losurdo, Linda Admin.Asst. 101.16 MANAGER MEETING LUNCHES Losurdo, Linda Admin.Asst. 100.77 SUPPLIES Malpede,Jaime M. Pr Environmental Spec. 169.78 EMPLOYEE LUNCH 7 of 12 Prepared By: Lisa Rogers Orange County Sanitation District Government Code 53065-5, Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Malpede, Jaime M. Pr Environmental Spec. 144.26 EMPLOYEE LUNCH Mansell II,Selwyn D. Sr. Plant Operator 300.00 CERT REIMBURSEMENT Mansell,Selwyn D. Operations Sup" 190.00 CERT REIMBURSEMENT Manzella, Joseph Senior Laboratory Analyst 2,553.58 TUITION REIMBURSEMENT Maravilla, Laura Sr Human Resources Analyst 209.04 WRIPAC TRNG Sacramento, CA 2-5 to 2-6-13 Markus, Stephen M. Plant Operator 300.00 CERT REIMBURSEMENT Markus, Stephen M. Plant Operator 300.00 CERT REIMBURSEMENT Masterson, Michael D. Source Control Inspector II 140.00 MEMBERSHIP RENEWAL May, Shawn R. Information Technology Tech 1 1,061.00 TUITION REIMBURSEMENT May,Todd A. Maintenance Spec. 718.76 MAXIMO TRAINING Portland, OR 4.29 to 5-2.13 McGrath, Peter Operations Sup" 340.00 CERT REIMBURSEMENT McMullin, Ryan Sr. Laboratory Analyst 1,500.15 PITTCON Philadelphia, PA 3-16 to 3-21-13 McMullin, Ryan Sr. Laboratory Analyst 5,097.94 TUITION REIMBURSEMENT Melby,Mark Sr. Plant Operator 404.43 TRI STATE SEMINAR Primm, NV 9.24 to 9-26-12 Melby,Mark Sr. Plant Operator 340.00 CERT REIMBURSEMENT Mendez,Thomas J. Sr. Plant Operator 300.00 CERT REIMBURSEMENT Menocal,Jorge Sr.Mechanic 328.24 TRI STATE SEMINAR Primm, NV 9-24 to 9-27-12 Menocal,Jorge Sr.Mechanic 110.00 CERT REIMBURSEMENT Menocal,Jorge Sr.Mechanic 105.00 CERT REIMBURSEMENT Meregillano,Tom B. Regulatory Spec. 314.00 ORGANIC RESIDUAL CONFERENCE Sacramento, CA 9-11-12 Meregillano,Tom B. Regulatory Spec. 105.00 TRI-TAC MEETING Sacramento, CA 11-8-12 Michaels, Robert Information Tech Supry 289.72 ESRI CONFERENCE San Diego, CA 7.23 to 7-24-12 Millea, Kathleen T. CIP Project Mgmt Sup" 125.00 CERT REIMBURSEMENT Miranda, Faviola Sr. Public Affairs Spec. 660.81 CAPPIO TRAINING Napa, CA 4-17 to 4-20-13 Miranda, Faviola Sr. Public Affairs Spec. 172.41 CWEA TRAINING Palm Springs, CA 4-16 to 4-17-13 Miranda, Faviola Sr. Public Affairs Spec. 1,056.06 CAMERA FOR PUBLIC EVENT Miranda, Faviola Sr. Public Affairs Spec. 325.86 HALLOWEEN EVENT Miranda, Faviola Sr. Public Affairs Spec. 180.88 HOLIDAY LUNCH Miranda, Faviola Sr. Public Affairs Spec. 100.00 REIMB FOR HERBERG PHOTO Miranda, Faviola Sr. Public Affairs Spec. 145.75 REIMB FOR OUTREACH 8 of 12 Prepared By: Lisa Rogers Return to Anemia Rom Orange County Sanitation District Government Code 53065.5, Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Morey,Michael N. Sr. Plant Operator 300.00 CERT REIMBURSEMENT Morgan, Lynn R. Admin.Asst. 136.06 EMPLOYEE LUNCH Morgan,Sonja W. Sr. Staff Analyst 224.00 3CMA TRAINING Portland,OR 9-4 to 9-7-12 Morgan,Sonja W. Sr. Staff Analyst 502.89 3CMA TRAINING Portland,OR 9-4 to 9-6-12 Murthy, Umesh N. CIP Project Mgr 150.00 CERT REIMBURSEMENT Murthy, Umesh N. CIP Project Mgr 116.00 CERT REIMBURSEMENT Murthy, Umesh N. CIP Project Mgr 150.00 CERT REIMBURSEMENT Myers, Dawn K. Sr. Laboratory Analyst 150.00 CERT REIMBURSEMENT Newsom,Adam P. Reliability Maint Tech 910.79 AMS COURSE Knoxville,TN 5-19 to 5-24-13 Nguyen, Huan-Huang Engineer 629.54 NAGDCA MEETING San Diego,CA 10-1 to 10-3.12 Nguyen, Huan-Hoang Engineer 116.00 CERT REIMBURSEMENT Nguyen, Huan-Hoang Engineer 103.75 EMPLOYEE LUNCH Nguyen,Washington Q. Engineer 115.00 CERT REIMBURSEMENT Niswonger,James D. Construction Insp Supry 1,300.25 NATIONAL FIRE CONV Chicago, IL 6-9 to 6-13-13 Panda, Kishora K. Engineer 300.00 CWEA CONFERENCE Pat.Springs,CA 4-18-13 Pantoja, Enrique Sr. Plant Operator 300.00 CERT REIMBURSEMENT Paramo, Giovanni Automotive/Heavy Equip Asst 228.21 CERT REIMBURSEMENT Park Jr.,Joseph W. Maintenance Supry 1,172.03 SMRP TRAINING Orlando, FL 10-14 to 10-19-12 Patel,Madankumar B. Sr. Engineer 116.00 CERT REIMBURSEMENT Patel, Sejal Engineer 116.00 CERT REIMBURSEMENT Pham,Duc M. Information Tech Analyst III 1,035.92 COMMVAULT TRAINING San Diego,CA 6.24 to 6.28.13 Philips, David N. Sr. Engineer 353.50 CERT REIMBURSEMENT Phuong, Ddaze Lead Plant Operator 1,051.25 CWEA CONFERENCE Palm Springs,CA 4-16 to 4-20-13 Phuong, Ddaze Lead Plant Operator 151.74 CERT REIMBURSEMENT Phuong, Ddaze Lead Plant Operator 136.54 CERT REIMBURSEMENT Phuong, Ddaze Lead Plant Operator 121.96 CERT REIMBURSEMENT Puccio,Michael Engineering Supry 431.76 PRACTICAL CONSTR. LAW TRAIN. Las Vegas, NV 10-16 to 10-18-12 Puccio,Michael Engineering Supry 125.00 CERT REIMBURSEMENT Puccio,Michael Engineering Supry 100.00 EMPLOYEE LUNCH Ralph,Alan D. Maintenance Supry 3,200.00 TUITION REIMBURSEMENT 9 of 12 Prepared By: Um Rogers Orange County Sanitation District Government Code 53065-5, Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Ralston,John R. Accounting Supry 300.00 CERT REIMBURSEMENT Rampley,Alexander J. Data Mgmt Tech II 2,815.21 TUITION REIMBURSEMENT Rebai,Mathew D. Sr. Plant Operator 170.00 CERT REIMBURSEMENT Rebai,Mathew D. Sr. Plant Operator 195.00 CERT REIMBURSEMENT Reynolds, Roy J. Maintenance Supry 555.59 MAINT REL MGRS Houston,TX 8-20 to 8-23-12 Reynolds, Roy J. Maintenance Supry 665.79 MAINT REL MGRS Houston,TX 11.12 to 11.15.12 Reynolds, Roy J. Maintenance Supry 573.59 MAINT RELIAB MGRS Houston,TX 10-1 to 10-4-12 Reynolds, Roy J. Maintenance Supry 555.59 MNTNCE R RELIABILITY TRNG Houston,TX 7-16 to 7-19-12 Reynolds, Roy J. Maintenance Supry 6,350.00 TUITION REIMBURSEMENT Rivera, George Security/Emerg Ping Spec. 1,182.10 AWWA TRAINING St. Louis,MO 9.8 to 9-13.12 Roberts,Mark S. Operations Supry 190.00 CERT REIMBURSEMENT Robertson, George L. Sr. Scientist 30B.00 REIMB FOR TRAINING San Diego, CA 5-28-13 Robertson, George L. Sr. Scientist 212.26 REIMB FOR TWO USGS Rocha,Johnny J. Sr. Plant Operator 190.00 CERT REIMBURSEMENT Rocha,Johnny J. Sr. Plant Operator 571.70 TUITION REIMBURSEMENT Rocha,Milton Sr. Plant Operator 170.00 CERT REIMBURSEMENT Rodriguez, David Engineer 200.00 CERT REIMBURSEMENT Rodriguez, David Engineer 115.00 CERT REIMBURSEMENT Ross, Kelly L. Senior Laboratory Analyst 729.00 TUITION REIMBURSEMENT Rothbart, Lisa A. Environmental Supry 710.73 CASA CONFERENCE Indian Wells,CA 1-16 to 1-17-13 Rothbart, Lisa A. Environmental Supry 1,352.88 CASA CONFERENCE Monterey, CA 8-8 to 8-11-12 Rothbart, Lisa A. Environmental Supry 579.70 BIOSOLIDS MEETING San Francisco,CA 10.10 to 10.12.12 Rothbart, Lisa A. Environmental Supry 1,760.00 TUITION REIMBURSEMENT Ruckman, Ernest S. Sr Environmental Specialist 5,121.75 TUITION REIMBURSEMENT RUUson, Doug Sr. Info Tech Analyst 691.00 ESRI CONFERENCE San Diego, CA 7-23 to 7-25-12 RUUson, Doug Sr. Info Tech Analyst 500.00 TUITION REIMBURSEMENT Ruth,James D. General Mgr 453.46 CASA CONFERENCE Indian Wells,CA 1-16 to 1-17-13 Ruth,James D. General Mgr 1,358.54 CASA CONFERENCE Monterey, CA 8-8 to 8-11-12 Sabri,Julian F. Engineering Supry 1,549.52 CWEA TRAINING Napa, CA 2-24-13 Sabri, Julian F. Engineering Supry 1,390.21 NACWA CONFERENCE Portland,OR 5.14 to 5-17-13 10 of 12 Prepared By: Lisa Rogers Return to Aaenda Report Orange County Sanitation District Government Code 53065.5,Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Sakamoto, Ken A. Sr Environmental Spec. 102.00 SETAC NORTH AMERI Long Beach, CA 11-12 to 11-15-12 Sakamoto, Ken A. Sr Environmental Spec. 399.92 CREW MEALS FOR THE NERISSA Savedra, Ernest R. Sr.Mechanic 155.00 CERT REIMBURSEMENT Schlefelbeln,Cheryl Admin.Asst. 406.74 HOLIDAY LUNCH Schiefelbein,Cheryl Admin.Asst. 125.93 HOLIDAY LUNCH-CAKES Schuler, Kevin A. Mechanic 170.00 CERT REIMBURSEMENT Schuler, Kevin A. Mechanic 3,700.00 TUITION REIMBURSEMENT Scott, Gregg A. Plant Operator 674.77 TRI STATE SEMINAR Primm,NV 9-24 to 9-28-12 Scott, Gregg A. Plant Operator 190.00 CERT REIMBURSEMENT Sevenandt,Wendy T. CIP Project Mgr 164.00 MEMBERSHIP RENEWAL Shaaban,Alexander Senior Laboratory Analyst 729.00 TUITION REIMBURSEMENT Shao,Y J. Sr. Engineer 190.00 CERT REIMBURSEMENT Shelp,Curt V. Lead Plant Operator 190.00 CERT REIMBURSEMENT Shephard,Adam Safety&Health Rep 118.00 CAL-OSHA TRAINING Los Angeles,CA 11-5 to 11-8-12 Shephard,Adam Safety&Health Rep 180.00 CERT REIMBURSEMENT Shubik,Jeffrey Y. Sr. Engineer 116.00 CERT REIMBURSEMENT Smith, Duane T. Sr. Plant Operator 890.61 CWEA CONFERENCE Palm Springs,CA 4-16 to 4-19-13 Sohanaki,Roya Engineering Supw 115.00 CERT REIMBURSEMENT Spears,James Operations Mgr 190.00 CERT REIMBURSEMENT Spencer, Richard L. Human Resources Sup, 5,902.61 TUITION REIMBURSEMENT Stacklin, Christopher A. Engineer 1,330.50 WEFTEC Chicago, IL 1-28 to 2-2-13 Stacklin,Christopher A. Engineer 1,214.26 WEFTEC New Orleans,LA 9-28 to 10-3-12 Stahl, Keith C. Plant Operator 230.00 CERT REIMBURSEMENT Steiger, Frank R. Engineer 115.00 CERT REIMBURSEMENT Steiger, Frank R. Engineer 414.11 TUITION REIMBURSEMENT Stokes, Don F. Instrumentation Tech II 360.00 CERT REIMBURSEMENT Stokes, Don F. Instrumentation Tech II 8,250.00 TUITION REIMBURSEMENT Sullivan,Moira E. Engineering Assistant 1 140.06 VOICE RECORDER Sullivan, Patrick A. Senior Plant Operator 4,453.15 TUITION REIMBURSEMENT Swindler,John W. IT Mgr 1,327.32 HDI CONFERENCE Las Vegas, NV 4.15 to 4.19.13 11 of 12 Prepared By: Um Rogers Orange County Sanitation District Government Code 53065-5, Public Disclosure Reports-Reimbursements by OCSD July 1, 2012 through June 30, 2013 Employee Name Title Amount Description Site Location Duration Swindler, John W. IT Mgr 302.70 CORNERSTONE CONFERENCE San Diego, CA 6-4 to 6-5-13 Tafolla, Brian J. Reliability Maint Tech 1,152.86 OIL ANALYIS COURSE Knoxville,TN 2.3 to 2-8.13 Tafolla, Brian J. Reliability Maint Tech 100.00 MEMBERSHIP RENEWAL Terriquez, Laura A. Sr Environmental Spec. 370.57 REIMB FOR NERISSA MEALS Tetsch,Gina A. Occupational Health Nurse 1,114.76 AAOHN CONFERENCE Las Vegas, NV 4-14 to 4-18-13 Tetsch,Gina A. Occupational Health Nurse 697.42 OSHA 2225 RESP PROTECTION San Diego, CA 2.10 to 2-14-13 Tetsch,Gina A. Occupational Health Nurse 124.70 EMPLOYEE LUNCH Thiede, Robert J. Pr Project Controls Analyst 146.50 MS SQL SERVER TRAINING Irvine, CA 4-22 to 4-26-13 Thiede, Robert J. Pr Project Controls Analyst 164.00 MEMBERSHIP RENEWAL Thomas, Christina M. Sr Environmental Spec. 148.00 CWEA CONFERENCE Palm Springs, CA 4.18 to 4-19-13 Thompson,Mary Sue Sr Environmental Spec. 1,094.46 CWEA CONFERENCE Napa, CA 2.24 to 2-28-13 Thompson,Mary Sue Sr Environmental Spec. 121.82 OPEN HOUSE BOOTHS Thompson, Robert C. Engineering Mgr 1,221.22 PITTCON Philadelphia, PA 3-17 to 3-20-13 Thompson, Robert C. Engineering Mgr 268.43 WATEREUSE CONFERENCE Phoenix,AZ 5.5 to 5-6.13 Thompson, Robert C. Engineering Mgr 115.00 CERT REIMBURSEMENT Thompson, Robert C. Engineering Mgr 5,250.00 TUITION REIMBURSEMENT Tintle,James G. Maintenance Supry 145.76 FASTER USER CONFERENCE Norfolk,VA 10-21 to 10-24-12 Tintle, James G. Maintenance Sup" 1,417.61 FLEET EXPO San Antonio,TX 6.9 to 6-13-13 Tintle, James G. Maintenance Sup" 330.59 FLEET SHOP TV Tjen, Kwen T. Sr. Plant Operator 190.00 CERT REIMBURSEMENT Torres, Edward M. Director of Ops Et Maint 743.89 AWWA CONFERENCE Glendale,AZ 3-11 to 3-13-13 Torres, Edward M. Director of Ops Ft Maint 424.39 CASA CONFERENCE Indian Wells,CA 1.16 to 1.17-13 Tran, Jane H. Engineer 571.38 CWEA TRAINING Napa, CA 2.24.13 Tuiasosopo-Kemper, Gary J. Lead Plant Operator 190.00 CERT REIMBURSEMENT Tuiasosopo-Kemper, Gary J. Lead Plant Operator 1,800.00 TUITION REIMBURSEMENT Velasco, MarcoPolo S. Associate Engineer 100.32 SSCSC COLLECTIONS WKSHP Carlsbad, CA 8.15.12 12 of 12 Prepared By: Lisa Rogers ADMINISTRATION COMMITTEE Neeting Date T1.1 IDir. 09/11/13 9/25/13 AGENDA REPORT Item Number Item Numbe 3 11 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert Ghirelli, Assistant General Manager SUBJECT: ELECTRONIC RECORDING MEMORANDUM OF UNDERSTANDING COUNTY OF ORANGE CLERK-RECORDER'S OFFICE GENERAL MANAGER'S RECOMMENDATION A. Approve the Electronic Recording Memorandum of Understanding (MOU) with the County of Orange, Clerk-Recorders office; and B. Authorize the Clerk of the Board, or her designee, to transmit/record any and all required Orange County Sanitation District real property documents in an electronic format. SUMMARY The County of Orange, Clerk-Recorder's Office accepts electronically recorded documents in lieu of written paper documents. OCSD and the Clerk-Recorder have determined that an electronic recordation system benefits both entities economically and operationally. Valuable staff hours are saved in the transportation of documents to and from the County with long waiting periods for recordation. Clerk-Recorder staff installs the Electronic Recording (ER) software on a workstation provided by the District at a secured location in the Board Services Vault. This ER computer workstation will be exclusively dedicated to Electronic Recording and may only be used to transmit documents to, or receiving messages/confirmations from the Clerk-Recorder's Office. The workstation cannot be used by OCSD staff for any other function. A Cybercard is required for the recordation function and will be controlled and used solely by the Clerk of the Board or her designee. The recording takes a few minutes and an answer is received within hours of either its successful recordation or a notification of its failure and reason why. There is no direct cost to the District, as the County will install the system on District provided dedicated equipment. The County will also provide training to the appropriate staff during installation at our facility, and will further maintain and update the system free of charge. The minimal indirect cost of the Board Services staff time maintaining the system and recording documents is still a substantial savings in comparison to the existing indirect cost of other district staff's travel time (to/from County offices), postage costs, locating, routing and/or transferring documents to other departments. Page i of 2 PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The County Electronic Recording program was established in May 1997, and has grown from a few hundred documents a day an average of 2,500 documents daily and the total number of electronically recorded documents now successfully exceed 4.4 million. The City Clerk's Offices of Huntington Beach, Laguna Beach, and several other Orange County cities, have been using the ER Program for many years and completely endorse this successful program; citing more accurate recordings, no loss of vital documents and greater time savings. CEQA N/A BUDGET/DELEGATION OF AUTHORITY COMPLIANCE This request complies with the authority levels of the Sanitation District's Delegation of Authority. Orange County Sanitation District is exempt from recording costs. The cost of additional Cybercards is $50.00 each, which will be absorbed by Board Services if the need for an additional card is required. ATTACHMENTS The following attachment(s) are included in hard copy and may also be viewed on-line at the OCSD website(www.ocsd.coml with the complete agenda package: 1. Memorandum of Understanding — Electronic Recording JH:RG:MA:kl Page 2 of 2 Return to Aaeada Report Hugh Nguyen Clerk-Recorder ORANGE COUNTY HALL OF RECORDS AND FINANCE 12 CIVIC CENTER PLAZA, ROOM 101 P.O.BOX 238, SANTA ANA,CALIFORNIA 92702-0238 PHONE(714)834-2248 FAX(714)834-2675 ELECTRONIC RECORDING MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding dated September 25, 2013, is between the Orange County Clerk-Recorder and Orange County Sanitation District, recording electronically in Orange County. For purposes of this memorandum of understanding, Electronic Recording is defined as: a. The transmission of real property documents in electronic format by an authorized title company, mortgage banker, full service bank official or other trusted entity over an internet connection to the Recorder's Office in Santa Ana and, b. The County Clerk-Recorder's deputized examiners will perform a document examination using the same procedures and standards as those used by conventional methods of recording. A confirmation will be transmitted back to the party requesting the recording that indicates the recording has been completed. This confirmation does include the recording endorsement. C. In cases of documents rejected in the recording process, return of the rejected imaged documents along with the explanatory notice to the title company, mortgage banker, full service bank or other trusted entity over the same internet connection and subsequently the transmission back to the Recorder's Office with the appropriate corrections having been made prior to the 4:00 p.m. recording deadline. In general, it is understood that: d. All state licensed title companies, mortgage bankers, full service banks or other trusted entities doing business in Orange County and/or serving Orange County residents are eligible to participate in the Electronic Recording Program. e. Participation in the Electronic Recording Program is voluntary and the decision to do so is a business judgment. Companies electing not to participate will receive service at the same level prevailing at outset of the program in May 1997, though it is understood that by definition Electronic Recording is much faster than conventional recording methods. f. Participating in Electronic Recording will require meeting the necessities for recording electronically as prescribed by the County. RECITALS WHEREAS, Government Code section 27279.1 allows the Orange County Clerk- Recorder to accept electronically recorded documents in lieu of written paper documents, provided it is in the best interest of Orange County and public, and Page 1 of 7 WHEREAS, the Clerk-Recorder has determined that it is in the best interest of the County to accept electronically recorded documents inasmuch as it evens out the daily workflow in the office reducing overtime and related costs while elevating the level of recording service to the highest in the nation, and WHEREAS, since its inception in May, 1997, Electronic Recording in Orange County has grown from just four participating companies submitting a few hundred documents a day to 175 companies submitting an average of 2,500 documents daily and the total number of electronically recorded documents now successfully exceeds 4.4 million, and WHEREAS, County residents and taxpayers as well as the title insurance companies, mortgage bankers, full service banks or other trusted entities benefit economically and operationally by electronic recordation, and, WHEREAS, Electronic Recording mandates a close daily working relationship as well as mutual trust between the Clerk-Recorder's Office and company officials, and WHEREAS, company officials share with the Clerk-Recorder the need to operate and maintain a secure recording system that safeguards parties to recordation from deceit, fraud and forgery, and WHEREAS, company officials will ensure that only original documents holding original signatures that are properly notarized are submitted for Electronic Recording, and WHEREAS, the County Clerk-Recorder may from time-to-time update the system to enhance and improve system security as deemed necessary for the benefit of Orange County citizens. NOW, THEREFORE, the parties hereto agree as follows; 1. Terms This Memorandum of Understanding shall become effective upon the signature of parties and shall remain in effect unless terminated by one party in accordance with this Memorandum. 2. Eligibility A participant who electronically records documents must be either a licensed title insurer, as defined in section 12340.4 of the Insurance Code, or a licensed underwritten title company, as defined in Section 12340.5 of the Insurance Code or a mortgage bank with $4 billion outstanding in real estate loans, a full service bank or other trusted entities serving the citizens of Orange County and approved by the Clerk-Recorder. Page 2 of 7 Return to Aaenda Report Scope of Services A. County Clerk-Recorder 1. The Clerk-Recorder will record documents submitted electronically by the participating company in lieu of written paper. 2. The Clerk-Recorder will issue one cybercard to the submitting company to access the system free of charge at the time of initial installation. 3. Documents will be accepted for recording in the Clerk-Recorder's Office from 7:30 a.m. to 4:00 p.m. (Pacific Time) on all regularly scheduled working days. Any documents submitted after 4:00 p.m. will be recorded the next business day. 4. Documents submitted electronically will be examined for suitability for recording by certified document examiners who will follow procedures and standards identical to those employed in conventional forms of examination. 5. If the system causes delays or power failures interfere with the normal course of business, the Clerk-Recorder will notify the affected companies with a choice of using a courier service or waiting until the problem has been remedied. 6. The Clerk-Recorder may terminate access to any electronic recording system, or any part of a system, or may terminate access of any authorized submitter, or any authorized staff, at any time it deems it necessary to protect the public interest, to protect the integrity of public records, to protect homeowners or real property owners from financial harm. No cause of action or liability against the Clerk-Recorder or any government agency shall arise from the decision of the Clerk-Recorder to terminate or deny access of any person to the electronic recording system. 7. If the County Clerk-Recorder, believes that an electronic recording system is vulnerable to fraud or intrusion, the Clerk-Recorder shall immediately take the necessary steps to guard against any compromise of the electronic recording system including, if necessary, the suspension of the electronic recording system. a. Clerk-Recorder staff will install the Electronic Recording software on the submitting participant's designated computer. Clerk-Recorder staff will train submitting participant's personnel during the initial software installation. Further training for new personnel will be the responsibility of the submitting participant. 9. Software training and initial installation will be completed at the submitter's place of business if located within a specific distance from the Clerk-Recorder, as determined by the Clerk-Recorder. If the submitter is deemed beyond the determined specific distance, the computer shall be shipped to the Clerk- Recorder for installation at the cost of the submitter, and training shall happen via telephone and/or online. 10. The Orange County Clerk-Recorder shall not be responsible for lost or damaged equipment. Page 3 of 7 B. Participants 1. A workstation exclusively dedicated to Electronic Recording is required. This ER computer workstation shall only be used to transmit documents for recording and receiving messages/confirmations. The workstation cannot be used by Title Company staff for other functions such as standard business office systems and/or e-mail. 2. If the submitter is deemed beyond the determined specific distance, the submitter shall agree to send in its computer via priority mail for software installation, and to pay the cost of shipping for return by priority mail after installation. Upon software installation those deemed shall be trained by OCCR staff via telephone/online. 3. Submitter agrees to unscheduled audits set first by the OCCR. Submitter also understands that any violator of this move may lead to suspension and/or termination. 4. The submitting company may only submit original documents bearing original signatures and notary seals. 5. Participants take full responsibility for the submission of documents. 6. Each participant will appoint a representative that is responsible for enforcing security procedures. 7. The Clerk-Recorder will be notified in writing immediately, if any authorized system user(s)change (i.e. new hire, termination and resignation). 8. Participants will ensure that only authorized personnel have access to the system and, that during non-working hours the system will be disabled. 9. Participants may not move or re-locate equipment and/or software program to another location without first obtaining the written approval of the Clerk-Recorder Department. Authorization is only valid at the location of the initial installation as reflected on page 7 of this signed Agreement. 10. Participants are required to purchase cybercards beyond the one issued at the time of software installation. Participants are also required to ensure that every user has and uses their own cybercard when accessing the system. 11. Participants understand that submission of documents throughout the day rather than in batches sent late in the day are necessary for earliest conformations. Participants make all reasonable efforts to forward documents, as they are ready for examination throughout the workday. 12. No software modifications to the Electronic Recording System are allowed. 13. Required Electronic Recording equipment i.e., computer, monitor and an Internet connection will be provided and owned or leased by the participant 14. Electronic Recording users are required to logoff the application when not in use. Page 4 of 7 Return to Aaeada Rom 15. Hours for document submission are between 7:00 a.m. and 7:00 p.m. (Pacific Time) However; documents will be recorded from 7:30 a.m. to 4:00 p.m. It should be noted that after 3:30 p.m. any document(s) rejected for incompleteness shall cause a return of the entire order for full resubmission upon satisfactory correction of document(s). Documents submitted between the hours of 4:00-7:00 p.m. will be recorded the following day. 16. The participant attests to the accuracy and completeness of all recording transactions. Liabilities should a dispute or legal action arise concerning an Electronic Recording transaction, the County of Orange and the Clerk-Recorder's Office will be held harmless and not liable for any damages. 17. Participating companies must carefully monitor and control use of the system for compliance with agreed to safeguards and assumes full responsibility for any malicious attack that harms, damages or has a damaging effect to the County's system or databases. 18. In lieu of the requirements set forth in Government Code Section 27321, after acceptance for recording, the county recorder shall electronically transmit a copy of each recorded electronic document accepted under this article to the authorized submitter. The authorized submitter shall be responsible for mailing by United States Postal Service a copy of the recorded electronic document to the address specified in the instructions for mailing upon completion of recording within 3 working days of the date of recording. 3. Liability A. County will not incur any liability for the information electronically transmitted by the participants. B. County will not incur any liability for electronically transmitted records that do not adhere to Government Code 27201. C. County will not incur any liability for any breach of security, fraud or deceit as a result of Electronic Recording. D. In the event of fraud impacting the value of or title to real estate, any authorized submitter using the electronic recording system bears the financial responsibility for transactions in which the submitter engages, This liability shall lie notwithstanding contrary waiver and/or disclaimer language that may be present in any title insurance policy, escrow instruction, or other document pertaining to the real estate transaction associated with said fraud. 4. (Left Blank) 5. Termination Any party may terminate this Memorandum of Understanding for any reason by serving the other parties with a fifteen-day (15)written notice of termination. Upon termination, all Electronic Recording software and equipment owned by the County of Orange must be returned to the Clerk-Recorder within thirty(30) days of termination. Page 5 of 6. Entire Agreement This agreement contains the entire and complete understanding of the parties and supersedes any/all other agreements, oral or written, with respect to the terms under this agreement. 7. Notice Any notice pursuant to this agreement shall be in writing and deemed given when delivered personally or deposited in the United States mail, postage prepaid, certified and addressed as follows: Orange County Clerk-Recorder Attn: Administrative Office P.O. Box 238 Santa Ana, Ca 92701-0232 Participating Company Information: Name: Orange County Sanitation District Telephone #: 714-962-2411 10944 Ellis Avenue Fax M 714-962-0356 Street Address (location of equipment/software) Fountain Valley, CA 92708-7018 Web Site: www.ocsd.com City, State and Zip Code Printed Name of Department Representative (see page 4): Maria E. Ayala. Clerk of the Board Telep hone#: 714-593-7130 Email Address: mayala(a).ocsd.com Printed Name of Scanner., Kelly A. Lore, Admin. Asst. to the Clerk of the Board Telep hone#: 714-593-7433 Email Address: klore(cDocsd.com Page 6 of 7 Return to Mende Report Managemenb8oard Approval: Signed &Approved By: Date: Printed Name: Troy Edgar Title: Board Chairman Attested By: Date: Printed Name: Maria E. Ayala Title: Clerk of the Board Approved as to form: Brad Hogin, General Counsel For Clerk-Recorder Use Only Approved By: Hugh Nguyen, Orange County Clerk-Recorder Date: Page 7 of ADMINISTRATION COMMITTEE N1'1g/13oate T1.11111. 09/119/25/13 Item AGENDA REPORT N Number Item Nu bar 4 Nu Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES, SERIES 2013A GENERAL MANAGER'S RECOMMENDATION A. Adopt Resolution No. OCSD 13-14, 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 2013A, 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; and B. That the Orange County Sanitation District Financing Corporation approve the documents, supporting and authorizing the Notes in an aggregate amount not to exceed $135,000,000. SUMMARY In March 2006, the Sanitation District issued $200 million of variable rate Certificates of Participation (COP), Series 2006 (2006 COPS). Altematively, the Sanitation District could have issued debt at an estimated cost of 4.54% on a fixed rate basis in 2006. From inception through August 2008, the average variable rate on the 2006 COPs was 2.95% or 0.22% less than the SIFMA index (weekly market index of tax-exempt variable rate obligations). As the global financial crisis took hold in the late summer of 2008, there was a significant increase in the variable rate borrowing cost of the Sanitation District, including all municipal borrowers, as the 2006 COPS averaged 4.29% (or 1.56% above the SIFMA index) for the period between September 2008 and December 2008. The amount of the increase in variable rate cost above the SIFMA index can be attributed to the weakened financial strength of the bank, DEPFA Bank plc that was providing liquidity support on the 2006 COPs. Page 1 of 5 In December 2008, the Sanitation District proactively refunded the 2006 COPS with the Refunding COP Series 2008C Certificate Anticipation Notes (2008C CANS)to reduce its exposure to then higher and more volatile variable rate costs. The yield on the 2008C CANS was 0.98% for a one-year period. The issuance of the 2008C CANS allowed the Sanitation District to redeem the 2006 COPs at an all-in cost of less than 1.25% and avoid paying a bank rate of 4.75% which would have been effective starting a month later. Since the 2008C CANs issuance, the Sanitation District completed four additional one-year refinancings at yields of less than 0.37% as summarized below: All-In Cost 2009E $ 165,865,000 0.370% 0.559% 20106 154,665,000 0.360 0.525 2011E 143,205,000 1 0.225 0.399 2012C 131,700,000 1 0.210 0.410 The interest rate on the Revenue Refunding Certificate Anticipation Notes Series 2012C (2012C CANS) was fixed for only one year and the entire $131.7 million plus interest becomes due and payable on October 30, 2013. The purpose of the financing is to refund all of the $131.7 million Revenue Refunding Certificate Anticipation Notes, Series 2012C to avoid the use of the Sanitation District's cash reserves to make repayment. The financing is structured as new one-year fixed rate maturity that will be sold in a competitive sale. PRIOR COMMITTEE/BOARD ACTIONS July 2013 — The Board authorized the General Manager to issue Revenue Refunding Certificate Anticipation Notes, Series 2013A, as one-year fixed rate obligations, in an amount not to exceed $135.0 million to replace the $131.7 million Revenue Refunding Certificate Anticipation Notes, Series 2012C maturing on October 30, 2013. September 2012 — The Board adopted Resolution No. OCSD 12-12, authorizing the execution and delivery by the 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 2012C, authorizing the execution and delivery of such Notes evidencing principal in an aggregate amount of not to exceed $145,000,000, 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. Page 2 of 5 ADDITIONAL INFORMATION The Sanitation District currently has ten series of debt issuances outstanding in the par amount of $1.245 billion. The following table lists each issuance, the outstanding amount, and the interest rate mode. Outstanding Interest Rate Par Amount I Mode Series 2012C CANS(") $ 131,700,000 Fixed Rate (one-year) Series 2012B Refunding(2) 66,395,000 Fixed Rate Series 2012A Refunding(3) 100,645,000 Fixed Rate Series 2011A Refunding('xa) 130,345,000 Fixed Rate Series 2010C(5) 157,000,000 Fixed Rate Series 2010A(5) 80,000,000 Fixed Rate Series 2009A Refunding(3) 187,765,000 Fixed Rate Series 2008B Refunding(6) 25,585,000 Fixed Rate Series 200713(5) 273,400,000 Fixed Rate eries 2007A Refunding(3) 92,620,000 Fixed Rate Total : $1,245,455,000 (1) As of September 1,2013 (2) Refunded a portion of Sense 20M (3) Refunded a portion of Series 2003 (4) Series 2012C are fixed one-year certificate of anticipation notes(CANS),that refunded the Series 2011E CANS,that refunded the 2010E CANS,that refunded the Series 2009E CANS,that refunded the 2008C CANS that were issued to refund the Series 2006 Daily Venable Rate that were supported by a weak liquidity facility bank. (5) New money debt issue (6) Series 2008B refunded the Series 1993 Synthetic Variable-to-Fixed Rate Debt issue that was supported by a failing insurance provider. The Series 1993 refunded the Series 1986 and a portion of the Series"B"COPs. Due to the fact that this 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. All costs involved with the refunding, including costs for PRAG and Fulbright & Jaworski LLP will be paid from the proceeds of the new refunding issue. Legal Authorization and ADorovals The Board of Directors and the Financing Corporation will each be required to adopt separate Resolutions to complete this refunding. Drafts of these two Resolutions are available for review on the Sanitation District's webpage, as described in the "Attachments" section below. A Financing Corporation is required by the structure of the Notes 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. Page 3 of 5 The OCSD Resolution authorizes the execution and delivery of certain legal documents and the execution and delivery of Revenue Refunding Certificate Anticipation Notes, Series 2013A, evidencing principal in an aggregate amount of not to exceed $135,000,000 all as spelled out in the title as follows: "A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES, SERIES 2013A, 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 OTHER 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 REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES, SERIES 2013A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH NOTES EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $135,000,000 AND AUTHORIZING THE EXECUTION OF OTHER NECESSARY DOCUMENTS AND RELATED ACTIONS." Following is a chart listing the remaining steps to be completed for the issuance of the Revenue Refunding Certificate Anticipation Notes, Series 2013A debt issuance: ➢ Board approval of legal and disclosure documents ➢ Financing Corporation approval of legal and disclosure September documents ➢ Rating Agency discussions ➢ Publish Notice of Intention to Sell ➢ Marketing and Sale through a Competitive Sale Process October ➢ Closing ➢ Begin debt administration Page 4 of 5 CEQA N/A BUDGET/DELEGATION OF AUTHORITY COMPLIANCE N/A ATTACHMENTS The following attachments may be viewed on-line at the OCSD website www.ocsd.com along with the complete agenda package: 1. Resolution No. OCSD 13-14 2. Corporation Resolution No. FC-20 3. Draft Trust Agreement 4. Draft Installment Purchase Agreement 5. Draft Continuing Disclosure Agreement 6. Draft Preliminary Official Statement 7. Draft Official Notice Inviting Bids 8. Draft Notice of Intention to Sell Page 5 of 5 RESOLUTION NO. OCSD 13-14 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY BY THE DISTRICT OF AN INSTALLMENT PURCHASE AGREEMENT, A TRUST AGREEMENT AND A CONTINUING DISCLOSURE AGREEMENT IN CONNECTION WITH THE EXECUTION AND DELIVERY OF ORANGE COUNTY SANITATION DISTRICT REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES, SERIES 2013A, 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 OTHER NECESSARY DOCUMENTS AND RELATED ACTIONS WHEREAS, to refinance the acquisition, construction and installation of certain improvements to its wastewater system (the "Prior Project") the District caused the execution and delivery of $131,700,000 in aggregate principal amount of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2012C, of which $131,700,000 in principal amount is currently outstanding (the "Prior Certificates"); and WHEREAS, the District desires to pay at maturity all of the Prior Certificates by paying all of the principal component of the installment payment relating to the Prior Certificates (the "Prior Installment Payment"), and the interest component thereof, thereby causing all of the Prior Certificates to be paid; and WHEREAS, to provide the funds necessary to pay the Prior Installment Payment to be so paid, the District and the Orange County Sanitation District Financing Corporation (the "Corporation") desire that the Corporation purchase the Prior Project from the District and the District sell the Prior Project to the Corporation, and that the District then purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the District, for the installment payment (the "Installment Payment") to be made by the District, pursuant to a new installment purchase agreement (the "Installment Purchase Agreement"), and the Corporation and the District have agreed to finance such payment by causing the execution and delivery of up to $135,000,000 in aggregate principal amount of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes") to be repaid from the sale proceeds of future certificates of participation, other notes or obligations or lawfully available funds of the District; and OCSD 13-14 1 of 7 WHEREAS, the Corporation intends to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to Union Bank, N.A., 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'); and WHEREAS, in consideration of such assignment and the execution and delivery of the Trust Agreement, the Trustee will be instructed to execute and deliver the Notes, evidencing direct, undivided fractional interests in the Installment Payment, and the interest thereon; and WHEREAS, the District desires to provide for the public sale of the Notes in one or more discrete sale transactions; and WHEREAS, a form of the Notice of Intention to Sell to be published in connection with the public offering and sale of the Notes 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"); and WHEREAS, a form of the Official Notice Inviting Bids to be distributed in connection with the public offering and sale of the Notes 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"); and WHEREAS, a form of the Preliminary Official Statement to be distributed in connection with the public offering of the Notes 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'); and 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 Notes to provide disclosure of certain material events on an ongoing basis; and WHEREAS, to cause such requirement to be satisfied, the District desires to enter into a Continuing Disclosure Agreement with a dissemination agent to be named therein and 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'); and OCSD 13-14 2 of 7 WHEREAS, there have been prepared and submitted to this meeting forms of: (1) the Installment Purchase Agreement; (2) the Trust Agreement; (3) the Notice of Intention to Sell; (4) the Notice Inviting Bids; (5) the Preliminary Official Statement; and (6) the Continuing Disclosure 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; and NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE DISTRICT DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1. All of the recitals herein contained are true and correct and the Board of Directors of the District (the "Board") so finds. Section 2. The Installment Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. The Chair of the Board, and such other member of the Board as the Chair may designate, the General Manager of the District, the Director of Finance and Administrative Services of the District, and such other officers of the District as the Director of Finance and Administrative Services may designate (the "Authorized Officers") are, and each of them is, hereby authorized and directed, for and in the name of the District, to execute and deliver the Installment Purchase Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Installment Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate principal amount of the Installment Payment in excess of $135,000,000, shall not result in a true interest cost for the Installment Payment in excess of 2.0% per annum and shall not result in an Installment Payment later than October 30, 2014. 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 OCSD 13-14 3 of 7 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 Notes evidencing principal in an aggregate amount of not to exceed $135,000,000, payable in the year and in the amount, and evidencing principal of and interest on the Installment Payment as specified in the Trust Agreement as finally executed, are hereby authorized and approved. Section 5. The payment of the remaining principal components of the Prior Installment Payment at maturity, and the interest components thereof, and the Prior Certificates evidencing interests therein, 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 applicable Notice of Intention to Sell in connection with the offering and sale of a series of the Notes 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 one or more Notices of Intention to Sell to be published 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 Notes 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 one or more Notices Inviting Bids in connection with the offering and sale of the Notes is hereby authorized and approved. The terms and conditions of the offering and sale of the Notes shall be as specified in the applicable Notice Inviting Bids. Bids for the purchase of the Notes shall be received at the time and place set forth in the applicable 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 Notes with the lowest true interest cost, or to reject all bids therefor, in accordance with the terms of the applicable 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 Notes is hereby authorized and approved. OCSD 13-14 4 of 7 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 Notes 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 Notes, 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 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 Notes and the transactions contemplated by the notices, agreements and documents referenced in this Resolution. The Authorized Officers are further authorized and directed to execute and deliver such additional notes as may be necessary or desirable to pay the Notes at maturity; provided, however, that the documents executed and delivered in connection with any such notes shall be in the form approved pursuant to this Resolution in connection with the Notes. Section 12. All actions heretofore taken by the officers and employees of the District with respect to the execution, delivery and sale of the Notes, or in connection with or related to any of the agreements or documents referenced in this Resolution, are hereby approved, confirmed and ratified. OCSD 13-14 5 of 7 Section 13. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED at a regular meeting held on September 25, 2013. Troy Edgar Chairman of the Board ATTEST: Maria E. Ayala Clerk of the Board APPROVED: Brad Hogin General Counsel, Orange County Sanitation District OCSD 13-14 6 of 7 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 13-14 was passed and adopted at a regular meeting of said Board on the 251h day of September, 2013, 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 251h day of September, 2013. Maria E. Ayala Clerk of the Board of Directors Orange County Sanitation District OCSD 13-14 Page 7 of 7 RESOLUTION NO. FC-20 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 REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES, SERIES 2013A, AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH NOTES EVIDENCING PRINCIPAL IN AN AGGREGATE AMOUNT OF NOT TO EXCEED $135,000,000 AND AUTHORIZING THE EXECUTION OF OTHER 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") caused the execution and delivery of $131,700,000 in aggregate principal amount of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2012C, of which $131,700,000 in principal amount is currently outstanding (the "Prior Certificates"); and WHEREAS, the District desires to pay at maturity all of the Prior Certificates by paying all of the principal component of the installment payment relating to the Prior Certificates (the "Prior Installment Payment"), and the interest component thereof, thereby causing all of the Prior Certificates to be paid; and WHEREAS, to provide the funds necessary to pay the Prior Installment Payment to be so paid, the District and the Orange County Sanitation District Financing Corporation (the "Corporation") desire that the Corporation purchase the Prior Project from the District and the District sell the Prior Project to the Corporation, and that the District then purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the District, for the installment payments (the "Installment Payment") to be made by the District, pursuant to a new installment purchase agreement (the "Installment Purchase Agreement"), and the Corporation and the District have agreed to finance such payment by causing the execution and delivery of up to $135,000,000 in aggregate principal amount of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes") to be repaid from future certificates of participation, other notes or obligations or lawfully available funds of the District; and WHEREAS, the Corporation intends to assign without recourse certain of its rights under and pursuant to the Installment Purchase Agreement to Union Bank, N.A., 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 FC-20 1 of 5 Resolution, being referred to herein as the "Trust Agreement'); and WHEREAS, in consideration of such assignment and the execution and delivery of the Trust Agreement, the Trustee will be instructed to execute and deliver the Notes, evidencing direct, undivided fractional interests in the Installment Payment, and the interest thereon; and WHEREAS, the Corporation desires to assist the District to provide for the public sale of the Notes; and WHEREAS, there have been prepared and submitted to this meeting, form: (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 $135,000,000, shall not result in a true interest cost for the Installment Payments in excess of 2.0% per annum and shall not result in a final Installment Payment later than October 30, 2014. FC-20 2 of 5 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 Notes evidencing principal in an aggregate amount of not to exceed $135,000,000, payable in the year and in the amount, and evidencing direct, undivided fractional interests in the Installment Payment, and the interest thereon, as specified in the Trust Agreement as finally executed, are hereby authorized and approved. Section 5. The Authorized Officers 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 Notes and the transactions contemplated by the agreements or documents referenced in this Resolution. The Authorized Officers are further authorized and directed to assist the District in delivering such additional notes as may be necessary or desirable to pay the Notes at maturity; provided, however, that the documents executed and delivered in connection with any such notes shall be in the form approved pursuant to this Resolution in connection with the Notes. Section 6. All actions heretofore taken by the officers and agents of the Corporation with respect to the execution, delivery and sale of the Notes, 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. FC-20 3 of 5 PASSED AND ADOPTED at a meeting held on September 25, 2013. Troy Edgar President, Orange County Sanitation District Financing Corporation ATTEST: Maria E. Ayala Secretary, Orange County Sanitation District Financing Corporation APPROVED: General Counsel, Orange County Sanitation District Financing Corporation FC-20 4 of 5 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Maria E. Ayala Secretary of the Orange County Sanitation District Financing Corporation, do hereby certify that the foregoing Resolution No. FC-20 was passed and adopted at a regular meeting of said Board on the 25f' day of September, 2013, 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 251" day of September, 2013. Maria E. Ayala Secretary of the Orange County Sanitation District Financing Corporation FC-20 5 of 5 NRF DRAFT 09/04/13 TRUST AGREEMENT by and among UNION BANK,N.A., as Trustee, ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION and ORANGE COUNTY SANITATION DISTRICT Dated as of October 1,2013 Relating to $[Paz Amount] Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A 09141949.4 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; EQUAL SECURITY Section1.01. Definitions........................................................................................................2 Section 1.02. Definitions in Installment Purchase Agreement.............................................. 8 Section1.03. Equal Security.................................................................................................. 8 ARTICLE H TERMS AND CONDITIONS OF NOTES Section 2.01. Preparation and Delivery of Notes...................................................................9 Section 2.02. Denomination, Medium and Dating of Notes..................................................9 Section 2.03. Payment Date of Notes; Interest Computation................................................9 Section2.04. Form of Notes..................................................................................................9 Section 2.05. Execution of Notes and Replacement Notes....................................................9 Section 2.06. Transfer and Payment of Notes; Exchange of Notes.......................................9 Section 2.07. Note Registration Books................................................................................ 10 Section2.08. Reserved......................................................................................................... 10 Section 2.09. Notes Mutilated, Lost,Destroyed or Stolen................................................... 10 Section 2.10. Book-Entry System........................................................................................ 11 ARTICLE III PROCEEDS OF NOTES Section 3.01. Delivery of Notes........................................................................................... 13 Section 3.02. Deposit and Transfer of Proceeds of Notes................................................... 13 Section 3.03. Costs of Issuance Fund.................................................................................. 13 ARTICLE IV NO PREPAYMENT OF NOTES Section 4.01. No Prepayment............................................................................................... 13 ARTICLE V ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS Section 5.01. Assignment and Pledge.................................................................................. 13 Section 5.02. Installment Payment Fund............................................................................. 14 Section 5.03. Investment of Moneys.................................................................................... 14 Section 5.04. Brokerage Confirmations............................................................................... 15 ARTICLE VI COVENANTS Section 6.01. Compliance with Trust Agreement................................................................ 15 Section 6.02. Compliance with Installment Purchase Agreement....................................... 16 Section 6.03. Compliance with Master Agreement............................................................. 16 Section 6.04. Observance of Laws and Regulations............................................................ 16 Section6.05. Other Liens..................................................................................................... 16 79141949.4 1 TABLE OF CONTENTS (continued) Page Section 6.06. Prosecution and Defense of Suits .................................................................. 16 Section 6.07. Accounting Records and Statements............................................................. 16 Section 6.08. Tax Covenants ............................................................................................... 17 Section 6.09. Continuing Disclosure ...................................................................................20 Section 6.10. Further Assurances.........................................................................................20 ARTICLE VII DEFAULT AND LIMITATIONS OF LIABILITY Section 7.01. Action upon Event of Default........................................................................20 Section 7.02. Other Remedies of the Trustee ......................................................................21 Section7.03. Non-Waiver....................................................................................................21 Section 7.04. Remedies Not Exclusive................................................................................21 Section 7.05. Application of Amounts After Default..........................................................22 Section 7.06. Trustee May Enforce Claims Without Possession of Notes..........................22 Section 7.07. Limitation on Suits.........................................................................................22 Section 7.08. No Liability by the Corporation to the Owner...............................................23 Section 7.09. No Liability by the District to the Owners.....................................................23 Section 7.10. No Liability of the Trustee to the Owners.....................................................23 ARTICLE VIII THE TRUSTEE Section 8.01. Employment of the Trustee; Duties...............................................................23 Section 8.02. Removal and Resignation of the Trustee.......................................................24 Section 8.03. Compensation and Indemnification of the Trustee........................................25 Section 8.04. Protection of the Trustee................................................................................25 ARTICLE IX AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT Section 9.01. Amendment or Supplement...........................................................................27 Section 9.02. Disqualified Notes .........................................................................................28 Section 9.03. Endorsement or Replacement of Notes After Amendment or Supplement....................................................................................................28 Section 9.04. Amendment by Mutual Consent....................................................................28 ARTICLE X DEFEASANCE Section 10.01. Discharge of Notes and Trust Agreement......................................................28 Section10.02. Unclaimed Moneys........................................................................................29 ARTICLE XI MISCELLANEOUS Section 11.01. Benefits of Trust Agreement..........................................................................30 Section 11.02. Successor Deemed Included in all References to Predecessor......................30 Section 11.03. Execution of Documents by Owners.............................................................30 79141949.4 ii TABLE OF CONTENTS (continued) Page Section 11.04. Waiver of Personal Liability..........................................................................31 Section11.05. Reserved.........................................................................................................31 Section 11.06. Content of Written Certificates......................................................................31 Section 11.07. Funds and Accounts.......................................................................................31 Section 11.08. Article and Section Headings,Gender and References.................................32 Section 11.09. Partial Invalidity.............................................................................................32 Section 11.10. California Law...............................................................................................32 Section11.11. Notices...........................................................................................................32 Section 11.12. Effective Date ................................................................................................33 Section 11.13. Execution in Counterparts..............................................................................33 EXHIBIT A—FORM OF NOTE 79141949A 111 TRUST AGREEMENT THIS TRUST AGREEMENT (this "Trust Agreement"), is dated as of October 1, 2013, by and among UNION BANK, N.A., 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 caused the execution and delivery of $131,700,000 in aggregate principal amount of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2012C, of which $131,700,000 in principal amount is currently outstanding(the"Prior Notes"); WHEREAS, the District desires to pay at maturity all of the Prior Notes by paying all of the principal component of the installment payment relating to the Prior Notes (the "Prior Installment Payment'), and the interest component thereof,thereby causing all of the Prior Notes to be paid; WHEREAS, to provide the funds necessary to pay the Prior Installment Payment, 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 payment (the "Installment Payment') to be made by the District, pursuant to a new installment purchase agreement (the "Installment Purchase Agreement'), and the Corporation and the District have agreed to finance such payment by causing the execution and delivery of $[Par Amount] in aggregate principal amount of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes") evidencing direct, fractional undivided interests in the Installment Payment and the interest thereon,to be made by the District pursuant to the 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 the Installment Purchase Agreement, and the Installment Payment, 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 the Installment Purchase Agreement to the Trustee; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Trust Agreement do exist, have happened and have been performed in regular and due time, 79141949.4 form and manner as required by law, and the parties hereto are now duly authorized to execute and deliver this Trust Agreement; NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the parties hereto do hereby agree as follows: ARTICLE 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 Notes 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 Notes. "Book-Entry Notes" means the Notes registered in the time of the nominee of DTC, or any successor securities depository for the Notes, 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. "Cede & Co." means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Notes. "Closing Date"means October 16,2013. "Code" means the Internal Revenue Code of 1986. 79141949.4 2 "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 dissemination agent thereunder, 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 Notes, including, but not limited to, all printing and document preparation expenses in connection with this Trust Agreement, the Installment Purchase Agreement, the Notes and any preliminary official statement and final official statement pertaining to the Notes, rating agency fees, market study fees, legal fees and expenses of counsel with respect to the execution and delivery of the Notes, 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 Notes, to the extent such fees and expenses we 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. "Event of Default" shall have the meaning set forth in Section 6.01 of the Installment Purchase Agreement. "Government Obligations" means any of the following which are noncallable by the issuer thereof except to the extent not permitted by the laws of the State as an investment for the moneys to be invested therein at the time of investment: (i) (a) direct general obligations of the United States of America, (b)obligations the payment of the principal of and interest on which are unconditionally guaranteed as to the full and timely payment by the United States of America or (c)any fund or other pooling arrangement whose assets consist exclusively of the obligations listed in clause(a) or (b) of this clause(i) and which is rated at least "P-l"by Moody's; provided that, such obligations shall not include unit investment trusts or mutual fund obligations; (ii) advance refunded tax-exempt obligations that (a) are rated by Moody's and S&P, (b) are secured by obligations specified in clause (i), (c) are 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); 79141949.4 3 (iii) bonds, debentures or notes issued by any of the following federal agencies: Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation or Federal National Mortgage Association; provided, that such bonds, debentures or notes shall be the senior obligations of such agencies (including participation certificates) and 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 Payment" means the Installment Payment 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. "Letter of Representations"means the letter of the District delivered to and accepted by the Depository on or prior to the delivery of the Notes as Book-Entry Notes setting forth the basis on which the Depository serves as depository for such Book-Entry Notes, 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. "Maturity Date"means October 16, 2014. "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. "Notes" means the Orange County Sanitation District Revenue Refunding Certificates of Participation (Certificate Anticipation Notes), Series 2013A, also known as the Orange County 79141949.4 4 Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A, executed and delivered by the Trustee pursuant hereto. "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 Notes, means (subject to the provisions of Section 9.02 hereof) all Notes except(a)Notes previously canceled by the Trustee or delivered to the Trustee for cancellation, (b)Notes paid or deemed to have been paid within the meaning of Section 10.01 hereof, and (c)Notes in lieu of or in substitution for which other Notes 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 Note 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 Notes as securities depository. "Participating Underwriter" has the meaning ascribed thereto in the Continuing Disclosure Agreement. "Permitted Investments"means any of the following, except to the extent not permitted by the laws of the State as an investment for the moneys to be invested therein at the time of investment: (1) Government Obligations; (2) Bonds, debentures, notes, participation certificates or other evidences of indebtedness issued, or the principal of and interest on which are unconditionally guaranteed, by the Federal Intermediate Credit Bank, the Federal Home Loan Bank System, the Government National Mortgage Association or any other agency or instrumentality of or corporation wholly owned by the United States of America when such obligations are backed by the full faith and credit of the United States for the full and timely payment of principal and interest; (3) Obligations of any state of the United States or any political subdivision thereof, which at the time of investment are rated "Aa3" or higher by Moody's and "AA-"or higher by S&P; or which are rated by Moody's "VMIGI" or better and by S&P "A-1+" or better with respect to commercial paper, or `VMIGI" and 11SP-1", 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 79141949.4 5 "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 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 me 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, 79141949A 6 (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); (11) Deposits with the Local Agency Investment Fund of the State, as may otherwise be permitted by law; and (12) Shares in the Blackrock T-Fund. "Person" means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. "Principal Account" means the account by that name within the Installment Payment Fund established in accordance with Section 5.02 hereof. "Principal Office" means the Trustee's principal corporate trust office in Los Angeles, California. "Prior Notes"has the meaning ascribed thereto in the recitals hereto. "Prior Notes Trustee"means Union Bank,N.A., as trustee for the Prior Notes. "Record Date" means, with respect to the interest payable on the Maturity Date, the 15'b day of such calendar month. "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. "Tax Certificate" means the Tax Certificate executed by the District at the time of execution and delivery of the Notes relating to the requirements of section 148 of the Code, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. 09141949.4 7 "Trust Agreement" means this Trust Agreement, dated as of October 1, 2013, 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 Union Bank, N.A., a national banking association duly organized and existing under the laws of the United States of America, or any other bank or trust company which may at any time be substituted in its place as provided in Section 10.02 hereof. "Written Certificate"and"Written Request'mean(a)with respect to the Corporation, a written certificate or written request, respectively, signed in the name of the Corporation by an Authorized Corporation Representative, and (b)with respect to the District, a written certificate or written request, respectively, signed in the name of the District by an Authorized District Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. Section 1.02. Definitions in Installment Purchase Agreement. Except as otherwise herein defined and unless the context otherwise requires, the terms defined in the Installment Purchase Agreement shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein have the meanings defined therein, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined therein. With respect to any defined term which is given a different meaning under this Trust Agreement than under the Installment Purchase Agreement, as used herein it shall have the meaning given herein. Section 1.03. Equal Security. In consideration of the acceptance of the Notes 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 Notes which may be executed and delivered hereunder, subject to each of the agreements, conditions, covenants and terns 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 Notes over any other Notes 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. 79141949.4 8 ARTICLE II TERMS AND CONDITIONS OF NOTES Section 2.01. Preparation and Delivery of Notes. The Trustee is hereby authorized, upon the Written Request of the District, to execute and deliver the Notes in the aggregate principal amount of $[Par Amount], evidencing the aggregate principal amount of the Installment Payment and each evidencing a direct, fractional undivided interest in the Installment Payment, and the interest thereon. The Installment Payment evidenced by each Note shall constitute the principal evidenced thereby and the interest on such Installment Payment shall constitute the interest evidenced thereby. The Notes shall be numbered,with or without prefixes, as directed by the Trustee. Section 2.02. Denomination. Medium and Datin¢ of Notes. The Notes shall be designated as the "Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A" and shall be prepared in the form of fully registered Notes, without coupons, in Authorized Denominations and shall be payable in lawful money of the United States of America. The Notes shall be dated the Closing Date and shall evidence interest accruing from the Closing Date until the Maturity Date. Section 2.03. Payment Date of Notes; Interest Computation. Except as otherwise provided in the Letter of Representations, interest and principal evidenced by the Notes shall become due and payable on the Maturity Date. Interest evidenced by the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Except as otherwise provided in the Letter of Representations, payment of interest evidenced by the Notes shall be made to the Owners thereof(as determined at the close of business on the Record Date next preceding the Maturity Date or any other date fixed for payment) 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 famished in writing to the Trustee by each such Owner. Except as otherwise provided in the Letter of Representations, payment of principal evidenced by the Notes, on the Maturity Date, shall be made only upon presentation and surrender of the Notes at the Principal Office. Section 2.04. Form of Notes. The Notes 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 Notes and Replacement Notes. The Notes shall be executed by the Trustee by the manual signature of an authorized signatory of the Trustee. The Trustee shall deliver replacement Notes in the manner and as contemplated by this Article. Such replacement Notes, shall be executed as herein provided and shall be in Authorized Denominations. Section 2.06. Transfer and Payment of Notes; Exchange of Notes. Each Note 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 Note for cancellation accompanied by delivery of 79141949.4 9 a duly executed written instrument of transfer in a form acceptable to the Trustee. The Trustee may treat the Owner of any Note as the absolute owner of such Note for all purposes, whether or not the principal or interest evidenced by such Note 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 Note shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by such Note to the extent of the sum or sums so paid. Whenever any Note shall be surrendered for transfer, the Trustee shall execute and deliver a new Note or Notes evidencing principal in the same aggregate amount. 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 Note may be exchanged at the Principal Office for Notes evidencing principal in a like aggregate principal amount in such Authorized Denominations as the Owner thereof may request. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. Section 2.07. Note Reeistration Books. The Trustee shall keep at its Principal Office sufficient books for the registration and transfer of the Notes, 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 Notes on such books as hereinabove provided. Section 2.08. Reserved. Section 2.09. Notes Mutilated, Lost. Destroyed or Stolen. If any Note shall become mutilated, the Trustee, at the expense of the Owner thereof, shall execute and deliver a new Note evidencing a like principal amount and number in exchange and substitution for the Note so mutilated, but only upon surrender to the Trustee of the Note so mutilated. Every mutilated Note so surrendered to the Trustee shall be canceled by it. If any Note 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 Note evidencing a like principal amount, numbered as the Trustee shall determine, in lieu of and in substitution for the Note so lost, destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Note executed and delivered by it under this Section and of the expenses which may be incurred by it under this Section. Any Note executed and delivered under the provisions of this Section in lieu of any Note alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Notes executed and delivered hereunder, and the Trustee shall not be required to treat both the original Note and any replacement Note as being Outstanding for the purpose of determining the amount of Notes which may be executed and delivered hereunder or for the purpose of determining any percentage of Notes Outstanding hereunder, but both the original and replacement Note shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of executing and delivering a new Note for a Note which has been lost, 79141949.4 10 destroyed or stolen and which evidences principal that is then payable, the Trustee may make payment of such Note to the Owner thereof if so instructed by the District. Whenever in this Trust Agreement provision is made for the cancellation by the Trustee of any Notes,the Trustee shall destroy such Notes and deliver a certificate of such destruction to the District. Section 2.10. Book-Entry System. (a) The Notes shall be initially executed and delivered as Book-Entry Notes, and the Notes shall be in the form of a separate single fully registered Note. Upon initial execution and delivery of the Notes, the ownership of each Note shall be registered in the registration books maintained by the Trustee in the name of the Nominee, as nominee of the Depository. Payment of principal or interest evidenced by any Book-Entry Note registered in the name of the Nominee shall be made on the Maturity 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 Notes, 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 Notes. 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 Notes, (it) 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 Notes, (iii)the selection by the Depository and its Participants of the beneficial interests in Book-Entry Notes to be prepaid in the event Notes 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 or interest evidenced by Book-Entry Notes, 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 Note is registered in the registration books maintained by the Trustee as the absolute Owner of such Book-Entry Note for the purpose of payment of principal and interest evidenced by such Note, for the purpose of selecting any Notes, or portions thereof, to be prepaid, for the purpose of giving notices of matters with respect to such Note, for the purpose of registering transfers with respect to such Note, 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 and interest evidenced by the Notes 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 and interest evidenced 79141949.4 11 by the Notes 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 Note evidencing principal and interest evidenced by the Notes. 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 Date,the word Nominee in this Trust Agreement shall refer to such nominee of the Depository. (f) To qualify the Book-Entry Notes 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 Notes 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 Notes 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 Notes and that such Notes 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 Notes. In such event, the Trustee shall transfer and exchange certificated Notes as requested by the Depository and any other Owners in appropriate amounts. If(i)the Depository determines not to continue to act as securities depository for Book-Entry Notes, 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 Note for such Book-Entry Notes, 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 Notes 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 Notes 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 Notes to any Participant having Book-Entry Notes credited to its account with the Depository, and (ii)to arrange for another securities depository to maintain custody of certificates evidencing the Book- Entry Notes. (h) Notwithstanding any other provision of this Trust Agreement to the contrary, if DTC is the sole Owner of the Notes, so long as any Book-Entry Note is registered in the name of the Nominee, all payments of principal and interest evidenced by such Note and all notices with respect to such Note shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository. 09141949.4 12 (i) In connection with any notice or other communication to be provided to Owners pursuant to the Trust Agreement by the District, the Corporation or the Trustee, with respect to any consent or other action to be taken by Owners, the Trustee shall establish a record date for such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. Notice to the Depository shall be given only when DTC is the sole Owner of the Notes. ARTICLE III PROCEEDS OF NOTES Section 3.01. Delivery of Notes. The Trustee is hereby authorized to execute the Notes and deliver them to the original purchaser thereof upon receipt of a Written Request of the District and on receipt of the proceeds of sale of the Notes. Section 3.02. Deposit and Transfer of Proceeds of Notes. On the Closing Date, the Trustee shall transfer the net proceeds received by the Trustee from the sale of the Notes in the amount of$ to the Prior Notes Trustee for deposit in the Installment Payment Fund relating to the Prior Notes. In addition, on the Closing Date the Trustee shall deposit in the Costs of Issuance Fund the amount of$ received from the District as an equity contribution. 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 we 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 NO PREPAYMENT OF NOTES Section 4.01. No Prepayment. The Notes are not subject to prepayment prior to the Maturity Date. ARTICLE V ASSIGNMENT AND PLEDGE; FUNDS AND ACCOUNTS Section 5.01. Assignment and Pledge. The Corporation hereby transfers, conveys and assigns to the Trustee, for the benefit of the Owners, all of the Corporation's rights, title and interest in and to the Installment Purchase Agreement (excepting its rights to indemnification thereunder), including the right to receive the Installment Payment, and the interest thereon, from 09141949.4 13 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 of the Installment Payment, 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, fitle 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 the required Installment Payment and the interest thereon, is paid in full pursuant to the Installment Purchase Agreement and until the first date upon which the Notes are no longer Outstanding. The Trustee shall deposit in the Installment Payment Fund the Installment Payment, 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 the required Installment Payment, and the interest thereon, is paid in full pursuant to the Installment Purchase Agreement and until the first date upon which the Notes 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 or before the Maturity Date, shall deposit in the Interest Account that amount of moneys representing the interest on the Installment Payment coming due on such date. Moneys in the Interest Account shall be used by the Trustee for the purpose of paying the interest evidenced by the Notes when due and payable. (ii) Principal Account. The Trustee, on or before the Maturity Date, shall deposit in the Principal Account that amount of moneys representing the Installment Payment coming due on such date. Moneys in the Principal Account shall be used by the Trustee for the purpose of paying the principal evidenced by the Notes when due and payable. Section 5.03. 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. 79141949.4 14 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 (12) 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. 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 5.04. Brokerage Confirmations. The Trustee shall furnish the District periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the District. Upon the District's election, such statements will be delivered via the Trustee's online service and upon electing such service, paper statements will be provided only upon request The District waives the right to receive brokerage confirmations of security 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 Notes 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. 79141949.4 15 Section 6.02. Compliance with Installment Purchase Agreement, The Corporation and the District will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terms contained in the Installment Purchase Agreement required to be complied with, kept, observed and performed by them and, together with the Trustee, will enforce the Installment Purchase Agreement against the other party thereto in accordance with its terms. Section 6.03. Compliance with Master Agreement. The Corporation and the District will faithfully comply with, keep, observe and perform all the agreements, conditions, covenants and terns contained in the Master Agreement required to be complied with, kept, observed and performed by them and,together with the Trustee,will enforce the Master Agreement against the other party thereto in accordance with its terms. Section 6.04. Observance of Laws and Regulations. The Corporation and the District will faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed by any law of the 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 Payment, or the interest thereon, or involving the rights of the Trustee or any Owner hereunder; provided, however, that the Trustee or any Owner at its or his election may appear in and defend any such action, suit or other proceeding. Section 6.07. Accounting Records and Statements. The Trustee will keep proper accounting records in which complete and correct entries shall be made of all transactions made by the Trustee relating to the receipt, deposit and disbursement of the Installment Payment, 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). 79141949.4 16 Section 6.08. Tax Covenants. (a) Special Definitions. When used in this Section, the following terns 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 and reasonably satisfactory to and approved by the Trustee. "Computation Date" has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Computation Period' means, initially, that period commencing on the date of the execution and delivery of the Notes 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 and reasonably satisfactory to and approved by the Trustee. "Prior Issue" shall refer to the Prior Notes (but in the case of any of the foregoing executed and delivered for multiple purposes, only to the portion thereof allocable pursuant to section 1.148-9(h)(4) of the Tax Regulations to other than refunding purposes). "Proceeds," with respect to an issue of governmental obligations, has the meaning set forth in has the meaning set forth in section 1.148-1(b) of the Tax Regulations (referring to sales, investment and transferred proceeds,but not replacement proceeds). "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 Notes has the meaning set forth in section 1.148-4 of the Tax Regulations. 79141949.4 17 (b) Exclusion of Interest from Gross Income. The District will take all actions necessary to establish and maintain the exclusion pursuant to section 103(a) of the Code of interest on the Notes 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 Notes 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 Note 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 Note from the gross income of the owner thereof, the District shall comply with this covenant and each of the specific covenants in this Section. (c) No Private Use or Private Payments. Except as would not cause any Note 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 Notes 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 Notes and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds or the Gross Proceeds of any Prior Issue in any activity carried on by any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (ii) does not directly or indirectly impose or accept any charge or other payment by any person or entity who is treated as using Gross Proceeds of the Notes or of any Prior Issue, or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds, other than taxes of general application within the jurisdiction of the District or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except as would not cause any Note 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 Notes 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 79141949.4 18 Gross Proceeds, are otherwise transferred in a transaction that is the economic equivalent of a loan. For purposes of this covenant, the District will treat any transaction constituting a loan of Gross Proceeds of any of the Prior Issues as resulting in a loan of Gross Proceeds of the Notes. (e) Not to Invest at Higher Yield. Except as would not cause any Note 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 Note to be retired, directly or indirectly invest Gross Proceeds of the Notes in any Investment, if as a result of that investment the yield of any Investment acquired with Gross Proceeds of the Notes, whether then held or previously disposed of, would materially exceed the yield of the Notes within the meaning of said section 148. (f) Not Federally Guaranteed. Except to the extent such action or failure to act would not, pursuant to section 149(b) of the Code and the Tax Regulations and rulings thereunder, adversely affect the exclusion pursuant to section 103(a) of interest on the Notes 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 Note to be "federally guaranteed"within the meaning of section 149(b)of the Code and the Tax Regulations and rulings thereunder. (g) Information Reoort. The District will timely file any information necessary to the exclusion pursuant to section 103(a) of the Code of interest on the Notes required by section 149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary of the Treasury may prescribe. (h) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Tax Regulations and rulings thereunder, the District will not at any time prior to the final cancellation of the last of the Notes to be retired, enter into any transaction that reduces the amount required to be paid to the United States pursuant to section 148(f) of the Code because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the yield on the Notes not been relevant to either party. (i) Notes Satisfy Section 149(g). The District represents that none of the Prior Issue or the Notes 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 Notes other than for refunding purposes, (ii)(A) the District will not deliver the Notes unless on the date of the issuance of the Notes it reasonably expects that within the three-year period commencing on such date of issuance at least 85% of such spendable proceeds of the Notes will be expended for the governmental purpose of the Notes and (B) at no time will more than 50% of such spendable 79141949.4 19 proceeds of the Notes be invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more. 0) Elections. The District hereby directs and authorizes any Authorized Representative to make elections permitted or required pursuant to the provisions of the Code or the Tax Regulations, as such Authorized Representative (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Notes, in the Tax Certificate relating to the Notes or similar or other appropriate certificate, form or document. (k) Tax Certificate. The District agrees to execute and deliver in connection with the execution and delivery of the Notes 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 Notes 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. Continuine 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 Notes and upon being indemnified to its reasonable satisfaction, shall, or any Owner or Beneficial Owner of Notes may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. Section 6.10. Further Assurances. The District will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to carry out the purposes and intentions of this Trust Agreement and for preserving and protecting the rights and interests of the Owners. ARTICLE VII DEFAULT AND LIMITATIONS OF LIABILITY Section 7.01. Action upon Event of Default. An Event of Default under the Installment Purchase Agreement shall constitute an Event of Default hereunder and an Event of Default under the Master Agreement shall constitute an Event of Default hereunder. The Trustee may give notice, as assignee of the Corporation, of an Event of Default under the Installment Purchase Agreement to the District, and shall do so if directed to do so by the Owners of not less than 5%of the aggregate principal evidenced by Notes 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 Notes 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 79141949.4 20 any of the remedies granted to the Trustee under the Master Agreement, and (c)take whatever action at law or in equity may appear necessary or desirable to enforce its rights pursuant to this Trust Agreement, the Installment Purchase Agreement or the Master Agreement or to protect and enforce any of the rights vested in the Trustee or the Owners by this Trust Agreement, the Notes, the Installment Purchase Agreement or the Master Agreement, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 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 cant' out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee; or (c) by suit in equity upon the happening of any Event of Default hereunder to require the Corporation and the District to account as the trustee of an express trust Section 7.03. Non-Waiver. A waiver of any default or breach of duty or contract by the Trustee or the Owners shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee or the Owners to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee or the Owners by law or by this Article may be enforced and exercised from time to time and as often 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 79141949.4 21 otherwise, shall not prevent the concurrent or subsequent assertion or employment of any other appropriate right or remedy. Section 7.05. Application of Amounts After Default. All damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under this Article shall be deposited into the Installment Payment Fund and as soon as practicable thereafter applied: (a) to the payment of all amounts due the Trustee under Section 8.03 hereof; (b) unless the unpaid Installment Payment, 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 Notes, in respect of which, or for the benefit of which, money has been collected (other than Notes 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 Notes due and payable; and (ii) to the payment of all amounts then due for principal evidenced by the Notes, in respect of which, or for the benefit of which, money has been collected (other than Notes 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 Notes due and payable. (c) if the unpaid Installment Payment, and the interest thereon, shall have become, and shall remain, immediately due and payable pursuant to the Master Agreement, to the payment of all amounts then due for principal and interest evidenced by the Notes 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 Note over any other Note, to the persons entitled thereto without any discrimination or preference. Section 7.06. Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Trust Agreement or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes 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 Notes 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 Notes then 79141949.4 22 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 Notes then Outstanding; it being understood and intended that no one or more Owners of Notes 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 Notes, 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 Notes. Section 7.08. No Liability by the Corporation to the Owner. Except as expressly provided herein, the Corporation shall not have any obligation or liability to the Owners with respect to the payment when due of the Installment Payment, 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 Payment, and the interest thereon, and the performance of the other agreements and covenants required to be performed by it contained in the Installment Purchase Agreement,the Master Agreement or herein, the District shall not have any obligation or liability to the Owners with respect to this Trust Agreement or the preparation, execution, delivery or transfer of the Notes or the disbursement of the Installment Payment, 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 Payment, 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 Payment, and the interest thereon, to prepare, execute, deliver and transfer the Notes 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 79141949.4 23 appointment and employment hereinabove referred to and accepts the rights and obligations of the Trustee provided herein, subject to the conditions and terms hereof Other than when an Event of Default hereunder has occurred and is continuing, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Trust Agreement, and no implied covenants or obligations shall be read into this Trust Agreement against the Trustee. In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. Section 8.02. Removal and Resignation of the Trustee. The Corporation and the District may, by an instrument in writing, remove the Trustee initially a party hereto and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time (a)requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority of the aggregate principal evidenced by the Notes 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 paragraph, and shall appoint a successor Trustee. The Trustee shall be a bank having trust powers or a trust company in good standing in or incorporated under the laws of the United States or any state thereof, having (or if such bank or trust company is a member of a bank holding company system, its parent bank holding company shall have) a combined capital and surplus of at least $75,000,000, and be subject to supervision or examination by federal or state banking authorities. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee may at any time resign by giving written notice of such resignation to the Corporation and the District and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the registration books maintained by the Trustee. Upon receiving such notice of resignation, the Corporation and the District shall promptly appoint a successor Trustee by an 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 79141949.4 24 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, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Section 8.03. Compensation and Indemnification of the Trustee. The District shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and expenditures (which shall not include "overhead expenses" except as such expenses are included as a component of the Trustee's stated annual fees or disclosed transaction fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys retained by the Trustee, employed by it in the exercise and performance of its rights and obligations hereunder; provided, however, that the Trustee shall not have any lien for such compensation or reimbursement against any moneys held by it in any of the funds or accounts established hereunder. The Trustee may take whatever legal actions are lawfully available to it directly against the Corporation or the District. Except as otherwise expressly provided herein, no provision of this Trust Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder. The District, to the extent permitted by law, agrees to indemnify and save the Trustee, its directors, officers, employees and agents harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder, including but not limited to costs and expenses incurred in defending against any claim or liability, which are not due to its negligence or willful misconduct. Section 8.04. Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and 79141949.4 25 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 Notes 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 Notes 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 Notes. 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 Notes then Outstanding. Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the District or a Written Certificate of the Corporation, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable. The Trustee may buy, sell, own, hold and deal in any of the Notes 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 cue; 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. 79141949.4 26 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 Notes 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 Notes then Outstanding,provided the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action. ARTICLE IX AMENDMENT OF OR SUPPLEMENT TO TRUST AGREEMENT Section 9.01. Amendment or Supplement. (a) This Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee hereunder may be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding when the prior written consents of the Owners of a majority of the aggregate principal evidenced by the Notes then Outstanding, exclusive of Notes disqualified as provided in Section 9.02 hereof, we filed with the Trustee. No such amendment or supplement shall (i) extend the stated Maturity Date of any Note or reduce the rate of interest evidenced thereby or extend the time of payment of such interest or reduce the amount of principal evidenced thereby, (ii)reduce the percentage of Owners whose consent is required for the execution of any amendment hereof or supplement hereto without the prior written consent of the Owners of all Notes 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 Notes then Outstanding. (b) This Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution, without the written consents of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the agreements, conditions, covenants and terms required by the Corporation or the District to be observed or performed herein other agreements, conditions, covenants and 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; 79141949.4 27 (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest evidenced by the Notes; or (iv) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners. Section 9.02. Disqualified Notes. Notes owned or held by or for the account of the District (but excluding Notes 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 Notes 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 Notes as to which such consent is given are disqualified as provided in this Section. Section 9.03. Endorsement or Replacement of Notes After Amendment or Supplement. After the effective date of any action taken as hereinabove provided in this Article, the Trustee may determine that the Notes 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 Note and presentation of such Note for such purpose at the Principal Office a suitable notation as to such action shall be made on such Note. If the Trustee shall receive an Opinion of Counsel advising that new Notes modified to conform to such action are necessary, modified Notes shall be prepared, and in that case upon demand of the Owner of any Outstanding Notes such new Notes shall be exchanged at the Principal Office without cost to each Owner for Notes then Outstanding upon surrender of such Outstanding Notes. 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 Notes owned by such Owner,provided that due notation thereof is made on such Notes. ARTICLE X DEFEASANCE Section 10.01. Discharge of Notes 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 Notes 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 Note 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 and interest evidenced by such Note shall have been paid or when there shall be on deposit with the Trustee, moneys, or Government Obligations, or any combination thereof,the principal of and the interest 79141949.4 28 on which when due, and without any reinvestment thereof, will provide moneys which shall be sufficient to pay when due the principal and interest evidenced by such Note and due and to become due on or prior to the Maturity Date, and if the Maturity Date will not occur, and said Note is not to be prepaid, within the next succeeding 60 days, the District shall have given the Trustee irrevocable instructions to give notice, as soon as practicable to the Owner of such Note, stating that the deposit of moneys or Government Obligations required by this subsection has been made with the Trustee and that such Note, or portion thereof, is deemed to have been paid in accordance with this Section and stating such Maturity Date upon which moneys are to be available for the payment of the principal and interest evidenced by said Note, or portion thereof. Neither the moneys nor the Government Obligations deposited with the Trustee pursuant to this Section nor principal or interest payments on any such Government Obligations shall be withdrawn or used for any purpose other than, and shall be held in trust for and pledged to, the payment of the principal and interest evidenced by said Note, or portions thereof. If payment of less than all of the Notes 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 Notes, or portions thereof in the principal amounts designated to the Trustee by the District. (c) After the payment of all the interest and principal evidenced by all Outstanding Notes and all other amounts due hereunder and under the Installment Purchase Agreement as provided in this Section, the Trustee shall execute and deliver to the Corporation and the District all such instruments as may be necessary or desirable to evidence the discharge and satisfaction of this Trust Agreement, the Trustee shall pay over or deliver to the District all moneys or securities held by it pursuant hereto which are not required for the payment of the interest and principal evidenced by such Notes and all other amounts due hereunder and under the Installment Purchase Agreement. (d) Prior to any defeasance becoming effective under this Article, the District shall cause to be delivered (i)an executed copy of a report, addressed to the Trustee and the District, in form and in substance acceptable to the Trustee and the District, of a nationally recognized certified public accountant, or firm of such accountants, verifying that the Government Obligations and cash, if any, satisfy the requirements of 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 Notes 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 Notes 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 Notes which remain unclaimed for two years after the date when such interest or principal evidenced by such Notes 09141949.4 29 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 Notes 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 Notes. 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 Notes 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 Note shall bind all future Owners of such Note 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. 79141949.4 30 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 Notes, but nothing contained herein shall relieve any member, officer or employee of the District or the Corporation from the performance of any official duty provided by any applicable provisions of law, by the Installment Purchase Agreement or hereby. Section 11.05. Reserved. Section 11.06. Content of Written 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 term 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 Notes 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. 79141949.4 31 Section 11.08. Article and Section Headings. Gender and References. The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to "Articles," "Sections," subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words "hereby," "herein," "hereof," "hereto," "herewith," "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section, subsection or clause thereof. Section 11.09. Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Corporation, the District or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Notes, 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 Notes 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 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 79141949.4 32 If to the Trustee: Union Bank,N.A. 120 South San Pedro Street, Suite 400 Los Angeles, California 90012 Attention: Alison Braunstein Telephone: (213) 972-5674 Facsimile: (213) 972-5694 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, 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. 79141949.4 33 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 UNION BANK,N.A., as Trustee By: Authorized Officer 79141949.4 34 EXHIBIT A FORM OF NOTE No. R-1 [Par Amount] Unless this Note is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Note 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 REVENUE REFUNDING CERTIFICATES OF PARTICIPATION, SERIES 2013A (CERTIFICATE ANTICIPATION NOTE) DATED DATE INTEREST RATE MATURITY DATE CUSIP % 2014 REGISTERED OWNER: CEDE&CO. PRINCIPAL AMOUNT: THIS IS TO CERTIFY that the Registered Owner of this Orange County Sanitation District Revenue Refunding Certificate of Participation, Series 2013A (Certificate Anticipation Note) (this "Note"), as identified above, is the owner of a direct, fractional undivided interest in certain installment payments ("Installment Payment'), and the interest thereon, payable under and pursuant to the Installment Purchase Agreement, dated as of October 1, 2013 (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 Payment, and the interest thereon, have been assigned without recourse by the Corporation to Union Bank, N.A., 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 October 1, 2013 (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. 79141949.4 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 Payment and the interest thereon, will be incurred and secured. This Note is one of the duly authorized Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A(the "Notes") evidencing principal in the aggregate amount of [Par Amount], executed and delivered pursuant to the terms of the Trust Agreement. The Notes evidence direct, fractional undivided interests in the Installment Payment, and the interest thereon, payable under the Installment Purchase Agreement. The Notes 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. The Installment Payment, 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 Notes evidence direct, fractional undivided interests in the Installment Payment, and the interest thereon, paid by the District pursuant to the Installment Purchase Agreement. The obligation of the District to pay the Installment Payment 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, from Net Revenues, and other lawfully available funds of the District, 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, shall be subject to the provisions of the Master Agreement, and shall be afforded all of the advantages, benefits, interests and security afforded Senior Obligations pursuant to the Master Agreement. The Installment Purchase Agreement is payable on a parity with the other existing Senior Obligation. The District may at any time incur Senior Obligations in addition to existing Senior Obligations and the Installment Purchase Agreement payable from Net Revenues as provided in the Master Agreement on a parity with all other Senior Obligations theretofore incurred, but only subject to the conditions and upon compliance with the procedures set forth in the Master Agreement. The obligation of the District to pay the Installment Payment 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, from Net Revenues and other lawfully available funds of the District, as provided 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 79141949.4 A-2 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 Payment, 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. 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 terns under which the District's obligation to pay the Installment Payment, and the interest thereon, is incurred, the Notes we executed and delivered, the provisions with regard to the nature and extent of the Net Revenues and other lawfully available funds of the District, and the rights of the Owners of the Notes. 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 Notes, to all the provisions of which the Owner of this Note, by acceptance hereof,agrees and consents. The Registered Owner of this Note is entitled to receive, subject to the terms of the Trust Agreement on the Maturity Date set forth above, upon presentation and surrender of this Note 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 Payment coming due on the Maturity Date, and to receive on the Maturity 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 such Principal Amount is paid in full, evidencing the Registered Owner's interest in the interest evidenced by the Installment Payment coming due on such date. Payments of interest evidenced by the Notes shall be made to the Owners thereof (as determined at the close of business on the Record Date next preceding the Maturity Date or any other date fixed for payment) 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 evidenced by the Notes, on the Maturity Date, shall be made only upon presentation and surrender of the Notes at the Principal Office. All such amounts me payable in lawful money of the United States of America. The Notes are authorized to be executed and delivered in the form of fully registered notes in denominations of$5,000 or any integral multiple thereof. This Note may be transferred or exchanged by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office,but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement. The Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, whether or not the principal or interest evidenced by this Note shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the 79141949.4 A-3 principal and interest evidenced by this Note shall be made only to such Registered Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by this Note to the extent of the sum or sums so paid. The Notes are not subject to prepayment prior to the Maturity Date. 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 Notes then outstanding, exclusive of Notes disqualified as provided under the Trust Agreement, are filed with the Trustee. No such supplement or amendment shall (a)extend the stated Maturity Date or reduce the rate of interest evidenced thereby or extend the time of payment of such interest or reduce the amount of principal evidenced thereby, (b)reduce the percentage of Owners whose consent is required for the execution of any amendment of or supplement to the Trust Agreement without the prior written consent of the Owners of all Notes 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 Notes then outstanding. To the extent and in the manner permitted by the terms of the Trust Agreement, the Trust Agreement and the rights and obligations of the Corporation, the District, the Owners and the Trustee under the Trust Agreement may also be amended or supplemented at any time by an amendment or supplement thereto which shall become binding upon execution, without the written consents of any Owners,but only to the extent permitted by law and only(a)to add to the agreements, conditions, covenants and terms required by the Corporation or the District to be observed or performed under the Trust Agreement other agreements, conditions, covenants and terms thereafter to be observed or performed by the Corporation or the District, or to surrender any right or power reserved therein to or conferred therein on the Corporation or the District, and which in either case shall not adversely affect the rights or interests of the Owners, (b)to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained in the Trust Agreement or in regard to questions arising thereunder which the Corporation or the District may deem desirable or necessary and not inconsistent therewith, (c)to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest evidenced by the Notes or (d) for any other reason, provided such amendment or supplement does not adversely affect the rights or interests of the Owners. THE DISTRICT HAS CERTIFIED that all acts, conditions and things required by the statutes of the State of California and by the Trust Agreement to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Note 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 Note. 79141949.4 A-4 IN WITNESS WHEREOF, this Note has been executed by the manual signature of an authorized signatory of the Trustee as of the date set forth below. Date: , 2013 UNION BANK,N.A., as Trustee By: Authorized Officer 79141949.4 A-5 ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned Note 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 Note in every particular, without alteration or enlargement or any change whatsoever. Tax I.D. #: Signature Guaranteed: Now: Signature(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 ofthe within Note in every particular without alteration or enlargement or any change whatsoever. 79141949A A-6 NRF DRAFT 08/27/13 INSTALLMENT PURCHASE AGREEMENT by and between ORANGE COUNTY SANITATION DISTRICT and ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION Dated as of October 1,2013 Relating to $[Paz Amount] Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A ]91419453 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........................................................................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 Payment.............................................................................4 Section3.03. Reserved...............................................................................................4 Section 3.04. Obligation Absolute............................................................................. 5 Section 3.05. Nature of Agreement............................................................................ 5 ARTICLE IV NO PREPAYMENT OF INSTALLMENT PAYMENTS; DISCHARGE................................................................................................... 5 Section 4.01. No Prepayment of Installment Payment.............................................. 5 Section4.02. Discharge of Obligations..................................................................... 5 ARTICLE COVENANTS ................................................................................................. 5 Section 5.01. Compliance with Master Agreement................................................... 5 Section 5.02. Compliance with Installment Purchase Agreement............................. 5 Section 5.03. Protection of Security and Rights........................................................6 Section 5.04. Indemnification of Corporation...........................................................6 Section 5.05. Further Assurances...............................................................................6 ARTICLE VI EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION.............................................................................................6 Section 6.01. Events of Default.................................................................................6 Section 6.02. Remedies on Default............................................................................7 Section6.03. Non-Waiver..........................................................................................7 Section 6.04. Remedies Not Exclusive...................................................................... 8 79141945.3 _i_ TABLE OF CONTENTS (continued) Page ARTICLE VII AMENDMENTS ............................................................................................. 8 Section7.01. Amendments........................................................................................ 8 ARTICLE VIII MISCELLANEOUS........................................................................................9 Section 8.01. Liability of District Limited.................................................................9 Section 8.02. Limitation of Rights.............................................................................9 Section8.03. Assignment ..........................................................................................9 Section8.04. Notices............................................................................................... 10 Section 8.05. Successor Is Deemed Included in all References to Predecessor...... 10 Section 8.06. Waiver of Personal Liability.............................................................. 10 Section 8.07. Article and Section Headings, Gender and References..................... 11 Section 8.08. Partial Invalidity................................................................................. 11 Section 8.09. Governing Law.................................................................................. 11 Section 8.10. Execution in Counterparts.................................................................. 11 EXHIBIT A - DESCRIPTION OF PROJECT..........................................................................A-I 79141945.3 INSTALLMENT PURCHASE AGREEMENT THIS INSTALLMENT PURCHASE AGREEMENT (this "Installment Purchase Agreement"), dated as of October 1, 2013, 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 finance the acquisition, construction and installation of certain improvements to its wastewater system (the "Prior Project') the District caused the execution and delivery of $131,700,000 in aggregate principal amount of Orange County Sanitation District Revenue Refunding Certificates Anticipation Notes, Series 2012C, of which $131,700,000 in principal amount is currently outstanding(the"Prior Notes"); WHEREAS, the District desires to pay all of the Prior Notes by paying at maturity all of the principal component of the installment payment relating to the Prior Notes (the "Prior Installment Payment"), and the interest thereon; WHEREAS,to provide the funds necessary to pay the Prior Installment Payment and the interest thereon to be so paid, the District and the Corporation desire that the Corporation purchase the Prior Project from the District and the District sell the Prior Project to the Corporation, and that the District then purchase the Prior Project from the Corporation and the Corporation sell the Prior Project to the District, for the installment payment (the "Installment Payment') to be made by the District, pursuant to a new installment purchase agreement (the "Installment Purchase Agreement"),and the Corporation and the District have agreed to finance such prepayment by causing the execution and delivery of$[Par Amount] in aggregate principal amount of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes") evidencing direct, fractional undivided interests in the Installment Payment and the interest thereon, to be made by the District pursuant to the 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 Payment, 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 Union Bank, N.A., as trustee (the "Trustee"); ]9141945.3 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 Notes, evidencing direct, undivided fractional interests in the Installment Payment, and the interest thereon,payable hereunder; WHEREAS, a portion of the proceeds of the Notes, together with other available funds, will be used to prepay the Prior Installment Payment; 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 October 16,2013. "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 Payment" means the Installment Payment required to be made by the District pursuant to Section 3.02 hereof. "Installment Payment Date"means October 16, 2014. 79141945.3 2 "Installment Purchase Agreement" means this Installment Purchase Agreement, dated as of October 1, 2013, 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. "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. "Notes" means the Orange County Sanitation District Revenue Refunding Certificates of Participation (Certificate Anticipation Notes), Series 2013A, also known as the Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A, executed and delivered by the Trustee pursuant to the Trust Agreement. "Person" means an individual, corporation, limited liability company, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. "Principal Office" means the Trustee's principal corporate trust office in Los Angeles, California. "Project" means the improvements to the Wastewater System, as described in Exhibit A hereto. "Trust Agreement" means the Trust Agreement, dated as of October 1, 2013, 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 Union Bank, N.A., 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. 79141945.3 3 ARTICLE II PURCHASE OF PROJECT BY,AND SALE THEREOF TO, THE CORPORATION; PAYMENT 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, 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 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 Project, the amount of$ which amount shall be paid from the net proceeds of the Notes. ARTICLE III 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 Pavment. The District shall pay to the Corporation, from Net Revenues and other lawfully available funds of the District,the purchase price of the Project in a single Installment Payment, with interest thereon, as provided herein. The Installment Payment shall be in the aggregate principal amount of$[Par Amount], and shall be payable on or before the Installment Payment Date. The Installment Payment shall accrue interest from the Closing Date, at the rate of % per annum, payable on the Installment Payment Date. Such interest shall accrue on the basis of a 360-day year consisting of twelve 30-day months. The Installment Payment, and the payment of interest thereon, shall be deposited with the Trustee, as assignee of the Corporation, no later than the Installment Payment Date, in lawful money of the United States of America, in immediately available funds. If and to the extent that, on any such date, there are amounts on deposit in the Installment Payment Fund established under the Trust Agreement, or in any of the accounts therein, which amounts are not being held for the payment of specific Notes, such amounts shall be credited against the Installment Payment, or payment of interest thereon, as applicable, due on such date. Section 3.03. Reserved. 79141945.3 4 Section 3.04. Obligation Absolute. The obligation of the District to make the Installment Payment, and payment of interest thereon, and other payments required to be made by it under this Article, from Net Revenues and other lawfully available funds of the District, is absolute and unconditional, and until such time as the Installment Payment, payments of interest thereon, and such other payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to Article IV), the District shall not discontinue or suspend any Installment Payment, 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 Payment, 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. ARTICLE IV NO PREPAYMENT OF INSTALLMENT PAYMENTS; DISCHARGE Section 4.01. No Prepavment of Installment Payment. The Installment Payment shall not be subject to prepayment prior to the Installment Payment Date. Section 4.02. Discharee of Obligations. If the Installment Payment, and the interest thereon, shall be paid as and when due in accordance with the terms hereof, and if all Notes 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 Aereement. The District will faithfully observe and perform all the agreements, conditions, covenants and terns contained in the Master Agreement required to be observed and performed by it and will not cause, suffer or permit any default to occur thereunder. Section 5.02. Compliance with Installment Purchase Aereement. The District will punctually pay the Installment Payment, and interest thereon, and other payments required to be made by it hereunder in strict conformity with the terms hereof, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein required to be observed and performed by it, will not cause, suffer or permit any default to occur hereunder and 79141945.3 5 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, stonn, 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 Payment, 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 Notes, 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 Notes. 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 confinning unto the Corporation, or unto the Trustee, as assignee of the Corporation, the rights and benefits provided herein to the Corporation, or to the Trustee, as assignee of the Corporation. ARTICLE VI EVENTS OF DEFAULT AND REMEDIES OF THE CORPORATION Section 6.01. Events of Default. The following shall be Events of Default under this Installment Purchase Agreement, and "Event of Default' shall mean any one or more of the following events: (a) if default shall be made by the District in the due and punctual payment of or on account of any Senior Obligation as the same shall become due and payable; (b) if default shall be made by the District in the performance of any of the agreements or covenants required herein, in the Trust Agreement or in the Master Agreement to be performed by it (other than as specified in (a) above), and such default shall have continued 79141945.3 6 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 Payment, and the interest thereon, to the Trustee, as assignee of the Corporation, at the respective due dates from the Net Revenues and the other funds herein committed for such payment, or shall affect or impair the right of the Trustee, as assignee of the Corporation, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein. A waiver of any default or breach of duty or contract by the Trustee, as assignee of the Corporation, shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee, as assignee of the Corporation,to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be 79141945.3 7 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 Tmstee, 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 Notes 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 Note, or (it) reduce the percentage of Owners of the Notes whose consent is required to effect any such amendment or modification,without the prior written consent of the Owners of all Notes 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 Notes, but only to the extent permitted by law and only for any one or more of the following purposes: (i) to add to the agreements, conditions, covenants and terms required by the District, the Corporation or the Trustee, as assignee of the Corporation, to be observed or performed herein other agreements, conditions, covenants and terms thereafter to be observed or performed by the District,the Corporation or the Trustee, as assignee of the Corporation, or to surrender any right or power reserved herein to or conferred herein on the District, the Corporation or the Trustee,as assignee of the Corporation; (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in 79141945.3 8 regard to questions arising hereunder which the District,the Corporation or the Trustee, as assignee of the Corporation, may deem desirable or necessary and not inconsistent herewith; (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of interest on the Installment Payment; and (iv) to make such other changes herein or modifications hereto as the District, the Corporation or the Trustee, as assignee of the Corporation, may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners of the Notes. 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 Payment, 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 Payment, 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, 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 Payment, 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 79141945.3 9 indemnification hereunder), including the right to receive Installment Payment, and the interest thereon, from the District,pursuant to the Trust Agreement. Section 8.04. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: 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: Union Bank,N.A. 120 South San Pedro Street, Suite 400 Los Angeles, California 90012 Attention: Allison Braunstein 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 Payment, 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. 791419453 10 Section 8.07. Article and Section Headings, Gender and References. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof, and words of any gender shall be deemed and construed to include all genders. All references herein to "Articles," "Sections" and other subsections or clauses are to the corresponding articles, sections, subsections or clauses hereof; and the words "hereby,""herein," "hereof," "hereto," "herewith' and other words of similar import refer to this Installment Purchase Agreement as a whole and not to any particular Article, Section, subdivision or clause hereof. 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. Governina 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. 791419453 11 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 991419453 12 EXHIBIT A DESCRIPTION OF PROJECT The Project includes in general the acquisition, construction and installation of certain improvements to the wastewater collection,treatment and disposal facilities of the District and in particular including, without limitation, the financing of improvements to the Wastewater System including particularly, but without limitation, the District's collection system, two wastewater treatment plants, and Ocean Outfall, and further as follows: the acquisition, construction, installation, rehabilitation, replacement, or repair of the North County Yard, Bushard Trunk Sewer, Gisler-Redhill Trunk Sewer, Magnolia Trunk Sewer, Bay Bridget Pump Station, Bitter Point Pump Station, Ellis Avenue Pumps Station, Rocky Point Pump Station, Headworks at Plant 2, Primary Clarifiers at Plant 1, Primary Treatment System at Plant 2 Secondary Treatment System at Plant 1, Activated Sludge at Plant 1, Trickling Filters at Plant 1 and 2; Sludge Digester at Plant 1, Sludge Dewatering at Plant 1 and 2, Truck Wash and Dewatering Beds at Plant 1, Primary sludge Feed System at Plant 2, Digester at Plant 2, Effluent Pump Station Annex, Groundwater Replenishment System, and Odor Control Facilities. 991419453 A-1 NRF DRAFT 08/27/13 CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement"), dated as of October 1, 2013, 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 Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes"), evidencing principal in the aggregate amount of$ , pursuant to a Trust Agreement, dated as of the date hereof(the "Trust Agreement"), by and among Union Bank, N.A., 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 Notes and in order to assist the underwriter of the Notes in complying with the Rule (as defined herein); NOW, THEREFORE, for and in consideration of the premises and of the mutual 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: "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 bttp://emma.msrb.org by the MSRB. "Listed Events" means any of the events listed in subsection (a) of Section 2 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. "Participating Underwriter" means the original underwriter of the Notes required to comply with the Rule in connection with the offering of the Notes. "Repository" means, until otherwise designated by the Securities and Exchange Commission, EMMA. "Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934,as the same may be amended from time to time. "SEC" shall mean the United States Securities and Exchange Commission. Section 2. Reuortina of Sianificant Events. (a) Pursuant to the provisions of this Section 2, the District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Notes, 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; (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 Notes; (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 2 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 2, the District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Notes, 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 name 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 Notes. (c) Whenever the District obtains knowledge of the occurrence of a Listed Event, described in subsection (b) of this Section (2), the District shall as soon as possible determine if such event would be material under applicable federal securities law. (d) If the District determines that knowledge of the occurrence of a Listed Event described in subsection (b) of this Section (2) 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 and each Repository. Section 3. Filings 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. 3 Section 4. Termination of Reporting Obligation. The District's obligations under this Disclosure Agreement shall terminate upon the legal defeasance or payment in full of all of the Notes. If such termination occurs prior to the final maturity of the Notes, the District shall give notice of such termination in the same manner as for a Listed Event under Section 2 hereof. Section 5. Dissemination Agent. The District may, from time to time, appoint or engage another Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the Trustee shall be the Dissemination Agent; provided, it shall receive written notice of such designation at the time of such designation. Section 6. 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 7. 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 or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. Section 8. 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 Notes and upon being indemnified to its reasonable satisfaction, shall, or any holder or beneficial owner of the Notes may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District, the 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 9. Duties. Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall not be responsible for the form or content of any 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 4 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 Notes. Section 10. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the District, the Trustee, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Notes, and shall create no rights in any other person or entity. Section 11. 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. 5 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: UNION BANK,N.A., as Trustee By: Authorized Officer 6 NRF DRAFT-09/04/13 PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER.2013 E,2 NEW ISSUE—BOOK-ENTRY-ONLY RATINGS: y n S&P: _ Fitch: a� (See"RATINGS"herein.) 0 In the opinion, and assuming in Jaompli LLP,Los Angeles, California,neSpecial Course], undo existing component regulations, plant O g and court decisions, and assuming compliance with the tax respect o a described sclude the interest cam➢anent of the Installment 3 Payment, and the ollacabm portion a income distributable in respect of any Note, is excluded pursuant to section item o to the Internal .�= Revenue Code ofefedfromthegrossincomea mr. owners,theeojforfedoalincometax purposesandisnot an itemrestapreference E 0 for purposes r per federal alternative minimum tar.California.so the opinion ojSpe TA Counsel that under existing law interest on the Notes is exempt from personal income taxes of the State of Clif See,however, "TAX MATTERS"herein. a` o _a [District Logo] $[PAR AMOUNT] [DAC Logo[ ORANGE COUNTY SANITATION DISTRICT g REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES 0 SERIES 2013A o Dated: Date of Delivery Maturity Date: October 16,2014 Interest Rate: % Price: % Yield: % CUSIP No. "9 The$[PAR AMOUNT] Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes,Series 2013A(tire "Notes")evidence direct, fractional undivided interests of the Owners thereof in the installment payment(the `Installment Payment'), zand the interest thereon, to be made by the Orange County Sanitation District (tire "District') pursuant to the Installment Purchase y` Agreement, dated ere of October I, 2013 (the"Installment Purchase Agreement"),by and between the District and the Orange County H° Sanitation District Financing Corporation (the "Corporation"), Pursuant to the Master Agreement for District Obligations, dated as of o August I,2000(the"Master Agreement'),by and between the District and the Corporation,the District has established conditions and terms upon which obligations, such as the Installment Payment and the interest thereon,will be incurred and secured. The Installment Payment under the Installment Purchase Agreement is payable from(i)Net Revenues(as more fully described in the Master Agreement, o T the"Net Revenues"),as provided in the Installment Purchase Agreement,consisting prihnarily 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 �.E Maintenance and Operation Costa, and (ii)other lawfully available Ponds of the District, as finiher described in `SECURITY AND SOURCES OF PAYMENT FOR THE NOTES"herein. c The Notes will mature on October 16,2014(the"Maturity Date"). The District expects the principal of and interest on the Notes to x $ be paid from proceeds of the sale,on the Maturity Date,of future series of certificates of participation,notes or other obligations of the District. The sale and delivery of a Poture series of certificates of participation,notes or other obligations of the District will depend on EE market conditions, certain approvals by the District and the Corporation and other factors. See "SECURITY AND SOURCES OF PAYMENT FOR THE NOTES"herein. e m The proceeds of the Notes, together with other amounts,will be used to (it pay at maturity all of the Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2012C, currently outstanding in the aggregate principal amount of U. a. $131,700,000,and(ii)pay the costs incurred in connection with the execution and delivery of the Notes. See"PLAN OF FINANCE" herein. o Interest evidenced by the Notes will accrue from the date of their initial delivery and will be payable on the Maturity Date. See .v£ name "THE NOTES"herein. The Notes initially will be delivered only in book-entry form and will be registered in the me of Cede&Co., as nominee of The Depository Trust Company,New York,New York("DTC"),which will act as securities depository for the Notes. s"g Individual purchases of the Notes will be made in book-entry form only. Purchasers of Notes will not receive physical certificates '8 r representing their ownership interests in the Notes purchased. The Notes will be delivered in denominations of$5,000 and any integral °e multiple thereof. Payments of principal and interest evidenced by the Notes are payable directly to DTC by Union Bank,N.A.,as trustee 4 (the"Trustee"). Upon receipt of payments of such principal and interest, DTC will in turn distribute such payments to the beneficial owners of the Nolen. See APPENDIX E—"BOOK-ENTRY SYSTEM"herein. 0 o THE OBLIGATION OF THE DISTRICT TO PAY THE INSTALLMENT PAYMENT,AND THE INTEREST THEREON,AND A 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,FROM NET REVENUES AND OTHER LAWFULLY AVAILABLE FUNDS OF THE DISTRICT, AS PROVIDED IN THE INSTALLMENT PURCHASE AGREEMENT, AND DOES NOT CONSTITUTE A DEBT OF THE DISTRICT OR OF THE 8 STATE OF CALIFORNIA, OR OF ANY POLITICAL SUBDIVISION THEREOF, RJ 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 g= PAYMENT OF THE INSTALLMENT PAYMENT,OR THE INTEREST THEREON,OR OTHER PAYMENTS REQUIRED TO BE MADE UNDER THE INSTALLMENT PURCHASE AGREEMENT. SEE"SECURITY AND SOURCES OF PAYMENT FOR THE NOTES"HEREIN. to `o This cover page contains information intended for quick reference only. It is not a summary of this issue. Investors must read the 7E= entire Official Statement to obtain information essential to making an informed investment decision. oBIDS FOR THE PURCHASE OF THE NOTES WILL BE RECEIVED BY THE DISTRICT UNTIL 11:30 A.M.NEW YORK TIME ON OCTOBER 3,2013 UNLESS POSTPONED OR CANCELLED AS SET FORTH IN THE OFFICIAL NOTICE INVITING o BIDS. The Notes are offered when,as and ifexecuted and delivered and received by as the Initial Purchaser,subject to B the approval of Fulbright& Jarm rski LLP (a member of Norton Rose Fulbright), Los Angeles, California, Special Counsel and o,? Disclosure Counsel to the District, and certain other conditions. Certain legal matters will be passed upon for the District and the y Corporation by Woodruff Spradlin &Smart, a Professional Corporation, Costa Mesa, California. Public Resources Advisory Group, IL, S Los Angeles, California, has served as financial advisor to the District in connection with the execution and delivery of the Notes. It is anticipated that the Notes in definitive form will be available for delivery through the book-entry facilities of DIC on or about October 2013. Dated: October—,2013 52906807.6 [MAP] 529068076 ORANGE COUNTY SANITATION DISTRICT Board of Directors Troy Edgar—(Chair)—Los Alamitos John Anderson—(Vice Chair)—Yorba Linda Lucille Kring—Anaheim Teresa Smith—Orange Brett Murdock—Brea Scott Nelson—Placentia Fred Smith—Buena Park David Benavides—Santa Ana Prakash Namin—Cypress Michael Levitt—Seal Beach Steve Nagel Fountain Valley David Shawver Stanton Greg Seboum Fullerton John Nielsen Titstin Steve Jones—Garden Grove Brad Reese— Villa Park Joe Shaw Huntington Beach James M.Ferryman Costa Mesa Sanitary District Steven Choi—Irvine John Withers—Irvine Ranch Water District Tom Beamish—La Habra Tyler Diep—Midway City Sanitary District Peter Kim La Palma Janet Nguyen Member of the Orange County Keith Carry Newport Beach Board of Supervisors Executive Manaeement of the District Jim 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 Nick Kanetis,P.E.,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, Spmdlin& Smart,a Professional Corporation Costa Mesa,California Financial Advisor Public Resources Advisory Group Los Angeles,California Trustee Union Bank,N.A. Los Angeles,California 52906807.6 No dealer, salesman or any other person has been authorized by the Orange County Sanitation District (the"District')or the initial purchaser of the Notes listed on the cover page hereof(the"Initial Purchaser")to give any information or to make any representations,other than those contained in this Official Statement,and, if given or made,such other information or representations must not be relied upon as having been authorized by the District or the Initial Purchaser. 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 Notes by any person in anyjurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. The information set forth herein has been provided by the District and other sources that are believed by the District to be reliable.No dealer,broker,salesperson or other person has been authorized in 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 Notes. 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 in 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 Notes 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 Notes, the Initial Purchaser in connection with any reoffering may over-allot or effect transactions which stabilize or maintain the market price of the Notes 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 Notes to certain dealers, institutional investors and others at prices lower than the public offering prices stated on the cover page hereof and such public offering prices may be changed from time to time by the Initial Purchaser. Certain statements included or incorporated by reference in this Official Statement constitute forward- looking statements. Such statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "budget' or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results,performance or achievements expressed or implied by such Forward-looking statements. CUSIP is a registered trademark of the American Bankers Association. CUSIP data on the cover hereof and 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. The District,the Financial Advisor and the Initial Purchaser are not responsible for the selection or correctness of the CUSIP numbers set forth on the cover hereof or herein. 52906807.6 TABLE OF CONTENTS Page INTRODUCTION.......................................................................................................................................I General ...........................................................................................................................................1 TheDistrict.....................................................................................................................................2 Security and Sources of Payment for the Notes..............................................................................2 ContinuingDisclosure....................................................................................................................3 Miscellaneous.................................................................................................................................3 PLANOF FINANCE...................................................................................................................................4 ESTIMATED SOURCES AND USES OF FUNDS ...................................................................................4 THENOTES................................................................................................................................................5 General ...........................................................................................................................................5 NoPrepayment...............................................................................................................................5 SECURITY AND SOURCES OF PAYMENT FOR THE NOTES............................................................5 Sale Proceeds of Future Obligations...............................................................................................5 InstallmentPayment........................................................................................................................5 AvailableFunds of the District.......................................................................................................7 NetRevenues..................................................................................................................................7 RateStabilization Account.............................................................................................................8 Allocation of Revenues...................................................................................................................9 RateCovenant.................................................................................................................................9 Limitations on Issuance of Additional Obligations......................................................................10 Insurance.......................................................................................................................................12 Allocation of Installment Payment...............................................................................................12 THEDISTRICT.........................................................................................................................................14 Background...................................................................................................................................14 Organization and Administration..................................................................................................15 Services.........................................................................................................................................16 ServiceArea..................................................................................................................................16 Employees.....................................................................................................................................17 RetirementPlan.............................................................................................................................18 Other Post-Employment Benefits.................................................................................................20 RiskManagement.........................................................................................................................20 ExistingFacilities.........................................................................................................................20 Permits,Licenses and Other Regulations.....................................................................................21 2009 Facilities Master Plan and Capital Improvement Program..................................................23 Groundwater Replenishment System............................................................................................25 Preferred Level of Treatment........................................................................................................25 BiosolidsManagement..................................................................................................................25 UrbanRunoff................................................................................................................................26 Integrated Emergency Response Program....................................................................................27 Five-Year Strategic Planning........................................................................................................28 DISTRICT REVENUES............................................................................................................................29 SewerService Charges.................................................................................................................29 AdditionalRevenues.....................................................................................................................32 WastewaterTreatment History.....................................................................................................33 52906807.6 i TABLE OF CONTENTS (continued) Page Customers.....................................................................................................................................33 AssessedValuation.......................................................................................................................35 TaxLevies and Delinquencies......................................................................................................36 BudgetaryProcess.........................................................................................................................37 Reserves........................................................................................................................................38 Summaryof Operating Data.........................................................................................................39 Forecasted Operating Data............................................................................................................41 Management's Discussion and Analysis of Operating Data.........................................................43 Investment of District Funds.........................................................................................................44 FINANCIAL OBLIGATIONS..................................................................................................................44 ExistingIndebtedness...................................................................................................................44 AnticipatedFinancings.................................................................................................................45 Direct and Overlapping Bonded Debt...........................................................................................45 THECORPORATION..............................................................................................................................45 LIMITATIONS ON TAXES AND REVENUES......................................................................................46 Article XIIIA of the California Constitution.................................................................................46 Legislation Implementing Article XIIIA......................................................................................46 Article XIIIB of the California Constitution.................................................................................47 Proposition IA and Proposition 22...............................................................................................48 Article XHIC and Article XHID of the California Constitution...................................................49 Other Initiative Measures..............................................................................................................51 LEGALMATTERS...................................................................................................................................51 FINANCIAL ADVISOR...........................................................................................................................51 ABSENCE OF LITIGATION...................................................................................................................51 FINANCIAL STATEMENTS...................................................................................................................52 TAXMATTERS........................................................................................................................................52 CONTINUING DISCLOSURE.................................................................................................................55 RATINGS..................................................................................................................................................55 PURCHASE AND REOFFERING...........................................................................................................55 MISCELLANEOUS..................................................................................................................................56 APPENDIX A — COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30,2012..............................................................................A-1 APPENDIX B — THE COUNTY OF ORANGE—ECONOMIC AND DEMOGRAPHIC INFORMATION...............................................................................................B-1 APPENDIX C — SUMMARY OF PRINCIPAL LEGAL DOCUMENTS...................................C-1 APPENDIX D — FORM OF CONTINUING DISCLOSURE AGREEMENT.............................D-1 APPENDIX E — BOOK-ENTRY SYSTEM.................................................................................E-1 APPENDIX F — FORM OF APPROVING OPINION OF SPECIAL COUNSEL.......................F-1 52906807.E 11 OFFICIAL STATEMENT $[PARAMOUNT] ORANGE COUNTY SANITATION DISTRICT REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES SERIES 2013A INTRODUCTION This introduction contains only a brief summary of certain of the terms of the Notes being offered and a brief description of the Official Statement. All statements contained in this introduction are qualified in their entirety by reference to the entire 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 not purport to be complete and such references are quaked in their entirety by reference to the complete provisions. All capitalized terms used in this Official Statement and not otherwise defined herein have the meanings set forth in the Trust Agreement, the Installment Purchase Agreement and the Master Agreement(each, as hereinafter defined). See APPENDIX C— "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Definitions"herein. General This Official Statement, including the cover page and all appendices hereto, provides certain information concerning the sale and delivery of $[PAR AMOUNT] aggregate principal amount of the Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes"),which are certificates of participation evidencing direct, fractional undivided interests in certain installment payment (the "Installment Payment) and the interest thereon, to be made by the Orange County Sanitation District (the "District") pursuant to the Installment Purchase Agreement, dated as of October 1, 2013 (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 Notes 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 Payment and the interest thereon, will be incurred and secured. The Installment Payment under the Installment Purchase Agreement is payable from (i)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, and (ii)other lawfully available funds of the District, as further described in "SECURITY AND SOURCES OF PAYMENT FOR THE NOTES" herein. The Notes are to be executed and delivered pursuant to a Trust Agreement, dated as of October 1, 2013 (the "Trust Agreement"), by and among the District, the Corporation and Union Bank, N.A., as trustee (the "Trustee"). Proceeds from the sale of the Notes will be used to (i)pay at maturity all of the Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2012C, currently outstanding in the aggregate principal amount of$131,700,000 (the "Prior Notes"), and(ii)pay the costs incurred in connection with the execution and delivery of the Notes. The Notes are not subject to prepayment prior to their maturity. See"PLAN OF FINANCE"herein. 52906807.6 The Notes will be executed and delivered in the form of fully registered certificates, dated as of the date of initial delivery thereof and will mature on October 16, 2014 (the "Maturity Date'). Interest evidenced by the Notes will be payable on the Maturity Date. See 'THE NOTES" herein. The Notes 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 Notes. The Notes will be delivered in denominations of $5,000 and any integral multiple thereof. So long as the Notes are in the DTC book-entry system, the interest and principal due with respect to the Notes will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in turn, will make payments pursuant to its procedures as described under APPENDIX E — `BOOK— ENTRY SYSTEM"herein. The District The District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United States. The District provides service to an area with a population of approximately 2.5 million people in the northern and central portion of the County of Orange (the "County"), in a service area of approximately 479 square miles, treating an average of 200 million gallons per day("mg/d") of wastewater in Fiscal Year 2012-13. See"THE DISTRICT,""DISTRICT REVENUES"and"FINANCIAL OBLIGATIONS"herein. Security and Sources of Payment for the Notes The Notes,which are certificates of participation evidence direct, fractional undivided interests in the Installment Payment, and the interest thereon, paid by the District pursuant to the Installment Purchase Agreement. The obligation of the District to pay the Installment Payment 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, from Net Revenues, and other lawfully available funds of the District, 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 expects the principal of and interest on the Notes to be paid from proceeds of the sale, on the Maturity Date, of a future series of certificates of participation, notes or other obligations of the District. The sale and delivery of a future series of certificates of participation, notes or other obligations of the District will depend on market conditions, certain approvals by the District and the Corporation and other factors. See"SECURITY AND SOURCES OF PAYMENT FOR THE NOTES— Sale Proceeds of Future Obligations." 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 Payment under the Installment Purchase Agreement. See"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. 52906807.6 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 NOTES—Rate Covenant"herein. The obligation of the District to pay the Installment Payment 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, from Net Revenues and other lawfully available funds of the District, as 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 Payment, 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 NOTES"herein. Continuing Disclosure The District has covenanted for the benefit of holders and beneficial owners of the Notes to provide notices of the occurrence of certain enumerated events. The specific nature of the information to be contained in 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 Installment Purchase Agreement, the Continuing Disclosure Agreement and any other agreements relating to the Notes 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 Union Bank,N.A.,Los Angeles,California,Attention: Corporate Trust. 52906807.6 3 PLAN OF FINANCE A portion of the net proceeds from the sale of the Notes, together with other available moneys, will be used to pay at maturity the installment payment (the "Funded Installment Payment") to be made by the District in connection with the Prior Notes. Under the terns of the Trust Agreement, dated as of October 1, 2012 (the "Prior Trust Agreement"), pursuant to which the Prior Notes were executed and delivered, the payment of the Prior Notes will be effected by depositing a portion of the proceeds of the Notes into the Installment Payment Fund established under the Prior Trust Agreement (the `Payment Fund"). Such moneys will be in an amount sufficient to provide for the payment of the interest on the Funded Installment Payment through and including October 30, 2013 (the `Payment Date") and to provide for the payment of the principal represented by the Funded Installment Payment In accordance with the Prior Trust Agreement, the Funded Installment Payment will be applied to the payment of interest with respect to the outstanding Prior Notes and to the payment of the principal of the outstanding Prior Notes on the maturity date thereof. The amounts deposited in the Payment Fund will be held in trust solely for the Prior Notes and will not be available to pay the principal and interest evidenced by the Notes or any obligations other than the Prior Notes. ESTIMATED SOURCES AND USES OF FUNDS The estimated sources and uses of funds and other amounts in connection with the delivery of the Notes are presented below. Sources Principal Amount of Notes $ Premium District Contribution Total Sources $ Uses Payment of Prior Notes $ Costs of Issuance(l) Total Uses $ Costsinclude,among other things,the Initial Purchaser's discount,fees of rating agencies,Special Counsel and Disclosure Counsel fees and expenses and the initial fees of the Trustee. 52906807.6 4 THE NOTES General The Notes will be prepared in the form of fully registered certificates in denominations of$5,000 and any integral multiple thereof. The Notes will be dated the date of initial delivery thereof and will mature on the Maturity Date. The principal evidenced by the Notes shall be payable on the Maturity Date. Interest evidenced by the Notes will accrue from their date of initial delivery and will be payable on the Maturity Date. Interest evidenced by the Notes 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" The Notes initially will be delivered only in book-entry form and will be registered in the time of Cede & Co., as nominee of The Depository Trust Company,New York, New York(DTC'),which will act as securities depository for the Notes. Individual purchases of the Notes will be made in book-entry form only. Purchasers of Notes will not receive physical certificates representing their ownership interests in the Notes purchased. Payments of principal and interest evidenced by the Notes are payable directly to DTC by Union Bank, N.A., as trustee. Upon receipt of payments of such principal and interest, DTC will in mm distribute such payments to the beneficial owners of the Notes. So long as the Notes are held in the DTC book-entry system,the interest and principal due with respect to the Notes will be payable by the Trustee, or its agent, to DTC or its nominee. DTC, in cum, will make payments pursuant to its procedures as described under APPENDIX E—"BOOK-ENTRY SYSTEM"herein. No Prepayment The Notes are not subject to prepayment prior to their maturity. SECURITY AND SOURCES OF PAYMENT FOR THE NOTES Sale Proceeds of Future Obligations The District expects the principal of and interest on the Notes to be paid from proceeds of the sale, on the Maturity Date, of a future series of certificates of participation, notes or other obligations of the District,that will amortize over a term of approximately 23 years(the"Future Obligations"). The issuance of the Future Obligations will require future authorizations by the governing boards of the District and the Corporation, as well as the preparation of suitable legal and disclosure documents for the issue. The District is currently unaware of any material impediment to obtaining such authorizations and documents. In addition, the issuance and sale of the Future Obligations will be contingent on the District's ability to access the municipal capital markets, which will depend on the District's creditworthiness and market conditions during the weeks immediately preceding the Maturity Date. The District is unable to predict such matters with certainty and therefore cannot guarantee that the Future Obligations will be successfully issued and sold. Installment Payment The Notes evidence direct, fractional undivided interests in the Installment Payment, and the interest thereon, paid by the District pursuant to the Installment Purchase Agreement. The obligation of the District to pay the Installment Payment 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, from Net Revenues and other lawfully 52906807.6 5 available funds of the District, 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. See"DISTRICT REVENUES"herein. 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 Payment and the interest thereon payable under the Installment Purchase Agreement, will be incurred and secured The obligation of the District to make the Installment Payment, and payments of interest thereon, and other payments required to be made by it under the Installment Purchase Agreement, from Net Revenues, and other lawfully available funds of the District,is absolute and unconditional,and until such time as the Installment Payment, 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 Payment 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 Payment, 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 the Installment Payment 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 Notes substantially all of its rights, title and interest in and to the Installment Purchase Agreement, including its right to receive the Installment Payment and the interest thereon. The District has certain Existing Senior Obligations Outstanding payable from Net Revenues on a parity with the Installment Payment under the Installment Purchase Agreement. The tern "Existing Senior Obligations" as used in this Official Statement refers to the Installment Purchase Agreements relating to the District's Outstanding Senior Obligations, as set forth on Table 16 under the caption "FINANCIAL OBLIGATIONS—Existing Indebtedness"herein. The term"Senior Obligations"mused 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 Payment 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 Payment, 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, from Net Revenues and other lawfully available £ands of the District, as provided for in the Installment Purchase Agreement, and does not constitute a debt of the District, the State or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the District, the State or any political subdivision thereof, is pledged to the payment of the Installment Payment 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 52906807.6 6 Obligations pursuant to the Master Agreement. See"SECURITY AND SOURCES OF PAYMENT FOR THE NOTES"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, 2013, the District's Debt Service Required Reserves totaled$135 million, of which $45.2 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, 2012 and June 30, 2013 were approximately$608 million and $646 million (unaudited), respectively. See "DISTRICT REVENUES — Reserves," "— Summary of Operating Data"and'—Pmjected Operating Data." Net Revenues The District is obligated to make the Installment Payment 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. I 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. 52906807.6 7 The District's obligation to make the Installment Payment 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, 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 Payment 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. 52906807.6 8 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 Notes are not secured by any Reserve Fund); (3) Subordinate Obligation Payment Account; (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 fonds may be legally applied. For additional information, see APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement" Rate Covenant Pursuant to the Master Agreement, the District will, to the extent permitted by law, fix, prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to yield during each Fiscal Year(a)Net Revenues equal to 125% of Debt Service on Senior Obligations for such Fiscal Year and (b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but will not reduce the fees and charges 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 52906807.6 9 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 You,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 2013-14 through 2022-23. 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 Obligations 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: (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 52906807.6 10 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 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 me 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-Term Obligations excluded from the calculation of Assumed Debt Service pursuant to clause (H) of the definition thereof. See APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Definitions"herein. The determination of Net Revenues for use in the calculation described above is more fully described in APPENDIX C — "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — Master Agreement — Senior Obligations" attached hereto. The 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 fiords 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 52906807.6 11 refunded or refinanced (assuming for such purposes that debt service on such refunded or refinanced Obligations, or debt service on the Related Bonds of such Obligations, is not disregarded pursuant to clause (L) of the definition of Assumed Debt Service). See APPENDIX C "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Master Agreement'attached hereto for additional information. The District may at any time incur Reimbursement Obligations with respect to Senior Obligations. Subordinate Obligations. The District may at any time incur Subordinate Obligations upon satisfaction of the conditions provided in the Master Agreement. See APPENDIX C "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement'herein for a description of such conditions. Insurance The District will procure and maintain or cause to be procured and maintained casualty insurance on the Wastewater System with responsible insurers,or provide self-insurance(which may be provided in the form of risk-sharing pools), in such amounts and against such risks (including accident to or destruction of the Wastewater System) as are usually covered in connection with facilities similar to the Wastewater System. The District will procure and maintain such other insurance which it will deem advisable or necessary to protect its interests and the interests of the Corporation. See "THE DISTRICT Risk Management' and APPENDIX C "SUMMARY OF PRINCIPAL LEGAL DOCUMENTS Master Agreement'herein. [Remainder of page intentionally left blank.] 52906807.6 12 Allocation of Installment Payment Set forth in Table I below is the estimated Installment Payment with respect to the Notes. Also set forth are the payments due on Other Senior Obligations, excluding the Prior Notes. The District ultimately expects the Notes to be paid with obligations that will amortize over a term of approximately 23 years,but there is no guarantee that such refinancing will occur. Table 1 Estimated Installment Payment and Outstanding Existing Senior Obligations of the District (As of October 1,2013) Fiscal Year Installment Payment Other Senior Ending Relating to Notes Oblieafion Pavmentsl"ttl June30 Principal Interest Principal Interest Total 20141'1 - - $ 10,055,000 $ 27,511,396 $ 37,566,396 2015 - - 27,875,000 54,299,011 82,174,011 2016 - - 29,405,000 53,125,356 82,530,356 2017 - - 35,575,000 51,756,369 87,331,369 2018 - - 33,170,000 50,228,169 83,398,169 2019 - - 32,735,000 49,096,419 81,831,419 2020 - - 34,370,000 47,462,519 81,832,519 2021 - - 36,005,000 45,829,319 81,834,319 2022 - - 30,065,000 44,071,069 74,136,069 2023 - - 31,550,000 42,584,979 74,134,979 2024 - - 32,965,000 41,169,979 74,134,979 2025 - - 34,575,000 39,556,359 74,131,359 2026 - - 35,995,000 38,139,691 74,134,691 2027 - - 38,105,000 36,376,341 74,481,341 2028 - - 39,875,000 34,569,066 74,444,066 2029 - - 41,720,000 32,677,491 74,397,491 2030 - - 44,585,000 30,698,066 75,283,066 2031 - - 57,225,000 28,604,641 85,829,641 2032 - - 69,775,000 26,245,769 96,020,769 2033 - - 85,305,000 22,816,786 108,121,786 2034 - - 44,765,000 18,727,006 63,492,006 2035 - - 46,935,000 16,307,232 63,242,232 2036 - - 49,220,000 13,771,510 62,991,510 2037 - - 51,610,000 11,113,614 62,723,614 2038 - - 34,290,000 8,325,855 42,615,855 2039 - - 35,920,000 6,395,648 42,315,648 2040 - - 24,575,000 4,375,150 28,950,150 2041 - - 20,805,000 2,912,640 23,717,640 2042 - - 12,430,000 1,581,120 14,011,120 2043 - - 9,795,000 785,600 10,580,600 2044 2,480,000 158,720 2,638,72 Total $ $ $1.113.755.000 $881.272.885 $ Excludes the Prior Notes. n) Excludes principal and interest due on August 1,2013. 52906807.6 13 THE DISTRICT Background The Orange County Sanitation District is a public agency responsible for regional wastewater collection, treatment and disposal. The District is the sixth largest wastewater discharger in the United States. The District provides service to an area with a population of approximately 2.5 million people in the northern and central portion of the County by treating an average of 200 mg/d of wastewater in Fiscal Year 2012-13. 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 stmctmes, 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. 52906807.6 14 Organization and Administration The District is independent of and overlaps other political jurisdictions. There are many governmental entities,including the County, that operate within the District's jurisdiction. These entities are exclusively responsible for the administration of their own fiscal affairs,and the District is not entitled to operating surpluses of,or responsible for operating deficits of,any of the other entities. The 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 year by a majority of the Board of Directors, and serve at the pleasure of the majority of the Board of Directors. The District has a general manager, 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 1, 2013. He previously held the positions with the District as Assistant General Manager, Director of Engineering and Director of Operations and Maintenance. Mr. Herberg has more than 20 years of experience in water and wastewater including project management, construction management, design, strategic planning,and operations and maintenance. Robert P. Ghirelli,D.Env. is the Assistant General Manager of the District,and bas 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 fain, 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 AngelesNentura Region. Lorenzo Tyner is the District's Director of Finance and Administrative Services. In September 2005, Mr. Tyner joined the District with approximately 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. Toms 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 years of experience managing various engineered systems in the private and public sectors regionally,nationally,and intemationally. 52906807.6 15 Nick Kaneris, P.E. is the District's Director of Engineering. He is responsible for the planning, design, and construction of the District's approximately $2.0 billion capital improvement program. Mr. Kanetis has over 28 years of professional engineering management, design, and construction experience in both the private and public sectors. Prior to joining the Orange County Sanitation District,Mr. Kanetis filled executive management positions in private engineering consulting with a focus on the design, planning and construction management of municipal water and wastewater infrastructure projects. Additionally, during his tenure at the City of San Diego,Mr.Kanetis was the Water Department's Deputy Director in charge of engineering and program management for an $800 million water system capital improvements program. 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 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 33 cities and various unincorporated areas of the County. The District serves a population of approximately 2.5 million residents. 52906807.6 16 Set forth in Table 2 below is the estimated populations of cities and unincorporated areas served by the District as of January 1,2013. Table 2 Estimated Populations of Cities and Unincorporated Areas Served by the Orange County Sanitation District As of January 1,2013 Ci�t v Population Anaheim 346,161 Brea 41,394 Buena Park 81,953 Costa Mesa 111,358 Cypress 48,547 Fountain Valley 56,180 Fullerton 138,251 Garden Grove 173,075 Huntington Beach 193,616 Irvine 231,117 La Habra 61,202 La Palma 15,818 Los Alamitos 11,626 Newport Beach 86,436 Orange 138,792 Placentia 51,776 Santa Ana 329,915 Seal Beach 24,487 Stanton 38,764 Tustin 77,983 Villa Park 5,900 Westminster 91,169 Yorba Linda 66,437 Cities Subtotallo 2,421,957 Unincorporated Areas(estimated)(21 72,180 Total 2.494.137 77D-emogmphic Unit,State of California Department of Finance. 6) Center for Demographic Research,California State University,Fullerton. Employees As of July 25, 2013, the District had a total of 597 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 Peace Officers Counsel of California representing employees within the Supervisor Group and Professional Group since 1991. The total number of represented employees is 545, and is broken down as follows: 101 employees represented by OCEA, 200 employees represented by Local 501, and 244 employees represented by the Supervisor Group and Professional Group. The contractual agreements between 52906807.6 17 District and the Supervisor Group and Professional Group were renegotiated in 2010 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 will expire on June 30, 2014. 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. 52906807.6 18 Set forth in Table 13 below is a current comparison of the District's contributions to OCERS for Fiscal Years 2007-08 through 2012-13 and projected contributions for Fiscal Year 2013-14. Table 3 Orange County Sanitation District Comparison of District Contributions to OCERS for Fiscal Years 2007-08 through 2012-13 and Projected Contributions for Fiscal Year 2013-14 District Fiscal Year Rate(1] Contributions 2007-08 20.55% $11,011,693 2008-09 21.14 12,193,601 2009-10 21.50 13,029,795 2010-11 24.04 14,370,158 2011-12 25.68 15,202,253 2012-13 27.61 17,078,872 2013-14'21 31.83 19,163,600 Requ�on as a percent of covered payroll. Includes amortization of Unfunded Actuarial Accrued Liability.Combined rate for all Plans. (a Projected. Source: Orange County Sanitation District. For Fiscal Yews 2007-08 through 2012-13, 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, 2013, total payroll costs of employees covered by OCERS was $59,966,096. 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 after qualifying public service of ten years. 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$421,650 in ARBA benefits during Fiscal Year 2012-13. 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, 2012, see Note 6 to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year Ended June 30,2012 set forth in Appendix A. The Comprehensive Annual Financial Reports of the Orange County Employees Retirement System me available on the OCERS website at http://www.ocem.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. 52906807.6 19 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, 2011 is approximately$10.7 million. The ARC is $900,035 for Fiscal Year 2012-13. Calculation of the ARC is based on the present value of benefits accruing in the current year,a 30-year amortization of the unfunded OPEB liability and an assumed rate of return on investments in the retiree fund of 5% per annum. The 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 is self-insured for all property damage from the perils of earthquakes. See "DISTRICT REVENUES — Reserves." The District also maintains outside comprehensive boiler and machinery insurance, including business interruption insurance, with a $100 million limit with deductibles ranging from$25,000 to $350,000. The District is self-insured for general liability coverage up to $250,000 per occurrence (except that employment practice liability is $500,000), with excess general liability coverage up to$30 million. During the past five fiscal yews 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, 2013 that would materially affect the financial position of the District. For more information regarding the District's insurance coverage as of June 30,2012, see Note 1 to the Comprehensive Annual Financial Report of the Orange County Sanitation District for Fiscal Year Ended June 30,2012 set forth in Appendix A. Existing Facilities The District's Wastewater System presently consists of two wastewater treatment plants, an influent metering and diversion structure, 15 off-plant pump stations, various interplant pipelines and connections, 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. I ("Plant No. I") is located in the City of Fountain Valley, about four miles from the coast, adjacent to the Santa Ana River. Secondary treatment capabilities we provided by a 52906807.6 20 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 we the treatment plants' approximate treatment capacities. Table 4 Wastewater System Treatment Capacities (mg/d) 2012-13 Primary Secondary Actual Flows Treatment Capacity Treatment Cauacitv Plant No. 1 97 204 182 Plant No. 2 103 168 150 Aggregate Treatment 200 372 332 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. 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 52906807.6 21 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 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 consent 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 Consent Decree contains the following seven milestones: • completion of a new$44.4 million Trickling Filter Facility at Plant No. 1; • completion of the design and advertising for construction of the New Activated Sludge System at Plant No. 1; • completion of the design and advertising for construction of Trickling Filters at Plant No.2; • completion of construction for the rehabilitation of Activated Sludge Plant at Plant No. 2; • completion of construction of Plant No.2's secondary treatment expansion; 52906807.6 22 • completion of construction of Plant No. 1's secondary treatment expansion; and • achieve full compliance with the Code of Federal Regulations secondary treatment requirements. The District is in compliance with the Consent Decree and has successfully completed all of the seven milestones within the specified deadlines required by the Consent Decree. The District completed the final milestone on December 29,2012. 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 he 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 both treatment plants in January 2009. These Title V permits are issued for a five-year period. In anticipation of permit expiration in January 2014, the District recently submitted application packages for renewal of its Title V permits. 2009 Facilities Master Plan and Capital Improvement Program The District's 2009 Facilities Master Plan(the "Master Plan")was completed and adopted by the Board of Directors in December 2009 and has been updated from time to time. 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 District's Board of Directors that are included in the District's 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. A key component of the Master Plan was the updating of flow projections and the collection system hydraulic 52906807.6 23 modeling. A capital improvement program was developed to implement the required sewer capacity and rehabilitation improvements through the year 2030. The District also annually reviews and validates its current Capital Improvement Program ("CIP"). The District expects to meet future demands on the Wastewater System through the CIP. This program has been developed to satisfy anticipated regulatory requirements, increased population, anticipated rehabilitations and replacements, additional treatment requirements, conservation, energy and other resource savings considerations, odor control improvements, and air quality protection needs. Through Fiscal Year 2030-31,the District's 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 26 trunk sewer improvement projects;and • Reduce fence line odor to levels that do not generate odor complaints. The 2013 CIP Validation Study resulted in revisions to the CIP. The CIP currently consists of 137 individual capital projects through Fiscal Year 2030-31 with remaining outlays of$1.8 billion. Over the next five years, the CIP contemplates average annual capital expenditures of$164 million based on the 2013 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 2012-13 through 2030-31. [update] Table 5 Capital Improvement Program—Estimated Capital Costs Fiscal Years 2012-13 through 2030-31 [update] Project Cost Collection System Capacity $ 167,629,000 Collection System Repair,Rehabilitation,Replacement 310,816,000 Treatment Plant Capacity 199,053,000 Additional Secondary Treatment 131,968,000 Improved Treatment 136,157,000 Treatment Plant Repair,Rehabilitation, Replacement 702,797,000 Support Facilities 121,390,000 Total Validated Capital Improvement Program 1-769-810-00 Spume: [2011-12]Budget Update,Orange County Sanitation District. The CIP included budgeted expenditures of$141.6 million in Fiscal Year 2013-14. There we currently 38 projects in the construction phase with proposed capital outlay spending in 2013-14. The two most significant projects in the construction phase are the Sludge Thickening Dewatering and Odor Control at Plant No. 1 and the Solids Thickening and Processing Upgrades at Plant No. 2 with projected current year expenditures of$27.3 million and$12.9 million,respectively. 52906807.6 24 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 Much 2001,the District entered into an agreement with the OCWD to design and construct Phase 1 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 with an expected water production of 72,000 acre-feet per year once all secondary treatment facilities are online. In 2011,GWRS produced approximately 68,000 acre-feet. The Phase II expansion started construction in November 2011 to add approximately 33,000 acre-feet per year. The District expects the Phase II expansion to be completed in the fall of 2014. 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. I 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 Microfiltration 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, that reflects the full secondary treatment requirements. Biosolids Management The District recovers and treats nutrient-rich, organic matter to produce biosolids through the treatment of wastewater. Biosolids can be recycled through composting or fertilizing farm fields (non- food)(land application)or disposed in a landfill for methane gas recovery. By 2014,the District's biosolids tonnage is anticipated to peak at approximately 784 tons per day ("tpd")when new secondary treatment processes we fully operational, and then is projected to decline to approximately 520 tpd by 2017 when the IRWD's solids processing facilities and the District's biosolids centrifuges commence operations. The District's biosolids averaged of 753 tpd in Fiscal Year 2012-13, with an average cost per ton of$62.55 for managing at offsite locations, as described in the table below. The Fiscal Year 2013-14 budget for biosolids management is $17.94 million. In 2003, the District was the fast 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. Pursuant to its policy(updated in February 2013)under the program, the District is committed to a diverse biosolids 52906807.6 25 program to help ensure a sustainable, reliable, and economical program. The District has a diversified biosolids management portfolio,as set forth in the table below: Current tons per day Average cost Contract(Minimum tons managed per ton Contractor Location Product per day and ter ml (approximate) (June 2013) Synagro Kern County,CA Compost 250 tpd—10 years plus two 250 tpd $74.1 l five-year renewals,first renewal 12/27/16 Synagro La Paz County,AZ Compost 0 tpd—10 years plus two 70 tpd $62.04 five-year renewals,first renewal 12/27/16 Tule Ranch Yuma County,AZ Land 0 tpd—Four(5)years 350 tpd $54.50 application expires 12/31/2017 Orange Orange County,CA Local 0 tpd—One year with four 70 tpd $40.26 plus County Landfill one-year renewals expires transportation Waste& 07/28/14 Recycling The District's contractors provide back-up biosolids management options in Arizona that include compost, land application recycling, and landfill disposal. Together, these options have the additional available capacity to manage more than eight 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, District staff will recommend the Board of Directors adopt a biosolids Strategic Initiative for the District's Fiscal Year 2014-15 Strategic Plan. The Strategic Initiative would review potential biosolids management options in order to make recommendations for the RFP. The District's goal is to ensure the RFP aligns with existing market conditions and continues a sustainable,reliable,and economical biosolids management program that provides environmentally sound practices and meets the stringent federal, state,and local regulatory requirements. In fall 2012, the District signed an agreement with Orange County Waste & Recycling to use their landfill in San Juan Capistrano. The District awarded a one-year hauling contract for the landfill loads(up to 100 tpd)in July 2013 that contains 4 one-year renewals. 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 June 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, OCSD 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 52906807.6 26 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. 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 7.0 billion gallons of dry-weather urban runoff that would otherwise have been discharged into the ocean with no treatment. From January 1, 2012 through December 31, 2012, the daily average urban runoff flow ranged between 0.003 and 2.69 MGD with a cumulative total diversion of 558 million gallons for this period. At the existing operations and maintenance cost of$1,440.42 per million gallons(2011-12 rate),the District's cost for treating the urban runoff discharge for this period is estimated at$803,753. 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 document titled Fault Rupture Hazard Investigation—Wastewater Treatment Plant No. 2. 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 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. 52906807.6 27 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 disaster preparedness plan in the Strategic Plan investigates the damage potential posed by coastal flooding, tsunamis (large ocean waves generated by seismic activity) and windstorms. No assurance can be given that any such events would not have a material adverse impact on the Wastewater System. The Strategic Plan also makes recommendations regarding fire protection of the Wastewater System. Most of the structures at Plant No. 1 and Plant No. 2 are constructed of fire-resistant materials. The IERP describes the procedures needed to respond to a possible disaster. For more information regarding emergency response policies,the disaster preparedness plan described in the Strategic Plan and the IERP can be reviewed at the District's office. Five-Year Strategic Planning In November 2007, the Board of Directors adopted a new comprehensive strategic plan to steer the District's efforts and engage the organization to envision 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 Plan"). Since 2007, approximately 79% percent of the strategic goals have been completed. Following a similar process used in prior years, the General Manager's Office initiated the planning effort with the Executive Management Team, then solicited input and ideas from managers and supervisors. In October 2012, the staff-generated ideas were presented at a workshop with the Board of Directors where the Board Members discussed and deliberated changes and additions to the plan. Driven by the District's Mission, Vision and Core Values, the 2012 Strategic Plan Update continues an aggressive effort by the District to meet the sanitation, health, and safety needs of the approximately 2.5 million people served while protecting the environment where we all live. As a result of the discussion at the October 2012,four new goals were added to the Strategic Plan,as follows: • Ensure a reliable and sustainable chemical supply using multiple vendor contracts to reduce the risk of supply disruption while benefiting from competitive pricing. • Develop a Business Continuity Plan that will define how the District will continue everyday business functions after an event that interrupts normal operations for an extended period of time. • Assess and revise the District's biosolids policy to reflect recent, developments, experiences, and circumstances concerning biosolids management. See "THE DISTRICT — Biosolids Management"herein. • Assess the performance of current odor control systems, validate the appropriate Levels of Service ("LOS"), align future odor improvements with asset management objectives, and update the Capital Improvement Plan for odor control to meet the LOS goals. 52906807.6 28 This Strategic Plan continues to chart a focused roadmap of success for the future of the District. It addresses critical operations and construction issues, financial and budgeting challenges, and gives a clear and concise direction to staff,ratepayers,regulatory agencies,and the general public. 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." 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 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. 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 I00% 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 NOTES—Rate Covenant"herein. Residential and Commercial Sewer Service Charges. Pursuant 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 52906807.6 29 approximately 20% per year for each of the then following five years. In May 2005, the Board of Directors adopted Ordinance No. OCSD-26 increasing the Fiscal Year 2005-06 single family residential rate, the underlying basis for all sewer service charges, by 31%, from $115.00 to $151.00 for all ratepayers, except those located in Revenue Area No. 14. In June 2007, the Board of Directors adopted Ordinance No. OCSD-32 increasing the Fiscal Year 2007-08 single family residential rate by 9.8%. On February 27, 2008, the Board of Directors approved increases in its sanitary sewer service charges for all single family and multi-family residential units, and for all commercial properties. The Board of Directors increased the single family residential 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 single family residences, multi-family residential units, and all non-residential properties. The Board 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 annual increase of 2.40/6 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 Historical Projected Fiscal Sewer Service Fiscal Sewer Service Year Char ee 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 single family residences ("SFR") 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 projected SFR rate of$308 in Fiscal Year 2013-14 remains below the average annual sewer rate of $406 according to a Fiscal Year 2007-08 survey of 726 agencies encompassing all 58 counties in California conducted by the State Water Resources Control Board. [update to come] 52906807.6 30 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 Entity m d 131 Clare n Level")131 Responsibility incomer'1 City of San Diego 168 $573 2 Yes No City of Los Angeles 428 409 4 Yes No East Bay MUD 80 331 4 No Yes Sacramento 140 312 3 No Yes Orange County 221 308 3 No Yes Sanitation District Los Angeles County 497 150 4 No Yes Source: Information obtained from respective entities listed. (2) 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. t31 "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 2012-13 were approximately $11 million. Industrial Sewer Service Charges are applied to both operating and capital funds. The Sewer Service Charge increases described above are necessary to meet the District's cash flow needs arising from the addition of disinfection treatment and other operating requirements. As discussed under the caption "THE DISTRICT — 2009 Facilities Master Plan and Capital Improvement Program," the 2013 CIP Validation Study developed the capital improvement program to ensure secondary treatment standards are met as quickly as possible while providing for increased flows and rehabilitation and refurbishment of existing facilities. As projected through Fiscal Year 2030-31,the cash flow needs of the CIP total approximately $1.8 billion. Over the next five years the CIP contemplates average annual capital expenditures of$164 million. In addition, the CIP contemplates $212 million, or an annual average of$42 million, to finance projects currently unknown or unidentified as forecasted by the District's Asset Management Program(the"Asset Management Program"). 52906807.6 31 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 $65.2 million in Fiscal Year 2007-08, $66.4 million in Fiscal Year 2008-09, $64.8 million in Fiscal Year 2009- 10, $64.3 million in Fiscal Year 2010-11, $67.9 million in Fiscal Year 2011-12 and $79.2 million (unaudited) in Fiscal Year 2012-13. Because of one-time redevelopment dissolution property tax proceeds received in Fiscal Year 2012-13, the District currently projects that its property tax receipts will decrease by approximately 6.9% in Fiscal Year 2013-14, but increase by approximately 5.0% each year thereafter through Fiscal Year 2017-18. 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 Facilities 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. 52906807.6 32 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 Certificates") and the District's Revenue Obligations, Series 2010C (the "2010C Certificates"), issued as `Build America Bonds," the District expected 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 Certificates and the 2010C Certificates constitute Revenues as defined in the Master Agreement. In its financial reports, the District accounts for subsidy payments received in connection with the 2010A Certificates and the 2010C Certificates as a reduction in interest expense with respect to such obligations. For the 2010A Certificates and the 2010C Certificates 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 Certificates and the 2010C Certificates , 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. 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 Certificates were reduced by 8.7% (or $67,874) and federal subsidy payments for the 2010C Certificates were reduced by 8.7% (or $152,807) for the federal fiscal year ending September 30, 2013. The District is obligated to make all payments with respect to the 2010A Certificates and the 2010C Certificates, however, from Revenues as defined in the Master Agreement, regardless of whether it receives the full amount of the federal subsidy payments. The District cannot predict any fixture reductions in federal subsidy payments 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 Certificates or the 2010C Certificates. Wastewater Treatment History The wastewater flows for Fiscal Year 2008-09 through Fiscal Year 2012-13 were 211 mg/d, 196 mg/d, 207 mg/d, 201 mg/d and 200 mg/d,respectively. The highest flow rate experienced was during El Nino storm periods. Peak flows of 500 mg/d were recorded in December 1997 and February 1998. There were no sewer failures or overflows during these events. Customers The historical number of customers served by the District for the Fiscal Years 2008-09 through 2012-13 and the projected number of customers served by the District for the Fiscal Years 2013-14 through 2017-18, 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 meant 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. 52906807.6 33 Table 8 Historical and Projected Equivalent Dwelling Units Fiscal Years 2008-09 through 2017-18 Historical Projected Fiscal Year EDUs([) Fiscal Year EDUs 2008-09 921,782 2013-14 929,430a1 2009-10 930,164 2014-15 932,033 2010-11 924,622 2015-16 934,736 2011-12 924,625 2016-17 937,493 2012-13 926,928 2017-18 940,306 With respect Fiscal Years, presentation in the Statistical Section of the Districts 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 current budget as of June 2013. 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 2007-08 through 2011-12 ($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 2007-08 875,739 $159.4 93% 520 $12.1 7% 2008-09 882,747 177.4 95 515 9.9 5 2009-10 875,442 193.5 95 487 10.8 5 2010-11 874,130 213.3 95 479 10.1 5 2011-12 869,709 232.2 96 516 9.5 4 Source:Orange County Sanitation District. 52906807.6 34 Set forth in Table 10 below are the ten largest principal sewer service customers of the District for the Fiscal Year ended June 30,2012. Table 10 Largest Principal Sewer Service Customers of the District for the Fiscal Year Ended June 30,2012 Sewer Service User Charees Stremicks Heritage Foods,LLC $958,066 Kimberly-Clark Worldwide, Inc. 872,777 MCP Foods,Inc. 764,660 House Foods America Corp. 719,741 Pulmuone Wildwood,Inc. 550,742 Dean Foods Co. of CA Inc. 498,750 Schreiber Foods Inc. 428,853 Jazz Semiconductor 382,420 Pepsi-Cola Bottling Group 368,506 Cargill,htc. 316,631 Total $ 4 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 XflIA, 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. 52906807.6 35 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 2008-09 through 2012-13 ($in Billions) Fiscal Year Value %Chance 2008-09 $307.6 5.08% 2009-10 305.2 (0.80) 2010-11 304.3 (0.27) 2011-12 308.7 1.43 2012-13 316.0 2.38 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 secured property taxes levied each year on its behalf and, for so long as such plan remains in effect, the participating entities, such as the District, no longer experience delinquent taxes. The County's general fund is the designated recipient of future collections of penalties and interest on all delinquent taxes collected on behalf of participants in this alternative method of apportionment. In recent years, the County has experienced delinquencies of Sewer Service Charges in the District of approximately 2.0%. 52906807.6 36 Set forth in Table 12 below is a five-yen history of the District's ad valorem total property tax and Sewer Service Charge levies. Table 12 Total Property Tax and Sewer Service Charge Levies in the District for Fiscal Years 2008-09 through 2012-13 (in Thousands) Total Property Tax and Sewer Fiscal Year Service Charee Levy 2008-09 $254,092 2009-10 272,050 2010-I1 292,646 2011-12 314,077 2012-13 341,350 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 are 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 yen. The District's annual budget preparation process begins in January of each yen and concludes in Jane upon its adoption. The General Manager reviews the final operating budgets and then distributes them to the Directors and District Committees for consideration. The Board of Directors then adopts the proposed annual budgets,with any revisions,in June of each year. Budgetary control is exercised at the individual Department level and administrative policies provide guidelines on budget transfers and the authorization necessary to implement transfers. A budget adjustment is a transfer which does not change the total appropriated amount and does not require Board of Directors action. Approval may be granted by the General Manager or the Department Head in certain circumstances. Department Heads have the discretion to reapportion funds between certain line items within a division but may not exceed total appropriated amounts for each department. They may also transfer staff across divisional lines. The General Manager and Board of Directors must approve additional capital outlay items. A budget amendment is an adjustment to the total appropriated meant which was not included in the original budget. These supplemental appropriations require formal action by the Board of Directors. Prior year 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. 52906807.6 37 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. 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 percent. Reserve levels are calculated in accordance with the District's reserve policy. Set forth in Table 13 below are the actual reserves at June 30, 2010, June 30, 2011 and June 30, 2012 and the District's unaudited reserves at June 30,2013,for each fund. Table 13 District Reserves June 30,2010 through 2012 Unaudited June 30,2013 (In Millions) Actual Unaudited 2010 2011 2012 2013 June 30 June 30 June 30 June 30 Cash Flow Requirements Reserve— Operating Expenses $ 78 $ 75 $76 $76 Certificates of Participation Payments 92 97 92 83 Operating Contingencies Reserve 15 15 15 15 Capital Improvement Program Reserve 86 154 171 221 Catastrophe and Self Insurance 57 57 57 57 Capital Replacement and Refurbishment 56 57 59 59 Debt Service Required Reserves(') 129 142 138 135 Overlapping Reserve Adjustment (440) - - - Total $473 $597 $608 $646 "Debt"Debt Sei� 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, 2013, $135 million of Debt Service Required Reserves were held in Obligation Reserve Funds,of which$45.2 million is restricted by covenant for the specific obligations for which such Obligation Reserve Funds were established. Source: Orange County Sanitation District. 52906807.6 38 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. • 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 $6.26 billion. The initial reserve level for this fund was established at $50 million and is augmented by interest earnings and a portion of the annual Sewer Service Charges. • Debt Service Required Reserves include trustee-held amounts in any Obligation Reserve Fund and additional amounts held by the District for the payment of debt service in accordance with the District's reserve policy. The District's current policy is to maintain reserves (including trustee- held reserves) for debt service in the amount of 10% of the principal amount of the District's outstanding debt obligations. • The Rate Stabilization Reserve accumulates all available funds which exceed the targets for all other reserves. The Rate Stabilization Reserve is a separate fund from the Rate Stabilization Account established under the Trust Agreement. There is currently no established target for this reserve and,because the reserves of all other funds have not been exceeded, the reserve level for this reserve fund is zero for Fiscal Yew 2013-14. Summary of Operating Data Set forth in Table 14 below is a summary of historic operating results for the District for Fiscal Years 2008-09 through Fiscal Year 2011-12 and the unaudited operating results for Fiscal Year 2012-13. The information presented in the summary should be read in conjunction with the financial statements and notes. See APPENDIX A — "COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30,2012." 52906807.6 39 Table 14 Summary of District Historical Revenues and Expenses and Other Financial Information For Fiscal Years 2008-09 through 2011-12 and Unaudited for Fiscal Year 2012-13 ($in Millions) Audited Unaudited 2008-09 2009-10 2010-11 2011-12 2012-13 Revenues: Residential&Commercial Sewer Service Charges(i) Regional $177.4 $193.5 $213.3 $232.2 $259.7 Local 5.6 5.6 5.7 5.7 5.8 Indus" Sewer Service Charges 9.9 10.8 10.1 9.5 10.8 Revenue Area No. 14 Fees 10.3 10.2 21.4 18.0 22.6 Ad Valorem Taxes 66.4 64.8 64.3 67.9 79.2 Interest Eamings 14.8 19.2 10.1 15.7 (3.9) Other Revenues 5.8 12.5 5.7 3.6 Total Revenues $290.2 $316.6 $330.6 352.6 374.2 Operations and Maintenance Expenses(2) 164.6ts1 138.1 143.4 172.3 139.3 NetRevenues $125_6 $178.5 %187.2 $180.3 M12 Debt Service $ 57.6 $ 67.1 $ 72.4 $ 65.4 SX3 Coverage Ratios 2.18x 2.66x 2.59x 2.76x 3.08x CIP Outlay $290.1 1251.1 %1660_7 11111.7 595.7 Ending Reserves $534.0 $473.0 $527.O $608.0 16460 Net of rebates, if any, to commencial users. Local sewer service fees were not established until Fiscal Year 2008-09. (2) Excludes depreciation and amortization expenses. in During the Fiscal Year ended June 30,2009,independent agreed-upon procedures were conducted on Revenue Area 14 to substantiate the IRWD's owner equity interest in the District. As a result, a one-time other operating expense of$29 million was charged to the Consolidated Revenue Area for the year ended June 30, 2009. Source: Orange County Sanitation District. 52906807.6 40 Forecasted Operating Data Set forth in Table 15 below are forecasted operating results for the District for Fiscal Years 2013- 14 through 2017-18. These projections assume the number of projects and scheduled build out set forth in the 2013 CIP Validation Study, and reflect the Board-approved rate increase of 4.8% in Fiscal Year 2013-14, and the average annual rate increases of 2.4% over the following four fiscal years. Principal expenditure components of these projections are derived from the 2013 CIP Validation Study, which identified 87 large capital projects and 50 special projects with a 20-year projected outlay of$1.8 billion. Much of the construction is scheduled during the next five years, with average annual capital outlays of $164 million. The District's CIP cash flow outlay for Fiscal Year 2012-13 was approximately $95.7 million. The District's CIP cash flow budget for Fiscal Year 2013-14 is $144.9 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.] 52906807.6 41 Table 15 Summary of District Forecasted Revenues and Expenses and Other Financial Information for Fiscal Years 2013-14 through 2017-18 IS in Millions)", 2013-14 2014-15 2015-16 2016-17 2017-18 Revenues Residential&Commercial Sewer Service Charges $284.3 $292.6 $300.0 $308.4 $316.8 Industrial Sewer Service Charges 11.3 11.6 11.8 12.1 12.4 IRWD Assessments 14.4 16.5 16.4 10.1 5.8 SAWPA Assessments 2.9 3.1 3.2 3.3 3.4 Ad Valorem Taxes 73.7 77.4 81.3 85.3 89.6 Interest Earnings 16.4 19.4 18.6 18.6 17.8 Other Revenues 1.5 1.9 1.9 2.0 2.0 Total Revenues $404.5 $422.5 $433.2 $439.8 $447.8 Add: Build America Bonds Federal Subsidy 5.1 5.1 5.1 5.1 5.1 Operations and Maintenance Expenses (151.2) (158.8) (165.7) (169.2) (172.8 1 Net Revenues R> 259.4 $269.8 $272.6 $275.7 $290.1 Debt Service $ 98.5 $ 85.8 $ 86.1 $ 90.9 $ 87.0 Build America Bonds Federal Subsidy 5.1 5.1 5.1 5.1 5.1 Gross Debt Service $103 6 $ 90 9 $ 91.2 S 96.0 $92.1 Coverage Ratios(�) 2.49 2.25x 2.99s 2,87x 3.04x CIE Outlays $:144 $222.1 $209. $175.1 $280.9 Debt Proceeds Ending Reserves $673 0 $637 4 $618 6 $641.9 _560 1 See REVENUES-Additional Revenues-Federal Subsidy Payments'herein. (2) Calculated in accordance with the Master Agreement and the Installment Purchase Agreement (n Assumptions: a) Annual growth in EDUs is projected to increase 0.29%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 4.8%in Fiscal Year 2013- 14,and board approved rate increases over the next four 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 [axes are projected to decrease by 6.9% in Fiscal Yen 2013-14 from the Fiscal Year 2012-13 projection because of one-time redevelopment dissolution proceeds,and thereafter increase by 5.0%annually. e) Interest earnings are projected to average 2.5%of annual cash balances. B Operating and Maintenance Expenses are forecasted with abase 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 2013 CIP Validation Study. Source: Orange County Sanitation District. 52906807.6 42 Management's Discussion and Analysis of Operating Data The District's Fiscal Year 2013-14 total operating, capital improvement, debt service, and other financing requirement budget is $398.9 million, a 5.6 percent increase over the prior yen budget of $377.8 million. The increase in the Fiscal Yen 2013-14 budget is primarily due to the timing of the construction schedules on the implementation of CIP validated capital projects of$1.3 billion over the next ten years. The District's Fiscal Year 2013-14 budget includes$144.9 million in capital improvement outlays. With the completion of secondary treatment standards in December 2012,the District is focusing its efforts on the continued refinement of its asset management based engineering planning process. This process has been used to propose project modifications to more efficiently package projects for execution. As an example, four individual digester gas handling projects are proposed to be combined into a single coordinated project. The Fiscal Yen 2013-14 operations budget for the collection, treatment, and disposal of wastewater is $151.2 million, a decrease of $0.4 million, or less than one percent from the prior year budget of$151.6 million. Although individual expense categories will increase or decrease slightly, the overall decrease to the operating budget is primarily attributable to a decrease of$2.9 million, or 11.1 percent, in contractual services and a decrease of$1.6 million, or 8.3 percent, in operating materials and supplies that was mostly offset by the increase in personnel costs of$3.7 million, or 3.9 percent. The decrease in contractual services is primarily attributable to the termination of an agreement, estimated to cost the District approximately$3.4 million,with a company that had attempted to process biosolids into fuel pellets. The decrease in operating materials and supplies is primarily due to the decrease in odor control chemicals of$876,000 through optimization of these chemicals within the treatment plants and collection systems. The increase in personnel costs is primarily due to the increase in retirement premiums. Although staffing levels were decreased from the Fiscal Year 2012=13 approved full-time equivalent positions ("FTE") of 627.75 to 626.00, or a reduction of 1.75 FTE positions, employer retirement premium contributions me projected to increase by $2.1 million. This increase is predicated from the actuarial valuation completed on December 31, 2012 that requires greater employer premium contributions primarily because of underperfomting returns on the retirement investment portfolio. In preparation of the Fiscal Year 2013-14 budget update, the second yew of the previously approved 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 2013-14 CIP cash flow project budget was approved at $141.6 million; an increase of 5.8 percent from last year's approved cash flow of$133.9 million. This approved CIP outlay of$141.6 for Board of Director's approved projects coupled with approved outlays of$3.3 million deemed necessary from the Asset Management Program for rehabilitation, refurbishment, and replacement of yet to be determined specific projects comprise the total Board of Director's approved CIP outlays of 144.9 million for Fiscal Year 2013-14. The incorporation of the 2009 Facilities Master Plan (the "Master Plan') into the CIP includes the addition of 65 new CIP projects totaling $615.7 million through the year 2050. The 2013 validated CIP includes 87 large capital projects and 50 special projects with a 20-year expenditure of$1.8 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 percent in Fiscal Year 2013-14, and by an annual average of 2.4 percent over the following four years. These rate increases were approved by a vote of two-thirds of the members of the 52906807.6 43 Board of Directors and are not subject to reaffirmation in any of the future fiscal years covered by this five-year period. This action increased the single family residence user rate, the basis for all sewer user fee rates, from $294 in Fiscal Year 2012-13 to $308 in Fiscal Year 2013-14. 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 June 30, 2013, the District's externally managed fund consisted of a short-term investment portfolio of$71.0 million with an average maturity of 102 days, and a long-term investment portfolio of $441.4 million with average maturities of 3.0 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 term 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 Notes. The table below describes the District's outstanding parity certificates of participation as of October 1, 2013. 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. 52906807.6 44 Table 16 Outstanding Senior Obligations As of October 1,2013 Original Principal Issue Outstanding Final Amount Date Balance mainri 2007A Certificates $ 95,180,000 05/22/07 $ 92,620,000 02/01/30 2007B Certificates 300,000,000 12/20/07 273,400,000 02/01/37 2008B Certificates 27,800,000 09/11/08 25,585,000 08/01/16 2009A Certificates 200,000,000 05/07/09 187,765,000 02/01/39 2010A Certificates 80,000,000 05/18/10 80,000,000 02/01/40 2010C Certificates 157,000,000 11/29/10 157,000,000 02/01/44 2011 A Certificates 147,595,000 10/03/11 130,345,000 02/01/26 2012A Certificates 100,645,000 03/22/12 100,645,000 02/01/33 2012B Certificates 66,395,000 08/16/12 66,395,000 02/01/26 2012C Certificates 131,700,000 10/30/12 1317000001t1 10/30/13ot Total Senior Obligations 1.306315.000 1.245.455.000 To be paid with the sale proceeds of the Notes and other sources of funds. See`PLAN OF FINANCE." 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 Prior Notes discussed in Table 16 above. Direct and Overlapping Bonded Debt The aggregate direct and overlapping bonded debt of the District as of June 30, 2012 is set forth on page 54 of Appendix B. 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. 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. 52906807.6 45 The District's Director of Finance and Administrative Services and other District employees are available to provide stall 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 Jane 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 fall cash value may be adjusted annually to reflect inflation at a rate not to exceed 2%per year or to reflect a reduction in the consumer price index or comparable data for the area under the taxing jurisdiction, or reduced in the event of declining property values caused by substantial damage, destruction, or other factors. Legislation enacted by the State Legislature to implement Article XIIIA provides that notwithstanding any other law, local agencies may not levy any ad valorem property tax except to pay debt service on indebtedness approved by the voters as described above. Legislation Implementing Article XIIIA Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law,local agencies are no longer permitted to levy directly any property tax(except to pay voter-approved indebtedness). The one percent property tax is automatically levied by the County and distributed according to a formula among taxing agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1989. Increases of assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in the "taxing area" based upon their respective "situs." Any such allocation made to a local agency continues as part of its allocation in future years. Beginning in the 1981-82 fiscal year, assessors in the State no longer record property values an 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 $I per $100 of taxable value. All taxable property value included in this Official Statement 52906807.6 46 is shown at 1000/. of market value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value. Article XI11B of the California Constitution An initiative to amend the State Constitution entitled"Limitation of Govemment Appropriations" was approved on September 6, 1979, thereby adding Article XIIIB to the State Constitution ("Article XIBB"). 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 XBIB 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 XIIB, if these entities' revenues in any year exceed the amounts permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years. "Appropriations subject to limitation" are authorizations to spend "proceeds of taxes," which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed"the cost reasonably home by such entity in providing the regulation, product or service,"but"proceeds of taxes" excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on appropriations of funds which are not "proceeds of taxes," such as reasonable user charges or fees, and certain other non- tax funds. Not included in the Article XIIIB limit are appropriations for the debt service costs of bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government and appropriations for qualified capital outlay projects. The appropriations limit may also be exceeded in certain cases of emergency. The appropriations limit for the District in each year is based on the District's limit for the prior year, adjusted annually for changes in the cost of living and changes in population, and adjusted, where applicable, for transfer of financial responsibility of providing services to or from another unit of government. The change in the cost of living is, at the District's option, either(1)the percentage change in State per capita personal income, or (2) the percentage change in the local assessment roll on nonresidential property. Either test is likely to be greater than the change in the cost of living index, which was used prior to Proposition 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 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 I I l had been in effect. The District does not anticipate that any such appropriations 52906807.6 47 limitations will impair its ability to make Installment Payments as required by the Installment Purchase Agreement. Proposition 1A 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 lA 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 must be approved by two-thirds of both houses of the Legislature. Proposition IA provides, however, that beginning in Fiscal Year 2008-09, the State may shift to schools and community colleges up to 8%of local government property tax revenues,which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are met. 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 lA to divert $1.935 billion in local properly 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 lA 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 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. 52906807.6 48 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 terms, 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. Verid, 39 CalAth 205 (2006) ("Bighorn") have clarified some of the uncertainty surrounding the applicability of Section 6 of Article XIIID to service fees and charges. In Richmond, the Shasta Community Services District charged a water connection fee, which included a capacity charge for capital improvements to the water system and a fire suppression charge. The Court held that both the capacity charge and the fire suppression charge were not subject to Article XIIID because a water connection fee is not a property-related fee or charge because it results from the property owner's voluntary decision to apply for the connection. In both Richmond and Bighorn, however, the Court stated that a fee for ongoing water service through an existing connection is imposed "as an incident of property ownership" within the meaning of Article XIIID, rejecting, in Bighorn, the water agency's argument that consumption-based water charges are not imposed "as an incident of property ownership"but as a result of the voluntary decisions of customers as to how much water to use. Article XIIID also provides that"standby charges" are considered"assessments"and 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 "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. 52906807.6 49 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 CIP 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 Jane 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 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 2017-18. Pursuant to the Master Agreement, the District will,to the extent permitted by law, fix, prescribe and collect fees and charges for the services of the Wastewater System which will be at least sufficient to yield during each Fiscal Year(a)Net Revenues equal to 125%of Debt Service on Senior Obligations for such Fiscal Year, and(b)Net Operating Revenues equal to 100% of Debt Service on all Obligations for such Fiscal Year. The District may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but will not reduce the fees and charges then in effect unless the Revenues and Net Revenues from such reduced fees and charges will at all times be 52906807.6 50 sufficient to meet the requirements of the Master Agreement. In the event that service charges me determined to be subject to Article XIIID, and proposed increased service charges cannot be imposed as a result of a majority protest, such circumstances may adversely effect the ability of the District to generate revenues in the amounts required by the Master Agreement, and to make Installment Payments as provided in the Installment Purchase Agreement. No assurance may be given that Articles XIIIC and XIIID will not have a material adverse impact on Net Revenues. Other Initiative Measures Articles XIIIA, XIIIB, XIBC 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 Notes 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 & Stuart, 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 financial advisor (the "Financial Advisor") in connection with the execution and delivery of the Notes. 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 Notes, 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 Notes, 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 Notes or any action of the District contemplated by any of said documents,nor,to the knowledge of the District is there any basis therefor. There is no action, suit,proceeding, inquiry or investigation,at law or in equity,before or by any court, regulatory agency, public board or body pending or, to the best knowledge of the District, threatened against the District contesting or affecting the ability of the District to collect amounts from 52906807.6 51 which the Installment Payment is payable,or which would have a material adverse effect on the District's ability to make the Installment Payment. 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, 2012" herein. The District has received the Government Finance Officer's Association Certificate of Achievement for "Excellence in Financial Reporting" for 17 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 The Internal Revenue Code of 1986 (the "Code") imposes certain requirements that most be met subsequent to the execution and delivery of the Notes for the interest component of the Installment Payment (the "Interest Component"), and the allocable portion thereof distributable in respect of each Note(the"Note Interest Distribution"),to be and remain excluded pursuant to section 103(a)of the Code from the gross income of the owners thereof from the gross income of the owner thereof for federal income tax purposes. Noncompliance with such requirements could cause such amounts to be included in gross income for federal income tax purposes retroactive to the date of delivery of the Installment Purchase Agreement and the Notes. In the opinion of Fulbright & Jaworski LLP, Los Angeles, California, Special Counsel, under existing statutes, regulations, rulings and court decisions, the Interest Component allocable to and the Note Interest Distributions in respect of a Note is exempt from personal income taxes of the State of California and, assuming compliance with the covenants referred to herein, the Interest Component allocable to and the Note Interest Distributions in respect of a Note are excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. In the further opinion of Special Counsel,under existing statutes,regulations, mlings and court decisions, the Notes are not"specified private activity bonds" within the meaning of section 57(a)(5) of the Code and,therefore,the Interest Component allocable to and the Note Interest Distributions in respect of a Note will not 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 the Interest Component allocable to and the Note Interest Distributions in respect of a Note owned by a corporation may affect the computation of the alternative minimum taxable income.A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by section 55 of the Code will be computed. Notice 94-84, 1994-2 C.B. 559, states that the Internal Revenue Service (the "Service") is studying whether the stated interest portion of the payment at maturity on a short-term debt obligation (such as the Notes),that matures not more than one year from the date of issue,bears a stated fixed rate of interest and is described in section I03(a) of the Code,is (i) qualified stated interest that is excluded from the stated redemption price at maturity of the obligation(within the meaning of section 1273 of the Code) but is excluded from gross income pursuant to section 103(a) of the Code, or (ii) is not qualified stated interest and, therefore, is included by the taxpayer in the stated redemption price at maturity of the obligation, creating or increasing (as to that taxpayer) original issue discount on the obligation that is excluded from gross income pursuant to section 103(a) of the Code. Notice 94-84 states that until the 52906807.6 52 Service provides fiuther guidance with respect to tax-exempt short-term debt obligations, a taxpayer holding such obligations may treat the stated interest payable at maturity either as qualified stated interest or as included in the stated redemption price at maturity of the obligation. However, the taxpayer must treat the amounts to be paid at maturity on all tax-exempt short-teen debt obligations in a consistent manner. Notice 94-84 does not address various aspects necessary to the application of the latter method (including, for example, the treatment of a holder acquiring its Note other than in the original public offering or at a price other than the original offering price). Each person considering acquiring the Notes should consult its own tax advisor with respect to the tax consequences of ownership of and of the election between the choices of treatment of the stated interest payable at maturity on the Notes. The initial public offering price for the Notes is greater than the principal amount payable on the Notes at maturity. To the extent that a purchaser of a Note who treats the stated interest payable at maturity as qualified stated interest (as described above) acquires the Note at a price greater than the aggregate amount (other than such qualified stated interest) payable on such Note, 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 non-callable tax-exempt obligation must be amortized over the remaining term of the obligation: the amount of premium so amortized will reduce the owner's basis in such Note for federal income tax purposes,but such amortized premium will not be deductible for federal income tax purposes. Consequently, an owner of a Note who purchased the Note with bond premium and held the Note until paid at maturity generally will not realize tax gain or loss on such Note. 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 Note 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 Note to the owner. Purchasers should consult their own tax advisors as to the computation and treatment of such amortizable bond premium, including,but not limited to, the calculation of gain or loss upon the sale,maturity or other disposition of a Note. Pursuant to the Trust 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 and the Corporation in connection with the issuance of the Notes,the District and the Corporation will make representations relevant to the determination of, and will make certain covenants regarding or affecting, the exclusion of interest on the Notes 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 such representations and the present and future compliance by the District and the Corporation with such covenants referred to herein. Further, except as stated above, Special Counsel will express no opinion as to any federal or state tax consequences of the receipt of interest on, or the ownership or disposition of, the Notes. 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 and the Notes may affect the tax status of the Interest Component or the Note Interest Distributions. No assurance can be given that future legislation, if enacted into law, will not contain provisions that could directly or indirectly reduce the benefit of the exemption of such amounts from personal income taxation by the State of California or of the exclusion of the interest on the Notes from the gross income of the owners thereof for federal income tax purposes. Furthermore, Special Counsel will express no opinion as to any federal, state or local tax law consequences with respect to the Installment Purchase Agreement, the Notes,the Interest Component or Note Interest Distributions, if any action is taken with respect to the Installment Purchase Agreement, the Notes or the proceeds thereof, or the Trust Agreement predicated or permitted upon the advice or approval of other counsel. 52906807.6 53 Special Counsel's opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the District and the Corporation described above. No ruling has been sought from the Internal Revenue Service (the "Service") with respect to the matters addressed in the opinion of Special Counsel,and Special Counsel's opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an audit of the Notes is commenced, under current procedures the Service is likely to treat the District as the "taxpayer," and the owners would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the Interest Component and Note Interest Distributions accrued in respect of Notes, the District may have different or conflicting interest from the owners. Public awareness of any future audit of the Notes could adversely affect the value and liquidity of the Notes during the pendency of the audit,regardless of its ultimate outcome. Although Special Counsel is of the opinion that Interest Component and Note Interest Distributions in respect of a Note are exempt from California personal income tax and excluded from the gross income of the owners 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 Notes. 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 Notes 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 Notes and the Code contains additional limitations on interest deductions applicable to financial institutions that own tax-exempt obligations (such as the Notes), (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 Note Interest Distributions in respect of the Notes, (iii) Interest Component and Note Interest Distributions accrued in respect of Notes 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 Note Interest Distributions accrued in respect of Notes,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 Note Interest Distributions accrued in respect of Notes owned by such recipients for federal income tax purposes,and(vi)under section 32(i) of the Code, receipt of investment income, including Interest Component and Note Interest Distributions accrued in respect of Notes,may disqualify the recipient thereof from obtaining the earned income credit. Special Counsel has expressed no opinion regarding any such other tax consequences. Existing law may change to reduce or eliminate the benefit to noteholders of the exclusion of interest on the Interest Component and Note Interest Distributions accrued in respect of the Notes 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 Notes. Prospective purchasers of the Notes should consult with their own tax advisors with respect to any proposed or future changes in tax law. A copy of the form of opinion of Special Counsel to be delivered at the closing of the Notes is included in Appendix F. 52906807.6 54 CONTINUING DISCLOSURE The District has covenanted for the benefit of holders and beneficial owners of the Notes to provide notices of the occurrence of certain enumerated events. The notices of material events, if any, will be filed by the Dissemination Agent on behalf of the District with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the notices of enumerated events is set forth in the Continuing Disclosure Agreement. See APPENDIX D — "FORM OF CONTINUING DISCLOSURE AGREEMENT." This covenant has been made in order to assist the Initial Purchaser in complying with S.E.C. Rule 15c2-12 (the "Rule"). During the past five years, the District has never failed to comply in all material respects with any previous undertaking with respect to the Rule to provide annual reports or notices of material events. RATINGS The Notes will be assigned short-term ratings of" "by Standard&Poor's Ratings Services,a Standard&Poor's Financial Services LLC business("S&P")and"_"by Fitch Ratings("Fitch"). S&P and Fitch affirmed the long-term ratings of — and "." respectively, on the District's Existing Senior Obligations. Such ratings reflect only the views of the rating agencies, and do not constitute a recommendation to buy, sell or hold the Notes. 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 Notes. PURCHASE AND REOFFERING (the "Initial Purchaser") has purchased the Notes from the District at a competitive sale for a purchase price of$ (representing the aggregate principal amount of the Notes, plus a premium of$ , less an underwriter's discount of The public offering price may be changed from time to time by the Initial Purchaser. The Initial Purchaser may offer and sell Notes to certain dealers and others at prices lower than the offering price shown on the cover page hereof. 52906807.6 55 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 Notes. 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 52906807.6 56 APPENDIX A COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE ORANGE COUNTY SANITATION DISTRICT FOR FISCAL YEAR ENDED JUNE 30,2012 52906807.6 A-1 APPENDIX B THE COUNTY OF ORANGE-ECONOMIC AND DEMOGRAPHIC INFORMATION 52906807.6 B-1 APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS 52906807.6 C-1 APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT 52906807.6 D-1 APPENDIX E BOOK-ENTRY SYSTEM The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Notes,payment of principal and interest evidenced by the Notes to Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in the Notes, and other Note-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 far 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 "Notes"). The Notes will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other time as may be requested by an authorized representative of DTC. One fully-registered note will be issued for the Notes 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 Notes under the DTC system must be made by or through Direct Participants,which will receive a credit for the Notes on DTC's records. The ownership interest of each actual purchaser of each Note ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners me, 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 Notes are to be accomplished by entries made on 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 Notes, except in the event that use of the book-entry system for the Notes is discontinued. 52906807.6 E-I To facilitate subsequent transfers, all Notes deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other time as may be requested by an authorized representative of DTC. The deposit of Notes with DTC and their registration in the name of Cede&Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Notes; DTC's records reflect only the identity of the Direct Participants to whose accounts such Notes 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 Notes may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Notes, such as prepayments, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners of Notes may wish to ascertain that the nominee holding the Notes 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 Notes 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 Notes 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 Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy). Prepayments with respect to the Notes 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 the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, nor its nominee, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of prepayment proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Notes 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,Notes 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,Notes will be printed and delivered to DTC. 52906807.6 E-2 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 Notes, (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 Notes 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 Note for each of the maturities of the Notes, 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 Notes shall no longer be restricted to being registered in the certificate registration books in the name of Cede & Co., but shall be registered in such names as are requested in a certificate of the District, in accordance with the Trust Agreement. All Notes 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 Trustee may treat the Owner of any Note as the absolute owner of such Note for all purposes,whether or not such Note 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 Note shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge the liability evidenced by such Note to the extent of the sum or sums so paid. Whenever any Notes shall be surrendered for transfer, the Trustee shall execute and deliver new Notes 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. Notes may be presented for exchange at the Principal Office of the Trustee for a like aggregate principal amount of Notes 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 Note during the period in which the Trustee is selecting Notes for prepayment,nor shall the Trustee be required to transfer or exchange any Note or portion thereof selected for prepayment from and after the date of mailing the notice of prepayment thereof. 52906807.6 E-3 APPENDIX F FORM OF APPROVING OPINION OF SPECIAL COUNSEL Upon the execution and delivery of the Notes, Fulbright& Jaworski LLP, Los Angeles, California, Special Counsel to the District will render its final approving opinion with respect to the Notes in substantially the following form: [Date of Delivery] Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,California 92708-7018 Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A Ladies and Gentlemen: We have acted as Special Counsel in connection with the $ aggregate principal amount of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes"), which evidence direct, fractional undivided interests of the Owners thereof in the installment payment (the "Installment Payment'), and the interest thereon, to be made by the Orange County Sanitation District (the "District') pursuant to the Installment Purchase Agreement, dated as of October 1, 2013 (the `Installment Purchase Agreement'), by and between the District and the Orange County Sanitation District Financing Corporation(the"Corporation'). Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement"), by and between the District and the Corporation, the District has established conditions and terms upon which obligations such as the Installment Payment and the interest thereon, will be incurred and secured. The Installment Payment under the Installment Purchase Agreement is payable from (i)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, and (ii)other lawfully available funds of the District. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Installment purchase Agreement. The Notes are to be executed and delivered pursuant to a Trust Agreement, dated as of October 1, 2013 (the "Trust Agreement'), by and among the District, the Corporation and Union Bank, N.A., as trustee (the `Trustee"). Proceeds from the sale of the Notes will be used to (i)pay at maturity all of the Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2012C, currently outstanding in the aggregate principal amount of$131,700,000,and(ii)pay the costs incurred in connection with the execution and delivery of the Notes. Fulbright&Jaworskl LLP Is a limited liability partnership registered under the laws of Terns. Fulbright&Jaworski LLP, Notion Rose Fulbright LLP, thereon Rose Fulbright Australia, Notion Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa(incorporated as Deneys Reitz, Inc.),each of which Is a separate legal entity,are members of Norton Rase Fulbright Vedun,a Swiss Vereln. Details of each entity,with certain regulatory information,are at nodonrosetblbrightcom.Notion Rose Fulbdght Vereln he,coordinate the advil of the members but does not itself provide legal services to dlents. 52906807.6 F-1 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 Notes. We have also examined such certificates of officers of the District,the Corporation and others as we have considered necessary for the purposes of this opinion. Based upon the foregoing,we are of the opinion that: 1. The Master Agreement, the Installment Purchase Agreement and the Trust Agreement each has been duly and validly authorized,executed and delivered by the District and, assuming the Master Agreement, the Installment Purchase Agreement and the Trust Agreement each constitutes the legally valid and binding obligation of the other parties thereto, 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 Payment, 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, 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 Notes by the Trustee,the Notes 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 (the "Interest Component'), and the allocable portion thereof distributable in respect of any Note (the "Note 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 Notes are not "specified private activity bonds" within the meaning of section 57(a)(5)of the Code and,therefore,the Interest Component and the Note Interest Distributions will not 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 the Interest Component,and the Note Interest Distribution,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 on which the alternative minimum tax imposed by section 55 of the Code will be computed. We are further of the opinion that the Interest Component allocable to and the Note Interest Distributions in respect of a Note,are exempt from personal income taxes of the State of California under present state law. Pursuant to the Trust 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 Notes, the District will make representations relevant to the determination of, and will make certain covenants regarding or affecting, the exclusion of the Interest Component and the Note Interest Distribution from the gross income of the owners thereof for federal 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 such covenants. 52906807.6 F-I 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 Notes. Furthermore,we express no opinion as to any federal, state or local tax law consequences with respect to the Installment Purchase Agreement, Notes, Interest Component, or Note Interest Distributions, if any action is taken with respect to the Installment Purchase Agreement, the Master Agreement, the Trust Agreement, the Notes or the proceeds thereof,permitted or predicated on the advice or approval of counsel,if such advice or approval is given by counsel other than us. The rights of the owners of the Notes and the enforceability of the Notes, 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 Notes, 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 Notes. 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, 52906807.6 F-2 NRF DRAFT 09/04/13 OFFICIAL NOTICE INVITING BIDS $[Preliminary Par Amount] ORANGE COUNTY SANITATION DISTRICT REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES,SERIES 2013A (Book-Entry-Only) NOTICE IS HEREBY GIVEN that bids will be received by the Orange County Sanitation District (the "District") for the purchase of $[Preliminary Par Amount]" original principal amount of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes"). Bids for less than all of the Notes will not be accepted. The bids will be received in the form, in the manner and up to the time specified below(unless postponed as described herein): Date: Thursday,October 3,2013 11:30 a.m.,New York Time Electronic Bids: Electronic proposals may be submitted through the Parity® electronic bid submission system of Ipreo, at www.newissuehome.i-deal.com (the "Electronic Service"). The Electronic Service will act as agent of the bidder and not of the District in connection with the submission of bids and the District assumes no responsibility or liability for bids submitted through the Electronic Service. See "Information Regarding Electronic Proposals"herein. No Facsimile,Hand Delivery or No facsimile,hand delivery or sealed bids will be accepted. Sealed Bids: Terms of the Notes The Preliminary Official Statement for the Notes, dated September_ 2013, including the cover page and all appendices thereto (the "Preliminary Official Statement"), provides certain information concerning the sale and delivery of$[Preliminary Par Amountf aggregate principal amount of the Notes evidencing direct, undivided fractional interests in the Installment Payment (the "Installment Payment"), and the interest thereon,payable by the District pursuant to the Installment Purchase Agreement, dated as of October 1, 2013 (the "Installment Purchase Agreement'), by and between the District and the Orange County Sanitation District Financing Corporation (the "Corporation"). Each bidder must have obtained and reviewed the Preliminary Official Statement prior to bidding for the Notes. 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 Notes. Bidders must read the entire Preliminary Official Statement to obtain information essential to making an informed investment decision. Pursuant to the Master Agreement for District Obligations, dated as of August 1, 2000 (the "Master Agreement"), by and between the District and the Corporation, the District has established and 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. The Installment Preliminary,subject to change. ]9141959.4 Payment under the Installment Purchase Agreement is 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 Notes will be used to: (i)pay on October 30, 2013, all of the Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2012C, currently outstanding in the aggregate principal amount of$131,700,000 and(ii)pay the costs incurred in connection with the execution and delivery of the Notes. The Notes are to be executed and delivered pursuant to a Trust Agreement, dated as of October 1, 2013 (the `"Crust Agreement"), by and among the District, the Corporation and Union Bank,N.A., 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 September 25,2013,the District and the Corporation authorized the execution and delivery of the Installment Purchase Agreement,the Trust Agreement and the Notes. Outstanding Senior Obligations The District has outstanding Senior Obligations payable on a parity with the Installment Payment 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 201IA Installment Purchase Agreement, the 2012A Installment Purchase Agreement, the 2012B Installment Purchase Agreement and the 2012C Installment Purchase Agreement. Security and Source of Payments The Notes evidence direct, undivided fractional interests in the Installment Payment, and the interest thereon, paid by the District pursuant to the Installment Purchase Agreement. The obligation of the District to pay the Installment Payment 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 the Installment Payment from Net Revenues is on a parity with the District's obligation to make payments with respect to its other outstanding obligations described as Senior Obligations and all Reimbursement Obligations with respect to Senior Obligations, as provided in the Master Agreement. The Installment Purchase Agreement constitutes a Senior Obligation and is subject to the provisions of the Master Agreement and is afforded all of the advantages,benefits,interests and security for Senior Obligations pursuant to the Master Agreement. Pursuant to the Master Agreement, the District pledges all Net Revenues to the payment of the Senior Obligations and Reimbursement Obligations with respect to Senior Obligations, and the Net Revenues will not be used for any other purpose while any of the Senior Obligations or Reimbursement Obligations with respect to Senior Obligations remain unpaid; provided, however, that out of the Net Revenues there may be 79141959.4 2 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 NOTES—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 Payment upon satisfaction of conditions provided in the Master Agreement. No Obligations payable on such a subordinate basis me currently outstanding. See "SECURITY AND SOURCES OF PAYMENT FOR THE NOTES Limitations on Issuance of Additional Obligations" in the Preliminary Official Statement. Book-Entry-Only The Notes will be executed and delivered in the form of fully registered certificates payable in lawful money of the United States of America. The Notes 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 Notes. Individual purchases of the Notes will be made in book-entry form only. Purchasers of Notes will not receive 09141959.4 3 physical certificates representing their ownership interests in the Notes purchased. The Notes will be delivered in Authorized Denominations of $5,000 and any integral multiple thereof. Payments of principal and interest evidenced by the Notes 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 Notes. So long as the Notes are in the DTC book-entry system, the interest,principal and prepayment premiums,if any,due with respect to the Notes will be payable by the Trustee,or its agent,to DTC or its nominee. Principal and Interest Payments The Notes will mature on October 16, 2014* (the "Maturity Date"). The District expects the principal of and interest on the Notes to be paid from proceeds of the sale,prior to the Maturity Date, of a future series of certificates of participation, notes or other obligations of the District. The sale and delivery of a future series of certificates of participation, notes or other obligations of the District will depend on market conditions,certain approvals by the District and the Corporation and other factors. See "SECURITY AND SOURCES OF PAYMENT FOR THE NOTES" in the Preliminary Official Statement. No Prepayment The Notes are not subject to prepayment prior to their maturity. Interest Rates,Reoffering Prices,Premium Bids,and Certificate of Initial Purchaser Bidders must bid to purchase all and not part of the Notes and most submit their bids on the Official Bid Form. Bidders must specify a rate of interest for the Notes, expressed in multiples of either one-eighths (Vs) or one-twentieths 020) of one percent (1%; and no interest rate can exceed 4% per annum. The successful bidder will, within 30 minutes after being notified of the award of the Notes, advise the District of the initial bona fide public reoffering prices of the Notes on the date of award. The successful bidder will also be required to famish 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 Notes 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 Notes that might suggest that the initial sale of a substantial portion of the Notes to the public was at a materially higher price than the price stated for that maturity in the Certificate of Initial Purchaser. Bidders may bid to purchase Notes from the District with a premium; however, no bid will be considered if the bid is to purchase Notes at an aggregate price less than 100% or more than 104% of the aggregate principal amount of the Notes. 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 maybe rejected. See"Right to Reject Bids,Waive Irregularities"below. Preliminary; subject to change. 79141959.4 4 Adjustment of Principal Amounts After Receipt of Bids The principal amount of the Notes set forth in the Official Bid Form reflects an estimate of the District as to the likely interest rate of the winning bid and the premium contained in the winning bid. After selecting the winning bid,the principal amount of the Notes may be adjusted in$5,000 increments, if the District elects to do so, to reflect the actual interest rate and any premium in the winning bid to generate a dollar amount bid of at least$131,975,000 while maintaining the same "per Note"purchaser's discount and original issue 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 principal amount of the Notes 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 Notes. No Insurance THE SUCCESSFUL BIDDER SHALL NOT PURCHASE MUNICIPAL BOND INSURANCE IN CONNECTION WITH THE NOTES. Form of Bid BIDS FOR LESS THAN ALL OF THE NOTES WILL NOT BE ACCEPTED. Each bid must be on the Official Bid Form. All electronic proposals shall be deemed to incorporate the provisions of the Official Bid Form and must be unconditional and irrevocable. 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. 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 Electronic proposals must 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 Notes. 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 at (877) 588-5030. The District assumes no responsibility 79141959.4 5 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 (i) a financial surety bond ("Surety Bond") in the amount of$130,000 (the "Bid Security Deposit") issued by an insurance company rated in one of the top two rating categories by Moody's Investors Service, Fitch Ratings or Standard & Poor's Ratings Services, without regard to any modification of the rating, and licensed to issue such a bond in the State of California, naming the District as the beneficiary and identifying the bidder whose deposit is guaranteed by the Surety Bond or(ii)a wire transfer of immediately available federal funds. Surety Bonds. If the successful bidder has provided a Surety Bond, such bidder shall wire transfer to the District the amount of the Bid Security Deposit in immediately available federal funds not later than 3:00 p.m. (New York Time) on the business day next succeeding the day of acceptance of the bid, which amount shall be deposited in an escrow hand or account or a similar fund and applied to the purchase price of the Notes at the time of delivery of the Notes. If the District has not received such federal funds wire transfer by the time stated, the District may draw upon the Surety Bond to satisfy the successful bidder's Bid Security Deposit requirements. Wire Transfers. Any 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: Union Bank,N.A. ABA: 122000496 A/C#: 37130196431 A/C: TRUSDG FFC: OCSD 2013A/Acet No. 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 Notes. 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 Notes, 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,whether paid by federal funds wire or pursuant to the Surety Bond procedure set forth above, 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, dated September . 2013, which the District has"deemed final"for purposes of Rule 15c2-12 promulgated by the Securities and Exchange Commission, as amended (the "Rule"), although subject to revision, amendment and completion in conformity with the Rule. The District will provide the successful bidder such reasonable number of printed copies of the final Official Statement as such bidder may reasonably request no later than seven business days after the day the Notes we awarded. Up to 50 copies of the that 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 79141959.4 6 accepting the award, agree at all times to comply with the provisions of the Rule and with all applicable rates of the Municipal Securities Rulemaking Board. Award,Delivery and Payment If satisfactory bids are received, the Notes 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 Notes, which best price shall be that resulting in the lowest true interest cost with respect to the Notes. The true interest cost shall be computed by doubling the semi- annual interest rate(compounded semi-annually) necessary to discount the Installment Payment from the Maturity Date to the date of the Notes 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 Notes is expected to occur on or about October 16, 2013. The Notes will be delivered through the facilities of DTC, New York, New York. The successful bidder shall pay for the Notes on the date of delivery in Los Angeles, California in immediately available federal funds. Any expenses of providing federal funds shall be borne by the purchaser. Payment on the delivery date shall be made in an amount equal to the price bid for the Notes 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 Notes,but the District will assume no obligation for the assignment or printing of such numbers on the Notes or for the correctness of such numbers, and neither the failure to print such number on any Note 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 Notes. The cost for the assignment of CUSIP numbers to the Notes 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 Notes. Legal Opinions The District will furnish to the successful bidder at the closing of the Notes, 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 the Installment Payment and the allocable portion thereof distributable in respect of each Note 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 Notes. 79141959.4 7 Change in Tax Exempt Status At any time before the Notes me tendered for delivery, the successful bidder may disaffirm and withdraw its proposal if the interest on municipal securities of the same type and character as that evidenced by the Notes (as determined by Special Counsel) shall be declared to be includable in gross income under federal income tax laws, either by a ruling of the Internal Revenue Service or by a final decision of any federal court, or shall be declared taxable by the terms of any federal income tax law enacted subsequent to the date of this Official Notice Inviting Bids. Closing Documents The District will fomish to the successful bidder at the time of delivery of the Notes: (1)a certificate certifying (i) that as of and at the time of delivery of the Notes, 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 Notes or the Trust Agreement, (B) in any way contesting the validity of the Notes, 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 Notes, 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 Notes and the Official Statement does not on the date of delivery contain any untme 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 Notes 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 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 Croup, 11500 West Olympic Boulevard, Suite 502, Los Angeles, CA 90064,310-477-8487,via e-mail at lchoi@pragla.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 Notes being offered; provided, however, that such notifications or amendments shall be made not later than October 2, 2013, 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 Notes as so modified. 79141959.4 8 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 Notes 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 bid for the purchase of the Notes 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: September ,2013 79141959.4 9 Exhibit A Form of Initial Issue Price Certificate 2013 Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,CA 92708-7018 Fulbright&Jaworski LLP 555 South Flower Street,41'Floor Los Angeles,CA 90071 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 Revenue Refunding Certificate Anticipation Notes, Series 2013A (the"2013 Notes"). We hereby certify that: (i) , 2013 was the first day on which there was a binding contract in writing for the sale or exchange of the 2013 Notes by the District to the Underwriter, and on that day(the "Sale Date"), the Underwriter undertook pursuant to such contract to make a bona fide public offering of all of the 2013 Notes. On the Sale Date all of the 2013 Notes 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, on the cover page of the Official Statement dated 2013 relating to such offering (the "Official Statement"). The Initial Offering Price represented: (i) the Underwriter's reasonable determination of a fair market value on the Sale Date of the 2013 Notes; and (ii)the price at which the Underwriters reasonably expected to sell all the 2013 Notes 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 the 2013 Notes was sold by the Underwriter to the general public was the Initial Offering Price in respect of the 2013 Notes as described above; (iii) at the time that the Underwriter agreed to purchase the 2013 Notes, based upon then prevailing market conditions, the Underwriter had no reason to believe that the first sale of any of the 2013 Notes 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 the 2013 Notes, and treating the Initial Offering Price as the issue price of each 2013 Note, the aggregate issue price of the 2013 Notes is$ (the 2013 Notes having been sold with premium of$ );and (v) we provided the yield proof attached hereto as Exhibit A to Special Counsel; we make no representations regarding its legal sufficiency. 79141959.4 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 the gross income for federal income tax purposes of interest with respect to the 2013 Notes. [INITIAL PURCHASER], as Underwriter By: Title: 2 Exhibit A Yield Proof (See attached) 3 OFFICIAL BID FORM $[Preliminary Par Amount] ORANGE COUNTY SANITATION DISTRICT REVENUE REFUNDING CERTIFICATE ANTICIPATION NOTES,SERIES 2013A October 12013 Orange County Sanitation District 10844 Ellis Avenue Fountain Valley,CA 92708-7018 Attention: Lorenzo Tyner Ladies and Gentlemen: We hereby offer to purchase all of the $[Preliminary Par Amount]* aggregate principal amount of the Orange County Sanitation District (the "District') Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes"), more particularly described in your Official Notice Inviting Bids, dated September_,2013 (the"Official Notice Inviting Bids"),which is incorporated herein by reference,and made a part thereof, at a purchase price of$ (which purchase price is not less than 100% or more than 104% of the aggregate principal amount of the Notes). This offer is for Notes evidencing interest at the rate per annum of_%. 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 o� (PLEASE CHECK ONE OF THE FOLLOWING TWO PARAGRAPHS) [ ] A surety bond has been provided to the District in the amount of$ issued by an insurance company rated in one of the top two rating categories by Moody's Investors Service, Fitch Ratings or Standard & Poor's Ratings Services, without regard to any modification of the rating, and licensed to issue such a bond in the State of California, naming the District as the beneficiary and indentifying our bidding syndicate whose deposit is guaranteed by the surety bond. [ ] With this bid we we providing the District a wire transfer in immediately available federal funds in the amount of$ 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 Notes. If we are the successful bidder, we will (1) within 30 minutes after being notified of the verbal award of the Notes, advise the District of the initial public offering prices of the Notes; and (2) prior to delivery of the Notes famish a certificate, acceptable to Special Counsel, Preliminary; subject to change. 79141959.4 Fulbright&Jaworski LLP,as to the"issue price"of the Notes in the form specified in the Official Notice Inviting Bids. 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 Notes 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. 2 NOTICE OF INTENTION TO SELL Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes Series 2013A NOTICE IS HEREBY GIVEN that the Orange County Sanitation District(the"District') intends to receive sealed bids and electronic bids until 11:30 a.m.,New York time,on Thursday, October 3, 2013, through the use of the Parity® electronic bid submission system offered by Ipreo; at www.newissuehome.i-deal.com and the Parity bid delivery service, for the purchase of all of the District's Revenue Refunding Certificate Anticipation Notes, Series 2013A (the "Notes"), dated as of the date of initial delivery, and maturing on October 16, 2014 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 Notes 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 Notes 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@pragla.com. Orange County Sanitation District Dated: September.2013 Preliminary,subject to change. ADMINISTRATION COMMITTEE Meeting/13 Date T1.1 IDir. 09/119/25/13 AGENDA REPORT Item Number Item Nmbe 3 5 1 Orange County Sanitation District FROM: James D. Herberg, General Manager Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: IMPLEMENTATION OF ENFOTECH IPACS PRETREATMENT INFORMATION MANAGEMENT SOFTWARE SYSTEM GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Services Agreement with enfoTech & Consulting, Inc., Specification CS-2012-52513D, for Implementation of a Commercial-off-the-shelf Pretreatment Information Management System, for an amount not to exceed $749,993; and B. Approve first year technical support and maintenance for the amount of$65,266; and C. Approve a contingency of $81,526 (10%). SUMMARY The Pretreatment Information Management System is used by the Engineering and Facilities Support Services departments to centrally manage the industrial waste control and pretreatment program to ensure environmental compliance with operating permits. The Orange County Sanitation District (OCSD) is replacing our existing legacy pretreatment software solution with a commercial system (iPACS by enfoTech) that is used by multiple large publically owned wastewater treatment facilities. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION On June 13, 2012, OCSD issued a Request for Proposal (RFP) to implement a commercial-off-the-shelf Pretreatment Information Management System. The existing system was built over the period of 20 years by multiple software developers using contract and OCSD staff. At the time of inception, commercial products were not available. In the past seven years, at least four major software vendors have products specifically designed for the industrial waste control and pretreatment programs. Page 1 of 4 EnfoTech's iPACS product has been successfully implemented in a number of wastewater facilities including LA County Sanitation District, Metro Water Reclamation — Chicago, New York City, City of San Jose, and City of Phoenix. The standard product addresses core business processes. There are other functions that the OCSD compliance programs address and may need to be added as optional parts of the software solution. If the OCSD implementation team decides that the core functionality requires these additional enhancements, then the contingency will be used to include these options. On July 12, 2012, two proposals were received. A panel consisting of seven OCSD staff from Information Technology and Engineering reviewed and ranked each of the proposals in accordance with District procedures. This RFP used the consensus scoring method. During consensus scoring sessions, the evaluation facilitator directs the team's attention to each item in the specifications. The evaluation team considers one proposal at a time, comparing the vendor's proposed offering against the specifications in the underlying RFP. Consensus scoring sessions encourage open discussions and questions among members of the evaluation team. Evaluators discuss the relative strengths and weaknesses of a vendor's proposal in each area. The following criteria/weights were used to evaluate the proposals: Project Implementation Work Plan (15a/%), Proposed Alternatives to Out of Scope Items (15%), Software Functionality, Features, and Upgrade Roadmap (15%), Vendor Stability, Experience, and Past Performance in Delivering Product to a Similar Utility (25%), and Cost Evaluation (30%). The solution proposed by enfoTech & Consulting, Inc. was rated higher than the Inflection Point Solutions proposed solution. Note that the Inflection Point Solutions proposal did not include the Permit Fact Sheet system (approximately $88,000) or system documentation. Staff recommends awarding the Professional Services Agreement and maintenance agreement to enfoTech & Consulting, Inc. for a not-to-exceed amount of$815,259. OCSD's Pretreatment Program is extremely complex and therefore implementing a new software system that replaces the existing functionality carries some risk. EnfoTech was selected as it scored higher than the other vendor in several areas including understanding the project requirements and software Flexibility. EnfoTech proposal met more of OCSD requirements with no core product changes. Additionally, EnfoTech's gap analysis provided appropriate solutions and alternatives for the remaining functionality. The other vendor's solution was not clear and seemed to require a higher degree of customization and subsequently could result in higher upgrade costs and total cost of ownership. EnfoTech's application is based in modern technologies (.NET and J2EE), is web based and leverages reusable components. We believe this demonstrates that the application is well-planned, robust and easier to maintain. The EnfoTech solution includes a configurable interface that facilitates modification of the application to accommodate changes to OCSD processes that can be initiated as a response to the periodic audits conducted by regulators. A configurable application also facilitates support by OCSD staff and requires less dependence on the vendor for configuration changes. Conversely, the other proposed solution appears to be built with a legacy (at the end of its lifecycle) technology that requires installation of the application on each user's Page 2 of 4 workstation thereby requiring updates having to be applied to each workstation. Furthermore, the company representatives did not have a defined plan or schedule in place to update or modernize current product offering. The software owners will likely be responsible for funding this major upgrade. EnfoTech also has defined quality assurance practices that meet the Carnegie Mellon Capability Maturity Model (CMMI) Level 3 practices. These development and documentation processes demonstrate that the organization has standardized procedures for developing and maintaining software and that has documented and integrated their process with their engineering and management processes. EnfoTech's development methodology seems to be better suited towards replacing existing software with established business processes. In conclusion, the modern application architecture, the flexible and robust features and inclusion of a large percentage of requirements in the core product make the selection of EnfoTech's proposal the better choice to replace OCSD's aging application. OCSD's Pretreatment Program is substantially lower by selecting the enfoTech solution. On September 16, 2013, OCSD negotiated a price reduction of$30,400 with enfoTech. PROPOSAL EVALUATION TABLE Criteria Weight Weighted enfoTech & Inflection Point Score Consulting, Inc. Solutions. Evaluator Consensus Consensus Proposal Evaluation Work Plan 15 150.0 150.0 45.0 Proposed Alternatives 15 150.0 135.0 22.5 Software Functionality 15 150.0 135.0 67.5 Past Performance 25 250.0 175.0 125.0 Cost Evaluation 30 300.0 262.4 300.0 lqa 1 1 1110 1000 857.4 560 Proposed Base Cost $780,393 1 $528,000 Negotiated Cost 1 1 1 $749,993 CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Orange County Sanitation District's Delegation of Authority. This item has been budgeted under SP-135, Software and Computer Replacement. Page 3 of 4 ATTACHMENTS The following attachment(a) maybe viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: Professional Services Agreement Page 4 of 4 Return to Aaenda Reoorl PROFESSIONAL SERVICES AND SOFTWARE LICENSE AGREEMENT BETWEEN THE ORANGE COUNTY SANITATION DISTRICT AND ENFOTECH & CONSULTING, INC. Professional Consultant Services Agreement 1 of 22 Specification No.CS-2012-525BD TABLE OF CONTENT 1. DEFINITIONS................................................................................................................. 3 2. TERM OF THE AGREEMENT....................................................................................... 6 3. EXHIBITS....................................................................................................................... 6 4. ORDER OF PRECEDENCE........................................................................................... 6 5. SCOPE OF WORK......................................................................................................... 6 6. LICENSE........................................................................................................................7 7. COMPENSATION AND TERMS OF PAYMENT............................................................9 8. PERSONNEL.................................................................................................................9 9. INDEPENDENT CONTRACTOR...................................................................................10 10. WARRANTIES..............................................................................................................10 11. COMPLETION DATES - DEADLINE FOR OPERATIONAL USE.................................14 12. CHANGES IN WORK....................................................................................................14 13. NOTICES......................................................................................................................15 14. DISPUTE RESOLUTION...............................................................................................15 15. FORCE MAJEURE .......................................................................................................16 16. INDEMNIFICATION ......................................................................................................16 17. INFRINGEMENT CLAIMS.............................................................................................16 18. TERMINATION .............................................................................................................16 19. REMEDIES ...................................................................................................................18 20. CONFIDENTIAL INFORMATION..................................................................................18 21. INSURANCE.................................................................................................................19 22. WAIVER........................................................................................................................19 23. SEVERABILITY............................................................................................................19 24. ASSIGNMENT..............................................................................................................19 25. CHANGES IN CONTROL OF VENDOR.......................................................................19 26. APPLICABLE LAW......................................................................................................20 27. WHOLE AGREEMENT.................................................................................................20 28. MISCELLANEOUS .......................................................................................................20 Exhibit A— Proposal from Contractor dated July 12, 2012, including Onsite Interview Document dated January 10, 2013 Exhibit B— Pricing Payment Schedule Exhibit C—Project Schedule Exhibit D— Interface Control Document Exhibit E— Escrow Agreement Exhibit F—OCSD's Request for Proposal dated June 13, 2012, (provided previously to Contractor under separate cover) Professional Consultant Services Agreement 2 of 22 Specification No.CS-2012-525BD Return to Aaenda Report PROFESSIONAL SERVICES AND SOFTWARE LICENSE AGREEMENT Implementation of a Commercial-Off-The-Shelf(COTS) Pretreatment Information Management System Specification No.CS-2012-525BD THIS AGREEMENT is made and entered into as of the date fully executed below by and between Orange County Sanitation District, with a principal place of business at 10944 Ellis Avenue, Fountain Valley, CA 92708-7018 (hereinafter referred to as"OCSD") and enfoTech & Consulting, Inc. with a principal business at 1368 How Lane, North Brunswick, NJ 08902 (hereinafter referred to as"Contractor") collectively referred to as the "Parties". WHEREAS, OCSD's General Manager has determined the outsourcing of said Services is in the best interest of OCSD; and WHEREAS, on September 25, 2013, the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and Contractor; and WHEREAS, Contractor submitted its proposal, the final offer of which was dated July 15, 2013; and WHEREAS, OCSD has chosen Contractor to conduct Services in accordance with Purchasing Resolution No. OCSD07-04; and WHEREAS, OCSD desires to procure certain Products and Services from Contractor to facilitate the successful implementation of a commercial-off-the-shelf(COTS) pretreatment information management system; and, WHEREAS, Contractor is qualified to and desires to provide the System and perform the Services necessary to install, implement and maintain the System; and; WHEREAS, The word "System" is defined as the accumulated total of all Products and Services provided under this Agreement, and as described in Exhibit A; and, WHEREAS the parties desire to enter into this Agreement as hereinafter set forth; NOW THEREFORE, for the considerations hereinafter written, the parties agree as follows: 1. DEFINITIONS The following definitions apply to this Agreement: 1.1. Agreement. The term "Agreement" is defined as this Professional Services and Software License Agreement and its exhibits. In the event of any inconsistency between or among these documents, the inconsistency shall be resolved as stated in Section 4., Order of Precedence. 1.2. As-Built Documentation. The term "As-Built Documentation" means the Baseline Documentation plus the Documentation for any Configuration Changes and Customization Modifications All "As-Built Documentation" shall supplement and not conflict with the terms of this Agreement. In the event of a conflict, the terms of this Agreement shall prevail. Professional Consultant Services Agreement 3 of 22 Specification No.CS-2012-525BD 1.3. Baseline Documentation. The term "Baseline Documentation" refers to the Documentation for the version of the Contractor's Application Software installed prior to any Configuration Changes or Customization Modifications. All Baseline Documentation from Contractor shall supplement and not conflict with the terms of this Agreement. In the event of a conflict, the terms of this Agreement shall prevail. 1.4. Configuration Changes. The term "Configuration Changes" is defined as any modification or changes other than a Custom Modification. 1.5. Contractor Application Software. The term "Contractor Application Software" is defined as any Software owned or sublicensed, installed and/or configured by Contractor as a component of the Project, whether in machine readable or printed form, including, but not limited to any applications, modules, subsystems, Interfaces, Configuration Changes, Custom Modifications, Updates and Documentation. 1.6. Custom Modification. The term "Custom Modification" is defined as a modification of the Contractor Application Software Source Code or data base structure, which provides new or improved functions or features to address specific requirements of this Agreement. 1.7. Defect. The term "Defect' is defined as any error, failure, deficiency, or any other unacceptable variance or failure of the System or any component thereof to fully conform to the warranties and requirements described in this Agreement. With respect to the Contractor Application Software, the term "Defect' is defined as any error, failure, or deficiency or any other unacceptable variance from any required, specified, or expected program behaviors as may be required by OCSD or necessary for the Contractor Application Software to operate correctly and in full compliance with the terms of this Agreement. This includes expected program behaviors as described in any Contractor Application Software Documentation. In the event of a conflict between this Agreement and Documentation provided by Contractor to OCSD, the terms and conditions of this Agreement shall prevail. 1.5. Documentation. The term "Documentation" is defined as all written, electronic, or recorded works including all "As-Built Documentation" that describe the uses, features, functional capabilities, performance standards, and reliability standards of the System, or any subsystem, component, or Interface, and that are published or provided to OCSD by Contractor or its subcontractors, including, without limitation, all end user and system administrator manuals, help files, training aids and manuals, training and support guides, program listings, data models, flow charts, logic diagrams, and other materials related to or for use with the System. 1.9. Final System Acceptance. The term "Final System Acceptance" shall be defined as that date on which all Services in Exhibit A have been successfully completed by Contractor and accepted by OCSD. 1.10. Fix Pack. The term "Fix Pack' is defined as a formal release of programming code and documentation that provides corrections to any Contractor Application Software programs including, but not limited to, bug fixes, error corrections and patches. Professional Consultant Services Agreement 4 of 22 Specification No.CS-2012-525BD Return to Aaenda Report 1.11. Functional. Performance and Reliability Specifications and Requirements. The term "Functional, Performance and Reliability Specifications and Requirements" is defined as all definitions, descriptions, requirements, criteria, warranties, and performance standards relating to the System set forth in: (a)this Agreement; (b) any mutually agreed upon Change Orders pursuant to Section 12., Changes in Work; and (c)any functional and/or technical specifications which are published or provided by Contractor or its licensors or suppliers from time to time with respect to the System or any Products. 1.12. Interfaces. The term "Interfaces" is defined as one or more of the specialized software applications developed or sublicensed by Contractor and installed as a part of the Project for the purpose of sharing information (data) between Contractor and/or Contractor Application Software and any other software program or device. Functional requirements for each Interface to be included as a part of the System are provided in Exhibit D, Interface Control Document. 1.13. Products. The term "Products' is defined as all Software listed in Exhibit"A" and "B". 1.14. Pro iect. The term "Project" is defined as the totality of Contractor's obligation under this Agreement to develop, supply, install, configure, test, implement and maintain the System. 1.15. Services. The term "Services" is defined as the implementation, development, training, configuration, loading, testing, project management and other services to be provided by Contractor under this Agreement, including, without limitation, the tasks detailed in Exhibit A, Statement of Work. 1.16. Software. The term "Software" includes the following components provided and licensed by Contractor under this Agreement: (a) Contractor Application Software; (b) Third-Party Software; (c) Custom Modifications and (d) Interfaces. 1.17. System. The term "System' is defined as the collective whole of all Products and Services to be purchased, developed, licensed, supplied, installed, configured, tested and implemented by Contractor under this Agreement. 1.18. System Administrator Documentation. Is defined as that portion of the Documentation addressing the operation and maintenance functions of the System. 1.19. Third-Party Software. The term "Third-Party Software" is defined as any software to be supplied under this Agreement that is purchased or licensed directly from any source external to Contractor for use with or integration into the System. 1.20. Updates. The term "Updates" is defined as modifications, improvements, additions, and corrections to the Products and/or related Documentation, including functional and/or product enhancements, bug fixes, patches, new releases, new versions, and replacement modules or products that Contractor makes generally available to its customers with or without an additional fee. 1.21. Warranty Period. The term "Warranty Period" is defined as the 365-day period following the date of Final System Acceptance by OCSD. Professional Consultant Services Agreement 5 of 22 Specification No.CS-2012-525BD 1.22. Work Product. The term "Work Product" is defined as the Products and Services and all other programs, algorithms, reports, information, designs, plans and other items developed by Contractor under this Agreement, including all partial, intermediate or preliminary versions thereof. 2. TERM OF THE AGREEMENT 2.1. This Agreement shall be effective from the date of the Notice to Proceed and shall continue for a period of eighteen (18) months. 2.2. OCSD may, at its sole discretion, enter into a Maintenance Agreement for the continuation of all Maintenance services provided hereunder, after this Contract and the subsequent 365-day Warranty Period have terminated. 2.3. Contractor agrees to an increase of not more than two percent(2%) per year for said Maintenance services. 3. EXHIBITS The following Exhibits are incorporated into this Agreement: 1 Exhibit A—Proposal from Contractor dated July 12, 2012, including Onsite Interview Document dated January 10, 2013 2 Exhibit B—Pricing Payment Schedule 3 Exhibit C— Project Schedule 4 Exhibit D — Interface Control Document 5 Exhibit E— Escrow Agreement 6 Exhibit F—OCSD's Request for Proposal dated June 13, 2012, (provided previously to Contractor under separate cover) 7 ExhibitG—AcknowledgementofInsuranceRequirements 8 Appendices a. Appendix 1 —OCSD Equipment Configuration and Network Diagram b. Appendix 2—Draft OCSD Business Rules c. Appendix 3—Draft OCSD Business Processes d. Appendix 4—Draft OCSD Workflow 4. ORDER OF PRECEDENCE In the event of any inconsistency between the various documents that comprise this Agreement, the order of precedence shall be as follows: (i)the Agreement, (ii)the exhibits to the Agreement in the order in which they appear in Section 3., Exhibits. 5. SCOPE OF WORK General requirements for the scope of this Project are listed below. A detailed list of tasks and responsibilities are included in Exhibit A, Statement of Work. 5.1. Scope of Work Subject to the terms of this Agreement, Contractor shall perform the Services identified in Exhibit"A". Contractor warrants that all of its Services shall be performed in a competent, professional and satisfactory manner. 5.2. Modifications to Equipment and Facilities. OCSD shall be responsible for making OCSD-approved modifications identified in an OCSD approved, Site Analysis Report. Thereafter, Contractor will be precluded from asserting that it is unable to perform its obligations under this Agreement because of any pre-existing condition. During implementation, any changes to the System or any costs that may be incurred in order Professional Consultant Services Agreement 6 of 22 Specification No.CS-2012-525BD Return to Mende Report to complete the requirements of this Agreement but were not identified in the Site Analysis Report will be the sole and exclusive responsibility of Contractor. In addition, H the System is unable to meet the Functional, Performance and Reliability Specifications and Requirements in this Agreement after the identified upgrades and changes have been made, then Contractor will be responsible, at its own expense, for making any further upgrades or changes necessary to achieve this result. 5.3. Acquisition of Products. Exhibit A contains the list of Products to be purchased under the terms of this Agreement for the proper installation, operation and maintenance of the System. Products to be purchased shall be ordered at a time mutually agreeable to both parties. Products will be ordered only for the major subsystem currently scheduled for installation unless this requirement is modified through a mutually agreeable change order. If any Products (1) are missing from the acquisition list and required for the System to meet the Functional, Performance and Reliability Specifications and Requirements; or(2)are incompatible or otherwise unsuited for use by OCSD for OCSD's intended applications, then the Products will be added or replaced, as applicable, by Contractor at no additional charge to OCSD. 5.4. Shipment. Items shipped via commercial carrier are FOB destination at the fixed price stated herein. OCSD is responsible for facility preparation (such as appropriate and adequate power,janitorial services, air conditioning, space, all electrical drops, cabling, OCSD furnished items, security, etc.) not provided in Exhibit A, but necessary to accommodate equipment before, during, and after installation. 5.5. User Qualifications. OCSD shall use its best efforts to ensure that persons operating the System will be qualified, supervised, and trained in the use of personal computers and normal operations. Contractor will ensure that all training on the System or System components will be conducted professionally and effectively so that each operator trained by Contractor is proficient in its use. 5.6. Transition. Contractor will work with OCSD to ensure a smooth and efficient transition from OCSD's current systems to the new System and to minimize disruption to current operations, even K it necessitates working late evening, early morning, or weekend hours. Any required disruptions to OCSD's operations shall be scheduled in advance and approved by OCSD. 6. LICENSE 6.1. Grant of License. 6.1.1. Contractor hereby grants to OCSD a perpetual, irrevocable, nonexclusive, and nontransferable license under applicable copyrights and/or trade secrets (either site, node locked or per user as specified in Exhibits A and B)to use all Contractor Application Software provided under this Agreement for use by OCSD. OCSD shall have the right to use all Contractor Application Software or any portion thereof on any equipment, either locked on a single computer node (as determined by a specific LAN address), as a site license, or concurrently on a number of computer nodes so long as the number of concurrent uses does not exceed the number licensed for the LAN, or on one or more backup computer nodes. OCSD shall permit Contractor reasonable, pre-scheduled access (Monday through Friday, 8:00 to 5:00 PM PST)to OCSD facilities for license administration audit purposes. Professional Consultant Services Agreement 7 of 22 Specification No.CS-2012-525BD 6.1.2. OCSD shall have the right to use all Contractor Application Software as may be necessary in order to operate the System purchased under this Agreement. In addition, OCSD shall have the right to use the Contractor Application Software as necessary to (a) operate the System (b) conduct internal training and testing, and (c) perform disaster recovery, backup, archive and restoration testing and implementation as may be required in OCSD's judgment. This license shall apply to all commercially available Updates throughout the term of this Agreement. OCSD shall have the right to use all Contractor Application Software licensed under this Agreement on any equipment at any facility and at any location and may make as many copies of the software as it desires to support its authorized use of the software, provided the copies include Contractor's or the third-party owner's copyright or other proprietary notices. 6.1.3. All license rights of Third Party Software shall originate from the manufacturer. All Third Party Software licenses shall be provided to OCSD and become effective at the time the product is used by OCSD in a live environment. 6.1.4. The approval of Contractor to use Contractor Application Software and Third Party Software and OCSD's use of it shall not constitute a waiver of OCSD's right to reject the System, in whole or in part, if the requirements for Final System Acceptance are not met. 6.2. Limitations on License. Except as licensed to OCSD, Contractor retains all of its current rights, title, and interest in the Contractor Application Software, including Derivative Works, Custom Modifications, Configuration Changes and Updates. Unless authorized by Contractor or required by law, OCSD will not: (1) make available or distribute all or part of the Software to any third party by assignment, sublicense or any other means; or (2)disassemble, decompile, or reverse engineer the Software, or allow any third party to do so. 6.3. Security. Certain Software Packages are required to operate in conjunction with a hardware lock device or in conjunction with license administration software and a license authorization key provided by Contractor or its representative. OCSD shall take no steps to avoid or defeat the purpose of any required lock device or authorization key. Use of any Software Package without a required lock device or authorization key shall be unlicensed under this Agreement. 6.4. Restricted Access. OCSD shall use every reasonable method to restrict access to the Contractor Application Software, or Documentation related thereto, to persons not authorized to use the Contractor Application Software under the terms of this Agreement. OCSD shall not copy the Contractor Application Software or Documentation except as necessary for use under this Agreement. OCSD shall not decrypt, reverse compile or disassemble the Contractor Application Software. OCSD shall not export or re-export the Contractor Application Software or Documentation. Furthermore, OCSD shall abide by all applicable Federal and State Trademark and Copyright laws. Professional Consultant Services Agreement 8 of 22 Specification No.CS-2012-525BD Return to Aaentle Report 7. COMPENSATION AND TERMS OF PAYMENT 7.1. Compensation. The total price to be paid to Contractor in consideration for the System shall not exceed Seven Hundred Forty-nine Thousand Nine Hundred Ninety-three and 00/00 Dollars ($749,993.00). This price is inclusive of all Products and Services including all taxes, shipping, handling and miscellaneous charges through the 365-day Warranty Period. This amount shall be the maximum price to be paid to Contractor by OCSD through the 365-day Warranty Period, unless modified by mutual agreement through the Change Order process described in Section 12, Changes in Work. All prices listed in Exhibit B are valid until the end of the 365 day Warranty Period and subject to change only through the change order process as described in Section 12, Changes in Work. 7.2. Terms of Payment. Upon completion of each milestone identified in Exhibit C, Payment Schedule, Contractor will notify OCSD and request payment for the Products and Services related to the milestone in accordance with the Schedule. Upon receipt of Contractor's notification and request for payment, OCSD will review in a timely manner the tasks, the Products and Services delivered and installed by Contractor that are associated with the milestone. If it appears to OCSD from the then available information that the tasks, Products, and Services comply with the terms and conditions of this Agreement, OCSD will provide written authorization for Contractor to invoice OCSD for the Products and Services related to the milestone. Should OCSD reject Contractor's request for payment, OCSD will provide in writing the reasons for its rejection within thirty (30)days of receipt of Contractor's request for payment. Authorization to invoice shall not constitute a waiver of OCSD's right to reject the System, in whole or in part, if the requirements for Final System Acceptance are not met. 7.3. Retainage. OCSD will withhold twenty-five percent(25%) of each invoice amount ("Retainage"). Within forty-five (45) days after Final System Acceptance, OCSD shall pay Contractor the full Retainage amount. 7.4. Audit. During the term for this Agreement and for a period of three (3) years after termination or expiration of this Agreement, OCSD has the right to audit, either itself or through a third party, the books and records (including but not limited to the technical records) of Contractor related to this Agreement or Contractor's performance hereof to ensure Contractor's compliance with the terms and conditions of this Agreement. The scope of the audit will be reasonably tailored to the circumstances requiring the audit, will be conducted during Contractor's normal business hours, and will not unreasonably disrupt or interfere with Contractor's normal business operations. Any financial audits shall be performed according to generally accepted accounting standards. 8. PERSONNEL 8.1. Subcontracting. Contractor may not subcontract any of its obligations under this Agreement without the prior written consent of OCSD. Contractor shall be the Prime Contractor and shall remain fully responsible for the performance of all obligations under this Agreement. Contractor shall also be fully responsible to OCSD for the acts and omissions of any subcontractor and any persons directly or indirectly employed by the subcontractor to the same extent Contractor would be responsible for the acts or omissions of its own agents or employees. Nothing in this Agreement creates any contractual obligations by OCSD to any subcontractor(s). Professional Consultant Services Agreement 9 of 22 Specification No.CS-2012-525BD 8.2. Access to Premises. OCSD shall provide Contractor with reasonable and timely access to the sites and personnel necessary for Contractor to perform its obligations under this Agreement. OCSD shall allow Contractor personnel reasonable access to OCSD site and facilities (telephone,facsimile, parking, etc.) during normal business hours and at other reasonable times as requested by Contractor and pre-approved by OCSD. The assistance or presence of OCSD's personnel will not relieve Contractor of any responsibilities under this Agreement. 8.3. Compliance with Work Rules. Contractor will ensure that, while they are on OCSD premises, Contractor's personnel and subcontractors will comply with OCSD's working rules and policies, including OCSD's security procedures. 8.4. Background Checks and Removal of Personnel. Prior to being allowed to perform any work on this Project, all non-OCSD personnel assigned to the Project may be required to submit to and pass a background check by the Fountain Valley, California Police Department. In addition, OCSD shall have the sole and exclusive right to require Contractor to immediately remove any individual from the Project for any reason deemed to be in the best interests of OCSD. Contractor shall replace any employee removed from the project within ten (10) business days of said removal. 9. INDEPENDENT CONTRACTOR 9.1. Contractor is and shall remain an independent contractor in the performance of this Agreement. Neither Contractor nor its employees or agents shall represent themselves to be, nor shall they be employees of OCSD. Contractor assumes full responsibility for their actions while on-site at OCSD and/or working on OCSD project. 9.2. Contractor is solely responsible for paying the compensation of any personnel supplied by Contractor to perform Contractor's obligations under this Agreement. OCSD is not responsible for providing workers' compensation, disability benefits, unemployment insurance or any fringe benefits to these individuals, or for withholding incomes taxes or social security for these individuals. 9.3. Contractor shall indemnify, defend, and hold OCSD harmless for any tax, retirement contribution, social security withholding, overtime payment, unemployment payment, or workers' compensation payment that OCSD may be required to make on behalf of Contractor or any employee or subcontractor of Contractor for work done under this Agreement. At OCSD's election, the indemnification amount may be deducted from any balance owing by OCSD to Contractor. 10.WARRANTIES 10.1. System Warranty. Contractor warrants that the System will meet the Functional, Performance and Reliability Specifications and Requirements as defined in this Agreement. The System and/or each of its subsystems, components and Interfaces will be capable of operating fully and correctly in conjunction with the System Hardware. Contractor warrants that for the term of this Agreement, the System will perform as described in this Section in material and workmanship and will remain in good working order. In the event the System does not meet these warranties, Contractor shall provide, at no charge, the necessary software, hardware, and/or services required to attain the levels or standards contained in these warranties. Professional Consultant Services Agreement 10 of 22 Specification No.CS-2012-525BD Return to Mends Report 10.2. Contractor Application Software Warranties. Contractor warrants that it owns or otherwise has the right to license the Contractor Application Software to OCSD and that it possesses all rights and interests necessary to enter into this Agreement. In addition, Contractor warrants that: 10.2.1.All Contractor Application Software licensed under this Agreement is free of known Defects, viruses, worms and Trojan horses, and any code designed to disable the Software because of the passage of time, alleged failure to make payments due, or otherwise (except for documented security measures such as password expiration functions); 10.2.2. During the term of the Agreement; the Contractor Application Software will meet or exceed the Functional, Performance and Reliability Specifications and Requirements herein; 10.2.3.The Contractor Application Software will: (1) store all date-related information and process all data Interfaces involving dates in a manner that unambiguously identifies the century, for all date values before, during and after the Year 2000; (2) calculate, sort, report and otherwise operate correctly and in a consistent manner for all date information processed, whether before, during or after the Year 2000; (3)calculate, sort, report and otherwise operate correctly, in a consistent manner and without interruption regardless of whether the date on which the Software is operated or executed is before, during or after the Year 2000; (4) report and display all dates with a four-digit date so that the century is unambiguously identified; and (5) handle all leap years correctly; 10.2.4.Contractor Application Software is and will be general release versions that have been fully tested at Contractor's site in accordance with best industry practices, and are not beta or pre-release versions (unless agreed to in writing by OCSD); and, 10.2.5.Custom Modifications and Interfaces have been fully tested in accordance with best industry practices and are free of known Defects. Contractor further agrees that during the term of this Agreement, Contractor will provide OCSD, if OCSD so desires, with any Updates at no additional cost(including any and all costs associated with the installation of those Updates) immediately upon their commercial availability to any other entity. 10.3. Work Quality Warranty. Contractor warrants that all work performed by Contractor and/or its subcontractors under this Agreement will conform to best industry practices and will be performed in a professional and workmanlike manner by staff with the necessary skills, experience and knowledge to do so. 10.4. Regulatory Warranty. Contractor warrants that, for the Term of this Agreement, the System will comply with all processing and reporting requirements for State and Federal laws, and regulations. If the Software requires updating due to a change in a State or Federal law, or regulation, affecting OCSD, Contractor will provide these changes per a mutually agreed to schedule at no additional charge to OCSD. Professional Consultant Services Agreement 11 of 22 Specification No.CS-2012-5258D Notwithstanding this provision, in no event shall Contractor provide said update later than the date required by the State or Federal law or regulation affecting OCSD. In the event OCSD is notified of a change in State or Federal law or regulations that requires updating the Software, OCSD will notify Contractor of that change as soon as reasonably possible. 10.5. Documentation Warranty. Contractor warrants that,for the Term of this Agreement, the Documentation for all licensed Contractor Application Software will be complete and accurate in all material respects. The Documentation will be revised to reflect all Updates and Interfaces provided by Contractor under this Agreement. All revisions will be of equal quality to the initial Documentation provided to OCSD and will be delivered to OCSD within thirty (30)days, or such other time period mutually agreed upon, after the Updates or Interfaces have been delivered to OCSD. This includes documentation on any Custom Modification or Configuration Changes made to the System by Contractor during the installation process. 10.6. System Reliability Warranty. During the ninety (90)day Final System Acceptance Test Period, Contractor warrants the System will be fully and properly operational for ninety (90%) of the time or better with no reproducible Defects ("System Uptime Standard"). At the end of this test period, if the System availability has not met or exceeded this required level, the Final System Acceptance Test period will continue until this level of reliability has been demonstrated for at least sixty(60) consecutive calendar days. The System shall not be considered down if it is fully operational in a backup mode or via replacement with spares, pending the receipt of replacement components and repair of the failed component. Downtime will begin when Contractor has been notified of the Defect that creates a violation of this warranty. The Mobile Workforce components of the System will not cause any material delays in network performance or other delays or problems with other equipment on the OCSD network. Contractor will not be responsible for delays caused by a public carrier or a public carrier's backbone used as the transport medium. Contractor shall configure the system so that performance of higher priority applications and/or service requests (as identified by OCSD) shall not be impacted by lower priority system use. 10.7. Service Warranty. During the term of this Agreement, Contractor warrants that it will remedy any failure, malfunction, Defect or nonconformity in the System, as follows: 10.7.1.Priority One (P1) Defects. For purposes of this Warranty, a P1 Defect includes, but is not limited to, loss of data, data corruption, a System or subsystem abort, any condition where productive use of the System or any component thereof is prohibited and no acceptable workaround is available. Examples of P1 Defects include, but are not limited to: 10.7.1.1. System is down 10.7.1.2. Application, module or Interface is down or non-operational 10.7.1.3. An Interface or application critical to System operation is substantially impaired or problematic 10.7.1.4. Loss of data or data corruption after data has been entered 10.7.1.5. A subsystem or component thereof is non-functional 10.7.1.6. Productive use is prohibited Professional Consultant Services Agreement 12 of 22 Specification No.CS-2012-525BD Return to Mende Report 10.7.1.7. a Server or workstation goes down 10.7.1.8. two or more workstations or mobile devices lockup or malfunction intermittently 10.7.1.9. a user cannot log on to the System 10.7.2. Priority Two (P2) Defects. For purposes of this Warranty a P2 Defect includes, but is not limited to, compromise of the primary purpose of the System, subsystem or Interface to an external system. Productive use by the end user is substantially impacted and an acceptable workaround is not available. Examples of P2 Defects include, but are not limited to: 10.7.2.1. a software function does not work correctly. 10.7.2.2. The user cannot produce a report with correct calculations 10.7.2.3. System, subsystem or an Interface performance is deemed unacceptable per the Functional, Performance, and Reliability Specifications and Requirements. 10.7.2.4. Incorrect cross streets are displayed on a verified address or location 10.7.2.5. Cannot create a scheduled event 10.7.2.6. A single workstation or mobile device locks up or malfunctions intermittently 10.7.3. Priority Three (P3) Defects. For purposes of this Warranty, a P3 Defect includes, but is not limited to, incomplete operation of a System component which impacts productivity of staff but an acceptable workaround is generally available. Examples of P3 Defects include but are not limited to: 10.7.3.1. Single workstation or mobile device locks up intermittently but infrequently 10.7.3.2. Minor deficiencies occur intermittently in any component of the System 10.7.3.3. A mapping function doesn't work but the failure does not interfere with the user's ability to perform required tasks 10.7.3.4. A report does not function or report provides incorrect results 10.7.3.5. An incorrect message is presented in a dialog box 10.7.4. Priority Four(P4) Defects. For purposes of this Warranty, a P4 Defect consists of those problems deemed by OCSD to be mainly cosmetic. Examples of P4 Defects include, but are not limited to: 10.7.4.1. A misspelled word in the header of a report or in a help file 10.7.4.2. A minor error in output that does not interfere with the correct outputting of statistics from the system 10.7.4.3. Minor printing errors in a report that does not impede OCSD's ability to utilize the report for the required purpose. 10.7.4.4. Minor variances in text where the help file does not match the documentation 10.7.4.5. Minor variances in text where the documentation doesn't match the functionality but the System works properly 10.7.4.6. A print button doesn't work but the user can still print without opening or closing multiple windows or loosing data or rebooting the system. Professional Consultant Services Agreement 13 of 22 Specification No.CS-2012-525BD 10.7.5.Multiple Failures. Any situation involving multiple, contemporaneous failures, regardless of their individual priorities, will be regarded as a Priority One Defect if, in OCSD's determination, the situation results in OCSD having essentially no productive use of the System or a major subsystem. 10.7.6.Permanent Cure. If OCSD accepts a workaround or other temporary cure as the remedy for any reported Defect, Contractor shall provide and install at no cost to OCSD a permanent correction or cure within ten (10)days after the permanent cure becomes available. 10.7.7.Third-party Warranty Coverage. Third-party products are provided with a pass- thru-warranty from the original manufacturer. 11. COMPLETION DATES-DEADLINE FOR OPERATIONAL USE 11.1. Time is of the Essence. The parties acknowledge and agree that time is of the essence in completing the Project and performing the obligations set forth in this Agreement. The term of this Agreement may not be extended except as provided in Section 12., Changes in Work. 11.2. Effect on Project Schedule. The time periods and requirements set forth in System Acceptance, Section 11.3, will not excuse Contractor from complying with the completion dates set forth in the Project Schedule. Unless otherwise specified, the completion dates set forth in the Project Schedule constitute the dates by which Contractor must complete the testing required by this Agreement and achieve Final System Acceptance of the System installed. 11.3. Deadline for Final System Acceptance. The System must be fully operational and in full productive use and Final System Acceptance must occur no later than eighteen (18) months from Notice to Proceed. 12. CHANGES IN WORK If, in the course of performing this Agreement, Contractor or OCSD proposes changes to the Project, and informal consultation with the other party indicates that a change in the terms and conditions of this Agreement may be warranted, Contractor or OCSD may request a change in this Agreement. The changes must be processed in the following manner: Contractor will forward a letter outlining the proposed changes, including any changes in the fees, the Statement of Work, the Project Schedule, or related documents, to OCSD. The parties will meet to discuss and negotiate the requested change order documents. Upon completion of those negotiations, the negotiated change order documents will be submitted to OCSD for approval. Upon approval by OCSD, an "Order to Proceed"with the approved changes will be submitted to Contractor. Any change order will not render ineffective or invalidate any other portions of this Agreement. Professional Consultant Services Agreement 14 of 22 Specification No.CS-2012-525BD Return to Mende Report 13. NOTICES All notices under this Agreement must be in writing. Written notice shall be sent by registered or certified mail, postage prepaid, return receipt requested, or by any other overnight delivery service which delivers to the noticed destination and provides proof of delivery to the sender. Any facsimile notice must be followed within three (3) days by written notice. All notices shall be effective when first received at the following addresses: OCSD: Clarice M. Marcin Senior Contracts Administrator Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Contractor: Company 14. DISPUTE RESOLUTION 14.1. If a dispute arises out of or relates to this Agreement, the following procedure will be used to resolve any questions of fact or interpretation. First, the parties will each reduce the dispute and their respective position to writing. Each party will then forward a copy to the other along with a proposed resolution.Within ten (10) business days, each party will reply to the other's proposal, commenting on the proposed resolution and offering additional suggestions for resolution, K appropriate and applicable. If this process does not result in a mutually agreeable resolution, the writings and replies will be forwarded to OCSD Director of Information Technology for resolution. OCSD Director of Information Technology will consider the facts and resolutions proposed by each party and may then direct a solution to the problem. In such cases, the action of OCSD Director of Information Technology will be OCSD's final position on the matter. In the event a solution is not reached under this procedure, the parties agree to the following: 14.1.1. In the event of a dispute as to the construction or interpretation of this Agreement, or any rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the dispute by mediation. The Parties shall mutually select a mediator to facilitate the resolution of the dispute. If the Parties are unable to agree on a mediator, the mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Agreement, through the alternate dispute resolution procedures of Judicial Arbitration through Mediation Services of Orange County("JAMS"), or any similar organization or entity conducting an alternate dispute resolution process. 14.1.2. In the event the Parties are unable to timely resolve the dispute through mediation, the issues in dispute shall be submitted to arbitration pursuant to California Code of Civil Procedure, Part 3, Title 9, Sections 1280 et seq. For such purpose, an agreed arbitrator shall be selected, or in the absence of agreement, each party shall select an arbitrator, and those two arbitrators shall select a third. Discovery may be conducted in connection with the arbitration proceeding pursuant Professional Consultant Services Agreement 15 of 22 Specification No.CS-2012-525BD to California Code of Civil Procedure Section 1283.05. The arbitrator, or three arbitrators acting as a board, shall take such evidence and make such investigation as deemed appropriate and shall render a written decision on the matter in question. The arbitrator shall decide each and every dispute in accordance with the laws of the State of California. The arbitrator's decision and award shall be subject to review for errors of fact or law in the Superior Court for the County of Orange, with a right of appeal from anyjudgment issued therein. 15. FORCE MAJEURE Neither party shall be liable for delays caused by accident, flood, acts of God, fire, labor trouble, war, acts of government or any other cause beyond its control, but said party shall use reasonable efforts to minimize the extent of the delay. Work affected by a Force Majeure condition may be rescheduled by mutual consent or may be eliminated from the Agreement. 16. INDEMNIFICATION Contractor agrees to save, indemnify, defend and hold harmless OCSD against any and all liability, claims,judgments, cost and demands, including demands arising from injuries or death of persons and damage to property, arising directly or indirectly out of the negligence or willful misconduct of Contractor, its employees or agents, in relation to the rendition of services pursuant to this Agreement, except claims or litigations arising through the sole negligence or willful misconduct of OCSD. Contractor agrees to reimburse OCSD for any expenditure, including reasonable attorney's fees, OCSD may incur by reason Of such matters, and, if requested by OCSD, will defend any such suits at the cost and expense of Contractor. 17. INFRINGEMENT CLAIMS If an infringement claim occurs, Contractor has thirty (30) days after the receipt of OCSD's written notice of the claim or the date on which Contractor first becomes aware of the claim, whichever is sooner, to either: (a) procure for OCSD the right to continue using the affected Product, Service, subsystem, component or Interface and deliver or provide the Product, Service, subsystem, component, or Interface to OCSD; or(b) repair or replace the infringing Product, Service, subsystem, component, or Interface so that it becomes non-infringing, provided the performance of the System or any subsystems, components, or Interfaces is not adversely affected by the replacement or modification. In the event Contractor is unable to comply with either subsection (a) or(b) of this paragraph within thirty (30)days, OCSD may terminate this Agreement without any further obligation to Contractor. In the event of termination, in addition to any other legal remedies available to OCSD, Contractor will refund OCSD within ten (10)days of OCSD's notice of termination, the license fees OCSD paid to Contractor for the Product, Service, subsystem, component or Interface. If the inability to comply with either subsection (a) or(b) of this paragraph causes the System to fail to meet the Functional, Performance and Reliability Specifications and Requirements or to otherwise become ineffective, Contractor will refund OCSD all fees paid to Contractor under this Agreement. 18. TERMINATION 18.1 OCSD reserves the right to terminate this Agreement for its convenience, with or without cause, in whole or in part, at any time, by written notice from OCSD, (delivered by certified mail, return receipt requested)of intent to terminate. Upon receipt of a termination notice, Contractor shall immediately discontinue all work under this Agreement (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30)days, pay Contractor for work performed (cost and fee)to the date Professional Consultant Services Agreement 16 of 22 Specification No.CS-2012-525BD Return to Mende Report of termination. Contractor expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Agreement. Such notice of termination shall terminate this Agreement and release OCSD from any further fee, cost or claim hereunder by Contractor other than for work performed to the date of termination. 18.2 OCSD reserves the right to terminate this Agreement immediately upon OCSD'S determination that Contractor is not meeting specification requirements, if the level of service is inadequate, or any other default of this Agreement. 18.3 OCSD may also immediately cancel for default of this Agreement in whole or in part by written notice to Contractor: • if Contractor becomes insolvent or files a petition under the Bankruptcy Act; or • if Contractor sells its business; or • if Contractor breaches any of the terms of this Agreement; or • if total amount of compensation exceeds the amount authorized under this Agreement. 18.4 All OCSD property in the possession or control of Contractor shall be returned by Contractor to OCSD upon demand, or at the termination of this Agreement, whichever occurs first. In addition, Contractor will deliver to OCSD all Work Product currently in existence and for which payment has been made. 18.5 Upon termination or expiration of this Agreement, Contractor will cooperate with OCSD to assist with the orderly transfer of services, functions, and operations provided by Contractor under this Agreement to another provider or to OCSD as determined by OCSD in its sole discretion. Prior to the termination or expiration of this Agreement, OCSD may require Contractor to perform those transition services described below that OCSD deems necessary to migrate Contractor's work to another provider or to OCSD. Transition services may include, but are not limited to the following: 18.5.1 Pre-Migration Services. 18.5.1.1 Working with OCSD to jointly develop a mutually agreed upon Transition Services Plan to facilitate the termination of the services; 18.5.1.2 Notifying all affected vendors and subcontractors of Contractor; and 18.5.1.3 Freezing all non-critical changes to the System. 18.5.2 Migration and Post-Migration. 18.5.2.1 Performing the Transition Services Plan activities. 18.5.2.2 Answering questions regarding the services performed by Contractor or the System on an as-needed basis; 18.5.2.3 Providing such other reasonable services needed to effectuate an orderly transition to a new System. 18.6 OCSD agrees to pay Contractor for transition services at an hourly rate of $150 per hour, plus reasonable out-of-pocket expenses not to exceed ten percent (10%)of the aggregate hourly compensation paid. Professional Consultant Services Agreement 17 of 22 Specification No.CS-2012-525BD 19. REMEDIES 19.1 In addition to other remedies available in law or equity, if the Contractor fails to make delivery of the goods or Services or repudiates its obligations under this Agreement, or if OCSD rejects the goods or Services or revokes acceptance of the goods or Services, OCSD may (1) cancel the Agreement; (2) recover whatever amount of the purchase price OCSD has paid, and/or (3) "cover" by purchasing, or contracting to purchase, substitute goods or Services for those due from Contractor. In the event OCSD elects to "cover" as described in (3), OCSD shall be entitled to recover from Contractor as damages the difference between the cost of the substitute goods or Services and the contract price, together with any incidental or consequential damages. 19.2 Other Remedies: Upon termination of this Agreement, OCSD may seek all legal and equitable remedies to which it is entitled. The remedies contained in this Agreement are cumulative and in addition to any other available remedies. 20. CONFIDENTIAL INFORMATION 20.1 OCSD Confidential Information. Contractor will regard all OCSD files and data as confidential information. Contractor will not disclose confidential information without the written consent of OCSD. 20.2 Contractor Confidential Information. OCSD will regard Contractor's files and data, Contractor's Application Software and Documentation, and any other information or data provided by Contractor that is clearly identified "confidential" or "proprietary" as Contractor's confidential information. OCSD will not disclose Contractor's confidential information except to OCSD's consultants and contractors, as identified in this Agreement, who are working on or with the System who agree to abide by the terms of this provision, without the prior written consent of Contractor 20.3 The above obligations do not apply to any information which: 20.3.1 Is already in the public domain at the time of disclosure or becomes available to the public without a breach of this Agreement; 20.3.2 Was, as between OCSD and Contractor, lawfully in the possession of the recipient without any obligation of confidentiality, prior to its receipt under this Agreement; 20.3.3 Is received independently from a third party free who is free to disclose the information; 20.3.4 Is the subject of a judicial subpoena or similar process for disclosure in connection with any action or proceeding, provided that notice of the demand is provided to allow the interested party an opportunity to seek a protective order or other appropriate remedy prior to disclosure; or 20.3.5 Is independently developed. 20.4 Public Records Act Reauests. In the event OCSD receives a request under the California Public Records Act for Contractor's confidential information, OCSD will promptly notify Contractor. Within five (5) days after receiving the notice, Contractor will inform OCSD whether Contractor objects to disclosure of the requested information. If Contractor does not object to disclosure or if Contractor Professional Consultant Services Agreement 18 of 22 Specification No.CS-2012-525BD Return to Mende Report fails to respond to OCSD within five (5) days, OCSD will be relieved of its obligation with respect to the requested information and may release the requested information free of obligation or liability to Contractor. If Contractor does object to disclosure, then OCSD will decline to produce the requested information and Contractor shall indemnify, defend, and hold OCSD and its officers and employees harmless from and against all resulting claims, damages, costs of litigation and attorney fees. 21. INSURANCE Contractor and all subcontractors shall purchase and maintain, throughout the life of this Agreement and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements (attached hereto and incorporated herein as Exhibit "G'). Contractor shall not commence work under this Agreement until all required insurance is obtained in a form acceptable to OCSD, nor shall Contractor allow any subcontractor to commence service pursuant to a subcontract until all insurance required of the subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Agreement 22. WAIVER The waiver by either party of any of its rights or remedies in enforcing any action for breach under this Agreement in a particular instance shall not be considered as a waiver of any rights, remedies, or actions for breach in subsequent instances. 23. SEVERABILITY If any provision of this Agreement is void, voidable, unenforceable, or illegal but would not be so if it were rewritten to eliminate the terms that were found to be voidable, unenforceable, or illegal and such rewrite would not affect the intent of the parties, then the provision shall be rewritten to be enforceable and legal. If it cannot be rewritten without changing the bargain that the parties have agreed to, then it shall be stricken from the Agreement. 24. ASSIGNMENT Neither party shall assign or transfer this Agreement nor any rights or obligations there under without the express written consent of the other party. Any assignment attempted without the written consent of the other party shall be void. For purposes of this Agreement, the term "assignment" includes any transfer of rights or obligations under this Agreement to a successor by merger or consolidation or to any person or entity that acquires all or substantially all of Contractor's capital stock or assets, and includes Contractor's assignment of this Agreement to any person or entity to which Contractor transfers any of its rights in the Software. 25. CHANGES IN CONTROL OF VENDOR 25.1 In the event of a change in Control of Contractor, OCSD shall have the option of terminating this Agreement by written notice to Contractor. Contractor shall notify OCSD within ten (10) days of the occurrence of a change in Control. As used in this Section, "Control' is defined as the possession, direct or indirect, of either: 25.1.1 the ownership or ability to direct the voting of fifty-one percent(51%)or more of the equity interests, value, or voting power in Contractor; or 25.1.2 the power to direct or cause the direction of the management and policies of Contractor, whether through ownership of voting securities, by contract, or otherwise. Professional Consultant Services Agreement 19 of 22 Specification No.CS-2012-525BD 26. APPLICABLE LAW This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. 27.WHOLE AGREEMENT This Agreement sets forth the entire agreement and understanding between the parties and supersedes all other agreements, oral or written, between the parties. 28. MISCELLANEOUS 28.1. No Rights in Third Parties. This Agreement is made for the benefit of OCSD and Contractor and not for the benefit of any third parties. 28.2. Calendar Days. Unless otherwise stated, all references in this Agreement to days refer to calendar days. 28.3. Headings. The headings used in this Agreement are solely for the convenience of the parties. They are not intended to affect the meaning or interpretation of this Agreement. 28.4. Amendments. No amendment or modification to this Agreement is valid unless it is contained in a writing signed by both parties. 28.5. Approvals in Writing. All approvals or consents required or contemplated by this Agreement must be in writing to be effective. 28.6. Successors and Assigns. This Agreement is binding on and inures to the benefit of the parties and their respective successors and assigns. 28.7. Advertising. Contractor shall not refer to the existence of this Agreement in any press release, advertising or materials distributed to prospective customers without the prior written consent of OCSD. 28.8. Business License and Permits. Contractor and any if its subcontractors must obtain and maintain a Fountain Valley, California, business license for the duration of this Agreement. In addition, Contractor is responsible for obtaining any local, state, and federal permits or approvals required for it to full its obligations under this Agreement. 28.9. Construction of Agreement. This Agreement is the product of joint discussions and negotiations at arms' length between the parties, both of whom are sophisticated and knowledgeable in business matters and both of whom have relied on the advice of independent legal counsel. Any rule of law which would require interpretation of this Agreement against the party that drafted it shall have no application to this Agreement. Professional Consultant Services Agreement 20 of 22 Specification No.CS-2012-525BD Return to Mende Report 28.10. Survival of Provisions. All provisions of this Agreement that by their nature would reasonably be expected to continue after the termination of this Agreement will survive the termination of this Agreement, including, without limitation, the following Sections and Paragraphs: • License • Audit Independent Contractor • Warranties • Indemnification • Obligations Upon Expiration or Termination • Transition of Services • Confidential Information • Limits on Liability Professional Consultant Services Agreement 21 of 22 Specification No.CS-2012-5258D IN WITNESS WHEREOF, the Parties hereto have hereunto set their hands the day and year indicated below. ORANGE COUNTY SANITATION DISTRICT Dated: By: Chair Board of Directors Dated: By: Clerk of the Board Dated: By: Contracts/Purchasing Manager COMPANY Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Professional Consultant Services Agreement 22 of 22 Specification No.CS-2012-525BD Orange County Sanitation District Financing Corporation MINUTES September 26, 2012 1 SANITgTj�y Q ? ¢ e� o � Fcl�N HE ENv�� Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 07/25/2012 Minutes of Financing Corporation Page 1 of 3 ORANGE COUNTY SANITATION DISTRICT FINANCING CORPORATION CALL TO ORDER: Chair Edgar called the Board of Directors, Orange County Saniation District Financing Corporation meeting to order at 7:04 p.m. ROLL CALL: The Clerk of the Board announced that the members of the Orange County Sanitation District Board of Directors are each being compensated $212.50 for the Baord Meeting; there is no additional compensation for the Financing Corporation Meeting. ACTIVE DIRECTORS ALTERNATE DIRECTORS X Troy Edgar, Chair Gerri Graham-Mejia X John Anderson, Vice Chair Jim Winder X Tom Beamish Rose Espinoza X Joe Carchio Davin Dwyer X Larry Crandall Steve Nagel X Bill Dalton Kris Beard X Jon Dumitru Denis Bilodeau X Gail Eastman Harry Sidhu X James M. Ferryman Bob Ooten A Jeffrey Lalloway Steven Choi X Michael Levitt Gordon Shanks X Prakash Narain Doug Bailey Scott Nelson X Constance Underhill A Joy Neugebauer Al Krippner X Janet Nguyen Shawn Nelson X John Nielsen Jerry Amante X Brad Reese Rick Barnett A Steven Rosansky Nancy Gardner X Don Schweitzer Ron Garcia X Greg Sebourn Pat McKinley X David Shawver Carol Warren X Fred Smith Steve Berry Sal Tinajero X David Benavides X Mark Waldman Steven Hwangbo X John Withers Douglas Reinhart APPROVAL OF MINUTES: MOVED, SECONDED, AND DULY CARRIED: Minutes of the meeting of the Orange County Sanitation District Financing Corporation held on July 25, 2012. 07/25/2012 Minutes of Financing Corporation Page 2 of 3 ACTION ITEM: MOVED, SECONDED, AND DULY CARRIED: Adopt Resolution No. FC-19, A resolution of the Board of Directors of the Orange County Sanitation District Financing Corporation Authorizing the Execution and Delivery of an Installment Purchase Agreement and a Trust Agreement in Connection with the Execution and Delivery of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2012C, Authorizing the Execution and Delivery of such Notes Evidencing Principal in an Aggregate Amount of not to Exceed $145,000,000 and Authorizing the Execution of Other Necessary Documents and Related Actions. (See Agenda Report for Item No. 7) ADJOURNMENT: The Chair declared the meeting of the Board of Directors, Orange County Sanitation District Financing Corporation adjourned at 7:06 p.m. Maria E. Ayala, Secretary Orange County Sanitation District Financing Corporation 07/25/2012 Minutes of Financing Corporation Page 3 of 3 Item No. 14 MINUTES LEGISLATIVE AND PUBLIC AFFAIRS SPECIAL COMMITTEE MEETING Orange County Sanitation District The Legislative and Public Affairs Special Committee meeting convened on Monday, September 9, 2013, at 8:00 a.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS STAFF PRESENT PRESENT: Jim Herberg, General Manager Troy Edgar, Board Chair Bob Ghirelli, Assistant General John Anderson, Board Vice-Chair Manager Brad Reese, Administration Committee Nick Arhontes, Director of Facilities Chair Support Services John Nielsen, Operations Committee Nick Kanetis, Director of Engineering Vice-Chair Jeff Reed, Director of Human John Withers, Administration Resources Committee Vice-Chair Ed Torres, Director of Operations & Joe Shaw, Director Maintenance Lorenzo Tyner, Director of Finance & Administrative Services COMMITTEE MEMBERS ABSENT: Maria Ayala, Clerk of the Board Jim Colston Norbert Gaia OTHERS PRESENT: Brad Hogin, General Counsel Heather Stratman, Townsend Public Affairs Eric Sapirstein, ENS Resources (via teleconference) PUBLIC COMMENTS: None. COMMITTEE REPORTS: None. Minutes of the Legislative and Public Affairs Special Committee September 9, 2013 Page 2 of 3 DISCUSSION ITEMS 1. Committee Meeting Schedule The Committee agreed to meet on the second Monday of each month at 8 a.m. for the next few months. After 6 months, the frequency of the meetings will be reevaluated. 2. Overview of OCSD's Current Legislative Program Ms. Stratman briefly reviewed the District's current legislative program. The Committee discussed the current legislative platform and the public affairs program. 3. Establishing Committee Goals The Committee established what the purpose, objectives and goals of this new committee will be in terms of legislation and public affairs. They are: • Maximizing the District's legislative and public affairs programs' effectiveness at both the Federal and State levels; • Being more proactive as a Board in legislation with a continued focus in various areas, such as, but not limited to: o Revenue protection o Biosolids o Going "green" o AQMD • Reconstitute branding of OCSD as water supplier and environmental protection agency; • Enhancing the public affairs communication plan, and it's execution; and • "Green' Efficiency 4. Federal Advocacy Role Eric Sapirstein joined the meeting via teleconference. Mr. Sapirstein provided a federal legislative update on the following: Tax Exempt Financing; Buy American Mandate; Water Resources Development Act (WRDA); and Sunshine on Conflicts Act (H.R. 836). Minutes of the Legislative and Public Affairs Special Committee September 9, 2013 Page 3 of 3 5. Future Agenda topics and Next Steps The Committee discussed the sense of urgency in the legislative window for next year at the state and federal level. Staff will provide informational items at the next meeting on various topics for discussion and potential action. ADJOURNMENT: The Chair declared the meeting adjourned at 9:36 a.m. Submitted by: Maria E. Ayala Clerk of the Board Legislative and Public Affairs Special Committee Naming Date Toed.of Dir. 9 P - og�zs t3 AGENDA REPORT Item Item is Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Heather Dion Stratman, (Senior Director, Townsend Public Affairs) SUBJECT: LEGISLATIVE AND PUBLIC AFFAIRS SPECIAL COMMITTEE UPDATE GENERAL MANAGER'S RECOMMENDATION Information Item SUMMARY The first meeting of the Legislative and Public Affairs Special Committee was held on September 9, 2013 at 8:00 a.m. The Committee will continue to meet the second Monday of each month at 8 a.m. At the kickoff meeting several Committee directives were established: committee purpose, committee objectives and goals, and staff initiated deliverables. The focus of the Special Committee will be to further define the role OCSD takes in proactively dealing with state and federal legislation that may impact the district; continuing to take an active role in ensuring the District's property tax revenue remains protected from either state raids or county-wide redistribution; and engaging in an education and outreach plan that promotes the District with local, state and federal stakeholders. The Committee also began the process of developing goals and objectives for the upcoming year. These include but are not limited to the following: revising the current OCSD legislative platform to more clearly define state and federal legislative goals and best "advocacy" practices; potential development of videos to illustrate OCSD CIP successes; development of a City/CIP matrix; development of a funding matrix; development of an outreach and advocacy plan; development of a speaker's bureau for interested members agencies. Additionally, the Committee discussed the concept of a focused and effective re-branding of the District that focuses on areas of clean water, green practices, and potential expansion of source water for GWRS. Staff is preparing to bring back several pieces of information for the Committee's consideration next month. These will include a funding matrix that identifies future capital infrastructure projects and potential funding sources, a outreach and education plan for the remainder of 2013, a revised legislative platform that includes best practices, and concepts for District initiated legislation for 2014/2015. Page 1 d 2 PRIOR COMMITTEE/BOARD ACTIONS None. ADDITIONAL INFORMATION None. ATTACHMENTS None. Page 2 of 2 ORANGE COUNTY SANITATION DISTRICT Agenda Terminology Glossary AQMD Air Quality Management District ASCE American Society of Civil Engineers BOO 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) 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 OOBS 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 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. 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. Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (DR) — the dilution at which the majority of the people detect the odor becomes the D(f 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. NOMA— 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. 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.