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02-22-2017 Board Meeting Agenda Packet
Orange County Sanitation District Wednesday, February 22, 2017 Regular Meeting of the _ 6:00 P.M. BOARD OF DIRECTORS Board Room 10844 Ellis Avenue Fountain Valley, CA 92708 (714)593-7433 AGENDA CALL TO ORDER INVOCATION AND PLEDGE OF ALLEGIANCE (Denise Barnes, City of Anaheim) ROLL CALL (Clerk of the Board) 1. RECEIVE AND FILE MINUTE EXCERPTS OF MEMBER AGENCIES RELATING TO APPOINTMENTS TO THE ORANGE COUNTY SANITATION DISTRICT BOARD OF DIRECTORS (Clerk of the Board) CITYIAGENCY DIRECTOR ALTERNATE DIR. City of Fullerton Greg Sebourn Jesus Silva City of Santa Ana Sal Tinajero David Benavides City of Newport Beach Scott Peotter Brad Avery (amended) DECLARATION OF QUORUM (Clerk of the Board) PUBLIC COMMENTS: If you wish to address the Board of Directors on any item, please complete a Speaker's Form (located at the table outside of the Board Room) and submit if to the Clerk of the Board or notify the Clerk of the Board the item number on which you wish to speak. Speakers will be recognized by the Chairperson and are requested to limit comments to three minutes. SPECIAL PRESENTATIONS: • Employee Service Award(s) • CSDA Transparency Certificate 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. 02/2212017 OCSD Board of Directors Agenda Page 1 at 8 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 2. APPROVAL OF MINUTES (Clerk of the Board) RECOMMENDATION: Approve the minutes of the Regular Board of Directors Meeting held on January 25, 2017. 3. REPLACEMENT OF PLANT 2 MAINTENANCE BUILDING HVAC SYSTEM (Ed Torres) RECOMMENDATION: A. Award a purchase order for the replacement of the Plant 2 Maintenance building air conditioning system with a TRANE IntelliPak VAV rooftop HVAC unit with gas heat in agreement with TRANE US Communities 15-JLP-023 for a total amount not to exceed $210,607 delivered; and B. Approve a contingency amount of$21,061 (10%). 4. PAYMENT OF ANNUAL OCEAN DISCHARGE PERMIT FEE (Jim Colston) RECOMMENDATION: Approve payment in an amount not to exceed $525,537 to the State Water Resources Control Board for annual permit fees for the ocean discharge permit. RECEIVE AND FILE: These items require no action; and without objection, will be so ordered by the Board Chair. 5. COMMITTEE MINUTES (Clerk of the Board) RECOMMENDATION: Receive and file the approved minutes of the following standing committees: A. Operations Committee Meeting of December 7, 2016 B. Administration Committee Meeting of November 9, 2016. C. Legislative and Public Affairs Committee Meeting of December 14, 2016. D. GWRS Steering Committee Meetings of October 10, 2016 and January 9, 2017. 02/22/2017 OCSD Bwa of Directors Agenda Page 2 of 8 6. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF JANUARY 2017 (Lorenzo Tyner) RECOMMENDATION: Receive and file the report of the Investment Transactions for the month of January 2017. OPERATIONS COMMITTEE: 7. AGREEMENT WITH THE CALIFORNIA ALLIANCE FOR SEWER SYSTEM EXCELLENCE MEMBER AGENCIES FOR COST-SHARING REIMBURSEMENT (Ed Torres) RECOMMENDATION: Adopt Resolution No. OCSD 17-02 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District authorizing the General Manager to enter into an agreement with the California Alliance for Sewer System Excellence Member Agencies for cost-sharing reimbursement for approved agency-administered projects." 8. SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO. 1, PROJECT NO. P1-101 (Rob Thompson) RECOMMENDATION: Approve a contingency increase of$714,000 (10%)to the Professional Consultant Services Agreement with HDR Engineering, Inc. to provide construction support services for Sludge Dewatering and Odor Control at Plant No. 1, Project No. P1-101, for a total contingency amount of$1,285,200 (18%). 9. SAFETY IMPROVEMENT PROGRAM, PROJECT NO. J-126 (Rob Thompson) RECOMMENDATION: A. Approve a budget increase of$1,500,000 for Safety Improvements Program, Project No. J-126, for a total budget amount of$11,202,000; and B. Approve Amendment No. 1 to the Professional Design Services Agreement with Arcadis, US, Inc., for Safety Improvement Program, Project No. J-126, for an additional amount of $1,500,000 for a total budget amount of $3,040,000. 10. INTERIM FOOD WASTE RECEIVING FACILITY, PROJECT NO. 132-124 (Rob Thompson) RECOMMENDATION: Establish a project for Interim Food Waste Receiving Facility, Project No. P2-124, with a budget of$5,400,000. 02/22/2017 OCSD Bwa of Directors Agenda Page 3 of 8 ADMINISTRATION COMMITTEE: 11. GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST (Lorenzo Tyner) RECOMMENDATION: Receive and file the Orange County Sanitation District purchases made under the General Manager's authority and additions to the pre- approved OEM Sole Source List for the period of October 1, 2016 - December 31, 2016. 12. MID-YEAR CONSOLIDATED FINANCIAL REPORT FOR THE PERIOD ENDED DECEMBER 31, 2016 (Lorenzo Tyner) RECOMMENDATION: Receive and file Orange County Sanitation District Mid- Year Report for the period ended December 31, 2016. 13. CONSIDERATION OF BUDGET ASSUMPTIONS AND BUDGET CALENDAR FOR PREPARATION OF THE FY 2017-18 BUDGET UPDATE (Lorenzo Tyner) RECOMMENDATION: Approve the FY 2017-18 budget assumptions and direct staff to incorporate these parameters in preparing the FY 2017-18 budget update. 14. COOPERATIVE PROCUREMENT AGREEMENTS WITH U.S. COMMUNITIES GOVERNMENT PURCHASING ALLIANCE AND NATIONAL ASSOCIATION OF STATE PROCUREMENT OFFICIALS VALUEPOINT COOPERATIVE PURCHASING ORGANIZATION (Lorenzo Tyner) RECOMMENDATION: Authorize the purchasing of information technology products, services, and solutions utilizing the U.S. Communities Government Purchasing Alliance and National Association of State Procurement Officials ValuePoint Cooperative Purchasing Organization (NASPO ValuePoint) for the period of March 1, 2017 through February 29, 2020 for a total amount not to exceed $6,000,000, in accordance with Ordinance No. OCSD-47, Section 2.03(B) Cooperative Purchases. INFORMATION ITEMS: 15. HEADQUARTERS COMPLEX, SITE AND SECURITY, AND ENTRANCE REALIGNMENT PROGRAM, PROJECT NO. P1-128 (Rob Thompson) AB 1234 REPORTS: This is the time of the meeting when Board Members will provide a brief oral report on any conference, meeting, or travel paid by the Sanitation District. 02/22/2017 OCSD Board of Directors Agenda Page 4 of 8 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 potentiallitigation,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. (1) CONFERENCE WITH LEGAL COUNSEL RE EXISTING LITIGATION (Government Code Section 54956.9(d)(1)) Number of Cases: 2 Klean Waters, Inc. at al. v. Orange County Sanitation District, at al., United States District Court, Central District of California, Southern Division, Case No. 8:15-cv-00627. Klean Waters, Inc. at al. v. Orange County Sanitation District, at al. United States District Court, Central District of California, Southern Division, Case No. 8:15-cv-01498. (2) CONFERENCE WITH LEGAL COUNSEL RE EXISTING LITIGATION (Government Code Section 54956.9(d)(1)) Number of Cases: 1 City of Los Angeles v. County of Kern, Tulare County Superior Court, Case No. 242057. (3) CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section 54956.8) Property: 300 East Coast Highway, Newport Beach, CA -APN No.440-132-60 Agency negotiators: General Manager, Jim Herberg; Assistant General Manager, Bob Ghirelli; Director of Finance and Administrative Services, Lorenzo Tyner; Director of Engineering, Rob Thompson; Engineering Managers, Kathy Millea and Jeff Mohr; and CIP Project Manager, Adam Nazaroff. 02/22/2017 OCSD Boats d Directors Agenda Page 5 d 8 Negotiating parties: Bayside Village Marina LLC Under negotiation: Instruction to negotiator will concern price and terms of payment. (4) CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section 54956.8) Property: 10950 Virginia Cir. Fountain Valley, CA- APN No.156-165-05; 10870 Spencer Ave. Fountain Valley, CA -APN No.156-163-07; 18480 Pacific St. Fountain Valley, CA -APN No.156-165-04; 18430 Pacific St. Fountain Valley, CA -APN No.156-165-06; 18370 Pacific St. Fountain Valley, CA -APN No.156-165-08; 18429 Pacific St. Fountain Valley, CA -APN No.156-163-09; 18410 Bandilier Cir. Fountain Valley, CA -APN No.156-163-10; 18368 Bandilier Cir. Fountain Valley, CA -APN No.156-163-11; 10700 Spencer St. Fountain Valley, CA-APN No.156-163-16; 10700 Spencer Ave. Fountain Valley, CA -APN No.156-154-07; 18350 Mt. Langley St. Fountain Valley, CA-APN No.156-154-08; 18386 Mt. Langley St. Fountain Valley, CA-APN No.156-154-06; 18385 Bandilier Cir. Fountain Valley, CA -APN No.156-163-12; 18401 Bandilier Cir. Fountain Valley, CA -APN No.156-163-13; 18424 Mt. Langley St. Fountain Valley, CA-APN No.156-154-05; 18435 Bandilier Cir. Fountain Valley, CA -APN No.156-163-14; 18475 Bandilier Cir. Fountain Valley, CA -APN No.156-163-15; 10725 Ellis Ave. Fountain Valley, CA -APN No.156-154-04; 10540 Talbert Ave. Fountain Valley, CA -APN No.156-151-03; and 7311 Doig Drive Garden Grove, CA -APN No. 131-651-20 Agency negotiators: General Manager, Jim Herberg; Assistant General Manager, Bob Ghirelli; Director of Finance and Administrative Services, Lorenzo Tyner; Director of Engineering, Rob Thompson; Engineering Managers, Kathy Millea and Jeff Mohr; CIP Project Manager, Wendy Sevenandt; Kevin Turner and John Gallivan, Cushman and Wakefield. Negotiating parties: Valley, Business Park, APN Nos. 156-165-05, .156-165-06, 156-163-07; DK-USA LLC, APN No.156-165-04; Fountain Valley Industrial Parcel 13, APN No.156-165-08; Sukut Real Properties LLC, APN Nos. 156-163-09, 156-163-10, 156-163-11; The Ins Trust Shabtai, Nevon, APN No. 156-163-16; The Ins Trust, APN No. 156-154-07; K & A Investments LP, APN No. 156-154-08; Fountain Valley Star LLC, APN No. 156-154-06; TN Sheet Metal Inc., APN No. 156-163-12; 18401 Bandilier LLC, APN No. 156-163-13; Phone Lilly Lin-Lin TR, APN No. 156-154-05; JDK Partners, APN No. 156-163-14; Chandler Real Properties, APN No. 156-163-15; 021M2017 OCSD Boats of Directors Agenda Page 6 of 8 Ellis Avenue LLC, APN No. 156-154-04; and SFII Fountain Valley LLC, APN No. 156-151-03 Under negotiation: Instruction to negotiator will concern price and terms of payment. 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 Meeting of the Board of Directors on March 15, 2017 at 3:00 p.m. 02/22/2017 OCSD B. of Directors Agenda Page 7 d 8 Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at(714) 593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Aaenda Postina: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, and on the Sanitation District's website at www.ocsd.com, 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. Aaenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for a Committee or Board Meeting, items must be submitted to the Clerk of the Board 14 days before the meeting. Kelly A.Lore Clerk of the Board (714)593-7433 klore(ftasd.com For any questions on the agenda, Committee members may contact staff at: General Manager Jim Herberg (714)593-7300 iherbem(&ocsd.wm Assistant General Manager Bob Ghirelli (714)593-7400 rghirelli(a)ocsd.com Director of Engineering Rob Thompson (714)593-7310 rthomosomaDocsd.com Director of Environmental Services Jim Colston (714)593-7450 icolston(d)ocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 Ityner(docsd.wm Administrative Services Director of Human Resources Celia Chandler (714)593-7202 cchandler(@ocsd.com Director of Operations&Maintenance Ed Torres 714 593-7080 etorres ocsd.com 02/22/2017 OCSD Board of Directors Agenda Page 8 of 8 ITEM NO. 2 Orange County Sanitation District MINUTES BOARD MEETING January 25, 2017 ANITAT� 9 U N 2 ,y t o � ftwowm0i l�NG THE ENV�Q, Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 01/25/2017 Minutes of Board Meeting Page 1 of 12 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was called to order by Board Chair Greg Seboum on January 25, 2017, at 6:00 p.m., in the Administration Building. Director Michelle Steel delivered the invocation and led the Pledge of Allegiance. The Clerk of the Board provided late communication regarding Item No. 1. Two additional appointments were received after the posting of the agenda. 1. RECEIVE AND FILE MINUTE EXCERPTS OF MEMBER AGENCIES RELATING TO APPOINTMENTS TO THE ORANGE COUNTY SANITATION DISTRICT BOARD OF DIRECTORS (Clerk of the Board) Received and filed Minute Excerpts of member agencies relating to appointments to the Orange County Sanitation District Board, as follows: City/Again cv Active Director Alternate Director City of Anaheim Denise Barnes Lucille Kring City of Brea Glenn Parker Cecilia Hupp City of Fountain Valley Steve Nagel Cheryl Brothers City of Garden Grove Steve Jones Kris Beard City of Huntington Beach Barbara Delgleize Erik Petersen City of Irvine Donald Wagner Lynn Schott City of La Habra Tim Shaw Michael Blazey City of La Palma Peter Kim Gerard Goedhart City of Los Alamitos Richard Murphy Warren Kusumoto City of Newport Beach Scott Peotter Kevin Muldoon City of Placentia Chad Wanks Ward Smith City of Seal Beach Ellery Deaton Sandra Massa-Lavitt City of Stanton Dave Shawver Carol Warren City of Tustin Allan Bernstein Chuck Puckett City of Villa Park Robert Collacott Diana Fascenelli Costa Mesa Sanitary District James Ferryman Bob Ooten Yorba Linda Water District Phil Hawkins Brooke Jones Irvine Ranch Water District John Withers Doug Reinhart City of Buena Park Fred Smith Virginia Vaughn 01/25/2017 Minutes of Board Meeting Page 2 of 12 The Clerk of the Board declared a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X Gregory Sebourn, Chair Doug Chaffee X Denise Barnes Lucille Kring X Allan Bernstein Chuck Puckett X Robert Collacott Diana Fascenelli Ellery Deaton X Sandra Massa-Lavitt X Barbara Delgleize Erik Peterson X James M. Ferryman Bob Ooten Phil Hawkins X Brooke Jones Steven Jones X Kris Beard X Peter Kim Gerard Goedhart X Al Krippner Charlie Nguyen X Richard Murphy Warren Kusumoto A Steve Nagel Cheryl Brothers A Glenn Parker Cecilia Hupp X Scott Peotter Kevin Muldoon Tim Shaw X Michael Blazey X David Shawver Carol Warren X Fred Smith Virginia Vaughn X Teresa Smith Mark Murphy X Michelle Steel Shawn Nelson X Sal Tinajero David Benavides X Donald Wagner Lynn Schott X Chad Wanke Ward Smith X John Withers Douglas Reinhart Mariellen Yarc X Stacy Berry STAFF MEMBERS PRESENT: Jim Herberg, General Manager; Bob Ghirelli, Assistant General Manager; Rob Thompson, Director of Engineering; Lorenzo Tyner, Director of Finance & Administrative Services; Celia Chandler, Director of Human Resources; Jim Colston, Director of Environmental Services; Miriam Angold; Jennifer Cabral; Mike Dorman; Mark Esquer; Damein Fabrizio; Al Garcia; Tina Knapp; Mark Manzo; Gerry Matthews; Kathy Millea; and Jeff Mohr. OTHERS PRESENT: Brad Hogin (General Counsel); Jason Burden, Flatiron West Inc.; James Clark, Black&Veatch; and Eleanor Torres, OCWD. 01/25/2017 Minutes of Board Meeting Page 3 of 12 PUBLIC COMMENTS: None. SPECIAL PRESENTATIONS: • Employee Service Awards: Director of Environmental Services, Jim Colston presented a 25-year service award to Yu Li Tsai, Senior Scientist (Division 630). ELECTIONS: General Counsel, Brad Hogin announced that the following nominations were made for Board Vice-Chairperson at the Board of Directors meeting held on December 14, 2016: • Director David Shawver • Director John Withers • Director Lucille Kring He stated that subsequent to this meeting, Lucille Kring was not reappointed as the representative from the City of Anaheim and is therefore no longer eligible for the position of Board Vice-Chairperson. Mr. Hogin provided further instructions and facilitated the election for the Vice-Chairperson of the Board of Directors. Director Withers and Director Shawver addressed the Board with qualifying statements. Kelly Lore, Clerk of the Board proceeded to take the vote by roll call: SHAWVER: Barnes; Beard (Alternate); Berry (Alternate); Delgleize; B. Jones (Alternate); Kim; Krippner; Massa-Lavitt (Alternate); R. Murphy; Shawver, F. Smith; T. Smith; Steel; Tinajero; Wanke; and Withers WITHERS: Bernstein; Blazey(Alternate); Collacott; Ferryman; Peotter; Sebourn; and Wagner Mr. Hogin announced that by a vote of 16/7, Director Shawver had been elected as Board Vice-Chairman to be effective immediately. Board Vice-Chair Shawver thanked everyone for their support. REPORTS: Chair Sebourn congratulated Vice-Chair Shawver and acknowledged Director Withers. He commended both gentleman on the way they conducted themselves during the election period. 01/25/2017 Minutes of Board Meeting Page 4 of 12 Chair Sebourn announced that Board Orientation will take place on February 15th and March 15g' from 3:00 — 5:00 p.m. and that all Board Members and Alternate Board Members are encouraged to attend. He stated that closed toed shoes are required as the orientation will include a tour of Plant No. 1. He also encouraged the Board to contact General Manager, Jim Herberg with any questions about OCSD. Board Chair Sebourn announced recently appointed Committee Assignments: Administration Committee: LaPA Committee: Chad Wanke, Chair Tim Shaw Don Wagner, Vice-Chair Don Wagner Chad Wanke Steering Committee: GWRS Steering Committee: Tim Shaw Phil Hawkins Don Wagner Tim Shaw Chad Wanke Don Wagner Audit Ad Hoc Committee: Glenn Parker Peter Kim General Manager, Jim Herberg reported on the recent storms. He stated that during the event, possibly the highest Flows OCSD had ever recorded, the high flow element in the OCSD Integrated Emergency Response Plan was activated but was successfully handled. He thanked the dedicated staff, and our sister agencies who worked together to weather this storm. Mr. Herberg also stated that Ed Torres, Director of Operations and Maintenance, will provide an informational presentation next month about the event. Mr. Herberg noted that on the agenda tonight, staff is recommending adoption of a resolution to enter into a Memorandum of Understanding with OCERS establishing the terms for early pay off of OCSD's Unfunded Actuarial Accrued Liabilities (UAAL). He stated that the OCERS Board members expressed appreciation of OCSD's efforts to pay down OCSD's UAAL early. Mr. Herberg asked that the meeting tonight be adjourned in memory of Brent Wride, a data management technician in our GIS group who passed away on January 7th after battling a serious illness. Brent had been with OCSD for 3 years; however, he had made a real impact and was a valued member of our IT team, the Wellness Committee and the Emergency Response Team. He left behind a wife and four young children. 01/25/2017 Minutes of Board Meeting Page 5 of 12 CONSENT CALENDAR: Item No. 3 pulled and heard separately. 3. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve the minutes of the regular Board of Directors Meeting held on December 14, 2016. AYES: Barnes; Bernstein; Ferryman; Kim; Krippner, R. Murphy; Peotter; Seboum; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: Beard (Alternate); Berry (Alternate); Blazey (Alternate); Collacott; Delgleize; B. Jones (Alternate); and Massa-Lavitt (Alternate) ABSENT: Nagel and Parker 4. DEFERRED PAYMENT AGREEMENT FOR CHARGES AND FEES OWED BY ONE INDUSTRIAL WASTEWATER DISCHARGE PERMITTEE (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: Approve the deferred payment agreement negotiated by the General Manager for the collection of all charges and fees owed for sanitary sewer service charges, plus interest of 5.75% per annum, with Van Law Food Products, Inc., in a form approved by General Counsel. AYES: Barnes; Beard (Alternate); Berry (Alternate); Bernstein; Blazey (Alternate); Collacott; Massa-Lavitt (Alternate); Delgleize; Ferryman; B. Jones (Alternate); Kim; Krippner; R. Murphy; Peotter; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Nagel and Parker 5. TAYLOR-DUNN CART PURCHASE FROM YALE CHASE EQUIPMENT AND SERVICES, INC. (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Authorize the award of a sole source purchase of nineteen (19)Taylor-Dunn electric carts from Yale Chase Equipment and Services, Inc., in accordance with 03/28/01 Minute Order 12(C)(2), for a total cost of$212,127 to include tax and delivery; and B. Approve a contingency of$10,606 (5%). 01/25/2017 Minutes of Board Meeting Page 6 of 12 AYES: Barnes; Beard (Alternate); Berry (Alternate); Bernstein; Blazey (Alternate); Collacott; Massa-Lavitt (Alternate); Delgleize; Ferryman; B. Jones (Alternate); Kim; Krippner; R. Murphy; Peotter; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Nagel and Parker Item No. 6 pulled and heard separately. 6. MEMORANDUM OF UNDERSTANDING WITH ORANGE COUNTY EMPLOYEES' RETIREMENT SYSTEM REGARDING PAYMENT OF UNFUNDED ACTUARIAL ACCRUED LIABILITIES (Lorenzo Tyner) Director Peotter asked that this item be pulled to inquire if the Administration Committee had heard this item. Director of Finance and Administrative Services Lorenzo Tyner explained that the Administration Committee and the Board of Directors previously budgeted and approved the paydown. He stated that the requested MOU is necessary to set forth terms and conditions under which OCERS will recognize and apply the contribution; and that due to the Committee being dark in January, and to act in conjunction with the OCERS Board, the item was placed on tonight's agenda. Mr. Tyner also provided a brief history of the intent of the Board's decision to paydown the UAAL. MOVED, SECONDED,AND DULY CARRIED TO: Adopt Resolution No. OCSD 17-01 entitled; "A Resolution of the Board of Directors of the Orange County Sanitation District authorizing the General Manager to enter into a Memorandum of Understanding with the Orange County Employees' Retirement System establishing the terms to recognize and apply the District's full satisfaction of its Unfunded Accrued Actuarial Liability and deferred Unfunded Accrued Actuarial Liability." AYES: Barnes; Beard (Alternate); Berry (Alternate); Bernstein; Blazey (Alternate); Collacott; Massa-Lavitt (Alternate); Delgleize; Ferryman; B. Jones (Alternate); Kim; Krippner; R. Murphy; Sebourn; Shawver, F. Smith; T. Smith; Steel; Tinajero; Wagner, Wanke; Withers; and Yarc NOES: Peotter ABSTENTIONS: None ABSENT: Nagel and Parker 01/25/2017 Minutes of Board Meeting Page 7 of 12 RECEIVE AND FILE: These items require no action; and without objection, will be so ordered by the Board Chair. 7. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF DECEMBER 2016 (Lorenzo Tyner) Received and filed the report of the Investment Transactions for the month of December 2016. STEERING COMMITTEE: 8. OUTREACH FOR GROUNDWATER REPLENISHMENT SYSTEM (GWRS) BOTTLED WATER AND THE 10TH ANNIVERSARY OF THE GWRS (Bob Ghirelli) Assistant General Manager, Bob Ghirelli provided a brief report on the item. Board Chair Sebourn stated that the Steering Committee unanimously approved the item. MOVED. SECONDED, AND DULY CARRIED TO: Approve $63,000 as the Orange County Sanitation District's share of costs related to GWRS bottled water outreach efforts. AYES: Barnes; Beard (Alternate); Berry (Alternate); Bernstein; Blazey (Alternate); Collacott; Massa-Lavitt (Alternate); Delgleize; Ferryman; B. Jones (Alternate); Kim; Krippner; R. Murphy; Peotter; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Nagel and Parker 9. GENERAL MANAGER'S FY 2016-2017 WORK PLAN MID-YEAR UPDATE (Jim Herberg) Mr. Herberg provided a brief report on the status of the FY 2016-17 Work Plan initiatives including: Cyber Security; Plant Safety; Physical Security; Succession Planning; Resource Recovery; Reliability; Operational Resiliency; and alternative locations for the OCSD Headquarters Building. MOVED, SECONDED, AND DULY CARRIED TO: Receive and file the General Manager's FY 2016-2017 Work Plan Mid-Year Update. AYES: Barnes; Beard (Alternate); Berry (Alternate); Bernstein; Blazey (Alternate); Collacott; Massa-Lavitt (Alternate); Delgleize; Ferryman; B. Jones (Alternate); Kim; Krippner; R. Murphy; Peotter, Sebourn; Shawver, F. Smith; T. Smith; Steel; Tinajero; Wagner; Wanke; Withers; and Yarc 01/25/2017 Minutes of Board Meeting Page 8 of 12 NOES: None ABSTENTIONS: None ABSENT: Nagel and Parker NON-CONSENT CALENDAR: 10. REIMBURSEMENT AGREEMENT WITH ORANGE COUNTY FLOOD CONTROL DISTRICT FOR FULLERTON CREEK CHANNEL PROJECT (Rob Thompson) Director of Engineering, Rob Thompson provided a brief history of the Channel and the modifications required to complete the work under one construction action. MOVED. SECONDED, AND DULY CARRIED TO: Approve a Reimbursement Agreement with the Orange County Flood Control District for the modifications to the Magnolia Relief Sewer under the Fullerton Creek Channel, in the City of Buena Park. AYES: Barnes; Beard (Alternate); Berry (Alternate); Bernstein; Blazey (Alternate); Collacott; Massa-Lavitt (Alternate); Delgleize; Ferryman; B. Jones (Alternate); Kim; Krippner; R. Murphy; Peotter; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Nagel and Parker 11. CONSOLIDATED DEMOLITION AND UTILITY IMPROVEMENTS AT PLANT NO. 2, PROJECT NO. P2-110 (Rob Thompson) Board Chair Seboum recused himself and left the room for the discussion and vote on Item No. 11 due to a conflict of interest. Board Vice-Chair Shawver presided. Mr. Thompson provided a brief overview and history of the consolidated demolition project. He also provided information regarding a protest that was received noting there was no merit to the protest found. Mr. Thompson responded to questions regarding the large variance between the engineer's estimate and the bids that were received. He stated that demolition is a market driven situation,with varying factors including: storage;taking up the road base; and recycling. Mr. Herberg stated his confidence in the accuracy of the bids. 01/25/2017 Minutes of Board Meeting Page 9 of 12 MOVED. SECONDED, AND DULY CARRIED TO: A. Receive and file Bid Tabulation and Recommendation for Consolidated Demolition and Utility Improvements at Plant No. 2, Project No. P2-110; B. Receive and file Orange County Sanitation District's Notice of Intent to Award dated December 5, 2016; C. Receive and file Award Protest from Shimmick Construction Co., Inc dated December 13, 2016, concerning the award to Flatiron West, Inc.; D. Receive and file response letter from Flatiron West, Inc. dated December 20, 2016, regarding the bid protest of Shimmick Construction Co., Inc.; E. Receive and file Orange County Sanitation District's determination letter dated December 27, 2016, to Shimmick Construction Co., Inc. responding to Award Protest; F. Deny Award Protest filed by Shimmick Construction Co., Inc.; G. Award a Construction Contract to Flatiron West Inc. for Consolidated Demolition and Utility Improvements at Plant No. 2, Project No. P2-110, for a total amount not to exceed $16,730,000; and H. Approve a contingency of$1,338,400 (8%); I. Approve a Professional Consultant Services Agreement with Stantec Consulting Services, Inc. to provide construction support services for Consolidated Demolition and Utility Improvements at Plant No. 2, Project No. P2-110, for an amount not to exceed $1,499,839; and J. Approve a Professional Consultant Services Agreement contingency of $149,984 (10%). AYES: Barnes; Beard (Alternate); Berry (Alternate); Bernstein; Blazey (Alternate); Collacott; Massa-Lavitt (Alternate); Delgleize; Ferryman; B. Jones (Alternate); Kim; Krippner; R. Murphy; Peotter; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wagner; Wanks; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Nagel; Parker and Sebourn 01/25/2017 Minutes of Board Meeting Page 10 of 12 AB 1234 REPORTS: Director Ferryman provided an update on the NWRI General Manager recruitment and announced upcoming meeting dates of the OCCOG, SARFC and Border Patrol committees. Chair Sebourn reported on his recent attendance at the ACC-OC Energy and Environment Policy Committee on January 2311, where he serves as the Chairman. He invited the Board to attend future meetings if interested INFORMATION ITEMS: None. CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54956.9(d)(1), 54956.9(d)(2) & 54956.8: The Board convened in closed session at 7:02 p.m. to discuss two items. (Items No. 2, 4 and 5 were not heard.) 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 Session Meetings. RECONVENED IN REGULAR SESSION: The Board reconvened in regular session at 7:31 p.m. CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: General Counsel Brad Hogin stated that the Board of Directors unanimously voted to deny the claims of Melissa Forman-Woodbridge and Roy Hendy. AYES: Barnes; Beard (Alternate); Berry (Alternate); Bernstein; Blazey (Alternate); Collacott; Massa-Lavitt (Alternate); Delgleize; Ferryman; B. Jones (Alternate); Kim; Krippner; R. Murphy; Peotter; Sebourn; Shawver; F. Smith; T. Smith; Steel; Tinajero; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Nagel and Parker 01/ 512017 Minutes of Board Meeting Page 11 of 12 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: At the inquiry of Director Withers, Mr. Thompson provided information on recent negotiations with OC Flood Control regarding a possible fee for right of entry, where OCSD had pipeline that crisscrosses the County. Director Steel stated that this item was brought before the Board of Supervisors and was denied. ADJOURNMENT: At 7:34 p.m. Chair Sebourn adjourned the meeting until the Special Meeting (Board Orientation) on February 15, 2017 at 3:00 p.m. in memory of former employee Brent W ride. Submitted by: Kelly A. Lore Clerk of the Board 01/25/2017 Minutes of Board Meeting Page 12 of 12 BOARD OF DIRECTORS Meeting Date TOBd.Of Dir. oV 7 AGENDA REPORT Item Item 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations and Maintenance SUBJECT: REPLACEMENT OF PLANT 2 MAINTENANCE BUILDING HVAC SYSTEM GENERAL MANAGER'S RECOMMENDATION A. Award a purchase order for the replacement of the Plant 2 Maintenance building air conditioning system with a TRANE IntelliPak VAV rooftop HVAC unit with gas heat in agreement with TRANE US Communities 15-JLP-023 for a total amount not to exceed $210,607 delivered. B. Approve a contingency amount of$21,061 (10%). BACKGROUND The existing air conditioning system in the Plant 2 Maintenance building was installed in 1998 and is the sole source for the building's heating, ventilation, and air conditioning (HVAC). The building houses approximately fifty staff members. The existing HVAC roof top unit has exceeded its useful life expectancy and suffered multiple system failures. In 2015 the HVAC system experienced multiple refrigerant leaks and 75% of the unit was removed from service to comply with EPA regulations. Maintenance staff have been able to maintain the remaining portion of the unit in service but due to extensive corrosion, the systems reliability is severely compromised. U.S. Communities Government Purchasing Alliance is the leading national government purchasing cooperative, providing government procurement resources and solutions to local and state government agencies, school districts (K-12), higher education institutes, and nonprofits looking for the best overall government pricing supplier. The program is available to all State of California government entities (State agencies, cities, counties, special districts, school districts, universities, etc.) that expend public funds for the acquisition of both goods and services. RELEVANT STANDARDS • Protection of Orange County Sanitation District assets • Participate in National Joint Powers Authority (NJPA) cooperative purchasing program Page 1 of 2 PROBLEM The sole source of heating, ventilation, and air conditioning to the Plant No. 2 Maintenance building is failing and is beyond economical repair. This building, housing approximately fifty staff members, has reached temperatures in excess of 95 degrees Fahrenheit over three days during a failure last Summer. PROPOSED SOLUTION TRANE US Communities 15-JLP-023 provides a previously bid contract to participating agencies affording lowest cost options, thus eliminating the requirement for the bid or sole source approval processes. Award a purchase order through TRANE US Communities to provide a turnkey replacement HVAC roof mounted system. TIMING CONCERNS The existing HVAC roof mounted system capacity has been reduced by 75% due to refrigerant leaks and component failures. Higher temperatures expected during the summer months will increase the stress to the cooling system, increasing the likelihood of complete system failure. RAMIFICATIONS OF NOT TAKING ACTION The building will not provide ventilation, heating, or air conditioning to its occupants. Loss of ventilation or air conditioning during high temperature periods presents a health and safety concern to the building occupants. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted in the FY2016-17 Operating budget. (Line item: Repairs and Maintenance, Section 6, page 92). Project contingency funds will not be used for this purchase. Date of ADDroval Contract Amount Continaencv 2/22/2017 $210,607.70 $21,061 ATTACHMENT The following attachment(s) maybe viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: N/A Page 2 of 2 BOARD OF DIRECTORS Meeting Date TOBd.Of Dir. oV 7 AGENDA REPORT ItemNumber IemNumber a Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: James Colston, Director of Environmental Services SUBJECT: PAYMENT OF ANNUAL OCEAN DISCHARGE PERMIT FEE GENERAL MANAGER'S RECOMMENDATION Approve payment in an amount not to exceed $525,537 to the State Water Resources Control Board for annual permit fees for the ocean discharge permit. BACKGROUND To maintain legal authority to discharge to the Pacific Ocean via the long and short outfall systems, the Orange County Sanitation District (Sanitation District) must pay an annual permit fee to the State Water Resources Control Board. The California Code of Regulations Title 23, Division 3, Chapter 9 establishes annual fee schedules for National Pollutant Discharge Elimination System (NPDES) permit holders. PRIOR COMMITTEE/BOARD ACTIONS Annual fee. RELEVANT STANDARDS • Califomia Code of Regulations Title 23, Division 3, Chapter 9 • Meet Discharge Permit 24/7/365 FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. (Budget Update FY2016-17, Line item: Page 43, Operating Expense, Other). ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: N/A JC:rc:bg Page 1 of 1 ITEM NO. 5a MINUTES OF THE OPERATIONS COMMITTEE Orange County Sanitation District Wednesday, December 7, 2016, 5:00 p.m. A regular meeting of the Operations Committee was called to order by Committee Vice-Chair Shawver on Wednesday, December 7, 2016 at 5:02 p.m. in the Administration Building. Director Yarc led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: David Shawver, Vice-Chair Jim Herberg, General Manager Ellery Deaton Bob Ghirelli, Assistant General Manager Steve Jones Celia Chandler, Director of Human Resources Richard Murphy Jim Colston, Director of Environmental Services Steve Nagel Rob Thompson, Director of Engineering Fred Smith Ed Torres, Director of Operations and Maintenance Tim Shaw (Alternate) Lorenzo Tyner, Director of Finance & Michelle Steel Administrative Services Mariellen Yarc Tina Knapp, Deputy Clerk of the Board Greg Sebourn, Board Vice-Chair Marc Brown John Nielsen, Board Chair Jennifer Cabral Mike Dorman COMMITTEE MEMBERS ABSENT: Mark Esquer John Withers, Chair Dean Fisher Robert Kiley Alfredo Garcia Chad Wanks Mark Manzo Kathy Millea Jeff Mohr Ryan Valentino OTHERS PRESENT: Brad Hogin, General Counsel Bob Ooten, Alternate Director CMSD PUBLIC COMMENTS: None REPORT OF COMMITTEE CHAIR: Committee Vice-Chair Shawver did not provide a report. 12/072016 Operations Committee Minutes Page 1 of 8 REPORT OF GENERAL MANAGER: General Manager Jim Herberg reported that a tentative ruling was reached in the court case pertaining to Measure E in which Kern County is the defendant. This case involves the land application of biosolids and preliminarily found in favor of the plaintiffs, which includes Orange County Sanitation District, and finds that Class A biosolids can be composted in Kern County. This is good news as it will allow for the availability of more places for the application of biosolids. Additional information will be provided at the December Board of Directors meeting. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED. and DULY CARRIED TO: Approve Minutes of the November 2, 2016 Operations Committee Meeting. AYES: Deaton, Jones, Murphy, Nagel, Nielsen, Sebourn, Shaw (Alternate), Shawver, F. Smith, and Yarc NOES: None ABSTENTIONS: None ABSENT: Kiley, Steel, Wanke, and Withers Item No. 2 was pulled for separate consideration. Vice-Chair Sebourn recused himself and left the room during the discussion and vote on Item No. 2. 2. POWER PRODUCTION CONSULTING SERVICES, SPECIFICATION NO. CS-2016-777BD (Ed Torres) MOVED SECONDED and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Professional Consultant Services Agreement with AECOM for Power Production Consulting Services, Specification No. CS 2016-777BD, for an amount not to exceed $191,691; and B. Approve a contingency of$19,169 (10%). AYES: Deaton, Jones, Murphy, Nagel, Nielsen, Shaw (Alternate), Shawver, F. Smith, and Yarc NOES: None ABSTENTIONS: None ABSENT: Kiley, Sebourn (Recused), Steel, Wanke, and Withers 1 210 7/2 01 6 Operations Committee Minutes Page 2 of 8 3. CBS ARCSAFE REMOTE CIRCUIT BREAKER RACKING UNIT (Ed Torres) MOVED, SECONDED, and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a sole source purchase with CBS Aresafe Inc. for the purchase of four CBS Aresafe remote circuit breaker racking units (two per plant), for a total amount not to exceed $139,920 delivered, plus tax; and B. Approve a contingency of$6,996 (5%). AYES: Deaton, Jones, Murphy, Nagel, Nielsen, Sebourn, Shaw (Alternate), Shawver, F. Smith, and Yarc NOES: None ABSTENTIONS: None ABSENT: Kiley, Steel, Wanke, and Withers 4. COOPERATIVE PROCUREMENT WITH STATE OF CALIFORNIA UNDER WSCA-NASPO FOR FUEL CARD PROGRAM (Ed Torres) MOVED SECONDED, and DULY CARRIED TO: Recommend to the Board of Directors to: A. Authorize the use of the State of California Department of General Services (DGS) Participating Addendum No. 7-16-99-27 with U.S. Bank National Association dba Voyager Fleet Systems under the State of Washington WSCA-NASPO Commercial Card Solutions Contract Number 00612- Category 2 for the period beginning February 1, 2017 through December 31, 2018 for a total not to exceed $250,000, with four one-year renewal options. B. Approve a $50,000 (20%) Contingency per year. AYES: Deaton, Jones, Murphy, Nagel, Nielsen, Sebourn, Shaw (Alternate), Shawver, F. Smith, and Yarc NOES: None ABSTENTIONS: None ABSENT: Kiley, Steel, Wanke, and Withers 5. DOIG DRIVE BUILDING IMPROVEMENTS, PROJECT NO. 3-65 (Rob Thompson) MOVED. SECONDED, and DULY CARRIED TO: Recommend to the Board of Directors to: Establish a project for Doig Drive Building Improvements, Project No. 3-65, with a budget of$2,436,000. 121072015 Operations Committee Minutes Page 3 of 8 AYES: Deaton, Jones, Murphy, Nagel, Nielsen, Sebourn, Shaw (Alternate), Shawver, F. Smith, and Yarc NOES: None ABSTENTIONS: None ABSENT: Kiley, Steel, Wanks, and Withers 6. RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1, PROJECT NO. P1-129 (Rob Thompson) MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: Establish a project for Return Activated Sludge Piping Replacement at Activated Sludge Plant 1, Project No. P1-129, with a budget of$3,300,000. AYES: Deaton, Jones, Murphy, Nagel, Nielsen, Sebourn, Shaw (Alternate), Shawver, F. Smith, and Yarc NOES: None ABSTENTIONS: None ABSENT: Kiley, Steel, Wanke, and Withers NON-CONSENT CALENDAR: 7. UPDATE PRE-APPROVAL LIST FOR FREQUENTLY PROCURED SOLE SOURCE MATERIALS AND SERVICES (Ed Torres) Director of Operations & Maintenance Ed Torres provided an overview of this item and responded to a question indicating that any new vendors identified as providing a part/service on the list would eliminate that part/item as a sole source and it would then go through the usual procurement process. MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Update authorization and set administrative controls for sole source procurement required to maintain, service, or replace equipment currently in operation at Orange County Sanitation District facilities where the parts and/or service can only be provided by the Original Equipment Manufacturer (OEM) or their designated representative, for purchases under$100,000, per purchase; and B. Authorize the General Manager to ratify additions or deletions to the OEM list on the General Manager's quarterly approved purchases agenda report. The following equipment, parts, and services from the listed OEMs are pre- approved as sole source items. The information below includes a general category for the part/service, not the specific, existing sole source partfservice. 12/0712016 Operations committee Minutes Page 4 of 8 • AANDERAA DATA INSTRUMENTS — Current meters • ABB —Variable frequency drives, process controls • ACME — Plant water strainers • AGILENT TECHNOLOGIES— Liquid Chromatography Mass Spectrometer • ALFA-LAVAL— Heat exchangers for digesters, centrifuges • ALLEN BRADLEY — Process controls • AMERON — Manhole Toppers • AM-LINER® PVC — Sewer lining • ARIZONA INSTRUMENT—Odor sensing equipment • ASHBROOK (BELLMER /WINKLER) — Sludge belt filter presses • BASLER — Electrical protective relays and regulators • BEC — Building Electronics control system • BENTLEY NEVADA— Gas compressor, Cen-Gen vibration monitoring • BIO-MERIEUX— Bacterialidentificationsystem • BOERGER— Process Pumps • CHESTERTON — Mechanical seals for process equipment • CSI/EMERSON — MSP vibrations • DEZURIK WATER CONTROLS — Process valves • EATON —Variable frequency drives for process pumps • EMERSON/ROSEMOUNT— Processequipment • FOXBORO — Process equipment • GOULD/ITT/YEOMANS — Process pumps • HACH/AMERICAN SIGMA— Liquid samplers • IPT— Limitorque services • HIDROSTAL — Process pump motors • LECO —GC Time of Flight mass spectrometer • LIMITORQUE — Process valves • MARLOW— Process pumps • Modicon — PLC parts & service • MOTOROLA, INC — Radios • MOYNO— Process pumps • MSA— Safety gas detection systems • MUFFIN MONSTER — Sludge grinders • PARKSON —Washer compactor • PERKIN ELMER — ICP Mass Spectrometer • PUTZMEISTER — Sludge transfer pumps • ROBICON —Variable frequency drives for pumps • ROTORK— Valve actuators • SANCON 100 EPDXY/URETHANE — Coating system • SCHWING — Sludge transfer pumps • SEABIRD — Ocean Monitoring instrumentation • SEEPEX— Process pumps • SIEMENS —Variable frequency drives, process controls • SIEMENS DEMAG DELAVAL TURBOMACHINERY, INC. (SDDTI) — Aeration blowers service 12/07/2016 OperOons Canmiltee Minutes Page 5 of 5 • SKALAR — BOD robotics • SPARLINGINSTRUMENTS — Processflowmeters • TELEDYNE — RD instrumentation • THERMO ELECTRON — ICP Atomic Emission Spectrometer and GC Mass spectrometer • TITUS — Composite Manhole Covers • VAREC — Process safety equipment • VAUGHAN — Process Pumps • WATERS CORPORATION — Liquid chromatograph mass spectrometer • WESTFALIA— Centrifuge parts • WEMCO — Process pumps • XYLEM — Process pumps and ancillary parts The following additional proprietary service providers are pre-approved: • ARC WIRELESS— Paging services • AUTODESK—AutoCADdrawingprogram • CALIFORNIA RECREATION COMPANY—Vessel Nerissa slip fees • CORNERSTONE— On Demand Talent Management System • EMPLOYEE BENEFITS SPECIALIST, INC — Benefits Enrollment System • ENFOTECH — Pre-treatment Software • ESRI — GIS software • FIRST AMERICAN REAL ESTATE — Online Geographic-Realquest Report • GUIDANCE SOFTWARE, INC — E-Discovery Software • GOLDEN BELL— Insect Control • IBM MAXIMO — Enterprise Asset Management Software • INNOVYZE, INC — Hydraulic Monitoring and CCTV Data • L - 3 COMMUNICATIONS HOLDINGS, INC — Internet and Telecom Provider • LABWARE — Laboratory Information Management System • MICROSOFT CORPORATION — Premier Support • MOTOROLA, INC — Radios • NEOGOV— Online Job Application System • ORACLE —Oracle Database • ORACLE /JD EDWARDS — Enterprise One Materials, Equipment & Services • PLANETBIDS, INC — Online vendor and bid Management • RAND MCNALLY—Thomas Bros. Maps • RBMWARE —Software and 2310 vibration analyzers • STANDARD AUTOMATION dba WONDERWARE WEST— Historian for SCADA system • VISION INTERNET SOLUTIONS, INC — Internet Website • WORKFORCE —Time Entry AYES: Deaton, Jones, Murphy, Nagel, Nielsen, Sebourn, Shaw (Alternate), Shawver, F. Smith, and Yarc 12/0712016 Operations Committee Minutes Page 6 of 8 NOES: None ABSTENTIONS: None ABSENT: Kiley, Steel, Wanke, and Withers 8. PROJECT MANAGEMENT INFORMATION SYSTEM, PROJECT NO. J-128 (Rob Thompson) Director of Engineering Rob Thompson introduced Dean Fisher, Engineering Manager, who provided an informative PowerPoint presentation that offered an overview of what is needed for the proper management of the documents and correspondence generated by Engineering projects, an overview of the problems presented by the current software application no longer being supported by the District's vendor, and opportunities for web-based Project Management solutions. Mr. Fisher responded to questions from the Committee regarding a number of topics including the current process, tracking of modifications (version control), number of licenses to be purchased, and whether or notthere is value/cost savings in using the same system as a peer agency, like the Orange County Water District. Director Steel arrived at 5:17 p.m. MOVED. SECONDED, and DULY CARRIED TO: Recommend to the Board of Directors to: Establish a project for Project Management Information System, Project No. J-128, with a budget of$4,000,000. AYES: Deaton, Jones, Murphy, Nagel, Nielsen, Sebourn, Shaw (Alternate), Shawver, F, Smith, Steel, and Yarc NOES: None ABSTENTIONS: None ABSENT: Kiley, Wanke, and Withers 9. OVERHAUL OF CENTRAL GENERATION ENGINES AT PLANT NOS. 1 AND 2, SPECIFICATION NO. S-2016-764BD (Ed Torres) Director of Operations & Maintenance Ed Torres provided an overview of this item and responded to questions from the Committee regarding how many years the number of running hours equates to and the benefits of the engines to the operation of the Sanitation District. MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Service Contract to NRG Energy Services, LLC for the overhaul of Central Generation Engines, Specification No. S-2016-76413D, for the period of February 1, 2017 through January 31, 2018, for total amount not to exceed $2.633.119 with four (4) one-year renewal options and; 1 210 712 01 6 Operations Committee Minutes Page 7 of 8 B. Approve an annual contingency of$ 526,624 (20%) AYES: Deaton, Jones, Murphy, Nagel, Nielsen, Sebourn, Shaw (Alternate), Shawver, F. Smith, Steel, and Yarc NOES: None ABSTENTIONS: None ABSENT: Kiley, Wanks, and Withers INFOR"dATION {TEMS: 10. ORANGE COUNTY SANITATION DISTRICT FINANCIAL UPDATE (Lorenzo Tyner) Director of Finance & Administrative Services Lorenzo Tyner presented an informative PowerPoint presentation that provided a summary of the District's financial operations and the Comprehensive Annual Financial Report(CAFR). Mr. Tyner responded to questions from the Committee regarding debt payments and indicated that staff would provide debt payment projections for the next four to five years to the Board of Directors. DEPARTMENT HEAD REPORTS: General Manager Jim Herberg reviewed meeting dates for December 2016 and January 2017. Director of Engineering Rob Thompson thanked Chair Nielsen for his service and Chair Nielsen thanked everyone for the opportunity to work with them and their commitment to the Sanitation District. Chair Nielsen commended staff for all the phenomenal work they do and wished everyone a happy holiday season. Board Vice-Chair Sebourn requested individuals contact him regarding desired Committee appointments or changes as these appointments will be forthcoming. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT Committee Vice-Chair Shawver declared the meeting adjourneJ at 5:38 p.m. to the next scheduled meeting of Wednesday, February 1, 2017 at 5:00 p.m. Submitted by, Tina Knapp Deputy Clerk of the Board 1 2/0 712 01 6 Operations Committee Minutes Page 8 of 8 ITEM NO. 5b MINUTES OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, November 9, 2016 at 5:00 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Committee Chairman Curry on November 9, 2016 at 5:00 p.m. in the Administration Building of the Orange County Sanitation District. Chairman Curry led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Keith Curry, Chair Jim Herberg, General Manager Lucille Kring, Vice-Chair Bob Ghirelli, Assistant General Manager Jim Ferryman Celia Chandler, Director of Human Resources Jim Katapodis Jim Colston, Director of Environmental Services Peter Kim Rob Thompson, Director of Engineering Greg Mills Ed Torres, Director of Operations & Joy Neugebauer Maintenance John Nielsen, Board Chair Lorenzo Tyner, Director of Finance & Greg Sebourn, Board Vice-Chair Administrative Services Kelly Lore, Clerk of the Board COMMITTEE MEMBERS ABSENT: Eddie Baker Steven Choi Elvis Harvey Glenn Parker Al Garcia Teresa Smith Rebecca Long Sal Tinajero Mark Manzo Kathy Millea Man Nguyen Steve Speakman John Swindler Mike White OTHERS PRESENT: Brad Hogin, General Counsel PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Committee Chairman Curry did not provide a report. 11/09/2016 Administration Committee Minutes Page 1 of 6 REPORT OF GENERAL MANAGER: General Manager Jim Herberg did not provide a report. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: In response to questions posed in previous meetings, Director of Finance and Administrative Services Lorenzo Tyner stated that at the time of purchase,the investment with Lehman Brothers was appropriate under our investment policy. The new investment policy would not allow the same today. He then presented a slide illustrating the average benchmark of our portfolio vs. probable investment in CD's for the same 15-year period. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED AND DULY CARRIED TO: Approve Minutes of the October 12, 2016 Administration Committee Meeting. AYES: Curry, Ferryman, Katapodis, Kim, Kring, Mills, Neugebauer and Sebourn NOES: None ABSTENTIONS: None ABSENT: Choi, Nielsen, Parker, T. Smith, and Tinajero 2. GENERAL MANAGER APPROVED PURCHASES (Lorenzo Tyner) MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file District purchases made under the General Manager's authority for the period of July 1, 2016 - September 30, 2016, AYES: Curry, Ferryman, Katapodis, Kim, Kring, Mills, Neugebauer and Sebourn NOES: None ABSTENTIONS: None ABSENT: Choi, Nielsen, Parker, T. Smith, and Tinajero 3. IBM MAXIMO EMERGENCY AND LEVEL 3 SUPPORT (Lorenzo Tyner) MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: A. Authorize a sole source purchase order agreement with Total Resource Management (TRIM) for Maximo Emergency and Level 3 Support for one year commencing January 1, 2017 through December 31, 2017 for a total amount not to exceed $160,000. 11/09/2016 Administration Committee Minutes Page 2 of 5 B. Authorize an option for three annual renewals at $160,000 per year for a total amount of$480,000. AYES: Curry, Ferryman, Katapodis, Kim, Kring, Mills, Neugebauer and Sebourn NOES: None ABSTENTIONS: None ABSENT: Choi, Nielsen, Parker, T. Smith, and Tinajero 4. CONSOLIDATED FINANCIAL REPORT FOR FIRST QUARTER ENDED SEPTEMBER 30, 2016 (Lorenzo Tyner) MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file Orange County Sanitation District First Quarter Financial Report for the period ended September 30, 2016, AYES: Curry, Ferryman, Katapodis, Kim, Kring, Mills, Neugebauer and Sebourn NOES: None ABSTENTIONS: None ABSENT: Choi, Nielsen, Parker, T. Smith, and Tinajero NON-CONSENT: 5. WASTEWATER REFUNDING REVENUE OBLIGATIONS, SERIES 2017A (Lorenzo Tyner) Mr. Tyner introduced Controller Mike White who provided a brief overview of this item. MOVED. SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: Authorize the General Manager to issue new fixed rate Certificates of Participation (COP), to be referred to as Wastewater Refunding Revenue Obligations, Series 2017A, in an amount sufficient to refund up to $91,620,000 of COP Series 2007A. AYES: Curry, Ferryman, Katapodis, Kim, Kring, Mills, Neugebauer and Sebourn NOES: None ABSTENTIONS: None ABSENT: Choi, Nielsen, Parker, T. Smith, and Tinajero Board Chairman John Nielsen arrived at the meeting at 5:04 p.m. 11/09/2016 Administration Committee Minutes Page 3 of 5 6. ORANGE COUNTY SANITATION DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FOR THE YEAR END JUNE 30, 2016 (Lorenzo Tyner) Mr. White presented an informative PowerPoint regarding the CAFR including: financial measurement; the net position over the prior year; changes in net assets in the last five years; decreased cash and investments; and collection, treatment, and disposal costs In comparison to budget. Mr. White then introduced auditor Peter George, MGO, who provided a presentation and distributed a handout regarding: responsibilities of the Auditor; deliverables; communications with the Administration Committee and stated there were no major issues encountered and no material weaknesses or significant deficiencies noted for FY 15/16. MOVED, SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: Receive and file the Orange County Sanitation District's Comprehensive Annual Financial Report for the year ended June 30, 2016, prepared by staff and audited by Macias Gini & O'Connell LLP (MGO), Certified Public Accountants, along with the following reports prepared by MGO: A. Report to the Board of Directors; and B. Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets. AYES: Curry, Ferryman, Katapodis, Kim, Kring, Mills, Neugebauer, Nielsen and Sebourn NOES: None ABSTENTIONS: None ABSENT: Choi, Parker, T. Smith, and Tinajero INFORMATION ITEMS: 7. ORANGE COUNTY SANITATION DISTRICT TREATMENT PLANT OVERVIEW (Ed Torres) Director of Operations and Maintenance Ed Torres introduced Operations Supervisor Eddie Baker who provided an informative PowerPoint presentation on the Sanitation District's treatment plant operations, including an overview of the 2015-16 treatment plant operating expenses, future flows for the Groundwater Replenishment System, and maintenance efforts. 6. ORANGE COUNTY SANITATION DISTRICT SEWER SERVICE CHARGES — REBATES (Lorenzo Tyner) Mr. Tyner provided a brief PowerPoint presentation on the Rebate of paid Sewer Service charges application process. 11/09/2016 Administration Committee Minutes Page 4 of 5 CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Committee Chair Curry congratulated those that had successfully been reelected to their agencies, and said goodbye to those Committee members who would not be returning to OCSD. He stated that it had been an honor to work with the group. ADJOURNMENT: Committee Chair Curry declared the meeting adjourned at 5:49 p.m. to the next regularly scheduled meeting of Wednesday, January 11, 2017 at 5:00 p.m. Submitted by: 4Keere 11/09/2016 Administration Committee Minutes Page 5 of 5 ITEM NO. 5c MINUTES OF THE LEGISLATIVE AND PUBLIC AFFAIRS COMMITTEE Orange County Sanitation District Wednesday, December 14, 2016 at 4:30 p.m. A meeting of the Legislative and Public Affairs Committee was called to order by Chair Sebourn on Wednesday, December 14, 2016 at 4:31 p.m. in the Administration Building of the Orange County Sanitation District, Chair Sebourn led the pledge of allegiance. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Greg Sebourn, Board Chair Jim Herberg, General Manager Tom Beamish, Director Bob Ghirelli, Assistant General Manager Peter Kim, Director Celia Chandler, Director of Human Lucille Kring, Director Resources John Withers, Director Rob Thompson, Director of Engineering Ed Torres, Director of Operations and COMMITTEE MEMBERS ABSENT: Maintenance VACANT, Member-At-Large Lorenzo Tyner, Director of Finance & VACANT, Member-At-Large Administrative Services Tina Knapp, Deputy Clerk of the Board Jennifer Cabral Tanya Chong Alfredo Garcia Mark Manzo Kelly Newell OTHERS PRESENT: Brad Hogin, General Counsel Eric O'Donnell, Townsend Public Affairs Eric Sapirstein, ENS Resources (via Teleconference) Cori Williams, Townsend Public Affairs PUBLIC COMMENTS: None. 1211412016 Legislative and Public Affairs Commdee Minutes Page 1 of 4 REPORTS: The Committee Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Committee Members. These reports are for information only and require no action by the Committee. No reports were given. CONSENT CALENDAR: Consent Calendar Items are considered to be routine and will be enacted, by the Committee, after one motion, without discussion. Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED. SECONDED. and DULY CARRIED TO: Approve minutes for the regular Legislative and Public Affairs Committee meeting held on November 8, 2016. AYES: Beamish, Kim, Kring, Sebourn, and Withers NOES: None ABSTENTIONS: None ABSENT: None NON-CONSENT CALENDAR: 2. AB 2022 BOTTLING OF GROUNDWATER REPLENISHMENT SYSTEM WATER (Bob Ghirelli) Principal Public Affairs Specialist Jennifer Cabral provided an overview of this item and answered questions from the Committee regarding specifics of the cost breakdown, types of bottles to be used, and logistics of testing and bottling the water. MOVED. SECONDED, and DULY CARRIED TO: Recommend to the Board of Directors to: A. Authorize up to $15,000 for the initial testing and bottling of Groundwater Replenishment System water, with the cost of the bottling and testing to be equally shared between the Orange County Sanitation District and Orange County Water District; and B. Authorize the General Manager to approve the label for the first-run of GWRS water bottles. AYES: Beamish, Kim, Kring, Sebourn, and Withers NOES: None ABSTENTIONS: None ABSENT: None 12/14/2016 Legislative and Public Affalis Committee Minutes Page 2 of 4 3. APPROVAL OF 2017 LEGISLATIVE & REGULATORY PLAN (Bob Ghirelli) Principal Public Affairs Specialist Jennifer Cabral provided an overview of this item indicating that the 2017 Legislative Plan was developed keeping in mind what industry partners, like the Orange County Water District, California Association of Sanitation Agencies, Association of California Cities-Orange County, and the County of Orange, might view as key issues. The 2017 Legislative Plan was developed around three guiding principles: funding assistance for Sanitation District projects through grants, appropriations, or other means; maintaining local control over governance of special districts, and other local entities; and opposing any additional, or redundant, regulatory requirements. Staff responded to questions from the Committee regarding what specific funding/grants we may be seeking in 2017. Director Withers requested that financial information detailing grants that might be pursued be identified to establish measurable targets. Staff will develop this information and bring the information back to the Committee at the next meeting. Staff also responded to questions regarding whether or not the Sanitation District has received grants for infrastructure and the possibility of developing a plan for which project timing would coincide with the availability of funding. MOVED. SECONDED AND DULY CARRIED TO: Recommend to the Board of Directors to: Approve the Orange County Sanitation District 2017 Legislative & Regulatory Plan. AYES: Beamish, Kim, Kring, Sebourn, and Withers NOES: None ABSTENTIONS: None ABSENT: None INFORMATION ITEMS: 4. LEGISLATIVE AFFAIRS UPDATE (Rebecca Long) Eric Sapirstein, ENS Resources, provided an update on Water Resources Development Act (WRDA) legislation, which includes the Water Infrastructure Improvements for the Nation (WIIN) Act. Mr. Sapirstein also provided a brief overview of WRDA legislation as it currently stands, including funding programs for water supply and alternative recycling programs, drought provisions, and water education. Cori Williams, Townsend Public Affairs (TPA), provided an update on activities in the State government over the past month and indicated that legislation has 12I14M16 Legislative and Public Affairs Committee Minutes Page 3 of 4 not yet been seen pertaining to water, with the exception of the water funding language seen in the parks bond that was introduced in the prior session. In response to a question from the Committee regarding whether or not the passage of Proposition 64 will affect wastewater, staff indicated that the passage of Proposition 64 should not affect wastewater. 5. PUBLIC AFFAIRS UPDATE (Jennifer Cabral) No Public Affairs Update was provided. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: Chair Sebourn declared the meeting adjourned at 5:00 p.m. to the next Legislative and Public Affairs Committee meeting, Monday, February 6, 2017 at 8:00 a.m. Submitted by: Tina Knapp Deputy Clerk of the Board 1V14I2016 Legislative and Public Affairs committee Minutes Page 4 of 4 ITEM NO. 5d MINUTES OF MEETING GROUNDWATER REPLENISHMENT SYSTEM STEERING COMMITTEE October 10, 2016 Committee Chair Yoh called the Groundwater Replenishment System Steering Committee meeting to order in the Boardroom at the District office. Following the Pledge of Allegiance to the flag,the Recording Secretary called the roll and reported a quorum. 2016 Committee Members Roger Yoh OCWD Director, Chair (present) Cathy Green OCWD Director Philip Anthony OCWD Director (present) John Nielsen OCSD Director, Vice Chair(present) Tom Beamish OCSD Director Jim Ferryman OCSD Director (present) Alternates Denis Bilodeau OCWD Director(No. 1) Jordan Brandman OCWD Director(No. 2) Dina Nguyen OCWD Director(No. 3) Lucille Kring OCSD Director(No. 1) Greg Seboum OCSD Director(No. 2) (present) Steve Jones OCSD Director(No. 3) OCWD OCSD Mike Markus Jim Herberq Mehul Patel KathyMillea Sandy Scott-Roberts Rebecca Lon Eleanor Tones Eros Yong John Kennedy Judy-Rae Karlsen, Assistant District Secrets Others: Debbie Burris- DOB Engineering Kenneth Chua—Singapore Pubic Utilities CONSENT CALENDAR The Consent Calendar was approved upon motion by Director Anthony, seconded by Director Nielsen and carried [5-01 as follows. [Yes-Nielsen, Ferryman, Seboum, Yoh, Anthony/No-0] 1. Minutes of Previous Meeting The Minutes of the GWRS Steering Committee meeting held July 11, 2016 are approved as presented. INFORMATIONAL ITEMS 2. GWRS Operations Update Director of Water ProductiontGWRS Mehul Patel reported that OCWD shares an exchange program with Singapore Public Utilities Board and he introduced Kenneth Chua as the exchange student 1 10/10=16 visiting OCWD. He also gave an update on the GWRS microfiltration unit membranes and noted they will all be replaced by March 2017. Executive Director of Operations Bill Dunivin updated the Committee on GWRS Operations, noting that as of September 30, 2016 the GWRS Fiscal Year to Date production was 22,896.16 acre feet (AF)which is -3,065.48 AF below the target production goal of 25,962 AF. He advised the September flow reductions and the facility shutdown to inspect the GWRS pipeline and other preventative maintenance tasks caused the production rate to fall below target production rates. Mr. Dunivin noted the daily average production for the quarter July through September 2016 was 80,97 million gallons per day. OCWD General Manager Mike Markus reported that during the GWRS plant shutdown staff performed a major software upgrade. 3. Update on SP-173 Effluent Reuse Study/GWRS Final Expansion Mr. Patel reported the OCSD SP-173 Effluent Reuse Study has been completed. He advised that both agency staff are working on the terms and conditions within the Joint Exercise of Powers Agreement for the GWRS Final Expansion project. OCSD Engineer Kathy Millea reported the new Joint Exercise of Powers Agreement will outline the financial and operational responsibilities of each agency and will include the new projects associated with the GWRS Final Expansion project. She advised the GWRS Final Expansion project was approved by both agency boards and the project will now move forward to issuance of Request for Proposals (RFP)for design. She reported the following next steps. October • Receive and file Final SP-173 Effluent Reuse Study Report • Begin Water Quality Microfiltration Pilot Study at OCSD Plant 2 November • Present Joint Agreement at OCSD/OCWD Board meetings for approval January • Finalize RFP for design 4. Quarterly Outreach Report OCWD Director of Public Affairs Eleanor Torres provided an update on GWRS outreach activities. GENERAL MANAGERS REPORT OCWD General Manager Mike Markus advised the GWRS Steering Committee will hold elections at the January 9, 2017 meeting. ADJOURNMENT There being no further business, the meeting a� M. � OCWD Director Roger Yoh, Chair 2 MINUTES OF THE MEETING GROUNDWATER REPLENISHMENT SYSTEM STEERING COMMITTEE Monday, January 9, 2017 OCSD Director Sebourn called the Groundwater Replenishment System Steering Committee meeting to order in the Boardroom at the District office. Following the Pledge of Allegiance to the flag, the Secretary called the roll and reported a quorum. Committee Members Roger Yoh OCWD 1 (not present) Cathy Green OCWD 2 Phil Anthony OCWD 3 Greg Sebourn OCSD 1 James Ferryman OCSD 2 Lucille Kring OCSD 3 Alternates Steve Jones OCSD 1 Vacant OCSD 2 Vacant OCSD 3 Denis Bilodeau OCWD 1 Jordan Brandman OCWD 2 (arrived 5:05 p.m.) Dina Nguyen OCWD 3 (not present) OCWD Staff OCSD Staff Mike Wehner Jim Herber Bill Dunivin KathyMillea Sandy Scott-Roberts Eleanor Torres Others Judy-Rae Karlsen Assistant District Secretary Debbie Burris- DDB Engineering • Annual Reorganization of GWRS Steerina Committee Officers GWRS Steering Committee member Greg Sebourn stated the Steering Committee reorganizes on an annual basis. It was a consensus of the Committee members present to approve the following nominations: • 2017 GWRS Steering Committee Chair—OCSD Director Greg Sebourn • 2017 GWRS Steering Committee Vice Chair—OCWD Director Roger Yoh Chairman Sebourn noted that alternate Committee members will be appointed by OCSD prior to the next meeting. CONSENT CALENDAR The Consent Calendar was approved upon motion by Director Anthony, seconded by Director Ferryman and carried [6-0] as follows. [Yes— Sebourn, Ferryman, Kring, Green, Anthony, Bilodeau/No- 0] 1. Minutes of Previous Meetino The minutes of the GWRS Steering Committee meeting held October 9, 2016 are approved as presented. - 1 - 1192017 MATTER FOR CONSIDERATION OCWD Director Brandman arrived during the following discussion. 2. Outreach for GWRS Bottled Water and the 10th Anniversary of GWRS OCWD Director of Public Affairs Eleanor Torres noted the 101h anniversary of the GWRS project is in January and deserves a commemorative event and media attention. She then discussed options for the event and presented marketing ideas for the limited quantity of bottled GWRS water. Ms. Torres reminded the Committee of the importance of keeping GWRS, OCWD and the OCSD at the forefront of positive media attention and solidifying the agencies' global leadership role in the water industry. She noted the labels on the water bottles have been designed and the initial run of 16,000 bottles of GWRS water will be available for distribution in February 2017. The Committee asked questions about the outreach plan developed by Dick Jones Communications and the proposed budget required to support the outreach activities. Director Anthony recommended that each agency be given an opportunity to review the options presented and then hold a special GWRS Steering Committee meeting on January 30, 2017 to discuss the priorities of each agency. The Committee was in support of this recommendation and took the following action. Upon motion by Director Anthony, seconded by Director Ferryman and carried (6-0) the Committee recommended that staff schedule a special GWRS Steering Committee meeting on January 30, 2017@ 5:00 pm. [Yes—Sebourn, Ferryman, Kring, Green, Anthony, Bilodeau/No- O] INFORMATIONAL ITEMS 3. GWRS Operations Update OCWD Executive Director of Operations Bill Dunivin gave a brief update on GWRS operations, the replacement of reverse osmosis and microfiltration modules and water production statistics. 4. Update on GWRS Final Expansion GWRS Program Manager Sandy Scott-Roberts gave a brief overview of the GWRS Final Expansion project. She reviewed the five projects involved in the GWRS Final Expansion and then advised the Committee that both agencies have issued their respective Requests for Proposals for construction design contracts. 5. Quarterly Outreach Report [October— December 20161 Ms. Torres reviewed the GWRS Quarterly Outreach report. Director Sebourn requested that staff schedule a tour for the GWRS Steering Committee members that includes GWRS facilities, Prado dam and OCWD recharge basins and operations near the Santa Ana river. Ms. Torres advised that she will return to the Committee to schedule a tour after OCSD has its alternate members. - 2 - 1/9/2017 DIRECTORS' REPORTS OCWD Director Anthony asked OCSD Jim Herberg if OCSD was providing assistance to the Los Angeles Sanitation District, Mr. Herberg said OCSD was not contacted for assistance but he would reach out to their staff and offer support. Director Seboum advised the next GWRS Steering Committee will be a special meeting on Monday, January 30, 2017 at 5:00 p.m. in the OCWD boardroom. ADJOURNMENT There being no further business to come before the Committee, the meeting was adjourned at 5:50 P.M. O D Duct eg Sebourn, Chair - 3 - BOARD OF DIRECTORS Meeting Date TOBd.Of Dir. oV 7 AGENDA REPORT Item Item fi Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF JANUARY2017 GENERAL MANAGER'S RECOMMENDATION Receive and file the report of the Investment Transactions for the month of January 2017. BACKGROUND The CA Government Code requires that a monthly report of investment transactions be provided to the legislative body. Attached is the monthly report of investment transactions for the month ended January 31, 2017. RELEVANT STANDARDS • CA Government Code Section 53607 PRIOR COMMITTEE/BOARD ACTIONS N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s)is included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Report of the Investment Transactions for the month ended January 31, 2017 Page 1 of 1 /,® Orange County Sanitation District Consolidated Transaction Ledger Account#10283 12/31/16 Thru 1/31/17 Thansaction Settlement Acq/Disp Interest ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 01/02/2017 261908107 74,400.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 74,400.00 0.00 74,400.00 0.00 Purchase 01/03/2017 261908107 1.53 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 1.53 0.00 1.53 0.00 Purchase 01/04/2017 261908107 3,701.75 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 3,701.75 0.00 3,701.75 0.00 Purchase 01/04/2017 261908107 2,530.74 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 2,530.74 0.00 2,530.74 0.00 Purchase 01/09/2017 261908107 55,000.00 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 55,000.00 0.00 55,000.00 0.00 Purchase 01/09/2017 261908107 11,472.51 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 11,472.51 0.00 11,472.51 0.00 Purchase 01/12Q017 261908107 18,750.00 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 18,750.00 0.00 18,750.00 0.00 Purchase 01/14/2017 261908107 43,750.00 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 43,750.00 0.00 43,750.00 0.00 Purchase 01/15Q017 261908107 6,612.58 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 6,612.58 0.00 6,612.58 0.00 Purchase 01/15Q017 261908107 11,250.00 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 11,250.00 0.00 11,250.00 0.00 Purchase 01/15Q017 261908107 3,000,000.00 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 3,000,000.00 0.00 3,000,000.00 0.00 Purchase 01/16/2017 261908107 24,375.00 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 24,375.00 0.00 24,375.00 0.00 Purchase 01/17/2017 261908107 2,096.58 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 2,096.58 0.00 2,096.58 0.00 Purchase 01/17/2017 261908107 2,742.66 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 2,742.66 0.00 2,742.66 0.00 Purchase 01/17/2017 261908107 2,706.83 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 2,706.83 0.00 2,706.83 0.00 Purchase 01/17/2017 261908107 1.859.13 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 1,859.13 0.00 1,859.13 0.00 Purchase 01/17/2017 261908107 3,657.00 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 3,657.00 0.00 3,657.00 0.00 Purchase 01/17/2017 261908107 1,592.09 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 1,592.09 0.00 1,592.09 0.00 Purchase 01/17/2017 261908107 30.65 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 30.65 0.00 30.65 0.00 Purchase 01/17/2017 261908107 972.95 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 972.95 0.00 972.95 0.00 Purchase 01/17/2017 261908107 254,820.75 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 254,820.75 0.00 254,820.75 0.00 Purchase 01/17/2017 261908107 184,045.73 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 184,045.73 0.00 184,045.73 0.00 Purchase 01/17/2017 261908107 164,034.11 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 164,034.11 0.00 164,034.11 0.00 Purchase 01/17/2017 261908107 231,589.98 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 231,589.98 0.00 231,589.98 0.00 Purchase 01/1SQ017 261908107 17,850.00 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 17,850.00 0.00 17,850.00 0.00 Purchase 01/1SQ017 261908107 91,998.53 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 91,998.53 0.00 91,998.53 0.00 Purchase 01/1SQ017 261908107 244,446.07 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 244,446.07 0.00 244,446.07 0.00 Purchase 01/1SQ017 4581XDCW6 3,000,000.00 Inter-American Dev Bank Note 99.877 2.15% 2,995,310.00 0.00 2,996,310.00 0.00 2.125%Due 1118/2022 Purchase 01/20/2017 261908107 14,075.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 14,075.00 0.00 14,075.00 0.00 Purchase 01/20/2017 261908107 4,040,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 4,040,000.00 0.00 4,040,000.00 0.00 Chandler Asset Management-CONFIDENTIAL Page 11 Execution Time:2/8/2017 2:51:07 PM Orange County Sanitation District Consolidated Transaction Ledger Account#10283 12/31/16 Thru 1/31/17 ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss ACQUISITIONS Purchase 01/20/2017 261908107 257.16 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 257.16 0.00 257.16 0.00 Purchase 01/20/2017 261908107 293.32 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 293.32 0.00 293.32 0.00 Purchase 01/202017 261908107 592.75 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 592.75 0.00 592.75 0.00 Purchase 01/20/2017 261908107 164.08 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 164.08 0.00 164.08 0.00 Purchase 01/20/2017 261908107 1,325.39 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 1,325.39 0.00 1,325.39 0.00 Purchase 01/20/2017 313385FE1 2,000,000.00 FHLB Discount Note 99.840 0.56% 1,996,791.67 0.00 1,996,791.67 0.00 0.55%Due 5/5/2017 Purchase 01/20/2017 313589FA6 4,000,000.00 FNMA Discount Note 99.850 0.54% 3,993,990.50 0.00 3,993,990.50 0.00 0.54%Due 5/1/2017 Purchase 01/222017 261908107 65,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 65,000.00 0.00 65,000.00 0.00 Purchase 01/232017 084664BS9 1,000,000.00 Berkshire Hathaway Note 100.176 1.03% 1,001,760.00 3,022.22 1,004,782.22 0.00 1.6%Due 5/1 512 01 7 Purchase 01/232017 166764BC3 1,000,000.00 Chevron Corp Note 100.078 1.24% 1,000,780.00 2,762.67 1,003,542.67 0.00 1.344%Due 11/92017 Purchase 0123/2017 24422ESN0 1,000,000.00 John Deere Capital Corp Note 100.042 1.01 % 1,000,420.00 1,281.25 1,001,701.25 0.00 1.125%Due 6/122017 Purchase 01/232017 261908107 22,500.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 22,500.00 0.00 22,500.00 0.00 Purchase 01/232017 261908107 1,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 1,000,000.00 0.00 1,000,000.00 0.00 Purchase 01/232017 261908107 225,787.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 225,787.00 0.00 225,787.00 0.00 Purchase 01/252017 261908107 4,900,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 4,900,000.00 0.00 4,900,000.00 0.00 Purchase 01/252017 261908107 3,188.25 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 3,188.25 0.00 3,188.25 0.00 Purchase 01/252017 261908107 182.73 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 182.73 0.00 182.73 0.00 Purchase 01/252017 261908107 300.04 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 300.04 0.00 300.04 0.00 Purchase 01/252017 261908107 2,955.35 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 2,955.35 0.00 2,955.35 0.00 Purchase 01/252017 261908107 1,663.40 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 1,663.40 0.00 1,663.40 0.00 Purchase 01/252017 261908107 578.17 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 578.17 0.00 578.17 0.00 Purchase 01/252017 261908107 13,519.30 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 13,519.30 0.00 13,519.30 0.00 Purchase 01/252017 261908107 9,909.87 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 9,909.87 0.00 9,909.87 0.00 Purchase 01/252017 261908107 5,720.33 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 5,720.33 0.00 5,720.33 0.00 Purchase 01/252017 261908107 49.42 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 49.42 0.00 49.42 0.00 Purchase 01/252017 261908107 2,112.92 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 2,112.92 0.00 2,112.92 0.00 Purchase 01/252017 261908107 10,370.07 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 10,370.07 0.00 10,370.07 0.00 Purchase 01/252017 261908107 680.11 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 680.11 0.00 680.11 0.00 Chandler Asset Management-CONFIDENTIAL Page 12 Execution Time:2/82017 2:51:07 PM Orange County Sanitation District Consolidated Transaction Ledger ( Account#10283 12/31/16 Thru 1/31/17 ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 01/25/2017 261908107 9,509.97 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 9,509.97 0.00 9,509.97 0.00 Purchase 01/25/2017 261908107 761.21 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 761.21 0.00 761.21 0.00 Purchase 01/25Q017 261908107 1,769.37 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 1,769.37 0.00 1,769.37 0.00 Purchase 01/25/2017 91159HHD5 675,000.00 US Bancorp Callable Note Cont 4/15/2017 100.127 1.08% 675,857.25 2,166.63 678,022.88 0.00 1.65%Due 5/15/2017 Purchase 01/26/2017 261908107 5,250,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 5,250,000.00 0.00 5,250,000.00 0.00 Purchase 01/27/2017 261908107 2,500.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 2,500.00 0.00 2,500.00 0.00 Purchase 01/27/2017 261908107 18,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 18,000,000.00 0.00 18,000,000.00 0.00 Purchase 01/27/2017 261908107 7,260.30 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 7,260.30 0.00 7,260.30 0.00 Purchase 01/27/2017 912796LG2 5,000,000.00 US Treasury Bill 99.753 0.56% 4,987,655.56 0.00 4,987,655.56 0.00 0.56%Due 7/6/2017 Purchase 01/28Q017 261908107 77,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 77,000.00 0.00 77,000.00 0.00 Purchase 01/30/2017 261908107 1,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.39% 1,000,000.00 0.00 1,000,000.00 0.00 Purchase 01/30/2017 912796LG2 10,000,000.00 US Treasury Bill 99.752 0.58% 9,975,163.47 0.00 9,975,163.47 0.00 0.57%Due 7/6/2017 Purchase 01/31Q017 261908107 33,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.40% 33,000,000.00 0.00 33,000,000.00 0.00 Purchase 01/31Q017 261908107 164,375.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.40% 164,375.00 0.00 164,375.00 0.00 Purchase 01/31Q017 261908107 70,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.40% 70,000.00 0.00 70,000.00 0.00 Purchase 01/31Q017 313385EX0 5,000,000.00 FHLB Discount Note 99.870 0.55% 4,993,476.00 0.00 4,993,475.00 0.00 0.54%Due 4/28/2017 Purchase 01/31/2017 313397DK4 1,250,000.00 FHLMC Discount Note 99.929 0.51 % 1,249,114.58 0.00 1,249,114.58 0.00 0.5%Due 3/23/2017 Purchase 01/31/2017 3135GOS38 3,000,000.00 FNMA Note 99.819 2.04% 2,994,570.00 3,666.67 2,998,236.67 0.00 2%Due 1/5/2022 Purchase 01/31Q017 369604BC6 1,000,000.00 General Elecac CD Note 103.365 1.24% 1,033,650.00 8,020.83 1,041,670.83 0.00 5.25%Due 12/6/2017 Purchase 01/31/2017 91159HHD5 65,000.00 US Bancorp Callable Note Cont 4/15/2017 100.110 1.10% 65,071.50 226.42 65,297.92 0.00 1.65%Due 5/15/2017 Purchase 01/31/2017 9127MK01 10,000,000.00 US Treasury Bill 99.916 0.47% 9,991,595.14 0.00 9,991,595.14 0.00 0.47%Due 4/6/2017 Subtotal 120,350,687.68 120,316,892.35 21,145.69 120,338,038.04 0.00 TOTAL ACQUISITIONS 120,350,687.68 120,316,892.35 21,145.69 120,338,038.04 0.00 Chandler Aeaet Management-CONFIDENTIAL Page 13 Exaction Time:2IN2017 2:51:07 PM C.`® Orange County Sanitation District Consolidated Transaction Ledger Account#10283 12/31/16 Thru 1/31/17 Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss DISPOSITIONS Sale 01/18/2017 261908107 2,996,310.00 Dreyfus Tray/Agcy Cash Management 521 1.000 0.42% 2,996,310.00 0.00 2,996,310.00 0.00 Sale 01/20/2017 261908107 5,990,782.17 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 5,990,782.17 0.00 5,990,782.17 0.00 Sale 01/23/2017 261908107 3,010,026.14 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 3,010,026.14 0.00 3,010,026.14 0.00 Sale 01/25/2017 261908107 678,022.88 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 678,022.88 0.00 678,022.88 0.00 Sale 01/27/2017 261908107 4,987,655.56 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 4,987,655.56 0.00 4,987,655.56 0.00 Sale 01/30/2017 261908107 9,975,163.47 Dreyfus Tray/Agcy Cash Management 521 1.000 0.39% 9,975,163.47 0.00 9,975,163.47 0.00 Sale 01/31/2017 261908107 1,106,968.75 Dreyfus Tray/Agcy Cash Management 521 1.000 0.40% 1,106,968.75 0.00 1,106,968.75 0.00 Sale 01/31/2017 261908107 2,998,236.67 Dreyfus Tray/Agcy Cash Management 521 1.000 0.42% 2,998,236.67 0.00 2,998,236.67 0.00 Sale 01/31/2017 261908107 16,234,184.72 Dreyfus Tray/Agcy Cash Management 521 1.000 0.40% 16,234,184.72 0.00 16,234,184.72 0.00 Subtotal 47,977,350.36 47,977,350.36 0.00 47,977,350.36 0.00 Paydown 01/09/2017 62888UAA8 11,109.35 NCUA Guaranteed Note CM02010-R2Due 100.000 11,109.35 363.16 11,472.51 0.00 11/6/2017 Paydown 01/17/2017 161571HHO 0.00 Chase CHAIT Pool#2016-A7 100.000 0.00 3,657.00 3,657.00 0.00 1.06%Due 9/16/2019 Paydown 01/17/2017 3133TCE95 1,480.15 FHLMC FSPC E3A 100.000 1,480.15 111.94 1,592.09 0.00 2.892%Due 8/15/2032 Paydown 01/17/2017 31348SWZ3 25.62 FHLMC FH 786064 100.000 25.62 5.03 30.65 0.00 2.262%Due 1/1/2028 Paydown 01/17/2017 3837H4NX9 940.74 GNMA Poo1#2000-9 100.000 940.74 32.21 972.95 0.00 9.5%Due 2/16/2030 Paydown 01/17/2017 43814CAC2 0.00 Honda Auto Receivables 2016-2 A3 100.000 0.00 2,096.58 2,096.58 0.00 1.39%Due 4/15/2020 Paydown 01/17/2017 477877AD6 252,816.29 John Deere Owner Trust 2014-B A3 100.000 252,816.29 2,004.46 254,820.75 0.00 1.07%Due 1111 5/2 01 8 Paydown 01/17/2017 47788MAC4 0.00 John Deere Owner Trust 2016-A A3 100.000 0.00 2,742.66 2,742.66 0.00 1.36%Due 4/15/2020 Paydown 01/17/2017 47788NAB4 0.00 John Deere Owner Trust 2016-B A2 100.000 0.00 2,706.83 2,706.83 0.00 1.09%Due D15/2019 Paydown 01/17/2017 65478WAB1 0.00 Nissan Auto Receivables Owner 2016-C 100.000 0.00 1,859.13 1,859.13 0.00 A2A 1.07%Due 5/15/2019 Paydown 01/17/2017 89231 MAC9 183,789.41 Toyota Auto Receivables Owner 2014-A 100,000 183,789.41 256.32 184,045.73 0.00 0.67%Due 1 211 5/2 01 7 Paydown 01/17/2017 89231TAB6 163,607.47 Toyota Auto Receivables Owner 2015-C 100.000 163,607.47 426.64 164,034.11 0.00 0.92%Due 2/15/2018 Chandler Aesel Management-CONFIDENTIAL Page 14 Execution Time:0/ 0172:51:07 PM C.`® Orange County Sanitation District Consolidated Transaction Ledger Account#10283 12/31/16 Thru 1/31/17 Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss DISPOSITIONS Paytlown 01/17/2017 89236WAC2 228,898.92 Toyota Auto Receivables Owner 2015-A 100.000 228,898.92 2,691.06 231,589.98 0.00 1 A 2%Due 2/1 512 01 9 Paytlown 01/18/2017 43814GAC4 91,653.79 Honda Auto Receivables 2014-2 A3 100.000 91,653.79 344.74 91,998.53 0.00 0.77%Due 3/19/2018 Paytlown 01/182017 43814NAB1 242,745.78 Honda Auto Receivables 2016.1 A2 100.000 242,745.78 1,700.29 244,446.07 0.00 1.01%Due 6/18/2018 Paytlown 01/20/2017 36225CAZ9 214.65 GNMA P.I#G280023 100.000 214.65 42.51 257.16 0.00 2.816%Due 1220/2026 Paytlown 01/20/2017 36225CC20 240.70 GNMA P.I#G280088 100.000 240.70 52.62 293.32 0.00 2.817%Due 6/202027 Paytlown 01/202017 36225CN28 445.14 GNMA PobI#G2 81D408 100.000 445.14 147.61 592.75 0.00 2.691%Due 51202030 Paytlown 01/202017 36225CNM4 145.36 GNMA Pobl#G280395 100.000 145.36 18.72 164.08 0.00 2.877%Due 41202030 Paytlown 01/20/2017 W225DCBB 1,170.95 GNMA PaoI#G280965 100.000 1,170.95 154.44 1,325.39 0.00 2.31%Due 7/20/2034 Paytlown 01/232017 43813JAC9 225,634.93 Honda Auto Receivables 2014-1 A3 100.000 225,634.93 152.07 225,787.00 0.00 0.67%Due 11121/2 01 7 Paytlown 01/252017 03215PFN4 0.00 AMRESCO Residential Seventies 1999-1 100.000 0.00 182.73 182.73 0.00 ADue 6/2512029 Paytlown 0125/2017 31371NUC7 204.71 FNMA FN 257179 100.000 204.71 95.33 300.04 0.00 4.5%Due 4/1/2028 Paytlown 01/252017 31376KT22 2,237.51 FNMA FN 357969 100.000 2,237.51 717.84 2,955.35 0.00 5%Due 9/12035 Paytlown 01/252017 31381 PDA3 609.98 FNMA FN 466397 100.000 609.98 1,053.42 1,663.40 0.00 3.4%Due 11/12020 Paytlown 01252017 3138EG6F6 507.07 FNMA FN AL0869 100.000 507.07 71.10 578.17 0.00 4.5%Due 6/1/2029 Paytlown 01/252017 313MJY35 8,196.10 FHLMC FSPC T-582A 100.000 8,196.10 5,323.20 13,519.30 0.00 6.5%Due 9252043 Paytlown 01/252017 31397QRED 9,504.73 FNMA FNR 2011-3 FA 100.000 9,504.73 405.14 9,909.87 0.00 0.832%Due 21252041 Paytlown 0125/2017 31398VJ98 0.00 FHLMC FHMS K006 A2 100.000 0.00 3,188.25 3,188.25 0.00 4.251%Due 1/252020 Paytlown 01/252017 31403DJZ3 5,005.84 FNMA Pool#745580 100.000 5,005.84 714.49 5,720.33 0.00 5%Due 6/12036 Paytlown 01/252017 31403GXF4 27.79 FNMA Pool#FN 748678 100.000 27.79 21.63 49.42 0.00 5%Due 10/1/2033 Paytlown 0125/2017 31406PQYB 914.47 FNMA Pool#FN 815971 100.000 914.47 1,198.45 2,112.92 0.00 5%Due 3/1/2035 Chandler Assal Management-CONFIDENTIAL Page 15 Execution Time:2/82017 2:51:07 PM C.`® Orange County Sanitation District Consolidated Transaction Ledger Account#10283 12/31/16 Thru 1/31/17 Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss DISPOSITIONS Paytlown 01/25/2017 31406XYdr5 9,974.92 FNMA Pool#FN 823358 100.000 9,974.92 395.15 10,370.07 0.00 2875%Due 2/1/2035 Paytlown 01/25/2017 31407BXH7 551.00 FNMA Pool#FN 826080 100.000 551.00 129.11 680.11 0.00 5%Due 7/l/2035 Paytlown 01/252017 31410F4V4 8,108.19 FNMA Poo1#FN 888336 100.000 8,108.19 1,401.78 9,509.97 0.00 5%Due 7/l/2036 Paytlown 01/252017 31417YAY3 651.05 FNMA PODI#FN MA0022 100.000 651.05 110.16 761.21 0.00 4.5%Due 4/1/2029 Paytlown 01/25/2017 78445JAA5 1,549.55 SLMA 2008-9 ADue 425/2023 100.000 1,549.55 219.82 1,769.37 0.00 Paytlown 0127/2017 313961 7,240.89 FNMA FNR 2007-114 A6Due 10/27/2037 100.000 7,240.89 19.41 7,260.30 0.00 Subtotal 1,460,203.05 1,460,203.05 36,813.03 1,497,016.08 0.00 Maturity 01/15/2017 912828A91 3,000,000.00 US Treasury Note 100.000 3,000,000.00 0.00 3,000,000.00 0.00 0.75%Due 1/15/2017 Maturity 0120/2017 313385AVB 2,040,000.00 FHLB Discount Note 100.000 2,040,000.00 0.00 2,040,000.00 0.00 0.34%Due 1/20/2017 Maturity, 01202017 313397AV3 2,000,000.00 FHLMC Discount Note 100.000 2,000,000.00 0.00 2,000,000.00 0.00 0.47%Due 112 012 01 7 Maturity, 01/232017 89233GNP7 1,000,000.00 Toyota Motor Credit Discount CP 99.813 1,000,000.00 0.00 1,000,000.00 0.00 0.74%Due 1/23/2017 Maturity, 01252017 02665JNR7 900,000.00 American Honda Corp Discount CP 99.933 900,000.00 0.00 900,000.00 0.00 0.73%Due 1/25/2017 Maturity, 01252017 313385BA3 1,000,000.00 FHLB Discount Note 100.000 1,000,000.00 0.00 1,000,000.00 0.00 0.356%Due 1125/2017 Maturity, 01/252017 313589BAO 3,000,000.00 FNMA Discount Note 100.000 3,000,000.00 0.00 3,000,000.00 0.00 0.41%Due 1/25/2017 Maturity 01262017 912796KEB 5,250,000.00 US Treasury Bill 100.000 5,250,000.00 0.00 5,250,000.00 0.00 0.347%Due 1126/2017 Maturity, 01272017 313385BC9 15,000,000.00 FHLB Discount Note 100.000 15,000,000.00 0.00 15,000,000.00 0.00 0.42%Due 1/27/2017 Maturity 01272017 3137EADUO 1,000,000.00 FHLMC Note 100.000 1,000,000.00 0.00 1,000,000.00 0.00 0.5%Due 127/2017 Maturity 01272017 69372ANT5 2,000,000.00 Paccar Financial Discount CP 99.932 2,000,000.00 0.00 2,000,000.00 0.00 0.7%Due 1/272017 Maturity, 01/302017 313385BF2 1,000,000.00 FHLB Discount Note 100.000 1,000,000.00 0.00 1,000,000.00 0.00 0.5%Due 1/30/2017 Maturity, 01/312017 313397BG5 17,000,000.00 FHLMC Discount Note 100.000 17,000,000.00 0.00 17,000,000.00 0.00 0.47%Due 1/31/2017 Chandler Asset Management-CONFIDENTIAL Page i6 Execution Time:OM017 2:51:07 PM �/`® Orange County Sanitation District Consolidated Transaction Ledger Account#10283 12/31/16 Thru 1/31/17 Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss DISPOSITIONS Maturity 01/31/2017 912828SC5 16,000,000.00 US Treasury Note 100000 16,000,000.00 0.00 16,000,000.00 0.00 0875%Due 1/31/2017 Subtotal 70,190,000.00 70,190,000.00 0.00 70,190,000.00 0.00 Security 01/31/2017 261908107 28,000,000.00 Dreyfus Trsy/Agcy,Cash Management 521 1.000 28,000,000.00 0,00 28,000,000.00 0.00 Withdrawal Security 01/31/2017 912828WUO 15,080.00 US Treasury Inflation Index Note 99.678 15,080.00 0.00 15,080.00 121.53 Withdrawal 0.125%Due 7/15/2024 Subtotal 28,015,080.00 28,015,080.00 0.00 28,015,080.00 121.53 TOTAL DISPOSITIONS 147,642,633.41 147,642,633A1 36,813.03 147,679,446A4 121.53 OTHER TRANSACTIONS Interest 01/02/2017 073902CDB 3,200,00000 Bear Stearns Note 0.000 74,400.00 0.00 74,400.00 000 4.65%Due 7/02018 Interest 01/09/2017 36962G7MO 5,000,000.00 General ElecMc Capital Corp Callable Note 0.000 55,000.00 0.00 55,000.00 0.00 1 X 12/9/2019 2.2%Due 1/9/2020 Interest 01/12/2017 3137EADN6 5,000,000.00 FHLMC Note 0.000 18,750.00 0.00 18,750.00 0.00 0.75%Due 1/1212018 Interest 01/14/2017 3137EADV8 5,000,000.00 FHLMC Note 0.000 18,750.00 0.00 18,750.00 0ol) 0.75%Due 7/14/2017 Interest 01/14/2017 4581XOCG1 5,000,000.00 Inter-American Dev Bank Note 0.000 25,000.00 0.00 25,000.00 0.00 1%Due 7/14/2017 Interest 01/15/2017 912828A91 3,000,000.00 US Treasury Note 0.000 11,250.00 0.00 11,250.00 0.00 0.75%Due 1/15/2017 Interest 01/15/2017 912828WUO 10,586,784.00 US Treasury Inflation Index Note 0.000 6,612.58 0.00 6,612.58 0ol) 0.125%Due 7115/2024 Interest 01/16/2017 40428HPH9 3,000,000.00 HSBC USA Inc Note 0.000 24,375.00 0.00 24,375.00 0.00 1.625%Due 1/16/2018 Interest 01/18/2017 38141GFG4 600,000.00 Goldman Sachs Group Inc Note 0.000 17,850.00 0.00 17,850.00 0.00 5.95%Due 1/1812018 Interest 01/20/2017 45950KCJ7 2,500,000.00 Inlernmonal Finance Corp Note 0.000 14,075.00 0.00 14,075.00 0ol) 1.125%Due 7120/2021 Interest 01/22/2017 94974BGM6 5,000,000.00 Wells Fargo Corp Note 0.000 65,000.00 0.00 65,000.00 0.00 2.6%Due 7/22/2020 Chandler Asset Management-CONFIDENTIAL Page 17 Execution Time:Xa2017 2:51:07 PM '" Orange County Sanitation District Consolidated Transaction Ledger Account#10283 12/31/16 Thru 1/31/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss OTHER TRANSACTIONS Interest 01/23/2017 46625HI(A7 2,000,000.00 JP Morgan Chase Callable Note Cant 0.000 22,500.00 0.00 22,500.00 0.00 12/23/2019 2.25%Due 1/2312020 Interest 01/27/2017 3137EADUO 1,000,000.00 FHLMC Note 0.000 2,500.00 0.00 2,500.00 0ol) 0.5%Due 1/27/2017 Interest 01/28/2017 61747WAL3 2,800,000.00 Morgan Stanley Note 0.000 77,000.00 0.00 77,000.00 0.00 5.5%Due 7/2812021 Interest 01/31/2017 912828633 11,000,000.00 US Treasury Note 0.000 82,500.00 0.00 82,500.00 0.00 1.5%Due 1/31/2019 Interest 01/31/2017 912828N89 6,000,000.00 US Treasury Note 0.000 41,250.00 0.00 41,250.00 bog 1.375%Due 1/31/2021 Interest 01/31/2017 912828SC5 16,000,000.00 US Treasury Note 0.000 70,000.00 0.00 70,000.00 0.00 0.875%Due 1/31/2017 Interest 01/31/2017 912828WW6 5,000,000.00 US Treasury Note 0.000 40,625.00 0.00 40,625.00 0.00 1.625%Due 7/31/2019 Subtotal 91,686,784.00 667,437.58 0.00 667,437.58 0.00 Dividend 01/03/2017 261908107 6,205,492.70 Dreyfus Trsy/Agog Cash Management 521 0.000 1.53 0.00 1.53 0.00 Dividend 01/04/2017 261908107 5,643,509.21 Dreyfus Trsy/Agcy Cash Management 521 0.000 2,530.74 0.00 2,530.74 0.00 Dividend 01/04/2017 261908107 6,205,492.70 Dreyfus Trsy/Agcy Cash Management 521 0.000 3,701.75 0.00 3,701.75 0.00 Subtotal 18,054,494.61 6,230.02 0.00 6,230.02 0.00 TOTAL OTHER TRANSACTIONS 109,741,278sl 673,671.60 0.00 673,671.60 0.00 Chandler Asset Management-CONFIDENTIAL Page 18 Execution Time:082017 2:51:07 PM OPERATIONS COMMITTEE Meeting Date T%%2011oir. gz/ol/I7 z/zz/v AGENDA REPORT Item Item Number 3 7 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations and Maintenance SUBJECT: AGREEMENT WITH THE CALIFORNIA ALLIANCE FOR SEWER SYSTEM EXCELLENCE MEMBER AGENCIES FOR COST-SHARING REIMBURSEMENT GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 17-02 entitled, "A Resolution of the Board of Directors of the Orange County Sanitation District authorizing the General Manager to enter into an agreement with the California Alliance for Sewer System Excellence Member Agencies for cost-sharing reimbursement for approved agency-administered projects:' BACKGROUND In 2011, the Sacramento Area Sewer District (SASD) led the formation of the California Alliance for Sewer System Excellence (CASSE). CASSE envisioned a collaborative effort of interested agencies to reduce sanitary sewer overflows, protect surface waters, help further develop the workforce, and drive performance up and costs down through development and implementation of sewer collection system best practices. CASSE currently consists of approximately one third of the largest sewer agencies in Califomia, which all manage, operate, and maintain public sewers. The Orange County Sanitation District (Sanitation District) is a co-founder of CASSE and has been a leader in the organization since 2012. CASSE is not a legal entity and is not funded independently; instead, receives voluntary labor from employees of member agencies. CASSE's capacity to drive industry improvements is limited due to a lack of resources. In an effort to complete projects to the mutual benefit of all member agencies, CASSE's member agencies desire to engage consultant assistance to implement and share in the costs of efforts necessary for realizing the goals of CASSE. The cost-sharing reimbursement agreement provided will allow CASSE to engage consultants, contractors, and other resources to provide support for CASSE studies or other activities of mutual interest to the Sanitation District. SASD will lead the effort on behalf of CASSE and the Sanitation District will only be responsible for projects it approves. The Sanitation District may opt out of any CASSE project prior to the start of the project. The Sanitation District must enter into the cost sharing reimbursement program to participate in studies and share resulting information collected by CASSE. The shared Page 1 of 3 project cost is based on sewer size. The Sanitation District's share should not exceed $6,000 per project. The Sanitation District is not obligated to participate in this effort, but participation ensures the Sanitation District access to shared information and work product at a reduced rate. By adopting the resolution, the Board authorizes the General Manager to enter into the cost-sharing reimbursement agreement and determine which CASSE projects to approve. RELEVANT STANDARDS • Maintain collaborative and cooperative relationships with neighboring agencies • Ensure the public's money is wisely spent • Use all practical and effective means for recovering wastewater for reuse PROBLEM The Sanitation District may not participate in CASSE member agencies mutually beneficial projects without the Board adopting the proposed resolution. PROPOSED SOLUTION Adopt a resolution directing the General Manager to enter into a cost-sharing reimbursement agreement with the CASSE member agencies and to determine which projects to approve. TIMING CONCERNS Failure to adopt the resolution will delay Sanitation District participation in and benefit from CASSE projects. RAMIFICATIONS OF NOT TAKING ACTION Failure to enter into the agreement will preclude the Sanitation District from participating in CASSE projects. FINANCIAL CONSIDERATIONS Based on the size of the Sanitation District, the Sanitation District's share of the cost reimbursement per CASSE project should not exceed $6,000. The Sanitation District will not exceed the amounts established by Purchasing Ordinance No. OCSD47. Funds will be allocated from the FY16-17 Annual Budget (Section 6, page 76), Professional Services. Page 2 of 3 ATTACHMENT The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (mm w.ocsd.com) with the complete agenda package: • Resolution No. OCSD 17-02 • Cost-Sharing Reimbursement Agreement Page 3 of 3 RESOLUTION NO. OCSD 17-02 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ORANGE COUNTY SANITATION DISTRICT AUTHORIZING THE GENERAL MANAGER TO ENTER INTO AN AGREEMENT WITH THE CALIFORNIA ALLIANCE FOR SEWER SYSTEM EXCELLENCE MEMBER AGENCIES FOR COST-SHARING REIMBURSEMENT FOR APPROVED AGENCY-ADMINISTERED PROJECTS. The Board of Directors of the Orange County Sanitation District ("District") does hereby find: WHEREAS, in 2011, the Sacramento Area Sewer District (SASD) led the formation of the California Alliance for Sewer System Excellence (CASSE) with a vision to reduce sanitary sewer overflows, protect surface waters, help further develop the workforce, and to drive performance up and costs down through development and implementation of sewer collection system best practices; and WHEREAS, CASSE is large group consisting of approximately a third of the largest sewer agencies in California, that manage, operate, and maintain public sewers; and WHEREAS, the District is a co-founder of CASSE and has been a leader in the organization since 2012; and WHEREAS, CASSE's capacity to drive industry improvements is limited due to a lack of resources since it is not a legal entity and has no funding, and thus, its output is a product of volunteer work by employees of its member agencies; and WHEREAS, CASSE's member agencies desire to engage consultant assistance to implement and share in the costs of efforts necessary for realizing goals of CASSE; and WHEREAS, a cost-sharing reimbursement agreement will allow CASSE to engage consultants, contractors, and other resources for providing support for CASSE studies or other activities of mutual interest. SASD will lead the effort on behalf of CASSE and the District will only be responsible for projects that may benefit the District and may opt out of any CASSE project prior; and WHEREAS, as a CASSE member agency, the District must agree to participate in the cost sharing reimbursement program in which the shared project cost is based on sewer size, and the District has the opportunity to approve of or opt out of specific projects prior to committing funds which should not exceed $6,000 per project; and 1204038.1 OCSD t 7-02-1 WHEREAS, the District is not obligated to participate in this effort but participation ensures the District has access to shared information and work product at a reduced rate. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE, AND ORDER: Section 1: The above recitals are true and correct and are incorporated herein by reference. Section 2: That the General Manager, or his designee, be, and is hereby authorized and directed, to enter into an agreement with the California Alliance for Sewer System Excellence member agencies for cost-sharing reimbursement for agency-administered projects. Section 3: That the General Manager, or his designee, be, and is hereby authorized and directed to review the projects proposed by CASSE and approve of projects which may be beneficial to the Orange County Sanitation District and update the Board annually regarding the status of all CASSE projects. Section 4: The Clerk of the Board shall certify to the adoption of this Resolution. PASSED AND ADOPTED at a regular meeting of the Board of Directors held February 22, 2017. Gregory C. Sebourn Board Chairman Orange County Sanitation District ATTEST: Kelly A. Lore Clerk of the Board Orange County Sanitation District 1209038.1 OCSD t 7-n2-2 STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) I, Kelly A. Lore, Clerk of the Board of Directors of the Orange County Sanitation District, do hereby certify that the foregoing Resolution No. OCSD 17-02 was passed and adopted at a regular meeting of said Board on the 22ntl day of February 2017, 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 22ntl day of February 2017. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District 12NO38.1 OCSD 17-02-3 Contract No. 80000079 SACRAMENTO AREA SEWER DISTRICT COST-SHARING REIMBURSEMENT AGREEMENT WITH MEMBER AGENCIES OF THE CALIFORNIA ALLIANCE FOR SEWER SYSTEM EXCELLENCE THIS AGREEMENT is made and entered into on this day of 2017 by and between signatory members of the CALIFORNIA ALLIANCE FOR SEWER SYSTEM EXCELLENCE ("CASSE'), a California inter-municipal wastewater collection alliance, (collectively"AGENCIES"or`PARTIES," individually"AGENCY"or"PARTY"). RECITALS WHEREAS,CASSE was formed to supply expertise and facilitate collaboration to improve the efficiency of California wastewater collection utilities, as well as collaborate on projects of mutual interest, share information for the protection of water quality, and improve wastewater collection and conveyance system maintenance and operation; and WHEREAS,wastewater collection utilities desiring to join CASSE as member agencies must meet membership criteria to obtain membership privileges; and WHEREAS, the AGENCIES desire to implement a contract administration service as part of CASSE membership privileges for AGENCY collaboration on projects of mutual interest and benefit; and WHEREAS, the SACRAMENTO AREA SEWER DISTRICT, a county sanitation district pursuant to and operating under the authority of the County Sanitation District Act, commencing at Health and Safety Code section 4700("SASD")offers to lead, facilitate, and administer solicitation, acquisition, and financing efforts for consulting service projects that may benefit AGENCIES; and WHEREAS,AGENCIES agree that funding for projects of mutual interest and the associated contract administration service should be equitably shared by the AGENCIES choosing to participate on a project(`PARTICIPATING AGENCIES"); and WHEREAS,the AGENCIES desire to enter into this Agreement on the terns and conditions set forth herein. NOW,THEREFORE, in consideration of the mutual promises hereinafter set forth, the AGENCIES agree as follows: 1. PURPOSE SASD will provide administrative services on behalf of AGENCIES, and AGENCIES may participate in mutual interest projects as described in Exhibit A, which is attached hereto and incorporated herein. Page 1 of 7 Contract No. 80000079 2. TERM This Agreement shall be effective and commence as of the date first written above, and shall end on June 30, 2020. 3. NOTICE Any notice, demand,request,consent, or approval that any party hereto may or is required to give the other pursuant to this Agreement shall be in writing and shall be either personally delivered or sent by mail, addressed as follows: TO SASD: TO NON-SASD AGENCIES: Sacramento Area Sewer District SEE CONTACT INFORMATION 8521 Laguna Station Rd. FOUND ON SIGNATURE PAGES Elk Grove,CA 95758 Attn: Contracts Payment Desk Any party may change the address to which subsequent notice and/or other communications can be sent by giving written notice designating a change of address to the other party,which shall be effective upon receipt. 4. GOVERNING LAWS AND JURISDICTION This Agreement shall be deemed to have been executed and to be performed within the State of California and shall be construed and governed by the internal laws of the State of California. Any legal proceedings arising out of or relating to this Agreement shall be brought in Sacramento County, California. 5. OWNERSHIP OF WORK PRODUCT All technical data, evaluations,plans, specifications,reports, documents,or other work products obtained through projects managed pursuant to this Agreement shall be the exclusive property of SASD and each project's respective PARTICIPATING AGENCIES. AGENCIES not participating in a project will have no rights in the development of the project's work product or deliverables. PARTICIPATING AGENCIES may retain copies thereof for their files and internal use, and may share these copies with other AGENCIES who did not participate. Publication,by any AGENCY, for monetary gain of any information directly derived from work performed pursuant to this Agreement must first be mutually approved in writing by the project's PARTICIPATING AGENCIES. 6. INSURANCE Each AGENCY, at its sole cost and expense, shall carry insurance--or self-insure--its activities in connection with this Agreement, and obtain, keep in force,and maintain insurance or equivalent programs of self-insurance for general liability,workers compensation,property,professional liability, and business automobile liability adequate to cover its potential liabilities hereunder. Each party agrees to provide the other thirty (30)days advance written notice of any cancellation,termination, or lapse of any of the insurance or self-insurance coverages. Failure to maintain insurance as required in this Agreement is a material breach of contract and is grounds for termination of the Agreement. Page 2 of 7 Contract No. 80000079 7. INDEMNIFICATION To the fullest extent permitted by law, each of the AGENCIES shall indemnify,defend, and hold harmless each of the other AGENCIES, their respective governing boards, officers, directors, officials, employees, and authorized volunteers and agents from and against any and all claims, demands,actions, losses, liabilities,damages, and all expenses and costs incidental thereto (collectively"Claims'),including cost of defense, settlement, arbitration, and reasonable attorneys' fees resulting from injuries to or death of persons, including but not limited to employees of either AGENCY hereto, and damage to or destruction of property, or loss of use thereof, including but not limited to the property of any AGENCY hereto, arising out of,pertaining to, or resulting from the alleged or actual negligent acts or omissions of the respective governing boards, officers, directors, officials, employees,volunteers, agents, or contractors of the indemnifying AGENCY. It is the intention of the AGENCIES that the provisions of this indemnity be interpreted to impose on each AGENCY responsibility to the other for the negligent acts and omissions of their governing boards,officers,directors,officials, employees, volunteers, agents, or contractors. It is also the intention of the AGENCIES that where comparative fault is determined to have been contributory principles of comparative fault will be followed, and each AGENCY shall bear the proportionate cost of any Claims attributable to the fault of that AGENCY,its governing board, officers, directors, officials, employees,volunteers, agents, or contractors. This indemnity shall not be limited by the types and amounts of insurance or self- insurance maintained by the AGENCIES. Nothing in this Indemnity shall be construed to create any duty to, any standard of care with reference to, or any liability or obligation, contractual or otherwise,to any third party. The provisions of this Indemnity shall survive the expiration or termination of the Agreement. S. COST SHARING,COMPENSATION AND PAYMENT OF INVOICES SASD will submit project reimbursement invoices on a quarterly basis and at the end of the project to PARTICIPATING AGENCIES according to the weighted cost sharing formula as described in Exhibit A. PARTICIPATING AGENCIES payments to SASD must be made within 90 days of invoice date. Compensation by each AGENCY per project shall be limited to the Per Project Maximum Payment Amount as set forth in Exhibit B, or Exhibit B as modified. 9. PROJECT PROPOSALS SASD will circulate project proposals to the AGENCIES for review, discussion, and comment. AGENCIES interested in participating in a project will respond timely and comprehensively to project scope development. AGENCIES not interested in participating will indicate such at the earliest opportunity. Page 3 of 7 Contract No. 80000079 10.AMENDMENT AND WAIVER Except as provided herein, no alteration, amendment, variation, or waiver of the terms of this Agreement shall be valid unless made in writing and signed by all AGENCIES. Modifications to an AGENCY'S Per Project Maximum Payment Amount as set forth in Exhibit B shall be valid if made in writing and signed by the AGENCY requesting the change and SASD. If such an amendment is made,an amended Exhibit B shall be provided to the PARTIES. Addition of a CASSE member as a party to this Agreement shall be valid if made in writing and signed by SASD and the joining CASSE member. Waiver by any party of any default,breach or condition precedent shall not be construed as a waiver of any other default,breach or condition precedent, or any other right hereunder. 11. SUCCESSORS This Agreement shall bind the successors of the AGENCIES in the same manner as if they were expressly named. 12. INTERPRETATION This Agreement shall be deemed to have been prepared equally by all PARTIES, and the Agreement and its individual provisions shall not be construed or interpreted more favorably for any one party on the basis that another party prepared it. 13.DISPUTES In the event of any dispute arising out of or relating to this Agreement, the PARTIES shall attempt, in good faith,to promptly resolve the dispute mutually between themselves. Pending resolution of any such dispute,AGENCIES shall continue without delay to carry out all their responsibilities under this Agreement unless the Agreement is otherwise terminated in accordance with the Termination provisions herein. SASD shall not be required to make payments for any services that are the subject of a dispute resolution process until such dispute has been mutually resolved by the PARTIES. If the dispute cannot be resolved within 15 calendar days of initiating such negotiations or such other time period as may be mutually agreed to by the PARTIES in writing, any PARTY may pursue its available legal and equitable remedies,pursuant to the laws of the State of California. Nothing in this Agreement or provision shall constitute a waiver of any of the government claim filing requirements set forth in Title 1, Division 3.6, of the California Government Code or as otherwise set forth in local, state and federal law. 14. TERMINATION A. Any AGENCY may terminate their participation in this Agreement without cause upon fifteen(15) days written notice to the other PARTIES. Notice shall be deemed served on the date of mailing. If notice of termination for cause is given by SASD to any AGENCY and it is later determined that the AGENCY was not in default or the default was excusable,then the notice of termination shall be deemed to have been given without cause pursuant to this paragraph(A). B. Any AGENCY may terminate or amend their participation in this Agreement immediately upon giving written notice to the AGENCIES, 1) if advised that funds are not available from external sources for this Agreement or any portion thereof, including if distribution of such funds to SASD is suspended or delayed; Page 4 of 7 Contract No. 80000079 2)if funds for the services and/or programs provided pursuant to this Agreement we not appropriated by the State; 3)if funds in the AGENCY'S yearly proposed and/or final budget are not appropriated for this Agreement or any portion thereof; or 4)if funds that were previously appropriated for this Agreement are reduced, eliminated, and/or re-allocated by the AGENCY as a result of mid-year budget reductions. C. If this Agreement is terminated by SASD or any AGENCY under paragraph (A) or(B) above SASD shall not incur any expenses relating to the terminating AGENCY under this Agreement after notice of termination and shall cancel any outstanding expenses and obligations to a third party attributable to the terminating AGENCY that SASD can legally cancel. D. If this Agreement is terminated under paragraphs(A) or(B), above, SASD shall be reimbursed for authorized and approved services performed prior to the termination date in accordance with the provisions of the Cost Sharing, Compensation and Payment of Invoices provision of this Agreement. 15. SEVERABILITY If any term or condition of this Agreement or the application thereof to any person(s) or circumstance is held invalid or unenforceable, such invalidity or unenforceability shall not affect other terms, conditions, or applications which can be given effect without the invalid term, condition, or application; to this end the terms and conditions of this Agreement are declared severable. 16.FORCE MAJEURE No AGENCY shall be liable or responsible for delays or failures in performance resulting from events beyond the reasonable control of such party and without fault or negligence of such PARTY. Such events shall include but not be Ivnited to acts of God, strikes, lockouts,riots,acts of war, epidemics, acts of government(excepting acts of the PARTIES to this Agreement), fire,power failures, nuclear accidents, earthquakes, unusually severe weather,acts of terrorism, or other disasters,whether or not similar to the foregoing, and acts or omissions or failure to cooperate of any PARTY or third parties (except as otherwise specifically provided herein). 17. SURVIVAL OF TERMS All services performed and deliverables provided pursuant to this Agreement are subject to all of the terms, conditions,price discounts and rates set forth herein, notwithstanding the expiration of the initial term of this Agreement or any extension thereof. Further,the terms, conditions and warranties contained in this Agreement that by their sense and context are intended to survive the completion of the performance, cancellation or termination of this Agreement shall so survive. 18.DUPLICATE COUNTERPARTS This Agreement may be executed in multiple counterparts. The Agreement shall be deemed executed when it has been signed by all AGENCIES. Any CASSE members that desire to opt in as participants to this AGREEMENT may do so in the future by: Page 5 of 7 Contract No. 80000079 • Obtaining concurrence of SASD representative • Providing SASD a resolution of the AGENCY'S governing body authorizing inclusion to this Agreement • Signature to this AGREEMENT by an authorized representative of the AGENCY 19.AUTHORITY TO EXECUTE Each person executing this Agreement represents and warrants that he or she is duly authorized and has legal authority to execute and deliver this Agreement for or on behalf of the PARTIES to this Agreement. Each PARTY represents and warrants to the other that the execution and delivery of the Agreement and the performance of such PARTY'S obligations hereunder have been duly authorized. (SIGNATURE PAGE FOLLOWS) Page 6 of 7 Contract No. 80000079 IN WITNESS WHEREOF,the PARTIES hereto have caused this Agreement to be duly executed as of the day and year first written above. SACRAMENTO AREA SEWER AGENCY,a California municipal DISTRICT, a county sanitation district wastewater collection agency pursuant to and operating under the authority of the County Sanitation District Act, commencing at Health and Safety Code section 4700 By: By: Prabhakar Somavarapu,District Engineer James D.Herberg,General Manager Orange County Sanitation District Date: Attest: Kelly A. Lore,Clerk of the Board Orange County Sanitation District Agreement Approved by the Board of Directors with Authority Delegated to the District Engineer to execute the Agreement on behalf of Date: SASD. Agenda Date: Item Number: Resolution No.: By: Date: Sarah Britton District Counsel Prepared by: Katherine E.Marine, Senior Contract Services Officer Internal Services Department Sanitation Districts Agency Phone: (916) 876-6074 Page 7 of 7 Contract No. 80000079 EXHIBIT A to COST-SHARING REIMBURSEMENT AGREEMENT WITH MEMBER AGENCIES OF THE CALIFORNIA ALLIANCE FOR SEWER SYSTEM EXCELLENCE PROJECT ADMINISTRATION AND COST-SHARING APPROACH A. Initiation 1. Any AGENCY or group of AGENCIES can propose a project. 2. AGENCIES prepare and submit a description of the proposed project and estimated costs to SASD. 3. SASD reviews and circulates the project proposal to all AGENCIES for comment. 4. Once comments to the project proposal are received and reviewed, SASD will assist the proposing AGENCY or group of AGENCIES with finalizing the project proposal and cost estimate. B. Approval and Funding 1. CASSE chairperson(CHAIR)will solicit AGENCIES to participate in the proposed project's cost-sharing by sending out the final project proposal and a letter of intent. 2. All AGENCIES interested in being PARTICIPATING AGENCIES will have fifteen(15)business days to sign and return the Letter of Intent for project participation. The letter may only be signed by a representative of AGENCY authorized to do so. 3. CHAIR will issue a final Cost Share Summary Sheet to each AGENCY returning a Letter of Intent indicating each interested AGENCY'S percentage of estimated costs. Funding percentages are based on methodology described in Exhibit C. 4. Each interested AGENCY has fifteen (15)business days to sign the final Cost Share Summary Sheet(`Sheet")and return such to SASD. The Sheet may only be signed by a representative of AGENCY authorized to do so for the estimated cost share amount. SASD may request documents supporting the AGENCY representative's authority to commit such funds. The signed sheet commits each participating AGENCY to fund the indicated percentage of the total project costs, including administrative fees paid to SASD of three percent(3%)of the final project costs. Those AGENCIES executing the Cost Share Summary Sheet are (mown as PARTICIPATING AGENCIES. 5. In the event an Agency terminates the agreement due to funding constraints as specified by Article 14—Termination, Section A or B,the cost-sharing formula will be applied for re-distribution of un-invoiced costs to remaining Participating Agencies on any given project impacted by the termination. 6. The project next moves to the Procurement Phase. EXHIBIT A Page 1 of 3 Contract No. 80000079 C. Procurement 1. PARTICIPATING AGENCIES assign a team to develop Request for Proposals (RFP). when using an existing contract the team negotiates the scope of work and fee with the consultant, and then the project moves to the Management Phase. 2. SASD releases the RFP once agreed upon by PARTICIPATING AGENCIES. Responses must be in electronic format so they can be reviewed remotely. The PARTICIPATING AGENCY team reviews proposals and selects a winning consultant. 3. PARTICIPATING AGENCIES negotiate a proposed contract with the consultant. 4. SASD secures SASD Board of Directors approval of consultant agreement. 5. The Project next moves to the Management Phase. D. Management 1. As part of its contract administration duties, SASD will supply the Project Manager; other tasks may be assigned by other PARTICIPATING AGENCIES. 2. Project decisions will be made by the PARTICIPATING AGENCIES. SASD will then provide written direction to the Consultant. 3. Changes in scope of work, schedule,and cost will be agreed upon by the PARTICIPATING AGENCIES. Decision-making will be done by consensus when possible. If the PARTICIPATING AGENCIES are unable to come to consensus the decision will be made by majority vote. 4. SASD will pay Consultant invoices as required by the Consultant agreement. 5. SASD will prepare quarterly billing and invoice each PARTICIPATING AGENCY their fair share of project costs to date plus the administrative fee. 6. Upon project completion and receipt of final invoice from Consultant, SASD will prepare final billing and invoice each PARTICIPATING AGENCY any remaining fair share of project costs and the administrative fee. E. Cost-sharing Methodology 1. PARTICIPATING AGENCIES are assigned points as follows: Size Micro Small Medium Large Mega Miles of Pipe 0-19 20-199 200-999 1,000-2,999 >3,000 (including laterals) Cost share 1 10 60 200 500 points 2. The sum of all PARTICIPATING AGENCIES' points is totaled. Each PARTICIPATING AGENCY'S project cost share percentage is calculated by dividing that PARTICIPATING AGENCY'S points by the total number of points for all PARTICPATING AGENCIES. EXHIBIT A Page 2 of 3 Contract No. 80000079 3. The same methodology is used to calculate each PARTICIPATING AGENCY'S share of the administrative fee. Please refer to Exhibit C for an example of the Project Cost Sharing Worksheet. EXHIBIT A Page 3 of 3 Contract No. 80000079 EXHIBIT B to COST-SHARING REIMBURSEMENT AGREEMENT WITH MEMBER AGENCIES OF THE CALIFORNIA ALLIANCE FOR SEWER SYSTEM EXCELLENCE PER PROJECT MAXIMUM PAYMENT AMOUNT Except as otherwise provided herein, each AGENCY, utilizing the size category identified by calculating its miles of AGENCY pipe in Exhibit A , is authorized to sign and return a Letter of Intent and a Cost Share Summary Sheet, or amendments thereto, as a PARTICIPATING AGENCY for a project in an amount not to exceed: Size Per Project Maximum Payment Amount Micro $1,000 Small $1,000 Medium $6,000 Large $20,000 Mega $50,060 EXHIBIT B Page 1 of l EXHIBOCto COST SHARING REIMBURSEMENT AGREEMENT WITH MEMBER AGENCIES OF THE CALIFORNIA ALLIANCE FOR SEWER SYSTEM EXCELLENCE EXAMPLE PROJECT COST SHARING SHEET PrajeRName: Example Adminfee% 3% Estimated Project Cost: $95,0110.W Admin fee Size Enro Wm2 % Cost Share CASSE Agencies Factor 1=yes/0=no Paints Share Project Adman Total Mega(>=3,000 tulles) 500 Agency1 500 1 500 31.43% $ 29,855 $ 896 $ 30,751 Agenry 2 Soo 0 0 0.00% $ $ $ Agency Soo 1 500 33A3% $ 29,855 $ 896 $ 30,751 Large(1,000-2,999.11.) 100 Agency 200 0 0 0.00% $ $ $ Agency 5 200 0 0 0.00% $ $ $ Agency 6 200 0 0 0.00% $ $ $ Agency) 200 1 200 12.57% $ 11,942 $ 358 $ 12,300 Agency 8 200 0 0 0.00% $ $ $ Agenry9 200 0 0 0.00% $ $ $ Alen,10 200 1 200 12.52% $ 11,942 $ 358 $ 12,300 Medium(11I0-999 miles) W Agen,11 60 0 0 0.00% $ $ $ Agenry 12 60 1 60 3.77% $ 3,583 $ 107 $ 3,690 Agenry 13 60 0 0 OU11% $ $ $ Agency 14 60 0 0 0.00% $ $ $ Agency 15 60 0 0 0.00% $ $ $ Agenry 16 60 1 60 3.77% $ 3,583 $ 107 $ 3,690 Agenry 12 60 0 0 OU11% $ $ $ Agency 18 60 0 0 0.00% $ $ $ Agency 19 60 0 0 0.00% $ $ $ Agenry 20 60 1 60 3.77% $ 3,583 $ 107 $ 3,690 Agency 21 60 0 0 0.00% $ $ $ Agency 22 60 0 0 0.00% $ $ $ Small(20.199 miles) 10 Agency 23 10 0 0 0.00% $ $ $ Agenry 24 10 1 10 0.63% $ 597 $ 18 $ 615 Micro(0,19 miles) 1 Agency 25 1 1 1 006% $ 60 $ 2 $ 62 EXHIBIT C Page 1 of 1 OPERATIONS COMMITTEE Meetlng Date TOBtl.of Dir. oz/oI/" oz/zz/v AGENDA REPORT ItemNumber Item Number a B Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: SLUDGE DEWATERING AND ODOR CONTROL AT PLANT NO. 1, PROJECT NO. P1-101 GENERAL MANAGER'S RECOMMENDATION Approve a contingency increase of $714,000 (10%) to the Professional Consultant Services Agreement with HDR Engineering, Inc. to provide construction support services for Sludge Dewatering and Odor Control at Plant No. 1, Project No. 131-101, for a total contingency amount of$1,285,200 (18%). BACKGROUND Sludge Dewatering and Odor Control at Plant No. 1, Project No. P1-101, replaces existing solids and dewatering odor control systems and installs sludge thickening systems at the Orange County Sanitation District (Sanitation District) Plant No. 1. The objectives of the project include the following: 1. Additional solids handling capacity to support expansion of the Ground Water Replenishment System (GWRS). 2. Replacement of aging sludge dewatering facilities built in the late 1970s and early 1980s. 3. Reduce annual biosolids management costs by $3.6 milion by reducing biosolids water content. 4. Improve sludge thickening to avoid the need to construct new digesters. HDR Engineering, Inc. was awarded a Professional Consultant Services Agreement for engineering support services during construction, including reviewing contractor submittals, responding to requests for information, preparing design modifications, and providing other services needed of the original design firm. This support is essential for successful completion of the project. At the beginning of the project, based on new equipment cost information, a decision was made to change the type of equipment used for biosolids conveyance that substantially improved reliability and reduced maintenance requirements. This change, however, consumed all but $35,595 of the original $571,200 Board-authorized consultant contingency. Page 1 of 3 When awarded, construction was expected to last four years. Due to changes during construction, and a longer than anticipated commissioning period, construction is now anticipated to last almost six years. This longer duration substantially increases the consultant's level of effort for construction-support services. The complexity of the project has also resulted in significantly more requests for information and design changes than originally anticipated. This project is installing the most complex electromechanical system at the Sanitation District and includes sludge conveyance, centrifuge operation, biosolids conveyance, and truck loading upgrades. RELEVANT STANDARDS • Sound engineering and accounting practices, complying with local, state, and federal laws PROBLEM There is insufficient Consultant contract contingency to fund the anticipated engineering support services during construction. PROPOSED SOLUTION Increase the Consultant contract contingency. TIMING CONCERNS Construction is still ongoing at the new thickening and dewatering facility, and commissioning activities have started. To complete all remaining work and address any unknown conditions that arise, the contingency needs to be increased such that design clarifications can be addressed timely and the work can progress as scheduled without delay to the project. RAMIFICATIONS OF NOT TAKING ACTION The current contingency is insufficient to cover the projected costs for Consultant support needed to complete the project. Without the additional funds, construction and commissioning activities would be severely hampered and project delays would be incurred. PRIOR COMMITTEE/BOARD ACTIONS November 2011 -Authorized the General Manager to negotiate a Professional Consultant Services Agreement with HDR Engineering, Inc. for engineering support services during construction of Project No. P1-101, Sludge Dewatering and Odor Control at Plant No. 1. April 2012 — Approved a Professional Consultant Services Agreement with HDR Engineering, Inc. to provide bid and construction support services for Sludge Dewatering and Odor Control at Plant No. 1, Project No. P1-101, for an amount not to exceed $7,140,000; and approved a contingency of$571,200 (8%). Page 2 of 3 ADDITIONAL INFORMATION N/A CEQA Construction of this project is within the scope of the Subsequent Environmental Impact Report for the Secondary Treatment and Plan Improvement Project, dated March 2005. The Subsequent Environmental Impact Report for the Secondary Treatment and Plan Improvement Project, supplementing the Sanitation District's Strategic Plan Program Environmental Impact Report (PEIR), was certified in October 1999. Pursuant to CEQA Guidelines section 15168(c)(4), the Sanitation District has used a written checklist to document its evaluation of the project and has determined that the project is still within the scope of program EIR. In addition, the Project was determined to be eligible fora categorical exclusion underthe National Environmental Pollution Act (NEPA) in June 2006. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (FY2016-17 and 2017-18), Section 8, Page 50. Project contingency funds will be used for this additional contingency. Date of Aooroval Contract Amount Contlnaencv 04/25/12 $7,140,000 $ 571,200 ( 8%) 02/22/17 714 000000 (10%) $1,285,200 (18%) ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: N/A AL:JM:dm:gc Page 3 of 3 OPERATIONS COMMITTEE Meeting Date To Bd.of oil 02/01/17 02/22/17 AGENDA REPORT Item Number Item Number 5 9 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: SAFETY IMPROVEMENT PROGRAM, PROJECT NO. J-126 GENERAL MANAGER'S RECOMMENDATION A. Approve a budget increase of $1,500,000 for Safety Improvements Program, Project No. J-126, for a total budget amount of$11,202,000; and B. Approve Amendment No. 1 to the Professional Design Services Agreement with Arcadis, US, Inc., for Safety Improvement Program, Project No. J-126, for an additional amount of$1,500,000 for a total budget amount of$3,040,000. BACKGROUND The Orange County Sanitation District (Sanitation District) owns and operates facilities that were designed and constructed from the 1950s to present. In July 2014, the Facility Wide Safety Assessment, Project No. SP-145-1, reviewed safety issues at the Sanitation District Plant Nos. 1 and 2, and pump stations. The study identified approximately 2,000 facility issues impacting worker safety and compliance with Cal/OSHA regulations including electrical, fall protection, machine guarding, hazardous area classifications, skylights, and walkway hazards. Each item was assigned a high, medium, or low priority rating. Pending resolution of the safety items, the Sanitation District took interim measures to minimize life-safety risks. There was approximately an even distribution between identified issues that would be addressed using Sanitation District resources, and those that would be addressed through the Capital Improvements Program (CIP), depending on their nature and complexity. Items on the CIP list that could not be timely assigned to existing projects have been assigned to Safety Improvement Program, Project No. J-126. Construction Costs The current J-126 budget was based on construction cost estimates developed in the 2014 SP-145-1 study, which totaled $5.4 million for the items assigned to this project. Although more design development is required, there is a reasonable possibility that the construction cost could double. The reasons for the potential increase include: • The unit prices developed for the study significantly underestimated the actual installed costs. Page 1 of 4 • Additional deficiencies were identified after the 2014 study and could not be addressed using Sanitation District staff. A total of 40 deficiencies have been added to the program since the design agreement was awarded. • The project may need to include correction of a slippery surface issue that has arisen with roofing on the first four of twelve digesters domes that were installed under the Digester Rehabilitation at Plant No. 1, Project No. P1-100, in 2013 to 2014. The roofing material was found to be a slip hazard as the embedded grit material was lost over time. The roofing was not replaced under the P1-100 project as a warranty issue because the material satisfied the specification requirements, and the issue could not have been foreseen. The construction cost is expected to be between $500,000 and $750,000. As cost estimates become available, staff will return to the Board to request necessary budget revisions for increased construction costs. In addition, all construction contracts greater than $100,000 will be submitted to the Board for award. Consultant Costs To resolve the deficiencies as quickly as possible, Safety Improvement Program, Project No. J-126, is being executed through multiple construction packages which can be completed in a shorter time than using a single construction contract. Development of multiple construction packages also allows higher priority safety items to be completed more quickly than lower priority items. At the time the design services agreement was awarded, the number of construction packages had not yet been determined. That, and the large number of unique deficiencies located throughout the Sanitation District facilities, made it impossible to precisely determine the level of effort required for detailed design. Therefore, the Consultant's Scope of Work was divided into two sections; one for program services with a defined scope and the other for design services with an undefined scope. For design services, a set number of hours was used to establish an allowance for the design budget. The plan was for staff to authorize allocations from the pool of hours as construction packages are identified and the specific scopes and budgets are negotiated. Staff established the set number of hours for design based on the estimated construction cost of $5.4 million, an assumption that design would cost approximately 20% of the construction cost, and an assumed average hourly rate. As discussed above under Construction Costs, the construction cost could double, to approximately $10 million. Upon closer examination,the ratio of consultant costs to construction costs may be closer to 25%, due to the nature of the work. This includes an allowance for consultant support during construction and closeout, which was not included in the 20% factor. The basis of the original and proposed consultant fees is summarized in the table below. It is important to remember the Consultant was selected on their qualification to do the work and they provide services on an as-needed basis at a pre-negotiated rate. Proper engineered designs will correct the safety deficiencies and limit future change order risks. Page 2 of 4 Original Basis Current Estimates Construction Cost Estimate $5,400,000 $10,000,000 Consultants Costs Program Services $ 576,162 (11%) $ 576,162 (6%) Design Services $ 963,838 (18%) $ 2,463,838 (25% Total Consultants Costs $1,540,000 (29%) $ 3,040,000 (31%) Current Project Status The implementation plan prepared under the Program Services scope allocated the deficiencies into 18 construction packages. Eight of the packages address high priority issues, six address medium priority issues, and the remainder low priority issues. To date, staff has completed negotiations for consultant budgets for all high priority packages. The design of all high priority packages, along with a field investigation effort for the medium priority items, consumed approximately 87% of the $963,838 budgeted for Design Services. RELEVANT STANDARDS • Provide a safe and collegial workplace PROBLEM The project budget and consultant budget are not sufficient to complete the project. PROPOSED SOLUTION Increase the project budget by $1,500,000 and approve Amendment No. 1 to the Professional Design Services Agreement with Arcadis, US, Inc. to increase the contract amount by $1,500,000. TIMING CONCERNS Without additional consultant funds, staff will not be able to authorize design for additional construction packages, which will delay resolution of safety deficiencies. RAMIFICATIONS OF NOT TAKING ACTION Without additional funding for the existing Professional Design Services Agreement, another consulting firm would have to be selected and awarded an agreement to complete the remaining design work. This would delay completion of the work by at least six months, probably resulting in higher design fees and staff effort, and prolonging Sanitation District exposure to the identified safety risks. Page 3 of 4 PRIOR COMMITTEE/BOARD ACTIONS July 2016 —Awarded a Professional Design Services Agreement to Arcadis, US, Inc. for an amount not to exceed $1,540,000 and approved a contingency of$154,000 (10%). ADDITIONAL INFORMATION N/A CEQA A CEQA Notice of Exemption for this project was filed on August 14, 2015, and 180-day statute of limitations has passed from the approval of the Professional Design Services Agreement. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (Line item: Section 8, Page 68), but the budget is insufficient for the recommended action. The funds will be allocated to the project from the Replacement, Rehabilitation, and Refurbishment line item in the cash flow projections, FY2016-17 and 2017-18, Section 4, Page 16. Date of ADDroval Contract Amount Contingency 07/27/16 $1,540,000 $154,000 02/22/17 $1,500,000 TOTAL $3,040,000 $154,000 ATTACHMENT The following attachment(s) maybe viewed on-line at the OCSD website (Mm w.ocsd.com) with the complete agenda package: • PDSA Amendment No. 1 • PowerPoint Presentation from February 1, 2017 Operations Committee Meeting JM:TG:dm:gc Page 4 of 4 AMENDMENT NO. 1 TO AGREEMENT THIS AMENDMENT NO. 1 TO AGREEMENT, is made and entered into to be effective the 22nd day of February, 2017 by and between the ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "SANITATION DISTRICT', and ARCADIS U.S., Inc., for purposes of this Agreement hereinafter referred to as "CONSULTANT". WITNESSETH: WHEREAS, the SANITATION DISTRICT and CONSULTANT have previously executed an Agreement dated July 27, 2016, for professional design services for Safety Improvements Program, Project No. J-126; and, WHEREAS, the SANITATION DISTRICT has determined that additional professional design services are required; and, WHEREAS, CONSULTANT is qualified to provide the necessary services in connection with these additional requirements based on its demonstrated competence and has agreed to provide the necessary engineering services, and has been selected in accordance with the SANITATION DISTRICT selection policy regarding professional design services; and, WHEREAS, the SANITATION DISTRICT acting through its Director of Engineering, has negotiated with CONSULTANT, and has certified the final negotiated fee for said services as reasonable, and, WHEREAS, the Board of Directors has accepted the recommendation of the Operations Committee, pursuant to the current Purchasing Ordinance, has approved this Amendment No. 1 between the SANITATION DISTRICT and CONSULTANT. Amendment No. 1 -1- Project No. J426 Re,,,d 12101110 NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this Amendment No. 1, it is mutually agreed as follows: 1. CONSULTANT agrees to provide additional services necessary to provide design, construction support and closeout services for the Safety Improvements Program, Project No. J-126 as outlined in Exhibit"A"— Scope of Work, attached hereto and by this reference made a part of this Amendment No. 1 to Agreement. 2. Article 2 of that certain Agreement dated July 27, 2016, between the SANITATION DISTRICT and CONSULTANT is hereby amended to increase the total compensation by$1,500,000 from $1.540,000 to an amount not to exceed $3,040,000, all in accordance with the same terms and conditions as otherwise specified in Article 3 and the other provisions of said Agreement. 3. The additional compensation authorized hereby and sums paid by the SANITATION DISTRICT to CONSULTANT pursuant hereto shall be based upon and allocated as in Exhibit"C" — Fee Proposal. 4. The SANITATION DISTRICT agrees to pay CONSULTANT on a monthly basis pursuant to invoices submitted to the SANITATION DISTRICT from CONSULTANT and as approved by the SANITATION DISTRICT's Director of Engineering. 5. This modifying Amendment is supplemental to the Agreement dated July 27, 2016, and is by reference made a part of said Agreement. All of the terms, conditions, and provisions thereof, unless specifically modified herein, shall continue in full force and effect. 6. In the event of any conflict or inconsistency between the provisions of this Amendment and any of the provisions of the original Agreement, the provisions of this Amendment No. 1 shall in all respects govern and control. Amendment No. 1 -2- Project No. J-126 RevW 12101110 IN WITNESS WHEREOF, this Amendment No. 1 to Agreement has been executed in the name of the SANITATION DISTRICT by its officers thereunto duly authorized and executed by CONSULTANT as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT By Gregory C. Sebourn Date Board Chairman By Kelly A. Lore Date Clerk of the Board ARCADIS U.S., Inc. By 12 Ass4oa nk.A uc PrestAenh Date By Date ORANGE COUNTY SANITATION DISTRICT By Marc Dubois Date Contracts, Purchasing, and Materials Management Manager TG:dm Attachments: Exhibit "A"- Scope of Work Exhibit'B"- Cost Matrix Exhibit "C"- Fee Proposal Amendment No. 1 -3- Project No. J-126 Revised 12101110 Safety Improvements Program, Project No. J-126 PDSA Amendment No. 1 Exhibit "A" — Scope of Work 1. Provide an additional $1,500,000 of professional services under Task 2. SAFETY IMPROVEMENTS PROGRAM, PROJECT J-126 PDSA AMENDMENT NO.1 EXHIBIT"B"-COST MATRIX Lahor h—m 15 9 - m gyo Bond!anetl Lan-& 111owahb in.. ryax n.. P C Ea YC e vS Ta...... Raw LabW FXnpa ceW BUMan.a L.b., 0..,naaa ...m.aa '.1 Taal BUW cwb mlal Fs Avan9a Pooal Sala Ia.oo asM do In la on la oO 7900 Wm 41.00 3z oo 3s ao ss no, se..A M% Folly Fol Awry Raft(intlptl.$p,oal call OH,and PoA Amendment No 635 185 1. 2,. 3,12) 295 ],85 I16, 289,fi88 fi83,]13 a13,W 1,3.. 95.ID9 $45,132 $1'. Safety Improvements Program, Project No. J-126 PDSA Amendment No. 1 Exhibit "C" — Fee Proposal Purchase Order: 105813-OB Project No.9-126 Safety Improvement at Plant Nos.1 and 2 Professional Design Services Agreement Fee Allocation Table current Cembaet Pru00sed Revised Conned Amount Chan Amount A..dk Furthered Labor-Rawlabm♦Fringe @65.13% $ 677,925 $ 683,713 $ 1,361,638 Ooerhead seHAt% $ 667,309 $ 673,047 S 1,300396 Flvea Pratt @7,01% $ 94,304 $ 95,109 S 189413 Oneat C o s6.NFL 51000 48131 99131 S ubbtal= $ 1490578 $ 11500,000 $ 3990576 Mnor S ubc ons ulto nls l0 rider$look L abor F eel T&M Atiocia er, $ 49422 $ $ 4%422 S titi= $ 49422 $ $ 49,Q2 T otal Not to E it eed $ 1,540,000 $ 11500,000 $ 3040000 4 All Safety Improvement Program, Project No. J- 126 �i Operations Cornrnittee 91 -r h ? � �. Background • Facility Wide Safety Assessment, Project No. SP- 145- 1 completed in December 2014. Comprehensive safety assessment of all OCSD facilities to : • Enhance worker safety • Ensure compliance with safety codes • Provide reliable and efficient facilities for O&M • Identified — 1700 deficiencies, ranked by priority • Corrective measures developed based on ANSI risk assessment methodology Plant 1 - Cen Gen Roof Access Fall Hazard Ladder exposed to stairwell. Ladder r {�{ cage needs to be extended down to L guardrail t 1 Bay Bridge Pump Station Equipment Access r 1 Board to stand on while E` accessing pipes at wall. Ladder requires side Proper access and rail extensions platform are required �r' Slater Avenue Pump Station Fall Protection Elevated areas around pumps are working surfaces — Guardrails are required Plant 1 - Cen Gen Building Hot Surfaces i Exposed hot piping requires insulation J II Plant 2 = Digesters Machine Guards Flu Tr Rotating shafts need to be enclosed d 1 yd . 15t" Street Pump Station Fall Protection a� 1 Guardrail required around hatch opening Plant 2 - Scott Tunnel Fall Protection J. Ar . r Unprotected edge of f elevated surface Plant 1 — Primary • • Fall Protection Missing guardrail at elevated surface. Guardrail needs A►_! "� • o be fit ��. Plant 1 = Power Building Fall Protection Fall protection required at edge of roof Fall protection required at skylights Corrective Strategy • Staff developed a comprehensive strategy to correct SP-145- 1 deficiencies • Assignment of deficiencies for correction : • Small and simple corrections: In-house (700 items) • Larger, more complex items: Capital Improvement Program (940 items) • Active CIP Projects (240) • J-126 Safety Improvement Program (700 items) Unique Program Characteristics • Large number of distinct items • Design solutions unknown until after field investigations • Work at many locations ( 2 Plants, 15 Pump Stations) • Numerous hazard categories -- - • Difficult to estimate : • Construction cost • Design effort l _ _� T e J LI Ni - ° 4 . Plant 1 -Package'F' Considerations for Construction Packaging • Speed • Lower priority should not delay higher priority • Lower complexity can be designed faster than high complexity • Related Work • Similar items may be grouped together • Smaller contracts = higher non-construction costs • "Piece-mealing" will not be used to circumvent procurement requirements Project J-126 Delivery Title Subject Location A Phase 1 Field Investigation 1 Package J-126A Hot Surfaces Insulation and Machine Guarding P1, P2 2 Package J-126B Emergency Lights, Exit Signs,Electrical Maintenance PS 3 Package J-126C HVAC Improvements(NFPA 820) P1 4 4 Package J-126D Hatch Modifications P1 a` o, 5 Package J-126E Roof Fall Protection and Skylights P1, P2 x 6 Package J-126F Ladder and Walkway Hazards Pi, P2 7 Package J-126G Ladder Modifications PS 8 Package J-126H Various Bay Bridge PS,Slater PS B Phase 2 Field Investigation 9 Package J-1261 Exit Signs and Electrical Disconnects P1, P2 10 Package J-126J Stairs, Hatches,Walkway Hazards P1, P2,PS `o a` 11 Package J-126K Ladders,Guardrails, Roof Fall Protection Pi, P2 E 12 Package J-126L Various PS a � 13 Package J-126M Machine Guarding and Walkway Hazards P7, P2 14 Package J-126N Electrical Upgrades(NFPA820) P1, P2 C Phase 3 Field Investigation 15 Package J-1260 Energency Lights and Gas Detection P1, P2 16 Package J-126P iLadders and Hatches Sari,College Ave, Lido and Main Street PS a 0 17 Package J-1260 Roof Fall Protection Pi, P2 J 18 Package J-12GR Machine Guarding Pl, P2 Consultant Selection • RFP Issued (April 2016) • Two Proposals Received (Arcadis, Hazen & Sawyer) • Arcadis selected as best qualified • PDSA Awarded to Arcadis, US, Inc (July 2016) Consultant Scope and Budget • Task 1 Program Services • Project Management • Implementation Plan (Construction Packaging) • Chartering Construction Packages • Cost Estimating and Scheduling • Safety Review • Workshops and Meetings Consultant Scope and Budget • Task 2 Construction Package Execution • Original scope of work based on deficiency types with allocations • Multiple Construction Packages • Large number of unique deficiencies • Difficult to determine level of effort • Design at 20% of original construction estimate - $1,000,000 • Individual package fees negotiated after detailed field investigations define solutions Construction Costs • SP-145-1 Construction Cost Estimate = $5.4 million • Reasonable possibility that the construction cost could double • SP-145-1 unit prices significantly underestimated 2017-2018 installed costs • 40 additional deficiencies have been added to the program since the design agreement was awarded • Re-roofing of four P1 digesters to correct slippery surface conditions (131-100) ($500,000 - $750,000) Consultant Scope and Budget • Need for Additional Task 2 Funding • Increase in Construction Cost • Original fee estimate did not include construction phase services Original Basis Current Estimates Increase Consultants Costs Program Services (Task 1) $ 576,162 (11%) $ 576,162 (6%) $0 Engineering Services (Task 2) $ 963,838 (18%) $ 2,463,838 (25%) $1,500,000 Total Consultants Costs $1,540,000 (29%) $ 3,040,000 (31%) $1,500,000 Construction Cost Estimate $5,400,000 $10,000,000 $4,600,000 Project J-126 Delivery Status Title Subject Status A Phase 1 Field Investigation Negotiated 1 Package J-126A Hot Surfaces Insulation and Machine Guarding Negotiated 2 Package J-126B Energency Lights, Exit Signs, Electrical Maintenance Negotiated 3 Package J-126C HVAC Improvements(NFPA 820) Pending Additional Funding e 4 Package J-126D Hatch Modifications Pending Additional Funding a` rn 5 Package J-126E Roof Fall Protection and Skylights Negotiated x 6 Package J-126F Ladder and Walkway Hazards Negotiated 7 Package J-126G Ladder Modifications Negotiated 8 Package J-126H Various Negotiated B Phase 2 Field Investigation Negotiated 9 Package J-126I Exit Signs and Electrical Disconnects Pending Additional Funding 2 10 Package J-126J Stairs, Hatches,Walkway Hazards Pending Additional Funding 0 Q- 11 Package J-126K Ladders,Guardrails,Roof Fall Protection Pending Additional Funding E 12 Package J-126L Various Pending Additional Funding 13 Package J-126M Machine Guarding and Walkway Hazards Pending Additional Funding 14 Package J-126N Electrical Upgrades(NFPA 820) Pending Additional Funding C Phase 3 Field Investigation Pending Additional Funding 15 Package J-1260 Emergency Lights and Gas Detection Pending Additional Funding d 18 Package J-126P Latltlers and Hatches Pending Additional Funding a c 17 Package J-1260 Roof Fall Protection Pending Additional Funding 18 Package J-126R Machine Guarding Pending Additional Funding Recommendations • Approve a budget increase of $ 1,500,000 for Safety Improvements Program, Project No. J- 126 • Approve Amendment No. 1 to the Professional Design Services Agreement with Arcadis, US, Inc., for Safety Improvement Program, Project No. J- 126, for an additional amount of $ 1,500,000 OPERATIONS COMMITTEE Meeting Dale T%%2011Dir. oz/01117 z/zz/v AGENDA REPORT Item Item Number 6 10 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: INTERIM FOOD WASTE RECEIVING FACILITY, PROJECT NO. P2-124 GENERAL MANAGER'S RECOMMENDATION Establish a project for Interim Food Waste Receiving Facility, Project No. P2-124, with a budget of$5,400,000. BACKGROUND The Orange County Sanitation District (Sanitation District) utilizes anaerobic digestion to stabilize and reduce biosolids generated from treating wastewater. The process also produces a methane-rich digestergas which is burned in engine generators at both plants to supply approximately 60% of the plants' power requirements. Separately, the State of California is implementing regulations to divert organic material, typically food waste, from landfills, with the intention of extending the lives of landfills and reducing greenhouse gases generated as the organic material decays in the landfill. As a result, waste haulers, such as Waste Management Inc., Republic Services, and CR&R Incorporated, are seeking options for disposal or reuse of food waste. One strategy the haulers are pursuing is processing the food waste into an organic-rich liquid to be trucked to digestion facilities, such as the Sanitation District's anaerobic digesters. The haulers would pay a tipping fee to discharge the waste, and the Sanitation District would also generate more digester gas and, therefore, more electricity. Waste Management is currently paying tipping fees to the Los Angeles County Sanitation District to receive pre-processed food waste at the Joint Water Pollution Control Plant in Carson. The Biosolids Master Plan, Project No. PS15-01, is currently developing a program for replacement of the anaerobic digesters at Plant No. 2 based on end-of-life considerations and seismic vulnerability. Staff intends to report the finding of the Biosolids Master Plan to the Operations Committee later this year. This study is also evaluating food waste issues, including market drivers, stakeholders, technologies, operational impacts, and available digester capacity. The payback period for a food waste receiving facility depends on the quantity of food waste from the haulers, the unit tipping fee, and the capital cost. Since the new digesters will take many years to complete, a smaller and simplerfood waste receiving facility is proposed to accommodate the current market need and gain operational experience. This Interim Food Waste Receiving Facility would be replaced in approximately 10 years, with a payback period ranging from 5 to 10 years, depending on market conditions. This estimated payback period would need to be re- evaluated at each phase of the project. Page 1 of 3 There are currently two opportunities for grant funding the interim facility. On March 9, 2017, the California Department of Resources Recycling and Recovery (CalRecycle) will accept grant applications for their Organics Grant Program (FY 2016-2017). This grant could provide up to $4 million, but requires an approved project by the date of application. Orange County Waste and Recycling (OCWR) is also offering a grant for up to $3 million. Waste Management is taking the lead on this application on behalf of the communities they serve, and the Sanitation District. The deadline for this application is April 7, 2017. RELEVANT STANDARDS • Biosolids Master Plan, Energy Master Plan • Use all practical and effective means for recovering energy PROBLEM To generate additional electricity from digester gas, utilize existing excess capacity in digestion and electrical generators, and to help solve a regional resources recovery problem, an Interim Food Waste Receiving Facility is required at Plant No. 2. The receiving facility will require design, construction, and administrative support. PROPOSED SOLUTION Authorize a project and budget to construct an Interim Food Waste Receiving Facility at Plant No. 2. TIMING CONCERNS If the project is not authorized at this time, the Sanitation District cannot apply for significant grant programs to offset the cost of construction. RAMIFICATIONS OF NOT TAKING ACTION Not taking action will mean that tipping fees could not be collected from food waste haulers and additional digester gas and electricity will not be generated. CEQA This project will require CEQA documentation, which will be completed as part of the Biosolids Master Plan, Project No. PS15-01. Page 2 of 3 FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has not been budgeted. The funds will be allocated from the Replacement, Rehabilitation and Refurbishment, in the cash flow projections, FY 2016-17 and 2017-18, Section 4, Page 16. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: N/A JM:dm:gc Page 3 of 3 ADMINISTRATION COMMITTEE Meeting Date T%%2011oir. 0 2 /0 8 /I7 V 7 AGENDA REPORT Item Item Number 2 11 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST GENERAL MANAGER'S RECOMMENDATION Receive and file Orange County Sanitation District purchases made under the General Manager's authority and additions to the pre-approved OEM Sole Source List for the period of October 1, 2016 - December 31, 2016. BACKGROUND Staff provides the Administration Committee and the Board of Directors quarterly reports of General Manager approved purchases between $50,000 and $100,000 and additions to the pre-approved OEM Sole Source List. RELEVANT STANDARDS • Quarterly financial reporting • Ensure the public's money is wisely spent PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Authorized the General Manager to ratify additions or deletions to the OEM Sole Source list on the General Manager's quarterly approved purchases agenda report. ADDITIONAL INFORMATION In accordance with Board purchasing policies, Ordinance No. OCSD-47, the General Manager has authority to approve purchases between $50,000 and $100,000. Below is a summary of General Manager approved purchases, in amounts exceeding $50,000, for the first quarter of fiscal year 2016-17: Vendor Name Amount Department Description/Discussion ALMEGA Plant No. 1 Trunklines Air Sample ENVIRONMENTAL $g3150.00 Enineerin Collection &Analysis , g g &TECHNICAL for Project No. P1-105 SVCS Specification No. S-2016-793 Page I of 2 Vendor Name Amount Department Description/Discussion Legal Services for Utility Relocations and LEWIS BRISBOIS other Real Estate Matters BISGAARD & $75,000.00 Engineering 10/13/16 to 10/12/18 SMITH LLP Sole Source Justification # 1637 Reason: Unique Product/Service SANCON Operations & Sewer Pipeline Rehabilitation Services ENGINEERING INC $89,880.00 Maintenance 1/1/17 to 12/31/17 Specification No. S-2016-783BD Spectro Scientific MiniLab 53 SPECTRO Operations& Used for Oil Analysis SCIENTIFIC, INC $76,616.00 Maintenance Approved CORF Budget Sole Source Justification # 1668 Reason: Unique Product/Service ADDITIONS TO PRE-APPROVED OEM SOLE SOURCE LIST • SNAP-ON — Smog Machine Repair Services CEOA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance OCSD-47, Section 2.03(B) Cooperative Purchases. This item has been budgeted in the FY 16-17 Budget. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: N/A Page 2 of 2 ADMINISTRATION COMMITTEE Meeting Date T%%2011oir. 02/0 e/I7 2/zz/v AGENDA REPORT Item Item Number 3 12 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: MID-YEAR CONSOLIDATED FINANCIAL REPORT FOR THE PERIOD ENDED DECEMBER 31, 2016 GENERAL MANAGER'S RECOMMENDATION Receive and file Orange County Sanitation District Mid-Year Report for the period ended December 31, 2016. BACKGROUND Included in this consolidated report are the following mid-year reports for the period ended December 31, 2016: • Mid-Year Budget Review The Budget Review Summary provides the Directors, staff, and the general public with a comprehensive overview of the mid-year financial results of the Orange County Sanitation District (Sanitation District)for the period ended December 31, 2016. • Mid-Year Treasurer's Report This section reports on financial portfolio performance with respect to the Sanitation District's funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the U.S. and global economic outlook from the Sanitation District's investment manager, Chandler Asset Management. • Certificates of Participation Mid-Year Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. RELEVANT STANDARDS • Quarterly financial reporting ADDITIONAL INFORMATION The mid-year treasurer's report contained within the Consolidated Financial Reports for the period ended December 31, 2016 is being submitted in accordance with the Sanitation District's investment policy that requires the report be submitted to the governing body following the end of each quarter and includes the following information: Page 1 of 3 • Performance results in comparison with the 3-month treasury bill index for the liquid operating portfolio; and the Merrill Lynch Corp./Govt. 1-5 Year Bond index for the long-term portfolio as identified in the investment policy; and the time- weighted total rate of return for the portfolio for the prior three months, six months, nine months, twelve months, year to date, and since inception compared to the Benchmark returns for the same periods: Portfolio Performance Summary Quarter Ended December 31,2016 Liquid Operating Monies(%) Long-Term Ope(M,ling Monies Total Rate Total Rate of of Return Benchmark Return Benchmark 3 Months 0.12 0.09 -0.84 -1.06 6 Months 0.22 0.18 -0.78 712 9 Months 0.31 0.25 -0.07 -0.26 12 Months 0.48 0.33 1.47 1.30 Annualized Since inception 30 Nov 2014 0.34 0.18 1.01 0.98 • A listing of individual securities held at the end of each reporting period (see the detailed listings of each security contained within the report). • Cost and market values of the portfolios: Liquid Over. Long-Term Cost $112.9 M $316.4 M MV $113.0 M $316.6 M • Modified duration of the portfolio compared to Benchmark: Liquid Over. Long-Term B.M. 0.15 2.61 Port. 0.14 2.48 • Dollar change in value of the portfolio for a one-percent (1%) change in interest rates: Liquid Oper.- $153,567 Long-Term- $7,856,757 • None of the portfolios are currently invested in reverse repurchase agreements. • The percent of the Liquid Operating Monies portfolio maturing within 90 days: 79.9% Page 2 of 3 • Average portfolio credit quality: Liquid Oper. —AAA/Aaa Long-Term —AA+/Aa1 • Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities: Liquid Portfolio- no exceptions Long Term Portfolio- Percent of portfolio— 3.4% Maturity Cost Date Moody S&P Fitch AMRESCO Residential Securities 1999-1 $ 100,432.85 6/25/2029 Not Rated AA+ BBB Bank of America Corp Note $4,334,014.00 12/1/2017 Baal BBB+ A Goldman Sachs Group Inc. Note $ 692,806.00 1/18/2018 A3 BBB+ A American Express Credit Note $ 3,377,385.79 3/19/2018 A3 BBB+ A Morgan Stanley Note $ 3,200,848.00 7/28/2021 A3 BBB+ A • All investments are in compliance with this policy and the California Government Code, except for the following Lehman Brothers holdings that the Sanitation District is pursuing collection through the bankruptcy court: Lehman Brothers Note-Defaulted $ 600,000 par value purchased 9/19/2008 Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008 • Sufficient funds are available for the Sanitation District to meet its operating expenditure requirements for the next six months. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: • Mid-Year Consolidated Financial Reports for the period ended December 31, 2016 Page 3 of 3 sill � I I I � Il, li iII „,ill I sill LI w � Y ORANGE SANITATION JHtq SFNITgT�O Ing 'sN ai f�T/NG THE ENV�P�? for the period ended December Orange County, California Table of Contents ExecutiveSummary...................................................................................................1 Budget Review Section 1 —Consolidated Financial Reports..........................................................................1 Section 2—Operating Budget Review Chart of the Cost per Million Gallons by Department—Budget and Actual..............1 Chart of the Net Expenses by Major Category— Budget and Actual........................1 Divisional Contributions to Cost Per Million Gallons ................................................2 Comparison of Expenses by Department.................................................................3 Summary of Collection, Treatment, and Disposal Expenses by Major Category.....4 Summary of District-Wide Revenues .......................................................................5 Summary of Collection, Treatment and Disposal Revenues....................................5 Summary of Collection, Treatment, and Disposal Expenses by Line Item...............6 Summary of Collection, Treatment, and Disposal Expenses by Process.................8 Chartof Staffing Trends...........................................................................................9 Section 3—Capital Improvement Program Budget Review Capital Improvement Program Graphs by Type and Funding Source......................1 Summary of Capital Improvement Construction Requirements - Current Year........2 Summary of Capital Improvement Construction Requirements - Project Life..........6 Section 4—Capital Assets Schedule & Debt Service Budget Review CapitalAssets Schedule ..........................................................................................1 Debt Service Budget Review....................................................................................1 Section 5—Self Insurance Budget Review General Liability and Property Fund Budget Review................................................1 Workers' Compensation Fund Budget Review.........................................................2 Quarterly Treasurer's Repo rt........................................................................................1 QuarterlyCOP Repo rt.................................................................................................1 FY 2016-17 Mid-Year Financial Report This Page Intentionally Left Blank Executive Summary Consolidated Financial Reports For the Mid-Year Ended December 31, 2016 Included in this consolidated report are the following quarterly financial reports for the period ended December 31, 2016: Mid-Year Budget Review: The Consolidated Financial Reports Section provides the Directors, staff, and the general public with a comprehensive overview of the financial results of the Sanitation District through the mid-year ended December 31, 2016. Contained within the Consolidated Financial Reports is the budget-to-actual status of the Collections, Treatment and Disposal Operations, the Capital Improvement Program, the Self-Insurance Program, and Debt Service Outlays. Also included is a Capital Assets Schedule as of December 31, 2016. Various detail information can be found in this report. In summary: a) Most major expense categories are anticipated to be at or below budget. b) Total revenues are at 77.3 percent mainly due to the receipt of$112.5 million from the issuance of Revenue Refunding Certificate Anticipation Notes, Series 2016B, during the second quarter of the fiscal year. The 2016B Notes were used to refund the Revenue Refunding Certificate Anticipation Notes, Series 2014B. Excluding debt financing proceeds, total revenues are at 51.2 percent of the budget. Except for IRWD Intra District Sewer Use, IRWD Capital Assessments, Interest Earnings, and Other Revenues, all other major revenue sources are currently tracking close to or exceeding revenue estimates. Overall, total revenues are projected to approximate budget at year-end. More detailed information on District revenues is provided within Section 1 — Pages 3 through 5. c) Collection, Treatment and Disposal Costs: As indicated within the Consolidated Financial Reports Section of this report, the net operating requirements through the mid-year of $67.6 million is currently tracking at 46.2 percent of the $146.4 million budget. In addition, net operating expenses have decreased $4.3 million or 6.0 percent in comparison with the same period last year. Overall, staff expects the total operating costs to remain within budget throughout the remainder of the year. More detailed information on District operating expenses is provided within Section 1- Pages 1 through 3. The total cost per million gallons is approximately $2,012 based on flows of 182.6 million gallons per day. This is $154.8 per million gallons, or 7.1 percent lower than the budgeted cost per million gallon per day. A further Page 1 FY 2016-17 Mid-Year Review description of these costs and benchmarking with other agencies is contained within Section 1 — Pages 6 through 8. d) The total projected capital outlay cash Flow of the Capital Improvement Program (CIP) for FY 2016-17 has been revised to $132.3 million, or 77.2 percent of the board approved cash outlay of$171.3 million. The actual cash outlay spending through the mid-year is $59.0 million, or 31.0 percent of the total budgeted outlay. More detailed information on the CIP budget review can be found in Section 3. • Quarterly Treasurer's Report This section reports on financial portfolio performance with respect to the Sanitation District's funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the national economic outlook from the Sanitation District's money manager, Chandler Asset Management (Chandler). Chandler notes that the Long-Term Portfolio returned a negative return of 22 basis points over the quarter, but still outperforming the Bank of America Merrill Lynch 1-5 year AAA U.S. Corporate and Government Index return of a negative 106 basis points, while the Liquid Operating Monies Portfolio returned 12 basis over the quarter, outperforming the three-month Treasury Bill index return benchmark of 9 basis points. Chandler further notes that the Federal Open Market Committee (FOMC) unanimously voted to increase the target fed funds rate by 25 basis points to a range of 0.50%-0.75%, at the December 14 meeting. The Fed noted that economic activity has expanded at a moderate pace and labor market trends have improved, but inflation remains below target. The Fed's revised "dot plot" was slightly more hawkish, as the projected path of the fed funds rate was revised upward. The Committee's GDP and inflation forecasts were little changed while projections for the unemployment rate were revised down slightly. The FOMC's median projection for the fed funds rate in 2017 was revised up to 1.4% from 1.1%, which would be indicative of two or three more 25 basis point rate hikes this year. The Fed's longer-run median fed funds target rate was revised up to 3.0% from 2.9%. The market is now pricing in more than a 70% chance of another rate hike in June 2017. Domestic economic data points to ongoing moderate growth this year. The U.S. labor market continues to improve, consumer confidence remains strong, and housing trends remain mostly favorable. The manufacturing sector has also improved. Market participants estimate GDP grew 2.2% in the fourth quarter. In December, the yield shifted upward as the 2-year Treasury yield increased nearly 8 basis points and the 10-year Treasury yield increased about 6 basis points. The move up in rates over the past few months has largely been driven by Page 2 Executive Summary heightened expectations for fiscal stimulus, and a potential increase in inflation, in light of President-elect Trump's victory and the Republican Party congressional sweep in the US. The Consumer Price Index (CPI) was up 1.7% year-over-year in November, versus up 1.6% year-over-year in October. Core CPI (CPI less food and energy) was up 2.1% year-over-year in November, unchanged from October. The Personal Consumption Expenditures (PCE) index was up 1.4% year-over-year in November, unchanged from October. Core PCE (excluding food and energy) was up 1.6% year-over-year in November, after being up 1.8% year-over-year in October. Although Core CPI is trending above 2.0%, the Fed's primary inflation gauge is PCE which remains below the Fed's 2.0% target. Economic Outlook The US Presidential election results were a surprise to markets and materially repriced the domestic interest rate market higher. During the fourth quarter the two year Treasury note yield moved higher by 43 basis points, to 1.19%, while the five year Treasury note moved higher by 78 basis points, to 1.93. The Federal Reserve was also finally able to tighten monetary policy, raising interest rates by 25 basis points on December 14. Post the election results, the outlook for risk assets improved as most market participants lowered the probability of a recession over an intermediate time horizon given the more positive outlook on a tax policy and higher probability of additional domestic fiscal spending. In Chandler's judgement the market got ahead of itself with the strong risk asset performance and aforementioned adjustment in interest rates; the Chandler team will be looking for some consolidation of performance in both the fixed income and equity markets during the first quarter of 2017. Monetary policy is poised to continue to normalize, with rates moving higher, but the Chandler team anticipates the process will continue to be slow. Currently the team is anticipating two rate hikes in 2017, with the timing likely in June and close to year-end. Economic activity in overseas markets remains lackluster, however if the team were to observe an uptick in economic activity in the Eurozone and/or Japan it would lead us to adjust our expectations for a quicker pace of domestic monetary policy normalization. Chandler continues to have the view the terminal fed funds rate will be low, despite the forecasted lowering of the tax rate and potential fiscal stimulus. Specific to domestic fiscal stimulus, the impact to the domestic economy is more likely to be a 2018 event as it takes time to put the necessary plans in place, in our judgement. Overall the team expects interest rates to be modestly higher on a year-over-year basis; the team is more willing to allocate monies to longer maturity assets given the large adjustment to domestic interest rates during the fourth quarter. • Quarterly Certificates of Participation (COP) Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. Page 3 FY 2016-17 Mid-Year Review This Page Intentionally Left Blank Page 4 Consolidated Financial Reports Mid-Year Financial Report December 31, 2016 Financial Management is pleased to present the FY 2016-17 mid-year financial report. This report provides a comprehensive overview of the financial condition of the Sanitation District and reports on the status of all capital projects in progress. A summary of the sections contained within this report is provided below. Operating Budget Review., This section reports on collection, treatment and disposal net operating requirements. At December 31, 2016, 46.2 percent, or $67.6 million of the FY 2016-17 net operating budget of $146.4 million has been expended. Net operating expenses decreased from the same period last year by $4.3 million, or 6.0 percent, mainly due to a decrease of $1.7 million in Salaries and Benefits, $958,000 in Utilities, $878,000 in Repairs and Maintenance, $727,000 in Operating Materials and Supplies, $212,000 in Administrative Expenses, and $176,000 in Other Operating Supplies, and an increase of$323,000 in indirect costs allocated out to capital projects. These reductions to net operating expenses have been partially offset by increases of $269,000 in Contractual Services, $189,000 in Professional Services, $117,000 in Training and Meetings, and $36,000 in Research and Monitoring. These and other variances that factor into this net increase in expenses are discussed in more detail below. Overall, staff expects the total operating costs to remain at or slightly below budget throughout the remainder of the year. Significant operating results as of December 31, 2016 include the following: • Salaries. Wages and Benefits — Personnel costs of $44.5 million are on target at 49.9 percent of budget through the mid-year of FY 2016-17. Although the budget is based on a 5 percent vacancy factor, staffing is 45 full-time equivalents (FTE's), or 7.2 percent below the total 627 FTE's approved in the FY 2016-17 budget. Salary and benefit costs are $1.7 million or 3.6 percent lower than the $46.2 million incurred in the same period last year, mainly due to the decrease in OCERS retirement of $2.4 million. This decrease is reflective of the decrease in the employee contribution rate as a result of the $175 million pay down on the unfunded actuarial accrued liability over the previous two fiscal years. This decrease is partially offset by an increase of $700,000 in salaries and wages due to the recent completion of bargaining unit agreements that became effective as of July 1, 2017. Net operating personnel costs are expected to be slightly below budget throughout the remainder of the year. • Administrative Expenses — Administrative Expenses totaled $761,000, or 39.9 percent of the $1.9 million budget through December 31. These costs are $212,000 or 21.8 percent lower at December 31 in comparison with the prior year mainly due to a decrease of $194,000 in purchases of small computer items, Section 1 - Page 1 FY 2016-17 Mid-Year Report primarily Microsoft Surface Pro tablets purchased in the prior year. It is anticipated that the administrative costs will approximate or be below budget at year-end. • Printing and Publication Expenses — Printing and Publication Expenses totaled $136,000, or 43.7 percent of the $311,000 budget through December 31. These costs are $14,000 or 11.3 percent higher at December 31 in comparison with the prior year, mainly due to an increase of $28,000 in notices and ads for career recruitment, that were somewhat offset by a decrease of $15,000 in copy center costs as a result of removing mailroom services from the Xerox contract. It is anticipated that the printing and publication costs will be below budget at year-end • Training and Meetings — Training and meetings of $447,000 are below target at 38.6 percent of the $1.2 million budget. This account is lower than the proportionate budget due to the timing and need for training throughout the year. These costs have increased over the same period last year by $117,000 or 35.4 percent, which includes $72,000 for Total Productive Maintenance Certification Program costs not incurred in the prior period. Total training and meeting costs are anticipated to be below budget at year-end. • Operating Materials and Supplies — Operating materials and supplies of $7.6 million is slightly below target at 45.2 percent of budget through December 31. Operating Materials and Supplies have decreased from the prior year by $727,000 or 8.8 percent, primarily due to decreases in Chemical Coagulants of $384,000, Odor Control of $144,000, Tools of $100,000, Gas, Diesel and Oil of $52,000, and Safety Equipment of $29,000. The decreases are mainly brought about by chemical process optimization, a decrease in unit costs, and a decrease of purchases for tools and equipment from the prior year. Based on current processes, operating materials and supplies are anticipated to approximate budget at year-end. • Contractual Services — Contractual services is slightly below target at $11.4 million or 45.2 percent of budget through December 31. Solids Removal costs, budgeted at $17.2 million, comprise the majority of this expense category. With an increase of $19,000, or 0.2 percent higher than the prior year, solids removal costs totaled $8.8 million, or 51.4 percent of budget at December 31. Overall, Contractual Services is higher by $269,000 or 2.4 percent over the same period last year. Security Services increased by $216,000 due to heighted security and the addition of armed patrol services at both plants. In addition, Other Contractual Services increased by $152,000 due to an increase preventive maintenance services for the Civil Assets Management Program (CAMP). These increases were offset by decreases of$62,000 in Oxygen Plant Operation due to prior period increased flows diverted from plant 2 and $54,000 in Janitorial Service dues to renegotiation of contract rates. Total contractual services costs are anticipated to approximate budget at year-end. • Professional Services — Professional services costs totaled $1.5 million or 34.8 percent of the $4.3 million budget through December 31. Most professional Section 1 - Page 2 Consolidated Financial Reports service costs, such as Audit and Accounting, Engineering, Environmental Scientific Consulting, and Other Services, are proportionately low through December 31 due to a variety of factors such as services being in the planning or request for proposal stage, timing of services needed, the need for the service being re-evaluated, or utilization of internal staffing for projects. These costs are $189,000 or 14.4 percent higher at December 31 in comparison with the prior year mainly due to an increase of $171,000 in engineering services and timing of services performed. It is anticipated that the costs for this category will be below budget at year-end. • Research and Monitoring — Research and monitoring costs totaled $346,000, or 43.2 percent of the $860,000 budget through December 31. These costs are $36,000, or 11.6 percent higher at December 31 in comparison with the prior year, mainly due to an increase in environmental monitoring costs. Total Research and Monitoring costs are anticipated to be below budget at year-end. • Repairs and Maintenance — Repair and maintenance costs totaled $6.1 million, or 43.1 percent of the $14.3 million budget through December 31. These costs are $878,000, or 12.5 percent lower at December 31 in comparison with the prior year, mainly due to Plant 2 digester treatment and engine repairs in the prior year. It is anticipated that the costs for this category will approximate budget at year- end. • Utilities — Utilities costs totaled $3.4 million, or 41.0 percent of the $8.2 million budget through December 31. These costs are $958,000 or 22.1 percent lower at December 31 in comparison with the prior year, primarily due to a decrease in electricity charges of $1.0 million as a result of decreased usage related to decreased activities and outfall pumping, that is somewhat offset by an increase in natural gas charges of $65,000. The overall operating philosophy of the Central Generation facilities is to purchase electricity for power production rather than to purchase natural gas as a supplement to the digester gas needed to run the Central Generation facilities. This operating philosophy allows the Central Generation facilities to meet air emission requirements. It is anticipated that the costs will approximate budget at year-end. • Other Ooerating Supplies — Other operating supplies costs totaled $902,000, or 39.6 percent of the $2.3 million budget through December 31. Property and General Liability Insurance comprise the majority of this expense category. These costs are $308,000 or 124.0 percent higher at December 31 in comparison with the prior year primarily due to an increase in budgeted in-lieu premium charges in order to maintain recommended reserve balances. Regulatory Operating Fees have decreased over the prior year by $498,000, or 78.2 percent due to timing of payments for OCSD's ocean discharge permit fees. It is anticipated that the costs will approximate or be below budget at year-end. • Revenues — Service Fees and Property Taxes — Through December 31, revenues from service fees are at $158.6 million, or 55.4 percent of budget and Property taxes are $41.6 million, or 47.8 percent of budget. These items comprise the Section 1 - Page 3 FY 2016-17 Mid-Year Report majority of the Sanitation District's revenues and are mostly collected by the County through the property tax roll and distributed to the Sanitation District throughout the year based on a set distribution schedule that begins in November of each year. A decrease of $270,000 or 0.2 percent in service fee revenue over the prior period is due in part to timing of customer payments, change in invoicing wholly-exempt agency invoices, and an increase in user fee refunds issued in the current period, offset by an increase in fees of 1.6 percent. An increase of$296,000 or 0.7 percent in property tax revenues over the prior period is due to an increase of approximately 2.0 percent in property tax rates, higher construction activities and property values, offset by a decrease due to timing of redevelopment pass-through collections. These revenues are expected to approximate budget at year-end. • Revenues — Permittee User Fees — Permittee User Fees are at $6.0 million, or 53.3 percent of the $11.3 million budget. The number of permittees fluctuates from year to year as businesses are established or close their operations. The revenues through the mid-year are $1.7 million or 38.9 percent higher in comparison with the same period last year due to an increase in the number of permittees and an increase in the amount of discharge from the permittees. It is estimated that the permittee user charges will approximate budget at year-end. • Revenues — Inter District Sewer Use — SAWPA and SBSD — Inter District Sewer revenues - SAWPA and SBSD are at $1.6 million, or 47.5 percent of the $3.3 million budget. This revenue is derived from charges to the Santa Ana Watershed Protection Agency (SAWPA) and Sunset Beach Sanitary District (SBSD) for treatment of flows. These revenues are expected to approximate budget at year-end. • Revenues — Intra District Sewer Use — IRWD — Intra District Sewer revenues- IRWD are at $761,000, or 20.4 percent of the $3.7 million budget. This revenue is derived from charges to the Irvine Ranch Water District (IRWD) for treatment of flows. The revenues through the mid-year are lower than the same period last year by $89,000 or 10.5 percent mainly due to a $93,000 increase of property tax owed to IRWD that is somewhat offset the cost reimbursements received from IRWD. These revenues are expected to approximate budget at year-end. • Revenues - Sludge Disposal — IRWD — Sludge Disposal fees - IRWD are at $5.0 million, or 54.9 percent of the $9.1 million budget. The revenue is derived and fluctuated from flows discharged from IRWD to Sanitation District for the handling, treatment and disposal of solids. The revenues through the mid-year are lower than the same period last year by $252,000 or 4.8 percent, mainly due to an anticipated decline in sludge disposals. These revenues are expected to approximate or exceed budget at year-end. • Revenues — Capital Assessments — IRWD — Capital Assessments-IRWD are at $927,000, or 21.1 percent of the $4.4 million budget. The revenues through the mid-year are lower than the same period last year by $317,000 or 25.5 percent Section 1 - Page 4 Consolidated Financial Reports mainly due to a decrease in joint capital costs charged to IRWD. It is estimated that the capital assessments will be below budget at year-end. • Revenues — Capital Facilities Capacity Charges (CFCC) — CFCC are at $5.8 million, or 42.8 percent of the $13.5 million budget. The revenues through the mid-year are lower than the same period last year by $169,000 or 2.9 percent due to decreased construction activity, offset by more supplement capital facilities capacity charges from industrial dischargers than at this time last year. These revenues are expected to approximate the budget at year-end. • Revenues — Interest Earnings — Interest Earnings are at ($1.4 million) or (16.4) percent of the $8.6 million budget. The revenues through the mid-year are lower than the same period last year by $2.8 million or 204.2 percent due to a decline in the current market value of the securities held in the investment portfolios. It is estimated that the interest earnings will be below the budget amount at year- end. • Revenues — Wastehauler — Wastehauler revenues are at $358,000 or 47.7 percent of the $750,000 budget. This revenue is derived from fees charged to wastehaulers allowing them to dump waste into the Sanitation District's system. These revenues are expected to approximate budget at year-end. • Revenues — CNG Sales — CNG Sales revenues are at $227,000 or 56.8 percent of the $400,000 budget. This revenue is derived from public sales at the District's Compressed Natural Gas (CNG) fueling station. The revenues through the mid-year are higher than the same period last year by $6,000 or 2.8 percent. These revenues are expected to approximate budget at year-end. • Revenues - Other — Other revenues are at $227,000 or 28.3 percent of the $800,000 budget. These revenues consist of miscellaneous revenues, such as reimbursements from insurance and employees. The revenues through the mid- year are lower than the same period last year by $508,000 or 69.1 percent mainly due to a settlement received in the prior year from the County of Orange bankruptcy filing in 1994 of $480,000. These revenues are expected to be below budget at year-end. Section 1 - Page 5 FY 2016-17 Mid-Year Report Comparison of Mid-Year Cost per Million Gallon Results with Budget Last Five Years 2,200 2,150 0.167 % 2,100 , 1„ Z050 i z. s 2089 zoos Zo 2012 1,950 900 9s, �• ,,a58 I 1,800 1,750 1,700 1,650 1,600 1,550 1,500 12-13 13-14 14-15 15-16 16-17 Mid- Annual Mid- Annual Mid- Annual Mid- Annual Mid- Annual Year Budget Year Budget Year Budget Year Budget Year Budget As demonstrated in the preceding graph for each of the last four fiscal years, the cost per million gallons at the end of the mid-year has been between 2.1 percent lower to 3.5 percent higher than the annual budget. The FY 2016-17 mid-year is 7.1 percent lower when compared with this year's budget. The variance from previous years is primarily due to a decrease in operating expenses, which are 6.0 percent lower than the same period last year, offset by a decrease in flows, which are 1.1 percent lower than the same period last year. Staff believes that overall operating costs will be below budget at year-end. The total cost per million gallons at December 31 is $2,012.18 based on flows of 182.6 million gallons per day. This is $154.8 per million gallons, or 7.1 percent, lower than the budgeted cost per million gallons of $2,167. There is an inverse relationship between the amount of flows and the cost per unit of collection, treatment, and disposal. Consequently, the lower cost per million gallons is due to net expenses being 7.6 percent less than the proportionate budget through December 31, which is partially offset by flows of 182.6 million gallons per day being 1.3 percent lower than the budgeted flow of 185 million gallons per day. More detailed information on operating revenues, costs, and related information is provided within Section 2. Section 1 - Page 6 Consolidated Financial Reports Following are data tables showing the last five years of Single Family Residential User Fees (SFR) and the cost per MG to collect, treat, and dispose of wastewater for OCSD and for similar agencies. The agencies used in the table were determined to be those that most closely resembled OCSD in terms of services provided and treatment levels. The summaries demonstrate that OCSD's SFR and cost per million gallons are each one of the lowest in their respective group. Benchmark Study Five-Year Single Family Rate Rates as of July 2012 2013 2014 2015 2016 Agency SFR SFR SFR SFR SFR Notes San Francisco $667.92 $701.40 $744.83 $ 784.44 $ 842.14 City of San Diego $572.58 $572.58 $572.58 $ 572.58 $ 572.58 Vallejo Sanitation/Flood Control District $495.12 $507.48 $520.20 $ 520.20 $ 520.20 Central Contra Costa Sanitary District $371.00 $405.00 $439.00 $ 471.00 $ 503.00 City of Los Angeles $391.56 $409.20 $435.40 $ 464.04 $ 494.77 Note 1 Sacramento County $288.00 $312.00 $348.00 $ 384.00 $ 420.00 Dublin San Ramon SeMces District $355.44 $355.44 $372.96 $ 382.38 $ 382.38 Union Sanitary District $319.55 $337.76 $357.02 $ 377.00 $ 380.05 East Bay MUD $305.10 $331.10 $358.14 $ 355.18 $ 372.50 City of Hayward $327.24 $327.24 $337.08 $ 347.16 $ 357.60 Orange County Sanitation District $294.00 $308.00 $316.00 $ 322.00 $ 327.00 City of Fresno $309.00 $309.00 $309.00 $ 309.00 $ 309.00 IMne Ranch Water District $206.40 $220.80 $246.00 $ 288.60 $ 309.00 Note 2 Oro Loma Sanitary District $189.00 $195.00 $200.00 $ 206.00 $ 221.00 Los Angeles County $149.00 $150.00 $151.00 $ 155.00 $ 159.00 Note 3 Notes: (1)- Data is for the typical SFR customer rate and is not the average rate. (2)- Data represents the maximum SFR rate and is not the average rate. (3)- Data for 2013 and 2014 was revised to remove ad valorem monies that were inadvertently included. Section 1 - Page 7 FY 2016-17 Mid-Year Report Benchmark Study Five-Year Cost per MG FY 11-12 FY 12-13 FY 13-14 FY 14-15 FY 15-16 Agency Stc.Trt. Cost/MG Cost/MG Cosl/MG Cost/MG Cost/MG Notes Central Contra Costa Sanitary District B 4 $4,203.43 $4,621.84 $5,778.43 $6,280.58 $6,453.65 Vallejo Sanitation/Flood Control District B 3 $5,176.00 $5,435.00 $6,153.D0 $5,590.00 $5,396.00 San Francisco B 3 $4,778.96 $5,006.74 $5,400.28 $5,357.97 $5,268.23 Note 1 Union Sanitary District B 3 $3,267.06 $3,805.40 $3,832.47 $3,910.73 $3,957.08 City of San Diego B 2 $3,242.30 $3,340.35 $3,156.43 $3,591.69 $3,171.51 Dublin San Ramon SerNces District B 3 $2,009.57 $2,159.49 $2,506.60 $2,522.Dg $2,895.95 East Bay MUD T 4 $2,320.02 $2,359.40 $2,559.18 $2,727.97 $2,598.53 Sacramento County T 3 $3,312.50 $2,143.16 $2,375.47 $2,494.40 $2,571.14 Note 2 City of Los Angeles B 4 $1,935.00 $2,062.00 $2,163.00 $2,269.00 $2,452.00 Orange County Sanitation District B 3 $1,871.47 $1,906.01 $1,935.05 $2,070.97 $2,110.43 City of Fresno B 3 $1,383.60 $1,411.89 $1,552.39 $1,628.91 $1,678.28 Los Angeles County B 4 $1,156.00 $1,008.00 $1,223.72 $1,239.40 $1,371.06 Note 3 Legend for SeNoe Prodded and Treatment Letel: B-Agency operates both collection and treatment facilites T-Agency proddes treatment serAces but not collection 2-Advanced prim aryor primary with some secondary treatment 3-Secondarytreatment 4-Advanced secondaryor secondarywith some terfiarytreatment Notes: (1)-Beginning in Fiscal Year 2012-13,dataset represents wastewater flows from finalised publicly available audited documents. (2)-Miles of sewers number changed in 2012 to include parallel force main pipes per the 2011 State of the District Report. (3)-Does not include source control or overhead costs. Section 1 - Page 8 Consolidated Financial Reports Capital Outlay Review: $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 12/31/16 Actual Projected 2016-17 2016-17 Capital Outlay Capital Outlay Capital Outlay Cashfiow Budget $59,018,230 $132,251,000 $171,277,393 As depicted by the preceding chart, Capital Outlays totaled $59.0 million or 34.5 percent of the capital outlay cash flow budget for FY 2016-17 as of December 31, 2016. Costs are proportionately low through the mid-year as some projects are still in the design phase or have experienced various delays. Examples as of December 31 are the Sludge Dewatering and Odor Control for Plants 1 and 2, which has a combined FY16-17 cash flow budget of$41.9 million but actual costs of only $14.3 million and the Rehabilitation of Western Regional Sewers, which has a budget of $16.0 million but actual costs of only $2.0 million. Overall, the capital outlay costs of the capital improvement program are expected to approximate $132.3 million, or 77.2 percent of the capital outlay cash flow budget at year-end. More detailed information on the capital improvement program is provided within Section 3. Capital Assets Schedule and Debt Service Budget Review: Section 4 is the Capital Assets Schedule and Debt Service Section. This section shows the cost value of the Sanitation District's capital facilities at December 31, 2016, as well as the debt service costs resulting from the need to provide funding for the construction of capital facilities. The majority of principal payments on debt issues are due in August during the first quarter, and in February during the third quarter of each fiscal year. Excluding payments on refunding debt from the Revenue Refunding Certificate Anticipation Notes, Series 20148, as of December 31, 2016, 55.2 percent of the principal payments have been made through the end of the mid-year. Total principal payments are expected to Section 1 - Page 9 FY 2016-17 Mid-Year Report approximate budget at year-end. Interest costs are expensed ratably throughout the fiscal year. Interest expense is anticipated to approximate budget at year-end. Self-Insurance Budget Reviews: Section 5 is the Self-Insurance Section. Through December 31, the Self-Insurance Fund revenues totaled $1.2 million or 49.8 percent of the budget, while expenses were $1.7 million or 66.7 percent of the budget. Separate fund accounting is used for recording the revenue and expenses incurred in managing these liability claims. The revenues to these funds represent charges to operating divisions. Expenses to these funds include actual claims paid, claims administration, and excess loss policies. Section 1 - Page 10 Operating Budget Review Cost per Million Gallons by Department Budget and Actual December 31, 2016 $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600 $s00 S400 $300 $200 LJ $100 $0 E E8 E.� W S� m qc w' E✓� y w OE 'a w` �Butlget �Aclual Collection, Treatment, &Disposal Expenses by Major Category Budget and Actual (in thousands) December 31, 2016 $70,000 $$$,000 $so,000 $E5,000 W'000 $a5,000 $40.000 $3e,000 $30,000 $25,000 $20,000 $15,000 Alm $10.000 E5.000 ANN VAR— $o E 'a rc rc �e�a9ec �nmai Section 2-Page 1 2016-17 Mid-Year Report Divisional Contributions to Cost Per Million Gallons For the Six Months Ended December 31,2016 2016-17 12131114 121311115 Annual 121311116 Actual Actual Budget Actual Flow in Million Gallons 35,166.23 33,974.26 67,525.00 33,601.96 Flow in Million Gallons per Day 191.12 184.64 185.00 182.62 Executive Management Department General Management Administration $ 25.60 $ 31.50 $ 43.31 $ 36.87 Board Services 7.32 6.67 9.38 8.07 Public Affairs 7.93 13.11 15.11 15.05 Subtotal 40.85 51.28 67.80 59.99 Human Resources Department Human Resources 54.65 56.17 58.04 54.33 Risk Management/Safety I Security 48.23 43.67 70.33 60.60 Subtotal 102.88 99.84 128.37 114.93 Administrative Services Department Administrative Services 9.87 9.43 8.75 7.66 Financial Management 45.60 46.69 50.51 42.54 Contracts,Purchasing,&Materials Mgmt. 62.59 61.57 61.74 63.24 Information Technology 160.60 157.32 154.39 143.82 Subtotal 268.66 275.01 275.39 257.26 Facilities Support Services Department Facilities Support Administration 9.89 14.91 - - Facilities Support 8.21 - - - Equipment Rebuild 24.89 - -Fleet Services 30.11 32.14 - - Collections Engineering 44.33 42.60 - - NPDES Source Inspection 33.08 34.61 - - Odor and Corrosion Control 104.94 105.34 - - Collection Facilities O&M 60.76 56.94 Subtotal 316.21 286.54 Environmental Services Department Environmental Services Administration - - 12.41 12.16 Resource Protection - - 88.10 81.92 Laboratory&Ocean Monitoring 153.76 146.20 Subtotal 254.27 240.28 Engineering Department Engineering Administration 10.43 7.75 5.91 6.72 Planning 44.49 50.91 48.61 49.05 Project Management Office 52.03 37.39 39.89 39.75 Civil and Mechanical Engineering 129.56 140.56 124.51 127.49 Electrical&Control System Engineering - - 68.29 61.45 Environmental Compliance 109.09 105.11 Subtotal 345.60 341.72 287.21 284.46 Operations&Maintenance Department Operations&Maintenance Administration 10.66 13.23 10.15 7.29 Collections Facilities 0&M - - 190.21 166.05 Fleet Services - - 31.27 28.10 Plant No. l Operations 378.10 489.49 429.22 414.15 Plant No,2 Operations 308.15 309.99 309.80 302.10 Building,Grounds&Mechanical Maintenance 205.58 - - - Instrumentation&Electrical Maintenance 215.79 - - - PlanlNo. lMaintenance - 226.80 299.69 256.09 Plant No.2 Maintenance - 171.72 168.14 163.51 Environmental Laboratory&Ocean Monitoring 117A8 120.34 Subtotal 1,235.76 1,331.57 1,438.48 1,337.29 Total Operating Expenses 2,309.96 2,385.96 2,451.52 2,294.21 Cost Allocation (234A3) (269.45) (264.52) (282.03) Net Operating Requirements $ 2, 775.83 $ 2,1 66.51 $ 2,1 77.00 $ 2,012.18 Section 2-Page 2 Operating Budget Review Comparison of Expenses by Department For the Six Months Ended December 31,2016 2018-17 12131/14 12131/15 Year to Date Budget% Department and Division Actual Actual Budget 12/31116 Realized Executive Management Department General Management Administration $ 900,333 $ 1,070,092 $ 2,924,220 $ 1,238,A5 42.36% Board Services 257,548 226,641 633,540 271,180 42.80% Public Affairs 278,804 445,273 1,020,100 505,756 49.58% Subtotal 1,436,685 1,742,006 4,577,860 2,015,711 44.03% Human Resources Department Human Resources 1,921,945 1,908,246 3,918,890 1,825,529 46.58% Risk Management/Safety/Security 1,696,087 1.483,739 4,749,050 2,036,378 42.88% Subtotal 3,618,032 3,391,985 8,667,940 3,861,907 44.55% Administrative Services Department Administrative Services 347,258 320,249 590,830 257,262 43.54 Financial Management 1,603,533 1,586,133 3,410,810 1,429,448 41.91% Contracts,Purchasing,&Materials Mgmt. 2,200,926 2,091,743 4,169,220 2,125,049 50.97% Information Technology 5,296,062 5,344753 10,425,510 4,832,573 46.35% Subtotal 9,447,779 9,342,878 18,596,370 8,644,332 46.48% Facilities Support Services Department Facilities Support Administration 347,941 506,529 - - 0.00% Facilities Support 288,601 - - - 0.00% Equipment Rebuild 875,449 - - - 0.00% Fleet Services 1,058,813 1,091,964 - - 0.00% Collections Engineering 1,558,758 1,447,182 - - 0.00% NPDES Source Inspection 1,163,166 1,176,019 - - 0.00% Odor and Corrosion Control 3,690,482 3,578,950 - - 0.00% Collection Facilities 0&M 2,136,631 1,934,347 0.00% Subtotal 11,119,841 9,734,991 0.00% Environmental Services Department Environmental Services Administration - - 838,250 408,709 48.76% Resource Protection - - 5,948,920 2,752,519 46.27% laboratory&Ocean Monitoring 10,382,450 4,912,625 47.32% Subtotal 17,169,620 8,073,853 47.02% Engineering Department Engineering Administration 366,932 263,193 399,390 225,956 56.58% Planning 1,564,599 1,729,470 3,282,440 1,648,112 5021% Project Management Office 1,829,753 1,270,433 2,693,360 1,335,715 49.59% Civil and Mechanical Engineering 4,556,182 4,775,392 8,407,280 4,284,039 50A6% Electrical&Control System Engineering - - 4,610,980 2,064,785 4478% Environmental Compliance 3,836,238 3,571,061 0.00% Subtotal 12,153,704 11,609,549 19,391 9,558,607 49.29% Operations&Maintenance Department Operations&Maintenance Administration 374,959 449,368 685,600 244,910 35.72% Collections Facilities 0&M - - 12,844,162 5,579,495 43.44% Fleet Services - - 2,111,320 944,263 4472% Plant No.1 Operations 13,296,458 16.630,063 28,982,656 13,916,367 48.02% Plant No,2 Operators 10,836,567 10,531,806 20,918,950 10,151,167 48.53% Building,Grounds&Mechanical Maintenance 7,229,649 - - - 0.00% Instrumentation&Electrical Maintenance 7,588,641 - - - 0.00% Plant No. 1 Maintenance - 7,705,229 20,236,812 8,605,039 42.52% Plant No.2 Maintenance - 5,833,922 11,353,810 5,494,260 48.39% Environmental Laboratory&Ocean Monitoring 4,131,065 4,089,195 0.00% Subtotal 43,457.339 45,239,583 97,133,310 44,935.501 46.26% Total Operating Expenses 81,233.380 81,060,992 165,538,550 77,089.911 46.57% Cost Allocation (8,234,303) (9,153,971) (19,182,030) (9,476,871) 49.40% Net Operating Requirements $ 72,999,077 $ 71,907,021 $ 146,356,520 $ 67,613,040 46.20% Section 2-Page 3 2016-17 Mid-Year Report Summary of Collection, Treatment, &Disposal Expenses by Major Category For the Six Months Ended December 31, 2016 Expense Expense Increase Increase Percent Budget Through Through (Decrease) (Decrease) Budget Remaining Description 2016-17 12/31/16 12/31/15 $ % Realized Budget Salary&Wages $ 66,833,000 33,174,805 32,474,470 $ 700,335 2.16% 49.64% $33.658,195 Employee Benefits 22,456,800 11,355,931 13,709,333 (2,353,402) -17.17% 50.57% 11,100,869 Administrative Expenses 1,909,150 760,690 972,801 (212,111) -21.80% 39.84% 1,148,460 Printing&Publication 310,690 135,662 121,931 13,731 11.26% 43.66% 175,028 Training&Meetings 1,158,070 446.676 329,883 116,793 35.40% 38.57% 711,394 Operating Materials&Supplies 16,698,250 7,554,763 8,281,648 (726,885) -8,78% 45.24% 9,143,487 Contractual Services 25,138.420 11,354,517 11,085,727 268,790 2.42% 45.17% 13.783,903 Professional Services 4,320,830 1,503,976 1,315,067 188,909 14.36% 34.81% 2,816,854 Research&Monitoring 800,000 345.735 309,764 35,971 11.61% 43.22% 454,265 Repairs&Maintenance 14,265,930 6,145,263 7,023,304 (878,041) -12.50% 43.08% 8,120,667 Utilities 8,242,240 3,378,952 4,337,178 (958,226) -22.09% 41.00% 4,863,288 Other Materials,Supplies, and Services 3,405,170 932,941 1,099,886 (166,945) -15.18% 27.40% 2,472,229 Net Cost Allocation (19,182,030) (9,476,871) (9,153,971) (322,900) 3.53% 49.40% (9,705,159) Net Operating Requirements 146,356,620 67,613,040 71,907,021 (4,293,981) .5.97% 46.20% 78,743,480 Gallonage Flow(MG) 67,52&00 33,601.96 33,974.26 (372.30) -1.10% Gallonage Flow(MGD) 185.00 182.62 184.64 (2.02) -1.09% Gallonage Flow($'s/MG) $2,16T00 $2,012.18 $2,116.51 ($104.33) -4.93% Section 2-Page 4 Operating Budget Review Summary of Revenues For the Six Months Ended December 31, 2016 Revenue Percent Revenue Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2016-17 12/31116 Realized Budget 12131/15 $ % Service Fees $286,554,000 $158,606,025 55.35% $127,947,975 $158,875,947 $ (269,922) 41.17% Permit Fees 11,272,000 6,0D4,948 53.27% 5,267,052 4,322,983 1,681,965 38.91% Inter District Sewer Use-SAWPA&SBSD 3.283.000 1,560,261 47.53% 1,722,739 1.633.381 (73,120) 4.48% Infra District Sewer Use-IRWD 3,737,690 761,413 20.37% 2,976,277 850,469 (89,056) -10,47% Sludge Disposal-IRWD 9.090.000 4,993,946 54.94% 4,096,054 5.246,103 (252,157) 4.81% Capital Assessments-IRWD 4,402,000 926,696 21.05% 3,475,304 1,243,274 (316,578) -25,46% Capital Facilities Capacity Charges 13,500.000 5,776,293 42.79% 7,723,707 5,945,771 (169,478) -2.85% Debt Proceeds - 112,494,420 N/A (112,494,420) - 112,494,420 100.00% Property To. B7,017,000 41,601,683 47.81% 45,415,317 41.305.268 296,415 0.72% Interest Earnings 8,606,000 (1,409,703) -16.38% 10,015,703 1,352,547 (2,762,250) -204.23% Wastehauler 760.000 357,741 47.70% 392,259 337.513 20,228 5.99% CNG Sales 400,000 227,216 56.80% 172,7B4 221,094 6,122 2.77% Rents&Leases 255.000 124,284 48.74% 130,716 129,940 (5,656) 4.35% Other 800,000 226,733 28.34% 573,267 734,790 (508,057) -69,14% Power Sales 20,000 23,600 118.00% (3,600) 7,822 15,778 201.71% Other Sales 35,000 19,123 54,64% 15,877 30,717 (11,594) -37,74% Total Revenues $429,721,690 $332,29Q679 77.33% $ 97,427,011 $222,237,619 $110,057,060 49.52% Section 2-Page 5 2016-17 Mid-Year Report Summary of Collection,Treatment, &Disposal Expenses by Line Item For the Six Months Ended December 31,2016 Expense Percent Expense Increase Increaaa Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2016.17 1=1116 Expensed Budget IV31115 $ % salaries.Wanes&Benefits Salaries&Wages $ 66,833,000 $ 33,174,805 49.64% $ 33,658,195 $ 32,474,470 $ 700,335 2.16% Employee Benefits Retirement 10,950,600 5,747,044 52.48% 5,203,556 8,099,396 (2,352,352) Group Insurances 9,725,700 4J&W,020 47.71% 5,085,680 4,605,766 34,254 0.74% Tuition&Cedifica0on Relmb 175,600 49,982 28.46% 125,618 60,625 (10,643) -17.56% Edu,degrees,Can.&Lic. 314.600 199,660 63,46% 114.940 157,128 42,532 21.07% Uniform Rental 53,200 55,295 103.94% (2,095) 26,643 28,652 101.5,1 Workers Compensation 1,196,300 598,150 50.00% 598,150 739,349 (141,199) -19.10% Unemployment Insurance 2,900 12,334 425.31% (9,434) 1,459 10,875 745.37% EMT Supplemental Benefits 37,900 53,446 141,02% (15,546) 18,967 34,479 181.78% Total Benefits 22,456,800 11,355,931 50.57% 11,100,869 13,709,333 (2,353,402) "IT17% Salaries,Wages&Bensfts 89,289,800 44,530,736 49.87% 44,759,06,t 46,183,803 (1,653,N7) -3.58% Matt.Supply,&Servlces Administrzdve Expenses Memberships 586,050 335,649 57.27% 250,401 343,816 (8,167) -2.38% Office Exp-Supplies 61.370 30,114 49,07% 31.256 25.970 4,144 15.96% Postage 41,040 19,870 48.42% 21,170 14,418 5,452 37.81% Banks&Publications W,970 21,308 41.80% 29,662 15,459 5,849 37.84% Forms 1.300 - 0.00% 1.300 231 (231) -100.00% Small Computer Items 908,000 311,023 34.25% 596,877 504,933 (193,910) -38.40% Minor Furniture&Fixtures 26Q420 42,726 16.41% 217,694 67,974 (25,248) -31.14% Sublotal 1,909,150 760,690 39.84% 1,148,460 972,801 (212,111) -21.80% Printing It Publication Repro-In-House 243,690 95,150 39.05% 148,540 110,407 (15,257) -13.82% Pnnting-Outside 22,250 6,912 31.07% 15,338 6,314 698 9.47% Nations&Ads 44,700 33,600 75.17% 11,100 5,210 28,390 544.91% Photo Processing 50 0,00% 50 NIA Subtotal 310,690 135,662 43,66% 175,028 121,931 13,731 11.26% Training&MaMings Meetings 188.310 49,741 26,41% 138.569 71,634 (21,893) -30.56% Training 969,760 396,935 40.93% 572,825 258,249 138,686 53.70% Subtotal 1,158,070 446,676 38.57% 711,394 329,883 116,793 35.40% Operating Mat'Is&Supplies Chemical Coagulants 5,126,550 2,617,231 51.05% 2,509,319 3,001,217 (383,986) -12.79% Odor Control 8,157,300 3,603,443 44.17% 4,553,857 3,747,900 (144,457) -3.85% Disinfection 170,500 101,701 59.65% 68,799 100,885 816 0.81% Chemicals-Misc&Cogan 472,000 153,559 32,53% 318,441 144,253 913M 6,45% Gasoline,Diesel&Oil 632,790 253,014 39.98% 379,776 304,595 (51,581) -16.93% Tools 691,950 135,343 19.56% 556,607 235,123 (99,780) 42.44% Safely equipment/tools 587,560 299,478 50.97% 288,082 328,389 (28,911) -8.80% Solv,Paints&Jan.Supplies 82,390 38,507 46.74% 43,883 43,353 (4,846) -11.18% Lab Chemicals&Supplies 601,360 270,598 45.00% 330,762 289,837 (19,239) -6.64% Other Opem0ng Supplies 171,850 80'am 47.05% 90,992 84,203 (3,345) -3.97% Property Tax Fees 4,000 1,031 25.78% 2,969 1,893 (862) 45.54% Subtotal 16.698,250 7.554,763 45,24% 9.143,487 8,281.648 (726,885) Contractual Services Solids Removal 17,206,000 8,844,955 51.41% 8,361,045 8,826,087 18,868 0.21% Other Waste Disposal 886.400 393,159 44,35% 493.241 388.010 5,149 1,33% Groundskeeping 129,720 69,332 53.45% 60,388 69,306 26 0.04% Janitorial 345,700 181,110 52.39% 164,590 235,632 (54,522) -23.14% Outside Lab Services 275.000 62,718 22.81% 212,282 91,956 (29,238) -31.80% Oxygen Plant Oper 406,000 146,240 36,02% 259,760 208,302 (62,062) -29.19% County Service Fee 671,700 24,468 3.64% 647,232 21,229 3,239 15.26% Temporary SeNces 814,400 223,713 27.47% 590,687 203,824 19,889 9.76% Security Services 1,330,000 416,489 31.31% 913.511 200.691 215,798 107.53% Other 3,073.500 992,333 32,29% 2,081.167 840,690 151,643 18.04% Subtotal 25,138,420 11,354,517 45.17% 13,783,903 11,085,727 268,790 2.42% (Continued) Section 2-Page 6 Operating Budget Review Summary of Expenses by Line Item For the Six Months Ended December 31,2016 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2016.17 IV31116 Expenses! Budget IV31115 $ % Continued: Professional Services Legal 1,363,500 606,591 44.49% 756,909 644,443 (37,852) -5.87% Audit&Accounting 270,700 71,077 26.26% 199,623 85,607 (14.530) -16.97% Engineering 743.000 262,065 35.27% 480,915 91,060 171.025 187.82% Enviro Scientific Consulting 125,000 23,481 18.78% 101,519 37,683 (14,202) -37.69% Sofvxare PMm Consulting 370,000 198,661 53.69% 171,339 115,713 82,948 71.68% Advocacy Efforts 176,000 78,870 ".at% 97,130 112,456 (33,586) -29.87% Industrial Hygiene Services 50.000 43,W2 87.60% 6,198 41,635 2.167 5.20% Labor Negotiation Services 80,000 32,200 40.25% 47,800 - 32,200 N/A Other 1,142,630 187.209 16.38% 955,421 186,470 739 0.40% Subtotal 4,320,830 1,503.976 36.81% 2,816,854 1,315,067 188,909 14.36% Research S Monitoring Environmental Monitoring 305,000 145,203 47.61% 159,797 97,857 47,346 48.38% Ar Quality Monitoring 95,000 532 0.56% 94,468 11,907 (11,375) -95.53% Research 400.000 200,000 50,00% 200,000 200,000 0.00% Subtotal 800,000 345,735 4022% 454,265 309,764 35,971 11.61% Repairs S Maintenance Materials 8 Services 11,453,670 4,962,286 43.32% 6,491,384 5,756,023 (793.737) -13.79% Svc.MW Agreements 2,812,260 1,182,977 42.06% 1,629,283 1,267,281 (84,304) Subtotal 14,265,930 6,145,263 43.08% 8,120,667 7,023,304 (878,041) -12.60% Utilities Telephone 400,000 170,340 42.59% 229,660 151,285 19,055 12.60% Diesel For Generators 18,240 4.056 22.24% 14,184 5,711 (1,656) -28.98% Natural Gas 519,000 307,WS 59.17% 211,915 242,158 64,927 26.81% Power 61654,000 2,591.513 38.95% 4,062,487 3,623,124 (1,031,611) -28.47% Water 651,000 305,958 47.00% 345,042 314,900 (8,942) -2.84% Subtotal 8,242,240 3,378,952 41.00% 4,863,288 4,337,178 (958,226) -22.09% Other Operating Supplies Outside Equip Rental 139,600 35,852 25.68% 103,748 5,919 29,933 505471% Insurance Premiums 32,000 31,049 97.03% 951 31,386 (337) -1.07% Prop B Gen Llab Insurance 1,111,100 555,552 50.00% 555,548 247,998 307,556 124.01% Freight 70.030 35,151 50.19% 34,879 39,738 (4,587) -11.54% Misc.Operating Expense 207,310 105,433 50.86% 101,877 115,106 (9,673) -8.40% Regulatory Dial Fees 715,900 139,093 19.43% 576,807 637,682 (498,489) -78.18% Subtotal 2,275,940 902,130 39.64% 1,373,810 1,077,729 (175,599) -16.29% General Mgr Contingency S Reappropriations 1,015,700 0.00% 1,015,700 N/A Other Non-Oper Expense Others 113,530 W,811 27.14% 82,719 22,157 8,654 39.06% Subtotal 113,530 30,811 77.14% 82,719 22,157 8,654 39.06% Total Materials, Supplies S Services 76,248,750 32,559,175 42.70% 43,609,575 34,877,189 (2,318,014) Total Expenditures 165.538,550 77,089,911 46.57% 88,448,639 81,060,992 (3,971,081) 4.90% Cost Allocation (19,182,030) (9,476,871) 49.40% (9,705,159) (9,153,971) (322,900) 3.63% Net Operating Requirements $ 140.356,520 $ 67,613.040 46,20% $ 78,743.480 $ 71,907.021 $ i4,293,981) -5.97% Section 2-Page 7 2016-17 Mid-Year Report Summary of Collection,Treatment,8 Disposal Expenses by Process For the Six Months Ended December 31, 2016 Increase Increase Actual Actual (Decrease) (Decrease) 12/31/16 12/31/15 $ % Process: Preliminary Treatment $ 3,790,935 $ 4,356,349 $ (565,414) -12.98% Primary Treatment 5,018,856 6,049,026 (1,030,170) -17.03% Secondary Treatment 3,792,044 3,896,615 (104,571) -2.68% Cryogenic Plant(Plant 2) 289,718 389,023 (99,305) -25.53% Ef0uent Disposal 313,093 609,674 (296,581) -48.65% Solids Handling 22,753,395 23,627,692 (874,297) -3.70% Cogeneration 6,975,711 9,009,038 (2,033,327) -22.57% Utilities 1,413,404 1,451,895 (38,492) -2.65% Electrical Distribution 707,948 1,065,714 (357,765) -33.57% Miscellaneous Buildings 4,395,607 4,240,680 154,927 3.65% External Location 27,628 38,192 (10,564) -27.66% Nerlssa Vessel 113,056 102,352 10,703 10.46% North County Yard 2,079 37,504 (35,425) -94.46% Laboratory 7,241,498 6,262,185 979,313 15.64% Collections 10,778,070 10,771,083 6,988 0.06% Net Operating Requirements $ 67,613,040 $ 71,907,021 $ (4,293,980) -5.97% Section 2-Page 8 Operating Budget Review Staffing Trends Full Time Equivalents December 31, 2016 700 650 626 624 624 624 627 600 38 36 550 500 450 6/30113 6/30114 6/30/15 6130116 12131/16 8Actua1 8Va.a t At December 31, 2016,the total head count was 594 employees, or a full time equivalency of 582. Section 2-Page 9 2016-17 Mid-Year Report This Page Intentionally Left Blank Section 2- Page 10 CIP Budget Review Capital Improvement Program By Type and Funding Source For the Six Months Ended December 31, 2016 eColleotions Facilities: 36,7% eHaadweda, 5.1% ePdmary Treahnent 2.7% GSerondary TreatmenC 0.1% 11113olids Handling&Olgeatom 33.1% 00.a Outrall Systems: 7.5% ouelity systems: 1.6% MPmcess Related Special Prefects: 09% elnformatien Management Systems: 2 3% eStrategic&Master Planning: 2.3% eWater Management Projects: 0.4% eReseam6: 01% oSupppd Faaligam 09% eOthers: 0.0% ePrlor Year Treatment Protects: 0.3% eCapital Equipment Purchases 20% Total Capital Improvement Outlays - $59,018,230 ReplacemenVRehabilitation: 45% Improved Treatment: 15% ❑Additional Capacity: 36% 0!! ■Support: 4% Total Capital Improvement Outlays-$59,018,230 Section 3- Page 1 FY 2016-17 Mid-Year Report Summary of Capital Improvement Construction Requirements - Current Year For the Six Months Ended December 31, 2016 2016-17 2016-17 2016.17 Cashflow Actual at Projected Budget 1 213112 01 6 Outlay Collection System Improvement Proiects Collections Facilities Santa Ana Trunk Sewer Rehab. $ 74,119 $ 17,305 $ 41,900 Raitt and Bristol Street Sewer Rehab& Extension 204,379 - 196,600 Santa Ana River Interceptor(SARI) Realignment 562,271 35,622 73,300 SARI Rock Stabilizers Removal 312,927 9,023 242,500 Newhope-Placentia Trunk Grade Separation Replacements 934,520 7,192 37,300 Newhope-Placentia Trunk Replacement 7,181,679 9,126,938 16,384,800 Newhope-Placentia Trunk Replacement, Segment B 13,762,266 2,172,924 2,173,000 Lakeview Grade Separation Project 154,706 - 80,200 Tustin Rose OCTA Grade Separation Project 71,317 132,287 132,300 Seal Beach Pumping Station Upgrade and Rehabilitation 5,964,626 660,411 3,042,400 Rehabilitation of Western Regional Sewers 16,018,059 2,009,451 7,137,300 Doig Drive Building Improvements - - 173,600 Newport Force Main Rehabilitation 5,903,015 1,309,508 1,333,900 Bay Bridge Pumping Station Replacement - 91,168 91,200 District 6 Trunk Sewer Relief 4,623,818 209,852 979,800 Southwest Costa Mesa Trunk 876,199 199,083 199,100 Gisler-Redhill System Improvements, Reach "B" 11,951,892 5,401,542 11,209,200 Gisler Red-Hill Interceptor Rehabilitation 102,511 - 46,700 Master Facilities Engineering Projects-Collections 1,429,603 92,390 1,194,400 Master Planning Studies-Collections 2,748,262 66,589 66,600 Bay Bridge Pump Station and Force Mains Rehab Study 361,019 51,612 61,200 Additional Charges to CIP Closed at 6/30/16 19,447 19,500 Subtotal -Collections Facilities 73,237,188 21,612,344 44,916,800 Revenue Area 14 Newport Force Main Rehabilitation (2.18%) 131,554 29,183 29,800 Subtotal -Revenue Area 14 131,554 29,183 29,800 Total Collection System Improvement Projects 73,368,742 21,641,527 44,946,600 (Confined) Section 3-Page 2 CIP Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Six Months Ended December 31, 2016 2016-17 2016-17 2016.17 Cashflow Actual at Projected Budget 1 213112 01 6 Outlay Treatment&Disposal Projects Headworks Headworks Rehabilitation and Expansion at Plant 1 6,705,388 1,773,439 5,855,000 Truck Line Odor Control Improvements P1 3,244,621 1,158,329 1,317,100 Headworks Modifications at P2 for GWRS Final Expansion 62,608 168,100 Subtotal -Headworks 9,950,009 2,994,376 7,340,200 Primary Treatment Primary Clarifier&Trickling Filter Odor Control at P1 95,767 - 58,700 Plant No. 1 Primary Treatment Upgrades 293,871 156,059 175,400 Primary Clarifiers Repl & Impr at Plant No. 1 - 351,542 404,700 A-Side Primary Clarifiers Repl.at P2 1,684,096 1,083,650 3,650,300 Subtotal-Primary Treatment 2,073,734 1,591,251 4,289,100 Secondary Treatment Return Activated Sludge Piping Replacement Plant No.1 - - 24,600 Activated Sludge Aeration Basin Deck Repair at P2 295,085 67,944 82,500 Oxygen Plant Demolition at Plant No. 2 428,585 16,659 36,700 Subtotal -Secondary Treatment 723,670 84,603 143,800 Solids Handling & Digestion Digester Rehabilitation at Plant 1 4,754,023 4,769,978 5,978,300 Sludge Dewatering and Odor Control at Plant 1 18,460,389 6,122,425 12,043,300 Solids Thickening and Processing Upgrades 4,208,003 503,474 621,000 Sludge Dewatering and Odor Control at Plant 2 23,463,706 8,159,404 19,863,800 Subtotal -Solids Handling&Digestion 50,886,121 19,555,281 38,506,400 Ocean Outfall Systems Final Ef0uent Sampler and Building Area Upgrades 5,602,416 2,976,864 4,862,900 Ocean Outfall System Rehabilitation 4,648,804 1,394,818 4,136,400 Interplant Effluent Pipeline Rehabiliation 66,348 66,400 Subtotal -Ocean Outfall Systems 10,251,220 4,438,030 9,065,700 Utility Systems Cengen Cooling Water System Replacement - 6,114 9,700 Cengen Emissions Control Project 692,372 236,832 253,600 Digester Gas Facilities Rehabilitation 332,017 16,009 84,700 Natural Gas Pipelines Rapt at Plant No. 1 and 2 33,573 12,981 85,400 Plant Water System Rehabilitation at Plant No. 1 11,645 410 500 Plant Water System Rehabilitation at Plant No. 2 1,884 4,084 4,100 Consolidated Demolition&Utility Improvements at P2 1,081,187 645,733 1,088,000 Plant Air System Master Plan 45,061 (42) (100) Subtotal-Utility Systems 2,197,739 922,121 1,525,900 (Confined) Section 3-Page 3 FY 2016-17 Mid-Year Report Summary of Capital Improvement Construction Requirements - Current Year For the Six Months Ended December 31, 2016 2016-17 2016-17 2016-17 Cashflow Actual at Projected Budget 1 213112 01 6 Outlay Process Related Special Projects Safety Improvements at Plants Nos. 1 and 2 704,960 353,735 2,624,300 Odor Control Master Plan 585,791 166,595 626,000 Subtotal -Process Related Special Projects 1,290,751 520,330 3,250,300 Information Management Systems Programmable Control Panel Upgrade 74,645 21,348 62,200 Project Management Information System - - 137,500 Power Monitoring &Control Systems at P2 2,590,934 473,174 1,977,300 Master Information Technology Capital Program 502,307 423,587 437,800 Geographic Information System 616,445 379,135 409,200 EAM Software and Process Implementation 471,467 34,893 94,900 PDS2D Software Replacement 98,061 6,250 36,300 Process Control System Upgrades Study 1,348,089 5,234 222,600 Subtotal-Information Management Systems 5,701,948 1,343,621 3,377,800 Strategic& Master Planning Master Planning Studies 3,363,060 1,356,202 5,872,100 Subtotal-Strategic&Master Planning 3,363,060 1,356,202 5,872,100 Water Management Projects Ef0uent Reuse Study 1,104,241 239,243 239,300 Subtotal-Water Management Projects 1,104,241 239,243 239,300 Research Research Program 1,149,080 20,489 77,000 Fuel Cell Demo 16,644 12,925 13,000 SCCWRP Nutrient Cycling Sampling 42,659 - 7,000 AquaCrilox Evaluation/Design 255,469 54,680 131,900 Subtotal-Research 1,463,852 88,094 228,900 Support Facilities Master Facilities Engineering Projects- Plant 12,735,831 2,212,582 5,070,700 Master Small Capital Replacement/Rehabilitation 1,711,019 28,337 491,800 Title 24 Access Compliance&Building Rehab Project 3,816,143 553,493 2,128,100 Headquarters Complex, Site&Security&Entrance Realign. 5,951,410 95,456 1,909,700 Site and Security Improvements at Plant No.2 12,797 4,300 Subtotal-Support Facilities 24,227,200 2,889,868 9,604,600 (Continued) Section 3-Page 4 CIP Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Six Months Ended December 31, 2016 2016-17 2016-17 2016.17 Cashflow Actual at Projected Budget 12/31/2016 Outlay Others Capital Improvement Program Mgmt. Services 24,326 12 100 Subtotal-Others 24,326 12 100 Additional Charges to CIP Completed at 6/30/16 177,492 177,500 Total Treatment and Disposal Projects 113,257,871 36,200,524 83,621,700 Capital Equipment Purchases 3,682,780 1,176,179 3,682,800 Total Collection, Treatment and Disposal Projects and Capital Equipment Purchases 190,309,393 59,018,230 132,251,100 Less: CIP Savings and Deferrals (19,032,000) Net Collection,Treatment and Disposal Projects and Capital Equipment Purchases $171,277,393 $ 59,018,230 $132,251,100 Section 3- Page 5 FY 2016-17 Mid-Year Report Summary of Capital Improvement Construction Requirements- Project Life For the Six Months Ended December 31, 2016 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Collection System Improvement Prolects Collections Facilities Santa Ana Trunk Sewer Rehab. 6,974,000 6,686,800 41,900 6,728,700 245,300 Rai0 and Bristol Street Sewer Rehab&Extension 13,622,000 259,075 196,600 455,675 13,166,325 Santa Ana River Interceptor(SARI)Realignment 11,404,000 5,592,473 73,300 5,665,773 5,738,227 SARI Rock Stabilizers Removal 4,046,000 265,733 242,500 508,233 3,537,767 Taft Branch Sewer Relief 1,928,000 12,083 - 12,083 1,915,917 Newhope-Placentia Trunk Grace Separation Replacements 5,739,000 4,045,695 37,300 4,082,995 1,656,005 Newhope-Placentia Trunk Replacement 34,708,000 9,737,373 16,384,800 26,122,173 8,585,827 Newhope-Placentia Trunk Replacement,Segment 65,367,000 26,909 2,173,000 2,199,909 63,167,091 Yorba Linda Pumping Station Abandonment 7,053,000 - - - 7,053,000 Lakeview Grace Separation Project 330,000 68,892 80,200 149,092 180,908 Tustin Rose OCTA Grade Separation Project 586,000 283,638 132,300 415,938 170,062 Beach Trunk/Knott Interceptor Sewer Relief 118,678,000 - - - 118,678,000 Seal Beach Pumping Station Upgrade and Rehabilitation 60,840,000 2,073,689 3,042,400 5,116,089 55,723,911 Rehabilitation of Western Regional Sewers 217,069,000 2,518,370 7,137,300 9,655,670 207,413,330 Doig Drive Building Improvements 2,436,000 - 173,600 173,600 2,262,400 Newport Force Main Rehabilitation 62,604,800 56,646,974 1,333,900 57.980,874 4,623,926 Crystal Cove Pumping Station Rehabilitation 10,882,000 - - - 10,882,000 Bay Bridge Pumping Station Replacement 54,000,000 - 91,200 91,200 53,908,800 Newpod Beach Pump Stators Odor Control Improvements 4,066,000 - - - 4,066,000 District 6 Trunk Sewer Relief 7,965,000 1,421,400 979,800 2,401,200 5,563,800 Southwest Costa Mesa Trunk 29,650,000 1,747,830 199,100 1,946,930 27,703,070 Gisler-Redhill System Improvements,Reach"B" 25,213,000 6,299,980 11,209,200 17,509,180 7,703,820 Browning Subtrunk Sewer Relief 16,952,000 - - - 16,952,000 MacArthur Pumping Station Rehabilitation 8,762,000 - - - 8,762,000 Main Street Pump Station Rehabilitation 39,219,000 - - - 39,219,000 Gisler Red-Hill Interceptor Rehabilitation 5,486,000 - 46,700 46,700 5,439,300 EdingerBolsa China Trunk Improvements 5,159,000 - - - 5,159,000 Edinger Pumping Station Rehabilitation 8,880,000 - - - 8,880,000 Slater Avenue Pump Station Rehabilitation 9,729,000 - - - 9,729,000 Master Facilities Engineering Projects-Collections 12,192,000 1,199,298 1,194,400 2,393,698 9,798,302 Master Planning Studies-Collections 10,636,304 402,264 66,600 468,864 10,167,440 Bay Bridge Pump Station and Force Mains Rehab Study 725,000 341,878 61,200 403,078 321,922 Additional Charges to CIP Closed at 6/30116 19,500 19.500 (19,500) Subtotal-Collections Facilities 862,901,104 99.630,354 44,916,800 144,547,154 718,353,950 Revenue Area 14: Newport Force Main Rehabilitation(2.18%) 1,395,200 1,262,425 29,800 1,292,225 102,975 Subtotal-Revenue Area 14 1,395,200 1,262,425 29,800 1,292,225 102,975 Total Collection System Improvement Projects 864,296,304 100,892,779 44,946,600 145,839,379 718,456,925 (Continued) Section 3-Page 6 CIP Budget Review Summary of Capital Improvement Construction Requirements- Project Life For the Six Months Ended December 31, 2016 Current Total Approved June 30,2016 year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Treatment&Disposal Projects Headworks Headworks Rehabilitation and Expansion at Plant 1 274,841,000 2,433,404 5,855,000 8,288,404 266,552,596 Truck Line Odor Control Improvements P1 9,299,000 7,359,325 1,317,100 8,676,425 622,575 Headworks Modifications at P2 for GWRS Final Expansion 50,000,000 168,100 168,100 49,831,900 Subtotal-Headworks 334,140,000 9,792,729 7,340,200 17,132,929 317,007,071 Primary Treatment Primary Clarifier&Trickling Filter Odor Control at P1 94,228,000 - 58,700 58,700 94,169,300 Plant No.1 Primary Treatment Upgrades 9,146,000 8,118,861 175,400 8,294,261 851,739 Primary Clarifiers Repl&Impr at Plant No.1 158,332,000 - 404,700 404,700 157,927,300 A-Side Primary Clarifiers Repl.at P2 428,264,000 978,734 3,650,300 4,629,034 423,634,966 Subtotal-Primary Treatment 689,970,000 9,097,595 4,289,100 13,386,695 676,583,305 Secondary Treatment Return Activated Sludge Piping Replacement Plant No.1 3,300,000 - 24,600 24,600 3,275,400 Activated Sludge Aeration Basin Deck Repair at P2 2,331,000 55,798 82,500 138,298 2,192,702 Oxygen Plant Demolition at Plant No.2 3,4",000 2,816,671 36,700 2,853,371 590,629 Subtotal-Secondary Treatment 9,075,000 2,872,469 143,800 3,016,269 6,058,731 Solids Handling It Digestion Digester Rehabilitation at Plant 1 67,150,000 57,765,401 5,978,300 63,743,701 3,406,299 Sludge Dewatering and Odor Control at Plant 1 188,328,000 152,105,764 12,043,300 164,149,064 24,178,936 Solids Thickening and Processing Upgrades 51,150,000 46,778,286 621,000 47,399,286 3,750,714 Plant No.2 Digester Faalifies Rehabilitation 49,220,000 152,343 - 152,343 49,067,657 Sludge Dewatering and Odor Control at Plant 2 90,4T/,000 25,961,621 19,863,800 45,825,421 44,651,579 Subtotal-Solids Handling&Digestion 446,325,000 282,763,415 38,506,400 321,269,815 125,055,185 Ocean Outrall Systems Final Effluent Sampler and Building Area Upgrades 16,411,000 11,079,895 4,862,900 15,942,795 468,205 Ocean Outfall System Rehabilitaton 91,000,000 3,043,856 4,136,400 7,180,256 83,819744 Interplant Effluent Pipeline Rehabilimon 25,200,000 66,400 66,400 25,133,600 Subtotal-Ocean Outfall Systems 132,611,000 14,123,751 9,065,700 23,189,451 109,421,549 Utility Systems Cengen Cooling Water System Replacement 11,4T,000 11,374,655 9,700 11,384,355 92,645 Cengen Emissions Control Project 23,820,000 21,945,471 253,600 22,199,071 1,620,929 UPS System Upgrades 8,087,000 - - - 8,087,000 Digester Gas Facilities Rehabilitation 87,897,000 9,458 84,700 94,158 87,802,842 Natural Gas Pipelines Repl at Plant No.1 and 2 1,310,000 2,282 85,400 87,682 1,222,318 Electrical Power Distribution System Improvements 34,608,000 - - - 34,608,000 Plant Water System Rehabilitation at Plant No.1 6,157,000 6,113,517 500 6,114,017 42,983 (Continued) Section 3-Page 7 FY 2016-17 Mid-Year Report Summary of Capital Improvement Construction Requirements- Project Life For the Six Months Ended December 31,2016 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Utility Systems(continued) Central Generation Rehab at Plant No. 1 73,151,000 - - - 73,151,000 Plant Water System Rehabilitation at Plant No.2 3,704,000 3,737,750 4,100 3,741,850 (37,850) Consolidated!Demolition 8 Unity Improvements at P2 38,460,000 3,205,873 1,088,000 4,293,873 34,166,127 Central Generation Rehab at Plant No.2 95,906,000 - - - 95,906,000 Plant Air System Master Plan 225,000 187,096 (100) 186,996 38,004 Subtotal-Utility Systems 384,802,000 46,576,102 1,525,900 48,102,002 336,699,998 Process Related Special Projects Safety Improvements at Plants Nos.1 and 2 9,702,000 202,858 2,624,300 2,827,158 6,874,842 Odor Control Master Plan 1,950,000 1,233,922 626,000 1,859,922 90,078 Subtotal-Process Related Special Projects 11,652,000 1,436,780 3,250,300 4,687,080 6,964,920 Information Management Systems Process Control Systems Upgrades 102,399,000 - - - 102,399,000 Programmable Control Panel Upgrade 2,283,000 1,785,807 62,200 1,848,007 434,993 Project Management Information System 4,000,000 - 137,500 137,500 3,862,500 Power Monitoring 8 Control Systems at P2 34,123,000 604,790 1,977,300 2,582,090 31,540,910 Master information Technology Capital Program 10,000,000 - 437,800 437,800 9,562,200 Geographic Information System 4,568,000 1,947,390 409,200 2,356,590 2,211,410 EAM Software and Process Implementation 7,500,000 4,700,097 94,900 4,794,997 2,705,003 PDS2D Software Replacement 525,0D0 342,351 36,300 378,651 146,349 Process Control System Upgrades Study 3,554,000 222,600 222,600 3,331,400 Subtotal-Information Management Systems 168,952,000 9,380,435 3,377,800 12,758,235 156J93,765 Strategic S Master Planning Master Planning Studies 13,015,696 1,190,605 5,872,100 7,062,705 5,952,991 Climate Change Impact Study 590,000 590,000 Subtotal-Strategic B Master Planning 13,605,696 1,190,605 5,872,100 7,062,705 6,542,991 Water Management Projects Effluent Reuse Study 3,250,OD0 2,529,365 239,300 2,768,665 481,335 Subtotal-Water Management Projects 3,250,OD0 2,529,365 239,300 2,768,665 481,335 Research Research Program 8,500,000 - 77,000 77,000 8,423,000 Fuel Cell Demo 135,000 118.192 13,000 131,192 3.808 SCCWRP Nutrient Cycling Sampling 95,000 71,250 7,000 78,250 16,750 AquaCritox Evaluation/Design 588,000 402.510 131,900 534,410 53,590 Subtotal-Research 9.318,000 591.952 228,900 820,852 8,497,148 (Continued) Section 3-Page 8 CIP Budget Review Summary of Capital Improvement Construction Requirements- Project Life For the Six Months Ended December 31, 2016 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Support Facilities Master Facilities Engineering Projects-Plant 43,325,000 7,856,037 5,070,700 12,926,737 30,398,263 Master Small Capital ReplacementlRembilitation 15,622,000 2,065,761 491,800 2,557,561 13,064,439 Title 24 Access Compliance&Building Rehab Project 17,509,000 12,967,931 2,128,100 15,096,031 2,412,969 Headquarters Complex,Site&Security&Entrance Realign. 179,067,000 169,006 1,909700 2,078,706 176,988,294 Site and Seventy Improvements at Plant No.2 252,000 227,660 4,300 231,960 20,040 Subtotal-Support Facilities 255,775,000 23,286,395 9,604,600 32,890,995 222,884,005 Others Banning Gate Relocation&Grading at Plant No.2 2,812,000 227,660 - 227,660 2,584,340 Capital Improvement Program Mgmt.Services 300,000 9,591 100 9,691 290,309 Subtotal-Others 3,112,000 237,251 100 237.351 2,874,649 Additional Charges to CIP Completed at 6130116 177,500 177,500 (177,500) Total Treatment and Disposal Projects 2,462,587,696 403,818,844 83,621,700 487,500,544 1,975,087,152 Capital Equipment Purchases 16,000,000 7,083,097 3,682,800 10,765,897 5,234,103 Total Collection,Treatment and Disposal Projects and Capital Equipment Purchases $3,342,884,000 $511,854,720 $132,251,100 $644,105.820 $2,698,778,180 Section 3-Page 9 FY 2016-17 Mid-Year Report This Page Intentionally Left Blank Section 3- Page 10 Capital Assets Schedule & Debt Service Budget Review Capital Assets Schedule For the Six Months Ended December 31,2016 Capital Facilities Budget Review Balance Year-to-Date Balance 07/01/16 Additions 12/31/16 CONSTRUCTION IN PROGRESS: Treatment Plant $ 405,065,130 $ 37,376,703 $ 442,441,833 Collection System 94,310,929 21,641,527 115,952,456 Subtotal 499,376,059 59,018,230 558,394,289 PROPERTY, PLANT&EQUIPMENT(at cost): Land and Property Rights 15,959,559 - 15,959,559 Collection Lines and Pump Stations 781,138,758 - 781,138,758 Treatment Facilities 2,278,136,004 - 2,278,136,004 Effluent disposal facilities 97,014,820 - 97,014,820 Solids disposal facilities 3,463,236 - 3,463,236 General and administrative facilities 229,446,444 - 229,446,444 Excess purchase price over book value on acquired assets 19,979,000 19,979,000 Subtotal 3,425,137,821 3,425,137,821 Total Property,Plant&Equipment&CIP $ 3,924.513,880 $ 59,018,230 $ 3,983.532,110 Debt Service Budget Review 2016-17 Year-to-Date Remaining Budget Payments %of Budget Budget Principal Payments by Debt Issue: 2007A COP 265,000 - 0.00% 265,000 2007B COP 7,110,000 - 0.00% 7,110,000 2008B COP 8,815,000 8,815,000 100.00% - 2009ACOP 4,250,000 - 0.00% 4,250,000 2010A BABs - - 0.00% - 2010C BABs - - 0.00% - 2011ACOP 15,135,000 15,135,000 100.00% - 2012ACOP - - 0.00% - 2012BCOP - - 0.00% - 2014ACOP - - 0.00% - 2014BCANs 7,827,411 120,850,000 1543.93% (113,022,589) 2015A COP - - 0.00% - 2016ACOP - - 0.00% - 2016B COP 0.00 Subtotal Principal Payments 43,402,411 144,800,000 333.62% (101,397,589) Interest Expense by Debt Issue: 2007A COP 4,108,278 2,054,139 50.00% 2,054,139 2007B COP 355,500 177,750 50.00% 177,750 2008B COP 132,225 22,025 16.66% 110,200 2009A COP 585,250 292,625 50.00% 292,625 2010A BABs 2,897,639 2,107,769 72.74% 789,870 2010C BABs 6,523,780 4,745,475 72.74% 1,778,305 2011ACOP 4,774,725 2,261,250 47.36% 2,513,475 2012A COP 3,735,900 1,867,950 50.00% 1,867,950 2012E COP 3,187,400 1,593,700 50.00% 1,593,700 2014A COP 4,254,500 2,127,250 50.00% 2,127,250 2014B CANS 496,694 1,624,711 327.11% (1,128,017) 2015A COP 6,375,500 3,187,750 50.00% 3,187,750 2016A COP 5,833,798 3,493,448 59.88% 2,340,350 2016B COP 617,967 N/A (617,967) Subtotal Interest Expense 43,261,189 26,173,809 60.50% 12,177,247 Total Debt Service $ 86,663,600 $ 170,973,809 197.28% $ (89,220,342) Section 4- Page 1 2016-17 Mid-Year Report This Page Intentionally Left Blank Section 4 - Page 2 Self Insurance Budget Review General Liability and Property Fund Budget Review For the Six Months Ended December 31,2016 Percent Actual of Budget Remaining Actual 2016-17 Through Through 2016-17 Through Increase Budget 12/31/16 12/31/16 Budget 12/31/15 (Decrease) Revenues: In-Lieu Premiums $ 1,111,100 $ 555,552 50.00% $ 555,548 $ 247,998 $ 307,554 Service Department Allocations 18,700 9,348 49.99% 9,352 2,748 6,600 Total Revenues 1,129,800 564,900 50.00% 564,900 265,080 299,820 Expenses: Benefits/Claims 40,000 667,161 1667.90% (627,161) 13,549 653,612 Legal Services 130,000 72,136 55.49% 57,864 28,905 43,231 Professional Services 25,976 N/A (25,976) 25,976 Subtotal 170,000 765,273 450.16% (595,273) 42,454 722,819 Policy Premium Expense 1,220,000 585,721 48.01% 634,279 580,262 5,459 Total Expenses 1,390,000 1,350,994 97.19% 39,006 622,716 728,278 Excess Revenue(Expense) (260,200) (786,094) $ 525,894 (357,636) (428,458) Beginning Reserves 55,260,200 55,252,299 56,125,515 (873,216) Ending Reserves $55, 000,000 $ 54, 666 205 $ 55, 667,879 $(1,301,674) Section 5-Page 1 FY 2016-17 Mid-Year Report Workers' Compensation Fund Budget Review For the Six Months Ended December 31, 2016 Percent Actual of Budget Remaining Actual 2016-17 Through Through 2016-17 Through Increase Budget 12/31/16 12/31/16 Budget 12/31/15 (Decrease) Revenues: In-Lieu Premiums $ 1,196,300 $ 598,150 50.00% $ 598,150 $ 739,350 $ (141,200) Miscellaneous Other Revenue 10,000 - 0.00% 10,000 - - Total Revenues 1,206,300 598,150 49.59% 608,150 739,350 (141,200) Expenses: Benefits/Claims 660,000 137,622 20.85% 522,378 433,699 (296,077) Legal Services 170,000 23,875 14.04% 146,125 124,201 (100,326) Professional Services 60,000 36,232 60.39% 23,768 35,947 385 Subtotal 890,000 197,729 22.22% 692,271 593,747 (396,018) Policy Premium Expense 200,000 104,413 52.21% 95,587 97,169 7,244 Total Expenses 1,090,000 302,142 27.72% 787,858 690,916 (388,774) Excess Revenue(Expense) 116,300 296,008 $ (179,708) 48,434 247,574 Beginning Reserves 1,883,700 1,913,178 1,523,264 389,914 Ending Reserves $ 2,000,000 $ 2,209,186 $ 1,571.698 $ 637,488 Section 5-Page 2 'e? Op January 31, 2017 STAFF REPORT Mid-Year Treasurer's Report For the Period Ended December 31, 2016 SUMMARY Section 15.0 of the District's Investment Policy includes quarterly reporting requirements for the District's two investment portfolios. These two funds, the "Liquid Operating Monies," and the "Long-Term Operating Monies" are managed by Chandler Asset Management, the District's external money manager. The ongoing monitoring of the District's investment program by staff and Callan Associates, the District's independent investment advisor, indicates that the District's investments are in compliance with the District's adopted Investment Policy and the California Government Code, and that overall performance has tracked with benchmark indices. In addition, sufficient liquidity and anticipated revenues are available for the District to meet budgeted expenditures for the next six months. The District's portfolios do not include any reverse repurchase agreements or derivative securities. ADDITIONAL INFORMATION Performance Reports The Quarterly Strategy Review, prepared by Chandler Asset Management, and the Investment Measurement Service Quarterly Review, prepared by Callan Associates, is attached for reference. Also attached are Long-Term and Liquid Operating Monies Summary of Performance Data and Portfolio Statistics charts that depict the performance results, estimated yield and duration, credit quality, and sector diversification of the District's portfolios, as of December 31, 2016. The Liquid Operating Monies portfolio, with an average maturity of 51 days, consists entirely of high quality fixed income investments consistent with the District's investment policy. Portfolio Performance Summary The following table presents a performance summary of the District's portfolios as compared to their benchmarks for the period ended December 31, 2016. ODSD ♦ P.0.Box8127 ♦ Foun in Velley,C 9272M127 ♦ (714)%2-2411 Mid-Year Treasurer's Report For the Period Ended December 31, 2016 Page 2 of 3 Portfolio Performance Summary As of December 31,2016 Liquid Operating Monies(h) Long-Term Operating Monies(%) Total Rate of Total Rate of Return Benchmark(" Return BenchmmriN' 3 Months 0.12 0.09 -0.84 -1.06 6 Months 0.22 0.18 -0.78 -1.12 9 Months 0.31 0.25 -0.07 -0.26 12 Months 0.48 0.33 1.47 1.30 Annualmed Since inception 30 Nov M14 0.34 0.18 1.01 0.98 Market Value 113oM $316.61A Average Quality "AAA"rAea" "AA+yAai- Current Yield(%) 0.8 1.7 Estimated Yield to Maturity(%) 0.6 1.5 Quarterly Deposits ilhdmwals 55oM ( 71-M Estimated Annual Income O.BM T5.0M (1) Benchmarks: • Liquid Operating Portfolio: 3-Month Treasury Bill Index • Long-Tenn Operating Portfolio: Merrill Lynch Corp/Govt. 1-5 Year Bond Index Portfolio Market Values Comparative marked-to-market quarter-end portfolio values are shown in the following table, and in the attached bar chart. Liquid Long-Tenn Quarter Operating Operating Ending Monies($M) Monies($M) 31 Mar.16 63.8 319.6 30 Jun.16 139.4 332.7 30 Sep.16 58.0 325.9 30 Dec.16 113.0 316.E District's Investment Account Balances as of December 31, 2016 Book Balances Estimated Investment Accounts December 31,2016 Yield(%) State of Calif.LAIF $62,400,000 0.72 Union Bank Checking Account 132,512 0.00 Union Bank Overnight Sweep Account 87,000 0.01 Union Bank W/C Checking 89,873 0.00 Chandler-Short-term Portfolio 112,898,829 0.55 Chandler-Long-term Portfolio 315,497,191 1.51 Petty Cash 3,000 N/A BNY Mellon OCIP Reserve 3.614.750 0.87 TOTAL ^ga 7 a 15 1.19 Debt Service Reserves w/Trustees A 22 066.544 2.58 Mid-Year Treasurer's Report For the Period Ended December 31, 2016 Page 3 of 3 District's Cost of Funds on Debt Issues as of December 31, 2016 Annual CostofFwds Outstanding Interest Issue Description COP Balance Rate(%) 2007A Fixed $91,885,000 4.50 2007B Fixed 7,110,000 4.71 2009A Fixed 13,405,000 4.72 2010A Fixed 80,000,000 3.68 2010C Fixed 157,000,000 4.11 2011A Fixed 96,330,000 2.61 2012A Fixed 100,645,000 3.54 2012B Fixed 66,395,000 1.50 2014A Fixed 85,090,000 2.34 2015A Fixed 127,510,000 3.30 2016A Fixed 145,880,000 3.02 2016D Fixed 109.875 000 0.87 TOTAL $I.ORI.125.0011 Weighted Avg.Cost of Fords 3.06 ATTACHMENTS 1. Chandler Quarterly Report 2. Summary of Performance Data and Portfolio Statistics — Liquid Operating Monies 3. Summary of Performance Data and Portfolio Statistics— L-T Operating Monies 4. Investment Transactions and Balances in LAIF 5. Asset Summary by Asset Type — Liquid Operating Portfolio 6. Asset Summary by Asset Type— Long Term Portfolio 7. Asset Summary by Asset Type — Owner Controlled Insurance Program Escrow Account 8. Investment Listing (Yield Analysis Report) 9. Asset Detail — Consolidated 10. Custody Transaction History—Consolidated 11. Callan Quarterly Review 12. Chandler Quarterly Review 13. Rating Agency Comparisons C/" CHANDLER ASSET MANAGEMENT December 31, 2016 Mr. Mike White, CPA Controller Orange County Sanitation District 10844 Ellis Avenue Fountain Valley CA 92708-7018 Dear Mike, Bond Market Recap The Federal Open Market Committee (FOMC) unanimously voted to increase the target fed funds rate by 25 basis points to a range of 0.50%-0.75%, at the December 14 meeting. The Fed noted that economic activity has expanded at a moderate pace and labor market trends have improved, but inflation remains below target. The Fed's revised "dot plot" was slightly more hawkish, as the projected path of the fed funds rate was revised upward. The Committee's GDP and inflation forecasts were little changed while projections for the unemployment rate were revised down slightly. The FOMC's median projection for the fed funds rate in 2017 was revised up to 1.4% from 1.1%, which would be indicative of two or three more 25 basis point rate hikes this year. The Fed's longer-run median fed funds target rate was revised up to 3.0% from 2.9%. Fed Chair Yellen downplayed the forecast changes during her post-meeting press conference, and continued to emphasize that future increases in the fed funds rate are expected to be gradual. She added that it is too early to anticipate how potential changes in fiscal policy will impact the economy and the Fed's outlook. The market is now pricing in more than a 70% chance of another rate hike in June 2017. Domestic economic data points to ongoing moderate growth this year. The U.S. labor market continues to improve, consumer confidence remains strong, and housing trends remain mostly favorable. The manufacturing sector has also improved. Market participants estimate GDP grew 2.2% in the fourth quarter. In December, the yield shifted upward as the 2-year Treasury yield increased nearly 8 basis points and the 10-year Treasury yield increased about 6 basis points. The move up in rates over the past few months has largely been driven by heightened expectations for fiscal stimulus, and a potential increase in inflation, in light of President-elect Trump's victory and the Republican Party congressional sweep in the US. C/" CHANDLER ASSET MANAGEMENT Consumer Prices The Consumer Price Index (CPI) was up 1.7% year-over-year in November, versus up 1.6% year-over-year in October. Core CPI (CPI less food and energy)was up 2.1% year-over-year in November, unchanged from October. The Personal Consumption Expenditures (PCE) index was up 1.4% year-over-year in November, unchanged from October. Core PCE (excluding food and energy) was up 1.6% year-over-year in November, after being up 1.8% year-over-year in October. Although Core CPI is trending above 2.0%, the Fed's primary inflation gauge is PCE which remains below the Fed's 2.0%target. Retail Sales On a year-over-year basis, total retail sales were up 3.8% in November compared with a 4.2% increase in October. On a month-over-month basis, retail sales were up just 0.1% in November, below expectations of 0.4%. Excluding autos and gas, retail sales rose 0.2% in the month. Labor Market Nonfarm payrolls were lower than expected in December, up 156,000 versus the consensus forecast of 175,000. However, October and November payrolls were revised up by a total of 19,000. On a trailing 3-month and 6-month basis, payrolls increased by an average of 165,000 and 188,500 per month, respectively. The unemployment rate inched back up to 4.7% from 4.6%, but the participation rate also increased to 62.7% from 62.6%. A broader measure of unemployment called the U-6, which includes those who are marginally attached to the labor force and employed part time for economic reasons, declined to 9.2% in December from 9.3% in November. Wages were up a solid 0.4% in December, versus expectations for a 0.3% increase. On a year-over-year basis, wages were up 2.9% in December (the highest year-over- year increase since June 2009), vs. 2.5% in November. Housing Starts Total housing starts fell 18.7% in November, following a gain of 27.4% in October. Single-family starts fell 4.1% in November while multi-family starts plunged 45.1%. Housing starts tend to be volatile on a month-to-month basis. 2 C/" CHANDLER ASSET MANAGEMENT TREASURY YIELDS 1213112016 9/30/2016 CHANGE 3 Month 0.50 0.28 0.22 2 Year 1.19 0.76 0.43 3 Year 1.45 0.88 0.57 5 Year 1.93 1.15 0.78 7 Year 2.25 1.42 0.83 10 Year 2.45 1.60 0.85 30 Year 3.07 2.32 0.75 Economic Data Points to Continued Slow Growth ECONOMIC INDICATOR Current Release Prior Release One Year Ago Trade Balance (45.2)$Bin NOV 16 (42A)$Bin OCT 16 (41.1)SBIn NOV 15 GDP 35%SEP 16 1.4%JUN 16 2.0%SEP 1S Unemployment Rate 4.7%DEC 16 4.6%NOV 16 5.0%DEC 15 Prime Rate 3.75%DEC 16 3.50%NOV 16 3.50%DEC 15 CRB Index 192.51 DEC 16 189.31 NOV 16 176.14 DEC 15 Oil(West Texas Int.) $53.72 DEC 16 549.44 NOV 16 $37.04 DEC 1S Consumer Price Index(y/o/y) 1.7%NOV 16 1.6%OCT 16 0.5%NOV 15 Producer Price Index(y/o/y) 03%NOV 16 0.6%OCT 16 (33%)NOV1S Dollar/Euro 1.05 DEC 16 1.06 NOV 16 1.09 DEC 15 Source.Bloomberg 3 C/" CHANDLER ASSET MANAGEMENT Performance Attribution Long-Term Portfolio The long-term portfolio produced a negative absolute return but a positive relative return of 0.22% during the quarter. The quarterly return for the portfolio was (0.84%) versus (1.06%) for the Bank of America Merrill Lynch 1-5 Year AAA-A US Corporate and Government Index. The primary driver of the positive performance differentiation of the portfolio versus the benchmark was the lower than benchmark interest rate exposure of the portfolio. As market interest rates moved higher late in the quarter the Chandler team moved to tighten the duration differential versus the benchmark; the team anticipates further lengthening the maturity profile of the portfolio during the first quarter of 2017. The Chandler team added exposure to the portfolio in the Treasury, Supranational, and Commercial Paper sectors of the market during the quarter. The Agency market has become very expensive in our judgement and the team is finding better value in the Supranational and by default the Treasury sector. Although the regulatory change specific to prime money market funds has taken place, the team is still finding the Commercial Paper market to be somewhat dislocated and thus we continue to allocate to the sector in the front end of the curve. The duration of the portfolio increased to 2.48 compared to 2.38 at the end of September; in Chandler's judgement the market is currently pricing in a reasonable expectation for a tightening of monetary policy in 2017 thus the overall interest rate sensitivity of the portfolio is likely to increase to be closer to the benchmark in the upcoming quarter. Liquid Portfolio The liquidity portfolio modestly outperformed the benchmark during the quarter, generating a return of 0.12% compared to 0.09% for the Bank of America Three Month Treasury Bill Index. The portfolio experienced large cash flows, both positive and negative, and the Chandler team worked to position the portfolio for upcoming liquidity needs in January 2017 and beyond. Many securities were purchased across the Treasury, Agency, Supranational, Yankee CD, and Commercial Paper sectors to offset upcoming liquidity needs first and secondarily to attempt to enhance the overall yield of the portfolio with attractively valued longer maturity securities. 4 C/" CHANDLER ASSET MANAGEMENT Economic Outlook The US Presidential election results were a surprise to markets and materially repriced the domestic interest rate market higher. During the fourth quarter the two year Treasury note yield moved higher by 43 basis points, to 1.19%, while the five year Treasury note moved higher by 78 basis points, to 1.93. The Federal Reserve was also finally able to tighten monetary policy, raising interest rates by 25 basis points on December 14. Post the election results, the outlook for risk assets improved as most market participants lowered the probability of a recession over an intermediate time horizon given the more positive outlook on a tax policy and higher probability of additional domestic fiscal spending. In Chandlers judgement the market got ahead of itself with the strong risk asset performance and aforementioned adjustment in interest rates; the Chandler team will be looking for some consolidation of performance in both the fixed income and equity markets during the first quarter of 2017. Monetary policy is poised to continue to normalize, with rates moving higher, but the Chandler team anticipates the process will continue to be slow. Currently the team is anticipating two rate hikes in 2017, with the timing likely in June and close to year-end. Economic activity in overseas markets remains lackluster, however if the team were to observe an uptick in economic activity in the Eurozone and/or Japan it would lead us to adjust our expectations for a quicker pace of domestic monetary policy normalization. Chandler continues to have the view the terminal fed funds rate will be low, despite the forecasted lowering of the tax rate and potential fiscal stimulus. Specific to domestic fiscal stimulus, the impact to the domestic economy is more likely to be a 2018 event as it takes time to put the necessary plans in place, in our judgement. Overall the team expects interest rates to be modestly higher on a year-over- year basis; the team is more willing to allocate monies to longer maturity assets given the large adjustment to domestic interest rates during the fourth quarter. Strategy Strategy highlights for the Long-Term Portfolio in coming months: • Continue to optimize the overall term structure positioning of the portfolio by closing some of the large deviations relative to the benchmark. The market is pricing in a realistic probability of monetary policy tightening in 2017 and thus the duration shortfall relative to the benchmark will lessen. • Opportunistically increase the Corporate and Supranational exposure of the portfolio to enhance the total return opportunity of the strategy. o The focus of the Corporate allocation will continue to be both sector diversification and relative valuation. o The Agency sector is expensive (i.e. tight spreads) thus we are allocating more monies to the more attractively valued Supranational sector. • Utilize out of benchmark allocations to the Asset Backed and Commercial Paper sectors of the market to enhance the overall credit quality and return potential of the portfolio. 5 OIL CHANDLER ASSET MANAGEMENT Strategy highlights for the Liquidity Portfolio in coming months: • Continue to ladder the Agency discount note and Treasury exposure to correspond to upcoming liquidity needs. • Periodically add to the Corporate exposure of the portfolio between maturities of six months to one year, where the additional spread to the Treasury curve is compelling. • Maintain a dedicated exposure to the Treasury sector on an ongoing basis to ensure ample liquidity in the portfolio at all times. 6 C/" CHANDLER ASSET MANAGEMENT Compliance issues Orange County Sanitation District Long Term OL December31,2016 COMPLIANCE WITH INVESTMENT POLICY A sm(s manegetl by CheMlerAsset Management are in lull compliance adh Stele larvantl wlh ma invesenentpolicy Cattail 1iY1tl•Rr Comment Treasuryksues 5 years maximum matuty, Complies' Supramtioml "AA'orbetlerbyf of3 NRSROs, 30%maximum; 5%maxissuar, 5 years maWlty, Complies includesori ADB 13RD end FC drCGC U.S.Agencies 20%max issuer, 5 years maximum maturty, Complies U.S.Corporate(MTNs) Wor better long term rating by l of 3 NRSROs; 3090 maxim um;5%max issuer, 5 years Complies max maturity Municipal Securities 'A'or Ngher by l of 3 NRSROS;10%maxi main; 5%max issuer 5years maximum maturity Complies Asset Barked/CM Os/Mortgage- 'AA- r better by 10f3 NRSROS; 'A'or lighin-usuar rating by 1 of 3 NRSROs, 20% Complies' backed maximun; 5%max issuer(excluding MBS/ oMe erc 'S years max maturtV Negotiable CDs W'orbederon its longterm debt byt of3 NRSROs; "At/P1"or highest shod ten ratings Complies by 1 of3 NRSROs; 30%maximum,5%max issuer, 5 years max maturity CDs/TDS 5%max issuer, 5 years max maturity Complies Bankers Acceptances A-1,or equrvslent Mg hest short ten ailing by l of 3 NRSROS, 40%maximum; 5%max Complies issuer,180 days max maturity Commercial Paper A-1,oreguNelert by l of3 NRSROS; 'A'orbeterby l of3 NRSROs,iflorg term debt Complies issued; 25%maximum' 5%max issuer, 270 days max matunly Morley Merkel Fund Highestmtingby2o13NRSR0s; 2094,maximtm;10%maxissuer Complies Repurchase Agaiemerts 1029bcolletersh ation Complies Reverse Repumhase Agreements 5%maximum,90 days max malurily Complies tAF Not wed byimeshoe I adeser Complies Avg Duration Not W exceed 60 mortis - (80%to 120%ofthe benchmark) Complies Maximum Maturity 5 Wars maximum maturity Complies' `m¢ownto RE rearyaxr(24)wonles An marries geaatten 6yeas lmlllmm ere(1)A93.Ar¢t0]Gauze SPbe0.Yl(17)M9S silo OM(1)testeOa'. All ss UMft A.IMeMe,"m me p2m0us mareper and t.ow at time Mpumnes¢. 7 C/" CHANDLER ASSET MANAGEMENT Orange County Sanitation District Liquid Degember31,2018 COMPLIANCEe Assets managed by Chandler Asset Management are in full oomplonce wm State lawand win the mvestmentpolicy Category Standard Comment Treasury bsues l year maximum maturity; Minimum allocation of 10% Complies Stpmnaiorel "AA"or better by 1 of 3 NRSROs; 30%maxim=; 5%max issuer, l year matrix Complies Includes only: lADB,IBRD and IFC per CGC U.S.Agencies 20%max issuer; l year maximum maturity Complies" U.S.Corporate(MTNs) "A"orbe0erbngtermmtlrgbyl of3NRSROs;30%maximum;5%maxiseuer; I Compiles War max maturity Asset Backed/CMOs "AA"or better by t of 3 NRSR0%V or bli issuer rating by l of 3 NRSROs; Complies 20%maximum 5%max issuer 1 War max maturity Negotiable CDs "A"or better on it long term debt by of3 NRSROsp "AIM1"or highest shottenm Complies ratings by 1 of 3 NRSROs; 30%maximum;5%max issuer,1 year max matutty CDSITDS 5%max issuer,l year max maturity Complies Bankers Acceptances A-1,orequivalent short term mi by l of3 NRSROS;40%maximum;5%max Complies issuar 180 days max maturity Commercial Paper A-1,orequivalent by l of 3 NRSROS;"A"or better by l of3 NRSROs,if long term Complies debt issued; 25%maximum;5%max issuer 270 days max maturity Money MaroetFund Higheslmtirgby2of3NRSROs; 20%maximu ;10%maxisscer Complies Repurchase Agreements 102%collatemiimtion Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAIF Not used by invesbranlarMser Complies Prohibited Municipal Securities Complies Prohibited Mortgage Securities Complies Avg Duration Nottoexceed180days; Max duration of 1/2 year Complies Maximum Maturity 1 year maximum mahrity Complies Matt iasuxcaniNlea on a cmadMaled basis 8 C/" CHANDLER ASSET MANAGEMENT C/" OCSD Lehman Exposure December 31,2016 COMPLIANCE WITH INVESTMENT POLICY Assets managed by Chandler Asset Management are in full compliance with State lawand vith the investment policy Category Standard Comment Treasury Issues 5 years maximum maturity Complies Supranabonzl "AA"or better by of 3 Ni 30%maximum; 5%max; 5years Complies maturitf, Includes only LADS,BRD,and IFC per CGC U.S.Agencies 20%max issuer 5 years maximum maturity Complies U.S.Corporate(Mi "A"or better long term rating by 1 of 3 NRSROs; 30%maximum;5% Complies" max issuer 5 were max maturity Municipal Securities "A"or higher by 1 of 3 NRSROS;10%maximum; 5%max issuer,, 5 Complies years maximum maturi Asset Backed/CMOs/Mortgage- "AA"or better by 1 of 3 NRSRCnc "A"or higher issuer rating by 1 of 3 Complies backed NRSROs; 20%maximum; 5%max issuer(excluding MBS/gout agency);5 years max maturity Negotiable CDs "A"or better on its long term debt by of 3 NRSROs: "A1/P1"or Complies highest short term ratings by 1 of 3 NRSROs; 30%maximum;5%max issuer' S"am max maturity CDs/TDS 5%max issuer, 5 years max maturi Complies Banker's Acceptances A-1,or equivalent highest short tens rating by l of 3 NRSROS; 40% Complies maximum; 5%max issuer 180 days max maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS; "A"or better by l of3 NRSROs, Complies if long Cann debt issued; 25%maximum; 5%max issuer, 270 days maxmaturity Money Market Fund Highest rating hi of3 NRSRCnc 20%maximum;10%max issuer Complies Repurchase A reements 102%collateralization Complies Reverse Repurchase Agreements 5%maxmum,90 days maxmatunty Complies LAIF No l usedb irrvesMentadmser Com lies A Duration Notto exceed 60 months - 80%to 120%ofthe benchmark !Complies Maximum Maturity 5 years maximum maturity Complies Account holds$2 million fece value(cusip 525ESC 6)and$51 toe wlue(ousip 525ESC1 Sit ofde sift tl 1-eM1men Bms Haaii that wcre pumhased by the income manager. Compiled at time of purcM1ase. 9 C/" CHANDLER ASSET MANAGEMENT Defaulted Bonds ocsD Lehman exposure Holdings Report Accoun]p10ID4 Aod123116 srvoaNTa mamagOcWnaomion60 641 11m 4 964264 042 am 3e3 Rlry m OWY a Bi]BV 000% OW O]?I1 el) NR OfO EAMa px,,]]].ml No us m... 5255S087 �LIrxr1ed Suu 00.0u V35 6.36 YO oll NIINI ow pY26136) NI 1111111w Deanlled2 000 000 66 1 mm m awiu s emu.% �36$]i]u 00u% OW p111s9)7u) NNRR 0W ]pR06 163 MO Rmn NRINR IYI h,11"..061 1.i0.0]A10 I ] A] XRI.R MAs h�166,161.67t NR >OTALMRNSienw6moanA UED u.n 10 OIL CHANDLER ASSET MANAGEMENT Ratings Orange County Sanitation District Long Tenn December 31,2016 vs. September 30,2016 iaooe ro as oas as moe 0. M M He 1L]1nB - W]Ltfi AAA AA A N as 1L31N0 166% 65.0% 103% 01% 4.0% Wens 153% 662% 100% 3.4% 51% Orange County Sanitation District Liquid December31,3016 vs. September30,E016 ]aooe row row row am L � 1 Illt Ynte AAA AA A <A w ,mine 70.7% 36.3% 11% 00% 0.0% Ndn 53.e% 31.4% 1e6% 00% 0.0% Seuro.%P IYr,q it C/" CHANDLER ASSET MANAGEMENT OCSD Investment Program Quarter End Portfolio Value $600,000,000 Liquid Operating Monies $500,000,000 •Long-Tom Operating Monies $400,000,000 $300,000,000 $200,000,000 — $100,000.000 $- S '°v HISTORICAL YIELD CURVE 4.00% �oaceora —rvovmie 3.07% 3.00% oeczms ----------------------------------------------------------- 2.45% 2.25% ------------------------------------------------------- 1939/6 1.45% 1.19% 1.00% 0.61% ---------------------------------------------------------------------- 0.50% 0.00% % 0 0 o h h 12 C/" Orange County Sanitation District Liquid Portfolio Summary Account#10282 As of 12/31/2016 PORTFOLIO CHARACTERISTICS ACCOUNTSUMMARY •• Average Duration 0.14 * Beg.Values End Values Issuer %Portfolio as of 11/30/16 as of 12131/16 Government of United States 34.8% Average Coupon 0.76% Market Value 32,974,552 112,916,619 Federal Home Loan Bank 22.1 Average Purchase YTM 0.52% Accrued Interest 46,188 126,058 Federal Home Loan Mortgage Corp 17.7% Average Market YTM 0.55% Total Market Value 33,020,740 113,042,677 9 Federal National Mortgage Assoc 6.6 Average S&P/Moody Rating AAA/Aaa Income Earned 14,916 23,707 Dreyfus Treasury Money Market F 5.0% Average Final Maturity 0.14 yrs COnt1wD 80.000,000 Paccar Financial 1.8 Average Life 0.04 yrs Par 32,965,202 112,903,509 Pepsico Inc 1.3% Book Value 32,977,791 112,921,628 Toronto Dominion Holdings 1.0 Cost Value 33.003,378 112,941,193 90.3% • - MATURITY DISTRIBUTION CREDIT QUALITY(S&P) u5 Corporate u9 (707 al (5.8%) Treasury (34.8%) BO% Commercial Paper (52%) Negotiable 40% Money CD Market `tea._. Fund 20.1% 20% FI (50%) A Supranetional Agemy (1.8%) % o-ss ss-s 5-1 -1s Is 2s5 ¢5-0 a. AA Maturity(yrs) (26.2%) Total Rate of Return Current Latest Year Annualized Since As of 12/31/2016 Month 3 Months To Date 1 Yr 3 Yrs 5 Yrs 10 Yrs 11/30/2014 11/3012014 Orange County Sanitation District Liquid 0.04% 0.12% 0.48% 0.48% N/A N/A N/A 0.34% 0.72% BAML 3-Month US Treasury Bill Index 0.04% 0.09% 0.33% 0.33% N/A N/A N/A 0.18% 0.38% Chandler Asael Maregament-CONFIDENTIAL Page 1 Execalon Time:111=1710:21:15PM C/" Orange County Sanitation District Long Term Portfolio Summary Account#10268 As of 12/31/2016 PORTFOLIO CHARACTERISTICS ACCOUNTSUMMARY •• Millis Beg.Values End Values Issuer %Portfolio Average Duration 2.48 as of 11/30/16 as of 12131/16 Government of United States 30.1 % Average Coupon 1.65% Market Value 281,266,378 315,341,911 Federal National Mortgage Assoc 9.3% Average Purchase YTM 1.57% Accrued Interest 1,169,842 1,250,939 Federal Home Loan Bank 8.0% Average Market YTM 1.51 % Total Market Value 282,436,221 316,592,849 9 Federal Home Loan Mortgage Corp 7.8 Average S&P/Moody Rating AA+/Aal Income Earned 357,592 371,284 Inter-American Dev Bank 2.7% Average Final Maturity 2.87 yrs COnt1wD 33.913,216 John Deere ASS 2.4% Average Life 2.56 yrs Par 280,302,410 315,136,824 International Finance Corp 2.3% Book Value 280,875,824 315,079,227 Toyota Motor Corp 2.0% Cost Value 282.154,240 316.376,297 64 6 Y • MATURITY DISTRIBUTION CREDIT QUALITY(S&P) - Mortgage US 30% AA Pass Treasury %.e°ro (65.0%) (s (30.1%) 25% U7 Corporate (22.4%) 19.8% Commercial Negotiable 20% par 6.0 Municipal t5% BOnde 98% (1'M%) 6upranational 10% (34%) Ma� (6.6%) 5.1% 4.J (1.9C1 O 5% 3.1% NR (0.9M%) (4.8%) Agency % ABS (237%) o-.P5 25- 5 5 1 t-2 2-3 3-4 a-5 s. AAA A (71%) Maturity(Yrs) (166%) (10.2%) Total Rate of Return Current Latest Year Annualized Since As of 12/31/2016 Month 3 Months To Date 1 Yr 3 Ym 5 Yrs 10 Yrs 11/30/2014 11/3012014 Orange County Sanitation District Long Tenn 0.06% -0.84% 1.47% 1.47% N/A N/A N/A 1.01 % 2.11 % BAML 1-5 Yr US Corporate/Gout Rated AAA-A Index 0.04% -1.06% 1.30% 1.30% N/A N/A N/A 0.98% 2.06% BAML US 15 Yr US Corp/Govl Rated AAA-BBB Index 0.07% -1.02% 1.61 % 1.61 % N/A N/A N/A 1.10% 2.30% Chandler Asset Mamgemert-CONFIDENTIAL Page 1 ExecaBgn Time:111V201710:21:03AM Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund December 31, 2016 Par Value Book Value Market Value Rate Yield Balance December 1,2016 $33,131,963 $33,131,963 $33,131,963 0.72 0.72 Deposits: 12/1/2016 31,869,000.00 31,869,000.00 31,869,000.00 0.72 0.72 12/21/2016 9,100,000.00 9,100,000.00 9,100,000.00 0.72 0.72 Total Deposits 40,969,000.00 40,969,000.00 40,969,000.00 0.72 0.72 Quarterly Interest Distribution 0.72 0.72 Withdrawals: 12/1/2016 (962.54) (962.54) (962.54) 0.72 0.72 1217/2016 (1,800,000) (1,800,000) (1,800,000) 0.72 0.72 12/8/2016 (2,100,000) (2,100,000) (2,100,000) 0.72 0.72 12/15/2016 (5,200,000) (5,200,000) (5,200,000) 0.72 0.72 12/29/2016 (2,600,000) (2,600,000) (2,600,000) 0.72 0.72 Total Withdrawals (11,700,963) (11,700,963) (11,700,963) 0.72 0.72 Balance December 31,2016 $62,400,000 $62,400,000 $62,400,000 0.72 0.72 Report ED: GL8251 Asset Summary Base Carrener: USD i BNY MELLON by Asset Type with Sectors Alt<raat<Base change<ate; Exchange Rate; OCS L1Q OF CHANDLER-OCSF07511102 12 31 2016 Status:FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Per Base Base Total Base CASH Is CASH EQUIVALENTS U.S.DOLLAR CERTIFICATES OF DEPOSIT-U.S. 1,150,000.000 1,149,964.14 1,149,964.14 1.02% 0.00 COMMERCIAL PAPER-DISCOUNT 5,900,000.000 5,889,136.07 5,889,136.07 5.21% 0.00 FEDERAL HOME LOAN BANK- 1 YR OR LESS 25,040,000.000 25,020,269.55 25,020,269.55 22.13% 0.00 FEDERAL HOME LOAN MORTGAGES- 1 YR OR LESS 19,000,000.000 18,991,553.07 18,991,553.07 16.80% 0.00 FNMA ISSUES- 1 YR OR LESS 4,920,000.000 4,916,716.08 4,916,716.08 4.35% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 5,643,509.210 5,643,509.21 5,643,509.21 4.99% 0.00 U.S.TREASURY BILLS- 1 YR OR LESS 20,250,000.000 20,218,586.16 20,218,586.16 19.89% 0.00 INTEREST 145,871.27 145,871.27 0.13% 0.00 U.S.DOLLAR 81,903,509.210 81,973,605.53 81,975,605.55 72.52% 0.00 CASH&CASH EQUIVALENTS 81,903,509.210 91,975,605.55 81,975,605.55 T2.52% 0.00 FIXED INCOME SECURITIES U.S.DOLLAR BANKING&FINANCE 2,000,000.000 2,009,020.00 2,003,000.00 1.77% -6,020.00 FOOD BEVERAGE Is TOBACCO 1,500,000.000 1,501,765.00 1,499,415.00 1.33% -2,350.00 HEALTHCARE 1,000,000.000 1,027,930.00 1,008,130.00 0.89% -19.800.00 SUPRANATIONAL ISSUES 2,000,000.000 2,002,630.00 1,999,920.00 1.77% -2,710.00 TECHNOLOGY 1,000,000.000 1,002,590.00 1,000,700.00 0.89% -1,890.00 US AGENCIES 3,500,000.000 3,553,745.00 3,551,240.00 3.14% -2,505.00 US GOVERNMENTS 19,000,000.000 19,011,118.35 19,006,820.00 16.81% -4,298.35 UTILITY-TELEPHONE 1,000,000mo 1,002,660.00 999,870.00 0.88% -2,790.00 U.S. DOLLAR 31,000,000.000 31,111,458.35 31,069,095.00 27.48% -42,363.35 FIXED INCOME SECURITIES 31,000,000.000 31,111,458.35 31,069,095.00 27.48% -42,363.35 TOTAL ASSETS-EASE: 112,903,509.210 113,087,063.90 113,044,700.55 300.00% -42,363.35 1/17/2017 6:07.-59PM EST 1 Workbench Asset Summary Report ID: G1,8251 Base Carr enry: USD BNY MELLON by Asset Type with Sectors Alternate Ease Carreaey: Exchange Rate: OCS WING CHANDLER-OCSFaT522202 12 31 2016 Statue:FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Per Base Base Total Base CASH Is CASH EQUIVALENTS U.S.DOLLAR CASH EQUIVALENTS 60,641.490 93,294.59 25,621.03 0.01% -67,673.56 CERTIFICATES OF DEPOSIT-U.S. 4,075,000.000 4,075,000.00 4,075,000.00 1.29% 0.00 COMMERCIAL PAPER-DISCOUNT 12,170,0W000 12,100,166.14 12,100,166.14 3.82% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 6,114,842.740 6,114,842.74 6,114,842.74 1.93% 0.00 CASH -0.04 -0.04 0.00% 0.00 PENDING TRADES 25.62 25.62 0.00% 0.00 INTEREST 1,290,037.30 1,290,037.30 0.41% 0.00 U.S.DOLLAR 22,420,484.230 23,673,366.35 23,605,692.79 7.45% .67,673.56 CASH&CASH EQUIVALENTS 22,420,484.230 23,673,366.35 23,605,692.79 7.45% -67,673.56 FIXED INCOME SECURITIES U.S.DOLLAR ASS-CAR LOANS 10,623,891.420 10,620,933.42 10,614,459.59 3.35% -6,473.83 ASS-CREDIT CARDS 4,140,000.000 4,139,643.13 4,136,232.60 1.31% -3,410.53 ABS-EQUIPMENT 7,647,986.480 7,648,490.52 7,638,061.72 2,41% -10,415.80 ASS-HOME EQUITY 133,743.290 100,432.85 125,488.65 0.04% 25,055.80 ABS-SMALL BUSINESS ADMINISTRATION 90,644.450 70,644.45 74,581.47 0.02% 3,937.02 ADS-STUDENT LOANS 36,113.900 35,967.38 36,160.49 0.01% 193.11 BANKING&FINANCE 39,370,000.000 40,247,000.06 37,813,952.80 11.94% -2,433,047.26 CAPITAL GOODS 5,000,000.000 5,014,950.00 5,016,250.00 1.58% 1,300.00 FHLMC MULTICLASS 1,926,474.610 2,107,812.33 2,121,119.04 0.61% 13,306.71 FHLMC POOLS 2,413.320 2,354.51 2,488.59 0.00% 134.08 FNMA POOLS 1,606,933.990 1,679,371.53 1,729,866.21 0.55% 52,494.68 FNMA REMIC 359,682.440 358,545.34 362,950.07 0.11% 4,404.73 GNMA MULTI FAMILY POOLS 236,362.330 236,437.M 245,188.57 0.08% 8,750.73 GNMA REMIC 32,010.820 32,010.82 32,172.47 0.01% 161.65 HEALTHCARE 4,000,OM.000 4,009,675.00 4,024,840.00 1.27% 15,165.00 OIL&GAS 9,500,OM.000 9,476,387.40 9,482,745.00 2.99% 6,357.60 SUPRANATIONAL ISSUES 21,000,000.000 21,063,425.00 20,851,045.00 6,58% -212,380.00 TAXABLE MUNICIPALS 4,240,000.000 4,307,633.89 4,604,028.00 1.4513S 296,394.11 TECHNOLOGY 14,045,OM.000 14,095,700.55 13,953,405.95 4.40% -142,294.60 111712017 6:09:28PM EST 1 Workbench Asset Summary Report ID: G1,8251 Base Carrenry: USD BNY MELLON by Asset Type with Sectors Alternate Ease Curre7 Exchange Rate: OCs LONG crrnrvnLER-OCSF07522202 12 31 2016 Statue:FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Per Base Base Total Base U.S.TIPS 10,589,200.000 10,469,915.89 10,400,865.28 3.289% -69,050.61 US AGENCIES 75,365,0W000 75,153,091.40 74,934,561.90 23.65% -218,529.50 US GOVERNMENTS 85,050,000.000 84,31,116.56 84,593,370.00 26.00% 222,260.44 WHOLE LOAN-CMO-COLLATERALIZED MTG OBUG 387,664.001 387,656.73 387,695.01 0,12% 38.2E U.S.DOLLAR 295,361,121.051 295,627,183.60 293,181,535.41 92.55% -2,445,648.19 FIXED INCOME SECURITIES 295,361,121.061 296,627,183.60 293,181,635.41 92.S5% -2,445,648.19 TOTAL ASSETS-BASE: 317,791,605.281 319,300,549.95 316,787,228.20 300.00% -2,513,321.75 111712017 6:09:28PM EST 2 Workbench Asset Summary Report ID: GL8251 Base Carrenry: USD BNY MELLON by Asset Type with Sectors Alte=nata Ease Ca==e7 Exchange Rate: ESCROW ACCOUNT-OCSFO75555o2 12 31 2016 Statue:FINAL Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base FIXED INCOME SECURITIES U.S.DOLLAR US GOVERNMENTS 3,594,000.000 3,603,596.33 3,594,000.00 100.00% -9,596.33 TOTAL ASSETS-BASE: 3,594,000.000 3,603,596.33 3,594,000.00 300.00% -9,596.33 111712017 6:10:07PM EST 1 Workbench Yield Analysis Report ID: RAM234 Base currency: TINY MELLON OCSF07511102 12/31/2016 Liquid Oper-Pi. Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmuui Receivables - 0.00 SUMRECV 145,871 AGENCY 3,000,000.00 FEDERAL NATL MTG ASSN DISC 0.39 Aeo 99.97 2,998,110 3.71 0.07 313589BA0 MAT01/25/2016 2,998,110 2.65 15,000,000.00 FEDERAL HOME LN BK CONS DISC 0.38 Aaa 99.98 14,991,760 18.54 0.07 313385BC9 MAT 01/27/2017 14,991,760 13.26 2,&10,000.00 FEDERAL HOME LN BK CONS DISC 0.38 Aaa 99.98 2,038,221 2.52 0.05 313385AV8 MAT 01/20/2017 2,038,221 1.80 2,000,000.00 FEDERAL HOME LN MTG CORP DISC 0.38 Aaa 99.98 1,999,164 2.47 0.05 313397AV3 MAT 01/20/2017 1,999,164 1.77 17,000,000.00 FEDERAL HOME LN MTG CORP DISC 0.44 Aaa 99.96 16,992,389 21.01 0.09 313397BG5 01/31/2017 16,992,389 15.03 1,920,000.00 FEDERAL NATL MTG ASSN DISC 0.50 Aaa 99.94 1,918,606 2.37 0.12 313589BXO MAT 02/15/2017 1,918,606 1.90 6,000,000.00 FEDERAL HOME LN BK CONS DISC N 0.50 Aaa 99.90 5,991,734 9.41 0.23 313385DC7 MAT 03/24/2017 5,991,734 5.30 CERTIFICATES OF DEPOSIT 1,150,000.00 TORONTO-DOMINIONNYINSTLC/D LOB 1.15 Aal 100.02 1,149,964 1.42 0.34 89113E7K6 1.150 0 05/03/201T DD 05/05/16 1,149,964 1.02 COMMERCIAL PAPER 111712017 6:13:02PM EST 1 Source:The Bouck fNew York Meflan Communion Yield Analysis Report ID: RAM234 Base Curteacy: VSD TINY MELLON OCSF07511102 12/31/2016 Liquid Oper-Pi. Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 2,000,000.00 PACCAR FINL CORP DISC 0,65 P-1 99.95 1,998,639 2.47 0.08 69392ANT5 01/27/2017 1,998,639 1.79 900,000.00 AMERICAN HONDA FN DISC 0.93 P-1 99.96 899,398 I'll 0.09 02665JNR7 01/25/2017 899,398 0.80 1,000,000.00 TOYOTA MTR CR CP DISC 1.11 P-1 99.93 998,129 1.23 0.09 89233GNP9 01/23/2017 998,129 0.88 1,000,000.00 BANK TOKYO-MITSUB DISC 2.04 P-1 99.82 996,281 1.23 0.18 06538BQ63 03/06/2017 996,281 0.88 OTHER 5,643,509.21 DREYFUS TREAS&AGY CSH CSH MG - Ass 5,643,509 6.98 0.08 996085247 VAR RT 12/31/2049 DO 04/09/97 5,643,509 4A9 TREA8URIES AND AGENCIES O 1,000,000.00 FEDERAL HOME LN BK CONS DISC 0.38 Ass 99.97 999,110 1.24 0.06 313385BA3 MAT 01/25/2017 999,110 0.88 1,000,000.00 TOYOTA MTR CR CP DISC 1.00 P-1 99.69 996,689 1.23 0.31 89233GRL2 04/20/2017 996,689 0.88 TREA8URY 5,250,000.00 U S TREASURY BILL 0.37 Aaa 99.97 5,246,587 6.49 0.09 912996KE8 0.000%0 1/26/2017 DD 00/28/16 5,246,587 4.64 15,000,000.00 U S TREASURY BILL 0.53 Aas 99.85 14,972,000 18.52 0.30 912796KT5 0.000%04/20/2017 DD 10/20/16 14,972,000 13.24 TOTAL: CASH&TEMPORARY 0.80 0.03 80,830,290 100.00 0.14 80,976,161 FIXED INCOME 111712017 6:13:02PM EST 2 Sourc M: B¢Nc. fNew York McOa Corporadon Yield Analysis Report ID: RAM234 Base Currency: VSD TINY MELLON OCSF07511102 12/31/2016 Liquid Oper-Pi. Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration AGENCIES&OTHER GOUT OBL 1,000,000.00 FEDERAL HOME LN BK CONS DISC 0.39 Aas 99.97 999,444 3.11 0.08 313385BF2 MAT 01/30/2017 999,444 0.88 1,000,000.00 FEDERAL HOME LN MTG CORP 0.51 0.50 Aaa 100.00 1,000,320 3.11 0.08 3137EADUO 0.500%01/29/2017 DO 0 1/16/15 999,990 0.88 2,500,000.00 FEDERAL NATL MTG ASSN 0.80 5.29 Asa 102.05 2,553,425 9.93 0.45 31398ADM1 5.395%06/12/2017 DD 06/08/07 2,551,250 2.26 BANKS Is FINANCE 1,000,000.00 JPMORGAN CHASE&CO 1.21 1.35 A3 100.02 1,000,470 3.11 0.12 46623EJY6 1.350%02/15/2017 DD 02/18/14 1,000,170 0.88 1,000,000.00 WELLS FARGO&CO 1.30 2.09 A2 100.28 1,008,550 3.12 0.35 94974BFD7 2.100%05/08/2017 DO 05/07/12 1,002,830 0.89 INDUSTRIALS 1,000,000.00 APPLE INC 0.85 1.05 Aal 100.09 1,002,590 3.11 0.35 037833AM2 1.050%05/05/2017 DD 05/06/14 1,000,700 0.89 1,000,000.00 CISCO SYSTEMS INC L19 1.10 Al 99.99 1,002,660 3.11 0.10 19295RAT9 1.100%03/03/2017 DD 03/03/14 999,870 0.88 1,500,000.00 PEPSICO INC L22 0.95 Al 99.96 1,501,765 4.66 0.14 713448CM 0.950%02/22/2017 DD 02/28/14 1,499,415 1.33 1,000,000.00 ELI LILLY&CO 129 5.16 A2 100.81 1,027,930 3.13 0.21 532459BB3 5.200%03/15/2017 DD 03/14/07 1,008,130 0.89 SVPRANATIONALS 1,000,000.00 INTER-AMERICAN DEVELOPMENT BAN 1.00 1.12 Asa 100.03 1,001,540 3.11 0.21 4581XOBV9 L125%03/15/2017 DD 0 1/11/12 1,000,260 0.88 1/17/2017 6:13:02PM EST 3 Sou¢ M: NaNc.ofNcw Pork Mellon Corporadon Yield Analysis Report ID: RAM234 Base Curteacy: Van TINY MELLON OCSF07511102 12/31/2016 Liquid Oper-Pi. Units Held YTM/ Curren Moody's Market Total Coat %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 1,000,000.00 INTERNATIONAL FINANCE CORP L11 1.00 A. 99.99 1,001,090 3.11 0.32 459501CBS8 1.000%04/24/2017 DD 04/24/12 999,660 0,88 TRZ,tsm68 16,000,000.00 USTREASURY NOTE 0.41 0.89 Are 100.04 16,008,179 49.93 0.09 912828SC5 0.875h 01/31/2017 DO 0 1/31/12 16,006,400 14.16 3,000,000.00 U S TREASURY NOTE 0.43 0.95 Aea 100.01 3,002,940 9.32 0.04 912828A91 0.750%01/15/2017 DO 0 1/15/14 3,000,420 2.65 TOTAL:FO ED DICOMR 0.64 1.38 32,110,903 100.00 0.15 32,068,539 TOTAL:Liquid Oper-Plmco 0.54 0.54 112,941,193 100.00 0.14 113,044,701 111712017 6:13:02PM EST 4 Source:The BaNc. fNew York McOa Corporadon Yield Analysis Report ID: RAM234 Base currency: BNY MELLON OCSF07522202 12/31/2016 Long Term Open Pimco Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmuui Receivables - 0.00 SUMRECV 1,290,063 CERTIFICATES OF DEPOSIT 4,075,000.00 TORONTO DOMINION BANKC/D 0.92 1,19 - 100.05 4,075,000 18.23 0.20 89113WHF6 1.190%03/13/2017 DD 08/23/16 4,075,000 1.29 COMMERCLH,PAPER 6,300,000.00 TOYOTA MTR CR CP DISC 1.23 P-1 99.27 6,251,999 27.97 0.59 89233GV29 08/02/2017 6,251,999 1.99 5,870,000.00 BANK TOKYO-MITSUB DISC 2.04 P-1 99.82 5,848,167 26.17 0.18 06538BQ63 03/06/2017 5,848,167 1.85 OTHER 60,641.49 SLH PROXY LONG EXPOSURE - - 93,295 0.11 - 99WAEU30 SLHOPNTA4 25,621 0.01 6,114,842.74 DREYFUS TREAS&AGY CSH CSH MG - Ane 6,114,843 29.36 0.08 996085247 VAR RT 12/31/2049 DD 04/09/97 6,114,843 L93 US CASH 1.00 USD(UNITED STATES DOLLAR) - - 0 0.00 - NA9123459 GL PAYABLES RECKWABLES 0 0.00 1.00 US CASH - - 0 0.00 - 999999USD GL PURE CASH 0 0.M US CASH FUNDS 0.00 BNY MELLON CASH RESERVE 0.76 0.96 - 100.00 0 0.00 0.08 996087094 0.010%12/31/2049 DD 06/26/97 0 0.00 1/17/2017 6:13:02PM EST 5 Source:Ma Batic cfNcui York Mel/an Communion Yield Analysis Report ID: RAM234 Ease Curteacy: VBD BNY MELLON OCSF07522202 12/31/2016 Long Term Oper Pimeo Units Held YTM/ Curren Moody's Market Total Coat %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration TOTAL: CASH&TEMPORARY 1.44 0.49 22,383,303 100.00 0.27 23,605,693 FIXED INCOME AGENCIES S OTHER GOVT OHL 5,000,000.00 FEDERAL HOME LN MTG CORD 0.92 0.95 Aaa 100.02 4,994,250 1.90 0.54 3139EADV8 0950%07/14/2017 DD 05/29/15 5,000,850 L58 5,000,000.00 FEDERAL HOME LN MTG CORD G.95 0.95 A. 99.80 4,967,500 1.69 1.02 3139EADN6 0950%01/12/2018 DD 11/21/12 4,989,800 L58 5,000,000.00 FEDERAL HOME LN MTG CORP 0.99 0.88 Asa 99.89 4,994,I00 1.70 1.18 3139EADP1 0.895%03/07/2018 DD 01/17/13 4,993,500 1.58 7,500,000.00 FEDERAL HOME LN BE CONS BD 1.07 1.39 Aas 100.36 7,544,850 2.56 1.18 313398A43 1.395%03/09/2018 DD 02/13/12 7,526,850 2.38 5,000,000.00 FEDERAL NATL MTG ASSN 1.23 1.13 Asa 99.99 4,963,950 1.69 1.93 3135GOG72 1.125%12/14/2018 DD 11103/l5 4,989,700 1.58 7,500,000.00 FEDERAL HOME LN BE CONS BD 1.36 1.50 Ass 100.30 7,589,190 2.55 2.14 3133982M2 1.500%03/08/2019 DD 02/06/12 7,522,650 2.39 7,500,000.00 FEDERAL HOME LN MTG CORP 1.49 1.26 Ass 99.42 7,399,650 2.53 2.90 3139EADM8 1.250%10/02/2019 DD 10/02/12 7,456,125 2.35 5,000,000.00 FEDERAL NATL MTG ASSN 1.64 1.51 Ass 99.53 4,955,650 1.69 3.39 3135GOD95 1.500%06/22/2020 DD 04/27/15 4,976,700 1.59 5,000,000.00 FEDERAL HOME LN BK CONS BD L93 1.95 Asa 100.08 5,008,950 1.70 3.35 313383HU8 1.950%06/12/2020 DD 06/03/13 5,003,950 1.58 111712017 6:13:02PM EST 6 Soa¢ M: Ba of New York Mellon Corporad.n Yield Analysis Report ID: RAM234 Base Curteacy: VSD BNY MELLON OCSF07522202 12/31/2016 Long Term Oper Pimeo Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 7,500,000.00 FEDERAL NATL MTG ASSN L83 1.52 A. 98.75 7,370,726 2.52 3.81 3135GOF73 1.500%11/30/2020 DD 10/19/15 7,405,950 2.34 5,365,000.00 FEDERAL HOME LN BK CONS BD 1.85 1.40 Aae 98.11 5,343,325 1.79 4.01 3130A7CV5 1.375%02/18/2021 DD 02/18/16 5,263,387 1.66 10,000,000.00 FEDERAL NATL MTG ASSN 1.86 1.40 Aaa 98.05 10,040,950 3.33 4.03 3135GOJ20 1.375%02/26/2021 DD 02/05/16 9,805,100 3.10 BARKS&FINANCE 600,000.00 BANK OF AMERICA NA 1.04 1.30 Al 100.09 600,000 0.20 0.11 06050TLX8 VAR RT 05/08/2017 DD 05/08/14 600,552 0.19 500,000.00 WELLS FARGO BANK NA 1.19 1.22 Aa2 100.02 500,000 0.17 0.21 94988J2L0 VAR RT 06/15/2017 DD 06/12/14 500,090 0.16 2,900,000.00 AMERICAN EXPRESS CO 1.78 6.59 A3 106.27 3,377,386 1.05 1.16 025816AY5 T000%03/19/2018 DD 03/19/08 3,081,801 0A7 3,000,000.00 HSBC USA INC 1.79 1.63 A2 99.83 3,003,290 1.02 1.02 40428HPH9 1.625%01/16/2018 DD 12/20/12 2,994,750 OAS 3,800,000.00 BANK OF AMERICA CORP 1.80 5.55 Bael 103.59 4,334,014 1.34 0.90 060505DP6 5.750%12/O1/2017 DD 12/04/07 3,936,230 1.24 5,000,000.00 JOHN DEERE CAPITAL CORP 1.89 2.28 A2 101.08 5,046,984 1.72 2.61 24422ESS9 2.300%09/16/2019 DD 09/15/14 5,054,200 1.60 600,000.00 GOLDMAN SACHS GROUP INC/THE 1.91 5.71 A3 104.17 692,806 0.21 1.00 38141GFG4 5.950%O1/18/2018 DD 0 1/18/08 625,044 0.20 3,200,000.00 BEAR STEARNS COS LLC/THE 1.94 4.47 A3 104.00 3,523,520 1.13 1.43 073902CD8 4.650%07/02/2018 DD 06/25/03 3,327,840 1.05 111712017 6:13:02PM EST 7 Soa¢ M: BaN ofNcw Pork Mel/an Corporad.n Yield Analysis Report ID: RAM234 Base Curteacy: VSD BNY MELLON OCSF07522202 12/31/2016 Long Term Oper-Pimeo Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 2,120,000.00 BANK OF NEW YORK MELLON CORP/T L98 2.28 Al 100.82 2,142,175 0.93 2.60 06406HCW9 2.300%09/11/2019 DD 09/11/14 2,137,469 0,69 5,000,000.00 GENERAL ELECTRIC CO 2.09 2.19 Al 100.33 5,014,950 1.00 2.89 36962G9MO 2.200%01/09/2020 DD 01/09/15 5,016,250 1.58 2,000,000.00 JPMORGAN CHASE&CO 2.33 2.26 A3 99.97 1,994,880 0.68 2.93 46625HKA7 2.250%01/23/2020 DD 01/23/15 1,995,300 0.63 5,000,000.00 WELLS FARGO&CO 2.43 2.59 A2 100.58 5,001,650 1.91 3.39 94994BGM6 2.600%07/22/2020 DD 07/22/15 5,028,900 1.59 1,250,000.00 HSBC USA INC 2.61 2.37 A2 99.22 1,222,788 0.42 3.04 40428HPR7 2.350%03/05/2020 DD 03/05/15 1,240,225 0.39 2,800,000.00 MORGAN STANLEY 2A6 4.96 A3 110.81 3,200,848 1.05 4.03 61749WAL3 5.500%07/28/2021 DD 00/28/11 3,102,792 0.98 600,000.00 ESC LEHMAN BRTH HLD ESCROW - - 5.80 352,614 0.01 - 525ESCIBT 0.000%11/24/2013 DD 01/22/08 34,800 0.01 2,000,000.00 LEHMAN BRTH HLD ESC - - 5.75 1,207,405 0.04 - 525ESCOY6 0.000%12/30/2016 DD 10/24/05 115,000 0.04 CARDS 4,140,000.00 CHASE ISSUANCE TRUST A9 A9 L19 1.06 - 99.91 4,139,643 1.40 0.42 161571HHO 1.060%09/16/2019 DD 09/13/16 4,136,233 1.31 1,810,000.00 HONDA AUTO RECEIVABLES 20 2 A3 1.50 1.39 Aee 99.85 1,809,965 0.61 1.46 43814QAC2 1.390%04/15/2020 DD 05/31/16 1,807,195 0.57 CARS 272,358.99 HONDA AUTO RECEIVABLES 201 A3 1.00 0.69 Are 99.99 271,529 0.09 0.08 43813JAC9 0.690%11/21/2017 DO 02/27/14 272,285 0.09 111712017 6:13:02PM EST 8 Soa¢ M: BaN ofNcw Pork Mel/an Corporad.n Yield Analysis Report ID: RAM234 Base Curteacy: VSD BNY MELLON OCSF07522202 12/31/2016 Long Term Oper-Pimeo Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 459,078.17 TOYOTA AUTO RECENABLES 2 A A3 L09 0.69 Aaa 99.96 458,128 0.16 0.08 89231MAC9 0.670%12/15/2017 DO 03/19/14 458,876 0.14 2,020,144.82 HONDA AUTO RECEIVABLES 20 1 A2 1.10 1.01 - 99.90 2,019,943 0.69 0.38 43814NAB1 1.010%06/18/2018 DO 02/25/16 2,019,478 0.6 556,481.45 TOYOTA AUTO RECEIVABLES C A2A 1.16 0.92 Aaa 99.98 556,437 0.19 0.03 89231TAB6 0.920%02/15/2018 DO 08/26/15 556,342 0.18 537,546.51 HONDA AUTO RECEIVABLES 20 2 A3 1.16 0.77 Aaa 99.92 539,169 0.18 0.22 43814GAC4 0.970%03/19/2018 DO 05/21/14 537,095 0.19 2,883,281.48 TOYOTA AUTO RECEIVABLES 2 A A3 120 1.12 Aaa 99.95 2,882,846 0.98 0.56 89236WAC2 1.120%02/15/2019 DO 03/04/15 2,881,753 0.91 2,085,000.00 NISSAN AUTO RECEIVABLES C A2A 1.31 1.09 Aaa 99.83 2,084,918 0.91 0.52 65478WABI 1.090%05/15/2019 DO 08/10/16 2,081,435 0.66 EQUIPMENT WASS 2,247,986.48 JOHN DEERE OWNER TRUST 20 B A3 1.10 1.09 Aaa 99.99 2,249,040 0.96 0.22 499899AD6 1.090%11/15/2018 DO 09/03/14 2,247,829 0.91 2,980,000.00 JOHN DEERE OWNER TRUST 20 B A2 1.38 1.09 A. 99.89 2,979,818 1.01 0.39 49988NAB4 1.090%02/15/2019 DO 09/27/16 2,976,573 OA4 2,420,000.00 JOHN DEERE OWNER TRUST 20 A A3 1.63 1.36 Aaa 99.94 2,419,619 0.82 0.99 49988MAC4 1.360%04/15/2020 DO 03/02/16 2,413,660 0.76 FANNIE MAE REMIC 21,155.32 FNMA GTD REMIC P/T 07-114 A6 0.00 0.96 Aaa 99.89 20,124 0.01 - 31396g Q5 VAR RT 10/27/2037 DO 11/30/07 21,132 0.01 338,527.12 FNMA GTD REMIC P/T 11-3 FA 1.20 1.19 Aaa 100.99 338,421 0.12 -1.44 31397QRE0 VAR RT 02/25/2041 DO 01/25/11 341,818 0.11 111712017 6:13:02PM EST 9 Soa¢ M: BaN ofNcw Pork Mellon Corporad.n Yield Analysis Report ID: RAM234 Base Curteacy: VSD BNY MELLON OCSF07522202 12/31/2016 Long Term Oper-Pimeo Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration FHLMC 2,413.32 FHLMC POOL#]8-6064 1,75 2.77 Aaa 103.12 2,355 0,00 0.99 31348SWZ3 VAR RT 01/01/2028 DO 12/01/97 2,489 0.00 FRMA 169,347.90 FNMA POOL#0823358 2.03 3.08 Aea 105.34 168,025 0.06 1.05 31406XWT5 VARRT 02/01/2035DD04/01/05 178,383 0.06 359,837.41 FNMA POOL#0466397 2.05 3.25 Aaa 104.63 352,050 0.13 3.50 31381PDA3 3.400%11/01/2020 DO 11/01/10 376,505 0.12 25,421.17 FNMA POOL#0257179 2A0 4.18 Aaa 107.56 26,885 0.01 3.36 31371N Cl 4.500%04/01/2028 DO 03/01/08 27,342 0.01 18,959.93 FNMA POOL#0AL0869 2A2 4.18 Aaa 107.56 20,052 0.01 3.20 3138EG6F6 L500%06/01/2029DD09/01/11 20,392 0.01 29,376.20 FNMA POOL#0MA0022 2.43 4.18 Aaa 107.56 31,068 0.01 3.27 3141nAY3 L500%04/01/2029 DO 03/01/09 31,596 0.01 5,192.31 FNMA POOL#0748678 2.55 4.57 Aaa 109.53 5,582 0.00 2.97 31403GXF4 5.000%10/01/2033 DO 10/01/03 5,687 0.00 30,985.35 FNMA POOL#0826080 2.62 4.59 Aaa 109.05 33,309 0.01 2.96 31407B= 5.000%07/01/2035 DO 06/01/05 33,989 0.01 171,499.53 FNMA POOL#0745580 2.91 4.58 Aaa 109.24 184,338 0.06 2.92 31403WZ3 5.000%06/01/2036 DO 05/01/06 187,322 0.06 336,428.02 FNMA POOL#0888336 2.95 4.58 Aaa 109.11 361,660 0.12 3.01 31410F4V4 5.000%07/01/2036DD04/01/07 367,060 0.12 172,280.91 FNMA POOL#0357969 2.95 4.59 Aea 109.03 185,202 0.06 2.84 31376KT22 5.000%09/01/2035DD09/01/05 187,834 0.06 111712017 6:13:02PM EST 10 Soa¢ M: BaNc.ofNcw Pork Mellon Corporad.n Yield Analysis Report ID: RAM234 Base Curteacy: VSD BNY MELLON OCSF07522202 12/31/2016 Long Term Oper Pimeo Units Held YTM/ Curren Moody's Market Total Coat %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 287,627.26 FNMA POOLK0815991 2.80 4.58 Aaa 109.15 309,199 0.11 3.05 31406PQY8 5.000%03/01/2035 DD 03/01/05 313,957 0A0 FREDDIE MAC MULTICL s 900,000.00 FHLMC MULTICLASS MTG K006 A2 2.11 4.02 NR 105.86 951,047 0.32 2.96 31398VJ98 4.251%01/25/2020 DD 04/01/10 952,695 0.30 43,729.55 FHLMC MULTICLASS MTG E3 A 2.57 2.99 Aaa 100.81 43,775 0.02 0.96 3133TCE95 VAR RT 08/15/2032 DD 12/01/97 44,085 0.01 982,745.06 FHLMC MULTICLASS MTG 58 2A 3.56 5.68 Aaa 114.41 1,112,990 0.38 3.08 31394 35 6.500%09/25/2043 DD 09/01/03 1,124,339 0.35 G11MA 87,212.64 GNMA 11 POOL#0080965 0.99 2.11 Aaa 104.35 89,158 0.03 0.89 36225DCB8 VAR RT 07/20/2034DD07/01/04 91,004 0.03 25,504.74 GNMA II POOL#0080023 129 2.13 Aaa 103.31 25,927 0.01 1.34 36225CAE9 VAR RT 12/20/2026 DD 12/01/96 26,350 0.01 10,571.74 GNMA II POOL#0080395 1.33 2.12 Aaa 103.55 10,476 0.00 0.54 36225CNM4 VARRT 04/20/2030DD04/01/00 10,949 0.00 83,358.44 GNMA 11 POOL s080408X 1.36 2.13 Aaa 103.47 82,512 0.03 0.69 36225CN28 VARRT 05/20/2030DD05/01/00 86,252 0.03 29,714.77 GNMA 11 POOL a080088M 1.36 2.13 Aea 103.10 30,365 0.01 0.88 36225CC20 VAR RT 06/20/2027DD06/01/97 30,636 0.01 GRMA REMIC 32,010.82 GNMA GM REMIC P/T 00-9 PH 0A0 1.03 Aaa 100.51 32,011 0.01 0.00 3830H4NX9 VAR RT 02/16/2030 32,172 0.01 ROM&EQUITY 111712017 6:13:02PM EST 11 Source:Mh HaNc.of New York Mellon Corporad.n Yield Analysis Report ID: RAM234 Base Curteacy: VSD BNY MELLON OCSF07522202 12/31/2016 Long Term Oper-Pimeo Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 133,743.29 AMRESCO RESIDENTIAL SECURI 1 A L82 1.00 - 93.83 100,433 0.04 0.00 03215PFN4 VAR RT 06/25/2029 DO 10/20/99 125,489 0.04 INDUSTRIALS 2,000,000.00 INTEL CORP 1.19 1.35 Al 100.15 2,008,280 0.68 0.95 458140AL4 1.350%12/15/2017 DD 12/11/12 2,003,000 0.63 2,000,000.00 CHEVRON CORP 1.35 1.11 Aa2 99.79 1,988,600 0.68 0.92 166764AA8 1A04%12/05/2017 DO 12/05/12 1,995,480 0.63 2,000,000.00 OCCIDENTAL PETROLEUM CORP 1.42 1.50 A3 100.09 1,986,340 0.68 1.11 694599CD5 1.500%02/15/2018 DO 06/22/12 2,001,820 0.63 4,000,000.00 ELI LILLY Is CO 1.66 1.94 A2 100.62 4,009,675 1.39 2.15 532459BF4 1A50%03/15/2019 DD 02/25/14 4,024,840 L29 4,000,000.00 AMERICAN HONDA FINANCE CORD 1.89 2.23 Al 100.99 4,046,640 1.39 2.53 02665WAH4 2.250%08/15/2019 DO 09/09/14 4,038,960 L28 3,000,000.00 ER ON MOBIL CORP 2.16 2.22 Aae 100.23 3,016,097 1.02 3.97 30231GAV4 2.222%03/01/2021 DO 03/03/16 3,006,870 0A5 3,045,000.00 MICROSOFT CORP 2.24 1.60 Aaa 96.99 3,041,385 1.00 4.42 594918BP8 1.550%08/08/2021 DO 08/08/16 2,953,376 0.93 5,000,000.00 QUALCOMM INC 225 2.25 Al 100.01 4,995,195 1.90 3.26 747525AD5 2.250%05/20/2020 DO 05/20/15 5,000,350 1.58 4,0W,000.00 APPLE INC 227 2.25 Aal 99.92 4,050,840 1.36 3.94 039833BS8 2.250%02/23/2021 DO 02/23/16 3,996,680 1.26 2,500,000.00 CHEVRON CORP 2.31 2.12 Aa2 99.14 2,485,350 0.84 4.18 166964BG4 2.100%05/16/2021 DO 05/16/16 2,478,575 0.98 OTHER CMO OOVT AOBNCHIS 111712017 6:13:02PM EST 12 Soa¢ M: BaN of New York Mellon Corporad.n Yield Analysis Report ID: RAM234 Base Curteacy: VSD BNY MELLON OCSF07522202 12/31/2016 Long Term Oper-Pimeo Units Held YTM/ Curren Moody's Market Total Coat %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 387,664.00 NCUA GUARANTEED NOTES TR R2 IA L59 1.66 Aaa 100.01 387,657 0.13 0.02 62888UAA8 VARRT 11/06/2017 DD 11/17/10 387,695 0,12 70,644.45 SBA GTD PARTN CTFS 2001-20C 1 1.98 6.01 Aaa 105.57 90,644 0.03 1.25 83162CWO 6.340%03/01/2021 74,581 0.02 STUDENT 36,113.90 SUM STUDENT LOAN TRUST 200 9 A 2.26 2.38 Baa3 100.13 35,967 0.01 0.08 78445JAA5 VARRT 04/25/2023DD08/28/08 36,160 0.01 SUPRANATIONALS 5,000,000.00 INTERNATIONAL FINANCE CORP 1.11 1.00 Asa 99.97 5,020,700 1.70 0.32 45950KB58 L000%04/24/2017 DO 04/24/12 4,998,300 1.58 5,000,000.00 INTER-AMERICAN DEVELOPMENT BAN 1.12 1.00 Aaa 99.93 5,019,550 1.70 0.53 4581XOCG1 1.000%07/14/2017 DO 04/30/l4 4,996,700 1.58 5,000,000.00 INTERNATIONAL DANE FOR RECONST 128 1.00 Aaa 99.59 4,991,170 1.69 1.44 459058EJ8 1.000%06/15/2018 DO 04/30/l5 4,979,650 1.57 3,500,000.00 INTER-AMERICAN DEVELOPMENT BAN 2.03 1.89 Asa 99.39 3,590,405 1.18 4.04 4381X0055 1.875%03/15/2021 DO 01/14/16 3,478,720 1.10 2,500,000.00 INTERNATIONAL FINANCE CORP 2.09 1.19 Aaa 95.91 2,441,600 0.81 4.42 45950KCJ7 1.125%07/20/2021 DO 07/20/16 2,397,675 0.76 TIPS 0.00 US TREAS-CPI INFLAT L98 1.07 Aaa 104.91 0 0.00 2.46 912828PN 1.125%01/15/2021 DD Ol/15/11 0 0.00 10,587,200.00 US TREAS-CPI INFLAT 2.34 0.13 Ass 98.24 10,469,916 3.53 4.90 912828W O 0.125%07/15/2024 DO 07/15/14 10,400,865 3.28 TREASURIES 111712017 6:13:02PM EST 13 Soa¢ M: BaN of New York Mellon Corporad.n Yield Analysis Report ID: RAM234 Base Curteacy: VSD BNY MELLON 0CSF07522202 12/31/2016 Long Term Oper Pimeo Units Held YTM/ Curren Moody's Market Total Coat %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 3,750,000.00 U S TREASURY NOTE 0.53 0.89 Aaa 100.11 3,750,306 1.28 0.33 912828SS0 0.895%04/30/2017 DD 04/30/12 3,754,275 1,19 5,OOQ000.00 U S TREASURY NOTE 0.87 0.89 Aaa 100.00 4,974,392 1.90 0.89 91282SG20 0.895%11/15/2017 DD 11/15/14 5,000,200 1.58 3,500,000.00 U S TREASURY NOTE 0.95 0.75 Ass 99.97 3,496,457 1.19 1.16 912828UR9 0.950%02/28/2018 DD 02/28/13 3,491,810 1.10 11,000,000.00 U S TREASURY NOTE 1.24 1.49 Ass 100.54 11,042,439 3.96 2.04 91282SB33 1.500%Ol/31/2019 DD 01/31/14 11,059,730 3.49 5,000,000.00 USTREASURY NOTE 1.29 1.49 Asa 100.51 5,016,423 1.71 2.20 912828SNI 1.500%03/31/2019 DD 03/31/12 5,023,600 1.59 2,000,000.00 U S TREASURY NOTE 1.32 1.61 Ass 100.95 1,996,861 0.68 2.43 912828WS5 1.625%06/30/2019 DD 06/30/14 2,014,920 0.64 5,000,000.00 U S TREASURY NOTE 1.35 1.61 Asa 100.90 5,012,389 1.91 2.52 912828W W6 1.625%07/31/2019 DD 09/31/14 5,034,950 1.59 5,800,000.00 U S TREASURY NOTE 1.38 1.93 Aaa 100.98 5,893,189 1.99 2.68 912828F39 1.750%09/30/2019 DD 09/30/14 5,857,072 1.85 7,500,000.00 U S TREASURY NOTE L43 1.50 Aaa 100.21 7,449,635 2.55 2.85 912828G61 1,500%11/30/2019 DD 11/30/14 7,515,525 2.37 5,000,000.00 U S TREASURY NOTE 1.59 1.50 Aaa 99.70 4,966,423 1.69 3.33 912828% 5 1.500%05/31/2020 DD 05/31/15 4,984,750 1.57 5,500,000.00 U S TREASURY NOTE 1.91 1.39 Aaa 98.77 5,424,667 1.85 3.93 912828L99 1.375%10/31/2020 DD 10/31/15 5,432,515 1.71 6,000,000.00 U S TREASURY NOTE 1.98 1.40 Aaa 98.40 5,895,840 2.01 3.96 912828N89 1.375%01/31/2021 DD 01/31/16 5,904,120 1.86 111712017 6:13:02PM EST 14 Soarr M: BaNc.of New York Mellon Corporad.n Yield Analysis Report ID: RAM234 Base Curtency: Ban BNY MELLON OCSF07522202 12/31/2016 Long Term Oper Pimeo Units Held YTM/ Curren Moody's Market Total Coat %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 7,000,000.00 U S TREASURY NOTE L91 1.17 A. 96.46 6,757,914 2.29 4.62 912828T34 1.125%09/30/2021 DO 09/30/16 6,751,990 2,13 6,000,000.00 U S TREASURY NOTE 1.91 1.29 Asa 96.99 5,813,692 1.98 4.69 912828T67 1.250%10/31/2021 DO 10/31/16 5,818,140 1.84 9,OOQ000.00 U S TREASURY NOTE 1.91 1.96 Aaa 99.25 6,900,492 2.36 4.93 912828U65 1.950%11/30/2021 DO 11/30/16 6,947,780 2.19 U8 TAXABLE MUM BONDS 2,440,000.00 PORT AUTH OF NEW YORK&NEW JE 1.89 4.84 Aa3 109.66 2,501,fi34 0.91 2.93 73358WAG9 5.309%12/01/2019 DO 07/01/09 2,675,582 0.84 1,400,000.00 NEW YORK CITY NY TRANSITIONAL 2.35 3.83 Aa1 106.30 1,400,000 0.51 3.55 64971M5E8 4.075%11/01/2020 DO 11/03/10 1,488,186 0.47 400,000.00 UMV OF CALIFORMA CA RGTS MED 2.59 4,57 Aa3 110.09 400,000 0.15 3.96 913366EJ5 5A35%05/15/2021 DO 11/18/10 440,260 0.14 TOTAL:PIKED INCOME 1.62 1.69 295,627,184 300.00 2.52 293,181,535 TOTAL:Long Term OPer Pimco 1.61 1.65 319,010,497 100.00 2.37 316,787,228 111712017 6:13:02PM EST 15 Soa¢ M: BaNc.of New York Mellon Corporad.n Yield Analysis Report ID: NAM234 Base currency: BNY MELLON OCSF07555502 12/31/2016 O.C.S.Escrow Account Units Held YTM/ Curren Moody's Market Total Coat %Type Option Security ID Security Description can(SOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmuni Receivables - 0.00 SUMRECV 0 TOTAL:CASH 3:TEMPORARY 0.00 0.00 300.00 0 FIXED INCOME TREASURIES 3,594,000.00 U S TREASURY NOTE - Aaa 3,603,596 100.00 - 9I2828SK7 0.375h 03/15/2015 DD 03/15/12 3,594,000 100.00 TOTAL:FLED INCOME 0.00 0.00 3,603,596 300.00 3,594,000 TOTAL:O.C.S. Escrow Account 0.00 0.00 3,603,596 100.00 3,594,000 111712017 6:13:02PM EST 16 Source:Ma BaNc. fNew York Mellon Communion Asset Detail BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 As Of Date 12/31/2016 Mellon Base Base Market Percent of Local Unrealized Net Unrealized Security ID Security Description ShaREUPar price Base Cost Value Total Gain loss Gain/Loss Base Grand Total 434,279,114.491 435,991,210.18 433.425,928.75 100.00 -2,565,201.43 CASH&CASH EQUIVALENTS 104,323,993.4/0 105,648,971.90 105,581,298.34 24.36 -61,613.56 U.S.DOLLAR 104,323,993.440 105,648,971.90 105,581,298.34 24.36 -67,673.55 CASH 0000 1.0000 -D. -0. 000 000 000 NVVAEU30 SLH PROXY LONG E%POSURESLHOPNI 60,6414% 04225 .3.2.59 25,62103 001 -6767358 _ E],6]356 89113E9K6 TORONTO-DOMINION NY INSTL C/D1d50%OSAINQ017 DO OSIOWI6 1,1 50,OWNO 99.9969 1,149,964.14 1,149,964.14 .0 000 0.00 89113WHF6 TORONTO DOMINION BANK COO 190%OWIW2017 DD MUMS 4,075,000.000 1000000 4075000.W 4,075,000.00 0.94 0.00 0.00 02665JNR7 AMERICAN HONDA FIN DISCOV25I2017 90g000coo 999331 899,397]5 899,39]]5 0.21 0.00 0.00 06538BC63 BANK TOKYOWITSUB DISWMW2017 6,870,001000 996281 6,844p47.45 6.844A47.45 1.58 0.00 0.00 693T2ANT5 PACCAR FINL CORP DISCSIC12017 2,000SOOJXO 999319 1991, 1,998.639.89 0A8 0.00 0.00 09233GNP7 TOYOTA MTR CR CP DISC01I23f2017 1,000,000.000 998129 998,129.44 998,12944 023 ON 0.00 89233GRL2 TOYOTA MTR CR CP DIBC04R020P 1,000,000 ON 996689 996,689. 996,89944 023 000 0.00 892MGV29 TOYOTA MTR CR UP DIBCO&02207 6,300,00JON, 99,2381 6,251,999.25 6,251,.9,25 1" ON, 0.00 RECEIVABLE FOR INVESTMENTS SOLD OWO 10000 2562 2562 000 ON 000 313385AV8 FEDERAL HOME LN BK CONS DISCMAT 0112012017 2,040,000.000 999128 2,030,220.95 2,030,220.95 0.47 0.00 0.00 31331 FEDERAL HOME LN BK CONS DISCMAT 0112512017 1,000,OWox, 999110 999110.W 999,11ew 0.23 0.00 0.00 313385BC9 FEDERAL HOME LN BK CONS DISCMAT 0112712017 15.000.000.000 99 W51 14991,760.00 14,991.760.00 3.46 0.00 0.00 313M5BF2 FEDERAL HOME LN BK CONS DISCMAT 0113012017 1,000AOONO 9994d4 999,444.44 893.444.44 0.23 0.00 0.00 313385DL7 FEDERAL HOME LN BK CONS DISC KRAT 03124Y2017 6,000,000.000 99,8822 5,991]34.16 5,991.7N.16 1.36 ON 0.00 313397AV3 FEDERAL HOME LN MTG CORP DISCMAT 01202017 2,000.000 NO 99.9582 1,999.1W.44 19591W.44 0. 0.00 0,00 3133978G5 FEDERAL HOME LN MTG CORP DISCINAL 207 9,000,000.000 999552 16,992,300 16,992,388.63 392 000 0.00 313589BA0 FEDERAL NATL INTO ASSN DISCMAT 01I25I206 _ 3,000,OW.MO 999370 2,998,110.00 2,99B,110.00 0.69 0.00 0.00 313589BX0 FEDERAL NATL MTG ASSN DISCMAT 0211 W2017 1,920,CW.WO 999274 1,918,61 1,910,806.08 0." 0.00 000 INTEREST RECEIVABLE _ O.WO 10000 1435,908.57 1A35918.57 0.33 0.00 01 99WB5247 DREYFUS TREAS&AGY GSH GSH MI RT 12J314DW DO 01 11,758.351.950 1000000 11758,351.95 11,75A351.95 2.71 0.00 0.0o 912796KE8 U S TREASURY BILLONOO,01I261ID17 DD 01 5,250,000.000 999350 5,246,586.53 5,246.5NX59 121 0.00 0.00 912T96KT5 U S TREASURY BILLONO%04202017 DO 1MV16 15,000,040.ON 998133 14,9T1,959.59 14,97TWO 58 345 000 0.00 FIXED INCOME SECURITIES 329,955,121.051 330,342,238.28 327,844,630.41 75.64 -2,497,607.87 U.S.DOLLAR 329,955,121.051 330,342,238.28 327,044,630.41 75.64 -2,497,607.87 43813JAC9 HONDA AUTO RECEIVABLES 201 A30.870%1112112017 DD 01 272,35KNO 99.9730 271,529.15 272,295.45 ON 756.30 756.30 43814GAC4 HONDA AUTO RECEIVABLES SO 2 A30.77M 0119/2018 DD 05I21/14 537.546.510 999160 537.163.56 537.0al 0.12 -7359 -7359 43814NAB1 HONDA AUTO RECEIVABLES 201 A21010%OW182018 DO 02CSM6 2020,144.820 999670 2019,943.01 2,019.478.17 047 4_64.84 46484 43014CAC2 HONDA AUTO RECEIVABLES 202 A31.39M W1152020 DO 05131116 1,010,000000 998450 1,809,964.89 LOW,194.50 042 $77039 -2.77099 65496WAB1 NISSAN AUTO RECEIVABLES C A 1J070%0511612019 ON OW1 OIL 2085,000.WO 998290 2,004,917 65 2081634.65 048 -348320 -3p0320 89231 M OB TOYOTA AUTO RECEIVABLES 2 A A31670%1W162017 DD O&1&14 459,076170 99,9560 450,12713 458,07618 Oil 740d5 748A5 89231TAB6 TOYOTA AUTO RECEIVABLES C A2A0920%0211612018 OD O812W15 556,401.450 999750 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TREASURY NOTEO.750%0111 C2017 DO 01/1&14 3,000,000.000 1000140 3,002,939.74 30W42000 0,69 -2519.74 -251934 9128281333 U S TREASURY HOTEL 500%01/31/2019 DO 01/31/14 11,000.000.000 100.5430 11,042,439.19 11,059.73000 2,55 17,290.81 17,290.81 912828F39 U S TREASURY HOTEL750%0930/2019 DO OW30/14 5,800.000.000 1009840 5,873,186.87 5,857.07200 135 -16,114.87 -16,11487 912828320 U S TREASURY NOTE0.675%1111512017 DO 1111W14 5,000.000.WO 1009040 4,974,39175 5000.20000 115 25,80825 25.808.25 912828G61 U 5 TREASURY NOTE1500%1113012019 DO 11SN14 7,500.OW.W0 1002070 7M9,634.SO 7,515.52500 173 65,89050 65.990.SO 912828L59 US TREASURY NOTEI 375%10/312020 DO 1031/15 55000W W0 98]]30 5A24,BW.87 5,432,51500 125 7UaA3 ]6da13 912UBN89 U S TREASURY NOTED 01/3112021 DO OIAN/16 6,)DOCKDOO 984020 6895040.41 5,904,1200D 135 8,27959 8,2]9.59 9128281 U S TREASURY NOTED 876%01/31/2017 DO 01/31/12 16,000,000.000 1000400 16,008,178.61 16,006,40000 369 -1,]]861 -1.]]8.61 912828SK7 U S TREASURY NOTED 376%OWIW2016 DO OWI&I2 3,584,CW.WO 1000000 3,603,596.33 3,594,000.00 083 -9,59633 -PMM 912828SNI U S TREASURY HOTEL 500%OW3112019 DO 0391/12 5,000.000.000 100.5120 5,016A23.00 5.025.600.00 1,16 9,17700 91MBSSO U S TREASURY NOTED.875%MMM17 DO M/3N12 37500W.W0 100,1140 3)50,305.53 3.]54.2]5.00 OW 3989A7 3,9894] 912UM4 U S TREASURY HOTEL 125%09/3012021 DO 09/3N16 7,000,000.000 984570 6757,9140a 8.751.990.00 1.55 5,92408 -5,92408 _ F.-MGLW13 RepA n-SKMP:ne Jm 17 A17 CN:NFAO PM Page 3 of N, Asset Detail BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 As Of Date 12/31/2016 Mellon Base Base Market Percent of Local Unrealized Net Unrealized Security ID Security Description ShareslPar price Base Cost Value Total GainlLoss Gain/Loss Base 91MBT67 US TREASURY NOTE1 250%IW31=21 DD 10/31/16 6,000,OLb.WO 969fi90 S,B13,fi9199 k01a 1A900 134 4,tl0C2 4,44802 912828U65 U S TREASURY NOTEI.750%11/30/2021 DD I IW16 7,000,000.000 99.2540 6,900,492.20 6,947,78000 160 4],28].80 4],28].80 912828UR9 U S TREASURY NOTEO.)50%OV2812018 DD OMN13 3,500,000.000 997660 3496,457.04 3,491,810.00 081 4647.04 461].04 912828WSS U S TREASURY NOTE1.625%=3012019 DD 0SWN4 2,000,000.00 1007460 1,996.861." 2,014.92000 046 10,058.56 18,058.56 912828WW8 UBTRE48URV NOTE1.825%W/31/20190D WPo1/10 5,000.00.00 1008990 5,012.388]0 5.034.950.00 1.18 22,581.30 22.581.3a 912828XE5 U S TREASURY NOTE1.500%05/31/2020 OD 0531115 5,000.000.WO 996950 4,966,423W 4.984.]5000 115 18,32]00 18.32].to 92]5RAT9 CISCO SYBTEMS INC1.100%OMW2017 DD 0MV14 1,000.CW.WO 99,9870 1,002.6W.W 99%8]OW 023 -279000 -2.79000 fi2B88UAAe NCUA GUARANTEED NOTES TR R2 IAVAR FIT 11N291]DD11/1]/10 387,664.W1 ID00080 38],656.]3 3 SIA 01 009 3828 3828 S.-m GLW13 RepA n—m mp:Tue Jm 17 A17 0331:40 PM Page 4 of N, Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 Effective Contract Trade Data Base Investment Base Investment Base Security lO Description Data Settle Data Sheresl Par Amount Amount Gain/Loss $SRI.Base Amount GRANDTOTAL -240,505.30 114,1443,538.53 .10,609.57 -240,530.92 CORPORATE ACTIONS 11000,000.00 -1,008,120.00 -8,120.00 1,000,000.00 1,000,000.00 -1,008,120.00 -8,120.00 1,000,000.00 U.S.DOLLAR 1,000,000.00 -1,008,120.00 -9,120.00 1,000,000.00 OB4G6XCA5 6ANK W NEW VORKMELLON CORPT 2.4W%OILSO017 DO 11Q3HI T.Scu10 tOISSO16 -1,000 OW.000 LaNWON -1008,120.00 0,12000 1.WO,000 OD MATURITIES 2,995,404.99 -2,995,484.99 0.00 2,995,484.99 GASH Is GASH EQUIVALENTS 2,995,484.99 -2,995,484.99 0.00 2,995,484.99 U.S.DOLLAR 2,995,484.99 -2,995,484.99 0.00 2,995,484.99 21.I.I.P. COOPERAT CENT DISC lXlMD16 1II19RO18 I-'sume -1 W00W.000 99a.na 33 ..",a.33 ON 935,]53.IS 74005XMW2 PRAXuR INC DI SC 12OSQD18 12OSGIN6 1292DIS 2.000 ON 000 1,888.]31 fib -t OW.]31.66 ON lNeI31 fib PRINCIPAL PAYMENTS 1,460,703.32 -1,43,174.09 -2,439.51 1,460,677.79 FIXED INCOME SECURITIES 1,460,703.32 -1,453,174.09 -2,489.57 1,460,8]].70 U.S.DOLLAR 1,00,703.32 -1.03,174.09 -3,489.57 1,481 313488RS FHLMC POOLNRNaMVARRT OIp12028DD12N19] 11121Q018 11112018 -10800 1880 000 0W 1880 31WSAS3 MUNC POOLLM-NU VAR RT OINSR28 DO 120LMD 12 .O. IL12016 35.620 2582 -25.00 0.. 00n 31304 E HUMID MULTICLASS WG 02A 55W%0&26RW3 DO WNV03 1V112016 1211M16 -13720.820 19p2082 15.53927 -1 818A5 IS 7NU 3133TCE95 FHINC MULTILus6 WO Ea A VAR RT W15WW DO lXSl9] 11/112016 1,11.16 -15W.50o L58650 -1,50516 -tM 1586.50 31371NUO7 FNMA POOL EN25]1]94.51 ounorN DO L WINB 911.18 1912018 - 198.27 -1142_ 31376KT22 FNMA POOL N3579895 OW%09N120as DO VNIMS 1NII2018 T.T.P. _-7 as ON 7,E81 at -0235.58 1.SO ],08100 31381PDA3 FNMA POOL aPPEI 34W%11NVAID DO 1101110 IV112016 12I1=16 E55520 855.52 G1.33 11.19 ON12 3140SDAS3 FNMA POOL IST4EEW 5ON%OS IA3fi DO SWISS 1APOO16 lVlMl6 i,144JN0 4.1M 86 Sp5512 'No. 4.1.B6 31403GXF4 FNMA POOL M48W850W%INIOPIONOn WN103 PO11AIN 1Y1IW16 _ TO3 14. 4814 -511, _ 361 S14UPOYB FNMA POOLN08159T150W%OVOtor35 DO O N105 1L112016 19lorn d1.NO 4,18999 -T.814 312]5 4,18999 31408XWT5 FNMA POOL MU3358 VAR RT SONIOOSS DO M IOX I111NIN TOTOm8 -593180 593]8 589.12 4.64 1W.78 J1407 XT FNMA POOL a052800050W%O]0VA35 D00801N5 lVlQO1B 12IVN16 -0SOLOOO .2.00 ce49 50A1 7630B 31410F V4 RNMA POOL MBBB3365 ON%07SLOSse DO 0401p7 IW112016 121PN16 -107W S40 10,70684 "'NOX 5 b03.01 10.70684 3131 FNMA POOL WALOSW 450G%WNIR029 DO OW01111 LWP2016 12/12018 d55.8C0 4WS4 J92m 38.28 45584 3141. FNMA POOL rNMAX224 W0%MNlQnN DO 0301N9 1.11me 1911AI8 -112510 51251 - 1213 Z952 51251 31398X3O5 FNMA GTD REMIC RN0]-114 AS VAR RT 102]203T DO 11OPOT 1.16 I.So018 1.277.350 8.277.SS 1.1an1.33 a... 6R77.35 J1327OREO FNMAGTD REMIC PR Its FAVAR RT O2,2S2W1 DO OLOSHI 12RSRPIO 12YEODIS -7 ONS90 7.03089 -702B.59 2.MI ],ONty 383]IKNXB GNMA OLD REMIC RT ODB FH VPR RT DYGOS3O 'Alsealu 1VNO016 -1111.180 1.11118 -1.11118 _ 0W 1 11,IN 36225LA29 GNMAIIPOOL400 0023VARRT 12RM2ONDD1y0193 11112.1. 111SOHL, 12N -21502 38225LNM4 GNMAIIPOOLaWWMSVARRT 04ANNOODDdN1/N I'll18 IL12018 -1.as. LcW -RI L85 182.09 3822500B8 GNMAIIPOOL4N80985VARRT N20I2mNDD7SHX4 1L112018 1L12018 -1557,740 1.55].i4 -1.SSB.T] O.97 1,SS7.74 AUNDC20 GNMAIIPOOLOSSORDMVARRI OW2N2027DONJOHN7 lWP20l6 1.1.1. -W,170 23a.1] -23a 21 5.0E NO 11 J6225CN28 GNMAIIPOOLW804ORXVARRT ONWOON000SN100 12111ONS 121112m6 44.]40 444.74 J O22 402 .14 438LNAm HONDA ALTO RECEIVABLES 201 A21010%0611&2O18 DO ONY16 1918M118 19180016 -2461.Sm 2d8,]]8.51 -24 ,751. 2d85 ST1,71611 43813JA09 HONDA ALTO RECEIVABLES 201 A30 RI 11M2017 DO=7114 12121.18 1.I.m8 -S5r WE 22D.,In 4U5,17427 see .6.1V 43814GAN XONDA AUTO RECEIVABLES 202 AS OTID%OYWNTS DO OW1114 1211.10 1.1. A10K010 mJPH81 m.TBON M.50 mJW61 4PB77PIM_ JOHN DEERE OWNER TRUST 20 B AS TOM 1111 EI201B OD APWII4 lAlOa16 1211E,2016 31E,1W N. 216,162.69 -21E.26S. -1N.85 215,L02 to SSYN B HULA GUARANTEED NOTES IR R2 IA VAR RT 11AXI DO 11I1VIO 1112016 lwoOI6 -10684.810 10.W4.01 -0OAI 0. la'.01 89231MAC9 POI AUTO RECEIVABLES 2 A ASOAM%1211N2017 DO=19114 1111,01a 111SONN 194,NO 330 19438033 -193,95]94 4 00. 89238NAC2 TOYOTAAUTO RECEIVABLES 2AA31,120%mAHLINS DO ODRmS 1L15YA1e TO. SM,923.N0 244,92980 R4 W2.]] 3103 24492980 89231TAE8 TOYOTA AUTO RECEIVABLES C A A SANDS,=1 SR01B DO OW611 E 1&15OOP lVISROIB 167782.000 18].]82N -1 W.]5851 AA9 16],]82.00 PURCHASES -242,186,005.28 2A2,186,005.28 0.00 -=,186,005.28 CASH&CASH EQUIVALENTS -192,686,268.80 192,686,268.80 0.00 -192,686,268.80 Far-M TX8355 Perot TimndmpT o Am 17 2m 7 033836 PM Page l of N, Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 Effective Contract Trade Data Base Investment Base Investment Base Security IS Description Oate SI Data Sheresl Par Amount Amount Gain/Loss Settle Base Amount U.S.DOLLAR -192,686,268.80 192,686,268.80 0.00 -192,686,268.80 2885JNR] AMERICAN HONDA FIN DIED OION2017 122LM10 1923Y2018 900,OW➢O 099,39]]5 0 DO - 9WW]ON BNY MELLON CASH RESERVE ODIM 121a1YOAD DD UNBIND I.P. 4152018 SBOO.OW.000 $600W000 EBW,WOdO O.W -iWO,00000 ISHOS2A] DREYFUS TREAS B PRY CSH CSH MG VAR RT 121IM49 DO NNW IV112016 1DHOM16 173ESS 480 -173525AB 113..e4a O.W -173,52648 8960052A1 DREYFUS TREAS6 ANY CBH CSH MG VAR RT 12SIONO9 DO Np&BT lZ02016 1OZONS 031050 .05 39045 OW 33f 05 960B52GT DREYFUS MEAN B AGY CH CSH MG VAR RT p UDU9 DO mNN7 1ASNOU 1DL2016 653250 41 653P5 OW -11121 9WWSM] DREYFUS TREND B AGY EGA Can MG VAR RT 1ANION49 DO OFNUR9] 12/SI2016 1.1a 11,NOON -11,N000 11N0., OW -1114.1 SPWNM] DREYFUS TREAS B AGY CSH CSH MG VAR RT 12CCN049 DD 04NON7 1.at. 4I62OI8 SNNOW.000 $6N,00000 AWEPSdO O.W -5600,N000 99fi08524] DREYFUS MEDIA&AGY CIN CSH MG VAR RT 129V2W9 DO 0408IW 12ITUODS 1WM16 110A.100 -11JU14.18 11.01418 OW -11,01418 AW5247 DREYFUS TEEMS B AGY CSH CSH MGVAR RT 1MIM49 DO NIO&97 1A1.1D lVl2CO16 417.DID d3.75000 43,75000 0W A3]5000 9KW5247 DREYFUS TRFAS B AGY CSH CON MO VAR RT 12131R049 DD OFOR"? I.So010 1115I2016 MD.4. .2,W228 80;"216 OW 9W DREYFUS TREND B AGY CBH Cull 3994 MG VAR RT IM31ONS DO MODIFY IL1.10 1YMWO 110 -113994 11 O W 39N �00524] 1,1.9 9WWSM7 DREYFUSTREA58AGYCSHCSHMGVARRTIMIM< DDW9I9] 1119YA18 12FRODI6 340SD.No 4AURN03 34RIOND3 _ O.W �340,ND 03 8WOB5247 DREYFUS TREAS B AGY ESE!CSH MG VAR RT 1MIM49 DO NNW lViBN%B 12I1 B12D10 109wBNO -1OWa8B 10.ANA O.W -10,96a 09 WNDR 4] DREYFUSTREASBAGYCSHCSHMGVARRT1DIMODDWW7 1.10 1YNN2O16 3047 520 3M].5] 3N]5] OW 3,04].57 NNNNIJI DREYFUS TREAS B AGY CBH CSH MG VAR RT l2NlCo90D MODIFY 12212016 12R12018 26,52],144.230 ¢0527,1023 20,52],14433 OW Wans.] DREYFUS TREND B AGY CSH CBH MG VAR RT 1ANIO49 DO mUW7 1.16 12 nnZ BOND,OW.000 �W,WO,W000 BEADROD 40 OW EOWO0.0 a, SPRON 4] DREYFUS TREAS B AGY CSH CSH MG VAR RT 1291OM9 DO Mp9IW 12V]V0R 12O]ON6 un RYA30 ANS7nAU W,8]0.63 O.W _ AO,9]063 8WW5247 DREYFUSTREASBPGYCSHCSHMGVARRTlMlM49DOWM7 12I28RHO 12QMDIB 4IDS.620 ASINCI 4JUNS2 O.W J,07562 8WOB5247 DREYFUSTRFASBAGYCSHCSHMGVARRT1D31Y2049DONM95T IYOUDER 1AMONO16 ZPADNo DID -2SONW000 20W,W0E0 0. -2,WO,Hal 00 31330EOE9 FEDERAL HOME LN BY CONS DISC MAT OIO]I201] 1L2CMn 12O30016 12,WO0W.000 .11,D94p00 O0 11,9Wp0040 OW -11,W4400 O0 313305B12 FEDERAL HOME LN BY CONS DISC MAT 01 YWQOI 7 DNH2ER 1.1O016 1,WO,Om 000 A9N44404 9W,44444 OW NOD 44444 JI.ANDL] FEDERAL HOME LN W CONS DISC N MDT D32AV09 12O3R018 12OMN8 B.W00W,000 -5991.]34.11 5.991.73116 Old 1.991 OBIS 3133WBG5 FEDERAL HOME LN MTG CORP DISC 01NIM17 12NWY16 12QW2016 12WDOW000 -1188LW3IS 11,9M.67333 O.W 11W4.073.33 31339RG5 FEDERAL HOME LN MTG CORP DISCO101RO17 I.DN16 12T12016 BWJANo 01. yW1,21130 488],2153U OW _d.932,]1530 31339]AV3 FEDERAL HOM E LN MTG CORP DISC MAT 01 V0201] 191.OR lYUwN018 "ON 0.NO 4999,184.44 1999,164.44 OW -1999,H.DF 313539a%0 FEDERAL NATL MTG ASSN DISC MAT OQUES017 1.16 HOMOX16 1,9200W.0N 4 RU'ra 6 ISININ.00 D. -L916,00000 39372ANT5 PACCAR FINE CORP DISC O1CRMI7 12N I8 12Y23OIS 2WDOW 000 -1993W0.08 1898.63B.08 OLD IAmS IS 740.1a. PEARAIR INC DISC 12Y30O010 12I2yID16 1D23ON6 2.0000W 000 -19BANUAD 18W,]31 fib OW -1899]11 ED 13EM6 TOPONT0,DOMINION NY INS%CID 1150%NAVA17 DO 051W116 HASECOR 12QW2016 1.15DON.B1O 1149,W4.14 1149,W414 _ 0W _ 09233GRL2 TOYOTA MTR CIACP DISC 042N2017 1ANDINB 12ODI 1,W0,0W.000 .,.A. 9W,60944 OW UN,N44 09233G@9 TOYOTA MTR OR CP OISOOE'02V017 1.16 HON.H8 AMOOD.000 UDAW935 AOSHB9.25 DUE -6251.99935 812]BSKEB U S TREASURY BILL OOWM NQ6MXI7 DO O O&16 JOSIAH 1. 1.2500NDOO -124O349P2 1248.34832 I.W -124B.34922 9120WT5 V S TREASURY BILL 0 OW%OAMONI DO 1 PNWHI IYNI 16 12OONOIC 15WDON.000 -14,97l.RN 58 14871W8.55 0A 14.e71,NO 58 FIXED INCOME SECURITIES 49,09,736.48 49,499,736A8 0.00 -49,499,736.48 U.S.DOLLAR 49,09,736.48 49,499,736A8 0.00 -49,491 31388AND FEDERAL NATL MTG ASSN 6.375%W112O090DOSTb9] I12RTO018 12OBO01B DJWDOD,000 D55342500 25SN.500 OW 1JSN 42500 2820SC5 V S TREASURY NOTE 0875%UNI OOP DO 01131 I12 1.is =11A16 1OW00N.01. 1400511163 OW 912828SC5 U STREASURY NOTE OB]5%UNIQUE DD01131112 .in 12OYOUS NOW,,0W.W0 ND,JNOD 5003,WBW OW 912B28T34 U S TREASURY NOTE 1.tl5%WYa0VO210DORNIAR ."Fla 12O2ON6 4WOOW.000 -303880840 3035B0640 OW 383690840 m2028T8] U S TREASURY NOTE 1.DaM 10912021 DO HINUCS 12H.1B 1211410016 SW00W,S00 -58138919E 5013.B91.AS O.W 5.813,591 IS 912UON09 VSTREASURY NOTE 1875%OINIQO21 DO 01N3 DEONS016 12QW2016 NOW WOOLO d.404,214.29 4404,21429 OW 4p04214.29 N1ACSN1 U S TREASURY NOTE 1500%ENUCY19 DO OSN1112 .is 12OB12016 SWDOW.WO I.OluN3Oe OU,N,D DO OW 5.01642300 91282APES U S TREASURY NOTE 1 MM OSOVIDID DO M31115 12211016 12CEID6 SCOO,OED NO 4W662300 4 966,42U 00 OW 912.AAA U S TREASURY NOTE I.75M 11MO021 DO I lNUY6 1.16 12casme LW WDOY0 8900.49220 6.900,0220 0W BMW 40N 2O RECEIPTS AND DISBURSEMENT TRANSACTIONS 113,900,000.00 13,624.00 0.00 113,900,000.09 CASHISECURITIES RECEIVED FROM PLAN ADMINISTRATOR 113,900,000,0D 0.00 0.00 113,901 Report III TIONDS RepH ThADN PT o Jan 17201]03 MDA PM Page 2 of N, Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 nt ID Dosc.i Effe.ive contract Trade Dale ease Investment ease Investment ease Scum it, PIIon Date seine Data s0aresl Par Amount Amount Gain/Loss SeRlo ease Amount U.S.DOLLAR 113,900,000.00 0.00 0.00 113,900,000.00 NA9123159 FOOD FROM PLAN ADMIN 1L12018 DODD S,WOU"TO 000 OW S,Po000000 .10.. 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ILB INFLATION ADJUSTMENTS US TREASLPI NFLAT INI2018 1N2018 SM000 .0 EVDO OW OOO 91282BWLV' LB INFLATON ADJUSTMENTS US TREASCPI INFLAT 1LNID18 12162018 41EADo 0DO 41Bd0 _ O.W 000 812828WV0 ILO INFLATION ADJUSTMENTS US TREASCPI INFLAT 1.2018 12R12018 1 1348.000 000 1.248DO O.W 000 v D.I 1p ILO INFLATION ADJUSTMENTS US TREM4CPI INFLAT 1L1Ekmfi lViVA18 tl6000 416,00 OWI TO 2828WU0 ILS INFLATION ADJUSTMENTS US DREASLPI INFIAT 2I1312m6 191 L2018 416000 I1800 OW0.1 912828WTJD ILB INOUTOM ADJUSTMENTS US TREASCPI INFLAT ILIVMIS 1L14IID18 416000 000 418d0 San 0DO 91282BWV0 ILB INFLATON ADJUSTMENTS US TREASWI INFLAT I11.la 1L18Y101B 416000 0DO 'an. Sod 000 812828WV0 ILO INFLATION ADJUSTMENTS US TREASCPI INFLAT 1913R%S 1211&2016 1952.000 0TO 1.35240 O.W 000 2828VN0 ILO INFLATION ADJUSTMENTS US TREAS-CPI INFLAT 111a.lE 12119I2016 4113,00 _ 0W 0.1 912823VAA ILS INFLATION ADJUSTMENTS US TREAG4PI INFLAT 192021118 lOODOSIS 416000 0.0 tl840 OW 0 or 912828WTW ILB INFLATION ADJUSTMENTS US TREASCPI NFLAT .11018 1.I.m8 416,000 000 m6D0 San 0DO 912828WLV' ILB INFLATON ADJUSTMENTS US TREASCPI INFLAT 1.1E 12122QD16 416000 0DO 416DO O.W 0DO 912.8. ILE INFLATION ADJUSTMENTS US TRESS-Cm INFLAT 12J21R013 12.11DUS ISMoc0 00D _l..SaO OW .1 91d838W1A ILE INFLATION ADJUSTMENTS US TREAS-CPI INFLAT 1227/M15 1]2]2018 S.01. D00 S3240 0.W 912828WL0 ILL INFLATION ADJUSTMENTS US TREASLPI INFIAT 192HIOla 122W2016 416000 1 Do 41600 OW 00, 912.a. ILB INFLATION ADJUSTMENTS US TREASCPI INFLAT 1229IM 18 1L2&2018 520.W0 DDO SaI SW 000 S2828WL0 ILB INFLATION ADJUSTMENTS US TREASCPI INFWT I12AOR018 1Ya0Y101B a. Do 0AD .1 D. O.W 0DO SALES 122,589,311.67 -122,589,311.67 0.00 122,589,311.67 CASH IS CASH EQUIVALENTS 122,589,311.67 -122,589,311.67 0.00 122,589,311.67 U.S.DOLLAR 122,588,311.57 .122,589,311.87 0.00 122,539,311.67 R.O.D. BNY MELLON USH RESERVE DOOM IL312M9 DO 06ASSO 1.018 12aISSUI S,W00.000 Surn.0 DO 5800W000 OW 6W0000 DO VPEAV ] DREYFUS TREAS 6 AGY CSH CSH MG VAR RT 12912M9 DO OMtl9I9] 12M2M6 12EVI -late SN9320 1.N9.349P2 -1 M9,34S 22 Sto L249,31922 896085N7 DREYFUS TREAS 6 AGY CSH CSH MG VAR RT 1ASUANAS DO Mp&97 1.4.1E lVl4QOIS b.OU 6B1000 S]84,833 DO -SDAN.Sa0 O.W 5.]94,fi8]00 ASMEN] DREYFUS TREASB AGY CSH CSH MG VAR FIT lW312045 DOOWOOF .in IMW2016 -1,158,3]6]ID L156,3]6]1 -1,158,3i6]1 0W 111533]6]1 5241 DREYFUS TREABB AGY CSH CSH MG VAR FIT 12131200 DO WDW97 TFY12D1a 12]212mS -599444d40 999,4I404 993db. OW 998085N] DREYFUS TREAS B AGY CSX CSH MG VAR RT IASIAO 49 DO Waco 12RLM18 12DODDIS US'.III 160I Al -1505$W4El O.W TESS28M 81 996085N7 DREYFUS TREASB AGY CSH CSH MG VAR RT 1MIM49 DO MpS/S] 1.1E 1.3can8 I.T.OD9200 %,834,S392A dfi.34..92. O.W _BSSN,53020 858085N] DREYFUS TREAS 6 AGY C5H CSH MG VAR RT TASIO1MS US uyD%S] 1y2]RPIfi 1Y2]Y1016 d,Wp15300 4.W],]15d0 -0,99771530 OW 1.W7,111 SO 8524] DREYFUS TREAS B AGY CSH CSH MG VAR ET IM12049 DO AMS57 I.Oca 1.11A16 14YK 0]0550 14551,070.55 -1455NIPTES 0To S,5540]055 A... DREYFUS TRFPS&AGY CSH CSH MG VAR FIT 12J312049 On W092] 12Y[LM18 1YDARD18 -16383,52H.84T 18,386526M -163W,526M OW 18,assS208<I .,on III T.Ssl RepaH TimndmpT o Jan 17 201]03 MISS PM Page 3 of Callan December 11,2011 Orange County Sanitation District Investment Measurement service Quarterly Review The gollden, repod waa prepared by Callan Aaseciales Inc. ("CAI") using information from sources that include the following: fund busleend; fund veatodian(s);Investment managerial CAI computer scheme;CAI investment manager and fund sponsor database;third party data vendors;and other outside sources as directed by the client CAI assumes no responsibility for the amuse,or whadd mess of the information provided,or methodologies employed,by any inormation providers external to CAI.Reasonable care has been taken to assure the accuracy of the CAI database and computer software.Callan does nW provide advice regarded nor shall Callan be responsible for,the purchase, sale, hedge or holding of individual securities, including,without limitation cundes of the client(i.e. company stack)or derivatives in the clients accounts.In preparing the following report CAI has not reviewed the risks of Individual security holdings or the conformity of individual seventy holdings with the clients Investment policies and guidelines,nor has it assumed any responsibility to do c.Advice pertaining to Me merits of individual examies and derivatives should be discussed with a third party securities expert.Copyright 2017 by Callan Associates Inc. Table of Contents December 31, 2016 Capital Markel Review 1 Active Management Overview Market Overview 8 Domestic Fixed Income 9 Asset Allocation Investment Manager Asset Allocation 11 Investment Manager Returns 12 Asset Class Risk and Return 16 Manager Analysis Chandler-Long Term Operating Fund 18 Chandler-Liquid Operating Money 22 Callan Research/Education 24 Definitions 27 Disclosures 32 Callan Orange County Sanitation District Executive Summary for Period Ending December 31, 2016 Asset Allocation December 31, 2016 Market Value Welaht Net New Inv. Domestic Fired Income Long Tom,OpweOng Fund' 316.787,228 73,70% (7.f00.000) Liquid 0 Toll Flntl $429,831,929 100.0% $47,900.000 Performance Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund^ (0.80%) 1.58% 1.47% 1.13% 2.08% Chandler (0.80%) 1.58% - - - Blmbg GmUCred 1-5 Year lux (1.05%) 1.56% 1.32% 1.29% 1.95% ML 1-5 GovtlCorp (1.02%) 1.62% 1.39% 1.39% 2.03% Liquid Operating Monlese 0.12% 0.47% 0.26% 0.21% 0.22% Chandler 0.12% 0.47% - - - Citiami n h Treasurt Bill 0.08% 0.27% .11 Total Fund (0.70%) 1.15% 1.22% 1 1.74% Target' (0.80%) 1.35% 1.14% 1.13% 1.64% Current Quarter Target=80.0%ML 1-5 Go itfi and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 121112014.Previous performance reflects PIMCO. Recent Developments — During the quarter, $47.9 million was deposited into the total portfolio. $7.1 million was taken from the Long Term Operating Fund and $55 million was added to the Liquid Operating Monies. Organizational Issues N/A Manager Performance The yield curve steepened throughout October, then took an overnight jolt upwards following announcement of the presidential election results. Positive economic data and expectations of a Federal Open Market Committee (FOMC) rate hike drove yields upwards the remainder of the quarter. On December 14", the FOMC raised the target fed funds rate to 0.50-0.75%. They cited "solid" job numbers, "moderate" household spending, and steady economic expansion as supporting their decision. Following this announcement, Treasuries sold off. Rates softened from their peaks the last few days of December. Callan Orange county nitdm Dhtnd January 26,2017 During the quarter, the 5-year Treasury rose 79 bps to 1.93% and the 10-year increased 85 bps to 2.45%. The Bloomberg Barclays Aggregate Index gave up 3.0%, bringing its calendar year return to 2.7%. Government securities trailed the broader market for the three months (Barclays Government Index: -3.7%). Credit securities kept pace with broader market, also falling 3.0% (Barclays Credit Index). High yield continued its trend and led the other fixed income sectors throughout the quarter, returning 1.9%. For the calendar year, the sector produced an impressive 17.3% gain (MIL High Yield CP Index). Inflation protected securities fell 2.4% but led the broader market for the trailing 12 months, up 4.7% (Barclays U.S. TIPS Index). — The Long Term Operating Fund fell 0.80% in the quarter, beating the NIL 1-5 Govt/Corp Index (-1.02%) and ranking in the 92"" percentile versus peers. The portfolio was short duration (2.48 versus 2.76 years), which helped relative performance as interest rates rose across the curve throughout the quarter. The Long Term Operating Fund had less than 30% invested in credit and less than the permitted 20% invested in the combination of asset- backed securities, commercial mortgage backed securities, and CMOs as of December 31, 2016 (see page 21). The Liquid Operating Portfolio returned 0.08% (after fees) in the quarter, which tied the return of the 3-month Treasury (+0.08%). The Portfolio returned 0.32% (after fees) for the calendar year and ranked 22ntl percentile versus peers. Cordially, Gordon M. Weightman, CFA Vice President 2 Capital Market Review CA LLAN Callan INSTITUTE ` * CMR Preview Fourth Quarter 2016 This "Preview" contains excerpts from the upcoming Capital Broad Market Quarterly Returns Market Review(CMR) newsletter, which will be published in several weeks. U.S.Equly(Rusaen3000)_ 4.21% -1.25%E Non-US.Equity(MSCI ACWI ex USA) -2.98% _ U.S.Flood(Bloomberg Barclays Aggregate) Markets Trumped -10.26%- Nnn-U.a.Road(Bloomberg Barclaya Global as US) U.S. EQUITY I Lauren Mathias,CFA Caen(9o-0ay T-Bills) 16.09% Source'.Bloomberg Barclays,Merrill Lynch MSCI.Russell Investment Group The S&P 500 Index notched a +3.82% return for the fourth quarter after reaching an all-time high(2,239)just days before Treacherous Treasuries the end of 2016. Even more impressive was the return from small-capitalization companies(Russell 2000 Index:+8.83%), U.S. FIXED INCOME I Rufash Lama as was the divergence between value and growth across the size spectrum(RusselI 1000 Value Index:+6.68%vs.Russell The U.S.bond market experienced a tumultuous fourth quarter, 1000 Growth Index: +1.01%; Russell 2000 Value Index: triggered by the unexpected election results and strong eco- +14.07%vs. Russell 2000 Growth Index: 3.57%). nomic data,among otherfactom.The Bloomberg Barclays U.S. + Aggregate Bond Index dropped 2.98%,while the Bloomberg Continued on pg.2 Barclays High Yield Index rose 1.75%. But the year ended on an upbeat note,with the Aggregate up 2.65%and the High A Depressing Dollar Yield Index delivering equity-like returns at 17.13%. NON-U.S. EQUITY I Irina Sushch The yield curve rose following the presidential election and a During the final quarter of 2016,foreign developed and emerg- n upward revision for third quarter GDP to 3.5%, the highest ing markets Floundered in U.S.dollar terms despite hearty local Continued on pg.4 returns. Donald Trump's election drove U.S. stocks to record highs, as investors reacted positively to his business-friendly Big League Yields stances on taxes,trade, and regulations. The U.S. dollar hit a NON-U.S. FIXED INCOME I Kyle Fekele multi-year high versus the euro and the yen and appreciated roughly 7%compared to a basket of currencies. The U.S. dollar skyrocketed against a trade-weighted basket of Currencies on the back of the November U.S. election and That broad-based dollar strength detracted from overseas higher U.S. interest rates. Investment strategies with foreign returns for U.S. investors.The MSCI ACWI ex USA Index was currency exposure faced strong headwinds as the Bloomberg down 1.25%for the quarter(but up 4.93%in local currency).As Barclays Global Aggregate sx-US fell 10.26% (-1.86%on a in the previous quarter,the defensive-oriented sectors dragged hedged basis). Continued on pg.3 Continued on pg.5 Knowledge.Experience.Integrity. U.S. Equity: Markets Trumped Rolling One-year Relative Returns (vs.Russell 1000) Continued from pg. 1 e Russell 1000 GraMh a Russell 1000 Value a Ruxen 1000 30%____ The market in the fourth quarter was trumped by politics as the incoming Trump administration promised to lower personal and 20% - - - - - - - - - - - - - - - corporate income taxes, decrease business and environmen- tal regulation, and increase infrastructure spending. Investors 10%--- - - - - - - - - - - - - - - - - - - - - - - appeared to approve; November saw the highest monthly oft return of the quarter (+3.70%). Other tailwinds furthered the frenzy,including upwardly revised third quarter GDP(to 3.5%), -10%--- - - - - - - - - - - - - - - - - - - - - - - - subdued initial jobless claims, unemployment at the lowest level in nine years (4.6%), average wage growth of 2.9% in December, and a surging U.S. dollar; home and automobile ao% ...r„r,.r„r„..„r„....r„.... ..,r„...,r„.„.r„r„r„r„..... prices hit all-time highs,as did consumer confidence.In light of 97 96 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 the progress,the Fed Funds rate was increased in December Some:Russell investment croup to a range of 0.50%-0.75%. There are still pockets of uncer- tainty, however; across the pond the European Central Bank across market capitalizations, with the widest (1,050 bps) in continued quantitative easing and back at home a Tromp gov- small cap (Russell 2000 Value minus Russell 2000 Growth)— emment could mean higher debt and subsequently inflation. the most since the technology bubble burst in 2001. Sentiment is nonetheless revved up,at least for now. Sector performance reflected the style shift; the best-perform- U.S. equity was the preferred market globally; small cap par- ing sectors in the S&P 500 during the quarter were value-on- ticularly benefited from Trump-fueled enthusiasm. Micro and anted, including Financials (+21.10%), Energy (+7.28%), and small capitalization companies outpaced mid and large cap Materials (+4.70%). Within Financials, banks did especially stocks (Russell Microcap Index: +10.05%, Russell 2000 well, benefiting from both an increase in interest rates and Index:+8.83%, Russell Midcap Index: +3.21%, and Russell talk of deregulation. The Organization of Petroleum Exporting 1000 Index: +3.83%). Value regained its lead over growth in Countries(OPEC)agreed on oil production cuts in the quarter, all capitalizations; the dispersion in style returns was broad boosting energy stocks.In general companies with lower lever- age and higher operating margins and return on equity were preferred. The growth-oriented, momentum areas of the mar- Quarterly Performance of Select Sectors ket declined, including Health Care (-4.00%) and Consumer Staples (-2.02%). The new Real Estate sector, representing *Russell 10M •Russen 2000 2.9% of the S&P 500, finished the quarter down 4.41% as these investments tend to move in the apposite direction of i interest rates. i i U.S.equity valuations were elevated;the S&P 500Index Forward P/E was 16.9x at the end of the year versus the 25-year average id of 15.9x. In this environment active managers were challenged; -t7sx i outflows from this group have totaled over$1 trillion since 2005. Financial producer Consumer Rasim care However, a future with more volatility, lower returns, and higher serapes Durables staples interest rates would favor active management. Source:Riseal lmostmemcroup 2 1 Callan Non-U.S. Equity: A Depressing Dollar Rolling One-Year Relative Returns Continued from pg. 1 (vs.MSCI Word ex USA,USD hedged) e MSCI Nor. a MSCI Europe a MSCI Wprd ex USA down returns (Consumer Staples: -10.09%, Health Care: 40% -8.08%, REITs: -7.90%, Utilities: -7.19%). The interest rate- 30% sensitive sectors helped limit the damage (Energy: +8,32%, 20% Financials:+6.84%). 10%__ 0% In dollar-denominated results, emerging markets (MSCI -10%--- - - - - - --------- --- Emerging Markets Index: -4.16%) trailed their developed -20% peers(MSCI World ex USA Index:-0.36%,MSCI EAFE Index: -30% -0.71%).The MSCI ACWI ex USA Value Index(+3.29%)fared " ' ' i e]98 98 W O1 02 03 Od 05 OB W OB 09 ID 11 12 13 16 15 18 much better than the MSCI ACWI ex USA Growth Index Source:Msa (-5.72%).Small cap stocks joined growth and emerging market stocks at the bottom of the banal (MSCI ACWI ex USA Small brought up the rear.Across the sure zone,economically sensi- Cap Index: -3.52%). Despite multiple headwinds, the MSCI tive Financial (+11.45%)and Energy(+11.16%)stocks posted ACWI ex USA Index ended the year up 4.50%. healthy returns,while defensively-oriented REIT(-9.96%)and Utility(-9.40%)stocks faltered. The European Central Bank announced that it would extend its bond purchase program, although it plans to lower invest- In Southeast Asia and the Pacific, Japan's stimulus measures ments from E80 billion to E60 billion per month.The unemploy- boosted returns for local investors(+14.99%).But the dollar hit ment rate in the sure zone declined to 9.8%, the lowest since 14-year high versus the yen,hammering returns for U.S.inves- July 2009. Consumer prices licked up 0.6%year-over-year in tors (-0.16%). New Zealand had a rough quarter (-10.88%), November,and GDP was on track to increase at a 0.4%-0.5% although it closed out the year up 18.37%. Australia was the pace from 0.3% in the third quarter, based on early indica- only Country in the region to end the quarter in the black, up tions ahead of the release of the official figures in early 2017. 0.69%(and+11.45%for the year),buoyed by rebounding com- Against this backdrop,the MSCI Europe Index rose 5.44%in modify prices and higher interest rates.The MSCI Pacific Index the fourth quarter and 7.23%during the year for local investors; slumped 1.03%for the quarter,but rose for the year(+4.18%). however, in U.S.dollar terms,the Index was essentially fiat for the quarter and year(-0.40%for both periods). Italy(+10.75%) Despite the MSCI Emerging Markets Index's decline during the led the pack during the quarter, while Belgium (-11.80%) quarter, it jumped a robust 11.19% during 2016, buttressed by strengthening Commodity prices as well as reform efforts and accommodative monetary policies in several countries.Russia, Regional Quarterly Performance (U.S.Dollar) up 18.56%in the quarter and 54.82%for the year,and Brazil,up -0.16% MSCI Japan 2.05% in the quarter and 66.24%for the year, benefited richly 4.36% MSCI word ex USA from rising prices for oil and industrial commodities. China fell -0.40% .MSCI Europe during the quarter(.7.07%) but ended the year essentially gat -0.25% _MSCINCWI ex USA (+0.90%). Most emerging Asian markets gained ground during z.]zx -MSCI padre ex Japan the year(MSCI EM Asia:+6.14%),despite a rough fourth quar- ter(-6.06%),driven by economic reform and technology stocks. 4.16% -MSCI Emerging Whale Mexico dropped 7.88%for the quarter and 9.16%for the year, -7.07% MSCI china hurt by peso weakness and Trump's election. Source',MSCI Knowledge.Experience.Integrity. 1 3 U.S. Fixed Income: Treacherous Treasuries underperformed duration-matched Treasuries by 39 bps.Asset- Continued from pg. 1 backed securities (ABS)were off 0.70%for the quarter but up 2.03% for the year. Commercial mortgage-backed securities quarterly increase in two years.Yields rose across the maturity (CMBS)experienced a similar divergence,falling 3.03% in the spectrum. The benchmark 10-year Treasury note showed the quarter but rising 3.32%over the year. biggest change,ending the quarter at 2.45%(an increase of 85 bps). Yields on the 5-year and 30-year finished at 1.93% and In 2016,U.S.corporations set a milestone with new high yield 3.07%,respectively. and investment-grade issuances that totaled$1.5 trillion.The municipal bond market also set a record with new offerings Markets entered 2016 expecting four rate hikes, but the Fed totaling$445 billion. increased the Federal Funds rate only once, by 25 bps to a range of 0.50%-0.75%in December.As a result of rising yields, returns across the broad fixed income sector were negative Historical 10-Year Yields for the quarter. Tax-exempt municipal bonds and Treasuries dropped 3.62%and 3.84%,respectively.On a duration-adjusted *U.S.10-Year Tiea9uryYreM 010-Year TIPS Yield •Breakeven Inflation Rate basis, Treasuries underperformed credit securities by 156 bps. 5% Long Treasuries were hit particularly hard,falling 11.67%. 5% 4% _ _ _ _ _ _ _ _ _ _ ________ _ _ _ _ _ _ _ _ _ . Spreads tightened during the quarter. Investment-grade corpo- rate spreads over comparable Treasuries tightened 42 bps and 3% - - - - - - - - - - - - ----- - - - - - - - - - ended the yearat123bps—a stark contrasttothe firsthalfof the 2% _ _ _ _ _ _ _ _ _ _ __ __ year, in which spreads had widened up to 214 bps in February. 1% - - - Corporates declined 2.8%for the quarter,but generated a strong 0% return(+6.11%)for the year. On a duration-adjusted basis,long credit outperformed internediate credit by 330 bps. Despite a -1% 1 0 7 07 I OB. 1 09' 1 10. 1 11. 1 12� 1 13. 1 .14' 1 15. 1 .16' 1 slow start, high yield corporates made a powerful comeback to some:eloombarg end the year on a strong note;they delivered 407 bps of excess returns for the quarter. Mortgage-backed securities (MBS), plagued by rate volatility and elevated prepayment concerns, U.S.Treasury Yleld curves fell 1.97%for the quarter(but were up 1.67%for the year)and 9r oecember31.2016 •Se9temberw.2ots •oemmber at m1s 4% Fixed Income Index Quarterly Returns 3% _ _ _ _ _ _ ____ .2.98% - Bloombe9 B.d,sAggregate ..84% - BloombeR Barclays Treasury -1.96% - Bloomberg Bare.,.Agenties -3.03% - Bl.irbe9 Barclays CMBS -0.70% M Bloomberg BereeysABS 1% _ ____ _ _ _ _ _ _ _ _ _ ____________ -1.97% - Bloomberg Bare ays ME -2.97% - Bloombe9 Bamleys Ci, 0% Bloomberg BaMays Com.High Yield - 1.75% 1 1 1 15 1 1 1 1 0 5 10 20 25 30 -2.41% - Bloomberg B.i U.S.TIPS Mwilty(Yei Source'.Bloomberg Barclays Source:Bloomberg 4 1 Callan Non-U.S. Fixed Income: Big League Yields Emerging Spreads Over Developed (By Region) Continued from pg. 1 e Emerging Pmenms a Emerging EME4eumrs peassa ioi •Emerying Praia 8% Continuing 2016's anti-establishment geopolitical theme, Italians voted against reforms proposed by the govern- 6% ment, leading to Italian President Matteo Renzi's resigna- tion. In December, European Central Bank President Mario 4% _____. Draghi announced the extension of its stimulus program out to December 2017; however, the bond buying will be dialed 2% back to€60 billion per month,down from€60 billion.The ECB stressed that it is not "tapering" the stimulus program (i.e., b% . . . . . . . . . 12 13 14 15 16 reducing purchases to zero) and it stands ready to ramp up sparse:eisomosrg purchases again should it see fit.The quantitative easing pro- gram reached approximately E1.7 trillion in 2016,and should top E2.2 trillion by the end of 2017. 10-Year Global Government Bond Yields Yields on the 10-year German bund increased to 0.21%,224 bps 11,U.S.Treasury •Gam my 0 U.K. *Canada is Jagan below that of the 10-year Treasury. The U.S./German 10-year 6% debt spread reached the widest We been since 1990.The sure 5% declined 6.14%against the dollar. 4% 3%_____ The Bank of England (BOE) took a wait-and-see approach 2%________ ahead of the uncertainty surrounding the Brexit process.The 1%__________ BOE elected to hold the benchmark rate at 0.25%and main- tain the same rate of bond purchasing, saying the sferling's recent appreciation against the euro may curtail inflation.The -1%" " " „ " „ " " " or g"a ae � laI 11„ 11 13 14„ . .1s" 19 U.K. 10-year yield jumped 49 bps to 1.24% and the sterling declined 4.9% against the dollar. Changes to Japan's mon- Changeln 10-Year Yleldsfrom 301e1o401e etary policy were also put on hold as the unemployment rate u.s.Trearmay as bps reached a healthy level and a weakened yen stood poised to Germany - 3a bps boost potential earnings growth. The Bank of Japan upheld U.K. - 49 bps its pledge to keep the yield of 10-year Japanese debt near Canada 73 bps 0%; its yield settled at 0.05%.Set off by the U.S. presidential Japan 14 bps election,the yen dropped 13%. source.eioomberg Emerging market debt weakened and underperformed devel- oped markets. The local currency-denominated JP Morgan indices. However,emerging market sovereign debt proved to GBI-EM Global Diversified Index fell 6,09%. The USD- be one ofthe strongest asset classes in 2016,gaining roughly denominated JPM EM Global Diversified Index fell 4.02%. 10%in both JP Morgan indices,benefiting from the tailwind of Turkey and Mexico were among the worst performers in both increased commodity prices. Knowledge.Experience.Integrity. 1 5 Active Management Overview Market Overview Active Management vs Index Returns Market Overview The charts below illustrate the range of returns across managers in Callan's Separate Account database over the most recent one quarter and one year time periods. The database is broken down by asset class to illustrate the difference in returns across those asset classes.An appropriate index is also shown for each asset class for comparison purposes.As an example, the first bar in the upper chart illustrates the range of returns for domestic equity managers over the last quarter. The triangle represents the S&P 500 return. The number next to the triangle represents the ranking of the S&P 500 in the Large Cap Equity manager database. Range of Separate Account Manager Returns by Asset Class One Quarter Ended December 31,2016 20% 5% 0% 0)� E 5% (ae) 0% (6])r (5%) (to%) 9]1 (Is%) Lame Cep Small Cap Non-US Domestic Non-US Real EquNy Equity Equity Fixed Income Fixed Income Estate SSP 500 Ruaae112000 MSCIEAFE Blmbg Agar Btl Citi Non-US Gotl NCREIF Index 1 amp 8.55 1089 t23 (2 41) (4.38) 3.28 25M Percentile 6.5 12.12 0.00 255 (T26) 2.67 Metlian 3.79 890 ((1W))7 2.]3 ISM))) 1.8] 75th Percentile 0.61 3.40 (5.39) 2.98 �10.22) (1.05)90th Percentile (1.35) 0.2] Index • 882 883 (071) (2sln (1004) 1.]] Range of Separate Account Manager Returns by Asset Class One Year Ended December 31,2016 35% so% 25% c 20% 42) 15% 10% (35) 5% 0% (86)� I601 (5%) (10%) Barge Cap Small Cap Non-US Domestic NomUS Real E fty Equity Equity Fixed Income Fixed Income Estate Seem Russell 2000 MSCIEAFE BImb9 AN,Btl Giti Non US GON NCREIF Index 10th Percentile 16.83 30.34 6.19 443 7.90 13.37 25th Percentile 14.48 25.35 3.43 3.]9 4.49 10.78 Median 10.17 19.33 1.47 3.13 2.28 8.34 75ih Percentile 4.70 11.03 0.44 2.80 0.52 5.52 90th Percentile 1.60 5]0 3.]] 2.59 (0.88) (0.02) Callan • 11.96 21.31 1.00 2.65 1.80 8.01 Callan 0mtge County Sanitation District e Domestic Fixed Income Active Management Overview The 10-year U.S.Treasury yield rose 85 bps and returned-6.8%for the quarter in the sharpest quarterly selloff in more than two decades.TIPS outperformed nominal Treasuries, bolstered by rising expectations for inflation.The Bloomberg Barclays TIPS Index returned-2.4%for the quarter and the 10-year inflation breakeven rate widened to 1.95%as of December 30th. The Bloomberg Barclays U.S. Aggregate returned -3.0% for the quarter with the corporate sector performing the best, in spite of robust issuance. While long maturity corporates lost 5%, they performed well in relative terms, outperforming like-duration Treasuries by 436 bps. Mortgages underperformed Treasuries as durations extended with the increase in interest rates. Extended maturity returned -7.60% for the quarter, but was up by 7.28% for the year. High Yield managers underpeformed the Bloomberg High Yield Index for the year. Separate Account Style Group Median Returns for Quarter Ended December 31,2016 Blmbg Aggregate: (2,98%) 6% Blmbg High Yield: 1.75% Blmbg Long GoV/Cred: (7 a4%) 4% 2.13 o% E (0.33) o (2%) ------------ ———————————— (191) (2.73) (4%1 ____ ________ (6%) ______________________ (e%) 17ao) (10%) Defensive Interned Core Core Plus E4ended Bank HI9h Yield Bend Maturity Loans Separate Account Style Group Median Returns for One Year Ended December 31,2016 Blmbg Aggregate: 2.65% 20% Blmbg High Yield: 17.13% Blmbg Long GovlCre¢ 6,67% 15% __________________________________1676____ so C 10% N 7.28 2 33 13 1.56 0% Defensive Intermed Care Core Plus Extended Bank High YleH Band Maturity Loan. Callan Orange County sanitation Oi.tdtl g Asset Allocation Investment Manager Asset Allocation The table below contrasts the distribution of assets across the Fund's investment managers as of December 31, 2016,with the distribution as of September 30,2016.The change in asset distribution is broken down into the dollar change due to Net New Investment and the dollar change due to Investment Return. Asset Distribution Across Investment Managers December 31,2016 September 30,2016 Market Value Weight Net New Inv. Inv.Return Market Value Weight Domestic Fixed Income long Term Operating Fund' 316,787,228 73.70% (7.100.000) (2,316,151) 326.203.379 84a1% liquid Ooeratina Monies' 113.W.701 26.30% 55,000,000 55,409 57.999.291 15.09% Total Fund 0429,831,909 100.0% $47,900,000 $(2,260,742) 8384,192,871 100.0% 'Chandler replaced PIMCO during the 4th quarter of 2014.Assets were transferred In+lnd as of 12I0112014. Callan Orange County Sanitation District „ Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended December 31, 2016. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended December 31,2016 Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund^ (0.80%) 1.58% 1.47% 1.13% 2.08% Chandler (0.80%) 1.58% - - Blmbg GovUCred 1-5 Year Idx (1.05%) 1.56% 1.32% 1.29% 1.95% ML 1-5 Govt/Corp (1.02%) 1.62% 1.39% 1.39% 2.03% Liquid Operating Monies^ 0.12% 0.47% 0.26% 0.21% 0.22% Chandler 0.12% 0.47% - - - Ciliarouo3-Month Treasury Bill 0.08% 0.27% 0.11% 0.09% 0.09% Total Fund (0.70%) 1.15% 1.22% 0.97% 1.74% Target' (0,80%) 1,35% 1.14% 1,13% 1,64% 'Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/1/2014.Previous performance reflects PIMCO. Callan Oran,County Santlerinn DISNct 12 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended December 31, 2016. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended December 31,2016 Last Last Last 10 15 21.1/4 Years Years Years Domestic Fixed Income Long Term Operating Fund^ 3.25% 3.53% 4.47% Blmbg Govt/Cred 1-5 Year Idz 3.05% 3.29% 4.28% ML 1-5 GovUCorp 3.08% 3.29% 4.31% Liquid Operating Monies^ 0,97% 1.50% 2,69% Ciligrouo 3-Month Treasury Bill 0.73% 1.26% 2.37% Total Fund 2.81% 3.18% 4.20% Target* 2.61% 2.89% 3.92% Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/1/2014.Previous performance re0ects PIMCO. Callan Onar,County Santle,Inn fllstnd „ Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 2016 2015 2014 2013 2012 Domestic Fixed Income Long Term Operating Fund^ 1.58% 0.85% 1.98% (1.77%) 3.06% Chandler 1.58% 0.85% - - - Blmbg Govt/Cred 1-5 Year Idx 1.56% 0.97% 1.42% 0.28% 2.24% ML1-S GovUCom 1.62% 1.05% 1.51% 0.32% 2.47% Liquid Operating Monies^ 0.47% 0.22% 0.09% 0.13% 0.17% Chandler 0,47% 0,22% - - Citigrouo 3-Month Treasury Bill 0.27% 0.03% 0.03% 0.05% 0.07% Total Fund 1.15% 0.80% 1.73% (1.49%) 2.70% Target* 1.35% 0.85% 1.21% 0.26% 1.99% *Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. Callan were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan 0mr,s County Sandatlnn DisNtl 14 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 2011 2010 2009 2008 2007 Domestic Fixed Income Long Term Operating Fund^ 4.59% 4.42% 5.52% 5.37% 7.21% Blmbg Govt/Cred 1-5 Year Idx 3.14% 4.08% 4.62% 5,12% 7,27% ML1-5 GovUCorp 3.10% 4.17% 4.88% 4.65% 7.27% Liquid Operating Monies- 0,24% 0.25% 0.58% 2,40% 5,25% Cilioroup 3-Month Treasury Bill 0.08% 0.13% 0.16% 1.80% 4.74% Total Fund 3.70% 3.68% 4.65% 4.61% 6.84% Target` 2.49% 3.36% 3.93% 4.08% 6.76% Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan 0mr,,County sandatlnnDist c ,s Asset Class Risk and Return The charts below show the seven year annualized risk and return for each asset class component of the Total Fund.The first graph contrasts these values with those of the appropriate index for each asset class.The second chart contrasts them with the risk and return of the median portfolio in each of the appropriate CAI comparative databases. In each Case, the crosshairs on the chart represent the return and risk of the Total Fund. Seven Year Annualized Risk vs Return Asset Classes vs Benchmark Indices 2.5% 2 0% 70 1.5% N K 1 0% 0.5% 0.0% 0.0% 0.2% 0.4% 0.6% 0.8% 10% 1.2% 1.4% 1.6% 1.8% Standard Deviation Seven Year Annualized Risk vs Return Asset Classes vs Asset Class Median 2.0% 1.8% 16% ,a% 1.2% 1.0% N K 0.8% o6% 0.4% 0.2% 0.0% 0.0% 0.2% 04% 06% 0.8% 1.6% 1.2% 1.4% 1.6% 1.8% Callan Deviation Callan Onr� County Sanlation DIstnd 16 Manager Analysis Chandler-Long Term Operating Fund Period Ended December 31, 2016 Investment Philosophy Chandler Asset Management's Short Term Bond strategy is driven by quantitative models and focuses on active duration management,sector selection and term structure.The strategy seeks to achieve Consistent above-benchmark returns with low volatility relative to the style's performance benchmark. The firm has a unique focus on high quality fixed income management, and places risk control as a higher objective than return. Assets were transferred in kind to Chandler on 12/l/2014.Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Long Term Operating Fund's portfolio posted a (0.80)% Beginning Market Value $326,203,379 return for the quarter placing it in the 92 percentile of the CAI Net New Investment $-7,100,000 Defensive Fixed Income group for the quarter and in the 47 Investment Gains/(Losses) $-2,316,151 percentile for the last year. • Long Term Operating Fund's portfolio outperformed the ML Ending Market Value $316.787,228 1-5 Govt/Corp by 0.22%for the quarter and underperformed the ML 1-5 Govt/Corp for the year by 0,03%. Performance vs CAI Defensive Fixed Income(Gross) 6% 5% ( ) 4% 228)�81' 7 3% 11 11 1 11 ( )27)®6�2 ) 1% 05)®Bl4 31®N(5 31®Bf4731®A'fi 391®I 3 a% � ( (1%) 94). .B(9 (2%) LastW Last Chandler Last 3 Ym Last 5Ym Last 7Ym Lai Last20.5Yrs Yin Inception tom Percentile (a 15) 2.58 1.93 1.79 2.20 2.73 3.51 4.55 25m Percentile (025) 2.12 1,52 148 1.69 2.19 3.15 4.34 keeled (033) 1.51 1.23 1.19 1.29 1A 2.74 4.03 75m Percentile (ii 1.12 1.01 0.99 1.00 1.37 241 3.87 90m Percentile (068) 102 0.86 0,87 081 1.21 220 370 Long Term Operating Fund *A (0.80) 1.58 1,21 1.47 1.13 2.08 3.25 4.47 Finite,GOWCred 1-5 Year 1& •B (1.05) 1.56 1,27 1.32 1.29 1.95 3.05 4.28 ML 1-5 GaWCorp . (1.02) 102 1,33 1.39 1.39 2.03 3.08 4.31 CAI Defensive Fixed Income(Gross) Relative Return vs ML 1-5 Govt/Corp Annualized Seven Year Risk vs Return 2.0% 3.5% 30% __ __ __ ____ E 2.5% E , + m 2.0% o.o% ¢ (Os%) __ __ __ __ ____ 1.5% (1.0%) __ __ __ _ __ ____ 1.0% (1.5%) 0.5% 2010 2011 2012 2013 2014 2015 2016 00 0.5 1.0 1.5 2.0 Standard Deviation Long Term Operating Funtl Callan Orange County Santlation District 18 Long Term Operating Fund Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-adjusted and unadjusted basis.The first chart illustrates the manager's ranking over different periods versus the appropriate style group. The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last two charts illustrate the manager's ranking relative to their style using various nsk-adjusted return measures and returns for rising/declining periods. Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Performance vs CAI Defensive Fixed Income(Gross) 20% 1s% ( 5y ( ( 1 1 ) 14��811]�B(1N ®Bl �9 Bl OISA1 7 (10%) 2015 2015 2014 2013 2012 2011 2010 2009 2008 2007 loth Percentile 2.58 1.1s 1.50 1.20 446 272 4.]1 13.]4 6.63 ].03 25th Percentile 2.12 1.03 1.2] 0.80 2.60 2.28 4.02 860 S.64 6.83 Median 1.54 0.90 1.11 Us 1.81 18] Me 591 3s8 645 75th PementHe L12 0.76 O8] 041 146 165 2]2 253 0.1]) 5.66 90h Percentile 1.02 om 0.70 031 0.92 1.44 2.41 1.82 34]) 3.75 Long Tenn Opemung Fund *A 1,58 0.85 198 (117) 3.06 4.59 442 552 5.37 7.21 Blm GoWCretl -5 Year ldx eB 1.56 0.97 1.42 028 2.24 3.14 4.08 4.62 5.12 ].2] NIL 1-5 GOWCOT ♦ 1.62 1.05 1.51 032 2.47 3.10 4.17 4.88 4,65 ].2] Cumulative and Quarterly Relative Return vs MIL 1-5 GoWCorp 6% 4% 2% of 0% N (6%) (6%) 200] 2000 2009 2010 2011 2012 2013 M14 2015 2016 10 Long Tema Operating Fund M Blmbg GovVCred 1-5 Year Idx CAI Defensive Fixed Inc Risk Adjusted Return Measures vs ML 1-5 Govt/Corp Returns for Domestic Fixed-Income Rankings Against CAI Defensive Fixed Income(Gross) Rising/Declining Periods Seven Years Ended December 31,2016 Seven Years Ended December 31,2016 �A�99 (291�B�32� T1( A 95 010 gg 0 201612 AIPha Sharpe Excess Retum 201812 Ratio Rafie fah Pememae 2.]3 ram Percentile us 2.1a o.]1 251h Percentile 2.19 251h Nneandle 0.82 188 0.19 Median 1A Medlan OA3 t 11 (039) 75th PemeMile 1.37 7511,Percentile 023 148 (091) 901h PemeMile 121 901 Percentile 0.02 1.28 (OIJ2) Long Tam Long Term Operating Fund eA 2.06 Operating Fund •A (0.17) 1.07 006 Rm GOWCmtl g GOWCretl SVaer 1& ■B 1.95 Singh?-5 Year Idx ■B (0.07) 1.27 (o90) MIL 1-5 GovVCorp ♦ 2.03 Callan Orange County sanitation District 1g Long Term Operating Fund Bond Characteristics Analysis Summary Portfolio Characteristics This graph compares the managers portfolio characteristics with the range of characteristics for the portfolios which make up the manager's style group. This analysis illustrates whether the manager's current holdings are Consistent with other managers employing the same style. Fixed Income Portfolio Characteristics Rankings Against CAI Defensive Fixed Income as of December 31,2016 35 3.0 2.5 (4)�18) �(��) 20 (35 1 5 (52)�(86) •130) 1.0 0.5 0.0 (0.5) A-90 astatine Coupon CA Duration Llte Yield Rate Convexity 101h Pen en11: 2.36 2.89 2.40 2.68 0.13 25th PercenN 2.02 2.29 2.02 2.31 006 Median 1.85 2.00 1.76 1.96 0.04 ]Sth Percenfile 1.]5 1.8] 1.51 1.80 002 901h Pemen0le 1.59 1.fi6 1.33 1.32 (0.01) Long Term Operating Fund • 2.48 2.56 1.57 1.65 - ainnit, v/Cr1-5Yr ♦ 2.76 2.88 1.73 2.22 009 Sector Allocation and Quality Ratings The first graph compares the managers sector allocation with the average allocation across all the members of the manager's style.The second graph compares the manager's weighted average quality rating with the range of quality ratings for the style. Sector Allocation Quality Ratings December 31,2016 vs CAI Defensive Fixed Income rsy Us Tr, zs.� AAA RMBS Cora(hKI 144A) (16 aher AA •(° ) ASS Cash Ai Tax-Exempt US Muni A CMOs A- Weighted Average Quality Rating CMBS loth Percentile AAA 25m 25U Percentile AA Gov Related Median AA Pentile AA- 90M 9oUPmercentile A o% 10% 20% 30% 60% BO% 60% ]o% 80% Long Term Operating Fund CAI Defensive Fixed Inoame Long Term Operating Fund t♦ AA Callan Gov/Cr 1-5 Vr Blmbg Gov/Cr 1-5 Yr ♦ AA* Callan Grange County Sandation Dletdol 20 Long Term Operating Fund Portfolio Characteristics Summary As of December 31, 2016 Portfolio Structure Comparison The charts below compare the structure of the portfolio to that of the index from the three perspectives that have the greatest influence on return. The first chart compares the two portfolios across sectors. The second chart compares the duration distribution.The last chart compares the distribution across quality ratings. Sector Allocation US Tray US Tray 30% 59% CMBS ABS % )% Ceah 2% RMBS 24% Other 12% 4013% v Related Tax-Dampt us Muni 2% CMOs Corp(ind 144A) Corp(ml 144A) 1% 28% 22% Long Term Operating Fund Blmbg GoWCredit 1.5 Year Weighted Average: Duration Duration Distribution ■ Long Term Operating Fund: 2.48 70% ■ Blmbg GoWC%dit 1-5 Year: 2.76 0 60% ----------58.6_ ------ ------ 0 so% _________ ______ ______ __T __ d 40% -- 41.1 33.6 c 20% ___io% __ ______ __ __ 0% 0.3 3.4 <1 1-3 35 5-0 7-10 NO Years Duration kGoWCmdit ouallty Quality Distribution ating Fund M 100% dit l-5 Year: AAr p so% ______ ___ ___ __ ___ ___ ___ ___68.4 65.0 50% _ _ ___ ___ __ ___ ___ ___40% _ _ _ ___ ___ m 29% ss 1os�'.8 —127 d ).2 3.4 4.8 g% APA M A BBB Be B CCC CC C 0 NIR Quality Rating Callan orange County SenBation Distdd 21 Chandler-Liquid Operating Money Period Ended December 31, 2016 Investment Philosophy Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Liquid Operating Money Net's portfolio posted a 0,08% Beginning Market Value $57.989,291 return for the quarter placing it in the 25 percentile of the CAI Net New Investment $55,000,000 Money Market Funds group for the quarter and in the 22 percentile for the last year. Investment Gains/(Losses) $55,409 • Liquid Operating Money Net's portfolio outperformed the Ending Market Value $113,044,701 Citigroup 3-Month Treasury Bill by 0.00%for the quarter and outperformed the Citigroup 3-Month Treasury Bill for the year by 0.05%. Performance vs CAI Money Market Funds(Net) 3.0% 2. �(15 2.0% B) 0% 1.5% 1.0% 49)®(26 0.5% 6) on% 26) (25 26) (20 2a) (24 29) 26 1]) 21 Last Otr Last Chandler Last 3Yrs Last 5Yrs Last 7Yrs LaMIOYrs Last20.5Yrs Yr Inception 10T Percentile 0.1] 0]1 0.34 0.24 0,18 0.15 096 262 25M Percentile 0.08 028 0.15 0.11 0.07 0.05 0.82 2.44 Median 0.04 0.10 0.06 0.04 0.03 0.02 0.]2 2.29 ]5UPementlle 000 001 0.01 0.01 0.01 001 063 2.1] 90,Perwntile 000 000 000 0,00 0.00 0W 055 201 Llquld Operating Money Net • 008 032 0.19 0,11 0.06 OW 082 254 Cidgmup 3-Month Treasury Bill ♦ 0.08 027 0.15 0.11 0.09 0.09 0.73 2.37 Relative Returns vs CAI Money Market Funds(Net) Citigroup 3-Month Treasury Bill Annualized Seven Year Risk vs Return 0.10% 20% 008% __ __ __ __ __ ____ 5% E 004% __ 1.0% f y 0.02% __ > 'o d 0.00% tt 0.5% 0.0% (0.06%) (0.5%) 2010 2011 2012 2013 2014 2015 2016 (02) 0.0 02 04 06 06 1.0 12 1A Liquid operating Money Net Standard Deviation Callan OrsnBre County Sengaticn Doffict Liquid Operating Money Net Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-adjusted and unadjusted basis.The first chart illustrates the manager's ranking over different periods versus the appropriate style group. The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last chart illustrates the manager's ranking relative to their style using various nsk-adjusted return measures. Assets were transferred in kind to Chandler on 12M/2014. Previous performance reflects PIMCO. Performance vs CAI Money Market Funds(Net) 6% 5% 48®16 4% 3% 2% 61®3] 0% 22 14 (1%) 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 10lh Percende 0.71 011 00] 008 0.18 008 OA5 052 2.]] 5.20 25th Peronale 0.28 003 002 002 0.03 002 005 028 2.46 4.99 Median 0.10 0.01 0.01 0.01 0.01 0.01 0.01 0.12 2.03 4.71 75th Pecendle 0.01 0.00 0.01 0.00 0.01 0.00 0.01 0.03 146 4.34 90h Percende 0.00 0.00 000 0.00 0.00 000 000 0)l 1.08 3.89 Liquid Operating Money Net a 0.32 0.07 (0.06) (002) 0.02 0.09 0.10 0.43 2.25 5.09 Citigroup 3-MorM Tmexury6111 ♦ 0.27 0.03 0.03 005 0.07 ON 0.13 0.16 1.80 4.74 Cumulative and Quarterly Relative Return vs Citigroup 3-Month Treasury Bill 'u o.s% u - 0.0%- d (1.0%) 200] 2008 2009 2010 Mill 2012 2013 M14 2015 2016 10 Liquid Opereting Money Net 0CAI Money Market Funda Risk Adjusted Return Measures vs Citigroup 3-Month Treasury BIII Rankings Against CAI Money Market Funds(Net) Seven Years Ended December 31,2016 2 0 (1) �(19) •120) 2) M (4) /dphe SM1 rpe Excess Return Rat. Ratio 10h Percentile 0.06 0.43 IA3 25th Percentile (0.03) 11.491 1.1] Median P05) 4 1.9a 75th Percenule (0.06) 901h Percentile (0.07) Liquid Operating Money Net • M04) (0.69) (0.51) Callan Oraroe County Sandation Distdct 21 Callan Research/Education CALLAN Callan INSTITUTE 4th Quarter 2016 Education Research and Educational Programs The Callan Institute provides research that updates clients on the latest industry trends while helping them learn through carefully struc- tured educational programs.Visit www.callan.convresearch to see all of our publications,or for more information contact Anna West at 415.974.5060/institute@wllan.com. New Research from Callan's Experts 2017 Defined Contribution Trends Survey I Callan's 10th ESG and Investors: What, Why, and Who I In this video, Annual DC Trends Survey highlights plan sponsors' key Mark Wood, CFA, of Callan's Global Manager Research themes from 2016 and expectations for 2017. group explains ESG investing principles and how asset man- ESG Factors: U.S. Investor Usage Crystalizes I This agers can implement them. charticle looks at environmental, social, and Momentum: The Trend Is Your Friend I Callan's director governance (ESG) factors from the perspectives of Hedge Fund Research, Jim McKee, explores the advan- of U.S. asset owners and global investment tages of momentum-based investing strategies, which profit managers, revealing the growing incorporation of from market trends in whichever direction. He discusses the ESG factors in investment decision making. mfionale behind them, how they are defined and harnessed Fixedfor different diversification needs, and whether they are ap- Octob r 2016 AMional orkshonomic LightningR alternd I ativean's propriale for fund sponsors. October 2016 Regional Workshop addressed alternative fixed income strategies to deal with the shifting market and Periodicals economic environment investors face, as the extended pe- private Markets Trends, Fall 2016 1 Gary Robertson, man- Hod of low yields in the wake of the Global Financial Crisis ager of Callan's Private Equity Research group, discusses appears to be ending. the steady performance of private markets in 2016,with year- ESG Interest and Implementation Survey I Callan's fourth to-dale figures tracking very close to 2015's levels. annual survey on the status of ESG factor integration in the DC Observer,3rd Quarter 2016 1 This quarter's cover story U.S. institutional market reflects responses from 84 funds is"Merging DC Plans: Making the Transition Smooth" representing approximately$843 billion in assets. 2016 Cost Doing Business Survey In this survey, Hedge Fund Monitor, 3rd Quarter 2016 1 This quarter's cover story is"Musketeers or Mercenaries...,"on the growing Callan compares es the costs of administering and operating appeal of the multi-strategy hedge fund category. funds and trusts across all types of tax-exempt and tax- Capital Market Review, 3rd Quarter 2016 1 A quarterly - -' qualified organizations in the macroeconomic newsletter providing thoughtful insights ., U.S. We identify practices and on the economy and recent performance in equity, fixed in- trends to help institutional in- come,alternatives, international,real estate,and other capi- vestors manage expenses. tal markets. The Center for Investment Training Events Educational Sessions Miss out on a Callan conference or workshop? Event summa- The Center for Investment Training, better known as the "Callan des and speakers presentations are available on our websile: College;provides a foundation of knowledge for industry profes- https://w ..calian.com/education/Cil/ sionals who are Involved in the investment decision-making pro- Mark your calendars for our National Conference, January 23— cess.It was founded in 1994 to provide clients and non-clients alike 25,2017,at the Palace Hotel in San Francisco. with basic-to intermediate-level instruction.Our next sessions are: Introduction to Investments For more information about events, please contact Barb San Francisco,April 18-19,2017 Gerraty:415.274.30931 gerraty@callan.com San Francisco,July 25-26,, 2017 Chicago, October 24-25,2017 This program familiarizes fund sponsor trustees, staff, and asset management advisors with basic investment theory,terminology, and practices. It lasts one-and-a-half days and is designed for in- dividuals who have less than two years of experience with asset. management oversight and/or support responsibilities.Tuition for the Introductory "Callan College" session is $2,350 per person. Tuition includes instruction, all materials, breakfast and lunch on each day,and dinner on the first evening with the instructors. Customized Sessions The 'Callan College" is equipped to customize a curriculum to meet the training and educational needs of a specific organization. These tailored sessions range from basic to advanced and can take place anywhere—even at your office. Learn more at https://www.callan.com/education/college/or contact Kathleen Cu nnie:415.274.30291 can nie@callan.com Education: By the Numbers 500 Attendees(on average)of the 50+ Unique pieces of research the Institutes annual National Conference Institute generates each year 3 500 Total attendees of the'Callan 1980 Year the Callan Institute College since 1994 was founded "We think the best way to learn something is to teach it. Entrusting client education to our consultants and specialists ensures that they have a total command of their subject matter. This is one reason why education and research have been cornerstones of our firm for more than 40 years." Ron Peyton,Chairman and CEO Callan 9 @CallanAssoc ®Callan Associates Definitions Risk/Reward Statistics The risk statistics used in this report examine performance characteristics of a manager or a portfolio relative to a benchmark (market indicator) which assumes to represent overall movements in the asset class being considered. The main unit of analysis is the excess return, which is the portfolio return minus the return on a risk free asset (3 month T-Bill). Alpha measures a portfolio's return in excess of the market return adjusted for risk. It is a measure of the manager's contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk which was taken for that level of market exposure. Beta measures the sensitivity of miss of portfolio returns to movements in the market index. A portfolio's beta measures the expected change in return per 1%change in the return on the market. If a beta of a portfolio is 1.5, a 1 percent increase in the return on the market will result,on average, in a 1.5 percent increase in the return on the portfolio. The converse would also be true. Downside Risk stems from the desire to differentiate between "good risk" (upside volatility) and "bad risk" (downside volatility). Whereas standard deviation punishes both upside and downside volatility, downside risk measures only the standard deviation of returns below the target.Returns above the target are assigned a deviation of zero. Both the frequency and magnitude of underperformance affect the amount of downside risk. Excess Return Ratio is a measure of risk adjusted relative return. This ratio captures the amount of active management performance (value added relative to an index) per unit of active management risk (tracking error against the index.) It is calculated by dividing the manager's annualized cumulative excess return relative to the index by the standard deviation of the individual quarterly excess returns. The Excess Return Ratio can be interpreted as the manager's active riskheward tradeoff for diverging from the index when the index is mandated to be the"riskless"market position. Information Ratio measures the manager's market risk-adjusted excess return per unit of residual risk relative to a benchmark. It is computed by dividing alpha by the residual risk over a given time period. Assuming all other factors being equal, managers with lower residual risk achieve higher values in the information ratio. Managers with higher information ratios will add value relative to the benchmark more reliably and consistently. R-Squared indicates the extent to which the variability of the portfolio returns are explained by market action. It can also be thought of as measuring the diversification relative to the appropriate benchmark. An r-squared value of.75 indicates that 75% of the fluctuation in a portfolio return is explained by market action. An r-squared of 1.0 indicates that a portfolio's returns are entirely related to the market and it is not influenced by other factors. An r-squared of zero indicates that no relationship exists between the portfolio's return and the market. Relative Standard Deviation is a simple measure of a managers risk(volatility)relative to a benchmark. It is calculated by dividing the manager's standard deviation of returns by the benchmark's standard deviation of returns. A relative standard deviation of 1.20, for example, means the manager has exhibited 20% more risk than the benchmark over that time period. A ratio of .80 would imply 20% less risk. This ratio is especially useful when analyzing the risk of investment grade fixed-income products where actual historical durations are not available. By using this relative risk measure over rolling time periods one can illustrate the "implied" historical duration patterns of the portfolio versus the benchmark. Residual Portfolio Risk is the unsystematic risk of a fund,the portion of the total risk unique to the fund(manager)itself and not related to the overall market. This reflects the"bets"which the manager places in that particular asset market. These bets may reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager considers a good investment opportunity. Diversification of the portfolio will reduce or eliminate the residual risk of that portfolio. Callan 28 Risk/Reward Statistics Sharpe Ratio is a commonly used measure of risk-adjusted return. It is calculated by subtracting the "risk-free" return (usually 3 Month Treasury Bill)from the portfolio return and dividing the resulting"excess retum" by the portfolio's risk level (standard deviation).The result is a measure of return gained per unit of risk taken. Sortino Ratio is a downside nsk-adjusted measure of value-added. It measures excess return over a benchmark divided by downside risk. The natural appeal is that it identifies value-added per unit of truly bad risk. The danger of interpretation, however, lies in these two areas: (1)the statistical significance of the denominator,and (2)its reliance on the persistence of skewness in return distributions. Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of the observations from their sample mean. Standard deviation is used as an estimate of risk since it measures how wide the range of returns typically is. The wider the typical range of returns,the higher the standard deviation of returns,and the higher the portfolio risk. If returns are normally distributed (ie. has a bell shaped curve distribution) then approximately W of the returns would occur within plus or minus one standard deviation from the sample mean. Total Portfolio Risk is a measure of the volatility of the quarterly excess returns of an asset. Total risk is composed of two measures of risk: market(non-diversifiable or systematic)risk and residual(diversifiable or unsystematic)risk. The purpose of portfolio diversification is to reduce the residual disk of the portfolio. Tracking Error is a statistical measure of a portfolio's risk relative to an index. It reflects the standard deviation of a portfolio's individual quarterly or monthly returns from the index's returns. Typically, the lower the Tracking Error, the more "index-like'the portfolio. Traynor Ratio represents the portfolio's average excess return over a specked period divided by the beta relative to its benchmark over that same period. This measure reflects the reward over the risk-free rate relative to the systematic risk assumed. Note:Alpha,Total Risk,and Residual Risk are annualized. Callan 29 Fixed Income Portfolio Characteristics All Portfolio Characteristics are derived by first calculating the characteristics for each security, and then calculating the market value weighted average of these values for the portfolio. Allocation by Sector- Sector allocation is one of the tools which managers often use to add value without impacting the duration of the portfolio. The sector weights exhibit can be used to contrast a portfolio's weights with those of the index to identify any significant sector bets. Average Coupon-The average coupon is the market value weighted average coupon of all securities in the portfolio. The total portfolio coupon payments per year are divided by the total portfolio par value. Average Moody's Rating for Total Portfolio- A measure of the credit quality as determined by the individual security ratings. The ratings for each security, from Moody's Investor Service, are compiled into a composite rating for the whole portfolio. Quality symbols range from Aaa+ (highest investment quality-lowest credit risk)to C (lowest investment quality- highesl credit risk). Average Option Adjusted(Effective)Convexity-Convexity is a measure of the portfolio's exposure to interest rate risk. It is a measure of how much the duration of the portfolio will change given a change in interest rates. Generally,securities with negative convexities are considered to be risky in that changes in interest rates will result in disadvantageous changes in duration. When a security's duration changes it indicates that the stream of expected future cash-flows has changed, generally having a significant impact on the value of the security. The option adjusted convexity for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Option Adjusted(Effective)Duration- Duration is one measure of the portfolio's exposure to interest rate risk. Generally, the higher a portfolio's duration, the more that its value will change in response to interest rate changes. The option adjusted duration for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Price-The average price is equal to the portfolio market value divided by the number of securities in the portfolio. Portfolios with an average price above par will tend to generate more current income than those with an average price below par. Average Years to Expected Maturity-This is a measure of the market-value-weighted average of the years to expected maturity across all of the securities in the portfolio. Expected years to maturity takes into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Years to Stated Maturity- The average years to stated maturity is the market value weighted average time to stated maturity for all securities in the portfolio. This measure does not take into account imbedded options, sinking fund paydowns,or prepayments. Current Yield-The current yield is the current annual income generated by the total portfolio market value. It is equal to the total portfolio coupon payments per year divided by the current total portfolio market value. Callan 30 Fixed Income Portfolio Characteristics Duration Dispersion- Duration dispersion is the market-value weighted standard deviation of the portfolio's individual security durations around the total portfolio duration. The higher the dispersion, the more variable the security durations relative to the total portfolio duration ('barbellness"), and the smaller the dispersion, the more concentrated the holdings' durations around the overall portfolios ('bulletness"). The purpose of this statistic is to gauge the "bullelness" or "barbellness"of a portfolio relative to its total duration and to that of its benchmark index. Effective Yield-The effective yield is the actual total annualized return that would be realized if all securities in the portfolio were held to their expected maturities. Effective yield is calculated as the internal rate of return, using the current market value and all expected future interest and principal cash Flows. This measure incorporates sinking fund paydowns, expected mortgage principal prepayments,and the exercise of any"in-the-money"imbedded put or call options. Weighted Average Life-The weighted average life of a security is the weighted average time to payment of all remaining principal. It is calculated by multiplying each expected future principal payment amount by the time left to the payment. This amount is then divided by the total amount of principal remaining. Weighted average life is commonly used as a measure of the investment life for pass-through security types for comparison to non-pass-through securities. Callan 31 Disclosures Callan ll Quarterly List as of December 31, 2016 List of Callan's Investment Manager Clients Confidential—For Callan Client Use Only Callan takes its fiduciary and disclosure responsibilities to clients very seriously.We recognize that there are numerous potential conflicts of interest encountered in the investment consulting industry and that it is our responsibility to manage those conflicts effectively and in the best interest of our clients. At Callan,we employ a robust process to Identify,manage,monkor and disclose potential conflicts on an on-going basis. The list below is an important component of our conflicts management and disclosure process. It identifies those investment managers that pay Callan fees for educational,consulting,software,database or reporting products and services. We update the list quarterly because we believe that our fund sponsor clients should know the investment managers that do business with Callan,particularly those investment manager clients that the fund sponsor clients may be using or considering using.Please refer to Callan's ADV Part 2A for a more detailed description of the services and products that Callan makes available to investment manager clients through our Institutional Consulting Group,Independent Adviser Group and Fund Sponsor Consulting Group. Due to the complex corporate and organizational ownership structures of many investment management firms,parent and affiliate firm relationships are not indicated on our list. Fund sponsor clients may request a copy of the most currently available list at any time.Fund sponsor clients may also request specific information regarding the fees paid to Callan by particular fund manager clients. Per company policy,Information requests regarding fees are handled exclusively by Callan'a Compliance Department. Manager Name Manager Name 111111 16G7 Capital Partner,LLC Cambiar Investors,LLC 0 Aberdeen Asset Management PLC Capital Group Acadian Asset Management LLC Castlei Management,LLC 111111 AEGON USA Investment Management Causeway Capital Management Affiliated Managers Group,Inc. Channing Capi Management,LLC AllianceBernstein Chartwell Investment Partners Allianz Global Investors Clears ridge Investments,LLC Allianz Ufa Insurance Company of North Amerce Cohen&Steers Capital Management,Inc. American Century Investment Management Columbia Management Investment Advisers,LLC Amundi Smith Breeden LLC Columbia Threadneedle Investments Analytic Investors Columbus Circle Investors Angelo,Gordon&Co. Corbin Capital Partners,L.P. Apollo Global Management Cornerstone Capital Management AQR Capital Management Cramer Rosenthal McGlynn,LLC Area Management LLC Credd Suisse Asset Management Adel Investments,LLC Crestline Investors,Inc. Aristotle Capital Management,LLC D.E.Shaw Investment Management,L.L.C. Artisan Holdings Delaware Investments Atlanta Capital Management Co.,LLC DePrince,Race&Zollo,Inc. Aviva Investors Americas Deutsche Asset Management AM Investment Managers Diamond Hill Capital Management,Inc. Babson Capital Management Duff&Phelps Investment Mgmt.Co. Battle Gifford Overseas Limited Eagle Asset Management,Inc. Baird Advisors EARNEST Partners,LLC Bank of America Eaton Vance Management Baring Asset Management Epoch Investment Partners,Inc. Barings LLC Fayez Sandi&Company Baron Capital Management.Inc. Federated Investors Barrow,Hanley,Mewhlnney&Strauss,LLC Fidelity Institutional Asset Management BlackRock Fism Capital Global Asset Management HMO Global Asset Management First Eagle Investment Management,LLC BNP Paribas Investment Partners First Hawaiian Bank Wealth Management Division BNY Mellon Asset Management First Quadrant L.P. Boston Panders Fisher Investments Brandes Investment Partners,L.P. Fort Washington Investment Advisors,Inc. Brandywine Global Investment Management.LLC Franklin Templeton Institutional Brown Bingham Harriman&Company Fred Alger Management,Inc. Callan I Knowledge.Experience.Integrity. Page 1 of 2 Manager Name Manager Name Fuller&Thaler Asset Management,Inc. Opus Capital Management Inc. GAM(USA)Inc. Pacific Investment Management Company GE Asset Management Parametric Portfolio Associates GMO Peregrine Capital Management,Inc. Goldman Sachs Asset Management PGIM Guggenheim Investments PGIM Fixed In.. GW&K Investment Management Plead Asset Management Ltd. Harbor Capital Group Trust PineBddge Investments Hartford Funds Pinnacle Asset Management L.P. Hartford!Investment Management Co. Pioneer Investments Henderson Global Investors PNC Capital Advisors,LLC Holland Capital Management Pdncipal Global Investors Hotchkis&Wiley Capital Management,LLC Private Advisors,LLC HSBC Global Asset Management Putnam Investments,LLC Income Research a Management Inc. OMA(Quantitative Management Associates) Insight Investment Management Limited RBC Global Asset Management Institutional Capital LLC Regions Financial Corporation INTECH Investment Management,LLC RidgeWodh Captal Management Inc. Invasion Rockefeller&Co.,Inc. Investec Asset Management Rothschild Asset Management,Inc. Ivy Investments Russell Investments Janus Capital Management,LLC Santander Global Facilities Jennison Associates LLC Schroder Investment Management North America Inc. Jensen Investment Management Scout Investments J.P.Morgan Asset Management SEI Investments KeyCom Smith,Graham&Co.Investment Advisors,L.P. Lazard Asset Management Smith Group Asset Management Legal&General Investment Management America Standard Life Investments Limited Lincoln National Corporation Standish LMCG Investments,LLC State Street Global Advisors Logan Capital Management Stone Harbor Investment Partners,L.P. Logan Circle Partners,L.P. Systematic Financial Management Longview Partners T.Rowe Price Associates,Inc. Loomis,Bayles&Company,L.P. Tapir,Carl&Habacht Lord Abbet&Company The Boston Company Asset Management,LLC Los Angeles Capital Management The Davis Companies LSV Asset Management The Hartford MacKay Shields LLC The London Company Man Investments Inc. The TOW Group,Inc. Manning&Napier Advisors,LLC Thompson,Siegel&Wool LLC Manulife Asset Management Timberland Investment Resources,LLC Martin Coma Inc. ToSlar Trust Bank Mellon Capital Management UBS Asset Management MFS Investment Management Van Eck Global MidFirst Bank Versus Capital Group Mondrian Investment Partners Limited Victory Capital Management Inc. Montag&Cald ll,LLC Vontobel Asset Management,Inc. Morgan Stanley Investment Management Vol Financial Mountain Lake Investment Management LLC Voya Investment Management(Bra ING) MUFG Union Bank,N.A. Waddell&Reed Asset Management Group - Neuberger Berman WCM Investment Management Newton Investment Management(fia Newton Capital Management) WEDGE Capital Management Nicholas Investment Partners Wellington Management Company,LLP Nikko Asset Management Co.,Ltd, Wells Capital Management Northern That Asset Management Western Asset Management Company Nuveen Investments,Inc. William Blair&Company OFI Global Asset Management Windham Capital Management,LLC Old Mutual Asset Management Callan I Knowledge.Experience.Integrity. Page 2 of 2 December 31,2016 Investment Report Orange County Sanitation District Period Ending December 31, 2016 R I Table of Contents SECTION 1 Economic Update SECTION 2 Account Profile SECTION 3 Consolidated Information SECTION 4 Portfolio Holdings I Pr SECTION 1 Economic Update 0111 Economic Update ■ The Federal Open Market Committee (FOMC) unanimously voted to increase the target fed funds rate by 25 basis points to a range of 0.50%-0.75%, at the December 14 meeting. The Fed noted that economic activity has expanded at a moderate pace and labor market trends have improved, but inflation remains below target. The Fed's revised"dot plot" was slightly more hawkish, as the projected path of the fed funds rate was revised upward. The Committee's GDP and inflation forecasts were little changed while projections for the unemployment rate were revised down slightly. The FOMC's median projection for the fed funds rate in 2017 was revised up to 1.4°% from 1.1%, which would be indicative of three more 25 basis point rate hikes next year.The Fed's longer-run median fed funds target rate was revised up to 3.0% from 2.9%. Fed Chair Yellen downplayed the forecast changes during her press conference, and continued to emphasize that future increases in the fed funds rate are expected to be gradual. She added that it is too early to anticipate how potential changes in fiscal policy will impact the economy and the Fed's outlook. ■ Domestic economic data remains indicative of slow growth. The U.S. labor market continues to improve, consumer confidence remains strong, and housing trends remain mostly favorable. The manufacturing sector has also improved. Third quarter 2016 GDP grew 3.5%, following growth of 1.4% in the second quarter and 0.8% in the first quarter. Market participants estimate GDP grew 2.2%in the fourth quarter. ■ In December, the yield shifted upward as the 2-year Treasury yield increased nearly 8 basis points and the 10-year Treasury yield increased about 6 basis points. The move up in rates over the past two months has largely been driven by heightened expectations for fiscal stimulus, and a potential increase in inflation, in light of President-elect Trump's victory and the Republican Party congressional sweep in the US. Global factors (including steeper yield curves in Japan and Germany, and an expectation for ongoing stimulus from the European Central Bank) also continue to influence US Treasury yields. s Cjjjj Employment Nonfarm Payroll (000's) Unemployment Rate 350 15.0% 14.0% .1-1 Rab(U6) 3W 13.0% �Unempbyment Rate(W) 250 12.0% 11.0% 200 u 10.0% c s 150 9.0% UV 8.0% i 0 V 7.0% 6.0% 50 5.0% 0 4.0% okil ",le ✓G�J.16 S% 41`1& 44,1S 70 `ASS Q 16 OBC7� 44"7s ✓G7 7$ Q 'S 4j.,'s ✓V20 tC�l's Q 's Scu :USOe da ntaf Labw Sw :USCepaNnent&Labpt `4 �l Nonfarm payrolls were lower than expected in December, up 156,000 versus the consensus forecast of 175,000. However, October and November payrolls were revised up by a total of 19,000. On a trailing 3-month and 6-month basis, payrolls increased by an average of 165,000 and 188,500 per month, respectively. The unemployment rate inched back up to 4.7%from 4.6%, but the participation rate also increased to 62.7% from 62.6%. A broader measure of unemployment called the U-6, which includes those who are marginally attached to the labor force and employed part time for economic reasons, declined to 9.2% in December from 9.3% in November. Wages were up a solid 0.4% in December, versus expectations for a 0.3%increase. On a year-over-year basis, wages were up 2.9% in December(the highest year-over-year increase since June 2009), vs.2.5% in November. llll� Cjjjj Inflation Consumer Price Index(CPI) Personal Consumption Expenditures 3.0% (PCE) CPI YOY%CM1enge 3.0% Z'S% �Cm CPI YOY%LM1ange 25% PCE Poce-lalor YOY%Cl,enge PCE C.O fttar YOY%CM1mge ym 2.0% 2.0% c O1 s 1.5% 1.5% U Y1.0% 1.0% 0.5% } 0.5% 0.0% 0.0% 05% S -a5% a O� y°, n. a 0% aOa; �. x �'a �Oa; �, 41.1 "a +Ok 7V ,�s 7S 7S �S 1s �s 76 �a 7Y IS IS 1S >s 's >s 1s >s source:US Department&Lab r source:US OeParlment of L&O r The Consumer Price Index(CPI)was up 2.1%year-over-year in December, versus up 1.7%year-over-year in November, largely driven by an increase in energy prices. Core CPI(CPI less food and energy) was up 2.2%year-over-year in December, versus up 2.1%year- over-year in November. The Personal Consumption Expenditures (PCE) index was up 1.4% year-over-year in November, unchanged from October. Core PCE (excluding food and energy) was up 1.6%year-over-year in November, after being up 1.8% year-over-year in October. Although Core CPI is trending above 2.0%, the Fed's primary inflation gauge is PCE which remains below the Fed's 2.0% target. III© OR I Consumer Retail Sales YOY % Change Consumer Confidence 4.5% 120 4.0% as 115 3.5% 110 m 3.0% 05 c u 2.5% u 700 2.0% u 95 O v 1.5% 90 1.0% 55 0.5% 30 0.0% p Q 75 79 S S S S 6 6 @ 6 4 S S S S S S B B 6 6 6 )B Sou,ce:US OePartm W&c.. Sourte:Fetleral Reaene On a year-over-year basis, total retail sales were up 4.1% in December compared with a 3.9% increase in November. On a month-over month basis, retail sales were up 0.6% in December, driven largely by vehicle sales. Excluding autos and gas, retail sales were flat in the month. Meanwhile, consumer confidence increased to 113.7 in December versus 109.4 in November. s ORS Economic Activity Leading Economic Indicators (LEI) Chicago Fed National Activity Index 0.8% 0.40 (CFNAI) 0.6% 0.30 0.20 w 0.4% ° 0.10 w 0.2% < 0.00 a- n -0.10 f 0 0.0% m -Q a3020 -Q2% 0.40 -0.50 T T Nok @5, ydh '94.A Nok � 2h 1�9. 't'ok 9 y°h S ryOk @'i �h � ryOk >4 �S �S �S �S �S �S l@ �Ok�6 �4 5,�S �S �S �S �S �S �S 7S Source:the COMerence Bo M Source Fe eml Reserve Bank of Chicago The Index of Leading Economic Indicators (LEI) was flat in November, below expectations, pointing to flat economic growth ahead. Meanwhile, the Chicago Fed National Activity Index (CFNAI) improved in November on a 3-month moving average basis to-0.14 from - 0.20 in October. Still,the CFNAI suggests that the pace of economic growth is below-trend. CillI Housing Housing Starts S&P/CaseShiller20 City Composite Home Price Index 1600 7.0% •MuIO Famly Hm9rg 51a�a z 1400 �sln8le Family wud,swt 6.5% `0 1200 6.0% g1000 5.5% 0 F 800 ti 5.0% T u 600 m O c 400 4,0% U C 200 3.5% f p -pq, 3.0% Oe4� yd�JS. �21S _`l,S o�)s �ly. e 5�1& O�JB 4119 *11 ��S 111171 4')S *11 "111 '11/1s 41I9 Souse:US Census Bureau Soumm S&P Total housing rose 11.3% in December, following a decline of 16.5% in November. The overall increase was driven by mufti-family starts which rose 57.3% in December. Meanwhile, single-family starts fell 4.0%. Housing starts tend to be volatile on a month-to-month basis. According to the Case-Shiller 20-City home price index, home prices were up 5.1% year-over-year in October, compared to 5.0%in September. iiiii� C1111 Manufacturing Institute of Supply Management Purchasing Capacity Utilization Manager Index 80.0% so pantling 68 79.0% 56 78.0% 54 X 77.0% sz fP so 6.0% 48 75.0% C.M.Wng lkm 46 74.0% 0�'9 ya's 's reA's O�76 @ 1%11'6 'C 1p ,'S ,7S 's O�'s y.,'s ,76 %'E %7& So Ansfdutefor Supply Management Saurt :Fe ml Reserve The Institute for Supply Management(ISM) manufacturing index increased to 54.7 in December from 53.2 in November, suggesting that manufacturing activity continues to improve. Notably, a reading above 50.0 suggests the manufacturing sector is expanding. Meanwhile, capacity utilization, which is production divided by capacity, increased to 75.5% in December from 74.9% in November. The capacity utilization rate remains below the long-run average of 50.0% (1972-2015), suggesting there is still excess capacity in the industrial sector. �jjjj Gross Domestic Product (GDP) Gross Domestic Product(GDP) 6.0% Personal consumption Expenditures 1.5% 1.1% 2.9% 20% 5.0% Gross Private Domestic Investment -0.4% -0.6% -1.3% 0.5% 4.0% 3.0% Net Exports and Imparts -0.5% 0.0% 0.2% 0.9% 2.0% 1.0 Federal Government Expenditures 0.3% -0.1% 0.0% 0.2% 0.0% Statearal Local(Consumption and Gross .10% r�GOP 000%OM1a,ge Investment) -0.1% 04% -0.3% 0.0% _GOPYOY%OM1a,ge ,C r- 1� a� Total 0.9% 0.8% 1.4% 3.5% », ya, 11.1 `�q "A; `�, 40 1) )) 1 2 "0 0 76 Source: USDepartmen,or Commerce Soule: Us Dvevfn,antof Cona . Third quarter real GDP was revised up to an annualized rate of 3.5% from the second estimate of 3.2%. The upward revision was driven by nonresidential investment, PCE, and state and local spending. This compares to 1.4% growth in the second quarter. Overall, Personal Consumption Expenditures continued to be the biggest contributor of economic growth in the third quarter, although it was down from the second quarter. Market participants estimate GDP grew 2.2% in the fourth quarter. iii� 0111 Bond Yields US Treasury Note Yields US Treasury Yield Curve 3.0% 3.5% 2-Year Dec-i6 — 'Year 3.0% —6eD-16 2.5% iureer Dec-15 2.5% X X 2.0% Y 1.0% 0.5% 0.5% 0.0% 0.0% q O�'Y ,'s �x'S 'S O�'S ''s �''s 's 's ° s-0 2 S 'O JO I Scarce:Bb Mm ' source:Blocm6erg Over the past three months, the yield curve steepened with the 2-year Treasury yield up nearly 43 basis points and the 10-year Treasury yield up 85 basis points. On a year-over-year basis the 2-year Treasury yield increased 14 basis points and 10-year Treasury yield increased about 18 basis points. Over the past year, financial market volatility has been elevated due to weak global economic growth,volatile commodity prices, political uncertainty, and divergent global central bank monetary policy. Illli■ S= Account Profile `,1 0111 Objectives Investment Objectives The investment objectives of the Orange County Sanitation District are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio; second, to provide sufficient liquidity to meet all operating requirements; and third, to earn a commensurate rate of return consistent with the constraints imposed by the safety and liquidity objectives. Chandler Asset Management Performance Objective Liquid Operating Monies—will be compared to the 3-month T-Bill rate and operate with a maximum maturity of one year. Long-Term Operating Monies—will be compared to the Bank of America Merrill Lynch 1-5 Year Corporate Government Rated AAA—A Index. Strategy In order to achieve these objectives, the portfolio invests in high quality fixed income securities consistent with the investment policy and California Government Code. Cjjjj Compliance C/" Orange County Sanitation District Long Term December 31,2016 COMPLIANCE • Assets managed by ChandlerAsset Management are in full compliance wth State lawand wth the investment policy Category Standard Comment Treasury Issues 5 years maximum maturity Complies' Supranrtional "AA"or better by of NRSROs; 30%maximum; 5%max issuer; 5years maturity, Complies Includes only, tADB,IBRD,and IFC per CGC U.S.Agencies 20%max issuer; 5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better long tern rating by 1 of 3 NRSROs; 30%maximum;5%max issuer; 5 years Complies maxntaturity Municipal Secur ties "A"or higher by of 3 NRSROS;10%maximum; 5%maxissuer; 5 years maximum maturity Complies Asset Backed/CMOs/Mortgage- "AA"or better by l of 3 NRSROs; "A"or higher issuer rating by l of 3 NRSROs; 20% Complies' backed maximum; 5%max issuer(excluding MBS/ ovtagency);5 ars max maturity Negotable CDs "A"or better on its long term debt by l of 3 NRSROs: "Al/Pi"or highest short term rafings Complies by 1 of 3 NRSROs; 30%maximum;5%max issuer, 5 years max maturity CDs/TDS 5%max issuer; 5 years max maturity Complies Bankers Acceptances A-1,or equivalent highest short term rating by 1 of 3 NRSROS; 40%maximum; 5%max Complies issuer;180 days max maturity Commercial Paper A-1,orequivalent by 1 of 3 NRSROS; "A"or better by 1 of 3 NRSROs,if long term debt Complies issued 25%maximum, 5%max issuer, 270 days max maturity Money Market Fund Highestretingby2of3NRSROs; 20%maximum;10%max issuer Complies Repurchase Agreements 102%collateralizalon Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAIF Not teed by imies0ment adviser Complies Avg Duralion Not to exceed 60 months - (80%to 120%of the benchmark) Complies Maximum Maturity 5 years maximum maturity Complies' 'The portfolio has twenty-four(24)securities with maturities greater than 5 years Including one(1)ABS,five(5)CMOs,seventeen(17)MISS and one(1)treasury. All secudtles were inhented from the pmmous manager and complied at time of purchase. 11% Account Profile Portfolio Characteristics Orange County Sanitation District Long Term 12/31/2016 09/30/2016 Benchmark` Portfolio Portfolio Average Maturity(yrs) 2.73 2.87 2.80 Modified Duration 2.61 2.48 2.38 Average Purchase Yield n/a 1.57 % 1.48 Average Market Yield 1.57 % 1.51 % 1.05 % Average Quality— AAA AA+/Aa1 AA+/Aa1 Total Market Value 316,592,849 325,949,886 'BAML 1-5 Yr US CorporaWGovt Rated AAA-A Index Benchmark is a blended rating of S&P,Moodys,and Fitch.POMolio is S&P and Mcody's respectively. Multiple securities were purchased across the Treasury, Supranational, and Commercial Paper sectors of the market to keep the portfolio structure in-line with Chandler objectives. The purchased securities ranged in maturity from March 2017 to November 2021. Ten securities were sold and two matured to help fund the new additions to the portfolio and to account for the two large withdrawals early in the quarter. Sector Distribution Orange County Sanitation District Long Term December 31, 2016 September 30, 2016 commercial US Commercial us Paper 22.3%ffie Paper\ M.0% le 3.8% 22.3% 3.6% 22.0% Municipal Municipal - Bonds Mortgage Bonds Mortgage 1.5% Pass 1.8% Pass Thru Th u Morey 0.7% Money 0.7% Markel Market Fund Fund FI US Fl US 1.9% Treasury 0.8% Treasury 30.1 % / 253% .9% CMO 0.9% 1.0% Negotiable Negotabk CD CD ASS 13% ASS 1.3% 7.1% / 9.0% Su Supranational Age�% 6.6% 28396 5.7% The sector allocation was relatively stable. The valuation in the Agency sector continues to compress thus the Chandler team reduced our exposure to the sector to 23.7% of the portfolio, offset by the increase in the Treasury allocation to 30.1% of the portfolio. Issuers C/" Orange County sanitation District Long Term Issuer Report Account s10268 As of 12J31Q016 Guvemmenl of United States US Treasury 30.09% Federal National Mortgage Association Agency 8.60% Federal Home Loan Bank Age oy 8.03% Federal Home Loan Mortgage Corp Agency 7.11% Inte,Amefican Dcv Bank Supramtional 2.69% John Deere ADS ADS 2.41% Intemetionil Finance Corp Summational 234% Toyota Motor Corp Comme¢ial Paper 1.98% Dreyfus Treasury Money Markel Fund Money Market Fund FI 1.94% Bank of Tokyo�Mlt UFJ Commercial Paper 1.95% Wells Fargo Corp US Corporate 1.76% JP Morgan Ch.&Co US Corporate 1.71% Dare&Company US Corporate 1,61% General Electric Co US Corporate 1.60% Qualcomm Inc US Corpurem I39% Intl Bank Becon and Development Suprenational 1.57% Honda ADS ADS IA7% Bank of America Corp US Corporate 1.44% ChevmnTexaco Coop US Corporate 1.42% HSBC USA Corp US Corporate 135% JP Morgan ADS ADS 131% Toronto Dominion Holdings NegmiabIc CD 1.29% Honda Motor Coryonflum US Corporate 1.29% Eli Lilly&Co US Corporate 1.29% Apple Inc US Corporate 1.27% Toyota ADS ADS 133% Morgan Stanley US Corporate I.00% American Express Credit US Corporate 0.99% Exxon Mobil Corp US Corporate 0.96% Microsoft US Corporate D%% Pon Authority of New York and New Jersey Municipal Bonds 0.94% Bank of New York US Corporate 0.69% Federal Home Loan Mortgage Corp CMO 0.68% KI Issuers Continued C/" Orange County Sanitation District Long Term Issuer Report Account#10268 As of 12I3112016 Nissan ABS A11S 0.66% Occidental Petroleum Corporation US Corporate 0.64% Intel Carp US Corporate 0.63% Federal National Mortgage Association Mongage Pass'I'hru 0.55% New York City Transitional Finance Authority Municipal Bonds 0.47% Goldman Sachs Inc. US Corporate 020% University ofCalifamia Municipal Bonds 0.14% NCUA Guaranteed Notes CMO 0.12% Federal National Mortgage Association CMO 0.11% GNMA Mortgage Pass Thou 0.08% AMRESCO Residcmal Securities Corp Mortgage Pass Thou 0.04% Small Business Administration ABS 0.02% SLM Carp ABS 0.01% GNMA CMO 0.01% Federal Home loan Mortgage Corp Mortgage Pass I'mu 0.00% Total 100.00% Q1 Quality Distribution Orange County Sanitation District Long Term December 31, 2016 vs. September 30, 2016 100.0% 80.0% — 60.0% 40.0% 20.0% 0.0% AAA AA A <A NR 12/31/16 9/30/16 AAA AA A <A NR 12/31/16 16.6% 65.0% 10.2% 3.4% 4.8% 9130/16 15.3% 66.2% 10.0% 3.4% 5.1 % Source:S&P Ratings Duration Distribution Orange County Sanitation District Long Term Portfolio Compared to the Benchmark as of December 31, 2016 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% II 0.0% 0-0.25 025-0.50 0.50-1 1-2 2-3 3-4 4-5 5+ 1♦Po 10 m ampmi.k• 0-0.25 0.25-0.50 0.50-1 1 -2 2-3 3-4 4-5 5+ Portfolio 6.2% 4.1 % 13.3% 14.8% 24.6% 23.0% 10.6% 3.4% Benchmark' 0.2% 0.0% 3.7% 30.8% 28.4% 22.2% 14.6% 0.0% `SAW 1-5 Vr U3 CorporatelG.v Real AAA-A Index The duration of the portfolio increased, currently 2.48 versus 2.38 at the end of the prior quarter. In Chandler's judgement the market is currently pricing in a reasonable expectation for a tightening of monetary policy in 2017 thus the overall interest rate sensitivity of the portfolio is likely to increase to be closer to the benchmark in the coming quarter. JjjInvestment Performance Orange County Sanitation District Long Term Period Ending December 31, 2016 Total Rate of Return Annualized Since Inception November 30,2014 1M% 1.40% 1.20% 1.00% ae0% 0.60%- 0.40% 0.20% 0.00% 12 months 2years 3ymus 5years 10 years Since Inception Orange County Sanitation District Lang Term = BAML 1-5 Yr US Corpora latGovt Rated AAA-A Index Annualized 3 months 12 months 2 years 3 years 5 years 10 years Since Inception Orange County Sanitation District Long Term -0.84% 1.47% 1.16% N/A N/A N/A 1.01 % BAML 1-5 Yr US Corporatei Rated AAA-A Index -1.06% 1.30% 1.19% N/A N/A N/A 0.98% Total rate of return A measure of a portfolio's performance over time. It is the internal rate of return which equates the beginning value of the portfolio with the ending value;it includes interest earnings,realized and unrealized gains and losses in the portfolio. Q11 Compliance CA Orange County Sanitation District Liquid December 31,2016 COMPLIANCE • Assets managed by ChandlerAsset Management are in full compliance with State lawand Wth the investment policy Category Treasury Issues l year maximum maturity; Minimum allocation of 10% Complies Supreretional "AA"or better by l of 3 NRSROs; 30%maximum; 5%max issuer, 1year maturity, Complies Includes only, IADB,BIRD,and IFC per CGC U.S.Agencies 20%max issuer; l year maximum maturity Complies' U.S.Corporate(MTNs) "A"or better long term rating by 1 of 3 NRSROs;30%maximum;5%max issuer; 1 Complies year max maturity Asset Backed/CMOs "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 NRSROs; Complies 20%maximum; 5%max issuer 1 year max matudty Negotiable CDs "A"or befteron its long term debt by l of 3 NRSROs; "Al/P1"or highest shorttenn Complies ratings by 1 of 3 NRSROs; 30%maximum;5%max issuer; 1 year max maturity CDs/TDS 5%max issuer, l year max maturity Complies Bankers Acceptances A-1,or equivalent short tam rating by l of 3 NRSROS;40%maximum;5%max Complies issuer; 180 days max matudty Commercial Paper A-1,or equivalent by 1 of 3 NRSROS;"A"or better by 1 of 3 NRSROs,if long tens Complies debt issued; 25%maximum;5%max issuer;270 days max matudty Money Market Fund Highest rating by 2 of 3 NRSROs; 20%maximum; 10%max issuer Complies Repurchase Agreements 102%collaleralization Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAIF Not used by investment adviser Complies Prohibited Municipal Securities Complies Prohibited Mortgage Securities Complies Avg Duration Notto exceed 180 days; Max duration of 1/2 year Complies Maximum Maturity 1 year maximum maturity Complies Max Issuer complies on a consolidated basis 11% Account Profile Portfolio Characteristics Orange County Sanitation District Liquid 12/31/2016 09/30/2016 Benchmark' Portfolio Portfolio Average Maturity(yrs) 0.15 0.14 0.11 Modified Duration 0.15 0.14 0.10 Average Purchase Yield n/a 0.52 % 0.45 Average Market Yield 0.43 % 0.55 % 0.51 % Average Quality— AAA AAA/Aaa AA+/Aaa Total Market Value 113,042,677 57,988,854 'BAML 3-Month US Treasury BIII Index Benchmark is a blended rating of S&P,Moody's,and Fitch.Portfolio is S&P and Mcody's respectively. Many securities were purchased across the Treasury, Agency, Supranational,Yankee CD, and Commercial Paper sectors of the market to account for the large cash Flows both out and into the portfolio during the reporting period. The purchased securities ranged in maturity from November 2016 to June 2017. One security was sold and fourteen matured to fund both the fund ou0lows and the new securities in the portfolio. Sector Distribution Orange County Sanitation District Liquid December 31, 2016 September 30, 2016 Money Commemial r.--one,; Mallet Paper Garket Fund 5.2% Find FI F1 50% 91 ' us Corpoate 5 8% Commercial Agency ' Paper 54.8% 57% us Treasury 3s% Agency / us Coryoate Negotiable 20.0% CD �10% AIII y / us - — Suprananonai Treasury 1.8% 10.4% The sector allocation changed materially with the large cash Flows in and out of the portfolio. Issuers C/" Orange County Sanitation District Liquid Issuer Report Account d10282 As of 1213112016 Govemment of United States US Treasury 34.76% Federal Home Loan Bank Agency 22.14% Federal Home Loan Mortgage Corp Agency 17.69% Federal National Mortgage Association Agency 6.61% Dreyfus Treasury Money Market Fund Money Market Fund FI 4.99% Paccar Financial Commercial Paper 1.77% PepsiCo Inc US Copomte 1.33% Toronto Dominion Holdings Negotiable CD 1.03% Eli Lilly&Co US Corporate 0.91% Wells Fargo Corp US Corp nrale 0.89% JP Morgan Cbase&Co US Common, 0."% Ints,A.CF, n De,Bank Supranstmoal 0.99% Cisco Systems US Corporate 0.89% Apple Inc US Corporate 0.89% International Finance Corp Supmnational 0.89% Toyota Motor Corp Commercial Paper 0.88% Bank ofTokyo-Mit UFJ Commercial Paper 0.98% Toyota Motor Credit Corp Commercial Paper 0.88% Honda Motor Corporation Commercial Paper 0.80% TOUT 100.00% Quality Distribution Orange County Sanitation District Liquid December 31, 2016 vs. September 30, 2016 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% AAA AA A <A NR 12/31/16 9/30/16 AAA AA A <A NR 12/31/16 70.7% 26.2% 3.1 % 0.0% 0.0% 9130/16 52.9% 32.4% 14.8% 0.0% 0.0% Source:S&P Ratings CA Duration Distribution Orange County Sanitation District Liquid Portfolio Compared to the Benchmark as of December 31, 2016 120.0% 100.0% e0.0% 60.0% 404% 20.0% 0.0% 0-025 0.25-0.50 0.50-1 1 1.5 1.5-2 2-2.5 2.5-3 3+ M Pord.ko Bnchmi 0-0.25 0.25-0.50 0.50-1 1 -1.5 1.5-2 2-2.5 2.5-3 3+ Portfolio 79.9% 20.1 % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Benchmark' 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 'BAML 3-Month US Treasury Bill Index The duration of the portfolio extended to 0.14 versus 0.10 at the end of the prior quarter. The maturity structure of the portfolio remains short to account for the large upcoming liquidity needs in January 2017. JjjInvestment Performance Orange County Sanitation District Liquid Period Ending December 31, 2016 Total Rate of Return Annualized Since Inception November 30,2014 0.50% 0.40% 0.30% 0.20% 0.10% 0.00%—]it 1 12 marri 2 years 3 years 5 yeare 10 years Since Inception Orange County Sanitation District Liquid BAML&Month US Treasury Bill Index Annualized 3 months 12 months 2 years 3 years 5 years 10 years Since Inception Orange County Sanitation District Liquid 0.12% 0.48% 0.36% N/A N/A N/A 0.34% BAML 3-Month US Treasury Bill Index 0.09% 0.33% 0.19% N/A N/A N/A 0.18% Total rate of relum:A measure of a portfolio's performance over time. It is the internal rate of return,which equates the beginning value of the portfolio with the ending value;it includes interest earnings,realized and unrealized gains and losses in the portfolio. Compliance /" OCSD Lehman Exposure December 31,2016 COMPLIANCE • Assets managed by ChandlerAsset Management are in full compliance with State lawand xith the investmentpolicy Category Standard Comment Treasury Issues 5 years maximum maturity Complies Supranational "AA"or better by of NRSROs; 30%maximum; 5%max; 5years Complies maturity, Includes only, IADB IBIRD,and FC per CGC U.S.Agencies 20%max issuer; 5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better long term rating by 1 of 3 NRSROs; 30%maximum;5% Complies' max issuer; 5 years max maturity Municipal Securities "A"or higher by l of 3 NRSROS;10%maximum; 5%maxissuer, 5 Complies years maximum maturity Asset Backed/CMOs/Mortgage- "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 Complies backed NRSROs; 20%maximum; 5%max issuer(excluding MBS/govt agency);5 years max maturity Negotiable CDs "A"or better on its long term debt by of 3 NRSROs; "A1/P1"or Complies highest short term ratings by 1 of 3 NRSROs; 30%maximum;5%max issuer 5 years max maturity CDs/TDS 5%max issuer 5 years max maturity Complies Banker's Acceptances A-1,or equivalent highest short tens rating by l of 3 NRSROS; 40% Complies maximum, 5%max issuer.180 days max maturity Commercial Paper A-1,or equivalent by 1 of 3 NRSROS; "A"or better by 1 of 3 NRSROs, Complies if long term debt issued; 25%maximum; 5%max issuer, 270 days max maturity Money Market Fund Highest rating by 2 of 3 NRSROs; 20%maximum; l0%max issuer Complies Repurchase A reements 102%collateralization Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAIF Not us investment adviser Complies A Duration Not to exceed 60 months - 80%to 120%of the benchmark !Complies Maximum Maturity 5 years maximum maturity Complies Account hods$2 million face wlue(cusip 525ESCOy6)and$600,000 race value(cusip 525ESCiB7)of defaulted Lehman Bras Holdings that were purchased by the me4we manager. Complied at time of pumhase. 11% Account Profile Portfolio Characteristics OCSD Lehman Exposure 12/31/2016 09/30/2016 Portfolio Portfolio Average Maturity(yrs) 21.44 22.68 Modified Duration 0.00 0.00 Average Purchase Yield 0.00 % 0.00 Average Market Yield 0.00 % 0.00 % Average Quality— NR/NR NR/NR Total Market Value 183,871 230,371 Portfolio is S&P and Mows respectively. SECTION 3 i Consolidated Information 11% Account Profile Portfolio Characteristics Orange County Sanitation District Consolidated 12/31/2016 09/30/2016 Portfolio Portfolio Average Maturity(yrs) 2.16 2.41 Modified Duration 1.86 2.04 Average Purchase Yield 1.29 % 1.32 Average Market Yield 1.26 % 0.97 % Average Quality— AA+/Aa1 AA+/Aa1 Total Market Value 429,819,397 384,169,111 Portfolio is S&P and Mows respectively. Sector Distribution Orange County Sanitation District Consolidated December 31, 2016 September 30, 2016 Commercial us Commarcial us Paper Corporate Paper_ Caporals, 42% 1&0% 39% 21.]% Muncpal Mortgage Municipal Mortgage Bantla Pass BonCs Tb u Th. ss 1.1% 0.5% 1"2% 0.6% Money Money Markel us Market us Fund .Treasury Fund Treasury FI '31.3% FI 23.3% 2.7% / 1.8% CMO Negotiable CMO / NegokaNe CD / CD 0.7% 1.2% 0A% 1.1% MS Common ABS Conran Stock 51ock 5.2% 0.0% ].6% .,� 0.0% Agency _ Supranabonal Agency supranabonal NJ% 5.3% 33.1% 0.9% SECTION 4 Portfolio Holdings GA" Orange County Sanitation District Long Term Holdings Report Account#10268 As of 12/31/16 Purchase Da:o Cost Vat Mid Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt YTM Accrued Ind. Gain/Loss Fitch Duration ABS 43813JAC9 Honda Auto Receivables 2014-1 A3 272,358.99 01/22/2015 271,529.15 99.97 272,285.73 0.09% Aaa/NR 0.89 0.67%Due 11/21/2017 0.90% 272,358.99 lA6% 50.69 (73.26) AAA 0.05 89231 MAC9 Toyota Auto Receivables Owner 2014-A 459,078.18 01/21/2015 458,127.74 Wee 458,877.56 0.14% Aaa IAAA 0.96 0.67%Due 1211512017 0.90% 459,057.12 1.33% 136.70 (179.56) NR 0.08 89231TAB6 Toyota Auto Receivables Owner 2015-C 556,481.45 0811812015 556,436.70 99.97 556,341.22 0.18% Are/AAA 1.13 0.92%Due 2/15/2018 0.93% 556,461.15 1.13% 227.54 (119.93) NR 0.12 43814GAC4 Honda Auto Receivables 2014-2 A3 537,546.59 04/06/2015 M7,168.64 99.92 537,095.05 0.17% Asia I AAA 1.21 0.71%Due 3/19/2018 0.83% H7,478.99 1.14% 149.47 (383.9,1) NR 0.23 43814NAB1 Honda Auto Receivables 2016-1 A2 2,020,144.82 02116IN16 2,019,943.01 99.97 2,019,474.13 0.64% NR/AAA 1.46 1.01%Due 6/18/2018 1.02% 2.020,017.37 1.11% 936.79 (543.24) AAA 0.34 4718TIAD6 John Deere Owner Trust 2014E A3 2,247,986.48 02/04/2015 2,249,040.21 99.99 2,247,833.62 0.71 % Ass INR 1.87 1.07%Due 11/15/2018 1.05% 2,248,318.25 1.09% 1,069.04 (484.63) AAA 0.37 89236WAC2 Toyota Auto Receivables Owner 2015-A 2,883,281.40 0212412015 2,882,845.53 99.95 2,881,744.69 0.91 % Aaa IAAA 2.13 1,12%Due 2/15/2019 1,13% 2,883,115.83 1.22% 1,435.23 (1,371.14) NR 0.54 47788NAM John Deere Owner Tmst2016-B A2 2,980,000.00 0711912016 2.979,818.22 99.89 2,976,573.00 0.94% Ann/NR 2.13 1.09%Due 2/15/2019 1.10% 2,979,849.00 1.26% 1,443.64 (3,276.00) AAA 0.70 654T8WAB1 Nissan Auto Receivables Owner 2016-C 2,085,000.00 OB/02/2016 2,084,917.85 NAG 2,081,436.74 0.66% Asa/NR 2.37 A2A 1.08% 2,084,929.59 1.30% 991.53 (3,492.85) AAA 0.76 1.07%Due 5n 512019 161571HHO Chase CHAT Pool#2016-A] 4,140,000.00 09/O6/2016 4,139,643.13 99.91 4,136,2M.74 1.31 % Asa/AAA 2]1 1.06%Due 9/16/2019 1.08% 4,139,760.09 1.20% 1,950.40 (3,513.35) AAA 0.68 47788MAC4 John Deere Owner Trust 201&A A3 2,420,000.00 02/23/2016 2,419,619.09 99.74 2,413,659.60 0.76% Are/NR 3.29 1.36%Due 4/15/2020 1.37% 2,419,696.28 1.55% 1,462.76 (6,0W.68) AAA 1.41 43814CAC2 Honda Auto Receivables 2016-2 A3 1,810,000.00 OW2412016 1,809,964.89 99.85 1,807,194.50 0.57% Ann/NR 3.29 1.39%Due 4/15/2020 1.40% 1.809,970.22 1A9% 1,118.18 (2,775.72) AAA 1.57 83162CLJO Small Business Administration 2001-20C 70,844.46 031N12001 70,64,tA6 104.55 73,859.49 0.02% Aaa/AA+ 4.17 6.34%Due 3/1/2021 6.34% 70,WA6 4A7% 1,492.95 3,215.03 AAA 2.04 7WWAA5 SLMA 2008-9A 36,113.93 0812212008 35,967.41 100.13 36,160.63 0.01 % Baa3/AA+ 6.32 2.386%Due 4/2512023 2.48% 36,100S2 2.47% 182.74 59.71 AAA 3.43 22,515,666.03 22,498,772.70 7.11 % Ann I AAA 2.32 Total ABS 22,518,636.38 1.14% 22,517,748,26 1 2]% 12,427.66 (18,975.56) AAA 0.92 AGENCY 3137EADVB FHLMC Note 5,000,000.00 0625/2015 4.994250.00 100.02 5,000,825.00 1.59% Aaa/AA+ 0.53 0.75%Due 7/14/2017 0.81 % 4,998,510.68 0.72% 17,395.83 2,314.32 AAA 0.53 3137EADNB FHLMC Note 5,000,000.00 01/23/2015 4,967,500.00 99.80 4,989,810.00 1.58% Asia/AA+ 1.03 0.75%Due 1/12/2018 0.97% 4,988,706.10 0.95% 17,604.17 1,103.90 AAA 1.02 3137EADPI FHLMC Note 5,000,000.00 0111312015 4,974,100.00 99.87 4,993,515.00 1.58% Aaa/AA+ 1.18 0.875%Due 31712018 1.04% 4,990298.78 0.99% 13,854.17 3,216.22 AAA 1.17 313378A63 FHLB Note 7,500,000.00 0211112015 7,544,850.00 100.36 9,526,82.50 2.39% Aee/AA+ 1.19 1.375%Due 3l9/2018 1.18% 7,517,283.85 1.07% 32,083.33 9,543.65 AAA 1.17 Chandler Asset Manegemem-CONFIDENTIAL 35 GAROrangeCounty Sanitation District Long Term Holdings Report Account#70268 As of 12/31/16 Purchase D.:o Cost V.:u: Mkt Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt Y'tM Accrued Ind. Gain/Loss Fitch Duration AGENCY 111111 3135GOG72 FNMA Note 5,000,000.00 12/18/2015 4,963,950.00 99.79 4,989,685.00 1.58% Ann/AA+ 1.95 1.125%Due 12/14/2018 1.37% 4,976,430.12 L23% 2,656.25 13,254.88 AAA 1.92 3133782M2 FHLB Note 7,500,00O00 Various 7,589,190.00 100.30 7,522,612.50 2.39% Aaa/AA+ 2.18 1.5%Due 3/8/2019 1.14% 7,556,899+90 1.36% 35,312.50 (34,287.40) AAA 2.13 3139EADM8 FHLMC Note 7,500,000.00 Various 7.399,650.00 99.42 9,456,132.50 2.36% Aaa/AA+ 2.75 1.25%Due 10/2/2019 1.61 % 1,42],5]6Al 1.47% 23,177.08 28,566.09 AAA 2.69 313383HU8 FHLB Note 5,000,000.00 Nat 3/2015 5,008,950.00 100.08 5,003,930.00 1.58Is Aaa/AA+ 3.45 1.75%Due 611212020 1.71 % 5,006,382.71 1.73% 4,618.06 (2,452.71) NR 3.33 3135GOD75 FNMA Note 5,000,000.00 11116I2015 4,955,650.00 99.53 4,976,690A0 1.57% Asia/AA. 3.48 1.5%Due 3=020 1.70% 4.966,506.37 1.64% 1,875.00 10,183.63 AAA 3.37 3135GOF73 FNMA Note 7,500,000.00 Various 7,370,726.00 98.15 7,405,912.50 2.34% Aiui 3.92 1.6%Due 11130/2020 1.87% 7,397,970.25 1.83% 9,687.50 7,942.25 AAA 3.78 3130A7CV5 FHLB Note 5,365,000.00 02/17/2016 5,343,325,40 98.11 5,263,392.26 1.67% Asni 4.14 1,375%Due V1812021 1,46% 5,347,097,99 1.85% 27,253.45 (83,705.73) AAA 3.97 3135GOJ20 FNMA Note 10,000,000.00 Various 10,040,950,00 98.05 9,805,050.00 3.11 % Aaa/AA+ 4.16 1.375%Due D2612021 1.28% 10,01 1.86% 47,743.06 (232,019.54) AAA 3.99 75,153,091.40 74,934,382.26 23.74% Aaa/AA+ 2.61 Total Agency 75,365,000.00 1.35% 75,210,732.70 1.43% 233,260.40 (276,350.44) AAA 2.0 CN1O A. 61 NCUA Guaranteed Note CMO 2010-R2 387,664.00 11/10/2010 387,662.25 100.01 387,694.63 0.12% Asia/AA+ 0.85 1.142%Due 11/6/2017 0.00% 387,662.25 1.08% 26,143 32.38 NR 0.01 31398VJ98 FHLMC FHMS K006 A2 900,000.00 11/23/2010 951,046.88 105.05 952,693.20 0.WIs Aaa/AA+ 3.07 4,251%Do.1125/2020 3.54% 917,081.78 2.09% 3,188.25 35,611.42 AAA 2.73 3831H4NX9 GNMA Pool#201 32,010.76 0112412000 32,010.76 100.25 32,089.51 0.01 % Aaa/AA+ 13.14 1.239%Due 211612030 1.25% 32,010.76 1.09% 30.59 78.75 AAA 0.03 3133TCE95 FHLMC FSPC E3A 43,729.65 03/11/1%8 43,775SO 100.25 43,839.87 0.01Is Aaa/AA+ 15.63 3.052%Due 811512032 3.02% 43,750.38 1.65% 111.22 88.49 AAA 1.95 31396X305 FNMA FNR 2001-114 A6 21,155.32 01/1012008 20,124.00 ".Be 21,132.51 0.01 % Aaa/AA- 20,84 0.961 is Due 10/27Q031 1.32% 20,4UA0 1.10% 2.26 698.11 AAA 0.29 31397QREO FNMA FNR 2011-3 FA 338,527.14 12/20/2010 338,421.36 100.08 338,804.13 0.11 % Aaa/AA+ 24.17 1.441%Due 212512041 1.44% 338,442.21 Loy% 81.31 362.52 AAA 0.06 313WY35 FHLMC FSPC T-582A 982,745.07 MI012011 1,112,958.77 116.27 1,142,598.38 0.36% Aaa/AA+ 26.75 6.5%Due 9/252043 5,40% 1,090,562.59 2.95% 1,064.64 52,035.79 AAA 4.52 2,885,999.32 2,918,851.83 0.92% Aural AA+ 14.91 Total CMO 2,705,831.84 3.47% 2,829,944,37 R 20% 4,742.70 88,907,46 AAA 2.70 COMMERCIAL PAPER 06538BQ63 Bank of Tokyo Mitsubishi NV Discount 5,870,000.00 10/26/2016 5,848,166.89 99.82 5,859,251.39 1.85% P-1 /A-1 0.18 CP 1,05% 5,859,251,39 1 OS% 0,00 0,00 NR 0.18 1.03%Dua 31612017 Chandler Asset Manegemenl-CONFIDENTIAL 36 CAROrangeCounty Sanitation District Long Term Holdings Report Account#10268 As of 12/31/16 Purchase Da:o Cost Va:u: Mut Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt YTM Accrued Ind. Gain/Loss Fitch Duration COMMERCIAL PAPER 89233GV29 Toyota Motor Credit Discount CP 6,300,000.00 12/22/2016 6,251,999.25 99.27 6,25 151.75 1.98% P-11A-1+ 0.59 1.23%Due 812/2017 1.26% 6,254,151.75 1.26% 0.00 0.00 NR 0,58 12,100,166.14 12,113,403.14 3.83% P-1/A-I 0.39 Total Commercial Paper 12,170,000.00 1.16% 12,113,403.14 1.16% 0.00 0.00 NR 0.39 MONEY MARKET FUND FI 261908107 Dreyfus Trsy/Agcy Cash Management 6,131,092.70 Various 6,131,092,70 1.00 6,131,092.70 1.94% Aso I AAA 000 521 0.39% 6,131,09230 0.39% 0.00 0,00 AAA 000 6,131,092.70 6,131,092.70 1.94% Ass/AAA 0.00 Total Money Market Fund Fl 6,131,092.70 0.39% 6,131,092.70 0.39% 0.00 0.00 AAA 0.00 MORTGAGE PASS TKRU 31381PDA3 FNMA FN 466397 359,837.39 12/01/2010 352,050,30 104.63 376,503.26 0.12% Ass/AA+ 384 34%Due 1111/2020 3.80% 356,824+14 2.10% 237.89 19,679.12 AAA 3,47 36225CAZ9 GNMA Pool#G280023 25,504.80 08/0811997 25,92T.22 103.31 26,349.88 0.01 % Ass IAA+ 9.98 1.625%Due 12/20Y2026 1.52% 25,648.38 1.89% 3d.54 701.50 AAA 4.53 36225CC20 GNMA Pool#G280088 29,714.84 06/11/1991 30,364.86 103.10 30,635.88 0.01 % Aaa/AA+ 10.47 2.32%Due 612012027 2.10% 29,942S5 1.92% 57.45 692.93 AAA 4.79 3134BSM3 FNLMC FH 786064 2,439.33 0211812000 2,379+93 103.12 2,515.41 0.00% Aaa/AA+ 11.01 2.957%Do.11112028 3.15% 2,415.87 2.49% 8.01 99.54 AAA 4.92 31371NUC7 FNMA FN 257179 25,421.21 12I05I2011 26,885.42 107.55 27,UI.76 0.01 % Aaa/AA+ 11.26 4.5%Due 4/1/2028 3.72% 26,431.28 2.07% 95.33 910.48 AAA 3.48 3141TYAY3 FNMA P.I#FN MA0022 29,376.19 12/05011 31,068A9 107.55 31,595.53 0.01 % Aaa/AA+ 12.26 4.5%Due 4/1/2029 3.76% 30,573.71 2.37% 110.16 1,021.82 AAA 3.62 3138EG6F6 FNMA FN AL0869 18,959.98 121OW2011 20,052.02 107.55 20,392.37 0.01 % Ass/AA- 12.42 4.5%Due 6/1/2029 3.77% 19,735.92 1.89% 16.59 656.45 AAA 2.92 03215PFN4 AMRESCO Residential SewriOes 1999-1 133,743.29 05/20/2011 100,432.85 91.TT 122,134.88 0.04% NR IAA+ 12.49 A 5.25% 110,763.27 237% 44.24 11,971.61 BBB 8.49 1.T01%Do.6/25/2029 36225CNM4 GNMA PooI#G280395 10,571.73 03116/2000 10,475.90 103.55 10,947.30 0.00% Aes/AA+ 13.31 2.32%Due 4/20/2030 2.38% 10,529.12 1.89% 20.44 418.18 AAA 5.31 36225CN28 GNMA Pooht G280408 83,369.45 03/15/2000 82,511.86 103.47 86,251.66 0.03% Aaa/AA+ 13.39 2.32%Due 512012030 2.39% 82,980.72 1.89% 161.16 3,270.94 AAA 5.30 31403GXF4 FNMA P.I#FN 748678 5,192.30 NIIOIN13 5,581.72 109.53 5,687.01 0.00% Auto/AA+ 16.76 5%Due 10/1/2033 4.16% 5,514.94 2.52% 21.63 172.07 AAA 3.84 36225DCBB GNMA Pool#G280965 87,212.84 07/19/2004 87,168.14 104.35 91,003.60 0.03% Aaa/AA+ 17.56 2.125%Due 712012OU 2.13% 87,180.66 1.38% 154.44 3,822.94 AAA 4.82 Chandler Ae nManagement-CONFIDENTIAL 37 GAROrangeCounty Sanitation District Long Term Holdings Report Account As of 12/31/16 DescriptionPurchase Da:o Cost Va:u: Mid Price Market Value %of Pod. Mandl Maturity CUSIP Security MORTGAGE PASS THRU 31406XWT5 FNMA Pool#FN 823358 169,347.88 01/11/2006 168,024.86 105.34 178,382.76 0.06% Ann/AA+ 18.10 2.581%Due 2/112035 2.64% 168,523.49 2.19% 364.24 9,859.27 AAA 4.59 31406P0Y8 FNMA P.I#FN 815971 287,627.20 O611012013 309,199.34 109.15 313,957.54 0.10% Aaa/AA+ 18.18 5%Due 311/2035 4.21 % 305,741+91 2.70% 1,198.45 8,215.63 AAA 4.09 31407BXH7 FNMA PwI#FN 826080 30,985.37 0611012013 33,309.26 109.05 33,788.80 0.011 Aaa/AA+ 1851 5%Due 711/2035 4.22% 32,942.47 2.70% 129.11 846.33 AAA 4.10 31376KTU FNMA FIN 357969 172,280.96 06/10/2013 185,202.03 109.03 187,834.83 0.06% Aaa/AA+ 18.68 5%Due 911/2035 4.22% 183,178.27 2.71% 167.50 4,656.56 AAA 4.11 31403DJZ3 FNMA Pool#745580 171,477.52 0 II OIN13 184,338.34 109.24 187=39 0.06% Asa/AA. 19.43 5%Due 611=36 4.26% 182,390.06 2-73% 714.49 4,932.33 AAA 6.id 31410F4V4 FNMA P.I#FN 888336 336,428.03 W/1012013 361,660.15 109.10 367,059.13 0.12% Aaa/AA+ 19.51 5%Due]I1/2036 4.25% 357,85141 272% 1,401.78 9,207.72 AAA 4.12 2,016,622.39 2,100,303.99 0.66% Aaa I AA+ 14.96 Total Mortgage Pass Them 1,979,479.17 3.82% 2,019,168.57 2."% 4,935.45 01,135.42 AAA 4.37 MUNICIPAL BONDS 73358WAG9 Pon Authority of NY&NJ TE-REV 2,440,000,00 Various 2,507,633,89 108.94 2,658,136.00 0.84% Aa3/AA- 2.92 5,309%Due lW/2019 4,97% 2,458,920+27 2,13% 10,794.97 199,215,73 AA- 2.71 64971M5E8 New York NY TE-REV 1,400,000.00 1012712010 1,400,000.00 105.57 1,478,008.00 0.47% Aal/AAA 3.84 4.075%Due 11/1/2020 4.08% 1.400,000.00 2.56% 9,508.33 78,008.00 AAA 3.53 913366EJ5 Univ of California Rgis Med TE-REV 400,000.00 ll/09I2010 400,000.00 111.91 447,620.00 0.14% Aa3/AA- 4.37 5.035%Due 5/15/2021 5.04% 400,000.00 2.17% 2,573.44 47,620.00 NR 3.94 4,307,633.89 4,583,764.00 1.461 Aa21 AA 3.36 Total Municipal Bonds 4,240,000.00 4.68% 4,258,920.27 2.27% 22,876.74 324,843.73 AA 3.09 NEGOTIABLE CD 89113WHF6 Toronto Dominion NY Yankee CD 4,075,000.00 08/22/2016 4,075,000.00 100.0 4,075,000.00 1.29% P-11A-1+ 0.20 1.19%Due 311312017 1.19% 4,015,000.00 1A9% 17,645.88 0.00 F-1+ 0.20 4,075,000.00 4,075,000.00 1.29% P-1/A-1+ 0.20 Total Negotiable CD 4,075,000.00 1.19% 4,075,000.00 1.19% 17,645.88 0.00 F-1+ 0.20 SUPRANATIONAL as 45950KBS8 International Finance Corp Note 5,000,000,00 03/16/2015 5,020,700,00 99.97 4,998,310.00 1.58% Aaa/AAA 0.31 1%Due 4/24/2017 0,80% 5,003,041 74 111 % 9,305.56 (4,731 74) NR 0.31 4581XOCGI Inter-American Dev Bank Note 5,000,000.00 0612212015 5,019,550.00 99.93 4,996,690,00 1.59% Aaa/AAA 0.53 11 Do.7/14/2017 0.81 % 5,005,063.48 1.12% 23,194.44 (8,353.48) AAA 0.53 4590MEJB Intl.Bank Recon&Development Note 5,000,000.00 Various 4,991,170.00 99.59 4,979,670.00 1.57% Asia IAAA 1.46 1%Due 6115I2018 1.07% 4,995,189.19 128% 2,222.22 (15,519.19) AAA 1.44 4581XOCS5 Inter-American Dev Bank Note 3,500,000.00 0712512016 3,590,405.00 99.39 3,478,723.50 1.10% Aaa/AAA 4.21 1.875%Due 3/15/2021 1.30% 3.581,914.51 2.03% 19,=S2 (103,191.01) AAA 4.00 Chur ler Asset Managemem-CONFIDENTIAL 38 GAROrangeCounty Sanitation District Long Term Holdings Report Account#10268 As of 12/31/16 Purchase D.:o Cost V.:u: Mid Price Market Value %of Pod. Moodl Maturity CUSP Security Description Par Value/Units Book Yie d Book Va Mkt Y1rM Accrued Ind. Gain/Loss Fitch Duration SUPRANATIONAL 45950KCJ7 International Finance Corp Note 2,500,000.00 11/09/2016 2,441,600.00 95.91 2,397,685.00 076% Aaa I AAA 4.55 1.125%Due 7/2012021 1.64% 2,443,372.80 2.07% 12,578.13 (46,687.80) NR 4,38 21,063,42S.00 20,851,078.50 6.61 % Aaa I AAA 1.78 Total Supranational 21,000,000.00 1.05% 21,028,561.72 1.42% 66,623.27 (177,483.22) AAA 1.72 US CORPORATE 06050TLX8 Bank of America Note 600,000.00 05I01I2014 600,000.00 100A9 600,554.40 0.19% Al/A+ 0.35 1.302%Due 51812017 1.30% 600,000.00 1.04% 1,150.39 554.40 NR 0.10 94988J21.0 Walls Fargo Bank Callable Note Wy 500,000.00 NIOW2014 500.000.00 100.02 500,091.50 0.16% Aa2/AA- 0.45 6/15/2016 1.25% 500,000.00 1.16% 278.48 91.50 AA 0.21 1.253%Due 6/1512017 060505DP6 Bank of America Corp Note 3,800,000.00 01/15/2014 4,334,014.00 103.58 3,936,226.20 1.25% Baal/BBB+ 0.92 5.75%Due 121112017 1.95% 3,926,496.93 1.79% 18,200.33 9,729.27 A 0.90 166764AAB Chevron Corp Callable Note Cant 2.000,000M 12IM12014 1,988,600.00 99.] 1,995,480.00 0.63% Aa2/AA- 0.93 11&17 1.30% 1.996,471.43 1.39% 1,594.67 (991.43) NR 0.84 1.104%Due 1215I2017 458140AL4 Intel Corp Note 2,000,000.00 01I26I2015 2,008,280.00 100.15 2,003,006.100 0.0% Al/A+ 0.96 1.35%Due 12/15/2017 1.20% 2,002,741.62 1.19% 1,200.00 264.38 A+ 0.95 40428HPH9 HSBC USA Inc Note 3,000,000.00 Various 3.003,290.00 99.83 2,994,753.00 0.95% A2/A 1.04 1.625%Due 1/16I2018 1.59% 3,001,147.01 179% 22,343.75 (6,394.01) AA- 1.02 38141GFG4 Goldman Sachs Group Inc Note 600,000.00 Various 692,806.00 104.17 625,045.20 0.20% A3/BBB+ 1.05 5.95%Due 1118/2018 2.73% 618,759.21 1SO% 16,16,117 6,285.99 A 1.00 674599CD5 Occidental Petroleum Callable Note Cant 2,000,000.00 01101112015 1,986,340.00 100.09 2,001,818A0 0.64% MIA 1.13 1/15/18 1.73% 1.995,056.84 1.41% 11,333.33 6761.16 A 1.02 1.5%Due V1512018 025816AY5 American Express Coach Note 2,900,000.00 Various 3,377,385.79 106.27 3,081,806.80 0.99% A3/BBB+ 1.21 7%Due 311912018 4.20% 2,981,450.67 137% 57,516.67 100,356.13 A 1.16 073902CD8 Bear Stearns Note 3,200,000.00 0111WH14 3,523,520.00 104.00 3,327,640A0 1.07% A3/NR 1.50 4.65%Due 712/2018 2.25% 3.309,036.01 1.94% 73,988.67 18,803.99 A. 1.42 532457BF4 Eli Lilly 8 Cc Note 4,000,000.00 Various 4.009,675.00 100.62 4,024,852.00 1.28% A2/AA- 2.20 1.95%Due 3115/2019 1.89% 4,004,992.27 1.66% 22,966.67 19,869.73 A 2.14 02665WAH4 American Honda Finance Note 4,000,000.00 Various 4,046,640.00 100.97 4,038,948.00 1.29% Al/A+ 2.62 2.25%Due 8/15/2019 1.93% 4,032,059+57 1.87% 34,000.00 6,888.43 NR 2.52 064061-CW7 Bank of New York Callable Note Cant 2,120,000.00 02/10/2016 2.142,175.20 100.82 2,137,468.80 0.68% At IA 2.70 8r11/2019 1.99% 2.136,596.53 1.97% 14,898.89 872.27 AA- 2.51 2.3%Due 9/11/2019 24422ESS9 John Deere Capital Corp Note 5,000,000.00 Various 5,046,984.00 form 5,054,215A0 1.61 % A2/A 2.71 2.3%Due 911612019 2,07% 5,029,008.77 1.89% 33,541.67 25,206.23 A 2.60 Chandler Ae nManagement-CONFIDENTIAL 39 CAROrangeCounty Sanitation District Long Term Holdings Report Account#10268 As of 12/31/16 Purchase D.:o Cost V.:u: Mid Price Market Value %of Pod. Ml Maturity CUSP Security Description Par Value/Units Book Yie d Book Va Mkt YTM Accrued Ind. Gain/Loss Fitch Duration US CORPORATE 11111 36962G7M0 General Electric Capital Corp Callable 5,000,000.00 Various 5,014,950.00 100.33 5,016,270.00 1.60% At IAA- 3.02 Note 1X 121912019 2.13% 5,009,278.91 2.08% 52,555.55 6,991.09 AA- 2.81 2.2%Due 1/92020 46625HKA7 JP Morgan Chase Callable Note Cont 2,000,000.00 0210612015 1,994,880.00 99.76 1995,292.00 0.64% A3/A- 3.06 12/23/2019 2.30% 1,996,835.06 2.33% 19,750.00 (1,563.06) A+ 2.91 2.25%Due 1123/2020 4042811PR7 HSBC USA Inc Note 1,250,000.00 021052016 1,222,787.50 99.22 1,240,225.00 0.39% A2/A 3.18 2.35%Due 3I52020 2.92% 1,228,761+42 2.61% 9,465.28 11,463+58 AA- 3.02 747525AD5 Oualcomm Inc Note 5,000,000.00 05/19/2015 4,995,195AO 100.01 5,000,365.00 1.58% Al/A+ 3.39 2.25%Due 512012020 2.27% 4.996,748.67 2.25% 12,812.51 3,610.33 NR 3.24 94974BGM6 Wells Fargo Corp Note 6,000,000.00 07/16/2015 5,001,660.00 100.58 5,028,900.00 1.61 % A2/A 3.56 2.6%Due 7/22/2020 2.59% 5,001,172.25 2A3% 57,416.67 27,727.75 AA- 3.34 037833BS8 Apple Inc Callable Note Cant 1/23/2021 4,000,00900 OW2312016 4,050,840.00 99.92 3,996,672.00 1.27% Aa1/AA+ 4.15 2.25%Due 2/23/2021 1.96% 4,046,272.30 2.27% 32,000.00 (47,600.30) NR 3.91 30231 GAV4 Exxon Mobil Corp Callable Note Cant 3,000,000.00 Various 3,016,097.40 100.23 3,006,873.01 0.96% Aaa/AA+ 4.17 212021 2.10% 3,014,070.18 2.16% 22,220.00 (7,197.17) NR 3.93 2.222%Due 3/112021 166764BG4 Chal Corp Callable Note Carl 2,500,000.00 OWNIN16 2,485,350.00 99.14 2,478,565.00 0.78% Aa2/AA- 4.38 Vl MD21 2.23% 2.487,131.87 2.31% 6,562.50 (8,566.87) NR 4.14 2.1%Due 5/16/2021 6174MAL3 Morgan Stanley Note 2,800,000.00 O6/O6/2014 3,200,848.00 110.81 3,102,783.60 1.00% A3/BBB+ 4.58 5.5%Due 7282021 3.24% 3,056,918.32 2.95% 65,450.00 45,865.28 A 3.99 59491813P8 Microsoft Callable Note Cant 7821 3,045,000.00 Various 3,041,385.15 96.99 2,953,382.04 0.94% Aaa IAAA 4.61 1.55%Due e/812021 1.57% 3.041,674.18 2.24% 18,747.89 (88,292.14) AA+ 4.38 71,283,693A4 70,141,432.55 22.35% Al/A+ 2.70 Total US Corporate 69,315,000.00 2.17% 70,010,680.02 2.02% 606,164.09 130,752.53 A+ 2.511 US TREASURY 912828SSO US Treasury Note 3,750,000,00 12/22/2015 3,750,305,53 100,11 3754,28625 1A9% Ann IAA+ 0.33 0.875%Due 4/3012017 0.87% 3,750,073.60 0.53% 5,619.82 4,212.65 AAA 0.33 91282BG20 US Treasury Note 5,000,000.00 Various 4,974,391.74 100.00 5,000,195.00 1.58Is Aaa/AA+ 0.87 0.875%Due 11/1 5201 7 1.05% 4,992,349.79 0.87% 5,680.25 7,845.21 AAA 0.87 912828UR9 US Treasury Note 3,500,000.00 0412212016 3,496,457.04 99.T 3,491796.00 1.11Is Aaa/AA+ 1.16 0.75%Due 2/28/2018 0.81 % 3,497,776A5 0.95% 8,919.20 (5,980.45) AAA 1.15 91282BB33 US Treasury Note 11,000,000.00 Various 11,042,439.19 100.54 11,059,730.00 3.52% Aaa/AA+ 2.08 1.5%Due 1/31/2019 1.37% 11,028,474.47 L24% 69,048.91 31,255.53 AAA 2.03 912828SN1 US Treasury Note 5,000,000.00 1212812016 5,016,423.00 100.51 5,025,585.00 1.59% Aaa/AA+ 2.25 1.5%Due 3/312019 1.35% 5,016,363.06 1.27% 19,162.09 9,221.94 AAA 2.20 912828WS5 US Treasury Note 2,000,000.00 Various 1,996,861.46 100.75 2,014,922.00 0.64% Aaa/AA+ 2.50 1.625%Due W3012019 1.66% 1,998,414.67 1.32% 8978 16,507.33 AAA 2.44 Chandler Asset Management-CONFIDENTIAL 40 GAROrangeCounty Sanitation District Long Term Holdings Report Account#10268 As of 12/31/16 Purchase D.:o Cost V.:u: Mid Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security Description Par Value/Units Book Yie d Book Va Mkt YTM Accrued Int. Gain/Loss Fitch Duration US TREASURY 912828WW6 US Treasury Note 5,000,000.00 Various 5,012,388.70 100.70 5,034960.00 1.60% Ann/AA+ 2.58 1.625%Due 7/3112019 1.57% 5,006,435.94 1.35% 34001.36 28,524.06 AAA 2.51 912828F39 US Treasury Note 5,800,000.00 1012712014 5,873,186.87 100.98 5,857,095.20 1.86Is Aaa/AA+ 2.75 1.75%Due 9/3012019 1.48% 5,840,786+01 1.38% 25,932.69 16,309+19 AAA 2.67 912828G61 US Treasury Note 7,500,000.00 1211912014 7,449,634.50 100.21 7,515,525.00 2.38% Aaa/AA+ 2.92 1.5%Due 11/3012019 1."% 7,470,322.32 1.43% 9,890.11 46,202.68 AAA 2.84 912828XE5 US Treasury Note 5,000,000.00 12/21/2016 4,966,423.00 99.70 4,984,765.00 1.58Is Aaa/AA+ 3.42 1.5%Due 5/31/2020 1.70% 4,966,690.33 1.59% 6,593.41 18,074.67 AAA 3.31 912828L99 US Treasury Note 5,500,000.00 Various 5,424,666.87 98.TT 5,432,531.00 1.72Is Aaa/AA- 3.84 1.375%Due 10/31Y2020 1.67% 5.441,236.30 1.71% 12,952.35 (8,699.30) AAA 3.70 91282BN89 US Treasury Note 6,000,000.00 Various 5,895,840Al 98.40 5,904,138.00 1.88% Aaa/AA+ 4.09 1.375%Due 1/3112021 1.81 % 5,897,400.20 138% 34,524.45 6,737.80 AAA 3.93 912828TM US Treasury Note 7,000,000A0 Various 6,757,914,08 9s,6 6,751,990.00 2.14% Aaa/AA+ 4.75 1,125%Due 9/30/2021 1,88% 6760,891,95 1.91% 20,120.19 (8,901.95) AAA 4.58 912828T67 US Treasury Note 6,000,000.00 1211312016 5,813,691s8 W.97 5,818,128.00 1.84% Aaa/AA+ 4.84 1.25%Due 10/31/2021 1.92% 5,815,573.88 1.91% 12,845.30 2,554.12 AAA 4.66 91282BU65 US Treasury Note 7,000,000.00 1228/2016 6,900,492.20 99.25 6,947,773.00 2.20% Ass/AA+ 4.92 1.75%Due 11130/2021 2.06% 6,900,658.32 1.91% 10,769.23 47,114.68 AAA 4.68 912828WUD US Treasury Inflation Index Note 10,586,784.00 Various 10,472,789.71 98.24 10,400,403.65 3,29% Asa IAA+ 7.54 0.125%Duo 7/1512024 0.23% 10,500,528,22 0.36% 6,113.30 (100,124.57) APA 7.49 94,843,906.26 94,993,819.10 30.09% Ann I AA+ 3.52 Total US Treasury 95,636,784.00 1.41% 94,883,975.51 1.33% 282,262.44 109,853.59 AAA 3.43 316,376,296.57 315,341,910.72 100.00% Aal IAA+ 2.87 TOTAL PORTFOLIO 315,136,824.09 1,57% 315,079,227.26 1.51% 1,250,938.63 262,683.51 AAA 2.48 TOTAL MARKET VALUE PLUS ACCRUED 316,592,649.40 Chandler Asset Management-CONFIDENTIAL 41 CAROrangeCounty Sanitation District Liquid Holdings Report Account#10282 As of 12/31/16 Purchase D.:o Cost V.:u Mid Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security Description Par Value/Units Book Yie d Book Va u: Mkt YTM Accrued Ind. Gain/Loss Fitch Duration AGENCY 313385AV8 FHLB Discount Note 2,040,000.00 10/21/2016 2,038,220.95 99.98 2,039,628.55 1.80% P-1IA-1+ 0.05 0.34%Due 1/20/2017 0.35% 2,039,628.55 0.35% 0.00 0.00 F-1+ 0.05 313397AV3 FHLMC Discount Note 2,000,000.00 1211912016 1,999,164.44 Was 1,999,503.89 1T/% P-1IA-1+ 0.05 0.47%Due 1120/2017 0.48% 1,999,503+89 0.48% 0.00 0.00 F-1+ 0.05 313385BA3 FHLB Discount Note 1,000,000.00 1012712016 999,110.00 99.98 999,762.67 0.88% P-11 A-1+ 0.09 0.366%Due 1/2512017 0.36% 999,762.67 0.36% 0.00 0.00 F-1+ 0.07 313589MO FNMA Discount Note 3,000,000.00 11/30I2016 2,998,110.00 99.97 2,999,190.00 2.65% P-11A-1+ 0.07 0.41%Due 1/25/2017 0.41 % 2,999,190.00 0.41% 0.00 0.00 F-1+ 0.07 3137EADUO FHLMC Note 1,000,000.00 1012412016 1,000,320.00 100.00 9991988.00 0.89% Aaa/AA+ 0.07 0.5%Due 1/27/2017 0.37% 1.000,088.51 0.52% 2,138.89 (100.51) AAA 0.09 313385BC9 FHLB Discount Note 15,000,000.00 Various 14,991,760.00 99.97 14,995,060.00 13.26% P-1/A-1+ 0.07 0.456%Due 1/27/2017 0.46% 14,995,060,00 OAS% 0.00 0.00 F-1+ O.OT 313385BF2 FHLB Discount Note 1,000,000.00 12/21/2016 999,444.44 Was 999,597.22 0.88% P-1IA-1+ 0.08 0.5%Due 1/30/2017 0.51% 999,597.22 0.51% 0.00 0.00 F-1+ 0.08 313397BG5 FHLMC Discount Note 17,000,000.00 Various 16,992,388,63 99.96 16,993,361.69 15.03% P-11A-1+ 0.08 0.47%Due 113112017 0.48% 16,993,341.69 0.48% 0.00 0.00 F-1+ 0.08 313589BXO FNMA Discount Note 1,920,000.00 12/23/2016 1,918,606.08 Wm 1,918,838.40 1.70% P-1IA-1+ 0.13 0.48%Due 211512017 0.49% 1,918,838+40 0.49% 0.00 0.00 F-1+ 0.13 313385DL7 FHLB Discount Note 6,000,000.00 1212312016 5,991734.16 89.88 5,992,551.66 5.30% P-11A-1+ 0.23 0.55%Due 3/24/2017 0.55% 5,992,551.66 0.55% 0.00 0.00 F-1+ 0.23 31398ADM1 FNMA Note 2,500,000.00 12/27/2016 2,553,425.00 102.05 2,551,242.50 2.26% Ann IAA+ 0.46 5.375%Due 6/12/2017 0.67% 2,552,137.65 077% 7,092.01 (895.15) AAA 0.45 52,482,283.70 52,488,704.58 46.44% Aaa I AAA 0.11 Total Agency 52,460,000.00 CA8% 52,489,700.N 0.49% 9,230.90 (995.66) AAA 0.11 COMMERCIAL PAPER 89233GNP7 Toyota Motor Credit Discount CP 1,000,000.00 10/21/2016 998,129.44 99.95 999,W.78 0.88% P-11A-1+ 0.06 0.74%Due 112312017 0.75% 999,547.78 0.75% 0.00 0.00 NR 0.06 0266WNR7 American Honda Corp Discount CP 900,000.00 1212312016 899,397.75 99.95 899,562.00 0.80% P-1/A-1 0.07 0.73%Due 1/25/2019 0.74% $99,562.00 0.74% 0.00 0.00 F-1 0.09 69372ANT5 Paccar Financial Discount CP 2,000,000.00 12/23/2016 1,998,638.88 99.95 1,998,9811.88 1.77% P-1/A-1 0.07 0.7%Due 1/27/2017 0.71 % 1,998,988.88 O.T1% 0.00 0.00 NR 0.07 06538BQ63 Bank of Tokyo Monobishi NY Discount 1,000,000.00 1012612016 996,280.56 99.82 998,168.89 0.88% P-1/A-1 0.18 CP 1.05% 998,168.89 1.05% 0.00 0.00 NR 0.18 1.03%Due 316/2017 89233GRL2 Toyota Motor Credit Discount CP 1,000,000.00 1212312016 996,689.44 99.89 996,941.94 0.88% P-11A-1+ 0.30 1.01%Due 412012017 1.03% 996,941.94 L03% 0.00 0.00 NR 0.30 5,889,136.07 5,893,209.49 5.21 % P-1/A-1 0.13 Total Commercial Paper 5,900,000.00 0.83% 5,893,209.49 0.83% 0.00 0.00 F-1 0.13 Chandler Asul Menegemem-CONFIDENTIAL 42 GAROrangeCounty Sanitation District Liquid Holdings Report Account l)10282 As of 12/31/16 DescriptionPurchase D.:o Cost V.:u: Mkt Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security MONEY MARKET FUND Fl 261908107 Dreyfus Trsy/Agcy Cash Management 5,643,509.21 Various 5,643,509.21 1.00 5,643,509.21 4.99% Auto I AAA 0.00 521 0.39% 5,643,509.21 039% 0.00 0,00 AAA 0,00 5,643,509.21 5,643,509.21 4.99% Aaa I AAA 0.00 Total Money Market Fund FI 5,643,509.21 0.39% 5,643,509.21 0.39% 0.00 0.00 AAA 0.00 NEGOTIABLE CD - 89113ETK6 Toronto Dominion Yankee CD 1,150,000.00 12/20/2016 1,149,964.14 100A0 1,149,967.35 1.03% P-l/A-1+ 0,34 1.15%Due 513/2017 1.15% 1,149,96T.35 1.15% 8,853.40 0.00 NR 0.34 1,149,964.14 1,149,967.35 1.03% P-1/A-1+ 0.34 Total Negotiable CD 1,150,000.00 1.15% 1,149,967.35 1.15% 8,053.40 0.00 NR 0.34 SUPRANATIONAL 4581XOBV9 Inter AmericanDay Bank Note 1,000,000.00 10/24/2016 1,001,540,00 100.08 1,000,797.30 0.89% Aaa I AAA 020 1.125%Due 3/15/2017 0.73% 1,000,797.30 1.00% 3,312.50 0.00 AAA 021 4595OKB58 International Finance Corp Note 11000,000.00 10/26/2016 1,0011090.00 99.97 999,662.00 0.89% Aaa/AAA 0.31 1%Due 4/24/2017 0.78% 1,000,691.97 1.11% 1,861.11 (1,029.97) NR 0.31 2,002,630.00 2,000,459.30 1.T7% Aaa I AAA 0.26 Total Supranational 2,000,000.00 0.75% 2,001,489.27 1.05% 5,173.61 (1,029.97) AAA 0.26 US CORPORATE 46623EJY6 JP Morgan Chase Note 1,000,000.00 0212612016 1.000,470.00 100.02 1,000,170.00 0.89% A3/A- 0.13 1.35%Due 2/15/2017 1.30% 1,000,060A3 1.20% 5,100.00 109.57 A+ 0.12 713448CLO Pepsin Inc.Note 1,500,000.00 Various 1,501,765.00 Sam 1,499,416.50 1.33 Is Al/A 0.15 0.95%Due 212212017 0.75% 1,500,411.77 1.22% 5,106.25 (995.27) A 0.14 17275RAT9 Cisco Systems Note 1,000,000.00 0610812016 1,002,660.00 99.99 999,865.00 0.89% At/AA- 0.17 1.1%Due NMO17 073% 1.000,616.96 1.17% 3,605.56 (751.96) NR 0.17 532457BB3 Eli Lilly B CO Note 1,000,000.00 07/21/2016 1,027,930.00 100.81 1,008,125.00 0.91 % A2/AA- 0.20 5.2%Due 3/15/2017 0.79% 1,008,788.32 1.22% 15,311.11 (663.32) A 0.21 037833AM2 Apple Inc Note 1,000,00800 MIGBI2016 1,002,590+00 100.07 1,000702A0 0.89% Aid/AA+ 0.34 1.05%Due 5/5/2017 0.76% 1.000,985.15 0A4% 1,604.1I (283.15) NR 0.35 94974BFD7 Wells Fargo Corp Note 1,000,000.00 06/02/2016 1,008,550.00 100.28 1,002,833.00 0.89% A21 A 0.35 2.1%Due 5/8/2017 1.16% 1,003,241.34 L29% 3,091.67 (408.34) AA- 0.35 6,543,965.00 6,511,111.50 5.T9% At/A+ 0.22 Total US Corporate 6,500,000.00 0.90% 6,514,103.97 1.16% 33,81876 (2,992.47) A+ 0.22 Chandler Assn Management-CONFIDENTIAL 43 GAROrangeCounty Sanitation District Liquid Holdings Report Account#10282 As of 12/31/16 Purchase D.:o Cost V.:u Mint Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security Description Par Value/Units Book Yie d Book Va u: Mkt YTM Accrued Int. Gain/Loss Fitch Duration US TREASURY 91282BA91 US Treasury Note 3,000,000.00 10/20/2016 3,002,939.74 100.01 3,000,411.00 2.66% Ann/AA+ 0.04 0.75%Due 1/15/2017 0.33% 3,000,478.56 OAl %, 10,394.02 (81.66) NR 0.04 912796KE8 US Treasury Bill 5,250,000.00 Various 5,246,586.58 Was 5,248,743.49 4.64% P-11A-1+ 0.07 0.344%Due 112612017 0.35% 5,248,743+49 0.35% 0.00 0.00 F-1+ 0.07 912828SC5 US Treasury Note 16,000,000.00 Various 16,008,178.61 100.04 16,006,368.00 14.21 % Aae/AA+ 0.08 0.875%Due 1/3112017 0.39% 16,006,291.24 0.40% 68,686.96 76.76 AAA 0.08 912796KT5 US Treasury Bill 15,000,000.00 12/23/2016 14,971,999S8 99.83 14,974,135.21 13.25% P-1/A-1+ 0.30 0.57%Due 412012017 0.58% 14,974,135+21 0.58% 0,00 0.00 F-1+ 0.30 39,229,704.51 39,229,657.70 34.76% Aaa I AAA 0.16 Total US Treasury 39,250,000.00 OAS% 39,229,640.50 a."% 68,980.98 9.20 AAA 0.16 112,941,192.63 112,916,619.13 100.00% Aaa I AAA 0.14 TOTAL PORTFOLIO 112,903,509.21 0.52% 112,921,628.03 0.55% 126,057.65 (5,008.90) AAA 0.14 TOTAL MARKET VALUE PLUS ACCRUED 113,0112,676.711 Chandler Aseel MenegemeM-CONFIDENTIAL 44 GAROCSDLehman Exposure Holdings Report Account N10284 As of 12/31/16 Purchase D :a Cost V :u: Mid Price Market Value %of Pon Ma.d,IS&P Maturity CUSIP Security Description Par Value/Units Book YI:d Book Va Mkt Y7M Accrued Ind. Gain/Loss Fitch Duration COMMON STOCK SLHOPNTA4 Lehman Brothers,Inc Open Position 60,641.49 11/21/2014 57,842.64 0.42 25,621.03 13.93% NRINR 0.00 Lang Exposure 0.00% 57,842.64 000% 0.00 (32,221.61) NR 0.00 Due 12131/2016 57,842.64 25,621.03 13.93% NRINR 0.00 Total Common Stock 60,641.49 NIA 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 US CORPORATE 525ESCI67 Lehman Brothers Note-Defaulted 600,000,00 09/19/2008 352,614,36 6.38 38,250,00 20.80% NRINR OOT Due 112412017 0.00% 352,614.36 000% 0.00 (314,364.36) NR 000 525ESCOV6 Lehman Brothers Note-Defaulted 2,000,000.00 09/18/2008 1,139.57T70 6.00 120,000.00 65.26% NRINR 3283 Due 10/2212049 0.00% 1,139,577.70 0.00% 0.00 (1,019,577.70) NR 0.00 1,492,192.06 158,260.00 86.07% NRINR 2/.91 Total US Corporate 2,600,000.00 NIA 1,492,192.06 0.00% 0.00 (1,333,942.06) NR 0.00 1,550,034.70 183,871.03 100.00% NRINR 21.44 TOTAL PORTFOLIO 2,660,"IA9 NIA 1,550,034.70 0.00% 0.00 (1,366,163.67) NR 0.00 TOTAL MARKET VALUE PLUS ACCRUED 183,871.03 Chandler Ae cManagement-CONFIDENTIAL 45 Rating Agency Comparisons A summary of investment grade ratings are listed below. More complete descriptions of Moody's and Standard & Poor's ratings are included in the following pages. Quality/Grade Moody's Standard & Poor's Fitch Best Quality Aaa AAA AAA High Quality Aal AA+ AA+ Aa2 AA AA Aa3 AA- AA- Upper Medium Grade Al A+ A+ A2 A A A3 A- A- Medium Grade Baal BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB1 Moody's - Investment Grade "Aaa" - Bonds rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. "Aa" - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. "A" - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Mae" - Bonds which are rated Baa are considered as medium grade obligations; i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Bonds in the As, A, and Bee are also assigned "1", "2", or "S' based on the strength of the issue within each category. Accordingly, "At" would be the strongest group of A securities and "AT' would be the weakest A securities. Be, B, Caa, Ca, and C - Bonds that possess one of these ratings provide questionable protection of interest and principal ("Be" indicates some speculative elements; "B" indicates a general lack of characteristics of desirable investment; "Caa" represents a poor standing; "Ca" represents obligations which are speculative in a high degree; and "C" represents the lowest rated class of bonds). "Caa", "Ca" and "C" bonds may be in default. Standard and Poor's-Investment Grade AAA- Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay interest and repay principal Is extremely strong. AA - Debt rated "AA" has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in small degree. A - Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB - Debt rated "BBB" is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. Standard and Poor's - Speculative Grade Retina Debt rated "BB", "B", "CCC", "CC" and "C" is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. "BB" indicates the least degree of speculation and "C" the highest. While such debt will likely have some quality and protective characteristics these are outweighed by major uncertainties or major exposures to adverse conditions. BB - Debt rated "BB" has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The "BB" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BBB" rating. B - Debt rated "B" has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The "B" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BB" or"BB" rating. CCC - Debt rated "CCC' has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The "CCC' rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "B" or"B" rating. CC - The rating "CC' typically is applied to debt subordinated to senior debt that is assigned an actual or implied "CCC' debt rating. C-The rating"C'typically is applied to debt subordinated to senior debt which is assigned an actual or implied "CCC" debt rating. The "C' rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued. Cl -The rating "Cl" is reserved for income bonds on which no interest is being paid. D - Debt rated "D" is in payment default. The "D" rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized. Plus (+) or Minus (-) - The ratings from "AA" to "CCC' may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. NR-Indicates no rating has been requested,that there is insufficient information on which to base a rating, or that S&P does not rate a particular type of obligation as a matter of policy. 'e? Op January 31, 2017 STAFF REPORT Certificates of Participation (COP) Mid-Year Report for the Period Ended December 31, 2016 Summary The District began issuing Certificates of Participation (COPS) in 1990. These COPS were a part of our long-term financing plan that included both variable interest rate and traditional fixed rate borrowing. Following are the current outstanding debt issues of the District: In May 2007, the District issued $95.18 million of fixed rate COPs, Series 2007A refunding a portion of the Series 2003 fixed rate debt. The true interest cost for the issue is 4.5 percent. In December 2007, the District issued $300 million of fixed rate COPS, Series 2007E at a true interest cost of 4.71 percent for the issue. In May 2009, the District issued $200 million of fixed rate CON, Series 2009A at a true interest cost of 4.72 percent for the issue. In May 2010, the District issued $80 million of fixed rate BABs, Series 2010A at a true interest cost of 3.68 percent for the issue. In December 2010, the District issued $157 million of fixed rate BABs, Series 2010C at a true interest cost of 4.11 percent for the issue. In October 2011, the District issued $147.595 million of fixed rate COPS, Series 2011A refunding a portion of the Series 2000 variable rate debt and a portion of the Series 2003 fixed rate debt. The true interest cost for the issue is 2.61 percent. In March 2012, the District issued $100.645 million of fixed rate COPs, Series 2012A refunding the Series 2003 fixed rate debt. The true interest cost for the issue is 3.54 percent. OCSD ♦ P.0.Box8127 ♦ Foun in Velley,CA 9272M127 ♦ (714)%2-2411 COP Mid-Year Report For the Period Ended December 31, 2016 Page 2 of 2 In August 2012, the District issued $66.395 million of fixed rate COPs, Series 2012B refunding the Series 2000 variable rate debt. The true interest cost for the issue is 1.50 percent. With the issuance of Series 201213, there remains no variable interest rate COPs at the District. In August 2014, the District issued $85.09 million of fixed rate COPS, Series 2014A, refunding a portion of Series 2007B debt. The true interest cost for the issue is 2.34 percent. In February 2015, the District issued $127.51 million of fixed rate COPS, Series 2015A, refunding $152.99 million of the Series 2007E debt. The true interest cost for the issue is 3.30 percent. In March 2016, the District issued $145.88 million of fixed rate CANs, Series 2016A, refunding $162.78 million of the Series 2009A fixed rate debt. The true interest cost for the issue is 3.02 percent. In November 2016, the District issued $109.875 million of fixed rate CANS, Series 201613, refunding the Series 2014B CANs. The true interest cost for the issue is 0.87 percent. Additional Information The graph entitled, "OCSD COP Rate History Report,' shows the various fixed interest rates of the District's thirteen debt issues. Attachments 1. Graph - OCSD COP Rate History Report Prepared by Finance,1/17/2017,4:10 PM OCSD COP RATE HISTORY REPORT DECEMBER 2016 6.00 5.00 4.00 d w 3.00 2.00 1.00 0.00 .e m e ., DATE 3 A e a a A a 3 3 a 3 3 Y e a �Sena2007AFlxO —8 fts2W7BFlxW �Sena20WBFp �Senes2008AFlxed �SMes2010AFlxed +Senea2010CFlxed �Sedes2011AFlxed �Senea2012AFlxed — 8ena2012BFlxed �Sena2010AFped �Senes2014BFlxed �Sedes2015AFlxed Sena 2016A Flxw �Sedes 2018E FlxW HAdepAasdl220\Common\Monthly and Quarterly Treasurers Report\COP Rate History Report FY 16-17 ORANGE COUNTY SANITATION DISTRICT FINANCIAL MANAGEMENT DIVISION 10844 Ellis Avenue Fountain Valley, California 92708-7018 714.962.2411 www.ocsd.com 12/31/16 ADMINISTRATION COMMITTEE Meeting Date T%%2011oir. 0 2 /0 8117 z/zz/v AGENDA REPORT Item Item Number 5 13 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: CONSIDERATION OF BUDGET ASSUMPTIONS AND BUDGET CALENDAR FOR PREPARATION OF THE FY 2017-18 BUDGET UPDATE GENERAL MANAGER'S RECOMMENDATION Approve the FY 2017-18 budget assumptions and direct staff to incorporate these parameters in preparing the FY 2017-18 budget update. BACKGROUND For the budget update process, the Administration Committee establishes the Budget Assumptions and approves the Budget Calendar. Staff will make a brief presentation at the Committee meeting. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Currently, there are no proposed changes to the Orange County Sanitation District Fiscal Policy. The Fiscal Policy is published in the FY 2016-17 and 2017-18 Budget document (Section 3, Pages 1-8),and is available on the Orange County Sanitation District's website. FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s)are attached in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Preliminary Budget Assumptions Highlights (Pages 2-5) • Budget Update Calendar (Pages 6-9) • Presentation from 2/8/17 Administration Committee Meeting Page 1 &9 FY 2017-18 Preliminary Budget Assumptions Economic Assumptions • Inflation for Orange County in FY 2017-18 is projected to be 1.6 percent based on the 2017 projected percentage change in consumer price index obtained from the December 2016 Economic and Business Review report prepared by Chapman University. This is 0.4 percent lower than the 2.0 percent inflation factor that was used for the FY 2017-18 budget. Revenue Assumptions • Based upon the revised Sewer Service Fee Rate Schedule approved by the Board in May 2015, the single-family residence (SFR) rate will increase by 1.2 percent to $331 in FY 2017-18. • Note that each $1 increase in the SFR rate generates approximately$900,000 per year. • The capital facilities capacity charge (CFCC)fee captures only those infrastructure costs that relate to additional capacity. The CFCC fee will increase for FY 2017-18 by the increase in the Engineering-News Record construction cost index. Other infrastructure costs such as improved treatment, rehabilitation, refurbishment, and replacement,will be supported through userfees. • Given the Facilities Master Plan adopted in December 2009, a rate study was completed in January 2013 to ensure that the CFCC fee methodology remains equitable and to confirm that an appropriate share of system costs would be recovered from new development. • Revenues will be budgeted to reflect little growth in Equivalent Dwelling Unit (EDU) connections that have remained flat over the past five years. • Changes in permit user rates for flow, Biochemical Oxygen Demand (BOD) and Total Suspended Solids (TSS) are based upon the change in the SFR and will increase by 1.2 percent for FY 2017-18. • Annexation fees capture both the net current assets and the equivalent property tax allocations totaling $4,235 per acre. • Annexable property in the District's service area sphere is minimal; consequently, no FY 2017-18 income from annexation fees is anticipated. • Property tax revenues are preliminarily estimated to increase by approximately five percent from FY 2016-17 to $91,368,000. A two percent annual increase in Assessed Value is authorized by the state constitution and is included in the increases noted above. The additional increase in assessed value is from authorized increases to market value when property is sold at a higher value. • Earnings on the investment of the District's operating cash and reserves will be budgeted at 1.0 percent of the average cash and investment balance projected for the fiscal year. • No additional debt issuance is scheduled for FY 2017-18. 2 FY 2017-18 Preliminary Budget Assumptions Operating Assumptions • Operating expenses are expected to approximate the adopted FY 2017-18 budget of $152.4 million. • Average daily flows are projected at 185 mgd for FY 2017-18. This projection reflects an expected increase in economic activity. The FY 2017-18 flow projection of 185 mgd reflects an increase of 1.6 mgd from the actual for the first 5 months of the current year and is 2 mgd higher than the final actual flow for FY 2015-16. Employee/Staffing Assumptions • Staffing will remain essentially flat (less than 1%). The total FY 2017-18 authorized staffing level is 627.00 FTEs, excluding Management Discretion positions. • Vacant positions as of 12/31/2016 are budgeted at 50 percent of step 1 for the remainder of FY 2016-17 and at 100 percent of step 2 for FY 2017-18. • New positions will be projected at 100 percent of step 1 for FY 2017-18. • A 5.0 percent vacancy factor on authorized positions has been budgeted for FY 2017-18. The actual vacancy factor for 2015-16 was 8.5 percent. This vacancy factor accounts for time spent for recruitment and turnover. • The Memorandums of Understanding (MOUs) for the OCEA, the Local 501, and the Supervisor and Professional (SPMT) groups expire on June 30, 2019. Salary adjustments will be included in the budget for COLA based upon the current MOUs. • OCERS rates for FY 2017-18 will decrease as a result of paying off the UAAL. Retirement costs for employees enrolled in OCERS Plans G and H are estimated at a rate of 15.83 percent of the employee's base salary for FY 2017-18, down from 16.59 percent in FY 2016-17. The rates for Plans G and H include the District's pickup of 3.5 percent of employees' required contributions. Employees enrolled in OCERS Plan B are estimated at a rate of 10.30 percent of the employee's base salary for FY 2017-18, down from 10.99 percent in FY 2016-17. All employees hired on or after January 1, 2013 are enrolled in OCERS Plan U and are estimated at a rate of 9.25 percent for FY 2017-18, down from 9.69 percent in FY 2016-17. Interns are not enrolled in OCERS so their retirement benefits are calculated at 6.2 percent (FICA rate). • Other employee benefits and insurances will be budgeted to increase in FY 2017-18 by moderate but yet to be determined amounts. Materials, Supplies, & Services Assumptions • The proposed operating budget will continue to reflect an emphasis on safety, security, and maintenance of plant assets and infrastructure. • An amount equal to half of one percent of the Operating materials and services budget will be a contingency for prior year re-appropriations. Since the current year's budget lapses on June 30, a contingency is needed in the succeeding budget year for goods or services ordered at the end of one budget year but not delivered until the following year. 3 FY 2017-18 Preliminary Budget Assumptions • An amount equal to 0.85 percent of the Operating materials and services budget will be the General Manager's contingency budget. These funds will be allocated to appropriate line items during the year after requests and justifications for unanticipated needs are approved by the General Manager. • Resource needs for strategic initiatives will be included in the budget. Capital Improvement Program Assumptions • The FY 2017-18 cash flow budget, based on the most current Validated Capital Improvement Program (CIP), is the target. • The baseline CIP cash flow for FY 2017-18 is$138 million. • Continual evaluation of the CIP by the Asset Management Team may result in deferral or reduction of some projects and a resultant increase in O&M repair costs for materials and services, if the net cash flow impact is a decrease. • The FY 2017-18 CIP budget will only increase for critical projects which were not previously identified in the Strategic Plan Update. • For the first five months of FY 2016-17, $45.5 million of the $171.3 million CIP budget, approximately 26.6 percent, was expended. Debt Financing • The District will issue new debt in the form of Certificates of Participation (COP) as needed to fund the CIP and to maintain reserves. • No additional debt issuance is scheduled for FY 2017-18. • Debt will only be used for CIP and capital expenses, not for operating expenses. • Capital financing plans no longer include future borrowings over the next ten years as the approved user fee schedule is considered sufficient. • Borrowing is proposed only for facilities which do not add capacity and that are funded by all users for replacement, rehabilitation, and improved treatment. Reserve Assumptions The existing reserve policy is summarized as follows: ► A cash flow reserve will be established to fund operations, maintenance and certificates of participation expenses for the first half of the fiscal year, prior to receipt of the first installment of the property tax allocation and sewer service user fees which are collected as a separate line item on the property tax bill. The level of this reserve will be established as the sum of an amount equal to six months operations and maintenance expenses and the total of the annual debt(COP)service payments due in August each year. ► An operating contingency reserve will be established to provide for non-recurring expenditures that were not anticipated when the annual budget and sewer service fees 4 FY 2017-18 Preliminary Budget Assumptions were considered and adopted. The level of this reserve will be established at an amount equal to ten percent of the annual operating budget. ► A capital improvement reserve will be maintained to fund annual increments of the capital improvement program. The long-term target is for one half of the capital improvement program to be funded from borrowing and for one half to be funded from current revenues and reserves. With this program in mind, the target level of this reserve has been established at one-half of the average annual capital improvement program over the next ten years. ► Catastrophic loss, or self-insurance, reserves will be maintained for property damage including fire, flood and earthquake, for general liability and for workers' compensation. These reserves are intended to work with purchased insurance policies, FEMA disaster reimbursements and State disaster reimbursements. The potential infrastructure loss from a major earthquake, of which the District currently has limited outside insurance coverage of$25 million, has been estimated to be as high as $1.3 billion. The level of this reserve has been set at$57 million should such a catastrophic event occur. This reserve amount will assist the District with any short-term funding needs until Federal and State assistance becomes available. ► Accumulated capital funds will be set aside for certain speck, short-term capital improvements as the need and availability arise. ► A capital replacement/renewal reserve policy has been established to provide thirty percent of the funding to replace or refurbish the current collection,treatment and disposal facilities at the end of their useful economic lives. Based on the FY 2011-12 Asset Management Plan, the current replacement value of these facilities is estimated to be $3.14 billion for the collection facilities and $3.12 billion for the treatment and disposal facilities. The initial reserve level has been established at $50 million, which will be augmented by interest earnings and a small portion of the annual sewer user fee, in order to meet projected needs through the year 2030. ► Provisions of the various certificates of participation (COP) issues require debt service reserves to be under the control of the Trustee for that issue. These reserve funds are not available for the general needs of the District and must be maintained at specified levels. The current level of required COP service reserves is projected to be $186.4 million. ► Accumulated funds exceeding the levels specified by District policy will be maintained in a rate stabilization fund. These funds will be applied to future years' needs in order to maintain rates or to moderate annual fluctuations. There is no established target for this reserve. 5 FY 2017-18 Budget Calendar Tasks Responsibility EvenUDue Date PHASE I-BUDGET PREPARATION Preliminary Budget Assumptions Identified Financial Planning 12/22/16 Capital Improvement Program (CIP)— Future Project Engineering Planning 1/6/17 Attributes Reviewed and Updated Preliminary Budget Assumptions & Draft Budget Financial Management 1/12/17 Calendar Presented to Executive Management Team (EMT) and Managers Team (MT) Preparation for Budget Kickoff/Training Session: Financial Planning 1/20/17 • Salary and benefits downloaded to Excel worksheets • Develop line item worksheets with mid-year actual expense • Prepare/update budget instruction manual CIP— Engineering Validation Inputs Complete Engineering Project 1/20/17 Managers CIP— New Project Numbers Assigned Engineering Project 1/27/17 Management Office (PMO) Budget Kickoff/Training Session: Financial Planning 1/30/17 • Distribute budget instruction manual update • Conduct budget training session • Review submission deadlines Budget Assumptions Presented to Administration Financial Management 2/8/17 Committee Mid-Year Financial Report to Administration Committee Financial Management 2/8/17 Operating Divisional Budgets: New Position and Divisional Budget 2/10/17 Change to Existing Position Decision Packages Due to Coordinators Human Resources (Richard Spencer, Ext. 7164)with copies to John Ralston Operating Budget: Promotional Items Request Forms Divisional Budget 2/10/17 and Conference Request Forms Due to Dr. Robert Coordinators Ghirelli (Division 110) Capital Equipment Budget: Vehicle Capital Equipment Divisional Budget 2/10/17 Decision Packages Due to Fleet Services (Jim Tintle, Coordinators Ext. 7214) 6 FY 2017-18 Budget Calendar Tasks Responsibility Event/Due Date Capital Equipment Budget: Computer Capital Divisional Budget 2/10/17 Equipment Decision Packages Due to Information Coordinators Technology(John Swindler, Ext. 7260) Mid-Year Financial Report to Board Financial Management 2122117 Division Budget Packages Due to Financial Planning: Divisional Budget 2/24/17 • Projection of 2016-17 actual operating costs Coordinators • Proposed operating costs for 2017-18 • Operating Budget Expense Detail • Meetings, Memberships and Training Requests • Capital Equipment Decision Packages (other than computer and vehicle decision packages which were due on 2/10/17) • New program decision packages (Financial Planning will collate and bind these items—along with salary information-into the Preliminary Division Budget Document for use during the budget review process.) CIP— Non-engineering CIP project validation forms Non-engineering 2/27/17 completed & approved Project Managers CIP— Preliminary capital equipment request estimates Financial Planning 3/1/17 delivered to PMO Complete the Compilation of the Preliminary Division Financial Planning 3/1/17 Budget Update Packages CIP— Unified Preliminary CIP Budgets& Equipment Engineering PMO 3/7/17 Request Reports and Analysis Created CIP—Validated CIP budgets delivered to IT/Finance Engineering PMO 3/10/17 Department Budget Narrative - Updates of the Department Budget 3/23/17 FY 2016-17 & 2017-18 Budget Executive Summary Coordinator Due to Financial Planning PHASE 11- BUDGET REVIEW Divisional Budgets- Distribution of Preliminary Line Financial Planning 3/2/17 Item Requested Budgets to Department Heads and Managers along with Analysis/Questions for Review 7 FY 2017-18 Budget Calendar Operating Budget— Information on New Positions, Human Resources 3/6/17 Position Upgrades & Reclassifications Submitted to the General Manager Tasks Responsibility Event/Due Date Operating Budget— Division Budget Review Meetings Financial Planning & 3/6/17—3/9/17 with Finance and Division Representatives Division Representatives CIP— Review/Adjust Preliminary CIP Budget Engineering 3/8/17 Management CIP— Preliminary Engineering/Finance Budget Review Engineering/Financial 3/13/17 Workshop Management CIP— Final Adjustments/Confirm 20 Year Cash Flow Engineering/Financial 3/14/17 Schedules/Final capital equipment requests delivered Management to PMO Operating Budget-Completion of Preliminary Financial Planning 3/14/17 Divisional Budgets and Compilation into Departmental Budgets Operating Budget— Recommendations to General Financial Planning 3/15/17 Manager Final Operating Budget—General Manager Review of Financial Planning, 3/16/17—3/22/17 Budget Recommendations General Manager, & Department Heads Capital Equipment Budget— Requests Reviewed & Financial Planning, 3/16/17—3/22/17 Approved General Manager, & Department Heads CIP—Approve Proposed CIP Budget EMT 3/23/17 Operating Budget— Report of General Manager's General Manager 3/27/17 Decisions on New Positions, Position Upgrades & Reclassifications Submitted to the Financial Planning CIP Budget Update- Operations Committee Review Engineering 4/5/17 PHASE III- BUDGET PRESENTATION Operating Budget— Presentation of Preliminary Budget Financial Management 4/3/17 Update by Division/Department to EMT Operating Budget Update—Overview to Administration Financial Management 4112117 Committee 8 FY 2017-18 Budget Calendar CIP- Final CIP Budget Document Preparation and Financial Planning 4/13/17 Incorporation into Final Budget Document CIP— Review draft of Final Budget Document pages Financial Planning 4/17/17 with Engineering Planning & PMO Tasks Responsibility Event/Due Date Initial - Proposed Budget finalized Financial Planning 4/24/17 General Manager's Budget Message Completed General Manager/ 5/12/17 Financial Management Approval of General Manager's Budget Message General Manager 5/17/17 Final - Proposed Budget to Printer Financial Planning 5/24/17 PHASE IV- BUDGET DELIBERATIONS Final Draft- Proposed 2017-18 Budget Update Financial Management Ops—6l7/17 Presented to Committees Admin—6/14/17 Public Hearing & Board Adoption Board of Directors 6128117 PHASE V-DISTRIBUTION OF BUDGET Final line item budget and equipment budgets posted Financial Planning 7/10/17 in H:\ntglobal 9 OCSD FY 2017- 18 Budget Update Budget Assumptions Budget Development Assumptions Economics • Inflation for Orange County is projected to be approximately 1 . 6% Revenue • Based on the May 2015 Board approved Single-family residence (SFR) rate is scheduled to increase 1. 2% to $331 in FY17- 18. Reserves • Current reserve policy is unchanged Comparison of Single Family Residential Rates (July 2016) $900 $842 $800 $700 m $600 m N $500 `m c $400 $327 $300 $200 $159 $100 $0 Operations • Average daily flow projections are projected to be 185 mgd for FY 2017- 18 . This projection reflects an expected increase of 1 . 6 mgd from the actual for the first five months of the current year. • Operating expenses are expected to approximate the previously adopted FY 2017- 18 budget of $ 152 .4 Million . • Staffing levels will remain essentially flat, or less than a 1 percent increase . The current authorized staffing level is 627 FTE . • A 5% vacancy factor will be budgeted for authorized positions . • Salary adjustments will be included in the budget for COLA based increases identified in the MOUs that have been negotiated through June 30, 2019 . • Moderate increases in benefits are anticipated . Capital Improvement Program (CIP) • Cash flow assumptions are based on the most recent validated CIP. • Baseline CIP is $ 138 .0 million for FY17- 18 . Debt Financing • Continue to issue COPS as the primary method of financing the capital program . • No additional "new money" debt issuance is scheduled for FY 2017- 18. Budget Summary Revenues FY 17-18 Ten Year Cash Flow Fees and Charges $ 340M (76%) $ 3,582M (74%) Property Taxes 91M (21%) 1,095M (22%) Interest / Other 15M ( 3%) 191M ( 4%) Total Revenues $ 446M $ 41868M Expenditures FY 17-18 Ten Year Cash Flow Operating $ 150M (40%) $ 1,732M (35%) CIP / RRR 138M (37%) 2,375M (47%) Debt Service 83M (22%) 845M (17%) Other 4M ( 1%) 31M ( 1%) Total Outlays $ 375M $41983M Net Surplus (Deficit) $ 71M $(115)M Budget Development Key Meeting Dates • FY 17- 18 Budget Assumptions February • Review of Revenues March • Review of Expenditures April Budget Development Key Meeting Dates • Operations Committee Budget Overview May, June • Administration Committee Budget Elements Review May, June • Board Meeting FY 15- 16 Budget Update Approval June Questions ? ADMINISTRATION COMMITTEE Meeting Date T%%2011Dir. 0 2 /0 e/17 z/zz/v AGENDA REPORT Item Item Number 6 14 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: COOPERATIVE PROCUREMENT AGREEMENTS WITH U.S. COMMUNITIES GOVERNMENT PURCHASING ALLIANCE AND NATIONAL ASSOCIATION OF STATE PROCUREMENT OFFICIALS VALUEPOINT COOPERATIVE PURCHASING ORGANIZATION GENERAL MANAGER'S RECOMMENDATION Authorize the purchasing of information technology products, services, and solutions utilizing the U.S. Communities Government Purchasing Alliance and National Association of State Procurement Officials ValuePoint Cooperative Purchasing Organization (NASPO ValuePoint) for the period March 1, 2017 through February 29, 2020 for a total amount not to exceed $6,000,000, in accordance with Ordinance No. OCSD-47, Section 2.03(B) Cooperative Purchases. BACKGROUND The Orange County Sanitation District (Sanitation District) desires to select U.S. Communities Government Purchasing Alliance and NASPO ValuePoint as providers of technology products, services, and solutions needed to complete an entire technology solution based on competitive contract pricing, breadth of product offerings, availability, and the ease of using online ordering systems. Large capital items will be procured through the bidding process and all purchases continue to follow the existing approval and procurement processes in accordance with Purchasing Ordinance No. OCSD-47. These cooperatives provide deep discounts not normally available through the Sanitation District's bid process. To properly maintain and provide solutions to the Sanitation District's facilities, the Information Technology (IT) division has a need to purchase technology products, services, and solutions. Such item requirements have been forecasted based upon projected obsolete equipment, historical product failure rates, and new items to address general capacity, redundancy, or security. Since technology changes frequently, it is not appropriate to stock these items in the Sanitation District's warehouses. IT currently uses vendors providing technology items and recurring maintenance support and services using U.S. Communities Government Purchasing Alliance and NASPO ValuePoint. Purchases include: • Networking and telephony equipment • Servers and desktop computers Page 1 of 4 • Data storage and backup appliances • Software licenses and maintenance agreements • Consulting services • Disaster recovery and cyber security solutions • Printers, scanners, and monitors • Computer peripherals • Uninterruptible power supply components Example U.S. Communities Government Purchasing Alliance contracts include: • Insight Public Sector Contract: Technology Products, Services and Solutions - Contract Number: 4400006644, Lead Agency: County of Fairfax, Virginia • Graybar Telecommunications Contract: Telecommunication Supplies - Contract Number: MA-IS-1540125, Lead Agency: County of Los Angeles, California • OLT Solutions Contract: Oracle Products, Services and Solutions - Contract Number: 13120, Lead Agency: Maricopa County, AZ • DLT Solutions Contract: Amazon Web Services- Contract Number: 4400006643, Lead Agency: County of Fairfax, Virginia Example NASPO ValuePoint contracts include: • Hewlett Packard Enterprise: Computer Equipment, Peripherals & Related Services - Master Agreement No. MNNVP-134, Lead State: Minnesota • HP, Inc.: Computer Equipment, Peripherals & Related Services - Master Agreement No. MNNVP-133, Lead State: Minnesota • Cisco Systems, Inc.: Computer Equipment, Peripherals & Related Services - Master Agreement No. MNWNC-105, Lead State: Minnesota • Nimble Storage, Inc.: Computer Equipment: Storage including Related Peripherals & Services — Master Agreement No. MNWNC-122, Lead State: Minnesota RELEVANT STANDARDS • Efficiency efforts reduce the cost to provide the current service level or standard • Ensure public's money is wisely spent • Maintain and Support Enterprise Asset and Financial Management Systems • Maintain a proactive asset management program PROBLEM The procurement process for information technology items and services for the Sanitation District involves many efforts and associated costs. IT and Purchasing work diligently in finding ways to streamline the procurement process while minimizing cost concomitant of the procurement of technology items. Page 2 of 4 PROPOSED SOLUTION The Sanitation District's purchasing power is limited, therefore, utilizing other large agencies' cooperative agreement(s) who have completed a vetted procurement process is a viable and economical solution. TIMING CONCERNS Maintenance and deploymentof new systems and solutions is an imperative for continued support of plant operations and maintenance initiatives without delay. RAMIFICATIONS OF NOT TAKING ACTION Risk of being unable to maintain/deploy or delay IT projects supporting plant operations and maintenance. Increased cost related to the procurement of technology items. PRIOR COMMITTEE/BOARD ACTION/S: April 2016 - Board approval authorizing purchases of information technology products, services, and solutions using the County of Fairfax, Virginia contract number#440000664 through April 30, 2019 (Item No. 16). October 2015 - Board approval of Cooperative procurement with Admin Minnesota Materials Management Division (WSCA/NASPO-HP). November 2014 - Board approval of Cooperative procurement (WSCA/NASPO-Cisco). ADDITIONAL INFORMATION The State of California Procurement Division (PD) is the central purchasing authority for all State departments and local government agencies. With a massive marketplace and billions of dollars in purchasing power, they are able to offer a lower procurement cost to California's State, county, city, special district, education, and other government entities through their Leveraged Procurement Agreements (LPAs). LPAs allow entities/agencies to buy directly from suppliers through existing contracts and agreements. LPAs offered by the State to California governmental agencies include the U.S. Communities Government Purchasing Alliance and NASPO ValuePoint for technology products, equipment and technology services, and solutions. Upon utilization of each contract under these LPAs, OCSD staff verifies competitiveness of pricing based upon volume purchasing through these cooperatives. U.S. Communities Government Purchasing Alliance is a government purchasing cooperative that reduces the cost of goods and services by aggregating the purchasing power of public agencies nationwide. U.S. Communities has over 55,000 participating agencies, from both the public and nonprofit sectors. The U.S. Communities Advisory Board is made up of key government purchasing officials from across the United States. Page 3 of 4 The Advisory Board provides leadership and overall direction for the U.S. Communities Government Purchasing Alliance. The National Association of State Procurement Officials (NASPO) ValuePoint Cooperative Purchasing Organization (formerly WSCA-NASPO) provides the highest standard of excellence in public cooperative contracting. The organization leverages the leadership and expertise of all states with the purchasing power of their public entities, NASPO ValuePoint delivers best value, reliable, competitively sourced contracts. Since 1993 NASPO ValuePoint has been the cooperative purchasing arm of NASPO (the National Association of State Procurement Officials) encouraging, fostering, and guiding the nation's most significant public contract cooperative. NASPO ValuePoint is a unified, nationally focused cooperative aggregating the demand of all 50 states, the District of Columbia, and the organized US territories, their political subdivisions, and other eligible entities spurring best value, innovation, and competition in the marketplace. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance No. OCSD-47, Section 2.03(B) Cooperative Purchases. This item has been budgeted in the established annual Joint Operating and Capital Improvement Program budgets. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: N/A Page 4 of 4 STEERING COMMITTEE Meeting Date T%%2011Dir. 0 2 /2 2 /I7 V 7 AGENDA REPORT Item Item Number 2 Is Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: HEADQUARTERS COMPLEX, SITE AND SECURITY, AND ENTRANCE REALIGNMENT PROGRAM, PROJECT NO. P1-128 GENERAL MANAGER'S RECOMMENDATION Information Only. BACKGROUND Many of the Orange County Sanitation District (Sanitation District) non-process buildings and structures located at its Reclamation Plant No. 1 (Plant No. 1) in the City of Fountain Valley (City) were built without building permits. In 1992, the Sanitation District and the City entered into an agreement which required the Sanitation District to be subject to the City's planning and building laws and to obtain building permits. In 1993, the Sanitation District approved the Fountain Valley Specific Plan establishing these requirements, which was then subsequently approved and adopted by the City in 1994. In 2008, the Sanitation District entered into another agreement with the City, which provided for the issuance of building permits for the existing Control Center Building, Laboratory Building, and Maintenance Buildings 5 and 6 that the Sanitation District constructed without building permits. To satisfy the building permit requirement, the Sanitation District paid the City $356,835 in lieu of a 3% impact fee normally charged by the City associated with the issuance of a building permit. In 2010 and amended in 2011, the Sanitation District entered into an agreement with the City regarding compliance with the City's Construction Code and Americans with Disabilities Act requirements for improvements to buildings and grounds that fall within the guidelines of the Specific Plan. In July 2011, the Board of Directors awarded a Professional Design Services Agreement to The Austin Company for the rehabilitation of Maintenance Buildings 1, 2, 3, 4, 5, 6, 7, and 8, Shop A, Shop B, Fleet Services, Warehouse, Administration Building, Purchasing Building, Laboratory, and several trailer complexes.The October2012 preliminary design report documented the required upgrades to comply with the City agreement and rehabilitation requirements. In 2013, the Sanitation District entered into another agreement with the City for the issuance of permits for the remaining buildings at Plant No. 1 which were constructed without building permits.These are the Maintenance Buildings 1,2, 3,4, 7, and 8, Shop A, Page 1 of 6 Shop B, Fleet Services, Warehouse, Administration Building, Purchasing Building, and Laboratory. Accessibility, Code, and rehabilitation projects have been completed for the Control Center, Maintenance Buildings 1, 2, 3, 4, 5, 6, and 7, Shop A, Shop B, Warehouse, and Purchasing Conference Room. The Sanitation District completed the design and is currently obtaining building permits for the Fleet Services Building and Building 8. The Administration Building, Human Resources Building, Purchasing Building, Laboratory Building, and several temporary trailer complexes have significant code compliance and deferred maintenance issues. Due to the expense involved with retrofitting these buildings, the Sanitation District decided to investigate refurbishment versus replacement for these facilities under an Administrative Facilities Master Plan. The Administrative Facilities Master Plan studied several project implementation strategies including maintaining the existing buildings, repurposing and refurbishing buildings, and complete replacement. The replacement option has advantages over refurbishment because it represents the lowest lifecycle cost, least construction risk, least operational disruption, best energy efficiency, improved public access and security, and improves the work environment and efficiency by co-locating staff into one area. Based on these advantages, the study concluded that replacement of non-compliant administrative buildings and offices is the best long-term business decision. These results from the Administrative Facilities Master Plan were presented to the Board of Directors in November 2013. Consensus was obtained that the Sanitation District proceed with the results of this Administrative Facilities Master Plan and create an effective replacement plan to build a new Headquarters Complex. In June 2014, the Board of Director's authorized an Administrative Facilities Implementation Plan to be developed by HDR Architecture, Inc. (HDR)that would develop a more detailed plan and cost estimate for replacement of the Administration Building, Human Resources Building, Laboratory, Purchasing Building, Fleet Services Buildings, and multiple office trailers at Plant No. 1. In June, 2015, the Board of Directors approved the Headquarters Complex, Site and Security, and Entrance Realignment Program, Project No. P1-128. At the time, the project was to consider two alternative locations for the new Administration and Laboratory Building, one where the existing Administration Building is located, the other in the southwest corner of Plant No. 1 next to the Engineering Trailers. The southwest corner was selected as the preferred alternative in October 2015. The project took into consideration the impacts of the I-405 widening project and the relocation of the Plant No. 1 main entry. Since then, the Sanitation District's master planning efforts have identified a long-term need for more process and construction lay down area. The OCTA/CalTrans I-405 widening project is negatively impacting parking and usable space in the northern part of the plant and the City has put forward its Fountain Valley Crossings specific plan that suggests that the Sanitation District consider locating the building instead in the area Page 2 of 6 between Ellis Avenue and the 1-405 Freeway between the Euclid Avenue off-ramp and Ward Street. Locating the new building in this area would save space on the plant site needed for process facilities in the future. Approximately five acres of land would be needed for the Administration and Laboratory Building and a parking structure. In the second half of 2016, staff worked at the Board of Directors' direction to acquire property across Ellis Avenue. As a result, the Sanitation District has reached an agreement to purchase a 2.14 acre property on the north side of Ellis between Bandilier Circle and Pacific Street. The Sanitation District expects to close escrow by the end of February 2017 on this parcel. Although this parcel is less than five acres, the Adminstration Building could be built on this parcel with minimal parking. Without additional property, a separate new Laboratory Building and parking for both the new Laboratory Building and the new Administration Building could then be constructed in the location of the existing Administration Building. RELEVANT STANDARDS • Maintain collaborative and cooperative relationships with neighboring agencies • Provide a safe and collegial workplace PROBLEM The Administration Building, Human Resources Building, Purchasing Building, Laboratory Building, and several temporary trailer complexes have significant code compliance and deferred maintenance issues. Staff are dispersed throughout the plant which is not conducive to effective organization functionality. Over 100 staff are located in approximately 40,000 square feet of aging temporary trailers. Building systems are antiquated and inefficient and do not meet desired level of service. These buildings do not meet the City's Construction Code and Americans with Disabilities Act. The Sanitation District is anticipating a future shortage of space for process facilities if the Administration and Laboratory Buildings are constructed on-site. In addition, several stormwater drainage and perimeter security upgrades must be addressed along Garfield Avenue and Ellis Avenue as a result of the 1-405 widening impacts. PROPOSED SOLUTION N/A TIMING CONCERNS There are a number of timing concerns associated with this project: • Acquiring additional property now would allow the new Administrative Building with an attached Laboratory and a parking structure to be sited on the new property. • As the City's Crossings Plan moves forward, the opportunity to acquire property in this area may diminish. Page 3 of 6 • As the 1-405 Widening project relocates the main entry to Plant No. 1, parking for the Administration Building will be lost. • Security and stormwater drainage deficiencies exist at the south property boundary at Garfield Avenue that are dependent on the new building location. • The Sanitation District is behind on their schedule commitment to City for Americans with Disabilities Act compliance. • Deferred maintenance on these buildings may need to be completed if the project does not move forward in a timely manner. • Cost escalation is significant for the Headquarters Complex project. RAMIFICATIONS OF NOT TAKING ACTION N/A PRIOR COMMITTEE/BOARD ACTIONS November 2016 — Authorized the General Manager and General Counsel to approve escrow documents for the purchase of the Bender Property at 18475 Pacific Street and 18484 Bandilier Circle. October 2016 — Approved a Standard Offer, Agreement, and Escrow Instructions For Purchase Of Real Estate with Bender Properties for the property at 18475 Pacific Street and 18484 Bandilier Circle for $10,619,180, and approved AIR Commercial Real Estate Association Standard Industrial/Commercial Single-Tenant Lease. July 2016 — Approved Broker Representation Agreement with Cushman & Wakefield to give exclusive authority to represent the Orange County Sanitation District, at no cost, for the investigation and potential negotiation to acquire existing office building and/or land for a new Administration Building in an area near Plant No. 1. June 2016 — Approved agreements for the CEQA study and Architectural and Engineering design services. October 2015 — Designated the southwest corner of Plant No. 1 as the location for the Headquarters Complex as the preferred alternative for CEQA evaluation under the Headquarters Complex, Site and Security, and Entrance Realignment Program, Project No. 131-128. June 2015 — Established new project and budget for Headquarters Complex, Site and Security, and Entrance Realignment Program, Project No. P1-128. June 2014 —Approved a Professional Design Services Agreement with HDR to provide engineering design services for Administrative Facilities Implementation Planning, Project No. SP-194. November 2013 — Established a budget for Administrative Facilities Implementation Planning, Project No. SP-194. Page 4 of 6 October 2013—Staff presented an overview of the administrative facilities and their need for rehabilitation or replacement. June 2012 —Approved a Professional Services Agreement with The Austin Company to provide engineering services to prepare an Administrative Facilities Master Plan for the Title 24 Access Compliance and Building Rehabilitation Project, Project No. P1-115, for an amount not to exceed $175,000. May 2012 — Authorized GM to negotiate a Professional Services Agreement for Administrative Facilities Master Plan. Actions Related to the City of Fountain Valley and Building Permits August 2013 - Approved 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. February 2011 — Approved Amendment No. 1 to the Agreement with City of Fountain Valley for Permitting of Interim Improvements of the Orange County Sanitation District, providing for updated completion schedule and project list, in a form approved by General Counsel. April 2010 - Approved an Agreement with the City of Fountain Valley for Permitting Improvements of the Orange County Sanitation District within the City of Fountain Valley, in a form approved by General Counsel. October 2008 — Approved an Agreement with the City of Fountain Valley regarding the issuances of building permits for four buildings constructed without building permits. April 1994 — Final Approval of the Specific Plan with the City of Fountain Valley which defines which buildings and structures on the Sanitation District's property in Fountain Valley would be subject to the City's planning and building laws. ADDITIONAL INFORMATION N/A CEQA CEQAwork was awarded to LSAAssociates, Inc. in June 2016. An Environmental Impact Report is planned to be prepared. Page 5 of 6 FINANCIAL CONSIDERATIONS This item is informational and does not require any commitment of funds. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: N/A WS:dm:gc Page 6 of 6 WOODRUFF,.SPRADLIN&SMART 555 ANTON BOULEVARD, BUITC1200 C.sIA MNsA, CA 92626-7670 (714)556-0000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: February 14, 2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on February 22, 2017 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a parry. The title of the case is Kiean Waters, Inc. v. Orange County Sanitation District, United States District Court, Central District of California, Southern Division, Case No. 8:15-cv-00627. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully submitted, By Bradle . Hogin, Qeneral Counsel 1179357.1 WOODRUFF,.SPRADLIN&SMART 555 ANTON BOULEVARD, BUITC1200 C.sIA MNsA, CA 92626-7670 (714)556-0000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: February 14, 2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on February 22, 2017 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a parry. The title of the case is Kiean Waters, Inc. v. Orange County Sanitation District, United States District Court, Central District of California, Southern Division, Case No. 8:15-cv-01498. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully submitted, By Bradle . Hogin, Qeneral Counsel 1179357.1 WOODRUFF,.SPRADLIN&SMART 555 ANTON BOULEVARD, BUITC1200 C.sIA MNsA, CA 92626-7670 (714)556-0000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: February 14, 2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on February 22, 2017 for the purpose of conferring with its legal counsel regarding existing litigation to which the District is a party. The title of the case is City of Los Angeles, et al. v. County of Kern, Tulare County Superior Court, Case No. 242057. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(1). Respectfully submitted, By Bradle . Hogin, (}eneral Counsel 1179357.1 ► WOODRUFF SPRADUN&SMARF 555 ANTON BOULEVARD, SUITE 1200 COSTA MESA, CA 92626-7670 (714)556-7000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: February 14, 2017 RE: Closed Session Items The Board of Directors will hold a closed session on February 22, 2017 for the purpose of conferring with its negotiators regarding the purchase of real property. The negotiating parties and property are as follows: Bayside Village Marina LLC, 300 East Coast Highway, Newport Beach, CA, APN No. 440-132-60. The District's negotiators are General Manager, Jim Herberg; Assistant General Manager, Bob Ghirelli; Director of Finance, Lorenzo Tyner; Director of Engineering, Rob Thompson; Engineering Managers, Kathy Millea and Jeff Mohr; and CIP Project Manager, Adam Nazaroff. Said closed session will be held pursuant to authority of California Government Code Section 54956.8. Respectfully submitted, By. /J 6- Bradley 6- Bradley R. Hogin, 46eneral Counsel 1206984.1 ► WOODRUFF SPRADUN&SMARF 555 ANTON BOULEVARD, SUITE 1200 COSTA MESA, CA 92626-7670 (714)556-7000 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: February 14, 2017 RE: Closed Session Items The Board of Directors will hold a closed session on February 22, 2017 for the purpose of conferring with its negotiators regarding the purchase of real property. The negotiating parties and properties are as follows: Valley Business Park,APN Nos. 156-165-05, 156-165-06, 156-163- 07; DK-USA LLC,APN No.156-165-04;Fountain Valley Industrial Parcel 13,APN No.156-165- 08; Sukut Real Properties LLC, APN Nos. 156-163-09, 156-163-10, 156-163-11; The Ins Trust Shabtai,Nevon, APN No. 156-163-16; The his Trust, APN No. 156-154-07; K&A Investments LP,APN No. 156-154-08;Fountain Valley Star LLC,APN No. 156-154-06; TN Sheet Metal Inc., APN No. 156-163-12; 18401 Bandilier LLC,APN No. 156-163-13;Phone Lilly Lin-Lin TR,APN No. 156-154-05; JDK Partners, APN No. 156-163-14; Chandler Real Properties, APN No. 156- 163-15; Ellis Avenue LLC, APN No. 156-154-04; and SFII Fountain Valley LLC,APN No. 156- 151-03; 7311 Doig Drive Garden Grove,CA,APN No. 131-654-20. The District's negotiators are Jim Herberg, Rob Thompson,Kathy Millea and Jeff Mohr, Wendy Sevenandt, Kevin Turner and John Gallivan, Cushman and Wakefield. Said closed session will be held pursuant to authority of California Government Code Section 54956.8. Respectfully submitted, By. /J BradleY R. Hogin, Vieneral Counsel 119216i1 ORANGE COUNTY SANITATION DISTRICT Agenda Terminology Glossary Glossary of Terms and Abbreviations AQMD Air Quality Management District ASCE American Society of Civil Engineers BOD Biochemical Oxygen Demand CARB California Air Resources Board CASA California Association of Sanitation Agencies CCTV Closed Circuit Television CEQA California Environmental Quality Act CIP Capital Improvement Program CRWQCB California Regional Water Quality Control Board CWA Clean Water Act CWEA California Water Environment Association EIR Environmental Impact Report EMT Executive Management Team EPA U.S. Environmental Protection Agency FOG Fats, Oils, and Grease gpd Gallons per day GWR System Groundwater Replenishment System (also called GWRS) ICS Incident Command System IERP Integrated Emergency Control Plan LOS Level of Service MGD Million gallons per day NACWA National Association of Clean Water Agencies NPDES National Pollutant Discharge Elimination System NWRI National Water Research Institute O&M Operations and Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District COBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration PCSA Professional Consultant Services Agreement POTW Publicly Owned Treatment Works ppm Parts per million PSA Professional Services Agreement RFP Request For Proposal Glossary of Terms and Abbreviations RWQCB Regional Water Quality Control Board SARFPA Santa Ana River Flood Protection Agency SARI Santa Ana River Inceptor SARWQCB Santa Ana Regional Water Quality Control Board SAWPA Santa Ana Watershed Project Authority SCADA Supervisory Control and Data Acquisition system SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SRF State Revolving Fund SSMP Sanitary Sewer Management Plan SSO Sanitary Sewer Overflow SWRCB State Water Resources Control Board TDS Total Dissolved Solids TMDL Total Maximum Daily Load TSS Total Suspended Solids WDR Waste Discharge Requirements WEF Water Environment Federation WERF Water Environment Research Foundation WIFIA Water Infrastructure Financing and Innovation Act Activated-sludge process — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen, and consume dissolved nutrients in the wastewater. Benthos—The community of organisms, such as sea stars, worms, and shrimp, which live on, in, or near the seabed, also known as the benthic zone. Biochemical Oxygen Demand (BOD) —The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. Blogas — A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used as a fuel. Biosolids — Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farm land or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere used as indicators of sewage pollution. E. coil are the most common bacteria in wastewater. Glossary of Terms and Abbreviations 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 (D/T) — the dilution at which the majority of the people detect the odor becomes the D/T for that air sample. Greenhouse gases — In the order of relative abundance water vapor, carbon dioxide, methane, nitrous oxide, and ozone gases that are considered the cause of global warming ("greenhouse effect'). Groundwater Replenishment (GWR) System — A joint water reclamation project that proactively responds to Southern California's current and future water needs. This joint project between the Orange County Water District and the Orange County Sanitation District provides 70 million gallons a day of drinking quality water to replenish the local groundwater supply. Levels of Service(LOS)—Goals to support environmental and public expectations for performance. NDMA— N-Nitrosodimethylamine is an N-nitrosoamine suspected cancer-causing agent. It has been found in the Groundwater Replenishment System process and is eliminated using hydrogen peroxide with extra ultra-violet treatment. National Biosolids Partnership (NBP) — An alliance of the National Association of Clean Water Agencies (NACWA) and Water Environment Federation (WEF), with advisory support from the U.S. Environmental Protection Agency (EPA). NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation in order to enhance the credibility of local agency biosolids programs and improved communications that lead to public acceptance. Plume—A visible or measurable concentration of discharge from a stationary source or fixed facility. Publicly-owned Treatment Works(POTW)— Municipal wastewater treatment plant. Santa Ana River Interceptor (SARI) Line — A regional brine line designed to convey 30 million gallons per day of non-reclaimable wastewater from the upper Santa Ana River basin to the ocean for disposal, after treatment. Sanitary sewer — Separate sewer systems specifically for the carrying of domestic and industrial wastewater. Combined sewers carry both wastewater and urban run-off. 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. Glossary of Terms and Abbreviations 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.