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HomeMy WebLinkAbout05-24-2017 Board Meeting ONLINE Agenda Packet Orange County Sanitation District Wednesday, May 24, 2017 Regular Meeting of the 6:00 P.M. BOARD OF DIRECTORS Board Room 0 10844 Ellis Avenue Fountain Valley, CA 92708 (714) 593-7433 AGENDA CALL TO ORDER INVOCATION AND PLEDGE OF ALLEGIANCE (Mariellen Yarc, City of Cypress) ROLL CALL (Clerk of the Board) 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 it 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: Kurt Berchtold, Santa Ana Regional Water Quality Control Board, Executive Officer REPORTS: The Board Chairperson 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. ELECTIONS: 1. NOMINATIONS FOR CHAIR AND VICE CHAIR OF BOARD OF DIRECTORS (Clerk of the Board) A. Open nominations for Chair of the Board of Directors (Election to be held at the regular June Board Meeting unless only one candidate is nominated). B. Open nominations for Vice Chair of the Board of Directors (Election to be held at the regular June Board Meeting unless only one candidate is nominated). 05/24/2017 OCSD Board of Directors'Agenda Page 1 of 10 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 Any items withdrawn from the Consent Calendar for separate discussion will be considered in the regular order of business. 2.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 April 26, 2017. 3. GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT NO. 2, PROJECT NO. FE15-06 (Rob Thompson) RECOMMENDATION: A. Receive and file bid tabulation and recommendation; B. Award a construction contract to W.M. Lyles Company for the Gas Compressor Building Piping Replacement at Plant No. 2, Project No. FE15- 06, for a total amount not to exceed $909,700; and C. Approve a contingency of$181,940 (20%). 4. HEADWORKS MODIFICATIONS AT PLANT NO. 2 FOR GWRS FINAL EXPANSION, PROJECT NO. P2-122 (Rob Thompson) RECOMMENDATION: A. Approve a Professional Design Services Agreement with CDM Smith Inc. to provide engineering design services for the Headworks Modifications at Plant No. 2 for GWRS Final Expansion, Project No. P2-122, for an amount not to exceed $5,319,930; and B. Approve a contingency of$531,993 (10%). 5. RECONDITIONING OF BELT FILTER PRESSES (Ed Torres) RECOMMENDATION: A. Authorize a sole source purchase order to Original Equipment Manufacturer (OEM)Alfa Laval /Simon Ashbrook for the reconditioning of five (5) belt filter presses at Plant No. 1 and Plant No. 2, for a total amount not to exceed $693,057; and B. Approve a contingency of$69,306 (10%). 05/24/2017 OCSD BoaM of Directors'Agenda Page 2 of 10 RECEIVE AND FILE: These items require no action; and without objection, will be so ordered by the Board Chair. 6. COMMITTEE MINUTES (Clerk of the Board) RECOMMENDATION: Receive and file the approved minutes of the following committees: A. Legislative and Public Affairs Committee Meeting of March 13, 2017 B. Steering Committee Meeting of March 22, 2017 C. Operations Committee Meeting of April 5, 2017 D. Administration Committee Meeting of April 12, 2017 E. GWRS Steering Committee Special Meeting of January 30, 2017 7. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF APRIL 2017 (Lorenzo Tyner) RECOMMENDATION: Receive and file the report of the Investment Transactions for the month of April 2017. OPERATIONS COMMITTEE: 8. RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT NO. 1, PROJECT NO. P1-129 (Rob Thompson) RECOMMENDATION: A. Approve a Professional Design Services Agreement with AECOM Technical Services, Inc. to provide engineering design services for the Return Activated Sludge Piping Replacement at Activated Sludge Plant No. 1, Project No. P1-129, for an amount not to exceed $523,039; and B. Approve a contingency of$52,304 (10%). 9. OCEAN OUTFALL SYSTEM REHABILITATION, PROJECT NO. J-117 (Rob Thompson) RECOMMENDATION: A. Approve a Professional Construction Services Agreement with Brown and Caldwell to provide construction support services for Interplant Effluent Pipeline Rehabilitation, Contract No. J-117A, for a total amount not to exceed $1,121,666; and B. Approve a contingency of$112,167 (10%). 05/24/2017 OCSD BoaM of Directors'Agenda Page 3 of 10 10. PROJECT MANAGEMENT INFORMATION SYSTEM, PROJECT NO. J-128 (Rob Thompson) RECOMMENDATION: A. Approve a Professional Services Agreement with PMWeb, Inc. for the procurement and implementation of the Project Management Information System, Project No. J-128, Specification No. S-2016-73313D, for an amount not to exceed of$1,022,500; and B. Approve a contingency in the amount of$204,500 (20%). 11. LIGHT DUTY CNG TRUCK COOPERATIVE PROCUREMENT WITH NATIONAL AUTO FLEET GROUP (Ed Torres) RECOMMENDATION: Approve the purchase of nine compressed natural gas light duty trucks using the National Joint Powers Alliance (NJPA) cooperative Contract Number 120716-NAF with National Auto Fleet Group for a total cost of$381,813 in accordance with Ordinance No. OCSD-47, Section 2.03(B), Cooperative Purchases. 12. REGIONAL ODOR AND CORROSION CONTROL SERVICES CONTRACT AMENDMENT 1 AND 2, SPECIFICATION NO. C-2013-565 BD (Ed Torres) RECOMMENDATION: A. Approve Amendment No. 1 to the Contract with Hill Brothers Chemical Company, for Regional Odor and Corrosion Control Services, Specification No. C-2013-565BD (PO 104862-OB), to amend the Application Services cost to a unit price of$25/station/day and Field Services cost to a unit price of$25/station/day, for ferrous chloride; B. Approve Amendment No. 1 to the Contract with Hill Brothers Chemical Company, for Regional Odor and Corrosion Control Services, Specification No. C-2013-565BD (PO 104861-OB), to amend the Application Services cost to a unit price of$75/station/day and Field Services cost to a unit price of$50/station/day, for magnesium hydroxide; and C. Approve Amendment No. 2 to the Contract with USP Technologies, for Regional Odor and Corrosion Control Services, Specification No. C-2013- 565BD (PO 104863-OB), to amend the Application Services cost to a unit price of$80/station/day, for calcium nitrate. 05/24/2017 OCSD BoaM of Directors'Agenda Page 4 of 10 13. INDUCTIVELY COUPLED PLASMA MASS SPECTROMETER AND INDUCTIVELY COUPLED PLASMA OPTICAL EMISSION SPECTROMETER LABORATORY INSTRUMENTS (Jim Colston) RECOMMENDATION: Award a purchase order to Perkin Elmer Health Services, Inc., for an Inductively Coupled Plasma Mass Spectrometer (ICPMS) and an Inductively Coupled Plasma Optical Emission Spectrometer (ICP-OES), Specification No. E-2017-812813, for a total amount not to exceed $275,610.64. 14. INLAND EMPIRE REGIONAL COMPOSTING AUTHORITY CONTRACT AMENDMENT 2016-2017 (Jim Colston) RECOMMENDATION: Approve Contract Amendment number 4600001879-002 with Inland Empire Regional Composting Authority (IERCA)for the Orange County Sanitation District to pay IERCA to receive and compost Orange County Sanitation District's biosolids at a base fee (tipping fee) of $56 per wet ton, plus an administrative fee of $2 per wet ton and any other adjustments provided for in the original agreement. This contract amendment shall serve as the second annual renewal of three one-year renewal options of the original agreement in a total annual amount not to exceed $900,000/year for IERCA to receive and compost up to 50 wet tons per day (Monday thru Friday) of Orange County Sanitation District's biosolids. 15. CAPITAL IMPROVEMENT PROGRAM CONTRACT PERFORMANCE REPORT (Rob Thompson) RECOMMENDATION: Receive and file the Capital Improvement Program Contract Performance Report for the period ending March 31, 2017. 16. ENVIRONMENTAL COMPLIANCE REPORTS (Jim Colston) RECOMMENDATION: Receive and file environmental compliance reports: Biosolids Management Compliance Report 2016, Semi-Annual Pretreatment Program Report Fiscal Year 2016/2017July-December, Annual Greenhouse Gas Emissions Report 2016, Annual Emission Report 2016, and Marine Monitoring Annual Report 2015/2016. 05/24/2017 OCSD Board of Directors'Agenda Page 5 of 10 ADMINISTRATION COMMITTEE: 17. GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST (Lorenzo Tyner) RECOMMENDATION: A. Receive and file Orange County Sanitation District purchases made under the General Manager's authority for the period of January 1, 2017 — March 31, 2017; and B. Approve the following additions to the pre-approved Original Equipment Manufacturer(OEM) Sole Source List: • ALFA-LAVAL— Pumps and Parts • CHEMINEER - Mixers • HARTZELL - Exhaust fans • VERDERFLEX- Pumps and Parts • WOODWARD - Engine and Turbine Systems 18. CONSOLIDATED FINANCIAL REPORT FOR THIRD QUARTER ENDED MARCH 31, 2017 (Lorenzo Tyner) RECOMMENDATION: Receive and file the Orange County Sanitation District Third Quarter Financial Report for the period ended March 31, 2017. 19. WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION PROGRAM (Celia Chandler) RECOMMENDATION: Approve an additional one-year renewal period of the agreement with Keenan and Associates, for Workers' Compensation Third Party Administration Program, for the period of July 1, 2017 through June 30, 2018, fora total amount not to exceed $48,000. 20. 2017-18 OPERATIONAL PROPERTY-LIABILITY INSURANCE RENEWALS (Celia Chandler) RECOMMENDATION: Approve not-to-exceed numbers as follows, with the understanding that the Orange County Sanitation District's insurance broker will continue to negotiate with insurers to seek the lowest possible premiums prior to the expiration date of the current major insurance policies: • Excess liability insurance from $405,126 to $445,639. • Property and Boiler& Machinery combined from $665,813 to $677,628. 05/24/2017 OCSD Board of Directors Agenda Page 6 of 10 • Earthquake insurance—from $76,385 to $78,062. • Excess workers' compensation insurance-a rate of$0.3133 per$100 of payroll not to exceed $208,000. STEERING COMMITTEE: 21. ADOPTION OF UPDATED RESOLUTION ON RULES OF PROCEDURE (Bob Ghirelli) RECOMMENDATION: Adopt Resolution No. OCSD 17-08, entitled, "A Resolution of the Board of Directors of Orange County Sanitation District Fixing and Establishing Rules of Procedure for the Conduct of Business of the District, and Repealing Resolution No. OCSD 15-27. 22. LEGAL SERVICES WITH LEWIS BRISBOIS BISGAARD & SMITH, LLP (Rob Thompson) RECOMMENDATION: Authorize an increase of$150,000 to sole source Purchase Order 105851-OB to Lewis Brisbois Bisgaard & Smith, LLP for legal services for a total cost of$225,000. 23. APPRAISAL SERVICES WITH MASON AND MASON, INC.; AND REAL ESTATE MANAGEMENT CONSULTING SERVICES WITH STADIA REALTY, INC. (Rob Thompson) RECOMMENDATION: A. Authorize an increase of$100,000 to sole source Purchase Order 105903- OB to Mason and Mason, Inc. for appraisal services related to the California Department of Transportation/Orange County Transportation Authority Interstate 405 Improvement Project impacts for a total cost of$140,000; and B. Authorize an increase of$281,800 to sole source Purchase Order 105925- OA to Stadia Realty, Inc. for real estate project management consulting related to the California Department of Transportation/Orange County Transportation Authority Interstate 405 Improvement Project impacts for a total cost of$377,800. NON-CONSENT ITEMS: None. 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. 05/24/2017 OCSD Board of Directors Agenda Page 7 of 10 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 Govemment 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 ANTICIPATED LITIGATION Potential litigation regarding Resolution No. OCSD 17-07 Significant exposure to litigation pursuant to Government Code Section 54956.9(d)(2): 1 case (2) 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. Negotiating parties: Bayside Village Marina LLC Under negotiation: Instruction to negotiator will concern price and terms of payment. (3) 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; 05/24/2017 OCSD BoaM of Directors'Agenda Page 8 of 10 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; Tom Grant; 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; 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: 0512412017 OCSD Board of D1111L.s Agenda Peg.9 d 10 OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: ADJOURNMENT: Adjourn the Board meeting until the Regular Meeting of the Board of Directors on June 28, 2017 at 6:00 p.m. Accommodations for the Disabled: Meeting Rooms are wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at(714) 593-7433 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Agenda Postina: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted outside the main gate of the Sanitation District's Administration Building located at 10844 Ellis Avenue, Fountain Valley, California, 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. Agenda Description: The agenda provides a brief general description of each item of business to be considered or discussed. The recommended action does not indicate what action will be taken. The Board of Directors may take any action which is deemed appropriate. NOTICE TO DIRECTORS: To place items on the agenda for 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 kloreAocsd.com For any questions on the agenda, Committee members may contact staff at: General Manager Jim Herberg (714)593-7300 iherbera[ti),ocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rahirelliaocsd.com Director of Engineering Rob Thompson (714)593-7310 rthompson(a),ocsd.com Director of Environmental Services Jim Colston (714)593-7450 icolstontaocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 INner(Wocsd.com Administrative Services Director of Human Resources Celia Chandler (714)593-7202 cchandler(rpocsd.com Director of Operations 8 Maintenance Ed Torres 714 593-7080 etorres omd.com 05/24/2017 OCSD Board of Directors Agenda Page 10 of 10 BOARD OF DIRECTORS Meeting Date TOBE.Of Dir. os/za/v AGENDA REPORT Item Item Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Kelly A. Lore, Clerk of the Board SUBJECT: NOMINATIONS FOR CHAIR AND VICE CHAIR OF BOARD OF DIRECTORS GENERAL MANAGER'S RECOMMENDATION A. Open nominations for Chair of the Board of Directors (Election to be held at the regular June Board Meeting unless only one candidate is nominated). B. Open nominations for Vice Chair of the Board of Directors (Election to be held at the regular June Board Meeting unless only one candidate is nominated). BACKGROUND As provided in the Board's Rules of Procedures, nominations for the Chair and Vice Chair are made at the regular May meeting, and the election will take place at the June meeting. The following is an excerpt from the current Rules of Procedures relative to the election of the Chair and Vice Chair for the Board of Directors of Orange County Sanitation District: "G. Chairperson and Vice Chairperson of the Board. A Chairperson and Vice Chairperson of the Board shall be elected by a majority vote of Directors at the regular meeting in June of each year, and will assume office July 1st. The nominations for Chairperson and Vice Chairperson shall be made at the regular Board meeting in May of each year. Any person nominated for Chairperson shall be deemed to be nominated for Vice Chairperson in the event the person is not elected as Chairperson. Thereafter, the nominees shall prepare a statement setting forth their qualifications for the office sought. The statements shall be mailed to members of the Board of Directors with the Agenda and other meeting material for the June regular meeting. If only one individual is nominated for Chairperson at the regular Board meeting in May, that individual shall be deemed elected as Chairperson, no election shall be held in June, and the individual shall assume office July 1a'. If only one individual is nominated for Vice Chairperson at the regular Board meeting in May, that individual shall be deemed elected as Vice Chairperson, no election shall be held in June, and the individual shall assume office July 1at. The Chairperson and Vice Chairperson shall serve at the pleasure of a majority of the Directors. In the event the office of Chairperson becomes vacant due to resignation or retirement of the incumbent prior to the expiration of the regular term, the Vice Chairperson shall automatically succeed to the office of the Chairperson and shall Page 1 of 2 continue to serve through the remainder of the regular term unless sooner removed by action of a majority of the Directors. In the event the office of Vice Chairperson becomes vacant prior to the expiration of the regular term, nominations and the election of a Director to serve in that capacity shall be conducted at the next regular Board meeting. The person so elected shall serve the balance of the regularly-scheduled term unless sooner removed as a result of action by a majority of the Directors. The Chairperson shall not serve more than two consecutive one-year terms for which he/she has been elected to the office of Chairperson. The Vice Chairperson shall not serve more than two consecutive one-year terms for which he/she has been elected to the office of Vice Chairperson." RELEVANT STANDARDS Resolution No. OCSD 15-27 Rules of Procedure for the Conduct of Business of the District • Comply with transparency and communication requirements, including the Brown Act ATTACHMENTS The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: N/A Page 2 of 2 ITEM NO. 2 Orange County Sanitation District MINUTES BOARD MEETING April 26, 2017 ANITAT� 9 U N 2 ,y t o � l�NG THE ENV�Q, Administration Building 10844 Ellis Avenue Fountain Valley, California 92708-7018 0 412 612 01 7 Minutes of Board Meeting Page 1 of 11 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was called to order by Board Chair Greg Sebourn on April 26, 2017, at 6:13 p.m., in the Administration Building. Director Glenn Parker delivered the invocation and led the Pledge of Allegiance. The Clerk of the Board declared a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X Gregory Seboum, Chair Jesus Silva Denise Barnes X Lucille Kring X Allan Bernstein Chuck Puckett X Robert Collacott Diana Fascenelli X Ellery Deaton Sandra Massa-Lavitt Barbara Delgleize X Erik Peterson X James M. Ferryman Bob Ooten A Phil Hawkins Brooke Jones X Steven Jones Kris Beard X Peter Kim Gerard Goedhart X Al Krippner Charlie Nguyen X Richard Murphy Warren Kusumoto X Steve Nagel Cheryl Brothers X Glenn Parker Cecilia Hupp X Scott Peotter Brad Avery X Tim Shaw Michael Blazey X David Shawver Carol Warren X Fred Smith Virginia Vaughn X Teresa Smith Mark Murphy X Michelle Steel Shawn Nelson A Sal Tinajero David Benavides X Donald Wagner Lynn Schott X Chad Wanke Ward Smith X John Withers Douglas Reinhart X Mariellen Yarc Stacy Berry STAFF MEMBERS PRESENT: Jim Herberg, General Manager; Bob Ghirelli, Assistant General Manager; Celia Chandler, Director of Human Resources; Ed Torres, Director of Operations and Maintenance; Rob Thompson, Director of Engineering; Lorenzo Tyner, Director of Finance & Administrative Services; Jennifer Cabral; Carla Dillon; Mike Dorman; Dean Fisher, Al Garcia; Tina Knapp; Kathy Millea; Jeff Mohr; Man Nguyen; and Roya Sohanaki. 04/26/2017 Minutes of Board Meeting Page 2 of 11 OTHERS PRESENT: Brad Hogin (General Counsel); Claire Collins Hervey (Special Counsel); Bob Mackey (CSUF); Alternate Director Bob Ooten (CMSD); and Patrick Sheilds (IRWD). PUBLIC COMMENTS: None. Clerk of the Board Kelly Lore provided a Late Communication memo to the Board of Directors regarding Item No.1. SPECIAL PRESENTATIONS: None. REPORTS: Chair Sebourn reported that on April 18 he, Vice-Chair Shawver, and Director Collacott attended a reception in Sacramento hosted by OCSD and the Water District to thank legislative staff and Committee members for their support in the unanimous passage of the GWRS bottled water Bill, AB 2022. There were. approximately 50 guests including Senator Moorlach and Assemblymembers Choi, Bigelow and Harper in attendance. Chair Sebourn announced that AB 1661 Discrimination/Harassment Prevention Training will take place at OCSD for the Directors on May 15 & May 18 from 2:00 p.m. —4:00 p.m. and stated that if you haven't signed up to see the Clerk after the meeting. Chair Seboum congratulated Deputy Clerk of the Board Tina Knapp, who recently earned the designation of Certified Municipal Clerk (CMC). Chair Sebourn announced that nominations for Board Chair and Vice-Chair will take place at the next Board meeting on May 24th. General Counsel Brad Hogin explained the nomination and election process. General Manager Jim Herberg stated that the Director's had each been provided a copy of the recent "Time" magazine in which OCSD and OCWD's partnership in the GWRS is mentioned in an article entitled "What it Will Take to Rebuild America", which highlights agencies, companies and projects that are leading the way with transformative infrastructure projects. Mr. Herberg invited everyone to attend the Honor Walk Ceremony for the induction of three retired/deceased employees to the walk, on May 24th at 4:00 p.m. 04/26/2017 Minutes of Board Meeting Page 3 of 11 CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve the minutes of the Special Board of Directors Meeting held on March 15, 2017 and the Regular Board of Directors Meeting held on March 22, 2017 as corrected. AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Krippner; R. Murphy; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: Kring (Alternate) and Nagel ABSENT: Hawkins and Tinajero 2. SEWER RELOCATION AGREEMENT WITH BIG CANYON COUNTRY CLUB (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Approve a Sewer Relocation Agreement with the Big Canyon Country Club for the relocation of a portion of the Orange County Sanitation District Big Canyon Trunk Sewer within the Big Canyon Country Club Golf Course in the City of Newport Beach. AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: Peotter ABSENT: Hawkins and Tinajero RECEIVE AND FILE: These items require no action;and without objection, will be so ordered by the Board Chair. 3. COMMITTEE MINUTES (Clerk of the Board) Received and filed the approved minutes of the following committees: A. Steering Committee Meeting of February 22, 2017 B. Operations Committee Meeting of March 1, 2017 C. Administration Committee Meeting of March 8, 2017 4. REPORT OF THE INVESTMENT TRANSACTIONS FOR THE MONTH OF MARCH 2O17 (Lorenzo Tyner) Received and filed the report of the Investment Transactions for the month of March 2017. 04/26/2017 Minutes of Board Meeting Page 4 of 11 OPERATIONS COMMITTEE: 5. MENDOZA ODOR CONTROL FACILITY (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Site Access and License Agreement with Costa Mesa Sanitary District (CMSD) to allow mobilization of an odor control chemical dosing station and injection of chemicals into the Baker-Main Interceptor at 2899 Mendoza Drive in the city of Costa Mesa, in a form approved by General Counsel; and B. Approve reimbursement to CMSD for $12,600 per year with annual adjustments not exceeding a 10% increase over the initial year for storage facility lease at Orange Coast College's boat yard beginning July 1, 2017 and annually thereafter. AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins and Tinajero 6. HEADQUARTERS COMPLEX, SITE AND SECURITY, AND ENTRANCE REALIGNMENT PROGRAM, PROJECT NO. P1-128 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Change the preferred alternative from the southwest corner of Plant No. 1 to the area bounded by Ellis Avenue on the south, southbound Ellis off-ramp on the east, 1-405 Freeway on the north, and Ward Street on the west for the location for the Administration Building and Laboratory Building for CEQA evaluation under the Headquarters Complex, Site and Security, and Entrance Realignment Program, Project No. P1-128. AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Steel; Wagner; Wanks; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins and Tinajero 04/26/2017 Minutes of Board Meeting Page 5 of 11 7. CENTRAL GENERATION ENGINE JET CELL IGNITORS AND CHECK VALVES REPLACEMENT (Ed Torres) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a Sole Source Purchase Order to GE Oil & Gas Compression Systems, LLC for the purchase of replacement Jet Cell Igniters and Check Valves for rehabilitating eight Central Generation Engines at Plant Nos. 1 and 2 for a total not to exceed $1,816,495, plus applicable tax and freight; and B. Approve a contingency of$90,825 (5%). AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins and Tinajero 8. UNINTERRUPTIBLE POWER SUPPLY IMPROVEMENTS AT PLANT NO. 1, PROJECT NO. P1-132 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Establish a project for Uninterruptible Power Supply Improvements at Plant No.1, Project No. P1-132, with a budget of$4,800,000. AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw, Shawver; F. Smith; T. Smith; Steel; Wagner; Wanks; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins and Tinajero 9. RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT PLANT NO. 2, PROJECT NO. P2-123 (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Establish a project for Return Activated Sludge Piping Replacement at Plant No. 2, Project No. P2-123, with a budget of$15,000,000. AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw, Shawver; F. Smith; T. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None 04/26/2017 Minutes of Board Meeting Page 6 of 11 ABSTENTIONS: None ABSENT: Hawkins and Tinajero ADMINISTRATION COMMITTEE: 10. FINANCIAL INFORMATION SYSTEM PURCHASE ORDER CONTRACT RENEWAL (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: A. Approve a five-year Purchase Order Contract with Oracle America, Inc. for an annual amount of$92,143,for a total not to exceed amount of$460,715, commencing July 1, 2017 through June 30, 2022; and B. Approve a contingency of$46,072 (10%). AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins and Tinajero 11. PURCHASE OF RADIO COMMUNICATION EQUIPMENT AND SERVICES (Lorenzo Tyner) MOVED, SECONDED, AND DULY CARRIED TO: A. Authorize an additional $400,000 to sole source Purchase Order No. 105821-OB with Motorola Solutions utilizing Orange County Price Book Agreement No. MA060-15011560, for purchases of equipment, services, and repairs,for a total amount not to exceed $480,000 for the period ending May 20, 2020; B. Authorize an immediate purchase of equipment and services for Orange County Sanitation District's Motorola radio systems, for a total amount of $148,613, plus applicable tax and freight; and C. Approve a contingency of$14,861 (10%). AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Steel; Wagner; Wanks; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins and Tinajero 04/26/2017 Minutes of Board Meeting Page 7 of 11 LEGISLATIVE AND PUBLIC AFFAIRS/STEERING COMMITTEE (Joint Meeting): 12. LEGISLATIVE AND PUBLIC AFFAIRS COMMITTEE (Bob Ghirelli) Mr. Herberg stated that a Special Joint Meeting of the two committees had met this evening and evaluated alternatives for the future of the Legislative and Public Affairs Committee and have brought forward the a recommendation for the Board's approval. MOVED. SECONDED, AND DULY CARRIED TO: Continue with monthly Legislative and Public Affairs Committee meetings on the second Monday of each month, with January dark, at a new meeting time of 12 noon. AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins and Tinajero STEERING COMMITTEE: 13. IRVINE RANCH WATER DISTRICT OUT OF AREA SERVICE AGREEMENT FOR LOS ALISOS ADDITION (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Approve an agreement with the Irvine Ranch Water District allowing wastewater flow to enter Orange County Sanitation District's service area from Portola Hills and Baker Ranch, for a period of three years, from date of execution, and to support Irvine Ranch Water District's application to the Local Agency Formation Commission for an Orange County Sanitation District change of service boundaries to permanently service these areas. AYES: Bernstein; Collacott; Deaton; Ferryman; Jones; Kim; Kring (Alternate); Krippner; R. Murphy; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shaw; Shawver; F. Smith; T. Smith; Steel; Wagner; Wanke; Withers; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins and Tinajero Director Withers departed the meeting at 6:47 p.m. 04/26/2017 Minutes of Board Meeting Page 8 of 11 14. CLOSED SESSION ATTENDANCE BY DIRECTORS SERVING ON THE BOARD OF AN ADVERSE PARTY (Jim Herberg) Mr. Herberg introduced this item and General Counsel Brad Hogin discussed the importance of confidential communication between attorney and client including the basic right to hold Closed Session meetings. He stated that tonight one of the closed session items to be heard involves anticipated litigation between two agencies where a few OCSD Board Members also sit on the Board of the adverse party. He explained the disadvantages to the Sanitation District if those certain Board Members were privy to the confidential communications of both parties. Mr. Hogin went on to explain the common-law doctrine of incompatible offices and Government Code Section 1126. He stated this Resolution will set forth policy regarding Board Members who serve simultaneously on multiple agencies and their options for participation in Closed Session attendance. Director Shaw stated that he chose not to participate in the above referenced Closed Session item at Steering Committee earlier this evening. MOVED AND SECONDED TO: Adopt Resolution No. OCSD 17-07, entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District Establishing Requirements for Attendance at Closed Sessions by Directors Who Simultaneously Serve on the Governing Body of an Adverse Party". Discussion ensued regarding: Enforcement mechanisms, alternative solutions, voluntary recusal, and conflict of interest in open session. Directors expressed their approval or opposition. SUBSTITUTE MOTION MOVED AND SECONDED TO: Delay this item for one month. Alternate options and repercussions of delaying the item for one month were discussed. A roll call vote was taken. The substitute motion failed by the following vote: AYES: Jones; R. Murphy; Shaw; Steel; and Wanke NOES: Bernstein; Collacott; Deaton; Ferryman; Kim; Kring (Alternate); Krippner; Nagel; Parker; Peotter, Peterson (Alternate); Sebourn; Shawver; F. Smith; T. Smith; Wagner; and Yarc ABSTENTIONS: None ABSENT: Hawkins; Tinajero and Withers MOVED, SECONDED, AND DULY CARRIED TO: Adopt Resolution No. OCSD 17-07, entitled: "A Resolution of the Board of Directors of the Orange County Sanitation District Establishing Requirements for Attendance at Closed Sessions 04/26/2017 Minutes of Board Meeting Page 9 of 11 by Directors Who Simultaneously Serve on the Governing Body of an Adverse Party". A roll call vote was taken. The Clerk of the Board announced that the following vote adopted the Resolution: AYES: Bernstein; Collacott; Deaton; Ferryman; Kim; Kring (Alternate); Krippner; Nagel; Parker; Peotter; Peterson (Alternate); Seboum; Shawver; F. Smith; T. Smith; and Yarc NOES: Jones; R. Murphy; Shaw; Steel; Wagner; and Wanke ABSTENTIONS: None ABSENT: Hawkins; Tinajero and Withers AB 1234 REPORTS: Director Ferryman announced that at the recent NWRI meeting new General Manager Kevin Hardy established goals and objectives for the future of the organization. Director Ferryman also announced that OCCOG will be filling two SCAG committee vacancies at the April 27, 2017 Board of Directors luncheon meeting and one representative to the Santa Ana Watershed Project Authority will also be filled. He stated the Border Committee meeting was canceled this month. Director Steel departed the meeting at 6:54 p.m. CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54956.9(d)(2). 54956(d)(4), and 54956.8: The Board convened in closed session at 6:55 p.m. to discuss two items. Item No. CS-2 was 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. Director Nagel recused himself and left the meeting during discussion on Item No. CS-3, which was heard first. Directors Jones, R. Murphy, and Shaw departed the meeting at 7:15 p.m. prior to Item No. CS-1 being heard. Alternate Director Kring departed the meeting at 7:57 p.m. RECONVENED IN REGULAR SESSION: The Board reconvened in regular session at 8:16 p.m. 04/26/2017 Minutes of Board Meeting Page 10 of 11 CONSIDERATION OF ACTION, IF ANY, ON MATTERS CONSIDERED IN CLOSED SESSION: (CS-1) Special Counsel Claire Collins Hervey stated that the Board of Directors unanimously approved to authorize legal counsel to initiate legal action to confirm property rights in or adjacent to Plant No. 1 by the following vote: AYES: Bernstein; Collacott; Deaton; Ferryman; Kim; Kdppner; Nagel; Parker; Peotter; Peterson (Alternate); Sebourn; Shawver, F. Smith; T. Smith; Wagner; Wanke; and Yarc NOES: None ABSTENTIONS: None ABSENT: Hawkins; Jones; Kring (Alternate); R. Murphy; Shaw; Steel; Tinajero; and Withers General Counsel Brad Hogin did not provide a report. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: At 8:17 p.m. Chair Sebourn adjourned the meeting until the Regular Meeting of the Board of Directors on May 24, 2017 at 6:00 p.m. Submitted by: Kelly A. Lore Clerk of the Board 04/26/2017 Minutes of Board Meeting Page 11 of 11 BOARD OF DIRECTORS Meeting Date TOBE.Of Dir. os/za/v AGENDA REPORT Item Item 3 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT NO. 2, PROJECT NO. FE15-06 GENERAL MANAGER'S RECOMMENDATION A. Receive and file bid tabulation and recommendation; B. Award a construction contract to W.M. Lyles Company for the Gas Compressor Building Piping Replacement at Plant No. 2, Project No. FE15-06, for a total amount not to exceed $909,700; and C. Approve a contingency of$181,940 (20%). BACKGROUND Sludge produced as part of the wastewater treatment process is digested to reduce the amount of solids requiring hauling and to produce methane gas to generate a significant fraction of the electricity needed for treatment. To convey the gas to the engine generators, three large compressors are utilized at Plant No. 2. The gas piping in the building has experienced corrosion and is at risk to leak methane gas and hydrogen sulfide. Gas Compressor Building Piping Replacement at Plant No. 2, Project No. FE15-06, will replace all suction and discharge piping and associated valves. RELEVANT STANDARDS 24/7/365 treatment plant reliability CA Government Code Section 20783: Award to the "Lowest Responsive and Responsible Bidder' PROBLEM Digester gas piping in the Gas Compressor Building at Plant No. 2 has required a number of expensive and disruptive emergency repairs. Subsequent failures would pose safety concerns and could impact power production. Page 1 of 3 PROPOSED SOLUTION Award a construction contract to W.M. Lyles Company for the Gas Compressor Building Piping Replacement at Plant No. 2, Project No. FE15-06. Due to the risks of working with compressed flammable gases, stainless steel piping, and critical shutdown constraints, staff requests a contingency of 20% in lieu of the 10%typically requested for other projects of this size. TIMING CONCERNS The schedule driver for this project is to replace the piping and valves prior to leaks developing, which could potentially result in additional costly repairs. RAMIFICATIONS OF NOT TAKING ACTION Safety risks associated with digester gas leaks will continue, along with the potential need for expensive and disruptive emergency repairs. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The Orange County Sanitation District (Sanitation District) advertised for bids on February 16, 2017. Eight sealed bids were received on April 18, 2017. The bids were evaluated in accordance with the Sanitation District's policies and procedures. Staff recommends awarding a construction contract to the lowest responsive bidder, W.M. Lyles Company, Inc. for the Gas Compressor Building Piping Replacement at Plant No. 2, Project No. FE15-06. Page 2 of 3 Summary information on the bid opening Gas Compressor Building Piping Replacement at Plant No. 2, Project No. FE15-06, is as follows: Project Budget $3,924,000 Construction Contract Budget $2,100,000 Engineer's Estimate $1,462,000 Bidder Amount of Bid W.M. Lyles Company $ 909,700 PCL Construction, Inc. $ 947,000 ODC Engineering & Technology $1,048,000 Shimmick Construction Company $1,238,638 Kiewit Infrastructure West $1,259,000 J.F. Shea Construction $1,268,600 Tharsos, Inc. $1,426,000 Environmental Construction, Inc. $1,589,342 CEQA Notice of Exemption for Gas Compressor Building Piping Replacement at Plant No. 2, Project No. FE15-06, was filed and recorded with the County of Orange on April 28, 2016. This project is exempt from CEQA pursuant to Section 15301, Existing Facilities-Class 1 consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted under the Facilities Engineering Program - Plant, (Budget FY2016-17 &2017-18, Section 8, Page 85)and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: Construction Contract RB:dm:gc Page 3 of 3 PART A CONTRACT AGREEMENT C-CA-011317 TABLE OF CONTENTS CONTRACT AGREEMENT SECTION - 1 GENERAL CONDITIONS..................................................................1 SECTION -2 MATERIALS AND LABOR.................................................................4 SECTION -3 PROJECT..........................................................................................5 SECTION -4 PLANS AND SPECIFICATONS ........................................................5 SECTION -5 TIME OF COMMENCEMENT AND COMPLETION ..........................5 SECTION -6 TIME IS OF THE ESSENCE .............................................................5 SECTION -7 EXCUSABLE DELAYS......................................................................6 SECTION -8 EXTRA WORK...................................................................................6 SECTION -9 CHANGES IN PROJECT...................................................................7 SECTION - 10 LIQUIDATED DAMAGES FOR DELAY.............................................7 SECTION - 11 CONTRACT PRICE AND METHOD OF PAYMENT.........................8 SECTION - 12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS ............................................................................................10 SECTION - 13 COMPLETION.................................................................................10 SECTION - 14 CONTRACTOR'S EMPLOYEES COMPENSATION.......................10 SECTION - 15 SURETY BONDS ............................................................................13 SECTION - 16 INSURANCE....................................................................................13 SECTION - 17 RISK AND INDEMNIFICATION.......................................................21 SECTION - 18 TERMINATION................................................................................22 SECTION - 19 WARRANTY....................................................................................22 SECTION -20 ASSIGNMENT.................................................................................23 SECTION -21 RESOLUTION OF DISPUTES ........................................................23 SECTION -22 SAFETY& HEALTH ........................................................................23 SECTION -23 NOTICES.........................................................................................24 C-CA-011317 CONTRACT AGREEMENT ORANGE COUNTY SANITATION DISTRICT PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 THIS AGREEMENT is made and entered into, to be effective, this May 24, 2017, by and between W.M. Lyles Co., hereinafter referred to as "CONTRACTOR" and the Orange County Sanitation District, hereinafter referred to as "OCSD". WITNESSETH That for and in consideration of the promises and agreements hereinafter made and exchanged, OCSD and CONTRACTOR agree as follows: SECTION-1 GENERAL CONDITIONS CONTRACTOR certifies and agrees that all the terms, conditions and obligations of the Contract Documents as hereinafter defined, the location of the job site, and the conditions under which the Work is to be performed have been thoroughly reviewed, and enters into this Contract based upon CONTRACTOR's investigation of all such matters and is in no way relying upon any opinions or representations of OCSD. It is agreed that this Contract represents the entire agreement. It is further agreed that the Contract Documents are each incorporated into this Contract by reference, with the same force and effect as if the same were set forth at length herein, and that CONTRACTOR and its Subcontractors, if any, will be and are bound by any and all of said Contract Documents insofar as they relate in any part or in any way, directly or indirectly, to the Work covered by this Contract. C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 1 of 25 A. Contract Documents Order of Precedence "Contract Documents" refers to those documents identified in the definition of"Contract Documents" in the General Conditions—Definitions. 1. In the event of a conflict between one Contract Document and any of the other Contract Documents, the provisions in the document highest in precedence shall be controlling. The order of precedence of the Contract Documents is as follows: a. Supplemental Agreements—the last in time being the first in precedence b. Addenda issued prior to opening of Bids—the last in time being the first in precedence c. Contract Agreement d. Permits and other regulatory requirements e. Special Provisions f. General Conditions (GC) g. Notice Inviting Bids and Instruction to Bidders h. Geotechnical Baseline Report (GBR), if attached as a Contract Document I. Plans and Specifications—in these documents the order of precedence shall be: i. Specifications (Divisions 01-17) ii. Plans H. General Requirements (GR) iv. Standard Drawings and Typical Details j. CONTRACTOR'S Bid 2. In the event of a conflict between terms within an individual Contract Document, the conflict shall be resolved by applying the following principles as appears applicable: a. Figured dimensions on the Contract Documents shall govern. Dimensions not specified shall be as directed by the ENGINEER. Details not shown or C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 2 of 25 specified shall be the same as similar parts that are shown or specified, or as directed. Full-size details shall take precedence over scale Drawings as to shape and details of construction. Specifications shall govern as to material and workmanship. b. The Contract Documents calling for the higher quality material or workmanship shall prevail. Materials or Work described in words, which so applied, have a well known technical or trade meaning shall be deemed to refer to such recognized standards. In the event of any discrepancy between any Drawings and the figures thereon, the figures shall be taken as correct. C. Scale Drawings, full-size details, and Specifications are intended to be fully complementary and to agree. Should any discrepancy between Contract Documents come to the CONTRACTOR's attention, or should an error occur in the efforts of others, which affect the Work, the CONTRACTOR shall notify the ENGINEER, in writing, at once. In the event any doubts or questions arise with respect to the true meaning of the Contract Documents, reference shall be made to the ENGINEER whose written decision shall be final. If the CONTRACTOR proceeds with the Work affected without written instructions from the ENGINEER, the CONTRACTOR shall be fully responsible for any resultant damage or defect. d. Anything mentioned in the Specifications and not indicated in the Plans, or indicated in the Plans and not mentioned in the Specifications, shall be of like effect as if indicated and mentioned in both. In case of discrepancy in the Plans or Specifications, the matter shall be immediately submitted to OCSD's ENGINEER, without whose decision CONTRACTOR shall not adjust said C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 3 of 25 discrepancy save only at CONTRACTOR's own risk and expense. The decision of the ENGINEER shall be final. In all matters relating to the acceptability of material, machinery or plant equipment; classifications of material or Work; the proper execution, progress or sequence of the Work; and quantities interpretation of the Contract Documents, the decision of the ENGINEER shall be final and binding, and shall be a condition precedent to any payment under the Contract, unless otherwise ordered by the Board of Directors. B. Definitions Capitalized terms used in this Contract are defined in the General Conditions, Definitions. Additional terms may be defined in the Special Provisions. SECTION—2 MATERIALS AND LABOR CONTRACTOR shall furnish, under the conditions expressed in the Plans and Specifications, at CONTRACTOR'S own expense, all labor and materials necessary, except such as are mentioned in the Specifications to be furnished by OCSD, to construct and complete the Project, in good workmanlike and substantial order. If CONTRACTOR fails to pay for labor or materials when due, OCSD may settle such claims by making demand upon the Surety to this Contract. In the event of the failure or refusal of the Surety to satisfy said claims, OCSD may settle them directly and deduct the amount of payments from the Contract Price and any amounts due to CONTRACTOR. In the event OCSD receives a stop payment notice from any laborer or material supplier alleging non-payment by CONTRACTOR, OCSD shall be entitled to deduct all of its costs and expenses incurred relating thereto, including but not limited to administrative and legal fees. C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 4 of 25 SECTION-3 PROJECT The Project is described as: PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 SECTION-4 PLANS AND SPECIFICATONS The Work to be done is shown in a set of Plans and Specifications entitled: PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 Said Plans and Specifications and any revision, amendments and addenda thereto are attached hereto and incorporated herein as part of this Contract and referred to by reference. SECTION—5 TIME OF COMMENCEMENT AND COMPLETION CONTRACTOR agrees to commence the Project within 15 calendar days from the date set forth in the "Notice to Proceed"sent by OCSD, unless otherwise specified therein and shall diligently prosecute the Work to completion within 548 calendar days from the date of the "Notice to Proceed" issued by OCSD, excluding delays caused or authorized by OCSD as set forth in Sections 7, 8, and 9 hereof, and applicable provisions in the General Conditions. The time for completion includes Five (5) calendar days determined by OCSD likely to be inclement weather when CONTRACTOR will be unable to work. SECTION—6 TIME IS OF THE ESSENCE Time is of the essence of this Contract. As required by the Contract Documents, CONTRACTOR shall prepare and obtain approval of all shop drawings, details and samples, and do all other things necessary and incidental to the prosecution of CONTRACTOR's Work in conformance with an approved construction progress schedule. CONTRACTOR shall coordinate the Work covered by this Contract with that of all other contractors, subcontractors C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 5 of 25 and of OCSD, in a manner that will facilitate the efficient completion of the entire Work and accomplish the required milestone(s), if any, by the applicable deadline(s) in accordance with Section 5 herein. OCSD shall have the right to assert complete control of the premises on which the Work is to be performed and shall have the right to decide the time or order in which the various portions of the Work shall be installed or the priority of the work of subcontractors, and, in general, all matters representing the timely and orderly conduct of the Work of CONTRACTOR on the premises. SECTION—7 EXCUSABLE DELAYS CONTRACTOR shall only be excused for any delay in the prosecution or completion of the Project as specifically provided in General Conditions, "Extensions for Delay", and the General Requirements, "By CONTRACTOR or Others—Unknown Utilities during Contract Work". Extensions of time and extra compensation arising from such excusable delays will be determined in accordance with the General Conditions, "Extension of Time for Delay" and "Contract Price Adjustments and Payments", and extensions of time and extra compensation as a result of incurring undisclosed utilities will be determined in accordance with General Requirements, "By CONTRACTOR or Others— Unknown Utilities during Contract Work". OCSD's decision will be conclusive on all parties to this Contract. SECTION—8 EXTRA WORK The Contract Price as set forth in Section 11, includes compensation for all Work performed by CONTRACTOR, unless CONTRACTOR obtains a Change Order signed by a designated representative of OCSD specifying the exact nature of the Extra Work and the amount of extra compensation to be paid all as more particularly set forth in Section 9 hereof and the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)", "OWNER Initiated Changes", and "Contract Price Adjustments and Payments". C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 6 of 25 In the event a Change Order is issued by OCSD pursuant to the Contract Documents, OCSD shall extend the time fixed in Section 5 for completion of the Project by the number of days, if any, reasonably required for CONTRACTOR to perform the Extra Work, as determined by OCSD's ENGINEER. The decision of the ENGINEER shall be final. SECTION-9 CHANGES IN PROJECT OCSD may at any time, without notice to any Surety, by Change Order, make any changes in the Work within the general scope of the Contract Document, including but not limited to changes: 1. In the Specifications (including Drawings and designs); 2. In the time, method or manner of performance of the Work; 3. In OCSD-furnished facilities, equipment, materials, services or site; or 4. Directing acceleration in the performance of the Work. No change of period of performance or Contract Price, or any other change in the Contract Documents, shall be binding until the Contract is modified by a fully executed Change Order. All Change Orders shall be issued in accordance with the requirements set forth in the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)" and "OWNER Initiated Changes'. SECTION—10 LIQUIDATED DAMAGES FOR DELAY Liquidated Damages shall be payable in the amounts and upon the occurrence of such events or failure to meet such requirements or deadlines as provided in the Special Provisions, "Liquidated Damages and Incentives." C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 7 of 25 SECTION—11 CONTRACT PRICE AND METHOD OF PAYMENT A. OCSD agrees to pay and the CONTRACTOR agrees to accept as full consideration for the faithful performance of this Contract, subject to any additions or deductions as provided in approved Change Orders, the sum of Nine Hundred Nine Thousand Seven Hundred Dollars ($909,700)as itemized on the Attached Exhibit"A". Upon satisfaction of the conditions precedent to payment set forth in the General Requirements, Additional General Requirements and General Conditions (including but not limited to Sections entitled "Mobilization Payment Requirements" and "Payment Itemized Breakdown of Contract Lump Sum Prices"), there shall be paid to the CONTRACTOR an initial Net Progress Payment for mobilization. OCSD shall issue at the commencement of the job a schedule which shows: 1. A minimum of one payment to be made to the CONTRACTOR for each successive four(4)week period as the Work progresses, and 2. The due dates for the CONTRACTOR to submit requests for payment to meet the payment schedule. After the initial Net Progress Payment, and provided the CONTRACTOR submits the request for payment prior to the end of the day required to meet the payment schedule, the CONTRACTOR shall be paid a Net Progress Payment on the corresponding monthly payment date set forth in the schedule. Payments shall be made on demands drawn in the manner required by law, accompanied by a certificate signed by the ENGINEER, stating that the Work for which payment is demanded has been performed in accordance with the terms of the Contract Documents, and that the amount stated in the certificate is due under the terms of the Contract. Payment applications shall also be accompanied with all documentation, records, and C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 8 of 25 releases as required by the Contract, Exhibit A, Schedule of Prices, and General Conditions, "Payment for Work—General". The Total amount of Progress Payments shall not exceed the actual value of the Work completed as certified by OCSD's ENGINEER. The processing of payments shall not be considered as an acceptance of any part of the Work. B. As used in this Section, the following defined terms shall have the following meanings: 1. "Net Progress Payment" means a sum equal to the Progress Payment less the Retention Amount and other qualified deductions (Liquidated Damages, stop payment notices, etc.). 2. "Progress Payment" means a sum equal to: a. the value of the actual Work completed since the commencement of the Work as determined by OCSD; b. plus the value of material suitably stored at the worksite, treatment plant or approved storage yards subject to or under the control of OCSD since the commencement of the Work as determined by OCSD; C. less all previous Net Progress Payments; d. less all amounts of previously qualified deductions; e. less all amounts previously retained as Retention Amounts. 3. "Retention Amount"for each Progress Payment means the percentage of each Progress Payment to be retained by OCSD to assure satisfactory completion of the Contract. The amount to be retained from each Progress Payment shall be determined as provided in the General Conditions—"Retained Funds; Substitution of Securities." C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 9 of 25 SECTION—12 SUBSTITUTION OF SECURITIES IN LIEU OF RETENTION OF FUNDS Pursuant to Public Contract Code Section 22300 at seq., the CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities." SECTION—13 COMPLETION Final Completion and Final Acceptance shall occur at the time and in the manner specified in the General Conditions, "Final Acceptance and Final Completion", "Final Payment" and Exhibit A- Schedule of Prices. Upon receipt of all documentation, records, and releases as required by the Contract from the CONTRACTOR, OCSD shall proceed with the Final Acceptance as specified in General Conditions. SECTION— 14 CONTRACTOR'S EMPLOYEES COMPENSATION A. Davis-Bacon Act, CONTRACTOR will pay and will require all Subcontractors to pay all employees on said Project a salary or wage at least equal to the prevailing rate of per diem wages as determined by the Secretary of Labor in accordance with the Davis-Bacon Act for each craft or type of worker needed to perform the Contract. The provisions of the Davis-Bacon Act shall apply only if the Contract is in excess of Two Thousand Dollars ($2,000.00) and when twenty-five percent (25%) or more of the Contract is funded by federal assistance. If the aforesaid conditions are met, a copy of the provisions of the Davis-Bacon Act to be complied with are incorporated herein as a part of this Contract and referred to by reference. C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 10 of 25 B. General Prevailing Rate: OCSD has been advised by the State of California Director of Industrial Relations of its determination of the general prevailing rate of per diem wages and the general prevailing rate for legal holiday and overtime Work in the locality in which the Work is to be performed for each craft or type of Work needed to execute this Contract, and copies of the same are on file in the Office of the ENGINEER of OCSD. The CONTRACTOR agrees that not less than said prevailing rates shall be paid to workers employed on this public works Contract as required by Labor Code Section 1774 of the State of California. Per California Labor Code 1773.2, OCSD will have on file copies of the prevailing rate of per diem wages at its principal office and at each job site, which shall be made available to any interested party upon request. C. Forfeiture for Violation: CONTRACTOR shall, as a penalty to OCSD, forfeit Two Hundred Dollars ($200.00)for each calendar day or portion thereof for each worker paid (either by the CONTRACTOR or any Subcontractor under it) less than the prevailing rate of per diem wages as set by the Director of Industrial Relations, in accordance with Sections 1770-1780 of the California Labor Code for the Work provided for in this Contract, all in accordance with Section 1775 of the Labor Code of the State of California. D. Apprentices: Sections 1777.5, 1777.6, 1777.7 of the Labor Code of the State of California, regarding the employment of apprentices are applicable to this Contract and the CONTRACTOR shall comply therewith if the prime contract involves Thirty Thousand Dollars ($30,000.00) or more. C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 11 of 25 E. Workday: In the performance of this Contract, not more than eight(8) hours shall constitute a day's work, and the CONTRACTOR shall not require more than eight (8) hours of labor in a day from any person employed by him hereunder except as provided in paragraph (S) above. CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Section 1810 at seq.)of the Labor Code of the State of California and shall forfeit to OCSD as a penalty, the sum of Twenty-five Dollars ($25.00)for each worker employed in the execution of this Contract by CONTRACTOR or any Subcontractor for each calendar day during which any worker is required or permitted to labor more than eight (8) hours in any one calendar day and forty (40) hours in any one week in violation of said Article. CONTRACTOR shall keep an accurate record showing the name and actual hours worked each calendar day and each calendar week by each worker employed by CONTRACTOR in connection with the Project. F. Registration: Record of Wages: Inspection: CONTRACTOR shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section 1771.4, the Work is subject to compliance monitoring by the California Department of Industrial Relations. CONTRACTOR shall maintain accurate payroll records and shall submit payroll records to the Labor Commissioner pursuant to Labor Code Section 1771.4(a)(3). Penalties for non-compliance with the requirements of Section 1776 may be deducted from progress payments per Section 1776. CONTRACTOR shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulations Section 16461(a). C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 12 of 25 SECTION-15 SURETYBONDS CONTRACTOR shall, before entering upon the performance of this Contract, furnish Bonds approved by OCSD's General Counsel—one in the amount of one hundred percent(100%)of the Contract amount, to guarantee the faithful performance of the Work, and the other in the amount of one hundred percent (100%)of the Contract amount to guarantee payment of all claims for labor and materials furnished. As changes to the Contract occur via approved Change Orders, the CONTRACTOR shall assure that the amounts of the Bonds are adjusted to maintain 100% of the Contract Price. This Contract shall not become effective until such Bonds are supplied to and approved by OCSD. Bonds must be issued by a Surety authorized by the State Insurance Commissioner to do business in California. The Performance Bond shall remain in full force and effect through the warranty period, as specified in Section 19 below. All Bonds required to be submitted relating to this Contract must comply with California Code of Civil Procedure Section 995.630. Each Bond shall be executed in the name of the Surety insurer under penalty of perjury, or the fact of execution of each Bond shall be duly acknowledged before an officer authorized to take and certify acknowledgments, and either one of the following conditions shall be satisfied: A. A copy of the transcript or record of the unrevoked appointment, power of attorney, by- laws, or other instrument, duly certified by the proper authority and attested by the seal of the insurer entitling or authorizing the person who executed the Bond to do so for and on behalf of the insurer, is on file in the Office of the County Clerk of the County of Orange; or B. A copy of a valid power of attorney is attached to the Bond. SECTION— 16 INSURANCE CONTRACTOR shall purchase and maintain, for the duration of the Contract, insurance against claims for injuries to persons, or damages to property which may arise from or in connection C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 13 of 25 with the performance of the Work hereunder, and the results of that Work by CONTRACTOR, its agents, representatives, employees, or Subcontractors, in amounts equal to the requirements set forth below. CONTRACTOR shall not commence Work under this Contract until all insurance required under this Section is obtained in a form acceptable to OCSD, nor shall CONTRACTOR allow any Subcontractor to commence Work on a subcontract until all insurance required of the Subcontractor has been obtained. CONTRACTOR shall maintain all of the foregoing insurance coverages in force through the point at which the Work under this Contract is fully completed and accepted by OCSD pursuant to the provisions of the General Conditions, "Final Acceptance and Final Completion". Furthermore, CONTRACTOR shall maintain all of the foregoing insurance coverages in full force and effect throughout the warranty period, commencing on the date of Final Acceptance. The requirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of OCSD by CONTRACTOR under Section 17 of this Contract. Notwithstanding nor diminishing the obligations of CONTRACTOR with respect to the foregoing, CONTRACTOR shall subscribe for and maintain in full force and effect during the life of this Contract, inclusive of all changes to the Contract Documents made in accordance with the provisions of the General Conditions, "Request for Change (Changes at CONTRACTOR's Request)" and/or"OWNER Initiated Changes", the following insurance in amounts not less than the amounts specified. OCSD reserves the right to amend the required limits of insurance commensurate with the CONTRACTOR's risk at any time during the course of the Project. No vehicles may enter OCSD Premises/worksite without Possessing the required insurance coverage. CONTRACTOR's insurance shall also comply with all insurance requirements prescribed by agencies from whom permits shall be obtained for the Work and any other third parties from whom third party agreements are necessary to perform the Work (collectively, the "Third Parties"), The Special Provisions may list such requirements and sample forms and C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 14 of 25 requirements from such Third Parties may be included in an attachment to the General Requirements. CONTRACTOR bears the responsibility to discover and comply with all requirements of Third Parties, including meeting specific insurance requirements, that are necessary for the complete performance of the Work. To the extent there is a conflict between the Third Parties' insurance requirements and those set forth by OCSD herein, the requirement(s) providing the more protective coverage for both OSCD and the Third Parties shall control and be purchased and maintained by CONTRACTOR. A. Limits of Insurance 1. General Liability: Five Million Dollars ($5,000,000) per occurrence and a general aggregate limit of Five Million Dollars ($5,000,000)for bodily injury, personal injury and property damage. Coverage shall include each of the following: a. Premises-Operations. b. Products and Completed Operations, with limits of at least Five Million Dollars ($5,000,000) per occurrence and a general aggregate limit of Five Million Dollars ($5,000,000)which shall be in effect at all times during the warranty period set forth in the Warranty section herein, and as set forth in the General Conditions, "Warranty(CONTRACTOR's Guarantee)", plus any additional extension or continuation of time to said warranty period that may be required or authorized by said provisions. C. Broad Form Property Damage, expressly including damage arising out of explosion, collapse, or underground damage. d. Contractual Liability, expressly including the indemnity provisions assumed under this Contract. e. Separation of Insured Clause, providing that coverage applies separately to each insured, except with respect to the limits of liability. C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 15 of 25 f. Independent CONTRACTOR's Liability. To the extent first dollar coverage, including defense of any claim, is not available to OCSD or any other additional insured because of any SIR, deductible, or any other form of self insurance, CONTRACTOR is obligated to assume responsibility of insurer until the deductible, SIR or other condition of insurer assuming its defense and/or indemnity has been satisfied. CONTRACTOR shall be responsible to pay any deductible or SIR. g. If a crane will be used, the General Liability insurance will be endorsed to add Riggers Liability coverage or its equivalent to cover the usage of the crane and exposures with regard to the crane operators, riggers and others involved in using the crane. h. If divers will be used, the General Liability insurance will be endorsed to cover marine liability or its equivalent to cover the usage of divers. 2. Automobile Liability: The CONTRACTOR shall maintain a policy of Automobile Liability Insurance on a comprehensive form covering all owned, non-owned, and hired automobiles, trucks, and other vehicles providing the following minimum limits of liability coverage: Either(1)a combined single limit of One Million Dollars ($1,000,000) and a general aggregate limit of One Million Dollars ($1,000,000)for bodily injury, personal injury and property damage; Or alternatively, (2) One Million Dollars ($1,000,000) per person for bodily injury and One Million Dollars ($1,000,000) per accident for property damage. 3. Umbrella Excess Liability: The minimum limits of general liability and automobile liability insurance required, as set forth above, shall be provided for either in a single policy of primary insurance or a combination of policies of primary and umbrella C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 16 of 25 excess coverage. Excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automobile liability. 4. Drone Liability Insurance: If a drone will be used, drone liability insurance must be maintained by CONTRACTOR in the amount of One Million Dollars ($1,000,000) in a form acceptable by OCSD. 5. Worker's Compensation/Emolover's Liability: CONTRACTOR shall provide such Worker's Compensation Insurance as required by the Labor Code of the State of California, including employer's liability with a minimum limit of One Million Dollars ($1,000,000) per accident for bodily injury or disease. If an exposure to Jones Act liability may exist, the insurance required herein shall include coverage with regard to Jones Act claims. Where permitted by law, CONTRACTOR hereby waives all rights of recovery by subrogation because of deductible clauses, inadequacy of limits of any insurance policy, limitations or exclusions of coverage, or any other reason against OCSD, its or their officers, agents, or employees, and any other contractor or subcontractor performing Work or rendering services on behalf of OCSD in connection with the planning, development and construction of the Project. In all its insurance coverages related to the Work, CONTRACTOR shall include clauses providing that each insurer shall waive all of its rights of recovery by subrogation against OCSD, its or their officers, agents, or employees, or any other contractor or subcontractor performing Work or rendering services at the Project. Where permitted by law, CONTRACTOR shall require similar written express waivers and insurance clauses from each of its Subcontractors of every tier. A waiver of subrogation shall be effective as to any C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 17 of 25 individual or entity, even if such individual or entity (a)would otherwise have a duty of indemnification, contractual or otherwise, (b)did not pay the insurance premium, directly or indirectly, and (c)whether or not such individual or entity has an insurable interest in the property damaged. 6. Limits are Minimums: If CONTRACTOR maintains higher limits than the minimums shown in this Section, OCSD requires and shall be entitled to coverage for the higher limits maintained by the CONTRACTOR. B. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by OCSD. At the option of OCSD, either: the Insurer shall reduce or eliminate such deductibles or self- insured retentions as respects OCSD, its Directors, officers, agents, CONSULTANTS, and employees; or CONTRACTOR shall provide a financial guarantee satisfactory to OCSD guaranteeing payment of losses and related investigations, claim administration, and defense expenses. C. Other Insurance Provisions 1. Each such policy of General Liability Insurance and Automobile Liability Insurance shall be endorsed to contain, the following provisions: a. OCSD, its Directors, officers, agents, CONSULTANTS, and employees, and all public agencies from whom permits will be obtained, and their Directors, officers, agents, and employees are hereby declared to be additional insureds under the terms of this policy, but only with respect to the operations of CONTRACTOR at or from any of the sites of OCSD in connection with this Contract, or acts and omissions of the additional insured in connection with its general supervision or inspection of said operations related to this Contract. C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 18 of 25 b. Insurance afforded by the additional insured endorsement shall apply as primary insurance, and other insurance maintained by OCSD shall be excess only and not contributing with insurance provided under this policy. 2. Each insurance policy required herein shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty(30) days prior written notice by certified mail, return receipt requested, and that coverage shall not be cancelled for non-payment of premium except after ten (10)days prior written notice by certified mail, return receipt requested. Should there be changes in coverage or an increase in deductible or SIR amounts, CONTRACTOR undertakes to procure a manuscript endorsement from its insurer giving 30 days prior notice of such an event to OCSD, or to have its insurance broker/agent send to OCSD a certified letter describing the changes in coverage and any increase in deductible or SIR amounts. The certified letter must be sent Attention: Risk Management and shall be received not less than twenty (20)days prior to the effective date of the change(s). The letter must be signed by a Director or Officer of the broker/agent and must be on company letterhead, and may be sent via e-mail in pdf format. 3. Coverage shall not extend to any indemnity coverage for the active negligence of any additional insured in any case where an agreement to indemnify the additional insured would be invalid under California Civil Code Section 2782(b). 4. If required by a public agency from whom permit(s)will be obtained, each policy of General Liability Insurance and Automobile Liability Insurance shall be endorsed to specify by name the public agency and its legislative members, officers, agents, CONSULTANTS, and employees, to be additional insureds. C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 19 of 25 D. Acceptability of Insurers Insurers must have an "A-", or better, Policyholder's Rating, and a Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best Rating Guide. OCSD recognizes that State Compensation Insurance Fund has withdrawn from participation in the A.M. Best Rating Guide process. Nevertheless, OCSD will accept State Compensation Insurance Fund for the required policy of workers compensation insurance, subject to OCSD's option, at any time during the term of this Contract, to require a change in insurer upon twenty (20)days written notice. Further, OCSD will require CONTRACTOR to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within twenty (20)days of written notice to CONTRACTOR by OCSD or its agent. E. Verification of Coverage CONTRACTOR shall furnish OCSD with original certificates and mandatory endorsements affecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by OCSD before Work commences. OCSD reserves the right to require complete, certified copies of all required insurance policies, including endorsements, affecting the coverage required by these Specifications at any time. F. Subcontractors CONTRACTOR shall be responsible to establish insurance requirements for any Subcontractors hired by CONTRACTOR. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subcontractor's operations and work. OCSD and any public agency issuing permits for the Project must be named as "Additional Insured"on any General Liability or Automobile Liability policy obtained by a Subcontractor. The CONTRACTOR must obtain copies and maintain current versions of C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 20 of 25 all Subcontractors' policies, Certificate of Liability and mandatory endorsements effecting coverage. Upon request, CONTRACTOR must furnish OCSD with the above referenced required documents. G. Required Forms and Endorsements 1. Required ACORD Form a. Certificate of Liability Form 25 2. Required Insurance Services Office, Inc. Endorsements (when alternative forms are shown, they are listed in order of preference) In the event any of the following forms are cancelled by Insurance Services Office, Inc. (ISO), or are updated, the ISO replacement form or equivalent must be supplied. a. Commercial General Liability Form CG-0001 10 01 b. Additional Insured Including Form CG-2010 10 01 and Products-Completed Operations Form CG-2037 10 01 C. Waiver of Transfer of Rights of Form CG-2404 11 85; or Recovery Against Others to Us/ Form CG-2404 10 93 Waiver of Subrogation 3. Required State Compensation Insurance Fund Endorsements a. Waiver of Subrogation Endorsement No. 2570 b. Cancellation Notice Endorsement No. 2065 4. Additional Required Endorsements a. Notice of Policy Termination Manuscript Endorsement SECTION—17 RISK AND INDEMNIFICATION All Work covered by this Contract done at the site of construction or in preparing or delivering materials to the site shall be at the risk of CONTRACTOR alone. CONTRACTOR shall save, indemnify, defend, and keep OCSD and others harmless as more specifically set forth in General Conditions, "General Indemnification". C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 21 of 25 SECTION-18 TERMINATION This Contract may be terminated in whole or in part in writing by OCSD in the event of substantial failure by the CONTRACTOR to fulfill its obligations under this Agreement, or it may be terminated by OCSD for its convenience provided that such termination is effectuated in a manner and upon such conditions set forth more particularly in General Conditions, "Termination for Default" and/or"Termination for Convenience", provided that no termination may be effected unless proper notice is provided to CONTRACTOR at the time and in the manner provided in said General Conditions. If termination for default or convenience is effected by OCSD, an equitable adjustment in the price provided for in this Contract shall be made at the time and in the manner provided in the General Conditions, "Termination for Default" and "Termination for Convenience". SECTION-19 WARRANTY The CONTRACTOR agrees to perform all Work under this Contract in accordance with the Contract Documents, including OCSD's designs, Drawings and Specifications. The CONTRACTOR guarantees for a period of at least one (1) year from the date of Final Acceptance of the Work, pursuant to the General Conditions, "Final Acceptance and Final Completion" that the completed Work is free from all defects due to faulty materials, equipment or workmanship and that it shall promptly make whatever adjustments or corrections which may be necessary to cure any defects, including repairs of any damage to other parts of the system resulting from such defects. OCSD shall promptly give notice to the CONTRACTOR of observed defects. In the event that the CONTRACTOR fails to make adjustments, repairs, corrections or other work made necessary by such defects, OCSD may do so and charge the CONTRACTOR the cost incurred. The CONTRACTOR's warranty shall continue as to any corrected deficiency until the later of(1)the remainder of the original one-year warranty period; C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 22 of 25 or(2)one year after acceptance by OCSD of the corrected Work. The Performance Bond and the Payment Bond shall remain in full force and effect through the guarantee period. The CONTRACTOR's obligations under this clause are in addition to the CONTRACTOR's other express or implied assurances under this Contract, including but not limited to specific manufacturer or other extended warranties specified in the Plans and Specifications, or state law and in no way diminish any other rights that OCSD may have against the CONTRACTOR for faulty materials, equipment or Work. SECTION-20 ASSIGNMENT No assignment by the CONTRACTOR of this Contract or any part hereof, or of funds to be received hereunder, will be recognized by OCSD unless such assignment has had prior written approval and consent of OCSD and the Surety. SECTION—21 RESOLUTION OF DISPUTES OCSD and the CONTRACTOR shall comply with the provisions of California Public Contract Code Section 20104 at. seq., regarding resolution of construction claims for any Claims which arise between the CONTRACTOR and OCSD, as well as all applicable dispute and Claims provisions as set forth in the General Conditions and as otherwise required by law. SECTION—22 SAFETY & HEALTH CONTRACTOR shall comply with all applicable safety and health requirements mandated by federal, state, city and/or public agency codes, permits, ordinances, regulations, and laws, as well as these Contract Documents, including but not limited to the General Requirements, Section entitled "Safety" and Exhibit B OCSD Safety Standards. C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 23 of 25 SECTION-23 NOTICES Any notice required or permitted under this Contract may be given by ordinary mail at the address set forth below. Any party whose address changes shall notify the other party in writing. TO OCSD: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708-7018 Attn: Clerk of the Board Copy to: Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, California 92708-7018 Attn: Construction Manager Bradley R. Hogin, Esquire Woodruff, Spradlin &Smart 555 Anton Boulevard Suite 1200 Costa Mesa, California 92626 TO CONTRACTOR: W.M. Lyles Co. 1210 W. Olive Avenue Fresno, CA 93728 Copy to: Robert P. Sateen W.M. Lyles Co. 1210 W. Olive Avenue Fresno, CA 93728 C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 24 of 25 IN WITNESS WHEREOF, the parties hereto have executed this Contract Agreement as the date first hereinabove written. CONTRACTOR: W.M. Lyles Co. 1210 W. Olive Avenue Fresno, CA 93728 By Printed Name Its CONTRACTOR's State License No. 422390 (Expiration Date—05131/2018) OCSD: Orange County Sanitation District By Gregory C. Sebourn, PLS Chair, Board of Directors By Kelly A. Lore Clerk of the Board By Marc Dubois Contracts, Purchasing and Materials Management Manager C-CA-011317 PROJECT NO. FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 25 of 25 EXHIBIT A SCHEDULE OF PRICES C-EXA-080414 TABLE OF CONTENTS EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION.............................................................................1 EXA-2 PROGRESS PAYMENTS ..................................................................................1 EXA-3 RETENTION AND ESCROW ACCOUNTS........................................................1 EXA-4 STOP PAYMENT NOTICE.................................................................................3 EXA-5 PAYMENT TO SUBCONTRACTORS................................................................3 EXA-6 PAYMENT OF TAXES .......................................................................................3 EXA-7 FINAL PAYMENT...............................................................................................4 EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT...5 ATTACHMENT 1 -CERTIFICATION FOR REQUEST FOR PAYMENT.........................7 ATTACHMENT 2-SCHEDULE OF PRICES...................................................................8 C-EXA-080414 EXHIBIT A SCHEDULE OF PRICES EXA-1 BASIS OF COMPENSATION CONTRACTOR will be paid the Contract Price according to the Schedule of Prices, and all other applicable terms and conditions of the Contract Documents. EXA-2 PROGRESSPAYMENTS Progress payments will be made in accordance with all applicable terms and conditions of the Contract Documents, including, but not limited to: 1. Contract Agreement—Section 11 —"Contract Price and Method of Payment;" 2. General Conditions—"Payment—General"; 3. General Conditions—"Payment—Applications for Payment'; 4. General Conditions—"Payment— Mobilization Payment Requirements;" 5. General Conditions—"Payment— Itemized Breakdown of Contract Lump Sum Prices"; 6. General Conditions—"Contract Price Adjustments and Payments"; 7. General Conditions—"Suspension of Payments"; 8. General Conditions—"OCSD's Right to Withhold Certain Amounts and Make Application Thereof"; and 9. General Conditions—"Final Payment." EXA-3 RETENTION AND ESCROW ACCOUNTS A. Retention: OCSD shall retain a percentage of each progress payment to assure satisfactory completion of the Work. The amount to be retained from each progress payment shall be determined as provided in General Conditions— "Retained Funds; Substitution of Securities". In all contracts between CONTRACTOR and its Subcontractors and/or Suppliers, the retention may not exceed the percentage specified in the Contract Documents. C-EXA-080414 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 1 of 8 B. Substitution of Securities: CONTRACTOR may, at its sole expense, substitute securities as provided in General Conditions—"Retained Funds; Substitution of Securities' Payment of Escrow Agent: In lieu of substitution of securities as provided above, the CONTRACTOR may request and OCSD shall make payment of retention earned directly to the escrow agent at the expense of the CONTRACTOR. At the expense of the CONTRACTOR, the CONTRACTOR may direct the investment of the payments into securities consistent with Government Code §16430 and the CONTRACTOR shall receive the interest earned on the investments upon the same terms provided for in this article for securities deposited by the CONTRACTOR. Upon satisfactory completion of the Contract, the CONTRACTOR shall receive from the escrow agent all securities, interest and payments received by the escrow agent from OCSD, pursuant to the terms of this article. The CONTRACTOR shall pay to each Subcontractor, not later than twenty (20)calendar days after receipt of the payment, the respective amount of interest earned, net of costs attributed to retention withheld from each Subcontractor, on the amount of retention withheld to ensure the performance of the Subcontractor. The escrow agreement used by the escrow agent pursuant to this article shall be substantially similar to the form set forth in §22300 of the California Public Contract Code. C. Release of Retention: Upon Final Acceptance of the Work, the CONTRACTOR shall submit an invoice for release of retention in accordance with the terms of the Contract. D. Additional Deductibles: In addition to the retentions described above, OCSD may deduct from each progress payment any or all of the following: 1. Liquidated Damages that have occurred as of the date of the application for progress payment; 2. Deductions from previous progress payments already paid, due to OCSD's discovery of deficiencies in the Work or non-compliance with the Specifications or any other requirement of the Contract; 3. Sums expended by OCSD in performing any of the CONTRACTOR'S obligations under the Contract that the CONTRACTOR has failed to perform, and; 4. Other sums that OCSD is entitled to recover from the CONTRACTOR under the terms of the Contract, including without limitation insurance deductibles and assessments. C-EXA-080414 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 2 of 8 The failure of OCSD to deduct any of the above-identified sums from a progress payment shall not constitute a waiver of OCSD's right to such sums or to deduct them from a later progress payment. EXA-4 STOP PAYMENT NOTICE In addition to other amounts properly withheld under this article or under other provisions of the Contract, OCSD shall retain from progress payments otherwise due the CONTRACTOR an amount equal to one hundred twenty-five percent (125%)of the amount claimed under any stop payment notice under Civil Code§9350 at. seq. or other lien filed against the CONTRACTOR for labor, materials, supplies, equipment, and any other thing of value claimed to have been furnished to and/or incorporated into the Work; or for any other alleged contribution thereto. In addition to the foregoing and in accordance with Civil Code§9358 OCSD may also satisfy its duty to withhold funds for stop payment notices by refusing to release funds held in escrow pursuant to public receipt of a release of stop payment notice executed by a stop payment notice claimant, a stop payment notice release bond, an order of a court of competent jurisdiction, or other evidence satisfactory to OCSD that the CONTRACTOR has resolved such claim by settlement. EXA-5 PAYMENT TO SUBCONTRACTORS Requirements 1. The CONTRACTOR shall pay all Subcontractors for and on account of Work performed by such Subcontractors, not later than seven (7) days after receipt of each progress payment as required by the California Business and Professions Code §7108.5. Such payments to Subcontractors shall be based on the measurements and estimates made pursuant to article progress payments provided herein. 2. Except as specifically provided by law, the CONTRACTOR shall pay all Subcontractors any and all retention due and owing for and on account of Work performed by such Subcontractors not later than seven (7)days after CONTRACTOR'S receipt of said retention proceeds from OCSD as required by the California Public Contract Code§7107. EXA-6 PAYMENT OF TAXES Unless otherwise specifically provided in this Contract, the Contract Price includes full compensation to the CONTRACTOR for all taxes. The CONTRACTOR shall pay all federal, state, and local taxes, and duties applicable to and assessable against any Work, including but not limited to retail sales and use, transportation, export, import, business, and special taxes. The CONTRACTOR shall ascertain and pay the taxes when due. The CONTRACTOR will maintain auditable records, subject to OCSD reviews, confirming that tax payments are current at all times. C-EXA-080414 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 3 of 8 EXA-7 FINAL PAYMENT After Final Acceptance of the Work, as more particularly set forth in the General Conditions, "Final Acceptance and Final Completion", and after Resolution of the Board authorizing final payment and satisfaction of the requirements as more particularly set forth in General Conditions—"Final Payment", a final payment will be made as follows: 1. Prior to Final Acceptance, the CONTRACTOR shall prepare and submit an application for Final Payment to OCSD, including: a. The proposed total amount due the CONTRACTOR, segregated by items on the payment schedule, amendments, Change Orders, and other bases for payment; b. Deductions for prior progress payments; c. Amounts retained; d. A conditional waiver and release on final payment for each Subcontractor(per Civil Code Section 8136); e. A conditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8136); f. List of Claims the CONTRACTOR intends to file at that time or a statement that no Claims will be filed, g. List of pending unsettled claims, stating claimed amounts, and copies of any and all complaints and/or demands for arbitration received by the CONTRACTOR; and h. For each and every claim that resulted in litigation or arbitration which the CONTRACTOR has settled, a conformed copy of the Request for Dismissal with prejudice or other satisfactory evidence the arbitration is resolved. 2. The application for Final Payment shall include complete and legally effective releases or waivers of liens and stop payment notices satisfactory to OCSD, arising out of or filed in connection with the Work. Prior progress payments shall be subject to correction in OCSD's review of the application for Final Payment. Claims filed with the application for Final Payment must be otherwise timely under the Contract and applicable law. 3. Within a reasonable time, OCSD will review the CONTRACTOR'S application for Final Payment. Any recommended changes or corrections will then be forwarded to the CONTRACTOR. Within ten (10) calendar days after receipt of recommended changes from OCSD, the CONTRACTOR will make the changes, or list Claims that will be filed as a result of the changes, and shall submit the revised application for Final Payment. Upon C-EXA-080414 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 4 of 8 acceptance by OCSD, the revised application for Final Payment will become the approved application for Final Payment. 4. If no Claims have been filed with the initial or any revised application for Final Payment, and no Claims remain unsettled within thirty-five (35) calendar days after Final Acceptance of the Work by OCSD, and agreements are reached on all issues regarding the application for Final Payment, OCSD, in exchange for an executed release, satisfactory in form and substance to OCSD, will pay the entire sum found due on the approved application for Final Payment, including the amount, if any, allowed on settled Claims. 5. The release from the CONTRACTOR shall be from any and all Claims arising under the Contract, except for Claims that with the concurrence of OCSD are specifically reserved, and shall release and waive all unreserved Claims against OCSD and its officers, directors, employees and authorized representatives. The release shall be accompanied by a certification by the CONTRACTOR that: a. It has resolved all Subcontractors, Suppliers and other Claims that are related to the settled Claims included in the Final Payment; b. It has no reason to believe that any party has a valid claim against the CONTRACTOR or OCSD which has not been communicated in writing by the CONTRACTOR to OCSD as of the date of the certificate; c. All warranties are in full force and effect, and; d. The releases and the warranties shall survive Final Payment. 6. If any claims remain open, OCSD may make Final Payment subject to resolution of those claims. OCSD may withhold from the Final Payment an amount not to exceed one hundred fifty percent (150%) of the sum of the amounts of the open claims, and one hundred twenty-five percent (125%) of the amounts of open stop payment notices referred to in article entitled stop payment notices herein. 7. The CONTRACTOR shall provide an unconditional waiver and release on final payment from each Subcontractor and Supplier providing Work under the Contract(per Civil Code Section 8138) and an unconditional waiver and release on final payment on behalf of the CONTRACTOR (per Civil Code Section 8138)within thirty (30)days of receipt of Final Payment. EXA-8 DISCOVERY OF DEFICIENCIES BEFORE AND AFTER FINAL PAYMENT Notwithstanding OCSD's acceptance of the application for Final Payment and irrespective of whether it is before or after Final Payment has been made, OCSD shall not be precluded from subsequently showing that: 1. The true and correct amount payable for the Work is different from that previously accepted; C-EXA-080414 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 5 of 8 2. The previously-accepted Work did not in fact conform to the Contract requirements, or; 3. A previous payment or portion thereof for Work was improperly made. OCSD also shall not be stopped from demanding and recovering damages from the CONTRACTOR, as appropriate, under any of the foregoing circumstances as permitted under the Contract or applicable law. C-EXA-080414 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 6 of 8 ATTACHMENT 1 —CERTIFICATION FOR REQUEST FOR PAYMENT I hereby certify under penalty of perjury as follows: That the claim for payment is in all respects true, correct; that the services mentioned herein were actually rendered and/or supplies delivered to OCSD in accordance with the Contract. I understand that it is a violation of both the federal and California False Claims Acts to knowingly present or cause to be presented to OCSD a false claim for payment or approval. A claim includes a demand or request for money. It is also a violation of the False Claims Acts to knowingly make use of a false record or statement to get a false claim paid. The term "knowingly" includes either actual knowledge of the information, deliberate ignorance of the truth or falsity of the information, or reckless disregard for the truth or falsity of the information. Proof of specific intent to defraud is not necessary under the False Claims Acts. I understand that the penalties under the Federal False Claims Act and State of California False Claims Act are non-exclusive, and are in addition to any other remedies which OCSD may have either under contract or law. I hereby further certify, to the best of my knowledge and belief, that: 1. The amounts requested are only for performance in accordance with the Specifications, terms, and conditions of the Contract; 2. Payments to Subcontractors and Suppliers have been made from previous payments received under the Contract, and timely payments will be made from the proceeds of the payment covered by this certification; 3. This request for progress payments does not include any amounts which the prime CONTRACTOR intends to withhold or retain from a Subcontractor or Supplier in accordance with the terms and conditions of the subcontract; and 4. This certification is not to be construed as Final Acceptance of a Subcontractor's performance. Name Title Date C-EXA-080414 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 7 of 8 ATTACHMENT SCHEDULE OF PRICES See next page for Bid Submittal Forms (W.M. Lyles Co.) BF-14 Schedule of Prices, Page 1 - 2 C-EXA-080414 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 CONFORMED Page 8 of 8 Bid Submitted By: W.M.Lyles Co. (Name of Firm) BF-14 SCHEDULE OF PRICES INSTRUCTIONS A. General For Unit Prices, it is understood that the following quantities are approximate only and are solely for the purpose of estimating the comparison of Bids,and that the actual value of Work will be computed based upon the actual quantities in the completed Work,whether they be more or less than those shown. CONTRACTOR'S compensation for the Work under the Contract Documents will be computed based upon the lump sum amount of the Contract at time of award, plus any additional or deleted costs approved by OCSD via approved Change Orders, pursuant to the Contract Documents. Bidder shall separately price and accurately reflect costs associated with each line item, leaving no blanks. Any and all modifications to the Bid must be initialed by an authorized representative of the Bidder in accordance with the Instructions to Bidders, Preparation of Bid. Bidders are reminded of Instruction to Bidders, Discrepancy in Bid Items, which, in summary, provides that the total price for each item shall be based on the Unit Price listed for each item multiplied by the quantity; and the correct Total Price for each item shall be totaled to determine the Total Amount of Bid. All applicable costs including overhead and profit shall be reflected in the respective unit costs and the TOTAL AMOUNT OF BID. The Bid price shall include all costs to complete the Work, including profit, overhead, etc., unless otherwise specified in the Contract Documents. All applicable sales taxes, state and/or federal, and any other special taxes patent rights or royalties shall be included in the Prices quoted in this Bid. B. Basis of Award AWARD OF THE CONTRACT WILL BE MADE ON THE BASIS OF THE LOWEST RESPONSIVE AND RESPONSIBLE BID. THE LOWEST BID IS DEFINED AS THE"TOTAL AMOUNT OF BID' LISTED IN THIS BID, UNLESS OTHERWISE SPECIFIED BELOW. Note 1: Base Bid. Includes all costs necessary to furnish all labor, materials, equipment and services for the construction of the Project per the Contract Documents. BF-14 SCHEDULE OF PRICES C-BF-021115 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 Page 1 of 2 Bid Submitted By: W.M.Lyles Co. (Name of Finn) EXHIBIT A SCHEDULE OF PRICES BASE BID ITEMS(Refer to Note 1 in the Instructions): iNon Description Measurement of Tots[ 1. Mobilization, initial progress payment for all fees, labor, materials and equipment required for mobilization, staging area,and surety bonds, and other acitivities in Lump Sum $ $b,388.o0 conformance with the Contract Documents, for a fixed amount of: 4% 2. Furnish all labor, materials and equipment necessary for the completion of the Contract Work, except for the Lump Sum Work specified for Bid Item 1, in conformance with the Contract Documents, for a lump sum price of... TOTAL AMOUNT OF BID (BASIS OF AWARD) BF-14 SCHEDULE OF PRICES C-BF-021115 PROJECT NO.FE15-06 GAS COMPRESSOR BUILDING PIPING REPLACEMENT AT PLANT 2 Page 2 of 2 BOARD OF DIRECTORS Meeting Dare To ad.of Dir. os/z4/ 7 AGENDA REPORT Item Item 4 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: HEADWORKS MODIFICATIONS AT PLANT NO. 2 FOR GWRS FINAL EXPANSION, PROJECT NO. 132-122 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Design Services Agreement with CDM Smith Inc. to provide engineering design services for the Headworks Modifications at Plant No. 2 for GWRS Final Expansion, Project No. P2-122, for an amount not to exceed $5,319,930; and B. Approve a contingency of$531,993 (10%). BACKGROUND The Orange County Sanitation District (Sanitation District)and the Orange County Water District (OCWD) have partnered to enable the Groundwater Replenishment System (GWRS)to provide a drought-proof water supply for Orange County. The final expansion of GWRS will increase the GWRS's production capacity from 100 million gallons per day (mgd) to 130 mgd. Currently, the Sanitation District provides all the secondary effluent from Plant No. 1 to GWRS. To support the final expansion of the GWRS, all reclaimable flow from Plant No. 2 will need to be pumped to the GWRS system. The Sanitation District and OCWD recently completed the Effluent Reuse Study/GWRS Final Expansion Implementation Plan, Project No. SP-173, that recommended modifying Plant No. 2 to separate reclaimable and non-reclaimable flows. The Final Expansion will include modifications to the Headworks, rerouting of sidestream flows, and relocation of the Plant Water Pump Station. The Plant Water Pump Station is being relocated under Ocean Outfall System Rehabilitation, Project No. J-117. RELEVANT STANDARDS • Use all practical and effective means for recovering wastewater for reuse • Support OCWD expansion of GWRS PROPOSED SOLUTION Modify the Headworks facility by installing new gates to separate flows and replace some of the main sewage pumps with smaller pumps and adding recirculation piping. Reroute Page 1 of 4 sidestream flows to the non-reclaimable portions of the plant. The services of a design consulting firm are required to complete this work. TIMING CONCERNS This project is required to support GWRS Final Expansion. Delaying the Headworks modifications would delay startup of GWRS expansion. RAMIFICATIONS OF NOT TAKING ACTION Not awarding this agreement would prevent project from proceeding, which would impact startup of GWRS expansion. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Consultant Selection: The Sanitation District requested and advertised for proposals for Headworks Modifications at Plant No. 2 for GWRS Final Expansion, Project No. P2-122, on February 21, 2017. The following evaluation criteria were described in the Request for Proposals (RFP) and used to determine the most qualified Consultant. CRITERION WEIGHT Project Understanding and Approach 30% Related Project Experience 30% Project Team and Staff Qualifications 40% Two proposals were received on April 4, 2017. A pre-selected Evaluation Team consisting of the following Sanitation District and OCW D staff reviewed the proposals. Shahrzad Namini CIP Project Manager Dean Fisher Engineering Manager Jeff Mohr Engineering Manager Riaz Moinuddin Engineering Manager Sandy Scott-Roberts OCWD, GWRS Program Manager The Evaluation Team reviewed and ranked each of the proposals in accordance with the evaluation process set forth in the Sanitation District Board of Director's Ordinance No. OCSD-47 (Purchasing Ordinance). Three additional representatives participated in the evaluation process as non-voting members; two from the Contracts Administration Division and one from Engineering. Page 2 of 4 Following scoring by the Evaluation Team, it was deemed that interviews were not necessary to determine the top proposer. Based on the ranking shown below, CDM Smith Inc. was selected as the most qualified consultant. Consultant Evaluator CDM Smith Inc. Kennedy/Jenks Consultants Evaluator 1 1 2 Evaluator 2 1 2 Evaluator 3 1 2 Evaluator 4 1 2 Evaluator 5 1 2 Combined Ranking 1 2 CDM Smith Inc. was selected based on the strength of their team experience and their presentation of a well-thought-out approach. Review of Fee Proposal and Negotiations: Proposals were accompanied by sealed fee proposals. In accordance with the Purchasing Ordinance, the fee proposal of only the highest-ranked firm was opened after approval by the Director of Engineering of the Evaluation Committee's recommendation. Staff conducted negotiations with CDM Smith Inc.to clarify the requirements of the Scope of Work, the assumptions used for the estimated level of effort, and the proposed approach to meet the goals and objectives for the project. A total of eight meetings were held with the top-ranked proposer, CDM Smith Inc., to review in detail each project element, the assumptions regarding the project elements, the requirements of each task in the scope, and the basis for estimating the associated level of effort. Original Fee Proposal Negotiated Fee Total Hours 32,334 27,624 Total Fee 5,984,346 5,319,930 The Consultant's fringe and overhead costs, which factor into the billing rate, have been substantiated. The contract profit is 5%, which is based on an established formula based on the Sanitation District's standard design agreements. Page 3 of 4 Based on the above, staff has determined that the final negotiated fee is fair and reasonable for the level of effort required for this project and recommends award of the Professional Design Services Agreement to CDM Smith Inc. CEQA To comply with the California Environment Quality Act (CEQA), OCWD, as lead agency for the GWRS Final Expansion project, prepared an Initial Study and Addendum No. 6 to OCWD's Final Program EIR/EIS (FEIR) GWRS Final Expansion Project. Addendum No. 6 was considered and reviewed by OCWD's Board of Directors on September 21, 2016. OCWD filed a Notice of Determination on September 22, 2016. For CEQA purposes, the Sanitation District is a responsible agency for the GWRS Final Expansion Project. The Sanitation District's Board of Directors considered Addendum No. 6, along with the FEIR, which included Project No. P2-122, to make certain findings prior to acting on the GWRS Final Expansion Project. Addendum No. 6 was considered and reviewed by the Sanitation District Board of Directors on November 16, 2016. The Sanitation District filed a Notice of Determination on November 21, 2016. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. The budget for this project was approved by the Board in September 2016 and all costs affiliated with this project will be reimbursed by OCWD. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: Professional Design Services Agreement SN:dm:gc Page 4 of 4 PROFESSIONAL DESIGN SERVICES AGREEMENT THIS AGREEMENT, is made and entered into to be effective the 24U day of May, 2017 by and between the ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "SANITATION DISTRICT", and CDM Smith Inc., for purposes of this Agreement hereinafter referred to as "CONSULTANT". WITNESSETH: WHEREAS, the SANITATION DISTRICT desires to engage a CONSULTANT for HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION, PROJECT NO. P2-122, and, WHEREAS, CONSULTANT is qualified to provide the necessary services in connection with these requirements and has agreed to provide the necessary professional services; and, WHEREAS, the SANITATION DISTRICT has adopted procedures for the selection of professional services and has proceeded in accordance with said procedures to select a CONSULTANT to perform this work; and, WHEREAS, at its regular meeting on May 24, 2017 the Board of Directors, by Minute Order, pursuant to the SANITATION DISTRICT Board of Directors' Ordinance No. OCSD-47 approved this Agreement between the SANITATION DISTRICT and CONSULTANT. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this Agreement, it is mutually agreed as follows: 1. SCOPE OF WORK CONSULTANT agrees to furnish necessary professional and technical services to accomplish those project elements outlined in the Scope of Work attached hereto as Attachment"A", and by this reference made a part of this Agreement. A. CONSULTANT shall be responsible for the professional quality, technical accuracy, completeness, and coordination of all design, drawings, specifications, and other services furnished by CONSULTANT under this Agreement, including the work performed by its Subconsultants. Where approval by the SANITATION DISTRICT is indicated, it is understood to be conceptual approval only and does not relieve CONSULTANT of responsibility for complying with all laws, codes, industry standards and liability for damages caused by errors, omissions, noncompliance with industry standards, and/or negligence on the part of CONSULTANT or its Subconsultants. B. CONSULTANT shall be responsible for the work prepared under this Agreement and shall ensure that all work is performed to the prevailing standards of engineering practice for clarity, uniformity, and completeness. CONSULTANT shall respond to all comments, suggestions, and recommendations on the SANITATION DISTRICT's review comment sheets (i.e. DS1, DS2 and DS3). All comments shall be incorporated into the design prior to the next submittal deadline or addressed, in writing, as to why the comment has not been PDSA PROJECT NO. P2-122 Revised 0e231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 1 of 19 incorporated. CONSULTANT shall ensure that each submittal is 100% accurate for the level of work submitted (i.e.; correct references, terms, capitalization or equal status, spelling, punctuation, etc.) C. In the event that work is not performed to the satisfaction of the SANITATION DISTRICT and does not conform to the requirements of this Agreement or any applicable industry standards, CONSULTANT shall, without additional compensation, promptly correct or revise any errors or deficiencies in its designs, drawings, specifications, or other services within the timeframe specified by the Project Engineer/Project Manager. The SANITATION DISTRICT may charge to CONSULTANT all costs, expenses and damages associated with any such corrections or revisions. D. All CAD drawings, figures, and other work shall be produced by CONSULTANT and Subconsultants using the SANITATION DISTRICT CAD Manual. Conversion of CAD work from any other non-standard CAD format to the SANITATION DISTRICT format shall not be acceptable in lieu of this requirement. Electronic files shall conform to the SANITATION DISTRICT specifications. Any changes to these specifications by CONSULTANT are subject to review and approval of the SANITATION DISTRICT. Electronic files shall be subject to an acceptance period of as stated in the Scope of Work during which the SANITATION DISTRICT shall perform appropriate reviews and including CAD Manual compliance. CONSULTANT shall correct any discrepancies or errors detected and reported within the acceptance period at no additional cost to the SANITATION DISTRICT. E. CONSULTANT shall ensure that all plans and specifications prepared, or recommended under this Agreement allow for competitive bidding. CONSULTANT shall design such plans or specifications so that procurement of services, labor or materials are not available from only one source, and shall not design plans and specifications around a single or specific product, piece of major equipment or machinery, a specific patented design or a proprietary process, unless required by principles of sound engineering practice and supported by a written justification that has been approved in writing by the SANITATION DISTRICT. CONSULTANT shall submit this written justification to the SANITATION DISTRICT prior to beginning work on such plans and specifications. Whenever CONSULTANT recommends a specific product or equipment for competitive procurement, such recommendation shall include at least two brand names of products that are capable of meeting the functional requirements applicable to the project. F. All professional services performed by CONSULTANT, including but not limited to all drafts, data, correspondence, proposals, reports, and estimates compiled or composed by CONSULTANT, pursuant to this Agreement, are for the sole use of the SANITATION DISTRICT, its agents and employees. Neither the documents nor their contents shall be released to any third party without the prior written consent of the SANITATION DISTRICT. This provision does not apply to information that(a)was publicly known, or otherwise known to CONSULTANT, at PDSA PROJECT NO. P2-122 Revised 0e231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 2 of 19 the time that it was disclosed to CONSULTANT by the SANITATION DISTRICT, (b) subsequently becomes publicly known to CONSULTANT other than through disclosure by the SANITATION DISTRICT. 2. COMPENSATION Total compensation shall be paid to CONSULTANT for services in accordance with the following provisions: A. Total Compensation Total compensation shall be in an amount not to exceed Five Million Three Hundred Nineteen Thousand Nine Hundred Thirty Dollars ($5,319,930). Total compensation to CONSULTANT including burdened labor(salaries plus benefits), overhead, profit, direct costs, and Subconsultant(s)fees and costs shall not exceed the sum set forth in Attachment"E"- Fee Proposal. B. Labor As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall pay to CONSULTANT a sum equal to the burdened salaries (salaries plus benefits)actually paid by CONSULTANT charged on an hourly-rate basis to this project and paid to the personnel of CONSULTANT. Upon request of the SANITATION DISTRICT, CONSULTANT shall provide the SANITATION DISTRICT with certified payroll records of all employees' work that is charged to this project. C. Overhead As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall compensate CONSULTANT and Subconsultants for overhead at the rate equal to the percentage of burdened labor as specified in Attachment"E"- Fee Proposal. D. Profit Profit for CONSULTANT and Subconsultants shall be a percentage of consulting services fees (Burdened Labor and Overhead). When the consulting or subconsulting services amount is $250,000 or less, the maximum Profit shall be 10%. Between $250,000 and $2,500,000, the maximum Profit shall be limited by a straight declining percentage between 10% and 5%. For consulting or subconsulting services fees with a value greater than $2,500,000, the maximum Profit shall be 5%. Addenda shall be governed by the same maximum Profit percentage after adding consulting services fees. As a portion of the total compensation to be paid to CONSULTANT and Subconsultants, the SANITATION DISTRICT shall pay profit for all services rendered by CONSULTANT and Suboonsultants for this project according to Attachment"E"- Fee Proposal. PDSA PROJECT NO. P2-122 Revised 062316 HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 3 of 19 E. Subconsultants For any Subconsultant whose fees for services are greater than or equal to $100,000 (excluding out-of-pocket costs), CONSULTANT shall pay to Subconsultant total compensation in accordance with the Subconsultant amount specified in Attachment"E"- Fee Proposal. For any Subconsultant whose fees for services are less than $100,000, CONSULTANT may pay to Subconsultant total compensation on an hourly-rate basis per the attached hourly rate Schedule and as specified in the Scope of Work. The SANITATION DISTRICT shall pay to CONSULTANT the actual costs of Subconsultant fees and charges in an amount not to exceed the sum set forth in Attachment"E"- Fee Proposal. F. Direct Costs The SANITATION DISTRICT shall pay to CONSULTANT and Subconsultants the actual costs of permits and associated fees, travel and licenses for an amount not to exceed the sum set forth in Attachment"E"- Fee Proposal. The SANITATION DISTRICT shall also pay to CONSULTANT actual costs for equipment rentals, leases or purchases with prior approval of the SANITATION DISTRICT. Upon request, CONSULTANT shall provide to the SANITATION DISTRICT receipts and other documentary records to support CONSULTANT's request for reimbursement of these amounts, see Attachment"D"-Allowable Direct Costs. All incidental expenses shall be included in overhead pursuant to Section 2 -COMPENSATION above. G. Other Direct Costs Other Direct Costs incurred by CONSULTANT and its Contractor due to modifications in scope of work resulting from field investigations and field work required by Contract. These items may include special equipment, test equipment and tooling and other materials and services not previously identified. Refer to attachment"D" Allowable Direct Costs for payment information. H. Reimbursable Direct Costs The SANITATION DISTRICT will reimburse CONSULTANT for reasonable travel and business expenses as described in this section and further described in Attachment"D"-Allowable Direct Costs to this Agreement. The reimbursement of the above mentioned expenses will be based on an "accountable plan" as considered by Internal Revenue Service (IRS). The plan includes a combination of reimbursements based upon receipts and a "per diem" component approved by IRS. The most recent schedule of the per diem rates utilized by the SANITATION DISTRICT can be found on the U.S. General Service Administration website at htti)://www.gsa.gov/portal/category/104711#. CONSULTANT shall be responsible for the most economical and practical means of management of reimbursable costs inclusive but not limited to travel, lodging and meals arrangements. The SANITATION DISTRICT shall apply the PDSA PROJECT NO. P2-122 Revised 0e231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 4 of 19 most economic and practical method of reimbursement which may include reimbursements based upon receipts and/or"per diem' as deemed the most practical. CONSULTANT shall be responsible for returning to the SANITATION DISTRICT any excess reimbursements after the reimbursement has been paid by the SANITATION DISTRICT. Travel and travel arrangements—Any travel involving airfare, overnight stays or multiple day attendance shall be approved by the SANITATION DISTRICT in advance. Local Travel is considered travel by CONSULTANT within the SANITATION DISTRICT general geographical area which includes Orange, Los Angeles, Ventura, San Bernardino, Riverside, San Diego, Imperial and Kern Counties. Automobile mileage is reimbursable if CONSULTANT is required to utilize personal vehicle for local travel. Lodging—Overnight stays will not be approved by the SANITATION DISTRICT for local travel. However, under certain circumstances overnight stay may be allowed at the discretion of the SANITATION DISTRICT based on reasonableness of meeting schedules and the amount of time required for travel by CONSULTANT. Such determination will be made on a case-by-case basis and at the discretion of the SANITATION DISTRICT. Travel Meals— Per-diem rates as approved by IRS shall be utilized for travel meals reimbursements. Per diem rates shall be applied to meals that are appropriate for travel times. Receipts are not required for the approved meals. Additional details related to the reimbursement of the allowable direct costs are provided in the Attachment"D"-Allowable Direct Costs of this Agreement. I. Limitation of Costs If, at any time, CONSULTANT estimates the cost of performing the services described in CONSULTANT's Proposal will exceed seventy-five percent (75%) of the not-to-exceed amount of the Agreement, including approved additional compensation, CONSULTANT shall notify the SANITATION DISTRICT immediately, and in writing. This written notice shall indicate the additional amount necessary to complete the services. Any cost incurred in excess of the approved not-to-exceed amount, without the express written consent of the SANITATION DISTRICT's authorized representative shall be at CONSULTANT's own risk. This written notice shall be provided separately from, and in addition to any notification requirements contained in CONSULTANT's invoice and monthly progress report. Failure to notify the SANITATION DISTRICT that the services cannot be completed within the authorized not-to-exceed amount is a material breach of this Agreement. PDSA PROJECT NO. P2-122 Revised 0e231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 5 of 19 3. REALLOCATION OF TOTAL COMPENSATION The SANITATION DISTRICT, by its Director of Engineering, shall have the right to approve a reallocation of the incremental amounts constituting the total compensation, provided that the total compensation is not increased. 4. PAYMENT A. Monthly Invoice: CONSULTANT shall include in its monthly invoice, a detailed breakdown of costs associated with the performance of any corrections or revisions of the work for that invoicing period. CONSULTANT shall allocate costs in the same manner as it would for payment requests as described in this Section of the Agreement. CONSULTANT shall warrant and certify the accuracy of these costs and understand that submitted costs are subject to Section 11 -AUDIT PROVISIONS. B. CONSULTANT shall submit monthly or periodic statements requesting payment for those items included in Section 2- COMPENSATION hereof in the format as required by the SANITATION DISTRICT. Such requests shall be based upon the amount and value of the work and services performed by CONSULTANT under this Agreement and shall be prepared by CONSULTANT and accompanied by such supporting data, including a detailed breakdown of all costs incurred and project element work performed during the period covered by the statement, as may be required by the SANITATION DISTRICT. Upon approval of such payment request by the SANITATION DISTRICT, payment shall be made to CONSULTANT as soon as practicable of one hundred percent (100%)of the invoiced amount on a per-project-element basis. If the SANITATION DISTRICT determines that the work under this Agreement or any specified project element hereunder, is incomplete and that the amount of payment is in excess of: i. The amount considered by the SANITATION DISTRICT's Director of Engineering to be adequate for the protection of the SANITATION DISTRICT; or ii. The percentage of the work accomplished for each project element. He/She may, at his/her discretion, retain an amount equal to that which insures that the total amount paid to that date does not exceed the percentage of the completed work for each project element or the project in its entirety. C. CONSULTANT shall submit periodic payment requests for each 30-day period of this Agreement for the profit as set forth in Section 2 -COMPENSATION above. Said profit payment request shall be proportionate to the work actually accomplished to date on a per-project-element basis. In the event the PDSA PROJECT NO. P2-122 Revised 062316 HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 6 of 19 SANITATION DISTRICT's Director of Engineering determines that no satisfactory progress has been made since the prior payment, or in the event of a delay in the work progress for any reason, the SANITATION DISTRICT shall have the right to withhold any scheduled proportionate profit payment. D. Upon satisfactory completion by CONSULTANT of the work called for under the terms of this Agreement, and upon acceptance of such work by the SANITATION DISTRICT, CONSULTANT will be paid the unpaid balance of any money due for such work, including any retained percentages relating to this portion of the work. E. Upon satisfactory completion of the work performed hereunder and prior to final payment under this Agreement for such work, or prior settlement upon termination of this Agreement, and as a condition precedent thereto, CONSULTANT shall execute and deliver to the SANITATION DISTRICT a release of all claims against the SANITATION DISTRICT arising under or by virtue of this Agreement other than such claims, if any, as may be specifically exempted by CONSULTANT from the operation of the release in stated amounts to be set forth therein. F. Pursuant to the California False Claims Act (Government Code Sections 12650- 12655), any CONSULTANT that knowingly submits a false claim to the SANITATION DISTRICT for compensation under the terms of this Agreement may be held liable for treble damages and up to a ten thousand dollars ($10,000) civil penalty for each false claim submitted. This Section shall also be binding on all Subconsultants. G. CONSULTANT or Subconsultant shall be deemed to have submitted a false claim when CONSULTANT or Subconsultant: a) knowingly presents or causes to be presented to an officer or employee of the SANITATION DISTRICT a false claim or request for payment or approval; b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the SANITATION DISTRICT; c)conspires to defraud the SANITATION DISTRICT by getting a false claim allowed or paid by the SANITATION DISTRICT; d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to the SANITATION DISTRICT; or e) is a beneficiary of an inadvertent submission of a false claim to the SANITATION DISTRICT, and fails to disclose the false claim to the SANITATION DISTRICT within a reasonable time after discovery of the false claim. 5. CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS (DIR) REGISTRATION AND RECORD OF WAGES A. To the extent CONSULTANT's employees and/or Subconsultants who will perform Work during the design and preconstruction phases of a construction contract for which Prevailing Wage Determinations have been issued by the DIR and as more specifically defined under Labor Code Section 1720 at seq, CONSULTANT and Subconsultants shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section 1771.4, the Work is subject to compliance monitoring and enforcement by the DIR. PDSA PROJECT NO. P2-122 Revised 0e231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 7 of 19 B. CONSULTANT and Subconsultants shall maintain accurate payroll records and shall comply with all the provisions of Labor Code Section 1776, and shall submit payroll records to the Labor Commissioner pursuant to Labor Code Section 1771.4(a)(3). Penalties for non-compliance with the requirements of Section 1776 may be deducted from progress payments per Section 1776. C. Pursuant to Labor Code Section 1776, CONSULTANT and Subconsultants shall furnish a copy of all certified payroll records to the SANITATION DISTRICT and/or general public upon request, provided the public request is made through the SANITATION DISTRICT, the Division of Apprenticeship Standards or the Division of Labor Enforcement of the Department of Industrial Relations. D. CONSULTANT and Subconsultants shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulation Section 16461(a). 6. DOCUMENT OWNERSHIP—SUBSEQUENT CHANGES TO PLANS AND SPECIFICATIONS A. Ownership of Documents for the Professional Services performed. All documents, including but not limited to, original plans, studies, sketches, drawings, computer printouts and disk files, and specifications prepared in connection with or related to the Scope of Work or Professional Services, shall be the property of the SANITATION DISTRICT. The SANITATION DISTRICT's ownership of these documents includes use of, reproduction or reuse of and all incidental rights, whether or not the work for which they were prepared has been performed. The SANITATION DISTRICT ownership entitlement arises upon payment or any partial payment for work performed and includes ownership of any and all work product completed prior to that payment. This Section shall apply whether CONSULTANT's Professional Services are terminated: a) by the completion of the Agreement, or b) in accordance with other provisions of this Agreement. Notwithstanding any other provision of this paragraph or Agreement, CONSULTANT shall have the right to make copies of all such plans, studies, sketches, drawings, computer printouts and disk files, and specifications. B. CONSULTANT shall not be responsible for damage caused by subsequent changes to or uses of the plans or specifications, where the subsequent changes or uses are not authorized or approved by CONSULTANT, provided that the service rendered by CONSULTANT was not a proximate cause of the damage. 7. INSURANCE A. General i. Insurance shall be issued and underwritten by insurance companies acceptable to the SANITATION DISTRICT. ii. Insurers must have an "A-" Policyholder's Rating, or better, and Financial Rating of at least Class Vill, or better, in accordance with the most current PDSA PROJECT NO. P2-122 Revised 0e231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 8 of 19 A.M. Best's Guide Rating. However, the SANITATION DISTRICT will accept State Compensation Insurance Fund, for the required policy of Worker's Compensation Insurance subject to the SANITATION DISTRICT's option to require a change in insurer in the event the State Fund financial rating is decreased below"B". Further, the SANITATION DISTRICT will require CONSULTANT to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within twenty (20)days of written notice to CONSULTANT, by the SANITATION DISTRICT or its agent. iii. Coverage shall be in effect prior to the commencement of any work under this Agreement. B. General Liability CONSULTANT shall maintain during the life of this Agreement, including the period of warranty, Commercial General Liability Insurance written on an occurrence basis providing the following minimum limits of liability coverage: Two Million Dollars ($2,000,000) per occurrence with Two Million Dollars ($2,000,000) aggregate. Said insurance shall include coverage for the following hazards: Premises- Operations, blanket contractual liability(for this Agreement), products liability/completed operations (including any product manufactured or assembled), broad form property damage, blanket contractual liability, independent contractors liability, personal and advertising injury, mobile equipment, owners and contractors protective liability, and cross liability and severability of interest clauses.A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement(s). If requested by the SANITATION DISTRICT and applicable, XCU coverage (Explosion, Collapse and Underground) and Riggers/On Hook Liability must be included in the General Liability policy and coverage must be reflected on the submitted Certificate of Insurance. C. Umbrella Excess Liability The minimum limits of general liability and Automotive Liability Insurance required, as set forth herein, shall be provided for through either a single policy of primary insurance or a combination of policies of primary and umbrella excess coverage. Umbrella excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automotive liability. D. AutomotiveNehicle liability Insurance CONSULTANT shall maintain a policy of Automotive Liability Insurance on a comprehensive form covering all owned, non-owned, and hired automobiles, trucks, and other vehicles providing the following minimum limits of liability coverage: Combined single limit of Two Million Dollars ($2,000,000) or alternatively, Two Million Dollars ($2,000,000) per person for bodily injury and One Million Dollars ($1,000,000) per accident for property damage. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement. PDSA PROJECT NO. P2-122 Revised 0e231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 9 of 19 E. Worker's Compensation Insurance CONSULTANT shall provide such Workers' Compensation Insurance as required by the Labor Code of the State of California in the amount of the statutory limit, including Employer's Liability Insurance with a minimum limit of One Million Dollars ($1,000,000) per occurrence. Such Worker's Compensation Insurance shall be endorsed to provide for a waiver of subrogation in favor of the SANITATION DISTRICT. A statement on an insurance certificate will not be accepted in lieu of the actual endorsements unless the insurance carrier is State of California Insurance Fund and the identifier'SCIF"and endorsement numbers 2570 and 2065 are referenced on the certificate of insurance. If an exposure to Jones Act liability may exist, the insurance required herein shall include coverage for Jones Act claims. F. Errors and Omissions/Professional Liability CONSULTANT shall maintain in full force and effect, throughout the term of this Agreement, standard industry form professional negligence errors and omissions insurance coverage in an amount of not less Five Million Dollars ($5,000,000) with limits in accordance with the provisions of this Paragraph. If the policy of insurance is written on a "claims made" basis, said policy shall be continued in full force and effect at all times during the term of this Agreement, and for a period of five (5)years from the date of the completion of the services hereunder. In the event of termination of said policy during this period, CONSULTANT shall obtain continuing insurance coverage for the prior acts or omissions of CONSULTANT during the course of performing services under the term of this Agreement. Said coverage shall be evidenced by either a new policy evidencing no gap in coverage or by separate extended "tail'coverage with the present or new carrier. In the event the present policy of insurance is written on an "occurrence" basis, said policy shall be continued in full force and effect during the term of this Agreement or until completion of the services provided for in this Agreement, whichever is later. In the event of termination of said policy during this period, new coverage shall be obtained for the required period to insure for the prior acts of CONSULTANT during the course of performing services under the term of this Agreement. CONSULTANT shall provide to the SANITATION DISTRICT a certificate of insurance in a form acceptable to the SANITATION DISTRICT indicating the deductible or self- retention amounts and the expiration date of said policy, and shall provide renewal certificates not less than ten (10) days prior to the expiration of each policy term. G. Proof of Coverage CONSULTANT shall furnish the SANITATION DISTRICT with original certificates and amendatory endorsements effecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by the SANITATION DISTRICT before work commences. The SANITATION DISTRICT reserves the PDSA PROJECT NO. P2-122 Revised ee231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 10 of 19 right to require complete, certified copies of all required insurance policies, including endorsements, effecting the coverage required, at any time. The following are approved forms that must be submitted as proof of coverage: • Certificate of Insurance ACORD Form 25 (512010)or equivalent. • Additional Insurance (ISO Form) CG2010 11 85 or (General Liability) The combination of(ISO Forms) CG 2010 10 01 and CG 2037 10 01 All other Additional Insured endorsements must be submitted for approval by the SANITATION DISTRICT, and the SANITATION DISTRICT may reject alternatives that provide different or less coverage to the SANITATION DISTRICT. • Additional Insured Submit endorsement provided by carrier for the (Auto Liability) SANITATION DISTRICT approval. • Waiver of Subrogation State Compensation Insurance Fund Endorsement No. 2570 or equivalent. • Cancellation Notice State Compensation Insurance Fund Endorsement No. 2065 or equivalent. H. Cancellation Notice Each insurance policy required herein shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30)days' prior written notice. The Cancellation Section of ACORD Form 25 (512010) shall state the required thirty (30) days' written notification. The policy shall not terminate, nor shall it be cancelled, nor the coverage reduced until thirty(30) days after written notice is given to the SANITATION DISTRICT except for nonpayment of premium, which shall require not less than ten (10) days written notice to the SANITATION DISTRICT. Should there be changes in coverage or an increase in deductible or SIR amounts, CONSULTANT and its insurance broker/agent shall send to the SANITATION DISTRICT a certified letter which includes a description of the changes in coverage and/or any increase in deductible or SIR amounts. The certified letter must be sent to the attention of Risk Management, Div. 260, and shall be received by the SANITATION DISTRICT not less than thirty (30) days prior to the effective date of the change(s) if the change would reduce coverage or increase deductibles or SIR amounts or otherwise reduce or limit the scope of insurance coverage provided to the SANITATION DISTRICT. I. Primary Insurance All liability policies shall contain a Primary and Non-Contributory Clause. Any other insurance maintained by the SANITATION DISTRICT shall be excess and not contributing with the insurance provided by CONSULTANT. PDSA PROJECT NO. P2-122 Revised 662316 HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 11 of 19 J. Separation of Insured All liability policies shall contain a "Separation of Insureds" clause. K. Non-Limiting (if applicable) Nothing in this document shall be construed as limiting in any way, nor shall it limit the indemnification provision contained in this Agreement, or the extent to which CONSULTANT may be held responsible for payment of damages to persons or property. L. Deductibles and Self-Insured Retentions Any deductible and/or self-insured retention must be declared to the SANITATION DISTRICT on the Certificate of Insurance. All deductibles and/or self-insured retentions require approval by the SANITATION DISTRICT. At the option of the SANITATION DISTRICT, either: the insurer shall reduce or eliminate such deductible or self-insured retention as respects the SANITATION DISTRICT; or CONSULTANT shall provide a financial guarantee satisfactory to the SANITATION DISTRICT guaranteeing payment of losses and related investigations, claim administration and defense expenses. M. Defense Costs Liability policies shall have a provision that defense costs for all insureds and additional insureds are paid in addition to and do not deplete any policy limits. N. Subconsultants CONSULTANT shall be responsible to establish insurance requirements for any Subconsultant hired by CONSULTANT. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subconsultant's operations and work. O. Limits Are Minimums If CONSULTANT maintains higher limits than any minimums shown above, then the SANITATION DISTRICT requires and shall be entitled to coverage for the higher limits maintained by CONSULTANT. 8. SCOPE CHANGES In the event of a change in the Scope of Work, requested by the SANITATION DISTRICT, the parties hereto shall execute an amendment to this Agreement setting forth with particularity all terms of the new Agreement, including but not limited to any additional CONSULTANT's fees. PDSA PROJECT NO. P2-122 Revised 0e231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 12 of 19 9. PROJECT TEAM AND SUBCONSULTANTS CONSULTANT shall provide to the SANITATION DISTRICT, prior to execution of this Agreement, the names and full description of all Subconsultants and CONSULTANT's project team members anticipated to be used on this project by CONSULTANT. CONSULTANT shall include a description of the scope of work to be done by each Subconsultant and each CONSULTANT's project team member. CONSULTANT shall include the respective compensation amounts for CONSULTANT and each Subconsultant on a per-project-element basis, broken down as indicated in Section 2 - COMPENSATION. There shall be no substitution of the listed Subconsultants and CONSULTANT's project team members without prior written approval by the SANITATION DISTRICT. 10. ENGINEERING REGISTRATION CONSULTANT's personnel are comprised of registered engineers and a staff of specialists and draftsmen in each department. The firm itself is not a registered engineer but represents and agrees that wherever in the performance of this Agreement requires the services of a registered engineer. Such services hereunder will be performed under the direct supervision of registered engineers. 11. AUDIT PROVISIONS A. The SANITATION DISTRICT retains the reasonable right to access, review, examine, and audit, any and all books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify that CONSULTANT is in compliance with all requirements under this Agreement. CONSULTANT shall include the SANITATION DISTRICT's right as described above, in any and all of their subcontracts, and shall ensure that these rights are binding upon all Subconsultants. B. The SANITATION DISTRICT retains the right to examine CONSULTANT's books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify all direct and indirect costs, of whatever nature, which are claimed to have been incurred, or anticipated to be incurred or to ensure CONSULTANT's compliance with all requirements under this Agreement during the term of this Agreement and for a period of three (3) years after its termination. C. CONSULTANT shall maintain complete and accurate records in accordance with generally accepted industry standard practices and the SANITATION DISTRICT's policy. CONSULTANT shall make available to the SANITATION DISTRICT for review and audit, all project related accounting records and documents, and any other financial data within 15 days after receipt of notice from the SANITATION DISTRICT. Upon the SANITATION DISTRICT's request, CONSULTANT shall submit exact duplicates of originals of all requested records to the SANITATION DISTRICT. If an audit is performed, CONSULTANT shall ensure that a qualified employee of CONSULTANT will be available to assist the SANITATION DISTRICT's auditor in obtaining all project related accounting records and documents, and any other financial data. PDSA PROJECT NO. P2-122 Revised 662316 HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 13 of 19 12. LEGAL RELATIONSHIP BETWEEN PARTIES The legal relationship between the parties hereto is that of an independent contractor and nothing herein shall be deemed to make CONSULTANT an employee of the SANITATION DISTRICT. 13. NOTICES All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of said notices in person or by depositing said notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid. Notices shall be mailed to the SANITATION DISTRICT at: ORANGE COUNTY SANITATION DISTRICT 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Attention: Natasha K. Dubrovski, Principal Contracts Administrator Copy: Shahrzad Namini, Project Manager Notices shall be mailed to CONSULTANT at: CDM Smith Inc. 111 Academy Way, Suite 150 Irvine, CA 92617 Attention: Lanaya Voelz, Principal-in-Charge All communication regarding the Scope of Work, will be addressed to the Project Manager. Direction from other SANITATION DISTRICT staff must be approved in writing by the SANITATION DISTRICT's Project Manager prior to action from CONSULTANT. 14. TERMINATION The SANITATION DISTRICT may terminate this Agreement at any time, without cause, upon giving thirty(30) days written notice to CONSULTANT. In the event of such termination, CONSULTANT shall be entitled to compensation for work performed on a prorated basis through and including the effective date of termination. CONSULTANT shall be permitted to terminate this Agreement upon thirty (30)days written notice only if CONSULTANT is not compensated for billed amounts in accordance with the provisions of this Agreement, when the same are due. Notice of termination shall be mailed to the SANITATION DISTRICT and/or CONSULTANT in accordance with Section 13- NOTICES. 15. DOCUMENTS AND STUDY MATERIALS The documents and study materials for this project shall become the property of the SANITATION DISTRICT upon the termination or completion of the work. CONSULTANT PDSA PROJECT NO. P2-122 Revised ee231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 14 of 19 agrees to furnish to the SANITATION DISTRICT copies of all memoranda, correspondence, computation and study materials in its files pertaining to the work described in this Agreement, which is requested in writing by the SANITATION DISTRICT. 16. COMPLIANCE CONSULTANT certifies by the execution of this Agreement that it pays employees not less than the minimum wage as defined by law, and that it does not discriminate in its employment with regard to race, color, religion, sex or national origin; that it is in compliance with all federal, state and local directives and executive orders regarding non-discrimination in employment; and that it agrees to demonstrate positively and aggressively the principle of equal opportunity in employment. 17. AGREEMENT EXECUTION AUTHORIZATION Both the SANITATION DISTRICT and CONSULTANT do covenant that each individual executing this document by and on behalf of each party is a person duly authorized to execute agreements for that party. 18. DISPUTE RESOLUTION In the event of a dispute arising between the parties regarding performance or interpretation of this Agreement, the dispute shall be resolved by binding arbitration under the auspices of the Judicial Arbitration and Mediation Service ("JAMS"), or similar organization or entity conducting alternate dispute resolution services. 19. ATTORNEY'S FEES, COSTS AND NECESSARY DISBURSEMENTS If any action at law or in equity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which it may be entitled. 20. PROGRESS REPORTS Monthly progress reports shall be submitted for review by the tenth day of the following month and must include as a minimum: 1) current activities, 2)future activities, 3) potential items that are not included in the Scope of Work, 4) concerns and possible delays, 5) percentage of completion, and 6) budget status. 21. WARRANTY CONSULTANT shall perform its services in accordance with generally accepted industry and professional standards. If, within the 12-month period following completion of its services, the SANITATION DISTRICT informs CONSULTANT that any part of the services fails to meet those standards, CONSULTANT shall, within the time prescribed by the SANITATION DISTRICT, take all such actions as are necessary to correct or complete the noted deficiency(ies). PDSA PROJECT NO. P2-122 Revised ee231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 15 of 19 22. INDEMNIFICATION To the fullest extent permitted by law, CONSULTANT shall indemnify, defend (at CONSULTANT's sole cost and expense and with legal counsel approved by the SANITATION DISTRICT, which approval shall not be unreasonably withheld), protect and hold harmless the SANITATION DISTRICT and all of the SANITATION DISTRICT's officers, directors, employees, CONSULTANT's, and agents (collectively the "Indemnified Parties"), from and against any and all claims, damages, liabilities, causes of action, suits, arbitration awards, losses,judgments, fines, penalties, costs and expenses (including, without limitation, attorneys' fees, disbursements and court costs, and all other professional, expert or CONSULTANT's fees and costs and the SANITATION DISTRICT's general and administrative expenses; individually, a "Claim"; collectively, "Claims")which may arise from or are in any manner related, directly or indirectly, to any work performed, or any operations, activities, or services provided by CONSULTANT in carrying out its obligations under this Agreement to the extent of the negligent, recklessness and/or willful misconduct of CONSULTANT, its principals, officers, agents, employees, CONSULTANT's suppliers, CONSULTANT, Subconsultants, subcontractors, and/or anyone employed directly or indirectly by any of them, regardless of any contributing negligence or strict liability of an Indemnified Party. Notwithstanding the foregoing, nothing herein shall be construed to require CONSULTANT to indemnify the Indemnified Parties from any Claim arising solely from: (A)the active negligence or willful misconduct of the Indemnified Parties; or (B)a natural disaster or other act of God, such as an earthquake; or (C)the independent action of a third party who is neither one of the Indemnified Parties nor CONSULTANT, nor its principal, officer, agent, employee, nor CONSULTANT's supplier, CONSULTANT, Subconsultant, subcontractor, nor anyone employed directly or indirectly by any of them. Exceptions (A)through (B) above shall not apply, and CONSULTANT shall, to the fullest extent permitted by law, indemnify the Indemnified Parties, from Claims arising from more than one cause if any such cause taken alone would otherwise result in the obligation to indemnify hereunder. CONSULTANT's liability for indemnification hereunder is in addition to any liability CONSULTANT may have to the SANITATION DISTRICT for a breach by CONSULTANT of any of the provisions of this Agreement. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit CONSULTANT's indemnification obligation or other liability hereunder. The terms of this Agreement are contractual and the result of negotiation between the parties hereto. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. 23. DUTY TO DEFEND The duty to defend hereunder is wholly independent of and separate from the duty to indemnify and such duty to defend shall exist regardless of any ultimate liability of PDSA PROJECT NO. P2-122 Revised 062316 HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 16 of 19 CONSULTANT and shall be consistent with Civil Code Section 2782.8. Such defense obligation shall arise immediately upon presentation of a Claim by any person if, without regard to the merit of the Claim, such Claim could potentially result in an obligation to indemnify one or more Indemnified Parties, and upon written notice of such Claim being provided to CONSULTANT. Payment to CONSULTANT by any Indemnified Party or the payment or advance of defense costs by any Indemnified Party shall not be a condition precedent to enforcing such Indemnified Party's rights to indemnification hereunder. In the event a final judgment, arbitration, award, order, settlement, or other final resolution expressly determines that the claim did not arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, to any extent, then the DISTRICT will reimburse CONSULTANT for the reasonable costs of defending the Indemnified Parties against such claims. CONSULTANT's indemnification obligation hereunder shall survive the expiration or earlier termination of this Agreement until such time as action against the Indemnified Parties for such matter indemnified hereunder is fully and finally barred by the applicable statute of limitations. 24. CONSULTANT PERFORMANCE CONSULTANT's performance shall be evaluated by the SANITATION DISTRICT. A copy of the evaluation shall be sent to CONSULTANT for comment. The evaluation, together with the comments, shall be retained by the SANITATION DISTRICT and may be considered in future CONSULTANT selection processes. 25. COMPLIANCE WITH OCSD POLICIES AND PROCEDURES CONSULTANT shall be required to comply with all OCSD policies and procedures including the OCSD Safety Standards, as applicable, all of which may be amended from time to time. 26. CLOSEOUT When the SANITATION DISTRICT determines that all Work authorized under the Agreement is fully complete and that the SANITATION DISTRICT requires no further work from CONSULTANT, or the Agreement is otherwise terminated or expires in accordance with the terms of the Agreement, the SANITATION DISTRICT shall give CONSULTANT written notice that the Agreement will be closed out. CONSULTANT shall submit all outstanding billings, work submittals, deliverables, reports or similarly related documents as required under the Agreement within thirty(30) days of receipt of notice of Agreement closeout. Upon receipt of CONSULTANT's submittals, the SANITATION DISTRICT shall commence a closeout audit of the Agreement and will either: i. Give CONSULTANT a final Agreement Acceptance: or ii. Advise CONSULTANT in writing of any outstanding item or items which must be furnished, completed, or corrected at CONSULTANT's cost. PDSA PROJECT NO. P2-122 Revised ee231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 17 of 19 CONSULTANT shall be required to provide adequate resources to fully support any administrative closeout efforts identified in this Agreement. Such support must be provided within the timeframe requested by the SANITATION DISTRICT. Notwithstanding the final Agreement Acceptance CONSULTANT will not be relieved of its obligations hereunder, nor will CONSULTANT be relieved of its obligations to complete any portions of the work, the non-completion of which were not disclosed to the SANITATION DISTRICT (regardless of whether such nondisclosures were fraudulent, negligent, or otherwise); and CONSULTANT shall remain obligated under all those provisions of the Agreement which expressly or by their nature extend beyond and survive final Agreement Acceptance. Any failure by the SANITATION DISTRICT to reject the work or to reject CONSULTANT's request for final Agreement Acceptance as set forth above shall not be deemed to be acceptance of the work by the SANITATION DISTRICT for any purpose nor imply acceptance of, or agreement with, CONSULTANT's request for final Agreement Acceptance. 27. ENTIRE AGREEMENT This Agreement constitutes the entire understanding and agreement between the Parties and supersedes all previous negotiations between them pertaining to the subject matter thereof. PDSA PROJECT NO. P2-122 Revised 0e231e HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 18 of 19 IN WITNESS WHEREOF, this Agreement has been executed in the name of the SANITATION DISTRICT, by its officers thereunto duly authorized, and CONSULTANT as of the day and year first above written. CONSULTANT: CDM Smith Inc. By Date Printed Name &Title ORANGE COUNTY SANITATION DISTRICT By Chair, Board of Directors Date By Kelly Lore Clerk of the Board Date By Marc Dubois Date Contracts, Purchasing and Materials Management Division Manager Attachments: Attachment"A'—Scope of Work Attachment"B"—Labor Hour Matrix Attachment"C"—NOT USED Attachment"D"—Allowable Direct Costs Attachment"E"—Fee Proposal Attachment"F"— NOT USED Attachment"G"— NOT USED Attachment"H"— NOT USED Attachment"I"—Cost Matrix and Summary Attachment"J"— NOT USED Attachment"K"—Hourly Rate Schedule for Minor Subconsultant Attachment"L"—OCSD Safety Standards NKD:MH:ms PDSA PROJECT NO. P2-122 Revised 062316 HEADWORKS MODIFICATIONS AT PLANT 2 FOR GWRS FINAL EXPANSION Page 19 of 19 BOARD OF DIRECTORS Meeting Date TOBE.Of Dir. os/za/v AGENDA REPORT ItemNumber IemNumber s Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations and Maintenance SUBJECT: RECONDITIONING OF BELT FILTER PRESSES GENERAL MANAGER'S RECOMMENDATION A. Authorize a sole source purchase order to Original Equipment Manufacturer (OEM) Alfa Laval / Simon Ashbrook for the reconditioning of five (5) belt filter presses at Plant No. 1 and Plant No. 2, for a total amount not to exceed $693,057; and B. Approve a contingency of$69,306 (10%). BACKGROUND Belt filter presses are used at both treatment plants to thicken solids coming from the digesters at 2% solids to between 18% and 21% solids before being transported to offsite reuse locations. Plant No. 1 Operations requires seven of the existing eight belt filter presses to be operational to meet the solids loading demand from our digesters; and Plant No. 2 Operations requires 10 of the existing 14 belt filter presses. Recently, the belt filter presses have shown major reliability issues which require the reconditioning of the equipment to bring it back on line to support the operational needs of the process. RELEVANT STANDARDS • Efficiency efforts reduce the cost to provide the current service level or standard • Data-driven asset intervention - Type, life data, inspections, costs, industry standards • Safe beneficial reuse of Biosolids PROBLEM Several of the belt filter presses are experiencing multiple failures and are in need of rehabilitation. PROPOSED SOLUTION The proposed rehabilitation will increase the reliability and performance of belt filter presses and ensure that they stay functional until the new centrifuges being constructed at both treatment plants come online. Page 1 of 2 TIMING CONCERNS These five belt filter presses are becoming increasingly unreliable and therefore timely rehabilitation is prudent. RAMIFICATIONS OF NOT TAKING ACTION Not having the minimum number of belt filter presses in service will impact Operation's ability to meet permit and contract obligations, as well as increasing transporation costs of biosolids. PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Board approved Sole Source OEM Vendor, Minute Order No. 12. ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATION This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted in the proposed Operating Budget FY 17-18 (Line items: Repairs and Maintenance). Date of Approval Contract Amount Contingency 05/24/17 $693,057 $69,306 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: N/A Page 2 of 2 ITEM NO. 6 MINUTES OF THE LEGISLATIVE AND PUBLIC AFFAIRS COMMITTEE Orange County Sanitation District Monday, March 13, 2017 at 8:00 a.m. A meeting of the Legislative and Public Affairs Committee was called to order by Chair Sebourn on Monday, March 13, 2017 at 8:00 a.m. in the Administration Building of the Orange County Sanitation District. Director Bernstein 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 David Shaviver, Board Vice-Chair Bob Ghirelli, Assistant General Manager Allan Bernstein, Director Celia Chandler, Director of Human Peter Kim, Director Resources Donald P. Wagner, Director Jim Colston, Director of Environmental John Withers, Director Services Rob Thompson, Director of Engineering COMMITTEE MEMBERS ABSENT: Mike White, Controller Chad Wanke, Director Tina Knapp, Deputy Clerk of the Board Jennifer Cabral Rebecca Long 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 (via teleconference) PUBLIC COMMENTS: None. 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. General Manager Jim Herberg reported that the Association of California Cities-Orange County (ACC-OC) continues work on developing a leadership symposium for elected 0311MO17 Legislative and Public Affairs Committee Minutes Page 1 of 4 officials that would begin with a leadership assessment and provide training on topics such as homelessness, transportation infrastructure, changing workforce demographics, among other topics. Chair Sebourn reported that an agenda item will be presented to the Steering Committee for consideration of changing the frequency of meetings of the Legislative and Public Affairs (LaPA) Committee. Chair Sebourn expressed an interest in having the public affairs update and legislative update(both currently monthly information items to the LaPA Committee) moved to information items for the Steering Committee and holding LaPA meetings quarterly. Vice-Chair Shawver expressed an interest in having the LaPA Committee meet when the legislature (State and Federal) is in session. Director Bernstein expressed his appreciation for what the LaPA Committee addresses and indicated that he would like to see more practical use of the Committee to delve into legislative topics facing OCSD. CONSENT CALENDAR: Consent Calendar Items am considered to be routine and willbe 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 Legislative and Public Affairs Committee meeting held on February 6, 2017. Bernstein, Kim, Sebourn, Shawver, Wagner, and AYES: Withers NOES: None ABSTENTIONS: None ABSENT: Wanke NON-CONSENT CALENDAR: None. INFORMATION ITEMS: 2. LEGISLATIVE AFFAIRS UPDATE (Rebecca Long) Rebecca Long, Senior Public Affairs Specialist, provided an update on the Cal Recycle program grant and indicated that OCSD will be applying. Ms. Long also indicated that OCSD will be applying for the OC Waste and Recycling grant. Eric Sapirstein, ENS Resources, reported that appointments have been made with the Environmental Protection Agency, provided an overview on a variety of federal loan programs, and reported on the recent California Association of Sanitation Agencies conference. 03/13/2017 Legislative and Public Attains Committee Minutes Page 2 of 4 Ms. Long indicated that the Orange County Water District will be applying for funding through the Water Infrastructure Finance and Innovation Act (WIFIA) for the Groundwater Replenishment System (GWRS) expansion. Cori Williams, Townsend Public Affairs (TPA), provided an update on activities in the State government, including a recap of legislation submitted before the recent deadline for the introduction of legislation. Ms. Williams provided an update on legislation regarding the feasibility of direct potable reuse of water (AB 574) and SB 231, which would amend Proposition 218. Ms. Williams also indicated that the State Water Resource Control Board recently extended urban water conservation regulations until May. Eric O'Donnell, TPA, reported on the Little Hoover Commission and the recent meeting the Commission had regarding permitting and special district rules. Mr. O'Donnell also reported on the recent Cap & Trade auction. Mr. O'Donnell and Ms. Long indicated that congratulatory letters will be sent to State and Federal legislators, in which tours of OCSD will also be offered. 3. PUBLIC AFFAIRS UPDATE (Jennifer Cabral) Ms. Cabral provided a brief overview of the Public Affairs Strategic Plan and reviewed the community events at which OCSD will be, and has been, present. Ms. Cabral also reviewed recent publications that have included information on OCSD. Ms. Cabral provided an overview on OCSD's recent video production efforts and two videos were shown—the General Manager's welcome/introduction to OCSD video and recruitment video. Ms. Cabral indicated that the next video to be produced/finalized will be a tour video. Ms. Cabral reported on the upcoming marketing efforts for the GWRS water bottling campaign. The first event will be the WateRuse event on March 2011 in San Diego and the second event will be in Sacramento on April IV'. The Chair and Vice-Chair will be attending, and there is one additional vacancy for another elected official to attend. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. 03/1312017 Legislative and Public Affairs committee Minutes Page 3 of 4 ADJOURNMENT: Chair Sebourn declared the meeting adjourned at 8:56 a.m. to the next Legislative and Public Affairs Committee meeting, Monday, April 10, 2017 at 3:30 p.m. Submitted by: Tam� r`� TinDeputy Clerk of the Board 0 311 3/2 01 7 Legislative and Public Affairs Committee Minutes Page 4 of 4 MINUTES OF THE STEERING COMMITTEE Orange County Sanitation District Wednesday, March 22, 2017 at 5:00 p.m. A regular meeting of the Steering Committee of the Orange County Sanitation District was called to order by Vice-Chairman David Shawver on Wednesday, March 22, 2017 at 5:03 p.m. in the Administration Building of the Orange County Sanitation District. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: David Shawver, Board Vice-Chair Jim Herberg, General Manager Ellery Deaton, Member-At-Large Bob Ghirelli, Assistant General Manager Tim Shaw, Member-At-Large Celia Chandler, Director of Human Donald Wagner, Member-At-Large Resources Chad Wanks, Administration Committee Jim Colston, Director of Environmental Chair Services John Withers, Operations Committee Rob Thompson, Director of Engineering Chair Ed Torres, Director of Operations & Maintenance COMMITTEE MEMBERS ABSENT: Lorenzo Tyner, Director of Finance & Greg Sebourn, Board Chair Administrative Services Kelly Lon:, Clerk of the Board Jennifer Cabral Carla Dillon Michael Dorman Al Garcia Tina Knapp Mark Manzo Kathy Millea OTHERS PRESENT: Brad Hogin, General Counsel Al Krippner, Board Member Deborah Diep, Center for Demographic Research PUBLIC COMMENTS: No public comments were provided. 03/2 212 01 7 Steering Committee Minutes Page 1 of 4 REPORTS: General Manager Jim Herberg provided an update on the February 61h sewer spill that occurred in Newport Beach causing a three-day closure of the bay. He detailed the cause of the spill as a debris build up in a steel pipe and stated that all reporting and notifications to regulatory agencies were made. Mr. Herberg further stated that the spill volume was measured at 83,527 gallons, and that possible fines may be forthcoming. He stated that a contract was awarded to repair the pipe prior to the spill. Vice-Chair Shawver complimented staff and thanked the Directors who attended the Board Orientations recently held on February 151h and March 15th. A survey was distributed to the Directors for comments and input to better prepare for future Board Orientations. Vice-Chair Shawver announced that thanks to AB 2022, the bottling of GWRS water has been completed and is now being used for educational purposes. One bottle was distributed to each Director tonight and was also distributed at the WateReuse Conference in San Diego and to the OCSD staff at bath plants on March 20th. He also announced that on April 18th OCSD and OCWD will be co-hosting a reception in Sacramento. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED, AND DULY CARRIED TO: Approve Minutes of the February 22, 2017 Regular Steering Committee Meeting. AYES: Deaton; Shaw; Shawver; Wagner; Wanks; and Withers NOES: None ABSTENTIONS: None ABSENT: Sebourn NON-CONSENT CALENDAR: Director of Engineering Rob Thompson provided a brief overview of the item as revised in the Supplemental Agenda and introduced the Director of the Center for Demographic Research, Deborah Diep, who provided an informative PowerPoint presentation and responded to questions from the Committee. 2. 2017-20 SPONSORSHIP OF THE CENTER FOR DEMOGRAPHIC RESEARCH (Rob Thompson) MOVED, SECONDED, AND DULY CARRIED TO: Recommend to the Board of Directors to: Approve a three-year Memorandum of Understanding with California State University, Fullerton Auxiliary Services Corporation for 03122/2017 Steering CommRtee Minutes Page 2 of 4 Operation of the Center for Demographic Research, for the period July 1, 2017 through June 30, 2020, for a total amount not to exceed $282,005.26. AYES: Deaton; Shaw; Shawver; Wagner; Wanke; and Withers NOES: None ABSTENTIONS: None ABSENT: Sebourn INFORMATION ITEMS: 3. LEGISLATIVE AND PUBLIC AFFAIRS COMMITTEE (Bob Ghirelli) Assistant General Manager Bob Ghirelli stated this item is being brought to this Committee as a follow-up discussion from the most recent Legislative and Public Affairs (LaPA) Committee meeting. At that meeting, Board Chairman Sebourn requested that the Steering Committee provide guidance as to the future of the LaPA Committee and evaluate its continued effectiveness. He stated the initial goals and objectives of the Committee, and provided a brief history to date. Mr. Ghirelli stated that staffs recommendation was to sunset the LaPA Committee and to have the Steering Committee be the committee of purview over Legislative or Public Affairs items. Discussion took place regarding the future of the LaPA Committee. Committee members voiced their desire and interest in continuing legislative work and the importance of having good staff representation in Sacramento and Washington, DC. One member stated that he felt that the District placed a great deal of emphasis on monitoring legislative bills, and suggested that we be more proactive in the creation of new bills. There was also a suggestion that more in-depth reports and presentations be provided on bills of interest to the District. Committee members were in consensus that the meeting dates could be less frequent, possibly aligning with the Federal Congressional/State Legislature sessions. There was discussion of moving the LaPA items to the Steering Committee, but the Committee was uncertain that enough time could be devoted to the affairs of both. Moving the Steering Committee meeting to an earlier start time was also suggested. Vice-Chair Shawver stated that he will recommend that the Committee undergo restructuring to provide greater efficiency as discussed. 0 312 212 01 7 Steering Committee Minutes Page 3 of 4 CLOSED SESSION: CONVENED IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTIONS 54956.8; 54956.91d1(1): and 54956.9(d)(2): The Committee convened in closed session at 5:44 p.m. to discuss four items. (Item Nos. 3 and 4 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 Committee reconvened in regular session at 6:01 p.m. CONSIDERATION OF ACTION, IF ANY ON MATTERS CONSIDERED IN CLOSED SESSION: General Counsel Brad Hogin did not provide a report. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: Vice-Chair Shawver declared the meeting adjourned at 6:02 p.m. to the next Steering Committee meeting to be held on Wednesday, April 26, 2017 at 5:00 p.m. Submitted by: K ly A. re Clerk of Iffie Board 03/22/2017 Steering Committee Minutes Page 4 of 4 MINUTES OF THE OPERATIONS COMMITTEE Orange County Sanitation District Wednesday, April 5, 2017, 5:00 p.m. A regular meeting of the Operations Committee was called to order by Board Chair Sebourn on Wednesday, April 5, 2017 at 5:00 p.m, in the Administration Building. Board Chair Sebourn led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Denise Barnes Jim Herberg, General Manager Allan Bernstein Bob Ghirelli, Assistant General Manager Robert Collacott Celia Chandler, Director of Human Resources Phil Hawkins Jim Colston, Director of Environmental Services Steve Jones Rob Thompson, Director of Engineering Sandra Massa-Lavitt (Alternate) Ed Torres, Director of Operations and Maintenance Richard Murphy Lorenzo Tyner, Director of Finance & Tim Shaw Administrative Services Fred Smith Tina Knapp, Deputy Clerk of the Board Michelle Steel Jeff Brown Mariellen Yarc Hemal Dhodia David Shawver, Board Vice-Chair Mike Dorman Greg Sebourn, Board Chair Mark Esquer Dean Fisher COMMITTEE MEMBERS ABSENT: Lisa Frigo John Withers, Chair Alfredo Garcia Rich Leon Rebecca Long Mark Manzo Jeff Mohr Sharon Yin Eros Yong OTHERS PRESENT: Brad Hogin, General Counsel Luke Grunbaum, Deputy General Counsel Dan Bunce, Brown and Caldwell Robert Carley James Clark, Black &Veatch Bob Oaten, Alternate Director CMSD PUBLIC COMMENTS: None. 0 410 5/2 01 7 Operations Committee Minutes Page 1 of 5 REPORT OF COMMITTEE CHAIR: Board Chair Sebourn did not provide a report. REPORT OF GENERAL MANAGER: General Manager Jim Herberg did not provide a report. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED. and DULY CARRIED TO: Approve Minutes of the March 1, 2017 Operations Committee Meeting. AYES: Barnes, Collacott, Hawkins, Massa-Lavitt (Alternate), R. Murphy, Sebourn, Shaw, Shawver, F. Smith, Steel, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, Jones, and Withers 2. MENDOZA ODOR CONTROL FACILITY (Ed Torres) MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Site Access and License Agreement with Costa Mesa Sanitary District (CMSD) to allow mobilization of an odor control chemical dosing station and injection of chemicals into the Baker-Main Interceptor at 2899 Mendoza Drive in the city of Costa Mesa, in a form approved by General Counsel; and B. Approve reimbursement to CMSD for $12,600 per year with annual adjustments not exceeding a 10% increase over the initial year for storage facility lease at Orange Coast College's boat yard beginning July 1, 2017 and annually thereafter. AYES: Barnes, Collacott, Hawkins, Massa-Lavitt (Alternate), R. Murphy, Sebourn, Shaw, Shawver, F. Smith, Steel, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, Jones, and Withers 0410512017 Operations Committee Minutes Page 2 of 5 3. HEADQUARTERS COMPLEX, SITE AND SECURITY, AND ENTRANCE REALIGNMENT PROGRAM, PROJECT NO. P1-128 (Rob Thompson) MOVED SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: Change the preferred alternative from the southwest corner of Plant No. 1 to the area bounded by Ellis Avenue on the south, southbound Ellis off-ramp on the east, 1-405 Freeway on the north, and Ward Street on the west for the location for the Administration Building and Laboratory Building for CEQA evaluation under the Headquarters Complex, Site and Security, and Entrance Realignment Program, Project No. P1-128. AYES: Barnes, Collacott, Hawkins, Massa-Lavitt (Alternate), R. Murphy, Sebourn, Shaw, Shawver, F. Smith, Steel, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, Jones, and Withers 4. CENTRAL GENERATION ENGINE JET CELL IGNITORS AND CHECK VALVES REPLACEMENT (Ed Torres) MOVED SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a Sole Source Purchase Order to GE Oil & Gas Compression Systems, LLC for the purchase of replacement Jet Cell Igniters and Check Valves for rehabilitating eight Central Generation Engines at Plant Nos. 1 and 2 for a total not to exceed $1,816,495, plus applicable tax and freight; and B. Approve a contingency of$90,825 (5%). AYES: Barnes, Collacott, Hawkins, Massa-Lavitt (Alternate), R. Murphy, Sebourn, Shaw, Shawver, F. Smith, Steel, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, Jones, and Withers NON-CONSENT CALENDAR: 5. UNINTERRUPTIBLE POWER SUPPLY IMPROVEMENTS AT PLANT NO. 1, PROJECT NO. P1-132 (Rob Thompson) Director of Engineering Rob Thompson introduced Engineering Manager Mike Dorman who provided an informative PowerPoint presentation that included an 04/05/2017 Operations Committee Minutes Page 3 of 5 overview of the project, Control System Network, Existing Uninterruptible Power Supply (UPS) system, UPS distribution, and Regional UPS. MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: Establish a project for Uninterruptible Power Supply Improvements at Plant No.1, Project No. P1-132, with a budget of$4,800,000. AYES: Barnes, Collacott, Hawkins, Massa-Lavitt (Alternate), R. Murphy, Sebourn, Shaw, Shawver, F. Smith, Steel, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, Jones, and Withers 6. RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT PLANT NO. 2, PROJECT NO. P2-123 (Rob Thompson) Mr. Thompson introduced CIP Project Manager Rich Leon who provided an informative PowerPoint presentation including details of the Activated Sludge Plant, examples of corrosion, and project background and constraints. MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: Establish a project for Return Activated Sludge Piping Replacement at Plant No. 2, Project No. P2-123, with a budget of $15,000.000. AYES: Barnes, Collacott, Hawkins, Massa-Lavitt (Alternate), R. Murphy, Sebourn, Shaw, Shawver, F. Smith, Steel, and Yarc NOES: None ABSTENTIONS: None ABSENT: Bernstein, Jones, and Withers Director Jones arrived at 5:17 p.m. Director Bernstein arrived at 5:20 p.m. INFORMATION ITEMS: 7. BIOSOLIDS MASTER PLAN, PROJECT NO. PS15-01 INFORMATION UPDATE (Rob Thompson) Mr. Thompson introduced this item and Engineering Manager Jeff Mohr provided an informative PowerPoint presentation that included an overview of what biosolids are, drivers for the Biosolids Master Plan, biosolids costs, proposed projects, and the AquaCritox Demonstration Project evaluation study. Mr. Thompson advised the Committee that compost is available tonight in the buckets provided. 041OW2017 Operations Committee Minutes Page 4 of 5 DEPARTMENT HEAD REPORTS: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: Chair Sebourn announced that OCSD received the Government Finance Officers Association of the United States and Canada (GFOA) Certificate of Achievement for Excellence in Financial Reporting for the year ending June 30, 2016. The Certificate of Achievement is the highest form of recognition in governmental accounting and financial reporting. Its attainment represents a significant accomplishment by a government and its management. Chair Sebourn announced that there will be a Joint Legislative and Public Affairs Committee and Steering Committee meeting on April 26, 2017 at 4:30 p.m. ADJOURNMENT Board Chair Sebourn declared the meeting adjourned at 5:42 p.m, to the next scheduled meeting of Wednesday, May 3, 2017 at 6:00 p.m. Submitted by, T AA Y Tina Knapp Deputy Clerk of the Board 04I05I2017 Operations Committee Minutes Page 5 of 5 MINUTES OF THE ADMINISTRATION COMMITTEE Orange County Sanitation District Wednesday, April 12, 2017 at 5:00 P.M. A regular meeting of the Administration Committee of the Orange County Sanitation District was called to order by Committee Chairman Wanks on April 12, 2017 at 5:01 p.m. in the Administration Building of the Orange County Sanitation District. Committee Chair Wanks led the Flag Salute. A quorum was declared present, as follows: COMMITTEE MEMBERS PRESENT: STAFF PRESENT: Chad Wanks, Chair Jim Herberg, General Manager Donald P. Wagner, Vice-Chair Bob Ghirelli, Assistant General Manager Cheryl Brothers (Alternate) Celia Chandler, Director of Human Resources Jim Ferryman Jim Colston, Director of Environmental Services Peter Kim Rob Thompson, Director of Engineering Mark Murphy (Alternate) Ed Torres, Director of Operations & Maintenance Scott Peotter Lorenzo Tyner, Director of Finance & Erik Peterson (Alternate) Administrative Services Greg Sebourn, Board Chair Tina Knapp, Deputy Clerk of the Board David Shawver, Board Vice-Chair Jennifer Cabral Al Garcia COMMITTEE MEMBERS ABSENT: Mark Manzo Al Krippner Kathy Millea Glenn Parker Jeff Mohr Sal Tinajero Ddaze Phuong John Swindler Mike White OTHERS PRESENT: Brad Hogin, General Counsel PUBLIC COMMENTS: None. REPORT OF COMMITTEE CHAIR: Committee Chair Wanks did not provide a report. 04/1212017 Administration Committee Minutes Page 1 of 4 REPORT OF GENERAL MANAGER: General Manager Jim Herberg announced that there will be a Joint Meeting of the Legislative and Public Affairs Committee and the Steering Committee on April 26, 2017 at 4:30 p.m. REPORT OF DIRECTOR OF FINANCE AND ADMINISTRATIVE SERVICES: Director of Finance and Administrative Services Lorenzo Tyner did not provide a report. CONSENT CALENDAR: 1. APPROVAL OF MINUTES (Clerk of the Board) MOVED, SECONDED AND DULY CARRIED TO: Approve Minutes of the March 8, 2017 Administration Committee Meeting. AYES: Ferryman, Kim, Peotter, Peterson (Alternate), Sebourn, Shawver, and Wanke NOES: None ABSTENTIONS: Brothers (Alternate) ABSENT: Krippner, M. Murphy (Alternate), Parker, Tinajero, and Wagner 2. FINANCIAL INFORMATION SYSTEM PURCHASE ORDER CONTRACT RENEWAL (Lorenzo Tyner) MOVED. SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Approve a five-year Purchase Order Contract with Oracle America, Inc. for an annual amount of$92,143, for a total not to exceed amount of$460,715, commencing July 1, 2017 through June 30, 2022; and B. Approve a contingency of $46,072 (10%). AYES: Brothers (Alternate), Ferryman, Kim, Peotter, Peterson (Alternate), Sebourn, Shawver, and Wanke NOES: None ABSTENTIONS: None ABSENT: Krippner, M. Murphy (Alternate), Parker, Tinajero, and Wagner 04/1212017 Adminietglion Committee Minutes Page 2 of 4 3. PURCHASE OF RADIO COMMUNICATION EQUIPMENT AND SERVICES (Lorenzo Tyner) MOVED SECONDED. and DULY CARRIED TO: Recommend to the Board of Directors to: A. Authorize an additional $400,000 to sole source Purchase Order No. 105821-OB with Motorola Solutions utilizing Orange County Price Book Agreement No. MA060-15011560, for purchases of equipment, services, and repairs,for a total amount not to exceed $480,000 for the period ending May 20, 2020; B. Authorize an immediate purchase of equipment and services for Orange County Sanitation District's Motorola radio systems, for a total amount of $148,613, plus applicable tax and freight, and C. Approve a contingency of$14,861 (10%). AYES: Brothers (Alternate), Ferryman, Kim, Peotter, Peterson (Alternate), Sebourn, Shawver, and Wanke NOES: None ABSTENTIONS: None ABSENT: Krippner, M. Murphy (Alternate), Parker, Tinajero, and Wagner NON-CONSENT: None. Alternate Director M. Murphy arrived at 5:09 p.m. Vice-Chair Wagner arrived at5:11p.m. INFORMATION ITEMS: 4. FY 2017-18 BUDGET UPDATE (Lorenzo Tyner) Mr. Tyner introduced Mike White, Controller, who presented a PowerPoint presentation that included the proposed staffing increase in FY 2017-18, benefit costs, operating and materials supplies expenses, biosolids removal costs, major costs components, power costs, engineering services costs, insurance and research funds costs, training costs, and the Orange County Employees Retirement System (OCERS) Unfunded Actuarial Accrued Liability (UAAL) pay down and costs. 04/12/2017 Administ ation Committee Minutes Page 3 of 4 5. BIOSOLIDS MASTER PLAN, PROJECT NO. PS15-01 INFORMATION UPDATE (Rob Thompson) Mr. Thompson introduced this item and Engineering Manager Jeff Mohr provided an informative PowerPoint presentation that included an overview of what biosolids are, drivers for the Biosolids Master Plan, biosolids costs, proposed projects, and the AquaCritox Demonstration Project evaluation study. Mr. Mohr advised the Committee that compost is available tonight in the buckets provided. CLOSED SESSION: None. OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY: None. ADJOURNMENT: Committee Chair Wanke declared the meeting adjourned at 6:12 p.m. to the next regularly scheduled meeting of Wednesday, May 10, 2017 at 5:00 p.m. Submitted by: Tina Knapp Deputy Clerk of the Board 04/12/2017 Administration Committee Minutes Page 4 of 4 MINUTES OF THE SPECIAL MEETING GROUNDWATER REPLENISHMENT SYSTEM STEERING COMMITTEE Monday, January 30, 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 Greg Sebourn - Chair Roger Yoh -Vice Chair James Ferryman Cathy Green (not present) Steve Jones Phil Anthony Alternates Donald Wagner Phil Hawkins Tim Shaw Denis Bilodeau Vacant— Dina Nguyen OCWD Staff OCSD Staff Mike Wehner Jim Herberg Bill Dunivin KathyMillea Eleanor Torres Others Judy-Rae Karlsen, Assistant District Secretary Debbie Burris- DDB Engineering Mike Puddio—BC CONSENT CALENDAR The Consent Calendar was approved upon motion by Director Green, seconded by Director Anthony and carried [6-0] as follows. [Yes—Seboum, Yoh, Ferryman, Jones, Anthony, Bilodeau/No - 0] 1. Minutes of Previous Meeting The minutes of the GWRS Steering Committee meeting held January 9, 2017 are approved as presented. MATTER FOR CONSIDERATION 2. Outreach for GWRS Bottled Water and the 10th Anniversary of GWRS OCWD Director of Public Affairs Eleanor Torres reported the OCSD and OCWD Executive Committees met and prioritized elements of the outreach plan for the GWRS bottled water. She 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. The Committee discussed tactics and associated costs for public outreach, distribution and other options for the 101h anniversary celebration and related media events. Ms. Torres noted the cost for the outreach programs would be a shared cost of approximately $126,000 or$63,000 per agency. Director Anthony stated his concerns about the sole sourcing for the communications and public outreach contract. He requested that staff provide more information on the selection of Dick Jones Communications. The Committee discussed the staff recommendations and expressed support for any of the additional tactical items that staff considers appropriate and necessary for the bottled water distribution plan and the proposed GWRS 1011 anniversary celebration. The Committee then took the following action. Upon motion by Director Yoh, seconded by Director Ferryman and carried (5-0-1)with Director Anthony abstaining, the Committee recommended that OCWD and OCSD Boards agendize the following actions at their February meetings: 1) Approve budget of$126,000, to be cost shared with the Orange County Sanitation District, for outreach related to the bottling of GWRS water and the commemoration of the 1V anniversary of the GWRS; 2) Authorize Agreement with Dick Jones Communications for an amount not to exceed $4,350 per month for 13 months, plus approved reimbursements and expenses, to execute the outreach plan for bottled GWRS water and the GWRS 10t' anniversary; and 3) Take action as appropriate on including additional tactic items for the outreach plan for bottled GWRS water and the GWRS 10th anniversary. [Yes— Sebourn, Yoh, Ferryman, Jones, Bilodeau/No— 0/Abstain •Anthony] DIRECTOR REPORTS Chair Greg Sebourn welcomed the two newly appointed OCSD Directors; Phil Hawkins and Tim Shaw. Director Yoh encouraged the Committee to focus on the GWRS Final Expansion project. GENERAL MANAGER REPORTS OCSD General Manager Jim Herberg reported on the storm flow event that increased the peak event at OCSD and the outfall of 100 million gallons per day to OCWD. He stated the coordination of efforts between OCWD and OCSD staff was extraordinary for managing that storm event. Executive Director Bill Dunivin noted the OCWD storage and recharge basins were ready to capture the storm Flow. ADJOURNMENT There being no further business to come before the Committee, the meeting was adjourned at 5:45 p.m. SD Dire Greg Sebour , hair 2 BOARD OF DIRECTORS Meeting Date TOBd.Or Dir. o5/za/v AGENDA REPORT Item Item 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 APRIL 2017 GENERAL MANAGER'S RECOMMENDATION Receive and file the report of the Investment Transactions for the month of April 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 April 30, 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 (wwwocsd.com) with the complete agenda package: • Report of the Investment Transactions for the month ended April 30, 2017 Page 1 of 1 C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 3/31/17 Thru 4/30/17 Transaction Settlement Acq/Disp Interest ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 04/02/2017 261908107 46,875.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 46,875.00 0.00 46,875.00 0.00 Purchase 04/04/2017 261908107 1,626.95 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,626.95 0.00 1,626.95 0.00 Purchase 04/042017 261908107 3,287.73 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 3,287.73 0.00 3,287.73 0.00 Purchase 04/06/2017 261908107 501,658.24 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 501,558.24 0.00 501,558.24 0.00 Purchase 04/06/2017 261908107 10,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 10,000,000.00 0.00 10,000,000.00 0.00 Purchase 04/06/2017 261908107 9,537.11 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 9,537.11 0.00 9,537.11 0.00 Purchase 04/06/2017 261908107 34,109.40 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 34,109.40 0.00 34,109.40 0.00 Purchase 04/07/2017 89233GTF3 1,000,000.00 Toyota Motor Credit Discount CP 99.812 1.00% 998,121.67 0.00 998,121.67 0.00 0.98%Due 6/15/2017 Purchase 04/10/2017 89113WEE2 1,000,000.00 Toronto Dominion NY Yankee CD 100.023 1.10% 1,000,234.59 9,000.00 1,009,234.59 0.00 1.2%Due 7/13/2017 Purchase 04/112017 36960LTF2 1,000,000.00 Genteel Electnc CD Discount CP 99.847 0.86% 998,465.28 0.00 998,465.28 0.00 0.85%Due 6/15/2017 Purchase 04/122017 31398ADM1 657,000.00 FNMA Note 100.753 0.84% 661,947.21 11,771.25 673,718.46 0.00 5.375%Due 61122017 Purchase 04/12/2017 4581XOCX4 3,035,000.00 Inter-American Dev Bank Note 99.763 1.70% 3,027,807.05 0.00 3,027,807.05 0.00 1.625%Due 5/122020 Purchase 04/122017 4781NA07 1,000,000.00 Johnson S Johnson Note 101.531 1.04% 1,015,310.00 8,787.50 1,024,097.50 0.00 5.55%Due 8JI512017 Purchase 04/132017 3137EADJ5 2,000,000.00 FHLMC Note 100.043 0.85% 2,000,860.00 4,166.67 2,005,026.67 0.00 1%Due 7/28/2017 Purchase 04/13/2017 912828WP1 2,500,000.00 US Treasury Note 100.020 0.76% 2,500,496.66 7,151.44 2,507,648.10 0.00 0.875%Due 6/152017 Purchase 04/152017 261908107 745,087.50 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 745,087.60 0.00 745,087.50 0.00 Purchase 04/152017 261908107 6,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 6,000.00 0.00 6,000.00 0.00 Purchase 04/172017 261908107 2.706.83 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 2,706.83 0.00 2,706.83 0.00 Purchase 04/172017 261908107 2,742.65 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 2,742.66 0.00 2,742.66 0.00 Purchase 04/172017 261908107 76,687.60 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 76,687.60 0.00 76,687.60 0.00 Purchase 04/172017 261908107 3,657.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 3,657.00 0.00 3,657.00 0.00 Purchase 04/172017 261908107 2,491.95 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 2,491.96 0.00 2,491.96 0.00 Purchase 04/172017 261908107 947.54 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 947.54 0.00 947.54 0.00 Purchase 04/172017 261908107 2,096.58 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 2,096.58 0.00 2,096.58 0.00 Purchase 04/172017 261908107 1,884.20 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,884.20 0.00 1,884.20 0.00 Purchase 04/172017 261908107 29.43 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 29.43 0.00 29.43 0.00 Chandler Asset Management-CONFIDENTIAL Page 1 Execution Time:&12017 8:27:57 PM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 3/31/17 Thru 4/30/17 Transaction Settlement Acq/Disp Interest ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 04/17/2017 261908107 1,117.90 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,117.90 0.00 1,117.90 0.00 Purchase 04/17/2017 261908107 219,444.34 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 219,444.34 0.00 219,444.34 0.00 Purchase 04/17/2017 261908107 70,528.35 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 70,528.35 0.00 70,528.35 0.00 Purchase 04/17/2017 261908107 236,893.06 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 236,893.06 0.00 236,893.06 0.00 Purchase 04/17/2017 46625HGYD 1,000,000.00 JP Morgan Chase Note 103.260 1.57% 1,032,600.00 15,333.33 1,047,933.33 0.00 6%Due 1/1 512 01 8 Purchase 04/18/2017 261908107 89,374.49 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 89,374.49 0.00 89,374.49 0.00 Purchase 04/18/2017 261908107 250,338.42 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 250,338.42 0.00 250,338.42 0.00 Purchase 04/18/2017 313385GR1 600,000.00 FHLB Discount Note 99.886 0.80% 599,315.33 0.00 599,315.33 0.00 0.79%Due 6/9/2017 Purchase 04/20/2017 261908107 16,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 16,000,000.00 0.00 16,000,000.00 0.00 Purchase 04/20/2017 261908107 1,272.92 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,272.92 0.00 1,272.92 0.00 Purchase 04/20/2017 261908107 299.62 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 299.62 0.00 299.62 0.00 Purchase 04/20/2017 261908107 1,194.04 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,194.04 0.00 1,194.04 0.00 Purchase 04/20/2017 261908107 354.63 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 354.63 0.00 354.63 0.00 Purchase 04/20/2017 261908107 1,584.93 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,584.93 0.00 1,584.93 0.00 Purchase 04/20/2017 912828WP1 7,500,000.00 US Treasury Note 100.020 0.74% 7,501,489.97 22,716.35 7,524,206.32 0.00 0.875%Due 6115/2017 Purchase 04/21/2017 06538BUR2 1,500,000.00 Bank of Tokyo Mitsubishi NY Discount CP 99.704 1.14% 1,495,566.67 0.00 1,495,566.67 0.00 I A 2%Due 7/25/2017 Purchase 04/21/2017 261908107 1,710.11 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,710.11 0.00 1,710.11 0.00 Purchase 04/21/2017 313385JK3 10,000,000.00 FHLB Discount Note 99.785 0.86% 9,978,513.90 0.00 9,978,513.90 0.00 0.85%Due 7/21/2017 Purchase 04/21/2017 89233GUKO 1,900,000.00 Toyota Motor Credit Discount CP 99.750 1.03% 1,895,255.81 0.00 1,895,255.81 0.00 1.01%Due 7/19/2017 Purchase 04/21/2017 912796KM 5,000,000.00 US Treasury BILL 99.808 0.78% 4,990,381.25 0.00 4,990,381.25 0.00 0.77%Due 7/20/2017 Purchase 04/21/2017 912796LE7 17,500,000.00 US Treasury BILL 99.893 0.71 % 17,481,298.09 0.00 17,481,298.09 0.00 0.7%Due 6/15/2017 Purchase 04/24/2017 261908107 25,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 25,000.00 0.00 25,000.00 0.00 Purchase 04/24/2017 261908107 5,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 5,000.00 0.00 5,000.00 0.00 Purchase 04/24/2017 261908107 5,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 5,000,000.00 0.00 5,000,000.00 0.00 Purchase 04/24/2017 261908107 1,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,000,000.00 0.00 1,000,000.00 0.00 Purchase 04/24/2017 3137EADJ5 5,000,000.00 FHLMC Note 100.047 0.82% 5,002,350.00 11,944.44 5,014,294.44 0.00 1%Due 7/28/2017 Chandler Asset Management-CONFIDENTIAL Page 2 Execution Time:&12017 8:27:57 PM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 3/31/17 Thru 4/30/17 Transaction Settlement Acq/Disp Interest ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss ACQUISITIONS Purchase 04/25/2017 261908107 3,188.25 Dreyfus Tmy/Agcy Cash Management 521 1.000 0.61 % 3,188.25 0.00 3,188.25 0.00 Purchase 04/25/2017 261908107 207.03 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 207.03 0.00 207.03 0.00 Purchase 04/25/2017 261908107 1,440.38 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,440.38 0.00 1,440.38 0.00 Purchase 04/25Q017 261908107 5,951.31 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 5,951.31 0.00 5,951.31 0.00 Purchase 04/2SQ017 261908107 1,665.92 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,665.92 0.00 1,665.92 0.00 Purchase 04/25/2017 261908107 484.56 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 484.56 0.00 484.56 0.00 Purchase 04/25/2017 261908107 10,005.29 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 10,005.29 0.00 10,005.29 0.00 Purchase 04/25/2017 261908107 6,965.82 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 6,965.82 0.00 6,965.82 0.00 Purchase 04/2SQ017 261908107 3,470.01 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 3,470.01 0.00 3,470.01 0.00 Purchase 04/2SQ017 261908107 60.24 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 60.24 0.00 60.24 0.00 Purchase 04/2SQ017 261908107 4,352.17 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 4,352.17 0.00 4,352.17 0.00 Purchase 04/2SQ017 261908107 6,812.10 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 6,812.10 0.00 6,812.10 0.00 Purchase 04/2SQ017 261908107 213.42 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 213.42 0.00 213.42 0.00 Purchase 04/2SQ017 261908107 7,430.7 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 7,430.77 0.00 7,430.77 0.00 Purchase 04/2SQ017 261908107 579.94 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 579.94 0.00 579.94 0.00 Purchase 04/25Q017 261908107 34.29 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 34.29 0.00 34.29 0.00 Purchase 04/25Q017 261908107 1,770.08 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,770.08 0.00 1,770.08 0.00 Purchase 04/26/2017 912828J76 5,000,000.00 US Treasury Note 99.528 1.85% 4,976,383.94 6,215.85 4,982,599.79 0.00 1.75%Due 3/31/2022 Purchase 04/27/2017 261908107 397.97 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 397.97 0.00 397.97 0.00 Purchase 04/27/2017 3137EABA6 5,000,000.00 FHLMC Note 102.279 1.00% 5,113,950.00 113,888.89 5,227,838.89 0.00 5.125%Due 11/17/2017 Purchase 04/27/2017 3137EADLO 2,785,000.00 FHLMC Note 100.009 0.98% 2,785,250.65 2,166.11 2,787,416.76 0.00 1%Due 9/29/2017 Purchase 04/28Q017 261908107 5,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 5,000,000.00 0.00 5,000,000.00 0.00 Purchase 04/28Q017 313385JS6 5,000,000.00 FHLB Discount Note 99.782 0.87% 4,989,117.92 0.00 4,989,117.92 0.00 0.86%Due 7/28/2017 Purchase 04/28/2017 313589JQ7 12,000,000.00 FNMA Discount Note 99.796 0.84% 11,975,525.04 0.00 11,975,525.04 0.00 0.82%Due 7/26/2017 Purchase 04/28/2017 674599CK9 3,350,000.00 Occidental Petroleum Callable Note Cant 100.137 2.57% 3,354,589.50 3,146.28 3,357,734.78 0.00 3/15/2022 2.6%Due 4/15M22 Purchase 04/30/2017 261908107 86,250.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.63% 86,250.00 0.00 86,250.00 0.00 Purchase 04/30/2017 261908107 2,500.000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.63% 2,500,000.00 0.00 2,500,000.00 0.00 Chandler Asset Management-CONFIDENTIAL Page 3 Execution Time:&12017 8:27:57 PM GAROrangeCounty Sanitation District Consolidated Transaction Ledger Account#10283 3/31/17 Thru 4/30/17 Transaction Settlement I Acq/Disp Interest ,Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss ACQUISITIONS Subtotal 137,313,710.09 137,361,548.62 216,287.11 137,577,035.73 0.00 Security 04/06/2017 261908107 34,109.40 Dreyfus Trsy/Agcy Cash Management 521 1.000 34,109,40 0.00 34,109,40 0.00 Contribution Security 04/20/2017 261908107 60,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 60,000,000.00 0.00 60,000,000.00 0.00 Contribution Security 04/20/2017 261908107 12,000,000.00 Dreyfus Trsy/Agcy Cash Management 521 1.000 12,000,000.00 0.00 12,000,000.00 0.00 Contribution Security 04/30/2017 912828WUO 32,136.00 US Treasury Inflation Index Note 100.000 32,136.00 11.65 32,147.65 0.00 Contribution 0A25%Due 7115/2024 Subtotal 72,066,245.40 72 066,245 40 11.65 72,066,257.05 0.00 Short Sale 04/20/2017 261908107 -7,524,206.32 Dreyfus Trsy/Agcy Cash Management 521 1.000 -7,524,206.32 0.00 -7,524,206.32 0.00 Subtotal -7,524,206.32 -7,524,2D6.32 0.00 -7,524,206.32 0.00 TOTAL ACQUISITIONS 201,855,757.17 201,903,587.70 216,298.76 202,119,886.46 0.00 DISPOSITIONS Closing 04/20/2017 261908107 -7,524,206.32 Dreyfus Trsy/Agcy Cash Management 521 1.000 -7,524,206.32 0.00 -7,524,206.32 000 Purchase Subtotal -7,524,206.32 -7,524,206.32 0.00 -7,524,2D6.32 0.00 Sale 04/06/2017 912828G20 500,000.00 US Treasury Note 99.968 0.93% 499,842.08 1,716.16 501,558.24 378.56 OS75%Due 11/1512017 Sale 04/07/2017 261908107 998,121.67 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 998,121.67 0.00 998,121.67 0.00 Sale 04/10/2017 261908107 1,009,234.59 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,009,234.59 0.00 1,009,234.59 0.00 Sale 04/11/2017 261908107 998,465.28 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 998,465.28 0.00 998,465.28 0.00 Sale 04/1212017 261908107 3,027,807.05 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.65% 3,027,807.05 0.00 3,027,807.05 0.00 Sale 04/1212017 261908107 1,024,097.50 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,024,097.50 0.00 1,024,097.50 0.00 Sale 04/1212017 261908107 673,718.46 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 673,718.46 0.00 673,718.46 0.00 Sale 04/13/2017 261908107 4,512,674.77 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 4,512,674.77 0.00 4,512,674.77 0.00 Sale 04/17/2017 261908107 1,047,933.33 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,047,933.33 0.00 1,047,933.33 0.00 Sale 04/1W017 261908107 599,315.33 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 599,315.33 0.00 599,315.33 0.00 Sale 04/20/2017 261908107 7,524,206.32 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 7,524,206.32 0.00 7,524,206.32 0.00 Sale 04/21/2017 261908107 1,895,255.81 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 1,895,255.81 0.00 1,895,255.81 0.00 Chandler Asset Management-CONFIDENTIAL Page 4 Execution Time:G12017 8:27:57 PM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 3/31/17 Thru 4/30/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount GainfLoss DISPOSITIONS Sale 04/21/2017 261908107 33,945,759.91 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 33,945,759.91 0.00 33,945,759.91 0.00 Sale 04/24/2017 261908107 5,014,294.44 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 5,014,294.44 0.00 5,014,294.44 0.00 Sale 04/26/2017 261908107 4,982,599.79 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.66% 4,982,599.79 0.00 4,982,599.79 0.00 Sale 04/27/2017 261908107 8,015,255.65 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 8,015,255.65 0.00 8,015,255.65 0.00 Sale 04/28/2017 261908107 16,964,642.96 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.61 % 16,964,642.96 0.00 16,964,642.96 0.00 Sale 04/28/2017 261908107 3,357,734.78 Dreyfus Trsy/Agcy Cash Management 521 1.000 0.66% 3,357,734.78 0.00 3,357,734.78 0.00 Subtotal 96,091,117.64 96,090,959.72 1,716.16 96,092,675.88 378.56 Call 04/15/2017 91159HHD5 740,000.00 US Bancorp Callable Note Cent 4/15/2017 100.000 1.65% 740,000.00 5,087.50 745,087.50 0.00 1.65%Due 5/15/2017 Subtotal 740,000.00 740,000.00 5,087.50 745,087.50 0.00 Paydown 04/06/2017 62888UAA8 9,196.21 NCUA Guaranteed Note CM02010-R2Due 100.000 9,196.21 340.90 9,537.11 0.00 11/6/2017 Paydown 04/17/2017 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 04/17/2017 3133TCE95 1,784.10 FHLMC FSPC E3 A 100.000 1,784.10 100.10 1,884.20 0.00 2892%Due 8/15/2032 Paydown 04/17/2017 31348SWZ3 23.99 FHLMC FH 7860" 100.000 23.99 5.44 29.43 0.00 2.262%Due 1/1/2028 Paydown 04/17/2017 3837H4NX9 1,083.46 GNMA Pool#2000-9 100.000 1,083.46 34.44 1,117.90 0.00 9.5%Due 2/16/2030 Paydown 04/17/2017 438140AC2 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 04/17/2017 477877AD6 218,157.92 John Deere Owner Trust 2014E A3 100.000 218,157.92 1,286.42 219,444.34 0.00 1.07%Due 11/1 512 01 8 Paydown 04/17/2017 47787XA133 0.00 John Deere Owner Trust 2017-A A2 100.000 0.00 2,491.96 2,491.96 0.00 1.5%Due 1 0/1 512 01 9 Paydown 04/17/2017 47788MAC4 0.00 John Deere Owner Trust 201&A A3 100.000 0.00 2,742.66 2,742.66 0.00 1.36%Due 4/15/2020 Paydown 04/17/2017 47788NAM 0.00 John Deere Owner Trust 201&B A2 100.000 0.00 2,706.83 2,706.83 0.00 1.09%Due 2/15/2019 Paydown 04/17/2017 654747AB0 0.00 Nissan Auto Receivables 2017-A A2A 100.000 0.00 947.54 947.54 0.00 1.47%Due 1/15/2020 Paydown 04/17/2017 65478WAB1 68,669.22 Nissan Auto Receivables Owner 2016-C 100.000 68,669.22 1,859.13 70,528.35 0.00 A2A 1.07%Due 5/15/2019 Chandler Asset Management-CONFIDENTIAL Page 5 Execution Time:&12017 8:27:57 PM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 3/31/17 Thru 4/30/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss DISPOSITIONS Paytlown 04/172017 89231TAB6 76,628.87 Toyota Auto Receivables Owner 2015-C 100.000 76,628.87 58.73 76,687.60 0.00 0 92%Due 2/1 512 01 8 Paytlown 04/17/2017 89236WAC2 234,832.55 Toyota Auto Receivables Owner 2015-A 100.000 234,832.55 2,060.51 236,893.06 0.00 1.12%Due 2115/2019 Paytlown 04/1S2017 43814GAC4 89,198.12 Honda Auto Receivables 2014-2 A3 100.000 89,198.12 176.37 89,374.49 0.00 0.77%Due 3/19/2018 Paytlown 04/i52017 43814NAB1 249,242.32 Honda Auto Receivables 2016.1 A2 100.000 249,242.32 1,096.10 250,338.42 0.00 1.01%Due 6/18/2018 Paytlown 04/20/2017 36225CAZ9 1,226.25 GNMA P.I#G280023 100.000 1,226.25 46.67 1,272.92 0.00 2.816%Due 12/20/2026 Paytlown 04/20/2017 36225CC20 248.30 GNMA PogI#G280088 100.000 248.30 51.32 299.62 0.00 2.817%Due 61202027 Paytlown 04/20/2017 36225CN28 1,048.80 GNMA P.I#G280408 100.000 1,048.80 145.24 1,194.04 0.00 2.691%Due 51202030 Paytlown 04/20/2017 36225CNM4 336.54 GNMA P.I#G280395 100.000 336.54 18.09 354.63 0.00 2.877%Due 4/202030 Paytlown 04/202017 W225DCBS 1,435.78 GNMA P.I#G280965 100.000 1,435.78 149.15 1,584.93 0.00 2.31%Due 7/20/2034 Paytlown 04/212017 43814TAB8 0.00 Honda Auto Receivables 2017-1 A2 100.000 0.00 1,710.11 1,710.11 0.00 1.42%Due 7/22/2019 Paytlown 0425/2017 03215PFN4 0.00 AMRESCO Residential Seventies 1999-1 100.000 0.00 207.03 207.03 0.00 ADue 6/2512029 Paytlown 04/252017 31371NUC7 1,351.83 FNMA FN 257179 100.000 1,351.83 88.55 1,440.38 0.00 4.5%Due 4/1/2028 Paytlown 04/252017 31376KT22 5,265.51 FNMA FN 357969 100.000 5,266.51 685.80 5,951.31 0.00 5%Due 9/12035 Paytlown 04/25/2017 31381 PDA3 618.20 FNMA FN 466397 100.000 618.20 1,047.72 1,655.92 0.00 3.4%Due 11/1/2020 Paytlown 04/252017 3138EG6F6 418.31 FNMA FN AL0869 100.000 418.31 66.25 484.56 0.00 4.5%Due 6/1/2029 Paytlown 04/252017 313MJY35 4,836.31 FHLMC FSPC T-582A 100.000 4,836.31 5,168.98 10,005.29 0.00 6.5%Due 9252043 Paytlown 04/25/2017 31397QRED 6,527.86 FNMA FNR 2011-3 FA 100.000 6,527.86 437.96 6,965.82 0.00 0.832%Due 2I252041 Paytlown 04/252017 31398VJ98 0.00 FHLMC FHMS K006 A2 100.000 0.00 3,188.25 3,188.25 0.00 4.251%Due 11252020 Paytlown 04/252017 31403DJZ3 2,806.11 FNMA Pool#745580 100.000 2,806.11 663.90 3,470.01 0.00 5%Due 6/12036 Paytlown 04/25/2017 31403GXF4 39.49 FNMA Pool#FN 748678 100.000 39.49 20.75 60.24 0.00 5%Due 10/1/2033 Chandler Asset Management-CONFIDENTIAL Page 6 Execution Time:5112017 8:27:57 PM C." Orange County Sanitation District Consolidated Transaction Ledger Account#10283 3/31/17 Thru 4/30/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss DISPOSITIONS Paytlown 04/25/2017 31406PQY8 3,230.12 FNMA Pool#FN 815971 100.000 3,230.12 1,122.05 4,352.17 0.00 5%Due 3/1/2035 Paytlown 04/25/2017 31406XW75 6,424.76 FNMA Pool#FN 823358 100.000 6,424.76 387.34 6,812.10 0.00 2.875%Due 2/1/2035 Paytlown 04/25/2017 31407BXH7 95.88 FNMA Poo1#FN 826080 100.000 95.88 117.54 213.42 0.00 5%Due 7/l/2035 Paytlown 04/252017 31410F4V4 6,121.65 FNMA Pool#FN 888336 100.000 6,121.66 1,309.11 7,430.77 0.00 5%Due 7/l/2036 Paytlown 0425/2017 31417YAY3 474.83 FNMA Pool#FN MA0022 100.000 474.83 105.11 579.94 0.00 4.5%Due 4/1/2029 Paytlown 04/252017 47787XA133 0.00 John Deere Owner Trust 2017-A A2 100.000 0.00 34.29 34.29 0.00 1.5%Due 1 0/1 512 01 9 Paytlown 04/25/2017 78445JAA5 1,550.78 SLMA 200&9 ADue 425/2023 100.000 1,550.78 219.30 1,770.08 0.00 Paytlown 04/27/2017 31396X3Q5 397.59 FNMA FNR 2007-114 A6Due 10/27/2037 100.000 397.59 0.38 397.97 0.00 Subtotal 993,271.67 993,271.67 38,651.60 1,031,923.27 0.00 Maturity 04/062017 912796KQ1 10,000,000.00 US Treasury Bill 100.000 10,000,000.00 0.00 10,000,000.00 0.00 0.47%Due 4/6/2017 Maturity, 04/20/2017 89233GRL2 1,000,000.00 Toyota Motor Credit Discount CP 99.669 1,000,000.00 0.00 1,000,000.00 0.00 1.01%Due 4/20/2017 Maturity, 04/20/2017 912796KT5 15,000,000.00 US Treasury BIII 100.000 15,000,000.00 0.00 15,000,000.00 0.00 0.57%Due 412 012 01 7 Maturity, 04/24/2017 4595OKBS8 5,000,000.00 International Finance Corp Note 100.000 5,000,000.00 0.00 5,000,000.00 0.00 1%Due 4/24/2017 Maturity, 04/24/2017 4595OKBS8 1,000,000.00 International Finance Corp Note 100.000 1,000,000.00 0.00 1,000,000.00 0.00 1%Due 4/24/2017 Maturity 0428/2017 313385EXO 5,000,000.00 FHLB Discount Note 100.000 5,000,000.00 0.00 5,000,000.00 0.00 0.54%Due 4/28/2017 Maturity 04/302017 912828SSO 2,500,000.00 US Treasury Note 100.000 2,500,000.00 0.00 2,500,000.00 0.00 OS75%Due 4130/2017 Subtotal 39,500,000.00 39,500,0 00.00 0.00 39,500,000.00 0.00 Security 04/062017 261908107 34,109.40 Dreyfus Tmy/Agcy Cash Management 521 1.000 34,109.40 0.00 34,109.40 0.00 Withdrawal Subtotal 34,109.40 34,109.40 0.00 34,109.40 0.00 TOTAL DISPOSITIONS 129,834,292.39 129,834,134.47 45,455.26 129,879,589.73 378.56 Chandler Asset Management-CONFIDENTIAL Page 7 Execution Time:5112017 8:27:57 PM �'" Orange County Sanitation District Consolidated Transaction Ledger Account#10283 3/31/17 Thru 4/30/17 Transaction Settlement Acq/Disp Interest Type Date CUSIP Quantity Security Description Price Yield Amount PurlSold Total Amount Gain/Loss OTHER TRANSACTIONS Interest 04/02/2017 3137EADM8 7,500,000.00 FHLMC Note 0.000 46,875.00 0.00 46,875.00 0.00 1 25%Due 1 0/212 01 9 Interest IaV15/2017 68389X 145 1,000,000.00 Oracle Cory Note 0.000 6,000.00 0.00 6,000.00 0.00 1.2%Due 1 0/1 512 01 7 Interest 04/24/2017 4595OKBS8 1,000,000.00 Inlemational Finance Corp Note 0.000 5,000.00 0.00 5,000.00 0.00 1%Due 4/24/2017 Interest 04/24/2017 4595OKBS8 5,000,000.00 Inlemational Finance Corp Note 0.000 25,000.00 0.00 25,000.00 0.00 1%Due 4/24/2017 Interest 04/30/2017 9128281-99 5,500,000.00 US Treasury Note 0.000 37,812.50 0.00 37,812.50 0.00 1.375%Due 10/31/2020 Interest 04/30/2017 912828SSO 2,500,000.00 US Treasury Note 0.000 10,937.50 0.00 10,937.50 0.00 0.875%Due 4130/2017 Interest 04/30/2017 912828T67 6,000,000.00 US Treasury Note 0.000 37,500.00 0.00 37,500.00 0.00 1.25%Due 10131/2021 Subtotal 28,500,000.00 10,125.00 0.00 169,125.00 0.00 Dividend 04/04/2017 261908107 2,830,071.78 Dreyfus Trsy/Agcy Cash Management 521 0.000 1,626.95 0.00 1,626.95 0.00 Dividend 04/04/2017 261908107 3,753,584.00 Dreyfus Trsy/Agcy Cash Management 521 0.000 3,287.73 0.00 3,287.73 0.00 Subtotal 6,583,655.78 4,9%68 0.00 4,914,68 0.00 Cash Capital 04/06/2017 525ESCOY6 0.00 Lehman Brothers Note-DefaultetlDue 0.000 26,216.51 0.00 26,216.51 0.00 Distribution 10/22P2049 Cash Capital 04/06/2017 525ESCIB7 0.00 Lehman Brothers Note-DefaultetlDue 0.000 7,892.89 0.00 7,892.89 0.00 Distribution 1/24/2018 Subtotal 0.00 34,109.40 0.00 34,109.40 0.00 TOTAL OTHER TRANSACTIONS 35,083,655.78 208,149.08 0.00 208,149.08 0.00 Chandler Asset Management-CONFIDENTIAL Page 8 Execution Time:&12017 8:27:57 PM OPERATIONS COMMITTEE Meeting Dare TOBd.of Dir. 05/03/17 BB/24/17 AGENDA REPORT Item mbe ern Number 2 B Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT NO. 1, PROJECT NO. P1-129 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Design Services Agreement with AECOM Technical Services, Inc. to provide engineering design services for the Return Activated Sludge Piping Replacement at Activated Sludge Plant No. 1, Project No. P1-129, for an amount not to exceed $523,039; and B. Approve a contingency of$52,304 (10%). BACKGROUND Activated Sludge Plant No. 1 was constructed in 1974, and is one of the three biological treatment processes at the Orange County Sanitation District (Sanitation District) Plant No. 1. The facility includes 220 feet of 30-inch return activated sludge header piping required to maintain full capacity and supply effluent to the Orange County Water District. This project will completely replace the existing pump station header piping and buried piping from the pump station to the aeration basin walls. RELEVANT STANDARDS • Protection of Orange County Sanitation District assets • Provide a safe and collegial workplace PROBLEM The return activated sludge header piping system has had numerous corrosion-related leaks resulting in process interruptions. Future leaks could be a safety issue and could reduce the water supply to the Groundwater Replenishment System (GWRS). PROPOSED SOLUTION Replace the return activated sludge header piping. The services of a design consulting firm are required to complete this work. Page 1 of 4 TIMING CONCERNS A sudden pipeline rupture could present a safety issue for Operations staff. The repairs could also lead to a short-term loss of water availability to the GWRS. RAMIFICATIONS OF NOT TAKING ACTION Leaks will occur more often and lead to interruption of water supply to the GWRS. PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Approved the creation of the P1-129 project for a total project cost of $3,300,000. ADDITIONAL INFORMATION Consultant Selection: The Sanitation District requested and advertised for proposals for Return Activated Sludge Piping Replacement at Activated Sludge Plant No. 1, Project No. P1-129, on February 2, 2017. The following evaluation criteria were described in the Request for Proposals (RFP) and used to determine the most qualified Consultant. CRITERION WEIGHT Project Understanding and Approach 40% Related Project Experience 20% Project Team and Staff Qualifications 40% Three proposals were received on March 23, 2017 and evaluated in accordance with the evaluation process set forth in Sanitation District Board of Directors' Purchasing Ordinance No. OCSD-47 (Purchasing Ordinance), by a pre-selected Evaluation Team consisting of the following Sanitation District's staff. Riaz Moinuddin Engineering Manager William Cassidy Engineering Supervisor Rich Leon Project Manager The Evaluation Team reviewed and ranked each of the proposals in accordance with the evaluation process set forth in Sanitation District Board of Directors' Purchasing Ordinance. Three additional representatives participated in the evaluation process as non-voting members. Two of these members were from the Contracts Administration Division and one from the Engineering Division. Following scoring by the Evaluation Team, it was deemed that interviews were not necessary to determine the top proposer. Based on the ranking shown below, AECOM Technical Services, Inc. was selected as the most qualified Consultant. Page 2 of 4 AECOM Consultant Evaluator Technical Arcadia U.S. Lee and Ro Services Inc. Inc. Inc. Evaluator 1 1 2 3 Evaluator 2 1 2 3 Evaluator 3 1 3 2 Combined Ranking 1 2 3 AECOM Technical Services, Inc. was selected based on the strength of their team experience and their presentation of well thought design alternatives. Review of Fee Proposal and Negotiations: Proposals were accompanied by sealed fee proposals. In accordance with the Purchasing Ordinance, the fee proposal of only the highest-ranked fine was opened after approval by the Director of Engineering of the Evaluation Team's recommendation. Staff conducted negotiations with AECOM Technical Services, Inc. to clarify the requirements of the Scope of Work, the assumptions used for the estimated level of effort, and the proposed approach to meet the goals and objectives for the project. A total of two meetings were held with the top-ranked proposer, AECOM Technical Services, Inc., to review, in detail, each project element, the assumptions regarding the project elements, the requirements of each task in the scope, and the basis for estimating the associated level of effort. The negotiated fee decreased even as hours were added to provide additional constructability review due to reduction in overhead and fringe rates. Original Fee Proposal Negotiated Fee Total Hours 2,680 2,856 Total Fee $538,645 $523,039 The Consultant's fringe and overhead costs, which factor into the billing rate, have been substantiated. The contract profit is 9.56%, which is based on an established formula based on the Sanitation District's standard design agreements. Based on the above, staff has determined that the final negotiated fee is fair and reasonable for the level of effort required for this project and recommends award of the Professional Design Services Agreement to AECOM Technical Services, Inc. CEQA A Notice of Exemption for the project will be filed. Page 3 of 4 FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (Project No. P1-129)and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: Professional Design Services Agreement RL:dm:gc Page 4 of 4 PROFESSIONAL DESIGN SERVICES AGREEMENT THIS AGREEMENT, is made and entered into to be effective the 24' day of May, 2017 by and between the ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "SANITATION DISTRICT", and AECOM TECHNICAL SERVICES, INC., for purposes of this Agreement hereinafter referred to as "CONSULTANT". WITNESSETH: WHEREAS, the SANITATION DISTRICT desires to engage a CONSULTANT for RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1, PROJECT NO. P7-129; and to provide professional design engineering services to prepare final specifications, plans, construction cost estimates, bid documents and other supporting documentations; and, WHEREAS, CONSULTANT is qualified to provide the necessary services in connection with these requirements and has agreed to provide the necessary professional services; and, WHEREAS, the SANITATION DISTRICT has adopted procedures for the selection of professional services and has proceeded in accordance with said procedures to select a CONSULTANT to perform this work; and, WHEREAS, at its regular meeting on May 24, 2017 the Board of Directors, by Minute Order, accepted the recommendation of the Operations Committee pursuant to SANITATION DISTRICT Board of Directors' Ordinance No. OCSD-47 to approve this Agreement between the SANITATION DISTRICT and CONSULTANT. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this Agreement, it is mutually agreed as follows: 1. SCOPE OF WORK CONSULTANT agrees to furnish necessary professional and technical services to accomplish those project elements outlined in the Scope of Work attached hereto as Attachment"A", and by this reference made a part of this Agreement. A. The CONSULTANT shall be responsible for the professional quality, technical accuracy, completeness, and coordination of all design, drawings, specifications, and other services furnished by the CONSULTANT under this Agreement, including the work performed by its Subconsultants. Where approval by the SANITATION DISTRICT is indicated, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all laws, codes, industry standards and liability for damages caused by errors, omissions, noncompliance with industry standards, and/or negligence on the part of the CONSULTANT or its Subconsultants. B. CONSULTANT is responsible for the quality of work prepared under this Agreement and shall ensure that all work is performed to the standards of best engineering practice for clarity, uniformity, and completeness. CONSULTANT PDSA PROJECT NO.Pi-129 Revised 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1 Page 1 of 19 shall respond to all comments, suggestions, and recommendations on the SANITATION DISTRICT's review comment sheets (i.e. DS1, DS2 and DS3). All comments shall be incorporated into the design prior to the next submittal deadline or addressed, in writing, as to why the comment has not been incorporated. CONSULTANT shall ensure that each submittal is 100% accurate for the level of work submitted (i.e. correct references, terms, capitalization or equal status, spelling, punctuation, etc.) C. In the event that work is not performed to the satisfaction of the SANITATION DISTRICT and does not conform to the requirements of this Agreement or any applicable industry standards, the CONSULTANT shall, without additional compensation, promptly correct or revise any errors or deficiencies in its designs, drawings, specifications, or other services within the timeframe specified by the Project Engineer/Project Manager. The SANITATION DISTRICT may charge to CONSULTANT all costs, expenses and damages associated with any such corrections or revisions. D. All CAD drawings, figures, and other work shall be produced by CONSULTANTS and Subconsultants using the SANITATION DISTRICT CAD Manual. Conversion of CAD work from any other non-standard CAD format to the SANITATION DISTRICT format shall not be acceptable in lieu of this requirement. Electronic files shall conform to the SANITATION DISTRICT specifications. Any changes to these specifications by the CONSULTANT are subject to review and approval of the SANITATION DISTRICT. Electronic files shall be subject to an acceptance period of thirty (30)calendar days during which the SANITATION DISTRICT shall perform appropriate reviews and including CAD Manual compliance. CONSULTANT shall correct any discrepancies or errors detected and reported within the acceptance period at no additional cost to the SANITATION DISTRICT. E. The CONSULTANT shall ensure that all plans and specifications prepared, or recommended under this Agreement allow for competitive bidding. The CONSULTANT shall design such plans or specifications so that procurement of services, labor or materials are not available from only one source, and shall not design plans and specifications around a single or specific product, piece of major equipment or machinery, a specific patented design or a proprietary process, unless required by principles of sound engineering practice and supported by a written justification that has been approved in writing by the SANITATION DISTRICT. The CONSULTANT shall submit this written justification to the SANITATION DISTRICT prior to beginning work on such plans and specifications. Whenever the CONSULTANT recommends a specific product or equipment for competitive procurement, such recommendation shall include at least two brand names of products that are capable of meeting the functional requirements applicable to the project. F. All professional services performed by the CONSULTANT, including but not limited to all drafts, data, correspondence, proposals, reports, and estimates PDSA PROJECT NO.Pi-129 ReAsed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 2 of 19 compiled or composed by the CONSULTANT, pursuant to this Agreement, are for the sole use of the SANITATION DISTRICT, its agents and employees. Neither the documents nor their contents shall be released to any third party without the prior written consent of the SANITATION DISTRICT. This provision does not apply to information that (a)was publicly known, or otherwise known to the CONSULTANT, at the time that it was disclosed to the CONSULTANT by the SANITATION DISTRICT, (b)subsequently becomes publicly known to the CONSULTANT other than through disclosure by the SANITATION DISTRICT. 2. COMPENSATION Total compensation shall be paid to CONSULTANT for services in accordance with the following provisions: A. Total Compensation Total compensation shall be in an amount not to exceed Five Hundred Twenty- Three Thousand and Thirty-Nine Dollars ($523,039). Total compensation to CONSULTANT including burdened labor(salaries plus benefits), overhead, profit, direct costs, and Subconsultant(s)fees and costs shall not exceed the sum set forth in Attachment"E" - Fee Proposal. B. Labor As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall pay to CONSULTANT a sum equal to the burdened salaries (salaries plus benefits)actually paid by CONSULTANT charged on an hourly-rate basis to this project and paid to the personnel of CONSULTANT. Upon request of the SANITATION DISTRICT, CONSULTANT shall provide the SANITATION DISTRICT with certified payroll records of all employees' work that is charged to this project. C. Overhead As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall compensate CONSULTANT and Subconsultants for overhead at the rate equal to the percentage of burdened labor as specified in Attachment"E"- Fee Proposal. D. Profit Profit for CONSULTANT and Subconsultants shall be a percentage of consulting services fees (Burdened Labor and Overhead). When the consulting or subconsulting services amount is $250,000 or less, the maximum Profit shall be 10%. Between $250,000 and $2,500,000, the maximum Profit shall be limited by a straight declining percentage between 10% and 5%. For consulting or subconsulting services fees with a value greater than $2,500,000, the maximum Profit shall be 5%. Addenda shall be governed by the same maximum Profit percentage after adding consulting services fees. PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 3 of 19 As a portion of the total compensation to be paid to CONSULTANT and Subconsultants, the SANITATION DISTRICT shall pay profit for all services rendered by CONSULTANT and Subconsultants for this project according to Attachment"E"- Fee Proposal. E. Subconsultants For any Subconsultant whose fees for services are greater than or equal to $100,000 (excluding out-of-pocket costs), CONSULTANT shall pay to Subconsultant total compensation in accordance with the Subconsultant amount specified in Attachment"E"- Fee Proposal. For any Subconsultant whose fees for services are less than $100,000, CONSULTANT may pay to Subconsultant total compensation on an hourly-rate basis per the attached hourly rate Schedule and as specified in the Scope of Work. The SANITATION DISTRICT shall pay to CONSULTANT the actual costs of Subconsultant fees and charges in an amount not to exceed the sum set forth in Attachment"E"- Fee Proposal. F. Direct Costs The SANITATION DISTRICT shall pay to CONSULTANT and Subconsultants the actual costs of permits and associated fees, travel and licenses for an amount not to exceed the sum set forth in Attachment"E"- Fee Proposal. The SANITATION DISTRICT shall also pay to CONSULTANT actual costs for equipment rentals, leases or purchases with prior approval of the SANITATION DISTRICT. Upon request, CONSULTANT shall provide to the SANITATION DISTRICT receipts and other documentary records to support CONSULTANT's request for reimbursement of these amounts, see Attachment"D"-Allowable Direct Costs. All incidental expenses shall be included in overhead pursuant to Section 2 -COMPENSATION above. G. Other Direct Costs Other Direct Costs incurred by CONSULTANT and its Contractor due to modifications in scope of work resulting from field investigations and field work required by Contract. These items may include special equipment, test equipment and tooling and other materials and services not previously identified. Refer to attachment"D" Allowable Direct Costs for payment information. H. Reimbursable Direct Costs The SANITATION DISTRICT will reimburse the CONSULTANT for reasonable travel and business expenses as described in this section and further described in Attachment"D"-Allowable Direct Costs to this Agreement. The reimbursement of the above mentioned expenses will be based on an "accountable plan" as considered by Internal Revenue Service (IRS). The plan includes a combination of reimbursements based upon receipts and a "per diem" component approved by IRS. The most recent schedule of the per diem rates utilized by the SANITATION PDSA PROJECT NO.Pi-129 Revised 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 4 of 19 DISTRICT can be found on the U.S. General Service Administration website at http://www.asa.gov/portal/category/104711#. The CONSULTANT shall be responsible for the most economical and practical means of management of reimbursable costs inclusive but not limited to travel, lodging and meals arrangements. The SANITATION DISTRICT shall apply the most economic and practical method of reimbursement which may include reimbursements based upon receipts and/or"per diem' as deemed the most practical. CONSULTANT shall be responsible for returning to the SANITATION DISTRICT any excess reimbursements after the reimbursement has been paid by the SANITATION DISTRICT. Travel and travel arrangements—Any travel involving airfare, overnight stays or multiple day attendance must be approved by the SANITATION DISTRICT in advance. Local Travel is considered travel by the CONSULTANT within the SANITATION DISTRICT general geographical area which includes Orange, Los Angeles, Ventura, San Bernardino, Riverside, San Diego, Imperial and Kern Counties. Automobile mileage is reimbursable if CONSULTANT is required to utilize personal vehicle for local travel. Lodging—Overnight stays will not be approved by the SANITATION DISTRICT for local travel. However, under certain circumstances overnight stay may be allowed at the discretion of the SANITATION DISTRICT based on reasonableness of meeting schedules and the amount of time required for travel by the CONSULTANT. Such determination will be made on a case-by-case basis and at the discretion of the SANITATION DISTRICT. Travel Meals— Per-diem rates as approved by IRS shall be utilized for travel meals reimbursements. Per diem rates shall be applied to meals that are appropriate for travel times. Receipts are not required for the approved meals. Additional details related to the reimbursement of the allowable direct costs are provided in the Attachment"D"-Allowable Direct Costs of this Agreement. I. Limitation of Costs If, at any time, CONSULTANT estimates the cost of performing the services described in CONSULTANT's Proposal will exceed seventy-five percent (75%) of the not-to-exceed amount of the Agreement, including approved additional compensation, CONSULTANT shall notify the SANITATION DISTRICT immediately, and in writing. This written notice shall indicate the additional amount necessary to complete the services. Any cost incurred in excess of the approved not-to-exceed amount, without the express written consent of the SANITATION DISTRICT's authorized representative shall be at CONSULTANT's own risk. This written notice shall be provided separately from, and in addition to any notification requirements contained in the CONSULTANT's invoice and PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1 Page 5 of 19 monthly progress report. Failure to notify the SANITATION DISTRICT that the services cannot be completed within the authorized not-to-exceed amount is a material breach of this Agreement. 3. REALLOCATION OF TOTAL COMPENSATION The SANITATION DISTRICT, by its Director of Engineering, shall have the right to approve a reallocation of the incremental amounts constituting the total compensation, provided that the total compensation is not increased. 4. PAYMENT A. Monthly Invoice: CONSULTANT shall include in its monthly invoice, a detailed breakdown of costs associated with the performance of any corrections or revisions of the work for that invoicing period. CONSULTANT shall allocate costs in the same manner as it would for payment requests as described in this Section of the Agreement. CONSULTANT shall warrant and certify the accuracy of these costs and understand that submitted costs are subject to Section 11 -AUDIT PROVISIONS. B. CONSULTANT may submit monthly or periodic statements requesting payment for those items included in Section 2- COMPENSATION hereof in the format as required by the SANITATION DISTRICT. Such requests shall be based upon the amount and value of the work and services performed by CONSULTANT under this Agreement and shall be prepared by CONSULTANT and accompanied by such supporting data, including a detailed breakdown of all costs incurred and project element work performed during the period covered by the statement, as may be required by the SANITATION DISTRICT. Upon approval of such payment request by the SANITATION DISTRICT, payment shall be made to CONSULTANT as soon as practicable of one hundred percent (100%)of the invoiced amount on a per-project-element basis. If the SANITATION DISTRICT determines that the work under this Agreement or any specified project element hereunder, is incomplete and that the amount of payment is in excess of: i. The amount considered by the SANITATION DISTRICT's Director of Engineering to be adequate for the protection of the SANITATION DISTRICT; or it. The percentage of the work accomplished for each project element. He may, at his discretion, retain an amount equal to that which insures that the total amount paid to that date does not exceed the percentage of the completed work for each project element or the project in its entirety. C. CONSULTANT may submit periodic payment requests for each 30-day period of this Agreement for the profit as set forth in Section 2 -COMPENSATION above. Said profit payment request shall be proportionate to the work actually PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 6 of 19 accomplished to date on a per-project-element basis. In the event the SANITATION DISTRICT's Director of Engineering determines that no satisfactory progress has been made since the prior payment, or in the event of a delay in the work progress for any reason, the SANITATION DISTRICT shall have the right to withhold any scheduled proportionate profit payment. D. Upon satisfactory completion by CONSULTANT of the work called for under the terms of this Agreement, and upon acceptance of such work by the SANITATION DISTRICT, CONSULTANT will be paid the unpaid balance of any money due for such work, including any retained percentages relating to this portion of the work. E. Upon satisfactory completion of the work performed hereunder and prior to final payment under this Agreement for such work, or prior settlement upon termination of this Agreement, and as a condition precedent thereto, CONSULTANT shall execute and deliver to the SANITATION DISTRICT a release of all claims against the SANITATION DISTRICT arising under or by virtue of this Agreement other than such claims, if any, as may be specifically exempted by CONSULTANT from the operation of the release in stated amounts to be set forth therein. F. Pursuant to the California False Claims Act (Government Code Sections 12650- 12655), any CONSULTANT that knowingly submits a false claim to the SANITATION DISTRICT for compensation under the terms of this Agreement may be held liable for treble damages and up to a ten thousand dollars ($10,000) civil penalty for each false claim submitted. This Section shall also be binding on all Subconsultants. A CONSULTANT or Subconsultant shall be deemed to have submitted a false claim when the CONSULTANT or Subconsultant: a) knowingly presents or causes to be presented to an officer or employee of the SANITATION DISTRICT a false claim or request for payment or approval; b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the SANITATION DISTRICT; c) conspires to defraud the SANITATION DISTRICT by getting a false claim allowed or paid by the SANITATION DISTRICT; d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to the SANITATION DISTRICT; or e) is a beneficiary of an inadvertent submission of a false claim to the SANITATION DISTRICT, and fails to disclose the false claim to the SANITATION DISTRICT within a reasonable time after discovery of the false claim. 5. CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS (DIR) REGISTRATION AND RECORD OF WAGES A. To the extent CONSULTANT's employees and/or Subconsultants who will perform Work during the design and preconstruction phases of a construction contract forwhich Prevailing Wage Determinations have been issued by the DIR and as more specifically defined under Labor Code Section 1720 at sec, CONSULTANT and Subconsultants shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1 Page 7 of 19 1771.4, the Work is subject to compliance monitoring and enforcement by the DIR. B. The CONSULTANT and Subconsultants shall maintain accurate payroll records and shall comply with all the provisions of Labor Code Section 1776, and shall submit payroll records to the Labor Commissioner pursuant to Labor Code Section 1771.4(a)(3). Penalties for non-compliance with the requirements of Section 1776 may be deducted from progress payments per Section 1776. C. Pursuant to Labor Code Section 1776, the CONSULTANT and Subconsultants shall furnish a copy of all certified payroll records to SANITATION DISTRICT and/or general public upon request, provided the public request is made through SANITATION DISTRICT, the Division of Apprenticeship Standards or the Division of Labor Enforcement of the Department of Industrial Relations. D. The CONSULTANT and Subconsultants shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulation Section 16461(e). 6. DOCUMENT OWNERSHIP—SUBSEQUENT CHANGES TO PLANS AND SPECIFICATIONS A. Ownership of Documents for the Professional Services performed. All documents, including but not limited to, original plans, studies, sketches, drawings, computer printouts and disk files, and specifications prepared in connection with or related to the Scope of Work or Professional Services, shall be the property of the SANITATION DISTRICT. The SANITATION DISTRICT's ownership of these documents includes use of, reproduction or reuse of and all incidental rights, whether or not the work for which they were prepared has been performed. The SANITATION DISTRICT ownership entitlement arises upon payment or any partial payment for work performed and includes ownership of any and all work product completed prior to that payment. This Section shall apply whether the CONSULTANT's Professional Services are terminated: a) by the completion of the Agreement, or b) in accordance with other provisions of this Agreement. Notwithstanding any other provision of this paragraph or Agreement, the CONSULTANT shall have the right to make copies of all such plans, studies, sketches, drawings, computer printouts and disk files, and specifications. B. CONSULTANT shall not be responsible for damage caused by subsequent changes to or uses of the plans or specifications, where the subsequent changes or uses are not authorized or approved by CONSULTANT, provided that the service rendered by CONSULTANT was not a proximate cause of the damage. 7. INSURANCE A. General i. Insurance shall be issued and underwritten by insurance companies acceptable to the SANITATION DISTRICT. PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1 Page 8 of 19 ii. Insurers must have an "A-" Policyholder's Rating, or better, and Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best's Guide Rating. However, the SANITATION DISTRICT will accept State Compensation Insurance Fund, for the required policy of Worker's Compensation Insurance subject to the SANITATION DISTRICT's option to require a change in insurer in the event the State Fund financial rating is decreased below"B". Further, the SANITATION DISTRICT will require CONSULTANT to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within twenty (20)days of written notice to CONSULTANT, by the SANITATION DISTRICT or its agent. iii. Coverage shall be in effect prior to the commencement of any work under this Agreement. B. General Liability The CONSULTANT shall maintain during the life of this Agreement, including the period of warranty, Commercial General Liability Insurance written on an occurrence basis providing the following minimum limits of liability coverage: Two Million Dollars ($2,000,000) per occurrence with Two Million Dollars ($2,000,000) aggregate. Said insurance shall include coverage for the following hazards: Premises-Operations, blanket contractual liability(for this Agreement), products liability/completed operations (including any product manufactured or assembled), broad form property damage, blanket contractual liability, independent contractors liability, personal and advertising injury, mobile equipment, owners and contractors protective liability, and cross liability and severability of interest clauses. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement(s). If requested by SANITATION DISTRICT and applicable, XCU coverage (Explosion, Collapse and Underground)and Riggers/On Hook Liability must be included in the General Liability policy and coverage must be reflected on the submitted Certificate of Insurance. C. Umbrella Excess Liability The minimum limits of general liability and Automotive Liability Insurance required, as set forth herein, shall be provided for through either a single policy of primary insurance or a combination of policies of primary and umbrella excess coverage. Umbrella excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automotive liability. D. Automotive/Vehicle liability Insurance The CONSULTANT shall maintain a policy of Automotive Liability Insurance on a comprehensive form covering all owned, non-owned, and hired automobiles, trucks, and other vehicles providing the following minimum limits of liability coverage: Combined single limit of One Million Dollars ($1,000,000) or alternatively, One Million Dollars ($1,000,000) per person for bodily injury and One Million Dollars ($1,000,000) per accident for property damage. A statement PDSA PROJECT NO.Pi-129 Revised 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 9 of 19 on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement. E. Worker's Compensation Insurance The CONSULTANT shall provide such Workers' Compensation Insurance as required by the Labor Code of the State of California in the amount of the statutory limit, including Employer's Liability Insurance with a minimum limit of One Million Dollars ($1,000,000) per occurrence. Such Worker's Compensation Insurance shall be endorsed to provide for a waiver of subrogation in favor of the SANITATION DISTRICT. A statement on an insurance certificate will not be accepted in lieu of the actual endorsements unless the insurance carrier is State of California Insurance Fund and the identifier"SCIF" and endorsement numbers 2570 and 2065 are referenced on the certificate of insurance. If an exposure to Jones Act liability may exist, the insurance required herein shall include coverage for Jones Act claims. F. Errors and Omissions/Professional Liability CONSULTANT shall maintain in full force and effect, throughout the term of this Agreement, standard industry form professional negligence errors and omissions insurance coverage in an amount of not less than Two Million Dollars ($2,000,000)with limits in accordance with the provisions of this Paragraph. If the policy of insurance is written on a "claims made" basis, said policy shall be continued in full force and effect at all times during the term of this Agreement, and for a period of five (5) years from the date of the completion of the services hereunder. In the event of termination of said policy during this period, CONSULTANT shall obtain continuing insurance coverage for the prior acts or omissions of CONSULTANT during the course of performing services under the term of this Agreement. Said coverage shall be evidenced by either a new policy evidencing no gap in coverage or by separate extended "tail" coverage with the present or new carrier. In the event the present policy of insurance is written on an "occurrence" basis, said policy shall be continued in full force and effect during the term of this Agreement or until completion of the services provided for in this Agreement, whichever is later. In the event of termination of said policy during this period, new coverage shall be obtained for the required period to insure for the prior acts of CONSULTANT during the course of performing services under the term of this Agreement. CONSULTANT shall provide to the SANITATION DISTRICT a certificate of insurance in a form acceptable to the SANITATION DISTRICT indicating the deductible or self-retention amounts and the expiration date of said policy, and shall provide renewal certificates not less than ten (10)days prior to the expiration of each policy term. PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1 Page 10 of 19 G. Proof of Coverage The CONSULTANT shall furnish the SANITATION DISTRICT with original certificates and amendatory endorsements effecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by the SANITATION DISTRICT before work commences. The SANITATION DISTRICT reserves the right to require complete, certified copies of all required insurance policies, including endorsements, effecting the coverage required, at any time. The following are approved forms that must be submitted as proof of coverage: • Certificate of Insurance ACORD Form 25 (512010)or equivalent. • Additional Insurance (ISO Form) CG2010 11 85 or (General Liability) The combination of(ISO Forms) CG 2010 1001 and CG 2037 1001 All other Additional Insured endorsements must be submitted for approval by the SANITATION DISTRICT, and the SANITATION DISTRICT may reject alternatives that provide different or less coverage to the SANITATION DISTRICT. • Additional Insured Submit endorsement provided by carrier for the (Auto Liability) SANITATION DISTRICT approval. • Waiver of Subrogation State Compensation Insurance Fund Endorsement No. 2570 or equivalent. • Cancellation Notice State Compensation Insurance Fund Endorsement No. 2065 or equivalent. H. Cancellation Notice Each insurance policy required herein shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30)days' prior written notice. The Cancellation Section of ACORD Form 25 (512010) shall state the required thirty (30) days' written notification. The policy shall not terminate, nor shall it be cancelled, nor the coverage reduced until thirty(30) days after written notice is given to the SANITATION DISTRICT except for nonpayment of premium, which shall require not less than ten (10) days written notice to the SANITATION DISTRICT. Should there be changes in coverage or an increase in deductible or SIR amounts, the CONSULTANT and its insurance broker/agent shall send to the SANITATION DISTRICT a certified letter which includes a description of the changes in coverage and/or any increase in deductible or SIR amounts. The certified letter must be sent to the attention of Risk Management, Div. 260, and shall be received by the SANITATION DISTRICT not less than thirty (30)days prior to the effective date of the change(s) if the change would reduce coverage or increase deductibles or SIR amounts or otherwise reduce or limit the scope of insurance coverage provided to the SANITATION DISTRICT. PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1 Page 11 of 19 I. Primary Insurance All liability policies shall contain a Primary and Non Contributory Clause. Any other insurance maintained by the SANITATION DISTRICT shall be excess and not contributing with the insurance provided by CONSULTANT. J. Separation of Insured All liability policies shall contain a "Separation of Insureds" clause. K. Non-Limiting (if applicable) Nothing in this document shall be construed as limiting in any way, nor shall it limit the indemnification provision contained in this Agreement, or the extent to which CONSULTANT may be held responsible for payment of damages to persons or property. L. Deductibles and Self-Insured Retentions Any deductible and/or self-insured retention must be declared to the SANITATION DISTRICT on the Certificate of Insurance. All deductibles and/or self-insured retentions require approval by the SANITATION DISTRICT. At the option of the SANITATION DISTRICT, either: the insurer shall reduce or eliminate such deductible or self-insured retention as respects the SANITATION DISTRICT; or the CONSULTANT shall provide a financial guarantee satisfactory to the SANITATION DISTRICT guaranteeing payment of losses and related investigations, claim administration and defense expenses. M. Defense Costs Liability policies shall have a provision that defense costs for all insureds and additional insureds are paid in addition to and do not deplete any policy limits. N. Subconsultants The CONSULTANT shall be responsible to establish insurance requirements for any Subconsultant hired by the CONSULTANT. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subconsultant's operations and work. O. Limits Are Minimums If the CONSULTANT maintains higher limits than any minimums shown above, then SANITATION DISTRICT requires and shall be entitled to coverage for the higher limits maintained by CONSULTANT. 8. SCOPE CHANGES In the event of a change in the Scope of Work, requested by SANITATION DISTRICT, the parties hereto shall execute an amendment to this Agreement setting forth with PDSA PROJECT NO.Pi-129 Revised 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 12 of 19 particularity all terms of the new Agreement, including but not limited to any additional CONSULTANT's fees. 9. PROJECT TEAM AND SUBCONSULTANTS CONSULTANT shall provide to SANITATION DISTRICT, prior to execution of this Agreement, the names and full description of all Subconsultants and CONSULTANT's project team members anticipated to be used on this project by CONSULTANT. CONSULTANT shall include a description of the scope of work to be done by each Subconsultant and each CONSULTANT's project team member. CONSULTANT shall include the respective compensation amounts for CONSULTANT and each Subconsultant on a per-project-element basis, broken down as indicated in Section 2- COMPENSATION. There shall be no substitution of the listed Subconsultants and CONSULTANT's project team members without prior written approval by the SANITATION DISTRICT. 10. ENGINEERING REGISTRATION The CONSULTANT's personnel are comprised of registered engineers and a staff of specialists and draftsmen in each department. The firm itself is not a registered engineer but represents and agrees that wherever in the performance of this Agreement requires the services of a registered engineer. Such services hereunder will be performed under the direct supervision of registered engineers. 11. AUDIT PROVISIONS A. SANITATION DISTRICT retains the reasonable right to access, review, examine, and audit, any and all books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify that the CONSULTANT is in compliance with all requirements under this Agreement. The CONSULTANT shall include the SANITATION DISTRICT's right as described above, in any and all of their subcontracts, and shall ensure that these rights are binding upon all Subconsultants. B. SANITATION DISTRICT retains the right to examine CONSULTANT's books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify all direct and indirect costs, of whatever nature, which are claimed to have been incurred, or anticipated to be incurred or to ensure CONSULTANT's compliance with all requirements under this Agreement during the term of this Agreement and for a period of three (3)years after its termination. C. CONSULTANT shall maintain complete and accurate records in accordance with generally accepted industry standard practices and the SANITATION DISTRICT's policy. The CONSULTANT shall make available to the SANITATION DISTRICT for review and audit, all project related accounting records and documents, and any other financial data within 15 days after receipt of notice from the SANITATION DISTRICT. Upon SANITATION DISTRICT's PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 13 of 19 request, the CONSULTANT shall submit exact duplicates of originals of all requested records to the SANITATION DISTRICT. If an audit is performed, CONSULTANT shall ensure that a qualified employee of the CONSULTANT will be available to assist SANITATION DISTRICT's auditor in obtaining all project related accounting records and documents, and any other financial data. 12. LEGAL RELATIONSHIP BETWEEN PARTIES The legal relationship between the parties hereto is that of an independent contractor and nothing herein shall be deemed to make CONSULTANT an employee of the SANITATION DISTRICT. 13. NOTICES All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of said notices in person or by depositing said notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid. Notices shall be mailed to the SANITATION DISTRICT at: ORANGE COUNTY SANITATION DISTRICT 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Attention: Ludwig R. Lapus, Contracts Administrator Copy: Richard Leon, Project Manager Notices shall be mailed to CONSULTANT at: AECOM Technical Services, Inc. 999 W. Town &Country Road Orange, CA 92868 Attention: Jagadish Gundarlahalli, PE All communication regarding the Scope of Work, will be addressed to the Project Manager. Direction from other SANITATION DISTRICT's staff must be approved in writing by the SANITATION DISTRICT's Project Manager prior to action from the CONSULTANT. 14. TERMINATION The SANITATION DISTRICT may terminate this Agreement at any time, without cause, upon giving thirty(30) days written notice to CONSULTANT. In the event of such termination, CONSULTANT shall be entitled to compensation for work performed on a prorated basis through and including the effective date of termination. CONSULTANT shall be permitted to terminate this Agreement upon thirty (30)days written notice only if CONSULTANT is not compensated for billed amounts in accordance with the provisions of this Agreement, when the same are due. Notice of termination shall be mailed to the SANITATION DISTRICT and/or CONSULTANT in accordance with Section 13- NOTICES. PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1 Page 14 of 19 15. DOCUMENTS AND STUDY MATERIALS The documents and study materials for this project shall become the property of the SANITATION DISTRICT upon the termination or completion of the work. CONSULTANT agrees to furnish to the SANITATION DISTRICT copies of all memoranda, correspondence, computation and study materials in its files pertaining to the work described in this Agreement, which is requested in writing by the SANITATION DISTRICT. 16. COMPLIANCE CONSULTANT certifies by the execution of this Agreement that it pays employees not less than the minimum wage as defined by law, and that it does not discriminate in its employment with regard to race, color, religion, sex or national origin; that it is in compliance with all federal, state and local directives and executive orders regarding non-discrimination in employment; and that it agrees to demonstrate positively and aggressively the principle of equal opportunity in employment. 17. AGREEMENT EXECUTION AUTHORIZATION Both the SANITATION DISTRICT and CONSULTANT do covenant that each individual executing this document by and on behalf of each party is a person duly authorized to execute agreements for that party. 18. DISPUTE RESOLUTION In the event of a dispute arising between the parties regarding performance or interpretation of this Agreement, the dispute shall be resolved by binding arbitration under the auspices of the Judicial Arbitration and Mediation Service ("JAMS"), or similar organization or entity conducting alternate dispute resolution services. 19. ATTORNEY'S FEES, COSTS AND NECESSARY DISBURSEMENTS If any action at law or in equity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which it may be entitled. 20. PROGRESS REPORTS Monthly progress reports shall be submitted for review by the tenth day of the following month and must include as a minimum: 1) current activities, 2)future activities, 3) potential items that are not included in the Scope of Work, 4) concerns and possible delays, 5) percentage of completion, and 6) budget status. 21. WARRANTY CONSULTANT shall perform its services in accordance with generally accepted industry and professional standards. If, within the 12-month period following completion of its services, the SANITATION DISTRICT informs CONSULTANT that any part of the PDSA PROJECT NO.Pi-129 ReAsed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1 Page 15 of 19 services fails to meet those standards, CONSULTANT shall, within the time prescribed by the SANITATION DISTRICT, take all such actions as are necessary to correct or complete the noted deficiency(ies). 22. INDEMNIFICATION To the fullest extent permitted by law, CONSULTANT shall indemnify, defend (at CONSULTANT's sole cost and expense and with legal counsel approved by the SANITATION DISTRICT, which approval shall not be unreasonably withheld), protect and hold harmless the SANITATION DISTRICT and all of SANITATION DISTRICT's officers, directors, employees, CONSULTANT's, and agents (collectively the "Indemnified Parties"), from and against any and all claims, damages, liabilities, causes of action, suits, arbitration awards, losses,judgments, fines, penalties, costs and expenses (including, without limitation, attorneys' fees, disbursements and court costs, and all other professional, expert or CONSULTANT's fees and Costs and the SANITATION DISTRICT's general and administrative expenses; individually, a "Claim"; collectively, "Claims")which may arise from or are in any manner related, directly or indirectly, to any work performed, or any operations, activities, or services provided by CONSULTANT in carrying out its obligations under this Agreement to the extent of the negligent, recklessness and/or willful misconduct of CONSULTANT, its principals, officers, agents, employees, CONSULTANT's suppliers, CONSULTANT, Subconsultants, subcontractors, and/or anyone employed directly or indirectly by any of them, regardless of any contributing negligence or strict liability of an Indemnified Party. Notwithstanding the foregoing, nothing herein shall be construed to require CONSULTANT to indemnify the Indemnified Parties from any Claim arising solely from: (A)the active negligence or willful misconduct of the Indemnified Parties; or (B)a natural disaster or other act of God, such as an earthquake; or (C)the independent action of a third party who is neither one of the Indemnified Parties nor the CONSULTANT, nor its principal, officer, agent, employee, nor CONSULTANT's supplier, CONSULTANT, Subconsultant, subcontractor, nor anyone employed directly or indirectly by any of them. Exceptions (A)through (B) above shall not apply, and CONSULTANT shall, to the fullest extent permitted by law, indemnify the Indemnified Parties, from Claims arising from more than one cause if any such cause taken alone would otherwise result in the obligation to indemnify hereunder. CONSULTANT's liability for indemnification hereunder is in addition to any liability CONSULTANT may have to the SANITATION DISTRICT for a breach by CONSULTANT of any of the provisions of this Agreement. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit CONSULTANT's indemnification obligation or other liability hereunder. The terms of this Agreement are contractual and the result of negotiation between the parties hereto. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654)that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 16 of 19 23. DUTY TO DEFEND The duty to defend hereunder is wholly independent of and separate from the duty to indemnify and such duty to defend shall exist regardless of any ultimate liability of CONSULTANT and shall be consistent with Civil Code Section 2782.8. Such defense obligation shall arise immediately upon presentation of a Claim by any person if, without regard to the merit of the Claim, such Claim could potentially result in an obligation to indemnify one or more Indemnified Parties, and upon written notice of such Claim being provided to CONSULTANT. Payment to CONSULTANT by any Indemnified Party or the payment or advance of defense costs by any Indemnified Party shall not be a condition precedent to enforcing such Indemnified Party's rights to indemnification hereunder. In the event a final judgment, arbitration, award, order, settlement, or other final resolution expressly determines that the claim did not arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, to any extent, then the DISTRICT will reimburse CONSULTANT for the reasonable costs of defending the Indemnified Parties against such claims. CONSULTANT's indemnification obligation hereunder shall survive the expiration or earlier termination of this Agreement until such time as action against the Indemnified Parties for such matter indemnified hereunder is fully and finally barred by the applicable statute of limitations. 24. CONSULTANT PERFORMANCE The CONSULTANT's performance shall be evaluated by the SANITATION DISTRICT. A copy of the evaluation shall be sent to the CONSULTANT for comment. The evaluation, together with the comments, shall be retained by the SANITATION DISTRICT and may be considered in future CONSULTANT selection processes. 25. COMPLIANCE WITH OCSD POLICIES AND PROCEDURES CONSULTANT shall be required to comply with all OCSD policies and procedures including the OCSD Safety Standards, as applicable, all of which may be amended from time to time. 26. CLOSEOUT When the SANITATION DISTRICT determines that all Work authorized under the Agreement is fully complete and that the SANITATION DISTRICT requires no further work from CONSULTANT, or the Agreement is otherwise terminated or expires in accordance with the terms of the Agreement, the SANITATION DISTRICT shall give the Consultant written notice that the Agreement will be closed out. CONSULTANT shall submit all outstanding billings, work submittals, deliverables, reports or similarly related documents as required under the Agreement within thirty (30)days of receipt of notice of Agreement closeout. Upon receipt of CONSULTANT's submittals, the SANITATION DISTRICT shall commence a closeout audit of the Agreement and will either: i. Give the CONSULTANT a final Agreement Acceptance: or PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT 1 Page 17 of 19 ii. Advise the CONSULTANT in writing of any outstanding item or items which must be furnished, completed, or corrected at the CONSULTANT's cost. CONSULTANT shall be required to provide adequate resources to fully support any administrative closeout efforts identified in this Agreement. Such support must be provided within the timeframe requested by the SANITATION DISTRICT. Notwithstanding the final Agreement Acceptance the CONSULTANT will not be relieved of its obligations hereunder, nor will the CONSULTANT be relieved of its obligations to complete any portions of the work, the non-completion of which were not disclosed to the SANITATION DISTRICT (regardless of whether such nondisclosures were fraudulent, negligent, or otherwise); and the CONSULTANT shall remain obligated under all those provisions of the Agreement which expressly or by their nature extend beyond and survive final Agreement Acceptance. Any failure by the SANITATION DISTRICT to reject the work or to reject the CONSULTANT's request for final Agreement Acceptance as set forth above shall not be deemed to be acceptance of the work by the SANITATION DISTRICT for any purpose nor imply acceptance of, or agreement with, the CONSULTANT's request for final Agreement Acceptance. 27. ENTIRE AGREEMENT This Agreement constitutes the entire understanding and agreement between the Parties and supersedes all previous negotiations between them pertaining to the subject matter thereof. PDSA PROJECT NO.Pi-129 Revised 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 18 of 19 IN WITNESS WHEREOF, this Agreement has been executed in the name of the SANITATION DISTRICT, by its officers thereunto duly authorized, and CONSULTANT as of the day and year first above written. AECOM TECHNICAL SERVICES, INC. By Date Printed Name &Title ORANGE COUNTY SANITATION DISTRICT By Gregory C. Sebourn, PLS Date Chair, Board of Directors By Kelly A. Lore Date Clerk of the Board By Marc Dubois Date Contracts, Purchasing and Materials Management Manager Attachments: Attachment"A"—Scope of Work Attachment"B"—Labor Hour Matrix Attachment"C"—Not Used Attachment"D"—Allowable Direct Costs Attachment"E"—Fee Proposal Attachment"F"— Not Used Attachment"G"— Not Used Attachment"H"—Not Used Attachment"I"—Cost Matrix and Summary Attachment"J"— Not Used Attachment"K"—Hourly Rate Schedule for Minor Subconsultants Attachment"L"—OCSD Safety Standards PDSA PROJECT NO.Pi-129 Remed 011017 RETURN ACTIVATED SLUDGE PIPING REPLACEMENT AT ACTIVATED SLUDGE PLANT I Page 19 of 19 OPERATIONS COMMITTEE Melting D310 TOBE.Of Dir. os/o3117 os/z4/17 AGENDA REPORT Item Item Number 3 9 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: OCEAN OUTFALL SYSTEM REHABILITATION, PROJECT NO. J-117 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Construction Services Agreement with Brown and Caldwell to provide construction support services for Interplant Effluent Pipeline Rehabilitation, Contract No. J-117A, for a total amount not to exceed $1,121,666; and B. Approve a contingency of$112,167 (10%). BACKGROUND Any treated effluent from Plant No. 1 not diverted to the Groundwater Replenishment System (GWRS) is conveyed, along with brine from GWRS, to the outfall system at Plant No. 2 through two interplant effluent pipelines; one 84-inches in diameter and the other 120-inches in diameter. The outfall system includes the Ocean Outfall Booster Station, the Effluent Pump Station Annex, associated structures, piping, one five-mile long ocean outfall, and a one-mile long outfall used only for maintenance and emergencies. The Ocean Outfall System Rehabilitation, Project No. J-117, will rehabilitate the two interplant effluent pipelines and associated valves and structures, rehabilitate the Ocean Outfall Booster Pump Station, construct a new Outfall Low Flow Pump Station, and replace the existing Plant Water Pump Station. The Low Flow Pump Station will accommodate much lower outfall flow rates than the existing outfall pump stations can accommodate, while the Plant Water Pump Station is needed for separation of reclaimable and non-reclaimable flows for the GWRS Final Expansion project. The project will be completed under two separate construction contracts: the Interplant Effluent Pipeline Rehabilitation, Contract No. J-117A, and the Outfall Low Flow Pump Station, Contract No. J-117B. The Interplant Effluent Pipeline Rehabilitation, Contract No. J-117A, will rehabilitate the two interplant effluent pipes and install a second fiber optic connection between Plant No. 1 and Plant No. 2 to ensure communications reliability. Associated work includes improvements at the Effluent Junction Box, located near Plant No. 1, to accommodate this and future construction projects. Page 1 of 3 The design of this work has been completed by Brown and Caldwell under a Professional Design Services Agreement. RELEVANT STANDARDS • CA Government Code 4526: Select the "best qualified firm" and "negotiate fair and equitable fees" • Support OCWD expansion of GWRS PROBLEM A detailed, comprehensive inspection conducted in the summer of 2016 revealed a number of deficiencies, including lining failure and corrosion inside the 84-inch and 120-inch interplant pipelines, a non-functioning 120-inch butterfly valve, and minor defects in outfall system structures. A portion of an existing electrical duct bank at Plant No. 2 runs through the location of the proposed GWRS Pump Station, which will be used to transfer secondary effluent to the Orange County Water District. A portion of this duct bank will be rerouted out of that area. The new duct bank will also serve the GWRS Pump Station and the Outfall Low Flow Pump Station. PROPOSED SOLUTION Rehabilitate the interplant effluent pipelines, improve access to the Effluent Junction Box at Plant No. 1, replace the non-functional 120-inch butterfly valve, and relocate the duct bank around the proposed GWRS Pump Station. This agenda report requests engineering support services needed during construction. The proposed services will be provided on an as-needed basis and include reviewing submittals, answering Contractor's requests for information, reviewing contract document modifications, construction change order review, participating in progress meetings, site visits, preparing record drawings, and assisting in the closeout of the project. TIMING CONCERNS The construction contract for the Interplant Effluent Pipeline Rehabilitation, Contract No. J-117A, is expected to be awarded at the May or June Board of Directors meeting. The requested engineering support services will be needed at the start of construction. RAMIFICATIONS OF NOT TAKING ACTION Engineering support services needed to facilitate and review construction activities will not be available. Page 2 of 3 PRIOR COMMITTEE/BOARD ACTIONS November 2016 - Approved a contingency increase of $2,372,305 (35%) to the Professional Design Services Agreement with Brown and Caldwell for Ocean Outfall System Rehabilitation, Project No. J-117, for a total contingency of$3,050,106 (45%). February 2015 - Awarded a Professional Design Services Agreement with Brown and Caldwell to provide engineering design services for the Ocean Outfall System Rehabilitation, Project No. J-117,for an amount not to exceed $6,778,015, and approved a contingency of$677,801 (10%). ADDITIONAL INFORMATION Brown and Caldwell has successfully furnished engineering services forthe design of this project and their support services during construction will provide continuity through the completion of the project. Staff negotiated with Brown and Caldwell for these support services in accordance with the Orange County Sanitation District's (Sanitation District) adopted policies and procedures. A review of the proposed price was conducted using estimated quantities of requests for information, submittals, meetings, site visits, change order review, and design revisions, as well as the level of effort for preparing record drawings. Based on this review, staff determined the negotiated fee to be fair and reasonable for these services. CEQA A Notice of Exemption for Ocean Outfall Rehabilitation, Project No. J-117, was filed and recorded with the County of Orange on April 30, 2014. This project is exempt from CEQA set forth in California Code of Regulations Section 15301 (Class 1), Section 15302 (Class 2), and Section 15303 (Class 3). 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 55), and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: Professional Construction Services Agreement VP:dm:gc Page 3 of 3 PROFESSIONAL CONSTRUCTION SERVICES AGREEMENT THIS AGREEMENT, is made and entered into to be effective the 240 day of May, 2017 by and between the ORANGE COUNTY SANITATION DISTRICT, hereinafter referred to as "SANITATION DISTRICT", and BROWN AND CALDWELL, for purposes of this Agreement hereinafter referred to as "CONSULTANT'. WITNESSETH: WHEREAS, the SANITATION DISTRICT desires to engage a CONSULTANT to provide Construction Support Services for Interplant Effluent Pipeline Rehabilitation, Contract No. J-117A part of Project No. J-117 Ocean Outfall System Rehabilitation; and, WHEREAS, CONSULTANT is qualified to provide the necessary services for Construction Support Services in connection with these requirements; and, WHEREAS, the SANITATION DISTRICT has adopted procedures in accordance with the SANITATION DISTRICT Board of Directors' Ordinance No. OCSD-47 Section 4.03(B)for the continuation of services and has proceeded in accordance with said procedures to perform this work; and, WHEREAS, at its regular meeting on May 24, 2017 the Board of Directors, by Minute Order, accepted the recommendation of the Operations Committee to approve this Agreement between the SANITATION DISTRICT and CONSULTANT. NOW, THEREFORE, in consideration of the promises and mutual benefits, which will result to the parties in carrying out the terms of this Agreement, it is mutually agreed as follows: 1. SCOPE OF WORK CONSULTANT agrees to furnish necessary professional and technical services to accomplish those project elements outlined in the Scope of Work attached hereto as "Attachment B", and by this reference made a part of this Agreement. A. The CONSULTANT shall be responsible for the professional quality, technical accuracy, completeness, and coordination of all design, drawings, specifications, and other services furnished by the CONSULTANT under this Agreement, including the work performed by its Subconsultants. Where approval by the SANITATION DISTRICT is indicated, it is understood to be conceptual approval only and does not relieve the CONSULTANT of responsibility for complying with all laws, codes, industry standards and liability for damages caused by errors, omissions, noncompliance with industry standards, and/or negligence on the part of the CONSULTANT or its Subconsultants. B. CONSULTANT is responsible for the quality of work prepared under this Agreement and shall perform its work in accordance with engineering standards in effect for clarity, uniformity, and completeness. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 1 of 18 C. In the event that work is not performed to the satisfaction of the SANITATION DISTRICT and does not conform to the requirements of this Agreement or any applicable industry standards, the CONSULTANT shall, without additional compensation, promptly correct or revise any errors or deficiencies in its designs, drawings, specifications, or other services within the timeframe specified by the Project Engineer/Project Manager. The SANITATION DISTRICT may charge to CONSULTANT all costs, expenses and damages associated with any such corrections or revisions. D. All CADD drawings, figures, and other work shall be produced by CONSULTANTS and Subconsultants using the SANITATION DISTRICT standard software. Conversion of CADD work from any other non-standard CADD format to the SANITATION DISTRICT format shall not be acceptable in lieu of this requirement. Electronic files shall be subject to an acceptance period of thirty (30)calendar days during which the SANITATION DISTRICT shall perform appropriate acceptance tests. CONSULTANT shall correct any discrepancies or errors detected and reported within the acceptance period at no additional cost to the SANITATION DISTRICT. E. All professional services performed by the CONSULTANT, including but not limited to all drafts, data, correspondence, proposals, reports, and estimates compiled or composed by the CONSULTANT, pursuant to this Agreement, are for the sole use of the SANITATION DISTRICT, its agents and employees. Neither the documents nor their contents shall be released to any third party without the prior written consent of the SANITATION DISTRICT. This provision does not apply to information that (a)was publicly known, or otherwise known to the CONSULTANT, at the time that it was disclosed to the CONSULTANT by the SANITATION DISTRICT, (b)subsequently becomes publicly known to the CONSULTANT other than through disclosure by the SANITATION DISTRICT. 2. COMPENSATION Total compensation shall be paid to CONSULTANT for services in accordance with the following provisions: A. Total Compensation Total compensation shall be in an amount not to exceed One Million One Hundred Twenty-One Thousand Six Hundred Sixty-Six Dollars ($ 1,121,666). Total compensation to CONSULTANT including burdened labor(salaries plus benefits), overhead, profit, direct costs, and Subconsultant(s)fees and costs shall not exceed the sum set forth in Attachment"C" - Fee Proposal Form and Cost Matrix Summary. B. Labor As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall pay to CONSULTANT a sum equal to the burdened salaries (salaries plus benefits)actually paid by CONSULTANT PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 2 of 18 charged on an hourly-rate basis to this project and paid to the personnel of CONSULTANT. Upon request of the SANITATION DISTRICT, CONSULTANT shall provide the SANITATION DISTRICT with certified payroll records of all employees' work that is charged to this project. C. Overhead As a portion of the total compensation to be paid to CONSULTANT, the SANITATION DISTRICT shall compensate CONSULTANT and Subconsultants for overhead at the rate equal to the percentage of burdened labor as specified in Attachment"C'- Fee Proposal Form and Cost Matrix Summary. D. Profit Profit for CONSULTANT and Subconsultants shall be a percentage of consulting services fees (Burdened Labor and Overhead). When the consulting or subconsulting services amount is $250,000 or less, the maximum Profit shall be 10%. Between $250,000 and $2,500,000, the maximum Profit shall be limited by a straight declining percentage between 10% and 5%. For consulting or subconsulting services fees with a value greater than $2,500,000, the maximum Profit shall be 5%. Addenda shall be governed by the same maximum Profit percentage after adding consulting services fees. As a portion of the total compensation to be paid to CONSULTANT and Subconsultants, the SANITATION DISTRICT shall pay profit for all services rendered by CONSULTANT and Subconsultants for this project according to Attachment"C'- Fee Proposal Form and Cost Matrix Summary. E. Subconsultants For any Subconsultant whose fees for services are greater than or equal to $100,000 (excluding out-of-pocket costs), CONSULTANT shall pay to Subconsultant total compensation in accordance with the Subconsultant amount specified in Attachment"C'- Fee Proposal Form and Cost Matrix Summary. For any Subconsultant whose fees for services are less than $100,000, CONSULTANT may pay to Subconsultant total compensation on an hourly-rate basis per the attached hourly rate Schedule and as specified in the Scope of Work. The SANITATION DISTRICT shall pay to CONSULTANT the actual costs of Subconsultant fees and charges in an amount not to exceed the sum set forth in Attachment"C" - Fee Proposal Form and Cost Matrix Summary. F. Direct Costs The SANITATION DISTRICT shall pay to CONSULTANT and Subconsultants the actual costs of permits and associated fees, travel and licenses for an amount not to exceed the sum set forth in Attachment"C'- Fee Proposal Form and Cost Matrix Summary. The SANITATION DISTRICT shall also pay to CONSULTANT actual costs for equipment rentals, leases or purchases with prior approval of the SANITATION DISTRICT. Upon request, CONSULTANT shall PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 3 of 18 provide to the SANITATION DISTRICT receipts and other documentary records to support CONSULTANT's request for reimbursement of these amounts, see Attachment"H"—Allowable Direct Costs. All incidental expenses shall be included in overhead pursuant to Section 2- COMPENSATION above. G. Other Direct Costs Other Direct Costs incurred by CONSULTANT and its Contractor due to modifications in scope of work resulting from field investigations and field work required by Contract. These items may include special equipment, test equipment and tooling and other materials and services not previously identified. Refer to Attachment"H"Allowable Direct Costs for payment information. H. Reimbursable Direct Costs The SANITATION DISTRICT will reimburse the CONSULTANT for reasonable travel and business expenses as described in this section and further described in Attachment"H"-Allowable Direct Costs to this Agreement. The reimbursement of the above mentioned expenses will be based on an "accountable plan" as considered by Internal Revenue Service (IRS). The plan includes a combination of reimbursements based upon receipts and a "per diem" component approved by IRS. The most recent schedule of the per diem rates utilized by the SANITATION DISTRICT can be found on the U.S. General Service Administration website at http://www.gsa.gov/portal/category/l 04711#. The CONSULTANT shall be responsible for the most economical and practical means of management of reimbursable costs inclusive but not limited to travel, lodging and meals arrangements. The SANITATION DISTRICT shall apply the most economic and practical method of reimbursement which may include reimbursements based upon receipts and/or"per diem" as deemed the most practical. CONSULTANT shall be responsible for returning to the SANITATION DISTRICT any excess reimbursements after the reimbursement has been paid by the SANITATION DISTRICT. Travel and travel arrangements—Any travel involving airfare, overnight stays or multiple day attendance must be approved by the SANITATION DISTRICT in advance. Local Travel is considered travel by the CONSULTANT within the SANITATION DISTRICT general geographical area which includes Orange, Los Angeles, Ventura, San Bernardino, Riverside, San Diego, Imperial and Kern Counties. Automobile mileage is reimbursable if CONSULTANT is required to utilize personal vehicle for local travel. Lodging—Overnight stays will not be approved by the SANITATION DISTRICT for local travel. However, under certain circumstances overnight stay may be allowed at the discretion of the SANITATION DISTRICT based on reasonableness of meeting schedules and the amount of time required for travel by the PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 4 of 18 CONSULTANT. Such determination will be made on a rase-by-case basis and at the discretion of the SANITATION DISTRICT. Travel Meals— Per-diem rates as approved by IRS shall be utilized for travel meals reimbursements. Per diem rates shall be applied to meals that are appropriate for travel times. Receipts are not required for the approved meals. Additional details related to the reimbursement of the allowable direct costs are provided in the Attachment"H"-Allowable Direct Costs of this Agreement. I. Limitation of Costs If, at any time, CONSULTANT estimates the cost of performing the services described in CONSULTANT's Proposal will exceed the not-to-exceed amount of the Agreement, including approved additional compensation, CONSULTANT shall notify the SANITATION DISTRICT immediately, and in writing. This written notice shall indicate the additional amount necessary to complete the services. Any cost incurred in excess of the approved not-to-exceed amount, without the express written consent of the SANITATION DISTRICT's authorized representative shall be at CONSULTANT's own risk. This written notice shall be provided separately from, and in addition to any notification requirements contained in the CONSULTANT's invoice and monthly progress report. Failure to notify the SANITATION DISTRICT that the services cannot be completed within the authorized not-to-exceed amount is a material breach of this Agreement. 3. REALLOCATION OF TOTAL COMPENSATION The SANITATION DISTRICT, by its Director of Engineering, shall have the right to approve a reallocation of the incremental amounts constituting the total compensation, provided that the total compensation is not increased. 4. PAYMENT A. Monthly Invoice: CONSULTANT shall include in its monthly invoice, a detailed breakdown of costs associated with the performance of any corrections or revisions of the work for that invoicing period. CONSULTANT shall allocate costs in the same manner as it would for payment requests as described in this Section of the Agreement. CONSULTANT shall warrant and certify the accuracy of these costs and understand that submitted costs are subject to Section 11 -AUDIT PROVISIONS. B. CONSULTANT may submit monthly or periodic statements requesting payment for those items included in Section 2- COMPENSATION hereof in the format as required by the SANITATION DISTRICT. Such requests shall be based upon the amount and value of the work and services performed by CONSULTANT under this Agreement and shall be prepared by CONSULTANT and accompanied by such supporting data, including a detailed breakdown of all costs incurred and project element work performed during the period covered by the statement, as may be required by the SANITATION DISTRICT. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 5 of 18 Upon approval of such payment request by the SANITATION DISTRICT, payment shall be made to CONSULTANT as soon as practicable of one hundred percent (100%)of the invoiced amount on a per-project-element basis. If the SANITATION DISTRICT determines that the work under this Agreement or any specified project element hereunder, is incomplete and that the amount of payment is in excess of: i. The amount considered by the SANITATION DISTRICT's Director of Engineering to be adequate for the protection of the SANITATION DISTRICT; or ii. The percentage of the work accomplished for each project element. He may, at his discretion, retain an amount equal to that which insures that the total amount paid to that date does not exceed the percentage of the completed work for each project element or the project in its entirety. C. CONSULTANT may submit periodic payment requests for each 30-day period of this Agreement for the profit as set forth in Section 2 -COMPENSATION above. Said profit payment request shall be proportionate to the work actually accomplished to date on a per-project-element basis. In the event the SANITATION DISTRICT's Director of Engineering determines that no satisfactory progress has been made since the prior payment, or in the event of a delay in the work progress for any reason, the SANITATION DISTRICT shall have the right to withhold any scheduled proportionate profit payment. D. Upon satisfactory completion by CONSULTANT of the work called for under the terms of this Agreement, and upon acceptance of such work by the SANITATION DISTRICT, CONSULTANT will be paid the unpaid balance of any money due for such work, including any retained percentages relating to this portion of the work. E. Upon satisfactory completion of the work performed hereunder and prior to final payment under this Agreement for such work, or prior settlement upon termination of this Agreement, and as a condition precedent thereto, CONSULTANT shall execute and deliver to the SANITATION DISTRICT a release of all claims against the SANITATION DISTRICT arising under or by virtue of this Agreement other than such claims, if any, as may be specifically exempted by CONSULTANT from the operation of the release in stated amounts to be set forth therein. F. Pursuant to the California False Claims Act (Government Code Sections 12650- 12655), any CONSULTANT that knowingly submits a false claim to the SANITATION DISTRICT for compensation under the terms of this Agreement may be held liable for treble damages and up to a ten thousand dollars ($10,000) civil penalty for each false claim submitted. This Section shall also be binding on all Subconsultants. A CONSULTANT or Subconsultant shall be deemed to have submitted a false claim when the CONSULTANT or Subconsultant: a) knowingly presents or causes to be presented to an officer or employee of the SANITATION DISTRICT PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 6 of 18 a false claim or request for payment or approval; b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the SANITATION DISTRICT; c) conspires to defraud the SANITATION DISTRICT by getting a false claim allowed or paid by the SANITATION DISTRICT; d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to the SANITATION DISTRICT; or e) is a beneficiary of an inadvertent submission of a false claim to the SANITATION DISTRICT, and fails to disclose the false claim to the SANITATION DISTRICT within a reasonable time after discovery of the false claim. S. CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS (DIR) REGISTRATION AND RECORD OF WAGES A. To the extent CONSULTANT's employees and/or Subconsultants who will perform Work during the design and preconstruction phases of a construction contract for which Prevailing Wage Determinations have been issued by the DIR and as more specifically defined under Labor Code Section 1720 at sec, CONSULTANT and Subconsultants shall comply with the registration requirements of Labor Code Section 1725.5. Pursuant to Labor Code Section 1771.4, the Work is subject to compliance monitoring and enforcement by the DIR. B. The CONSULTANT and Subconsultants shall maintain accurate payroll records and shall comply with all the provisions of Labor Code Section 1776, and shall submit payroll records to the Labor Commissioner pursuant to Labor Code Section 1771.4(a) (3). Penalties for non-compliance with the requirements of Section 1776 may be deducted from progress payments per Section 1776. C. Pursuant to Labor Code Section 1776, the CONSULTANT and Subconsultants shall furnish a copy of all certified payroll records to the SANITATION DISTRICT and/or general public upon request, provided the public request is made through the SANITATION DISTRICT, the Division of Apprenticeship Standards or the Division of Labor Enforcement of the Department of Industrial Relations. D. The CONSULTANT and Subconsultants shall comply with the job site notices posting requirements established by the Labor Commissioner per Title 8, California Code of Regulations Section 16461(e). 6. DOCUMENT OWNERSHIP—SUBSEQUENT CHANGES TO PLANS AND SPECIFICATIONS A. Ownership of Documents for the Professional Services performed. All documents, including but not limited to, original plans, studies, sketches, drawings, computer printouts and disk files, and specifications prepared in connection with or related to the Scope of Work or Professional Services, shall be the property of the SANITATION DISTRICT. The SANITATION DISTRICT's ownership of these documents includes use of, reproduction or reuse of and all incidental rights, whether or not the work for which they were prepared has been performed. The SANITATION DISTRICT ownership entitlement arises upon payment or any partial payment for work performed and includes ownership of PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 7 of 18 any and all work product completed prior to that payment. This Section shall apply whether the CONSULTANT's Professional Services are terminated: a) by the completion of the Agreement, or b) in accordance with other provisions of this Agreement. Notwithstanding any other provision of this paragraph or Agreement, the CONSULTANT shall have the right to make copies of all such plans, studies, sketches, drawings, computer printouts and disk files, and specifications. B. CONSULTANT shall not be responsible for damage caused by subsequent changes to or uses of the plans or specifications, where the subsequent changes or uses are not authorized or approved by CONSULTANT, provided that the service rendered by CONSULTANT was not a proximate cause of the damage. 7. INSURANCE A. General i. Insurance shall be issued and underwritten by insurance companies acceptable to the SANITATION DISTRICT. ii. Insurers must have an "A-" Policyholder's Rating, or better, and Financial Rating of at least Class Vill, or better, in accordance with the most current A.M. Best's Guide Rating. However, the SANITATION DISTRICT will accept State Compensation Insurance Fund, for the required policy of Worker's Compensation Insurance subject to the SANITATION DISTRICT's option to require a change in insurer in the event the State Fund financial rating is decreased below"B". Further, the SANITATION DISTRICT will require CONSULTANT to substitute any insurer whose rating drops below the levels herein specified. Said substitution shall occur within twenty (20) days of written notice to CONSULTANT, by the SANITATION DISTRICT or its agent. iii. Coverage shall be in effect prior to the commencement of any work under this Agreement. B. General Liability The CONSULTANT shall maintain during the life of this Agreement, including the period of warranty, Commercial General Liability Insurance written on an occurrence basis providing the following minimum limits of liability coverage: Two Million Dollars ($2,000,000) per occurrence with Two Million Dollars ($2,000,000)aggregate. Said insurance shall include coverage for the following hazards: Premises-Operations, blanket contractual liability (for this Agreement), products liability/completed operations (including any product manufactured or assembled), broad form property damage, blanket contractual liability, independent contractors liability, personal and advertising injury, mobile equipment, vicarious liability, and cross liability and severability of interest clauses. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement(s). If requested by SANITATION DISTRICT and applicable, XCU coverage (Explosion, Collapse and Underground) and Riggers/On Hook Liability must be included in the General Liability policy and coverage must be reflected on the submitted Certificate of Insurance. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 8 of 18 C. Umbrella Excess Liability The minimum limits of general liability and Automotive Liability Insurance required, as set forth herein, shall be provided for through either a single policy of primary insurance or a combination of policies of primary and umbrella excess coverage. Umbrella excess liability coverage shall be issued with limits of liability which, when combined with the primary insurance, will equal the minimum limits for general liability and automotive liability. D. AutomotiveNehicle Liability Insurance The CONSULTANT shall maintain a policy of Automotive Liability Insurance on a comprehensive form covering all owned, non-owned, and hired automobiles, trucks, and other vehicles providing the following minimum limits of liability coverage: Combined single limit of One Million Dollars ($1,000,000) or alternatively, One Million Dollars ($1,000,000) per person for bodily injury and One Million Dollars ($1,000,000) per accident for property damage. A statement on an insurance certificate will not be accepted in lieu of the actual additional insured endorsement. E. Worker's Compensation Insurance The CONSULTANT shall provide such Workers' Compensation Insurance as required by the Labor Code of the State of California in the amount of the statutory limit, including Employer's Liability Insurance with a minimum limit of One Million Dollars ($1,000,000) per occurrence. Such Worker's Compensation Insurance shall be endorsed to provide for a waiver of subrogation in favor of the SANITATION DISTRICT. A statement on an insurance certificate will not be accepted in lieu of the actual endorsements unless the insurance carrier is State of California Insurance Fund and the identifier"SCIF" and endorsement numbers 2570 and 2065 are referenced on the certificate of insurance. If an exposure to Jones Act liability may exist, the insurance required herein shall include coverage for Jones Act claims. F. Errors and Omissions/Professional Liability CONSULTANT shall maintain in full force and effect, throughout the term of this Agreement, standard industry form professional negligence errors and omissions insurance coverage in an amount of not less than Five Million Dollars ($5,000,000)with limits in accordance with the provisions of this Paragraph. If the policy of insurance is written on a "claims made' basis, said policy shall be continued in full force and effect at all times during the term of this Agreement, and for a period of five (5) years from the date of the completion of the services hereunder. In the event of termination of said policy during this period, CONSULTANT shall obtain continuing insurance coverage for the prior ads or omissions of CONSULTANT during the course of performing services under the term of this Agreement. Said coverage shall be evidenced by either a new policy evidencing no gap in coverage or by separate extended "tail' coverage with the present or new carrier. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 9 of 18 In the event the present policy of insurance is written on an "occurrence" basis, said policy shall be continued in full force and effect during the term of this Agreement or until completion of the services provided for in this Agreement, whichever is later. In the event of termination of said policy during this period, new coverage shall be obtained for the required period to insure for the prior acts of CONSULTANT during the course of performing services under the term of this Agreement. CONSULTANT shall provide to the SANITATION DISTRICT a certificate of insurance in a form acceptable to the SANITATION DISTRICT indicating the deductible or self-retention amounts and the expiration date of said policy, and shall provide renewal certificates not less than ten (10)days prior to the expiration of each policy term. G. Proof of Coverage The CONSULTANT shall furnish the SANITATION DISTRICT with original certificates and amendatory endorsements effecting coverage. Said policies and endorsements shall conform to the requirements herein stated. All certificates and endorsements are to be received and approved by the SANITATION DISTRICT before work commences. The SANITATION DISTRICT reserves the right to require complete, certified copies of all required insurance policies, including endorsements, effecting the coverage required, at any time. The following are approved forms that must be submitted as proof of coverage: • Certificate of Insurance ACORD Form 25 (512010) or equivalent. • Additional Insurance (ISO Form) CG2010 11 85 or (General Liability) The combination of(ISO Forms) CG 2010 10 01 and CG 2037 10 01 All other Additional Insured endorsements must be submitted for approval by the SANITATION DISTRICT, and the SANITATION DISTRICT may reject alternatives that provide different or less coverage to the SANITATION DISTRICT. • Additional Insured Submit endorsement provided by carrier for the (Auto Liability) SANITATION DISTRICT approval. • Waiver of Subrogation State Compensation Insurance Fund Endorsement No. 2570 or equivalent. • Cancellation Notice State Compensation Insurance Fund Endorsement No. 2065 or equivalent. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 10 of 18 H. Cancellation Notice Each insurance policy required herein shall be endorsed to state that coverage shall not be cancelled by either party, except after thirty (30)days' prior written notice. The Cancellation Section of ACORD Form 25 (5/2010) shall state the required thirty(30) days' written notification. The policy shall not terminate, nor shall it be cancelled, nor the coverage reduced until thirty(30) days after written notice is given to the SANITATION DISTRICT except for nonpayment of premium, which shall require not less than ten (10) days written notice to the SANITATION DISTRICT. Should there be changes in coverage or an increase in deductible or SIR amounts, the CONSULTANT and its insurance broker/agent shall send to the SANITATION DISTRICT a certified letter which includes a description of the changes in coverage and/or any increase in deductible or SIR amounts. The certified letter must be sent to the attention of Risk Management, and shall be received by the SANITATION DISTRICT not less than thirty (30) days prior to the effective date of the change(s) if the change would reduce coverage or increase deductibles or SIR amounts or otherwise reduce or limit the scope of insurance coverage provided to the SANITATION DISTRICT. I. Primary Insurance All liability policies shall contain a Primary and Non Contributory Clause. Any other insurance maintained by the SANITATION DISTRICT shall be excess and not contributing with the insurance provided by CONSULTANT. J. Separation of Insured All liability policies shall contain a "Separation of Insureds" clause. K. Non-Limiting (if applicable) Nothing in this document shall be construed as limiting in any way, nor shall it limit the indemnification provision contained in this Agreement, or the extent to which CONSULTANT may be held responsible for payment of damages to persons or property. L. Deductibles and Self-Insured Retentions Any deductible and/or self-insured retention must be declared to the SANITATION DISTRICT on the Certificate of Insurance. All deductibles and/or self-insured retentions require approval by the SANITATION DISTRICT. At the option of the SANITATION DISTRICT, either: the insurer shall reduce or eliminate such deductible or self-insured retention as respects the SANITATION DISTRICT; or the CONSULTANT shall provide a financial guarantee satisfactory to the SANITATION DISTRICT guaranteeing payment of losses and related investigations, claim administration and defense expenses. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 11 of 18 M. Defense Costs Liability policies except Errors and Omissions/Professional Liability shall have a provision that defense costs for all insureds and additional insureds are paid in addition to and do not deplete any policy limits. N. Subconsultants The CONSULTANT shall be responsible to establish insurance requirements for any Subconsultant hired by the CONSULTANT. The insurance shall be in amounts and types reasonably sufficient to deal with the risk of loss involving the Subconsultant's operations and work. O. Limits Are Minimums If the CONSULTANT maintains higher limits than any minimums shown above, then SANITATION DISTRICT requires and shall be entitled to coverage for the higher limits maintained by CONSULTANT. Nothing in this section, however, requires CONSULTANT in the absence of litigation to reveal its Errors and Omissions/Professional Liability limits beyond that required above in other paragraphs. 8. SCOPE CHANGES In the event of a change in the Scope of Work, requested by SANITATION DISTRICT, the parties hereto shall execute an amendment to this Agreement setting forth with particularity all terms of the new Agreement, including but not limited to any additional CONSULTANT's fees. 9. PROJECT TEAM AND SUBCONSULTANTS CONSULTANT shall provide to SANITATION DISTRICT, prior to execution of this Agreement, the names and full description of all Subconsultants and CONSULTANT's project team members anticipated to be used on this project by CONSULTANT. CONSULTANT shall include a description of the scope of work to be done by each Subconsultant and each CONSULTANT's project team member. CONSULTANT shall include the respective compensation amounts for CONSULTANT and each Subconsultant on a per-project-element basis, broken down as indicated in Section 2- COMPENSATION. There shall be no substitution of the listed Subconsultants and CONSULTANT's project team members without prior written approval by the SANITATION DISTRICT. 10. ENGINEERING REGISTRATION The CONSULTANT's personnel are comprised of registered engineers and a staff of specialists and draftsmen in each department. The firm itself is not a registered engineer but represents and agrees that wherever in the performance of this Agreement requires the services of a registered engineer, such services hereunder will be performed under the direct supervision of registered engineers. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 12 of 18 11. AUDIT PROVISIONS A. SANITATION DISTRICT retains the reasonable right to access, review, examine, and audit, any and all books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify that the CONSULTANT is in compliance with all requirements under this Agreement. The CONSULTANT shall include the SANITATION DISTRICT's right as described above, in any and all of their subcontracts, and shall ensure that these rights are binding upon all Subconsultants. B. SANITATION DISTRICT retains the right to examine CONSULTANT's books, records, documents and any other evidence of procedures and practices that the SANITATION DISTRICT determines are necessary to discover and verify all direct and indirect costs, of whatever nature, which are claimed to have been incurred, or anticipated to be incurred or to ensure CONSULTANT's compliance with all requirements under this Agreement during the term of this Agreement and for a period of three (3)years after its termination. C. CONSULTANT shall maintain complete and accurate records in accordance with generally accepted industry standard practices and the SANITATION DISTRICT's policy. The CONSULTANT shall make available to the SANITATION DISTRICT for review and audit, all project related accounting records and documents, and any other financial data within 15 days after receipt of notice from the SANITATION DISTRICT. Upon SANITATION DISTRICT's request, the CONSULTANT shall submit exact duplicates of originals of all requested records to the SANITATION DISTRICT. If an audit is performed, CONSULTANT shall ensure that a qualified employee of the CONSULTANT will be available to assist SANITATION DISTRICT's auditor in obtaining all project related accounting records and documents, and any other financial data. 12. LEGAL RELATIONSHIP BETWEEN PARTIES The legal relationship between the parties hereto is that of an independent contractor and nothing herein shall be deemed to make CONSULTANT an employee of the SANITATION DISTRICT. 13. NOTICES All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of said notices in person or by depositing said notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid. Notices shall be mailed to the SANITATION DISTRICT at: ORANGE COUNTY SANITATION DISTRICT 10844 Ellis Avenue Fountain Valley, CA 92708-7018 Attention: Natasha Dubrovski, Principal Contracts Administrator Copy: Victoria Pilko, Project Manager PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 13 of 18 Notices shall be mailed to CONSULTANT at: BROWN AND CALDWELL 18200 Von Karmen Avenue Suite 400 Irvine, CA 92612 Attention: Cherylle Barrido, PE, PMP Copy: Daniel A. Bunce, PE, PMP All communication regarding the Scope of Work, will be addressed to the Project Manager. Direction from other SANITATION DISTRICT's staff must be approved in writing by the SANITATION DISTRICT's Project Manager prior to action from the CONSULTANT. 14. TERMINATION The SANITATION DISTRICT may terminate this Agreement at any time, without cause, upon giving thirty(30) days written notice to CONSULTANT. In the event of such termination, CONSULTANT shall be entitled to compensation for work performed on a prorated basis through and including the effective date of termination. CONSULTANT shall be permitted to terminate this Agreement upon thirty (30)days written notice only if CONSULTANT is not compensated for billed amounts in accordance with the provisions of this Agreement, when the same are due. Notice of termination shall be mailed to the SANITATION DISTRICT and/or CONSULTANT in accordance with Section 13- NOTICES. 15. DOCUMENTS AND STUDY MATERIALS The documents and study materials for this project shall become the property of the SANITATION DISTRICT upon the termination or completion of the work. CONSULTANT agrees to furnish to the SANITATION DISTRICT copies of all memoranda, correspondence, computation and study materials in its files pertaining to the work described in this Agreement, which is requested in writing by the SANITATION DISTRICT. 16. COMPLIANCE CONSULTANT certifies by the execution of this Agreement that it pays employees not less than the minimum wage as defined by law, and that it does not discriminate in its employment with regard to race, color, religion, sex or national origin; that it is in compliance with all federal, state and local directives and executive orders regarding non-discrimination in employment; and that it agrees to demonstrate positively and aggressively the principle of equal opportunity in employment. 17. AGREEMENT EXECUTION AUTHORIZATION Both the SANITATION DISTRICT and CONSULTANT do covenant that each individual executing this document by and on behalf of each party is a person duly authorized to execute agreements for that party. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 14 of 18 18. DISPUTE RESOLUTION In the event of a dispute arising between the parties regarding performance or interpretation of this Agreement, the dispute shall be resolved by binding arbitration under the auspices of the Judicial Arbitration and Mediation Service ("JAMS"), or similar organization or entity conducting alternate dispute resolution services. 19. ATTORNEY'S FEES, COSTS AND NECESSARY DISBURSEMENTS If any action at law or in equity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which it may be entitled. 20. PROGRESS REPORTS Monthly progress reports shall be submitted for review by the tenth day of the following month and must include as a minimum: 1) current activities, 2)future activities, 3) potential items that are not included in the Scope of Work, 4) concerns and possible delays, 5) percentage of completion, and 6) budget status. 21. WARRANTY CONSULTANT shall perform its services in accordance with generally accepted industry and professional standards. If, within the 12-month period following completion of its services, the SANITATION DISTRICT informs CONSULTANT that any part of the services fails to meet those standards, CONSULTANT shall, within the time prescribed by the SANITATION DISTRICT, take all such actions as are necessary to correct or complete the noted deficiency(ies). 22. INDEMNIFICATION To the fullest extent permitted by law, CONSULTANT shall indemnify, defend (at CONSULTANT's sole cost and expense and with legal counsel approved by the SANITATION DISTRICT, which approval shall not be unreasonably withheld), protect and hold harmless the SANITATION DISTRICT and all of SANITATION DISTRICT's officers, directors, employees, consultants, and agents (collectively the"Indemnified Parties"), from and against any and all claims, damages, liabilities, causes of action, suits, arbitration awards, losses,judgments, fines, penalties, costs and expenses including without limitation, attorneys'fees, disbursements and court costs, and all other professional, expert or consultants fees and costs and the SANITATION DISTRICT's general and administrative expenses (individually, a "Claim", or collectively, "Claims") which may arise from or are in any manner related, directly or indirectly, to any work performed, or any operations, activities, or services provided by CONSULTANT in carrying out its obligations under this Agreement to the extent of the negligent, recklessness and/or willful misconduct of CONSULTANT, its principals, officers, agents, employees, CONSULTANT's suppliers, consultants, subconsultants, subcontractors, and/or anyone employed directly or indirectly by any of them, regardless of any contributing negligence or strict liability of an Indemnified Party. Notwithstanding the foregoing, nothing herein shall be construed to require CONSULTANT to indemnify the PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 15 of 18 Indemnified Parties from any Claim arising from: (A)the sole or active negligence or willful misconduct of the Indemnified Parties; or (B)a natural disaster or other act of God, such as an earthquake; or (C)the independent action of a third party who is neither one of the Indemnified Parties nor the CONSULTANT, nor its principal, officer, agent, employee, nor CONSULTANT's supplier, consultant, subconsultant, subcontractor, nor anyone employed directly or indirectly by any of them. Exceptions (A)through (B) above shall not apply, and CONSULTANT shall, to the fullest extent permitted by law, indemnify the Indemnified Parties, from Claims arising from more than one cause if any such cause taken alone would otherwise result in the obligation to indemnify hereunder. CONSULTANT's liability for indemnification hereunder is in addition to any liability CONSULTANT may have to the SANITATION DISTRICT for a breach by CONSULTANT of any of the provisions of this Agreement. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit CONSULTANT's indemnification obligation or other liability hereunder. The terms of this Agreement are contractual and the result of negotiation between the parties hereto. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654)that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. 23. DUTY TO DEFEND The duty to defend hereunder is wholly independent of and separate from the duty to indemnity and such duty to defend shall exist regardless of any ultimate liability of CONSULTANT and shall be consistent with Civil Code Section 2782.8. Such defense obligation shall arise immediately upon presentation of a Claim by any person if, without regard to the merit of the Claim, such Claim could potentially result in an obligation to indemnify one or more Indemnified Parties, and upon written notice of such Claim being provided to CONSULTANT. Payment to CONSULTANT by any Indemnified Party or the payment or advance of defense costs by any Indemnified Party shall not be a condition precedent to enforcing such Indemnified Party's rights to indemnification hereunder. In the event a final judgment, arbitration, award, order, settlement, or other final resolution expressly determines that the claim did not arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT, to any extent, then the SANITATION DISTRICT will reimburse CONSULTANT for the reasonable costs of defending the Indemnified Parties against such claims. CONSULTANT's indemnification obligation hereunder shall survive the expiration or earlier termination of this Agreement until such time as action against the Indemnified Parties for such matter indemnified hereunder is fully and finally barred by the applicable statute of limitations. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 16 of 18 24. CONSULTANT PERFORMANCE The CONSULTANT's performance shall be evaluated by the SANITATION DISTRICT. A copy of the evaluation shall be sent to the CONSULTANT for comment. The evaluation, together with the comments, shall be retained by the SANITATION DISTRICT and may be considered in future CONSULTANT selection processes. 25. CLOSEOUT When the SANITATION DISTRICT determines that all Work authorized under the Agreement is fully complete and that the SANITATION DISTRICT requires no further work from CONSULTANT, or the Agreement is otherwise terminated or expires in accordance with the terms of the Agreement, the SANITATION DISTRICT shall give the Consultant written notice that the Agreement will be closed out. CONSULTANT shall submit all outstanding billings, work submittals, deliverables, reports or similarly related documents as required under the Agreement within thirty (30)days of receipt of notice of Agreement closeout. Upon receipt of CONSULTANT's submittals, the SANITATION DISTRICT shall commence a closeout audit of the Agreement and will either: i. Give the CONSULTANT a final Agreement Acceptance: or ii. Advise the CONSULTANT in writing of any outstanding item or items which must be furnished, completed, or corrected at the CONSULTANT's cost. CONSULTANT shall be required to provide adequate resources to fully support any administrative closeout efforts identified in this Agreement. Such support must be provided within the timeframe requested by the SANITATION DISTRICT. Notwithstanding the final Agreement Acceptance the CONSULTANT will not be relieved of its obligations hereunder, nor will the CONSULTANT be relieved of its obligations to complete any portions of the work, the non-completion of which were not disclosed to the SANITATION DISTRICT (regardless of whether such nondisclosures were fraudulent, negligent, or otherwise); and the CONSULTANT shall remain obligated under all those provisions of the Agreement which expressly or by their nature extend beyond and survive final Agreement Acceptance. Any failure by the SANITATION DISTRICT to reject the work or to reject the CONSULTANT's request for final Agreement Acceptance as set forth above shall not be deemed to be acceptance of the work by the SANITATION DISTRICT for any purpose nor imply acceptance of, or agreement with, the CONSULTANT's request for final Agreement Acceptance. 26. ENTIRE AGREEMENT This Agreement constitutes the entire understanding and agreement between the Parties and supersedes all previous negotiations between them pertaining to the subject matter thereof. PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 17 of 18 IN WITNESS WHEREOF, this Agreement has been executed in the name of the SANITATION DISTRICT, by its officers thereunto duly authorized, and CONSULTANT as of the day and year first above written. CONSULTANT: BROWN AND CALDWELL By Date Printed Name &Title ORANGE COUNTY SANITATION DISTRICT By Gregory C. Sebourn, PLS Date Chair, Board of Directors By Kelly A. Lore Date Clerk of the Board By Marc Dubois Date Contracts, Purchasing and Materials Management Manager Attachments: Attachment"A" Project Team Attachment'B" Scope of Work and Assumptions Attachment"C' Fee Proposal Form and Cost Matrix Summary Attachment"D" Subconsultant Proposal Attachment"E" Hourly Rate Schedule for Minor Subconsultants Attachment"F" Not Attached Attachment"G" Submittal List Attachment"H" Allowable Direct Costs NKD:yp PCSA CONTRACT NO.J-117A Revised 011017 INTERPLANT EFFLUENT PIPELINE REHABILITATION Page 18 of 18 OPERATIONS COMMITTEE Melting D310 TOBE.Of Dir. Bs/o3117 os/z4/17 AGENDA REPORT Item Item Number 4 10 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: PROJECT MANAGEMENT INFORMATION SYSTEM, PROJECT NO. J-128 GENERAL MANAGER'S RECOMMENDATION A. Approve a Professional Services Agreement with PMWeb, Inc.forthe procurement and implementation of the Project Management Information System, Project No. J-128, Specification No. S-2016-733BD, for an amount not to exceed $1,022,500; and B. Approve a contingency in the amount of$204,500 (20%). BACKGROUND The Orange County Sanitation District (Sanitation District) has an approved capital improvement program budget of$2.1 billion over the next ten years. Each of the projects included in this program require management of a wide range of data, records, correspondence, and communication with consultants, contractors, stakeholders, and regulatory agencies. Staff currently uses a variety of tools and applications residing on several computer platforms to ensure that all work is done consistently with Sanitation District policies and procedures, contractual obligations, and to assure legal requirements are being met. Primavera Contract Manager is the most important of these applications currently used to manage construction contracts including change order management, contractor submittals, inspection reports, requests for information, meeting minutes, and punch lists. This application, first implemented in 1999, is no longer supported by the vendor and, thus, can no longer be updated to meet new requirements and procedures. This system also predates internet-based applications that allow construction documents to be submitted, reviewed, and processed electronically among Sanitation District staff, consultants, contractors, subcontractors, and suppliers. Electronic processing allows quicker resolution of issues and reduces the potential for delays and claims related to lost documentation. A new software platform with improved functionality is needed to replace the existing obsolete construction management software to ensure an efficient and effective workforce. Page 1 of 4 RELEVANT STANDARDS • Sound engineering and accounting practices, complying with local, state and federal laws • Maintain a culture of improving efficiency PROBLEM The Primavera Contract Manager software application currently used to manage construction contracts is no longer supported and cannot continue to meet requirements. In addition, several business processes involved in managing the capital improvement program could be more efficiently and consistently performed using a commercial off-the-shelf software system. PROPOSED SOLUTION Implement a new Project Management Information System to replace Primavera Contract Manager and serve additional business processes related to management of the capital improvement program. TIMING CONCERNS The vendor no longer supports Primavera Contract Manager. With upgrades of existing operating systems, hardware, and internet browsers, this software may cease to function, which could severely impact staff's ability to manage and track construction projects. RAMIFICATIONS OF NOT TAKING ACTION Failure of Primavera Contract Manager could severely impact staff's ability to manage and track construction projects. In addition, an opportunity to improve performance of other capital improvement program business processes would be lost. PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Established a project for Project Management Information System, Project No. J-128, with a budget of$4,000,000. ADDITIONAL INFORMATION Request for Proposal Development A major software company merger involving the owner of Primavera Contract Manager left the Sanitation District with little vendor support for the current software licenses. Rather than purchase new licenses of the same software, the Sanitation District began to investigate alternate options and competitively bid this procurement. Page 2 of 4 Several inquiries to other agencies revealed an array of products that had increased functionality and improved collaboration tools. A Request for Information (RFI) was advertised to the industry to further review available options. On May 29, 2014, five vendors responded to the RFI. Based on these responses, a more detailed scope of work was developed for proposal. This scope included the business processes currently handled by the existing platform, as well as collaboration with contractors and designers, and additional business processes related to project design, project management, and project planning. On January 26, 2016, the Sanitation District issued a Request for Proposal (RFP) and on March 16, 2016, four proposals were received from the following vendors: Aurigo, PMWeb (PCl/Hill International), Oracle (Loadspring), and IBM (Value D). Request for Proposal Evaluation An Evaluation Committee consisting of five Sanitation District staff members from Engineering and Information Technology reviewed and ranked each of the proposals in accordance with Board of Directors' Ordinance No. OCSD47. This RFP used the consensus scoring method. During consensus scoring sessions, the evaluation facilitator directs the team's attention to each item in the specifications. The evaluation team considers one proposal at a time, comparing the vendor's proposed offering against the specifications in the underlying RFP. Consensus scoring sessions encourage open discussions and questions among members of the evaluation team. The review was performed in two phases. The first phase was a technical review of the submitted proposals that included an evaluation of the effectiveness of the solution, project staffing and organization, and firm qualifications/experience. Based on the compiled scores of the proposal review, the selection was narrowed down to the top- ranked vendors, Aurigo and PMWeb. The second phase of the review included a final presentation evaluation from the remaining vendors and an evaluation of the cost proposals. Unlike engineering design proposals that are required to be a qualifications- based selection only, these proposals are for a purchase of an engineered product and cost was a factor in the selection, representing 25% of the total scoring. The cost proposals were submitted in a separate sealed envelope and were scored separately after the review of the technical proposals. Presentations from those firms were conducted on June 20 and 21, 2016. A final score was compiled and PMWeb was determined to be the top-ranked firm. Please refer to the proposal evaluation table below for further scoring information. Overall, PMWeb was ranked highest due to their proposed team's experience in implementing systems in similar agencies, their background in project management and construction management, and the look, feel, and capabilities of the software product itself, as well as the positive references contacted. Page 3 of 4 PROPOSAL EVALUATION TABLE CRITERIA WEIGHT WEIGHTED PMWEB AURIGO ORACLE IBM SCORE CONSENSUS IF Effectiveness of 35 350 280 210 140 105 Solution Proposed Staffing and Project 5 50 35 30 25 20 Organization Qualifications of Firm 20 200 160 100 80 70 Proposal Score 475 340 245 195 Proposal Ranking 1 1 2 3 4 Presentation 15 150 120 75 Cost Evaluation 25 250 181.5 250 OVERALL SCORE 100 1000 776.5 665 Initial Pro osal Fee $1,257,050 1 $912,500 Negotiated Fee $1,022,500 Following the proposal evaluation, the Evaluation Committee met with the top-ranked firm to clarify the Fee Proposal and implementation schedule, and a best and final offer was subsequently submitted and accepted. Staff recommends awarding the procurement and implementation agreement to PMWeb, Inc. for a not-to-exceed amount of$1,022,500. This Professional Services Agreement includes costs for software purchase and licensing; software application configuration; application testing, including setting up a test environment; and vendor training of staff. This also includes the first year of support and application hosting on third-party servers. A subsequent vendor agreement will be needed for ongoing maintenance support and hosting services. CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted (Project No. J-128) and the budget is sufficient for the recommended action. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: Professional Services Agreement DF:dm:gc Page 4 of 4 PROFESSIONAL SERVICES AGREEMENT CAPITAL IMPROVEMENT PROGRAM (CIP) MANAGEMENT SYSTEM Specification No. S-2016-733BD THIS AGREEMENT is made and entered into as of the date fully executed below, by and between ORANGE COUNTY SANITATION DISTRICT, with a principal place of business at 10844 Ellis Avenue, Fountain Valley, CA 92708-7018(hereinafter referred to as"OCSD")and PM Web, Inc.with a principal business at 1 Pope Street Wakefield, MA 01880 (hereinafter referred to as "CONSULTANT") collectively referred to as the "Parties". WITNESSETH WHEREAS, based on CONSULTANT's expertise and experience, OCSD desires to temporarily engage CONSULTANT to provide CIP Management- Software as described in Exhibit"B"; and WHEREAS, CONSULTANT submitted its proposal, dated April 14, 2016 WHEREAS, OCSD has chosen CONSULTANT to conduct Services in accordance with Ordinance No. OCSD-44; and WHEREAS, on May 24, 2017 the Board of Directors of OCSD, by minute order, authorized execution of this Agreement between OCSD and CONSULTANT; and NOW, THEREFORE, in consideration of the mutual promises and mutual benefits exchanged between the Parties, the Parties mutually agree as follows: 1. Definitions 1.1. As-Built Documentation. The term "As-Built Documentation" means the Baseline Documentation plus the Documentation for any Configuration Changes and Customization Modifications. All "As-Built Documentation" shall supplement and not conflict with the terms of this Agreement. In the event of a conflict, the terms of this Agreement shall prevail. 1.2. Configuration Changes. The term "Configuration Changes" is defined as any modification or changes other than a Custom Modification. 1.3. CONSULTANT Application Software. The term "CONSULTANT Application Software" is defined as any Software owned or sublicensed, installed and/or configured by CONSULTANT as a component of the Project,whether in machine readable or printed form, including, but not limited to any applications, modules,subsystems, Interfaces,Configuration Changes, Custom Modifications, Updates and Documentation. 1.4. Custom Modification. The term "Custom Modification" is defined as a modification of the CONSULTANT Application Software Source Code or data base structure, which provides new or improved functions or features to address specific requirements of this Agreement. 1.5. Defect. The term "Defect" is defined as any error, failure, deficiency, or any other unacceptable variance or failure of the System or any component thereof to fully conform to the warranties and requirements described in this Agreement. With respect to the Orange County Sanitation District 1 of 19 Specification No.S-2016-733BD CONSULTANT Application Software, the term "Defect" is defined as any error, failure, or deficiency or any other unacceptable variance from any required, specified, or expected program behaviors as may be required by OCSD or necessary for the CONSULTANT Application Software to operate correctly and in full compliance with the terms of this Agreement. This includes expected program behaviors as described in any CONSULTANT Application Software Documentation. In the event of a conflict between this Agreement and Documentation provided by CONSULTANT to OCSD, the terms and conditions of this Agreement shall prevail. 1.6. Documentation. The term "Documentation" is defined as all written, electronic, or recorded works including all "As-Built Documentation' that describe the uses, features, functional capabilities, performance standards, and reliability standards of the System, or any subsystem, component, or Interface, and that are published or provided to OCSD by CONSULTANT or its subcontractors, including, without limitation, all end user and system administrator manuals, help files, training aids and manuals, training and support guides, program listings, data models, flow charts, logic diagrams, and other materials related to or for use with the System. 1.7. Final System Acceptance. The term "Final System Acceptance" shall be defined as that date on which all Services under Section Titled "Project Scope and Deliverable"of Exhibit B have been successfully completed by CONSULTANT and accepted by OCSD. 1.8. Fix Pack. The term "Fix Pack" is defined as a formal release of programming code and documentation that provides corrections to any CONSULTANT Application Software programs including, but not limited to, bug fixes, error corrections and patches. 1.9. Functional, Performance and Reliability Specifications and Requirements. The term "Functional, Performance and Reliability Specifications and Requirements" is defined as all definitions, descriptions, requirements, criteria, warranties, and performance standards relating to the System set forth in: (a)this Agreement; (b)any mutually agreed upon Change Orders pursuant to Section 4, Changes in Work; and (c) any functional and/or technical specifications which are published or provided by CONSULTANT or its licensors or suppliers from time to time with respect to the System or any Products. 1.10.Interfaces. The term "Interfaces" is defined as one or more of the specialized software applications developed or sublicensed by CONSULTANT and installed as a part of the Project for the purpose of sharing information (data) between CONSULTANT and/or CONSULTANT Application Software and any other software program or device. Functional requirements for each Interface to be included as a part of the System are provided in Exhibit B, Scope of Work. 1.11.Products. The term "Products" is defined as all Software listed in Exhibit A and A.1 to this Agreement. 1.12.Project. The term "Project" is defined as the totality of CONSULTANT's obligation under this Agreement to develop, supply, install, configure, test, implement and maintain the System. 1.13.Services. The term "Services" is defined as the implementation, development, training, configuration, loading, testing, project management and other services to be provided by CONSULTANT under this Agreement, including, without limitation, the tasks detailed in Exhibit B, Scope of Work. Orange County Sanitation District 2 of 19 Specification No.S-2016-733BD 1.14.Software. The term "Software" includes the following components provided and licensed by CONSULTANT under this Agreement: (a)CONSULTANT Application Software; (b)Third- Party Software; (c) Custom Modifications and (d) Interfaces. 1.15.System. The term "System" is defined as the collective whole of all Products and Services to be purchased, developed, licensed, supplied, installed, configured, tested and implemented by CONSULTANT under this Agreement. 1.16.System Administrator Documentation. Is defined as that portion of the Documentation addressing the operation and maintenance functions of the System. 1.17.Third-Party Software. The term "Third-Party Software" is defined as any software to be supplied under this Agreement that is purchased or licensed directly from any source external to CONSULTANT for use with or integration into the System. 1.18.Updates. The term "Updates" is defined as modifications, improvements, additions, and corrections to the Products and/or related Documentation, including functional and/or product enhancements, bug fixes, patches, new releases, new versions, and replacement modules or products that CONSULTANT makes generally available to its customers with or without an additional fee. 1.19.Go-live Support. The term "Go-live Support' is dedicated support provided for a period of 21 calendar days It business days)following the date of go-live of each phase as described in Exhibits A, A-1 and B to this Agreement. 1.20.Work Product. The term "Work Product" is defined as the Products and Services and all other programs, algorithms, reports, information, designs, plans and other items developed by CONSULTANT under this Agreement, including all partial, intermediate or preliminary versions thereof. 2. Miscellaneous 2.1. Access to Premises. OCSD shall provide CONSULTANT with reasonable and timely access to the sites and personnel necessary for CONSULTANT to perform its obligations under this Agreement. OCSD shall allow CONSULTANT personnel reasonable access to OCSD site and facilities (telephone, facsimile, parking, etc.)during normal business hours and at other reasonable times as requested by CONSULTANT and pre-approved by OCSD. The assistance or presence of OCSD's personnel will not relieve CONSULTANT of any responsibilities under this Agreement. 2.2. Amendments. No amendment or modification to this Agreement is valid unless it is contained in a writing signed by both parties. 2.3. Approvals in Writing. All approvals or consents required or contemplated by this Agreement must be in writing to be effective. 2.4. Background Checks and Removal of Personnel. Prior to being allowed to perform any work on this Project, all non-OCSD personnel assigned to the Project may be required to submit to and pass a background check by the Fountain Valley, California Police Department. In addition, OCSD shall have the sole and exclusive right to require CONSULTANT to immediately remove any individual from the Project for any reason deemed to be in the best interests of OCSD. CONSULTANT shall replace any employee removed from the project within ten (10) business days of said removal. Orange County Sanitation Distract 3 of 19 Specification No.S-2016-733BD 2.5. Compliance with Work Rules. CONSULTANT will ensure that, while they are on OCSD premises, CONSULTANT's personnel and subcontractors will comply with OCSD's working rules and policies, including OCSD's security procedures. 2.6. Successors and Assigns. This Agreement is binding on and inures to the benefit of the parties and their respective successors and assigns. 2.7. Advertising. CONSULTANT shall not refer to the existence of this Agreement in any press release, advertising or materials distributed to prospective customers without the prior written consent of OCSD. 2.8. This Agreement and all exhibits hereto (called the "Agreement") is made by OCSD and CONSULTANT. The Terms and Conditions herein exclusively govern the purchase of Services as described in the Scope of Work. 2.9. Exhibits to this Agreement are incorporated by reference and made a part of this Agreement as though fully set forth at length herein. Exhibits to this Agreement are as follows in order of precedence: Exhibit"A" PMWeb, Inc. Final Proposal dated April 14, 2016 Exhibit"A.1" PMWeb, Inc. Best and Final Offer (BAFO)dated January 18, 2017 Exhibit"A.2" Addendum to S-2017-733BD dated February 18, 2016 and March 4, 2016 Exhibit"B" OCSD Scope of Work Exhibit"C" Acknowledgment of Insurance Requirements (AOIR) 2.10.In the event of any conflict or inconsistency between the provisions of this Agreement and any of the provisions of the exhibits hereto, the provisions of this Agreement shall in all respects govern and control. 2.11.This Agreement may not be modified, changed or supplemented, nor may any obligations hereunder be waived or extensions of time for performance granted, except by written instrument signed by both Parties. 2.12.The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any Paragraph or provision hereof. 2.13.The term "workday". Workdays are defined as all days that are not Saturday, Sunday, or legally observed holidays. Meetings with OCSD staff shall be scheduled from Monday through Friday between the hours of 6:30AM and 4PM PST (exception is operations staff who maintain plant operations 24/7 and work a rotated 12-hour shift) and shall conform to OCSD work schedules. OCSD review periods shall not include legally observed holidays. 2.14.00SD holidays (non-working days) are as follows: New Year's Day, Lincoln's Birthday, Presidents' Day Monday, Memorial Day Monday, Independence Day, Labor Day Monday, Veterans Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, and Christmas Day. 2.15.The term "days", when used in the Agreement, shall mean calendar days, unless otherwise noted as workdays. 2.16.Work Hours: The work required under this Agreement may include normal Business hours, evenings, and weekends. Orange County Sanitation Distnct 4 of 19 Specification No.S-2016-733BD 2.17.CONSULTANT shall provide OCSD with all required premiums and/or overtime work at no charge beyond the price provided under"Compensation" below. 2.18.Except as expressly provided otherwise, OCSD accepts no liability for any expenses, losses, or action incurred or undertaken by CONSULTANT as a result of work performed in anticipation of purchases of said services by OCSD. 2.19.Goods and Services, whether stated separately or in conjunction with each other, shall mean CIP Management - Software and the services related to the provision of such as described in Exhibit"B" 2.20.Construction of Agreement. This Agreement is the product of joint discussions and negotiations at arms' length between the parties, both of whom are sophisticated and knowledgeable in business matters and both of whom have relied on the advice of independent legal counsel. Any rule of law which would require interpretation of this Agreement against the party that drafted it shall have no application to this Agreement. 3. Scope of Work: General requirements for the scope of this Project are listed below. A detailed list of tasks and responsibilities are included in Exhibit B, Scope of Work. 3.1. Scope of Work Subject to the terms of this Agreement, CONSULTANT shall perform the Services identified in Exhibit "B" to this Agreement CONSULTANT warrants that all of its Services shall be performed in a competent, professional and satisfactory manner. 3.2. Modifications to Equipment and Facilities. OCSD shall be responsible for making OCSD- approved modifications identified in an OCSD approved, Site Analysis Report. Thereafter, CONSULTANT will be precluded from asserting that it is unable to perform its obligations under this Agreement because of any pre-existing condition. During implementation, any changes to the System or any costs that may be incurred in order to complete the requirements of this Agreement but were not identified in the Site Analysis Report will be the sole and exclusive responsibility of CONSULTANT. In addition, if the System is unable to meet the Functional, Performance and Reliability Specifications and Requirements in this Agreement after the identified upgrades and changes have been made,then CONSULTANT will be responsible, at its own expense, for making any further upgrades or changes necessary to achieve this result. 3.3. User Qualifications. OCSD shall use its best efforts to ensure that persons operating the System will be qualified, supervised, and trained in the use of personal computers and normal operations. CONSULTANT will ensure that all training on the System or System components will be conducted professionally and effectively so that each operator trained by CONSULTANT is proficient in its use. 3.4. Transition. CONSULTANT will work with OCSD to ensure a smooth and efficient transition from OCSD's current systems to the new System and to minimize disruption to current operations, even if it necessitates working late evening, early morning, or weekend hours. Any required disruptions to OCSD's operations shall be scheduled in advance and approved by OCSD. 4. Modifications to Scope of Work: Requests for modifications to the Scope of Work hereunder can be made by OCSD at any time.All modifications must be made in writing and signed by both Parties. A review of the time required for the modification will be made by OCSD and CONSULTANT and the Agreement period adjusted accordingly. Orange County Sanitation District 5 of 19 Specification No.S-2016-733BD 5. License 5.1.Grant of License. 5.1.1. CONSULTANT hereby grants to OCSD a perpetual, irrevocable, nonexclusive, and nontransferable license under applicable copyrights and/or trade secrets (either site, node locked or per user as specified in Exhibit A.1 to this Agreement, Best and Final Offer)to use all CONSULTANT Application Software provided under this Agreement for use by OCSD. OCSD shall have the right to use all CONSULTANT Application Software or any portion thereof on any equipment, either locked on a single computer node (as determined by a specific LAN address), as a site license, or concurrently on a number of computer nodes so long as the number of concurrent uses does not exceed the number licensed for the LAN, or on one or more backup computer nodes. OCSD shall permit CONSULTANT reasonable, pre-scheduled access(Monday through Friday, 8:00 to 5:00 PM PST)to OCSD facilities for license administration audit purposes. 5.1.2. OCSD shall have the right to use all CONSULTANT Application Software as may be necessary in order to operate the System purchased under this Agreement. In addition, OCSD shall have the right to use the CONSULTANT Application Software as necessary to (a) operate the System (b) conduct internal training and testing, and (c) perform disaster recovery, backup, archive and restoration testing and implementation as may be required in OCSD's judgment. This license shall apply to all commercially available Updates throughout the term of this Agreement. OCSD shall have the right to use all CONSULTANT Application Software licensed under this Agreement on any equipment at any facility and at any location and may make as many copies of the software as it desires to support its authorized use of the software, provided the copies include CONSULTANT's or the third-party owner's copyright or other proprietary notices. 5.1.3. All license rights of Third Party Software shall originate from the manufacturer. All Third Party Software licenses shall be provided to OCSD and become effective at the time the product is used by OCSD in a live environment. 5.1.4. The approval of CONSULTANT to use CONSULTANT Application Software and Third Party Software and OCSD's use of it shall not constitute a waiver of OCSD's right to reject the System, in whole or in part, if the requirements for Final System Acceptance are not met. 5.2. Limitations on License. Except as licensed to OCSD, CONSULTANT retains all of its current rights, title, and interest in the CONSULTANT Application Software, including Derivative Works, Custom Modifications, Configuration Changes and Updates. Unless authorized by CONSULTANT or required by law, OCSD will not: (1) make available or distribute all or part of the Software to any third party by assignment, sublicense or any other means; or (2) disassemble, decompile, or reverse engineer the Software, or allow any third party to do so. 5.3. Security. Certain Software Packages are required to operate in conjunction with a hardware lock device or in conjunction with license administration software and a license authorization key provided by CONSULTANT or its representative. OCSD shall take no steps to avoid or defeat the purpose of any required lock device or authorization key. Use of any Software Package without a required lock device or authorization key shall be unlicensed under this Agreement. Orange County Sanitation Distnct 6 of 19 Specification No.S-2016-733BD 5.4. Restricted Access. OCSD shall use every reasonable method to restrict access to the CONSULTANT Application Software, or Documentation related thereto, to persons not authorized to use the CONSULTANT Application Software under the terms of this Agreement. OCSD shall not copy the CONSULTANT Application Software or Documentation except as necessary for use under this Agreement. OCSD shall not decrypt, reverse compile or disassemble the CONSULTANT Application Software. OCSD shall not export or re-export the CONSULTANT Application Software or Documentation. Furthermore, OCSD shall abide by all applicable Federal and State Trademark and Copyright laws. 6. Compensation: Compensation to be paid by OCSD to CONSULTANT for the Services provided under this Agreement shall be a total amount not to exceed One Million Twenty-Two Thousand Five Hundred and 00/00 Dollars ($1,022,500.00). Of this total amount, compensation for the procurement of the Software and first year of hosting service shall be in the amount of Two Hundred Fourteen Thousand Five Hundred and 00/00 Dollars ($214,500.00). The remaining portion of the total amount, shall be compensation for Software implementation in the amount of Eight Hundred Eight Thousand and 00/00 Dollars ($808,000.00). 7. Payment CONSULTANT shall be paid by OCSD upon approval of invoices by OCSD Project Manager or designee,for completion of milestone tasks and deliverables as described in Exhibit A.1 to this Agreement 7.1. OCSD, at its sole discretion, shall be the determining party as to whether the tasks and deliverables for each milestone have been satisfactorily completed. 6. Invoices 8.1. OCSD shall pay within 30 days of completion and receipt and approval by OCSD Project Manager of an itemized invoice, in a form acceptable to OCSD to enable audit of the charges thereon. 8.2. Invoices shall be emailed by CONSULTANT to OCSD at APStaff@OCSD.com. The Specification and Purchase Order number shall both be referenced in the subject line. 9. Audit Rights: CONSULTANT agrees that, during the term of this Agreement and for a period of three (3) years after its termination, OCSD shall have access to and the right to examine any directly pertinent books, documents, and records of CONSULTANT relating to the invoices submitted by CONSULTANT pursuant to this Agreement. 10. Performance:Time is of the essence in the performance of the provisions hereof. 11. Term 11.1.The Services to be provided by CONSULTANT under this Agreement shall commence on the date of the Notice to Proceed as issued by OCSD), and be completed no later than period of performance based on the project completion schedule as stated in Exhibit A.1 to this Agreement following Notice to Proceed. 11.2.Effect on Project Schedule. The time periods and requirements set forth in Exhibit A.1, Section titled"Proposed Implementation Schedule-Detailed",will not excuse CONSULTANT from complying with the completion dates set forth in the Project Schedule. Unless otherwise specified, the completion dates set forth in the Project Schedule constitute the dates by which CONSULTANT must complete the testing required by this Agreement and achieve Final System Acceptance of the System installed. Orange County Sanitation District 7 of 19 Specification No.S-2016-733BD 11.3.Deadline for Final System Acceptance. Final System Acceptance must occur once the System is accepted by OCSD as fully operational and is in full productive use by OCSD. Final System Acceptance must be achieved by the CONSULTANT within the period of performance based on the project delivery scheduled as stated in Exhibit A.1 to this Agreement. 12. Termination 12.1.00SD reserves the right to terminate this Agreement for its convenience, with or without cause, in whole or in part, at any time, by written notice from OCSD. Upon receipt of a termination notice, CONSULTANT shall immediately discontinue all work under this Agreement (unless the notice directs otherwise). OCSD shall thereafter, within thirty (30) days, pay CONSULTANT for work performed (cost and fee) to the date of termination. CONSULTANT expressly waives any claim to receive anticipated profits to be earned during the uncompleted portion of this Agreement. Such notice of termination shall terminate this Agreement and release OCSD from any further fee, cost or claim hereunder by CONSULTANT other than for work performed to the date of termination. 12.2.00SD reserves the right to terminate this Agreement immediately upon OCSD's determination that CONSULTANT is not meeting specification requirements, if the level of service is inadequate, or any other default of this Agreement. 12.3.00SD may also immediately cancel for default of this Agreement in whole or in part by written notice to CONSULTANT: • if CONSULTANT becomes insolvent or files a petition under the Bankruptcy Act; or • if CONSULTANT sells its business; or • if CONSULTANT breaches any of the terms of this Agreement; or • if total amount of compensation exceeds the amount authorized under this Agreement. 12A.AII OCSD property in the possession or control of CONSULTANT shall be returned by CONSULTANT to OCSD on demand, or at the termination of this Agreement, whichever occurs first. In addition, CONSULTANT will deliver to OCSD all Work Product currently in existence and for which payment has been made. 12.5.Upon termination or expiration of this Agreement, CONSULTANT will cooperate with OCSD to assist with the orderly transfer of services, functions, and operations provided by CONSULTANT under this Agreement to another provider or to OCSD as determined by OCSD in its sole discretion. Prior to the termination or expiration of this Agreement, OCSD may require CONSULTANT to perform those transition services described below that OCSD deems necessary to migrate CONSULTANT's work to another provider or to OCSD. Transition services may include, but are not limited to the following: 12.5.1.Pre-Migration Services. 12.5.1.1. Working with OCSD to jointly develop a mutually agreed upon Transition Services Plan to facilitate the termination of the services; 12.5.1.2. Notifying all affected vendors and subcontractors of CONSULTANT; and 12.5.1.3. Freezing all non-critical changes to the System. Orange County Sanitation Distnct 8 of 19 Specification No.S-2016-733BD 12.5.2.Migration and Post-Migration. 12.5.2.1. Performing the Transition Services Plan activities. 12.5.2.2. Answering questions regarding the services performed by CONSULTANT or the System on an as-needed basis; 12.5.2.3. Providing such other reasonable services needed to effectuate an orderly transition to a new System. 12.6.00SD agrees to pay CONSULTANT for transition services at an hourly rate of $150 per hour, plus reasonable out-of-pocket expenses not to exceed ten percent (10%) of the aggregate hourly compensation paid. 13. Indemnification and Hold Harmless Provision: CONSULTANT shall assume all responsibility for damages to property and/or injuries to persons, including accidental death, which may arise out of or be caused by CONSULTANT's services under this Agreement, or by its subcontractor or by anyone directly or indirectly employed by CONSULTANT, and whether such damage or injury shall accrue or be discovered before or after the termination of the Agreement. Except as to the sole active negligence of or willful misconduct of OCSD, CONSULTANT shall indemnify, protect,defend and hold harmless OCSD, its elected and appointed officials,officers, agents and employees,from and against any and all claims, liabilities, damages or expenses of any nature, including attorneys' fees: (a) for injury to or death of any person or damage to property or interference with the use of property, arising out of or in connection with CONSULTANT's performance under the Agreement, and/or (b) on account of use of any copyrighted or uncopyrighted material,composition,or process, or any patented or unpatented invention, article or appliance, furnished or used under the Agreement, and/or (c) on account of any goods and services provided under this Agreement. This indemnification provision shall apply to any acts or omissions, willful misconduct, or negligent misconduct, whether active or passive, on the part of CONSULTANT of or anyone employed by or working under CONSULTANT. To the maximum extent permitted by law, CONSULTANTS duty to defend shall apply whether or not such claims, allegations, lawsuits, or proceedings have merit or are meritless, or which involve claims or allegations that any of the parties to be defended were actively, passively, or concurrently negligent, or which otherwise assert that the parties to be defended are responsible, in whole or in part, for any loss, damage, or injury. CONSULTANT agrees to provide this defense immediately upon written notice from OCSD, and with well qualified, adequately insured, and experienced legal counsel acceptable to OCSD. This section shall survive the expiration or early termination of the Agreement. 14. Warranty 14.1.System Warranty. CONSULTANT warrants that the System will meet the Functional, Performance and Reliability Specifications and Requirements as defined in this Agreement. The System and/or each of its subsystems, components and Interfaces will be capable of operating fully and correctly in conjunction with the System Hardware. CONSULTANT warrants that for the term of this Agreement, the System will perform as described in this Section and material and workmanship and will remain in good working order. In the event the System does not meet these warranties, CONSULTANT shall provide, at no charge, the necessary software, hardware, and/or services required to attain the levels or standards contained in these warranties. 14.2.CONSULTANT Application Software Warranties. CONSULTANT warrants that it owns or otherwise has the right to license the CONSULTANT Application Software to OCSD and that it possesses all rights and interests necessary to enter this Agreement. In addition, CONSULTANT warrants that: Orange County Sanitation District 9 of 19 Specification No.S-2016-733BD 14.2.1.All CONSULTANT Application Software licensed under this Agreement is free of known Defects, viruses, worms and Trojan horses, and any code designed to disable the Software because of the passage of time, alleged failure to make payments due, or otherwise (except for documented security measures such as password expiration functions); 14.2.2. During the term of the Agreement; the CONSULTANT Application Software will meet or exceed the Functional, Performance and Reliability Specifications and Requirements herein; 14.2.3.The CONSULTANT Application Software will: (1) store all date-related information and process all data Interfaces involving dates in a manner that unambiguously identifies the century, for all date values before, during and after the Year 2000; (2) calculate, sort, report and otherwise operate correctly and in a consistent manner for all date information processed,whether before,during or after the Year 2000; (3)calculate, sort, report and otherwise operate correctly, in a consistent manner and without interruption regardless of whether the date on which the Software is operated or executed is before, during or after the Year 2000; (4) report and display all dates with a four-digit date so that the century is unambiguously identified; and (5) handle all leap years correctly; 14.2.4.CONSULTANT Application Software is and will be general release versions that have been fully tested at CONSULTANT's site in accordance with best industry practices, and are not beta or pre-release versions (unless agreed to in writing by OCSD); and, 14.2.5.Custom Modifications and Interfaces have been fully tested in accordance with best industry practices and are free of known Defects. CONSULTANT further agrees that during the term of this Agreement, CONSULTANT will provide OCSD, if OCSD so desires, with any Updates at no additional cost (including any and all costs associated with the installation of those Updates) immediately upon their commercial availability to any other entity. 14.3.Work Quality Warranty. CONSULTANT warrants that all work performed by CONSULTANT and/or its subcontractors under this Agreement will conform to best industry practices and will be performed in a professional and workmanlike manner by staff with the necessary skills, experience and knowledge to do so. 14.4.Regulatory Warranty. CONSULTANT warrants that, for the Term of this Agreement, the System will comply with all processing and reporting requirements for State and Federal laws, and regulations. If the Software requires updating due to a change in a State or Federal law, or regulation, affecting OCSD, CONSULTANT will provide these changes per a mutually agreed to schedule at no additional charge to OCSD. Notwithstanding this provision, in no event shall CONSULTANT provide said update later than the date required by the State or Federal law or regulation affecting OCSD. In the event OCSD is notified of a change in State or Federal law or regulations that requires updating the Software, OCSD will notify CONSULTANT of that change as soon as reasonably possible. 14.5.Documentation Warranty. CONSULTANT warrants that, for the Term of this Agreement, the Documentation for all licensed CONSULTANT Application Software will be complete and accurate in all material respects. The Documentation will be revised to reflect all Updates and Interfaces provided by CONSULTANT under this Agreement. This includes documentation on any Custom Modification or Configuration Changes made to the System by CONSULTANT during the installation process. Orange County Sanitation Distract 10 of 19 Specification No.S-2016-733BD 14.6.Service Warranty. During the term of this Agreement, CONSULTANT warrants that it will remedy any failure, malfunction, Defect or nonconformity in the System, as follows: 14.6.1.Priority One (PI) Defects. For purposes of this Warranty, a P1 Defect includes, but is not limited to, loss of data, data corruption, a System or subsystem abort, any condition where productive use of the System or any component thereof is prohibited and no acceptable workaround is available. Examples of P1 Defects include, but are not limited to: 14.6.1.1. System is down 14.6.1.2. Application, module or Interface is down or non-operational 14.6.1.3. An Interface or application critical to System operation is substantially impaired or problematic 14.6.1.4. Loss of data or data corruption after data has been entered 14.6.1.5. A subsystem or component thereof is non-functional 14.6.1.6. Productive use is prohibited 14.6.1.7. a Server or workstation goes down 14.6.1.8. two or more workstations or mobile devices lock up or malfunction intermittently 14.6.1.9. a user cannot log on to the System 14.6.2.Priority Two (P2) Defects. For purposes of this Warranty a P2 Defect includes, but is not limited to, compromise of the primary purpose of the System, subsystem or Interface to an external system. Productive use by the end user is substantially impacted and an acceptable workaround is not available. Examples of P2 Defects include, but are not limited to: 14.6.2.1. a software function does not work correctly 14.6.2.2. The user cannot produce a report with correct calculations 14.6.2.3. System, subsystem or an Interface performance is deemed unacceptable per the Functional, Performance,and Reliability Specifications and Requirements. 14.6.2.4. Incorrect cross streets are displayed on a verified address or location 14.6.2.5. Cannot create a scheduled event 14.6.2.6. A single workstation or mobile device locks up or malfunctions intermittently 14.6.3.Priority Three (P3) Defects. For purposes of this Warranty, a P3 Defect includes, but is not limited to, incomplete operation of a System component which impacts productivity of staff but an acceptable workaround is generally available. Examples of P3 Defects include but are not limited to: 14.6.3.1. Single workstation or mobile device locks up intermittently but infrequently 14.6.3.2. Minor deficiencies occur intermittently in any component of the System 14.6.3.3. A mapping function doesn't work but the failure does not interfere with the user's ability to perform required tasks 14.6.3.4. A report does not function or report provides incorrect results 14.6.3.5. An incorrect message is presented in a dialog box 14.6.4.Priority Four (P4) Defects. For purposes of this Warranty, a P4 Defect consists of those problems deemed by OCSD to be mainly cosmetic. Examples of P4 Defects include, but are not limited to: 14.6.4.1. A misspelled word in the header of a report or in a help file Orange County Sanitation District 11 of 19 Specification No.S-2016-733BD 14.6.4.2. A minor error in output that does not interfere with the correct outputting of statistics from the system 14.6.4.3. Minor printing errors in a report that does not impede OCSD's ability to utilize the report for the required purpose. 14.6.4.4. Minor variances in text where the help file does not match the documentation 14.6.4.5. Minor variances in text where the documentation doesn't match the functionality but the System works properly 14.6.4.6. A print button doesn't work but the user can still print without opening or closing multiple windows or loosing data or rebooting the system. 14.6.5.Multiple Failures. Any situation involving multiple, contemporaneous failures, regardless of their individual priorities, will be regarded as a Priority One Defect if, in OCSD's determination, the situation results in OCSD having essentially no productive use of the System or a major subsystem. 14.6.6.Permanent Cure. If OCSD accepts a workaround or other temporary cure as the remedy for any reported Defect, CONSULTANT shall provide and install at no cost to OCSD a permanent correction or cure within ten (10) days after the permanent cure becomes available. 14.6.7.Third-party Warranty Coverage. Third-party products are provided with a pass-thru- warranty from the original manufacturer. 15. Force Majeure: Neither party shall be liable for delays caused by accident, flood, acts of God, fire, labor trouble, war, acts of government or any other cause beyond its control, but said party shall use reasonable efforts to minimize the extent of the delay.Work affected by a Force Majeure condition may be rescheduled by mutual consent or may be eliminated from the Agreement. 16. Insurance: CONSULTANT and all subcontractors shall purchase and maintain, throughout the life of this Agreement and any periods of warranty or extensions, insurance in amounts equal to the requirements set forth in the signed Acknowledgement of Insurance Requirements, Exhibit "C". CONSULTANT shall not commence work under this Agreement until all required insurance is obtained in a form acceptable to OCSD, nor shall CONSULTANT allow any subcontractor to commence service pursuant to a subcontract until all insurance required of the subcontractor has been obtained. Failure to maintain required insurance coverage shall result in termination of this Agreement. 17. Key Personnel: Personnel, as provided in Exhibit "A", are considered "key" to the work under this Agreement and will be available for the term of the Agreement. No person designated as key under this Agreement shall be removed or replaced without prior written consent of OCSD. If OCSD asks CONSULTANT to remove a person designated as key under this Agreement, CONSULTANT agrees to do so immediately regardless of the reason, or the lack of reason, for OCSD's request. CONSULTANT shall assign only competent personnel to perform services pursuant to this Agreement. 1tt. Confidentiality and Non-Disclosure 18.1.CONSULTANT acknowledges that in performing the Services hereunder, OCSD may have to disclose to CONSULTANT orally and in writing certain confidential information that OCSD considers proprietary and has developed at great expense and effort. Orange County Sanitation District 12 of 19 Specification No.S-2016-733BD 18.2.CONSULTANT agrees to maintain in confidence and not disclose to any person, firm, or corporation, without OCSD's prior written consent, any trade secret or confidential information, knowledge or data relating to the products, process, or operation of OCSD. 18.3.CONSULTANT further agrees to maintain in confidence and not to disclose to any person, firm, or corporation any data, information, technology, or material developed or obtained by CONSULTANT during the term of this Agreement. 18.4. CONSULTANT agrees as follows: • To use the Confidential Information only for the purposes described herein; to not reproduce the Confidential Information;to hold in confidence and protect the Confidential Information from dissemination to and use by anyone not a party to this Agreement; and to not use the Confidential Information to benefit itself or others. • To restrict access to the Confidential Information to its CONSULTANT or personnel of CONSULTANT who (1) have a need to have such access and (2) have been advised of and have agreed in writing to treat such information in accordance with the terms of this Agreement. • To return all Confidential Information in CONSULTANT's possession upon termination of this Agreement or upon OCSD's request, whichever occurs first. • To hold in confidence information and materials, if any, developed pursuant to the Services hereunder. 18.5.The provisions of this Section shall survive termination or expiration of this Agreement and shall continue for so long as the material remains confidential. 19. Ownership of Documents All drawings, specifications, reports, records, documents, memoranda, correspondence, computations, and other materials prepared by CONSULTANT, its employees, subcontractors, and agents in the performance of this Agreement shall be the property of OCSD and shall be promptly delivered to OCSD upon request of the Project Manager or upon the termination of this Agreement, and CONSULTANT shall have no claim for further employment or additional compensation as a result of the exercise by OCSD of its full rights of ownership of the documents and materials hereunder. Any use of such completed documents for other projects and/or use of incomplete documents without specific written authorization by the CONSULTANT will be at OCSD's sole risk and without liability to CONSULTANT. CONSULTANT shall ensure that all its subcontractors shall provide for assignment to OCSD of any documents or materials prepared by them. 20. Ownership of Intellectual Property 20.1.CONSULTANT agrees that all designs, plans, reports, specifications, drawings, schematics, prototypes, models, inventions, and all other information and items made during the course of this Agreement and arising from the Services (hereinafter referred to as"New Developments")shall be and are assigned to OCSD as its sole and exclusive property. 20.2.CONSULTANT agrees to promptly disclose to OCSD all such New Developments. Upon OCSD's request, CONSULTANT agrees to assist OCSD, at OCSD's expense, to obtain patents or copyrights for such New Developments, including the disclosure of all pertinent information and data with respect thereto, the execution of all applications, specifications, assignments, and all other instruments and papers which OCSD shall deem necessary to apply for and to assign or convey to OCSD, its successors and assigns, the sole and Orange County Sanitation District 13 of 19 Specification No.S-2016-733BD exclusive right, title and interest in such New Developments. CONSULTANT agrees to obtain or has obtained written assurances from its employees and contract personnel of their agreement to the terms hereof with regard to New Developments and Confidential Information. 20.3.CONSULTANT warrants that CONSULTANT has good title to any New Developments, and the right to assign New Developments to OCSD free of any proprietary rights of any other party or any other encumbrance whatever. 20.4.The originals of all computations, drawings, designs, graphics, studies, reports, manuals, photographs, videotapes, data, computer files, and other documents prepared or caused to be prepared by CONSULTANT or its subcontractors in connection with these Services shall be delivered to and shall become the exclusive property of OCSD. OCSD may utilize these documents for OCSD applications on other projects or extensions of this project, at its own risk. 21. Infringement Claims: If an infringement claim occurs, CONSULTANT has thirty(30) days after the receipt of OCSD's written notice of the claim or the date on which CONSULTANT first becomes aware of the claim, whichever is sooner, to either: (a) procure for OCSD the right to continue using the affected Product, Service, subsystem, component or Interface and deliver or provide the Product, Service, subsystem, component, or Interface to OCSD; or (b) repair or replace the infringing Product, Service, subsystem, component, or Interface so that it becomes non-infringing, provided the performance of the System or any subsystems, components, or Interfaces is not adversely affected by the replacement or modification. In the event CONSULTANT is unable to comply with either subsection (a)or(b)of this paragraph within thirty (30)days, OCSD may terminate this Agreement without any further obligation to CONSULTANT. In the event of termination, in addition to any other legal remedies available to OCSD, CONSULTANT will refund OCSD within ten (10) days of OCSD's notice of termination, the license fees OCSD paid to CONSULTANT for the Product, Service, subsystem, component or Interface. If the inability to comply with either subsection (a) or(b)of this paragraph causes the System to fail to meet the Functional, Performance and Reliability Specifications and Requirements or to otherwise become ineffective, CONSULTANT will refund OCSD all fees paid to CONSULTANT under this Agreement. 22. No Solicitation of Employees or Subcontractors 22.1.CONSULTANT and OCSD mutually agree that they shall not, during the term of this Agreement and for a period of one (1) year immediately following termination of this Agreement, or any extension hereof, call on, solicit, or take away any of the employees or subcontractors about whom the CONSULTANT and OCSD became aware of as a result of the collaboration to complete the project. 22.2.CONSULTANT and OCSD acknowledge that each party's employees are critical to their business. CONSULTANT and OCSD mutually agree OCSD will not employ or otherwise engage employees or subcontractors working for the CONSULTANT, and the CONSULTANT in turn will not employ or otherwise engage employees or subcontractors working for OCSD during the term of this Agreement and for a period of one(1)yearfollowing termination of this Agreement. Should CONSULTANT violate this provision, CONSULTANT will pay OCSD fifty percent(50%)of the former employee's annual salary which payment is in addition to OCSD's rights and remedies. Orange County Sanitation District 14 of 19 Specification No.S-2016-733BD 23. Independent Contractor Capacity 23.1.The relationship of CONSULTANT to OCSD is that of an independent contractor and nothing herein shall be construed as creating an employment or agency relationship. 23.2.CONSULTANT shall act independently and not as an officer or employee of OCSD. OCSD assumes no liability for CONSULTANTS action and performance, nor assumes responsibility for taxes, funds, payments or other commitments, implied or expressed, by or for CONSULTANT. 23.3.CONSULTANT shall not be considered an agent of OCSD for any purpose whatsoever, nor shall CONSULTANT have the right to, and shall not, commit OCSD to any agreement, contract or undertaking. CONSULTANT shall not use OCSD's name in its promotional material or for any advertising or publicity purposes without expressed written consent. 23A.CONSULTANT shall not be entitled to any benefits accorded to those individuals listed on OCSD's payroll as regular employees including, without limitation, worker's compensation, disability insurance, vacation, holiday or sick pay. CONSULTANT shall be responsible for providing,at CONSULTANT's expense, disability,worker's compensation or other insurance as well as licenses and permits usual or necessary for conducting the Services hereunder. 23.5.CONSULTANT shall be obligated to pay any and all applicable local, state and federal payroll and other taxes incurred as a result of fees hereunder. CONSULTANT hereby indemnifies OCSD for any claims, losses, costs, fees, liabilities, damages or penalties suffered by OCSD arising out of CONSULTANT's breach of this provision. 23.6.CONSULTANT shall not be eligible to join or participate in any benefit plans offered to those individuals listed on OCSD's payroll as regular employees. CONSULTANT shall remain ineligible for such benefits or participation in such benefit plans even if a court later decides that OCSD misclassifed CONSULTANT for tax purposes. 24. Licenses and Permits: CONSULTANT represents and warrants to OCSD that it has obtained all licenses, permits, qualifications and approvals of whatever nature that are legally required to engage in this work. Any and all fees required by State, County, City and/or municipal laws, codes and/or tariffs that pertain to work performed under the terms of this Agreement will be paid by CONSULTANT. 25. Governing Law: This Agreement shall be governed by and interpreted under the laws of the State of California and the Parties submit to jurisdiction in Orange County, in the event any action is brought in connection with this Agreement or the performance thereof. 26.Applicable Laws and Regulations: CONSULTANT shall comply with all applicable federal, state, and local laws, rules, and regulations. CONSULTANT also agrees to indemnify and hold harmless from any and all damages and liabilities assessed against OCSD as a result of CONSULTANT's noncompliance therewith.Any permission required by law to be included herein shall be deemed included as a part of this Agreement whether or not specifically referenced. 27. CONSULTANT's Representations: In the performance of duties under this Agreement, CONSULTANT shall adhere to the highest fiduciary standards, ethical practices and standards of care and competence for their trade/profession. Orange County Sanitation District 15 of 19 Specification No.S-2016-733BD 28. Familiarity with Work: By executing this Agreement, CONSULTANT warrants that: 1) it has investigated the work to be performed; 2) it has investigated the site of the work and is aware of all conditions there; and 3) it understands the facilities, difficulties and restrictions of the work under this Agreement. Should CONSULTANT discover any latent or unknown conditions materially differing from those inherent in the work or as represented by OCSD, it shall immediately inform OCSD of this and shall not proceed, except at CONSULTANT's risk, until written instructions are received from OCSD. 29. Dispute Resolution 29.1.In the event of a dispute as to the construction or interpretation of this Agreement, or any rights or obligations hereunder, the Parties shall first attempt, in good faith, to resolve the dispute by mediation. The Parties shall mutually select a mediator to facilitate the resolution of the dispute. If the Parties are unable to agree on a mediator, the mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Agreement, through the alternate dispute resolution procedures of Judicial Arbitration through Mediation Services of Orange County("JAMS"), or any similar organization or entity conducting an alternate dispute resolution process. 29.2.In the event the Parties are unable to timely resolve the dispute through mediation, the issues in dispute shall be submitted to arbitration pursuant to California Code of Civil Procedure, Part 3,Title 9, Sections 1280 at seq. For such purpose, an agreed arbitrator shall be selected, or in the absence of agreement, each party shall select an arbitrator, and those two arbitrators shall select a third. Discovery may be conducted in connection with the arbitration proceeding pursuant to California Code of Civil Procedure Section 1283.05. The arbitrator, or three arbitrators acting as a board, shall take such evidence and make such investigation as deemed appropriate and shall render a written decision on the matter in question. The arbitrator shall decide each and every dispute in accordance with the laws of the State of California. The arbitrator's decision and award shall be subject to review for errors of fact or law in the Superior Court for the County of Orange, with a right of appeal from any judgment issued therein. 30.Attorney's Fees:If any action at law or inequity or if any proceeding in the form of an Alternative Dispute Resolution (ADR) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable, attorney's fees, costs and necessary disbursements in addition to any other relief to which he may be entitled. 31. Waiver. The waiver of either party of any breach or violation of, or default under, any provision of this Agreement, shall not be deemed a continuing waiver by such party of any other provision or of any subsequent breach or violation of this Agreement or default thereunder. Any breach by CONSULTANT to which OCSD does not object shall not operate as a waiver of OCSD'S rights to seek remedies available to it for any subsequent breach. 32. Survival.,All provisions of this Agreement that by their nature would reasonably be expected to continue after the termination of this Agreement will survive the termination of this Agreement, including, without limitation, the following Sections and Paragraphs: • Payment • License • Audit • Independent Contractor • Warranties Orange County Sanitation Distract 16 of 19 Specification No.S-2016-733BD • Indemnification • Obligations Upon Expiration or Termination • Transition of Services • Confidentiality and Nondisclosure • Forum for Enforcement 33. Right to Review Services, Facilities, and Records 33.1.00SD reserves the right to review any portion of the Services performed by CONSULTANT under this Agreement, and CONSULTANT agrees to cooperate to the fullest extent possible. 33.2.CONSULTANT shall furnish to OCSD such reports, statistical data, and other information pertaining to CONSULTANT's Services as shall be reasonably required by OCSD to carry out its rights and responsibilities under its agreements with its bondholders or noteholders and any other agreement relating to the development of the project(s)and in connection with the issuance of its official statements and other prospectuses with respect to the offering, sale, and issuance of its bonds and other obligations. 33.3.The right of OCSD to review or approve drawings, specifications, procedures, instructions, reports, test results, calculations, schedules, or other data that are developed by CONSULTANT shall not relieve CONSULTANT of any obligation set forth herein. 34. Severability If any section, subsection, or provision of this Agreement, or any agreement or instrument contemplated hereby, or the application of such section, subsection, or provision is held invalid, the remainder of this Agreement or instrument in the application of such section, subsection or provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby, unless the effect of such invalidity shall be to substantially frustrate the expectations of the Parties. 35. OCSD Safety and Human Resources Policies: OCSD requires all contractors and consultants to follow and ensure their employees and all subcontractors follow all State and Federal regulations as well as OCSD requirements while working at OCSD locations. If during the course of a contract it is discovered that OCSD policies, safety manuals, or contracts do not comply with State or Federal regulations then the CONSULTANT is required to follow the most stringent regulatory requirement at no cost to OCSD. CONSULTANT and all their employees and subcontractors,shall adhere to all applicable OCSD Safety and Human Resources Policies found at: OCSD.com, "Doc Central" (bottom of page), under"Safety". 36. Damage to OCSD's Property.,Any OCSD property damaged by CONSULTANT will be subject to repair or replacement by CONSULTANT at no cost to OCSD. 37. Freight(F.O.B. Destination): CONSULTANT assumes full responsibility for all transportation, transportation scheduling, packing, handling, insurance, and other services associated with delivery of all products deemed necessary under this Agreement. 38.Assignments: CONSULTANT shall not delegate any duties nor assign any rights under this Agreement without the prior written consent of OCSD. Any such attempted delegation or assignment shall be void. Orange County Sanitation Distnct 17 of 19 Specification No.S-2016-733BD 39. Changes In Control of CONSULTANT 39.1.In the event of a change in Control of CONSULTANT, OCSD shall have the option of terminating this Agreement by written notice to CONSULTANT. CONSULTANT shall notify OCSD within ten (10)days of the occurrence of a change in Control. As used in this Section, "Control" is defined as the possession, direct or indirect, of either: 39.1.1. the ownership or ability to direct the voting of fifty-one percent (51%) or more of the equity interests, value, or voting power in CONSULTANT; or 39.1.2. the power to direct or cause the direction of the management and policies of CONSULTANT, whether through ownership of voting securities, by contract, or otherwise. 40. Third Party Rights: Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than OCSD and CONSULTANT. 41. Non-Liability of OCSD Officers and Employees: No officer or employee of OCSD shall be personally liable to CONSULTANT, or any successor-in-interest, in the event of any default or breach by OCSD orfor any amount which may become due to CONSULTANT or to its successor, or for breach of any obligation of the terms of this Agreement. 42. Conflict of Interest and Reporting 42.1.CONSULTANT shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement. 42.2.CONSULTANT affirms that to the best of its knowledge there exists no actual or potential conflict between CONSULTANT'S families, business or financial interest or its Services under this Agreement, and in the event of change in either its private interests or Services under this Agreement, it will raise with OCSD any question regarding possible conflict of interest which may arise as a result of such change. 43.Authority to Execute:The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement and that by executing this Agreement, the Parties are formally bound. 44. Read and Understood:By signing this Agreement, CONSULTANT represents that he has read and understood the terms and conditions of the Agreement. 45. Entire Agreement This Agreement constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. Orange County Sanitation District 18 of 19 Specification No.S-2016-733BD 46. Notices: All notices under this Agreement must be in writing. Written notice shall be delivered by personal service or sent by registered or certified mail, postage prepaid, return receipt requested, or by any other overnight delivery service which delivers to the noticed destination and provides proof of delivery to the sender. Any facsimile notice must be followed within three (3)days by written notice. Rejection or other refusal to accept or the inability to deliver because of changed address or which no notice was given as provided hereunder shall be deemed to be receipt of the notice, demand or request sent. All notices shall be effective when first received at the following addresses: OCSD: Cori Voss, Buyer Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708-7018 CONSULTANT: Marc Jaude, President PM Web, Inc. 1 Pope Street Wakefield, MA 01880 IN WITNESS WHEREOF, the Parties hereto have hereunto set their hands the day and year indicated below. ORANGE COUNTY SANITATION DISTRICT Dated: By: Gregory C. Sebourn, PLS Chair, Board of Directors Dated: By: Kelly A. Lore Clerk of the Board Dated: By: Marc Dubois Contracts, Purchasing and Materials Management Manager PM WEB, INC. Dated: By: Print Name and Title of Officer IRS Employer's I.D. Number Orange County Sanitation Distrct 19 of 19 Specification No.S-2016-733BD OPERATIONS COMMITTEE Melting D310 TOBE.Or Dir. os/o3117 os/z4/17 AGENDA REPORT Item Item Number s 11 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations & Maintenance SUBJECT: LIGHT DUTY CNG TRUCK COOPERATIVE PROCUREMENT WITH NATIONAL AUTO FLEET GROUP GENERAL MANAGER'S RECOMMENDATION Approve the purchase of nine compressed natural gas light duty trucks using the National Joint Powers Alliance (NJPA) cooperative Contract Number 120716-NAF with National Auto Fleet Group for a total cost of $381,813 in accordance with Ordinance No. OCSD47, Section 2.03(B), Cooperative Purchases. BACKGROUND The Orange County Sanitation District (Sanitation District) fleet has approximately 200 cars and trucks. The Sanitation District budgeted for replacement of nine compressed natural gas (CNG) light duty trucks that are at the end of their useful life or that require excessive maintenance to keep operational. RELEVANT STANDARDS • Participate in National Joint Powers Authority (NJPA) cooperative purchasing program • Consider life-cycle costs in all decisions PROBLEM The Sanitation District identified nine light duty CNG trucks for replacement in FY 2016-17. The CNG fuel tank certification is expiring and must be replaced. CNG tank certifications last 15 years. Recertifying CNG tanks is impractical and cost prohibitive. PROPOSED SOLUTION Staff is seeking approval to purchase the nine replacement vehicles. TIMING CONCERNS Once the CNG tank certification expires, the CNG vehicle can no longer be used. Therefore, replacement of these vehicles before certifications expire is important. These light duty trucks are used by maintenance staff in the treatment plant and collections systems. Page 1 of 2 RAMIFICATIONS OF NOT TAKING ACTION If these vehicles are not replaced, the Sanitation District may incur excessive maintenance and exposure to safety and reliability issues. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION Seeking the lowest price, the Sanitation District is utilizing the NJPA agreement. The NJPA is a public agency that serves as a cooperative for over 50,000 member agencies nationally. The Sanitation District is a member of the NJPA at no cost. NJPA offers a multitude of cooperatively contracted products, equipment, and services opportunities to education and government entities throughout the country. This purchase of nine vehicles is in accordance with the NJPA agreement contract with National Auto Fleet Group that the Sanitation District is approved per the Purchasing Ordinance Section 2.03B. The Contract Number 120716-NAF Category Fleet Services, Parts&Equipment is in effect through January 17, 2021. The total cost includes California state sales tax, freight, and all applicable fees. All NJPA contracts have been competitively solicited nationally, reviewed, evaluated by committee, and recommended to the NJPA Board of Directors for award with the Minnesota public purchasing rules and regulations applicable to NJPA. Each solicitation is issued on behalf of NJPA members nationwide. Each request for proposal (RFP) advises all responders that NJPA desires a vendor who can sell and service participating members in all 50 states. All RFP respondents understand that these contracts will be under consideration for use by government, education, and non-profit member agencies throughout the United States. Using the NJPA Contract resulted in a total savings of $82,097 to the Sanitation District. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. These items have been budgeted through the Capital Equipment Budget Summary (Fiscal Year 2016-2017 Budget Section 8 (line Item: 822-Fleet Services, Pages 104-105). Date of Aooroval Contract Amount Continaencv 5/24/2017 $381,813 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: N/A Page 2 of 2 OPERATIONS COMMITTEE Melting D310 TOBE.Of Dir. os/o3117 os/z4/17 AGENDA REPORT Item Item Number 6 12 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Ed Torres, Director of Operations and Maintenance SUBJECT: REGIONAL ODOR AND CORROSION CONTROL SERVICES CONTRACT AMENDMENT 1 AND 2, SPECIFICATION NO. C-2013-565BD GENERAL MANAGER'S RECOMMENDATION A. Approve Amendment No. 1 to the Contract with Hill Brothers Chemical Company, for Regional Odor and Corrosion Control Services, Specification No. C-2013- 565BD (PO 104862-OB), to amend the Application Services cost to a unit price of $25/station/day and Field Services cost to a unit price of $25/station/day, for ferrous chloride; B. Approve Amendment No. 1 to the Contract with Hill Brothers Chemical Company, for Regional Odor and Corrosion Control Services, Specification No. C-2013- 565BD (PO 104861-OB), to amend the Application Services cost to a unit price of $75/station/day and Field Services cost to a unit price of $50/station/day, for magnesium hydroxide; and C. Approve Amendment No. 2 to the Contract with USP Technologies, for Regional Odor and Corrosion Control Services, Specification No. C-2013-565BD (PO 104863-013), to amend the Application Services cost to a unit price of $80/station/day, for calcium nitrate. BACKGROUND The Orange County Sanitation District (Sanitation District) currently operates eight temporary chemical addition stations in the collection sewer system for controlling hydrogen sulfide (rotten egg smell) and other odorous compounds. Three separate contracts with two companies (Hills Brothers Chemical Company and USP Technologies) provide the required service. Under the current contract, and within budgetary authorization, the Sanitation District has the flexibility to increase the number of odor chemical addition stations to meet Board- approved levels of service. When reviewing the three contracts, it was determined that the service fee per station was based on a "total daily rate" instead of a "per station" basis. Even though the existing contract provides for installation of new or additional chemical stations at the same per unit rate, the "daily rate" prevents staff from increasing the number of stations without a contract amendment. Therefore, staff is requesting a Page 1 of 3 contract language change from a "daily rate" to a "per station rate" to accommodate the intent of the service contract. RELEVANT STANDARDS • Maintain Odor Control Master Plan levels of service • 12 or fewer odor complaints per year under normal operating conditions in the collections system • Comply with SCAQMD Rule 402 - Nuisance PROBLEM The current maximum daily rates for all three contracts precludes flexibility in the billing structure to pay for additional chemical stations. PROPOSED SOLUTION Amend the current maximum daily Application and Field Service rates to per station per day rates. TIMING CONCERNS Not making the appropriate changes to the Application and Field Service rates will prevent adding additional chemical stations as staff identifies future needs. RAMIFICATIONS OF NOT TAKING ACTION If contract changes are not made,the Sanitation District may not be able to address future odor issues. PRIOR COMMITTEE/BOARD ACTIONS May 2013 - Board of Directors authorized execution of the three contracts for Specification No. C-2013-565BD, approved an annual unit price contingency of 15% per contract, and approved an annual service price contingency of 15% per contract. ADDITIONAL INFORMATION Management of odor and corrosion is a part of the services that the Sanitation District provides to achieve our Strategic Plan and Board-approved levels of service. It also helps extend the life of our assets. The Regional Odor and Corrosion Control System (ROCCS) program reduces hydrogen sulfides associated with odor generation and structural degradation caused by corrosion within the facilities. In addition, treatment in the regional trunks provides a secondary benefit of minimizing hydrogen sulfide and odors in the local communities and the treatment plants. Page 2 of 3 CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted in the FY16/17 budget, Collections Facilities Operations and Maintenance (Line item: Supplies: Section 6, Page 76). Project contingency funds will not be used for these amendments. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: • Amendment No. 1 to the Contract with Hill Brothers Chemical Company for ferrous chloride • Amendment No. 1 to the Contract with Hill Brothers Chemical Company for magnesium hydroxide • Amendment No. 2 to the Contract with LISP Technologies Page 3 of 3 AMENDMENT NO. 1 to CONTRACT Regional Odor and Corrosion Control Services (ROCCS) Specification No. C-2013-565BD THIS AMENDMENT NO. 1 TO THE CONTRACT, is made and entered into to be effective October 1, 2016, by and between the Orange County Sanitation District located at 10844 Ellis Avenue, Fountain Valley, CA 92708 (hereinafter referred to as "OCSD") and Hill Brothers Chemical Company located at 15017 East Clark Avenue, City of Industry, CA 91745 (hereinafter referred to as "Company") collectively referred to as the "Parties". WITNESSETH: WHEREAS, OCSD and Company have previously executed a Contract, which became effective July 1, 2013, for Regional Odor and Corrosion Control Services (ROCCS), specifically under the Contract as ROCCS relates to ferrous chloride; and, WHEREAS, the Parties wish to amend the Contract to make certain modifications which shall be called Amendment No. 1 ("Amendment'); and, WHEREAS, on May 24, 2017, the Board of Directors of OCSD, by minute order, authorized execution of this Amendment between OCSD and Company; and, WHEREAS, the Parties to the Contract desire that this Amendment be incorporated into the Contract and become a part thereof from the beginning; and, WHEREAS, the Parties desire that the Contract as modified by this Amendment shall constitute the sole and entire Contract among the Parties; 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: The Original Contract, which became effective July 1, 2013, is hereby amended as follows: 1. In Section 9. pricing (subsection 9.1, second bullet point) delete "ferrous chloride application services at a unit price of $100/day; and" and replace it with "ferrous chloride application services at a unit price of$25/station/day; and". 2. In Section 9. Pricing (subsection 9.1, third bullet point) delete "ferrous chloride field services at a unit price of$100/day; and" and replace it with "ferrous chloride field services at a unit price of$25/station/day; and". This modifying Amendment No. 1 is supplemental to the Original Contract, which became effective July 1, 2013, and is by reference made a part of said Contract. All of the terms, conditions and provisions thereof, unless specifically modified herein, shall continue in full force and effect. In the event of any conflict or inconsistency between the provisions of this Amendment and any of the provisions of the Original Contract the provisions of this Amendment No. 1 shall in all respects govern and control. Orange County Sanitation District Amendment No. 1 Page 1 of 2 Specification No. C-2013-565BD IN WITNESS WHEREOF, this Amendment No. 1 to the Contract has been executed in the name of OCSD by its officers thereunto duly authorized and executed by Company as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT HILL BROTHERS CHEMICAL COMPANY By: Gregory C. Sebourn, PLS Date Date Chair, Board of Directors Name: Kelly A. Lore Date Clerk of the Board Title: Marc Dubois Date Contracts, Purchasing and Materials Management Manager Orange County Sanitation District Amendment No. 1 Page 2 of 2 Specification No. C-2013-565BD AMENDMENT NO. 1 to CONTRACT Regional Odor and Corrosion Control Services (ROCCS) Specification No. C-2013-565BD THIS AMENDMENT NO. 1 TO THE CONTRACT, is made and entered into to be effective October 1, 2016, by and between the Orange County Sanitation District located at 10844 Ellis Avenue, Fountain Valley, CA 92708 (hereinafter referred to as "OCSD") and Hill Brothers Chemical Company located at 15017 East Clark Avenue, City of Industry, CA 91745 (hereinafter referred to as "Company") collectively referred to as the "Parties". WITNESSETH: WHEREAS, OCSD and Company have previously executed a Contract, which became effective July 1, 2013, for Regional Odor and Corrosion Control Services (ROCCS), specifically under the Contract as ROCCS relates to magnesium hydroxide; and, WHEREAS, the Parties wish to amend the Contract to make certain modifications which shall be called Amendment No. 1 ("Amendment'); and, WHEREAS, on May 24, 2017, the Board of Directors of OCSD, by minute order, authorized execution of this Amendment between OCSD and Company; and, WHEREAS, the Parties to the Contract desire that this Amendment be incorporated into the Contract and become a part thereof from the beginning; and, WHEREAS, the Parties desire that the Contract as modified by this Amendment shall constitute the sole and entire Contract among the Parties; 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: The Original Contract, which became effective July 1, 2013, is hereby amended as follows: 1. In Section 9. pricing (subsection 9.1, second bullet point) delete "magnesium hydroxide application services at a unit price of $150/day; and" and replace it with "magnesium hydroxide application services at a unit price of$75/station/day; and". 2. In Section 9. Pricing (subsection 9.1, third bullet point) delete "magnesium hydroxide field services at a unit price of $100/day; and" and replace it with "magnesium hydroxide field services at a unit price of$50/station/day; and". This modifying Amendment No. 1 is supplemental to the Original Contract, which became effective July 1, 2013, and is by reference made a part of said Contract. All of the terms, conditions and provisions thereof, unless specifically modified herein, shall continue in full force and effect. In the event of any conflict or inconsistency between the provisions of this Amendment and any of the provisions of the Original Contract the provisions of this Amendment No. 1 shall in all respects govern and control. Orange County Sanitation District Amendment No. 1 Page 1 of 2 Specification No. C-2013-565BD IN WITNESS WHEREOF, this Amendment No. 1 to the Contract has been executed in the name of OCSD by its officers thereunto duly authorized and executed by Company as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT HILL BROTHERS CHEMICAL COMPANY By: Gregory C. Sebourn, PLS Date Date Chair, Board of Directors Name: Kelly A. Lore Date Clerk of the Board Title: Marc Dubois Date Contracts, Purchasing and Materials Management Manager Orange County Sanitation District Amendment No. 1 Page 2 of 2 Specification No. C-2013-565BD AMENDMENT NO. 2 to CONTRACT Regional Odor and Corrosion Control Services (ROCCS) Specification No. C-2013-565BD THIS AMENDMENT NO. 2 TO THE CONTRACT, is made and entered into to be effective October 1, 2016, by and between the Orange County Sanitation District located at 10844 Ellis Avenue, Fountain Valley, CA 92708 (hereinafter referred to as "OCSD") and USP TechnologiesTM located at 900 Circle 75 Parkway NW, Suite 1330, Atlanta, GA 30339 (hereinafter referred to as "Company") collectively referred to as the "Parties". W/TNESSETH: WHEREAS, OCSD and Company have previously executed a Contract, which became effective July 1, 2013, for Regional Odor and Corrosion Control Services (ROCCS), specifically under the Contract as ROCCS relates to calcium nitrate; and, WHEREAS, the Parties wish to amend the Contract to make certain modifications which shall be called Amendment No. 2 ("Amendment'); and, WHEREAS, on May 24, 2017, the Board of Directors of OCSD, by minute order, authorized execution of this Amendment between OCSD and Company; and, WHEREAS, the Parties to the Contract desire that this Amendment be incorporated into the Contract and become a part thereof from the beginning; and, WHEREAS, the Parties desire that the Contract as modified by Amendment No. 1 and this Amendment shall constitute the sole and entire Contract among the Parties; 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. 2, it is mutually agreed as follows: The Original Contract, which became effective July 1, 2013, is hereby amended as follows: 1. In Section 9. Pricing (subsection 9.1, second bullet point) delete "calcium nitrate application and field services at a unit price of $160/day; and" and replace it with 'calcium nitrate application and field services at a unit price of$80/station/day; and". This modifying Amendment No. 2 is supplemental to the Original Contract, which became effective July 1, 2013, and is by reference made a part of said Contract. All of the terms, conditions and provisions thereof, unless specifically modified herein, shall continue in full force and effect. In the event of any conflict or inconsistency between the provisions of this Amendment and any of the provisions of the Original Contract the provisions of this Amendment No. 2 shall in all respects govern and control. Orange County Sanitation District Amendment No. 2 Page 1 of 2 Specification No. C-2013-565BD IN WITNESS WHEREOF, this Amendment No. 2 to the Contract has been executed in the name of OCSD by its officers thereunto duly authorized and executed by Company as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT LISP TECHNOLOGIESTM By: Gregory C. Sebourn, PLS Date Date Chair, Board of Directors Name: Kelly A. Lore Date Clerk of the Board Title: Marc Dubois Date Contracts, Purchasing and Materials Management Manager Orange County Sanitation District Amendment No. 2 Page 2 of 2 Specification No. C-2013-565BD OPERATIONS COMMITTEE Melting D310 TOBE.Or Dir. 0 03117 OS/24/17 AGENDA REPORT Item Item Number 7 13 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: James E. Colston, Director of Environmental Services SUBJECT: INDUCTIVELY COUPLED PLASMA MASS SPECTROMETER AND INDUCTIVELY COUPLED PLASMA OPTICAL EMISSION SPECTROMETER LABORATORY INSTRUMENTS GENERAL MANAGER'S RECOMMENDATION Award a purchase order to Perkin Elmer Health Services, Inc., for an Inductively Coupled Plasma Mass Spectrometer (ICPMS) and an Inductively Coupled Plasma Optical Emission Spectrometer (ICP-OES), Specification No. E-2017-81213D, for a total amount not to exceed $275,610.64. BACKGROUND The two instrument purchases are for the replacement of an ICPMS instrument purchased in 1999 and an ICP-OES purchased in 2005. Both instruments have exceeded the manufacturer serviceable life of eight years and parts to repair the existing instruments are unobtainable. Additionally, the software from the current instruments are incompatible with Orange County Sanitation District's (Sanitation District) latest Windows operating platform, limiting their utilities. The Laboratory, Monitoring, and Compliance (LMC) Division is required by the Sanitation District's Resource Protection Division to monitor for heavy metals in industrial effluent coming into both Plant Nos. 1 and 2. The Sanitation District's ocean discharge permit requires a routine monitoring of heavy metals at Plant Nos. 1 and 2 influent and effluent sites. Also, the Sanitation District's ocean discharge permit requires the monitoring of ocean sediment at routine ocean stations for a suite of heavy metals. The new ICPMS and ICP-OES instruments will have the technology necessary for increased sensitivity to meet current and future regulatory requirements for the analysis of heavy metals in wastewater, industrial wastewater, ocean sediments, fish tissues, and ocean seawater. RELEVANT STANDARDS • Consider life-cycle costs in all decisions • Maintain a culture of improving efficiency • Maintain environmental regulatory oversight by all regulators Page 1 of 2 ADDITIONAL INFORMATION The Sanitation District posted a request for bids on February 9, 2017 and three bids were received by the Sanitation District on the due date of March 16, 2017. The bids were evaluated in accordance with Sanitation District policies and procedures and included the purchase price of the instrument plus three years of warranty service in addition to the two-year manufacturer's warranty. Perkin Elmer Health Services, Inc. was deemed the lowest responsive and responsible bidder. The costs from Perkin Elmer Health Services, Inc. includes the ICPMS NexION 2000B instrument for $128,144.74, the ICP-OES Optima 8300 for $80,555.18, plus $46,500.48 for the three years of extended warranty. The total bid is $273,523, of which $227,023.16 will be paid at completion of installation. The remaining extended service agreement will be paid in subsequent years with approved operating budget funds after the initial warranty period has lapsed in accordance with the contract. Summary information on the bid opening for the purchase of the ICPMS and ICP-OES is as follows: Bidder Amount of Bid Perkin Elmer Health Services, Inc. $ 273,523 Shimadzu Scientific Instruments, Inc. $ 275,829 Thermo Electron North America LLC $ 293,984 After April 1, 2017, the City of Fountain Valley raised the sales tax from 7.75% to 8.75%. Therefore, the sales tax of the ICPMS and ICP-OES went from $16,174.24 to$18,261.24 for the Perkin Elmer bid. The revised grand total of the Perkin Elmer bid is $275,610.64. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitations District's Ordinance No. OCSD47. This item has been budgeted in Capital Equipment, Section 8, p.147. Project contingency funds will not be used to fund this purchase. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: N/A Page 2 of 2 OPERATIONS COMMITTEE Melting D310 TOBE.Or Dir. os/o3117 os/z4/17 AGENDA REPORT Item Item Number 8 14 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: James E. Colston, Director of Environmental Services SUBJECT: INLAND EMPIRE REGIONAL COMPOSTING AUTHORITY CONTRACT AMENDMENT 2016-2017 GENERAL MANAGER'S RECOMMENDATION Approve Contract Amendment number 4600001879-002 with Inland Empire Regional Composting Authority (IERCA)for the Orange County Sanitation District to pay IERCA to receive and compost Orange County Sanitation District's biosolids at a base fee (tipping fee) of $56 per wet ton, plus an administrative fee of $2 per wet ton and any other adjustments provided for in the original agreement. This contract amendment shall serve as the second annual renewal of three one-year renewal options of the original agreement in a total annual amount not to exceed $900,000/year for IERCA to receive and compost up to 50 wet tons per day (Monday thru Friday) of Orange County Sanitation District's biosolids. BACKGROUND On June 1, 2015, Orange County Sanitation District (Sanitation District) executed a biosolids management contract with IERCA to receive and compost up to 50 wet tons per day of biosolids at a tipping fee of$54 per wet ton and an administrative fee of$2 per wet ton exclusive of trucking costs. The agreement term was for one-year, commencing on the date of execution of the agreement, with three one-year renewal options in a total annual amount not to exceed $900,000/per year. In July 2016, IERCA exercised the first renewal and adjusted the tipping fee from $54 per wet tons of biosolids to $55 per wet tons of biosolids, which is an increase of$1 per ton. Presently, IERCA intends to exercise the second annual renewal and adjust the tipping fee from $55 per wet ton of biosolids to $56 per wet ton, which is an increase of $1 per ton.The administrative fee of$2 per wet ton of biosolids remains the same.With a hauling fee of $14.99 per ton (services provided by Denali contract executed on May 3, 2016), the total cost is $72.99 per wet ton of biosolids. RELEVANT STANDARDS • Ocean Discharge Permit, NPDES CA0110604 §VI.C.4.b Sludge (Blosolids) Requirements • Resolution No. OCSD 13-03 Biosolids Recycling Policy • Safe beneficial reuse of Biosolids Page 1 of 3 PROBLEM The existing biosolids management contract between IERCA and the Sanitation District expires on June 1, 2017. If the Sanitation District does not renew the contract, the Sanitation District's biosolids management diversity will be lessened. PROPOSED SOLUTION Approve the contract amendment to continue biosolids management diversity and sustainability while supporting a local, in-basin management option. TIMING CONCERNS The existing biosolids management contract between IERCA and the Sanitation District expires on June 1, 2017. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District will not be able to utilize this local biosolids management option that is within the basin. PRIOR COMMITTEE/BOARD ACTIONS July 2016 -Approved Contract Amendment number 4600001879-001 with Inland Empire Regional Composting Authority (IERCA) and the Orange County Sanitation District. May 2015 - Approved an Agreement with Inland Empire Regional Composting Authority (IERCA) to receive and compost up to 50 wet tons per day of the Orange County Sanitation District's Class B biosolids. ADDITIONAL INFORMATION N/A CEQA CEQA Analysis Reference: November 7, 2012 Agenda Report - Waste Disposal Agreement with Orange County Waste and Recycling and May 27, 2015 Agenda Report- Composting Agreement with Inland Empire Regional Composting Authority. FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. (Line item: Section 5, Page 6). Page 2 of 3 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: 2017 Contract Amendment- 4600001879-002 2016 Contract Amendment- 4600001879-001 2015 Original Contract-4600001879 Page 3 of 3 INLAND EMPIRE REGION��i COMPOSTING A U T 11 O R I T Y CONTRACT AMENDMENT NUMBER: 4600001879-002 TO CONTRACT NUMBER: 4600001879 FOR THE REUSE OF BIOSOLIDS THIS CONTRACT AMENDMENT NUMBER 4600001879-002, is made and entered into this day of , 2017, by and between the Inland Empire Regional Composting Authority, a Joint Powers Authority, organized and existing in the County of San Bernardino under and by virtue of the laws of the State of California (hereinafter referred to as "Authority"or"IERCF"), and the Orange County Sanitation District("the District')shall revise the Contract as follows: REVISE SECTION 7. FEE FOR BIOSOLIDS REUSE, ADDING A PARAGRAPH, TO READ: 7.5 Commencing on July 1, 2017, the District shall pay to the Authority for Biosolids, received and processed, at a base fee of$56.00 per wet ton, plus an administrative fee of $2.00 per wet ton, and any other adjustments provided for in this Agreement. The District shall pay all hauling and transportation-related costs. REVISE SECTION 12, DURATION OF AGREEMENT, ADDING A PARAGRAPH, TO READ: Effective with full execution of Contract Amendment Number 4600001879-002, this Agreement will continue in effect for a period of one (more)year; until June 1, 2018. The Parties may, upon mutual written agreement, extend the duration of the Agreement on a year-to-year basis with up to one more annual extension. The parties hereto have caused the Contract to be entered as of the day and year written above. INLAND EMPIRE REGIONAL ORANGE COUNTY SANITATION DISTRICT: COMPOSTING AUTHORITY: Jeff Ziegenbein (Date) Gregory C. Seboum, PLS (Date) Project Manager Chair of the Board of Directors Kelly A. Lore (Date) Clerk of the Board Contract Amendment Number 4600001879-002 HD 1 of 1 4/6/2017 INLAND EMPIRE REGIONAL COMPOSTING ry A U T H O R I T Y CONTRACT AMENDMENT NUMBER: 460000187MOI TO CONTRACT NUMBER:4600001879 FOR THE REUSE OF BIOSOLIDS THIS S CONTRACT AMENDMENT NUMBER 4600001879-001, is made and entered into this day of 2016, by and between the Inland Empire Regional Composting Authority, a nt Powers Authority, organized and existing in the County of San Bernardino under and by rtue of the laws of the State of California (hereinafter referred to as "Authority"or"IERCF"),and the Orange County Sanitation District('the District")shall revise the Contract as follows: REVISE SECTION 2. BIOSOLIDS TRANSPORTATION AND REUSE, TO READ: Strike all of the current text of Section 2.4; replacing it with: "2A The District shall use farm bed trailers to transport Biosolids to the Site. Trailers delivering Biosolids to the Site must meet the following clearance specifications to off-load material into the biosolids hoppers:" Strike all of the current text of Section 2.4.2 (because it is specific to end dump trailers). REVISE SECTION 7. FEE FOR BIOSOLIDS REUSE, TO READ: Strike all of the current text of Section 7.1; replacing it with: "7.1 The District shall pay to the Authority for Biosolids, received and processed, at a base fee of$55.00 per wet ton, plus an administrative fee of $2.00 per wet ton, and any other adjustments provided for in this Agreement. The District shall pay all hauling and transportation-related costs." REVISE SECTION 12, DURATION OF AGREEMENT, ADDING A PARAGRAPH TO READ: Effective with full execution of Contract Amendment Number 4600001879-001, this Agreement will continue in effect for a period of one (more)year; until June 1, 2017. The Parties may, upon mutual written agreement, extend the duration of the Agreement on a year-to-year basis with up to two more annual extensions. contract Amendment Number 4600001879.001 HD 1 of 2 611012016 AS WITNESS HEREOF, the parties hereto have caused the Contract to be entered as of the day and year written above. INLAND EMPIRE REGIONAL ORANGE CO TY SANITATION DISTRICT: COMPOSTING AUTHORITY: Jeff Zi ?ga b6in (Date) 411ore on (Date) Project Manager Board o Directors `1 (Date) card Contract Amendment Number 4600001879-001 HD 2 of 2 6/10/2016 � 1 INLAND EMPIRE REGIONAL COMPOSTING A U T H O R I T Y AGREEMENT NUMBER 4600001879 FOR THE REUSE OF BIOSOLIDS This Agreement, for the Reuse of Biosolids ("Agreement"), dated �,nne (1 2or5. 2015 ("Effective Date"), and is between the Inland Empire Regional Composting Authority (IERCA, or 'the Authority") and the Orange County Sanitation District ("the District"). The Authority and the District are referred to in this Agreement collectively as "the Parties." The Authority is a Joint Powers Authority formed by and between the Inland Empire Utilities Agency (IEUA), a Municipal Water District organized and operating pursuant to the California Water Code Sections 71000, er seq., and County Sanitation District No. 2 of Los Angeles County (LACSD), a special district organized and operating pursuant to the California Health and Safety Code Sections 4700,el seq. The Authority operates the Inland Empire Regional Composting Facility(IERCF) located at 12645 Sixth Street, Rancho Cucamonga, CA 91739 ("the Site").The Authority has all permits and approvals necessary for operation of the Site and desires to reuse Biosolids produced at the District's facilities. I. DEFINITIONS 1.1 Biosolids means municipal sewage sludge resulting from the treatment of wastewater at the District's facilities that is digested and meets Class B and Table 3 quality standards for land application under Part 503 of Title 40 of the Code of Federal Regulations, "Standards for the Use and Disposal of Sewage Sludge" ("Part 503 Rule"), and dewatered to an annual average of approximately 15%total solids or greater. 1.2 State Certified Weigh Station means any truck weigh station permitted by the State of California to certify weights for commerce. 1.3 Weighmaster's Certificates means certificates obtained in accordance with weighing procedures prescribed in Chapter 7(commencing with Section 12700)of Division 5 of the California Business and Professions Code administered by the Division of Measurement Standards of the California Department of Food and Agriculture. 1 2. BIOSOLIDS TRANSPORTATION AND REUSE 2.1 The District shall transport up to approximately 250 wet tons per week, or 50 wet tons per day of Biosolids from its facilities to the Site for composting, Monday through Friday. This quantity is subject to change and may be adjusted by agreement of the Parties. 2.2 Site delivery hours are from 6:30AM to 2:30PM, Monday through Friday. Hours may change at the sole discretion of the Authority. 2.3 In event the District wishes to deliver to the Site sewage sludge that does not meet the Part 503 Rule Class B Biosolids Pathogen Reduction Requirements specific to mean cell residence time and temperature for anaerobic digestion, the District shall notify the Authority within reasonable time and request approval to deliver for compost such material in accordance with applicable legal requirements as detailed in Section 3 of this Agreement. The Authority reserves the right not to accept and process such sewage sludge material at the Site. 2.4 The District shall use end dump trailers or fans beds to transport Biosolids to the Site. End dumps may not have extended aprons on the rear of the trailers. Trailers delivering Biosolids to the Site must meet the following clearance specifications to off-load material into the biosolids hoppers: 2.4.1 All live bottom belt type trailers require a minimum clear distance of 15" between the ground surface and any trailer structure beyond or past the rear tires. This requirement does not apply to any flexible structure like a mud flap. Flexible structures may be removed or re-positioned to allow adequate clearance; 2.4.2 All end dump trailers must possess the required belt trailers clearance in addition to having a minimum clearance of 19" between the ground surface and any fixed trailer structure when the trailer is in the fully raised or in the dumping position. 2.5 The Authority shall compost all Biosolids in accordance with applicable legal requirements as detailed in Section 3 of this Agreement. The Authority may not use any other method of reuse for the Biosolids without the prior written agreement of the District. 2.6 The Authority shall determine and record the total tonnage delivered to the Site. The truck weigh station at the Site is certified by the State and will be used to issue a Weighmaster's Certificate for each load measured. The Authority shall use the Site's measured tonnage for its billing to the District. Weighmaster's Certificates submitted by the Authority will show the certified gross weight of each load in each billing and the certified tare weight of each vehicle. 3. PERMITS AND REGULATORY COMPLIANCE 3.1 The Authority shall obtain and maintain in effect all necessary licenses, Permits, and other approvals legally required in order to perform all activities and operations provided for in this Agreement. The Authority and all processes utilized at the Site shall comply with all applicable local, state, and federal laws, rules, regulations, and pronouncements, including but not limited to the following: 2 3.1.1 The Authority shall perform all activities and operations in accordance with the requirements, as applicable, of the California Regional Water Quality Control Board- Santa Ana Region, California State Water Resources Control Board, including the General Order (General Waste Discharge Requirements for the Discharge of Biosolids to Land for Use in Agricultural, Silvicultural, Horticultural, and Land Reclamation Activities), Parts 257 and 503 of Title 40 of the Code of Federal Regulations (Criteria for Classification of Solid Waste Disposal Facilities and Practices-Application to Land Used for the Production of Food Chain Crops and Standards for the Use and Disposal of Sewage Sludge, respectively), South Coast Air Quality Management District Rule 1133.2. The Authority shall also operate in compliance with all current waste discharge requirements contained in the NPDES permits for the District's facility(s)that serves as the source(s)of Biosolids delivered to the Authority. District shall make their NPDES permit available to the Authority upon request. 3.1.2 The Authority acknowledges that Part 503 of Title 40 of the Code of Federal Regulations is a self-implementing rule and that the Authority's activities and operations performed at the Site must comply with all applicable general requirements of the rule, including, but not limited to: pollutant limits, management practices, operational standards, monitoring,recordkeeping, and reporting.The Authority shall provide all information relevant to the activities and operations at the Sites that the District may need or request to complete NPDES or other permit applications or reports. 3.2 The District shall obtain and maintain in effect all necessary licenses,permits,and other approvals legally required in order to perform all activities and operations provided for in this Agreement. The District and Biosolids-generating processes at its facilities shall comply with all applicable local, state, and federal laws, rules, and regulations and orders, including but not limited to Part 503 of Title 40 of the Code of Federal Regulations. The District may transport to the Site only Biosolids that meet the Class B pathogen reduction requirements of 503.32(b), vector attraction reduction requirements of 503.33(b)(1), and metals concentration limits of 503.13(b)(3)Table 3, unless other arrangement are made per Section 2.3. 4. SITE INSPECTION, MONITORING,RECORDKEEPING,AND REPORTS 4.1 The Authority shall grant the District and its representatives access to the Site during normal business hours to conduct inspections of the composting activities. The District shall likewise grant the Authority and its representatives access to its treatment facilities during normal business hours. 4.2 The Authority shall keep complete and correct daily records of all composting activities, including: the date, the origin, and quantity of each load of Biosolids composted; site management practices; and any sampling and laboratory test results regarding the composting program. The Authority shall grant the District timely access to all such records. Likewise, the Authority shall have timely access to the District's Biosolids records and data demonstrating compliance with all federal,state,and local laws,regulations and orders. 3 4.3 The Authority shall submit monthly reports to the District that demonstrate compliance with all required permits and authorizations. The Authority shall submit the reports within 30 days after the close of each reporting period.The reports must include, at a minimum, a description of all activities and operations performed during the reporting period, the items described in Section 4.2, and a certification that all activities and operations were performed in compliance with all applicable regulations. The Authority shall forward to the District, within five days of receipt or transmission, copies of all correspondence with regulatory agencies in regards to the activities or operations performed at the Site. Similarly, the District shall furnish monthly, annual, and other periodic reports to the Authority detailing and certifying compliance with permits and applicable regulations. The District shall provide all information relevant to its operations that the Authority may need or request to complete regulatory reports or permits. 4.4 The Parties agree to notify one another by no later than the next business day of its receipt of any notice, whether formal or informal, of a legal, governmental, judicial, administrative, or similar proceeding, action, or enforcement, pending or threatened, that may affect its ability to lawfully fulfill obligations of this Agreement. The District shall forward to the Authority, within 5 days of receipt or transmission by the District, copies of all correspondence with regulatory agencies in regards to its Biosolids operations. 4.5 The District shall perform all sampling for any monitoring and laboratory analyses of Biosolids required by any federal, state, or local laws, regulations or orders prior to transporting such Biosolids to the Authority. The Authority shall perform all other monitoring and laboratory analyses required by any federal, state, or local laws, regulations, or orders including, but not limited to, any monitoring or laboratory analysis of Biosolids after receipt by the Authority. 5. COMPOSITION OF BIOSOLIDS The District warrants that all Biosolids released to the Authority will be non-hazardous under Title 22, Division 4.5, Chapter 11, Article 3 of the California Code of Regulations. Neither the District nor the Authority shall add any material to the Biosolids that is classified as hazardous, or which creates by-products or residues classified as hazardous, under federal or state laws,regulations,or orders. 6. INCLEMENT WEATHER 6.1 The Parties shall each provide any facilities necessary to ensure their ability to remove, transport,and compost Biosolids during typical inclement weather. 6.2 The Parties acknowledge that severe weather conditions may reduce or suspend the Parties' abilities to deliver and/or compost Biosolids. If either Party reasonably determines that a reduction or suspension is necessary, the Party shall provide the other Party, to the extent reasonably possible: 1)a 24-hour minimum notice of reduction or cessation of operations; and 2) an estimate of when the operations will resume. See also Section 11,Force Majeure. 4 7. FEE FOR BIOSOLIDS REUSE 7.1 The District shall pay to the Authority for Biosolids received and processed at a base fee of$54.00 per wet ton, plus an administrative fee of$2.00 per wet ton, and any other adjustments provided for in this Agreement. The District shall pay all hauling and transportation-related costs. 7.2 The Authority shall submit invoices to the District on a monthly basis and the District shall make payment to the Authority within thirty(30)days of receipt. 7.3 If the term of this Agreement extends beyond the initial one-year term provided for in Section 12 below,either the District or the Authority may request an adjustment in the fee. 7.4 If during the tern of this Agreement, the Authority incurs a new and unforeseen fee or other cost not previously paid by the Authority, the Authority may request an adjustment in the fee. The Authority shall provide written documentation to the District verifying the increased cost. Rate increases during the current tern will not exceed the annual Consumer Price Index for the Los Angeles-Orange County Metropolitan Area for all urban consumers (CPI-U) available as of the date of the requested rate increase. The annual CPI-U will not be justification for any rate reduction. 8. OWNERSHIP OF BIOSOLIDS 8.1 The District shall retain ownership of all Biosolids during transport, up to and including off-loading of the Biosolids from the District's trucks. The District shall at all times manage, direct, oversee, and/or conduct operations during transport, and is responsible for leakage prevention and spill mitigation, and compliance with all applicable environmental regulations. 8.2 The Authority shall become the owner of all Biosolids delivered to the Site after off-loading and acceptance of the Biosolids from the District's trucks. The Authority shall compost all Biosolids in accordance with this Agreement. The Authority may not use or dispose of the Biosolids in any other manner without written consent from the District. The Authority shall comply with all applicable laws and regulations in connection with the marketing,use,and sale of the composted Biosolids. 9. INSURANCE The District shall require its contractors transporting Biosolids to the Site to obtain and keep in force during the term of this Agreement, at their sole expense, comprehensive general liability insurance with endorsements naming the Authority as an additional insured, covering the transportation of Biosolids in any vehicle whether owned or leased, whether liability is attributable to the District or the Authority. The policy or policies must insure the Authority, its directors, officers, employees, and agents against all claims arising out of or in connection with the activities and operations relating to the transportation and delivery of Biosolids to the 5 Facility. The coverage must provide the following minimum limits, which may be increased during the term of this Agreement as requested by the Authority in writing and agreed to in writing by the District: Automobile Liability: Bodily Injury $5,000,000 each person $5,000,000 each occurrence Property Damage $5,000,000 each occurrence $5,000,000 aggregate General Liability: Bodily Injury $5,000,000 each occurrence $5,000,000 aggregate products and completed operations Property Damage $5,000,000 each occurrence $5,000,000 aggregate Coverage must be provided by an insurer that has at least an "A" Policy Holder's Rating and"X" Financial Rating in accordance with the current Best's Key Rating Guide. 9.1 The Contractor shall provide the Authority with evidence of coverage by providing certificates of insurance and endorsements and,at the Authority's request, copies of all required policies plus all attached endorsements for the Authority's review. 9.2 The Contractor shall demonstrate to the Authority that it carries Workers Compensation Insurance in accordance with legal requirements and Waiver of Subrogation. 10. INDEMNITY In contemplation of the provisions of Section 895.2 of the California Government Code imposing certain tort liability jointly upon public entities solely by reason of such entities being parties to an agreement as defined by Section 895 of the Government Code,each Party,pursuant to the authorization contained in Sections 895.4 and 895.6 of the Government Code, hereby agrees to and shall indemnify and hold harmless the other Party,and its elected officials,officers, agents, and employees from and against any and all losses, liability, damages, claims, suits, actions, and administrative proceedings or demands (including reasonable attorney's fees) relating to acts or omissions of the indemnitor, its officers, agents, or employees arising out of or incidental to the performance of any of the provisions of this Agreement. Neither Party assumes liability for the acts or omissions of persons other than each Party's respective officers, agents,or employees. In the event judgment is entered against the Parties because of joint or concurrent negligence of the Parties, or their officers, agents, or employees, an apportionment of liability to pay such judgment shall be made by a Court of competent jurisdiction. This section shall survive termination of the Agreement. 6 11. FORCE MAJEURE Neither the Authority nor the District shall be responsible or liable for failure to meet their respective obligations under this Agreement if such failure is due to causes beyond the Authority's or the District's control. Such causes include, but are not limited to: strikes, fire, flood,civil disorder,acts of God or of a public enemy,acts of the federal government,or any unit of state or local government in either its sovereign or contractual capacity,epidemics,freight embargoes or delays in transportation, and changes in federal, state,or local law that renders the District's Biosolids impermissible for transportation or composting. Each Party shall immediately notify the other Party via email to administrative staff and in writing, in accordance with Section 15,of the occurrence of any condition believed to constitute a force majeure under this section. If a condition of force majeure exists for 30 days or more, either Party may terminate this Agreement by giving notice in writing in accordance with Section 15. The notice will become effective 24 hours after receipt. 12. DURATION OF AGREEMENT This Agreement will be effective on the Effective Date and will continue in effect for a period of one year. The Parties may, upon mutual written agreement,extend the duration of the Agreement on a year to year basis with up to three annual extensions. 13. SUSPENSION,TERMINATION, AND EARLY TERMINATION 13.1 Suspension. The Authority may suspend its receipt of Biosolids if it determines that the District can no longer timely and legally perform the required obligations of this Agreement. Likewise, the District may suspend shipments of Biosolids if it determines that the Authority can no longer timely or legally perform the required services, or if unacceptable conditions exist at the Site.The suspending Party may lift the suspension and allow operations to resume if it determines that any unacceptable conditions have been corrected. 13.2 Termination. Either Party may terminate this Agreement by providing the other Party with a 90-day notice in writing in accordance with Section 15. 13.3 Early Termination. The Authority and the District, by written agreement, may terminate this Agreement at any time. 14. ADDITIONAL PROVISIONS 14.1 Entire Agreement. This Agreement represents the entire agreement and understanding between the Authority and the District as to those matters stated in this Agreement. No prior oral or written understanding is of any force or effect in regard to any matter covered by this Agreement. 7 14.2 Assignment. Neither the Authority nor the District may sell, assign, or sub- contract its interest and/or obligations in this Agreement without the prior written and mutual agreement of the Parties. 14.3 Governing Law. The provisions of this Agreement will be interpreted and enforced in accordance with the laws of the State of California. 14.4 Counterparts. This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 15. NOTICE Except as otherwise required, any notice,payment, or instrument required or permitted to be given under this Agreement will be deemed received upon a signed receipt of personal delivery or 72 hours after deposit in any United States Post Office, registered or certified, postage prepaid and addressed to the Party for whom intended,as follows: TO THE AUTHORITY: Inland Empire Regional Composting Authority Attn:Jeff Ziegenbein 12645 Sixth Street Rancho Cucamonga,CA 91739 TO THE DISTRICT: Orange County Sanitation District Attn:General Manager Post Office Box 8127 Fountain Valley,Ca 92728-8127 [SIGNATURE PAGE FOLLOWS] 8 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT By: Tom B amish air fthe Board Directors By: elly Wore Cie 4f the Board of Directors APPROVED AS TO FORM: By: G ral o sel INLAND EMPIRE REGIONAL COMPOSTING AUTHORITY C-2n, Jeff Ziegen ei Project Manager 9 OPERATIONS COMMITTEE Melting D310 TOBE.Or Dir. os/o3117 os/z4/17 AGENDA REPORT Item Item Number 9 IS Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: CAPITAL IMPROVEMENT PROGRAM CONTRACT PERFORMANCE REPORT GENERAL MANAGER'S RECOMMENDATION Receive and file the Capital Improvement Program Contract Performance Report for the period ending March 31, 2017. BACKGROUND The Capital Improvement Program involves awarding and managing many construction and consulting contracts. In 2008, the Orange County Sanitation District (Sanitation District) Board of Directors began awarding contingencies along with construction and consulting contracts. The contingencies allow the General Manager to approve change orders for construction contracts and amendments for consulting contracts up to the amount of the approved contingency. This practice reduces administrative costs, expedites resolution of project issues that arise, helps avoid Contractor delay claims, and facilitates efficient management of many contracts. The Capital Improvement Program Contract Performance Report summarizes construction and consulting contract performance and activities for the quarter ending March 31, 2017. This report will be updated quarterly. RELEVANT STANDARDS • Ensure the public's money is wisely spent ATTACHMENT The following attachments)are included in hard copy and may also be viewed on-line at the OCSD website (wwwocsd.com) with the complete agenda package: • Capital Improvement Program Contract Performance Report for the period ending March 31, 2017 JM:dm:gc Page 1 of 1 ORANGE COUNTY SANITATION DISTRICT Capital Improvement Program Contract Performance Report For the period ending March 31, 2017 DATE: May 3, 2017 TO: Orange County Sanitation District Board of Directors FROM: James D. Herberg, General Manager Through: Rob Thompson, Director of Engineering This report summarizes the status, activities, and performance of public works construction contracts and agreements with design consultants. This report also identifies the names and status of projects being performed under master budgets for facilities engineering, planning studies, and research. PART 1 - CONSTRUCTION CONTRACTS When the Orange County Sanitation District (Sanitation District) Board awards a construction contract, a contingency is also approved which allows the General Manager to approve contract change orders up to the amount of the contingency. One of the purposes of this report is to document how that contingency is managed and how much of the contingency is utilized.A project's change order rate can only be documented when the work is complete. As such, the change order performance charts in this report are based only on projects closed since the Board began approving contingencies in 2008. Activity in Last Quarter IT Server Room Cooling Improvements, Final Completion January 3, 2017 Project No. FE12-10 Consolidated Demolition and Utility Contract Award January 25, 2017 Improvements at Plant 2, Project No. P2-110 Trunk Line Odor Control Improvements, Final Completion February 6, 2017 Project No. P1 123 Page 1 of 5 ORANGE COUNTY SANITATION DISTRICT Capital Improvement Program Contract Performance Report For the period ending March 31, 2017 Anticipated Activity in Next Quarter Carbon Canyon Clay Pipe Repairs, Contract Award 04-Apr-17 Project No. FE16-08 Gas Compressor Building Piping Contract Award 26-Apr-17 Replacement at Plant 2, Project No. FE15-06 Boiler System Rehabilitation and Scrubbers H Final Completion 04-May-17 & I Demolition at Plant 2, Project No. P2-106 Final Effluent Sampler and Building Area Final Completion 04-May-17 Upgrades, Project No. J-110 Plant No. 2 Trickling Filter Chemical Odor Final Completion 12-May-17 Control, Project No. FE13-04 Page 2 of 5 ORANGE COUNTY SANITATION DISTRICT Capital Improvement Program Contract Performance Report For the period ending March 31, 2017 PART 2 — DESIGN CONSULTANT AGREEMENTS The Sanitation District engages design consultants through Professional Design Services Agreements (PDSAs), Professional Consultant Services Agreements (PCSAs), and Master Professional Services Agreements (Master PDSAs). PDSAs are used to obtain design engineering services, and PCSAs are a subsequent agreement with the design consultant to provide support services during construction. Master PDSAs are issued to a pool of 12 pre-qualified consultants to be used for smaller projects. On those smaller projects, the Sanitation District solicits task order proposals from three or four of the firms, and awards a task order to the most qualified consultant. There are currently three sets of Master PDSAs, including sets from 2009, 2012, and 2015. The two older sets have expired, meaning no new task orders can be issued under them, but previously-issued task orders remain active until completed. The two older sets of Master PDSAs limited task orders to $100,000. The current 2015 Master PDSAs have a $200,000 task order limit per Sanitation District Ordinance No. OCSD47. Activity in Last Quarter Consolidated Demolition and Utility PCSA Award January 25, 2017 Improvements at Plant 2, Project No. P2-110 AS1 RAS Header Piping Replacement at RFP February 3, 2017 Plant 1, Project No. P1-129 Advertisement Headworks Modifications at Plant 2 for RFP February 21, 2017 GWRS Final Expansion, Project No. P2-122 Advertisement Page 3 of 5 ORANGE COUNTY SANITATION DISTRICT Capital Improvement Program Contract Performance Report For the period ending March 31, 2017 Anticipated Activity in Next Quarter Digester Gas Facilities Rehabilitation, RFP April 25, 2017 Project No. J-124 Advertisement Natural Gas Pipelines Replacement at Plant RFP May 3, 2017 Nos. 1 and 2, Project No. J-127 Advertisement Bay Bridge Pump Station Replacement, RFP May 19, 2017 Project No. 5-67 Advertisement Project Management Information System, PDSA Award May 24, 2017 Project No. J-128 Ocean Outfall System Rehabilitation, PCSA Award May 24, 2017 Project No. J-117 Interim Food Waste Receiving Facility, RFP June 1, 2017 Project No. P2-124 Advertisement Headworks Modifications at Plant 2 for PDSA Award June 28, 2017 GWRS Final Expansion, Project No. P2-122 Page 4 of 5 ORANGE COUNTY SANITATION DISTRICT Capital Improvement Program Contract Performance Report For the period ending March 31, 2017 PART 3 — MASTER BUDGET PROJECTS The Board-adopted budget for Fiscal Years 2016-17 and 2017-18 includes master program budgets that allow staff to more quickly initiate, execute, and manage smaller projects that fit within the scope of a particular program. The projects chartered under these program budgets are referred to as sub-projects, and are managed to the same standards as projects specifically listed in the adopted budget. A status table for each of these programs listing the sub-projects is attached. Master Program Title Status Table Planning Studies Table 3.1 Research Program Table 3.2 Facilities Engineering Program — Collections Table 3.3 Facilities Engineering Program — Plant Table 3.4 Information Technology Capital Program Table 3.5 CHARTS AND TABLES Chart 1.1 — Program Overview Chart 1.2 — Change Order Rates Over Time—All Closed Projects Chart 1.3—Change Order Rates Over Time—Collections Projects Chart 1.4 — Change Order Rates Over Time— Plant Projects Table 1.1 — Summary of Closed Projects by Category Table 1.2— Construction Contract Performance—Active Projects Table 1.3—Active Construction Contracts by Contractor Table 2.1 —Active Design Consultant Contracts by Consultant Table 2.2—Activity Report for 2012 Master Professional Design Services Agreements Table 2.3—Activity Report for 2015 Master Professional Design Services Agreements Table 3.1 — Planning Studies Status Report Table 3.2— Research Program Status Report Table 3.3— Facilities Engineering Program — Collections Status Report Table 3.4— Facilities Engineering Program — Plant Status Report Table 3.5— Information Technology Capital Program Status Report Page 5 of 5 Chart 1.1 Program Overview CUMULATIVE DATA THROUGH QUARTER ENDING MARCH 31,2017(3 QTR FY16/17) •collections .Collections •Plant PcoleR, •Plant Protects lop CLOSED PROJECTS DISTRIBUTION BY CATEGORY" ACTIVE PROJECTS DISTRIBUTION BY CATEGORY Total Base Contract Value $ 1,162,991,301 Total Base Contract Value $ 285,618,877 Collections $ 270,333,686 23.0% Collections $ 45,610,577 16.0% Plant Projects $ 892,657,615 77.0% Plant Projects $ 240,008,300 84.0% Total Base#of Contracts 63 Total Base#of Contracts 10 Collections 27 Collections 4 Plant Projects 36 Plant Projects 6 •Projects closed since 2 QTR FY07/08 Chart 1.2 Change Order Rates Over Time All Closed Projects 7.00% 6.08% 6.00% 5.65% 4.97% 5.00% 4.66% 4.75% 4.75% 4.84% 4.85% 4.62% 4.67% 4.99% 4.60% 3.84% 4.00% 3.78% 3.78% 3.82% 3.51% 3.52% 3.37% 3.00% 2.00% 1.00% 0.00% O�%06��0���0 0O�06��O��O�Oti�OOh�Oti�Cti~OO~~OOhyOO1~�O�OOti~OOh~OOh��O�OOtiBOO~�OOh��O�Oti�Oti�Ohb�O�6tiyOOtiyOOtiy�O�6ti�Oti�O~b�O^OO1^OOti^O� Chart 1.3 Change Order Rates Over Time Closed Collections Projects 14.00% 12.35% 12.00% 11.19% 10.00% 9.53% 8.00% 7.14% 6.97% 7.14% 7.10% 6.77% 6.19% 5.88% 5.88% 5.81% 6.00% 5.52% 5.51% 5.34% 5.51%5.43% 5.51% 4.00% 2.00% 0.00% O��OCP$oO�� 6��O�Ov�O��O�Oti�Oh�Oti�OyO6ti~OOti~OOti~�O~OOtivOO~~OO1v�O�OO1�OOti�OOh��O�Oh�Oti�OM1�OyOOh�OtiyOOti�O�Otibo6ti�OtiboOti^oO~^oOti^off Chart 1.4 Change Order Rates Over Time Closed Plant Projects z00% 6.00% 5.73% 5,00% 4.31% 4,28% 4.36% 4.19% 4.18% q,ll% 4.20% 4.00% 3.89% 3.00% 2.88% 2.90% 2.70% 2 59% 2.00% 1.00% Table 1.1 Summary of Closed Projects by Category Original Contract Approved Change Final Change Order Category Project Category Value Orders Contract Value Percentage Change Order Goal COLLECTIONS $270,333,696 $25,765,337 $296,099,023 9.53% 6.50% PLANT PROJECTS $892,657,615 $27,644,517 $920,302,132 3.10% 2.75% Total $1,162,991,301 S 53,409,854 $1,216,401,155 4.59% 5.00% Table 1.2 Construction Contract Performance - Active Projects Construction Original Contract ApproveclChange CurrentContract Project No %Complete Amount Orders Amount Collections IK 2-72A 66.00% $ 21,134,650 $ (32,294) $ 21,102,356 6-17 3.00% $ 3,699,301 $ - $ 3,699,301 7-37 40.00% $ 15,432,000 $ 284,760 $ 15,716,760 Plant Projects J-110 99.00% $ 9,716,000 $ 242,463 $ 9,958,463 P3-100 99.00% $ 33,500,000 $ 8,696,959 $ 42,196,959 P1-101 95.00% $ 126,908,300 $ 711,398 $ 127,619,698 P1-123 99.00% $ 5,344,626 $ 149,794 $ 5,494,420 P2-92 37.00% $ 49,850,000 $ 267,970 $ 50,117,970 132-92A 0.00% $ 3,304,000 $ - $ 3,304,000 P2-110 0.00% $ 16,730,000 $ - $ 16,730,000 Table 1.3 Active Construction Contracts by Contractor Contractor/Project Number Project Name Current Contract Value Charles King Company, Inc. 6-17 District 6 Trunk Sewer Relief $ 3,699,301 Environmental Const. Inc. P1-123 Trunk Line Odor Control Improvements $ 5,344,626 Flatiron West Inc P2-110 Consolidated Demolition and Utility Improvements at Plant 2 $ 16,730,000 Fleming Engineering FE32-02 P1 Hazardous Waste Storage Relocation $ 398,111 J.R. Filanc Construction Company,Inc. PS-100 Digester Rehabilitation at Plant 1 $ 33,500,000 Jamison Engineeering FE32-05 15th St, RPPS and BPPS Fall Protection Improvements $ 164,253 FE24-04 Primary Influent Channels Repair at Plant 1 $ 514,072 Kiewit 7.37 Gisler-Red Hill Trunk Improvements-ReachB $ 15,432,000 P2-92 Sludge Dewatering and Odor Control at Plant 2 $ 3,304,000 P2-92A Truck Loading Bay Odor Control at Plant 2 $ 3,304,000 FE13-04 Plant No. 2 Trickling Filter Chemical Odor Control $ 2,514,000 OConnell Engineering&Construction, Inc. FE10-20 2011 Miscellaneous Fall Protection Improvements $ 524,200 ODC Engineering and Technology FE09-04 P3 Potable Water System-In and Near City Water Pump Station $ 168,500 FE32-10 IT Server Room Cooling Improvements $ 281,000 SANCON Engineering FE16-08 Carbon Canyon Clay Pipe Repairs $ 303,563 Shimmick Construction J-210 Final Effluent Sampler and Building Area Upgrades $ 9,716,000 P2-92 Sludge Dewatering and Odor Control at Plant 2 $ 49,850,000 Tharsos,Inc. Table 1.3 Active Construction Contracts by Contractor Contractor/Project Number Project Name Current Contral Value FE24-03 Rehabilitation of Digester Mixing Pumps at P2 Digesters E, H, R,S, and T $ 594,000 Trautwein Construction 2.72 Newhope-Placentia Trunk Replacement $ 21,134,650 WM Lyles Company P1-101 Sludge Dewatering and Odor Control at Plant 1 $ 126,908,300 Table 2.1 Active Design Consultant Contracts by Consultant Project Agreement Original Number of Amendments Number Project Name Type Value Amendments To Date AECOM Technical Services,Inc. $ 20,400,587 1 $ 113,728 34i4 Rehabilitation of Western Regional Sewers PDSA $ 17,639,250 1 $ 113,728 PI-100 Digester Rehabilitation at Plant l PCSA $ 2,761,337 0 $ - Arcadis $ 1,540,000 1 $ 1,500,D00 J-126 Safety Improvements Program PDSA $ 1,540,000 1 $ 1,500,000 Atkins North America,Inc. $ 611,307 2 $ 61,019 J-110 Final Effluent Sampler and Building Area Upgrades PCSA $ 611,307 2 $ 61,019 Black&Veatch $ 21,106,979 3 $ 247,992 P2-98 Primary Treatment Rehabilitation at Plant 2 PDSA $ 18,141,423 1 $ 87,599 PS15.01 Biosolids Master Plan PSA $ 2,965,556 2 $ 160,393 Brown and Caldwell $ 22,309,428 20 $ 5,639,284 5-60 Newport Force Main Rehabilitation PCSA $ 2,231,925 4 $ 839,714 J-117 Ocean Outfall System Rehabilitation PDSA $ 6,778,015 8 $ 2,755,022 P2-107 SCADA System and Network U pgrades PDSA $ 2,818,197 1 $ 203,863 P2-92 Sludge Dewatering and Odor Control at Plant 2 PDSA $ 5,682,963 7 $ 1,840,685 PCSA $ 4,798,328 0 $ - Carollo Engineers $ 21,642,899 2 $ 33,854 PI-105 Headworks Rehabilitation and Expansion at Plant I PDSA $ 17,528,957 0 $ - PI-123 Trunk Line Odor Control Improvements PCSA $ 529,970 0 $ - PI-124 Plant l Primary Treatment Upgrades PCSA $ 451,910 0 $ - PS35-10 2017 Facilities Master Plan PSA $ 3,132,052 2 $ 33,854 CDM Smith $ 2,008,510 2 $ 104,402 SP-173 Effluent Reuse Study PSA $ 2,008,510 2 $ 104,402 CH2M HIII $ 790,285 2 $ 40,983 SP-166 Odor Control Master Plan PSA $ 790,285 2 $ 40,983 Hazen and Sawyer $ 152AW 0 $ SP-129 Oxygen Plant Demolition at Plant No.2 PCSA $ 152,450 0 $ - HDR Engineering,Inc. $ 18,996,209 2 $ 632,845 FE10-I8 Activated Sludge Plant 1 Waste Sludge Pump Downsizing PSA $ 70,500 0 $ - PI-101 Sludge Dewatering and Odor Control at Plant 1 PCSA $ 7,140,000 1 $ 535,605 PI-128 Headquarters Complex,Site and Security,and Entrance Realignment Program PDSA $ 11,785,709 1 $ 97,240 Lee&go $ 11,722,178 1 $ 351,096 2-72 Newhope-Placentia Trunk Replacement PDSA $ 8,468,232 1 $ 151,096 PCSA $ 3,253,946 0 $ - ISA ASSOCIATES INC $ 420,927 0 $ - PS-128 Headquarters Complex,Site and Security,and Entrance Realignment Program PSA $ 420,927 0 $ - MICHAELBAKERINTERNATIONAL,INC. $ 571,925 1 $ Table 2.1 Active Design Consultant Contracts by Consultant Project Agreement Original Number of Amendments Number Project Name Type Value Amendments To Date 2-41-8 SARI Rock Stabilizers Removal PDSA $ 399,008 0 $ - PSA $ 172,917 1 $ - MWHAMERICAS,INC. $ 11,560,289 5 $ 372,261 3-62 Seal Beach Pump Station Rehabilitation PDSA $ 6,917,175 2 $ 195,435 P2-110 Consolidated Demolition and Utility Improvements at Plant 2 PDSA $ 2,443,316 2 $ 80,965 P2-89 Solids Thickening and Processing Upgrades PCSA $ 2,199,798 1 $ 95,861 REF CONSULTING,INC. $ 475,308 3 $ 37,466 SP-278 Bay Bridge Pumpstation and Force Mains Rehabilitation Study PSA $ 475,308 3 $ 37,466 RMC Water&Environment $ 290,000 0 $ 6-17 District 6 Trunk Sewer Relief PCSA $ 290,000 0 $ - SCH Group Limited $ 311AN 1 $ 20,000 SP-125-17 AquaCritox Evaluation/Design PSA $ 311,460 1 $ 20,000 Stantec Consulting Services,Inc. $ 1,499,839 0 $ P2-110 Consolidated Demolition and Utility Improvements at Plant 2 PCSA $ 1,499,839 0 $ - Tetra Tech,Inc. $ 270,000 1 $ 10,000 7-37 Gisler-Red Hill Trunk Improvements-ReachB PCSA $ 270,000 1 $ 10,000 THE AUSTIN COMPANY $ 2,806,622 6 $ 549,321 P1-115 Title 24 Access Compliance and Building Rehabilitation Project PDSA $ 2,200,000 6 $ 549,321 PCSA $ 606,622 0 $ - Table 2.2 Activity Report for 2012 Master Professional Design Services Agreement Firm Task Order Status PROJECT TITLE/DESCRIPTION FY12-13 FY13.14 FY14.15 FE33-02, Repairs to Bar Screen at D Headworks at $ 27 980.00 12-00-01-01 Closed P2 FE33-02 Amendment No.1 $ 9,200.00 FE33-02 Amendment No.2 $ 6,770.00 FR32-035,Edinger Pump Station Record Drawing $ 42,511.00 LEE & RO, INC 12-00-01-02 Closed Preparation PO#104615-OB FR12-035 Amendment No. 1 $ 10,455.00 Contract No. FE12-00-01 12-00-01-03 Closed FE13-01, (5-60)Newport Force Main Rehabilitation $ 74,600.00 FE13-01 5-60 Amendment No. 1 $ 24,943.00 FR13-020, Plant No. 2 Gas Compressor Building $ 68,917.00 12-00-01-04 Open Piping Replacement FR13-020 Amendment No. 1 $ 30,568.00 FR13-020 Amendment No.2 $ 25,896.00 CUMULATIVE $ 43950.00 $ 10,455.00 $ 125,381.00 12-00-02-01 Closed FE32-06,84-inch P2 PI Line for Dist.Box B Rehab. $ 64 095.00 and Flow Meter Structure Aban.CLOSED DUDEK&ASSOCIATES, INC. FE09-04, P1 Potable Water System Improvements $ 50,472.00 PO#104616-OB 12-00-02-02 Closed Contract No. FE12-00-02 FE09-04 Amendment No.1 $ 13,320.00 12-00-02-03 Closed FE34-04, Primary Influent Channels Repair at Plant 1 $71,841.00 CUMULATIVE $ 64,095.00 $ 63,792.00 $ 71,841.00 FR12-003,Warner Avenue Manholes Structural $ 42,081.00 RMC WATER AND ENVIRONMENT 12-00-03-01 Closed Repair Project PO#104611-OB FR12-003 Amendment No. 1 $ 24,739.00 Contract No. FE12-00-03 12-00-03-02 Closed FR33-012,Santa Ana River Interceptor $ 56,404.00 CUMULATIVEi $ 66,820.00 $ 56,404.00 1 $ Table 2.2 Activity Report for 2012 Master Professional Design Services Agreement Firm Task Order Status PROJECT TITLEIDESCRIPTION FY12-13 FY13-14 FY14-15 TRAN CONSULTING ENGINEERS 12-00-04-01 Closed FR32-012,Slater Ave VFD Replacement $ 39,963.00 PO#104617-OB Contract No. FE12-00-04 FR12-012 Amendment No. 1 $ 26,968.00 CUMULATIVE $ 66,931.00 $ $ FE30-19, Landscaping and Miscellaneous $ 74,957.00 RBF CONSULTING 12-00-05-01 Closed Improvements Along Ellis Avenue P0#104626-013 FE10-19 Amendment No.1 $ 12,295.00 Contract No. FE12-00-05 FE10-19 Amendment No.2 $ 5,876.00 CUMULATIVE $ 93,128.00 $ S 12-00-06-01 Closed FR32-030,P2 Solids Loading Station Truck Loading $ 15,935.00 Auger Access IDS GROUP FE12-05, 15th St, Rocky Point and Bitter Point Pump $ 40,575.00 PO#104614-OB 12-00-06-02 Closed Station Fall Protection Improvements Contract No. FE12-00-06 FE12-05 Amendment No.1 $ 2,330.00 12-00-06-03 Open FE12-10 IT Server Room Cooling Improvements $ 43,470.00 12-00-06-04 Closed FE14-01, Plant 1 Primary Sludge Handling $6,200.00 Modif WtionS CUMULATIVE $ 58,840.00 $ 43,470.00 $ 6,200.00 PSOMAS 12-00-07-01 Closed FE12-02, PS Hazardous Waste Storage Relocation $ 51,400.00 PO#104610-OB Contract No. FE12-00-07 CUMULATIVE $ 51400.00 $ $ Table 2.2 Activity Report for 2012 Master Professional Design Services Agreement Firm Task Order Status PROJECT TITLE/DESCRIPTION FY12-13 FY13-14 FY14-15 FE30-21,Area 02 Craig Regional Park Manhole $ 58,440.00 12-00-08-01 Open Improvements FE30-21 Amendment No.1 $ 18,780.00 FESO-21 Amendment No.2 $ 22,780.00 GHD 12-00-08-02 Closed FE32-07, Upgrade PLC Panels at P3 and P2- $ 69,840.00 PO#104612-OB FE13-04, Plant 2 Trickling Filter Odor Control System Contract No. FE12-00-08 Upgrade $ 74,910.00 12-00-08-03 Open FE3 mm N 1 $ 9,635.00 FE304mendntNo.2 $ 14,455.00 FE13-04 Amendment No. 3 $ 24,235.00 CUMULATIVE $ 169840.00 $ $ 123235.00 RMS ENGINEERING &DESIGN, INC. 12-00-09-01 Closed FE32-08, P2TF/SC Blower Insultation Modifications $ 57,351.00 PO#104625-OB Contract No. FE12-00-09 FE12-08 Amendment No. 1 $ 27,390.00 CUMULATIVE $ $ 84741.00 $ HARRIS AND ASSOCIATES PO#104613-OB Contract No. FE12-00-10 CUMULATIVE $ $ $ TOTAL $ 615,004.00 $ 258,862.00 $ 653,314.00 Table 2.3 Activity Report for 2015 Master Professional Design Services Agreement Firm Task Order Status Project Title/Description FY15-16 FY16-17 FY17-18 FE15-00-01-01 FE14-05,Plant No. 1 Fleet Services UST Leak $86,116.00 Remediation DUDEK PURCHASE ORDER NO.10543506 FE14-05 Amendment No.1 $53,137.00 CONTRACT NO.FE15-00-01 FE15-00-01-02 FE15-09,CenGen Hot Water Pipe Bracing at P1 $146,516.00 FISCAL YEAR TOTAL $138 253.00 $146 516.00 $0.00 LEE& RO, INC. PURCHASE ORDER NO. 1054360B CONTRACT NO. FE15-00-02 FISCAL YEAR TOTAL $0.00 $0.00 t GHD,INC. PURCHASE ORDER NO.1054690B CONTRACT NO.FE15-00-03 FISCAL YEAR TOTAL $0.00 $0.00 $0.00 AECOM PURCHASE ORDER NO. 1054400B CONTRACT NO.FE15-00-04 FISCAL YEAR TOTAL $0.00 $0.00 $0.00 HAZEN AND SAWYER PURCHASE ORDER NO. 106451 OB CONTRACT NO.FE15-00-05 FISCAL YEAR TOTAL $0.00 $0.00 $0.00 RMC WATER AND ENVIRONMENT PURCHASE ORDER NO. 1054410B CONTRACT NO.FE15-00-06 FISCAL YEAR TOTAL $0.00 $0.00 $0.00 Table 2.3 Activity Report for 2015 Master Professional Design Services Agreement Firm Task Order Status Project Title/Description FY15-16 FYI 6-17 FY17-18 PROJECTLINE TECHNICAL FE15-00-07-01 FE15-02, Plant No.2 Control Center Server Room $83,624.00 SERVICES,INC. HVAC Upgrade PURCHASE ORDER NO.105452OB CONTRACT NO.FE15-00-07 FISCAL YEAR TOTAL $83,624.00 $0.00 $0.00 TAIT&ASSOCIATES,INC. PURCHASE ORDER NO. 105449OB CONTRACT NO.FE15-00-08 FISCAL YEAR TOTAL $0.00 $0.00 $0.00 BEYAZ&PATEL,INC. PURCHASE ORDER NO. 105445OB CONTRACT NO.FE15-00-09 FISCAL YEAR TOTAL $0.00 $0.00 $0.00 IDS GROUP,INC. PURCHASE ORDER NO. 105437OB CONTRACT NO.FE15-00-10 FISCAL YEAR TOTAL $0.00 $0.00 $0.00 KLEINFELDER,INC. PURCHASE ORDER NO.105433OB CONTRACT NO.FE15-00-11 FISCAL YEAR TOTAL $0.00 $0.00 $0.00 RMS ENGINEERING&DESIGN,INC. PURCHASE ORDER NO. 105439OB CONTRACT NO.FE15-00-12 FISCAL YEAR TOTAL $0.00 $0.00 $0.00 TOTAL $222,877.00 $146,516.00 $0.00 Table 3.1 Planning Studies Status Report Pr Project Name . Status PS15-01 PS15-01 Biosolids Master Plan Project Develop. $ 4,650,000 P515-02 PS15.02 Edinger Pump Station Rehabilitation Study Project Develop. $ 637,000 P515-03 P515-03 Slater Pump Station Rehabilitation Study Project Develop. $ 348,400 PSIS-04 P515-04 Network Architecture Master Plan Cancelled $ 7,511 PS15-05 P515-055ARI Sewershed Capacity Study Closed $ 3,043 PS15-06 P515-06 Seismic Hazard Evaluation at Plant Nos. 1 and 2 Project Develop. $ 2,414,000 PS15-07 PS35-07 Pressurization and Odor Control Study at Newport Beach Project Develop. $ 535,200 PSIS-08 PS35-08 Collections Capacity Evaluation Study Project Develop. $ 4,529,678 PS35-09 PS35-09 Wastehauler and Fueling Stations Relocation Study Project Develop. $ 203,000 P515-10 PS15.10 2017 Facilities Master Plan Project Develop. $ 4,150,000 P515-11 PS35-21 Office Trailer Relocation Evaluation Closed $ 35,781 PS16-01 P516-015tormwater Master Plan Project Develop. $ 1,415,700 PS16-02 PS36-02 SCE Feed Reliability Improvements Study Project Develop. $ 293,000 P516-03 P516-03 Banning Gate Study On-Hold $ - PS16-04 PS36-04 Rectangular Primary Clarifier Reliability Study at Plant No.1 Not Authorized $ - Grand Total $ 19,222,313 Total Chartered Project 15 Board Approved Program Budget $ 23,652,000 Remaining Unallocated Budget $ 4,429,687 Table 3.2 Research Program Status Report Project Number Project Name Allocated Budget RE16-01 RE16-01 Operational Research Technical Support FY16-17 Project Develop. $ 100,000 Grand TotalIII= $ 100,000 Total Chartered Project 1 Board Approved Program Budget $ 8,500,000 Remaining Unallocated Budget $ 8,400,000 Table 3.3 Facilities Engineering Program - Collections Status Report Pr Project Name Status Allocated Budget FEIG-21 FE10-21 Area 02 Craig Regional Park Manhole Improvements Design $ 1,359,000 FE15.01 FE15-01 Fullerton Creek Channel Crossing Design $ 260,000 FE35-03 FE35-03 Safety Improvements at all Pump Stations Cancelled $ 13,580 FE15-10 FEIS-10 East Lido Force Main Rehabilitation Project Develop. $ 2,628,000 FEIS-11 FE15-11 Collections Infrastructure Relocation at Plant 2,Phase 1B Not Authorized $ - FEIS-13 FE35-13 Doig Drive Building Improvements On-Hold $ 865,000 FEI6-01 FE36-01 Big Canyon Nature Park Improvements Project Develop. $ 533,000 FE36-02 FE36-02 Jamboree Sewer Realignment at Big Canyon Project Develop. $ 896,000 FEI6-04 FE36-04 Rehabilitation of the Bushard Diversion Box Not Authorized $ - FEI6.08 FE16-08 Carbon Canyon Clay Pipe Repairs Design $ 1,131,000 FEI6-11 FE16-11 Lane channel Crossing Not Authorized $ - Grand Total $ 7,685,580 Total Chartered Project 11 Board Approved Program Budget $ 12,192,000 Remaining Unallocated Budget $ 4,506,420 Table 3.4 Facilities Engineering Program - Plant Status Report Pr Project Name Status ' Allocated Budget FEIG-20 FE10-20 2012 Miscellaneous Fall Protection Improvements Warranty $ 1,020,000 FE12.08 FE12-08 TF/SC Modifications to Blower Building and Air Piping Closed $ 295,853 FE22-10 FE12-10 IT Server Room Cooling Improvements Warranty $ 960,000 FE13-04 FE13-04 Plant No.2 Trickling Filter Chemical Odor Control Construction $ 4,290,000 FE14-01 FE14-01 Plant 1 Primary Sludge Handling Modifications Closed $ 289,710 FE14-02 FE14-02 Plant 1 Primary West Side Sludge Pumping Modifications Closed $ 10,109 FE14-03 FE14-03 Rehabilitation of Digester Mixing Pumps at P2 Digesters E, H,R,S,a Construction $ 1,360,000 FE14-04 FE14-04 Primary Influent Channels Repair at Plant 1 Warranty $ 1,089,000 FE14-OS FE14-05 Plant No. 1 Fleet Services UST Leak Remediation Design $ 14,952,021 FE14.06 FE14-06 Plant No.2 Repairs to Air Dampers at COBS Warranty $ 245,000 FE35-02 FE35-02 Plant No.2 Control Center Server Room HVAC Upgrade Design $ 773,000 FE35-04 FEIS-04 Plant No. 1 Primary Clarifier Backwash System Demo Closed $ 67,307 FEIS-05 FE15-05 Main Exit Gate Card Reader at Plant 2 Close-Out $ - FEIS-06 FEIS-06 Gas Compressor Building Piping Replacement at Plant 2 Design $ 3,924,000 FE35-07 FEIS-07 Secondary Treatment and Plant Water VFD Replacement at Plant 1 Design $ 3,315,000 FE35-08 FE35-08 AS3 RAS Header Piping Replacement at Plant 1 Project Develop. $ 1,105,000 FEIS-09 FEIS-09 CenGen Hot Water Pipe Bracing at Plant 1 Design $ 425,000 FEI6.03 FE16-03 Return Activated Sludge Piping Replacement at Plant 2 Cancelled $ - FEI6-05 FE16-05 Buried Water Valve Support Upgrades at Plant 2 Project Develop. $ 500,000 FEI6-06 FE16-06 Fuel Cell Facilities Demolition Not Authorized $ - FE16-07 FE16-07 Security Monitoring and Source Control Trailers at Plant 1 Cancelled $ - FE16-09 FE16-09 Server Room Power Reliability Upgrades Plant 1 Cancelled $ - FE36-10 FE16-10 East Basin Distribution Box Repair Design $ 854,000 FE16-12 FE16-12 Garfield Road Perimeter Security Fence Project Develop. $ 121,000 Grand Total $ 35,596,000 Total Chartered Project 24 Board Approved Program Budget $ 43,325,000 Remaining Unallocated Budget $ 7,729,000 Table 3.5 Information Technology Capital Program Status Report Project Number Project Name Status Allocated Budget IT36-01 IT16-01 Enterprise Storage Arrays Active 1 $ 300,000 IT16.02 IT16-02 Conference Room Monitors Active $ 43,000 IT16-03 IT36-03 Plant 2 Internet Connection Active $ 50,000 IT16-04 IT36-04 Replace back-up Web Proxy(TMG) Active $ 70,000 IT36-05 IT16-05 Plant 2 Radio Repeater Upgrade Active $ 35,000 IT36-06 IT36-06 Network Equipment 2016-17 Active $ 101,900 IT36-07 IT36-07 Server Replacement and Obsolescence Active $ 309,600 IT36-08 IT36-08 IT Security 2016-17 Active $ 162,000 Grand Total $ 1,071,500 Total Chartered Project 8 Board Approved Program Budget $ 10,000,000 Remaining Unallocated Budget $ 8,928,500 OPERATIONS COMMITTEE MeetlOgDale TOBd 011Dir. 0103117 OS/24/17 AGENDA REPORT Item Number Item Nu bar 6 0 1 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Jim Colston, Director of Environmental Services SUBJECT: ENVIRONMENTAL COMPLIANCE REPORTS GENERAL MANAGER'S RECOMMENDATION Receive and file environmental compliance reports: Biosolids Management Compliance Report 2016, Semi-Annual Pretreatment Program Report Fiscal Year 2016/2017 July-December, Annual Greenhouse Gas Emissions Report 2016, Annual Emission Report 2016, and Marine Monitoring Annual Report 2015/2016. BACKGROUND The Orange County Sanitation District (Sanitation District) is subject to environmental regulatory oversight by the U.S. Environmental Protection Agency (EPA), Regional Water Quality Control Board (Santa Ana Region), California Air Resources Board (CARB), and South Coast Air Quality Management District (SCAQMD). These regulatory bodies require routine reporting, which is prepared by the Sanitation District's Environmental Services Department. These reports include: 1. Annual Biosolids Report (40 CFR Part 503) required by the Sanitation District's NPDES ocean discharge permit. Due February 191h of every year. 2. Semi-annual Significant Industrial User (SIU) Status Report required by the Sanitation District's NDPES permit. Due March 31s'of every year. 3. Annual Mandatory Reporting of Greenhouse Gas Emissions required by CARB. This report uses on online portal for report preparation and submission. Due April 1011 of every year. 4. Annual Emission Report required by SCAQMD. Due March tat of every year. 5. Annual Marine Monitoring Report required by the Sanitation District's NPDES ocean discharge permit. Due March 15th of every year. RELEVANT STANDARDS • Meet discharge permit 24/7/365 Page 1 of 3 ADDITIONAL INFORMATION Environmental compliance reporting is routinely required by local, state, and federal regulatory bodies to ensure protection of water, air, and land resources. Some of the reporting is required to be completed using online reporting portals, which perform calculations based on user input of operational data. The following compliance reports were filed recently. No permit violations were recorded during the reporting period. The Biosolids Annual Reoort contains details about the volume, quality, and the locations of management of the Sanitation District's biosolids. The Sanitation District produces about 780 tons per day of biosolids. The biosolids are anaerobically digested and dried to about 20% solids. The biosolids are managed via the following methods: composting, land application, and via a local landfill. The Biosolids Annual Report was submitted electronically for the first time this year, as required by EPA's Electronic Reporting Rule. Under its ocean discharge permit, the Sanitation District is required to establish and implement an approved pretreatment program to control the level of pollutants discharged by the industrial dischargers into the sewer system. The Sanitation District is also required to submit semi-annual Significant Industrial User reports detailing the permitting and enforcement status of the industrial permit holders. The report identified herein contains information about all industrial dischargers in both the Sanitation District's and Santa Ana Watershed Project Authority's (SAWPA) service areas. The SCAQMD's Annual Emissions Report (AER) represents a facility's annual inventory of criteria pollutant (VOC, NOx, SOx, CO, PM) and toxic air emissions. The emissions are calculated based on throughput volume and emissions measured at applicable process areas and emission units. The report assesses fees based on a facility's emissions of air contaminants for the reportable year, as specified in SCAQMD Rule 301. The AER reports for both Plant Nox.1 and 2 are prepared and submitted using SCAQMD's web-based emission reporting tool. For calendar year 2016, Sanitation District Plant No. 1 emitted approximately 117 tons of criteria pollutants and paid fees in the amount of $ 28,603.07; Plant No. 2 emitted approximately 187 tons of criteria pollutants and paid fees in the amount of $37,711.37. The reports were successfully completed and submitted on February 26, 2017, prior to the March 1 deadline. In accordance with the California Global Warming Solutions Act (AS 32, 2006), the CARB requires all major sources that directly emit Greenhouse Gases (GHG) to annually calculate and submit on a calendar year basis their GHG emissions resulting from their combustion of fuel and import of electrical power. The GHG inventory report focuses primarily on the emissions of carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). Similar to SCAQMD's AER reporting portal, the GHG report is electronically prepared and submitted via CARB's Cal a-GGRT reporting system. For calendar year 2016, Sanitation District Plant No. 1 reported roughly 25,207 metric tons of CO2 emissions, while Plant No. 2 reported approximately 33,300 metric tons of CO2 emissions. The reports were successfully completed and electronically submitted on April 10, 2017 and are pending third party verification due by September 1, 2017. Page 2 of 3 A critical activity under the Sanitation District's ocean discharge permit is the monitoring of the receiving waters for possible environmental degradation due to the discharge of treated effluent. Requirements under this permit are divided into three categories: Core Monitoring, Regional Monitoring, and Strategic Process Studies. Components of these monitoring activities include: Monitoring of benthic sediments for chemical deposition, changes in biological communities, and the health of fish living near the Sanitation District's ocean outfall. In addition to profiling plume dynamics from the Sanitation District's effluent discharge, water chemistry, oxygen availability, and physical conditions throughout the water column are monitored, to ensure the Sanitation District's continued compliance with permit requirements and mission. The Annual Marine Monitoring report was successfully completed and electronically submitted on March 14, 2017, in advance of the March 15 deadline. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: (Provided via separate link) • Biosolids Management Compliance Report 2016 (40 CFR Part 503) • Semi-Annual Pretreatment Program Report Fiscal Year 2016/2017 July-December (Semiannual Significant Industrial User Update- pretreatment/source control) • Annual Greenhouse Gas Emissions Report 2016 • Annual Emission Report 2016 (air quality) • Annual Marine Monitoring Report 2016 Page 3 of 3 ADMINISTRATION COMMITTEE Melting D310 TOBE.Or Dir. gs/10117 os/z4/17 AGENDA REPORT ItemNumber Item Number z 17 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: GENERAL MANAGER APPROVED PURCHASES AND ADDITIONS TO THE PRE-APPROVED OEM SOLE SOURCE LIST GENERAL MANAGER'S RECOMMENDATION A. Receive and file Orange County Sanitation District purchases made under the General Manager's authority for the period of January 1, 2017 — March 31, 2017; and B. Approve the following additions to the pre-approved Original Equipment Manufacturer(OEM) Sole Source List: • ALFA-LAVAL - Pumps and Parts • CHEMINEER - Mixers • HARTZELL - Exhaust fans • VERDERFLEX- Pumps and Parts • WOODWARD - Engine and Turbine Systems BACKGROUND Staff provides the Administration Committee and the Board of Directors quarterly reports of General Manager approved purchases between $50,000 and $100,000, and additions to the pre-approved OEM Sole Source List. RELEVANT STANDARDS • Quarterly financial reporting • Ensure the public's money is wisely spent PRIOR COMMITTEE/BOARD ACTIONS December 2016 - Minute Order 12(b) authorized the General Manager to ratify additions or deletions to the OEM Sole Source list on the General Managers quarterly approved purchases agenda report. Page 1 of 3 ADDITIONAL INFORMATION In accordance with Ordinance No. OCSD-47, the General Manager has authority to approve purchases between $50,000 and $100,000. Below is a summary of General Manager approved purchases, in amounts exceeding $50,000, for the third quarter of fiscal year 2016-17: Vendor Name Amount Department Description/Discussion Preventive Maintenance, Testing, BEC BUILDING Administrative Inspection, Repair and Alteration of Fire ELECTRONIC $60,000.00 Services Alarm Systems CONTROLS INC 3/1/17 to 2/28/18 Board Award: M.O. 12/14/16, Item 12 DEMARIA Operations & Repair& Rebuild SAILS Hidrostal Pump#4 ELECTRIC MOTOR $95,500.00 Maintenance Sole Source Justification# 1690 SERVICES, INC. Reason: Emergency As-Needed IT Consulting Services DYNTEK Administrative 4/28/17 to 10/14/17 SERVICES INC $60,000.00 Services GSA Contract No. GS-35F-0025N, in accordance with Ordinance OCSD-47, Section 2.03 (B) Cooperative Purchases ESRI Enterprise Advantage Program ESRI INC $83,000.00 Administrative (EEAP) Services 7/1/17 to 6/30/18 Board Award: M.O. 12/14/16, Item 12 GRAYBAR Convenience Blanket PO for ELECTRIC Operations & Miscellaneous Electrical Parts and COMPANY $85,000.00 Maintenance Supplies WALNUT CA 3/1/17 to 6/30/18 GM Article 2, Section 2.2 (b)(1) Emergency Work to Repair a Sinkhole J R FILANC $g000000 Operations & near OCSD Manhole SAR0720-0000 , . CONSTRUCTION Maintenance Sole Source Justification# 1726 Reason: Emergency Page 2 of 3 Vendor Name Amount Department Descri tion/Discussion Provide EPA Protocol Calibration Gas MATHESON TRI Operations & Cylinder Refills and Cylinder Demurrage GAS, INC. $80,000.00 Maintenance 7/1/17 to 6/30/18 Specification No. C-2017-829 Convenience Blanket PO for ONESOURCE Miscellaneous Electrical Parts and Operations & DISTRIBUTORS $85,000.00 Maintenance Supplies INC 3/1/17 to 6/30/18 GM Article 2, Section 2.2 (b) (1) ROYAL TRUCK Operations & Truck Bed Installations on Two (2) BODY $57,717.38 Maintenance 2014 Ford F-550 Trucks Specification No. S-2016-811-R Consulting Services for Plant Facility Impacts from OCTA/Caltrans I-405 STADIA REALTY $96,000.00 Engineering Widening Project INC. 3/3/17 to 3/2/18 Sole Source Justification # 1718 Reason: Unique Product/Service ADDITIONS TO PRE-APPROVED OEM SOLE SOURCE LIST • ALFA-LAVAL — Pumps and Parts • CHEMINEER - Mixers • HARTZELL - Exhaust fans • VERDERFLEX - Pumps and Parts • WOODWARD - Engine and Turbine Systems ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: N/A Page 3 of 3 ADMINISTRATION COMMITTEE Meeting Dare TOBd.of Dir. gs/10117 os/z4/17 AGENDA REPORT Item Item Number 3 IB Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services SUBJECT: CONSOLIDATED FINANCIAL REPORT FOR THIRD QUARTER ENDED MARCH 31, 2017 GENERAL MANAGER'S RECOMMENDATION Receive and file the Orange County Sanitation District Third Quarter Financial Report for the period ended March 31, 2017. BACKGROUND Included in this consolidated report are the following quarterly financial reports for the period ended March 31, 2017: • Third Quarter Budget Review The budget review summary provides the Directors, staff, and general public with a comprehensive overview of the financial results of the Orange County Sanitation District (Sanitation District)through the third quarter ended March 31, 2017. • Quarterly Treasurer's Report This section reports on financial portfolio performance with respect to the Sanitation District's funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the U.S. and global economic outlook from the Sanitation District's investment manager, Chandler Asset Management. • Certificates of Participation (COP) Quarterly Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. RELEVANT STANDARDS • Quarterly financial reporting ADDITIONAL INFORMATION The quarterly treasurer's report contained within the Consolidated Financial Reports for the Third Quarter Ended March 31, 2017 is being submitted in accordance with the Sanitation District's investment policy, which requires the report be submitted to the governing body following the end of each quarter and includes the following information: Page 1 of 3 • Performance results in comparison with the 3-month treasury bill index for the liquid operating portfolio; and the Merrill Lynch Corp./Govt. 1-5 Year Bond index for the long-term portfolio as identified in the investment policy; and the time- weighted total rate of return for the portfolio for the prior three months, six months, nine months, 12 months, year to date, and since inception compared to the Benchmark returns for the same periods: Portfolio Performance Summary Quarter Ended March 31,2017 Liquid Operating Monies(%) Long-Term 0 7onfing Monies Total Rate Total Rate of of Return Benchmark Return Benchmark 3 Months 0.14 0.10 0.52 0.47 6 Months 0.27 0.19 -0.33 7.59 9 Months 0.37 0.28 -0.27 :565 12 Months 0.46 0.36 0.45 0.21 Annualized Since inception 30 Nov 2014 0.37 0.21 1.12 1.08 • A listing of individual securities held at the end of each reporting period (see the detailed listings of each security contained within the report). • Cost and market values of the portfolios: Liquid Oper. Long-Term Cost $85.0 M $318.0 M MV $85.2 M $318.2 M • Modified duration of the portfolio compared to Benchmark: Liquid Oper. Long-Term B.M. 0.15 2.61 Port. 0.16 2.43 • Dollar change in value of the portfolio for a one-percent (1%) change in interest rates: Liquid Oper. — $133,206 Long-Term — $7,723,544 • None of the portfolios are currently invested in reverse repurchase agreements. • The percent of the Liquid Operating Monies portfolio maturing within 90 days: 74.3% • Average portfolio credit quality: Liquid Oper. —AAA/Aaa Long-Term —AA/Aa1 Page 2 of 3 • Percent of portfolio with credit ratings below "A" by any rating agency, and a description of such securities: Liquid Portfolio— no exceptions Long Term Portfolio— Percent of portfolio-3.4% Maturity Cost Date Moody S&P Fitch AMRESCO Residential Securities 1999-1 $ 100,432.85 6/25/2029 Not Rated AA+ BBB Bank of America Corp Note $4,334,014.00 12/1/2017 Baal BBB+ A Goldman Sachs Group Inc. Note $ 692,806.00 1/18/2018 A3 BBB+ A American Express Credit Note $ 3,377,385.79 3/19/2018 A3 BBB+ A Morgan Stanley Note $ 3,200,848.00 7/28/2021 A3 BBB+ A • All investments are in compliance with this policy and the California Government Code, except for the following Lehman Brothers holdings that the Sanitation District is pursuing collection through the bankruptcy court: Lehman Brothers Note-Defaulted $ 600,000 par value purchased 9/19/2008 Lehman Brothers Note-Defaulted $2,000,000 par value purchased 9/18/2008 • Sufficient funds are available for the Sanitation District to meet its operating expenditure requirements for the next six months. CEQA N/A FINANCIAL CONSIDERATIONS N/A ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.coml with the complete agenda package: • Consolidated Financial Reports for the Third Quarter Ended March 31, 2017 Page 3 of 3 0 NGE CO4UY.S ANIT DISTRICT NO � 1 ; - a • for the period ended March 31 , 2017 �k ,ua?s 1�11ly■. !a .s pZGl01�:� 13%. ~ , I�j- . . IN. i r .41 PIN wasomm are t Y _ _ - - �■ - - - - ' ra.-- Orange County, California y Table of Contents ExecutiveSummary...................................................................................................1 Budget Review Section 1 —Consolidated Financial Reports..........................................................................1 Section 2—Operating Budget Review Chart of the Cost per Million Gallons by Department—Budget and Actual..............1 Chart of the Net Expenses by Major Category— Budget and Actual........................1 Divisional Contributions to Cost Per Million Gallons ................................................2 Comparison of Expenses by Department.................................................................3 Summary of Collection, Treatment, and Disposal Expenses by Major Category.....4 Summary of District-Wide Revenues .......................................................................5 Summary of Collection, Treatment and Disposal Revenues....................................5 Summary of Collection, Treatment, and Disposal Expenses by Line Item...............6 Summary of Collection, Treatment, and Disposal Expenses by Process.................8 Chartof Staffing Trends...........................................................................................9 Section 3—Capital Improvement Program Budget Review Capital Improvement Program Graphs by Type and Funding Source......................1 Summary of Capital Improvement Construction Requirements- Current Year........2 Summary of Capital Improvement Construction Requirements - Project Life..........6 Section 4—Capital Assets Schedule & Debt Service Budget Review CapitalAssets Schedule ..........................................................................................1 Debt Service Budget Review....................................................................................1 Section 5—Self Insurance Budget Review General Liability and Property Fund Budget Review................................................1 Workers' Compensation Fund Budget Review.........................................................2 Quarterly Treasurers Repo rt........................................................................................1 QuarterlyCOP Reoort.................................................................................................1 FY 2016-17 Third Quarter Financial Report This Page Intentionally Left Blank Executive Summary Consolidated Financial Reports For the Third Quarter Ended March 31, 2017 Included in this consolidated report are the following quarterly financial reports for the period ended March 31, 2017: Third Quarter Budget Review: The Consolidated Financial Reports Section provides the Directors, staff, and the general public with a comprehensive overview of the financial results of the Sanitation District through the third quarter ended March 31, 2017. Contained within the Consolidated Financial Reports is the budget-to-actual status of the Collections, Treatment and Disposal Operations, the Capital Improvement Program, the Self-Insurance Program, and Debt Service Outlays. Also included is a Capital Assets Schedule as of March 31, 2017. Various detail information can be found in this report. In summary: a) Most major expense categories are anticipated to be at or below budget. b) Total revenues are at 107.7 percent mainly due to the receipt of total debt proceeds of $195.1 million, $112.5 million from the issuance of Revenue Refunding Certificate Anticipation Notes, Series 2016B, during the second quarter; and $82.6 million from the issuance of Wastewater Refunding Revenue Obligations, Series 2017A, during the third quarter of the fiscal year. The 2016B Notes were used to refund the Revenue Refunding Certificate Anticipation Notes, Series 2014B. The 2017A Obligations were used to refund the Certificate of Participation Series 2007A. Excluding debt financing proceeds, total revenues are at 62.3 percent of the budget. Except for IRWD Intra District Sewer Use, IRWD Capital Assessments, Interest Earnings, and Other Revenues, all other major revenue sources are currently tracking close to or exceeding revenue estimates. Overall, total revenues are projected to exceed budget at year-end. More detailed information on District revenues is provided within Section 1 — Pages 3 through 5. c) Collection, Treatment and Disposal Costs: As indicated within the Consolidated Financial Reports Section of this report, the net operating requirements through the third quarter of $100.6 million is currently tracking at 68.7 percent of the $146.4 million budget. In addition, net operating expenses have decreased $3.9 million or 3.8 percent in comparison with the same period last year. Overall, staff expects the total operating costs to remain within budget throughout the remainder of the year. More detailed information on District operating expenses is provided within Section 1- Pages 1 through 3. Page 1 FY 2016-17 Third Quarter Review The total cost per million gallons is approximately $1,951.3 based on flows of 188.1 million gallons per day. This is $215.8 per million gallons, or 10.0 percent lower than the budgeted cost per million gallon per day. A further description of these costs and benchmarking with other agencies is contained within Section 1 — Pages 6 through 8. d) The total projected capital outlay cash flow of the Capital Improvement Program (CIP) for FY 2016-17 has been revised to $144.7 million, or 79.5 percent of the board approved cash outlay of$181.9 million. The actual cash outlay spending through the third quarter is $101.0 million, or 55.5 percent of the total budgeted outlay. More detailed information on the CIP budget review can be found in Section 3. • Quarterly Treasurer's Report This section reports on financial portfolio performance with respect to the Sanitation District's funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the national economic outlook from the Sanitation District's money manager, Chandler Asset Management (Chandler). Chandler notes that the Long-Term Portfolio returned 57 basis points over the quarter outperforming the Bank of America Merrill Lynch 1-5 year AAA-A U.S. Corporate and Government Index return of 47 basis points, while the Liquid Operating Monies Portfolio returned 14 basis over the quarter, outperforming the three-month Treasury Bill index return benchmark of 10 basis points. Chandler further notes that: • the Federal Open Market Committee (FOMC) left the target federal funds rate unchanged at the first meeting of this year but raised the target federal funds rate in March by 25 basis points to a range of 0.75%-1.00%. The March rate hike was the FOMC's third rate hike since the 2008 financial crisis when the fed funds target rate reached a historical low range of 0.00%-0.25% (the other two 25 basis point rate hikes were in December 2015 and December 2016). The Fed noted that economic activity has expanded at a moderate pace, labor market gains remain solid, and inflation is moving close to the Fed's 2.0% target. The Fed is still projecting a 1.4% fed funds rate by the end of this year, which implies two more 25 basis point hikes. The FOMC's long-run fed funds rate projection was also unchanged at 3.0%. • Market participants estimate the economy grew at an annualized pace of about 1.8% in the first quarter, following growth of 2.1% in the fourth quarter. Labor market trends continued to improve in the first quarter, and the economy is now likely at or near full employment. The unemployment rate declined to 4.5% in March, down from 4.7% in December. Wage Page 2 Executive Summary growth increased during the first quarter, and payrolls increased by an average of 178,000 per month (more than enough to absorb new entrants into the labor market). Consumer confidence remained strong during the first quarter and housing trends remained favorable. Furthermore, manufacturing indicators improved during the first quarter. Inflation indices increased during the first quarter. This was driven in part by the year-over- year increase in energy prices. Overall, core inflation seems to be approaching the Fed's 2.0% target. • In the past quarter, the 2-year Treasury yield is rose about 7 basis points and the 10-year Treasury yield is declined about 6 basis points. Notably, shorter-term yields (1-year and under) increased more than 20 basis points during that time-period. On a year-over-year basis the 2-year Treasury yield has increased 53 basis points and 10-year Treasury yield is up about 62 basis points. • Corporate credit spreads, or the additional compensation investors receive for purchasing non-US treasury securities, tightened during the first quarter, based on the Bank of America Merrill Lynch US Corporate Index. • The Consumer Price Index (CPI) was up 2.7% year-over-year in February, versus up 2.5% year-over-year in January. Core CPI (CPI less food and energy) was up 2.2% year-over-year in February, versus up 2.3% year- over-year in January. The Personal Consumption Expenditures (PCE) index was up 2.1% year-over-year in February, versus up 1.9% year-over- year in January. Core PCE (excluding food and energy) was up 1.8% year- over-year in February, versus up 1.7% year-over-year in January. CPI is already trending above 2.0%, and the Fed's primary inflation gauge (PCE) is approaching the Fed's 2.0% target. • Economic Outlook Risk markets have performed well since the US election, predicated partially on the belief by investors tax reform will take place late in 2017 and fiscal stimulus in 2018. As the realities of the visceral political environment set-in for the new Presidential Administration, it is likely expectations of tax reform and fiscal spending will be moderated, potential leading to a pull-back in risk asset performance. The Treasury curve flattening experienced during Q1 seems to reflect the above reality, whereas the equity markets maintain a much more sanguine view specific to tax policy and fiscal spending. The Federal Reserve remains intent on continuing the process of'normalizing' monetary policy and moving further away from the zero-interest rate policy of the past several years. The Chandler team holds the view the Fed's forecast for interest rates is too optimistic, as the still very aggressive monetary policies being implemented abroad by both the European Central Bank and the Bank of Japan will put a ceiling on how high US rates can go before the corresponding increase in the dollar derails the domestic economic recovery. The Federal Reserve will be able to raise the Federal Funds rate, but not too the level consistent with the Page 3 FY 2016-17 Third Quarter Review March 2017 Summary of Economic Projections. The Chandler team expects interest rates in general to drift higher over the coming months and will be looking to add spread product, predominately in the Corporate and Asset Backed sectors, to enhance the total return opportunity of the portfolio. • Quarterly Certificates of Participation (COP) Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. Page 4 Consolidated Financial Reports Third Quarter Financial Report March 31, 2017 Financial Management is pleased to present the FY 2016-17 third quarter financial report. This report provides a comprehensive overview of the financial condition of the Sanitation District and reports on the status of all capital projects in progress. A summary of the sections contained within this report is provided below. Operating Budget Review., This section reports on collection, treatment and disposal net operating requirements. At March 31, 2017, 68.7 percent, or $100.6 million of the FY 2016-17 net operating budget of $146.4 million has been expended. Net operating expenses decreased from the same period last year by $3.9 million, or 3.8 percent, mainly due to a decrease of$2.0 million in Salaries and Benefits, $1.1 million in Utilities, $983,000 in Operating Materials and Supplies, $465,000 in Repairs and Maintenance, and $92,000 in Administrative Expenses, and an increase of $713,000 in indirect costs allocated out to capital projects. These reductions to net operating expenses have been partially offset by increases of $627,000 in Contractual Services, $485,000 in Other Operating Supplies, $131,000 in Professional Services, and $107,000 in Training and Meetings. These and other variances that factor into this net decrease in expenses are discussed in more detail below. Overall, staff expects the total operating costs to remain at or slightly below budget throughout the remainder of the year. Significant operating results as of March 31, 2017 include the following: • Salaries. Wanes and Benefits — Personnel costs of $66.6 million are on target at 74.6 percent of budget through the third quarter of FY 2016-17. Although the budget is based on a 5 percent vacancy factor, staffing is 50 full-time equivalents (FTE's), or 8.0 percent below the total 627 FTE's approved in the FY 2016-17 budget. Salary and benefit costs are $2.0 million or 2.9 percent lower than the $68.6 million incurred in the same period last year, mainly due to the decrease in OCERS retirement of $3.6 million. This decrease is reflective of the decrease in the employee contribution rate as a result of the $214.1 million pay down on the unfunded actuarial accrued liability over the current and previous two fiscal years. This decrease is partially offset by an increase of $1.5 million in salaries and wages due primarily to the completion of bargaining unit agreements, following the completion of the FY 2017-18 budget, that became effective as of July 1, 2016. Net operating personnel costs are expected to be slightly below budget throughout the remainder of the year. • Administrative Expenses — Administrative Expenses totaled $1.1 million, or 58.5 percent of the $2.0 million budget through March 31. These costs are $92,000 or 7.4 percent lower at March 31 in comparison with the prior year mainly due to a decrease of $96,000 in purchases of small computer items, primarily Microsoft Section 1 - Page 1 FY 2016-17 Third Quarter Report Surface Pro tablets purchased in the prior year. It is anticipated that the administrative costs will be below budget at year-end. • Printing and Publication Expenses — Printing and Publication Expenses totaled $190,000, or 61.1 percent of the $311,000 budget through March 31. These costs are $6,000 or 3.1 percent higher at March 31 in comparison with the prior year, mainly due to an increase of $23,000 in notices and ads for career recruitment, offset by a decrease of $20,000 in copy center costs as a result of removing mailroom services from the Xerox contract. It is anticipated that the printing and publication costs will be below budget at year-end • Training and Meetings — Training and meetings of $623,000 are below target at 52.3 percent of the $1.2 million budget. This account is lower than the proportionate budget due to the timing and need for training throughout the year. These costs have increased over the same period last year by $107,000 or 20.8 percent, which includes $72,000 for Total Productive Maintenance Certification Program costs and $22,000 for taxonomy training not incurred in the prior period. Total training and meeting costs are anticipated to be below budget at year- end. • Operating Materials and Supplies — Operating materials and supplies of $11.0 million is below target at 65.8 percent of budget through March 31. Operating Materials and Supplies have decreased from the prior year by $983,000 or 8.2 percent, primarily due to decreases in Chemical Coagulants of $668,000, Odor Control of $153,000, Tools of $93,000, Safety Equipment of $30,000, and Lab Chemicals and Supplies of $20,000. The decreases are mainly brought about by chemical process optimization, a decrease in unit costs, and a decrease of purchases for tools and equipment from the prior year. Based on current processes, operating materials and supplies are anticipated to approximate budget at year-end. • Contractual Services — Contractual services is below target at $17.3 million or 68.9 percent of budget through March 31. Solids Removal costs, budgeted at $17.2 million, comprise the majority of this expense category. With a decrease of $438,000 or 3.3 percent lower than the prior year, due to renegotiation of composting contract rates, solids removal costs totaled $12.8 million, or 74.3 percent of budget at March 31. Overall, Contractual Services is higher by $627,000 or 3.8 percent over the same period last year. Security Services increased by $524,000 due to heighted security and the addition of armed patrol services at both plants. In addition, Other Contractual Services increased by $511,000 due to an increase in preventive maintenance services for the Civil Assets Management Program (CAMP), and Temporary Services increased by $146,000 due to position vacancies. These increases were offset by decreases of $64,000 in Janitorial Service dues to renegotiation of contract rates and $43,000 in Oxygen due to prior period flows diverted from plant 2. County Service Fees totaled only $45,000, or 6.7 percent of the $672,000 budget through the third quarter as the preponderance of these fees Section 1 - Page 2 Consolidated Financial Reports are always billed by the County in the fourth quarter. Total contractual services costs are anticipated to approximate budget at year-end. • Professional Services — Professional services costs totaled $2.2 million or 52.1 percent of the $4.3 million budget through March 31. Professional service costs, such as Audit and Accounting, Engineering, Environmental Scientific Consulting, and Other Services, are proportionately low through March 31 due to a variety of factors such as timing of services needed, services being in the planning or request for proposal stage, the need for the service being re-evaluated, or utilization of internal staffing for projects. These costs are $131,000 or 6.2 percent higher at March 31 in comparison with the prior year mainly due to an increase of$175,000 in engineering services and timing of services performed. It is anticipated that the costs for this category will be below budget at year-end. • Research and Monitoring — Research and monitoring costs totaled $525,000, or 65.6 percent of the $806,000 budget through March 31. These costs are $3,000, or 0.5 percent higher at March 31 in comparison with the prior year, mainly due to an increase in environmental monitoring costs, offset by a decrease in air quality monitoring costs. Total Research and Monitoring costs are anticipated to be below budget at year-end. • Repairs and Maintenance — Repair and maintenance costs totaled $9.5 million, or 67.0 percent of the $14.2 million budget through March 31. These costs are $465,000, or 4.7 percent lower at March 31 in comparison with the prior year, mainly due to Plant 2 digester treatment and engine repairs in the prior year. It is anticipated that the costs for this category will approximate or be below budget at year-end. • Utilities — Utilities costs totaled $4.7 million, or 56.8 percent of the $8.2 million budget through March 31. These costs are $1.1 million or 18.3 percent lower at March 31 in comparison with the prior year, primarily due to a decrease in electricity charges of $1.0 million as a result of lower usage related to decreased activities and outfall pumping as well as a new operating strategy implemented to reduce utility- provided electricity. It is anticipated that the costs will be below budget at year- end. • Other Operating Supplies — Other operating supplies costs totaled $1.8 million, or 79.7 percent of the $2.3 million budget through March 31. Property and General Liability Insurance comprise the majority of this expense category. These costs are $461,000 or 124.0 percent higher at March 31 in comparison with the prior year primarily due to an increase in budgeted in-lieu premium charges in order to maintain recommended reserve balances. It is anticipated that the costs will approximate budget at year-end. • Revenues — Service Fees and Property Taxes — Through March 31, revenues from service fees are at $179.5 million, or 62.6 percent of budget and Property taxes are $55.3 million, or 63.6 percent of budget. These items comprise the majority of the Sanitation District's revenues and are mostly collected by the County Section 1 - Page 3 FY 2016-17 Third Quarter Report through the property tax roll and distributed to the Sanitation District throughout the year based on a set distribution schedule that begins in November of each year. A decrease of$1.4 million or 0.8 percent in service fee revenue over the prior period is due in part to timing of customer payments, transfer of local sewer service fees to East Orange County Water District, change in invoicing wholly-exempt agency invoices, and an increase in user fee refunds issued in the current period, offset by an increase in fees of 1.6 percent. An increase of $2.5 million or 4.7 percent in property tax revenues over the prior period is due to an increase of approximately 2.0 percent in property tax rates, and higher construction activities and property values. These revenues are expected to approximate budget at year-end. • Revenues — Permittee User Fees — Permittee User Fees are at $9.6 million, or 85.0 percent of the $11.3 million budget. The number of permittees fluctuates from year to year as businesses are established or close their operations. The revenues through the third quarter are $1.3 million or 15.0 percent higher in comparison with the same period last year due to an increase in the number of permittees and an increase in the amount of discharge from the permittees. It is estimated that the permittee user charges will approximate or slightly exceed budget at year-end. • Revenues — Inter District Sewer Use — SAWPA and SBSD — Inter District Sewer revenues - SAWPA and SBSD are at $2.4 million, or 73.5 percent of the $3.3 million budget. This revenue is derived from charges to the Santa Ana Watershed Protection Agency (SAWPA) and Sunset Beach Sanitary District (SBSD) for treatment of flows. These revenues are expected to approximate budget at year-end. • Revenues — Intra District Sewer Use — IRWD — Intra District Sewer revenues- IRWD are at <$3.6 million>, or <97.4> percent of the $3.7 million budget. This revenue is derived from charges to the Irvine Ranch Water District (IRWD) for treatment of flows. The revenues through the third quarter are lower than the same period last year by $5.5 million or 300.9 percent mainly due to a reduction of $6.1 million of pension costs allocated to IRWD based on their desire to amortize their share of the $214.1 million of unfunded actuarial liability paydowns the District made over the past two fiscal years over the original 15 year amortization period established by the Orange County Employees Retirement System, offset by an increase of $733,000 in operation and maintenance charges to IRWD. These revenues are expected to be below budget at year-end. • Revenues - Sludge Disposal — IRWD — Sludge Disposal fees - IRWD are at $11.5 million, or 126.7 percent of the $9.1 million budget. The revenue is derived and fluctuated from flows discharged from IRWD to Sanitation District for the handling, treatment and disposal of solids. The revenues through the third quarter are higher than the same period last year by $4.0 million or 52.5 percent, mainly due to actual cost adjustments covering a two-year period. The quarterly billing to IRWD is based on estimates. These revenues are expected to exceed budget at year-end. Section 1 - Page 4 Consolidated Financial Reports • Revenues — Capital Assessments — IRWD — Capital Assessments-IRWD are at $1.7 million, or 38.8 percent of the $4.4 million budget. The revenues through the third quarter are lower than the same period last year by $204,000 or 10.7 percent mainly due to a decrease in joint capital costs allocable to IRWD. It is estimated that the capital assessments will be below budget at year-end. • Revenues — Capital Facilities Capacity Charges ICFCCI — CFCC are at $8.1 million, or 60.0 percent of the $13.5 million budget. The revenues through the third quarter are lower than the same period last year by $2.5 million or 23.9 percent due to decreased construction activity and timing of payments from local agencies, offset by more supplement capital facilities capacity charges from industrial dischargers than at this time last year. These revenues are expected to be below the budget at year-end. • Revenues — Interest Earnings — Interest Earnings are at $1.5 million or 17.9 percent of the $8.6 million budget. The revenues through the third quarter are lower than the same period last year by $5.1 million or 76.6 percent due to lower yields earned on investments and lower cash and investment balances. It is estimated that the interest earnings will be below the budget amount at year- end. • Revenues — Wastehauler — Wastehauler revenues are at $717,000 or 95.6 percent of the $750,000 budget. This revenue is derived from fees charged to wastehaulers allowing them to dump waste into the Sanitation District's system. These revenues are expected to exceed budget at year-end. • Revenues — Grant Revenue — Grant revenue though the third quarter is lower than the same period last year by $450,000 or 100.0 percent. This revenue consists of a prior period federal grant received from the United States Bureau of Reclamation for $450,000. Grant funds were received related to the Effluent Reuse Study for the Groundwater Replenishment System (GWRS), of which one half of the consultant costs less grant funds received will be reimbursed by the Orange County Water District once the study is complete. • Revenues — CNG Sales — CNG Sales revenues are at $332,000 or 82.9 percent of the $400,000 budget. This revenue is derived from public sales at the District's Compressed Natural Gas (CNG) fueling station. The revenues through the third quarter are higher than the same period last year by $39,000 or 13.4 percent. These revenues are expected to approximate or exceed budget at year-end. • Revenues - Other — Other revenues are at $270,000 or 33.7 percent of the $800,000 budget. These revenues consist of miscellaneous revenues, such as reimbursements from insurance and employees. The revenues through the third quarter are lower than the same period last year by $507,000 or 65.3 percent mainly due to a settlement received in the prior year from the County of Orange bankruptcy filing in 1994 of $480,000. These revenues are expected to be below budget at year-end. Section 1 - Page 5 FY 2016-17 Third Quarter Report Comparison of Third Quarter Cost per Million Gallon Results with Budget Last Five Years 2,200 2,154 2.167 2,100 2,050 2,000 z.oss 2.or6 1,950 1.900 1,850 1,800 1,750 1,700 1,650 1,600 1,550 1.500 ]7:t3 1314 1415 15=L@ 1.6_1Z 3rd Annual 3rd Annual 3rd Annual 3rd Annual 3rd Annual QV Budget Qtr Budget Qtr Budget Qtr Budget Qtr Budget As demonstrated in the preceding graph for each of the last four fiscal years, the cost per million gallons at the end of the third quarter has been between 3.0 percent lower to 1.2 percent higher than the annual budget. The FY 2016-17 third quarter is 10.0 percent lower when compared with this year's budget. The variance from previous years is primarily due to a decrease in operating expenses, which are 3.8 percent lower than the same period last year and an increase in flows, which are 2.0 percent higher than the same period last year. Staff believes that overall operating costs will be below budget at year-end. The total cost per million gallons at March 31 is $1,951 based on flows of 188.1 million gallons per day. This is $216 per million gallons, or 10.0 percent, lower than the budgeted cost per million gallons of $2,167. There is an inverse relationship between the amount of flows and the cost per unit of collection, treatment, and disposal. Consequently, the lower cost per million gallons is due to net expenses being 8.4 percent less than the proportionate budget through March 31 and flows of 188.1 million gallons per day being 1.7 percent higher than the budgeted flow of 185 million gallons per day. More detailed information on operating revenues, costs, and related information is provided within Section 2. Section 1 - Page 6 Consolidated Financial Reports Following are data tables showing the last five years of Single Family Residential User Fees (SFR) and the cost per MG to collect, treat, and dispose of wastewater for OCSD and for similar agencies. The agencies used in the table were determined to be those that most closely resembled OCSD in terms of services provided and treatment levels. The summaries demonstrate that OCSD's SFR and cost per million gallons are each one of the lowest in their respective group. Benchmark Study Five-Year Single Family Rate Rates as of July 2012 2013 2014 2015 2016 Agency SFR SFR SFR SFR SFR Notes San Francisco $667.92 $701.40 $744.83 $ 784.44 $ 842.14 City of San Diego $572.58 $572.58 $572.58 $ 572.58 $ 572.58 Vallejo Sanitation/Flood Control District $495.12 $507.48 $520.20 $ 520.20 $ 520.20 Central Contra Costa Sanitary District $371.00 $405.00 $439.00 $ 471.00 $ 503.00 City of Los Angeles $391.56 $409.20 $435.40 $ 464.04 $ 494.77 Note 1 Sacramento County $288.00 $312.00 $348.00 $ 384.00 $ 420.00 Dublin San Ramon SerHces District $355.44 $355.44 $372.96 $ 382.38 $ 382.38 Union Sanitary District $319.55 $337.76 $357.02 $ 377.00 $ 380.05 East Bay MUD $305.10 $331.10 $358.14 $ 355.18 $ 372.50 City of Hayward $327.24 $327.24 $337.08 $ 347.16 $ 357.60 Orange County Sanitation District $294.00 $308.00 $316.00 $ 322.00 $ 327.00 City of Fresno $309.00 $309.00 $309.00 $ 309.00 $ 309.00 Irene Ranch Water District $206.40 $220.80 $246.00 $ 288.60 $ 309.00 Note 2 Om Loma Sanitary District $189.00 $195.00 $200.00 $ 206.00 $ 221.00 Los Angeles County $149.00 $150.00 $151.00 $ 155.00 $ 159.00 Note 3 Notes: (1)- Data is for the typical SFR customer rate and is not the average rate. (2)- Data represents the maximum SFR rate and is not the average rate. (3)- Data for 2013 and 2014 was revised to remo%ad valorem monies that were inadvertently included. Section 1 - Page 7 FY 2016-17 Third Quarter Report Benchmark Study Five-Year Cost per MG FY 11-12 FY 12-13 FY 13-14 FY 14-15 FY 15-16 Agency Svc.Trt. Cost]MG Cost/MG CosVMG Cost/MG CosVMG Notes Central Contra Costa Sanitary District B 4 $4,203.43 $4,621.84 $5,778.43 $6,280.58 $6,453.65 Vallejo SanitatiordFlood Control District B 3 $5,176.00 $5,435.00 $6,153.00 $5,590.00 $5,396.00 San Francisco B 3 $4,778.96 $5,006.74 $5,400.28 $5,357.97 $5,268.23 Note 1 Union Sanitary District B 3 $3,267.06 $3,805.40 $3,832.47 $3,910.73 $3,957.08 City of San Diego B 2 $3,242.30 $3,340.35 $3,156.43 $3,591.69 $3,171.51 Dublin San Ramon Services District B 3 $2,009.57 $2,159.49 $2,506.60 $2,522.00 $2,895.95 East Bay MUD T 4 $2,320.02 $2,359.40 $2,559.18 $2,727.97 $2,598.53 Sacramento County T 3 $3,312.50 $2,143.16 $2,375.47 $2,494.40 $2,571.14 Note City of Los Angeles B 4 $1,935.00 $2,062.00 $2,163.00 $2,269.00 $2,452.00 Orange County Sanitation District B 3 $1,871.47 $1,906.01 $1,935.05 $2,070.97 $2,110.43 City of Fresno B 3 $1,383.60 $1,411.89 $1,552.39 $1,628.91 $1,678.28 Los Angeles County B 4 $1,156.00 $1,008.00 $1,223.72 $1,239.40 $1,371.06 Note 3 Legend for Service Provided and Treatment Level: B-Agencyoperates both collection and treatment facilities T-Agency provides treatment services but not collection 2-Advanced primary or pdmarywith some secondary treatment 3-Secondarytreatment 4-Advanced secondaryor secondarywith some tertiary treatment Notes: (1)-Beginning in Fiscal Year 2012-13,dataset represents wastewater flows from finalbed publidyavailable audited documents, (2)-Miles of sewers number changed in 2012 to include parallel force main pipes per the 2011 State of the District Report. (3)-Does not include source control or overhead costs. Section 1 - Page 8 Consolidated Financial Reports Capital Outlay Review: $200,000,000 $150,000,000 $100,000,000 S50,000,000 $0 3/31/17 Actual Projected 2016-17 2016-17 Capital Outlay Capital Outlay Capital Outlay Cashflow Budget $101,039,226 $144,666,300 $181,913,075 As depicted by the preceding chart, Capital Outlays totaled $101.0 million or 55.5 percent of the capital outlay cash flow budget for FY 2016-17 as of March 31, 2017. Costs are proportionately low through the third quarter as some projects are still in the design phase or have experienced various delays or deferrals. Examples as of March 31 are the Sludge Dewatering and Odor Control for Plants 1 and 2, which has a combined FY16-17 cash flow budget of $41.9 million but actual costs of only $23.7 million and the Rehabilitation of Western Regional Sewers, which has a budget of$16.0 million but actual costs of only $3.8 million. Overall, the capital outlay costs of the capital improvement program are expected to approximate $144.7 million, or 79.5 percent of the capital outlay cash flow budget at year-end. More detailed information on the capital improvement program is provided within Section 3. Capital Assets Schedule and Debt Service Budget Review: Section 4 is the Capital Assets Schedule and Debt Service Section. This section shows the cost value of the Sanitation District's capital facilities at March 31, 2017, as well as the debt service costs resulting from the need to provide funding for the construction of capital facilities. The majority of principal payments on debt issues are due in August during the first quarter, and in February during the third quarter of each fiscal year. Excluding payments on refunding debt from the Certificate of Participation, Series 2007A, and Revenue Refunding Certificate Anticipation Notes, Series 2014B, as of March 31, 2017, 100.0 percent of the principal payments have been made through the end of the third Section 1 - Page 9 FY 2016-17 Third Quarter Report quarter. Total principal payments, excluding refundings, are expected to approximate budget at year-end. Interest costs are expensed ratably throughout the fiscal year. Interest expense is anticipated to approximate budget at year-end. Self-Insurance Budget Reviews: Section 5 is the Self-Insurance Section. Through March 31, the Self-Insurance Fund revenues totaled $1.8 million or 75.1 percent of the budget, while expenses were $2.1 million or 85.4 percent of the budget. Separate fund accounting is used for recording the revenue and expenses incurred in managing these liability claims. The revenues to these funds represent charges to operating divisions. Expenses to these funds include actual claims paid, claims administration, and excess loss policies. Section 1 - Page 10 Operating Budget Review Cost per Million Gallons by Department Budget and Actual March 31, 2017 $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $500 $500 $400 $300 $200 $100 $0 'uw Z8 � N j �eutlget �Aclual Collection, Treatment, & Disposal Expenses by Major Category Budget and Actual (in thousands) March 31,2017 $70,000 M'000 $00,000 $55,000 W'000 U5,000 $40,000 $35,000 $ '000 $25,Ooo $20,000 $15,000 $10,000 $5,000 $0 Eu o' 2 8 Meuaeac Nnmai Section 2-Page 1 2016-17 Third Quarter Report Divisional Contributions to Cost Per Million Gallons For the Nine Months Ended March 31,2017 2016-17 3131115 3/31116 Annual 3131117 Actual Actual Budget Actual Flow in Million Gallons 51,846.53 50,51269 67,525.00 51,544.07 Flow In Million Gallons per Day 189.22 183.68 185.00 188.12 Executive Management Department General Management Administration $ 2&53 $ 30.72 $ 46.27 $ 33.41 Board Services &22 7.44 9.38 8.08 Public Affairs 8.60 1&09 15.11 14.86 Subtotal 40.35 51.25 70.76 56.35 Human Resources Detainment Human Resources 55.10 56.43 58.04 50.33 Risk Management/Safety I Security 48.85 45.35 70.33 60.10 Subtotal 103.95 101.78 128.37 110.43 Administrative Services Department Administrative Services 9S5 8.65 8.75 7.36 Financial Management 44.50 47.50 50.51 42.21 Contracts,Purchasing,&Materials Mgmt. 62.15 62.97 61.74 61.91 Information Technology 151.12 148.83 154.39 139.12 Subtotal 267.42 267.95 275.39 250.60 Facilities Support Services Department Facilities Support Administration 10.57 16.86 - - Facilities Support 5.85 - - - Equipment Rebuild 17.96 - - - FleetSevices 29.38 31A6 - - Collections Engineering 40.10 40.00 - - NPDES Source Inspection 31.97 34.45 - - Odor and Corrosion Control 100.61 98.08 - - Collection Facilities 0&M 5736 56.85 Subtotal 294.20 277.40 Environmental Services Department Environmental Services Administration - - 12.41 11.86 Resource Protection - - 85.14 79.23 Laboratory&Ocean Monitoring 15376 150.62 Subtotal 251.31 241.71 Engineering Department Engineering Administration 9.89 7.17 5.91 6.45 Planning 42.94 50.28 48.61 48.48 Project Management Office 51.86 36.85 39.89 39.58 Civil and Mechanical Engineering 128.20 141.09 124.51 123.56 Electrical&Control System Engineering - - 68.29 61.08 Environmental Compliance 103.99 98.08 Subtotal 336.88 333.47 287.21 279.15 Operations&Maintenance Department Operations&Maintenance Administration 10.49 13.11 10.15 6.88 Collections Facilities O&M - - 190.21 167.47 Fleet Services - - 31.27 29.12 Plant No.l Operations 384.50 486.55 429.21 374.65 Plant No.2 Operations 294.43 301.91 301 304.97 Building,Grounds&Mechanical Maintenance 203.69 - - - Instrumentation&Electrical Maintenance 209.91 - - - PlantNo.lMaintenance - 233.22 240.67 228.67 Maintenance Reliability and Planning - - 59.03 23.11 Plant No.2 Maintenance - 167.78 168.14 171.25 Environmental Laboratory&Ocean Monitoring 116.10 120.18 Subtotal 1,219.12 1,321.75 1,438.48 1,306.12 Total Operating Expenses 2,261.92 2,353.60 2,451.52 2,244.36 Cost Allocation (23529) (28503) (284.52) (29311) Net Operating Requirements $ 2,02663 $ 2,068.57 $ 2,16700 $ 195125 Section 2-Page 2 Operating Budget Review Comparison of Expenses by Department For the Nine Months Ended March 31,2017 2016-17 3/31115 3/31/16 Year to Dale Budget% Department and Division Actual Actual Budget 3131/17 Realbed Executive Management Department General Management Administration $ 1,220,179 $ 1,551,933 $ 3.124,220 $ 1,721,995 55.12% Board Services 426,090 375,805 633,540 416,378 65.72% Public Affairs 445,732 661,151 1,020,100 766,109 75.10% Subtotal 2,092,001 2,588,889 4,777,860 2,904,482 60.79% Human Resources Department Human Resources 2,856,736 2.850,633 3.918,890 2,594,345 66.20% Risk Management l Safety/Security 2,532,910 2,290,593 4,749,050 3,097,847 65.23% Subtotal 5,389,646 5.141,226 8.667,940 5,692,192 65.67% Administrative Services Department Administrative Services 500,062 436,875 590,830 379,381 64.21% Financial Management 2,307,149 2,399,205 3,410,810 2,175,718 63.79% Contracts,Purchasing,&Materials Mgmt. 3,222,169 3,180,634 4,169,220 3,191,115 76,54% Information Technology 7,835,083 7.517,576 10.425,510 7,170.618 68.78% Subtotal 13,864,463 13,534,290 18,596,370 12,916,832 69.46% Facilities Support Services Department Facilities Support Administration 547,868 851,413 - - 0.00% Facilities Support 303,532 - - - 0,00% Equipment Rebuild 930,925 - - - 0.00% Fleet Services 1,523,297 1.573,934 - - 0.00% Collections Engineering 2,079,232 2,020,418 - - 0.00% NPDES Source Inspection 1,657,580 1,739,984 - - 0,00% Odor and Corosion Control 5,216,353 4,954,267 - - 0.00% Collection Facilities O&M 2,994,449 2,871,400 0.00% Subtotal 15.253,236 14,011,416 0.00% Environmental Services Department Environmental Services Administration - - 838,250 611,470 72.95% Resource Protection - - 5.748,920 4,083,835 71.04% Laboatorr&Ocean Monitoring 10,382,450 7,763,786 74.78% Subhund 16,969,620 12,459,091 73.42% Engineering Department Engineering Administration 512,848 362,398 399,390 332,514 83.26% Planning 2,226,241 2,539,623 3,282,440 2,499,012 76.13% Project Management Office 2,688,734 11861,190 2,693,360 2,040,356 75,76% Civil and Mechanical Engineering 6,646,5% 7.127,049 8.407,280 6,369,027 75.76% Electrical&Control System Engineering - - 4,610,980 3,148,377 68.28% Environmental Compliance 5,391,390 4,954,520 0.00% Subtotal 17,465.769 16.844,780 19,393,450 14,389,286 74,20% Operations&Maintenance Department Operations&Maintenance Administration 543,765 662,192 685,600 354,662 51,73% Collections Facilities 0&M - - 12,844,162 8,632,002 67.21% Fleet Services - - 2.111,320 1,501,172 71.10% Plant No.l Operations 19,934,%9 24,526,402 28,982,656 19,310,893 66.63% Plant No.2 Opemons 15,265,251 15,250,445 20,918,950 15,719,496 75.14% Building,Grounds&Mechanical Maintenance 10,560,783 - - - 0,00% Instrumentation&Electrical Maintenance 10,883,108 - - - 0.00% Plant No.1 Maintenance - 11.780,439 16,250,917 11,786,631 72.53% Maintenance Reliability and Planning - - 3,985,895 1,191,251 29.89% Plant No.2 Maintenance - 8,474,898 11,353,810 8,827,127 77.75% Environmental Laboratory,&Ocean Monitoring 6,019,195 6.071,382 0.00% Subtotal 63,207,089 66,765,758 97,133,310 67,323,234 69.31% Total Operating Expenses 117,272,204 118.886,359 165,538,550 115,685,117 69.88% Cost Allocation (12,198,701) (14.397,165) (19.182,030) (15,109,e85) 78P7% Net Operating Requirements $ 105,073,503 $ 104.489,194 $ 146.356,520 $ 100,575,232 68.72% Section 2-Page 3 2016-17 Third Quarter Report Summary of Collection, Treatment, &Disposal Expenses by Major Category For the Nine Months Ended March 31,2017 Expense Expense Increase Increase Percent Budget Through Through (Decrease) (Decrease) Budget Remaining Description 2016-17 3131117 3131116 $ % Realized Budget Salary&Wages $ 66,833,000 49,447,575 47,969,719 $ 1,477,856 3.08% 73.99% $ 17.385,425 Employee Benefits 22,456,800 17,145,625 20,601,768 (3,456,143) -16.78% 76.35% 5,311,175 Administrative Expenses 1,964,150 1,148.500 1,240,525 (92,025) -7.42% 58.47% 815,650 Printing&Publication 310,690 189,860 184,110 5,750 3.12% 61.11% 120,830 Training&Meetings 1,193,070 623,323 516,071 107,252 20.78% 52.25% 569,747 Operating Materials&Supplies 16,698,250 10,991,904 11,975,064 (983,160) -8.21% 65.83% 5,706,346 Contractual Services 25,138,420 17,320,602 16,694,008 626,594 3.75% 68.90% 7,817,818 Professional Services 4,275,830 2,228,015 2,097,059 130,956 6.24% 52.11% 2,047,815 Research&Monitoring 800,000 524,509 521,887 2,622 0.50% 65.56% 275,491 Repairs&Maintenance 14,220,930 9,524,542 9,989,533 (464,991) -4.65% 66.98% 4,696,388 Utilities 8,242,240 4,683.734 5,735,818 (1,052,084) -18.34% 56.83% 3,558,506 Other Materials,Supplies, and Services 3,405,170 1,856,928 1,360,797 496,131 36.46% 54.53% 1,548,242 Net Cast Allocation (19,182,030) (15,109,885) (14,397,165) (712,720) 4.95% 78.77% (4,072,145) Net Operating Requirements 146,356,520 100,575,232 104,489,194 (3,913,962) .3.75% 68.72% 45,781,288 Gallonage Flow(MG) 67,52&00 51,544.07 50,512.69 1,031.38 2.04% Gallonage Flow(MGD) 185.00 188.12 183.68 4.44 2.42% Gallonage Flow($'a/MG) $2,167000 $1,951.25 $2,068.57 ($117.32) -5.67% Section 2-Page 4 Operating Budget Review Summary of Revenues For the Nine Months Ended March 31, 2017 Revenue percent Revenue Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2016-17 3/31/17 Realized Budget 3131116 $ % Service Fees $286,554,000 $179,469,176 62.63% $107,084,824 $180,908,846 $ (1,439,670) -0.80% Permit Fees 11,272,000 9,576,8% 84.96% 1,695,102 8,325,182 1,251,716 1504% Inter District Sewer Use-SAWPA&SBSD 3,283,000 2,413,258 73.51% 869,742 2,404,756 8,502 0,35% Intra District Sewer Use-IRWD 3,737,690 (3,640,415) -97.40% 7,378,105 1,812,401 (5,452,816) -300.86% Sludge Disposal-IRWD 9,090,000 11,516,699 126.70% (2,426,699) 7,553,298 3,963,401 52.47% Capital Assessments-IRWD 4,402,000 1,709,692 38.84% 2,692,308 1,913,704 (204,012) -10A6% Capital Facilities Capacity Charges 13,500,000 8,097,989 59.99% 5,402,011 10,635,657 (2,537,668) -23.86% Debt Proceeds - 195.083,269 N/A (195,083,269) 174,868,588 20,214,681 11.56% Property Taxes 87,017,000 55,307,967 63,56% 31,709,033 52,841,724 2,466,243 4.67% Interest Earnings 8,606,000 1,543,527 17.94% 7,062,473 6,602,933 (5,059,406) -76.62% Wastehauler 750,000 716,662 95.55% 33,338 530,914 185,748 34.99% Grant Revenue - - NIA - 450,000 (450,000) -100.00% CNG Sales 400,000 331,711 82.93% 68,289 292,519 39,192 13.40% Rents&Leases 255,000 194,238 76A7% 60,762 192,079 2,159 1.12% Other 800,000 269,604 33.70% 530,396 776,669 (507,065) -65.29% Power Sales 20,000 37,555 187.78% (17,555) 17,703 19,852 112A4% Other Sales 35,000 48,875 139.64% (13,875) 38,512 10,363 26.91% Total Revenues $429,721,690 $462,676,705 107.67% $(32,955,015) $450,165,485 $ 12,511,220 278% Section 2-Page 5 2016-17 Third Quarter Report Summary of Collection,Treatment, &Disposal Expenses by Line Item For the Nine Months Ended March 31, 2017 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2016.17 3131117 Expensed Budget =1116 $ % Salaries.Wanes&Benefits Salaries&Wages $ 66,833,000 $ 49,447,575 73.99% $ 17,385,425 $ 47,969,719 $ 1,477,856 3.08% Employee Benefits Retirement 10,950,600 8,573,349 78.29% 2,377,251 12,189,137 (3,615,788) -29.66% Group Insurances 9,725,700 7,102,677 73.03% 2,623,023 6,875,339 227,338 3.31% Tuition&Certification Relmb 175,600 80,407 4579% 95,193 112,084 (31,657) -28.25% Edu.degraea,Cad.&Lic. 314.600 312,062 99.19% 2.538 243.756 68,305 28.02% Uniform Rental 53,200 87,655 164.77% (34,455) 38,548 49,107 127.39% Workers Compensation 1,196,300 897,226 75.00% 299,074 1,109,028 (211,802) -19.10% Unemployment insurance 2,900 14,048 484.41% (11,148) 2,424 11,624 479.54% EMT Supplemental Benefits 37.900 78,201 206.34% 140.301) 311472 46,729 148.48% Total Benefits 22,456,800 17,145,625 76.35% 5,311,175 20,601,768 (3,456,143) Salaries,Wages&Benefits 89,289,800 66,593,200 74.58% 22,696,600 68,571,487 (1,978,287) -2.88% Matl.Supply.&Services Administrative Expenses Memberships 596,050 483,474 81.11% 112,576 161,636 21,838 4.73% Office Exp-Supplies 61.370 45,523 74.18% 15.847 41.981 3,542 8."% Postage 41,040 27,969 68.15% 13,071 22,529 5,440 24.15% Books&Publications 50,970 25,754 50.53% 25,216 19,604 6,150 31.37% Fortes 1,300 - 0.00% 1.300 231 (231) -100.01 Small Computer Items 908,000 494,526 54.46% 413.474 590.491 (95,965) -16.25% Minor Furniture&Fixtures 305,420 71,254 23.33% 234,166 104,053 (32,799) Subtotal 1,964,150 1,148,500 58.47% 815,650 1,240,525 (92,025) .7.42% Printing&Publication Repro-In-House 243,690 141,396 53.02% 102,294 160,912 (19,516) -12.13% Printing-Outside 22,250 8,925 40.11% 13,325 6,314 2,611 41.35% Notions&Ads 44,700 39,539 88.45% 5,161 16,884 22,655 134.18% Photo Processing 50 0.00% 50 NIA Subtotal 310,690 189,860 61.11% 120,830 184,110 5,750 3.12% Training&Meetings Meetings 188.310 79,984 42.47% 108.326 100.945 (20,961) -20.76% Training 1,004,760 543,339 54.08% 461,421 415,126 128,213 30.89% Subtotal 1,193,070 623,323 52.25% 569747 516,071 107,252 20.78% Operating starts&Supplies Chemical Coagulants 5,126,550 3,827,411 74.66% 1,299,139 4,495,488 (668,0P) -14.81 Odor Control 8,157,300 5,144,367 63.06% 3,012,933 5,297,203 (152,836) .2.89% Disinfection 170,500 140,780 82.57% 29,720 142.950 (2,170) -1.52% Chemicals-Mist&Cogan 472.000 224,707 47.61% 247.293 217.914 6,793 3.12% Gasoline,Diesel&Oil 632,790 397,407 62.81% 235,303 410,007 (12,520) -3.05% Tools 691,950 219,384 31.71% 472,566 312,809 (93,425) -29.87% Safety equlpmenthools 587,560 442,313 75.28% 145,247 472.500 (30,187) -6.39% Sol,Paints&Jan.Supplies 82.390 60,178 73.04% 22.212 63,0m (2,846) 4.52% Lab Chemicals&Supplies 601,360 416,942 69.33% 184,418 437,413 (20,471) 4.68% Other Operating Supplies 171,850 117,304 68.26% 54,546 123,863 (6,659) -5.30% Property Tax Fees 4,000 1,031 25.78% 2,969 1,893 (862) 45.54% Subtotal 16,698,250 10,991,904 65.83% 5706.346 11,975,064 (983,160) Contractual Services Solids Remoyal 17,206,000 12,785,999 74.31% 4,420,001 13,224,276 (438,277) -3.31% Other Waste Disposal 886,400 609,058 6871% 277.342 608.228 830 0.14% Groundskesping 129,720 115,145 88.76% 14,575 103,959 11,186 10.76% Janitorial 345,700 269,678 77.98% 76,122 333,643 (S4,065) -19.20% Outside Lab Services 275,000 86,156 31.33% 188,844 114,304 (28,148) -24.63% Oxygen 406.000 252,460 62.18% 153,540 295.124 (42,664) -14.46% County Service Fee 671,700 45,213 6.73% 626,487 38,869 6,344 16.32% Temporary Services 814,400 454,756 55.84% 359,644 308,375 146,381 47.47% Security Services 1,330,000 828,882 62.32% 501,118 305,200 523,682 171.59% Other 3,073,500 1,873,355 60.95% 1,200,145 1,362,030 511,325 37.54% Subtotal 25,138,420 17,320,602 68.90% 7,817,818 16,694,008 626,594 3.75% (Continued) Section 2-Page 6 Operating Budget Review Summary of Expenses by Line Item For the Nine Months Ended March 31,2017 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 20111 Y31117 Expensed Budget 3131116 $ % Continued: Prohssional Services Legal 1,363,500 877,711 64.37% 485,789 1,012,062 (134,351) -1&27% Audit&Accounting 270,700 72,056 26.62% 19&644 99,908 (27,852) -27.88% Engineering 743,000 359,471 48.38% 383,529 184,279 175,192 95.07% Enviro Scientific Consulting 125,000 35,674 28.54% 89,326 47,531 (11,057) -24.95% Software PMm Consulting 370,000 286,540 77.44% 83,460 187,429 99,111 52.88% Advocacy Eltods 176,000 122,620 69.67% 53,3W 129,475 (6,855) -5.29% Industrial Hygiene Services 50,000 45,494 90.99% 4,506 115,480 (69,986) -60.60% Labor Negotiation Services 80,000 56,350 70.44% 23,650 - 56,350 N/A Other 1,097,6W 372,099 33S0% 725,631 320,895 51,204 15S6% Subtotal 4,275,830 2,228,015 52.11% 2,047,815 2,097,059 130,956 6.24% Research&Monitoring Environmental Monitoring 305,000 221,5T7 72.65% 83,423 209,980 11,597 5S2% Air Quality Monitoring 95,000 2,932 3.09% 92,068 11,907 (8,975) -75.38% Research 400,000 3001000 75.00% 10010W 300,000 0.00% Subtotal 800,000 524,509 65.56% 275,491 521,887 2,622 0.50% Repairs&Maintenance Materials&Services 11.408,670 7,666,335 68.95% 3,542,335 8.295,480 (428,145) -5.17% Svc.Mtc Agreements 2,812,260 1,650,207 58.96% 1,154,053 1,694,053 (35,846) -2.12% Subtotal 14,220,930 9,524,542 88.98% 4,696,388 9,989,533 (464,991) 4.65% Utilities Telephone 400,000 236,305 59.08% 163,695 265,994 (29,669) -11.16% Diesel For Generators 18,240 4,750 2&G4% 13,490 6,986 (2,236) -32.01% Natural Gas 519,000 404,302 77.90% 114,698 349,467 54,835 15.69% Pmver 6,654,000 3,606,859 54.21% 3,047,141 4.656,516 (1,D49,657) -22.54% Water 651,000 431,518 66.29% 219,482 456,855 (25,337) -5.55% Subtotal 8,242,240 4,683,734 56.83% 3,558,506 5,736,818 (1,052,084) -%U% Other Operating Supplies Outside Equip Rental 139,600 63,779 45.69% 75,821 12,837 50,942 396.84% Insurance Premiums 32,000 31,049 97.03% 951 31,386 (337) -1.07% Prop&Gen Liab Insurance 1,111,100 833,328 75.00% 277,772 371,997 461,331 124.01% Freight 70,030 53,001 75.68% 17,029 60,072 (7,071) -11.77% Misc.Operating Expense 207,310 136,754 65.97% 70,556 159,867 (23,113) -14.46% Regulatory Operating Fees 716,900 696,808 97.33% 19,092 693,160 3,648 0.53% Subtotal 2,275,940 1,814,719 79.73% 461,221 1,329,319 485,400 36.51% General Mgr Contingency &Reappropriaeons 1,015,700 0.00% 1,015,700 N/A Other Non-Oper Expense Others 113,530 42,208 37.18% 71,321 31,478 10,731 34.09% Subtotal 113,530 42,209 37.18% 71,321 31,478 10,731 34.09% Total Materials, Supplies&Services 76,248,750 49,091,917 64.38% 27,156,833 5Q314,872 (1,222,955) -2.43% Total Expenditures 165,538,550 116,685,117 69S8% 49,863,433 118,886,359 (3,201,242) -2S9% Cost Allocation (19,182,030) (15,109,885) 7877% (4,072,145) (14,397,165) (712,720) 4S6% Net Operating Requirements $ 146.356,520 $ 100,575,232 68.72% $ 45781,288 $ 104,489,194 $ (3,913,962) -3.75% Section 2-Page 7 2016-17 Third Quarter Report Summary of Collection, Treatment,8 Disposal Expenses by Process For the Nine Months Ended March 31,2017 Increase Increase Actual Actual (Decrease) (Decrease) 3/31/17 3/31/16 $ % Process: Preliminary Treatment $ 5,974,349 $ 6,674,036 $ (699,687) -10.48% Primary Treatment 7,561,814 9,205,661 (1,643,848) -17.86% Secondary Treatment 5,783,659 5,725,918 57,740 1.01% Cryogenic Plant(Plant 2) 483,506 544,922 (61,416) -11.27% Ef0uent Disposal 463,598 742,103 (278,505) -37.53% Solids Handling 33,382,002 34,610,347 (1,228,345) -3.55% Cogeneration 9,586,630 12,203,558 (2,616,928) -21.44% Utilities 2,182,329 2,050,225 132,104 6.44% Electrical Distribution 1,024,199 1,608,264 (584,066) -36.32% Miscellaneous Buildings 6,750,270 6,606,730 143,540 2.17% External Location 32,237 72,967 (40,729) 55.82% Nedssa Vessel 162,216 175,521 (13,305) -7.58% North County Yard 2,084 39,879 (37,795) -94.78% Laboratory 11,317,241 9,114,751 2,202,490 24.16% Collections 15,869,098 15,116,374 752,724 4.98% Net Operating Requirements $ 100,575,232 $ 104,491,257 $ (3,916,025) -3.75% Section 2-Page 8 Operating Budget Review Staffing Trends Full Time Equivalents March 31, 2017 700 650 626 624 624 624 627 600 38 44 52 50 550 :1 500 450 6/30/13 6130114 6/30/15 6130/16 3/31/17 8Actua1 8Va.a t At March 31, 2017, the total head count was 591 employees, or a full time equivalency of 577. Section 2-Page 9 2016-17 Third Quarter Report This Page Intentionally Left Blank Section 2- Page 10 CIP Budget Review Capital Improvement Program By Type and Funding Source For the Nine Months Ended March 31,2017 MCollectlons Facilities: 313% eHeadearks: 05% ePdmaryTreahnenC 2.9% oSecondary Treatment 0.1% MSolids Handling&Olgestion: 30.1% 00.n Outbll Sysems: 6.9% Glttllity Systeme: 1.3% MPmoess Related Special Projects: 10 Mlnbrmatlon Management Systems. 1]% MStrategic&Master Planning: 2.9% Ill Management Projects: 0.3% MResearnh: 01% OSuppod Faaltlies: 15.2% Mothers: 0.0% MPdor Year Treatment Projects: 02% MCapital Equipment Purchases: 15% Total Capital Improvement Outlays-$101,039,226 Replacement/Rehabilitation: 41% #1 Improved Treatment: 15% ❑Additional Capacity: 30% ■Support: 14% Total Capital Improvement Outlays -$101,039,226 Section 3- Page 1 FY 2016-17 Third Quarter Report Summary of Capital Improvement Construction Requirements - Current Year For the Nine Months Ended March 31, 2017 2016-17 2016-17 2016.17 Cashflow Actual at Projected Budget 3/31/2017 Outlay Collection System Improvement Proiects Collections Facilities Santa Ana Trunk Sewer Rehab. $ 74,119 $ 18,914 $ 41,900 Raitt and Bristol Street Sewer Rehab& Extension 204,379 - 196,600 Santa Ana River Interceptor(SARI) Realignment 562,271 64,651 73,300 SARI Rock Stabilizers Removal 312,927 (23,686) 242,500 Newhope-Placentia Trunk Grade Separation Replacements 934,520 9,889 37,300 Newhope-Placentia Trunk Replacement 7,181,679 13,056,756 16,3B4,800 Newhope-Placentia Trunk Replacement, Segment B 13,762,266 2,594,018 2,594,100 Lakeview Grade Separation Project 154,706 784 80,200 Tustin Rose OCTA Grade Separation Project 71,317 134,901 135,000 Seal Beach Pumping Station Upgrade and Rehabilitation 5,964,626 947,120 3,042,400 Rehabilitation of Western Regional Sewers 16,018,059 3,764,275 7,137,300 Doig Drive Building Improvements - - 173,600 Newport Force Main Rehabilitation 5,903,015 1,387,403 1,387,500 Bay Bridge Pumping Station Replacement - 143,560 143,600 District 6 Trunk Sewer Relief 4,623,818 319,446 979,800 Southwest Costa Mesa Trunk 876,199 199,105 199,200 Gisler-Redhill System Improvements, Reach "B" 11,951,892 8,399,875 11,209,200 Gisler Red-Hill Interceptor Rehabilitation 102,511 - 46,700 Master Facilities Engineering Projects-Collections 1,429,603 222,147 1,194,400 Master Planning Studies-Collections 2,748,262 171,022 171,100 Bay Bridge Pump Station and Force Mains Rehab Study 361,019 92,961 93,000 Additional Charges to CIP Closed at 6/30/16 44,652 44,700 Subtotal-Collections Facilities 73,237,188 31,547,793 45,608,200 Revenue Area 14 Newport Force Main Rehabilitation (2.18%) 131,554 30,919 31,000 Subtotal -Revenue Area 14 131,554 30,919 31,000 Total Collection System Improvement Projects 73,368,742 31,578,712 45,639,200 (Confined) Section 3-Page 2 CIP Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Nine Months Ended March 31, 2017 2016-17 2016-17 2016.17 Cashflow Actual at Projected Budget 3/31/2017 Outlay Treatment&Disposal Projects Headworks Headworks Rehabilitation and Expansion at Plant 1 6,705,388 2,915,996 5,855,000 Truck Line Odor Control Improvements P1 3,244,621 1,448,506 1,448,600 Headworks Modifications at P2 for GWRS Final Expansion 139,894 168,100 Subtotal -Headworks 9,950,009 4,504,396 7,471,700 Primary Treatment Primary Clarifier&Trickling Filter Odor Control at P1 95,767 - 58,700 Plant No. 1 Primary Treatment Upgrades 293,871 207,399 207,400 Primary Clarifiers Repl & Impr at Plant No. 1 - 463,607 463,700 A-Side Primary Clarifiers Repl.at P2 1,684,096 2,233,178 3,650,300 Subtotal-Primary Treatment 2,073,734 2,904,184 4,380,100 Secondary Treatment Return Activated Sludge Piping Replacement Plant No.1 - 19,397 24,600 Activated Sludge Aeration Basin Deck Repair at P2 295,085 107,492 107,500 Oxygen Plant Demolition at Plant No. 2 428,585 20,304 36,700 Subtotal-Secondary Treatment 723,670 147,193 168,800 Solids Handling& Digestion Digester Rehabilitation at Plant 1 4,754,023 5,760,338 5,978,300 Sludge Dewatedng and Odor Control at Plant 1 18,460,389 9,980,163 12,043,300 Solids Thickening and Processing Upgrades 4,208,003 1,035,123 1,035,200 Sludge Dewatering and Odor Control at Plant 2 23,463,706 13,676,460 19,863,800 Subtotal-Solids Handling &Digestion 50,886,121 30,452,084 38,920,600 Ocean Outfall Systems Final Ef0uent Sampler and Building Area Upgrades 5,602,416 4,478,642 4,862,900 Ocean Outfall System Rehabilitation 4,648,804 2,312,252 4,136,400 Interplant Effluent Pipeline Rehabiliation 192,329 192,400 Subtotal-Ocean Oulfall Systems 10,251,220 6,983,223 9,191,700 Utility Systems Cengen Cooling Water System Replacement - 9,547 9,700 Cengen Emissions Control Project 692,372 272,122 272,200 Digester Gas Facilities Rehabilitation 332,017 92,997 93,000 Natural Gas Pipelines Repl at Plant No. 1 and 2 33,573 20,360 85,400 Plant Water System Rehabilitation at Plant No. 1 11,645 420 500 Plant Water System Rehabilitation at Plant No. 2 1,884 4,084 4,100 Consolidated Demolition&Utility Improvements at P2 1,081,187 873,939 1,088,000 Plant Air System Master Plan 45,061 (42) (100) Subtotal-Utility Systems 2,197,739 1,273,427 1,552,800 (Confined) Section 3-Page 3 FY 2016-17 Third Quarter Report Summary of Capital Improvement Construction Requirements - Current Year For the Nine Months Ended March 31, 2017 2016-17 2016-17 2016-17 Cashflow Actual at Projected Budget 3/3112 01 7 Outlay Process Related Special Projects Safety Improvements at Plants Nos. 1 and 2 704,960 625,616 2,624,300 Odor Control Master Plan 585,791 420,403 626,000 Subtotal -Process Related Special Projects 1,290,751 1,046,019 3,250,300 Information Management Systems Programmable Control Panel Upgrade 74,645 25,178 62,200 Project Management Information System - 571 137,500 Power Monitoring &Control Systems at P2 2,590,934 651,010 1,977,300 Master Information Technology Capital Program 502,307 486,725 486,800 Geographic Information System 616,445 403,459 433,500 EAM Software and Process Implementation 471,467 52,005 77,100 PD82D Software Replacement 98,061 10,000 30,000 Process Control System Upgrades Study 1,348,089 43,099 222,600 Subtotal-Information Management Systems 5,701,948 1,672,047 3,427,000 Strategic& Master Planning Master Planning Studies 3,363,060 2,953,955 5,872,100 Climate Change Impact Study 1,126 1,200 Subtotal-Strategic&Master Planning 3,363,060 2,955,081 5,873,300 Water Management Projects Effluent Reuse Study 1,104,241 341,418 341,500 Subtotal -Water Management Projects 1,104,241 341,418 341,500 Research Research Program 1,149,080 40,874 77,000 Fuel Cell Demo 16,644 12,984 13,000 SCCWRP Nutrient Cycling Sampling 42,659 23,750 23,800 AquaCrilox Evaluation/Design 255,469 57,736 131,900 Subtotal-Research 1,463,852 135,344 245,700 Support Facilities Master Facilities Engineering Projects- Plant 11,042,558 3,768,230 5,070,700 Pl Fleet Services UST Leak Remediation 1,693,273 60,171 60,200 Master Small Capital Replacement/Rehabilitation 1,711,019 28,649 491,800 Title 24 Access Compliance&Building Rehab Project 3,816,143 696,591 2,128,100 Headquarters Complex, Site& Security&Entrance Realign. 5,951,410 158,664 1,909,700 Site and Security Improvements at Plant No.2 12,797 5,030 5,100 Property Purchase 15475 Pacific St& 18484 Bandilier Cir 10,635,682 10,634,339 10,634,400 Subtotal-Support Facilities 34,862,882 15,351,674 20,300,000 (Continued) Section 3-Page 4 CIP Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Nine Months Ended March 31, 2017 2016-17 2016-17 2016-17 Cashflow Actual at Projected Budget 313 112 01 7 Outlay Others Capital Improvement Program Mgmt. Services 24,326 37,772 37,800 Subtotal-Others 24,326 37,772 37,800 Additional Charges to CIP Completed at 6130116 182,962 183,000 Total Treatment and Disposal Projects 123,893,553 67,986,824 95,344,300 Capital Equipment Purchases 3,682,780 1,473,690 3,682,800 Total Collection,Treatment and Disposal Projects and Capital Equipment Purchases 200,945,075 101,039,226 144,666,300 Less: CIP Savings and Deferrals (19,032,000) Net Collection,Treatment and Disposal Projects and Capital Equipment Purchases $181,913,075 $101,039,226 $144,666,300 Section 3-Page 5 FY 2016-17 Third Quarter Report Summary of Capital Improvement Construction Requirements- Project Life For the Nine Months Ended March 31,2017 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Collection System Improvement Projects Collections Facilities Santa Ana Trunk Sewer Rehab. 6,974,000 6,686,800 41,900 6,728,700 245,300 Raiff and Bristol Street Sewer Rehab&Extension 13,622,000 259,075 196,600 455,675 13,166,325 Santa Ana River Interceptor(SARI)Realignment 11,404,000 5,592,473 73,300 5,665,773 5,738,227 SARI Rock Stabilizers Removal 4,046,000 265,733 242,500 508,233 3,537,767 Taft Branch Sewer Relief 1,928,000 12,083 - 12,083 1,915,917 Newhope-Placentia Trunk Grade Separation Replacements 5,739,000 4,045,695 37,300 4,082,995 1,656,005 Newhope-Placentia Trunk Replacement 34,708,000 9,737,373 16,384,800 26,122,173 8,585,827 Newhope-Placentia Trunk Replacement,Segment 66,667,000 26,909 2,594,100 2,621,009 64,045,991 Yoffie Linda Pumping Station Abandonment 7,053,000 - - - 7,053,000 Lakeview Grade Separation Project 330,000 68,892 80,200 149,092 180,908 Tustin Rose OCTA Grade Separation Project 586,000 283,638 135,000 418,638 167,362 Beach Tmnk/Knott Interceptor Sewer Relief 118,678,000 - - - 118,678,000 Seal Beach Pumping Station Upgrade and Rehabilitation 60,840,000 2,073,689 3,042,400 5,116,089 55,723,911 Rehabilitation of Western Regional Sewers 217,069,000 2,518,370 7,137,300 9,655,670 207,413,330 Doig Drive Building Improvements 2,436,000 - 173,600 173,600 2,262,400 Newport Force Main Rehabilitation 62,604,800 56,646,974 1,387,500 58,034,474 4,570,326 Crystal Cove Pumping Station Rehabilitation 10,882,000 - - - 10,882,000 Bay Bntlge Pumping Station Replacement 54,000,000 - 143,600 143,600 53,856,400 Newport Beach Pump Stations Odor Control Improvements 4,066,000 - - - 4,066,000 District 6 Trunk Sewer Relief 7,965,000 1,421,400 979,800 2,401,200 5,563,800 Southwest Costa Mesa Trunk 29,650,000 1,747,830 199,200 1,947,030 27,702,970 Gisler-Redhill System Improvements,Reach"B" 25,213,000 6,299,980 11,209,200 17,509,180 7,703,820 Browning Subtrunk Sewer Relief 16,952,000 - - - 16,952,000 MacArthur Pumping Station Rehabilitation 8,762,000 - - - 8,762,000 Main Street Pump Station Rehabilitation 39,219,000 - - - 39,219,000 Gisler Red-Hill Interceptor Rehabilitation 5,486,000 - 46,700 46,700 5,439,300 Edinger/Bolsa Chiw Trunk Improvements 5,159,000 - - - 5,159,000 Edinger Pumping Station Rehabilitation 8,880,000 - - - 8,880,000 Slater Avenue Pump Station Rehabilitation 9,729,000 - - - 9,729,000 Master Facilities Engineering Projects-Collections 12,192,000 1,199,298 1,194,400 2,393,698 9,798,302 Master Planning Studies-Collections 10,636,304 402,264 171,100 573,364 10,062,940 Bay Bridge Pump Station and Force Mains Rehab Study 725,000 341,878 93,000 434,878 290,122 Additional Charges to CIP Closed at 6130116 44,700 4g700 (44,700) Subtotal-Collections Facilities 864,201,104 99,630,3M 45,608,200 145,238,554 718,962,550 Revenue Area 14: Newport Force Main Rehabilitation(2.18%) 1,395,200 1,262,425 31,000 1,293,425 101,775 Subtotal-Revenue Area 14 1,395,200 1,262,425 31,000 1,293,425 101,775 Total Collection System Improvement Projects 865,596,304 100,892,779 45,639,200 146,531,979 719,064,325 (Continued) Section 3-Page 6 CIP Budget Review Summary of Capital Improvement Construction Requirements- Project Life For the Nine Months Ended March 31,2017 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Treatment&Disposal Projects Headworks Headworks Rehabilitation and Expansion at Plant 1 274,841,000 2,433,404 5,855,000 8,288,404 266,552,596 Truck Line Odor Control Improvements P1 9,299,000 7,359,325 1,448,600 8,807,925 491,075 Headworks Modifications at P2 for GWRS Final Expansion 50,000,000 168,100 168,100 49,831,900 Subtotal-Headworks 334,140,000 9,792,729 7,471,700 17,264,429 316,875,571 Primary Treatment Primary Clarifier&Trickling Filter Odor Control at Pi 94,228,000 - 58,700 58,700 94,169,300 Plant No.1 Primary Treatment Upgrades 9,146,000 8,118,861 207,400 8,326,261 819,739 Primary Clarifiers Repl&Impr at Plant No.1 158,332,000 - 463,700 463,700 157,868,300 A-Side Primary Clarifiers Repl.at P2 428,264,000 978,734 3,650,300 4,629,034 423,634,966 Interim Food Waste Receiving Facility 5,400,000 5,400,000 Subtotal-Primary Treatment 695,370,000 9,097,595 4,380,100 13,477,695 681,892,305 Secondary Treatment Return Activated Sludge Piping Replacement Plant No.1 3,300,000 - 24,600 24,600 3,275,400 Activated Sludge Aeration Basin Deck Repair at P2 2,331,000 55,798 107,500 163,298 2,167,702 Oxygen Plant Demolition at Plant No.2 3,444,000 2,816.671 36,700 2,853,371 590,629 Subtotal-Secondary Treatment 9,075,000 2,872.469 168,800 3,041,269 6,033,731 Solids Handling&Digestion Digester Rehabilitation at Plant 1 67,150,000 57,765,401 5,978,300 63,743,701 3,406,299 Sludge Dewatering and Odor Control at Plant l 188,328,000 152,105,764 12,043,300 164,149,064 24,178,936 Solids Thickening and Processing Upgrades 51,150,000 46,778,286 1,035,200 47,813,486 3,336,514 Plant No.2 Digester Facilifies Rehabilitation 49,220,000 152,343 - 152,343 49,067,657 Sludge Dewatering and Odor Control at Plant 2 90,477,000 25,961,621 19,863,800 45,825,421 44,651,579 Subtotal-Solids Handling&Digestion 446,325,000 282,763,415 38,920,600 321,684,015 124,640,985 Ocean Oulfall Systems Final Effluent Sampler and Building Area Upgrades 16,411,000 11,079,895 4,862,900 15,942,795 468,205 Ocean Outfall System Rehabilitafion 91,000,000 3,043,856 4,136,400 7,180,256 83,819,744 Interplant Effluent Pipeline Rehabiliation 25,200,000 192,400 192,400 25,007,600 Subtotal-Ocean Ouffall Systems 132,611,000 14,123,751 9,191,700 23,315,451 109,295,549 Utility Systems Cengen Cooling Water System Replacement 11,477,000 11,374,655 9,700 11,384,355 92,645 Cengen Emissions Control Project 23,820,000 21,945,471 272,200 22,217,671 1,602,329 UPS System Upgrades 8,087,000 - - - 8,087,000 Digester Gas Facilities Rehabilitation 87,897,000 9,458 93,000 102,458 87,794,542 Natural Gas Pipelines Repl at Plant No.1 and 2 1,310,000 2,282 85,400 87,682 1,222,318 Electrical Power Distribution System Improvements 34,608,000 - - - 34,608,000 Plant Water System Rehabilitation at Plant No.1 6,157,000 6,113,517 500 6,114,017 42,983 (Confined) Section 3-Page 7 FY 2016-17 Third Quarter Report Summary of Capital Improvement Construction Requirements- Project Life For the Nine Months Ended March 31,2017 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Utility Systems(continued) Central Generation Rehab at Plant No. 1 73,151,000 - - - 73,151,000 Plant Water System Rehabilita0on at Plant No.2 3,704,000 3,737,750 4,100 3,741,850 (37,850) Consolidated Demolition&UOlity Improvements at P2 38,460,000 3,205,873 1,088,000 4,293,873 34,166,127 Central Generation Rehab at Plant No.2 95,906,000 - - - 95,906,000 Plant Air System Master Plan 225,000 187,096 (100) 186,996 38,004 Subtotal-Utility Systems 384,802,000 46,576,102 1,552,800 48,128,902 336,673,098 Process Related Special Projects Safety Improvements at Plants Nos.l and 2 11,202,000 202,858 2,624,300 2,827,158 8,374,842 Odor Control Master Plan 1,950,000 1,233,922 626,000 1,859,922 90,078 Subtotal-Process Related Special Projects 13,152,000 1,436.780 3,250,300 4,687,080 8,464,920 Information Management Systems Process Control Systems Upgrades 102,399,000 - - - 102,399,000 Programmable Control Panel Upgrade 2,283,000 1,785,807 62,200 1,848,007 434,993 Project Management Information System 4,000,000 - 137,500 137,500 3,862,500 Power Monitoring&Control Systems at P2 34,123,000 604,790 1,977,300 2,582,090 31,540,910 Master Information Technology Capital Program 10,000,000 - 486,800 486,800 9,513,200 Geographic Information System 4,568,000 1,947,390 433,500 2,380,890 2,187,110 EAM Software and Process Implementation 7,500,000 4,700,097 77,100 4,777,197 2,722,803 PDS2D Software Replacement 525,000 342,351 30,000 372,351 152,649 Process Control System Upgrades Study 3,554,000 222,600 222,600 3,331,400 Subtotal-Information Management Systems 168,952,000 9,380,435 3,427,000 12,807,435 156.144,565 Strategic&Master Planning Master Planning Studies 13,015,696 1,190,605 5,872,100 7,062,705 5,952,991 Climate Change Impact Study 590,000 1,200 1,200 588,800 Subtotal-Strategic&Master Planning 13,605,696 1,190,605 5,873,300 7,063,905 6,541,791 Water Management Projects Effluent Reuse Study 3,250,000 2,529,365 341,500 2,870,865 379,135 Subtotal-Water Management Projects 3,250,000 2,529.365 341,500 2,870,865 379,135 Research Research Program 8,500,000 - 77,000 77,000 8,423,000 Fuel Cell Demo 135,000 118,192 13,000 131,192 3,808 SCCWRP Nutrient Cycling Sampling 95,000 71,250 23,800 95,050 (50) AquaCrilox Evaluatron/Design 588,000 402,510 131,900 534,410 53,590 Subtotal-Research 9,318,000 591,952 245,700 837,652 8,480,348 (Continued) Section 3-Page 8 CIP Budget Review Summary of Capital Improvement Construction Requirements- Project Life For the Nine Months Ended March 31, 2017 Current Total Approved June 30,2016 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2017 Budget Support Facilities Master Facilities Engineering Projects-Plant 28,373,000 7,756,133 5,070,700 12,826,833 15,546,167 P1 Fleet Services UST Leak Remediation 14,952,000 99,904 60,200 160,104 14,791,896 Master Small Capital ReplacementlRehabilitation 15,622,000 2,065,761 491,800 2,557,561 13,064,439 Title 24 Access Compliance&Building Rehab Project 17,509,000 12,967,931 2,128,100 15,096,031 2,412,969 Headquarters Complex,Site&Security&Entrance Realign. 179,067,000 169,006 1,909,700 2,078,706 176,988,294 Site and Security Improvements at Plant No.2 252,000 227,660 5,100 232,760 19,240 Property Purchase 18475 Pacific St&18484 Bandilier Cir 10,635,682 10.634,400 10,634,400 1,282 Subtotal-Support Facilities 266,410,682 23,286,395 20,300,000 43,586,395 222,824,287 Others Banning Gale Relocation&Grading at Plant No.2 2,812,000 - - - 2,812,000 Capital Improvement Progrem Mgml.Services 300,000 9,591 37,800 47,391 252,609 Subtotal-Others 3,112,000 9,591 37,800 47,391 3.064,609 Additional Charges to CIP Completed at M0116 183,000 183,000 (183,000) Total Treatment and Disposal Projects 2,480,123,378 403.651,184 95,344,300 498,995,484 1,981,127,894 Capital Equipment Purchases 16,000,000 7,083,097 3,682,800 10,765,897 5,234,103 Total Collection,Treatment and Disposal Projects and Capital Equipment Purchases $3,361,719,682 $511,627,060 $144,666.300 $656,293,360 $2,705,426,322 Section 3-Page 9 FY 2016-17 Third Quarter Report This Page Intentionally Left Blank Section 3- Page 10 Capital Assets Schedule & Debt Service Budget Review Capital Assets Schedule For the Nine Months Ended March 31, 2017 Capital Facilities Budget Review Balance Year-to-Dats Balance 07/O1116 Additions 3M1117 CONSTRUCTION IN PROGRESS: Treatment Plant $ 405,065,130 $ 69,460,514 $ 474,525,644 Collection System 94,310,929 31,578,712 125,889,641 Subtotal 499,376,059 101,039,226 600,415,285 PROPERTY,PLANT&EQUIPMENT(at cost): Land and Property Rights 15,959,559 - 15,959,559 Collection Lines and Pump Stations 781,138,758 - 781,138,758 Treatment Facilities 2,278,136,004 - 2,278,136,004 Effluent disposal facilities 97,014,820 - 97,014,820 Solids disposal facilities 3,463,236 - 3,463,236 General and administrative facilities 229,446,444 - 229,446,444 Excess purchase price over book value on acquired assets 19,979,000 19,979,000 Subtotal 3,425,137,821 3,425,137,821 Total Property,Plant&Equipment&CIP $ 3,924,513,880 $ 101,039,226 $ 4,025,553,106 Debt Service Budget Review 2016-17 Year-to-Date Remaining Budget Payments %of Budget Budget Principal Payments by Debt Issue: 2007A COP 265,000 91,885,000 34673.58% (91,620,000) 2007E COP 7,110,000 7,110,000 100.00% - 2008B COP 8,815,000 8,815,000 100.00% - 2009A COP 4,250,000 4,250,000 100.00% - 2010ABABs - - 0.00% - 2010CBABs - - 0.00% - 2011ACOP 15,135,000 15,135,000 100.00% - 2012ACOP - - 0.00% - 2012BCOP - - 0.00% - 2014ACOP - - 0.00% - 2014B CANS 7,827,411 120,850,000 1543.93% (113,022,589) 2015A COP - - 0.00% - 2016ACOP - - 0.00% - 2016B CANs - - 0.00% - 2017A COP 0.00% Subtotal Principal Payments 43,402,411 248,045,000 571.50% (204,642,589) Interest Expense by Debt Issue: 2007A COP 4,108,278 2,396,478 58.33% 1,711,800 2007E COP 355,500 207,400 58.34% 148,100 2008E COP 132,225 22,025 16.66% 110,200 2009A COP 585,250 417,650 71.36% 167,600 2010A BABs 2,897,639 2,495,917 86.14% 401,722 2010C BABs 6,523,780 5,619,457 86.14% 904,323 2011ACOP 4,774,725 3,360,325 70.38% 1,414,400 2012A COP 3,735,900 2,802,000 75.00% 933,900 2012E COP 3,187,400 2,390,500 75.00% 796,900 2014A COP 4,254,500 3,190,900 75.00% 1,063,600 2014E CANS 496,694 1,624,711 327.11% (1,128,017) 2015A COP 6,375,500 4,781,600 75.00% 1,593,900 2016A COP 5,833,798 5,237,798 89.78% 596,000 2016E CANs - 1,201,349 N/A (1,201,349) 2017A COP 984,147 N/A (984,147) Subtotal Interest Expense 43,261,189 36,732,257 84,91% 6,524,528 Total Debt Service $ 86,663,600 $ 284,777,257 328.60% $ (198,118,061) Section 4- Page 1 2016-17 Third Quarter Report This Page Intentionally Left Blank Section 4 - Page 2 Self Insurance Budget Review General Liability and Property Fund Budget Review For the Nine Months Ended March 31,2017 Percent Actual of Budget Remaining Actual 2016-17 Through Through 2016-17 Through Increase Budget 3131117 3131117 Budget 3/31116 (Decrease) Revenues: In-Lieu Premiums $ 1,111,100 $ 833,328 75.00% $ 277,772 $ 371,997 $ 461,331 Miscellaneous Other Revenue - 8,865 N/A - 16,369 (7,504) Service Department Allocations 18,700 14,022 74.98% 4,678 4,122 9,900 Total Revenues 1,129,800 856,215 75.78% 282,450 392,488 463,727 Expenses: Benefits/Claims 40,000 671,865 1679.66% (631,865) 16,133 655,732 Legal Services 130,000 77,032 59.26% 52,968 105,453 (28,421) Professional Services 25,976 N/A (25,976) 25,976 Subtotal 170,000 774,873 455.81% (604,873) 121,586 653,287 Policy Premium Expense 1,220,000 878,290 71.99% 341,710 870,393 7,897 Total Expenses 1,390,000 1,653,163 118.93% (263,163) 991,979 661,184 Excess Revenue(Expense) (260,200) (796,948) $ 545,613 (599,491) (197,457) Beginning Reserves 55,260,200 55,252,299 56,125,511 (873,212) Ending Reserves $55A00,000 $54,455,351 $ 55,526.020 $(1,070,669) Section 5-Page 1 FY 2016-17 Third Quarter Report Workers' Compensation Fund Budget Review For the Nine Months Ended March 31,2017 Percent Actual of Budget Remaining Actual 2016-17 Through Through 2016-17 Through Increase Budget 3/31/17 3/31/17 Budget 3131116 (Decrease) Revenues: In-Lieu Premiums $ 1,196,300 $ 897,225 75.00% $ 299,075 $ 1,109,025 $ (211,800) Miscellaneous Other Revenue 10,000 - 0.00% 10,000 10,280 (10,280) Total Revenues 1,206,300 897,225 74.38% 309,075 1,119,305 (222,080) Expenses: Benefits/Claims 660,000 236,299 35.80% 423,701 506,851 (270,552) Legal Services 170,000 29,361 17.27% 140,639 151,028 (121,667) Professional Services 60,000 50,307 83.85% 9,693 46,403 3,904 Subtotal 890,000 315,967 35.50% 574,033 704,282 (388,315) Policy Premium Expense 200,000 148,421 74.21% 51,579 145,754 2,667 Total Expenses 1,090,000 464,388 42.60% 625,612 850,036 (385,648) Excess Revenue(Expense) 116,300 432,837 $ (316,5371 269,269 163,568 Beginning Reserves 1,883,700 1,913,178 1,523,264 389,914 Ending Reserves $ 2,000,000 _L 2.346015 $ 1.792,533 $ 553,482 Section 5-Page 2 'e? Op April 30, 2017 STAFF REPORT Quarterly Treasurer's Report For the Three Months Ended March 31, 2017 SUMMARY Section 15.0 of the District's Investment Policy includes quarterly reporting requirements for the District's two investment portfolios. These two funds, the "Liquid Operating Monies," and the "Long-Term Operating Monies" are managed by Chandler Asset Management, the District's external money manager. The ongoing monitoring of the District's investment program by staff and Callan Associates, the District's independent investment advisor, indicates that the District's investments are in compliance with the District's adopted Investment Policy and the California Government Code, and that overall performance has tracked with benchmark indices. In addition, sufficient liquidity and anticipated revenues are available for the District to meet budgeted expenditures for the next six months. The District's portfolios do not include any reverse repurchase agreements or derivative securities. ADDITIONAL INFORMATION Performance Reports The Quarterly Strategy Review, prepared by Chandler Asset Management, and the Investment Measurement Service Quarterly Review, prepared by Callan Associates, is attached for reference. Also attached are Long-Term and Liquid Operating Monies Summary of Performance Data and Portfolio Statistics charts that depict the performance results, estimated yield and duration, credit quality, and sector diversification of the District's portfolios, as of March 31, 2017. The Liquid Operating Monies portfolio, with an average maturity of 58 days, consists entirely of high quality fixed income investments consistent with the District's investment policy. Portfolio Performance Summary The following table presents a performance summary of the District's portfolios as compared to their benchmarks for the period January 1 through March 1, 2017. ODSD ♦ P.0.Box8127 ♦ Foun in Velley,C 9272M127 ♦ (714)%2-2411 Quarterly Treasurer's Report For the Three Months Ended March 31, 2017 Page 2 of 3 Portfolio Performance Summary Quarter Ended March 31,2017 Liquid Operating Monies(h) Long-Term Operating Monies(%) Total Rate of Total Rate of Realm Eanchmark(u Return Benchmadc"' 3 Months 0.14 0.10 0.52 0.47 6 Months 0.27 0.19 -0.33 -0.59 9 Months 0.37 0.28 -0.27 -0.65 12 Months 0.46 0.36 0.45 0.21 Annualized Since inception 30 Nov M14 0.37 0.21 1.12 1.08 Market Value 85.2M $318.21A Average Quality 'AAA"fAee" "AA"/"Aa1" Current Yield(%) 1.0 1.7 Estimated Yield to Maturity(%) 0.7 1.6 Quarterly Deposits Wilhdmwals 28.010 0.0M Estimated!Annual Income O.BM .2M (1) Benchmarks: • Liquid Operating Portfolio: 3-Month Treasury Bill Index • Long-Tenn Operating Portfolio: Merrill Lynch Corp/Govt. 1-5 Year Bond Index Portfolio Market Values Comparative marked-to-market quarter-end portfolio values are shown in the following table, and in the attached bar chart. Liquid Long-Term Quarter Operating Operating Ending Monies($M) Monies($M) 30 Jun.16 139.4 332.7 30 Sep.16 58.0 325.9 31 Dec.16 113.0 316.6 31 Mar.17 85.2 318.2 District's Investment Account Balances as of March 31,2017 Book Balances Estimated Investment Accounts March 31,2017 Yield(%) State of Calif.LAIF $15,172,201 0.82 Union Bank Checking Account 62,076 0.00 Union Bank Overnight Sweep Account 510,000 0.01 Union Bank W/C Checking 79,415 0.00 Chandler-Short-term Portfolio 84,963,348 0.73 Chandler-Long-term Portfolio 317,383,956 1.55 Petty Cash 3,000 N/A BNY Mellon OCIP Reserve 3.611.270 0.87 TOTAL $421]8.5 2RR 1.35 Debt Service Reserves w/Trustees 5 04Z 43 0.38 Quarterly Treasurer's Report For the Three Months Ended March 31, 2017 Page 3 of 3 District's Cost of Funds on Debt Issues as of March 31,2017 Annual Cost of Funds Outstanding Interest Issue Description COP Balance Rate(%) 2009A Fixed $9,155,000 4.72 2010A Fixed 80,000,000 3.68 2010C Fixed 157,000,000 4.11 2011A Fixed 96,330,000 2.61 2012A Fixed 100,645,000 3.54 2012B Fixed 66,395,000 1.50 2014A Fixed 85,090,000 2.34 2015A Fixed 127,510,000 3.30 2016A Fixed 145,880,000 3.02 2016B Fixed 109,875,000 0.87 2017A Fixed 66.370.000 2.55 TOTAL $1.044.250.000 Weighted Avg.Cost of Foods 2.89 ATTACHMENTS 1. Chandler Quarterly Report 2. Summary of Performance Data and Portfolio Statistics — Liquid Operating Monies 3. Summary of Performance Data and Portfolio Statistics— L-T Operating Monies 4. Investment Transactions and Balances in LAIF 5. Asset Summary by Asset Type — Liquid Operating Portfolio 6. Asset Summary by Asset Type— Long Term Portfolio 7. Asset Summary by Asset Type — Owner Controlled Insurance Program Escrow Account 8. Investment Listing (Yield Analysis Report) 9. Asset Detail — Consolidated 10. Custody Transaction History—Consolidated 11. Callan Quarterly Review 12. Chandler Quarterly Review 13. Rating Agency Comparisons C/" CHANDLER ASSET MANAGEMENT March 31, 2017 Mr. Mike White, CPA Controller Orange County Sanitation District 10844 Ellis Avenue Fountain Valley CA 92708-7018 Dear Mike, Bond Market Recap The Federal Open Market Committee (FOMC) left the target federal funds rate unchanged at the first meeting of this year but raised the target federal funds rate in March by 25 basis points to a range of 0.75%-1.00%. The March rate hike was the FOMC's third rate hike since the 2008 financial crisis when the fed funds target rate reached a historical low range of 0.00%-0.25% (the other two 25 basis point rate hikes were in December 2015 and December 2016). There was one dissenting vote at the March meeting from Minneapolis Fed President Neel Kashkari who preferred no rate hike. The Fed noted that economic activity has expanded at a moderate pace, labor market gains remain solid, and inflation is moving close to the Fed's 2.0% target. The Fed is still projecting a 1.4%fed funds rate by the end of this year, which implies two more 25 basis point hikes. The FOMC's long-run fed funds rate projection was also unchanged at 3.0%. The FOMC did not make any decisions about their balance sheet reinvestment plans at the March meeting and will continue that discussion during future meetings. The minutes from the March FOMC meeting indicate that the Fed is contemplating a change to their balance sheet reinvestment program sometime later this year. At least one FOMC member has suggested that the process of reducing the size of the Fed's balance sheet could take around 5 years. It is likely that the Fed would move more slowly with rate hikes once they begin changing their reinvestment program. Market participants estimate the economy grew at an annualized pace of about 1.8% in the first quarter, following growth of 2.1% in the fourth quarter. Labor market trends continued to improve in the first quarter, and the economy is now likely at or near full employment. The unemployment rate declined to 4.5% in March, down from 4.7% in December. Wage growth increased during the first quarter, and payrolls increased by an average of 178,000 per month (more than enough to absorb new entrants into the labor market). Consumer confidence remained strong during the first quarter and housing trends remained favorable. Furthermore, manufacturing indicators improved during the first quarter. Inflation indices increased during the first quarter. This was driven in part by the year-over-year increase in energy prices. Recall that crude oil prices bottomed in February 2016 around $26/barrel, but hovered around $50/barrel during the first quarter of this year. The Personal Consumption Expenditures (PCE) index was up 2.1% year-over-year in February and Core PCE (excluding food and energy)was up 1.8% C/" CHANDLER ASSET MANAGEMENT year-over-year in February. Overall, core inflation seems to be approaching the Fed's 2.0% target. During the first quarter, the yield curve flattened, following a dramatic post-election curve steepener. In the past three months, the 2-year Treasury yield is up about 7 basis points and the 10-year Treasury yield is down about 6 basis points. Notably, shorter-term yields (1-year and under) increased more than 20 basis points during that time period. On a year-over-year basis the 2-year Treasury yield has increased 53 basis points and 10-year Treasury yield is up about 62 basis points. At the end of 2016, following the US Presidential election, US Treasury yields increased meaningfully driven by heightened expectations for fiscal stimulus and growth under the Trump administration and Republican-controlled Congress. Some of the post-election exuberance regarding fiscal spending, tax reform, and healthcare reform has started to wane, as market participants begin to sense the timeline and magnitude of such policies may be delayed or potentially less robust than previously hoped. Corporate credit spreads, or the additional compensation investors receive for purchasing non- US treasury securities, tightened during the first quarter, based on the Bank of America Merrill Lynch US Corporate Index. Consumer Prices The Consumer Price Index (CPI) was up 2.7% year-over-year in February, versus up 2.5% year-over-year in January. Core CPI (CPI less food and energy)was up 2.2% year-over-year in February, versus up 2.3% year-over-year in January. The Personal Consumption Expenditures (PCE) index was up 2.1% year-over-year in February, versus up 1.9% year-over-year in January. Core PCE (excluding food and energy) was up 1.8% year-over-year in February, versus up 1.7% year-over-year in January. CPI is already trending above 2.0%, and the Fed's primary inflation gauge (PCE) is approaching the Fed's 2.0% target. Retail Sales On a year-over-year basis, total retail sales were up 5.7% in February compared with a 6.0% increase in January. On a month-over-month basis, retail sales were up 0.1% in February, following a 0.6% increase in January. Excluding autos and gas, retail sales increased 0.2% in February, following a 1.2% gain in January. On average, retail sales trends were solid in the first two months of the year. 2 GAL CHANDLER ASSET MANAGEMENT Labor Market Nonfarm payrolls were significantly lower than expected in March, up 98,000 versus the consensus forecast of 175,000. January and February payrolls were revised down by 38,000. On a trailing 3-month and 6-month basis, payrolls increased by an average of 178,000 and 163,000 per month, respectively. The unemployment rate fell to 4.5% in March from 4.7% in February. The participation rate was unchanged at 63.0%. A broader measure of unemployment called the U-6, which includes those who are marginally attached to the labor force and employed part time for economic reasons, decreased to 8.9% in March from 9.2% in February. Wage growth rose 0.2% in March, versus expectations for a 0.3% increase. This follows an upwardly revised gain of 0.3% in February (previously 0.2%). On a year-over-year basis, wages were up 2.7% in March, vs. 2.8% in February. Housing Starts Total housing starts rose 3.0% in February, following a 1.9% decrease in January. Single-family starts rose 6.5% in February, but multi-family starts declined 3.7%. On a year-over-year basis, total housing starts were up 6.2% in February. 3 CHANDLER ASSET MANAGEMENT TREASURYYIELDS 3/3112017 12131/2016 CHANGE 3 Month 0.75 0.50 0.25 2 Year 1.26 1.19 0.07 3 Year 1.49 1.45 0.04 S Year 1.92 1.93 (0.01) 7 Year 2.21 2.25 (0.04) 10 Year 2.39 2.45 (0.06) 30 Year 3.01 3.07 (0.06) Economic Data Points to Continued Slow Growth ECONOMIC INDICATOR Current Release Prior Release One Year Ago Trade Balance (43.6)$Bln FEB 17 (48.2)$Bln JAN 17 (45.6)SBIn FEB 16 GDP 2.1%DEC 16 3.5%SEP 16 0.9%DEC 15 Unemployment Rate 4.5%MAR 17 4.7%FEB 17 5.0%MAR 16 Prime Rate 4.00%MAR 17 3.75%FEB 17 3.5%MAR 16 CRB Index 185.88 MAR 17 190.62 FEB 17 170.52 MAR 16 Oil(West Texas Int.) $50.60 MAR 17 $54.01 FEB 17 $38.34 MAR 16 Consumer Price Index(y/o/y) 2.7%FEB 17 2.5%JAN 17 1.0%FEB 16 Producer Price Index(y/o/y) 3.7%FEB 17 3.0%JAN 17 (2.0%)FEB 16 Dollar/Euro 1.07 MAR 17 1.06 FEB 17 1.14 MAR 16 Swrce.B)oomberg 4 C/" CHANDLER ASSET MANAGEMENT Performance Attribution Long-Term Portfolio The long-term portfolio generated both a positive absolute and relative return during the quarter. The quarterly return for the District's portfolio was 0.52% versus 0.47% for the Bank of America Merrill Lynch 1-5 Year AAA-A US Corporate and Government Index. Several factors contributed to the modest outperformance during the quarter, both from the sector positioning and the maturity distribution standpoint. On the sector side, the overweight to the Supranational and Agency sectors, relative to the benchmark, were additive to results. The maturity distribution of the portfolio, with overweight exposure in the short and longer ends of the spectrum, also contributed to the positive performance differentiation relative to the benchmark. The Chandler team added to exposure across the majority of the investable universe during the quarter. The Treasury, Agency, Supranational and Corporate additions to the portfolio were all close to the five year maturity point, offset by short maturity exposure in Asset Backed securities and Commercial Paper. Overall the portfolio has been avoiding maturities close to the two year point; in Chandler's judgement the pricing in the maturity segment is unattractive. The duration of the portfolio contracted moderately, currently 2.43 versus 2.48 at the end of the prior quarter. The team will be tactically extending the duration of the portfolio in the coming quarter as the Right to quality pricing in the Treasury market, pushing down yields, dissipates. Liquid Portfolio Similar to the long-term portfolio, the liquidity portfolio generated a positive absolute and relative return during the quarter. The District's liquidity portfolio returned 0.14% for the quarter, compared to the 0.10% returned of the Bank of America Merrill Lynch Three Month Treasury Bill Index. The portfolio experienced a $28 million outflow during the quarter. Many securities were purchased across the Treasury, Agency, Commercial Paper, and Corporate sectors of the market to offset upcoming liquidity needs first and secondarily to enhance to overall return potential of the portfolio via attractively valued longer maturity securities. 5 OIL CHANDLER ASSET MANAGEMENT Economic Outlook Risk markets have performed well since the US election, predicated partially on the belief by investor's tax reform will take place late in 2017 and fiscal stimulus in 2018. As the realities of the visceral political environment set-in for the new Presidential Administration, it is likely expectations of tax reform and fiscal spending will be moderated, potential leading to a pull-back in risk asset performance. The Treasury curve flattening experienced during Q1 seems to reflect the above reality, whereas the equity markets maintain a much more sanguine view specific to tax policy and fiscal spending. The Federal Reserve remains intent on continuing the process of 'normalizing' monetary policy and moving further away from the zero interest rate policy of the past several years. The Chandler team holds the view the Fed's forecast for interest rates is too optimistic, as the still very aggressive monetary policies being implemented abroad by both the European Central Bank and the Bank of Japan will put a ceiling on how high US rates can go before the corresponding increase in the dollar derails the domestic economic recovery. The Federal Reserve will be able to raise the Federal Funds rate, but not too the level consistent with the March 2017 Summary of Economic Projections. The Chandler team expects interest rates in general to drift higher over the coming months and will be looking to add spread product, predominately in the Corporate and Asset Backed sectors, to enhance the total return opportunity of the portfolio. Strategy Strategy highlights for the Long-Term Portfolio in coming months: • Continue to optimize the term structure of the portfolio via underweighting the one to three year maturity points and overweighting the shorter and longer maturity segments of the maturity distribution. o Keep the duration mismatch relative to the benchmark relatively tight. o Extend the overall duration of the portfolio when five year Treasury notes have a yield in excess of 2.00%. • Opportunistically increase the Corporate allocation of the portfolio, predominately in longer maturity securities, and add some CDs and other short-term credit instruments that offer attractive relative value. o Focus will be on sector diversification and relative value when adding longer maturity Corporate notes. o De-emphasize the Agency sector until spreads become more attractive. • Remain active in the new issue Asset Backed sector and keep a dedicated exposure between 7-10% of the total portfolio. 6 OIL CHANDLER ASSET MANAGEMENT Strategy highlights for the Liquidity Portfolio in coming months: • Continue to ladder the Agency discount note and Treasury exposure to correspond to upcoming liquidity needs. • Periodically add to the Corporate exposure of the portfolio with maturities between six months to one year, where the additional spread compensation versus the Treasury curve is compelling. • Maintain a dedicated exposure to the Treasury sector on an ongoing basis to ensure ample liquidity in the portfolio at all times. 7 C/" CHANDLER ASSET MANAGEMENT Compliance Issues Orange County Sanitation District Long Term OW March 31,2017 COMPLIANCE WITH INVESTMENT POLICY Assets managed by ChandlerAwethlanagementare in Tull compliance Win State missend say,the invesmnen(policy Caag., Standard Comment Treasury Issues 5ysammaximummaWdy Complies' Slpmretioml "AA"or better by 10 3 Ni 30%maximum; 5%max issuer, 5ram mal Complies Includes only, ADS,BRD and IFC per CGC U.S.Agenda. 20%max issuer; 5 ram maximum maturity Compiles U.S.Conomte(MI'll "A"or batter br,term rating by l of3 NRSRCa; 30%meximor,5%max issuer; 5 Were Complies max msMd Municipal Securities "A"or higher by l of3 NRSROS;10%madmorn; 5%maxissueq 5 ram maximum Compiles maNri Asset Backed/CMWillortgage- "AA"or better by l of 3 NRSROs 'A"or higher issuer tadng by 1 of3 NRSRCa; 20% Complies' backed nomeno. 5%maxAsian(excluding MBS/ odA agarl 5 ram max maWd Negolable Was "A"or better on its king tmlm debt by l of3 NRSR(ys; "AlMl"or Nghestalort term Complies ratings by 1 of 3 NRSROs; 30%maximum;5%max issuer; 5 years max mal CDSITDS 5%maxlaser, 5yearsmaxmatuly Compiles Barkers Acceptances A-1, requyident highest short son rating by l of 3 NRSROS; AO%maximxn; 5%men Compiles issuer 1N days max maturity Commercial Paper A-1,orequyak:nby1of3NRSR0S; 'A"orbetler by t of3 NRSROs,if keg teml debt Compiles isewd; 25%maximum; 5%maxissuer, 270da maxmaturi Mutual Fuld&MoreyMarket Highestratingby2NRSROs; 20%maximum;10%maxpermulualMM; 20%maxper Complies Mutual Fund rwre marketmutualNM Repurcleas Agpromme 102%w1tetemimtion Complies Raeeree Repurchase,A reements 5%rnaximun.90 days max maturity Complies IAIF Not used by investment adviser Complies Ayg Duarob NottoexceedaOmooffe, - 0%b120%of the beraMnark) Compiles Meximvn MaWdy 5ysetemeumvnmaWny Complies' 'The pM1hmb has WxMyder did)xerxi le vdlB malWllm gratErtMn 5 YQ891nnluEhg me(t)ABS,flt¢(5)Wits,9mandeen oln MBa and am(1)ananun, All eecuMimx mhe Wfom IMG msmanoraMwmplMMtime&Gumhase. 8 C/" CHANDLER ASSET MANAGEMENT Orange County Sanitation District Liquid OL March 31,2017 COMPLIANCE WITH INVESTMENT POLICY Assets managed by CbendlerAsset Management are in Tull compliance wth State lawand WM Me in,extmempolicy Category Standard Comment Treaserylsaues 1 War maximum mawriry. Minimum allocation of 10% Complies Suprersdonal 'AA'or befter by l of 3 NRSROs; 30%maximum; 5%max issuer, 1War Complies madetf, hdudes oH . ADS,BRD and lFC per CGC U.S.Agimles 20%max issuer; lyear mimmum mi Complies U.S.Corporate(MTNs) 'A'or hefted long term rating by l of 3 NRSRGs 30%maximum;5%max issuer, Complies 1 war newmatunty Meet Backed/CMGs 'AA'or bell by l of 3 NRSROs; 'N'or higher issuer pri by l of 3 NRSRCs; Complies 20%mavmum 5%max issuer 1 Warmax made Negotiable CDs 'A'or heft¢r on its long term debtby l of3 NRSRCs; 'A1IP1'or Nghestshon Complies term ratings by 1 of 3 NRSRO, 30%maxmun;5%mexissuer,l year max matunly CDSi 5%maxissuer,1 War maxme inry Complies Bankei's Acceptances A-1,orequiWientshod term ri by l of3 NRSROS;40%maximum:5%max Complies Issuer 180 days max meanly Commercial Paper A-1,orequiWient by 1 of 3 NRSROS;"A"orbefter by 1 of 3 NRSROs,if bng Complies term debt issued; 25%maxmum;5%max issuer'270 days max maturity Mulual Fad B Money Market MuGel Fad Highest mdrg by 2 NFri 20%mavmum;10%max per mi MrM; 20% Complies max ermore maiketmidslMM Repurchase AgreemeHs 102%ca11atensixab n Complies Pei Repi Agreements 5%maximum,90 days mi Complies LAF Not used byimeaMant admser Complies Prohibited Municipal Securities Complies Prohibited Mortgage Secundes Complies Aug DUredOn Nottoexceed180days; Maxdurodonofl"ar Complies Maximum Mai 11War maximum grei Complies 9 C/" CHANDLER ASSET MANAGEMENT CA OCSD Lehman Exposure March 31,2017 COMPLIANCE WITH INVESTMENT POLICY Assets managed by Chandler Asset Managementam in Poll compliance wM State lawand wth the mvestmentpolmy Category Standard Comment Treasury hsues 5yearsmadmummannrity Complies Suprenatiorel "AA"or better by 1 of 3 NRSR0s; 30%maximum; 5%real 5years maturity, Includes Complies ell AIDE,IBIRD,and FC par CGC U.S.Agencies 20%max issuer, 5 years maximum maturity Complies U.S.Corporate(Ml "Al or better long term mtiig by l of 3 NRSROs; 30%maximum;5%max issuer 5 Complies' ars max maturi Municipal Securities "Al or higher by l of3 NRSROS;10%maximum; 5%max issuer, 5 tears maximum Complies marthinty Asset Backed/Cyl "AA"or better by l of 3 NRS *A"or nigher issuer rating by l of 3 NRSROs; 20% Complies Mortgage-backed maximum; 5%max issuer(excluding MBS/goN agerl 5 years max mal Negotiable CDs "A"or better an its long term debt by l of 3 NRSR0s; "A11P1"or Nghest shortterm Complies ratings by 1of 3 NRSR0s730%max mums 5%max Issuers ars max mandrity CDaITDS 5%max issuer; 5 years max maturity Complies Banker's Acceptances A-1,or equivalent highest short term rating by l of 3 NRSROS; 40%maximum; 5% Complies max issuer;180 days max maturity Commercial Paper A-1,or equiyal lbyl of3 Ni A"or better by l of 3 NRSROs,iflong term debt Complies issued; 25%mavmum; 5%max issuer, 270 days max maturity It"I Fund!&Money Market Highest ral by2 NRSROs; 20%maximum;l0%maxpermutualfund; 20%dexper Complies lit" Furl stone marketmtaualftnd Repurchase A reements 102%crollaterelim0on Complies Reverse Repurchase 5%maximum,90 days max maturity Complies reemeras LAF Not wed b imeslawn"dNser complies rtieDuren NOtwexceed50 to oxh-she— 80% 120%ofthebenctmark Com lies Maxim in Matinry 5 years maximum maturity Complies 'Account-.1d.$2 million lace slue(cusi0535E6WV6)ard$600,000 Face.1.(cuaip 525Ea01 W)dnicufted LeM1man Bea I ldil that were pichai by IM preJouc menagar. comgiedidfinedpurchhh, 10 C/" CHANDLER ASSET MANAGEMENT Defaulted Bonds CAIIAOCOD....INmanEx916me Holdings Report cwuN p1028< A6 d3 1/17 m ssoNsMCR SLHOPNiM Nc/yen Pofllon .19 3 ll % m9E o n 000% 842 64 Dm% D➢0 pp21 mJ NP 00D Dw 3Ii1401] pep!6p MR Omm mRP..T1 535E WIBi m e W66m06 m% 34358]1 SD ABV% NR/NP 0.eVM1 0 17 313 11) N. Of0 12113 1v elalletl ].�i0mm 13 Ba00 mn00 1136391➢6 % ➢0 ]% NR/NP 12. Dm 10/L/3009 000% itiE�3910E DW% 000 D�313ss1% Nfl OW 21. S CopoAe 3pI�6IIII 1po,6Y191 1m ""%I- N iKPORIFOW 3¢V�6Nlxe 1�NB�4R.Il1 eI g1611]t.IWMR30.Y YNII1 R....ff. Tl] IT OIL CHANDLER ASSET MANAGEMENT Ratings Orange County Sanitation District Long Tetm Mamh 31,201] vs. Decern er 31,2016 M mmr mme W M A A M Y31117 103% 01% 10.9% 3A% BA% 1.111. 166% fi50% 103% 3.1% 4.0% Bry W Rrap Orange County Sanitation District Liquid March 31,2013 vs. December 31,2016 sa. ve— mug JM M A J R ]hurl .9% 157% u% 0.0% 0U% 193ms 70.1% m]% 31% 00% 00% v—v s aq. 12 C/" CHANDLER ASSET MANAGEMENT OCSD Investment Program Quarter End Portfolio Value $600,000.000 Liquid Operaling Monies $500,000,000 •Long-Term Opereting Monies $400,000,000 $300,000,000 $200,000.000 $100,000,000 �'� 4'� �.g �G��9 '0q.'Q �'9 y9.s �L7�s re4.�s ��S yV^.�S ✓4�J.�9 �Q�T ��B y�:�) HISTORICAL YIELD CURVE 4.00% MAR 2017 -: FEB 201] 3.00% - MAR 2016 _____________________________________________________ 3.01% 2.39% 2.00% ___________________ ____2?1qS__ ______ ____________________________ 1.92% 0.90% 1A9% 0.76% �f_/ 0.00% o h h 13 C/" Orange County Sanitation District Liquid Portfolio Summary Account#10282 As of 3/31/2017 PORTFOLIO CHARACTERISTICS ACCOUNTSUMMARY •• 01111110 Beg.Values End Values Issuer %Portfolio Average Duration 0.16 as of 2/28/17 as of 3131/17 Government of United States 46.9% Average Coupon 1.01 % Market Value 85.024,770 85,024,655 Federal Home Loan Bank 18.8 Average Purchase YTM 0.69% Accrued Interest 117,500 152,507 Federal National Mortgage Assoc 10.1 % Averse Market YTM 0.73% Total Market Value 85,142,270 85,177,162 9 Dreyfus Treasury Money Market F 4.4 Average S&P/Moody Rating AAA/Aaa Income Earned 45,303 42,549 Federal Home Loan Mortgage Corp 2.4% Average Final Maturity 0.16 yrs Cont/WD 0 Bank of Tokyo-MR UFJ 2.0 Average Life 0.06 ym Par 85,015,581 85,010,584 Intl Bank Recon and Development 1.4% Book Value 85,024,739 85,032,281 Toronto Dominion Holdings 1.4 Cost Value 85,042,875 85.021,444 87.3% • - - • • MATURITY DISTRIBUTION u5 BOW° 743% AAA us Treasury (79.9%) Corporate (459%) (10.4%) 60%, Negotiable Co Commercial (14%) 40% Paper (3.2%) supomational 209% (2 5%) 20% Money 0% lk A Market (4A%) Fund Agency % FI (31.2%) 0- 25 25- 5 51 1-15 152 2.25 as-3 31 (4.4%) Maturity(Y.) (15.7%) Total Rate of Return Current Latest Year Annualized Since As of 3/31/2017 Month 3 Months To Date 1 Yr 3 Yrs 5Yra 10 Yrs 11/30/2014 11/30/2014 Orange County Sanitation District Liquid 0.04% 0.14% 0.14% 0.46% N/A N/A N/A 0.37% 0.86% BAML 3-Month US Treasury Bill Index 0.02% 0.10% 0.10% 0.36% N/A N/A N/A 0.21 % 0.48% Chandler Ansel Management-CONFIDENTIAL Page 1 Execution Time:N02017 8:58:02 PM C/" Orange County Sanitation District Long Term Portfolio Summary Account#10268 As of 3/31/2017 PORTFOLIO CHARACTERISTICS ACCOUNTSUMMARY •• Millis Beg.Values End Values Issuer %Portfolio Average Duration 2.43 as of 2/28/17 as of 3131/17 Government of United States 29.7 Average Coupon 1.70% Market Value 316,830,995 317,222,451 Federal National Mortgage Assoc 10.1 % Average Purchase YTM 1.62% Accrued Interest 1,191,796 1,000,829 Federal Home Loan Bank 8.0 Averse Market YTM 1.55% Total Market Value 318,022,791 318,223,280 9 Federal Home Loan Mortgage Corp 7.7 Average S&P/Moody Rating AA/Aal Income Earned 415,268 428,540 Inter-American Dev Bank 3.6 Average Final Maturity 2.80 yrs COntAVD 612 John Deere ASS 2.6% Average Life 2.51 yrs Par 316,038,433 316,751,389 Intemational Finance Corp 2.3 Book Value 315,966,322 316,645,629 Bank of Tokyo-Mit UFJ 2.0% I Cost Value 317.286,963 317.994,586 68 1 Y • - • • MATURITY DISTRIBUTION Mortgage 25% 2I.e% AA Pass OS us Treasury corporate (297%) 2096 19.5°/ Commercial 15'1 Paper 15% 129% 13.4% Municipal Supranational I fonds (75%) lots .1% BBB Money - (3.4%) Market 5% 3.5% 4.3% NR CMO (0-9%) Agency (6.8%) (24.6%) % ABS o-15 ss-s 5-1 1-3 2-3 s-a 4-5 s. AAA A (74%) Maturity yrs) (133%) �(1o.9%) is - Total Rate of Return Current Latest Year Annualized Since As of 3/31/2017 Month 3 Months To Date 1 Yr 3 Yrs 5 Yrs 10 Yrs 11/30/2014 11/30/2014 Orange County Sanitation District Long Tenn 0.06% 0.52% 0.52% 0.45% N/A N/A N/A 1.12% 2.64% BAML 1-5 Yr US Corporate/Govt Rated AAA-A Index 0.06% 0.47% 0.47% 0.21 % N/A N/A N/A 1.08% 2.54% BAML US 15 Yr US Corp/Gout Rated AAA-BBB Index 0.07% 0.56% 0.56% 0.56% N/A N/A N/A 1.22% 2.87% Chandler Asset Menagement-CONFIDENTIAL Page 1 Execution Time:N32017 8:55:25 PM Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund March 31, 2017 Par Value Book Value Market Value Rate Yield Balance March 1, 2017 $19,672,201 $19,672,201 $19,672,201 0.82 0.82 Deposits: 3/9/2017 15,800,000.00 15,800,000.00 15,800,000.00 0.82 0.82 Total Deposits 15,800,000.00 15,800,000.00 15,800,000.00 0.82 0.82 Quarterly Interest Distribution 0.82 0.82 Withdrawals: 3/1/2017 (2,400,000) (2,400,000) (2,400,000) 0.82 0.82 3/2/2017 (2,100,000) (2,100,000) (2,100,000) 0.82 0.82 3/15/2017 (1,800,000) (1,800,000) (1,800,000) 0.82 0.82 311 612 01 7 (2,500,000) (2,500,000) (2,500,000) 0.82 0.82 3/2 312 01 7 (7,000,000) (7,000,000) (7,000,000) 0.82 0.82 3/29/2017 (2,800,000) (2,800,000) (2,800,000) 0.82 0.82 3/30/2017 (1,700,000) (1,700,000) (1,700,000) 0.82 0.82 Total Withdrawals (20,300,000) (20,300,000) (20,300,000) 0.82 0.82 Balance March 31,2017 $15,172,201 $15,172,201 $15,172,201 0.82 0.82 Report ID: GL8251 Asset Summary Beat Cunene,: UBD i BNY MELLON by Asset Type with Sectors Alternate ease Current,: Exchange Rate; OCS LTQ OF CHANDLER-OCSF07511102 $ 31 2G 1.7 Status: PRELIMINARY Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base CASH&CASH EQUIVALENTS U.B.DOLLAR CERTIFICATES OF DEPOSIT-U.S. 1,150,000.000 1,149,964.14 1,149,964.14 1.35% 0.00 COMMERCIAL PAPER-DISCOUNT 2,705,000.000 2,694,871.33 2,694,871.33 3.16% 0.00 FEDERAL HOME LOAN BANK- 1 YR OR LESS 16,000,000.000 15,976,599.18 15,976,599.18 18.76% 0.00 FNMA ISSUES- t YR OR LESS 4,000,000.000 3,993,990.50 3,993,990.50 4,69% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 3,753,584.000 3,753,584.00 3,753,584.00 4.41% 0.00 U.S.TREASURY BILLS- 1 YR OR LESS 40,000,000.000 39,926,413.75 39,926,413.75 46.87% 0.00 INTEREST 217,086.17 217,086.17 0.25% 0.00 U.S.DOLLAR 67,608,584.000 67,712,509.07 67,712,509.07 79.49% 0.00 CASH&CASH EQUIVALENTS 67,608,584.000 67,712,509.07 67,712,509.07 79.49% O.00 FIXED INCOME SECURITIES U.S.DOLLAR BANKING&FINANCE 3,740,000.000 3,751,038.75 3,741,126.60 4.39% -9,912.15 CAPITAL GOODS 1,000,000.000 1,033,650.00 1,025,330.00 1.20% -8,320.00 INSURANCE 1,000,000.000 1,001,760.00 1,000,210.00 1.17% -1,550.00 OIL&GAS 1,000,000.000 1,000,780.00 1,000,340.00 1.17% -440.00 SUPRANATIONAL ISSUES 2,162,000.000 2,164,147.42 2,161,763.80 2.54% -2,383.62 TECHNOLOGY 2,000,000.000 2,002,460.00 1,999,790.00 2.35% -2,670.00 US AGENCIES 6,500,000.000 6,572,185.00 6,539,365.00 7.68% -32,820.00 U.S. DOLLAR 17,402,000.000 17,526,021.17 17,467,925.40 20.51% .58,095.77 FIXED INCOME SECURITIES 17,402,000.000 17,526,021.17 17,467,925.40 20.51% -58,095.77 TOTAL ASSETS-BASE: 85,010,584.000 85,238,530.24 85,180,434.47 300.00% -58,095.77 41612017 8:17.-53PM EDT 1 Workbench Asset Summary Repeft ID: GL8251 Base Curtenry: Can BNY MELLON by Asset Type with Sectors Alteesa[e Base Currency: Exchange Rate: OCS LONG CHANDLER-0CSF07S22202 3 31 201.7 Status: PRELIMINARY Net Unrealized Cost Market Value % of Gain/Loss Description shares Per Base Base Total Base CASH&CASH EQUIVALENTS U.S.DOLLAR CASH EQUIVALENTS 60,641.490 93,294.59 25,621.03 0.01% -67,673.56 COMMERCIAL PAPER-DISCOUNT 12,645,000.000 12,571,626.30 12,571,626.30 3.95% 0.00 SHORT TERM INVESTMENT FUNDS(US REGULATED) 2,783,IW780 2,783,196.78 2,783,196.78 0.87% 0.00 PENDMG TRADES 23.99 23.99 0.00% 0.00 INTEREST 1,034,310.62 1,034,310.62 0.32% 0.00 U.S.DOLLAR 15,488,838.270 16,482,452.28 16,414,77S.72 5.16% -67,673.56 CASH&CASH EQUIVALENTS 15,488,838.270 16,482,452.28 16,414,778.72 5.16% .67,673.56 FL4ED INCOME SECURITIES U.S.DOLLAR ADS-CAR LOANS 11,006,490.660 11,005,658.06 10,998,270.27 3.45% -7,387.79 Ass-CREDIT CARDS 4,140,000.000 4,139,643.13 4,136,605.20 1.30% -3,037.93 ASS-EQUIPMENT 8,252,709.850 8,252,817.78 8,243,993.15 2.59% -8,824.63 ABS-HOMEEQUNY 133,743.290 100,432.85 126,237.62 0.04% 25,804.77 ABS-SMALL BUSINESS ADMINISTRATION 62,182.380 62,182.38 65,821.91 0.02% 3,639.53 ABS-STUDENT LOANS 34,564.350 34,424.12 35,254.60 0.01% 830.48 BANXWG&FINANCE 41,870,000.000 42,751,475.06 40,286,944.60 12.65% -2,464,530.46 CAPITAL GOODS 5,000,000.000 5,014,950.00 5,054,000.00 1.59% 39,050.00 FHLMC MULTICLASS 1,893,286.310 2,070,845.71 2,098,655.75 0.66% 27,810.04 FHLMC POOLS 2,3&1.340 2,282.94 2,433.33 0.00% 150.39 FNMA POOLS 1,509,732.160 1,575,415.69 1,625,755.96 0.51% 50,340.27 FNMA REMIC 316,679.570 316,561.36 321,021.85 0.10% 4,460.49 GNMA MULTI FAMILY POOLS 230,335.150 230,403.22 238,561.47 0,07% 8,158.25 GNMA REMIC 28,937.040 28,937.04 29,073.91 0.01% 136.87 HEALTH CARE 4,000,000.000 4,009,675.00 4,027,920.00 1.26% 18,245.00 OIL&GAS 9,500,000.000 9,476,387.40 9,479,875.00 2.98% 3,487.60 SUPRANATIONAL ISSUES 24,000,000.000 24,059,735.00 23,889,895.00 7.50% -169,840.00 TAXABLE MUNICIPALS 4,240,000.000 4,307,633.89 4,600,846.00 1.44% 293,212A1 TECHNOLOGY 14,045,000.000 14,095,700.55 13,991,659.35 4.39% -104,041.20 U.S.TIPS 10,634,208.000 10,516,923.89 10,534,990.84 3,31% 18,066.95 US AGENCIES 78,365,000.000 78,147,661.40 77,989,501.85 24.49% -158,159.55 41612017 8:18:34PM EDT 1 Workbench Asset Summary Repeft ID: GL825I Base Currenry: USD BNY MELLON by Asset Type with Sectors Alteesa[e Base Currency: Exchange Rate: OCS LONG CNANDLBR-OCSF07522202 3 31 2017 Status: PRELIMINARY Net Unrealized Cost Market Value % of Gain/Loss Description Shares Par Base Base Total Base US GOVERNMENTS 84,300,000.000 83,638,633.57 83,868,150.00 26.34% 229,516.43 WHOLE LOAN-CMO-COLLATERALIZED MTG OBLIG 357,959.001 357,946.27 358,019.85 0.11% 73.58 U.S. DOLLAR 303,923,192.101 304,196,326.31 302,003,487.51 94.84% -2,192,838.80 FIRED INCOME SECURITIES 303,923,192.101 304,196,326.31 302,003,487.51 94.84% -2,192,838.80 TOTAL ASSETS-BASE: 319,412,030.371 320,678,778.59 318,418,266.23 100.00% .2,260,512.36 41612017 8:18:34PM EDT 2 Workbench Asset Summary RePnrt ID: GL8251 Base Cunenry: Van BNY MELLON by Asset Type with Sectors Alteenate Ease Cwrene : Exchange Rate: ESCROW ACCOUNT-OCS"7555502 $ 31 2017 Status: PRELIMINARY Net Unrealized Cost Market Value % of Gain/Loss Description shares Par Base Base Total Base CASH&CASH EQUWALENTS U.B.DOLLAR INTEREST 14,486.64 14,486.64 0.40% 0.00 PUKED INCOME SECURITIES U.S.DOLLAR US GOVERNMENTS 3,587,000.000 3,599,330.31 3,587,286.96 99.60% -12,043.35 TOTAL ASSETS-BASE: 3,587,000.000 3,613,816.95 3,601,773.60 I00.00% -12,033.35 41612017 8:18:58PM EDT 1 Workbench Yield Analysis Report ID: RAM234 Base Currency: BNY MELLON OCSF07511102 3/31/2017 Liquid Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmuut Receivables - 0.00 SUMRECV 217,086 AGENCY 5,000,000.00 FEDERAL HOME LN BK CONS DISC 0.67 Aaa 99.94 4,993,475 8.67 0.07 313385EXO 04/28/2017 4,993,475 5.86 4,000,000.00 FEDERAL NATL MTG ASSN DISC 0.69 Aaa 99.95 3,993,991 6.94 0.08 313589FA6 05/01/2017 3,993,991 4.69 2,000,000.00 FEDERAL HOME LN BK CONS DISC 0.69 Aaa 99.93 1,996,792 3.47 0.09 313385FE1 05/05/2017 1,996,792 2.34 9,000,000.00 FEDERAL HOME LN BK CONS DISC N 0.74 Aaa 99.85 8,986,333 15.61 0.19 313385GR1 06/09/2017 8,986,333 10.55 CERTIFICATES OF DEPOSIT 1,150,000.00 TORONTO-DOMINIONNYINSTLC/D 0.89 1,15 Aal 100.02 1,149,964 2.00 0.09 89113E7K6 1.150%05/03/2017 DD 05/05/l6 1,149,964 1.35 COMMERCLU,PAPER 1,705,000.00 BANKTOKYO-MITSUB DISC 1.12 1.12 P-t 99.60 1,698,182 2.95 0.35 06538BU76 07/07/2017 1,698,182 L99 OTHER 3,753,584.00 DREYFUS TREAS&AGY CSH CSH MG - Aaa 3,753,584 6.52 0.08 996085247 VAR RT 12/31/2049 DID 04/09/97 3,753,584 4.41 TREASURIES AND AGENCIES O 1,000,000.00 TOYOTA MTR CR CP DISC 6.06 P-1 99.67 996,689 1.73 0.05 89233GRL2 04/20/2017 996,689 1.17 41612017 8:32:37PM EDT 1 Source:The Bouck fNew York Mel/an Communion Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07511102 3/31/2017 Liquid Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Rice Market Value %Market Adj Yield Rating Value Duration TREASURY 15,000,000.00 U S TREASURY BILL 0.62 Aaa 99.99 14,972,000 26.01 0.06 912796KC5 0.000%04/20/2017 DD 10/20/16 14,972,000 17.58 15,000,000.00 U S TREASURY BILL 0.75 Aaa 99.85 14,962,819 25.99 0.27 912796LG2 0.000%07/06/2017 DD 01/05/17 14,962,819 17.57 TOTAL:CASH Is TEMPORARY 0.81 0.06 57,503,828 100.00 0.15 67,720,924 FIXED INCOME AGENCIES&OTHER GOVT GEL 2,000,000.00 FEDERAL HOME LN MTG CORP 0.87 1.00 Aaa 100.03 2,000,880 7.25 0.24 3137EADH9 1.000%06/29/2017 DD 05/14/12 2,000,620 2.35 4,500,000.00 FEDERAL NATL MTG ASSN 0.99 5.33 Aaa 100.86 4,571,305 16.44 0.20 31398ADM1 5.375%06/12/2017 DD 06/08/07 4,538,745 5.33 BARKS&FINANCE 1,000,000.00 WELLS FARGO&CO L39 2.10 A2 100.07 1,008,550 3.62 0.10 94974BFD7 2.100%05/08/2017 DD 05/07/12 1,000,720 1.17 1,000,000.00 BERESHIRE HATHAWAY FINANCE COR 1.42 1.60 Aa2 100.02 1,001,760 3.62 0.12 084664BS9 1.600%05/15/2017 DD 05/15/12 1,000,210 1.17 740,000.00 US BANCORP 1.57 1.65 Al 100.01 740,929 2.68 0.12 91159HHD5 1.650%05/15/2017 DD 05/08/12 740,067 0.87 INDUSTRIALS 1,000,000.00 APPLE INC 0.97 1.05 Ael 100.01 1,002,590 3.62 0.10 037833AM2 1.050%05/05/2017 DD 05/06/14 1,000,050 1.17 41612017 8:32:37PM EDT 2 Sourc Ma B¢Nc. fNew York M,Ou Corporadou Yield Analysis Report ID: RAM234 Base Currency: BED BNY MELLON OCSF07511102 3/31/2017 Liquid Oper Unit.Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 1,000,000.00 JOHN DEERE CAPITAL CORP L17 1.13 A2 99.99 1,000,420 3.62 0.20 24422ESN0 1.125%06/12/2017 DO 06/12/14 999,900 IA7 1,000,000.00 ORACLE CORP 1.25 1.20 Al 99.97 999,870 3.62 0.53 68389XAN5 1.200%10/15/2017 DD 10/25/12 999,740 1.17 1,000,000.00 CHEVRON CORP 1.29 1.34 As2 100.03 1,000,780 3.62 0.60 166764BC3 1.344%11/09/2017 DD 11/17/15 1,000,340 1.17 1,000,000.00 AMERICAN HONDA FINANCE CORP 1.45 1.50 Al 100.04 1,001,140 3.62 0.94 02665WAT8 1.500%03/13/2018 DD 03/13/15 1,000,440 1.17 1,000,000.00 GENERAL ELECTRIC CO 1.49 5.12 Al 102.53 1,033,650 3.71 0.66 369604BC6 5.250%12/06/2017 DD 12/06/07 1,025,330 1.20 SUPBANATIONALS 1,162,000.00 INTERNATIONAL BANK FOR RECONST 1.16 1.13 Asa 99.99 1,163,057 4.21 0.30 459058DC4 1A25%07/18/2017 DO 07/16/13 1,161,884 L36 1,000,000.00 INTERNATIONAL FINANCE CORP 1.19 1.00 Ass 99.99 1,001,090 3.62 0.06 45950KBS8 1.000%04/24/2017 DD 04/24/12 999,880 L17 TREASURIES 10,000,000.00 U S TREASURY BILL 0.30 Aao 99.99 9,991,595 36.19 0.02 912796KQ1 0.000%04/06/2017 DD 10/06/16 9,991,595 11.73 TOTAL:]PIKED INCOME 0.85 1.63 27,517,616 300.00 0.19 27,459,521 TOTAL:Liquid Oper-Punco 0.82 0.59 85,021,444 100.00 0.16 85,180,434 41612017 8:32:37PM EDT 3 Source:The Dcuk fNew York M,Ou Corporadou Yield Analysis Report ID: RAM234 Base Currency: BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &.TEMPORARY Sum o(Acmuut Receivables - 0.00 SUMRECV 1,034,335 COMMERCIAL PAPER 6,345,000.00 BANK TOKYO-MITSUB DISC L12 1.12 P-1 99.60 6,319,627 41.01 0.35 06538BU76 07/07/2017 6,319,627 1.98 6,300,000.00 TOYOTA MTR CR CP DISC 2.23 P-1 99.24 6,251,999 40.57 0.34 89233GV29 08/02/2017 6,251,999 1.96 OTHER 60,641.49 SLH PROXY LONG EXPOSURE - - 93,295 0.17 - 99WAEU30 SLHOPNTA4 25,621 0.01 2,783,196.78 DREYFUS TREAS 8;AGY CSH CSH MG - Aaa 2,783,197 18.06 0.08 996085247 VAR RT 12/31/2049 DD 04/09/97 2,783,197 0.87 US CASH 1.00 USD(UNITED STATES DOLLAR) - - 0 0.00 - NA9123459 GL PAYAELES RECEIVABLES 0 0.00 TOTAL:CASH&TEMPORARY 1.67 1.12 15,44S,lls 100.00 0.30 16,414,779 FIXED INCOME AGENCIES&OTHER GOVT OBL 5,000,000.00 FEDERAL HOME LN MTG CORP 0.88 0.75 Ana 99.96 4,994,250 1.65 0.29 3137EADV8 0.750%07/14/2017 DO 05/29/15 4,998,150 1.57 41612017 8:32:37PM EDT 4 Source:The Bank fNew York Mellen Commotion Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 5,000,000.00 FEDERAL HOME LN MTG CORD 1.04 0.75 Aaa 99.77 4,967,500 1.65 0.78 3137EADN6 0350%01/12/2018 DD 11/21/12 4,988,700 1,57 5,000,000.00 FEDERAL HOME LN MTG CORP 1.12 0.88 Aaa 99.77 4,974,100 1.65 0.93 3137EADP1 0.875%03/07/2018 DD 01/17/13 4,988,700 1.57 7,500,000.00 FEDERAL HOME LN BK CONS BE, 1.13 1.37 Aaa 100.23 7,544,850 2.48 0.93 313378A43 1.375%03/09/2018 DD 02/13/12 7,517,175 2.36 5,000,000.00 FEDERAL NATL MTG ASSN 1.27 1.13 Aaa 99.76 4,963,950 1.65 1.68 3135GOG72 1.125%12/14/2018 DD 11/03/15 4,987,950 1.57 7,500,000.00 FEDERAL HOME LN BK CONS BD 1.36 1.50 Aaa 100.26 7,589,190 2.48 1.90 3133782M2 1.500%03/08/2019 DD 02/06/12 7,519,800 2.36 7,500,000.00 FEDERAL HOME LN MTG CORP 1.48 1.26 Aaa 99.44 7,399,650 2.46 2.44 3137EADM8 1.250%10/02/2019 DD 10/02/12 7,458,150 2.34 5,000,000.00 FEDERAL NATL MTG ASSN L64 1.51 Aaa 99.56 4,955,650 1.64 3.14 3135GOD75 1.500%06/22/2020 DD 04/27/15 4,978,100 1.56 5,000,000.00 FEDERAL HOME LN BK CONS BE, L69 1.75 Aaa 100.19 5,008,950 1.65 3.09 313383HU8 1.750%06/12/2020 DO 06/03/13 5,009,450 1.57 7,500,000.00 FEDERAL NATL MTG ASSN 173 1.51 Aaa 99.17 7,370,726 2.45 3.55 31350OF73 1.500%11/30/2020 DO 10/19/15 7,437,675 2.34 5,365,000.00 FEDERAL HOME LN BK CONS BD L78 1.40 Aaa 98.47 5,343,325 1.74 3.78 313OA7CV5 1.375%02/18/2021 DO 02/18/16 5,282,862 1.66 10,000,000.00 FEDERAL NATL MTG ASSN 1.84 1.40 Aaa 98.24 10,040,950 3.24 3.80 3135GW20 1.375%02/26/2021 DO 02/05/16 9,823,900 3.09 3,000,000.00 FEDERAL NATL MTG ASSN 2.01 2.00 Aaa 99.96 2,994,570 0.99 4.54 3135GOS38 2.000%01/05/2022 DD 0 1/09/17 2,998,890 0.94 41612017 8:32:37PM EDT 5 Sou¢ Ma D¢Nc. fNew Pork Mellon Corporation Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration BANKS&FINANCE 600,000.00 BANK OF AMEMCA NA 1.05 1.45 Al 100.04 600,000 0.20 0.11 06050TLX8 VARRT 05/08/2017DD05/08/14 600,264 0.19 500,000.00 WELLS FARGO BANK NA 1.25 1.39 Aa2 100.03 500,000 0.17 0.20 94988J2L0 VAR RT 06/15/2017 DO 06/12/14 500,145 0.16 3,000,000.00 HSBC USA MC 1.70 1.63 A2 99.94 3,003,290 0.99 0.78 40428HPH9 1.625%01/16/2018 DO 12/20/12 2,998,110 0.94 3,800,000.00 BANK OF AMERICA CORP 1.75 5.60 Baal 102.64 4,334,014 1.29 0.65 060505DP6 5.750%12/01/2017 DO 12/04/07 3,900,206 122 2,900,000.00 AMEWCAN EXPRESS CO 1.75 6.67 A3 105.01 3,377,386 1.01 0.94 025816AY5 7A00%03/19/2018 DD 03/19/08 3,045,232 0A6 5,000,000.00 GENERAL ELECTRIC CO 1.80 2.18 Al 101.08 5,014,950 1.67 2.68 36962G7M0 2.200%01/09/2020 DD 01/09/15 5,054,000 L59 600,000.00 GOLDMAN SACHS GROUP INC/THE L80 5.76 A3 103.27 692,806 0.20 0.78 38141GFG4 5A50%01/18/2018 DO 0 1/18/08 619,602 0.19 5,000,000.00 JOHN DEERE CAPFfA6 CORP L85 2.28 A2 101.07 5,046,984 1.67 2.39 24422ESS9 2.300%09/16/2019 DO 09/15/14 5,053,700 1.59 3,200,000.00 BEAR STEARNS COS LLC/THE 1.86 4.50 A3 103.43 3,523,520 1.09 1.21 073902CD8 4.650%07/02/2018 DD 06/25/03 3,309,888 1.04 2,120,000.00 BANK OF NEW FORK MELLON CORP/T 1.90 2.28 Al 100.95 2,142,175 0.71 2.37 06406HCW7 2.300%09/11/2019 DD 09/11/14 2,140,098 0.67 2,000,000.00 JPMORGAN CHASE&CO 2.12 2.24 A3 100.34 1,994,880 0.66 2.71 46625HKA7 2.250%01/23/2020 DD 01/23/15 2,006,880 0.63 41612017 8:32:37PM EDT 6 Sou¢e:The BaNc. fNew York Mellon Corporation Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON 0CSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 1,250,000.00 HSBC USA INC 2.26 2.34 A2 100.26 1,222,788 0.41 2.82 40428HPR7 2.350%03/05/2020 DD 03/05/15 1,253,225 0,39 5,000,000.00 WELLS FARGO&CO 2.29 2.57 A2 100.99 5,001,650 1.67 3.16 94974BGM6 2.600%07/22/2020 DD 07/22/15 5,049,450 1.59 2,500,000.00 BANK OF NEW YORK MELLON CORP/T 2.59 2.60 Al 100.05 2,504,475 0.83 4.55 06406RAA5 2.600%02/07/2022 DD 02/07/17 2,501,125 0.79 2,800,000.00 MORGAN STANLEY 2.81 4.96 A3 110.90 3,200,848 1.02 3.87 61747WAL3 5.500%07/28/2021 DD 07/28/11 3,105,060 0.98 600,000.00 ESC LEHMAN BRTH HLD ESCROW - - 6.50 352,614 0.01 - 525ESCIB7 0.000%11/24/2013 DD 01/22/08 39,000 0.01 2,000,000.00 LEHMAN BRTH HLD ESC - - 6.50 1,207,405 0.04 - 525ESCOY6 0.000%12/30/2016 DD 10/24/05 130,000 0.04 CARDS 4,140,000.00 CHASE ISSUANCE TRUST A7 A7 1.24 1.06 - 99.92 4,139,643 1.37 0.45 161571HH0 1.060%09/16/2019 DO 09/13/16 4,136,605 1.30 1,810,000.00 HONDA AUTO RECEIVABLES 202 A3 1.55 1.39 Aaa 99.80 1,809,965 0.60 1.24 43814QAC2 1.390%04/15/2020 DO 05/31/16 1,806,416 0.57 CARE 1,885,000.00 HONDA AUTO RECEIVABLES 20 1 A2 0.00 1.42 Aas 100.03 1,884,955 0.62 - 43814TAB8 1.420%07/22/2019 DD 03/28/17 1,885,528 0.59 1,365,000.00 NISSAN AUTO RECEIVABLES A A2A 0.00 1.47 Asa 100.00 1,364,993 0.45 - 654S47AB0 1.470%O1/15/2020 DO 03/28/17 1,364,986 0.43 1,302,300.19 HONDA AUTO RECEIVABLES 201 I2 1.07 1.01 - 99.98 1,302,170 0.43 0.19 43814NAB1 1.010%06/18/2018 DO 02/25/16 1,302,040 0.41 41612017 8:32:37PM EDT 7 Sou¢ M: E¢Nc.of New York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 76,628.87 TOYOTA AUTO RECENABLES C A2A IA7 0.92 A. 99.99 76,623 0.03 0.04 89231TAB6 0A20%02/15/2018 DD 08/26/15 76,619 0,02 2,207,690.52 TOYOTA AUTO RECEIVABLES 2 A A3 1.32 1.12 Asa 99.90 2,207,357 0.73 0.01 89236WAC2 1.120%02/15/2019 DD 03/04/15 2,205,549 0.69 2,085,000.00 NISSAN AUTO RECEIVABLES C A2A 1.32 1.07 Aaa 99.88 2,084,918 0.69 0.39 65478WAB1 1.070%05/15/2019 DD 08/10/16 2,082,456 0.65 274,871.08 HONDA AUTO RECEIVABLES 20 2 A3 1.33 0.77 Aaa 99.93 274,678 0.09 0.08 43814GAC4 0.770%03/19/2018 DD 05/21/14 274,676 0.09 BQUIplez"LOANS 1,442,709.85 JOHN DEERE OWNER TRUST 20 B A3 1.34 1.07 Asa 99.95 1,443,386 0.48 0.17 477877AD6 1M70%11/15/2018 DO 09/03/14 1,442,017 0.45 2,980,000.00 JOHN DEERE OWNER TRUST 20 B A2 1.38 1.09 Ass 99.91 2,979,818 0.98 0.24 47788NAB4 1A90%02/15/2019 DO 07/27/16 2,977,348 0.94 1,410,000.00 JOHN DEERE OWNER TRUST 20 A A2 1.51 1.50 Aas 99.98 1,409,994 0.47 2.48 47787XAB3 1.500%10/15/2019 DO 03/02/17 1,409,662 0.44 2,420,000.00 JOHN DEERE OWNER TRUST 20 A A3 1.63 1.36 Aaa 99.79 2,419,619 0.80 0.78 47788MAC4 1.360%04/15/2020 DO 03/02/16 2,414,966 036 FANNIE MAE REMIC 397.59 FNMA GTD REMIC P/T 07-114 A6 -53.71 0.78 Aaa 99.93 378 0.00 0.21 31396X3Q5 VAR RT 10/27/2037 DO 11/30/07 397 0.00 316,281.98 FNMA GTD REMIC P/T 11-3 FA 1.36 1.44 Ass 101.37 316,183 0.11 0.15 31397QRE0 VAR RT 02/25/2041 DO 01/25/11 320,625 0.10 FHLMC 41612017 8:32:37PM EDT 8 Sou¢ Ma ofNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOp) t Quality Price Market Value %Market Adj Yield Rating Value Duration 2,364.34 FHLMC POOL#78-6064 1.98 2.95 Aaa 102.92 2,283 0.00 0.80 31348SWZ3 VAR RT 01/01/2028 DD 12/01/97 2,433 0,00 FNMA 141,969.86 FNMA POOL#0823358 2.03 3.19 Aaa 105.28 140,861 0.05 0.82 31406X 5 VAR RT 02/01/2035DD04/01/05 149,470 0.05 357,855.83 FNMA POOL#0456397 2.10 3.26 Aaa 104.18 350,112 0.12 3.29 31381PDA3 3.400%11/01/2020 DO 11/01/10 372,825 0.12 23,613.45 FNMA POOL#0257179 2.43 4.19 Aaa 107.44 24,974 0.01 3.33 31371NUC7 4.500%04/01/2028DD03/01/08 25,371 0.01 28,029.81 FNMA POOL#014A0022 2.45 4.19 Aaa 107.46 29,644 0.01 3.25 31417YAY3 4.500%04/01/2029 DO 03/01/09 30,120 0.01 17,667.44 FNMA POOL#0AL0869 2A6 4.19 Aaa 107.41 18,685 0.01 3.20 3138EG6F6 4.500%06/01/2029DD09/01/11 18,977 0.01 4,979.69 FNMA POOL#0748678 2A7 4.56 Aaa 109.73 5,353 0.00 2.95 31403GXF4 5.000%10/01/2033 DO 10/01/03 5,464 0.00 28,209.58 FNMA POOL#0826080 2.56 4.58 Aae 109.21 30,325 0.01 2.73 31407BXH7 5.000%07/01/2035 DD 06/01/05 30,807 0.01 164,593.04 FNMA POOL#0357969 2.62 4.57 Aaa 109.44 176,938 0.06 2.77 31376M2 5.000%09/01/2035DD09/01/05 180,122 0.06 159,334.93 FNMA POOL#0745580 2.64 4.57 Aaa 109.41 171,285 0.06 2.90 31403WZ3 5.000%06/01/2036DD05/01/06 174,330 0.05 314,186.23 FNMA POOL#0888336 2.65 4.57 Aaa 109.40 337,750 0.11 2.99 31410F4V4 5.000%07/01/2036 DD 04/01/07 343,723 0.11 41612017 8:32:37PM EDT 9 Sourre:7heB¢Nc. fNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market AQj Yield Rating Value Duration 269,292.30 FNMA POOLK0815991 2.51 4.57 Aaa 109.38 289,489 0.10 3.01 31406PQY8 5.000%03/01/2035DD03/01/05 294,547 0,09 FREDDIE MAC MULTICLASS 39,012.85 FHLMC MULTICLASS MTG E3 A 1.64 2.90 Aaa 103.34 39,054 0.01 0.66 3133ME95 VAR RT 08/15/2032 DO 12/01/97 40,315 0.01 900,000.00 FHLMC MULTICLASS MTG K006 A2 1.86 4.01 NR 106.02 951,047 0.31 2.54 31398VJ98 4.251%01/25/2020 DO 04/01/10 954,189 0.30 954,273.46 FHLMC MULTICLASS MTG 58 2A 3.28 5.62 Aaa 115.71 1,080,745 0.36 3.00 31394JY35 6.500%09/25/2043 DO 09/01/03 1,104,152 0.35 GNMA 84,228.29 GNMA lI POOL#0080965 1A2 2.29 Asa 103.92 84,176 0.03 0.54 36225DCB8 VAR RT 07/20/2034DD07/01/04 87,526 0.03 24,891.89 GNMA lI POOL#0080023 1.48 2.31 Aaa 103.21 25,304 0.01 0.94 36225CA 9 VAR RT 12/20/2026 DO 12/01/96 25,691 0.01 10,213.05 GNMA II POOL#0080395 1.50 2.30 Aaa 103.59 10,120 0.00 1.38 36225CNM4 VARRT 04/20/2039DD04/01/00 10,580 0.00 28,982.80 GNMA 11 POOL 4080088M 1.51 2.31 Aaa 103.19 29,617 0.01 0.47 36225CC20 VAR RT 06/20/2027 DO 06/01/97 29,908 0.01 82,019.12 GNMA 11 POOL s080408X 1.53 2.30 Aaa 103.46 81,186 0.03 0.38 36225CN28 VARRT 05/20/2030DD05/01/00 84,857 0.03 GNMA REMIC 28,937.04 GNMA GM REMIC P/T 00-9 FH 1.11 1.42 Aaa 100.47 28,937 0.01 -0.03 3837H4NX9 VAR RT 02/16/2030 29,074 0.01 HOME EQUITY 41612017 8:32:37PM EDT 10 Sou¢ Ma H¢Nc. fNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Rice Market Value %Market AQj Yield Rating Value Duration 133,743.29 AMRESCO RESIDENTIAL SECURI 1 A L67 1.00 - 94.39 100,433 0.04 0.04 03215PFN4 VAR RT 06/25/2029 DO 10/20/99 126,238 0.04 INDUSTRIALS 2,000,000.00 INTEL CORP 1.26 1.35 Al 100.07 2,008,280 0.66 0.70 458140AL4 1.350%12/15/2017 DD 12/11/12 2,001,300 0.63 2,000,000.00 CHEVRON CORP 1.35 1.11 Aa2 99.83 1,988,600 0.66 0.67 166764AA8 1.104%12/05/2017 DD 12/05/12 1,996,660 0.63 2,000,000.00 OCCIDENTAL PETROLEUM CORP 1.53 1.50 A3 99.97 1,986,340 0.66 0.86 674599CD5 1.500%02/15/2018 DD 06/22/12 1,999,400 0.63 4,000,000.00 ELI LILLY&CO 1.59 1.94 A2 100.70 4,009,675 1.33 1.91 532457BF4 1A50%03/15/2019 DD 02/25/14 4,027,920 L27 4,000,000.00 AMERICAN HONDA FINANCE CORP 1.87 2.23 Al 100.87 4,046,640 1.33 2.30 02665WAH4 2.250%08/15/2019 DO 09/09/14 4,034,960 I27 4,000,000.00 APPLE INC 2.17 2.24 Aal 100.30 4,050,840 1.32 3.73 037833BS8 2.250%02/23/2021 DO 02/23/16 4,012,120 L26 3,045,000.00 MICROSOFT CORP 2.17 1.59 Aae 97.44 3,041,385 0.98 4.20 594918BP8 1.550%08/08/2021 DO 08/08/16 2,967,139 0A3 3,000,000.00 EX ON MOBIL CORP 2.17 2.22 Aaa 100.19 3,016,097 0.99 3.75 30231GAV4 2.222%03/01/2021 DO 03/03/16 3,005,790 0A4 5,0W,000.00 QUALCOMM INC 2.18 2.25 Al 100.22 4,995,195 1.65 3.00 747525AD5 2.250%05/20/2020 DO 05/20/15 5,011,100 1.57 2,500,000.00 CHEVRON CORP 2.32 2.12 Aa2 99.12 2,485,350 0.82 3.92 166764BG4 2.100%05/16/2021 DO 05/16/16 2,478,025 0.78 OTHER CMO OOVT AGENCIES 41612017 8:32:37PM EDT 11 Source:The BaNc. fNew York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 357,959.00 NCUA GUARANTEED NOTES TR R2 IA L33 1.15 Aaa 100.02 357,946 0.12 0.09 62888UAA8 VARRT 11/06/2017 DD 11/17/10 358,020 OA1 62,182.38 SBA GTD PARTN CTFS 2001-20C 1 2.04 5.99 Aaa 105.85 62,182 0.02 1.35 83162CWO 6.340%03/01/2021 65,822 0.02 STUDENT 34,564.35 SLM STUDENT LOAN TRUST 200 9 A 2.04 2.49 Baa3 102.00 34,424 0.01 0.13 78445JAA5 VAR RT 04/25/2023 DO 08/28/08 35,255 0.01 SUPRANATIONALS 5,000,000.00 INTER-AMERICAN DEVELOPMENT BAN L10 1.00 Aaa 99.97 5,019,550 1.65 0.29 4581XOCG 1 1.000%07/14/2017 DO 04/30/14 4,998,500 1.57 5,000,000.00 INTERNATIONAL FINANCE CORP 1.19 1.00 Aaa 99.99 5,020,700 1.65 0.06 45950KB58 L000%04/24/2017 DO 04/24/12 4,999,400 1.57 5,000,000.00 INTERNATIONAL DANE FOR RECONST 129 1.00 Aaa 99.65 4,991,170 1.64 1.19 459058EJ8 1.000%06/15/2018 DO 04/30/15 4,982,650 1.56 3,500,000.00 INTER-AMERICAN DEVELOPMENT BAN 1.95 1.88 Aaa 99.70 3,590,405 1.15 3.82 4381X0055 1.875%03/15/2021 DO 01/14/16 3,489,605 1.10 2,500,000.00 INTERNATIONAL FINANCE CORP 2.02 1.17 Aaa 96.33 2,441,600 0.79 4.19 45950KCF7 1.125%07/20/2021 DO 07/20/16 2,408,250 0.76 3,000,000.00 INTER-AMERICAN DEVELOPMENT BAN 2.04 2.12 Aaa 100.38 2,996,310 0.99 4.56 4581XOCW6 2.125%01/18/2022 DO 01/18/17 3,011,490 0.95 TUS 0.00 US TREAS-CPI INFLAT 1.75 1.07 Aaa 105.29 0 0.00 2.65 912828PP9 1.125%01/15/2021 DO 01/15/11 0 0.00 41612017 8:32:37PM EDT 12 Sou¢e:Ma of New York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: USD BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 10,634,208.00 US TREAS-CPI INFLAT 2.28 0.13 Aaa 99.07 10,516,924 3.48 5.21 912828W O O.125%07/15/2024 DD 07/15/14 10,534,991 3,31 TRBASmm 2,500,000.00 U S TREASURY NOTE 0.68 0.87 Aaa 100.02 2,500,204 0.83 0.08 912828SSO 0.875%04/30/2017 DD 04/30/12 2,500,400 0.79 2,500,000.00 U S TREASURY NOTE 0.95 0.88 Aaa 99.95 2,487,196 0.82 0.62 91282SG20 0.875%11/15/2017 DD 11/15/14 2,498,825 0.78 3,500,000.00 U S TREASURY NOTE 1.06 0.75 Aaa 99.72 3,496,457 1.15 0.91 912828UR9 0.750%02/28/2018 DD 02/28/13 3,490,165 1.10 11,000,000.00 U S TREASURY NOTE 1.24 1.49 Aaa 100.47 11,042,439 3.65 1.81 91282SB33 1.500%01/31/2019 DD 01/31/14 11,051,150 3A7 5,000,000.00 U S TREASURY NOTE 1.26 1.49 Aaa 100.47 5,016,423 1.66 1.97 912828SN1 1.500%03/31/2019 DD 03/31/12 5,023,650 1.58 2,000,000.00 U S TREASURY NOTE 1.33 1.61 Aaa 100.65 1,996,861 0.66 2.20 912828WSS 1.625%06/30/2019 DD 06/30/14 2,013,040 0.63 5,000,000.00 U S TREASURY NOTE 1.35 1.61 Aaa 100.63 5,012,389 1.66 2.29 912828W W6 1.625%09/31/2019 DD 09/31/14 5,031,250 1.58 5,800,000.00 U S TREASURY NOTE 1.38 1.73 Aaa 100.90 5,873,187 1.93 2.45 912828F39 1.750%09/30/2019 DD 09/30/14 5,851,910 1.84 7,50Q000.00 U S TREASURY NOTE 1.44 1.50 Aaa 100.17 7,449,635 2.48 2.60 91282SG61 1.500%11/30/2019 DD 11/30/14 7,512,600 2.36 5,000,000.00 U S TREASURY NOTE 1.58 1.50 Aaa 99.75 4,966,423 1.65 3.08 912828X 5 1.500%05/31/2020 DD 05/31/15 4,987,500 1.57 41612017 8:32:37PM EDT 13 Sou¢ M: E¢Nc.of New York Mellon Corporndon Yield Analysis Report ID: RAM234 Base Currency: BED BNY MELLON OCSF07522202 3/31/2017 Long Term Oper Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(BOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration 5,500,000.00 U S TREASURY NOTE L69 1.39 Aaa 98.91 5,424,667 1.80 3.48 9128281.99 1.375%10/31/2020 DD 10/31/15 5,439,830 191 6,OOQ000.00 U S TREASURY NOTE 1.75 1.39 Aaa 98.60 5,895,840 1.95 3.73 91282SN89 1.375%01/31/2021 DD 01/31/16 5,915,880 1.86 7,000,000.00 U S TREASURY NOTE 1.88 1.16 Aaa 96.75 6,757,914 2.24 4.39 912828T34 1.125%09/30/2021 DD 09/30/16 6,772,220 2.13 6,000,000.00 U S TREASURY NOTE 1.89 1.29 Aaa 97.20 5,813,692 1.92 4.44 912828767 1.250%10/31/2021 DD 10/31/16 5,831,940 1.83 7,000,000.00 U S TREASURY NOTE 1.90 1.76 Aaa 99.35 6,900,492 2.30 4.47 912828U65 1.750%11/30/2021 DD 11/30/16 6,954,360 2.18 3,000,000.00 U S TREASURY NOTE 1.92 1.88 Aaa 99.78 3,004,815 0.99 4.63 912828V72 1.875%01/31/2022 DD 0 1/31/17 2,993,430 0.94 US TAXABLE MUM BONDS 2,440,000.00 PORT AUTH OF NEW YORK&NEW JE 183 4.87 Aa3 109.03 2,507,634 0.88 2.47 73358WAG9 5.309%12/01/2019 DO 07/01/09 2,660,210 0A4 1,400,000.00 NEW YORK CITY NY TRANSITIONAL L96 3.80 Aal 107.29 1,400,000 0.50 3.31 64971M5E8 4.075%11/01/2020 DO 11/03/10 1,502,088 0A7 400,000.00 UNIV OF CALIFORNIA CA ROTS MED 2.56 4.59 Aa3 109.64 400,000 0.14 3.70 913366EJ5 5.035%05/15/2021 DD 11/IS/10 438,548 0.14 TOTAL:FIXED INCOME 1.62 1.72 304,196,326 100,00 2.47 302,003,488 TOTAL:Long Term Oper-Pimco 1.62 1.71 319,644,444 100.00 2.36 318,419,266 41612017 8:32:37PM EDT 14 Source:TheB of New YorkM tba Corporation Yield Analysis Report ID: NAM234 Base currency: BNY MELLON OCSF07555502 3/31/2017 O.C.S.Escrow Account Units Held YTM/ Curren Moody's Market Total Cost %Type Option Security ID Security Description can(EOP) t Quality Price Market Value %Market Adj Yield Rating Value Duration CASH &TEMPORARY Sum o(Acmunt Receivables - 0.00 SUMRECV 14,487 TOTAL:CASH&TEMPORARY 0.00 0.00 100.00 14,487 FIXED INCOME TREASURIES 3,587,000.00 U S TREASURY NCTE 0.68 0.87 Asa 100.01 3,599,330 99.60 0.04 91282SC73 0.875%04/15/2017 DD 04/15/14 3,587,287 99.60 TOTAL:FIXED INCOME 0.68 0.87 3,599,330 100.00 0.04 3,587,287 TOTAL:O.C.S.Escrow Account 0.68 0.97 3,599,330 100.00 0.04 3,601,774 41612017 8:32:37PM EDT 15 Source:Ma D¢Nc. fNew York McOm Commotion j*. Asset Detail BNY MELLON OCSD-CONSOLIDATED-0CSGOOO1O000 As Of Date 3/31/2017 IF Mallon Base Markel Pamnl of Local Unreafwtl Sswrily l0 Securlt)OescXpllon Base Price SM1ereslPar Base Cost Value Tda GaiNLoss XN Unrealized GelnlLasa Base Grand Tdal 408,00 10.]H 4O9,531,125.78 4W,]00A]AA9 100.00 -2,339,6NA8 CASH&CASH EQUIVALENTS 83,097,d2290 84,209,WaD BCp01}%O3 20.68 47,013,56 U.S.DOLIAN 83,09]A22270 81,209,W99 64,141}]4,43 20,66 47,673.56 1185884/ Ill .11 ll55EM 1G--1H.MEW&(OONSOI.AGM17 � "ClocOW0 <,BW,a]8po <AMA]So 1. I—S FELFRAL HOMPLININSIONS OISGDAGAIIDI] A. lIJUS— FLES7.e] LJXM7JI 17 ooe Y INESIL MIGG RL2 TOYOT�A INS!OR OR Drv8MRn00�] 54P"301] .10 154%0000S9Y18 � 1,01 LW NO SBBaoORION. oxe 00 o a POI8O%NLx09 uoo. A,SNI P25 I'Lles1] SICANKS U S TREASURY BILLF IDEA OAXAC7 DO locals SAI I I ace 110 1 TOOT NI 58 KSGJDANCIA 1 IN He He aepo55Y] OxewuSTALAS a ACY GIN HEN MGVM FIT1Y3ffiW wB]B DD O & FLOGY 663E 78meo g538.]mm IB$SCALF1 tm o0 00 FIXED INCOME SECURITIES SxPROxv LONG FxsOLURESLNOFx)u pays 324,912,192101 325,321,8]]A9 123,058,899.97 79.34 6!e]a50 -3262977,92 U.S.DOLLIR 324,912,192101 325,RI,67L79 U3,0N,699.07 IS.. -2,262,977.92 .ttO t RESIDENTIAL It lIDA R FReca De x AW.oO aF iICUPS t ]a. I p ].11 115 x, ,77 x 77 COUNA., APPLE OIL MO% SIIDI]OSU OD MANS11 1. 1,.So.Fro I,W25B3oo "OHN .O0 I2C aslo IF axo IF DD 6DFp SORDFMIEACACOPPe IEO%1]g1rR0ll GO 121Nq] 7. BMi08HLW] BANN OF HEW YOxN MELLON CORP?23V%DWI 1 CUTS DO Near II10 Ne x % o ouoa NEW L M4%Oxq]ROy DOO 7117 , o � 3 o o Iaac. CHEVRON GORE Has,1mMnon DD CHNIaDpv1r _ IllNG Tw,oN.00 LNAAAAGC 149 FINe on Aomoo HIMIGH. GRECON FORRIm%I IMBrzpv DD lMnns o. BNo 1.ro Pvop%MI1820100DOw1Au CALL 3OHx DEERE CAPITAL CDR of map Sow M,11is oM:LD= EVON MUSIC CORFECSN 0.1.1 L0 WOVIS 1.1. ISILLIGH, 3,01808]AO z.Da,HI00 .11 1p,3mao YNYICCA FEDERAL HOME IN RK CONS SDI CAIA WAF/xoI DO 0918118 AS JASO ¢ ¢ ¢ 6$52M1t8 w, ass 358 Sty ryW FEDICALx MELx&t CON58D115p%WINOHODOALSO CO A ".TCEM F.-F—11CLALA STG El.1 R]GOACE.DD RpIM as,A3se 39 012 OF NYFRJL7 p350 t 3 3 Is, FECERALIUR MTOA99N1.50p%11AW'M'OCO1M&15 � 7AIRA.WO GOITZI.Oo ] ..He ars..po Rep-Itl GLW13 POSO Ti—cols,ThN A,S 201]OSLN3S PM Page of j� Asset Detail BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 As Of Date 3/31/2017 IF Mallon ease Markel Pamnl of Local Unreafwtl Seourily l0 Security Base PriceSM1areslPar Base Cost Value Ta.I GaINLaaa XN Unrealized GelnlLass Base al..- FEDE RAL Iwn OLD A55X 1.125%I L11R8180011 NL15 as.- s000 coo Ms sOMIso oo o,seie.Po.00 1 ol00 xaomoo 9)5%01Ye5R0]1 CO.511 IN 1. 1s"I"I Me le'.a.ro, UHNM or A, Illooll, 11 220.W3.50 ol 111gLC FNMA L ]eBS.OW%IflNin035D00W1N5 1 • t a, 171,91112 Hallooll, 1. 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SOL "I t -. oro al'AHUNCE US UCCRIN Marc 1 6a31 O 6 mN5A6VxV NSTE1y500%Olcoloc 91 ED 01 COO 1U."UND,00 C 71 1 Ell 11 t25RBC73 U 3 TRFA3VRV RECREA1E%ARCER017 ED NIIW14 w. 0 .7 1.1 Or 35A7 R@x. 12 5 5 1 RV HO 11.NOWASAND.1.111, 5,424C.17 1A3eA30,W 11. 1 A t 1 A t 91282BN69 J A TREASURY NoTal CIA OV3✓M1 DOHooll .1.0 6 coo coo mo IFOEAw.a1 1IFINOOR 1.aE xo mASo xo- 5C0a 0A]4'A19 EO.1112 01.111 eT31 NATE1.125%OWIW'N3 I ED WINYI 6 TPl RW.W 1.68I COI AC 1430592 i2COTea m RV NOTE135051R3VNY ED 1W3N16 Jo-1 11111111111 COO' 00 1A9 x 1 — x x TRUESSEARY NOTEI TEO%11hOPA21 CO 11COO 6 IN Cal coo No 0 5.9V.M3.001711 AS A,Ao 53,e5T80 2. I.C., US TEACGPI INFUTOG125%OTI151PN ED J7N04 as OWN 1.1.2rear, 10.111D23ae IO.SN.BW.M 0 leoeses Ie oPA.es RW2. U A TREASURY Norral ral WI31Ix019 oD AREN14 RAINCIA S000 O000so O;335.eo x FAN C0 aea Ao .411 OR IF FEWELI UNIV OF CALIFORNIA CA ED %0LWOYWIi DOOSIWIIt 11B&10 LMa5W.00 1lNEII T, T, AREADGM9 WE US FACTO A We AQO%O7IR ODo 0=16 1m saw SOO000mo SWIASO.00 S.OaBA`A.00 tm 47 No00 Lee.oo R.-Itl GL8013 Regal Timndmp:Too ARE 6 2017 OR IA PM Page 3 of j� Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 Effective Contract Trade Data Investment Investment Base 6ecuri[y 10 Description Data Settle Data 6M1aresl Par Base Amount Base Amount GaINLoce 6eMe Base Amount GRANDTOTAL 460,261.28 .708,877.76 d4,119.57 -660,285.27 CORPORATE ACTIONS 92,897.65 -92,705.31 192.36 92,897.65 92,897.65 -92,705.31 192.34 92,897.65 U.S.DOLLAR 92,897.65 -92,705.31 192.3" 92,897.65 89231MACH TOYOTAAUTO RECENASLES2 AMD aM%lansOXV DO 0911&14 3I1E.17 .1.17 82887,600 82887.BS -82)0531 lt2 si 82,B9i as MATURITIES 26,506,754.52 -26,533,884.52 -32,130.00 26,506,754.52 GASH&CASH EQUIVALENTS 23,506,750.52 -23,506,754.52 SOO 23,506,754.52 U.S.DOLLAR 23,506,750.52 -23,506,756.52 DODD 23,506,756.52 085308083 RANKTOKYPMI5UB DISC OYNSCSP 32IID1] Oei -1,OW,00omo 996.280.58 538,260.58 000 .6.2.fe O65J88063 BANK TOKYOMITSUS DISC 032NL017 1M201T OSO.Ol] S,B7g000W0 58<A1fi6.8H 1,.ilr530 000 SB46,116 at 313JBSOR4 FEDERAL HOME OR Be CONS DISC MAT O1281ID17 3syom7 .2.17 3<W,000.W0 3397OL167 yOSS754167 000 3,397,54107 FEDERAL HOME W Be CONS DISC N MAT 03124W2017 3Rd2017 598VH_1. 5.991]3416 111397DKd FEDERAL HOME IN ROD CORR DISC MAT avOc2017 32Ld117 3I21201] I ..a..f 1,049,114�. -1,24a11458 000 1,2d9,114,58 313589DR1 FEDERAL NATL MTGASSN DISC OOW%01292017 DO WOMB 3292117 129I2017 -1 raaoo tc0 1..91.. -1948,91868 000 L9i6,91866 89113VMF6 TORONTO DOMI NION BANK Up 1.19M=1=017 OD 0123116 IL13YOP 11.17 A075,0W.W0 40]S.WO.W 4,075,00000 0.00 4.075.00000 FIXED INCOME SECURITIES 3,000,000.00 -3,032,130.00 -32,130.00 3,000,000.00 U.S.DOLLAR 3,000,000.00 4,033,13D.00 42,130.DD 3,000,OSSOO 1]2]SRAT9 CISCO SYSTEMS INC 1100%01D32017 DO 01aL 11 R7 13IID17 10W,000.WO 10..WO.W -1002 NO 00 2660.00 1.WO,O0000 592457BB3 ELI LILLY 60O 52W%0115211]D003114I0] 1..17 11.17 -10WOW.WO 1,00i -1,027,93000 -22.9J000 I.O.S.OD aMlvr8Ve INTER-AIERICAN DEVELOPMENT BAN I]25%OW15/ro17 DO 01111112 3.1S.17 3n5¢e17 gOW,OW.WO ;OCOOBo 00 1,W 1'W080080 MISCELLANEOUS ACTIVITY 0.00 -1166 -19.64 ON 0.00 -19.64 -19.6" 0.00 U.S.DOLLAR 0.00 -19.60 -19.60 0.00 313105N. 118 ADJUSTMENT FHLMC POOL M]b808d 101.17 13VN17 2d.9T0 0.00 000 000 0Or 62888. ILB ADJUSTMENT NOUN GUARANTEED NOTES TR R2 IA SSIM17 131SN17 19.W9 OW is. -1014 Lou PRINCIPAL PAYMENTS 979,585.39 -966,5M.01 -2,217.51 919,561A0 FIXED INCOME SECURITIES 979,585.39 -966,5M.61 -2,217.51 979,561.4 U.S.DOLLAR 9]9,565.39 -966,52A.01 -2,217.51 979,551.40 313d83saa FHLMC NCI N85os4 VAR FIT 01NV20ID DO 121alsa ...17 WlQD17 ]3.820 23.S2 0OD 000 2392 31340SA. FHLMC POOL 17..VAR RT 01N1YNR80012p 118] WlQO17 1V2017 @3.W0 23.99 33d1 O58 000 111.113, FROM MULTICLMS MTG 582A N500 25Y1W30D ORO,N1 Y112017 111201] d.482.WO S.Mt'N 98oeae -112422 SAK,ar 3133TCE95 FHLMC MULTICLASS MTG E3 A VAR M OVIV2032 D012A119] .1S17 2LIAO17 .".Do0 151320 .1,1.al A61 1pd320 313]1NUQ FNMA PODL W2571R d.WM WN11ID260D 010V00 Y1I201] 11I201] R13.330 21232 ]20.55 1223 21332 31376KT22 FNMA POOL W357S695.SAM WNlQMS DO MIM L1I201] WlQD17 -2 Co 15D 2.07.15 3,8OC 69 185.50 2,fi0].11 11381P. FNMA POOL M0W63W 3A00%1101Y2020 DO 11N1110 IW112017 11.017 -]S9.W0 ]SBW -A266 1543 TOROS 314030dY3 FNMA POOL n7455W 5 W0%0yml 036 DD DyOlN8 WIQ017 L1IID1T d 500 410 3.S20G1 3TW.df 2.03 352041 31403G%F4 FNMA POOL W74MM S.NO%lMlQO33 DD 1MIM L11201] DIlY] 20.]d a _ 2014 31406POYS FNMA POOL 008RE71 SLOON 3,L1Y2N5000101N5 YII201] 11.01] 5.815.230 B81523 ],328.3] 511.14 6,81523 W 314 %W MA PWL p3 T5 FNMA VM AT Oaealca 500 WN1p5 . 110)17 -16SisMO 16.879,76 -16,74789 10167 16.8]a)0 31407B%H7 FNMA POOL W82WW 5000%07MI12095 DO WN1N5 Y112017 311I2017 548400 94548 -1,01a62 -7114 are 4S 410F4 FNMA PODL flies 95 WO%0]N1I206 DD ONOIM W112017 .112017 $,BR 00 8.872 SO -717303 2 44 8,6]2On 3138EWF8 FNMA F L MAL0869 4,5Oas XNl12029 DO 03anI 1II2017 111201T 1.am .1D, 4149] 22.Or 39231 31417. FNMA FWL MMAXo245W%MSHONN DO AsSlM9 L1I201] AI.O17 d13.8B0 SO.69 331.]8 -lOm 311 as 3139MVOG FNMAGTDREMICPROT-114ANVARRT 1OQS2N]OD11I30N] .17 2125f20P $ ..WO fi.]8RW 000 000 6)939D 111RECC. FNMAGIDREMICPRW-114ANVARRT IW2]I2W]ODllcuVT 32LTO1T 325I201] Lt..Wa 5]23.94 11.14 12]BOI BR3W a.-M 1.355 RepH Thames,Thu Ap 6201]05:31:46 PM Page l of j� Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 Security ID Description DadeEffective Contract SIRTRIPar Trade Data Investment Investment Base Some Base Amount Dade Seattle Data Baae Amount Base Amount GaINLoss 31397OREO FNMA GTDREMIO PR 140 FAVAR RT 0325RM1 DO 011U911 OVESS17 OV&2017 -5821/10 5,821A1 d,81959 ill 6,821A1 3837WNXF SAW GTOREMIC P?W9 FX VAR U OVIW030 A. 3I1YNI7 -1319310 1319.2] -1213.27 0.00 1213.27 IrOACAZ9 DOW 11 PWLMOBW23 VAR RT 1000SSA8 Do 12ORSO All. 11/2%] -186.300 196.30 -198.55 1.25 196.3p MACIAS GNMA II FOOL MAOSSI5 VAR RT ON203O0 DO OPOINO W112017 11Rp1] 5]120 5]12 - 052 17 IS XCOICC56 6NMA II POOL MMM65 VAR AT O]/20203d On ONORM N1/201] 11IID1] .VOd90 31Oil3 d<OR 021 34093 MOSECM GNMA II POOL MWOMM VAR RT 062020V DO memo] YIf301] 11/2O1] -3b.150 N0.15 2<500 525 OF Is 36225CNH DOW II FOOL MWWBXVAR RT 052020W DO OESINO L1I201] 11JO17 JV<.3f0 K0.3< LJ803 4 51 1 4.Ol G3B14NA31 HONDA AUTO RECEIVABLES 201 AS 101DX XFBY101S OD 02SN/R ..11 110/2017 -233.92]NO R39.32]A -233,30 23.91 23332].N HONDA AUTO RECEIVABLES 202 A30 RON=192018 DO 05IN114 Al.1] OJIW201783,520%p 09,52056 58)2 4]]8]]A06 JOHN DEERE OWNER TRUST SO 3A310ID%11I15RL18 D003N11< NUSS1] 1192017 -207.643.NO 207,613N 20Y,]<051 9233 20],62M 62888UW NOUA GUARANTEED NOTES TR R2 M VAR RT 11N&201]DO11/1]/ID L&'201] 2/8/2017 loNse00 -1Q219.90 1121171 0.10 -1021990 BRBBB. NCUA GUARNTEED NOTES TRR3 M VAR RT 11N&2M]OD 11tl]/10 L&2M] 382D17 $ ELLSIS B.%8.]9 B,368<0 090 B96R)9 SAND. NCUA GUARANTEED NOTES TR R2 IA VAR RT 1 IMW2017 DO 11/17/10 2/LV201] Z6201] 40,213 W0 1O.NSSO -1021319 F37 IS 21111 1,1620W1 DNA AM PAM CTE52W1-AC 16 NO%OLO1/2021 W112016 ."As $482.070 "207 000 IF. 846207 69236WAC2 TOYOTA AUTO RECEIVABLES 2 A AS 1120%OL15IN119 DO(COMES YISY[1117 119201] -013A,194301 N3,61963 21361713 32IS NO NO 43 SUATAB8 TOYOTA AUTO RECENABLE5 C A ANONO211MOM OD WREFS L15201] .1.17 -153.574.76) 153.57436 -153,56241 12.35 153,570.76 PURCHASES -55,M,230.88 50,533,240.52 O.DO 55,903,239.88 CASH A CASH EQUIVALENTS 45,263,522.53 45,263,522.53 GDO 45,263,522.53 U.S.DOLLAR 45,2W,528.53 45.263,521.53 0.00 45,263,522.53 085306U]8 BFNKTOKYOMISUBOISLO]N]209 &&201] 1A 11] 1]O6,OCO.WO �1898,10109 189016109 OOp 4898 IS,89 085306U78 6ANNTOKYOMITSUB DISCO]N]201] 321201] 1]I201] 8,3R,OW.WO 8,319,82).05 8,319,82)OS 000 d319,62]OS 998085N7 DREYFUS TREAS&AGY CSH CSX MG VAR RT 1L312WB ODMN9fl] L1Q01] 112D1] INASSE]BO 50.83679 50,035)9 FFO _ -54635]9 89fi0852J] DREYFUS TREAS&AGYCSX CS-1 MG VAR RT 12I31I2W90D CIMR] 1Z201] 1Z2p1] 1,Ofi33AD 1,W3d< 1,0633f 000 -1,063J< FASHIONS DREYFUS THESE AGY CSH GN1 MG VAR RT 12W12W9 DO MM9] 11201] 13201] 1Ocal AX IOW.WOW 1,W150001 IF. 1.WS5000p 996005247 DREYFUS TREAS a AGY CAN FAR MG VAR AT 1213112M9 DO W/0397 3M2017 .111] 1,SW,00 A .1OL0,W0.US 1,W0000 OF 000 ".AX000 FOSSAMI DREYFUS TREAS&AGY CSH CSX MG VARRT 1SSIQWB DO FRANM7 321 N7 18201] AFIA. ].SOD -1 reNam'. E.88].50 OOO $664,687W 996005247 DREYFUS TREAS&AGY CSH CSX MG VAR RT 12131I2049 DO N/W9] Ser. 1012017 E8,25VVaF Sell.0. SC COO r0 010 IS 21F F0 AROS247 DREYFUS TREAS&AGY CSH CSH MG VAR RT 12I312W9 DO WWW] 1&20T] 192017 W,293 NO W.. .D1 SO 2.01 010 60$9301 996095247 DREYFUS TREAS&AGY CAN ORR MO VAR RT 1MI12WO DO FORMS 113K01] L11209 012Q589 ar, 412CV568 412658968 1F. 412658968 996085247 DREYFUS TREAS A AGY CSH CSH MG VA0.RT t2/312d9 DO NN39] YISRCI] 119201] 2,031,a25 W0 IOO".5W 2,031,All 00 000 -2.031,82500 996005247 DREYFUS TREAS&AGY CSH CSX MG VAR RT 1201QN9 DO SOWS] 1152017 11512017 SMFJAX.260 -759.WS29 75900528 000 ]59.80528 KNOE5247 DREYFUS TREAS&AGY CSH CSHMG VAR HT 121 DD CIMflT L6SEV? 116209 MU.S.13D 59.74518 58745.18 010 SB.N5.1B F06085247 DREYFUS TREAS&AGY CSX CSX MG VAR RT 12I3112M9 DO pIMR] SOUSS17 12N20P Qtval170 42156157 .15615] 000 A21561.17 VrWSAN] DREYFUS MINER AGY CSH CAN MG VA0.RT 12/3$N9 DO Maser 3AW017 31232011 1SKAX,Wp -1260,000 W 125000000 I _-1,250000 OF 998085247 DREYFUS TREAS a AGY CSH CSH MG VAR RT 1MIQaSs DO N/039] .17 WNV017 6,OW.WO WO BOW,W000 NSFA 0.OF 000 $WO,00000 FsVASN] DREYFUS MEANS&AGY CSH CSX MG VAR RT 12UNQOU DO WNd9] L2]201] 12]201] 09.OS9.39D -sesedA 09,069.39 000 da,369.39 N6005247 DREYFUS TREAS&AGY CSH CSH MG VAR RT I2131I2W9 DD CIMR] L2W10P iO.NP E72V360 5.72E 16 S70F IF 000 072F 11 VN0NN7 DREYFUS TREAS&AGY CAN CSH MG VAR RT 121312049 DO NOW 1292C1] W202017 1AVINO WO -63W.W000 5,35000o O0 DREYFUS TREA56 AGY OSH CSH MG VAR AT 1213112N90D FORMS .1.11 LT209 1OSNES W0 - 27,62500 313305GR1 FEDEML HOME LN BK CONS DISC N O&q&2017 3302017 AOONn] 9,OW,000.WO FXNA0251 390633251 00a 1,906M211 FIXED INCOME SECURITIES -10,679,712.35 9,269,717.99 0.00 -10,679,712.35 U.S.DOLLAR .10,679,712.35 9,269,717.99 ODD -10,679,712.35 026850iAT8 AMERIGN HONDA FINANCE CARP 1 evil 01131M10000311115 1.1, 130/20ll 1,OW,000.WO 40011'"0 1W1,14000 000 4001,14000 3137EADH9 FEDERAL HOME W are WRP IOW%Bfl29IM1]DOOLi V13 390201] 131Q017 20W,W4.W0 2.OW..A 0. 2,W0,8 oFF 000 -2W0,6a00, 31390ADM1 FEDERAL NATL NITS ASSN 53NN ON121N11 DO OsO.7 .17 13120P 20W,OW.WO -201).B00.00 2,017,66000 010 2.017,60011 JW14TABB HONDA AUTO RECEIVABLES SO 1 AX 1A1 07Q22019 SO 032B117 9R12D17 WAW2017 WON,)So'! 1, W,9NBN.9%.BS 36 1.BN,851.95 000 -1,BN,851.95 83 JOHN DEERE OWNER(RUST 00 A A21600%10152019 DO O0017 ZR21201] LZ201] 1d10S.OAO -1,< .38 RPoa1M TX8355 Rapid Thiessen,OFF Apr 6201]05:31:46 PM Page 2 of j� Transaction Report BNY MELLON OCSD-CONSOLIDATED-OCSG00010000 SecuriWID Description Effective Contract Shama[Par Trans Data Investment Investment Base Settle Base Amount Date A m Settle Date Baae mount Bace Aount GaINoe sL BU747ABO NISSAN AUTO RECEIVABLES A Anon,1 A70%ORICA300D Steel 7 .1.11 W2W2017 138b,no.M0 -1,d.,.a 0< 1'.na0A4 000 1.300,99804 68389%AN5 ORACLE CORE I RW%lWUVO17 DO 1MARS .17 W31eO17 1,000000 W0 -959 870.00 FAFQ70 On 000 99487000 RECEIPTS AND DISBURSEMENT TRANSACTIONS _ 0.00 59,696.00 0.00 Dell MISCELLANEOUS INCOME 0.00 59,696.00 0.00 0.00 U.S.DOLLAR 0.00 59,696.00 O.DO Sea 912828WUO IRA INFLATION ADJUSTMENTS US TRCkanEl INFLAT OUI209 11I201] 1.Ono 000 1M 00 000 000 912UMUD US INFLATION ADJUSTMENTS U3 TREAE{PI INFEST ..17 ED.S17 ISSUDDO St. 19]800 000 000 912828WU0 ILB INFLATION ADJUSTMENTS US TRESSLPI INFLAT 13'201] 1312017 6828.W0 _0.00 5,82800 000 000 013838WUO 1US INFLATION ADJUSTMENTS US TREASLPI INFLAT 3 SO17 ..017 1.976 W0 OW 19]600 000 000 912828WU0 IRA INFLATION ADJUSTMENTS US TRF/S-0PI INFLAT ORI2017 1]IID1] 1,9]B WO 000 197600 000 000 Eln..UO ILS INFLATION ADJUSTMENTS US TREASCPI INFLAT .017 ..017 2,Ot0.W0 _a- 2,0W 00 000 000 91282MUO IS INFLATION ADJUSTMENTS US TREASLPI INFLAT 39I3M] 19I2017 1.976.WO O.W 19]600 000 000 91282MUO LIB NFUVRON ADJUSTMENTS US TRECELPI INFLAT L1060P W10(N9 SISOLW0 OW 592800 0no 000 FloSoNUO LIB INFLATION ADUSTMENTS US TRFASCPI INFLAT 113201] 1,9]6 W0 0an Sloven. IRA NFIATION ADJUSTMENTS US TRF/S-0PI INFLAT yLR➢17 11VID17 ,a.Ono O.W Ia.a0 912828WUO ILB NFLATION ADJUSTMEM6 US TREASCPI INFLAT lince11] 113R017 lom WO 0. 19]800 000 000 91282MUO US INFLATION ADJUSTMENTS US TRESSLPI INFLAT SUSSAI 1Iaer17 1,9]B.WO 0.00 I,9]600 000 0no 91282SWUO ILS INFLATION ADJUSTMENTS US TRECE CPI INFLAT W. 11]I201] 8,032.W0 0.. 593300 000 000 91RBRBWUO LIB INFLATION ADLUSIWERS US TRFA9LPI INFLAT YNMIP 13WA17 19]B.W1 OW fro 00 91282MUO ILB NFIATION ADJUSTMENTS US TRFAS-0PI INFLAT 121RO1] 121)2017 19]SW0 OW 197600 91282MUO ILS INFLATION ADJUSTMENTS US TREASCPI INFLAT 3R220P 3c.n7 IESSOOO OW 19]S00 000 000 91282MUO ILB INFLATION ADJUSTMENTS US TRESSLPI INFLAT 3R3ROP 12.17 1976.WO as 1,F.00 000 000 R1282MUO LIB INFLATION ADJUSTMENTS US TREASLPI INFLAT S"1@O17 12V2017 3.O.'ane OW 6.200 000 000 91282MUD e81NFLATION ADJUSTMENTS US TREASCPI INFLAT 32]201] OCm2017 1a]B.WO - ]S .0 19]6O0 Or. 000 W FiSS UO IIRSNFIA TION ADJUSTMENTS US TRFASCPI INFLAT 3?BIM1] Oce.So] 1,9M0 OW 1,900 0no .1 912828WUO ILB NFLATION ADJUSTMENTS US TREASCPI INFLAT 329IM1] 129R01] 1,976 WDDS 0.W 1,97S00 000 000 91282MUO US INFLATION ADJUSTMENTS US TREAELPI INFLAT L3MOP 13.11 1.." a an. I,9]600 0DO 000 912828WUO LIB INFLATION ADJUSTMENTS US TRESS CPI INFLAT 3I3V10P 1312017 19]6 W0 1 0.00 1,9]600 000 OOO SALES 27,703,736.04 -27,703,680.80 55.24 27,703,736.04 CASH S CASH EQUIVALENTS 27,203,64eO6 -27,203,640.06 0.00 27,203,600.86 U.S.DOLLAR 27,203,610.06 -27,203,11G0.06 Sea 27,203,64W.06 996005247 DREYFUS TRESS&AGO CSR CSH MG VAR RT 1213112049 DO OVW9] 3R12017 12.U1] -14M 378 MD 1A09.3]876 -140937676 USA 1409,3]6]S AROB5247 DREYFUS TRE4S&AGY CSH CBH MG VAR RT 12MR2049 DO MMR] 1]I201] 3l]I201] 1ON.1 U.B90I 1,BW,101.89 -LOSS la,B9 000 1.68B.181 as DREYFUS TRESS&AGY CSH CSH MG VAR RT I2131QW9 DD OUW9T .017 ORCO17 57W,121190 5,796121t9 s,T9 , 5,79612119 99EAS247 DREYFUS TRFAS&AGY CSH CSH MG VAR RT ISKe2d9 DO MIe297 3R2/M17 12S.11 aato A. .1. LOO 8.34 990005N7 DREYFUS TREAS a AGY CSH OSH MG VAR RT lX3112049 DO WI099] 3R8211P 12812017 S14S.793O 1.447R99 -3249,947 99 000 1...299 N6005247 DREYFUS TRESS&AGY CSH CSH MG VAR RT SSUQWB DO MNdfl] .17 130f2017 99831BO.W0 99B61SD.W -tatia 1.084 Son &WB.180.W A6085247 DREYFUS TRESS&AGY CSH CSH MG VAR Pr 1213112W90D Sci .1.17 131.17 5061,823050 1oal1a2305 1,081,82305 000 6W1,82305 FIXED INCOME SECURITIES 500,095.98 -500,040.74 55,24 500,095.98 U.S.DOLLAR 500,095.98 -500,UD.74 55.0 500,095.98 912828E30 U 3 TREASURY NOTE0.8]5%ORRXC017 CO WM.112 ISS712017 SRmO17 1 SW.OW.WO SW,W5.98 EDO 01074 55.24 500.OBS9B RPoa1 M TX8355 Rapt Tinashro,Thu AI1r 6201]05:31:46 PM Page 3 of Callan March 31,2017 Orange County Sanitation District 1 Investment Measurement service Quarterly Review The hairdo, aided waa prepared by Callan Associates Inc. ("CAI"I using information from sconces that include the following: fund thusands); fund dietodian(s);Investment managaidel CAI computer service;CAI investment manager and fund sponsor database;third party data vendors;and other outside sources as directed by the client CAI assumes no responsibility for the accuracy or completeness of the information provided,or methodologies employed,by any information providers external to CAI.Reasonable care has been taken to assure the accuracy of the CAI database and computer software.Callan does not provide advice regarding, nor shall Callan be responsible for,the purchase,sale, hedge or holding of individual securities, including,without limitation occurred of the client(i.e. company stock)or derivatives in the clients accounts.In preparing the following report CAI has not reviewed the risks of individual cunt,holdings or the conformity of individual seventy holdings with the client's Investment policies and guidelines,nor has it assumed any responsibility to do c.Advice pertaining to Me meets of individual securities and derivatives sal be discussed with a Mind party securities expert.Copyright 2017 by Callan Associates Inc. Table of Contents March 31, 2017 Capital Markel Review 1 Active Management Overview Market Overview 8 Domestic Fixed Income 9 Asset Allocation Investment Manager Asset Allocation 11 Investment Manager Retums 12 Asset Class Risk and Return 16 Manager Analysis Chandler-Long Term Operating Fund 18 Chandler-Liquid Operating Money 22 Callan Research/Education 24 Definitions 27 Disclosures 32 Callan Orange County Sanitation District Executive Summary for Period Ending March 31, 2017 Asset Allocation March 31, 2017 Market Value Weight Net New Inv Do eesSc Fixed!Inane Long Ten,(3peowJng Fund' 318,418,266 79,89% 0 Total Fund $403,599,701 100.0% Fn8,000,000) Performance Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Tenn Operating Fund" 0.51% 0.54% 1.40% 1.17% 1.98% Chandler 0.51% 0.54% - - - Blmbg GovtlCred 1-5 Year lox 0.57% 0.52% 1.38% 1.30% 1.86% ML 1-5 Govt/Corp 0.56% 0.56% 1.43% 1.38% 1.92% Liquid Operating Monies" 0.14% 0.45% 0.30% 0.24% 0.23% Chandler 0.14% 0.45% - - - Citi rou Month Treasuw Bill 0.12% O.M% 0.15% 0.11% .11 Total Fund 0.43% 0.35% 1.16% 1.00% 1.65% Target' 0.47% 0.52% 1,17% 1,12% 1.56% Cunent OuarterTarget=80.0%ML 15 GoWCorp and 20.0%3mo T-Bills. "Assets were transferred in kind to Chandleron 12/1/2014.Previous pedolmance reflects PIMCO. Recent Developments During the quarter, $28.0 million was withdrawn from the total portfolio. The entire sum was taken fromlhe Liquid Operating Monies. Organizational Issues NA Manager Performance - In March, the Federal Open Market Committee (FOMC) raised the federal funds rate to a range of 0.75%-1.00%. The 0.25% rate increase was widely anticipated by the market. FOMC members are currently indicating two more hikes this year of 25 basis points each. U.S. Treasury yields were relatively range-bound in the first quarter. 10-year U.S. Treasury yields fluctuated between 2.3% and 2.6% over the period. After hitting an intra--quarter high of 2.63% on March 13th, the 10-year ended March at 2.40%, five basis points bwer than where it finished 2016.The yield curve was more stable on the long end than the short over Callan Orange County Sanitadw Qstr Mey 1,2017 the three months. One-month Treasury yields rose 30 basis points during the period while 30-year Treasury yields fell four basis points. The Long Term Operating Fund rose 0.51% in the quarter, lagging the ML 1-5 Govt/Corp Index (+0.56%) and ranking in the 30 percentile versus peers. The portfolio was short duration (2.4 versus 2.8 years), which helped relative performance as the very short end of the yield curve rose. However, the portfolio has a slightly lower yield than the benchmark (1.62%versus 1.75%), which effected results. The Long Term Operating Fund had less than 30°% invested in credit and less than the permitted 20% invested in the combination of asset- backed securities, commercial mortgage backed securities, and CMOs as of March 31, 2017 (see page 21). The Liquid Operating Portfolio gained 0.11%(after fees) in the quarter, which slightly trailed the return of the 3-month Treasury(+0.12%).The Portfolio returned 0.30%(after fees) for the trailing 12 months and ranked 31 at percentile versus peers. Cordially, Gordon M.Weightman, CFA Vice President 2 Capital Market Review CA LLAN Callan INSTITUTE L * CMR Preview First Quarter 2017 This "Preview" contains excerpts from the upcoming Capital Broad Market Quarterly Returns Market Review(CMR) newsletter, which will be published in several weeks. U.S.Equity(Russell 3coo)-SM% Non-U.S.Equity(MSCI ACWI ex USA)- 7.86% US.Fixetl(Bloombeg BarclaysA ompar l E 0.82% Steady as She Goes NonU S.Fixed(Bbombeg Beroleys Global ex Us)_ 2.48% U.S. EQUITY I Lauren Mathias, CFA Cash(00-oay T-9IIIs)1 0.10% Soumes'.Bloomberg Barclays,Mar ll Lynch,MSCI,Russell Imastment Group Despite concerns over the Tramp administration's ability to fol- low through on promises of lower taxes and decreased regula- tion,the market accelerated higher in the first quarter.The S&P Up, Up, and Away 500 Index hit a peak(2,396)in March and notched a 6.07%gain U.S. FIXED INCOME I Rufash Lama over the full three-month period.But the quarter was marked by reversals from the previous ona—small cap fell behind large During the first quarter,the U.S. bond market generated posi- cap (Russell 2000 Index: +2.47% vs. Russell 1000 Index: tive returns across the board due in part to strong economic -6.03%) and growth overtook value (Russell 1000 Growth data and upbeat investors. U.S.fourth quarter GDP grew at an Index:+8.91%vs.Russell 1000 Value Index:+3.27%). annualized rate of 2.1%, Consumer spending rose 3.5%, and the unemployment rate fell to 4.7%.High yield bonds performed Continued on pg.2 best; the Bloomberg Barclays High Yield Index Limbed Profits Trump Populism 2.70%for the quarter. Continued on pg.4 NON-U.S. EQUITY I Irina Sushch A Flurry of political skirmishes and uneven growth in Asia failed to deter non-U.S. equity investors, and the "risk-on"theme of Separation Anxiety last year Continued into 2017. The weak U.S. dollar also bol- NON.U.S. FIXED INCOME I Kyle Fekete stered overseas returns for U.S.investors. Sovereign debt performed well in the first quarter amid politi- The MSCI ACWI ex USA Index jumped 7.86% during the cal uncertainty about the future of the European Union (EU). quarter. All of its sectors were in the black, with the excep- Emerging market debt outperformed developed market debt tion of Energy (-0.91%), which was hurt by falling oil prices. for the third straight quarter as the JPM Gall Global Economically sensitive sectors led the pack: Information Diversified Index advanced 6.50% versus the Bloomberg Technology Contributed 14.59% and Industrials added 9.48%. Barclays Global Aggregate ex-US Index's 2.48% gain. Defensive and cyclical sectors such as Telecommunications Returns were bolstered by the U.S.dollar's drop against most (+5.98%)and Real Estate(+6.72%)lagged. currencies. Continued an pg.3 Continued on pg.5 Knowledge.Experience.Integrity. U.S. Equity: Steady as She Goes Rolling One-Year Relative Returns (vs.Russell 1000) Continued from pg. 1 e Russell 1000 GroMh a Russell 1000 Value a Russell 1000 any____ The broader U.S. economy reflected the market's optimism, and to no one's surprise the Fed raised rates a quarter-point 20%----ke�n - - - - - - - - - - - - - - - - --- - in mid-March. Wages continued to rise, consumer confidence was up,inflation moved closer to the 2%target,and unemploy- 1wc__ - - - - - - - - - - - - - - - - - - - . ment fell to 4.7%.Yet some headwinds persisted in the U.S., D% with slowing GDP growth (the fourth quarter trailed the third, 2.1% vs. 3.5%), and significant issues abroad: elections and -10%yvit'l Brexit in Europe,the Syrian war in the Middle East, and South -zD% _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___- Korea's presidential impeachment in Asia. Valuations in the U.S. remain high by various measures, but investors appear a0% ..l"'I"'I"'I"'I"'I"'I"'I"'I'"I"'I"'I"'I"'I'^I"'I"'I"'I"'I^•I• unfazed—for now. 97N Ba 00 01 02 os 04 05 N 07 09 09 1D 11 12 13 14 15 1617 Source:Russell lnv vent Group Technology shares were especially strong; the FANG stocks— Facebook, Amazon, Netflix, and Google—hit record highs Reflecting the reversal in investor preference, the best-per- during the quarter. (Technically it should be the FANA stocks forming sectors in the S&P 500 Index during the quarter were because Google is officially Alphabet—but FANG sounds bet- growth-oriented;Technology(+12.57%)was No.1,followed by ter!) Micro and small cap companies ran out of steam after a Consumer Discretionary(+8.45%),and Health Care(+8.37%). strong 2016, while mid and large cap stocks charged ahead After leading in the fourth quarter, Financials (+2.53%) and (Russell Microcap Index: +0,38%, Russell 2000 Index: Energy(-6.68%)trailed the broad market in the first.Both Health +2.47%, Russell Midcap Index: +5.15%, and Russell 1000 Care and Financials traded on President Donald Tramp's failure Index: +6.03%). Value lost its lead over growth in all capital- to amend the Affordable Care Act—Health Care stocks gained izations(Russell 2000 Value Index:-0.13%vs. Russell 2000 on the certainty of the status quo and Financials dropped on Growth Index: +5.35%). The dispersion in style returns was fear the administration may fall short on deregulation and tax broad across market capitalizations. reform as well.Energy was the worst-performing sector during the quarter as last year's agreement by the Organization of the Petroleum Exporting Countries(OPEC)has not reduced fears of oversupply or meaningfully increased the price of oil. Quarterly Performance of Select Sectors •Russell 1000 •Russel 20M As the U.S. equity market powered on, valuations across indi- ces traded at historically high levels—the S&P 500 Index NTM (next 12 months) P/E was 17.5x versus the 25-year average I of 14x as of March 31, 2017. Correlation (measured by S&P MEI 1 gxa I 500 stocks)ended the quarter below average and at levels not N seen in 10 years, a positive for active management. Volatility (as measured by the CBOE Market Volatility Index, or VIX) also tracked below its average, seemingly unfazed by geopo- litical uncertainty. Technology HealM Can Utilities Energy Souse:Russell li stment Gr., 2 1 Callan Non-U.S. Equity: Profits Trump Populism Rolling One-Year Relative Returns Continued from pg. 1 (vs.MSCI World ex USA,USD hedged) e MSCI Pacific a MSCI Europe a MSCI Ward ex USA Helped by a weaker dollar,emerging markets(MSCI Emerging 40%- - - - - - - - - - - - - ----------------' Markets Index: +11.44%)outperformed their developed peers 30% (MSCI World ex USA Index: +6.81% and MSCI EAFE Index: 20% +7.25%). The MSCI ACWI ex USA Growth Index (+9.13%) 10%__ resumed dominance over the MSCI ACWI ex USA Value Index (+6.68%). Small cap stocks also performed well (MSCI ACWI ex USA Small Cap Index:+8.78%). -20% -30% Politics continued to roil Europe. Most notably, British Prime "00%. 9". .. 1,'1"'I"'I"'I...1'..1... ,...1" 1...I"'1'..1...,..'I' 97M 99 So 01 02 03 04 05 06 07 N 09 10 11 12 13 14 15 1617 Minister Theresa May triggered Article 50 of the Lisbon Treaty soama:Msa on March 29,giving the U.K.two years to negotiate an exit from the European Union.The negotiations are likely to be arduous, In Southeast Asia and the Pacific, Japan's economy grew at particularly conceming trade and immigration. France's presi- a meager(yet notably positive) annualized 1.2% in the fourth dential elections will be held in April and May. Marine Le Pen, quarter. Industdal output and inflation rose and unemployment the far right contender,has consistently led in the polls, in step fell. But the stranger yen (+5%)dampened exporters' returns, with the global rise of nationalist populist movements. On the and Japan ended the quarter up just 4.49%;only New Zealand other hand,the economic outlook brightened in the sure zone. posted worse returns (+1.95%) in the region, owing to a fal- Inflation hit a four-year high (2%) in February. Fourth quarter taring Materials sector (-19.33%). Singapore (+13.46%) and GDP was 1.7% (year-over-year) and positive in each coun- try except Greece (-1.2%). The MSCI Europe Index jumped Hong Kong(tralia dv fared best,thanks to thriving real estate markets.Australia advanced 10.98%, propped up by currency 7.44% in the first quarter; all of the countries posted positive strength.The MSCI Pacific Index was up 6.92% and exclud- retums.Spain(+14.76%)and the Netherlands(+11.33%)con- ing Japan jumped even more (MSCI Pacific ex Japan Index: tributed most, while Ireland (+3.75%) and Norway (+1.43%) +11 76%). lagged. Information Technology (+12.89%) and Industrials (+10.39%) rallied, while Energy stocks (-3.10%) brought up Emerging market returns were boosted by a weaker dollar,am- the rear. nomic growth in China,and rising industrial metal prices. India (+17.12%)and South Korea (+16.85%)were the top perform- ers.The party of India's prime minister, Narendra Modi,won a key regional election despite an abrupt currency recall last year, Regional Quarterly Performance (U.S.Dollar) and the central bank predicted strong economic growth for the china 12.93% next 12 months. Copious gains in IT stocks bolstered Korean MSCI Pacific ex Japan 1176% returns. China, which makes up more than a quarter of the MSCI Emeging Markets 11A4% MSCI Emerging Markets Index, also experienced growth in its Mscl Acwl ex use-7.86% IT sector, as well as in Manufacturing and Real Estate. Fourth quarter GDP came in at 6.8%,and China ended the quarter up MSCI Eumpe-7. % 12.93%. Mexico was among the top performers(+16.03%)as MSCI word ex USA-6.91% the peso rebounded 9%.Russia(4.61%)and Greece(-3.49%) MScl Japan-"9% were the region's poorest performers.Russia was hurt by falling Sooma.MSCI oil prices,and Greece by negative GDP growth. Knowledge.Experience.Integrity. 1 3 U.S. Fixed Income: Up, Up, and Away an excess return of 85 bps and outperformed AAA securities Continued from pg. 1 by 70 bps. Investment-grade and ABS spreads tightened by 5 The Fed increased rates by 25 basis points in March, to a bps and rose 1.22%and 0.54%,respectively.Mortgage-backed securities (MSS) (+0.47%) underperformed duration-matched range of 0.75% — 1.00%, as U.S. economic indicators contin- Treasuries by 17 bps.Commercial mortgage-backed securities ued to signal growth;two additional hikes are expelled over the rest of the year. The Treasury yield curve flattened during the (CMBS) rose 0.86%for the quarter and benefited from strong demand. quarter as short-term Treasuries rose while longer-term issues fell. Despite hitting an infra-quarter high of 2.62%, the bench- Municipal bonds also delivered a strong quarter as expectations mark 10-year Treasury note ended the quarter at 2.39%,5 bps for U.S. tax reform fell and new issuance remained light. The lower than the yield at the end of 2016. For the quarter, U.S. Bloomberg Barclays Municipal Bond Index jumped 1.58%. Treasuries increased 0.67%; long Treasuries(+1.40%)outper- formed intermediate ones (+0.54%). TIPS were up 1.26% as expectations for future inflation rose.At the end of the quarter, Historical 10-Year Yields the 10-year breakeven inflation rate, a market-based gauge of investors'expectations for future inflation,stood at 1.97%. •U.smxaar Taxau,yYard 010-YearTIP3 Yield 81Breeke rIr6alion Role 6% All fixed income sectors reported returns in the black as both s% the corporate credit market and the structured-debt market ben- 4% efited from strong investor demand;the Bloomberg Barclays 3% _ _ _ _ U.S. Aggregate Bond Index rose 0.82%. Issuance in the investment-grade primary market totaled $390 billion, easily 2% surpassing the prior record of$357 billion in the second quarter 1% - - - - - - ----------------- . of 2015. Overall, spreads tightened and investor appetite for o% bonds remained strong despite the headwind of higher rates. High yield spreads over comparable Treasuries tightened by 26 -1% ,071 o„e I oe, I ,10 i l ,n, , l ,tz, , l ,13, , l to, , l , , l „ 1s 16' In, bps and delivered the strongest return.Lower-rated bonds out- source:Bloomberg performed higher-rated issues; BBB-mted securities generated U.S.Treasury Yleld Curves Fixed Income Index Quarterly Returns Mercb 31,2017 •necernber 31,M16 •March 31,2016 4% Bloomberg Bardays Aggregate _0.82% Bloomberg Barclays Treasury _0.67% Bloomberg Bardays Agendes _0.76% 3% - - - ------- BloOmb¢rg Barclays CUSS —U.86% 'INBloomberg Barcl _ ays Ass -O.W% 2% ---- __ _ _ _ _ _ _ _ ___________ Bloomberg Barclays MBS -0.47% Bloomber0 Barclays Credit —1.30% Slaomberg Barda,a Co,High Yield —2,70% 1% Bloomberg Barclays US TIPS —1.26% Soame'.Bloombeig Barclays 0% 1 1 . . 0 5 10 15 20 25 30 Maturity(Years) Source:Bloomberg 4 1 Callan Non-U.S. Fixed Income:Separation Anxiety Emerging Spreads Over Developed (By Region) Continued from pg. 1 e Emegin0 Mran.s a Emerging EME4,as,,...bis nmai a Emerging Asia 8% European sovereign bond yields rose in the midst of critical elections and debate over the future of the EU. The safe- 6% _ haven German 10-year bond climbed 12 basis points to 0.33%, steepening the yield curve to its highest since 2014. 4% ____ _____ _____ _ _ _ _ _ France's 10-year bonds sold off in the middle of the quar- ter as the markets priced in the risk of a potential victory by 2% presidential candidate Marine Le Pen,who wants the French to vote on whether to leave the EU.The Italian 10-year yield o% ' ' ' . ' ' . 13 13 14 15 18 1] jumped 50 bps to 2.32%as an air of political risk also loomed spproa:eippmbam over Europe's third-largest economy. The European Central Bank Continued its stimulus efforts, extending its bond-buying program until December 2017 10-Year Global Government Bond Yields and maintaining interest rates near record lows. Yet there 0U3.Treasury 0Gaimany 4,U.K. •Canada •Japan was renewed Confidence in the region's economic health as 6% a result of solid manufacturing data, strength in the region's 5% labor market, and encouraging inflation news. The sure 4% strengthened against the U.S. dollar, providing some head- 3%---- wind to the hedged Bloomberg Barclays Global Aggregate 2%_____________ ex-US Index,which increased only slightly(+0.06%). In the Asia-Pacific region, Japan's 10-year yield edged up 2 0% bps to 0.07%, in line with the Bank of Japan's goal of main- -1%"m 0 1 "e' i "Ba' 1 "1o' 1 n 1Y i "13' i "14' i "Is, i 1"5' iv' taining its yield at approximately zero. The Reserve Bank of Australia left rates unchanged despite rapid growth in Change In 10-Year Yields from 4016 to 1017 household debt.The Australian 10-year yield declined 6 bps .s bps- U.s.Treasury to 2.70%. Both Countries' currencies advanced roughly 5% Germany - lxbpe against the U.S.dollar. .lobp.- U.K. -10 bps- Canada Emerging markets performed quite well. The U.S. dollar- Japan = 2bps denominated JPM EMBI Global Diversified Index rose Sopn,,Bmorabera 3.87%, and only three countries out of 65 posted negative returns for the quarter. Mexice, the most heavily weighted in the Index, was the strongest performer(+5.46%). Venezuela was the worst, falling 1.29%. Emerging market currencies posted the strongest return (+15.60%). Maxim (+13.60%) also generally appreciated versus the U.S. dollar, account- and Brazil (+9.69%) were also top performers, while Turkey ing for the JPM GBI-EM Global Diversified Index's 6.50% (-0.68%)was the only country to deliver a negative return in rise.Argentina reentered the Index in February, and its debt the Index. Knowledge.Experience.Integrity. 1 5 Active Management Overview Market Overview Active Management vs Index Returns Market Overview The charts below illustrate the range of returns across managers in Callan's Separate Account database over the most recent one quarter and one year time periods. The database is broken down by asset class to illustrate the difference in returns across those asset classes.An appropriate index is also shown for each asset class for comparison purposes.As an example, the first bar in the upper chart illustrates the range of returns for domestic equity managers over the last quarter. The triangle represents the S&P 500 return. The number next to the triangle represents the ranking of the S&P 500 in the Large Cap Equity manager database. Range of Separate Account Manager Returns by Asset Class One Quarter Ended March 31,2017 12% 10% 8% (70)� E 6% (55) 4%- r 2% (54)• 194) 82)� Eid 63) 0% (2%) large Cep Small Cap Non-US Domestic Nan-US Real EquNy Equity Equity Fixed Income Fixed Income Estate V. s vs vs 5&p No Russell 2000 MSCI EAFE Blmbg Aggr Bd Citi NomUS Govt NCREIF Index 10ih Percantil. 9.96 8.16 9.E0 1,32 4.96 3.92 251 Percentile 8.56 Us 8.72 1.08 393 2.87 Median 6,50 305 7.90 0,95 353 1,88 75ih Percentile 4.43 0]] 7.03 0,83 2.78 1,19 90ih Percentile 3.25 (007) 6.27 0,80 2.37 0.31 Index • 6,07 247 7.25 0,82 202 1,55 Range of Separate Account Manager Returns by Asset Class One Year Ended March 31,2017 35% 30% 25% 91)� 20% 9) 15% X. K 10% 63) 5% 0% (5%) 82) (10%) Large Cep Small Cap NomUS Domestic Non-Us Real Evcl Equity Equity Fixed Income Fixed Income Estate Sap50D Russell 2000 MSCI EAFE Blmbg Aggr Bd Giti Non USGovt NCREIF Index 10M Percentile U M 29.98 16.13 2.5] 6.91 14.2] 25ih Percentile 1951. 2689 13.83 1,98 1.03 11.19 Median 17.13 24.10 11.91 1.14 (248) 7.90 75th Percentile IN 2104 9.31 0.64 4.64 5.21 With Percentile 12.52 17.78 6.42 0.34 5.19 (1.19) Callan • 17.17 26.22 11.67 c. (4.80) 7.27 CallanOran,,e County Sanitation District e Domestic Fixed Income Active Management Overview U.S.Treasury yields were relatively range-bound in the first quarter despite a Fed hike in March.The 10-year U.S.Treasury hit an intra-quarter high of 2.62% on March 13 and closed the quarter at 2.40%, five basis points lower than at year-end. TIPS performed relatively well as expectations for future inflation climbed. The 10-year breakeven spread (the difference between nominal and real yields)was 197 bps as of quarter-end, and the Bloomberg Barclays TIPS Index gained 1.3%for the quarter. The Bloomberg Barclays Aggregate Index earned 0.8%; within the Index, corporate bonds outperformed like-duration Treasuries,with BBB-rated credit(+1.7%) posting the strongest returns. Mortgages underperformed Treasuries on a duration-adjusted basis,as expectations that the Fed would begin to trim its reinvestment in the sector weighed on the market. The Bloomberg Barclays High Yield Index gained 2.7%, with lower-rated bonds again outperforming higher-rated issues. Separate Account Style Group Median Returns for Quarter Ended March 31,2017 earning Aggregate: 0.82% 3.5% Blmbg High Yield: 2.70% Blmbg Long GovlCred 1.58% 3.0% 2.5% -------------------------------- 2.55 E 2.0% -- -------------------------------- 119 N ---------------------- .27 1.08 1.0% --------------1195- 0.81 0.5% ----JL4Z— -- 0.0% Defensive Interned core Core Plus Extended Bank High Vleld Band Maturity Loans Separate Account Style Group Median Returns for One Year Ended March 31,2017 Birrng Aggregate. om% 20% Blmbg High Yield 16.39% Biri Long GovlCred 0.98% 15% ----------------------------------148E---- as C � 10% m 8.93 5% 3.15 80 1.02 073 1.14 0% Defensive Intermetl Care Core Plus Extended Bank High Ylek ,,11,,M Band Maturity Loan. L.A3 r charcg County Sanitation District g Asset Allocation Investment Manager Asset Allocation The table below contrasts the distribution of assets across the Fund's investment managers as of March 31, 2017, with the distribution as of December 31,2016.The change in asset distribution is broken down into the dollar change due to Net New Investment and the dollar change due to Investment Return. Asset Distribution Across Investment Managers March 31,2017 December 31,2016 Market Value Weight Net New Inv. Inv.Return Market Value Weight Domestic Filed Income long Term Operating Fund' 318.418,266 78,89% 0 1.631.030 316.787.228 73,70% liquid ODeratina Monies' 85.180A34 21.11% (28,000,000) 135.734 113,044,701 26.30% Total Fund 0403,598,701 100.0% $(18,000,000) 91,788,n2 $429.01.929 100.0% 'Chandler replaced PIMCO during the 4th Quarter of 2014.Assets were transferred In+lnd as of 1001I2014. Callancoerce county Sandation DisNct „ Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended March 31, 2017. Negative retums are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended March 31,2017 Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating FundA 0.51% 0.54% 1.40% 1.17% 1.98% Chandler 0.51% 0.54% - - Blmbg Govl/Cred 1-5 Year Idx 0.57% 0.52% 1.38% 1.30% 1.86% ML 1-5 Govt/Corp 0.56% 0.56% 1.43% 1.38% 1.92% Liquid Operating MoniesA 0.14% 0.45% 0.30% 0.24% 0.23% Chandler 0.14% 0.45% - - - Citigroup 3-Month Treasury Bill 0.12% 0,34% 0.15% 0.11% 0,11% Total Fund 0.43% 0.35% 1.16% 1.00% 1.65% Target* 0,47% 0,52% 1.17% 1,12% 1,56% Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan Oran,County Santleann Distnd 12 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended March 31, 2017. Negative retums are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended March 31,2017 Last Last Last 10 15 21-1/2 Years Years Years Domestic Fixed Income Long Term Operating FundA 3.15% 3.53% 4.44% Blmbg GovUCred 1-5 Year Idz 2.95% 3.33% 4.25% ML 1-5 Govt/Corp 2.98% 3.34% 4.28% Liquid Operating Monies^ 0.85% 1.48% 2.67% Citigroup 3-Month Treasury Bill 0.61% 1.24% 2.35% Total Fund 2.71% 3.18% 4.17% Target` 2.51% 2.92% 3.90% Current Quarter Target=80.0%MIL 1-5 Govt/Corp and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan Onar,County Sandarinn Distnd 19 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 12/2016- 3/2017 2016 2015 2014 2013 Domestic Fixed Income Long Term Operating Fund^ 0.51% 1.58% 0.85% 1.98% (1.77%) Chandler 0.51% 1,58% 0.85% - - Blmbg Govl/Cred 1-5 Year Idx 0.57% 1.56% 0.97% 1.42% 0.28% ML 1-5 Govt/Com 0.56% 1.62% 1.05% 1.51% 0.32% Liquid Operating Monies^ 0.14% 0.47% 0.22% 0.09% 0.13% Chandler 0.14% 0.47% 0.22% - Citiarouo 3-Month Treasury Bill 0.12% 0.27% 0.03% 0.03% 0.05% Total Fund 0.43% 1.15% 0.80% 1.73% (1.49%) Target* 0.47% 1.35% 0.85% 1.21% 0.26% *Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%3mo T-Bills. Callan were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan Orarxre County Santlerinn DisNtl 14 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 12/2016- 3/2017 2016 2015 2014 2013 Domestic Fixed Income Long Term Operating Fund^ 0.51% 1.58% 0.85% 1.98% (1.77%) Blmbg Govt/Cred 1-5 Year Idx 0.57% 1.56% 0.97% 1.42% 0,28% ML1-5 Govt/Corp 0.56% 1.62% 1.05% 1.51% 0.32% Liquid Operating Monies- 0.14% 0,47% 0.22% 0.09% 0,13% Ciligroup 3-Month Treasury Bill 0.12% 0.27% 0.03% 0.03% 0.05% Total Fund 0.43% 1.15% 0.80% 1.73% (1.49%) Target` 0.47% 1.35% 0.85% 1.21% 0.26% Current Quarter Target=80.0%MIL 1-5 Govt/Corp and 20.0%3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/112014.Previous performance reflects PIMCO. Callan 0mr,,e County SantlerinnDist c ,s Asset Class Risk and Return The charts below show the seven year annualized risk and return for each asset class component of the Total Fund.The first graph contrasts these values with those of the appropriate index for each asset class.The second chart contrasts them with the risk and return of the median portfolio in each of the appropriate CAI comparative databases. In each case, the crosshairs on the chart represent the return and risk of the Total Fund. Seven Year Annualized Risk vs Return Asset Classes vs Benchmark Indices 2.5% 2.0% 1.5% N K 1 0% 0.5% iLLLaWIIC7 0.0% 0.0% 02% 0.6% 0.6% 0.8% 1.0% 1.2% 1.6% 1.8% Standard Deviation Seven Year Annualized Risk vs Return Asset Classes vs Asset Class Median 2.0% 1.8% n% 1.2% 1.0% v 0.8% o6% 0.6% 0.2% 0.0% 0.0% 02% 0.4% 0.6% 0.8% 10% 1.2% 1.6% 1.6% /'�,, 1,, Standard Deviation Callan Omrr County Sandation Oistnd 16 Manager Analysis Chandler-Long Term Operating Fund Period Ended March 31, 2017 Investment Philosophy Chandler Asset Management's Short Term Bond strategy is driven by quantitative models and focuses on active duration management,sector selection and term structure.The strategy seeks to achieve consistent above-benchmark returns with low volatility relative to the style's performance benchmark. The firm has a unique focus on high quality fixed income management, and places risk control as a higher objective than return. Assets were transferred in kind to Chandler on 12/l/2014.Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Long Term Operating Fund's portfolio posted a 0.51%return Beginning Market Value $316,787,228 for the quarter placing it in the 34 percentile of the CAI Net New Investment $0 Defensive Fixed Income group for the quarter and in the 77 Investment Gains/(Losses) $1,631,038 percentile for the last year. • Long Term Operating Fund's portfolio underperformed the Ending Market Value $318,418,266 MIL 1-5 Govt/Corp by 0.04% for the quarter and underperformed the MIL 1-5 Govt/Corp for the year by 0.02%. Performance vs CAI Defensive Fixed Income(Gross) 6% 5% 4% 28)®BE2 3% )27)®BE2 3 2% ® (( ® � ®AE5 301®BE3 ) (( 447 H(5 3) BE4 91 B 4 1% ®A(3 6) B(7pp % Laat Qr Last Chandler Lasl3 Yrs Last 5Ym Last 7Ym LmA10Yra Last20.5Yrs Yr Inception I MP.mentlle oes 252 2,03 1,82 1,95 2.52 342 452 250,Percentile 056 161 1.64 L54 162 2.07 303 431 Median 0.47 102 1,31 1.27 1.25 1.69 2.62 4.00 75M Percentile 0.41 060 1,08 1.04 1.00 1.31 2.33 3.84 90M Percentile 033 030 0.94 0.95 086 1.19 2A0 370 Long Term Operating Fund *A 0.51 0.54 1,31 1.40 1.17 1.98 3.15 4.44 Blmb9 GoWOred 1-5 Year lux IN B 0.57 0.52 1,38 1.38 1.30 1.86 2.95 4.25 AL 1-5 GoWCorp a 0.56 056 143 1.43 1.38 1.92 2.98 4.28 CAI Defensive Fixed Income(Gross) Relative Return vs ML 1-5 Govt/Corp Annualized Seven Year Risk vs Return 2.0% 3.5% 30% E 2.5% E m 2.0% v 0.0% � 1s% 1.0% 1s%) os% 2010 2011 2012 2013 2014 2015 2016 17 00 0.5 1.0 1.5 2.0 Long Term Operating Fund Standard Deviation Callan Omm,e County sanitation Distnct 18 Long Term Operating Fund Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-adjusted and unadjusted basis.The first chart illustrates the manager's ranking over different periods versus the appropriate style group.The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last chart illustrates the manager's ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Chandler on 12M/2014. Previous performance reflects PIMCO. Performance vs CAI Defensive Fixed Income(Gross) 20% 15% 1B% (( 5� 1 1 5% e A B ] A ]®A 1 4"A1 17 Bl 072 B( 279 BI et 0% A ) (5%) (10%) 12116&W17 M16 2015 2014 2013 2012 2011 2010 2009 2003 101h Pemenule 0.68 2.82 1.18 1.50 1.20 4.66 2.]2 4.71 13.74 6.63 25th Pemenule 0.56 2.18 1.03 1.2] 0.80 2.On 2.28 4.02 8.60 5.64 Median 04] i56 090 1.11 0.65 181 tel 3.19 "1 3.88 75th Pemereis 041 1.19 0]6 08] 041 146 185 2]2 2.53 (0.1]j 90h PerceMile 0.33 1.03 0.64 0,70 0.31 0.92 1." 2.41 1,82 (3.4] Long Term Opemun9 Fund *A 0.51 1.58 085 1,98 (1,77) 3.06 4.59 442 5.52 5.37 elm GoWCred -5 Year ldx ■B 0.57 1.% 0.97 142 0.28 2.24 3.14 4.08 4.62 5.12 NIL 1-5 GOWCOP A 0.56 1.62 1.05 151 0.32 2.47 3.10 4.17 4.88 4.65 Cumulative and Quarterly Relative Return vs MIL 1-5 GoWCorp 6% 4% 2% of 0% N (6%) (8%) 20m 2008 20P3 2010 2011 2012 2013 2014 2015 2016 17 10 Long Tema Operating Fund E Blmbg GOWCred 1-5 Year Idx 0 CAI Defensive Fixed Inc Risk Adjusted Return Measures vs ML 1-5 GovVCorp Rankings Against CAI Defensive Fixed Income(Gross) Seven Years Ended March 31,2017 38 2.5 2.0 1.5 B�92` 1.0 IINA 9] 0.5 0 (0.5) A 95 Bpt) (1.0) (1.5) Alpha Sharpe Excess Return Ret10 Ratio 1 Olh Percentlla 1.14 2.20 0.65 25th Percenule 0.79 1.8] 0.19 Median 0.43 1.70 0.38 75th Percen118 0.24 1.4] 0.a] 9In Percentile 0.05 1.28 1.09 Longg Term Opecong Fund *A 0.1] 1.02 O.Ofi Blmbg GovVCred 1-5 Vear ltlx ■B 0.0] 1.23 (0.]9) Callan Orarcg County sanitation District 19 Long Term Operating Fund Bond Characteristics Analysis Summary Portfolio Characteristics This graph compares the managers portfolio characteristics with the range of characteristics for the portfolios which make up the manager's style group. This analysis illustrates whether the manager's Cunent holdings are Consistent with other managers employing the same style. Fixed Income Portfolio Characteristics Rankings Against CAI Defensive Fixed Income as of March 31,2017 35 3.0 (3)♦ (6) 25- �(13) 2.0 1.5 (35)�;(55) H(84) 1.0 0.5 0.0 (0.5) A-90 Stand. Coupon CA Duration 'it. Yield Rate convexity 101h Pementile 2.23 2.80 2.28 2.53 0.09 251h PercenNe 1.96 2.15 1.96 2.42 0.05 Median 1.84 1.97 1.66 2.07 0." 75th Percentile i 72 1.91 1.49 1.90 0,02 901h Pemen6le 1.fi0 i.fi9 1.35 1.35 (0.00) Long Term Operating Fund • 2.43 2.51 1.62 1.70 - elmbg Gov/Grad 1-5 Yr ♦ 2.78 2.91 1.85 2.22 pop Sector Allocation and Quality Ratings The first graph compares the managers sector allocation with the average allocation across all the members of the manager's style.The second graph compares the manager's weighted average quality rating with the range of quality ratings for the style. Sector Allocation Quality Ratings March 31,2017 vs CAI Defensive Fixed Income �os Tray US Tr, s----____sas___ AAA RMBS COry(IIKI 144A) M+ o (23) Other AA •(54) ASS AA- Tax-Exempt US Muni A+ CMOs Cash A Weighted Average Quality Rating Gov Related sun 10m Percentile AAA 251M1 Percentile AA CMBS Malian AA Satin Percentile AA, in A+ 0% 10% 20% 30% 60% 50% 60% 70% 80% Long Term Operating Fund CAI Defensive Fixed Inoame Long Term Operating Fund 0 AA Callan Gw/Cred 1-5 Yr Blmbg Gav/Cred 1-5 Yr ♦ AA+ Callan Grange County Sanitation Qistdct 20 Long Term Operating Fund Portfolio Characteristics Summary As of March 31, 2017 Portfolio Structure Comparison The charts below compare the structure of the portfolio to that of the index from the three perspectives that have the greatest influence on return. The first chart compares the two portfolios across sectors. The second chart compares the duration distribution.The last chart compares the distribution across quality ratings. Sector Allocation US Trsy US Trsy 30% 60% 1% ABS A11111111ftCM0 s )% Clher RUBS 12% 25% Tax-Exam US Muni V 4 Gov13eellated %% Cash con,(inc116dA) Corp 123%144A) 1% 27 % Long Term Operating Fund Blmbg Govt/Credit 1.5 Year Weighted Average: Duration Duration Distribution ■ Long Term 0,among Fund: 2.43 70% ■ Blmbg GOWC%dit l-S Year 2.78 0 60% ——————————Via- —————— —————— —————— —————— 0 ______ ______ o az.1 id ______ __ c g% ______ ______ ______ 0% 0.5 3A <1 1-3 35 5-0 7-10 NO Years Duration WelgMed Average: Duality Quality Distribution Long Term Oyemting Fund M 100% ■ Blmbg GOWCmdit l-S Year: AA+• p80% ______ ___ ___ __ ___ ___ ___ __ ___ ___ 68.8 65.5 L 60% JL�.;M-- M ___ ___ __ ___ ___ ______o 4 20% 10.911.0 T27 6.8 0% APA A BBB Be B CCC CC C 0 NIR Quality Rating Callan Oret6re County Sanitation Disend 21 Chandler-Liquid Operating Money Period Ended March 31, 2017 Investment Philosophy Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Liquid Operating Money Net's portfolio posted a 0,11% Beginning Market Value $113.044,701 return for the quarter placing it in the 38 percentile of the CAI Net New Investment $-28,000,000 Money Market Funds group for the quarter and in the 31 percentile for the last year. Investment Gains/(Losses) $135,734 • Liquid Operating Money Nefs portfolio underperformed the Ending Market Value $85,180,434 Citigroup 3-Month Treasury Bill by 0.02%for the quarter and underperformed the Citigroup 3-Month Treasury Bill for the year by 0.04%. Performance vs CAI Money Market Funds(Net) 2. % �(15 2.0% 9) 1.5% 1.0% 8)®(26 30) (38 27) (31 25) (22 24) (24 20) (2B 161 (22 00% Last Oa Last Chandler Last 3 Yrs Last 5Yrs Last 7 Yrs LBMIOYrs Last2o5Yrs Yr I.C.Mlon 10T Percentile 024 O80 043 0.33 0.22 0.19 085 259 25M Percentile 0.14 035 0.19 0.14 0.09 0.07 070 2.42 Msdian 0.08 rite 0.09 0.07 ou 0.03 0.61 2.26 75M Peroantlls 001 002 0.02 0,01 0,01 001 052 2.15 90T Perwntile 000 001 000 0,00 0,00 0W 044 199 Liquid Operating Money Net • 0.11 030 0,22 0,15 0.09 0.08 010 252 Ciligmup 3-Month Treasury Bill ♦ 0.12 034 0,19 0.15 0.11 0.11 0.61 2.35 Relative Returns vs CAI Money Market Funds(Net) Citigroup 3-Month Treasury Bill Annualized Seven Year Risk vs Return 0.10% 2 5% 008% _ 20% E 1s% y 0.02% _ __ __ __ - __ 1.0% s, 0.00% 0.s% 0.0% (0.04%) _ __ __ __ __ __ (0.06%) (0.5%) 2010 2011 2012 2013 2014 2015 2016 17 (0.5) 00 05 10 15 20 2.5 3.0 /'� ■Liquid operating Money NN Standard Deviation Callan Oran,e County Sanitation Oistdct 22 Liquid Operating Money Net Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-adjusted and unadjusted basis.The first chart illustrates the manager's ranking over different periods versus the appropriate style group.The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last chart illustrates the manager's ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Chandler on 12M/2014. Previous performance reflects PIMCO. Performance vs CAI Money Market Funds(Net) 3.5% 30% 2.6% 2.0% 1.5% 61 1.0% 0.5% 26 22 02 14 0.0% (0.5%) 121163I17 M16 2015 2014 2013 2012 2011 2010 2009 2008 101h PeroarNle 024 071 0.11 007 0.08 0.18 008 0.15 0.52 2.]] 25th PercznOle 0.14 028 003 002 0.02 003 002 005 0.20 2.46 Median 0.08 0.10 0.01 001 0.01 0.01 0.01 0.01 0.12 2.03 75th Pemendle 0.01 0.01 0.00 o rl 0.00 0.01 0.00 0.01 0.03 1.46 Mh Pertende 0.00 cW 000 000 0.00 000 000 run oci 1.08 Liquid Operating Money Net 01 0.11 0.32 0.07 (Orin (0.02) 0.02 ON 0.10 OA3 2.25 Citigrwp 3-MoMh Treasury Bill ♦ 0.12 0.27 0.03 003 0.05 0.07 0.08 0.13 0.16 1.80 Cumulative and Quarterly Relative Return vs Citigroup 3-Month Treasury Bill 1.4% 12% -- --- --- --- ----- ut 1.0% -- --- -- _ - --- --- --- ----- of y 04% 0.2% d o0% (0.2%) 0.4%) 0.6%) 2007 2008 2009 2010 2011 M12 2013 2014 2015 2016 17 Liquid opened,Money Net 0CAI Money Market Funda Risk Adjusted Return Measures vs Citigroup 3-Month Treasury BIII Rankings Against CAI Money Market Funds(Net) Seven Years Ended March 31,2017 10 0 1a) (20) (30) (40) (50)- 7 (e0) (70) Alpha SM1 rpe Excess Return Rad. Ratio 101h Pa.ndle 0.08 0.45 1.02 25th Pa.ndla (0.03) 10.95) 1.03 Median (0.07) 2.951 1.85 75th Peroanhle (0.10) (15.60) 2.08 901h Par ndle (0.11) (5].56) 2.61 /'� Liquid Operating Money Net • MN) (0.63) (0.61) Callan l Orercg County Sendation0istrid 21 Callan Research/Education CALLAN Callan INSTITUTE 1st Quarter 2017 Education Research and Educational Programs The Callan Institute provides both research to update clients on the latest industry trends and carefully structured educational programs to enhance the knowledge of industry professionals.Visit www.callan.condlibrary to see all of our publications,and www.callan.com/blog to view our blog"Perspectives,"For more information contact Anna West at 415.974,5060/institute@callan.mm. New Research from Callan's Experts Smart Beta Is the Gateway Drug to Factor Investing I In this best to worst performance for each calendar year. The Collection paper,a reprint from the Journal of Portfolio Management's spe- includes 10 additional versions,such as the indices relative to in0a- cial issue on Factor Investing,author Eugene Podkaminer, CFA, tion,real estate,and hedge fund sub-strategies. of Callan's Capital Markets Research group describes the con- nection between alternative indices and more sophisticated risk Periodicals premia strategies. Real Assets Reporter, Winter/Spring 2017 1 Avery Robinson, 2017 National Conference: 'It's Private' I A summary of "It's CAIA,explores how we developed our Real Estate Indicators.We Private: Real Estate Debt and Middle Market Direct Lending; a also cover the latest on the real estate market, and share charts presentation from Callan experts Kristin Bradbury,Alex Browning, and tables on the long-term performance of various real assets. and Jay Nayak. Private Markets Trends,Winter 2017 1 Gary Robertson provides Capital Market Projections for 2017-2026 1 Callan prepares an overview of the environment for private equity In 2016 and a look capital market projections annually to help guide clients with their ahead at 2017.He sees continued liquidity in the private equity mar- long-term strategic planning.We publish three pieces authored by ket,and writes that distributions will continue to benefit investors. the team that creates them:Jay Kloepfer,John Pitons,CFA,CAIA, Hedge Fund Monitor,4th Quarter 20161 Jim McKee provides a and Jim Van Heuit. A white paper delves into the process and view of the hedge fund industry and detailed quarterly performance. thinking behind the 2017 figures;a Manifesto outlines the reasons This quarter's cover story:"Alternative Facts and the Evolving Role that Callan produces its annual capital market projections and the of Hedge Funds." rigorous process behind it;and a"charticle°(chart+article)sum- marizes key figures from Callan's 2017 capital market projections. DC observer, tat Quarter 2017 1 Lod Lucas discusses the best approach to crafting,implementing,and maintaining an investment It's a(Fiduciary)Trapl But You Don't Have to Fall In I Defined policy statement for defined contribution plans. contribution (DC) plan sponsors often worry about landing in hot water for doing the wrong thing. However, many fiduciary issues Market Pulse Flipbook,Fourth Quarter 20161 Aquarterly market crop up because plan sponsors have failed to take action.Author reference guide covering investment and fund sponsor trends in Lori Lucas, CFA, Callan's Defined Contribution Practice Leader, the U.S. economy, U.S. and non-U.S. equities and fixed income, lists eight potential fiduciary traps and ways for plan sponsors to alternatives,and defined contribution. avoid falling into them in 2017. Capital Market Review,4th Quarter 20161 A quarterly macroeco- The Callan Periodic Table of Investment Returns(Key Indices: nomic newsletter providing thoughtful insights on the economy and 1997-2016) and Collection I The Periodic Table of Investment recent performance in equity, fixed income, alternatives, interna- Retums depicts annual returns for 10 asset classes, ranked from tional,real estate,and other capital markets. The Center for Investment Training Events Educational Sessions Miss out on a Callan conference or workshop? Event summa- The Center for Investment Training, better known as the -Callan des and speakers presentations are available on our websile: College;provides a foundation of knowledge for industry profes- https:/An ..callan.com/education/Cil/ sionals who are involved in the investment decision-making pro. 'Why Diversify' cess.It was founded in 1994 to provide clients and non-clients alike with basic-to intermediate-level instruction.Our next sessions are: Our June Regional Workshops,June 27 in Atlanta and June 29 in San Francisco, will focus on diversification, which has turned Introduction to Investments out to be very expensive for U.S.-based investors, especially San Francisco,July 25-26,2017 since the Global Financial Crisis.In this workshop,Callan experts Chicago, October 24-25,2017 Mark Andersen, Jay Kloepfer, and Brian Smith analyze diversifi- This program familiarizes fund sponsor trustees, staff, and asset cation from multiple angles, answering the questions of whether management advisors with basic investment theory,terminology, investors erred in adopting diversified portfolios over the last 30 and practices. It lasts one-and-a-half days and is designed for in- years,and what investors should do now. dividuals who have less than two years of experience with asset. Also mark your calendars for our October Regional Workshops, management oversight and/or support responsibilities.Tuition for October 24 in New York and October 26 in Chicago. the Introductory "Callan College" session is $2,350 per person. Tuition includes instruction, all materials, breakfast and lunch on For more Information about events, please contact Barb each day,and dinner on the first evening with the Instructors. Gerraty:415.274.3093/gerraty@callan.com Customized Sessions The "Callan College" is equipped to customize a curriculum to meet the training and educational needs of a specific organization. These tailored sessions range from basic to advanced and can take place anywhere even at your office. Learn more at https://www.callan.com/education/college/or contact Kathleen Curdle:415.274.30291 cunnie@callan.com Education: By the Numbers 500 Attendees(on average)of the 50+ Unique pieces of research the Institutes annual National Conference Institute generates each year 3 500 Total attendees of the'Callan 1980 Year the Callan Institute College since 1994 was founded "We think the best way to learn something is to teach it. Entrusting client education to our consultants and specialists ensures that they have a total command of their subject matter. This is one reason why education and research have been cornerstones of our firm for more than 40 years:" Ron Peyton,Chairman and CEO Callan 9 @CallanAssoc ID Callan Associates Definitions Risk/Reward Statistics The risk statistics used in this report examine performance characteristics of a manager or a portfolio relative to a benchmark (market indicator) which assumes to represent overall movements in the asset class being considered. The main unit of analysis is the excess return, which is the portfolio return minus the return on a risk free asset (3 month T-Bill). Alpha measures a portfolio's return in excess of the market return adjusted for disk. It is a measure of the managers contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk which was taken for that level of market exposure. Beta measures the sensitivity of rates of portfolio returns to movements in the market index. A portfolio's beta measures the expected change in return per 1% change in the return on the market. If a beta of a portfolio is 1.5,a 1 percent increase in the return on the market will result,on average, in a 1.5 percent increase in the return on the portfolio. The converse would also be true. Downside Risk stems from the desire to differentiate between "good risk" (upside volatility) and "bad risk" (downside volatility). Whereas standard deviation punishes both upside and downside volatility, downside risk measures only the standard deviation of returns below the target. Returns above the target are assigned a deviation of zero. Both the frequency and magnitude of underperformance affect the amount of downside risk. Excess Return Ratio is a measure of risk adjusted relative return. This ratio captures the amount of active management performance (value added relative to an index) per unit of active management risk (tracking error against the index.) It is calculated by dividing the managers annualized cumulative excess return relative to the index by the standard deviation of the individual quarterly excess returns. The Excess Return Ratio can be interpreted as the manager's active riskireward tradeoff for diverging from the index when the index is mandated to be the"riskless"market position. Information Ratio measures the manager's market risk-adjusted excess return per unit of residual risk relative to a benchmark. It is computed by dividing alpha by the residual risk over a given time period. Assuming all other factors being equal, managers with lower residual risk achieve higher values in the information ratio. Managers with higher information ratios will add value relative to the benchmark more reliably and consistently. R-Squared indicates the extent to which the variability of the portfolio returns are explained by market action. It can also be thought of as measuring the diversification relative to the appropriate benchmark. An r-squared value of.75 indicates that 75% of the fluctuation in a portfolio return is explained by market action. An r-squared of 1.0 indicates that a portfolio's returns are entirely related to the market and it is not influenced by other factors. An r-squared of zero indicates that no relationship exists between the portfolio's return and the market. Relative Standard Deviation is a simple measure of a managers risk(volatility)relative to a benchmark. It is calculated by dividing the manager's standard deviation of returns by the benchmark's standard deviation of returns. A relative standard deviation of 1.20,for example, means the manager has exhibited 20% more risk than the benchmark over that time period. A ratio of .80 would imply 20% less risk. This ratio is especially useful when analyzing the risk of investment grade fixed-income products where actual historical durations are not available. By using this relative risk measure over rolling time periods one can illustrate the "implied" historical duration patterns of the portfolio versus the benchmark. Residual Portfolio Risk is the unsystematic risk of a fund,the portion of the total risk unique to the fund(manager)itself and not related to the overall market. This reflects the"bets"which the manager places in that particular asset market. These bets may reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager considers a good investment opportunity. Diversification of the portfolio will reduce or eliminate the residual risk of that portfolio. Callan 28 Risk/Reward Statistics Sharpe Ratio is a commonly used measure of risk-adjusted return. It is calculated by subtracting the "risk-free" return (usually 3 Month Treasury Bill)from the portfolio return and dividing the resulting"excess return" by the portfolio's risk level (standard deviation).The result is a measure of return gained per unit of risk taken. Sortino Ratio is a downside risk-adjusted measure of value-added. It measures excess return over a benchmark divided by downside risk. The natural appeal is that it identifies value-added per unit of truly bad risk. The danger of interpretation, however, lies in these two areas: (1)the statistical significance of the denominator,and (2) its reliance on the persistence of skewness in return distributions. Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of the observations from their sample mean. Standard deviation is used as an estimate of risk since it measures how wide the range of returns typically is. The wider the typical range of returns,the higher the standard deviation of returns,and the higher the portfolio risk. If returns are normally distributed (ie. has a bell shaped curve distribution) then approximately 2/3 of the returns would occur within plus or minus one standard deviation from the sample mean. Total Portfolio Risk is a measure of the volatility of the quarterly excess returns of an asset. Total risk is composed of two measures of risk: market(non-diversifiable or systematic)risk and residual(diversifiable or unsystematic) risk. The purpose of portfolio diversification is to reduce the residual disk of the portfolio. Tracking Error is a statistical measure of a portfolio's risk relative to an index. It reflects the standard deviation of a portfolio's individual quarterly or monthly returns from the index's returns. Typically,the lower the Tracking Error, the more "Index-like"the portfolio. Traynor Ratio represents the portfolio's average excess return over a specified period divided by the beta relative to its benchmark over that same period. This measure reflects the reward over the risk-free rate relative to the systematic risk assumed. Note:Alpha,Total Risk,and Residual Risk are annualized. Callan 29 Fixed Income Portfolio Characteristics All Portfolio Characteristics are derived by first calculating the characteristics for each security, and then calculating the market value weighted average of these values for the portfolio. Allocation by Sector- Sector allocation is one of the tools which managers often use to add value without impacting the duration of the portfolio. The sector weights exhibit can be used to contrast a portfolio's weights with those of the index to identity any significant sector bets. Average Coupon-The average coupon is the market value weighted average coupon of all securities in the portfolio. The total portfolio coupon payments per year are divided by the total portfolio par value. Average Moody's Rating for Total Portfolio- A measure of the credit quality as determined by the individual security ratings. The ratings for each security, from Moody's Investor Service, are compiled into a composite rating for the whole portfolio. Quality symbols range from Aaa+ (highest investment quality-lowest credit risk)to C (lowest investment quality- highest credit risk). Average Option Adjusted(Effective)Convexity-Convexity is a measure of the portfolio's exposure to interest rate risk. It is a measure of how much the duration of the portfolio will change given a change in interest rates. Generally,securities with negative convexities are considered to be risky in that changes in interest rates will result in disadvantageous changes in duration. When a security's duration changes it indicates that the stream of expected future cash-flows has changed, generally having a significant impact on the value of the security. The option adjusted convexity for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Option Adjusted(Effective)Duration- Duration is one measure of the portfolio's exposure to interest rate risk. Generally, the higher a portfolio's duration, the more that its value will change in response to interest rate changes. The option adjusted duration for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Price-The average price is equal to the portfolio market value divided by the number of securities in the portfolio. Portfolios with an average price above par will tend to generate more current income than those with an average price below par. Average Years to Expected Maturity-This is a measure of the market-value-weighted average of the years to expected maturity across all of the securities in the portfolio. Expected years to maturity takes into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Years to Stated Maturity- The average years to stated maturity is the market value weighted average time to stated maturity for all securities in the portfolio. This measure does not take into account imbedded options, sinking fund paydowns,or prepayments. Current Yield-The current yield is the current annual income generated by the total portfolio market value. It is equal to the total portfolio coupon payments per year divided by the current total portfolio market value. Callan 30 Fixed Income Portfolio Characteristics Duration Dispersion- Duration dispersion is the market-value weighted standard deviation of the portfolio's individual security durations around the total portfolio duration. The higher the dispersion, the more variable the security durations relative to the total portfolio duration ('barbellness"), and the smaller the dispersion, the more concentrated the holdings' durations around the overall portfolio's ('bulletness"). The purpose of this statistic is to gauge the 'bulletness' or 'barbellness'of a portfolio relative to its total duration and to that of its benchmark index. Effective Yield-The effective yield is the actual total annualized return that would be realized if all securities in the portfolio were held to their expected maturities. Effective yield is calculated as the internal rate of return, using the current market value and all expected future interest and principal cash flows. This measure incorporates sinking fund paydowns,expected mortgage principal prepayments,and the exercise of any"in-the-money"imbedded put or call options. Weighted Average Life-The weighted average life of a security is the weighted average time to payment of all remaining principal. It is calculated by multiplying each expected future principal payment amount by the time left to the payment. This amount is then divided by the total amount of principal remaining. Weighted average life is commonly used as a measure of the investment life for pass-through security types for comparison to non-pass-through securities. Callan 31 Disclosures Callan 1 Quarterly List as of March 31, 2017 List of Callan's Investment Manager Clients Confidential-For Callan Client Use Only Callan takes its fiduciary and disclosure responsibilities to clients very seriously.We recognize that there are numerous potential cooficts of interest encountered in the investment consulting industry and that it is our responsibility to manage those conflicts effectively and in the best interest of our clients. At Callan,we employ a robust process to Identify,manage,monitor and disclose potential conflicts on an on�oing basis. The list below is an important component of our conflicts management and disclosure process. It identities those investment managers that pay Callan fees for educational,consulting,softwood,database or reporting products and services. We update the list quarterly because we believe that our fund sponsor clients should know the investment managers that do business with Callan,particularly those investment manager clients that the fund sponsor clients may be using or considering using.Please refer to Callan's ADV Pad 2A for a more detailed description of the services and products that Callan makes available to investment manager clients through our Institutional Consulting Group,Independent Adviser Group and Fund Sponsor Consulting Group. Due to the complex corporate and organizational ownerehip structures of many investment management gams,parent and affiliate firm relationships are not indicated on our list. Fund sponsor clients may request a copy of Me most currently available list at any time.Fund sponsor clients may also request specific information regarding the fees paid to Callan by particular fund manager clients. Per company policy.information requests regaling fees are handled exclusively by Callan's Compliance Department. Manager Name Manager Name 1607 Capital Partners,LLC Campbell Global,LLC Aberdeen Asset Management PLC Capital Group Acadian Asset Management LLC CastleArk Management,LLC Ji AEGON USA Investment Management Causeway Capital Management Affiliated Managers Group,Inc. Caramel Hill Investment Management,Inc. IIIIIIIIIII� Alcentra Chartwell Investment Partners AllianceBernstein Cleadridge Investments,LLC _ Arleta,Global Investors Cohen&Steam Capital Management,Inc. Allianz Life Insurance Company of North America Columbia Management Investment Advisers,LLC American Century Investments Columbus Circle Investors Around Smith Breeden LLG Cornerstone Capital Management Angelo,Gordon&Co. Cove Street Capital,LLC Apollo Global Management Counter Rosenthal McGlynn,LLC _ AOR Capital Management Credit Suisse Asset Management Ares Management LLC Crestiine Investors,Inc. Adel Investments,LLC DDJ Capital Management,LLC Mature Capital Management LLC D.E.Shaw Investment Management,L.L.C. Artisan Holdings Defended,Race&Zollo,Inc. Atlanta Capital Management Co.,LLC Deutsche Asset Management Aviva Investors Americas Diamond Hill Capital Management,Inc. AM Investment Managers Dimensional Fund Advisors LP Bathe Gifford Overseas Limited Doubleline Baird Advisors Duff&Phelps Investment Mgmt.Co. Bank of Amerces Eagle Asset Management,Inc. Ratings LLC EARNEST Partners,LLC Broom Capital Management,Inc. Eaton Vance Management Barrow,Hanley,Mewhinney&Strauss,LLC Epoch Investment Partners,Inc. BlackRock Fayez Sarofim&Company BMO Global Asset Management Federated Investors BNP Paribas Investment Partners Fidelity Institutional Asset Management BNy Mellon Asset Management Fidelity Management&Research Boston Partners Finite Capital Corporation Bmndes Investment Partners,L.P. First Eagle Investment Management,LLC Brandywine Global Investment Management,LLC First Hawaiian Bank Wealth Management Division Brown Brothers Harriman&Company Fisher Investments BTG Pactual Franklin Templeton Gambler Investors,LLC Franklin Templeton Institutional Callan I Knowledge.Experience.Integrity. Page 1 of 2 Manager Name Manager Name Fred Alger Management,Inc. Nuveen Investments,Inc. Frost Investment Advisors,LLC OR Global Asset Management Fuller&Thaler Asset Management,Inc. Old Mutual Asset Management GAM(USA)Inc. Opus Capital Management Inc. GlobeFlex Capital,L.P. O'Shaughnessy Asset Management,LLC GMO Pacific Investment Management Company Goldman Sachs Asset Management Peregrine Capital Management.Inc. Great Lakes Ad rums,LLC PGIM Guggenheim Investments PGIM Fixed Income GW&K Investment Management PineBridge Investments Harbor Capital Group Trust Pioneer Investments Hartford Funds PNC Capital Advisors,LLC Hartford Investment Management Co. Principal Global Investors Hagman LLC Private Advisors,LLC Henderson Global Investors Putnam Investments,LLC Patches&Wiley Capital Management,LLC QMA(Quantital Management Associates) HSBC Global Asset Management RBC Global Asset Management Income Research+Management,Inc. Regions Financial Corporation Insight Investment Management Limited Reinhart Partners,Inc. INTECH Investment Management,LLC RidgeWorth Capital Management,Inc. Invesco Rockefeller&Co..Inc. Invested Asset Management Rothschild Asset Management,Inc. Ivy Investments Russell Investments Janus Capital Management,LLC Santa Barbara Asset Management Jensen Investment Management Santander Global Facilities Jobs Peak Advisors Schrader Investment Management North America Inc. J.P.Morgan Asset Management Smith,Graham&Co.Investment Advisors,L P. Keyes Anderson Capital Advisors LP Smith Group Asset Management KeyCorp Standard Life Investments Limited Lazard Asset Management Standish Legal&General Investment Management America State Sheet Global Advisors Lincoln National Corporation Stone Harbor Investment Partners,L.P. LMCG Investments,LLC T.Rowe Price Associates,Inc. Longview Partners Tapir,Centre&Haman Loomis,Sayler&Company,L.P. The Boston Company Asset Management,LLC Lord Abbetl&Company The Hartford Los Angeles Capital Management The London Company LSV Asset Management The TCW Group,Inc. -� MacKay Shields LLC Thompson,Siegel&Wellesley LLC Man Investments Inc. Thornburg Investment Management,Inc. Marietta Asset Management Tn-Star Trust Bank Macquarie Investment Management(formerly Delaware UBS Asset Management Investments) Van Eck Global McKinley Capital Management,LLC FS Investment Management Versus Capital Group M MidFirst Bank Victoryl AsCapital Management Inc. Mondrian Investment Partners Limited Voya Fin Asset Management,Inc. Montag&Caltlwell,LLC Voya Financial Morgan Stanley Investment Management Voya Investment Management(&a ING) Waterton Associates L.L.C. Mountain Lake Investment Management LLC MUFG Union Bank,N.A. WCM a Management Neuberger Berman WEDGE Capital Management Newton Investment Management(fka Newton Capital Wellington Management Company,LLP Wells Capital Management Management) Nikko Asset Management Co.,Ltd Western Asset Management Company Northern Trust Asset Management William Blair&Company Callan I Knowledge.Experience.Integrity. Page 2 of 2 March 31,2017 Investment Report Orange County Sanitation District Period Ending March 31, 2017 0 All Table of Contents SECTION 1 Economic Update SECTION 2 Account Profile SECTION 3 Consolidated Information SECTION 4 Portfolio Holdings SECTION 1 Economic Update 011 Economic Update ■ The Federal Open Market Committee(FOMC) raised the fed funds target rate by 25 basis points to a range of 0.75%- 1.00% in March. There was one dissenting vote from Minneapolis Fed President Neel Kashkari who preferred no rate hike. The Fed noted economic activity expanded at a moderate pace, labor market gains remain solid, and inflation is moving close to the Fed's 2.0% target. The Fed is still projecting a 1.4%fed funds rate by the end of this year, which implies two more 25 basis point hikes. The long-run fed funds rate projection was also unchanged at 3.0%. Notably, the Fed anticipates the longer-run neutral level of the fed funds rate (the level of the fed funds rate that is neither stimulative to the economy nor contractionary) is likely to remain relatively low which should warrant a gradual pace of rate hikes. Fed Chair Yellen indicated the current level of the fed funds rate is below the neutral rate, but not significantly lower. The FOMC did not make any decisions about their balance sheet reinvestment plans and will continue that discussion during future meetings. ■ Domestic economic data remains indicative of slow growth. The economy is likely at or near full employment, consumer confidence is strong, manufacturing indicators have improved, and housing trends remain favorable. Looking further ahead, a potential boost in fiscal stimulus could provide a further tailwind to economic growth. GDP grew by 2.1% in the fourth quarter.We expect GDP growth of 2.0"/0 2.5%in 2017. ■ The Treasury yield curve continued to flatten modestly in March. Short-term Treasury yields (under 2-year maturities) increased while the rest of Treasury yield curve was essentially unchanged. Meanwhile sovereign yields in Germany increased in March, and yields in Japan were little changed. At the end of 2016, following the election, US Treasury yields increased meaningfully driven by heightened expectations for fiscal stimulus and growth under the Trump administration and Republican-controlled Congress. Some of the post-election exuberance regarding fiscal spending, tax reform, and healthcare reform has started to wane, as market participants begin to sense the timeline and magnitude of such policies may be delayed or potentially less robust than previously hoped. s CiIII Employment Nonfarm Payroll (000's) Unemployment Rate 4W 13.0% 35U 12.0% —Underemployment Ram(Ue) 11 0°/ -Unempbym00 enl Rate(U3) ^ 300 0.0% 250 a � u 9.0% a 200 8.0% L 150 7.0% O i 100 6.0% 50 5.0% 0 4.0% O .,15 16A s s°a S s 441,10 q'n,'s s°n,1s 10 a,�> .,�s �s $ ac`7$ a1, 76 141,76 �1s 1s461,7> Sturm:USOep drt &&Labor Sw :USCepaNnent MLaG r Nonfarm payrolls were significantly lower than expected in March, up 98,000 versus the consensus forecast of 175,000. January and February payrolls were revised down by 38,000. On a trailing 3-month and 6-month basis, payrolls increased by an average of 178,000 and 163,000 per month, respectively. The unemployment rate fell to 4.5% in March from 4.7% in February. The participation rate was unchanged at 63.0%. A broader measure of unemployment called the U-6, which includes those who are marginally attached to the labor force and employed part time for economic reasons, decreased to 8.9% in March from 9.2% in February. Wage growth rose 0.2% in March, versus expectations for a 0.3% increase. This follows an upwardly revised gain of 0.3% in February (previously 0.2%). On a year-over-year basis,wages were up 2.7% in March,vs.2.8% in February. GRI Inflation Consumer Price Index (CPI) Personal Consumption Expenditures 3.5% 3.5% (PCE) CPIYOY%CM1enge —PCE Nce MlgN YOY%CM1 2.5%30% �Lwe CPI VOY%LM1ange 3.0% enga PCE Core Rgetor YOY%CSe�ge .5% 2.5% u $ �2.0% - 2.0% L X1.5% 1.5% 9 1.0% >O 1.0% 0.5% 0.5% 0.0% 0.0% -0.5% -45% A "tr 11"R 61 4°t 6, � bl �h � �Ok Q5. �h �1. ��S �S �S �S �B �6 �6 �B �> �S �S �S �S �6 �6 �6 >B O Source:US Department oLLaW Sw :US Department of LaO r The Consumer Price Index(CPI)was up 2.4%year-over-year in March, versus up 2.7%year-over-year in February. Core CPI (CPI less food and energy) was up 2.0% year-over-year in March, versus up 2.2% year-over-year in February. The Personal Consumption Expenditures (PCE) index was up 2.1% year-over-year in February, versus up 1.9% year-over-year in January. Core PCE (excluding food and energy)was up 1.8%year-over-year in February, versus up 1.7%year-over-year in January. Core CPI is in line with the Fed's 2.0%target, and the Fed's primary inflation gauge(PCE) may be approaching the Fed's 2.0%target. IIII© CIR I Consumer Retail Sales YOY % Change Consumer Confidence 7.0% 130 6.0% 125 5.0 20 m 115 c 4.0% - > 110 U J 3.0% - v 105 O c� 2.0% 100 95 1.0% 90 0.0% ¢ a5 y `£ Se Q 4f� ✓4�, `rsp, OpG y ye, 41ek ,� Aeq. k Ilk% 'e; 44A 'Gib `Sea +1 ✓%, '1k 76 70 16 79 '7> 's 7S '1' 7S 7S 18 7C 76 C )B 7C 7) 7) Source:US CePert Ior Cor . Souce:Federal Reserve On a year-over-year basis, total retail sales were up 5.2% in March compared with a 5.1% increase in February. On a month-over- month basis, retail sales declined 0.2% in March, following a downwardly revised 0.3% decrease in February (previously reported up 0.1%). Excluding autos and gas, retail sales increased 0.1% in March, following a 0.1% gain in February. Overall, March retail sales trends and the downward revisions to February sales results were disappointing. Meanwhile, the consumer confidence index remained robust in March at 125.6 versus 116.1 in February. GRI Economic Activity Leading Economic Indicators (LEI) Chicago Fed National Activity Index (CFNAI) a.>% oso 0.6% 0.5% 0.40 d 0.4% v 0.3% IF 0.20 u 0.2% "> c 0 0.0% -at% Y -0.20 -a2% a40 -aa% a4% -aso >S >S >S >S >E >6 >E �>9 �» e'>S >S >S >S o, Source:the COM Mre Boats Source Fe em?Reserve Bank or Chicago The Index of Leading Economic Indicators (LEI) rose 0.4% in March, exceeding expectations of 0.2%, following a 0.5% increase in February. Eight out of ten components in the index were positive contributors in March. According to the Conference Board, the LEI suggests economic growth may accelerate later this year if consumer spending and investment pick up. Meanwhile,the Chicago Fed National Activity Index(CFNAI)decreased to 0.03 in March on a 3-month moving average basis from 0.16 in February. The CFNAI suggests that the economy is growing at a slow pace. s CIRI Housing Housing Starts S&P/CaseShiller20 City Composite Home 1600 Price Index 6.5% •Mu10 Famlly Hou.-Sfatls Y 1400 �SIn8le Famlly Wu®ng 5lar@ 6.0% `0 1200 1000 orn 5.5% 5 0 F 800 ti 5.0% T 600 4.5% � O c 400 U 4.0% C 200 f p 3.5% 44, ( y 4,JS. 76 l,S O�I,S ya'J6. 6. J6. 1& -y'1j ��s �i'�s 's fills I& -%,'7s s 41.1s 1> Souse:US Census Bureau Soumm S&P Total housing starts fell 6.8% in March, following a 5.0% increase in February. Single-family starts fell 6.2% in March, and multi-family starts declined 7.9%. However, both single-and multi-family starts are up on a year-over-year basis. Permits were slightly stronger than expected in March, due to a 14.0% gain in mufti-family permits. According to the Case-Shiller 20-City home price index, home prices were up 5.7%year-over-year in January, compared to 5.5%in December. C1111 Manufacturing Institute of Supply Management Purchasing Capacity Utilization Manager Index 80.0% so Expanding 58 79.0% 56 78.0% 54 X 77.0% sz 8 76.0% 50 48 75.0% Contn tlng 46 74.0% ya.S lkI& �l1s Oac70 4 1, 70 �pi•70 10 O�1G ya•�1 ya,10 1�n•)S �IS O�'$ "k's Itk's %76 %1s "1"', Source:Inaifule for Supply Management Source:Fetleral Reserve The Institute for Supply Management (ISM) manufacturing index decreased to 57.2 in March from 57.7 in February, suggesting that manufacturing activity remains above trend. Notably, a reading above 50.0 suggests the manufacturing sector is expanding. Meanwhile, capacity utilization, which is production divided by capacity, increased to 76.1% in March from 75.7% in February. The capacity utilization rate remains below the long-run average of 79.9% (1972-2016), suggesting there is still excess capacity in the industrial sector. Gross Domestic Product (GDP) Gross Domestic Product(GDP) 6.0% Personal consumption Expenditures 1.1% 2.9% 2.0% 2.4% 5.0% Gross Private Domestic Investment -0.6% -1.3% 0.5% 1.5% 4.0% 3.0% Net Exports and Imparts 0.0% 0.2% 0.9% -1.8% 2.0% 1.0% Federal Government Expenditures -0.1% 0.0% 0.2% -0.1% 0.0% State and Local(consumption and Gross _10% r�GDP DOG%Charge Investment) 0.4% -0.3% 0.0% 0.1% GDP YOY%Ch"e p� p� Q Total 0.8% 1.4% 3.5% 2.1% "pO,� °p�11�% I'og "2 'x22 B lot 11O%' `p 11 O%'S °h 0.4@ oh O ) ) 2 2 u' 9 � S B Source: US Dapanmenf or Commerce Soule: USDeevhnentof Conxn According to the third estimate, fourth quarter real GDP grew at an annualized rate of 2.1%, 0.2% higher compared to the prior estimate. This compares to growth of 3.5% in the third quarter of 2016. Personal consumption expenditures continued to fuel GDP growth in the fourth quarter, while net exports detracted from growth. The consensus forecast for first quarter GDP growth has been trending downward. Market participants are currently forecasting GDP growth of just 1.4% in the first quarter of 2017. iii� G111 Bond Yields US Treasury Note Yields US Treasury Yield Curve 3.5% 3.5% 2-Yeer —Ma117 3.0% � Year 3.0% �0ec-16 10-Yeer —Mervib 2.5% 2.5% X 2.0% 92.0% Y 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% loor 0.0% 0.0% Source:BW bery Source:Bloomberg 0 Over the past three months, the yield curve Flattened, following a dramatic post-election curve steepener. In the past three months,the 2-year Treasury yield is up about 7 basis points and the 10-year Treasury yield is down about 6 basis points. Notably, shorter-term yields (1-year and under) are up more than 20 basis points during that time period. On a year-over-year basis the 2-year Treasury yield has increased 53 basis points and 10-year Treasury yield is up about 62 basis points. IIIIIIIII� SEA Account Profile so � 011 Objectives Investment Objectives The investment objectives of the Orange County Sanitation District are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio; second, to provide sufficient liquidity to meet all operating requirements; and third, to earn a commensurate rate of return consistent with the constraints imposed by the safety and liquidity objectives. Chandler Asset Management Performance Objective Liquid Operating Monies—will be compared to the 3-month T-Bill rate and operate with a maximum maturity of one year. Long-Term Operating Monies—will be compared to the Bank of America Merrill Lynch 1-5 Year Corporate Government Rated AAA—A Index. Strategy In order to achieve these objectives, the portfolio invests in high quality fixed income securities consistent with the investment policy and California Government Code. �jjjj Compliance fill OrangeCounty Sanitation District Long Term March 31,2017 POLICYCOMPLIANCE WITH INVESTMENT Assets managed by ChandlerAsset Management are in full compliance Wth State lawand Wth the investmentpolicy Category Standard Comment Treasury Issues 5 years maximum maturity Complies* Supranational "AA"or better by of3NRSROs; 30%maximum; 5%maxissuer; 5yearsmaturity, Complies Includes only: IADB BIRD,and IFC per CGC U.S.Agencies 20%max issuer; 5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better long term rating by 1 of 3 NRSROs; 30%maximum;5%max issuer; 5 years Complies max maturity Municipal Securities "A"or higher by l of 3 NRSROS;10%mabmum; 5%max issuer, 5years maximum Complies maturity Asset Backed/CMOs/Mortgage- "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 NRSROs; 20% Complies* backed maximum 5%max issuer(excluding MBS/ ovtagency);5 ars max maturity Negotiable CDs "A"or better on its long term debt by l of 3 NRSROs; "At/P1"or highest shortteml Complies ratings by l of 3 NRSROs; 30%maximum;5%max issuer, 5years max maturity CDs/TDS 5%max issuer, 5years max maturity Complies Bankers Acceptances A-1,or equivalent highest short term rating by l of 3 NRSROS; 40%maximum; 5%max Complies issuer' 180 days max maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS; "A"or better by l of 3 NRSROs,if long term debt Complies issued' 25%maximum' 5%max issuer, 270 days max maturity Mutual Fund&Money Market Highest rating by 2 NRSROs; 20%maximum; 10%max per mutual fund; 20%max per Complies Mutual Fund pronary,market mutual fund Repurchase Agreements 102%collateralization Complies Reverse Repurchase A reements 5%mabmum 90 days max maturity Complies LAIF Not used by investment adviser Complies Avg Duration Not to exceed 00 months - (80%to 120%of the benchmark) Complies Maximum Maturity 15 years maximum maturity Complies* "The podfdio has twenty-four(24)secunties with maturities greater than 5 years including one(1)ABS,five(5)CMOs,secenteen(17)MBS and one(1)treasury. All sacudties were inherited from the nnnOus manager and complied at time 0 pumhase. C1111 Portfolio Characteristics Orange County Sanitation District Long Term 3/31/2017 12/31/2016 Benchmark` Portfolio Portfolio Average Maturity(yrs) 2.73 2.80 2.87 Modified Duration 2.61 2.43 2.48 Average Purchase Yield n/a 1.62% 1.57% Average Market Yield 1.62% 1.55% 1.51% Average Quality" AAA AA/Aa1 AA+/Aai Contributions/Withdrawals -10,117 Total Market Value 318,223,280 316,592,849 `BAML 1-5 Yr US Corporate/Gov:Rated AAA-A Index '"Benchmark is a blended rating of S&P, Moody's,and Fitch.Portfolio is S&P and Moody's respectively. Multiple securities were purchased across the Treasury,Agency, Supranational, Asset Backed, Commercial Paper and Corporates sectors of the market to keep the portfolio structure in-line with Chandler objectives. The purchased securities ranged in maturity from July 2017 to February 2022. Several securities were sold and two matured to help facilitate the additions to the portfolio. Sector Distribution Orange County Sanitation District Long Term March 31, 2017 December 31,2016 Negotiable ABS CD ABS 1.3 US Treasury 7.4% 7.1% 29.7% US Treasury 30.1 Agency Agency 24.6% 23.7% CMO CMO 0.9% Commercial 0.9% Paper Commercial Paper US Corporate 4.0% US Corporate 3.6% 22 9% Money Market Fund FI 22.4% Money Market 0.9% Fund FI Supranational Municipal Mortgage Supranational Municipal Mortgage 1.9% 75% Bonds Pass Thru 66� Bonds Pass Thm 1.5% 0.6% 1.5% 0.7% The sector allocation of the portfolio was stable with no sector change greater than 1.0%of the portfolio. Issuers CAROrange County Sanitation District Long Term Issuer Report Account M70268 As ot5rdt2Dn Govemmenl of United States US Treasury 29.75% Federal National Mortgage Association Agency 9.53% Federal Hume Loan Bank Agency 7.97% FWcml Home Loan Mortgage Corp Agency 7.07% Inter-American Dev Bank Sup sational 3.62% John IXo,ABS ADS 2.59% Imematiotal Finance Corp SuPmnational 2.34% Bank of Toky.Mie UFJ Commercial Paper L"% Toyota Motor Cory Commercial Paper 1.97% Wells Fargo Cory US Corporate 1.75% JP Morgan Chase&Co US Corporate 1.68% Honda ADS ABS 1.66% General Electric Cc US Corporate 1. 0% Deere&Company US Corporate 1.59% Qualcomm Inc US Corp", 1.59% Intl Bank R.and Development Supressaiaral 1.57% Bank of New York US Corporate 1.46% Bank of America Corp US Corporate 1.44% ChevronTexaco Corp US Corporate 1 AI% HSBC USA Corp US Corporate, L34% 1P Morgan ABS ABS 130% Honda Motor Corpoximn US Corporate 1,27% Eli Lilly&Co US Corporate 1.17% Apple Inc US Corporate L26% Nissan ABS ABS 1.08% Morgan Stanley US Corporate: 0.98% American Express Credit US Corporate L%% Exxon Mobil Corp US Corporate 0.95% Microsoft US Corporate 0.93% Dreyf Treasury Money Market Fund Money Market Fund FI 0.87% Port Authority ofNcw York and New Jersey Municipal Bonds 0.85% Toyota ABS ABS 0.72% Federal Dome Loan Mortgage Corp CMO 0.66% KI Issuers Continued C/" Orange County Sanitation District Long Term Issuer Report Account#10266 As of 3/3112017 Intel Corp US Corporate 0.63% Occidental Petroleum Corporation US Corporate 0.63% Federal National Mortgage Association Mortgage Pass Ihru 0.51% New York City Transitional Finance Authority Municipal Bonds 0.48% Goldman Sachs Inc. US Corporate 0.20% University of California Municipal Bonds 0.14% NCUA Guaranteed Notes CMO 0.11% Federal National Mortgage Association CMO 0.10% GNMA Mortgage Pass"fhru 0.08% AMRESCO Residerttal Securities Corp Morigegc Pass Th. 0.04% Small Business Administration ASS 0.02% SLM Corp ASS 0.01% GNMA CMO 0.01% Federal Home Loan Mortgage Corp Mortgage Pass"Item 0.00% Total 100.00% Quality Distribution Orange County Sanitation District Long Term March 31, 2017 vs. December 31, 2016 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% AAA AA A <A NR •3/31M11 1213112016 AAA AA A cA NR 03/31/17 13.3% 65.5% 10.9% 3.48/o 6.8% 12/31/16 16.6% 65.0% 10.2% 3.40/6 4.8% 6oum :58P Rrtings Duration Distribution Orange County Sanitation District Long Term Portfolio Compared to the Benchmark as of March 31, 2017 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 0-0.25 0.25-0.50 0.50-1 1-2 2-3 3-4 4-5 5+ �PanMb � Berlphinark' 0-0.25 0.25-0.50 0.50-1 1 -2 2-3 3-4 4-5 5+ Portfolio 4.3% 10.5% 13.9% 15.1 % 17.7% 23.0% 12.1 % 3.4% Benchmark' 0.1 % 0.0% 1.6% 31.0% 29.3% 22.5% 15.7% 0.0% `BAML 1-5 Vr US Corporate/Gov Rated AAA-A Index The duration of the portfolio contracted slightly, currently 2.43 versus 2.48 at the end of the prior reporting period. The Chandler team will be looking to opportunistically increase the duration of the portfolio in the coming quarter. KI Investment Performance NINE Orange County Sanitation District Long Term Period Ending March 31, 2017 Total Rate of Return Annualized Since Inceptor, November 30,2014 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 12 months 2years 3years 5years 10 years Since Inception .Orange County Sanitation District Long Term Annualized 3 months 12 months 2 years 3 years 5 years 10 yearn Since InCBptlOn Orange County Sanitation District Long Term 0.52% 0.45% 1.01% N/A N/A N/A 1.12% BAIL 1-5 Vr US Corporate/Gout Rated AAA-A Index 0.47% 0.21% 0.94% N/A N/A N/A 1.08% Total rate of return:A measure of a poMolio's performance over time.It is the intemal rate of retum,which equates the beginning value of the portfolio with the ending value;it includes interest earnings,realized and unrealized gains and losses in the portfolio. C1111 Compliance C1" Orange County Sanitation District Liquid March 31,2017 COMPLIANCE • Assets managed by ChandlerAsset Management are in full compliance wth State lawand with the investment policy Category Standard Comment Treasury Issues l year maximum maturity; Minimum allocation of 10% Complies Supranational "AA"or better by l of 3 NRSROs; 30%maximum; 5%max issuer; 1year Complies maturity', Includes only: IADB IBRD,and IFC per CGC U.S.Agencies 20%max issuer; 1 year maximum maturity Complies U.S.Corporate(MTNs) "A"or better long term rating by 1 of 3 NRSROs;30%maximum;5%max issuer; Complies 1 year max maturity Asset Backed/CMOs "AA"or better by l of 3 NRSROs: "A"or higher issuer rating by l of 3 NRSROs; Complies 20%maximum; 5%max issuer, 1 year max maturity Negotiable CDs "A"or betteron its long term debt by l of 3 NRSROs; "A1/P1"or Nghestshort Complies tens ratings by 1 of 3 NRSROs; 30%maximum;5%max issuer, 1 year max maturity CDs/TDS 5%max issuer;1 year max maturity Complies Bankers Acceptances A-1,or equivalent short tens mting by l of 3 NRSROS;40%maximum;5%max Complies issuer, 180 days max maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS;"A"or better by l of 3 NRSROs,if long Complies tens debt issued; 25%maximum;5%max issuer,270 days max maturity Mutual Fund&Money Market Mutual Fund Highest rating by 2 NRSROs; 20%maximum; 10%max per mutual fund; 20% Complies max per money market mutual fund Repurchase Agreements 102%collaterelization Complies Reverse Repurchase A reements 5%maximum,90 days max maturity Complies LAIF Not used by investment adviser Complies Prohibited Municipal Securities Complies Prohibited Mortgage Securities Complies Avg Duration Not to exceed 180 days; Max duration of 1/2 year Complies Maximum Maturity 1 year maximum maturity Complies C1111 Portfolio Characteristics Orange County Sanitation District Liquid 3/31/2017 12/31/2016 Benchmark` Portfolio Portfolio Average Maturity(yrs) 0.15 0.16 0.14 Modified Duration 0.15 0.16 0.14 Average Purchase Yield n/a 0.69% 0.52% Average Market Yield 0.71% 0.73% 0.55% Average Quality" AAA AAA/Aaa AAA/Aaa Contributions/Withdrawals -28,000,000 Total Market Value 85,177,162 113,042,677 `BAML 3-Month US Treasury Bill Index '"Benchmark is a blended rating of S&P, Moody's,and Fitch.Portfolio is S&P and Moody's respectively. Many securities were purchased across the Treasury,Agency, Commercial Paper and Corporate sectors of the market to keep the portfolio invested in short maturity assets. The purchased securities ranged in maturity from April 2017 to March 2018. Multiple securities matured throughout the quarter; $28 million was withdrawn from the portfolio in January. Sector Distribution SEEN Orange County Sanitation District Liquid March 31,2017 December 31,2016 Agency US Treasury 31.2% 34.8% US Treasury 46.9% Agency 46.4% Commercial Paper US Corporate 3.2% 5.8 Money Market Fund FI Supmnational US Corporate Negotiable 4.4% 1.8% Commercial 104% CD Negotiable Money Market Paper Supranational 14% CD Fund Fl P 2.5% 1.0% 5.0% 5.2% The sector allocation changed materially due to the impact of the maturing securities and the aforementioned $28 million withdrawal. The two largest percentage changes were the 12.1% increase in the Treasury allocation, to 46.9%of the portfolio, offset by the 15.2%decline in the Agency allocation, to 31.2%of the portfolio. Issuers C/" Orange County Sanitation District Liquid Issuer Report Account 010282 As of 3/31QO17 Government of Uniled States US Ireu,", 46.93% Federel Home Loan Bank Agency 19.77% Fedeal National Mortgage Association Agency 10.11% Dreyfus Treasury Money Market Fund Money Market Fund FI 4.41% Federal Home Loan Mortgage Corp Agency 2.35% Bank of Tokyo.Mit UFJ Commercial Paper 2.00% Intl Bank Recon and Development Suprenational 1.37% Toronto Daninion Holdings Negotiable CO 1.36% Generel Electric Co US Corporate 1.22% Wells Fargo Corp US Corporate 1.19% Berkshire Hathaway US Corporate 1.18% ChevmnTexaco Corp US Corporate 1.18% Oracle Corp US Corporate 1.19% Apple Inc US Corpomte 1.18% International Finance Corp Supmnational 1.19% Deere&Company US Corporate 1.18% Honda Motor Corporation US Corpoate 1.18% Toyota Motor Credit Corp Commercial Paper 1.17% US Baranrp US Corpumte 0.97% Total 100.00% Quality Distribution Orange County Sanitation District Liquid March 31, 2017 vs. December 31, 2016 100.0% 60.0% 60.D% 40.0% 20.0% 0.0% AAA AA A <A NR W31117 12131116 AAA AA A <A NR 3/31/17 79.9% 15.7% 4.4% 0.0% 0.0% 12/31/16 70.7% 26.2% 3.1 % 0.0% 0.0% Source:S&P Ratings GKI Duration Distribution Orange County Sanitation District Liquid Portfolio Compared to the Benchmark as of March 31, 2017 120.0% 100.0% eo.0% 60.0% 40.0% 20.0% 0.0% 0-0.25 0.25-Ds) 0.50-1 1-1.5 1.5-2 2-2.5 2.5-3 3+ �Palfdb � Banchnark' 0-0.25 0.25-0.50 0.50-1 1 -1.5 1.5-2 2-2.5 2.5-3 3+ Portfolio 74.3% 20.9% 4.8% 0.0% 0.0% 0.0% 0.0% 0.0% Benchmark' 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 'BAML 3-Month US Treasury Bill Index `The duration of the portfolio was relatively stable, currently 0.16 versus 0.14 at the end of the prior quarter. The maturity structure of the portfolio remains short to account for the upcoming forecasted liquidity needs in June, July, and August. KI Investment Performance Orange County Sanitation District Liquid Period Ending March 31, 2017 Total Rate of Return Annualized Since Inception November 30,2014 0.50% 0.45% 0.40% 0.35% 0.30% 0.25% 0,20% 0.15% 0.10% 0.05% 0.00% 12 months 2years 3years 5Were 10 years Since Inception •Orange County Sanitation District Liquid BAIL 3-Month US Treasury Bill Index Annualized 3 months 12 months 2 years 3 years 5 years 10 yearn Since InCBptlOn Orange County Sanitation District Liquid 0.14% 0.46% 0.39% N/A N/A N/A 0.37% BAML 3-Month US Treasury Bill Index 0.10% 0.36% 0.24% N/A N/A N/A 0.21% Total rate of return:A measure of a poMolio's performance over time.It is the intemal rate of return,which equates the beginning value of the portfolio with the ending value;it includes interest earnings,realized and unrealized gains and losses in the portfolio. �jjjj Compliance OCSD Lehman Exposure March 31,2017 COMPLIANCE • Assets managed by Chandler Asset Management are in full compliance mith State lawand with the investment policy Category Standard Comment Treasury Issues 5 years maximum maturity Complies Suprenational "AA"or better by of NRSROs; 30%maximum; 5%max; 5years maturity, Includes Complies only. IADB,BIRD,and IFCper CGC U.S.Agencies 20%max issuer, 5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better long term rating by l of 3 NRSROs; 30%maxmum;5%max issuer; 5 Complies' years max matudty Municipal Securites "A"or higher by l of 3 NRSROS; 10%maximum; 5%max issuer, 5 years maximum Complies maturity Asset Backed/CMOs/ "AA"or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 NRSROs; 20% Complies Mortgage-backed maximum; 5%max issuer(excluding MBS/gout agency);5 years max maturity Negotiable CDs "A"or betteron its long tens debt by l of 3 NRSROs; "A1/P1"or highest shortterm Complies ratings b 1of3 NRSROs; 30%maximum;5%max issuer, 5 years max maturity CDs/TDS 5%max issuer, 5 years max maturity Complies Bankers Acceptances A-1,or equivalent highest short term rating by l of 3 NRSROS; 40%maximum; 5% Complies max issuer 180 days max maturity Commercial Paper A-1,or equivalent by l of 3 NRSROS; "A"or better by l of 3 NRSROs,if long term debt Complies issued; 25%maximum; 5%max issuer; 270 days max maturity Mutual Fund B Money Market Highest rating by 2 NRSROs; 20%maximum; 10%max per mutual fund; 20%max per Complies Mutual Fund money market mutual fund Repurchase A reements 102%collateralization Complies Reverse Repurchase 5%maximum,90 days max maturity Complies Agreements LAIF Not used by investmentadAser Complies Avg Duration Not to exceed 60 months - 80%to 120%of the benchmark Complies Maximum Maturity 5 years maximum maturity Complies -Account holds$2 million face value(cusip 525ESCOy6)and$600,000 face value(cusip 525ESC1137)of defaulted Lehman Bros Holdings that vrere purchased by the predous manager. Complied at time of purchase. IS Account Profile Portfolio Characteristics OCSD Lehman Exposure 03/31/2017 12/31/2016 Portfolio Portfolio Average Maturity(yrs) 21.50 21.65 Modified Duration 0.00 0.00 Average Purchase Yield 0.00 % 0.00 Average Market Yield 0.00 % 0.00 % Average Quality* NR/NR NR/NR Total Market Value 187,121 183,871 SECTION 3 i Consolidated Information S,`I Account Profile Portfolio Characteristics Orange County Sanitation District Consolidated 03/31/2017 12/31/2016 Portfolio Portfolio Average Maturity(yrs) 2.25 2.16 Modified Duration 1.95 1.86 Average Purchase Yield 1.42 % 1.29 Average Market Yield 1.37 % 1.26 % Average Quality* AA+/Aa1 AA+/Aa1 Total Market Value 403,587,563 429,819,397 Portfolio is S&P and Mows respectively. Sector Distribution Orange County Sanitation District Consolidated March 31, 2017 December 31, 2016 us—Corp MBS US COT 20.3% 0.5% 18.0% CP CP _ MBS 3.8% 4.2%- 0.5% Munkipak Municipals 1.2% 1.1% MMF USTmasury MMF 1.6% MA% 2.7% CMO CMO us Tmasury 0.7% 01% / 31.3% PBS Negotiable CD ABS 5.8% 0.3% 5.2% Common Stock i,. Negotiabk CD 0.0% /1.2% Agovey ". 26.0% Supra6.5% tional Agency Common Sloth 28.0% 6.5% 29.7% 0.0% Supramfional 5.3% SECTION 4 1 IN _'==- Portfolio Holdings ��" Orange County Sanitation District Long Term Holdings Report Account 010268 As of 3/31/17 Purchase Da:o Cost Va:u Mid Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va u: Mkt YTM Accrued Int. Gain/Loss Fitch Duration ABS 89231TAB6 Toyota Auto Receivables Owner 2015-C 76,628.87 08/18/2015 76,62271 99.99 76,619.14 0.02% Aaa I AAA 0.88 0.92%Due 2/15/2018 0.93% 76,626S9 1A3% 31.33 (7.55) NR 0.02 43814GAC4 Honda Auto Receivables 2014-2 A3 274,870.98 0410812015 274,677.71 99.93 274,675.27 0.09% Aaa/AAA 0.97 0.77%Due 3/19/2018 0.83% 274,859.12 1.32% 76.43 (183.85) NR 0.13 43814NAB1 Honda Auto Receivables 2016-1 A2 1,302,300.19 0211612016 1.302,170.09 99.98 1,302,038.43 0.41 % NR/AAA 1.22 1.01%Do.6/1812018 1.02% 1,302,231.90 1.10% 474.98 (193.47) AAA 0.22 4778nAD6 John Deere Owner Trust 2014E A3 1,442,709.85 02/04/2015 1,443,386.11 99.95 1,442,021.68 0.45% Aaa/NR 1.63 1.07%Due 11/1512018 1.05% 1,442,862.51 1.24% 686.09 (840.83) AAA 0.28 89236WAC2 Toyota Auto Receivables Owner 2015-A 2,207,690.52 02/24/2015 2207,356.72 99.90 2,205,544.64 0.69% Aaa/AAA 1.88 1.12%Due 2/15/2019 1.13% 2,207,591.52 1.35% 1,098.94 (2,046.88) NR 0.43 47788NAM John Deere Owner Trust 2016-B A2 2,980,000.00 07/19/2016 2,979,818.22 99.91 2,977,353.76 0.94% Asa INR 1.88 1.09%Due 211512019 1.10% 2,979,866.54 L28% 1,443.64 (2,512.78) AAA 0.47 65478WAB1 Nissan Auto Receivables Owner 2016-C 2,085,000.00 0810212016 2,084,917.85 Was 2,082,456.30 0.65% Asa/NR 2.12 A2A 1.08% 2,084,936.92 1.30% 991.53 (2,480.62) AAA 0.54 1.07%Due 5/15/2019 43814TAB8 Honda Auto Receivables 2017-1 A2 1,885,000.00 0312112017 1,884,954.95 100.03 1,885,525.92 0.59% Aaa/NR 2.31 1.42%Due 712212019 1.43% 1,884,955.16 1.39% 223.06 570.76 AAA 0.83 161571HHO Chase CHAT Pool k2016-A7 4,140,000.00 MIN12016 4,139,643.13 99.92 4,136,609.34 1.30% Aaa I AAA 2.46 1.06%Due 9/16/2019 1.08% 4.139,837.61 1.25% 1,950.40 (3,228.27) AAA 0.44 47787XAB3 John Deere Owner Trust 2017-A A2 1,410,000.00 02/22/2017 1,409,994.36 99.98 1,409,651.60 0.44% Aaa INR 2.54 1.5%Due 1011512019 1.50% 1,409,994.54 1.53% 1,703.75 (332.94) AAA 1.06 654747AB0 Nissan Auto Receivables 2017-A A2A 1,365,000.00 031210H7 1,364,993.04 100.00 1,364,993.18 0.43% Aaa/NR 2.79 1.47%Due 1/15/2020 1.47% 1,364,993.07 1.48% 891.80 0.11 AAA 1.04 47788MA04 John Deere Owner Trust 2016-A A3 2,420,000.00 02/23/2016 2.419,619.09 99.79 2,414,968.82 0.76% AmINR 3.04 1.36%Dua 411512020 1.37% 2.419,719.06 1.54% 1,462.76 (4,750.24) AAA 1.18 438140AC2 Honda Auto Receivables 2016-2 A3 1,810,0W.W 0512412016 1,809,964.89 99.80 1,806,408.96 0.57% Aaa INR 3.04 1.39%Due 411512020 1.40% 1,809,972.46 1.54% 1,118.18 (3,563.6)) AAA 1.34 83162CUO Small Business Administration 2001-20C 62,182.39 031M12001 62,182.39 104.46 64,956.35 0.02% Aaa/AA- 3.92 6.34%Due 3/1=1 6.34% 62,182.39 4.20% 328.53 2,773.96 AAA 2.06 78445JAA5 SLMA 2008-9A 36,564.38 MIU/2008 34,424.15 102.00 35,256.49 0.01 % Baa31 AA+ 6.07 2.537%Due 4/25/2023 2.60% 34,506.35 2.05% 160.79 748.14 B 3.46 23,494,725.41 23,479,087.88 7.38% Aaa I AAA 2.29 Total ABS 23,495,947.18 1.23% 23,495,135.84 1.36% 12,642.21 (16,047.961 AAA 0.68 AGENCY 3137EADVB FHLMC Note 5,000,000.00 06/25/2015 4,994,250.00 99.96 4,998,155.00 1.57% Ann/AA+ 0.29 0.75%Due 7/14/2017 0,81 % 4,999,201,60 088% 8,020.83 (1,046.60) AAA 0.29 3137EADN6 FHLMC Note 5,000,000.00 0112312015 4,967,500+00 99.77 4,988,720.00 1.57% Aaa/AA+ 0.79 075%Do.1/12/2018 0.97% 4,991,409+43 1.04% 8,229.17 (2,689.43) AAA 0.77 3137EADPI FHLMC Note 5,000,000.00 01/13/2015 4.974,100.00 99.77 4,988,690.00 1.57% Am/AA,, 0.93 0.875%Due W12018 1.04% 4,992,329.27 1.12% 2,916.67 (3,639.27) AAA 0.93 Chandler Asset Menpemant-CONFIDENTIAL 35 C�" Orange County Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Purchase Da:o Cost Va:u: Nut Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt YTIM Accrued Int. Gain/Loss Fitch Duration AGENCY 313378A43 FHLB Note 7,500,000.00 02/11/2015 7,544,850.00 100.23 7,517,205.00 2.36% Ann/AA+ 0.94 1.375%Due 319I2018 1.18% 7,513,683.05 lA3% 6,302.08 3,521.95 AAA 0.93 3135GOG72 FNMA Note 5,000,000.00 1211812015 4,963,950.00 99.76 4,987,940.W 1.57% Aaa/AA+ 1.71 1.125%Due 12114/2018 1.37% 4,979,409+46 1.27% 16,718.75 8,530.54 AAA 1.68 3133782102 FHLB NO. 7,500,000.00 Various 7.589,190.00 100.26 7,519,807.50 2.37% Aaa/AA+ 1.94 1.5%Due 3/8/2019 1.14% 7,550,466.60 1.36% 7,187.W (30,659.00) AAA 1.90 3137EADMB FHLMC Note 7,500,000.00 Various 7,399,650.00 99.44 7,458,172.W IN% Aaa/AA+ 2.51 1.25%Due 101212019 1.61 % 7,434,068.56 1.48% 46,614.50 24,103.94 AAA 2.44 313383HU8 FHLB Note 5,000,000.00 M11312015 5,008,950+00 WAS 5,009,470.00 1.58Is Aaa/AA+ 3.20 1.75%Due 6/12/2020 1.71 % 5.005,926.08 1.69% 26,493.06 3,543.92 NR 3.08 3135GOD76 FNMA Note 6,000,000.00 11/16/2016 4,956,660.00 99.56 4,978,110.W 1.57% Aaa/AA+ 3.23 1.5%Due 6/22/2020 1.70% 4,968,883.68 1.64% 20,625.00 9,226.32 AAA 3.12 3135GOF73 FNMA Note 7,500,00.0 Various 7,370,726.00 99.17 7,437,675.W 2.WIs Aaa/AA+ 3.67 1.5%Due Il/MI2020 1.87% 7,404,396.21 1.73% 37,812.50 33,278+79 AAA 3.53 313OA7CV5 FHLB Note 5,365,000.00 0211712016 5,343,32SAO 90.47 5,282,877.95 1.66% Aaa/AA+ 3.89 1.375%Due DIW2021 1.46% 5,348,166.70 1.78% 8,811.27 (65,287.75) AAA 3]5 3135GOJ20 FNMA Note 10,000,000.00 Various 10,040,950.00 98.24 9,823,940.W 3.09% Aaa/AA+ 3.91 1.375%Due 212612021 1.28% 10,034,870.29 1.84% 13,368.06 (210,930.29) AAA 3.77 3135GOS38 FNMA Note 3,000,000.00 0113012017 2,994,570.00 99.96 2,998,881.00 0.95% Aaa/AA- 4.77 2%Due 1I5/2022 IN% 2,994,751.00 2.01% 13,666.67 4,130.00 AAA 4.50 78,147,661.40 77,989,663.95 24.58% Asa I AA+ 2.46 Total Agency 78,365,000.00 1.38% 78,217,560.83 1.47% 216,766.14 (227,916.88) AAA 2.38 C610 628881JAA8 NCUA Guaranteed Note CMO 2010-R2 357,959,00 11/10/2010 357,957,39 100.02 358,018.42 0.11 % Aaa/AA. 0.60 1.353%Due 11/612017 0.00% 357,957.39 1.32% 290.01 61.03 NR 0.08 31398VJ98 FHLMC FHMS K006 A2 900,000.00 11/23/2010 951,046A8 IM.02 954,186.30 0.30% Aaa/AA+ 2.82 4.251%Due 112512020 3.54% 915,707.91 1.83% 3,188.25 38,478.39 AAA 2.51 3837H4NX9 GNMA PooIN 2000-9 28,936.98 0112412000 28,936+98 100.41 29,054.46 0.01 % Aaa/AA+ 12.89 1.478%Due 2/16/2030 1.49% 28,936S8 1A7% 33.28 117A8 AAA 0.03 3133TCE95 FHLMC FSPC E3A 39,012.55 03/11/1998 39,053.37 104.88 40,917.30 0.01 % Aaa/AA+ 15.39 3.082%Due W1512032 3.05% 39,030.84 2.08% 100.20 1,886.46 AAA 1.58 313%X305 FNMA FNR 2W7-114 A6 397.59 0111012008 378.21 99.93 397.32 0.0)% Aaa/AA+ 20.59 1.182%Do.10/27/2037 1.54% 384.20 1.20% 0.05 13.12 AAA 0.12 31397OREO FNMA FNR 20113 FA 316,282.00 1212012010 316,183.17 101.41 320,728.92 0.10% Aaa/AA+ 23.92 1.663%Due 2I25I2041 1.66% 316,203.46 1.30% 87.65 4,625.46 AAA 0.10 313WY35 FHLMC FSPC T4i82A 954,273.47 O6/WI2011 1,080,714S9 116.09 1,107,854.24 0.35% Aaa/AA+ 26.50 6.5%Due 9I25/2043 5.40% 1,058,002+24 3.33% 1,033.80 49,852+00 AAA 4.98 2,774,270.69 2,811,156.96 0.88% Aaa I AA+ 14.56 Total CMO 2,596,861.59 3.55% 2,716,223.02 2.29% 4,733.22 94,933.94 AAA 2.86 Chandler Aesel Management-CONFIDENTIAL 36 CAROrangeCounty Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Purchase Da:o Cost Va:u Mut Price Market Value %of Pod. Moody]S&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va u: Mid YTM Accrued Ind. Gain/Loss Fitch Duration COMMERCIAL PAPER 06538BU76 Bank of Tokyo Mitsubishi NV Discount 6,345,000.00 03/06/2017 6,319,627.05 99.68 6,324,826.43 1.99% P-1 /A-1 027 CP 1.20% 6,324,826A3 L20% 0.00 0.00 NR 0,27 1.18%Due 717/2017 89233GV29 Toyota Motor Credit Discount CP 6,300,000.00 12/22/2016 6.251,999.25 99.58 6,273,524.25 1.97% P-1/A-1+ 0.34 1.23%Due 812/2017 1.26% 6,273,524.25 1.26% 0.00 0.00 NR 0.34 12,571,626.30 12,598,350.68 3.96% P-1/A-1 0.30 Total Commercial Paper 12,645,000.00 1.23% 12,598,350.68 1.23% 0.00 0.00 NR 0.30 MONEY MARKET FUND FI 261908107 Dreyfus Trsy/Agcy Cash Management 2,783,196.78 Various 2,783,196,78 1.00 2,783,191 0.87% Aaa/AAA 0.00 521 0.61 % 2,783,196.78 0.61% 0.00 0.00 AAA 0.00 2,783,196.78 2,783,196.78 0.87% Aaa/AAA 0.00 Total Money Market Fund FI 2,783,196.78 0.61% 2,783,196.78 0.61% 0.00 0.00 AAA 0.00 MORTGAGE PASS THRU 31381PDA3 FNMA FN 466397 357,855.81 12/01/2010 350,111.61 1".18 372,824.20 0.12% Aaa/AA+ 3.59 3.4%Due 1111/2020 3.80% 355,051.80 2A5% 236.58 17,772.40 AAA 3.27 36225CAZ9 GNMA Pooh#G280023 24,891.95 MINII997 25,304.22 103.21 25,691.50 0.01 % Aaa/AA+ 9.73 1.625%Due 12120/2026 1,52% 25,028+62 1.99% 33.71 662.96 AAA 4.55 36225CC20 GNMA PooI#G280088 28,982.87 08/11/1997 29,616A8 103.19 29,907.60 0.01 % Aea/AA+ 10.23 2.42%Due 612012027 2.28% 29,200.13 2.01% 58.45 707A7 AAA 4.67 31348SM3 FHLMC FH 786064 2,364.35 02/180M0 2,306.77 102.92 2,433.34 0.00% Aaa/AA+ 10.76 3.057%Due 1/112028 3.25% 2,342.12 2.61% 6.02 91.22 AAA 4.58 3137INUC7 FNMA FN 257179 23,613.49 121OWNII 24,973+58 107.44 25,370.88 0.01 % Ass/AA. 11.01 4.5%Due V112028 3.72% 24,531A8 2.05% 88.55 839.70 AAA 3.46 31417YAY3 FNMA Pool#FN MA0022 28,029.80 12/05/2011 29,644.25 107.46 30,119.62 0.01 % Aaa/AA+ 12.01 4.5%Due 4/1/2029 3.76% 29,149.44 2.31% 105.11 970.18 AAA 3.58 3138EG6F6 FNMA FN AL0869 17,667.47 1210512011 18,685+08 107.41 18,977.27 0.01 % Aaa/AA+ 12.18 4.5%Due 611/2029 3.77% 18,376+18 2.08% 15.46 601.09 AAA 3.12 03215PFN4 AMRESCO Residential Samoans 1999-1 133,743.29 05/20/2011 100,432.85 94.23 126,026.30 0.04% NR IAA+ 12.24 A 5.51 % 111,217.02 2.70% 50.00 14,809.28 BBB 8.22 1.923%Due 6/2512029 36225CNM4 GNMA Pool#G280395 10,213.04 0311512000 10,120+47 103.59 10,579.61 0.00% Me/AA+ 13.06 2.42%Due 4/20/2030 2.48% 10,172.64 1.94% 20.60 406.97 AAA 4.90 36225CN28 GNMA Pool#G280408 82,019.13 03/15/2000 81,186A4 103.46 84,856.66 0.03% Aea/AA+ 13.15 2.42%Due 512012030 2.49% 81,654.31 2.06% 165.41 3,202.35 AAA 6.23 31403GXF4 FNMA Pool#FN 748678 4,979.68 O6/1012013 5,353.15 109.73 5,464.27 0.00% Me/AA+ 16.52 5%Due 10/112033 4.16% 5,284.56 2.51% 20.75 179.71 AAA 3.91 36225DCBB GNMA Pool#G280965 84,228.29 07/19/2004 84,175.65 103.92 87,525.91 0.03% Aaa/AA+ 17.32 2.09%Due 7/20/2034 2.10% 84,197.83 1.83% 146.70 3,328.08 AAA 4.66 Chandler Ae nManagement-CONFIDENTIAL 37 OROrange County Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Descriptiona u: Mid Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security MORTGAGE PASS THRU 31406XWT5 FNMA For*FN 823358 141,969.84 01/11/2006 140,86071 105.28 149,469.82 0.05% Ann/AA- 17.85 3.275%Due 211I2035 3.34% 141,288.14 0.91 % 387.46 8,181.68 AAA 1.96 314%POY8 FNMA P.I#FN 815971 269,292.32 G611012013 289,489.26 1G9.38 294,545.75 0.09% Aaa/AA+ 17.93 5%Due 311/2035 4.21 % 286,022+11 2.69% 1,122.05 8,523.64 AAA 4.17 31407BXH7 FNMA Pool#FN 826080 28,209.60 0611012013 30,325.31 109.21 30,807.28 0.01 % Aaa/AA+ 18.26 5%Due 711/2035 4.22% 29,967.64 2.69% 117.54 839.64 AAA 4.18 31376KTU FNMA FN 357969 164,593.09 G6/10/2013 176,937.57 109.43 180,122.12 0.06% Aaa/AA+ 18.43 5%Due 911/2035 4.22% 174,866.67 2.65% 160.02 5,255.45 AAA 4.21 31403DJM FNMA Pool#745580 159,334.92 NIIO12013 171,285.04 1M.41 174,330.25 0.05% Aaa/AA+ 19.18 5%Due 611/2036 4.26% 169,346.02 2.71% 663.90 4,984.23 AAA 4.22 3141OF4V4 FNMA P.I#FN 888336 314,186.24 M/1012013 337,760.23 109.40 343,722.26 0.11 % Aaa/AA+ 19.27 5%Due 7I1/2G36 4.25% 333,940A3 L84% 1,309.11 9,781.83 AAA 3.10 1,908,558.77 1,992,774.72 0.63% Aaa I AA+ 14.56 Total Mortgage Pass Than 1,876,175.18 3.90% 1,911,636.84 2.20% 4,707.42 81,137.88 AAA 4.01 MUNICIPAL BONDS 73358WAG9 Pon Authority of NY&NJ TE-REV 2,440,000,00 Various 2,507,633,89 109.24 2,665,529.20 0.85% Aa3/AA- 2.67 5,309%Due lW/2019 4,97% 2,457,319+87 1,75% 43,179.87 208,209,33 AA- 2.47 64971M5E8 New York NY TE-REV 1,400,000.00 1012712010 1,400,000+00 106.63 1,492,862.00 0.48% Ant/AAA 3.59 4.075%Due 11/1/2020 4.08% 1.400,000.00 2.14% 23,770.83 92,862.00 AAA 3.29 913366EJ5 Univ of California Rgts Med TE-REV 400,000.00 11I09/2010 400,000.00 111.m 4,tE536.00 0.14% Aa3/AA- 4.13 5.035%Due 511512021 5.04% 400,000.00 2A3% 7,608.44 45,536.00 NR 3.69 4,307,633.89 4,603,927.20 1.47% Aa21 AA 3.11 Total Municipal Bonds 4,240,000.00 4.68% 4,257,319.87 1.91% 74,559.14 346,607.33 AA 2.85 SUPRANATIONAL 4595OKBS8 International Finance Corp Note 5,000,000.00 03/16/2015 5,020,700.00 99.99 4,999,405.00 1.58% Ann IAAA 0.07 1%Due 412412017 0.80% 5,000,619A2 1A8% 21,805.56 (1,214.12) NR 0.06 4581XOCGI Inter-American Dev Bank Note 5,000,000.00 MIK12015 5,019,550.00 99.97 4,998,520.00 1.57% Aaa I AAA 0.29 1%Due 7/14/2017 0.81 % 5.002,70372 1.10% 10,694.44 (4,183.72) AAA 0.29 4590MEJB Intl.Bank Recon&Development Note 5,000,000.00 Various 4,991,170,00 99.65 4,982,630.00 1.57% Me IAAA 1.21 1%Do.6/15/2018 1.07% 4,996,006.12 1.29% 14,722.22 (13,376.12) AAA 1.19 4581XOCS5 Inter-American Day Bank Note 3,500,000.00 0712 016 3,590,405.00 99.70 3,489,615.51) 1.10% Aaa I AAA 3.96 1.875%Due 3115/2021 1.30% 3,577,108+58 1.95% 2,916.67 (87,493.08) AAA 3.79 4595DKCJ7 International Finance Corp Note 2,500,000.00 ll/D9/2016 2,441,600.00 96.33 2,408,240.00 0.76% Aaa IAAA 4.31 1.125%Due 7/20/2021 1.64% 2,446,441.10 2.02% 5,546.88 (38,201.10) NR 4.16 Chandler Aseer Menegement-CONFIDENTIAL 38 CAROrangeCounty Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Purchase Da:o Cost Va:u: Mut Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security Description Par Value/Units Book Yie d Book Va Mut Y7rM Accrued Int. Gain/Loss Fitch Duration SUPRANATIONAL 4581XOCW6 Inter-American Dev Bank Note 3,000,000.00 01/10/2017 2,996,310.00 100.38 3,011,490.00 0.95% Aaa/NR 4.81 2.125%Due 1/1812022 2.15% 2,996,457.52 2.04% 12,927.08 15,032,48 AAA 4.52 24,059,735.00 23,889,900.50 7.53% Asa/AAA 1.94 Total Supranational 24,000,000.00 1.19% 24,019,336.16 1.49% 68,612.85 (129,435.66) AAA 1.86 US CORPORATE 11 06050TLX8 Bank of America Note 600,000.00 05/01/2014 600,000.00 100.04 600,261.00 0.19% Al/A+ 0.10 1.454%Due 51812017 1.45% 600,000.00 1.03% 1,284.12 261.00 NR 0.10 94988J21.0 Walls Fargo Bank Callable Note Curly 500,000.00 NIOW2014 W0,000.00 100.03 500,142.50 0.16% Aa2/AA- 0.21 6/15/2016 0.41 % 500,000.00 0.27% 90.70 142.50 AA 0.21 0.408%Due 6/15/2017 060505DP6 Bank of America Corp Note 3,800,000.00 01/15/2014 4,334,014.00 102.64 3,900,217.40 1.25% Baal/BBB+ 0.67 5.75%Due 121112017 1.95% 3,892,410.93 1.75% 72,833.33 7,806.47 A 0.65 166764AAB Chevron Corp Callable Note Cunt 2,000,000.00 121M12014 1,08,600.00 99.83 1,996,668A0 0.63% Aa2/AA- 0.68 11&17 1.30% 1.997,410.99 1.38% 7,114.67 (742.99) NR 0.59 f.104%Due 121512017 458140AL4 Intel Corp Note 2,000,00D00 01/26/2015 2,008,280.00 100.06 2,001,290.00 0.0% Al/A+ 0.71 1.35%Due 12115/2017 1.20% 2,002,032+58 1.26% 7,950.00 (742.58) A+ 0.70 40628HPH9 HSBC USA Inc Note 3,000,000.00 Various 3.003,290.00 99.94 2,998,116.00 0.95% A2IA 0.80 1.625%Due 111612018 1.59% 3,000,875.35 1.70% 10,156.25 (2,759.35) AA- 078 38141GFG4 Goldman Sachs Group Inc Note 600,000.00 Various 692,806.00 103.27 619,603.20 0.20% A3/BBB+ 0.80 5.95%Due 111812018 2.73% 614,339.50 1SO% 7,239.17 5,263.70 A 078 674599CD5 Occidental Petroleum Callable Note Cont 2,000,000.00 011MIN15 1,986,340.00 99.97 1,999,39SM 0.63% MIA 0.88 1/15/18 1.73% 1.996,141.92 1.53% 3,833.33 3,254.08 A 0.78 1.5%Do.V1512018 025816AY5 American Express Coach Note 2,900,000.00 Various 3,377,385.79 105.01 3,045,234.90 0.96% A3/BBB+ 0.97 7%Due 311912018 4.20% 2,964,865.70 135% 6,766.66 80,369.20 A 0.94 073902CD8 Bear Stearns Note 3,200,000.00 0111WH14 3,523,520.00 103.43 3,309,878.40 1.05% A31NR 1.25 4.65%Due 7/212018 2.25% 3.291,095,90 1.86% 36,786.67 18782.50 A+ 1.21 532457BF4 Eli Lilly B CO Note 4,000,000.00 Various 4,009,675.00 100.70 4,027,916.00 1.27% A2/AA- 1.96 1.95%Due 3115/2019 1.89% 4,004,43274 1.59% 3,466.67 23,483.26 A 'Si 02665WAH4 American Honda Finance Note 4,000,000.00 Various 4,046,640.00 100.87 4,034,972.00 1.27% Al/A+ 2.38 2.25%Due 8/1512019 1.93% 4,029,041.41 1.87% 11,500.00 5,930.59 NR 2.30 06406HCW7 Bank of New York Callable Note Cont 2,120,000.00 0211012016 2,142,175.20 100.95 2,140,095.48 0.67% At/A 2.45 wll/2019 1.99% 2.135,027.53 1.89% 2,708.89 5,067.95 AA- 2.29 2.3%Due 9/11/2019 24422ESS9 John Dears Capital Corp Note 5,000,000.00 Various 5,046,984.00 101.07 5,053,685.00 1.59% A2/A 2.46 2.3%Due 9/16/2019 2,07% 5,026,366.27 1.85% 4,791.67 27,318.73 A 2.38 Chandler Asset Management-CONFIDENTIAL 39 ��" Orange County Sanitation District Long Term Holdings Report Account As of 3/31/17 Purchase Da:o Cost Va:u: Mid Price Market Value %of Pod. Ml Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt Y7M Accrued Int. Gain/Loss Fitch Duration US CORPORATE 36962G7MO General Electric Capital Corp Callable 5,000,000.00 Various 5,014,950.00 101.08 5,053,980.00 1.60% Al/AA- 278 Note 1X 1M/2019 2.13% 5,008,499.02 118% 25,055.55 45,480.98 AA- 2.59 2.2%Due 1/92020 46625HKA7 JP Morgan Chase Callable Note Cant 2,000,000.00 0210612015 1.994,880.00 100.34 2,006,886.00 0.63% A3/A- 2.82 1212312019 2.30% 1.997,090.07 2.12% 8,500.00 9,795.93 A+ 2.63 2.25%Due 112312020 4042811PR7 HSBC USA Inc Note 1,250,000.00 02/05 016 1,222,787.50 100.26 1,253,226.25 0.39% A2/A 2.93 2.35%Due 3I52020 2.92% 1,230,410+66 2.26% 2,121,53 22,815+59 AA- 2.81 747525AD5 Oualcomm Inc Note 5,000,000.00 OW1912015 4,995,195AO 100.22 5,011,075.00 1.59% Al/A+ 3.14 2.25%Due 512012020 2.27% 4.996,985.61 2.18% 40,937.51 14,089.39 NR 2.99 94974BGM6 Wells Fargo Corp Note 5,000,000.00 07/16/2015 5,001,660.00 100.99 5,049,440.00 1.59% A2/A 3.31 2.6%Due 7/22/2020 2.59% 5,001,090.97 2.29% 24,916.67 48,349.03 AA- 3.14 037833BS8 Apple Inc Callable Note Cant 1/23/2021 4,000,000.00 OW2312016 4,050,840.00 100.30 4,012,128.00 1.26% Aa1/AA+ 3.90 2.25%Due 2/23/2021 1.98% 4.041,585.51 2A7% 9,500.00 (29,457.51) NR 3.70 30231 GAV4 Exxon Mobil Corp Callable Note Cant 3,000,000.00 Various 3,016,097AO 100.19 3,005,802.00 0.95% Aaa/AA+ 3.92 212021 2.10% 3,013,237.08 2.17% 5,555.01 (7,435.06) NR 3.73 2.222%Due 31112021 166764BG4 Chavron Corp Callable Note Cant 2,500,000.00 OW20IN16 2,485,350.00 99.12 2,478,020.00 0.78% Aa2/AA- 4.13 Vl MD21 2.23% 2.487,857.51 2.32% 19,687.50 (9,837.51) NR 3.90 2.1%Due V16/2021 61747WAL3 Morgan Stanley Note 2,800,000.00 06/O6/2014 3,200,848.00 110.90 3,105,065.60 0.98% AS I BBB+ 4.33 5.5%Due 7/28/2021 3.24% 3,043,064.13 2.81% 26,950.00 62,001.47 A 3.85 594918BPB Microsoft Callable Nate Cont 7/e/21 3,045,000.00 Various 3,041,385.15 97.44 2,967,133.26 0.93% Aaa IAAA 4.36 1.55%Due 802021 1.57% 3.041,852.35 2.17% s948.52 (74,719.09) AA-, 4.17 0640BRAA5 BANK OF NY MELLON CORP Note 2,500,000.00 02/08/2017 2,504,475.00 100.04 2,501,122.50 0.79% At[A 4.86 Callable 117/22 CONT 2.56% 2,504,35T43 2.59% 9,760.00 (3,234.93) M. 4.44 2.6%Due 2/72022 73,788,168.44 72,671,354.49 22.95% At/A+ 2.54 Total US Corporate 71,815,000.00 2.18% 72,420,071.16 1 96% 356,444.42 251,283,33 A+ 2.40 US TREASURY 912828SSO US Treasury Note 2,500,000.00 12/22/2015 2.500203.68 100.02 2,500,395.00 079% Aaa IAA+ 0.08 0,875%Due 4/3012017 0,87% 2,500,011,96 O68% 9,185.08 383.04 AAA 0.08 91282SG20 US Treasury Note 2,500,000.00 Various 2,487,195.87 99.95 2,498,827.50 0.79% Aaa/AA+ 0.63 0.875%Due 11/15/2017 1.05% 2,497,257A7 0.95% 8,278.66 1,570.03 AAA 0.62 912828UR9 US Treasury Note 3,500,000.00 AM/2016 3,496,457.04 99.72 3,490,158.00 1.10% Aaa/AA+ 0.92 0.75%Due 2/2812018 0.81 % 3,498,249+55 1.06% 2,282.61 (8,091.55) AAA 0.91 9128281533 US Treasury Note 11,000,000.00 Various 11.042,439,19 100.46 11,051,126.00 3.48% Aaa/AA+ 1.84 1.5%Due 1/31/2019 1.37% 11,025,102.49 1.24% 27,368.07 26,026.61 AAA 1.80 912828SN1 US Treasury Note 5,000,000.00 12282016 5,016,423.00 100.47 5,023,635.00 1.58% Aaa/AA+ 2.00 1.5%Due 3/312019 1.35% 5,014,564.92 1.26% 204.92 9,070.08 AAA 1.97 Chandler Aseel Menegerant-CONFIDENTIAL 40 ��" Orange County Sanitation District Long Term Holdings Report Account#10268 As of 3/31/17 Purchase Da:o Cost Va:u: Mut Price Market Value %of Pod. MoodyIS&P Maturity CUSP Security Description Par Value/Units Book Yie d Book Va Mkt YTM Accrued Int. Gain/Loss Fitch Duration US TREASURY IM 912828WS5 US Treasury Note 2,000,000.00 Various 1,996,861.44 100.65 2,013,046.00 0.64% Ann/AA+ 2.25 1.625%Due 6/3012019 1.66% 1,998,571.45 1.33% 8,169.89 14,474.55 AAA 2.20 912828WW6 US Treasury Note 5,000,000.00 Various 5,012,388.70 100.63 5,031,249.99 1.59% Aaa/AA+ 2.33 1.625%Due 713112019 1.57% 5,005,820+39 1.35% 13,466.85 25,429+60 AAA 2.28 912828F39 US Treasury Note 5,800,000.00 10/27/2014 5.873,186.87 100.89 5,851,881.00 1.84% Aaa/AA+ 2.50 1.75%Due 9/3012019 1.48% 5,837,122.60 1.38% 277.33 14,768.40 AAA 2.44 91282BG61 US Treasury Note 7,500,000.00 12/19/2014 7,449,634.50 100.17 7,512,600.00 2.37% Ass/AA+ 2.67 1.5%Due 1113012019 1.64% 7,472,835.02 1.44% 37,706.04 39,764.98 AAA 2.59 912828XE5 US Treasury Note 5,000,000.00 12/21/2016 4,966,423+00 99.75 4,987,500.00 IN Is Aaa/AA+ 3.17 1.5%Due 5/31/2020 170% 4.969,096.33 1.58% 25,137.36 18,403.67 AAA 3.07 91282BL99 US Treasury Note 5,500,000.00 Various 5,424,666.87 98.91 5,439,841.00 1.72% Aaa/AA+ 3.59 1.375%Due 10/31Y2020 1.67% 5,445,016.67 1.89% 31,754.14 (5,175.67) AAA 3.46 9128281489 US Treasury Note 6,000,00000 Various 5,895,840.41 98.60 5,915,862.00 1.86% Aaa/AA+ 3.84 1.375%Due 113112021 1.81 % 5,903,593+35 1.75% 13,674.03 12,268+65 AAA 3.71 912828TM US Treasury Note 7,000,000.00 Various 6757,914.08 96.75 6772,227.00 2.13% Aaa/AA+ 4.50 1.125%Do.9/3012021 1.88% 6,773,309.66 1.88% 215.16 (1,082.56) AAA 4.36 91282BT67 US Treasury Note 6,000,000.00 12/13/2016 5,813,691.98 97.20 5,831,952A0 1.84% Ass/AA+ 4.59 1.25%Due 1013112021 1.92% 5,824,983.38 1.89% 31,491.71 6,968.62 AAA 4.40 91282BU65 US Treasury Note 7,000,000.00 12/28/2016 6,900,492+20 W.35 6,954,339.00 2.20% Aaa/AA+ 4.67 1.75%Due 11/30/2021 2.06% 6,905,642.02 1.90% 41,057.69 48,696.98 AAA 4.43 91282SV72 US Treasury Note 3,000,000.00 02/27/2017 3,004,814.74 99.78 2,993,436.00 0.94% Ass/AA+ 4.84 1.875%Due 1/31/2022 1.84% 3,004729.05 1 M% 9,323.20 (11,293.05) AAA 4.59 912828WUO US Treasury Inflation Index Note 10,634,208.00 Various 10,520,376.09 99.07 10,534,980.20 3.31 % Aaa IAA+ 7.30 0.125%Due 711512024 023% 10,550,891.93 025% 2,79075 (15,91173) AAA 7.25 94,159,D09.66 94,403,057.69 29.75% Anal AA+ 3.45 Total US Treasury 94,934,208.00 1.44% 94,226,798.14 1,37% 262,363.49 176,259,55 AAA 3.35 317,994,586.34 317,222,450.85 100.00% Aat I AA 2A0 TOTAL PORTFOLIO 316,751,388.73 1.62% 316,645,629.32 1.55% 1,000,828.89 576,821.53 AAA 2.43 TOTAL MARKET VALUE PLUS ACCRUED 318,223,279.74 Chandler Asset Management-CONFIDENTIAL 41 OROrange County Sanitation District Liquid Holdings Report Account#10282 As of 3/31/17 Purchase Da:o Cost Va:u: Mut Price Market Value %of Pod. Moodi Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt YTM Accrued Int. Gain/Loss Fitch Duration AGENCY 313385EXO FHLB Discount Note 5,000,000.00 01/31/2017 4,993,475.00 99.96 4,997,975.00 5.87% P-1/A-1+ 0.08 0.54%Due 4/26/2017 0.55% 4,997,975.00 0.55% 0.00 0.00 F-1+ 0.08 3131 FNMA Discount Note 4,000,000.00 01/20/2017 3,993,990.50 91 3,998,215.00 4.69% P-1IA-1+ 0.08 054%Due 511/2017 0.54% 3,998,215+00 0.54% 0.00 0.00 F-1+ 0.08 313385FE1 FHLB Discount Note 2,000,000.00 0112012017 1.996,791.67 99.95 1,998,961.11 2.35% P-1 I A-1+ 0.10 0.56%Due 515/2017 0.56% 1,998,961.11 0.56% 0.00 0.00 F-1+ 0.10 313385GR1 FHLB Discount Note 9,000,000.00 03/30/2017 8,986,332.51 99.85 8,986,717.51 10.55% P-1/A-1+ 0.19 0.77%Due 619/2017 0.78% 8,986,717.51 0.78% 0.00 0.00 F-1+ 0.19 31398AD1,11 FNMA Note 4,500,000.00 Various 4,571,305+00 101 4,538,727.00 5.41 % Aaa/AA+ 0.20 5.375%Due 6/12/2017 0.74% 4.540,807.36 0.99% 73,234.37 (2,080.36) AAA 0.20 3137EADH9 FHLMC Note 2,000,000.00 03/30/2017 2,000,880.00 100.03 2,000,622.00 2.35% Aea/AA+ 0.26 1%Due 6/29/2017 0.82% 2,000,870.22 0.87% 5,111.11 (248.22) AAA 0.24 26,542,774.68 26,521,217.62 31.23% Aaa/AAA 0.15 Total Agency 26,500,000.00 0.68% 26,523,546.20 0.73% 78,345.48 (2,328.58) AAA 0.15 COMMERCIAL PAPER i31 89233GRL2 Toyota Motor Credit Discount CP 1,000,000.00 12/23/2016 996,689.44 99.95 999,466.94 1.17% P-1/A-1+ 0.05 1,01%Due 412012017 1,03% 999,466.94 103% 0.00 0,00 NR 0.05 06538BU76 Bank of Tokyo Mitsubishi NY Discount 1,705,000.00 031M12017 1,698,181.89 all 1,699,579.04 2.00% P-1/A-1 0.27 CP 1.20% 1,699,579.04 1.20% 0.00 0.00 NR 0.27 1.18%Doe 71W2017 2,694,871.33 2,699,045.98 3.17% P-1/A-0 0.19 Total Commercial Paper 2,705,000.00 1.14% 2,699,045.98 1.14% 0.00 0.00 NR 0.19 MONEY MARKET FUND Fit 261908107 Dreyfus Trsy/Agcy Cash Management 3,753,584.00 Various 3,753,5M 00 1.00 3,753,581 4.41 % Aso I AAA 0.00 521 0,61 % 3,753,584.00 0S1% 0.00 0,00 AAA 000 3,753,584.00 3,753,584.00 4.41 % Aaa/AAA 0.00 Total Money Market Fund FI 3,753,584.00 0.61% 3,753,584.00 0.61% 0.00 0.00 AAA 0.00 NEGOTIABLE CD 89113E7K6 Toronto Dominion Yankee CD 1,150,000.00 12/20/2016 1,149,964.14 100.00 1,149,991.44 1.36% P-1IA-1+ 0.09 1.15%Due 5IW2017 1.15% 1,149,991.44 1A5% 12,159.65 0.00 NR 0.09 1,1,10 10 1,149,911.44 1.36% P-1/A-1+ 0.09 Total Negotiable CD 1,150,000.00 1.15% 1,149,991.44 1.15% 12,159.65 0.00 NR 0.09 SUPRANATIONAL 45950KBS8 International Finance Corp Note 1,000,000,00 10/26/2016 1,001,090,00 99.99 999,881,00 1.18% Ass I AAA 007 1%Due 4/2412017 078% 1.000,140.84 118% 4,361.11 (259.84) NR 006 Chandler Aosn Management-CONFIDENTIAL 42 CAROrangeCounty Sanitation District Liquid Holdings Report Account f)10282 As of 3/31/17 Purchase Da:o Cost Va:u: Mut Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mut Y"IrM Accrued Ind. Gain/Loss Fitch Duration SUPRANATIONAL 459058DC4 Intl.Bank Recon B Development Note 1,162,000.00 02/06/2017 1,163,057.42 99.99 1,161,887.29 1.37% Aaa I AAA 0.30 1.125%Due 7/1812017 0.92% 1,162,718.25 1.16% 2,650.81 (830,96) AAA 0.30 2,164,147.42 2,161,768.29 2.55% Ann I AAA 0.19 Total Supranational 2,162,000.00 0.85% 2,162,859.09 1A7% 7,011.92 (1,090.80) AAA 0.19 US CORPORATE 037833AM2 Apple Inc Note 1,000,000.00 M/08/2016 1,002,590.00 100.01 1,000,052.00 1.18% Apt/AA+ 0.10 1.05%Due 5I5/2017 0.76% 1,000,270.12 0.96% 4,229.17 (218.12) NR 0.10 94974BFD7 Walls Fargo Cory Note 1,000,000.00 W10212016 1,008,550.00 100.07 1,000,724.00 1.18% A21A 0.10 2.1%Due 5/8/2017 1.16% 1,000.944.33 1.38% 8,361.67 (220.33) AA- 0.10 084664BS9 Berkshire Hathaway Note 1,000,000.00 01/18/2017 1,001,760.00 100.02 1,000,212.00 1.18% Aa2/AA 0.12 1.6%Due 5/15/2017 1.03% 1,000,691A3 1A2% 6,044.44 (479.43) A+ 0.12 91159HHD5 US Bancorp Callable Note Cant 740,000.00 Various 740,928.75 100.01 740,064.39 0.87% Al/A+ 0.12 4/15/2017 1,08% 740,163.55 1.33% 4,612.67 (99,16) AA 0.04 1.65%Due 5/15/2017 24422ESN0 John Deere Capital Corp Note 1,000,000.00 01/18/2017 1,000,420.00 N.N 999,903.00 1.18% A2/A 0.20 1.125%Due 611212017 1.01 % 1,000,216.00 1A7% 3,406.25 (313.00) A 0.20 68389XAN5 Oracle Corp Note 1,000,000.00 03130I2017 999,870.00 99.87 999,740.00 1.18% Al/AA- 0.54 1.2%Due 1 0/1 512 01 7 in% 999,870+66 1.25% 5,533.33 (130.66) A+ 0.53 166764BC3 Chevron Carp Note 1,000,000.00 0111612017 1,000,780.00 100.03 1,000,335.00 1.18% As2/AA- 0.61 1.344%Due I1/912017 1.24% 1,000,597.10 1.29% 5,301.33 (262.10) NR 0.60 369604BC6 General Electric Cc Note 1,000,000.00 01I26I2017 1,033,650.00 102.0 1,025,325.00 1.22% At IAA. Me 5.25%Due 1MM17 1.24% 1,027,116.02 1.49% 16,770.83 (1,791.02) AA- 0.66 02665WATB American Honda Finance Note 1,000,000.00 0312712017 1,001,140.00 101 1,000,4 1.00 1.18% Al/A+ 0.95 1.5%Due W13/2018 1.38% 1.001,133.45 1AS% 750.00 (692.45) NR 0.94 8,789,688.75 8,766,796.39 10.36% At/AA- 0.39 Total US Corporate 8,740,000.00 1.13% 8,771,002+66 1.31% 64,989.89 (4,208.27) A+ 0.38 USTREASURY 9127%K01 US Treasury Bill 10,000,000.00 0113112017 9,991,595A4 99.99 9,999,353.47 11.74% P-1/A-1+ 0.02 0.47%Due 416/2017 0.47% 9,999,353A7 0.47% 0.00 0.00 F-1+ 0.02 912791 US Treasury Bill 15,000,000.00 1212312016 14,971,999.58 99.97 14,995,491.46 17.61 % P-11A-1+ 0.05 0.57%Due 412012017 0.50% 14,995,491.46 0.58% 0.00 0.00 F-1+ 0.05 Chandler Asset Mane9emenl-CONFIDENTIAL 43 GilOrange County Sanitation District Liquid Holdings Report Account#10282 As of 3/31/17 Purchase Da:o Cost Va:u: Mid Price Market Value %of Pod. MoodyIS&P Maturity CUSIP Security Description Par Value/Units Book Yie d Book Va Mkt Y7M Accrued Ind. Gain/Loss Fitch Duration US TREASURY 912796LG2 US Treasury Bill 15,000,000.00 Various 14,962,819.03 99.85 14,977,406.67 17.58% P-1IA-1+ 027 0.567%Due 7/6I2017 0.57% 14,977,406.67 0.57% 0.00 0,00 F-1+ 0,26 39,926,413.75 39,972,251.60 46.93% P-1/A-1+ 0.12 Total US Treasury 40,000,000.00 0.55% 39,972,251.60 0.55 H 0.00 0.00 F-1+ 0.12 85,021,444.07 85,024,655.32 100.00% Aaa I"A 0.16 TOTAL PORTFOLIO 85,010,584.00 0.69% 85,032,280.97 0.73% 152,506.74 (7,625.65) AAA 0.16 TOTAL MARKET VALUE PLUS ACCRUED 85,177,182A6 Chandler Aseel Management-CONFIDENTIAL 44 CAROCSDLehman Exposure Holdings Report Account#70284 As of 3/31/17 Purchase D :a Cost V :u: Mid Price Market Value %of Pon Ma.d,IS&P Maturity CUSIP Security Description Par Value/Units Book YI:d Book Va Mkt Y­TM Accrued Int. Gain/Loss Fitch Duration COMMON STOCK SLHOPNTA4 Lehman Brothers,Inc Open Position 60,641.49 11/21/2014 57,842.64 0.42 25,621.03 13.69% NR/NR 0.00 Long Exposure 0.00% 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 Due 3/31/2017 57,842.64 25,621.03 13.69% NR/NR 0.00 Total Common Stock 60,641.49 NIA 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 US CORPORATE 525ESC167 Lehman Brothers Note-Defaulted 600,000,00 09/19/2008 352,258,37 6.50 39,000,00 20.84% NRINR 082 Due 112412018 0.00% 352258.37 000% 0.00 (313,258.37) NR 000 525ESCOV6 Lehman Brothers Note-Defaulted 2,000,000.00 09/18/2008 1,138,391,06 6.13 122,500.00 65.47% NR/NR 3258 Due 10/2212049 0.00% 1,138,391.06 0.00% 0.00 (1,015,891.06) NR 0.00 1,490,649.43 161,500.00 86.31 % NR I NR 2/.91 Total US Corporate 2,600,000.00 N/A 1,490,649.43 0.00% 0.00 (1,329,149.43) NR 0.00 1,548,492.07 187,121.03 100.00% NRINR 21.50 TOTAL PORTFOLIO 2,660,641.49 NIA 1,548,492.07 0.00% 0.00 (1,361,371.04) NR 0.00 TOTAL MARKET VALUE PLUS ACCRUED 187,121.03 Chandler Ae cManagement-CONFIDENTIAL 45 c111JI Disclosure Information contained herein is confidential. Prices are provided by IDC, an independent pricing source. In the event IDC does not provide a price or if the price provided is not reflective of fair market value, Chandler will obtain pricing from an alternative approved third party pricing source in accordance with our written valuation policy and procedures. Our valuation procedures are also disclosed in Item 5 of our Form ADV Part 2A. Rating Agency Comparisons A summary of investment grade ratings are listed below. More complete descriptions of Moody's and Standard & Poor's ratings are included in the following pages. Quality/Grade Mood 's Standard & Poor's Fitch Best Quality Aaa AAA AAA High Quality Aal AA+ AA+ Aa2 AA AA Aa3 AA- AA- Upper Medium Grade Al A+ A+ A2 A A A3 A- A- Medium Grade Baal BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB1 Moodv's - Investment Grade "Aaa" - Bonds rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. "Aa" - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. "A" - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Mae" - Bonds which are rated Baa are considered as medium grade obligations; i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Bonds in the As, A, and Bee are also assigned "1", "2", or "S' based on the strength of the issue within each category. Accordingly, "At" would be the strongest group of A securities and "AY would be the weakest A securities. Be, B, Caa, Ca, and C - Bonds that possess one of these ratings provide questionable protection of interest and principal ("Be" indicates some speculative elements; "B" indicates a general lack of characteristics of desirable investment; "Caa" represents a poor standing; "Ca" represents obligations which are speculative in a high degree; and "C" represents the lowest rated class of bonds). "Caa", "Ca" and "C" bonds may be in default. Standard and Poor's-Investment Grade AAA- Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay interest and repay principal Is extremely strong. AA - Debt rated "AA" has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in small degree. A - Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB - Debt rated "BBB" is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. Standard and Poor's - Speculative Grade Retina Debt rated "BB", "B", "CCC", "CC" and "C" is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. "BB" indicates the least degree of speculation and "C" the highest. While such debt will likely have some quality and protective characteristics these are outweighed by major uncertainties or major exposures to adverse conditions. BB - Debt rated "BB" has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The "BB" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BBB" rating. B - Debt rated "B" has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The "B" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BB" or"BB" rating. CCC - Debt rated "CCC' has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The "CCC' rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "B" or"B" rating. CC - The rating "CC' typically is applied to debt subordinated to senior debt that is assigned an actual or implied "CCC' debt rating. C-The rating"C'typically is applied to debt subordinated to senior debt which is assigned an actual or implied "CCC" debt rating. The "C' rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued. Cl -The rating "Cl" is reserved for income bonds on which no interest is being paid. D - Debt rated "D" is in payment default. The "D" rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized. Plus (+) or Minus (-) - The ratings from "AA" to "CCC' may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. NR-Indicates no rating has been requested,that there is insufficient information on which to base a rating, or that S&P does not rate a particular type of obligation as a matter of policy. 'e? Op April 30, 2017 STAFF REPORT Certificates of Participation (COP) Quarterly Report for the Period Ended March 31, 2017 Summary The District began issuing Certificates of Participation (COPS) in 1990. These COPS were a part of our long-term financing plan that included both variable interest rate and traditional fixed rate borrowing. Following are the current outstanding debt issues of the District: In May 2009, the District issued $200 million of fixed rate COPS, Series 2009A at a true interest cost of 4.72 percent for the issue. In May 2010, the District issued $80 million of fixed rate BABs, Series 2010A at a true interest cost of 3.68 percent for the issue. In December 2010, the District issued $157 million of fixed rate BABs, Series 2010C at a true interest cost of 4.11 percent for the issue. In October 2011, the District issued $147.595 million of fixed rate COPS, Series 2011A refunding a portion of the Series 2000 variable rate debt and a portion of the Series 2003 fixed rate debt. The true interest cost for the issue is 2.61 percent. In March 2012, the District issued $100.645 million of fixed rate COPS, Series 2012A refunding the Series 2003 fixed rate debt. The true interest cost for the issue is 3.54 percent. In August 2012, the District issued $66.395 million of fixed rate COPS, Series 2012B refunding the Series 2000 variable rate debt. The true interest cost for the issue is 1.50 percent. With the issuance of Series 2012B, there remains no variable interest rate COPS at the District. 0 Sl) ♦ P.O.Box 8127 ♦ FouMeln Valley,C 9272M127 ♦ C714)992-2411 Quarterly COP Report For the Three Months Ended March 31, 2017 Page 2 of 2 In August 2014, the District issued $85.09 million of fixed rate COPs, Series 2014A, refunding a portion of Series 2007B debt. The true interest cost for the issue is 2.34 percent. In February 2015, the District issued $127.51 million of fixed rate COPs, Series 2015A, refunding $152.99 million of the Series 2007E debt. The true interest cost for the issue is 3.30 percent. In March 2016, the District issued $145.88 million of fixed rate CANS, Series 2016A, refunding $162.78 million of the Series 2009A fixed rate debt. The true interest cost for the issue is 3.02 percent. In November 2016, the District issued $109.875 million of fixed rate CANS, Series 2016B, refunding the Series 2014B CANS. The true interest cost for the issue is 0.87 percent. In February 2017, the District issued $66.37 million of fixed rate COPs, Series 2017A, refunding $91.885 million of the Series 2007A debt. The true interest cost for the issue is 2.55 percent. Additional Information The graph entitled, "OCSD COP Rate History Report,' shows the various fixed interest rates of the District's thirteen debt issues. Attachments 1. Graph - OCSD COP Rate History Report Prepared by Finance,4/1 312 01 7,4:33 PM OCSD COP RATE HISTORY REPORT MARCH 2O17 0.00 4.00 3.00 w 2.00 1.00 0.00 ° ° DATE g i a ,�: & .. '� a a 3 +Series 2007A Fixed —Series 20070 Fixed denied 2008E Fixed .Senee 20M Fixed SeAes 2010A Fxetl +Sei 2010C Fixed sense 2011A'xM �Berea 2012F Fixed — Si 2012B Fixed aeries 201"9xed —Sed.2010B 1. sense 201 Is H. —Sedn.18F Fixed —sell.2018B Fhb sense 2017A Rxed HAdeptiasdi220\CommonWoniMy and Quarterly Treasumes Report\FV 10-17TCOP Rate History Report FV 1&17 2016-17 Third Quarter Review This Page Intentionally Left Blank ORANGE COUNTY SANITATION DISTRICT FINANCIAL MANAGEMENT DIVISION 10844 Ellis Avenue Fountain Valley, California 92708-7018 714.962.2411 www.ocsd.com 3/31/17 ADMINISTRATION COMMITTEE Melting Dat0 TOBE.Of Dir. Bs/10117 os/z4/17 AGENDA REPORT Item Item Number 5 19 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: WORKERS' COMPENSATION THIRD PARTY ADMINISTRATION PROGRAM GENERAL MANAGER'S RECOMMENDATION Authorize an additional one-year renewal period of the agreement with Keenan and Associates, for the period July 1, 2017 through June 30, 2018, for a total amount not to exceed of$48,000. BACKGROUND In 2012, the Orange County Sanitation District (Sanitation District) competitively bid for the services of a workers' compensation third party administrator (TPA). Keenan and Associates was chosen from a group of qualified firms and the Sanitation District entered into a one-year agreement with four subsequent one-year renewals. The current and last renewal expires on June 30, 2017. Keenan and Associates provides oversight of injured workers' medical claims to include referrals to the appropriate medical provider, utilization review for appropriateness of medical services requested, claims payment for services rendered, disability payments to employees, assures all state mandated timelines are met, and works as a liaison between the employee and the medical provider. Additionally, the TPA provides legal representation on behalf of the Sanitation District to the Workers' Compensation Board and manages any litigated claims. To ensure continuity of medical care and service on existing claims, as well as continued legal representation on litigated claims, staff recommends continuing the relationship with Keenan and Associates for one additional renewal period to prepare for a Request for Proposal. RELEVANT STANDARDS Protection of Orange County Sanitation District assets PROBLEM Transitioning to a new workers' compensation TPA at this time would be extremely disruptive, due to number of ongoing cases and their complexity. Page 1 of 2 PROPOSED SOLUTION Maintain Keenan and Associates as the Sanitation District workers' compensation TPA for one additional year to ensure program continuity, optimal service, and continued reliable and timely program administration while a Request for Proposal is completed. This will allow a smooth transition if an alternate vendor is chosen. TIMING CONCERNS Board approval is necessary to ensure the Sanitation District meets our workers' compensation program administration demands. RAMIFICATIONS OF NOT TAKING ACTION The Sanitation District will not have access to workers' compensation services. PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance No. OCSD47. This item has been budgeted in the FY 2016-17 budget. ATTACHMENT The following aftachment(s) may be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: N/A Page 2 of 2 ADMINISTRATION COMMITTEE Melting Dat0 TOBE.Or Dir. 05/10/17 os/z4/17 AGENDA REPORT Item Item Number 6 20 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: 2017-18 OPERATIONAL PROPERTY-LIABILITY INSURANCE RENEWALS GENERAL MANAGER'S RECOMMENDATION Approve not-to-exceed numbers as follows, with the understanding that the Orange County Sanitation District's insurance broker will continue to negotiate with insurers to seek the lowest possible premiums prior to the expiration date of the current major insurance policies: • Excess liability insurance from $405,126 to $445,639. • Property and Boiler & Machinery combined from $665,813 to $677,628 . • Earthquake insurance—from $76,385 to $78,062. • Excess workers' compensation insurance — a rate of $0.3133 per $100 of payroll not to exceed $208,000. BACKGROUND The Orange County Sanitation District's (Sanitation District) budget provides funds for the renewal of the following five major insurances for the Sanitation District operations: • Excess General Liability Insurance that also includes public officials errors and omission insurance and professional liability • Excess Workers' Compensation • All-Risk Property and Flood insurance that includes cyber liability insurance • Boiler& Machinery insurance • Earthquake Insurance RELEVANT STANDARDS • Ensure the public's money is wisely spent • Provide a safe and collegial workplace PROBLEM Insurance is necessary to protect the Sanitation District's assets and financial well-being. Page 1 of 2 TIMING CONCERNS The current operations property and liability insurance expires on June 30, 2017. RAMIFICATIONS OF NOT TAKING ACTION Action must be taken before June 30, 2017 or the Sanitation District's insurance will lapse. PRIOR COMMITTEE/BOARD ACTIONS May 2016 - The Board approved renewal of the above five policies for the period July 1, 2016 through June 30, 2017. ADDITIONAL INFORMATION N/A CEQA N/A FINANCIAL CONSIDERATIONS This request complies with authority levels of the Sanitation District's Purchasing Ordinance. This item has been budgeted. ATTACHMENTS The following attachment(s)are included in hard copy and may also be viewed on-line at the OCSD website (www.ocsd.corn with the complete agenda package: • Informational item presented in March 2017 • Letter dated April 17, 2017 from Alliant Page 2 of 2 ADMINISTRATION COMMITTEE Meeting Dare To ad.ofDir. 03/08,17 — AGENDA REPORT Item Number Item Number a — Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Celia Chandler, Director of Human Resources SUBJECT: STATUS OF 2017-18 PROPERTY-LIABILITY INSURANCE RENEWALS GENERAL MANAGER'S RECOMMENDATION Information Only. BACKGROUND The Risk Management Division of Human Resources (Risk Management) provides the Administration Committee an annual status update regarding the renewals of the Orange County Sanitation District's (Sanitation District) major insurance policies for the upcoming year. Risk Management and the operational insurance broker begin the process of renewal each January, and final quotes are typically received in June, shortly before the beginning of the new fiscal year. The Sanitation District's budget provides funds for the renewal of the following five major insurances for Sanitation District operations: 1) Excess General Liability Insurance 2) Excess Workers' Compensation 3) All-Risk Property and Flood insurance 4) Boiler& Machinery insurance 5) Earthquake Insurance The Sanitation District's operational insurance broker will be present at the March Administration Committee meeting to give a short informational presentation about this years insurance outlook. RELEVANT STANDARDS Protection of Orange County Sanitation District assets TIMING CONCERNS Current insurance expires June 30, 2017. RAMIFICATIONS OF NOT TAKING ACTION None at this time because this is informational only; however, action must be taken before June 30, 2017 or the Sanitation District's insurance will lapse. Page 1 of 4 PRIOR COMMITTEE/BOARD ACTIONS May 2016 -The Board approved renewal of the above policies for the period July 1, 2016 through June 30, 2017. ADDITIONAL INFORMATION 1) Excess General Liability Insurance Program The Sanitation District's Excess General Liability Insurance Program is currently provided through the California Municipal Excess Liability Program (CAMEL) and its sister program, the Alliant National Municipal Liability Program (ANML). The Sanitation District has participated in the CAMEL program since FY 1996-97. This program currently provides the Sanitation District with a $40 million dollar policy of comprehensive coverage for municipal liability, bodily injury and property damage, and personal injury. The program was structured to also include Employment Practices and Public Officials Errors & Omissions coverage. The $40 million dollar coverage has a self-insured deductible of $500,000. Since 1997, the Employment Practices portion of coverage has been enhanced from a $2 million dollar sub-limit to the full policy limit of$40 million dollars. The premium cost, approved by the Board (May 2016), forthe current fiscal year, July 2016 June 2017, was $414,927. 2) Excess Workers' Compensation Insurance The Excess Workers' Compensation insurance coverage is with the California State Association of Counties Excess Insurance Authority (CSAC EIA). The Sanitation District has participated in this program or its predecessor since 2003. The Excess Workers' Compensation program currently provides "Statutory" (unlimited) coverage with a self-insured retention (SIR), or deductible, of$1 million dollars. The use of Excess Workers' Compensation Insurance dates back to the late 1980's. The renewal of the Excess Workers' Compensation Insurance for the period July 1, 2016 through June 30, 2017 was approved by the Board (May 2016) and was at an estimated premium of$208,825 based on the estimated 2016-17 payroll. Since the premium itself is based on final payroll, the Sanitation District will not know the exact final premium until the year is over. 3) All-Risk Property and Flood Insurance The All-Risk Property and Flood Insurance Program (Property Insurance) provides for comprehensive coverage for much of the Sanitation District's real and personal property regarding virtually all perils including fire, flood, and business interruption. Page 2 of 4 Current Property Insurance limits are $1 billion dollars for most perils other than flood and earthquakes, and $300 million dollars for flood, with many sub-limits for various situations. In order to reach $1 billion dollars in limits, the broker had to arrange for more than a dozen different insurers. The SIR is $250,000 per occurrence for most types of losses. Since the late 1990's, the Property Insurance has been with a nationwide joint purchase property insurance program called Public Entity Property Insurance Program (PEPIP), one of the world's largest property programs. It is important to note that this joint purchase property insurance program offers the purchasing power of numerous large public entities without the pooling or sharing of coverage or losses. The renewal of All-Risk Property and Flood Insurance (excluding Boiler& Machinery) for the period July 1, 2016 through June 30, 2017 was approved by the Board (May 2016) at a premium of$641,956.23. 4) Boiler& Machinery Insurance The Boiler& Machinery insurance program provides comprehensive coverage for loss caused by machinery breakdown and explosion of steam boilers or other covered process equipment, including damage to the equipment itself and damage to other property caused by covered accident. The current Boiler& Machinery insurance program provides coverage of$100 million dollars per occurrence with deductibles ranging from $25,000 to $350,000 for losses caused by covered machinery breakdown (e.g., motors, steam turbines, digesters, co- gen engines). Damages to the equipment, as well as damages to other property and improvements caused by the machinery breakdown, are covered by the boiler & machinery insurance. This program augments the Sanitation District's all-risk property insurance that covers perils such as fire and flood. The renewal of the Boiler& Machinery Insurance Program was approved by the Board (May 2016)for the period July 1, 2016 through June 30, 2017 $23,857. 5) Earthquake Insurance The Sanitation District previously carried earthquake insurance as part of its Property Insurance, but in the last 15 years earthquake insurance proved difficult to obtain or not cost-effective. The Sanitation District asked its insurance broker each year to survey the market to see if rates have changed. Finally, in 2015 a plan was created to insure several key Sanitation District structures identified by Engineering, thus keeping the cost in line. The insurance is a high deductible plan with a limit of $25 million dollars in total. The cost of the Earthquake Insurance was approved by the Board (May 2016) for fiscal year 2016-17 for nine key structures at $79,448 dollars. Page 3 of 4 ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: N/A Page 4 of 4 A4/liant DRIVER SPECIALTY GROUP April 17, 2017 Mr. Randall Kleinman Orange County Sanitation District 10844 Ellis Avenue Fountain Valley, CA 92708 2017-2018 Insurance Renewal Budgeting Dear Randy: We are midstream in the 2017 renewal process with discussions occurring with OCSD's insurance carriers and other markets for the forthcoming coverage year. While it is too early to have exact renewal costs,we can say that outside of the general liability arena, which we discuss below, the insurance market is trending favorably as respects the outlook for OCSD. Therefore, aside from any market shocks, or significant changes in OCSD's operations, we feel comfortable with the following"not to exceed" cost projections: Excess Liability 2016 2017 $Change % Change Limit 40,000,000 40,000,000 0 0% SIR 5OOk/500k 500k/500k 0 - Premium 405,126 445,639 40,513 10% Excess Workers' Comp Payroll 65,659,233 66,394,910 735,677 1% Limit Statutory Statutory - - Rate Per$100 0.3180 0.3133 (0) -1% SIR 1,000,000 1,000,000 - - Premium 208,825 208,000 (825) 0% Property(incl. B&M) Values 1,919,329,040 1,934,047,456 14,718,416 1% Rate Per$100 0.0346899 0.03504 0 1% Premium 665,813 677,628 11,815 2% Earthquake Values 67,717,939 67,847,862 129,923 0.19% Rate Per$100 0.1128 0.1151 0 2% Premium 76,385 78,062 1,677 2% Total Premium 1,356,149 1,409,329 53,180 3.9% Alliant Insurance Services,Inc. • 100 Pine Sheet, 10 Floor.San Francisco,CA 94111 Pnon°(415)403-1400•w .alliantinsurancc.com•License No.OC36861 A4/liant DRIVER SPECIALTY GROUP Mr. Randall Kleinman April 17, 2017 Page 2 What is most noticeable in the table above is the increase projected, for the General Liability Program. As you are aware, the District participates in the Alliant National Municipal Liability Program (ANML). As we have discussed, the ANML underwriters have expressed concern, or at least an interest, in developing activity on "outside the norm" claims involving a contract dispute, and an employment matter that recently settled beyond expectations. For this reason, we are projecting a 10% increase as a precautionary measure. We expect that the actual renewal costs will come in below this projection, yet we want to allow for a"worst case scenario, and the underwriting of the renewal is still ongoing. Of note, two years ago, the District reviewed three options for adjusting the Self-Insured Retentions (SIR) on the program. The $500,000 attachment point "feels right"based on our understanding of the Districts' tolerance for risk, and its comfort level with historic premium costs. We are happy to present options again if desired. The property and workers compensation markets remain stable, with little in the way of rate change anticipated. This is good news on workers compensation where over the past few years there has been price pressure, and on property, after a few years of a relatively soft market, the pricing floor may have been reached. On a continued positive note, the Earthquake market remains aggressive, and we are cautiously optimistic that a decrease in rate may be achieved. Again however, we want to err to the conservative, so would are asking the District to budget 2% for this coverage. With this amount, combined with any savings achieved from a reduced rate, the District may be able to add more buildings to the schedule of covered buildings. I know that you and Karen are in discussion on this point, and I will leave it to the two of you to resolve this question as we get closer to the renewal date and a firm quote is received. As always, we look forward to discussing the programs and the renewal strategy in more detail with you, and appreciate the opportunity to be of service to the District. Ver y, De u l $ lor Ice n" (415)403-142 direct dmuluueeney(a),alliant.com Alliant Insurance Services,Inc. • 100 Pine Sheet, 10 Floor•San Francisco,CA 94111 rnoes(415)403-1400•wvm.alliantinsursncc.com•License No.OC36861 STEERING COMMITTEE nteaHngoae Tg ea.gf oir. os/za/I� os/z4/v AGENDA REPORT emNumber Iem2umber z zt Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Robert P. Ghirelli, Assistant General Manager SUBJECT: ADOPTION OF UPDATED RESOLUTION ON RULES OF PROCEDURE GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 17-08, entitled, "A Resolution of the Board of Directors of Orange County Sanitation District Fixing and Establishing Rules of Procedure for the Conduct of Business of the District, and Repealing Resolution No. OCSD 15-27." BACKGROUND The procedures are being updated at this time to reflect a new start time of 12:00 p.m.for the Legislative and Public Affairs Committee meetings; designating Committee assignment for the Board Chairperson and Board Vice-Chairperson's appointed Alternate Directors; and minor clerical revisions. RELEVANT STANDARDS • CA Government Code Section 54950 et seq. • Comply with transparency and communication requirements, including the Brown Act PRIOR COMMITTEE/BOARD ACTIONS December 2015 - Adopted Resolution No. OCSD 15-27, "A Resolution of the Board of Directors of Orange County Sanitation District Fixing and Establishing Rules of Procedure for the Conduct of Business of the District, and Repealing Resolution No. OCSD 15-01:' ADDITIONAL INFORMATION N/A ATTACHMENT The following attachment(s) is attached in hard copy and may be viewed on-line at the OCSD website (www.ocsd.com) with the complete agenda package: • Resolution No. OCSD 17-08 Page 1 of 1 RESOLUTION NO. OCSD 17-08 A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT ESTABLISHING RULES OF PROCEDURE FOR THE CONDUCT OF BUSINESS OF THE DISTRICT, AND REPEALING RESOLUTION NO. OCSD 15-27 WHEREAS it is necessary to establish rules of procedure to facilitate the orderly handling of business to come before the Orange County Sanitation District Board of Directors and Standing, Steering, Special and Ad Hoc Committees. NOW THEREFORE, the Board of Directors of the Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: Rules of Procedure. That the following rules of procedure be adopted for the conduct of business of the District: A. Regular Meetings. There shall be a regular monthly meeting of the Board of Directors of the District on the fourth Wednesday of every month at 6:00 p.m., in the Administrative Offices of the District, located at 10844 Ellis Avenue, Fountain Valley, California; provided, however, if the fourth Wednesday of the month falls upon a legal holiday, said monthly meeting shall be held on the next day thereafter, at the same time and place, unless the Board adjourns to a different date and time. The Board of Directors may adjourn any regular, special or adjourned special meeting to a time and place certain, as specified in the order of adjournment. B. Special Meetings. A special meeting of the Board of Directors may be called in either one of the following ways: (1) By the Chairperson of the Board of Directors; or (2) By the written request of a majority of the Steering Committee delivered to the Clerk of the Board. The call or notice for special meeting shall be in writing and delivered personally or by mail at least twenty-four (24) hours before the time of such meeting, as specified in the notice. Any notice deposited in the regular mail addressed to a Director at the address he or she has on file with the Clerk of the Board postage prepaid, sixty (60) hours in advance of any such meeting as specified in the notice, shall be presumed to have been delivered. The call or notice shall specify the time and place of the special meeting, a description of the business to be transacted, and copies of all pertinent written materials. OCSD 17-08-1 Such written notice may be dispensed with as to any Director or Alternate Director who, at or prior to the time the meeting convenes, files with the Clerk of the Board a written waiver of notice. Such waiver may be given by facsimile or electronic mail. Such written notice may also be dispensed with as to any member who is actually present at the meeting at the time it convenes. The Clerk of the Board shall diligently attempt to notify each Director personally of the time, place and purpose of said meeting, not less than twenty-four(24) hours before the time of said meeting. The call or notice shall be posted in the administrative offices' public lobby at least twenty-four (24) hours prior to the special meeting. C. Meetings Adjourned by Clerk of the Board. If at any regular, adjourned regular, special or adjourned special meeting, there is not a quorum of Directors present, the Clerk of the Board may declare the meeting adjourned to a stated time and place and shall cause written notice of the adjournment to be given in the same manner as for a special meeting, unless such notice is waived as provided for in special meetings. Within twenty-four (24) hours after the time of the adjournment, a copy of the order or notice of adjournment shall be conspicuously posted on or near the door of the place where the meeting was held. D. Notices to News Media. When any local newspaper of general circulation, radio or television station requests, in writing, notices of meetings of the Board of Directors, the Clerk of the Board shall thereafter, until receipt of a notice terminating said request, deliver notices of regular, regular adjourned and special adjourned meetings to such newspapers, radio or television stations. Delivery shall be made in the same manner as delivery is made to the Directors. E. Conduct of Meetings. (1) Procedural Rules. The procedural rules for debate and action shall be as set forth in Table 1, attached hereto and adopted herein by reference. Robert's Rules of Order shall not be applicable or govern the procedures for the conduct of Sanitation District business. (2) Legal Officer. In any case of ambiguity or uncertainty in the interpretation or application of these Rules to any procedure, the presiding officer may direct such question for a ruling to the Board's General Counsel, who shall be the parliamentarian of the Board. (3) Obtaining the Floor and Making Motions. Any member of the Board wishing to speak, or any member of the public wishing to address the Board, must first be recognized by the Chairperson. The Chairperson must recognize any member of the Board who seeks the floor when appropriately entitled to address the Board. Any member of the Board, including the Chairperson, may bring a matter of business properly before the Board by making a motion. Any member, including OCSD 17-08-2 the Chairperson, except the member making the motion, may second the motion. Once a motion is seconded, it may be opened for discussion and debate, in accordance with the procedures in Subsection (4) below. (4) Rules for Discussion. Debate and Deliberation by the Board. The procedures for consideration and action on all matters to come before the Board shall be in compliance with the terms of this Section, as follows: (a) Each item on the Agenda will be introduced in a form of a report by either Staff or Counsel. (b) Upon completion of the report, the Chairperson will allow for direct questions regarding the item, by Directors, each in turn, and in the order as selected by the Chairperson. (c) Upon completion of the question period, the Chairperson will entertain a motion and second for consideration by the Board. (d) Discussion among the Directors will follow. Each Director will be recognized to address the Board in the order selected by the Chairperson, with a five (5) minute time limit for each Member wishing to speak on the Agenda item, unless the time limit is waived by the Chairperson. There will be no interruptions of the Director who has been recognized. Attempted interruptions will be declared out-of-order, and the Board Member attempting to interrupt will be asked to remain silent until recognized. (a) As an additional courtesy to everyone, repetition of comments will be discouraged in the interest of time, and at the discretion of the Chairperson, can be declared out-of-order. (f) After each Member who wishes to speak has been recognized and completed his/her remarks, a single three (3)minute period of rebuttal will be allowed any Director, unless the time limit is waived by the Chairperson. (g) If it appears to the Chairperson that any Director is pursuing a line of questioning or commentary due to lack of preparation or prior review with the District's Staff, the Director's time will be declared to have been used up, and no further inquiry will be allowed. (h) Upon adoption of a motion on an Agenda item, there will be no further discussion of that item. (5) Decorum in Debate. All Members shall address their remarks to the Chairperson and confine them to the business then pending and subject to discussion before the Board, avoiding personalities and reflections upon anyone's motives. OCSD 17-08-3 (6) Closing or Limiting Debate. At all times the Board shall endeavor to allow free and open debate among Members of the Board. However, in the discretion of the Chairperson, it may become necessary to close or limit debate, so that action can be taken by the Board. An order by the Chairperson closing or limiting the debate can only be set aside by a majority vote of the Board. F. Quorum. A majority of the Directors shall constitute a quorum of the Board. G. Chairperson and Vice Chairperson of the Board. A Chairperson and Vice Chairperson of the Board shall be elected by a majority vote of Directors at the regular meeting in June of each year, and will assume office July 1st. The nominations for Chairperson and Vice Chairperson shall be made at the regular Board meeting in May of each year. Any person nominated for Chairperson shall be deemed to be nominated for Vice Chairperson in the event the person is not elected as Chairperson. Thereafter, the nominees shall prepare a statement setting forth their qualifications for the office sought. The statements shall be mailed to members of the Board of Directors with the Agenda and other meeting material for the June regular meeting. If only one individual is nominated for Chairperson at the regular Board meeting in May, that individual shall be deemed elected as Chairperson, no election shall be held in June, and the individual shall assume office July 15'. If only one individual is nominated for Vice Chairperson at the regular Board meeting in May, that individual shall be deemed elected as Vice Chairperson, no election shall be held in June, and the individual shall assume office July 1 St. The Chairperson and Vice Chairperson shall serve at the pleasure of a majority of the Directors. In the event the office of Chairperson becomes vacant due to resignation or retirement of the incumbent prior to the expiration of the regular term, the Vice Chairperson shall automatically succeed to the office of the Chairperson and shall continue to serve through the remainder of the regular term unless sooner removed by action of a majority of the Directors. In the event the office of Vice Chairperson becomes vacant prior to the expiration of the regular term, nominations and the election of a Director to serve in that capacity shall be conducted at the next regular Board meeting. The person so elected shall serve the balance of the regularly-scheduled term unless sooner removed as a result of action by a majority of the Directors. The Chairperson shall not serve more than two consecutive one-year terms for which he/she has been elected to the office of Chairperson. The Vice Chairperson shall not serve more than two consecutive one-year terms for which he/she has been elected to the office of Vice Chairperson. H. Presiding Officer. The Chairperson of the Board shall preside during meetings of the Directors. In the absence of the Chairperson, the Vice Chairperson shall preside. I. Clerk of the Board and Minutes. The Board of Directors shall have a person designated to serve as Clerk of the Board. The Clerk of the Board will be appointed to OCSD 17-08-4 the position by the General Manager and shall report to the General Manager or a Department Head as designated by the General Manager. The Clerk of the Board will be a regular full time employee, subject to all the rules and policies applicable to all regular full time employees. The Clerk of the Board shall attend all meetings of the Board of Directors, unless excused by the Chairperson, and shall prepare an accurate record of each meeting for submission to the Directors and subsequent approval at the following meeting; provided, however, that when an adjourned, special or special adjourned meeting of the Board of Directors immediately precedes a regular meeting, Minutes of said meeting shall be submitted for approval at the next meeting of the Board following said regular meeting. In the preparation of Official Minutes of a meeting of the Board of Directors, the Clerk of the Board will not record the name of the Director who moves or who seconds the adoption of a motion or Resolution, except the vote of any individual Director shall be recorded upon that Director's request. The Minutes will reflect the votes by name of Director when required by provisions of state law. In the absence of the Clerk of the Board, a Deputy Clerk of the Board shall be appointed to exercise the duties of the Clerk of the Board. J. Regular Business to Come Before the Board of Directors. Insofar as practicable, all items of business to be taken up at a regular meeting of the Board shall be submitted to the Clerk of the Board, who shall include on the Agenda all such items submitted by Directors, the General Manager and General Counsel, and all formal communications. The Clerk of the Board shall mail to each Director a notice of such regular meetings, together with a proposed Agenda, not later than the Friday immediately preceding such regular meetings. Said Agenda, insofar as possible, shall include copies of Resolutions, except as hereafter provided, and a description of all matters to be considered, together with any pertinent written materials. Agendas shall be posted in a location freely accessible to the public not less than seventy-two (72) hours in advance of the meeting. Resolutions designated as "standard" and adopted by the Board of Directors from time to time,and approved as to form and content, need not be included with said Agenda; provided, however,that the information completing said standard Resolutions shall be set forth on the Agenda listing, and copies of said standard Resolutions shall be on file with the Clerk of the Board at the meeting time and place. Items of business not known at the time the regular Agenda is mailed as herein provided, may be considered as supplemental Agenda items; provided that all requirements of the Ralph M. Brown Act (California Government Code Sections 54950 at seg.) are satisfied. OCSD 17-08-5 No business, except with consent of two-thirds of the Directors present(a majority of Directors present for emergency actions), and only if permitted by the Ralph M. Brown Act, not appearing on the regular or supplemental Agendas may be brought before the Board of Directors. The meeting Agenda shall provide for an opportunity for members of the public to address the Board on items on the Agenda and non-Agenda items of public interest. As determined by the Chairperson, speakers may be deferred until the specific Agenda item is taken for discussion, and remarks may be limited to three (3) minutes. Speakers on non-Agenda items may address only items that are within the subject matter jurisdiction of the Board of Directors. Time allotted for such presentations is limited to three (3) minutes or less. Total time allotted for all public input on each non-Agenda item is limited to thirty (30) minutes to one (1) hour, taking into consideration the number of persons filing a request to address the Board. However, time allotments may be waived by a majority vote of the Board. K. Handling of Business and Voting. During the course of a Board meeting, routine matters listed on the Agenda for consideration will be referred to by Agenda Item Number only. Voting on all Resolutions shall be by roll call, except if waived by unanimous voice vote, in which event, the Chairperson may order a unanimous ballot cast in favor of the motion or Resolution under discussion. The name of each Director shall be called only once. On matters of considerable interest or on which there appears to be a controversy, the motion or Resolution shall be read by title or repeated by the Chairperson. The Chairperson shall thereafter call for discussion of the motion or Resolution, at which time any member may discuss the pending matter. Any person other than a Director present at the meeting may speak on the motion if recognized by the Chairperson. Sole discretion as to the extent of discussion outside of the membership of the Board shall rest with the Chairperson. At the close of discussion, the Chairperson may, at the Chairperson's discretion, repeat the motion or Resolution pending, and thereafter, call for a vote. The Clerk of the Board shall determine and state whether or not a motion or Resolution is adopted by roll call vote. On all other matters, the Chairperson shall determine the outcome of the voting. L. Committees. (1) Standing Committees. (a) Steering Committee: There shall be a permanent Committee designated as the Steering Committee, comprised of the Chairperson of the Board, the Vice Chairperson of the Board, the Chairperson of each of the Standing Committees, and three at-large members selected by the Chairperson of the Board. The Vice Chairperson OCSD 17-08-6 of each of the two Standing Committees shall serve as the designated Alternate, in the absence or inability to serve by any Chairperson. In the absence or inability of any designated member of the Steering Committee to serve, his/her city appointed Alternate Director may not serve in that member's absence. The Committee shall also conduct an annual performance evaluation of the General Manager and submit recommendations on his/her compensation to the Board of Directors. The Committee shall also review the General Manager's evaluation and compensation of the executive management employees, based on established criteria, and executive management's goals and objectives for the following year. The Committee shall conduct an annual performance evaluation of General Counsel and submit recommendations to the Board of Directors as provided by Resolution No. OCSD 12-03. The Committee shall make recommendations to the Board of Directors on labor negotiations and other related activities as may be needed or appropriate. The Committee shall also be authorized to assign new subjects of significant importance to the appropriate Standing Committee for study, evaluation and recommendation. The Steering Committee shall meet on the fourth Wednesday of each month at 5:00 p.m. preceding the Board's meeting, or at the call of the Chairperson of the Board of Directors. (b) Administration Committee: There shall be a permanent Administration Committee (Finance, Human Resources and Information Technology) to advise the Staff and make recommendations on matters related to the financial, budgeting, administrative and personnel policies and programs of the District. The Committee shall review with the Staff the procedures for development, preparation and format of the annual budget and recommend appropriate change, and counsel the Staff during the budget process to assure the proper interpretation and implementation of the Board's policies and that the desired procedures have been followed. The responsibility for consideration and adoption of the District budget rests with the Board of Directors. The Committee shall periodically interview and recommend the selection of outside auditors. The Committee shall review the result of the annual audit of the District's accounts with representatives of the outside audit firm, including any comments received recommending improvements. The Committee shall review management's response to these comments and make appropriate recommendations for implementation. OCSD 17-08-7 Periodically, the Committee shall recommend employment of an outside firm to audit internal control procedures to safeguard the assets of the District. The Committee shall interview and make recommendations on the employment of investment-banking firms, bond counsel and, if necessary or desired, financial advisors, to be used in connection with the District's financing programs. The Committee shall periodically coordinate recommendations on personnel audits of the District's operations or segments of the operations on an as-needed basis. The Committee shall make recommendations on personnel policies and procedures, insurers and coverage, procurement procedures and such other related activities as may be needed or appropriate. The Chairperson of the Board of Directors shall appoint a Committee Chairperson and a Committee Vice Chairperson for the Administration Committee. The Committee Chairperson and Committee Vice Chairperson shall serve at the pleasure of the Chairperson of the Board of Directors. The Administration Committee shall consist of thirteen members, as follows: (1)The Chairperson of the Board of Directors; (2)The Vice Chairperson of the Board of Directors; (3)The Committee Chair of the Administration Committee; (4)The Committee Vice Chair of the Administration Committee; and (5) Nine additional Board members appointed by the Chairperson of the Board of Directors. Other than the Board Chairperson and the Board Vice Chairperson, no Director who serves on the Operations Committee shall be eligible to serve on the Administration Committee. In the absence of the Board Chairperson, his or her alternate Director may attend meetings of the Administration Committee. The Administration Committee shall meet on the second Wednesday of each month at 5:00 p.m., or at the call of its Chairperson. (c) Operations Committee: There shall be a permanent Committee designated the Operations Committee (Engineering, Operations & Maintenance and Environmental Services). With the goal of compliance with all public health and environmental laws and regulations, the Operations Committee shall review and submit appropriate recommendations on the matters pertaining to the operation of the District Treatment Works, including such matters as current and projected service/flow OCSD 17-08-8 needs, level and quality of treatment, conservation, recycling and reuse activities and air quality issues. The Committee shall also review issues pertaining to the District's NPDES Ocean Outfall Discharge Permit, including annual review of the contractor(s) performing the ocean monitoring and research programs required as a condition of said permit, and related issues regarding protection of the marine waters off metropolitan Orange County's coastline from impacts resulting from the District's operations and discharge of treated wastewater. The Committee shall also review matters pertaining to contractual arrangements by the District to provide sewerage services to areas outside the District's boundaries or approved spheres of influence. The Committee shall review plans for the future needs of the District, explore alternatives and make recommendations to the Board of Directors. The Operations Committee shall also review and submit appropriate recommendations on matters pertaining to capital projects which address operational needs, including the selection of professional consulting services to assist in studying, planning and designing needed District Treatment Works and support facilities, including computerized systems, in accordance with the Board's established policies and procedures for procuring such services; the Committee shall further review construction projects for said facilities in accordance with applicable public works laws and Board policies. Said oversight shall include the contracts for professional services and public works construction projects and addenda or change orders thereto. In carrying out its responsibilities, the Committee shall receive advance notice and regular status reports on the projects from Staff, and monitor, visit and observe the District Treatment Works' operational functions and major capital construction projects. The Chairperson of the Board of Directors shall appoint a Committee Chairperson and a Committee Vice Chairperson of the Operations Committee. The Committee Chairperson and Committee Vice Chairperson shall serve at the pleasure of the Chairperson of the Board of Directors. The Operations Committee shall consist of fourteen members, as follows: (1)The Chairperson of the Board of Directors; (2)The Vice Chairperson of the Board of Directors; (3)The Committee Chair of the Operations Committee; (4)The Committee Vice Chair of the Operations Committee; and OCSD 17-08-9 (5)Ten (10)additional Board members appointed by the Chairperson of the Board of Directors. Other than the Board Chairperson and the Board Vice Chairperson, no Director who serves on the Administration Committee shall be eligible to serve on the Operations Committee. In the absence of the Board Vice-Chairperson, his or her Alternate Director may attend meetings of the Operations Committee. The Operations Committee shall meet on the first Wednesday of each month at 5:00 p.m., or at the call of its Chairperson. (d) Legislative and Public Affairs Committee: There shall be a permanent Committee designated as the Legislative and Public Affairs Committee, comprised of the Chairperson of the Board, the Vice Chairperson of the Board, and five at-large members selected by the Chairperson of the Board. The Committee shall advise the Staff and make recommendations on matters related to the legislative and public affairs programs of the District. The Legislative and Public Affairs Committee shall meet on the second Monday of each month at 12:00 p.m. or at the call of the Board Chairperson. (2) Special and Ad Hoc Committees. In addition to the Standing Committees, the Chairperson of the Board of Directors, or the Chairperson of a Standing Committee, or a majority of the Directors, may appoint from time to time, Special or Ad Hoc Committees to study and report on specific matters. Such Committees shall be temporary in nature, and their assignments shall pertain to a current, specific issue. Upon completion of the assigned task, the Ad Hoc or Special Committee will be dissolved. The Chairperson and Vice Chairperson of Special and Ad Hoc Committees shall be appointed by the Chairperson of the appointing authority. Each Special and Ad Hoc Committee shall meet at the call of its Chairperson. (a) Alternates: If a regular Director cannot attend a meeting of the Operations Committee, the Administration Committee or the full Board of Directors, the Director's alternate may attend in place of his or her regular Director. An alternate Director may not, however, attend a meeting of any other Committee in the absence of his or her regular Director. M. Motion to Refer to a Standing Committee. Any Director at a Board meeting may move to have a policy or any other activity affecting the Sanitation District, or any one of the member Agencies, referred to a Standing Committee for study and report. This motion shall be a privileged motion, and when duly seconded, discussion thereof shall be limited to Directors only. Said motion shall receive an affirmative vote of a majority of the Directors for adoption. OCSD 17-08-10 Section 2: Procedure for Consideration of Demands for Corrective Action. A. Requirement of Written Demand. Prior to any person commencing ajudicial action for injunction or mandamus to declare any action taken by the Board void because of failure to observe Brown Act requirements, such person must first serve upon the Clerk of the Board a written demand describing the alleged violation and demanding corrective action. Such demand must be served upon the Clerk of the Board within thirty (30) days of the complained of action. Failure to serve any such demand within this thirty (30) day period shall result in the loss of any right to challenge any action to have been taken in violation of Sections 54953, 54954.2 or 54956 of the California Government Code. B. Consideration of Corrective Action. Upon receipt of such a demand, consideration of the demand shall immediately be placed on the Agenda for the next meeting of the Board of Directors. If the demand is received less than seventy-two (72) hours prior to the time set for the next meeting, the Board may determine that the notice constitutes the initiation of litigation, and that the need to take action on the threatened litigation arose subsequent to the posting of the Agenda, and may consider it at that meeting pursuant to Section 1(J) above. A description of any item so placed on the Agenda shall include both consideration of the demand, and the possibility of corrective action by the Board. In considering such demands, the Board shall first determine, by motion, whether corrective action should be taken. If no motion to take corrective action is carried, the Clerk of the Board shall inform the demanding party in writing of the Board's decision not to cure or correct the challenged action. C. Implementing Corrective Action. If a motion to take corrective action passes, the Chairperson may entertain a motion implementing corrective action. Any motion implementing corrective action shall address the concerns raised in the consideration of corrective action. The motion implementing corrective action may include a motion to rescind prior action taken, as appropriate. Passage of a motion to rescind invalidates prior action only as of the time of the passage of the motion, and not from the date of the initial action. A motion implementing corrective action resulting from a written demand is out-of-order if the action complained of(a)was in connection with the sale or issuance of notes, bonds, or other evidences of indebtedness, or any contract, agreement, or incident thereto; or (b) gave rise to a contractual obligation upon which a party has, in good faith, detrimentally relied. In any event, the Board shall notify the party making the demand in writing of its decision to take corrective action, and shall describe any corrective action taken. This notice shall be given to the demanding party as soon as possible after the meeting, but in no event more than thirty (30) days after receipt of the demand. Section 3: Resolution No. OCSD 15-27 is hereby repealed. Section 4: This Resolution shall become effective immediately. OCSD 17-08-11 PASSED AND ADOPTED at a regular meeting of the Board of Directors held May 24, 2017. Gregory C. Sebourn Board Chairman ATTEST: Kelly A. Lore Clerk of the Board APPROVED AS TO FORM: Bradley R. Hogin General Counsel OCSD 17-08-12 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 17-08 was passed and adopted at a regular meeting of said Board on the 2411 day of May, 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 24th day of May, 2017. Kelly A. Lore Clerk of the Board of Directors Orange County Sanitation District OCSD 17-08-13 TABLE 1 BOARD PROCEDURES AND ORGANIZATION SUMMARY OF MOTIONS A. PRIVILEGED MOTIONS Kind of Second Vote Motion Required Debatable Amendable Required Purpose Adjourn Yes No No Majority To end the meeting To Take a Yes No No Majority To interrupt a Recess meeting for a short time or to provide an intermission Raise a No No No None To obtain action Question of immediately in an Privilege emergency B. MAIN MOTION AND RELATED SUBSIDIARY MOTIONS Kind of Second Vote Motion Required Debatable Amendable Required Purpose Main Yes Yes Yes Majority To introduce new Motion business Amend Yes Yes Yes Majority To modify or alter a Main motion Motion Substitute Yes Yes Yes Majority To replace the main Motion motion entirely OCSD 17-08-14 Previous Yes No No Majority To close debate on Question the main or amended motion immediately Continue to Yes Yes Yes Majority To defer action a Certain Time To Table Yes No No Majority To discontinue consideration until brought back by vote of the Board Take a Yes No No Majority To bring before the Motion group a motion from the previously tabled Table Limit or Yes No Yes Majority To limit or extend Extend limits of debate Limits of Debate Refer to a Yes Yes Yes Majority To place business in Committee hands of a Committee Withdraw a No No No None To withdraw a Motion motion before it is voted on Reconsider Yes Yes No Majority To secure a new must be vote on a motion by a previously voted Director upon who voted for the prevailing side on the original motion OCSD 17-08-15 C. INCIDENTAL RULES NON-RANKING Kind of Second Vote Motion Required Debatable Amendable Required Purpose Request to Yes No No Two- To facilitate business Suspend Thirds ordinarily contrary to the Rules the rules of the organization Override Yes No No Majority To have Board Order of majority rule on the the Chair order Point of No No No None To enforce the rules Order of the organization OCSD 17-08-16 STEERING COMMITTEE Melting D310 TOBE.Or Dir. 0s/24117 os/z4/17 AGENDA REPORT Item Item Number 3 22 Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: LEGAL SERVICES WITH LEWIS BRISBOIS BISGAARD & SMITH, LLP GENERAL MANAGER'S RECOMMENDATION Authorize an increase of $150,000 to sole source Purchase Order 105851-OB to Lewis Brisbois Bisgaard & Smith, LLP for legal services, for a total cost of$225,000. BACKGROUND When the Orange County Sanitation District's (Sanitation District) primary legal counsel has a conflict of interest, matters are referred to a secondary legal counsel. Due to a conflict of interest, the Sanitation District has secured the legal services of Lewis Brisbois Bisgaard & Smith, LLP (LBBS) related to matters involving the Orange County Transportation Authority (OCTA) and the City of Newport Beach. In partnership with the California Department of Transportation (Caltrans), OCTA proposes, Interstate 405 Improvement Project (OCTA 405 Project) to widen Interstate 405 between State Route 73 and Interstate 605. Multiple Sanitation District sewers and structures, both inside and outside of Plant No. 1, will conflict with the OCTA 405 Project and will require modifications and/or relocations. The OCTA 405 Project will also construct an on-ramp to the southbound Interstate 405 beginning at Ellis Avenue near the Sanitation District's Plant No. 1 entrance. OCTA is also managing the OC Streetcar Project, which proposes an alignment that will cross or run parallel with Sanitation District sewer pipes, affecting maintenance, and future rehabilitation. The City of Newport Beach has proposed the transfer of certain land rights adjacent to the 15th Street Pump Station to the Sanitation District. The Sanitation District is also seeking to initiate legal action to confirm property rights to a small parcel of land in or adjacent to Plant No. 1. RELEVANT STANDARDS • Maintain collaborative and cooperative relationships with neighboring agencies • Protection of Orange County Sanitation District assets • Ensure the public's money is wisely spent 4844-99135047.1 Page 1 of 4 PROBLEM OCTA has several projects throughout the service area including the OCTA 405 Project and the OC Streetcar. In January 2017, OCTA sent the Sanitation District a Notice of Decision to Appraise the taking of certain property interests at Plant No. 1. That Notice of Decision to Appraise initiates the eminent domain process. In addition, OCTA has sought to modify or protect in place many Sanitation District sewers which will require multiple utility modification agreements. The Sanitation District needs legal services to review, draft, and negotiate utility modification agreements, to provide counsel during the eminent domain process, and to provide counsel with respect to the proposed OC Streetcar impacts. The Sanitation District also needs legal services in connection with matters involving the City of Newport Beach, and in connection with legal action to confirm property rights in or adjacent to Plant No. 1. PROPOSED SOLUTION Procure legal services to assist the Sanitation District in matters related to OCTA and Plant No. 1, as well as one matter related to the City of Newport Beach. TIMING CONCERNS OCTA has established schedules for both of its projects. The Sanitation District would like to work cooperatively with OCTA to meet its schedules and have legal counsel available to review agreements and provide counsel. In November 2016, OCTA awarded a Design-Build contract for the OCTA 405 Project. In January 2017, OCTA issued to the Sanitation District a Notice of Decision to Appraise, which initiates the eminent domain land acquisition process. The Sanitation District would like to have legal counsel in order to effectively and timely evaluate impacts and negotiate with OCTA to ensure that all impacts to the Sanitation District are mitigated, that the Sanitation District receives just compensation for any property acquisition and related impacts. OCTA has advised that in order to meet its project schedule, OCTA must acquire the property rights from the Sanitation District by January 2018, or OCTA will commence eminent domain proceedings. RAMIFICATIONS OF NOT TAKING ACTION Without action, the Sanitation District would not have legal counsel on matters related to OCTA or the Newport Beach transaction, or could delay the OCTA Project. PRIOR COMMITTEE/BOARD ACTIONS N/A 4844-9913-5047.1 Page 2 of 4 ADDITIONAL INFORMATION The OCTA Projects will have numerous impacts to the operations and facilities of the Sanitation District. At Plant No. 1, the OCTA 405 Project plans to construct a new on- ramp to the southbound Interstate 405 that will require the relocation of the current Ellis Avenue entrance, the guard shack, utilities, wastehauler receiving station, CNG gas station, and electric vehicle charging stations. In addition, the OCTA 405 Project has already impacted the Sanitation District's schedule and siting of a new headquarters complex including parking during and after construction. The OCTA 405 Project also includes 22 locations throughout the county where Sanitation District sewers are impacted, and will require relocation, modification, reconstruction, or build-over of existing Sanitation District sewers. The OCTA 405 Project will require a total of at least ten agreements with the Sanitation District, including a Cooperative Agreement, a Land Acquisition Agreement, and eight Utility Agreements. A Cooperative Agreement was approved by the Sanitation District Board of Directors (Board) in August 2016 and accepted OCTA's proposal to relocate the interim Plant No. 1 main entrance, and to modify and relocate onsite Plant No. 1 utilities. The Cooperative Agreement included the following terms: • OCTA to fund the design and construction of the new interim entrance and relocate utilities at current Ellis Avenue entrance • Sanitation District to review and approve the new interim entrance design and utility relocation plans • Sanitation District to inspect and accept new interim entrance construction and utility relocations • OCTA to reimburse the Sanitation District costs up to $470,000 for design and legal review Eight separate Utility Agreements will address the OCTA 405 Project impacts to the Sanitation District collection system, including relocation, modification, or reconstruction of existing Sanitation District sewers. The Utility Agreements will include the following terms: • OCTA to fund the relocation, reconstruction,and protection of multiple regional sewers crossing Interstate 405 • OCTA to reimburse Sanitation District staff costs to review and approve designs • OCTA to reimburse Sanitation District staff costs to inspect and accept construction work • OCTA to reimburse the Sanitation District staff costs to administer the agreements 4844-99135047.1 Page 3 of 4 OCTA also proposes to enter into a Land Acquisition Agreement to acquire certain Sanitation District property rights including: • A purchase of land to construct, maintain and operate the on-ramp • Permanent and temporary construction easements to benefit Caltrans, Southern California Edison, the Orange County Water District, and the City of Fountain Valley The Sanitation District will also seek to include in the Land Acquisition Agreement reimbursement for agency impacts, including delay costs for the headquarters complex, temporary and permanent parking impacts, existing facility relocation costs including design and CEQA preparation, staff planning and coordination, and legal and appraisal support costs. Sanitation District staff will present this agreement to the Board in the upcoming months, and the reimbursement amount has not yet been determined. A Purchase Order to Lewis Brisbois Bisgaard & Smith, LLP was issued in October 2016 and due to the complex nature of the transactions with OCTA, staff anticipates additional expenses to provide counsel. The Sanitation District will seek reimbursement for these costs to the extent possible. CEQA N/A FINANCIAL CONSIDERATIONS For costs related to the OCTA 405 Project, the funds will be allocated from the Replacement, Rehabilitation, and Refurbishment budget in the cash flow projections, FY 2016-17 and 2017-18, Section 4, Page 16, Item 14. However, the Sanitation District will seek reimbursement by OCTA to the extent possible. For services related to other OCTA-related expenses, Plant No. 1 property rights, and the City of Newport Beach, this item has been budgeted (FY 2016-17 Line item: Professional and Contractual Services, Section 6, Page 56). ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: N/A CD:sa:gc 4844-99135047.1 Page 4 of 4 STEERING COMMITTEE Melting Dat0 TOBE.Or Dir. gs/24117 OS/za/17 AGENDA REPORT ItemNumber Item Number a zs Orange County Sanitation District FROM: James D. Herberg, General Manager Originator: Rob Thompson, Director of Engineering SUBJECT: APPRAISAL SERVICES WITH MASON AND MASON, INC.; AND RIGHT- OF-WAY CONSULTING SERVICES WITH STADIA REALTY, INC. GENERAL MANAGER'S RECOMMENDATION A. Authorize an increase of $100,000 to sole source Purchase Order 105903-OB to Mason and Mason, Inc. for appraisal services related to the California Department of Transportation/Orange County Transportation Authority Interstate 405 Improvement Project impacts for a total cost of$140,000; and B. Authorize an increase of $281,800 to sole source Purchase Order 105925-OA to Stadia Realty, Inc. for right-of-way project management consulting related to the California Department of Transportation/Orange County Transportation Authority Interstate 405 Improvement Project impacts for a total cost of$377,800. BACKGROUND In partnership with the California Department of Transportation (Caltrans), the Orange County Transportation Authority (OCTA) proposes Interstate 405 Improvement Project (OCTA 405 Project) to widen Interstate 405 between State Route 73 and Interstate 605. Multiple Orange County Sanitation District (Sanitation District) sewers and structures, both inside and outside of Plant No. 1, will conflict with the OCTA Project and will require modifications and/or relocations. The OCTA 405 Project will also construct an on-ramp to the southbound Interstate 405 beginning at Ellis Avenue near the Sanitation District's Plant No. 1 entrance. OCTA has initiated the eminent domain process by issuing a Notice to Appraise in January 2017. Sanitation District's special counsel, Lewis Brisbois Bisgaard & Smith, LLP (LBBS), has contracted appraisal and right-of-way services to assist with the valuation, right-of-way evaluations of impacts to the Sanitation District, coordination of communication with OCTA and its contractors, and the negotiation process. Staff is seeking additional funds for these contracts. OCTA has already hired outside appraisers and right-of-way firms to assist in the eminent domain process. RELEVANT STANDARDS • Maintain collaborative and cooperative relationships with neighboring agencies • Protection of Orange County Sanitation District assets • Ensure the public's money is wisely spent Page 1 of 4 PROBLEM The OCTA 405 Project will have numerous temporary and permanent impacts to the operations and useful function of the impacted Sanitation District facilities. OCTA's appraiser will assess the fair market value of the proposed acquisition from the Sanitation District. Without sufficient information from the Sanitation District, OCTA may not provide a complete, fair offer for the impacts, which include project schedule delays, loss of business function, internal traffic routing changes, as well as property loss. The Sanitation District requires appraisal and right-of-way consulting services to provide guidance in the eminent domain process, expertise in assessing and quantifying the complex impacts of the OCTA 405 Project, and to support timely response to the complex information requests of OCTA. PROPOSED SOLUTION Procure appraisal and right-of-way consulting services to assist the Sanitation District to properly estimate the financial, operational, and physical impacts from the OCTA 405 Project and assist the Sanitation District and its legal counsel to communicate effectively with and negotiate workable solutions to the challenges created by the OCTA 405 Project. TIMING CONCERNS In November 2016, OCTA awarded a Design-Build contract for the OCTA 405 Project. In January 2017, OCTA issued to the Sanitation District a Notice of Decision to Appraise, which initiates the eminent domain land acquisition process. The Sanitation District would like to have appraisal and right-of-way consulting services available to provide support to staff and legal counsel in order to effectively and timely evaluate impacts and negotiate with OCTA to ensure that all impacts to the Sanitation District are mitigated, and that the Sanitation District receives just compensation for any property acquisition and related impacts. OCTA has advised that in order to meet its project schedule, OCTA must acquire the property rights from the Sanitation District by January 2018, or OCTA will commence eminent domain proceedings. RAMIFICATIONS OF NOT TAKING ACTION Without action, the Sanitation District would not have appraisal services to assess and quantify impacts related to the OCTA projector could delay the OCTA project. In addition, the Sanitation District could miss critical timelines in the eminent domain process, which could result in the loss of financial compensation or the opportunity to negotiate solutions that enable the Sanitation District to maintain its business functionality. PRIOR COMMITTEE/BOARD ACTIONS N/A Page 2 of 4 ADDITIONAL INFORMATION The OCTA Project will have numerous impacts to the operations and facilities of the Sanitation District. These impacts include, but are not limited to: • Parking reconfiguration, loss of parking • Traffic circulation • Replacement property • Potential for Southern California Edison power lines relocating onto Sanitation District property • Demolition costs • Employee relocation • Relocation of CNG Gas Station and Wastehauler Station • Headworks Refurbishment Project and long-term maintenance impacts • Headquarters complex project delays and relocation • Utility relocations • Easements • Loading zone • Pedestrian safety • Professional services • Sanitation District staff time (distraction from core work) • Legal services OCTA proposes to enter into a Land Acquisition Agreement to acquire Sanitation District property and provide just compensation. The Land Acquisition Agreement has not been drafted, but elements are expected to include: • A purchase of land to construct, maintain, and operate the on-ramp • Permanent and temporary construction easements to benefit Caltrans, Southern California Edison, the Orange County Water District, and the City of Fountain Valley • Sanitation District permanent entrance design and construction, security, public parking access, relocation of waste hauler station, coordination of OCTA Project with Sanitation District Headquarters Complex project, and possible temporary housing of staff at an off-site location The Sanitation District will also seek to include in the Land Acquisition Agreement mitigation measures and compensation for agency impacts. The right-of-way and appraisal services proposed here would assist the Sanitation District in determining the mitigation options and just compensation, as well as providing a direct interface with OCTA's contract staff to keep the project moving. The Sanitation District's special legal counsel, LBBS, advised that the services of an appraiser would be necessary to assist in determining just compensation, and has recommended the services of Mason and Mason, Inc. Mason and Mason, Inc. is experienced in similar appraisals and the Sanitation District has procured these services through LBBS, but is seeking additional funds. Page 3 of 4 This work product is privileged and confidential. A purchase order was issued for$40,000 to Mason and Mason, Inc. in January 2017. As the Sanitation District became aware of the complexity of the process and impact, staff believes an additional amount of$100,000 is necessary to meet OCTA timeliness and protect the Sanitation District's interest, for a total cost of$140,000. The Sanitation District will seek reimbursement for these costs to the extent possible. LBBS also advised staff that the services of a right-of-way project management consultant would assist LBBS and the Sanitation District in the eminent domain process, and recommended the services of Stadia Realty, Inc. Stadia Realty, Inc. is an eminent domain land acquisitions right-of-way consultant experienced in providing real estate-related consulting services to both public and private parties. Stadia's scope includes review and analysis of OCTA Project impacts on Sanitation District property and operations, preparation of timelines and presentations, proposal of solutions to Sanitation District staff, and coordination and liaison between both agencies. Stadia has performed a significant amount of work to date in preparing the Sanitation District for recent meetings with OCTA including the site visit for the appraisal. This work is being performed in conjunction with legal counsel's representation of the Sanitation District, and at legal counsel's direction, and therefore, the work product is privileged and confidential. In February 2017, a $96,000 purchase order was issued to Stadia Realty, Inc. The Sanitation District will seek reimbursement for these costs to the extent possible. An additional amount of$281,800 is being requested, for a total cost of$377,800. Staff continues to negotiate with OCTA to find the best technical, long-term solution, and to help offset cost impacts to changes that are attributable to the OCTA Project. CEQA N/A FINANCIAL CONSIDERATIONS The funds will be allocated from the Replacement, Rehabilitation, and Refurbishment budget in the cash flow projections, FY 2016-17 and 2017-18, Section 4, Page 16, Item 14. However, the Sanitation District will seek reimbursement from OCTA for these costs to the extent possible. ATTACHMENT The following attachment(s) may be viewed on-line at the OCSD website (wwwocsd.corn with the complete agenda package: N/A CD:RD:sa:gc Page 4 of 4 CLOSED SESSION 1 ;Q WOODRUFF, SPRADI.IN&SMART 555 ANTON BOULEVARD, So1TE 1200 COSTA MESA, CA 92626-7670 (714)558 7W0 MEMORANDUM TO: Hon. Chair and Members of the Orange County Sanitation District Board of Directors FROM: Bradley R. Hogin, Esq. General Counsel DATE: May 16,2017 RE: Closed Session Items The Board of Directors desires to hold a closed session on May 24, 2016 for the purpose of conferring with its legal counsel regarding anticipated litigation. Existing facts and circumstances reflect a significant exposure to litigation against the District. The closed session will be held pursuant to the authority of California Government Code Section 54956.9(d)(2). The facts and circumstances are as follows: The District received a letter dated April 28, 2017 from the County of Orange threatening litigation over Resolution 17-07. Respectfully submitted, By: Bradley It. Hogin, G Aral Counsel u14544.( CLOSED SESSION 2 WOODRUFF JN SPRADI &SMART ♦ A P . . . . , . . 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: May 16,2017 RE: Closed Session Items The Board of Directors will hold a closed session on May 24, 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 CLOSED SESSION 3 WOODRUFF SPRADIJN&SMART 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: May 16,2017 RE: Closed Session Items The Board of Directors will hold a closed session on May 24, 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 his 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; 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. /f BradleY R. Hogin, Vieneral Counsel 11921611 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 CARS 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 US Environmental Protection Agency FOG Fats, Oils, and Grease gpd gallons per day GWRS Groundwater Replenishment System ICS Incident Command System IERP Integrated Emergency Response 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 & Maintenance OCCOG Orange County Council of Governments OCHCA Orange County Health Care Agency OCSD Orange County Sanitation District OCWD Orange County Water District OOBS Ocean Outfall Booster Station OSHA Occupational Safety and Health Administration PCSA Professional Consultant/Construction Services Agreement PDSA Professional Design Services Agreement POTW Publicly Owned Treatment Works ppm parts per million PSA Professional Services Agreement RFP Request For Proposal RWQCB Regional Water Quality Control Board Glossary of Terms and Abbreviations SARFPA Santa Ana River Flood Protection Agency SARI Santa Ana River Interceptor SARWQCB Santa Ana Regional Water Quality Control Board SAW PA Santa Ana Watershed Project Authority SCADA Supervisory Control And Data Acquisition SCAP Southern California Alliance of Publicly Owned Treatment Works SCAQMD South Coast Air Quality Management District SOCWA South Orange County Wastewater Authority SRF Clean Water State Revolving Fund SSMP Sewer System 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 W ERF Water Environment & Reuse Foundation WIFIA Water Infrastructure Finance and Innovation Act WIIN Water Infrastructure Improvements for the Nation Act W RDA Water Resources Development Act Activated sludge process — A secondary biological wastewater treatment process where bacteria reproduce at a high rate with the introduction of excess air or oxygen and consume dissolved nutrients in the wastewater. Benthos —The community of organisms, such as sea stars, worms, and shrimp, which live on, in, or near the seabed, also known as the benthic zone. Biochemical Oxygen Demand (BOD) — The amount of oxygen used when organic matter undergoes decomposition by microorganisms. Testing for BOD is done to assess the amount of organic matter in water. Biogas—A gas that is produced by the action of anaerobic bacteria on organic waste matter in a digester tank that can be used as a fuel. Biosolids—Biosolids are nutrient rich organic and highly treated solid materials produced by the wastewater treatment process. This high-quality product can be recycled as a soil amendment on farmland or further processed as an earth-like product for commercial and home gardens to improve and maintain fertile soil and stimulate plant growth. Glossary of Terms and Abbreviations Capital Improvement Program (CIP) — Projects for repair, rehabilitation, and replacement of assets. Also includes treatment improvements, additional capacity, and projects for the support facilities. Coliform bacteria—A group of bacteria found in the intestines of humans and other animals, but also occasionally found elsewhere, used as indicators of sewage pollution. E. coli are the most common bacteria in wastewater. Collections system— In wastewater, it is the system of typically underground pipes that receive and convey sanitary wastewater or storm water. Certificate of Participation (COP)—A type of financing where an investor purchases a share of the lease revenues of a program rather than the bond being secured by those revenues. Contaminants of Potential Concern (CPC) — Pharmaceuticals, hormones, and other organic wastewater contaminants. Dilution to Threshold (DIT) — The dilution at which the majority of people detect the odor becomes the D/T for that air sample. Greenhouse Gases (GHG) — 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 System (GWRS) — 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 per day of drinking quality water to replenish the local groundwater supply. Levels Of Service (LOS) — Goals to support environmental and public expectations for performance. N-Nitrosodimethylamine (NDMA) — A N-nitrosamine 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 and Water Environment Federation, with advisory support from the US Environmental Protection Agency. NBP is committed to developing and advancing environmentally sound and sustainable biosolids management practices that go beyond regulatory compliance and promote public participation 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. Glossary of Terms and Abbreviations Publicly Owned Treatment Works (POTW) —A 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 runoff. South Coast Air Quality Management District (SCAQMD) — Regional regulatory agency that develops plans and regulations designed to achieve public health standards by reducing emissions from business and industry. Secondary treatment — Biological wastewater treatment, particularly the activated sludge process, where bacteria and other microorganisms consume dissolved nutrients in wastewater. Sludge—Untreated solid material created by the treatment of wastewater. Total Suspended Solids (TSS)—The amount of solids floating and in suspension in wastewater. Trickling filter — A biological secondary treatment process in which bacteria and other microorganisms, growing as slime on the surface of rocks or plastic media, consume nutrients in wastewater as it trickles over them. Urban runoff—Water from city streets and domestic properties that carry pollutants into the storm drains, rivers, lakes, and oceans. Wastewater—Any water that enters the sanitary sewer. Watershed—A land area from which water drains to a particular water body. The Orange County Sanitation District's service area is in the Santa Ana River Watershed.